SUBADVISORY AGREEMENT
THE PHOENIX EDGE SERIES FUND
September 7, 2001
A I M Capital Management, Inc.
00 Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
WHEREAS, the Phoenix Edge Series Fund (the "Fund") is an open-end
investment company of the series type registered under the Investment Company
Act of 1940 (the "Act"), and is subject to the rules and regulations promulgated
thereunder;
WHEREAS, the shares of the Fund are offered or may be offered in
several series, including the Phoenix-AIM Mid Cap Equity Series (hereafter
referred to as the "Series");
WHEREAS, Phoenix Variable Advisors, Inc. (the "Advisor") represents
that it has entered into a Management Agreement dated as of December 19, 1999,
with the Fund and amended effective October 29, 2001, with respect to the
Series;
WHEREAS, the Advisor evaluates and recommends series advisors for the
Series and is responsible for the day-to-day management of the Series; and
WHEREAS, the Advisor desires to retain A I M Capital Management, Inc.,
a corporation organized under the laws of the State of Texas (the "Subadvisor"),
to furnish portfolio management services for the Series, and the Subadvisor is
willing to furnish such services.
NOW, THEREFORE, the Advisor and the Subadvisor agree as follows:
1. Employment as a Subadvisor. The Advisor, being duly authorized, hereby
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employs the Subadvisor to invest and reinvest the assets of the Series
on the terms and conditions set forth herein. The Subadvisor shall, for
all purposes herein, be deemed to be an independent contractor and
shall, except as expressly provided or authorized (whether herein or
otherwise), have no authority to act for or represent the Advisor,
Series or Fund in any way. The services of the Subadvisor hereunder are
not to be deemed exclusive; the Subadvisor may render services to
others and engage in other activities which do not conflict in any
material manner with the Subadvisor's performance hereunder. In
addition, it is understood that the persons employed by the Subadvisor
to assist in the performance of the Subadvisor's duties under this
Agreement will not devote their full time to such service and nothing
contained in this Agreement shall be deemed to limit or restrict such
right.
2. Acceptance of Employment; Standard of Performance. The Subadvisor
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accepts its employment as a subadvisor to the Advisor and agrees to use
its best professional judgment to make investment decisions for the
Series in accordance with the provisions of this Agreement.
3. Services of Subadvisor.
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(a) The Subadvisor shall provide the services set forth herein
and in Schedule A attached hereto and made a part hereof. In
providing management services to the Series, the Subadvisor
shall be subject to the investment objectives, policies and
restrictions of the Fund as they apply to the Series and as
set forth in the Fund's then current Prospectus and
Statement of Additional Information (as the same may be
modified from time to time), and to the Fund's Agreement and
Declaration of Trust; to the investment and other
restrictions set forth in the Act, the Securities Act of
1933, as amended, and the diversification requirements of
Section 817(h) of the Internal Revenue Code ("IRC"), the
provisions of Subchapter M of the IRC applicable to
regulated investment companies, including those which
underly variable annuities, the distribution requirements
necessary to avoid payment of any excise tax pursuant to
Section 4982 of the IRC and the rules and regulations
adopted under each such provision, and to the supervision
and direction of the Advisor, who in turn is subject to the
supervision and direction of the Board of Trustees of the
Fund. The Subadvisor shall not, without the Advisor's prior
approval, effect any transactions which would cause the
Series at the time of the transaction to be out of
compliance with any of such restrictions or policies. The
Subadvisor will keep the Fund and the Advisor informed of
developments materially affecting the Fund, and will, on its
own initiative, furnish the Fund and the Advisor from time
to time with whatever information the Sub-Advisor believes
is appropriate for this purpose.
(b) Subject at all times to the limitations set forth
in subparagraph 3(a) above, the Subadvisor shall have full
authority at all times with respect to the management of the
Series, including, but not limited to, authority to give
written or oral instructions to various broker/dealers,
banks or other agents; to bind and obligate the Fund to and
for the carrying out of contracts, arrangements, or
transactions which shall be entered into by the Subadvisor
on the Fund's behalf with or through such broker/dealers,
banks or other agents; to direct the purchase and sale of
any securities; and generally to do and take all action
necessary in connection with the Series, or considered
desirable by the Subadvisor with respect thereto. The
Subadvisor may maintain uninvested cash balances in the
Series as it shall deem reasonable without incurring any
liability for the payment of interest thereon.
4. Expenses. The Subadvisor shall bear all expenses incurred by it in
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connection with the performance of its services under this Agreement
including, but not limited to the provision of personnel, office
facilities and equipment necessary to perform its responsibilities
under this Agreement. The Series will bear certain other expenses to be
incurred in its operation, including, but not limited to, investment
advisory fees, subadvisory fees (other than subadvisory fees paid
pursuant to this Agreement) and administration fees; fees for necessary
professional brokerage services; costs relating to local administration
of securities; fees for any pricing service, the costs of regulatory
compliance; except those compliance costs related to AIM's
responsibilities under this Agreement, and pro rata costs associated
with maintaining the Fund's legal existence and shareholder relations.
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5. Transaction Procedures. The Subadvisor shall, in connection with
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the purchase and sale of investment orders for the Series, arrange for
the transmission either in writing or by confirmed electronic delivery
to the Custodian for the Series, or its designated depositories or
agents, on a daily basis, such confirmations, trade tickets, and other
documents and information including, but not limited to, CUSIP, Sedol,
or other numbers that identify cash and/or securities to be purchased
or sold on behalf of the Series, as may be reasonably necessary to
enable the Custodian to perform its responsibilities with respect to
the Series, and, with respect to portfolio securities to be purchased
or sold through the Depository Trust Company will arrange for the
automatic transmission of the confirmation of such trades to the
Custodian.. The Subadvisor shall advise the Custodian and confirm in
writing or by confirmed electronic transmission to the Fund all
investment orders for the Series placed by it with brokers and dealers
at the time and in the manner set forth in the Custodian Agreement and
in Schedule B hereto (as amended from time to time). The Fund shall be
responsible for all custodial arrangements and the payment of all
custodial charges and fees, and, upon giving proper instructions to the
Custodian, the Subadvisor shall have no responsibility or liability
with respect to custodial arrangements or the acts, omissions or other
conduct of the Custodian.
6. Allocation of Brokerage. The Subadvisor is responsible for
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decisions to buy and sell securities for each Series, broker-dealer
selection, and negotiation of brokerage commission rates. It is the
Subadvisor's responsibility in selecting a broker to effect a
particular transaction to seek to obtain "best execution." Consistent
with this policy, the Subadvisor, in selecting broker-dealers and
negotiating brokerage commission rates, will take all relevant factors
into consideration, including, but not limited to: the best price
available; the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; and
the value of the expected contribution of the broker-dealer to the
investment performance of the applicable Series on a continuing basis.
Subject to the requirements of best execution and the applicable
conduct rules of the National Association of Securities Dealers, the
Advisor may also request that the Subadvisor take into consideration
whether such broker-dealers sell fund shares. The Subadvisor shall have
discretion to effect investment transactions for each Series through
broker-dealers (including, to the extent permissible under applicable
law, affiliated broker-dealers) who provide brokerage and/or research
services, as such services are defined in Section 28(e) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and to
cause such Series to pay any such broker-dealers an amount of
commission for effecting a portfolio investment transaction in excess
of the amount of commission another broker-dealer would have charged
for effecting that transaction, if the Subadvisor determines in good
faith that such amount of commission is reasonable in relation to the
value of the brokerage or research services provided by such
broker-dealer, viewed in terms of either that particular investment
transaction of the Subadvisor's overall responsibilities with respect
to such Series and other accounts as to which the Subadvisor exercises
investment discretion (as such term is defined in Section 3(a)(35) of
the 1934 Act). Allocation of orders placed by the Subadvisor on behalf
of a Series to such broker-dealers shall be in such amounts and
proportions as the Subadvisor shall determine in good faith in
conformity with its responsibilities under applicable laws, rules and
regulations. In no event, however, will the Series be charged more than
the average price per share of the aggregate securities allocated
across all participating accounts. The Subadvisor will submit reports
on such allocations to the Advisor regularly as requested by the
Advisor, in such form as may be mutually agreed to by the parties
hereto, indicating the broker-dealers to whom such allocations have
been made and the basis therefore.
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7. Fees for Services. The compensation of the Subadvisor for its
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services under this Agreement shall be calculated and paid by the
Advisor in accordance with the attached Schedule C. Pursuant to the
Investment Advisory Agreement between the Fund and the Advisor, the
Advisor is solely responsible for the payment of fees to the
Subadvisor.
8. [Limitation of Liability. The Subadvisor, its officers, directors and
-----------------------
employees shall not be liable for any action taken, omitted or
suffered to be taken by it in its best professional judgment, in good
faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement, or in accordance
with specific directions or instructions from the Fund or Advisor,
provided, however, that such acts or omissions shall not have
constituted a breach of the investment objectives, policies and
restrictions applicable to the Series and that such acts or omissions
shall not have resulted from the Subadvisor's willful misfeasance, bad
faith or gross negligence, a violation of the standard of care
established by and applicable to the Subadvisor in its actions under
this Agreement; provided further, however, that this provision shall
not be construed to waive or limit any rights that the Fund may have
under federal or state securities laws.]
9. Confidentiality. Subject to the duty of the Subadvisor to comply with
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applicable law, including any demand of any regulatory or taxing
authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Series and the actions
of the Subadvisor and the Fund in respect thereof. Furthermore, except
as required by law (including, but not limited to semi-annual, annual
or other filings made under the 0000 Xxx) or as agreed to by the
Advisor and Subadvisor, the Advisor and Fund will not disclose any list
of securities purchased or sold by the Series for a period of 15 days
after month end, or any list of securities held by the Series for 90
days after month end in any manner whatsoever except as expressly
authorized in this Agreement, and except that the top 10 holdings may
be disclosed 15 days after month end. Nothing herein shall relieved the
Sub-Adviser of its responsibilities under this Agreement to provide
reports or information to the Adviser as requested pursuant to
Paragraph 13 below or Schedule A as they may be amended from time to
time.
10. Assignment. This Agreement shall terminate automatically in the event
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of its assignment, as that term is defined in Section 2(a)(4) of
the Act. The Subadvisor shall notify the Advisor in writing
sufficiently in advance of any proposed change of control, as defined
in Section 2(a)(9) of the Act, as will enable the Advisor to consider
whether an assignment as defined in Section 2(a)(4) of the Act will
occur and to take the steps it deems necessary.
11. Representations, Warranties and Agreements of the Subadvisor. The
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Subadvisor represents, warrants and agrees that:
A. It is registered as an "investment adviser" under the Investment
Advisers Act of 1940 ("Advisers Act").
B. It will maintain the records and information required by Rule
31a-1 under the Act related to the Series portfolio transactions, and
such other records with respect thereto relating to the services the
Subadvisor provides under this Agreement as may be required in the
future by applicable SEC rules, and shall retain such information for
such times and in such manner as required by applicable rules,
including Rule 31a-2 under the Act.
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C. It has a written code of ethics complying with the requirements
of Rule 17j-l under the Act and will provide the Advisor with a copy of
the code of ethics and evidence of its adoption. Subadvisor
acknowledges receipt of the written code of ethics adopted by and on
behalf of the Fund (the "Code of Ethics"). The Subadvisor will not be
subject to the Code of Ethics of the Fund as long as its code of ethics
complies with the applicable regulatory requirements and its code of
ethics is approved by the Board of Trustees of the Trust. Within 10
days of the end of each calendar quarter while this Agreement is in
effect, a duly authorized compliance officer of the Subadvisor shall
certify to the Fund and to the Advisor that the Subadvisor has complied
with the requirements of Rule 17j-l during the previous calendar
quarter and that there has been no material violation of its code of
ethics, or if such a violation has occurred, that appropriate action
was taken in response to such violation as determined by the
Subadvisor. The Subadvisor shall permit the Fund and Advisor to examine
the reports required to be made by the Subadvisor and related to the
Subadvisor's duties to the Series under Rule 17j-l(c)(1) and this
subparagraph.
D. It will use its best efforts to manage the Series so that the
Fund will qualify as a regulated investment company under Subchapter M
of the IRC and will satisfy the diversification requirements of Section
817(h) of the IRC and the distribution requirements necessary to avoid
payment of any excise tax pursuant to Section 4982 of the IRC and the
rules and regulations adopted under each such provision.
E. It will furnish the Advisor a copy of its Form ADV as filed with
the Securities and Exchange Commission.
F. It will be responsible for the preparation and filing of
Schedule 13G and Form 13F on behalf of the Series.
G. Reference is hereby made to the Declaration of Trust dated
February 18, 1986, establishing the Fund, a copy of which has been
filed with the Secretary of the Commonwealth of Massachusetts and
elsewhere as required by law, and to any and all amendments thereto so
filed or hereafter so filed with the Secretary of the Commonwealth of
Massachusetts and elsewhere as required by law. The name Phoenix Edge
Series Fund refers to the Trustees under said Declaration of Trust, as
Trustees and not personally, and no Trustee, shareholder, officer,
agent or employee of the Fund shall be held to any personal liability
in connection with the affairs of the Fund; only the Fund estate under
said Declaration of Trust is liable. Without limiting the generality of
the foregoing, neither the Subadvisor nor any of its officers,
directors, partners, shareholders or employees shall, under any
circumstances, have recourse or cause or willingly permit recourse to
be had directly or indirectly to any personal, statutory, or other
liability of any shareholder, Trustee, officer, agent or employee of
the Fund or of any successor of the Fund, whether such liability now
exists or is hereafter incurred for claims against the trust estate.
12. Representations, Warranties and Agreements of the Advisor. The
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Advisor represents, warrants and agrees that:
A. It has the power and has taken all necessary action, and has
obtained all necessary licenses, authorizations and approvals, to
execute this Agreement, which constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms.
5
B. It is registered as an "investment adviser" under the Advisers
Act.
C. It will deliver to the Subadvisor true and complete copies
of the Prospectus, Statement of Additional Information, and such other
documents or instruments governing the investments and investment
policies and practices of the Series, and during the term of this
Agreement will promptly deliver to the Subadvisor true and complete
copies of all documents and instruments supplementing, amending, or
otherwise becoming such Fund Documents before they become effective.
D. It will deliver to the Subadviser any limitations imposed upon
the Fund as a result of relevant diversification requirements under the
provisions of Section 817(h) of the Internal Revenue Code of 1986, as
amended.
E. It will furnish or otherwise make available to the Subadvisor
such other information relating to the business affairs of the Fund as
the Subadvisor at any time, or from time to time, reasonably requests
in order to discharge its obligations hereunder.
13. Reports. The Subadvisor shall provide the Advisor such periodic and
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special reports as the Advisor may reasonably request. The Subadvisor
agrees that such records are the property of the Fund, and shall be
made reasonably available for inspections during normal business hours,
and by the Fund or to the Advisor as agent of the Fund, and promptly
upon request surrendered to either, copies of which may be retained by
the Subadvisor. The Subadvisor is authorized to supply the Fund's
independent accountants, PricewaterhouseCoopers LLP, or any successor
accountant for the Fund, any information that they may request in
connection with the Fund.
14. Proxies. Unless the Advisor or the Fund gives the Subadvisor written
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instructions to the contrary, the Subadvisor shall use its good faith
judgment in a manner which it reasonably believes best serves the
interests of each Series' shareholders and shall comply with the Fund's
proxy voting procedures then in effect, to vote or abstain from voting
all proxies solicited by or with respect to the issuers of securities
in which assets of each Series may be invested. Subadvisor agrees to
provide the Advisor with quarterly proxy voting reports in such form as
the Advisor may request from time to time.
15. Recordkeeping. The Subadviser will assist the recordkeeping agent for
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the Fund in determining or confirming the value of any securities
or other assets in the Series for which the recordkeeping agent seeks
assistance from or identifies for review by the Advisor. The parties
agree that, consistent with applicable law, the Subadvisor will not
bear responsibility for the determination of value of any such
securities or other assets. Furthermore, it is understood that the
Subadvisor is not responsible for the provision of administrative,
accounting or recordkeeping services to the Series or Fund other than
as specifically set forth in this Agreement.
16. Amendment. This Agreement may be amended at any time, but only by
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written agreement between the Subadvisor and the Advisor, which
amendment, other than amendments to Schedules A and B, is subject to
the approval of the Trustees and the Shareholders of the Fund as and to
the extent required by the Act.
17. Effective Date; Term. This Agreement shall become effective on the date
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set forth on the first page of this Agreement. Unless terminated as
hereinafter provided, this Agreement shall remain
6
in full force and effect until November 30, 2002, and thereafter only
so long as its continuance has been specifically approved at least
annually by the Trustees in accordance with Section 15(a) of the Act,
and by the majority vote of the disinterested Trustees in accordance
with the requirements of Section 15(c) thereof.
18. Notices. Except as otherwise provided in this Agreement, all notices or
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other communications required or permitted to be given hereunder shall
be in writing and shall be delivered or sent by confirmed facsimile or
by pre-paid first class letter post or overnight courier to the
following addresses or to such other address as the relevant addressee
shall hereafter notify for such purpose to the others by notice in
writing and shall be deemed to have been given at the time of delivery.
If to the Advisor: PHOENIX VARIABLE ADVISORS, INC.
One American Row
Hartford, Connecticut
Attention: Xxxxxx Xxxxxx
If to the Subadvisor: A I M Capital Management, Inc.
00 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxx, Esq.
cc: Xxx Xxxxxxxx (Investments)
19. Termination. This Agreement may be terminated by either party, without
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penalty, immediately upon written notice to the other party in the
event of a breach of any provision thereof by the party so notified, or
otherwise, by the Subadvisor, the Board of Trustees of the Fund or the
vote of a majority of the outstanding voting securities of such Fund
upon sixty (60) days' written notice to the other party.
Notwithstanding such termination, any liability of any party to any
other party under this Agreement shall survive and remain in full force
and effect with respect to any claim or matter on which any party has
given written notice to any other party prior to termination until such
liability has been finally settled.
20. Applicable Law. To the extent that state law is not preempted by the
---------------
provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of
the State of Connecticut.
21. Severability. If any term or condition of this Agreement shall be
------------
invalid or unenforceable to any extent or in any application, then the
remainder of this Agreement shall not be affected thereby, and each and
every term and condition of this Agreement shall be valid and enforced
to the fullest extent permitted by law.
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PHOENIX VARIABLE ADVISORS, INC.
By: /s/Xxxx X. Xxxxx
-------------------------------------
Title: Xxxx X. Xxxxx, Vice President/Secretary
ACCEPTED:
A I M CAPITAL MANAGEMENT, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Title: Xxxxxx Xxxxx
Senior Vice President
Director of Equity Trading
SCHEDULES: A. Subadvisor Functions
B. Operational Procedures
C. Fee Schedule
8
SCHEDULE A
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SUBADVISOR FUNCTIONS
With respect to managing the investment and reinvestment of the Series
assets, the Subadvisor shall provide, at its own expense:
(a) An investment program, and the implementation of such investment
program, for the Series consistent with the Fund's Registration
Statement as most recently provided to the Subadvisor (the
Registration Statement which is subject to the overall direction
and control of the Board of Trustees and Advisor).;
(b) Annual reports, in form and substance acceptable to the Advisor
and Subadvisor, with respect to foreign custody as governed by
Rule 17f-7 under the Act.
(c) Quarterly reports, in form and substance acceptable to the
Advisor and Subadvisor, with respect to: i) compliance with the
the Subadvisor's code of ethics; ii) compliance with procedures
adopted from time to time by the Trustees of the Fund relative
to securities eligible for resale under Rule 144A under the
Securities Act of 1933, as amended; iii) diversification of
Series assets in accordance with the then prevailing prospectus
and statement of additional information pertaining to the Series
and governing laws; iv) compliance with governing restrictions
relating to the fair valuation of securities for which market
quotations are not readily available or considered "illiquid"
for the purposes of complying with the Series limitation on
acquisition of illiquid securities; v) cross transactions
conducted pursuant to Rule 17a-7 under the Act; vi) proxy voting
reports; vii) any and all other reports reasonably requested
related to the Subadvisor's services; and, viii) the
implementation of the Series investment program, including,
without limitation, analysis of Series performance; and any
other reports which may be required from time to time;
(d) Attendance by appropriate representatives of the Subadvisor at
meetings requested by the Advisor or Trustees at such time(s)
and location(s) as agreed to by the Advisor and Subadvisor; and
(e) Participation, overall assistance and support in marketing the
Series, including, without limitation, meetings with pension
fund representatives, broker/dealers who have a sales agreement
with Phoenix Equity Planning Corporation, and other parties as
agreed to by the Advisor and Subadvisor.
(f) This Schedule A is subject to amendment from time to time to
require additional reports as contemplated by Paragraph 13 of
this Agreement.
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SCHEDULE B
OPERATIONAL PROCEDURES
In order to minimize operational problems, it will be necessary for a flow of
information to be supplied to State Street Bank Custodian (the "Custodian"), the
custodian for the Fund.
The Subadvisor will use its best efforts to furnish the Custodian with daily
information as to executed trades, or, if no trades are executed, with a report
to that effect, no later than 7 p.m. (Eastern Standard time) on the day of the
trade. The deadline for semi-annual and annual financial reporting days is 5
p.m. The necessary information can be sent via facsimile machine to the
Custodian. Information provided to the Custodian shall include the following:
1. Purchase or sale;
2. Security name;
3. Security identifier (if applicable);
4. Number of shares and sales price per share;
5. Executing broker;
6. Settlement instructions for foreign trades; clearing and executing
broker for domestic trades;
7. Trade date;
8. Settlement date;
9. Aggregate commission or if a net trade;
10. Interest purchased or sold from interest bearing security;
11. Other fees;
12. Net proceeds of the transaction;
13. Currency for foreign trades and ticker symbol for domestic trades;
Exchange where trade was executed; and
14. Identified tax lot (if applicable).
When opening accounts with brokers for, and in the name of, the Fund, the
account must be a cash account. No margin accounts are to be maintained in the
name of the Fund. Delivery instructions are as specified by the Custodian. The
Custodian and sub-accounting agent will supply the Subadvisor daily with a cash
availability report which shall include cash detail and pending trades. This
will normally be done by confirmed facsimile or confirmed electronic
transmission so that the Subadvisor will know the amount available for
investment purposes.
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SCHEDULE C
SUBADVISORY FEE
For services provided to the Fund pursuant to paragraph 3 hereof, the
Advisor will pay to the Subadvisor, on or before the 10th day of each month, a
fee, payable in arrears, at the annual rate of 0.50% of the average daily net
assets of the Series.
The fees shall be prorated for any month during which this agreement is in
effect for only a portion of the month. In computing the fee to be paid to the
Subadvisor, the net asset value of the Fund and each Series shall be valued as
set forth in the then current registration statement of the Fund.
11
