SUBADVISORY AGREEMENT
THE PHOENIX EDGE SERIES FUND
PHOENIX-LAZARD INTERNATIONAL EQUITY SELECT SERIES
PHOENIX-LAZARD SMALL-CAP VALUE SERIES
PHOENIX-LAZARD U.S. MULTI-CAP SERIES
LAZARD ASSET MANAGEMENT
a division of Lazard Freres & Co. LLC
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
AGREEMENT made as of the 9th day of August, 2002 between Phoenix
Variable Advisors, Inc. (the "Advisor"), a corporation organized under the laws
of the State of Delaware, and Lazard Asset Management, a division of Lazard
Freres & Co. LLC (the "Subadvisor"), a limited liability company organized under
the laws of the state of New York.
WHEREAS, The Phoenix Edge Series Fund (the "Fund") is a diversified
open-end investment company of the series type registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the shares of the Fund may be offered in one or more separate
series, including the Phoenix-Lazard International Equity Select Series,
Phoenix-Lazard Small-Cap Value Series and Phoenix-Lazard U.S. Multi-Cap Series
(the "Series"); and
WHEREAS, the Advisor has entered into an Investment Advisory Agreement
(the "Advisory Agreement") with the Fund pursuant to which the Advisor acts as
investment advisor to the Fund on behalf of one or more separate series of the
Fund, including the Series; and
WHEREAS, pursuant to the Advisory Agreement, the Advisor renders
certain investment advisory services to the Fund on behalf of the Series,
including providing general oversight of the Series, and evaluating,
recommending and monitoring one or more registered investment advisors to serve
as subadvisor to the Series; and
WHEREAS, the Advisor desires, with the approval of the Trustees of the
Fund (the "Trustees"), to retain Subadvisor to furnish portfolio management
services for the Series; and
WHEREAS, the Subadvisor is willing to furnish such services on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, the Advisor and the Subadvisor agree as follows:
1. Employment as a Subadvisor. The Advisor, being duly authorized, hereby
appoints the Subadvisor to serve as Subadvisor with regard to the
assets of the Series (the "Assets"), subject to the terms and
conditions set forth in this Agreement.
2. Acceptance of Employment; Standard of Performance. The Subadvisor
accepts such appointment to serve as Subadvisor and agrees to use its
best professional judgment to make investment decisions and provide
related services for the Series in accordance with the terms and
conditions set forth in this Agreement. The parties acknowledge and
agree that the services of the Subadvisor hereunder are not deemed
exclusive and that accordingly, the Subadvisor may render services to
others. The Subadvisor, its affiliates, or any of their directors,
members, officers, employees, or agents may buy, sell, or trade any
securities or other investment instruments for their own account or for
the account of others for whom it or they may be acting, provided that
such activities will not adversely affect or otherwise impair the
performance by the Subadvisor of its responsibilities under this
Agreement. The Subadvisor and its affiliates may act as investment
manager to or provide other services with respect to various investment
companies and other managed accounts, which advice or services,
including the nature of such services, may differ from or be identical
to advice given or action taken with respect to the Series. In the
event of such activities, the transactions and associated costs will be
allocated among such clients (including the Series) in a manner that
the Subadvisor believes to be equitable to the accounts involved and
consistent with such accounts' objectives, policies, and limitations.
3. Services of Subadvisor. Subject to the general oversight of the Advisor
and the Trustees, the Subadvisor shall manage all of the securities and
other assets of the Series entrusted to it under this Agreement,
including the purchase, retention, and disposition of assets,
securities, and other property, and shall carry out all of its duties
and obligations under this Agreement, according to the following terms
and conditions:
(a) At all times in performing its duties and obligations
under this Agreement, the Subadvisor shall manage the Assets in such a
manner that the Series may comply with the following requirements: (i)
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 amended or
supplemented from time to time, (collectively, the "Prospectus"); (ii)
the Fund's Agreement and Declaration of Trust, dated February 18, 1986,
establishing the Fund, as may be amended from time to time,
("Declaration of Trust"); (iii) the 1940 Act, the Investment Advisers
Act of 1940, as amended (the "Advisers Act"), the Securities Act of
1933, as amended, (the "1933 Act") and the Securities Exchange Act of
1934, as amended, (the "1934 Act") and the rules and regulations
thereunder; (iv) the Internal Revenue Code of 1986, as amended, (the
"Code") and the rules and regulations thereunder, including but not
limited to the requirements for adequate diversification under Section
817(h) of the Code, for treatment by the Series as a regulated
investment company under sub-chapter M of the Code, and for avoiding
payment of any excise tax under Section 4982 of the Code; (v) all other
applicable federal and state laws, as each may be amended from time to
time; and (vi)
2
and any resolutions as may be duly adopted by the Trustees from time to
time and any instructions and procedures of the Advisor, and, in either
case, furnished to the Subadvisor (collectively, these requirements are
referred to herein as the "Investment Requirements").
(b) The Subadvisor shall furnish a continuous investment
program and shall determine what portfolio investments will be
purchased, retained, or sold by the Series in conformity with the
Prospectus and other Investment Requirements.
(c) The Subadvisor shall effect all transactions and take all
actions to implement the investment objectives and policies of the
Series in accordance with this Agreement.
(d) The Subadvisor shall have full authority at all times with
respect to the portfolio management of the Assets, including, but not
limited to, the authority: (i) to give written or oral instructions to
various broker/dealers, banks or other agents and 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; (ii) to direct the purchase and sale of any securities; and
(iii) to maintain such uninvested cash balances in the Series as it
shall deem reasonable and appropriate without incurring any liability
for the payment of interest thereon.
(e) The Subadvisor shall not, without the Advisor's prior
written approval, effect any transaction or take any action that would
cause the Series at the time of the transaction or action to be out of
compliance with any of the Investment Requirements. The Subadvisor
shall promptly inform the Fund and the Advisor of developments
materially affecting (or reasonably expected to affect) the Series, and
will, on its own initiative, furnish the Fund and the Advisor from time
to time with whatever information the Subadvisor believes is
appropriate for this purpose.
(f) The Subadvisor shall send or make available appropriate
representatives to/for regular or special meetings of the Fund as may
be reasonably requested from time to time by the Advisor.
(g) Upon mutual agreement of the parties, the Subadvisor shall
provide reasonable assistance with and participate in the marketing of
the Series, including participating at meetings with pension fund
representatives, broker/dealers who have a sales agreement with Phoenix
Equity Planning Corporation, and other parties reasonably requested by
the Advisor.
(h) The Subadvisor shall place all orders for the purchase or
sale of securities or other investments for the Series with brokers or
dealers selected by the Subadvisor, as more fully specified below in
Section 6 of this Agreement.
3
4. Transaction Procedures. All transactions for the purchase or sale of
securities or other investments for the Series will be consummated by
payment to, or delivery by, the Custodian(s) from time to time
designated by the Fund (the "Custodian"), or such depositories or
agents as may be designated by the Custodian pursuant to its agreement
with the Fund (the "Custodian Agreement"), of all cash and/or
securities and/or other property due to or from the Series. The
Subadvisor shall not have possession or custody of such cash and/or
securities or any responsibility or liability with respect to such
custody, except as described herein. 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 A hereto (as amended from time
to time). The Fund shall issue to the Custodian such instructions as
may be appropriate in connection with the settlement of any transaction
initiated by the Subadvisor. 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 (as advised
by 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 other than arrangements, acts,
omissions or other conduct arising in reliance on instructions of the
Subadvisor.
5. Recordkeeping and Reporting. The Subadvisor shall maintain the records
and information required by Rule 31a-1 under the 1940 Act respecting
its activities with respect to the Series, including but not limited to
subsections (b)(1), (b)(2), (b)(5), (b)(6), (b)(7), (b)(8), (b)(9),
(b)(10), (b)(11) and (f) of the Rule, 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
Securities and Exchange Commission and other applicable rules, and
shall retain such information for such times and in such manner as
required by applicable rules, including but not limited to Rule 31a-2
under the 1940 Act. The records maintained by the Subadvisor hereunder
shall be the property of the Fund and shall be surrendered promptly
upon request.
6. Allocation of Brokerage. The Subadvisor shall have authority and
discretion to select brokers and dealers to execute transactions
initiated by the Subadvisor on behalf of the Series with regard to the
Assets, and to select the markets on or in which the transactions will
be executed, subject to the following limitations:
(a) The Subadvisor shall at all times seek "best-execution",
as defined in Section 28(e)(1) of the 0000 Xxx.
(b) The Subadvisor shall at all times place orders for the
sale and purchase of securities in accordance with the brokerage policy
of the Series as set forth in the Prospectus and as the Advisor or the
Trustees may direct from time to time.
(c) In placing orders for the sale and purchase of Series
securities for the Fund, the Subadvisor's primary responsibility shall
be to seek the best execution of orders
4
at the most favorable prices. However, this responsibility shall not
obligate the Subadvisor to solicit competitive bids for each
transaction or to seek the lowest available commission cost to the
Fund, so long as the Subadvisor reasonably believes that the broker or
dealer selected by it can be expected to provide "best execution" on
the particular transaction and determines in good faith that the
commission cost is reasonable in relation to the value of the
"brokerage and research services," as defined in Section 28(e)(3) of
the 1934 Act, provided by such broker or dealer to the Subadvisor,
viewed in terms of either that particular transaction or of the
Subadvisor's overall responsibilities with respect to its clients,
including the Fund, as to which the Subadvisor exercises investment
discretion, notwithstanding that the Fund may not be the direct or
exclusive beneficiary of any such services or that another broker may
be willing to charge the Fund a lower commission on the particular
transaction.
(d) Subject to the requirements of Subsections (a)-(c) of this
Section, the Advisor shall have the right to request that transactions
giving rise to brokerage commissions, in an amount and in a manner to
be reasonably agreed upon by the Advisor and the Subadvisor, shall be
executed by brokers and dealers that provide brokerage or research
services to the Fund or that will be of value to the Fund in the
management of its assets, which services may, but need not be, of
direct or exclusive benefit to the Series. In addition, subject to
Subsections (a)-(c) of this Section, the applicable Conduct Rules of
the National Association of Securities Dealers, Inc. and other
applicable law, the Fund shall have the right to request that
transactions be executed by brokers and dealers by or through whom
sales of shares of the Fund are made, in such amount and in such manner
as reasonably agreed between the Advisor and the Subadvisor.
7. Expenses. It is understood that the Fund will pay all of its expenses
other than those expressly stated to be payable by the Subadvisor
hereunder or by the Advisor pursuant to the Advisory Agreement.
Expenses paid by the Fund include, but are not limited to, all expenses
incurred in the operation of the Fund and any offering of its shares,
including, among others, interest, taxes, brokerage fees and
commissions, fees of trustees, expenses of Trustees' and shareholders'
meetings including the cost of printing and mailing proxies, expenses
of insurance premiums for fidelity and other coverage, expenses of
repurchase and redemption of shares, certain expenses of issue and sale
of shares, association membership dues, charges of custodians, transfer
agents, dividend disbursing agents and financial agents, registering
and maintaining the registration of the Fund and its shares with the
Securities and Exchange Commission (the "Commission"), preparing and
mailing prospectuses and reports to shareholders, bookkeeping and
auditing expenses and any legal expenses of the Fund, the Fund and the
Advisor. The parties acknowledge and agree that the Subadvisor shall
furnish, at its own expense, the following items:
(a) Office facilities, including office space, furniture
and equipment utilized by the Subadvisor's employees
in the fulfillment of its duties and obligations
under this Agreement;
5
(b) Personnel and services necessary to perform the
functions required to manage the investment and
reinvestment of the Assets (including those required
for research, analysis, pricing, reporting,
statistics, and investment), and to fulfill the other
duties and obligations of the Subadvisor hereunder;
and
(c) Expenses incurred by Subadvisor in the performance of
its Services hereunder (i.e., research), exclusive of
those expenses payable by the Fund, the Fund or the
Advisor.
8. Fees for Services. The compensation of the Subadvisor for its services under
this Agreement shall be calculated and paid by the Advisor in accordance with
the attached Schedule B. Pursuant to the Advisory Agreement between the Fund and
the Advisor, the Advisor shall be solely responsible for the payment of fees to
the Subadvisor.
9. Liability. Subadvisor 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, so long as such acts or omissions shall not have
constituted a breach of the investment objectives, policies and restrictions
applicable to the Series and such acts or omissions shall not have resulted from
the Subadvisor's willful misfeasance, bad faith, reckless disregard or gross
negligence, a violation of the standard of care established by and applicable to
the Subadvisor in its actions under this Agreement or a breach of its duty or of
its obligations hereunder (provided further, however, that the foregoing shall
not be construed to protect the Subadvisor from liability under the 1940 Act,
other federal or state securities laws or common law). The Advisor acknowledges
and agrees that the Subadvisor makes no representation or warranty, express or
implied, that any level of performance or investment results will be achieved by
the Series or that the Fund will perform comparably with any standard or index,
including other clients of the Subadvisor, whether public or private.
10. Indemnification.
(a) Except as may otherwise be provided by the 1940 Act or
other federal securities laws, neither the Subadvisor nor any of its
affiliates or its or their officers, members, directors, employees or
agents shall be subject to any liability to the Advisor, the Fund, the
Series or any shareholder of the Series or the Fund for, and the
Advisor shall indemnify the Subadvisor for, any error of judgment, any
mistake of law or any loss arising out of any investment or other act
or omission in the course of, connected with, or arising out of any
service to be rendered under this Agreement, except by reason of
willful misfeasance, bad faith or gross negligence in the performance
of the Subadvisor's duties or by reason of reckless disregard by the
Subadvisor of its obligations and duties. The Advisor shall hold
harmless and indemnify the Subadvisor for any loss, liability, cost,
damage or expense (including reasonable attorneys fees and costs)
arising from any claim or demand by any past or present shareholder of
the Series or the Fund that is not
6
based upon the obligations of the Subadvisor with respect to the Series
under this Agreement.
(b) Except as may otherwise be provided by the 1940 Act or
other federal securities laws, the Subadvisor shall indemnify the
Advisor for, any loss, liability, cost, damage or expense (including
reasonable attorneys fees and costs) resulting from the willful
misfeasance, bad faith or gross negligence of the Subadvisor in the
performance of its duties or by reason of reckless disregard by the
Subadvisor of its obligations and duties. In no case shall the
Subadvisor's indemnity in favor of the Advisor or any affiliated person
of the Advisor, or any other provision of this Agreement, be deemed to
protect such person against any liability to which any such person
would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under this
Agreement.
11. Insurance. The Subadvisor shall, during the term of this Agreement, at
its own expense, maintain adequate liability and errors and omissions insurance
coverage in light of its duties under this Agreement, as reasonably determined
by Subadvisor and approved by Advisor, such approval not to be unreasonably
withheld.
12. No Personal Liability. Reference is hereby made to the Declaration of
Trust, 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 The 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 Fund 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 Fund estate.
13. Confidentiality. Subject to the duty of the Advisor or Subadvisor to
comply with 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. It is understood that any information or
recommendation supplied by the Subadvisor in connection with the performance of
its obligations hereunder is to be regarded as confidential and for use only by
the Advisor, the Fund or such persons as the Advisor may designate in connection
with the Series. It is also understood that any information supplied to the
Subadvisor in connection with the performance of its obligations hereunder,
particularly, but not limited to, any list of investments which, on a temporary
basis, may not be bought or sold for the Series, is to be regarded as
confidential and for use only by the Subadvisor in connection with its
obligation to provide investment advice and
7
other services to the Series. The parties acknowledge and agree that all
nonpublic personal information with regard to shareholders in the Series shall
be deemed proprietary information of the Advisor, and that the Subadvisor shall
use that information solely in the performance of its duties and obligations
under this Agreement and shall takes reasonable steps to safeguard the
confidentiality of that information. Further, the Subadvisor shall maintain and
enforce adequate security procedures with respect to all materials, records,
documents and data relating to any of its responsibilities pursuant to this
Agreement including all means for the effecting of investment transactions.
14. Assignment. This Agreement shall terminate automatically in the event of
its "assignment," as that term is defined in Section 2(a)(4) of the 1940 Act.
The Subadvisor shall provide the Advisor with reasonable advance written notice
(to the extent reasonably practicable) of any proposed change of "control," as
defined in Section 2(a)(9) of the 1940 Act, as will enable the Advisor to
consider whether an assignment as defined in Section 2(a)(4) of the 1940 Act
will occur and to take the steps it deems necessary. The Subadvisor will be
liable to the Fund and the Advisor for costs resulting from a change of control
of the Subadvisor relating to costs associated with any proxy solicitations,
revisions to the Prospectus or marketing materials. The understandings and
obligations set forth in this Section shall survive the termination of this
Agreement and shall be binding upon the Subadvisor and its successors.
15. Representations, Warranties and Agreements of the Subadvisor. The
Subadvisor represents, warrants and agrees that:
(a) It is registered as an "investment adviser" under the
Advisers Act and will maintain such status so long as this Agreement
remains in effect.
(b) It shall continue to meet any other applicable federal or
state requirements, or the applicable requirements of any regulatory or
self-regulatory agency, necessary to be met for its performance of the
services contemplated by this Agreement so long as this Agreement
remains in effect. In addition, so long as this Agreement remains in
effect, the Subadvisor will promptly notify the Advisor of a known
material violation by the Subadvisor of applicable federal or state
requirements, or the applicable requirements of any regulatory or
self-regulatory agency relating to its performance of the services
contemplated by this Agreement.
(c) It is not prohibited by the 1940 Act, the Advisers Act or
other applicable federal or state law from performing the services
contemplated by this Agreement.
(d) It is duly organized and validly existing under the laws
of the State in which it was organized with the power to own and posses
its assets and carry on its business as it is now being conducted.
(e) It has the power and has taken all necessary action, and
has obtained all necessary licenses, authorizations and approvals, to
execute this Agreement, which Agreement constitutes its legal, valid
and binding obligation, enforceable in accordance with its terms, to
enter into and perform the services contemplated by this Agreement;
8
and the execution, delivery and performance by it of this Agreement
does not contravene or constitute a default under any agreement binding
upon it.
(f) It will promptly notify the Advisor of the occurrence of
any event that would disqualify it from serving as an investment
advisor of an investment company pursuant to Section 9(a) of the 1940
Act or otherwise.
(g) It has a written code of ethics complying with the
requirements of Rule 17j-l under the 1940 Act and will provide the
Advisor with a copy of the code of ethics and evidence that it is
currently in effect. The Subadvisor acknowledges receipt of the written
code of ethics adopted by and on behalf of the Fund (the "Code of
Ethics"). It will not be subject to the Code of Ethics during the term
of this Agreement so long as its code of ethics complies with
applicable regulatory requirements and has been approved by the
Trustees. 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 violation of its
code of ethics, or the Code of Ethics, as the case may be, or if such a
violation has occurred, that appropriate action was taken in response
to such violation. The Subadvisor shall permit the Fund and Advisor to
examine the reports required to be made by the Subadvisor under Rule
17j-l(c)(1) and all other records relevant to the Subadvisor's code of
ethics as may be reasonably requested by the Advisor or Trustees from
time to time.
(h) It has furnished a true and complete copy of its
registration statement as filed with the Commission on Form ADV to the
Advisor and will furnish promptly such updated copies of its
registration statement or amendments thereto as are filed with the
Commission from time to time.
(i) It will furnish to the Advisor true and complete copies of
reports or other documents as may be reasonably requested by the
Advisor in connection with the performance of the Subadvisor's duties
and obligations under this Agreement.
(j) It will be responsible for the preparation and filing of
Schedule 13G and Form 13F with respect to the Assets.
(k) It will furnish or otherwise make available to the Advisor
such other information relating to the business affairs of the
Subadvisor or the management of the Series as the Advisor at any time,
or from time to time, reasonably requests in connection with the
Advisor's or Subadvisor's performance of its respective obligations
hereunder.
16. Representations, Warranties and Agreements of the Advisor. The Advisor
represents, warrants and agrees that:
(a) It is registered as an "investment adviser" under the
Advisers Act.
9
(b) It shall continue to meet, any other applicable federal or
state requirements, or the applicable requirements of any regulatory or
self-regulatory agency, necessary to be met for its performance of the
services contemplated by this Agreement so long as this Agreement
remains in effect.
(c) It is not prohibited by the 1940 Act, the Advisers Act or
other applicable federal or state law from performing the services
contemplated by this Agreement.
(d) It is duly organized and validly existing under the laws
of the State in which it was organized with the power to own and posses
its assets and carry on its business as it is now being conducted.
(e) It has the power and has taken all necessary action, and
has obtained all necessary licenses, authorizations and approvals, to
execute this Agreement, which Agreement constitutes its legal, valid
and binding obligation, enforceable in accordance with its terms, to
enter into and perform the services contemplated by this Agreement; and
the execution, delivery and performance by it of this Agreement does
not contravene or constitute a default under any agreement binding upon
it.
(f) It has delivered, or will before the effective date of
this Agreement deliver, to the Subadvisor true and complete copies of
(i) the Prospectus, (ii) the Declaration of Fund, and (iii) such other
documents or instruments governing the investments and investment
policies and practices of the Series applicable to the Subadvisor's
duties and obligations hereunder, 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 documents or instruments before or at the time they
become effective; provided, that if such documents or instruments
require action (or cessation of action) by the Subadvisor (such as the
purchase or disposition of portfolio securities for the Series), the
Subadvisor shall have a reasonable time to comply with such documents
or instruments following receipt thereof.
(g) 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.
17. Reports. Subject to the understanding that the Subadvisor shall not be
responsible for maintaining the books of the Fund, otherwise generating
information derived from the books of the Fund or disclosing Subadvisor
proprietary information, the Subadvisor shall provide the Advisor and the
Trustees such periodic and 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, and by the Fund or by
the Advisor as agent of the Fund, and promptly upon request surrendered to
either. Without limiting the generality of the foregoing, the parties agree and
acknowledge that the Subadvisor shall provide the following items:
(a) Quarterly reports, in form and substance acceptable to the
Advisor, including but not limited to reports with respect to: (i)
compliance with the Subadvisor's
10
code of ethics; (ii) compliance with procedures adopted from time to
time by the Trustees relative to securities eligible for resale
pursuant to Rule 144A under the 1933 Act; (iii) diversification of
Series assets in accordance with the then governing laws and prevailing
Prospectus pertaining to the Series; (iv) compliance with governing
Fund policies and 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 1940 Act; (vi)
allocations of brokerage transactions along with descriptions of the
bases for those allocations and the receipt and treatment of brokerage
and research services received, as may be requested to ensure
compliance with Section 28(e) of the 1934 Act; (vii) any and all other
reports reasonably requested in accordance with or described in this
Agreement; and, (viii) the implementation of the Series investment
program.
(b) Annual or other periodic reports, in form and substance
acceptable to the Advisor, including but not limited reports with
respect to: (i) analyses of the Series performance; (ii) disclosure
related to the portfolio management of the Series and the Subadvisor as
may be contained in the Prospectus or marketing materials as amended,
supplemented or otherwise updated from time to time; and (iii)
compliance with the Subadvisor's Code of Ethics pursuant to Rule 17j-1;
and (iv) such compliance certifications as may be reasonably requested.
(c) The parties acknowledge and agree that 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 reasonably request in connection with the
Fund.
In addition, the Subadvisor shall immediately notify and forward to
both the Advisor and legal counsel for the Series any legal process
served upon it on behalf of the Advisor or the Fund. The Subadvisor
shall promptly notify the Advisor of any changes in any information
concerning the Subadvisor of which the Subadvisor becomes aware that is
or would be required to be disclosed in the Fund's registration
statement.
18. Proxies. The Subadvisor shall review all proxy solicitation materials
and be responsible for voting and handling all proxies it receives in relation
to the Assets. Unless the Advisor or the Fund gives the Subadvisor written
instructions to the contrary, the Subadvisor will, in compliance with the proxy
voting procedures of the Series then in effect, vote or abstain from voting, all
proxies solicited by or with respect to the issuers of securities in which
assets of the Series may be invested so long as such proxies are received by the
Subcustodian from the Custodian. The Advisor shall cause the Custodian to
forward promptly to the Subadvisor all proxies upon receipt, so as to afford the
Subadvisor a reasonable amount of time in which to determine how to vote such
proxies. The Subadvisor agrees to provide the Advisor with quarterly proxy
voting reports in such form as the Advisor may reasonably request from time to
time.
11
19. Valuation of Assets and Related Recordkeeping. The Subadvisor shall
assist the recordkeeping agent for 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 Advisor
will not bear responsibility for the determination of value of any such
securities or other assets.
20. Use of Subadvisor's Name. Subadvisor hereby grants to the Fund and
Advisor a non-exclusive, royalty-free, worldwide license to use the Subadvisor's
name and logo in any and all promotional materials, prospectuses and
registration statements during the term of this Agreement.
21. Amendment. This Agreement may be amended at any time, but only by
written agreement between the Subadvisor and the Advisor, which amendment, other
than amendments to Schedule A, is subject to the approval of the Trustees and
the Shareholders of the Fund as and to the extent required by the 1940 Act.
22. Effective Date; Term. This Agreement shall become effective on the date
set forth on the first page of this Agreement. Unless terminated as hereinafter
provided, this Agreement shall remain in full force and effect until December
31, 2003, and thereafter only so long as its continuance has been specifically
approved at least annually in accordance with Sections 15(a) and (c) of the 1940
Act and the Rules promulgated thereunder.
23. Notices. Except as otherwise provided in this Agreement, all notices or
other communications required or permitted to be given hereunder shall be in
writing and shall be delivered or sent by (i) confirmed facsimile, (ii)
registered, certified or overnight mail, or (iii) a nationally recognized
overnight courier, to the following addresses or to such other address as the
relevant addressee shall hereafter notify for such purpose to the other 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.
Xxx Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
If to the Subadvisor:
LAZARD ASSET MANAGEMENT
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Director, Legal Affairs
Facsimile: (000) 000-0000
24. Termination. This Agreement shall terminate immediately in the event of
its assignment, as specified above in Section 14 of this Agreement. This
Agreement may be terminated by
12
either party, without 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 Advisor, Subadvisor, Board of Trustees of the
Fund or vote of a majority of the outstanding voting securities of the Series
upon sixty (60) days' written notice to the other party. Notwithstanding such
termination, any liability of a 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 and until such liability has been finally settled.
25. 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 Commonwealth of
Massachusetts, without giving effect to the conflicts of laws principles
thereof.
26. 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.
27. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter of this Agreement.
13
28. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute a single instrument.
PHOENIX VARIABLE ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Title: Vice President
ACCEPTED:
LAZARD ASSETS MANAGEMENT
A DIVISION OF LAZARD FRERES & CO. LLC
By: /s/ Xxxxxxx Xxxxxxx
--------------------------
Title: Managing Director
SCHEDULES: A. Operational Procedures
B. Fee Schedule
14
SCHEDULE A
----------
OPERATIONAL PROCEDURES
In order to minimize operational problems, it will be necessary for a flow of
information to be supplied to State Street Bank & Trust Company (the
"Custodian") for Phoenix-Lazard Small-Cap Value Series and Phoenix-Lazard U.S.
Multi-Cap Series, and Xxxxx Brothers Xxxxxxxx & Co., (the "Custodian") for the
Phoenix-Lazard International Equity Select Series.
The Subadvisor must furnish the Custodian with daily information as to executed
trades, or, if no trades are executed, with a report to that effect, which will
typically be sent between 5:30 p.m. and 7:00 p.m. (Eastern time) on the day of
the trade (confirmation received from broker), although it may be later from
time to time. 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 (e.g., CUSIP), 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. Exchange where trade was executed;
14. Currency for foreign trades; and
15. 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.
15
SCHEDULE B
----------
SUBADVISORY FEE
For services provided, the facilities furnished, and the expenses incurred by
the Subadvisor in connection with providing the Services pursuant to this
Agreement, 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:
Fee Schedule:
Phoenix-Lazard Small-Cap Value Series Fees
55bps on first $250 million
50bps on assets over $250-$500 million
45bps on asset over $500 million
Phoenix-Lazard International Equity Select Series Fees
45bps on first $500 million
40bps on assets over $500 million
Phoenix-Lazard U.S. Multi-Cap Series Fees
38bps on first $250 million
35bps on assets over $250 million
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.
16
