EXHIBIT 5(a)
PHOENIX-SENECA FUNDS
INVESTMENT ADVISORY AGREEMENT
PHOENIX-SENECA FUNDS
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT made effective as of the ___ day of February, 1998 by and
between PHOENIX-SENECA FUNDS, a Delaware business trust having an office and
principal place of business located at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000 (the "Trust") and PHOENIX INVESTMENT COUNSEL, INC., a
Massachusetts corporation having an office and principal place of business
located at 00 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 (the "Adviser").
WITNESSETH THAT:
1. The Trust hereby appoints the Adviser to act as investment adviser to
the Trust on behalf of the following series of the Trust established and
designated by the Trustees on or before the date hereof, namely the
Phoenix-Seneca Growth Fund, the Phoenix-Seneca Mid-Cap "EDGE"(sm) Fund, the
Phoenix-Seneca Bond Fund, and the Phoenix-Seneca Real Estate Securities Fund
(the "Existing Series"), for the period and on the terms set forth herein. The
Adviser accepts such appointment and agrees to render the services described in
this Agreement for the compensation herein provided.
2. In the event that the Trustees desire to retain the Adviser to render
investment advisory services hereunder with respect to one or more additional
series ("Additional Series"), the Trust shall notify the Adviser in writing. If
the Adviser is willing to render such services, it shall notify the Trust in
writing, whereupon such Additional Series shall become subject to the terms and
conditions of this Agreement.
3. The Adviser shall furnish continuously an investment program for the
Existing Series and any Additional Series which may become subject to the terms
and conditions set forth herein (sometimes collectively referred to as the
"Series") and shall manage the investment and reinvestment of the assets of each
Series, subject at all times to the supervision of the Trustees.
4. (a) With respect to managing the investment and reinvestment of the
Series' assets, the Adviser shall provide, at its own expense:
(i) Investment research, advice and supervision;
(ii) An investment program for each Series
consistent with its investment objectives;
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(iii) Implementation of the investment program for
each Series including the purchase and sale
of securities; and
(iv) Regular reports to the Trustees on the
implementation of each Series' investment
program.
(b) The Adviser shall also provide, at its own expense:
(i) Advice and assistance on the general
operations of the Trust;
(ii) Compliance support for Trust operations;
(iii) Preparation of registration statements,
amendments to registration statements, proxy
materials and other Trust documents, to the
extent required by law or directed by the
Trustees; and
(iv) Advice and assistance of Adviser's General
Counsel to the extent permitted by law and
by applicable standards of professional
responsibility.
5. The Adviser shall, for all purposes herein, be deemed to be an
independent contractor.
6. The Adviser shall furnish at its own expense, or pay the expenses of
the Trust, for the following:
(a) Office facilities, including office space, furniture
and equipment;
(b) Personnel necessary to perform the functions required to
manage the investment and reinvestment of each Series'
assets (including those required for research,
statistical and investment work), and to fulfill the
other functions of the Adviser hereunder;
(c) Personnel to serve without salaries from the Trust as
officers or agents of the Trust. The Adviser need not
provide personnel to perform, or pay the expenses of the
Trust for, services customarily performed for an
open-end management investment company by its national
distributor, custodian, financial agent, transfer agent,
auditors and legal counsel; and
(d) Compensation and expenses, if any, of the Trustees who
are also full-time employees of the Adviser or any of
its affiliates; and
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(e) Any subadviser recommended by the Adviser and
appointed to act on behalf of the Trust.
7. All costs and expenses not specifically referred to herein as payable
by the Adviser shall be paid by the Trust. Such expenses shall include, but
shall not be limited to, all expenses (other than those specifically referred to
as being borne by the Adviser) incurred in the operation of the Trust and any
public offering of its shares, including, among others, interest, taxes,
brokerage fees and commissions, fees of Trustees who are not employees of the
Adviser or any of its affiliates, expenses of Trustees' and shareholders'
meetings including the cost of printing and mailing proxies, insurance premiums
for fidelity and other coverage, expenses of repurchase and redemption of
shares, expenses of issue and sale of shares (to the extent not borne by its
national distributor under its agreement with the Trust), expenses of printing
and mailing stock certificates representing shares of the Trust, association
membership dues, charges of custodians, transfer agents, dividend disbursing
agents and financial agents, and bookkeeping, auditing and legal expenses. The
Trust will also pay the fees and bear the expense of registering and maintaining
the registration of the Trust and its shares with the Securities and Exchange
Commission and registering or qualifying its shares under state or other
securities laws and the expense of preparing and mailing prospectuses and
reports to shareholders. Additionally, if authorized by the Trustees, the Trust
shall pay for extraordinary expenses and expenses of a non-recurring nature
which may include, but not be limited to, the reasonable and proportionate cost
of any reorganization or acquisition of assets and the cost of legal proceedings
to which the Trust is a party.
8. For providing the services and assuming the expenses outlined herein,
the Trust agrees that the Adviser shall be compensated as follows:
(a) Within ten days after the end of each month, the Trust
shall pay the Adviser a monthly fee with respect to each
Series at the following annual rates:
Phoenix-Seneca Growth Fund 0.70%
Phoenix-Seneca Mid-Cap "EDGE"(sm) Fund 0.80%
Phoenix-Seneca Bond Fund 0.50%
Phoenix-Seneca Real Estate Securities Fund 0.75%
The amounts payable to the Adviser with respect to each
Series shall be based upon the average of the values of
the net assets of such Series as of the close of
business each day, computed in accordance with the
Trust's then current registration statement.
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(b) Compensation shall accrue immediately upon the
effective date of this Agreement.
(c) If there is termination of this Agreement during a
month, each Series' fee for that month shall be
proportionately computed upon the average of the daily
net asset values of such Series for such partial period
in such month.
(d) The Adviser agrees to reimburse the Trust for the
amount, if any, by which the total operating and
management expenses for any Series (including the
Adviser's compensation, pursuant to this paragraph, but
excluding taxes, interest, costs of portfolio
acquisitions and dispositions and extraordinary
expenses), for any "fiscal year" exceed the level of
expenses which such Series is permitted to bear under
the most restrictive expense limitation (which is not
waived by the state) imposed on open-end investment
companies by any state in which shares of such Series
are then qualified. Such reimbursement, if any, will be
made by the Adviser to the Trust within five days after
the end of each month. For the purpose of this
subparagraph (d), the term "fiscal year" shall include
the portion of the then current fiscal year which shall
have elapsed at the date of termination of this
Agreement.
9. As to one or more of the Series, the Adviser may enter into one or
more agreements with a subadviser in which the Adviser delegates to the
subadviser the performance of any or all of the services specified herein;
provided that (a) each such agreement imposes on the subadviser all the duties
and conditions to which the Adviser is subject with respect to the covered
services; (b) each agreement meets the requirements of the Investment Company
Act of 1940, as amended (the "1940 Act") and the rules thereunder; and (c) the
Adviser shall not enter into a subadvisory agreement unless it is approved by
the Trustees and the shareholders of the affected Series, if required under the
1940 Act, prior to implementation. The Adviser shall evaluate and recommend any
such subadviser and shall remain responsible for the day-to-day management of
the Series.
10. The services of the Adviser to the Trust are not to be deemed
exclusive, the Adviser being free to render services to others and to engage in
other activities. Without relieving the Adviser of its duties hereunder and
subject to the prior approval of the Trustees and subject further to compliance
with applicable provisions of the 1940 Act, the Adviser may appoint one or more
agents to perform any of the functions and services which are to be provided
under the terms of this Agreement upon such terms and conditions as may be
mutually agreed upon among the Trust, the Adviser and any such agent.
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11. The Adviser shall not be liable to the Trust or to any shareholder
of the Trust for any error of judgment or mistake of law or for any loss
suffered by the Trust or by any shareholder of the Trust in connection with the
matters to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
the Adviser in the performance of its duties hereunder (provided that the
foregoing shall not be construed to protect the Adviser from liability under the
1940 Act, other federal or state securities law or common law).
12. It is understood that:
(a) Trustees, officers, employees, agents and shareholders
of the Trust are or may be "interested persons" of the
Adviser as directors, officers, stockholders or
otherwise;
(b) Directors, officers, employees, agents and stockholders
of the Adviser are or may be "interested persons" of the
Trust as Trustees, officers, shareholders or otherwise;
and
(c) The existence of any such dual interest shall not affect
the validity hereof or of any transactions hereunder.
13. This Agreement shall become effective with respect to the Existing
Series as of the date stated above (the "Contract Date") and with respect to any
Additional Series, on the date specified in the notice to the Trust from the
Adviser in accordance with paragraph 2 hereof that the Adviser is willing to
serve as Adviser with respect to such Additional Series. Unless terminated as
herein provided, this Agreement shall remain in full force and effect until June
30, 2000, and, with respect to each Additional Series, until the next
anniversary of the Contract Date following the date on which such Additional
Series became subject to the terms and conditions of this Agreement and shall
continue in full force and effect for periods of one year thereafter with
respect to each Series so long as (a) such continuance with respect to any such
Series is approved at least annually by either the Trustees or by a "vote of the
majority of the outstanding voting securities" of such Series and (b) the terms
and any renewal of this Agreement with respect to any such Series have been
approved by a vote of a majority of the Trustees who are not parties to this
Agreement or "interested persons" of any such party cast in person at a meeting
called for the purpose of voting on such approval.
Any approval of this Agreement by a vote of the holders of a "majority
of the outstanding voting securities" of any Series shall be effective to
continue this Agreement with respect to such Series notwithstanding (a) that
this Agreement has not been approved by a "vote of a majority of
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the outstanding voting securities" of any other Series of the Trust affected
thereby and (b) that this Agreement has not been approved by the holders of a
"vote of a majority of the outstanding voting securities" of the Trust, unless
either such additional approval shall be required by any other applicable law or
otherwise.
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14. The Trust may terminate this Agreement with respect to the Trust or
to any Series upon 60 days' written notice to the Adviser at any time, without
the payment of any penalty, by vote of the Trustees or, as to each Series, by a
"vote of the majority of the outstanding voting securities" of such Series. The
Adviser may terminate this Agreement upon 60 days' written notice to the Trust,
without the payment of any penalty. This Agreement shall immediately terminate
in the event of its "assignment".
15. The terms "majority of the outstanding voting securities",
"interested persons" and "assignment", when used herein, shall have the
respective meanings in the 1940 Act.
16. The Adviser hereby grants the Trust a non-exclusive license to use
"Phoenix" in its name and its business and warrants that it has the right to
grant such a license. In the event of termination of this Agreement, or at the
request of the Adviser, the Trust will eliminate all reference to "Phoenix" from
its name, and will not thereafter transact business in a name using the word
"Phoenix" in any form or combination whatsoever, or otherwise use the word
"Phoenix" as part of its name. The Trust will thereafter in all prospectuses,
advertising materials, letterheads, and other material designed to be read by
investors and prospective investors delete from its name the word "Phoenix" or
any approximation thereof. If the Adviser chooses to withdraw the Trust's right
to use the word "Phoenix", it agrees to submit the question of continuing this
Agreement to a vote of the Trust's shareholders at the time of such withdrawal.
17. Reference is hereby made to the Agreement and Declaration of Trust
dated December 18, 1995 establishing the Trust, to the Trust's Certificate of
Trust, also dated December 18, 1995, which is on file with the Office of the
Secretary of State of the State of Delaware, and to any and all amendments
thereto. The name Phoenix-Seneca Funds refers to the Trustees under said
Agreement and Declaration of Trust, as Trustees and not personally, and no
Trustee, shareholder, officer, agent or employee of the Trust shall be held to
any personal liability in connection with the affairs of the Trust; only the
trust estate under said Agreement and Declaration of Trust is liable. Without
limiting the generality of the foregoing, neither the Adviser 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 Trust or of any
successor of the Trust, whether such liability now exists or is hereafter
incurred for claims against the trust estate.
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18. This Agreement shall be construed and the rights and obligations of
the parties hereunder enforced in accordance with the laws of the State of
Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first written
above.
PHOENIX-SENECA FUNDS
By:
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Xxxx X. Seneca
President
PHOENIX INVESTMENT COUNSEL, INC.
By:
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Xxxxxxx X. Xxxxxx
President
