INVESTMENT MANAGEMENT AGREEMENT
THIS INVESTMENT MANAGEMENT AGREEMENT made as of the 3rd day of September,
1997 by and between PHOENIX-ENGEMANN FUNDS (formerly called "PASADENA INVESTMENT
TRUST"), a Massachusetts business trust (the "Trust"), and XXXXX XXXXXXXX &
ASSOCIATES, INC., a California corporation (the "Manager"), with respect to each
Series or Fund of the Trust set forth in Appendix A hereto, as may be amended
from time to time (the "Funds").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company, registered
as such under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Manager is registered as an investment adviser under the
Investment Advisers Act of 1940, and is engaged in the business of supplying
investment advice and investment management services, as an independent
contractor; and
WHEREAS, the Trust desires to retain the Manager to render investment
advice and investment management services to the Funds pursuant to the terms and
provisions of this Agreement, and the Manager is interested in furnishing said
advice and services;
NOW, THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties hereto, intending to be legally bound hereby,
mutually agree as follows:
1. APPOINTMENT OF MANAGER. The Trust hereby employs the Manager, and the
Manager hereby accepts such employment, to render investment advice and
investment management services with respect to the assets of the Funds for the
period and on the terms set forth in this Agreement, subject to the supervision
and direction of the Trust's Board of Trustees.
2. DUTIES OF MANAGER.
(a) The Manager shall, except as otherwise provided for herein, render or
make available all services needed for the investment management of the Funds,
and shall, as part of its duties hereunder, (i) furnish the Funds with advice
and recommendations with respect to the investment of each Fund's assets and the
purchase and sale of portfolio securities for the Funds, including the taking of
such other steps as may be necessary to
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implement such advice and recommendations; (ii) furnish the Funds with reports,
statements and other data on securities, economic conditions and other pertinent
subjects which the Trust's Board of Trustees may request; (iii) in general
supervise and manage the investments of the Funds, subject to the ultimate
supervision and direction of the Trust's Board of Trustees; (iv) prepare and
coordinate reports and other materials with respect to the Funds to be supplied
to the Board of Trustees of the Trust, including, without limitation, such
periodic and special reports with respect to each Fund's investment activities
as the Board may reasonably request; (v) provide personnel, office space,
facilities and equipment as may be needed by the Funds in their day-to-day
operations; and (vi) provide persons satisfactory to the Trust's Board of
Trustees to act as officers and employees of the Trust and the Funds (such
officers and employees, as well as certain Trustees, may be trustees, directors,
officers, or employees of the Manager or its affiliates).
(b) The Manager shall place orders for the purchase or sale of
securities either directly with the issuer or with a broker or dealer selected
by the Manager. In placing each Fund's securities trades, it is recognized that
the Manager will give primary consideration to securing the most favorable price
and efficient execution, so that each Fund's total cost or proceeds in each
transaction will be the most favorable under prevailing market conditions.
Within the framework of this policy, the Manager may consider the financial
responsibility, research and investment information, and other services provided
by brokers or dealers who may effect or be a party to any such transaction or
other transactions to which other clients of the Manager may be a party.
It is understood that it is desirable for the Funds that the Manager have
access to investment and market research and securities and economic analyses
provided by brokers and others. It is also understood that brokers providing
such services may execute brokerage transactions at a higher cost to the Funds
than might result from the allocation of brokerage to other brokers on the basis
of seeking the most favorable price and efficient execution. Therefore, the
purchase and sale of securities for the Funds may be made with brokers who
provide such research and analysis, subject to review by the Trust's Board of
Trustees from time to time with respect to the extent and continuation of this
practice to determine whether such Fund benefits, directly or indirectly, from
such practice. It is understood by both parties that the Manager may select
broker-dealers for the execution of any Fund's portfolio transactions who
provide research and analysis as the Manager may lawfully and appropriately use
in its investment management and advisory capacities, whether or not such
research and analysis may also be useful to the Manager in connection with its
services to other clients.
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On occasions when the Manager deems the purchase or sale of a security to
be in the best interest of the Funds as well as of other clients, the Manager,
to the extent permitted by applicable laws and regulations, may aggregate the
securities to be so purchased or sold in order to obtain the most favorable
price or lower brokerage commissions and the most efficient execution. In such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Manager in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Funds and to such other clients. In the event transactions
for the Funds are not aggregated with contemporaneous transactions involving the
same security, the Manager will vary the order in which the transactions are
handled to ensure fair treatment over time for all clients, including the Funds.
3. BEST EFFORTS AND JUDGMENT. The Manager shall use its best judgment
and efforts in rendering the advice and services to the Funds as contemplated
by this Agreement.
4. INDEPENDENT CONTRACTOR. The Manager shall, for all purposes herein,
be deemed to be an independent contractor, and shall, unless otherwise expressly
provided and authorized to do so, have no authority to act for or represent the
Trust or the Funds in any way, or in any way be deemed an agent fro the Trust or
for the Funds. It is expressly understood and agreed that the services to be
rendered by the Manager to the Funds under the provisions of this Agreement are
not to be deemed exclusive, and the Manager shall be free to render similar or
different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby.
5. MANAGER'S PERSONNEL. The Manager shall, at its own expense, maintain
such staff and employ or retain such personnel and consult with such other
persons as it shall from time to time determine to be necessary to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Manager shall be
deemed to include persons employed or retained by the Manager to furnish
statistical, research, and other factual information, advice regarding economic
factors and trends, information with respect to technical and scientific
developments, and such other information, advice and assistance as the Manager
may desire and request.
6. REPORTS BY THE FUNDS TO MANAGER. Each Fund will from time to time
furnish to the Manager detailed statements of its investments and assets, and
information as to its investment objective and needs, and will make available to
the Manager such financial reports, proxy statements, legal and other
information relating to each Fund's
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investments as may be in its possession or available to it, together with such
other information as the Manager may reasonably request.
7. EXPENSES.
(a) The Manager is responsible for the following expenses incurred by
or allocated to each Fund: (i) the compensation of the Trust's employees,
officers and trustees (other than those trustees who are not interested persons
of the Manager) and (ii) the expenses of obtaining office space and equipment.
(b) Each Fund is responsible for and has assumed the obligation for
payment of all of its operating expenses, other than those set forth in
Subparagraph 7(a) above, including but not limited to: (i) brokerage and
commission expenses, (ii) federal, state, or local taxes, including issue and
transfer taxes, incurred by or levied on each Fund, (iii) interest charges on
any borrowings, (iv) charges and expenses of each Fund's custodian and transfer
agent, (v) payment of all investment advisory and management fees (including the
fees payable to the Manager under this Agreement), (vi) insurance premiums on
each Fund's property and personnel, including the fidelity bond and liability
insurance for officers and Trustees, (vii) printing and mailing of all reports,
including semi-annual and annual reports, prospectuses, and statements of
additional information to existing shareholders, (viii) fees and expenses of
registering each Fund's shares under the federal securities laws and of
qualifying its shares under applicable state securities (Blue Sky) laws
subsequent to each Fund's initial fiscal period, including expenses attendant
upon renewing and increasing such registrations and qualifications, (ix) legal
fees and expenses, (x) auditing expenses, including auditing fees of independent
public accountants, (xi) all costs associated with shareholders meetings and the
preparation and dissemination of proxy solicitation materials, except for
meetings called solely for the Manager's benefit, (xii) payments due under the
Administration Agreement between the Trust and the Administrator, (xiii) dues
and other costs of membership in industry associations, subject to the approval
of any such membership by the Board of Trustees, (xiv) service fees to be paid
to service providers pursuant to Services Agreements between the Trust and such
service providers, (xv) compensation of trustees who are not interested persons
of the Manager and (xvi) any extraordinary and non-recurring expenses, except as
otherwise prescribed herein. Certain of these Fund expenses may be assumed by
the Administrator under an Administration Agreement.
(c) To the extent the Manager incurs any costs or performs any
services which are an obligation of any Fund, as set forth herein, such Fund
shall promptly reimburse the Manager for such costs and expenses, except to the
extent the Administrator has agreed to bear such expenses as provided in the
Administration
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Agreement between the Trust and the Administrator. To the extent the services
for which any Fund is otherwise obligated to pay are performed by the Manager,
the Manager shall be entitled to recover from such Fund only to the extent of
the Manager's actual costs for such services, including the cost of personnel,
office space, and other facilities applicable to the furnishing of such
services.
8. INVESTMENT ADVISORY AND MANAGEMENT FEE.
(a) Each of the Funds shall pay to the Manager, and the Manager
agrees to accept, as full compensation for all investment management and
advisory services furnished or provided to the Funds pursuant to this Agreement,
a management fee in an amount equal to the per annum rate of each Fund's average
daily net assets as set forth in Appendix B below.
(b) The management fee shall be accrued daily by the Funds and paid
to the Manager upon request.
(c) If this Agreement is terminated, the Manager shall be entitled to
its fee through the date of termination, and such fee shall be payable within
ten (10) days after the date of termination.
(d) The Manager may reduce any portion of the compensation or
reimbursement of expenses due to it pursuant to this Agreement and may agree to
make payments to limit the expenses which are the responsibility of each Fund
under this Agreement. Any such reduction or payment shall be applicable only to
such specific reduction or payment and shall not constitute an agreement to
reduce any future compensation or reimbursement due to the Manager hereunder or
to continue future payments. Any such reduction will be agreed to prior to
accrual of the related expense or fee and will be estimated daily and reconciled
and paid on a monthly basis.
(e) The Manager may agree not to require payment of any portion of the
compensation or reimbursement of expenses otherwise due to it pursuant to this
Agreement prior to the time such compensation or reimbursement has accrued as a
liability of any Fund. Any such agreement shall be applicable only with respect
to the specific items covered thereby and shall not constitute an agreement not
to require payment of any future compensation or reimbursement due to the
Manager hereunder.
(f) Notwithstanding anything to the contrary contained herein, no fee
shall be payable to the Manager under this Agreement with respect to any assets
of any Fund
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that are invested in a pooled investment fund upon which a separate management
or advisory fee payable to the Manager is imposed.
9. FUND SHARE ACTIVITIES OF MANAGER'S OFFICERS AND EMPLOYEES. The
Manager agrees that neither it nor any of its officers or employees shall take
any short position in the shares of the Funds. This prohibition shall not
prevent the purchase of such shares by any of the officers and partners or bona
fide employees of the Manager or any trust, pension, profit-sharing or other
benefit plan for such persons or affiliates thereof, at a price not less than
the net asset value thereof at the time of purchase, as allowed pursuant to
rules promulgated under the 1940 Act.
10. CONFLICTS WITH TRUST'S GOVERNING DOCUMENTS AND APPLICABLE LAWS.
Nothing herein contained shall be deemed to require the Trust or the Funds to
take any action contrary to the Trust's Agreement and Declaration of Trust,
By-Laws, or any applicable statute or regulation, or to relieve or deprive the
Board of Trustees of the Trust of its responsibility for and control of the
conduct of the affairs of the Trust and the Funds.
11. MANAGER'S LIABILITIES.
(a) In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the obligations or duties hereunder on the
part of the Manager, the Manager shall not be subject to liability to the Trust
or the Funds or to any shareholder of any Fund for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security by the
Funds.
(b) Notwithstanding the foregoing, the Manger agrees to reimburse each
Fund for any and all costs, expenses, and counsel and trustees' fees reasonably
incurred by the Trust or on behalf of any Fund in the preparation, printing and
distribution of proxy statements, amendments to its Registration Statement,
holding of meetings of its shareholders or trustees, conducting of factual
investigations, any legal or administrative proceedings (including any
applications for exemptions or determinations by the Securities and Exchange
Commission) which such Fund incurs as the result of action or inaction of the
Manager or any of its officers and directors where the action or inaction
necessitating such expenditures (i) is directly or indirectly related to any
transactions or proposed transaction in the interests or control of the Manager
or its affiliates (or litigation related to any pending or proposed future
transaction in such interests or control); or (ii) is within the sole control of
the Manager or any of its affiliates or any of their officers, directors,
employees, or agents. So long as this Agreement is in effect, the
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Manager shall pay to each Fund the amount due for expenses subject to this
Subparagraph 11(b) within thirty (30) days after a xxxx or statement has been
received from the Fund therefor. This provision shall not be deemed to be a
waiver of any claim which the Trust or the Funds may have or may assert against
the Manager or others for costs, expenses, or damages heretofore incurred by the
Funds or for costs, expenses, or damages the Funds may hereafter incur which are
not reimbursable to it hereunder.
(c) No provision of this Agreement shall be construed to protect any
Trustee or officer of the Trust, or director or officer of the Manager, from
liability in violation of Sections 17(h) and (i) of the 1940 Act.
12. NON-EXCLUSIVITY. The Trust's employment of the Manager is not an
exclusive arrangement, and the Trust may from time to time employ other
individuals or entities to furnish it with the services provided for herein. In
the event that a Fund elects to terminate or not continue this Agreement with
the Manager, then the Manager shall have no duty and be under no obligation to
continue providing such Fund the services provided for herein; however, this
Agreement shall remain in effect with respect to each Fund that has not
specifically elected to terminate or not continue the Agreement.
13. TERM. This Agreement shall become effective as of the date of
execution and shall remain in effect until September 3, 1999 unless sooner
terminated as hereinafter provided. This Agreement shall continue in effect
thereafter for additional periods not exceeding one (1) year so long as such
continuation is approved for the Funds at least annually by (i) the Board of
Trustees of the Trust or by the vote of a majority of the outstanding voting
securities of the Funds and (ii) the vote of a majority of the Trustees of the
Trust who are not parties to this Agreement nor interested persons thereof, cast
in person at a meeting called for the purpose of voting on such approval.
14. TERMINATION. This Agreement may be terminated by the Trust on behalf
of any one or more of the Funds at any time without payment of any penalty, by
the Board of Trustees of the Trust or by vote of a majority of the outstanding
voting securities of a Fund, upon sixty (60) days' written notice to the
Manager, and by the Manager upon sixty (60) days' written notice to a Fund.
15. TERMINATION BY ASSIGNMENT. This Agreement shall terminate
automatically in the event of any transfer or assignment thereof, as defined in
the 1940 Act.
16. TRANSFER; ASSIGNMENT. This Agreement may not be transferred,
assigned,
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sold or in any manner hypothecated or pledged without the affirmative vote or
written consent of the holders of a majority of the outstanding voting
securities of each Fund.
17. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute or rule, or shall be otherwise
rendered invalid, the remainder of this Agreement shall not be affected thereby.
18. DEFINITIONS. The terms "majority of the outstanding voting
securities" and"interested persons" shall have the meanings as set forth in the
1940 Act.
19. NOTICE OF DECLARATION OF TRUST. The Manager acknowledges that it has
received notice of and accepts the limitations of the Trust's liability set
forth in Article VIII of its Agreement and Declaration of Trust. The Manager
agrees that the Trust's obligations under this Agreement shall be limited to the
Funds and to their assets, and that the Manager shall not seek satisfaction of
any such obligation from the shareholders of the Funds nor from any trustee,
officer, employee or agent of the Trust or the Fund.
20. CAPTIONS. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
21. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California as applicable to contracts
between California residents entered into and to be performed entirely within
California.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PASADENA INVESTMENT TRUST
By:
-------------------------------------
Xxxxx Xxxxxxxx,
President
XXXXX XXXXXXXX & ASSOCIATES, INC.
By:
-------------------------------------
Xxxxx Xxxxxxxx,
President
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APPENDIX A
List of Funds subject to Investment Management Agreement:
1. The Phoenix-Engemann Growth Fund (formerly called Pasadena Growth Fund)
2. The Phoenix-Engemann Balanced Return Fund (formerly called Pasadena
Balanced Return Fund)
3. The Phoenix-Engemann Nifty Fifty Fund (formerly called Pasadena Nifty
Fifty Fund)
4. The Phoenix-Engemann Global Growth Fund (formerly called Pasadena Global
Growth Fund)
5. The Phoenix-Engemann Small & Mid-Cap Growth Fund (formerly called Pasadena
Small & Mid-Cap Growth Fund)
6. The Phoenix-Engemann Value 25 Fund (formerly called Pasadena Value
25 Fund)
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APPENDIX B
Management Fee for Each Fund
Phoenix-Engemann Growth Fund
First $50 Million 0.90%
Next $450 Million 0.80%
Over $500 Million 0.70%
Phoenix-Engemann Nifty Fifty Fund
First $50 Million 0.90%
Next $450 Million 0.80%
Over $500 Million 0.70%
Phoenix-Engemann Balanced Return Fund
First $50 Million 0.80%
Next $450 Million 0.70%
Over $500 Million 0.60%
Phoenix-Engemann Global Growth Fund
First $50 Million 1.10%
Next $450 Million 1.00%
Over $500 Million 0.90%
Phoenix-Engemann Small & Mid-Cap Growth Fund
First $50 Million 1.00%
Next $450 Million 0.90%
Over $500 Million 0.80%
Phoenix-Engemann Value 25 Fund
First $50 Million 0.90%
Next $450 Million 0.80%
Over $500 Million 0.70%
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