EXHIBIT 23(d)1(6)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, effective as of the 1st day of January, 2005 (the
"Contract Date") by and between The Phoenix Edge Series Fund, a Massachusetts
business trust (the "Trust") and Xxxxxxxx Asset Management, a California
corporation (the "Advisor").
WITNESSETH THAT:
1. The Trust hereby appoints the Advisor to act as investment
advisor to the Trust on behalf of the series of the Trust established and
designated by the Board of Trustees of the Trust (the "Trustees") on or before
the date hereof, as listed on attached Schedule A (collectively, the "Existing
Series"), for the period and on the terms set forth herein. The Advisor 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 Advisor to
render investment advisory services hereunder with respect to one or more
additional series (the "Additional Series"), by agreement in writing, the Trust
and the Advisor may agree to amend Schedule A to include such Additional Series,
whereupon such Additional Series shall become subject to the terms and
conditions of this Agreement.
3. The Advisor 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. The Advisor may delegate its investment responsibilities under
paragraph 3 above with respect to the Series or segments thereof to one or more
persons or companies ("Subadvisor(s)") pursuant to an agreement between the
Advisor, the Trust and any such Subadvisor ("Subadvisory Agreement"). Each
Subadvisory Agreement may provide that the applicable Subadvisor, subject to the
control and supervision of the Board of Trustees and the Advisor, shall have
full investment discretion for the Series, shall make all determinations with
respect to the investment and reinvestment of the assets of each Series assigned
to it and the purchase and sale of portfolio securities of those assets, and
shall take such steps as may be necessary to implement investment decisions. Any
delegation of duties pursuant to this paragraph shall comply with any applicable
provisions of Section 15 of the Investment Company Act of 1940 (the "Act"),
except to the extent permitted by any exemptive order of the Securities and
Exchange Commission ("SEC") or similar relief. The Advisor shall not be
responsible or liable for the investment merits of any decision by a Subadvisor
to purchase, hold or sell a security for any Series' portfolio.
5. With respect to managing the investment and reinvestment of
the Series' assets, the Advisor shall provide, at its own expense:
(a) Investment research, advice and supervision;
(b) An investment program for each Series consistent with
its investment objectives, policies and procedures;
(c) Implementation of the investment program for each
Series including the purchase and sale of securities;
(d) Implementation of an investment program designed to
manage cash, cash equivalents and short-term
investments for a Series with respect to assets
designated from time to time to be managed by a
subadvisor to such Series;
(e) Advice and assistance on the general operations of the
Trust; and
(f) Regular reports to the Trustees on the implementation
of each Series' investment program.
6. The Advisor shall, for all purposes herein, be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Trust or the Series in
any way or otherwise be deemed an agent of the Trust or of the Series. However,
one or more shareholders, officers, directors or employees of the Advisor may
serve as trustees and/or officers of the Trust, but without compensation or
reimbursement of expenses for such services from the Trust. Nothing herein
contained shall be deemed to require the Trust to take any action contrary to
its Declaration of Trust, as amended (the "Declaration of Trust"), as amended,
restated or supplemented, or any applicable statute or regulation, or to relieve
or deprive the Board of Trustees of its responsibility for and control of the
affairs of the Series.
7. The Advisor 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);
(c) Except as otherwise approved by the Board, personnel to
serve without salaries from the Trust as officers or
agents of the Trust. The Advisor 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, registrar, dividend disbursing agent, auditors
and legal counsel;
(d) Compensation and expenses, if any, of the Trustees who
are also full-time employees of the Advisor or any of
its affiliates; and
2
(e) Any subadvisor recommended by the Advisor and appointed
to act on behalf of the Trust.
8. All costs and expenses not specifically enumerated herein as
payable by the Advisor 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 Advisor) 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 affiliated
persons of the Advisor (as that term is defined in the Act) or any of its
affiliates, expenses of Trustees' and shareholders' meetings including the cost
of printing and mailing proxies, expenses of Advisor personnel attending Trustee
meetings as required, expenses of insurance premiums for fidelity and other
coverage of the Trust and its personnel, 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, 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.
9. The Advisor shall adhere and shall use reasonable efforts to
cause the Trust to adhere to all applicable policies and procedures as adopted
from time to time by the Trustees, including but not limited to the following:
(a) Code of Ethics. The Advisor shall adopt a Code of
Ethics designed to prevent "access persons" (as defined
therein in accordance with Rule 17j-1 under the
Investment Company Act of 1940 (the "Investment Company
Act")) from engaging in fraudulent acts or transactions
that are, or have the potential of being viewed as, a
conflict of interest, and shall monitor for compliance
with its Code of Ethics and report any violations to
the Trust's Compliance Officer.
(b) Policy with Respect to Brokerage Allocation. The
Advisor shall have full trading discretion in selecting
brokers for Series transactions on a day to day basis
so long as each selection is in conformance with the
Trust's Policy with Respect to Brokerage Allocation.
Such discretion shall include use of "soft dollars" for
certain broker and research services, also in
conformance with the Trust's Policy with Respect to
Brokerage Allocation. The Advisor may delegate the
responsibilities under this section to a Subadvisor of
a Series.
3
(c) Procedures for the Determination of Liquidity of
Assets. It shall be the responsibility of the Advisor
to monitor the Series' assets that are not liquid,
making such determinations as to liquidity of a
particular asset as may be necessary, in accordance
with the Trust's Procedures for the Determination of
Liquidity of Assets. The Advisor may delegate the
responsibilities under this section to a Subadvisor of
a Series.
(d) Policy with Respect to Proxy Voting. In the absence of
specific direction to the contrary and in a manner
consistent with the Trust's Policy with Respect to
Proxy Voting, the Advisor shall be responsible for
voting proxies with respect to portfolio holdings of
the Trust. The Advisor shall review all proxy
solicitation materials and be responsible for voting
and handling all proxies in relation to the assets
under management by the Advisor in accordance with such
policies and procedures adopted or approved by each
Series'. Unless the Fund gives the Advisor written
instructions to the contrary, the Advisor will, in
compliance with the proxy voting procedures of the
Series then in effect or approved by the Series, vote
or abstain from voting, all proxies solicited by or
with respect to the issuers of securities in which the
assets of the Series may be invested. The Advisor shall
cause the Custodian to forward promptly to the Advisor
(or designee) all proxies upon receipt so as to afford
the Advisor a reasonable amount of time in which to
determine how to vote such proxies. The Advisor agrees
to provide the Trust with quarterly proxy voting
reports in such form as the Trust may request from time
to time. The Advisor may delegate the responsibilities
under this section to a Subadvisor of a Series.
(e) Procedures for the Valuation of Securities. It shall be
the responsibility of the Advisor to fully comply with
the Trust's Procedures for the Valuation of Securities.
The Advisor may delegate the responsibilities under
this section to a Subadvisor of a Series.
10. The Advisor hereby warrants and represents that it will
provide the requisite certifications requested by the chief executive officer
and chief financial officer of the Fund necessary for those named officers to
fulfill their reporting and certification obligations on Forms N-CSR and N-Q as
required under the Xxxxxxxx-Xxxxx Act of 2002.
11. For providing the services and assuming the expenses outlined
herein, the Trust agrees that the Advisor shall be compensated as follows:
(a) The Trust shall pay a monthly fee calculated at an
annual rate as specified in Schedule A. The amounts
payable to the Advisor with respect to the respective
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 Declaration of Trust.
(b) Compensation shall accrue immediately upon the
effective date of this Agreement.
4
(c) If there is termination of this Agreement with respect
to any Series during a month, the 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 Advisor agrees to reimburse the Trust for the
amount, if any, by which the total operating and
management expenses for any Series (including the
Advisor'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 Advisor 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.
12. The services of the Advisor to the Trust are not to be deemed
exclusive, the Advisor being free to render services to others and to engage in
other activities. Without relieving the Advisor of its duties hereunder and
subject to the prior approval of the Trustees and subject farther to compliance
with applicable provisions of the Investment Company Act, as amended, the
Advisor 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 Advisor
and any such agent.
13. The Advisor 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 Advisor in the performance of its duties hereunder.
14. It is understood that:
(a) Trustees, officers, employees, agents and shareholders
of the Trust are or may be "interested persons" of the
Advisor as directors, officers, stockholders or
otherwise;
(b) Directors, officers, employees, agents and stockholders
of the Advisor 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.
5
15. This Agreement shall become effective with respect to the
Existing Series as of the date stated above, and with respect to any Additional
Series, on the date specified in any amendment to this Agreement reflecting the
addition of each Additional Series in accordance with paragraph 2 (the
"Amendment Date"). Unless terminated as herein provided, this Agreement shall
remain in full force and effect until November 30, 2005 with respect to each
Existing Series and until November 30 of the first full calendar year following
the Amendment Date with respect to each Additional Series, 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; provided, however, that the continuance
of this Agreement with respect to each Additional Series is subject to its
approval by a "vote of a majority of the outstanding voting securities" of any
such Additional Series on or before the next anniversary of the Contract Date
following the date on which such Additional Series became a Series hereunder .
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 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.
16. The Advisor shall furnish any state insurance commissioner
with such information or reports in connection with the services provided under
this Agreement as the Commissioner may request in order to ascertain whether
variable life insurance or variable annuity operations are being conducted in
accordance with applicable law or regulations. The Trust shall own and shall be
open to inspection, audit and photocopying during regular business hours by the
Trustees, officers, counsel and auditors of the Trust.
17. The Trust may terminate this Agreement with respect to the
Trust or to any Series upon 60 days' written notice to the Advisor 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 Advisor 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".
18. The terms "majority of the outstanding voting securities",
"interested persons" and "assignment", when used herein, shall have the
respective meanings in the Investment Company Act.
6
19. In the event of termination of this Agreement, or at the
request of the Advisor, 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 a part of its name. The Trust will thereafter in all prospectuses,
advertising materials, letterheads, and other material designed to be read by
investors or prospective investors delete from the name the word "Phoenix" or
any approximation thereof. If the Advisor 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.
20. It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Trust personally, but bind only the trust
property of the Trust, as provided in the Declaration of Trust. The execution
and delivery of this Agreement have been authorized by the Trustees and
shareholders of the Trust and signed by the President of the Trust, acting as
such, and neither such authorization by such Trustees and shareholders nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or be binding upon or impose any liability on any of them
personally, but shall bind only the trust property of the Trust as provided in
its Declaration of Trust.
21. This Agreement shall be construed and the rights and
obligations of the parties hereunder enforced in accordance with the laws of the
State of Connecticut.
22. Subject to the duty of the Advisor and the Trust 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 any Additional Series that may be
named, and the actions of the Advisor and the Trust in respect thereof.
23. The Advisor will not advise or act on behalf of the Series in
regards to class action filings, with respect to any securities held in the
Series portfolio.
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.
THE PHOENIX EDGE SERIES FUND
By:/s/ Xxxx X. X'Xxxxxxx
--------------------------------
Name: Xxxx X. X'Xxxxxxx
Title: Senior Vice President
XXXXXXXX ASSET MANAGEMENT
By:/s/ Xxxxxxx Xxxx
--------------------------------
Name: Xxxxxxx Xxxx
Title: Chief Financial Officer
7
SCHEDULE A
----------
SERIES ANNUAL INVESTMENT ADVISORY FEE
------ ------------------------------
Phoenix-Xxxxxxxx Value Equity Series 0.70% on the first $250 million
0.65% on $250 million to $500 million
0.60% on the excess over $500 million
8
