SUBADVISORY AGREEMENT
THE PHOENIX EDGE SERIES FUND
Alliance Capital Management L.P. Dated: October 29, 2001
1345 Avenue of the Americas ----------------
Xxx Xxxx, Xxx Xxxx 00000
WHEREAS, The Phoenix Edge Series Fund (the "Fund") is an open-end
investment company of the series type registered under the Investment Company
Act of 1940 (the "Act"), and is subject to the rules and regulations promulgated
thereunder;
WHEREAS, the shares of the Fund are offered or may be offered in
several series, including the Phoenix-Alliance/Xxxxxxxxx Growth + Value Series
(hereafter referred to as the "Series");
WHEREAS, Phoenix Variable Advisors, Inc. (the "Advisor") evaluates and
recommends series advisors for the Series and is responsible for the day-to-day
management of the Series; and
WHEREAS, the Advisor desires to retain Alliance Capital Management
L.P., a limited partnership organized under the laws of the State of Delaware
(the "Subadvisor") to furnish portfolio management services for the Series and
its Xxxxxxxxx Investment Research and Management Unit to manage the portion of
the assets invested in value stocks, and the Subadvisor is willing to furnish
such services.
NOW, THEREFORE, the Advisor and the Subadvisor agree as follows:
1. Employment as a Subadvisor. The Advisor, being duly authorized, hereby
employs the Subadvisor to invest and reinvest the assets of the Series
on the terms and conditions set forth herein. The services of the
Subadvisor hereunder are not to be deemed exclusive; the Subadvisor may
render services to others and engage in other activities which do not
conflict in any material manner with the Subadvisor's performance
hereunder.
2. Acceptance of Employment; Standard of Performance. The Subadvisor
accepts its employment as a subadvisor to the Advisor and agrees to use
its best professional judgment to make investment decisions for the
Series in accordance with the provisions of this Agreement.
Services of Subadvisor.
-----------------------
(a) The Subadvisor shall provide the services set forth
herein and in Schedule A attached hereto and made a
part hereof. In providing management services to the
Series, the Subadvisor shall be subject to the
investment objectives, policies and restrictions of the
Fund as they apply to the Series and as set forth in
the Fund's then current Prospectus and Statement of
Additional Information (as the same may be modified
from time to time), and to the Fund's Agreement and
Declaration of Trust, to the investment and other
restrictions set forth in the Act, the Securities Act
of 1933, as amended, and the diversification
requirements of Section 817(h) of the Internal
Revenue Code ("IRC"), the provisions of Subchapter M of
the IRC applicable to regulated investment companies,
including those which underly variable annuities, the
distribution requirements necessary to avoid payment of
any excise tax pursuant to Section 4982 of the IRC and
the rules and regulations adopted under each such
provision; and to the supervision and direction of the
Advisor, who in turn is subject to the supervision and
direction of the Board of Trustees of the Fund. The
Subadvisor shall not, without the Advisor's prior
approval, effect any transactions which would cause the
Series at the time of the transaction to be out of
compliance with any of such restrictions or policies.
The Subadvisor will keep the Fund and the Advisor
informed of developments materially affecting the Fund,
and will, on its own initiative, furnish the Fund and
the Advisor from time to time with whatever information
the Sub-Advisor believes is appropriate for this
purpose.
(b) Subject at all times to the limitations set forth in
subparagraph 3(a) above, the Subadvisor shall have full
authority at all times with respect to the management
of the Series, including, but not limited to, authority
to give written or oral instructions to various
broker/dealers, banks or other agents; to bind and
obligate the Fund to and for the carrying out of
contracts, arrangements, or transactions which shall be
entered into by the Subadvisor on the Fund's behalf
with or through such broker/dealers, banks or other
agents; to direct the purchase and sale of any
securities; and generally to do and take all action
necessary in connection with the Series, or considered
desirable by the Subadvisor with respect thereto. The
Subadvisor may maintain uninvested cash balances in the
Series as it shall deem reasonable without incurring
any liability for the payment of interest thereon.
4. Expenses. The Subadvisor shall furnish the following at its own expense:
(a) Office facilities, including office space, furniture
and equipment utilized by its employees, in the
fulfillment of Subadvisor's responsibilities hereunder;
(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 Subadvisor hereunder; and
(c) The Subadvisor need not provide personnel to perform,
or pay the expenses of the Advisor for, services
customarily performed for an open-end management
investment company by its national distributor,
custodian, financial agent, transfer agent, auditors
and legal counsel.
5. Transaction Procedures. All transactions 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
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. The Subadvisor shall advise the Custodian and confirm in writing
or by confirmed electronic transmission to the Fund all investment orders
for the Series placed by it with brokers and dealers at the time and in
the manner set forth in the Custodian Agreement and in Schedule B hereto
(as amended from time to time). The Fund shall 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, the Subadvisor shall have no responsibility or liability with
respect to custodial arrangements or the acts, omissions or other conduct
of the Custodian.
6. Allocation of Brokerage. The Subadvisor shall have authority and
discretion to select brokers and dealers to execute Series transactions
initiated by the Subadvisor, and to select the markets on or in which the
transactions will be executed.
A. 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 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 obtain "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
Securities Exchange Act of 1934) 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.
B. Subject to the requirements of paragraph A above, the Advisor shall
have the right to require that transactions giving rise to brokerage
commissions, in an amount to be 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 and relationship
may, but need not, be of direct or exclusive benefit to the Series. In
addition, subject to paragraph A above, 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.
C. Subject to its duty to seek best execution and compliance with the
requirements of Section 11(a) of the Securities Exchange Act of 1934, as
amended, the Subadvisor may utilize its affiliate Xxxxxxx X. Xxxxxxxxx &
Co., LLC ("SCB LLC"), to execute trades for the Series from time to time
at rates not exceeding the usual and customary broker's commission. Under
Federal law, the Subadvisor must obtain the Advisor's consent to permit
SCB LLC to effect agency cross transactions for the Series, which consent
is hereby granted. The Subadvisor represents, warrants and covenants that
all agency cross transactions for the Series will be effected by
Subadvisor and SCB LLC strictly in accordance with Rule 206(3)-2 under
the Investment Advisers Act of 1940, as
amended (the "Advisers Act"). An agency cross transaction is where SCB
LLC purchases or sells securities from or to a non-managed account on
behalf of a client's managed account. By "non-managed" it is meant that
the account is not managed by Subadvisor, or any of its respective
affiliated investment advisers. Pursuant to this consent, the Subadvisor
will only permit SCB LLC to effect an agency cross transaction for the
Series with a non-managed account. In an agency cross transaction where
SCB LLC acts as broker for the Series, SCB LLC receives commissions from
both sides of the trade and there is a potentially conflicting division
of loyalties and responsibilities. However, as both sides to the trade
want to execute the transaction at the best price without moving the
market price in either direction, the Subadvisor believes that an agency
cross transaction will aid both sides to the trade in obtaining the best
price for the trade. THE TRUSTEES OR THE ADVISOR MAY REVOKE THIS CONSENT
BY XXXXXX NOTICE TO THE SUBADVISOR AT ANY TIME.
7. 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 C. Pursuant to the Investment
Advisory Agreement between the Fund and the Advisor, the Advisor is
solely responsible for the payment of fees to the Subadvisor. Brokerage
services provided by an affiliate of Subadvisor are not within the scope
of the duties of the Subadvisor under this Agreement. Subject to the
requirements of applicable law and any procedures adopted by the
Trustees, SCB LLC may receive brokerage commissions from the Series for
such services.
8. Limitation of Liability. The 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, provided, however, that such acts or omissions shall not have
constituted a breach of the investment objectives, policies and
restrictions applicable to the Series and that such acts or omissions
shall not have resulted from the Subadvisor's willful misfeasance, bad
faith or gross negligence, a violation of the standard of care
established by and applicable to the Subadvisor in its actions under this
Agreement or a breach of its duty or of its obligations hereunder
(provided, however, that the foregoing shall not be construed to protect
the Subadvisor from liability under the Act, other federal or state
securities laws or common law).
9. Confidentiality. Subject to the duty of the 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.
10. Assignment. This Agreement shall terminate automatically in the event of
its assignment, as that term is defined in Section 2(a)(4) of the Act.
The Subadvisor shall notify the Advisor in writing sufficiently in
advance of any proposed change of control, as defined in Section 2(a)(9)
of the Act, as will enable the Advisor to consider whether an assignment
as defined in Section 2(a)(4) of the Act will occur and to take the steps
it deems necessary.
11. Representations, Warranties and Agreements of the Subadvisor. The
Subadvisor represents, warrants and agrees that:
A. It is registered as an "investment adviser" under the Investment
Advisers Act of 1940 ("Advisers Act").
B. It will maintain, in the form and for the period required by Rule
31a-2 under the Act, the records and information required by [the
relevant portion of subparagraph (b) (1) and] subparagraphs (b)(5),
(b)(6), (b)(7), (b)(9), (b)(10) and (f) of Rule 31a-1 under the Act
respecting its activities with respect to the Series, and such other
records with respect thereto relating to the services the Subadvisor
provides under this Agreement as may be required in the future by
applicable SEC rules. The records maintained by the Subadvisor hereunder
shall be the property of the Fund and surrendered promptly upon request.
It has a written code of ethics complying with the requirements of Rule
17j-l under the Act and will provide the Advisor with a copy of the code
of ethics and evidence of its adoption. Subadvisor acknowledges receipt
of the written code of ethics adopted by and on behalf of the Fund (the
"Code of Ethics"). The Subadvisor will not be subject to the Code of
Ethics of the Fund as long as its code of ethics complies with the
applicable regulatory requirements and its code of ethics is approved by
the Board of Trustees of the Trust. Within 10 days of the end of each
calendar quarter while this Agreement is in effect, a duly authorized
compliance officer of the Subadvisor shall certify to the Fund and to the
Advisor that the Subadvisor has complied with the requirements of Rule
17j-l during the previous calendar quarter and that there has been no
violation of its code of ethics, 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 this
subparagraph.
It will use all necessary efforts to manage the Series so that the Fund
will qualify as a regulated investment company under Subchapter M of the
IRC and will satisfy the diversification requirements of Section 817(h)
of the IRC and the distribution requirements necessary to avoid payment
of any excise tax pursuant to Section 4982 of the IRC and the rules and
regulations adopted under each such provision.
It will furnish the Advisor a copy of its Form ADV as filed with the
Securities and Exchange Commission.
It will be responsible for the preparation and filing of Schedule 13G and
Form 13F on behalf of the Series in accordance with the requirements
thereunder.
It will notify the Advisor of any changes in the membership of its
general partners within a reasonable time after such change.
Reference is hereby made to the Declaration of Trust dated February 18,
1986, establishing the Fund, a copy of which has been filed with the
Secretary of the Commonwealth of Massachusetts and elsewhere as required
by law, and to any and all amendments thereto so filed or hereafter so
filed with the Secretary of the Commonwealth of Massachusetts and
elsewhere as required by law. The name Phoenix Edge Series Fund refers to
the Trustees under said Declaration of Fund, as Trustees and not
personally, and no Trustee, shareholder, officer, agent or employee of
the Fund shall
be held to any personal liability in connection with the affairs of the
Fund; only the Fund estate under said Declaration of Trust is liable.
Without limiting the generality of the foregoing, neither the Subadvisor
nor any of its officers, directors, partners, shareholders or employees
shall, under any circumstances, have recourse or cause or willingly
permit recourse to be had directly or indirectly to any personal,
statutory, or other liability of any shareholder, Trustee, officer, agent
or employee of the Fund or of any successor of the Fund, whether such
liability now exists or is hereafter incurred for claims against the
trust estate.
12. Representations, Warranties and Agreements of the Advisor. The Advisor
represents, warrants and agrees that:
A. It has the power and has taken all necessary action, and has
obtained all necessary licenses, authorizations and approvals, to execute
this Agreement, which constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms.
B. It is registered as an "investment adviser" under the Advisers Act.
C. It will deliver to the Subadvisor true and complete copies of the
Prospectus, Statement of Additional Information, and such other documents
or instruments governing the investments and investment policies and
practices of the Series, and during the term of this Agreement will
promptly deliver to the Subadvisor true and complete copies of all
documents and instruments supplementing, amending, or otherwise becoming
such Fund Documents before or at the time they become effective.
It will deliver to the Subadvisor any limitations imposed upon the Fund
as a result of relevant diversification requirements under the
provisions of Section 817(h) of the Internal Revenue Code of 1986, as
amended.
E. It will furnish or otherwise make available to the Subadvisor such
other information relating to the business affairs of the Fund as the
Subadvisor at any time, or from time to time, reasonably requests in
order to discharge its obligations hereunder.
13. Reports. The Subadvisor shall provide the Advisor such periodic and
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 to the Advisor
as agent of the Fund, and promptly upon request surrendered to either.
The Subadvisor is authorized to supply the Fund's independent
accountants, PricewaterhouseCoopers LLP, or any successor accountant for
the Fund, any information that they may request in connection with the
Fund.
14. Proxies. Unless the Advisor or the Fund gives the Subadviser written
instructions to the contrary, Subadviser will vote, and shall comply with
the Fund's proxy voting procedures then in effect, to vote or abstain
from voting, all proxies solicited by or with respect to the issuers of
securities in which assets of the Series may be invested. The Advisor
shall cause the Custodian to forward promptly to Subadvisor all proxies
upon receipt, so as to afford Subadvisor a reasonable amount of time in
which to determine how to vote such proxies. Subadvisor agrees to provide
the Advisor with quarterly proxy voting reports in such form as the
Advisor may request from time to time.
15. Recordkeeping. The Subadviser will assist the recordkeeping agent for 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.
16. 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 Schedules A and B, is subject to the approval of the
Trustees and the Shareholders of the Fund as and to the extent required
by the Act.
17. Effective Date; Term. This Agreement shall become effective on the date
set forth on the first page of this Agreement. Unless terminated as
hereinafter provided, this Agreement shall remain in full force and
effect until November 30, 2002, and thereafter only so long as its
continuance has been specifically approved at least annually by the
Trustees in accordance with Section 15(a) of the Act, and by the majority
vote of the disinterested Trustees in accordance with the requirements of
Section 15(c) thereof.
18. Notices. Except as otherwise provided in this Agreement, all notices or
other communications required or permitted to be given hereunder shall be
in writing and shall be delivered or sent by confirmed facsimile or by
pre-paid first class letter post or overnight courier to the following
addresses or to such other address as the relevant addressee shall
hereafter notify for such purpose to the others by notice in writing and
shall be deemed to have been given at the time of delivery.
If to the Advisor: PHOENIX VARIABLE ADVISORS, INC.
One American Row
Hartford, Connecticut
Attention: Xxxxxx Xxxxxx
If to the Subadviser: Alliance Capital Management L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: J. Xxxxxx Xxxxx
19. Termination. This Agreement may be terminated by 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, upon sixty (60) days' written notice to the other party, but
any such termination shall not affect the status, obligations or
liabilities of either party hereto to the other party.
20. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of
the Commonwealth of Massachusetts.
21. Severability. If any term or condition of this Agreement shall be invalid
or unenforceable to any extent or in any application, then the remainder
of this Agreement
shall not be affected thereby, and each and every term and condition of
this Agreement shall be valid and enforced to the fullest extent
permitted by law.
PHOENIX VARIABLE ADVISORS, INC. By: /s/ Xxxxx X. Xxx Title: Xxxxx X. Xxx,
President ----------------
ACCEPTED:
ALLIANCE CAPITAL MANAGEMENT L.P.
BY: ALLIANCE CAPITAL MANAGEMENT
CORPORATION, ITS GENERAL PARTNER
By: /s/ Xxxxx Xxxxxx
--------------------
Title: Xxxxx Xxxxxx, Assistant Secretary
SCHEDULES: A. Subadvisor Functions
B. Operational Procedures
C. Fee Schedule
SCHEDULE A
SUBADVISOR FUNCTIONS
With respect to managing the investment and reinvestment of the Series
assets, the Subadvisor shall provide, at its own expense:
(a) An investment program for the Series consistent with its
investment objectives based upon the development, review and
adjustment of buy/sell strategies approved from time to time by
the Board of Trustees and Advisor;
(b) Implementation of the investment program for the Series based
upon the foregoing criteria;
(c) Annual reports, in form and substance acceptable to the Advisor
and Subadvisor, with respect to foreign custody as governed by
Rule 17f-7 under the Act.
(d) Quarterly reports, in form and substance acceptable to the
Advisor, with respect to: i) compliance with the Subadvisor's
code of ethics; ii) compliance with procedures adopted from time
to time by the Trustees of the Fund relative to securities
eligible for resale under Rule 144A under the Securities Act of
1933, as amended; iii) diversification of Series assets in
accordance with the then prevailing prospectus and statement of
additional information pertaining to the Series and governing
laws; iv) compliance with governing restrictions relating to the
fair valuation of securities for which market quotations are not
readily available or considered "illiquid" for the purposes of
complying with the Series limitation on acquisition of illiquid
securities; v) cross transactions conducted pursuant to Rule
17a-7 under the Act; vi) proxy voting reports; vii) any and all
other reports reasonably requested in accordance with or
described in this Agreement; and, viii) the implementation of
the Series investment program, including, without limitation,
analysis of Series performance;
(e) Attendance by appropriate representatives of the Subadvisor at
meetings requested by the Advisor or Trustees at such time(s)
and location(s) as reasonably requested by the Advisor or
Trustees; and
(f) Participation, overall assistance and support in marketing the
Series, including, without limitation, meetings with pension
fund representatives, broker/dealers who have a sales agreement
with Phoenix Equity Planning Corporation, and other parties
requested by the Advisor.
(g) This Schedule A is subject to amendment from time to time to
require additional reports as contemplated by Paragraph 13 of
this Agreement.
SCHEDULE B
OPERATIONAL PROCEDURES
In order to minimize operational problems, it will be necessary for a flow of
information to be supplied to State Street Bank (the "Custodian"), the custodian
for the Fund.
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, no later
than 8:30 p.m. (Eastern Standard time) on the day of the trade. The deadline for
semi-annual and annual financial reporting days is 5 p.m. The necessary
information can be sent via facsimile machine to the Custodian. Information
provided to the Custodian shall include the following:
1. Purchase or sale;
2. Security name;
3. CUSIP number (if applicable);
4. Number of shares and sales price per share;
5. Executing broker;
6. Settlement agent;
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; and
14. Identified tax lot (if applicable).
When opening accounts with brokers for, and in the name of, the Fund, the
account must be a cash account. No margin accounts are to be maintained in the
name of the Fund. Delivery instructions are as specified by the Custodian. The
Custodian will supply the Subadvisor daily with a cash availability report. This
will normally be done by confirmed facsimile or confirmed electronic
transmission so that the Subadvisor will know the amount available for
investment purposes.
SCHEDULE C
SUBADVISORY FEE
For services provided to the Fund pursuant to paragraph 3 hereof, during
the period commencing on the date of this Agreement and ending on the latter to
occur of the one year anniversary of this Agreement or December 31, 2002, the
Advisor will pay to the Subadvisor, on or before the 10th day of each month, a
fee, payable in arrears, at the annual rate of 0.500% of average net assets in
the Series. Thereafter, the fee shall be calculated at the following annual
rates:
0.900% on the first $20 million of average net
assets; 0.750% on the next $20 million of average net
assets; 0.600% on the next $20 million of average net
assets; 0.400% on the next $40 million of average net
assets; 0.300% on next average net assets in excess
of $100 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.
