EXHIBIT 99.d.4
FORM OF SUBADVISORY AGREEMENT
PHOENIX-ENGEMANN FUNDS
FORM OF SUBADVISORY AGREEMENT
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_________, 2005
Xxxxxxxx Asset Management
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
RE: SUBADVISORY AGREEMENT
Ladies and Gentlemen:
Phoenix-Engemann Funds (the "Fund") is a diversified open-end series investment
company registered under the Investment Company Act of 1940 (the "Act"), and is
subject to the rules and regulations promulgated thereunder. The shares of the
Fund are offered or may be offered in several series, including the
Phoenix-Xxxxxxxx Balanced Return Fund (hereafter referred to as the "Series").
Phoenix Investment Counsel, Inc. (the "Adviser") evaluates and recommends series
advisers for the Series and is responsible for the day-to-day management of the
Series.
1. Employment as a Subadviser. The Adviser, being duly authorized, hereby
employs Xxxxxxxx Asset Management (the "Subadviser") as a discretionary
series adviser to invest and reinvest the assets of the equity portion
of the portfolio of the Series on the terms and conditions set forth
herein. The services of the Subadviser hereunder are not to be deemed
exclusive; the Subadviser may render services to others and engage in
other activities that do not conflict in any material manner in the
Subadviser's performance hereunder.
2. Acceptance of Employment; Standard of Performance. The Subadviser
accepts its employment as a discretionary series adviser of the equity
portion of the portfolio of the Series and agrees to use its best
professional judgment to make investment decisions for the Series in
accordance with the provisions of this Agreement and as set forth in
Schedule D attached hereto and made a part hereof.
3. Services of Subadviser. In providing management services to the Series,
the Subadviser shall be subject to the investment objectives, policies
and restrictions of the Fund as they apply to the equity portion of the
portfolio of the Series only, 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 provided to the Subadviser by Adviser),
and to any applicable investment restrictions set forth in the Act and
the Rules thereunder, to the supervision and control of the Trustees of
the Fund (the "Trustees"), and to instructions from the Adviser. The
Subadviser shall not, without the Fund's prior approval, effect any
transactions that would cause the equity portion of the portfolio of
the Series at the time of the transaction to be out of compliance with
any such restrictions or policies. The Adviser shall be responsible for
monitoring compliance with the investment objectives, policies and
restrictions of the Fund.
4. Transaction Procedures. The series transactions placed for the Series
by the Subadviser 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 in writing, of all cash and/or securities due to or from
the Series. The Subadviser shall not have possession or custody of such
cash and/or securities or any responsibility or liability with respect
to such custody. The Subadviser shall advise the Custodian and confirm
in writing 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
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 Subadviser. 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 Subadviser shall have no
responsibility or liability with respect to custodial arrangements or
the act, omissions or other conduct of the Custodian.
5. Allocation of Brokerage. The Subadviser shall have authority and
discretion to select brokers and dealers to execute Series transactions
initiated by the Subadviser, and to select the markets on or in which
the transactions will be executed.
A. In placing orders for the sale and purchase of equity securities
for the Series, the Subadviser's primary responsibility shall be
to seek the best execution of orders at the most favorable
prices. However, this responsibility shall not obligate the
Subadviser to solicit competitive bids for each transaction or to
seek the lowest available commission cost to the Series, so long
as the Subadviser reasonably believes that the broker or dealer
selected by it can be expected to obtain a "best execution"
market price 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 Subadviser, viewed in terms of
either that particular transaction or of the Subadviser's overall
responsibilities with respect to its clients, including the
Series, as to which the Subadviser exercises investment
discretion, notwithstanding that the Series may not be the
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direct or exclusive beneficiary of any such services or that
another broker may be willing to charge the Series a lower
commission on the particular transaction.
B. The Subadviser shall not execute any securities transactions for
the Series with a broker or dealer that is an "affiliated person"
(as defined in the Act) of the Fund, the Subadviser or the
Adviser without the prior written approval of the Fund. The Fund
will provide the Subadviser with a list of brokers and dealers
that are "affiliated persons" of the Fund or Adviser.
6. Proxies and Class Actions. The Subadviser shall review all the proxy
solicitation materials it receives on behalf of the Series. Unless the
Adviser or the Fund gives the Subadviser written instructions to the
contrary, the Subadviser will, in compliance with the proxy voting
procedures of the Series then in effect, vote or abstain from voting,
all proxies received with respect to the issuers of the equity
securities in which assets of the Series may be invested. The Adviser
shall cause the Custodian to forward promptly to the Subadviser all
such proxies upon receipt, so as to afford the Subadviser a reasonable
amount of time in which to determine how to vote such proxies. The
Subadviser agrees to provide the Adviser with quarterly proxy voting
reports in such form as the Adviser may request from time to time. The
Subadviser will not advise or act on behalf of the Series in regard to
class action filings, with respect to any securities held in the Series
portfolio.
7. Fees for Services. The compensation of the Subadviser for its services
under this Agreement shall be calculated and paid by the Adviser in
accordance with the attached Schedule C. Pursuant to the Investment
Advisory Agreement between the Fund and the Adviser, the Adviser is
solely responsible for the payment of fees to the Subadviser.
8. Limitation of Liability. The Subadviser 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 Subadviser's
willful misfeasance, bad faith or gross negligence, a violation of the
standard of care established by and applicable to the Subadviser 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 Subadviser from liability under the Act).
9. Confidentiality. Subject to the duty of the Subadviser and the Fund 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 Subadviser 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 Subadviser shall notify the Fund in writing sufficiently in
advance of any proposed change of control, as
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defined in Section 2(a)(9) of the Act, as will enable the Fund to
consider whether an assignment as defined in Section 2(a)(4) of the Act
will occur, and to take the steps necessary to enter into a new
contract with the Subadviser.
11. Representations, Warranties and Agreements of the Subadviser. The
Subadviser 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, keep current and preserve on behalf of the
Series, in the manner required or permitted by the Act and the
Rules thereunder, the records identified in Schedule B (as
Schedule B may be amended from time to time). The Subadviser
agrees that such records are the property of the Series, and will
be surrendered to the Series or to Adviser as agent of the Series
promptly upon request of either.
C. It has or shall adopt a written code of ethics complying with the
requirements of Rule 17j-l under the Act and will provide the
Fund and Adviser with a copy of the code of ethics and evidence
of its adoption. Subadviser acknowledges receipt of the written
code of ethics adopted by and on behalf of the Fund (the "Code of
Ethics"). Within 15 days of the end of each calendar quarter
while this Agreement is in effect, a duly authorized compliance
officer of the Subadviser shall certify to the Fund and to
Adviser that the Subadviser 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, or if such a violation has occurred, that appropriate
action was taken in response to such violation. The Subadviser
shall permit the Fund and Adviser to examine the reports required
to be made by the Subadviser under Rule 17j-l(c)(1) and this
subparagraph.
D. Reference is hereby made to the Declaration of Trust dated August
17, 2000 establishing the Fund, a copy of which has been filed
with the Secretary of the State of Delaware and elsewhere as
required by law, and to any and all amendments thereto so filed
with the Secretary of the State of Delaware and elsewhere as
required by law, and to any and all amendments thereto so filed
or hereafter filed. The name "Phoenix Equity Trust" 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 trust estate
under said Declaration of Trust is liable. Without limiting the
generality of the foregoing, neither the Subadviser 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.
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12. Amendment. This Agreement may be amended at any time, but only by
written agreement among the Subadviser, the Adviser and the Fund, which
amendment, other than amendments to Schedules A, B, and D, is subject
to the approval of the Trustees and the Shareholders of the Fund as and
to the extent required by the Act.
13. Effective Date; Term. This Agreement shall become effective on the date
set forth on the first page of this Agreement, and shall continue in
effect until the first meeting of the shareholders of the Series, and,
if its renewal is approved at that meeting in the manner required by
the Act, shall continue in effect 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 Investment Company
Act, and by the majority vote of the disinterested Trustees in
accordance with the requirements of Section 15(c) thereof.
14. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other parties in the
event of a breach of any provision thereof by a party so notified, or
otherwise upon thirty (30) days' written notice to the other parties,
but any such termination shall not affect the status, obligations or
liabilities of any party hereto to the other parties.
15. 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 State of Delaware.
16. 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.
17. Certifications. The Subadviser 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.
18. Indemnification. The Adviser agrees to indemnify and hold harmless the
Subadviser and the Subadviser's directors, officers, employees and
agents from and against any and all losses, liabilities, claims,
damages, and expenses whatsoever, including reasonable attorneys' fees
(collectively, "Losses"), arising out of or relating to (i) any breach
by the Adviser of any provision of this Agreement; (ii) the negligence,
willful misconduct, bad faith, or breach of fiduciary duty of the
Adviser; (iii) any violation by the Adviser of any law or regulation
relating to its activities under this Agreement; and (iv) any dispute
between the Adviser and any Fund shareholder, except to the extent that
such Losses result from the gross negligence, willful misconduct, bad
faith, or breach of fiduciary duty of the Subadviser.
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PHOENIX-XXXXXXXX FUNDS
By:
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Name: Xxxxxxxx Xxxx
Title: President
PHOENIX INVESTMENT COUNSEL, INC.
By:
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Name: Xxxx X. Xxxxx
Title: Vice President and Clerk
ACCEPTED:
XXXXXXXX ASSET MANAGEMENT
By:
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Name: Xxxxxxx Xxxx
Title: Chief Financial Officer
SCHEDULES: A. Operational Procedures
B. Record Keeping Requirements
C. Fee Schedule
D. Subadviser Functions
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SCHEDULE A
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OPERATIONAL PROCEDURES
In order to minimize operational problems, it will be necessary for a flow of
information to be supplied to State Street Bank and Trust Company (the
"Custodian"), the custodian for the Series.
The Subadviser 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 5 p.m. (Eastern Standard time) on the day of the trade (confirmation
received from broker). 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 Series, the
account must be a cash account. No margin accounts are to be maintained in the
name of the Series. Delivery instructions are as specified by the Custodian. The
Custodian will supply the Subadviser daily with a cash availability report. This
will normally be done by telex so that the Subadviser will know the amount
available for investment purposes.
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SCHEDULE B
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RECORDS TO BE MAINTAINED BY THE SUBADVISER
1. (Rule 31a-1(b)(5)) A record of each brokerage order, and all other
series purchases and sales, given by the Subadviser on behalf of the
Series for, or in connection with, the purchase or sale of securities,
whether executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any modifications or
cancellations thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of the
Fund.
2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within
ten (10) days after the end of the quarter, showing specifically the
basis or bases upon which the allocation of orders for the purchase and
sale of Series securities placed by the Subadviser to named brokers or
dealers was effected, and the division of brokerage commissions or
other compensation on such purchase and sale orders. Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or dealers
to:
(a) The Fund,
(b) The Adviser (Phoenix Investment Counsel, Inc.)
(c) The Subadviser, and
(d) Any person other than the foregoing.
(iii) Any other consideration other than the technical
qualifications of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made available.
C. Shall describe in detail the application of any general or
specific formula or other determinant used in arriving at such
allocation of purchase and sale orders and such division of
brokerage commissions or other compensation.
D. The name of the person responsible for making the determination
of such allocation and such division of brokerage commissions or
other compensation.
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3. (Rule 31a-(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing the
purchase or sale of series securities. Where a committee or group makes
an authorization, a record shall be kept of the names of its members
who participate in the authorization. There shall be retained as part
of this record: any memorandum, recommendation or instruction
supporting or authorizing the purchase or sale of series securities and
such other information as is appropriate to support the authorization.*
4. (Rule 31a-1(f)) Such accounts, books and other documents as are
required to be maintained by registered investment advisers by rule
adopted under Section 204 of the Investment Advisers Act of 1940, to
the extent such records are necessary or appropriate to record the
Subadviser's transactions for the Series.
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*Such information might include: current financial information, annual and
quarterly reports, press releases, reports by analysts and from brokerage firms
(including their recommendation; i.e., buy, sell, hold) or any internal reports
or subadviser review.
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SCHEDULE C
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SUBADVISORY FEE
(a) For services provided to the Series, the Adviser will pay to the
Subadviser, on or before the 10th day of each month, a fee, payable in arrears,
which is calculated at a rate equal to 50% of the gross investment management
fee multiplied by the percentage of equity assets held in the Series.
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 Subadviser, the net asset value of the Series shall be valued as set forth
in the then current registration statement of the Series.
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SCHEDULE D
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SUBADVISER FUNCTIONS
With respect to managing the investment and reinvestment of the equity
portion of the portfolio of the Series, the Subadviser shall provide, at its own
expense:
(a) An investment program for the equity portion of the portfolio of
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 Adviser;
(b) Implementation of such investment program for the equity portion
of the portfolio of the Series based upon the
foregoing criteria;
(c) Quarterly reports, in form and substance acceptable to the
Adviser, with respect to: i) compliance with the Code of Ethics
and the Subadviser'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
the equity portion of the portfolio of the Series 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) any and all other reports reasonably requested in
accordance with or described in this Agreement; and, vi) the
implementation of the Series' investment program, including,
without limitation, analysis of Series performance as it relates
to the equity portion of the portfolio;
(d) Promptly after filing with the Securities and Exchange Commission
an amendment to its Form ADV, a copy of such amendment to the
Adviser and the Trustees;
(e) Attendance by appropriate representatives of the Subadviser at
meetings requested by the Adviser or Trustees at such time(s) and
location(s) as reasonably requested by the Adviser or Trustees;
and
(f) Notice to the Trustees and the Adviser of the occurrence of any
event which would disqualify the Subadviser from serving as an
investment adviser of an investment company pursuant to Section
9(a) of the Investment Company Act of 1940 or otherwise.
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