Exhibit 6(e)
FORM OF
SUBADVISORY AGREEMENT
ON BEHALF OF
PHOENIX MID-CAP VALUE FUND
FORM OF
SUBADVISORY AGREEMENT
ON BEHALF OF
PHOENIX MID-CAP VALUE FUND
_________ __, 2004
Sasco Capital, Inc.
00 Xxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
RE: SUBADVISORY AGREEMENT
Ladies and Gentlemen:
Phoenix Equity Trust (formerly, Phoenix-Aberdeen Worldwide Opportunities Fund)
(the "Fund") is a diversified 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. The shares of the Fund are
offered or may be offered in several series, including the Phoenix Mid-Cap Value
Fund (collectively sometimes 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 Sasco Capital, Inc. (the "Subadviser") as a discretionary
series adviser to invest and reinvest the assets 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;
however, in no event shall the Subadviser provide advisory or
subadvisory services to another registered investment company managed
in a mid-cap value style except as agreed upon in writing by the
Adviser and Subadviser. The Subadviser may provide advisory or
subadvisory services for a registered investment company in another
market capitalization or as part of a blended management team without
such waiver. This limitation shall conclude upon the Series' closure to
additional investment.
2. Acceptance of Employment; Standard of Performance. The Subadviser
accepts its employment as a discretionary series adviser of the Series
and agrees to use its best professional judgment to make investment
decisions for the Series in accordance with the
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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 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 provided
to the Subadviser by Adviser), and to the 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
Series at the time of the transaction to be out of compliance with any
of such restrictions or policies.
4. Transaction Procedures. All series 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 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 Series securities for
the Fund, 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 Fund, 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 Fund, as to which the
Subadviser 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.
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B. The Subadviser shall not execute any Series 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. The Subadviser shall review all proxy solicitation materials
and be responsible for voting and handling all proxies in relation to
the Assets. Unless the Advisor 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 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 the
Subadviser all 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 Advisor with quarterly
proxy voting reports in such form as the Advisor may request from time
to time.
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 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.
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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 Fund,
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 Fund, and will be surrendered to the Fund or to
Adviser as agent of the Fund 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 10 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 (formerly, Phoenix-Aberdeen Worldwide Opportunities Fund)"
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.
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.
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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 Form N-SAR 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 EQUITY TRUST (FORMERLY,
PHOENIX-ABERDEEN
WORLDWIDE OPPORTUNITIES FUND)
By:
-----------------------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
PHOENIX INVESTMENT COUNSEL, INC.
By:
-----------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President and Clerk
ACCEPTED:
SASCO CAPITAL, INC.
By:
----------------------------------------
Name: Xxxx Xxxx
Title: President and Managing Director
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 Fund.
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 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 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 Fund 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 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 Fund.
--------------------------------------
*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 Fund, the Adviser will pay to the
Subadviser, on or before the 10th day of each month, a fee, payable in
arrears, at the annual rate of forty-seven and one-half percent (47.50%) of
the gross management fee as stipulated in the Fund's registration
statement. 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 Fund and each
Series shall be valued as set forth in the then current registration
statement of the Fund.
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SCHEDULE D
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SUBADVISER FUNCTIONS
With respect to managing the investment and reinvestment of the
Series' assets, the Subadviser 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 Adviser;
(b) Implementation of the investment program for 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 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) 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;
(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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