Exhibit d.3
SUBADVISORY AGREEMENT BETWEEN
PHOENIX INVESTMENT COUNSEL AND PHOENIX/XXXXX ADVISERS LLC
PHOENIX INVESTMENT TRUST 97
SUBADVISORY AGREEMENT
Phoenix/Xxxxx Advisers LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
WHEREAS, Phoenix Investment Trust 97 (the "Trust") is an open-end
investment company 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 Trust are offered or may be offered in
several series, including Phoenix Small Cap Value Fund (the "Fund");
WHEREAS, Phoenix Investment Counsel, Inc. (the "Advisor") evaluates and
recommends series advisors for the Fund and is responsible for the day-to-day
management of the Fund; and
WHEREAS, the Advisor desires to retain Phoenix/Xxxxx Advisers, LLC (the
"Subadviser") to furnish portfolio management services for the Fund, and the
Subadviser is willing to furnish such services.
NOW, THEREFORE, the Advisor and the Subadviser agree as follows:
1. Employment as a Subadviser. The Advisor, being duly authorized, hereby
employs the Subadviser to invest and reinvest the assets of the Fund 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 with the Subadviser's performance
hereunder.
2. Acceptance of Employment; Standard of Performance. The Subadviser
accepts its employment as a Subadviser to the Advisor and agrees to use
its best professional judgment to make investment decisions for the
Fund in accordance with the provisions of this Agreement.
3. Services of Subadviser.
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(a) The Subadviser shall provide the services set forth
herein and in Schedule A attached hereto and made a
part hereof. In providing management services to the
Fund, the Subadviser shall be subject to the investment
objectives, policies and restrictions of the Fund as
they apply to the Fund 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, the provisions of the Internal Revenue Code
("IRC") applicable to regulated investment companies,
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 Subadviser
shall not, without the Advisor's prior approval, effect
any transactions that would cause the Fund at the time
of the
transaction to be out of compliance with any of such
restrictions or policies. The Subadviser 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 Subadviser shall have full
authority at all times with respect to the management
of the Fund, 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 Subadviser 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 Fund, or considered
desirable by the Subadviser with respect thereto. The
Subadviser may maintain uninvested cash balances in the
Fund as it shall deem reasonable without incurring any
liability for the payment of interest thereon.
4. Expenses. The Subadviser shall furnish the following at its own expense:
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(a) Office facilities, including office space, furniture and
equipment utilized by its employees, in the fulfillment
of Subadviser's responsibilities hereunder;
(b) Personnel necessary to perform the functions required to
manage the investment and reinvestment of the Fund's
assets (including those required for research,
statistical and investment work), and to fulfill the
other functions of the Subadviser hereunder;
(c) Personnel to serve without salaries from the Fund as
officers or agents of the Fund. The Subadviser need not
provide personnel to perform, or pay the expenses of the
Advisor or Fund for services customarily performed for
an open-end management investment company by its
national distributor, custodian, financial agent,
transfer agent, auditors and legal counsel; and
(d) Compensation and expenses, if any, of the trustees who
are also full-time employees of the Subadviser.
5. Transaction Procedures. All transactions for the Fund 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 Fund. 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 or by
confirmed electronic transmission to the Fund all investment orders for
the Fund 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 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
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liability with respect to custodial arrangements or the acts, omissions
or other conduct of the Custodian.
6. Allocation of Brokerage. The Subadviser shall have authority and
discretion to select brokers and dealers to execute Fund 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 Fund 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 "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 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.
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
Subadviser, 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 Fund. 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.
7. Fees for Services. The compensation of the Subadviser 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 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 Fund 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,
other federal or state securities laws or common law).
9. Confidentiality. Subject to the duty of the Subadviser to comply with
applicable law, including any demand of any regulatory or taxing
authority having jurisdiction, the parties hereto shall treat
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as confidential all information pertaining to the Fund 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.
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, as amended ("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 Fund, and such other
records with respect thereto relating to the services the Subadviser
provides under this Agreement as may be required in the future by
applicable rules. The records maintained by the Subadviser hereunder
shall be the property of the Fund and surrendered promptly upon
request.
C. 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. Subadviser
acknowledges receipt of the written code of ethics adopted by and on
behalf of the Fund (the "Code of Ethics"). The Subadviser 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 Subadviser shall
certify to the Fund and to the Advisor 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
if such a violation has occurred, that appropriate action was taken in
response to such violation. The Subadviser shall permit the Fund and
Advisor to examine the reports required to be made by the Subadviser
under Rule 17j-l(c)(1) and this subparagraph.
D. It will use all necessary efforts to manage the Fund so that the
Fund will qualify as a regulated investment company under Subchapter M
of the IRC and the rules and regulations adopted under such provision.
E. It will furnish the Advisor a copy of its Form ADV as filed with the
Securities and Exchange Commission.
F. It will be responsible for the preparation and filing of Schedule
13G and Form 13F on behalf of the Fund in accordance with the
requirements thereunder.
G. It will notify the Advisor of any changes in the membership of its
general partners within a reasonable time after such change.
H. Reference is hereby made to the Declaration of Trust establishing
the Trust, to the Trust's Certificate of Trust, which is on file with
the Office of the Secretary of the State of Delaware and elsewhere as
required by law, and to any and all amendments thereto so filed or
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hereafter so filed with the Secretary of the State for the State of
Delaware and elsewhere as required by law.
I. The name Phoenix Investment Trust 97 refers to the Trustees under
said Declaration of Trust, as Trustees and not personally, and no
Trustee, shareholder, officer, agent or employee of the Trust shall be
held to any personal liability in connection with the affairs of the
Trust; 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. 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 Subadviser 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 Fund, and during the term of this
Agreement will promptly deliver to the Subadviser 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.
D. It will furnish or otherwise make available to the Subadviser such
other information relating to the business affairs of the Fund as the
Subadviser at any time, or from time to time, reasonably requests in
order to discharge its obligations hereunder.
13. Reports. The Subadviser shall provide the Advisor such periodic and
special reports as the Advisor may reasonably request. The Subadviser
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 Subadviser 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 Fund may be invested. The
Advisor shall cause the Custodian to forward promptly to Subadviser all
proxies upon receipt, so as to afford Subadviser a reasonable amount of
time in which to determine how to vote such proxies. Subadviser agrees
to provide the Advisor with quarterly proxy voting reports in such form
as the Advisor may request from time to time.
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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 Fund 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 Subadviser 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 December 31, 2005, 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 INVESTMENT COUNSEL, INC.
00 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xx. Xxx Xxxxxx
If to the Subadviser, at the address noted above.
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 State of Connecticut.
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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.
IN WITNESS WHEREOF, the undersigned have hereunto set their respective hands and
seals as of this 27th day of January, 2004.
PHOENIX INVESTMENT COUNSEL, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Title: President, Equities
PHOENIX/XXXXX ADVISERS LLC
By: /s/ Xxxxxxx Xxxx
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Title: Senior Vice President
SCHEDULES: A. Subadviser Functions
B. Operational Procedures
C. Fee Schedule
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SCHEDULE A
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SUBADVISER FUNCTIONS
With respect to managing the investment and reinvestment of the Fund
assets, the Subadviser shall provide, at its own expense:
(a) An investment program for the Fund 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 Fund based
upon the foregoing criteria;
(c) Annual reports, in form and substance acceptable to the
Advisor and Subadviser, 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 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
Fund assets in accordance with the then prevailing prospectus
and statement of additional information pertaining to the Fund
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 Fund 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 Fund investment program,
including, without limitation, analysis of Fund performance;
(e) Attendance by appropriate representatives of the Subadviser 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
Fund, 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.
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SCHEDULE B
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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 & 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 8:30 p.m. (Eastern 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 Subadviser daily with a cash availability report. This
will normally be done by confirmed facsimile or confirmed electronic
transmission so that the Subadviser will know the amount available for
investment purposes.
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SCHEDULE C
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SUBADVISORY FEE
For services provided to the Fund pursuant to paragraph 3 hereof, the
Advisor will pay to the Subadviser, on or before the 10th day of each month, a
fee, payable in arrears, at the following annual rates:
0.10% on the first $166 million of average net assets; and
0.40% on next average net assets in excess of $166 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
Subadviser, the net asset value of the Fund shall be valued as set forth in the
then current registration statement of the Fund.
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