SUBADVISORY AGREEMENT
THE PHOENIX EDGE SERIES FUND
PHOENIX-KAYNE LARGE-CAP CORE SERIES
PHOENIX-KAYNE SMALL-CAP QUALITY VALUE SERIES
Xxxxx Xxxxxxxx Xxxxxxx Investment Management, LLC
0000 Xxxxxx xx xxx Xxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
AGREEMENT made as of the 9th day of August, 2002 between Phoenix
Investment Counsel, Inc. (the "Advisor"), a corporation organized under the laws
the Commonwealth of Massachusetts, and Xxxxx Xxxxxxxx Xxxxxxx Investment
Management, LLC (the "Subadvisor"), a limited liability company organized under
the laws of the State of California.
WHEREAS, The Phoenix Edge Series Fund (the "Fund") is a diversified
open-end investment company of the series type registered under the Investment
Company Act of 1940, as amended, (the " 1940 Act"); and
WHEREAS, the shares of the Fund may be offered in one or more separate
series, including the Phoenix-Kayne Large-Cap Core Series and Phoenix-Kayne
Small-Cap Quality Value Series (the "Series"); and
WHEREAS, the Advisor has entered into an Investment Advisory Agreement
("Advisory Agreement") with the Fund pursuant to which the Advisor acts as
investment advisor to the Fund on behalf of one or more separate series of the
Fund, including the Series; and
WHEREAS, pursuant to the Advisory Agreement, the Advisor renders
certain investment advisory services to the Fund on behalf of the Series,
including providing general oversight of the Series, and evaluating,
recommending and monitoring one or more registered investment advisors to serve
as subadvisor to the Series; and
WHEREAS, the Advisor desires, with the approval of the Trustees of the
Fund (the "Trustees"), to retain Subadvisor to furnish portfolio management
services for the Series; and
WHEREAS, the Subadvisor is willing to furnish such services on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, the Advisor and the Subadvisor agree as follows:
1. Employment as a Subadvisor. The Advisor, being duly authorized, hereby
appoints the Subadvisor to serve as subadvisor with regard to the
assets of the Series (the "Assets"), subject to the terms and
conditions set forth in this Agreement.
2. Acceptance of Employment; Standard of Performance. The Subadvisor
accepts such appointment to serve as subadvisor and agrees to use its
best professional judgment to make investment decisions and provide
related services for the Series in accordance with the terms and
conditions set forth in this Agreement. The parties acknowledge and
agree that the services of the Subadvisor hereunder are not deemed
exclusive and that accordingly, the Subadvisor may render services to
others so long as those services do not conflict in any material manner
with the Subadvisor's performance of its duties and obligations
pursuant to this Agreement.
3. Services of Subadvisor. Subject to the general oversight of the Advisor
and the Trustees, the Subadvisor shall manage all of the securities and
other assets of the Series entrusted to it under this Agreement,
including the purchase, retention, and disposition of assets,
securities, and other property, and shall carry out all of its duties
and obligations under this Agreement, according to the following terms
and conditions:
(a) At all times in performing its duties and obligations
under this Agreement, the Subadvisor shall act in conformity with the
following requirements: (i) 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 amended or supplemented from time to time,
(collectively, the "Prospectus"); (ii) the Fund's Agreement and
Declaration of Trust, dated February 18, 1986, establishing the Fund,
as may be amended from time to time ("Declaration of Trust"); (iii) the
1940 Act, the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), the Securities Act of 1933, as amended, (the "1933
Act") and the Securities Exchange Act of 1934, as amended, (the "1934
Act") and the rules and regulations thereunder; (iv) the Internal
Revenue Code of 1986, as amended, (the "Code") and the rules and
regulations thereunder, including but not limited to the requirements
for adequate diversification under Section 817(h) of the Code, for
treatment by the Series as a regulated investment company under
sub-chapter M of the Code, and for avoiding payment of any excise tax
under Section 4982 of the Code; (v) all other applicable federal and
state laws, as each may be amended from time to time; and (vi) and any
resolutions as may be duly adopted by the Trustees from time to time
and any instructions and procedures of the Advisor, and, in either
case, furnished to the Subadvisor (collectively, these requirements are
referred to herein as the "Investment Requirements").
(b) The Subadvisor shall furnish a continuous investment
program and shall determine what portfolio investments will be
purchased, retained, or sold by the Series in conformity with the
Prospectus and other Investment Requirements.
(c) The Subadvisor shall effect all transactions and take all
actions to implement the investment objectives and policies of the
Series in accordance with this Agreement.
(d) The Subadvisor shall have full authority at all times with
respect to the portfolio management of the Assets, including, but not
limited to, the authority: (i) to
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give written or oral instructions to various broker/dealers, banks or
other agents and 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; (ii) to direct the purchase and
sale of any securities; and (iii) to maintain such uninvested cash
balances in the Series as it shall deem reasonable and appropriate
without incurring any liability for the payment of interest thereon.
(e) The Subadvisor shall not, without the Advisor's prior
written approval, effect any transaction or take any action that would
cause the Series at the time of the transaction or action to be out of
compliance with any of the Investment Requirements. The Subadvisor
shall promptly inform the Fund and the Advisor of developments
materially affecting (or reasonably expected to affect) the Series, and
will, on its own initiative, furnish the Fund and the Advisor from time
to time with whatever information the Subadvisor believes is
appropriate for this purpose.
(f) The Subadvisor shall send or make available appropriate
representatives to/for regular or special meetings of the Fund as may
be reasonably requested from time to time by the Advisor.
(g) The Subadvisor shall provide assistance with and
participate in the marketing of the Series, including, without
limitation, participating at meetings with pension fund
representatives, broker/dealers who have a sales agreement with Phoenix
Equity Planning Corporation, and other parties requested by the
Advisor.
(h) The Subadvisor shall place all orders for the purchase or
sale of securities or other investments for the Series with brokers or
dealers selected by the Subadvisor, as more fully specified below in
Section 6 of this Agreement.
4. Transaction Procedures. All transactions for the purchase or sale of
securities or other investments 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 and/or other property 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, except as described herein. 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 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 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 other than arrangements,
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acts, omissions or other conduct arising in reliance on instructions of
the Subadvisor.
5. Recordkeeping and Reporting. The Subadvisor shall maintain the records
and information required by Rule 31a-1 under the 1940 Act respecting
its activities with respect to the Series, including but not limited to
subsections (b)(1), (b)(2), (b)(5), (b)(6), (b)(7), (b)(8), (b)(9),
(b)(10), (b)(11) and (f) of the Rule, 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 and
other applicable rules, and shall retain such information for such
times and in such manner as required by applicable rules, including but
not limited to Rule 31a-2 under the 1940 Act. The records maintained by
the Subadvisor hereunder shall be the property of the Fund and shall be
surrendered promptly upon request.
6. Allocation of Brokerage. The Subadvisor shall have authority and
discretion to select brokers and dealers to execute transactions
initiated by the Subadvisor on behalf of the Series with regard to the
Assets, and to select the markets on or in which the transactions will
be executed, subject to the following limitations:
(a) The Subadvisor shall at all times seek "best-execution",
as defined in Section 28(e)(1) of the 0000 Xxx.
(b) The Subadvisor shall at all times place orders for the
sale and purchase of securities in accordance with the brokerage policy
of the Series as set forth in the Prospectus and as the Advisor or the
Trustees may direct from time to time.
(c) 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 provide "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 1934 Act, 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.
(d) Subject to the requirements of Subsections (a)-(d) of this
Section, 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
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Fund or that will be of value to the Fund in the management of its
assets, which services may, but need not, be of direct or exclusive
benefit to the Series. In addition, subject to Subsections (a)-(d) of
this Section, 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. Expenses. During the term of this Agreement, the Subadvisor shall bear
all expenses incurred by it in connection with providing its services
hereunder. Without limiting the foregoing, the parties acknowledge and
agree that the Subadvisor shall furnish at its own expense, or pay the
expenses of the Advisor, for the following items:
(a) Office facilities, including office space, furniture and
equipment utilized by the Subadvisor's employees in the fulfillment of
its duties and obligations under this Agreement;
(b) Personnel and services necessary to perform the functions
required to manage the investment and reinvestment of the Assets
(including those required for research, analysis, pricing, reporting,
statistics, and investment), and to fulfill the other duties and
obligations of the Subadvisor hereunder;
(c) Personnel as may be reasonably requested by the Advisor or
the Fund to serve without salaries for the Fund as officers or agents
of the Fund. Notwithstanding the foregoing, 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; and
(d) Compensation and expenses, if any, of the Trustees who are
also full-time employees of the Subadvisor.
8. 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 B. Pursuant to the Advisory
Agreement between the Fund and the Advisor, the Advisor shall be solely
responsible for the payment of fees to the Subadvisor.
9. 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, so long as such acts or omissions shall not
have constituted a breach of the investment objectives, policies and
restrictions applicable to the Series and such acts or omissions shall
not have resulted from the Subadvisor's willful misfeasance, bad faith,
reckless disregard 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 further, however, that the foregoing shall not be
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construed to protect the Subadvisor from liability under the 1940 Act,
other federal or state securities laws or common law).
10. Indemnification.
(a) The Advisor agrees to indemnify and hold harmless the
Subadvisor, its officers and directors, and any person who "controls"
the Subadvisor, within the meaning of Section 15 of the 1933 Act, from
and against any and all direct or indirect liabilities, losses or
damages (including reasonable attorneys' fees) suffered by Subadvisor
resulting from (i) the Advisor's breach of any provision of this
Agreement, (ii) willful misfeasance, bad faith, reckless disregard or
gross negligence on the part of the Advisor or any of its officers,
directors or employees in the performance of the Advisor's duties and
obligations under this Agreement or (iii) any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus
relating to the Series or any amendment thereof or any supplement
thereto or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statement
therein not misleading, if such a statement or omission was made by the
Fund other than in reliance upon written information furnished by the
Subadvisor or any affiliated person of the Subadvisor, expressly for
use in the Fund's registration statement or other than upon verbal
information confirmed by the Subadvisor in writing expressly for use in
the Fund's registration statement.
In no case shall the Advisor's indemnity in favor of the Subadvisor or
any affiliated person or controlling person of the Subadvisor, or any
other provision of this Agreement, be deemed to protect such person
against any liability to which any such person would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence
in the performance of its duties or by reason of its reckless disregard
of its obligations and duties under this Agreement.
(b) The Subadvisor agrees to indemnify and hold harmless the
Advisor, its officers and directors, and any person who "controls" the
Advisor, within the meaning of Section 15 of the 1933 Act, from and
against any and all direct or indirect liabilities, losses or damages
(including reasonable attorneys' fees) suffered by Advisor resulting
from (i) the Subadvisor's breach of its duties under this Agreement,
(ii) willful misfeasance, bad faith, reckless disregard or gross
negligence on the part of the Subadvisor or any of its officers,
directors or employees in the performance of the Subadvisor's duties
and obligations under this Agreement or (iii) any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus
relating to the Series or any amendment thereof or any supplement
thereto or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statement
therein not misleading, if such a statement or omission was made in
reliance upon written information furnished by the Subadvisor to the
Advisor, the Fund or any affiliated person of the Advisor or the Fund
expressly for use in the Fund's registration statement, or upon verbal
information confirmed by the Subadvisor in writing expressly for use in
the Fund's registration statement; or (3) to the extent of, and as a
6
result of, the failure of the Subadvisor to execute, or cause to be
executed, portfolio transactions according to the standards and
requirements of the 1934 Act, the 1940 Act and the Advisers Act.
In no case shall the Subadvisor's indemnity in favor of the Advisor or
any affiliated person or controlling person of the Advisor, or any
other provision of this Agreement, be deemed to protect such person
against any liability to which any such person would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence
in the performance of its duties or by reason of its reckless disregard
of its obligations and duties under this Agreement.
11. Insurance. The Subadvisor shall, during the term of this Agreement, at
its own expense, maintain adequate liability and errors and omissions
insurance coverage to the reasonable satisfaction of the Advisor.
12. No Personal Liability. Reference is hereby made to the Declaration of
Trust, 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 The Phoenix Edge Series 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 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.
13. Confidentiality. Subject to the duty of the Advisor or 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. It is understood
that any information or recommendation supplied by the Subadvisor in
connection with the performance of its obligations hereunder is to be
regarded as confidential and for use only by the Advisor, the Fund or
such persons as the Advisor may designate in connection with the
Series. It is also understood that any information supplied to the
Subadvisor in connection with the performance of its obligations
hereunder, particularly, but not limited to, any list of investments
which, on a temporary basis, may not be bought or sold for the Series,
is to be regarded as confidential and for use only by the Subadvisor in
connection with its obligation to provide investment advice and other
services to the Series. The parties acknowledge and agree that all
nonpublic personal information with regard to shareholders in the
Series shall be deemed proprietary information of the Advisor, and that
the Subadvisor shall use that information solely in the performance of
7
its duties and obligations under this Agreement and shall takes
reasonable steps to safeguard the confidentiality of that information.
Further, the Subadvisor shall maintain and enforce adequate security
procedures with respect to all materials, records, documents and data
relating to any of its responsibilities pursuant to this Agreement
including all means for the effecting of investment transactions.
14. Assignment. This Agreement shall terminate automatically in the event
of its "assignment," as that term is defined in Section 2(a)(4) of the
1940 Act. The Subadvisor shall provide the Advisor with reasonable
advance written notice of any proposed change of "control," as defined
in Section 2(a)(9) of the 1940 Act, as will enable the Advisor to
consider whether an assignment as defined in Section 2(a)(4) of the
1940 Act will occur and to take the steps it deems necessary. The
Subadvisor will be liable to the Fund and the Advisor for all direct
and indirect costs resulting from a change of control of the
Subadvisor, including without limitation all costs associated with any
proxy solicitations, Board meetings, revisions to the Prospectus or
marketing materials, and the hiring of another subadvisor on behalf of
the Series. The understandings and obligations set forth in this
Section shall survive the termination of this Agreement and shall be
binding upon the Subadvisor and its successors.
15. Representations, Warranties and Agreements of the Subadvisor. The
Subadvisor represents, warrants and agrees that:
(a) It is registered as an "investment advisor" under the
Advisers Act and will maintain such status so long as this Agreement
remains in effect.
(b) It has met, and will continue to meet any other applicable
federal or state requirements, and the applicable requirements of any
regulatory or self-regulatory agency, necessary to be met for its
performance of the services contemplated by this Agreement so long as
this Agreement remains in effect.
(c) It is not prohibited by the 1940 Act, the Advisers Act or
other applicable federal or state law from performing the services
contemplated by this Agreement.
(d) It is duly organized and validly existing under the laws
of the State in which it was organized with the power to own and posses
its assets and carry on its business as it is now being conducted.
(e) It has the power and has taken all necessary action, and
has obtained all necessary licenses, authorizations and approvals, to
execute this Agreement, which Agreement constitutes its legal, valid
and binding obligation, enforceable in accordance with its terms, to
enter into and perform the services contemplated by this Agreement; and
the execution, delivery and performance by it of this Agreement does
not contravene or constitute a default under any agreement binding upon
it.
8
(f) It will promptly notify the Advisor of the occurrence of
any event that would disqualify it from serving as an investment
advisor of an investment company pursuant to Section 9(a) of the 1940
Act or otherwise.
(g) It has a written code of ethics complying with the
requirements of Rule 17j-l under the 1940 Act and will provide the
Advisor with a copy of the code of ethics and evidence of its adoption.
The Subadvisor acknowledges receipt of the written code of ethics
adopted by and on behalf of the Fund (the "Code of Ethics"). It will
not be subject to the Code of Ethics during the term of this Agreement
so long as its code of ethics complies with applicable regulatory
requirements and has been approved by the Trustees. 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 Trust 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 the Code of
Ethics, as the case may be, 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 all
other records relevant to the Subadvisor's code of ethics as may be
reasonably requested by the Advisor or Trustees from time to time.
(h) It will use all necessary efforts to manage the Series so
that it will satisfy the diversification requirements of Section
817(h), it will qualify for treatment as a regulated investment company
under Subchapter M of the Code, it will satisfy the distribution
requirements necessary to avoid payment of any excise tax pursuant to
Section 4982 of the Code, and the rules and regulations adopted under
each such provision.
(i) It has furnished a true and complete copy of its
registration statement as filed with the Securities and Exchange
Commission (the "Commission") on Form ADV to the Advisor and will
furnish promptly such updated copies of its registration statement or
amendments thereto as are filed with the Commission from time to time.
(j) It will furnish to the Advisor true and complete copies of
reports or other documents as may be reasonably requested by the
Advisor in connection with the performance of the Subadvisor's duties
and obligations under this Agreement.
(k) 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.
(l) It will furnish or otherwise make available to the Advisor
such other information relating to the business affairs of the
Subadvisor or the management of the Series as the Advisor at any time,
or from time to time, reasonably requests in connection with the
Advisor's or Subadvisor's performance of its respective obligations
hereunder.
16. Representations, Warranties and Agreements of the Advisor. The Advisor
represents, warrants and agrees that:
9
(a) It is registered as an "investment advisor" under the
Advisers Act.
(b) It has met, and will continue to meet any other applicable
federal or state requirements, or the applicable requirements of any
regulatory or self-regulatory agency, necessary to be met for its
performance of the services contemplated by this Agreement so long as
this Agreement remains in effect.
(c) It is not prohibited by the 1940 Act, the Advisers Act or
other applicable federal or state law from performing the services
contemplated by this Agreement.
(d) It is duly organized and validly existing under the laws
of the State in which it was organized with the power to own and posses
its assets and carry on its business as it is now being conducted.
(e) It has the power and has taken all necessary action, and
has obtained all necessary licenses, authorizations and approvals, to
execute this Agreement, which Agreement constitutes its legal, valid
and binding obligation, enforceable in accordance with its terms, to
enter into and perform the services contemplated by this Agreement; and
the execution, delivery and performance by it of this Agreement does
not contravene or constitute a default under any agreement binding upon
it.
(f) It has delivered, or will before the effective date of
this Agreement deliver, to the Subadvisor true and complete copies of
(i) the Prospectus, (ii) the Declaration of Fund, and (iii) such other
documents or instruments governing the investments and investment
policies and practices of the Series applicable to the Subadvisor's
duties and obligations hereunder, 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 documents or instruments before or at the time they
become effective.
(g) It will furnish or otherwise make available to the
Subadvisor such other information relating to the business affairs of
the Trust as the Subadvisor at any time, or from time to time,
reasonably requests in order to discharge its obligations hereunder.
17. Reports. The Subadvisor shall provide the Advisor and the Trustees 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
by the Advisor as agent of the Fund, and promptly upon request
surrendered to either. Without limiting the generality of the
foregoing, the parties agree and acknowledge that the Subadvisor shall
provide the following items:
(a) Quarterly reports, in form and substance acceptable to the
Advisor, including but not limited to reports with respect to: (i)
compliance with the Subadvisor's code of ethics; (ii) compliance with
procedures adopted from time to time by the Trustees relative to
securities eligible for resale pursuant to Rule 144A under the 1933
Act; (iii) diversification of Series assets in accordance with the then
governing laws and prevailing
10
Prospectus pertaining to the Series; (iv) compliance with governing
Fund policies and 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 1940 Act; (vi)
allocations of brokerage transactions along with descriptions of the
bases for those allocations and the receipt and treatment of brokerage
and research services received, as may be requested to ensure
compliance with Section 28(e) of the 1934 Act; (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, analyses of Series performance;
(b) Annual or other periodic reports, in form and substance
acceptable to the Advisor, including but not limited reports with
respect to: (i) analyses of Series performance; (ii) disclosure related
to the portfolio management of the Series and the Subadvisor as may be
contained in the Prospectus or marketing materials as amended,
supplemented or otherwise updated from time to time; and (iii) foreign
custody arrangements as governed by Rule 17f-7 under the 1940 Act; (iv)
compliance with the Subadvisor's code of ethics pursuant to Rule 17j-1;
and (v) such compliance certifications as may be reasonably requested.
(c) The parties acknowledge and agree that 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.
In addition, the Subadvisor shall immediately notify and forward to
both the Advisor and legal counsel for the Series any legal process
served upon it on behalf of the Advisor or the Fund. The Subadvisor
shall promptly notify the Advisor of any changes in any information
concerning the Subadvisor of which the Subadvisor becomes aware that is
or would be required to be disclosed in the Fund's registration
statement.
18. Proxies. The Subadvisor 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 Subadvisor written
instructions to the contrary, the Subadvisor 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
Subadvisor all proxies upon receipt, so as to afford the Subadvisor a
reasonable amount of time in which to determine how to vote such
proxies. The Subadvisor agrees to provide the Advisor with quarterly
proxy voting reports in such form as the Advisor may request from time
to time.
19. Valuation of Assets and Related Recordkeeping. The Subadvisor shall
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
11
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.
20. 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 Schedule A, is subject to the
approval of the Trustees and the Shareholders of the Fund as and to the
extent required by the 1940 Act.
21. 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, 2003, and thereafter only so long as its
continuance has been specifically approved at least annually in
accordance with Sections 15(a) and (c) of the 1940 Act and the Rules
promulgated thereunder.
22. Notices. Except as otherwise provided in this Agreement, all notices or
other communications required of permitted to be given hereunder shall
be in writing and shall be delivered or sent by (i) confirmed
facsimile, (ii) registered, certified or overnight mail, or (iii) a
nationally recognized overnight courier, to the following addresses or
to such other address as the relevant addressee shall hereafter notify
for such purpose to the other 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, 0xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx
Attention: Xxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
If to the Subadvisor: XXXXX XXXXXXXX XXXXXXX INVESTMENT
MANAGEMENT, LLC
0000 Xxxxxx xx xxx Xxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Facsimile: (000) 000-0000
23. Termination. This Agreement shall terminate immediately in the event of
its assignment, as specified above in Section 14 of this Agreement.
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,
by the Advisor, Subadvisor, Board of Trustees of the Fund or vote of a
majority of the outstanding voting securities of the Series upon sixty
(60) days' written notice to the other party. Notwithstanding such
termination, any liability of a party to any other party under this
Agreement shall survive and remain in full force and effect with
respect to any claim or matter on which any party has given written
notice to any other party prior to termination and until such liability
has been finally settled.
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24. Use of Subadvisor's Name. Subadvisor hereby grants to the Fund and
Advisor a non-exclusive, royalty-free, worldwide license to use the
Subadvisor's name and logo in any and all promotional materials,
prospectuses and registration statements during the term of this
Agreement.
25. 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, without giving effect to the
conflicts of laws principles thereof.
26. 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.
27. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter of this
Agreement.
28. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute a single instrument.
PHOENIX INVESTMENT COUNSEL, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Title: Vice President
ACCEPTED:
XXXXX XXXXXXXX XXXXXXX INVESTMENT MANAGEMENT, LLC
By: /s/ Xxxxx X. Xxxxxx
Title: COO
SCHEDULES: A. Operational Procedures
B. Fee Schedule
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SCHEDULE A
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 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 5:00 p.m. (Eastern 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. Security identifier (e.g., CUSIP), if applicable;
4. Number of shares and sales price per share;
5. Executing broker;
6. Settlement instructions for foreign trades; clearing and
executing broker for domestic trades;
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;
14. Currency for foreign trades;
15. Ticker symbol for domestic trades; and
16. 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 and sub-accounting agent will supply the Subadvisor daily with a cash
availability report, which shall include cash detail and pending trades. This
will normally be done by confirmed facsimile or confirmed electronic
transmission so that the Subadvisor will know the amount available for
investment purposes.
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SCHEDULE B
SUBADVISORY FEE
For services provided, the facilities furnished, and the expenses incurred by
the Subadvisor in connection with providing the Services pursuant to this
Agreement, 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:
Fee Rate
(on all assets)
---------------
Series Fee
------ ---
Phoenix-Kayne Large-Cap Core Series 0.30% first $800 million
0.25% over $800 million
Phoenix-Kayne Small-Cap Quality Value Series 0.50% first $200 million
0.45% over $200 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.
15
