THE PHOENIX EDGE SERIES FUND
SUBADVISORY AGREEMENT
---------------------
May 24, 2000
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Associates, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
RE: SUBADVISORY AGREEMENT
Gentlemen:
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
(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-▇▇▇▇▇▇▇▇ Small & Mid-Cap Growth Series (hereinafter
referred to as the "Series").
Phoenix Investment Counsel, Inc. (the "Adviser") has entered into an advisory
Agreement with the Fund and is responsible for the day-to-day management of the
Series.
1. Employment as a Subadviser. The Adviser, being duly authorized, hereby
employs ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Associates, Inc. (the "Subadviser") as a
subadviser 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 which 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 subadviser to the Adviser and agrees to use its best
professional judgment to make investment decisions for the Series in
accordance with the provisions of this Agreement.
3. Services of Subadviser. 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 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 to the Fund's Agreement and
Declaration of Trust and By-Laws, to the investment and other
restrictions set forth in the Act, the Securities Act of 1933 and the
Internal Revenue Code and the rules and regulations thereunder, and to
the supervision and control of the Trustees of the Fund (the "Trustees").
The Subadviser shall not, without the Adviser's prior approval, effect
any transactions which would cause the Fund at the time of the
transaction to be out of compliance with any of such restrictions or
policies.
4. Expenses. The Subadviser shall furnish at its own expense, or pay the
expenses of the Adviser, for the following:
(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 Series'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 for the Fund as officers or
agents of the Fund. The subadviser need not provide personnel to
perform, or pay the expenses of the Adviser 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 Series will be
consummated by payment to, or delivery by, the Custodian(s) from time to
time designated by the Fund (the "Custodian"), or such depositories or
agents as may be designated by the Custodian pursuant to its agreement
with the Fund (the "Custodian Agreement"), of all cash and/or securities
due to or from the Series. The 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 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 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 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 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 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 Adviser
shall have the right to require that transactions giving rise to
brokerage commissions, in an amount to be agreed upon by the
Adviser and the Subadviser, shall be executed by brokers and
dealers that
2
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.
(c) The Subadviser may effect brokerage transactions for the Series
with a broker that is an "affiliated person" (as defined in the
Act) of the Fund, provided that such transactions are executed in
accordance with procedures adopted to Rule 17 e- I of the
Investment Company Act.
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 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 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 Adviser 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 Adviser to consider whether an assignment
as defined in Section 2(a)(4) of the Act will occur and to take the steps
it deems necessary.
11. Representations, Warranties and Agreements of the 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 D (as amended from
time to time). The Subadviser agrees that such records are the
property
3
of the Fund and will be surrendered to the Fund or to the Adviser
as agent of the Fund promptly upon request of either.
(c) It has a written code of ethics complying with the requirements of
Rule 17j-1 under the Act and will provide the 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 the Adviser that the Subadviser
has complied with the requirements of Rule 17j-1 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,
February 18, 1986, establishing the Fund, a copy of which has been
filed with the Secretary of the Commonwealth of Massachusetts and
elsewhere as required by law, and to any and all amendments
thereto so filed or hereafter so filed with the Secretary of the
Commonwealth of Massachusetts and elsewhere as required by law.
The name Phoenix Edge Series Fund refers to the Trustees under
said Declaration of 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 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 Fund estate.
12. Amendment. This Agreement may be amended at any time, but only by
written agreement between the Subadviser and the Adviser, which
amendment, other than amendments to Schedules 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. Unless terminated as
hereinafter provided, this Agreement shall remain in full force and
effect until December 31, 2000 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.
14. 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.
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,
4
this Agreement shall be administered, construed and enforced according to
the laws of the Commonwealth of Massachusetts.
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.
PHOENIX INVESTMENT COUNSEL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
ACCEPTED:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ASSOCIATES
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
SCHEDULES: A. Subadviser Functions
B. Operational Procedures
C. Fee Schedule
D. Record Keeping Requirements
5
SCHEDULE A
----------
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 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 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's investment program, including, without
limitation, analysis of Series performance;
(d) 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
(e) Participation, overall assistance and support in marketing the
Series, including, without limitation, meetings with pension Series
representatives, broker/dealers who have a sales agreement with Phoenix
Equity Planning Corporation, and other parties requested by the Adviser.
6
SCHEDULE B
----------
OPERATIONAL PROCEDURES
In order to minimize operational problems, it will be necessary for a flow of
information to be supplied to State Street Bank 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.
7
SCHEDULE C
----------
SUBADVISORY FEE
For services provided to the Fund pursuant to paragraph 3 hereof, 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 .35% of the average daily net
assets of the Phoenix-▇▇▇▇▇▇▇▇ Small & Mid-Cap Growth 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 Fund and each Series shall be valued as set forth in the then
current registration statement of the Fund.
8
SCHEDULE D
----------
RECORDS TO BE MAINTAINED BY THE SUBADVISER
1. (Rule 3 1 a- I (b)(5)) A record of each brokerage order, and all other
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 3 1 a- I (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 Fund securities to named broker 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.
3. (Rule 3la-(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 an authorization is made by
a committee or group, 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*
---------------------------
* 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.
9
4. (Rule 3la-l(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.
10