Exhibit 23(d)2(18)a
Amended and Restated Subadvisory Agreement between
Phoenix Variable Advisors, Inc.
and
Northern Trust Investments, Inc.
dated 8/12/03
AMENDED AND RESTATED SUBADVISORY AGREEMENT
THE PHOENIX EDGE SERIES FUND
PHOENIX-NORTHERN DOW 30 SERIES
PHOENIX-NORTHERN NASDAQ 100-INDEX(R) SERIES
Northern Trust Investments, N.A. August 12, 2003
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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 (the "Act"), and is subject to the rules and regulations
promulgated thereunder;
WHEREAS, the shares of the Fund are offered or may be offered in
several series;
WHEREAS, Phoenix Variable Advisors, Inc. (the "Advisor") evaluates and
recommends series advisors for certain series and is responsible for the
day-to-day management of such series;
WHEREAS, Northern Trust Investments, Inc. ("NTI, Inc.") has applied
for, and has received, approval from the Office of the Comptroller of the
Currency to convert from an Illinois corporation with fiduciary powers to a
national banking association with fiduciary powers pursuant to 12 U.S.C. Section
35, becoming Northern Trust Investment, N.A. ("NTI, NA", or "Subadvisor");
WHEREAS, all references to NTI, Inc. shall hereafter be and refer to
NTI, NA;
WHEREAS, NTI, NA agrees to maintain its registrations as an investment
adviser under the Investment Advisers Act of 1940, as amended, during the term
of this agreement;
WHEREAS, NTI, NA agrees to reimburse the Fund for any and all costs
incurred in effectuating the aforementioned amendment;
WHEREAS, All other terms and conditions of the Agreement shall be and
remain in full force and effect except as herein above modified.
NOW, THEREFORE, the Advisor and the Subadvisor agree as follows:
1. Employment as a Subadvisor. The Advisor, being duly authorized by the
terms of the Advisory Agreement, hereby employs the Subadvisor to
invest and reinvest the assets of the Series on the terms and
conditions set forth herein. The services of the Subadvisor hereunder
are not to be deemed exclusive; the Subadvisor may render services to
others and engage in other activities that do not conflict in any
material manner in the Subadvisor's performance hereunder.
2. Acceptance of Employment; Standard of Performance. The Subadvisor
accepts its employment as a subadvisor to the Advisor 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 Subadvisor.
----------------------
(a) The Subadvisor 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 Subadvisor
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
Fund, 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 Advisor and the Trustees of the
Funds. The Subadvisor shall not, without the Advisor'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. The Subadvisor will keep
the Fund and the Advisor informed of developments materially
affecting the Series, 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 Subadvisor shall have full
authority at all times with respect to the management of the
Series, 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 Subadvisor 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
Series, or considered desirable by the Subadvisor with respect
thereto. The Subadvisor may maintain uninvested cash balances
in the Series as it shall deem reasonable without incurring
any liability for the payment of interest thereon.
4. Expenses. It is understood that the Fund will pay all of its expenses
other than those expressly stated to be payable by the Subadvisor
hereunder or by the Advisor pursuant to the Advisory Agreement.
Expenses paid by the Fund include, but are not limited to all expenses
incurred in the operation of the Fund and any offering of its shares,
including, among others, interest, taxes, brokerage fees and
commissions, fees of Trustees, expenses of Trustees' and shareholders'
meetings including the cost of printing and mailing proxies, expenses
of insurance premiums for fidelity and other coverage, expenses of
repurchase and redemption of shares, certain expenses of issue and sale
of shares, association membership dues, charges of custodians, transfer
agents, dividend disbursing agents and financial agents, registering
and maintaining the registration of the Fund and its shares with the
SEC, preparing and mailing prospectuses and reports to shareholders,
bookkeeping, auditing and legal expenses.
The Subadvisor shall furnish at its own expense, or pay the expenses of
the Advisor, for the following:
(a) Office facilities, including office space, furniture
and equipment utilized by its employees, in the
fulfillment of Subadvisor's responsibilities
hereunder;
2
(b) Personnel necessary to perform the functions required
to manage the investment and reinvestment of each
Series' assets (including those required for
research, statistical and investment work), and to
fulfill the other functions of the Subadvisor
hereunder; and
(c) Personnel to serve without salaries for the Fund as
agents of the Fund. 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.
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 Subadvisor shall not have
possession or custody of such cash and/or securities or any
responsibility or liability with respect to such custody. The
Subadvisor 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 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.
6. Allocation of Brokerage. The Subadvisor shall have authority and
discretion to select brokers and dealers to execute Series transactions
initiated by the Subadvisor, 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 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 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 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.
3
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 Subadvisor, 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 Series. 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. On occasions when the Subadvisor deems the purchase or sale of
a security to be in the best interests of the Fund as well as
other customers, the Subadvisor may, to the extent permitted
by applicable law and regulations, but shall not be obligated
to, aggregate the securities to be sold or purchased in order
to obtain the best execution or lower brokerage commissions,
if any. In such event, allocation of the securities so sold or
purchased, as well as the expenses incurred in the
transaction, will be made by the Subadvisor in the manner it
considers to be the most equitable and consistent with its
fiduciary obligations to the Fund and, if applicable, to such
other customers.
▇. ▇▇▇▇▇▇▇▇▇▇ of the Subadvisor may be dealers in equity and debt
securities, and from time to time may be underwriters or
dealers of securities that may be bought for, held in, or sold
from the Series. With respect to each such instance, the
Subadvisor represents that all transactions which are effected
for the Series will be made solely in furtherance of their
respective investment goals, and the fact that the
Subadvisor's affiliate is acting as an underwriter or dealer
will not be a factor in the investment decision. The
Subadvisor agrees that it will not purchase securities
underwritten by itself or affiliates of the Fund, except as
permitted by the Act and the Fund's procedures.
7. 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 C. In computing the fee, the net
asset value of the Series will be calculated as described in the
Prospectus and Statement of Additional Information. Pursuant to the
Advisory Agreement, the Advisor is solely responsible for the payment
of fees to the Subadvisor.
8. 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, 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 Subadvisor's
willful misfeasance, bad faith 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, however, that the foregoing shall not
be construed to protect the Subadvisor from liability under the Act,
other federal or state securities laws or common law).
4
The Advisor shall hold harmless and indemnify the Subadvisor for any
loss, liability, cost, damage or expense (including reasonable
attorneys fees and costs) arising from any claim or demand by any past
or present shareholder of the Series or the Fund that is not based upon
the obligations of the Subadvisor with respect to the Series under this
Agreement.
9. Confidentiality. Subject to the duty of the 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.
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 Subadvisor shall notify the Advisor 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 Advisor 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 Subadvisor. The
Subadvisor represents, warrants and agrees that:
A. It is registered as an "investment advisor" under the
Investment Advisors Act of 1940 ("Advisors Act").
B. It will maintain the records and information required by Rule
31a-1 under the Act respecting its activities with respect to
the Series, and such other records with respect thereto
relating to the services the Subadvisor provides under this
Agreement as may be required in future by applicable SEC
rules, and shall retain such information for such times and in
such manner as required by applicable rules, including Rule
31a-2 under the 1940 Act.
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. Subadvisor acknowledges receipt of the written code
of ethics adopted by and on behalf of the Fund (the "Code of
Ethics"). Within 15 days of the end of each calendar quarter
while this Agreement is in effect, a duly authorized
compliance officer of the Subadvisor shall certify to the Fund
and to the Advisor that the Subadvisor has complied with the
requirements of Rule 17j-l during the previous calendar
quarter and that, with respect to the Series, there has been
no violation of the Subadvisor's 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 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 this subparagraph with respect to the Series.
D. It will use all necessary efforts to manage the Series so that
the Fund will qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code.
E. It will furnish the Advisor a copy of its Form ADV as filed
with the Securities and Exchange Commission, if such form is
required to be filed by the Subadvisor.
5
F. The Subadvisor will be responsible for the preparation and
filing of Schedule 13G and Form 13F with respect to the assets
of the Series.
G. 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 Fund, 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.
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 advisor" under the
Investment Advisors Act of 1940 ("Advisors Act").
C. It will deliver to the Subadvisor true and complete copies of
the Fund's Declaration of Trust, Prospectus, Statement of
Additional Information, Advisory Agreement, Fund's Code of
Ethics and such other documents or instruments governing the
investments and investment policies and practices of the
Series, 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 Fund Documents before or at the time
they become effective.
D. It will deliver to the Subadvisor any limitations imposed upon
the Fund as a result of relevant diversification requirements
under the provisions of Section 817(h) of the Internal Revenue
Code of 1986, as amended.
E. It will furnish or otherwise make available to the Subadvisor
such other information relating to the business affairs of the
Fund as the Subadvisor at any time, or from time to time,
reasonably requests in order to discharge its obligations
hereunder.
6
13. Reports. The Subadvisor shall provide the Advisor 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 to the
Advisor as agent of the Fund, and promptly upon request surrendered to
either. 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.
14. Proxies. Subadvisor will cooperate (in establishing proxy handling
procedures acceptable to Advisor) with such authorized representative
of the Fund granted authority to vote proxies solicited by or with
respect to the issuers of securities in which Fund assets are invested.
15. Recordkeeping. The Subadvisor will 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 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. 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 for each Series during the
term of this Agreement, provided that such use is in accordance with
all terms agreed to in writing by the parties.
17. 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 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.
18. 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 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.
19. Notices. All notices or other communications required of permitted to
be given hereunder shall be in writing and shall be delivered or sent
by pre-paid first class letter post 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 VARIABLE ADVISORS, INC.
One American Row
Hartford, Connecticut 06103
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
7
If to the Subadvisor: NORTHERN TRUST INVESTMENTS, N.A.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice
President
20. 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.
21. 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.
22. 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.
23. 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 VARIABLE ADVISORS, INC.
By: /s/ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Title: President
ACCEPTED:
NORTHERN TRUST INVESTMENTS, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
SCHEDULES: A. Subadvisor Functions
B. Operational Procedures
C. Fee Schedule
8
SCHEDULE A
----------
SUBADVISOR FUNCTIONS
With respect to managing the investment and reinvestment of the Series
assets, the Subadvisor 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 Advisor;
(b) Implementation of the investment program for the Series based
upon the foregoing criteria;
(c) Quarterly reports, in form and substance acceptable to the
Advisor, with respect to: i) compliance with the Code of
Ethics and the Subadvisor'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) assisting the
Fund and the Advisor in complying with governing restrictions
relating to the fair valuation of securities for which market
quotations are not readily available or considered "illiquid"
for purposes of complying with the Series limitation on the
acquisition of illiquid securities, including assisting in the
monitoring of significant events, making fair value
recommendations, and making itself available to participate in
valuation committee meetings as may be reasonably requested by
the Fund and the Advisor (it being understood, however, that
the Advisor and the Fund have primary responsibility for such
fair valuation of 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) Attendance by appropriate representatives of the Subadvisor at
meetings requested by the Advisor or Trustees at such time(s)
and location(s) as reasonably requested by the Advisor or
Trustees; and
(e) Participation, overall assistance and support in marketing the
Series, 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.
9
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 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 p.m. (Eastern Standard time) on the day of the trade (confirmation
received from broker). The necessary information can be sent via SWIFT 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. Except with respect to Subadvisor's future
transactions, 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 Subadvisor daily with a cash availability report. This will normally
be done by facsimile so that the Subadvisor will know the amount available for
investment purposes.
10
SCHEDULE C
----------
SUBADVISORY FEE
For services provided to the Fund pursuant to paragraph 3 hereof, 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:
Phoenix-Northern Dow 30 Series:
-------------------------------
0.10% of the average aggregate daily net asset value of the Series;
subject to a minimum fee of $100,000.
Phoenix-Northern Nasdaq-100 Index(R) Series:
--------------------------------------------
0.10% of the average aggregate daily net asset value of the Series;
subject to a minimum fee of $100,000.
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.
11
