SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Preliminary Proxy Statement
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Definitive Proxy Statement
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Soliciting material pursuant to Rule 14a-12
Virtus Variable Insurance Trust
Registration Nos. 811-04642 and 033-05033
33-05033
(Name of Registrant as Specified in Its Charter/Declaration of Trust)
N/A
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| | | | Virtus Variable Insurance Trust
One Financial Plaza
Hartford, CT 06103 | | | Toll Free 800-367-5877
Virtus.com | |
June 24, 2019Virtus Variable Insurance Trust
(the “Trust”)
Dear Contract Owner:
You are an owner of a variable annuity contract or variable life insurance policy (each one a “Contract” and, together, “Contracts”) issued by a separate account (each one a “Separate Account” and, together, “Separate Accounts”) of one of a number of participating insurance companies (each an “Insurance Company” and, collectively, the “Insurance Companies”). Shares of one or more series of Virtus Variable Insurancethe Trust (the “Trust”) have been purchased at your direction by an Insurance Company through one or more of the Separate Accounts to support contract values or fund benefits payable under your Contract. The Insurance Company (through its Separate Accounts through which your Contract was issued) is the record owner of shares of the series held in connection with your Contract, including sharesContract.
The Trust, and each of Virtus SGA International Growth Series (formerly Virtus Duff & Phelps International Series) (the “Series”).
As record owner of the Series’ shares, the Insurance Companies have been asked by the Trust’s Board of Trustees to approveits series, will hold a proposal to appoint a new subadviser to the Series by approving a new Subadvisory Agreement by and among the Trust, Virtus Investment Advisers, Inc., the Series’ Investment Adviser, and Sustainable Growth Advisers, LP. In this regard, and as is more fully explained in the attached proxy statement, the Trust is holding aspecial meeting of its shareholders at 3:00 p.m. Eastern time, on June 28, 2022 (the “Meeting”). The Meeting has been scheduled as a virtual meeting at which no one will be allowed to consider approval of the proposal.attend in person. As you may know, your Contract gives you the right to instruct the Insurance Company on how to vote the shares of each of the Seriesseries that areis attributable to your Contract at any meeting of the Series’ shareholders at which shareholders are being asked to vote.Contract. We are writing to you to ask that you instruct us, either by telephone, internet or mail, in order that we may vote on your behalf at the meeting of shareholders of the Series.Meeting. After you have given us instructions, you have the right to revoke those instructions prior to or at the meeting of shareholders.Meeting.
I encourage you to take the time to read the enclosed proxy statement and cast your ballot for a special meetingthe Meeting of shareholders of the Virtus Duff & Phelps Real Estate Securities Series, to be held on July 30, 2019. Your vote is vital toVirtus KAR Capital Growth Series, Virtus KAR Equity Income Series, Virtus KAR Small-Cap Growth Series, Virtus KAR Small-Cap Value Series, Virtus Newfleet Multi-Sector Intermediate Bond Series, Virtus SGA International Growth Series and Virtus Strategic Allocation Series (individually and collectively, the outcome“Series”) of the proposal that is being presentedTrust.
As record owner of the Series’ shares, the Insurance Companies have been asked by the BoardTrust’s board of trustees (“Trustees”) to vote on the following proposals, as described in the Proxy Statement:
1. To be voted on by all shareholders of the Trust, voting together: To elect seven Trustees of the Trust.
Proposal details are includedTrust, as described in the enclosedattached Proxy Statement, which also providesStatement;
2. To be voted on by all shareholders of each Series, voting separately by each such Series: To approve a proposal authorizing Virtus Investment Advisers, Inc. to hire, terminate and replace affiliated (both wholly-owned and partially-owned) and unaffiliated subadvisers for that Series or to materially modify subadvisory agreements for that Series without shareholder approval, and to permit that Series to disclose advisory and subadvisory fee information aboutin an aggregated manner, as described in the voting processattached Proxy Statement;
3. To consider and act upon such other matters as may properly come before the shareholder meeting.Meeting and any adjourned or postponed session thereof.
The BoardTrustees of Trustees has carefully assessed the proposal, andTrust unanimously recommends that shareholders vote FOR the proposal. To confirmProposals specified above.
The Trustees of the Trust have fixed the close of business on May 16, 2022, as the record date for the determination of shareholders entitled to notice of, and to vote at, the Meeting or any adjournment or postponement thereof. This proxy is being solicited on behalf of the Trustees of the Trust.
By Order of the Board of Trustees’ recommendations,Trustees,
Jennifer Fromm
Secretary
May 19, 2022
YOUR VOTE IS IMPORTANT
It is important that your shares be represented at the Meeting by virtual presence or by proxy, no matter how many shares you own. If you do not expect to attend the Meeting, then please vote FOR the proposal ongive your voting instructions by internet, by touch-tone telephone, or by marking, dating and signing the enclosed proxy card and returning it in the prepaid envelope enclosed for your convenience to ensure that your shares are represented. Please give your voting instruction form.instructions or submit your proxy card promptly in order to avoid any additional costs of further proxy solicitations and in order for the Meeting to be held as scheduled.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON JUNE 28, 2022
This Proxy Statement and the accompanying Notice of Special Meeting of Shareholders are available at the website listed on your proxy card. In addition, Contract Owners can find important information about each Series in its Annual Report, dated December 31, 2021, including financial reports for the fiscal year ended December 31, 2021, and in such Series’ Semi-Annual report, dated June 30, 2021. The Series’ Annual Report and Semi-Annual Report are available, without charge, upon request by calling 1-800-367-5877. Copies also can be obtained free of charge from the SEC’s website at www.sec.gov and the Series’ website at www.virtus.com.
Your vote is important. Please take a moment after reviewing the enclosed materials to provide us with your voting instructions. Please follow the steps on the enclosed voting instruction form(s) to instruct us by internet or telephone, or by signing and returning the voting instruction form(s) in the enclosed postage pre-paid envelope. To request more information, please call us at the telephone number shown below.
If you have any questions, please call (800) 367-5877 between 8:30 a.m. and 6:00 p.m. Eastern time, Monday through Thursday, Friday until 5:00 p.m. Thank you for your continued investment in Virtus Variable Insurance Trust.
Sincerely,
George R. Aylward
President, Virtus Variable Insurance Trust
VIRTUS SGA INTERNATIONAL GROWTH SERIES
(formerly VIRTUS DUFF & PHELPS INTERNATIONAL SERIES)
A SERIES OF VIRTUS VARIABLE INSURANCE TRUST
(the “Trust”)
One Financial Plaza
Hartford, CT 06103
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on July 30, 2019June 28, 2022
To owners of variable annuity contractscontract or variable life insurance policiespolicy (each one a “Contract” and, together, “Contracts”) issued by a separate account (each one a “Separate Account” and, together, “Separate Accounts”) of one of a number of participating insurance companies (each an “Insurance Company” and, collectively, the “Insurance Companies”) entitled to give voting instructions in connection with a separate accountSeparate Account of an Insurance Company.
NOTICE IS HEREBY GIVEN THAT a special meeting of the Shareholdersshareholders of the Virtus Duff & Phelps Real Estate Securities Series, Virtus KAR Capital Growth Series, Virtus KAR Equity Income Series, Virtus KAR Small-Cap Growth Series, Virtus KAR Small-Cap Value Series, Virtus Newfleet Multi-Sector Intermediate Bond Series, Virtus SGA International Growth Series (formerlyand Virtus Duff & Phelps International Series) (theStrategic Allocation Series (individually and collectively, the “Series”) of Virtus Variable Insurancethe Trust, (the “Trust”), a Delaware statutory trust, will be held on June 28, 2022 at the offices of Virtus Investment Partners, Inc., One Financial Plaza, Hartford, Connecticut 06103, on July 30, 2019 at 10:3:00 a.m.p.m. Eastern Time and any adjournments thereof (the “Meeting”). In light of public health concerns regarding the coronavirus outbreak, the Meeting with be held in a virtual meeting format only. To participate in the Meeting, shareholders must register in advance by visiting
https://www.viewproxy.com/VirtusFunds/broadridgevsm/. The Meeting will be held for the following purpose:purposes:
| | | | | | | Proposal | | | | To be voted on by shareholders of: | | |
| | | Proposal 1 | | | | To elect seven Trustees to serve on the Board of Trustees until the next meeting of shareholders at which Trustees are elected | | | | All Series voting together | | |
| | | Proposal 2 | | | | To approve a proposal to permit Virtus Investment Advisers, Inc., as the investment adviser to each Series, to hire, terminate and | | | | All Series, with each Series voting separately | | |
1.
To approve a Subadvisory Agreement by and among the Trust, Virtus Investment Advisers, Inc. (“VIA”), and Sustainable Growth Advisers, LP (the “Subadviser”).
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To transact any other business as may properly come before the Meeting or any adjournment(s) thereof.
| | | | | | | Proposal | | | | To be voted on by shareholders of: | | |
| | | | | | | replace subadvisers for the Series or to modify subadvisory agreements for the Series without shareholder approval, and to permit the Series to disclose advisory and subadvisory fee information in an aggregated manner. | | | | | | |
The Trust’s Board of Trustees recommends that shareholders of the Series vote to approve the proposal.proposals.
Certain separate accounts (each one a “Separate Account” and together “Separate Accounts”) of the Insurance CompaniesThe Separate Accounts supporting Contracts issued by the Insurance Companies are the only shareholders of the Series. However, each Insurance Company hereby solicits, and agrees to vote the shares of the Series at the Meeting in accordance with, timely instructions received from Contract Ownersowners (each, a “Contract Owner” and together, the “Contract Owners”) of the Contracts having contract values allocated to a Separate Account invested in such shares. Each Insurance Company will vote all of itsthe shares of the Series held by a Separate Account in the same proportion (for, against or abstain)withheld) as those shares held by the Separate Account for which the Insurance Company receives timely instructions from persons entitled to give voting instructions. This may result in a relatively small number of Contract OwnersContracts determining the vote with respect to thea proposal.
The Board of Trustees has fixed the close of business on June 7, 2019May 16, 2022, as the Record Daterecord date for determination of shareholders entitled to notice of and to vote at the Meeting.
Whether or not you plan to attend the meeting, please vote your shares. As a Contract Ownerconvenience to our shareholders, you may now vote in any one of recordfour ways:
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Through the Internet — log on at the close of businessInternet address provided on the Record Date,proxy card
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By telephone — call the toll-free number listed on the proxy card
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By mail — using the enclosed Proxy Card(s) and postage paid envelope
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At the Meeting
We encourage you to vote by telephone or through the Internet; have your proxy card in hand, and call the right to instruct the Insurance Company asnumber or go to the manner in whichwebsite and follow the instructions given there. Use of telephone or Internet voting will reduce the time and cost associated with this proxy solicitation. Whichever method you choose, please read the enclosed proxy statement carefully before you vote.
If you sign, date, and return the proxy card but give no voting instructions, your shares of the Series attributable to your Contract should be voted. To assist you in giving your instructions, a voting instruction form is enclosed. In addition, a Proxy Statement is attached to this Notice and describes the matters towill be voted upon at“FOR” the Meeting or any adjournment(s) thereof.proposals above.
By order of the Board of Trustees
Jennifer S. Fromm
Title: Secretary
Virtus Variable Insurance Trust
June 17, 2019May 19, 2022
Shareholders who do not expect to attend the special meeting are requested to vote through the Internet or by telephone, or by the internet, orto complete, sign, date and return the accompanying voting instruction formproxy in the enclosed envelope, which needs no postage if mailed in the United States. Instructions for the proper execution of the proxy with respect to Internet or telephone voting instruction formare set forth on the proxy card. Instructions for signing proxy cards if mailing are set forth immediately following this notice or, with respect to telephone or internet voting, on the voting instruction form.notice. It is important that the voting instruction formproxy be returnedvoted promptly. After you have given us instructions, you have the right to revoke those instructions prior to or at the meeting of shareholders.
INSTRUCTIONS FOR SIGNING VOTING INSTRUCTION FORMSPROXY CARDS
The following general rules for signing voting instruction formsproxy cards may be of assistance to you and avoid the time and expense involved in validating your vote if you fail to sign your voting instruction formproxy card properly.
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Individual Accounts: Sign your name exactly as it appears in the registration on the voting instruction form.proxy card.
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Joint Accounts: Either party may sign, but the name of the party signing should conform exactly to the name shown in the registration on the voting instruction form.proxy card.
3.
All Other Accounts: The capacity of the individual signing the voting instruction formproxy card should be indicated unless it is reflected in the form of registration. For example:
| | Registration | | | Valid Signature | |
| | Corporate Accounts | | | | |
| | (1)
ABC Corp. | | | ABC Corp. | |
| | (2)
ABC Corp. | | | John Doe, Treasurer | |
| | (3)
ABC Corp. c/o John Doe, Treasurer | | | John Doe | |
| | (4)
ABC Corp. Profit Sharing Plan | | | John Doe, Trustee | |
| | Trust Accounts | | | | |
| | (1)
ABC Trust | | | Jane B. Doe, Trustee | |
| | (2)
Jane B. Doe, Trustee u/t/d 12/28/78 | | | Jane B. Doe | |
| | Custodial or Estate Accounts | | | | |
| | (1)
John B. Smith, Cust. f/b/o
John B. Smith, Jr. UGMA | | | John B. Smith | |
| | (2)
Estate of John B. Smith | | | John B. Smith, Jr., Executor | |
VIRTUS SGA INTERNATIONAL GROWTH SERIES
(formerly VIRTUS DUFF & PHELPS INTERNATIONAL SERIES)
A SERIES OF VIRTUS VARIABLE INSURANCE TRUST
One Financial Plaza
Hartford, CT 06103
(800) 367-5877
SPECIAL MEETING OF SHAREHOLDERS
To be held on July 30, 2019June 28, 2022
PROXY STATEMENT
This Proxy Statement (the “Proxy Statement”) is being furnished on behalfin connection with the solicitation of proxies by the Board of Trustees (the “Board” or “Trustees”) of the Virtus Variable Insurance Trust (the “Trust”), a Delaware statutory trust, by the participating insurance companies (each an “Insurance Company” and, collectively, the “Insurance Companies”) to owners (each one a “Contract Owner” and together, “Contract Owners”) of certain variable annuity contracts andcontract or variable life insurance policiespolicy (each one a “Contract” and, together, “Contracts”) issued by the Insurance Companies and having contract values on the record date allocated to separate accounts (each one a “Separate Account” and, together, the “Separate Accounts”) of the Insurance Companies invested in shares of Virtus Duff & Phelps Real Estate Securities Series, Virtus KAR Capital Growth Series, Virtus KAR Equity Income Series, Virtus KAR Small-Cap Growth Series, Virtus KAR Small-Cap Value Series, Virtus Newfleet Multi-Sector Intermediate Bond Series, Virtus SGA International Growth Series (formerlyand Virtus Duff & Phelps International Series) (theStrategic Allocation Series (individually and collectively, the “Series”), each an investment portfolio of the Trust.
As a Contract Owner, your Contract gives you the right to instruct the Insurance Company on how to vote the shares of each of the Series that are attributable to your Contract at the Meeting. Although you are not directly a shareholder of a Series, you have this right because some or all of your Contract value is invested, as provided by your Contract, in theone or more Series. For simplicity, in this Proxy Statement:
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“Record Holder” of the Series refers to each Insurance Company which holds Series’ shares of record;
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“shares” refers generally to your shares of beneficial interest in the Series; and
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“shareholder” or “Contract Owner” refers to you.
This Proxy Statement is being furnished in connection with the solicitation of voting instructions from Contract Owners for use at a special meeting of shareholders of the Trust and the Series (the “Meeting”). The Meeting is to be held on July 30, 2019 at 10:00 a.m. Eastern time, at the offices of Virtus Investment Partners, Inc. at One Financial Plaza, Hartford, Connecticut 06103, for the purpose set forth below and in the accompanying Notice of Special Meeting. This Proxy Statement and its enclosures are
being mailed to shareholders of the Series beginning on or about June 24, 2019, or as soon as practicable thereafter. Shareholders of record at the close of business on June 7, 2019 (the “Record Date”) are entitled to vote on the proposals, as set forth below.
At the Meeting, shareholders will be asked:
1.
To approve a Subadvisory Agreement by and among the Trust, Virtus Investment Advisers, Inc. (“VIA”), and Sustainable Growth Advisers, LP (the “Subadviser”).
2.
To transact any other business as may properly come before the Meeting or any adjournment(s) thereof.
Certain Insurance Company Separate Accounts are the only holders of shares of the Series. However, each Insurance Company has agreed to vote the shares of the Series at the Meeting in accordance with the timely instructions received from the owners of Contracts issued by such Insurance
Company having contract values allocated to its Separate Accounts and invested in such Series shares on the record date. Each Insurance Company will vote all of its shares of the Series held by a Separate Account in the same proportion (for, against or abstain) as those shares of the Separate Account for which the Insurance Company receives timely instructions from persons entitled to give voting instructions.
The Trust is registered with the Securities and Exchange Commission (the “Commission” or “SEC”) as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). It was formed on February 18, 1986 as a Massachusetts business trust, commenced operations on December 5, 1986, and was reorganized as a Delaware statutory trust on February 14, 2011. The Trust currently issues eight series of shares, each series representing a fractional undivided interest in a particular investment portfolio and having a different investment objective and different investment policies. The proposal in this Proxy Statement applies only to shareholders of Virtus SGA International Growth Series.
Virtus Investment Advisers, Inc. (“VIA” or the “Adviser”) currently serves as the investment adviser to the Series. VIA is a wholly-owned subsidiary of Virtus Partners, Inc., which is a wholly-owned subsidiary of Virtus Investment Partners, Inc. (“Virtus”). VP Distributors, LLC (“VPD”), another wholly-owned indirect subsidiary of Virtus, serves as principal underwriter of shares of the Series. Virtus Fund Services, LLC (“Virtus Fund Services”), another wholly-owned indirect subsidiary of Virtus, serves as the administrative agent for the Trust. The principal office of each of these entities is located at One Financial Plaza, Hartford, Connecticut 06103.
A copyCopies of the Series’Trust’s most recent annual and/or semi-annual reports isare available free of charge via the Internet at https://www.virtus.com/investor-center/variable-insurance-trust-fund-documents,www.virtus.com, by calling 800-367-5877 or by writing to the Trust at One Financial Plaza, Hartford, Connecticut 06103. A copy of this proxy statement is also available via the Internet at the Internet address provided on the voting instructionsproxy card.
General Voting Information
This Proxy Statement is being furnished to Contract Owners on behalf of the Board in connection with the solicitation by the Trust of voting instructions from Contract Owners indirectly invested in the Series in connection with a meeting of the Series’ shareholders to be held on July 30, 2019.June 28, 2022. The Board has called the Meeting to consider the mattermatters indicated on the cover page of this Proxy Statement. The Separate Accounts are the only holders of Series shares. Each Insurance Company will vote the Series shares at the Meeting in accordance with the instructions timely received from persons entitled to give voting instructions under Contracts funded through the Separate Account. Contract Owners have the right to instruct the Insurance Companies as to the number of shares (and fractional shares) that have an aggregate value on the record date equal to the contract value on the record date under that Contract allocated to the subaccount of each Separate Account holding the shares of the Series. Each Insurance Company will vote all of the shares of the Series held by a Separate Account in the same proportion (for, against or abstain) as those shares held by the Separate Account for which the Insurance Company receives timely instructions from persons entitled to give voting instructions. In other words, the Insurance Companies will vote shares attributable to Contracts as to
which no voting instructions are received in the same proportion as those for which instructions are received. This may result in a relatively small number of Contract Owners determining the vote with respect to a proposal.
If a properly executed voting instruction form is received that does not specify a choice, the Insurance Company will consider its timely receipt as an instruction to vote in favor of the relevant proposal. In certain circumstances, an Insurance Company has the right to disregard voting instructions from certain Contract Owners. An Insurance Company may, if required by state insurance regulations, disregard voting instructions which would require shares to be voted for a change in the sub-classification or investment objectives of a Series, or to approve or disapprove an investment advisory agreement for a Series. We may also disregard voting instructions that would require changes in the investment policy or investment adviser for a Series, provided that we reasonably determine to take this action in accordance with applicable federal law. If we disregard voting instructions we will include a summary of the action and reasons therefore in the next annual report to Contract Owners. The Trust does not believe that these circumstances exist with respect to matters currently before Series shareholders.
Contract Owners may revoke previously submitted voting instructions given to an Insurance Company at any time prior to the Meeting by mailing a notice of revocation to the Secretary at the principal office of the Trust, by executing a superseding voting instructions form by mail, telephone or through the Internet, or by attending the Meeting in person and instructing
the Insurance Company how to vote your shares and giving oral notice of revocation to the Chair of the Meeting. For any Contract Owner who desires to execute a superseding voting instructions form by mail, the Secretary of the Trust will send the Contract Owner a new voting instruction form, upon request.
The Board has fixed June 7, 2019May 16, 2022 as the record date for the determination of shareholders entitled to notice of and to vote at the Meeting. AsThe number of shares outstanding on the record date, the following shares and classes of the Series were outstanding and entitledRecord Date is listed on Appendix B attached to vote: Class A — 8,318.353 and Class I — 13,066,754.360.this Proxy Statement.
The Trustees and current executive officers of the Trust beneficially own, directly or indirectly, less than 1% of the shares of the Series. To the knowledge of the Trust and the Board, there are no Contract Owners, as of the record date, who have the right to instruct an Insurance Company as to 5% or more of the Series’ shares.
To be counted, the Insurance Companies must receive a Contract Owner’s voting instructions either by telephone or through the internet or via a properly executed voting instruction form mailed to the Proxy Tabulator, Broadridge Investor Communication Solutions, Inc., by 5:0011:59 p.m. Eastern time on July 29, 2019June 27, 2022 or by virtual attendance at the Meeting.
Each dollar of net asset value of the Series is entitled to one vote. Fractional dollars of net asset value are entitled to a proportionate fractional vote, which will be counted. A Contract Owner has the right to instruct the Insurance Company on how to vote the shares of the Series that are attributable to his or her Contract at the Meeting as to each proposal. The presence in person or by proxy of thirty-three and one-third percent (331∕3%) of the outstanding shares of the Series entitled to vote will constitute a quorum for the transaction of business at the Meeting. Abstentions are counted as present for the purpose of determining whether there is a quorum present. With respect to Proposal 1, each individual standing for election must receive a plurality of the votes cast at the Meeting, meaning the seven individuals who receive the most votes will be elected. If as expected, no one else stands for election at the Meeting and a quorum is present, the Nominees will be elected at the Meeting. Approval of the proposalProposal 2 requires approval by a majority of the outstanding shares of the Series at the close of business on the record date. Approval by a majority of the Series’ outstanding shares is defined by the 1940 Act, as the lesser of (i) 67% or more of the voting securities of the Series present in person or by proxy at the Meeting, if the holders of more than 50% of the outstanding voting securities of the Series are present in person or by proxy at the Meeting or (ii) more than 50% of the outstanding voting securities of the Series. BecauseWith respect to Proposal 1, abstentions are not counted as a vote cast either “FOR” or “AGAINST” a Nominee, and therefore will have no effect on the outcome of the election of Trustees. With respect to Proposal 2, because “affirmative” votes are necessary to approve the proposal, a voting instruction to “abstain” on a proposal has the same effect as an instruction to vote “against” the proposal. There are expected to be no broker non-votes for the proposal since the Insurance Companies know the identity of the Contract Owners and each Insurance Company will vote all of its shares of the Series held by a Separate Account in the same proportion
(for, (for, against or abstain) as those shares held by the Separate Account for which the Insurance Company receives timely instructions from persons entitled to give voting instructions. If the necessary quorum to transact business or the vote required to approve the proposal is not obtained at the Meeting, the chairperson of the Meeting may adjourn the Meeting to permit further solicitation of voting instructions if the chairperson determines that an adjournment and further solicitation is reasonable and in the interest of
shareholders. In determining whether to adjourn the Meeting, the following factors may be considered: the percentage of votes actually cast, the percentage of negative votes actually cast, the nature of any further solicitation and the information to be provided to shareholders with respect to the reasons for the solicitation. Neither the Commission nor Virtus requires any specific minimum percentage of Contract Owners to vote in order for an Insurance Company to vote shares for which voting instructions are not received. Virtus seeks to obtain a reasonable level of turnout given the particular circumstances, which circumstances may include the proportion of voting instructions actually received voting “for” the proposal. Adjourned meetings may be held within sixty (60) days after the date originally set for the Meeting without further notice to shareholders or Contract Owners, unless a new record date is set for the determination of shareholders entitled to notice of and to vote at the Meeting.
The Series will bear all of the expenses of soliciting voting instructions. The anticipated cost of such solicitation services is approximately $24,500.$260,000. The solicitation of instructions will be made primarily by mail but may include telephone, electronic or oral communications by employees of Virtus or its affiliates. This Proxy Statement and voting instruction form(s) were first mailed to Contract Owners on or about June 24, 2019.10, 2022.
BOARD OF TRUSTEES RECOMMENDATION
The Board of Trustees met on May 21 – 22, 2019March 2, 2022, in a virtual meeting format in light of public health concerns regarding the spread of COVID-19, to discuss the proposalproposals contained in this Proxy Statement. The Board including those Trustees who are not considered to be “interested persons” (as defined in the 1940 Act), voted unanimously to approve the proposal. proposals. The Board recommends that you vote “FOR” each of the proposalnominees named in Proposal 1 and “FOR” Proposal 2 contained in this Proxy Statement.
PROPOSAL 1: APPROVALTO ELECT SEVEN TRUSTEES
TO THE BOARD OF THE SUBADVISORY AGREEMENT WITH SUSTAINABLE GROWTH ADVISERS, LPTRUSTEES
I. IntroductionIt is proposed that the seven nominees described herein (the “Nominees”), four of whom currently serve as Trustees of the Trust, be elected to the Board at the Meeting. If elected, the seven Nominees would join five current Trustees who were previously elected to the Board of each Trust by shareholders, and would constitute a full Board of twelve Trustees. Trustees would serve until their successors have been duly elected and qualified or until their earlier death, resignation, retirement or removal. The Agreement and Declaration of Trust (“Declaration of Trust”) of each Trust does not require the annual election of Trustees. Further, the Declarations of Trust provide that any vacancy resulting from any reason, including the resignation of a Trustee, may be filled by a majority of the remaining Trustees, provided that immediately after filling any such vacancy at least two-thirds of the Trustees holding office have been elected to such office by the shareholders at a meeting called for the purpose. Biographical information regarding each of the nominees is provided below.
Virtus Investment Advisers, Inc. (the “Adviser” or “VIA”) serves asThe role of the Board is to provide general oversight of the Trust’s business, and to ensure that the Trust is operated for the benefit of shareholders. The Trustees meet at least quarterly and review the Series’ performance and oversee the services provided to the Trust by the investment adviser, subadvisers and the Trust’s other service providers. During the Trust’s most recent fiscal year, the Board met five times in regularly scheduled meetings and five times in special meetings, with all Trustees attending at least 75 percent of the meetings.
There are a number of legal and regulatory requirements applicable to the Series, pursuantcomposition of the Trust’s Board. In addition to an investment advisory agreement between VIA andthe requirements of the governing documents of the Trust discussed above, the 1940 Act permits the existing members of a mutual fund’s board of directors/trustees to appoint new members in certain circumstances. Mutual funds are required to call a shareholder meeting to elect board members if at any time less than a majority of the members holding office have been elected by shareholders. The 1940 Act also requires that at least a majority of a mutual fund’s board be comprised of directors/trustees who are not considered to be “interested persons” (as defined in the 1940 Act) of a fund or its adviser, underwriter or their controlling companies, in order to meet certain “fund governance standards” under the 1940 Act. These non-interested trustees are referred to herein as “Independent Trustees.” All of the Nominees, if elected, will be considered non-interested with respect to the Series, as last amended on September 7, 2016 (the “Advisory Agreement”). Duff & Phelps Investment Management Co. (“DPIM”) was appointed as investment subadviser toTrust’s Adviser, subadvisers and underwriter, or any of their affiliates.
At the Series, pursuant to a subadvisory agreement dated November 2, 2016, by and among the Trust, VIA and DPIM (the “Previous Subadvisory Agreement”). The Board, including a majority of the Trustees who are not “interested persons” as that term is defined in the 1940 Act (“Independent Trustees”), last renewed the Advisory Agreement and the Previous Subadvisory Agreement with respect to the Series at a meeting held on November 13 – 15, 2018.
InMarch 2, 2022, the role of Adviser to the Series, VIA is responsible for, among other activities, (i) setting the Series’ overall investment strategiesGovernance and monitoring and evaluating investment programs and results, including performance; (ii) reviewing the Series’ compliance with investment objectives, policies, restrictions; (ii) assisting with liquidity determinations and valuation of securities; and (iv) recommending to the Board whether subadvisory agreements should be renewed, modified, or terminated. With respect to management of the Series, due to the subadviser not meeting performance expectation, the Adviser initiated actions that resulted in the Adviser’s recommendation to terminate DPIM as subadviser. As a result, the Adviser recommended to the Board of Trustees of the Trust that the Series would benefit from replacement of DPIM with Sustainable Growth Advisers, LP (the “Subadviser” or “SGA”).
In connection with the recommendation to replace DPIM and appoint a new subadviser for the Series, at a meetingNominating Committee of the Board of Trustees of the Trust held on May 21 – 22, 2019, the Trustees (including the Independent Trustees) determined to terminate the Previous Subadvisory Agreement and approved an interim subadvisory agreement by and among the Trust, VIA and SGA with respectrecommend to the Series, which took effect as of June 4, 2019 (the “Interim Subadvisory Agreement”). The Interim Subadvisory Agreement has a term offull Board the earlier of 150 days or the date on which a new subadvisory agreement is entered into.
The Board of Trustees subsequently approved and recommendedNominees described below for shareholder approval a new investment subadvisory agreement by and among the Trust, VIA and the Subadviser with respectelection to the Series (the “Subadvisory Agreement”). If approved by the shareholders, theBoard. Acting on
Subadvisory Agreementthat recommendation, the Board approved those nominations and called a meeting of shareholders to allow shareholders of the Trust to vote on the election of the Nominees. If elected, any newly elected Trustees will become effectivejoin the Trust’s Board shortly after being elected.
With regard to the current Trustees, Ms. McNamara and Messrs. Aylward, Burke, Mallin, and McLoughlin have previously been elected as such by shareholders at a shareholder meeting held on AugustOctober 31, 2006, with respect to Ms. McNamara and Mr. McLoughlin, and on May 19, 2016, with respect to Messrs. Aylward, Burke, and Mallin, and they will remain as Trustees of the Trust. With regard to the Nominees, Ms. McDaniel, Dr. Harris and Messrs. Walton and Zino were appointed to the Board by the then-existing Trustees of the Board, but have not been elected as such by shareholders. Mses. Cogan and DeCotis and Mr. Drummond, who do not currently serve as Trustees for the Trust, are also Nominees. However, each has served as an Advisory Board Member of the Trust since February 1, 2019.2021 and also currently serves as a Director/Trustee of open-end and closed-end funds managed by an affiliate of Virtus.
The persons named in the enclosed proxy intend, unless authority is withheld, to vote for the election as Trustees of the Nominees named below. The Board recommends that the shareholders elect the persons whom they have nominated for election.
Each of the Nominees has agreed to serve, or continue to serve, as a Trustee if elected. If, at the time of the Meeting, any Nominee should be unavailable for election (which is not presently anticipated), the persons named as proxies may vote for other persons in their discretion. Trustees will hold office until the earlier of their death, resignation, removal or retirement, or the next meeting of shareholders at which Trustees are elected and the selection and qualification of their successors.
The following table sets forth the names, ages, principal occupations and other information relating to the Trustees and Nominees. Unless otherwise noted, the address of each Trustee and Nominee is c/o [Virtus Trust name], One Financial Plaza, Hartford, Connecticut 06103. There is no stated term of office for Trustees.
Independent Nominees
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
Cogan, Sarah E.
YOB: 1956 | | | N/A | | | 110 | | | Retired Partner, Simpson Thacher & Bartlett LLP (“STB”) (law firm) (since 2019); Director, Girl Scouts of Greater New York (since 2016); Trustee, Natural Resources Defense Council, Inc. (since 2013); and formerly, Partner, STB (1989 to 2018). | | | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2022), PIMCO Access Income Fund; Trustee (since 2021), PIMCO Flexible Emerging Markets Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, and Virtus Event Opportunities Trust (2 portfolios); Advisory Board Member (since 2021), Virtus Alternative Solutions Trust (2 portfolios), Virtus Mutual Fund Family (61 portfolios), Virtus Variable Insurance Trust (8 portfolios); Advisory Board Member (February 2021 to June 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2021), Virtus Global Multi-Sector Income Fund and Virtus Total Return | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | Fund Inc.; Trustee (since 2019), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (11 portfolios); Trustee (since 2019), Virtus AllianzGI Closed-End Funds (7 portfolios); Trustee (since 2019), PIMCO California Municipal Income Fund, PIMCO California Municipal Income Fund II, PIMCO California Municipal Income Fund III, PIMCO Municipal Income Fund, PIMCO Municipal Income Fund II, PIMCO Municipal Income Fund III, PIMCO New York Municipal Income Fund, PIMCO New York Municipal Income Fund II, PIMCO New York Municipal Income Fund III, PIMCO Energy and Tactical Credit Opportunities Fund, PCM Fund, Inc, PIMCO Corporate & Income Strategy Fund, PIMCO Corporate & Income Opportunity Fund, | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | PIMCO Dynamic Income Fund, PIMCO Global StocksPLUS® & Income Fund, PIMCO High Income Fund, PIMCO Income Strategy Fund, PIMCO Income Strategy Fund II, PIMCO Strategic Income Fund, Inc., PIMCO Flexible Credit Income Fund and PIMCO Flexible Municipal Income Fund; Trustee (since 2019), PIMCO Managed Accounts Trust (5 portfolios); and Trustee (2019 to 2021), PIMCO Dynamic Credit and Mortgage Income Fund and PIMCO Income Opportunity Fund. | |
DeCotis, Deborah A.
YOB: 1952 | | | N/A | | | 110 | | | Advisory Director, Morgan Stanley & Co., Inc. (since 1996); Member, Circle Financial Group (since 2009); Member, Council on Foreign Relations (since 2013); and Trustee, Smith College (since 2017). Formerly Director, Watford Re (2017 to 2021); Co-Chair Special Projects Committee, | | | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2022), PIMCO Access Income Fund; Trustee (since 2021), PIMCO Flexible Emerging Markets Income Fund; Trustee (since 2021), The Merger Fund®, The | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | Memorial Sloan Kettering (2005 to 2015); and Trustee, Stanford University (2010 to 2015). | | | Merger Fund® VL, and Virtus Event Opportunities Trust (2 portfolios); Advisory Board Member (since 2021), Virtus Alternative Solutions Trust (2 portfolios), Virtus Mutual Fund Family (61 portfolios), and Virtus Variable Insurance Trust (8 portfolios); Advisory Board Member (February 2021 to June 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2021), Virtus Global Multi-Sector Income Fund and Virtus Total Return Fund Inc.; Trustee (since 2020), PIMCO Dynamic Income Opportunities Fund; Trustee (since 2019), PIMCO Energy and Tactical Credit Opportunities Fund and Virtus AllianzGI Artificial Intelligence & Technology Opportunities Fund; Trustee (since 2018), PIMCO Flexible Municipal Income Fund Trustee (since 2017), | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | PIMCO Flexible Credit Income Fund and Virtus AllianzGI Convertible & Income 2024 Target Term Fund; Trustee (since 2015), Virtus AllianzGI Diversified Income & Convertible Fund; Trustee (since 2014), Virtus Investment Trust (13 portfolios); Trustee (2013 to 2021), PIMCO Dynamic Credit and Mortgage Income Fund; Trustee (since 2012), PIMCO Dynamic Income Fund; Trustee (since 2011), Virtus Strategy Trust (11 portfolios); Trustee (since 2011), PIMCO California Municipal Income Fund II, PIMCO California Municipal Income Fund III, PIMCO Municipal Income Fund, PIMCO Municipal Income Fund II, PIMCO Municipal Income Fund III, PIMCO New York Municipal Income Fund, PIMCO New York Municipal Income Fund II, PIMCO New York Municipal Income | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | Fund III, PCM Fund, Inc., PIMCO Corporate & Income Strategy Fund, PIMCO Corporate & Income Opportunity Fund, PIMCO Global StocksPLUS® & Income Fund, PIMCO High Income Fund, PIMCO Income Strategy Fund, PIMCO Income Strategy Fund II, PIMCO Strategic Income Fund, Inc., PIMCO Managed Accounts Trust (5 portfolios); Trustee (since 2011), Virtus AllianzGI Convertible & Income Fund, Virtus AllianzGI Convertible & Income Fund II, Virtus AllianzGI Equity & Convertible Income Fund, and Virtus Dividend, Interest & Premium Strategy Fund; and Trustee (2011 to 2021), PIMCO Income Opportunity Fund. | |
Drummond, F. Ford
YOB: 1962 | | | N/A | | | 110 | | | Owner/Operator (since 1998), Drummond Ranch; and Director (since 2015), Texas and Southwestern Cattle Raisers | | | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | Association. Formerly Chairman, Oklahoma Nature Conservancy (2019 to 2020); Board Member (2006 to 2020) and Chairman (2016 to 2018), Oklahoma Water Resources Board;, Director (1998 to 2008), The Cleveland Bank; and General Counsel (1998 to 2008), BMIHealth Plans (benefits administration). | | | Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, and Virtus Event Opportunities Trust (2 portfolios); Advisory Board Member (since 2021), Virtus Alternative Solutions Trust (2 portfolios), Virtus Mutual Fund Family (61 portfolios), and Virtus Variable Insurance Trust (8 portfolios); Advisory Board Member (February 2021 to June 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2021), Virtus Global Multi-Sector Income Fund and Virtus Total Return Fund Inc.; Trustee (since 2020), PIMCO Dynamic Income Opportunities Fund; Trustee (since 2019), PIMCO Energy and Tactical Credit Opportunities Fund and Virtus AllianzGI Artificial Intelligence & Technology Opportunities Fund; Trustee (since 2018), | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | PIMCO Flexible Municipal Income Fund Trustee (since 2017), PIMCO Flexible Credit Income Fund and Virtus AllianzGI Convertible & Income 2024 Target Term Fund; Trustee (since 2015), Virtus AllianzGI Diversified Income & Convertible Fund; Trustee (since 2014), Virtus Investment Trust (13 portfolios); Trustee (since 2013), PIMCO Dynamic Credit and Mortgage Income Fund; Trustee (since 2012), PIMCO Dynamic Income Fund; Trustee (since 2011), Virtus Strategy Trust (11 portfolios); Trustee (since 2011), PIMCO California Municipal Income Fund II, PIMCO California Municipal Income Fund III, PIMCO Municipal Income Fund, PIMCO Municipal Income Fund II, PIMCO Municipal Income Fund III, PIMCO New York Municipal Income Fund, PIMCO New York | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | Municipal Income Fund II, PIMCO New York Municipal Income Fund III, PCM Fund, Inc., PIMCO Corporate & Income Strategy Fund, PIMCO Corporate & Income Opportunity Fund, PIMCO Global StocksPLUS® & Income Fund, PIMCO High Income Fund, PIMCO Income Opportunity Fund, PIMCO Income Strategy Fund, PIMCO Income Strategy Fund II, PIMCO Strategic Income Fund, Inc., PIMCO Managed Accounts Trust (5 portfolios); and Trustee (since 2011), Virtus AllianzGI Convertible & Income Fund, Virtus AllianzGI Convertible & Income Fund II, Virtus AllianzGI Equity & Convertible Income Fund, and Virtus Dividend, Interest & Premium Strategy Fund. | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
Harris, Sidney E.
YOB: 1949 | | | Served since 2017. | | | 103 | | | Private Investor (since 2021); Dean Emeritus (since 2015); Professor (2015 to 2021 and 1997 to 2014), J. Mack Robinson College of Business, Georgia State University. | | | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios); Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (11 portfolios); Director (2020 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; and Director (since 2020), Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Trustee (since 2019), Mutual Fund Directors Forum; Trustee (since 2017), Virtus Mutual Fund Family (61 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Alternative Solutions Trust (2 portfolios); Trustee (2013 to 2020) and | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | Honorary Trustee (since 2020), KIPP Metro Atlanta; Director (1999 to 2019), Total System Services, Inc.; Trustee (2004 to 2017), RidgeWorth Funds; Chairman (2012 to 2017), International University of the Grand Bassam Foundation; Trustee (since 2012), International University of the Grand Bassam Foundation; and Trustee (2011 to 2015), Genspring Family Offices, LLC. | |
McDaniel, Connie D.
YOB: 1958 | | | Served since 2017. | | | 103 | | | Retired (since 2013). Vice President, Chief of Internal Audit, Corporate Audit Department (2009 to 2013); Vice President Global Finance Transformation (2007 to 2009); and Vice President and Controller (1999 to 2007), The Coca-Cola Company. | | | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, and Virtus Event Trust (2 portfolios); Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (11 portfolios); Director (2020 to 2021), Duff & Phelps Select MLP and Midstream Energy | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | Fund Inc.; Director (since 2020), Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Director (since 2019), Global Payments Inc.; Chairperson (since 2019), Governance & Nominating Committee, Global Payments Inc.; Trustee (since 2017), Virtus Mutual Fund Family (61 portfolios), Virtus Variable Insurance Trust (8 portfolios), and Virtus Alternative Solutions Trust (2 portfolios); Director (since 2021), North Florida Land Trust; Director (2014 to 2019), Total System Services, Inc.; Member (since 2011) and Chair (2014 to 2016), Georgia State University, Robinson College of Business Board of Advisors; and Trustee (2005 to 2017), RidgeWorth Funds. | |
Walton, R. Keith
YOB: 1964 | | | Served since 2020. | | | 110 | | | Venture and Operating Partner (since 2020), Plexo Capital, LLC; Venture Partner (since 2019) and Senior Adviser | | | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | (2018 to 2019), Plexo, LLC; and Partner (since 2006), Global Infrastructure Partners. Formerly, Managing Director (2020 to 2021), Lafayette Square Holding Company LLC; Senior Adviser (2018 to 2019), Vatic Labs, LLC; Executive Vice President, Strategy (2017 to 2019), Zero Mass Water, LLC; Vice President, Strategy (2013 to 2017), Arizona State University. | | | Income Fund; Trustee (since 2022), Virtus AllianzGI Diversified Income & Convertible Fund; Advisory Board Member (since 2022), Virtus AllianzGI Artificial Intelligence & Technology Opportunities Fund, Virtus AllianzGI Convertible & Income 2024 Target Term Fund, Virtus AllianzGI Convertible & Income Fund, Virtus AllianzGI Convertible & Income Fund II, Virtus AllianzGI Equity & Convertible Income Fund and Virtus Dividend, Interest & Premium Strategy Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (11 portfolios); Trustee (since 2020) Virtus Alternative Solutions Trust (2 portfolios), Virtus Variable Insurance Trust (8 | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | portfolios) and Virtus Mutual Fund Family (61 portfolios); Director (since 2017), certain funds advised by Bessemer Investment Management LLC; Director (2016 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2016), Virtus Global Multi-Sector Income Fund; Director (2006 to 2019), Systematica Investments Limited Funds; Director (2006 to 2017), BlueCrest Capital Management Funds; Trustee (2014 to 2017), AZ Service; Director (since 2004), Virtus Total Return Fund Inc.; and Director (2004 to 2019), the former Virtus Total Return Fund Inc. | |
Zino, Brian T.
YOB: 1952 | | | Served since 2020. | | | 110 | | | Retired. Various roles (1982 to 2009), J. & W. Seligman & Co. Incorporated, including President (1994 to 2009). | | | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (11 portfolios); Trustee (since 2022) and Advisory Board Member (2021), Virtus AllianzGI Closed-End Funds (7 portfolios); Trustee (since 2020), Virtus Alternative Solutions Trust (2 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Mutual Fund Family (61 portfolios); Director (2016 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2016), Virtus Global Multi-Sector Income Fund; Director (since 2014),​ Virtus Total Return Fund Inc.; Director (2014 to 2019), the former Virtus Total Return Fund Inc.; Trustee (since 2011), Bentley University; Director (1986 to 2009) | |
Name and Year of
Birth | | | Length of
Time
Served | | | Number
of
Portfolios
in Fund
Complex
Overseen
by
Trustee/
Advisory
Board
Member | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | and President (1994 to 2009), J&W Seligman Co. Inc.; Director (1998 to 2009), Chairman (2002 to 2004) and Vice Chairman (2000 to 2002), ICI Mutual Insurance Company; Member, Board of Governors of ICI (1998 to 2008). | |
Independent Trustees
Name and
Year of
Birth | | | Length of
Time
Served | | | Number of
Portfolios
in Fund
Complex
Overseen
by
Trustee | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
Burke, Donald C.
YOB: 1960 | | | Served since 2016. | | | 106 | | | Private investor (since 2009). Formerly, President and Chief Executive Officer, BlackRock U.S. Funds (2007 to 2009); Managing Director, BlackRock, Inc. (2007 to 2009), and Managing Director, Merrill Lynch Investment Managers (1990 to 2006). | | | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (11 portfolios); Director (2020 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Director (since 2020), Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Trustee (since 2016), Virtus Mutual Fund Family (61 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Alternative Solutions Trust (2 portfolios); Director (since 2014), closed-end funds managed by Duff & Phelps Investment Management | |
Name and
Year of
Birth | | | Length of
Time
Served | | | Number of
Portfolios
in Fund
Complex
Overseen
by
Trustee | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | Co. (3 funds); Director, Avista Corp. (energy company) (since 2011); Trustee, Goldman Sachs Fund Complex (2010 to 2014); and Director, BlackRock Luxembourg and Cayman Funds (2006 to 2010). | |
Mallin, John R.
YOB: 1950 | | | Served since 2016. | | | 103 | | | Partner/Attorney (since 2003), McCarter & English LLP (law firm) Real Property Practice Group; and Member (since 2014), Counselors of Real Estate. | | | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (11 portfolios); Director (2020 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; and Director (since 2020), Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Trustee (since 2016), Virtus Mutual Fund Family (61 portfolios) and Virtus | |
Name and
Year of
Birth | | | Length of
Time
Served | | | Number of
Portfolios
in Fund
Complex
Overseen
by
Trustee | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | Alternative Solutions Trust (2 portfolios); Director (since 2019), 1892 Club, Inc. (non-profit); Director (2013 to 2020), Horizons, Inc. (non-profit); and Trustee (since 1999), Virtus Variable Insurance Trust (8 portfolios). | |
McLoughlin, Philip
Chairman
YOB: 1946 | | | Served since 1993. | | | 113 | | | Private investor since 2010. | | | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (11 portfolios); Trustee (since 2021), Virtus AllianzGI Artificial Intelligence & Technology Opportunities Fund, Virtus AllianzGI Convertible & Income Fund II, Virtus AllianzGI Diversified Income & Convertible Fund, Virtus AllianzGI Equity & Convertible Income Fund | |
Name and
Year of
Birth | | | Length of
Time
Served | | | Number of
Portfolios
in Fund
Complex
Overseen
by
Trustee | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | and Virtus Dividend, Interest & Premium Strategy Fund; Trustee (since 2022) and Advisory Board Member (2021), Virtus AllianzGI Convertible & Income 2024 Target Term Fund and Virtus AllianzGI Convertible & Income Fund; Director and Chairman (since 2016), Virtus Total Return Fund Inc.; Director and Chairman (2016 to 2019), the former Virtus Total Return Fund Inc.; Director and Chairman (2014 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee and Chairman (since 2013), Virtus Alternative Solutions Trust (2 portfolios); Trustee and Chairman (since 2011), Virtus Global Multi-Sector Income Fund; Chairman and Trustee (since 2003), Virtus Variable Insurance Trust (8 portfolios); Director (since 1995), closed-end funds managed by Duff & Phelps Investment Management | |
Name and
Year of
Birth | | | Length of
Time
Served | | | Number of
Portfolios
in Fund
Complex
Overseen
by
Trustee | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | Co. (3 funds); Director (1991 to 2019) and Chairman (2010 to 2019), Lazard World Trust Fund (closed-end investment firm in Luxembourg); and Trustee (since 1989) and Chairman (since 2002), Virtus Mutual Fund Family (61 portfolios). | |
McNamara, Geraldine M.
YOB: 1951 | | | Served since 2001. | | | 106 | | | Private investor (since 2006); and Managing Director, U.S. Trust Company of New York (1982 to 2006). | | | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (11 portfolios); Director (2020 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc. and Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Trustee (since 2016), Virtus Alternative Solutions Trust | |
Name and
Year of
Birth | | | Length of
Time
Served | | | Number of
Portfolios
in Fund
Complex
Overseen
by
Trustee | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | (2 portfolios); Trustee (since 2015), Virtus Variable Insurance Trust (8 portfolios); Director (since 2003), closed-end funds managed by Duff & Phelps Investment Management Co. (3 funds); and Trustee (since 2001), Virtus Mutual Fund Family (61 portfolios). | |
Interested Trustee
Name and
Year of
Birth | | | Length of
Time
Served | | | Number of
Portfolios
in Fund
Complex
Overseen
by Trustee | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
Aylward, George R.
YOB: 1964 | | | Served since 2006. | | | 115 | | | Director, President and Chief Executive Officer (since 2008), Virtus Investment Partners, Inc. and/or certain of its subsidiaries, and various senior officer positions with Virtus affiliates (since 2005). | | | Trustee, President and Chief Executive Officer (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Member, Board of Governors of the Investment Company Institute (since 2021); Trustee and President (since 2021), The Merger Fund®, The Merger Fund® VL, and Virtus Event Opportunities Trust (2 portfolios); Trustee and President (since 2021), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (11 portfolios); Trustee, President and Chief Executive Officer (since 2021), Virtus AllianzGI Closed-End Funds (7 portfolios); and Chairman and Trustee (since 2015), Virtus ETF Trust II (5 portfolios); Director, President and Chief Executive Officer (2014 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee and | |
Name and
Year of
Birth | | | Length of
Time
Served | | | Number of
Portfolios
in Fund
Complex
Overseen
by Trustee | | | Principal Occupation(s)
During Past 5 Years | | | Other Directorships Held by
Trustee During Past 5 Years | |
| | | | | | | | | | | | | President (since 2013), Virtus Alternative Solutions Trust (2 portfolios); Director (since 2013), Virtus Global Funds, PLC (5 portfolios); Trustee (since 2012) and President (since 2010), Virtus Variable Insurance Trust (8 portfolios); Trustee, President and Chief Executive Officer (since 2011), Virtus Global Multi-Sector Income Fund; Trustee and President (since 2006) and Executive Vice President (2004 to 2006), Virtus Mutual Fund Family (61 portfolios); Director, President and Chief Executive Officer (since 2006), Virtus Total Return Fund Inc.; and Director, President and Chief Executive Officer (2006 to 2019), the former Virtus Total Return Fund Inc. | |
Mr. Aylward is an “interested person” as defined in the Investment Company Act of 1940, by reason of his position as President and Chief Executive Officer of Virtus, the ultimate parent company of the Adviser, and various positions with its affiliates including the Adviser.
Officers of the Trust Who Are Not Trustees
Name, Address and
Year of Birth | | | Position(s) Held with the
Trust and Length of Time
Served | | | Principal Occupation(s)
During Past 5 Years | |
Batchelar, Peter J.
YOB: 1970 | | | Senior Vice President (since 2017), and Vice President (2008 to 2016). | | | Senior Vice President, Product Development (since 2017), Vice President, Product Development (2008 to 2016), and various officer positions (since 2008), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Senior Vice President (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Senior Vice President (since 2021), The Merger Fund®, The Merger Fund® VL and Virtus Event Opportunities Trust; Senior Vice President (since 2021), Virtus Investment Trust and Virtus Strategy Trust; Senior Vice President (since 2021), AllianzGI Closed-End Funds; Senior Vice President (since 2017) and Vice President (2008 to 2016), Virtus Mutual Fund Family; Senior Vice President (since 2017) and Vice President (2010 to | |
Name, Address and
Year of Birth | | | Position(s) Held with the
Trust and Length of Time
Served | | | Principal Occupation(s)
During Past 5 Years | |
| | | | | | | 2016), Virtus Variable Insurance Trust; Senior Vice President (since 2017) and Vice President (2013 to 2016), Virtus Alternative Solutions Trust; Senior Vice President (2017 to 2021) and Vice President (2016 to 2017), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Senior Vice President (since 2017) and Vice President (2016 to 2017), Virtus Total Return Fund Inc. and Virtus Global Multi-Sector Income Fund; and Senior Vice President (2017 to 2019) and Vice President (2016 to 2017), the former Virtus Total Return Fund Inc. | |
Bradley, W. Patrick
YOB: 1972 | | | Executive Vice President (since 2016); Senior Vice President (2013 to 2016); Vice President (2011 to 2013); Chief Financial Officer and Treasurer (since 2006). | | | Executive Vice President, Fund Services (since 2016), Senior Vice President, Fund Services (2010 to 2016), and various officer positions (since 2006), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Executive Vice President, Chief | |
Name, Address and
Year of Birth | | | Position(s) Held with the
Trust and Length of Time
Served | | | Principal Occupation(s)
During Past 5 Years | |
| | | | | | | Financial Officer and Treasurer (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Executive Vice President, Chief Financial Officer and Treasurer (since 2021), The Merger Fund®, The Merger Fund® VL and Virtus Event Opportunities Trust; Executive Vice President, Chief Financial Officer and Treasurer (since 2021), Virtus Investment Trust and Virtus Strategy Trust; Executive Vice President, Chief Financial Officer and Treasurer (since 2021), Virtus AllianzGI Closed-End Funds; Director (since 2019), Virtus Global Funds ICAV; Executive Vice President (since 2016), Senior Vice President (2013 to 2016), Vice President (2011 to 2013), Chief Financial Officer and Treasurer (since 2004), Virtus Variable Insurance Trust; Executive Vice | |
Name, Address and
Year of Birth | | | Position(s) Held with the
Trust and Length of Time
Served | | | Principal Occupation(s)
During Past 5 Years | |
| | | | | | | President (since 2016), Senior Vice President (2013 to 2016), Vice President (2011 to 2013), Chief Financial Officer and Treasurer (since 2006), Virtus Mutual Fund Family; Executive Vice President (since 2016), Senior Vice President (2013 to 2016), Vice President (2012 to 2013) and Chief Financial Officer and Treasurer (since 2010), Virtus Total Return Fund Inc.; Executive Vice President (2016 to 2019), Senior Vice President (2013 to 2016), Vice President (2012 to 2013), Chief Financial Officer and Treasurer (since 2010), the former Virtus Total Return Fund Inc.; Executive Vice President (since 2016), Senior Vice President (2013 to 2016), Vice President (2011 to 2013), Chief Financial Officer and Treasurer (since 2011), Virtus Global Multi-Sector Income Fund; Executive Vice President (2016 to 2021), Senior Vice | |
Name, Address and
Year of Birth | | | Position(s) Held with the
Trust and Length of Time
Served | | | Principal Occupation(s)
During Past 5 Years | |
| | | | | | | President (2014 to 2016), Chief Financial Officer and Treasurer (2014 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Executive Vice President (since 2016), Senior Vice President (2013 to 2016), and Chief Financial Officer and Treasurer (since 2013), Virtus Alternative Solutions Trust; Director (since 2013), Virtus Global Funds, PLC; and Vice President and Assistant Treasurer (since 2011), Duff & Phelps Utility and Infrastructure Fund Inc. | |
Carr, Kevin J.
YOB: 1954 | | | Senior Vice President (since 2017); Assistant Secretary (since 2013); Vice President, Chief Legal Officer, Counsel and Secretary (2010 to 2013). | | | Vice President and Senior Counsel (2017 to Present), Senior Vice President (2009 to 2017), Vice President, Counsel and Secretary (2008 to 2009), and various officer positions (since 2005), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Assistant Secretary (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone | |
Name, Address and
Year of Birth | | | Position(s) Held with the
Trust and Length of Time
Served | | | Principal Occupation(s)
During Past 5 Years | |
| | | | | | | Harbor Emerging Markets Total Income Fund; Senior Vice President and Assistant Secretary (since 2021), The Merger Fund®, The Merger Fund® VL and Virtus Event Opportunities Trust; Senior Vice President and Assistant Secretary (since 2021), Virtus Investment Trust and Virtus Strategy Trust; Assistant Secretary, (since 2021), Virtus AllianzGI Closed-End Funds; Senior Vice President (since 2013), Vice President (2005 to 2013), Chief Legal Officer, Counsel and Secretary (since 2005), Virtus Mutual Fund Family; Senior Vice President (2013 to 2014), Vice President (2012 to 2013), Secretary and Chief Legal Officer (2005 to 2013), and Assistant Secretary (2013 to 2014 and since 2017), Virtus Total Return Fund Inc.; Senior Vice President (2013 to 2014), Vice President (2012 to 2013), Secretary and Chief Legal Officer (2005 to 2013) and | |
Name, Address and
Year of Birth | | | Position(s) Held with the
Trust and Length of Time
Served | | | Principal Occupation(s)
During Past 5 Years | |
| | | | | | | Assistant Secretary (2013 to 2014 and 2017 to 2019), the former Virtus Total Return Fund Inc.; Senior Vice President (since 2017), Assistant Secretary (since 2013), Vice President, Chief Legal Officer, Counsel and Secretary (2010 to 2013), Virtus Variable Insurance Trust; Senior Vice President (2013 to 2014), Vice President (2011 to 2013), and Assistant Secretary (since 2011), Virtus Global Multi-Sector Income Fund; Assistant Secretary (2015 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Senior Vice President (since 2017) and Assistant Secretary (since 2013), Virtus Alternative Solutions Trust; Secretary (since 2015), ETFis Series Trust I; and Secretary (since 2015), Virtus ETF Trust II. | |
Engberg, Nancy J.
YOB: 1956 | | | Senior Vice President (since 2017); Vice President (2011 to 2017); and Chief Compliance Officer (since 2011). | | | Senior Vice President (since 2017), Vice President (2008 to 2017) and Chief Compliance Officer (2008 to 2011 and since | |
Name, Address and
Year of Birth | | | Position(s) Held with the
Trust and Length of Time
Served | | | Principal Occupation(s)
During Past 5 Years | |
| | | | | | | 2016), and various officer positions (since 2003), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Senior Vice President and Chief Compliance Officer (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Senior Vice President and Chief Compliance Officer (since 2021), The Merger Fund®, The Merger Fund® VL and Virtus Event Opportunities Trust; Senior Vice President and Chief Compliance Officer (since 2021), Virtus Investment Trust, Virtus Strategy Trust and Virtus AllianzGI Closed-End Funds; Senior Vice President (since 2017), Vice President (2011 to 2017) and Chief Compliance Officer (since 2011), Virtus Mutual Fund Family; Senior Vice President (since 2017), Vice President (2010 to 2017) and Chief | |
Name, Address and
Year of Birth | | | Position(s) Held with the
Trust and Length of Time
Served | | | Principal Occupation(s)
During Past 5 Years | |
| | | | | | | Compliance Officer (since 2011), Virtus Variable Insurance Trust; Senior Vice President (since 2017), Vice President (2011 to 2017) and Chief Compliance Officer (since 2011), Virtus Global Multi-Sector Income Fund; Senior Vice President (since 2017), Vice President (2012 to 2017) and Chief Compliance Officer (since 2012), Virtus Total Return Fund Inc.; Senior Vice President (2017 to 2019), Vice President (2012 to 2017) and Chief Compliance Officer (2012 to 2019), the former Virtus Total Return Fund Inc.; Senior Vice President (since 2017), Vice President (2013 to 2016) and Chief Compliance Officer (since 2013), Virtus Alternative Solutions Trust; Senior Vice President (2017 to 2021), Vice President (2014 to 2017) and Chief Compliance Officer (2014 to 2021), Duff & Phelps Select MLP and Midstream | |
Name, Address and
Year of Birth | | | Position(s) Held with the
Trust and Length of Time
Served | | | Principal Occupation(s)
During Past 5 Years | |
| | | | | | | Energy Fund Inc.; Chief Compliance Officer (since 2015), ETFis Series Trust I; and Chief Compliance Officer (since 2015), Virtus ETF Trust II. | |
Fromm, Jennifer
YOB: 1973 | | | Vice President, Chief Legal Officer and Secretary (since 2013). | | | Vice President (since 2016) and Senior Counsel (since 2007), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Vice President, Chief Legal Officer, Counsel and Secretary (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Vice President, Chief Legal Officer, Counsel and Secretary (since 2021), Virtus Investment Trust and Virtus Strategy Trust; Vice President and Assistant Secretary (since 2021), Virtus AllianzGI Closed-End Funds; Vice President and Secretary (since 2020), DNP Select Income Fund Inc., Duff & Phelps Utility and Infrastructure Fund Inc., and DTF | |
Name, Address and
Year of Birth | | | Position(s) Held with the
Trust and Length of Time
Served | | | Principal Occupation(s)
During Past 5 Years | |
| | | | | | | Tax-Free Income 2028 Term Fund Inc.; Vice President, Chief Legal Officer and Secretary (since 2020, Duff & Phelps Select MLP and Midstream Energy Fund Inc., Virtus Total Return Fund Inc. and Virtus Global Multi-Sector Income Fund; Vice President (since 2017) and Assistant Secretary (since 2008), Virtus Mutual Funds Family; Vice President, Chief Legal Officer, and Secretary (since 2013), Virtus Variable Insurance Trust; and Vice President, Chief Legal Officer, and Secretary (since 2013), Virtus Alternative Solutions Trust. | |
Short, Julia R.
YOB: 1972 | | | Senior Vice President (since 2017). | | | Senior Vice President, Product Development (since 2017), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Senior Vice President (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Senior Vice | |
Name, Address and
Year of Birth | | | Position(s) Held with the
Trust and Length of Time
Served | | | Principal Occupation(s)
During Past 5 Years | |
| | | | | | | President (since 2021), The Merger Fund®, The Merger Fund® VL and Virtus Event Opportunities Trust; Senior Vice President (since 2021), Virtus Investment Trust, Virtus Strategy Trust and Virtus Closed-End Funds; Senior Vice President (2018 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; and Senior Vice President (since 2018), Virtus Global Multi-Sector Income Fund and Virtus Total Return Fund Inc.; Senior Vice President (2018 to 2019), the former Virtus Total Return Fund Inc.; Senior Vice President (since 2017), Virtus Mutual Fund Family; President and Chief Executive Officer, RidgeWorth Funds (2007 to 2017); and Managing Director, Product Manager, RidgeWorth Investments (2004 to 2017). | |
Name, Address and
Year of Birth | | | Position(s) Held with the
Trust and Length of Time
Served | | | Principal Occupation(s)
During Past 5 Years | |
Smirl, Richard W.
YOB: 1967 | | | Executive Vice President (since 2021). | | | Executive Vice President, Product Management (since 2021), and Executive Vice President and Chief Operating Officer (since 2021), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Executive Vice President (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Executive Vice President (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust, Virtus Mutual Fund Family, Virtus Investment Trust, Virtus Strategy Trust, Virtus AllianzGI Closed-End Funds, Virtus Global Multi-Sector Income Fund, Virtus Global Multi-Sector Income Fund, and Virtus Total Return Fund Inc.; Executive Vice President (May to June 2021), Duff & Phelps Select MLP and | |
Name, Address and
Year of Birth | | | Position(s) Held with the
Trust and Length of Time
Served | | | Principal Occupation(s)
During Past 5 Years | |
| | | | | | | Midstream Energy Fund Inc.; Chief Operating Officer (2018 to 2021), Russell Investments; Executive Director (Jan. to July 2018), State of Wisconsin Investment Board; and Partner and Chief Operating Officer (2004 to 2018), William Blair Investment Management. | |
The Board and Oversight Function. The Board is responsible for oversight of the Trust. The Trust has engaged VIA to manage the Trust on a day-to-day basis. The Board is responsible for overseeing VIA and the other service providers in the operations of the Trust in accordance with the Series’ investment objectives and policies and otherwise in accordance with its prospectus, the requirements of the 1940 Act and other applicable federal, state and other securities and other laws, and the Trust’s charter. The Board meets at regularly scheduled meetings five times throughout the year. In addition, the Trustees may meet in person or by telephone at special meetings or on an informal basis at other times. The Independent Trustees also regularly meet without the presence of any representatives of management. As discussed below, the Subadvisory AgreementBoard has established several committees to assist the Board in performing its oversight responsibilities, and each such committee has a chairperson. The current Board has four standing committees: Audit Committee, Compliance Committee, Governance and Nominating Committee, and Executive Committee. Although each committee is composed exclusively of Independent Trustees, any interested Trustee may also attend the committee meetings. The Board may also designate working groups or ad hoc committees as it deems appropriate. The responsibilities of each committee, including its oversight responsibilities, are described further below. The Independent Trustees have also engaged independent legal counsel, Sullivan & Worcester LLP, to assist them in performing their oversight responsibilities. In addition, the Trustees have engaged a Chief Compliance Officer (“CCO”) for the Trust.
The Board has appointed Mr. McLoughlin, an Independent Trustee, to serve in the role of Chairman. The Chairman’s primary role is to participate in the preparation of the agenda for meetings of the Board and the
identification of information to be presented to the Board with respect to matters to be acted upon by the Board. The Chairman also presides at all meetings of the Board and between meetings generally acts as a liaison with the Trust’s service providers, officers, legal counsel, and the Interim Subadvisory Agreement are similarother Trustees. The Chairman may perform such other functions as may be requested by the Board from time to time. Except for any duties specified herein or pursuant to the Previous Subadvisory Agreement, exceptTrust’s Declaration of Trust or By-laws, or as assigned by the Board, the designation of Chairman does not impose on such Independent Trustee any duties, obligations or liability that is greater than the duties, obligations or liability imposed on such person as a member of the Board, generally.
The Board believes that this leadership structure is appropriate because it allows the Board to exercise informed and independent judgment over matters under its purview, and it allocates areas of responsibility among committees or working groups of Trustees and the full Board in a manner that enhances effective oversight. Mr. McLoughlin previously served as the Chairman and Chief Executive Officer of the company that is now Virtus; however, he is now an Independent Trustee due to (a) the fact that Virtus is no longer affiliated with The Phoenix Companies, Inc. (which was its parent company when Mr. McLoughlin retired) and (b) the passage of time. As a result of this balance, it is believed that Mr. McLoughlin has the ability to provide independent oversight of the Trust’s operations within the context of his detailed understanding of the perspective of the Adviser and the Trust’s other service providers. The Board therefore considers leadership by Mr. McLoughlin as enhancing the Board’s ability to provide effective independent oversight of the Trust’s operations and meaningful representation of the shareholders’ interests.
Committees of the Board
The Audit Committee. The Audit Committee is responsible for overseeing the Series’ accounting and auditing policies and practices. The Audit Committee reviews the Series’ financial reporting procedures, their system of internal control, and the independent audit process. The Audit Committee is composed entirely of Independent Trustees; its members are Connie D. McDaniel (Chairperson), Donald C. Burke, John R. Mallin and Brian T. Zino. If elected, Ms. DeCotis would also serve on the Committee. The Committee met seven times during the Trust’s last fiscal year.
The Compliance Committee. The Compliance Committee is responsible for overseeing the Series’ compliance matters. The Compliance Committee oversees and reviews (1) information provided by the Series’ officers, including the Series’ CCO, the Series’ investment adviser and other principal service providers, and others as appropriate; (2) the codes of ethics; (3) whistleblower reports; and (4) distribution programs. The Compliance
Committee is composed entirely of Independent Trustees; its members are Geraldine M. McNamara (Chairperson), Sidney E. Harris, and R. Keith Walton. If elected, Ms. Cogan and Mr. Drummond would also serve on the Committee. The Committee met seven times during the Trust’s last fiscal year.
The Executive Committee. The function of the Executive Committee is to serve as a delegate of the full Board, as well as act on behalf of the Board when it is not in session, subject to limitations as set by the Board. The Executive Committee is composed entirely of Independent Trustees; its members are Philip R. McLoughlin (Chairperson), Donald C. Burke, Sidney E. Harris and Brian T. Zino. If elected, Ms. DeCotis would also serve on the Committee. The Committee met six times during the Trust’s last fiscal year.
The Governance and Nominating Committee. The Governance and Nominating Committee is responsible for developing and maintaining governance principles applicable to the Series, for nominating individuals to serve as Trustees, including as Independent Trustees, and annually evaluating the Board and Committees. The Governance and Nominating Committee is composed entirely of Independent Trustees; its members are Brian T. Zino (Chairperson), Sidney E. Harris, Philip R. McLoughlin and R. Keith Walton. If elected, Ms. Cogan would also serve on the Committee. The Committee met eight times during the Trust’s last fiscal year.
The Governance and Nominating Committee considers candidates for trusteeship and makes recommendations to the Board with respect to such candidates. There are no specific required qualifications for trusteeship. The committee considers all relevant qualifications of candidates for trusteeship, such as industry knowledge and experience, financial expertise, current employment and other board memberships, and whether the candidate would be qualified to be considered an Independent Trustee. The Board believes that having among its members a diversity of viewpoints, skills and experience and a variety of complementary skills enhances the effectiveness of the Board in its oversight role. The committee considers the qualifications of candidates for trusteeship in this context.
The Board has adopted a policy for consideration of Trustee nominees recommended by shareholders. With regards to such policy, an individual shareholder or shareholder group submitting a nomination must hold either individually or in the aggregate for at least one full year as of the date of nomination 5% of the shares of a series of the Trust, among other qualifications and restrictions. Shareholders or shareholder groups submitting nominees must comply with all requirements set forth in the Trust’s policy for consideration of Trustee nominees recommended by shareholders and any such submission must be in writing, directed to the
attention of the Governance and Nominating Committee in care of the Trust’s Secretary, and should include biographical information, including business experience for the subadviser, the effective datepast ten years and terma description of the Agreement,qualifications of the proposed nominee, along with a statement from the proposed nominee that he or she is willing to serve and meets the requirements to be an Independent Trustee, if applicable. Shareholder nominees for Trustee will be given the same consideration as any candidate provided the nominee meets certain minimum requirements.
Board Conclusion on Experience, Qualifications, Attributes and Skills of Trustees/Nominees
The Governance and Nominating Committee of the Board, which is composed of all the Independent Trustees, reviews the experience, qualifications, attributes and skills of potential candidates for nomination or election by the Board, and conducted a similar review with respect to the current Trustees and Nominees being nominated for election by shareholders prior to their appointment or election to the Board. In evaluating candidates for nomination or election as a Trustee, the Governance and Nominating Committee takes into account the contribution that the candidate would be expected to make and the experience, qualifications, attributes and skills that the Governance and Nominating Committee believes contribute to good governance for the Trust.
The Board has concluded that, based on each Nominee’s experience, qualifications, attributes and skills on an individual basis and in combination with those of the other non-material exceptions. AsTrustees, each Nominee is qualified to serve as Trustee. In determining that a particular Nominee was qualified to serve as a Trustee, the Board considered a variety of criteria. The Board noted that Ms. McDaniel, Dr. Harris and Messrs. Walton and Zino are each currently serving as Trustees on the Board. Additionally, the Board noted that Mses. Cogan and DeCotis and Mr. Drummond serve on a separate Board of Directors that oversees open-end funds and of closed-end funds managed by an affiliated investment adviser, which also shares certain service providers with the Previous Subadvisory Agreement,Trust. The Board believes that the Series doesfamiliarity and knowledge by the Nominees of the common investment adviser and the Virtus organization provide benefits and efficiencies in the governance process of the Trust. In addition, the Board has taken into account the actual service, commitment and participation of each Nominee during his or her past tenure with the Trust or with other funds in the Virtus Funds complex in concluding that each Nominee should serve as Trustee. In addition to the information set forth above, the following provides further information about each Nominee’s specific experience, qualifications, attributes or skills. The information in this section should not paybe understood to mean that any of the subadvisory fee underTrustees or Nominees is an “expert” within the Subadvisory Agreement ormeaning of the Interim Subadvisory Agreement. The Advisory Agreement betweenfederal securities laws.
George R. Aylward
In addition to his positions with the Trust, Mr. Aylward is a Director and the President and Chief Executive Officer of Virtus, the ultimate parent company of the Adviser. He also holds various executive positions with the Adviser, certain Funds’ subadvisers, the Distributor and the Administrator to the Trust, and VIA relatingvarious of their affiliates, and previously held such positions with the former parent company of Virtus. He therefore has experience in all aspects of the development and management of registered investment companies, and the handling of various financial, staffing, regulatory and operational issues. Mr. Aylward is a certified public accountant and holds an MBA, and he also serves as an officer and director/trustee of several open-end and closed-end funds managed by the Adviser and its affiliates.
Donald C. Burke
Mr. Burke has extensive financial and business experience in the investment management industry. He was employed by BlackRock, Inc. (2006 to 2009) and Merrill Lynch Investment Managers (1990 to 2006) where he held a number of roles including Managing Director and President and Chief Executive Officer of the BlackRock U.S. mutual funds. In this role, Mr. Burke was responsible for the accounting, tax and regulatory reporting requirements for over 300 open and closed-end funds. He also served as a trustee for numerous global funds that were advised by BlackRock, Inc. Mr. Burke currently serves as a director and Audit Committee Chairman of Avista Corp., a public company involved in the production, transmission and distribution of energy. Mr. Burke started his career at Deloitte & Touche (formerly Deloitte Haskins & Sells) and is a certified public accountant. He has also served on a number of nonprofit boards. He is also a director/trustee of open-end and closed-end funds managed by Virtus affiliates.
Sarah E. Cogan
Ms. Cogan has substantial legal background and experience in the investment management industry. She was a partner at Simpson Thacher & Bartlett LLP, a large international law firm, in the corporate department for over 25 years and former head of the registered funds practice. She has extensive experience in oversight of investment company boards through her prior experience as counsel to the Series remainsIndependent Trustees of the series of Allianz Funds (now known as Virtus Investment Trust) and Allianz Funds Multi-Strategy Trust (now known as Virtus Strategy Trust) and as counsel to other independent trustees, investment companies and asset management firms. She is also a director/trustee of open-end and closed-end funds managed by Virtus affiliates.
Deborah A. DeCotis
Ms. DeCotis has substantial senior executive experience in effectthe investment banking industry, having served as a Managing Director for Morgan Stanley. She has extensive board experience and/or experience in oversight of investment management functions through her experience as a trustee of Stanford University and Smith College and as a director of Armor Holdings and The Helena Rubinstein Foundation, Stanford Graduate School of Business. Ms. DeCotis is also a director/trustee of open-end and closed-end funds managed by Virtus affiliates.
F. Ford Drummond
Mr. Drummond has substantial legal background and experience in the fees payableoversight and management of regulated companies through his work as General Counsel of BMI Health Plans, a benefits administrator. He has substantial board experience in the banking sector as a director of BancFirst Corporation, Oklahoma’s largest state chartered bank, and as a former director of The Cleveland Bank. Mr. Drummond also previously served as a member and chairman of the Oklahoma Water Resources Board, which provides tax exempt financing for water infrastructure projects in the state. He is also a director/trustee of open-end and closed-end funds managed by Virtus affiliates.
Sidney E. Harris
Dr. Sidney Harris has extensive knowledge of best practices in executive management, familiarity with international business practices and expertise in corporate strategy implementation, risk management, technology, asset management compliance and investments. Dr. Harris is Dean Emeritus and, until recently, was a Professor at the J. Mack Robinson College of Business at Georgia State University. He was affiliated with the J. Mack Robinson College of Business from 1997 to 2021, including serving as Professor (1997 to 2014) and Dean (1997 to 2004). Most recently, Dr. Harris was Professor of Computer Information Systems, Management and International Business. Prior to joining Georgia State University, Dr. Harris was Professor (1987 to 1996) and former Dean (1991 to 1996) of the Adviser byPeter F. Drucker Graduate School of Management at Claremont Graduate University (currently Peter F. Drucker and Masotoshi Ito Graduate School of Management). He served as Independent Trustee of the Series underRidgeWorth Funds Board of Trustees (2004 to 2017) and as Independent Chairman (2007 to 2017). He served as a member of the Advisory Agreement will not change.
II. The Previous, InterimRidgeWorth Funds Governance and New Subadvisory Agreements
The Previous Subadvisory Agreement
The Previous Subadvisory Agreement provided that it would remain in effect until December 31, 2017,Nominating Committee (2004 to 2017) and would continue in full force and effect for successive periods of one year thereafter only so long asAudit Committee (2006 to 2017). Dr. Harris previously served on the Board of Transamerica Investors (1995 to 2005). Dr. Harris previously served as a Director of Total System
Services, Inc. (1999 to 2019). He served on the Board of Directors of KIPP Metro Atlanta, served as Chairman of the International University of the Grand-Bassam (“IUGB”) Foundation (2012 to 2017), and serves on the Board of Directors of the IUGB Foundation (since 2012). Dr. Harris also serves as a Trustee of the Mutual Funds Directors Forum (since 2019). He is also a director/trustee of open-end and closed-end funds managed by Virtus affiliates.
John R. Mallin
Mr. Mallin is a real estate partner and former practice group leader for the Real Property Practice Group at McCarter & English LLP. During his career, he has been involved in all aspects of real estate development and financial transactions related to real estate. Mr. Mallin also has oversight and corporate governance experience as a director, including as a chair, of non-profit entities. Mr. Mallin is also a trustee of several other open-end funds managed by Virtus affiliates.
Connie D. McDaniel
Ms. McDaniel, currently retired, has extensive domestic and international business experience, particularly with respect to finance, strategic planning, risk management and risk assessment functions. She is retired from The Coca-Cola Company, where she served as Vice President and Chief of Internal Audit, Corporate Audit Department (2009 to 2013), Vice President, Global Finance Transformation (2007 to 2009), Vice President and Controller (1999 to 2007), and held various management positions (1989 to 1999). While at The Coca-Cola Company, Ms. McDaniel chaired that company’s Ethics and Compliance Committee (2009 to 2013) and developed a knowledge of corporate governance matters. Prior to The Coca-Cola Company, she was associated with Ernst & Young (1980 to 1989). Ms. McDaniel served as Independent Trustee of the RidgeWorth Funds Board of Trustees from 2005 to 2017. She was Chairman of the RidgeWorth Funds Audit Committee (2008 to 2017), designated Audit Committee Financial Expert (2007 to 2017) and a member of the RidgeWorth Funds Governance and Nominating Committee (2015 to 2017). Ms. McDaniel also served as a Director of Total System Services, Inc. (2014 to 2019). She currently serves as a Director of Global Payments Inc. (since 2019) and as a Director of North Florida Land Trust (since 2021). Ms. McDaniel served as Chair of the Georgia State University Robinson College of Business Board of Advisors (2014 to 2016) and has served as a member of the Georgia State University Robinson College of Business Board of Advisors since 2011. Ms. McDaniel is also a director/trustee of open-end and closed-end funds managed by Virtus affiliates.
Philip R. McLoughlin
Mr. McLoughlin has an extensive legal, financial and asset management background. In 1971, he joined Phoenix Investment Partners, Ltd. (then, Phoenix Equity Planning Corp.), the predecessor of Virtus Investment Partners, Inc., as Assistant Counsel with responsibility for various compliance and legal functions. During his tenure, Mr. McLoughlin assumed responsibility for most functions in the firm’s advisory, broker-dealer and fund management operations, and eventually ascended to the role of President. Mr. McLoughlin then served as General Counsel, and later Chief Investment Officer, of Phoenix Mutual Life Insurance Company, the parent company of Phoenix Investment Partners. Among other functions, he served as the senior management liaison to the boards of directors of the insurance company’s mutual funds and closed-end funds, and had direct oversight responsibility for the funds’ portfolio managers. In 1994, Mr. McLoughlin was named Chief Executive Officer of Phoenix Investment Partners, and continued in that position, as well as Chief Investment Officer of Phoenix Mutual Life Insurance Company, until his retirement in 2002. He is also a director/trustee of open-end and closed-end funds managed by Virtus affiliates, including serving as the chairman of the board of several such funds.
Geraldine M. McNamara
Ms. McNamara was an executive at U.S. Trust Company of New York for 24 years, where she rose to the position of Managing Director. Her responsibilities at U.S. Trust included the oversight of U.S. Trust’s personal banking business. In addition to her managerial and banking experience, Ms. McNamara has experience in advising individuals on their personal financial management, which has given her an enhanced understanding of the goals and expectations that individual investors may have. Ms. McNamara is also a director/trustee of open-end and closed-end funds managed by Virtus affiliates.
R. Keith Walton
Mr. Walton’s business and legal background, and his extensive service with other boards, provide valuable insight to the Board and its committees regarding corporate governance and best practices. He is an honors graduate of Yale University and the Harvard Law School. Mr. Walton was a Director of Systematica Investments Limited Funds (2006 to 2019) and a Director of BlueCrest Capital Management Funds (2006 to 2017). He is also a Partner at Global Infrastructure Partners (since 2006) and served as the Managing Director at Lafayette Square Holding Company LLC (2020 to 2021). Mr. Walton is also a director/trustee of open-end and closed-end funds managed by Virtus affiliates.
Brian T. Zino
Mr. Zino, currently retired, was employed by J. & W. Seligman and Co. Inc., a privately held New York City investment firm managing Closed End Investment Companies, a family of mutual funds, institutional accounts and operating a trust company (1982 to 2009). For the last 15 of those years, he served as president and CEO of Seligman. His extensive mutual fund, financial and business background and years of service as a director of a large non-affiliated family of both open- and closed-end funds bring valuable skills and business judgment to the Board and its committees. Mr. Zino is also a certified public accountant and has an extensive background in accounting matters relating to investment companies. He also served as a Director (1998 to 2009), Chairman (2002 to 2004) and Vice Chairman (2000 to 2002) on the board of the ICI Mutual Insurance Company and as a Member of the Board of Governors of ICI (1998 to 2008). Mr. Zino is also a director/trustee of open-end and closed-end funds managed by Virtus affiliates.
Compensation of Current Trustees
The Nominees who are currently Trustees or Advisory Board Members received the compensation set forth in Appendix C attached to this Proxy Statement. Mr. Aylward receives no compensation from the Trust.
Trustee/Nominee Ownership of Securities
Set forth in Appendix D attached to this Proxy Statement for each Trustee and Nominee is a dollar range of equity securities of the Trust, together with the aggregate dollar range of equity securities in certain registered investment companies, including the Trust, managed by VIA or an affiliate and held out to investors as related companies for purposes of investment and investor services (the “Virtus funds complex”), as of March 31, 2022.
Shareholder Communications with Board and Trustee Attendance at Annual Meetings of Shareholders
Any shareholder who wishes to send a communication to the Board should send the communication to the attention of the Trust’s Secretary at One Financial Plaza, Hartford, CT 06103. If a shareholder wishes to send a communication directly to an individual Trustee or to a Committee of the Board, then the communication should be specifically addressed to such individual Trustee or Committee and sent in care of the Trust���s Secretary at the same address.
After reviewing the communication, the Trust’s Secretary will then immediately forward the communication to the Board. Communications to
individual Trustees or to a Committee sent in care of the Trust’s Secretary will be immediately forwarded to the individual Trustee or to the Committee, as applicable.
The Trust is not required to hold annual meetings of shareholders. However, if a shareholder meeting is held, it is the policy of the Trust to encourage Trustee attendance at such meetings in person or by teleconference.
Required Vote
All Nominees receiving a plurality of the votes cast by shareholders of the Trust will be elected as Trustees of the Trust. Under a plurality vote, the candidates who receive the highest number of votes will be elected, even if they receive approval from less than a majority of the Independentvotes cast. Because the Nominees are running unopposed, all seven Nominees are expected to be elected as Trustees, specifically approved its continuance at least annually. as all Nominees who receive votes in favor will be elected, while votes not cast or votes to withhold will have no effect on the election outcome.
PROPOSAL 2: APPROVAL OF A PROPOSAL TO PERMIT VIA TO
HIRE AND REPLACE SUBADVISERS OR TO MODIFY
SUBADVISORY AGREEMENTS WITHOUT
SHAREHOLDER APPROVAL, AND TO PERMIT THE SERIES TO DISCLOSE ADVISORY AND SUBADVISORY FEE INFORMATION IN AN AGGREGATED MANNER
(TO BE VOTED UPON BY SHAREHOLDERS OF EACH SERIES VOTING SEPARATELY)
Introduction
The Previous Subadvisory Agreement was subjectTrust operates under a structure where the Series’ day-to-day investments are managed by subadvisers, and VIA oversees the administration of the Series and the subadvisers. Under a current existing exemptive order issued by the SEC (discussed in more detail below), one of VIA’s duties is to termination byrecommend to the Board of Trustees, includingthe Trust, if conditions warrant, the reallocation of assets managed by a majoritysubadviser or to recommend a subadviser’s hiring, termination or replacement, if VIA deems it appropriate to achieve the overall objectives of a Series. The Trust proposes that VIA, subject to approval of its Board and certain conditions, be permitted to, without obtaining the Independent Trustees, or by the voteprior approval of a majority of the outstanding voting securities of the Series as is otherwise required by Section 15 of the 1940 Act: (i) select affiliated, whether partially or wholly-owned, and unaffiliated investment advisers (“Subadvisers”) to manage all or a portion of the assets of a Series and enter into subadvisory agreements with Subadvisers, and (ii) materially amend subadvisory agreements with Subadvisers. The Trust further proposes that a Series be permitted to disclose advisory and subadvisory fee information in an aggregated manner.
For these purposes, an unaffiliated Subadviser is an investment subadviser for a Series that is not an affiliate of the Series or VIA, which means that (a) it does not control and is not owned or controlled by the same parent of the Trust or VIA, (b) it does not own or control 5% of the outstanding voting shares of any Series or VIA, or (c) a Series or VIA does not own or control 5% of its outstanding voting shares (an “Unaffiliated Subadviser”). A partially-owned Subadviser for a Series means a subadviser which is partially-owned (meaning an entity that owns or controls a portion of the equity of another entity, either directly or indirectly through other subsidiaries) by VIA, a sister company of VIA, which is itself wholly-owned by a company that wholly owns VIA (“Partially-Owned Subadviser”), or DPIM, in each case upon 30 days’ written notice,a parent company of VIA. Furthermore, a wholly-owned Subadviser for a Series means a subadviser which is wholly-owned (meaning an entity that owns or controls all of the equity of another entity, either directly or
indirectly through other subsidiaries) by either VIA or a sister company of VIA, which is itself wholly-owned by a company that wholly owns VIA (a “Wholly-Owned Subadviser”). Partially-Owned Subadvisers and would terminate automatically in the event of its assignment or in the event that the Advisory Agreement betweenWholly-Owned Subadvisers together are “Affiliated Subadvisers.”
As described further below, VIA and the Trust currently have the authority, with respect to the Series, was terminated.to hire, terminate or replace Wholly-Owned Subadvisers and Unaffiliated Subadvisers or materially amend subadvisory agreements with such Wholly-Owned Subadvisers or Unaffiliated Subadvisers without prior shareholder approval under the current exemptive order, and are seeking similar authority with respect to Partially-Owned Subadvisers.
The Previous Subadvisory Agreement obligated DPIM to: (i) make investment decisions on behalfCurrent Applicable Exemptive Orders
VIA and the Trust have an exemptive order (the “First Order”) issued September 29, 2008, by the SEC that grants exemptions from certain provisions of the Series; (ii) place all orders for1940 Act. Pursuant to the purchaseFirst Order, VIA may, with respect to a Series and salesubject to supervision and approval of investmentsthe Board, enter into and materially amend subadvisory agreements with Unaffiliated Subadvisers without such agreements being approved by the shareholders of the Series. The Trust and VIA therefore, with approval from the Board, have the right to hire, terminate, or replace Unaffiliated Subadvisers and modify or amend their subadvisory agreement without shareholder approval. VIA continues to have the ultimate responsibility to oversee the subadvisers and recommend their hiring, termination and replacement to the Board. Within 90 days of the hiring of any new Unaffiliated Subadviser for the Series with brokers or dealers selected by DPIM; (iii) be responsible for voting (or refraining from voting) all proxies for portfolio securities in accordance with policies and procedures adopted byunder the First Order, shareholders of the Series or by DPIM and approved by VIA; and (iv) perform certain limited related administrative functionswould be furnished with all information about the new subadviser that would have been in connection therewith.
The Previous Subadvisory Agreement also generally provided that, absent willful misfeasance, bad faith, gross negligence, or reckless disregard of obligations or duties under the Agreement on the part of DPIM, DPIM would not be liable for any act or omission in the course of, or connected with, rendering services under the Previous Subadvisory Agreement.
Under the Previous Subadvisory Agreement, the Adviser paid a subadvisory fee to DPIM, consisting of a fee computed at the rate of 50%proxy statement seeking shareholder approval of the netnew subadviser. However, the First Order does not permit the Trust or VIA, with respect to the Series, to enter into and materially amend subadvisory agreements with any subadvisers that are affiliated with the Trust or VIA without prior shareholder approval. In addition, the First Order does not permit the Series to disclose advisory feefees paid by the Series to VIA and the Adviser. For the fiscal year ended December 31, 2018, the Adviser paid DPIM $652,269 in aggregate subadvisory fees paid by VIA to Wholly-Owned Subadvisers for its services with regard to the Series which wason an effective rateaggregate basis, but rather must disclose the amounts paid to each individually.
Shareholders of 0.38% of net assetsall the Series approved the ability for VIA to rely on the First Order.
VIA and the Trust have also received an exemptive order (the “Enhanced Order”), issued October 25, 2016, by the SEC that supersedes the First Order and allows VIA and the Trust, subject to certain conditions and with the approval of the Series.Board, to do the following without obtaining prior approval from shareholders of a Series:
The Interim Subadvisory Agreement(a)
to also engage or retain Wholly-Owned Subadvisers, in addition to Unaffiliated Subadvisers;
(b)
to subsequently change such Subadvisers; or
(c)
to continue the employment of existing Subadvisers after events that under the 1940 Act and the relevant subadvisory agreements would otherwise cause an automatic termination of the subadvisory agreements.
In addition, the Enhanced Order permits a Series to disclose its advisory fees as follows:
(a)
advisory fees paid by a Series to VIA and the subadvisory fees paid by VIA to Wholly-Owned Subadvisers for the Series may be disclosed on an aggregate basis, rather than disclosing the amounts paid to each individually;
(b)
subadvisory fees paid by VIA to multiple Unaffiliated Subadvisers for a Series may be disclosed on an aggregate basis, rather than disclosing the amounts paid to each Unaffiliated Subadviser individually; and
(c)
subadvisory fees paid by VIA to affiliated subadvisers that are not Wholly-Owned Subadvisers would continue to be disclosed for each affiliated subadviser individually.
Shareholders of all the Series approved the ability for VIA to rely on the Enhanced Order.
The terms ofSEC has issued a no-action letter that would permit a Series to apply the Interim Subadvisory Agreementsame relief in the First Order and the Subadviser’s obligations thereunder are substantially similar to the Previous Subadvisory Agreement, except for the effective date and term of the Agreement, and certain other immaterial exceptions. The Interim Subadvisory Agreement provides that it will remain in effect for no greater than 150 days or until a new subadvisory agreement is entered intoEnhanced Order with respect to any existing and future Partially-Owned Subadvisers, in addition to Unaffiliated Subadvisers and Wholly-owned Subadvisers, if approved by shareholders. This proposal seeks shareholders’ approval to apply this expanded relief to each Series.
If this proposal is approved by shareholders, VIA and the Series. The Interim Subadvisory AgreementTrust generally intends to rely on the expanded relief under the no-action letter and to comply with its conditions which are summarized below. If, however, after this proposal is approved by shareholders the expanded relief is rescinded, VIA and the Trust intends to rely on the Enhanced Order and to comply with its conditions which are summarized below.
VIA and the Trust would be permitted, subject to certain conditions and with the approval of the Board, to do the following without obtaining prior approval from shareholders of a Series:
(a)
to also engage or retain Partially-Owned and Wholly-Owned Subadvisers, in addition to Unaffiliated Subadvisers (or only Wholly-Owned and Unaffiliated Subadvisers if the no-action letter is rescinded);
(b)
to subsequently change such Subadvisers; or
(c)
to continue the employment of existing Subadvisers after events that under the 1940 Act and the relevant subadvisory agreements would otherwise cause an automatic termination of the subadvisory agreements.
In addition, the expanded exemptive relief would permit a Series to disclose its advisory fees as follows (collectively, the “Aggregate Fee Disclosure”):
(a)
advisory fees paid by the Series to VIA and the subadvisory fees paid by VIA to Wholly-Owned Subadvisers for the Series may be terminated atdisclosed on an aggregate basis, rather than disclosing the amounts paid to each individually; and
(b)
subadvisory fees paid by VIA to multiple Partially-Owned and Unaffiliated Subadvisers for the Series may be disclosed on an aggregate basis, rather than disclosing the amounts paid to each Partially-Owned and Unaffiliated Subadviser individually (or to only Wholly-Owned and Unaffiliated Subadvisers if the no-action letter is rescinded).
The hiring of, replacement of, or changing of a subadvisory agreement with, such Subadvisers would no longer require approval by shareholders of a Series. However, any time, withoutsubadvisory agreement or amendment to the payment of any penalty,Series’ existing agreement that directly or indirectly results in an increase in the aggregate advisory fee rate payable by the Series must be submitted to the Series’ shareholders for approval.
Even if shareholders approve this arrangement, approval by the Board, of Trustees, including a majority of the Independent Trustees, will still be required to engage a new Subadviser, terminate a Subadviser, or bychange any subadvisory agreement. For a Series to rely upon the vote of a majorityexpanded relief, it must comply with the conditions of the outstanding voting securitiesno-action letter as summarized below.
Before a Series may rely on the expanded relief, its use must be approved by a Majority Vote of the Series, or by VIA or SGA, upon thirty (30) days’ prior written notice. The Interim Subadvisory Agreement will also terminate automatically in the event of its assignment or in the event that the Advisory Agreement between VIASeries’ shareholders, and the Series is terminated.
The New Subadvisory Agreement
The terms of the new Subadvisory Agreement and the Subadviser’s obligations thereunder are substantially similar to the Previous Subadvisory Agreement, except for the subadviser, the effective date and term of the Agreement, and certain other non-material exceptions. The Subadvisory Agreement providesmust disclose in its prospectus that it will remain in effect until for an initial period of two years,relies on the expanded relief, and thereafter for successive periods of one year only so long asthat the Board of Trustees, including a majority ofAdviser has the Independent Trustees, specifically approves its continuance at least annually. The Subadvisory Agreement would beultimate responsibility, subject to terminationoversight by the Board, to oversee and recommend the hiring, termination and replacement of Trustees, including a majority of the Independent Trustees, or by the vote of a majority of the outstanding voting securities of the Series, or by VIA or the Subadviser, upon sixty (60) days’ written notice and would terminate automatically in the event of its assignment and/or in the event of termination of the Series’ Advisory Agreement with VIA.
Like the Previous Subadvisory Agreement, the Subadvisory Agreement would generally provide that, absent willful misfeasance, bad faith, gross negligence, or reckless disregard of obligations or duties under the Agreement on the part of SGA, SGA would not be liable for any act or omission in the course of, or connected with, rendering services under the Subadvisory Agreement; however, SGA would be responsible for any losses arising out of or resulting from a “trade error” caused by the negligent action or negligent omission of SGA or an agent of SGA.Subadvisers.
Subadvisory Fee
Under the Subadvisory Agreement, VIA will continue to pay the same subadvisory fee as under the Previous Subadvisory Agreement. VIA will pay a subadvisory fee to SGA at the rate of 50% of the net advisory fee paid by the Series. The advisory fee paid to VIA by the Series is 0.75% for the first $250 million of net assets, 0.70% for the next $250 million, and 0.65% for amounts greater than $500 million. This is identical to the fee under the Previous Subadvisory Agreement, so there will be no change to either the advisory or subadvisory fee under the Subadvisory Agreement. The fees paid under the Previous Subadvisory Agreement for the last fiscal year are identical to what would have been paid if the Subadvisory Agreement would have been in effect over that time period. The fees shall be prorated for any month during which the Subadvisory 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 Series shall be calculated as set forth in the then current registration statement of the Series.
As with the Previous Subadvisory Agreement, the Series does not pay the subadvisory fee under the Subadvisory Agreement. The Advisory Agreement between the Trust and the Adviser relating to the Series remains in effect and the fees payable to the Adviser by the Series under the Advisory Agreement will not change, so there is no increase in the management fees paid by the Series as a result of the subadvisory fees paid under the Subadvisory Agreement.
INFORMATION ABOUT VIA
VIA is located at One Financial Plaza, Hartford, Connecticut 06103. VIA is a wholly-owned subsidiary of Virtus Partners, Inc., which is a wholly-owned subsidiary of Virtus Investment Partners, Inc. (“Virtus”), all of which are located at One Financial Plaza, Hartford, Connecticut 06103. Virtus is an independent, publicly traded financial services company, which, through its affiliates, provides asset management and related services to individuals and institutions. As of December 31, 2018, Virtus’ affiliated investment advisers had in aggregate approximately $92 billion in assets under management.
VP Distributors, LLC (“VP Distributors”), another wholly-owned indirect subsidiary of Virtus, serves as the national distributor of the Trust’s shares. The Series paid VP Distributors $428,746 during the last fiscal year for performing distribution services for the Series. The principal office of VP Distributors is located at One Financial Plaza, Hartford, Connecticut 06103.
Virtus Fund Services, LLC (“Virtus Fund Services”), another wholly-owned indirect subsidiary of Virtus, serves as the administrative agent for the Trust. The Series paid Virtus Fund Services $162,580 during the last fiscal year for performing these services for the Series. The principal office of Virtus Fund Services is located at One Financial Plaza, Hartford, Connecticut 06103.
VIA acts as the investment adviser for over 50 mutual funds and as adviser to institutional clients. VIA has acted as an investment adviser for over 80 years. As of December 31, 2018, VIA had approximately $26.6 billion in assets under management. For the fiscal year ended December 31, 2018, VIA was paid $1,304,538 in net aggregate investment advisory fees for its services with regard to the Series.
VIA does not currently serve as investment adviser to any funds or accounts that are managed similarly to the Series.
George Aylward, Kevin J. Carr, Jennifer Fromm and Frank Waltman, each serve as an officer of the Trust and as an officer and/or director of VIA. The other principal executive officers and directors of VIA are: Michael Angerthal, Executive Vice President, Chief Financial Officer and a Director; Mark Flynn, Executive Vice President, General Counsel and Assistant Clerk; David Fusco, Vice President and Chief Compliance Officer; and David Hanley, Senior Vice President and Treasurer. The address of each such individual is VIA’s address listed above.
For the year ended December 31, 2018, the Series paid $184,477 in brokerage commissions. No brokerage commissions were paid by the Series to any affiliated broker of VIA or SGA.
INFORMATION ABOUT THE SUBADVISER
Sustainable Growth Advisers, LP, a majority owned affiliate of Virtus, is located at 301 Tresser Boulevard, Suite 1310, Stamford, CT 06901. SGA was co-founded by George P. Fraise, Gordon M. Marchand, and Robert L. Rohn in 2003. SGA is a registered investment advisor and provides investment advice to institutional and individual clients, private investment companies and mutual funds. SGA manages approximately $12.5 billion as of March 31, 2019, of which $10.8 billion is regulatory assets under management and $1.7 billion is model/emulation assets under contract.
The following individuals are jointly and primarily responsible for the day-to-day management of the Series’ investments, and serve as portfolio managers of the Series under the Interim Subadvisory Agreement andAdviser will continue to servehave overall supervisory responsibility for the general management and investment of each Series’ assets. Subject to the Board’s review and approval, the Adviser will set the Series’ investment strategies; evaluate, select and recommend Subadvisers to the Series; and implement procedures reasonably designed to ensure subadvisers comply with the Series’ investment objective, policies and restrictions. The Adviser will also monitor and evaluate the performance of Subadvisers, and inform shareholders of the hiring of a new Subadviser within 90 days of such hiring. The Series may not, however, enter into a new or amended subadvisory agreement with any Subadviser that results in an increase in the Series’ advisory fee without first receiving shareholder approval.
At least a majority of each Board will be Independent Trustees at all times, and independent legal counsel, as portfolio managersdefined in Rule 0-1(a)(6) under the Subadvisory Agreement:
•
Tucker Brown. Mr. Brown is an Analyst, a Research Principal, a Portfolio Manager,1940 Act, will be engaged to represent the Independent Trustees. The selection and a membernomination of new or additional Independent Trustees, and the selection of independent legal counsel, will be within the discretion of the firm’s Investment Committee. Prior to joining SGA in 2006, Mr. Brown wasthen-existing Independent Trustees.
When a Vice President inSubadviser is hired or terminated, the Equity Research Department of Goldman Sachs, where he served as a memberAdviser must provide the Board with information about the profitability of the firm’s U.S. packaged food research team. Previously, he worked in the Investment Banking Division of Goldman Sachs, focused on M&A and corporate finance advisory for clients in retail and technology sectors. Mr. Brown began his career as a fund accountant and custody manager at Brown Brothers Harriman & Co.
•
Alexandra Lee. Ms. Lee is an Analyst, a Research Principal, a Portfolio Manager, and a member of the firm’s Investment Committee. Prior to joining SGA in March 2004, Ms. Lee was an Associate Director and an equity analyst at Bear Stearns, covering large cap biotechnology companies, and a member of the global healthcare research team. Previously, she worked as an equity research analyst at JP Morgan in the life sciences technology group, and as a management consultant at the Boston Consulting Group. Ms. Lee also has a medical degree from Yonsei University in Seoul, Korea.
•
Gordon M. Marchand, CFA, CPA, CIC. Mr. Marchand is a Founding Principal, an Analyst, a Portfolio Manager, a member of the firm’s Investment Committee and a member of the firm’s Advisory Board. Prior to co-founding SGA in 2003, Mr. Marchand was an executive officer, a member of the Investment Policy Committee and a member of the Board of Directors at Yeager, Wood & Marshall, Inc., a registered investment advisor, from 1984 to 2003. He was also that firm’s Chief Operating and Financial Officer. Mr. Marchand began his career as a management consultant for Price Waterhouse. He is a CFA® charterholder, a Chartered Investment Counselor (“CIC”) and a Certified Public Accountant (“CPA”). Mr. Marchand is past Chairman, President and a member of the Governing Board of the Investment Adviser Association.
The following persons serve as the principal executive officers of the Subadviser at the address for the Subadviser listed above:
Name | | | Principal Occupation At Sustainable Growth Advisers, LP | |
George P. Fraise | | | Founding Principal & Executive Committee Member | |
Gordon M. Marchand | | | Founding Principal & Executive Committee Member | |
Robert L. Rohn | | | Founding Principal & Executive Committee Member | |
Daniel Callaway | | | Chief Compliance Officer and General Counsel | |
Peter Seuffert | | | Chief Operating Officer | |
The Subadviser currently serves as investment subadviserwith respect to the following registered fund that hasSeries. In addition, when a similar investment objective andSubadviser change is managed similarly to the Series.
Name | | | Total Assets Under
Management
(as of May 31, 2019) | | | Subadvisory Fee | |
Virtus Asset Trust – SGA International Growth Fund | | | $104.4 million | | | 50% of the net
advisory fee | |
The above named fund operates under a contractual expense limitation arrangement with its adviser (an affiliate of VIA), under which SGA contributes its proportionate amount of the subadvisory fee for any amount of the advisory fee that is waived by the fund’s adviser.
Investment Strategies and Risk Changes
The Board believes that Series shareholders can benefit from management of the Series’ assets by the Subadviser through the application of its International Growth Equity Strategy. The Subadviser’s strategy invests in companies that it believes have a high degree of predictability, strong profitability and above average earnings and cash flow growth. The Subadviser selects investments for the Series’ portfolio that it believes have superior long-term earnings prospects and attractive valuation. The Subadviser may also consider certain environmental, social, and governance (“ESG”) factors, in addition to including the use of analysis and rankings from third-party ESG research providers.
The Board noted that the investment objective of the Series will not change, although the Subadviser will manage the Series using different strategies with similar risk factors. Both are bottom-up fundamental stock pickers looking for superior growth with attractive valuations, however, DPIM is also informed by top-down macro views while SGA may also consider certain ESG factors. The principal risks may also be described differently because there are certain investment strategies that, while previously also permittedproposed for the Series SGA has determined are principal
strategies and thereforein reliance on the related risksexpanded relief, the Board will evaluate any material conflicts that may be deemed principal risks of investingpresent in the Series. Further, due to SGA’s growth focus SGA does not anticipateproposed subadvisory arrangement and make a separate finding that value stocks will be primary investments for the Series, and SGA does not anticipate derivative investments to be primary investments of the Series. Following is a comparison of the Series’ investment strategies upon(i) the change from DPIM to the Subadviser:
DPIM | | | Subadviser | |
Under normal circumstances, the Series invests at least 80% of its assets in equity securities of issuers located outside of the United States. The Series invests primarily in developed countries, but may also invest in issuers located in emerging market countries. The subadviser seeks to diversify its portfolio from a variety of sectors and countries, and typically invests in the securities of medium to large capitalization companies, but is not limited to investing in the securities of companies of any particular size. The Series will primarily hold securities of companies listed on a foreign securities exchange or quoted on an established foreign over-the-counter market, or American Depository Receipts (ADRs). In determining the “location” of an issuer, the subadviser primarily relies on the country where the issuer is incorporated. However, the country of risk is ultimately determined based on analysis of the following criteria: actual building address (domicile), primary exchange on which the security is traded and country in which the greatest percentage of company revenue is generated. This evaluation is conducted so as to determine that the issuer’s assets are exposed to the economic | | | The Series will invest in securities of issuers located throughout the world. Under normal circumstances, the Series will invest at least 80% of its assets in equity securities of issuers organized, headquartered or doing a substantial amount of business outside the U.S. As of the date of this prospectus, the Series’ subadviser, Sustainable Growth Advisers, LP (“SGA”), considers an issuer that has at least 50% of its assets or derives at least 50% of its revenue from business outside the U.S. as doing a substantial amount of business outside the U.S.
The Series’ policy of investing 80% of its assets in foreign equity securities may be changed only upon 60 days’ written notice to shareholders.
SGA uses an investment process to identify companies that it believes have a high degree of predictability, strong profitability and above average earnings and cash flow growth. SGA selects investments for the Series’ portfolio that it believes have superior long-term earnings prospects and attractive valuation. SGA may also consider certain environmental, social, and governance (“ESG”) factors, in addition to including the use of analysis and rankings from third-party ESG research providers. The Series’ equity investments may include common stocks, preferred stocks, securities convertible into or
| |
DPIM | | | Subadviser | |
fortunes and risks of the designated country. The Series’ policy of investing 80% of its assets in foreign equity securities may be changed only upon 60 days’ written notice to shareholders.
The Series seeks to provide investors with access to high-quality international businesses selling at attractive valuations. Ideally these companies are not only growing their earnings but are also creating economic value by maintaining or growing their return on invested capital. The subadviser’s process is driven by bottom-up fundamental research and informed by top-down macro views, with an expectation that a significant proportion of any long-term performance will come from security selection. In evaluating securities for inclusion in the Series, the subadviser applies a cash flow based approach to valuation, as well as additional fundamental research to assess the economic value added, financial strength, franchise quality, and management alignment of individual companies. Top-down macro research is utilized to assess the market environment, and to assist with regional, country, and sector allocations. As part of the macro process, the subadviser takes into account, among other things, monetary policy, political factors, economic growth, and valuation. The subadviser believes this approach produces long-term investment returns characterized by
| | | exchangeable for common stocks, and depositary receipts. The Series may invest in companies of all market capitalizations. The Series will allocate its assets among various regions and countries, including emerging markets. From time to time, the Series may have a significant portion of its assets invested in the securities of companies in only a few countries or regions. Although the Series seeks investments across a number of sectors, from time to time, the Series may have significant positions in particular sectors.
SGA will sell a portfolio holding when it believes the security’s fundamentals deteriorate, its valuation is no longer attractive, or a better investment opportunity arises.
The Series’ investment objective is non-fundamental, which means it may be changed without shareholder approval.
| |
DPIM | | | Subadviser | |
low absolute volatility and downside protection.
In determining which portfolio securities to sell, the subadviser considers, among other things, whether a security has become fully valued, if there has been a material change in the assessment of the company’s fundamentals or original thesis, the stock is not acting as expected, there is a better alternative available, and/or a portfolio rebalancing.
The Series’ investment objective is non-fundamental, which means it may be changed without shareholder approval.
| | | | |
Under the Subadviser’s management, the principal risk descriptions of the Series would change. The following are now principal risks:
Convertible Securities Risk. The risk that the value of a convertible security held by the Series will decline as interest rates rise and/or vary with fluctuations in the market value of the underlying securities, or that the security will be called for redemption at a time and/or price unfavorable to the Series.
Currency Rate Risk. The risk that fluctuations in the exchange rates between the U.S. dollar and foreign currencies may negatively affect the value of the Series’ shares.
ESG Consideration Risk. The risk that the Series’ consideration of ESG factors results in the Series’ forgoing opportunities to buy certain securities when it might otherwise be advantageous to do so, or selling securities for ESG reasons when it might be otherwise disadvantageous for it to do so, or that the companies identified by the ESG factors do not operate as expected when addressing ESG issues.
Geographic Concentration Risk. The risk that events negatively affecting the geographic location where the Series focuses its investments will cause the value of the Series’ shares to decrease, perhaps significantly.
Growth Stocks Risk. The risk that the Series investments in growth stocks will be more volatile than investments in other types of stocks, or will perform differently from the market as a whole and from other types of stocks.
Large Market Capitalization Companies Risk. The risk that the value of investments in larger companies may not rise as much as smaller companies, or that larger companies may be unable to respond quickly to competitive challenges, such as changes in technology and consumer tastes.
Preferred Stock Risk. The risk that a preferred stock will decline in price, fail to pay dividends when expected, or be illiquid.
Sector Focused Investing Risk. The risk that events negatively affecting a particular market sector in which the Series focuses its investments will cause the value of the Series’ shares to decrease, perhaps significantly.
Small and Medium Market Capitalization Companies Risk. The risk that the Series’ investments in small and medium market capitalization companies will increase the volatility and risk of loss to the Series, as compared with investments in larger, more established companies.
In addition, “Derivatives Risk” and “Value Stocks Risk” are no longer principal risks of investing in the Series.
Basis for the Board’s Recommendation
In evaluating, approving and recommending to the Series’ shareholders that they approve this proposal, the Board of Trustees requested and evaluated information provided by VIA and the Subadviser which, in the Board’s view, constituted information necessary for the Board to form a judgment as to whether entering into the Subadvisory Agreement with the Subadviser would be in the best interests of the Series and its shareholders. Priorshareholders, and (ii) the change does not involve a conflict of interest from which the Adviser or Subadviser receives an inappropriate advantage.
Lastly, if the SEC adopts a rule under the 1940 Act that provides substantially similar relief that the expanded relief provides, the expanded relief will expire on the effective date of that rule.
The Board has concluded that, by approving this proposal, shareholders will afford a Series the opportunity to making its final decision,forego the Independent Trustees metcostly expense of, and unnecessary delays associated with, their independent counselproxy solicitations due to discuss the information provided.
In their deliberations, the Trustees did not identify any particular information that was all-important or controlling, and each Trustee may have attributed different weights to the various factors. In recommending thatnecessary Subadviser changes. Therefore, if shareholders approve this proposal, they could benefit from potential cost savings to the Trustees considered various factors, including:
•
Series, as well as allowing VIA to act more quickly to change Subadvisers after it has determined that such a change would be in the nature, extent and qualitybest interest of the services to be provided by the Subadviser with respect to international growth equity investments. The Trustees reviewed biographical information for the portfolio managers who would be providing services under the Subadvisory AgreementSeries and noted their depth of experience;
its shareholders.
•
the rate of the investment subadvisory fee that would be paid by VIA (and not the Series) under the Subadvisory Agreement, and the advisory fee paid by the Series, both of which would remain unchanged from the fees paid under the Advisory Agreement and Previous Subadvisory Agreement. The Trustees noted that the Adviser would remain subject to a contractual expense limitation agreement that limits total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) of the Series to 1.18% and 0.93%, on an annualized basis, for Class A and Class I shares, respectively, until at least April 30, 2020;
•
the performance results of the SGA International Growth Composite as managed by the Subadviser in a manner identical to the Series, which would have outperformed the MSCI EAFE Index (net) for the 1- and 3-year periods ended March 31, 2109 and since its inception on March 1, 2015. It also outperformed the Series as managed by DPIM over the same periods; and
•
the fact that there are no other tangible benefits to the Subadviser in providing investment advisory services to the Series, other than the fee to be earned under the Subadvisory Agreement. There may be certain intangible benefits gained to the extent that serving the Series could enhance the Subadviser’s reputation in the marketplace, and, therefore, would enable the Subadviser to attract additional client relationships.
In considering the profitability to the Subadviser of its relationship with the Series and the profitability to VIA from its affiliation with the Subadviser, the Board noted that the fees under the Subadvisory Agreement were paid by VIA out of the advisory fees that it receives under the Advisory Agreement. In considering the reasonableness of the fees payable by VIA to SGA, the Board noted that, as an affiliate of VIA, such profitability to SGA might be directly or indirectly shared by VIA, and therefore the Board considered the profitability of VIA and SGA together. The Board noted that the subadvisory fees would be paid at the same level as under the Previous Subadvisory Agreement. For these reasons, the profitability to the Subadviser of its relationship with the Series was not a material factor in the Board’s deliberations at this time.
In addition, the Board noted that the management fees for the Series included breakpoints based on assets under management, and that the contractual expense limitation would also remain in place. The Board also took into account the current size of the Series, and noted that the Series may realize certain economies of scale if the assets of the Series were to increase and that shareholders of the Series would have an opportunity to benefit from these economies of scale. The Board did not otherwise consider the potential economies of scale in the Subadviser’s management of the Series to be a material factor in its consideration at this time. Based on all of the foregoing reasons, the Board concluded that the proposed Subadvisory Agreement was favorable for shareholders because shareholders could benefit from management of the Series’ assets by the Subadviser.
Required Vote
Approval of the Subadvisory Agreement with the Subadviserthis Proposal requires the affirmative vote of a majority of the outstanding voting securities of each Series, voting separately at the SeriesSeries-level with bothall of the Series’ share classes voting together. Under the 1940 Act, a majority of the Series’ outstanding voting securities is defined as the lesser of (1) 67% of the outstanding shares represented at a meeting at which more than 50% of the Series’ outstanding shares are present in person or represented by proxy or (2) more than 50% of the SeriesSeries’ outstanding voting securities.
securities (a “Majority Vote”). Proposal 2 will be implemented for each Series for which the required shareholder vote is obtained, even if certain other Series do not approve the proposal. If thea Series’ shareholders do not approve this proposal, andthat Series would continue to rely on the new Subadvisory Agreement is not approved, theEnhanced Order.
The Trust’s Auditor
The Board of Trustees, including a majority of the Independent Trustees, has approved the selection of PricewaterhouseCoopers LLP (“PwC”) as the independent accountants for the Trust’s fiscal year. The Trust’s fiscal year end is December 31.
PwC has extensive experience in investment company accounting and auditing and has served as independent accountant for the Trust for many years. PwC examines the financial statements included in the Trust’s Annual Reports. It is not expected that representatives of PwC will considerbe present at the optionsMeeting, and, therefore, they will not be making a statement and will not be available to respond to questions.
The SEC’s auditor independence rules require the Audit Committee to pre-approve (a) all audit and permissible non-audit services provided by a Series’ independent accountants directly to the Series and (b) those permissible non-audit services provided by a Series’ independent accountants to the Series’ investment advisers and any entity controlling, controlled by or under common control with the investment advisers that provides ongoing services to the Series (the “Affiliated Service Providers”), if the services relate directly to the operations and financial reporting of the Trust.
The aggregate fees billed by PwC for the indicated services rendered to the Trust for the last two fiscal years was:
| | | | Audit Fees | | | Audit-Related Fees | | | Tax Fees | | | All Other Fees | |
| | | | 2020 | | | 2021 | | | 2020 | | | 2021 | | | 2020 | | | 2021 | | | 2020 | | | 2021 | |
Virtus Variable Insurance
Trust | | | | $ | 130,067 | | | | | $ | 159,020 | | | | | $ | 11,424 | | | | | $ | 8,877 | | | | | $ | 46,385 | | | | | $ | 23,525 | | | | | $ | 0 | | | | | $ | 0 | | |
“Audit-Related Fees” are those related to performance of the audit and review of the Trust’s financial statements not disclosed under “Audit Fees.”
“Tax Fees” are those primarily associated with review of the Trust’s tax provision and Registered Investment Company qualification in connection with audits of the Trust’s financial statements, review of year-end distributions by the Trust to avoid excise tax for the Trust, periodic discussion with management on tax issues affecting the Trust, and reviewing and signing the Trust’s federal income and excise tax returns.
“All Other Fees” are those fees billed for other products and services rendered by PwC to the Trust not included as Audit or Audit-Related or Tax Fees.
The Trust’s Board has adopted policies and procedures with regard to the pre-approval of services provided by PwC. Audit, audit-related and tax compliance services provided to the Trust on an annual basis require specific pre-approval by the Board. As noted above, the Board must also approve other non-audit services provided to the Trust and those non-audit services provided to the Trust’s Affiliated Service Providers that relate directly to the operations and financial reporting of the Trust. Certain of these non-audit services that the Board believes are a) consistent with the SEC’s auditor independence rules and b) routine and recurring services that will not impair the independence of the independent auditors may be approved by the Board without consideration on a specific case-by-case basis (“general pre-approval”).
The Audit Committee has determined that Ms. McDaniel, Chair of the Audit Committee, may provide pre-approval for such services that meet the above requirements in the best interestsevent such approval is sought between regularly scheduled meetings. In any event, the Board is informed of shareholders.
SHARE OWNERSHIP INFORMATION
Phoenix Life Insurance Company (“PLIC”) and PHL Variable Insurance Company (“PHL Variable”) provide variable insurance and annuity products, and are control personseach service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. During the last two fiscal years, 100% of the Series.non-audit services provided to each Trust were pre-approved by the Audit Committee under the policies and procedures described above.
PLIC (a New York insurance company)The percentage of hours expended by PwC on the audit of the Trust’s financial statements for the last completed fiscal year that were attributed to work performed by individuals other than PwC full-time, permanent employees was less than fifty percent.
The aggregate non-audit fees billed by PwC to the Trust’s Adviser and PHL Variable (a Connecticut insurance company) are direct, wholly owned subsidiaries of The Phoenix Companies, Inc. PLIC and PHL Variable are located at 31 Tech Valley Drive, East Greenbush, New York 12061.other Affiliated Services Providers for the Trust’s last two fiscal years were:
| | | | Aggregate Non-Audit Fees Billed | |
| | | | 2020 | | | 2021 | |
| Virtus Variable Insurance Trust | | | | $ | 57,809 | | | | | $ | 32,402 | | |
The following table sets forth informationAudit Committee has considered and determined that the provision of non-audit services provided to the Trust’s investment advisers and other Affiliated Service Providers that were not pre-approved in accordance with the Trust’s pre-approval policy is compatible with their auditor’s independence. PwC, the independent accountants for each classthe Trust’s most recently completed fiscal year, has confirmed to the Audit Committee that it is independent with respect to the Trust.
SHARE OWNERSHIP INFORMATION
Appendix E lists those shareholders who beneficially owned 5% or more of the outstanding shares of the Series as of the Record Date, with respect to each person who owns of record or is known by the Trust to own of record or beneficially own 5% or more of any class of the Series’ outstanding securities, as noted.Date.
| | | Name and Address | | | | Class | | | | Shares | | | | Percentage of
Class
Outstanding
(%) | | |
| | | PHL VARIABLE INSURANCE CO PHL VIC
C/O PETER HOSNER
31 TECH VALLEY DR
EAST GREENBUSH NY 12061-4134 | | | | A | | | | | | 8,995,134.76 | | | | | | | 68.84% | | | |
| | | PHOENIX LIFE INSURANCE CO PLIC C/O PETER HOSNER
31 TECH VALLEY DR
EAST GREENBUSH NY 12061-4134 | | | | A | | | | | | 3,863,167.38 | | | | | | | 29.56% | | | |
| | | VIRTUS PARTNERS INC
ATTN DAVID G HANLEY
ONE FINANCIAL PLAZA
HARTFORD CT 06103-4500 | | | | I | | | | | | 8,318.35 | | | | | | | 100% | | | |
As of the Record Date, the officers and Trustees of the Trust, as a group, owned beneficially or of record less than 1% of the outstanding shares of the Series.
PORTFOLIO TRANSACTIONS
The Trust doesSeries do not allocate portfolio brokerage on the basis of the sales of shares, although brokerage firms whose customers purchase Contracts which are funded by shares of the
Trust Series may receiveparticipate in brokerage commissions. The Trust doesSeries do not conduct portfolio transactions through affiliated brokers.
OTHER BUSINESS
The Board knowsof Trustees know of no other business to be brought before the Meeting. If other business should properly come before the meeting, the proxy holders will vote thereonthereupon in their discretion.
Under the provisions of the Trust’s charter documents and applicable law, no annual meeting of shareholders is required, and the Trust does not currently intend to hold such a meeting. Ordinarily, there will be no shareholder meeting unless required by the 1940 Act or otherwise. Shareholder proposals to be presented atfor inclusion in the proxy statement for any subsequent shareholder meeting of the Trust must be received by the Trust in care of the Trust’s Secretary at One Financial Plaza, Hartford, CT 06103, within a reasonable period of time before the Trust solicits proxies for that meeting in order forprior to any such proposals to be considered for inclusion in the proxy materials for thatshareholder meeting. Shareholders collectively holding at least 10% of the outstanding shares of the Trust may request a shareholder meeting at any time for the purpose of voting to remove one or more of the Trustees. The Trust will assist in communicating to other shareholders about such meeting.
PLEASE PROVIDE VOTING INSTRUCTIONSVOTE BY LOGGING ON AT THE INTERNET ADDRESS PROVIDED ON YOUR VOTING INSTRUCTION FORM(S)PROXY CARD OR BY TELEPHONE BY CALLING THE TOLL-FREE NUMBER LOCATED ON YOUR VOTING INSTRUCTION FORM(S)PROXY CARD OR BY COMPLETING THE ENCLOSED VOTING INSTRUCTION FORM(S)PROXY CARD(S) AND RETURNING THE CARD(S) BY JULY 29, 2019JUNE 27, 2022 IN THE ENCLOSED SELF-ADDRESSED, POSTAGE-PAID ENVELOPE.
By order of the Board of Trustees
| | | | | Name: Jennifer Fromm
Title: Secretary | |
| | | | Name: | | | Jennifer S. Fromm | |
| | | | Title: | | | Vice President, Chief Legal Officer
and Secretary Virtus Variable Insurance Trust | |
APPENDIX A
VIRTUS VARIABLE INSURANCE TRUST
Virtus SGA International Growth SeriesFUNDS1
FORM OF SUBADVISORY AGREEMENT(each, a “Fund” and together, the “Funds”)
[ ] [ ], 2019GOVERNANCE AND NOMINATING
COMMITTEE CHARTER
Sustainable Growth Advisers, LP
301 Tresser Blvd.
Suite 1310
Stamford, CT 06901Purpose
RE: Subadvisory Agreement
Ladies and Gentlemen:
Virtus Variable Insurance Trust (the “Trust”) is an open-end investment companyThe purposes of the series type registered underGovernance and Nominating Committee (the “Committee”) are: (1) to identify individuals qualified to become members of the Board of Trustees2 of the Funds (the “Board”) and to recommend that the Board select particular Trustee nominees; (2) to identify individuals qualified to become chairperson of the Board and to recommend that the Board select particular chairperson nominees; (3) to determine appropriate duties and membership of any Board committees; (4) to develop and recommend to the Board a set of governance principles applicable to the Funds; (5) to oversee annually the evaluation of the Board, this Committee and management of other committees of the Funds; and (6) to assist the Board in fulfilling its oversight responsibilities with respect to matters relating to the interests of the shareholders of each Fund.
Committee Composition
The Committee shall be composed of three (3) or more members of the Board, none of whom shall be an “interested person” (as such term is defined by section 2(a)(19) of the Investment Company Act of 1940, as amended (the “Act”“1940 Act”), and is subject to the rules and regulations promulgated thereunder. The shares) of the Trust are offered or may be offered in several series, including Virtus SGA International Growth Series (sometimes hereafter referred to as the “Series”).
Virtus Investment Advisers, Inc. (the “Adviser”) evaluates and recommends series advisers for the Series and is responsible for the day-to-day management of the Series.
1.
Appointment as a Subadviser. The Adviser, being duly authorized, hereby appoints Sustainable Growth Advisers, LP (the “Subadviser”) as a discretionary series adviser to invest and reinvest the assets of the Series designated by the Adviser as set forth on Schedule F attached hereto (the “Designated Series”) on the terms and conditions set forth herein. The services of the Subadviser hereunder are not to be deemed exclusive; the Subadviser may render services to others and engage in other activities that do not conflict in any material manner with the Subadviser’s performance hereunder.
2.
Acceptance of Appointment; Standard of Performance. The Subadviser accepts its appointment as a discretionary series adviser of the Designated Series and agrees, subject to the oversightFunds (such non-interested members of the Board, the “Independent Trustees”), and one of Trusteeswhom shall be the chairperson of the Trust (the “Board”) andBoard (provided that the Adviser, to use its best professional judgment to make investment decisionschairperson of the Board is an Independent Trustee). One member of the Committee shall serve as Chairperson. The Committee Chairperson shall be responsible for the Designated Series in accordance with the provisions of this Agreement and as set forth in Schedule D attached hereto and made a part hereof. The Subadviser shall for all purposes herein be deemed to be an independent contractor and shall, except as expressly provided or authorized (whether herein or otherwise), have no authority or obligation to act for or represent the Adviser, the Trust or the Series in any way.
1
The Virtus Funds include The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust, Virtus Alternative Solutions Trust, Virtus Asset Trust, Virtus Equity Trust, Virtus Investment Trust, Virtus Opportunities Trust, Virtus Retirement Trust, Virtus Strategy Trust and Virtus Variable Insurance Trust, Virtus Global Multi-Sector Income Fund, Virtus Total Return Fund Inc., Virtus Stone Harbor Emerging Markets Income Fund, and Virtus Stone Harbor Emerging Markets Total Income Fund.
2
Throughout this Charter, the term “Trustee” includes a Director of an investment company organized as a corporation.
3.
Servicesleadership of Subadviser. In providing management servicesthe Committee, including scheduling meetings, or reviewing and approving the schedule for them, preparing agendas or reviewing and approving them before meetings, presiding over meetings of the Committee and making reports to the Designated Series,Board, as appropriate. Once the Subadviser shall be subject to the investment objectives, policies and restrictions of the Trust as they apply to the Designated Series and as set forth in the Trust’s then current prospectus (“Prospectus”) and statement of additional information (“Statement of Additional Information”) filed with the Securities and Exchange Commission (the “SEC”) as part of the Trust’s registration statement (the “Registration Statement”), as may be periodically amended and provided to the Subadviser by the Adviser, and to the investment restrictions set forth in the Act and the Rules thereunder, to the supervision and control ofCommittee has been initially constituted, the Board and to instructions from the Adviser. The Subadviser shall not, without the Trust’s prior written approval, effect any transactions that would cause the Designated Series at the time of the transaction to be out of compliance with any of such restrictions or policies.
4.
Transaction Procedures. All series transactions for the Designated Series shall be consummated by payment to, or delivery by, the custodian(s) from time to time designatedreceive from the Committee recommendations regarding membership and chairpersonship of the Committee and shall appoint the members of the Committee and the Committee chairperson after receiving such recommendations. Other Trustees of the Funds, while not serving as members of the Committee, nonetheless may have a role in the nominating process by identifying and recommending potential candidates to the Committee for its consideration, and by otherwise assisting the Committee in the discharge of its responsibilities. Committee members shall serve at the pleasure of the Board for such term or terms as the Board may determine.
Structure, Operations and Governance
Meetings and Actions by Written Consent. The Committee shall meet as often as required and as the Committee considers appropriate, but no less frequently than annually. Meetings may be called and notice given by the Trust (the “Custodian”),Committee chairperson or such depositoriesa majority of the members of the Committee. Members may attend meetings in person or agents asby telephone. The Committee may act by written consent to the extent permitted by law and the Funds’ governing documents. The Committee shall maintain minutes or other records of its meetings and activities and report to the Board on any action it takes not later than the next following Board meeting.
Required Vote and Quorum. The affirmative vote of a majority of the voting members of the Committee participating in any meeting of the Committee is necessary for the adoption of any resolution. No resolution may be designatedadopted unless at least a majority of the voting members are present at the meeting in person or by telephone.
Appropriate Resources and Authority. The Committee shall have the Custodianresources and authority to discharge its responsibilities, including the authority to retain special counsel and other advisers, experts or consultants, at the Funds’ expense, as it deems necessary or appropriate to carry out its duties and responsibilities. In addition, the Committee shall have direct access to such officers of, and service providers to, the Funds, including subadvisers of the Funds, as it deems desirable.
Review of Charter. The Committee shall review and assess the adequacy of this Charter as necessary and, where necessary, will recommend changes to the Board for its approval. The Board may amend this Charter at any time in writing, of all cash and/or securities dueresponse to orrecommendations from the Series. The Subadviser shall not have possessionCommittee 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 Trust all investment orders for the Designated Series placed by it with brokers and dealers at the time and in the manner set forth in Schedule A hereto (as amended from time to time). The Trust shall issue to the Custodian such instructions as may be appropriate in connection with the settlement of any transaction initiated by the Subadviser. The Trust 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.
5.
Allocation of Brokerage. The Subadviser shall have authority and discretion to select brokers and dealers to execute Designated Series transactions initiated by the Subadviser, and to select the markets on or in which the transactions will be executed.its own initiative.
A.
In placing orders for the sale and purchase of Designated Series securities for the Trust, 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
seekExecutive Sessions; Inviting Others. The Committee may meet privately and may invite non-members to attend such meetings. The Committee may meet, in executive session or otherwise, with representatives of the lowest available commission costFunds’ investment adviser, subadvisers, principal underwriter or other principal service providers (and any affiliate thereof), including such parties’ internal legal counsel and/or compliance personnel, to discuss matters that relate to the Trust,areas for which the Committee has responsibility.
Specific Duties of the Committee
Board Nominations/Independence
1.
The Committee shall recommend to the Board Trustee nominees for election at the next meeting of a Fund’s shareholders, as longrequired. Additionally, in the event of any vacancies on or additions to the Board, the Committee shall evaluate the qualifications of candidates and make nominations for membership on the Board, as the Subadviser reasonably believescase may be. The Committee may also recommend that a vacancy in the broker or dealer selected by it canmembership of the Board not be expected to obtain a “best execution” market pricefilled based on the particular transactionthen current Board’s size, composition and determines in good faith thatstructure. In carrying out its responsibilities under this paragraph, the commission cost is reasonable in relationCommittee shall have sole authority to retain and terminate any search firm to be used to identify Trustee candidates, including sole authority to approve the value of the brokeragesearch firm’s fees and research services (as defined in Section 28(e)(3) of the Securities Exchange Act of 1934,other retention terms.
2.
Persons nominated as amended) 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 Trust, as to which the Subadviser exercises investment discretion, notwithstanding that the TrustIndependent Trustees may not be the direct or exclusive beneficiary of any such services or that another broker may be willing to charge the Trust a lower commission on the particular transaction.
B.
The Subadviser may manage other portfolios and expects that the Trust and other portfolios the Subadviser manages will, from time to time, purchase or sell the same securities. The Subadviser may aggregate orders for the purchase or sale of securities on behalf of the Designated Series with orders on behalf of other portfolios the Subadviser manages. Securities purchased or proceeds of securities sold through aggregated orders, as well as expenses incurred in the transaction, shall be allocated to the account of each portfolio managed by the Subadviser that bought or sold such securities in a manner considered by the Subadviser to be equitable and consistent with the Subadviser’s fiduciary obligations in respect of the Designated Series and to such other accounts.
C.
The Subadviser shall not execute any transactions for the Designated Series with a broker or dealer that is an “affiliated person” (as defined in the Act) of (i) the Series; (ii) another series of the Trust; (iii) the Adviser; (iv) the Subadviser or any other subadviser to the Series; (v) a principal underwriter of the Trust’s shares; or (vi) any other affiliated person of the Series, in each case, unless such transactions are permitted by applicable law or regulation and carried out in compliance with any applicable policies and procedures of the Trust. The Trust shall provide the Subadviser with a list of brokers and dealers that are “affiliated“interested persons” of the Trust, the Adviser or the principal underwriter, and applicable policies and procedures. Upon the request of the Adviser, the Subadviser shall promptly, and in any event within three business days of a request, indicate whether any entity identified by the Adviser in such request is an “affiliated person,”Funds as suchthat term is defined in the 1940 Act or such other interpretations and rules and regulations adopted in connection therewith. The Committee shall also review the composition of (i) the SubadviserBoard to ensure that at least two-thirds (2/3) of the Trustees are not interested persons. With respect to such consideration of nominees and existing Trustees, the Committee shall carefully evaluate their independence from any investment adviser, principal underwriter or (ii)other principal service provider to the Funds (and any affiliate thereof). The Committee shall also take into consideration any affiliations disclosed in the then current registration statement for the Funds and any person who the Committee considers to be unlikely to exercise an appropriate degree of independence as a result of: (a) a material business or professional relationship with any Fund, its investment advisers or principal underwriter (or any of their affiliated persons); or (b) a close familial relationship with any natural person who is an investment adviser or principal underwriter (or any of their affiliated persons). The Committee shall also consider the effect of any relationships beyond those delineated in the 1940 Act that might impair
affiliated person of the Subadviser, subject in each case to any confidentiality requirements applicable to the Subadviser and/or its affiliates. Further, the Subadviser shall provide the Adviser with a list of (x) each broker-dealer entity that is an “affiliated person,” as such term is defined in the Act, of the Subadviser and (y) each affiliated person of the Subadviser that has outstanding publicly-issued debt or equity. Each of the Adviser and the Subadviser agrees promptly to update such list(s) whenever the Adviser or the Subadviser becomes awareindependence of any changes that should be added toexisting or deleted from such list of affiliated persons.
D.
Consistentprospective Independent Trustee. It shall consult with its fiduciary obligations to the Trust in respect of the Designated Series and the requirements of best price and execution, the Subadviser may, under certain circumstances, arrange to have purchase and sale transactions effected directly between the Designated Series and another account managed by the Subadviser (“cross transactions”), provided that such transactions are carried out in accordance with applicable law or regulation and any applicable policies and procedures of the Trust. The Trust shall provide the Subadviser with applicable policies and procedures.
6.
Proxies and Other Shareholder Actions.
A.
Unless the Adviser or the Trust gives the Subadviser written instructions to the contrary, the Subadviser, or a third party designee acting under the authority and supervision of the Subadviser, shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the assets of the Designated Series. Unless the Adviser or the Trust gives the Subadviser written instructions to the contrary, provided that the Adviser has reviewed the Subadviser’s proxy voting procedures then in effect and determined them to comply withcounsel concerning the requirements of the Trust’s proxy voting policy,1940 Act applicable to the Subadviser will, in compliance withselection and qualification of Independent Trustees.
3.
In assessing the Subadviser’s proxy voting procedures then in effect, votequalifications of an existing or abstain from voting, all proxies solicited by or withpotential candidate for Independent Trustee membership on the Board, the Committee shall consider such other factors as it may deem relevant.
4.
With respect to shareholder/policyholder/contractholder recommendations for membership on the issuersBoard:
a.
In order for the Committee to consider recommendations for openings from shareholders of securities in which assetsopen-end retail Funds, those shareholders must have separately or as a group held for at least one full year five percent of the Designated Series mayshares of a series of the respective Fund.
b.
In order for the Committee to consider recommendations for openings from policyholders or contractholders, those policyholders or contractholders must have separately or as a group beneficially held for at least two full years five percent of the shares of a series of Virtus Variable Insurance Trust through a variable insurance policy or variable annuity contract.
c.
In order for the Committee to consider recommendations for openings from shareholders of closed-end Funds, the following requirements must be invested. The Adviser shall causesatisfied regarding the Custodian,shareholder or shareholder group submitting the Administratorproposed nominee:
(i)
Any shareholder group submitting a proposed nominee must beneficially own, either individually or another party, to forward promptly toin the Subadviser all proxies upon receipt, so as to afford the Subadviseraggregate, more than 4% of a reasonable amount of time in which to determine howFund’s securities that are eligible to vote both at the time of submission of the nominee and at the time of the Board member election. Each of the securities used for purposes of calculating this ownership must have been held continuously for at least two years as of the date of the nominating. In addition, such proxies. The Subadviser agreessecurities must continue to providebe held through the Adviser in a timely manner with any changesdate of the nomination. In addition, such securities must continue to be held through the Subadviser’s proxy voting procedures. The Subadviser further agrees to providedate of the Adviser in a timely manner with a recordmeeting and the nominating shareholder or shareholder group must bear the economic risk of votes castthe investment.
(ii)
The nominating shareholder or shareholder group may not qualify as an adverse holder — i.e., if such shareholder were required to report beneficial ownership of its securities, its report would be filed on Securities Exchange Act Schedule 13G instead of Schedule 13D in reliance on Securities Exchange Act Rule 13d-1(b) or (c).
containing(iii)
No eligible shareholder or shareholder group may submit more than one Independent Trustee recommendation each calendar year.
d.
In order for the Committee to consider shareholder, policyholder or contractholder submissions, the following requirements must be satisfied regarding the proposed nominee:
(i)
The nominee must satisfy all qualifications provided herein and in the Funds’ organizational documents, including qualification as a possible Independent Trustee.
(ii)
The nominee may not be the nominating shareholder3, a member of a nominating shareholder group or a member of the voting information requiredimmediate family of the nominating shareholder or any member of the nominating shareholder group.4
(iii)
Neither the nominee nor any member of the nominee’s immediate family may be currently employed or employed within the last year by Form N-PXany nominating shareholder entity or entity in a nominating shareholder group.
(iv)
Neither the nominee nor any immediate family member of the nominee may have accepted directly or indirectly, during the year of the election for which the nominee’s name was submitted, during the immediately preceding calendar year, or during the year when the nominee’s name was submitted, any consulting, advisory, or other compensatory fee from the nominating shareholder or any member of a nominating shareholder group.
(v)
The nominee may not be an electronic format to enableexecutive officer or trustee (or person fulfilling similar functions) of the Trust to file Form N-PXnominating shareholder or any member of the nominating shareholder group, or of an affiliate of the nominating shareholder or any such member of the nominating shareholder group.
(vi)
The nominee may not control the nominating shareholder or any member of the nominating shareholder group (or, in the case of a holder or member that is a fund, an interested person of such holder or member as requireddefined by Rule 30b1-4 underSection 2(a)(19) of the Act. The Subadviser1940 Act).
3
Within subsections (d) and (e) of this section, the term “shareholder” shall provide disclosure regarding its proxy voting policiesbe interchangeable with policyholder and procedurescontractholder as appropriate.
4
Terms such as “immediate family member” and “control” shall be interpreted in accordance with the requirements of Form N-1A for inclusion in the Registration Statement of the Trust. During any annual period in which the Subadviser has voted proxies for the Trust, the Subadviser shall, as may reasonably be requested by the Adviser, certify as to its compliance with its proxy voting policies and procedures and applicable federal statutes and regulations.
B.
The Subadviser is authorized to deal with reorganizations, exchange offers and other voluntary corporate actions with respect to securities held in the Designated Series in such manner as the Subadviser deems advisable, unless the Trust or the Adviser otherwise specifically directs in writing. It is acknowledged and agreed that the Subadviser shall not be responsible for the filing of claims (or otherwise causing the Trust to participate) in class action settlements or similar proceedings in which shareholders may participate related to securities currently or previously associated with the Designated Series. With the Adviser’s approval, on a case-by-case basis the Subadviser may obtain the authority and take on the responsibility to: (i) identify, evaluate and pursue legal claims, including commencing or defending suits, affecting the securities held at any time in the Designated Series, including claims in bankruptcy, class action securities litigation and other litigation; (ii) participate in such litigation or related proceedings with respect to such securities as the Subadviser deems appropriate to preserve or enhance the value of the Designated Series, including filing proofs of claim and related documents and serving as “lead plaintiff” in class action lawsuits; (iii) exercise generally any of the powers of an owner with respect to the supervision and management of such rights or claims, including the settlement, compromise or submission to arbitration of any claims, the exercise of which the Subadviser deems to be in the best interest of the Designated Series or required by applicable law, including ERISA, and (iv) employ suitable agents, including legal counsel, and to pay their reasonable fees, expenses and related costs from the Designated Series.laws.
7.
Prohibited Conduct. In accordance with Rule 12d3-1 and Rule 17a-10 under the 1940 Act and any other applicable law or regulation, the Subadviser’s responsibility regarding investment advice hereunder is limited to the Designated Series, and the Subadviser will not consult with any other investment advisory firm that provides investment
advisory services(vii)
A shareholder or shareholder group may not submit for consideration a nominee who has previously been considered by the Committee.
e.
Shareholders or shareholder groups submitting proposed nominees must substantiate compliance with the above requirements at the time of submitting their proposed nominee as part of their written submission to the Trust or any other investment company sponsoredattention of the relevant Fund’s Secretary. In order for a submission of a nominee to be considered, such submission must include, as applicable:
(i)
the shareholder’s contact information;
(ii)
the nominee’s contact information and the number of Fund shares owned by Virtus Investment Partners, Inc. or its affiliatesthe proposed nominee;
(iii)
all information regarding transactionsthe nominee that would be required to be disclosed in securities or other assetssolicitations of proxies for elections of trustees required by Regulation 14A of the Securities Exchange Act, including business experience for the Trust. The Trust shall providepast ten years and a description of the Subadviser with qualifications of the proposed nominee; and
(iv)
a list of investment companies sponsorednotarized letter executed by Virtus Investment Partners, Inc.the nominee, stating his or her intention to serve as a nominee and its affiliates,be named in the Funds’ proxy statement, if so designated by the Committee and the SubadviserFunds’ Board.
It shall be in breachthe Committee’s sole discretion whether to seek corrections of a deficient submission or to exclude a nominee from consideration.
f.
To the foregoing provision only ifextent the investment company is included in such a list provided toconditions of this section are met, the Subadviser prior to such prohibited action. The Subadviser, and its affiliates and agents,Committee shall refrain from making any written or oral statements concerninggive candidates recommended by shareholders/policyholders/contractholders the Designated Series, the Trust,same consideration as any other investment company sponsored by Virtus Investment Partners, Inc. or its affiliates, and any substantially similar products, that are reasonably likely to mislead investors regarding either (i) the services rendered by the Subadviser to the Designated Series or the Trust, or (ii) the Designated Series, including without limitation with respect to the investment strategies and/or risks, and/or the performance thereof. In addition, the Subadviser shall not, without the prior written consent of the Trust and the Adviser, delegate any obligation assumed pursuant to this Agreement to any affiliated or unaffiliated third party. The parties acknowledge and agree that the Subadviser may, in its discretion, utilize personnel employed by affiliates of the Subadviser to perform services pursuant to this Agreement by way of a “participating affiliate” agreement in accordance with, and to the extent permitted by, the Act and the Investment Advisers Act of 1940, as amended (the “Advisers Act”), including the published interpretations thereof by the SEC or its staff. Such participating affiliate agreement shall subject the personnel providing such services to the Subadviser’s compliance and other programs with respect to their activities on behalf of the Designated Series. For the avoidance of doubt, it is acknowledged and agreed that the Subadviser assumes full responsibility for all actions, and any failure to act, by each person utilized by the Subadviser to perform services under this Agreement.
8.
Information and Reportscandidate..
A.Board Chairperson Nominations
1.
The Subadviser shall keep the Trust and the Adviser informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Designated Series. In this regard, the Subadviser shall provide the Trust, the Adviser and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this Agreement as the Trust and the Adviser mayCommittee from time to time shall recommend to the Board a policy or plan regarding succession of the Board chairperson. Such policy or plan shall be designed to: (i) mitigate, to the extent reasonably request. practicable, the negative impact of the retirement or resignation of the Board chairperson, and (ii) assist the Committee in evaluating candidates for a new chairperson of the Board.
2.
In addition, prior to each meetingthe event of an anticipated or actual retirement or resignation of the chairperson of the Board, the SubadviserCommittee shall provideevaluate the Adviserqualifications of candidates and make recommendations to the Board with reports regarding nominations for a new chairperson of the Subadviser’sBoard.
managementCommittee Nominations and Responsibilities
1.
The Committee shall make recommendations to the Board concerning the responsibilities or establishment of Board committees.
2.
The Committee shall review and make recommendations from time to time to the Board regarding the nature and duties of Board committees, including: (i) committee member qualifications (including, without limitation, “financial expert” status); (ii) committee member and chairperson appointment and removal; (iii) committee size, structure and operations (including authority to delegate to subcommittees); (iv) committee charters; and (v) committee reporting to the Board. In the event of any vacancies on or additions to any committee, the Committee shall evaluate the qualifications of candidates and make recommendations on membership on any committee of the Designated Series duringBoard.
3.
In considering and recommending committee member appointments and removals, the most recently completed quarter, which reports:Committee’s objective is to encourage broad knowledge and understanding by each Trustee of the Funds’ financial, regulatory and governance circumstances and conditions by endeavoring, to the extent reasonably practicable, to: (i) rotate membership of each committee over time, so that the individual committee members other than the chairperson serve on a committee generally no more than three (3) consecutive years and ultimately have served on several committees; and (ii) rotate chairpersons of the committees over time, so that the individual serving as chairperson of a committee serves in that role generally no more than five (5) consecutive years and ultimately has also served as a regular member or chairperson of several committees.
Fund Governance
1.
The Committee shall include Subadviser’s representationrecommend to the Board for its approval a set of governance guidelines and shall review such guidelines from time to time as it deems necessary or appropriate and recommend any proposed changes to the Board for approval. Such guidelines shall consider, among other things, whether the Board is properly constituted, if matters entrusted to the Board have been properly considered, and any other matters that its performancethe Board should properly consider.
2.
The Committee shall coordinate an annual self-assessment by the Board of its investment management duties hereunder is in compliance with the Designated Series’ investment objectives and practices, the Act and applicable rules and regulations under the Act, and the diversification and minimum “good income” requirements of Subchapter M under the Internal Revenue Code of 1986, as amended, and (ii) otherwise shall be in such form aseffectiveness. The self-assessment may be mutually agreed upon by the Subadviser and the Adviser.
B.
Eachinclude, among other things, consideration of the AdviserBoard’s committee structure; the appropriateness of rotating the composition of each Committee; and whether the Subadviser shall provide the other party with a list,Board members are capable of providing sufficient oversight to the bestnumber of funds they monitor. The Committee shall promptly report its findings and conclusions to the Adviser’s or the Subadviser’s respective knowledge, of each affiliated person (and any affiliated person of such an affiliated person) of the Adviser or the Subadviser, as the case may be, and each of the Adviser and Subadviser agrees promptly to update such list whenever the Adviser or the Subadviser becomes aware of any changes that should be added to or deleted from the list of affiliated persons.Board.
C.
The Subadviser shall also provide the Adviser with any information reasonably requested by the Adviser regarding its management of the Designated Series required for any shareholder report, amended Registration Statement, or Prospectus supplement to be filed by the Trust with the SEC.
D.
The Subadviser shall promptly notify the Adviser and the Trust in the event that any of the Subadviser’s employees or contractors raise any issues concerning any actual or potential material violation of any law, regulation or internal policy of the Subadviser, in each case actually or potentially affecting the Designated Series.
9.
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 Trust and the Adviser, the Adviser is solely responsible for the payment of fees to the Subadviser.
10.
Limitation of Liability. Absent the Subadviser’s breach of this Agreement or the willful misconduct, bad faith, gross negligence, or reckless disregard of the obligations or duties hereunder on the part of the Subadviser, or its officers, directors, partners, agents, employees and controlling persons, the Subadviser shall not be liable for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any position; provided, however,Other Powers and Responsibilities that
1.
The Committee shall annually review the Subadviser shall be responsible for, and shall indemnify and hold the Trust and the Adviser and each of their respective directors or trustees, members, officers, employees and shareholders, and each person, if any, who controls the Trust or the Adviser within the meaning of Section 15sufficiency of the Securities Act of 1933, as amended (the “Securities Act”), harmless against, anyretainer and all Losses (as defined below) arising out of or resulting from a “Trade Error” (as defined in the compliance policies and proceduresfees paid to each member of the Trust and/orBoard and to the Subadviser), as the same may be amended from time to time) caused by the negligent action or negligent omissionmembers of the Subadviserseveral Committees. If the Committee finds the retainer or its agent. The Adviser agreesfees to provide prior written noticebe not appropriate in light of the Board’s and Committees’ responsibilities, it will make a recommendation to the Subadviser of any material changes to the definition of Trade Error becoming effective with respect to the Designated Series unless, in the reasonable discretion of the Adviser, such change must become effective earlier due to any applicable law, rule, regulation or court order. It is acknowledged and agreed that any Trade Error that results in a gain to the Series shall inure to the benefit of the Series. For the avoidance of doubt, it is acknowledged and agreed that the Series is a third party beneficiary of the indemnity granted in this Section 10, and the indemnity is intended to cover claims by the Series, the Trust (on behalf of the Series), or the Adviser against the Subadviser for recovery pursuant to this section.
11.
Confidentiality. Subject to the duty of the Subadviser and the Trust 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 Designated Series and the actions of the Subadviser and the Trust in respect thereof. Notwithstanding the foregoing, the Trust and the Adviser agree that the Subadviser may (i) disclose in marketing materials and similar communications that the Subadviser has been engaged to manage assets of the Designated Series pursuant to this Agreement, and (ii) include performance statistics regarding the Designated Series in composite performance statistics regarding one or more groups of Subadviser’s clients published or included in any of the foregoing communications, provided that the Subadviser does not identify any performance statistics as relating specifically to the Series.Board.
12.
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 TrustAmended and the Adviser in writing sufficiently in advance of any proposed change of control, as defined inRestated: April 8, 2022
Section 2(a)(9) of the Act, as will enable the Trust to consider whether an assignment as defined in Section 2(a)(4) of the Act will occur, and to take the steps necessary to enter into a new contract with the Subadviser.
13.
APPENDIX B
Representations, Warranties and Agreements of the SubadviserSHARES OF THE SERIES OUTSTANDING ON THE RECORD DATE. The Subadviser represents, warrants and agrees that:
A.
It is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization, and is qualified to do business in each jurisdiction in which failure to be so qualified would reasonably be expected to have a material adverse effect upon it. It (i) is registered as an “investment adviser” under the Investment Advisers Act of 1940, as amended (“Advisers Act”) and will continue to be so registered for so long as this Agreement remains in effect; (ii) is not prohibited by the Act or the Advisers Act from performing the services contemplated by this Agreement; provided, however, that the Subadviser makes no representation or warranty with regard to the approval of this Agreement by the Board under Section 15 of the Act; (iii) has appointed a Chief Compliance Officer under Rule 206(4)-7 under the Advisers Act; (iv) has adopted written policies and procedures that are reasonably designed to prevent violations of the Advisers Act from occurring, and correct promptly any violations that have occurred, and will provide notice promptly to the Adviser of any material violations relating to the Trust; (v) has materially met and will seek to continue to meet for so long as this Agreement remains in effect, any other applicable federal or state requirements, or the applicable requirements of any regulatory or industry self-regulatory agency.
B.
It is not required to register as a commodity trading advisor with the U.S. Commodity Futures Trading Commission because it does not provide commodity trading advice.
C.
It will maintain, keep current and preserve on behalf of the Trust, records in the manner required or permitted by the Act and the Rules thereunder including the records identified in Schedule B (as Schedule B may be amended from time to time). The Subadviser agrees that such records are the property of the Trust, and shall be surrendered to the Trust or to the Adviser as agent of the Trust promptly upon request of either. The Trust acknowledges that the Subadviser may retain copies of all records required to meet the record retention requirements imposed by law and regulation.
| | | Funds | | | | | | | | | | |
| | | | | | | A | | | | I | | |
| | | Virtus Duff & Phelps Real Estate Securities Series | | | | 4,218,047.969 | | | | 506,453.144 | | |
| | | Virtus KAR Capital Growth Series | | | | 6,211,189.534 | | | | N/A | | |
| | | Virtus KAR Equity Income Series | | | | 7,805,843.195 | | | | N/A | | |
| | | Virtus KAR Small-Cap Growth Series | | | | 3,149,336.219 | | | | 254,030.277 | | |
| | | Virtus KAR Small-Cap Value Series | | | | 4,505,101.596 | | | | N/A | | |
| | | Virtus Newfleet Multi-Sector Intermediate Bond Series | | | | 11,437,431.549 | | | | 217,882.636 | | |
| | | Virtus SGA International Growth Series | | | | 11,145,754.526 | | | | 9,274.231 | | |
| | | Virtus Strategic Allocation Series | | | | 5,631,374.141 | | | | N/A | | |
D.APPENDIX C
COMPENSATION OF THE TRUSTEES FOR
THE LAST FISCAL YEAR
| Name | | | Aggregate
Compensation
From Virtus Variable
Insurance Trust | | | Pension or
Retirement
Benefits
Accrued as
Part of
Trust
Expenses | | | Total
Compensation
From the
Virtus Funds
Complex Paid
to Trustees* | |
| Independent Trustees | | | | | | | | | | | | | | | | | | | |
| Donald C. Burke | | | | $ | 5,056 | | | | | | None | | | | | $ | 408,667 | | |
| Sidney E. Harris | | | | $ | 5,126 | | | | | | None | | | | | $ | 316,667 | | |
| John R. Mallin | | | | $ | 5,055 | | | | | | None | | | | | $ | 316,667 | | |
| Connie D. McDaniel | | | | $ | 5,718 | | | | | | None | | | | | $ | 356,250 | | |
| Philip R. McLoughlin | | | | $ | 7,606 | | | | | | None | | | | | $ | 671,917 | | |
| Geraldine M. McNamara | | | | $ | 5,549 | | | | | | None | | | | | $ | 438,250 | | |
| R. Keith Walton | | | | $ | 5,055 | | | | | | None | | | | | $ | 316,667 | | |
| Brian T. Zino | | | | $ | 4,697 | | | | | | None | | | | | $ | 345,833 | | |
| Interested Trustee | | | | | | | | | | | | | | | | | | | |
| George R. Aylward | | | | | None | | | | | | None | | | | | | None | | |
| Advisory Board Members** | | | | | | | | | | | | | | | | | | | |
| Sarah E. Cogan | | | | $ | 3,513 | | | | | | None | | | | | $ | 302,500 | | |
| Deborah A. DeCotis | | | | $ | 3,571 | | | | | ��� | None | | | | | $ | 293,333 | | |
| F. Ford Drummond | | | | $ | 3,542 | | | | | | None | | | | | $ | 297,917 | | |
| TOTAL | | | | $ | 54,488 | | | | | | None | | | | | $ | 3,928,668 | | |
*
It shall maintain a written code of ethics (the “Code of Ethics”) complying with the requirements of Rule 204A-1 under the Advisers Act and Rule 17j-1 under the Act and shall provide the Trust and the Adviser with a copy of the Code of Ethics and evidence of its adoption. It shall institute procedures reasonably necessary to prevent Access Persons (as defined in Rule 17j-1) from violating its Code of Ethics. The Subadviser acknowledges receipt of the written code of ethics adopted by and on behalf of the Trust. Each calendar quarter while this Agreement is in effect, a duly authorized compliance officer of the Subadviser shall certify to the Trust and to the Adviser that the Subadviser has complied with the requirements of Rules 204A-1 and 17j-1 during the previous calendar quarter and that there has been no material violation of its Code of Ethics, or of Rule 17j-1(b), or that any persons covered under its Code of Ethics has divulged or acted upon any material, non-public information, as such term is defined under relevant securities laws, and if such a violation of the code of ethics of the Trust has occurred, or if such a violation of its Code of Ethics has occurred, that appropriate action was taken in response to such violation. The Subadviser shall notify the Adviser promptly of any material violation of the Code of Ethics involving the Trust. The Subadviser will provide such additional information regarding violations of the Code of Ethics directly affecting the Trust as the Trust or its Chief Compliance Officer on behalf of the Trust or the Adviser may reasonably request in order to assess the functioning of the Code of Ethics or any harm caused to the Trust from a violation of the Code of Ethics. Further, the Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, nonpublic information by the Subadviser and its employees. The Subadviser will explain what it has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish to the Trust and the Adviser a written report which complies with the requirements of Rule 17j-1 concerning the Subadviser’s Code of Ethics. The Subadviser shall permit the Trust and the Adviser to examine the reports required to be made by the Subadviser under Rules 204A-1(b) and 17j-1(d)(1) and this subparagraph.Total for period January 1, 2021 through December 31, 2021.
E.**
It has adopted and implemented, and throughout the term of this Agreement shall maintain in effect and implement, policies and procedures reasonably designed to prevent, detect and correct violations by the Subadviser and its supervised persons, and, to the extent the activities of the Subadviser in respect of the Trust could affect the Trust, by the Trust, of “federal securities laws” (asEach Advisory Board Member joined effective February 1, 2021.
defined in Rule 38a-1 under the Act), and that the Subadviser has provided the Trust with true and complete copies of its policies and procedures (or summaries thereof) and related information reasonably requested by the Trust and/or the Adviser. The Subadviser agrees to cooperate with periodic reviews by the Trust’s and/or the Adviser’s compliance personnel of the Subadviser’s policies and procedures, their operation and implementation and other compliance matters and to provide to the Trust and/or the Adviser from time to time such additional information and certifications in respect of the Subadviser’s policies and procedures, compliance by the Subadviser with federal securities laws and related matters as the Trust’s and/or the Adviser’s compliance personnel may reasonably request. The Subadviser agrees to promptly notify the Adviser of any compliance violations which affect the Designated Series.
F.
The Subadviser will immediately notify the Trust and the Adviser of the occurrence of any event which would disqualify the Subadviser from serving as an investment adviser of an investment company pursuant to Section 9 of the Act or otherwise. The Subadviser will also immediately notify the Trust and the Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, including but not limited to the SEC and the CFTC, involving the affairs of the Designated Series.
G.
To the best of its knowledge, there are no material pending, threatened, or contemplated actions, suits, proceedings, or investigations before or by any court, governmental, administrative or self-regulatory body, board of trade, exchange, or arbitration panel to which it or any of its directors, officers, employees, partners, shareholders, members or principals, or any of its affiliates is a party or to which it or its affiliates or any of its or its affiliates’ assets are subject, nor has it or any of its affiliates received any notice of an investigation, inquiry, or dispute by any court, governmental, administrative, or self-regulatory body, board of trade, exchange, or arbitration panel regarding any of its or their activities, which might reasonably be expected to result in (i) a material adverse effect on the Trust or (ii) a material adverse change in the Subadviser’s condition (financial or otherwise) or business, or which might reasonably be expected to materially impair the Subadviser’s ability to discharge its obligations under this Agreement. The Subadviser will also immediately notify the Trust and the Adviser if the representation in this Section 13.G is no longer accurate.
H.
The Subadviser shall promptly notify the Adviser of any changes in its executive officers, partners or in its key personnel, including, without limitation, any change in the portfolio manager(s) responsible for the Designated Series or if there is an actual or expected change in control or management of the Subadviser.
14.
APPENDIX D
No Personal LiabilityTRUSTEE/NOMINEE OWNERSHIP OF EQUITY SECURITIES. Reference is hereby made to the Declaration of Trust establishing the Trust, a copy of which has been filed with the SEC, and to any and all amendments thereto so filed or hereafter filed. The name “Virtus Variable Insurance Trust” refers to the Board 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 Trust or of any successor of the Trust, whether such liability now exists or is hereafter incurred for claims against the trust estate.
15.
Entire Agreement; AmendmentOF THE TRUST/FUNDS AS OF March 31, 2022. This Agreement, together with the Schedules attached hereto, constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes any prior written or oral agreements pertaining to the subject matter of this Agreement. This Agreement may be amended at any time, but only by written agreement among the Subadviser, the Adviser and the Trust, which amendment, other than amendments to Schedules A, B, D, E and F, is subject to the approval of the Board (including those trustees who are not “interested persons” of the Trust) and, if required by the Act or applicable SEC rules and regulations, a vote of a majority of the Series’ outstanding voting securities; provided, however, that, notwithstanding the foregoing, this Agreement may be amended or terminated in accordance with any exemptive order issued to the Adviser, the Trust or its affiliates.
16.
Effective Date; Term. This Agreement shall become effective on the date set forth on the first page of this Agreement, and shall continue in effect for an initial period of two years. The Agreement shall continue from year to year thereafter only so long as its continuance has been specifically approved at least annually (i) by a vote of the Board of the Trust or by vote of a majority of outstanding voting securities of the
Trust and (ii) by vote of a majority of the trustees who are not interested persons of the Trust (as defined in the Act) or of any person party to this Agreement, cast in person at a meeting called for the purpose of such approval.
17.
Termination. This Agreement may be terminated at any time without payment of any penalty (i) by the Board, or by a vote of a majority of the outstanding voting securities of the Trust, upon 60 days’ prior written notice to the Adviser and the Subadviser, (ii) by the Subadviser upon 60 days’ prior written notice to the Adviser and the Trust, or (iii) by the Adviser upon 60 days’ prior written notice to the Subadviser. This Agreement may also be terminated, without the payment of any penalty, by the Adviser or the Board immediately (i) upon the material breach by the Subadviser of this Agreement or (ii) at the terminating party’s discretion, if the Subadviser or any officer, director or key portfolio manager of the Subadviser is accused in any regulatory, self-regulatory or judicial investigation or proceeding as having violated the federal securities laws or engaged in criminal conduct. This Agreement may also be terminated, without the payment of any penalty, by the Subadviser immediately (i) upon the material breach by the Adviser of this Agreement or (ii) at the discretion of the Subadviser, if the Adviser or any officer or director of the Adviser is accused in any regulatory, self-regulatory or judicial investigation or proceeding as having violated the federal securities laws or engaged in criminal conduct. This Agreement shall terminate automatically and immediately upon termination of the Advisory Agreement. This Agreement shall terminate automatically and immediately in the event of its assignment, as such term is defined in and interpreted under the terms of the 1940 Act and the rules promulgated thereunder. Termination of this Agreement will not affect any outstanding orders or transactions or any legal rights or obligations which may already have arisen. Transactions in progress at the date of termination will be completed by the Subadviser as soon as reasonably practicable. Provisions of this Agreement relating to indemnification and the preservation of records, as well as any responsibilities or obligations of the parties hereto arising from matters initiated prior to termination, shall survive any termination of this Agreement.
18.
Applicable Law. To the extent that state law is not preempted by the provisions of any law of the United States heretofore or hereafter enacted, as the same may be amended from time to time, this Agreement shall be administered, construed and enforced according to the laws of the State of Delaware applicable to contracts entered into and fully performed within the State of Delaware.
19.
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.
20.
Notices. Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered personally or by overnight delivery service or mailed by certified or registered mail, return receipt requested and postage prepaid, or sent by facsimile or e-mail transmission addressed to the parties at their respective addresses set forth below, or at such other address as shall be designated by any party in a written notice to the other party.
(a)
To the Adviser or the Trust at:
Virtus Investment Advisers, Inc.
One Financial Plaza
Hartford, Connecticut 06103
Attn: Jennifer Fromm
Telephone: (860) 263-4790
Facsimile: (860) 241-1005
E-mail: jennifer.fromm@virtus.com
(b)
To the Subadviser at:
Sustainable Growth Advisers, LP
301 Tresser Blvd.
Suite 1310
Stamford, CT 06901
Attn: Daniel Callaway
Telephone: (203) 348-4742, Ext. 160
Facsimile:
E-mail: dcallaway@sgadvisers.com
21.
Certifications. The Subadviser shall timely provide to the Adviser and the Trust, all information and documentation they may reasonably request as necessary or appropriate in order for the Adviser and the Board to oversee the activities of the Subadviser and in connection with the compliance by any of them with the requirements of this Agreement, the Registration Statement, the policies and procedures referenced herein, and any applicable law, including, without limitation, (i) information and commentary relating to the Subadviser or the Designated Series for the Trust’s annual and semi-annual reports, in a format reasonably approved by the Adviser, together with (A) a
certification that such information and commentary discuss all of the factors that materially affected the performance of the Series, including the relevant market conditions and the investment techniques and strategies used and (B) additional certifications related to the Subadviser’s management of the Trust in order to support the Trust’s filings on Form N-CSR, Form N-Q and other applicable forms, and the Trust’s Principal Executive Officer’s and Principal Financial Officer’s certifications under Rule 30a-2 under the Act, thereon; (ii) within 5 business days of a quarter-end, a quarterly certification with respect to compliance and operational matters related to the Subadviser and the Subadviser’s management of the Designated Series (including, without limitation, compliance with the applicable procedures), in a format reasonably requested by the Adviser, as it may be amended from time to time; and (iii) an annual certification from the Subadviser’s Chief Compliance Officer, appointed under Rule 206(4)-7 under the Advisers Act with respect to the design and operation of the Subadviser’s compliance program, in a format reasonably requested by the Adviser or the Trust. Without limiting the foregoing, the Subadviser shall provide a quarterly certification in a form substantially similar to that attached as Schedule E.
22.
Indemnification.
A.
The Subadviser shall indemnify and hold harmless the Adviser from and against any and all claims, losses, liabilities, or damages (including reasonable attorney’s fees and other related expenses) (collectively, “Losses”) arising from the Subadviser’s willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties under this Agreement in the performance of its obligations under this Agreement; provided, however, that the Subadviser’s obligation under this Section 22 shall be reduced to the extent that the claim against, or the loss, liability, or damage experienced by the Adviser, is caused by or is otherwise directly related to (i) any breach by the Adviser of its representations or warranties made herein, (ii) any willful misconduct, bad faith, reckless disregard or negligence of the Adviser in the performance of any of its duties or obligations hereunder, or (iii) any untrue statement of a material fact contained in the Registration Statement, proxy materials, reports, advertisements, sales literature, or other materials pertaining to the Trust or the omission to state therein a material fact known to the Adviser that was required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon information furnished to the Subadviser or the Trust, or the omission of such information, by the Adviser for use therein.
B.
The Adviser shall indemnify and hold harmless the Subadviser from and against any and all Losses arising from the Adviser’s willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties under this Agreement in the performance of its obligations under this Agreement; provided, however, that the Adviser’s obligation under this Section 22 shall be reduced to the extent that the claim against, or the loss, liability, or damage experienced by the Subadviser, is caused by or is otherwise directly related to (i) any breach by the Subadviser of its representations or warranties made herein, (ii) any willful misconduct, bad faith, reckless disregard or negligence of the Subadviser in the performance of any of its duties or obligations hereunder, or (iii) any untrue statement of a material fact contained in the Registration Statement, proxy materials, reports, advertisements, sales literature, or other materials pertaining to the Trust or the omission to state therein a material fact known to the Subadviser that was required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon information furnished to the Adviser or the Trust, or the omission of such information, by the Subadviser for use therein.
C.
A party seeking indemnification hereunder (the “Indemnified Party”) will (i) provide prompt written notice to the other of any claim (“Claim”) for which it intends to seek indemnification, (ii) grant control of the defense and/or settlement of the Claim to the other party, and (iii) cooperate with the other party in the defense thereof. The Indemnified Party will have the right at its own expense to participate in the defense of any Claim, but will not have the right to control the defense, consent to judgment or agree to the settlement of any Claim without the written consent of the other party. The party providing the indemnification will not consent to the entry of any judgment or enter any settlement which (i) does not include, as an unconditional term, the release by the claimant of all liabilities for Claims against the Indemnified Party or (ii) which otherwise adversely affects the rights of the Indemnified Party.
D.
No party will be liable to another party for consequential damages under any provision of this Agreement.
23.
Receipt of Disclosure Documents. The Trust and the Adviser acknowledge receipt, at least 48 hours prior to entering into this Agreement, of a copy of Part 2 of the Subadviser’s Form ADV containing certain information concerning the Subadviser and the
nature of its business. The Subadviser will, promptly after making any amendment to its Form ADV, furnish a copy of such amendment to the Adviser. On an annual basis and upon request, the Subadviser will provide a copy of its audited financial statements, including balance sheets, for the two most recent fiscal years and, if available, each subsequent fiscal quarter. At the time of providing such information, the Subadviser shall describe any material adverse change in its financial condition since the date of its latest financial statement.
24.
Counterparts; Fax Signatures. This Agreement may be executed in any number of counterparts (including executed counterparts delivered and exchanged by facsimile transmission) with the same effect as if all signing parties had originally signed the same document, and all counterparts shall be construed together and shall constitute the same instrument. For all purposes, signatures delivered and exchanged by facsimile transmission shall be binding and effective to the same extent as original signatures.
25.
Bankruptcy and Related Events. Each of the Adviser and the Subadviser agrees that it will provide prompt notice to the other in the event that: (i) it makes an assignment for the benefit of creditors, files a voluntary petition in bankruptcy, or is otherwise adjudged bankrupt or insolvent by a court of competent jurisdiction; or (ii) a material event occurs that could reasonably be expected to adversely impair its ability to perform this Agreement. The Adviser further agrees that it will provide prompt notice to the Subadviser in the event that the Trust ceases to be registered as an investment company under the Act.
[signature page follows]
VIRTUS VARIABLE INSURANCE TRUST
By:
Name:
Title:
VIRTUS INVESTMENT ADVISERS, INC.
By:
Name:
Title:
ACCEPTED:
SUSTAINABLE GROWTH ADVISERS, LP
By:
Name:
Title:
| SCHEDULES:Name of Trustee or Nominee | | | A.Name of Trust | | | Operational ProceduresName of Fund | | | Dollar Range of
Equity Securities
in the Fund | | | Aggregate
Dollar
Range of
Equity
Securities in
the Virtus
funds
complex | |
| | | | Independent Trustees/Nominees | B. | | | Record Keeping Requirements | |
| | | | | C. | | | Fee Schedule | |
| | | | D. | | | Subadviser Functions | |
| | | | E. | | | Form of Sub-Certification | |
| | | | F. | | | Designated Series | |
SCHEDULE A
OPERATIONAL PROCEDURES
In order to minimize operational problems, it will be necessary for a flow of information to be supplied in a secure manner by Subadviser to the Trust’s service providers, including: The Bank of New York Mellon (the “Custodian”), Virtus Fund Services, LLC (the “Fund Administrator”), BNY Mellon Investment Servicing (US) Inc., (the “Sub-Accounting Agent”), any Prime Broker to the Series, and all other Counterparties/Brokers as required.
The Subadviser must furnish the Trust’s service providers with required daily information as to executed trades in a format and time-frame agreed to by the Subadviser, Custodian, Fund Administrator, Sub-Accounting Agent and Prime Broker/Counterparties and designated persons of the Trust. Trade information sent to the Custodian, Fund Administrator, Sub-Accounting Agent and Prime Broker/Counterparties must include all necessary data within the required timeframes to allow such parties to perform their obligations to the Series.
The Sub-Accounting Agent specifically requires a daily trade blotter with a summary of all trades, in addition to trade feeds, including, if no trades are executed, a report to that effect. Daily information as to executed trades for same-day settlement and future trades must be sent to the Sub-Accounting Agent no later than 5:00 p.m. (Eastern Time) on the day of the trade each day the Trust is open for business. All other executed trades must be delivered to the Sub-Accounting Agent on trade date +1 by 11:00 a.m. (Eastern Time) to ensure that they are part of the Series’ NAV calculation. (Subadviser will be responsible for reimbursement to the Trust for any loss caused by the Subadviser’s failure to comply with the requirements of this Schedule A.) On fiscal quarter ends and calendar quarter ends, all trades must be delivered to the Sub-Accounting Agent by 4:30 p.m. (Eastern Time) for inclusion in the financial statements of the Series. The data to be sent to the Sub-Accounting Agent and/or Fund Administrator will be as agreed by the Subadviser, Fund Administrator, Sub-Accounting Agent and designated persons of the Trust and shall include (without limitation) the following:
1.
Transaction type (e.g., purchase, sale, open, close, put call);
2.
Security type (e.g., equity, fixed income, swap, future, option, short, long);
3.
Security name;
4.
Exchange identifier (e.g., CUSIP, ISIN, Sedol, OCC Symbol) (as applicable);
5.
Number of shares and par, original face, contract amount, notional amount;
6.
Transaction price per share (clean if possible);
7.
Strike price;
8.
Aggregate principal amount;
9.
Executing broker;
10.
Settlement agent;
11.
Trade date;
12.
Settlement date;
13.
Aggregate commission or if a net trade;
14.
Interest purchased or sold from interest bearing security;
15.
Net proceeds of the transaction;
16.
Trade commission reason: best execution, soft dollar or research (to be provided quarterly);
17.
Derivative terms;
18.
Non-deliverable forward classification (to be provided quarterly);
19.
Maturity/expiration date; and
20.
Details of margin and collateral movement.
When opening accounts with brokers for, and in the name of, the Trust, the account must be a cash account. No margin accounts are to be opened by the Subadviser in the name of the Trust or any Series except as specifically approved by the Trust and the Fund Administrator. Delivery instructions are as specified by the Custodian. The Custodian will supply the Subadviser daily with a cash availability report via access to the Custodian website, or by email or by facsimile and the Sub-Accounting Agent will provide a five-day cash projection. This will normally be done by email or, if email is unavailable, by another form of immediate written communication, so that the Subadviser will know the amount available for investment purposes.
SCHEDULE B
RECORDS TO BE MAINTAINED BY THE SUBADVISER
1.
(Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other series purchases and sales, given by the Subadviser on behalf of the Trust 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 Trust.
2.
(Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within ten (10) days after the end of the quarter, showing specifically the basis or bases upon which the allocation of orders for the purchase and sale of series securities to named brokers or dealers was effected, and the division of brokerage commissions or other compensation on such purchase and sale orders. Such record:
A.
Shall include the consideration given to:
(i)
The sale of shares of the Trust by brokers or dealers.
(ii)
The supplying of services or benefits by brokers or dealers to:
(a)
The Trust,
(b)
The Adviser,
(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.
Shall show the name of the person responsible for making the determination of such allocation and such division of brokerage commissions or other compensation.
3.
(Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum identifying the person or persons, committees or groups authorizing the purchase or sale of series securities. Where a committee or group makes an authorization, a record shall be kept of the names of its members who participate in the authorization. There shall be retained as part of this record: any memorandum, recommendation or instruction supporting or authorizing the purchase or sale of series securities and such other information as is appropriate to support the authorization.*
4.
(Rule 31a-1(f)) Such accounts, books and other documents as are required to be maintained by registered investment advisers by rule adopted under Section 204 of the Advisers Act, to the extent such records are necessary or appropriate to record the Subadviser’s transactions for the Trust.
5.
Records as necessary under Board-approved policies and procedures of the Trust, including without limitation those related to valuation determinations.
*
Such information might include: current financial information, annual and quarterly reports, press releases, reports by analysts and from brokerage firms (including their recommendations, i.e., buy, sell, hold) or any internal reports or subadviser review.
SCHEDULE C
SUBADVISORY FEE
For services provided to the Trust, the Adviser will pay to the Subadviser a fee, payable monthly in arrears, equal to 50% of the net advisory fee applicable to the Designated Series, calculated as follows:
1.
The total expenses of the Designated Series will be calculated in accordance with the terms of its prospectus, including application of the gross advisory fee.
2.
Such total expenses will be reduced by the application of any applicable fee waiver and/or expense limitation agreement, in accordance with the terms thereof.
3.
The net advisory fee applicable to the Designated Series will then be calculated by subtracting from the gross advisory fee any amount required to be waived under the applicable fee waiver(s) and/or reimbursed under such applicable expense limitation agreement.
4.
In the event that the Adviser waives its entire fee and also assumes expenses of the Designated Series pursuant to an applicable expense limitation agreement, the Subadviser will similarly waive its entire fee and will share in the expense assumption by contributing 50% of the assumed amount.
5.
If during the term of this Agreement the Adviser later recaptures some or all of the fees waived or expenses assumed by the Adviser and the Subadviser together, the Adviser shall pay to the Subadviser a pro rata amount of the fee(s)/expense(s) recaptured that is attributable to the Subadviser’s portion of the original waiver/assumed expense.
SCHEDULE D
SUBADVISER FUNCTIONS
With respect to managing the investment and reinvestment of the Designated Series’ assets, the Subadviser shall provide, at its own expense:
(a)
An investment program for the Designated 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 and the Adviser in paragraph 3 of this Subadvisory Agreement and implementation of that program;
(b)
Periodic reports, on at least a quarterly basis, in form and substance acceptable to the Adviser, with respect to: i) compliance with the Code of Ethics and the Trust’s code of ethics; ii) compliance with procedures adopted from time to time by the Board relative to securities eligible for resale under Rule 144A under the Securities Act of 1933, as amended; iii) diversification of Designated Series assets in accordance with the then prevailing Prospectus and Statement of Additional Information pertaining to the Designated Series and governing laws, regulations, rules and orders; 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 Designated Series’ limitation on acquisition of illiquid securities; v) any and all other reports reasonably requested in accordance with or described in this Agreement; vi) the implementation of the Designated Series’ investment program, including, without limitation, analysis of Designated Series performance; vii) compliance with the Investment Guidelines; viii) description of material changes in policies or procedures; and ix) description of any significant firm related developments;
(c)
Promptly after filing with the SEC an amendment to its Form ADV, a copy of such amendment to the Adviser and the Board;
(d)
Attendance by appropriate representatives of the Subadviser at meetings requested by the Adviser or Board at such time(s) and location(s) as reasonably requested by the Adviser or Board; and
(e)
Notice to the Board and the Adviser of the occurrence of any event which would disqualify the Subadviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the Act or otherwise.
(f)
Reasonable assistance in the valuation of securities including the participation of appropriate representatives at fair valuation committee meetings.
SCHEDULE E
FORM OF SUB-CERTIFICATION
To:
Re:
Subadviser’s Form N-CSR and Form N-Q Certification for the [Name of Designated Series].
From:
[Name of Subadviser]
Representations in support of Investment Company Act Rule 30a-2 certifications of Form N-CSR and Form N-Q.
[Name of Designated Series].
In connection with your certification responsibility under Rule 30a-2 and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, I have reviewed the following information presented in the schedule of investments for the period ended [Date of Reporting Period] (the “Report”) which forms part of the N-CSR or N-Q, as applicable, for the Trust.
Schedule of Investments
Our organization has designed, implemented and maintained internal controls and procedures, designed for the purpose of ensuring the accuracy and completeness of relevant portfolio trade data transmitted to those responsible for the preparation of the Schedule of Investments. As of the date of this certification there have been no material modifications to these internal controls and procedures.
In addition, our organization has:
a.
Designed such internal controls and procedures to ensure that material information is made known to the appropriate groups responsible for servicing the above-mentioned mutual fund.
b.
Evaluated the effectiveness of our internal controls and procedures, as of a date within 90 days prior to the date of this certification and we have concluded that such controls and procedures are effective.
c.
In addition, to the best of my knowledge, there has been no fraud, whether or not material, that involves our organization’s management or other employees who have a significant role in our organization’s control and procedures as they relate to our duties as subadviser to the Designated Series.
I have read the draft of the Report which I understand to be current as of [Date of Reporting Period] and based on my knowledge, such draft of the Report does not, with respect to the Designated Series, contain any untrue statement of a material fact or omit to state a material fact necessary to make the information contained therein, in light of the circumstances under which such information is presented, not misleading with respect to the period covered by such draft Report.
I have disclosed, based on my most recent evaluation, to the Designated Series’ Chief Accounting Officer:
a.
All significant changes, deficiencies and material weakness, if any, in the design or operation of the Subadviser’s internal controls and procedures which could adversely affect the Registrant’s ability to record, process, summarize and report financial data with respect to the Designated Series in a timely fashion;
b.
Any fraud, whether or not material, that involves the Subadviser’s management or other employees who have a significant role in the Subadviser’s internal controls and procedures for financial reporting.
I certify that to the best of my knowledge:
a.
The Subadviser’s Portfolio Manager(s) has/have complied with the restrictions and reporting requirements of the Code of Ethics (the “Code”). The term Portfolio Manager is as defined in the Code.
b.
The Subadviser has complied with the Prospectus and Statement of Additional Information of the Designated Series and the Policies and Procedures of the Designated Series as adopted by the Designated Series Board of Trustees.
c.
I have no knowledge of any compliance violations except as disclosed in writing to the Virtus Compliance Department by me or by the Subadviser’s compliance administrator.
d.
The Subadviser has complied with the rules and regulations of the 33 Act and 40 Act, and such other regulations as may apply to the extent those rules and regulations pertain to the responsibilities of the Subadviser with respect to the Designated Series as outlined above.
e.
Since the submission of our most recent certification there have not been any divestments of securities of issuers that conduct or have direct investments in business operations in Sudan.
This certification relates solely to the Designated Series named above and may not be relied upon by any other fund or entity.
The Subadviser does not maintain the official books and records of the above Designated Series. The Subadviser’s records are based on its own portfolio management system, a record-keeping system that is not intended to serve as the Designated Series official accounting system. The Subadviser is not responsible for the preparation of the Report.
| | | | | | |
| [Name of Subadviser]
Donald C. Burke | | | | Date
| | | | | N/A | | | Over $100,000 | |
| Sarah E. Cogan | | | VVIT | | | | | | N/A | | | Over $100,000 | |
| Deborah A. DeCotis | | | VVIT | | | | | | N/A | | | Over $100,000 | |
| F. Ford Drummond | | | VVIT | | | | | | N/A | | | Over $100,000 | |
| Sidney E. Harris | | | VVIT | | | | | | N/A | | | Over $100,000 | |
| John R. Mallin | | | VVIT | | | | | | N/A | | | Over $100,000 | |
| Connie D. McDaniel | | | VVIT | | | | | | N/A | | | Over $100,000 | |
| Philip R. McLoughlin | | | VVIT | | | | | | N/A | | | Over $100,000 | |
| Geraldine M. McNamara | | | VVIT | | | | | | N/A | | | Over $100,000 | |
| R. Keith Walton | | | VVIT | | | | | | N/A | | | Over $100,000 | |
| Brian T. Zino | | | VVIT | | | | | | N/A | | | Over $100,000 | |
| | [Name of Authorized Signer] | | Interested Trustee | | | | | | | | | | |
| George R. Aylward | | [Title of Authorized Signer] | VVIT | | | | | | N/A | | | Over $100,000 | |
SCHEDULE FAPPENDIX E
DESIGNATED SERIESSHARE OWNERSHIP INFORMATION
Virtus SGA International Growth Series
| | | Shareholder | | | | Fund/Class | | | | Shares | | | | Percent
of Class | | |
| | | JEFFERSON NATIONAL LIFE INS CO
C/O CARLA HIGGS
10350 ORMSBY PARK PL STE 600
LOUISVILLE KY 40223 | | | | VIRTUS DUFF & PHELPS RL EST SEC SERIES-A | | | | 418,675.607 | | | | 9.93% | | |
| | VIRTUS NEWFLEET MLT-SCT INTR BD SERIES-A | | | | 1,190,022.128 | | | | 10.4% | | |
| | | NATIONWIDE LIFE & ANNUITY INS CO NWPP NWPP C/O IPO PORTFOLIO ACCOUNTING
ATTN MADELEINE MARCANO
PO BOX 182029
COLUMBUS OH 43218-2029 | | | | VIRTUS DUFF & PHELPS RL EST SEC SERIES-I | | | | 69,263.882 | | | | 13.68% | | |
| | VIRTUS DUFF & PHELPS RL EST SEC SERIES-A | | | | 228,975.281 | | | | 5.43% | | |
| | VIRTUS DUFF & PHELPS RL EST SEC SERIES-A | | | | 679,218.975 | | | | 16.1% | | |
| | VIRTUS DUFF & PHELPS RL EST SEC SERIES-I | | | | 63,107.997 | | | | 12.46% | | |
| | VIRTUS DUFF & PHELPS RL EST SEC SERIES-I | | | | 217,748.621 | | | | 42.99% | | |
| | VIRTUS DUFF & PHELPS RL EST SEC SERIES-I | | | | 31,620.058 | | | | 6.24% | | |
| | | PHL VARIABLE INSURANCE CO
PHLVIC C/O PETER HOSNER
31 TECH VALLEY DR
EAST GREENBUSH NY 12061-4134 | | | | VIRTUS DUFF & PHELPS RL EST SEC SERIES-A | | | | 1,483,015.556 | | | | 35.16% | | |
| | VIRTUS KAR CAPITAL GROWTH SERIES-A | | | | 911,735.387 | | | | 14.68% | | |
| | VIRTUS KAR EQUITY INCOME SERIES-A | | | | 3,089,895.760 | | | | 39.58% | | |
| | VIRTUS KAR SMALL-CAP GROWTH SERIES-A | | | | 1,058,538.922 | | | | 33.61% | | |
| | VIRTUS KAR SMALL-CAP VALUE SERIES-A | | | | 2,495,136.962 | | | | 55.38% | | |
| | VIRTUS NEWFLEET MLT-SCT INTR BD SERIES-A | | | | 4,803,484.060 | | | | 42% | | |
| | VIRTUS SGA INTERNATIONAL GROWTH SERIES-A | | | | 7,428,319.236 | | | | 66.65% | | |
| | VIRTUS STRATEGIC ALLOCATION SERIES-A | | | | 895,048.292 | | | | 15.89% | | |
| | | PHOENIX LIFE INSURANCE CO
PLIC C/O PETER HOSNER
31 TECH VALLEY DR
EAST GREENBUSH NY 12061-4134 | | | | VIRTUS DUFF & PHELPS RL EST SEC SERIES-A | | | | 1,158,267.507 | | | | 27.46% | | |
| | VIRTUS KAR CAPITAL GROWTH SERIES-A | | | | 5,291,738.470 | | | | 85.2% | | |
| | VIRTUS KAR EQUITY INCOME SERIES-A | | | | 4,659,747.741 | | | | 59.7% | | |
| | VIRTUS KAR SMALL-CAP GROWTH SERIES-A | | | | 2,035,325.234 | | | | 64.63% | | |
| | VIRTUS KAR SMALL-CAP VALUE SERIES-A | | | | 1,992,368.539 | | | | 44.22% | | |
| | VIRTUS NEWFLEET MLT-SCT INTR BD SERIES-A | | | | 3,597,435.242 | | | | 31.45% | | |
| | VIRTUS SGA INTERNATIONAL GROWTH SERIES-A | | | | 3,520,905.712 | | | | 31.59% | | |
| | VIRTUS STRATEGIC ALLOCATION SERIES-A | | | | 4,718,514.184 | | | | 83.79% | | |
| | | SYMETRA LIFE INSURANCE CO
ATTN ELIZABETH DAVIS
777 108TH AVE NE STE 1200
BELLEVUE WA 98004-5135 | | | | VIRTUS DUFF & PHELPS RL EST SEC SERIES-I | | | | 100,841.705 | | | | 19.91% | | |
| | VIRTUS KAR SMALL-CAP GROWTH SERIES-I | | | | 237,556.385 | | | | 93.51% | | |
| | | THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
1300 S CLINTON ST
FORT WAYNE IN 46802-3506 | | | | VIRTUS NEWFLEET MLT-SCT INTR BD SERIES-A | | | | 1,733,221.531 | | | | 15.15% | | |
| | VIRTUS NEWFLEET MLT-SCT INTR BD SERIES-I | | | | 196,046.627 | | | | 89.98% | | |
| | | Shareholder | | | | Fund/Class | | | | Shares | | | | Percent
of Class | | |
| | | VIRTUS PARTNERS INC
ATTN DAVID G HANLEY
100 PEARL ST FL 8
HARTFORD CT 06103-4500 | | | | VIRTUS KAR SMALL-CAP GROWTH SERIES-I | | | | 15,007.156 | | | | 5.91% | | |
| | VIRTUS NEWFLEET MLT-SCT INTR BD SERIES-I | | | | 14,635.937 | | | | 6.72% | | |
| | VIRTUS SGA INTERNATIONAL GROWTH SERIES-I | | | | 9,274.231 | | | | 100% | | |
PROXY TABULATORVIRTUS MUTUAL FUNDS P.O. BOX 9112 FARMINGDALE, NY 117359874 PROVIDENCE, RI 02940-8074 SCAN TO VIEW MATERIALS & VOTE To vote by Internet 1) Read the Proxy Statement and have the proxy card below at hand. 2) Go to website www.proxyvote.com or scan the QR Barcode above 3) Follow the instructions provided on the website. 4) To attend and vote at the meeting, please register by going to Virtual Shareholder Meeting at https:// www.viewproxy.com/VirtusFunds/broadridgevsm/ To vote by Telephone 1) Read the Proxy Statement and have the proxy card below at hand. 2) Call 1-800-690-6903 3) Follow the instructions. To vote by Mail 1) Read the Proxy Statement. 2) Check the appropriate boxboxes on the proxy card below. 3) Sign and date the proxy card. 4) Return the proxy card in the envelope provided. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E81876-Z75375D87000-S47214 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY 1. APPROVAL OF A SUBADVISORY AGREEMENT BY AND AMONG THE TRUST, VIRTUS INVESTMENT ADVISERS, INC. AND SUSTAINABLE GROWTH ADVISERS, LP.The Board of Trustees recommends a vote FOR AGAINST ABSTAIN PLEASE DATE AND SIGN EXACTLY AS YOUR NAME APPEARS HEREON. IF SHARES ARE REGISTERED IN MORE THAN ONE NAME, ALL PARTICIPANTS SHOULD SIGN THIS VOTING INSTRUCTION CARD; BUT IF ONE PARTICIPANT SIGNS, THIS SIGNATURE BINDS THE OTHER PARTICIPANT(S). WHEN SIGNING AS AN ATTORNEY, EXECUTOR, ADMINISTRATOR, AGENT, TRUSTEE, GUARDIAN, OR CUSTODIANthe following Election of Trustees For All Withhold All For All Except Nominees: 01) Sarah E. Cogan 02) Deborah A. DeCotis 03) F. Ford Drummond 04) Sidney E. Harris 05) Connie D. McDaniel 06) Keith R. Walton 07) Brian T. Zino To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the name(s) of the nominee(s) on the line below. The Board of Trustees recommends a vote FOR A MINOR, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY AN AUTHORIZED PERSON. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AN AUTHORIZED PERSON. Signature [PLEASE SIGN WITHIN BOX] Date Signature [Joint Owners] Date
Important Notice Regarding the Availability of Proxy Materialsfollowing proposal Abstain For Against 2. To approve a proposal to permit Virtus Investment Advisers, Inc., as the investment adviser to the Series, to hire, terminate and replace affiliated (both wholly-owned and partially-owned) and unaffiliated subadvisers for the Special Meeting: The NoticeSeries or to modify subadvisory agreements for the Series without shareholder approval, and Proxy Statement is available at www.proxyvote.com E81877-Z75375 VOTING INSTRUCTION CARD Virtus Variable Insurance Trust The undersigned, beingto permit the owner of a variable annuity contract or variable life insurance policy (each one a "Contract"Series to disclose advisory and together "Contracts") issued by of one of a number of participating insurance companies (eachsubadvisory fee information in an "Insurance Company" and, collectively, the "Insurance Companies"), hereby instructs the Insurance Company to cause the shares of the Trust allocable to Contract Owner's account identifiedaggregated manner. NOTE: Please sign exactly as your name(s) appear(s) on this Voting Instruction Card, to be voted at the Special Meeting of Shareholders of the Trust to be held at 10:00 a.m. Eastern Time on July 30, 2019, at the offices of Virtus Investment Partners, Inc. at One Financial Plaza, Hartford, Connecticut 06103,card. When signing as attorney, executor, administrator, trustee, guardian or as custodian for a minor, please sign your name and at any and all adjournments or postponements thereof, in the manner directed on the reverse with respect to the matters described in the notice and accompanying Proxy Statement for said meeting which have been received by the undersigned. The voting instruction will be votedgive your full title as marked. IF NOT MARKED, THIS VOTING INSTRUCTION WILL BE VOTED "FOR" THE PROPOSAL.such. If you do not provide voting instructions or this Voting Instruction Card is not returned properly executed, your votes will be cast by the Insurance Companysigning on behalf of a corporation, please sign the pertinent separate account infull corporate name and your name and indicate your title. If you are a partner signing for a partnership, please sign the same proportion as it votes shares held by those separate accounts for which it has receivedpartnership name, your name and indicate your title. Joint owners should each sign these instructions. THE PROXY FOR WHICH VOTING INSTRUCTIONS ARE BEING REQUESTED IS BEING SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST WHO RECOMMENDS YOU PROVIDE VOTING INSTRUCTIONS "FOR" THE PROPOSAL.
PROXY TABULATOR P.O. BOX 9112 FARMINGDALE, NY 11735 To vote by Internet 1) Read the Proxy StatementPlease sign, date and have the proxy card below at hand. 2) Go to website www.proxyvote.com 3) Follow the instructions provided on the website. To vote by Telephone 1) Read the Proxy Statement and have the proxy card below at hand. 2) Call 1-800-690-6903 3) Follow the instructions. To vote by Mail 1) Read the Proxy Statement. 2) Check the appropriate box on the proxy card below. 3) Sign and date the proxy card. 4) Return the proxy card in the envelope provided. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E81931-S87401 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY 1. APPROVAL OF A SUBADVISORY AGREEMENT BY AND AMONG THE TRUST, VIRTUS INVESTMENT ADVISERS, INC. AND SUSTAINABLE GROWTH ADVISERS, LP. FOR AGAINST ABSTAIN PLEASE DATE AND SIGN EXACTLY AS YOUR NAME APPEARS HEREON. CORPORATE PROXIES SHOULD BE SIGNED BY AN AUTHORIZED OFFICERreturn. Signature [PLEASE SIGN WITHIN BOX] Date Signature [Joint Owners] Date
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting:The Notice and Proxy Statement is available at www.proxyvote.com. E81931-S87401D87001-S47214 PROXY PROXY VIRTUS VARIABLE INSURANCE TRUSTVirtus Variable Insurance Trust SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON JULY 30, 2019 The undersigned shareholder of the Trust hereby appoints Jennifer S. Fromm, Ann Flood and Kevin J. Carr and any and each of them, proxies of the undersigned, with power of substitution to each, for and in the name of the undersigned to vote and act upon all matters (unless and except as expressly limited below) at the Special Meeting of Shareholders of the Trust to be held at 10:00 a.m. Eastern Time on July 30, 2019 at the offices of Virtus Investment Partners, Inc. at One Financial Plaza, Hartford, Connecticut 06103, notice of which meeting and the Proxy Statement enclosed with the same have been received by the undersigned, or at any and all adjournments or postponements thereof, with respect to all shares of the Trust for which the undersigned is entitled to vote or with respect to which the undersigned would be entitled to vote or act, with all the powers the undersigned would possess if personally present voting with respect to the specific matters set forth on the reverse. Any proxies heretofore given by the undersigned with respect to said meeting are hereby revoked.June 28, 2022 THIS PROXY IS BEING SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST WHO RECOMMENDS A VOTE "FOR" THE PROPOSAL. SPECIFY DESIRED ACTION BY CHECK MARK IN THE APPROPRIATE SPACE. IN THE ABSENCE OF SUCH SPECIFICATION, THE PERSONS NAMED AS PROXIES HAVE DISCRETIONARY AUTHORITY, WHICH THEY INTEND TO EXERCISE BY VOTING SHARES REPRESENTED BY THIS PROXY IN FAVOR OF THE PROPOSAL.TRUSTEES. The undersigned shareholder(s) of the Virtus Variable Insurance Trust (the "Trust"), revoking previous proxies, hereby appoint(s) George R. Aylward, Kevin J. Carr and Jennifer S. Fromm, or any one of them true and lawful attorneys with power of substitution of each, to vote all shares which the undersigned is entitled to vote, at the Special Meeting of Shareholders of the Series to be held virtually on June 28, 2022 at 3:00 Eastern Time, and at any adjournment thereof as indicated on the reverse side. In their discretion, the proxy holders named above are authorized to vote upon such other matters as may properly come before the meeting. Any shareholders wishing to participate in the Special Meeting by means of remote communication can do so at https://www.viewproxy.com/VirtusFunds/broadridgevsm/ Receipt of the Notice of the Special Meeting and the accompanying Proxy Statement is hereby acknowledged. The shares represented hereby will be voted as indicated or FOR the proposal Continued and to be signed on reverse side
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