UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities Exchange
Act of 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14c-5(d)(2))
[X] Definitive Information Statement
THE PHOENIX EDGE SERIES FUND
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(Name of Registrant As Specified In Charter)
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THE PHOENIX EDGE SERIES FUND
155 Federal Street
Boston, Massachusetts 02110
July 30, 2009
Dear Contractowner:
As discussed in more detail in the enclosed Information Statement, effective as
of May 1, 2009, AllianceBernstein L.P. ("AllianceBernstein") is no longer the
subadvisor to the Phoenix-Sanford Bernstein Mid-Cap Value Series and the
Phoenix-Sanford Bernstein Small-Cap Value Series, respectively (collectively,
the "Series"), each a series of The Phoenix Edge Series Fund (the "Fund").
Phoenix Variable Advisors, Inc. ("PVA") hired Westwood Management Corp
("Westwood") to replace AllianceBernstein on May 1, 2009. On the same day, PVA
terminated the current investment advisory agreement with the Series and entered
into a new investment advisory agreement with the Series. PVA, the investment
advisor to the Series, and the Fund have been granted an exemptive order (the
"Order") from the Securities and Exchange Commission ("SEC") that permits PVA
and the Fund to hire, terminate, and replace investment advisors and subadvisors
without shareholder approval. PVA has the responsibility to oversee subadvisors
and recommends the hiring, termination, and replacement of subadvisors to the
Fund's Board of Trustees.
You have invested in shares of one or both of the Series through your variable
life insurance policy and/or your variable annuity contract, issued by Phoenix
Life Insurance Company, PHL Variable Insurance Company, or Phoenix Life and
Annuity Company. PVA and the Funds are providing you with the enclosed
Information Statement to inform you about the subadvisory changes.
If you should have any questions regarding these changes, please feel free to
call Phoenix Variable Products Customer Service at (800) 541-0171. Thank you for
your continued investment in The Phoenix Edge Series Fund.
Sincerely,
/s/ Philip K. Polkinghorn
Philip K. Polkinghorn
President
INFORMATION STATEMENT
THE PHOENIX EDGE SERIES FUND
155 Federal Street
Boston, Massachusetts 02110
The Phoenix Edge Series Fund (the "Fund") is a mutual fund trust that serves as
an investment vehicle for variable life insurance policies and variable annuity
contracts (collectively, "Contracts") issued by the separate accounts of Phoenix
Life Insurance Company ("PLIC"), PHL Variable Insurance Company ("PHL Variable")
and Phoenix Life and Annuity Company ("PLAC") (collectively, "Phoenix") to
owners of the Contracts ("Contractowners"). Phoenix is the sole shareholder of
record of the Fund. Some or the entire portion of your Contract is invested in
shares of one or more series of the Fund.
The Fund is an open-end management investment company registered with the
Securities and Exchange Commission ("SEC") under the Investment Company Act of
1940, as amended ("1940 Act"). The Fund has 18 separate investment portfolios,
including the Phoenix-Sanford Bernstein Mid-CapValue Series ("Mid-Cap") and the
Phoenix-Sanford Bernstein Small-Cap Value Series ("Small-Cap") (collectively,
the "Series"). Phoenix Variable Advisors, Inc. ("PVA") acts as the investment
advisor to the Series and is located at One American Row, Hartford, CT
06103-2899.
As of May 1, 2009 AllianceBernstein, L.P. ("AllianceBernstein") ceased serving
as subadvisor for Mid-Cap and Small-Cap and PVA hired Westwood Management Corp.
("Westwood") to serve as the new subadvisor for the Series. Westwood's principal
place of business is located at 200 Crescent Court, Suite 1200, Dallas, TX
57201.
PVA and the Fund have been granted an exemptive order (the "Order") from the SEC
that permits PVA and the Fund to amend investment advisory and subadvisory
agreements, hire, terminate, and replace subadvisors without shareholder
approval, including, without limitation, the replacement or reinstatement of any
advisor or subadvisor with respect to which a subadvisory agreement has
automatically terminated as a result of an assignment. PVA has the
responsibility to oversee advisors or subadvisors and recommend their hiring,
termination, and replacement to the Fund's Board of Trustees. As a condition of
the Order, PVA and the Fund must provide you with this Information Statement to
update you with respect to these advisory or subadvisory changes. More
information about the Order is provided below. This Information Statement is
being sent to shareholders on or about July 30, 2009.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
THE TRANSACTION
---------------
At a regular meeting of the Fund's Board of Trustees ("Board") held on March
4-5, 2009, PVA reported to the Board that as part of the subadvisor oversight
process, PVA was recommending to the Board that AllianceBernstein be terminated
as subadvisor to Mid-Cap and Small-Cap. PVA had requested AllianceBernstein to
reduce its subadvisory fees and performance for the Series had historically been
better than more recent performance. As a result, PVA recommended that the Board
approve Westwood as the new subadvisor for both Mid-Cap and Small-Cap. At the
meeting, PVA also recommended that its investment advisory agreement be
terminated with the Series and a new investment advisory agreement be approved
for the sole purpose of adding "breakpoints" to the investment advisory fee
schedule. The Board approved the termination of the investment advisory
agreement between PVA and the Fund for the Mid-Cap and Small-Cap ("Old Advisory
Agreement"). The Board then approved the new investment advisory agreement for
the two series between PVA and the Fund ("New Advisory Agreement"). The Board
also approved the termination of the Subadvisory Agreements between PVA and
AllianceBernstein with respect to Mid-Cap ("Mid-Cap Old Subadvisory Agreement")
and Small-Cap ("Small-Cap Old Subadvisory Agreement") (together, "Old
Subadvisory Agreements") as of May 1, 2009. The Board then approved the
appointment of Westwood as successor subadvisor for Mid-Cap and Small-Cap and
approved the new subadvisory agreements between PVA and Westwood to be effective
May 1, 2009 (the "Mid-Cap New Subadvisory Agreement" and the "Small-Cap New
Subadvisory Agreement") (together "New Subadvisory Agreements"). A copy of the
New Subadvisory Agreements and New Investment Advisory Agreement are attached as
Exhibits A, B and C to this Information Statement.
1
On or about March 9, 2009, PVA informed AllianceBernstein that it would
terminate the Mid-Cap Old Subadvisory Agreement and the Small-Cap Old
Subadvisory Agreements no later than May 1, 2009 and that AllianceBernstein
would be terminated as subadvisor to Mid-Cap and Small-Cap.
The New Investment Advisory and Subadvisory Agreements were each approved by all
members of the Board, including a majority of the Trustees who are not
"interested persons" (within the meaning of the 1940 Act) of the Fund
("Disinterested Trustees").
Contractowners who have directed the allocation of their investment to a
subaccount corresponding to a Series will receive this Information Statement.
Subject to the Fund's Disruptive Trading policy designed to discourage and
prevent market timing and excessive trading by investors, which can be harmful
to other investors of the Fund's Series, Contractowners may at any time elect to
transfer their investment into any other subaccount available through their
Contracts without other restrictions.
THE OLD ADVISORY AGREEMENT
--------------------------
PVA had entered into the Old Advisory Agreement with the Series as of December
1, 2008. Under the Old Advisory Agreement, the annual rate of fees paid to PVA
by the Series was 1.05% on average daily net assets of the Series. Under the Old
Advisory Agreement, PVA had the responsibility to provide a continuous
investment program or to hire a subadvisor to make the decisions regarding the
purchase, retention, or disposition of securities or other assets that the
Series may have owned or contemplated acquiring from time to time. All services
under the Old Advisory Agreement must have been provided in accordance with the
Fund's Declaration of Trust, as amended, any policies adopted by the Board, and
the investment objectives, policies and restrictions of the Series as disclosed
in the Funds' registration statement on file with the SEC, as amended from time
to time.
THE OLD SUBADVISORY AGREEMENTS
------------------------------
Mid-Cap
- -------
Under the Mid-Cap Old Subadvisory Agreement between PVA and AllianceBernstein,
dated October 2, 2000 and amended April 9, 2001 and September 4, 2003,
AllianceBernstein provided portfolio management services for Mid-Cap. The annual
rate of fees paid to AllianceBernstein by PVA (not by the Series) was 0.80% of
the first $25 million of average daily net assets and 0.60% of net assets
thereafter in Mid-Cap. The advisory fee paid to PVA by the Series was 1.05% of
the average daily net assets in Mid-Cap.
Under the Mid-Cap Old Subadvisory Agreement, AllianceBernstein provided a
continuous investment program to Mid-Cap, including making decisions regarding
the purchase, retention or disposition of securities or other assets that
Mid-Cap may have owned or contemplated acquiring from time to time. All services
under the Mid-Cap Old Subadvisory Agreement must have been provided in
accordance with the Fund's Declaration of Trust, as amended, any policies
adopted by the Board, and the investment objectives, policies and restrictions
of Mid-Cap as disclosed in the Fund's registration statement on file with the
SEC, as amended from time to time.
Small-Cap
- ---------
Under the Small-Cap Old Subadvisory Agreement between PVA and AllianceBernstein,
dated September 28, 2000 and amended September 4, 2003, AllianceBernstein
provided portfolio management services for Small-Cap. The annual rate of fees
paid to AllianceBernstein by PVA (not by the Series) was 0.9000% on the first
$10 million of nets assets; 0.7875% on the next $10 million and 0.6750% on net
assets in excess of $20 million of the average daily net assets of Small-Cap.
The advisory fee paid to PVA by the Series was 1.05% of the average daily net
assets in Small-Cap.
Under the Small-Cap Old Subadvisory Agreement, AllianceBernstein provided a
continuous investment program to Small-Cap, including making decisions regarding
the purchase, retention or disposition of securities or other assets that
Small-Cap may have owned or contemplated acquiring from time to time. All
services under the Small-Cap Old Subadvisory Agreement must have been provided
in accordance with the Fund's Declaration of Trust, as
2
amended, any policies adopted by the Board, and the investment objectives,
policies and restrictions of Small-Cap as disclosed in the Fund's registration
statement on file with the SEC, as amended from time to time.
AllianceBernstein had the exclusive authority to manage the investment and
reinvestment of the assets of the Series, subject to the discretion and control
of PVA and the Board. AllianceBernstein provided an investment program for
Mid-Cap and Small-Cap, respectively, consistent with each Series' investment
objectives, based upon the development, review and adjustment of the investment
policies approved from time to time by the Board and PVA in consultation with
AllianceBernstein. AllianceBernstein agreed to use its best professional
judgment to make investment decisions for the Series in accordance with the
terms of the Old Subadvisory Agreements.
Unless instructed otherwise by PVA, AllianceBernstein had the authority and
discretion to place all orders for the purchase and sale of investments with
brokers or dealers selected by AllianceBernstein for the Series, which may have
included brokers or dealers affiliated with AllianceBernstein. AllianceBernstein
was instructed to use its best efforts to obtain the best execution of
transactions at prices that were advantageous to the Series and at commission
rates that were reasonable in relation to the benefits received.
AllianceBernstein may have selected brokers or dealers on the basis that they
provided brokerage, research, or other services or products to a Series or other
accounts serviced by AllianceBernstein. AllianceBernstein may have placed
transactions with a broker or dealer with whom it had negotiated a commission in
excess of the commission another broker or dealer would have charged for
effecting that transaction, if it had determined in good faith that such amount
of commission was reasonable in relation to the value of the brokerage and
research provided by the broker or dealer, viewed in terms of either that
particular transaction or on all such transactions, taken as a whole, for the
respective Series and other accounts over which AllianceBernstein exercised
investment discretion. Not all services or products provided by brokers or
dealers that were generated with Series commissions were necessarily used by
AllianceBernstein in managing Mid-Cap and Small-Cap, respectively, but may have
been allocated among other accounts, as appropriate.
For the Series' fiscal year ended December 31, 2008, the fees paid to PVA net of
the reimbursements under the expense limitation agreement discussed below, as
applicable, or, as a result of such reimbursements, the net amount paid by PVA
to each Series, were as follows:
------------------------------------------------------------------------
SERIES AMOUNT PAID TO PVA
------------------------------------------------------------------------
Mid-Cap(1) $1,261,374
------------------------------------------------------------------------
Small-Cap(1) $580,747
------------------------------------------------------------------------
The subadvisory fees paid by PVA to AllianceBernstein, respectively, for the
fiscal year ended December 31, 2008 were as follows:
------------------------------------------------------------------------
AMOUNT PAID BY PVA TO
SERIES ALLIANCEBERNSTEIN
------------------------------------------------------------------------
Mid-Cap $783,079
------------------------------------------------------------------------
Small-Cap $436,820
------------------------------------------------------------------------
- --------------------
(1) The Trust entered into an expense limitation agreement with PVA whereby PVA
had agreed to reimburse Mid-Cap and Small-Cap for expenses necessary or
appropriate for the operation of Mid-Cap and Small-Cap (excluding advisory and
management fees, Rule 12b-1 fees, taxes, interest, brokerage commissions,
expenses incurred in connection with any merger or reorganization, and
extraordinary expenses such as litigation expenses) to the extent that such
expenses exceed 0.25% of Mid-Cap's and Small-Cap's average net assets. This
expense limitation agreement is effective at this rate as of April 30, 2009 and
will continue through at least April 30, 2010 to the extent expenses exceed
0.25% of Mid-Cap's and Small-Cap's average net assets.
3
The Old Subadvisory Agreements remained in full force and effect only so long as
their continuance was specifically approved at least annually by the Trustees in
accordance with Section 15(a) of the 1940 Act, and by the majority vote of the
Disinterested Trustees in accordance with the requirement of Section 15(c) of
the 1940 Act. The Old Subadvisory Agreements could be terminated by either
party, without penalty, immediately upon written notice to the other party in
the event of a breach of any provision thereof by the party so notified, or
otherwise could be terminated by PVA or AllianceBernstein, as appropriate, the
Trustees, or the vote of a majority of the outstanding voting securities of a
Series upon sixty days' written notice to the other party. Any such termination
would not have affected any liability of either party with respect to any claim
or matter on which any party had given written notice to any other party prior
to termination and until such liability had been finally settled. The Mid-Cap
Old Subadvisory Agreement and the Small-Cap Old Subadvisory Agreement was last
considered and renewed by the Board at a meeting held on November 17-18, 2008.
THE NEW ADVISORY AGREEMENT
--------------------------
The New Advisory Agreement between PVA and the Fund provides that PVA will
provide a continuous investment program or hire a subadvisor to make the
decisions regarding the purchase, retention, or disposition of securities or
other assets that the Series may have owned or contemplated acquiring from time
to time. The monthly advisory fees payable to PVA by Westwood is set forth in
the table below:
------------------------------------------------------------------------
SERIES ADVISORY FEE PAID BY THE SERIES TO PVA
------------------------------------------------------------------------
Mid-Cap 1.05% on the first $100 million
1.00% on the next $50 million
0.95% on assets over $150 million of average daily
net assets
------------------------------------------------------------------------
Small-Cap 1.05% on the first $100 million
1.00% on the next $50 million
0.95% on assets over $150 million of average
daily net assets
------------------------------------------------------------------------
The differences between the Old and New Advisory Agreements are the new dates
and the reduction in investment advisory fees by means of breakpoints at
certain asset levels.
The following table shows for each Series the actual aggregate advisory fees
paid to AllianceBernstein for the fiscal year ended December 31, 2008, under the
Old Advisory Agreements and what the aggregate advisory fee would have been if
the advisory fee under the New Advisory Agreements had been in effect during
that period:
- ----------------------------------------------------------------------------------------------------------------------
Actual Aggregate Advisory Pro Forma Aggregate Advisory
Fee paid under the Old Fee paid under the New
Advisory Agreement for Advisory Agreement for % Difference Between
Fiscal Year Ended December Fiscal Year Ended December Actual and Pro Forma
Series 31, 2008 31, 2008 Aggregate Advisory Fees
- ----------------------------------------------------------------------------------------------------------------------
Mid-Cap $1,282,888.48 $1,282,888.49 0.0%(2)
- ----------------------------------------------------------------------------------------------------------------------
Small-Cap $626,997.71 $626,997.71 0.0%(2)
- ----------------------------------------------------------------------------------------------------------------------
- ----------------
(2) The breakpoint for the lower fee is $100 million in average daily net
assets.
4
THE NEW SUBADVISORY AGREEMENTS
------------------------------
The New Subadvisory Agreements between PVA and Westwood provide that Westwood
will provide a continuous investment program to each Series. The monthly
subadvisory fees payable to Westwood by PVA, not by each Series, is set forth in
the table below:
---------------------------------------------------------------------------
SERIES SUBADVISORY FEE PAYABLE TO WESTWOOD
---------------------------------------------------------------------------
Mid-Cap Series 0.65% on the first $50 million of average daily net
assets;
0.60% on the next $50 million average daily net assets;
0.55% on the next $50 million average daily net assets;
0.50% on assets thereafter
---------------------------------------------------------------------------
Small-Cap Series 0.70% on the first $50 million of average daily net
assets
0.62% on assets thereon
---------------------------------------------------------------------------
There are no differences between the Old and New Subadvisory Agreements except
the subadvisory fees, the change in dates and subadvisors.
The fees are calculated daily and paid monthly. As of December 31, 2008, the
asset size of Mid-Cap was $84,393,366 and for the Small-Cap Series was
$35,710,235.
The following table shows for each Series the actual aggregate subadvisory fee
paid by PVA for the fiscal year ended December 31, 2008, under the Old
Subadvisory Agreements and what the aggregate subadvisory fee would have been if
the subadvisory fee under the New Subadvisory Agreements had been in effect
during that period:
- ----------------------------------------------------------------------------------------------------------------------
Actual Aggregate Subadvisory Pro Forma Aggregate
Fee paid under the Old Subadvisory Fee paid under
Subadvisory Agreements for the New Subadvisory % Difference Between
Fiscal Year Ended December Agreements for Fiscal Year Actual and Pro Forma
Series 31, 2008 Ended December 31, 2008 Aggregate Subadvisory Fees
- ----------------------------------------------------------------------------------------------------------------------
Mid-Cap Series $783,079 $745,563 (4.8%)
- ----------------------------------------------------------------------------------------------------------------------
Small-Cap Series $436,820 $420,750 (3.68%)
- ----------------------------------------------------------------------------------------------------------------------
The services provided by Westwood under the New Subadvisory Agreements do
not differ materially in nature from the services that were provided by
AllianceBernstein under the Old Subadvisory Agreements. In this
regard, under the New Subadvisory Agreements, Westwood will provide investment
subadvisory services to the Series, including making decisions regarding the
purchase, retention or disposition of securities or other assets that the Series
may own or contemplate acquiring from time to time. All services under the
New Subadvisory Agreements must be provided in accordance with the Funds'
Declaration of Trust, as amended, any policies adopted by the Board, and the
investment policies of the Series as disclosed in the Funds' registration
statement on file with the SEC, as amended from time to time.
Westwood will have the exclusive authority to manage the investment and
reinvestment of assets of the Series, subject to the discretion and control of
PVA and the Board. Westwood will provide an investment program for each
5
Series consistent with each Series' investment objectives based upon the
development, review and adjustment of investment policies approved from time to
time by the Board and PVA, in consultation with Westwood. Westwood has agreed to
use its best professional judgment to make investment decisions for each of the
Series in accordance with the terms of the New Subadvisory Agreements.
Unless otherwise instructed by PVA, Westwood will place all orders for the
purchase and sale of investments for each Series with brokers or dealers
selected by Westwood. Westwood has been instructed to use its best efforts to
obtain best execution of transactions at prices that are advantageous to each
Series and at commission rates that are reasonable in relation to the benefits
received. Westwood may select brokers or dealers on the basis that they provide
brokerage, research, or other services or products to a Series or other accounts
serviced by Westwood. Westwood may place transactions with a broker or dealer
with whom it has negotiated a commission in excess of the commission another
broker or dealer would have charged for effecting that transaction, if Westwood
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research provided by the broker or
dealer, viewed in terms of either that particular transaction or on all
transactions, taken as a whole, for each Series and other accounts over which
Westwood exercises investment discretion. Not all Series' research or other
services or products will necessarily be used by Westwood in managing the two
Series, but may be allocated among other accounts, as appropriate.
Furthermore, Westwood agrees to make its officers and employees available from
time to time to consult with officers and employees of PVA to review the
investment policies and investment affairs of each Series and to report to PVA
and the Fund's Board of Trustees with respect to the investment philosophy,
assumptions, strategies and other information used in connection with the
portfolio management.
Unless terminated, the New Subadvisory Agreements will remain in full force and
effect until December 31, 2010, and thereafter, only so long as their
continuance has been specifically approved at least annually by the Board in
accordance with Section 15(a) of the 1940 Act, and by the majority vote of the
Disinterested Trustees of the Board in accordance with Section 15(c).
BOARD CONSIDERATIONS
--------------------
The Board, including a majority of the Disinterested Trustees, approved the New
Advisory Agreement for the Series between PVA and the Fund. As part of the
process, the Board considered several factors, including PVA's ten-year history
as the investment advisor for the Series, its resources, compliance history, as
well as the overall nature, extent and quality of the services PVA had provided
to the Series in the past. In addition, the Board considered that the New
Advisory Agreement for the Series would be the same as the Old Advisory
Agreement, except for the new dates and the reduction in investment advisory
fees by means of breakpoints at certain asset levels.
PVA further recommended that Alliance Bernstein be terminated and the Board
determined that it was in the best interest of the shareholders of Mid-Cap and
Small-Cap to replace AllianceBernstein as subadvisor to the Series. The Board,
including a majority of the Disinterested Trustees, then approved the proposal
by PVA to replace AllianceBernstein with Westwood as subadvisor to the Series.
In connection with the consideration of PVA's proposal to replace
AllianceBernstein with Westwood, the Board received, in advance of the meeting,
information in the form of an extensive questionnaire completed by Westwood
concerning a number of issues, including its investment philosophy, resources,
operations and compliance structure. In this context, the Board considered PVA's
quantitative and qualitative evaluation of Westwood's skills and abilities in
managing assets pursuant to specific investment styles similar to the styles of
the Series. The Board had further benefit of a presentation made by Westwood's
senior management personnel where a number of issues, including Westwood's
history, investment approach, investment strategies, portfolio turnover rates,
assets under management, personnel, compliance procedures and the firm's overall
performance, were reviewed and discussed. The Board considered Westwood's
experience with managing other funds as well as the overall nature, extent, and
quality of the services to be provided by Westwood and whether the cost to PVA
of these services would be reasonable. The Board considered the economic
viability of Westwood and was satisfied that the financial statements of
Westwood indicated it was sufficiently capitalized. The Board also considered
the investment performance of Westwood with respect to its advice given to
similar mutual funds. The Board noted that with respect to Mid-Cap, the Westwood
SMid Cap Equity account (a separate account with substantially similar
6
investment objectives, policies and strategies as those of the Series)
outperformed the Russell 2500 Value Index for the period January 1, 2002 through
December 31, 2008. With respect to Small-Cap, the Board noted that the Westwood
Small Cap Value account (a separate account with substantially similar
investment objectives, policies and strategies as those of the Series)
outperformed the Russell 2000 Value Index for the period January 1, 2002 through
December 31, 2008. The Board further noted that Westwood's consistent investment
style had produced strong results over a long period of time for both of the
comparable accounts.
The Board noted that the fees under the New Subadvisory Agreements would be paid
by PVA out of the advisory fees that it receives under its New Advisory
Agreement with the Fund, and not by the Series. For this reason, the expected
profitability to Westwood of its relationship with each Series or the potential
economies of scale in Westwood's advice to the Series was not material a factor
in the Board's deliberations. Based on all the foregoing reasons, the Board
concluded that the proposed New Subadvisory Agreements were favorable for
shareholders because shareholders could benefit from management of the Series'
assets by the investment teams at Westwood.
THE ORDER
---------
The Fund and PVA have obtained an order under Section 6(c) of the 1940 Act
granting exemptions from Section 15(a) of the 1940 Act and Rule 18f-2 under the
1940 Act to permit the Fund and PVA to enter into, and materially amend,
subadvisory agreements without shareholder approval. Therefore, the Fund and PVA
have the right, subject to prior approval by the Board, to hire, terminate, and
replace subadvisors without the approval of the shareholders of the Series,
including, without limitation, to replace or reinstate any subadvisor with
respect to which a subadvisory agreement has automatically terminated as a
result of an assignment. PVA has the responsibility to oversee subadvisors and
recommend their hiring, termination, and replacement to the Board. The Order
requires that shareholders of a Series be provided with an information statement
such as this one within 90 days of any change in subadvisors.
DISCLOSURE REGARDING VOTING SECURITIES
--------------------------------------
The shares of the Fund are not offered directly to the public. Shares of the
Fund currently are offered to certain separate accounts in order to fund
Contracts issued by PLIC, PHL Variable and PLAC. Investments in the Fund may
occur only by purchasing a Contract and directing the allocation of your
purchase payment(s) to the subaccount(s) that correspond to a series of the
Fund. The subaccounts, in turn, invest in shares of a corresponding series. Not
all series may be offered through a particular Contract. No one person
(including any "group" as that term is used in Section 13(d) (3) of the Exchange
Act) owns beneficially of record 5% or more of the outstanding shares of a
series. Outstanding shares of beneficial interest of a series beneficially owned
under a contract or policy by the Trustees and the executive officers of the
Fund, as a group, is less than 1%.
ADDITIONAL INFORMATION
----------------------
Westwood and its affiliates had approximately $ 7.2 billion in assets under
management as of December 31, 2008. None of the directors or officers of
Westwood is a Trustee or officer of the Fund. There are no Fund Trustees in any
material transactions, directly or indirectly, to which the subadvisor to the
Series was or is a party to the transaction. There are no financial conditions
of the subadvisor that are reasonably likely to impair the financial ability of
the subadvisor to fulfill its commitment to the Fund under the New Subadvisory
Agreements.
Portfolio Managers -- Mid-Cap
Mid-Cap is managed by a portfolio management team. Westwood also manages
institutional separate accounts and is the adviser/subadvisor to other mutual
funds. The investment process is the same for similar accounts, including
Mid-Cap, and is driven by proprietary team-oriented, in-depth, fundamental
research. The investment research team is organized by industry coverage and
supports all of the accounts managed in each of Westwood's investment
strategies. Each of Westwood's investment strategies is managed by a portfolio
management team. Weekly research meetings provide a forum where Westwood's
investment professionals discuss current investment ideas within their assigned
industries. Generally, the entire portfolio management team, or a sub-set of the
team, then debates the merits of recommendations, taking into account the
prevailing market environment, the portfolio's
7
current composition, and the relative value of alternative investments.
Investment decisions are made by majority agreement of the portfolio management
team.
Although Mid-Cap is managed by a portfolio management team, Westwood has
identified the following team members as those with the most significant
responsibility for Mid-Cap's assets. This list does not include all members of
the investment team.
Ms. Susan M. Byrne has served as Chairman and Chief Investment Officer since
founding Westwood in April 1983. Ms. Byrne has served on the portfolio team for
Mid-Cap since May 1, 2009. Ms. Byrne participates in the investment decision
process during the portfolio team meetings in which the team decides the
stock/weight selection for the model portfolio.
Ms. Kellie R. Stark, CFA, has served as Senior Vice President for Westwood since
July 2004. Prior to this appointment, she served as Vice President and Associate
Portfolio Manager for Westwood from July 1997 to July 2004. She joined Westwood
in 1993 and has served on the portfolio team for Mid-Cap since May 1, 2009. Ms.
Stark participates in the investment decision process during the portfolio team
meetings in which the team decides the stock/weight selection for the model
portfolio.
Mr. David S. Spika, CFA, has served as Vice President and Investment Strategist
since joining Westwood in October 2003. Mr. Spika has served on the portfolio
team for Mid-Cap since May 1, 2009. Prior to joining Westwood, he spent 17 years
with Bank of America, where he served in a variety of roles, including portfolio
manager in the Private Bank and, most recently, as an institutional portfolio
manager and investment strategist for Banc of America Capital Management. Mr.
Spika participates in the investment decision process during the portfolio team
meetings in which the team decides the stock/weight selection for the target
portfolio.
Mr. Ragen R. Stienke, CFA, has served as Vice President and Research Analyst for
Westwood since July 2006. Prior to this appointment, Mr. Stienke served as
Assistant Vice President and Research Analyst from November 2004, when he joined
Westwood, until July 2006. Prior to joining Westwood, he worked for UBS
Investment Bank in the research department, where he spent 3 years as a software
strategist and 2 years as a U.S. equity strategist. Mr. Stienke has served on
the portfolio team for the Mid-Cap since May 1, 2009. He participates in the
investment decision process during the portfolio team meetings in which the team
decides the stock/weight selection for the model portfolio.
Mr. Corey Henegar, CFA, has served as Vice President and Research Analyst for
Westwood since July 2007. Prior to this appointment, he served as Assistant Vice
President and Research Analyst for Westwood from July 2004 until July 2006, as
Research Analyst from July 2002 to July 2004, and as Assistant Research Analyst
from June 2001 to July 2002. Mr. Henegar has served on the portfolio team for
Mid-Cap since May 1, 2009. He participates in the investment decision process
during the portfolio team meetings in which the team decides the stock/weight
selection for the model portfolio.
The Fund's SAI provides additional information about the portfolio managers'
compensation, other accounts managed, and ownership of shares in this Series.
Portfolio Managers -- Small-Cap
Although Small-Cap is managed by a portfolio management team, the Subadvisor has
identified the following team members as those with the most significant
responsibility for Small-Cap's assets. This list does not include all members of
the investment team.
Mr. Christopher J. MacDonald, CFA, has served as Vice President and Senior
Research Analyst for Westwood since July 2007. Prior to that, Mr. MacDonald
served as Vice President and Research Analyst of Westwood from 1997 until July
2007. He joined Westwood in 1994 and has served on the portfolio team for
Small-Cap since May 1, 2009. Mr. MacDonald participates in the investment
decision process during the portfolio team meetings in which the team determines
the stock/weight selection for the model portfolio.
8
Mr. Scott D. Lawson, CFA, has served as Vice President and Senior Research
Analyst since joining Westwood in October 2003. Prior to joining Westwood, Mr.
Lawson was an Assistant Portfolio Manager at Bank of America from 2000 to 2003.
From 1995 to 2000, he was a Research Analyst with Mississippi Valley Advisors,
specializing in the Technology and Industrial sectors. Mr. Lawson has served on
the portfolio team for Small-Cap since May 1, 2009. Mr. Lawson participates in
the investment decision process during the portfolio team meetings in which the
team decides the stock/weight selection for the target portfolio.
Ms. Lisa Dong, CFA, has served as Vice President and Research Analyst for
Westwood since June 2005. Prior to this appointment, she served as Assistant
Vice President and Research Analyst from October 2001 to July 2005, as Research
Analyst from June 2001 to October 2001, and as Assistant Research Analyst from
December 2000 to June 2001. Ms. Dong has served on the portfolio team for
Small-Cap since May 1, 2009. Ms. Dong participates in the investment decision
process during the portfolio team meetings in which the team decides the
stock/weight selection for the model portfolio.
Ms. Kellie R. Stark, CFA, has served as Senior Vice President for Westwood since
July 2004. Prior to this appointment, she served as Vice President and Associate
Portfolio Manager for Westwood from July 1997 to July 2004. She joined Westwood
in 1993 and has served on the portfolio team for Small-Cap since May 1, 2009.
Ms. Stark participates in the investment decision process during the portfolio
team meetings in which the team decides the stock/weight selection for the model
portfolio.
Mr. Corey Henegar, CFA, has served as Vice President and Research Analyst for
Westwood since July 2007. Prior to this appointment, he served Westwood as
Assistant Vice President and Research Analyst from July 2004 until July 2006, as
Research Analyst from July 2002 to July 2004, and as Assistant Research Analyst
from June 2001 to July 2002. Mr. Henegar has served on the portfolio team for
Small-Cap since May 1, 2009. He participates in the investment decision process
during the portfolio team meetings in which the team decides the stock/weight
selection for the model portfolio.
The Fund's SAI provides additional information about the portfolio managers'
compensation, other accounts managed, and ownership of shares in this Series.
Listed below are the names of the principal executive officers and each director
of Westwood. None are Trustees or officers of the Fund.
- ----------------------------------------------------------------------------------------------------------------
NAME POSITION WITH SUBADVISOR & PRINCIPAL OCCUPATION POSITION WITH FUND
- ----------------------------------------------------------------------------------------------------------------
Susan M. Byrne Chairman, Chief Investment Officer, Westwood Holdings None
Group, Inc.
- ----------------------------------------------------------------------------------------------------------------
Brian O. Casey President, Chief Executive Officer, Westwood Holdings None
Group, Inc.
- ----------------------------------------------------------------------------------------------------------------
Ray E. Wooldridge Director, Westwood Holdings Group, Inc. None
- ----------------------------------------------------------------------------------------------------------------
Tom C. Davis Director, Westwood Holdings Group, Inc. None
- ----------------------------------------------------------------------------------------------------------------
Jon L. Mosle, Jr. Director, Westwood Holdings Group, Inc. None
- ----------------------------------------------------------------------------------------------------------------
Frederick R. Meyer Director, Westwood Holdings Group, Inc. None
- ----------------------------------------------------------------------------------------------------------------
Richard M. Frank Director, Westwood Holdings Group, Inc. None
- ----------------------------------------------------------------------------------------------------------------
Robert D. McTeer Director, Westwood Holdings Group, Inc. None
- ----------------------------------------------------------------------------------------------------------------
Geoffrey R. Norman Director, Westwood Holdings Group, Inc. None
- ----------------------------------------------------------------------------------------------------------------
9
As of January 1, 2009, Westwood acted as an investment advisor to four mutual
funds that have similar investment objectives as Mid-Cap and one mutual fund
that has similar investment objectives as Small-Cap. The following table
provides information for the other mutual funds.
- -----------------------------------------------------------------------------------------------------------------
SIZE OF FUND AS OF 12/31/08
NAME OF FUND (IN MILLIONS) FEES PAID
- -----------------------------------------------------------------------------------------------------------------
Westwood SMid Cap Equity** $80.23 million 0.75% on all assets
- -----------------------------------------------------------------------------------------------------------------
Westwood SMid Cap Equity** $18.14 million 0.50% on all assets
- -----------------------------------------------------------------------------------------------------------------
Westwood SMid Cap Equity** $29.18 million 0.60% of first $100 million
0.50% on next $100 million
- -----------------------------------------------------------------------------------------------------------------
Westwood SMid Cap Equity** $20.15 million 0.58% of first $20 million
0.56% on next $50 million
0.51% on next $50 million
- -----------------------------------------------------------------------------------------------------------------
Westwood Small Cap Value Fund* $16.84 million 0.85% on all assets
- -----------------------------------------------------------------------------------------------------------------
* Fees are for Investor Share Class.
** For confidentiality purposes, the name of the sub-advised account has been
omitted.
PVA is wholly-owned by PM Holdings, Inc., located at One American Row, Hartford,
Connecticut 06103. PM Holdings, Inc. owns 100% of PVA's voting securities. PM
Holdings, Inc. is wholly-owned by PLIC, located at One American Row, Hartford,
Connecticut 06102. PLIC owns 100% of PM Holdings, Inc.'s voting securities. PLIC
is wholly-owned by The Phoenix Companies, Inc., located at One American Row,
Hartford, Connecticut 06102. The Phoenix Companies, Inc. owns 100% of PLIC's
voting securities. PLIC serves as the shareholder servicing agent to the Fund,
and was paid $105,498 by the Fund during the last fiscal year for performing
those services. Phoenix Equity Planning Corporation ("PEPCO") served as
administrator, underwriter and distributor to four series of the Fund for the
last year. PEPCO is located at 610 West Germantown Pike, Plymouth Meeting,
Pennsylvania 19462. PEPCO provided these services as an affiliate and as such
was not directly compensated.
For the year ended December 31, 2008, the Fund paid $216,408 in brokerage
commissions. No brokerage commissions were paid by any Series to any affiliated
broker of PVA or the subadvisors.
SHAREHOLDER REPORTS
-------------------
Copies of the Fund's annual report for the fiscal year ended December 31, 2008
will be furnished without charge upon request. ANY SUCH REQUEST SHOULD BE
DIRECTED TO PHOENIX VARIABLE PRODUCTS MAIL OPERATIONS BY CALLING (800) 541-0171,
OR BY WRITING TO PHOENIX VARIABLE PRODUCTS MAIL OPERATIONS, P. O. BOX 8027,
BOSTON, MASSACHUSETTS 02266-8027.
HOUSEHOLDING OF MATERIALS
-------------------------
The Fund sent only one copy of this Information Statement and the semi-annual
and annual reports to those households in which multiple shareholders shared the
same address, unless the Fund received instructions from a shareholder in such a
household requesting separate copies of these materials. If you are a
shareholder who shares the same address as other shareholders of the Fund and
would like to receive a separate copy of this Information Statement, the
semi-annual report, annual reports or future proxy statements, please contact
Phoenix Variable Products Mail Operations by calling (800) 541-0171, or writing
to Phoenix Variable
10
Products Mail Operations, P. O. Box 8027, Boston, Massachusetts 02266-8027. If
you share the same address as multiple shareholders and would like the Fund to
send only one copy of future proxy statements, information statements,
semi-annual reports and annual reports, please contact Phoenix Variable Products
Mail Operations at the above phone number or post office address.
FUTURE SHAREHOLDER MEETINGS
---------------------------
As a Massachusetts business trust, the Fund does not hold shareholder meetings
unless required by the 1940 Act. The Fund relied upon an Order to terminate
AllianceBernstein as subadvisor to the Series without a shareholder meeting. The
Fund does not anticipate holding a meeting of shareholders in 2009.
Shareholders who wish to present a proposal for action at the next meeting
should submit the proposal to:
Kathleen A. McGah
Phoenix Life Insurance Company
One American Row
P.O. Box 5056
Hartford, CT 06102-5056
Proposals must be received in a reasonable time prior to the date of the
shareholder meeting to be considered for inclusion in the proxy materials for
the meeting. Timely submission of a proposal does not, however, necessarily mean
that the proposal will be submitted for consideration by shareholders.
By Order of the Board of Trustees,
/s/ Kathleen A. McGah
Kathleen A. McGah
Vice President, Chief Legal Officer,
Counsel and Secretary
Hartford, Connecticut
July 30, 2009
11
EXHIBIT A
SUBADVISORY AGREEMENT
THE PHOENIX EDGE SERIES FUND
PHOENIX MID-CAP VALUE SERIES
Westwood Management Corp.
200 Crescent Court, Suite 1200
Dallas, Texas 75201
AGREEMENT made as of the 1st day of May, 2009 between Phoenix Variable
Advisors, Inc. (the "Advisor"), a corporation organized under the laws of the
State of Delaware, and Westwood Management, Corp. (the "Subadvisor"), a
corporation organized under the laws of the State of New York.
WHEREAS, The Phoenix Edge Series Fund (the "Fund") is a diversified
open-end investment company of the series type registered under the Investment
Company Act of 1940, as amended, (the "1940 Act"); and
WHEREAS, the shares of the Fund may be offered in one or more separate
series, including the Phoenix Mid-Cap Value Series (the "Series"); and
WHEREAS, the Advisor has entered into an Investment Advisory Agreement
("Advisory Agreement") with the Fund pursuant to which the Advisor acts as
investment advisor to the Fund on behalf of one or more separate series of the
Fund, including the Series; and
WHEREAS, pursuant to the Advisory Agreement, the Advisor renders certain
investment advisory services to the Fund on behalf of the Series, including
providing general oversight of the Series, and evaluating, recommending and
monitoring one or more registered investment advisors to serve as subadvisor to
the Series; and
WHEREAS, the Advisor desires, with the approval of the Trustees of the
Fund (the "Trustees"), to retain Subadvisor to furnish portfolio management
services for the Series; and
WHEREAS, the Subadvisor is willing to furnish such services on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, the Advisor and the Subadvisor agree as follows:
1. Employment as a Subadvisor. The Advisor, being duly authorized, hereby
appoints the Subadvisor to serve as subadvisor with regard to the assets
of the Series (the "Assets"), subject to the terms and conditions set
forth in this Agreement.
2. Acceptance of Employment; Standard of Performance. The Subadvisor
accepts such appointment to serve as subadvisor of the Assets and agrees
to use its best professional judgment to make investment decisions and
provide related services for the Assets of the Series in accordance with
the terms and conditions set forth in this Agreement and as set forth in
Schedule D attached hereto and made a part hereof. The parties
acknowledge
A-1
and agree that the services of the Subadvisor hereunder are not deemed
exclusive and that accordingly, the Subadvisor may render services to
others so long as those services do not conflict in any material manner
with the Subadvisor's performance of its duties and obligations pursuant
to this Agreement.
3. Services of Subadvisor. Subject to the general oversight of the Advisor
and the Trustees, the Subadvisor shall manage all of the Assets of the
Series entrusted to it under this Agreement, including the purchase,
retention, and disposition of assets, securities, and other property, and
shall carry out all of its duties and obligations under this Agreement,
according to the following terms and conditions:
(a) At all times in performing its duties and obligations under this
Agreement, the Subadvisor shall act in conformity with the following
requirements: (i) the investment objectives, policies and restrictions of
the Fund as they apply to the Assets of the Series and as set forth in
the Fund's then current prospectus and statement of additional
information, as amended or supplemented from time to time, (collectively,
the "Prospectus"); (ii) the Fund's Agreement and Declaration of Trust,
dated February 18, 1986, establishing the Fund, as may be amended from
time to time, ("Declaration of Trust"); (iii) the 1940 Act, the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), the
Securities Act of 1933, as amended, (the "1933 Act") and the Securities
Exchange Act of 1934, as amended, (the "1934 Act") and the rules and
regulations thereunder; (iv) the Internal Revenue Code of 1986, as
amended, (the "Code") and the rules and regulations thereunder, including
but not limited to the requirements for adequate diversification under
Section 817(h) of the Code, for treatment by the Series as a regulated
investment company under sub-chapter M of the Code, and for avoiding
payment of any excise tax under Section 4982 of the Code; (v) all other
applicable federal and state laws, as each may be amended from time to
time; and (vi) and any resolutions as may be duly adopted by the Trustees
from time to time and any instructions and procedures of the Advisor,
and, in either case, furnished to the Subadvisor (collectively, these
requirements are referred to herein as the "Investment Requirements").
(b) The Subadvisor shall furnish a continuous investment program and
shall determine what portfolio investments will be purchased, retained,
or sold by the Series with regards to the Assets of the Series in
conformity with the Prospectus and other Investment Requirements.
(c) The Subadvisor shall effect all transactions and take all
actions to implement the investment objectives and policies of the Series
in accordance with this Agreement.
(d) The Subadvisor shall have full authority at all times with
respect to the portfolio management of the Assets, including, but not
limited to, the authority: (i) to give written or oral instructions to
various broker/dealers, banks or other agents and to bind and obligate
the Fund to and for the carrying out of contracts, arrangements, or
transactions which shall be entered into by the Subadvisor on the Fund's
behalf with or through such broker/dealers, banks or other agents; (ii)
to direct the purchase and sale of
A-2
any securities; and (iii) to maintain such uninvested cash balances in
the Assets of the Series as it shall deem reasonable and appropriate
without incurring any liability for the payment of interest thereon.
(e) The Subadvisor shall not, without the Advisor's prior written
approval, effect any transaction or take any action that would cause the
Assets of the Series at the time of the transaction or action to be out
of compliance with any of the Investment Requirements. The Subadvisor
shall promptly inform the Fund and the Advisor of developments materially
affecting (or reasonably expected to affect) the Assets of the Series,
and will, on its own initiative, furnish the Fund and the Advisor from
time to time with whatever information the Subadvisor believes is
appropriate for this purpose.
(f) The Subadvisor shall send or make available appropriate
representatives to/for regular or special meetings of the Fund as may be
reasonably requested from time to time by the Advisor.
(g) The Subadvisor shall provide appropriate representatives to
attend meetings requested by the Advisor at such time(s) and location(s)
as are reasonably requested by the Advisor.
(h) The Subadvisor shall place all orders for the purchase or sale
of securities or other investments for the Assets of the Series with
brokers or dealers selected by the Subadvisor, as more fully specified
below in Section 6 of this Agreement.
4. Transaction Procedures. All transactions for the purchase or sale of
securities or other investments for the Assets of the Series will be
consummated by payment to, or delivery by, the Custodian(s) from time to
time designated by the Fund (the "Custodian"), or such depositories or
agents as may be designated by the Custodian pursuant to its agreement
with the Fund (the "Custodian Agreement"), of all cash and/or securities
and/or other property due to or from the Assets of the Series. The
Subadvisor shall not have possession or custody of such cash and/or
securities or any responsibility or liability with respect to such
custody, except as described herein. The Subadvisor shall advise the
Custodian and confirm in writing or by confirmed electronic transmission
to the Fund all investment orders for the Assets of the Series placed by
it with brokers and dealers at the time and in the manner set forth in
the Custodian Agreement and in Schedule A hereto (as amended from time to
time). The Fund shall issue to the Custodian such instructions as may be
appropriate in connection with the settlement of any transaction
initiated by the Subadvisor. The Fund shall be responsible for all
custodial arrangements and the payment of all custodial charges and fees,
and, upon giving proper instructions to the Custodian, the Subadvisor
shall have no responsibility or liability with respect to custodial
arrangements or the acts, omissions or other conduct of the Custodian
other than arrangements, acts, omissions or other conduct arising in
reliance on instructions of the Subadvisor.
5. Recordkeeping and Reporting. The Subadvisor shall maintain the records
and information required by Rule 31a-1 under the 1940 Act described in
Schedule B attached hereto, with respect to the Assets of the Series. In
addition, the Subadvisor shall maintain
A-3
such other records relating to the services the Subadvisor provides
under this Agreement as may be required in the future by applicable SEC
and other applicable rules, and shall retain such information for such
times and in such manner as required by applicable rules, including but
not limited to Rule 31a-2 under the 1940 Act. The records maintained by
the Subadvisor hereunder shall be the property of the Fund and shall be
surrendered promptly upon request; subject, however, to the Subadvisor's
right to retain all such records as the Subadvisor is required to
maintain under the Advisers Act and the rules and regulations promulgated
thereunder; provided, further, that the Fund shall be entitled to make
and maintain copies of any records so retained by request.
6. Allocation of Brokerage. The Subadvisor shall have authority and
discretion to select brokers and dealers, including any brokers and
dealers affiliated with the Subadvisor, to execute transactions initiated
by the Subadvisor on behalf of the Series with regard to the Assets, and
to select the markets on or in which the transactions will be executed,
subject to the following limitations:
(a) The Subadvisor shall at all times seek "best-execution", as
defined in Section 28(e)(1) of the 1934 Act.
(b) The Subadvisor shall at all times place orders for the sale and
purchase of securities in accordance with the brokerage policy of the
Series as set forth in the Prospectus and as the Advisor or the Trustees
may direct from time to time.
(c) In placing orders for the sale and purchase of securities for
the Assets of the Series, the Subadvisor's primary responsibility shall
be to seek the best execution of orders at the most favorable prices.
However, this responsibility shall not obligate the Subadvisor to solicit
competitive bids for each transaction or to seek the lowest available
commission cost to the Series, so long as the Subadvisor reasonably
believes that the broker or dealer selected by it can be expected to
provide "best-execution" on the particular transaction and determines in
good faith that the commission cost is reasonable in relation to the
value of the "brokerage and research services," as defined in Section
28(e)(3) of the 1934 Act, provided by such broker or dealer to the
Subadvisor, viewed in terms of either that particular transaction or of
the Subadvisor's overall responsibilities with respect to its clients,
including the Series, as to which the Subadvisor exercises investment
discretion, notwithstanding that the Series may not be the direct or
exclusive beneficiary of any such services or that another broker may be
willing to charge the Series a lower commission on the particular
transaction.
7. Prohibited Conduct. In providing the services described in this
Agreement, the Subadvisor will not consult with any other investment
advisory firm that the Subadvisor knows provides investment advisory
services to any of the Funds series regarding transactions for the Fund
in securities or other assets. In addition, the Subadvisor shall not,
without the prior written consent of the Fund and the Advisor, delegate
any obligations assumed pursuant to this Agreement to any affiliated or
unaffiliated third party.
A-4
8. Expenses. During the term of this Agreement, the Subadvisor shall bear
all expenses incurred by it in connection with providing its services
hereunder. Without limiting the foregoing, the parties acknowledge and
agree that the Subadvisor shall furnish at its own expense, or pay the
expenses of the Advisor, for the following items:
(a) Office facilities, including office space, furniture and
equipment utilized by the Subadvisor's employees in the fulfillment of
its duties and obligations under this Agreement; and
(b) Personnel and services necessary to perform the functions
required to manage the investment and reinvestment of the Assets
(including those required for research, analysis, pricing, reporting,
statistics, and investment), and to fulfill the other duties and
obligations of the Subadvisor hereunder.
9. Fees for Services. The compensation of the Subadvisor for its services
under this Agreement shall be calculated and paid by the Advisor in
accordance with the attached Schedule C. Pursuant to the Advisory
Agreement between the Fund and the Advisor, the Advisor shall be solely
responsible for the payment of fees to the Subadvisor.
10. Limitation of Liability. The Subadvisor shall not be liable for any
action taken, omitted or suffered to be taken by it in its best
professional judgment, in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Agreement, or in accordance with specific directions or instructions from
the Fund, so long as such acts or omissions shall not have constituted a
breach of the investment objectives, policies and restrictions applicable
to the Assets of the Series and such acts or omissions shall not have
resulted from the Subadvisor's willful misfeasance, bad faith, reckless
disregard or gross negligence, a violation of the standard of care
established by and applicable to the Subadvisor in its actions under this
Agreement or a breach of its duty or of its obligations hereunder
(provided further, however, that the foregoing shall not be construed to
protect the Subadvisor from liability under the 1940 Act, other federal
or state securities laws or common law).
11. Indemnification.
----------------
(a) The Advisor agrees to indemnify and hold harmless the
Subadvisor, its officers and directors, and any person who "controls" the
Subadvisor, within the meaning of Section 15 of the Securities Act of
1933, as amended (the "1933 Act"), from and against any and all direct or
indirect liabilities, losses or damages (including reasonable attorneys'
fees) suffered by Subadvisor resulting from (i) the Advisor's breach of
any provision of this Agreement, (ii) willful misfeasance, bad faith,
reckless disregard or gross negligence on the part of the Advisor or any
of its officers, directors or employees in the performance of the
Advisor's duties and obligations under this Agreement or (iii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus and Statement of Additional Information, as amended or
supplemented from time to time or promotional materials pertaining or
relating to the Series or any amendment thereof or any supplement thereto
or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
A-5
statement therein not misleading, if such a statement or omission was
made by the Fund other than in reliance upon written information
furnished by the Subadvisor or any affiliated person of the Subadvisor,
expressly for use in the Fund's registration statement or other than upon
verbal information confirmed by the Subadvisor in writing expressly for
use in the Fund's registration statement.
In no case shall the Advisor's indemnity in favor of the Subadvisor or
any affiliated person or controlling person of the Subadvisor, or any
other provision of this Agreement, be deemed to protect such person
against any liability to which any such person would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
(b) The Subadvisor agrees to indemnify and hold harmless the
Advisor, its officers and directors, and any person who "controls" the
Advisor, within the meaning of Section 15 of the 1933 Act, from and
against any and all direct or indirect liabilities, losses or damages
(including reasonable attorneys' fees) suffered by Advisor resulting from
(i) the Subadvisor's breach of its duties under this Agreement, (ii)
willful misfeasance, bad faith, reckless disregard or gross negligence on
the part of the Subadvisor or any of its officers, directors or employees
in the performance of the Subadvisor's duties and obligations under this
Agreement or (iii) any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus or Statement of Additional
Information, as amended or supplemented from time to time relating to the
Series or any amendment thereof or any supplement thereto or the omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement therein not misleading,
if such a statement or omission was made in reliance upon written
information furnished by the Subadvisor to the Advisor, the Fund or any
affiliated person of the Advisor or the Fund expressly for use in the
Fund's registration statement, or upon verbal information confirmed by
the Subadvisor in writing expressly for use in the Fund's registration
statement; or (iv) to the extent of, and as a result of, the failure of
the Subadvisor to execute, or cause to be executed, portfolio
transactions with respect to the Assets of the Series according to the
standards and requirements of the 1934 Act, the 1940 Act and the Advisers
Act.
In no case shall the Subadvisor's indemnity in favor of the Advisor or
any affiliated person or controlling person of the Advisor, or any other
provision of this Agreement, be deemed to protect such person against any
liability to which any such person would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations
and duties under this Agreement.
12. Insurance. The Subadvisor shall, during the term of this Agreement, at
its own expense, maintain adequate liability and errors and
omissions insurance coverage to the reasonable satisfaction of the
Advisor.
13. No Personal Liability. Reference is hereby made to the Declaration of
Trust, a copy of which has been filed with the Secretary of the
Commonwealth of Massachusetts and
A-6
elsewhere as required by law, and to any and all amendments thereto so
filed or hereafter so filed with the Secretary of the Commonwealth of
Massachusetts and elsewhere as required by law. The name The Phoenix Edge
Series Fund refers to the Trustees under said Declaration of Trust, as
Trustees and not personally, and no Trustee, shareholder, officer, agent
or employee of the Fund shall be held to any personal liability in
connection with the affairs of the Fund; only the Fund estate under said
Declaration of Fund is liable. Without limiting the generality of the
foregoing, neither the Subadvisor nor any of its officers, directors,
partners, shareholders or employees shall, under any circumstances, have
recourse or cause or willingly permit recourse to be had directly or
indirectly to any personal, statutory, or other liability of any
shareholder, Trustee, officer, agent or employee of the Fund or of any
successor of the Fund, whether such liability now exists or is hereafter
incurred for claims against the Fund estate.
14. Confidentiality. Subject to the duty of the Advisor or Subadvisor to
comply with applicable law, including any demand of any regulatory or
taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Series and the actions of
the Subadvisor and the Fund in respect thereof. It is understood that any
information or recommendation supplied by the Subadvisor in connection
with the performance of its obligations hereunder is to be regarded as
confidential and for use only by the Advisor, the Fund or such persons as
the Advisor may designate in connection with the Series. It is also
understood that any information supplied to the Subadvisor in connection
with the performance of its obligations hereunder, particularly, but not
limited to, any list of investments which, on a temporary basis, may not
be bought or sold for the Series, is to be regarded as confidential and
for use only by the Subadvisor in connection with its obligation to
provide investment advice and other services to the Series. The parties
acknowledge and agree that all nonpublic personal information with regard
to shareholders in the Series shall be deemed proprietary information of
the Advisor, and that the Subadvisor shall use that information solely in
the performance of its duties and obligations under this Agreement and
shall takes reasonable steps to safeguard the confidentiality of that
information. Further, the Subadvisor shall maintain and enforce adequate
security procedures with respect to all materials, records, documents and
data relating to any of its responsibilities pursuant to this Agreement
including all means for the effecting of investment transactions.
15. Assignment. This Agreement shall terminate automatically in the event of
its "assignment," as that term is defined in Section 2(a)(4) of the 1940
Act. The Subadvisor shall provide the Advisor with reasonable advance
written notice of any proposed change of "control," as defined in Section
2(a)(9) of the 1940 Act, as will enable the Advisor to consider whether
an assignment as defined in Section 2(a)(4) of the 1940 Act will occur
and to take the steps it deems necessary. The understandings and
obligations set forth in this Section shall survive the termination of
this Agreement and shall be binding upon the Subadvisor and its
successors.
16. Representations, Warranties and Agreements of the Subadvisor. The
Subadvisor represents, warrants and agrees that:
A-7
(a) It is registered as an "investment advisor" under the Advisers
Act and will maintain such status so long as this Agreement remains in
effect.
(b) It shall comply with any other applicable federal or state
requirements, and the applicable requirements of any regulatory or
self-regulatory agency, necessary to be met for its performance of the
services contemplated by this Agreement so long as this Agreement remains
in effect.
(c) It is not prohibited by the 1940 Act, the Advisers Act or other
applicable federal or state law from performing the services contemplated
by this Agreement.
(d) It is duly organized and validly existing under the laws of the
State in which it was organized with the power to own and posses its
assets and carry on its business as it is now being conducted.
(e) It has the power and has taken all necessary action, and has
obtained all necessary licenses, authorizations and approvals, to execute
this Agreement, which Agreement constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms, to enter into and
perform the services contemplated by this Agreement; and the execution,
delivery and performance by it of this Agreement does not contravene or
constitute a default under any agreement binding upon it.
(f) It will promptly notify the Advisor of the occurrence of any
event that would disqualify it from serving as an investment advisor of
an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.
(g) It has a written code of ethics complying with the requirements
of Rule 17j-l under the 1940 Act and Rule 204A-1 of the Advisers Act and
will provide the Advisor with a copy of the code of ethics and evidence
of its adoption. The Subadvisor acknowledges receipt of the written code
of ethics adopted by and on behalf of the Fund (the "Code of Ethics"). It
will not be subject to the Code of Ethics during the term of this
Agreement so long as its code of ethics complies with applicable
regulatory requirements and has been approved by the Trustees. Within 15
days of the end of each calendar quarter while this Agreement is in
effect, a duly authorized compliance officer of the Subadvisor shall
certify to the Fund and to the Advisor that the Subadvisor has complied
with the requirements of Rules 17j-l and 204A-1 of the Advisers Act
during the previous calendar quarter and that there has been no violation
of its code of ethics, or the Code of Ethics, as the case may be, or if
such a violation has occurred, that appropriate action was taken in
response to such violation. The Subadvisor shall permit the Fund and
Advisor to examine the reports required to be made by the Subadvisor
under Rule 17j-l(c)(1) and all other records relevant to the Subadvisor's
code of ethics as may be reasonably requested by the Advisor or Trustees
from time to time.
(h) It will use all necessary efforts to manage the Assets of the
Series so that it will satisfy the diversification and minimum "good
income" requirements of Subchapter M and the diversification requirements
of Section 817(h) of the Internal Revenue Code of 1986, as amended.
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(i) It has furnished a true and complete copy of its registration
statement as filed with the Securities and Exchange Commission (the
"Commission") on Form ADV to the Advisor and will furnish promptly such
updated copies of its registration statement or amendments thereto as are
filed with the Commission from time to time.
(j) It will furnish to the Advisor true and complete copies of
reports or other documents as may be reasonably requested by the Advisor
in connection with the performance of the Subadvisor's duties and
obligations under this Agreement.
(k) It will be responsible for the preparation and filing of
Schedule 13G and Form 13F on behalf of the Assets of the Series in
accordance with the requirements thereunder.
(l) It will furnish or otherwise make available to the Advisor such
other information relating to the business affairs of the Subadvisor or
the management of the Series as the Advisor at any time, or from time to
time, reasonably requests in connection with the Advisor's or
Subadvisor's performance of its respective obligations hereunder;
subject, however, to the Subadvisor's right to retain all such records as
the Subadvisor is required to maintain under the Advisers Act and the
rules and regulations promulgated thereunder; provided, further, that the
Fund and the Advisor shall be entitled to make and maintain copies of any
records so retained by the Subadvisor.
(m) It will maintain, keep current and preserve on behalf of the
Fund, in the manner required or permitted by the Advisers Act and the
Rules thereunder, the records identified in Schedule B (as Schedule B may
be amended from time to time). The Subadvisor agrees that such records
are the property of the Fund, and will be surrendered to the Fund or to
the Adviser as agent of the Fund promptly upon request of either.
(n) The Subadvisor hereby warrants and represents that it will
provide the requisite certifications requested by the chief executive
office and chief financial officer of the Fund necessary for those named
officers to fulfill their reporting and certification obligations on Form
N-CSR as required under the Sarbanes-Oxley Act of 2002 in substantially
the form presented in Schedule E attached hereto and made a part hereof.
(o) 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
Subadvisor and its supervised persons, and, to the extent the activities
of the Subadvisor in respect to the Fund could affect the Fund, by the
Fund, of "federal securities laws" (as defined in Rule 38a-1 under the
Act), and that the Subadvisor has provided the Fund with true and
complete copies of its policies and procedures (or summaries thereof) and
related information requested by the Fund. The Subadvisor agrees to
cooperate with periodic reviews by the Fund's compliance personnel of the
Subadvisor's policies and procedures, their operation and implementation
and other compliance matters and to provide to the Fund from time to time
such additional information and certifications in respect of the
Subadvisor's policies and procedures, compliance by the Subadvisor with
federal securities laws and related matters and the Fund's compliance
personnel may reasonably request. The Subadvisor
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agrees to promptly notify the Advisor of any material compliance
violations which affect the Series.
17. Representations, Warranties and Agreements of the Advisor. The Advisor
represents, warrants and agrees that:
(a) It is registered as an "investment advisor" under the Advisers
Act.
(b) It shall continue to meet any other applicable federal or state
requirements, or the applicable requirements of any regulatory or
self-regulatory agency, necessary to be met for its performance of the
services contemplated by this Agreement so long as this Agreement remains
in effect.
(c) It is not prohibited by the 1940 Act, the Advisers Act or other
applicable federal or state law from performing the services contemplated
by this Agreement.
(d) It is duly organized and validly existing under the laws of the
State in which it was organized with the power to own and posses its
assets and carry on its business as it is now being conducted.
(e) It has the power and has taken all necessary action, and has
obtained all necessary licenses, authorizations and approvals, to execute
this Agreement, which Agreement constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms, to enter into and
perform the services contemplated by this Agreement; and the execution,
delivery and performance by it of this Agreement does not contravene or
constitute a default under any agreement binding upon it.
(f) It has delivered, or will before the effective date of this
Agreement deliver, to the Subadvisor true and complete copies of (i) the
Prospectus, (ii) the Declaration of Trust, and (iii) such other documents
or instruments governing the investments and investment policies and
practices of the Series applicable to the Subadvisor's duties and
obligations hereunder, and during the term of this Agreement will
promptly deliver to the Subadvisor true and complete copies of all
documents and instruments supplementing, amending, or otherwise becoming
such documents or instruments before or at the time they become
effective.
(g) It will furnish or otherwise make available to the Subadvisor
such other information relating to the business affairs of the Fund as
the Subadvisor at any time, or from time to time, reasonably requests in
order to discharge its obligations hereunder.
18. Representations, Warranties and Agreements of the Fund. By their approval
of this Agreement the Trustees represent, warrant and agree that:
(a) The Fund is not prohibited by the 1940 Act or other applicable
federal or state law from performing their obligations under this
Agreement.
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(b) The Fund is duly organized and validly existing under the laws
of the State in which it was organized with the power to own and posses
its assets and carry on its business as it is now being conducted.
(c) The Fund has taken all necessary action, and have obtained all
necessary licenses, authorizations and approvals, to permit the Fund to
enter into this Agreement, which Agreement constitutes the Fund's legal,
valid and binding obligation, enforceable in accordance with its terms;
and the execution, delivery and performance by the Fund of this Agreement
does not contravene or constitute a default under any agreement binding
upon the Fund.
19. Reports. The Subadvisor shall provide the Advisor and the Trustees such
periodic and special reports as the Advisor may reasonably request. The
Subadvisor agrees that such records are the property of the Fund, and
shall be made reasonably available for inspections, and by the Fund or by
the Advisor as agent of the Fund, and promptly upon request surrendered
to either. Without limiting the generality of the foregoing, the parties
agree and acknowledge that the Subadvisor shall provide the following
items:
(a) Quarterly reports, in form and substance acceptable to the
Advisor, including but not limited to reports with respect to: (i)
compliance with the Subadvisor's code of ethics; (ii) compliance with
procedures adopted from time to time by the Trustees relative to
securities eligible for resale pursuant to Rule 144A under the 1933 Act;
(iii) diversification of the Assets of the Series assets in accordance
with the then governing laws and prevailing Prospectus pertaining to the
Series; (iv) compliance with governing Fund policies and restrictions
relating to the fair valuation of securities for which market quotations
are not readily available or considered "illiquid" for the purposes of
complying with the Series limitation on acquisition of illiquid
securities; (v) cross transactions conducted pursuant to Rule 17a-7 under
the 1940 Act; (vi) allocations of brokerage transactions along with
descriptions of the bases for those allocations and the receipt and
treatment of brokerage and research services received, as may be
requested to ensure compliance with Section 28(e) of the 1934 Act; (vii)
any and all other reports reasonably requested in accordance with or
described in this Agreement; and, (viii) the implementation of the Assets
of the Series investment program, including, without limitation, analyses
of Series performance pertaining to the Assets of the Series;
(b) Annual or other periodic reports, in form and substance
acceptable to the Advisor, including but not limited reports with respect
to: (i) analyses of Series performance pertaining to the Assets of the
Series; (ii) disclosure related to the portfolio management of the Assets
of the Series and the Subadvisor as may be contained in the Prospectus or
marketing materials as amended, supplemented or otherwise updated from
time to time; and (iii) foreign custody arrangements as governed by Rule
17f-7 under the 1940 Act; (iv) compliance with the Subadvisor's code of
ethics pursuant to Rule 17j-1; and (v) such compliance certifications as
may be reasonably requested.
(c) The parties acknowledge and agree that the Subadvisor is
authorized to supply the Fund's independent accountants,
PricewaterhouseCoopers LLP, or any
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successor accountant for the Fund, any reasonable information that
they may request in connection with the Fund.
In addition, the Subadvisor shall immediately notify and forward to both
the Advisor and legal counsel for the Series whose identity has been
provided to the Subadvisor any legal process served upon it on behalf of
the Advisor or the Fund. The Subadvisor shall promptly notify the Advisor
of any changes in any information concerning the Subadvisor of which the
Subadvisor becomes aware that is or would be required to be disclosed in
the Fund's registration statement.
20. Proxies and Class Actions. The Subadvisor shall review all proxy
solicitation materials and be responsible for voting and handling all
proxies in relation to the Assets. Unless the Advisor or the Fund gives
the Subadvisor written instructions to the contrary, the Subadvisor will,
in compliance with the proxy voting policy and procedures adopted by the
Subadvisor, vote or abstain from voting, all proxies solicited by or with
respect to the issuers of securities in which the Assets of the Series
may be invested. The Advisor shall cause the Custodian to forward
promptly to the Subadvisor all such proxies upon receipt, so as to afford
the Subadvisor a reasonable amount of time in which to determine how to
vote such proxies. The Subadvisor agrees to provide the Advisor in a
timely manner with quarterly proxy voting reports containing a record of
votes cast containing all of the voting information required by Form
N-PX. The Subadvisor will not advise or act on behalf of the Series to
file Form N-PX as required by Rule 30b1-4 under the Act. The Subadvisor
will not advise or act on behalf of the Series in regards to class action
filings, with respect to any securities held by the Series.
21. Valuation of Assets and Related Recordkeeping. The Subadvisor shall
assist the recordkeeping agent for the Fund in determining or confirming
the value of any securities or other assets pertaining to the Assets of
the Series for which the recordkeeping agent seeks assistance from or
identifies for review by the Advisor. The parties agree that, consistent
with applicable law, the Advisor will not bear responsibility for the
determination of value of any such securities or other assets.
22. Amendment. This Agreement may be amended at any time, but only by
written agreement between the Subadvisor and the Advisor, which
amendment, other than amendments to Schedule A, B, C, D or E, is subject
to the approval of the Trustees and the Shareholders of the Fund as and
to the extent required by the 1940 Act.
23. Effective Date; Term. This Agreement shall become effective on the date
set forth on the first page of this Agreement. Unless terminated as
hereinafter provided, this Agreement shall remain in full force and
effect until December 31, 2010, and thereafter only so long as its
continuance has been specifically approved at least annually in
accordance with Sections 15(a) and (c) of the 1940 Act and the Rules
promulgated thereunder.
24. Notices. Except as otherwise provided in this Agreement, all notices or
other communications required of permitted to be given hereunder shall be
in writing and shall be delivered or sent by (i) confirmed facsimile,
(ii) registered, certified or overnight mail, or (iii) a nationally
recognized overnight courier, to the following addresses or to such
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other address as the relevant addressee shall hereafter notify for such
purpose to the other by notice in writing and shall be deemed to have
been given at the time of delivery.
If to the Advisor: PHOENIX VARIABLE ADVISORS, INC.
One American Row
Hartford, Connecticut 06102
Attention: Doreen A. Bonner, Vice President and
Chief Compliance Officer
Telephone: (860) 403-5456
Facsimile: (860) 403-7203
Email: Doreen.Bonner@phoenixwm.com
If to the Subadvisor: WESTWOOD MANAGEMENT CORP.
200 Crescent Court, Suite 1200
Dallas, Texas 75201
Attention: Brian O. Casey
Telephone: 214-756-6900
Facsimile: 214-756-6979
Email: bcasey@westwoodgroup.com
25. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other party in the event
of a breach of any provision thereof by the party so notified, or
otherwise, upon sixty (60) days' written notice to the other party but
any such termination shall not affect the status, obligations or
liabilities of any party hereto to the other party.
26. Use of Subadvisor's Name.
-------------------------
(a) The Subadvisor hereby grants to the Fund and the Advisor a non-
exclusive, royalty-free, non-transferable worldwide license to use the
Subadvisor's name and the Subadvisor's logo (collectively, the "Name") in
any and all promotional materials, prospectuses and registration
statements for the purpose of advertising, promoting, and registering the
Fund during the term of this Agreement. The Fund shall furnish, or shall
cause to be furnished, to the Subadvisor or its designee, each piece of
sales literature or other promotional material in which the Subadvisor is
named or the Name used, at least ten (10) business days prior to its use.
The Subadvisor shall be permitted to review and approve the material in
written or electronic form prior to such printing. No such material shall
be used if the Subadvisor or its designee reasonably objects to such use
within ten (10) business days after receipt of this material, such
approval, may not be unreasonably withheld. All rights in and to the Name
not expressly granted under this Section 26(a) are reserved by the
Subadvisor.
(b) All use of the Name by the Advisor and the Fund, and the nature
and quality of the Fund, and the promotional materials, prospectuses,
registration statements, and uses of the Name, are subject to, and shall
comply with, the Subadvisor's quality control standards and requirements.
The Subadvisor may periodically inspect the Advisor's and the Fund's
operations to ensure compliance with such quality control standards and
requirements and the terms and conditions of this Agreement after
providing the Advisor or the Fund with reasonable advance notice.
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(c) The Advisor and the Fund each agree to give notice to the
Subadvisor of any infringement of the Name that comes to its attention
and cooperate reasonably with the Subadvisor when and as requested by the
Subadvisor in preventing and stopping any such infringement, but
otherwise not to take any action against any infringer.
27. 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 New York, without giving effect to the conflicts of laws
principles thereof.
28. 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.
29. Certifications. The Subadvisor hereby warrants and represents that it
will provide the requisite certifications requested by the Chief
Executive Officer and the Chief Financial Officer of the Fund necessary
for those named officers to fulfill their reporting and certification
obligations on Form N-SAR as required under the Sarbanes-Oxley Act of
2002.
30. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter of this
Agreement.
31. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and all such counterparts
shall constitute a single instrument.
THE PHOENIX EDGE SERIES FUND
By: /s/ Philip K. Polkinghorn
-------------------------------
Name: Philip K. Polkinghorn
Title: President
PHOENIX VARIABLE ADVISORS, INC.
By: /s/ John H. Beers
-------------------------------
Name: John H. Beers
Title: Vice President and Secretary
ACCEPTED:
WESTWOOD
By: /s/ Brian O. Casey
---------------------------------
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Name: Brian O. Casey
Title: President and Chief Executive Officer
SCHEDULES: A. Operational Procedures
B. Records to be Maintained by the Subadvisor
C. Subadvisory Fee
D. Subadvisor Functions
E. Form of Sub-Certification
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SCHEDULE A
----------
OPERATIONAL PROCEDURES
In order to minimize operational problems, it will be necessary for a flow of
information to be supplied by the Subadvisor to State Street Bank and Trust
Company (the "Custodian") and PNC Global Investment Servicing (the
"Sub-Accounting Agent") for the Fund.
The Subadvisor must furnish the Custodian and Sub-Accounting Agent with daily
information as to executed trades, or, if no trades are executed, with a report
to that effect, no later than 5:00 p.m. (Eastern time) on the day of the trade
(confirmation received from broker). The necessary information can be sent
electronically or via facsimile machine to the Custodian and the Sub-Accounting
Agent. Information provided to the Custodian and the Sub-Accounting Agent shall
include the following:
1. Purchase or sale;
2. Security name;
3. Security identifier (e.g., CUSIP), if applicable;
4. Number of shares and sales price per share;
5. Executing broker;
6. Settlement instructions for foreign trades; clearing and
executing broker for domestic trades;
7. Trade date;
8. Settlement date;
9. Aggregate commission or if a net trade;
10. Interest purchased or sold from interest bearing security;
11. Other fees;
12. Net proceeds of the transaction;
13. Exchange where trade was executed;
14. Currency for foreign trades;
15. Ticker symbol for domestic trades; and
16. Identified tax lot (if applicable).
When opening accounts with brokers for, and in the name of, the Series, the
account must be a cash account. No margin accounts are to be maintained in the
name of the Series. Delivery instructions are as specified by the Custodian. The
Custodian and Sub-Accounting Agent will supply the Subadvisor 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
report, which shall include cash detail and pending trades. This will normally
be done by electronically or via facsimile machine by confirmed facsimile or
confirmed electronic transmission so that the Subadvisor will know the amount
available for investment purposes.
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SCHEDULE B
----------
RECORDS TO BE MAINTAINED BY THE SUBADVISOR
1. (Rule 31a-1(b)(5)) A record of each brokerage order, and all other series
purchases and sales, given by the Subadvisor on behalf of the Series for,
or in connection with, the purchase or sale of securities, whether
executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any modifications or
cancellations thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of the Fund.
2. (Rule 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 placed by the Subadvisor 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 Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or dealers to:
(a) The Fund,
(b) The Advisor,
(c) The Subadvisor, and
(d) Any person other than the foregoing.
(iii) Any other consideration other than the technical qualifications
of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made available.
C. Shall describe in detail the application of any general or specific
formula or other determinant used in arriving at such allocation of
purchase and sale orders and such division of brokerage commissions or
other compensation.
D. The name of the person responsible for making the determination of
such allocation and such division of brokerage commissions or other
compensation.
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3. (Rule 31a-(b)(10)) A records 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 Investment Advisers Act of 1940, to the extent such
records are necessary or appropriate to record the Subadvisor's
transactions for the Series.
- --------------------------------------
* Such information might include: current financial information, annual and
quarterly reports, press releases, reports by analysts and from brokerage
firms (including their recommendation; i.e., buy, sell, hold) or any internal
reports or subadvisor review.
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SCHEDULE C
----------
SUBADVISORY FEE
For services provided to the Fund, the Advisor will pay to the Subadvisor, on or
before the 10th day of each month, a fee, payable in arrears, at the annual rate
stated below.
The fees shall be prorated for any month during which this Agreement is in
effect for only a portion of the month. In computing the fee to be paid to the
Subadvisor, the net asset value of the Fund and each Series shall be valued as
set forth in the then current registration statement of the Fund.
Name of Series: Annual Subadvisory Fee Rate
Phoenix Mid-Cap Value Series 0.65% on the first $50 million;
0.60% on the next $50 million;
0.55% on the next $50 million;
0.50% on assets thereafter.
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SCHEDULE D
----------
SUBADVISOR FUNCTIONS
With respect to managing the investment and reinvestment of the Series'
assets, the Subadvisor shall provide, at its own expense:
(a) An investment program for the Series consistent with its investment
objectives based upon the development, review and adjustment of buy/sell
strategies approved from time to time by the Board of Trustees and
Advisor, all as set forth in the Objectives and Policies;
(b) Implementation of the investment program for the Series based upon the
foregoing criteria;
(c) Quarterly reports, in form and substance acceptable to the Advisor, with
respect to: (i) compliance with the Code of Ethics; (ii) compliance with
procedures adopted from time to time by the Trustees of the Fund relative
to securities eligible for resale under Rule 144A under the Securities Act
of 1933, as amended; (iii) diversification of Series assets in accordance
with the then prevailing Objectives and Policies and governing laws; (iv)
compliance with governing restrictions relating to the fair valuation of
securities for which market quotations are not readily available or
considered "illiquid" for the purposes of complying with the Series'
limitation on acquisition of illiquid securities included in the
Objectives and Policies; (v) any and all other reports reasonably
requested in accordance with or described in this Agreement; and (vi) the
implementation of the Series' investment program, including, without
limitation, analysis of Series performance;
(d) Promptly after filing with the Securities and Exchange Commission an
amendment to its Form ADV, a copy of such amendment to the Advisor and the
Trustees;
(e) Attendance by appropriate representatives of the Subadvisor at meetings
requested by the Advisor or Trustees at such time(s) and location(s) as
reasonably requested by the Advisor or Trustees; and
(f) Notice to the Trustees and the Advisor of the occurrence of any event
which would disqualify the Subadvisor from serving as an investment
advisor of an investment company pursuant to Section 9(a) of the 1940 Act
or otherwise.
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SCHEDULE E
----------
FORM OF SUB-CERTIFICATION
To:
Re: Form N-CSR Certification for the [Name of Series].
From: Westwood Management Corp.
Representations in support of Investment Company Act Rule 30b1-5 certifications
of Form N-CSR.
Phoenix MidCap Value Series
In connection with your certification responsibility under Rule
30b1-5 and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, I
have reviewed the following information presented for the period ended
[Date of Reporting Period] (the "Reports") which forms part of the N-CSR
for the Series.
Schedule of Investments (the "Reports")
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 funds.
b. 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 Subadvisor to the
Series.
I have read the draft of the Reports which I understand to be current as of
[Date of Reporting Period] and based on my knowledge, such drafts of the Reports
do not, with respect to the 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
Reports.
I have disclosed, based on my most recent evaluation, to the Series' Chief
Accounting Officer:
a. All significant changes, deficiencies and material weakness, if any, in
the design or operation of the Subadvisor's internal controls and
procedures which could adversely affect the Advisor's ability to record,
process, summarize and report financial data in a timely fashion;
A-21
b. Any fraud, whether or not material, that involves the Subadvisor's
management or other employees who have significant role in the
Subadvisor's internal controls and procedures for financial reporting.
I certify that to the best of my knowledge:
a. The Subadvisor's portfolio manager has complied with the restrictions
and reporting requirements of the Subadvisor's Code of Ethics (the
"Code").
b. The Subadvisor has complied with the Prospectus and Statement of
Additional Information of the Series and the Policies and Procedures of
the Series as adopted by the Board of Trustees.
c. I have no knowledge of any compliance violations with respect to the
Series except as disclosed in writing to the Phoenix Compliance
Department by me or by the Subadvisor's compliance officer.
d. The Subadvisor 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 Subadvisor
with respect to the Series as outlined above.
This certification relates solely to the Series named above and may not be
relied upon by any other fund or entity.
The Subadvisor does not maintain the official books and records of the above
Series. The Subadvisor's records are based on its own portfolio management
system, a record-keeping system that is not intended to service as the Funds'
official accounting system. The Subadvisor is not responsible for the
preparation of the Reports.
- ------------------------------- --------------------------
[Name of Authorized Signature] Date
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EXHIBIT B
SUBADVISORY AGREEMENT
THE PHOENIX EDGE SERIES FUND
PHOENIX SMALL-CAP VALUE SERIES
Westwood Management Corp.
200 Crescent Court, Suite 1200
Dallas, Texas 75201
AGREEMENT made as of the 1st day of May, 2009 between Phoenix Variable
Advisors, Inc. (the "Advisor"), a corporation organized under the laws of the
State of Delaware, and Westwood Management Corp. (the "Subadvisor"), a
corporation organized under the laws of the State of New York.
WHEREAS, The Phoenix Edge Series Fund (the "Fund") is a diversified
open-end investment company of the series type registered under the Investment
Company Act of 1940, as amended, (the "1940 Act"); and
WHEREAS, the shares of the Fund may be offered in one or more separate
series, including the Phoenix Small-Cap Value Series (the "Series"); and
WHEREAS, the Advisor has entered into an Investment Advisory Agreement
("Advisory Agreement") with the Fund pursuant to which the Advisor acts as
investment advisor to the Fund on behalf of one or more separate series of the
Fund, including the Series; and
WHEREAS, pursuant to the Advisory Agreement, the Advisor renders certain
investment advisory services to the Fund on behalf of the Series, including
providing general oversight of the Series, and evaluating, recommending and
monitoring one or more registered investment advisors to serve as subadvisor to
the Series; and
WHEREAS, the Advisor desires, with the approval of the Trustees of the
Fund (the "Trustees"), to retain Subadvisor to furnish portfolio management
services for the Series; and
WHEREAS, the Subadvisor is willing to furnish such services on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, the Advisor and the Subadvisor agree as follows:
1. Employment as a Subadvisor. The Advisor, being duly authorized, hereby
appoints the Subadvisor to serve as subadvisor with regard to the assets
of the Series (the "Assets"), subject to the terms and conditions set
forth in this Agreement.
2. Acceptance of Employment; Standard of Performance. The Subadvisor accepts
such appointment to serve as subadvisor of the Assets and agrees to use
its best professional judgment to make investment decisions and provide
related services for the Assets of the Series in accordance with the
terms and conditions set forth in this Agreement and as set forth in
Schedule D attached hereto and made a part hereof. The parties
acknowledge
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and agree that the services of the Subadvisor hereunder are not deemed
exclusive and that accordingly, the Subadvisor may render services to
others so long as those services do not conflict in any material manner
with the Subadvisor's performance of its duties and obligations pursuant
to this Agreement.
3. Services of Subadvisor. Subject to the general oversight of the Advisor
and the Trustees, the Subadvisor shall manage all of the Assets of the
Series entrusted to it under this Agreement, including the purchase,
retention, and disposition of assets, securities, and other property,
and shall carry out all of its duties and obligations under this
Agreement, according to the following terms and conditions:
(a) At all times in performing its duties and obligations under this
Agreement, the Subadvisor shall act in conformity with the following
requirements: (i) the investment objectives, policies and restrictions
of the Fund as they apply to the Assets of the Series and as set forth
in the Fund's then current prospectus and statement of additional
information, as amended or supplemented from time to time,
(collectively, the "Prospectus"); (ii) the Fund's Agreement and
Declaration of Trust, dated February 18, 1986, establishing the Fund, as
may be amended from time to time, ("Declaration of Trust"); (iii) the
1940 Act, the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), the Securities Act of 1933, as amended, (the "1933 Act") and the
Securities Exchange Act of 1934, as amended, (the "1934 Act") and the
rules and regulations thereunder; (iv) the Internal Revenue Code of
1986, as amended, (the "Code") and the rules and regulations thereunder,
including but not limited to the requirements for adequate
diversification under Section 817(h) of the Code, for treatment by the
Series as a regulated investment company under sub-chapter M of the
Code, and for avoiding payment of any excise tax under Section 4982 of
the Code; (v) all other applicable federal and state laws, as each may
be amended from time to time; and (vi) and any resolutions as may be
duly adopted by the Trustees from time to time and any instructions and
procedures of the Advisor, and, in either case, furnished to the
Subadvisor (collectively, these requirements are referred to herein as
the "Investment Requirements").
(b) The Subadvisor shall furnish a continuous investment program and
shall determine what portfolio investments will be purchased, retained,
or sold by the Series with regards to the Assets of the Series in
conformity with the Prospectus and other Investment Requirements.
(c) The Subadvisor shall effect all transactions and take all
actions to implement the investment objectives and policies of the
Series in accordance with this Agreement.
(d) The Subadvisor shall have full authority at all times with
respect to the portfolio management of the Assets, including, but not
limited to, the authority: (i) to give written or oral instructions to
various broker/dealers, banks or other agents and to bind and obligate
the Fund to and for the carrying out of contracts, arrangements, or
transactions which shall be entered into by the Subadvisor on the Fund's
behalf with or through such broker/dealers, banks or other agents; (ii)
to direct the purchase and sale of
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any securities; and (iii) to maintain such uninvested cash balances in
the Assets of the Series as it shall deem reasonable and appropriate
without incurring any liability for the payment of interest thereon.
(e) The Subadvisor shall not, without the Advisor's prior written
approval, effect any transaction or take any action that would cause
the Assets of the Series at the time of the transaction or action to be
out of compliance with any of the Investment Requirements. The
Subadvisor shall promptly inform the Fund and the Advisor of
developments materially affecting (or reasonably expected to affect) the
Assets of the Series, and will, on its own initiative, furnish the Fund
and the Advisor from time to time with whatever information the
Subadvisor believes is appropriate for this purpose.
(f) The Subadvisor shall send or make available appropriate
representatives to/for regular or special meetings of the Fund as may be
reasonably requested from time to time by the Advisor.
(g) The Subadvisor shall provide appropriate representatives to
attend meetings requested by the Advisor at such time(s) and location(s)
as are reasonably requested by the Advisor.
(h) The Subadvisor shall place all orders for the purchase or sale
of securities or other investments for the Assets of the Series with
brokers or dealers selected by the Subadvisor, as more fully specified
below in Section 6 of this Agreement.
4. Transaction Procedures. All transactions for the purchase or sale of
securities or other investments for the Assets of the Series will be
consummated by payment to, or delivery by, the Custodian(s) from time to
time designated by the Fund (the "Custodian"), or such depositories or
agents as may be designated by the Custodian pursuant to its agreement
with the Fund (the "Custodian Agreement"), of all cash and/or securities
and/or other property due to or from the Assets of the Series. The
Subadvisor shall not have possession or custody of such cash and/or
securities or any responsibility or liability with respect to such
custody, except as described herein. The Subadvisor shall advise the
Custodian and confirm in writing or by confirmed electronic transmission
to the Fund all investment orders for the Assets of the Series placed by
it with brokers and dealers at the time and in the manner set forth in
the Custodian Agreement and in Schedule A hereto (as amended from time
to time). The Fund shall issue to the Custodian such instructions as may
be appropriate in connection with the settlement of any transaction
initiated by the Subadvisor. The Fund shall be responsible for all
custodial arrangements and the payment of all custodial charges and
fees, and, upon giving proper instructions to the Custodian, the
Subadvisor shall have no responsibility or liability with respect to
custodial arrangements or the acts, omissions or other conduct of the
Custodian other than arrangements, acts, omissions or other conduct
arising in reliance on instructions of the Subadvisor.
5. Recordkeeping and Reporting. The Subadvisor shall maintain the records
and information required by Rule 31a-1 under the 1940 Act described in
Schedule B attached hereto, with respect to the Assets of the Series. In
addition, the Subadvisor shall maintain
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such other records relating to the services the Subadvisor provides
under this Agreement as may be required in the future by applicable SEC
and other applicable rules, and shall retain such information for such
times and in such manner as required by applicable rules, including but
not limited to Rule 31a-2 under the 1940 Act. The records maintained by
the Subadvisor hereunder shall be the property of the Fund and shall be
surrendered promptly upon request; subject, however, to the Subadvisor's
right to retain all such records as the Subadvisor is required to
maintain under the Advisers Act and the rules and regulations
promulgated thereunder; provided, further, that the Fund shall be
entitled to make and maintain copies of any records so retained by
request.
6. Allocation of Brokerage. The Subadvisor shall have authority and
discretion to select brokers and dealers, including any brokers and
dealers affiliated with the Subadvisor, to execute transactions
initiated by the Subadvisor on behalf of the Series with regard to the
Assets, and to select the markets on or in which the transactions will
be executed, subject to the following limitations:
(a) The Subadvisor shall at all times seek "best-execution", as
defined in Section 28(e)(1) of the 1934 Act.
(b) The Subadvisor shall at all times place orders for the sale and
purchase of securities in accordance with the brokerage policy of the
Series as set forth in the Prospectus and as the Advisor or the Trustees
may direct from time to time.
(c) In placing orders for the sale and purchase of securities for
the Assets of the Series, the Subadvisor's primary responsibility shall
be to seek the best execution of orders at the most favorable prices.
However, this responsibility shall not obligate the Subadvisor to
solicit competitive bids for each transaction or to seek the lowest
available commission cost to the Series, so long as the Subadvisor
reasonably believes that the broker or dealer selected by it can be
expected to provide "best-execution" on the particular transaction and
determines in good faith that the commission cost is reasonable in
relation to the value of the "brokerage and research services," as
defined in Section 28(e)(3) of the 1934 Act, provided by such broker or
dealer to the Subadvisor, viewed in terms of either that particular
transaction or of the Subadvisor's overall responsibilities with respect
to its clients, including the Series, as to which the Subadvisor
exercises investment discretion, notwithstanding that the Series may not
be the direct or exclusive beneficiary of any such services or that
another broker may be willing to charge the Series a lower commission on
the particular transaction.
7. Prohibited Conduct. In providing the services described in this
Agreement, the Subadvisor will not consult with any other investment
advisory firm that the Subadvisor knows provides investment advisory
services to any of the Funds series regarding transactions for the Fund
in securities or other assets. In addition, the Subadvisor shall not,
without the prior written consent of the Fund and the Advisor, delegate
any obligations assumed pursuant to this Agreement to any affiliated or
unaffiliated third party.
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8. Expenses. During the term of this Agreement, the Subadvisor shall bear
all expenses incurred by it in connection with providing its services
hereunder. Without limiting the foregoing, the parties acknowledge and
agree that the Subadvisor shall furnish at its own expense, or pay the
expenses of the Advisor, for the following items:
(a) Office facilities, including office space, furniture and
equipment utilized by the Subadvisor's employees in the fulfillment of
its duties and obligations under this Agreement; and
(b) Personnel and services necessary to perform the functions
required to manage the investment and reinvestment of the Assets
(including those required for research, analysis, pricing, reporting,
statistics, and investment), and to fulfill the other duties and
obligations of the Subadvisor hereunder.
9. Fees for Services. The compensation of the Subadvisor for its services
under this Agreement shall be calculated and paid by the Advisor in
accordance with the attached Schedule C. Pursuant to the Advisory
Agreement between the Fund and the Advisor, the Advisor shall be solely
responsible for the payment of fees to the Subadvisor.
10. Limitation of Liability. The Subadvisor shall not be liable for any
action taken, omitted or suffered to be taken by it in its best
professional judgment, in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Agreement, or in accordance with specific directions or instructions
from the Fund, so long as such acts or omissions shall not have
constituted a breach of the investment objectives, policies and
restrictions applicable to the Assets of the Series and such acts or
omissions shall not have resulted from the Subadvisor's willful
misfeasance, bad faith, reckless disregard or gross negligence, a
violation of the standard of care established by and applicable to the
Subadvisor in its actions under this Agreement or a breach of its duty
or of its obligations hereunder (provided further, however, that the
foregoing shall not be construed to protect the Subadvisor from
liability under the 1940 Act, other federal or state securities laws or
common law).
11. Indemnification.
---------------
(a) The Advisor agrees to indemnify and hold harmless the
Subadvisor, its officers and directors, and any person who "controls"
the Subadvisor, within the meaning of Section 15 of the Securities Act
of 1933, as amended (the "1933 Act"), from and against any and all
direct or indirect liabilities, losses or damages (including reasonable
attorneys' fees) suffered by Subadvisor resulting from (i) the Advisor's
breach of any provision of this Agreement, (ii) willful misfeasance, bad
faith, reckless disregard or gross negligence on the part of the Advisor
or any of its officers, directors or employees in the performance of the
Advisor's duties and obligations under this Agreement or (iii) any
untrue statement or alleged untrue statement of a material fact
contained in the Prospectus and Statement of Additional Information, as
amended or supplemented from time to time or promotional materials
pertaining or relating to the Series or any amendment thereof or any
supplement thereto or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
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statement therein not misleading, if such a statement or omission was
made by the Fund other than in reliance upon written information
furnished by the Subadvisor or any affiliated person of the Subadvisor,
expressly for use in the Fund's registration statement or other than
upon verbal information confirmed by the Subadvisor in writing expressly
for use in the Fund's registration statement.
In no case shall the Advisor's indemnity in favor of the Subadvisor or
any affiliated person or controlling person of the Subadvisor, or any
other provision of this Agreement, be deemed to protect such person
against any liability to which any such person would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence
in the performance of its duties or by reason of its reckless disregard
of its obligations and duties under this Agreement.
(b) The Subadvisor agrees to indemnify and hold harmless the
Advisor, its officers and directors, and any person who "controls" the
Advisor, within the meaning of Section 15 of the 1933 Act, from and
against any and all direct or indirect liabilities, losses or damages
(including reasonable attorneys' fees) suffered by Advisor resulting
from (i) the Subadvisor's breach of its duties under this Agreement,
(ii) willful misfeasance, bad faith, reckless disregard or gross
negligence on the part of the Subadvisor or any of its officers,
directors or employees in the performance of the Subadvisor's duties and
obligations under this Agreement or (iii) any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus
or Statement of Additional Information, as amended or supplemented from
time to time relating to the Series or any amendment thereof or any
supplement thereto or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statement therein not misleading, if such a statement or omission was
made in reliance upon written information furnished by the Subadvisor to
the Advisor, the Fund or any affiliated person of the Advisor or the
Fund expressly for use in the Fund's registration statement, or upon
verbal information confirmed by the Subadvisor in writing expressly for
use in the Fund's registration statement; or (iv) to the extent of, and
as a result of, the failure of the Subadvisor to execute, or cause to be
executed, portfolio transactions with respect to the Assets of the
Series according to the standards and requirements of the 1934 Act, the
1940 Act and the Advisers Act.
In no case shall the Subadvisor's indemnity in favor of the Advisor or
any affiliated person or controlling person of the Advisor, or any other
provision of this Agreement, be deemed to protect such person against
any liability to which any such person would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
12. Insurance. The Subadvisor shall, during the term of this Agreement, at
its own expense, maintain adequate liability and errors and omissions
insurance coverage to the reasonable satisfaction of the Advisor.
13. No Personal Liability. Reference is hereby made to the Declaration of
Trust, a copy of which has been filed with the Secretary of the
Commonwealth of Massachusetts and
B-6
elsewhere as required by law, and to any and all amendments thereto so
filed or hereafter so filed with the Secretary of the Commonwealth of
Massachusetts and elsewhere as required by law. The name The Phoenix
Edge Series Fund refers to the Trustees under said Declaration of Trust,
as Trustees and not personally, and no Trustee, shareholder, officer,
agent or employee of the Fund shall be held to any personal liability in
connection with the affairs of the Fund; only the Fund estate under said
Declaration of Fund is liable. Without limiting the generality of the
foregoing, neither the Subadvisor nor any of its officers, directors,
partners, shareholders or employees shall, under any circumstances, have
recourse or cause or willingly permit recourse to be had directly or
indirectly to any personal, statutory, or other liability of any
shareholder, Trustee, officer, agent or employee of the Fund or of any
successor of the Fund, whether such liability now exists or is hereafter
incurred for claims against the Fund estate.
14. Confidentiality. Subject to the duty of the Advisor or Subadvisor to
comply with applicable law, including any demand of any regulatory or
taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Series and the actions of
the Subadvisor and the Fund in respect thereof. It is understood that
any information or recommendation supplied by the Subadvisor in
connection with the performance of its obligations hereunder is to be
regarded as confidential and for use only by the Advisor, the Fund or
such persons as the Advisor may designate in connection with the Series.
It is also understood that any information supplied to the Subadvisor in
connection with the performance of its obligations hereunder,
particularly, but not limited to, any list of investments which, on a
temporary basis, may not be bought or sold for the Series, is to be
regarded as confidential and for use only by the Subadvisor in
connection with its obligation to provide investment advice and other
services to the Series. The parties acknowledge and agree that all
nonpublic personal information with regard to shareholders in the Series
shall be deemed proprietary information of the Advisor, and that the
Subadvisor shall use that information solely in the performance of its
duties and obligations under this Agreement and shall takes reasonable
steps to safeguard the confidentiality of that information. Further, the
Subadvisor shall maintain and enforce adequate security procedures with
respect to all materials, records, documents and data relating to any of
its responsibilities pursuant to this Agreement including all means for
the effecting of investment transactions.
15. Assignment. This Agreement shall terminate automatically in the event of
its "assignment," as that term is defined in Section 2(a)(4) of the 1940
Act. The Subadvisor shall provide the Advisor with reasonable advance
written notice of any proposed change of "control," as defined in
Section 2(a)(9) of the 1940 Act, as will enable the Advisor to consider
whether an assignment as defined in Section 2(a)(4) of the 1940 Act will
occur and to take the steps it deems necessary. The understandings and
obligations set forth in this Section shall survive the termination of
this Agreement and shall be binding upon the Subadvisor and its
successors.
16. Representations, Warranties and Agreements of the Subadvisor. The
Subadvisor represents, warrants and agrees that:
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(a) It is registered as an "investment advisor" under the Advisers
Act and will maintain such status so long as this Agreement remains in
effect.
(b) It shall comply with any other applicable federal or state
requirements, and the applicable requirements of any regulatory or
self-regulatory agency, necessary to be met for its performance of the
services contemplated by this Agreement so long as this Agreement
remains in effect.
(c) It is not prohibited by the 1940 Act, the Advisers Act or other
applicable federal or state law from performing the services contemplated
by this Agreement.
(d) It is duly organized and validly existing under the laws of the
State in which it was organized with the power to own and posses its
assets and carry on its business as it is now being conducted.
(e) It has the power and has taken all necessary action, and has
obtained all necessary licenses, authorizations and approvals, to
execute this Agreement, which Agreement constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms, to enter
into and perform the services contemplated by this Agreement; and the
execution, delivery and performance by it of this Agreement does not
contravene or constitute a default under any agreement binding upon it.
(f) It will promptly notify the Advisor of the occurrence of any
event that would disqualify it from serving as an investment advisor of
an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.
(g) It has a written code of ethics complying with the requirements
of Rule 17j-l under the 1940 Act and Rule 204A-1 of the Advisers Act and
will provide the Advisor with a copy of the code of ethics and evidence
of its adoption. The Subadvisor acknowledges receipt of the written code
of ethics adopted by and on behalf of the Fund (the "Code of Ethics").
It will not be subject to the Code of Ethics during the term of this
Agreement so long as its code of ethics complies with applicable
regulatory requirements and has been approved by the Trustees. Within 15
days of the end of each calendar quarter while this Agreement is in
effect, a duly authorized compliance officer of the Subadvisor shall
certify to the Fund and to the Advisor that the Subadvisor has complied
with the requirements of Rules 17j-l and 204A-1 of the Advisers Act
during the previous calendar quarter and that there has been no
violation of its code of ethics, or the Code of Ethics, as the case may
be, or if such a violation has occurred, that appropriate action was
taken in response to such violation. The Subadvisor shall permit the
Fund and Advisor to examine the reports required to be made by the
Subadvisor under Rule 17j-l(c)(1) and all other records relevant to the
Subadvisor's code of ethics as may be reasonably requested by the
Advisor or Trustees from time to time.
(h) It will use all necessary efforts to manage the Assets of the
Series so that it will satisfy the diversification and minimum "good
income" requirements of Subchapter M and the diversification requirements
of Section 817(h) of the Internal Revenue Code of 1986, as amended.
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(i) It has furnished a true and complete copy of its registration
statement as filed with the Securities and Exchange Commission (the
"Commission") on Form ADV to the Advisor and will furnish promptly such
updated copies of its registration statement or amendments thereto as
are filed with the Commission from time to time.
(j) It will furnish to the Advisor true and complete copies of
reports or other documents as may be reasonably requested by the Advisor
in connection with the performance of the Subadvisor's duties and
obligations under this Agreement.
(k) It will be responsible for the preparation and filing of
Schedule 13G and Form 13F on behalf of the Assets of the Series in
accordance with the requirements thereunder.
(l) It will furnish or otherwise make available to the Advisor such
other information relating to the business affairs of the Subadvisor or
the management of the Series as the Advisor at any time, or from time to
time, reasonably requests in connection with the Advisor's or
Subadvisor's performance of its respective obligations hereunder;
subject, however, to the Subadvisor's right to retain all such records
as the Subadvisor is required to maintain under the Advisers Act and the
rules and regulations promulgated thereunder; provided, further, that
the Fund and the Advisor shall be entitled to make and maintain copies
of any records so retained by the Subadvisor.
(m) It will maintain, keep current and preserve on behalf of the
Fund, in the manner required or permitted by the Advisers Act and the
Rules thereunder, the records identified in Schedule B (as Schedule B
may be amended from time to time). The Subadvisor agrees that such
records are the property of the Fund, and will be surrendered to the
Fund or to the Adviser as agent of the Fund promptly upon request of
either.
(n) The Subadvisor hereby warrants and represents that it will
provide the requisite certifications requested by the chief executive
office and chief financial officer of the Fund necessary for those named
officers to fulfill their reporting and certification obligations on
Form N-CSR as required under the Sarbanes-Oxley Act of 2002 in
substantially the form presented in Schedule E attached hereto and made
a part hereof.
(o) 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 Subadvisor and its supervised persons, and, to the extent the
activities of the Subadvisor in respect to the Fund could affect the
Fund, by the Fund, of "federal securities laws" (as defined in Rule
38a-1 under the Act), and that the Subadvisor has provided the Fund with
true and complete copies of its policies and procedures (or summaries
thereof) and related information requested by the Fund. The Subadvisor
agrees to cooperate with periodic reviews by the Fund's compliance
personnel of the Subadvisor's policies and procedures, their operation
and implementation and other compliance matters and to provide to the
Fund from time to time such additional information and certifications in
respect of the Subadvisor's policies and procedures, compliance by the
Subadvisor with federal securities laws and related matters and the
Fund's compliance personnel may reasonably request. The Subadvisor
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agrees to promptly notify the Advisor of any material compliance
violations which affect the Series.
17. Representations, Warranties and Agreements of the Advisor. The Advisor
represents, warrants and agrees that:
(a) It is registered as an "investment advisor" under the Advisers
Act.
(b) It shall continue to meet any other applicable federal or state
requirements, or the applicable requirements of any regulatory or
self-regulatory agency, necessary to be met for its performance of the
services contemplated by this Agreement so long as this Agreement
remains in effect.
(c) It is not prohibited by the 1940 Act, the Advisers Act or other
applicable federal or state law from performing the services contemplated
by this Agreement.
(d) It is duly organized and validly existing under the laws of the
State in which it was organized with the power to own and posses its
assets and carry on its business as it is now being conducted.
(e) It has the power and has taken all necessary action, and has
obtained all necessary licenses, authorizations and approvals, to
execute this Agreement, which Agreement constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms, to enter
into and perform the services contemplated by this Agreement; and the
execution, delivery and performance by it of this Agreement does not
contravene or constitute a default under any agreement binding upon it.
(f) It has delivered, or will before the effective date of this
Agreement deliver, to the Subadvisor true and complete copies of (i) the
Prospectus, (ii) the Declaration of Trust, and (iii) such other documents
or instruments governing the investments and investment policies and
practices of the Series applicable to the Subadvisor's duties and
obligations hereunder, and during the term of this Agreement will
promptly deliver to the Subadvisor true and complete copies of all
documents and instruments supplementing, amending, or otherwise becoming
such documents or instruments before or at the time they become
effective.
(g) It will furnish or otherwise make available to the Subadvisor
such other information relating to the business affairs of the Fund as
the Subadvisor at any time, or from time to time, reasonably requests in
order to discharge its obligations hereunder.
18. Representations, Warranties and Agreements of the Fund. By their approval
of this Agreement the Trustees represent, warrant and agree that:
(a) The Fund is not prohibited by the 1940 Act or other applicable
federal or state law from performing their obligations under this
Agreement.
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(b) The Fund is duly organized and validly existing under the laws
of the State in which it was organized with the power to own and posses
its assets and carry on its business as it is now being conducted.
(c) The Fund has taken all necessary action, and have obtained all
necessary licenses, authorizations and approvals, to permit the Fund to
enter into this Agreement, which Agreement constitutes the Fund's legal,
valid and binding obligation, enforceable in accordance with its terms;
and the execution, delivery and performance by the Fund of this Agreement
does not contravene or constitute a default under any agreement binding
upon the Fund.
19. Reports. The Subadvisor shall provide the Advisor and the Trustees such
periodic and special reports as the Advisor may reasonably request. The
Subadvisor agrees that such records are the property of the Fund, and
shall be made reasonably available for inspections, and by the Fund or
by the Advisor as agent of the Fund, and promptly upon request
surrendered to either. Without limiting the generality of the foregoing,
the parties agree and acknowledge that the Subadvisor shall provide the
following items:
(a) Quarterly reports, in form and substance acceptable to the
Advisor, including but not limited to reports with respect to: (i)
compliance with the Subadvisor's code of ethics; (ii) compliance with
procedures adopted from time to time by the Trustees relative to
securities eligible for resale pursuant to Rule 144A under the 1933 Act;
(iii) diversification of the Assets of the Series assets in accordance
with the then governing laws and prevailing Prospectus pertaining to the
Series; (iv) compliance with governing Fund policies and restrictions
relating to the fair valuation of securities for which market quotations
are not readily available or considered "illiquid" for the purposes of
complying with the Series limitation on acquisition of illiquid
securities; (v) cross transactions conducted pursuant to Rule 17a-7
under the 1940 Act; (vi) allocations of brokerage transactions along
with descriptions of the bases for those allocations and the receipt and
treatment of brokerage and research services received, as may be
requested to ensure compliance with Section 28(e) of the 1934 Act; (vii)
any and all other reports reasonably requested in accordance with or
described in this Agreement; and, (viii) the implementation of the
Assets of the Series investment program, including, without limitation,
analyses of Series performance pertaining to the Assets of the Series;
(b) Annual or other periodic reports, in form and substance
acceptable to the Advisor, including but not limited reports with
respect to: (i) analyses of Series performance pertaining to the Assets
of the Series; (ii) disclosure related to the portfolio management of
the Assets of the Series and the Subadvisor as may be contained in the
Prospectus or marketing materials as amended, supplemented or otherwise
updated from time to time; and (iii) foreign custody arrangements as
governed by Rule 17f-7 under the 1940 Act; (iv) compliance with the
Subadvisor's code of ethics pursuant to Rule 17j-1; and (v) such
compliance certifications as may be reasonably requested.
(c) The parties acknowledge and agree that the Subadvisor is
authorized to supply the Fund's independent accountants,
PricewaterhouseCoopers LLP, or any
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successor accountant for the Fund, any reasonable information that they
may request in connection with the Fund.
In addition, the Subadvisor shall immediately notify and forward to both
the Advisor and legal counsel for the Series whose identity has been
provided to the Subadvisor any legal process served upon it on behalf of
the Advisor or the Fund. The Subadvisor shall promptly notify the
Advisor of any changes in any information concerning the Subadvisor of
which the Subadvisor becomes aware that is or would be required to be
disclosed in the Fund's registration statement.
20. Proxies and Class Actions. The Subadvisor shall review all proxy
solicitation materials and be responsible for voting and handling all
proxies in relation to the Assets. Unless the Advisor or the Fund gives
the Subadvisor written instructions to the contrary, the Subadvisor
will, in compliance with the proxy voting policy and procedures adopted
by the Subadvisor, vote or abstain from voting, all proxies solicited by
or with respect to the issuers of securities in which the Assets of the
Series may be invested. The Advisor shall cause the Custodian to forward
promptly to the Subadvisor all such proxies upon receipt, so as to
afford the Subadvisor a reasonable amount of time in which to determine
how to vote such proxies. The Subadvisor agrees to provide the Advisor
in a timely manner with quarterly proxy voting reports containing a
record of votes cast containing all of the voting information required
by Form N-PX. The Subadvisor will not advise or act on behalf of the
Series to file Form N-PX as required by Rule 30b1-4 under the Act. The
Subadvisor will not advise or act on behalf of the Series in regards to
class action filings, with respect to any securities held by the Series.
21. Valuation of Assets and Related Recordkeeping. The Subadvisor shall
assist the recordkeeping agent for the Fund in determining or confirming
the value of any securities or other assets pertaining to the Assets of
the Series for which the recordkeeping agent seeks assistance from or
identifies for review by the Advisor. The parties agree that, consistent
with applicable law, the Advisor will not bear responsibility for the
determination of value of any such securities or other assets.
22. Amendment. This Agreement may be amended at any time, but only by
written agreement between the Subadvisor and the Advisor, which
amendment, other than amendments to Schedule A, B, C, D or E, is subject
to the approval of the Trustees and the Shareholders of the Fund as and
to the extent required by the 1940 Act.
23. Effective Date; Term. This Agreement shall become effective on the date
set forth on the first page of this Agreement. Unless terminated as
hereinafter provided, this Agreement shall remain in full force and
effect until December 31, 2010, and thereafter only so long as its
continuance has been specifically approved at least annually in
accordance with Sections 15(a) and (c) of the 1940 Act and the Rules
promulgated thereunder.
24. Notices. Except as otherwise provided in this Agreement, all notices or
other communications required of permitted to be given hereunder shall
be in writing and shall be delivered or sent by (i) confirmed facsimile,
(ii) registered, certified or overnight mail, or (iii) a nationally
recognized overnight courier, to the following addresses or to such
B-12
other address as the relevant addressee shall hereafter notify for such
purpose to the other by notice in writing and shall be deemed to have
been given at the time of delivery.
If to the Advisor: PHOENIX VARIABLE ADVISORS, INC.
One American Row
Hartford, Connecticut 06102
Attention: Doreen A. Bonner, Vice President and
Chief Compliance Officer
Telephone: (860) 403-5456
Facsimile: (860) 403-7203
Email: Doreen.Bonner@phoenixwm.com
If to the Subadvisor: WESTWOOD MANAGEMENT CORP.
200 Crescent Court, Suite 1200
Attention: Brian O. Casey
Telephone: 214-756-6900
Facsimile: 214-756-6979
Email: bcasey@westwoodgroup.com
25. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other party in the event
of a breach of any provision thereof by the party so notified, or
otherwise, upon sixty (60) days' written notice to the other party but
any such termination shall not affect the status, obligations or
liabilities of any party hereto to the other party.
26. Use of Subadvisor's Name.
-------------------------
a) The Subadvisor hereby grants to the Fund and the Advisor a
non-exclusive, royalty-free, non-transferable worldwide license to use
the Subadvisor's name and the Subadvisor's logo (collectively, the
"Name") in any and all promotional materials, prospectuses and
registration statementsfor the purpose of advertising, promoting and
registering the Fund during the term of this Agreement. The Fund shall
furnish, or shall cause to be furnished, to the Subadvisor or its
designee, each piece of sales literature or other promotional material in
which the Subadvisor is named or the Name used, at least ten (10)
business days prior to its use. The Subadvisor shall be permitted to
review and approve the material in written or electronic form prior to
such printing. No such material shall be used if the subadvisor or its
designee reasonably objects to such use within ten (10) business days
after receipt of this material, such approval, may not be unreasonably
withheld. All rights in and to the Name not expressly granted under this
Section 26(a) are reserved by the Subadvisor
b) All use of the Name by the Advisor and the Fund, and the nature
and quality of the Fund, and the promotional materials, prospectuses,
registration statements, and uses of the Name, are subject to, and shall
comply with, the Subadvisor's quality control standards and requirements.
The Subadvisor may periodically inspect the Advisor's and the Fund's
operations to ensure compliance with such quality control standards and
requirements and the terms and conditions of this Agreement after
providing the Advisor or the Fund with reasonable advance notice.
B-13
c) The Advisor and the Fund each agree to give notice to the
Subadvisor of any infringement of the Name that comes to its attention
and cooperate reasonably with the Subadvisor when and as requested by
the Subadvisor in preventing and stopping any such infringement, but
otherwise not to take any action against any infringer
27. 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 New York, without giving effect to the conflicts of laws
principles thereof.
28. 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.
29. Certifications. The Subadvisor hereby warrants and represents that it
will provide the requisite certifications requested by the Chief
Executive Officer and the Chief Financial Officer of the Fund necessary
for those named officers to fulfill their reporting and certification
obligations on Form N-SAR as required under the Sarbanes-Oxley Act of
2002.
30. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter of this
Agreement.
31. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and all such counterparts
shall constitute a single instrument.
THE PHOENIX EDGE SERIES FUND
By: /s/ Philip K. Polkinghorn
-------------------------------
Name: Philip K. Polkinghorn
Title: President
PHOENIX VARIABLE ADVISORS, INC.
By: /s/ John H. Beers
-------------------------------
Name: John H. Beers
Title: Vice President and Secretary
ACCEPTED:
WESTWOOD MANAGEMENT CORP.
By: /s/ Brian O. Casey
----------------------
B-14
Name: Brian O. Casey
Title: President & CEO
SCHEDULES: A. Operational Procedures
B. Records to be Maintained by the Subadvisor
C. Subadvisory Fee
D. Subadvisor Functions
E. Form of Sub-Certification
B-15
SCHEDULE A
----------
OPERATIONAL PROCEDURES
In order to minimize operational problems, it will be necessary for a flow of
information to be supplied by the Subadvisor to State Street Bank and Trust
Company (the "Custodian") and PNC Global Investment Servicing (the
"Sub-Accounting Agent") for the Fund.
The Subadvisor must furnish the Custodian and Sub-Accounting Agent with daily
information as to executed trades, or, if no trades are executed, with a report
to that effect, no later than 5:00 p.m. (Eastern time) on the day of the trade
(confirmation received from broker). The necessary information can be sent
electronically or via facsimile machine to the Custodian and the Sub- Accounting
Agent. Information provided to the Custodian and the Sub-Accounting Agent shall
include the following:
1. Purchase or sale;
2. Security name;
3. Security identifier (e.g., CUSIP), if applicable;
4. Number of shares and sales price per share;
5. Executing broker;
6. Settlement instructions for foreign trades; clearing and
executing broker for domestic trades;
7. Trade date;
8. Settlement date;
9. Aggregate commission or if a net trade;
10. Interest purchased or sold from interest bearing security;
11. Other fees;
12. Net proceeds of the transaction;
13. Exchange where trade was executed;
14. Currency for foreign trades;
15. Ticker symbol for domestic trades; and
16. Identified tax lot (if applicable).
When opening accounts with brokers for, and in the name of, the Series, the
account must be a cash account. No margin accounts are to be maintained in the
name of the Series. Delivery instructions are as specified by the Custodian. The
Custodian and Sub-Accounting Agent will supply the Subadvisor 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
report, which shall include cash detail and pending trades. This will normally
be done by electronically or via facsimile machine by confirmed facsimile or
confirmed electronic transmission so that the Subadvisor will know the amount
available for investment purposes.
B-16
SCHEDULE B
----------
RECORDS TO BE MAINTAINED BY THE SUBADVISOR
1. (Rule 31a-1(b)(5)) A record of each brokerage order, and all other series
purchases and sales, given by the Subadvisor on behalf of the Series for,
or in connection with, the purchase or sale of securities, whether
executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any modifications or
cancellations thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of the Fund.
2. (Rule 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 placed by the Subadvisor 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 Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or dealers
to:
(a) The Fund,
(b) The Advisor,
(c) The Subadvisor, and
(d) Any person other than the foregoing.
(iii) Any other consideration other than the technical
qualifications of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made available.
C. Shall describe in detail the application of any general or specific
formula or other determinant used in arriving at such allocation of
purchase and sale orders and such division of brokerage commissions
or other compensation.
D. The name of the person responsible for making the determination of
such allocation and such division of brokerage commissions or other
compensation.
B-17
3. (Rule 31a-(b)(10)) A records 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 Investment Advisers Act of 1940, to the extent such
records are necessary or appropriate to record the Subadvisor's
transactions for the Series.
- --------------------------------
* Such information might include: current financial information, annual and
quarterly reports, press releases, reports by analysts and from brokerage
firms (including their recommendation; i.e., buy, sell, hold) or any internal
reports or subadvisor review.
B-18
SCHEDULE C
----------
SUBADVISORY FEE
For services provided to the Fund, the Advisor will pay to the Subadvisor, on or
before the 10th day of each month, a fee, payable in arrears, at the annual rate
stated below.
The fees shall be prorated for any month during which this Agreement is in
effect for only a portion of the month. In computing the fee to be paid to the
Subadvisor, the net asset value of the Fund and each Series shall be valued as
set forth in the then current registration statement of the Fund.
Name of Series: Annual Subadvisory Fee Rate
Phoenix Small-Cap Value Series 0.70% on the first $50 million;
0.62% on assets thereafter.
B-19
SCHEDULE D
----------
SUBADVISOR FUNCTIONS
With respect to managing the investment and reinvestment of the Series'
assets, the Subadvisor shall provide, at its own expense:
(a) An investment program for the Series consistent with its investment
objectives based upon the development, review and adjustment of buy/sell
strategies approved from time to time by the Board of Trustees and
Advisor, all as set forth in the Objectives and Policies;
(b) Implementation of the investment program for the Series based upon the
foregoing criteria;
(c) Quarterly reports, in form and substance acceptable to the Advisor, with
respect to: (i) compliance with the Code of Ethics; (ii) compliance with
procedures adopted from time to time by the Trustees of the Fund relative
to securities eligible for resale under Rule 144A under the Securities Act
of 1933, as amended; (iii) diversification of Series assets in accordance
with the then prevailing Objectives and Policies and governing laws; (iv)
compliance with governing restrictions relating to the fair valuation of
securities for which market quotations are not readily available or
considered "illiquid" for the purposes of complying with the Series'
limitation on acquisition of illiquid securities included in the Objectives
and Policies; (v) any and all other reports reasonably requested in
accordance with or described in this Agreement; and (vi) the implementation
of the Series' investment program, including, without limitation, analysis
of Series performance;
(d) Promptly after filing with the Securities and Exchange Commission an
amendment to its Form ADV, a copy of such amendment to the Advisor and the
Trustees;
(e) Attendance by appropriate representatives of the Subadvisor at meetings
requested by the Advisor or Trustees at such time(s) and location(s) as
reasonably requested by the Advisor or Trustees; and
(f) Notice to the Trustees and the Advisor of the occurrence of any event
which would disqualify the Subadvisor from serving as an investment
advisor of an investment company pursuant to Section 9(a) of the 1940 Act
or otherwise.
B-20
SCHEDULE E
----------
FORM OF SUB-CERTIFICATION
To:
Re: Form N-CSR Certification for the [Name of Series].
From: [Name of Subadvisor]
Representations in support of Investment Company Act Rule 30b1-5 certifications
of Form N-CSR.
[Name of Series].
In connection with your certification responsibility under Rule 30b1-5
and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, I have
reviewed the following information presented for the period ended
[Date of Reporting Period] (the "Reports") which forms part of the
N-CSR for the Series.
Schedule of Investments (the "Reports")
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 funds.
b. 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 Subadvisor to
the Series.
I have read the draft of the Reports which I understand to be current as of
[Date of Reporting Period] and based on my knowledge, such drafts of the Reports
do not, with respect to the 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
Reports.
I have disclosed, based on my most recent evaluation, to the Series' Chief
Accounting Officer:
a. All significant changes, deficiencies and material weakness, if any,
in the design or operation of the Subadvisor's internal controls and
procedures which could adversely affect the Advisor's ability to
record, process, summarize and report financial data in a timely
fashion;
B-21
b. Any fraud, whether or not material, that involves the Subadvisor's
management or other employees who have significant role in the
Subadvisor's internal controls and procedures for financial reporting.
I certify that to the best of my knowledge:
a. The Subadvisor's portfolio manager has complied with the restrictions
and reporting requirements of the Subadvisor's Code of Ethics (the
"Code").
b. The Subadvisor has complied with the Prospectus and Statement of
Additional Information of the Series and the Policies and Procedures
of the Series as adopted by the Board of Trustees.
c. I have no knowledge of any compliance violations with respect to the
Series except as disclosed in writing to the Phoenix Compliance
Department by me or by the Subadvisor's compliance officer.
d. The Subadvisor 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
Subadvisor with respect to the Series as outlined above.
This certification relates solely to the Series named above and may not be
relied upon by any other fund or entity.
The Subadvisor does not maintain the official books and records of the above
Series. The Subadvisor's records are based on its own portfolio management
system, a record-keeping system that is not intended to service as the Funds'
official accounting system. The Subadvisor is not responsible for the
preparation of the Reports.
- ---------------------------------- --------------------
[Name of Authorized Signature] Date
B-22
Exhibit C
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, effective as of the 1st day of May, 2009 (the "Contract
Date") by and between The Phoenix Edge Series Fund, a Massachusetts business
trust (the "Trust") and Phoenix Variable Advisors, Inc., a Delaware corporation
(the "Advisor").
WITNESSETH THAT:
1. The Trust hereby appoints the Advisor to act as investment advisor to
the Trust on behalf of the series of the Trust established and designated by the
Board of Trustees of the Trust (the "Trustees") on or before the date hereof, as
listed on attached Schedule A (collectively, the "Existing Series"), for the
period and on the terms set forth herein. The Advisor accepts such appointment
and agrees to render the services described in this Agreement for the
compensation herein provided.
2. In the event that the Trustees desire to retain the Advisor to render
investment advisory services hereunder with respect to one or more additional
series (the "Additional Series"), by agreement in writing, the Trust and the
Advisor may agree to amend Schedule A to include such Additional Series,
whereupon such Additional Series shall become subject to the terms and
conditions of this Agreement.
3. The Advisor shall furnish continuously an investment program for the
Existing Series and any Additional Series which may become subject to the terms
and conditions set forth herein (sometimes collectively referred to as the
"Series") and shall manage the investment and reinvestment of the assets of each
Series, subject at all times to the supervision of the Trustees.
4. The Advisor may delegate its investment responsibilities under paragraph
3 above with respect to the Series or segments thereof to one or more persons or
companies ("Subadvisor(s)") pursuant to an agreement between the Advisor, the
Trust and any such Subadvisor ("Subadvisory Agreement"). Each Subadvisory
Agreement may provide that the applicable Subadvisor, subject to the control and
supervision of the Board of Trustees and the Advisor, shall have full investment
discretion for the Series, shall make all determinations with respect to the
investment and reinvestment of the assets of each Series assigned it. Any
delegation of duties pursuant to this paragraph shall comply with any applicable
provisions of Section 15 of the Investment Company Act of 1940 (the "Act"),
except to the extent permitted by any exemptive order of the Securities and
Exchange Commission ("SEC") or similar relief. The Advisor shall not be
responsible or liable for the investment merits of any decision by a Subadvisor
to purchase, hold or sell a security for any Series' portfolio.
5. With respect to managing the investment and reinvestment of the Series'
assets, the Advisor shall provide, at its own expense:
(a) Investment research, advice and supervision;
(b) An investment program for each Series consistent with its
investment objectives, policies and procedures;
(c) Implementation of the investment program for each Series including
the purchase and sale of securities;
(d) Implementation of an investment program designed to manage cash,
cash equivalents and short-term investments for a Series with
respect to assets designated from time to time to be managed by a
subadvisor to such Series;
(e) Advice and assistance on the general operations of the Trust; and
(f) Regular reports to the Trustees on the implementation of each
Series' investment program.
6. The Advisor shall, for all purposes herein, be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Trust or the Series in
any way or otherwise be deemed an agent of the Trust or of the Series. However,
one or more shareholders, officers, directors or employees of the Advisor may
serve as trustees and/or officers of the Trust, but without compensation or
reimbursement of expenses for such services from the Trust. Nothing herein
contained shall be deemed to require the Trust to take any action contrary to
its Declaration of Trust, as amended (the "Declaration of Trust"), as amended,
restated or supplemented, or any applicable statute or regulation, or to relieve
or deprive the Board of Trustees of its responsibility for and control of the
affairs of the Series.
7. The Advisor shall furnish at its own expense, or pay the expenses of the
Trust, for the following:
(a) Office facilities, including office space, furniture and equipment;
(b) Personnel necessary to perform the functions required to manage the
investment and reinvestment of each Series' assets (including those
required for research, statistical and investment work);
(c) Except as otherwise approved by the Board, personnel to serve
without salaries from the Trust as officers or agents of the Trust.
The Advisor need not provide personnel to perform, or pay the
expenses of the Trust for, services customarily performed for an
open-end management investment company by its national distributor,
custodian, financial agent, transfer agent, registrar, dividend
disbursing agent, auditors and legal counsel;
(d) Compensation and expenses, if any, of the Trustees who are also
full-time employees of the Advisor or any of its affiliates; and
2
(e) Any subadvisor recommended by the Advisor and appointed to act on
behalf of the Trust.
8. All costs and expenses not specifically enumerated herein as payable by
the Advisor shall be paid by the Trust. Such expenses shall include, but shall
not be limited to, all expenses (other than those specifically referred to as
being borne by the Advisor) incurred in the operation of the Trust and any
public offering of its shares, including, among others, interest, taxes,
brokerage fees and commissions, fees of Trustees who are not affiliated persons
of the Advisor (as that term is defined in the Act) or any of its affiliates,
expenses of Trustees' and shareholders' meetings including the cost of printing
and mailing proxies, expenses of Advisor personnel attending Trustee meetings as
required, expenses of insurance premiums for fidelity and other coverage of the
Trust and its personnel, expenses of repurchase and redemption of shares,
expenses of issue and sale of shares (to the extent not borne by its national
distributor under its agreement with the Trust), expenses of printing and
mailing stock certificates representing shares of the Trust, association
membership dues, charges of custodians, transfer agents, dividend disbursing
agents and financial agents, bookkeeping, auditing and legal expenses. The Trust
will also pay the fees and bear the expense of registering and maintaining the
registration of the Trust and its shares with the SEC and registering or
qualifying its shares under state or other securities laws and the expense of
preparing and mailing prospectuses and reports to shareholders. Additionally, if
authorized by the Trustees, the Trust shall pay for extraordinary expenses and
expenses of a non-recurring nature which may include, but not be limited to the
reasonable and proportionate cost of any reorganization or acquisition of assets
and the cost of legal proceedings to which the Trust is a party.
9. The Advisor shall adhere and shall use reasonable efforts to cause the
Trust to adhere to all applicable policies and procedures as adopted from time
to time by the Trustees, including but not limited to the following:
(a) Code of Ethics. The Advisor shall adopt a Code of Ethics designed
to prevent "access persons" (as defined therein in accordance with
Rule 17j-1 under the Investment Company Act of 1940 (the
"Investment Company Act")) from engaging in fraudulent acts or
transactions that are, or have the potential of being viewed as, a
conflict of interest, and shall monitor for compliance with its
Code of Ethics and report any violations to the Trust's Compliance
Officer.
(b) Policy with Respect to Brokerage Allocation. The Advisor shall
have full trading discretion in selecting brokers for Series
transactions on a day to day basis so long as each selection is in
conformance with the Trust's Policy with Respect to Brokerage
Allocation. Such discretion shall include use of "soft dollars"
for certain broker and research services, also in conformance with
the Trust's Policy with Respect to Brokerage Allocation. The
Advisor may delegate the responsibilities under this section to a
Subadvisor of a Series.
(c) Procedures for the Determination of Liquidity of Assets. It shall
be the responsibility of the Advisor to monitor the Series' assets
that are not
3
liquid, making such determinations as to liquidity of a particular
asset as may be necessary, in accordance with the Trust's
Procedures for the Determination of Liquidity of Assets. The
Advisor may delegate the responsibilities under this section to a
Subadvisor of a Series.
(d) Policy with Respect to Proxy Voting. In the absence of specific
direction to the contrary and in a manner consistent with the
Trust's Policy with Respect to Proxy Voting, the Advisor shall be
responsible for voting proxies with respect to portfolio holdings
of the Trust. The Advisor shall review all proxy solicitation
materials and be responsible for voting and handling all proxies
in relation to the assets under management by the Advisor in
accordance with such policies and procedures adopted or approved
by each Series'. Unless the Fund gives the Advisor written
instructions to the contrary, the Advisor will, in compliance with
the proxy voting procedures of the Series then in effect or
approved by the Series, vote or abstain from voting, all proxies
solicited by or with respect to the issuers of securities in which
the assets of the Series may be invested. The Advisor shall cause
the Custodian to forward promptly to the Advisor (or designee) all
proxies upon receipt so as to afford the Advisor a reasonable
amount of time in which to determine how to vote such proxies. The
Advisor agrees to provide the Trust with quarterly proxy voting
reports in such form as the Trust may request from time to time.
The Advisor may delegate the responsibilities under this section
to a Subadvisor of a Series.
(e) Procedures for the Valuation of Securities. It shall be the
responsibility of the Advisor to fully comply with the Trust's
Procedures for the Valuation of Securities. The Advisor may
delegate the responsibilities under this section to a Subadvisor
of a Series.
10. The Advisor hereby warrants and represents that it will provide the
requisite certifications requested by the chief executive officer and chief
financial officer of the Fund necessary for those named officers to fulfill
their reporting and certification obligations on Forms N-CSR and N-Q as required
under the Sarbanes-Oxley Act of 2002.
11. For providing the services and assuming the expenses outlined herein,
the Trust agrees that the Advisor shall be compensated as follows:
(a) The Trust shall pay a monthly fee calculated at an annual rate as
specified in Schedule A. The amounts payable to the Advisor with
respect to the respective Series shall be based upon the average
of the values of the net assets of such Series excluding the net
assets representing capital contributed by Phoenix Life Insurance
Company ("seed money"), as of the close of business each day,
computed in accordance with the Trust's Declaration of Trust.
(b) Compensation shall accrue immediately upon the effective date of
this Agreement.
4
(c) If there is termination of this Agreement with respect to any
Series during a month, the Series' fee for that month shall be
proportionately computed upon the average of the daily net asset
values of such Series for such partial period in such month.
(d) The Advisor, at its discretion, agrees to reimburse the Trust for
the amount, if any, by which the total operating and management
expenses for any Series (including the Advisor's compensation,
pursuant to this paragraph, but excluding taxes, interest, costs
of portfolio acquisitions and dispositions and extraordinary
expenses), for any "fiscal year" exceed the level of expenses
which such Series is permitted to bear under the most restrictive
expense limitation (which is not waived by the State) imposed on
open-end investment companies by any state in which shares of such
Series are then qualified. Such reimbursement, if any, will be
made by the Advisor to the Trust within five days after the end of
each month. For the purpose of this subparagraph (d), the term
"fiscal year" shall include the portion of the then current fiscal
year which shall have elapsed at the date of termination of this
Agreement.
12. The services of the Advisor to the Trust are not to be deemed exclusive,
the Advisor being free to render services to others and to engage in other
activities. Without relieving the Advisor of its duties hereunder and subject to
the prior approval of the Trustees and subject farther to compliance with
applicable provisions of the Investment Company Act, as amended, the Advisor may
appoint one or more agents to perform any of the functions and services which
are to be provided under the terms of this Agreement upon such terms and
conditions as may be mutually agreed upon among the Trust, the Advisor and any
such agent.
13. The Advisor shall not be liable to the Trust or to any shareholder of
the Trust for any error of judgment or mistake of law or for any loss suffered
by the Trust or by any shareholder of the Trust in connection with the matters
to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
the Advisor in the performance of its duties hereunder.
14. It is understood that:
(a) Trustees, officers, employees, agents and shareholders of the Trust
are or may be "interested persons" of the Advisor as directors,
officers, stockholders or otherwise;
(b) Directors, officers, employees, agents and stockholders of the
Advisor are or may be "interested persons" of the Trust as
Trustees, officers, shareholders or otherwise; and
(c) The existence of any such dual interest shall not affect the
validity hereof or of any transactions hereunder.
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15. This Agreement shall become effective with respect to the Existing
Series as of the date stated above, and with respect to any Additional Series,
on the date specified in any amendment to this Agreement reflecting the addition
of each Additional Series in accordance with paragraph 2 (the "Amendment Date").
Unless terminated as herein provided, this Agreement shall remain in full force
and effect until December 31, 2010 with respect to each Existing Series and
until November 30 of the first full calendar year following the Amendment Date
with respect to each Additional Series, and shall continue in full force and
effect for periods of one year thereafter with respect to each Series so long as
(a) such continuance with respect to any such Series is approved at least
annually by either the Trustees or by a "vote of the majority of the outstanding
voting securities" of such Series and (b) the terms and any renewal of this
Agreement with respect to any such Series have been approved by a vote of a
majority of the Trustees who are not parties to this Agreement or "interested
persons" of any such party cast in person at a meeting called for the purpose of
voting on such approval; provided, however, that the continuance of this
Agreement with respect to each Additional Series is subject to its approval by a
"vote of a majority of the outstanding voting securities" of any such Additional
Series on or before the next anniversary of the Contract Date following the date
on which such Additional Series became a Series hereunder .
Any approval of this Agreement by a vote of the holders of a "majority of
the outstanding voting securities" of any Series shall be effective to continue
this Agreement with respect to such Series notwithstanding (a) that this
Agreement has not been approved by a "vote of a majority of the outstanding
voting securities" of any other Series of the Trust affected thereby and (b)
that this Agreement has not been approved by the holders of a "vote of a
majority of the outstanding voting securities" of the Trust, unless either such
additional approval shall be required by any other applicable law or otherwise.
16. The Advisor shall furnish any state insurance commissioner with such
information or reports in connection with the services provided under this
Agreement as the Commissioner may request in order to ascertain whether variable
life insurance or variable annuity operations are being conducted in accordance
with applicable law or regulations. The Trust shall own and shall be open to
inspection, audit and photocopying during regular business hours by the
Trustees, officers, counsel and auditors of the Trust.
17. The Trust may terminate this Agreement with respect to the Trust or to
any Series upon 60 days' written notice to the Advisor at any time, without the
payment of any penalty, by vote of the Trustees or, as to each Series, by a
"vote of the majority of the outstanding voting securities" of such Series. The
Advisor may terminate this Agreement upon 60 days' written notice to the Trust,
without the payment of any penalty. This Agreement shall immediately terminate
in the event of its "assignment".
18. The terms "majority of the outstanding voting securities", "interested
persons" and "assignment", when used herein, shall have the respective meanings
in the Investment Company Act.
19. It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the
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Trust personally, but bind only the trust property of the Trust, as provided in
the Declaration of Trust. The execution and delivery of this Agreement have been
authorized by the Trustees and shareholders of the Trust and signed by the
President of the Trust, acting as such, and neither such authorization by such
Trustees and shareholders nor such execution and delivery by such officer shall
be deemed to have been made by any of them individually or be binding upon or
impose any liability on any of them personally, but shall bind only the trust
property of the Trust as provided in its Declaration of Trust.
20. This Agreement shall be construed and the rights and obligations of the
parties hereunder enforced in accordance with the laws of the State of
Connecticut.
21. Subject to the duty of the Advisor 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 Series and any Additional Series that may be
named, and the actions of the Advisor and the Trust in respect thereof.
22. The Advisor will not advise or act on behalf of the Series in regards to
class action filings, with respect to any securities held in the Series
portfolio.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first written
above.
THE PHOENIX EDGE SERIES FUND
By:/s/ Kathleen A. McGah
--------------------------------
Name: Kathleen A. McGah
Title: Vice President and Secretary
PHOENIX VARIABLE ADVISORS, INC.
By:/s/ John H. Beers
--------------------------------
Name: John H. Beers
Title: Vice President and Secretary
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SCHEDULE A
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SERIES ANNUAL INVESTMENT ADVISORY FEE
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Phoenix Mid-Cap Value Series 1.05% on the first $100 million
1.00% on the next $50 million
0.95% over $150 million
Phoenix Small-Cap Value Series 1.05% on the first $100 million
1.00% on the next $50 million
0.95% over $150 million
8