SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12
THE PHOENIX EDGE SERIES FUND
(Name of Registrant as Specified in its Charter)
THOMAS N. STEENBURG
c/o Phoenix Investment Partners, Ltd.
56 Prospect Street
Hartford, Connecticut 06115-0480
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: (Set forth the
amount on which the filing fee is calculated and state how
it was determined.)
4) Proposed maximum aggregate value of transaction:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration No.:
3) Filing Party:
4) Date Filed:
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THE PHOENIX EDGE SERIES FUND
101 MUNSON STREET
GREENFIELD, MASSACHUSETTS 01301
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
10:00 A.M., MONDAY,
AUGUST 24, 1998
To the Shareholders:
A Special Meeting of Shareholders of The Phoenix Edge Series Fund (the
"Fund") will be held in the offices of the Fund, 101 Munson Street, Greenfield,
Massachusetts 01301, on Monday, August 24, 1998, at 10:00 a.m. for the
following purposes:
TO BE VOTED UPON ONLY BY SHAREHOLDERS OF ABERDEEN NEW ASIA SERIES
(1) To approve or not approve an investment advisory agreement with
Phoenix-Aberdeen International Advisors, LLC (see Exhibit A);
(2) To approve or not approve a subadvisory agreement with Aberdeen
Fund Managers, Inc. (see Exhibit B);
(3) To approve or not approve a subadvisory agreement with Phoenix
Investment Counsel, Inc. (see Exhibit C);
(4) To consider and act upon such other matters as may properly come
before the meeting or any adjournment thereof.
These proposals are discussed in detail in the attached Proxy Statement.
The Board of Trustees has fixed June 26, 1998 as the record date for the
determination of shareholders entitled to notice of and to vote at the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE PROVIDE
YOUR INSTRUCTIONS BY COMPLETING, DATING AND SIGNING THE ENCLOSED PROXY AND
RETURNING IT PROMPTLY TO PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY IN THE
POSTPAID RETURN ENVELOPE ENCLOSED FOR YOUR USE. THE ENCLOSED PROXY IS BEING
SOLICITED BY THE BOARD OF TRUSTEES OF THE FUND.
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PLEASE RESPOND - YOUR VOTE IS IMPORTANT. IT IS IMPORTANT THAT YOU RETURN
YOUR PROXY AS SOON AS POSSIBLE TO ASSURE THAT YOUR PROXY WILL BE VOTED.
By Order of the Board of Trustees,
G. JEFFREY BOHNE, Secretary
Greenfield, Massachusetts
July 27, 1998
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THE PHOENIX EDGE SERIES FUND
101 MUNSON STREET
GREENFIELD, MASSACHUSETTS 01301
PROXY STATEMENT
A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 24, 1998
The enclosed proxy is solicited by the Board of Trustees of The Phoenix
Edge Series Fund (the "Fund") for use at the Special Meeting of Shareholders to
be held on Monday, August 24, 1998, and at any adjournment thereof. Shareholders
of record at the close of business on June 26, 1998, of Aberdeen New Asia Series
(the "Aberdeen Series" or "Series") are entitled to notice of and to vote at the
Special Meeting and any adjournment thereof. On that date there were issued and
outstanding 1,542,936.2894 shares, par value of $1 per share, each of which is
entitled to vote, with proportionate voting for fractional shares. The record
owners of the shares of the Aberdeen Series are the Phoenix Home Life Variable
Universal Life Account (the "VUL Account"), which funds Variable Life Insurance
Policies ("Policies"), and the Phoenix Home Life Variable Accumulation Account
and the PHL Variable Accumulation Account (collectively, the "VA Accounts"),
which fund Variable Annuity Contracts ("Contracts").
The Policies and Contracts are offered by Phoenix Home Life Mutual
Insurance Company ("Phoenix Home Life") or its subsidiary, PHL Variable
Insurance Company ("PHL Variable"). In accordance with its view of applicable
law, Phoenix Home Life will vote the shares of the Aberdeen Series based on
instructions received from owners of the Policies ("Policyowners") and owners of
the Contracts ("Contractowners"). When sufficient instructions representing the
majority votes required in favor of the items set forth in the attached Notice
of the meeting ("Sufficient Instructions") have been received, Phoenix Home Life
will vote shares for which it has not received instructions in the same
proportion as it votes shares for which it has received instructions. In
connection with the solicitation of such instructions from Policyowners and
Contractowners, Phoenix Home Life will furnish a copy of this Proxy Statement to
Policyowners and Contractowners. Each Contractowner or Policyowner (collectively
referred to herein as "shareholders") of record at the close of business on June
26, 1998 is entitled to notice of the meeting and to instruct Phoenix Home Life
with respect to how to vote at the meeting or any adjourned session. No
Policyowner or Contractowner, to the knowledge of the Fund, owns Policies
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or Contracts which are funded by more than five percent of the outstanding
voting shares of the Fund or of any Series. Each Policyowner and Contractowner
will be entitled to instruct Phoenix Home Life with respect to one vote for each
$100 of cash value of the Aberdeen Series (and fractional votes corresponding to
any fractional values) under a Policy or Contract registered in his or her name
on VUL Account or VA Account books on the record date.
Only shares of the Aberdeen Series will be voted on the Proposals. All
shares represented by duly executed proxies will be voted in accordance with the
instructions marked thereon. If a duly executed proxy does not specify a choice
between approval or disapproval of, or abstention with respect to, any proposal,
the shares represented by the proxy will be voted in favor of the proposal. Any
shareholder executing a proxy has the power to revoke it at any time before it
is exercised by executing and submitting to the Fund a later-dated proxy or
written notice of revocation or by attending the meeting and voting in person.
In addition to the solicitation of proxies by mail, officers and regular
employees of Phoenix Home Life or one of its affiliated companies may solicit
proxies personally or by telephone or telegram. Banks, brokers, fiduciaries and
nominees will, upon request, be reimbursed by Phoenix Home Life for their
reasonable expenses in sending proxy materials. The cost of solicitation of
proxies will be borne by Aberdeen Fund Managers, Inc. and its affiliates.
In the event that Sufficient Instructions are not received by the time
scheduled for the meeting, the persons named as proxies may propose one or more
adjournments of the meeting for a period or periods of not more than sixty days
in the aggregate to permit further solicitation of proxies with respect to any
such matters. Any such adjournment will require the affirmative vote of a
majority of the shares present in person or by proxy at the session of the
meeting to be adjourned. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of such
matters. They will vote against such adjournment those proxies required to be
voted against any such matters.
This Proxy Statement and the enclosed form of proxy are first being
mailed to shareholders on or about July 27, 1998.
A COPY OF THE FUND'S MOST RECENT ANNUAL REPORT WILL BE FURNISHED, WITHOUT
CHARGE, TO ANY SHAREHOLDER UPON REQUEST TO HEIDY PAGAN, PHOENIX VARIABLE
PRODUCTS MAIL OPERATIONS, PO BOX 8027, BOSTON, MA 02266-8027.
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SHAREHOLDERS MAY ALSO CALL HEIDY PAGAN TOLL-FREE AT (800) 541-0171.
SHARES OWNED BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
On May 31, 1998, there were 1,544,590.5641 issued and outstanding shares
of beneficial interest of the Aberdeen Series and as of such date Phoenix Home
Life or PHL Variable, One American Row, Hartford, Connecticut, held of record
and beneficially owned under a Contract or Policy 308,772.3786 shares of
beneficial interest of the Aberdeen Series, or 19.99% of the voting
securities of the Aberdeen Series then outstanding.
On May 31, 1998, no shares of beneficial interest of the Aberdeen Series
were held of record or beneficially owned under a Contract or Policy by the
Trustees and/or executive officers of the Fund.
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PROPOSALS
PROPOSALS 1, 2 AND 3:
TO APPROVE OR NOT APPROVE
INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS
TO BE VOTED UPON ONLY BY SHAREHOLDERS OF ABERDEEN NEW ASIA SERIES
The Trustees are requesting that shareholders approve the Investment
Advisory Agreement with Phoenix Aberdeen International Advisors, LLC ("PAIA" or
"Adviser") (PROPOSAL 1), the Subadvisory Agreement among the Fund, PAIA and
Phoenix Investment Counsel, Inc. ("PIC") (PROPOSAL 2), and the Subadvisory
Agreement among the Fund, PAIA and Aberdeen Fund Managers, Inc. ("AFM")
(PROPOSAL 3). The Investment Advisory and Subadvisory Agreements are sometimes
collectively referred to in this Proxy Statement as "Advisory Agreements."
As required by the Investment Company Act of 1940 (the "Act"), each of
the Advisory Agreements calls for its termination in the event of its
assignment. "Assignment" under the Act includes a change of control of the
adviser, and "change of control" presumptively occurs if there is a change in
the ownership of 25% or more of the voting securities of the adviser. As a
result of a transaction described below, an assignment of the Advisory
Agreements has occurred as a matter of law. Shareholders are not being asked to
approve any changes to the Advisory Agreements, but are being asked to reapprove
each of the Advisory Agreements in exactly their form prior to assignment.
DESCRIPTION OF THE INVESTMENT ADVISERS AND THE ADVISORY AGREEMENTS
The investment adviser to the Aberdeen Series is Phoenix-Aberdeen
International Advisors, LLC ("PAIA"), One American Row, Hartford, CT 06102-5056.
AFM and PIC serve as subadvisers to the Fund. PAIA is jointly owned by PM
Holdings, Inc. ("Holdings"), a wholly-owned subsidiary of Phoenix Home Life
Mutual Insurance Company ("Phoenix Home Life"), and AFM, a wholly-owned
subsidiary of Aberdeen Asset Management plc. PIC is an indirect, wholly-owned
subsidiary of Phoenix Investment Partners, Ltd. ("PXP"), formerly Phoenix Duff &
Phelps Corporation. Holdings is a majority shareholder of PXP. The principal
office of PIC is located at 56 Prospect Street, Hartford, Connecticut
06115-0480. The principal office of AFM is located at One Financial Plaza, Suite
2210, Nations Bank Tower, Fort Lauderdale, Florida 33394. The principal office
of Phoenix Home Life is located at One American Row, Hartford, Connecticut
06102-5056. The
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principal office of Aberdeen Asset Management plc is located at
10 Queen's Terrace, Aberdeen, Scotland AB10 1QG.
THE INVESTMENT ADVISORY AGREEMENT WITH PAIA. PAIA acts under an
Investment Advisory Agreement dated September 15, 1996. Under the Investment
Advisory Agreement, PAIA is entitled to a fee, payable monthly, based on an
annual percentage rate of 1.00% of the aggregate daily net asset values of the
Aberdeen Series. The amounts payable to PAIA are calculated upon the average of
the values of the net assets of the Aberdeen Series at the close of business
each day, computed in accordance with the method set forth in the Fund's
Declaration of Trust.
Under the Investment Advisory Agreement, PAIA has agreed to reimburse the
Fund for the amount, if any, by which the total operating and management
expenses of any series (including the investment adviser's compensation, but
excluding interest, taxes, brokerage fees and commissions, 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 imposed (and not
waived) on open-end investment companies by any state in which shares of such
series are then qualified for sale. Phoenix Home Life has agreed, in turn, to
reimburse PAIA for any such reimbursements to the Fund. Additionally, PAIA has
agreed to reimburse the Aberdeen Series operating expenses for the amount if any
by which the Series operating expenses other than investment advisory fees for
any fiscal year exceed .25% of the average net assets of the Series.
The Investment Advisory Agreement provides that the PAIA shall furnish
continuously an investment program for the Aberdeen Series and shall manage the
investment and reinvestment of the assets of such Series subject at all times to
the supervision of the Trustees. The Adviser, at its expense, also furnishes to
the Fund, personnel necessary to perform the functions required to manage the
investment and reinvestment of the Aberdeen Series' assets (including those
required for research, statistical and investment work). All costs and expenses
(other than those specifically referred to as being borne by the Adviser)
incurred in the operation of the Aberdeen Series are borne by the Fund or by
Phoenix Home Life. Such expenses include, but are not limited to, all expenses
incurred in the operation of the Fund and any offering of its shares, including,
among others, interest, taxes, brokerage fees and commissions, fees of Trustees
who are not full-time employees of PAIA or any of its affiliates, expenses of
Trustees' and shareholders' meetings, including the cost of printing and mailing
proxies, expenses of insurance premiums for fidelity and other coverage,
expenses of repurchase and redemption of shares, association membership dues,
charges
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of custodians, transfer agents, dividend disbursing agents and financial agents,
bookkeeping, auditing and legal expenses. The Fund or Phoenix Home Life will
also pay the fees and bear the expense of registering and maintaining the
registration of the Fund with the Securities and Exchange Commission and
registering or qualifying its shares under state or other securities laws and
the expense of preparing and mailing prospectuses and reports to existing
shareholders. Additionally, if authorized by the Trustees, the Fund will 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 Fund is a party.
For its services as investment adviser during the fiscal year ended
December 31, 1997, PAIA received fees of $129,766. For the same period, the
Fund was reimbursed on a cost basis for expenses of $97,597 by Phoenix Home
Life or PAIA.
THE SUBADVISORY AGREEMENTS. PAIA and the Fund have entered into a
Subadvisory Agreement with AFM under which AFM implements certain portfolio
transactions and provides research and other services to the Aberdeen Series.
PAIA pays a monthly subadvisory fee to AFM equivalent to .40% of the average
aggregate daily net asset value of the Series. PAIA and the Fund also have
entered into a Subadvisory Agreement with PIC under which PIC provides research
and certain other domestic advisory services to the Aberdeen Series. PAIA pays a
monthly subadvisory fee to PIC of .30% of the average aggregate daily net asset
value of the Series. AFM and PIC are sometimes referred to in this proxy
statement as the "Subadvisers."
The Advisory Agreements provide that PAIA, AFM and PIC shall not be
liable to the Fund or to any shareholder of the Fund for any error of judgment
or mistake of law or for any loss suffered by the Fund or by any shareholder of
the Fund in connection with the matters to which the Advisory Agreements relate,
except a loss resulting from willful misfeasance, bad faith, gross negligence or
reckless disregard on the part of the Adviser in the performance of its duties
thereunder.
Each Advisory Agreement continues in force from year to year for the
Aberdeen Series and any additional series that may become subject to its terms
and conditions, provided that, with respect to each such series, the Advisory
Agreement is approved initially by a vote of a majority of the outstanding
voting securities of such series and thereafter at least annually by the
Trustees or by vote of a majority of the outstanding voting securities of that
series. In addition, and in either event, the terms of the Advisory
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Agreement and any renewal thereof must be approved by the vote of a majority of
Trustees who are not parties to the Advisory Agreement or "interested persons"
(as that term is defined in the Act) (the "Disinterested Trustees") of any such
party cast in person at a meeting called for the purpose of voting on such
approval. The Advisory Agreements each will terminate automatically upon its
assignment (within the meaning of the Act) and may be terminated at any time,
without payment of any penalty, either by the Trustees, or, as to each series,
by a vote of a majority of the outstanding voting securities of such series or
by the Adviser upon sixty (60) days written notice to the Fund.
The Advisory Agreements have been approved by the Trustees, including a
majority of the Disinterested Trustees. The sole initial shareholder of the
Aberdeen Series approved the Advisory Agreements on September 17, 1996.
PAIA, PIC and AFM are presently providing investment advisory services
without a written agreement since the Investment Company Act of 1940 allows
continuance of written agreements under certain conditions following a change of
control only for 120 days. Notwithstanding the absence of such written
agreements, investment advisory and subadvisory services are being provided
generally according to the terms of the Advisory Agreements as described above.
For subadvisory services to the Aberdeen Series during the fiscal year
ended December 31, 1997, the Adviser paid $51,906 to AFM and $38,903 to PIC.
DESCRIPTION OF CHANGE OF CONTROL
PAIA is a limited liability company jointly owned and managed by PM
Holdings, a wholly-owned subsidiary of Phoenix Home Life, and AFM, a
wholly-owned subsidiary of Aberdeen Asset Management plc ("Aberdeen"). Aberdeen
is a publicly-owned company organized and operating in the United Kingdom and is
the parent company of a fund management group which manages assets for a range
of institutions, investment trusts, unit trusts, offshore funds and private
clients. At the time of original approval of the Advisory Agreements, Phoenix
Home Life owned approximately 32% of the outstanding shares of Aberdeen.
On September 8, 1997, Aberdeen acquired Prolific Financial Management
plc, the investment management subsidiary of The Scottish Provident Institution,
an Edinburgh-based life assurer. The combination of the two businesses
significantly increased Aberdeen's assets under
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management and provided management opportunities for a more diverse range of
investment products. In exchange for the shares of Prolific, Aberdeen issued to
Scottish Provident 58,414,994 new ordinary shares of Aberdeen. As a result,
Scottish Provident increased its ownership from approximately 1.7% to 41% of
Aberdeen's outstanding shares; Phoenix Home Life now owns approximately 11%.
These changes in ownership of Aberdeen's outstanding shares constitute a change
of control under the Act.
Although this change of control did not affect PIC, it has been
determined that the change of control of PAIA and AFM necessitates the
reapproval of each of the Advisory Agreements.
TRUSTEES' EVALUATION OF THE ADVISORY AGREEMENTS, CHANGE OF CONTROL ISSUE AND
RECOMMENDATIONS
At a meeting of the Fund's Executive Committee held on November 18,
1997, a representative of Aberdeen made a presentation to the Committee
concerning the share transactions between Aberdeen and Scottish Provident. Based
upon this presentation and a review of materials provided to the Committee
describing the particulars of the transactions, as well as assurances from an
Aberdeen representative that the transactions would not amend any of the
Advisory Agreements in any way nor would they have an effect on day-to-day
operations of PAIA and AFM (nor PIC, since it is unaffected by the change of
control of Aberdeen), the Executive Committee voted to recommend that the Fund's
Board of Trustees approve the change of control of Aberdeen and AFM and that
such Board recommend approval to Shareholders of the Series. At its meeting held
on November 19, 1997, the Board of Trustees considered the recommendation of the
Executive Committee. The Trustees, including a majority of Disinterested
Trustees, voted to approve each of the Advisory Agreements and to submit each of
the Advisory Agreements for shareholder approval with their recommendation that
the Advisory Agreements be approved.
In originally approving each Advisory Agreement, and in considering
renewal upon and after the change of control, the Trustees, including the
Disinterested Trustees, requested and evaluated information provided by the
Adviser which, in their opinion, constituted all the information reasonably
necessary for the Trustees to form a judgment as to whether each Advisory
Agreement would be in the best interests of the Aberdeen Series and its
Shareholders. The Trustees took into account all factors they deemed relevant,
including, but not limited to: (i) the advisory fees and other expenses that
would be paid under the Advisory Agreements as compared to those of similar
mutual funds managed by other investment advisers; (ii) the
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nature, quality and extent of the portfolio management and non-advisory services
to be furnished by the Adviser and Subadvisers; (iii) the nature of the
Adviser's and Subadvisers' research capability and the related benefits to the
Aberdeen Series; (iv) the relationship of the advisory fee structure under the
Advisory Agreements to the fee structures of comparable mutual funds; and (v)
the cost and complexity of providing portfolio management services. With respect
to the services to be provided on behalf of the Aberdeen Series, the Trustees
determined that the compensation to be paid to the Adviser and Subadvisers under
the Advisory Agreements was fair and reasonable, and the Advisory Agreements
would allow the Adviser and Subadvisers to receive fees for their respective
services that were competitive with fees paid by other mutual funds to other
investment advisers.
MANAGEMENT OF THE INVESTMENT ADVISER AND SUBADVISERS
The directors of PAIA are Radhika Ajmera, Kathleen Bloomquist,
Nathaniel Brinn, Christopher Fishwick, Martin J. Gavin, Martin J. Gilbert,
Michael E. Haylon, Beverley Hendry, David R. Pepin, Simon Y. Tan, Thomas Van Oss
and Hugh Young. Messrs. Gilbert and Pepin are Managing Directors of PAIA. The
address of Mr. Haylon is 56 Prospect Street, Hartford, Connecticut 06115-0480.
Mr. Haylon's principal occupation is that of an executive officer of Phoenix
Investment Partners, Ltd. The address of Ms. Bloomquist and Messrs. Brinn,
Gavin, Pepin and Tan is One American Row, Hartford, Connecticut 06102-5056. The
principal occupation of each of these individuals is that of an officer of
Phoenix Home Life. The address of Messrs. Ajmera, Fishwick and Van Oss is 10
Queen's Terrace, Aberdeen, Scotland. The principal occupation of each of these
individuals is that of an officer of Aberdeen Asset Managers, Ltd. The address
of Mr. Gilbert is 10 Queen's Terrace, Aberdeen, Scotland. The address of Mr.
Hendry is One Financial Plaza, Nations Bank Tower, Fort Lauderdale, Florida
33394. The principal occupation of each of these individuals is that of
executive officer of Aberdeen Asset Management plc. The address of Mr. Young is
88A Circular Road, Singapore 049439. Mr. Young's principal occupation is that of
an investment officer of Aberdeen Asset Management Asia Limited.
Mr. Haylon, Executive Vice President of the Fund, is a director of
PAIA. Mr. Young, Senior Vice President of the Fund, is a director of PAIA.
The directors of AFM are Richard D. Fabricius, Martin Gilbert, Beverley
Hendry, Gawaine Lewis and James L. Pope. The address of each, as it relates to
his duties at AFM, is the same as that of AFM. The principal occupations of
Messrs. Gilbert, Hendry and Lewis are described above. Mr. Fabricius' principal
occupation is that of director of sales and marketing of Aberdeen
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Fund Managers, Inc. Mr. Pope's principal occupation is that of Managing Director
of Philadelphia International Investment Corporation. Mr. Lewis, an officer of
the Fund, is a director of AFM.
The directors of PIC are Michael E. Haylon, Philip R. McLoughlin and
William R. Moyer. The address of each, as it relates to his duties at PIC, is
the same as that of PIC. The principal occupation of each director is that of an
executive officer of PXP. Messrs. Haylon and McLoughlin are directors of PXP.
Mr. McLoughlin also serves as a director of Phoenix Home Life. Mr. Haylon,
Executive Vice President of the Fund, is President and a director of PIC. Philip
R. McLoughlin, a Trustee and President of the Fund, is a director and Chairman
of PIC. William R. Moyer, Vice President of the Fund, is a director and Senior
Vice President, Chief Financial Officer and Treasurer of PIC. John D. Kattar,
William E. Keen, III, Leonard J. Saltiel and Julie L. Sapia, officers of the
Fund, are also officers of PIC.
PORTFOLIO TRANSACTIONS AND BROKERAGE
In effecting portfolio transactions, the Adviser adheres to the Fund's
policy of seeking best execution and price, determined as described below,
except to the extent it is permitted to pay higher brokerage commissions for
"brokerage and research services" as defined below. The Adviser may cause the
Fund to pay a broker or dealer an amount of commission for effecting securities
transactions in excess of the amount of commission which another broker or
dealer would have charged for effecting that transaction if the Adviser
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer or that any offset of direct expenses yields the best net
price. As provided in Section 28(e) of the Securities Exchange Act of 1934,
"brokerage and research services" include advice as to the value of securities,
the advisability of investing in, purchasing or selling securities, the
availability of securities or purchasers or sellers of securities, furnishing
analyses and reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts; and
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement). Brokerage and research services provided by
brokers to the Fund or the Adviser are considered to be in addition to and not
in lieu of services required to be performed by the Adviser under its contract
with the Fund and may benefit both other series of the Fund and other clients of
the Adviser. Conversely, brokerage and research services provided by brokers to
other clients of the Adviser may benefit the Fund. Where transactions are made
in the over-the-counter market, the Adviser will
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cause the Fund to deal with the primary market makers, unless more favorable
prices are otherwise obtainable.
The Fund paid no commissions to any Affiliated Broker for portfolio
transactions during its most recent fiscal year.
ADDITIONAL INFORMATION ABOUT THE ADVISER AND OTHER SERVICE PROVIDERS
In addition to the Aberdeen Series, PAIA serves as investment adviser to
both series of Phoenix-Aberdeen Series Fund. The size of each series as of March
31, 1998 and the annual rate of compensation is set forth in the table below.
The compensation rate listed is applied to the aggregate daily net asset value
of the Aberdeen Series.
Name of Fund Size of Fund Rate of Compensation
------------ ------------ --------------------
(In Millions)
-------------
Global Small Cap Fund Series $35.5 0.85%
New Asia Fund Series $12.6 0.85%
Note: The Adviser has not waived, reduced or otherwise agreed to reduce
its compensation under any applicable investment management contract for the
Funds listed above.
Phoenix Equity Planning Corporation ("PEPCO"), an affiliate of the
Adviser, also serves as financial agent of the Fund, and as such, is responsible
for certain administrative functions and the bookkeeping and pricing functions
for the Fund. For its services as financial agent, PEPCO receives a fee based on
an annual rate of 0.06% of the average aggregate daily net assets of the Fund.
The Fund paid PEPCO $7,786 for its services as financial agent during the fiscal
year ended December 31, 1997. PEPCO's address is 100 Brightmeadow Boulevard,
P.O. Box 2200, Enfield, CT 06083-2200.
VOTING REQUIREMENTS
The Trustees recommend that the shareholders approve the Advisory
Agreements. Approval of the Advisory Agreements is to be determined by the vote
of a majority of the outstanding shares of the Aberdeen Series. A majority is
constituted by the lessor of: (a) 67% or more of the voting securities present
at such meeting, if the holders of more than 50% of the outstanding voting
securities of such Series are present or represented by proxy; or (b) more than
50% of the outstanding voting securities of such Series.
THE TRUSTEES RECOMMEND A VOTE "FOR"
THE APPROVAL OF THE ADVISORY AGREEMENTS
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PROPOSAL 4
MISCELLANEOUS
As of the date of this Proxy Statement, the Fund's management knows of no
other matters to be brought before this meeting. However, if other matters
properly come before this meeting, the persons named in the enclosed proxy will
vote in accordance with their judgment on such matters.
PROPOSALS FOR NEXT MEETING OF SHAREHOLDERS
The next meeting of Shareholders is scheduled to be held in late-1998.
Proposals by any Shareholder of the Fund which are intended to be presented at
the meeting must be received by the Fund for inclusion in its proxy statement
and form of proxy relating to such meeting on or before July 31, 1998.
By Order of the Board of Trustees,
G. JEFFREY BOHNE, Secretary
Greenfield, Massachusetts
July 27, 1998
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THE PHOENIX EDGE SERIES FUND PROXY
The undersigned shareholder of The Phoenix Edge Series Fund (the "Fund")
hereby constitutes and appoints Philip R. McLoughlin, Michael D. Marshall and
Thomas J. Miele, and any and each of them, proxies and attorneys of the
undersigned, with power of substitution to each, for and in the name of the
undersigned to vote and act upon all matters (unless and except as expressly
limited below) at the Special Meeting of Shareholders of the Fund to be held on
August 24, 1998 at the offices of the Fund, 101 Munson Street, Greenfield,
Massachusetts, and at any and all adjournments thereof, with respect to all
shares of the Fund for which the undersigned is entitled to provide instructions
or with respect to which the undersigned would be entitled to provide
instructions or act, with all the powers the undersigned would possess if
personally present and to vote with respect to specific matters as set forth
below. Any proxies heretofore given by the undersigned with respect to said
meeting are hereby revoked.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES WHO RECOMMEND
A VOTE "FOR" EACH OF THE PROPOSALS
[X] Please mark vote as in this Example.
PROPOSAL 1. TO APPROVE OR NOT APPROVE INVESTMENT ADVISORY AGREEMENT
WITH PHOENIX-ABERDEEN INTERNATIONAL ADVISORS, LLC
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL 2. TO APPROVE OR NOT APPROVE INVESTMENT SUB-ADVISORY AGREEMENT
WITH ABERDEEN FUND MANAGERS, INC.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL 3. TO APPROVE OR NOT APPROVE INVESTMENT SUB-ADVISORY AGREEMENT
WITH PHOENIX INVESTMENT COUNSEL, INC.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL 4. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF
SPECIFY DESIRED ACTION BY CHECK MARK IN THE APPROPRIATE SPACE. IN THE ABSENCE OF
SUCH SPECIFICATION, THE PERSONS NAMED PROXIES HAVE DISCRETIONARY AUTHORITY,
WHICH THEY INTEND TO EXERCISE BY VOTING SHARES REPRESENTED BY THIS PROXY IN
FAVOR OF THE PROPOSALS. PLEASE RETURN THIS PROXY CARD PROMPTLY BY USING THE
ENCLOSED ENVELOPE.
Dated: __________________________, 19___
________________________________________
________________________________________
Signature of Shareholder(s)
<PAGE>
The signature on this Proxy should correspond exactly with the
shareholder's name as it appears hereon. In the case of joint
tenancies, co-executors or co-trustees, all should sign.
Persons signing as attorney, executor, administrator, trustee
or guardian should give their full title.
<PAGE>
EXHIBIT A
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT made effective as of the 15th day of September, 1996, by and
between The Phoenix Edge Series Fund, a Massachusetts business trust having a
place of business located at 101 Munson Street, Greenfield, Massachusetts (the
"Trust") and Phoenix-Aberdeen International Advisors, LLC, a Delaware limited
liability company having a place of business located at 56 Prospect Street,
Hartford, Connecticut (the "Adviser").
WITNESSETH THAT:
1. The Trust hereby appoints the Adviser to act as investment adviser to
the Trust on behalf of Aberdeen New Asia Series (the "Series"), for the period
and on the terms set forth herein. The Adviser 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 Adviser to render
investment advisory services hereunder with respect to one or more additional
series ("Additional Series"), the Trust shall notify the Adviser in writing. If
the Adviser is willing to render such services, it shall notify the Trust in
writing, whereupon such Additional Series shall become subject to the terms and
conditions of this Agreement.
3. The Adviser shall furnish continuously an investment program for the
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. With respect to managing the investment and reinvestment of the Series'
assets, the Adviser shall provide, at its own expense:
(a) Investment research, advice and supervision;
(b) An investment program for each Series consistent with its
investment objectives;
(c) Implementation of the investment program for each Series including
the purchase and sale of securities;
(d) Advice and assistance on the general operations of the Trust; and
(e) Regular reports to the Trustees on the implementation of each
Series' investment program.
<PAGE>
5. The Adviser shall, for all purposes herein, be deemed to be an
independent contractor.
6. The Adviser 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) Personnel to serve without salaries from the Trust as officers or
agents of the Trust. The Adviser 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, auditors and legal counsel; and
(d) Compensation and expenses, if any, of the Trustees who are also
full-time employees of the Adviser or any of its affiliates.
(e) Any Subadviser recommended by the Adviser and appointed to act on
behalf of the Trust.
7. All costs and expenses not specifically enumerated herein as payable by
the Adviser 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 Adviser) 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 full-time employees
of the Adviser or any of its affiliates, expenses of Trustees' and shareholders'
meetings including the cost of printing and mailing proxies, expenses of
insurance premiums for fidelity and other coverage, expenses of repurchase and
redemption of shares, 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 Securities
and Exchange Commission and registering or qualifying its shares under state or
other securities laws and the expense of
<PAGE>
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.
8. For providing the services and assuming the expenses outlined herein,
the Trust agrees that the Adviser shall be compensated as follows:
(a) The Trust shall pay the Adviser a monthly fee with respect to the
Series at the annual rate of 1.00% of the average aggregate daily
net asset values of the Series. The amounts payable to the Adviser
with respect to the Series shall be based upon the average of the
values of the net assets of such Series 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.
(c) If there is termination of this Agreement during a month, each
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 Adviser agrees to reimburse the Trust for the amount, if any,
by which the total operating and management expenses for any Series
(including the Adviser'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 Adviser 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.
9. The services of the Adviser to the Trust are not to be deemed exclusive,
the Adviser being free to render services to others and to engage in other
activities. Without relieving the Adviser of its duties hereunder and subject to
the prior approval of the Trustees and subject further to compliance
<PAGE>
with applicable provisions of the Investment Company Act of 1940, as amended,
the Adviser 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 Adviser
and any such agent.
10. The Adviser 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 Adviser in the performance of its duties hereunder.
11. It is understood that:
(a) Trustees, officers, employees, agents and shareholders of the
Trust are or may be "interested persons" of the Adviser as
directors, officers, stockholders or otherwise;
(b) Directors, officers, employees, agents and stockholders of the
Adviser 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.
12. This Agreement shall become effective with respect to the Series as of
the date stated above (the Contract Date") and with respect to any Additional
Series, on the date specified in the notice to the Trust from the Adviser in
accordance with paragraph 2 hereof that the Adviser is willing to serve as
Adviser with respect to such Additional Series. Unless terminated as herein
provided, this Agreement shall remain in full force and effect for a period of
two years following the Contract Date, and, with respect to each Additional
Series, until the next anniversary of the Contract Date following the date on
which such Additional Series became subject to the terms and conditions of this
Agreement 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
<PAGE>
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 the 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.
13. The Adviser 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 control all records
that pertain to the services provided under this Agreement and such records
shall be open to inspection, audit and photocopying during regular business
hours by the Trustees, Officers, Counsel and Auditors of the Trust.
14. The Trust may terminate this Agreement with respect to the Trust or to
any Series upon 60 days written notice to the Adviser 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
Adviser 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 this "assignment."
15. The terms "majority of the outstanding voting securities," "interested
persons" and "assignment," when used herein, shall have the respective meanings
as in the Investment Company Act of 1940, as amended.
16. In the event of termination of this Agreement, or at the request of the
Adviser, the Trust will eliminate all reference to "Phoenix" and/or
"Phoenix-Aberdeen" from its name, and will not thereafter transact business in a
name using the word "Phoenix" and/or "Phoenix-Aberdeen" as part of its name. The
Trust will thereafter in all prospectuses, advertising materials, letterheads,
and other material designed to be read by investors and prospective investors
delete from its name the word "Phoenix" and/or
<PAGE>
"Phoenix-Aberdeen" or any approximation thereof. If the Adviser chooses to
withdraw the Trust's right to use the word "Phoenix" and/or "Phoenix-Aberdeen,"
it agrees to submit the question of continuing this Agreement to a vote of the
Trust's shareholders at the time of such withdrawal.
17. 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 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. The Declaration of Trust, as amended, is or shall be on file with the
Secretary of The Commonwealth of Massachusetts.
18. This Agreement shall be construed and the rights and obligations of the
parties hereunder enforced in accordance with the laws of The Commonwealth of
Massachusetts.
<PAGE>
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/ Philip R. McLoughlin
-----------------------------------------
Philip R. McLoughlin
President
PHOENIX ABERDEEN INTERNATIONAL
ADVISORS, LLC
By: /s/ David R. Pepin
-----------------------------------------
David R. Pepin
Managing Director
By: /s/ Martin J. Gilbert
-----------------------------------------
Martin J. Gilbert
Managing Director
<PAGE>
EXHIBIT B
THE PHOENIX EDGE SERIES FUND
SUBADVISORY AGREEMENT
---------------------
September 15, 1996
Aberdeen Fund Managers, Inc.
1 Financial Plaza, Suite 2210
NationsBank Tower
Fort Lauderdale, Florida 33394
RE: SUBADVISORY AGREEMENT
Gentlemen:
The Phoenix Edge Series Fund (the "Fund") is a diversified open-end investment
company of the series type registered under the Investment Company Act of 1940
(the "Act"), and is subject to the rules and regulations promulgated thereunder.
The shares of the Fund are offered or may be offered in several series,
including the Aberdeen New Asia Series (the "Series").
Phoenix-Aberdeen International Advisors, LLC (the "Adviser") evaluates and
recommends series advisers for the Series and is responsible for the day-to-day
management of the Series.
1. Employment as a Subadviser. The Adviser, being duly authorized, hereby
employs Aberdeen Fund Managers, Inc. (the "Subadviser") as a
discretionary series adviser to invest and reinvest the assets of the
Series, on the terms and conditions set forth herein. The services of
the Subadviser hereunder are not to be deemed exclusive; the Subadviser
may render services to others and engage in other activities which do
not conflict in any material manner in the Subadviser's performance
hereunder.
2. Acceptance of Employment; Standard of Performance. The Subadviser
accepts its employment as a discretionary series adviser of the Series
and agrees to use its best professional judgment to make investment
decisions for the Series in accordance with the provisions of this
Agreement and as set forth in Schedule D attached hereto and made a
part hereof.
3. Services of Subadviser. In providing management services to the Series,
the Subadviser shall be subject to the investment objectives, policies
<PAGE>
2
and restrictions of the Fund as they apply to the Series and as set
forth in the Fund's then current Prospectus and Statement of Additional
Information (as the same may be modified from time to time and provided
to the Subadviser by Adviser), and to the investment restrictions set
forth in the Act and the Rules thereunder, to the supervision and
control of the Trustees of the Fund (the "Trustees"), and to
instructions from the Adviser. The Subadviser shall not, without the
Fund's prior approval, effect any transactions which would cause the
Series at the time of the transaction to be out of compliance with any
of such restrictions or policies.
4. Transaction Procedures. All series transactions for the 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 in writing, of all cash
and/or securities due to or from the Series. The Subadviser shall not
have possession or custody of such cash and/or securities or any
responsibility or liability with respect to such custody. The
Subadviser shall advise the Custodian and confirm in writing to the
Fund all investment orders for the Series placed by it with brokers and
dealers at the time and in the manner set forth in 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 Subadviser. The Fund
shall be responsible for all custodial arrangements and the payment of
all custodial charges and fees, and, upon giving proper instructions to
the Custodian, the Subadviser shall have no responsibility or liability
with respect to custodial arrangements or the act, omissions or other
conduct of the Custodian.
5. Allocation of Brokerage. The Subadviser shall have authority and
discretion to select brokers and dealers to execute Series transactions
initiated by the Subadviser, and to select the markets on or in which
the transactions will be executed.
A. In placing orders for the sale and purchase of Series securities for
the Fund, the Subadviser's primary responsibility shall be to seek the
best execution of orders at the most favorable prices. However, this
responsibility shall not obligate the Subadviser to solicit competitive
bids for each transaction or to seek the lowest available commission
cost to the Fund, so long as the Subadviser reasonably believes that
the broker or dealer selected by it can be expected to obtain a "best
<PAGE>
3
execution" market price on the particular transaction and determines in
good faith that the commission cost is reasonable in relation to the
value of the brokerage and research services (as defined in Section
28(e)(3) of the Securities Exchange Act of 1934) provided by such
broker or dealer to the Subadviser, viewed in terms of either that
particular transaction or of the Subadviser's overall responsibilities
with respect to its clients, including the Fund, as to which the
Subadviser exercises investment discretion, notwithstanding that the
Fund may not be the direct or exclusive beneficiary of any such
services or that another broker may be willing to charge the Fund a
lower commission on the particular transaction.
B. Subject to the requirements of paragraph A above, the Adviser shall
have the right to require that transactions giving rise to brokerage
commissions, in an amount to be agreed upon by the Adviser and the
Subadviser, shall be executed by brokers and dealers that provide
brokerage or research services to the Fund or that will be of value to
the Fund in the management of its assets, which services and
relationship may, but need not, be of direct benefit to the Series. In
addition, subject to paragraph A above and the applicable Rules of Fair
Practice of the National Association of Securities Dealers, Inc., the
Fund shall have the right to request that series transactions be
executed by brokers and dealers by or through whom sales of shares of
the Fund are made.
C. The Subadviser shall not execute any Series transactions for the
Series with a broker or dealer that is an "affiliated person" (as
defined in the Act) of the Fund, the Subadviser or the Adviser without
the prior written approval of the Fund. The Fund will provide the
Subadviser with a list of brokers and dealers that are "affiliated
persons" of the Fund or Adviser.
6. Proxies. The Fund, or the Adviser as its authorized agent, will vote
all proxies solicited by or with respect to the issuers of securities
in which assets of the Series may be invested. At the request of the
Fund, the Subadviser shall provide the Fund with its recommendations as
to the voting of particular proxies.
7. Fees for Services. The compensation of the Subadviser for its services
under this Agreement shall be calculated and paid by the Adviser in
accordance with the attached Schedule C. Pursuant to the Investment
Advisory Agreement between the Fund and the Adviser, the Adviser is
solely responsible for the payment of fees to the Subadviser.
<PAGE>
4
8. Limitation of Liability. The Subadviser shall not be liable for any
action taken, omitted or suffered to be taken by it in its best
professional judgment, in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement, or in accordance with specific directions or
instructions from the Fund, provided, however, that such acts or
omissions shall not have constituted a breach of the investment
objectives, policies and restrictions applicable to the Series and that
such acts or omissions shall not have resulted from the Subadviser's
willful misfeasance, bad faith or gross negligence, a violation of the
standard of care established by and applicable to the Subadviser in its
actions under this Agreement or a breach of its duty or of its
obligations hereunder (provided, however, that the foregoing shall not
be construed to protect the Subadviser from liability under the Act).
9. Confidentiality. Subject to the duty of the Subadviser and the Fund to
comply with applicable law, including any demand of any regulatory or
taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Series and the actions
of the Subadviser and the Fund in respect thereof.
10. Assignment. This Agreement shall terminate automatically in the event
of its assignment, as that term is defined in Section 2(a)(4) of the
Act. The Subadviser shall notify the Fund in writing sufficiently in
advance of any proposed change of control, as defined in Section
2(a)(9) of the Act, as will enable the Fund to consider whether an
assignment as defined in Section 2(a)(4) of the Act will occur, and to
take the steps necessary to enter into a new contract with the
Subadviser.
11. Representations, Warranties and Agreements of the Subadviser. The
Subadviser represents, warrants and agrees that:
A. It is registered as an "Investment Adviser" under the
Investment Advisers Act of 1940 ("Advisers Act").
B. It will maintain, keep current and preserve on behalf of
the Fund, in the manner required or permitted by the Act and
the Rules thereunder, the records identified in Schedule B (as
Schedule B may be amended from time to time). The Subadviser
agrees that such records are the property of the Fund, and
will be surrendered to the Fund or to Adviser as agent of the
Fund promptly upon request of either.
C. It has or shall adopt a written code of ethics complying
with the requirements of Rule 17j-l under the Act and will
provide the Fund and
<PAGE>
5
Adviser with a copy of the code of ethics and evidence of its
adoption. Subadviser acknowledges receipt of the written code
of ethics adopted by and on behalf of The Phoenix Edge Series
Fund (the "Code of Ethics"). Within 10 days of the end of each
calendar quarter while this Agreement is in effect, a duly
authorized compliance officer of the Subadviser shall certify
to the Fund and to Adviser that the Subadviser has complied
with the requirements of Rule 17j-l during the previous
calendar quarter and that there has been no violation of its
code of ethics, or the Code of Ethics, or if such a violation
has occurred, that appropriate action was taken in response to
such violation. The Subadviser shall permit the Fund and
Adviser to examine the reports required to be made by the
Subadviser under Rule 17j-l(c)(1) and this subparagraph.
D. Upon request, the Subadviser will promptly supply the Fund
and Adviser, or such other person as Adviser shall direct,
with any information concerning the Subadviser and its
stockholders, employees and affiliates which the Fund may
reasonably require in connection with reports to the Fund's
Board of Trustees or the preparation of its registration
statement, proxy material, reports and other documents
required to be filed under the Act, the Securities Act of
1933, or under applicable securities laws.
E. Reference is hereby made to the Declaration of Trust dated
February 18, 1986, establishing the Fund, a copy of which has
been filed with the Secretary of the Commonwealth of
Massachusetts and elsewhere as required by law, and to any and
all amendments thereto so filed with the Secretary of the
Commonwealth of Massachusetts and elsewhere as required by
law, and to any and all amendments thereto so filed or
hereafter filed. 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
trust estate under said Declaration of Trust is liable.
Without limiting the generality of the foregoing, neither the
Subadviser nor any of its officers, directors, partners,
shareholders or employees shall, under any circumstances, have
recourse or cause or willingly permit recourse to be had
directly or indirectly to any personal, statutory, or other
liability of any shareholder, Trustee, officer, agent or
employee of the Fund or of any successor of the Fund, whether
such liability now exists or is hereafter incurred for claims
against the trust estate.
<PAGE>
6
12. Amendment. This Agreement may be amended at any time, but only by
written agreement among the Subadviser, the Adviser and the Fund, which
amendment, other than amendments to Schedules A, B, and D, is subject
to the approval of the Trustees and the Shareholders of the Fund as and
to the extent required by the Act.
13. Effective Date; Term. This Agreement shall become effective on the date
set forth on the first page of this Agreement, and shall continue in
effect until the first meeting of the shareholders of the Series, and,
if its renewal is approved at that meeting in the manner required by
the Act, shall continue in effect thereafter only so long as its
continuance has been specifically approved at least annually by the
Trustees in accordance with Section 15(a) of the Investment Company
Act, and by the majority vote of the disinterested Trustees in
accordance with the requirements of Section 15(c) thereof.
14. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other parties in the
event of a breach of any provision thereof by a party so notified, or
otherwise upon thirty (30) days' written notice to the other parties,
but any such termination shall not affect the status, obligations or
liabilities of any party hereto to the other parties.
15. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of
the Commonwealth of Massachusetts.
<PAGE>
7
16. Severability. If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the
remainder of this Agreement shall not be affected thereby, and each and
every term and condition of this Agreement shall be valid and enforced
to the fullest extent permitted by law.
THE PHOENIX EDGE SERIES FUND
By: /s/ Philip R. McLoughlin
---------------------------------
Philip R. McLoughlin
President
PHOENIX ABERDEEN
INTERNATIONAL ADVISORS, LLC
By: /s/ David R. Pepin
---------------------------------
David R. Pepin
Managing Director
By: /s/ Martin J. Gilbert
---------------------------------
Martin J. Gilbert
Managing Director
ACCEPTED:
ABERDEEN FUND MANAGERS, INC.
By: /s/ Bev Hendry
---------------------------------
Title: Chief Executive Officer
------------------------------
<PAGE>
8
SCHEDULES: A. Operational Procedures
B. Record Keeping Requirements
C. Fee Schedule
D. Subadviser Functions
<PAGE>
SCHEDULE A
----------
OPERATIONAL PROCEDURES
In order to minimize operational problems, it will be necessary for a flow of
information to be supplied to Brown Brothers Harriman & Co. (the "Custodian"),
the custodian for the Fund.
The Subadviser must furnish the Custodian with daily information as to executed
trades, or, if no trades are executed, with a report to that effect, no later
than 5 p.m. (Eastern Standard time) on the day of the trade (confirmation
received from broker). The necessary information can be sent via facsimile
machine to the Custodian. Information provided to the Custodian shall include
the following:
1. Purchase or sale;
2. Security name;
3. CUSIP number (if applicable);
4. Number of shares and sales price per share;
5. Executing broker;
6. Settlement agent;
7. Trade date;
8. Settlement date;
9. Aggregate commission or if a net trade;
10. Interest purchased or sold from interest bearing security;
11. Other fees;
12. Net proceeds of the transaction;
13. Exchange where trade was executed; and
14. Identified tax lot (if applicable).
When opening accounts with brokers for, and in the name of, the Fund, the
account must be a cash account. No margin accounts are to be maintained in the
name of the Fund. Delivery instructions are as specified by the Custodian. The
Custodian will supply the Subadviser daily with a cash availability report. This
will normally be done by telex so that the Subadviser will know the amount
available for investment purposes.
<PAGE>
SCHEDULE B
----------
RECORDS TO BE MAINTAINED BY THE SUBADVISER
1. (Rule 31a-1(b)(5)) A record of each brokerage order, and all other
series purchases and sales, given by the Subadviser on behalf of the
Fund for, or in connection with, the purchase or sale of securities,
whether executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any modifications or
cancellations thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of the Fund.
2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within
ten (10) days after the end of the quarter, showing specifically the
basis or bases upon which the allocation of orders for the purchase and
sale of series securities to named brokers or dealers was effected, and
the division of brokerage commissions or other compensation on such
purchase and sale orders. Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or
dealers to:
(a) The Fund,
(b) The Adviser (Phoenix-Aberdeen International
Advisors, LLC)
(c) The Subadviser, and
(d) Any person other than the foregoing.
(iii) Any other consideration other than the technical
qualifications of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made
available.
C. Shall describe in detail the application of any general or
specific formula or other determinant used in arriving at such
allocation of purchase and sale orders and such division of
brokerage commissions or other compensation.
<PAGE>
D. The name of the person responsible for making the
determination of such allocation and such division of
brokerage commissions or other compensation.
3. (Rule 31a-(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing the
purchase or sale of series securities. Where an authorization is made
by a committee or group, a record shall be kept of the names of its
members who participate in the authorization. There shall be retained
as part of this record: any memorandum, recommendation or instruction
supporting or authorizing the purchase or sale of series securities and
such other information as is appropriate to support the authorization.*
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
Subadviser's transactions for the Fund.
_______________
*Such information might include: current financial information, annual and
quarterly reports, press releases, reports by analysts and from brokerage firms
(including their recommendation; i.e., buy, sell, hold) or any internal reports
or subadviser review.
<PAGE>
SCHEDULE C
----------
SUBADVISORY FEE
For services provided to The Phoenix Edge Series Fund Aberdeen New Asia
Series (the "Series"), the Adviser will pay to the Subadviser, on or before the
10th day of each month, a fee, payable in arrears, at the annual rate of 0.40%
of the average daily net asset values of the Series. The fees shall be prorated
for any month during which this agreement is in effect for only a portion of the
month. In computing the fee to be paid to the Subadviser, the net asset value of
the Series shall be valued as set forth in the then current registration
statement of the Fund.
<PAGE>
SCHEDULE D
----------
SUBADVISER FUNCTIONS
With respect to managing the investment and reinvestment of the
Series' assets, the Subadviser shall provide, at its own expense:
(a) An investment program for the Series consistent with its
investment objectives based upon the development, review and
adjustment of buy/sell strategies approved from time to time
by the Board of Trustees and Adviser;
(b) Implementation of the investment program for the Series based
upon the foregoing criteria;
(c) Quarterly reports, in form and substance acceptable to the
Adviser, with respect to: i) compliance with the Code of
Ethics and the Subadviser's code of ethics; ii) compliance
with procedures adopted from time to time by the Trustees of
the Fund relative to securities eligible for resale under Rule
144A under the Securities Act of 1933, as amended; iii)
diversification of Series assets in accordance with the then
prevailing prospectus and statement of additional information
pertaining to the Series and governing laws; iv) compliance
with governing restrictions relating to the fair valuation of
securities for which market quotations are not readily
available or considered "illiquid" for the purposes of
complying with the Series' limitation on acquisition of
illiquid securities; v) any and all other reports reasonably
requested in accordance with or described in this Agreement;
and, vi) the implementation of the Series' investment
program, including, without limitation, analysis of Series
performance;
(d) Attendance by appropriate representatives of the Subadviser at
meetings requested by the Adviser or Trustees at such time(s)
and location(s) as reasonably requested by the Adviser or
Trustees; and
(e) Participation, overall assistance and support in marketing the
Series, including, without limitation, meetings with pension
fund representatives, broker/dealers who have a sales
agreement with Phoenix Equity Planning Corporation, and other
parties requested by the Adviser.
<PAGE>
EXHIBIT C
THE PHOENIX EDGE SERIES FUND
SUBADVISORY AGREEMENT
---------------------
September 15, 1996
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115
RE: SUBADVISORY AGREEMENT
Gentlemen:
The Phoenix Edge Series Fund (the "Fund") is a diversified open-end investment
company of the series type registered under the Investment Company Act of 1940
(the "Act"), and is subject to the rules and regulations promulgated thereunder.
The shares of the Fund are offered or may be offered in several series,
including the Aberdeen New Asia Series (the "Series").
Phoenix-Aberdeen International Advisors, LLC (the "Adviser") evaluates and
recommends series advisers for the Series and is responsible for the day-to-day
management of the Series.
1. Employment as a Subadviser. The Adviser, being duly authorized, hereby
employs Phoenix Investment Counsel, Inc. (the "Subadviser"):
(a) as a discretionary series adviser to manage, upon notification from the
Adviser from time to time, cash, cash equivalents and short-term
investments for the Series upon the terms and conditions hereafter set
forth.
(b) to furnish officers and other personnel necessary to conduct the
Series' operations, including specifically but without limitation,
compliance procedures;
(c) to prepare and file, when and as needed with respect to the Series, (i)
required filings with the Securities and Exchange Commission and state
securities administrators, including but not limited to posteffective
amendments to the registration statement of the Fund, annual and
semi-annual reports and all required notices, (ii) required filings with
appropriate authorities in the state of organization of the Fund, (iii)
proxy statements and other required reports to shareholders of the Fund,
and (iv) revisions and updates of the Fund's prospectus;
<PAGE>
2
(d) with respect to the Series, to provide office facilities (which may be
in the offices of the Subadviser or an affiliate but shall be in such
location as the Subadviser and Fund shall reasonably determine;
(e) with respect to the Series, to furnish clerical services, office
supplies and stationery;
(f) to monitor the Fund's expense accruals with respect to the Series, and
to pay all expenses upon proper authorization from the Fund;
(g) with respect to the Series, to monitor the Trust's status as a
regulated investment company under Subchapter M of the Internal Revenue
Code of 1986, as amended from time to time;
(h) with respect to the Series, to monitor and make recommendations
concerning fidelity bond coverage for the Fund;
(i) with respect to the Series, to carry out and monitor compliance with
the policies and limitations of the Fund as set forth in the Fund's
Prospectus, Statement of Additional Information, and Declaration of Trust;
(j) with respect to the Series, to supervise the external audit and tax
return preparation by the Fund's auditor; and
(k) with respect to the Series, to prepare and/or coordinate all material
for the Board of Trustees meetings.
In providing such services Subadviser shall be responsible for all
compensation and expenses of employees, agents and consultants employed or
retained for such purpose, but in no event shall Subadviser be responsible
for compensation or expenses of the Fund's transfer agent, distributor, or
financial agent.
The services of the Subadviser hereunder are not to be deemed exclusive;
the Subadviser may render services to others and engage in other activities
which do not conflict in any material manner in the Subadviser's
performance hereunder.
2. Acceptance of Employment; Standard of Performance. The Subadviser
accepts its employment as a discretionary series adviser of the Series
and agrees to use its best professional judgment to make investment
decisions for the Series in accordance with the provisions of this
Agreement and as set forth in Schedule D attached hereto and made a
part hereof.
<PAGE>
3
3. Services of Subadviser. In providing management services to the Series,
the Subadviser shall be subject to the investment objectives, policies
and restrictions of the Fund as they apply to the Series and as set
forth in the Fund's then current Prospectus and Statement of Additional
Information (as the same may be modified from time to time and provided
to the Subadviser by Adviser), and to the investment restrictions set
forth in the Act and the Rules thereunder, to the supervision and
control of the Trustees of the Fund (the "Trustees"), and to
instructions from the Adviser. The Subadviser shall not, without the
Fund's prior approval, effect any transactions which would cause the
Series at the time of the transaction to be out of compliance with any
of such restrictions or policies.
4. Transaction Procedures. All series transactions for the 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 in writing, of all cash
and/or securities due to or from the Series. The Subadviser shall not
have possession or custody of such cash and/or securities or any
responsibility or liability with respect to such custody. The
Subadviser shall advise the Custodian and confirm in writing to the
Fund all investment orders for the Series placed by it with brokers and
dealers at the time and in the manner set forth in 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 Subadviser. The Fund
shall be responsible for all custodial arrangements and the payment of
all custodial charges and fees, and, upon giving proper instructions to
the Custodian, the Subadviser shall have no responsibility or liability
with respect to custodial arrangements or the act, omissions or other
conduct of the Custodian.
5. Allocation of Brokerage. The Subadviser shall have authority and
discretion to select brokers and dealers to execute Series transactions
initiated by the Subadviser, and to select the markets on or in which
the transactions will be executed.
A. In placing orders for the sale and purchase of Series securities for
the Fund, the Subadviser's primary responsibility shall be to seek the
best execution of orders at the most favorable prices. However, this
responsibility shall not obligate the Subadviser to solicit competitive
bids for each transaction or to seek the lowest available commission
<PAGE>
4
cost to the Fund, so long as the Subadviser reasonably believes that the
broker or dealer selected by it can be expected to obtain a "best
execution" market price on the particular transaction and determines in
good faith that the commission cost is reasonable in relation to the value
of the brokerage and research services (as defined in Section 28(e)(3) of
the Securities Exchange Act of 1934) provided by such broker or dealer to
the Subadviser, viewed in terms of either that particular transaction or of
the Subadviser's overall responsibilities with respect to its clients,
including the Fund, as to which the Subadviser exercises investment
discretion, notwithstanding that the Fund may not be the direct or
exclusive beneficiary of any such services or that another broker may be
willing to charge the Fund a lower commission on the particular
transaction.
B. Subject to the requirements of paragraph A above, the Adviser shall
have the right to require that transactions giving rise to brokerage
commissions, in an amount to be agreed upon by the Adviser and the
Subadviser, shall be executed by brokers and dealers that provide
brokerage or research services to the Fund or that will be of value to
the Fund in the management of its assets, which services and
relationship may, but need not, be of direct benefit to the Series. In
addition, subject to paragraph A above and the applicable Rules of Fair
Practice of the National Association of Securities Dealers, Inc., the
Fund shall have the right to request that series transactions be
executed by brokers and dealers by or through whom sales of shares of
the Fund are made.
C. The Subadviser shall not execute any Series transactions for the
Series with a broker or dealer that is an "affiliated person" (as
defined in the Act) of the Fund, the Subadviser or the Adviser without
the prior written approval of the Fund. The Fund will provide the
Subadviser with a list of brokers and dealers that are "affiliated
persons" of the Fund or Adviser.
6. Proxies. The Fund, or the Adviser as its authorized agent, will vote
all proxies solicited by or with respect to the issuers of securities
in which assets of the Series may be invested. At the request of the
Fund, the Subadviser shall provide the Fund with its recommendations as
to the voting of particular proxies.
7. Fees for Services. The compensation of the Subadviser for its services
under this Agreement shall be calculated and paid by the Adviser in
accordance with the attached Schedule C. Pursuant to the Investment
<PAGE>
5
Advisory Agreement between the Fund and the Adviser, the Adviser is
solely responsible for the payment of fees to the Subadviser.
8. Limitation of Liability. The Subadviser shall not be liable for any
action taken, omitted or suffered to be taken by it in its best
professional judgment, in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement, or in accordance with specific directions or
instructions from the Fund, provided, however, that such acts or
omissions shall not have constituted a breach of the investment
objectives, policies and restrictions applicable to the Series and that
such acts or omissions shall not have resulted from the Subadviser's
willful misfeasance, bad faith or gross negligence, a violation of the
standard of care established by and applicable to the Subadviser in its
actions under this Agreement or a breach of its duty or of its
obligations hereunder (provided, however, that the foregoing shall not
be construed to protect the Subadviser from liability under the Act).
9. Confidentiality. Subject to the duty of the Subadviser and the Fund to
comply with applicable law, including any demand of any regulatory or
taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Series and the actions
of the Subadviser and the Fund in respect thereof.
10. Assignment. This Agreement shall terminate automatically in the event
of its assignment, as that term is defined in Section 2(a)(4) of the
Act. The Subadviser shall notify the Fund in writing sufficiently in
advance of any proposed change of control, as defined in Section
2(a)(9) of the Act, as will enable the Fund to consider whether an
assignment as defined in Section 2(a)(4) of the Act will occur, and to
take the steps necessary to enter into a new contract with the
Subadviser.
11. Representations, Warranties and Agreements of the Subadviser. The
Subadviser represents, warrants and agrees that:
A. It is registered as an "Investment Adviser" under the Investment
Advisers Act of 1940 ("Advisers Act").
B. It will maintain, keep current and preserve on behalf of the Fund, in
the manner required or permitted by the Act and the Rules thereunder, the
records identified in Schedule B (as Schedule B may be amended from time to
time). The Subadviser agrees that such records are the property of the
Fund, and will be surrendered to the Fund or to Adviser as agent of the
Fund promptly upon request of either.
<PAGE>
6
C. It has or shall adopt a written code of ethics complying with the
requirements of Rule 17j-l under the Act and will provide the Fund and
Adviser with a copy of the code of ethics and evidence of its adoption.
Subadviser acknowledges receipt of the written code of ethics adopted by
and on behalf of The Phoenix Edge Series Fund (the "Code of Ethics").
Within 10 days of the end of each calendar quarter while this Agreement is
in effect, a duly authorized compliance officer of the Subadviser shall
certify to the Fund and to Adviser that the Subadviser has complied with
the requirements of Rule 17j-l during the previous calendar quarter and
that there has been no violation of its code of ethics, or the Code of
Ethics, or if such a violation has occurred, that appropriate action was
taken in response to such violation. The Subadviser shall permit the Fund
and Adviser to examine the reports required to be made by the Subadviser
under Rule 17j-l(c)(1) and this subparagraph.
D. Reference is hereby made to the Declaration of Trust dated February 18,
1986, establishing the Fund, a copy of which has been filed with the
Secretary of the Commonwealth of Massachusetts and elsewhere as required by
law, and to any and all amendments thereto so filed with the Secretary of
the Commonwealth of Massachusetts and elsewhere as required by law, and to
any and all amendments thereto so filed or hereafter filed. 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 trust estate
under said Declaration of Trust is liable. Without limiting the generality
of the foregoing, neither the Subadviser nor any of its officers,
directors, partners, shareholders or employees shall, under any
circumstances, have recourse or cause or willingly permit recourse to be
had directly or indirectly to any personal, statutory, or other liability
of any shareholder, Trustee, officer, agent or employee of the Fund or of
any successor of the Fund, whether such liability now exists or is
hereafter incurred for claims against the trust estate.
12. Amendment. This Agreement may be amended at any time, but only by
written agreement among the Subadviser, the Adviser and the Fund, which
amendment, other than amendments to Schedules A, B, and D, is subject
to the approval of the Trustees and the Shareholders of the Fund as and
to the extent required by the Act.
<PAGE>
7
13. Effective Date; Term. This Agreement shall become effective on the date
set forth on the first page of this Agreement, and shall continue in
effect until the first meeting of the shareholders of the Series, and,
if its renewal is approved at that meeting in the manner required by
the Act, shall continue in effect thereafter only so long as its
continuance has been specifically approved at least annually by the
Trustees in accordance with Section 15(a) of the Investment Company
Act, and by the majority vote of the disinterested Trustees in
accordance with the requirements of Section 15(c) thereof.
14. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other parties in the
event of a breach of any provision thereof by a party so notified, or
otherwise upon thirty (30) days' written notice to the other parties,
but any such termination shall not affect the status, obligations or
liabilities of any party hereto to the other parties.
15. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of
the Commonwealth of Massachusetts.
<PAGE>
8
16. Severability. If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the
remainder of this Agreement shall not be affected thereby, and each and
every term and condition of this Agreement shall be valid and enforced
to the fullest extent permitted by law.
THE PHOENIX EDGE SERIES FUND
By: /s/ Philip R. McLoughlin
--------------------------------------
Philip R. McLoughlin
President
PHOENIX ABERDEEN
INTERNATIONAL ADVISORS, LLC
By: /s/ David R. Pepin
--------------------------------------
David R. Pepin
Managing Director
By: /s/ Martin J. Gilbert
--------------------------------------
Martin J. Gilbert
Managing Director
ACCEPTED:
ABERDEEN FUND MANAGERS, INC.
By: /s/ Michael E. Haylon
----------------------------------
Michael E. Haylon
President
SCHEDULES: A. Operational Procedures
B. Record Keeping Requirements
C. Fee Schedule
D. Subadviser Functions
<PAGE>
SCHEDULE A
----------
OPERATIONAL PROCEDURES
In order to minimize operational problems, it will be necessary for a flow of
information to be supplied to Brown Brothers Harriman & Co. (the "Custodian"),
the custodian for the Fund.
The Subadviser must furnish the Custodian with daily information as to executed
trades, or, if no trades are executed, with a report to that effect, no later
than 5 p.m. (Eastern Standard time) on the day of the trade (confirmation
received from broker). The necessary information can be sent via facsimile
machine to the Custodian. Information provided to the Custodian shall include
the following:
1. Purchase or sale;
2. Security name;
3. CUSIP number (if applicable);
4. Number of shares and sales price per share;
5. Executing broker;
6. Settlement agent;
7. Trade date;
8. Settlement date;
9. Aggregate commission or if a net trade;
10. Interest purchased or sold from interest bearing security;
11. Other fees;
12. Net proceeds of the transaction;
13. Exchange where trade was executed; and
14. Identified tax lot (if applicable).
When opening accounts with brokers for, and in the name of, the Fund, the
account must be a cash account. No margin accounts are to be maintained in the
name of the Fund. Delivery instructions are as specified by the Custodian. The
Custodian will supply the Subadviser daily with a cash availability report. This
will normally be done by telex so that the Subadviser will know the amount
available for investment purposes.
<PAGE>
SCHEDULE B
----------
RECORDS TO BE MAINTAINED BY THE SUBADVISER
1. (Rule 31a-1(b)(5)) A record of each brokerage order, and all other
series purchases and sales, given by the Subadviser on behalf of the
Fund for, or in connection with, the purchase or sale of securities,
whether executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any modifications or
cancellations thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of the Fund.
2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within
ten (10) days after the end of the quarter, showing specifically the
basis or bases upon which the allocation of orders for the purchase and
sale of series securities to named brokers or dealers was effected, and
the division of brokerage commissions or other compensation on such
purchase and sale orders. Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or
dealers to:
(a) The Fund,
(b) The Adviser (Phoenix-Aberdeen International
Advisors, LLC)
(c) The Subadviser, and
(d) Any person other than the foregoing.
(iii) Any other consideration other than the technical
qualifications of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made
available.
C. Shall describe in detail the application of any general or
specific formula or other determinant used in arriving at such
allocation of purchase and sale orders and such division of
brokerage commissions or other compensation.
<PAGE>
D. The name of the person responsible for making the
determination of such allocation and such division of
brokerage commissions or other compensation.
3. (Rule 31a-(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing the
purchase or sale of series securities. Where an authorization is made
by a committee or group, a record shall be kept of the names of its
members who participate in the authorization. There shall be retained
as part of this record: any memorandum, recommendation or instruction
supporting or authorizing the purchase or sale of series securities and
such other information as is appropriate to support the authorization.*
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
Subadviser's transactions for the Fund.
_______________
*Such information might include: current financial information, annual and
quarterly reports, press releases, reports by analysts and from brokerage firms
(including their recommendation; i.e., buy, sell, hold) or any internal reports
or subadviser review.
<PAGE>
SCHEDULE C
----------
SUBADVISORY FEE
For services provided to the Fund pursuant to paragraph 1 hereof, the
Adviser will pay to the Subadviser, on or before the 10th day of each month, a
fee, payable in arrears, at the annual rate of 0.30% of the average daily net
asset values of the Aberdeen New Asia Series of the Fund (the "Series"). The
fees shall be prorated for any month during which this agreement is in effect
for only a portion of the month. In computing the fee to be paid to the
Subadviser, the net asset value of the Series shall be valued as set forth in
the then current registration statement of the Fund.
<PAGE>
SCHEDULE D
----------
SUBADVISER FUNCTIONS
With respect to managing the investment and reinvestment of the
Series' assets, the Subadviser shall provide, at its own expense:
(a) An investment program for the Series consistent with its
investment objectives based upon the development, review and
adjustment of buy/sell strategies approved from time to time
by the Board of Trustees and Adviser;
(b) Implementation of the investment program for the Series based
upon the foregoing criteria;
(c) Quarterly reports, in form and substance acceptable to the
Adviser, with respect to: i) compliance with the Code of
Ethics and the Subadviser's code of ethics; ii) compliance
with procedures adopted from time to time by the Trustees of
the Fund relative to securities eligible for resale under Rule
144A under the Securities Act of 1933, as amended; iii)
diversification of Series assets in accordance with the then
prevailing prospectus and statement of additional information
pertaining to the Series and governing laws; iv) compliance
with governing restrictions relating to the fair valuation of
securities for which market quotations are not readily
available or considered "illiquid" for the purposes of
complying with the Series' limitation on acquisition of
illiquid securities; v) any and all other reports reasonably
requested in accordance with or described in this Agreement;
and, vi) the implementation of the Series' investment
program, including, without limitation, analysis of Series
performance;
(d) Attendance by appropriate representatives of the Subadviser at
meetings requested by the Adviser or Trustees at such time(s)
and location(s) as reasonably requested by the Adviser or
Trustees; and
(e) Participation, overall assistance and support in marketing the
Series, including, without limitation, meetings with pension
fund representatives, broker/dealers who have a sales
agreement with Phoenix Equity Planning Corporation, and other
parties requested by the Adviser.
