As filed with the Securities and Exchange Commission on December 19, 2003
Registration No. 333-34537
File No. 811-08343
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No. ___ [ ] Post-Effective Amendment No. ___
--------------------
PHOENIX INVESTMENT TRUST 97
(Exact Name of Registrant as Specified in Charter)
--------------------
c/o Phoenix Equity Planning Corporation
101 Munson Street, Greenfield, Massachusetts 01301
(Address of Principal Executive Offices)
(800) 243-1574
(Registrant's Telephone Number, including Area Code)
--------------------
John R. Flores, Esq.
c/o Phoenix Life Insurance Company
One American Row, Hartford, Connecticut 06102-5056
(Name and address of Agent for Service)
Copies of Communications to:
Lynn K. Stone, Esq.
Blazzard, Grodd & Hasenauer, P.C.
943 Post Road East
Westport, Connecticut 06880
Paul S. Schreiber, Esq.
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
--------------------
Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of this Registration Statement.
It is proposed that this filing will become effective on _______, 2004,
pursuant to Rule 488 under the Securities Act of 1933.
--------------------
Title of Securities Being Registered: Shares of beneficial interest,
no par value per share.
Registrant is relying on Section 24(f) of the Investment Company Act of
1940, as amended, which permits registration of an indefinite number of shares
of beneficial interest of the Registrant. Accordingly, no filing fee is due in
connection with this Registration Statement.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
============================================================================
PHOENIX INVESTMENT TRUST 97
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
Caption or Location in
Form N-14 Item No. and Caption Prospectus/Proxy Statement
- ------------------------------ --------------------------
Part A Information Required in Prospectus/Proxy Statement
- ------
1. Beginning of Registration Statement Cover Page; Cross Reference Sheet
and Outside Front Cover Page of Prospectus
2. Beginning and Outside Back Cover Table of Contents
Page of Prospectus
3. Fee Table, Synopsis Information and Risk Synopsis; Principal Risk Factors; Comparison of
Factors Investment Objectives and Policies
4. Information about the Transaction Synopsis; The Proposed Reorganization;
Comparative Information on Shareholder Rights;
Exhibit A (Form of Agreement and Plan of
Reorganization)
5. Information about the Registrant Cover Page; Synopsis; Principal Risk Factors;
Comparison of Investment Objectives and
Policies; The Proposed Reorganization;
Comparative Information on Distribution
Arrangements; Comparative Information on
Shareholder Services; Comparative Information
on Shareholder Rights; Management and Other
Service Providers; Additional Information About
The Funds; Current Prospectus of Registrant
6. Information about the Company Being Synopsis; Comparison of Investment Objectives
Acquired and Policies; The Proposed Reorganization;
Comparative Information on Distribution
Arrangements; Comparative Information on
Shareholder Services; Comparative Information
on Shareholder Rights; Additional Information
About The Funds; Prospectus of the Phoenix-Appreciation
Fund, dated May 1, 2003, as supplemented
7. Voting Information Synopsis; The Proposed Reorganization;
Comparative Information on Shareholder Rights;
Voting Information
8. Interest of Certain Persons and Experts The Proposed Reorganization
9. Additional Information Required for Not Applicable
Reoffering By Persons Deemed to be
Underwriters
Caption or Location in
Form N-14 Item No. and Caption Prospectus/Proxy Statement
- ------------------------------ --------------------------
Part B: Information Required in Statement of Additional Information
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. Additional Information about the Registrant Cover Page; Statement of Additional Information
of Registrant, dated December 31, 2003
13. Additional Information about the Cover Page; Statement of Additional Information
Company Being Acquired of Phoenix Trust dated May 1, 2003, as supplemented
14. Financial Statements Annual Report of the Registrant for the year ended August
31, 2003; Annual Report of Phoenix Trust for the year ended
December 31, 2002; Semi-Annual Report of Phoenix Trust for
the six-month period ended June 30, 2003 (each of the
foregoing to be filed by amendment); and Pro Forma Financial
Statements
Part C: Other Information
15. Indemnification Indemnification
16. Exhibits Exhibits
17. Undertakings Undertakings
PHOENIX APPRECIATION FUND
A SERIES OF
PHOENIX TRUST
900 THIRD AVENUE, 31ST FLOOR
NEW YORK, NY 10022
1-800-272-2700
___________, 2004
Dear Shareholder:
The Phoenix Appreciation Fund (the "Merged Series"), a series of Phoenix
Trust (the "Trust"), will hold a Special Meeting of Shareholders at 2:00 p.m.,
local time, on March 19, 2004, at the offices of Phoenix Investment Partners,
Ltd., 56 Prospect Street, Hartford, Connecticut 06102. At the meeting, the
shareholders of the Merged Series (formerly known as the Phoenix-Hollister
Appreciation Fund) will vote on an Agreement and Plan of Reorganization under
which the Merged Series will be combined with the Phoenix Small Cap Value Fund
(the "Surviving Series"), a series of Phoenix Investment Trust 97. The Surviving
Series has a similar investment objective to that of the Merged Series. If the
reorganization agreement is implemented, you will become a shareholder of the
Surviving Series and will receive shares of the corresponding class of the
Surviving Series with an aggregate net asset value equal to the aggregate net
asset value of your investment in the Merged Series. No sales charge will be
imposed in connection with the reorganization. Phoenix Investment Partners, Ltd.
will pay all costs of the reorganization.
The Board of Trustees of the Trust believes that the reorganization offers
you the opportunity to pursue your goals in a larger fund. The Board of Trustees
has carefully considered and has unanimously approved the proposed
reorganization, as described in the accompanying materials, and believes that
the reorganization is in the best interests of the Merged Series and its
shareholders. Therefore, the Board of Trustees recommends that you vote in favor
of the Agreement and Plan of Reorganization.
We have enclosed a copy of the Notice of Special Meeting of Shareholders, the
Proxy Statement and a proxy card. This card should be used to register your vote
on the proposals to be acted upon at the Special Meeting. It is important for
you to provide voting instructions with respect to the issues described in the
accompanying Prospectus/Proxy Statement. We recommend that you read the Proxy
Statement in its entirety as the explanations will help you to decide what
voting instructions you would like to provide.
Whether or not you plan to attend the meeting in person, please vote your
shares. As a convenience to our shareholders, you may now vote in any one of
four ways:
o THROUGH THE INTERNET - ____________________
o BY TELEPHONE - (___)___-_____
o BY MAIL - using the enclosed Proxy Card(s) and postage paid envelope
o IN PERSON - at the Special Meeting
We encourage you to vote by telephone or Internet; have your proxy card in
hand, and call the number or go to the website and follow the instructions given
there. Use of telephone or Internet voting will reduce the time and costs
associated with this proxy solicitation. Whichever method you choose, please
read the enclosed proxy statement carefully before you vote.
Please note that you may receive more than one proxy package if you hold
shares of the Merged Series in more that one account. You should return separate
proxy cards for each account. If you have any questions, please call
800-243-1574, between 8:00 a.m. and 6:00 p.m. Eastern time, Monday through
Friday.
YOUR VOTE ON THESE MATTERS IS IMPORTANT. PLEASE COMPLETE EACH PROXY CARD AND
RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED OR VOTE USING ONE OF THE OTHER
METHODS DESCRIBED. PLEASE RESPOND - IN ORDER TO AVOID THE
4
ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK THAT YOU VOTE PROMPTLY. IT IS
IMPORTANT THAT YOUR SHARES BE REPRESENTED.
Sincerely,
Philip R. McLoughlin, President
5
PHOENIX APPRECIATION FUND
A SERIES OF PHOENIX TRUST
900 THIRD AVENUE, 31ST FLOOR
NEW YORK, NY 10022
1-800-272-2700
-----------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 19, 2004
TO THE SHAREHOLDERS:
The Phoenix Appreciation Fund ("Fund"), a series of Phoenix Trust ("Trust"),
a Delaware Statutory Trust, will hold a special meeting of shareholders at the
offices of Phoenix Investment Partners, Ltd., 56 Prospect Street, Hartford,
Connecticut 06102 on March 19, 2004 at 2:00 p.m., local time, for the following
purposes:
1. To consider and act upon a proposal to approve the Agreement and Plan of
Reorganization, dated ________________________, and the transactions it
contemplates, including (a) the transfer of all or substantially all of the
assets of the Phoenix Appreciation Fund, a series of Phoenix Trust, to the
Phoenix Small Cap Value Fund, a series of Phoenix Investment Trust 97, in
exchange solely for shares of the corresponding class of the Phoenix Small Cap
Value Fund and the assumption by the Phoenix Small Cap Value Fund of all
liabilities of the Phoenix Appreciation Fund and (b) the distribution of the
shares of the Phoenix Small Cap Value Fund so received to shareholders of the
Phoenix Appreciation Fund in complete liquidation of the Phoenix Appreciation
Fund.
2. To consider and act upon any other business as may properly come before
the meeting and any adjournments thereof.
You are entitled to vote at the meeting and any adjournment(s) if you owned
shares of the Phoenix Appreciation Fund at the close of business on January 13,
2004.
Whether or not you plan to attend the meeting in person, please vote your
shares. As a convenience to our shareholders, you may now vote in any one of
four ways:
o THROUGH THE INTERNET - ____________________
o BY TELEPHONE - (___)___-_____
o BY MAIL - using the enclosed Proxy Card(s) and postage paid envelope
o IN PERSON - at the Special Meeting
We encourage you to vote by telephone or Internet; have your proxy card in
hand, and call the number or go to the website and follow the instructions given
there. Use of telephone or Internet voting will reduce the time and costs
associated with this proxy solicitation. Whichever method you choose, please
read the enclosed proxy statement carefully before you vote.
If you sign, date, and return the proxy card but give no voting instructions,
your shares will be voted "FOR" the proposal noticed above.
By Order of the Board of Trustees of
Phoenix Trust
MARC BALTUCH
SECRETARY
New York, NY
__________, 2004
6
PHOENIX SMALL CAP VALUE FUND
A SERIES OF PHOENIX INVESTMENT TRUST 97
C/O PHOENIX EQUITY PLANNING CORPORATION
101 MUNSON STREET
GREENFIELD, MASSACHUSETTS 01301
1-800-243-1574
PHOENIX APPRECIATION FUND
A SERIES OF PHOENIX TRUST
900 THIRD AVENUE, 31ST FLOOR
NEW YORK, NEW YORK 10022
1-800-272-2700
PROSPECTUS/PROXY STATEMENT
DATED _________, 2004
This Prospectus/Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Trustees of Phoenix Trust (the "Trust"),
for use at the special meeting of shareholders of the Phoenix Appreciation Fund
(the "Merged Series") to be held at 2:00 p.m., local time, on March 19, 2004 at
Phoenix Investment Partners, Ltd., 56 Prospect Street, Hartford, Connecticut
06102, and at any adjournment(s).
The purpose of the meeting is to consider an Agreement and Plan of
Reorganization that would effect the reorganization of the Merged Series into
the Phoenix Small Cap Value Fund (the "Surviving Series"), a series of Phoenix
Investment Trust 97 (the "Acquiring Trust"), as described below. Under the
reorganization agreement, all or substantially all of the assets of the Merged
Series would be transferred to the Surviving Series in exchange solely for
shares of the corresponding classes in the Surviving Series and the assumption
by the Surviving Series of all liabilities of the Merged Series. These shares of
the Surviving Series would then be distributed pro rata to the shareholders of
the corresponding classes of the Merged Series, and then the Merged Series would
be liquidated. As a result of the proposed transactions, each shareholder of the
Merged Series would receive a number of full and fractional shares of the
corresponding class of the Surviving Series with an aggregate net asset value
equal to the aggregate net asset value of the shareholder's Merged Series shares
on the effective date of the reorganization.
The Surviving Series and the Merged Series are each portfolio series of
open-end management investment companies. The Surviving Series has an investment
objective to seek long-term capital appreciation. The Merged Series has an
investment objective of increasing the value of your investment over the long
term (capital appreciation) consistent with preserving capital and reducing
portfolio exposure to market risk. Phoenix Investment Counsel, Inc. is employed
as the investment advisor for the Surviving Series. At a shareholder meeting of
the Surviving Series scheduled to be held on January 27, 2004, shareholders of
the Series have been asked to approve Phoenix/Zweig Advisers LLC ("PZA"), as a
subadvisor for the Surviving Series. PZA is the investment advisor for the
Merged Series.
This Prospectus/Proxy Statement, which you should retain for future
reference, sets forth concisely the information that you should know about the
Merged Series, the Surviving Series, and the transactions contemplated by the
reorganization agreement. As used in this Prospectus/Proxy Statement, the term
"series" collectively refers to the Merged Series and the Surviving Series. The
term "trusts" collectively refers to the Trust and the Acquiring Trust. A copy
of the Prospectus for the Surviving Series, dated December 31, 2003, is included
with this Prospectus/Proxy Statement and is incorporated by reference in this
Prospectus/Proxy Statement.
A Prospectus and a Statement of Additional Information for the Merged Series,
each dated May 1, 2003, as supplemented, have been filed with the Securities and
Exchange Commission ("SEC") and are incorporated by reference in this
Prospectus/Proxy Statement. Copies of the above-referenced documents are
available upon written or oral request and without charge by contacting Phoenix
Equity Planning Corporation, at 56 Prospect Street, P. O. Box 150480, Hartford,
Connecticut 06115-0480, or by telephoning Phoenix Equity Planning Corporation
toll free at 1-800-243-4361.
7
The Trust files reports, proxy materials and other information with the SEC.
You may inspect those reports, proxy materials and other information at the
public reference facilities maintained by the SEC at 450 Fifth Street N.W.,
Washington D.C. 20549. Copies of such materials may also be obtained from the
Public Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, 450 Fifth Street, Washington D.C. 20549, at
prescribed rates, or at no charge from the EDGAR database on the SEC's web site
at www.sec.gov.
This Prospectus/Proxy Statement constitutes the proxy statement of the Merged
Series for the meeting and the prospectus for shares of the Surviving Series
that have been registered with the SEC and are being issued in connection with
the reorganization. This Prospectus/Proxy Statement is expected to first be sent
to shareholders on or about January 26, 2004.
-----------------
THE SECURITIES OF THE SURVIVING SERIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE DISCLOSURE IN THIS
PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
-----------------
The date of this Prospectus/Proxy Statement is ________, 2004.
8
TABLE OF CONTENTS
Page
SYNOPSIS...................................................................
PRINCIPAL RISK FACTORS.....................................................
THE PROPOSED REORGANIZATION................................................
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES...........................
COMPARATIVE INFORMATION ON DISTRIBUTION ARRANGEMENTS.......................
COMPARATIVE INFORMATION ON SHAREHOLDER SERVICES............................
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS..............................
FISCAL YEAR................................................................
MANAGEMENT AND OTHER SERVICE PROVIDERS.....................................
VOTING INFORMATION.........................................................
ADDITIONAL INFORMATION ABOUT THE SERIES....................................
MISCELLANEOUS..............................................................
OTHER BUSINESS.............................................................
9
INTENTIONALLY LEFT BLANK
10
SYNOPSIS
BACKGROUND
The proposed reorganization is the outcome of deliberations by the Boards of
Trustees of the Phoenix Funds and two trusts. Phoenix/Zweig Advisers LLC ("PZA")
and Phoenix Investment Counsel, Inc. ("PIC"), the advisers to the Merged Series
and the Surviving Series, respectively, recommended that the Trustees of the
respective trusts consider the benefits that the shareholders would realize if
the Merged Series was to be combined with the Surviving Series. In response to
their recommendation, the independent trustees of each trust requested that
management outline a specific reorganization proposal for their consideration
and provide an analysis of the specific benefits that shareholders would realize
from the proposal. Independent trustees are trustees who are not "interested
persons" of their respective trusts (as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended (the "1940 Act")). After considering
the specific reorganization proposal, the Trustees of the Trust and the
Acquiring Trust, including the independent trustees, at meetings held on
November 12, 2003 and November 19, 2003, respectively, unanimously approved the
reorganization.
SUMMARY OF THE PROPOSED REORGANIZATION
The reorganization will be effected in accordance with the terms of a
reorganization agreement, a form of which is attached to this Prospectus/Proxy
Statement as Exhibit A. The reorganization agreement provides for:
o the acquisition of all or substantially all of the assets of the Merged
Series by the Surviving Series in exchange solely for shares of the
corresponding class in the Surviving Series;
o the assumption by the Surviving Series of all liabilities of the Merged
Series;
o the pro rata distribution of the corresponding class of the Surviving
Series shares to the Merged Series shareholders in exchange for the
outstanding Merged Series shares; and
o the liquidation of the Merged Series.
The reorganization is anticipated to occur on or about March 26, 2004. If the
reorganization agreement is implemented, each Merged Series shareholder will
receive a number of full and fractional shares of the corresponding class of the
Surviving Series shares with an aggregate net asset value equal to the aggregate
net asset value of his or her Merged Series shares as of the closing date of the
reorganization.
The implementation of the reorganization agreement is subject to a number of
conditions set forth in the reorganization agreement. See "The Proposed
Reorganization." Among the significant conditions (which may not be waived) are:
o the receipt by each trust of an opinion of counsel as to the federal
income tax consequences of the reorganization; and
o the approval of the reorganization agreement by the shareholders of the
Merged Series.
The reorganization agreement provides that Phoenix Investment Partners, Ltd.
will bear all costs and expenses of the reorganization, including the costs of
the meeting, the costs and expenses incurred in the preparation and mailing of
the notice, this Prospectus/Proxy Statement and the proxy, and the solicitation
of proxies.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and principal investment strategies of the Merged
Series and the Surviving Series are similar:
11
o The Merged Series has an investment objective of increasing the value of
the shareholder's investment over the long term (capital appreciation)
consistent with preserving capital and reducing portfolio exposure to
market risk. The Surviving Series has an investment objective to seek
long-term capital appreciation.
o Under normal circumstances, the Merged Series invests its total assets
primarily in common stocks of companies with smaller capitalizations
(generally less than $2 billion) with both value or growth
characteristics. Under normal circumstances, the Surviving Series invests
at least 80% of its total assets in securities of issuers with
capitalization of less than $2 billion at the time of investment.
See "Principal Risk Factors" and "Comparison of Investment Objectives and
Policies" below, for further information on the similarities and differences
between the investment objectives, policies and risks of the Surviving Series
and the Merged Series. You can also find additional information for the
Surviving Series in its Prospectus.
DISTRIBUTION AND PURCHASE ARRANGEMENTS
Each of the Merged Series and the Surviving Series currently offers three
classes of shares: Class A, Class B and Class C shares. Shares are offered to
the public at a price equal to the net asset value per share plus applicable
sales and distribution charges. For Class A Shares of each series, sales charges
are imposed at the time of purchase. For Class B and Class C Shares of each
series, sales charges are imposed on a contingent deferred basis.
See "Comparative Information on Distribution Arrangements", below, for
further information on the distribution arrangements of each series. You can
also find additional information on distribution arrangements for each series in
its Prospectus.
DIVIDENDS AND DISTRIBUTIONS
The Merged Series distributes net investment income annually. The Surviving
Series distributes net investment income semi-annually. Both Series distribute
net realized capital gains, if any, at least annually.
All dividends and distributions of the Merged Series and the Surviving Series
are paid in additional shares of the respective series unless shareholders elect
to receive cash. You can also find additional information on dividends and
distributions for the Surviving Series in its Prospectus.
EXCHANGES
The Merged Series and the Surviving Series currently offer shareholders
identical exchange privileges. Shareholders of the Merged Series and the
Surviving Series may exchange their shares for shares of a corresponding class
of shares of other affiliated Phoenix funds.
On exchanges with corresponding classes of shares that carry a contingent
deferred sales charge, the contingent deferred sales charge schedule of the
original shares purchased continues to apply. You can also find additional
information on the Surviving Series' exchange privileges in its Prospectus.
REDEMPTION PROCEDURES
Shareholders of both the Merged Series and the Surviving Series may redeem
their shares at a redemption price equal to the net asset value of the shares
(minus any applicable contingent deferred sales charge) as next determined
following the receipt of a redemption order in proper form. Ordinarily, payments
of redemption proceeds for redeemed Merged Series and Surviving Series shares
are made within seven days after receipt of a redemption request in proper form.
See "Comparative Information on Shareholder Services" for more information. You
can also find additional information on the Surviving Series' redemption
procedures in its Prospectus.
12
FEDERAL TAX CONSEQUENCES OF PROPOSED REORGANIZATION
At the closing of the reorganization, the Trust and the Acquiring Trust will
receive an opinion of counsel, subject to certain assumptions and
representations, that:
o no gain or loss will be recognized by the Merged Series on the transfer of
the assets of the Merged Series to the Surviving Series in exchange for
Surviving Series shares and the assumption by the Surviving Series of all
liabilities of the Merged Series or upon the distribution of Surviving
Series shares to the Merged Series shareholders in exchange for their
shares of the Merged Series;
o the aggregate tax basis of the Surviving Series shares, including any
fractional shares, received by each shareholder of the Merged Series
pursuant to the reorganization will be the same as the aggregate tax basis
of the Merged Series shares held by such shareholder immediately prior to
the reorganization; and
o the holding period of the Surviving Series shares, including fractional
shares, to be received by each shareholder of the Merged Series will
include the period during which the Merged Series shares exchanged
therefor were held by such shareholder (provided that the Merged Series
shares were held as a capital asset on the date of the reorganization).
See "The Proposed Reorganization--Federal Income Tax Consequences" for more
information.
RISK FACTORS
An investment in the Surviving Series is subject to specific risks arising
from the types of securities in which the Surviving Series invests and general
risks arising from investing in any mutual fund type of investment. The specific
risks to which the Surviving Series is subject include the risks of investing in
the stocks of companies with small capitalizations and in convertible
securities. Investors can lose money by investing in the Surviving Series. There
is no assurance that the Surviving Series will meet its investment objective.
Because the Surviving Series' investment objectives and policies are similar to
those of the Merged Series, an investment in the Surviving Series is subject to
many of the same risks as an investment in the Merged Series. See "Principal
Risk Factors" for the principal risks associated with an investment in the
Surviving Series.
MANAGEMENT AND OTHER SERVICE PROVIDERS
As the investment advisor for the Surviving Series, PIC is responsible for
managing the investment program and the general operations of the Surviving
Series. PZA, as subadvisor to the Surviving Series, is responsible for the
day-to-day management of the Surviving Series' portfolio. PZA, the investment
advisor for the Merged Series, is responsible for managing the Merged Series'
investment program and general operations as well as the day-to-day management
of the Merged Series' portfolio.
A team of equity investment professionals led by Carlton Neel manages the
Merged Series. Mr. Neel is a Senior Vice President of PZA. David Dickerson is
also a member of the equity investment team that manages the Merged Series. Mr.
Dickerson began his investment career at the Zweig companies in 1993.
Messrs. Neel and Dickerson, employees of PZA, the subadviser of the Surviving
Series, serve in the same portfolio management capacities with respect to the
Surviving Series as they do with respect to the Merged Series. Since October 31,
2003, Mr. Neel has served as equity investment team leader for the Merged Series
and for the Surviving Series and Mr. Dickerson is a member of that team for both
series. A team of managers and analysts makes investment and trading decisions
for each series.
COMPARATIVE FEE TABLES
The tables below are designed to assist an investor in understanding the
various direct and indirect costs and expenses associated with an investment in
the relevant class of shares of each Series. Each table also includes pro forma
information for the combined Surviving Series resulting from the reorganization
assuming the reorganization
13
took place on August 31, 2003, and after adjusting such information to reflect
current fees. The expense information for the Surviving Series and the Merged
Series is based upon expenses for the twelve months ended August 31, 2003.
As indicated in the tables below, immediately upon effectiveness of the
reorganization, the "Total Annual Fund Operating Expenses" for the combined
Surviving Series are expected to be slightly lower than the "Total Annual Fund
Operating Expenses" for the Merged Series.
CLASS A SHARES
-----------------------------------------------------------
PRO FORMA COMBINED
SURVIVING SERIES MERGED SERIES SURVIVING SERIES
---------------- ------------- ------------------
Annual Fund Operating Expenses
(expenses that are deducted, from fund assets)
Management Fees 0.90% 1.00%(a) 0.90%
Distribution and Service (12b-1) Fees(b) 0.25% 0.30% 0.25%
Other Expenses 0.56% 0.57% 0.47%
Total Annual Fund Operating Expenses 1.71%(c) 1.87% 1.62%(c)
CLASS B SHARES
-----------------------------------------------------------
PRO FORMA COMBINED
SURVIVING SERIES MERGED SERIES SURVIVING SERIES
---------------- ------------- ------------------
Annual Fund Operating Expenses
(expenses that are deducted, from fund assets)
Management Fees 0.90% 1.00%(a) 0.90%
Distribution and Service (12b-1) Fees(b) 1.00% 1.00% 1.00%
Other Expenses 0.56% 0.57% 0.47%
Total Annual Fund Operating Expenses 2.46%(c) 2.57% 2.37%(c)
CLASS C SHARES
-----------------------------------------------------------
PRO FORMA COMBINED
SURVIVING SERIES MERGED SERIES SURVIVING SERIES
---------------- ------------- ------------------
Annual Fund Operating Expenses
(expenses that are deducted, from fund assets)
Management Fees 0.90% 1.00%(a) 0.90%
Distribution and Service (12b-1) Fees(b) 1.00% 1.00% 1.00%
Other Expenses 0.56% 0.57% 0.47%
Total Annual Fund Operating Expenses 2.46%(c) 2.57% 2.37%(c)
(a) The investment management fee for the Merged Series has been reduced to
0.90% pursuant to a voluntary fee waiver.
(b) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the NASD.
14
(c) The fund's investment adviser has agreed to reimburse through December 31,
2004 the Surviving Series' expenses, other than Management Fees and
Distribution and Service Fees, to the extent that such expenses exceed
0.25% for each class of shares. Actual Total Annual Fund Operating
Expenses, after expense reimbursement, were 1.40% for Class A Shares, 2.15%
for Class B Shares, and 2.15% for Class C Shares. For the fiscal year ended
August 31, 2003.
The following tables show shareholder transaction expenses currently
applicable to the purchase of shares of both series. These expenses will remain
in effect as to the combined Surviving Series following the reorganization.
CLASS A CLASS B CLASS C
------- ------- -------
SURVIVING SERIES
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases (as a 5.75% None None
percentage of offering price)
Maximum Deferred Sales Charge (Load) (as a percentage of the None 5%(a) 1.00%(b)
lesser of the value redeemed or the amount invested)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None None None
[and other Distributions]
Redemption Fee None None None
Exchange Fee None None None
CLASS A CLASS B CLASS C
------- ------- -------
MERGED SERIES
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases (as a 5.75% None None
percentage of offering price)
Maximum Deferred Sales Charge (Load) (as a percentage of the None 5%(a) 1.25%(b)
lesser of the value redeemed or the amount invested)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None None None
[and other Distributions]
Redemption Fee None None None
Exchange Fee None None None
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during
the fourth and fifth years and to 0% after the fifth year.
(b) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(c) A 1% CDSC is imposed on redemptions within 12 months of purchases of $1
million or more originally purchased without an initial sales charge.
(d) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 3% during
the third and fourth years and to 0% after the sixth year.
EXAMPLE
These examples illustrate the impact of the above fees and expenses on an
account with an initial investment of $10,000, based on the expenses shown
above. They assume a 5% annual return, the reinvestment of all dividends and
distributions and "Annual Fund Operating Expenses" remaining the same each year.
In the case of Class B Shares, it is assumed that your Shares are converted to
Class A Shares after seven years with respect to the Merged Series and after
eight years with respect to the Surviving Series. These examples are
hypothetical; actual series expenses and returns vary from year to year, and may
be higher or lower than those shown.
Fees and expenses if you redeemed your shares at the end of each time period:
15
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
CLASS A SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Surviving Series $739 $1,083 $1,450 $2,478
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Merged Series $754 $1,129 $1,528 $2,654
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Pro Forma Combined Surviving Series $730 $1,057 $1,406 $2,386
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
CLASS B SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Surviving Series $649 $967 $1,311 $2,611
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Merged Series $660 $1,099 $1,465 $2,654
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Pro Forma Combined Surviving Series $640 $939 $1,265 $2,520
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
CLASS C SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Surviving Series $349 $767 $1,311 $2,796
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Merged Series $385 $799 $1,365 $2,905
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Pro Forma Combined Surviving Series $340 $739 $1,265 $2,706
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Fees and expenses if you did not redeem yours shares at the end of each time
period:
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
CLASS A SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Surviving Series $739 $1,083 $1,450 $2,478
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Merged Series $754 $1,129 $1,528 $2,639
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Pro Forma Combined Surviving Series $730 $1,057 $1,406 $2,386
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
CLASS B SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Surviving Series $249 $767 $1,311 $2,611
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Merged Series $260 $799 $1,365 $2,654
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Pro Forma Combined Surviving Series $240 $739 $1,265 $2,520
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
CLASS C SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Surviving Series $249 $767 $1,311 $2,796
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Merged Series $260 $799 $1,365 $2,905
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
Pro Forma Combined Surviving Series $240 $739 $1,265 $2,706
- ---------------------------------------------- ------------------ ------------------- ------------------- ----------------
16
Note: Actual expenses for the Surviving Series may be lower than those shown
in the example above since the expense levels used to calculate the figures
shown do not include the reimbursement of expenses over certain levels by the
Surviving Series' investment adviser. In the same manner, the voluntary
management fee waiver for the Merged Series is not reflected.
The purpose of the tables above is to help the investor understand the
various costs and expenses that the investor will bear directly or indirectly.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN SHOWN.
PRINCIPAL RISK FACTORS
Because the Surviving Series' investment objective and policies are similar
to those of the Merged Series, an investment in the Surviving Series is subject
to many of the same specific risks as an investment in the Merged Series. The
following highlights the principal similarities and differences between the
principal risk factors associated with an investment in the Surviving Series as
contrasted with those associated with the Merged Series and is qualified in its
entirety by the more extensive discussion of risk factors in the Prospectuses
and Statements of Additional Information of the Surviving Series and the Merged
Series, respectively.
An investment in the Surviving Series is subject to specific risks arising
from the types of securities in which the Surviving Series invests and general
risks arising from investing in any mutual fund. You can lose money by investing
in the Surviving Series. There is no assurance that the Surviving Series will
meet its investment objective.
GENERAL
The value of the investments of the Merged Series and the Surviving Series
that supports your share value can decrease. If between the time you purchase
shares and the time you sell shares, the value of your fund's investments
decreases, you will lose money.
Investment values can decrease for a number of reasons. Conditions affecting
the overall economy, specific industries or companies in which your fund invests
can be worse than expected and investments may fail to perform as the series'
investment subadvisor expects. As a result, the value of your shares may
decrease.
GROWTH STOCKS
Because growth stocks typically make little or no dividend payments to
shareholders, investment return is based on a stock's capital appreciation,
making return more dependent on market increases and decreases. Growth stocks
are therefore more volatile than non-growth stocks to market changes, tending to
drop more sharply when markets fall.
SMALL CAPITALIZATIONS
Companies with small capitalizations are often companies with a limited
operating history or companies in industries that have recently emerged due to
cultural, economic, regulatory or technological developments. Such developments
can have a significant impact or negative effect on small capitalization
companies and their stock performance, and can make investment returns highly
volatile. Product lines are often less diversified and subject to competitive
threats. Small capitalization stocks are subject to varying patterns of trading
volume and may, at times, be difficult to sell. This risk is common to both
series.
CONVERTIBLE SECURITIES
Convertible securities may be subject to redemption at the option of the
issuer. If a security is called for redemption, the series may have to redeem
the security, convert it into common stock or sell it to a third party at a
17
price and time that is not beneficial for the series. In addition, securities
convertible into common stocks may have higher yields than common stocks but
lower yields than comparable non-convertible securities.
THE PROPOSED REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION
The terms and conditions under which the proposed reorganization may be
consummated are set forth in the reorganization agreement. Significant
provisions of the reorganization agreement are summarized below. This summary,
however, is qualified in its entirety by reference to the reorganization
agreement, a form of which is attached to this Prospectus/Proxy Statement as
Exhibit A.
The Agreement and Plan of Reorganization contemplates:
o the acquisition by the Surviving Series, on the closing date of the
reorganization, of all or substantially all of the assets of the Merged
Series in exchange solely for shares of the corresponding class of the
Surviving Series and the assumption by the Surviving Series of all
liabilities of the Merged Series; and
o the distribution of shares of the corresponding class of the Surviving
Series to the shareholders of the Merged Series in exchange for their
respective shares of the Merged Series.
The assets of the Merged Series to be acquired by the Surviving Series
include all property, including, without limitation, all cash, securities,
commodities and futures interests, and dividends or interest receivables which
are owned by the Merged Series and any deferred or prepaid expenses shown as an
asset on the books of the Merged Series on the closing date of the
reorganization. The Surviving Series will assume all liabilities, accrued or
contingent expenses, costs, charges, and reserves of the Merged Series reflected
on an unaudited statement of assets and liabilities as of the closing date. The
closing of the reorganization will occur following satisfaction (or waiver) of
the conditions to closing set forth in the reorganization agreement (currently
anticipated to be on or about March 26, 2004), or such later date as the parties
may agree.
The value of the Merged Series' assets to be acquired and the Merged Series'
liabilities to be assumed by the Surviving Series and the net asset value of
each class of shares of the Surviving Series will be determined immediately
after the close of regular trading on the New York Stock Exchange on the closing
date, using the valuation procedures set forth in the Series' then current
Prospectus and Statement of Additional Information. The number of shares of each
class of the Surviving Series to be issued to the Merged Series will be
determined by dividing (a) the value of the aggregate net assets attributable to
each class of shares of the Merged Series by (b) the net asset value per share
of the corresponding class of the Surviving Series.
On the closing date, the Merged Series will liquidate and distribute pro rata
to its shareholders of record the Surviving Series shares received by the Merged
Series in exchange for their respective shares in the Merged Series. This
liquidation and distribution will be accomplished by opening an account on the
books of the Surviving Series in the name of each shareholder of record of the
Merged Series and by crediting to each account the shares due pursuant to the
reorganization. Every Merged Series shareholder will own shares of the
corresponding class of the Surviving Series immediately after the
reorganization, the value of which will be equal to the value of the
shareholder's Merged Series shares immediately prior to the reorganization.
At or prior to the closing date, the Merged Series will declare a dividend or
dividends which, together with all previous such dividends, will have the effect
of distributing to the Merged Series shareholders all of the Merged Series'
investment company taxable income for all taxable years ending at or prior to
the closing date (computed without regard to any deduction for dividends paid)
and all of its net capital gains realized (after reduction for any capital loss
carry-forward) in all taxable years ending at or prior to the closing date.
Subject to certain limitations on liability, the Surviving Series has agreed
to indemnify and hold harmless the Trustees of the Trust who are not "interested
persons" of the advisor or distributor of the Merged Series (the
18
"Independent Trustees") from and against any and all claims, costs, expenses
(including reasonable attorneys' fees), losses and liabilities of any sort or
kind (collectively "Liability") which may be asserted against them or for which
the Independent Trustees may become liable arising out of or attributable to the
transactions contemplated by the reorganization agreement, provided that any
Independent Trustee seeking the benefit of this indemnification shall not have
materially contributed to the creation of such Liability by acting in a manner
contrary to his or her fiduciary duties as a trustee under the 1940 Act.
The consummation of the reorganization is subject to a number of conditions
set forth in the reorganization agreement. Certain of these conditions may be
waived by the Board of Trustees, or by an authorized officer of each trust, as
appropriate.
Among the significant conditions which may not be waived are: (a) the receipt
by the Trust and the Acquiring Trust of an opinion of counsel as to certain
federal income tax aspects of the reorganization and (b) the approval of the
reorganization agreement by the shareholders of the Merged Series. The Plan may
be terminated and the reorganization abandoned at any time, before or after
approval by the shareholders of the Merged Series, prior to the closing date, by
either party by resolution of its Board of Trustees. In addition, the
reorganization agreement may be amended by mutual agreement, except that no
amendment may be made to the reorganization agreement subsequent to the meeting
that would change the provisions for determining the number of Surviving Series
shares to be issued to shareholders of the Merged Series without their further
approval.
REASONS FOR THE REORGANIZATION
The proposed reorganization is the outcome of the deliberation by the Boards
of Trustees of the trusts. The advisors to each series recommended that the
Trustees of each trust consider the benefits that shareholders would realize if
the Merged Series were to be combined with the Surviving Series. In response to
this recommendation, the independent trustees of each trust requested that
management outline a specific reorganization proposal for their consideration
and provide an analysis of the specific benefits to be realized by shareholders
from the proposal.
In the course of their review, the Trustees of the Trust noted that the
reorganization would be a means of combining two series with similar investment
objectives and principal investment strategies and would permit the shareholders
of the Merged Series to pursue their investment goals in a larger fund. In
reaching this conclusion, the Board considered a number of additional factors,
including the following:
o the reorganization could result in economies of scale through the
spreading of fixed costs over a larger asset base;
o the total expense ratio of the combined Surviving Series following the
reorganization is projected to be slightly lower than the current total
expense ratio of the Merged Series;
o the reorganization provides for continuity of distribution and shareholder
servicing arrangements; and
o the reorganization will not result in the recognition of any gain or loss
for federal income tax purposes either to the Merged Series or the
Surviving Series or to the shareholders of either of the series.
After considering these and other factors, the Board of Trustees of the
Trust, including the independent trustees, unanimously concluded at a meeting
held on November 12, 2003 that the reorganization would be in the best interests
of the Merged Series and its shareholders and that the interests of existing
Merged Series' shareholders will not be diluted as a result of the transactions
contemplated by the reorganization. The Board of Trustees of the Trust then
unanimously voted to approve the reorganization and authorized the officers of
the Trust to submit the reorganization proposal to shareholders for
consideration.
At a meeting held on November 19, 2003, the Board of Trustees of the
Acquiring Trust, including the independent trustees, also unanimously concluded
that the reorganization would be in the best interests of the Surviving Series
and its shareholders and that the interests of existing Surviving Series'
shareholders will not be
19
diluted as a result of the reorganization. In the course of their review, the
Board of Trustees of the Acquiring Trust noted that the advisers to each series
have elected to use the historical financial statements and performance record
of the Surviving Series.
FEDERAL INCOME TAX CONSEQUENCES
General
-------
The reorganization has been structured with the intention that it qualify for
Federal income tax purposes as a tax-free reorganization under Section 368(a) of
the Internal Revenue Code (the "Code"). This means that, in the opinion of
counsel, no gain or loss will be recognized by a shareholder of the Merged
Series for Federal income tax purposes as a result of the reorganization.
As a condition to the closing of the reorganization, the Merged Series and
the Surviving Series will receive an opinion of Shearman & Sterling LLP,
substantially to the effect that, among other things, for Federal income tax
purposes, upon consummation of the reorganization (i) no gain or loss will be
recognized by the Merged Series or the Surviving Series as a result of the
reorganization, (ii) no gain or loss will be recognized by a shareholder of the
Merged Series upon his or her receipt of shares of the Surviving Shares in the
reorganization solely in exchange for his or her shares of the Merged Series,
(iii) the Merged Series and the Surviving Series will be a "party to a
reorganization" under Section 368(b) of the Code, (iv) the holding period of the
assets of the Merged Series acquired by the Surviving Series will include the
period during which such assets were held by the Merged Series, (v) the holding
period for shares of the Surviving Series received by each shareholder of the
Merged Series in exchange for his or her shares in the Merged Series will
include the period during which such shareholder held shares of the Merged
Series (provided the Merged Series shares were held as capital assets on the
date of the exchange), and (vi) immediately after the reorganization, the tax
basis of the shares of the Surviving Series received by shareholders of the
Merged Series in the reorganization will be equal, in the aggregate, to the tax
basis of the shares of the Merged Series surrendered in exchange therefore.
Shearman & Sterling LLP's opinion will be based upon certain assumptions and
representations made by the Merged Series and the Surviving Series.
An opinion of counsel does not have the effect of a private letter ruling
from the Internal Revenue Services ("IRS") and is not binding on the IRS or any
court.
If the reorganization is consummated but fails to qualify as a reorganization
within the meaning of Section 368(a) of the Code, the reorganization would be
treated as a taxable sale of assets followed by a taxable liquidation of the
Merged Series, and Merged Series shareholders would recognize a taxable gain or
loss equal to the difference between their basis in the Merged Series shares and
the fair market value of the shares in the Surviving Series received.
To the extent the Surviving Series has unrealized capital gains at the time
of the reorganization, the Merged Series' shareholders may incur taxable gains
in the year that the Surviving Series realizes and distributes those gains. This
will be true notwithstanding that the unrealized gains were reflected in the
price of the Surviving Series' shares at the time they were exchanged for assets
of the Merged Series in the reorganization. Conversely, shareholders of the
Surviving Series would share in unrealized capital gains of the Merged Series
after the reorganization and bear a tax consequence on the subsequent
realization of such gains.
To the extent that the Merged Series has loss carry-forwards at the time of
the reorganization, the Merged Series shareholders may not be able to benefit
from such loss carry-forwards after the reorganization.
Shareholders should consult their tax advisers regarding the effect of the
reorganization in light of their individual circumstances. As the foregoing
relates only to Federal income tax consequences, shareholders also should
consult their tax advisers as to the foreign, state, local and other tax
consequences of the reorganization.
20
Status as a Regulated Investment Company
----------------------------------------
The Merged Series and the Surviving Series have elected and qualified to be
taxed as regulated investment companies under Section 851-855 of the Code, and
after the reorganization, the Surviving Series intends to operate or continue to
operate so as to qualify as a regulated investment company. The Merged Series'
existence as a separate investment portfolio of the Trust will be terminated as
part of the reorganization.
CAPITALIZATION
The following table sets forth the capitalization of the Surviving Series and
the Merged Series, and on a pro forma basis for the combined Surviving Series as
of August 31, 2003 giving effect to the proposed acquisition of net assets of
the Merged Series at net asset value. The pro forma data reflects an exchange
ratio of approximately 0.8385, 0.8460 and 0.8451 for Class A, Class B and Class
C shares, respectively, of the Surviving Series issued for each Class A, Class B
and Class C share, respectively, of the Merged Series.
PRO FORMA
SURVIVING SERIES MERGED SERIES COMBINED SERIES
---------------- ------------- ---------------
Net Assets
Class A $76,782,705 $62,539,657 $139,322,362
Class B $40,696,246 $ 7,782,422 $ 48,478,668
Class C $51,559,224 $29,047,971 $ 80,607,195
Net Asset Value per share
Class A $13.42 $11.25 $13.42
Class B $12.79 $10.82 $12.79
Class C $12.79 $10.81 $12.79
Shares outstanding
Class A 5,723,406 5,559,028 10,385,131
Class B 3,181,889 719,188 3,790,368
Class C 4,031,754 2,687,588 6,303,205
The table set forth above should not be relied on to determine the number of
Surviving Series shares to be received in the reorganization. The actual number
of shares to be received will depend upon the net asset value and number of
shares outstanding of the Merged Series and the Surviving Series at the time of
the reorganization.
HISTORICAL PERFORMANCE INFORMATION
The following table sets forth the average annual total returns of the shares
of the Class A, Class B and Class C shares of the Surviving Series and the
Merged Series for the periods indicated.
AVERAGE ANNUAL TOTAL RETURNS(1) FOR
PERIOD ENDING AUGUST 31, 2003
1 YEAR 5 YEARS SINCE INCEPTION TO INCEPTION DATE
8/31/03
SURVIVING SERIES
- ----------------
Class A Shares at NAV(2) 18.76% 16.23% 9.91% 11/20/97
Class A Shares at POP(3) 11.93 14.86 8.78 11/20/97
Class B Shares at NAV(2) 17.88 15.37 9.09 11/20/97
Class B Shares with CDSC(4) 13.88 15.37 9.09 11/20/97
Class C Shares at NAV(2) 17.88 15.37 9.09 11/20/97
Class C Shares with CDSC(4) 17.88 15.37 9.09 11/20/97
S&P 500(R)Index(5) 12.09 2.50 2.33 11/20/97
Russell 2000 Value Index(6) 23.68 12.32 7.23 11/20/97
21
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 5.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the time
of purchase. CDSC charges for B shares decline from 5% to 0% over a five year
period. CDSC charges for C shares are 1% in the first year and 0% thereafter.
(5) The S&P 500(R) Index is a measure of stock market total return
performance and is provided for general comparative purposes. The index's
performance does not reflect sales charges.
(6) The Russell 2000 Value Index measures the total return performance of
those Russell 2000 companies with lower price-to-book ratios and lower
forecasted growth values. The index's performance does not reflect sales
charges.
AVERAGE ANNUAL TOTAL RETURNS(1) FOR
PERIOD ENDING JUNE 30, 2003
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION TO INCEPTION DATE
06/30/03
MERGING SERIES
- --------------
Class A Shares at NAV(2) (2.56)% (0.79)% 6.74% --- ---
Class A Shares at POP(3) (8.16) (1.96) 6.11 --- ---
Class B Shares at NAV(2) (3.20) (1.45) ---- 4.45% 4/8/96
Class B Shares with CDSC(4) (6.88) (1.56) ---- 4.45% 4/8/96
Class C Shares at NAV(2) (3.20) (1.46) 5.99 --- 2/3/92
Class C Shares with CDSC(4) (3.20) (1.46) 5.99 --- 2/3/92
Russell 2000 Index(7) (1.64) 0.97 8.24 Note 5 Note 5
S&P 500(R)Index(8) 0.26 (1.59) 10.08 Note 6 Note 6
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 5.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the time of
purchase. CDSC charges for B shares decline from 5% to 0% over a five year
period. CDSC charges for C shares are 1.25% in the first year and 0% thereafter.
(5) Index performance is 5.71% for Class B (since 4/8/96).
(6) Index performance is 7.58% for Class B (since 4/8/96).
(7) The Russell 2000 Index is an unmanaged, commonly used measure of the
total return performance of the 2,000 smallest companies in the Russell 3000
Index. The index's performance does not reflect sales charges.
(8) The S&P 500 Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes. The
index's performance does not reflect sales charges.
All returns represent past performance which may not be indicative of future
performance. The investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than the original cost.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion is a summary of some of the more significant
similarities and differences in the investment objectives, policies and
restrictions of the Surviving Series and the Merged Series. The discussion below
is qualified in its entirety by the discussion elsewhere in this
Prospectus/Proxy Statement, and in each Series' Prospectus and Statement of
Additional Information.
22
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of the Surviving Series and the Merged Series are
similar. The Surviving Series has an investment objective to seek long-term
capital appreciation. The Merged Series has an investment objective of
increasing the value of your investment over the long term (capital
appreciation) consistent with preserving capital and reducing portfolio exposure
to market risk. The investment objectives of the Surviving Series and the Merged
Series are "fundamental policies" which may not be changed without the approval
of the holders of at least a "majority of the outstanding voting shares" of the
fund. A majority of the outstanding voting shares is defined in the 1940 Act as
the lesser of (a) the vote of the holders of 67% or more of the outstanding
voting shares of the series present in person or by proxy, if the holders of
more than 50% of the outstanding voting shares are present in person or by
proxy, or represented by proxy, or (b) the vote of the holder of more than 50%
of the outstanding voting shares of the series.
The principal investment strategies of the Surviving Series and the Merged
Series are similar. The Merged Series invests primarily in common stocks of
companies with smaller capitalizations (generally less than $2 billion) with
both value or growth characteristics. Under normal circumstances, the Surviving
Series invests at least 80% of its assets in securities of issuers with
capitalizations of less than $2 billion at the time of investment. The Surviving
Series invests in a portfolio of common stocks of primarily domestic (U.S.)
companies. Each series utilizes a similar security selection process that
selects stocks meeting certain investment criteria relating to price, dividend
yield, going concern value and debt levels. For the few hundred of the
approximately 5,000 companies that survive this screening process, the adviser
(or sub-adviser with respect to the Surviving Series) projects growth in
earnings and dividends, earnings momentum and, relative undervaluation based on
dividend discount models. From this analysis, the adviser (or subadvisor with
respect to the Surviving Series) develops target prices and value ranges and
selects the top-rated securities for purchase.
Each series may, as a temporary defensive strategy, invest without limit in
U.S. Government securities and in money market instruments.
As the investment advisor for the Surviving Series, PIC is responsible for
managing the investment program and the general operations of the Surviving
Series. PZA, as subadvisor to the Surviving Series, is responsible for the
day-to-day management of the Surviving Series' portfolio. PZA, the investment
advisor for the Merged Series, is responsible for managing the Merged Series'
investment program and general operations as well as the day-to-day management
of the Merged Series' portfolio.
CERTAIN INVESTMENT RESTRICTIONS
The Surviving Series and the Merged Series are subject to identical
investment restrictions that restrict the scope of their investments. These
investment restrictions are "fundamental" policies. A "fundamental" policy is
defined in the 1940 Act to mean that the restriction cannot be changed without
the vote of a "majority of the outstanding voting shares" of the series (as that
term is defined in the 1940 Act).
These investment restrictions are:
(1) A Series may not, with respect to 75% of its total assets, purchase
securities of an issuer (other than the U.S. Government, its agencies,
instrumentalities or authorities or repurchase agreements collateralized by
U.S. Government securities and other investment companies), if: (a) such
purchase would, at the time, cause more than 5% of the Series' total
assets, taken at market value, to be invested in the securities of such
issuer; or (b) such purchase would, at the time, result in more than 10% of
the outstanding voting securities of such issuer being held by the Series.
(2) A Series may not purchase securities if, after giving effect to the
purchase, more than 25% of its total assets would be invested in the
securities of one or more issuers conducting their principal business
activities in the same industry (excluding the U.S. Government, its
agencies or instrumentalities).
23
(3) A Series may not borrow money, except (i) in amounts not to exceed one
third of the value of the Series' total assets (including the amount
borrowed) from banks, and (ii) up to an additional 5% of its total assets
from banks or other lenders for temporary purposes. For purposes of this
restriction, (a) investment techniques such as margin purchases, short
sales, forward commitments, and roll transactions, (b) investments in
instruments such as futures contracts, swaps, and options, and (c)
short-term credits extended in connection with trade clearances and
settlement, shall not constitute borrowing.
(4) A Series may not issue senior securities in contravention of the 1940 Act.
Activities permitted by SEC exemptive orders or staff interpretations shall
not be deemed prohibited by this restriction.
(5) A Series may not underwrite the securities issued by other persons, except
to the extent that, in connection with the disposition of portfolio
securities, a Series may be deemed to be an underwriter under applicable
law.
(6) A Series may not purchase or sell real estate, except that a series may (i)
acquire or lease office space for its own use, (ii) invest in securities of
issuers that invest in real estate or interests therein, (iii) invest in
mortgage-related securities and other securities that are secured by real
estate or interests therein, (iv) hold and sell real estate acquired by the
Series as a result of the ownership of securities.
(7) A Series may not purchase or sell commodities or commodity contracts,
except a Series may purchase and sell derivatives (including, but not
limited to, options, futures contracts and options on futures contracts)
whose value is tied to the value of a financial index or a financial
instrument or other asset (including, but not limited to, securities
indices, interest rates, securities, currencies and physical commodities).
(8) A Series may not make loans, except that a Series may (i) lend portfolio
securities, (ii) enter into repurchase agreements, (iii) purchase all or a
portion of an issue of debt securities, bank loan participation interests,
bank certificates of deposit, bankers' acceptances, debentures or other
securities, whether or not the purchase is made upon the original issuance
of the securities, and (iv) participate in an interfund lending program
with other registered investment companies.
If any percentage restriction described above for the Series is adhered to at
the time of investment, a subsequent increase or decrease in the percentage
resulting from a change in the value of the Series' assets will not constitute a
violation of the restriction.
COMPARATIVE INFORMATION ON DISTRIBUTION ARRANGEMENTS
MULTIPLE CLASS STRUCTURE
Each series currently offers three classes of shares: Class A, Class B and
Class C shares.
In the proposed reorganization, you will receive the corresponding class of
shares of the Surviving Series in exchange for your shares in the Merged Series.
The reorganization will be effected at net asset value. No sales charge will be
imposed on your shares. For purposes of calculating the contingent deferred
sales charge that you may pay when you dispose of any Class B or Class C shares
acquired as a result of the reorganization, the length of time you hold shares
in the Surviving Series will be added to the length of time you held shares in
the Merged Series. If you acquire Class B or Class C shares as a result of the
reorganization, you will continue to be subject to a contingent deferred sales
charge upon subsequent redemption to the same extent as if you had continued to
hold your shares of the Merged Series.
The shares of the various classes are offered under the following
arrangements:
CLASS A SHARES (CURRENTLY OFFERED BY BOTH SERIES)
o Are offered to the public at net asset value plus a maximum sales charge
of 5.75% of the offering price (6.10% of the amount invested). The sales
charge may be reduced or waived under certain conditions.
24
o Are not subject to any charges when redeemed (except that, with respect to
the Merged Series, a contingent deferred sales charge of 1% is imposed on
redemptions within the first 12 months on purchases of $1 million or more
if originally purchased without an initial sales charge).
o Have lower distribution and service fees (0.25% with respect to the
Surviving Series and 0.30% with respect to the Merged Series) and pay
higher dividends than Class B and Class C shares.
CLASS B SHARES (CURRENTLY OFFERED BY BOTH SERIES)
o Are offered to the public at net asset value with no sales charge at the
time of purchase.
o Are subject to a sales charge of up to 5.00% of the shares' value if they
are redeemed within the first year after purchase. This charge declines to
0% over a period of five years (six years with respect to the Merged
Series) and may be waived under certain conditions.
o Will automatically convert to Class A shares eight years after purchase
(seven years for Class B shares of the Merged Series).
o Have higher distribution and service fees (1.00%) and pay lower dividends
than Class A shares.
CLASS C SHARES (CURRENTLY OFFERED BY BOTH SERIES)
o Are offered to the public at net asset value with no sales charge at the
time of purchase.
o Are subject to a sales charge of 1.00% (1.25% with respect to the Merged
Series) if they are redeemed within the first year after they are
purchased.
o Have the same distribution and service fees (1.00%) as Class B shares and
pay comparable dividends.
o Class C shares do not convert to any other class of shares of the
Surviving Series.
DISTRIBUTION PLANS
Phoenix Equity Planning Corporation serves as the distributor
("Distributor") of shares for both the Surviving Series and the Merged Series.
The Acquiring Trust has adopted a distribution plan for each class of shares of
the Acquiring Trust under Rule 12b-1 under the 1940 Act relating to the sale and
promotion of the Surviving Series' shares.
Under the Acquiring Trust's distribution plan, the Surviving Series
compensates the Distributor 0.75% of the average daily value of the net assets
of Class B and Class C shares. In addition, the Distributor is paid 0.25%
annually of the average daily net assets of each class of shares (including
Class A) for providing services to the shareholders, including assistance in
connection with inquiries related to shareholder accounts.
The Trust has also adopted distribution plans pursuant to Rule 12b-1 on
behalf of the Class A, Class B and Class C shares of the Merged Series
(collectively, the "Trust Plans"). Under the Trust Plans, each class of shares
of the Merged Series pays a distribution fee based on average daily net assets
at the following rate: for Class A Shares at a rate of 0.05% per annum; for
Class B Shares at a rate of 0.75% per annum; for Class C Shares at a rate of
0.75% per annum. In addition, the Merged Series pays the Distributor 0.25%
annually of the average daily net assets of each class of Merged Series shares
as compensation for providing services to the shareholders, including assistance
in connection with inquiries related to shareholder accounts.
COMPARATIVE INFORMATION ON SHAREHOLDER SERVICES
Both the Merged Series and the Surviving Series offer the same shareholder
services including a Systematic Withdrawal Program, telephone exchanges,
telephone redemptions and access to Investor-Matic Program, and an automatic
investment program. The Surviving Series distributes net investment income
semi-annually, and distributes net realized capital gains, if any, at least
annually. The Merged Series distributes net investment income annually, and
distributes net realized capital gains, if any, at least annually. All dividends
and distributions with respect to the shares of the Merged Series and the
Surviving Series are paid in additional shares of the respective fund unless
shareholders elect to receive cash. The number of shares received in connection
with any reinvestment
25
of dividends will be based upon the net asset value per share of the Merged
Series and the Surviving Series in effect on the record date.
The Surviving Series and the Merged Series currently offer shareholders
identical exchange privileges. Shareholders of the Merged Series and the
Surviving Series may exchange their shares for shares of a corresponding class
of shares of other affiliated Phoenix funds.
Shares of the Surviving Series and the Merged Series may be redeemed at a
redemption price equal to the net asset value of the shares as next determined
following the receipt of a redemption order and any other required documentation
in proper form. In the case of redemptions of Class B or Class C Shares of both
series, investors will be subject to the applicable determined deferred sales
charges, if any, for such shares. Payment of redemption proceeds for redeemed
Surviving Series and Merged Series shares are generally made within seven days
after receipt of a redemption request in proper form and documentation, provided
that each check used for purchases of shares has been cleared for payment.
Because both the Surviving Series and the Merged Series offer the same
shareholder services, after the closing the same services will continue to be
available to the shareholders of the Merged Series but in their capacity as
shareholders of the Surviving Series.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
The following is a summary of certain provisions of the Declarations of Trust
of each of the Trust and the Acquiring Trust.
FORM OF ORGANIZATION
The Acquiring Trust and the Trust are Delaware Statutory Trusts. The
operations of these trusts are governed by their respective Declarations of
Trust and by Delaware law. Each trust is registered with the SEC as an open-end
management investment company and is subject to the provisions of the 1940 Act
and the rules and regulations of the SEC thereunder. The Trustees of each trust
may generally authorize mergers, consolidations, share exchanges and
reorganizations of a new series or of each respective series with another series
or other business organization.
SHARES
The Declaration of Trust of each trust authorizes the Trustees to create an
unlimited number of series. The Trust has three series; the Acquiring Trust
currently has two series. Each trust may also organize other series in the
future. When issued, the shares are fully paid and non-assessable, have no
preference, preemptive or similar rights unless designated by the Trustees, and
are freely transferable. The assets and proceeds received by each trust from the
issue or sale of shares of a series or class are allocated to that series and
constitute the rights of that series, subject only to the rights of creditors.
Any underlying assets of a series or class are required to be segregated on the
books of account of each trust. These assets are to be used to pay the expenses
of the series or class as well as a share of the general expenses of each trust.
MEETINGS
The Trustees or President of each trust may call shareholder meetings as
necessary. To the extent required by the 1940 Act, meetings held for the purpose
of voting on the removal of any trustee shall be called by trustees upon written
request by shareholders holding at least ten percent of the outstanding shares
entitled to vote. Generally, one-third of the shares entitled to vote
constitutes a quorum at a shareholder meeting.
SHAREHOLDER LIABILITY
Unlike the stockholders of a corporation, under certain circumstances
shareholders of a statutory trust may be held personally liable for the debts,
claims or other obligations of a statutory trust. However, each Declaration of
26
Trust limits shareholder liability. Each Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust. Each Declaration of Trust provides for indemnification
for any shareholder and any former shareholder who is exposed to liability by
reason of a claim or demand relating to such person being a shareholder. Thus,
the risk of a shareholder incurring financial loss on account of shareholder
liability, which is considered remote, is limited to circumstances in which the
Trust itself would be unable to meet its obligations.
LIABILITY OF TRUSTEES
Each Declaration of Trust provides that trustees will generally be personally
liable only for willful misfeasance, bad faith, gross negligence or reckless
disregard of duties. Each Trust may purchase insurance for trustees to cover
potential liabilities and will generally indemnify a trustee against such
claims. Each Trust may also advance payments to a trustee in connection with
indemnification.
LIQUIDATION OR DISSOLUTION
In the event of the liquidation or dissolution of either series, the trustees
shall distribute the assets of the series to the shareholders, according to
their respective rights, after accounting for the liabilities of the respective
Series.
FISCAL YEAR
The Merged Series operates on a fiscal year which ends December 31. The
Surviving Series operates on a fiscal year which ends August 31.
MANAGEMENT AND OTHER SERVICE PROVIDERS
Responsibility for the overall supervision of each series rests with the
Trustees of each trust. PIC serves as investment advisor to the Surviving Series
and PZA serves as subadvisor to the Surviving Series. PZA also serves as
investment advisor to the Merged Series.
As the investment advisor for the Surviving Series, PIC is responsible for
managing the investment program and the general operations of the Surviving
Series. PZA, as subadvisor to the Surviving Series, is responsible for the
day-to-day management of the Surviving Series' portfolio. PZA, the investment
advisor for the Merged Series, is responsible for managing the Merged Series'
investment program and general operations as well as the day-to-day management
of the Merged Series' portfolio.
A team of equity investment professionals led by Carlton Neel manages the
Merged Series. Mr. Neel is a Senior Vice President of PZA. David Dickerson is
also a member of the equity investment team that manages the Merged Series. Mr.
Dickerson began his investment career at the Zweig companies in 1993.
Messrs. Neel and Dickerson, employees of PZA, the sub-advisor of the
Surviving Series, serve in the same portfolio management capacities with respect
to the Surviving Series as they do with respect to the Merged Series. Since
October 31, 2003, Mr. Neel has served as equity investment team leader for the
Merged Series and for the Surviving Series and Mr. Dickerson is a member of that
team for both series. A team of managers and analysts makes investment and
trading decisions for each series.
Phoenix Equity Planning Corporation serves as financial agent of both series
and, as such, performs administrative, bookkeeping and pricing functions.
Phoenix Equity Planning Corporation also acts as the Transfer Agent for each
trust.
The Bank of New York serves as the custodian of the Trust's assets. State
Street Bank and Trust Company serves as the custodian of the Acquiring Trust's
assets and as a subtransfer agent for each trust.
PricewaterhouseCoopers, LLC serves as independent accountants for both
Series.
27
VOTING INFORMATION
QUORUM AND VOTING REQUIREMENTS
This Prospectus/Proxy Statement is being furnished to the shareholders of the
Merged Series in connection with the solicitation by the Board of Trustees of
the Trust of proxies to be used at the meeting. Shareholders of record of the
Merged Series at the close of business on January 13, 2004 ("Record Date") will
be entitled to vote at the meeting or at any adjournments thereof. As of the
Record Date, ______ Class A, _______ Class B and _______ Class C Shares of the
Merged Series were issued and outstanding.
You can provide voting instructions in any one of four ways:
o THROUGH THE INTERNET - _______________________
o BY TELEPHONE - with a toll-free call to the number listed on the enclosed
Proxy Card(s) and following recorded instructions
o BY MAIL - using the enclosed Proxy Card(s) and postage paid envelope
o IN PERSON - at the Special Meeting
Proxies executed by shareholders may be revoked at any time before they are
exercised by a written revocation received by the Secretary of the Trust, by
properly executing a later-dated proxy or by attending the meeting and voting in
person, by telephone or by the Internet.
We encourage you to vote by Internet or telephone; have your proxy card in
hand, and call the number or go to the website and follow the instructions
there. These voting methods will reduce the time and costs associated with this
proxy solicitation.
THE ACQUIRING TRUST WILL FURNISH, WITHOUT CHARGE, TO ANY SHAREHOLDER, UPON
REQUEST, A COPY OF THE 2003 ANNUAL REPORT AND THE 2003 SEMI-ANNUAL REPORT. SUCH
REQUESTS MAY BE DIRECTED TO PHOENIX EQUITY PLANNING CORPORATION, 56 PROSPECT
STREET, P. O. BOX 150480, HARTFORD, CONNECTICUT 06115. SHAREHOLDERS MAY ALSO
CALL PHOENIX EQUITY PLANNING CORPORATION TOLL-FREE AT (800) 243-4361.
The Board knows of no business, other than that mentioned in the Notice of
Special Meeting, that will be presented for consideration at the Special
Meeting. If any other matter is properly presented, it is the intention of the
persons named on the enclosed proxy cards to vote in accordance with their best
judgment.
Shareholders are entitled to one vote for each dollar of net asset value
(determined as of the Record Date) of each share owned by such shareholder
(number of shares owned times net asset value per share) and each fractional
dollar amount shall be entitled to a proportionate fractional vote. Shareholders
of the Merged Series will vote together as a single class on the reorganization
proposal. A majority of the shares entitled to vote shall constitute a quorum
for the meeting. The affirmative vote of a majority of the outstanding voting
securities of the Trust (i.e., the lesser of (i) 67% or more of the eligible
votes of the Merged Series represented at the meeting if more than 50% of the
eligible votes of the Merged Series are present in person or by proxy or (ii)
more than 50% of the eligible votes of the Merged Series) must approve the
herein contemplated merger. For purposes of determining the presence of a quorum
for transacting business at the meeting and for determining whether sufficient
votes have been received for approval of the proposal to be acted upon at the
meeting, abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are present at the meeting, but which have not
been voted. For this reason, abstentions and broker non-votes will assist the
Merged Series in obtaining a quorum, but both have the practical effect of a
"no" vote for purposes of obtaining the requisite vote for approval of the
proposal.
28
If either (a) a quorum is not present at the meeting or (b) a quorum is
present but sufficient votes in favor of the reorganization proposal have not
been obtained, then the persons named as proxies may propose one or more
adjournments of the meeting without further notice to shareholders to permit
further solicitation of proxies provided such persons determine, after
consideration of all relevant factors, including the nature of the proposal, the
percentage of votes then cast, the percentage of negative votes then cast, the
nature of the proposed solicitation activities and the nature of the reasons for
such further solicitation, that an adjournment and additional solicitation is
reasonable and in the interests of shareholders. The persons named as proxies
will vote those proxies that such persons are required to vote FOR the
reorganization proposal in favor of such an adjournment and will vote those
proxies required to be voted AGAINST the reorganization proposal against such
adjournment.
The meeting may be adjourned from time to time by the vote of a majority of
the shares represented at the meeting, whether or not a quorum is present. If
the meeting is adjourned to another time or place, notice need not be given of
the adjourned meeting at which the adjournment is taken, unless a new record
date of the adjourned meeting is fixed or unless the adjournment is for more
than sixty (60) days from the date set for the original meeting, in which case
the Trustees shall set a new record date. Notice of any such adjourned meeting
shall be given to each shareholder of record entitled to vote at the adjourned
meeting in accordance with the provisions of the By-Laws of the Trust. At any
adjourned meeting, the Trust may transact any business which might have been
transacted at the original meeting.
The individuals named as proxies on the enclosed proxy card will vote in
accordance with the shareholder's direction, as indicated thereon, if the proxy
card is received and is properly executed. If the shareholder properly executes
a proxy and gives no voting instructions with respect to the reorganization
proposal, the shares will be voted in favor of the reorganization proposal. The
proxies, in their discretion, may vote upon such other matters as may properly
come before the meeting. The Board of Trustees of the Trust is not aware of any
other matters to come before the meeting.
Approval of the reorganization proposal by the shareholders of the Merged
Series is a condition of the consummation of the reorganization. If the
reorganization is not approved, the Merged Series will continue as a series of
the Trust and the Board of Trustees of the Trust may consider other alternatives
in the best interests of the shareholders of the Merged Series.
REVOCATION OF PROXIES
Any shareholder who has given a proxy has the right to revoke the proxy at
any time prior to its exercise:
o by written notice of the proxy's revocation to the Secretary of the Trust
at the above address prior to the meeting;
o by the subsequent execution and return of another proxy card prior to the
meeting;
o by use of any electronic, telephonic or other alternative means authorized
by the Trustees for authorizing the proxy to act; or
o by being present and voting in person at the meeting and giving oral
notice of revocation to the Chairman of the meeting.
NO APPRAISAL RIGHTS
The staff of the SEC has taken the position that any rights to appraisal
arising under state law are preempted by the provisions of the 1940 Act and Rule
22c-1 thereunder, which generally requires that shares of a registered open-end
investment company be valued at their next determined net asset value.
29
SOLICITATION OF PROXIES
In addition to solicitation of proxies by mail, officers and employees of
Phoenix Investment Partners, Ltd., or its affiliates, may solicit proxies
personally or by telephone or telegram. Phoenix Investment Partners, Ltd., or
other representatives of the Trust, may also use one or more proxy solicitation
firms to assist with the mailing and tabulation effort and any special personal
solicitation of proxies. Banks, brokers, fiduciaries and nominees will, upon
request, be reimbursed by Phoenix Investment Partners, Ltd. for their reasonable
expenses in sending proxy material to beneficial owners of shares of the Merged
Series. The cost of the solicitation of proxies will be borne by Phoenix
Investment Partners, Ltd.
If a shareholder wishes to participate in the meeting, but does not wish to
authorize the execution of a proxy by telephone, the shareholder may still
submit the proxy card included with this proxy statement or attend the meeting
in person.
OWNERSHIP OF VOTING SECURITIES
Based on holdings and total shares outstanding as of January 13, 2004, the
Trustees and officers of the Trust owned as a group less than 1% of the
outstanding voting securities of the Merged Series. If the reorganization were
consummated as of January 13, 2004, the Trustees and officers of the Trust would
own less than 1% of the outstanding voting securities of the combined Surviving
Series based on their holdings and total shares outstanding as of January 13,
2004.
The following table contains information about all persons who own
beneficially or of record 5% or more of the outstanding shares of the Merged
Series, Surviving Series, or the combined Surviving Series assuming consummation
of the reorganization, based on holdings and total shares outstanding as of
January 13, 2004.
- -----------------------------------------------------------------------------------------------------------
NAME AND ADDRESS OF PERCENT OF MERGED SERIES PERCENT OF SURVIVING SERIES PERCENT OF COMBINED
SHAREHOLDER CLASS OWNED CLASS OWNED SURVIVING SERIES CLASS
OWNED
- --------------------- ---------------------------- ------------------------------- ------------------------
- -----------------------------------------------------------------------------------------------------------
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES OF THE
TRUST, RECOMMENDS YOU APPROVE THE PLAN OF REORGANIZATION.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE FILL IN, DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE
IS NECESSARY IF IT IS MAILED IN THE UNITED STATES. IN THE ALTERNATIVE, WE
ENCOURAGE YOU TO VOTE USING THE TELEPHONE OR INTERNET.
ADDITIONAL INFORMATION ABOUT THE SERIES
Additional information about the Surviving Series and the Acquiring Trust is
included in the Surviving Series' Prospectus accompanying this document and is
incorporated by reference herein. Further information about the Surviving Series
and the Acquiring Trust is included in the Statement of Additional information
for the Surviving Series, dated December 31, 2003, which has been filed with the
SEC and is incorporated by reference herein. A copy of the Surviving Series'
Statement of Additional Information may be obtained without charge by contacting
Phoenix Equity Planning Corporation at 56 Prospect Street, P.O. Box 150480,
Hartford, Connecticut 06115-0480, or by telephoning Phoenix Equity Planning
Corporation toll-free at 1-800-243-4361.
Additional information about the Merged Series is included in the current
Prospectus of the Merged Series, dated May 1, 2003, as supplemented. A copy of
the Merged Series Prospectus has been filed with the SEC, and is incorporated by
reference herein. Further information about the Merged Series is included in the
Statement of Additional Information for the Merged Series, dated May 1, 2003, as
supplemented, which also has been filed with the SEC and is incorporated by
reference herein. A copy of the Merged Series' Prospectus and Statement of
Additional Information may be obtained without charge by contacting Phoenix
Equity Planning Corporation at 56
30
Prospect Street, P.O. Box 150480, Hartford, Connecticut 06115-0480, or by
telephoning Phoenix Equity Planning Corporation toll-free at 1-800-243-4361.
MISCELLANEOUS
AVAILABLE INFORMATION
The Acquiring Trust and the Trust are each registered under the 1940 Act and
are subject to the informational requirements of the Securities Exchange Act of
1934, as amended, and the 1940 Act, and, in accordance therewith, file reports,
proxy materials, and other information with the SEC. Such reports, proxy
materials, and other information can be inspected at the Securities and Exchange
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 as
well as at the following regional offices: New York Regional Office, 75 Park
Place, Room 1228, New York, NY 10007; and Chicago Regional Office, Northwestern
Atrium Center, 500 Madison Street, Suite 1400, Chicago, IL 60661. Copies of such
material also can be obtained from the Public Reference Branch, Office of
Consumer Affairs and Information Services, Securities and Exchange Commission,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The SEC
maintains a Web Site (http://www.sec.gov) that contains this Prospectus,
Statement of Additional Information, material incorporated by reference, and
other information regarding registrants that file electronically with the SEC.
PERFORMANCE FOR THE PERIOD ENDING AUGUST 31, 2003
The following table compares investment performance for each Series for the
period ending August 31, 2003 and December 31, 2002 and compares the same
against relevant benchmarks. The series' past performance is not necessarily an
indication of how the series will perform in the future.
AVERAGE ANNUAL TOTAL RETURNS 1 YEAR 5 YEARS LIFE OF THE INCEPTION DATE
- ---------------------------- ------ ------- SERIES --------------
(FOR THE PERIOD ENDING AUGUST 31, 2003) ------
SURVIVING SERIES - SMALL CAP VALUE
o Class A 18.76% 16.23% 9.91% 11/20/97
o Class B 17.88% 15.37% 9.09% 11/20/97
o Class C 17.88% 15.37% 9.09% 11/20/97
o Russell 2000 Value Stock Index(1) 23.68% 12.32% 7.23% 11/20/97
o S&P 500 Total Return Index(2) 12.09% 2.50% 2.33% 11/20/97
(1) The Russell 2000 Value Stock Index measures the total-return performance
of those Russell 2000 companies with lower price-to-book ratios and lower
forecasted growth values. The index is not available for direct investment.
(2) The S&P 500 Total Return Index is an unmanaged, commonly used measure of
stock total performance which includes net dividends reinvested. The index is
not available for direct investments.
AVERAGE ANNUAL TOTAL RETURNS 1 YEAR 5 YEARS 10 YEARS LIFE OF THE INCEPTION DATE
- ---------------------------- ------ ------- -------- SERIES --------------
(FOR THE PERIOD ENDING JUNE 30, 2003) ------
MERGING SERIES - PHOENIX APPRECIATION FUND
o Class A (2.56)% (0.79)% 6.74% ---- 10/08/01
o Class B (3.20)% (1.45)% 4.45% 04/08/96
o Class C (3.20)% (1.46)% 5.99% 02/03/92
o Russell 2000 Stock Index(1) (Small Cap) (1.64)% 0.97% 8.24%
o Russell 2000 Stock Index --- --- --- 5.71% 04/08/96
o S&P 500 Total Return Index(2) 0.26% (1.59)% 10.08%
o S&P 500 Total Return Index --- --- --- 7.58% 04/08/96
- ----------
31
(1) The Russell 2000 Index measures the total-return performance of the 2000
smallest companies in the Russell 3000 Index.
(2) The S&P 500 Index measures broad stock market total return performance.
The index is unmanaged and not available for direct investment.
GROWTH OF $10,000 (FOR THE PERIODS ENDING AUGUST 29, 2003 AND JUNE 30, 2003,
RESPECTIVELY)
PHOENIX SMALL CAP VALUE FUND - SURVIVING SERIES
YEAR CLASS A CLASS B CLASS C RUSSELL 2000 VALUE S&P 500 TOTAL RETURN
---- ------- ------- ------- STOCK INDEX INDEX
----------- -----
11/20/97 $9,425.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00
08/31/98 7,668.16 8,093.43 8,091.01 8,369.65 10,096.94
08/31/99 10,804.57 11,319.81 11,316.42 9,548.56 14,123.58
08/31/00 17,951.47 18,674.30 18,668.72 10,856.42 16,438.28
08/31/01 15,395.43 15,893.75 15,888.99 12,815.01 12,428.65
08/30/02 13,698.15 14,031.41 14,027.21 12,097.43 10,191.67
08/29/03 16,268.06 16,540.25 16,535.30 14,961.84 11,424.06
PHOENIX APPRECIATION FUND (F/K/A PHOENIX-HOLLISTER APPRECIATION FUND) -
MERGING SERIES
YEAR CLASS A RUSSELL 2000 STOCK S&P 500 TOTAL RETURN
---- ------- INDEX (SMALL CAP)(1) INDEX(2)
-------------------- --------
06/30/93 $ 9,425.00 $10,000.00 $10,000.00
06/30/94 9,895.55 10,440.43 10,133.91
06/30/95 10,906.61 12,535.71 12,779.89
06/28/96 12,911.86 15,530.08 16,117.74
06/30/97 15,173.19 18,065.59 21,719.02
06/30/98 18,823.01 21,047.28 28,299.99
06/30/99 17,093.55 21,363.21 34,726.18
06/30/00 17,186.58 24,423.39 37,301.36
06/29/01 18,183.70 24,562.88 31,766.47
06/28/02 18,567.29 22,451.43 26,053.85
06/30/03 18,092.27 22,082.96 26,122.48
(1) The Russell 2000 Index measures the total return performance of the 2,000
smallest companies in the Russell 3000 Index.
(2) The S&P 500 Index measures broad stock market total return performance.
The Index is unmanaged and not available for direct investment.
This growth of $10,000 chart assumes an initial investment of $10,000 made on
11/20/97 (inception of the Fund). Performance assumes dividends and capital
gains are reinvested. The performance of other share classes will be greater or
less than that shown based on differences in inception dates, fees and sales
charges.
MANAGEMENT DISCUSSION OF SURVIVING SERIES PERFORMANCE
The Phoenix Small Cap Value Fund is designed for long-term investors seeking
capital appreciation. Investors should note that the risks of investing in
small-company stocks may include relatively low trading volumes, a greater
degree of change in earnings, and greater short-term violability.
Reversing their preceding annual performances, all of the major stock indexes
recorded a strong year for the 12 months ended August 31, 2003. The Surviving
Series also rebounded in this market environment. For the fiscal year ended
August 31, 2003, Class A shares rose 18.76%, Class B shares rose 17.88%, and
Class C shares were also up
32
17.88%. For the same period, the Russell 2000 Index(1) rose 29.08%, and the
Russell 2000 Value Index (2) was up 23.68%. The broad-based S&P 500(R) Index(3)
rose 12.09%. All performance figures assume reinvestment of distributions and
exclude the effect of sales charges. Past performance is not a guarantee of
future performance.
During the year under review, technology and more recently telecom sectors
helped the Surviving Series' performance. The Surviving Series' underweight
position in consumer durables and healthcare also added to performance. However,
being overweight in energy and energy service strategies had a negative effect
on the Surviving Series' performance.
Stocks that hurt the Surviving Series' performance during this period
included Boston Communications Group (effected by the loss of the Verizon
contract) and Valassis Communications (effected by the loss of a large coupon
contract). Helping the Surviving Series' performance were WMS Industries
(gambling machine software) and Mastec (trench digger for buried cable and fiber
optics).
The roadmap for the next five to ten years will be similar to what was
experienced between 1975-1982 and we feel that the two-year tailwind of
ever-lower interest rates is over. Investment approaches that rely on index
fund, mega cap stocks, and buy-and-hold-strategies will have difficulty
outperforming. Contrarian ideas, short-term (12-18 months) rentals, and smaller
size companies look appealing. We remain cautiously optimistic.
- ----------
(1) The Russell 2000 Index measures the total-return performance of the 2,000
smallest companies in the Russell 3000 Index.
(2) The Russell 2000 Value Index measures the total-return performance of
those Russell 2000 companies with lower price-to-book ratios and lower
forecasted growth values.
(3) The S&P 500(R) Index measures total-return stock market performance. The
indexes are unmanaged and not available for direct investment.
SECTOR WEIGHTINGS AT AUGUST 31, 2003 (AS A PERCENT OF EQUITY HOLDINGS)
SECTOR PHOENIX SMALL CAP VALUE FUND PHOENIX APPRECIATION FUND
- ------
Health Care $ 30,020,037.00 18.43% $ 17,443,541.00 18.55%
Information Technology $ 28,801,056.00 17.68% $ 16,684,185.00 17.74%
Consumer Discretionary $ 25,407,954.00 15.60% $ 14,689,426.00 15.62%
Industrials $ 24,265,681.00 14.90% $ 13,736,845.00 14.60%
Financials $ 21,574,174.60 13.25% $ 13,132,637.80 13.96%
Energy $ 14,692,987.84 9.02% $ 8,484,041.38 9.02%
Exchange Traded Funds $ 5,820,915.00 3.57% $ 3,352,869.00 3.57%
Utilities $ 5,624,374.00 3.45% $ 3,063,712.00 3.26%
Materials $ 3,871,432.00 2.38% $ 1,940,933.00 2.06%
Consumer Staples $ 2,790,630.00 1.71% $ 1,518,535.00 1.61%
Sum of Equity Holdings $162,869,241.44 100.00% $ 94,046,725.18 100.00%
ASSET MIX AT AUGUST 31, 2003 (AS A PERCENTAGE OF TOTAL ASSETS)
ASSET MIX MERGING SERIES - PHOENIX SURVIVING SERIES - PHOENIX
--------- APPRECIATION FUND SMALL CAP VALUE
----------------- ---------------
Common Stock 88.67% 90.32%
Foreign Common Stock 4.46% 4.54%
REIT 1.40% 1.49%
Short Terms 5.79% 4.15%
Cash and Equivalents -0.34% -0.49%
Total Net Assets 100.00% 100.00%
33
TEN LARGEST HOLDINGS AT AUGUST 31, 2003 (AS A PERCENTAGE OF TOTAL NET ASSETS)
MERGING SERIES - PHOENIX APPRECIATION FUND SURVIVING SERIES - PHOENIX SMALL CAP VALUE FUND
1. Circuit City Stores, Inc. 1.3% 1. Circuit City Stores, Inc. 3.4%
2. Mastec Inc. 1.0% 2. Mastec Inc. 3.1%
3. Lifepoint Hospitals Inc. 1.0% 3. Lifepoint Hospitals Inc. 2.9%
4. King Pharm. 1.0% 4. King Pharm. 2.6%
5. Sirius Satellite Radio, Inc. 0.9% 5. Sirius Satellite Radio, Inc. 2.5%
6. Dycom Industries, Inc. 0.9% 6. Dycom Industries, Inc. 2.4%
7. Pharmaceutical Resources, Inc. 0.7% 7. Pharmaceutical Resources, Inc. 2.3%
8. Concurrent Computers 0.7% 8. Concurrent Computers 2.2%
9. Ishares Japan IDX FD 0.7% 9. Ishares Japan IDX FD 2.1%
10. Ishares Hong Kong 0.6% 10. Ishares Hong Kong 2.0%
LEGAL MATTERS
Certain legal matters in connection with the issuance of the shares of the
Surviving Series will be passed upon by Matthew A. Swendiman, Esq.
ADDITIONAL FINANCIAL INFORMATION
The tables set forth below present certain financial information for the
Surviving Series. The financial highlights for each year ended August 31 are
derived from the Surviving Series' audited financial statements for that year.
The data should be read in conjunction with the audited financial statements and
related notes, which are included in the Statement of Additional Information
related to this Prospectus/Proxy Statement.
34
SURVIVING SERIES
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A
-------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
-------------------------------------------------------------------------
2003 2002 2001 2000 1999
Net asset value, beginning of period $11.30 $12.72 $17.90 $11.41 $ 8.11
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) ----(5) (0.01) (0.05) (0.08) 0.01
Net realized and unrealized gain (loss) 2.12 (1.39) (2.34) 7.38 3.31
---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 2.12 (1.40) (2.39) 7.30 3.32
---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends from net investment income ---- ---- ---- ---- ----
Dividends from net realized gains ---- (0.02) (2.79) (0.81) (0.02)
---------- ---------- ---------- ---------- ----------
TOTAL DISTRIBUTIONS ---- (0.02) (2.79) (0.81) (0.02)
---------- ---------- ---------- ---------- ----------
Change in net asset value 2.12 (1.42) (5.18) 6.49 3.30
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $13.42 $11.30 $12.72 $17.90 $11.41
========== ========== ========== ========== ==========
Total return(2) 18.76% (11.02)% (14.24)% 66.15% 40.90%
RATIOS/SUPPLEMENTAL DATA:
Net investment, end of period (thousands) $76,783 $83,005 $88,174 $79,254 $26,926
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) 1.40%(4) 1.40%(4) 1.40%(4) 1.40%(4) 1.40%
Net investment income (loss) 0.04% (0.11)% (0.39)% (0.45)% 0.15%
Portfolio turnover 241% 123% 229% 191% 203%
(1) Computed using average shares outstanding.
(2) Maximum sales charges are not reflected in the total return calculation.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.71%,
1.64%, 1.58%, 1.67% and 1.87% for the periods ended August 31, 2003, 2002,
2001, 2000 and 1999, respectively.
(4) The ratio of operating expenses to average net assets excludes the effect
of expense offsets for custodian fees; if expense offsets were included,
the ratio would not significantly differ.
(5) Amount is less than $0.01.
35
SURVIVING SERIES
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS B
-------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
-------------------------------------------------------------------------
2003 2002 2001 2000 1999
Net asset value, beginning of period $10.85 $12.31 $17.54 $11.27 $ 8.07
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.08) (0.10) (0.16) (0.19) (0.06)
Net realized and unrealized gain (loss) 2.02 (1.34) (2.28) 7.27 3.28
---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 1.94 (1.44) (2.44) 7.08 3.22
---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends from net investment income ---- ---- ---- ---- ----
Dividends from net realized gains ---- (0.02) (2.79) (0.81) (0.02)
---------- ---------- ---------- ---------- ----------
TOTAL DISTRIBUTIONS ---- (0.02) (2.79) (0.81) (0.02)
---------- ---------- ---------- ---------- ----------
Change in net asset value 1.94 (1.46) (5.23) 6.27 3.20
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $12.79 $10.85 $12.31 $17.54 $11.27
========== ========== ========== ========== ==========
Total return(2) 17.88% (11.72)% (14.89)% 64.97% 39.86%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $40,696 $40,382 $40,270 $26,625 $9,494
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) 2.15%(4) 2.15%(4) 2.15%(4) 2.15%(4) 2.15%
Net investment income (loss) (0.71)% (0.86)% (1.14)% (1.20)% 0.60%
Portfolio turnover 241% 123% 229% 191% 203%
(1) Computed using average shares outstanding.
(2) Maximum sales charges are not reflected in the total return calculation.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.46%, 2.39%,
2.33%, 2.42% and 2.62% for the periods ended August 31, 2003, 2002, 2001, 2000
and 1999, respectively.
(4) The ratio of operating expenses to average net assets excludes the effect of
expense offsets for custodian fees; if expense offsets were included, the ratio
would not significantly differ.
36
SURVIVING SERIES
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS C
-------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
-------------------------------------------------------------------------
2003 2002 2001 2000 1999
Net asset value, beginning of period $10.85 $12.31 $17.54 $11.27 $ 8.07
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.08) (0.10) (0.16) (0.19) (0.06)
Net realized and unrealized gain (loss) 2.02 (1.34) (2.28) 7.27 3.28
---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 1.94 (1.44) (2.44) 7.08 3.22
---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends from net investment income ---- ---- ---- ---- ----
Dividends from net realized gains ---- (0.02) (2.79) (0.81) (0.02)
---------- ---------- ---------- ---------- ----------
TOTAL DISTRIBUTIONS ---- (0.02) (2.79) (0.81) (0.02)
---------- ---------- ---------- ---------- ----------
Change in net asset value 1.94 (1.46) (5.23) 6.27 3.20
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $12.79 $10.85 $12.31 $17.54 $11.27
========== ========== ========== ========== ==========
Total return(2) 17.88% (11.72)% (14.89)% 64.97% 39.86%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousand) $51,559 $49,201 $45,450 $28,046 $6,465
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) 2.15%(4) 2.15%(4) 2.15%(4) 2.15%(4) 2.15%
Net investment income (loss) (0.71)% (0.86)% (1.14)% (1.20)% 0.60%
Portfolio turnover 241% 123% 229% 191% 203%
(1) Computed using average shares outstanding.
(2) Maximum sales charges are not reflected in the total return calculation.
(3) If the adviser had not waived fees and reimbursed expenses, the ratio of
operating expenses to average net assets would have been 2.46%, 2.39%,
2.33%, 2.42% and 2.62% for the periods ended August 31, 2003, 2002, 2001,
2000 and 1999, respectively.
(4) The ratio of operating expenses to average net assets excludes the effect of
expense offsets for custodian fees; if expense offsets were included, the
ratio would not significantly differ.
FUTURE SHAREHOLDER MEETINGS
As a Delaware Statutory Trust, the Trust does not hold shareholder meetings,
unless required by the 1940 Act. Other than this meeting, the Trust does not
anticipate holding any future meetings of shareholders in that should
shareholder approval of the reorganization described herein and of the
reorganizations of the Trust's other series be obtained, the Trust will be
dissolved.
OTHER BUSINESS
The Board of Trustees of the Trust knows of no business to be brought before
the meeting other than the matters set forth in this Prospectus/Proxy Statement.
Should any other matter requiring a vote of Merged Series' shareholders arise,
however, the proxies will vote thereon according to their best judgment in the
interests of the Merged Series and the shareholders of the Merged Series.
By Order of the Board of Trustees,
RICHARD J. WIRTH
SECRETARY
Hartford, Connecticut
_________, 2004
37
Exhibit A
AGREEMENT AND PLAN OF REORGANIZATION
------------------------------------
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this ____ day of __________, 2003, by and between Phoenix Investment Trust 97
(the "Investment Trust 97"), a Delaware Statutory Trust with its principal place
of business at 101 Munson Street, Greenfield, Massachusetts 01301, on behalf of
the Phoenix Small Cap Value f/k/a Phoenix-Hollister Small Cap Value Fund (the
"Surviving Series"), a portfolio series thereof, and the Phoenix Trust (formerly
known as the Phoenix-Zweig Trust) (the "Phoenix Trust"), a Delaware Statutory
Trust with a principal place of business at 900 Third Avenue, 31st Floor, New
York, New York 10022, on behalf of the Phoenix Appreciation Fund f/k/a
Phoenix-Hollister Appreciation Fund (the "Merging Series"), a portfolio series
thereof. For the purposes hereof, all references in this Agreement to action
taken by the Surviving Series or the Merging Series shall be deemed to refer to
action taken by the Investment Trust 97 or the Phoenix Trust, on behalf of the
respective portfolio series and all references to the "Trust(s)" shall
collectively refer to the Investment Trust 97 and the Phoenix Trust.
RECITALS
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1) of the
United States Internal Revenue Code of 1986, as amended (the "Code") and the
regulations thereunder. The reorganization (the "Reorganization") will consist
of the transfer of all or substantially all of the assets of the Merging Series
to the Surviving Series in exchange solely for corresponding Class A, Class B
and Class C shares of beneficial interest in the Surviving Series (the
"Surviving Series Shares"), the assumption by the Surviving Series of all
liabilities of the Merging Series, and the distribution of the Surviving Series
Shares to the shareholders of the Merging Series in complete liquidation of the
Merging Series as provided herein, all upon the terms and conditions hereinafter
set forth in this Agreement.
The Merging Series and the Surviving Series are separate series of
Phoenix Trust and Investment Trust 97, respectively, which are open-end,
registered investment companies of the management type. The Merging Series owns
securities that generally are assets of the character in which the Surviving
Series is permitted to invest. The Trustees of the Investment Trust 97,
including a majority of the trustees thereof who are not interested persons, as
such term is defined pursuant to the Investment Company Act of 1940, as amended
(the "1940 Act") have determined that participation in the Reorganization is in
the best interests of the Surviving Series and its shareholders and that the
interests of the existing shareholders of the Surviving Series would not be
diluted as a result of effecting this transaction.
The Trustees of the Phoenix Trust, including a majority of the trustees
thereof who are not interested persons, as such term is defined pursuant to the
1940 Act, have also determined that participation in the Reorganization is in
the best interests of the Merging Series and its shareholders and that the
interests of the existing shareholders of the Merging Series would not be
diluted as a result of effecting this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE MERGING SERIES TO THE SURVIVING SERIES IN
EXCHANGE FOR THE SURVIVING SERIES SHARES, THE ASSUMPTION OF ALL MERGING SERIES
LIABILITIES AND THE LIQUIDATION OF THE MERGING SERIES.
38
1.1 Subject to the requisite approval of the Merging Series shareholders
and the other terms and conditions herein set forth and on the basis of the
representations and warranties contained herein, the Merging Series agrees to
transfer all of the Merging Series' assets, as set forth in paragraph 1.2, to
the Surviving Series, and the Surviving Series agrees in exchange therefor: (i)
to deliver to the Merging Series the number of full and fractional Surviving
Series Shares, determined by dividing the value of the Merging Series' net
assets, computed in the manner and as of the time and date set forth in
paragraph 2.1, by the net asset value of one Surviving Series Share, computed in
the manner and as of the time and date set forth in paragraph 2.2; and (ii) to
assume all liabilities of the Merging Series, as set forth in paragraph 1.3.
Such transactions shall take place on the next business day following the
closing provided for in paragraph 3.1 (the "Closing Date").
1.2 The assets of the Merging Series to be acquired by the Surviving
Series shall consist of all assets and property, including, without limitation,
all cash, securities, commodities and futures interests, and dividends or
interest receivable, that are owned by the Merging Series, and any deferred or
prepaid expenses shown as an asset on the books of the Merging Series on the
Closing Date (collectively, the "Assets").
1.3 The Merging Series will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Surviving Series
shall also assume all of the liabilities of the Merging Series, whether accrued
or contingent, known or unknown, existing at the Valuation Date, as defined in
paragraph 2.1 (collectively, the "Liabilities"). On or as soon as practicable
prior to the Closing Date, the Merging Series will declare and pay to its
shareholders of record one or more dividends and/or other distributions so that
it will have distributed substantially all (and in no event less than 98%) of
its investment company taxable income and realized net capital gain, if any, for
the current taxable year through the Closing Date.
1.4 Immediately after the transfer of Assets provided for in paragraph
1.1, the Merging Series will distribute to the Merging Series' shareholders of
record, determined as of immediately after the close of business on the Closing
Date (the "Merging Series Shareholders"), on a pro rata basis, the Surviving
Series Shares received by the Merging Series pursuant to paragraph 1.1, and will
completely liquidate. Such distribution and liquidation will be accomplished,
with respect to the Merging Series' shares, by the transfer of the Surviving
Series Shares then credited to the account of the Merging Series on the books of
the Surviving Series to open accounts on the share records of the Surviving
Series in the names of the Merging Series Shareholders. The aggregate net asset
value of Surviving Series Shares to be so credited to Merging Series
Shareholders shall be equal to the aggregate net asset value of the Merging
Series' shares owned by such shareholders on the Closing Date. All issued and
outstanding shares of the Merging Series will simultaneously be canceled on the
books of the Merging Series.
1.5 Ownership of Surviving Series Shares will be shown on the books of the
Surviving Series or its transfer agent, as defined in paragraph 3.3.
1.6 Any reporting responsibility of the Merging Series including, but not
limited to, the responsibility for filing of regulatory reports, tax returns, or
other documents with the U.S. Securities and Exchange Commission (the
"Commission"), any state securities commission, and any federal, state or local
tax authorities or any other relevant regulatory authority, is and shall remain
the responsibility of the Merging Series.
39
2. VALUATION
2.1 The value of the Assets shall be the value computed as of immediately
after the close of business of the New York Stock Exchange and after the
declaration of any dividends on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), using the valuation procedures
established by the Surviving Series' Board of Trustees, which shall be described
in the then-current prospectus and statement of additional information with
respect to the Surviving Series.
2.2 The net asset value of Surviving Series Shares shall be the net asset
value per share computed as of the Valuation Date, using the valuation
procedures established by the Surviving Series' Board of Trustees which shall be
described in the Surviving Series' then-current prospectus and statement of
additional information.
2.3 The number of Surviving Series Shares to be issued (including
fractional shares, if any) in exchange for the Assets shall be determined by
dividing the value of the net assets with respect to the shares of the Merging
Series determined using the same valuation procedures referred to in paragraph
2.1, by the net asset value of a Surviving Series Share, determined in
accordance with paragraph 2.2.
2.4 All computations of value shall be made by Phoenix Equity Planning
Corporation, in its capacity as financial agent for both the Investment Trust 97
and the Phoenix Trust.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be March 26, 2004, or such other date as the
parties may agree. All acts taking place at the closing of the transaction (the
"Closing") shall be deemed to take place simultaneously as of immediately after
the close of business on the Closing Date unless otherwise agreed to by the
parties. The close of business on the Closing Date shall be as of 4:00 p.m.,
Eastern Time. The Closing shall be held at the offices of the Phoenix Life
Insurance Company, One American Row, Hartford, CT 06102 or at such other time
and/or place as the parties may agree.
3.2 The Phoenix Trust shall direct The Bank of New York, as custodian for
the Merging Series (the "Custodian"), to deliver, on the next business day after
the Closing, a certificate of an authorized officer stating that (i) the Assets
have been delivered in proper form to the Surviving Series, and (ii) all
necessary taxes in connection with the delivery of the Assets, including all
applicable federal and state stock transfer stamps, if any, have been paid or
provision for payment has been made. The Merging Series' portfolio securities
represented by a certificate or other written instrument shall be presented for
examination by the Custodian to State Street Bank and Trust Company, as the
custodian for the Surviving Series, no later than on the next business day
following the Closing Date, and shall be transferred and delivered by the
Merging Series on the next business day following the Closing Date for the
account of the Surviving Series duly endorsed in proper form for transfer in
such condition as to constitute good delivery thereof. The Custodian shall
deliver on the next business day following the Closing Date by book entry, in
accordance with the customary practices of such depositories and the Custodian,
the Merging Series' portfolio securities and instruments deposited with a
securities depository, as defined in Rule 17f-4 under the 1940 Act. The cash to
be transferred by the Merging Series shall be delivered by wire transfer of
federal funds on the next business day following the Closing Date.
3.3 The Phoenix Trust shall direct Phoenix Equity Planning Corporation
(the "Transfer Agent"), on behalf of the Merging Series, to deliver on the next
business day following the Closing, a certificate by an authorized officer
stating that its records contain the names and addresses of the Merging Series
Shareholders, and the number and percentage ownership of outstanding shares
owned by each such shareholder immediately prior to the Closing. The Surviving
Series shall issue and deliver a confirmation evidencing the Surviving Series
Shares to be credited on the Closing Date to the Secretary of the
40
Surviving Series, or provide evidence satisfactory to the Merging Series that
such Surviving Series Shares have been credited to the Merging Series' account
on the books of the Surviving Series. At the Closing, each party shall deliver
to the other such bills of sale, checks, assignments, share certificates, if
any, receipts or other documents as such other party or its counsel may
reasonably request.
3.4 In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Surviving Series or the Merging Series shall be closed to trading or trading
thereupon shall be restricted, or (b) trading or the reporting of trading on
such Exchange or elsewhere shall be disrupted so that, in the judgment of the
Board of Trustees of the Trusts, accurate appraisal of the value of the net
assets of the Surviving Series or the Merging Series, respectively, is
impracticable, the Closing Date shall be postponed until the first Friday after
the day when trading shall have been fully resumed and reporting shall have been
restored.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Phoenix Trust, on behalf of the Merging Series, represents and
warrants to the Investment Trust 97 as follows:
(a) The Merging Series is duly organized as a series of the Phoenix
Trust, which is a Statutory Trust duly organized, validly existing and in good
standing under the laws of the State of Delaware, with power under the Phoenix
Trust's Agreement and Declaration of Trust, as amended ("Declaration of Trust"),
to own all of its Assets and to carry on its business as it is now being
conducted;
(b) The Phoenix Trust is a registered investment company classified as
a management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act, and the registration of
shares of the Merging Series under the Securities Act of 1933, as amended ("1933
Act"), is in full force and effect;
(c) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the Merging Series of
the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act")
and the 1940 Act and such as may be required by state securities laws;
(d) The current prospectus and statement of additional information of
the Merging Series conforms or conformed at the time of its use in all material
respects to the applicable requirements of the 1933 Act and the 1940 Act and the
rules and regulations of the Commission thereunder, and does not or did not at
the time of its use include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not materially misleading;
(e) On the Closing Date, the Phoenix Trust, on behalf of the Merging
Series, will have good and marketable title to the Assets and full right, power
and authority to sell, assign, transfer and deliver such Assets hereunder free
of any liens or other encumbrances, and upon delivery and payment for such
Assets, the Investment Trust 97, on behalf of the Surviving Series, will acquire
good and marketable title thereto, subject to no restrictions on the full
transfer thereof, including such restrictions as might arise under the 1933 Act,
other than as disclosed to the Surviving Series;
(f) The Merging Series is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of the Phoenix Trust's Declaration of Trust or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the Phoenix
Trust, on behalf of the Merging Series, is a party or by which it is bound, or
(ii) the acceleration of any obligation, or the imposition of any penalty, under
any agreement, indenture,
41
instrument, contract, lease, judgment or decree to which the Phoenix Trust, on
behalf of the Merging Series, is a party or by which it is bound;
(g) All material contracts or other commitments of the Merging Series
(other than this Agreement and certain investment contracts, including options,
futures and forward contracts) will terminate without liability to the Merging
Series on or prior to the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted by the
Investment Trust 97, on behalf of the Surviving Series, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or, to its knowledge, threatened against
the Phoenix Trust, on behalf of the Merging Series, or any of its properties or
assets that, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business. The Phoenix Trust, on behalf
of the Merging Series, knows of no facts or circumstances, which, individually
or in the aggregate, with the passage of time or the giving of notice (or both)
would form the basis for the institution of such proceedings, and is not a party
to or subject to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business or its
ability to consummate the transactions herein contemplated or that does or could
lead to a claim under existing directors and officers errors and omissions
coverage;
(i) The Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets, and Schedule of Investments of the Merging Series at
December 31, 2002, have been audited by PricewaterhouseCoopers, LLP ("PwC"),
independent accountants, and are in accordance with generally accepted
accounting principles ("GAAP") consistently applied, and such statements present
fairly, in all material respects, the financial condition of the Merging Series
as of such date in accordance with GAAP, and there are no known contingent
liabilities of the Merging Series required to be reflected on a balance sheet
(including the notes thereto) in accordance with GAAP as of such date not
disclosed therein;
(j) Since December 31, 2002, there has not been any material adverse
change in the Merging Series' financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Merging Series of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Surviving Series. For the purposes of this subparagraph (j),
a decline in net asset value per share of the Merging Series due to declines in
market values of securities in the Merging Series' portfolio, the discharge the
Liabilities, or the redemption of Merging Series' shares by shareholders of the
Merging Series shall not constitute a material adverse change;
(k) On the Closing Date, all Federal and other tax returns, dividend
reporting forms and other tax-related reports of the Merging Series required by
law to have been filed by such date (including any extensions) shall have been
filed and are or will be correct in all material respects, and all Federal and
other taxes shown as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made for the payment
thereof, and to the best of the Merging Series' knowledge, no such return is
currently under audit and no assessment has been asserted with respect to such
returns;
(l) For each taxable year of its operation (including the taxable year
ending on the Closing Date), the Merging Series has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a regulated
investment company, has been (or will be) eligible to compute and has computed
(or will compute) its federal income tax under Section 852 of the Code, and will
have distributed all of its investment company taxable income and net capital
gain (as defined in the Code) that has accrued through the Closing Date, and
before the Closing Date will have declared dividends sufficient
42
to distribute all of its investment company taxable income and net capital gain
for the period ending on the Closing Date;
(m) All issued and outstanding shares of the Merging Series are, and
on the Closing Date will be, duly and validly issued and outstanding, will be
fully paid and non-assessable and have been offered and sold in every state and
the District of Columbia in compliance in all material respects with applicable
registration requirements of the 1933 Act and state securities laws. All of the
issued and outstanding shares of the Merging Series will, at the time of
Closing, be held by the persons and in the amounts set forth in the records of
the Transfer Agent, on behalf of the Merging Series, as provided in paragraph
3.3. Except for (x) the right of Class B shares of the Merged Series to
automatically convert into Class A shares of the Merged Series seven years after
purchase, or (y) in connection with any automatic dividend reinvestment plan
available to the Merged Series' shareholders, The Merging Series does not have
outstanding any options, warrants or other rights to subscribe for or to
purchase any of the shares of the Merging Series, nor is there outstanding any
security convertible into any of the Merging Series shares;
(n) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary action, if
any, on the part of the Trustees of the Phoenix Trust, on behalf of the Merging
Series, and, subject to the approval of the shareholders of the Merging Series,
this Agreement will constitute a valid and binding obligation of the Merging
Series, enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(o) The information to be furnished by the Merging Series for use in
registration statements, proxy materials and other documents filed or to be
filed with any federal, state or local regulatory authority (including the
NASD), which may be necessary in connection with the transactions contemplated
hereby, shall be accurate and complete in all material respects and shall comply
in all material respects with Federal securities and other laws and regulations
thereunder applicable thereto;
(p) The proxy statement of the Merging Series (the "Proxy Statement")
to be included in the Registration Statement referred to in paragraph 5.6,
insofar as it relates to the Merging Series, will, on the effective date of the
Registration Statement and on the Closing Date (i) not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not materially misleading
provided, however, that the representations and warranties in this subparagraph
(p) shall not apply to statements in or omissions from the Proxy Statement and
the Registration Statement made in reliance upon and in conformity with
information that was furnished by the Surviving Series for use therein, and (ii)
comply in all material respects with the provisions of the 1933 Act, the 1934
Act and the 1940 Act and the rules and regulations thereunder; and
(q) Any person who acts as legal counsel for the disinterested
directors of the Phoenix Trust is an independent legal counsel as such term is
defined under applicable law.
4.2 The Investment Trust 97, on behalf of the Surviving Series, represents
and warrants as follows:
(a) The Surviving Series is duly organized as a series of the
Investment Trust 97, which is a Statutory Trust duly organized, validly existing
and in good standing under the laws of the State of Delaware with power under
the Investment Trust 97's Declaration of Trust to own all of its assets and to
carry on its business as it is now being conducted;
43
(b) The Investment Trust 97 is a registered investment company
classified as a management company of the open-end type, and its registration
with the Commission as an investment company under the 1940 Act and the
registration of shares of the Surviving Series under the 1933 Act, is in full
force and effect;
(c) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the Surviving Series
of the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act and such as may be required by state
securities laws;
(d) The current prospectus and statement of additional information of
the Surviving Series conforms or conformed at the time of its use in all
material respects to the applicable requirements of the 1933 Act and the 1940
Act and the rules and regulations of the Commission thereunder and does not or
did not at the time of its use include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not materially misleading;
(e) On the Closing Date, the Investment Trust 97, on behalf of the
Surviving Series, will have good and marketable title to the Surviving Series'
assets, free of any liens of other encumbrances, except those liens or
encumbrances as to which the Merging Series has received notice and necessary
documentation at or prior to the Closing;
(f) The Surviving Series is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of the Investment Trust 97's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
the Investment Trust 97, on behalf of the Surviving Series, is a party or by
which it is bound, or (ii) the acceleration of any obligation, or the imposition
of any penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which the Investment Trust 97, on behalf of the Surviving
Series, is a party or by which it is bound;
(g) Except as otherwise disclosed in writing to and accepted by the
Phoenix Trust, on behalf of the Merging Series, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or, to its knowledge, threatened against the Investment Trust
97, on behalf of the Surviving Series, or any of the Surviving Series'
properties or assets that, if adversely determined, would materially and
adversely affect the Surviving Series' financial condition or the conduct of the
Surviving Series' business. The Investment Trust 97, on behalf of the Surviving
Series, knows of no facts or circumstances which, individually or in the
aggregate, with the passage of time or the giving of notice (or both) might form
the basis for the institution of such proceedings and is not a party to or
subject to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects the Surviving Series'
business or the Surviving Series' ability to consummate the transactions herein
contemplated or that does or could lead to a claim under existing directors and
officers errors and omissions coverage;
(h) The Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets and Schedule of Investments of the Surviving Series at
August 31, 2003, have been audited by PwC, independent accountants, and are in
accordance with GAAP consistently applied, and such statements (copies of which
have been furnished to the Merging Series) present fairly, in all material
respects, the financial condition of the Surviving Series as of such date in
accordance with GAAP, and there are no known contingent liabilities of the
Surviving Series required to be reflected on a balance sheet (including the
notes thereto) in accordance with GAAP as of such date not disclosed therein;
44
(i) Since August 31, 2003, there has not been any material adverse
change in the Surviving Series' financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Surviving Series of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Merging Series. For purposes of this subparagraph (i), a
decline in net asset value per share of the Surviving Series due to declines in
market values of securities in the Surviving Series' portfolio, the discharge of
Surviving Series' liabilities, or the redemption of Surviving Series Shares by
shareholders of the Surviving Series, shall not constitute a material adverse
change;
(j) On the Closing Date, all Federal and other tax returns, dividend
reporting forms, and other tax-related reports of the Surviving Series required
by law to have been filed by such date (including any extensions) shall have
been filed and are or will be correct in all material respects, and all Federal
and other taxes shown as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made for the payment
thereof, and to the best of the Surviving Series' knowledge no such return is
currently under audit and no assessment has been asserted with respect to such
returns;
(k) For each taxable year of its operation (including the taxable year
including the Closing Date), the Surviving Series has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a regulated
investment company has been eligible to compute and has computed (or will
compute) its federal income tax under Section 852 of the Code;
(l) All issued and outstanding shares of the Surviving Series are, and
on the Closing Date will be, duly and validly issued and outstanding, will be
fully paid and non-assessable and have been offered and sold in every state and
the District of Columbia in compliance in all material respects with applicable
registration requirements of the 1933 Act. Except for (x) the right of Class B
shares of the Merged Series to automatically convert into Class A shares of the
Surviving Series seven years after purchase, or (y) in connection with any
automatic dividend reinvestment plan available to the Surviving Series'
shareholders, the Surviving Series does not have outstanding any options,
warrants or other rights to subscribe for or purchase any shares of the
Surviving Series, nor is there outstanding any security convertible into any
shares of the Surviving Series;
(m) The execution, delivery and performance of this Agreement will
have been fully authorized prior to the Closing Date by all necessary action, if
any, on the part of the Trustees of the Investment Trust 97, on behalf of the
Surviving Series, and this Agreement will constitute a valid and binding
obligation of the Investment Trust 97, on behalf of the Surviving Series,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(n) Surviving Series Shares to be issued and delivered to the Merging
Series, for the account of the Merging Series Shareholders, pursuant to the
terms of this Agreement, will on the Closing Date have been duly authorized and,
when so issued and delivered, will be duly and validly issued Surviving Series
Shares, and will be fully paid and non-assessable;
(o) The information to be furnished by the Investment Trust 97 for use
in the registration statements, proxy materials and other documents filed or to
be filed with any federal, state or local regulatory authority (including the
NASD) that may be necessary in connection with the transactions contemplated
hereby shall be accurate and complete in all material respects and shall comply
in all material respects with Federal securities and other laws and regulations
applicable thereto;
(p) That insofar as it relates to the Surviving Series, the
Registration Statement relating to the Surviving Series Shares issuable
hereunder, and the Proxy Statement to be included in the Registration Statement,
and any amendment or supplement to the foregoing, will, from the effective date
45
of the Registration Statement through the date of the meeting of shareholders of
the Merging Series contemplated therein (i) not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which such statements were made, not misleading provided, however, that the
representations and warranties in this subparagraph (p) shall not apply to
statements in or omissions from the Registration Statement made in reliance upon
and in conformity with information that was furnished by the Merging Series for
use therein, and (ii) comply in all material respects with the provisions of the
1933 Act, the 1934 Act and the 1940 Act and the rules and regulations
thereunder;
(q) The majority of the Trustees of the Investment Trust 97 are not
interested persons of the Investment Trust 97, and those directors select and
nominate any of the disinterested directors of the Investment Trust 97; and
(r) Any person who acts as legal counsel for the disinterested
directors of the Investment Trust 97 is an independent legal counsel as such
term is defined under applicable law.
5. COVENANTS OF THE INVESTMENT TRUST 97 AND THE PHOENIX TRUST, ON BEHALF OF
THE SURVIVING SERIES AND THE MERGING SERIES, RESPECTIVELY
5.1 The Surviving Series and the Merging Series each will operate its
business in the ordinary course between the date hereof and the Closing Date, it
being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions, and any other
distribution that may be advisable.
5.2 The Phoenix Trust will call a meeting of the shareholders of the
Merging Series to consider and act upon this Agreement and to take all other
reasonable action necessary to obtain approval of the transactions contemplated
herein.
5.3 The Investment Trust 97 covenants that the Surviving Series Shares to
be issued hereunder are not being acquired for the purpose of making any
distribution thereof, other than in accordance with the terms of this Agreement.
5.4 Subject to the provisions of this Agreement, the Trusts will each
take, or cause to be taken, all action, and do or cause to be done, all things
reasonably necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement.
5.5 As soon as is reasonably practicable after the Closing, the Merging
Series will make a liquidating distribution to its shareholders consisting of
the Surviving Series Shares received at the Closing.
5.6 The Phoenix Trust will provide the Investment Trust 97 with
information reasonably necessary for the preparation of a registration statement
on Form N-14 to the Merged Series (the "Registration Statement"), such
Registration statement to consist of, without limitation, a prospectus and Proxy
Statement.
5.7 The Phoenix Trust, on behalf of the Merging Series, covenants that it
will, from time to time, as and when reasonably requested by the Investment
Trust 97, on behalf of the Surviving Series, execute and deliver or cause to be
executed and delivered all such assignments and other instruments, and will take
or cause to be taken such further action as the Investment Trust 97, on behalf
of the Surviving Series, may reasonably deem necessary or desirable in order to
carry out the intent and purpose of this
46
Agreement to vest in and confirm (a) the Phoenix Trust's, on behalf of the
Merging Series', title to and possession of the Surviving Series Shares to be
delivered hereunder, and (b) the Investment Trust 97's on behalf of the
Surviving Series', title to and possession of all the Assets.
5.8 The Surviving Series will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act and the 1940 Act as may be
necessary in order to continue its operations after the Closing Date.
5.9 (a) Subject to governing law, until the fifth anniversary of the
Closing Date, the Investment Trust 97, on behalf of itself and any successor
thereto by reason of merger, reorganization, sale or other similar transaction,
shall: (a) continue that certain joint insured bond referred to as Investment
Management Insurance Policy No. 281-35-77 issued by American International
Specialty Lines Insurance Company (such policy, or any replacement thereof
during the operative period referenced above shall hereafter be referred to as
the "D&O/E&O Insurance"), or such greater insurance as the Investment Trust 97
and all other requisite parties to such joint insured bond shall reasonably
determine; and (b) maintain those indemnity provisions as provided in the
current Declaration of Trust of the Investment Trust 97 and By-Laws applicable
with regard to the proper and lawful activities of a trustee (the "Indemnity").
(b) In the event that the D&O/E&O Insurance shall be terminated during
the period transpiring from the Closing Date until the fifth anniversary
thereof, then the Investment Trust 97, individually or together with one or more
parties to the above referenced joint insured bond, will use its best efforts to
procure a directors' and officers errors and omissions insurance policy for the
benefit of the Trustees of the Phoenix Trust, among others, for claims made
against such Trustees during the period stated above, on not less than
substantially the same terms and conditions, including, without limitation,
exclusions from coverage, retention limits and limitations of liability, as
exist for the benefit of such Trustees under the D&O/E&O Insurance Policy
existing as of the Closing Date.
(c) The D&O/E&O Insurance and Indemnity shall apply equally to the
trustees of the Phoenix Trust (constituted as of the date of this Agreement) as
they apply to the trustees of the Investment Trust 97.
(d) Nothing in this Paragraph 5.9 shall be construed as imposing an
obligation on the Investment Trust 97 to take any action to the extent such
action would be prohibited by governing law or the exercise of the fiduciary
duties of the board of trustees of the Investment Trust 97.
(e) In the event that the D&O/E&O Insurance shall be terminated during
the period transpiring from Closing until the fifth anniversary thereof, and the
Investment Trust 97 shall fail or be unwilling to fulfill its obligations
pursuant to clause (b) of this Paragraph 5.9, then Phoenix Investment Counsel,
Inc, the adviser to the Investment Trust 97, individually or together with one
or more parties to the above referenced joint insured bond, will use its best
efforts to procure a directors' and officers errors and omissions insurance
policy for the benefit of the Trustees of the Phoenix Trust, among others, for
claims made against such Trustees during the period stated above, on not less
than substantially the same terms and conditions, including, without limitation,
exclusions from coverage, retention limits and limitations of liability, as
exist for the benefit of such Trustees under the D&O/E&O Insurance Policy
existing as of the Closing Date. The foregoing notwithstanding, in no event
shall Phoenix Investment Counsel, Inc., nor any of its affiliates, subsidiaries,
parent companies, officers, employees or directors, in any way be liable or
otherwise obligated to directly or indirectly indemnify or hold harmless the
Trustees of the Phoenix Trust for any loss, cost or liability (including
attorneys fees) arising in connection with the subject transaction or with
regard to any claims or causes of action as might have been subject to possible
47
coverage pursuant to the above described coverage whether or not such coverage
is available in accordance with the terms of this clause.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE MERGING SERIES
The obligations of the Phoenix Trust, on behalf of the Merging Series, to
consummate the transactions provided for herein shall be subject, at its
election, to the performance by the Investment Trust 97, on behalf of the
Surviving Series, of all the obligations to be performed by it hereunder on or
before the Closing Date, and, in addition thereto, the following further
conditions:
6.1 All representations and warranties of the Investment Trust 97, on
behalf of the Surviving Series, contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Closing Date, with the same force and effect as if made on and as of the Closing
Date;
6.2 The Investment Trust 97, on behalf of the Surviving Series, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by the Investment Trust 97,
on behalf of the Surviving Series, on or before the Closing Date; and
6.3 The Merging Series and the Surviving Series shall have agreed on the
number of full and fractional Surviving Series Shares to be issued in connection
with the Reorganization after such number has been calculated in accordance with
paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SURVIVING SERIES
The obligations of the Investment Trust 97, on behalf of the Surviving
Series, to complete the transactions provided for herein shall be subject, at
its election, to the performance by the Phoenix Trust, on behalf of the Merging
Series, of all of the obligations to be performed by it hereunder on or before
the Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of the Phoenix Trust, on behalf of
the Merging Series, contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date;
7.2 The Phoenix Trust, on behalf of the Merging Series, shall have
delivered to the Surviving Series a statement of the Assets and the Liabilities,
as of the Closing Date, certified by the Treasurer or any Assistant Treasurer of
the Phoenix Trust;
7.3 The Phoenix Trust, on behalf of the Merging Series, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by Phoenix Trust, on behalf
of the Merging Series, on or before the Closing Date;
7.4 The Merging Series and the Surviving Series shall have agreed on the
number of full and fractional Surviving Series Shares to be issued in connection
with the Reorganization after such number has been calculated in accordance with
paragraph 1.1; and
7.5 The Merging Series shall have declared and paid a distribution or
distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its investment company taxable income and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to 4:00
p.m. Eastern time on the Closing Date; and
48
(ii) any undistributed investment company taxable income and net realized
capital gains from any period to the extent not otherwise already distributed.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SURVIVING SERIES AND
THE MERGING SERIES
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to the Phoenix Trust, on behalf of the
Merging Series, or the Investment Trust 97, on behalf of the Surviving Series,
the other party to this Agreement shall, at its option, not be required to
consummate the transactions contemplated by this Agreement:
8.1 The Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of the
Merging Series in accordance with the provisions of the Phoenix Trust's
Declaration of Trust, and applicable Delaware law and the 1940 Act.
Notwithstanding anything herein to the contrary, neither the Phoenix Trust nor
the Investment Trust 97 may waive the conditions set forth in this paragraph
8.1;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending or, to each Trust's knowledge, threatened before any court or
governmental agency in which it is sought to restrain or prohibit, or obtain
damages or other relief in connection with, this Agreement or the transactions
contemplated herein;
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary by
the Phoenix Trust or the Investment Trust 97 to permit consummation, in all
material respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order or permit would
not involve a risk of a material adverse effect on the assets or properties of
the Surviving Series or the Merging Series, provided that either party hereto
may for itself waive any of such conditions;
8.4 The Registration Statement shall have become effective under the 1933
Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act; and
8.5 The parties shall have received the signed opinion of Shearman &
Sterling LLP, addressed to the parties hereto and Phoenix Investment Counsel,
Inc. in the form agreed upon by the parties hereto, substantially to the effect
that, based upon certain facts, and the Officer's Certificate, the transaction
contemplated by this Agreement, will for federal income tax purposes, qualify as
a tax free reorganization described in Section 368(a) of the Code. The delivery
of such opinion is conditioned upon receipt of an Officer's Certificate
substantially in the form agreed upon by the parties.
9. BROKERAGE FEES AND EXPENSES
9.1 The Phoenix Trust, on behalf of the Merging Series, and the Investment
Trust 97, on behalf of the Surviving Series, represent and warrant to each other
that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
9.2 The expenses relating to the proposed Reorganization arising from and
after approval by each respective board of trustees, will be borne by Phoenix
Investment Partners, Ltd. The costs of the Reorganization shall include, but not
be limited to, costs associated with obtaining any necessary order of exemption
from the 1940 Act, preparation of the Registration Statement, printing and
distributing the Surviving Series' prospectus and the Merging Series' proxy
materials, legal fees, accounting fees, securities registration fees, and
expenses of holding shareholders' meetings. Notwithstanding any of the
49
foregoing, expenses will in any event be paid by the party directly incurring
such expenses if and to the extent that the payment by another person of such
expenses would result in the disqualification of such party as a "regulated
investment company" within the meaning of Section 851 of the Code.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Phoenix Trust and the Investment Trust 97 have not made any
representation, warranty or covenant not set forth herein, and this Agreement
constitutes the entire agreement between the parties.
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing shall survive the Closing.
11. TERMINATION
This Agreement may be terminated and the transactions contemplated hereby
may be abandoned by either party: (i) by mutual agreement of the parties, or
(ii) either party if the Closing shall not have occurred on or before
June 30, 2004, unless such date is extended by mutual agreement of the
parties, or (iii) either party if the other party shall have materially breached
its obligations under this Agreement or made a material and intentional
misrepresentation herein or in connection herewith. In the event of any such
termination, this Agreement shall become void and there shall be no liability
hereunder on the part of any party or their respective Trustees or officers,
except for any such material breach or intentional misrepresentation, as to each
of which all remedies at law or in equity of the party adversely affected shall
survive.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be deemed necessary or advisable by the authorized officers of the Phoenix
Trust and the Investment Trust 97; provided, however, that following the meeting
of the shareholders of the Merging Series called by the Phoenix Trust pursuant
to paragraph 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of the Surviving Series
Shares to be issued to the Merging Series Shareholders under this Agreement to
the detriment of such shareholders without their further approval.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
facsimile, personal service or prepaid or certified mail addressed to the
parties hereto at their principal place of business.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
14.1 The Article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
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14.3 This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware without regard to its principles of conflicts
of laws.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
14.5 It is expressly agreed that the obligations of the Phoenix Trust
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Phoenix Trust personally, but shall bind
only the trust property of the Merging Series, as provided in the Declaration of
Trust of the Phoenix Trust. The execution and delivery by such officers of the
Phoenix Trust shall not be deemed to have been made by any of them individually
or to impose any liability on any of them personally, but shall bind only the
trust property of the Merging Series as provided in the Declaration of Trust of
the Phoenix Trust. The Phoenix Trust is a series company with multiple series,
and the Phoenix Trust has entered into this Agreement on behalf of one such
series, the Merging Series. With respect to any obligation of the Phoenix Trust
arising hereunder, the Investment Trust 97 and the Surviving Series shall look
for payment or satisfaction of such obligations solely to the assets and
property of the Merging Series.
14.6 It is expressly agreed that the obligations of the Investment Trust
97 hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Investment Trust 97 personally,
but shall bind only the trust property of the Surviving Series, as provided in
the Declaration of Trust of the Investment Trust 97. The execution and delivery
by such officers of the Investment Trust 97 shall not be deemed to have been
made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Surviving Series as
provided in the Declaration of Trust of the Investment Trust 97. The Investment
Trust 97 is a series company with two portfolio series, and the Investment Trust
97 has entered into this Agreement on behalf of one such series, the Surviving
Series. With respect to any obligation of the Investment Trust 97 arising
hereunder, the Phoenix Trust and the Merging Series shall look for payment or
satisfaction of such obligations solely to the assets and property of the
Surviving Series.
14.7 Except as specifically provided herein, the sole remedy of a party
hereto for a breach of any representation or warranty made in this Agreement by
the other party shall be an election by the non-breaching party not to complete
the transactions contemplated herein as set forth in Sections 6 and 7.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its President or Vice President and its seal to be affixed
thereto and attested by its Secretary or Assistant Secretary.
Attest: PHOENIX INVESTMENT TRUST 97, ON BEHALF
OF THE PHOENIX SMALL CAP VALUE FUND
__________________________________ By: _______________________________
SECRETARY
Title: _______________________________
51
Attest: PHOENIX TRUST, ON BEHALF OF THE PHOENIX
APPRECIATION FUND
__________________________________ By: _______________________________
SECRETARY
Title: _______________________________
Agreed and accepted with respect to
Paragraphs 5.9(c) and 14.7
this ___ day of _______, 2003.
PHOENIX INVESTMENT COUNSEL, INC.
By:______________________________
Name
Title
Agreed and accepted with respect to
Paragraphs 9.2 and 14.7
this ___ day of _______, 2003.
PHOENIX EQUITY PLANNING CORPORATION
By:______________________________
Name
Title
52
PART B
STATEMENT OF ADDITIONAL INFORMATION
Acquisition of the Assets of
PHOENIX APPRECIATION FUND
(f/k/a Phoenix-Hollister Appreciation Fund)
a series of
Phoenix Trust
900 Third Avenue, 31st Floor
New York, NY 10022
(800) 243-1574
By and in Exchange for Shares of
PHOENIX SMALL CAP VALUE FUND
(f/k/a Phoenix-Hollister Small Cap Value Fund)
a series of
Phoenix Investment Trust 97
101 Munson Street
Greenfield, Massachusetts 01301
(800) 243-1574
This Statement of Additional Information, relating specifically to the
proposed transfer of all or substantially all of the assets and certain
identified liabilities of Phoenix Appreciation Fund (the "Appreciation Fund"), a
series of Phoenix Trust, to Phoenix Small Cap Value Fund (the "Small Cap Value
Fund"), in exchange for shares of the corresponding class of the Small Cap Value
Fund, consists of this cover page and the following described documents:
(1) the Statement of Additional Information of the Phoenix Investment
Trust 97, to be filed effective December 31, 2003 via EDGAR with Form N-1A with
Post-Effective Amendment No. 17 and to be incorporated by reference (to be filed
by Amendment);
(2) the Statement of Additional Information of the Phoenix Trust, as
filed via EDGAR on Form N-1A on April 28, 2003 with Post-Effective Amendment No.
55, and supplements dated June 24, 2003, September 17, 2003 and November 13,
2003 to the Prospectus dated May 1, 2003, and incorporated by reference (to be
filed by Amendment);
(3) the Annual Report of the Phoenix Investment Trust 97 for the year
ended August 31, 2003 as filed via EDGAR on Form N-CSR on November 4, 2003, and
incorporated by reference (to be filed by Amendment);
(4) the Annual Report of the Phoenix Trust for the year ended
December 31, 2002 as filed via EDGAR on Form N-30D on March 5, 2003, and
incorporated by reference (to be filed by Amendment);
1
(5) the Semi-Annual Report of the Phoenix Trust for the six-month
period ended June 30, 2003 as filed via EDGAR on Form N-CSRS on September 5,
2003 and incorporated by reference (to be filed by Amendment); and
(6) the Pro Forma Financial Statements, filed herewith.
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the Prospectus/Proxy
Statement dated _________ ___, 2004. A copy of the Prospectus/Proxy Statement
may be obtained without charge by contacting Phoenix Equity Planning Corporation
("Equity Planning") at 56 Prospect Street, P. O. Box 150480, Hartford, CT
06115-0480 or by telephoning Equity Planning toll free at 1(800) 243-4361.
The date of this Statement of Additional Information is _________ ___, 2004.
2
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Statement of Additional Information of the Phoenix Investment Trust 97,
dated December 31, 2003 (to be filed by Amendment)....................... B-
Statement of Additional Information of
Phoenix Trust, as supplemented dated
May 1, 2003 (to be filed by Amendment)................................... B-
Annual Report of Phoenix Investment Trust 97
for the year ended August 31, 2003 (to be filed by Amendment)............ B-
Annual Report of Phoenix Trust
for the year ended December 31, 2002 (to be filed by Amendment).......... B-
Semi-Annual Report of Phoenix Trust for
the six-month period ended June 30, 2003
(to be filed by Amendment)................................................. B-
Pro Forma Financial Statements............................................. B-
3
Phoenix Small Cap Value Fund/Phoenix Appreciation Fund
Pro Forma Combining Schedule of Investments
August 31, 2003 (Unaudited)
Shares or
Par Value Value
=============== ============ =========== ============================================= =============== ============ ==============
Phoenix Phoenix Pro Forma Phoenix Phoenix Pro Forma
Small Cap Value Appreciation Combining DESCRIPTION Small Cap Value Appreciation Combining
Fund Fund Portfolios Fund Fund Portfolios
=============== ============ =========== ============================================= =============== ============ ==============
COMMON STOCKS--85.6%
23,400 - 23,400 Accredited Home Lenders Holding Co. 376,506 - 376,506
822,600 484,900 1,307,500 ADC Telecommunications, Inc. 2,089,404 1,231,646 3,321,050
42,000 24,700 66,700 Advanced Fibre Communications, Inc. 977,340 574,769 1,552,109
30,400 10,600 41,000 Arbitron, Inc. 1,124,192 391,988 1,516,180
22,500 13,100 35,600 Atrix Laboratories, Inc. 679,500 395,620 1,075,120
404,500 238,400 642,900 Avanex Corp. 1,921,375 1,132,400 3,053,775
73,900 41,100 115,000 Black Hills Corp. 2,395,099 1,332,051 3,727,150
262,700 154,500 417,200 Brocade Communications Systems, Inc. 1,481,628 871,380 2,353,008
323,100 190,300 513,400 Charter Communications, Inc. Class A 1,453,950 856,350 2,310,300
219,400 126,000 345,400 Chesapeake Energy Corp. 2,378,296 1,365,840 3,744,136
557,200 327,900 885,100 Circuit City Stores, Inc. 5,811,596 3,419,997 9,231,593
156,900 64,300 221,200 CMS Energy Corp. 1,046,523 428,881 1,475,404
153,500 89,200 242,700 Coinstar, Inc. 2,353,155 1,367,436 3,720,591
- 36,700 36,700 Colonial BancGroup, Inc. (The) - 537,655 537,655
1,042,000 597,000 1,639,000 Concurrent Computer Corp. 3,657,420 2,095,470 5,752,890
465 266 731 Cross Timbers Royalty Trust 10,382 5,951 16,333
70,100 41,300 111,400 Digene Corp. 2,664,501 1,569,813 4,234,314
123,600 72,700 196,300 Dollar Thrifty Automotive Group, Inc. 2,935,500 1,726,625 4,662,125
11,600 6,200 17,800 DRS Technologies, Inc. 301,600 161,200 462,800
182,200 104,500 286,700 Dycom Industries, Inc. 4,126,830 2,366,925 6,493,755
17,900 10,300 28,200 EDO Corp. 367,308 211,356 578,664
15,700 9,100 24,800 Edwards (A.G.), Inc. 565,200 327,600 892,800
73,700 43,400 117,100 Euronet Worldwide, Inc. 744,370 438,340 1,182,710
141,600 82,500 224,100 Exact Sciences Corp. 2,384,544 1,389,300 3,773,844
227,700 134,400 362,100 Finisar Corp. 489,555 288,960 778,515
87,500 51,500 139,000 First Charter Corp. 1,616,125 951,205 2,567,330
283,400 166,800 450,200 GlobespanVirata, Inc. 2,156,674 1,269,348 3,426,022
57,500 32,700 90,200 Harris Corp. 1,909,000 1,085,640 2,994,640
12,900 7,200 20,100 Hasbro, Inc. 238,650 133,200 371,850
88,500 50,300 138,800 Herley Industries, Inc. 1,747,875 993,425 2,741,300
91,700 53,000 144,700 Human Genome Sciences, Inc. 1,305,808 754,720 2,060,528
19,600 11,300 30,900 Hutchinson Technology, Inc. 619,948 357,419 977,367
28,800 16,400 45,200 ICN Pharmaceuticals, Inc. 504,000 287,000 791,000
16,800 10,000 26,800 IDACORP, Inc. 407,232 242,400 649,632
210,200 134,200 344,400 Internet Security Systems, Inc. 2,625,398 1,676,158 4,301,556
68,600 38,100 106,700 iStar Financial, Inc. 2,514,876 1,396,746 3,911,622
572,000 330,000 902,000 JDS Uniphase Corp. 1,967,680 1,135,200 3,102,880
49,100 28,500 77,600 Jones Apparel Group, Inc. 1,516,699 880,365 2,397,064
109,900 64,900 174,800 Key Energy Services, Inc. 1,138,564 672,364 1,810,928
308,600 178,600 487,200 King Pharmaceuticals, Inc. 4,335,830 2,509,330 6,845,160
33,500 19,800 53,300 Leapfrog Enterprises, Inc. 1,256,250 742,500 1,998,750
171,600 98,900 270,500 LifePoint Hospitals, Inc. 4,943,796 2,849,309 7,793,105
70,800 40,800 111,600 Lyondell Chemical Co. 1,012,440 583,440 1,595,880
549,400 316,000 865,400 MasTec, Inc. 5,263,252 3,027,280 8,290,532
33,400 19,400 52,800 Maverick Tube Corp. 567,466 329,606 897,072
81,900 48,300 130,200 Mentor Corp. 1,892,709 1,116,213 3,008,922
74,200 42,700 116,900 Mercury General Corp. 3,241,056 1,865,136 5,106,192
80,000 26,000 106,000 MPS Group, Inc. 764,000 248,300 1,012,300
64,900 38,500 103,400 National-Oilwell, Inc. 1,270,742 753,830 2,024,572
24,400 14,500 38,900 Newfield Exploration Co. 958,676 569,705 1,528,381
243,300 140,200 383,500 Northwest Airlines Corp. 2,182,401 1,257,594 3,439,995
125,800 72,400 198,200 Oakley, Inc. 1,369,962 788,436 2,158,398
80,000 32,900 112,900 Olin Corp. 1,456,800 599,109 2,055,909
55,900 32,100 88,000 Palm, Inc. 1,020,175 585,825 1,606,000
54,100 32,100 86,200 Patterson-UTI Energy, Inc. 1,614,344 957,864 2,572,208
94,900 56,000 150,900 Penwest Pharmaceuticals Co. 2,076,412 1,225,280 3,301,692
69,300 39,900 109,200 Pharmaceutical Resources, Inc. 3,876,642 2,232,006 6,108,648
41,300 24,500 65,800 Pharmacopeia, Inc. 505,925 300,125 806,050
74,800 44,700 119,500 Pioneer Natural Resources Co. 1,896,928 1,133,592 3,030,520
64,800 38,700 103,500 PNM Resources, Inc. 1,775,520 1,060,380 2,835,900
51,000 26,100 77,100 Quicksilver Resources, Inc. 1,262,250 645,975 1,908,225
552,600 300,700 853,300 Rite Aid Corp. 2,790,630 1,518,535 4,309,165
30,100 17,500 47,600 Ross Stores, Inc. 1,516,438 881,650 2,398,088
62,900 37,200 100,100 Rowan Cos., Inc. 1,575,016 931,488 2,506,504
102,800 55,600 158,400 RPM International, Inc. 1,402,192 758,384 2,160,576
704,100 413,500 1,117,600 Sapient Corp. 2,217,915 1,302,525 3,520,440
49,300 28,400 77,700 Scottish Annuity & Life Holdings Ltd. 1,132,914 652,632 1,785,546
35,390 20,770 56,160 Seacoast Banking Corporation of Florida 620,740 364,306 985,046
2,531,900 1,370,200 3,902,100 Sirius Satellite Radio, Inc. 4,202,954 2,274,532 6,477,486
360,500 214,200 574,700 Skechers U.S.A., Inc. Class A 2,757,825 1,638,630 4,396,455
31,600 16,300 47,900 Spinnaker Exploration Co. 702,152 362,186 1,064,338
83,300 48,400 131,700 Stanley Works (The) 2,521,491 1,465,068 3,986,559
78,100 44,700 122,800 Sybase, Inc. 1,320,671 755,877 2,076,548
34,700 19,900 54,600 Talbots, Inc. (The) 1,272,449 729,733 2,002,182
12,200 15,700 27,900 TCF Financial Corp. 561,078 722,043 1,283,121
78,400 45,200 123,600 Terex Corp. 1,811,040 1,044,120 2,855,160
22,000 12,900 34,900 Texas Regional Bancshares, Inc. 741,400 434,730 1,176,130
62,300 36,000 98,300 Triad Hospitals, Inc. 2,018,520 1,166,400 3,184,920
40,200 22,100 62,300 Valueclick Inc. 371,850 204,425 576,275
123,600 71,200 194,800 W Holding Co., Inc. 2,180,304 1,255,968 3,436,272
179,200 104,000 283,200 Western Digital Corp. 2,059,008 1,194,960 3,253,968
62,200 36,700 98,900 WMS Industries, Inc. 1,489,690 878,965 2,368,655
62,800 36,000 98,800 XTO Energy, Inc. 1,318,172 755,640 2,073,812
73,200 42,400 115,600 Yellow Corp. 2,052,528 1,188,896 3,241,424
-------------- ------------ ------------
TOTAL COMMON STOCKS 145,784,856 84,185,271 229,970,127
FOREIGN COMMON STOCKS--4.5%
306,500 177,100 483,600 Bookham Technology plc ADR 407,645 235,543 643,188
24,800 14,100 38,900 Everest Re Group Ltd. 1,817,840 1,033,530 2,851,370
39,500 23,000 62,500 Montpelier Re Holdings Ltd. 1,211,070 705,180 1,916,250
51,700 30,100 81,800 Platinum Underwriters Holdings Ltd. 1,403,655 817,215 2,220,870
121,800 70,900 192,700 Shire Pharmaceuticals Group plc ADR 2,831,850 1,648,425 4,480,275
-------------- ------------ ------------
TOTAL FOREIGN COMMON STOCKS 7,672,060 4,439,893 12,111,953
EXCHANGE TRADED FUNDS--5.5%
374,800 215,900 590,700 iShares MSCI Hong Kong Index Fund 3,395,688 1,956,054 5,351,742
432,700 249,240 681,940 iShares MSCI Japan Index Fund 3,591,410 2,068,692 5,660,102
217,900 125,500 343,400 iShares MSCI Taiwan Index Fund 2,425,227 1,396,815 3,822,042
-------------- ------------ ------------
TOTAL EXCHANGE TRADED FUNDS 9,412,325 5,421,561 14,833,886
CONVERTIBLE BONDS--0.0%
- 1,677 1,677 TIMCO Aviation Services, Inc. Cv - - -
-------------- ------------ ------------
TOTAL CONVERTIBLE BONDS - - -
SHORT-TERM OBLIGATIONS--4.8%
2,030,000 - 2,030,000 ABSC Capital Corp. 1.08%, 9/25/03 2,028,417 - 2,028,417
1,275,000 - 1,275,000 ABSC Capital Corp. 1.10%, 9/4/03 1,274,805 - 1,274,805
- 1,830,000 1,830,000 ABSC Capital Corp. 1.11%, 9/4/03 - 1,829,887 1,829,887
- 1,350,000 1,350,000 Federal Home Loan Mortgage Corp.
1.02%, 9/2/03 - 1,349,962 1,349,962
- 400,000 400,000 Federal Home Loan Mortgage Corp.
1.05%, 9/4/03 - 399,977 399,977
1,645,000 - 1,645,000 FHLB 1.03%, 9/24/03 1,644,241 - 1,644,241
- 230,000 230,000 International Lease Finance Corp.
1.04%, 9/9/03 - 229,953 229,953
- 1,955,000 1,955,000 UBS Finance Delware LLC 1.06%, 9/4/03 - 1,954,885 1,954,885
2,055,000 - 2,055,000 UBS Finance Delware LLC 1.09%, 9/2/03 2,054,813 - 2,054,813
-------------- ----------- ------------
TOTAL SHORT-TERM OBLIGATIONS 7,002,276 5,764,664 12,766,940
TOTAL INVESTMENTS--100.4% 169,871,517 99,811,389 269,682,906
(Identified cost $144,168,734, $86,814,067
and $230,982,801)
Other assets and liabilities, net---(0.4)% (833,342) (334,600) (1,167,942)
-------------- ----------- ------------
NET ASSETS--100.0% $ 169,038,175 $ 99,476,789 $ 268,514,964
============== =========== ============
See Notes to Pro Forma Financial Statements
Phoenix Small Cap Value Fund/Phoenix Appreciation Fund
Pro Forma Combining Statement of Assets and Liabilities
August 31, 2003 (Unaudited)
============== ============== ============== ==============
Phoenix Small Phoenix Pro Forma
Cap Value Appreciation Adjustments Combining
Fund Fund Portfolios
============== ============== ============== ==============
ASSETS
Investment securities at value
(Identified cost $144,168,734, $86,814,067, and $230,982,801) $ 169,871,517 99,811,389 $ 269,682,906
Receivables
Investment securities sold 2,007,262 2,869,292 4,876,554
Fund shares sold 312,486 3,101 315,587
Interest and dividends 110,710 68,446 179,156
Receivable from advisor 45 - 45
Prepaid expenses 4,184 2,416 6,600
------------- ------------- ---------- --------------
Total assets 172,306,204 102,754,644 - 275,060,848
------------- ------------- ---------- --------------
LIABILITIES
Payables
Cash Overdraft 3,804 250,402 254,206
Payable to advisor - 529 529
Investment securities purchased 2,716,381 2,745,192 5,461,573
Fund shares repurchased 194,770 54,388 249,158
Investment advisory fee 90,258 74,806 165,064
Distribution Fee 90,153 46,545 136,698
Transfer Agent fee 94,154 33,509 127,663
Financial agent fee 12,119 5,425 17,544
Trustees' fee 2,276 6,142 8,418
Accrued expenses 64,114 60,917 125,031
------------- ------------- ---------- --------------
Total liabilities 3,268,029 3,277,855 - 6,545,884
------------- ------------- ---------- --------------
NET ASSETS $ 169,038,175 99,476,789 - $ 268,514,964
============= ============= ========== =============
CLASS A
Shares of beneficial interest outstanding 5,723,406 5,559,028 (897,303)(a) 10,385,131
Net assets $ 76,782,705 $ 62,539,657 $ 139,322,362
Net asset value per share $ 13.42 $ 11.25 $ 13.42
Offering price per share NAV/(1-5.75%) $ 14.24 $ 11.94 $ 14.24
CLASS B
Shares of beneficial interest outstanding 3,181,889 719,188 (110,709)(a) 3,790,368
Net assets $ 40,696,246 $ 7,782,422 $ 48,478,668
Net asset value per share $ 12.79 $ 10.82 $ 12.79
CLASS C
Shares of beneficial interest outstanding 4,031,754 2,687,588 (416,137)(a) 6,303,205
Net assets $ 51,559,224 $ 29,047,971 $ 80,607,195
Net asset value per share $ 12.79 $ 10.81 $ 12.79
CLASS I
Shares of beneficial interest outstanding 9,231
Net assets $ 106,739
Net asset value per share $ 11.56
(a) Adjustment reflects additional shares issued in conversion.
See Notes to Pro Forma Financial Statements.
Phoenix Small Cap Value Fund/Phoenix Appreciation Fund
Pro Forma Combining Statement of Operations
September 1, 2002 through August 31, 2003 (Unaudited)
================== ================ =============== =================
Phoenix Phoenix Pro Forma
Small Cap Value Appreciation Adjustments Combining
Fund Fund Portfolios
================== ================ =============== =================
INVESTMENT INCOME
Interest $ 61,042 $ 61,972 $ $ 123,014
Dividends 2,113,493 1,175,666 3,289,159
Foreign taxes withheld (6,024) (3,831) (9,855)
----------------- ----------- --------- ---------------
Total investment income 2,168,511 1,233,807 3,402,318
----------------- ----------- --------- ---------------
EXPENSES
Investment advisory fee 1,358,782 868,699 (86,870) 2,140,611
Service fees - Class A 175,848 159,450 (26,575) 308,723
Distribution and Service fees - Class B 355,780 74,705 0 430,485
Distribution and Service fees - Class C 450,584 260,570 (0) 711,154
Financial agent fee 142,923 57,122 (6,196) (a) 193,849
Transfer agent 509,877 194,408 (15,813) 688,472
Registration 24,732 27,967 (7,412) 45,287
Printing 57,518 33,926 (12,021) 79,423
Professional 33,865 98,357 (100,095) 32,127
Custodian 35,414 44,626 (48,199) 31,841
Trustees 29,296 26,571 (26,041) 29,826
Miscellaneous 20,210 14,876 (18,387) 16,699
----------------- ----------- --------- ---------------
Total expenses 3,194,829 1,861,277 (347,609) (b) 4,708,497
Custodian fees paid indirectly (1,619) - - (1,619)
Less expenses borne by investment advisor (474,776) - (46,514) (521,290)
Management Fee Waiver - (56,867) (c) 56,867 (b) -
----------------- ----------- --------- ---------------
Net expenses 2,718,434 1,804,410 (337,256) 4,185,588
----------------- ----------- --------- ---------------
NET INVESTMENT INCOME (LOSS) (549,923) (570,603) 337,256 (783,270)
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on securities (581,048) 1,611,297 - 1,030,249
Net change in unrealized appreciation (depreciation)
on investments 24,331,903 13,279,538 - 37,611,441
Net gain (loss) on investments 23,750,855 14,890,835 - 38,641,690
----------------- ----------- --------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 23,200,932 $ 14,320,232 $ 337,256 37,858,421
================= =========== ========= ===============
Adjustments:
(a) Fees were adjusted to reflect the application of the fee schedule put into
effect at 1/1/03.
(b) Reflects elimination of target fund contract.
(c) Reflects change of adviser fee waiver of 0.10% effective 1/1/03.
Note: The expenses for Small Cap Value Fund are based on the expense schedule
which became effective 5/1/03.
See Notes to Pro Forma Financial Statements.
PHOENIX-SMALL CAP VALUE FUND/PHOENIX APPRECIATION FUND
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS
AUGUST 31, 2003 (UNAUDITED)
1. BASIS OF COMBINATION
The unaudited Pro Forma Combined Portfolio of Investments, Pro Forma Combined
Statement of Assets and Liabilities and Pro Forma Combined Statement of
Operations give effect to the proposed merger of the Phoenix Appreciation Fund
("Appreciation") into the Phoenix Small Cap Value Fund ("Small Cap Value"). The
proposed merger will be accounted for by the method of accounting for tax-free
mergers of investment companies. The merger provides for the transfer of all or
substantially all of the assets of Appreciation to Small Cap Value and the
subsequent liquidation of Appreciation. The accounting survivor in the proposed
merger will be Small Cap Value. This is because although Appreciation has the
same investment objective as Small Cap Value, the surviving fund will invest in
a style that is similar to the way in which Small Cap Value is currently
operated (including hedging and investment in debt securities). Additionally,
Small Cap Value has a significantly larger asset base than Appreciation.
The pro forma combined statements should be read in conjunction with the
historical financial statements of the constituent fund and the notes thereto
incorporated by reference in the Registration Statement filed on Form N-14. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses. Actual results could differ from those
estimates.
Appreciation and Small Cap Value are both, open-end, management investment
companies registered under the Investment Company Act of 1940, as amended.
2. SHARES OF BENEFICIAL INTEREST
The Pro Forma net asset value per share assumes the issuance of additional
shares of Small Cap Value which would have been issued at August 31, 2003 in
connection with the proposed reorganization. The amount of additional shares
assumed to be issued was calculated based on the net assets, as of August 31,
2003, of Appreciation Class A of $62,539,657 and the net asset value of Small
Cap Value Class A of $13.42; the net assets of Appreciation Class B of
$7,782,422 and the net asset value of Small Cap Value Class B of $12.79; and the
net assets of Appreciation Class C of $29,047,971 and the net asset value of
Small Cap Value Class C of $12.79. The Pro Forma Statement of Assets &
Liabilities reflects the combined Pro Forma shares outstanding as calculated
above.
3. PRO FORMA OPERATIONS
Pro Forma operating expenses include the expenses of Small Cap Value restated to
reflect the expense schedule which became effective May 1, 2003, the actual
expenses of each Appreciation and the combined Fund, with certain expenses
adjusted to reflect the expected expenses of the combined entity. The investment
advisory and financial agent fees have been calculated for the combined Fund
based on the fee schedule in effect for Small Cap Value at the combined level of
average net assets for the period ended August 31, 2003.
4. PORTFOLIO VALUATION
Equity securities are valued at the last sale price, or if there had been no
sale that day, at the last bid price. Debt securities are valued on the basis of
broker quotations or valuations provided by a pricing service which utilizes
information with respect to recent sales, market transactions in comparable
securities, quotations from dealers, and various relationships between
securities in determining value. Short-term investments having a remaining
maturity of 60 days or less are valued at amortized cost which approximates
market. All other securities and assets are valued at fair value as determined
in good faith by or under the direction of the Trustees.
PART C
PHOENIX-INVESTMENT TRUST 97
PART C
OTHER INFORMATION
Item 15. Indemnification
The response to this item is incorporated by reference to Part A of
the Prospectus/Proxy Statement in this Registration Statement under the caption
"Comparative Information on Shareholder Rights-Liability of Trustees."
The Agreement and Plan of Reorganization provides:
5.9 (a) Subject to governing law, until the fifth anniversary of
the Closing Date, the Investment Trust 97, on behalf of itself and any successor
thereto by reason of merger, reorganization, sale or other similar transaction,
shall: (a) continue that certain joint insured bond referred to as Investment
Management Insurance Policy No. 281-35-77 issued by American International
Specialty Lines Insurance Company (such policy, or any replacement thereof
during the operative period referenced above shall hereafter be referred to as
the "D&O/E&O Insurance"), or such greater insurance as the Investment Trust 97
and all other requisite parties to such joint insured bond shall reasonably
determine; and (b) maintain those indemnity provisions as provided in the
current Declaration of Trust of the Investment Trust 97 and ByLaws applicable
with regard to the proper and lawful activities of a trustee (the "Indemnity").
(b) In the event that the D&O/E&O Insurance shall be terminated
during the period transpiring from the Closing Date until the fifth anniversary
thereof, then the Investment Trust 97, individually or together with one or more
parties to the above referenced joint insured bond, will use its best efforts to
procure a directors' and officers errors and omissions insurance policy for the
benefit of the Trustees of the Phoenix Trust, among others, for claims made
against such Trustees during the period stated above, on not less than
substantially the same terms and conditions, including, without limitation,
exclusions from coverage, retention limits and limitations of liability, as
exist for the benefit of such Trustees under the D&O/E&O Insurance Policy
existing as of the Closing Date.
(c) The D&O/E&O Insurance and Indemnity shall apply equally to the
trustees of the Phoenix Trust (constituted as of the date of this Agreement) as
they apply to the trustees of the Investment Trust 97.
Item 16. Exhibits
(1) Agreement and Declaration of Trust of the Registrant, dated August 17,
2000, filed via EDGAR with Post-Effective Amendment No. 6 (File
No. 333-34537) on December 15, 2000 and incorporated by reference.
(2) Bylaws of the Registrant filed via EDGAR with Post-Effective Amendment
No. 6 on December 15, 2000 and incorporated by reference.
(3) Not Applicable.
(4) Agreement and Plan of Reorganization (included as Exhibit A to the
Prospectus/Proxy Statement contained in Part A of this Registration
Statement).
(5) Reference is hereby made to Registrant's Agreement and Declaration of
Trust referenced in Exhibit 1 above and Registrant's Bylaws
referenced in Exhibit 2 above.
(6) *Amended and Restated Investment Advisory Agreement between Registrant
and Phoenix Investment Counsel, Inc. dated November 20, 2002 covering
Phoenix Small Cap Fund and Phoenix Value Equity Fund, to be filed
effective December 31, 2003 via EDGAR with Form N-1A with Post-
Effective Amendment No. 17 and to be incorporated by reference (to be
filed by Amendment.)
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(7)(a) Underwriting Agreement between Registrant and Phoenix Equity Planning
Corporation ("Equity Planning") dated November 19, 1997 filed as
Exhibit 6.1via EDGAR with Post-Effective Amendment No. 1 on May 15,
1998 and incorporated by reference.
(7)(b) *Updated Form of Sales Agreement between Phoenix Equity Planning
Corporation and dealers, to be filed effective December 31, 2003 via
EDGAR with Form N-1A with Post-Effective Amendment No. 17 and to be
incorporated by reference (to be filed by Amendment).
(7)(c) Form of Financial Institutional Sales Contract for the Phoenix Family
of Funds filed as Exhibit 6.4 via EDGAR with Post-Effective Amendment
No. 1 on May 15, 1998 and incorporated by reference.
(8) Not Applicable.
(9)(a) Master Custodian Contract between Registrant and State Street Bank and
Trust Company dated May 1, 1997 filed as Exhibit 8.1 via EDGAR with
Pre-Effective Amendment No. 1 on November 3, 1997 and incorporated by
reference.
(9)(b) *Amendment dated February 10, 2000 to Master Custodian Contract dated
May 1, 1997 between Registrant and State Street Bank and Trust
Company, to be filed effective December 31, 2003 via EDGAR with Form
N-1A with Post-Effective Amendment No. 17 and to be incorporated by
reference (to be filed by Amendment).
(9)(c) *Amendment dated July 2, 2001 to Master Custodian Contract dated May
1, 1997 between Registrant and State Street Bank and Trust Company, to
be filed effective December 31, 2003 via EDGAR with Form N-1A with
Post-Effective Amendment No. 17 and to be incorporated by reference
(to be filed by Amendment).
(9)(d) *Amendment dated May 10, 2002 to Master Custodian Contract dated May
1, 1997 between Registrant and State Street Bank and Trust Company, to
be filed effective December 31, 2003 via EDGAR with Form N-1A with
Post-Effective Amendment No. 17 and to be incorporated by reference
(to be filed by Amendment).
(10)(a) Distribution Plan for Class A Shares filed as Exhibit 15.1 via EDGAR
with Pre-Effective Amendment No. 1 on November 3, 1997 and
incorporated by reference.
(10)(b) *First Amendment of Phoenix Investment Trust 97 Class A Shares Amended
and Restated Distribution Plan, to be filed effective December 31,
2003 via EDGAR with Form N-1A with Post-Effective Amendment No. 17 and
to be incorporated by reference (to be filed by Amendment).
(10)(c) Distribution Plan for Class B Shares filed via EDGAR with
Post-Effective Amendment No. 5 on September 26, 2000 and incorporated
by reference.
(10)(d) Distribution Plan for Class C Shares filed via EDGAR with
Post-Effective Amendment No. 5 on September 26, 2000 and incorporated
by reference.
(10)(e) *Fourth Amended and Restated Plan Pursuant to Rule 18f-3 effective
September 1, 2002, to be filed effective December 31, 2003 via EDGAR
with Form N-1A with Post-Effective Amendment No. 17 and to be
incorporated by reference (to be filed by Amendment).
(10)(f) *First Amendment to the Fourth Amended and Restated Plan Pursuant to
Rule 18f-3, to be filed effective December 31, 2003 via EDGAR with
Form N-1A with Post-Effective Amendment No. 17 and to be incorporated
by reference (to be filed by Amendment).
(11) Opinion and Consent of Matthew A. Swendiman, Esq. with respect to
legality of the shares being issued (to be filed by Amendment).
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(12) Opinion and Consent of Shearman & Sterling LLP with respect a tax free
reorganization (to be filed by Amendment).
(13)(a) Transfer Agency and Service Agreement between Registrant and Phoenix
Equity Planning Corporation filed as Exhibit 9.1 via EDGAR with
Pre-Effective Amendment No. 1 on November 3, 1997 and incorporated by
reference.
(13)(b) Sub-Transfer Agency Agreement between Phoenix Equity Planning
Corporation and State Street Bank and Trust Company effective June 1,
1994 filed as Exhibit 9.2 via EDGAR with Post-Effective Amendment No.
1 on May 15, 1998 and incorporated by reference.
(13)(c) Amended and Restated Financial Agent Agreement between Registrant and
Phoenix Equity Planning Corporation dated November 19, 1997 filed as
Exhibit 9.3 via EDGAR with Post-Effective Amendment No. 1 on May 15,
1998 and incorporated by reference.
(13)(d) First Amendment to the Amended and Restated Financial Agreement
between Registrant and Phoenix Equity Planning Corporation effective
as of February 27, 1998 filed as Exhibit 9.4 via EDGAR with
Post-Effective Amendment No. 1 on May 15, 1998 and incorporated by
reference.
(13)(e) Second Amendment to Amended and Restated Financial Agent Agreement
between Registrant and Phoenix Equity Planning Corporation dated July
31, 1998 filed as Exhibit 5 via EDGAR with Post-Effective Amendment
No. 2 on October 30, 1998 and incorporated herein by reference.
(13)(f) *Third Amendment to Amended and Restated Financial Agent Agreement
effective January 1, 2003 between Registrant and Phoenix Equity
Planning Corporation, to be filed effective December 31, 2003 via
EDGAR with Form N-1A with Post-Effective Amendment No. 17 and to be
incorporated by reference (to be filed by Amendment).
(13)(g) *Amended and Restated Codes of Ethics of the Trust, Adviser and
Distributor effective November 19, 2003, to be filed effective
December 31, 2003 via EDGAR with Form N-1A with Post-Effective
Amendment No. 17 and to be incorporated by reference (to be filed by
Amendment).
(14) **Consent of PricewaterhouseCoopers LLP, filed herewith.
(15) Not Applicable.
(16) Powers of Attorney filed via EDGAR with Post-Effective Amendment No.
16 on December 30, 2002 and incorporated herein by reference.
(17)(a) **Form of Proxy Card for Phoenix Appreciation Fund, filed herewith.
(17)(b) *Current Prospectus of the Phoenix Investment Trust 97, to be filed
effective December 31, 2003 via EDGAR with Form N-1A with
Post-Effective Amendment No. 17 and to be incorporated by reference
(to be filed by Amendment.)
- --------------------
*To be filed effective December 31, 2003 via EDGAR with Form N-1A with
Post-Effective Amendment No. 17 and to be incorporated by reference.
**Filed herewith.
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is
a part of this Registration Statement by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act of 1933, the reoffering
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prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other
items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to
the registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities
Act of 1933, each post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein, and the
offering of the securities at that time shall be deemed to be the
initial bona fide offering of them.
(3) The undersigned Registrant agrees to file, by post-effective
amendment, an Opinion of Counsel or a copy of an IRS ruling supporting
the tax consequences of the Reorganization within a reasonable time
after receipt of such opinion or ruling.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on behalf of the Registrant in the City
of Hartford and State of Connecticut on the 19th day of December, 2003.
PHOENIX INVESTMENT TRUST 97
By:/s/ Philip R. McLoughlin
------------------------
Name: Philip R. McLoughlin
Title: President
As required by the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated as of the 19th day of December, 2003.
Signature Title
- --------- -----
- ------------------------------ Trustee
E. Virgil Conway*
/s/ Nancy G. Curtiss Treasurer
- ------------------------------ (Principal Financial and Accounting Officer)
Nancy G. Curtiss*
- ------------------------------ Trustee
Harry Dalzell-Payne*
- ------------------------------ Trustee
Francis E. Jeffries*
- ------------------------------ Trustee
Leroy Keith, Jr.*
- ------------------------------ Trustee
Marilyn E. LaMarche*
/s/ Philip R. McLoughlin President and Trustee
- ------------------------------ (Principal Executive Officer)
Philip R. McLoughlin*
- ------------------------------ Trustee
Geraldine M. McNamara*
- ------------------------------ Trustee
Everett L. Morris*
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- ------------------------------ Trustee
James M. Oates*
- ------------------------------ Trustee
Richard E. Segerson*
- ------------------------------ Trustee
Lowell P. Weicker, Jr.*
*By /s/ Philip R. McLoughlin
--------------------------------
*Philip R. McLoughlin, pursuant to powers of attorney, filed via EDGAR with
Post-Effective Amendment No. 16 on December 30, 2002 and incorporated herein by
reference.
S-2
Index To Exhibits
-----------------
(14) Consent of PricewaterhouseCoopers LLP
(17)(a) Form of Proxy Card for the Phoenix Appreciation Fund