As filed with the Securities and Exchange Commission on January 16, 2004
Registration Nos.
=============================================================================
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. ___
--------------------
THE PHOENIX EDGE SERIES FUND
(Exact Name of Registrant as Specified in Charter)
--------------------
c/o Variable Products Operations
Phoenix Life Insurance Company
101 Munson Street, Greenfield, Massachusetts 01301
(Address of Principal Executive Offices)
(800) 541-0171
(Registrants' 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)
--------------------
Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of this Registration Statement.
--------------------
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. 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.
============================================================================
THE PHOENIX EDGE SERIES FUND
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
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; Appendix 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 and Policies; The Proposed
Acquired Reorganization; Comparative Information on Distribution Arrangements;
Comparative Information on Shareholder Services; Comparative Information on
Shareholder Rights; Additional Information About The Funds; Prospectus of the
Registrant dated May 1, 2003
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 _________
13. Additional Information about the See item 12
Company Being Acquired
14. Financial Statements Annual Report of the Registrant for the year ended December 31, 2002;
Semiannual Report of the Registrant for the six-month period ended June 30,
2003; and ProForma Financial Statements for the period ended September 30, 2003
Part C: Other Information
15. Indemnification Indemnification
16. Exhibits Exhibits
17. Undertakings Undertakings
PART A
PHOENIX-JANUS FLEXIBLE INCOME SERIES
A series of
The Phoenix Edge Series Fund
c/o Phoenix Variable Products Mail Operations
P.O. Box 8037
Boston, MA 02266-8027
(800) 541-0171
--------------------------
February ___, 2004
Dear Contract/Policyholder:
The Phoenix-Janus Flexible Income Series (the "Merging Series"), a series of
The Phoenix Edge Series Fund (the "Trust"), will hold a Special Meeting of
Shareholders at 10:00 a.m., local time, on March 17, 2004, at One American Row,
Hartford, Connecticut. At the meeting, Phoenix Life Insurance Company ("PLIC")
and its affiliates will vote on an Agreement and Plan of Reorganization under
which the Merging Series will be combined with the Phoenix-Goodwin Multi-Sector
Fixed Income Series (the "Surviving Series"), another series of the Trust. The
Surviving Series has a similar investment objective to that of the Merging
Series. If the reorganization agreement is implemented, the separate accounts
holding shares of the Merging Series will receive shares of the Surviving Series
with an aggregate value equal to the aggregate net asset value of your
investment in the Merging Series. No sales charge will be imposed in connection
with the reorganization. PLIC will pay all costs of the reorganization. The
reorganization will be conditioned upon receipt of an opinion of counsel
indicating that the reorganization will qualify as a tax-free reorganization for
federal income tax purposes.
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 Merging Series and its
shareholders.
As an owner of a variable annuity or variable life insurance contract issued
by PLIC or one of its affiliated insurance companies ("Phoenix"), you have the
contractual right to instruct the insurance company how to vote the shares of
the Merging Series at this meeting. Although you are not directly a shareholder
of the Merging Series, some of your contract value is invested in the Merging
Series pursuant to your policy or contract. For the limited purposes of this
prospectus and proxy statement, the term "shareholder" refers to you as the
contract/policy owner, unless the context otherwise requires. Therefore, the
Board of Trustees recommends that you vote in favor of the reorganization
agreement. It is very important that you vote and that your vote be received no
later than March 17, 2004. If the voting instructions card is executed and no
direction is made, you will be considered as voting FOR the proposal and, in the
discretion of the insurance company, upon such other business as may properly
come before the Special Meeting.
We have enclosed a copy of the Notice of Special Meeting of Shareholders, the
Proxy Statement and a card entitled "Voting Instructions". 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.
Voting instructions executed by you may be revoked at any time prior to
Phoenix voting the shares represented thereby by your providing Phoenix with a
properly executed written revocation of such voting instructions, or by your
providing Phoenix with proper later dated voting instructions by telephone or by
the Internet.
As a convenience, you can provide voting instructions in any one of four
ways:
THROUGH THE INTERNET - [_________________]
BY TELEPHONE - (___) ___-____
BY MAIL - using the enclosed Voting Instructions Card(s) and postage paid
envelope
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 of
this proxy solicitation. Whichever method you choose, please read the enclosed
proxy statement carefully before you vote.
Your vote on these matters is important. Please complete the Voting
Instructions Card and return it promptly in the envelope provided or vote using
one of the other methods described above. Please respond - in order to avoid the
additional expense of further solicitation, we ask that you vote promptly. It is
important that your policy or contract be represented.
Sincerely,
Philip R. McLoughlin
President
PHOENIX-JANUS FLEXIBLE INCOME SERIES
A SERIES OF
THE PHOENIX EDGE SERIES FUND
101 MUNSON STREET
GREENFIELD, MASSACHUSETTS 01301
--------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 17, 2004
--------------------------
To The Contract and Policy Holders:
The Phoenix-Janus Flexible Income Series, a series of The Phoenix Edge Series
Fund (the "Trust"), a Massachusetts business trust, will hold a Special Meeting
of Shareholders at One American Row, Hartford, Connecticut, on March 17, 2004,
at 10:00 a.m., local time, for the following purposes:
1. To consider and act upon a proposal to approve the Agreement and Plan of
Reorganization, dated March 17, 2004, and the transactions it
contemplates, including (a) the transfer of all of the assets of the
Phoenix-Janus Flexible Income Series (the "Merging Series") to the
Phoenix-Goodwin Multi-Sector Fixed Income Series (the "Surviving
Series"), another series of the Trust, in exchange solely for shares of
the Surviving Series and the assumption by the Surviving Series of all
known liabilities of the Merging Series and (b) the distribution of the
shares of the Surviving Series so received to shareholders of the Merging
Series in complete liquidation of the Merging Series.
2. To consider and act upon any other business as may properly come before
the meeting and any adjournments thereof.
The Board of Trustees of the Trust has fixed the close of business on
February 11, 2004, as the record date for determining shareholders entitled to
notice of and to vote at the Special Meeting and any adjournment or postponement
thereof.
You are cordially invited to attend the Special Meeting. Contract/
Policyholders who do not expect to attend the Special Meeting are asked to
respond promptly via Internet or telephone or by returning a completed voting
instructions card. The Board of Trustees of the Trust is soliciting the enclosed
proxy.
By Order of the Board of Trustees of
The Phoenix Edge Series Fund,
RICHARD J. WIRTH
SECRETARY
Hartford, Connecticut
February ___, 2004
PHOENIX-JANUS FLEXIBLE INCOME SERIES
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME SERIES
BOTH, A SERIES OF
THE PHOENIX EDGE SERIES FUND
101 MUNSON STREET
GREENFIELD, MASSACHUSETTS 01301
PROSPECTUS/PROXY STATEMENT
DATED FEBRUARY __, 2004
The Phoenix Edge Series Fund (the "Trust"), a Massachusetts business trust,
serves as an investment vehicle for use in connection with variable life
insurance policies and variable annuity contracts (collectively, "Contracts")
issued by Phoenix Life Insurance Company ("PLIC") and its subsidiaries
(together, "Phoenix"), and their separate accounts. Phoenix and the separate
accounts are the sole shareholders of record of the Trust.
This Prospectus/Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Trustees of the Trust, for use at the
special meeting of shareholders of the Phoenix-Janus Flexible Income Series (the
"Merging Series") to be held at 10:00 a.m., local time, on March 17, 2004, at
the offices of the Phoenix Life Insurance Company located at One American Row,
Hartford, Connecticut, and at any adjournment(s) thereof.
The purpose of the meeting is to consider an Agreement and Plan of
Reorganization that would effect the reorganization of the Merging Series into
the Phoenix-Goodwin Multi-Sector Fixed Income Series, another series of the
Trust (the "Surviving Series"), as described below. Under the reorganization
agreement, all of the assets of the Merging Series would be transferred to the
Surviving Series in exchange solely for shares of beneficial interest in the
Surviving Series and the assumption by the Surviving Series of all known
liabilities of the Merging Series. These shares of the Surviving Series would
then be distributed pro rata to the separate accounts of the insurance companies
then holding shares of the Merging Series, and then the Merging Series would be
liquidated. As a result of the proposed transactions, the separate accounts
would receive a number of full and fractional shares of the Surviving Series
with an aggregate net asset value equal to the aggregate net asset value of the
Merging Series shares on the effective date of the reorganization.
The Surviving Series and the Merging Series are both series of the same
open-end management investment trust. The Surviving Series has an investment
objective of long-term total return. The Merging Series has an investment
objective of maximum total return consistent with the preservation of capital.
Phoenix Investment Counsel, Inc. ("PIC"), is employed as the investment advisor
for the Surviving Series and Phoenix Variable Advisors, Inc. ("PVA"), is
employed as the investment advisor for the Merging Series. Janus Capital
Management LLC ("Janus") is employed as the investment subadvisor for the
Merging Series.
This Prospectus/Proxy Statement, which you should retain for future
reference, sets forth concisely the information that you should know about the
Merging 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 Merging Series and the Surviving Series.
A Prospectus, as supplemented, and a Statement of Additional Information
("SAI"), as supplemented, for the Series dated May 1, 2003, 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 request and without charge by contacting Phoenix Variable
Products Mail Operations, P.O. Box 8027, Boston, Massachusetts 02266-8027, or by
calling toll-free at 1-800-541-0171.
The Trust files reports, proxy materials and other information with the SEC.
Information about the Trust, including the SAI, can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C. You can obtain information
on the operation of the Public Reference Room by calling the SEC at (202)
942-8090. Reports
and other information about the Trust are available on the EDGAR Database on
the SEC's Internet site at http://www.sec.gov. Copies of the information may be
obtained, after paying a duplicating fee, by electronic request at the following
e-mail address: publicinfo@sec.gov, or by writing the SEC Public Reference
Section, Washington, D.C. 20549-0102.
This Prospectus/Proxy Statement constitutes the proxy statement of the
Merging 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 February __, 2004.
------------------
THE SECURITIES OF THE SURVIVING SERIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SEC NOR HAS THE SEC DETERMINED IF THIS PROSPECTUS/PROXY STATEMENT IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------
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...............................................................
SURVIVING SERIES FINANCIAL HIGHLIGHTS.......................................
OTHER BUSINESS..............................................................
APPENDIX A.................................................................. A-1
SYNOPSIS
BACKGROUND
The proposed reorganization is the outcome of deliberations by the Board of
Trustees of the Trust (the "Trustees"). Management recommended that the Trustees
consider the benefits that the Series shareholders would realize if the Merging
Series were to be combined with the Surviving Series. In response to their
recommendation, the independent trustees of the 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
the Trust (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, including the independent trustees, at a meeting held on
November 11, 2003, unanimously approved the reorganization subject to
shareholder approval.
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 Appendix A. The reorganization agreement provides for:
o the acquisition by the Surviving Series, on the closing date of the
reorganization, of all of the assets of the Merging Series in exchange
solely for shares of the Surviving Series and the assumption by the
Surviving Series of all liabilities of the Merging Series;
o the distribution of shares of the Surviving Series to the shareholders of
the Merging Series in exchange for their respective shares of the Merging
Shares;
o the pro rata distribution of the Surviving Series shares to the Merging
Series shareholders in exchange for the outstanding Merging Series
shares; and
o the complete liquidation of the Merging Series as provided in the
Agreement and Plan of Reorganization.
The reorganization is anticipated to occur on or about March 19, 2004. If the
reorganization agreement is implemented, the separate accounts holding shares of
the Merging Series will receive a number of full and fractional shares of the
Surviving Series shares with an aggregate net asset value equal to the aggregate
net asset value 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 the Trust of an opinion of counsel that, for federal
income tax purposes, the reorganization will qualify as a tax free
organization described in Section 368(a) of the Internal Revenue Code of
1986, as amended (the "Code"); and
o the approval of the reorganization agreement by the shareholders of the
Merging Series.
The reorganization agreement provides that PLIC 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 voting
instructions.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and principal investment strategies of the Merging
Series and the Surviving Series are similar:
1
o The Merging Series has an investment objective of maximum total return
consistent with preservation of capital. The Surviving Series has an
investment objective of long-term total return.
o Under normal circumstances, the Merging Series invests at least 80% of
its assets in income-producing securities, with at least 65% of its
assets in investment grade debt securities with a dollar-weighted
maturity of five to ten years. Under normal circumstances, the Surviving
Series invests at least 80% of its assets in various sectors of the
fixed-income securities market.
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 Merging Series. You can also find additional information for the
Surviving Series in its Prospectus.
DIVIDENDS AND DISTRIBUTIONS
The Merging Series and the Surviving Series distribute net income quarterly.
Both Series distribute net realized capital gains, if any, at least annually.
All dividends and distributions of the Merging Series and the Surviving Series
are paid in additional shares of the respective Series. You can also find
additional information on dividends and distributions for the Surviving Series
in its Prospectus.
EXCHANGES
The shares of the Trust are not directly offered to the public. Shares of the
Trust are currently offered through certain separate accounts to fund variable
annuity contracts and variable life insurance policies. The policyholder can
invest in the Trust only by buying a contract and directing the allocation of
the payment(s) to the subaccount(s) corresponding to the Series in which the
policyholder wishes to invest. The subaccount, in turn, invest in shares of the
Trust. Not all Series may be available through a particular contract. At this
time Phoenix does not charge for subaccount transfers, however Phoenix does
reserve the right to charge a fee of up to $20 per transfer after the first
twelve transfers in each contract year.
Because excessive trading can hurt fund performance and therefore be
detrimental to all contract owners, Phoenix does reserve the right to
temporarily or permanently terminate exchange privileges or reject any specific
order from anyone whose transactions seem to follow a timing pattern, including
those who request more than one exchange out of a subaccount within any 30-day
period. Phoenix will not accept batch transfer instructions from registered
representatives (acting under powers of attorney for multiple contract owners),
unless we have entered into a third-party transfer service agreement with the
registered representative's broker-dealer firm.
Both Series currently offer shareholders identical exchange privileges.
Shareholders of either Series may exchange their shares for shares of another
series of the Trust at any time.
REDEMPTION PROCEDURES
As an owner of a variable annuity or variable life insurance contract issued
by PLIC, or its affiliated insurance companies, the owner has the contractual
right to instruct the insurance company how to vote and redeem the shares of the
Merging Series and the Surviving Series. Shareholders of both Series may redeem
their shares at a redemption price equal to the net asset value of the shares
(minus any applicable product surrender charge) as next determined following the
receipt of a redemption order in proper form. Ordinarily, payments of redemption
proceeds for redeemed 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.
2
FEDERAL TAX CONSEQUENCES OF PROPOSED REORGANIZATION
At the closing of the reorganization, the Trust will receive an opinion of
counsel, subject to customary assumptions and representations, that for federal
income tax purposes, the reorganization will qualify as a tax-free organization
described in Section 368(a) of the Code. Accordingly:
o no gain or loss will be recognized by the Merging Series on the transfer
of the assets of the Merging Series to the Surviving Series in exchange
for Surviving Series shares and the assumption by the Surviving Series of
all known liabilities of the Merging Series or upon the distribution of
Surviving Series shares to the Merging Series insurance company
shareholders in exchange for their shares of the Merging Series; and
o no gain or loss will be recognized by the Surviving Series upon the
receipt of the assets of the Merging Series solely in exchange for the
Surviving Series shares and the assumption by the Surviving Series of all
known liabilities of the Merging Series.
We also believe that the reorganization should not adversely impact the tax
treatment of your variable life or variable annuity contract.
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 primary
risks to which the Surviving Series is subject include the risks of investing in
fixed income-securities, including interest rate and credit risks; foreign
securities risks, including emerging market and foreign currency risks; and
"junk", or high-yield, bonds. 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 Merging Series, an investment in the
Surviving Series is subject to many of the same risks as an investment in the
Merging Series. However, see "Principal Risk Factors" for the principal risks
associated with an investment in the Surviving Series.
MANAGEMENT AND OTHER SERVICE PROVIDERS
PIC is the investment advisor to the Surviving Series and is responsible for
its day-to-day portfolio management. PVA is the investment advisor to the
Merging Series. PVA has entered into a subadvisory agreement with Janus, who
provides day-to-day portfolio management for the Merging Series.
COMPARATIVE FEE TABLES
The tables below are designed to assist you in understanding the various
direct and indirect costs and expenses associated with an investment in each
Series. The table and the example do not include any fees or sales charges
imposed under the contracts for which the Series is an investment option. Each
table also includes pro forma information for the combined Surviving Series
resulting from the reorganization, assuming the reorganization took place on
September 30, 2003, and after adjusting such information to reflect current
fees. The expense information for the Surviving Series and the Merging Series is
based upon expenses for the period ended September 30, 2003.
The following table shows 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.
3
MERGING SERIES AND SURVIVING SERIES
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (Load) Imposed on Purchases (as a
percentage of offering price) None
Maximum Deferred Sales Charge (Load) (as a percentage of the
lesser of the value redeemed or the amount invested) None
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends [and other Distributions] None
Redemption Fee None
Exchange Fee None
Maximum Account Fee None
As indicated in the table below, immediately upon effectiveness of the
reorganization, the "Total Annual Series Operating Expenses" for the combined
Surviving Series are expected to be lower than the "Total Annual Series
Operating Expenses" for the Merging Series.
PRO FORMA
SURVIVING SERIES MERGING SERIES (A) COMBINED SERIES
------------------ -------------------- -----------------
Annual Series Operating Expenses
(expenses that are deducted, from assets)
Management Fees 0.50% 0.80% 0.50%
Distribution and service (12b-1 Fees) None None None
Other Expenses 0.23% 0.48% 0.25%
Total Annual Series Operating Expenses 0.73% 1.28% 0.75%
(a) The Series' investment advisor has voluntarily agreed to reimburse the
Merging Series' expenses, other than the management fees to the extent that
such expenses exceed 0.25% of the Merging Series' average net assets (the
"expense cap"). Therefore, the Merging Series' operating expenses after
reimbursement were 1.05% for the period ended June 30, 2003.
The following example illustrates the impact of the above fees and expenses
on an account with an initial investment of $10,000, based on the expenses shown
above. It assumes a 5% annual return, the reinvestment of all dividends and
distributions and "Annual Trust Operating Expenses" remaining the same each
year. This example is hypothetical; actual trust 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:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
Surviving Series $ 75 $ 233 $ 406 $ 906
Merging Series $ 130 $ 406 $ 702 $1,545
Pro Forma Combined Surviving Series $ 77 $ 240 $ 417 $ 930
Note: Actual expenses for the Merging 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 Merging
Series' advisor.
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.
4
PRINCIPAL RISK FACTORS
Because the Surviving Series' investment objective and policies are similar
to those of the Merging Series, an investment in the Surviving Series is subject
to many of the same specific risks as an investment in the Merging 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 Merging 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 Merging
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 Merging 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 series' investments
decrease, 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 series
invests can be worse than expected and investments may fail to perform as the
series' investment advisor expects. As a result, the value of your shares may
decrease.
The following chart indicates the primary investment risks of the Surviving
Series and the Merging Series. Descriptions of the risks of the Surviving Series
can be found below.
- -------------------------------------------------------------------------------------------------------
SURVIVING SERIES MERGING SERIES
---------------- --------------
- --------------------------------------------------- ---------------------------------------------------
Fixed Income Securities Investment Risk Fixed Income Securities Investment Risk
- --------------------------------------------------- ---------------------------------------------------
o Interest Rate Risk o Interest Rate Risk
- --------------------------------------------------- ---------------------------------------------------
o Credit Risk o Credit Risk
- --------------------------------------------------- ---------------------------------------------------
Foreign Investment Risk Foreign Investment Risk
- --------------------------------------------------- ---------------------------------------------------
o Emerging Market Investment Risk o Emerging Market Investment Risk
- --------------------------------------------------- ---------------------------------------------------
o Foreign Currency Risk o Foreign Currency Risk
- --------------------------------------------------- ---------------------------------------------------
Junk Bond Investment Risk Junk Bond Investment Risk
- -------------------------------------------------------------------------------------------------------
Fixed Income Securities Investment Risk.
The risks associated with investments in fixed-income securities include
interest rate risk and credit risk.
Interest Rate Risk.
The value of fixed-income securities will be directly affected by trends in
interest rates. For example, in times of rising interest rates, the value of
these type of securities tends to decrease. When interest rates fall, the value
of these securities tends to rise. Interest rate changes have a greater effect
on the price of fixed-income securities with longer durations.
Credit Risk.
If the issuer of a portfolio security is unable or unwilling to make timely
interest or other income payments to the Series, the Series' income available
for distribution to shareholders and the Series' yield may decrease. Credit risk
for debt obligations generally increases as the credit rating declines. Thus,
when the credit rating declines, there is an increased chance the issuer may not
be able to make principal and interest payments on time.
5
Foreign Investment Risk.
Foreign investments could be more difficult to sell than U.S. investments.
They also may subject a Series to risks different from investing in domestic
securities. Investments in foreign securities involve difficulties in receiving
or interpreting financial and economic information, possible imposition of
taxes, higher brokerage and custodian fees, possible currency exchange controls
or other government restrictions, including possible seizure or nationalization
of foreign deposits or assets. Foreign securities may also be less liquid and
more volatile than U.S. securities. There may also be difficulty in invoking
legal protections across borders. In addition, investment in emerging-market
countries presents risks in greater degree than those presented by investment in
foreign issuers in countries with developed securities markets and more advanced
regulatory systems.
Some foreign securities are issued by companies organized outside the United
States and are traded only or primarily in trading markets outside the United
States. These foreign securities can be subject to most, if not all, of the
risks of foreign investing. Some foreign securities are issued by companies
organized outside the United States but are traded in U.S. securities markets
and are denominated in U.S. dollars. For example, American Depositary Receipts
and shares of some large foreign-based companies are traded on principal U.S.
exchanges. Other securities are not traded in the United States but are
denominated in U.S. dollars. These securities are not subject to all the risks
of foreign investing. For example, foreign trading market or currency risks will
not apply to dollar-denominated securities traded in U.S. securities markets.
Emerging Market Investment Risk.
Some of the series may invest in companies located in emerging-market
countries and regions. Investment in less-developed countries whose markets are
still emerging generally presents risks in greater degree than those presented
by investment in foreign issuers based in countries with developed securities
markets and more advanced regulatory systems. Prior governmental approval of
foreign investments may be required under certain circumstances in some
developing countries, and the extent of foreign investment in domestic companies
may be subject to limitation in other developing countries. The charters of
individual companies in developing countries may impose limitations on foreign
ownership to prevent, among other concerns, violation of foreign investment
limitations. The economies of developing countries generally are heavily
dependent upon international trade and, accordingly, have been and may continue
to be adversely affected by trade barriers, exchange controls, managed
adjustments in relative currency values and other protectionist measures imposed
or negotiated by the countries with which they trade. These economies also have
been (and may continue to be) adversely affected by economic conditions in these
countries.
Foreign Currency Risk.
Changes in foreign exchange rates will affect the value of those securities
denominated or quoted in currencies other than the U.S. dollar. The forces of
supply and demand in the foreign exchange markets determine exchange rates and
these forces are in turn affected by a range of economic, political, financial,
governmental and other factors. Exchange rate fluctuations can affect the
Series' net asset value (share price) and dividends either positively or
negatively depending upon whether foreign currencies are appreciating or
depreciating in value relative to the U.S. dollar. Exchange rates fluctuate over
both the short and long terms. In addition, when certain foreign countries
experience economic difficulties, there is an increased risk that the foreign
government may impose restrictions on the free exchange of its currency.
Junk Bond Investment Risk.
High-yield, high-risk securities (so called "junk bonds") are securities
rated below investment grade by the primary rating agencies such as Standard &
Poor's and Moody's. Below-investment grade securities present a greater risk
that the issuer will not be able to make interest or principal payments on time.
If this happens, the series would lose income and could expect a decline in the
market value of the securities. Issuers of high-yield securities may not be as
strong financially as those issuing bonds with higher credit ratings and are
more vulnerable to real or perceived economic changes, political changes, or
adverse developments specific to the issuer. Analysis of the creditworthiness of
issuers of below investment grade securities may be more complex than for higher
grade securities, making it more difficult to accurately predict risk. The
junk-bond market can experience sudden and sharp price swings.
6
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
Appendix A.
The Agreement and Plan of Reorganization contemplates:
o the acquisition by the Surviving Series, on the closing date of the
reorganization, of all of the assets of the Merging Series in exchange
solely for shares of the Surviving Series and the assumption by the
Surviving Series of all known liabilities of the Merging Series;
o the distribution of shares of the Surviving Series to the shareholders of
the Merging Series in exchange for their respective shares of the Merging
Series;
o the pro rata distribution of the Surviving Series shares to the Merging
Series shareholders in exchange for the outstanding Merging Series
shares; and
o the complete liquidation of the Merging Series as provided in the
Agreement and Plan of Reorganization.
The assets of the Merging Series to be acquired by the Surviving Series
include all property, including, without limitation, all cash, securities, and
dividends or interest receivables which 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 of the reorganization. The Surviving Series will
assume all liabilities, accrued expenses, costs, charges, and reserves of the
Merging Series reflected on the 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, or such later date as the parties may agree.
The value of the Merging Series' assets to be acquired and the Merging
Series' liabilities to be assumed by the Surviving Series and the net asset
value 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 the Surviving
Series to be issued to the Merging Series will be determined by dividing (a) the
value of the aggregate net assets attributable to shares of the Merging Series
by (b) the net asset value per share of the Surviving Series.
On the closing date, the Merging Series will liquidate and distribute pro
rata to its shareholders of record the Surviving Series shares received by the
Merging Series in exchange for their respective shares in the Merging 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 Merging Series and by crediting to each such account the shares due pursuant
to the reorganization. Every Merging Series shareholder will own shares of the
Surviving Series immediately after the reorganization, the value of which will
be equal to the value of the shareholder's Merging Series shares immediately
prior to the reorganization.
At or prior to the closing date, the Merging Series will declare a dividend
or dividends which, together with all previous such dividends, will have the
effect of distributing to the Merging Series shareholders all of the Merging
Series' investment company taxable income for all taxable years ending at or
prior to the closing date 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 those Trustees who are not "interested persons"
of the advisor or distributor of the Merging Series (the "Independent
7
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 the Trust, as
appropriate.
Among the significant conditions which may not be waived are: (a) the receipt
by the Trust of an opinion of counsel that the reorganization will qualify as a
tax free organization described in Section 368(a) of the Code for federal income
tax purposes and (b) the approval of the reorganization agreement by the
shareholders of the Merging Series. The Plan may be terminated and the
reorganization abandoned at any time, before or after approval by the
shareholders of the Merging Series, prior to the closing date, by resolution of
the 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 Merging Series without their further approval.
REASONS FOR THE REORGANIZATION
The proposed reorganization is the outcome of the deliberation by the
Trustees of the Trust. Management recommended that the Trustees consider the
benefits that shareholders would realize if the Merging Series were to be
combined with the Surviving Series. In response to this recommendation, the
independent trustees of the 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 Merging Series to pursue their investment goals in a Series which, after
the reorganization, was anticipated to be larger than the Merging Series. In
reaching this conclusion, the Board considered a number of additional factors,
including, but not limited to, the following:
o the potential benefits of the reorganization to shareholders of the
Surviving Series and the Merging Series, including that the
reorganization could result in economies of scale through the spreading
of fixed costs over a larger asset base;
o the terms and conditions of the proposed Plan, and that the proposed Plan
will not result in dilution of shareholder interests;
o the total expense ratio of the combined Surviving Series following the
reorganization is projected to be lower than the current total expense
ratio of the Merging Series;
o the compatibility of investment objectives, policies, restrictions and
investment holdings between the Merging Series and the Surviving Series;
o the ability to better manage asset flows in the Surviving Series because
of its anticipated greater size;
o the comparable performance of the Series;
o that the terms and conditions of the Plan will have minimal affect upon
the price of the outstanding shares of each Series;
8
o that 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 Merging Series or the
Surviving Series and should not adversely impact the tax treatment of the
variable contracts invested in whole or in part in either of the Series.
After considering these and other factors, the Trustees, including the
Independent Trustees, unanimously concluded at a meeting held on November 11,
2003 that the reorganization is fair and reasonable and would be in the best
interests of both the Merging Series and Surviving Series and their respective
shareholders and that the interests of either Series' shareholders will not be
diluted as a result of the transactions contemplated by the reorganization. The
Trustees then unanimously voted to approve the reorganization and authorized the
officers of the Trust to submit the reorganization proposal to shareholders for
consideration.
FEDERAL INCOME TAX CONSEQUENCES
________________________ is to opine that, subject to customary assumptions
and representations, on the basis of the existing provisions of the Internal
Revenue Code (the "Code"), the Treasury Regulations promulgated thereunder and
current administrative and judicial interpretations thereof, for federal income
tax purposes, the reorganization will qualify as a tax free reorganization
described in Section 368(a) of the Code. Accordingly:
o no gain or loss will be recognized by the Merging Series on the transfer
of the assets of the Merging Series to the Surviving Series in exchange
for Surviving Series shares and the assumption by the Surviving Series of
all known liabilities of the Merging Series or upon the distribution of
Surviving Series shares to the Merging Series insurance company
shareholders in exchange for their shares of the Merging Series;
o the tax basis of the Merging Series' assets acquired by the Surviving
Series will be the same to the Surviving Series as the tax basis of such
assets to the Merging Series immediately prior to the reorganization, and
the holding period of the assets of the Merging Series in the hands of
the Surviving Series will include the period during which those assets
were held by the Merging Series; and
o no gain or loss will be recognized by the Surviving Series upon the
receipt of the assets of the Merging Series solely in exchange for the
Surviving Series shares and the assumption by the Surviving Series of all
known liabilities of the Merging Series.
The receipt of such an opinion that the reorganization will qualify as a tax
free reorganization described in Section 368(a) of the Code is a condition to
the consummation of the reorganization. The Trust has not obtained an Internal
Revenue Service ("IRS") private letter ruling regarding the federal income tax
consequences of the reorganization, and the IRS is not bound by advice of
counsel. You are not directly a shareholder of the Merging Series but, instead,
some of your variable life insurance policy or variable annuity contract is
invested in the Merging Series. We also believe, however, that the
reorganization should not adversely affect the tax treatment of your variable
contract.
It is possible, although unlikely in our view, that, because the Merging
Series will no longer be an available Series underlying your variable contract,
your contract could be considered changed in a manner that causes the contract
or policy to be considered newly issued for federal income tax purposes. In such
a case, your contract would be subject to the federal income tax rules in effect
on the effective date of the reorganization instead of the federal income tax
rules in effect on the issue date of your contract, which could have been more
favorable.
Shareholders of the Series should consult their tax advisors regarding the
effect, if any, of the proposed reorganization in light of their individual
circumstances. Since the foregoing discussion relates only to the federal income
tax consequences of the reorganization, shareholders of the Series should also
consult tax advisors as to state and local tax consequences, if any, of the
reorganization.
9
It is also possible that if the reorganization were not tax free, which as
indicated above is not expected, and the Surviving Series as a result failed to
qualify as a regulated investment company, the diversification rules of Code
Section 817(h) might be violated. In such a case, income on your contract could
be currently taxable to you.
CAPITALIZATION
The following table sets forth the capitalization of the Surviving Series and
the Merging Series, and on a pro forma basis for the combined Surviving Series
as of September 30, 2003 giving effect to the proposed acquisition of net assets
of the Merging Series at net asset value.
PHOENIX-GOODWIN MULTI-SECTOR PHOENIX-JANUS FLEXIBLE PRO FORMA
FIXED INCOME SERIES INCOME SERIES COMBINED
SURVIVING SERIES MERGING SERIES SERIES
---------------- -------------- ------
Net assets $191,686,095 $49,891,193 $241,577,288
Net asset value per share $9.16 $11.12 $9.16
Shares outstanding 20,935,218 4,487,851 26,384,142
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 Merging Series and the Surviving Series at the time of
the reorganization.
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 Merging Series. The discussion
below is qualified in its entirety by the discussion elsewhere in this
Prospectus/Proxy Statement, and in the Trust's Prospectus and Statement of
Additional Information.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of the Surviving Series and the Merging Series are
similar. The investment objectives of the Surviving Series and the Merging
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
Trust. 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 of that Series are present in
person or by proxy, or (b) the vote of the holders of more than 50% of the
outstanding voting shares of the Series.
The principal investment strategies of the Surviving Series are also similar
to the principal investment strategies of the Merging Series.
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SURVIVING SERIES
- --------------------------------------------------------------------------------
Investment Objective Long-term total return.
- ------------------------------------------------- ------------------------------
Principal Investment The Surviving Series invests primarily in a
Strategies portfolio of fixed-income securities. Under
normal circumstances, the Surviving Series will
invest at least 80% of its assets in various
sectors of the fixed-income securities market.
PIC will invest in any of several sectors of the
fixed-income securities market:
o high-yield (high-risk) fixed-income
securities (sometimes referred to as
"junk-bonds");
o high quality fixed-income securities;
o preferred stock;
o convertible securities;
o U.S. and foreign-debt obligations;
o certificates of deposit;
o commercial paper;
o bankers' acceptances; and
o government obligations issued or guaranteed
by federal, state or municipal governments or
their agencies or instrumentalities.
Securities are selected using a sector-rotation
approach. PIC seeks to adjust the proportion of
the Surviving Series' investments in the sectors
described above and the selections within
sectors to obtain higher relative returns.
Sectors are analyzed by PIC for attractive
values. Securities within sectors are selected
based on general economic and financial
conditions, and the issuer's business,
management, cash, assets, earnings and
stability. Securities selected for investment
are those that PIC believes offer the best
potential for total return based on
risk-to-reward tradeoff.
The Surviving Series generally will be invested
in each market sector, but may also invest any
amount of its assets (except for the junk-bond
and foreign-debt limits shown below) in any one
sector and may choose not to invest in certain
sectors.
The Surviving Series may invest up to 35% of its
assets in high-yield (high-risk) corporate
fixed-income securities.
The Surviving Series may invest up to 50% of its
assets in debt obligations of foreign (non-U.S.)
issuers. Issuers may be in established- and
emerging-market countries.
PIC seeks to match the average duration and
maturity of the Surviving Series' portfolio to
those of the Lehman Brothers Aggregate Bond
Index.
- --------------------------------------------------------------------------------
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MERGING SERIES
- --------------------------------------------------------------------------------
Investment Objective Maximum total return consistent with
preservation of capital.
- ------------------------------------------------- ------------------------------
Principal Investment The Merging Series invests primarily in a wide
Strategies variety of income-producing securities, such as
corporate bonds and notes, government
securities, and preferred stock.
The Merging Series will invest at least 80% of
its assets in income-producing securities.
The Merging Series will invest at least 65% of
its assets in investment grade debt securities
with a dollar-weighted maturity of five to ten
years. The series will limit its investment in
high-yield/high-risk bonds ("junk-bonds") to
less than 35% of its net assets.
In addition to considering economic factors such
as the effect of interest rates on the Merging
Series' investments, Janus applies a "bottom-up"
approach in choosing investments. In other
words, Janus looks mostly for income-producing
securities that meet its investment criteria one
at a time. If Janus is unable to find such
investments, much of the Merging Series' assets
may be in cash or similar investments.
The Merging Series generates total return from a
combination of current income and capital
appreciation, but income is usually the dominant
portion.
The Merging Series may also invest to a lesser
degree in other types of securities, such as:
o common stocks;
o mortgage- and asset-backed securities; and
o zero-coupon, pay-in-kind and step-coupon
securities.
The Merging Series may invest in foreign equity
and debt securities. The Merging Series may
invest directly in foreign securities
denominated in a foreign currency and not
publicly traded in the United States, or in
depositary receipts or shares, and passive
foreign investment companies.
- --------------------------------------------------------------------------------
CERTAIN INVESTMENT RESTRICTIONS
The 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).
Neither Series' may:
(1) 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;
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(2) purchase securities in a given industry 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 business activities in the
same industry (excluding the U.S. Government or its agencies or
instrumentalities);
(3) 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;
(4) 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;
(5) 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 the applicable law;
(6) 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, or (iv) hold and sell real estate acquired
by the Series as a result of the ownership of securities;
(7) 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; and/or
(8) 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).
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
The shares of the Trust are not directly offered to the public. Shares of the
Trust are currently offered to certain separate accounts to fund variable
accumulation annuity contracts or variable life insurance policies ("variable
products") issued by Phoenix Life Insurance Company ("PLIC"), PHL Variable
Insurance Company ("PHL Variable"), or Phoenix Life and Annuity Company ("PLAC")
(collectively, "Phoenix"). Investments in the Trust may occur only by buying a
variable product contract and directing the allocation of your payment(s) to the
subaccount(s) corresponding to a Series. The subaccounts, in turn, invest in
shares of the Trust. Not all Series may be offered through a particular variable
product.
Phoenix Equity Planning Corporation ("PEPCO") is an indirect subsidiary of
The Phoenix Companies, Inc. ("PNX"). PNX is the parent company of PLIC. PEPCO is
also a broker-dealer registered with relevant regulators and serves as national
distributor of variable products issued by these entities. Variable products may
be purchased through broker-dealers registered with applicable regulatory
authorities and who have entered into a sales agreement with PEPCO. Sales
commissions will be paid to registered representatives based on the amount of
premiums received in connection with the sale of variable products, subject to
governing law. PLIC and its insurance company affiliates also pay commissions to
PEPCO based on the amount of premiums received in connection with the sale of
variable products, subject to governing law.
13
COMPARATIVE INFORMATION ON SHAREHOLDER SERVICES
Both Series offer the same shareholder services. The Merging Series and the
Surviving Series distribute net income quarterly. Both Series distribute net
realized capital gains, if any, at least annually. All dividends and
distributions with respect to the shares of the Merging Series and the Surviving
Series are paid in additional shares of the respective Series. The number of
shares received in connection with any reinvestment of dividends will be based
upon the net asset value per share of the applicable Series in effect on the
record date. Both Series currently offer shareholders identical exchange
privileges. Shareholders of the either Series may exchange their shares for
shares of a corresponding Series of the Trust.
Shares of the Surviving Series and the Merging 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. Payment of redemption proceeds for redeemed 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 Series offer the same shareholder services, after the closing,
the same services will continue to be available to the shareholders of the
Merging 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 Amended Declaration
of Trust of the Merging Series and the Surviving Series.
FORM OF ORGANIZATION
Each is a Series of The Phoenix Edge Series Fund, a business trust organized
under the laws of the Commonwealth of Massachusetts, pursuant to a Declaration
of Trust dated February 18, 1986, as amended. The operations of these Series are
governed by the Declaration of Trust and by Massachusetts law. The shares of the
Trust are registered with the SEC as an open-end management investment company
and are subject to the provisions of the 1940 Act and the rules and regulations
of the SEC thereunder. The Trustees 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 authorizes the Trustees to create an unlimited
number of Series. The Trust currently has thirty-three series outstanding. The
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 the Trust from the issue or sale of shares of a Series 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 are required to be
segregated on the books of account of the Trust. These assets are to be used to
pay the expenses of the Series as well as a share of the general expenses of the
Trust.
MEETINGS
The Trustees or President of the 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 the Trustees or upon
written request by shareholders holding at least ten percent of the outstanding
shares entitled to vote.
14
SHAREHOLDER LIABILITY
Unlike the stockholders of a corporation, under certain circumstances
shareholders of a business trust may be held personally liable for the debts,
claims or other obligations of a business trust. However, the Declaration of
Trust limits shareholder liability. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust. The 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
The Declaration of Trust provides that Trustees will generally be personally
liable only for willful misfeasance, bad faith, gross negligence or reckless
disregard of duties. The Trust may purchase insurance for Trustees to cover
potential liabilities and will generally indemnify a Trustee against such
claims. The 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 Trust.
FISCAL YEAR
The Series each operate on a fiscal year that ends December 31.
MANAGEMENT AND OTHER SERVICE PROVIDERS
Responsibility for the overall supervision of both Series rests with Trustees
of the Trust.
PIC is the investment advisor to the Surviving Series and is responsible for
its day-to-day portfolio management. David L. Albrycht is the portfolio manager
for the Surviving Series. Mr. Albrycht has been a portfolio manager in PIC's
Fixed Income Group since 1994. He is currently responsible for the day-to-day
management of PIC's multi-sector portfolios. He has held various management
positions with Phoenix from 1989 through 1995. Mr. Albrycht earned the right to
use the Chartered Financial Analyst designation in 1991.
PVA is the investment advisor to the Merging Series. PVA has entered into a
subadvisory agreement with Janus to provide day-to-day portfolio management. The
subadvisory agreement between PVA and Janus will be terminated following the
consummation of the proposed merger.
PEPCO serves as financial agent of both Series and, as such, performs
administrative, bookkeeping and pricing functions.
JP Morgan Chase Bank serves as the custodian of the Surviving Series. State
Street Bank and Trust Company serves as custodian to the Merging Series.
PricewaterhouseCoopers LLP serves as independent accountants for the Series.
VOTING INFORMATION
QUORUM AND VOTING REQUIREMENTS
This Prospectus/Proxy Statement is being furnished to the shareholders of the
Merging 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
Merging Series at the close of business on February 11, 2004 ("Record Date")
will be entitled to vote at the
15
meeting or at any adjournments thereof. Each of the above shares is entitled to
one vote, with proportionate voting for fractional shares. The record owners of
the shares of each separate Series of the Trust include the Phoenix Life
Variable Universal Life Account, Phoenix Life and Annuity Variable Universal
Life Account and the PHLVIC Variable Universal Life Account (collectively, the
"VUL Accounts"), which fund variable life insurance policies, and the Phoenix
Life Variable Accumulation Account and the PHL Variable Accumulation Account
(collectively, the "VA Accounts"), which fund variable annuity contracts.
Each shareholder of record at the close of business on the Record Date is
entitled to a notice of the meeting and will be asked to instruct Phoenix how to
vote at the Special Meeting or any adjourned or postponed session. No
shareholder, to the Trust's knowledge, owns Contracts which are funded by more
than five percent of the outstanding voting shares of the Trust or of any
Series. The number of votes with respect to which each shareholder will be
entitled to instruct Phoenix will be determined by applying the shareholder's
percentage interest in a subaccount to the total number of votes attributable to
the subaccount. In determining the number of votes, fractional shares will be
recognized. The number of votes for which a shareholder may provide instructions
will be determined as of the Record Date.
In accordance with its view of applicable law, Phoenix will vote the shares
of the Merging Series for which Phoenix receives voting instructions from the
shareholder in accordance with those instructions. Phoenix will vote shares for
which it has not received timely voting instructions from shareholders and any
shares held by Phoenix or its affiliates for their own accounts in the same
proportion as the shares for which shareholders have provided voting
instructions to Phoenix.
In addition to the proxy solicitation by mail, officers and regular employees
of Phoenix or one of its affiliates may solicit voting instructions personally,
by telephone or telegram. Phoenix will, upon request, reimburse banks, brokers,
fiduciaries and nominees for their reasonable expenses in sending proxy
materials. The cost of solicitation of voting instructions will be borne
indirectly by Phoenix. You can provide voting instructions in any one of four
ways:
THROUGH THE INTERNET - [_________________]
BY TELEPHONE - (___) ___-____
BY MAIL - using the enclosed Voting Instructions Card(s) and postage paid
envelope
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 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 of
this proxy solicitation. Whichever method you choose, please read the enclosed
proxy statement carefully before you vote.
As of the Record Date, Phoenix owned _____ shares of the Merging Series and
_____ shares of the Surviving Series. As of the Record Date, less than 1% of the
outstanding shares of beneficial interest of either Series were held of record
or beneficially owned under a contract or policy by the Trustees or nominees for
election as Trustee and by the executive officers of the Trust, as a group.
A COPY OF THE TRUST'S MOST RECENT ANNUAL REPORT, DATED DECEMBER 31, 2002 AND
MOST RECENT SEMIANNUAL REPORT, DATED JUNE 30, 2003 HAVE PREVIOUSLY BEEN
FURNISHED TO SHAREHOLDERS. THE TRUST WILL FURNISH, WITHOUT CHARGE, TO ANY
SHAREHOLDER, UPON REQUEST, A COPY OF THE 2002 ANNUAL REPORT AND THE 2003
SEMIANNUAL REPORT. SUCH REQUESTS MAY BE DIRECTED TO PHOENIX VARIABLE PRODUCTS
OPERATIONS, P.O. BOX 8027, BOSTON, MA 02266-8027. SHAREHOLDERS MAY ALSO CALL
TOLL-FREE AT (800) 541-0171.
16
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 Voting Instructions Card(s) to vote in accordance
with their best judgment.
A majority of the outstanding voting shares of a Series 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 Merging Series represented at the meeting if
more than 50% of the eligible votes of the Merging Series are present in person
or by proxy or (ii) more than 50% of the eligible votes of the Merging 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 Merging 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.
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. 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 voting instruction card will
vote in accordance with the shareholder's direction, as indicated thereon, if
the voting instruction card is received and is properly executed. If the
shareholder properly executes a voting instruction card and gives no voting
instructions with respect to the reorganization proposal, the shares will be
voted in favor of the reorganization proposal. The individuals named as proxies
on the enclosed voting instruction card, 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 Merging
Series is a condition of the consummation of the reorganization. If the
reorganization is not approved, the Merging 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 Merging Series.
REVOCATION OF PROXIES
Any shareholder who has given an instruction card has the right to revoke the
proxy any time prior to its exercise:
17
o by written notice of the an instruction card'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 instruction 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.
SOLICITATION OF PROXIES
In addition to solicitation of proxies by mail, officers and employees of
PLIC or its affiliates may solicit proxies personally or by telephone or
telegram. PLIC 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 instruction cards. Banks, brokers,
fiduciaries and nominees will, upon request, be reimbursed by PLIC for their
reasonable expenses in sending proxy material to be beneficial owners of shares
of the Merging Series. The cost of the solicitation of proxies will be borne by
PLIC.
If a shareholder wishes to participate in the meeting but does not wish to
authorize the execution of an instruction card by telephone, the shareholder may
still submit the instruction card form included with this proxy statement or
attend the meeting in person.
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES OF THE
TRUST, RECOMMEND YOU APPROVE THE PLAN OF REORGANIZATION.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE RESPOND PROMPTLY VIA
INTERNET, TELEPHONE OR RETURN THE VOTING INSTRUCTIONS CARD IN THE POSTAGE PAID
RETURN ENVELOPE.
ADDITIONAL INFORMATION ABOUT THE SERIES
Additional information about the Series is included in the Trust's
Prospectus, as supplemented, and Statement of Additional Information, as
supplemented, dated May 1, 2003, which has been filed with the SEC and is
incorporated by reference herein. A copy of the Prospectus, as supplemented, and
Statement of Additional Information, as supplemented, may be obtained without
charge by contacting Phoenix Variable Products Mail Operations, P.O. Box 8027,
Boston, Massachusetts 02266-8027, or by calling toll-free at 1-800-541-0171.
MISCELLANEOUS
AVAILABLE INFORMATION
Both Series 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. Information about the
Trust, including the SAI, can be reviewed and copied at the SEC's Public
Reference Room in Washington, D.C. You can obtain information on the operation
of the Public Reference Room by calling the SEC at (202) 942-8090. Reports and
other information about
18
the Trust are available on the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. Copies of the information may be obtained, after paying a
duplicating fee, by electronic request at the following e-mail address:
publicinfo@sec.gov, or by writing the SEC Reference Section, Washington, D.C.
20549-0102.
PERFORMANCE FOR THE PERIOD ENDING SEPTEMBER 30, 2003
The following table compares investment performance for both Series' for the
period ending September 30, 2003 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. The Series performance does not reflect
insurance contract expenses. If these expenses were included, the Series'
performance would be lower.
Average Annual Total Returns (for the period 1 Year 5 Years 10 Years Life of the Series Date of Inception
- ---------------------------- ------ ------- -------- ------------------ -----------------
ending September 30, 2003)
Surviving Series
o Phoenix-Goodwin Multi-Sector Fixed Income 14.69% 8.37% 7.55% --- ---
Series
o Lehman Brothers Aggregate Bond Index(1) 5.41% 6.63% 6.92% --- ---
Merging Series
o Phoenix-Janus Flexible Income Series 7.42% --- --- 7.94% 12/15/99
o Lehman Brothers Government/Credit Bond 6.50% --- --- 9.32% 12/15/99
Index(2)
o Lehman Brothers Aggregate Bond Index(1) 5.41% --- --- 8.83% 12/15/99
GROWTH OF $10,000(3) (PERIOD ENDING SEPTEMBER 30, 2003)
Year Phoenix-Goodwin Multi-Sector Fixed Lehman Brothers Aggregate Bond Index(1)
---- ---------------------------------- ---------------------------------------
Income Series
-------------
09/30/93 $10,000.00 $10,000.00
09/30/94 $9,831.46 $9,677.52
09/29/95 $11,410.37 $11,038.75
09/30/96 $12,862.55 $11,579.70
09/30/97 $14,643.46 $12,704.25
09/30/98 $13,853.80 $14,166.44
09/30/99 $14,656.63 $14,114.63
09/29/00 $15,761.12 $15,100.98
09/28/01 $16,534.65 $17,057.06
09/30/02 $18,052.00 $18,523.33
09/30/03 $20,703.17 $19,526.10
- -----------------------------
(1) The Lehman Brothers Aggregate Bond Index is an unmanaged commonly used
measure of broad bond market total return performance and is provided for
general comparative purposes.
(2) The Lehman Brothers Government/ Credit Bond Index measures government and
corporate bond market total-return performance.
(3) This chart assumes an initial investment of $10,000 made on the inception
dates noted in the tables above.
19
Year Phoenix-Janus Flexible Income Lehman Brothers Government/Credit Lehman Brothers Aggregate Bond
---- ----------------------------- --------------------------------- ------------------------------
Series Bond Index(1) Index(2)
------ ------------- --------
12/15/99 $10,000.00 $10,000.00 $10,000.00
09/29/00 $10,296.97 $10,654.23 $10,661.26
09/28/01 $11,428.43 $12,057.73 $12,042.25
09/30/02 $12,438.70 $13,168.91 $13,077.44
09/30/03 $13,361.90 $14,025.01 $13,785.39
MANAGEMENT'S DISCUSSION OF THE SURVIVING SERIES FOR THE YEAR ENDED
DECEMBER 31, 2002
Phoenix-Goodwin Multi-Sector Fixed Income Series' investment objective is
total return. The Surviving Series is appropriate for investors with a moderate
risk tolerance profile who are seeking to maximize current income consistent
with preservation of capital by investing in a broadly diversified bond fund.
The Surviving Series duration is market neutral, that is, approximately equal to
the benchmark index, the Lehman Brothers Aggregate Bond Index.(2)
Investors should note that the Surviving Series may hold foreign bonds, and
foreign investments pose additional risk, such as currency fluctuation, less
public disclosure, and political and economic uncertainty. The Surviving Series
may also invest in high-yielding fixed-income securities that are generally
subject to greater market fluctuations and risk of loss of income and principal
than are investments in lower-yielding fixed-income securities.
The Surviving Series returned 10.00% compared with a return of 10.26% for the
Lehman Brothers Aggregate Bond Index. All performance figures assume
reinvestment of distributions. Past performance is not indicative of future
results.
As the new year began, investors benefited from a benign inflation
environment and indications that the economy was beginning to recover. Investors
were hopeful that a strengthening economy would improve corporate profits
leading to higher bond prices in the spread sectors of the market, particularly
high yield securities. Then in March, the Israeli-Palestinian conflict spurred a
30% increase in crude oil futures, and the Federal Reserve adjusted its risk
outlook from a policy favoring economic weakness to one of balancing and
inflation in the economy.
The bond market was also strong during the second quarter as the stock market
approached the lows set after the terrorist attacks in September 2001. The
steady drumbeat of CEO resignations and SEC investigations, along with turmoil
in the Middle East and the ongoing war against terrorism in Afghanistan and
other parts of the world weighed heavily on investors' minds. Against this
backdrop, the economy continues to show strength in manufacturing and consumer
spending. Interest rates declined across the yield curve, with the largest
declines in the intermediate-term sector. Expectations shifted from the belief
the Federal Reserve would raise interest rates during the summer to the
possibility that it might not raise rates until the end of 2002. Treasuries
benefited from the flight to quality despite weakness to the U.S. dollar, as
investors' appetite for risk faded. High yield and emerging markets bonds were
the worst performing sectors for the quarter giving back strong gains registered
in the first quarter.
In the third quarter, the fixed income market continued to benefit from the
downturn in the stock market and the uncertain economic and geopolitical
outlook, as the S&P 500 Index(3) posted its largest quarterly loss since the
fourth quarter in 1987. Within the fixed income market, quality was the place to
be. As a result, Treasuries were the best performing sector for the quarter.
Commercial mortgage-backed securities ("CMBS") continued their impressive
- -----------------------------
(1) The Lehman Brothers Government/ Credit Bond Index measures government and
corporate bond market total-return performance.
(2) The Lehman Brothers Aggregate Bond Index is an unmanaged commonly used
measure of broad bond market total return performance and is provided for
general comparative purposes.
(3) The S&P 500 Index is a measure of stock market total return performance and
is provided for general comparative purposes.
20
performance, and were the best performing domestic bond sector year-to-date.
High yield and emerging markets bonds were the worst performing sectors for the
quarter and year-to-date.
However, at the end of the year, spread product was the place to be - a
complete reversal of previous quarters as the stock market rally in October and
November and historically wide spreads led investors to temporarily overlook
fears of credit risk. Emerging markets and high yield were the best performing
sectors for the quarter, while U.S. Treasuries were the worst.
First-quarter performance benefited from the portfolio's exposure to high
yield bonds and emerging market debt. Also contributing to performance was an
underweight in both the U.S. Treasury and U.S. corporate bond sectors, which
exhibited weakness relative to structured products (mortgage-backed securities
and asset-backed securities), which are generally more defensive in a rising or
perceived rising interest rate environment given their sensitivity to
prepayments.
Our position in the high yield sector detracted the most from performance for
the second quarter. The sector had one of its worst months ever in June. The
declines were primarily due to the collapse of WorldCom and problems at other
companies such as Adelphia Communications and Qwest. While our position in
WorldCom hurt performance, we avoided other problems by selling our positions in
Qwest and Adelphia before large price declines and avoided many other troubled
companies such as Kmart and Ames. It has been a very difficult year for high
yield bonds with defaults and rating downgrades running at the highest level
since 1990. An overweight position in commercial mortgage-backed securities
added to performance relative to the benchmark. Performance also benefited from
our position in taxable municipals as spreads continued to tighten, leading to
price appreciation.
As with the second quarter, our position in the high yield sector impaired
performance going into the second half of the year. The sector was again the
worst performing domestic bond sector. According to a study by Fitch, 40% of all
high yield bonds issued between the beginning of 1997 and the end of 1999 had
defaulted as of the end of June. Additionally, our typical underweight position
in U.S. Treasuries also detracted from performance. U.S. Treasuries were the
best performing sector for the quarter, returning 7.40%. The gains were
especially strong in long-term maturity sectors as Treasuries continued to
benefit commercial mortgage-backed securities continued to add to performance.
Another positive was our exposure to both taxable and tax-exempt municipal
bonds, which both performed well.
In the fourth quarter, our position in the emerging markets and high yield
sectors were the primary cause of our outperformance relative to our benchmark.
Each of these sectors performed well as the stock market rally renewed
investors' appetite for risk and spread product. Some specific names in the
investment-grade corporate sector also helped performance but our overall
underweighting in the sector detracted from our return.
We believe U.S. Treasuries could swing from being the best performing sector
in 2002 to one of the worst performing areas in 2003 and that high yield may be
turning the corner. Although we are seeking only a modest decline in defaults
and continuing net downgrades, it appears that the worst of the credit cycle is
behind us. We also think investment-grade corporates will perform well in 2003.
We continue to emphasize diversification by sector and within sectors,
particularly within high yield and investment-grade corporates.
We do not believe the potential tax change regarding dividends will have a
major negative impact on municipal bonds. Commercial mortgage-backed securities
and taxable municipal bonds are trading at relatively tight spreads, and we do
not anticipate the excellent performance that we saw in 2002 continue in 2003.
SECTOR WEIGHTINGS (as a percentage of bond holdings as of September 30, 2003)
SECTOR PHOENIX-JANUS FLEXIBLE PHOENIX-GOODWIN MULTI-
- ------ ---------------------- ----------------------
INCOME SERIES SECTOR FIXED INCOME SERIES
------------- --------------------------
Corporate Bonds $32,145,650.00 65.32% $ 74,315,550.00 39.41%
Foreign Government $ 1,313,317.00 2.67% $ 49,567,467.00 26.29%
21
Foreign Corporate Bonds $ 1,962,205.00 3.99% $ 22,144,027.00 11.74%
Non-Agency Mortgage Backed $ 5,375,161.00 10.91% $ 18,493,951.00 9.81%
Municipal Bonds $ - 0.00% $ 15,223,854.00 8.07%
U.S. Government $ 8,317,681.00 16.90% $ - 0.00%
Agency Mortgage Backed $ - 0.00% $ 7,593,133.00 4.03%
Agency Asset Backed $ - 0.00% $ 1,227,198.00 0.65%
Preferred Stock $ 98,860.94 0.21% $ - 0.00%
Sum of Bond Holdings $49,212,874.94 100.00% $188,565,180.00 100.00%
ASSET MIX (as a percentage of total assets as of September 30, 2003)
Asset Mix PHOENIX-JANUS FLEXIBLE PHOENIX-GOODWIN MULTI-
- --------- ---------------------- ----------------------
INCOME SERIES SECTOR FIXED INCOME SERIES
------------- --------------------------
Corporate Bonds $32,145,650 64.43% $ 74,315,550 38.77%
Foreign Government $ 1,313,317 2.63% $ 49,567,467 25.86%
Municipal Bonds --- 0.00% $ 15,223,854 7.94%
Non-Agency Mortgage Backed $ 5,375,161 10.78% $ 18,493,951 9.65%
Foreign Corporate Bonds $ 1,962,205 3.93% $ 22,144,027 11.55%
Agency Mortgage Backed --- 0.00% $ 7,593,133 3.96%
Agency Asset Backed --- 0.00% --- 0.00%
U.S. Government $ 8,317,681 16.67% --- 0.00%
Other assets and
liabilities, net $ 474,068 0.95% $ (5,229,047) (2.73%)
Asset Backed --- 0.00% $ 1,227,198 0.64%
Short Terms $ 200,000 0.40% $ 6,939,869 3.62%
Common Stock --- 0.00% $ 3,843 0.00%
Preferred Stocks $ 98,861 0.20% --- 0.00%
Convertible Bonds $ 4,250 0.01% $ 1,406,250 0.74%
Total Net Assets $49,891,196 100.00% $191,686,095 100.00%
TEN LARGEST HOLDINGS (as a percentage of total net assets as of September 30, 2003)
PHOENIX-JANUS FLEXIBLE INCOME SERIES PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME SERIES
------------------------------------ ------------------------------------------------
U.S. Treasury Note 4.25%, 8/15/13 3.0% Russian Federation RegS 5%, 3/31/30 2.8%
U.S. Treasury Note 3%, 7/15/12 2.6% United Mexican States 7.50%, 1/14/12 2.7%
U.S. Treasury 2%, 5/15/06 2.4% Federative Republic of Brazil PIK Interest 2.4%
Capitalization 8%, 4/15/14
Fannie Mae 2.875%, 10/15/05 2.1% Government of Ukraine RegS 11%, 3/15/07 1.6%
Federal Home Loan Bank 5.125%, 3/6/06 2.0% Lehman Brothers Commercial Conduit Mortgage 1.3%
Trust 99-C2, A2 7.325%, 9/15/09
Fannie Mae 3.875% 03/15/05 1.9% Connecticut Mashantucket Western Pequot Tribe 1.3%
Revenue Taxable Series A 144A 6.57%, 9/1/13
Fannie Mae 6.25% 02/01/11 1.8% Republic of Venezuela 9.25%, 9/15/27 1.2%
U.S. Treasury Note 5.75%, 11/15/05 1.4% Petrobras International Finance W.I. 9.125%, 1.2%
7/2/13
22
U.S. Treasury Note 3.25%, 8/15/08 1.2% New Jersey Economic Development Authority 1.1%
Pension Funding Revenue Taxable Series A
7.425%, 2/15/19
British Sky Broadcasting plc 6.875%, 2/23/09 1.2% Federative Republic of Brazil 9.43% 8/20/06 1.1%
LEGAL MATTERS
Matthew A. Swendiman, Counsel for PLIC and Assistant Secretary to the Trust,
has passed upon certain legal matters in connection with the issuance of the
shares of the Surviving Series.
ADDITIONAL FINANCIAL INFORMATION
The table set forth below presents certain financial information for the
Surviving Series. The financial highlights for each year ended December 31 are
derived from the Surviving Series' audited financial statements for that year.
The financial highlights for the six months ended June 30, 2003 are unaudited.
The data should be read in conjunction with the audited financial statements and
related notes, which are incorporated by reference to the Statement of
Additional Information related to this Prospectus/Proxy Statement. The financial
statements for the Surviving Series for prior periods are contained in the
Surviving Series' Annual Report to Shareholders which are incorporated by
reference in the Statement of Additional Information related to this
Prospectus/Proxy Statement.
FINANCIAL HIGHLIGHTS
(SELECTED DATA FROM A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
The financial highlights table is intended to help you understand the
Phoenix-Goodwin Multi-Sector Fixed Income Series' financial performance
throughout the periods indicated. Certain information reflects financial results
for a single share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Series (assuming,
reinvestment of all dividends and distributions). The information has been
audited by PricewaterhouseCoopers LLP, except the six months ended June 30,
2003, which is unaudited. This report and the Series' financial statement are
included in the December 31, 2002 Annual Report, Semiannual Report for the
period ended June 30, 2003, and are incorporated by reference in the Statement
of Additional Information.
23
SURVIVING SERIES
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
SIX MONTHS ENDED
06/30/03
(UNAUDITED) YEAR ENDED DECEMBER 31,
----------- --------------------------------------------------------------------
2002 2001(4) 2000 1999 1998
---- ---- ---- ---- ----
Net asset value, beginning of period $ 8.76 $ 8.55 $ 8.75 $ 8.92 $ 9.18 $10.38
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.29 0.61 0.72(3) 0.75 0.73 0.77
Net realized and unrealized gain (loss) 0.50 0.22 (0.21) (0.19) (0.24) (1.17)
------------- ----------- ---------- ---------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 0.79 0.83 0.51 0.56 0.49 (0.40)
------------- ----------- ---------- ---------- ----------- -----------
LESS DISTRIBUTIONS
Dividends from net investment income (0.35) (0.62) (0.71) (0.73) (0.75) (0.74)
Dividends from net realized gains --- --- --- --- --- (0.06)
------------- ----------- ---------- ---------- ----------- -----------
TOTAL DISTRIBUTIONS (0.35) (0.62) (0.71) (0.73) (0.75) (0.80)
------------- ----------- ---------- ---------- ----------- -----------
CHANGE IN NET ASSET VALUE 0.44 0.21 (0.20) (0.17) (0.26) (1.20)
------------- ----------- ---------- ---------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $ 9.20 $ 8.76 $ 8.55 $ 8.75 $ 8.92 $ 9.18
============= =========== ========== ========== =========== ===========
Total return 9.16%(6) 10.00% 6.09% 6.47% 5.46% (4.02)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousand) $197,572 $178,990 $167,229 $160,101 $172,836 $187,363
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) 0.73%(2,5) 0.69%(2) 0.65%(2) 0.65% 0.65% 0.64%
Net investment income 6.61%(5) 7.05% 8.14% 8.45% 7.79% 7.61%
Portfolio turnover 70%(6) 168% 188% 148% 125% 160%
- --------------------------
(1) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 0.71%, 0.69%
and 0.71% for the periods ended December 31, 2001, 2000 and 1999, respectively.
(2) 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.
(3) Computed using average shares outstanding.
(4) As required, effective January 1, 2001, the Fund has adopted the provisions
of AICPA Audit and Accounting Guide for Investment Companies and began
amortizing premium on debt securities and including paydown gains and losses in
interest income. The effect of this change for the year ended December 31, 2001
was to increase the ratio of net investment income to average net assets from
8.13% to 8.14%. There was no effect to net investment income per share and net
realized and unrealized gain (loss) per share. Per share ratios and supplemental
data for prior periods have not been restated to reflect this change.
(5) Annualized.
(6) Not annualized.
24
FUTURE SHAREHOLDER MEETINGS
As a Massachusetts business trust, the Trust does not hold shareholder
meetings, unless required by the 1940 Act. Other than this meeting, the Trust
does not anticipate holding a meeting of shareholders of the Series in 2004.
Shareholders who wish to present a proposal for action at the next meeting
should submit the proposal to:
Richard J. Wirth
Secretary, The Phoenix Edge Series Fund
c/o Phoenix Life Insurance Company
One American Row
PO Box 5056
Hartford, CT 06102-5056
Proposals must be received a reasonable time prior to the date of the
shareholder meeting to be considered for inclusion in the proxy materials for
the meeting. Timely submission of a proposal does not, however, necessarily mean
that the proposal will be submitted for consideration by shareholders.
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 Merging Series' shareholders arise,
however, the proxies will vote thereon according to their best judgment in the
interests of the Merging Series and the shareholders of the Merging Series.
By Order of the Board of Trustees,
RICHARD J. WIRTH
Secretary
Hartford, Connecticut
February , 2004
25
APPENDIX A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 17th day of March, 2004, by and between The Phoenix Edge Series Fund, a
Massachusetts business trust (the "Trust"), with its principal place of business
at 101 Munson Street, Greenfield, Massachusetts 01301, on behalf of the
Phoenix-Goodwin Multi-Sector Fixed Income Series (the "Surviving Series"), a
separate series of the Trust, and the Trust, on behalf of the Phoenix-Janus
Flexible Income Series (the "Merging Series"), another separate series of the
Trust.
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"). The
reorganization (the "Reorganization") will consist of the transfer of all of the
assets of the Merging Series to the Surviving Series in exchange solely for
voting shares of beneficial interest of 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 the
Trust, an open-end, registered investment company of the management type. The
Merging Series owns securities which generally are assets of the character in
which the Surviving Series is permitted to invest.
The Trustees of the Trust have determined, with respect to the
Surviving Series, that the exchange of all of the assets of the Merging Series
for Surviving Series Shares and the assumption of all liabilities of the Merging
Series by the Surviving Series 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 this transaction.
The Trustees of the Trust, have also determined, with respect to the
Merging Series, that the exchange of all of the assets of the Merging Series for
Surviving Series Shares and the assumption of all liabilities of the Merging
Series by the Surviving Series 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 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
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 at 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 interests 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").
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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, "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.
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 Trust's 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 Trust's 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 Merging Series' 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 the Trust.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be March 19, 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 Trust or at such
other time and/or place as the parties may agree.
3.2 The Trust shall direct State Street Bank and Trust Company, 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
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that (i) the Assets shall have been delivered in proper form to the Surviving
Series on the next business day following the Closing Date, 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 by
the Merging Series Custodian to JP Morgan Chase Bank, as custodian for the
Surviving Series for examination 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 as of 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 Investment Company Act of 1940, as amended (the "1940
Act"). The cash to be transferred by the Merging Series shall be delivered by
wire transfer of federal funds on the Closing Date.
3.3 The Trust shall direct the Variable Products Operations Unit of
Phoenix Life Insurance Company (the "Transfer Agent"), on behalf of the Merging
Series, to deliver on the next business day following the Closing, a certificate
of 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 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 Trust, 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 Trust, on behalf of the Merging Series, represents and
warrants as follows:
(a) The Merging Series is duly organized as a series of the Trust,
which is a business trust duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts, with power under the
Trust's 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 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 and each prospectus and statement of additional
information of the Merging Series used at all times previous to the date of this
Agreement 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
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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 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 Trust, 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 Trust's Declaration of Trust or of any agreement, indenture,
instrument, contract, lease or other undertaking to which the 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, instrument, contract, lease, judgment or decree to which the 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
Trust, 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 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 Trust, on behalf of the Merging Series, knows of no
facts which 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 its
business or its ability to consummate the transactions herein contemplated;
(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 (copies
of which have been furnished to the Surviving Series) 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 of
Merging Series 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
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investment company, has been (or will be) eligible to 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 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, 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. The Merging Series does not have outstanding any options, warrants or other
rights to subscribe for or 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 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; and
(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.
4.2 The Trust, on behalf of the Surviving Series, represents and
warrants as follows:
(a) The Surviving Series is duly organized as a series of the
Trust, which is a business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts with power under
the Trust's Declaration of Trust to own all of its Assets and to carry on its
business as it is now being conducted;
(b) The 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 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 and each prospectus and statement of additional
information of the Surviving Series used during the three years previous to
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the date of this Agreement 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 Trust, 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 Trust's Declaration of Trust or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the Trust
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 Trust 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
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 Trust 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 Trust on behalf of the Surviving Series knows of no facts which
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;
(h) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets and Schedule of Investments of the
Surviving Series at December 31, 2002, 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;
(i) Since December 31, 2002, 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 and has been eligible to and has computed (or will compute)
its federal income tax under Section 852 of the Code.
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(l) All issued and outstanding Surviving Series Shares are, and on
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable (recognizing that, under Massachusetts law, it is
theoretically possible that shareholders of the Merging Series could, under
certain circumstances, be held personally liable for obligations of the Merging
Series) 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. The Surviving Series does not have outstanding any
options, warrants or other rights to subscribe for or purchase any Surviving
Series Shares, nor is there outstanding any security convertible into any
Surviving Series Shares;
(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 Trust on behalf of the Surviving Series
and this Agreement will constitute a valid and binding obligation of the Trust
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 (recognizing that,
under Massachusetts law, it is theoretically possible that shareholders of the
Merging Series could, under certain circumstances, be held personally liable for
obligations of the Merging Series);
(o) The information to be furnished by the Trust for use in the
registration statements, proxy materials and other documents 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; and
(p) That insofar as it relates to the Surviving Series, the
Registration Statement relating to the Surviving Series Shares issuable
hereunder, and the proxy materials of the Merging Series to be included in the
Registration Statement, and any amendment or supplement to the foregoing, will,
from the effective date 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.
5. COVENANTS OF THE TRUST ON BEHALF OF THE SURVIVING SERIES AND THE
MERGING SERIES
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 Trust will call a meeting of the shareholders of the
Merging Series to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
5.3 The Merging Series 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 Surviving
Series and the Merging Series 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.
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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 Surviving Series and the Merging Series shall each use its
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent to effect the transactions contemplated by this Agreement as promptly
as practicable.
5.7 The Trust, on behalf of the Merging Series, covenants that it
will, from time to time, as and when reasonably requested by the Trust 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 Trust on behalf of the Surviving Series may
reasonably deem necessary or desirable in order to vest in and confirm (a) the
Trust's, on behalf of the Merging Series', title to and possession of the
Surviving Series Shares to be delivered hereunder, and (b) the Trust's, on
behalf of the Surviving Series', title to and possession of all the assets, and
to carry out the intent and purpose of this Agreement.
5.8 The Surviving Series will use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act and such
of the state blue sky or securities laws as may be necessary in order to
continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE MERGING SERIES
The obligations of the Trust, on behalf of the Merging Series, to
consummate the transactions provided for herein shall be subject, at the Trust's
election, to the performance by the Trust, 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 Trust, 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 Trust, 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 Trust, on behalf of
the Surviving Series on or before the Closing Date;
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 Trust, on behalf of the Surviving Series, to
complete the transactions provided for herein shall be subject, at the Trust's
election, to the performance by the 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 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 Trust shall have delivered to the Surviving Series a
statement of the Merging Series' assets and liabilities, as of the Closing Date,
certified by the Treasurer of the Trust;
A-8
7.3. The 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 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; and (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 Trust, on behalf of the Merging
Series, or the Trust, 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 Trust's
Declaration of Trust, applicable Massachusetts law and the 1940 Act.
Notwithstanding anything herein to the contrary, neither the Trust 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 its 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 Trust 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 opinion of _______________,
counsel to the Trust, addressed to the Trust substantially to the effect that,
based upon certain facts, assumptions, and representations, the transaction
contemplated by this Agreement, shall 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 representations it shall
request of the Trust. Notwithstanding anything herein to the contrary, the Trust
may not waive the condition set forth in this paragraph 8.5.
9. BROKERAGE FEES AND EXPENSES
9.1 The Trust on behalf of the Merging Series and the Trust 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 will be
borne by Phoenix Life Insurance Company. 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
A-9
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 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 Trust has not made any representation, warranty or
covenant not set forth herein; 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 by (i) mutual agreement of the parties,
or (ii) by 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) by 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 Trust;
provided, however, that following the meeting of the shareholders of the Merging
Series called by the Merging Series 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
Phoenix Edge Series Fund, One American Row, P. O. Box 5056, Hartford, CT
06102-5056, Attn: Richard J. Wirth, Esq.
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.
14.3 This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts 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.
A-10
14.5 It is expressly agreed that the obligations of the parties
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Trust personally, but shall bind only the
trust property of the Surviving Series, as provided in the Declaration of Trust
of the Trust. The execution and delivery by such officers 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 such party as
provided in the Declaration of Trust.
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: THE PHOENIX EDGE SERIES FUND ON BEHALF
OF ITS PHOENIX-JANUS FLEXIBLE
INCOME SERIES
_________________________________ By: ________________________________
SECRETARY
Title: _______________________________
Attest: THE PHOENIX EDGE SERIES FUND ON BEHALF
OF ITS PHOENIX-GOODWIN MULTI-SECTOR
FIXED INCOME SERIES
_________________________________ By: ________________________________
SECRETARY
Title: _______________________________
A-11
PART B
STATEMENT OF ADDITIONAL INFORMATION
Acquisition of the assets of
JANUS-FLEXIBLE INCOME SERIES
By and in exchange for shares of
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME SERIES
Both a series of
THE PHOENIX EDGE SERIES FUND
101 Munson Street
Greenfield, Massachusetts 01301
(800) 541-0171
February __, 2004
This Statement of Additional Information, relating specifically to the
proposed transfer of all or substantially all of the assets and all the
liabilities of Phoenix-Janus Flexible Income Series (the "Merging Series"), to
the Phoenix-Goodwin Multi-Sector Fixed Income Series (the "Surviving Series"),
both a series of The Phoenix Edge Series Fund, consists of this cover page and
the following described documents:
1) the Statement of Additional Information of The Phoenix Edge Series
Fund, as filed via EDGAR on Form N-1A on April 30, 2003 with
Post-Effective Amendment No. 46, and supplements dated May 1,
2003, May 8, 2003, June 2, 2003, June 11, 2003, July 24, 2003,
October 15, 2003 and November 5, 2003 to the Prospectus dated May
1, 2003 and incorporated by reference;
2) the Annual Report of The Phoenix Edge Series Fund for the year
ended December 31, 2002, as filed via EDGAR on Form N-30D on March
5, 2003 and incorporated by reference;
3) Semi-Annual Report of The Phoenix Edge Series Fund for the
six-month period ended June 30, 2003, as filed via EDGAR on Form
CSRS on September 5, 2003 and incorporated by reference; and
4) 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 February __, 2004. A copy of the Prospectus/Proxy Statement
may be obtained without charge by calling Variable Products Operations ("VPO")
at 800-541-0171 or by writing to Phoenix Variable Products Mail Operations at PO
Box 8027, Boston, Massachusetts 02266-8027.
The date of this Statement of Additional Information is February __,
2004.
Phoenix-Goodwin Multi-Sector Fixed Income Series / Phoenix-Janus Flexible Income Series
Pro Forma Combining Schedule of Investments
September 30, 2003 (Unaudited)
Shares or Par Value (in thousands) Value
=============== ============== =========== ====================================== =============== ============== ===========
Phoenix-Goodwin Phoenix-Janus Phoenix-Goodwin Phoenix-Janus
Multi-Sector Flexible Pro Forma Multi-Sector Flexible Pro Forma
Fixed Income Income Combining DESCRIPTION Fixed Income Income Combining
Series Series Portfolios Series Series Portfolios
=============== ============== =========== ====================================== =============== ============== ===========
U.S. GOVERNMENT SECURITIES--3.4%
- 1,195 1,195 U.S. Treasury Bond 2%, 5/15/06 - 1,203,262 1,203,262
- 250 250 U.S. Treasury Bond 3.125%, 9/15/08 - 253,477 253,477
- 560 560 U.S. Treasury Bond 5.375%, 2/15/31 - 600,950 600,950
- 425 425 U.S. Treasury Bond 7.25%, 5/15/16 - 543,402 543,402
- 1,170 1,170 U.S. Treasury Inflationary Note 3%,
7/15/12(l) - 1,311,209 1,311,209
- 240 240 U.S. Treasury Note 2.375%, 8/15/06 - 243,328 243,328
- 607 607 U.S. Treasury Note 3.25%, 8/15/08 - 619,661 619,661
- 564 564 U.S. Treasury Note 4.375%, 5/15/07 - 605,463 605,463
- 1,475 1,475 U.S. Treasury Note 4.75%, 8/15/13 - 1,512,048 1,512,048
- 350 350 U.S. Treasury Note 5%, 2/15/11 - 383,797 383,797
- 622 622 U.S. Treasury Note 5.75%, 11/15/05 - 676,717 676,717
- 264 264 U.S. Treasury Note 6%, 8/15/09 - 305,033 305,033
- 50 50 U.S. Treasury Note 6.50%, 2/15/10 - 59,334 59,334
---------- ----------- ----------
TOTAL U.S. GOVERNMENT SECURITIES - 8,317,681 8,317,681
AGENCY MORTGAGE-BACKED SECURITIES--3.1%
7,196 - 7,196 GNMA 6.50%, '23-'32 7,560,121 - 7,560,121
30 - 30 GNMA 8%, 10/15/06 31,995 - 31,995
1 - 1 GNMA 8%, 9/15/06 1,017 - 1,017
---------- ----------- ----------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES 7,593,133 - 7,593,133
AGENCY NON MORTGAGE-BACKED SECURITIES--2.2%
- 1,000 1,000 Fannie Mae 2.875%, 10/15/05 - 1,024,687 1,024,687
- 515 515 Fannie Mae 3.25%, 11/15/07 - 523,041 523,041
- 895 895 Fannie Mae 3.875%, 3/15/05 - 927,809 927,809
- 220 220 Fannie Mae 4.375%, 9/15/12 - 221,632 221,632
- 175 175 Fannie Mae 4.625%, 5/1/13 - 173,941 173,941
- 538 538 Fannie Mae 5.25%, 1/15/09 - 588,914 588,914
- 800 800 Fannie Mae 6.25%, 2/1/11 - 899,032 899,032
- 945 945 Federal Home Loan Bank 5.125%, 3/6/06 - 1,016,105 1,016,105
---------- ----------- ----------
TOTAL AGENCY NON MORTGAGE-BACKED SECURITIES - 5,375,161 5,375,161
MUNICIPAL BONDS--6.3%
750 - 750 California Alameda Corridor
Transportation Authority Revenue
Taxable Series C 6.50%, 10/1/19 837,622 - 837,622
1,750 - 1,750 California Alameda Corridor
Transportation Authority Revenue
Taxable Series C 6.60%, 10/1/29 1,939,280 - 1,939,280
1,100 - 1,100 Connecticut Mashantucket Western
Pequot Tribe Revenue Taxable
Series A 6.91%, 9/1/12(a) 1,268,982 - 1,268,982
2,140 - 2,140 Connecticut Mashantucket Western
Pequot Tribe Revenue Taxable
Series A 144A 6.57%, 9/1/13(a) 2,418,457 - 2,418,457
1,310 - 1,310 Florida University of Miami
Exchangeable Revenue Taxable
Series A 7.65%, 4/1/20 1,446,843 - 1,446,843
1,330 - 1,330 Illinois Educational Facilities
Authority - Loyola University
Revenue Taxable Series C 7.12%, 7/1/11 1,561,314 - 1,561,314
1,500 - 1,500 Massachusetts Port Authority Revenue
Taxable Series C 6.35%, 7/1/06 1,653,030 - 1,653,030
1,750 - 1,750 New Jersey Economic Development
Authority Pension Funding Revenue
Taxable Series A 7.425%, 2/15/19 2,154,862 - 2,154,862
337 - 337 South Dakota Educational Enhancement
Funding Corp. Revenue Taxable
Series A 6.72%, 6/1/25 319,610 - 319,610
1,495 - 1,495 Texas State University System Revenue
Taxable 6.16%, 3/15/06 1,623,854 - 1,623,854
---------- ----------- ----------
TOTAL MUNICIPAL BONDS 15,223,854 - 15,223,854
ASSET-BACKED SECURITIES--0.5%
541 - 541 Arc Net Interest Margin Trust 02-9A,
A 7.75%, 12/27/32 536,814 - 536,814
768 - 768 Litigation Settlement Monetized Fee
Trust 02-5A 144A 6%, 10/25/10(a) 690,384 - 690,384
---------- ----------- ----------
TOTAL ASSET-BACKED SECURITIES 1,227,198 - 1,227,198
CORPORATE BONDS--43.1%
1,000 - 1,000 ACC Escrow Corp. 144A 10%, 8/1/11(a) 1,072,500 - 1,072,500
650 - 650 Agco Corp. 8.50%, 3/15/06 654,062 - 654,062
- 60 60 Allied Waste North America Series B 10%,
8/1/09 - 65,325 65,325
500 - 500 Allied Waste North America Series B 7.845%,
1/1/09 521,250 - 521,250
- 65 65 AMC Entertainment, Inc. 9.875%, 2/1/12 - 71,175 71,175
- 90 90 AmerenEnergy 7.95%, 6/1/32 - 111,118 111,118
500 - 500 American Axle & Manufacturing, Inc. 9.75%,
3/1/09 540,625 - 540,625
- 250 250 Americo Life, Inc. 144A 7.875%, 5/1/13(a) - 250,938 250,938
1,000 - 1,000 Amerigas Partners/Amerigas Eagle Finance
Corp. Series B 8.875%, 5/20/11 1,077,500 - 1,077,500
1,000 - 1,000 AmerisourceBergen Corp. 8.125%, 9/1/08 1,090,000 - 1,090,000
- 100 100 Anheuser-Busch Cos., Inc. 5.95%, 1/15/33 - 105,148 105,148
- 250 250 AOL Time Warner, Inc. 5.625%, 5/1/05 - 263,745 263,745
- 275 275 AOL Time Warner, Inc. 6.875%, 5/1/12 - 308,558 308,558
- 288 288 Apple Computer, Inc. 6.50%, 2/15/04 - 292,320 292,320
- 110 110 ARAMARK Services, Inc. 6.375%, 2/15/08 - 119,585 119,585
- 145 145 ARAMARK Services, Inc. 7%, 5/1/07 - 161,668 161,668
1,000 - 1,000 AutoNation, Inc. 9%, 8/1/08 1,125,000 - 1,125,000
- 200 200 Autozone, Inc. 5.875%, 10/15/12 - 214,999 214,999
- 75 75 Ball Corp. 144A 6.875%, 12/15/12(a) - 77,719 77,719
625 50 675 Ball Corp. 6.875%, 12/15/12 647,656 51,812 699,468
- 180 180 Bank of New York Co., Inc. (The) Series
MTNE 2.20%, 5/12/06 - 181,074 181,074
- 165 165 Belo Corp. 7.125%, 6/1/07 - 186,833 186,833
- 75 75 Belo Corp. 8%, 11/1/08 - 89,365 89,365
- 150 150 Berkley (W.R.) Corp. 5.875%, 2/15/13 - 155,870 155,870
- 150 150 Berkshire Hathaway, Inc. 144A 4.625%,
10/15/13(a) - 151,136 151,136
- 150 150 Brown-Forman Corp. 2.125%, 3/15/06 - 150,564 150,564
750 - 750 Cabot Corp. 144A 5.25%, 9/1/13(a) 759,356 - 759,356
1,000 - 1,000 Calpine Corp. 144A 8.75%, 7/15/13(a) 920,000 - 920,000
- 125 125 Capital One Bank 5.75%, 9/15/10 - 131,566 131,566
1,000 - 1,000 Capital One Bank 6.50%, 6/13/13 1,023,490 - 1,023,490
- 200 200 Caterpillar Financial Services Corp.
Series MTNF 2.35%, 9/15/06 - 199,907 199,907
- 175 175 Cendant Co. 6.25%, 3/15/10 - 190,546 190,546
- 125 125 Centerpoint Energy 144A 5.875%, 6/1/08(a) - 125,771 125,771
1,000 125 1,125 Centerpoint Energy 144A 6.85%, 6/1/15(a) 977,166 122,146 1,099,312
- 50 50 Centerpoint Energy Corp. 6.50%, 2/1/08 - 53,182 53,182
1,100 - 1,100 Centerpoint Energy Houston 144A 5.75%,
1/15/14(a) 1,157,606 - 1,157,606
1,500 - 1,500 Chesapeake Energy Corp. 8.375%, 11/1/08 1,635,000 - 1,635,000
- 260 260 ChevronTexaco Capital Co. 3.50%, 9/17/07 - 267,006 267,006
- 180 180 Cinergy Corp. 6.25%, 9/1/04 - 187,026 187,026
- 75 75 Cintas Corp. 6%, 6/1/12 - 83,218 83,218
- 175 175 Citigroup, Inc. 4.875%, 5/7/15 - 174,027 174,027
- 50 50 Citizens Banking Corp. 144A 5.75%,
2/1/13(a) - 50,366 50,366
- 21 21 Clear Channel Communications, Inc. 6%,
11/1/06 - 22,900 22,900
- 100 100 CMS Energy Corp. 144A 7.75%, 8/1/10(a) - 99,500 99,500
- 125 125 CMS Energy Corp. 7.50%, 1/15/09 - 124,375 124,375
- 100 100 CMS Energy Corp. 7.625%, 11/15/04 - 102,000 102,000
- 250 250 Coca Cola Enterprises, Inc. 4.375%,
9/15/09 - 259,214 259,214
- 133 133 Coca Cola Enterprises, Inc. 7.125%,
8/1/17 - 162,609 162,609
1,000 - 1,000 Comcast Cable Communications, Inc. 6.75%,
1/30/11 1,127,699 - 1,127,699
- 50 50 Comcast Corp. 5.30%, 1/15/14 - 50,470 50,470
- 225 225 Comcast Corp. 5.50%, 3/15/11 - 236,631 236,631
- 150 150 Comcast Corp. 5.85%, 1/15/10 - 162,209 162,209
- 300 300 Comcast Corp. 6.375%, 1/30/06 - 325,951 325,951
1,200 - 1,200 Commonwealth Edison 4.74%, 8/15/10 1,244,623 - 1,244,623
- 340 340 Conoco Funding Co. 5.45%, 10/15/06 - 370,065 370,065
- 235 235 Coors (Adolph) Co. 6.375%, 5/15/12 - 261,907 261,907
1,000 - 1,000 Coventry Health Care, Inc. 8.125%,
2/15/12 1,070,000 - 1,070,000
- 300 300 Cox Communications, Inc. 6.875%, 6/15/05 - 324,396 324,396
- 20 20 Cox Communications, Inc. 7.125%, 10/1/12 - 23,096 23,096
- 25 25 Cox Enterprises, Inc. 144A 4.375%, 5/1/08(a) - 25,661 25,661
- 95 95 CSX Corp. 4.875%, 11/1/09 - 99,626 99,626
- 175 175 CVS Corp. 3.875%, 11/1/07 - 178,672 178,672
- 225 225 DaimlerChrysler NA Holdings Corp. 4.05%,
6/4/08 - 222,727 222,727
- 400 400 Dean Foods Co. 6.625%, 5/15/09 - 420,000 420,000
- 50 50 Dean Foods Co. 6.90%, 10/15/17 - 50,000 50,000
550 55 605 Del Monte Corp. 144A 8.625%, 12/15/12(a) 603,625 60,362 663,987
- 30 30 Del Monte Corp. Series B 9.25%, 5/15/11 - 33,075 33,075
1,000 - 1,000 Denbury Resources, Inc. 144A 7.50%,
4/1/13(a) 1,017,500 - 1,017,500
- 175 175 Devon Energy Corp. 2.75%, 8/1/06 - 176,288 176,288
- 90 90 Dex Media East LLC 12.125%, 11/15/12 - 109,125 109,125
- 25 25 Dex Media East LLC 9.875%, 11/15/09 - 28,437 28,437
- 75 75 Dex Media West/Dex Media Finance
Co. 144A 9.845%, 8/15/13(a) - 84,188 84,188
- 300 300 Dial Corp. (The) 6.50%, 9/15/08 - 330,964 330,964
- 280 280 Dial Corp. (The) 7%, 8/15/06 - 313,090 313,090
1,250 - 1,250 DirectTV Holdings LLC 144A 8.375%,
3/15/13(a) 1,415,625 - 1,415,625
850 - 850 Dobson Communications Corp. 144A 8.875%,
10/1/13(a) 863,813 - 863,813
- 185 185 Dominion Resources, Inc. 2.80%, 2/15/05 - 187,193 187,193
- 175 175 Dominion Resources, Inc. 5%, 3/15/13 - 175,387 175,387
- 100 100 Dominion Resources, Inc. Series D 5.125%,
12/15/09 - 105,309 105,309
- 40 40 Domino's, Inc. 144A 8.25%, 7/1/11(a) - 42,450 42,450
1,000 - 1,000 Eastman Kodak Co. Series MTNA 3.625%,
5/15/08 921,723 - 921,723
1,500 125 1,625 Echostar DBS Corp. 144A 5.75%, 10/1/08(a) 1,509,375 125,781 1,635,156
1,000 - 1,000 Echostar DBS Corp. 144A 6.375%, 10/1/11(a) 1,005,000 - 1,005,000
- 133 133 Echostar DBS Corp. 9.125%, 1/15/09 - 151,287 151,287
1,000 - 1,000 Entergy Gulf States 144A 3.60%, 6/1/08(a) 973,640 - 973,640
- 50 50 Farmers Insurance Exchange 144A 8.50%,
8/1/04(a) - 51,019 51,019
- 75 75 Fiserv, Inc. 144A 4%, 4/15/08(a) - 75,868 75,868
- 400 400 Ford Motor Credit Co. 5.75%, 2/23/04 - 406,540 406,540
- 75 75 Ford Motor Credit Co. 7%, 10/1/13 - 75,476 75,476
875 - 875 Ford Motor Credit Co. 7.25%, 10/25/11 913,149 - 913,149
- 125 125 Franklin Resources, Inc. 3.70%, 4/15/08 - 126,750 126,750
500 175 675 Freeport-McMoRan Copper & Gold, Inc.
10.125%, 2/1/10 561,250 196,437 757,687
- 25 25 Fresenius Medical Capital Trust IV 7.875%,
6/15/11 - 26,250 26,250
- 250 250 Fund American Cos., Inc. 5.875%, 5/15/13 - 254,392 254,392
- 265 265 Gannett Co., Inc. 4.95%, 4/1/05 - 278,011 278,011
- 500 500 General Electric Capital Corp. Series
MTNA 2.85%, 1/30/06 - 510,034 510,034
1,750 120 1,870 General Electric Capital Corp. Series
MTNA 6%, 6/15/12 1,917,851 131,510 2,049,361
- 175 175 General Mills, Inc. 3.875%, 11/30/07 - 179,285 179,285
- 125 125 General Mills, Inc. 5.125%, 2/15/07 - 134,504 134,504
- 75 75 General Mills, Inc. 6%, 2/15/12 - 82,274 82,274
- 500 500 General Motors Acceptance Corp. 4.50%,
7/15/16 - 510,643 510,643
- 125 125 General Motors Acceptance Corp. 5.125%,
5/9/08 - 127,753 127,753
500 75 575 General Motors Acceptance Corp. 6.875%,
9/15/11 519,002 77,850 596,852
1,500 - 1,500 General Motors Corp. 7.125%, 7/15/13 1,573,459 - 1,573,459
- 125 125 Gillette Co. 4.125%, 8/30/07 - 130,383 130,383
1200 - 1,200 Goldman Sachs Group, Inc. 4.75%, 7/18/13 1,187,596 - 1,187,596
- 125 125 Greenpoint Financial Corp. 144A 3.20%,
6/6/08(a) - 121,563 121,563
1,000 - 1,000 Gulfterra Energy Partner W.I. 144A 6.25%,
6/1/10(a) 1,000,000 - 1,000,000
- 50 50 Gulfterra Energy Partners 144A 8.50%,
6/1/10(a) - 54,125 54,125
- 125 125 Hard Rock Hotel, Inc. 144A 8.875%,
6/1/13(a) - 132,344 132,344
- 375 375 HCA, Inc. 6.25%, 2/15/13 - 380,270 380,270
900 - 900 HCA, Inc. 6.30%, 10/1/12 917,302 - 917,302
- 355 355 HCA, Inc. 6.91%, 6/15/05 - 374,821 374,821
- 135 135 HCA, Inc. 6.95%, 5/1/12 - 143,214 143,214
- 115 115 Hertz Corp. 4.70%, 10/2/06 - 115,532 115,532
- 215 215 HMH, Inc. Series A 7.875%, 8/1/05 - 221,450 221,450
1,025 - 1,025 Hollywood Entertainment Corp. 9.625%,
3/15/11 1,119,812 - 1,119,812
- 150 150 Household Finance Corp. 4.625%, 1/15/08 - 157,686 157,686
1,000 - 1,000 Household Finance Corp. 6.375%, 11/27/12 1,109,378 - 1,109,378
- 125 125 Household Finance Corp. Series MTN 3.375%,
2/21/06 - 128,373 128,373
100 - 100 IASIS Healthcare Corp. 13%, 10/15/09 112,750 - 112,750
- 225 225 International Business Machines Corp.
2.375%, 11/1/06 - 226,284 226,284
- 125 125 International Business Machines Corp.
4.25%, 9/15/09 - 129,931 129,931
- 125 125 International Business Machines Corp.
4.75%, 11/29/12 - 128,071 128,071
- 150 150 International Business Machines Corp.
5.875%, 11/29/32 - 153,266 153,266
- 75 75 International Paper Co. 5.85%, 10/30/12 - 79,827 79,827
1,500 50 1,550 Jabil Circuit, Inc. 5.875%, 7/15/10 1,557,906 51,930 1,609,836
1,000 - 1,000 Janus Capital Group, Inc. 7.75%, 6/15/09 1,144,410 - 1,144,410
- 80 80 John Deere Capital Corp. Series MTND
4.125%, 7/15/05 - 83,310 83,310
- 125 125 Kaneb Pipe Line Opportunity Partnership
5.875%, 6/1/13 - 127,434 127,434
- 150 150 Kellogg Co. 2.875%, 6/1/08 - 147,327 147,327
- 225 225 Kellogg Co. Series B 6%, 4/1/06 - 246,613 246,613
- 200 200 Kellogg Co. Series B 6.60%, 4/1/11 - 228,435 228,435
- 225 225 Kennametal, Inc. 7.20%, 6/15/12 - 243,223 243,223
- 98 98 Kern River Funding Corp. 144A 4.893%,
4/30/18(a) - 98,847 98,847
- 155 155 Kroger Co. 7.375%, 3/1/05 - 166,190 166,190
- 310 310 Kroger Co. 7.45%, 3/1/08 - 359,361 359,361
750 - 750 Laboratory Corp. of America Holdings 5.50%,
2/1/13 785,029 - 785,029
1,000 - 1,000 Leucadia National Corp. 144A 7%, 8/15/13(a) 990,000 - 990,000
1,250 - 1,250 Liberty Media Corp. 5.70%, 5/15/13 1,248,080 - 1,248,080
- 245 245 Liberty Mutual Insurance Co. 144A 7.875%,
10/15/26(a) - 214,208 214,208
- 100 100 Liberty Mutual Insurance Co. 144A 8.50%,
5/15/25(a) - 91,151 91,151
1,045 60 1,105 Magnum Hunter Resources, Inc. 9.60%,
3/15/12 1,144,275 65,700 1,209,975
- 300 300 Manor Care Inc. 144A 6.25%, 5/1/13(a) - 307,500 307,500
- 250 250 Markel Corp. 6.80%, 2/15/13 - 272,756 272,756
- 175 175 Medco Health Solutions 7.25%, 8/15/13 - 186,528 186,528
- 150 150 Mellon Funding Corp. 5%, 12/1/14 - 153,252 153,252
1,000 - 1,000 Merrill Lynch & Co. Series MTNB 5.30%,
9/30/15 1,024,979 - 1,024,979
800 - 800 MGM Mirage, Inc. 8.50%, 9/15/10 900,000 - 900,000
- 200 200 MidAmerican Energy Holdings 144A 3.50%,
5/15/08(a) - 198,425 198,425
- 100 100 Miller Brewing Co. 144A 5.50%, 8/15/13(a) - 104,484 104,484
1,500 - 1,500 Mobile Mini, Inc. 144A 9.50%, 7/1/13(a) 1,612,500 - 1,612,500
1,560 - 1,560 Mohegan Tribal Gaming Authority 8.125%,
1/1/06 1,690,650 - 1,690,650
1,000 - 1,000 Motiva Enterprises LLC 144A 5.20%,
9/15/12(a) 1,005,000 - 1,005,000
- 225 225 National Rural Utilities Cooperative
Finance Corp. 5.75%, 8/28/09 - 227,347 227,347
- 125 125 Nationwide Financial Services, Inc. 5.625%,
2/13/15 - 130,174 130,174
- 100 100 Nationwide Mutual Insurance Co. 7.50%,
2/15/24 - 104,453 104,453
- 100 100 New York Life Insurance Co. 144A 5.875%,
5/15/33(a) - 100,045 100,045
- 100 100 Newell Rubbermaid, Inc. 4%, 5/1/10 - 96,338 96,338
- 250 250 News America, Inc. 6.625%, 1/9/08 - 280,460 280,460
- 125 125 Nextel Communications, Inc. 9.375%,
11/15/09 - 136,250 136,250
- 75 75 Northern States Power Co. 2.875%, 8/1/06 - 76,031 76,031
- 130 130 Occidental Petroleum Corp. 5.875%,
1/15/07 - 143,169 143,169
- 80 80 Occidental Petroleum Corp. Series
MTN 4.25%, 3/15/10 - 81,347 81,347
1,925 - 1,925 Office Depot, Inc. 6.25%, 8/15/13 2,022,213 - 2,022,213
1,000 - 1,000 Omnicare, Inc. 6.125%, 6/1/13 985,000 - 985,000
- 50 50 Owens-Brockway Glass Container,
Inc. 144A 7.75%, 5/15/11(a) - 52,000 52,000
- 100 100 Owens-Brockway Glass Container,
Inc. 8.75%, 11/15/12 - 107,750 107,750
- 140 140 Owens-Brockway Glass Container,
Inc. 8.875%, 2/15/09 - 149,800 149,800
- 75 75 Owens-Illinois, Inc. 7.15%, 5/15/05 - 77,063 77,063
- 50 50 Packaging Corp. of America 144A 4.375%,
8/1/08(a) - 50,332 50,332
- 175 175 Packaging Corp. of America 144A 5.75%,
8/1/13(a) - 177,736 177,736
- 100 100 Panhandle Eastern Pipe Line 144A 4.80%,
8/15/08(a) - 103,189 103,189
375 - 375 Peabody Energy Corp Series B 6.875%,
3/15/13 392,812 - 392,812
- 300 300 Pemex Project Funding Master Trust
144A 6.125%, 8/15/08(a) - 318,000 318,000
1,000 - 1,000 Pemex Project Funding Master Trust
144A 7.375%, 12/15/14(a) 1,075,000 - 1,075,000
- 100 100 Pemex Project Funding Master Trust
7.375%, 12/15/14 - 107,500 107,500
- 75 75 Pemex Project Funding Master Trust
7.875%, 2/1/09 - 85,500 85,500
- 250 250 Pemex Project Funding Master Trust
8.625%, 2/1/22 - 278,750 278,750
1,000 - 1,000 Pemex Project Funding Master Trust
9.125%, 10/13/10 1,197,500 - 1,197,500
- 145 145 Penney (J.C.) & Co., Inc. 6%, 5/1/06 - 146,812 146,812
1,000 - 1,000 Phelps Dodge Corp. 8.75%, 6/1/11 1,210,513 - 1,210,513
- 175 175 PHH Corp. 6%, 3/1/08 - 189,004 189,004
750 - 750 Premcor Refining Group, Inc.
(The) 144A 9.25%, 2/1/10(a) 821,250 - 821,250
- 195 195 Procter and Gamble Co. (The) 4.75%,
6/15/07 - 209,005 209,005
- 75 75 Progressive Corp. 6.25%, 12/1/32 - 79,823 79,823
- 75 75 Provident Companies, Inc. 6.375%,
7/15/05 - 78,750 78,750
- 150 150 Public Service Co. of Colorado
144A 4.875%, 3/1/13(a) - 150,953 150,953
- 250 250 Public Service Co. of Colorado
7.875%, 10/1/12 - 305,018 305,018
- 25 25 Public Service Co. of Colorado
Series A 6.875%, 7/15/09 - 28,301 28,301
- 250 250 Quest Diagnostic, Inc. 6.75%, 7/12/06 - 276,876 276,876
- 195 195 Quest Diagnostic, Inc. 7.50%, 7/12/11 - 230,404 230,404
- 200 200 Raytheon Co. 6.50%, 7/15/05 - 215,417 215,417
- 25 25 Rite Aid Corp. 7.125%, 1/15/07 - 25,438 25,438
- 25 25 Rite Aid Corp. 7.625%, 4/15/05 - 25,750 25,750
1,000 - 1,000 Ryland Group, Inc. (The) 8%, 8/15/06 1,076,250 - 1,076,250
- 105 105 Safeway, Inc. 6.15%, 3/1/06 - 113,875 113,875
- 50 50 Saks, Inc. 8.25%, 11/15/08 - 55,000 55,000
- 250 250 Sealed Air Corp. 144A 5.375%, 4/15/08(a) - 260,749 260,749
- 75 75 Sealed Air Corp. 144A 6.875%, 7/15/33(a) - 76,768 76,768
400 75 475 Service Corp. International 6%, 12/15/05 404,000 75,750 479,750
600 - 600 Service Corp. International 7.20%, 6/1/06 603,000 - 603,000
- 250 250 SLM Corp. Series MTN 3.625%, 3/17/08 - 255,151 255,151
- 125 125 SLM Corp. Series MTN 5.05%, 11/14/14 - 127,149 127,149
500 - 500 Smurfit - Stone Container Corp. 8.25%,
10/1/12 525,000 - 525,000
- 140 140 Southwest Gas Corp. 7.625%, 5/15/12 - 162,011 162,011
- 425 425 Southwestern Public Service Co. 5.125%,
11/1/06(d) - 449,615 449,615
- 150 150 Sovereign Bank 5.125%, 3/15/13 - 149,829 149,829
1,000 - 1,000 Sprint Capital Corp. 7.625%, 1/30/11 1,127,236 - 1,127,236
1,000 - 1,000 Sprint Capital Corp. 8.375%, 3/15/12 1,179,578 - 1,179,578
- 300 300 StanCorp Financial Group, Inc. 6.875%,
10/1/12 - 333,459 333,459
- 300 300 Starwood Hotels and Resorts 6.75%,
11/15/05 - 317,625 317,625
- 50 50 Stater Brothers Holdings, Inc. 10.75%,
8/15/06 - 52,625 52,625
- 375 375 TCI Communications, Inc. 7.875%, 8/1/13 - 450,850 450,850
1,000 - 1,000 Team Health, Inc. Series B 12%, 3/15/09 1,030,000 - 1,030,000
500 200 700 Tenet Healthcare Corp. 5.375%, 11/15/06 492,500 197,000 689,500
375 - 375 Tenet Healthcare Corp. 6.375%, 12/1/11 360,937 - 360,937
1,000 - 1,000 Tesoro Petroleum Corp. 144A 8%, 4/15/08(a) 1,030,000 - 1,030,000
- 75 75 Toll Brothers, Inc. 144A 6.875%, 11/15/12(a) - 83,966 83,966
- 75 75 Toys "R" Us, Inc. 7.375%, 10/15/18 - 76,950 76,950
1,000 125 1,125 Toys "R" Us, Inc. 7.875%, 4/15/13 1,093,560 136,695 1,230,255
- 175 175 Travelers Property Casualty Corp. 5%,
3/15/13 - 178,965 178,965
- 100 100 TRW Automotive, Inc. 144A 10.125%,
2/15/13(a)(i) - 131,012 131,012
- 250 250 TXU Corp. Series C 6.375%, 1/1/08 - 257,187 257,187
- 250 250 TXU Corp. Series J 6.375%, 6/15/06 - 260,313 260,313
- 125 125 TXU Energy Co. 144A 7%, 3/15/13(a) - 135,885 135,885
1,000 - 1,000 Tyco International Group SA 6.375%,
10/15/11 1,031,250 - 1,031,250
- 125 125 Tyco International Ltd. 6.375%, 2/15/06 - 130,937 130,937
- 175 175 U.S. Bancorp 2.75%, 3/30/06 - 177,886 177,886
- 125 125 UnitedHealth Group, Inc. 4.875%, 4/1/13 - 126,755 126,755
- 130 130 UnitedHealth Group, Inc. 5.20%, 1/17/07 - 140,636 140,636
- 70 70 UnitedHealth Group, Inc. 7.50%, 11/15/05 - 78,111 78,111
- 100 100 UnumProvident Corp. 7.375%, 6/15/32 - 100,000 100,000
750 200 950 USA Interactive, Inc. 7%, 1/15/13 845,977 225,594 1,071,571
750 - 750 Valero Energy Corp. 6.875%, 4/15/12 836,630 - 836,630
500 - 500 Verizon Global Funding Corp. 6.875%,
6/15/12 570,361 - 570,361
1,000 - 1,000 Verizon Global Funding Corp. 7.25%,
12/1/10 1,172,021 - 1,172,021
- 125 125 Viacom, Inc. 6.40%, 1/30/06 - 137,265 137,265
- 60 60 Vicar Operating, Inc. 9.875%, 12/1/09 - 66,900 66,900
- 150 150 Wal-Mart Stores, Inc. 4.55%, 5/1/13 - 151,493 151,493
- 250 250 Wal-Mart Stores, Inc. 6.875%, 8/10/09 - 293,878 293,878
- 500 500 Waste Management, Inc. 7%, 10/1/04 - 523,888 523,888
- 380 380 Waste Management, Inc. 7.375%, 8/1/10 - 444,206 444,206
550 - 550 WCI Communities, Inc. 9.125%, 5/1/12 591,250 - 591,250
- 125 125 Webster Bank 5.875%, 1/15/13 - 132,652 132,652
- 455 455 WellPoint Health Networks, Inc. 6.375%,
6/15/06 - 502,446 502,446
- 25 25 Westport Resources Corp. 144A 8.25%,
11/1/11(a) - 27,438 27,438
- 100 100 XCEL Energy, Inc. 144A 3.40%, 7/1/08(a) - 97,604 97,604
- 125 125 XM Satellite Radio, Inc. 144A 12%,
6/15/10(a) - 135,938 135,938
1,200 - 1,200 XTO Energy, Inc. 7.50%, 4/15/12 1,341,000 - 1,341,000
- 25 25 Yum! Brands, Inc. 7.70%, 7/1/12 - 27,812 27,812
- 125 125 Zions Bancorp. 6%, 9/15/15 - 133,929 133,929
---------- ----------- ----------
TOTAL CORPORATE BONDS 72,003,050 32,145,650 104,148,700
NON-AGENCY MORTGAGE-BACKED SECURITIES--7.7%
1,011 - 1,011 Bank of America Mortgage Securities
99-7, A24 6.50%, 7/25/29 1,010,230 - 1,010,230
1,750 - 1,750 Commercial Resecuritization Trust
01-ABC2, A1 7.17%, 2/21/13 1,918,984 - 1,918,984
179 - 179 CS First Boston Mortgage Securities
Corp. 97-1R, 1M4 7.26%, 2/28/22(h) 178,733 - 178,733
1,000 - 1,000 First Chicago/Lennar Trust 97-CHL1,
D 7.96%, 5/29/08(h) 1,004,531 - 1,004,531
106 - 106 First Union Residential Securitization
Trust 98-A SA4 7%, 4/25/25 106,303 - 106,303
1,000 - 1,000 GMAC Commercial Mortgage Securities,
Inc. 97-C2, A3 6.566%, 11/15/07 1,110,569 - 1,110,569
2,100 - 2,100 Lehman Brothers Commercial Conduit
Mortgage Trust 99-C2, A2 7.325%, 9/15/09 2,466,779 - 2,466,779
1,500 - 1,500 Master Alternative Loan Trust 02-3,
M2 5.727%, 12/25/32 1,503,750 - 1,503,750
1,700 - 1,700 Morgan Stanley Capital I 98-W F2,
C 6.77%, 7/15/30 1,943,028 - 1,943,028
712 - 712 Norwest Asset Securities Corp. 99-5,
B3 6.25%, 3/25/14 709,944 - 709,944
1,234 - 1,234 Norwest Asset Securities Corp. 99-10,
B3 6.25%, 4/25/14 1,236,577 - 1,236,577
779 - 779 Paine Webber Mortgage Acceptance Corp.
00-1, M 7.75%, 9/25/30 777,684 - 777,684
1,023 - 1,023 Residential Funding Mortgage Securities I
94-S7, M3 6.50%, 3/25/34 1,035,308 - 1,035,308
1,000 - 1,000 Sasco Net Interest Margin Trust
03-28XS 7.50%, 9/28/33 997,656 - 997,656
972 - 972 Sasco Net Interest Margin Trust
03-25XS 7.25%, 8/28/33 967,754 967,754
489 - 489 Summit Mortgage Trust 00-1,
B3 6.08%, 12/28/12(h) 488,648 - 488,648
1,000 - 1,000 Vanderbilt Mortgage Finance 02-C,
A4 6.57%, 8/7/24 1,037,473 - 1,037,473
---------- ----------- ----------
TOTAL NON-AGENCY MORTGAGE-BACKED
SECURITIES 18,493,951 - 18,493,951
FOREIGN GOVERNMENT SECURITIES--20.2%
- 175 175 Bundesobligation Series 140 4.50%,
8/17/07(i) - 215,264 215,264
- 325 325 Deutsche Bundesrepublic Series 02 5%,
7/4/12(i) - 409,446 409,446
1,300 - 1,300 Federative Republic of Brazil 10%,
1/16/07 1,395,550 - 1,395,550
1,000 - 1,000 Federative Republic of Brazil 11.50%,
3/12/08 1,102,500 - 1,102,500
4,926 - 4,926 Federative Republic of Brazil PIK
Interest Capitalization 8%, 4/15/14 4,533,128 - 4,533,128
1,500 - 1,500 Government of New Zealand 404 6.50%,
2/15/05 906,273 - 906,273
1,750 - 1,750 Government of New Zealand 404 8%,
4/15/04(k) 1,055,328 - 1,055,328
- 325 325 Government of Spain 5%, 7/30/12(i) - 408,932 408,932
500 - 500 Government of Ukraine 144A 7.65%,
6/11/13(a) 500,625 - 500,625
2,777 - 2,777 Government of Ukraine RegS 11%,
3/15/07 3,082,131 - 3,082,131
1,500 - 1,500 Republic of Austria 5.50%, 10/20/07(i) 1,909,456 - 1,909,456
496 - 496 Republic of Bulgaria 144A 8.25%,
1/15/15(a) 567,300 - 567,300
254 - 254 Republic of Bulgaria RegS 8.25%,
1/15/15 290,513 - 290,513
1,000 - 1,000 Republic of Chile 5.50%, 1/15/13 1,040,000 - 1,040,000
1,000 - 1,000 Republic of Colombia 10.50%, 1/13/08 1,107,500 - 1,107,500
500 - 500 Republic of Colombia 10%, 1/23/12 546,250 - 546,250
1,500 - 1,500 Republic of Colombia 10.75%, 1/15/13 1,687,500 - 1,687,500
350 - 350 Republic of Lithuania 4.50%, 3/5/13(i) 406,981 - 406,981
1,000 - 1,000 Republic of Panama 8.25%, 4/22/08 1,110,000 - 1,110,000
500 - 500 Republic of Panama 9.625%, 2/8/11 573,750 - 573,750
1,000 - 1,000 Republic of Philippines 9%, 2/15/13 1,080,000 - 1,080,000
1,000 - 1,000 Republic of Philippines 8.25%, 1/15/14 1,017,500 - 1,017,500
1,000 - 1,000 Republic of South Africa 5.25%, 5/16/13(k) 1,136,893 - 1,136,893
5,000 - 5,000 Republic of South Africa R 150 12%,
2/28/05(j) 755,123 - 755,123
1,500 - 1,500 Republic of Turkey 11.75%, 6/15/10 1,721,250 - 1,721,250
500 - 500 Republic of Turkey 11%, 1/14/13 553,750 - 553,750
1,500 - 1,500 Republic of Turkey 9.50%, 1/15/14 1,533,750 - 1,533,750
3,000 - 3,000 Republic of Venezuela 9.25%, 9/15/27 2,334,000 - 2,334,000
2,125 - 2,125 Republic of Venezuela 144A 10.75%,
9/19/13(a) 1,965,625 - 1,965,625
1,286 - 1,286 Republic of Venezuela DCB Series DL 1.875%,
12/18/07(h) 1,164,375 - 1,164,375
5,750 - 5,750 Russian Federation RegS 5%, 3/31/30(h) 5,453,516 - 5,453,516
1,500 - 1,500 Russian Ministry of Finance Series V 3%,
5/14/08 1,338,750 - 1,338,750
- 50 50 United Mexican States 4.625%, 10/8/08 - 51,000 51,000
500 - 500 United Mexican States 6.625%, 3/3/15 525,250 - 525,250
4,500 - 4,500 United Mexican States 7.50%, 1/14/12 5,089,500 - 5,089,500
- 60 60 United Mexican States Series MTNA 6.375%,
1/16/13 - 63,300 63,300
- 150 150 United Mexican States Series MTNA 8%,
9/24/22 - 165,375 165,375
---------- ----------- ----------
TOTAL FOREIGN GOVERNMENT SECURITIES 47,484,067 1,313,317 48,797,384
FOREIGN CORPORATE BONDS--10.0%
1,500 550 2,050 British Sky Broadcasting plc 6.875%,
2/23/09 1,679,124 615,679 2,294,803
- 250 250 British Sky Broadcasting plc 7.30%,
10/15/06 - 279,817 279,817
750 - 750 Cascades, Inc. 144A 7.25%, 2/15/13(a) 768,750 - 768,750
1,750 - 1,750 Cia Brasileira de Bebidas 144A 8.75%,
9/15/13(a) 1,767,500 - 1,767,500
750 - 750 Clondalkin Industries plc 10.625%,
1/15/10(i) 947,653 - 947,653
- 90 90 Corus Entertainment, Inc. 8.75%, 3/1/12 - 98,550 98,550
1,500 - 1,500 Crown European Holdings SA 144A 10.25%,
3/1/11(a)(i) 1,856,003 - 1,856,003
- 75 75 Deutsche Telekom International Finance
BV 3.875%, 7/22/08 - 75,728 75,728
1,000 - 1,000 Deutsche Telekom International Finance
BV 8.50%, 6/15/10(h) 1,223,222 - 1,223,222
1,000 - 1,000 Deutsche Telekom International Finance
DT 8.75%, 6/15/30(h) 1,268,503 - 1,268,503
- 50 50 Fresenius Finance BV 144A 7.75%,
4/30/09(a)(i) - 61,466 61,466
- 125 125 Hanson Australia Funding 5.25%, 3/15/13 - 126,951 126,951
500 - 500 Innova S de R.L. 144A 9.375%, 9/19/13(a) 505,625 - 505,625
1,000 - 1,000 Kazkommerts International BV 144A 8.50%,
4/16/13(a) 977,500 - 977,500
250 - 250 Kazkommerts International BV RegS 10.125%,
5/8/07 273,750 - 273,750
1,600 - 1,600 Korea Development Bank 5.75%, 9/10/13 1,320,658 - 1,320,658
1,280 - 1,280 Kyivstar GSM RegS 12.75%, 11/21/05 1,420,800 - 1,420,800
750 - 750 MEI Euro Finance Ltd. 144A 8.75%, 5/22/10(a) 755,625 - 755,625
150 - 150 Norske Skogindustrier 144A 6.125%,
10/15/15(a) 154,307 - 154,307
750 - 750 Oil Insurance Ltd. 144A 5.15%, 8/15/33(a) 768,757 - 768,757
2,250 - 2,250 Petrobras International Finance W.I.
9.125%, 7/2/13 2,306,250 - 2,306,250
- 100 100 Rogers Cable, Inc. 144A 6.25%, 6/15/13(a) - 99,875 99,875
1,000 - 1,000 Rogers Cable, Inc. 7.875%, 5/1/12 1,087,500 - 1,087,500
- 75 75 Sabmiller plc 144A 6.625%, 8/15/33(a) - 80,700 80,700
1,000 - 1,000 Turanalem Finance BV 144A 7.875%,
6/2/10(a) 952,500 - 952,500
- 300 300 Tyco International Group SA 6.375%,
6/15/05 - 312,000 312,000
500 - 500 Tyumen Oil Co. 144A 11%, 11/6/07(a) 562,500 - 562,500
1,000 - 1,000 Vale Overseas Ltd. 144A 9%, 8/15/13(a) 1,042,500 - 1,042,500
- 175 175 Valentia Telecommunion Ltd.
144A 7.25%, 8/15/13(a) - 211,439 211,439
500 - 500 Xerox Capital Europe plc 5.875%,
5/15/04 505,000 - 505,000
---------- ----------- ----------
TOTAL FOREIGN CORPORATE BONDS 22,144,027 1,962,205 24,106,232
CREDIT LINKED NOTES--0.9%
2,000 - 2,000 Federative Republic of Brazil 9.43%,
8/20/06 2,083,400 - 2,083,400
---------- ----------- ----------
TOTAL CREDIT LINKED NOTES 2,083,400 - 2,083,400
CONVERTIBLE BONDS--0.6%
- 50,000 50,000 Candescent Technologies Corp.
Cv. 144A 8%, 11/1/03(a)(b)(c)(e) - 4,250 4,250
- 1,500 1,500 Nextel Communications, Inc.
Cv 5.25%, 1/15/10 1,406,250 - 1,406,250
---------- ----------- ----------
TOTAL CONVERTIBLE BONDS 1,406,250 4,250 1,410,500
LOAN AGREEMENTS--1.0%
929 - 929 Republic of Algeria(f)(h) 910,000 - 910,000
1,500 - 1,500 United Pan-Europe Communications
Tranche C2(g)(h) 1,402,500 - 1,402,500
---------- ----------- ----------
TOTAL LOAN AGREEMENTS 2,312,500 - 2,312,500
COMMON STOCKS--0.0%
64,050 - 64,050 AT&T Latin America Corp. Class A(c) 3,843 - 3,843
---------- ----------- ----------
TOTAL COMMON STOCKS 3,843 - 3,843
PREFERRED STOCKS--0.0%
- 3,925 3,925 Chevy Chase Bank Pfd. 98,861 98,861
---------- ----------- ----------
TOTAL PREFERRED STOCKS - 98,861 98,861
SHORT-TERM OBLIGATIONS--3.0%
- 200 200 Prudential Funding 1.07%, 10/1/03 - 200,000 200,000
3,650 - 3,650 CXC, Inc. 1.12%, 10/1/03 3,650,000 - 3,650,000
2,990 - 2,990 Wal-Mart Stores, Inc. 1.05%, 10/2/03 2,989,913 - 2,989,913
300 - 300 CXC, Inc. 1.05%, 10/6/03 299,956 - 299,956
---------- ----------- -----------
TOTAL SHORT-TERM OBLIGATIONS 6,939,869 200,000 7,139,869
TOTAL INVESTMENTS--102.0% 196,915,142 49,417,125 246,332,267
(Identified cost $186,059,241,
$47,134,499 and $233,193,740)
Other assets and liabilities, net---(2.0)% (5,229,047) 474,068 (4,754,979)
------------ ------------ -----------
NET ASSETS--100.0% $191,686,095 $ 49,891,193 241,577,288
============ ============ ===========
(a) Security exempt from registration under Rule 144A of Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At September 30, 2003, these securities amounted to a
value of $41,561,231 or 17.21% of net assets.
(b) Illiquid. Security valued at fair value as determined by the good faith by or under the direction of the Trustees. At
September 30, 2003, this security amounted to $4,250 or 0.0% of net assets.
(c) Non-income producing.
(d) All or a portion segregated as collateral for when-issued securities and forward currency contracts.
(e) Security in default.
(f) Restricted security was acquired on 11/1/01 at a cost of $1,125,000.
(g) Restricted security was acquired on 3/31/03 at a cost of $934,000.
(h) Variable or step coupon security, interest rate shown reflects the rate currently in effect.
(i) Par value represents Euro.
(j) Par value represents South African Rand.
(k) Par value represents New Zealand Dollar.
(l) Principal amount is adjusted daily pursuant to the change in the Consumer Price Index.
SEE NOTES TO PRO FORMA FINANCIAL
STATEMENTS
Phoenix-Goodwin Multi-Sector Fixed Income Series/Phoenix-Janus Flexible Income Series
Pro Forma Combining Statement of Assets and Liabilities
September 30, 2003 (Unaudited)
================== ================== ================ ================
Phoenix-Goodwin Phoenix-Janus Pro Forma
Multi-Sector Fixed Flexible Income Adjustments Combining
Income Series Series Portfolios
================== ================== ================ ================
ASSETS
Investment securities at value
(Identified cost $186,059,241,
$47,134,499, and $233,193,740) $ 196,915,142 $ 49,417,125 $ 246,332,267
Cash 55,936 92,153 148,089
Receivables
Investment securities sold 734,269 155,546 889,815
Interest 2,743,932 633,362 3,377,294
Prepaid expenses 4,562 1,182 5,745
---------------- ---------------- ---------------- ----------------
Total assets 200,453,841 50,299,369 - 250,753,210
LIABILITIES
Payables
Net unrealized depreciation on
forward currency contracts 98,100 22,394 120,494
Investment securities purchased 8,500,302 309,165 8,809,467
Investment advisory fee 78,167 23,660 101,827
Administration fee 12,032 3,105 15,137
Financial agent fee 13,331 5,830 19,160
Trustees' fee 1,110 1,110 2,220
Accrued expenses 64,704 42,912 107,616
---------------- ---------------- ---------------- ----------------
Total liabilities 8,767,745 408,176 - 9,175,921
---------------- ---------------- ---------------- ----------------
NET ASSETS $ 191,686,095 $ 49,891,193 - $ 241,577,288
================ ================ ================ ================
Shares of beneficial interest
outstanding 20,935,218 4,487,851 961,073(a) 26,384,142
Net assets $ 191,686,095 $ 49,891,193 $ 241,577,288
Net asset value per share $ 9.16 $ 11.12 $ 9.16
(a) Adjustment reflects additional shares issued in conversion.
See Notes to Pro Forma Financial Statements.
Phoenix-Goodwin Multi-Sector Fixed Income Series / Phoenix-Janus Flexible Income Series
Pro Forma Combining Statement of Operations
October 1, 2002 through September 30, 2003 (Unaudited)
================== ================== ================== ===============
Phoenix-Goodwin Phoenix-Janus Pro Forma
Multi-Sector Fixed Flex Income Adjustments Combining
Income Series Series Portfolios
================== ================== ================== ===============
INVESTMENT INCOME
Interest $ 13,615,735 $ 2,363,337 $ - $ 15,979,072
------------------ ------------------ ------------------ -------------
Total investment income 13,615,735 2,363,337 15,979,072
------------------ ------------------ ------------------ -------------
EXPENSES
Investment advisory fee 933,255 371,594 (139,348) (a) 1,165,500
Financial agent fee 163,964 68,714 (41,915) (a) 190,764
Administration fee 109,347 (b) 27,817 (b) 42,322 (b) 179,487
Printing 39,738 42,174 (4,640) (a) 77,272
Professional 25,314 29,645 (16,757) (a) 38,202
Custodian 54,320 32,681 (29,435) (a) 57,566
Trustees 3,625 3,625 (1,812) (a) 5,438
Miscellaneous 27,467 16,885 (12,763) (a) 31,589
------------------ ------------------ ------------------ -------------
Total expenses 1,357,030 593,136 (204,348) 1,745,818
Custodian fees paid indirectly (3,490) (420) - (3,910)
Less expenses borne by investment advisor - (104,910) 104,910 (a) -
------------------ ------------------ ------------------ -------------
Net expenses 1,353,540 487,806 (99,438) 1,741,908
------------------ ------------------ ------------------ -------------
NET INVESTMENT INCOME (LOSS) 12,262,195 1,875,531 99,438 14,237,164
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on securities 7,934,962 1,062,715 - 8,997,677
Net realized gain on foreign currency
transactions (100,159) (116,115) - (216,274)
Net change in unrealized appreciation
(depreciation) on investments 5,412,696 545,630 - 5,958,326
Net change in unrealized appreciation
(depreciation) on foreign currency and
foreign currency transactions 6,109 (5) - 6,104
Net change in unrealized appreciation
(depreciation) on forward contracts (98,101) (22,394) - (120,495)
Net gain (loss) on investments 13,155,507 1,469,831 - 14,625,338
------------------ ------------------ ------------------ -------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 25,417,702 $ 3,345,362 $ 99,438 $ 28,862,502
================== ================== ================== =============
Adjustments:
(a) Reflects elimination of target fund contracts.
(b) Reflects new Administration Fees of 0.077% for a nine month period, 1/1/03 to 9/30/03. The adjustment column reflects what the
annual fee would be based on combined net assets.
Note: The expenses for Phoenix-Goodwin Multi-Sector Fixed Income Fund are based on the expense schedule which became effective
6/30/03.
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME SERIES / PHOENIX-JANUS FLEXIBLE INCOME
SERIES
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS
SEPTEMBER 30, 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-Janus Flexible
Income Series ("Janus Flex") into the Phoenix-Goodwin Multi-Sector Fixed Income
Series ("Multi-Sector"). 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 Janus Flex to
Multi-Sector and the subsequent liquidation of Janus Flex. The accounting
survivor in the proposed merger will be Multi-Sector. This is because although
Janus Flex has the same investment objective as Multi-Sector, the surviving fund
will invest in a style that is similar to the way in which Multi-Sector is
currently operated (including hedging and investment in debt securities).
Additionally, Multi-Sector has a significantly larger asset base than Janus
Flex.
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.
Janus Flex and Multi-Sector 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 Multi-Sector which would have been issued at September 30, 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 September 30,
2003, of Janus Flex of $49,891,193 and the net asset value of Multi-Sector of
$9.16. 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 Multi-Sector restated to
reflect the expense schedule which became effective June 30, 2003, the actual
expenses of each Janus Flex 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 Multi-Sector at the combined level of
average net assets for the period ended September 30, 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
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."
ITEM 16. EXHIBITS
(1) Amended Declaration of Trust.
1. Declaration of Trust of the Registrant establishing the Big Edge
Series Fund dated February 18, 1986, filed with the Registration
Statement on Form N-1A on April 18, 1986 and filed via Edgar with
Post-Effective Amendment No. 18 on June 20, 1996.
2. Amendment to Declaration of Trust effective February 28, 1990,
establishing the International Series, filed with Post-Effective
Amendment No. 7 on March 2, 1992 and filed via Edgar with
Post-Effective Amendment No. 20 on April 29, 1997.
3. Amendment to Declaration of Trust effective November 14, 1991,
conforming the Fund's borrowing restrictions to California
Department's Borrowing Guidelines, filed with Post-Effective
Amendment No. 7 on March 2, 1992 and filed via Edgar with
Post-Effective Amendment No. 20 on April 29, 1997.
4. Amendment to Declaration of Trust effective May 1, 1992, changing
the name of the Trust to The Phoenix Edge Series Fund,
establishing the Balanced Series, and changing the names of Stock
Series to Growth Series and Total-Vest Series to Total Return
Series filed with Post-Effective Amendment No. 8 on April 28, 1992
and filed via Edgar with Post-Effective Amendment No. 20 on April
29, 1997.
5. Amendment to Declaration of Trust effective January 1, 1995,
establishing the Real Estate Securities Series, filed with
Post-Effective Amendment No. 12 on February 16, 1995 and filed via
Edgar with Post-Effective Amendment No. 20 on April 29, 1997.
6. Amendment to Declaration of Trust effective November 15, 1995,
establishing the Strategic Theme Series, filed via Edgar with
Post-Effective Amendment No. 16 on January 29, 1996.
7. Amendment to Declaration of Trust effective February 21, 1996,
changing the name of the Series currently designated "Bond Series"
to the "Multi-Sector Fixed Income Series," filed via Edgar with
Post-Effective Amendment No. 17 on April 17, 1996.
8. Amendment to Declaration of Trust effective August 21, 1996,
establishing the Aberdeen New Asia Series and changing the name of
the Total Return Series to Strategic Allocation Series, filed via
Edgar with Post-Effective Amendment No. 19 on September 3, 1996.
9. Amendment to Declaration of Trust effective May 28, 1997,
establishing the Research Enhanced Index Series, filed via Edgar
with Post-Effective Amendment No. 22 on July 15, 1997.
C-1
10. Amendment to Declaration of Trust effective February 27, 1998,
establishing the Engemann Nifty Fifty Series, Seneca Mid-Cap
Series, Phoenix Growth and Income Series, Phoenix Value Equity
Series and Schafer Mid-Cap Value Series, filed via Edgar with
Post-Effective Amendment No. 46 on April 30, 2003.
11. Amendment to Declaration of Trust dated May 1, 1998 for Scribner's
error in Amendment filed February 27, 1998, filed via Edgar with
Post-Effective Amendment No. 46 on April 30, 2003.
12. Amendment to Declaration of Trust effective May 1, 1999, changing
the name of the Series currently designated as Balanced Series,
Multi-Sector Fixed Income Series, Money Market Series, Strategic
Allocation Series, Growth Series, International Series, Real
Estate Securities Series, Strategic Theme Series, Aberdeen New
Asia Series, Research Enhanced Index Series, Engemann Nifty Fifty
Series, Schafer Mid-Cap Value Series, Seneca Mid-Cap Growth
Series, Phoenix Value Equity Series, and Phoenix Growth and Income
Series to Phoenix-Goodwin Balanced Series, Phoenix-Goodwin
Multi-Sector Fixed Income Series, Phoenix-Goodwin Money Market
Series, Phoenix-Goodwin Strategic Allocation Series,
Phoenix-Goodwin Growth Series, Phoenix-Aberdeen International
Series, Phoenix-Duff & Phelps Real Estate Securities Series,
Phoenix-Goodwin Strategic Theme Series, Phoenix-Aberdeen New Asia
Series, Phoenix Research Enhanced Index Series, Phoenix-Engemann
Nifty Fifty Series, Phoenix-Schafer Mid-Cap Value Series,
Phoenix-Seneca Mid-Cap Growth Series, Phoenix-Hollister Value
Equity Series, and Phoenix-Oakhurst Growth and Income Series,
filed via Edgar with Post-Effective Amendment No. 46 on April 30,
2003.
13. Amendment to Declaration of Trust effective December 1, 1999,
establishing the Phoenix-Bankers Trust Dow 30 Series,
Phoenix-Federated U.S. Government Bond Series, Phoenix-Janus
Equity Income Series, Phoenix-Janus Flexible Income Series,
Phoenix-Janus Growth Series and Phoenix-Morgan Stanley Focus
Equity Series, filed via Edgar with Post-Effective Amendment No.
35 on November 15, 2000.
14. Amendment to Declaration of Trust effective December 1, 1999,
changing names of Phoenix-Goodwin Growth Series to
Phoenix-Engemann Capital Growth Series, Phoenix-Goodwin Strategic
Theme Series to Phoenix-Seneca Strategic Theme Series,
Phoenix-Goodwin Balanced Series to Phoenix-Oakhurst Balanced
Series, and Phoenix-Goodwin Strategic Allocation Series to
Phoenix-Oakhurst Strategic Allocation Series, filed via Edgar with
Post-Effective Amendment No. 35 on November 15, 2000.
15. Amendment to Declaration of Trust effective April 21, 2000,
changing name of Phoenix-Research Enhanced Index Series to
Phoenix-J.P. Morgan Research Enhanced Index Series, filed via
Edgar with Post-Effective Amendment No. 46 on April 30, 2003.
16. Amendment to Declaration of Trust effective July 26, 2000,
establishing the Phoenix-Bankers Trust Nasdaq-100 Index(R) Series
and Phoenix-Engemann Small & Mid-Cap Growth Series, filed via
Edgar with Post-Effective Amendment No. 35 on November 15, 2000.
17. Amendment to Declaration of Trust effective September 29, 2000,
establishing the "Phoenix-Sanford Bernstein Global Value Series"
and "Phoenix-Sanford Bernstein Small-Cap Value Series" and
changing the name of "Phoenix-Schafer Mid-Cap Value
C-2
Series" to "Phoenix-Sanford Bernstein Mid-Cap Value Series", filed
via Edgar with Post-Effective Amendment No. 35 on November 15,
2000.
18. Amendment to Declaration of Trust effective May 1, 2001, changing
the name of "Phoenix-Bankers Trust Dow 30 Series" to
"Phoenix-Deutsche Dow 30 Series", and "Phoenix-Bankers Trust
Nasdaq-100 Index Series" to "Phoenix-Deutsche Nasdaq-100 Index
Series", filed via Edgar with Post-Effective Amendment No. 46 on
April 30, 2003.
19. Amendment to Declaration of Trust effective August 31, 2001
establishing the "Phoenix-AIM Mid-Cap Equity Series",
"Phoenix-Alliance/Bernstein Growth + Value Series", "Phoenix-MFS
Investors Growth Stock Series", "Phoenix-MFS Investors Trust
Series" and "Phoenix-MFS Value Series", and changing the name of
"Phoenix-Janus Equity Income Series" to "Phoenix-Janus Core Equity
Series", filed via Edgar with Post-Effective Amendment No. 46 on
April 30, 2003.
20. Amendment to Declaration of Trust effective as of October 29, 2001
amending the fundamental investment restrictions of each Series,
filed via Edgar with Post-Effective Amendment No. 41 on March 1,
2002.
21. Amendment to Declaration of Trust effective as of March 18, 2002,
merging of Phoenix-Oakhurst Balanced Series into Phoenix-Oakhurst
Strategic Allocation Series, Phoenix-Engemann Nifty Fifty Series
into Phoenix-Engemann Growth Series, and Phoenix-Janus Core Equity
Series Income Series into Phoenix-Janus Growth Series, filed via
Edgar with Post-Effective Amendment No. 42 on April 29, 2002.
22. Amendment to Declaration of Trust effective May 10, 2002, changing
the name of "Phoenix-Morgan Stanley Focus Equity Series" to
"Phoenix-Van Kampen Focus Equity Series", filed via Edgar with
Post-Effective Amendment No. 43 on May 24, 2002.
23. Amendment to Declaration of Trust effective August 9, 2002,
establishing "Phoenix-Kayne Large-Cap Core Series", "Phoenix-Kayne
Small-Cap Quality Value Series", "Phoenix-Lord Abbett Large-Cap
Value Series", 'Phoenix-Lord Abbett Mid-Cap Value Series",
"Phoenix-Lord Abbett Bond-Debenture Series", "Phoenix-Lazard
International Equity Select Series", "Phoenix-Lazard Small-Cap
Value Series", "Phoenix-Lazard U.S. Multi-Cap Series" and
"Phoenix-State Street Research Small-Cap Growth Series" and
amending Section 4.2 of Article IV list of Series as described in
Trust's registration statement, filed via Edgar with
Post-Effective Amendment No. 46 on April 30, 2003.
24. Amendment to Declaration of Trust effective as of October 25, 2002
deleting reference to Phoenix-Federated U.S. Government Bond
Series, filed via Edgar with Post-Effective Amendment No. 45 on
February 24, 2003.
(2) Not Applicable.
(3) Not Applicable.
(4) Agreement and Plan of Reorganization (included as Appendix A to the
Prospectus/Proxy Statement contained in Part A of this Registration
Statement).
C-3
(5) Reference is hereby made to Registrant's Amended Declaration of Trust
referenced in Exhibit 1 above.
(6)
(a) Investment Advisory Agreements.
(1) Investment Advisory Agreement by and between Registrant and
Phoenix Investment Counsel, Inc. dated January 1, 1993 (currently
pertaining to the Phoenix-Aberdeen International Series (f/k/a
International Series), Phoenix-Engemann Capital Growth Series
(f/k/a Growth Series), Phoenix-Goodwin Money Market Series (f/k/a
Money Market Series), Phoenix-Goodwin Multi-Sector Fixed Income
Series (f/k/a Bond Series), Phoenix-Oakhurst Balanced Series
(f/k/a Balanced Series), and Phoenix-Oakhurst Strategic Allocation
Series (f/k/a Total Return Series) previously filed with
Post-Effective Amendment No. 11 on May 2, 1994 and filed via Edgar
with Post-Effective Amendment No. 20 on April 29, 1997.
(2) Instrument to Amend Investment Advisory Agreement between
Registrant and Phoenix Investment Counsel, Inc. pertaining to
Phoenix-Seneca Strategic Theme Series (f/k/a Phoenix Strategic
Theme Series) effective January 23, 1996, filed via Edgar with
Post-Effective Amendment No. 46 on April 30, 2003.
(3) Second Amendment to Investment Advisory Agreement between
Registrant and Phoenix Investment Counsel, Inc., dated August 9,
2002 covering the Phoenix-Kayne Large-Cap Core Series and
Phoenix-Kayne Small-Cap Quality Value Series and deleting
reference to Phoenix-Oakhurst Balanced Series (f/k/a Balanced
Series) and Phoenix-Engemann Nifty Fifty Series, filed via Edgar
with Post-Effective Amendment No. 46 on April 30, 2003.
(4) Third Amendment to Investment Advisory Agreement between
Registrant and Phoenix Investment Counsel, Inc. dated November 12,
2002 to reflect duties to proxy voting and reflect investment
program designed to manage cash, cash equivalents and short-term
investments, filed via Edgar with Post-Effective Amendment No. 46
on April 30, 2003.
*(5) Fourth Amendment to Investment Advisory Agreement between
Registrant and Phoenix Investment Counsel, Inc. dated May 9, 2003
(pertaining to addition of new series named Phoenix-Goodwin
Multi-Sector Short Term Bond Series), filed herewith.
*(6) Fifth Amendment to Investment Advisory Agreement between
Registrant and Phoenix Investment Counsel, Inc. dated August 12,
2003 (pertaining to addition of new series named Phoenix-Goodwin
Multi-Sector Short Term Series - change in fee schedule from
Fourth Amendment), filed herewith.
(7) Not Applicable.
(8) Not Applicable.
(9) Custodian Agreement.
C-4
(a) Global Custody Agreement between Registrant and The Chase Manhattan
Bank, NA effective May 1, 1990, covering the International Series, filed
with Post-Effective Amendment No. 4 on March 13, 1990 and filed via
Edgar with Post-Effective Amendment No. 20 on April 29, 1997.
(b) Amendment to Global Custody Agreement between Registrant and The Chase
Manhattan Bank, NA effective May 1, 1992, covering International, Money
Market, Growth, Bond, Total Return and Balanced Series, filed with
Post-Effective Amendment No. 7 on March 2, 1992 and filed via Edgar with
Post-Effective Amendment No. 20 on April 29, 1997.
(10) Not Applicable.
(11) Opinion and Consent of Matthew A. Swendiman, Esq., with respect to the
legality of the shares being issued (to be filed by Amendment).
(12) Opinion and Consent of McDermott, Will & Emery with respect to a tax
free reorganization (to be filed by Amendment).
(13)(a) Financial Agent Agreement between Registrant and Phoenix Home Life
Mutual Insurance Company with respects to Phoenix Home Life Variable
Accumulation Account (VA) and Phoenix Home Life Variable Universal Life
Account dated November 15, 1995, filed via Edgar with Post-Effective
Amendment No. 16 on January 29, 1996.
(b) Transfer Agency Agreement between Registrant and Phoenix Equity Planning
Corporation dated August 29, 1988 filed via Edgar with Post-Effective
Amendment No. 20 on April 29, 1997.
(c) Financial Agent Agreement between Registrant and Phoenix Equity Planning
Corporation dated December 11, 1996, filed via Edgar with Post-Effective
Amendment No. 20 on April 29, 1997.
(d) First Amendment to Financial Agent Agreement between Registrant and
Phoenix Equity Planning Corporation effective February 27, 1998, filed
via Edgar with Post-Effective Amendment No. 25 on April 29, 1998.
(e) *Second Amendment to Financial Agent Agreement between Registrant and
Phoenix Equity Planning Corporation effective June 1, 1998, filed
herewith.
(f) *Third Amendment to Financial Agent Agreement between Registrant and
Phoenix Equity Planning Corporation effective October 29, 2001, filed
herewith.
(g) *Fourth Amendment to Financial Agent Agreement between Registrant and
Phoenix Equity Planning Corporation effective August 9, 2002, filed
herewith.
(h) *Fifth Amendment to Financial Agent Agreement between Registrant and
Phoenix Equity Planning Corporation effective January 1, 2003, filed
herewith.
(i) Service Agreement between the Registrant, Phoenix Life Insurance
Company, PHL Variable Insurance Company and Phoenix Life and Annuity
Company dated January 1, 2003, filed herewith.
*(i)(1) First Amendment to Service Agreement between Registrant, Phoenix
Life Insurance Company, PHL Variable Insurance Company and Phoenix Life
and Annuity Company dated November 11, 2003, filed herewith.
C-5
(j) *Code of Ethics Amended and Restated for The Phoenix Edge Series Fund
and Phoenix Variable Advisors, Inc., filed herewith.
(k) *Code of Ethics Amended and Restated for Phoenix Funds, Phoenix-Duff &
Phelps Institutional Mutual Funds, Phoenix-Aberdeen Series Fund,
Phoenix- Engemann Funds, and Phoenix-Zweig Funds, filed herewith.
(14) *Consent of PricewaterhouseCoopers LLP, filed herewith.
(15) Not Applicable.
(16) *Power of Attorney, filed herewith.
(17)(a) *Form of Voting Instructions Card and Proxy Card for Phoenix-Janus
Flexible Income Series, filed herewith.
(b) Current Prospectus of The Phoenix Edge Series Fund, as filed via Edgar
on Form N-1A on April 30, 2003 with Post-Effective Amendment No. 46, and
supplements dated May 1, 2003, May 8, 2003, June 2, 2003, June 11, 2003,
July 24, 2003, October 15, 2003 and November 5, 2003 to the Prospectus
dated May 1, 2003 and 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 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.
C-6
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 16th day of January, 2004.
THE PHOENIX EDGE SERIES FUND
Attest: /s/ Richard J. Wirth By: /s/Philip R. McLoughlin
--------------------------- ------------------------------
Richard J. Wirth Name: Philip R. McLoughlin
Secretary Title: President
As required by the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities indicated on this
16th day of January, 2004.
Signature Title
- --------- -----
/s/Nancy G. Curtiss
- ------------------------------------
Nancy G. Curtiss Vice President, Treasurer and Principal
Financial and Accounting Officer
- ------------------------------------
Frank M. Ellmer* Trustee
- ------------------------------------
John A. Fabian* Trustee
- ------------------------------------
Roger A. Gelfenbien* Trustee
- ------------------------------------
Michael J. Gilotti* Trustee and Executive Vice President
- ------------------------------------
Eunice S. Groark* Trustee
- ------------------------------------
Frank E. Grzelecki* Trustee
- ------------------------------------
John R. Mallin* Trustee
S-1
/s/Philip R. McLoughlin
- -----------------------
Philip R. McLoughlin Trustee and President, Chief Executive
Officer and Chairman
(Principal Executive Officer)
*By:/s/ Philip R. McLoughlin
------------------------
* Pursuant to power of attorney, filed herewith.
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