As filed with the Securities and Exchange Commission on January 30, 2004
Registration No. 333-111462
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X] Pre-Effective Amendment No. 1 [ ] Post-Effective Amendment No. ___
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PHOENIX EQUITY SERIES FUND
(Exact Name of Registrant as Specified in Charter)
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c/o Phoenix Equity Planning Corporation
101 Munson Street, Greenfield, Massachusetts 01301
(Address of Principal Executive Offices)
(800) 243-1574
(Registrant's Telephone Number, including Area Code)
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John R. Flores, Esq.
c/o Phoenix Life Insurance Company
One American Row, Hartford, Connecticut 06102-5056
(Name and address of Agent for Service)
Copies of Communications to:
Lynn K. Stone, Esq.
Blazzard, Grodd & Hasenauer, P.C.
943 Post Road East
Westport, Connecticut 06880
Paul S. Schreiber, Esq.
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
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Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of this Registration Statement.
It is proposed that this filing will become effective on _______, 2004,
pursuant to Rule 488 under the Securities Act of 1933.
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Title of Securities Being Registered: Shares of beneficial interest,
no par value per share.
Registrant is relying on Section 24(f) of the Investment Company Act of
1940, as amended, which permits registration of an indefinite number of shares
of beneficial interest of the Registrant. Accordingly, no filing fee is due in
connection with this Registration Statement.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PHOENIX EQUITY 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
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1. Beginning of Registration Statement Cover Page; Cross Reference Sheet
and Outside Front Cover Page of Prospectus
2. Beginning and Outside Back Cover Table of Contents
Page of Prospectus
3. Fee Table, Synopsis Information and Risk Synopsis; Principal Risk Factors; Comparison of
Factors Investment Objectives and Policies
4. Information about the Transaction Synopsis; The Proposed Reorganization;
Comparative Information on Shareholder Rights;
Exhibit A (Form of Agreement and Plan of
Reorganization)
5. Information about the Registrant Cover Page; Synopsis; Principal Risk Factors;
Comparison of Investment Objectives and
Policies; The Proposed Reorganization;
Comparative Information on Distribution
Arrangements; Comparative Information on
Shareholder Services; Comparative Information
on Shareholder Rights; Management and Other
Service Providers; Current Prospectus of Registrant
6. Information about the Company Being Synopsis; Comparison of Investment Objectives
Acquired and Policies; The Proposed Reorganization;
Comparative Information on Distribution
Arrangements; Comparative Information on
Shareholder Services; Comparative Information
on Shareholder Rights; Prospectus of the
Phoenix-Oakhurst Strategy Fund, dated
May 1, 2003, as supplemented
7. Voting Information Synopsis; The Proposed Reorganization;
Comparative Information on Shareholder Rights;
Voting Information
8. Interest of Certain Persons and Experts The Proposed Reorganization
9. Additional Information Required for Not Applicable
Reoffering By Persons Deemed to be
Underwriters
Caption or Location in
Form N-14 Item No. and Caption Prospectus/Proxy Statement
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Part B: Information Required in Statement of Additional Information
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. Additional Information about the Registrant Cover Page; Statement of Additional Information of Registrant,
dated December 31, 2003
13. Additional Information about the Cover Page; Statement of Additional Information of
Company Being Acquired Phoenix Trust dated May 1, 2003, as supplemented
14. Financial Statements Annual Report of the Registrant for the year ended August
31, 2003; Annual Report of Phoenix Trust for the year ended
December 31, 2002; Semi-Annual Report of Phoenix Trust for
the six-month period ended June 30, 2003; and Pro Forma Financial
Statements
Part C: Other Information
15. Indemnification Indemnification
16. Exhibits Exhibits
17. Undertakings Undertakings
PHOENIX-OAKHURST STRATEGY FUND
A SERIES OF
PHOENIX TRUST
900 THIRD AVENUE, 31ST FLOOR
NEW YORK, NY 10022
1-800-272-2700
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January 30, 2004
Dear Shareholder:
The Phoenix-Oakhurst Strategy Fund (the "Merged Series"), a series of Phoenix
Trust (the "Trust"), will hold a Special Meeting of Shareholders at 2:00 p.m.,
local time, on March 19, 2004, at the offices of Phoenix Investment Partners,
Ltd., 56 Prospect Street, Hartford, Connecticut 06115. At the Special Meeting,
the shareholders of the Merged Series will vote on an Agreement and Plan of
Reorganization under which the Merged Series will be combined with the
Phoenix-Oakhurst Growth & Income Fund (the "Surviving Series"), a series of
Phoenix Equity Series Fund. The Surviving Series has a similar investment
objective to that of the Merged Series. If the reorganization agreement is
implemented, you will become a shareholder of the Surviving Series and will
receive shares of the corresponding class of the Surviving Series with an
aggregate net asset value equal to the aggregate net asset value of your
investment in the Merged Series. No sales charge will be imposed in connection
with the reorganization. Phoenix Investment Partners, Ltd. will pay all costs of
the reorganization.
The Board of Trustees of the Trust believes that the reorganization offers
you the opportunity to pursue your goals in a larger fund. The Board of Trustees
has carefully considered and has unanimously approved the proposed
reorganization, as described in the accompanying materials, and believes that
the reorganization is in the best interests of the Merged Series and its
shareholders. Therefore, the Board of Trustees recommends that you vote in favor
of the Agreement and Plan of Reorganization.
We have enclosed a copy of the Notice of Special Meeting of Shareholders, the
Proxy Statement and a proxy card. This card should be used to register your vote
on the proposals to be acted upon at the Special Meeting. It is important for
you to provide voting instructions with respect to the issues described in the
accompanying Prospectus/Proxy Statement. We recommend that you read the Proxy
Statement in its entirety as the explanations will help you to decide what
voting instructions you would like to provide.
Whether or not you plan to attend the meeting in person, please vote your
shares. As a convenience to our shareholders, you may now vote in any one of
four ways:
o THROUGH THE INTERNET - www.eproxyvote.com/pzsax
o BY TELEPHONE - 877-779-8683
o BY MAIL - using the enclosed Proxy Card(s) and postage paid
envelope
o IN PERSON - at the Special Meeting
We encourage you to vote by telephone or Internet; have your proxy card in
hand, and call the number or go to the website and follow the instructions given
there. Use of telephone or Internet voting will reduce the time and cost
associated with this proxy solicitation. Whichever method you choose, please
read the enclosed proxy statement carefully before you vote.
Please note that you may receive more than one proxy package if you hold
shares of the Merged Series in more that one account. You should return separate
proxy cards for each account. If you have any questions, please call
800-243-1574, between 8:00 a.m. and 6:00 p.m. Eastern time, Monday through
Friday.
YOUR VOTE ON THESE MATTERS IS IMPORTANT. PLEASE COMPLETE EACH PROXY CARD AND
RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED OR VOTE USING ONE OF THE OTHER
METHODS DESCRIBED. PLEASE RESPOND - IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF
FURTHER SOLICITATION, WE ASK THAT YOU VOTE PROMPTLY. IT IS IMPORTANT THAT YOUR
SHARES BE REPRESENTED.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin, President
PHOENIX-OAKHURST STRATEGY FUND
A SERIES OF PHOENIX TRUST
900 THIRD AVENUE, 31ST FLOOR
NEW YORK, NY 10022
1-800-272-2700
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 19, 2004
TO THE SHAREHOLDERS:
The Phoenix-Oakhurst Strategy Fund, a series of Phoenix Trust, a Delaware
Statutory Trust, will hold a Special Meeting of Shareholders at the offices of
Phoenix Investment Partners, Ltd., 56 Prospect Street, Hartford, Connecticut
06115, on March 19, 2004 at 2:00 p.m., local time, for the following purposes:
1. To consider and act upon a proposal to approve the Agreement and Plan of
Reorganization, dated March 19, 2004, and the transactions it
contemplates, including (a) the transfer of all or substantially all of
the assets of the Phoenix-Oakhurst Strategy Fund, a series of the Phoenix
Trust, to the Phoenix-Oakhurst Growth & Income Fund, a series of Phoenix
Equity Series Fund, in exchange solely for shares of the corresponding
class of the Phoenix-Oakhurst Growth & Income Fund and the assumption by
the Phoenix-Oakhurst Growth & Income Fund of all liabilities of the
Phoenix-Oakhurst Strategy Fund and (b) the distribution of the shares of
the Phoenix-Oakhurst Growth & Income Fund so received to shareholders of
the Phoenix-Oakhurst Strategy Fund in complete liquidation of the
Phoenix-Oakhurst Strategy Fund.
2. To consider and act upon any other business as may properly come before
the meeting and any adjournment(s) thereof.
You are entitled to vote at the meeting and any adjournment(s) if you owned
shares of the Phoenix-Oakhurst Strategy Fund at the close of business on January
13, 2004.
Whether or not you plan to attend the meeting in person, please vote your
shares. As a convenience to our shareholders, you may now vote in any one of the
following ways:
o THROUGH THE INTERNET - www.eproxyvote.com/pzsax
o BY TELEPHONE - 877-779-8683
o BY MAIL - using the enclosed Proxy Card(s) and postage paid
envelope
o IN PERSON - at the Special Meeting
We encourage you to vote by telephone, or Internet; have your proxy card in
hand, and call the number or go to the website and follow the instructions given
there. Use of telephone or Internet voting will reduce the time and cost
associated with this proxy solicitation. Whichever method you choose, please
read the enclosed proxy statement carefully before you vote.
If you sign, date, and return the proxy card but give no voting instructions,
your shares will be voted "FOR" the proposal noticed above.
By Order of the Board of Trustees of
Phoenix Trust
MARC BALTUCH
SECRETARY
New York, NY
January 30, 2004
INTENTIONALLY LEFT BLANK
PHOENIX-OAKHURST GROWTH & INCOME FUND
A SERIES OF PHOENIX EQUITY SERIES FUND
C/O PHOENIX EQUITY PLANNING CORPORATION
101 MUNSON STREET
GREENFIELD, MASSACHUSETTS 01301
1-800-243-1574
PHOENIX-OAKHURST STRATEGY FUND
A SERIES OF PHOENIX TRUST
900 THIRD AVENUE, 31ST FLOOR
NEW YORK, NEW YORK 10022
1-800-272-2700
PROSPECTUS/PROXY STATEMENT
DATED January 30, 2004
This Prospectus/Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Trustees of Phoenix Trust (the "Trust"),
for use at the Special Meeting of Shareholders of the Phoenix-Oakhurst Strategy
Fund (the "Merged Series") to be held at 2:00 p.m., local time, on March 19,
2004 at the offices of Phoenix Investment Partners, Ltd., 56 Prospect Street,
Hartford, Connecticut 06115 and at any adjournment(s).
The purpose of the meeting is to consider an Agreement and Plan of
Reorganization that would effect the reorganization of the Merged Series into
the Phoenix-Oakhurst Growth & Income Fund ("Surviving Series"), a series of
Phoenix Equity Series Fund (the "Acquiring Trust"), as described below. Under
the reorganization agreement, all or substantially all of the assets of the
Merged Series would be transferred to the Surviving Series in exchange solely
for shares of the corresponding classes in the Surviving Series and the
assumption by the Surviving Series of all liabilities of the Merged Series.
These shares of the Surviving Series would then be distributed pro rata to the
shareholders of the corresponding classes of the Merged Series, and then the
Merged Series would be liquidated. As a result of the proposed transactions,
each shareholder of the Merged Series would receive a number of full and
fractional shares of the corresponding class of the Surviving Series with an
aggregate net asset value equal to the aggregate net asset value of the
shareholder's Merged Series shares on the effective date of the reorganization.
The Surviving Series and the Merged Series are each portfolio series of
open-end management investment companies. The Surviving Series has an investment
objective to seek dividend growth, current income and capital appreciation. The
Merged Series has an investment objective of increasing the value of your
investment over the long term (capital appreciation) consistent with preserving
capital and reducing portfolio exposure to market risk. Phoenix Investment
Counsel, Inc. ("PIC") is employed as the investment advisor for the Surviving
Series. Phoenix/Zweig Advisers LLC ("PZA") is the investment advisor for the
Merged Series.
This Prospectus/Proxy Statement, which you should retain for future
reference, sets forth concisely the information that you should know about the
Merged Series, the Surviving Series, and the transactions contemplated by the
reorganization agreement. As used in this Prospectus/Proxy Statement, the term
"series" collectively refers to the Merged Series and the Surviving Series. The
term "trusts" collectively refers to the Trust and the Acquiring Trust.
Additional information about the Surviving Series and the Acquiring Trust is
included in the Surviving Series' Prospectus accompanying this document and is
incorporated by reference herein. Further information about the Surviving Series
and the Acquiring Trust is included in the Statement of Additional Information
for the Surviving Series, dated December 31, 2003, which has been filed with the
SEC and is incorporated by reference herein. A
copy of the Surviving Series' Statement of Additional Information may be
obtained without charge by contacting Phoenix Equity Planning Corporation at 56
Prospect Street, P.O. Box 150480, Hartford, Connecticut 06115-0480, or by
telephoning Phoenix Equity Planning Corporation toll-free at 1-800-243-4361.
Additional information about the Merged Series is included in the current
Prospectus of the Merged Series, dated May 1, 2003, as supplemented. A copy of
the Merged Series Prospectus has been filed with the SEC, and is incorporated by
reference herein. Further information about the Merged Series is included in the
Statement of Additional Information for the Merged Series, dated May 1, 2003, as
supplemented, which also has been filed with the SEC and is incorporated by
reference herein. A copy of the Merged Series' Prospectus and Statement of
Additional Information may be obtained without charge by contacting Phoenix
Equity Planning Corporation at 56 Prospect Street, P.O. Box 150480, Hartford,
Connecticut 06115-0480, or by telephoning Phoenix Equity Planning Corporation
toll-free at 1-800-243-4361.
A Statement of Additional Information to this Prospectus/Proxy Statement
dated January 30, 2004 relating specifically to the proposed transfer of all or
substantially all of the assets and certain identified liabilities of
Phoenix-Oakhurst Strategy Fund, a series of Phoenix Trust, to Phoenix-Oakhurst
Growth & Income Fund, in exchange for shares of the corresponding class of the
Phoenix-Oakhurst Growth & Income Fund, is incorporated herein by reference. A
copy of the Statement of Additional Information to this Prospectus/Proxy
Statement may be obtained without charge by contacting Phoenix Equity Planning
Corporation at 56 Prospect Street, P.O. Box 150480, Hartford, Connecticut
06115-0480, or by telephoning Phoenix Equity Planning Corporation toll-free at
1-800-243-4361.
The Trust files reports, proxy materials and other information with the SEC.
You may inspect those reports, proxy materials and other information at the
public reference facilities maintained by the SEC at 450 Fifth Street N.W.,
Washington, D.C. 20549. Copies of such materials may also be obtained from the
Public Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, 450 Fifth Street, Washington, D.C. 20549, at
prescribed rates, or at no charge from the EDGAR database on the SEC's web site
at www.sec.gov.
This Prospectus/Proxy Statement constitutes the proxy statement of the Merged
Series for the Special 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 3, 2004.
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THE SECURITIES OF THE SURVIVING SERIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE DISCLOSURE IN THIS
PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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The date of this Prospectus/Proxy Statement is January 30, 2004.
2
TABLE OF CONTENTS
Page
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SYNOPSIS................................................................. 5
PRINCIPAL RISK FACTORS................................................... 11
THE PROPOSED REORGANIZATION.............................................. 12
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES......................... 17
COMPARATIVE INFORMATION ON DISTRIBUTION ARRANGEMENTS..................... 19
COMPARATIVE INFORMATION ON SHAREHOLDER SERVICES.......................... 20
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS............................ 21
FISCAL YEAR.............................................................. 22
MANAGEMENT AND OTHER SERVICE PROVIDERS................................... 22
VOTING INFORMATION....................................................... 22
MISCELLANEOUS............................................................ 25
OTHER BUSINESS........................................................... 33
3
INTENTIONALLY LEFT BLANK
4
SYNOPSIS
BACKGROUND
The proposed reorganization is the outcome of deliberations by the Boards of
Trustees of the two trusts. PZA and PIC, the advisors to the Merged Series and
the Surviving Series, respectively, recommended that the Trustees of the
respective trusts consider the benefits that the shareholders would realize if
the Merged Series was to be combined with the Surviving Series. In response to
their recommendation, the independent trustees of each trust requested that
management outline a specific reorganization proposal for their consideration
and provide an analysis of the specific benefits that shareholders would realize
from the proposal. Independent trustees are trustees who are not "interested
persons" of their respective trusts (as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended (the "1940 Act")). After considering
the specific reorganization proposal, the Trustees of the Trust and the
Acquiring Trust, including the independent trustees, at meetings held on
November 12, 2003 and November 19, 2003, respectively, unanimously approved the
reorganization.
SUMMARY OF THE PROPOSED REORGANIZATION
The reorganization will be effected in accordance with the terms of a
reorganization agreement, a form of which is attached to this Prospectus/Proxy
Statement as Exhibit A. The reorganization agreement provides for:
o the acquisition of all or substantially all of the assets of the
Merged Series by the Surviving Series in exchange solely for shares
of the corresponding class in the Surviving Series;
o the assumption by the Surviving Series of all liabilities of the
Merged Series;
o the pro rata distribution of the corresponding class of the
Surviving Series shares to the Merged Series shareholders in
exchange for the outstanding Merged Series shares; and
o the liquidation of the Merged Series.
The reorganization is anticipated to occur on or about March 26, 2004. If the
reorganization agreement is implemented, each Merged Series shareholder will
receive a number of full and fractional shares of the corresponding class of the
Surviving Series shares with an aggregate net asset value equal to the aggregate
net asset value of his or her Merged Series shares as of the closing date of the
reorganization.
The implementation of the reorganization agreement is subject to a number of
conditions set forth in the reorganization agreement. See "The Proposed
Reorganization." Among the significant conditions (which may not be waived) are:
o the receipt by each trust of an opinion of counsel as to the
Federal income tax consequences of the reorganization; and
o the approval of the reorganization agreement by the shareholders of
the Merged Series.
The reorganization agreement provides that Phoenix Investment Partners, Ltd.
will bear all costs and expenses of the reorganization, including the costs of
the Special Meeting, the costs and expenses incurred in the preparation and
mailing of the notice, this Prospectus/Proxy Statement and the proxy, and the
solicitation of proxies.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and principal investment strategies of the Merged
Series and the Surviving Series are similar:
5
o The Merged Series has an investment objective of increasing the
value of the shareholder's investment over the long term (capital
appreciation) consistent with preserving capital and reducing
portfolio exposure to market risk. The Surviving Series has an
investment objective to seek dividend growth, current income and
capital appreciation.
o The Merged Series' advisor uses a quantitative value strategy that
selects equity securities based on value criteria such as price to
earnings, sales and cash flows and growth criteria such as earnings
per share. The strategy emphasizes securities of companies
relatively undervalued to the market in general and with improving
fundamentals. The advisor invests nearly all of the Merged Series'
assets in common stocks and other equity securities, rather than
holding significant amounts of cash and short-term instruments.
Under normal circumstances, the Surviving Series invests at least
80% of its assets in common stocks or other equity securities;
however, the advisor intends to invest nearly all of the Series'
assets in common stocks and other equity securities, rather than
holding significant amounts of cash and short-term investments. The
Surviving Series has a greater focus on income and dividends.
Both the Merged Series and the Surviving Series invest in equity securities
with capital appreciation as an objective. The Series differ because the
Merged Series invests over the long term (capital appreciation) consistent with
preserving capital. Conversely, the Surviving Series, however, also invests in
equity securities seeking dividend growth and current income.
You may also see "Principal Risk Factors" and "Comparison of Investment
Objectives and Policies" below, for further information on the similarities and
differences between the investment objectives, policies and risks of the
Surviving Series and the Merged Series. You can also find additional information
for the Surviving Series in its Prospectus.
DISTRIBUTION AND PURCHASE ARRANGEMENTS
Each of the Merged Series and the Surviving Series currently offers three
classes of shares: Class A, Class B and Class C shares. Shares are offered to
the public at a price equal to the net asset value per share plus applicable
sales and distribution charges. For Class A Shares of each series, sales charges
are imposed at the time of purchase. For Class B and Class C Shares of each
series, sales charges are imposed on a contingent deferred basis.
See "Comparative Information on Distribution Arrangements", below, for
further information on the distribution arrangements of each series. You can
also find additional information on distribution arrangements for the Surviving
Series in its Prospectus.
DIVIDENDS AND DISTRIBUTIONS
The Merged Series and the Surviving Series distributes net investment income
semi-annually. Both series distribute net realized capital gains, if any, at
least annually.
All dividends and distributions of the Merged Series and the Surviving Series
are paid in additional shares of the respective series unless shareholders elect
to receive cash. You can also find additional information on dividends and
distributions for the Surviving Series in its Prospectus.
EXCHANGES
The Merged Series and the Surviving Series currently offer shareholders
identical exchange privileges. Shareholders of the Merged Series and the
Surviving Series may exchange their shares for shares of a corresponding class
of shares of other affiliated Phoenix funds.
On exchanges with corresponding classes of shares that carry a different
contingent deferred sales charge schedule, the contingent deferred sales charge
schedule of the original shares purchased continues to apply. You can also find
additional information on the Surviving Series' exchange privileges in its
Prospectus.
6
REDEMPTION PROCEDURES
Shareholders of both the Merged Series and the Surviving Series may redeem
their shares at a redemption price equal to the net asset value of the shares
(minus any applicable contingent deferred sales charge) as next determined
following the receipt of a redemption order in proper form. Ordinarily, payments
of redemption proceeds for redeemed Merged Series and Surviving Series shares
are made within seven days after receipt of a redemption request in proper form.
See "Comparative Information on Shareholder Services" for more information. You
can also find additional information on the Surviving Series' redemption
procedures in its Prospectus.
FEDERAL TAX CONSEQUENCES OF PROPOSED REORGANIZATION
At the closing of the reorganization, the Trust and the Acquiring Trust will
receive an opinion of counsel, subject to certain assumptions and
representations, that:
o no gain or loss will be recognized by the Merged Series on the
transfer of the assets of the Merged Series to the Surviving Series
in exchange for Surviving Series shares and the assumption by the
Surviving Series of all liabilities of the Merged Series or upon
the distribution of Surviving Series shares to the Merged Series
shareholders in exchange for their shares of the Merged Series;
o the aggregate tax basis of the Surviving Series shares, including
any fractional shares, received by each shareholder of the Merged
Series pursuant to the reorganization will be the same as the
aggregate tax basis of the Merged Series shares held by such
shareholder immediately prior to the reorganization; and
o the holding period of the Surviving Series shares, including
fractional shares, to be received by each shareholder of the Merged
Series will include the period during which the Merged Series
shares exchanged therefor were held by such shareholder (provided
that the Merged Series shares were held as a capital asset on the
date of the reorganization).
See "The Proposed Reorganization--Federal Income Tax Consequences" for more
information.
RISK FACTORS
The Merged Series and the Surviving Series are each subject to general
investment risk. Because the Merged Series invests in growth stocks and,
typically growth stocks make little or no dividend payments, investment return
is based on a stock's capital appreciation. Growth stocks are more susceptible
than non-growth stocks to market increases and decreases. Conversely, the
Surviving Series intends to be fully invested in equity securities which will
cause the net asset value to decrease more quickly if the value of such
securities decreases as compared to a series that holds a larger amount of cash.
The Surviving Series seeks to outperform the S&P 500 Index in average total
return and dividend yield. The performance of the S&P 500 Index may be negative.
Therefore the series may outperform the S&P 500 Index and still have a negative
return. Investors can lose money by investing in either series. There is no
assurance that either series will meet its investment objective. You may also
see "Principal Risk Factors" for the principal risks associated with an
investment in each series.
MANAGEMENT AND OTHER SERVICE PROVIDERS
As the investment advisor for the Surviving Series, PIC is responsible for
managing the Surviving Series' investment program and its general operations, as
well as for the day-to-day management of the Surviving Series' portfolio. PZA,
the investment advisor for the Merged Series, is responsible for managing the
Merged Series' investment program and general operations as well as the
day-to-day management of the Merged Series' portfolio.
Steven L. Colton serves as portfolio manager of the Merged Series and the
Surviving Series, and Dong Zhang serves as a member of the team that manages the
Merged Series and the Surviving Series. Mr. Colton is Senior Vice President of
PZA and joined PIC, as Managing Director, Value Equities in 1997. Mr. Zhang
joined PIC in 1997.
7
COMPARATIVE FEE TABLES
The tables below are designed to assist an investor in understanding the
various direct and indirect costs and expenses associated with an investment in
the relevant class of shares of each series. The following tables show
shareholder transaction expenses currently applicable to the purchase of shares
of both series. These expenses will remain in effect as to the combined
Surviving Series following the reorganization.
SURVIVING SERIES CLASS A CLASS B CLASS C
----------------------- ----------------- -----------------------
Shareholder Fees (paid directly from your
investment)
Maximum Sales Charge (Load) Imposed on Purchase
(as a percentage of offering price) 5.75% None None
Maximum Deferred Sales Charge (Load) (as a
percentage of the lesser of the value redeemed
or the amount invested) None 5%(a) 1%(b)
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
MERGED SERIES CLASS A CLASS B CLASS C
----------------------- ----------------- -----------------------
Shareholder Fees (paid directly from your
investment)
Maximum Sales Charge (Load) Imposed on Purchase
(as a percentage of offering price) 5.75% None None
Maximum Deferred Sales Charge (Load) (as a
percentage of the lesser of the value redeemed
or the amount invested) None(c) 5%(d) 1.25%(b)
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
- ---------------
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during
the fourth and fifth years and to 0% after the fifth year.
(b) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(c) A 1% contingent deferred sales charge is imposed on redemptions within the
first 12 months of purchases of $1 million or more originally purchased
without an initial sales charge.
(d) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 3% during
the third and fourth years and to 0% after the sixth year.
The tables below also includes pro forma information for the combined
Surviving Series resulting from the reorganization assuming the reorganization
took place on August 31, 2003, and after adjusting such information to reflect
current fees. The expense information for the Surviving Series and the Merged
Series is based upon expenses for the twelve months ended August 31, 2003.
8
As indicated in the following tables, immediately upon effectiveness of the
reorganization, the "Total Annual Fund Operating Expenses" for the combined
Surviving Series are expected to be lower than the "Total Annual Fund
Operating Expenses" for the Merged Series.
CLASS A SHARES
-----------------------------------------------------------------
PRO FORMA COMBINED
SURVIVING SERIES MERGED SERIES SURVIVING SERIES
----------------------- ----------------- -----------------------
Annual Fund Operating Expenses
(expenses that are deducted, from fund assets)
Management Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(b) 0.25% 0.30% 0.25%
Other Expenses 0.45% 0.62% 0.44%
Total Annual Fund Operating Expenses 1.45%(a) 1.67% 1.44%(a)
CLASS B SHARES
-----------------------------------------------------------------
PRO FORMA COMBINED
SURVIVING SERIES MERGED SERIES SURVIVING SERIES
----------------------- ----------------- -----------------------
Annual Fund Operating Expenses
(expenses that are deducted, from fund assets)
Management Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(b) 1.00% 1.00% 1.00%
Other Expenses 0.45% 0.62% 0.44%
Total Annual Fund Operating Expenses 2.20%(a) 2.37% 2.19%(a)
CLASS C SHARES
-----------------------------------------------------------------
PRO FORMA COMBINED
SURVIVING SERIES MERGED SERIES SURVIVING SERIES
----------------------- ----------------- -----------------------
Annual Fund Operating Expenses
(expenses that are deducted, from fund assets)
Management Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(b) 1.00% 1.00% 1.00%
Other Expenses 0.45% 0.62% 0.44%
Total Annual Fund Operating Expenses 2.20%(a) 2.37% 2.19%(a)
- ---------------
(a) The Surviving Series' investment advisor has voluntarily agreed to
reimburse through December 31, 2004 the Surviving Series' expenses
(excluding interest, taxes, brokerage fees, commissions and
extraordinary expenses) other than Management Fees and Distribution
and Service Fees to the extent that such expenses exceed 0.25% of each
class of shares. Actual Total Annual Fund Operating Expenses, after
expense reimbursement were 1.25% for Class A Shares, 2.00% for Class B
Shares and 2.00% for Class C Shares for the fiscal year ended August
31, 2003.
(b) Distribution and Service Fees represent an asset-based sales charge
that, for a long-term shareholder, may be higher than the maximum
front-end sales charge permitted by the NASD.
9
EXAMPLE
These examples illustrate the impact of the above fees and expenses on an
account with an initial investment of $10,000, based on the expenses shown
above. They assume a 5% annual return, the reinvestment of all dividends and
distributions and "Annual Fund Operating Expenses" remaining the same each year.
In the case of Class B Shares, it is assumed that your shares are converted to
Class A Shares after seven years with respect to the Merged Series and after
eight years with respect to the Surviving Series. These examples are
hypothetical; actual series expenses and returns vary from year to year and may
be higher or lower than those shown.
Fees and expenses if you redeemed your shares at the end of each time period:
- --------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------------------------------------------------
Surviving Series $714 $1,007 $1,322 $2,210
- --------------------------------------------------------------------------------------------------------------------------
Merged Series $735 $1,071 $1,430 $2,438
- --------------------------------------------------------------------------------------------------------------------------
Pro Forma Combined Surviving Series $713 $1,004 $1,317 $2,200
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------------------------------------------------
Surviving Series $623 $888 $1,180 $2,344
- --------------------------------------------------------------------------------------------------------------------------
Merged Series $640 $1,039 $1,365 $2,451
- --------------------------------------------------------------------------------------------------------------------------
Pro Forma Combined Surviving Series $622 $885 $1,175 $2,334
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
CLASS C SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------------------------------------------------
Surviving Series $323 $688 $1,180 $2,534
- --------------------------------------------------------------------------------------------------------------------------
Merged Series $365 $739 $1,265 $2,706
- --------------------------------------------------------------------------------------------------------------------------
Pro Forma Combined Surviving Series $322 $685 $1,175 $2,524
- --------------------------------------------------------------------------------------------------------------------------
Fees and expenses if you did not redeem your shares at the end of each time period:
- --------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------------------------------------------------
Surviving Series $714 $1,007 $1,322 $2,210
- --------------------------------------------------------------------------------------------------------------------------
Merged Series $735 $1,071 $1,430 $2,438
- --------------------------------------------------------------------------------------------------------------------------
Pro Forma Combined Surviving Series $713 $1,004 $1,317 $2,200
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------------------------------------------------
Surviving Series $223 $688 $1,180 $2,344
- --------------------------------------------------------------------------------------------------------------------------
Merged Series $240 $739 $1,265 $2,451
- --------------------------------------------------------------------------------------------------------------------------
Pro Forma Combined Surviving Series $222 $685 $1,175 $2,334
- --------------------------------------------------------------------------------------------------------------------------
10
- --------------------------------------------------------------------------------------------------------------------------
CLASS C SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------------------------------------------------
Surviving Series $223 $688 $1,180 $2,534
- --------------------------------------------------------------------------------------------------------------------------
Merged Series $240 $739 $1,265 $2,706
- --------------------------------------------------------------------------------------------------------------------------
Pro Forma Combined Surviving Series $222 $685 $1,175 $2,524
- --------------------------------------------------------------------------------------------------------------------------
Note: Actual expenses for the Surviving Series may be lower than those shown
in the example above since the expense levels used to calculate the figures
shown do not include the reimbursement of expenses over certain levels by the
Surviving Series' investment advisor. In the same manner, the voluntary
management fee waiver for the Merged Series is not reflected.
The purpose of the tables above is to help the investor understand the
various costs and expenses that the investor will bear directly or indirectly.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN SHOWN.
PRINCIPAL RISK FACTORS
The following highlights the principal risk factors associated with an
investment in the Surviving Series and the Merged Series and is qualified in its
entirety by the more extensive discussion of risk factors in the Prospectuses
and Statements of Additional Information of the Surviving Series and the Merged
Series. The risk factors shown below apply to both series.
An investment in each series is subject to specific risks arising from the
types of securities in which the series invests and general risks arising from
investing in any mutual fund. You can lose money by investing in either series.
There is no assurance that either series will meet its investment objective.
GENERAL
The value of the investments of the Merged Series and the Surviving Series
that supports your share value can decrease. If between the time you purchase
shares and the time you sell shares the value of your series' investments
decreases, you will lose money.
Investment values can decrease for a number of reasons. Conditions affecting
the overall economy, specific industries or companies in which your series
invests can be worse than expected and investments may fail to perform as each
series' advisor expects. As a result, the value of your shares may decrease.
The Merged Series and the Surviving Series are each subject to general
investment risk. Because the Merged Series invests in growth stocks, and
typically growth stocks make little or no dividend payments, investment return
is based on a stock's capital appreciation. Growth stocks are more susceptible
than non-growth stocks to market increases and decreases. Conversely, the
Surviving Series intends to be fully invested in equity securities which will
cause the net asset value to decrease more quickly if the value of such
securities decreases as compared to a series that holds a larger amount of cash.
The Surviving Series seeks to outperform the S&P 500 Index in average total
return and dividend yield. The performance of the S&P 500 Index may be negative.
Therefore the series may outperform the S&P 500 Index and still have a negative
return.
FULLY INVESTED IN EQUITY SECURITIES
The net asset value of a series that intends to be fully invested in
securities will decrease more quickly if the value of such securities decreases
as compared to a series that holds larger cash positions.
11
S&P 500 INDEX COMPARISON
The performance of the S&P 500 Index, the benchmark of each series, can be
negative. Although the series may outperform the S&P 500 Index, each series may
still have a negative return.
THE PROPOSED REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION
The terms and conditions under which the proposed reorganization may be
consummated are set forth in the reorganization agreement. Significant
provisions of the reorganization agreement are summarized below. This summary,
however, is qualified in its entirety by reference to the reorganization
agreement, a form of which is attached to this Prospectus/Proxy Statement as
Exhibit A.
The Agreement and Plan of Reorganization contemplates:
o the acquisition by the Surviving Series, on the closing date of the
reorganization, of all or substantially all of the assets of the Merged
Series in exchange solely for shares of the corresponding class of the
Surviving Series and the assumption by the Surviving Series of all
liabilities of the Merged Series; and
o the distribution of shares of the corresponding class of the Surviving
Series to the shareholders of the Merged Series in exchange for their
respective shares of the Merged Series.
The assets of the Merged Series to be acquired by the Surviving Series
include all property, including, without limitation, all cash, securities,
commodities and futures interests, and dividends or interest receivables which
are owned by the Merged Series and any deferred or prepaid expenses shown as an
asset on the books of the Merged Series on the closing date of the
reorganization. The Surviving Series will assume all liabilities, accrued or
contingent expenses, costs, charges, and reserves of the Merged Series reflected
on an unaudited statement of assets and liabilities as of the closing date. The
closing of the reorganization will occur following satisfaction (or waiver) of
the conditions to closing set forth in the reorganization agreement (currently
anticipated to be on or about March 26, 2004), or such later date as the parties
may agree.
The value of the Merged Series' assets to be acquired and the Merged Series'
liabilities to be assumed by the Surviving Series and the net asset value of
each class of shares of the Surviving Series will be determined immediately
after the close of regular trading on the New York Stock Exchange on the closing
date, using the valuation procedures set forth in the series' then current
Prospectus and Statement of Additional Information. The number of shares of each
class of the Surviving Series to be issued to the Merged Series will be
determined by dividing (a) the value of the aggregate net assets attributable to
each class of shares of the Merged Series by (b) the net asset value per share
of the corresponding class of the Surviving Series.
On the closing date, the Merged Series will liquidate and distribute pro rata
to its shareholders of record the Surviving Series shares received by the Merged
Series in exchange for their respective shares in the Merged Series. This
liquidation and distribution will be accomplished by opening an account on the
books of the Surviving Series in the name of each shareholder of record of the
Merged Series and by crediting to each account the shares due pursuant to the
reorganization. Every Merged Series shareholder will own shares of the
corresponding class of the Surviving Series immediately after the
reorganization, the value of which will be equal to the value of the
shareholder's Merged Series shares immediately prior to the reorganization.
At or prior to the closing date, the Merged Series will declare a dividend or
dividends which, together with all previous such dividends, will have the effect
of distributing to the Merged Series shareholders all of the Merged Series'
investment company taxable income for all taxable years ending at or prior to
the closing date (computed without regard to any deduction for dividends paid)
and all of its net capital gains realized (after reduction for any capital loss
carry-forward) in all taxable years ending at or prior to the closing date.
12
Subject to certain limitations on liability, the Surviving Series has agreed
to indemnify and hold harmless the Trustees of the Trust who are not "interested
persons" of the advisor or distributor of the Merged Series (the "Independent
Trustees") from and against any and all claims, costs, expenses (including
reasonable attorneys' fees), losses and liabilities of any sort or kind
(collectively "Liability") which may be asserted against them or for which the
Independent Trustees may become liable arising out of or attributable to the
transactions contemplated by the reorganization agreement, provided that any
Independent Trustee seeking the benefit of this indemnification shall not have
materially contributed to the creation of such Liability by acting in a manner
contrary to his or her fiduciary duties as a trustee under the 1940 Act.
The consummation of the reorganization is subject to a number of conditions
set forth in the reorganization agreement. Certain of these conditions may be
waived by the Board of Trustees or by an authorized officer of each trust, as
appropriate.
Among the significant conditions which may not be waived are: (a) the receipt
by the Trust and the Acquiring Trust of an opinion of counsel as to certain
Federal income tax aspects of the reorganization and (b) the approval of the
reorganization agreement by the shareholders of the Merged Series. The Plan may
be terminated and the reorganization abandoned at any time, before or after
approval by the shareholders of the Merged Series, prior to the closing date, by
either party by resolution of its Board of Trustees. In addition, the
reorganization agreement may be amended by mutual agreement, except that no
amendment may be made to the reorganization agreement subsequent to the Special
Meeting that would change the provisions for determining the number of Surviving
Series shares to be issued to shareholders of the Merged Series without their
further approval.
REASONS FOR THE REORGANIZATION
The proposed reorganization is the outcome of the deliberation by the Boards
of Trustees of the trusts. The advisors to each series recommended that the
Trustees of each trust consider the benefits that shareholders would realize if
the Merged Series were to be combined with the Surviving Series. In response to
this recommendation, the independent trustees of each trust requested that
management outline a specific reorganization proposal for their consideration
and provide an analysis of the specific benefits to be realized by shareholders
from the proposal.
In the course of their review, the Trustees of the Trust noted that the
reorganization would be a means of combining two series with similar investment
objectives and principal investment strategies and would permit the shareholders
of the Merged Series to pursue their investment goals in a larger fund. In
reaching this conclusion, the Board considered a number of additional factors,
including the following:
o the reorganization could result in economies of scale through the
spreading of fixed costs over a larger asset base;
o the total expense ratio of the combined Surviving Series following the
reorganization is projected to be slightly lower than the current total
expense ratio of the Merged Series;
o the reorganization provides for continuity of distribution and
shareholder servicing arrangements; and
o the reorganization will not result in the recognition of any gain or loss
for federal income tax purposes either to the Merged Series or the
Surviving Series or to the shareholders of either of the series.
After considering these and other factors, the Board of Trustees of the
Trust, including the independent trustees, unanimously concluded at a meeting
held on November 12, 2003 that the reorganization would be in the best interests
of the Merged Series and its shareholders and that the interests of existing
Merged Series' shareholders will not be diluted as a result of the transactions
contemplated by the reorganization. The Board of Trustees of the Trust then
unanimously voted to approve the reorganization and authorized the officers of
the Trust to submit the reorganization proposal to shareholders for
consideration.
13
At a meeting held on November 19, 2003, the Board of Trustees of the
Acquiring Trust, including the independent trustees, also unanimously concluded
that the reorganization would be in the best interests of the Surviving Series
and its shareholders and that the interests of existing Surviving Series'
shareholders will not be diluted as a result of the reorganization. In the
course of their review, the Board of Trustees of the Acquiring Trust noted that
the advisors to each series have elected to use the historical financial
statements and performance record of the Surviving Series.
FEDERAL INCOME TAX CONSEQUENCES
General
-------
The reorganization has been structured with the intention that it qualify for
Federal income tax purposes as a tax-free reorganization under Section 368(a) of
the Internal Revenue Code (the "Code"). This means that, in the opinion of
counsel, no gain or loss will be recognized by a shareholder of the Merged
Series for Federal income tax purposes as a result of the reorganization.
As a condition to the closing of the reorganization, the Merged Series and
the Surviving Series will receive an opinion of Shearman & Sterling LLP,
substantially to the effect that, among other things, for Federal income tax
purposes, upon consummation of the reorganization (i) no gain or loss will be
recognized by the Merged Series or the Surviving Series as a result of the
reorganization, (ii) no gain or loss will be recognized by a shareholder of the
Merged Series upon his or her receipt of shares of the Surviving Series in the
reorganization solely in exchange for his or her shares of the Merged Series,
(iii) the Merged Series and the Surviving Series will be a "party to a
reorganization" under Section 368(b) of the Code, (iv) the holding period of the
assets of the Merged Series acquired by the Surviving Series will include the
period during which such assets were held by the Merged Series, (v) the holding
period for shares of the Surviving Series received by each shareholder of the
Merged Series in exchange for his or her shares in the Merged Series will
include the period during which such shareholder held shares of the Merged
Series (provided the Merged Series shares were held as capital assets on the
date of the exchange), and (vi) immediately after the reorganization, the tax
basis of the shares of the Surviving Series received by shareholders of the
Merged Series in the reorganization will be equa1, in the aggregate, to the tax
basis of the shares of the Merged Series surrendered in exchange therefore.
Shearman & Sterling LLP's opinion will be based upon certain assumptions and
representations made by the Merged Series and the Surviving Series.
An opinion of counsel does not have the effect of a private letter ruling
from the Internal Revenue Service ("IRS") and is not binding on the IRS or any
court.
If the reorganization is consummated but fails to qualify as a reorganization
within the meaning of Section 368(a) of the Code, the reorganization would be
treated as a taxable sale of assets followed by a taxable liquidation of the
Merged Series, and Merged Series' shareholders would recognize a taxable gain or
loss equal to the difference between their basis in the Merged Series shares and
the fair market value of the shares in the Surviving Series received.
To the extent the Surviving Series has unrealized capital gains at the time
of the reorganization, the Merged Series' shareholders may incur taxable gains
in the year that the Surviving Series realizes and distributes those gains. This
will be true notwithstanding that the unrealized gains were reflected in the
price of the Surviving Series' shares at the time they were exchanged for assets
of the Merged Series in the reorganization. Conversely, shareholders of the
Surviving Series would share in unrealized capital gains of the Merged Series
after the reorganization and bear a tax consequence on the subsequent
realization of such gains.
To the extent that the Merged Series has loss carry-forwards at the time of
the reorganization, the Merged Series' shareholders may not be able to benefit
from such loss carry-forwards after the reorganization.
Shareholders should consult their tax advisers regarding the effect of the
reorganization in light of their individual circumstances. As the foregoing
relates only to Federal income tax consequences, shareholders also should
consult their tax advisers as to the foreign, state, local and other tax
consequences of the reorganization.
14
Status as a Regulated Investment Company
----------------------------------------
The Merged Series and the Surviving Series have elected and qualified to be
taxed as regulated investment companies under Sections 851-855 of the Code, and
after the reorganization, the Surviving Series intends to operate or continue to
operate so as to qualify as a regulated investment company. The Merged Series'
existence as a separate series of the Trust will be terminated as part of the
reorganization.
CAPITALIZATION
The following table sets forth the capitalization of the Surviving Series and
the Merged Series, and on a pro forma basis for the combined Surviving Series as
of August 31, 2003 giving effect to the proposed acquisition of net assets of
the Merged Series at net asset value. The pro forma data reflects an exchange
ratio of approximately 0.6466, 0.6671 and 0.6653 for Class A, Class B and Class
C shares, respectively, of the Surviving Series issued for each Class A, Class B
and Class C share, respectively, of the Merged Series.
PRO FORMA
COMBINED
SURVIVING SERIES MERGED SERIES SERIES
------------------ ------------------- ----------------
Net Assets
Class A $131,169,093 $59,083,581 $190,252,674
Class B $ 72,051,194 $ 6,495,803 $ 78,546,997
Class C $ 52,466,032 $32,296,148 $ 84,762,180
Net Asset Value per share
Class A $11.86 $7.67 $11.86
Class B $11.38 $7.59 $11.38
Class C $11.38 $7.57 $11.38
Shares outstanding
Class A 11,060,193 7,703,595 16,041,945
Class B 6,331,123 855,641 6,901,932
Class C 4,608,613 4,265,430 7,446,587
The table set forth above should not be relied on to determine the number of
Surviving Series shares to be received in the reorganization. The actual number
of shares to be received will depend upon the net asset value and number of
shares outstanding of the Merged Series and the Surviving Series at the time of
the reorganization.
15
HISTORICAL PERFORMANCE INFORMATION
The following table sets forth the average annual total return of the shares
of Class A, Class B and Class C of the Surviving Series and the Merged Series
for the periods indicated.
AVERAGE ANNUAL TOTAL RETURNS FOR
PERIODS ENDING AUGUST 31, 2003(1)
PHOENIX-OAKHURST
GROWTH & INCOME FUND INCEPTION INCEPTION
SURVIVING SERIES 1 YEAR 5 YEARS TO 08/31/03 DATE
- ------------------------------------- ----------- ------------ ---------------- -----------------
Class A Shares at NAV(2) 9.21% 2.96% 3.40% 9/25/97
Class A Shares at POP(3) 2.93 1.75 2.37 9/25/97
Class B Shares at NAV(2) 8.38 2.20 2.62 9/25/97
Class B Shares with CDSC(4) 4.38 2.20 2.62 9/25/97
Class C Shares at NAV(2) 8.48 2.20 2.63 9/25/97
Class C Shares with CDSC(4) 8.48 2.20 2.63 9/25/97
S&P 500 Index(5) 12.09 2.50 2.59 9/25/97
- -------------------------------------
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 5.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for Class B Shares decline from 5% to 0%
over a five year period. CDSC charges for Class C shares are 1% in the
first year and 0% thereafter.
(5) The S&P 500 Index is a measure of stock market total return performance.
The index's performance does not reflect sales charges.
16
AVERAGE ANNUAL TOTAL RETURNS(1) FOR
PERIODS ENDING JUNE 30, 2003
PHOENIX-OAKHURST
STRATEGY FUND INCEPTION INCEPTION
MERGING SERIES 1 YEAR 5 YEARS 10 YEARS TO 06/30/03 DATE
- ------------------------------------- ----------- ------------ ---------------- ----------------- ----------------
Class A Shares at NAV(2) (3.12)% (8.04)% 2.27% ----- -----
Class A Shares at POP(3) (8.69) (9.12) 1.66 ----- -----
Class B Shares at NAV(2) (3.65) (8.66) ----- (1.94)% 4/8/96
Class B Shares with CDSC(4) (7.50) (8.79) ----- (1.94)% 4/8/96
Class C Shares at NAV(2) (3.66) (8.67) 1.56 ----- -----
Class C Shares with CDSC(4) (3.66) (8.67) 1.56 ----- -----
S&P 500 Index(5) 0.26 (1.59) 10.08 7.58 4/8/96
- ---------------
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 5.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for Class B Shares decline from 5% to 0%
over a six year period. CDSC charges for Class C shares are 1.25% in the
first year and 0% thereafter.
(5) The S&P 500 Index is an unmanaged, commonly used measure of stock market
total return performance. The index's performance does not reflect sales
charges.
All returns represent past performance which may not be indicative of future
performance. The investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion is a summary of some of the more significant
similarities and differences in the investment objectives, policies and
restrictions of the Surviving Series and the Merged Series. The discussion below
is qualified in its entirety by the discussion elsewhere in this
Prospectus/Proxy Statement, and in each series' Prospectus and Statement of
Additional Information.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of the Surviving Series and the Merged Series are
similar. The Surviving Series has an investment objective to seek dividend
growth, current income and capital appreciation. The Merged Series has an
investment objective of increasing the value of your investment over the long
term (capital appreciation) consistent with preserving capital and reducing
portfolio exposure to market risk. The investment objectives of the Surviving
Series and the Merged Series are "fundamental policies" which may not be changed
without the approval of the holders of at least a "majority of the outstanding
voting shares" of the series. A majority of the outstanding voting shares is
defined in the 1940 Act as the lesser of (a) the vote of the holders of 67% or
more of the outstanding voting shares of the series present in person or by
proxy, if the holders of more than 50% of the outstanding voting shares are
present in person or by proxy, or represented by proxy, or (b) the vote of the
holder of more than 50% of the outstanding voting shares of the series.
The principal investment strategies of the Surviving Series and the Merged
Series are similar. Each series invests in equity securities, primarily common
stocks. Each series' advisor uses a quantitative value strategy in selecting
17
equity securities for the series. With respect to the Merged Series, the
strategy emphasizes securities of companies relatively undervalued to the market
in general and with improving fundamentals. Generally, up to 200 stocks are
selected from the 1,500 most liquid stocks that the advisor for the Merged
Series considers to be comparable to the stocks included in the S&P 500 Index by
the advisor. The Surviving Series' advisor's strategy involves the selection of
equity securities primarily from among the 1,500 largest companies traded in the
United States based on value criteria such as price to earnings, sales and cash
flows and growth criteria such as earnings per share. This strategy emphasizes
securities of companies relatively undervalued to the market in general and with
improving fundamentals.
Each series' advisor intends to invest nearly all of the series' assets in
common stocks and other equity securities, rather than holding significant
amounts of cash in short-term investments. However, each series may, as a
temporary defensive strategy, invest in money market instruments.
As the investment advisor for the Surviving Series, PIC is responsible for
managing the Surviving Series' investment program and general operations, as
well as the day-to-day management of the Surviving Series' portfolio. PZA, the
investment advisor for the Merged Series, is responsible for managing the Merged
Series' investment program and general operations, as well as the day-to-day
management of the Merged Series' portfolio.
CERTAIN INVESTMENT RESTRICTIONS
The Surviving Series and the Merged Series are subject to identical
investment restrictions that restrict the scope of their investments. These
investment restrictions are "fundamental policies".
These investment restrictions are:
(1) A series may not, with respect to 75% of its total assets, purchase
securities of an issuer (other than the U.S. Government, its agencies,
instrumentalities or authorities or repurchase agreements collateralized by
U.S. Government securities and other investment companies), if: (a) such
purchase would, at the time, cause more than 5% of the series' total
assets, taken at market value, to be invested in the securities of such
issuer; or (b) such purchase would, at the time, result in more than 10% of
the outstanding voting securities of such issuer being held by the series.
(2) A series may not purchase securities if, after giving effect to the
purchase, more than 25% of its total assets would be invested in the
securities of one or more issuers conducting their principal business
activities in the same industry (excluding the U.S. Government, its
agencies or instrumentalities).
(3) A series may not borrow money, except (i) in amounts not to exceed one
third of the value of the series' total assets (including the amount
borrowed) from banks, and (ii) up to an additional 5% of its total assets
from banks or other lenders for temporary purposes. For purposes of this
restriction, (a) investment techniques such as margin purchases, short
sales, forward commitments, and roll transactions, (b) investments in
instruments such as futures contracts, swaps, and options, and (c)
short-term credits extended in connection with trade clearances and
settlement, shall not constitute borrowing.
(4) A series may not issue "senior securities" in contravention of the 1940
Act. Activities permitted by SEC exemptive orders or staff interpretations
shall not be deemed prohibited by this restriction.
(5) A series may not underwrite the securities issued by other persons, except
to the extent that, in connection with the disposition of portfolio
securities, a series may be deemed to be an underwriter under applicable
law.
(6) A series may not purchase or sell real estate, except that a series may (i)
acquire or lease office space for its own use, (ii) invest in securities of
issuers that invest in real estate or interests therein, (iii) invest in
mortgage-related securities and other securities that are secured by real
estate or interests therein, (iv) hold and sell real estate acquired by the
series as a result of the ownership of securities.
18
(7) A series may not purchase or sell commodities or commodity contracts,
except a series may purchase and sell derivatives (including, but not
limited to, options, futures contracts and options on futures contracts)
whose value is tied to the value of a financial index or a financial
instrument or other asset (including, but not limited to, securities
indices, interest rates, securities, currencies and physical commodities).
(8) A series may not make loans, except that a series may (i) lend portfolio
securities, (ii) enter into repurchase agreements, (iii) purchase all or a
portion of an issue of debt securities, bank loan participation interests,
bank certificates of deposit, bankers' acceptances, debentures or other
securities, whether or not the purchase is made upon the original issuance
of the securities, and (iv) participate in an interfund lending program
with other registered investment companies.
If any percentage restriction described above for the Series is adhered to at
the time of investment, a subsequent increase or decrease in the percentage
resulting from a change in the value of the Series' assets will not constitute a
violation of the restriction.
COMPARATIVE INFORMATION ON DISTRIBUTION ARRANGEMENTS
MULTIPLE CLASS STRUCTURE
Each series currently offers three classes of shares: Class A, Class B and
Class C shares.
In the proposed reorganization, you will receive the corresponding class of
shares of the Surviving Series in exchange for your shares in the Merged Series.
The reorganization will be effected at net asset value. No sales charge will be
imposed on your shares. For purposes of calculating the contingent deferred
sales charge that you may pay when you dispose of any Class B or Class C shares
acquired as a result of the reorganization, the length of time you hold shares
in the Surviving Series will be added to the length of time you held shares in
the Merged Series. If you acquire Class B or Class C shares as a result of the
reorganization, you will continue to be subject to a contingent deferred sales
charge upon subsequent redemption to the same extent as if you had continued to
hold your shares of the Merged Series.
The shares of the various classes are offered under the following
arrangements:
CLASS A SHARES (CURRENTLY OFFERED BY BOTH SERIES)
o Are offered to the public at net asset value plus a maximum sales
charge of 5.75% of the offering price (6.10% of the amount invested).
The sales charge may be reduced or waived under certain conditions.
o Are not subject to any charges when redeemed (except that, with respect
to the Merged Series, a contingent deferred sales charge of 1% is
imposed on redemptions within the first 12 months on purchases of $1
million or more if originally purchased without an initial sales
charge).
o Have lower distribution and service fees (0.25% with respect to the
Surviving Series and 0.30% with respect to the Merged Series) and pay
higher dividends than Class B and Class C shares.
CLASS B SHARES (CURRENTLY OFFERED BY BOTH SERIES)
o Are offered to the public at net asset value with no sales charge at
the time of purchase.
o Are subject to a sales charge of up to 5.00% of the shares' value if
they are redeemed within the first year after purchase. This charge
declines to 0% over a period of five years (six years with respect to
the Merged Series) and may be waived under certain conditions.
o Will automatically convert to Class A shares eight years after purchase
(seven years for Class B shares of the Merged Series).
o Have higher distribution and service fees (1.00%) and pay lower
dividends than Class A shares.
19
CLASS C SHARES (CURRENTLY OFFERED BY BOTH SERIES)
o Are offered to the public at net asset value with no sales charge at
the time of purchase.
o Are subject to a sales charge of 1.00% (1.25% with respect to the
Merged Series) if they are redeemed within the first year after they
are purchased.
o Have the same distribution and service fees (1.00%) as Class B shares
and pay comparable dividends.
o Class C shares do not convert to any other class of shares.
DISTRIBUTION PLANS
Phoenix Equity Planning Corporation serves as the distributor ("Distributor")
of shares for both the Surviving Series and the Merged Series. The Acquiring
Trust has adopted a distribution plan for each class of shares of the Acquiring
Trust under Rule 12b-1 under the 1940 Act relating to the sale and promotion of
the Surviving Series' shares.
Under the Acquiring Trust's distribution plan, the Surviving Series
compensates the Distributor 0.75% of the average daily value of the net assets
of Class B and Class C shares. In addition, the Distributor is paid 0.25%
annually of the average daily net assets of each class of shares (including
Class A) for providing services to the shareholders, including assistance in
connection with inquiries related to shareholder accounts.
The Trust has also adopted distribution plans pursuant to Rule 12b-1 on
behalf of the Class A, class B and Class C shares of the Merged Series
(collectively, the "Trust Plans"). Under the Trust Plans, each class of shares
of the Merged Series pays a distribution fee based on average daily net assets
at the following rate: for Class A Shares at a rate of 0.05% per annum; for
Class B Shares at a rate of 0.75% per annum; and for Class C Shares at a rate of
0.75% per annum. In addition, the Merged Series pays the Distributor 0.25%
annually of the average daily net assets of each class of shares (including
Class A) of the Merged Series as compensation for providing services to the
shareholders, including assistance in connection with inquiries related to
shareholder accounts.
COMPARATIVE INFORMATION ON SHAREHOLDER SERVICES
Both the Merged Series and the Surviving Series offer the same shareholder
services including a Systematic Withdrawal Program, telephone exchanges,
telephone redemptions, access to an Investo-Matic Program and an automatic
investment program. The Surviving Series distributes net investment income
semi-annually and distributes net realized capital gains, if any, at least
annually. The Merged Series distributes net investment income semi-annually and
distributes net realized capital gains, if any, at least annually. All dividends
and distributions with respect to the shares of the Merged Series and the
Surviving Series are paid in additional shares of the respective series unless
shareholders elect to receive cash. The number of shares received in connection
with any reinvestment of dividends will be based upon the net asset value per
share of the Merged Series and the Surviving Series in effect on the record
date.
The Surviving Series and the Merged Series currently offer shareholders
identical exchange privileges. Shareholders of the Merged Series and the
Surviving Series may exchange their shares for shares of a corresponding class
of shares of other affiliated Phoenix funds.
Shares of the Surviving Series and the Merged Series may be redeemed at a
redemption price equal to the net asset value of the shares as next determined
following the receipt of a redemption order and any other required documentation
in proper form. In the case of redemptions of Class B or Class C shares of both
series, investors will be subject to the applicable contingent deferred sales
charges, if any, for such shares. Payment of redemption proceeds for redeemed
Surviving Series and Merged Series shares are generally made within seven days
after receipt of a redemption request in proper form and documentation, provided
that each check used for purchases of shares has been cleared for payment.
20
Because both the Surviving Series and the Merged Series offer the same
shareholder services, after the closing the same services will continue to be
available to the shareholders of the Merged Series but in their capacity as
shareholders of the Surviving Series.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
The following is a summary of certain provisions of the Declarations of Trust
of the each of the Merged Series and the Surviving Series.
FORM OF ORGANIZATION
The Acquiring Trust and the Trust are Delaware Statutory Trusts. The
operations of these trusts are governed by their respective Declarations of
Trust and by Delaware law. Each trust is registered with the SEC as an open-end
management investment company and is subject to the provisions of the 1940 Act
and the rules and regulations of the SEC thereunder. The Trustees of each trust
may generally authorize mergers, consolidations, share exchanges and
reorganizations of a new series or of each respective series with another series
or other business organization subject to shareholder approval.
SHARES
The Declaration of Trust of each trust authorizes the Trustees to create an
unlimited number of series. The Trust currently has three series. The Acquiring
Trust has one series: the Surviving Series. Each trust may also organize other
series in the future. When issued, the shares are fully paid and non-assessable,
have no preference, preemptive or similar rights unless designated by the
Trustees, and are freely transferable. The assets and proceeds received by each
trust from the issue or sale of shares of a series or class are allocated to
that series and constitute the rights of that series, subject only to the rights
of creditors. Any underlying assets of a series or class are required to be
segregated on the books of account of each trust. These assets are to be used to
pay the expenses of the series or class as well as a share of the general
expenses of each trust.
MEETINGS
The Trustees or President of each trust may call shareholder meetings as
necessary. To the extent required by the 1940 Act, meetings held for the purpose
of voting on the removal of any trustee shall be called by trustees upon written
request by shareholders holding at least ten percent of the outstanding shares
entitled to vote. Generally, one-third of the shares entitled to vote
constitutes a quorum at a shareholder meeting.
SHAREHOLDER LIABILITY
Unlike the stockholders of a corporation, under certain circumstances
shareholders of a statutory trust may be held personally liable for the debts,
claims or other obligations of a statutory trust. However, each Declaration of
Trust limits shareholder liability. Each Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust. Each Declaration of Trust provides for indemnification
for any shareholder and any former shareholder who is exposed to liability by
reason of a claim or demand relating to such person being a shareholder. Thus,
the risk of a shareholder incurring financial loss on account of shareholder
liability, which is considered remote, is limited to circumstances in which the
Trust itself would be unable to meet its obligations.
LIABILITY OF TRUSTEES
Each Declaration of Trust provides that trustees will generally be personally
liable only for willful misfeasance, bad faith, gross negligence or reckless
disregard of duties. Each trust may purchase insurance for trustees to cover
potential liabilities and will generally indemnify a trustee against such
claims. Each trust may also advance payments to a trustee in connection with
indemnification.
21
LIQUIDATION OR DISSOLUTION
In the event of the liquidation or dissolution of either series, the trustees
shall distribute the assets of the series to the shareholders, according to
their respective rights, after accounting for the liabilities of the respective
trust.
FISCAL YEAR
The Merged Series operates on a fiscal year which ends December 31. The
Surviving Series operates on a fiscal year which ends August 31.
MANAGEMENT AND OTHER SERVICE PROVIDERS
Responsibility for the overall supervision of each series rests with the
Trustees of each trust. PIC serves as investment advisor to the Surviving
Series. PZA serves as investment advisor to the Merged Series.
As the investment advisor for the Surviving Series, PIC is responsible for
managing the investment program and the general operations of the Surviving
Series, as well as for the day-to-day management of the Surviving Series'
portfolio. PZA, the investment advisor for the Merged Series, is responsible for
managing the Merged Series' investment program and general operations, as well
as the day-to-day management of the Merged Series' portfolio.
Steven L. Colton serves as portfolio manager of the Merged Series and the
Surviving Series, and Dong Zhang serves as a member of the team that manages the
Merged Series and the Surviving Series. Mr. Colton is Senior Vice President of
PZA and joined PIC, as Managing Director, Value Equities in 1997. Mr. Zhang
joined PIC in 1997.
Phoenix Equity Planning Corporation serves as financial agent of both series
and, as such, performs administrative, bookkeeping and pricing functions.
Phoenix Equity Planning Corporation also serves as the Transfer Agent for each
trust.
The Bank of New York serves as the custodian of the Trust's assets. State
Street Bank and Trust Company serves as the custodian of the Acquiring Trust's
assets and as a subtransfer agent for each trust.
PricewaterhouseCoopers LLP serves as independent auditors for both series.
VOTING INFORMATION
QUORUM AND VOTING REQUIREMENTS
This Prospectus/Proxy Statement is being furnished to the shareholders of the
Merged Series in connection with the solicitation by the Board of Trustees of
the Trust of proxies to be used at the meeting. Shareholders of record of the
Merged Series at the close of business on January 13, 2004 ("Record Date") will
be entitled to vote at the meeting or at any adjournments thereof. As of the
Record Date, 7,340,685.94 Class A, 670,631.83 Class B and 3,924,986.76 Class C
shares of the Merged Series were issued and outstanding.
You can provide voting instructions in any one of four ways:
o THROUGH THE INTERNET - www.eproxyvote.com/pzsax
o BY TELEPHONE - 877-779-8683
o BY MAIL - using the enclosed Proxy Card(s) and postage paid
envelope
o IN PERSON - at the Special Meeting
22
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 (in writing, or by telephone or by the
Internet) or by attending the meeting and voting in person.
We encourage you to vote by Internet or telephone; have your proxy card in
hand, and call the number or go to the website and follow the instructions
there. These voting methods will reduce the time and costs associated with this
proxy solicitation.
THE ACQUIRING TRUST WILL FURNISH, WITHOUT CHARGE, TO ANY SHAREHOLDER, UPON
REQUEST, A COPY OF THE 2003 ANNUAL REPORT AND THE 2003 SEMI-ANNUAL REPORT. SUCH
REQUESTS MAY BE DIRECTED TO PHOENIX EQUITY PLANNING CORPORATION, 56 PROSPECT
STREET, P. O. BOX 150480, HARTFORD, CONNECTICUT, 06115-0480. SHAREHOLDERS MAY
ALSO CALL PHOENIX EQUITY PLANNING CORPORATION TOLL-FREE AT (800) 243-4361.
The Board of Trustees of the Trust knows of no business, other than that
mentioned in the Notice of Special Meeting, that will be presented for
consideration at the Special Meeting. If any other matter is properly presented,
it is the intention of the persons named on the enclosed proxy cards to vote in
accordance with their best judgment.
Shareholders are entitled to one vote for each dollar of net asset value
(determined as of the Record Date) of each share owned by such shareholder
(number of shares owned times net asset value per share) and each fractional
dollar amount shall be entitled to a proportionate fractional vote. Shareholders
of the Merged Series will vote together as a single class on the reorganization
proposal. One third (33-1/3%) of the shares entitled to vote shall constitute a
quorum for the meeting. The affirmative vote of a majority of the outstanding
voting securities of the Trust (i.e., the lesser of (i) 67% or more of the
eligible votes of the Merged Series represented at the meeting if more than 50%
of the eligible votes of the Merged Series are present in person or by proxy or
(ii) more than 50% of the eligible votes of the Merged Series) must approve the
herein contemplated merger. For purposes of determining the presence of a quorum
for transacting business at the meeting and for determining whether sufficient
votes have been received for approval of the proposal to be acted upon at the
meeting, abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are present at the meeting, but which have not
been voted. For this reason, abstentions and broker non-votes will assist the
Merged Series in obtaining a quorum, but both have the practical effect of a
"no" vote for purposes of obtaining the requisite vote for approval of the
proposal.
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 Special 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 Special Meeting may be adjourned from time to time by the vote of a
majority of the shares represented at the Special Meeting, whether or not a
quorum is present. If the Special Meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting at which the adjournment is
taken, unless a new record date of the adjourned meeting is fixed or unless the
adjournment is for more than sixty (60) days from the date set for the original
meeting, in which case the Trustees shall set a new record date. Notice of any
such adjourned meeting shall be given to each shareholder of record entitled to
vote at the adjourned meeting in accordance with the provisions of the By-Laws
of the Trust. At any adjourned meeting, the Trust may transact any business
which might have been transacted at the original meeting.
The individuals named as proxies on the enclosed proxy card will vote in
accordance with the shareholder's direction, as indicated thereon, if the proxy
card is received and is properly executed. If the shareholder properly executes
a proxy and gives no voting instructions with respect to the reorganization
proposal, the shares will be
23
voted in favor of the reorganization proposal. The proxies, in their discretion,
may vote upon such other matters as may properly come before the meeting. The
Board of Trustees of the Trust is not aware of any other matters to come before
the meeting.
Approval of the reorganization proposal by the shareholders of the Merged
Series is a condition of the consummation of the reorganization. If the
reorganization is not approved, the Merged Series will continue as a series of
the Trust and the Board of Trustees of the Trust may consider other alternatives
in the best interests of the shareholders of the Merged Series.
REVOCATION OF PROXIES
Any shareholder who has given a proxy has the right to revoke the proxy at
any time prior to its exercise:
o by written notice of the proxy's revocation to the Secretary of the Trust
at the above address prior to the meeting;
o by the subsequent execution and return of another proxy card prior to the
meeting;
o by use of any electronic, telephonic or other alternative means
authorized by the Trustees for authorizing the proxy to act; or
o by being present and voting in person at the meeting and giving oral
notice of revocation to the Chairman of the meeting.
NO APPRAISAL RIGHTS
The staff of the SEC has taken the position that any rights to appraisal
arising under state law are preempted by the provisions of the 1940 Act and Rule
22c-1 thereunder, which generally requires that shares of a registered open-end
investment company be valued at their next determined net asset value.
SOLICITATION OF PROXIES
In addition to solicitation of proxies by mail, officers and employees of
Phoenix Investment Partners, Ltd., or its affiliates, may solicit proxies
personally or by telephone or telegram. Phoenix Investment Partners, Ltd., or
other representatives of the Trust, may also use one or more proxy solicitation
firms to assist with the mailing and tabulation effort and any special personal
solicitation of proxies. Banks, brokers, fiduciaries and nominees will, upon
request, be reimbursed by Phoenix Investment Partners, Ltd. for their reasonable
expenses in sending proxy material to beneficial owners of shares of the Merged
Series. D.F. King & Co., Inc., a proxy solicitation firm, has been engaged to
act as solicitor and will receive fees estimated at $17,250, plus out-of-pocket
expenses. The agreement with D.F. King provides that D.F. King will perform
various proxy solicitation services in connection with the Special Meeting, such
as contacting shareholders and providing information with respect to matters to
be considered at the Special Meeting. The cost of the solicitation of proxies
will be borne by Phoenix Investment Partners, Ltd.
If a shareholder wishes to participate in the meeting, but does not wish to
authorize the execution of a proxy by telephone or internet, the shareholder may
still submit the proxy card included with this proxy statement or attend the
meeting in person.
OWNERSHIP OF VOTING SECURITIES
Based on holdings and total shares outstanding as of January 13, 2004, the
Trustees and officers of the Trust owned as a group less than 1% of the
outstanding voting securities of the Merged Series. If the reorganization were
consummated as of January 13, 2004, the Trustees and officers of the Trust would
own less than 1% of the outstanding voting securities of the combined Surviving
Series based on their holdings and total shares outstanding as of January 13,
2004.
24
No one person owns beneficially or of record 5% or more of the outstanding
shares of the Merged Series, Surviving Series, or the combined Surviving Series
assuming consummation of the reorganization, based on holdings and total shares
outstanding as of January 13, 2004.
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES OF THE
TRUST, RECOMMENDS YOU APPROVE THE PLAN OF REORGANIZATION.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE FILL IN, DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE
IS NECESSARY IF IT IS MAILED IN THE UNITED STATES. IN THE ALTERNATIVE, WE
ENCOURAGE YOU TO VOTE USING THE TELEPHONE OR INTERNET.
MISCELLANEOUS
AVAILABLE INFORMATION
The Acquiring Trust and the Trust are each registered under the 1940 Act and
are subject to the informational requirements of the Securities Exchange Act of
1934, as amended, and the 1940 Act, and, in accordance therewith, file reports,
proxy materials, and other information with the SEC. Such reports, proxy
materials, and other information can be inspected at the Securities and Exchange
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
as well as at the following regional offices: New York Regional Office, 75 Park
Place, Room 1228, New York, NY 10007; and Chicago Regional Office, Northwestern
Atrium Center, 500 Madison Street, Suite 1400, Chicago, IL 60661. Copies of
such material also can be obtained from the Public Reference Branch, Office of
Consumer Affairs and Information Services, Securities and Exchange Commission,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The SEC
maintains a Web Site (http://www.sec.gov) that contains this Prospectus,
Statement of Additional Information, material incorporated by reference, and
other information regarding registrants that file electronically with the SEC.
PERFORMANCE FOR THE PERIODS ENDING AUGUST 31, 2003 AND JUNE 30, 2003
The following tables compare investment performance for each series for the
periods indicated and compares the same against relevant benchmarks. The series'
past performance is not necessarily an indication of how the series will perform
in the future.
AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIODS ENDING AUGUST 31, 2003)
1 5 LIFE INCEPTION
YEAR YEARS OF THE SERIES DATE
---------- --------- --------------- ------------
SURVIVING SERIES - Phoenix-Oakhurst Growth & Income Fund
o Class A 9.21% 2.96% 3.40% 09/25/97
o Class B 8.38% 2.20% 2.62% 09/25/97
o Class C 8.48% 2.20% 2.63% 09/25/97
o S&P 500 Index(1) 12.09% 2.50% 2.59% 09/25/97
- ----------
(1) The S&P 500 Index is an unmanaged, commonly used measure of
stock total return performance which includes net dividends reinvested. The
index is not available for direct investment.
25
AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIODS ENDING JUNE 30, 2003)
1 5 10 LIFE INCEPTION
YEAR YEARS YEARS OF THE SERIES DATE
----------- ---------- --------- --------------- ------------
MERGING SERIES - Phoenix-Oakhurst Strategy Fund
o Class A (3.12)% (8.04)% 2.27% ----- 12/29/89
o Class B (3.65)% (8.66)% ----- (1.94)% 04/08/96
o Class C (3.66)% (8.67)% 1.56% ----- 02/12/92
o S&P 500 Index(1) 0.26% (1.59)% 10.08% ----- -----
o S&P 500 Index(1) 0.26% (1.59)% ----- 7.58% 04/08/96
- ----------
(1) The S&P 500 Index is an unmanaged, commonly used measure of
stock total return performance which includes net dividends reinvested. The
index is not available for direct investments.
GROWTH OF $10,000 (FOR THE PERIODS ENDING AUGUST 31, 2003 AND JUNE 30, 2003, RESPECTIVELY)
PHOENIX-OAKHURST GROWTH & INCOME FUND - SURVIVING SERIES
YEAR CLASS A CLASS B CLASS C S&P 500 INDEX
- --------------- -------------- -------------- -------------- -------------------------------
09/25/97 $ 9,425.00 $10,000.00 $10,000.00 $10,000.00
08/31/98 $ 9,933.37 $10,458.70 $10,466.63 $10,283.19
08/31/99 $13,977.92 $14,612.40 $14,609.36 $14,384.09
08/31/00 $16,330.47 $16,948.84 $16,955.56 $16,741.49
08/31/01 $12,889.92 $13,270.10 $13,277.59 $12,657.91
08/31/02 $10,525.16 $10,759.54 $10,757.30 $10,379.66
08/31/03 $11,494.32 $11,661.29 $11,669.11 $11,634.49
PHOENIX-OAKHURST STRATEGY FUND - MERGING SERIES
YEAR CLASS A S&P 500 INDEX
- ---------- -------------- --------------------------------
06/30/93 $9,425.00 $10,000.00
06/30/94 $9,862.07 $10,133.91
06/30/95 $11,533.43 $12,779.89
06/28/96 $12,930.41 $16,117.74
06/30/97 $14,862.54 $21,719.02
06/30/98 $17,931.03 $28,299.99
06/30/99 $16,756.06 $34,726.18
06/30/00 $16,538.86 $37,301.36
06/29/01 $14,833.63 $31,766.47
06/28/02 $12,174.03 $26,053.85
06/30/03 $11,794.08 $26,122.48
This growth of $10,000 chart assumes an initial investment of $10,000 made on
the inception dates in the tables above. Performance assumes dividends and
capital gains are reinvested. The performance of other share classes will be
greater or less than that shown based on differences in inception dates, fees
and sales charges.
26
MANAGEMENT'S DISCUSSION OF THE SURVIVING SERIES FOR THE YEAR ENDED AUGUST 31,
2003
The Phoenix-Oakhurst Growth & Income Fund seeks dividend growth, current
income and capital appreciation.
For the fiscal year ended August 31, 2003, Class A shares rose 9.21%, Class B
shares rose 8.38%, and Class C shares were up 8.48%. For the same period, the
broad-based S&P 500 Index(1) rose 12.09%. All performance figures assume
reinvestment of distributions and exclude the effect of sales charges. Past
performance is not a guarantee of future performance.
The equity market was extremely volatile. It hit sharply depressed levels in
October and again in March, before rebounding sharply from April through August.
The rebound was driven by improved economic data. Strong advances were reported
for retail sales, factory orders, productivity, personal spending and consumer
confidence. There was also a much-needed pickup in business spending on
equipment and software. As a result, there was a significant gain in corporate
profits. The Fed lowered interest rates in order to reduce the risk of the
economy losing strength. The Federal Open Market Committee lowered the Fed Funds
rates twice to a 45-year low of 1%. This spurred a mortgage refinancing boom and
record home sales.
Also helping the economy and stock market was the passage of President Bush's
tax bill, which reduced the tax rate on corporate dividends and capital gains.
Energy prices were persistently high during the year due to the war with
Iraq, a record cold winter on the East Coast and an oil strike in Venezuela.
In terms of equity market performance, small cap stocks outperformed large
cap issues and the best sector performance was in Technology and Consumer
Cyclical.
The Growth & Income Fund had a positive performance for the year, but lagged
the benchmark S&P 500(R) Index for a variety of reasons. As the economic cycle
turned, stocks in the technology, consumer cyclical and industrial sectors were
in demand. Companies in these sectors move in advance of realized profits. Our
investment approach focuses on actual profitability. This had the portfolio
over-exposed to stocks in the Consumer Non-Cyclical sector. These companies
reported great earnings, but were not rewarded by rising share prices because
they are not as sensitive to changes in the economic cycle. For example, our
Procter & Gamble position rose only 0.19% even though it beat earnings
expectations in each quarter and reported strong sales growth. The portfolio was
also hurt by positions in Sara Lee and ConAgra, which was subject to an SEC
investigation involving falsely reported supplier rebates to U.S. Foodservice.
Our position in Eastman Kodak negatively impacted the Growth & Income Fund as a
switch to digital cameras, slow tourism and the SARS scare in Asia hurt film
sales.
The portfolio did have several success stories. Our position in PMC-Sierra
stock rose 137.9% on strong sales of communications semiconductors. St. Jude
Medical shares were up 30.2% within the portfolio. The company experienced
strong demand for its cardiac defibrillators and pacemakers. Our position in
Mylan Labs rose 68.2%. The generic drug maker received several FDA approvals to
manufacture generic versions of brand-name drugs, including Mirtazapine to treat
depressive disorder. As a result, several brokerage firms issued positive
research reports and buy recommendations over the fiscal year.
Economic growth is forecast to increase 4.2% in 2004 from 2.4% in 2003.
Growth should be driven by low interest rates, tax relief, corporate
profitability, inventory building, capital spending, and rising employment. This
should motivate the Federal Open Market Committee to begin raising short-term
interest rates from their current 45-year low levels. These factors should bode
well for corporate earnings and the stock market.
- ------------------
(1) The S&P 500 Index measures total-return stock market performance. The
index is unmanaged and not available for direct investment.
27
Risks to our forecast would include a spike upward in inflation, an increase
in terrorist events, and a collapse in the dollar due to high budget and trade
deficits. The current valuation of the stock market is also high and we need to
see corporate earnings forecasts go higher before we can experience a meaningful
improvement in stock prices.
SECTOR WEIGHTINGS AT AUGUST 31, 2003 (AS A PERCENT OF EQUITY HOLDINGS)
PHOENIX-OAKHURST
SECTOR PHOENIX-OAKHURST STRATEGY FUND GROWTH & INCOME FUND
- ------ ------------------------------ --------------------
Financials $ 22,560,465.00 23.21% $ 58,894,735.00 23.21%
Information Technology $ 18,598,061.00 19.14% $ 48,549,748.00 19.13%
Health Care $ 12,852,666.00 13.22% $ 33,557,639.00 13.22%
Consumer Discretionary $ 9,677,384.00 9.95% $ 25,277,155.00 9.96%
Consumer Staples $ 7,907,378.00 8.14% $ 20,644,560.00 8.14%
Industrials $ 7,621,036.00 7.84% $ 19,910,121.00 7.85%
Energy $ 6,899,929.00 7.10% $ 18,017,686.00 7.10%
Telecommunication Services $ 6,410,715.00 6.60% $ 16,745,305.00 6.60%
Utilities $ 3,850,793.00 3.96% $ 10,046,855.00 3.96%
Materials $ 813,093.00 0.84% $ 2,121,158.00 0.84%
Sum of Equity Holdings $ 97,191,520.00 100.00% $253,764,962.00 100.00%
ASSET MIX AT AUGUST 31, 2003 (AS A PERCENTAGE OF TOTAL ASSETS)
MERGING SERIES - SURVIVING SERIES - PHOENIX-OAKHURST
ASSET MIX PHOENIX-OAKHURST STRATEGY FUND GROWTH & INCOME FUND
--------- ------------------------------ --------------------
Common Stock 98.95% 98.90%
Foreign Common Stock 0.35% 0.35%
Short Terms 0.86% 0.79%
Cash and Equivalents (0.16)% (0.04)%
TOTAL NET ASSETS 100.00% 100.00%
TEN LARGEST HOLDINGS AT AUGUST 31, 2003 (AS A PERCENTAGE OF TOTAL NET ASSETS)
MERGING SERIES - PHOENIX-OAKHURST STRATEGY FUND SURVIVING SERIES - PHOENIX-OAKHURST GROWTH & INCOME FUND
1. Microsoft Corporation 3.6% 1. Microsoft Corporation 3.6%
2. Exxon Mobil Corporation 3.1% 2. Exxon Mobil Corporation 3.1%
3. Intel Corporation 3.1% 3. Intel Corporation 3.1%
4. Bank of America Corporation 2.6% 4. Bank of America Corporation 2.6%
5. Procter & Gamble Company 2.5% 5. Procter & Gamble Company 2.5%
6. Pfizer, Inc. 2.5% 6. Pfizer, Inc. 2.5%
7. Citigroup, Inc. 2.5% 7. Citigroup, Inc. 2.5%
8. Cisco Systems, Inc. 2.1% 8. Cisco Systems, Inc. 2.1%
9. U.S. Bancorp Del Com New 1.7% 9. U.S. Bancorp Del Com New 1.7%
10. Johnson & Johnson 1.6% 10. Johnson & Johnson 1.6%
28
LEGAL MATTERS
Certain legal matters in connection with the issuance of the shares of the
Surviving Series will be passed upon by Matthew A. Swendiman, Esq.
ADDITIONAL FINANCIAL INFORMATION
The tables set forth below present certain financial information for the
Surviving Series. The financial highlights for each year ended August 31 are
derived from the Surviving Series' audited financial statements for that year.
The data should be read in conjunction with the audited financial statements and
related notes, which are included in the Statement of Additional Information
related to this Prospectus/Proxy Statement.
29
SURVIVING SERIES
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A
-------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
-------------------------------------------------------------------------
2003 2002 2001 2000 1999
Net asset value, beginning of period $10.86 $13.30 $16.85 $14.61 $10.47
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) 0.09 0.04 0.02 0.02 0.06
Net realized and unrealized gain (loss) 0.91 (2.48) (3.57) 2.42 4.19
----------- ----------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 1.00 (2.44) (3.55) 2.44 4.25
----------- ----------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends from net investment income ---- ---- ---- (0.02) (0.02)
Dividends from net realized gains ---- ---- ---- (0.18) (0.09)
----------- ----------- ---------- ---------- ----------
TOTAL DISTRIBUTIONS ---- ---- ---- (0.20) (0.11)
----------- ----------- ---------- ---------- ----------
Change in net asset value 1.00 (2.44) (3.55) 2.24 4.14
----------- ----------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $11.86 $10.86 $13.30 $16.85 $14.61
=========== =========== ========== ========== ==========
Total return(2) 9.21% (18.35)% (21.07)% 16.83% 40.72%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $131,169 $166,772 $245,471 $294,416 $209,210
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) 1.25%(4) 1.25%(4) 1.25% 1.25% 1.22%(4)
Net investment income 0.82% 0.33% 0.16% 0.13% 0.43%
Portfolio turnover 59% 40% 34% 55% 71%
- ----------
(1) Computed using average shares outstanding.
(2) Maximum sales charges are not reflected in the total return calculation.
(3) If the investment advisor had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.45%,
1.35%, 1.32%, 1.30% and 1.33% for the periods ended August 31, 2003, 2002,
2001, 2000 and 1999, respectively.
(4) The ratio of operating expenses to average net assets excludes the effect of
expense offsets for custodian fees; if expense offsets were included, the
ratio would not significantly differ.
30
SURVIVING SERIES
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS B
-------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
-------------------------------------------------------------------------
2003 2002 2001 2000 1999
Net asset value, beginning of period $10.50 $12.95 $16.54 $14.43 $10.40
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) 0.01 (0.05) (0.09) (0.10) (0.04)
Net realized and unrealized gain (loss) 0.87 (2.40) (3.50) 2.93 4.16
----------- ----------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.88 (2.45) (3.59) 2.29 4.12
----------- ----------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends from net investment income ---- ---- ---- ---- ----
Dividends from net realized gains ---- ---- ---- (0.18) (0.09)
----------- ----------- ---------- ---------- ----------
TOTAL DISTRIBUTIONS ---- ---- ---- (0.18) (0.09)
----------- ----------- ---------- ---------- ----------
Change in net asset value 0.88 (2.45) (3.59) 2.11 4.03
----------- ----------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $11.38 $10.50 $12.95 $16.54 $14.43
=========== =========== ========== ========== ==========
Total return(2) 8.38% (18.92)% (21.70)% 15.99% 39.72%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $72,051 $81,000 $116,539 $147,846 $109,461
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) 2.00%(4) 2.00%(4) 2.00% 2.00% 1.96%(4)
Net investment income (loss) 0.08% (0.42)% (0.60)% (0.62)% (0.32)%
Portfolio turnover 59% 40% 34% 55% 71%
- ----------
(1) Computed using average shares outstanding.
(2) Maximum sales charges are not reflected in the total return calculation.
(3) If the investment advisor had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.20%,
2.10%, 2.06%, 2.05%, and 2.08% for the periods ended August 31, 2003, 2002,
2001, 2000 and 1999, respectively.
(4) The ratio of operating expenses to average net assets excludes the effect of
expense offsets for custodian fees; if expense offsets were included, the
ratio would not significantly differ.
31
SURVIVING SERIES
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS C
----------------------------------------------------------------------
YEAR ENDED AUGUST 31
----------------------------------------------------------------------
2003 2002 2001 2000 1999
Net asset value, beginning of period $10.50 $12.96 $16.55 $14.43 $10.41
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) 0.01 (0.05) (0.09) (0.10) (0.04)
Net realized and unrealized gain (loss) 0.87 (2.41) (3.50) 2.40 4.15
----------- ----------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.88 (2.46) (3.59) 2.30 4.11
----------- ----------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends from net investment income ---- ---- ---- ---- ----
Dividends from net realized gains ---- ---- ---- (0.18) (0.09)
----------- ----------- ---------- ---------- ----------
TOTAL DISTRIBUTIONS ---- ---- ---- (0.18) (0.09)
----------- ----------- ---------- ---------- ----------
Change in net asset value 0.88 (2.46) (3.59) 2.12 4.02
----------- ----------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $11.38 $10.50 $12.96 $16.55 $14.43
=========== =========== ========== ========== ==========
Total return(2) 8.48% (18.98)% (21.69)% 16.06% 39.58%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $52,466 $61,193 $86,080 $106,272 $59,224
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) 2.00%(4) 2.00%(4) 2.00% 2.00% 1.96%(4)
Net investment income (loss) 0.08% (0.42)% (0.60)% (0.62)% (0.33)%
Portfolio turnover 59% 40% 34% 55% 71%
- ----------
(1) Computed using average shares outstanding.
(2) Maximum sales charges are not reflected in the total return calculation.
(3) If the investment advisor had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.20%,
2.10%, 2.06%, 2.05% and 2.08% for the periods ended August 31, 2003, 2002,
2001, 2000 and 1999, respectively.
(4) The ratio of operating expenses to average net assets excludes the effect of
expense offsets for custodian fees; if expense offsets were included, the
ratio would not significantly differ.
32
FUTURE SHAREHOLDER MEETINGS
As a Delaware Statutory Trust, the Trust does not hold shareholder meetings
unless required by the 1940 Act. Other than this meeting, the Trust does not
anticipate holding any future meetings of shareholders in that should
shareholder approval of the reorganization described herein and of the
reorganizations of the Trust's other series be obtained, the Trust will be
dissolved.
OTHER BUSINESS
The Board of Trustees of the Trust knows of no business to be brought before
the meeting other than the matters set forth in this Prospectus/Proxy Statement.
Should any other matter requiring a vote of Merged Series' shareholders arise,
however, the proxies will vote thereon according to their best judgment in the
interests of the Merged Series and the shareholders of the Merged Series.
By Order of the Board of Trustees,
RICHARD J. WIRTH
SECRETARY
Hartford, Connecticut
January 30, 2004
33
Exhibit A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 19th day of March, 2004, by and between Phoenix Equity Series Fund
(the "Phoenix Equity Series"), a Delaware Statutory Trust with its principal
place of business at 101 Munson Street, Greenfield, Massachusetts 01301, on
behalf of the Phoenix-Oakhurst Growth & Income Fund (the "Surviving Series"), a
portfolio series thereof, and the Phoenix Trust (formerly known as the
Phoenix-Zweig Trust) (the "Phoenix Trust"), a Delaware Statutory Trust with a
principal place of business at 900 Third Avenue, 31st Floor, New York, New York
10022, on behalf of the Phoenix-Oakhurst Strategy Fund (the "Merging Series"), a
portfolio series thereof. For the purposes hereof, all references in this
Agreement to action taken by the Surviving Series or the Merging Series shall be
deemed to refer to action taken by the Phoenix Equity Series or the Phoenix
Trust, on behalf of the respective portfolio series and all references to the
"Trust(s)" shall collectively refer to the Phoenix Equity Series and the Phoenix
Trust.
RECITALS
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1) of the
United States Internal Revenue Code of 1986, as amended (the "Code") and the
regulations thereunder. The reorganization (the "Reorganization") will consist
of the transfer of all or substantially all of the assets of the Merging Series
to the Surviving Series in exchange solely for corresponding Class A, Class B
and Class C shares of beneficial interest in the Surviving Series (the
"Surviving Series Shares"), the assumption by the Surviving Series of all
liabilities of the Merging Series, and the distribution of the Surviving Series
Shares to the shareholders of the Merging Series in complete liquidation of the
Merging Series as provided herein, all upon the terms and conditions hereinafter
set forth in this Agreement.
The Merging Series and the Surviving Series are separate series of
Phoenix Trust and Phoenix Equity Series, respectively, which are open-end,
registered investment companies of the management type. The Merging Series owns
securities that generally are assets of the character in which the Surviving
Series is permitted to invest. The Trustees of the Phoenix Equity Series,
including a majority of the trustees thereof who are not interested persons, as
such term is defined pursuant to the Investment Company Act of 1940, as amended
(the "1940 Act") have determined that participation in the Reorganization is in
the best interests of the Surviving Series and its shareholders and that the
interests of the existing shareholders of the Surviving Series would not be
diluted as a result of effecting this transaction.
The Trustees of the Phoenix Trust, including a majority of the trustees
thereof who are not interested persons, as such term is defined pursuant to the
1940 Act, have also determined that participation in the Reorganization is in
the best interests of the Merging Series and its shareholders and that the
interests of the existing shareholders of the Merging Series would not be
diluted as a result of effecting this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE MERGING SERIES TO THE SURVIVING SERIES IN
EXCHANGE FOR THE SURVIVING SERIES SHARES, THE ASSUMPTION OF ALL MERGING SERIES
LIABILITIES AND THE LIQUIDATION OF THE MERGING SERIES.
A-1
1.1 Subject to the requisite approval of the Merging Series
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Merging Series
agrees to transfer all of the Merging Series' assets, as set forth in paragraph
1.2, to the Surviving Series, and the Surviving Series agrees in exchange
therefor: (i) to deliver to the Merging Series the number of full and fractional
Surviving Series Shares, determined by dividing the value of the Merging Series'
net assets, computed in the manner and as of the time and date set forth in
paragraph 2.1, by the net asset value of one Surviving Series Share, computed in
the manner and as of the time and date set forth in paragraph 2.2; and (ii) to
assume all liabilities of the Merging Series, as set forth in paragraph 1.3.
Such transactions shall take place on the next business day following the
closing provided for in paragraph 3.1 (the "Closing Date").
1.2 The assets of the Merging Series to be acquired by the Surviving
Series shall consist of all assets and property, including, without limitation,
all cash, securities, commodities and futures interests, and dividends or
interest receivable, that are owned by the Merging Series, and any deferred or
prepaid expenses shown as an asset on the books of the Merging Series on the
Closing Date (collectively, the "Assets").
1.3 The Merging Series will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Surviving Series
shall also assume all of the liabilities of the Merging Series, whether accrued
or contingent, known or unknown, existing at the Valuation Date, as defined in
paragraph 2.1 (collectively, the "Liabilities"). On or as soon as practicable
prior to the Closing Date, the Merging Series will declare and pay to its
shareholders of record one or more dividends and/or other distributions so that
it will have distributed substantially all (and in no event less than 98%) of
its investment company taxable income and realized net capital gain, if any, for
the current taxable year through the Closing Date.
1.4 Immediately after the transfer of Assets provided for in
paragraph 1.1, the Merging Series will distribute to the Merging Series'
shareholders of record, determined as of immediately after the close of business
on the Closing Date (the "Merging Series Shareholders"), on a pro rata basis,
the Surviving Series Shares received by the Merging Series pursuant to paragraph
1.1, and will completely liquidate. Such distribution and liquidation will be
accomplished, with respect to the Merging Series' shares, by the transfer of the
Surviving Series Shares then credited to the account of the Merging Series on
the books of the Surviving Series to open accounts on the share records of the
Surviving Series in the names of the Merging Series Shareholders. The aggregate
net asset value of Surviving Series Shares to be so credited to Merging Series
Shareholders shall be equal to the aggregate net asset value of the Merging
Series' shares owned by such shareholders on the Closing Date. All issued and
outstanding shares of the Merging Series will simultaneously be canceled on the
books of the Merging Series.
1.5 Ownership of Surviving Series Shares will be shown on the books
of the Surviving Series or its transfer agent, as defined in paragraph 3.3.
1.6 Any reporting responsibility of the Merging Series including,
but not limited to, the responsibility for filing of regulatory reports, tax
returns, or other documents with the U.S. Securities and Exchange Commission
(the "Commission"), any state securities commission, and any federal, state or
local tax authorities or any other relevant regulatory authority, is and shall
remain the responsibility of the Merging Series.
A-2
2. VALUATION
2.1 The value of the Assets shall be the value computed as of
immediately after the close of business of the New York Stock Exchange and after
the declaration of any dividends on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), using the valuation procedures
established by the Surviving Series' Board of Trustees, which shall be described
in the then-current prospectus and statement of additional information with
respect to the Surviving Series.
2.2 The net asset value of Surviving Series Shares shall be the net
asset value per share computed as of the Valuation Date, using the valuation
procedures established by the Surviving Series' Board of Trustees which shall be
described in the Surviving Series' then-current prospectus and statement of
additional information.
2.3 The number of Surviving Series Shares to be issued (including
fractional shares, if any) in exchange for the Assets shall be determined by
dividing the value of the net assets with respect to the shares of the Merging
Series determined using the same valuation procedures referred to in paragraph
2.1, by the net asset value of a Surviving Series Share, determined in
accordance with paragraph 2.2.
2.4 All computations of value shall be made by Phoenix Equity
Planning Corporation, in its capacity as financial agent for both the Phoenix
Equity Series and the Phoenix Trust.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be March 26, 2004, or such other date as
the parties may agree. All acts taking place at the closing of the transaction
(the "Closing") shall be deemed to take place simultaneously as of immediately
after the close of business on the Closing Date unless otherwise agreed to by
the parties. The close of business on the Closing Date shall be as of 4:00 p.m.,
Eastern Time. The Closing shall be held at the offices of the Phoenix Life
Insurance Company, One American Row, Hartford, CT 06102 or at such other time
and/or place as the parties may agree.
3.2 The Phoenix Trust shall direct The Bank of New York, as
custodian for the Merging Series (the "Custodian"), to deliver, on the next
business day after the Closing, a certificate of an authorized officer stating
that (i) the Assets have been delivered in proper form to the Surviving Series,
and (ii) all necessary taxes in connection with the delivery of the Assets,
including all applicable federal and state stock transfer stamps, if any, have
been paid or provision for payment has been made. The Merging Series' portfolio
securities represented by a certificate or other written instrument shall be
presented for examination by the Custodian to State Street Bank and Trust
Company, as the custodian for the Surviving Series, no later than on the next
business day following the Closing Date, and shall be transferred and delivered
by the Merging Series on the next business day following the Closing Date for
the account of the Surviving Series duly endorsed in proper form for transfer in
such condition as to constitute good delivery thereof. The Custodian shall
deliver on the next business day following the Closing Date by book entry, in
accordance with the customary practices of such depositories and the Custodian,
the Merging Series' portfolio securities and instruments deposited with a
securities depository, as defined in Rule 17f-4 under the 1940 Act. The cash to
be transferred by the Merging Series shall be delivered by wire transfer of
federal funds on the next business day following the Closing Date.
3.3 The Phoenix Trust shall direct Phoenix Equity Planning
Corporation (the "Transfer Agent"), on behalf of the Merging Series, to deliver
on the next business day following the Closing, a certificate by an authorized
officer stating that its records contain the names and addresses of the Merging
Series Shareholders, and the number and percentage ownership of outstanding
shares owned by each such
A-3
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 Trusts, accurate appraisal of the value of the net
assets of the Surviving Series or the Merging Series, respectively, is
impracticable, the Closing Date shall be postponed until the first Friday after
the day when trading shall have been fully resumed and reporting shall have been
restored.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Phoenix Trust, on behalf of the Merging Series, represents
and warrants to the Phoenix Equity Series as follows:
(a) The Merging Series is duly organized as a series of the
Phoenix Trust, which is a Statutory Trust duly organized, validly existing and
in good standing under the laws of the State of Delaware, with power under the
Phoenix Trust's Agreement and Declaration of Trust, as amended ("Declaration of
Trust"), to own all of its Assets and to carry on its business as it is now
being conducted;
(b) The Phoenix Trust is a registered investment company
classified as a management company of the open-end type, and its registration
with the Commission as an investment company under the 1940 Act, and the
registration of shares of the Merging Series under the Securities Act of 1933,
as amended ("1933 Act"), is in full force and effect;
(c) No consent, approval, authorization or order of any court
or governmental authority is required for the consummation by the Merging Series
of the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act")
and the 1940 Act and such as may be required by state securities laws;
(d) The current prospectus and statement of additional
information of the Merging Series conforms or conformed at the time of its use
in all material respects to the applicable requirements of the 1933 Act and the
1940 Act and the rules and regulations of the Commission thereunder, and does
not or did not at the time of its use include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not materially misleading;
(e) On the Closing Date, the Phoenix Trust, on behalf of the
Merging Series, will have good and marketable title to the Assets and full
right, power and authority to sell, assign, transfer and deliver such Assets
hereunder free of any liens or other encumbrances, and upon delivery and payment
for such Assets, the Phoenix Equity Series, 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;
A-4
(f) The Merging Series is not engaged currently, and the
execution, delivery and performance of this Agreement will not result, in (i) a
material violation of the Phoenix Trust's Declaration of Trust or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
the Phoenix Trust, on behalf of the Merging Series, is a party or by which it is
bound, or (ii) the acceleration of any obligation, or the imposition of any
penalty, under any agreement, indenture, instrument, contract, lease, judgment
or decree to which the Phoenix Trust, on behalf of the Merging Series, is a
party or by which it is bound;
(g) All material contracts or other commitments of the
Merging Series (other than this Agreement and certain investment contracts,
including options, futures and forward contracts) will terminate without
liability to the Merging Series on or prior to the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted
by the Phoenix Equity Series, on behalf of the Surviving Series, no litigation
or administrative proceeding or investigation of or before any court or
governmental body is presently pending or, to its knowledge, threatened against
the Phoenix Trust, on behalf of the Merging Series, or any of its properties or
assets that, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business. The Phoenix Trust, on behalf
of the Merging Series, knows of no facts or circumstances, which, individually
or in the aggregate, with the passage of time or the giving of notice (or both)
would form the basis for the institution of such proceedings, and is not a party
to or subject to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business or its
ability to consummate the transactions herein contemplated or that does or could
lead to a claim under existing directors and officers errors and omissions
coverage;
(i) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets, and Schedule of Investments of the Merging
Series at December 31, 2002, have been audited by PricewaterhouseCoopers, LLP
("PwC"), independent accountants, and are in accordance with generally accepted
accounting principles ("GAAP") consistently applied, and such statements present
fairly, in all material respects, the financial condition of the Merging Series
as of such date in accordance with GAAP, and there are no known contingent
liabilities of the Merging Series required to be reflected on a balance sheet
(including the notes thereto) in accordance with GAAP as of such date not
disclosed therein;
(j) Since December 31, 2002, there has not been any material
adverse change in the Merging Series' financial condition, assets, liabilities
or business, other than changes occurring in the ordinary course of business, or
any incurrence by the Merging Series of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Surviving Series. For the purposes of this subparagraph (j),
a decline in net asset value per share of the Merging Series due to declines in
market values of securities in the Merging Series' portfolio, the discharge the
Liabilities, or the redemption of Merging Series' shares by shareholders of the
Merging Series shall not constitute a material adverse change;
(k) On the Closing Date, all Federal and other tax returns,
dividend reporting forms and other tax-related reports of the Merging Series
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all material respects, and all
Federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Merging Series' knowledge, no such
return is currently under audit and no assessment has been asserted with respect
to such returns;
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(l) For each taxable year of its operation (including the
taxable year ending on the Closing Date), the Merging Series has met (or will
meet) the requirements of Subchapter M of the Code for qualification as a
regulated investment company, has been (or will be) eligible to compute and has
computed (or will compute) its federal income tax under Section 852 of the Code,
and will have distributed all of its investment company taxable income and net
capital gain (as defined in the Code) that has accrued through the Closing Date,
and before the Closing Date will have declared dividends sufficient to
distribute all of its investment company taxable income and net capital gain
for the period ending on the Closing Date;
(m) All issued and outstanding shares of the Merging Series
are, and on the Closing Date will be, duly and validly issued and outstanding,
will be fully paid and non-assessable and have been offered and sold in every
state and the District of Columbia in compliance in all material respects with
applicable registration requirements of the 1933 Act and state securities laws.
All of the issued and outstanding shares of the Merging Series will, at the time
of Closing, be held by the persons and in the amounts set forth in the records
of the Transfer Agent, on behalf of the Merging Series, as provided in paragraph
3.3. Except for (x) the right of Class B shares of the Merged Series to
automatically convert into Class A shares of the Merged Series seven years after
purchase, or (y) in connection with any automatic dividend reinvestment plan
available to the Merged Series' shareholders, The Merging Series does not have
outstanding any options, warrants or other rights to subscribe for or to
purchase any of the shares of the Merging Series, nor is there outstanding any
security convertible into any of the Merging Series shares;
(n) The execution, delivery and performance of this Agreement
will have been duly authorized prior to the Closing Date by all necessary
action, if any, on the part of the Trustees of the Phoenix Trust, on behalf of
the Merging Series, and, subject to the approval of the shareholders of the
Merging Series, this Agreement will constitute a valid and binding obligation of
the Merging Series, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(o) The information to be furnished by the Merging Series for
use in registration statements, proxy materials and other documents filed or to
be filed with any federal, state or local regulatory authority (including the
NASD), which may be necessary in connection with the transactions contemplated
hereby, shall be accurate and complete in all material respects and shall comply
in all material respects with Federal securities and other laws and regulations
thereunder applicable thereto;
(p) The proxy statement of the Merging Series (the "Proxy
Statement") to be included in the Registration Statement referred to in
paragraph 5.6, insofar as it relates to the Merging Series, will, on the
effective date of the Registration Statement and on the Closing Date (i) not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not materially
misleading provided, however, that the representations and warranties in this
subparagraph (p) shall not apply to statements in or omissions from the Proxy
Statement and the Registration Statement made in reliance upon and in conformity
with information that was furnished by the Surviving Series for use therein, and
(ii) comply in all material respects with the provisions of the 1933 Act, the
1934 Act and the 1940 Act and the rules and regulations thereunder; and
(q) Any person who acts as legal counsel for the
disinterested directors of the Phoenix Trust is an independent legal counsel as
such term is defined under applicable law.
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4.2 The Phoenix Equity Series, on behalf of the Surviving Series,
represents and warrants as follows:
(a) The Surviving Series is duly organized as a series of the
Phoenix Equity Series, which is a Statutory Trust duly organized, validly
existing and in good standing under the laws of the State of Delaware with power
under the Phoenix Equity Series' Declaration of Trust to own all of its assets
and to carry on its business as it is now being conducted;
(b) The Phoenix Equity Series is a registered investment
company classified as a management company of the open-end type, and its
registration with the Commission as an investment company under the 1940 Act and
the registration of shares of the Surviving Series under the 1933 Act, is in
full force and effect;
(c) No consent, approval, authorization or order of any court
or governmental authority is required for the consummation by the Surviving
Series of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the 1934 Act and the 1940 Act and such as may be
required by state securities laws;
(d) The current prospectus and statement of additional
information of the Surviving Series conforms or conformed at the time of its use
in all material respects to the applicable requirements of the 1933 Act and the
1940 Act and the rules and regulations of the Commission thereunder and does not
or did not at the time of its use include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not materially misleading;
(e) On the Closing Date, the Phoenix Equity Series, 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 Phoenix Equity Series' Declaration of Trust or By-Laws
or of any agreement, indenture, instrument, contract, lease or other undertaking
to which the Phoenix Equity Series, 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 Phoenix Equity Series, on
behalf of the Surviving Series, is a party or by which it is bound;
(g) Except as otherwise disclosed in writing to and accepted
by the Phoenix Trust, on behalf of the Merging Series, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or, to its knowledge, threatened against
the Phoenix Equity Series, 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 Phoenix Equity Series, on behalf
of the Surviving Series, knows of no facts or circumstances which, individually
or in the aggregate, with the passage of time or the giving of notice (or both)
might form the basis for the institution of such proceedings and is not a party
to or subject to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects the Surviving Series'
business or the Surviving Series' ability to consummate the transactions herein
contemplated or that does or could lead to a claim under existing directors and
officers errors and omissions coverage;
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(h) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets and Schedule of Investments of the
Surviving Series at August 31, 2003, have been audited by PwC, independent
accountants, and are in accordance with GAAP consistently applied, and such
statements (copies of which have been furnished to the Merging Series) present
fairly, in all material respects, the financial condition of the Surviving
Series as of such date in accordance with GAAP, and there are no known
contingent liabilities of the Surviving Series required to be reflected on a
balance sheet (including the notes thereto) in accordance with GAAP as of such
date not disclosed therein;
(i) Since August 31, 2003, there has not been any material
adverse change in the Surviving Series' financial condition, assets, liabilities
or business, other than changes occurring in the ordinary course of business, or
any incurrence by the Surviving Series of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Merging Series. For purposes of this subparagraph (i), a
decline in net asset value per share of the Surviving Series due to declines in
market values of securities in the Surviving Series' portfolio, the discharge of
Surviving Series' liabilities, or the redemption of Surviving Series Shares by
shareholders of the Surviving Series, shall not constitute a material adverse
change;
(j) On the Closing Date, all Federal and other tax returns,
dividend reporting forms, and other tax-related reports of the Surviving Series
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all material respects, and all
Federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Surviving Series' knowledge no such
return is currently under audit and no assessment has been asserted with respect
to such returns;
(k) For each taxable year of its operation (including the
taxable year including the Closing Date), the Surviving Series has met (or will
meet) the requirements of Subchapter M of the Code for qualification as a
regulated investment company has been eligible to compute and has computed (or
will compute) its federal income tax under Section 852 of the Code;
(l) All issued and outstanding shares of the Surviving Series
are, and on the Closing Date will be, duly and validly issued and outstanding,
will be fully paid and non-assessable and have been offered and sold in every
state and the District of Columbia in compliance in all material respects with
applicable registration requirements of the 1933 Act. Except for (x) the right
of Class B shares of the Merged Series to automatically convert into Class A
shares of the Surviving Series seven years after purchase, or (y) in connection
with any automatic dividend reinvestment plan available to the Surviving Series'
shareholders, the Surviving Series does not have outstanding any options,
warrants or other rights to subscribe for or purchase any shares of the
Surviving Series, nor is there outstanding any security convertible into any
shares of the Surviving Series;
(m) The execution, delivery and performance of this Agreement
will have been fully authorized prior to the Closing Date by all necessary
action, if any, on the part of the Trustees of the Phoenix Equity Series, on
behalf of the Surviving Series, and this Agreement will constitute a valid and
binding obligation of the Phoenix Equity Series, 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
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Date have been duly authorized and, when so issued and delivered, will be duly
and validly issued Surviving Series Shares, and will be fully paid and
non-assessable;
(o) The information to be furnished by the Phoenix Equity
Series for use in the registration statements, proxy materials and other
documents filed or to be filed with any federal, state or local regulatory
authority (including the NASD) that may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete in all material
respects and shall comply in all material respects with Federal securities and
other laws and regulations applicable thereto;
(p) That insofar as it relates to the Surviving Series, the
Registration Statement relating to the Surviving Series Shares issuable
hereunder, and the Proxy Statement to be included in the
Registration Statement, and any amendment or supplement to the foregoing, will,
from the effective date of the Registration Statement through the date of the
meeting of shareholders of the Merging Series contemplated therein (i) not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not misleading
provided, however, that the representations and warranties in this subparagraph
(p) shall not apply to statements in or omissions from the Registration
Statement made in reliance upon and in conformity with information that was
furnished by the Merging Series for use therein, and (ii) comply in all material
respects with the provisions of the 1933 Act, the 1934 Act and the 1940 Act and
the rules and regulations thereunder;
(q) The majority of the Trustees of the Phoenix Equity Series
are not interested persons of the Phoenix Equity Series, and those directors
select and nominate any of the disinterested directors of the Phoenix Equity
Series; and
(r) Any person who acts as legal counsel for the
disinterested directors of the Phoenix Equity Series is an independent legal
counsel as such term is defined under applicable law.
5. COVENANTS OF THE PHOENIX EQUITY SERIES AND THE PHOENIX TRUST, ON BEHALF
OF THE SURVIVING SERIES AND THE MERGING SERIES, RESPECTIVELY
5.1 The Surviving Series and the Merging Series each will operate
its business in the ordinary course between the date hereof and the Closing
Date, it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions, and any other
distribution that may be advisable.
5.2 The Phoenix Trust will call a meeting of the shareholders of the
Merging Series to consider and act upon this Agreement and to take all other
reasonable action necessary to obtain approval of the transactions contemplated
herein.
5.3 The Phoenix Equity 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 Trusts will
each take, or cause to be taken, all action, and do or cause to be done, all
things reasonably necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement.
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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 Phoenix Trust will provide the Phoenix Equity Series with
information reasonably necessary for the preparation of a registration statement
on Form N-14 to the Merged Series (the "Registration Statement"), such
Registration statement to consist of, without limitation, a prospectus and Proxy
Statement.
5.7 The Phoenix Trust, on behalf of the Merging Series, covenants
that it will, from time to time, as and when reasonably requested by the Phoenix
Equity Series, 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 Phoenix Equity Series,
on behalf of the Surviving
Series, may reasonably deem necessary or desirable in order to carry out the
intent and purpose of this Agreement to vest in and confirm (a) the Phoenix
Trust's, on behalf of the Merging Series', title to and possession of the
Surviving Series Shares to be delivered hereunder, and (b) the Phoenix Equity
Series' on behalf of the Surviving Series', title to and possession of all the
Assets.
5.8 The Surviving Series will use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act and the 1940 Act as
may be necessary in order to continue its operations after the Closing Date.
5.9 (a) Subject to governing law, until the fifth anniversary of
the Closing Date, the Phoenix Equity Series, on behalf of itself and any
successor thereto by reason of merger, reorganization, sale or other similar
transaction, shall: (a) continue that certain joint insured bond referred to as
Investment Management Insurance Policy No. 281-35-77 issued by American
International Specialty Lines Insurance Company (such policy, or any replacement
thereof during the operative period referenced above shall hereafter be referred
to as the "D&O/E&O Insurance"), or such greater insurance as the Phoenix Equity
Series and all other requisite parties to such joint insured bond shall
reasonably determine; and (b) maintain those indemnity provisions as provided in
the current Declaration of Trust of the Phoenix Equity Series and By-Laws
applicable with regard to the proper and lawful activities of a trustee (the
"Indemnity").
(b) In the event that the D&O/E&O Insurance shall be
terminated during the period transpiring from the Closing Date until the fifth
anniversary thereof, then the Phoenix Equity Series, individually or together
with one or more parties to the above referenced joint insured bond, will use
its best efforts to procure a directors' and officers errors and omissions
insurance policy for the benefit of the Trustees of the Phoenix Trust, among
others, for claims made against such Trustees during the period stated above, on
not less than substantially the same terms and conditions, including, without
limitation, exclusions from coverage, retention limits and limitations of
liability, as exist for the benefit of such Trustees under the D&O/E&O Insurance
Policy existing as of the Closing Date.
(c) The D&O/E&O Insurance and Indemnity shall apply equally
to the trustees of the Phoenix Trust (constituted as of the date of this
Agreement) as they apply to the trustees of the Phoenix Equity Series.
(d) Nothing in this Paragraph 5.9 shall be construed as
imposing an obligation on the Phoenix Equity Series to take any action to the
extent such action would be prohibited by governing law or the exercise of the
fiduciary duties of the board of trustees of the Phoenix Equity Series.
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(e) In the event that the D&O/E&O Insurance shall be
terminated during the period transpiring from Closing until the fifth
anniversary thereof, and the Phoenix Equity Series shall fail or be unwilling to
fulfill its obligations pursuant to clause (b) of this Paragraph 5.9, then
Phoenix Investment Counsel, Inc, the adviser to the Phoenix Equity Series,
individually or together with one or more parties to the above referenced joint
insured bond, will use its best efforts to procure a directors' and officers
errors and omissions insurance policy for the benefit of the Trustees of the
Phoenix Trust, among others, for claims made against such Trustees during the
period stated above, on not less than substantially the same terms and
conditions, including, without limitation, exclusions from coverage, retention
limits and limitations of liability, as exist for the benefit of such Trustees
under the D&O/E&O Insurance Policy existing as of the Closing Date. The
foregoing notwithstanding, in no event shall Phoenix Investment Counsel, Inc.,
nor any of its affiliates, subsidiaries, parent companies, officers, employees
or directors, in any way be liable or otherwise obligated to directly or
indirectly indemnify or hold harmless the Trustees of the Phoenix Trust for any
loss, cost or liability (including attorneys fees) arising in connection with
the subject transaction or with regard to any claims or causes of action as
might have been subject to possible
coverage pursuant to the above described coverage whether or not such coverage
is available in accordance with the terms of this clause.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE MERGING SERIES
The obligations of the Phoenix Trust, on behalf of the Merging Series,
to consummate the transactions provided for herein shall be subject, at its
election, to the performance by the Phoenix Equity Series, 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 Phoenix Equity Series,
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 Phoenix Equity Series, 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
Phoenix Equity Series, on behalf of the Surviving Series, on or before the
Closing Date; and
6.3 The Merging Series and the Surviving Series shall have agreed on
the number of full and fractional Surviving Series Shares to be issued in
connection with the Reorganization after such number has been calculated in
accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SURVIVING SERIES
The obligations of the Phoenix Equity Series, on behalf of the
Surviving Series, to complete the transactions provided for herein shall be
subject, at its election, to the performance by the Phoenix Trust, on behalf of
the Merging Series, of all of the obligations to be performed by it hereunder on
or before the Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of the Phoenix Trust, on
behalf of the Merging Series, contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Closing Date, with the same force and effect as if made on and as of the Closing
Date;
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7.2 The Phoenix Trust, on behalf of the Merging Series, shall have
delivered to the Surviving Series a statement of the Assets and the Liabilities,
as of the Closing Date, certified by the Treasurer or any Assistant Treasurer of
the Phoenix Trust;
7.3 The Phoenix Trust, on behalf of the Merging Series, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by Phoenix Trust, on behalf
of the Merging Series, on or before the Closing Date;
7.4 The Merging Series and the Surviving Series shall have agreed on
the number of full and fractional Surviving Series Shares to be issued in
connection with the Reorganization after such number has been calculated in
accordance with paragraph 1.1; and
7.5 The Merging Series shall have declared and paid a distribution
or distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its investment company taxable income and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to 4:00
p.m. Eastern time on the Closing Date; and (ii) any undistributed investment
company taxable income and net realized capital gains from any period to the
extent not otherwise already distributed.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SURVIVING SERIES
AND THE MERGING SERIES
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to the Phoenix Trust, on behalf of the
Merging Series, or the Phoenix Equity Series, on behalf of the Surviving Series,
the other party to this Agreement shall, at its option, not be required to
consummate the transactions contemplated by this Agreement:
8.1 The Agreement and the transactions contemplated herein shall
have been approved by the requisite vote of the holders of the outstanding
shares of the Merging Series in accordance with the provisions of the Phoenix
Trust's Declaration of Trust, and applicable Delaware law and the 1940 Act.
Notwithstanding anything herein to the contrary, neither the Phoenix Trust nor
the Phoenix Equity Series may waive the conditions set forth in this paragraph
8.1;
8.2 On the Closing Date, no action, suit or other proceeding shall
be pending or, to each Trust's knowledge, threatened before any court or
governmental agency in which it is sought to restrain or prohibit, or obtain
damages or other relief in connection with, this Agreement or the transactions
contemplated herein;
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary by
the Phoenix Trust or the Phoenix Equity Series 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
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8.5 The parties shall have received the signed opinion of Shearman &
Sterling LLP, addressed to the parties hereto and Phoenix Investment Counsel,
Inc. in the form agreed upon by the parties hereto, substantially to the effect
that, based upon certain facts, and the Officer's Certificate, the transaction
contemplated by this Agreement, will for federal income tax purposes, qualify as
a tax free reorganization described in Section 368(a) of the Code. The delivery
of such opinion is conditioned upon receipt of an Officer's Certificate
substantially in the form agreed upon by the parties.
9. BROKERAGE FEES AND EXPENSES
9.1 The Phoenix Trust, on behalf of the Merging Series, and the
Phoenix Equity Series, on behalf of the Surviving Series, represent and warrant
to each other that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.
9.2 The expenses relating to the proposed Reorganization arising
from and after approval by each respective board of trustees, will be borne by
Phoenix Investment Partners, Ltd. The costs of the Reorganization shall include,
but not be limited to, costs associated with obtaining any necessary order of
exemption from the 1940 Act, preparation of the Registration Statement, printing
and distributing the Surviving Series' prospectus and the Merging Series' proxy
materials, legal fees, accounting fees, securities registration fees, and
expenses of holding shareholders' meetings. Notwithstanding any of the
foregoing, expenses will in any event be paid by the party directly incurring
such expenses if and to the extent that the payment by another person of such
expenses would result in the disqualification of such party as a "regulated
investment company" within the meaning of Section 851 of the Code.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Phoenix Trust and the Phoenix Equity Series have not made
any representation, warranty or covenant not set forth herein, and this
Agreement constitutes the entire agreement between the parties.
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing shall survive the Closing.
11. TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned by either party: (i) by mutual agreement of the parties,
or (ii) either party if the Closing shall not have occurred on or before June
30, 2004, unless such date is extended by mutual agreement of the parties, or
(iii) either party if the other party shall have materially breached its
obligations under this Agreement or made a material and intentional
misrepresentation herein or in connection herewith. In the event of any such
termination, this Agreement shall become void and there shall be no liability
hereunder on the part of any party or their respective Trustees or officers,
except for any such material breach or intentional misrepresentation, as to each
of which all remedies at law or in equity of the party adversely affected shall
survive.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be deemed necessary or advisable by the authorized officers of the
Phoenix Trust and the Phoenix Equity Series;
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provided, however, that following the meeting of the shareholders of the Merging
Series called by the Phoenix Trust pursuant to paragraph 5.2 of this Agreement,
no such amendment may have the effect of changing the provisions for determining
the number of the Surviving Series Shares to be issued to the Merging Series
Shareholders under this Agreement to the detriment of such shareholders without
their further approval.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
facsimile, personal service or prepaid or certified mail addressed to the
parties hereto at their principal place of business.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
14.1 The Article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to its principles of
conflicts of laws.
14.4 This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
14.5 It is expressly agreed that the obligations of the Phoenix Trust
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Phoenix Trust personally, but shall bind
only the trust property of the Merging Series, as provided in the Declaration of
Trust of the Phoenix Trust. The execution and delivery by such officers of the
Phoenix Trust shall not be deemed to have been made by any of them individually
or to impose any liability on any of them personally, but shall bind only the
trust property of the Merging Series as provided in the Declaration of Trust of
the Phoenix Trust. The Phoenix Trust is a series company with multiple series,
and the Phoenix Trust has entered into this Agreement on behalf of one such
series, the Merging Series. With respect to any obligation of the Phoenix Trust
arising hereunder, the Phoenix Equity Series and the Surviving Series shall look
for payment or satisfaction of such obligations solely to the assets and
property of the Merging Series.
14.6 It is expressly agreed that the obligations of the Phoenix
Equity Series hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the Phoenix Equity
Series personally, but shall bind only the trust property of the Surviving
Series, as provided in the Declaration of Trust of the Phoenix Equity Series.
The execution and delivery by such officers of the Phoenix Equity Series shall
not be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Surviving Series as provided in the Declaration of Trust of the Phoenix
Equity Series. The Phoenix
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Equity Series is a series company with two portfolio series, and the Phoenix
Equity Series has entered into this Agreement on behalf of one such series, the
Surviving Series. With respect to any obligation of the Phoenix Equity Series
arising hereunder, the Phoenix Trust and the Merging Series shall look for
payment or satisfaction of such obligations solely to the assets and property of
the Surviving Series.
14.7 Except as specifically provided herein, the sole remedy of a
party hereto for a breach of any representation or warranty made in this
Agreement by the other party shall be an election by the non-breaching party not
to complete the transactions contemplated herein as set forth in Sections 6 and
7.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President or Vice President and its seal to be
affixed thereto and attested by its Secretary or Assistant Secretary.
Attest: PHOENIX EQUITY SERIES FUND, ON
BEHALF OF THE PHOENIX-OAKHURST
GROWTH & INCOME FUND
__________________________________ By: _______________________________
SECRETARY
Title: _______________________________
Attest: PHOENIX TRUST, ON BEHALF OF THE
PHOENIX-OAKHURST STRATEGY FUND
__________________________________ By: _______________________________
SECRETARY
Title: _______________________________
Agreed and accepted with respect
to Paragraphs 5.9(e) and 14.7
this ___ day of _______,
2004.
PHOENIX INVESTMENT COUNSEL, INC.
By:______________________________
Name
Title
Agreed and accepted with respect
to Paragraphs 9.2 and 14.7
this ___ day of _______,
2004.
PHOENIX INVESTMENT PARTNERS, LTD.
By:______________________________
Name
Title
A-15
PART B
STATEMENT OF ADDITIONAL INFORMATION
Acquisition of the Assets of
PHOENIX-OAKHURST STRATEGY FUND
a series of
Phoenix Trust
900 Third Avenue, 31st Floor
New York, NY 10022
(800) 243-1574
By and in Exchange for Shares of
PHOENIX-OAKHURST GROWTH & INCOME FUND
a series of
Phoenix Equity Series Fund
101 Munson Street
Greenfield, Massachusetts 01301
(800) 243-1574
This Statement of Additional Information, relating specifically to the
proposed transfer of all or substantially all of the assets and certain
identified liabilities of Phoenix-Oakhurst Strategy Fund (the "Strategy Fund"),
a series of Phoenix Trust, to Phoenix-Oakhurst Growth & Income Fund (the "Growth
& Income Fund"), a series of Phoenix Equity Series Fund, in exchange for shares
of the corresponding class of the Growth & Income Fund, consists of this cover
page and the following described documents:
(1) the Statement of Additional Information of the Phoenix Equity
Series Fund, as filed via EDGAR on Form N-1A on December 30, 2003 effective
December 31, 2003 with Post-Effective Amendment No. 9 and incorporated by
reference;
(2) the Statement of Additional Information of the Phoenix Trust, as
filed via EDGAR on Form N-1A on April 28, 2003 with Post-Effective Amendment No.
55, and supplements dated June 24, 2003, September 17, 2003 and November 13,
2003 to the Prospectus dated May 1, 2003, and incorporated by reference;
(3) the Annual Report of the Phoenix Equity Series Fund for the year
ended August 31, 2003 as filed via EDGAR on Form N-CSR on November 4, 2003, and
incorporated by reference;
(4) the Annual Report of the Phoenix Trust for the year ended December
31, 2002 as filed via EDGAR on Form N-30D on March 5, 2003, and incorporated by
reference;
1
(5) the Semi-Annual Report of the Phoenix Trust for the six months
ended June 30, 2003 as filed via EDGAR on Form N-CSRS on September 5, 2003 and
incorporated by reference; and
(6) the Pro Forma Financial Statements, filed herewith.
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the Prospectus/Proxy
Statement dated January 30, 2004. A copy of the Prospectus/Proxy Statement may
be obtained without charge by contacting Phoenix Equity Planning Corporation
("Equity Planning") at 56 Prospect Street, P. O. Box 150480, Hartford, CT
06115-0480 or by telephoning Equity Planning toll free at 1(800) 243-4361.
The date of this Statement of Additional Information is January 30,
2004.
2
Phoenix-Oakhurst Growth & Income Fund/Phoenix-Oakhurst Strategy Fund
Pro Forma Combining Schedule of Investments
August 31, 2003 (Unaudited)
Shares or Par Value Value
================ ================= ============= ================================= ================ ================ =============
Phoenix-Oakhurst Phoenix-Oakhurst Pro Forma Phoenix-Oakhurst Phoenix-Oakhurst Pro Forma
Growth & Income Strategy Combining DESCRIPTION Growth & Income Strategy Combining
Fund Fund Portfolios Fund Fund Portfolios
================ ================= ============= ================================= ================ ================ =============
COMMON STOCKS--98.9%
11,000 4,200 15,200 3M Co. 1,567,170 598,374 2,165,544
42,900 16,400 59,300 Abbott Laboratories 1,728,870 660,920 2,389,790
16,300 6,200 22,500 Aetna, Inc. 929,100 353,400 1,282,500
10,300 3,900 14,200 AFLAC, Inc. 329,703 124,839 454,542
11,700 4,500 16,200 AGL Resources, Inc. 325,611 125,235 450,846
4,500 1,700 6,200 Alexander & Baldwin, Inc. 131,760 49,776 181,536
98,300 37,700 136,000 Allstate Corp. (The) 3,514,225 1,347,775 4,862,000
17,300 6,600 23,900 ALLTEL Corp. 792,340 302,280 1,094,620
58,300 22,300 80,600 Altria Group, Inc. 2,403,126 919,206 3,322,332
20,000 7,700 27,700 AMBAC Financial Group, Inc. 1,298,400 499,884 1,798,284
24,800 9,500 34,300 Amerada Hess Corp. 1,169,320 447,925 1,617,245
40,800 15,600 56,400 American Electric Power Co., Inc. 1,155,048 441,636 1,596,684
58,800 22,500 81,300 American Express Co. 2,648,940 1,013,625 3,662,565
5,400 2,100 7,500 Amgen, Inc. 355,860 138,390 494,250
39,400 15,100 54,500 Andrew Corp. 487,772 186,938 674,710
167,100 64,000 231,100 AOL Time Warner, Inc. 2,733,756 1,047,040 3,780,796
20,000 7,700 27,700 Aon Corp. 444,000 170,940 614,940
10,500 4,000 14,500 Apache Corp. 724,290 275,920 1,000,210
36,400 13,900 50,300 AT&T Corp. 811,720 309,970 1,121,690
105,400 40,400 145,800 AT&T Wireless Services, Inc. 908,548 348,248 1,256,796
22,000 8,400 30,400 Avnet, Inc. 397,100 151,620 548,720
83,300 31,900 115,200 Bank of America Corp. 6,601,525 2,528,075 9,129,600
40,200 15,400 55,600 Bank One Corp. 1,586,694 607,838 2,194,532
10,300 3,900 14,200 Bard (C.R.), Inc. 690,100 261,300 951,400
17,200 6,600 23,800 Bausch & Lomb, Inc. 725,152 278,256 1,003,408
7,200 2,800 10,000 Bear Stearns Cos., Inc. (The) 503,856 195,944 699,800
20,900 8,000 28,900 Becton, Dickinson and Co. 763,686 292,320 1,056,006
109,500 41,900 151,400 BellSouth Corp. 2,759,400 1,055,880 3,815,280
21,200 8,100 29,300 Black & Decker Corp. 906,936 346,518 1,253,454
20,800 8,000 28,800 Block (H&R), Inc. 917,280 352,800 1,270,080
46,000 17,600 63,600 Blockbuster, Inc. Class A 942,540 360,624 1,303,164
17,300 6,600 23,900 BMC Software, Inc. 253,964 96,888 350,852
30,500 11,700 42,200 Briggs & Stratton Corp. 1,793,400 687,960 2,481,360
110,900 42,500 153,400 Bristol-Myers Squibb Co. 2,813,533 1,078,225 3,891,758
8,700 3,300 12,000 Capital Automotive REIT 248,559 94,281 342,840
28,700 11,000 39,700 Cendant Corp. 516,026 197,780 713,806
54,300 20,800 75,100 ChevronTexaco Corp. 3,956,841 1,515,696 5,472,537
277,900 106,500 384,400 Cisco Systems, Inc. 5,321,785 2,039,475 7,361,260
145,200 55,600 200,800 Citigroup, Inc. 6,294,420 2,410,260 8,704,680
25,500 9,800 35,300 Claiborne (Liz), Inc. 878,985 337,806 1,216,791
16,200 6,200 22,400 Claire's Stores, Inc. 559,710 214,210 773,920
47,700 18,300 66,000 Clorox Co. (The) 2,043,945 784,155 2,828,100
19,900 7,600 27,500 Commonwealth Telephone 785,254 299,896 1,085,150
Enterprises, Inc.
7,100 2,700 9,800 Computer Sciences Corp. 302,247 114,939 417,186
71,500 27,400 98,900 ConAgra Foods, Inc. 1,573,000 602,800 2,175,800
8,600 3,300 11,900 Cresent Real Estate Equities Co. 124,786 47,883 172,669
13,700 5,200 18,900 Deere & Co. 774,187 293,852 1,068,039
81,000 31,000 112,000 Dell, Inc. 2,643,030 1,011,530 3,654,560
27,000 10,300 37,300 Dial Corp. (The) 547,290 208,781 756,071
38,200 14,600 52,800 DoubleClick, Inc. 430,514 164,542 595,056
69,300 26,500 95,800 Eastman Kodak Co. 1,932,777 739,085 2,671,862
15,000 5,700 20,700 Eaton Corp. 1,404,600 533,748 1,938,348
76,400 29,300 105,700 EMC Corp. 974,100 373,575 1,347,675
19,000 7,300 26,300 Emulex Corp. 459,990 176,733 636,723
24,700 9,500 34,200 Energizer Holdings, Inc. 908,466 349,410 1,257,876
41,800 16,000 57,800 Entergy Corp. 2,192,410 839,200 3,031,610
35,900 13,800 49,700 Exelon Corp. 2,114,510 812,820 2,927,330
50,600 19,400 70,000 ExpressJet Holdings, Inc. 685,630 262,870 948,500
211,800 81,100 292,900 Exxon Mobil Corp. 7,984,860 3,057,470 11,042,330
8,000 3,100 11,100 Fannie Mae 518,320 200,849 719,169
31,400 12,000 43,400 Federated Department Stores, Inc. 1,372,180 524,400 1,896,580
14,100 5,400 19,500 First Data Corp. 541,440 207,360 748,800
38,800 14,900 53,700 First Tennessee National Corp. 1,604,380 616,115 2,220,495
37,500 14,400 51,900 FleetBoston Financial Corp. 1,109,625 426,096 1,535,721
98,900 37,900 136,800 Ford Motor Co. 1,143,284 438,124 1,581,408
21,600 8,300 29,900 Fortune Brands, Inc. 1,218,240 468,120 1,686,360
10,600 4,100 14,700 Fox Entertainment Group, Inc.
Class A 334,748 129,478 464,226
14,400 5,500 19,900 Freddie Mac 765,360 292,325 1,057,685
14,100 5,400 19,500 Fresh Del Monte Produce, Inc. 391,275 149,850 541,125
77,100 29,500 106,600 Gap, Inc. (The) 1,610,619 616,255 2,226,874
115,800 44,400 160,200 General Electric Co. 3,424,206 1,312,908 4,737,114
7,100 2,700 9,800 General Motors Corp. 291,810 110,970 402,780
186,600 71,500 258,100 GlobespanVirata, Inc. 1,420,026 544,115 1,964,141
3,700 1,400 5,100 Goldman Sachs Group, Inc. (The) 327,413 123,886 451,299
53,400 20,500 73,900 Great Plains Energy, Inc. 1,546,464 593,680 2,140,144
13,200 5,100 18,300 GTECH Holdings Corp. 559,416 216,138 775,554
19,400 7,400 26,800 Guidant Corp. 973,880 371,480 1,345,360
16,000 6,100 22,100 Hasbro, Inc. 296,000 112,850 408,850
140,400 53,800 194,200 Hewlett-Packard Co. 2,796,768 1,071,696 3,868,464
32,800 12,600 45,400 Hibernia Corp. Class A 680,600 261,450 942,050
19,300 7,400 26,700 Home Depot, Inc. (The) 620,688 237,984 858,672
6,600 2,500 9,100 IMS Health, Inc. 128,502 48,675 177,177
45,800 17,500 63,300 Ingersoll-Rand Co. Class A 2,726,016 1,041,600 3,767,616
276,200 105,800 382,000 Intel Corp. 7,904,844 3,027,996 10,932,840
50,600 19,400 70,000 International Business Machines
Corp. 4,149,706 1,590,994 5,740,700
13,100 5,000 18,100 Intuit, Inc. 593,692 226,600 820,292
2,300 900 3,200 Invitrogen Corp. 132,641 51,903 184,544
19,000 7,300 26,300 iStar Financial, Inc. 696,540 267,618 964,158
118,800 45,500 164,300 J.P. Morgan Chase & Co. 4,065,336 1,557,010 5,622,346
84,600 32,400 117,000 Johnson & Johnson 4,194,468 1,606,392 5,800,860
Phoenix-Oakhurst Growth & Income Fund/Phoenix-Oakhurst Strategy Fund
Pro Forma Combining Schedule of Investments
August 31, 2003 (Unaudited)
Shares or Par Value Value
================ ================= ============= ================================= ================ ================ =============
Phoenix-Oakhurst Phoenix-Oakhurst Pro Forma Phoenix-Oakhurst Phoenix-Oakhurst Pro Forma
Growth & Income Strategy Combining DESCRIPTION Growth & Income Strategy Combining
Fund Fund Portfolios Fund Fund Portfolios
================ ================= ============= ================================= ================ ================ =============
66,000 25,300 91,300 Kellogg Co. 2,212,980 848,309 3,061,289
12,400 4,700 17,100 Lear Corp. 688,820 261,085 949,905
16,500 6,300 22,800 Lehman Brothers Holdings, Inc. 1,084,545 414,099 1,498,644
31,000 11,900 42,900 Lennox International, Inc. 500,960 192,304 693,264
6,200 2,400 8,600 Lexmark International, Inc. 415,648 160,896 576,544
10,300 3,900 14,200 Lincoln National Corp. 364,826 138,138 502,964
19,800 7,600 27,400 Lockheed Martin Corp. 1,014,354 389,348 1,403,702
28,200 10,800 39,000 LSI Logic Corp. 325,428 124,632 450,060
21,300 8,200 29,500 Lubrizol Corp. 724,200 278,800 1,003,000
11,000 4,200 15,200 MacDermid, Inc. 314,490 120,078 434,568
15,500 5,900 21,400 Marsh & McLennan Cos., Inc. 775,000 295,000 1,070,000
65,400 25,100 90,500 Mattel, Inc. 1,263,528 484,932 1,748,460
99,300 38,000 137,300 MBNA Corp. 2,317,662 886,920 3,204,582
18,800 7,200 26,000 McGraw-Hill Cos., Inc. (The) 1,146,800 439,200 1,586,000
33,400 12,800 46,200 McKesson Corp. 1,093,516 419,072 1,512,588
1 1 2 Medco Health Solutions, Inc. 14 22 36
77,500 29,700 107,200 Merck & Co., Inc. 3,899,800 1,494,504 5,394,304
56,900 21,800 78,700 Merrill Lynch & Co., Inc. 3,060,082 1,172,404 4,232,486
90,300 34,600 124,900 MetLife, Inc. 2,566,326 983,332 3,549,658
349,600 133,900 483,500 Microsoft Corp. 9,271,392 3,551,028 12,822,420
21,200 8,100 29,300 Monsanto Co. 545,052 208,251 753,303
52,100 20,000 72,100 Morgan Stanley 2,541,959 975,800 3,517,759
70,000 26,800 96,800 Mylan Laboratories, Inc. 2,548,000 975,520 3,523,520
14,800 5,700 20,500 Nextel Communications, Inc.
Class A 285,344 109,896 395,240
3,700 1,400 5,100 Nicor, Inc. 125,763 47,586 173,349
79,000 30,300 109,300 NiSource, Inc. 1,527,860 586,002 2,113,862
105,900 40,600 146,500 Occidental Petroleum Corp. 3,635,547 1,393,798 5,029,345
28,700 11,000 39,700 Old Republic International Corp. 964,033 369,490 1,333,523
145,700 55,800 201,500 Oracle Corp. 1,862,046 713,124 2,575,170
8,600 3,300 11,900 Oxford Health Plans, Inc. 311,750 119,625 431,375
7,300 2,800 10,100 PACCAR, Inc. 621,960 238,560 860,520
28,600 11,000 39,600 PanAmSat Corp. 452,166 173,910 626,076
31,300 12,000 43,300 PerkinElmer, Inc. 517,702 198,480 716,182
216,700 83,000 299,700 Pfizer, Inc. 6,483,664 2,483,360 8,967,024
21,500 8,200 29,700 PMC-Sierra, Inc. 306,590 116,932 423,522
26,700 10,200 36,900 PPL Corp. 1,059,189 404,634 1,463,823
23,500 9,000 32,500 Principal Financial Group, Inc. 739,310 283,140 1,022,450
74,400 28,500 102,900 Procter & Gamble Co. (The) 6,494,376 2,487,765 8,982,141
35,600 13,600 49,200 QUALCOMM, Inc. 1,469,568 561,408 2,030,976
28,800 11,000 39,800 RadioShack Corp. 875,520 334,400 1,209,920
10,800 4,100 14,900 Rockwell Automation, Inc. 293,976 111,602 405,578
39,400 15,100 54,500 RPM International, Inc. 537,416 205,964 743,380
13,400 5,100 18,500 Sara Lee Corp. 254,332 96,798 351,130
162,200 62,100 224,300 SBC Communications, Inc. 3,647,878 1,396,629 5,044,507
8,400 3,200 11,600 Schlumberger Ltd. 415,884 158,432 574,316
37,900 14,500 52,400 Sherwin-Williams Co. (The) 1,140,032 436,160 1,576,192
30,800 11,800 42,600 Simon Property Group, Inc. 1,315,468 503,978 1,819,446
179,700 68,800 248,500 Sprint Corp. (FON Group) 2,654,169 1,016,176 3,670,345
16,900 6,500 23,400 Storage Technology Corp. 432,809 166,465 599,274
16,100 6,200 22,300 Tekelec 281,428 108,376 389,804
80,800 31,000 111,800 Texas Instruments, Inc. 1,927,080 739,350 2,666,430
32,200 12,300 44,500 Thermo Electron Corp. 733,838 280,317 1,014,155
6,200 2,400 8,600 Transocean, Inc. 130,944 50,688 181,632
30,000 11,500 41,500 Tyco International Ltd. 617,400 236,670 854,070
184,700 70,800 255,500 U.S. Bancorp 4,414,330 1,692,120 6,106,450
25,900 9,900 35,800 UnionBanCal Corp. 1,216,005 464,805 1,680,810
29,200 11,200 40,400 United Technologies Corp. 2,343,300 898,800 3,242,100
55,800 21,400 77,200 UnitedHealth Group, Inc. 2,758,194 1,057,802 3,815,996
24,300 9,300 33,600 V. F. Corp. 974,430 372,930 1,347,360
65,900 25,200 91,100 VeriSign, Inc. 986,523 377,244 1,363,767
31,600 12,100 43,700 VERITAS Software Corp. 1,089,568 417,208 1,506,776
116,100 44,500 160,600 Verizon Communications, Inc. 4,100,652 1,571,740 5,672,392
53,300 20,400 73,700 Viacom, Inc. Class B 2,398,500 918,000 3,316,500
24,200 9,300 33,500 Viad Corp. 577,896 222,084 799,980
82,100 31,400 113,500 Wachovia Corp. 3,460,515 1,323,510 4,784,025
58,000 22,200 80,200 Wal-Mart Stores, Inc. 3,431,860 1,313,574 4,745,434
8,400 3,200 11,600 Washington Mutual, Inc. 327,432 124,736 452,168
8,300 3,200 11,500 Waters Corp. 253,150 97,600 350,750
18,700 7,200 25,900 WellPoint Health Networks, Inc. 1,458,600 561,600 2,020,200
38,200 14,600 52,800 Winn-Dixie Stores, Inc. 383,910 146,730 530,640
21,000 8,000 29,000 Wolverine World Wide, Inc. 422,100 160,800 582,900
36,600 14,000 50,600 Wyeth 1,568,310 599,900 2,168,210
---------------- ---------------- -------------
TOTAL COMMON STOCKS 252,866,833 96,848,855 349,715,688
FOREIGN COMMON STOCKS--0.4%
17,000 6,500 23,500 Autoliv, Inc. 513,570 196,365 709,935
9,200 3,500 12,700 RenaissanceRe Holdings Ltd. 384,560 146,300 530,860
---------------- ---------------- -------------
TOTAL FOREIGN COMMON STOCKS 898,130 342,665 1,240,795
SHORT-TERM OBLIGATIONS--0.8%
450,000 845,000 1,295,000 ABSC Capital Corp. 1.11%, 9/4/03 449,930 844,948 1,294,878
1,150,000 - 1,150,000 FHLB 1.02%, 9/3/03 1,149,989 - 1,149,989
430,000 - 430,000 UBS Finance Delaware LLC 1.09%,
9/2/03 429,961 - 429,961
---------------- ---------------- -------------
TOTAL SHORT-TERM OBLIGATIONS 2,029,880 844,948 2,874,828
TOTAL INVESTMENTS--100.1% 255,794,843 98,036,468 353,831,311
(Identified cost $225,878,997,
$92,109,965 and $317,988,962)
Other assets and liabilities,
net---(0.1)% (108,524) (160,936) (269,460)
---------------- ---------------- -------------
Phoenix-Oakhurst Growth & Income Fund/Phoenix-Oakhurst Strategy Fund
Pro Forma Combining Schedule of Investments
August 31, 2003 (Unaudited)
Shares or Par Value Value
================ ================= ============= ================================= ================ ================ =============
Phoenix-Oakhurst Phoenix-Oakhurst Pro Forma Phoenix-Oakhurst Phoenix-Oakhurst Pro Forma
Growth & Income Strategy Combining DESCRIPTION Growth & Income Strategy Combining
Fund Fund Portfolios Fund Fund Portfolios
================ ================= ============= ================================= ================ ================ =============
NET ASSETS--100.0% $ 255,686,319 $ 97,875,532 $353,561,851
================ ================ =============
See Notes to Pro Forma Financial Statements
Phoenix-Oakhurst Growth & Income Fund/Phoenix-Oakhurst Strategy Fund
Pro Forma Combining Statement of Assets and Liabilities
August 31, 2003 (Unaudited)
================ ================ ================ ================
Phoenix-Oakhurst Phoenix-Oakhurst Pro Forma
Growth & Income Strategy Adjustments Combining
Fund Fund Portfolios
================ ================ ================ ================
ASSETS
Investment securities at value
(Identified cost $225,878,997,
$92,109,965 and $317,988,962) $ 255,794,843 $ 98,036,468 $ 353,831,311
Cash 1,152,730 371,549 1,524,279
Receivables -
Fund shares sold 499,841 24,100 523,941
Dividends and interest 442,301 179,136 621,437
Receivable from adviser 128 302 430
Prepaid expenses 6,505 2,483 8,988
---------------- ---------------- ---------------- -----------------
Total assets 257,896,348 98,614,038 - 356,510,386
---------------- ---------------- ---------------- -----------------
LIABILITIES
Payables
Investment securities purchased 1,149,837 376,882 1,526,719
Fund shares repurchased 596,367 113,011 709,378
Transfer agent fee 147,361 48,245 195,606
Distribution and service fees 132,299 49,008 181,307
Investment advisory fee 114,637 63,647 178,284
Financial agent fee 17,003 5,530 22,533
Trustees' fee 1,598 6,160 7,758
Accrued expenses 50,927 76,023 126,950
---------------- ---------------- ---------------- -----------------
Total liabilities 2,210,029 738,506 - 2,948,535
---------------- ---------------- ---------------- -----------------
NET ASSETS $ 255,686,319 $ 97,875,532 - $ 353,561,851
=============== =============== ================ ================
CLASS A
Shares of beneficial interest outstanding 11,060,193 7,703,595 (2,721,843)(a) 16,041,945
Net assets $ 131,169,093 $ 59,083,581 $ 190,252,674
Net asset value per share $ 11.86 $ 7.67 $ 11.86
Offering price per share NAV/(1- 5.75%) $ 12.58 $ 8.14 $ 12.58
CLASS B
Shares of beneficial interest outstanding 6,331,123 855,641 (284,832)(a) 6,901,932
Net assets $ 72,051,194 $ 6,495,803 $ 78,546,997
Net asset value and offering price per share $ 11.38 $ 7.59 $ 11.38
CLASS C
Shares of beneficial interest outstanding 4,608,613 4,265,430 (1,427,456)(a) 7,446,587
Net assets $ 52,466,032 $ 32,296,148 $ 84,762,180
Net asset value and offering price per share $ 11.38 $ 7.57 $ 11.38
(a) Adjustment reflects additional shares issued in conversion.
See Notes to Pro Forma Financial Statements.
Phoenix-Oakhurst Growth & Income Fund/Phoenix-Oakhurst Strategy Fund
Pro Forma Combining Statement of Operations
September 1, 2002 through August 31, 2003 (Unaudited)
================ ================ ================ ================
Phoenix-Oakhurst Phoenix-Oakhurst Pro Forma
Growth & Income Strategy Adjustments Combining
Fund Fund Portfolios
================ ================ ================ ================
INVESTMENT INCOME
Dividends $ 5,363,501 $ 2,022,088 $ $ 7,385,589
Interest 19,814 13,214 33,028
Foreign taxes withheld (16,708) (6,471) (23,179)
---------------- ---------------- ---------------- -----------------
Total investment income 5,366,607 2,028,831 - 7,395,438
---------------- ---------------- ---------------- -----------------
EXPENSES
Investment advisory fee 1,939,471 729,186 - 2,668,657
Distribution fee - Class A 334,790 169,661 (28,277) 476,174
Distribution and service fees, Class B 718,052 81,239 - 799,291
Distribution and service fees, Class C 528,749 324,841 - 853,590
Financial agent fee 209,325 63,335 (2,127)(a) 270,533
Transfer agent 718,626 279,470 41,682 1,039,778
Printing 53,868 51,788 (24,718) 80,938
Custodian 46,908 45,749 (42,113) 50,544
Registration 41,767 29,238 (25,115) 45,890
Professional 31,562 94,096 (93,531) 32,127
Trustees 27,991 26,544 (24,709) 29,826
Miscellaneous 29,209 13,347 (19,399) 23,157
---------------- ---------------- ---------------- -----------------
Total expenses 4,680,318 1,908,495 (218,307)(b) 6,370,506
Less exp borne by the advisor (512,900) - (170,314) (683,214)
Custodian fees paid indirectly (27) - (27)
---------------- ---------------- ---------------- -----------------
Net Expenses 4,167,391 1,908,495 (388,621) 5,687,265
---------------- ---------------- ---------------- -----------------
NET INVESTMENT INCOME (LOSS) 1,199,216 120,336 388,621 1,708,173
---------------- ---------------- ---------------- -----------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on securities (34,375,102) (13,076,292) - (47,451,394)
Net realized loss on foreign currency transactions - - - -
Net change in unrealized appreciation (depreciation)
on investments 50,731,384 20,075,012 - 70,806,396
---------------- ---------------- ---------------- -----------------
Net gain on investments 16,356,282 6,998,720 - 23,355,002
---------------- ---------------- ---------------- -----------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 17,555,498 7,119,056 388,621 25,063,175
================ ================ ================ =================
Adjustments:
(a) Fees were adjusted to reflect the application of the fee schedule put into effect at 1/1/03.
(b) Reflects elimination of target fund contract.
Note: The expenses for Oakhurst Growth and Income Fund are based on the expense
schedule which became effective 06/30/03.
See Notes to Pro Forma Financial Statements.
PHOENIX-OAKHURST GROWTH & INCOME FUND/PHOENIX-OAKHURST STRATEGY FUND
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS
AUGUST 31, 2003
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-Oakhurst Strategy
Fund ("Strategy") into the Phoenix-Oakhurst Growth & Income Fund ("Growth &
Income"). 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 Strategy to Growth &
Income and the subsequent liquidation of Strategy. The accounting survivor in
the proposed merger will be Growth & Income. This is because although Strategy
has the same investment objective as Growth & Income, the surviving fund will
invest in a style that is similar to the way in which Growth & Income is
currently operated (including hedging and investment in debt securities).
Additionally, Growth & Income has a significantly larger asset base than
Strategy.
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.
Strategy and Growth & Income 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 Growth & Income which would have been issued at August 31, 2003 in
connection with the proposed reorganization. The amount of additional shares
assumed to be issued was calculated based on the net assets, as of August 31,
2003, of Strategy Class A of $59,083,581 and the net asset value of Growth &
Income Class A of $11.86; and the net assets of Strategy Class B of $6,495,803
and the net asset value of Growth & Income Class B of $11.38; and the net assets
of Strategy Class C of $32,296,148 and the net asset value of Growth & Income
Class C of $11.38. 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 Growth & Income restated to
reflect the expense schedule which became effective June 30, 2003, the actual
expenses of each Strategy 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 Growth & Income at the combined level of average net
assets for the period ended August 31, 2003.
4. PORTFOLIO VALUATION
Equity securities are valued at the last sale price, or if there had been no
sale that day, at the last bid price. Debt securities are valued on the basis of
broker quotations or valuations provided by a pricing service which utilizes
information with respect to recent sales, market transactions in comparable
securities, quotations from dealers, and various relationships between
securities in determining value. Short-term investments having a remaining
maturity of 60 days or less are valued at amortized cost which approximates
market. All other securities and assets are valued at fair value as determined
in good faith by or under the direction of the Trustees.
PART C
PHOENIX EQUITY SERIES FUND
PART C
OTHER INFORMATION
Item 15. Indemnification
The response to this item is incorporated by reference to Part A of the
Prospectus/Proxy Statement in this Registration Statement under the caption
"Comparative Information on Shareholder Rights-Liability of Trustees."
The Agreement and Plan of Reorganization provides:
5.9 (a) Subject to governing law, until the fifth anniversary of
the Closing Date, the Phoenix Equity Series, on behalf of itself and any
successor thereto by reason of merger, reorganization, sale or other similar
transaction, shall: (a) continue that certain joint insured bond referred to as
Investment Management Insurance Policy No. 281-35-77 issued by American
International Specialty Lines Insurance Company (such policy, or any replacement
thereof during the operative period referenced above shall hereafter be referred
to as the "D&O/E&O Insurance"), or such greater insurance as the Phoenix Equity
Series and all other requisite parties to such joint insured bond shall
reasonably determine; and (b) maintain those indemnity provisions as provided in
the current Declaration of Trust of the Phoenix Equity Series and By-Laws
applicable with regard to the proper and lawful activities of a trustee (the
"Indemnity").
(b) In the event that the D&O/E&O Insurance shall be
terminated during the period transpiring from the Closing Date until the fifth
anniversary thereof, then the Phoenix Equity Series, individually or together
with one or more parties to the above referenced joint insured bond, will use
its best efforts to procure a directors' and officers errors and omissions
insurance policy for the benefit of the Trustees of the Phoenix Trust, among
others, for claims made against such Trustees during the period stated above, on
not less than substantially the same terms and conditions, including, without
limitation, exclusions from coverage, retention limits and limitations of
liability, as exist for the benefit of such Trustees under the D&O/E&O Insurance
Policy existing as of the Closing Date.
(c) The D&O/E&O Insurance and Indemnity shall apply equally to
the trustees of the Phoenix Trust (constituted as of the date of this Agreement)
as they apply to the trustees of the Phoenix Equity Series.
Item 16. Exhibits
(1) Agreement and Declaration of Trust of the Registrant, dated August 17,
2000, filed via EDGAR with Post-Effective Amendment No. 6 (File No.
333-29043) on December 15, 2000 and incorporated by reference.
(2) Bylaws of the Registrant filed via EDGAR with Post-Effective Amendment
No. 6 on December 15, 2000 and incorporated by reference.
(3) Not Applicable.
(4) Agreement and Plan of Reorganization (included as Exhibit A to the
Prospectus/Proxy Statement contained in Part A of this Registration
Statement).
(5) Reference is hereby made to Registrant's Agreement and Declaration of
Trust referenced in Exhibit 1 and Registrant's Bylaws reference in
Exhibit 2 above.
(6) Amended and Restated Investment Advisory Agreement between Registrant
and Phoenix Investment Counsel, Inc. dated November 20, 2002 covering
Phoenix-Oakhurst Growth & Income Fund, as filed via EDGAR on Form N-1A
on December 30, 2003 effective December 31, 2003 with Post-Effective
Amendment No. 9 and incorporated by reference.
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(7)(a) Underwriting Agreement between Registrant and Phoenix Equity Planning
Corporation dated November 19, 1997 filed as Exhibit 6.1 via EDGAR with
Post-Effective Amendment No. 1 on May 20, 1998 and incorporated by
reference.
(7)(b) Updated Form of Sales Agreement between Phoenix Equity Planning
Corporation and dealers, as filed via EDGAR on Form N-1A on December
30, 2003 effective December 31, 2003 with Post-Effective Amendment No.
9 and incorporated by reference.
(7)(c) Form of Financial Institutional Sales Contract for the Phoenix Family
of Funds filed as Exhibit 6.4 via EDGAR with Post-Effective Amendment
No. 1 on May 20, 1998 and incorporated by reference.
(8) Not Applicable.
(9)(a) Master Custodian Contract between Registrant and State Street Bank and
Trust Company dated May 1, 1997 filed as Exhibit 8.1 via EDGAR with
Pre-Effective Amendment No. 3 on September 25, 1997 and incorporated by
reference.
(9)(b) Amendment dated February 10, 2000 to Master Custodian Contract dated
May 1, 1997 between Registrant and State Street Bank and Trust Company,
as filed via EDGAR on Form N-1A on December 30, 2003 effective December
31, 2003 with Post-Effective Amendment No. 9 and incorporated by
reference.
(9)(c) Amendment dated July 2, 2001 to Master Custodian Contract dated May 1,
1997 between Registrant and State Street Bank and Trust Company, as
filed via EDGAR on Form N-1A on December 30, 2003 effective December
31, 2003 with Post-Effective Amendment No. 9 and incorporated by
reference.
(9)(d) Amendment dated May 10, 2002 to Master Custodian Contract dated May 1,
1997 between Registrant and State Street Bank and Trust Company, as
filed via EDGAR on Form N-1A on December 30, 2003 effective December
31, 2003 with Post-Effective Amendment No. 9 and incorporated by
reference.
(10)(a) Amended and Restated Distribution Plan for Class A Shares filed as
Exhibit 15.1 via EDGAR with Post-Effective Amendment No. 1 on May 20,
1998 and incorporated by reference.
(10)(b) First Amendment of Phoenix Equity Series Fund Class A Shares Amended
and Restated Distribution Plan, as filed via EDGAR on Form N-1A on
December 30, 2003 effective December 31, 2003 with Post-Effective
Amendment No. 9 and incorporated by reference.
(10)(c) Distribution Plan for Class B Shares filed via EDGAR with
Post-Effective Amendment No. 5 on September 26, 2000 and incorporated
by reference.
(10)(d) Distribution Plan for Class C Shares filed via EDGAR with
Post-Effective Amendment No. 5 on September 26, 2000 and incorporated
by reference.
(10)(e) Fourth Amended and Restated Plan pursuant to Rule 18f-3 effective
September 1, 2002, as filed via EDGAR on Form N-1A on December 30, 2003
effective December 31, 2003 with Post-Effective Amendment No. 9 and
incorporated by reference.
(10)(f) First Amendment to the Fourth Amended and Restated Plan pursuant to
Rule 18f-3 as of August 20, 2003, as filed via EDGAR on Form N-1A on
December 30, 2003 effective December 31, 2003 with Post-Effective
Amendment No. 9 and incorporated by reference.
(11) Opinion and Consent of Matthew A. Swendiman, Esq. with respect to
legality of the shares being issued (to be filed by Amendment).
C-2
(12) Opinion and Consent of Shearman & Sterling LLP with respect a tax free
reorganization (to be filed by Amendment).
(13)(a) Transfer Agency and Service Agreement between Registrant and Phoenix
Equity Planning Corporation filed as Exhibit 9.1 via EDGAR with
Pre-Effective Amendment No. 1 on August 22, 1997 and incorporated by
reference.
(13)(b) Sub-Transfer Agency Agreement between Phoenix Equity Planning
Corporation and State Street Bank and Trust Company effective June 1,
1994 filed as Exhibit 9.2 via EDGAR with Post-Effective Amendment No. 1
on May 20, 1998 and incorporated by reference.
(13)(c) Amended and Restated Financial Agent Agreement between Registrant and
Phoenix Equity Planning Corporation dated November 19, 1997 filed as
Exhibit 9.3 via EDGAR with Post-Effective Amendment No. 1 on May 20,
1998 and incorporated by reference.
(13)(d) First Amendment to the Amended and Restated Financial Agreement between
Registrant and Phoenix Equity Planning Corporation effective as of
February 27, 1998 filed as Exhibit 9.4 via EDGAR with Post-Effective
Amendment No. 1 on May 20, 1998 and incorporated by reference.
(13)(e) Second Amendment to Amended and Restated Financial Agent Agreement
between Registrant and Phoenix Equity Planning Corporation effective as
of June 1, 1998 filed as Exhibit 99.BH5 via EDGAR with Post-Effective
Amendment No. 2 on October 30, 1998 and incorporated herein by
reference.
(13)(f) Third Amendment to Amended and Restated Financial Agent Agreement
between Registrant and Phoenix Equity Planning Corporation, as filed
via EDGAR on Form N-1A on December 30, 2003 effective December 31, 2003
with Post-Effective Amendment No. 9 and incorporated by reference.
(13)(g) Amended and Restated Code of Ethics of the Trust, Adviser and
Distributor effective November 19, 2003, as filed via EDGAR on Form
N-1A on December 30, 2003 effective December 31, 2003 with
Post-Effective Amendment No. 9 and incorporated by reference.
(14) *Consent of PricewaterhouseCoopers LLP, filed herewith.
(15) Not Applicable.
(16) Powers of Attorney filed as Exhibit q via EDGAR with Post-Effective
Amendment No. 8 on December 30, 2002 and incorporated by reference.
(17)(a) Form of Proxy Card for Phoenix-Oakhurst Strategy Fund, previously
filed, via EDGAR with the Initial Registration Statement (No.
333-111462) on December 23, 2003.
(17)(b) Current Prospectus of the Phoenix-Equity Series Fund, as filed via
EDGAR on Form N-1A on December 30, 2003 effective December 31, 2003
with Post-Effective Amendment No. 9 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
C-3
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-4
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 30th day of January, 2004.
PHOENIX EQUITY SERIES FUND
By:/s/ Philip R. McLoughlin
------------------------
Name: Philip R. McLoughlin
Title: President
As required by the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated as of the 30th day of January, 2004.
Signature Title
- --------- -----
Trustee
- -------------------------------------------------
E. Virgil Conway*
/s/ Nancy G. Curtiss Treasurer
- ------------------------------------------------- (Principal Financial and Accounting Officer)
Nancy G. Curtiss*
Trustee
- -------------------------------------------------
Harry Dalzell-Payne*
Trustee
- -------------------------------------------------
Francis E. Jeffries*
Trustee
- -------------------------------------------------
Leroy Keith, Jr.*
Trustee
- -------------------------------------------------
Marilyn E. LaMarche*
/s/ Philip R. McLoughlin President and Trustee
- ------------------------------------------------- (Principal Executive Officer)
Philip R. McLoughlin*
Trustee
- -------------------------------------------------
Geraldine M. McNamara*
Trustee
- -------------------------------------------------
Everett L. Morris*
S-1
Trustee
- -------------------------------------------------
James M. Oates*
Trustee
- -------------------------------------------------
Richard E. Segerson*
Trustee
- -------------------------------------------------
Lowell P. Weicker, Jr.*
By /s/ Philip R. McLoughlin
--------------------------------------------
Philip R. McLoughlin
*Philip R. McLoughlin, pursuant to powers of attorney, filed as Exhibit q via
EDGAR with Post-Effective Amendment No. 8 on December 30, 2002 and incorporated
by reference.
S-2
Index To Exhibits
-----------------
(14) Consent of PricewaterhouseCoopers LLP