As filed with the Securities and Exchange Commission on January 10, 2007
1933 Act Registration No. 333-________
- --------------------------------------------------------------------------------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-14
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[ ] Pre-Effective [ ] Post-Effective
Amendment No. Amendment No.
PHOENIX ADVISER TRUST
(Phoenix Foreign Opportunities Fund)
[Exact Name of Registrant as Specified in Charter]
Area Code and Telephone Number: (800) 243-1574
101 Munson Street
Greenfield, Massachusetts 01301
-----------------------------------
(Address of Principal Executive Offices)
Kevin J. Carr, Esq.
Vice President, Chief Legal Officer,
Counsel and Secretary for the Registrant
Phoenix Life Insurance Company
One American Row
Hartford, Connecticut 06103-2899
-----------------------------------------
(Name and Address of Agent for Service)
Copies of All Correspondence to:
Robert N. Hickey, Esq.
Sullivan & Worcester LLP
1666 K Street, N.W.
Washington, D.C. 20006
Approximate Date of Proposed Public Offering: As soon as practicable
after this Registration Statement becomes effective.
Title of Securities Being Registered: Shares of beneficial interest,
$.001 par value per share.
The Registrant has registered an indefinite amount of securities of its
Phoenix Foreign Opportunities Fund under the Securities Act of 1933 pursuant to
Section 24(f) under the Investment Company Act of 1940; accordingly, no fee is
payable herewith. A Rule 24f-2 Notice for the Registrant's fiscal year ended
February 28, 2006 was filed with the Commission on May 12, 2006.
It is proposed that this filing will become effective on February 9,
2007, pursuant to Rule 488 of the Securities Act of 1933.
PHOENIX INSIGHT FUNDS TRUST
101 Munson Street
Greenfield, Massachusetts 01301
February 9, 2007
Dear Shareholder:
The Phoenix Insight International Fund ("Insight International"), a
series of Phoenix Insight Funds Trust ("Insight Trust"), will hold a special
meeting of shareholders at 2:00 p.m. Eastern time, on March 30, 2007, at the
offices of Phoenix Investment Partners, Ltd., 56 Prospect Street, Hartford,
Connecticut 06103 (the "Meeting"). At the Meeting, shareholders of Insight
International will vote on an Agreement and Plan of Reorganization (the "Plan")
under which Insight International will be combined with the Phoenix Foreign
Opportunities Fund ("Foreign Opportunities"), a series of Phoenix Adviser Trust.
The reorganization is expected to be completed on or about April 13, 2007.
Insight International's investment objective and investment strategies are
similar to those of Foreign Opportunities. If the Plan is approved by
shareholders, you will become a shareholder of Foreign Opportunities and will
receive shares of the corresponding class of Foreign Opportunities with an
aggregate net asset value equal to the aggregate net asset value of your
investment in Insight International. No sales charge will be imposed in
connection with the reorganization.
The Board of Trustees has carefully considered and has unanimously
approved the proposed reorganization, as set forth in the Plan and described in
the accompanying materials, and believes that the reorganization is in the best
interests of Insight International and its shareholders. While retaining the
same investment management team, the reorganization into a single fund is
expected to result in greater operating efficiencies and lower fund expenses for
shareholders of Insight International. Therefore, the Board of Trustees
recommends that you vote in favor of the Plan.
Details of the proposed Plan, the voting process and the Meeting are
set forth in the enclosed Prospectus/Proxy Statement.
YOUR VOTE COUNTS AND DELAYING TO VOTE CAN POTENTIALLY ADD TO THE COST
OF THIS PROXY SOLICITATION. PLEASE CAST YOUR BALLOT TODAY - ONLINE, BY TELEPHONE
OR BY MAIL - BY FOLLOWING THE INSTRUCTIONS ON THE ENCLOSED PROXY CARD.
If you have any questions, please call (800) 243-1574 between 8:00 a.m.
and 6:00 p.m. Eastern time, Monday through Thursday, Friday until 5:00 p.m.
Your vote is important. Please take a moment after reviewing the
enclosed materials to vote your shares. If we do not hear from you after a
reasonable amount of time, you may receive a telephone call from our proxy
solicitor, Computershare Fund Services, Inc., reminding you to vote your shares.
Sincerely,
/s/ George R. Aylward
George R. Aylward
President
Q & A FOR SHAREHOLDERS
While we encourage you to read the full text of the enclosed
Prospectus/Proxy Statement, here is a brief overview of the proposed
reorganization that will be the subject of a shareholder vote.
Q. WHAT ISSUE AM I BEING ASKED TO VOTE ON AT THE UPCOMING SPECIAL MEETING ON
MARCH 30, 2007?
A. Shareholders of Phoenix Insight International ("Insight International")
are being asked to approve an Agreement and Plan of Reorganization (the
"Plan") that provides for the reorganization (the "Reorganization") of
Insight International, a series of Phoenix Insight Funds Trust ("Insight
Trust") into Phoenix Foreign Opportunities Fund ("Foreign
Opportunities"), a series of Phoenix Adviser Trust ("Adviser Trust").
Q. WHY DID THE BOARD OF TRUSTEES APPROVE THE REORGANIZATION?
A. The Reorganization is part of a restructuring designed to eliminate
the offering of overlapping funds with similar investment objectives and
similar investment strategies within the Phoenix Funds complex, while
simultaneously creating economies of scale for the surviving funds that
are intended to lower fund expenses. The proposed Reorganization will
allow shareholders of Insight International to own a fund that is similar
in style, and with a greater amount of assets. While retaining the same
investment management team, the Reorganization into a single fund is
expected to result in greater operating efficiencies and lower fund
expenses for shareholders of Insight International. Foreign Opportunities
has a similar investment objective and similar investment strategies as
Insight International, while its Class A shares have outperformed the
Class A shares of Insight International on a one- and five-year basis,
through December 31, 2006. The Reorganization should create better
efficiencies for the portfolio management team, which should benefit
Foreign Opportunities and its shareholders, and perhaps lower fees for
Foreign Opportunities.
Q. WHAT WILL HAPPEN TO MY EXISTING SHARES?
A. Your shares of Insight International will be exchanged for shares of
Foreign Opportunities. Therefore, if you own Class A, Class C or Class I
shares of Insight International, you will own Class A, Class C or Class I
shares, respectively, of Foreign Opportunities following the
Reorganization. You will not pay any sales charges in connection with the
Reorganization. The shares of Foreign Opportunities that you receive
following the Reorganization will have an aggregate net asset value equal
to the aggregate net asset value of your shares of Insight International
immediately prior to the Reorganization so that the value of your
investment will remain exactly the same.
Q. ARE THERE DIFFERENCES BETWEEN THE INVESTMENT OBJECTIVES AND INVESTMENT
STRATEGIES OF INSIGHT INTERNATIONAL AND FOREIGN OPPORTUNITIES?
A. The investment objective of Insight International is similar to that of
Foreign Opportunities, and the investment strategies are similar. Both
Funds are managed by the same investment manager using a substantially
similar investment style.
i
Q. WILL I INCUR ANY TRANSACTION COSTS AS A RESULT OF THE REORGANIZATION?
A. No. Shareholders will not incur any transaction costs, e.g., sales
charges or redemption fees, as a result of the Reorganization.
Q. WHAT IS THE TIMETABLE FOR THE REORGANIZATION?
A. If approved by shareholders of record at the Meeting, the Reorganization
is expected to occur on or about April 13, 2007.
Q. WILL THE REORGANIZATION CREATE A TAXABLE EVENT FOR ME?
A. No. The Reorganization is expected to be a tax-free transaction for
federal income tax purposes.
Q. WHAT HAPPENS IF THE REORGANIZATION IS NOT APPROVED?
A. If shareholders of Insight International do not approve the Plan, the
Reorganization will not take effect and the Board of Trustees of Insight
Trust will consider other possible courses of action in the best
interests of Insight International and its shareholders.
Q. HAS THE BOARD OF TRUSTEES APPROVED THE PROPOSAL?
A. Yes. The Board unanimously approved the Reorganization as set forth in
the Plan and recommends that you vote FOR the Plan.
Q. WHO WILL PAY FOR THE LEGAL COSTS AND PROXY SOLICITATION ASSOCIATED WITH
THE PROPOSAL?
A. All of the costs of the Reorganization, including the costs of the
Meeting, the proxy solicitation or any adjourned session, will be paid by
Insight International and Phoenix Investment Counsel, Inc. ("PIC"), the
Fund's investment adviser, with Insight International paying 30% of such
costs and PIC paying 70%. If the Plan is not approved, PIC or one of its
affiliates will pay the expenses incurred by Insight International and
Foreign Opportunities in connection with the Reorganization (including
the cost of any proxy soliciting agent). In such event, no portion of the
expenses will be borne directly or indirectly by Insight International,
Foreign Opportunities or their shareholders.
Q. HOW DO I VOTE MY SHARES?
A. If you do not expect to attend the Meeting, you may vote your shares by
completing and signing the enclosed proxy card, and mailing it in the
enclosed postage-paid envelope. Alternatively, you may vote by telephone
by calling the toll-free number on the proxy card or by computer at the
Internet address provided on the proxy card and following the
instructions, using your proxy card as a guide. You may also vote your
shares by attending the Meeting. IT IS IMPORTANT THAT YOU VOTE PROMPTLY.
ii
Q. WILL ANYONE CONTACT ME?
A. You may receive a call from our proxy solicitor, Computershare Fund
Services, Inc. ("CFS") to verify that you received your proxy materials,
to answer any questions you may have about the proposals and to encourage
you to vote.
Q. WHO SHOULD I CALL FOR ADDITIONAL INFORMATION ABOUT THIS PROSPECTUS/PROXY
STATEMENT?
A. Please call CFS, Insight International's proxy agent, at 866-343-1411. As
the Meeting date approaches, certain shareholders of Insight
International may receive telephone calls from representatives of CFS if
their votes have not yet been received. Proxies that are obtained
telephonically by CFS will be recorded in accordance with the procedures
described below. The Trustees believe that these procedures are
reasonably designed to ensure that both the identity of the shareholder
casting the vote and the voting instructions of the shareholder are
accurately determined.
In all cases in which a telephonic proxy is solicited, the CFS
representative is required to ask for each shareholder's full name and
address, or employer identification number, and to confirm that the
shareholder has received the proxy materials in the mail. If the
shareholder is a corporation or other entity, the CFS representative is
required to ask for the person's title and confirmation that the person
is authorized to direct the voting of the shares. If the information
solicited agrees with the information provided to CFS, then the CFS
representative has the responsibility to explain the process, read the
proposal listed on the proxy card and ask for the shareholder's
instructions on the proposal.
IN ORDER TO AVOID DELAY AND ADDITIONAL EXPENSE, AND TO ASSURE THAT YOUR SHARES
ARE REPRESENTED, PLEASE VOTE AS PROMPTLY AS POSSIBLE, REGARDLESS OF WHETHER YOU
PLAN TO ATTEND THE MEETING. YOU MAY VOTE BY MAIL, TELEPHONE OR OVER THE
INTERNET. TO VOTE BY MAIL, PLEASE MARK, SIGN, DATE, AND MAIL THE ENCLOSED PROXY
CARD. NO POSTAGE IS REQUIRED IF YOU USE THE ACCOMPANYING ENVELOPE TO MAIL THE
PROXY CARD IN THE UNITED STATES. TO VOTE BY TELEPHONE, PLEASE CALL THE TOLL-FREE
NUMBER LOCATED ON YOUR PROXY CARD AND FOLLOW THE RECORDED INSTRUCTIONS, USING
YOUR PROXY CARD AS A GUIDE. TO VOTE OVER THE INTERNET, GO TO THE INTERNET
ADDRESS PROVIDED ON YOUR PROXY CARD AND FOLLOW THE INSTRUCTIONS, USING YOUR
PROXY CARD AS A GUIDE.
iii
PHOENIX INSIGHT FUNDS TRUST
on behalf of Phoenix Insight International Fund series
101 Munson Street
Greenfield, Massachusetts 01301
1-800-243-1574
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on March 30, 2007
To the Shareholders:
NOTICE IS HEREBY GIVEN THAT a special meeting of the shareholders of the Phoenix
Insight International Fund ("Insight International") series of Phoenix Insight
Funds Trust ("Insight Trust"), a Massachusetts business trust, will be held at
the offices of Phoenix Investment Partners, Ltd., 56 Prospect Street, Hartford,
Connecticut, 06103, on March 30, 2007 at 2:00 p.m. Eastern time and any
adjournments thereof (the "Meeting"). The Meeting will be held for the following
purposes:
1. To consider and act upon an Agreement and Plan of Reorganization
(the "Plan") providing for the acquisition of all of the assets of
Insight International, a series of Insight Trust, by Phoenix
Foreign Opportunities Fund ("Foreign Opportunities"), a series of
Phoenix Adviser Trust, in exchange for shares of Foreign
Opportunities and the assumption by Foreign Opportunities of the
liabilities of Insight International. The Plan also provides for
distribution of these shares of Foreign Opportunities to
shareholders of Insight International in liquidation and
subsequent termination of Insight International. A vote in favor
of the Plan is a vote in favor of the liquidation and dissolution
of Insight International.
2. To transact any other business that may properly come before
the Meeting.
The Board of Trustees has fixed the close of business on February 5,
2007 as the record date for determination of shareholders entitled to notice of
and to vote at the Meeting.
Whether or not you plan to attend the Meeting in person, please vote
your shares. As a convenience to our shareholders, you may now vote in any one
of four ways:
o Through the Internet--https://vote.proxy-direct.com
o By telephone--1-866-241-6192
o By mail--using the enclosed proxy card and postage paid envelope
o In person--at the Meeting
We encourage you to vote by Internet or telephone; have your proxy card
in hand and go to the Web site or call the number and follow the instructions
given there. Use of Internet or
telephone voting will reduce the time and cost associated with this proxy
solicitation. Whichever method you choose, please read the enclosed
Prospectus/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 proposals described above.
By order of the Board of Trustees,
/s/ Kevin J. Carr
-----------------
Kevin J. Carr
Secretary
Phoenix Insight Funds Trust
February 9, 2007
SHAREHOLDERS ARE REQUESTED TO VOTE BY INTERNET OR BY TELEPHONE OR TO COMPLETE,
SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE, WHICH
NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. INSTRUCTIONS FOR THE PROPER
EXECUTION OF THE PROXY WITH RESPECT TO INTERNET OR TELEPHONE VOTING ARE SET
FORTH ON THE PROXY CARD. INSTRUCTIONS FOR SIGNING PROXY CARDS, IF MAILING,
IMMEDIATELY FOLLOW THIS NOTICE. IT IS IMPORTANT THAT THE PROXY BE VOTED
PROMPTLY.
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense involved in validating your
vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in
the registration on the voting instructions form.
2. Joint Accounts: Either party may sign, but the name of the
party signing should conform exactly to the name shown in the
registration on the voting instructions form.
3. All Other Accounts: The capacity of the individual signing the
voting instructions form should be indicated unless it is
reflected in the form of registration. For example:
REGISTRATION VALID SIGNATURE
------------ ---------------
CORPORATE ACCOUNTS
------------------
(1) ABC Corp. . . . . . . . . . . . . . . . ABC Corp.
(2) ABC Corp. . . . . . . . . . . . . . . . John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer . . . . . . . . John Doe
(4) ABC Corp. Profit Sharing Plan . . . . . John Doe, Trustee
TRUST ACCOUNTS
--------------
(1) ABC Trust . . . . . . . . . . . . . . . Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 . . . . . . . . . . . . Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
----------------------------
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA . . . . . John B. Smith
(2) Estate of John B. Smith . . . . . . . . John B. Smith, Jr.,
Executor
ACQUISITION OF ASSETS OF
PHOENIX INSIGHT INTERNATIONAL FUND
a series of
PHOENIX INSIGHT FUNDS TRUST
c/o Phoenix Equity Planning Corporation
101 Munson Street
Greenfield, Massachusetts 01301
(800) 243-1574
BY AND IN EXCHANGE FOR SHARES OF
PHOENIX FOREIGN OPPORTUNITIES FUND
a series of
PHOENIX ADVISER TRUST
c/o Phoenix Equity Planning Corporation
101 Munson Street
Greenfield, Massachusetts 01301
(800) 243-1574
PROSPECTUS/PROXY STATEMENT
DATED FEBRUARY 9, 2007
This Prospectus/Proxy Statement is being furnished in connection with an
Agreement and Plan of Reorganization (the "Plan") which will be submitted to
shareholders of Phoenix Insight International Fund ("Insight International"), a
series of Phoenix Insight Funds Trust ("Insight Trust"), for consideration at a
Special Meeting of Shareholders to be held on March 30, 2007 at 2:00 p.m.
Eastern time at the offices of Phoenix Investment Partners, Ltd., 56 Prospect
Street, Hartford, Connecticut 06103, and any adjournments thereof (the
"Meeting").
GENERAL
Subject to the approval of Insight International's shareholders, the Board
of Trustees of Insight Trust has approved the proposed reorganization of Insight
International into Phoenix Foreign Opportunities Fund ("Foreign Opportunities"),
a series of Phoenix Adviser Trust ("Adviser Trust"). Insight International and
Foreign Opportunities are sometimes referred to respectively in this
Prospectus/Proxy Statement individually as a "Fund" and collectively as the
"Funds."
In the reorganization, all of the assets of Insight International will be
acquired by Foreign Opportunities in exchange for Class A, Class C and Class I
shares of Foreign Opportunities and the assumption by Foreign Opportunities of
the liabilities of Insight International (the "Reorganization"). If the
Reorganization is approved, Class A, Class C and Class I shares of Foreign
Opportunities will be distributed to each shareholder in liquidation of Insight
International, and Insight International will be terminated as a series of
Insight Trust. You will
then hold that number of full and fractional shares of Foreign Opportunities
which have an aggregate net asset value equal to the aggregate net asset value
of your shares of Insight International.
Insight International is a separate diversified series of Insight Trust, a
Massachusetts business trust, which is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"). Foreign Opportunities is a separate diversified series of Adviser
Trust, a Delaware statutory trust, which is also an open-end management
investment company registered under the 1940 Act. The investment objective of
Insight International is similar to that of Foreign Opportunities, as follows:
- --------------------------------------------------------------------------------
Fund Investment Objective
---- --------------------
- ------------------------------------ -------------------------------------------
Insight International Capital appreciation. Income is a secondary
objective.
- ------------------------------------ -------------------------------------------
Foreign Opportunities Long-term capital appreciation.
- --------------------------------------------------------------------------------
The investment strategies for Insight International are similar to those
for Foreign Opportunities. Both Funds are managed by the same investment manager
using a substantially similar investment style.
This Prospectus/Proxy Statement explains concisely the information about
Foreign Opportunities that you should know before voting on the Plan. Please
read it carefully and keep it for future reference. Additional information
concerning each Fund and the Reorganization is contained in the documents
described below, all of which have been filed with the Securities and Exchange
Commission ("SEC"):
- -------------------------------------------------------------------------------------------------------------------
Information about Insight International: How to Obtain this Information:
- ---------------------------------------- -------------------------------
- --------------------------------------------------------------------- ---------------------------------------------
Prospectus of Insight Trust relating to Insight International, Copies are available upon request and
dated June 26, 2006, as supplemented without charge if you:
Statement of Additional Information of Insight Trust relating to o Visit PhoenixFunds.com or
Insight International, dated June 26, 2006, as supplemented PhoenixInvestments.com on the Internet;
Annual Report of Insight Trust relating to Insight International o Write to Phoenix Equity Planning
for the year ended December 31, 2005 Corporation, One American Row,
P.O. Box 150480, Hartford, CT
Semiannual Report of Insight Trust relating to Insight 06115-0480; or
International for the six months ended June 30, 2006
o Call (800) 243-1574 toll-free.
2
- --------------------------------------------------------------------- ---------------------------------------------
Information about Foreign Opportunities: How to Obtain this Information:
- ---------------------------------------- -------------------------------
- --------------------------------------------------------------------- ---------------------------------------------
Prospectus of Adviser Trust relating to Foreign Opportunities, Copies are available upon request and
dated May 15, 2006, as supplemented, which accompanies this without charge if you:
Prospectus/Proxy Statement
o Visit PhoenixFunds.com or
Statement of Additional Information of Adviser Trust relating to PhoenixInvestments.com on the Internet;
Foreign Opportunities, dated May 15, 2006, as supplemented
o Write to Phoenix Equity Planning
Annual Report of Adviser Trust relating to Foreign Opportunities Corporation, One American Row,
for the year ended February 28, 2006 P.O. Box 150480, Hartford, CT
06115-0480; or
Semiannual Report of Adviser Trust relating to Foreign
Opportunities for the six months ended August 31, 2006 o Call (800) 243-1574 toll-free.
- --------------------------------------------------------------------- ---------------------------------------------
Information about the Reorganization: How to Obtain this Information:
- ------------------------------------- -------------------------------
- --------------------------------------------------------------------- ---------------------------------------------
Statement of Additional Information dated February 9, 2007, Copies are available upon request and
which relates to this Prospectus/Proxy Statement and the without charge if you:
Reorganization
o Write to Phoenix Equity Planning
Corporation, One American Row,
P.O. Box 150480, Hartford, CT
06115-0480; or
o Call (800) 243-1574 toll-free.
- -------------------------------------------------------------------------------------------------------------------
You can also obtain copies of any of these documents without charge on the
EDGAR database on the SEC's Internet site at http://www.sec.gov. Copies are
available for a fee by electronic request at the following e-mail address:
publicinfo@sec.gov, or from the Public Reference Branch, Office of Consumer
Affairs and Information Services, Securities and Exchange Commission, 100 F
Street, N.E., Washington, D.C. 20549.
Information relating to Insight International contained in the Prospectus
of Insight Trust dated June 26, 2006 (SEC File No. 811-07447) is incorporated by
reference in this document. (This means that such information is legally
considered to be part of this Prospectus/Proxy Statement.) Information relating
to Foreign Opportunities contained in the Prospectus of Adviser Trust dated May
15, 2006 (SEC File No. 811-21371) also is incorporated by reference in this
document. The Statement of Additional Information dated February 9, 2007,
relating to this Prospectus/Proxy Statement and the Reorganization, which
includes the financial statements of Insight Trust relating to Insight
International for the year ended December 31, 2005 and the six months ended June
30, 2006, the financial statements of Adviser Trust relating to Foreign
Opportunities for the year ended February 28, 2006 and the six months ended
August 31, 2006,
3
and pro forma financial statements of Adviser Trust relating to Foreign
Opportunities for the twelve month period ended August 31, 2006, is incorporated
by reference in its entirety in this document.
- --------------------------------------------------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT DETERMINED THAT THE INFORMATION
IN THIS PROSPECTUS/PROXY STATEMENT IS ACCURATE OR ADEQUATE, NOR HAS IT APPROVED
OR DISAPPROVED THESE SECURITIES. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
AN INVESTMENT IN FOREIGN OPPORTUNITIES:
o is not a deposit of, or guaranteed by, any bank
o is not insured by the FDIC, the Federal Reserve Board or any other government
agency
o is not endorsed by any bank or government agency
o involves investment risk, including possible loss of the purchase payment of
your original investment
4
Table of Contents Page
----------------- ----
SUMMARY........................................................................6
Why is the Reorganization being proposed?.................................6
What are the key features of the Reorganization?..........................6
After the Reorganization, what shares of Foreign Opportunities
will I own?.............................................................6
How will the Reorganization affect me?....................................7
How do the Trustees recommend that I vote?................................7
Will I be able to purchase, exchange and redeem shares and
receive distributions in the same way?..................................8
How do the Funds' investment objectives, principal investment
strategies and risks compare?...........................................8
How do the Funds' fees and expenses compare?.............................11
How do the Funds' performance records compare?...........................16
Who will be the Adviser and Subadviser of my Fund after the
Reorganization? What will the advisory and subadvisory fees
be after the Reorganization?...........................................20
What will be the primary federal tax consequences
of the Reorganization?.................................................21
RISKS.........................................................................22
Are the risk factors for the Funds similar?..............................22
What are the primary risks of investing in each Fund?....................22
Are there any other risks of investing in each Fund?.....................26
INFORMATION ABOUT THE REORGANIZATION..........................................26
Reasons for the Reorganization...........................................26
Agreement and Plan of Reorganization.....................................27
Federal Income Tax Consequences..........................................29
Pro Forma Capitalization.................................................30
Distribution of Shares...................................................31
Purchase and Redemption Procedures.......................................32
Exchange Privileges......................................................32
Dividend Policy..........................................................33
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS...............................33
Form of Organization.....................................................33
Capitalization...........................................................33
Shareholder Liability....................................................34
Shareholder Meetings and Voting Rights...................................34
Liquidation..............................................................35
Liability and Indemnification of Trustees................................35
INFORMATION CONCERNING THE MEETING AND VOTING REQUIREMENTS....................36
Shareholder Information..................................................38
Control Persons and Principal Holders of Securities......................39
FINANCIAL STATEMENTS AND EXPERTS..............................................39
LEGAL MATTERS.................................................................40
ADDITIONAL INFORMATION........................................................40
OTHER BUSINESS................................................................40
Exhibit A--Form of Agreement and Plan of Reorganization......................A-1
5
SUMMARY
THIS SECTION SUMMARIZES THE PRIMARY FEATURES AND CONSEQUENCES
OF THE REORGANIZATION. IT MAY NOT CONTAIN ALL OF THE
INFORMATION THAT IS IMPORTANT TO YOU. TO UNDERSTAND THE
REORGANIZATION, YOU SHOULD READ THIS ENTIRE PROSPECTUS/PROXY
STATEMENT AND THE EXHIBITS.
This summary is qualified in its entirety by reference to the additional
information contained elsewhere in this Prospectus/Proxy Statement, the
Prospectuses and Statements of Additional Information relating to the Funds and
the form of Plan, which is attached to this Prospectus/Proxy Statement as
Exhibit A.
WHY IS THE REORGANIZATION BEING PROPOSED?
The Reorganization is part of a restructuring designed to eliminate the
offering of overlapping funds with similar investment objectives and similar
investment strategies within the Phoenix Funds complex, while simultaneously
creating economies of scale for the surviving funds that are intended to lower
fund expenses. The proposed Reorganization will allow shareholders of Insight
International to own a fund that is similar in style, and with a greater amount
of assets. While retaining the same investment management team, the
Reorganization into a single fund is expected to result in greater operating
efficiencies and lower fund expenses for shareholders of Insight International.
Foreign Opportunities has a similar investment objective and similar investment
strategies as Insight International, while its Class A shares have outperformed
the Class A shares of Insight International on a one- and five-year basis,
through December 31, 2006. The Reorganization should create better efficiencies
for the portfolio management team, which should benefit Foreign Opportunities
and its shareholders, and perhaps lower fees for Foreign Opportunities.
Therefore, the Trustees believe that the Reorganization is in the best interests
of Insight International and its shareholders.
WHAT ARE THE KEY FEATURES OF THE REORGANIZATION?
The Plan sets forth the key features of the Reorganization. For a complete
description of the Reorganization, see Exhibit A. The Plan generally provides
for the following:
o the transfer in-kind of all of the assets of Insight International to Foreign
Opportunities in exchange for Class A, Class C and Class I shares of Foreign
Opportunities;
o the assumption by Foreign Opportunities of all of the liabilities of Insight
International;
o the liquidation of Insight International by distribution of Class A, Class C
and Class I shares of Foreign Opportunities to Insight International's
shareholders; and
o the structuring of the Reorganization as a tax-free reorganization for
federal income tax purposes.
The Reorganization is expected to be completed on or about April 13, 2007.
AFTER THE REORGANIZATION, WHAT SHARES OF FOREIGN OPPORTUNITIES WILL I OWN?
If you own Class A, Class C or Class I shares of Insight International, you
will own Class A, Class C or Class I shares, respectively, of Foreign
Opportunities.
6
The new shares you receive will have the same total value as your shares of
Insight International, as of the close of business on the day immediately prior
to the Reorganization.
HOW WILL THE REORGANIZATION AFFECT ME?
It is anticipated that the Reorganization will benefit you as follows:
o COST SAVINGS: The total operating expenses of Foreign Opportunities, after
expense reductions with the adviser, are lower than those of Insight
International. Insight International's total operating expenses for the year
ended December 31, 2005, for Class A, Class C and Class I shares, after any
applicable expense waivers and restatement based on current class structure,
were 1.40%, 2.15% and 1.15%, respectively. Foreign Opportunities' total
operating expenses after expense reductions, and restatement based on current
fee structures for the year ended February 28, 2006, for Class A, Class C and
Class I shares were 1.35%, 2.10% and 1.10%, respectively. It is anticipated
that these expense levels will remain in effect for Foreign Opportunities on
a pro forma basis, based upon its anticipated level of assets immediately
following the Reorganization and with the expense reductions contractually in
place until June 2008.
o OPERATING EFFICIENCIES: Upon the Reorganization of Insight International into
Foreign Opportunities, operating efficiencies may be achieved by Foreign
Opportunities because it will have a greater level of assets. As of December
31, 2006, Insight International's net assets were approximately $290.8
million and Foreign Opportunities' net assets were approximately $353.6
million.
After the Reorganization, the value of your shares will depend on the
performance of Foreign Opportunities rather than that of Insight International.
The Trustees of Insight Trust and Adviser Trust believe that the Reorganization
will benefit both Insight International and Foreign Opportunities. All of the
costs of the Reorganization, including the costs of the Meeting, the proxy
solicitation or any adjourned session, will be paid by Insight International and
Phoenix Investment Counsel, Inc. ("PIC"), the investment adviser for the Fund,
with Insight International paying 30% of such costs and PIC paying 70%.
Like Insight International, Foreign Opportunities will declare and pay
dividends from net investment income semiannually and will distribute net
realized capital gains, if any, at least annually. These dividends and
distributions will continue to be automatically reinvested in additional Class
A, Class C and Class I shares of Foreign Opportunities or distributed in cash,
if you have so elected.
HOW DO THE TRUSTEES RECOMMEND THAT I VOTE?
The Trustees of Insight Trust, including the Trustees who are not
"interested persons" as such term is defined in the 1940 Act (the "Disinterested
Trustees"), have concluded that the Reorganization would be in the best interest
of Insight International and its shareholders, and that the shareholders'
interests will not be diluted as a result of the Reorganization. Accordingly,
the Trustees have submitted the Plan for approval of the shareholders of Insight
International.
7
THE TRUSTEES RECOMMEND THAT YOU VOTE FOR THE PLAN AND THE
REORGANIZATION CONTEMPLATED THEREBY
The Trustees of Adviser Trust, including the Trustees who are not
"interested persons" as such term is defined in the 1940 Act, also have
concluded that the Reorganization would be in the best interest of Foreign
Opportunities and its shareholders, and that the shareholders' interests will
not be diluted as a result of the Reorganization.
WILL I BE ABLE TO PURCHASE, EXCHANGE AND REDEEM SHARES AND RECEIVE DISTRIBUTIONS
IN THE SAME WAY?
The Reorganization will not affect your right to purchase and redeem
shares, to exchange shares or to receive distributions. After the
Reorganization, you will be able to purchase additional Class A, Class C and
Class I shares, as applicable, of Foreign Opportunities in the same manner as
you did for your shares of Insight International before the Reorganization. For
more information, see "Purchase and Redemption Procedures," "Exchange
Privileges" and "Dividend Policy" below.
HOW DO THE FUNDS' INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND
RISKS COMPARE?
The investment objective and investment strategies of Insight
International are similar to those of Foreign Opportunities. The investment
objective of each Fund is non-fundamental, which means that it may be changed by
vote of the Trustees and without shareholder approval, although Foreign
Opportunities' policy of investing 80% of its assets in international equity
securities may only be changed upon 60 days written notice to shareholders.
The following tables summarize a comparison of Insight International and
Foreign Opportunities with respect to their investment objectives and principal
investment strategies, as set forth in the Prospectuses and Statements of
Additional Information relating to the Funds.
- --------------------------------------------------------------------------------
INSIGHT INTERNATIONAL
- ------------------ -------------------------------------------------------------
Investment Capital appreciation. Income is a secondary objective.
Objective
- ------------------ -------------------------------------------------------------
Principal Normally invests at least 65% of its assets in non-U.S.
Investment equity securities, in at least three foreign countries,
Strategies including emerging market countries. At December 31, 2006,
the Fund was invested in issuers from approximately 16
countries.
Typically invests in securities of medium to large
capitalization companies, but is not limited to investing
in the securities of companies of any particular size.
Invests using a value approach. Uses a bottom-up stock and
business analysis approach, examining companies one at a
time,
- ------------------ -------------------------------------------------------------
8
- ------------------ -------------------------------------------------------------
regardless of size, country of organization, place of
principal business activity, or other similar selection
criteria. May invest substantially all of its assets in
common stocks if the Subadviser (as defined below) believes
that common stocks will appreciate in value. Seeks
undervalued companies whose businesses are highly profitable,
have consistent operating histories and financial
performance, and enjoy favorable long-term economic
prospects.
Seeks to achieve attractive absolute returns that exceed
the "normalized risk-free" rate, defined as the rate of
return available on long-term U.S. Government securities.
The Subadviser considers the riskiness of an investment to
be a function of the issuer's business rather than the
volatility of its stock price.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOREIGN OPPORTUNITIES
- ------------------ -------------------------------------------------------------
Investment Long-term capital appreciation.
Objective
- ------------------ -------------------------------------------------------------
Principal Under normal circumstances, at least 80% of net assets are
Investment invested in equity securities of issuers located outside of
Strategies the United States, or which derive a significant portion of
their business or profits outside of the United States
in three or more foreign countries, which may include
countries with "emerging markets." At December 31, 2006,
the Fund was invested in issuers from approximately 16
countries.
Will primarily hold securities of companies listed on a
foreign securities exchange or quoted on an established
foreign over-the-counter market, or American Depositary
Receipts ("ADRs").
Typically invests in securities of medium to large
capitalization companies, but is not limited to investing
in the securities of companies of any particular size.
Uses a bottom-up stock and business analysis approach,
examining companies one at a time, regardless of size,
country of organization, place of principal business
activity, or other similar selection criteria. May invest
substantially all of its assets in common stocks if the
Subadviser (as defined below) believes that common stocks
will appreciate in value. Seeks undervalued companies whose
businesses are highly profitable, have consistent operating
histories and financial performance, and enjoy favorable
long-term economic prospects.
- ------------------ -------------------------------------------------------------
9
- ------------------ -------------------------------------------------------------
Most of the Fund's assets are invested in equity
securities of issuers in countries that are generally
considered to have developed markets. The Subadviser
employs diversification by country and industry in an
attempt to reduce risk.
Seeks to achieve attractive absolute returns that exceed
the "normalized risk-free" rate, defined as the rate of
return available on long-term U.S. Government securities.
The Subadviser considers the riskiness of an investment to
be a function of the issuer's business rather than the
volatility of its stock price.
In addition to common stocks and securities that are
convertible into common stocks, may invest in shares of
closed-end investment companies that invest in securities
that are consistent with the Fund's investment objective
and policies.
- --------------------------------------------------------------------------------
The investment strategies for Insight International are similar to those
for Foreign Opportunities. Both Funds are managed by the same investment manager
using a substantially similar investment style.
The principal risks of investing in Foreign Opportunities are similar to
those of investing in Insight International. They include:
o Market risk - the Fund's share price can fall because of weakness in the
broad market, a particular industry, or specific holdings.
o Equity securities investment risk - in general the prices of equity
securities are more volatile than those of fixed income securities.
o Foreign investment risk - investments in foreign securities involve risks
relating to political, social and economic developments abroad, as well as
risks resulting from differences between the regulations to which U.S. and
foreign issuers are subject.
o Foreign currency risk - changes in foreign exchange rates will affect the
value of those securities denominated or quoted in currencies other than the
U.S. dollar.
o Emerging market investment risk - investment in less-developed countries
whose markets are still emerging generally presents risks in greater degree
than those presented by investment in foreign issuers based in countries with
developed securities markets and more advanced regulatory systems.
10
o Market capitalization risk - investments primarily in issuers in one market
capitalization category (large, medium or small) carry the risk that due to
current market conditions that category may be out of favor; investments in
medium and small capitalization companies may be subject to special risks
which cause them to be subject to greater price volatility and more
significant declines in market downturns than securities of larger companies;
investments in small capitalization companies may be subject to more risk
than investments in medium capitalization companies.
o Value investing risk - involves the risk that the value of the security will
not be recognized for an unexpectedly long period of time, and that the
security is not undervalued but is appropriately priced due to fundamental
problems not yet apparent.
o Volatility risk - performance may be affected by unanticipated event that
cause major price changes in individual securities or market sectors.
Insight International and Foreign Opportunities may employ defensive
investment strategies when, in the belief of the adviser or the subadviser, as
the case may be, adverse market conditions warrant doing so. Under such
circumstances, the Funds may invest in domestic and foreign short-term money
market instruments, including government obligations, certificates of deposit,
bankers' acceptances, time deposits, commercial paper, short-term corporate debt
securities and repurchase agreements. These strategies, which would be employed
only in seeking to avoid losses, are inconsistent with the Funds' principal
investment objectives and strategies, and could result in lower returns and loss
of market opportunities.
For a detailed discussion of the Funds' risks, see the section entitled
"Risks" below.
The Funds have other investment policies, practices and restrictions which,
together with their related risks, are also set forth in the Prospectuses and
Statements of Additional Information of the Funds.
Because Insight International and Foreign Opportunities have similar
investment objectives and similar investment strategies, it is not anticipated
that the securities held by Insight International will be sold in significant
amounts in order to comply with the policies and investment practices of Foreign
Opportunities in connection with the Reorganization. If any such sales occur,
the transaction costs will be borne by Foreign Opportunities. Such costs are
ultimately borne by the Fund's shareholders.
HOW DO THE FUNDS' FEES AND EXPENSES COMPARE?
Insight International and Foreign Opportunities each offers three
classes of shares (Class A, Class C and Class I). You will not pay any initial
or deferred sales charge in connection with the Reorganization.
The following tables allow you to compare the various fees and expenses
that you may pay for buying and holding Class A, Class C and Class I shares of
each of the Funds. The columns entitled "Foreign Opportunities (Pro Forma)" show
you what fees and expenses are estimated to be assuming the Reorganization takes
place.
11
The amounts for the Class A, Class C and Class I shares of Insight
International and Foreign Opportunities set forth in the following tables and in
the examples are based on the expenses for the twelve month periods ended
December 31, 2005 and February 28, 2006, respectively. The amounts for Class A,
Class C and Class I shares of Foreign Opportunities (Pro Forma) set forth in the
following tables and in the examples are based on what the estimated expenses of
Foreign Opportunities would have been for the twelve month period ended August
31, 2006, assuming the Reorganization had taken place on September 1, 2005.
Shareholder Fees (fees paid directly from your investment)
----------------------------------------------------------
- --------------------------------------------------------------------------------
FOREIGN
INSIGHT FOREIGN OPPORTUNITIES
INTERNATIONAL OPPORTUNITIES (PRO FORMA)
Class A Class A Class A
------- ------- -------
- ---------------------------- ----------------- ----------------- ---------------
Maximum Sales Charge (Load) 5.75% 5.75% 5.75%
Imposed on Purchases (as a
percentage of offering
price)
- ---------------------------- ----------------- ----------------- ---------------
Maximum Deferred Sales None(a) None(a) None(a)
Charge (Load) (as a
percentage of the lesser of
the value redeemed or the
amount invested)
- ---------------------------- ----------------- ----------------- ---------------
Maximum Sales Charge (Load) None None None
Imposed on Reinvested
Dividends
- ---------------------------- ----------------- ----------------- ---------------
Redemption Fee None None None
- ---------------------------- ----------------- ----------------- ---------------
Exchange Fee None None None
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOREIGN
INSIGHT FOREIGN OPPORTUNITIES
INTERNATIONAL OPPORTUNITIES (PRO FORMA)
Class C Class C Class C
------- ------- -------
- ---------------------------- ----------------- ----------------- ---------------
Maximum Sales Charge (Load) None None None
Imposed on Purchases (as a
percentage of offering
price)
- ---------------------------- ----------------- ----------------- ---------------
12
- --------------------------------------------------------------------------------
FOREIGN
INSIGHT FOREIGN OPPORTUNITIES
INTERNATIONAL OPPORTUNITIES (PRO FORMA)
Class C Class C Class C
------- ------- -------
- ---------------------------- ----------------- ----------------- ---------------
Maximum Deferred Sales 1.00%(b) 1.00%(b) 1.00%(b)
Charge (Load)
- ---------------------------- ----------------- ----------------- ---------------
(as a percentage of the
lesser of the value redeemed
or the amount invested)
- ---------------------------- ----------------- ----------------- ---------------
Maximum Sales Charge (Load) None None None
Imposed on Reinvested
Dividends
- ---------------------------- ----------------- ----------------- ---------------
Redemption Fee None None None
- ---------------------------- ----------------- ----------------- ---------------
Exchange Fee None None None
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOREIGN
INSIGHT FOREIGN OPPORTUNITIES
INTERNATIONAL OPPORTUNITIES (PRO FORMA)
Class I Class I Class I
------- ------- -------
- ---------------------------- ----------------- ----------------- ---------------
Maximum Sales Charge (Load) None None None
Imposed on Purchases (as a
percentage of offering
price)
- ---------------------------- ----------------- ----------------- ---------------
Maximum Deferred Sales None None None
Charge (Load) (as a
percentage of the lesser of
the value redeemed or the
amount invested)
- ---------------------------- ----------------- ----------------- ---------------
Maximum Sales Charge (Load) None None None
Imposed on Reinvested
Dividends
- ---------------------------- ----------------- ----------------- ---------------
Redemption Fee None None None
- ---------------------------- ----------------- ----------------- ---------------
Exchange Fee None None None
- --------------------------------------------------------------------------------
13
Fees and Expenses (as a percentage of average daily net assets)
- ---------------------------------------------------------------
- --------------------------------------------------------------------------------
FOREIGN
INSIGHT FOREIGN OPPORTUNITIES
INTERNATIONAL OPPORTUNITIES (PRO FORMA)
Class A Class A Class A
------- ------- -------
- ---------------------------- ----------------- ----------------- ---------------
Management Fees 0.85% (g) 0.85% 0.85%
- ---------------------------- ----------------- ----------------- ---------------
Distribution and 0.25% 0.25% 0.25%
Shareholder Servicing
(12b-1) Fees(c)
- ---------------------------- ----------------- ----------------- ---------------
Other Expenses 0.30% 0.37% 0.30%
- ---------------------------- ----------------- ----------------- ---------------
Total Annual Fund 1.40% 1.47%(g) 1.40%
Operating Expenses
Before Expense Waiver
- ---------------------------- ----------------- ----------------- ---------------
Expense Reduction --- (0.12)% (d) (0.05)% (d)
- ---------------------------- ----------------- ----------------- ---------------
Total Annual Fund 1.40% 1.35% 1.35%
Operating Expenses After
Expense Waiver
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOREIGN
INSIGHT FOREIGN OPPORTUNITIES
INTERNATIONAL OPPORTUNITIES (PRO FORMA)
Class C Class C Class C
------- ------- -------
- ---------------------------- ----------------- ----------------- ---------------
Management Fees 0.85% (g) 0.85% 0.85%
- ---------------------------- ----------------- ----------------- ---------------
Distribution and 1.00% 1.00% 1.00%
Shareholder Servicing
(12b-1) Fees(c)
- ---------------------------- ----------------- ----------------- ---------------
Other Expenses 0.30% 0.38% 0.30%
- ---------------------------- ----------------- ----------------- ---------------
Total Annual Fund 2.15% 2.23%(g) 2.15%
Operating Expenses
Before Expense Waiver
- ---------------------------- ----------------- ----------------- ---------------
Expense Reduction --- (0.13)% (d) (0.05)% (d)
- ---------------------------- ----------------- ----------------- ---------------
Total Annual Fund 2.15% 2.10% 2.10%
Operating Expenses After
Expense Waiver
- --------------------------------------------------------------------------------
14
- --------------------------------------------------------------------------------
FOREIGN
INSIGHT FOREIGN OPPORTUNITIES
INTERNATIONAL OPPORTUNITIES (PRO FORMA)
Class I Class I Class I
------- ------- -------
- ---------------------------- ----------------- ----------------- ---------------
Management Fees 0.85% (g) 0.85% 0.85%
- ---------------------------- ----------------- ----------------- ---------------
Distribution and None None None
Shareholder Servicing
(12b-1) Fees(c)
- ---------------------------- ----------------- ----------------- ---------------
Other Expenses 0.35%(f) 0.37% 0.30%
- ---------------------------- ----------------- ----------------- ---------------
Total Annual Fund 1.20% 1.22%(g) 1.15%
Operating Expenses
Before Expense Waiver
- ---------------------------- ----------------- ----------------- ---------------
Expense Reduction --- (0.12)%(d) (0.05)%(d)
- ---------------------------- ----------------- ----------------- ---------------
Waiver of Shareholder (0.05)%(e) --- ---
Servicing Fees
- ---------------------------- ----------------- ----------------- ---------------
Total Annual Fund 1.15% 1.10% 1.10%
Operating Expenses After
Expense Waiver
- --------------------------------------------------------------------------------
(a) A contingent deferred sales charge of 1% may apply on certain redemptions
made within one year following purchases on which a finder's fee has been paid.
The one-year period begins on the last day of the month preceding the month in
which the purchase was made.
(b) The deferred sales charge is imposed on Class C shares redeemed during the
first year only.
(c) Distribution and Shareholder Servicing Fees represent an asset-based sales
charge that, for a long-term shareholder, over time may be higher than the
maximum front-end sales charge permitted by the NASD.
(d) Foreign Opportunities' investment adviser has contractually agreed to limit
the Fund's total operating expenses (excluding interest, taxes and extraordinary
expenses), through June 30, 2008, so that such expenses do not exceed 1.35% for
Class A shares, 2.10% for Class C shares and 1.10% for Class I shares. The
adviser will not seek to recapture any operating expenses reimbursed under this
arrangement.
(e) Insight Trust's distributor has contractually agreed to waive the Class I
shares shareholder servicing fees through April 30, 2007.
(f) Other Expenses includes fees of 0.05% under the Service Plan for Class I
shares, which provide for the Fund to pay service fees to the Distributor, but
do not authorize payments to be made for distribution purposes and they have not
been adopted under Rule 12b-1 of the 1940 Act.
(g) Fund expenses have been restated to reflect current fee structure.
The tables below show examples of the total expenses you would pay on a
$10,000 investment over one-, three-, five- and ten-year periods. The examples
are intended to help you compare the cost of investing in Insight International
versus Foreign Opportunities and Foreign Opportunities (Pro Forma), assuming the
Reorganization takes place. The examples assume a 5% average annual return, that
you redeem all of your shares at the end of each time period and that you
reinvest all of your dividends. The following tables also assume that total
annual operating expenses remain the same and that all contractual expense
reductions or waivers
15
remain in effect for the periods indicated only. The examples are for
illustration only, and your actual costs may be higher or lower.
Examples of Fund Expenses
- --------------------------------------------------------------------------------
Class A
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
INSIGHT INTERNATIONAL $709 $993 $1,297 $2,158
FOREIGN OPPORTUNITIES $705 $1,002 $1,321 $2,223
FOREIGN OPPORTUNITIES $705 $989 $1,295 $2,158
(PRO FORMA)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
INSIGHT INTERNATIONAL $318 $673 $1,154 $2,483
FOREIGN OPPORTUNITIES $313 $685 $1,184 $2,557
FOREIGN OPPORTUNITIES $313 $668 $1,150 $2,479
(PRO FORMA)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class I
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
INSIGHT INTERNATIONAL $117 $376 $655 $1,437
FOREIGN OPPORTUNITIES $112 $376 $659 $1,468
FOREIGN OPPORTUNITIES $112 $360 $628 $1,393
(PRO FORMA)
- --------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
- --------------------------------------------------------------------------------
Class C
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
INSIGHT INTERNATIONAL $218 $673 $1,154 $2,483
FOREIGN OPPORTUNITIES $213 $685 $1,184 $2,557
FOREIGN OPPORTUNITIES $213 $668 $1,150 $2,479
(PRO FORMA)
- --------------------------------------------------------------------------------
HOW DO THE FUNDS' PERFORMANCE RECORDS COMPARE?
The following charts show how the Class I shares of Insight International
and Class A shares of Foreign Opportunities, each Fund's oldest class, have
performed in the past. Foreign
16
Opportunities commenced operations on October 13, 2003, after taking over the
assets and operations of Vontobel International Equity Fund (the "Predecessor
Fund"). The performance shown in the tables below reflects the performance of
the Class A shares of the Predecessor Fund prior to October 13, 2003, and the
Fund's performance since that date. Foreign Opportunities appointed a new
adviser on June 20, 2005, and the performance information set forth below
reflects the management of the previous adviser from October 13, 2003 to June
20, 2005. Class I shares of Foreign Opportunities have been in existence only
since May 2006, so no performance information is included for this share class
since it has not had a full calendar year of investment operations.
Prior to May 18, 2006, Insight International's investment program and
operations were managed by a different adviser and subadviser; therefore, the
performance information set forth below reflects the management of the previous
adviser and subadviser prior to this date. Class C shares of Insight
International have been in existence only since June 2006, so no performance
information is included for this share class since it has not had a full
calendar year of investment operations. Past performance, before and after
taxes, is not an indication of future results.
Year-by-Year Total Return (%)
-----------------------------
The charts below show the percentage gain or loss in each full calendar
year for the Class I shares of Insight International since inception on February
23, 1996, and for the Class A shares of Foreign Opportunities over a ten-year
period.
These charts should give you a general idea of the risks of investing in
each Fund by showing how the Fund's return, as applicable, has varied from
year-to-year. These charts include the effects of fund expenses. Each Fund's
average annual returns in the charts below do not reflect the deduction of any
sales charges. The returns would have been less than those shown if sales
charges were deducted. Each Fund can also experience short-term performance
swings as indicated in the high and low quarter information at the bottom of
each chart.
INSIGHT INTERNATIONAL
[Graphic Omitted]
CALENDAR YEAR ANNUAL RATE %
1997 -4.87%
1998 -4.64%
1999 27.33%
2000 -9.34%
2001 -19.29%
2002 -14.41%
2003 40.44%
2004 16.47%
2005 13.59%
2006 29.21%
High Quarter: 2nd - 2003 20.97%
Low Quarter: 3rd - 2002 -20.03%
17
FOREIGN OPPORTUNITIES
[Graphic Omitted]
CALENDAR YEAR ANNUAL RATE %
1997 9.18%
1998 16.77%
1999 46.50%
2000 -18.70%
2001 -29.17%
2002 -7.92%
2003 30.16%
2004 28.23%
2005 16.51%
2006 29.30%
High Quarter: 4th - 1999 34.02%
Low Quarter: 1st - 2001 -18.82%
The next set of tables lists the average annual total return by class of
Insight International and Foreign Opportunities for the past one, five and ten
years (through December 31, 2006). The after-tax returns shown are for Class I,
the oldest class of Insight International, and for Class A, the oldest class of
Foreign Opportunities; after-tax returns for other classes of the Funds will
vary. These tables include the effects of sales charges (where applicable) and
fund expenses and are intended to provide you with some indication of the risks
of investing in each Fund by comparing its performance with an appropriate
widely recognized index of securities, a description of which can be found
following the table. An index does not reflect fees, expenses or any taxes. It
is not possible to invest directly in an index.
Average Annual Total Return (for the period ended 12/31/2006)(1)
----------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
INSIGHT INTERNATIONAL 1 Year 5 Years 10 Years Since
- --------------------- Ended Ended Ended Inception
12/31/06 12/31/06 12/31/06 (Class A)
-------- -------- --------
- ----------------------------------- ---------------- --------------- ---------------- ---------------
Class I shares
- ----------------------------------- ---------------- --------------- ---------------- ---------------
Return Before Taxes % % %
- ----------------------------------- ---------------- --------------- ---------------- ---------------
Return After Taxes on % % %
Distributions(2)
- ----------------------------------- ---------------- --------------- ---------------- ---------------
Return After Taxes on % % %
Distributions and Sale of
Fund Shares(2)(3)
- ----------------------------------- ---------------- --------------- ---------------- ---------------
Class A shares 3/4/99
- ----------------------------------- ---------------- --------------- ---------------- ---------------
Return Before taxes % % -- %
- ----------------------------------- ---------------- --------------- ---------------- ---------------
Morgan Stanley Capital % % % %
International EAFE(R)
Index
- -----------------------------------------------------------------------------------------------------
18
- -----------------------------------------------------------------------------------------------------
FOREIGN OPPORTUNITIES 1 Year 5 Years 10 Years Since
- --------------------- Ended Ended Ended Inception
12/31/06 12/31/06 12/31/06 (Class C)
-------- -------- --------
- ----------------------------------- ---------------- --------------- ---------------- ---------------
Class A shares
- ----------------------------------- ---------------- --------------- ---------------- ---------------
Return Before Taxes % % %
- ----------------------------------- ---------------- --------------- ---------------- ---------------
Return After Taxes on % % %
Distributions(2)
- ----------------------------------- ---------------- --------------- ---------------- ---------------
Return After Taxes on % % %
Distributions and Sale of
Fund Shares(2)
- ----------------------------------- ---------------- --------------- ---------------- ---------------
Class C shares 10/10/03
- ----------------------------------- ---------------- --------------- ---------------- ---------------
Return Before Taxes % -- -- %
- ----------------------------------- ---------------- --------------- ---------------- ---------------
S&P 500(R) Index % % % %
- ----------------------------------- ---------------- --------------- ---------------- ---------------
MSCI EAFE(R) Index (Net) % % % %(4)
- -----------------------------------------------------------------------------------------------------
(1) The Funds' average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the Fund's Class A shares
and, if applicable, a full redemption in the Fund's Class C shares.
(2) After-tax returns are calculated using the historical highest individual
federal marginal income tax rates, and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on the investor's tax
situation and may differ from those shown. The after-tax returns shown are
not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
(3) If the Fund incurs a loss, which generates a tax benefit, the Return After
Taxes on Distributions and Sale of Fund Shares may exceed the Fund's other
return figures.
(4) Index performance since October 31, 2003.
--------------------------
The S&P 500(R) Index is a free-float market capitalization-weighted index
of 500 of the largest U.S. companies. The MSCI EAFE(R) Index is a free
float-adjusted market capitalization index that measures developed foreign
market equity performance, excluding the U.S. and Canada. The MSCI EAFE(R) Index
is calculated on a total-return basis with gross dividends reinvested. Both the
S&P 500(R) Index and the MSCI EAFE(R) Index (Net) are calculated on a
total-return basis with net dividends reinvested. Each index is unmanaged and
not available for
19
direct investment; therefore, its performance does not reflect the fees,
expenses or taxes associated with the active management of an actual portfolio.
For a detailed discussion of the manner of calculating total return, please
see the Funds' Statements of Additional Information. Generally, the calculations
of total return assume the reinvestment of all dividends and capital gain
distributions on the reinvestment date and the deduction of all recurring
expenses that were charged to shareholders' accounts.
Important information about Foreign Opportunities is also contained in
management's discussion of Foreign Opportunities' performance, which appears in
the most recent Annual Report of Adviser Trust relating to Foreign
Opportunities.
WHO WILL BE THE ADVISER AND SUBADVISER OF MY FUND AFTER THE REORGANIZATION? WHAT
WILL THE ADVISORY AND SUBADVISORY FEES BE AFTER THE REORGANIZATION?
Management of the Funds
-----------------------
The overall management of Insight International and Foreign Opportunities
is the responsibility of, and is supervised by, the Boards of Trustees of
Insight Trust and Adviser Trust, respectively.
Adviser
-------
Phoenix Investment Counsel, Inc. (the "Adviser" or "PIC") is the investment
adviser for the Funds and is responsible for managing their investment program.
The Adviser selects and pays the fees of the Subadviser to manage the Funds and
monitors the Subadviser's management of the Funds.
Facts about the Adviser:
- --------------------------------------------------------------------------------
o The Adviser is an indirect, wholly-owned subsidiary of The Phoenix Companies,
Inc. and has acted as an investment adviser for over 70 years.
o The Adviser acts as the investment adviser for over 60 mutual funds and as
adviser to institutional clients, with assets under management of
approximately $__ billion as of December 31, 2006.
o The Adviser is located at 56 Prospect Street, Hartford, Connecticut 06115.
- --------------------------------------------------------------------------------
Subadviser
----------
Vontobel Asset Management, Inc. (the "Subadviser") is the investment
subadviser to the Funds. Pursuant to Subadvisory Agreements with the Adviser,
the Subadviser is responsible for the day-to-day management of the Funds'
portfolios.
20
Facts about the Subadviser:
- --------------------------------------------------------------------------------
o The Subadviser is a wholly-owned and controlled subsidiary of Vontobel
Holding AG, a Swiss bank holding company having its registered offices in
Zurich Switzerland, and has provided investment advisory services to mutual
fund clients since 1990.
o The Subadviser had approximately $6.9 billion in assets under management as
of December 31, 2006.
o The Subadviser is located at 450 Park Avenue, New York, NY 10022.
- --------------------------------------------------------------------------------
Foreign Opportunities and the Adviser have received an exemptive order from
the Securities and Exchange Commission that permits the Adviser, subject to
certain conditions, and without the approval of shareholders, to: (a) employ a
new unaffiliated subadviser for a fund pursuant to the terms of a new
subadvisory agreement, in each case either as a replacement for an existing
subadviser or as an additional subadviser; (b) change the terms of any
subadvisory agreement; and (c) continue the employment of an existing subadviser
on the same subadvisory agreement terms where an agreement has been assigned
because of a change in control of the subadviser. In such circumstances,
shareholders would receive notice of such action, including the information
concerning the new subadviser that normally is provided in a proxy statement.
Portfolio Management
--------------------
Investment and trading decisions for the Funds are made by Rajiv Jain. Mr.
Jain is a Senior Vice President and Managing Director of the Subadviser. Mr.
Jain joined the Subadviser in 1994 as an equity analyst and associate manager of
its international equity portfolios. Mr. Jain has been the portfolio manager of
the Foreign Opportunities (or its predecessor) since February 2002, and
portfolio manager of Insight International since May 2006.
Advisory Fees
-------------
For its management and supervision of the daily business affairs of Foreign
Opportunities, the Adviser is entitled to receive a monthly fee that is accrued
daily at the annual rate of 0.85% against the value of Foreign Opportunities'
net assets.
Subadvisory Fees
----------------
Under the terms of the Subadvisory Agreement, the Subadviser is paid by the
Adviser for providing advisory services to Foreign Opportunities. Foreign
Opportunities does not pay a fee to the Subadviser. The Adviser pays the
Subadviser a subadvisory fee calculated at the annual rate of 0.425% against the
value of Foreign Opportunities' net assets.
WHAT WILL BE THE PRIMARY FEDERAL TAX CONSEQUENCES OF THE REORGANIZATION?
Prior to or at the completion of the Reorganization, Insight International
and Foreign Opportunities will have received an opinion from the law firm of
McDermott Will & Emery LLP that the Reorganization contemplated by the Plan
shall, for federal income tax purposes, qualify
21
as a tax-free reorganization described in section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and that Insight International and
Foreign Opportunities each will be a "party to a reorganization," within the
meaning of section 368(b) of the Code.
As a result, for federal income tax purposes, no gain or loss will be
recognized by Insight International or its shareholders as a result of receiving
shares of Foreign Opportunities in connection with the Reorganization. The
holding period and aggregate tax basis of the shares of Foreign Opportunities
that are received by the shareholders of Insight International will be the same
as the holding period and aggregate tax basis of the shares of Insight
International previously held by such shareholders, provided that such shares of
Insight International are held as capital assets. In addition, no gain or loss
will be recognized by Foreign Opportunities upon the receipt of the assets of
Insight International in exchange for shares of Foreign Opportunities and the
assumption by Foreign Opportunities of Insight International's liabilities, and
the holding period and tax basis of the assets of Insight International in the
hands of Foreign Opportunities as a result of the Reorganization will be the
same as in the hands of Insight International immediately prior to the
Reorganization.
RISKS
ARE THE RISK FACTORS FOR THE FUNDS SIMILAR?
Yes. The risk factors are similar due to the similar investment objectives
and similar investment policies of Insight International and Foreign
Opportunities. The risks of Foreign Opportunities are described in greater
detail in that Fund's Prospectus.
WHAT ARE THE PRIMARY RISKS OF INVESTING IN EACH FUND?
An investment in each Fund is subject to certain risks. There is no
assurance that investment performance of either Fund will be positive or that
the Funds will meet their investment objectives. The following tables and
discussions highlight the primary risks associated with investment in each of
the Funds.
- --------------------------------------------------------------------------------
Each of the Funds is subject to MARKET RISK, EQUITY
SECURITIES INVESTMENT Risk, FOREIGN INVESTMENT RISK
and FOREIGN CURRENCY RISK.
- ------------------------- ------------------------------------------------------
INSIGHT INTERNATIONAL Normally invests at least 65% of its assets in
non-U.S. equity securities.
- ------------------------- ------------------------------------------------------
FOREIGN OPPORTUNITIES Normally, at least 80% of net assets are invested
in equity securities of issuers located outside of
the United States, or which derive a significant
portion of their business or profits outside of the
United States.
- --------------------------------------------------------------------------------
MARKET RISK
The value of your shares is based on the market value of each Fund's
investments. However, the value of the Funds' investments that support your
share value can decrease as well
22
as increase. If between the time you purchase shares and the time you sell
shares the value of the Fund's investment decreases, you will lose money. If
your financial circumstances are likely to require you to sell your shares at
any particular time, rather than holding them indefinitely, you run the risk
that your sales of shares will occur when share values have declined.
The value of the Funds' investments can decrease for a number of reasons.
For example, changing economic conditions may cause a decline in the value of
many or most investments. Particular industries can face poor market conditions
for their products or services so that companies engaged in those businesses do
not perform as well as companies in other industries. Interest rate changes may
improve prospects for certain types of businesses and they may worsen prospects
for others. Share values also can decline if the specific companies selected for
fund investment fail to perform as expected, regardless of general economic
trends, industry trends, interest rates and other economic factors. When
companies owned by the Funds encounter negative conditions, they may be unable
to continue to pay dividends or interest at expected levels.
There is also the possibility that the specific securities held by the
Funds will underperform other funds in the same asset class or benchmark that is
representative of the general performance of the asset class because of the
Subadviser's choice of portfolio securities.
EQUITY SECURITIES INVESTMENT RISK
In general, prices of equity securities are more volatile than those of
fixed income securities. The prices of equity securities will rise and fall in
response to a number of different factors. In particular, equity securities will
respond to events that affect entire financial markets or industries (changes in
inflation or consumer demand, for example) and to events that affect particular
issuers (news about the success or failure of a new product, for example).
FOREIGN INVESTMENT RISK
Foreign investments could be more difficult to sell than U. S. investments.
They also may subject the Funds to risks different from investing in domestic
securities. Investments in foreign securities involve difficulties in receiving
or interpreting financial and economic information, possible imposition of
taxes, higher brokerage and custodian fees, possible currency exchange controls
or other government restrictions, including possible seizure or nationalization
of foreign deposits or assets. Foreign securities may also be less liquid and
more volatile than U.S. securities. There may also be difficulty in invoking
legal protections across borders.
Some foreign securities are issued by companies organized outside the
United States and are traded only or primarily in trading markets outside the
United States. These foreign securities can be subject to most, if not all, of
the risks of foreign investing. Some foreign securities are issued by companies
organized outside the United States but are traded in U.S. securities markets
and are denominated in U.S. dollars. For example, American Depositary Receipts
and shares of some large foreign-based companies are traded on principal U.S.
exchanges. Other securities are not traded in the United States but are
denominated in U.S. dollars. These securities are not subject to all the risks
of foreign investing. For example,
23
foreign trading market or currency risks will not apply to dollar-denominated
securities traded in U.S. securities markets.
FOREIGN CURRENCY RISK
The Funds may invest assets in securities denominated in foreign
currencies. Changes in foreign exchange rates will affect the value of those
securities denominated or quoted in currencies other than the U.S. dollar. The
forces of supply and demand in the foreign exchange markets determine exchange
rates and these forces are in turn affected by a range of economic, political,
financial, governmental and other factors. Exchange rate fluctuations can affect
the Funds' net asset value (share price) and dividends either positively or
negatively depending upon whether foreign currencies are appreciating or
depreciating in value relative to the U.S. dollar. Exchange rates fluctuate over
both the short and long terms. In addition, when certain foreign countries
experience economic difficulties, there is an increased risk that the foreign
government may impose restrictions on the free exchange of its currency.
- --------------------------------------------------------------------------------
Each of the Funds is subject to EMERGING MARKET
INVESTMENT RISK.
- ------------------------ -------------------------------------------------------
INSIGHT INTERNATIONAL Normally invests in non-U.S. equity securities,
including emerging market countries.
- ------------------------ -------------------------------------------------------
FOREIGN OPPORTUNITIES Normally invests in equity securities of issuers
located outside of the United States, which may
include countries with "emerging markets."
- --------------------------------------------------------------------------------
The Funds may invest in companies located in emerging-market countries and
regions. Investment in less-developed countries whose markets are still emerging
generally presents risks in greater degree than those presented by investment in
foreign issuers based in countries with developed securities markets and more
advanced regulatory systems. Prior governmental approval of foreign investments
may be required under certain circumstances in some developing countries, and
the extent of foreign investment in domestic companies may be subject to
limitation in other developing countries. The charters of individual countries
may impose limitation on foreign ownership to prevent, among other concerns,
violation of foreign investment limitations.
The economies of developing countries generally are heavily dependent upon
international trade and, accordingly, have been and may continue to be adversely
affected by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been, and may
continue to be, adversely affected by economic conditions in these countries.
24
- --------------------------------------------------------------------------------
Each of the Funds is subject to MARKET
CAPITALIZATION RISK.
- ------------------------ -------------------------------------------------------
INSIGHT INTERNATIONAL Typically invests in securities of medium to large
capitalization companies, but is not limited to
investing in the securities of companies of any
particular size.
- ------------------------ -------------------------------------------------------
FOREIGN OPPORTUNITIES Typically invests in securities of medium to large
capitalization companies, but is not limited to
investing in the securities of companies of any
particular size.
- --------------------------------------------------------------------------------
Stocks fall into three broad market capitalization categories--large,
medium and small. Investing primarily in one category carries the risk that due
to current market conditions that category may be out of favor. If valuations of
large capitalization companies appear to be greatly out of proportion to the
valuations of small- or medium-capitalization companies, investors may migrate
to the stocks of small- and mid-sized companies causing a Fund that invests in
these companies to increase in value more rapidly than a Fund that invests in
larger, fully-valued companies. Larger, more established companies may also be
unable to respond quickly to new competitive challenges such as changes in
technology and consumer tastes. Many larger companies also may not be able to
attain the high growth rate of successful smaller companies, especially during
extended periods of economic expansion. Investing in medium and small
capitalization companies may be subject to special risks associated with
narrower product lines, more limited financial resources, smaller management
groups, and a more limited trading market for their stocks as compared with
larger companies. Securities of smaller capitalization issuers may therefore be
subject to greater price volatility and may decline more significantly in market
downturns than securities of larger companies. In some cases, these companies
may be relatively new issuers (i.e., those having continuous operation histories
of less than three years) which carries other risks in addition to the risks of
other medium and small capitalization companies. New issuers may be more
speculative because such companies are relatively unseasoned. These companies
will often be involved in the development or marketing of a new product with no
established market, which could lead to significant losses.
- --------------------------------------------------------------------------------
Each of the Funds is subject to VALUE INVESTING RISK.
- ------------------------ -------------------------------------------------------
INSIGHT INTERNATIONAL Seeks undervalued companies whose businesses are
highly profitable, have consistent operating histories
and financial performance, and enjoy favorable
long-term economic prospects.
- ------------------------ -------------------------------------------------------
FOREIGN OPPORTUNITIES Seeks undervalued companies whose businesses are
highly profitable, have consistent operating
histories and financial performance, and enjoy
favorable long-term economic prospects.
- --------------------------------------------------------------------------------
Different investment styles tend to shift in and out of favor depending
upon market and economic conditions as well as investor sentiment. A Fund may
outperform or underperform other funds that employ a different investment style.
Value stocks are those which are undervalued in comparison to their peers due to
adverse business developments or other factors. Value investing carries the risk
that the market will not recognize a security's inherent value for a long time,
or that a stock judged to be undervalued may actually be appropriately priced or
overvalued. Value oriented funds will typically underperform when growth
investing is in favor.
25
ARE THERE ANY OTHER RISKS OF INVESTING IN EACH FUND?
Each Fund is also subject to Volatility Risk, which involves the risk that
performance will be affected by unanticipated events (e.g., significant
earnings, shortfalls or gains, war, or political events) that cause major price
changes in individual securities or market sectors.
INFORMATION ABOUT THE REORGANIZATION
REASONS FOR THE REORGANIZATION
The Reorganization is part of a restructuring designed to eliminate the
offering of overlapping funds with similar investment objectives and similar
investment strategies within the Phoenix Funds complex, while simultaneously
creating economies of scale for the surviving funds that are intended to lower
fund expenses. The proposed Reorganization will allow shareholders of Insight
International to own a fund that is similar in style, and with a greater amount
of assets. While retaining the same investment management team, the
Reorganization is expected to result in lower fund expenses for shareholders of
Insight International. Foreign Opportunities has a similar investment objective
and similar investment strategies as Insight International, while its Class A
shares have outperformed the Class A shares of Insight International on a one-
and five-year basis, through December 31, 2006. The Reorganization should create
better efficiencies for the portfolio management team, which should benefit
Foreign Opportunities and its shareholders, and perhaps lower fees for Foreign
Opportunities.
At a regular meeting held on November 15-16, 2006, all of the Trustees of
Insight Trust on behalf of Insight International, including the Disinterested
Trustees, considered and approved the Reorganization as set forth in the Plan.
They determined that the Reorganization was in the best interests of Insight
International and its shareholders, and that the interests of existing
shareholders of Insight International will not be diluted as a result of the
transactions contemplated by the Reorganization.
Before approving the Plan, the Trustees evaluated extensive information
provided by the management of the Funds and reviewed various factors about the
Funds and the proposed Reorganization. The Trustees noted that Foreign
Opportunities has a similar investment objective and similar investment
strategies as Insight International, but that Foreign Opportunities has
outperformed Insight International in seven of the ten years that Insight
International has operated and Class A shares of Foreign Opportunities have
outperformed those of Insight International over the past one- and five-year
periods. In addition, on a pro forma basis after the Reorganization, total
operating expenses of Foreign Opportunities are anticipated to be lower than
those of Insight International.
The Trustees considered the relative asset size of each Fund, including the
benefits of creating an entity with a higher combined level of assets.
As of December 31, 2006, Insight International's net assets were approximately
$290.8 million and Foreign Opportunities' net assets were approximately $353.6
million.
26
In addition, the Trustees considered, among other things:
o the terms and conditions of the Reorganization;
o the fact that the Reorganization would not result in the dilution of
shareholders' interests;
o the fact that the management fee of Foreign Opportunities is lower than that
of Insight International after its contractual expense reductions, and total
expenses of Foreign Opportunities will continue to be lower than those of
Insight International;
o the fact that Insight International and Foreign Opportunities have similar
investment objectives and similar principal investment strategies;
o the fact that Insight International and PIC will bear the expenses incurred
by the Funds in connection with the Reorganization, with Insight
International paying 30% of such costs and PIC paying 70%;
o the benefits to shareholders, including operating efficiencies, which may be
achieved from combining the Funds;
o the fact that Foreign Opportunities will assume all of the liabilities of
Insight International;
o the fact that the Reorganization is expected to be a tax-free transaction for
federal income tax purposes; and
o alternatives available to shareholders of Insight International, including
the ability to redeem their shares.
During their consideration of the Reorganization, the Trustees of
Insight Trust consulted with counsel to the Disinterested Trustees, as
appropriate.
After consideration of the factors noted above, together with other factors
and information considered to be relevant, and recognizing that there can be no
assurance that any operating efficiencies or other benefits will in fact be
realized, the Trustees of Insight Trust concluded that the proposed
Reorganization would be in the best interests of Insight International and its
shareholders. Consequently, they approved the Plan and directed that the Plan be
submitted to shareholders of Insight International for approval.
The Trustees of Adviser Trust have also approved the Plan on behalf of
Foreign Opportunities.
AGREEMENT AND PLAN OF REORGANIZATION
The following summary is qualified in its entirety by reference to the Plan
(the form of which is attached as Exhibit A to this Prospectus/Proxy Statement).
The Plan provides that all of the assets of Insight International will be
acquired by Foreign Opportunities in exchange for Class A, Class C and Class I
shares of Foreign Opportunities and the assumption by Foreign Opportunities of
all of the liabilities of Insight
27
International on or about April 13, 2007, or such other date as may be agreed
upon by the parties (the "Closing Date"). Prior to the Closing Date, Insight
International will endeavor to discharge all of its known liabilities and
obligations. Insight International will prepare an unaudited statement of its
assets and liabilities as of the Closing Date.
At or prior to the Closing Date, Insight International will declare and pay
a distribution or distributions 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.
The number of full and fractional shares of each class of Foreign
Opportunities to be received by the shareholders of Insight International will
be determined by dividing the net assets of Insight International by the net
asset value of a share of Foreign Opportunities. These computations will take
place as of immediately after the close of business on the New York Stock
Exchange and after the declaration of any dividends on the Closing Date (the
"Valuation Date"). The net asset value per share of each class will be
determined by dividing assets, less liabilities, in each case attributable to
the respective class, by the total number of outstanding shares.
Phoenix Equity Planning Corporation ("PEPCO"), the administrator for both
Funds, will compute the value of each Fund's respective portfolio of securities.
The method of valuation employed will be consistent with the procedures set
forth in the Prospectus and Statement of Additional Information of Foreign
Opportunities, Rule 22c-1 under the 1940 Act, and with the interpretations of
that Rule by the SEC's Division of Investment Management.
Immediately after the transfer of its assets to Foreign Opportunities,
Insight International will liquidate and distribute pro rata to the shareholders
as of the close of business on the Closing Date the full and fractional shares
of Foreign Opportunities received by Insight International. The liquidation and
distribution will be accomplished by the establishment of accounts in the names
of Insight International's shareholders on the share records of Foreign
Opportunities or its transfer agent. Each account will represent the respective
pro rata number of full and fractional shares of Foreign Opportunities due to
Insight International's shareholders. All issued and outstanding shares of
Insight International will be canceled. The shares of Foreign Opportunities to
be issued will have no preemptive or conversion rights and no share certificates
will be issued. After these distributions and the winding up of its affairs,
Insight International will be terminated as a series of Insight Trust.
The consummation of the Reorganization is subject to the conditions set
forth in the Plan, including approval by Insight International's shareholders,
accuracy of various representations and warranties and receipt of opinions of
counsel. Notwithstanding approval of Insight International's shareholders, the
Plan may be terminated (a) by the mutual agreement of Insight International and
Foreign Opportunities; (b) by either Insight International or Foreign
Opportunities if the Reorganization has not occurred on or before June 30, 2007,
unless such date is extended by mutual agreement of Insight International and
Foreign Opportunities; or (c)
28
by either party if the other party materially breaches its obligations under the
Plan or made a material and intentional misrepresentation in the Plan or in
connection with the Plan.
If the Reorganization is not consummated, PIC or one of its affiliates will
pay the expenses incurred by Insight International and Foreign Opportunities in
connection with the Reorganization (including the cost of any proxy soliciting
agent). In such event, no portion of the expenses will be borne directly or
indirectly by Insight International, Foreign Opportunities or their
shareholders.
If Insight International's shareholders do not approve the Reorganization,
the Trustees of Insight Trust will consider other possible courses of action in
the best interests of Insight International and its shareholders.
FEDERAL INCOME TAX CONSEQUENCES
The Reorganization is intended to qualify for federal income tax purposes
as a tax-free reorganization under section 368 of the Code. As a condition to
the closing of the Reorganization, Insight International and Foreign
Opportunities will receive an opinion from the law firm of McDermott Will &
Emery LLP to the effect that, based upon certain facts, assumptions, and
representations, the Reorganization contemplated by the Plan will, for federal
income tax purposes, qualify as a tax-free reorganization described in section
368(a) of the Code, and that Insight International and Foreign Opportunities
each will be a "party to a reorganization," within the meaning of section 368(b)
of the Code.
As a result:
1. No gain or loss will be recognized by Foreign Opportunities
upon the receipt of the assets of Insight International
solely in exchange for the shares of Foreign Opportunities
and the assumption by Foreign Opportunities of the
liabilities of Insight International;
2. No gain or loss will be recognized by Insight International
on the transfer of its assets to Foreign Opportunities in
exchange for Foreign Opportunities' shares and the
assumption by Foreign Opportunities of the liabilities of
Insight International or upon the distribution of Foreign
Opportunities' shares to Insight International's
shareholders in exchange for their shares of Insight
International;
3. No gain or loss will be recognized by Insight
International's shareholders upon the exchange of their
shares of Insight International for shares of Foreign
Opportunities in liquidation of Insight International;
4. The aggregate tax basis of the shares of Foreign
Opportunities received by each shareholder of Insight
International pursuant to the Reorganization will be the
same as the aggregate tax basis of the shares of Insight
International held by such shareholder immediately prior to
the Reorganization, and the holding period of the shares of
Foreign Opportunities received by each shareholder of
Insight International will include the period during which
the
29
shares of Insight International exchanged therefor were
held by such shareholder (provided that the shares of
Insight International are held as capital assets on the date
of the Reorganization); and
5. The tax basis of the assets of Insight International
acquired by Foreign Opportunities will be the same as the
tax basis of such assets to Insight International
immediately prior to the Reorganization, and the holding
period of such assets in the hands of Foreign Opportunities
will include the period during which the assets were held by
Insight International.
Opinions of counsel are not binding upon the Internal Revenue Service or
the courts. If the Reorganization is consummated, but does not qualify as a
tax-free reorganization under the Code, Insight International would recognize
gain or loss on the transfer of its assets to Foreign Opportunities and each
shareholder of Insight International would recognize a taxable gain or loss
equal to the difference between its tax basis in its Insight International's
shares and the fair market value of the shares of Foreign Opportunities it
received.
As of December 31, 2006, Insight International had capital loss
carryforwards of $________. Foreign Opportunities' utilization after the
Reorganization of any pre-Reorganization losses realized by Insight
International to offset gains realized by Foreign Opportunities could be subject
to limitation in future years.
PRO FORMA CAPITALIZATION
The following table sets forth the capitalization of Insight International
and Foreign Opportunities as of August 31, 2006, and the capitalization of
Foreign Opportunities on a pro forma basis as of that date, giving effect to the
proposed acquisition of assets at net asset value. The pro forma data reflects
an exchange ratio of approximately 0.86 Class A shares, 0.86 Class C shares and
0.89 Class I shares of Foreign Opportunities for each Class A, Class C and Class
I share, respectively, of Insight International.
CAPITALIZATION OF INSIGHT INTERNATIONAL, FOREIGN OPPORTUNITIES AND
FOREIGN OPPORTUNITIES (PRO FORMA)
- -------------------------------------------------------------------------------------------------------
FOREIGN
OPPORTUNITIES
INSIGHT FOREIGN ADJUSTMENTS (PRO FORMA) AFTER
INTERNATIONAL(a) OPPORTUNITIES ----------- REORGANIZATION
---------------- ------------- --------------
- -------------------------- ------------------ ------------------ ----------------- --------------------
Net Assets
Class A 4,340,957 177,749,936 182,090,89
Class C 109,852 12,820,697 12,930,549
Class I 279,580,359 53,160,288 332,740,647
Total Net Assets 284,031,168 243,730,921 527,762,089
- -------------------------- ------------------ ------------------ ----------------- --------------------
30
- -------------------------------------------------------------------------------------------------------
FOREIGN
OPPORTUNITIES
INSIGHT FOREIGN ADJUSTMENTS (PRO FORMA) AFTER
INTERNATIONAL(a) OPPORTUNITIES ----------- REORGANIZATION
---------------- ------------- --------------
- -------------------------- ------------------ ------------------ ----------------- --------------------
Net Asset Value Per Share
Class A 19.74 22.98 22.98
Class C 19.72 22.86 22.86
Class I 20.44 22.98 22.98
- -------------------------- ------------------ ------------------ ----------------- --------------------
Shares Outstanding
Class A 219,881 7,736,169 (30,951)(b) 7,925,099
Class C 5,571 560,846 (765)(b) 565,652
Class I 13,680,240 2,313,220 (1,514,563)(b) 14,478,897
- -------------------------- ------------------ ------------------ ----------------- --------------------
Total Shares Outstanding 13,905,692 10,610,235 22,969,648
- -------------------------- ------------------ ------------------ ----------------- --------------------
(a) Reflects $26,100 of merger related expenses. Insight International will
pay 30% of the merger costs, estimated at $87,000.
(b) Reflects change in shares outstanding due to reduction of Class A,
Class C and Class I shares of Foreign Opportunities in exchange for Class A,
Class C and Class I shares, respectively, of Insight International based upon
the net asset value of Foreign Opportunities' Class A, Class C, and Class I
shares, respectively, at August 31, 2006.
The table set forth above should not be relied upon to reflect the number
of 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 each Fund at the time of the Reorganization.
DISTRIBUTION OF SHARES
PEPCO, an affiliate of The Phoenix Companies, Inc. and the sole stockholder
of the Adviser, serves as the national distributor of the Funds' shares. PEPCO
distributes the Funds' shares either directly or through securities dealers or
agents or bank-affiliated securities brokers. Insight International and Foreign
Opportunities are each authorized to issue three classes of shares: Class A,
Class C and Class I. Each class of shares has a separate distribution
arrangement and bears its own distribution expenses, if any.
In the proposed Reorganization, shareholders of Insight International
owning Class A, Class C or Class I shares will receive Class A, Class C or Class
I shares, respectively, of Foreign Opportunities. Class A shares may pay a sales
charge at the time of purchase of up to 5.75% of the offering price. Class A
Shares on which a finder's fee has been paid may incur a 1% deferred sales
charge if the shares are redeemed within one year of purchase. The one-year
period begins on the last day of the month preceding the month in which the
purchase was made. Class A shares are also subject to distribution-related fees.
A Rule 12b-1 plan has been adopted for the Class A shares of Insight
International and Foreign Opportunities under which the applicable Fund may pay
a service fee at an annual rate which may not exceed 0.25 % of average daily net
assets attributable to the Class.
Class C shares are sold without a front-end sales charge and are subject to
a 1.00% contingent deferred sale charge ("CDSC") if such shares are redeemed
within one year of purchase. For purposes of calculating the CDSC that you may
pay when you dispose of any Class C shares acquired as a result of the
Reorganization, the length of time you hold shares in Foreign Opportunities will
be added to the length of time you held shares in Insight International. If you
acquire Class C shares as a result of the Reorganization, you will continue to
be subject to a CDSC upon subsequent redemption to the same extent as if you had
continued to hold your
31
shares of Insight International. Class C shares are also subject to
distribution-related fees. A Rule 12b-1 plan has been adopted for the Class C
shares of Insight International and Foreign Opportunities under which the
applicable Fund will be able to pay for distribution-related expenses at an
annual rate which may not exceed 1.00% of average daily net assets attributable
to the Class. Class C shares do not convert to any other class of shares. Class
C shares issued to shareholders of Insight International in connection with the
Reorganization will continue to be subject to the CDSC schedule in place at the
time of their original purchase.
Class I shares will be offered primarily to institutional investors such as
pension and profit sharing plans, other employee benefit trusts, investment
advisers, endowments, foundations and corporations. Class I shares do not pay a
sales charge at any time, and there are no distribution and services fees
applicable to Class I shares.
In connection with the Reorganization, no sales charges are imposed. More
detailed descriptions of the Class A, Class C and Class I shares and the
distribution arrangements applicable to these classes of shares are contained in
the Prospectus and Statement of Additional Information relating to Foreign
Opportunities.
PURCHASE AND REDEMPTION PROCEDURES
Information concerning applicable sales charges and distribution-related
fees is provided above. Investments in the Funds are not insured. For
information about minimum purchase requirements, see "Your Account" and "How to
Buy Shares" in the Funds' Prospectuses. Each Fund, subject to certain
restrictions, provides for telephone or mail redemption of shares at net asset
value, less any CDSC, as next determined after receipt of a redemption order on
each day the New York Stock Exchange is open for trading. Each Fund reserves the
right to redeem in kind, under certain circumstances, by paying you the proceeds
of a redemption in securities rather than in cash. Additional information
concerning purchases and redemptions of shares, including how each Fund's net
asset value is determined, is contained in the Funds' Prospectuses. Each Fund
may involuntarily redeem shareholders' accounts that have a balance below $200
as a result of redemption activity, subject to sixty-days written notice. All
investments are invested in full and fractional shares. The Funds reserve the
right to reject any purchase order.
EXCHANGE PRIVILEGES
Insight International and Foreign Opportunities currently offer
shareholders identical exchange privileges. Shareholders of each Fund may
exchange their shares for shares of a corresponding class of shares of other
affiliated Phoenix Funds. Class C shares of the Funds are also exchangeable for
Class T shares of those Phoenix Funds offering them.
On exchanges with corresponding classes of shares that carry a contingent
deferred sales charge, the contingent deferred sales charge schedule of the
original shares purchased continues to apply. Additional information concerning
the Funds' exchange privileges is contained in the Funds' Prospectuses.
32
DIVIDEND POLICY
The Funds distribute net investment income semiannually. Both Funds
distribute net realized capital gains, if any, at least annually.
All dividends and distributions of the Funds are paid in additional shares
of the respective Fund unless a shareholder has elected to receive distributions
in cash. See the Funds' Prospectuses for further information concerning
dividends and distributions.
Each Fund has qualified, and Foreign Opportunities intends to continue to
qualify, to be treated as a regulated investment company under the Code. To
remain qualified as a regulated investment company, a Fund must distribute 90%
of its taxable and tax-exempt income and diversify its holdings as required by
the 1940 Act and the Code. While so qualified, so long as each Fund distributes
all of its net investment company taxable and tax-exempt income and any net
realized gains to its shareholders, it is expected that a Fund will not be
required to pay any federal income taxes on the amounts distributed to its
shareholders.
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS
FORM OF ORGANIZATION
Insight International is a series of Insight Trust, a diversified open-end
management investment company registered with the SEC under the 1940 Act that
was organized as a Massachusetts business trust in December 1995. Foreign
Opportunities is a series of Adviser Trust, a diversified open-end management
investment company registered with the SEC under the 1940 Act that was organized
as a Delaware statutory trust in May 2003. Insight Trust and Adviser Trust are
governed by their respective Agreements and Declarations of Trust ("Declarations
of Trust") and By-Laws, Board of Trustees, and Massachusetts or Delaware and
federal law. Insight Trust and Adviser Trust are each organized as a "series
company" as that term is used in Rule 18f-2 under the 1940 Act. The series of
Adviser Trust currently consist of Foreign Opportunities and one other mutual
fund of various asset classes, while Insight Trust consists of Insight
International and 17 other mutual funds of various asset classes.
CAPITALIZATION
The beneficial interests in Insight Trust and Adviser Trust are represented
by an unlimited number of transferable shares of beneficial interest, par value
$0.001, of one or more series. The Declaration of Trust of each of Insight Trust
and Adviser Trust permits the Trustees to allocate shares into one or more
series, and classes thereof, with rights determined by the Trustees, all without
shareholder approval. Fractional shares may be issued by each Fund.
Shares of Insight International and Foreign Opportunities are offered in
three classes (Class A, Class C and Class I). Shares of the classes of each Fund
represent an equal pro rata interest in the Fund and generally have identical
voting, dividend, liquidation and other rights, other than the payment of
distribution fees. Shareholders of each Fund are entitled to receive dividends
and other amounts as determined by the Trustees, as applicable. Shareholders of
each Fund vote separately, by Fund, as to matters, such as changes in
fundamental investment restrictions, that affect only their particular Fund.
Shareholders of each Fund vote by class as to matters, such as approval of or
amendments to Rule 12b-1 distribution plans, that affect only their particular
class.
33
SHAREHOLDER LIABILITY
Under Delaware law, shareholders of a Delaware statutory trust are entitled
to the same limitation of personal liability extended to stockholders of
Delaware corporations. To the extent that Adviser Trust or a shareholder of
Adviser Trust is subject to the jurisdiction of courts in other states, it is
possible that a court may not apply Delaware law and may thereby subject
shareholders of Adviser Trust to liability. To guard against this risk, the
Declaration of Trust of Adviser Trust (a) provides that any written obligation
of Adviser Trust may contain a statement that such obligation may only be
enforced against the assets of Adviser Trust or the particular series in
question and the obligation is not binding upon the shareholders of Adviser
Trust; however, the omission of such a disclaimer will not operate to create
personal liability for any shareholder; and (b) provides for indemnification out
of trust property of any shareholder held personally liable for the obligations
of Adviser Trust. Accordingly, the risk of a shareholder of Adviser Trust
incurring financial loss beyond that shareholder's investment because of
shareholder liability is limited to circumstances in which: (1) a court refuses
to apply Delaware law; (2) no contractual limitation of liability was in effect;
and (3) Adviser Trust itself is unable to meet its obligations. In light of
Delaware law, the nature of Adviser Trust's business, and the nature of its
assets, the risk of personal liability to a shareholder of Adviser Trust is
remote.
Shareholders of Insight Trust as shareholders of a Massachusetts business
trust may, under certain circumstances, be held personally liable under the
applicable state law for the obligations of Insight Trust. However, the
Declaration of Trust of Insight Trust contains an express disclaimer of
shareholder liability and requires notice of such disclaimer be given in each
agreement entered into or executed by Insight Trust or the Trustees or officers
of Insight Trust, as applicable. The Declaration of Trust also provides for
shareholder indemnification out of the assets of Insight Trust.
SHAREHOLDER MEETINGS AND VOTING RIGHTS
Insight Trust, on behalf of Insight International, and Adviser Trust, on
behalf of Foreign Opportunities, are not required to hold annual meetings of
shareholders. However, a meeting of shareholders for the purpose of voting upon
the question of removal of a Trustee must be called when requested in writing by
the holders of at least 10% of the outstanding shares of Insight Trust or
Adviser Trust. In addition, each of Insight Trust and Adviser Trust is required
to call a meeting of shareholders for the purpose of electing Trustees if, at
any time, less than a majority of the Trustees then holding office were elected
by shareholders. Neither Insight Trust nor Adviser Trust currently intends to
hold regular shareholder meetings. Cumulative voting is not permitted in the
election of Trustees of Insight Trust or Adviser Trust.
Except when a larger quorum is required by applicable law or the applicable
governing documents, with respect to Adviser Trust 33 1/3% of the shares, and
with respect to Insight Trust 30% of the shares, entitled to vote constitutes a
quorum for consideration of a matter at a shareholders' meeting. When a quorum
is present at a meeting, a majority (greater than 50%) of the shares voted is
sufficient to act on a matter and a plurality of the shares voted is required to
elect a Trustee (unless otherwise specifically required by the applicable
governing documents or other law, including the 1940 Act).
34
A Trustee of Adviser Trust may be removed with or without cause at a
meeting of shareholders by a vote of two-thirds of the outstanding shares of
Adviser Trust, or with or without cause by the vote of two-thirds of the number
of Trustees prior to removal. A Trustee of Insight Trust may be removed with
cause at a meeting of shareholders by a vote of two-thirds of the outstanding
shares of Insight Trust, or with cause by the vote of two-thirds of the number
of Trustees prior to removal.
Under the Declaration of Trust of each of Insight Trust and Adviser Trust,
each shareholder is entitled to one vote for each dollar of net asset value of
each share owned by such shareholder and each fractional dollar amount is
entitled to a proportionate fractional vote.
The Declaration of Trust of Adviser Trust provides that unless otherwise
required by applicable law (including the 1940 Act), the Board of Trustees may,
without obtaining a shareholder vote: (1) reorganize Adviser Trust as a
corporation or other entity, (2) merge Adviser Trust into another entity, or
merge, consolidate or transfer the assets and liabilities or class of shares to
another entity, and (3) combine the assets and liabilities held with respect to
two or more series or classes into assets and liabilities held with respect to a
single series or class.
The Declaration of Trust of Insight Trust provides that unless otherwise
required by applicable law (including the 1940 Act): (1) the affirmative vote of
the holders of two-thirds of the shares of Insight Trust are required for
Insight Trust, or any series of Insight Trust, to merge or consolidate with or
into, or sell substantially all of its assets to, one or more trusts (or series
thereof), partnerships, associations, corporations or other business entities or
cause the shares (or any portion thereof) to be exchanged under or pursuant to
any state or federal statute; provided, however, that the affirmative vote of
only a majority of the shareholders is required if such action is recommended by
the Trustees; and (2) the affirmative vote of a majority of the shareholders is
required in order for Insight Trust to reorganize under the laws of any state or
other political subdivision of the United States.
Under certain circumstances, the Trustees of each of Adviser Trust and
Insight Trust may also terminate Adviser Trust or Insight Trust, as the case may
be, a series, or a class of shares, upon written notice to the shareholders.
LIQUIDATION
In the event of the liquidation of Insight Trust or Adviser Trust, either
Fund, or a class of shares, the shareholders are entitled to receive, when and
as declared by the Trustees, the excess of the assets belonging to Insight Trust
or Adviser Trust, the Fund or attributable to the class over the liabilities
belonging to Insight Trust or Adviser Trust, the Fund or attributable to the
class. The assets so distributable to shareholders of the Fund will be
distributed among the shareholders in proportion to the dollar value of shares
of such Fund or class of the Fund held by them on the date of distribution.
LIABILITY AND INDEMNIFICATION OF TRUSTEES
Under the Declaration of Trust of each of Insight Trust and Adviser Trust,
a Trustee is generally personally liable only for willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of the office of Trustee. As provided in the
35
Declaration of Trust and By-Laws of each of Insight Trust and Adviser Trust,
each Trustee of Insight Trust or Adviser Trust, as the case may be, is entitled
to be indemnified against all liabilities and all expenses reasonably incurred
or paid by him or her in connection with any proceeding in which he or she
becomes involved as a party or otherwise by virtue of his or her office of
Trustee, unless the Trustee (1) shall have been adjudicated by the court or
other body before which the proceeding was brought to be liable to Insight Trust
or Adviser Trust, as the case may be, or its shareholders by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his or her office of Trustee (collectively,
"disabling conduct") or (2) with respect to any proceeding disposed of without
an adjudication by the court or other body before which the proceeding was
brought that such Trustee was liable to Insight Trust or Adviser Trust, as the
case may be, or its shareholders by reason of disabling conduct, unless there
has been a determination that the Trustee did not engage in disabling conduct.
This determination may be made by (a) the court or other body before which the
proceeding was brought, (b) a vote of a majority of those Trustees who are
neither "interested persons" within the meaning of the 1940 Act nor parties to
the proceeding or (c) an independent legal counsel in a written opinion. Insight
Trust and Adviser Trust may also advance money in connection with the
preparation and presentation of a defense to any proceeding provided that the
Trustee undertakes to repay Insight Trust or Adviser Trust, as the case may be,
if his or her conduct is later determined to preclude indemnification and
certain other conditions are met.
The foregoing is only a summary of certain characteristics of the
operations of the Declaration of Trust and By-Laws of each of Adviser Trust and
Insight Trust, and Delaware or Massachusetts and federal law, as applicable and
is not a complete description of those documents or law. Shareholders should
refer to the provisions of such Declarations of Trust, By-Laws and Delaware or
Massachusetts and federal law, as applicable law, directly for more complete
information.
INFORMATION CONCERNING THE MEETING AND VOTING REQUIREMENTS
This Prospectus/Proxy Statement is being sent to shareholders of Insight
International in connection with a solicitation of proxies by the Trustees of
the Insight Trust, to be used at the Special Meeting of Shareholders (the
"Meeting") to be held at 2:00 p.m. Eastern time, March 30, 2007, at the offices
of Phoenix Investment Partners, Ltd., 56 Prospect Street, Hartford, Connecticut
06103, and at any adjournments thereof. This Prospectus/Proxy Statement, along
with a Notice of the Meeting and a proxy card, is first being mailed to
shareholders of Insight International on or about February 12, 2007.
The Board of Trustees of Insight Trust has fixed the close of business on
February 5, 2007 as the record date (the "Record Date") for determining the
shareholders of Insight International entitled to receive notice of the Meeting
and to vote, and for determining the number of shares for which voting
instructions may be given, with respect to the Meeting or any adjournment
thereof.
In voting for the Plan, each shareholder is entitled to one vote for each
dollar of net asset value of each share owned by such shareholder and each
fractional dollar amount is entitled to a proportionate fractional vote.
36
Proxies may be revoked by mailing a notice of revocation to the Secretary
of Insight Trust at the address set forth on the cover page of this
Prospectus/Proxy Statement, by executing a superceding proxy by telephone or
through the Internet or by attending the Meeting in person and voting your
shares. Unless revoked, all valid proxies will be voted in accordance with the
specifications thereon or, in the absence of such specifications, FOR approval
of the Plan and the Reorganization contemplated thereby.
If you wish to participate in the Meeting, you may submit the proxy card
included with this Prospectus/Proxy Statement, vote by the Internet or by
telephone, or attend in person. Guidelines on voting by mail, by telephone,
through the Internet or in person at the Meeting appear on the enclosed proxy
card.
If the enclosed proxy card is properly executed and returned in time to be
voted at the Meeting, the proxies named thereon will vote the interests
represented by the proxy card in accordance with the instructions marked on the
returned proxy card.
o Proxy cards that are properly executed and returned but are not marked with
voting instructions will be voted FOR the Plan and FOR any other matters
deemed appropriate.
Thirty percent (30%) of the outstanding voting shares of Insight
International must be present in person or by proxy to constitute a quorum for
the Meeting. Approval of the Plan will require the affirmative vote of the
holders of a majority of the shares of Insight International.
The inspectors of election will treat abstentions and "broker non-votes"
(i.e., shares held by brokers or nominees, typically in "street name", as to
which (i) instructions have not been received from the beneficial owners or
persons entitled to vote and (ii) the broker or nominee does not have
discretionary voting power on a particular matter) of shares represented at the
Meeting as present for purposes of determining a quorum. In addition, under the
rules of the New York Stock Exchange, if a broker has not received instructions
from beneficial owners or persons entitled to vote and the proposal to be voted
upon may "affect substantially" a shareholder's rights or privileges, the broker
may not vote the shares as to that proposal even if it has discretionary voting
power. As a result, these shares also will be treated as broker non-votes for
purposes of proposals that may "affect substantially" a shareholder's rights or
privileges (but will not be treated as broker non-votes for other proposals,
including adjournment of the Meeting). Abstentions and broker non-votes will be
treated as shares voted against the Plan.
In addition to the proxy solicitation by mail, representatives of Insight
Trust may solicit proxies by mail, telephone, facsimile, Internet or personal
contact. Computershare Fund Services, Inc. has been engaged to assist in the
distribution and tabulation of proxies and to assist in the solicitation of
proxies. The costs of solicitation and the expenses incurred in connection with
preparing this Prospectus/Proxy Statement and its enclosures will be paid by
Insight International and PIC, with Insight International paying 30% of such
costs and PIC paying 70%. The anticipated cost of this proxy solicitation is
approximately $____ to $____, plus expenses. Neither Foreign Opportunities nor
its shareholders will bear any costs associated with the Meeting, this proxy
solicitation or any adjourned session.
37
If shareholders of Insight International do not vote to approve the Plan,
the Trustees of the Insight Trust will consider other possible courses of action
in the best interests of Insight International and its shareholders. If
sufficient votes to approve the Plan are not received, the persons named as
proxies may propose one or more adjournments of the Meeting to permit further
solicitation of voting instructions. In determining whether to adjourn the
Meeting, the following factors may be considered: the percentage of votes
actually cast, the percentage of negative votes actually cast, the nature of any
further solicitation and the information to be provided to shareholders with
respect to the reasons for the solicitation. Any adjournment will require an
affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. The persons named as proxies will vote upon such adjournment
after consideration of all circumstances which may bear upon a decision to
adjourn the Meeting.
A shareholder of Insight International who objects to the proposed
Reorganization as set forth in the Plan will not be entitled under either
Massachusetts or Delaware law or the Declaration of Trust of Insight Trust to
demand payment for, or an appraisal of, his or her shares. However, shareholders
should be aware that the Reorganization as proposed is not expected to result in
recognition of gain or loss to shareholders for federal income tax purposes. In
addition, if the Reorganization is consummated, shareholders will be free to
redeem the shares of Foreign Opportunities that they receive in the transaction
at their then-current net asset value. Shares of Insight International may be
redeemed at any time prior to the Reorganization. Shareholders of Insight
International may wish to consult their tax advisors as to any different
consequences of redeeming their shares prior to the Reorganization or exchanging
such shares in the Reorganization.
Insight Trust does not hold annual shareholder meetings. If the Plan is not
approved, shareholders wishing to submit proposals to be considered for
inclusion in a proxy statement for a subsequent shareholder meeting should send
their written proposals to the Secretary of Insight Trust at the address set
forth on the cover of this Prospectus/Proxy Statement so that they will be
received by Insight Trust in a reasonable period of time prior to that meeting.
The votes of the shareholders of Foreign Opportunities are not being
solicited by this Prospectus/Proxy Statement and are not required to carry out
the Reorganization.
SHAREHOLDER INFORMATION
The shareholders of Insight International at the close of business on
February 5, 2007 (the "Record Date") will be entitled to be present and vote at
the Meeting with respect to shares of Insight International owned as of the
Record Date. As of the Record Date, the total number of shares of Insight
International outstanding was as follows:
- ------------------------------------------
NUMBER OF SHARES
----------------
- ------------------ -----------------------
CLASS A
CLASS C
CLASS I
- ------------------ -----------------------
TOTAL
- ------------------------------------------
38
As of the Record Date, the officers and Trustees of Insight Trust, as a
group, owned beneficially or of record less than 1% of the outstanding shares of
Insight International.
As of the Record Date, the officers and Trustees of the Adviser Trust, as a
group, owned beneficially or of record less than 1% of the outstanding shares of
Foreign Opportunities.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of the Record Date, the beneficial owners or record owners of more than
5% of the shares of Insight International or Foreign Opportunities were as
follows:
INSIGHT INTERNATIONAL
INSIGHT INTERNATIONAL
- -------------------------------------------------------------------------------------------------------------------------------
% OF CLASS OF SHARES OF % OF CLASS OF SHARES OF
NAME AND ADDRESS CLASS NO. OF SHARES PORTFOLIO BEFORE PORTFOLIO AFTER
REORGANIZATION REORGANIZATION
- -------------------------------------------------------------------------------------------------------------------------------
MAC & Co. A/C XXXXXXX1002 % %
MUTUAL FUND OPERATIONS
PO BOX 3198
525 WILLIAM PENN PLACE
PITTSBURGH, PA 15230-3198
- -------------------------------------------------------------------------------------------------------------------------------
SEI PRIVATE TRUST COMPANY
C/O HARRIS BANK ID 940
ATTN MUTUAL FUNDS % %
ONE FREEDOM VALLEY DRIVE
OAKS, PA 19456
- -------------------------------------------------------------------------------------------------------------------------------
MAC & Co. A/C XXXXXXX1132
MUTUAL FUND OPERATIONS
PO BOX 3198 % %
525 WILLIAM PENN PLACE
PITTSBURGH, PA 15230-3198
FOREIGN OPPORTUNITIES
- -------------------------------------------------------------------------------------------------------------------------------
% OF CLASS OF SHARES OF % OF CLASS OF SHARES OF
NAME AND ADDRESS CLASS NO. OF SHARES PORTFOLIO BEFORE PORTFOLIO AFTER
REORGANIZATION REORGANIZATION
- -------------------------------------------------------------------------------------------------------------------------------
CHARLES SCHWAB & CO. INC. % %
EXCLUSIVE BENEFIT OF OUR CUSTOMER
REINVEST ACCOUNT
ATTN MUTUAL FUNDS DEPT
101 MONTGOMERY ST
SAN FRANCISCO, CA 94104-4151
FINANCIAL STATEMENTS AND EXPERTS
The Annual Report of Insight Trust relating to Insight International, for
the year ended as of December 31, 2005, and the financial statements and
financial highlights for the periods indicated therein, has been incorporated by
reference herein and in the Registration Statement.
39
The financial statements and financial highlights of Insight Trust relating to
Insight International, for the period indicated therein have been incorporated
by reference herein and in the Registration Statement in reliance upon the
report of KPMG LLP, independent registered public accounting firm, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing. The Annual Report of Adviser Trust relating to Foreign
Opportunities, for the year ended as of February 28, 2006, and the financial
statements and financial highlights for the periods indicated therein, has been
incorporated by reference herein and in the Registration Statement. The
financial statements and financial highlights of Adviser Trust relating to
Foreign Opportunities, for the period indicated therein have been incorporated
by reference herein and in the Registration Statement in reliance upon the
report of PricewaterhouseCoopers LLP, independent registered public accounting
firm, incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of Foreign
Opportunities will be passed upon by Kevin J. Carr, Esq., Vice President and
Counsel, The Phoenix Companies, Inc.
ADDITIONAL INFORMATION
Insight Trust and Adviser Trust are each subject to the informational
requirements of the Securities Exchange Act of 1934 and the 1940 Act, and in
accordance therewith file reports and other information including proxy material
and charter documents with the SEC. These items can be inspected and copied at
the Public Reference Facilities maintained by the SEC at 100 F Street, N.E.,
Washington, D.C. 20549, and at the SEC's Regional Offices located at Northeast
Regional Office, 3 World Financial Center, Room 4300, New York, New York 10281;
Southeast Regional Office, 801 Brickell Avenue, Suite 1800, Miami, Florida
33131; Midwest Regional Office, 175 W. Jackson Boulevard, Suite 900, Chicago,
Illinois 60604; Central Regional Office, 1801 California Street, Suite 1500,
Denver, Colorado 80202-2656; and Pacific Regional Office, 5670 Wilshire
Boulevard, 11th Floor, Los Angeles, California 90036-3648. Copies of such
materials can also be obtained at prescribed rates from the Public Reference
Branch, Office of Consumer Affairs and Information Services, Securities and
Exchange Commission, 100 F Street, N.E., Washington, D.C. 20549.
OTHER BUSINESS
The Trustees of Insight Trust do not intend to present any other
business at the Meeting. If, however, any other matters are properly brought
before the Meeting, the persons named in the accompanying form of proxy will
vote thereon in accordance with their judgment.
THE TRUSTEES OF INSIGHT TRUST RECOMMEND APPROVAL OF THE
PLAN AND ANY UNMARKED INVESTMENT PROXY CARDS WILL BE VOTED IN
FAVOR OF APPROVAL OF THE PLAN.
February 9, 2007
40
EXHIBIT A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this __ day of ______, 2006, by and between Phoenix Adviser Trust, a Delaware
statutory trust (the "Acquiring Trust"), with its principal place of business at
101 Munson Street, Greenfield, Massachusetts 01301, on behalf of the Phoenix
Foreign Opportunities Fund (the "Acquiring Fund"), a separate series of the
Acquiring Trust, and Phoenix Insight Funds Trust, a Massachusetts business trust
(the "Selling Trust"), on behalf of the Phoenix Insight International Fund (the
"Acquired Fund"), a separate series of the Selling Trust.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1) of the
United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization (the "Reorganization") will consist of the transfer of all of the
assets of the Acquired Fund to the Acquiring Fund in exchange solely for voting
shares of beneficial interest of the Acquiring Fund (the "Acquiring Fund
Shares"), the assumption by the Acquiring Fund of all liabilities of the
Acquired Fund, and the distribution of the Acquiring Fund Shares to the
shareholders of the Acquired Fund in complete liquidation of the Acquired Fund
as provided herein, all upon the terms and conditions hereinafter set forth in
this Agreement.
The Acquired Fund is a separate series of the Selling Trust and the
Acquiring Fund is a separate series of the Acquiring Trust, each of which is an
open-end, registered investment company of the management type. The Acquired
Fund owns securities that generally are assets of the character in which the
Acquiring Fund is permitted to invest.
The Board of Trustees of the Acquiring Trust, including a majority of
the Trustees who are not "interested persons" of the Acquiring Trust, as defined
in the Investment Company Act of 1940, as amended (the "1940 Act"), has
determined, with respect to the Acquiring Fund, that the exchange of all of the
assets of the Acquired Fund for Acquiring Fund Shares and the assumption of all
liabilities of the Acquired Fund by the Acquiring Fund is in the best interests
of the Acquiring Fund and its shareholders, and that the interests of the
existing shareholders of the Acquiring Fund would not be diluted as a result of
this transaction.
The Board of Trustees of the Selling Trust, including a majority of the
Trustees who are not "interested persons" of the Selling Trust, as defined in
the 1940 Act, has also determined, with respect to the Acquired Fund, that the
exchange of all of the assets of the Acquired Fund for Acquiring Fund Shares and
the assumption of all liabilities of the Acquired Fund by the Acquiring Fund is
in the best interests of the Acquired Fund and its shareholders and that the
interests of the existing shareholders of the Acquired Fund would not be diluted
as a result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSACTION
1.1 Subject to the terms and conditions set forth herein and on the
basis of the representations and warranties contained herein, the Acquired Fund
agrees to transfer all of the Acquired Fund's assets, as set forth in paragraph
1.2, to the Acquiring Fund, and the Acquiring Fund agrees in exchange therefor:
(i) to deliver to the Acquired Fund the number of full and fractional Acquiring
Fund Shares, determined by dividing the value of the Acquired Fund's net
A-1
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 Acquiring Fund 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 Acquired Fund, as set forth in paragraph 1.3. Such
transactions shall take place at the closing provided for in paragraph 3.1 (the
"Closing Date").
1.2 The assets of the Acquired Fund to be acquired by the Acquiring
Fund shall consist of all assets and property, including, without limitation,
all cash, securities, commodities and futures interests and dividends or
interests receivable, that are owned by the Acquired Fund, and any deferred or
prepaid expenses shown as an asset on the books of the Acquired Fund, on the
Closing Date (collectively, the "Assets").
1.3 The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Acquiring Fund shall
also assume all of the liabilities of the Acquired Fund, whether accrued or
contingent, known or unknown, existing at the Valuation Date, as defined in
paragraph 2.1 (collectively, "Liabilities"). On or as soon as practicable prior
to the Closing Date, the Acquired Fund 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 Acquired Fund will distribute to the Acquired Fund's
shareholders of record, determined as of immediately after the close of business
on the Closing Date (the "Acquired Fund Shareholders"), on a pro rata basis, the
Acquiring Fund Shares received by the Acquired Fund pursuant to paragraph 1.1,
and will completely liquidate. Such distribution and liquidation will be
accomplished, with respect to the Acquired Fund's shares, by the transfer of the
Acquiring Fund Shares then credited to the account of the Acquired Fund on the
books of the Acquiring Fund to open accounts on the share records of the
Acquiring Fund in the names of the Acquired Fund Shareholders. The aggregate net
asset value of Acquiring Fund Shares to be so credited to Acquired Fund
Shareholders shall be equal to the aggregate net asset value of the Acquired
Fund shares owned by such shareholders on the Closing Date. All issued and
outstanding shares of the Acquired Fund will simultaneously be canceled on the
books of the Acquired Fund.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of
the Acquiring Fund or its Transfer Agent, as defined in paragraph 3.3.
1.6 Any reporting responsibility of the Acquired Fund 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 Acquired Fund.
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 Acquiring Trust's Board of Trustees, which shall be described
in the then-current prospectus and statement of additional information with
respect to the Acquiring Fund.
A-2
2.2 The net asset value of the Acquiring Fund Shares shall be the net
asset value per share computed as of the Valuation Date, using the valuation
procedures established by the Acquiring Trust's Board of Trustees which shall be
described in the Acquiring Fund's then-current prospectus and statement of
additional information.
2.3 The number of Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Acquired Fund's Assets shall be
determined by dividing the value of the net assets with respect to the shares of
the Acquired Fund determined using the same valuation procedures referred to in
paragraph 2.1, by the net asset value of an Acquiring Fund Share, determined in
accordance with paragraph 2.2.
2.4 Phoenix Equity Planning Corporation ("PEPCO") shall make all
computations of value, in its capacity as administrator for the Acquiring Trust.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be April 13, 2007, 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 Phoenix Life Insurance
Company, One American Row, Hartford, CT 06115-0480 or at such other time and/or
place as the parties may agree.
3.2 The Selling Trust shall direct PFPC Trust Company, as custodian
for the Acquired Fund (the "Custodian"), to deliver, on the next business day
after the Closing, a certificate of an authorized officer stating that the
Assets shall have been delivered in proper form to the Acquiring Fund on the
next business day following the Closing Date. The Acquired Fund shall have
delivered to the Acquiring Fund a certificate executed in the Acquired Fund's
name by its Treasurer or Assistant Treasurer, in a form reasonably satisfactory
to the Acquiring Fund, and dated as of the Closing Date, to the effect that 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 Acquired Fund's portfolio securities
represented by a certificate or other written instrument shall be presented by
the Acquired Fund's Custodian to the custodian for the Acquiring Fund for
examination no later than on the next business day following the Closing Date,
and shall be transferred and delivered by the Acquired Fund on the next business
day following the Closing Date for the account of the Acquiring Fund duly
endorsed in proper form for transfer in such condition as to constitute good
delivery thereof. The Custodian shall deliver as of the Closing Date by book
entry, in accordance with the customary practices of such depositories and the
Custodian, the Acquired Fund's 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 Acquired Fund shall be delivered by wire transfer
of federal funds on the Closing Date.
3.3 The Selling Trust shall direct PEPCO (the "Transfer Agent"), on
behalf of the Acquired Fund, to deliver on the next business day following the
Closing, a certificate of an authorized officer stating that its records contain
the names and addresses of the Acquired Fund Shareholders, and the number and
percentage ownership of outstanding shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall issue and deliver a
confirmation evidencing the Acquiring Fund Shares to be credited on the Closing
Date to the
A-3
Secretary of the Acquired Fund, or provide evidence satisfactory to the Acquired
Fund that such Acquiring Fund Shares have been credited to the Acquired Fund's
account on the books of the Acquiring Fund. 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
Acquired Fund 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 accurate appraisal of the value of the net
assets of the Acquired Fund 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 Selling Trust, on behalf of the Acquired Fund, represents and
warrants as follows:
(a) The Acquired Fund is duly organized as a series of the Selling
Trust, which is a business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts with power under
the Selling Trust's Declaration of Trust to own all of its assets and to carry
on its business as it is now being conducted;
(b) The Selling 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 Acquired Fund 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 Acquired Fund 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 Acquired Fund and each prospectus and statement of additional information of
the Acquired Fund used at all times previous to the date of this Agreement
conforms or conformed at the time of its use in all material respects to the
applicable requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder, and does not or did not at the time of
its use include any untrue statement of a material fact or omit to state any
material fact required to 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 Selling Trust, on behalf of the Acquired
Fund, 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 Acquiring Trust, on behalf of the Acquiring Fund, 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 Acquiring Fund;
A-4
(f) The Acquired Fund is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of the Selling Trust's Declaration of Trust or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the Selling
Trust, on behalf of the Acquired Fund, 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 Selling Trust, on behalf of the Acquired Fund, is a party or by which
it is bound;
(g) All material contracts or other commitments of the Acquired Fund
(other than this Agreement and certain investment contracts, including options,
futures and forward contracts) will terminate without liability to the Acquired
Fund on or prior to the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted by the
Acquiring Trust, on behalf of the Acquiring Fund, 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 Selling Trust, on behalf of the Acquired Fund, 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 Selling Trust, on behalf
of the Acquired Fund, knows of no facts which might form the basis for the
institution of such proceedings and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental body
which materially and adversely affects its business or its ability to consummate
the transactions herein contemplated;
(i) The unaudited Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets, and Schedule of Investments of the
Acquired Fund at June 30, 2006 are in accordance with generally accepted
accounting principles ("GAAP") consistently applied, and such statements (copies
of which have been furnished to the Acquiring Fund) present fairly, in all
material respects, the financial condition of the Acquired Fund as of such date
in accordance with GAAP, and there are no known contingent liabilities of the
Acquired Fund 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 June 30, 2006, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquired Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Acquiring Fund. For the purposes of this subparagraph (j), a
decline in net asset value per share of the Acquired Fund due to declines in
market values of securities in the Acquired Fund's portfolio, the discharge of
Acquired Fund liabilities, or the redemption of Acquired Fund shares by
shareholders of the Acquired Fund 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 Acquired Fund 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 Acquired Fund's knowledge, no such return is
currently under audit and no assessment has been asserted with respect to such
returns;
A-5
(l) For each taxable year of its operation (including the taxable
year ending on the Closing Date), the Acquired Fund 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 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 Acquired Fund are, and
on the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable and have been offered and sold in every state and the
District of Columbia in compliance in all material respects with applicable
registration requirements of the 1933 Act and state securities laws. All of the
issued and outstanding shares of the Acquired Fund 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 Acquired Fund, as provided in paragraph 3.3.
The Acquired Fund does not have outstanding any options, warrants or other
rights to subscribe for or purchase any of the shares of the Acquired Fund, nor
is there outstanding any security convertible into any of the Acquired Fund
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 Board of Trustees of the Selling Trust, on behalf of the
Acquired Fund, and this Agreement will constitute a valid and binding obligation
of the Acquired Fund, 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; and
(o) The information to be furnished by the Acquired Fund for use in
registration statements and other documents filed or to be filed with any
federal, state or local regulatory authority (including the NASD, Inc.), 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.
4.2 The Acquiring Trust, on behalf of the Acquiring Fund, represents
and warrants as follows:
(a) The Acquiring Fund is duly organized as a series of the Acquiring
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 Acquiring
Trust's Agreement and Declaration of Trust (the "Trust Instrument") to own all
of its assets and to carry on its business as it is now being conducted;
(b) The Acquiring 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 Acquiring Fund 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 Acquiring Fund 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;
A-6
(d) The current prospectus and statement of additional information of
the Acquiring Fund and each prospectus and statement of additional information
of the Acquiring Fund used at all times previous to the date of this Agreement
conforms or conformed at the time of its use in all material respects to the
applicable requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder and does not or did not at the time of
its use include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
materially misleading;
(e) The Acquiring Fund is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of the Acquiring Trust's Trust Instrument or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the
Acquiring Trust, on behalf of the Acquiring Fund, 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 Acquiring Trust, on behalf of the Acquiring Fund, is a
party or by which it is bound;
(f) Except as otherwise disclosed in writing to and accepted by the
Selling Trust, on behalf of the Acquired Fund, 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 Acquiring Trust,
on behalf of the Acquiring Fund, or any of the Acquiring Fund's properties or
assets that, if adversely determined, would materially and adversely affect the
Acquiring Fund's financial condition or the conduct of the Acquiring Fund's
business. The Acquiring Trust, on behalf of the Acquiring Fund, knows of no
facts which might form the basis for the institution of such proceedings and is
not a party to or subject to the provisions of any order, decree or judgment of
any court or governmental body which materially and adversely affects the
Acquiring Fund's business or the Acquiring Fund's ability to consummate the
transactions herein contemplated;
(g) On the Closing Date, the Acquiring Fund will have good and
marketable title to its assets;
(h) The unaudited financial statements of the Acquiring Fund at
August 31, 2006 are in accordance with GAAP consistently applied, and such
statements (copies of which have been furnished to the Acquired Fund) fairly
reflect the financial condition of the Acquiring Fund as of such date, and there
are no known contingent liabilities of the Acquiring Fund as of such date not
disclosed therein;
(i) Since August 31, 2006, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities, or
business other than changes occurring in the ordinary course of business, or any
incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Acquired Fund. For the purposes of this subparagraph (i), a
decline in the net asset value of the Acquiring Fund 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 Acquiring Fund 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
A-7
thereof, and to the best of the Acquiring Fund's knowledge no such return is
currently under audit and no assessment has been asserted with respect to such
returns;
(k) For each fiscal year of its operation, the Acquiring Fund has met
the requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company, has distributed in each such year all net
investment company taxable income (computed without regard to any deduction for
dividends paid) and net realized capital gains (after reduction for any capital
loss carryforward) and has met the diversification requirements of the Code and
the regulations thereunder;
(l) All issued and outstanding Acquiring Fund Shares are, and on the
Closing Date will be, duly and validly issued and outstanding, fully paid and
non-assessable (recognizing that, under Delaware law, it is theoretically
possible that shareholders of the Acquiring Fund could, under certain
circumstances, be held personally liable for obligations of the Acquiring Fund)
and have been offered and sold in every state and the District of Columbia in
compliance in all material respects with applicable registration requirements of
the 1933 Act. The Acquiring Fund does not have outstanding any options, warrants
or other rights to subscribe for or purchase any Acquiring Fund Shares, nor is
there outstanding any security convertible into any Acquiring Fund Shares;
(m) The execution, delivery and performance of this Agreement will
have been fully authorized prior to the Closing Date by all necessary action, if
any, on the part of the Trustees of the Acquiring Trust, on behalf of the
Acquiring Fund, and this Agreement will constitute a valid and binding
obligation of the Acquiring Trust, on behalf of the Acquiring Fund, 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) Acquiring Fund Shares to be issued and delivered to the Acquired
Fund, for the account of the Acquired Fund Shareholders, pursuant to the terms
of this Agreement, will on the Closing Date have been duly authorized and, when
so issued and delivered, will be duly and validly issued Acquiring Fund Shares,
and will be fully paid and non-assessable (recognizing that, under Delaware law,
it is theoretically possible that shareholders of the Acquiring Fund could,
under certain circumstances, be held personally liable for obligations of the
Acquiring Fund);
(o) The information to be furnished by the Acquiring Trust for use in
the registration statements, proxy materials and other documents that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with Federal securities and other laws and regulations applicable
thereto; and
(p) The Acquiring Fund agrees to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act and such
of the state blue sky or securities laws as may be necessary in order to
continue its operations after the Closing Date.
5. COVENANTS OF THE SELLING TRUST ON BEHALF OF THE ACQUIRED FUND
5.1 The Acquired Fund will operate its business in the ordinary
course between the date hereof and the Closing Date except as contemplated by
this Agreement.
A-8
5.2 The Selling Trust will call a meeting of the shareholders of the
Acquired Fund to consider and act upon this Agreement and to take all other
actions necessary to obtain approval of the transactions contemplated herein.
5.3 The Acquired Fund covenants that the Acquiring Fund 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 The Acquired Fund shall assist the Acquiring Fund in obtaining
such information as the Acquiring Fund reasonably requests concerning the
holders of the Acquired Fund's shares.
5.5 Subject to the provisions of this Agreement, the Acquired Fund
will take, or cause to be taken, all action, and do or cause to be done, all
things reasonably necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement.
5.6 As soon as is reasonably practicable after the Closing, the
Acquired Fund will make a liquidating distribution to its shareholders
consisting of the Acquiring Fund Shares received at the Closing.
5.7 The Acquired Fund shall use its reasonable best efforts to
fulfill or obtain the fulfillment of the conditions precedent to effect the
transactions contemplated by this Agreement as promptly as practicable.
5.8 The Selling Trust, on behalf of the Acquired Fund, covenants that
it will, from time to time, as and when reasonably requested by the Acquiring
Trust, on behalf of the Acquiring Fund, 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 Acquiring Trust, on behalf of
the Acquiring Fund, may reasonably deem necessary or desirable in order to vest
in and confirm (a) the Selling Trust's, on behalf of the Acquired Fund's, title
to and possession of the Acquiring Fund Shares to be delivered hereunder, and
(b) the Acquiring Trust's, on behalf of the Acquiring Fund's, title to and
possession of all the assets, and to carry out the intent and purpose of this
Agreement.
6. COVENANTS OF THE ACQUIRING TRUST ON BEHALF OF THE ACQUIRING FUND
6.1 The Acquiring Fund will operate its business in the ordinary
course between the date hereof and the Closing Date except as contemplated by
this Agreement.
6.2 Subject to the provisions of this Agreement, the Acquiring Fund
will 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.
6.3 The Acquiring Fund shall use its reasonable best efforts to
fulfill or obtain the fulfillment of the conditions precedent to effect the
transactions contemplated by this Agreement as promptly as practicable.
6.4 The registration statement on Form N-14 (the "Registration
Statement") which the Acquiring Fund shall have prepared and filed for the
registration under the 1933 Act of the Acquiring Fund Shares to be distributed
to the Acquired Fund Shareholders pursuant hereto, shall
A-9
have become effective under the 1933 Act and no stop orders suspending the
effectiveness thereof shall have been issued and, to the knowledge of the
parties thereto, no investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the 1933 Act.
6.5 The Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state blue sky or securities laws as may be necessary in order to continue
its operations after the Closing Date.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Selling Trust, on behalf of the Acquired Fund,
to consummate the transactions provided for herein shall be subject, at the
Selling Trust's election, to the performance by the Acquiring Trust, on behalf
of the Acquiring Fund, of all the obligations to be performed by it hereunder on
or before the Closing Date, and, in addition thereto, the following further
conditions:
7.1 All representations and warranties of the Acquiring Trust, on
behalf of the Acquiring Fund, contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Closing Date, with the same force and effect as if made on and as of the Closing
Date;
7.2 The Acquiring Trust, on behalf of the Acquiring Fund, 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 Acquiring Trust, on
behalf of the Acquiring Fund on or before the Closing Date; and
7.3 The Acquiring Fund shall have delivered to the Acquired Fund a
certificate executed in the Acquiring Fund's name by its President or Vice
President, and its Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to the Acquired Fund, and dated as of the Closing Date, to the
effect that the representations and warranties of the Acquiring Fund made in
this Agreement are true and correct at and as of the Closing Date, except as
they may be affected by the transactions contemplated by this Agreement and as
to such other matters as the Acquired Fund shall reasonably request.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Trust, on behalf of the Acquiring
Fund, to consummate the transactions provided for herein shall be subject, at
the Acquiring Trust's election, to the performance by the Selling Trust, on
behalf of the Acquired Fund, of all of the obligations to be performed by it
hereunder on or before the Closing Date and, in addition thereto, the following
further conditions:
8.1 All representations and warranties of the Selling Trust, on
behalf of the Acquired Fund, 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;
A-10
8.2 The Selling Trust shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities, as of the Closing Date,
certified by the Treasurer of the Selling Trust;
8.3. The Selling Trust, on behalf of the Acquired Fund, 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 Selling Trust, on
behalf of the Acquired Fund, on or before the Closing Date;
8.4 The Acquired Fund shall have declared and paid a distribution or
distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its investment company taxable income and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to 4:00
p.m. Eastern time on the Closing; and (ii) any undistributed investment company
taxable income and net realized capital gains from any period to the extent not
otherwise already distributed; and
8.5 The Acquired Fund shall have delivered to the Acquiring Fund a
certificate executed in the Acquired Fund's name by its President or Vice
President, and its Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to the Acquiring Fund, and dated as of the Closing Date, to the
effect that the representations and warranties of the Acquired Fund made in this
Agreement are true and correct at and as of the Closing Date, except as they may
be affected by the transactions contemplated by this Agreement and as to such
other matters as the Acquiring Fund shall reasonably request.
9. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND
THE ACQUIRED FUND
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to the Selling Trust, on behalf of the
Acquired Fund, or the Acquiring Trust, on behalf of the Acquiring Fund, the
other party to this Agreement shall, at its option, not be required to
consummate the transactions contemplated by this Agreement:
9.1 This Agreement and the transactions contemplated herein shall
have been approved by the requisite vote of the holders of the outstanding
shares of the Acquired Fund in accordance with the provisions of the Selling
Trust's Declaration of Trust, applicable Massachusetts law and the 1940 Act.
Notwithstanding anything herein to the contrary, the Selling Trust, on behalf of
the Acquired Fund, and the Acquiring Trust, on behalf of the Acquiring Fund, may
not waive the conditions set forth in this paragraph 9.1;
9.2 On the Closing Date no action, suit or other proceeding shall be
pending or, to its knowledge, threatened before any court or governmental agency
in which it is sought to restrain or prohibit, or obtain damages or other relief
in connection with, this Agreement or the transactions contemplated herein;
9.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary by
the Selling Trust and the Acquiring Trust to permit consummation, in all
material respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order or permit would
not involve a risk of a material adverse effect on the assets or properties of
the Acquiring Fund or the Acquired Fund, provided that either party hereto may
for itself waive any of such conditions;
A-11
9.4 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
9.5 The parties shall have received the opinion of McDermott Will &
Emery LLP, addressed to the Acquiring Trust substantially to the effect that,
based upon certain facts, assumptions, and representations, the transaction
contemplated by this Agreement shall, for federal income tax purposes, qualify
as a tax free reorganization described in Section 368(a) of the Code. The
delivery of such opinion is conditioned upon receipt of representations it shall
request of the Acquiring Trust. Notwithstanding anything herein to the contrary,
the Acquiring Trust may not waive the condition set forth in this paragraph 9.5.
10. BROKERAGE FEES AND EXPENSES
10.1 The Selling Trust, on behalf of the Acquired Fund, and the
Acquiring Trust, on behalf of the Acquiring Fund, 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.
10.2 The expenses relating to the proposed Reorganization will be
borne by the Acquired Fund and Phoenix Investment Counsel, Inc. ("PIC"), with
the Acquired Fund and PIC bearing thirty percent and seventy percent,
respectively, of such expenses. 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 on Form
N-14, printing and distributing the Acquiring Fund's prospectus/proxy statement,
legal fees, accounting fees, and securities registration fees. 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.
10.3 In the event the transactions contemplated by this Agreement are
not consummated, then PIC agrees that it shall bear all of the costs and
expenses incurred by both the Acquiring Fund and the Acquired Fund in connection
with such transactions.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1 The Selling Trust and the Acquiring Trust have not made any
representation, warranty or covenant not set forth herein; this Agreement
constitutes the entire agreement between the parties.
11.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall not survive the consummation of the transactions contemplated hereunder.
The covenants to be performed after the Closing shall survive the Closing.
12. TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned by either party by (i) mutual agreement of the parties,
or (ii) by either party if the Closing shall not have occurred on or before June
30, 2007 unless such date is extended by mutual agreement of the parties, or
(iii) by either party if the other party shall have materially
A-12
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.
13. WAIVER
The Acquiring Fund and the Acquired Fund, after consultation with their
respective counsel and by mutual consent of their respective Board of Trustees,
may waive any condition to their respective obligations hereunder, except that
the Acquiring Trust may not waive the condition set forth in paragraph 9.5.
14. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be deemed necessary or advisable and mutually agreed upon in writing by
the authorized officers of the Selling Trust and the Acquiring Trust; provided,
however, that following the meeting of the shareholders of the Acquired Fund
called by the Selling 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 Acquiring Fund Shares to be issued to Acquired Fund Shareholders under
this Agreement to the detriment of such shareholders without their further
approval.
15. 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 Phoenix
Equity Planning Corporation, 101 Munson Street, Greenfield, Massachusetts 01301,
Attn: General Counsel.
16. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
16.1 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.
16.2 This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
16.3 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.
16.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
A-13
16.5 It is expressly agreed that the obligations of the Acquired Fund
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Acquired Fund personally, but shall bind
only the property of the Acquired Fund, as provided in the Declaration of Trust
of the Acquired Fund. The execution and delivery by such officers of the
Acquired Fund 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
property of the Acquired Fund as provided in the Declaration of Trust of the
Acquired Fund.
16.6 It is expressly agreed that the obligations of the parties
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Acquiring Fund personally, but shall bind
only the Acquiring Trust property of the Acquiring Fund, as provided in the
Trust Instrument of the Acquiring Fund. The execution and delivery by such
officers of the Acquiring Fund 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 Acquiring Trust property of the Acquiring Fund as provided
in the Trust Instrument of the Acquiring Fund.
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, all as of
the date first written above.
Attest: PHOENIX INSIGHT FUNDS TRUST ON
BEHALF OF ITS SERIES PHOENIX INSIGHT
INTERNATIONAL FUND
_______________________________ By: _______________________________
By:
Title: Title:
Attest: PHOENIX ADVISER TRUST ON BEHALF OF ITS
SERIES PHOENIX FOREIGN OPPORTUNITIES FUND
_______________________________ By: _______________________________
By:
Title: Title:
A-14
Agreed and accepted as to
paragraphs 10.2 and 10.3 only:
Attest: PHOENIX INVESTMENT COUNSEL, INC.
_______________________________ By: _______________________________
By:
Title: Title:
A-15
STATEMENT OF ADDITIONAL INFORMATION
Acquisition of Assets of
PHOENIX INSIGHT INTERNATIONAL FUND
a series of
PHOENIX INSIGHT FUNDS TRUST
c/o Phoenix Equity Planning Corporation
101 Munson Street
Greenfield, Massachusetts 01301
(800) 243-1574
By and In Exchange For Shares of
PHOENIX FOREIGN OPPORTUNITIES FUND
a series of
PHOENIX ADVISER TRUST
c/o Phoenix Equity Planning Corporation
101 Munson Street
Greenfield, Massachusetts 01301
(800) 243-1574
This Statement of Additional Information, dated February 9, 2007, relating
specifically to the proposed transfer of the assets and liabilities of Phoenix
Insight International Fund ("Insight International"), a series of Phoenix
Insight Funds Trust ("Insight Trust") to Phoenix Foreign Opportunities Fund
("Foreign Opportunities"), a series of Phoenix Adviser Trust ("Adviser Trust"),
in exchange for Class A, Class C and Class I shares of beneficial interest, par
value $.001, of Foreign Opportunities (to be issued to holders of shares of
Insight International), consists of the information set forth below pertaining
to Insight International and Foreign Opportunities and the following described
documents, each of which is incorporated by reference herein:
(1) The Statement of Additional Information of Insight
International, dated June 26, 2006, as supplemented;
(2) The Statement of Additional Information of Foreign
Opportunities, dated May 15, 2006, as supplemented;
(3) Annual Report of Insight International for the year ended
December 31, 2005;
(4) Semiannual Report of Insight International for the six months
ended June 30, 2006;
(5) Annual Report of Foreign Opportunities for the year ended
February 28, 2006;
(6) Semiannual Report of Foreign Opportunities for the six months
ended August 31, 2006; and
(7) Pro Forma Financial Statements dated as of August 31, 2006.
This Statement of Additional Information, which is not a prospectus,
supplements, and should be read in conjunction with, the Prospectus/Proxy
Statement of Insight International and Foreign Opportunities dated February 9,
2007. A copy of the Prospectus/Proxy Statement may be obtained without charge by
calling or writing to Insight Trust or Adviser Trust at the telephone numbers or
addresses set forth above.
-2-
Phoenix Foreign Opportunities Fund/Phoenix Insight International Fund
Pro Forma Combining Schedule of Investments
August 31, 2006 (Unaudited)
Shares or Par Market Value
- --------------------------- ------------- ------------------------------------------ ---------------- ---------------- -------------
Phoenix Phoenix- Phoenix Phoenix-
Foreign Insight Pro Forma Foreign Insight Pro Forma
Opportunities International Combining Opportunities International Combining
Fund Fund Portfolios DESCRIPTION Fund Fund Portfolios
- ----------------------------------------- ------------------------------------------ ----------------------------------------------
FOREIGN COMMON STOCKS (c) --94.3%
AUSTRALIA -- 5.4%
335,500 335,500 Aristocrat Leisure Ltd. (Casinos &
Gaming) 3,355,615 3,355,615
145,900 171,800 317,700 Australia and New Zealand Banking Group
Ltd. (Diversified Banks) 3,035,499 3,574,357 6,609,856
342,411 403,600 746,011 Westfield Group (Real Estate Management
& Development) 4,776,332 5,629,865 10,406,197
225,437 225,437 Westpac Banking Corp. (Diversified Banks) 4,022,464 4,022,464
283,139 283,139 Woolworths Ltd. ( Food Retail) 4,474,848 4,474,848
Total Australia 15,642,294 13,226,686 28,868,980
BELGIUM --2.1%
17,400 17,400 Colruyt SA (Food Retail) 2,958,145 2,958,145
71,800 86,000 157,800 InBev N.V. (Brewers) 3,728,210 4,465,544 8,193,754
Total Belgium 6,686,355 4,465,544 11,151,899
BRAZIL --2.9%
115,600 135,400 251,000 Banco Itau Holding Financieira SA Sponsored
ADR (Diversified Banks) 3,518,864 4,121,576 7,640,440
28,800 28,800 Petroleo Brasileiro SA ADR (Integrated
Oil & Gas) 2,582,208 2,582,208
179,300 123,100 302,400 Souza Cruz SA (Tobacco) 2,968,820 2,038,270 5,007,090
Total Brazil 6,487,684 8,742,054 15,229,738
FINLAND --0.5%
125,300 125,300 Nokia OYJ (Communications Equipment) 2,624,630 2,624,630
Total Finland - 2,624,630 2,624,630
FRANCE --4.7%
112,000 112,000 AXA SA (Multi-line Insurance) 4,161,168 4,161,168
91,000 105,500 196,500 M6-Metropole Television SA (Broadcasting
& Cable TV) 2,845,826 3,299,283 6,145,109
44,300 77,800 122,100 Total SA (Integrated Oil & Gas) 2,990,981 5,252,783 8,243,764
19,914 19,914 Total SA Sponsored ADR (Integrated Oil & Gas) 1,342,801 1,342,801
140,000 140,000 Vivendi SA (Movies & Entertainment) 4,815,835 4,815,835
Total France 7,179,608 17,529,069 24,708,677
INDIA --1.9%
52,600 52,600 HDFC Bank Ltd. (Diversified Banks) 963,099 963,099
92,100 66,000 158,100 HDFC Bank Ltd. ADR (Diversified Banks) 5,238,648 3,754,080 8,992,728
Total India 6,201,747 3,754,080 9,955,827
IRELAND --5.5%
112,275 81,100 193,375 Allied Irish Banks plc (Diversified Banks) 2,927,162 2,114,387 5,041,549
50,100 50,100 Allied Irish Banks plc (Diversified Banks) 1,309,384 1,309,384
631,735 743,500 1,375,235 Anglo Irish Bank Corp. plc (Diversified Banks) 10,440,563 12,287,682 22,728,245
Total Ireland 13,367,725 15,711,453 29,079,178
ITALY --1.6%
122,500 158,000 280,500 ENI S.p.A. (Integrated Oil & Gas) 3,750,881 4,837,871 8,588,752
Total Italy 3,750,881 4,837,871 8,588,752
JAPAN --8.2%
280,000 280,000 Asahi Glass Co., Ltd. (Building Products) 3,673,069 3,673,069
420,000 420,000 Bank of Yokohama, Ltd. (The) (Regional Banks) 3,320,073 3,320,073
109,500 109,500 Canon, Inc. (Office Electronics) 5,447,251 5,447,251
70,400 48,800 119,200 Daito Trust Construction Co. Ltd.
(Homebuilding) 3,658,077 2,535,713 6,193,790
351 260 611 Millea Holdings, Inc. (Property & Casualty
Insurance) 6,458,197 4,783,849 11,242,046
57,000 57,000 Takeda Pharmaceutical Co., Ltd.
(Pharmaceuticals) 3,772,648 3,772,648
96,000 84,200 180,200 Toyota Motor Corp. (Automobile Manufacturers) 5,209,081 4,568,798 9,777,879
Total Japan 15,325,355 28,101,401 43,426,756
MEXICO --3.7%
75,200 91,000 166,200 America Movil S.A. de C.V. ADR Series L
(Wireless Telecommunication Service) 2,805,712 3,395,210 6,200,922
124,300 149,600 273,900 America Telecom S.A. de C.V. A1 (Wireless
Telecommunication Service) (b) 847,426 1,019,911 1,867,337
1,380,100 1,296,500 2,676,600 Grupo Modelo, S.A. de C.V. Series C (Brewers) 5,814,834 5,462,599 11,277,433
Total Mexico 9,467,972 9,877,720 19,345,692
NETHERLANDS --3.1%
39,046 500 39,546 Aalberts Industries N.V. (Industrial Machinery) 3,221,527 41,253 3,262,780
3,659 3,659 ABN AMRO Holding N.V. (Diversified Banks) 104,344 104,344
103,000 103,000 ING Groep NV (Other Diversified Financial
Services) 4,453,590 4,453,590
97,700 123,840 221,540 TNT N.V. (Air Freight & Logistics) 3,673,685 4,656,593 8,330,278
Total Netherlands 6,895,212 9,255,780 16,150,992
NORWAY --1.5%
74,100 87,700 161,800 Orkla ASA (Industrial Conglomerates) 3,633,502 4,300,380 7,933,882
Total Norway 3,633,502 4,300,380 7,933,882
SINGAPORE --1.0%
489,000 489,000 DBS Group Holdings, Ltd. (Diversified Banks) 5,593,010 5,593,010
Total Singapore - 5,593,010 5,593,010
SOUTH AFRICA --1.6%
210,623 220,600 431,223 Remgro Ltd. (Industrial Conglomerates) 4,181,808 4,379,896 8,561,704
Total South Africa 4,181,808 4,379,896 8,561,704
SOUTH KOREA --3.3%
2,637 2,637 Amorepacific Corp. (Personal Products) (b) 1,146,641 1,146,641
161,800 159,700 321,500 Kangwon Land, Inc. (Casino & Gaming) 3,063,310 3,023,552 6,086,862
47,200 47,200 KT&G Corp. (Tobacco) 2,769,250 2,769,250
1,139 1,211 2,350 Lotte Confectionary Co. Ltd. (Packaged
Foods & Meats) 1,430,118 1,520,521 2,950,639
71,490 71,490 S1 Corp. (Specialized Consumer Services) 2,918,946 2,918,946
2,500 2,500 Samsung Electronics Co. Ltd. (Semiconductors) 1,690,419 1,690,419
Total South Korea 11,328,265 6,234,492 17,562,757
SPAIN --10.0%
361,410 409,100 770,510 Banco Bilbao Vizcaya Argentaria S.A.
(Diversified Banks) 8,260,271 9,350,258 17,610,529
487,338 389,373 876,711 Enagas S.A. (Gas Utilities) 11,107,223 8,874,442 19,981,665
247,800 146,843 394,643 Red Electrica de Espana (Electric Utilities) 9,565,324 5,668,285 15,233,609
Total Spain 28,932,818 23,892,985 52,825,803
SWITZERLAND --11.3%
87,446 54,020 141,466 Kuehne & Nagel International AG (Marine) 6,148,963 3,798,538 9,947,501
497 497 Lindt & Spruengli AG (Packaged Foods & Meats) 1,082,147 1,082,147
18,150 19,988 38,138 Nestle S.A. Registered Shares (Packaged
Foods & Meats) 6,241,205 6,873,235 13,114,440
104,400 104,400 Novartis AG (Pharmaceuticals) 5,958,565 5,958,565
65,876 65,876 Novartis AG ADR (Pharmaceuticals) 3,762,837 3,762,837
50,000 53,072 103,072 Roche Holding AG Registered Shares
(Pharmaceuticals) 9,217,208 9,783,513 19,000,721
52,800 63,300 116,100 UBS AG (Diversified Capital Markets) 2,987,789 3,581,952 6,569,741
Total Switzerland 29,440,149 29,995,803 59,435,952
TAIWAN --1.4%
353,743 419,398 773,141 Taiwan Semiconductor Manufacturing Co. Ltd.
Sponsored ADR (Semiconductors) 3,293,347 3,904,597 7,197,944
Total Taiwan 3,293,347 3,904,597 7,197,944
UNITED KINGDOM --22.8%
96,176 96,176 Barrat Developments plc (Homebuilding) 1,819,323 1,819,323
388,779 445,067 833,846 British American Tobacco plc (Tobacco) 10,659,592 12,202,906 22,862,498
354,571 423,900 778,471 Cadbury Schweppes plc (Packaged Foods
& Meats) 3,773,899 4,511,808 8,285,707
20,560 20,560 Cattles plc (Consumer Finances) 128,595 128,595
412,475 466,449 878,924 Diageo plc (Distillers & Vintners) 7,343,186 8,304,073 15,647,259
234,585 229,607 464,192 HSBC Holdings plc (Diversified Banks) 4,259,012 4,168,640 8,427,652
234,215 275,862 510,077 Imperial Tobacco Group plc (Tobacco) 8,071,766 9,507,051 17,578,817
84,737 105,400 190,137 Reckitt Benckiser plc (Household Products) 3,517,251 4,374,944 7,892,195
136,034 209,601 345,635 Royal Bank of Scotland Group plc
(Diversified Banks) 4,615,627 7,111,749 11,727,376
43,357 43,357 Signet Group plc (Specialty Stores) 88,332 88,332
1,864,816 1,751,389 3,616,205 Tesco plc (Food Retail) 13,394,933 12,580,192 25,975,125
Total United Kingdom 57,454,589 62,978,290 120,432,879
UNITED STATES --1.8%
264,000 204,200 468,200 News Corp. Class B (Movies & Home
Entertainment) 5,238,639 4,052,008 9,290,647
Total United States 5,238,639 4,052,008 9,290,647
Total Foreign Common Stocks -- 94.3% 234,507,950.00 263,457,749.00 497,965,699.00
(Identified cost $192,302,999,
$224,962,832 and $417,265,831)
WARRANTS --0.3%
HDFC Bank Ltd. Class A Strike Price .00001
Indian Rupees, Exp. 6/28/10
45,720 31,000 76,720 (Diversified Banks) (b) 837,042 558,394 1,395,436
Total Warrants 837,042 558,394 1,395,436
(Identified cost $715,682, $464,669
and $1,180,351)
TOTAL LONG TERM INVESTMENTS --94.6% 235,344,992 264,016,143 499,361,135
(Identified cost $193,018,681,
$225,427,501 and $418,446,182)
SHORT TERM INVESTMENTS --5.7%
COMMERCIAL PAPER (d) --5.7%
495,000 495,000 BellSouth Corp. 494,496 494,496
2,885,000 2,885,000 Danske Corp. 2,882,476 2,882,476
7,285,000 7,285,000 Du Pont (E.I.) de Nemours & Co. 7,279,738 7,279,738
2,022,000 2,022,000 George Street Finance LLC 2,022,000 2,022,000
5,000,000 6,385,000 11,385,000 Lockhart Funding LLC 5,000,000 6,385,000 11,385,000
3,300,000 3,300,000 Old Line Funding Corp. 3,294,225 3,294,225
2,800,000 2,800,000 Target Corp. 2,798,379 2,798,379
TOTAL SHORT-TERM INVESTMENTS 14,301,738 15,854,576 30,156,314
(Identified cost $14,301,738, $15,854,576
and $30,156,314)
TOTAL INVESTMENTS --100.3% (a) 249,646,730 279,870,719 529,517,449
(Identified cost $207,320,419,
$241,282,077 and $448,602,496)
Other assets and liabilities, net --(0.3)% (5,915,809) 4,160,449 (1,755,360)
NET ASSETS --100.0% 243,730,921 284,031,168 527,762,089
============== ============== =============
(a) Federal Income Tax Information: Net unrealized
appreciation of investment securities is
comprised of gross appreciation of $80,240,255
and gross depreciation of $1,114,523 for federal
income tax purposes. At August 31, 2006, the
aggregate cost of securities for federal income
tax purposes was $450,391,717.
(b) Non-income producing.
(c) Foreign common stocks are determined based on
the country in which the security is issued. The
country of risk is determined based on criteria
described in Note "Foreign security country
determination" in the Notes to Proforma Statements.
(d) The rate shown is the discount rate.
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
Phoenix Foreign Opportunities Fund/Phoenix Insight International Fund
Pro Forma Combining Statement of Assets and Liabilities
August 31, 2006 (Unaudited)
=============== =============== =============== ================
Phoenix Phoenix-
Foreign Insight Pro Forma
Opportunities International Adjustments Combining
Fund Fund Portfolios
=============== =============== =============== ================
ASSETS
Investment securities at value
(Identified cost $207,320,419, $241,282,077
and $448,602,496) $ 249,646,730 $ 279,870,719 $ 529,517,449
Foreign Currency at value
(Identified cost $) -
Cash 719,161 543,017 1,262,178
Receivables
Dividends 566,189 821,884 1,388,073
Investment securities sold 53,373 41,369,805 41,423,178
Fund shares sold 835,850 11,488 847,338
Tax reclaims 128,435 225,285 353,720
Unrealized appreciation on forward currency
contracts 896,352 335,151 1,231,503
Prepaid expenses 44,252 48,117 92,369
Trustee retainer -
--------------- --------------- --------------- ----------------
Total assets 252,890,342 323,225,466 - 576,115,808
--------------- --------------- --------------- ----------------
LIABILITIES
Cash overdraft - -
Payables
Investment securities purchased 7,788,009 37,839,402 45,627,411
Fund shares repurchased 138,360 113,889 252,249
Foreign capital gains taxes 1,566 1,566
Collateral on securities loaned -
Taxes Payable -
Investment advisory fee 167,273 201,274 368,547
Transfer agent fee 47,335 4,624 51,959
Distribution and service fees 48,527 991 49,518
Administration fee 15,183 2,487 17,670
Trustee's fee 291 760 1,051
Dividend Distributions -
Other accrued expenses 61,465 97,295 (a) 158,760
Unrealized depreciation on forward currency
contracts 891,412 959,676 1,851,088
--------------- --------------- --------------- ----------------
Total liabilities 9,159,421 39,220,398 - 48,379,819
--------------- --------------- --------------- ----------------
NET ASSETS $ 243,730,921 $ 284,005,068 - $ 527,735,989
=============== =============== =============== ================
Net Assets Consist of:
Capital paid in on shares of beneficial interest $ 188,959,150 $ 207,029,508 $ 395,988,658
Undistributed net investment income (loss) 772,125 1,922,395 $ 2,694,520
Accumulated net realized gain (loss) 11,627,438 37,145,067 $ 48,772,505
Net unrealized appreciation 42,372,208 37,934,198 - 80,306,406
--------------- --------------- --------------- ----------------
Net Assets $ 243,730,921 $ 284,031,168 $ - $ 527,762,089
=============== =============== =============== ================
CLASS I
Shares of beneficial interest outstanding, no
par value, unlimited authorization 2,313,220 13,680,240 (1,514,563)(b) 14,478,897
Net assets $ 53,160,288 $ 279,580,359 $ 332,740,647
Net asset value and offering price per share $ 22.98 $ 20.44 $ 22.98
CLASS A
Shares of beneficial interest outstanding, no
par value, unlimited authorization 7,736,169 219,881 (30,951)(b) 7,925,099
Net assets $ 177,749,936 $ 4,340,957 $ 182,090,893
Net asset value per share $ 22.98 $ 19.74 $ 22.98
Offering price per share NAV/(1- 5.75%) $ 24.38 $ 20.95 $ 24.38
CLASS C
Shares of beneficial interest outstanding 560,846 5,571 (765)(b) 565,652
Net assets $ 12,820,697 $ 109,852 $ 12,930,549
Net asset value and offering price per share $ 22.86 $ 19.72 $ 22.86
(a) Merger-related expenses. Insight International will pay 30% of the total
expenses of $87,000 incurred by the funds in connection with the
reorganization.
(b) Adjustment reflects reduced shares issued in conversion.
See Notes to Pro Forma Financial Statements.
Phoenix Foreign Opportunities Fund/Phoenix Insight International Fund
Pro Forma Combining Statement of Operations
August 31, 2006 (Unaudited)
================== ================== ================== ==================
Phoenix Phoenix-Insight Pro Forma
Foreign International Adjustments Combining
Opportunities Fund Fund Portfolios
================== ================== ================== ==================
INVESTMENT INCOME
Interest $ 258,044 $ 491,639 $ $ 749,683
Dividends 4,030,045 7,135,998 11,166,043
Security lending - - -
Foreign taxes withheld (342,501) (651,278) (993,779)
------------------ ------------------ ------------------ ------------------
Total investment income 3,945,588 6,976,358 10,921,946
------------------ ------------------ ------------------ ------------------
EXPENSES
Investment advisory fee 1,275,735 2,526,776 (358,084) 3,444,427
Service fees - Class A 325,537 2,455 6,081 334,073
Distribution and service fees - Class B - - - -
Distribution and service fees - Class C 60,953 191 (79) 61,065
Distribution and service fees - Investor Class - - - -
Distribution and service fees - Class I - 38,357 (38,357) (0)
Distribution and service fees - Class N - 3,406 (3,406) (0)
Financial agent fee 84,746 24,352 (109,098) (0)
Transfer agent 222,264 40,723 43,419 306,406
Administration 37,164 357,658 44,242 439,064
Registration 30,539 25,702 (25,702) 30,539
Printing 58,517 28,765 (b) (17,328) 69,954
Professional 33,814 32,219 (b) (21,643) 44,390
Custodian 109,913 158,075 (27,161) 240,827
Trustees 33,399 10,455 2,559 46,413
Miscellaneous 10,817 36,602 3,517 50,936
------------------ ------------------ ------------------ ------------------
Total expenses 2,283,398 3,285,734 (501,040) (a) 5,068,092
Custodian fees paid indirectly (2,674) - - (2,674)
Less expenses reimbursed by investment
advisor (311,593) (649,064) 745,000 (215,657)
------------------ ------------------ ------------------ ------------------
Net expenses 1,969,131 2,636,671 243,960 4,849,762
------------------ ------------------ ------------------ ------------------
NET INVESTMENT INCOME (LOSS) 1,976,457 4,339,687 (243,960) 6,072,185
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on securities 21,379,085 54,010,845 - 75,389,930
Net realized gain (loss) on foreign currency (1,721,603) (1,285,047) - (3,006,650)
Net change in unrealized appreciation
(depreciation) on investments 2,877,532 (860,107) - 2,017,425
Net change in unrealized appreciation
(depreciation) on foreign currency
transactions. (7,229) (647,245) - (654,474)
-
Net gain (loss) on investments 22,527,785 51,218,446 - 73,746,231
------------------ ------------------ ------------------ ------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERA$IONS $ 24,504,242 $ 55,558,133 $ (243,960) $ 79,818,416
================== ================== ================== ==================
Adjustments:
(a) Adjustments are true-ups to reflect combined fund expenses
(b) Professional expenses for Insight Int'l were increased by $6,600 and
printing expenses by $19,500 to reflect one-time merger related expenses.
Expenses were estimated to be $65,000 for proxy expenses, $12,000 for audit,
and $10,000 for legal. The merging fund bears 30% of these expenses.
See Notes to Pro Forma Financial Statements.
PHOENIX FOREIGN OPPORTUNITIES FUND/PHOENIX INSIGHT INTERNATIONAL FUND
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS
AUGUST 31, 2006
1. BASIS OF COMBINATION
The accompanying unaudited Pro Forma Combining Schedule of Investments,
Statement of Assets and Liabilities and Statement of Operations are presented to
show the effect to the proposed merger of the Phoenix Insight International Fund
("Merging Fund") into Phoenix Foreign Opportunities Fund ("Surviving Fund").
Under the terms of the Plan of Reorganization the proposed merger will be
accounted for by the method of accounting for tax-free mergers of investment
companies. Under the terms of the Plan of Reorganization the merger provides for
the transfer of all the assets of Phoenix Insight International Fund to Phoenix
Foreign Opportunities Fund and the subsequent liquidation of Phoenix Insight
International Fund. The accounting survivor in the proposed merger will be
Phoenix Foreign Opportunities Fund. This is because the Surviving Fund will
invest in a style that is similar to the way in which Phoenix Insight
International Fund is currently operated. The Reorganization should also create
better efficiencies for the portfolio management team. Phoenix Insight
International Fund and the Adviser, Phoenix Investment Counsel, Inc. ("PIC")
will pay all costs of the reorganization, with Phoenix Insight International
Fund paying 30% of such costs and PIC paying 70%.
The pro forma combined statements should be read in conjunction with the
historical financial statements of the Phoenix Foreign Opportunities 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.
Phoenix Foreign Opportunities Fund and Phoenix Insight International Fund 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 reduction of shares of
Phoenix Foreign Opportunities Fund at August 31, 2006 in connection with the
proposed reorganization. The amount of reduced shares was calculated based on
the net assets, as of August 31, 2006, of Phoenix Insight International Fund of
$4,340,957, $109,852, and $279,580,359 for Class A, Class C, and Class I
respectively and the net asset value of Phoenix Foreign Opportunities Fund of
$22.98, $22.86, and $22.98 for Class A, Class C, and Class I respectively.
Shares of Phoenix Foreign Opportunities Fund were reduced by 30,951 for Class A,
765 for Class C, and 1,514,563 for Class I in exchange for Class A, Class C, and
Class I shares , respectively, of Insight International. The Pro Forma Statement
of Assets & Liabilities reflects total shares outstanding of the combined fund
and the amount of shares to be issued to Phoenix Insight International Fund
shareholders.
3. PRO FORMA OPERATIONS
Pro Forma operating expenses are based on actual expenses of Phoenix Insight
International Fund and Phoenix Foreign Opportunities Fund, with certain expenses
adjusted to reflect the expected expenses of the combined entity. The investment
advisory and administration fees have been calculated for the combined Funds
based on the fee schedule in effect for Phoenix Foreign Opportunities Fund at
the combined level of average net assets for the period ended August 31, 2006.
4. PORTFOLIO VALUATION
Equity securities are valued at the official closing price (typically last sale)
on the exchange on which the securities are primarily traded, or if no closing
price is available, at the last bid price.
As required, some securities and assets may be valued at fair value as
determined in good faith by or under the direction of the trustees.
Short-term investments having a remaining maturity of 60 days or less are valued
at amortized cost, which approximates market.
5. FOREIGN SECURITY COUNTRY DETERMINATION
A combination of the following criteria is used to assign the countries of risk
listed in the schedules of investments: country of incorporation, actual
building address, primary exchange on which the security is traded and country
in which the greatest percentage of company revenue is generated.
6. COMPLIANCE
As of August 31, 2006, all the securities held by the Merging Fund comply with
the compliance guidelines, investment restrictions and diversification
requirements under the Investment Company Act of 1940, as amended. The Surviving
Fund has elected to be taxed as a "regulated investment company" under the
requirements of Subchapter M of the Internal Revenue Code ("IRC"). After the
acquisition, the Surviving Fund intends to continue to qualify as a regulated
investment company by complying with the provisions available to certain
investment companies, as defined in applicable sections of the IRC, and to make
distributions of taxable income sufficient to relieve it from all, or
substantially all, Federal income taxes.
7. FEDERAL INCOME TAX INFORMATION
The Funds have capital loss carryovers, which may be used to offset future
capital gains, as follows:
Expiration Date Acquiring Fund Target fund
Phoenix Foreign Phoenix Insight
Opportunities Fund International Fund
2009 $3,897,457
2010 $1,299,153 $9,696,219
2011 $5,659,503
Total $5,196,610 $15,355,722
The Funds may not realize the benefit of these losses to the extent each Fund
does not realize gains on investments prior to the expiration of the capital
loss carryover.
PHOENIX ADVISER TRUST
PART C
OTHER INFORMATION
Item 15. Indemnification.
Article VI of Phoenix Adviser Trust's (the "Trust's") Amended and
Restated Trust Instrument provides for indemnification of certain persons acting
on behalf of the Funds. In general, Trustees and officers will be indemnified
against liability and against all expenses of litigation incurred by them in
connection with any claim, action, suit or proceeding (or settlement of the
same) in which they become involved by virtue of their office in connection with
the Funds, unless their conduct is determined to constitute willful misfeasance,
bad faith, gross negligence or reckless disregard of their duties, or unless it
has been determined that they have not acted in good faith in the reasonable
belief that their actions were in the best interests of the Funds. A
determination that a person covered by the indemnification provisions is
entitled to indemnification may be made by the court or other body before which
the proceeding is brought, or by either a vote of a majority of a quorum of
Trustees who are neither "interested persons" of the Trust nor parties to the
proceeding or by an independent legal counsel in a written opinion. The Funds
also may advance money for these expenses, provided that the Trustee or officer
undertakes to repay the Funds if his conduct is later determined to preclude
indemnification, and that either he provide security for the undertaking, the
Trust be insured against losses resulting from lawful advances or a majority of
a quorum of disinterested Trustees, or independent counsel in a written opinion,
determines that he ultimately will be found to be entitled to indemnification.
The Trust also maintains a liability insurance policy covering its Trustees and
officers. The Investment Advisory Agreement, Underwriting Agreement, Master
Custodian Contract, and Transfer Agency and Service Agreement, as amended, each
provides that the Trust will indemnify the other party (or parties as the case
may be) to the agreement for certain losses.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to Trustees, Officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a Trustee, Officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
Trustee, Officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification is against public policy
as expressed in the Act and will be governed by the final adjudication of such
issue.
Item 16. Exhibits:
1(a). Amended and Restated Trust Instrument, dated as of May 9, 2003.
Incorporated herein by reference to the Registrant's Registration
Statement on Form N-1A filed with the SEC on June 16, 2003 ("Form N-1A
Registration Statement").
C-1
1(b). Certificate of Amendment Redesignating Series dated, August 5, 2003.
Incorporated by reference to Pre-Effective Amendment No. 1 the
Registrant's Registration Statement on Form N-1A filed with the SEC on
September 26, 2003.
1(c). Certificate of Amendment, dated October 13, 2003. Incorporated by
reference to Post-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form N-1A filed with the SEC on February 27,
2004 ("Post-Effective Amendment No. 2").
1(d). Amendment to Amended and Restated Trust Instrument, dated December 18,
2003. Incorporated by reference to Post-Effective Amendment No. 2.
1(e). Second Amendment to Amended and Restated Trust Instrument, dated July
6, 2004. Incorporated by reference to Post-Effective Amendment No. 5 to
the Registrant's Registration Statement on Form N-1A filed with the SEC
on June 20, 2005 ("Post-Effective Amendment No. 5").
2(a). Bylaws. Incorporated by reference from Form N-1A Registration
Statement.
2(b). First Amendment to the Bylaws. Incorporated by reference to
Post-Effective Amendment No. 3 to the Registrant's Registration
Statement on Form N-1A filed with the SEC on April 29, 2004.
2(c). Second Amendment to the Bylaws. Incorporated by reference to
Post-Effective Amendment No. 4 to the Registrant's Registration
Statement on Form N-1A filed with the SEC on April 21, 2005.
2(d). Third Amendment to the Bylaws. Incorporated by reference to
Post-Effective Amendment No. 5.
3. Not applicable.
4. Form of Agreement and Plan of Reorganization. Exhibit A to the
Prospectus contained in Part A of this Registration Statement.
5. None other than as set forth in Exhibits 1 and 2.
6(a). Investment Advisory Agreement between Phoenix Investment Counsel, Inc.
("PIC") and the Registrant, dated as of June 20, 2005. Incorporated by
reference to Post-Effective Amendment No. 5.
6(b). Subadvisory Agreement between PIC and Vontobel Asset Management, Inc.,
dated June 20, 2005. Incorporated by reference to Post-Effective
Amendment No. 5.
7(a). Underwriting Agreement between the Registrant and Phoenix Equity
Planning Corporation ("PEPCO"), dated as of June 20, 2005. Incorporated
by reference to Post-Effective Amendment No. 5.
7(b). Form of Sales Agreement between PEPCO and dealers. Incorporated by
reference to Post-Effective Amendment No. 6 to the Registrant's
Registration Statement on Form N-1A filed on March 15, 2006 ("Post
Effective Amendment No. 6").
C-2
8. Form of Deferred Compensation Plan. Incorporated by reference to
Post-Effective Amendment No. 6.
9(a). Master Custodian Contract between the Registrant and State Street Bank
and Trust Company dated May 1, 1997. Incorporated by reference to
Post-Effective Amendment No. 5.
9(b). Amendment dated February 10, 2000 to Master Custodian Contract between
Registrant and Trust Company. Incorporated by reference to
Post-Effective Amendment No. 5.
9(c). Amendment dated July 2, 2001 to Master Custodian Contract between
Registrant and Trust Company. Incorporated by reference to
Post-Effective Amendment No. 5.
9(d). Amendment dated May 10, 2002 to Master Custodian Contract between
Registrant and Trust Company. Incorporated by reference to
Post-Effective Amendment No. 5.
10(a). Class A Shares Amended Distribution and Shareholder Servicing Plan.
Incorporated by reference to Post-Effective Amendment No. 5.
10(b). Class C Shares Amended Distribution and Shareholder Servicing Plan.
Incorporated by reference to Post-Effective Amendment No. 5.
10(c). 2004 Amended and Restated Rule 18f-3 Multi-Class Distribution Plan.
Incorporated by reference to Post-Effective Amendment No. 5.
10(d). First Amendment to 2004 Amended and Restated Rule 18f-3 Multi-Class
Distribution Plan. Incorporated by reference to Post-Effective
Amendment No. 5.
10(e). Second Amendment to 2004 Amended and Restated Rule 18f-3 Multi-Class
Distribution Plan. Incorporated by reference to Post-Effective
Amendment No. 5.
11. Opinion and consent of Kevin J. Carr, Esq. Filed herewith.
12. Tax opinion and consent of McDermott Will & Emery LLP. To be filed by
amendment.
13(a). Transfer Agency and Service Agreement between the Registrant and PEPCO,
dated as of June 1, 1994. Incorporated by reference to Post-Effective
Amendment No. 5.
13(b). First Amendment to the Transfer Agency and Service Agreement between
Registrant and PEPCO, dated February 28, 2004. Incorporated by
reference to Post-Effective Amendment No. 5.
14(a). Consent of PricewaterhouseCoopers LLP with respect to Phoenix Foreign
Opportunities Fund of the Registrant. Filed herewith.
14(b). Consent of KPMG LLP with respect to Phoenix Insight International Fund
of the Phoenix Insight Funds Trust. Filed herewith.
15. Not applicable.
C-3
16. Power of Attorney for E. Virgil Conway, Harry Dalzell-Payne, Francis E.
Jeffries, Dr. Leroy Keith, Jr., Marilyn E. LaMarche, Philip R.
McLoughlin, Geraldine M. McNamara and James M. Oates. Filed herewith.
17. Form of Proxy Card for Phoenix Insight International Fund. 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 that is a
part of this Registration Statement by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act of 1933, the reoffering prospectus will contain the
information called for by the applicable registration form for
reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to
the Registration Statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities
Act of 1933, each post-effective amendment shall be deemed to be a new
Registration Statement for the securities offered therein, and the
offering of the securities at that time shall be deemed to be the
initial bona fide offering of them.
(3) The undersigned Registrant agrees to file a post-effective amendment to
this Registration Statement which will include the tax opinion required
by Item 16.12.
C-4
SIGNATURES
As required by 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 9th day of January, 2007.
PHOENIX ADVISER TRUST
ATTEST: /s/ Kevin J. Carr By: /s/ George R. Aylward
----------------- ---------------------
Name: Kevin J. Carr Name: George R. Aylward
Title: Secretary Title: President
As required by the Securities Act of 1933, the following persons have
signed this Registration Statement in the capacities indicated on the 9th day
of January, 2007.
Signatures Title
- ---------- -----
/s/ George R. Aylward President (Principal Executive Officer)
- --------------------- and Trustee
George R. Aylward
/s/ W. Patrick Bradley Chief Financial Officer and Treasurer
- ----------------------
W. Patrick Bradley
/s/ E. Virgil Conway Trustee
- --------------------
E. Virgil Conway*
/s/ Harry Dalzell-Payne Trustee
- -----------------------
Harry Dalzell-Payne*
/s/ Francis E. Jeffries Trustee
- -----------------------
Francis E. Jeffries*
/s/ Leroy Keith, Jr. Trustee
- --------------------
Leroy Keith, Jr.*
/s/ Marilyn E. LaMarche Trustee
- -----------------------
Marilyn E. LaMarche*
/s/ Philip R. McLoughlin Chairman
- ------------------------
Philip R. McLoughlin*
/s/ Geraldine M. McNamara Trustee
- -------------------------
Geraldine M. McNamara*
/s/ James M. Oates Trustee
- ------------------
James M. Oates*
__________________ Trustee
Richard E. Segerson
C-5
_____________________ Trustee
Ferdinand L.J. Verdonck
* By: /s/ George R. Aylward
---------------------
George R. Aylward
Attorney-in-fact, pursuant to powers of attorney.
C-6
EXHIBIT INDEX
Exhibit Item
- ------- ----
11. Opinion and consent of Kevin J. Carr, Esq.
14(a). Consent of PricewaterhouseCoopers LLP with respect to Phoenix
Foreign Opportunities Fund of the Registrant.
14(b). Consent of KPMG LLP with respect to Phoenix Insight
International Fund of the Phoenix Insight Funds Trust.
16. Power of Attorney for E. Virgil Conway, Harry Dalzell-Payne,
Francis E. Jeffries, Dr. Leroy Keith, Jr., Marilyn E. LaMarche,
Philip R. McLoughlin, Geraldine M. McNamara and James M. Oates.
17. Form of Proxy Card for Phoenix Insight International Fund.
C-7