As filed with the Securities and Exchange Commission on July 3, 2007
1933 Act Registration No. 333-143579
- --------------------------------------------------------------------------------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-14/A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[X] Pre-Effective [ ] Post-Effective
Amendment No. 1 Amendment No.
PHOENIX EQUITY TRUST
(Phoenix Value 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, no
par value per share.
1
The Registrant has registered an indefinite amount of securities of its
Phoenix Value 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
June 30, 2006 was filed with the Commission on September 7, 2006.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that the Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
2
PHOENIX INVESTMENT TRUST 97
101 Munson Street
Greenfield, Massachusetts 01301
July __, 2007
Dear Shareholder:
The Board of Trustees of Phoenix Investment Trust 97 ("Trust 97") has
approved the reorganization of Phoenix Value Equity Fund ("Value Equity") into
Phoenix Value Opportunities Fund ("Value Opportunities"), a series of Phoenix
Equity Trust. Value Equity's investment objectives are similar to Value
Opportunities' objective and the investment strategies of the Funds are
substantially similar. The reorganization is expected to be completed on or
about July 13, 2007. Once the reorganization is completed, you will become a
shareholder of Value Opportunities and will receive shares of the corresponding
class of Value Opportunities with an aggregate net value equal to the aggregate
net asset value of your investment in Value Equity. No sales charge will be
imposed in connection with the reorganization. Value Opportunities will pay all
costs of the reorganization.
The Board of Trustees of Trust 97 believes that the reorganization
offers you the opportunity to pursue your goals in a larger fund. The Board of
Trustees has carefully considered and has unanimously approved the
reorganization, as described in the accompanying materials, and believes that
the reorganization is in the best interests of Value Equity and its
shareholders.
You are not being asked to vote on, or take any other action in
connection with, the reorganization.
If you have any questions, please call (860) 243-1574 between 8:00 a.m.
and 6:00 p.m. Eastern time, Monday through Thursday, Friday until 5:00 p.m.
Sincerely,
George R. Aylward
President
ACQUISITION OF ASSETS OF
PHOENIX VALUE EQUITY FUND
a series of
PHOENIX INVESTMENT TRUST 97
c/o Phoenix Equity Planning Corporation
101 Munson Street
Greenfield, Massachusetts 01301
(800) 243-1574
BY AND IN EXCHANGE FOR SHARES OF
PHOENIX VALUE OPPORTUNITIES FUND
a series of
PHOENIX EQUITY TRUST
c/o Phoenix Equity Planning Corporation
101 Munson Street
Greenfield, Massachusetts 01301
(800) 243-1574
PROSPECTUS/INFORMATION STATEMENT
DATED JULY __, 2007
This Prospectus/Information Statement is being furnished in connection
with the reorganization of Phoenix Value Equity Fund ("Value Equity"), a series
of Phoenix Investment Trust 97 ("Trust 97"), into the Phoenix Value
Opportunities Fund ("Value Opportunities"), a series of Phoenix Equity Trust
("Equity Trust"). This Prospectus/Information Statement is being mailed on or
about July ___, 2007.
THIS PROSPECTUS/INFORMATION STATEMENT IS FOR INFORMATIONAL PURPOSES ONLY. YOU DO
NOT NEED TO DO ANYTHING IN RESPONSE TO THIS PROSPECTUS/INFORMATION STATEMENT. WE
ARE NOT ASKING YOU FOR A PROXY OR WRITTEN CONSENT, AND YOU ARE REQUESTED NOT TO
SEND US A PROXY OR WRITTEN CONSENT.
GENERAL
The Board of Trustees of Trust 97 has approved the reorganization of
Value Equity into Value Opportunities. Value Equity and Value Opportunities are
sometimes referred to respectively in this Prospectus/Information Statement
individually as a "Fund" and collectively as the "Funds."
Prior to the reorganization, Class B shares of Value Equity will be
converted to Class A shares of that Fund. In the reorganization, all of the
assets of Value Equity will be acquired by Value Opportunities in exchange for
Class A and Class C shares of Value Opportunities, and
1
Value Opportunities will assume all of the liabilities of Value Equity (the
"Reorganization"). Class A and Class C shares of Value Opportunities will be
distributed to each shareholder in liquidation of Value Equity, and Value Equity
will be terminated as a series of Trust 97. You will then hold that number of
full and fractional shares of Value Opportunities which have an aggregate net
asset value equal to the aggregate net asset value of your shares of Value
Equity.
Value Equity is a separate diversified series of Trust 97, a Delaware
statutory trust, which is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act").
Value Opportunities is a separate diversified series of Equity Trust, a Delaware
statutory trust, which is also an open-end management investment company
registered under the 1940 Act. The investment objective of Value Equity is
similar to that of Value Opportunities, as follows:
- --------------------------------------------------------------------------------
Fund Investment Objective
---- --------------------
- ---------------------------------- ---------------------------------------------
Value Equity Long-term capital appreciation, with current
income a secondary consideration.
- ---------------------------------- ---------------------------------------------
Value Opportunities Long-term capital appreciation.
- --------------------------------------------------------------------------------
The investment objectives of Value Equity and Value Opportunities are
not fundamental, meaning that they may be changed without the vote of a majority
of the outstanding voting securities. The investment strategies for Value Equity
are substantially similar to those for Value Opportunities. The Funds have
substantially similar market capitalization restrictions, in that Value Equity
selects companies that generally have a market capitalization of $2 billion or
more while Value Opportunities typically invests in securities of companies with
a market capitalization of $2 billion or more. Both Funds primarily invest in
large capitalization companies, but may also invest in small and medium
capitalization companies. The Funds' investment style is substantially similar
in that the Funds' subadviser utilizes a value strategy.
This Prospectus/Information Statement explains concisely the
information about Value Opportunities that you should know. 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 Value Equity: How to Obtain this Information:
- ------------------------------- -------------------------------
- ---------------------------------------------------------- --------------------------------------------------------------------
Prospectus of Trust 97 relating to Value Equity, dated Copies are available upon request and without charge if you:
December 31, 2006
Statement of Additional Information of Trust 97 Visit www.PhoenixFunds.com on the internet; or
relating to Value Equity, dated December 31, 2006
Annual Report of Trust 97 relating to Value Equity for Write to Phoenix Equity Planning Corporation, One American Row,
the year ended August 31, 2006 P.O. Box 150480, Hartford, CT 06115-0480;
- -------------------------------------------------------------------------------------------------------------------------------
2
- -------------------------------------------------------------------------------------------------------------------------------
Semi-Annual Report of Trust 97 relating to Value or
Equity for the period ended February 28, 2007
Call (800) 243-1574 toll-free.
- ---------------------------------------------------------- --------------------------------------------------------------------
Information about Value Opportunities: How to Obtain this Information:
- -------------------------------------- -------------------------------
- ---------------------------------------------------------- --------------------------------------------------------------------
Prospectus of Equity Trust relating to Value Copies are available upon request and without charge if you:
Opportunities, dated October 31, 2006, as
supplemented, which accompanies this Visit www.PhoenixFunds.com on the internet; or
Prospectus/Information Statement
Statement of Additional Information of Equity Trust Write to Phoenix Equity Planning Corporation, One American Row,
relating to Value Opportunities, dated October 31, P.O. Box 150480, Hartford, CT 06115-0480; or
2006, as supplemented.
Call (800) 243-1574 toll-free.
Annual Report of Equity Trust relating to Value
Opportunities for the year ended June 30, 2006
Semi-Annual Report of Equity Trust relating to Value
Opportunities for the period ended December 31, 2006
- ---------------------------------------------------------- --------------------------------------------------------------------
Information about the Reorganization: How to Obtain this Information:
- ------------------------------------- -------------------------------
- ---------------------------------------------------------- --------------------------------------------------------------------
Statement of Additional Information dated July ___, Copies are available upon request and without charge if you:
2007, which relates to this Prospectus/Information
Statement and the Reorganization Write to Phoenix Equity Planning Corporation, One American Row,
P.O. Box 150480, Hartford, CT 06115-0480; or
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 Value Equity contained in the Prospectus of
Trust 97 dated December 31, 2006 (SEC File No. 811-08343) is incorporated by
reference in this document. (This means that such information is legally
considered to be part of this Prospectus/Information Statement.) Information
relating to Value Opportunities contained in the Prospectus of Equity Trust
dated October 31, 2006 (SEC File No. 811-945) also is incorporated by reference
in this document. The Statement of Additional Information dated July ___, 2007
relating to this Prospectus/Information Statement and the Reorganization, which
includes the financial statements of Trust 97 relating to Value Equity for the
year ended August 31, 2006, and the six month period ended February 28, 2007,
financial statements of Equity Trust relating to Value Opportunities for the
year ended June 30, 2006, and the six month period ended December 31,
3
2006 and pro forma financial statements of Equity Trust relating to Value
Opportunities for the twelve month period ended December 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/INFORMATION 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 VALUE OPPORTUNITIES:
is not a deposit of, or guaranteed by, any bank
is not insured by the FDIC, the Federal Reserve Board or any other government
agency
is not endorsed by any bank or government agency
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 occurring?.......................................................6
What are the key features of the Reorganization?...........................................6
After the Reorganization, what shares of Value Opportunities will I own?...................6
How will the Reorganization affect me?.....................................................7
Will I be able to purchase, exchange and redeem shares and receive distributions in the
same way?..................................................................................7
How do the Funds' investment objectives, principal investment strategies and risks
compare?...................................................................................7
How do the Funds fees and expenses compare?...............................................10
How do the Funds' performance records compare?............................................14
Who will be the Adviser and Subadviser of my Fund after the Reorganization?
What will the advisory and sub-advisory fees be after the Reorganization?.................16
What will be the primary federal tax consequences of the Reorganization?..................19
RISKS..............................................................................................19
Are the risk factors for the Funds similar?...............................................19
What are the primary risks of investing in each Fund?.....................................19
INFORMATION ABOUT THE REORGANIZATION...............................................................21
Reasons for the Reorganization............................................................21
Agreement and Plan of Reorganization......................................................22
Federal Income Tax Consequences...........................................................24
Pro-forma Capitalization..................................................................25
Distribution of Shares....................................................................26
Purchase and Redemption Procedures........................................................26
Exchange Privileges.......................................................................27
Dividend Policy...........................................................................27
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS....................................................27
Form of Organization......................................................................28
Capitalization............................................................................28
Shareholder Liability.....................................................................28
Shareholder Meetings and Voting Rights....................................................29
Liquidation...............................................................................29
Liability and Indemnification of Trustees.................................................30
Shareholder Information...................................................................30
Control Persons and Principal Holders of Securities.......................................31
FINANCIAL STATEMENTS AND EXPERTS...................................................................32
LEGAL MATTERS......................................................................................32
ADDITIONAL INFORMATION.............................................................................32
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/INFORMATION STATEMENT AND THE EXHIBITS.
This summary is qualified in its entirety by reference to the
additional information contained elsewhere in this Prospectus/Information
Statement, the Prospectuses and Statements of Additional Information relating to
the Funds and the form of the Agreement and Plan of Reorganization (the "Plan"),
which is attached to this Prospectus/Information Statement as Exhibit A.
WHY IS THE REORGANIZATION OCCURRING?
Both Funds are managed and constructed in a similar style and
composition. The proposed reorganization will allow shareholders of Value Equity
to own a fund that is similar in style, but has a better possibility of
obtaining a greater amount of assets. Value Opportunities has a similar
investment objective and substantially similar investment strategy as Value
Equity, and its performance for the year ended December 31, 2006 exceeded that
of Value Equity. In addition, the total fund expenses of Value Opportunities,
assuming the Reorganization is consummated, are expected to be equal to those of
Value Equity, after contractual expense reductions through June 2008. The
Reorganization should create better efficiencies for the portfolio management
team and perhaps lower fees for Value Opportunities in the future.
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:
the transfer in-kind of all of the assets of Value Equity to Value Opportunities
in exchange for Class A and Class C shares of Value Opportunities;
the assumption by Value Opportunities of all of the liabilities of Value Equity;
the liquidation of Value Equity by the distribution of Class A and Class C
shares of Value Opportunities to Value Equity's shareholders; and
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 July 13,
2007.
AFTER THE REORGANIZATION, WHAT SHARES OF VALUE OPPORTUNITIES WILL I OWN?
Prior to the Reorganization, all Class B shares of Value Equity will be
converted to Value Equity Class A shares. Thereafter, if you own Class A or
Class C shares of Value Equity, you will own Class A or Class C shares,
respectively, of Value Opportunities.
6
The new shares you receive will have the same total value as your
shares of Value Equity, 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 offer you better
operating efficiencies. Upon the reorganization of Value Equity into Value
Opportunities, operating efficiencies may be achieved by Value Opportunities
because it will have a greater level of assets. As of March 31, 2007, Value
Equity's assets were approximately $46.2 million and Value Opportunities' assets
were approximately $38.1 million. It is believed that a larger, combined Fund
will have a greater likelihood of gaining additional assets, which may lead to
greater economies of scale.
After the Reorganization the value of your shares will depend on the
performance of Value Opportunities rather than that of Value Equity. The Board
of Trustees of each of Trust 97 and Equity Trust believes that the
Reorganization will benefit both Value Equity and Value Opportunities. All of
the costs of the Reorganization, including the cost of mailing this
Prospectus/Information Statement, will be paid by Value Opportunities.
Like Value Equity, Value 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 and Class C shares
of Value Opportunities or distributed in cash, if you have so elected.
The Boards of Trustees of Trust 97 and Equity Trust, have concluded
that the Reorganization would be in the best interest of their respective
shareholders, and that their 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 and Class C
shares, as applicable, of Value Opportunities in the same manner as you did for
your shares of Value Equity 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 objectives of Value Equity are similar to those of Value
Opportunities because Value Equity has a secondary objective of current income.
The investment objective of each Fund is non-fundamental, which means that it
may be changed by vote of the Trustees, without shareholder approval.
The investment strategies and portfolio composition of both Funds are
substantially similar as they both have the same market capitalization range of
$417 million to $446.9 billion and the same market capitalization restrictions
of at least $2 billion at the time of purchase. Both
7
Funds invest in primarily large capitalization companies; however, they both may
also invest in small and medium capitalization companies.
The following tables summarize a comparison of Value Equity and Value
Opportunities with respect to their investment objectives and principal
investment strategies, as set forth in the respective Prospectuses and
Statements of Additional Information relating to the Funds.
-----------------------------------------------------------------------------
VALUE EQUITY
------------- ---------------------------------------------------------------
Investment Long-term capital appreciation, with current income a
Objective secondary consideration.
------------- ---------------------------------------------------------------
Principal o Invests in common stocks of primarily domestic (U.S.),
Investment large capitalization companies that, at the time of
Strategies purchase, have market capitalizations of at least $2
billion. Under normal circumstances, the Fund will invest
at least 80% of its assets in common stocks. As of December
31, 2006, the market capitalization range of the issuers in
which the Fund was invested was $417 million to $446.9
billion.
o A value approach is used to construct the Fund's portfolio,
utilizing quantitative screening to identify attractively
valued securities. All stocks in the equity universe are
evaluated across multiple quantitative factors, such as
valuation, earnings and quality.
o Research is focused on identifying the factors that are
most closely associated with outperforming stocks. Factors
must have statistical significance, but also must meet the
"common sense" test of having a logical connection to the
attributes of a successful company.
o A portfolio optimization program is used to balance the
expected return of the stocks with such considerations as
the portfolio's benchmark, desired level of risk and
transaction cost estimates.
The Fund's investment strategies may lead to a high portfolio
turnover rate. A high portfolio turnover rate increases
brokerage and other transaction costs to the Fund, negatively
affects Fund performance, and may increase capital gain
distributions, resulting in greater tax liability to you.
-----------------------------------------------------------------------------
8
-----------------------------------------------------------------------------
VALUE OPPORTUNITIES
------------- ---------------------------------------------------------------
Investment Long-term capital appreciation.
Objective
-----------------------------------------------------------------------------
Principal o The Fund invests principally in the equity securities of
Investment domestic companies that have appreciation potential. The
Strategies Fund invests principally in larger capitalization stocks;
however, the Fund may invest in issuers of any
capitalization. Larger capitalization stocks are those of
issuers with market capitalizations over $2 billion at the
time of initial purchase. As of December 31, 2006, the
market capitalization range of the issuers in which the
Fund was invested was $417 million to $446.9 billion.
o A value approach is used to construct the Fund's portfolio,
utilizing quantitative screening to identify attractively
valued securities. All stocks in the equity universe are
evaluated across multiple quantitative factors, such as
valuation, earnings and quality.
o Research is focused on identifying the factors most closely
associated with outperforming stocks. Factors must have
statistical significance, but also must meet the "common
sense" test of having a logical connection to the
attributes of a successful company.
o A portfolio optimization program is used to balance the
expected return of the stocks with such considerations as
the portfolio's benchmark, desired level of risk and
transaction cost estimates.
o The Fund's investment strategies may lead to a high
portfolio turnover rate. A high portfolio turnover rate
increases brokerage and other transaction costs to the
Fund, negatively affects Fund performance, and may increase
capital gain distributions, resulting in greater tax
liability to you.
-----------------------------------------------------------------------------
The principal risks of investing in Value Opportunities are
substantially similar to those of investing in Value Equity. They include:
Equity Securities. Generally, 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
9
financial markets or industries (such as changes in inflation or consumer
demand) and to events that affect particular issuers (such as news about the
success or failure of a new product).
Large Market Capitalization Companies. Companies with large market
capitalizations go in and out of favor based on market and economic conditions.
Larger companies tend to be less volatile than companies with smaller market
capitalizations. In exchange for this potentially lower risk, the Funds' value
may not rise as much as the value of funds that emphasize companies with smaller
market capitalizations.
Small and Medium Market Capitalization Companies. Although not a
primary investment strategy, the Funds may invest in issuers having small and
medium market capitalizations. Companies with small and medium market
capitalizations are often companies with a limited operating history or
companies in industries that have recently emerged due to cultural, economic,
regulatory or technological developments. Such developments can have a
significant impact or negative effect on small and medium market capitalization
companies and their stock performance and can make investment returns highly
volatile. Product lines are often less diversified and subject to competitive
threats. Small and medium market capitalization stocks are subject to varying
patterns of trading volume and may, at times, be difficult to sell.
Value Stocks. Value stocks involve 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. Value-oriented funds typically underperform when
growth investing is in favor.
The Funds may invest a portion of their assets in cash, cash
equivalents such as U.S. Government securities, money market instruments, or
high grade commercial paper as a temporary defensive strategy when, in the
belief of the subadviser, adverse market conditions warrant doing so. This
strategy, 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 Value Equity and Value Opportunities have similar investment
objectives and substantially similar investment strategies, it is not
anticipated that, in connection with the Reorganization, the securities held by
Value Equity will be sold in significant amounts in order to comply with the
policies and investment practices of Value Opportunities. If any such sales
occur, the transaction costs will be borne by Value Opportunities. Such costs
are ultimately borne by Value Opportunities' shareholders.
HOW DO THE FUNDS' FEES AND EXPENSES COMPARE?
After its Class B shares are converted into Class A shares, Value
Equity will offer two classes of shares (Class A and Class C). Value
Opportunities also offers Class A and Class C Shares. You will not pay any
initial or deferred sales charge in connection with the Reorganization.
10
The following tables allow you to compare the various fees and expenses
that you may pay for buying and holding Class A and Class C shares of each of
the Funds. The table entitled "Value Opportunities Pro Forma" shows you what
fees and expenses are estimated to be assuming the Reorganization takes place.
The amounts for the Class A and Class C shares of Value Equity and
Value Opportunities set forth in the following tables and in the examples are
based on the expenses for Value Equity for the twelve month period ended August
31, 2006 and Value Opportunities for the twelve month period ended December 31,
2006. The amounts for Class A and Class C shares of Value Opportunities (Pro
Forma) set forth in the following table and in the examples are based on what
the estimated expenses of Value Opportunities would have been for the twelve
month period ended December 31, 2006, assuming the Reorganization had taken
place on January 1, 2006.
Shareholder Fees (fees paid directly from your investment)
----------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
VALUE OPPORTUNITIES
VALUE EQUITY VALUE OPPORTUNITIES (PRO FORMA)
------------ ------------------- -----------
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Class A Class A Class A
------- ------- -------
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Maximum Sales Charge (Load) Imposed on a Purchase 5.75% 5.75% 5.75%
(as a percentage of offering price)
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Maximum Deferred Sales Charge (Load) (as a percentage None* None* None*
of the lesser ofthe value redeemed or the amount invested)
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None None None
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Redemption Fee None None None
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Exchange Fee None None None
- -----------------------------------------------------------------------------------------------------------------------------
* 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.
- -----------------------------------------------------------------------------------------------------------------------------
VALUE OPPORTUNITIES
VALUE EQUITY VALUE OPPORTUNITIES (PRO FORMA)
------------ ------------------- -----------
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Class C Class C Class C
------- ------- -------
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Maximum Sales Charge (Load) Imposed on a Purchase None None None
(as a percentage of offering price)
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Maximum Deferred Sales Charge (Load) (as a percentage 1%** 1%** 1%**
of the lesser of the value redeemed or the amount invested)
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None None None
- -----------------------------------------------------------------------------------------------------------------------------
11
- -----------------------------------------------------------------------------------------------------------------------------
Redemption Fee None None None
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Exchange Fee None None None
- -----------------------------------------------------------------------------------------------------------------------------
** The deferred sales charge is imposed on Class C Shares redeemed during the first year only.
Fees and Expenses (as a percentage of average daily net assets)
---------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
VALUE OPPORTUNITIES
VALUE EQUITY VALUE OPPORTUNITIES (PRO FORMA)
------------ ------------------- -----------
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Class A Class A Class A
------- ------- -------
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Management Fees 0.75% 0.80% 0.75%
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Distribution and Service (12b-1) Fees*** 0.25% 0.25% 0.25%
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Other Expenses 0.65% 1.38% 0.62%
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Total Annual Fund Operating Expenses Before Expense Reduction**** 1.65% 2.43% 1.62%
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Expense Reduction***** (0.30)% (1.01)% (0.27%)
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Total Annual Fund Operating Expenses After Expense Reduction 1.35% 1.42% 1.35%
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
VALUE OPPORTUNITIES
VALUE EQUITY VALUE OPPORTUNITIES (PRO FORMA)
------------ ------------------- -----------
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Class C Class C Class C
------- ------- -------
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Management Fees 0.75% 0.80% 0.75%
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Distribution and Service (12b-1) Fees*** 1.00% 1.00% 1.00%
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Other Expenses 0.65% 1.62% 0.62%
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Total Annual Fund Operating Expenses Before Expense Reduction**** 2.40% 3.42% 2.37%
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Expense Reduction***** (0.30)% (1.27)% (0.27%)
- ------------------------------------------------------------------ -------------- --------------------- ---------------------
Total Annual Fund Operating Expenses After Expense Reduction 2.10% 2.15% 2.10%
- -----------------------------------------------------------------------------------------------------------------------------
*** Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end
sales charge permitted by the NASD.
**** Expenses have been restated to reflect current fee structures.
***** Value Equity's investment adviser has contractually agreed to limit the
Fund's total operating expenses (excluding interest, tax and extraordinary
expenses), through December 31, 2007, so that such expenses will not
exceed 1.35% for Class A Shares and 2.10% for Class C Shares. Through
October 31, 2007, Value Opportunities' investment adviser has
contractually agreed to limit the expenses of the Fund to 1.40% for Class
A Shares and 2.15% for Class C Shares. The limits for Value Opportunities
will be changed to 1.35% for Class A Shares and 2.10% for Class C Shares
before the Reorganization, and will extend through June 30, 2008.
12
Currently, total annual fund operating expenses before and after
expense reductions for Value Opportunities are higher than those for Value
Equity. After the Reorganization, Other Expenses for Value Opportunities will be
lower due to an expense allocation method change as well as transfer agent and
administration agreement changes that have reduced expenses. In addition,
Management Fees for Value Opportunities will be reduced to 0.75%. These changes
will result in Value Opportunities' pro forma total annual fund operating
expenses before expense reduction to be lower than those of Value Equity and
Value Opportunities' pro forma total annual fund operating expenses after
expense reduction to equal those of Value Equity.
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 the Funds and Value
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 limits 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*
--------------------------------------------------------------------------
VALUE EQUITY
------------
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
Class A $702 $1,033 $1,387 $2,391
Class C $310 $717 $1,251 $2,711
--------------------------------------------------------------------------
--------------------------------------------------------------------------
VALUE OPPORTUNITIES
-------------------
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
Class A $711 $1,200 $1,714 $3,121
Class C $318 $936 $1,678 $3,638
--------------------------------------------------------------------------
--------------------------------------------------------------------------
VALUE OPPORTUNITIES PRO FORMA
-----------------------------
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
Class A $705 $1,032 $1,382 $2,367
Class C $313 $714 $1,242 $2,689
--------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------
VALUE EQUITY
------------
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
Class C $210 $717 $1,251 $2,711
--------------------------------------------------------------------------
13
--------------------------------------------------------------------------
VALUE OPPORTUNITIES
-------------------
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
Class C $218 $936 $1,678 $3,638
--------------------------------------------------------------------------
--------------------------------------------------------------------------
VALUE OPPORTUNITIES PRO FORMA
-----------------------------
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
Class C $213 $714 $1,242 $2,689
--------------------------------------------------------------------------
*Expenses have been restated to reflect current fee structures.
HOW DO THE FUNDS' PERFORMANCE RECORDS COMPARE?
The following charts show how the Class A shares of the Funds have
performed in the past. 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 A shares of Value Equity and for the Class A shares of Value
Opportunities.
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 above 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.
VALUE EQUITY
- --------------------------------------------------------------------------------
17.22% 16.80% 21.84% -18.91% -18.60% 23.60% 12.98% 2.28% 20.70%
98 99 00 01 02 03 04 05 06
- --------------------------------------------------------------------------------
High Quarter: 4th - 1998 +26.00%
Low Quarter: 3rd - 1998 -17.98%
Year-to-date Performance (through March 31, 2007) is +2.13%
14
VALUE OPPORTUNITIES
---------
22.42%
06
---------
High Quarter: 1st - 2006 +7.92%
Low Quarter: 2nd - 2006 +2.75%
Year-to-date performance (through March 31, 2007) is +6.72%
The next set of tables lists the average annual total return by class
of Value Equity for the past one and five years and since inception, and of
Value Opportunities for the past one year and since inception. The after-tax
returns shown are for Class A; 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)
----------------------------------------------------------------
--------------------------------------------------------------------
1 Year 5 Years
Ended Ended Since
VALUE EQUITY 12/31/06 12/31/06 Inception
------------ -------- -------- ---------
---------------------------- ------------ ------------ -------------
Class A shares 11/05/97
---------------------------- ------------ ------------ -------------
Return Before Taxes 13.76% 5.75% 6.65%
---------------------------- ------------ ------------ -------------
Return After Taxes on 13.58% 5.65% 6.17%
on Distributions(2)
---------------------------- ------------ ------------ -------------
Return After Taxes 9.20% 4.95% 5.57%
on Distributions and
Sale of Fund
Shares(2) (3)
---------------------------- ------------ ------------ -------------
Class C shares 11/05/97
---------------------------- ------------ ------------ -------------
Return Before taxes 19.78% 6.21% 6.54%
---------------------------- ------------ ------------ -------------
S&P 500 Index 15.78% 6.19% 6.24%
---------------------------- ------------ ------------ -------------
Russell 1000 Value Index 22.25% 10.86% 9.0%
--------------------------------------------------------------------
15
--------------------------------------------------------
1 Year
Ended Since
VALUE OPPORTUNITIES 12/31/06 Inception
------------------- -------- ---------
---------------------------- ------------ --------------
Class A shares 7/29/05
---------------------------- ------------ --------------
Return Before Taxes 15.38% 11.67%
---------------------------- ------------ --------------
Return After Taxes 14.29% 10.88%
on Distributions(2)
---------------------------- ------------ --------------
Return After Taxes 10.39% 9.63%
on Distributions
Sale of Fund
Shares(2) (3)
---------------------------- ------------ --------------
Class C shares 7/29/05
---------------------------- ------------ --------------
Return Before Taxes 21.72% 15.70%
---------------------------- ------------ --------------
S&P 500 Index 15.78% 12.43%
---------------------------- ------------ --------------
Russell 1000 Value
Index 22.25% 17.02%
--------------------------------------------------------
(1) Each Fund's average annual returns in the tables above reflect the
deduction of the maximum sales charge for an investment in the
Fund's Class A shares and 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 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.
--------------------------
The S&P 500 Index is a widely recognized unmanaged index that measures
the stock performance of 500 large- and medium- sized companies and is often
used to indicate the performance of the overall stock market. The Russell 1000
Value Index is a market capitalization-weighted index of value-oriented stocks
of the 1,000 largest companies in the Russell Universe, which comprises the
3,000 largest U.S. companies. Each index is unmanaged and not available for
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
16
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 Value Opportunities is also contained in
management's discussion of Value Opportunities' performance, which appears in
the most recent Annual Report of the Equity Trust relating to Value
Opportunities.
WHO WILL BE THE ADVISER AND SUBADVISER OF MY FUND AFTER THE REORGANIZATION?
WHAT WILL THE ADVISORY AND SUB-ADVISORY FEES BE AFTER THE REORGANIZATION?
Management of the Funds
-----------------------
The overall management of Value Equity and Value Opportunities is the
responsibility of, and is supervised by, the respective Boards of Trustees of
Trust 97 and Equity Trust.
Adviser
-------
Phoenix Investment Counsel, Inc. (the "Adviser" or "PIC") is the
investment adviser for Value Equity and Value Opportunities and is responsible
for managing the Funds' 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:
-----------------------------------------------------------------------
The Adviser is an indirect, wholly-owned subsidiary of The Phoenix
Companies, Inc. and has acted as an investment adviser for over 70
years.
The Adviser acts as the investment adviser for over 60 mutual funds and
as adviser to institutional clients, with assets under management of
approximately $28.7 billion as of March 31, 2007.
The Adviser is located at 56 Prospect Street, Hartford, Connecticut
06115.
-----------------------------------------------------------------------
Subadviser
----------
Acadian Asset Management, Inc. (the "Subadviser") is the investment
subadviser to the Funds. Pursuant to a Subadvisory Agreement with the Adviser,
the Subadviser is responsible for the day-to-day management of the Funds'
portfolios.
17
Facts about the Subadviser:
-----------------------------------------------------------------------
The Subadviser is a wholly-owned subsidiary of Old Mutual Asset
Managers (US) LLC, which is wholly-owned by Old Mutual (US) Holdings,
Inc. Old Mutual (US) Holdings, Inc. is wholly-owned by OM Group (UK)
Limited. OM Group (UK) Limited is wholly-owned by Old Mutual PLC.
The Subadviser had approximately $69.1 billion in assets under
management as of March 31, 2007.
The Subadviser is located at One Post Office Square, 20th Floor,
Boston, MA 02109.
-----------------------------------------------------------------------
Portfolio Management
--------------------
A team of investment professionals is responsible for the day-to-day
management of Value Opportunities' portfolio.
BRENDAN O. BRADLEY. Mr. Bradley has served on the Fund's portfolio
management team since its inception in 2005. He is a Senior Vice President and a
senior member of the investment research team. Prior to joining Acadian in 2004,
Mr. Bradley was a Vice President at Upstream Technologies (2002-2004), where he
designed and implemented quantitative investment management systems and
strategies. His professional background also includes work as a research analyst
and consultant at Samuelson Portfolio Strategies (1999-2002).
JOHN R. CHISHOLM, CFA. Mr. Chisholm has served on the Fund's portfolio
management team since its inception in 2005. He is Co-Chief Investment Officer
and Executive Vice President of Acadian. Mr. Chisholm has been affiliated with
Acadian since 1984, first in a consulting capacity (1984-1987), as a
quantitative research analyst (1987-1989), and as a portfolio manager (since
1989). He became Co-Chief Investment Officer in 1997.
MATTHEW J. COHEN, CFA. Mr. Cohen has served on the Fund's portfolio
management team since its inception in 2005. He is a Senior Vice President and
Portfolio Manager of Acadian. Mr. Cohen specializes in quantitative equity
valuation techniques and manages the processes and data that drive Acadian's
investment approach. Prior to joining Acadian in 1994, he worked as a senior
systems analyst and project manager for Digital Equipment Corporation.
RAYMOND F. MUI. Mr. Mui has served on the Fund's portfolio management
team since its inception in 2005. He is a Senior Vice President specializing in
multi-factor equity valuation frameworks and the development of investment
strategies for both the developed and emerging equity markets. Prior to joining
Acadian in 1991, Mr. Mui was a member of the senior technical staff at Hughes
Aircraft, where he developed prototypes of command, communications and
information systems.
18
BRIAN K. WOLAHAN, CFA. Mr. Wolahan has served on the Fund's portfolio
management team since its inception in 2005. He is Co-Director of Research and a
Senior Portfolio Manager responsible for developing and applying quantitative
techniques to evaluate markets and securities. Before joining Acadian in 1990,
Mr. Wolahan worked in the Systems Planning Group at Bank of New England, and as
a Senior Systems Analyst at Mars Incorporated with responsibilities for
Corporate Systems.
Please refer to the Statement of Additional Information for additional
information about Value Opportunities' portfolio managers, including the
structure of and method of computing compensation, other accounts they manage
and their ownership of shares of Value Opportunities.
Advisory Fees
-------------
For its management and supervision of the daily business affairs of
Value Opportunities the Adviser is entitled to receive a monthly fee that is
accrued daily at the annual rate of 0.80% against the value of Value
Opportunities' net assets. This rate will be reduced to 0.75% effective on the
date of the Reorganization.
Subadvisory Fees
----------------
Under the terms of the Subadvisory Agreement, the Subadviser is paid by
the Adviser for providing advisory services to Value Opportunities. Value
Opportunities does not pay a fee to the Subadviser. The Adviser pays the
Subadviser a subadvisory fee calculated at a rate equal to 50% of the gross
investment management fee.
WHAT WILL BE THE PRIMARY FEDERAL TAX CONSEQUENCES OF THE REORGANIZATION?
Prior to or at the completion of the Reorganization, the Funds will
have received an opinion from the law firm of McDermott Will & Emery LLP that
the Reorganization has been structured so that no gain or loss will be
recognized by Value Equity or its shareholders for federal income tax purposes
as a result of receiving shares of Value Opportunities in connection with the
Reorganization. The holding period and aggregate tax basis of the shares of
Value Opportunities that are received by the shareholders of Value Equity will
be the same as the holding period and aggregate tax basis of the shares of Value
Equity previously held by such shareholders, provided that such shares of Value
Equity are held as capital assets. In addition, the holding period and tax basis
of the assets of Value Equity in the hands of Value Opportunities as a result of
the Reorganization will be the same as in the hands of Value Equity immediately
prior to the Reorganization, and no gain or loss will be recognized by Value
Opportunities upon the receipt of the assets of Value Equity in exchange for
shares of Value Opportunities and the assumption by Value Opportunities of Value
Equity's liabilities.
19
RISKS
ARE THE RISK FACTORS FOR THE FUNDS SIMILAR?
Yes. The risk factors are substantially similar due to the similar
investment objectives and substantially similar investment strategies of the
Funds. The risks of Value 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 EQUITY SECURITIES RISK.
- ------------------------ -------------------------------------------------------
VALUE EQUITY Invests at least 80% of its assets in common stocks.
- ------------------------ -------------------------------------------------------
VALUE OPPORTUNITIES Invests principally in equity securities.
- --------------------------------------------------------------------------------
Generally, 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 (such as
changes in inflation or consumer demand) and to events that affect particular
issuers (such as news about the success or failure of a new product).
- --------------------------------------------------------------------------------
Each of the Funds is subject to LARGE MARKET
CAPITALIZATION COMPANIES RISK.
- ------------------------ -------------------------------------------------------
VALUE EQUITY Primarily selects companies which have a market
capitalization of $2 billion or more.
- ------------------------ -------------------------------------------------------
VALUE OPPORTUNITIES Typically invests in securities of large capitalization
companies of $2 billion or more.
- --------------------------------------------------------------------------------
Companies with large market capitalizations go in and out of favor
based on market and economic conditions. Larger companies tend to be less
volatile than companies with smaller market capitalizations. In exchange for
this potentially lower risk, the Fund's value may not rise as much as the value
of funds that emphasize companies with smaller market capitalizations.
- --------------------------------------------------------------------------------
Each of the Funds is subject to SMALL AND MEDIUM MARKET
CAPITALIZATION COMPANIES RISK.
- ------------------------ -------------------------------------------------------
VALUE EQUITY Not a primary investment strategy, but can invest in
small and medium market capitalization companies.
- ------------------------ -------------------------------------------------------
VALUE OPPORTUNITIES Not a primary investment strategy, but can invest in
small and medium market capitalization companies.
- --------------------------------------------------------------------------------
20
Although not a primary investment strategy, the Funds may invest in
issuers having small and medium market capitalizations. Companies with small and
medium market capitalizations are often companies with a limited operating
history or companies in industries that have recently emerged due to cultural,
economic, regulatory or technological developments. Such developments can have a
significant impact or negative effect on small and medium market capitalization
companies and their stock performance and can make investment returns highly
volatile. Product lines are often less diversified and subject to competitive
threats. Small and medium market capitalization stocks are subject to varying
patterns of trading volume and may, at times, be difficult to sell.
- --------------------------------------------------------------------------------
Each of the Funds is subject to INVESTMENT STYLE RISK.
- ------------------------ -------------------------------------------------------
VALUE EQUITY Uses a value strategy.
- ------------------------ -------------------------------------------------------
VALUE OPPORTUNITIES Uses a value strategy.
- --------------------------------------------------------------------------------
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.
A Fund may also employ a combination of styles that impact its risk
characteristics. An example of a different investment style includes value
investing. 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.
INFORMATION ABOUT THE REORGANIZATION
REASONS FOR THE REORGANIZATION
Both Funds are managed and constructed in a similar style and
composition. The proposed Reorganization will allow shareholders of Value Equity
to own a fund that is similar in style, but with a greater likelihood of gaining
additional assets. The Reorganization should create better efficiencies for the
portfolio management team and perhaps lower fees for Value Opportunities in the
future.
At a Board meeting held on May 30, 2007, the Board of Trustees of Trust
97, on behalf of Value Equity, considered and unanimously approved the
Reorganization. They determined that the Reorganization was in the best
interests of shareholders of Value Equity, and that the interests of existing
shareholders of Value Equity will not be diluted as a result of the transactions
contemplated by the Reorganization.
21
Before approving the Plan, the Board of Trustees evaluated extensive
information provided by the management of the Funds and reviewed various factors
about the Funds and the proposed Reorganization. The Board of Trustees noted
that Value Opportunities has a similar investment objective and substantially
similar investment strategies as Value Equity and its performance during its
first year of operations has exceeded the one year performance of Value Equity.
In addition, on a pro forma basis after the Reorganization, total operating
expenses, after contractual expense reductions through June 2008, of Value
Opportunities are anticipated to be equal to those of Value Equity.
The Board of Trustees considered the relative asset size of each Fund.
As of March 31, 2007, Value Equity's assets were approximately $46.2 million and
Value Opportunities' assets were approximately $38.1 million.
In addition, the Trustees considered, among other things:
the terms and conditions of the Reorganization;
the fact that the Reorganization would not result in the dilution of
shareholders' interests;
the fact that the management fee of Value Opportunities will be reduced to that
of Value Equity's and total expenses of Value Opportunities will equal those of
Value Equity, due to contractual expense agreements entered into with the
Adviser through June 2008;
the fact that Value Equity and Value Opportunities have similar investment
objectives and substantially similar investment strategies;
the fact that Value Opportunities will bear the expenses incurred by the Funds
in connection with the Reorganization;
the benefits to shareholders, including operating efficiencies, which may be
achieved from combining the Funds;
the fact that Value Opportunities will assume all of the liabilities of Value
Equity;
the fact that the Reorganization is expected to be a tax free transaction for
federal income tax purposes; and
alternatives available to shareholders of Value Equity, including the ability to
redeem their shares.
During their consideration of the Reorganization, the Board of Trustees
of Trust 97 met with counsel for the independent Trustees regarding the legal
issues involved.
22
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 Board of Trustees of Trust 97 concluded that the proposed
Reorganization would be in the best interests of Value Equity and its
shareholders. Consequently, they unanimously approved the Plan.
The Board of Trustees of Equity Trust has also unanimously approved the
Plan on behalf of Value 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/Information
Statement).
The Plan provides that all of the assets of Value Equity will be
acquired by Value Opportunities in exchange for Class A and Class C shares of
Value Opportunities and the assumption by Value Opportunities of all of the
liabilities of Value Equity on or about ______, 2007, or such other date as may
be agreed upon by the parties (the "Closing Date"). Prior to the Closing Date,
Value Equity will endeavor to discharge all of its known liabilities and
obligations. Value Equity will prepare an unaudited statement of its assets and
liabilities as of the Closing Date.
At or prior to the Closing Date, Value Equity will declare a dividend
or dividends and distribution or distributions which, together with all previous
dividends and distributions, shall have the effect of distributing to the Fund's
shareholders all of the Fund's investment company taxable income for the taxable
period ending on the Closing Date (computed without regard to any deduction for
dividends paid), all of the Fund's net tax exempt income and all of its net
capital gains realized in all taxable periods ending on the Closing Date (after
reductions for any capital loss carryforward).
The number of full and fractional shares of each class of Value
Opportunities to be received by the shareholders of Value Equity will be
determined by multiplying the respective outstanding class of shares of Value
Equity by a factor which shall be computed by dividing the net asset value per
share of the respective class of shares of Value Equity by the net asset value
per share of the respective class of shares of Value 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 Value 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 Value Opportunities,
Value Equity will liquidate and distribute pro rata to the shareholders as of
the close of business on the Closing
23
Date the full and fractional shares of Value Opportunities received by Value
Equity. The liquidation and distribution will be accomplished by the
establishment of accounts in the names of Value Equity's shareholders on Value
Opportunities' share records of its transfer agent. Each account will represent
the respective pro rata number of full and fractional shares of Value
Opportunities due to Value Equity's shareholders. All issued and outstanding
shares of Value Equity will be canceled. The shares of Value 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,
Value Equity will be terminated.
The consummation of the Reorganization is subject to the conditions set
forth in the Plan, including, accuracy of various representations and warranties
and receipt of opinions of counsel. The Plan may be terminated (a) by the mutual
agreement of the Funds; (b) by either Fund if the Reorganization has not
occurred on or before _________, 2007 or (c) at or prior to the Closing Date by
either party (1) because of a breach by the other party of any representation,
warranty, or agreement contained in the Plan to be performed at or prior to the
Closing Date if not cured within 30 days, or (2) because a condition to the
obligation of the terminating party has not been met and it reasonably appears
that it cannot be met.
If the Reorganization is not consummated, PIC or one of its affiliates
will pay the expenses incurred by the Funds in connection with the
Reorganization. In such event, no portion of the expenses will be borne directly
or indirectly by Value Equity, Value Opportunities or their shareholders.
If the Reorganization is not consummated, the Board of Trustees of
Trust 97 will consider other possible courses of action which may be in the best
interests of Value Equity 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 Internal Revenue
Code of 1986, as amended (the "Code"). As a condition to the closing of the
Reorganization, Value Equity and Value Opportunities will receive an opinion
from the law firm of McDermott Will & Emery LLP to the effect that, on the basis
of the existing provisions of the Code, U.S. Treasury regulations issued
thereunder, current administrative rules, pronouncements and court decisions,
and certain representations made by the Funds, for federal income tax purposes,
upon consummation of the Reorganization:
1. The transfer of all of the assets of Value Equity solely in exchange for
shares of Value Opportunities and the assumption by Value Opportunities of
the liabilities of Value Equity followed by the distribution of Value
Opportunities' shares to the shareholders of Value Equity in dissolution and
liquidation of Value Equity will constitute a "reorganization" within the
meaning of section 368(a)(1) of the Code, and Value Equity and Value
Opportunities will each be a "party to a reorganization" within the meaning
of section 368(b) of the Code;
24
2. No gain or loss will be recognized by Value Opportunities upon the receipt
of the assets of Value Equity solely in exchange for the shares of Value
Opportunities and the assumption by Value Opportunities of the liabilities
of Value Equity;
3. No gain or loss will be recognized by Value Equity on the transfer of its
assets to Value Opportunities in exchange for Value Opportunities' shares
and the assumption by Value Opportunities of the liabilities of Value Equity
or upon the distribution (whether actual or constructive) of Value
Opportunities shares to Value Equity's shareholders in exchange for their
shares of Value Equity;
4. No gain or loss will be recognized by Value Equity's shareholders upon the
exchange of their shares of Value Equity for shares of Value Opportunities
in liquidation of Value Equity;
5. The aggregate tax basis of the shares of Value Opportunities received by
each shareholder of Value Equity pursuant to the Reorganization will be the
same as the aggregate tax basis of the shares of Value Equity held by such
shareholder immediately prior to the Reorganization, and the holding period
of the shares of Value Opportunities received by each shareholder of Value
Equity will include the period during which the shares of Value Equity
exchanged therefor were held by such shareholder (provided that the shares
of Value Equity were held as a capital asset on the date of the
Reorganization); and
6. The tax basis of the assets of Value Equity acquired by Value Opportunities
will be the same as the tax basis of such assets to Value Equity immediately
prior to the Reorganization, and the holding period of such assets in the
hands of Value Opportunities will include the period during which the assets
were held by Value Equity.
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, Value Equity would recognize gain or
loss on the transfer of its assets to Value Opportunities and each shareholder
of Value Equity would recognize a taxable gain or loss equal to the difference
between its tax basis in its Value Equity shares and the fair market value of
the shares of Value Opportunities it received.
As of August 31, 2006, Value Equity had capital loss carryforward of
$5.2 million. Value Opportunities' utilization after the Reorganization of any
pre-Reorganization losses realized by Value Equity to offset gains realized by
Value Opportunities could be subject to limitation in future years.
PRO-FORMA CAPITALIZATION
The following table sets forth the capitalization of Value Equity and
Value Opportunities as of December 31, 2006 and the capitalization of Value
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 0.724 Class A shares and 0.752 Class C shares
of Value Opportunities for each Class A and Class C share, respectively, of
Value Equity.
25
CAPITALIZATION OF VALUE EQUITY, VALUE OPPORTUNITIES AND
VALUE OPPORTUNITIES (PRO FORMA)
- ------------------------------------------------------------------------------------------------
VALUE
OPPORTUNITIES
PRO-FORMA
VALUE (AFTER
VALUE EQUITY OPPORTUNITIES ADJUSTMENTS REORGANIZATION)
------------ -------------- ----------- ---------------
- ------------------------ ---------------- ----------------- ---------------- -------------------
Net Assets
Class A $27,799,461 $29,451,179 $ 9,072,724 $66,323,364
Class B $ 9,072,724 --- ($ 9,072,724) ---
Class C $ 9,363,346 $ 370,573 $ 9,733,919
Total Net Assets $ $ $
- ------------------------ ---------------- ----------------- ---------------- -------------------
Net Asset Value Per
Share
Class A $16.44 $11.91 $11.91
Class B $15.78 --- ---
Class C $15.79 $11.88 $11.88
- ------------------------ ---------------- ----------------- ---------------- -------------------
Shares Outstanding
Class A 1,690,468 2,473,381 1,406,147 5,569,996
Class B 574,882 --- (574,882) ---
Class C 592,876 31,182 195,006 819,064
- ------------------------ ---------------- ----------------- ---------------- -------------------
Total Shares 2,858,226 2,504,563 1,026,271 6,389,060
Outstanding
- ------------------------------------------------------------------------------------------------
* Reflects $30,000 of merger related expenses.
The table set forth above should not be relied upon to calculate 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. Value
Opportunities is authorized to issue two classes of shares: Class A and Class C.
Value Equity currently offers Class A, Class B and Class C shares. The Class B
shares of Value Equity will be converted to Class A shares before the
Reorganization, and thereafter Value Equity will offer Class A and Class C
shares. Each Class has a separate distribution arrangement and bears its own
distribution expenses, if any.
In the proposed Reorganization, shareholders of Value Equity owning
Class A or Class C shares will receive Class A or Class C shares, respectively,
of Value 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
26
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. If
you acquire Class A shares as a result of the Reorganization, you will continue
to be subject to a deferred sales charge upon subsequent redemption to the same
extent as if you had continued to hold your shares of Value Equity. Class A
shares are also subject to distribution-related fees. A Rule 12b-1 plan has been
adopted for the Class A shares of Value Opportunities under which the 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% 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 Value Opportunities will be added to the length of time you
held shares in Value Equity. 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 shares of
Value Equity. Class C shares are also subject to distribution-related fees. A
Rule 12b-1 plan has been adopted for the Class C shares of Value Opportunities
under which the Fund may 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 Value Equity in connection with the
Reorganization will continue to be subject to the CDSC schedule in place at the
time of their original purchase.
In connection with the Reorganization, no sales charges are imposed.
More detailed descriptions of the Class A and Class C shares and the
distribution arrangements applicable to these classes of shares are contained in
the Prospectus and Statement of Additional Information relating to Value
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 each Fund's Prospectus. 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 each Fund's Prospectus. Each Fund may
involuntarily redeem shareholders' accounts that have a balance below $200,
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.
27
EXCHANGE PRIVILEGES
Value Equity and Value 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.
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.
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 Value 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
Value Equity is a series of Trust 97, a diversified open-end management
investment company registered with the SEC under the 1940 Act that was organized
as a Delaware statutory trust. Value Opportunities is a series of Equity Trust,
a diversified open-end management investment company registered with the SEC
under the 1940 Act that was organized as a Delaware statutory trust. Trust 97
and Equity Trust are governed by their respective Agreements and Declarations of
Trust ("Declarations of Trust") and Bylaws, a Board of Trustees, and applicable
Delaware law. Trust 97 and Equity Trust is each organized as a "series company"
as that term is used in Rule 18f-2 under the 1940 Act. The series of Equity
Trust currently consist of Value Opportunities and two other mutual funds of
various asset classes, while Trust 97 consists of Value Equity and three other
mutual funds.
CAPITALIZATION
The beneficial interests in Trust 97 and Equity Trust are represented
by an unlimited number of transferable shares of beneficial interest, no par
value, of one or more series. The
28
Declaration of Trust of each entity 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.
Value Equity shares are offered in three classes (Class A, Class B and
Class C), and shares of Value Opportunities are offered in only two classes
(Class A and Class C). Class B shares of Value Equity will be converted to Class
A at no charge before the Reorganization. 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.
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 Trust 97 or Equity Trust or a
shareholder of Trust 97 or Equity 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 Trust 97 and Equity Trust to liability. To guard
against this risk, the Declaration of Trust of each of Trust 97 and Equity Trust
(a) provides that any written obligation of Trust 97 or Equity Trust, as the
case may be, may contain a statement that such obligation may only be enforced
against the assets of Trust 97 or Equity Trust, as the case may be, or the
particular series in question and the obligation is not binding upon the
shareholders of Trust 97 or Equity Trust, as the case may be; 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 Trust 97 or Equity
Trust, as the case may be. Accordingly, the risk of a shareholder of Trust 97 or
Equity Trust incurring financial loss beyond that shareholder's investment
because of shareholder liability is limited to circumstances in which: (1) the
court refuses to apply Delaware law; (2) no contractual limitation of liability
was in effect; and (3) Trust 97 or Equity Trust, as the case may be, itself is
unable to meet its obligations. In light of Delaware law, the nature of each of
Trust 97's and Equity Trust's business, and the nature of their assets, the risk
of personal liability to a shareholder of Trust 97 or Equity Trust is remote.
SHAREHOLDER MEETINGS AND VOTING RIGHTS
Trust 97 and Equity Trust, on behalf of Value Equity and Value
Opportunities, respectively, 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 Trust 97 or Equity
Trust. In addition, each of Trust 97 and Equity 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 Trust 97 nor Equity Trust
29
currently intends to hold regular shareholder meetings. Cumulative voting is not
permitted in the election of Trustees of Trust 97 or Equity Trust.
Except when a larger quorum is required by applicable law or the
applicable governing documents, with respect to each of Trust 97 and Equity
Trust, 33 1/3% 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). A Trustee of either entity may
be removed at a meeting of shareholders by a vote of two-thirds of the
outstanding shares of either entity, as the case may be, or with or without
cause by the vote of two-thirds of the number of Trustees prior to removal.
Under the Declaration of Trust of each entity, 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 each of Trust 97 and Equity 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
Trust 97 or Equity Trust, as the case may be, as a corporation or other entity,
(2) merge Trust 97 or Equity Trust, as the case may be, into another entity, or
merge, consolidate or transfer the assets and liabilities of a Fund 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 Trustees of each of Trust 97 and Equity
Trust may also terminate Trust 97 or Equity Trust, as the case may be, a Fund,
or a class of shares upon written notice to the shareholders.
LIQUIDATION
In the event of the liquidation of Trust 97 or Equity 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 Trust 97 or
Equity Trust, the Fund or attributable to the class over the liabilities
belonging to Trust 97 or Equity 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 a 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 Trust 97 and Equity 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 Declaration of Trust and Bylaws of
each of Trust 97 and Equity Trust, each Trustee of Trust 97 or Equity Trust 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
30
to be liable to Trust 97 or Equity 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 Trust 97 or
Equity 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. Trust 97 and Equity 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 Trust 97 or Equity 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 Bylaws of each of Trust 97 and Equity
Trust and Delaware law and is not a complete description of those documents or
law. Shareholders should refer to the provisions of such Declarations of Trust,
Bylaws and Delaware law directly for more complete information.
SHAREHOLDER INFORMATION
As of March 30, 2007, the total number of shares of Value Equity
outstanding was as follows:
----------------------------------------------------
NUMBER OF SHARES
----------------
------------------- --------------------------------
CLASS A 1,692,731
CLASS B 533,405
CLASS C 569,919
------------------- --------------------------------
TOTAL 2,796,055
----------------------------------------------------
As of May 21, 2007, the officers and Trustees of Trust 97, as a group,
owned beneficially or of record less than 1% of the outstanding shares of Value
Equity.
As of May 21, 2007, the officers and Trustees of the Equity Trust, as a
group, owned beneficially or of
record less than 1% of the outstanding shares of Value Opportunities.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of May 21, 2007, the beneficial owners or record owners of more than
5% of the shares of Value Equity or Value Opportunities were as follows:
31
VALUE EQUITY CLASS A
- ---------------------------------------------------------------------------------------------------------------------
% OF SHARES OF PORTFOLIO BEFORE % OF SHARES OF PORTFOLIO AFTER
NAME AND ADDRESS NO. OF SHARES REORGANIZATION REORGANIZATION
- ---------------------------------------------------------------------------------------------------------------------
NFS LLC FEBO 170,790 6.1% Under 5%
FIIOC AS AGENT FOR
QUALIFIED EMPLOYEE BENEFIT
PLANS (401K) FINOPS-IC FUNDS
100 MAGELLAN WAY KW1C
COVINGTON, KY 41015-1987
- ---------------------------------------------------------------------------------------------------------------------
VALUE OPPORTUNITIES CLASS A
- ---------------------------------------------------------------------------------------------------------------------
% OF SHARES OF PORTFOLIO BEFORE % OF SHARES OF PORTFOLIO AFTER
NAME AND ADDRESS NO. OF SHARES REORGANIZATION REORGANIZATION
- ---------------------------------------------------------------------------------------------------------------------
PHOENIX WEALTH
BUILDER PHOLIO ATTN
CHRIS WILKOS
SHAREHOLDER SERVICES 1,127,154 32.1% 13.5%
DEPT C/O PHOENIX
EQUITY PLANNING 101
MUNSON ST GREENFIELD,
MA 01301-9684
- ---------------------------------------------------------------------------------------------------------------------
PHOENIX WEALTH
GUARDIAN PHOLIO ATTN
CHRIS WILKOS
SHAREHOLDER SERVICES 413,109 11.8% Under 5%
DEPT C/O PHOENIX
EQUITY PLANNING 101
MUNSON ST GREENFIELD,
MA 01301-9684
- ---------------------------------------------------------------------------------------------------------------------
PHOENIX LIFE INSURANCE
COMPANY C/O TINA
DIBUONO INVESTMENT 197,962 5.6% Under 5%
ACCOUNTING H-3E-2 ONE
AMERICAN ROW
HARTFORD, CT 06115-2521
- ---------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS AND EXPERTS
The Annual Report of Trust 97 relating to Value Equity, for the year
ended as of August 31, 2006, and the financial statements and financial
highlights for the periods indicated therein, has been incorporated by reference
herein and in the Registration Statement in reliance upon the report of
PricewaterhouseCoopers LLP, independent registered public accounting firm,
32
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing. The Annual Report of Equity Trust relating to Value
Opportunities, for the year ended as of June 30, 2006, and the financial
statements and financial highlights for the periods indicated therein, has 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.
The Semi-Annual Reports of Value Equity and Value Opportunities for the
six month periods ended February 28, 2007 and December 31, 2006, respectively,
has been incorporated by reference herein.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of Value
Opportunities will be passed upon by Kevin J. Carr, Esq., Vice President and
Counsel, The Phoenix Companies, Inc.
ADDITIONAL INFORMATION
Trust 97 and Equity 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 Northwest
Atrium Center, 500 West Madison Street, Chicago, Illinois 60661 and at Woolworth
Building, 233 Broadway, New York, New York 10279. 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.
July___, 2007
33
EXHIBIT A
- ---------
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this ___ day of __________, 2007, by and between Phoenix Equity 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 Value Opportunities Fund (the "Acquiring Fund"), a separate series of
the Acquiring Trust, and Phoenix Investment Trust 97, a Delaware statutory trust
(the "Selling Trust"), on behalf of the Phoenix Value Equity 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 financial agent for the Acquiring
Trust.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be _______________, 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 State Street Bank and 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 statutory trust duly organized, validly existing and in good
standing under the laws of the State of Delaware with power under the Selling
Trust's Agreement and Declaration of Trust (the "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;
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(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 February 28, 2007 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 February 28, 2007, 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;
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(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;
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(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
_____________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 ______________, 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
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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 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.
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5.2 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.
5.3 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.
5.4 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.
5.5 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.
5.6 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.
5.7 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 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.
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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;
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
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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 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;
9.2 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;
9.3 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
9.4 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)(1) 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 9.4.
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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 Acquiring Fund. 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, 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 Phoenix Investment Counsel, Inc. 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
_____________ unless such date is extended by mutual agreement of the parties,
or (iii) by either party if the other party shall have materially breached its
obligations under this Agreement or made a material and intentional
misrepresentation herein or in connection herewith. In the event of any such
termination, this Agreement shall become void and there shall be no liability
hereunder on the part of any party or their respective Trustees or officers,
except for any such material breach or intentional misrepresentation, as to each
of which all remedies at law or in equity of the party adversely affected shall
survive.
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 9.4.
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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.
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.
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.
A-13
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 EQUITY TRUST, ON BEHALF
OF ITS SERIES PHOENIX VALUE
OPPORTUNITIES FUND
_______________________________ By: _______________________________
By:
Title: Title:
Attest: PHOENIX INVESTMENT TRUST 97, ON
BEHALF OF ITS SERIES PHOENIX
VALUE EQUITY FUND
_______________________________ By: _______________________________
By:
Title: Title:
Agreed and accepted as to paragraph
10.3 only:
Attest: PHOENIX INVESTMENT COUNSEL, INC.
_______________________________ By: _______________________________
By:
Title: Title:
A-14
STATEMENT OF ADDITIONAL INFORMATION
Acquisition of Assets of
PHOENIX VALUE EQUITY FUND
a series of
PHOENIX INVESTMENT TRUST 97
c/o Phoenix Equity Planning Corporation
101 Munson Street
Greenfield, Massachusetts 01301
(800) 243-1574
By and In Exchange For Shares of
PHOENIX VALUE OPPORTUNITIES FUND
a series of
PHOENIX EQUITY TRUST
c/o Phoenix Equity Planning Corporation
101 Munson Street
Greenfield, Massachusetts 01301
(800) 243-1574
This Statement of Additional Information, dated _____, 2007, relating
specifically to the proposed transfer of the assets and liabilities of Phoenix
Value Equity Fund ("Value Equity"), a series of Phoenix Investment Trust 97
("Investment Trust 97") to Phoenix Value Opportunities Fund ("Value
Opportunities"), a series of Phoenix Equity Trust ("Equity Trust"), in exchange
for Class A and Class C shares of beneficial interest, no par value, of Value
Opportunities (to be issued to holders of shares of Value Equity), consists of
the information set forth below pertaining to Value Equity and Value
Opportunities and the following described documents, each of which is attached
hereto and incorporated by reference herein:
(1) The Statement of Additional Information of Value Equity, dated
December 31, 2006;
(2) The Statement of Additional Information of Value Opportunities,
dated October 31, 2006;
(3) Annual Report of Value Equity for the year ended August 31, 2006;
(4) Annual Report of Value Opportunities for the year ended June 30,
2006;
(5) Semi-Annual Report of Value Equity for the six month period ended
February 28, 2007; and
(6) Semi-Annual Report of Value Opportunities for the six month period
ended December 31, 2006; and
(7) Pro Forma Financial Statements dated as of _______, 2007.
This Statement of Additional Information, which is not a prospectus,
supplements, and should be read in conjunction with, the Prospectus/Information
Statement of Value Equity and Value Opportunities, dated _______, 2007. A copy
of the Prospectus/Information Statement may be obtained without charge by
calling or writing to Investment Trust 97 or Equity Trust at the telephone
numbers or addresses set forth above.
- 2 -
Phoenix Equity Trust
Pro Forma Combining Financial Statements (Unaudited)
December 31, 2006
Introductory Paragraph
The pro forma statements give effect to the proposed transfer of the assets and
stated liabilities of Phoenix Value Equity Fund ("Value Equity"), a series of
Phoenix Investment Trust 97, in exchange for shares of Phoenix Value
Opportunities Fund ("Value Opportunities"), a series of Phoenix Equity Trust, at
net asset value. Under generally accepted accounting principles, the historical
cost of investment securities will be carried forward to the surviving entity,
Value Opportunities, and the results of operations of Value Opportunities for
pre-combination periods will not be restated.
The pro forma unaudited combining statements of assets and liabilities and
schedule of investments reflect the financial position of Value Equity and Value
Opportunities as of December 31, 2006.
The pro forma unaudited statement of operations reflects the results of
operations of each of the funds for the year ended December 31, 2006, as though
the reorganization occurred as of the beginning of the preceding twelve month
period.
The pro forma combining statements should be read in conjunction with the
financial statements and financial highlights for Value Equity and Value
Opportunities, which are incorporated by reference in the Statement of
Additional Information.
- 3 -
Phoenix Value Opportunities Fund/Phoenix Value Equity Fund
Pro Forma Combining Schedule of Investments
December 31, 2006 (Unaudited)
Shares or Par Market Value
- ----------------------------- ------------------- ---------------------------------- --------------- ---------- --------------------
Phoenix Phoenix Value
Value Phoenix Phoenix Value Opportunities
Opportunities Value Equity Opportunities Phoenix Phoenix Fund
------------------
Pro Forma Value
Combining Opportunities Value Equity Combining
Fund Fund Portfolios DESCRIPTION Fund Fund Portfolios
- ------------------------------------------------- ---------------------------------- -----------------------------------------------
DOMESTIC COMMON STOCKS --98.2%
AEROSPACE & DEFENSE --0.4%
300 3,900 4,200 Northrop Grumman Corp. $ 20,310 $ 264,030 $ 284,340
Total Aerospace & Defense 20,310 264,030 284,340
ASSET MANAGEMENT & CUSTODY
BANKS --0.9%
13,200 - 13,200 Ameriprise Financial, Inc. 719,400 - 719,400
Total Asset Management & Custody
Banks 719,400 - 719,400
BROADCASTING & CABLE TV --3.4%
38,100 67,200 105,300 DIRECTV Group, Inc. (The) (b) 950,214 1,675,968 2,626,182
Total Broadcasting & Cable TV 950,214 1,675,968 2,626,182
BUILDING PRODUCTS --0.1%
100 2,300 2,400 PW Eagle, Inc. 3,450 79,350 82,800
Total Building Products 3,450 79,350 82,800
COMMODITY CHEMICALS --0.4%
- 11,600 11,600 Lyondell Chemical Co. - 296,612 296,612
Total Commodity Chemicals - 296,612 296,612
COMPUTER HARDWARE --1.4%
500 12,300 12,800 Hewlett-Packard Co. 20,595 506,637 527,232
300 5,200 5,500 International Business Machines Corp. 29,145 505,180 534,325
Total Computer Hardware 49,740 1,011,817 1,061,557
COMPUTER STORAGE & PERIPHERALS --0.8%
- 8,700 8,700 Lexmark International, Inc. Class A(b) - 636,840 636,840
Total Computer Storage & Peripherals - 636,840 636,840
CONSTRUCTION & FARM MACHINERY &
HEAVY TRUCKS --1.8%
800 7,400 8,200 Cummins, Inc. 94,544 874,532 969,076
100 2,900 3,000 FreightCar America, Inc. 5,545 160,805 166,350
3,300 - 3,300 Manitowoc Co., Inc. (The) 196,119 - 196,119
Total Construction & Farm Machinery &
Heavy Trucks 296,208 1,035,337 1,331,545
DEPARTMENT STORES --0.3%
3,600 1,900 5,500 Dillard's, Inc. Class A 125,892 66,443 192,335
Total Department Stores 125,892 66,443 192,335
DIVERSIFIED CHEMICALS --1.7%
- 19,100 19,100 Ashland, Inc. - 1,321,338 1,321,338
Total Diversified Chemicals - 1,321,338 1,321,338
DIVERSIFIED METALS & MINING --0.8%
3,100 8,000 11,100 Freeport-McMoRan Copper & Gold, Inc.
Class B (Indonesia)(c) 172,763 445,840 618,603
Total Diversified Metals & Mining 172,763 445,840 618,603
ELECTRIC UTILITIES --3.5%
16,881 27,500 44,381 FirstEnergy Corp. 1,017,924 1,658,250 2,676,174
Total Electric Utilities 1,017,924 1,658,250 2,676,174
ELECTRICAL COMPONENTS &
EQUIPMENT --1.2%
10,277 - 10,277 Cooper Industries Ltd. Class A 929,349 - 929,349
Total Electrical Components &
Equipment 929,349 - 929,349
FERTILIZERS & AGRICULTURAL
CHEMICALS --0.8%
22,500 - 22,500 CF Industries Holdings, Inc. 576,900 - 576,900
Total Fertilizers & Agricultural
Chemicals 576,900 - 576,900
FOOD RETAIL --1.4%
43,700 - 43,700 Kroger Co. (The) 1,008,159 - 1,008,159
1,800 - 1,800 Safeway, Inc. 62,208 - 62,208
Total Food Retail 1,070,367 - 1,070,367
GENERAL MERCHANDISE STORES --2.1%
25,700 6,600 32,300 Big Lots, Inc.(b) 589,044 151,272 740,316
28,900 - 28,900 Dollar Tree Stores, Inc.(b) 869,890 - 869,890
Total General Merchandise Stores 1,458,934 151,272 1,610,206
HEALTH CARE DISTRIBUTORS --2.3%
7,200 32,700 39,900 AmerisourceBergen Corp. 323,712 1,470,192 1,793,904
Total Health Care Distributors 323,712 1,470,192 1,793,904
INDUSTRIAL MACHINERY --1.6%
12,900 - 12,900 Danaher Corp. 934,476 - 934,476
3,100 - 3,100 Eaton Corp. 232,934 - 232,934
900 - 900 Parker-Hannifin Corp. 69,192 - 69,192
Total Industrial Machinery 1,236,602 - 1,236,602
INTEGRATED OIL & GAS --12.9%
20,300 32,800 53,100 ConocoPhillips 1,460,585 2,359,960 3,820,545
8,760 53,000 61,760 Exxon Mobil Corp. 671,279 4,061,390 4,732,669
11,900 1,700 13,600 Marathon Oil Corp. 1,100,750 157,250 1,258,000
Total Integrated Oil & Gas 3,232,614 6,578,600 9,811,214
INTEGRATED TELECOMMUNICATION
SERVICES --4.2%
6,000 - 6,000 AT&T, Inc. 214,500 - 214,500
4,300 18,400 22,700 Embarq Corp. 226,008 967,104 1,193,112
26,600 190,400 217,000 Qwest Communications
International, Inc.(b) 222,642 1,593,648 1,816,290
Total Integrated Telecommunication
Services 663,150 2,560,752 3,223,902
INVESTMENT BANKING & BROKERAGE --7.7%
4,400 2,600 7,000 Goldman Sachs Group, Inc. (The) 877,140 518,310 1,395,450
14,100 5,800 19,900 Lehman Brothers Holdings, Inc. 1,101,492 453,096 1,554,588
6,300 29,000 35,300 Morgan Stanley 513,009 2,361,470 2,874,479
Total Investment Banking & Brokerage 2,491,641 3,332,876 5,824,517
LEISURE PRODUCTS --0.5%
4,300 10,900 15,200 Marvel Entertainment, Inc.(b) 115,713 293,319 409,032
Total Leisure Products 115,713 293,319 409,032
LIFE & HEALTH INSURANCE --2.3%
2,572 24,500 27,072 MetLife, Inc. 151,774 1,445,745 1,597,519
300 2,000 2,300 Nationwide Financial Services, Inc.
Class A 16,260 108,400 124,660
Total Life & Health Insurance 168,034 1,554,145 1,722,179
MANAGED HEALTH CARE --0.1%
- 400 400 CIGNA Corp. - 52,628 52,628
Total Managed Health Care - 52,628 52,628
MULTI-LINE INSURANCE --6.7%
3,100 10,800 13,900 Assurant, Inc. 171,275 596,700 767,975
29,200 41,800 71,000 Genworth Financial, Inc. Class A 998,932 1,429,978 2,428,910
1,854 18,400 20,254 Hartford Financial Services Group,
Inc. (The) 172,997 1,716,904 1,889,901
Total Multi-line Insurance 1,343,204 3,743,582 5,086,786
OIL & GAS EQUIPMENT & SERVICES --0.6%
- 8,900 8,900 Tidewater, Inc. - 430,404 430,404
Total Oil & Gas Equipment & Services - 430,404 430,404
OIL & GAS EXPLORATION & PRODUCTION --0.9%
- 10,400 10,400 Devon Energy Corp. - 697,632 697,632
Total Oil & Gas Exploration & Production - 697,632 697,632
OIL & GAS REFINING & MARKETING --3.4%
4,400 - 4,400 Frontier Oil Corp. 126,456 - 126,456
1,000 - 1,000 Sunoco, Inc. 62,360 - 62,360
14,600 6,200 20,800 Tesoro Corp. 960,242 407,774 1,368,016
20,800 - 20,800 Valero Energy Corp. 1,064,128 - 1,064,128
Total Oil & Gas Refining &
Marketing 2,213,186 407,774 2,620,960
OTHER DIVERSIFIED FINANCIAL
SERVICES --6.6%
38,900 - 38,900 Citigroup, Inc. 2,166,730 - 2,166,730
34,700 23,800 58,500 JPMorgan Chase & Co. 1,676,010 1,149,540 2,825,550
Total Other Diversified Financial
Services 3,842,740 1,149,540 4,992,280
PAPER PRODUCTS --0.8%
17,000 - 17,000 International Paper Co. 579,700 - 579,700
Total Paper Products 579,700 - 579,700
PHARMACEUTICALS --7.5%
- 400 400 Abbott Laboratories - 19,484 19,484
800 - 800 Alpharma, Inc. Class A 19,280 - 19,280
10,000 64,828 74,828 King Pharmaceuticals, Inc.(b) 159,200 1,032,062 1,191,262
12,400 - 12,400 Merck & Co., Inc. 540,640 - 540,640
68,400 82,200 150,600 Pfizer, Inc. 1,771,560 2,128,980 3,900,540
Total Pharmaceuticals 2,490,680 3,180,526 5,671,206
PROPERTY & CASUALTY INSURANCE --6.3%
2,074 - 2,074 Axis Capital Holdings Ltd. 69,209 - 69,209
100 9,000 9,100 Berkley (W.R.) Corp. 3,451 310,590 314,041
3,900 33,600 37,500 Chubb Corp. (The) 206,349 1,777,776 1,984,125
1,000 3,500 4,500 CNA Financial Corp.(b) 40,320 141,120 181,440
4,500 36,892 41,392 St. Paul Travelers Cos., Inc. (The) 241,605 1,980,731 2,222,336
Total Property & Casualty Insurance 560,934 4,210,217 4,771,151
REGIONAL BANKS --3.9%
- 8,300 8,300 KeyCorp - 315,649 315,649
25,800 - 25,800 Regions Financial Corp. 964,920 - 964,920
1,100 19,200 20,300 SunTrust Banks, Inc. 92,895 1,621,440 1,714,335
Total Regional Banks 1,057,815 1,937,089 2,994,904
RESTAURANTS --0.7%
- 12,500 12,500 McDonald's Corp. - 554,125 554,125
Total Restaurants - 554,125 554,125
SEMICONDUCTORS --1.7%
8,700 53,600 62,300 Advanced Micro Devices, Inc.(b) 177,045 1,090,760 1,267,805
Total Semiconductors 177,045 1,090,760 1,267,805
SOFT DRINKS --1.5%
- 17,700 17,700 PepsiCo, Inc. - 1,107,135 1,107,135
Total Soft Drinks - 1,107,135 1,107,135
SPECIALIZED CONSUMER SERVICES --0.0%
200 - 200 Jackson Hewitt Tax Service, Inc. 6,794 - 6,794
Total Specialized Consumer Services 6,794 - 6,794
SPECIALTY STORES --0.1%
- 1,200 1,200 Office Depot, Inc.(b) - 45,804 45,804
Total Specialty Stores - 45,804 45,804
STEEL --2.4%
19,000 19,000 Nucor Corp. - 1,038,540 1,038,540
11,000 - 11,000 United States Steel Corp. 804,540 804,540
Total Steel 804,540 1,038,540 1,843,080
THRIFTS & MORTGAGE FINANCE --1.6%
- 2,200 2,200 Corus Bankshares, Inc. - 50,754 50,754
7,800 - 7,800 Fannie Mae 463,242 - 463,242
400 12,200 12,600 Radian Group, Inc. 21,564 657,702 679,266
Total Thrifts & Mortgage Finance 484,806 708,456 1,193,262
TOBACCO --0.9%
1,400 9,200 10,600 Loews Corp. - Carolina Group 90,608 595,424 686,032
Total Tobacco 90,608 595,424 686,032
TOTAL DOMESTIC COMMON STOCKS 29,274,969 45,382,617 74,657,586
(Identified cost $28,743,315,
$40,569,408 and $69,312,723)
FOREIGN COMMON STOCKS (C) --1.1%
PROPERTY & CASUALTY INSURANCE
3,099 2,654 5,753 ACE Ltd. (United States) 187,706 160,752 348,458
384 - 384 XL Capital Ltd. Class A
(United States) 27,656 - 27,656
Total Property & Casualty Insurance 215,362 160,752 376,114
REINSURANCE
- 4,664 4,664 Arch Capital Group Ltd.
(United States)(b) - 315,333 315,333
888 1,825 2,713 PartnerRe Ltd. (United States) 63,075 129,630 192,705
Total Reinsurance 63,075 444,963 508,038
TOTAL FOREIGN COMMON STOCKS 278,437 605,715 884,152
(Identified cost $270,587,
$558,881 and $829,468)
TOTAL LONG TERM INVESTMENTS --99.3% 29,553,406 45,988,332 75,541,738
(Identified cost $29,013,902,
$41,128,289 and $70,142,191)
SHORT-TERM INVESTMENTS --2.8%
COMMERCIAL PAPER (D) --2.8%
470,000 - 470,000 BellSouth Corp. 5.33%, 1/5/07 469,721 - 469,721
1,350,000 - 1,350,000 Lockhart Funding LLC 5.31%, 1/3/07 1,349,603 - 1,349,603
- 285,000 285,000 UBS Finance Delaware LLC 5.25%,
1/5/07 - 284,751 284,751
Total Commercial Paper 1,819,324 284,751 2,104,075
TOTAL SHORT-TERM INVESTMENTS 1,819,324 284,751 2,104,075
(Identified cost $1,819,324,
$284,751 and $2,104,075)
TOTAL INVESTMENTS --102.1% 31,372,730 46,273,083 77,645,813
(Identified cost $30,833,226,
$41,413, 040 and $72,246,266)
Other assets and liabilities,
net --(2.1%) (1,550,978) (37,552) (1,588,530)
NET ASSETS --100.0% 29,821,752 46,235,531 76,057,283
(a) Federal Income Tax Information: Net
unrealized appreciation of investment
securities is comprised of gross
appreciation of $6,078,276 and gross
depreciation of $678,729 for federal
income tax purposes. At December 31,
2006, the aggregate cost of securities
for federal income tax purposes
was $72,246,266.
(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 5 "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 Value Opportunities Fund/Phoenix Value Equity Fund
Pro Forma Combining Statement of Assets and Liabilities
December 31, 2006 (Unaudited)
================ ================ ================ ================
Phoenix Phoenix Value
Value Phoenix Opportunities
Opportunities Value Equity Adjustments Pro Forma
Fund Fund Combining
Portfolios
================ ================ ================ ================
ASSETS
Investment securities at value
(Identified cost $30,833,226,
$41,413,040 and $72,246,266) $ 31,372,730 46,273,083 $ 77,645,813
Cash 2,304 24,688 26,992
Receivables
Dividends 12,514 50,321 62,835
Investment securities sold 1,406,470 - 1,406,470
Fund shares sold 251,805 388 252,193
Tax reclaims - - -
Unrealized appreciation on forward currency contracts - - -
Prepaid expenses 10,197 26,348 36,545
Other assets 599 599
---------------- -------------- ---------------- ----------------
Total assets 33,056,619 46,374,828 - 79,431,447
---------------- -------------- ---------------- ----------------
LIABILITIES
Cash overdraft - -
Payables
Investment securities purchased 2,912,257 - 2,912,257
Fund shares repurchased 292,954 32,122 325,076
Foreign capital gains taxes - -
Collateral on securities loaned -
Taxes Payable 675 675
Investment advisory fee 4,162 25,462 29,624
Transfer agent fee 686 20,752 21,438
Distribution and service fees 3,077 20,158 23,235
Administration fee 765 6,284 7,049
Trustee's fee - 469 469
Trustee deferred compensation plan 599 599
Other accrued expenses 20,367 33,375 30,000(b) 83,742
Unrealized depreciation on forward currency contracts - - -
---------------- -------------- ---------------- ----------------
Total liabilities 3,234,867 139,297 30,000 3,404,164
---------------- -------------- ---------------- ----------------
NET ASSETS $ 29,821,752 $ 46,235,531 $ (30,000) $ 76,027,283
================ ============== ================= =================
Net Assets Consist of:
Capital paid in on shares of beneficial interest $ 29,109,147 $ 44,334,283 $ 73,443,430
Undistributed net investment income (loss) 12,551 61,388 (30,000) $ 43,939
Accumulated net realized gain (loss) 160,550 (3,020,183) $ (2,859,633)
Net unrealized appreciation 539,504 4,860,043 - 5,399,547
---------------- -------------- ---------------- ----------------
Net Assets $ 29,821,752 $ 46,235,531 $ (30,000) 76,027,283
================ ============== ================= =================
CLASS A
Shares of beneficial interest outstanding, no par value,
unlimited authorization 2,473,381 1,690,468 1,406,147(a) 5,569,996
Net assets $ 29,451,179 $ 27,799,461 $ $ 66,323,364
Net asset value per share $ 11.91 $ 16.44 $ $ 11.91
Offering price per share NAV/(1- 5.75%) $ 12.64 $ 17.44 $ 12.64
CLASS B
Shares of beneficial interest outstanding, no par value,
unlimited authorization 0 574,882 (574,882)(a) 0
Net assets $ 0 9,072,724 (9,072,724)(c)$ 0
Net asset value and offering price per share $ 0.00 $ 15.78 $ $ 0.00
CLASS C
Shares of beneficial interest outstanding $ 31,182 $ 592,876 $ 195,006(a) 819,064
Net assets $ 370,573 9,363,346 $ $ 9,733,919
Net asset value and offering price per share $ 11.88 $ 15.79 $ $ 11.88
(a) Adjustment reflects shares issued/reduced in conversion.
(b) Professional expenses for the surviving fund (Phoenix Value
Opportunities Fund) were increased by $20,000 and printing expenses
by $10,000 to reflect one-time merger related expenses.
(c) Class B will convert into Class A prior to the merger date.
See Notes to Pro Forma Financial Statements.
Phoenix Value Opportunities Fund/Phoenix Value Equity Fund
Pro Forma Combining Statement of Operations
December 31, 2006 (Unaudited)
<table>
<caption>
================= ============ =============== ==================
Phoenix Phoenix Phoenix Value
Value Value Opportunities
Opportunities Equity Adjustments Pro Forma
Fund Fund Combining Portfolios
================= ============ =============== ==================
<c> <s> <s> <s> <s>
INVESTMENT INCOME
Interest $ 25,718 $ 17,046 $ $ 42,764
Dividends 83,871 981,315 1,065,186
---------------------------------------------------------------------------
Total investment income 109,589 998,361 1,107,950
---------------------------------------------------------------------------
EXPENSES
Investment advisory fee 37,863 350,933 (2,377) (a) 386,419
Service fees - Class A 11,308 70,663 23,505 (a) 105,476
Distribution and service fees - Class B - 94,033 (94,033) (a) -
Distribution and service fees - Class C 2,100 91,225 (3) (a) 93,322
Administration (formerly Financial Agent fees) 13,894 45,657 (8,775) (a) 50,776
Transfer agent 20,213 104,135 (3,283) (a) 121,065
Registration 34,247 32,527 (31,847) (a) 34,927
Printing 453 25,979 (5,335) (a)(b) 21,097
Professional 25,583 33,454 (6,052) (a)(b) 52,985
Custodian 5,058 10,445 11,782 (a) 27,285
Trustees 22,051 18,650 (35,252) (a) 5,449
Miscellaneous 3,255 6,062 (1,378) (a) 7,939
----------------------------------------------------------------------------
Total expenses 176,025 883,763 (153,048) (a) 906,740
Custodian fees paid indirectly (1,279) - - (1,279)
Less expenses reimbursed by investment advisor (106,436) (107,749) 74,998 (139,187)
----------------------------------------------------------------------------
Net expenses 68,310 776,014 (78,050) 766,274
----------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 41,279 222,347 78,050 341,676
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on securities 445,886 6,234,103 - 6,679,989
Net realized gain (loss) on foreign currency - - - -
Net change in unrealized appreciation
(depreciation) on investments 444,975 2,073,855 - 2,518,830
-
Net gain (loss) on investments 890,861 8,307,958 - 9,198,819
----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 932,140 $ 8,530,305 $ 78,050 $ 9,540,495
=========== =========== ========== ============
</table>
Adjustments:
(a) Adjustments are true-ups to reflect combined fund expenses
(b) Professional expenses for the surviving fund (Phoenix Value
Opportunities Fund) were increased by $20,000 and printing
expenses by $10,000 to reflect one-time merger related
expenses. Expenses were estimated to be $10,000 for proxy
expenses, $10,000 for audit, and $10,000 for legal.
See Notes to Pro Forma Financial Statements.
PHOENIX VALUE OPPORTUNITIES FUND/PHOENIX VALUE EQUITY FUND
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS
DECEMBER 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 Value Equity ("Merging
Fund") into Phoenix Value 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 Value Equity Fund to Phoenix Value Opportunities Fund and
the subsequent liquidation of Phoenix Value Equity Fund. The accounting survivor
in the proposed merger will be Phoenix Value Opportunities Fund. This is because
the Surviving Fund will invest in a style that is similar to the way in which
Phoenix Value Equity Fund is currently operated. The Reorganization should also
create better efficiencies for the portfolio management team. Phoenix Value
Opportunities Fund will pay all costs of the reorganization.
The pro forma combined statements should be read in conjunction with the
historical financial statements of the Phoenix Value 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 Value Opportunities Fund and Phoenix Value Equity 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 increase of shares of
Phoenix Value Opportunities Fund at December 31, 2006 in connection with the
proposed reorganization. The amount of increased shares was calculated based on
the net assets, as of December 31, 2006, of Phoenix Value Equity Fund of
$36,872,185 and $9,363,346 for Class A and Class C respectively and the net
asset value of Phoenix Value Opportunities Fund of $11.91 and $11.88 for Class A
and Class C respectively. Shares of Phoenix Value Opportunities Fund increased
by 1,406,147 for Class A and 195,006 for Class C in exchange for Class A and
Class C shares, respectively, of Value Equity. 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 Value Equity Fund shareholders.
3. PRO FORMA OPERATIONS
Pro Forma operating expenses are based on actual expenses of Phoenix Value
Equity Fund and Phoenix Value 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 Value Opportunities Fund at the combined
level of average net assets for the period ended December 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 December 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 Value Phoenix Value
Opportunities Fund Equity Fund
2011 $5,227,567
Total $5,227,567
The Funds may not realize the benefit of these losses to the extent the Fund
does not realize gains on investments prior to the expiration of the capital
loss carryover.
PHOENIX EQUITY TRUST
PART C
OTHER INFORMATION
Item 15. Indemnification.
The Agreement and Declaration of Trust of Phoenix Equity Trust (the
"Trust") dated as of August 17, 2000, and the By-Laws of the Registrant provide
that no trustee or officer will be indemnified against any liability to which
the Registrant would otherwise be subject by reason of or for willful
misfeasance, bad faith, gross negligence or reckless disregard of such person's
duties. The Investment Advisory Agreement, Subadvisory Agreements, Underwriting
Agreement, Master Custodian Contract, and Transfer Agency 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 (the Act") 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. Agreement and Declaration of Trust of the Registrant, dated August 17,
2000, filed via EDGAR with Post-Effective Amendment No. 69 (File No.
002-16590) on October 30, 2000, and incorporated herein by reference.
2(a). Amended and Restated By-Laws of the Registrant, dated November 16,
2005, filed via EDGAR with Post-Effective Amendment No. 84 (File No.
002-16590) on October 27, 2006, and incorporated herein by reference.
2(b) Amendment No. 1 to the Amended and Restated By-Laws of the Registrant,
dated August 23, 2006, filed with Post-Effective Amendment No. 84 (File
No. 002-16590) on October 27, 2006, and incorporated herein by
reference.
3. Not applicable.
4. Form of Agreement and Plan of Reorganization. Exhibit A to the
Prospectus/Information Statement contained in Part A of this
Registration Statement.
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5. None other than as set forth in Exhibits 1 and 2.
6(a). Amended and Restated Investment Advisory Agreement between Registrant
and Phoenix Investment Counsel, Inc. ("PIC") effective November 20,
2002, filed via EDGAR with Post-Effective Amendment No. 74 (File No.
002-16590) on October 28, 2003, and incorporated herein by reference.
6(b). First Amendment to the Amended and Restated Investment Advisory
Agreement between Registrant and PIC, made as of October 21, 2004,
filed via EDGAR with Post-Effective Amendment No. 79 (File No.
002-16590) on October 21, 2004, and incorporated herein by reference.
6(c). Second Amendment to the Amended and Restated Investment Advisory
Agreement between Registrant and PIC dated July 29, 2005, filed via
EDGAR with Post-Effective Amendment No. 83 (File No. 002-16590) on
October 25, 2005, and incorporated herein by reference.
6(d). Subadvisory Agreement between PIC and Sasco Capital, Inc. ("Sasco")
dated October 21, 2004, on behalf of the Phoenix Mid-Cap Value Fund
("Mid-Cap Value Fund"), filed via EDGAR with Post-Effective Amendment
No. 79 (File No. 002-16590) on October 21, 2004 and incorporated herein
by reference.
6(e). Subadvisory Agreement between PIC and Acadian Asset Management, Inc.
("Acadian"), dated July 1, 2005, on behalf of the Worldwide Strategies
Fund, filed via EDGAR with Post-Effective Amendment No. 83 (File No.
002-16590) on October 25, 2005, and incorporated herein by reference.
6(f). Subadvisory Agreement between PIC and New Star Institutional Managers
Limited ("New Star"), dated July 1, 2005, on behalf of the Worldwide
Strategies Fund, filed via EDGAR with Post-Effective Amendment No. 82
(File No. 002-16590) on July 22, 2005, and incorporated herein by
reference.
6(g). Subadvisory Agreement between PIC and Acadian, dated July 29, 2005, on
behalf of the Phoenix Value Opportunities Fund filed via EDGAR with
Post-Effective Amendment No. 83 (File No. 002-16590) on October 25,
2005 and incorporated herein by reference.
6(h). First Amendment to Subadvisory Agreement between PIC and Sasco, dated
September 1, 2006, on behalf of the Mid-Cap Value Fund, filed via EDGAR
with Post-Effective Amendment No. 84 (File No 002-16590) on October 27,
2006, and incorporated herein by reference.
7(a). Underwriting Agreement between Registrant and Phoenix Equity Planning
Corporation ("PEPCO"), made as of November 19, 1997, filed as Exhibit
6.1 via EDGAR with Post-Effective Amendment No. 64 (File No. 002-16590)
on October 6, 1998, and incorporated herein by reference.
7(b). Form of Sales Agreement between PEPCO and dealers, effective June 2006,
filed via EDGAR with Post-Effective Amendment No. 84 (File No.
002-16590) on October 27, 2006, and incorporated herein by reference.
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8. Form of Deferred Compensation Plan applicable to the Board of Trustees,
filed via EDGAR with Post-Effective Amendment No. 80 (File No.
002-16590) on May 6, 2005, and incorporated herein by reference.
9(a). Master Custodian Contract between Registrant and State Street Bank and
Trust Company ("State Street") dated May 1, 1997, filed via EDGAR with
Post-Effective Amendment No. 79 (File No. 002-16590) on October 21,
2004 and incorporated herein by reference.
9(b). Amendment dated February 10, 2000 to Master Custodian Contract dated
May 1, 1997 between Registrant and State Street filed via EDGAR with
Post-Effective Amendment No. 79 (File No. 002-16590) on October 21,
2004 and incorporated herein by reference.
9(c). Amendment dated July 2, 2001 to Master Custodian Contract dated May 1,
1997 between Registrant and State Street filed via EDGAR with
Post-Effective Amendment No. 79 (File No. 002-16590) on October 21,
2004 and incorporated herein by reference.
9(d). Amendment dated May 10, 2002 to Master Custodian Contract dated May 1,
1997 between Registrant and State Street filed via EDGAR with
Post-Effective Amendment No. 79 (File No. 002-16590) on October 21,
2004 and incorporated herein by reference.
10(a). Amended and Restated Distribution Plan Pursuant to Rule 12b-1 for Class
A Shares, effective March 1, 2007, filed via EDGAR in the Registration
Statement on Form N-14 (File No. 333-143579) on June 7, 2007 and
incorporated herein by reference.
10(b). Amended and Restated Distribution Plan Pursuant to Rule 12b-1 for Class
B Shares, effective March 1, 2007, filed via EDGAR in the Registration
Statement on Form N-14 (File No. 333-143579) on June 7, 2007 and
incorporated herein by reference.
10(c). Amended and Restated Distribution Plan Pursuant to Rule 12b-1 for Class
C Shares, effective March 1, 2007, filed via EDGAR in the Registration
Statement on Form N-14 (File No. 333-143579) on June 7, 2007 and
incorporated herein by reference.
10(d). 2006 Amended and Restated Rule 18f-3 Multi-Class Distribution Plan,
adopted August 23, 2006, filed via EDGAR with Post-Effective Amendment
No. 84 (File No. 002-16590) on October 27, 2006, and incorporated
herein by reference.
11. Opinion and consent of Kevin J. Carr, Esq. Filed via EDGAR herewith.
12. Tax opinion and consent of counsel. To be filed by amendment.
13(a). Amended and Restated Transfer Agency and Service Agreement between
Registrant and PEPCO, dated July 1, 2006, filed via EDGAR in the
Registration Statement on Form N-14 (File No. 333-143579) on June 7,
2007 and incorporated herein by reference.
13(b). Sub-transfer Agency and Service Agreement between PEPCO and Boston
Financial Data Services, Inc., dated as of January 1, 2005, filed via
EDGAR with Post-Effective Amendment No. 83 (File No. 002-16590) on
October 25, 2005, and incorporated herein by reference.
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13(c). Administration Agreement between Registrant and PEPCO dated July 1,
2006, filed via EDGAR in the Registration Statement on Form N-14 (File
No. 333-143579) on June 7, 2007 and incorporated herein by reference.
13(d). Securities Lending Authorization Agreement with State Street, dated
August 1, 2005, filed via EDGAR with Post-Effective Amendment No. 84
(File No. 002-16590) on October 27, 2006, and incorporated herein by
reference.
13(e). First Amendment to Securities Lending Authorization Agreement between
Registrant and State Street dated February 3, 2006 on behalf of Phoenix
Worldwide Strategies Fund filed via EDGAR with Post-Effective Amendment
No. 84 (File No. 002-16590) on October 27, 2006, and incorporated
herein by reference.
13(f). Second Amendment to Securities Lending Authorization Agreement between
Registrant and State Street, dated March 1, 2007, filed via EDGAR
in the Registration Statement on Form N-14 (File No. 333-143579) on
June 7, 2007 and incorporated herein by reference.
14. Consent of PricewaterhouseCoopers LLP with respect to Phoenix Value
Opportunities Fund of the Registrant and Phoenix Value Equity Fund of
Phoenix Investment Trust 97, filed via EDGAR herewith.
15. Not applicable.
16. Power of Attorney for E. Virgil Conway, Harry Dalzell-Payne, Francis
E. Jeffries, Geraldine M. McNamara, and James M. Oates are filed
herein.
17. Not applicable.
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 12.
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SIGNATURES
As required by the Securities Act of 1933, this pre-effective amendment
to the registration statement has been signed on behalf of the registrant, in
the City of Hartford, and State of Connecticut on the 3rd day of July, 2007.
PHOENIX EQUITY TRUST
By: /s/ George R. Aylward
------------------------------
Name: George R. Aylward
Title: President
As required by the Securities Act of 1933, the following persons have
signed this registration statement in the capacities indicated on the 3rd day
of July, 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
- --------------------------- (Principal Financial and Accounting Officer)
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*
Trustee
- ---------------------------
Leroy Keith, Jr.
Trustee
- ---------------------------
Marilyn E. LaMarche
Chairman
- ---------------------------
Philip R. McLoughlin
/s/ Geraldine M. McNamara Trustee
- ---------------------------
Geraldine M. McNamara*
/s/ James M. Oates Trustee
- ---------------------------
James M. Oates*
Trustee
- ---------------------------
Richard E. Segerson
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Trustee
- ---------------------------
Ferdinand L.J. Verdonck
* By: /s/ George R. Aylward
---------------------------
George R. Aylward
Attorney-in-fact, pursuant to power of attorney.
C-6
EXHIBIT INDEX
Exhibit Item
- ------- ----
11. Opinion and Consent of Kevin J. Carr, Esq., filed via EDGAR herewith.
14. Consent of PricewaterhouseCoopers LLP with respect to Phoenix Value
Opportunities Fund of the Registrant and Phoenix Value Equity Fund of
Phoenix Investment Trust 97, filed via EDGAR herewith.
16. Powers of Attorney for E. Virgil Conway, Harry Dalzell-Payne, Francis
E. Jeffries, Geraldine M. McNamara, and James M. Oates.
C-7