As filed with the Securities and Exchange Commission on June 3, 1996
1933 Act Registration No. 33-80057
No. 811-9140
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM N-14
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. 1 |X|
Post-Effective Amendment No. __ |_|
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PHOENIX DUFF & PHELPS
INSTITUTIONAL MUTUAL FUNDS
(Exact Name of Registrant as Specified in Declaration of Trust)
101 Munson Street, Greenfield, Massachusetts 01301
(Address of Principal Executive Offices)
Telephone Number: (800) 814-1897
----------
Philip R. McLoughlin
Vice Chairman and
Chief Executive Officer
Phoenix Duff & Phelps Corporation
56 Prospect Street
Hartford, Connecticut 06115
(Name and Address of Agent for Service)
----------
The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Pursuant to the provisions of Rule 24f-2 of the Investment Company Act
of 1940, the Registrant has previously elected to register an indefinite number
of shares and will file a Form 24f-2 with the Commission for its fiscal year
ending December 31, 1996 on or before March 1, 1997. Therefore, no filing fee is
due at this time.
================================================================================
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
Cross-reference sheet pursuant to Rule 481 (a)
of Regulation C
Under the Securities Act of 1933
Form N-14 Item No.
Part A INFORMATION REQUIRED IN THE PROSPECTUS
Item 1. Beginning of Registration Statement
and Outside Front Cover Page of
Prospectus............................ Outside front cover page of
Proxy Statement/Prospectus
Item 2. Beginning and Outside Back Cover
Page of Prospectus.................... Table of Contents
Item 3. Synopsis and
Risk Factors.......................... Summary; Risk Factors; Fee
Comparisons
Item 4. Information about the Transaction..... Summary; The Proposed
Reorganization
Item 5. Information about the Registrant...... Outside front cover page of
Proxy Statement/Prospectus;
Summary; The Proposed
Reorganization; Other
Information; Prospec tus and
Statement of Additional
Information of the Phoenix Fund
(incorporated by refer ence)
Item 6. Information about the Trust
Being Acquired........................ Prospectus and Statement of
Additional Information of the
D&P Fund (incorporated by
reference)
Item 7. Voting Information.................... Voting Information and
Requirements
Item 8. Interest of Certain Persons and
Experts............................... Summary; Reasons for the
Proposed Reorganization
Item 9. Additional Information Required
for Reoffering by Persons Deemed to
be Underwriters....................... Not applicable
Part B INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page............................ Cover Page
Item 11. Table of Contents..................... Table of Contents
Item 12. Additional Information about the
Registrant............................ Incorporation of Documents by
Reference
Item 13. Additional Information about the
Trust Being Acquired.................. Incorporation of Documents by
Reference
Item 14. Financial Statements.................. Financial Statements
Part C OTHER INFORMATION
Items 15-17. Information required to be included in Part C is set forth under
the appropriate Item, so numbered, in Part C of this Registration Statement
<PAGE>
DUFF & PHELPS ENHANCED RESERVES FUND
55 East Monroe Street
Chicago, Illinois 60603
(312) 263-2610
Notice of Special Meeting
July 1, 1996
NOTICE IS HEREBY GIVEN to the holders of shares of beneficial interest,
without par value, of Duff & Phelps Enhanced Reserves Fund (the "D&P Fund"), a
series of Duff & Phelps Mutual Funds (the "D&P Trust"), that a special meeting
of shareholders will be held at the offices of Phoenix Duff & Phelps
Institutional Mutual Funds, 101 Munson Street, Greenfield, Massachusetts 01301
on July 1, 1996 at 9:00 a.m. (the "Special Meeting"), for the following
purposes:
1. To approve an Agreement and Plan of Reorganization pursuant to which the
D&P Fund would transfer all of its net assets to the Phoenix Duff & Phelps
Institutional Enhanced Reserves Portfolio (the "Phoenix Fund"), a series of
Phoenix Duff & Phelps Institutional Mutual Funds, in exchange for corresponding
shares of beneficial interest, par value $1.00 per share, of the Phoenix Fund,
which shares would then be distributed to shareholders of the D&P Fund in
connection with the dissolution of the D&P Fund.
2. To transact such other business as may properly come before the Special
Meeting.
Shareholders of record as of the close of business on May 24, 1996 are
entitled to vote at the Special Meeting or any adjournment thereof.
By order of the Board of Trustees,
Thomas N. Steenburg
Secretary
May 31, 1996
SHAREHOLDERS OF THE D&P FUND ARE INVITED TO ATTEND THE SPECIAL MEETING IN
PERSON. IF YOU DO NOT EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE INDICATE YOUR
VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT
IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO
POSTAGE IF MAILED IN THE UNITED STATES.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK
THAT YOU MAIL YOUR PROXY PROMPTLY.
THE TRUSTEES OF THE D&P FUND RECOMMEND THAT YOU CAST YOUR VOTE FOR THE
APPROVAL OF THE REORGANIZATION.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
<PAGE>
DUFF & PHELPS ENHANCED RESERVES FUND
PROXY STATEMENT/PROSPECTUS
Relating to the Acquisition of Assets and Liabilities of
DUFF & PHELPS ENHANCED RESERVES FUND
by and in Exchange for Shares of
PHOENIX DUFF & PHELPS INSTITUTIONAL ENHANCED RESERVES PORTFOLIO
This Proxy Statement/Prospectus is being furnished to shareholders of Duff
& Phelps Enhanced Reserves Fund (the "D&P Fund"), a series of Duff & Phelps
Mutual Funds, a Massachusetts business trust (the "D&P Trust"), and relates to
the special meeting of shareholders of the D&P Fund to be held at the offices of
Phoenix Duff & Phelps Institutional Mutual Funds, 101 Munson Street, Greenfield,
Massachusetts 01301 on July 1, 1996 at 9:00 a.m. and at any and all
adjournments thereof (the "Special Meeting"). The purpose of the Special Meeting
is to approve or disapprove the proposed reorganization (the "Reorganization")
of the D&P Fund which would result in shareholders of the D&P Fund in effect
exchanging their shares of the D&P Fund for corresponding Class X Shares of
beneficial interest of the Phoenix Duff & Phelps Institutional Enhanced Reserves
Portfolio (the "Phoenix Fund"), a series of the Phoenix Duff & Phelps
Institutional Mutual Funds, a Massachusetts business trust (the "Phoenix Trust")
(the D&P Fund and the Phoenix Fund sometimes are referred to herein collectively
as the "Fund"). The investment objective of the Phoenix Fund is to seek high
current income consistent with preservation of capital, which is identical to
that of the D&P Fund. Duff & Phelps Investment Management Co. (the "Adviser")
serves as the investment adviser for the Phoenix Fund and the D&P Fund, and the
same portfolio managers are primarily responsible for the day-to-day portfolio
management of the Phoenix Fund and the D&P Fund. The purpose of the
Reorganization is to seek to increase the quality of administration and
distribution services received by the Fund and to achieve certain efficiencies
with respect to the distribution and marketing of the Fund's shares, which
opportunities have arisen in connection with the recent acquisition by Phoenix
Home Life Mutual Insurance Company of a controlling interest in Duff & Phelps
Corporation, which has been renamed Phoenix Duff & Phelps Corporation. In
connection with the Reorganization, Phoenix Equity Planning Corporation ("Equity
Planning") will replace ALPS Mutual Funds Services, Inc. ("ALPS") as the
distributor of the Fund's shares and as the Fund's administrator. Shareholders
of the Phoenix Fund will be able to exchange their shares for shares of the same
class of other series of the Phoenix Trust.
The Phoenix Fund is one of six series of the Phoenix Trust. The Phoenix
Trust is an open-end, diversified management investment company, which is
authorized to issue an unlimited number of shares of beneficial interest, par
value $1.00 per share. The address and principal executive office of the Phoenix
Trust is 101 Munson Street, Greenfield, Massachusetts 01301 (telephone no. (800)
814-1897). The address and principal executive office of the D&P Trust is 55
East Monroe Street, Chicago, Illinois 60603 (telephone no. (312) 263-2610). The
enclosed proxy card and this Proxy Statement/Prospectus are first being sent to
D&P Fund shareholders on or about May 24, 1996.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Proxy Statement/Prospectus contains information shareholders of the
D&P Fund should know before voting on the Reorganization and constitutes an
offering of shares of the Phoenix Trust only. Please read it carefully and
retain it for future reference. A Statement of Additional Information dated May
31, 1996, relating to this Proxy
(continued on next page)
The date of this Proxy Statement/Prospectus is May 31, 1996.
<PAGE>
(continued from previous page)
Statement/Prospectus (the "Reorganization SAI") has been filed with the
Securities and Exchange Commission (the "SEC") and is incorporated herein by
reference. A Prospectus and Statement of Additional Information containing
additional information about the Phoenix Fund, each dated March 1, 1996, as
supplemented March 1 and May 1, 1996 have been filed with the SEC and are
incorporated herein by reference. A copy of the Prospectus of the Phoenix Fund
(the "Phoenix Fund Prospectus") accompanies this Proxy Statement/Prospectus. A
Prospectus and Statement of Additional Information containing additional
information about the D&P Fund, each dated April 29, 1996, have been filed with
the SEC and are incorporated herein by reference. Copies of any of the foregoing
may be obtained without charge by calling or writing to the D&P Fund at the
telephone number or address shown above. If you wish to request the
Reorganization SAI, please ask for the "Reorganization SAI."
No person has been authorized to give any information or make any
representation not contained in this Proxy Statement/Prospectus and, if so given
or made, such information or representation must not be relied upon as having
been authorized. This Proxy Statement/Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any securities in any jurisdiction in
which, or to any person to whom, it is unlawful to make such offer or
solicitation.
The Phoenix Fund and the D&P Fund are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended, and the
Investment Company Act of 1940, as amended, and in accordance therewith, file
reports and other information with the SEC. Such reports, other information and
proxy statements filed by the Phoenix Fund and the D&P Fund can be inspected and
copied at the public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549 and at its Regional Offices. Copies of such
material can also be obtained from the SEC's Public Reference Branch, Office of
Consumer Affairs and Information Services, Washington, D.C. 20549, at prescribed
rates.
2
<PAGE>
TABLE OF CONTENTS
Page
FEE COMPARISONS...........................................................
APPROVAL OR DISAPPROVAL OF THE PROPOSED REORGANIZATION....................
A. SUMMARY.............................................................
B. RISK FACTORS........................................................
C. THE PROPOSED REORGANIZATION.........................................
Terms of the Reorganization Agreement...............................
Description of Securities to Be Issued..............................
Shares of Beneficial Interest..................................
Voting Rights of Shareholders..................................
Continuation of Shareholder Accounts and Share Certificates....
Reasons for the Proposed Reorganization.............................
Federal Income Tax Consequences.....................................
Comparisons of the Phoenix Fund and D&P Fund........................
Investment Objective and Policies..............................
Management of the Funds........................................
Administration, Bookkeeping and Accounting Services, and
Transfer Agent Distribution....................................
Purchase of Shares.............................................
Redemption Procedures..........................................
Exchange Rights................................................
Declarations of Trust..........................................
D. INFORMATION ABOUT THE FUNDS.........................................
Comparative Performance Information.................................
Ratification of the Phoenix Fund....................................
Expenses............................................................
E. RECOMMENDATIONS OF BOARD OF TRUSTEES................................
OTHER MATTERS THAT MAY COME BEFORE THE MEETING............................
OTHER INFORMATION........................................................
A. SHAREHOLDINGS OF THE D&P FUND AND THE PHOENIX FUND..................
B. SHAREHOLDER PROPOSALS...............................................
VOTING INFORMATION AND REQUIREMENTS.......................................
3
<PAGE>
FEE COMPARISONS
Phoenix Fund
D&P Fund Class X Shares
-------- --------------
Shareholder Transaction Expenses
Sales Load Imposed on Purchases.................. None None
Sales Load Imposed on Reinvested Dividends....... None None
Deferred Sales Load.............................. None None
Redemption Fees.................................. None None
Exchange Fees.................................... None None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees.................................. 0.08%(1) 0.24%
Administration Fees.............................. 0.15% None
Rule 12b-1 Fees.................................. None None
Other Expenses................................... 0.12% 0.10%(2)
Total Fund Operating Expenses
(after waivers and reimbursements)............ 0.35% 0.34%
- ------------------------------
1 Absent the Adviser's voluntary reimbursement, Management Fees for the
D&P Fund would have been 0.15% and Total Fund Operating Expenses would
have been 0.42%.
2 The Adviser has voluntarily agreed to reimburse or waive other operating
Expenses of the Phoenix Fund, excluding interest, taxes, brokerage fees,
commissions and extraordinary expenses until December 31, 1997, to the
extent that such expenses exceed 0.34% of the average annual net asset
value of Class X Shares of the Phoenix Fund. Absent such reimbursement
or waiver, other Expenses are estimated to be 0.29% and Total Fund
Operating Expenses are estimated to be 0.53%.
4
<PAGE>
APPROVAL OR DISAPPROVAL OF THE PROPOSED REORGANIZATION
A. SUMMARY
The following is a summary of, and is qualified by reference to, the more
complete information contained in this Proxy Statement/Prospectus, including:
the Agreement and Plan of Reorganization by and between the D&P Trust, on behalf
of the D&P Fund, and the Phoenix Trust, on behalf of the Phoenix Fund, attached
hereto as Exhibit A (the "Reorganization Agreement"); the prospectus of the D&P
Fund dated April 29, 1996 (the "D&P Prospectus") incorporated herein by
reference; and the prospectus of the Phoenix Fund dated March 1, 1996, as
supplemented (the "Phoenix Prospectus") incorporated herein by reference and
accompanying this Proxy Statement/Prospectus. This Proxy Statement/Prospectus
constitutes an offering of shares of the Phoenix Trust only.
On November 1, 1995, Phoenix Duff & Phelps Corporation (formerly Duff &
Phelps Corporation) ("PDP") became an indirect, majority-owned subsidiary of
Phoenix Home Life Mutual Insurance Company ("Phoenix Home Life"). The
transaction provided PDP with access to the administrative and distribution
capabilities of affiliates of Phoenix Home Life.
The Phoenix Trust currently consists of six series, five series of which
were created to replicate the investment objective and policies and to
facilitate the conversion of former Phoenix Home Life separate account assets
managed for institutional investors by Phoenix Investment Counsel, Inc. ("PIC")
and the sixth series of which was created to replicate the investment objective
and policies and to facilitate the acquisition of the assets and liabilities of
the D&P Fund. The Adviser, a wholly-owned subsidiary of PDP, currently acts as
investment adviser for the D&P Fund and acts as investment adviser for the
Phoenix Fund. PIC, an indirect, wholly-owned subsidiary of the PDP, acts as the
investment adviser for the other five series of the Phoenix Trust. Phoenix
Equity Planning Corporation ("Equity Planning"), a wholly-owned subsidiary of
PDP, acts as the distributor, financial agent and transfer agent for each series
of the Phoenix Trust. As a single open-end, management investment company with
several series, the Phoenix Trust seeks to realize efficiencies for each series
in connection with the distribution, administration and marketing thereof.
The Phoenix Fund was created as one of six series of the Phoenix Trust for
the purposes of replicating the investment objective and policies of the D&P
Fund and facilitating the reorganization (the "Reorganization") of the D&P Fund
into the Phoenix Fund, thereby making it a series of the Phoenix Trust (the D&P
Fund and the Phoenix Fund sometimes are referred to herein collectively as the
"Fund"). The investment objective of the Phoenix Fund is to seek a high level of
current income consistent with the preservation of capital, which is identical
to that of the D&P Fund. There can be no assurance that the Phoenix Fund will
achieve its investment objective. In connection with the Reorganization, Equity
Planning will replace ALPS Mutual Funds Services, Inc. ("ALPS") as the
distributor of the Fund's shares and as the Fund's administrator. Shareholders
of the Phoenix Fund will be able to exchange their shares for shares of the same
class of other series of the Phoenix Trust. Following the Reorganization, the
Phoenix Fund and the other series of the Phoenix Trust will share a joint
prospectus and, from time to time, joint marketing materials. Management of the
Fund believes that these changes will increase the quality of administration and
distribution services received by the Fund and will achieve certain efficiencies
with respect to the distribution and marketing of the Fund's shares.
Each series of the Phoenix Trust, including the Phoenix Fund, is currently
authorized to offer two classes of shares on a continuous basis. The Class X
Shares of the Phoenix Fund (the "Class X Shares") are substantially similar to
the existing shares of the D&P Fund. As described in more detail below, if the
Reorganization is approved by the shareholders of the D&P Fund and other terms
and conditions of the Reorganization Agreement are satisfied, the D&P Fund will
receive Class X Shares of the Phoenix Fund at the closing in exchange for the
assets and liabilities of the D&P Fund. Such Class X Shares will be distributed
to D&P Fund shareholders and the D&P Fund will be dissolved. The Class X Shares
of the Phoenix Fund to be distributed to the D&P Fund shareholders have no sales
load, distribution fees or service fees, similar to the shares of the D&P Fund.
The redemption rights of Class X Shares of the Phoenix Fund are substantially
similar to the redemption rights of the shares of the D&P Fund. Unlike holders
of shares of the D&P
5
<PAGE>
Fund, however, the holders of Class X Shares of the Phoenix Fund will be able to
exchange their Class X Shares for shares of the same class of other series of
the Phoenix Trust.
The Reorganization is intended to qualify as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"). If the Reorganization so qualifies, in general a
shareholder of the D&P Fund will recognize no gain or loss upon the receipt of
solely the Class X Shares of the Phoenix Fund pursuant to the Reorganization.
Additionally, the D&P Fund would not recognize any gain or loss as a result of
the exchange of all of its net assets for the Class X Shares of the Phoenix Fund
or as a result of its liquidation. The Phoenix Fund expects that it will not
recognize any gain or loss as a result of the Reorganization, that it will take
a carryover basis in the assets acquired from the D&P Fund and that its holding
period of such assets will include the period during which the assets were held
by the D&P Fund. See "The Proposed Reorganization--Federal Income Tax
Consequences."
The Board of Trustees of the D&P Trust and the Phoenix Fund, including the
Trustees who are not interested persons of either registered investment company
participating in the transaction have each unanimously determined that the
Reorganization is in the best interests of the shareholders of each respective
Fund and that such shareholders' interests will not be diluted as a result of
the Reorganization.
THE D&P BOARD RECOMMENDS THAT YOU VOTE FOR THE REORGANIZATION. APPROVAL OF
THE REORGANIZATION REQUIRES THE FAVORABLE VOTE OF THE HOLDERS OF A MAJORITY OF
THE OUTSTANDING SHARES OF THE D&P FUND AND ENTITLED TO VOTE AT THE SPECIAL
MEETING. SEE "RISK FACTORS" "THE PROPOSED REORGANIZATION" AND "VOTING
INFORMATION AND REQUIREMENTS."
B. RISK FACTORS
The Phoenix Fund was created for the purposes of replicating the investment
objectives and policies of the D&P Fund and facilitating the acquisition of the
assets and liabilities of the D&P Fund. The investment objective of the Phoenix
Fund is identical to that of the D&P Fund. There can be no assurance that the
Phoenix Fund or the D&P Fund will achieve its investment objective. The
investment policies and practices of the Phoenix Fund are substantially similar
to those of the D&P Fund. The Adviser of the Phoenix Fund is the same as that of
the D&P Fund, and the portfolio managers primarily responsible for the
day-to-day management of the Phoenix Fund are the same as those of the D&P Fund.
Accordingly, the risks of the Phoenix Fund are expected to be substantially
similar to the risks of the D&P Fund as described in the D&P Prospectus. Please
see "Investment Objectives and Policies" and "Investment Techniques and Related
Risks" in the accompanying Phoenix Fund Prospectus.
C. THE PROPOSED REORGANIZATION
Terms of the Reorganization Agreement
On February 16, 1996, the D&P Board approved the Reorganization. The
Reorganization Agreement provides that at the time of the closing (the
"Closing") the D&P Fund will transfer all or substantially all of its assets to
the Phoenix Fund in exchange for (i) Class X Shares of the Phoenix Fund and (ii)
the assumption of the liabilities of the D&P Fund by the Phoenix Fund. At the
Closing, the Phoenix Fund will issue full and fractional Class X Shares to the
D&P Fund equal in number to the issued and outstanding shares of the D&P Fund as
of the Closing. The D&P Fund will distribute such Class X Shares of the Phoenix
Fund to the shareholders of the D&P Fund, one Class X Share for each share of
the D&P Fund owned, and then dissolve pursuant to the Reorganization Agreement.
The Reorganization is subject to the approval of the shareholders of the
D&P Fund. Provided the Reorganization has been approved by the shareholders of
the D&P Fund and other terms and conditions of the Reorganization Agreement are
satisfied, the Closing will occur on or about June 14, 1996, or such later date
as soon as practicable thereafter as the Phoenix Fund and the D&P Fund may
mutually agree.
6
<PAGE>
In the Reorganization Agreement, the D&P Trust and the Phoenix Trust have
made certain representations and warranties to each other regarding their
respective organization, registration, authority, capitalization and conduct of
business.
Unless waived in accordance with the Reorganization Agreement, the
obligations of the parties to the Reorganization Agreement are subject to, among
other things:
3. Approval of the Reorganization by the D&P Fund's shareholders;
4. The absence of any action, suit or other proceeding threatened or
pending seeking to prevent the consummation of the transactions
contemplated by the Reorganization Agreement;
5. The receipt of all necessary consents, orders or permits under Federal,
state or local regulatory authorities;
6. The truth in all material respects as of the Closing of the
representations and warranties of the parties and performance and
compliance in all material respects with the parties' agreements,
obligations and covenants required by the agreements;
7. The effectiveness of this Proxy Statement/Prospectus under applicable
law and obtaining of any approvals, registrations or exemptions under
federal and state securities laws; and
8. Receipt of the opinion of counsel relating to the tax-free status of the
Reorganization.
The Reorganization Agreement may be terminated or amended by the mutual
consent of the parties either before or after approval thereof by the
shareholders of the D&P Fund, provided that no such amendment after such
approval shall be made if it would have the effect of adversely changing the
number of Class X Shares to be issued to the D&P Fund's shareholders.
The Adviser has agreed to pay all of the costs of soliciting approval of
the Reorganization by the D&P Fund's shareholders and related costs of the
Reorganization, including expenses incurred by the D&P Fund.
Description of Securities To Be Issued
Shares of Beneficial Interest
The shares of beneficial interest in the Phoenix Fund being offered hereby
are represented by transferable shares of beneficial interest, par value $1.00
per share, designated Class X Shares (the "Class X Shares"). Shareholders of the
D&P Fund receiving Class X Shares pursuant to the Reorganization will not be
subject to the minimum initial investment requirements normally applicable to
Class X Shares of the Phoenix Fund. The Reorganization Agreement and Declaration
of Trust of the Phoenix Trust (the "Phoenix Declaration") permits the Phoenix
Board, as they deem necessary or desirable, to create one or more separate
investment portfolios and to issue a separate series of shares for each
portfolio and subject to compliance with the Investment Company Act of 1940, as
amended (the "1940 Act"), to further sub-divide the shares of a series into one
or more classes of shares for such series. The Phoenix Fund currently is
authorized to issue one additional class of shares, designated Class Y Shares.
Shares of each class represent an identical interest in the investment portfolio
of the Phoenix Fund, and generally have the same rights except that Class Y
Shares bear certain distribution costs which cause the Class Y Shares to have a
higher expense ratio and to receive lower dividends than the Class X Shares. The
Phoenix Fund anticipates commencing distribution of Class Y Shares after the
Reorganization. Further information regarding the Class X Shares and Class Y
Shares of the Phoenix Fund is contained in the accompanying Phoenix Fund
Prospectus.
7
<PAGE>
Voting Rights of Shareholders
Holders of shares of the Phoenix Fund are entitled to one vote per share on
matters as to which they are entitled to vote; however, separate votes generally
are taken by each series (or classes thereof) when matters affect only a series
(or class thereof) or affect such series (or class thereof) differently. The
shareholder voting rights contained in the Phoenix Declaration are substantially
similar to the shareholder voting rights contained in the Amended and Restated
Declaration of Trust of the D&P Trust (the "D&P Declaration").
Each of the Phoenix Trust and the D&P Trust operates as a diversified,
open-end management investment company registered with the SEC under the 1940
Act. Therefore, in addition to the specific voting rights described above,
shareholders of the Phoenix Trust, as well as shareholders of the D&P Trust, are
entitled, under current law, to vote with respect to certain other matters,
including changes in fundamental investment policies and restrictions and the
ratification of the selection of independent auditors. Under the 1940 Act,
shareholders owning not less than 10% of the outstanding shares of the Phoenix
Trust or D&P Trust may request that the respective board of trustees call a
shareholders' meeting for the purpose of voting upon the removal of trustee(s).
Continuation of Shareholder Accounts and Share Certificates
If the Reorganization is approved, the Phoenix Fund will establish at the
Closing an account for each D&P Fund shareholder containing the appropriate
number of Class X Shares of the Phoenix Fund. Accounts of the Phoenix Fund are
in book-entry form. It will not be necessary for shareholders of the D&P Fund to
whom certificates have been issued to surrender their certificates. Upon
liquidation of the D&P Fund, such certificates will become null and void.
Reasons For The Proposed Reorganization
In determining whether to recommend approval of the Reorganization to
shareholders of the D&P Fund, the D&P Board considered a number of factors,
including, but not limited to: (l) capabilities and resources of the Adviser and
the other service providers to the Phoenix Fund in the areas of administration,
marketing, distribution and shareholder services; (2) advisory fees and other
expenses applicable to the D&P Fund and the Phoenix Fund and the estimated
expense ratios of the Phoenix Fund after the Reorganization; (3) the terms and
conditions of the Reorganization Agreement and whether the Reorganization would
result in dilution of D&P Fund shareholder interests; (4) the advantages of
marketing the Phoenix Fund together with the other series of the Phoenix Trust;
(5) the potential for a reduction of printing and marketing expenses through the
use of a joint prospectus and joint marketing materials; (6) the costs estimated
to be incurred by the respective funds as a result of the Reorganization; (7)
the availability of exchangeability of shares of the same class among the series
of the Phoenix Trust; and (8) the anticipated tax consequences of the
Reorganization. Based upon these factors, the D&P Board unanimously determined
that the Reorganization is in the best interests of the shareholders of the D&P
Fund.
Federal Income Tax Consequences
The following is a general discussion of the material federal income tax
consequences of the Reorganization to shareholders of the D&P Fund and
shareholders of the Phoenix Fund. It is based upon the Code, Treasury
regulations, judicial authorities, published positions of the Internal Revenue
Service (the "Service") and other relevant authorities, all as in effect on the
date hereof and all of which are subject to change or different interpretations
(possibly on a retroactive basis). This summary is limited to shareholders who
hold their D&P Fund shares as capital assets. No advance rulings have been or
will be sought from the Service regarding any matter discussed in this Proxy
Statement/Prospectus. Accordingly, no assurances can be given that the Service
could not successfully challenge the intended federal income tax treatment
described below. Shareholders should consult their own tax advisors to determine
the specific federal income tax consequences of all transactions relating to the
Reorganization, as well as the effects of state, local and foreign tax laws.
8
<PAGE>
The Reorganization is intended to qualify as a "reorganization" within the
meaning of Section 368(a) of the Code. It is a condition to closing that
the Phoenix Fund and the D&P Fund receive an opinion from the law firm of
Skadden, Arps, Slate, Meagher & Flom to the effect that for federal income tax
purposes:
1. The acquisition and assumption by the Phoenix Fund of the assets
and liabilities of the D&P Fund in exchange solely for Class X Shares of
the Phoenix Fund will qualify as a tax-free reorganization within the
meaning of Section 368(a) of the Code.
2. No gain or loss will be recognized by the D&P Fund or the Phoenix
Fund upon the transfer to, and assumption by, the Phoenix Fund of the
assets and liabilities of the D&P Fund in exchange solely for the Class X
Shares of the Phoenix Fund.
3. The Phoenix Fund's basis in the D&P Fund's assets received in the
Reorganization will, in each instance, equal the basis of such assets in
the hands of the D&P Fund immediately prior to the transfer, and the
Phoenix Fund's holding period of such assets will, in each instance,
include the period during which the assets were held by the D&P Fund.
4. No gain or loss will be recognized by the shareholders of the D&P
Fund upon the exchange of their shares of the D&P Fund solely for the Class
X Shares of the Phoenix Fund.
5. The tax basis of the Class X Shares of the Phoenix Fund received by
the shareholders of the D&P Fund will be the same as the tax basis of the
shares of the D&P Fund surrendered in exchange therefor.
6. The holding period of the Class X Shares of the Phoenix Fund
received by the shareholders of the D&P Fund will include the holding
period of the shares of the D&P Fund surrendered in exchange therefor.
In rendering its opinion, Skadden, Arps, Slate, Meagher & Flom may rely
upon certain representations of the management of the D&P Fund and the Phoenix
Fund and it has assumed, for purposes of such opinion, that the Reorganization
will be consummated as described in the Reorganization Agreement and that
issuances and redemptions of shares of the D&P Fund occurring prior to the
Closing and issuances and redemptions of Class X Shares of the Phoenix Fund
occurring after the Closing will be solely in the ordinary course of business
of each such Fund.
The Phoenix Fund intends to be taxed under the rules applicable to
regulated investment companies as defined in Section 851 of the Code, which are
the same rules currently applicable to the D&P Fund and its shareholders.
Comparisons of the Phoenix Fund and the D&P Fund
Investment Objective and Policies
The investment objective of the Phoenix Fund is to seek to provide a high
level of current income consistent with the preservation of capital, which is
identical to the investment objective of the D&P Fund. The investment policies
of the Phoenix Fund are described in the Phoenix Prospectus attached to this
Proxy Statement/Prospectus and are incorporated herein by reference. Such
investment policies are substantially similar to the investment policies of the
D&P Fund.
Management of the Funds
The business and affairs of the D&P Fund and the Phoenix Fund are managed
under the supervision of the D&P Board and Phoenix Board, respectively. The D&P
Board currently consists of six trustees, including one trustee who is an
"interested person" of the D&P Fund as defined by the 1940 Act. The Phoenix
Board consists of seventeen trustees, including three trustees who are
interested persons of the Phoenix Fund as defined by the 1940 Act. The Phoenix
Board combines the six trustees of the D&P Trust and other investment companies
advised by the Adviser with eleven trustees
9
<PAGE>
who currently also serve as trustees for investment companies advised by Phoenix
Investment Counsel, Inc. or National Securities and Research Corporation,
wholly-owned subsidiaries of PDP. Although the number of board members
increases, the aggregate trustee compensation expense of the Phoenix Fund is
anticipated to be less than the aggregate trustee compensation expense of the
D&P Fund because of changes in the compensation structure and rates and
economics of scale from having more series under the Phoenix Trust.
The Adviser serves as the investment adviser to the D&P Fund pursuant to an
investment advisory agreement dated September 7, 1995. The D&P Fund's
investment advisory agreement was last approved by the D&P Board, including a
majority of the disinterested trustees, on July 12, 1995, and by shareholders on
September 7, 1995 at a meeting called for the purpose of approving the
assignment of the D&P Fund's investment advisory agreement in connection with
Phoenix Home Life's acquisition of a controlling interest in PDP. The D&P Fund
currently pays the Adviser a monthly fee based on its average daily net asset
value at the annual rate of 0.15%.
The Adviser will serve as the investment adviser to the Phoenix Fund
pursuant to an investment advisory agreement dated the date of the Closing. In
connection with the Reorganization, the Phoenix Fund will issue a single Class X
Share to the D&P Fund. If the Reorganization is approved by shareholders of the
D&P Fund, the D&P Fund will approve the proposed investment advisory agreement
of the Phoenix Fund as sole shareholder immediately preceding the Closing. The
Phoenix Fund will pay the Adviser a monthly fee based on its average daily net
asset value at the annual rate of 0.24% of the first $1 billion of average daily
net assets, which fee is reduced to 0.19% on average daily net assets over $1
billion.
Although the investment advisory fee with respect to the Phoenix Fund is at
an annual rate which is higher than the investment advisory fee with respect to
the D&P Fund, Management believes that the investment advisory fee is
supportable and consistent with current fees for the reasons specified below.
First, the Phoenix Fund advisory fee includes administration and certain other
expenses characterized as separate expenses to the D&P Fund. Accordingly, the
Phoenix Fund advisory fee will be partially offset by the lower administration
and administration-related expenses to be charged by Equity Planning after the
Reorganization, which Management estimates will be approximately 0.06% lower
annually than the administration fee currently paid to ALPS. Second, Management
believes that certain expenses such as printing and marketing expenses may be
reduced after the Reorganization by spreading such expenses over the aggregate
assets of all of the series of the Phoenix Trust. Third, the Adviser has
voluntarily agreed to reimburse or waive total fund operating expenses of the
Phoenix Fund, excluding interest, taxes, brokerage fees, commissions and
extraordinary expenses until December 31, 1997, to the extent that such expenses
exceed 0.34% of the average annual net asset value of Class X Shares of the
Phoenix Fund. The Adviser has made no determination with respect to any
reimbursement or waiver with respect to the D&P Fund. There are no assurances
that subsequent to December 31, 1997, the expense ratio of the Phoenix Fund will
not be higher or lower than the historical expense ratio of the D&P Fund. See
"FEE COMPARISONS". In addition to advisory services, after the Reorganization,
the Adviser, at its expense, will furnish to the Phoenix Fund adequate office
space and facilities and certain administrative services, including the services
of any member of its staff who serves as a trustee or officer of the Phoenix
Fund. The investment advisory agreement with respect to each of the D&P Fund and
the Phoenix Fund provides that, subject to governing law, the Adviser shall not
be liable for any error of judgment or of law or for any loss suffered by the
respective Fund, except a loss resulting from willful misfeasance, bad faith,
gross negligence or reckless disregard on the part of the Adviser. For more
detailed information concerning the Adviser see generally "MANAGEMENT OF THE
FUND" in the Phoenix Prospectus accompanying this Proxy Statement/Prospectus.
Administration, Bookkeeping and Pricing Agent, and Transfer Agent
ALPS currently serves as the administrator, bookkeeping and pricing agent
and transfer agent of the D&P Fund. As administrator, ALPS assists in
maintaining the Fund's office, furnishes the D&P Fund with clerical and certain
other services required by it, compiles data for and prepares notices and
semi-annual reports to the SEC, prepares filings with state securities
commissions, coordinates federal and state tax returns, performs fund
accounting, monitors expense accruals, monitors compliance with the D&P Fund's
investment policies and limitations, and generally assists in the D&P Fund's
operations. As bookkeeping and pricing agent, ALPS maintains the accounts and
records of the D&P Fund, computes net asset value and prepares certain other
financial information. As transfer agent, ALPS maintains shareholder accounts
and records of the D&P Fund. In consideration of these services, the D&P Fund
pays ALPS a fee computed daily and payable monthly, equal to the greater of (i)
an annual rate of 0.15% of the first $1 billion in average daily net assets of
the D&P Fund, 0.125% of the next $500 million in average daily net assets and
0.10% of the average daily net
10
<PAGE>
assets in excess of $1.5 billion, or (ii) $15,000 per month. ALPS has engaged
American Data Services, Inc. as a sub-bookkeeping and pricing agent and State
Street Bank and Trust Company to serve as sub-transfer agent.
After the Reorganization, Equity Planning will perform the administrative,
bookkeeping, pricing services, and other administrative functions and serve as
transfer agent for all series of the Phoenix Trust, including the Phoenix Fund.
As compensation, Equity Planning receives a quarterly fee based on the average
of the aggregate daily net asset value of the Phoenix Trust at an annual rate of
$300 per $1 million of net assets (0.03%) plus a transfer agent fee of $19.25
plus out-of-pocket expenses for each designated shareholder account. Expenses
relating to registration of shares of the Phoenix Trust with the SEC, state blue
sky fees and auditing expenses are charged directly to the Phoenix Trust. Equity
Planning estimates that the other operating total expenses of the Phoenix Fund
will equal approximately 0.10% of the average daily net assets of the Class X
Shares of the Phoenix Fund absent reimbursement or waiver as more particularly
described in the Phoenix Trust Prospectus. Equity Planning has engaged State
Street Bank and Trust Company to serve as sub-transfer agent for the Phoenix
Trust for which it shall be paid a fee by Equity Planning. See "FEE
COMPARISONS."
Distribution
The D&P Fund currently has issued and outstanding one class of shares
distributed by ALPS. No sales loads, distribution fees or service fees are paid
in connection with the distribution of the D&P Fund's shares. No separate
compensation is paid to ALPS for its distribution services.
Equity Planning serves as the national distributor of the shares of each
series of the Phoenix Trust, including the Phoenix Fund. Each series of the
Phoenix Trust, including the Phoenix Fund, is currently authorized to issue two
classes of shares on a continuous basis designated as the Class X Shares and
Class Y Shares. The Class X Shares of the Phoenix Fund (the "Class X Shares")
are substantially similar to the existing shares of the D&P Fund. Shareholders
of the D&P Fund will receive Class X Shares in exchange for their shares of the
D&P Fund in connection with the Reorganization. The Class X Shares are similar
to shares of the D&P Fund insofar as they are not subject to any sales loads,
distribution fees or service fees. After the Reorganization, the Phoenix Fund
also will issue Class Y Shares. Class Y Shares will be subject to a service fee
not to exceed 0.25% annually of the average daily net assets of the Phoenix
Fund. The service fee is charged on Class Y Shares only, and Class X Shares will
pay no part of the service fee or any distribution fee or sales load. For a
complete description of the Class X Shares and the Class Y Shares, see the
section entitled "DISTRIBUTION PLAN" in the Phoenix Fund Prospectus accompanying
this Proxy Statement/Prospectus.
Purchase of Shares
Shares of the D&P Fund are available exclusively for institutional
investors, which term generally includes any bank, savings institution, trust
company, insurance company, investment company, pension or profit-sharing trust,
qualified institutional buyer (as defined in Rule 144A under the Securities Act
of 1933) or other financial institution or institutional buyer to whom the sale
of shares of the D&P Fund would be exempt from registration under applicable
state securities laws. From time to time shares of the D&P Fund may be
registered under the securities laws of various states as required. The minimum
initial investment in the D&P Fund is $10,000.
The Phoenix Fund currently is authorized to offer two classes of shares on
a continuous basis. Class X Shares are available to Plans (as hereafter defined)
and institutional investors that initially purchase shares in excess of $5
million (shareholders of the D&P Fund acquiring Class X Shares in the
Reorganization are not subject to such minimum initial investment). Class Y
Shares are offered to Plans and institutional investors that initially purchase
shares in excess of $1 million. The minimum subsequent investment for each class
is $100. "Plans" are defined as corporate, public, union and governmental
pension plans. Shares of each class represent an identical interest in the
investment portfolio of the Phoenix Fund, and generally have the same rights,
except that Class Y Shares bear the cost of certain distribution fees which
cause the Class Y Shares to have a higher expense ratio and to receive lower
dividends than Class X Shares.
11
<PAGE>
Redemption Procedures
Both the D&P Fund and the Phoenix Fund permit written and telephone
redemption of shares. Unlike the D&P Fund, however, the Phoenix Fund does not
require a $10,000 minimum for redemption by telephone. In addition, unlike the
D&P Funds, the Phoenix Fund imposes a $100,000 maximum on the amount of its
shares that may be redeemed by telephone. While the telephone redemption
privilege must be requested by D&P Fund shareholders, telephonic redemption
privileges are automatically granted to Phoenix Fund shareholders. If the amount
of the requested redemption from the Phoenix Fund is $500 or more, the proceeds
will be wired to the shareholder's designated U.S. commercial bank account. If
the amount of the redemption is less than $500, the proceeds will be sent by
check to the address of record on the shareholder's account. Phoenix Fund
shareholders also are entitled to participate in the Systematic Withdrawal
Program and check writing privileges more fully discussed in the Phoenix
Prospectus attached to this Proxy Statement/Prospectus and incorporated herein
by reference.
Exchange Rights
The Phoenix Fund will permit exchangeability of its Class X Shares into
Class X Shares of all other series of the Phoenix Trust as described more fully
in the Phoenix Prospectus accompanying this Proxy Statement/Prospectus. The D&P
Fund does not permit exchangeability of shares.
Declarations of Trust
The terms and conditions of the D&P Declaration and Phoenix Declaration are
substantially similar. Each of the D&P Trust and the Phoenix Trust was organized
as a business trust under the laws of the Commonwealth of Massachusetts.
Pursuant to its respective declaration, the business and affairs of the Phoenix
Trust and the D&P Trust are supervised by the Phoenix Board and D&P Board,
respectively. The principal responsibilities, powers and fiduciary duties of the
trustees under the Phoenix Declaration and D&P Declaration are substantially
similar, except that trustees of the Phoenix Board may be removed from office
with or without cause upon the approval of two-thirds of the trustees then in
office prior to such removal or may be removed with or without cause by a
majority vote of the outstanding shares while trustees of the D&P Board may be
removed from office only with cause upon the approval of two-thirds of the
trustees then in office prior to such removal or may be removed with or without
cause only by a two-thirds vote of the outstanding shares. The D&P Declaration
also requires the vote of 75% of the shares of the D&P Fund to approve certain
transactions with principal shareholders of the D&P Fund as defined within the
D&P Declaration.
The above information is only a summary of more complete information
contained in this Proxy State ment/Prospectus and the related Reorganization
SAI.
D. INFORMATION ABOUT THE FUNDS
Phoenix Fund. Information about the Phoenix Fund is included in its current
Prospectus dated March 1, 1996 which accompanies this Proxy
Statement/Prospectus. Additional information about the Phoenix Fund is included
in its current Statement of Additional Information dated the same date as the
Phoenix Fund Prospectus. Copies of the Phoenix Fund Statement of Additional
Information may be obtained without charge by calling (800) 814-1897. The
Phoenix Fund is subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith files proxy material, reports
and other information with the SEC. These reports can be inspected and copied at
the Public Reference Facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at its Regional Offices. Copies of such material can
also be obtained from the Public Reference Branch, Office of Consumer Affairs
and Information Services, Securities and Exchange Commission, Washington, D.C.
20549 at prescribed rates.
D&P Fund. Information about the D&P Fund is included in its current
Prospectus dated April 29, 1996. Additional information about the D&P Fund is
included in its current Statement of Additional Information dated the same date
as the D&P Fund Prospectus. Copies of the D&P Fund's Statement of Additional
Information may be obtained without charge by calling (800) 500-3833. The D&P
Fund is subject to the informational requirements of the Securities Exchange Act
of 1934 and in accordance therewith files proxy material, reports and other
information with the SEC.
12
<PAGE>
These reports can be inspected and copied at the Public Reference Facilities
maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 and at
its Regional Offices. Copies of such material can also be obtained from the
Public Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549 at prescribed rates.
Comparative Performance Information
The Phoenix Fund has not yet commenced investment operations and has no
performance history. However, the Adviser acts as investment adviser for both
the D&P Fund and the Phoenix Fund, and the same portfolio managers are
responsible for the day-to-day investment operations of the D&P Fund and Phoenix
Fund. The investment objectives are identical and the investment policies are
substantially similar. See "The Proposed Reorganization - Comparisons of the
Phoenix Fund and D&P Fund - Investment Objectives and Policies."
Ratification of the Phoenix Fund's Objective, Policies and Restrictions
Approval of the Reorganization will constitute the ratification by D&P Fund
shareholders of the investment objective, policies and restrictions of the
Phoenix Fund. For a discussion of the investment objective, policies and
restrictions of the Phoenix Fund, see the Phoenix Fund Prospectus accompanying
this Proxy Statement/Prospectus. Approval of the Reorganization will constitute
approval of amendments to any of the fundamental investment restrictions of the
D&P Fund that might otherwise be interpreted as impeding the Reorganization,
but solely for the purpose of and to the extent necessary for, consummation of
the Reorganization.
Expenses
The expenses of the Reorganization, including expenses incurred by the D&P
Fund, will be borne by the Adviser.
Duff & Phelps Enhanced Reserves Fund
Capitalized Costs @ 5/26/96
Unamortized Organizational Costs 145,979
Initial Seed Capital 100,000
---------
Total Capitalized Assets 245,979
Payable to Duff & Phelps (226,586)
----------
Capitalization included in Net Assets 19,393
Shares Outstanding 11,594,540
NAV effect of Capitalization 0.00167
E. RECOMMENDATIONS OF BOARD OF TRUSTEES
The D&P Board has unanimously approved the Reorganization Agreement and has
determined that participation in the Reorganization is in the best interests of
the shareholders of the D&P Fund. The D&P Board recommends voting FOR the
proposed Reorganization.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
It is not anticipated that any action will be asked of the shareholders of
the D&P Fund other than as indicated above, but if other matters are properly
brought before the Special Meeting, it is intended that the persons named in the
proxy will vote in accordance with their judgment.
OTHER INFORMATION
A. SHAREHOLDINGS OF THE D&P FUND AND THE PHOENIX FUND
At the close of business on May 24, 1996, the record date for the Meeting,
there were 11,594,540 Shares of the D&P Fund outstanding and entitled to
vote at the meeting. As of such date, the following persons were known by the
D&P Fund to own of record or "beneficially" 5% or more of the outstanding shares
of the D&P Fund as determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, as amended.
ENHANCED RESERVES FUND
Shareholders Owning More Than 5% Of The Fund
May 24, 1996
Shareholder Shares Owned
- ----------- ------------
International Union of Operating Engineers
Welfare Fund of Eastern PA & Delaware 1,084,577.874
Eastern Airlines Retiree Health and Benefits Trust 998,344.231
River Oaks Trust Custodian for TXIW Pension Fund 1,121,896.990
International Union of Operating Engineers of
Eastern PA and Delaware Annuity Fund 821,420.002
Delta Airlines Inc. 2,495,821.159
River Oaks Trust Custodian for Herman Hospital 2,806,818.135
At the close of business on May 17, 1996, there were no Class X
or Class Y Shares of the Phoenix Fund issued and outstanding. Prior to the
Reorganization, a single Class X Share of the Phoenix Fund shall be issued to
and owned by the D&P Fund for the purpose of obtaining initial shareholder
approval of (i) the investment advisory agreement between the Phoenix Fund and
the Adviser, (ii) the Phoenix Fund's distribution agreements and (iii) the
appointment of Price Waterhouse LLP as the Phoenix Fund's independent public
accountants.
The trustees and officers of the D&P Fund owned no shares of the D&P Fund
as of March 31, 1996. The trustees and officers of the Phoenix Fund owned no
shares of the Phoenix Fund as of such date.
13
<PAGE>
B. SHAREHOLDER PROPOSALS
As a general matter, the D&P Fund does not intend to hold future regular
annual or special meetings of shareholders unless required by the 1940 Act. Any
shareholder who wishes to submit proposals for consideration at a meeting of
shareholders of the D&P Fund should send such proposal to the D&P Fund at 55
East Monroe, Chicago, IL 60603. To be considered for presentation at a
shareholders' meeting, rules promulgated by the SEC require that, among other
things, a shareholder's proposal must be received at the offices of the D&P Fund
a reasonable time before a solicitation is made. Timely submission of a proposal
does not necessarily mean that such proposal will be included in any proxy
material or presented at the meeting.
VOTING INFORMATION AND REQUIREMENTS
Each valid proxy given by a shareholder of the D&P Fund will be voted by
the persons named in the proxy in accordance with the designation on such proxy
on the Reorganization proposal and as the persons named in the proxy may
determine on such other business as may come before the Special Meeting on which
shareholders are entitled to vote. Approval of the Reorganization will require
the favorable vote of the holders of a majority of the outstanding shares of
the D&P Fund entitled to vote at the Special Meeting. Shares not voted with
respect to a proposal due to an abstention or broker non-vote will be deemed
votes not cast with respect to such proposal, but such shares will be deemed
present for quorum purposes. If no designation is made, the proxy will be voted
by the persons named in the proxy as recommended by the D&P Board "FOR" approval
of the Reorganization.
Shareholders who execute proxies may revoke them at any time before they
are voted by filing with the D&P Fund a written notice of revocation, by
delivering a duly executed proxy bearing a later date, or by attending the
Special Meeting and voting in person. The giving of a proxy will not affect your
right to vote in person if you attend the Special Meeting and wish to do so.
In the event that sufficient votes in favor of the Reorganization are not
received by the scheduled time of the Special Meeting, the persons named in the
proxy may propose and vote in favor of one or more adjournments of the Special
Meeting to permit further solicitation of proxies. If sufficient shares were
present to constitute a quorum, but insufficient votes had been cast in favor of
the Reorganization to approve it, proxies would be voted in favor of adjournment
only if the D&P Board determined that adjournment and additional solicitation
was reasonable and in the best interest of the shareholders of the D&P Fund,
taking into account the nature of the proposal, the percentage of the votes
actually cast, the percentage of negative votes, the nature of any further
solicitation that might be made and the information provided to shareholders
about the reasons for additional solicitation. Any such adjournment will require
the affirmative vote of the holders of a majority of the outstanding shares
voted at the session of the Special Meeting to be adjourned.
Proxies of shareholders of the D&P Fund are solicited by the D&P Board. The
cost of solicitation will be paid by the Adviser after the Reorganization.
Additional solicitation may be made by mail, personal interview, telephone,
facsimile and telegraph by personnel of the D&P Fund or the Adviser who will not
be additionally compensated therefor.
May 31, 1996
PLEASE SIGN AND RETURN YOUR PROXY PROMPTLY.
14
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
Relating to the Acquisition of Assets and Liabilities of
DUFF & PHELPS ENHANCED RESERVES FUND
by and in Exchange for Shares of
PHOENIX DUFF & PHELPS INSTITUTIONAL ENHANCED RESERVES PORTFOLIO
This Statement of Additional Information provides information about the
Phoenix Duff & Phelps Institutional Enhanced Reserves Portfolio (the "Phoenix
Fund"), a series of Phoenix Duff & Phelps Institutional Mutual Fund (the
"Phoenix Trust"), an open-end, diversified management investment company, in
addition to information contained in the Proxy Statement/Prospectus of the
Phoenix Fund, dated May 31, 1996, which also serves as the Proxy Statement of
the Duff & Phelps Enhanced Reserves Fund, (the "D&P Fund"), a series of the Duff
& Phelps Mutual Funds (the "D&P Trust"), an open-end, diversified management
investment company in connection with the issuance of shares of the Phoenix Fund
to shareholders of the D&P Fund. This Statement of Additional Information is not
a prospectus. It should be read in conjunction with the Proxy
Statement/Prospectus, into which it has been incorporated by reference and which
may be obtained by contacting the D&P Fund located at 55 East Monroe Street,
Chicago, Illinois 60603, by calling (800) 500-3833 or the Phoenix Fund located
at 101 Munson Street, Greenfield, Massachusetts 01301 by calling (800) 814-1897.
TABLE OF CONTENTS
Page
Proposed Reorganization of the D&P Fund......................................2
Additional Information About the Phoenix Fund................................2
Additional Information About the D&P Fund....................................2
Financial Statements.........................................................2
The Phoenix Fund will provide, without charge, upon the written or oral
request of any person to whom this Statement of Additional Information is
delivered, a copy of any and all documents that have been incorporated by
reference in the registration statement of which this Statement of Additional
Information is a part.
The date of this Statement of Additional Information is May 31, 1996.
B-1
<PAGE>
PROPOSED REORGANIZATION OF THE D&P FUND
The shareholders of the D&P Fund are being asked to approve an acquisition
of the assets and liabilities of the D&P Fund in exchange for Class X Shares of
the Phoenix Fund (the "Reorganization").
For detailed information about the Reorganization, shareholders should
refer to the Proxy Statement/Prospectus.
Additional Information About the Phoenix Fund
Incorporated herein by reference is the Statement of Additional Information
of the Phoenix Fund, dated March 1, 1996, as supplemented, attached as Appendix
A to this Statement of Additional Information.
Additional Information About the D&P Fund
Incorporated herein by reference is the Statement of Additional Information
of the D&P Fund, dated April 29, 1996, attached as Appendix B to this Statement
of Additional Information.
Financial Statements
Incorporated herein by reference in its entirety is the audited financial
statements of the D&P Fund for fiscal year ended December 31, 1995, attached as
Appendix C to this Statement of Additional Information. The Phoenix Fund has not
yet commenced investment operations and has no financial statements.
B-2
<PAGE>
ENHANCED RESERVES FUND
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
ASSETS
Investments, at value (cost $134,385,292)
- see accompanying statement $135,533,181
Cash 1,621
Interest receivable 1,653,447
Deferred organizational costs, net of
accumulated amortization 164,853
Other 4,836
------------
Total Assets 137,357,938
LIABILITIES
Payables:
Dividends 707,144
Duff & Phelps Investment Management Co. 235,102
Other 35,459
------------
Total Liabilities 977,705
------------
NET ASSETS $136,380,233
COMPOSITION OF NET ASSETS - Note 1
Paid-in capital $134,937,709
Undistributed net investment income 532
Accumulated net realized gain from
investment transactions 294,103
Net unrealized appreciation 1,147,889
------------
NET ASSETS $136,380,233
Shares of beneficial interest outstanding 13,529,224
------------
Net asset value and redemption price per share $10.08
======
See Notes to Financial Statements.
<PAGE>
ENHANCED RESERVES FUND
STATEMENT OF INVESTMENTS
December 31, 1995
<TABLE>
<CAPTION>
Face Amount Market Value Bond Rating+
<S> <C> <C> <C>
CORPORATE BONDS 55.04%
Asset-Backed 25.10%
$4,486,508 Chase Manhattan Grantor, 1995-A, ABS
6.00%, 09/17/01 $4,520,242 AAA
5,000,000 First Chicago Master Trust II,
Ser. 93-F A, 6.30%, 02/15/00 (1) 5,023,195 AAA
2,910,501 Ford Grantor Trust 95-A, ABS
5.90%, 05/15/00 2,927,670 AAA
4,000,000 Fremont Small Business Administration,
Ser. 93a, ABS, 6.408%, 03/16/98 (1) 4,006,876 AAA
1,800,000 Fremont Small Business Administration,
Ser. 93b, ABS, 6.438%, 10/15/99 (1) 1,805,506 AAA
556,399 GreenTree Financial, Ser. 94-6A1,
6.35%, 1/15/20 558,079 AAA
2,708,519 GreenTree Financial, Ser. 95-A1,
7.00%, 4/15/20 2,731,804 AAA
2,500,000 MBNA Master Credit Card Trust 94-B A, ABS
5.49%, 01/15/02 (1) 2,508,648 AAA
2,500,000 MBNA Master Trust, Ser. 94-D-A,
5.86%, 03/15/00 (1) 2,500,000 AAA
4,000,000 Standard Credit Card Master Trust,
Ser. 95-4A1, 5.975%, 02/15/00 (1) 4,001,076 AAA
3,566,383 Western Financial, Ser. 95-2 A-1,
7.10%, 07/01/00 3,647,978 AAA
-----------
34,231,074
-----------
Chemicals 1.13%
1,500,000 DuPont Corp,
8.45%, 10/15/96 1,535,989 AA-
-----------
Financial 25.80%
3,675,000 AT&T Capital Corporation,
7.96%, 12/27/96 3,761,664 A
5,000,000 Associates Corp N.A.
6.625%, 05/15/98 5,121,080 AA-
1,000,000 Citicorp MTN Sr Notes,
9.90%, 03/14/96 1,009,115 A+
5,000,000 CIT Group Holdings
5.70%, 12/15/98 5,005,315 AA-
5,714,000 Commercial Credit Co.
8.00%, 09/01/96 5,807,390 A+
6,300,000 General Electric Capital Corp.
5.80%, 10/09/98 (1) 6,310,477 AAA
4,500,000 General Motors Acceptance Corp,
7.50%, 11/04/97 4,647,807 A-
3,500,000 Lehman Brothers Holdings,
9.750%, 04/01/96 3,532,424 A
----------
35,195,272
----------
<PAGE>
ENHANCED RESERVES FUND
STATEMENT OF INVESTMENTS
December 31, 1995 (continued)
Face Amount Market Value Bond Rating+
CORPORATE BONDS (continued)
Food, Beverage & Tobacco 3.01%
$4,000,000 Phillip Morris Co.,
8.75%, 12/01/96 $4,109,852 A
----------
TOTAL CORPORATE BONDS
(Cost $74,549,122) 75,072,187
----------
U.S. Government Agencies 8.86%
1,957,876 Federal National Mortgage Assn, #104878,
ARM, 7.83%, 03/01/20 (1) 2,013,553 AAA
10,000,000 Federal Home Loan Mortgage, 15 Year Gold
6.50%, 1/1/11 10,068,750 AAA
----------
TOTAL U.S. GOVERNMENT AGENCIES
(Cost $12,017,902) 12,082,303
----------
U.S. GOVERNMENT TREASURIES 20.80%
U.S. Treasury Notes 20.80%
7,000,000 7.50%, 01/31/97 7,170,625 AAA
5,000,000 5.875%, 07/31/97 5,053,125 AAA
5,000,000 7.25%, 02/15/98 5,200,000 AAA
5,000,000 6.75%, 04/30/00 5,264,055 AAA
5,000,000 7.50%, 02/15/05 5,676,555 AAA
----------
TOTAL U.S. GOVERNMENT TREASURIES
(Cost $27,803,937) 28,364,360
----------
COMMERCIAL PAPER 12.51%
Finance 12.51%
5,000,000 American Express Credit Corp, CP
5.703%, 2/08/96 5,016,633 D1
5,000,000 John Deere Capital Corp
5.691%, 01/18/96 5,004,742 D1
7,000,000 Norwest Financial CP
5.752%, 01/25/96 7,036,909 D1
----------
TOTAL COMMERCIAL PAPER
(Cost $17,058,284) 17,058,284
----------
REPURCHASE AGREEMENTS 2.17%
2,955,000 State Street Repo. 4.25%, 1/02/96
Collateral: $2,700,000 U.S. Treasury Note
7.50%, 05/15/02 @ 111.703 2,956,047 AAA
----------
Total Repurchase Agreements
(Cost $2,956,047) 2,956,047
----------
<PAGE>
ENHANCED RESERVES FUND
STATEMENT OF INVESTMENTS
December 31, 1995 (continued)
Market Value
TOTAL INVESTMENTS
(Cost $134,385,292) 99.38% $135,533,181
Other Assets in Excess
of Liabilities 0.62% 847,052
------- ------------
NET ASSETS 100.00% $136,380,233
============
</TABLE>
(1) Variable rate security. Reported rate is the effective rate on December
31, 1995
+ Unaudited.
See Notes to Financial Statements.
<PAGE>
Enhanced Reserves Fund
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
INVESTMENT INCOME
Interest $7,693,000
EXPENSES
Investment advisory fee 183,854
Administrative services (Note 3) 183,854
Legal 31,804
Amortization of organization costs 47,100
Insurance 6,227
Registration 28,945
Trustee fees 26,384
Printing 3,024
----------
Total Expenses 511,192
Expenses waived by investment advisor (83,733)
Net Expenses 427,459
----------
NET INVESTMENT INCOME 7,265,541
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from investment transactions 586,169
Unrealized appreciation (depreciation) of investments:
Beginning of period (261,542)
End of period 1,147,889
----------
Net change in unrealized appreciation (depreciation) 1,409,431
Net realized and unrealized gain on investments 1,995,600
----------
Net increase in net assets resulting from operations $9,261,141
==========
See Notes to Financial Statements.
<PAGE>
ENHANCED RESERVES FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the For the
Year Ended Period Ended
December 31, 1995 December 31, 1994 (1)
<S> <C> <C>
FROM INVESTMENT ACTIVITIES
Net investment income $7,265,541 $1,334,485
Net realized gain (loss) on investments 586,169 (75,459)
Net change in unrealized appreciation
(depreciation) 1,409,431 (261,542)
Net increase in net assets resulting
from operations 9,261,141 997,484
Dividends to shareholders from net
investment income (7,264,990) (1,334,504)
Distributions to shareholders from net
realized gain on investments (216,607) 0
---------- ----------
Change in net assets derived from
investment activities 1,779,544 (337,020)
FROM BENEFICIAL INTEREST TRANSACTIONS
Proceeds from sale of shares 347,741,556 85,182,744
Net asset value of shares issued to
shareholders from reinvestment
of dividends 7,095,970 955,111
---------- ----------
354,837,526 86,137,855
Cost of shares redeemed (304,797,452) (1,340,220)
Change in net assets from beneficial
interest transactions 50,040,074 84,797,635
----------- ----------
NET INCREASE IN NET ASSETS 51,819,618 84,460,615
---------- ----------
NET ASSETS:
Beginning of period 84,560,615 100,000(2)
========== ==========
End of period (including
(over)/undistributed net investment
income of $532 and $(19), respectively) $136,380,233 $84,560,615
</TABLE>
(1) Operations commenced on June 27, 1994.
(2) Initial Capitalization.
See Notes to Financial Statements.
<PAGE>
ENHANCED RESERVES FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest
outstanding throughout the periods indicated:
<TABLE>
<CAPTION>
For the For the
Year Ended Period Ended
December 31, 1995 December 31, 1994 (1)
<S> <C> <C>
Net asset value - beginning of period $9.94 $10.00
----- -----
Income from investment operations
Net investment income 0.60 .26
Net realized and unrealized gain (loss)
on investments 0.16 (.06)
----- -----
Total income from investment operations 0.76 .20
Dividends and distributions to shareholders
Dividends from net investment
income (0.60) (.26)
Distributions from net realized gain
on investments (0.02) -
----- -----
Total dividends and distributions
to shareholders (0.62) (.26)
Net asset value - end of period $10.08 $9.94
====== =====
Total return 7.80% 4.02%(2)
Ratios/Supplemental Data:
Net assets, end of period (000) $136,380 $84,561
Ratio of expenses to average net assets 0.35% .34%(2)
Ratio of net investment income to
average net assets 5.93% 5.24%(2)
Ratio of expenses to average net assets
without fee waivers 0.42% .42%(2)
Ratio of net investment income to average
net assets without fee waivers 5.86% 5.17%(2)
Portfolio turnover rate (3) 190.37% 134.29%(2)
</TABLE>
(1) Operations commenced on June 27, 1994.
(2) Annualized.
(3) A portfolio turnover rate is, in general, the percentage computed by
taking the lesser of purchases or sales of portfolio securities (excluding
securities with maturity date of one year or less at the time of
acquisition) for the period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
December 31, 1995 were $246,328,050 and $170,785,915, respectively.
See Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Duff & Phelps Mutual Funds (the "Trust") is registered under the
Investment Company Act of 1940, as amended, as a diversified open-end management
investment company. The Duff & Phelps Enhanced Reserves Fund (the "Fund"),
represents a separate class of shares of beneficial interest of the Trust, which
is organized as a Massachusetts business trust.
The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles.
Investment Valuation: Securities of the Fund are valued at 4:00
p.m. (EST) on each trading day. The Fund's investments are valued at the last
sales price of the day or where market quotations are not readily available, a
fair market value is determined in good faith by or under the direction of the
Board of Trustees. Short-term securities having a remaining maturity of 60 days
or less are valued at amortized cost which approximates market value.
Federal Income Taxes: It is the Fund's policy to comply with
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to shareholders.
Therefore, no Federal Income Tax provision is required.
Repurchase Agreements: The Fund's custodian takes possession of
the collateral pledged for investments in repurchase agreements. The underlying
collateral is valued daily on a mark-to-market basis to ensure that value,
including accrued interest, is at least 100% of the repurchase price. In the
event of default on the obligation to repurchase, the Funds have the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default by or
bankruptcy of the other party to the agreement, realization and/or retention of
the collateral may be subject to legal proceedings.
Organization Costs: The Fund has deferred certain organizational
costs. Such costs are being amortized over a 60 month period from the
commencement of operations. In the event that all or part of the Investment
Advisor's initial investment in shares of the Fund is withdrawn during the
amortization period, the redemption proceeds will be reduced by the
proportionate amount of the unamortized organization costs represented by the
ratio that the number of shares redeemed bears to the number of initial shares
outstanding at the time of each redemption.
Other: Investment transactions are accounted for on the date the
investments are purchased or sold (trade date). Dividends from net investment
income are declared daily and paid monthly. Distributions of net realized gains,
if any, are declared at least once a year. Realized gains and losses from
investment transactions are reported on an identified cost basis which is the
same basis the Fund uses for Federal Income Tax purposes.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
2. SHARES OF BENEFICIAL INTEREST
On December 31, 1995, there was an unlimited number of no par
value shares of beneficial interest authorized. Transactions in shares of
beneficial interest were as follows:
<TABLE>
<CAPTION>
For the Year For the Period
Ended December 31, 1995 Ended December 31, 1994
<S> <C> <C>
Shares Sold 34,673,071 8,535,400
Shares Reinvested 708,262 95,683
---------- ---------
Total 35,381,333 8,631,083
Shares Redeemed 30,358,450 134,742
---------- ---------
Net Increase 5,022,883 8,496,341
========== =========
</TABLE>
3. investment advisory fees, administration fees and other related
party transactions
On November 1, 1995, Duff & Phelps Corporation and Phoenix
Securities Group, Inc. an indirect wholly-owned subsidiary of Phoenix Home Life
Mutual Insurance Company, merged. Upon completion of that merger, Duff & Phelps
Corporation was renamed Phoenix Duff & Phelps. At the completion of the merger,
the Fund entered into a new investment advisory agreement with Duff & Phelps
Investment Management Co., a wholly-owned subsidiary of Phoenix Duff & Phelps.
This agreement has been approved by the Fund's Board of Directors and
shareholders and contains terms and conditions similar to the prior agreement.
Pursuant to its advisory agreement with the Fund, the Investment
Advisor is entitled to an advisory fee, computed daily and payable monthly at an
annual rate of .15 percent of the average net assets. Duff & Phelps voluntarily
waived a portion of its advisory fee for the year ended December 31, 1995.
ALPS Mutual Funds Services, Inc. (aALPS[) serves as the Fund's
administrator. ALPS is entitled to receive a fee from the Fund for its
administrative services computed daily and payable monthly, at an annual rate of
.15 percent of average daily net assets on the first $1 billion, .125 percent on
the next $500 million and .10 percent on assets in excess of $1.5 billion. ALPS
services as administrator include: fund accounting, daily pricing, licensing and
registration, shareholder servicing, transfer agency, fund ratings and training.
4. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
As of December 31, 1995:
Gross Appreciation (excess of value over cost) 1,150,638
Gross Depreciation (excess of cost over value) (2,749)
---------
Net unrealized appreciation 1,147,889
=========
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
Part C - Other Information
Item 15. Indemnification
Incorporated by reference from Item 27 to Part C of Pre-Effective Amendment
No. 2 to the Registration Statement on Form N-1A of Phoenix Duff & Phelps
Institutional Mutual Funds (File Nos. 33-80057 and 811-9140) filed February 28,
1995.
Item 16. Exhibits
(1)(a) Declaration of Trust of the Registrant dated December 4, 1995, filed
with Pre-Effective Amendment No. 1 on February 2, 1996 and
incorporated herein by reference.
(1)(b) Amendment to Declaration of Trust changing the names of Portfolios
filed with Pre-Effective Amendment No. 2 on February 28, 1996 and
incorporated herein by reference.
(2) None.
(3) None.
(4) Form of Agreement and Plan of Reorganization, filed with Registration
Statement on Form N-14 of the above referenced Registrant dated April
26, 1996 and incorporated herein by reference.
(5) None.
(6)(a) Investment Advisory Agreement by and between Registrant and Duff &
Phelps Investment Management Company, Inc. filed with Pre-Effective
Amendment No. 1 on February 2, 1996 and incorporated herein by
reference.
(b) Investment Advisory Agreement by and between Registrant and Phoenix
Investment Counsel, Inc. filed with Pre-Effective Amendment No. 1 on
February 2, 1996 and incorporated herein by reference.
(7)(a) Distribution Agreement between Registrant and Phoenix Equity Planning
Corporation, filed with Pre-Effective Amendment No. 1 on February 2,
1996 and incorporated herein by reference.
(b) Form of Sales Agreement between Phoenix Equity Planning Corporation
and dealers filed with Post-Effective Amendment No. 1 on March 1, 1996
and incorporated herein by reference.
(8) None.
(9)(a) Custodian Agreement by and between Registrant and State Street Bank
and Trust Company, filed herewith.
(b) Custodian Agreement by and between Registrant and The Chase Manhattan
Bank, N.A. filed with Pre-Effective Amendment No. 2 on February 28,
1996 and incorporated herein by reference.
(10)(a) Rule 12b-1 Distribution Plan for Class Y Shares, filed with
Pre-Effective Amendment No. 1 on February 2, 1996 and incorporated
herein by reference.
(b) Rule 18f-3 Dual Distribution Plan, filed with Pre-Effective Amendment
No. 2 on February 28, 1996 and incorporated herein by reference.
C-1
<PAGE>
(11) Opinion of Counsel regarding the legality of shares issued, and filed
with Pre-Effective Amendment No. 2 on February 28, 1996 and
incorporated herein by reference.
(12) Opinion of Skadden, Arps, Slate, Meagher & Flom Counsel [To be filed
by post-effective amendment].*
(13)(a) Financial Agent Agreement by and between Registrant and Phoenix Equity
Planning Corporation, filed with Pre- Effective Amendment No. 1 on
February 2, 1996 and incorporated herein by reference.
(b) Transfer Agent Agreement by and between Registrant and Phoenix Equity
Planning Corporation, filed with Pre- Effective Amendment No. 2 on
February 28, 1996 and incorporated herein by reference.
(14) Consent of Deloitte & Touche LLP, filed herewith.
(15) None.
(16) Powers of Attorney filed with Pre-Effective Amendment No. 2 on
February 28, 1996 and incorporated herein by reference.
(17)(a) Form of proxy filed with Registration Statement filed April 26, 1996
and incorporated herein by reference.
(b) Declaration pursuant to Rule 24f-2 filed with the Registration
Statement on December 6, 1995 filed with Registration Statement filed
April 26, 1996 and incorporated herein by reference.
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of the prospectus which
is a part of this Registration Statement by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act of 1933, the reoffering prospectus will contain the
information called for by the applicable registration form for
reoffering by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to
the Registration Statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities
Act of 1933, each post-effective amendment shall be deemed to be a new
Registration Statement for the securities offered therein, and the
offering of the securities at that time shall be deemed to be the
initial bona fide offering of them.
(3) The undersigned Registrant agrees to file, by post-effective
amendment, an opinion of counsel supporting the tax consequences of
the proposed reorganization within a reasonable time after receipt of
such opinion.
C-2
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has
been signed on behalf of the Registrant, in the City of Hartford and State of
Connecticut on the 31st day of May, 1996.
PHOENIX DUFF & PHELPS
INSTITUTIONAL MUTUAL FUNDS
By: _______________________
Philip R. McLoughlin
President
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities indicated
on the __ day of May, 1996:
Signature: Title:
_____________________ Trustee
C. Duane Blinn*
_____________________ Trustee
Robert Chesek*
_____________________ Trustee
E. Virgil Conway*
_____________________ Trustee
William W. Crawford*
_____________________ Treasurer (principal
Nancy G. Curtiss* financial and
accounting officer)
_____________________ Trustee
Harry Dalzell-Payne*
_____________________ Trustee
William N. Georgeson*
_____________________ Trustee
Francis E. Jeffries*
_____________________ Trustee
Leroy Keith, Jr.*
_____________________ Trustee
Philip R. McLoughlin
_____________________ Trustee
Everett L. Morris*
C-3
<PAGE>
_____________________ Trustee
James M. Oates*
_____________________ Trustee
Richard A. Pavia*
_____________________ Trustee
Calvin J. Pedersen*
_____________________ Trustee
Philip R. Reynolds*
_____________________ Trustee
Herbert Roth, Jr.*
_____________________ Trustee
Richard E. Segerson*
_____________________ Trustee
Lowell P. Weicker, Jr.*
- ------------------------------------------
* Signed by Philip R. McLoughlin pursuant to powers of attorney filed with
Pre-Effective Amendment No. 2 on February 28, 1996
By: __________________________
Philip R. McLoughlin
C-4
CUSTODIAN CONTRACT
Between
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
1. Employment of Custodian and Property to be Held By
It...................................................................................1
2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian in the United States...............................2
2.1 Holding Securities............................................................2
2.2 Delivery of Securities........................................................2
2.3 Registration of Securities....................................................4
2.4 Bank Accounts.................................................................4
2.5 Availability of Federal Funds.................................................5
2.6 Collection of Income..........................................................5
2.7 Payment of Fund Monies........................................................5
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased..........................................................6
2.9 Appointment of Agents.........................................................7
2.10 Deposit of Fund Assets in U.S. Securities System..............................7
2.11 Fund Assets Held in the Custodian's Direct
Paper System..................................................................8
2.12 Segregated Account............................................................9
2.13 Ownership Certificates for Tax Purposes.......................................9
2.14 Proxies......................................................................10
2.15 Communications Relating to Portfolio
Securities...................................................................10
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States..........................................10
3.1 Appointment of Foreign Sub-Custodians........................................10
3.2 Assets to be Held............................................................10
3.3 Foreign Securities Systems...................................................11
3.4 Holding Securities...........................................................11
3.5 Agreements with Foreign Banking Institutions.................................11
3.6 Access of Independent Accountants of the Fund................................11
3.7 Reports by Custodian.........................................................11
3.8 Transactions in Foreign Custody Account......................................12
3.9 Liability of Foreign Sub-Custodians..........................................12
3.10 Liability of Custodian.......................................................12
3.11 Reimbursement for Advances...................................................13
3.12 Monitoring Responsibilities..................................................13
3.13 Branches of U.S. Banks.......................................................13
<PAGE>
3.14 Tax Law......................................................................14
4. Payments for Sales or Repurchases or Redemptions
of Shares of the Fund...............................................................14
5. Proper Instructions.................................................................14
6. Actions Permitted Without Express Authority.........................................15
7. Evidence of Authority...............................................................15
8. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income...................................15
9. Records.............................................................................16
10. Opinion of Fund's Independent Accountants...........................................16
11. Reports to Fund by Independent Public Accountants...................................16
12. Compensation of Custodian...........................................................16
13. Responsibility of Custodian.........................................................17
14. Effective Period, Termination and Amendment.........................................18
15. Successor Custodian.................................................................19
16. Interpretive and Additional Provisions..............................................19
17. Additional Funds....................................................................20
18. Massachusetts Law to Apply..........................................................20
19. Prior Contracts.....................................................................20
20. Shareholder Communications Election.................................................20
</TABLE>
<PAGE>
CUSTODIAN CONTRACT
This Contract between Phoenix Duff & Phelps Institutional Mutual Funds,
a business trust organized and existing under the laws of Massachusetts, having
its principal place of business at 56 Prospect Street, Hartford, Connecticut
06115 hereinafter called the "Fund", and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian",
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund intends to initially offer shares in one series, the
Phoenix Duff & Phelps Institutional Enhanced Reserves Portfolio (such series
together with all other series subsequently established by the Fund and made
subject to this Contract in accordance with paragraph 17, being herein referred
to as the "Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of the assets of
the Portfolios of the Fund, including securities which the Fund, on behalf of
the applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Declaration of
Trust. The Fund on behalf of the Portfolio(s) agrees to deliver to the Custodian
all securities and cash of the Portfolios, and all payments of income, payments
of principal or capital distributions received by it with respect to all
securities owned by the Portfolio(s) from time to time, and the cash
consideration received by it for such new or treasury shares of beneficial
interest of the Fund representing interests in the Portfolios, ("Shares") as may
be issued or sold from time to time. The Custodian shall not be responsible for
any property of a Portfolio held or received by the Portfolio and not delivered
to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Custodian shall on behalf of the applicable Portfolio(s) from time to time
employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Trustees of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
<PAGE>
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of the Fund Held By the
Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and physically segregate
for the account of each Portfolio all non-cash property, to be held by
it in the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities depository
or in a book-entry system authorized by the U.S. Department of the
Treasury and certain federal agencies (each, a "U.S. Securities System")
and (b) commercial paper of an issuer for which State Street Bank and
Trust Company acts as issuing and paying agent ("Direct Paper") which is
deposited and/or maintained in the Direct Paper System of the Custodian
(the "Direct Paper System") pursuant to Section 2.11.
2.2 Delivery of Securities. The Custodian shall release and deliver domestic
securities owned by a Portfolio held by the Custodian or in a U.S.
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only
upon receipt of Proper Instructions from the Fund on behalf of the
applicable Portfolio, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the
Portfolio;
3) In the case of a sale effected through a U.S. Securities System,
in accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that, in any such case, the cash or other consideration is to be
delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name
of the Portfolio or into the name of any nominee or nominees of
the Custodian or into the name or nominee name of any agent
appointed pursuant to Section 2.9 or into the name or nominee
name of any sub-custodian appointed pursuant to Article 1; or for
exchange for a different number of bonds, certificates or other
evidence representing the same
2
<PAGE>
aggregate face amount or number of units; provided that, in any
such case, the new securities are to be delivered to the
Custodian;
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street delivery"
custom; provided that in any such case, the Custodian shall have
no responsibility or liability for any loss arising from the
delivery of such securities prior to receiving payment for such
securities except as may arise from the Custodian's own
negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion contained in such securities, or
pursuant to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that, in
any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
10) For delivery in connection with any loans of securities made by
the Portfolio, but only against receipt of adequate collateral as
agreed upon from time to time by the Custodian and the Fund on
behalf of the Portfolio, which may be in the form of cash or
obligations issued by the United States government, its agencies
or instrumentalities, except that in connection with any loans
for which collateral is to be credited to the Custodian's account
in the book-entry system authorized by the U.S. Department of the
Treasury, the Custodian will not be held liable or responsible
for the delivery of securities owned by the Portfolio prior to
the receipt of such collateral;
11) For delivery as security in connection with any borrowings by the
Fund on behalf of the Portfolio requiring a pledge of assets by
the Fund on behalf of the Portfolio, but only against receipt of
amounts borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Fund on behalf of the Portfolio, the Custodian and a
broker-dealer registered under the Securities Exchange Act of
1934 (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating to
compliance with the rules of The Options Clearing Corporation and
of any registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Portfolio of
the Fund;
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13) For delivery in accordance with the provisions of any agreement
among the Fund on behalf of the Portfolio, the Custodian, and a
Futures Commission Merchant registered under the Commodity
Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any Contract Market,
or any similar organization or organizations, regarding account
deposits in connection with transactions by the Portfolio of the
Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such Transfer Agent or to
the holders of shares in connection with distributions in kind,
as may be described from time to time in the currently effective
prospectus and statement of additional information of the Fund,
related to the Portfolio ("Prospectus"), in satisfaction of
requests by holders of Shares for repurchase or redemption; and
15) For any other proper corporate purpose, but only upon receipt of,
in addition to Proper Instructions from the Fund on behalf of the
applicable Portfolio, a certified copy of a resolution of the
Board of Trustees or of the Executive Committee signed by an
officer of the Fund and certified by the Secretary or an
Assistant Secretary, specifying the securities of the Portfolio
to be delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom
delivery of such securities shall be made.
2.3 Registration of Securities. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, unless the Fund has authorized in
writing the appointment of a nominee to be used in common with other
registered investment companies having the same investment adviser as
the Portfolio, or in the name or nominee name of any agent appointed
pursuant to Section 2.9 or in the name or nominee name of any
sub-custodian appointed pursuant to Article 1. All securities accepted
by the Custodian on behalf of the Portfolio under the terms of this
Contract shall be in "street name" or other good delivery form. If,
however, the Fund directs the Custodian to maintain securities in
"street name", the Custodian shall utilize its best efforts only to
timely collect income due the Fund on such securities and to notify the
Fund on a best efforts basis only of relevant corporate actions
including, without limitation, pendency of calls, maturities, tender or
exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio
of the Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Contract, and shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Portfolio, other than cash maintained by
the Portfolio in a bank account established and used in accordance with
Rule 17f-3 under the Investment Company Act of 1940. Funds held by the
Custodian for a Portfolio may be deposited by it to its credit as
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Custodian in the Banking Department of the Custodian or in such other
banks or trust companies as it may in its discretion deem necessary or
desirable; provided, however, that every such bank or trust company
shall be qualified to act as a custodian under the Investment Company
Act of 1940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall on behalf of each
applicable Portfolio be approved by vote of a majority of the Board of
Trustees of the Fund. Such funds shall be deposited by the Custodian in
its capacity as Custodian and shall be withdrawable by the Custodian
only in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the Fund on
behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Fund on behalf
of a Portfolio, make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for Shares of such
Portfolio which are deposited into the Portfolio's account.
2.6 Collection of Income. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which
each Portfolio shall be entitled either by law or pursuant to custom in
the securities business, and shall collect on a timely basis all income
and other payments with respect to bearer domestic securities if, on the
date of payment by the issuer, such securities are held by the Custodian
or its agent thereof and shall credit such income, as collected, to such
Portfolio's custodian account. Without limiting the generality of the
foregoing, the Custodian shall detach and present for payment all
coupons and other income items requiring presentation as and when they
become due and shall collect interest when due on securities held
hereunder. Income due each Portfolio on securities loaned pursuant to
the provisions of Section 2.2 (10) shall be the responsibility of the
Fund. The Custodian will have no duty or responsibility in connection
therewith, other than to provide the Fund with such information or data
as may be necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the Portfolio is
properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from the
Fund on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall
pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of the
Portfolio but only (a) against the delivery of such securities or
evidence of title to such options, futures contracts or options
on futures contracts to the Custodian (or any bank, banking firm
or trust company doing business in the United States or abroad
which is qualified under the Investment Company Act of 1940, as
amended, to act as a custodian and has been designated by the
Custodian as its agent for this purpose) registered in the name
of the Portfolio or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for transfer;
(b) in the case of a purchase effected through a U.S. Securities
System, in accordance with the conditions set forth in Section
2.10
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hereof; (c) in the case of a purchase involving the Direct
Paper System, in accordance with the conditions set forth in
Section 2.11; (d) in the case of repurchase agreements entered
into between the Fund on behalf of the Portfolio and the
Custodian, or another bank, or a broker-dealer which is a member
of NASD, (i) against delivery of the securities either in
certificate form or through an entry crediting the Custodian's
account at the Federal Reserve Bank with such securities or (ii)
against delivery of the receipt evidencing purchase by the
Portfolio of securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase such
securities from the Portfolio or (e) for transfer to a time
deposit account of the Fund in any bank, whether domestic or
foreign; such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank pursuant to
Proper Instructions from the Fund as defined in Article 5;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued by the
Portfolio as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments
for the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating expenses
of the Fund whether or not such expenses are to be in whole or
part capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares of the Portfolio
declared pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the
Portfolio, a certified copy of a resolution of the Board of
Trustees or of the Executive Committee of the Fund signed by an
officer of the Fund and certified by its Secretary or an
Assistant Secretary, specifying the amount of such payment,
setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and naming the
person or persons to whom such payment is to be made.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the
account of a Portfolio is made by the Custodian in advance of receipt of
the securities purchased in the absence of specific written instructions
from the Fund on behalf of such Portfolio to so pay in advance, the
Custodian shall be absolutely
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liable to the Fund for such securities to the same extent as if the
securities had been received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such
of the provisions of this Article 2 as the Custodian may from time to
time direct; provided, however, that the appointment of any agent shall
not relieve the Custodian of its responsibilities or liabilities
hereunder.
2.10 Deposit of Fund Assets in U.S. Securities Systems. The Custodian may
deposit and/or maintain securities owned by a Portfolio in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by the
U.S. Department of the Treasury and certain federal agencies,
collectively referred to herein as "U.S. Securities System" in
accordance with applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and subject to the
following provisions:
1) The Custodian may keep securities of the Portfolio in a U.S.
Securities System provided that such securities are represented
in an account ("Account") of the Custodian in the U.S. Securities
System which shall not include any assets of the Custodian other
than assets held as a fiduciary, custodian or otherwise for
customers;
2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a U.S. Securities System shall
identify by book-entry those securities belonging to the
Portfolio;
3) The Custodian shall pay for securities purchased for the account
of the Portfolio upon (i) receipt of advice from the U.S.
Securities System that such securities have been transferred to
the Account, and (ii) the making of an entry on the records of
the Custodian to reflect such payment and transfer for the
account of the Portfolio. The Custodian shall transfer securities
sold for the account of the Portfolio upon (i) receipt of advice
from the U.S. Securities System that payment for such securities
has been transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such transfer
and payment for the account of the Portfolio. Copies of all
advices from the U.S. Securities System of transfers of
securities for the account of the Portfolio shall identify the
Portfolio, be maintained for the Portfolio by the Custodian and
be provided to the Fund at its request. Upon request, the
Custodian shall furnish the Fund on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio in the form of a written advice or notice and shall
furnish to the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transactions in the U.S.
Securities System for the account of the Portfolio;
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4) The Custodian shall provide the Fund for the Portfolio with any
report obtained by the Custodian on the U.S. Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the U.S. Securities System;
5) The Custodian shall have received from the Fund on behalf of the
Portfolio the initial or annual certificate, as the case may be,
required by Article 14 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for the benefit of the
Portfolio for any loss or damage to the Portfolio resulting from
use of the U.S. Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its agents
or of any of its or their employees or from failure of the
Custodian or any such agent to enforce effectively such rights as
it may have against the U.S. Securities System; at the election
of the Fund, it shall be entitled to be subrogated to the rights
of the Custodian with respect to any claim against the U.S.
Securities System or any other person which the Custodian may
have as a consequence of any such loss or damage if and to the
extent that the Portfolio has not been made whole for any such
loss or damage.
2.11 Fund Assets Held in the Custodian's Direct Paper System. The Custodian
may deposit and/or maintain securities owned by a Portfolio in the
Direct Paper System of the Custodian subject to the following
provisions:
1) No transaction relating to securities in the Direct Paper System
will be effected in the absence of Proper Instructions from the
Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the Direct
Paper System only if such securities are represented in an
account ("Account") of the Custodian in the Direct Paper System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of the
Portfolio which are maintained in the Direct Paper System shall
identify by book-entry those securities belonging to the
Portfolio;
4) The Custodian shall pay for securities purchased for the account
of the Portfolio upon the making of an entry on the records of
the Custodian to reflect such payment and transfer of securities
to the account of the Portfolio. The Custodian shall transfer
securities sold for the account of the Portfolio upon the making
of an entry on the records of the Custodian to reflect such
transfer and receipt of payment for the account of the Portfolio;
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5) The Custodian shall furnish the Fund on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio, in the form of a written advice or notice, of Direct
Paper on the next business day following such transfer and shall
furnish to the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transaction in the U.S.
Securities System for the account of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the Portfolio
with any report on its system of internal accounting control as
the Fund may reasonably request from time to time.
2.12 Segregated Account. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on
behalf of each such Portfolio, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.10 hereof, (i) in
accordance with the provisions of any agreement among the Fund on behalf
of the Portfolio, the Custodian and a broker-dealer registered under the
Exchange Act and a member of the NASD (or any futures commission
merchant registered under the Commodity Exchange Act), relating to
compliance with the rules of The Options Clearing Corporation and of any
registered national securities exchange (or the Commodity Futures
Trading Commission or any registered contract market), or of any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Portfolio, (ii) for purposes of
segregating cash or government securities in connection with options
purchased, sold or written by the Portfolio or commodity futures
contracts or options thereon purchased or sold by the Portfolio, (iii)
for the purposes of compliance by the Portfolio with the procedures
required by Investment Company Act Release No. 10666, or any subsequent
release or releases of the Securities and Exchange Commission relating
to the maintenance of segregated accounts by registered investment
companies and (iv) for other proper corporate purposes, but only, in the
case of clause (iv), upon receipt of, in addition to Proper Instructions
from the Fund on behalf of the applicable Portfolio, a certified copy of
a resolution of the Board of Trustees or of the Executive Committee
signed by an officer of the Fund and certified by the Secretary or an
Assistant Secretary, setting forth the purpose or purposes of such
segregated account and declaring such purposes to be proper corporate
purposes.
2.13 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to domestic securities of each Portfolio held by
it and in connection with transfers of securities.
2.14 Proxies. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder
of such securities, if the securities are registered otherwise than in
the name of the Portfolio or a nominee of the Portfolio, all proxies,
without indication of the manner in which such proxies are to be voted,
and shall
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promptly deliver to the Portfolio such proxies, all proxy soliciting
materials and all notices relating to such securities.
2.15 Communications Relating to Portfolio Securities. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund for each Portfolio all written information (including, without
limitation, pendency of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of exercise of
call and put options written by the Fund on behalf of the Portfolio and
the maturity of futures contracts purchased or sold by the Portfolio)
received by the Custodian from issuers of the securities being held for
the Portfolio. With respect to tender or exchange offers, the Custodian
shall transmit promptly to the Portfolio all written information
received by the Custodian from issuers of the securities whose tender or
exchange is sought and from the party (or his agents) making the tender
or exchange offer. If the Portfolio desires to take action with respect
to any tender offer, exchange offer or any other similar transaction,
the Portfolio shall notify the Custodian at least three business days
prior to the date on which the Custodian is to take such action.
3. Duties of the Custodian with Respect to Property of the Fund Held
Outside of the United States
3.1 Appointment of Foreign Sub-Custodians. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for the Portfolio's
securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories
designated on Schedule A hereto ("foreign sub-custodians"). Upon receipt
of "Proper Instructions", as defined in Section 5 of this Contract,
together with a certified resolution of the Fund's Board of Trustees,
the Custodian and the Fund may agree to amend Schedule A hereto from
time to time to designate additional foreign banking institutions and
foreign securities depositories to act as sub-custodian. Upon receipt of
Proper Instructions, the Fund may instruct the Custodian to cease the
employment of any one or more such sub-custodians for maintaining
custody of the Portfolio's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in paragraph (c)(1) of Rule 17f-5 under
the Investment Company Act of 1940, and (b) cash and cash equivalents in
such amounts as the Custodian or the Fund may determine to be reasonably
necessary to effect the Portfolio's foreign securities transactions. The
Custodian shall identify on its books as belonging to the Fund, the
foreign securities of the Fund held by each foreign sub-custodian.
3.3 Foreign Securities Systems. Except as may otherwise be agreed upon in
writing by the Custodian and the Fund, assets of the Portfolios shall be
maintained in a clearing agency which acts as a securities depository or
in a book-entry system for the central handling of securities located
outside the United States (each a "Foreign Securities System") only
through arrangements implemented by the foreign banking institutions
serving as
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sub-custodians pursuant to the terms hereof (Foreign Securities Systems
and U.S. Securities Systems are collectively referred to herein as the
"Securities Systems"). Where possible, such arrangements shall include
entry into agreements containing the provisions set forth in Section
3.5 hereof.
3.4 Holding Securities. The Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i)
the records of the Custodian with respect to securities and other
non-cash property of the Fund which are maintained in such account shall
identify by book-entry those securities and other non-cash property
belonging to the Fund and (ii) the Custodian shall require that
securities and other non-cash property so held by the foreign
sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.
3.5 Agreements with Foreign Banking Institutions. Each agreement with a
foreign banking institution shall provide that: (a) the assets of each
Portfolio will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign banking institution or
its creditors or agent, except a claim of payment for their safe custody
or administration; (b) beneficial ownership for the assets of each
Portfolio will be freely transferable without the payment of money or
value other than for custody or administration; (c) adequate records
will be maintained identifying the assets as belonging to each
applicable Portfolio; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent permitted
under applicable law the independent public accountants for the Fund,
will be given access to the books and records of the foreign banking
institution relating to its actions under its agreement with the
Custodian; and (e) assets of the Portfolios held by the foreign
sub-custodian will be subject only to the instructions of the Custodian
or its agents.
3.6 Access of Independent Accountants of the Fund. Upon request of the Fund,
the Custodian will use its best efforts to arrange for the independent
accountants of the Fund to be afforded access to the books and records
of any foreign banking institution employed as a foreign sub-custodian
insofar as such books and records relate to the performance of such
foreign banking institution under its agreement with the Custodian.
3.7 Reports by Custodian. The Custodian will supply to the Fund from time to
time, as mutually agreed upon, statements in respect of the securities
and other assets of the Portfolio(s) held by foreign sub-custodians,
including but not limited to an identification of entities having
possession of the Portfolio(s) securities and other assets and advices
or notifications of any transfers of securities to or from each
custodial account maintained by a foreign banking institution for the
Custodian on behalf of each applicable Portfolio indicating, as to
securities acquired for a Portfolio, the identity of the entity having
physical possession of such securities.
3.8 Transactions in Foreign Custody Account. (a) Except as otherwise
provided in paragraph (b) of this Section 3.8, the provision of Sections
2.2 and 2.7 of this Contract shall apply,
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mutatis mutandis to the foreign securities of the Fund held outside the
United States by foreign sub-custodians.
(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the
account of each applicable Portfolio may be effected in accordance with
the customary established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering securities
to the purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of receiving
later payment for such securities from such purchaser or dealer.
(c) Securities maintained in the custody of a foreign sub-custodian may
be maintained in the name of such entity's nominee to the same extent as
set forth in Section 2.3 of this Contract, and the Fund agrees to hold
any such nominee harmless from any liability as a holder of record of
such securities.
3.9 Liability of Foreign Sub-Custodians. Each agreement pursuant to which
the Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold harmless,
the Custodian and the Fund from and against any loss, damage, cost,
expense, liability or claim arising out of or in connection with the
institution's performance of such obligations. At the election of the
Fund, it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claims against a foreign banking
institution as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Fund has not been made
whole for any such loss, damage, cost, expense, liability or claim.
3.10 Liability of Custodian. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a
U.S. bank as contemplated by paragraph 3.13 hereof, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim
resulting from nationalization, expropriation, currency restrictions, or
acts of war or terrorism or any loss where the sub-custodian has
otherwise exercised reasonable care. Notwithstanding the foregoing
provisions of this paragraph 3.10, in delegating custody duties to State
Street London Ltd., the Custodian shall not be relieved of any
responsibility to the Fund for any loss due to such delegation, except
such loss as may result from (a) political risk (including, but not
limited to, exchange control restrictions, confiscation, expropriation,
nationalization, insurrection, civil strife or armed hostilities) or (b)
other losses (excluding a bankruptcy or insolvency of State Street
London Ltd. not caused by political risk) due to Acts of God, nuclear
incident or other losses under circumstances where the Custodian and
State Street London Ltd. have exercised reasonable care.
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3.11 Reimbursement for Advances. If the Fund requires the Custodian to
advance cash or securities for any purpose for the benefit of a
Portfolio including the purchase or sale of foreign exchange or of
contracts for foreign exchange, or in the event that the Custodian or
its nominee shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of
this Contract, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any
property at any time held for the account of the applicable Portfolio
shall be security therefor and should the Fund fail to repay the
Custodian promptly, the Custodian shall be entitled to utilize available
cash and to dispose of such Portfolio's assets to the extent necessary
to obtain reimbursement.
3.12 Monitoring Responsibilities. The Custodian shall furnish annually to the
Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection
with the initial approval of this Contract. In addition, the Custodian
will promptly inform the Fund in the event that the Custodian learns of
a material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or in the
case of any foreign sub-custodian not the subject of an exemptive order
from the Securities and Exchange Commission is notified by such foreign
sub-custodian that there appears to be a substantial likelihood that its
shareholders' equity will decline below $200 million (U.S. dollars or
the equivalent thereof) or that its shareholders' equity has declined
below $200 million (in each case computed in accordance with generally
accepted U.S. accounting principles).
3.13 Branches of U.S. Banks. (a) Except as otherwise set forth in this
Contract, the provisions hereof shall not apply where the custody of the
Portfolios assets are maintained in a foreign branch of a banking
institution which is a "bank" as defined by Section 2(a)(5) of the
Investment Company Act of 1940 meeting the qualification set forth in
Section 26(a) of said Act. The appointment of any such branch as a
sub-custodian shall be governed by paragraph 1 of this Contract.
(b) Cash held for each Portfolio of the Fund in the United Kingdom shall
be maintained in an interest bearing account established for the Fund
with the Custodian's London branch, which account shall be subject to
the direction of the Custodian, State Street London Ltd. or both.
3.14 Tax Law. The Custodian shall have no responsibility or liability for any
obligations now or hereafter imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of the United States of America or
any state or political subdivision thereof. It shall be the
responsibility of the Fund to notify the Custodian of the obligations
imposed on the Fund or the Custodian as custodian of the Fund by the tax
law of jurisdictions other than those mentioned in the above sentence,
including responsibility for withholding and other taxes, assessments or
other governmental charges, certifications and governmental reporting.
The sole responsibility of the Custodian with regard to such tax law
shall be to use reasonable
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efforts to assist the Fund with respect to any claim for exemption or
refund under the tax law of jurisdictions for which the Fund has
provided such information.
4. Payments for Sales or Repurchases or Redemptions of Shares of the Fund
The Custodian shall receive from the distributor for the Shares or from
the Transfer Agent of the Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that Portfolio issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund on behalf of each such Portfolio and the Transfer Agent
of any receipt by it of payments for Shares of such Portfolio.
From such funds as may be available for the purpose but subject to the
limitations of the Declaration of Trust and any applicable votes of the Board of
Trustees of the Fund pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for payment to
holders of Shares who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares. In connection with the redemption or
repurchase of Shares of a Portfolio, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares of the Fund, the Custodian shall honor checks drawn on
the Custodian by a holder of Shares, which checks have been furnished by the
Fund to the holder of Shares, when presented to the Custodian in accordance with
such procedures and controls as are mutually agreed upon from time to time
between the Fund and the Custodian.
5. Proper Instructions
Proper Instructions as used throughout this Contract means a writing
signed or initialled by one or more person or persons as the Board of Trustees
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if the Custodian reasonably believes them
to have been given by a person authorized to give such instructions with respect
to the transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing. Upon receipt of a certificate of the Secretary or an
Assistant Secretary as to the authorization by the Board of Trustees of the Fund
accompanied by a detailed description of procedures approved by the Board of
Trustees, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Trustees and the Custodian are satisfied that such procedures afford adequate
safeguards for the Portfolios' assets. For purposes of this Section, Proper
Instructions shall include instructions received by the Custodian pursuant to
any three - party agreement which requires a segregated asset account in
accordance with Section 2.12.
6. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:
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1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this Contract, provided that all such payments shall be accounted
for to the Fund on behalf of the Portfolio;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Portfolio, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and
other dealings with the securities and property of the Portfolio
except as otherwise directed by the Board of Trustees of the
Fund.
7. Evidence of Authority
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed by or on behalf of the Fund.
The Custodian may receive and accept a certified copy of a vote of the Board of
Trustees of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Trustees pursuant to the Declaration of Trust as described in
such vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
8. Duties of Custodian with Respect to the Books of Account and Calculation
of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Trustees of the Fund to keep
the books of account of each Portfolio and/or compute the net asset value per
share of the outstanding shares of each Portfolio or, if directed in writing to
do so by the Fund on behalf of the Portfolio, shall itself keep such books of
account and/or compute such net asset value per share. If so directed, the
Custodian shall also calculate daily the net income of the Portfolio as
described in the Fund's currently effective prospectus related to such Portfolio
and shall advise the Fund and the Transfer Agent daily of the total amounts of
such net income and, if instructed in writing by an officer of the Fund to do
so, shall advise the Transfer Agent periodically of the division of such net
income among its various components. The calculations of the net asset value per
share and the daily income of each Portfolio shall be made at the time or times
described from time to time in the Fund's currently effective prospectus related
to such Portfolio.
9. Records
The Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Contract in
such manner as will meet the obligations of the Fund under the Investment
Company Act of 1940, with particular attention to Section 31 thereof
15
<PAGE>
and Rules 31a-1 and 31a-2 thereunder. All such records shall be the property of
the Fund and shall at all times during the regular business hours of the
Custodian be open for inspection by duly authorized officers, employees or
agents of the Fund and employees and agents of the Securities and Exchange
Commission. The Custodian shall, at the Fund's request, supply the Fund with a
tabulation of securities owned by each Portfolio and held by the Custodian and
shall, when requested to do so by the Fund and for such compensation as shall be
agreed upon between the Fund and the Custodian, include certificate numbers in
such tabulations.
10. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund on behalf of
each applicable Portfolio may from time to time request, to obtain from year to
year favorable opinions from the Fund's independent accountants with respect to
its activities hereunder in connection with the preparation of the Fund's Form
N-1A, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
11. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, on behalf of each of the
Portfolios at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited and/or maintained
in a Securities System, relating to the services provided by the Custodian under
this Contract; such reports, shall be of sufficient scope and in sufficient
detail, as may reasonably be required by the Fund to provide reasonable
assurance that any material inadequacies would be disclosed by such examination,
and, if there are no such inadequacies, the reports shall so state.
12. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund on behalf of each applicable Portfolio and the Custodian.
13. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel
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<PAGE>
(who may be counsel for the Fund) on all matters, and shall be without liability
for any action reasonably taken or omitted pursuant to such advice.
Except as may arise from the Custodian's own negligence or willful
misconduct or the negligence or willful misconduct of a sub-custodian or agent,
the Custodian shall be without liability to the Fund for any loss, liability,
claim or expense resulting from or caused by; (i) events or circumstances beyond
the reasonable control of the Custodian or any sub-custodian or Securities
System or any agent or nominee of any of the foregoing, including, without
limitation, nationalization or expropriation, imposition of currency controls or
restrictions, the interruption, suspension or restriction of trading on or the
closure of any securities market, power or other mechanical or technological
failures or interruptions, computer viruses or communications disruptions, acts
of war or terrorism, riots, revolutions, work stoppages, natural disasters or
other similar events or acts; (ii) errors by the Fund or the Investment Advisor
in their instructions to the Custodian provided such instructions have been in
accordance with this Contract; (iii) the insolvency of or acts or omissions by a
Securities System; (iv) any delay or failure of any broker, agent or
intermediary, central bank or other commercially prevalent payment or clearing
system to deliver to the Custodian's sub-custodian or agent securities purchased
or in the remittance or payment made in connection with securities sold; (v) any
delay or failure of any company, corporation, or other body in charge or
registering or transferring securities in the name of the Custodian, the Fund,
the Custodian's sub-custodians, nominees or agents or any consequential losses
arising out of such delay or failure to transfer such securities including
non-receipt of bonus, dividends and rights and other accretions or benefits;
(vi) delays or inability to perform its duties due to any disorder in market
infrastructure with respect to any particular security or Securities System; and
(vii) any provision of any present or future law or regulation or order of the
United States of America, or any state thereof, or any other country, or
political subdivision thereof or of any court of competent jurisdiction.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
sub-custodians generally in this Contract.
If the Fund on behalf of the Portfolio requires the Custodian to take
any action with respect to securities, which action involves the payment of
money or which action may, in the opinion of the Custodian, result in the
Custodian or its nominee assigned to the Fund or the Portfolio being liable for
the payment of money or incurring liability of some other form, the Fund on
behalf of the Portfolio, as a prerequisite to requiring the Custodian to take
such action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not limited
to securities settlements, foreign exchange contracts and assumed settlement) or
in the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the applicable Portfolio shall
be security therefor and should the Fund fail to repay the Custodian
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<PAGE>
promptly, the Custodian shall be entitled to utilize available cash and to
dispose of such Portfolio's assets to the extent necessary to obtain
reimbursement.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
14. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; provided,
however that the Custodian shall not with respect to a Portfolio act under
Section 2.10 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees of the Fund has
approved the initial use of a particular Securities System by such Portfolio, as
required by Rule 17f-4 under the Investment Company Act of 1940, as amended and
that the Custodian shall not with respect to a Portfolio act under Section 2.11
hereof in the absence of receipt of an initial certificate of the Secretary or
an Assistant Secretary that the Board of Trustees has approved the initial use
of the Direct Paper System by such Portfolio ; provided further, however, that
the Fund shall not amend or terminate this Contract in contravention of any
applicable federal or state regulations, or any provision of the Declaration of
Trust, and further provided, that the Fund on behalf of one or more of the
Portfolios may at any time by action of its Board of Trustees (i) substitute
another bank or trust company for the Custodian by giving notice as described
above to the Custodian, or (ii) immediately terminate this Contract in the event
of the appointment of a conservator or receiver for the Custodian by the
Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
15. Successor Custodian
If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Trustees of the Fund, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in
a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
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<PAGE>
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian on behalf of each applicable Portfolio and all
instruments held by the Custodian relative thereto and all other property held
by it under this Contract on behalf of each applicable Portfolio and to transfer
to an account of such successor custodian all of the securities of each such
Portfolio held in any Securities System. Thereafter, such bank or trust company
shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
16. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and the
Fund on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Declaration of Trust of the Fund. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Contract.
17. Additional Funds
In the event that the Fund establishes one or more series of Shares in
addition to Phoenix Duff & Phelps Institutional Enhanced Reserves Portfolio with
respect to which it desires to have the Custodian render services as custodian
under the terms hereof, it shall so notify the Custodian in writing, and if the
Custodian agrees in writing to provide such services, such series of Shares
shall become a Portfolio hereunder.
18. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
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19. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of the Fund's assets.
20. Shareholder Communications Election
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund tells the Custodian "no",
the Custodian will not provide this information to requesting companies. If the
Fund tells the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Fund as consenting to disclosure
of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using the Fund's name and address for any purpose
other than corporate communications. Please indicate below whether the Fund
consents or objects by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's name, address,
and share positions.
NO [ ] The Custodian is not authorized to release the Fund's name,
address, and share positions.
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IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the day of , 199 .
ATTEST PHOENIX DUFF & PHELPS INSTITUTIONAL
MUTUAL FUNDS
______________________ By ________________________________
ATTEST STATE STREET BANK AND TRUST COMPANY
______________________ By ________________________________
Executive Vice President
<PAGE>
Schedule A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Trustees of Phoenix Duff &
Phelps Institutional Mutual Funds for use as sub-custodians for the Fund's
securities and other assets:
(Insert banks and securities depositories)
Certified:
_________________________
Fund's Authorized Officer
Date: ___________________
<PAGE>
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
AGREEMENT between Phoenix Duff & Phelps Institutional Mutual Funds (the
"Customer") and State Street Bank and Trust Company ("State Street").
PREAMBLE
WHEREAS, State Street has been appointed as custodian of certain assets
of the Customer pursuant to a certain Custodian Agreement (the "Custodian
Agreement") dated as of , 199 ;
WHEREAS, State Street has developed and utilizes proprietary accounting
and other systems, including State Street's proprietary Multicurrency HORIZONR
Accounting System, in its role as custodian of the Customer, and maintains
certain Customer-related data ("Customer Data") in databases under the control
and ownership of State Street (the "Data Access Services"); and
WHEREAS, State Street makes available to the Customer certain Data
Access Services solely for the benefit of the Customer, and intends to provide
additional services, consistent with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:
1. SYSTEM AND DATA ACCESS SERVICES
a. System. Subject to the terms and conditions of this Agreement, State
Street hereby agrees to provide the Customer with access to State Street's
Multicurrency HORIZONR Accounting System and the other information systems
(collectively, the "System") as described in Attachment A, on a remote basis for
the purpose of obtaining reports, solely on computer hardware, system software
and telecommunication links, as listed in Attachment B (the "Designated
Configuration") of the Customer, or certain third parties approved by State
Street that serve as investment advisors or investment managers of the Customer
(the "Investment Advisor") and solely with respect to the Customer or on any
designated substitute or back-up equipment configuration with State Street's
written consent, such consent not to be unreasonably withheld.
b. Data Access Services. State Street agrees to make available to the
Customer the Data Access Services subject to the terms and conditions of this
Agreement and data access operating standards and procedures as may be issued by
State Street from time to time. The ability of the Customer to originate
electronic instructions to State Street on behalf of the Customer in order to
(i) effect the transfer or movement of cash or securities held under custody
<PAGE>
by State Street or (ii) transmit accounting or other information (such
transactions are referred to herein as "Client Originated Electronic Financial
Instructions"), and (iii) access data for the purpose of reporting and analysis,
shall be deemed to be Data Access Services for purposes of this Agreement.
c. Additional Services. State Street may from time to time agree to make
available to the Customer additional Systems that are not described in the
attachments to this Agreement. In the absence of any other written agreement
concerning such additional systems, the term "System" shall include, and this
Agreement shall govern, the Customer's access to and use of any additional
System made available by State Street and/or accessed by the Customer.
2. NO USE OF THIRD PARTY SOFTWARE
State Street and the Customer acknowledge that in connection with the
Data Access Services provided under this Agreement, the Customer will have
access, through the Data Access Services, to Customer Data and to functions of
State Street's proprietary systems; provided, however that in no event will the
Customer have direct access to any third party systems-level software that
retrieves data for, stores data from, or otherwise supports the System.
3. LIMITATION ON SCOPE OF USE
a. Designated Equipment; Designated Location. The System and the Data
Access Services shall be used and accessed solely on and through the Designated
Configuration at the offices of the Customer or the Investment Advisor located
in Hartford, Connecticut ("Designated Location").
b. Designated Configuration; Trained Personnel. State Street shall be
responsible for supplying, installing and maintaining the Designated
Configuration at the Designated Location. State Street and the Customer agree
that each will engage or retain the services of trained personnel to enable both
parties to perform their respective obligations under this Agreement. State
Street agrees to use commercially reasonable efforts to maintain the System so
that it remains serviceable, provided, however, that State Street does not
guarantee or assure uninterrupted remote access use of the System.
c. Scope of Use. The Customer will use the System and the Data Access
Services only for the processing of securities transactions, the keeping of
books of account for the Customer and accessing data for purposes of reporting
and analysis. The Customer shall not, and shall cause its employees and agents
not to (i) permit any third party to use the System or the Data Access Services,
(ii) sell, rent, license or otherwise use the System or the Data Access Services
in the operation of a service bureau or for any purpose other than as expressly
authorized under this Agreement, (iii) use the System or the Data Access
Services for any fund, trust or other investment vehicle without the prior
written consent of State Street, (iv) allow access to the System or the Data
Access Services through terminals or any other computer or telecommunications
facilities located outside the Designated Locations, (v) allow or cause any
information (other than portfolio holdings, valuations of portfolio holdings,
and other
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information reasonably necessary for the management or distribution of the
assets of the Customer) transmitted from State Street's databases, including
data from third party sources, available through use of the System or the Data
Access Services to be redistributed or retransmitted to another computer,
terminal or other device for other than use for or on behalf of the Customer or
(vi) modify the System in any way, including without limitation, developing any
software for or attaching any devices or computer programs to any equipment,
system, software or database which forms a part of or is resident on the
Designated Configuration.
d. Other Locations. Except in the event of an emergency or of a planned
System shutdown, the Customer's access to services performed by the System or to
Data Access Services at the Designated Location may be transferred to a
different location only upon the prior written consent of State Street. In the
event of an emergency or System shutdown, the Customer may use any back-up site
included in the Designated Configuration or any other back-up site agreed to by
State Street, which agreement will not be unreasonably withheld. The Customer
may secure from State Street the right to access the System or the Data Access
Services through computer and telecommunications facilities or devices complying
with the Designated Configuration at additional locations only upon the prior
written consent of State Street and on terms to be mutually agreed upon by the
parties.
e. Title. Title and all ownership and proprietary rights to the System,
including any enhancements or modifications thereto, whether or not made by
State Street, are and shall remain with State Street.
f. No Modification. Without the prior written consent of State Street,
the Customer shall not modify, enhance or otherwise create derivative works
based upon the System, nor shall the Customer reverse engineer, decompile or
otherwise attempt to secure the source code for all or any part of the System.
g. Security Procedures. The Customer shall comply with data access
operating standards and procedures and with user identification or other
password control requirements and other security procedures as may be issued
from time to time by State Street for use of the System on a remote basis and to
access the Data Access Services. The Customer shall have access only to the
Customer Data and authorized transactions agreed upon from time to time by State
Street and, upon notice from State Street, the Customer shall discontinue remote
use of the System and access to Data Access Services for any security reasons
cited by State Street; provided, that, in such event, State Street shall, for a
period not less than 180 days (or such other shorter period specified by the
Customer) after such discontinuance, assume responsibility to provide accounting
services under the terms of the Custodian Agreement.
h. Inspections. State Street shall have the right to inspect the use of
the System and the Data Access Services by the Customer and the Investment
Advisor to ensure compliance with this Agreement. The on-site inspections shall
be upon prior written notice to Customer and the Investment Advisor and at
reasonably convenient times and frequencies so as not to result in an
unreasonable disruption of the Customer's or the Investment Advisor's business.
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<PAGE>
4. PROPRIETARY INFORMATION
a. Proprietary Information. The Customer acknowledges and State Street
represents that the System and the databases, computer programs, screen formats,
report formats, interactive design techniques, documentation and other
information made available to the Customer by State Street as part of the Data
Access Services and through the use of the System constitute copyrighted, trade
secret, or other proprietary information of substantial value to State Street.
Any and all such information provided by State Street to the Customer shall be
deemed proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Customer agrees that it will hold such
Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with its
employees who are permitted access to the Proprietary Information to satisfy its
obligations hereunder. The Customer further acknowledges that State Street shall
not be required to provide the Investment Advisor with access to the System
unless it has first received from the Investment Advisor an undertaking with
respect to State Street's Proprietary Information in the form of Attachment C to
this Agreement. The Customer shall use all commercially reasonable efforts to
assist State Street in identifying and preventing any unauthorized use, copying
or disclosure of the Proprietary Information or any portions thereof or any of
the logic, formats or designs contained therein.
b. Cooperation. Without limitation of the foregoing, the Customer shall
advise State Street immediately in the event the Customer learns or has reason
to believe that any person to whom the Customer has given access to the
Proprietary Information, or any portion thereof, has violated or intends to
violate the terms of this Agreement, and the Customer will, at its expense,
co-operate with State Street in seeking injunctive or other equitable relief in
the name of the Customer or State Street against any such person.
c. Injunctive Relief. The Customer acknowledges that the disclosure of
any Proprietary Information, or of any information which at law or equity ought
to remain confidential, will immediately give rise to continuing irreparable
injury to State Street inadequately compensable in damages at law. In addition,
State Street shall be entitled to obtain immediate injunctive relief against the
breach or threatened breach of any of the foregoing undertakings, in addition to
any other legal remedies which may be available.
d. Survival. The provisions of this Section 4 shall survive the
termination of this Agreement.
5. LIMITATION ON LIABILITY
a. Limitation on Amount and Time for Bringing Action. The Customer
agrees any liability of State Street to the Customer or any third party arising
out of State Street's provision of Data Access Services or the System under this
Agreement shall be limited to the amount paid by the Customer for the preceding
24 months for such services. In no event shall State Street be liable to the
Customer or any other party for any special, indirect, punitive or consequential
damages even if advised of the possibility of such damages. No action,
regardless of form,
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<PAGE>
arising out of this Agreement may be brought by the Customer more than two years
after the Customer has knowledge that the cause of action has arisen.
b. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE MADE BY STATE STREET. IN NO EVENT WILL STATE STREET BE
LIABLE TO THE CUSTOMER OR ANY OTHER PARTY FOR ANY CONSEQUENTIAL OR INCIDENTAL
DAMAGES WHICH MAY ARISE FROM THE CUSTOMER'S ACCESS TO THE SYSTEM OR USE OF
INFORMATION OBTAINED THEREBY.
c. Third-Party Data. Organizations from which State Street may obtain
certain data included in the System or the Data Access Services are solely
responsible for the contents of such data, and State Street shall have no
liability for claims arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.
d. Regulatory Requirements. As between State Street and the Customer,
the Customer shall be solely responsible for the accuracy of any accounting
statements or reports produced using the Data Access Services and the System and
the conformity thereof with any requirements of law.
e. Force Majeure. Neither party shall be liable for any costs or damages
due to delay or nonperformance under this Agreement arising out of any cause or
event beyond such party's control, including without limitation, cessation of
services hereunder or any damages resulting therefrom to the other party, or the
Customer as a result of work stoppage, power or other mechanical failure,
computer virus, natural disaster, governmental action, or communication
disruption.
6. INDEMNIFICATION
The Customer agrees to indemnify and hold State Street harmless from any
loss, damage or expense including reasonable attorney's fees, (a "loss")
suffered by State Street arising from (i) the negligence or willful misconduct
in the use by the Customer of the Data Access Services or the System, including
any loss incurred by State Street resulting from a security breach at the
Designated Location or committed by the Customer's employees or agents of the
Customers and (ii) any loss resulting from incorrect Client Originated
Electronic Financial Instructions. State Street shall be entitled to rely on the
validity and authenticity of Client Originated Electronic Financial Instructions
without undertaking any further inquiry as long as such instruction is
undertaken in conformity with security procedures established by State Street
from time to time.
7. FEES
Fees and charges for the use of the System and the Data Access Services
and related payment terms shall be as set forth in the Custody Fee Schedule in
effect from time to time between the parties (the "Fee Schedule"). Any tariffs,
duties or taxes imposed or levied by any
5
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government or governmental agency by reason of the transactions contemplated by
this Agreement, including, without limitation, federal, state and local taxes,
use, value added and personal property taxes (other than income, franchise or
similar taxes which may be imposed or assessed against State Street) shall be
borne by the Customer. Any claimed exemption from such tariffs, duties or taxes
shall be supported by proper documentary evidence delivered to State Street.
8. TRAINING, IMPLEMENTATION AND CONVERSION
a. Training. State Street agrees to provide training, at a designated
State Street training facility or at the Designated Location, to the Customer's
personnel in connection with the use of the System on the Designated
Configuration. The Customer agrees that it will set aside, during regular
business hours or at other times agreed upon by both parties, sufficient time to
enable all operators of the System and the Data Access Services, designated by
the Customer, to receive the training offered by State Street pursuant to this
Agreement.
b. Installation and Conversion. State Street shall be responsible for
the technical installation and conversion ("Installation and Conversion") of the
Designated Configuration. The Customer shall have the following responsibilities
in connection with Installation and Conversion of the System:
(i) The Customer shall be solely responsible for the timely
acquisition and maintenance of the hardware and software that
attach to the Designated Configuration in order to use the Data
Access Services at the Designated Location.
(ii) State Street and the Customer each agree that they will assign
qualified personnel to actively participate during the
Installation and Conversion phase of the System implementation to
enable both parties to perform their respective obligations under
this Agreement.
9. SUPPORT
During the term of this Agreement, State Street agrees to provide the
support services set out in Attachment D to this Agreement.
10. TERM OF AGREEMENT
a. Term of Agreement. This Agreement shall become effective on the date
of its execution by State Street and shall remain in full force and effect until
terminated as herein provided.
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b. Termination of Agreement. Either party may terminate this Agreement
(i) for any reason by giving the other party at least one-hundred and eighty
days' prior written notice in the case of notice of termination by State Street
to the Customer or thirty days' notice in the case of notice from the Customer
to State Street of termination; or (ii) immediately for failure of the other
party to comply with any material term and condition of the Agreement by giving
the other party written notice of termination. In the event the Customer shall
cease doing business, shall become subject to proceedings under the bankruptcy
laws (other than a petition for reorganization or similar proceeding) or shall
be adjudicated bankrupt, this Agreement and the rights granted hereunder shall,
at the option of State Street, immediately terminate with notice to the
Customer. This Agreement shall in any event terminate as to any Customer within
90 days after the termination of the Custodian Agreement applicable to such
Customer.
c. Termination of the Right to Use. Upon termination of this Agreement
for any reason, any right to use the System and access to the Data Access
Services shall terminate and the Customer shall immediately cease use of the
System and the Data Access Services. Immediately upon termination of this
Agreement for any reason, the Customer shall return to State Street all copies
of documentation and other Proprietary Information in its possession; provided,
however, that in the event that either party terminates this Agreement or the
Custodian Agreement for any reason other than the Customer's breach, State
Street shall provide the Data Access Services for a period of time and at a
price to be agreed upon by the parties.
11. MISCELLANEOUS
a. Assignment; Successors. This Agreement and the rights and obligations
of the Customer and State Street hereunder shall not be assigned by either party
without the prior written consent of the other party, except that State Street
may assign this Agreement to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by, or under common control with
State Street.
b. Survival. All provisions regarding indemnification, warranty,
liability and limits thereon, and confidentiality and/or protection of
proprietary rights and trade secrets shall survive the termination of this
Agreement.
c. Entire Agreement. This Agreement and the attachments hereto
constitute the entire understanding of the parties hereto with respect to the
Data Access Services and the use of the System and supersedes any and all prior
or contemporaneous representations or agreements, whether oral or written,
between the parties as such may relate to the Data Access Services or the
System, and cannot be modified or altered except in a writing duly executed by
the parties. This Agreement is not intended to supersede or modify the duties
and liabilities of the parties hereto under the Custodian Agreement or any other
agreement between the parties hereto except to the extent that any such
agreement specifically refers to the Data Access Services or the System. No
single waiver or any right hereunder shall be deemed to be a continuing waiver.
d. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
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e. Governing Law.This Agreement shall be interpreted and construed in
accordance with the internal laws of The Commonwealth of Massachusetts without
regard to the conflict of laws provisions thereof.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement effective as of the date hereof.
STATE STREET BANK AND TRUST
COMPANY
By: ____________________________
Title: ____________________________
Date: ____________________________
PHOENIX DUFF & PHELPS INSTITUTIONAL
MUTUAL FUNDS
By: ____________________________
Title: ____________________________
Date: ____________________________
<PAGE>
ATTACHMENT A
Multicurrency HORIZON(R) Accounting System
System Product Description
I. The Multicurrency HORIZON(R) Accounting System is designed to provide
lot level portfolio and general ledger accounting for SEC and ERISA type
requirements and includes the following services: 1) recording of general ledger
entries; 2) calculation of daily income and expense; 3) reconciliation of daily
activity with the trial balance, and 4) appropriate automated feeding mechanisms
to (i) domestic and international settlement systems, (ii) daily, weekly and
monthly evaluation services, (iii) portfolio performance and analytic services,
(iv) customer's internal computing systems and (v) various State Street provided
information services products.
II. GlobalQuest(R) GlobalQuest(R) is designed to provide customer access to
the following information maintained on The Multicurrency HORIZON(R) Accounting
System: 1) cash transactions and balances; 2) purchases and sales; 3) income
receivables; 4) tax refund; 5) daily priced positions; 6) open trades; 7)
settlement status; 8) foreign exchange transactions; 9) trade history; and 10)
daily, weekly and monthly evaluation services.
<PAGE>
ATTACHMENT B
Designated Configuration
<PAGE>
ATTACHMENT C
Undertaking
The undersigned understands that in the course of its employment as
Investment Advisor to Phoenix Duff & Phelps Institutional Mutual Funds (the
"Customer") it will have access to State Street Bank and Trust Company's ("State
Street") Multicurrency HORIZON Accounting System and other information systems
(collectively, the "System").
The undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation, and other information made available to the Undersigned by State
Street as part of the Data Access Services provided to the Customer and through
the use of the System constitute copyrighted, trade secret, or other proprietary
information of substantial value to State Street. Any and all such information
provided by State Street to the Undersigned shall be deemed proprietary and
confidential information of State Street (hereinafter "Proprietary
Information"). The Undersigned agrees that it will hold such Proprietary
Information in confidence and secure and protect it in a manner consistent with
its own procedures for the protection of its own confidential information and to
take appropriate action by instruction or agreement with its employees who are
permitted access to the Proprietary Information to satisfy its obligations
hereunder.
The Undersigned will not attempt to intercept data, gain access to data
in transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System
and access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the Undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
[The Undersigned]
By: ________________________
Title: _____________________
Date: ______________________
<PAGE>
ATTACHMENT D
Support
During the term of this Agreement, State Street agrees to provide the
following on-going support services:
a. Telephone Support. The Customer Designated Persons may contact State
Street's HORIZON(R) Help Desk and Customer Assistance Center between the hours
of 8 a.m. and 6 p.m. (Eastern time) on all business days for the purpose of
obtaining answers to questions about the use of the System, or to report
apparent problems with the System. From time to time, the Customer shall provide
to State Street a list of persons, not to exceed five in number, who shall be
permitted to contact State Street for assistance (such persons being referred to
as "the Customer Designated Persons").
b. Technical Support. State Street will provide technical support to
assist the Customer in using the System and the Data Access Services. The total
amount of technical support provided by State Street shall not exceed 10
resource days per year. State Street shall provide such additional technical
support as is expressly set forth in the fee schedule in effect from time to
time between the parties (the "Fee Schedule"). Technical support, including
during installation and testing, is subject to the fees and other terms set
forth in the Fee Schedule.
c. Maintenance Support. State Street shall use commercially reasonable
efforts to correct system functions that do not work according to the System
Product Description as set forth on Attachment A in priority order in the next
scheduled delivery release or otherwise as soon as is practicable.
d. System Enhancements. State Street will provide to the Customer any
enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such enhancement,
State Street shall notify the Customer and shall offer the Customer reasonable
training on the enhancement. Charges for system enhancements shall be as
provided in the Fee Schedule. State Street retains the right to charge for
related systems or products that may be developed and separately made available
for use other than through the System.
e. Custom Modifications. In the event the Customer desires custom
modifications in connection with its use of the System, the Customer shall make
a written request to State Street providing specifications for the desired
modification. Any custom modifications may be undertaken by State Street in its
sole discretion in accordance with the Fee Schedule.
f. Limitation on Support. State Street shall have no obligation to
support the Customer's use of the System: (1) for use on any computer equipment
or telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Customer has modified the System in
breach of this Agreement.
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Pre-Effective Amendment
No. 1 to the Registration Statement No. 33-80057 on Form N-14 of our report
dated January 19, 1996 of Duff & Phelps Mutual Funds appearing in the Statement
of Additional Information, which is a part of such Registration Statement.
[Signature of Deloitte & Touche LLP]
DELOITTE & TOUCHE LLP
May 28, 1996
