As filed with the Securities and Exchange Commission on October 24, 1997
Registration Nos. 2-16590
811-945
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT
Under the
SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 63 [X]
and/or
REGISTRATION STATEMENT
Under the
INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 63 [X]
(Check appropriate box or boxes.)
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Phoenix Worldwide Opportunities Fund
(Exact Name of Registrant as Specified in Declaration of Trust)
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101 Munson Street, Greenfield, Massachusetts 01301
(Address of Principal Executive Offices) (Zip Code)
c/o Phoenix Equity Planning
Corporation -- Shareholder Services
(800) 243-1574
(Registrant's Telephone Number, including Area Code)
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Thomas N. Steenburg
Vice President, Counsel and Secretary
Phoenix Duff & Phelps Corporation
56 Prospect Street
Hartford, Connecticut 06115-0479
(name and address of Agent for Service)
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Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check
appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on October 28, 1997 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
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<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
Cross Reference Sheet Pursuant to Rule 404
PART A
<TABLE>
<CAPTION>
Part I of Form N-1A Prospectus Caption
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<S> <C> <C>
1. Cover Page ................................................ Cover Page
2. Synopsis ................................................ Introduction; Fund Expenses
3. Condensed Financial Information ........................... Financial Highlights; Performance Information
4. General Description of Registrant ........................ Introduction; Investment Objectives and Policies;
Investment Techniques and Related Risks; Additional
Information
5. Management of the Fund .................................... Introduction; Management of the Fund; Distribution
Plans
6. Capital Stock and Other Securities ........................ Introduction; Investment Restrictions; Dividends,
Distributions and Taxes; Additional Information;
Investor Account Services
7. Purchase of Securities Being Offered ..................... How to Buy Shares; Distribution Plans; Net Asset
Value; Investor Accounts and Services Available
8. Redemption or Repurchase ................................. How to Redeem Shares
9. Pending Legal Proceeding ................................. Not Applicable
PART B
Part I of Form N-1A Statement of Additional Information
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10. Cover Page ................................................ Cover Page
11. Table of Contents ....................................... Table of Contents
12. General Information ....................................... Cover Page; The Fund
13. Investment Objectives and Policies ........................ Cover Page; Investment Objective and Policies; Other
Investment Techniques; Investment Restrictions
14. Management of the Fund .................................... Trustees and Officers
15. Control Persons and Principal Holders of Securities ...... Not Applicable
16. Investment Advisory & Other Services ..................... Services of the Adviser; The Distributor; Plans of
Distribution
17. Brokerage Allocation and Other Practices .................. Portfolio Transactions and Brokerage
18. Capital Stock and Other Securities ........................ The Fund
19. Purchase, Redemption and Pricing of Securities ............ How to Buy Shares; Alternative Purchase
Arrangements; Investor Account Services; Redemption
of Shares; Net Asset Value
20. Tax Status ................................................ Dividends, Distributions and Taxes
21. Underwriter ............................................. The Distributor; Plans of Distribution
22. Calculation of Performance Data ........................... Performance Information
23. Financial Statements .................................... Financial Statements
</TABLE>
<PAGE>
[Cover Page]
PHOENIX
FUNDS
Prospectus October 30, 1997
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[arrow] PHOENIX WORLDWIDE
OPPORTUNITIES FUND
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[Phoenix logo]PHOENIX
DUFF&PHELPS
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
101 Munson Street
Greenfield, MA 01301
PROSPECTUS
October 30, 1997
Phoenix Worldwide Opportunities Fund (the "Fund") is a diversified
open-end investment management company which invests in domestic and non-U.S.
issuers, including companies, governments, governmental agencies and
international organizations with the investment objective of capital
appreciation. Equity securities are the major portion of the Fund's
investments. Securities will be selected primarily for growth potential, and
any income dividends derived from portfolio holdings will be considered
incidental to the Fund's investment objective. There can be no assurance that
the Fund's objective will be achieved.
This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. No dealer, salesperson or
any other person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having
been authorized by the Fund, Adviser, or Distributor. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby in any state in which or to any person to whom it is
unlawful to make such offer. Neither the delivery of this Prospectus nor any
sale hereunder shall, under any circumstances, create any implication that
information herein is correct at any time subsequent to its date. Investors
should read and retain this Prospectus for future reference. Additional
information about the Fund is contained in the Statement of Additional
Information, dated October 30, 1997, which has been filed with the Securities
and Exchange Commission (the "Commission") and is available upon request at no
charge by calling (800) 243-4361 or by writing to Phoenix Equity Planning
Corporation at 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield, Connecticut
06083-2200. The Statement of Additional Information is incorporated herein by
reference.
The Commission maintains a Web site (http://www.sec.gov) that contains
this Prospectus, the Statement of Additional Information, material incorporated
by reference, and other information regarding registrants that file
electronically with the Commission.
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank, credit union, or affiliated entity, and are not
federally insured or otherwise protected by the Federal Deposit Insurance
Corporation (FDIC), the Federal Reserve Board, or any other agency and involve
investment risk, including possible loss of principal.
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LIKE ALL MUTUAL FUNDS, 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 PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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CUSTOMER SERVICE: (800) 243-1574
MARKETING: (800) 243-4361
TELEPHONE ORDERS: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY): (800) 243-1926
<PAGE>
TABLE OF CONTENTS
Page
-----
INTRODUCTION ................................. 3
FUND EXPENSES ................................. 4
FINANCIAL HIGHLIGHTS ........................ 5
PERFORMANCE INFORMATION ..................... 6
INVESTMENT OBJECTIVE AND POLICIES ............ 6
INVESTMENT TECHNIQUES AND RELATED RISKS ...... 7
INVESTMENT RESTRICTIONS ..................... 9
MANAGEMENT OF THE FUND ........................ 9
DISTRIBUTION PLANS ........................... 10
HOW TO BUY SHARES ........................... 11
INVESTOR ACCOUNT SERVICES ..................... 16
NET ASSET VALUE .............................. 17
HOW TO REDEEM SHARES ........................ 17
DIVIDENDS, DISTRIBUTIONS AND TAXES ............ 18
ADDITIONAL INFORMATION ........................ 19
2
<PAGE>
INTRODUCTION
This Prospectus describes the shares offered by and the operations of
Phoenix Worldwide Opportunities Fund (the "Fund"). The Fund is a diversified,
open-end management investment company established as a Massachusetts business
trust. The Fund's investment objective is capital appreciation. The Fund
invests in domestic and non-U.S. issuers.
Investment Adviser
National Securities & Research Corporation (the "Adviser" or "National")
is the investment adviser of the Fund. The Adviser is a subsidiary of Phoenix
Duff & Phelps Corporation and an indirect subsidiary of Phoenix Home Life
Mutual Insurance Company. See "Management of the Fund" for a description of the
Investment Advisory Agreement and management fees.
Distributor and Distribution Plans
Phoenix Equity Planning Corporation ("Equity Planning" or "Distributor")
serves as national distributor of the Fund's shares. See "Distribution Plans"
and the Statement of Additional Information. Equity Planning also acts as
financial agent of the Fund and as such receives a fee. See "The Financial
Agent." Equity Planning also serves as the Fund's transfer agent. See "The
Custodian and Transfer Agent."
The Fund has adopted distribution plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940 as amended (the "1940 Act") for all classes.
Pursuant to the distribution plan adopted for Class A Shares, the Fund shall
reimburse the Distributor up to a maximum annual rate of 0.05% of the Fund's
average daily Class A Share net assets for distribution expenditures incurred
in connection with the sale and promotion of Class A Shares and 0.25% for
furnishing shareholder services ("Service Fee"). Although the Class A Share
Plan continues to provide for a 0.05% distribution fee, the Distributor has
voluntarily agreed to limit the Rule 12b-1 fee charged to Class A Shares to the
0.25% Service Fee for the fiscal year 1998. Pursuant to the distribution plan
adopted for Class B Shares, the Fund shall reimburse the Distributor up to a
maximum annual rate of 0.75% of the Fund's average daily Class B Share net
assets for distribution expenditures incurred in connection with the sale and
promotion of Class B Shares and 0.25% for a Service Fee. See "Distribution
Plans."
Purchase of Shares
The Fund offers two classes of shares which may be purchased at a price
equal to their net asset value per share plus a sales charge which, at the
election of the purchaser, may be imposed (i) at the time of the purchase (the
"Class A Shares") or (ii) on a contingent deferred basis (the "Class B
Shares"). Completed applications for the purchase of shares should be mailed to
the Phoenix Funds, c/o State Street Bank and Trust Company, P.O. Box 8301,
Boston, MA 02266-8301.
Class A Shares are offered to the public at the next determined net asset
value after receipt of the order by State Street Bank and Trust Company plus a
maximum sales charge of 4.75% of the offering price (4.99% of the amount
invested) on single purchases of less than $50,000. The sales charge for Class
A Shares is reduced on a graduated scale on single purchases of $50,000 or more
and subject to other conditions stated below. See "How to Buy Shares," "How to
Obtain Reduced Sales Charges on Class A Shares" and "Net Asset Value."
Class B Shares are offered to the public at the next determined net asset
value after receipt of an order by State Street Bank and Trust Company, with no
sales charge. Class B Shares are subject to a sales charge if they are redeemed
within five years of purchase. See "How to Buy Shares" and "Deferred Sales
Charge Alternative--Class B Shares."
Shares of each Class represent an identical interest in the investment
portfolio of the Fund and have the same rights, except that Class B Shares bear
the cost of the higher distribution fees which cause the Class B Shares to have
a higher expense ratio and to pay lower dividends than Class A Shares. See "How
to Buy Shares."
Minimum Initial and Subsequent Investments
The minimum initial investment is $500 ($25 if using the bank draft
investment program designated "Investo-Matic") and the minimum subsequent
investment is $25. Exceptions to the minimum and subsequent investment amounts
are available under certain circumstances. See "How to Buy Shares."
Redemption of Shares
Class A Shares may be redeemed at any time at the net asset value per
share next computed after receipt of a redemption request by Equity Planning,
the Fund's transfer agent. Class B shareholders redeeming shares within five
years of the date of purchase will normally be assessed a contingent deferred
sales charge. See "How to Redeem Shares."
Risk Factors
There can be no assurance that the Fund will achieve its investment
objectives. The Fund is intended for long-term investors who can accept the
risks involved in investments in non-U.S. securities. Investing in such
securities involves different risk considerations from those associated with
investing solely in U.S. securities. In addition, investors should consider
risks inherent in an international portfolio, including foreign exchange rate
fluctuations and exchange controls, and certain of the investing policies which
the Fund may employ, including the entering into of forward foreign currency
exchange contracts and option transactions. Investors should be aware that the
Fund's net asset value will fluctuate as the fair market value of the
securities in which the Fund invests fluctuates. In addition, special risks may
be presented by the particular types of securities in which the Fund may
invest. See "Investment Objective and Policies."
3
<PAGE>
FUND EXPENSES
The following table illustrates all fees and expenses a shareholder will
incur. The fees and expenses set forth in the table were for fiscal year ended
June 30, 1997.
<TABLE>
<CAPTION>
Class A Class B
Shares Shares
----------------- -------------------------
<S> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a percentage of offering price) 4.75% None
Maximum Sales Load Imposed on Reinvested Dividends None None
Deferred Sales Load None 5% during the first
year, decreasing 1%
annually to 2%
during the fourth
and fifth years;
decreasing to 0%
after the fifth year.
Redemption Fee None None
Exchange Fee None None
Annual Fund Expenses
(as a percentage of net assets for the year ended June 30, 1997)
Management Fees 0.75% 0.75%
12b-1 Fees (a) (after waiver) 0.25% 1.00%
Other Operating Expenses 0.53% 0.53%
----------- ---------------------
Total Fund Operating Expenses 1.53% (b) 2.28%
=========== =====================
</TABLE>
- -----------
(a) "Rule 12b-1 Fees" represent an asset based sales charge that, for a
long term shareholder, may be higher than the maximum front-end sales charge
permitted by the National Association of Securities Dealers, Inc. ("NASD"). The
Distributor has voluntarily agreed to limit the fee on Class A Shares to 0.25%
for the fiscal year 1998. For the fiscal year ended June 30, 1997, Class A 12b-1
Fees would have been 0.30% absent the waiver. Rule 12b-1 Fees as stated include
a Service Fee. See "Distribution Plans."
(b) Total Fund Operating Expenses for Class A Shares would have been 1.58%,
absent the 12b-1 Fee waiver, for the last fiscal year.
<TABLE>
<CAPTION>
Cumulative Expenses
Paid for the Period
Example* 1 year 3 years 5 years 10 years
- -------------------------------------------------------------------- -------- --------- --------- ---------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment
assuming, (1) a 5% annual return and (2) redemption at the end of
each time period:
Class A Shares 62 $94 $127 $221
Class B Shares 63 $91 $122 $243
An investor would pay the following expenses on the same $1,000
investment assuming no redemption at the end of each time period:
Class A Shares $62 $94 $127 $221
Class B Shares $23 $71 $122 $243
</TABLE>
*The purpose of the table above is to help the investor understand the various
costs and expenses the investor will bear directly or indirectly. The example
should not be considered a representation of past or future expenses. Actual
expenses may be greater or less than those shown. Class B Share figures assume
conversion to Class A Shares after eight years. See "Management of the Fund,"
"Distribution Plans," and "How to Buy Shares."
4
<PAGE>
FINANCIAL HIGHLIGHTS
The following table sets forth certain financial information for
respective fiscal years of the Fund. The financial information has been audited
by Price Waterhouse LLP, independent accountants. Financial statements and
notes thereto are incorporated by reference in the Statement of Additional
Information. The Statement of Additional Information and the Fund's most recent
Annual Report (containing the report of Independent Accountants and additional
information relating to Fund performance) are available at no charge upon
request by calling (800) 243-4361.
(Selected data for a share outstanding throughout the indicated period)
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<TABLE>
<CAPTION>
Class A
--------------------------------------------------------------
Year Ended June 30,
--------------------------------------------------------------
1997 1996 1995 1994
--------------- ---------------- --------------- -------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $ 10.29 $ 9.04 $ 10.17 $ 8.00
Income from
investment
operations:(7)
Net investment
income (loss) ......... 0.03 (3) (0.02)(3) 0.01(3) 0.01
Net realized and
unrealized gain
(loss) ............... 1.25 1.87 0.56 2.19
------------ ----------- ------------ ---------
Total from
investment
operations ............ 1.28 1.85 0.57 2.20
------------ ----------- ------------ ---------
Less distributions:
Dividends from net
investment
income ............... (0.04) -- -- (0.03)
Dividends from net
realized gains ......... (0.78) (0.60) (1.37) --
In excess of net
realized gains ......... -- -- (0.33) --
------------ ----------- ------------ ---------
Total
distributions ........ (0.82) (0.60) (1.70) (0.03)
------------ ----------- ------------ ---------
Change in net asset
value .................. 0.46 1.25 (1.13) 2.17
------------ ----------- ------------ ---------
Net asset value, end
of period ............... $ 10.75 $ 10.29 $ 9.04 $ 10.17
============ =========== ============ =========
Total return(4) ......... 13.40% 21.39% 6.53% 27.46%
Ratios/supplemental
data:
Net assets, end of
period (thousands) ...... $ 153,005 $ 146,052 $ 126,481 $118,707
Ratio to average net
assets of:
Operating
expenses ............... 1.53% 1.60% 1.80% 1.50%
Net investment
income (loss) ......... 0.34% (0.19)% 0.16% 0.09%
Portfolio turnover ...... 234% 245% 277% 259%
Average commission
rate paid(8) ............ $ 0.0180 N/A N/A N/A
<CAPTION>
1993 1992 1991 1990 1989 1988
------------- -------------- -------------- -------------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 7.18 $ 6.82 $ 7.56 $ 7.49 $ 8.00 $ 10.14
Income from
investment
operations:(7)
Net investment
income (loss) ......... 0.03 0.01(2) 0.23(1) 0.19(1)(3) 0.16 0.14
Net realized and
unrealized gain
(loss) ............... 0.79 0.36 (0.67) (0.02) (0.53) (0.61)
-------- ----------- ----------- ------------- --------- ----------
Total from
investment
operations ............ 0.82 0.37 (0.44) 0.17 (0.37) (0.47)
-------- ----------- ----------- ------------- --------- ----------
Less distributions:
Dividends from net
investment
income ............... -- (0.01) (0.30) (0.10) (0.14) (0.13)
Dividends from net
realized gains ......... -- -- -- -- -- (1.54)
In excess of net
realized gains ......... -- -- -- -- -- --
-------- ----------- ----------- ------------- --------- ----------
Total
distributions . -- (0.01) (0.30) (0.10) (0.14) (1.67)
-------- ----------- ----------- ------------- --------- ----------
Change in net asset
value .................. 0.82 0.36 (0.74) 0.07 (0.51) (2.14)
-------- ----------- ----------- ------------- --------- ----------
Net asset value, end
of period ............... $ 8.00 $ 7.18 $ 6.82 $ 7.56 $ 7.49 $ 8.00
======== =========== =========== ============= ========= ==========
Total return(4) ......... 11.42% 5.43% (5.27%) 2.19% (4.62%) (6.49%)
Ratios/supplemental
data:
Net assets, end of
period (thousands) $ 88,870 $ 63,354 $ 59,874 $ 70,388 $ 33,881 $ 45,207
Ratio to average net
assets of:
Operating
expenses ............... 1.88% 2.15%(2) 1.75%(1) 1.33%(1) 1.40% 1.23%
Net investment
income (loss) ......... 0.61% 0.16% 3.46% 2.44% 1.83% 1.81%
Portfolio turnover ...... 95% 51% 76% 119% 87% 144%
Average commission
rate paid(8) ............ N/A N/A N/A N/A N/A N/A
<CAPTION>
Class B
------------------------------------------------------
From
Year Ended Inception
June 30, 7/15/94
---------------------------------- to
1997 1996 6/30/95
----------------- ---------------- -------------------
<S> <C> <C> <C>
Net asset value,
beginning of period $ 10.14 $ 8.98 $ 10.40
Income from
investment
operations:(7)
Net investment
income (loss) ......... (0.03)(3) (0.08)(3) (0.02)(3)
Net realized and
unrealized gain
(loss) ............... 1.21 1.84 0.30
------------ ----------- -------------
Total from
investment
operations ............ 1.18 1.76 0.28
------------ ----------- -------------
Less distributions:
Dividends from net
investment
income ............... (0.01) -- --
Dividends from net
realized gains ......... (0.78) (0.60) (1.37)
In excess of net
realized gains ......... -- -- (0.33)
------------ ----------- -------------
Total
distributions . (0.79) (0.60) (1.70)
------------ ----------- -------------
Change in net asset
value .................. 0.39 1.16 (1.42)
------------ ----------- -------------
Net asset value, end
of period ............... $ 10.53 $ 10.14 $ 8.98
============ =========== =============
Total return(4) ......... 12.46% 20.50% 3.54%(5)
Ratios/supplemental
data:
Net assets, end of
period (thousands) $ 8,412 $ 5,709 $ 2,849
Ratio to average net
assets of:
Operating
expenses ............... 2.29% 2.34% 2.61%(6)
Net investment
income (loss) ......... (0.35)% (0.86)% (0.33)%(6)
Portfolio turnover ...... 234% 245% 277%
Average commission
rate paid(8) ............ $ 0.0180 N/A N/A
</TABLE>
- -----------
(1) Net investment income would have been $.22 and $.17 and the ratio of
operating expenses to average net assets would have been 1.89% and 1.64%
for the years ended June 30, 1991 and 1990, respectively, had the Manager
not reimbursed a portion of its management fees, pursuant to the then
applicable expense limitations.
(2) Net investment income would have been the same $.01 and the ratio of
operating expenses to average net assets would have been 2.18% for the
year ended June 30, 1992, had the subadviser not reimbursed a portion of
its management fees.
(3) Computed using average shares outstanding.
(4) Maximum sales load is not reflected in the total return calculation.
(5) Not annualized
(6) Annualized
(7) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from
anticipated results depending on the timing of share purchases and
redemptions.
(8) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
5
<PAGE>
PERFORMANCE INFORMATION
The Fund may, from time to time, include its total return in
advertisements, sales literature or reports to shareholders or prospective
investors. Total return figures are computed separately for Class A and Class B
Shares in accordance with formulas specified by the Securities and Exchange
Commission and are based on historical earnings and are not intended to
indicate future performance.
Standardized quotations of average annual total return for Class A and
Class B Shares will be expressed in terms of the average annual compounded rate
of return of a hypothetical investment in either Class A or Class B Shares over
a period of 1, 5 and 10 years (or up to the life of the class of shares).
Standardized total return quotations reflect the deduction of a proportional
share of each Class's expenses (on an annual basis), deduction of the maximum
initial sales load in the case of Class A Shares and the maximum contingent
deferred sales charge applicable to a complete redemption of the investment in
the case of Class B Shares, and assume that all dividends and distributions on
Class A and Class B Shares are reinvested when paid. It is expected that the
performance of Class A Shares will be better than that of Class B Shares as a
result of lower distribution fees paid by Class A Shares. The Fund may also
quote supplementally a rate of total return over different periods of time by
means of aggregate, average, and year-by-year or other types of total return
figures. In addition, the Fund may from time to time publish materials citing
historical volatility for shares of the Fund.
The Fund may from time to time include in advertisements containing total
return the ranking of those performance figures relative to such figures for
groups of mutual funds having similar investment objectives as categorized by
ranking services such as Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc., Weisenberger Financial Services, Inc. and Morningstar, Inc.
Additionally, the Fund may compare its performance results to other investment
or savings vehicles (such as certificates of deposit) and may refer to results
published in various publications such as Changing Times, Forbes, Fortune,
Money, Barrons, Business Week, Investor's Daily, Stanger's Mutual Fund Monitor,
The Stanger Register, Stanger's Investment Adviser, The Wall Street Journal,
The New York Times, Consumer Reports, Registered Representative, Financial
Planning, Financial Services Weekly, Financial World, U.S. News and World
Report, Standard & Poor's The Outlook, and Personal Investor. The Fund may from
time to time illustrate the benefits of tax deferral by comparing taxable
investments to investments made through tax-deferred retirement plans. The
total return may also be used to compare the performance of the Fund against
certain widely acknowledged outside standards or indices for stock and bond
market performance, such as the Morgan Stanley Capital International World
(Net) Index, Standard & Poor's 500 Composite Stock Price Index (the "S&P 500"),
Dow Jones Industrial Average, Europe Australia Far East Index (EAFE), Consumer
Price Index, Lehman Brothers Corporate Index and Lehman Brothers T-Bond Index.
The S&P 500 is a commonly quoted measure of stock market performance and
represents common stocks of companies of varying sizes segmented across 90
different industries which are listed on the New York Stock Exchange, the
American Stock Exchange or traded over the NASDAQ National Market System.
Advertisements, sales literature and communications may contain
information about the Fund or Adviser's current investment strategies and
management style. Current strategies and style may change to allow the Fund to
respond quickly to a changing market and economic conditions. From time to time
the Fund may include specific portfolio holdings or industries in such
communications. To illustrate components of overall performance, the Fund may
separate its cumulative and average annual returns into income results and
capital gains or losses; or cite separately as a return figure the equity or
bond portion of the Fund's portfolio; or compare the Fund's equity or bond
return figure to well-known indices of market performance including but not
limited to: the S&P 500, Dow Jones Industrial Average, Morgan Stanley Capital
International World (net) Index, CS First Boston High Yield Index and Salomon
Brothers Corporate and Government Bond Indices.
Performance information for the Fund reflects only the performance of a
hypothetical investment in Class A or Class B Shares of the Fund during the
particular time period on which the calculations are based. Performance
information should be considered in light of the Fund's investment objective
and policies, characteristics and quality of the portfolio, and the market
conditions during the given time period, and should not be considered as a
representation of what may be achieved in the future. For a description of the
methods used to determine total return for the Fund, see the Statement of
Additional Information.
The Fund's Annual Report, available upon request and without charge,
contains a discussion of the performance of the Fund and a comparison of that
performance to a securities market index.
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is capital appreciation. Any current
income that is earned will be considered incidental to the achievement of
capital appreciation. There can be no assurance that the Fund will achieve its
investment objective. The Fund's investment objective is a fundamental policy
and may not be changed without shareholder approval.
The Fund invests in a diversified portfolio of securities of companies and
governments located throughout the world. The Fund will not limit its
investments to any particular regions of the world or to issuers of any
particular size. The Adviser will seek to identify opportunities for capital
appreciation in developed countries and in countries whose economies are still
emerging and developing.
Under normal circumstances, at least 65% of the total assets of the Fund
will be invested in the securities of issuers located in at least three
different countries, one of which will be the United States. The Fund will
invest primarily in equity securities (common stocks, preferred stocks,
securities convertible into common stocks, warrants and any rights to purchase
common
6
<PAGE>
stocks). The Fund may also invest up to 35% of its assets in non-convertible
fixed-income securities of U.S. and non-U.S. issuers (described below) when it
is determined by the Adviser that such securities are appropriate for
achievement of the Fund's investment objective. The market value of
fixed-income securities can be expected to vary inversely to changes in
prevailing interest rates, therefore investing in such fixed-income securities
can provide an opportunity for capital appreciation when interest rates are
expected to decline. The Fund may invest up to 5% of its net assets in fixed
income securities rated below investment grade (commonly referred to as "junk
bonds").
The non-convertible fixed-income securities referred to above will consist
of (1) corporate notes, bonds and debentures of U.S. issuers that are rated
high grade (i.e., rated within the three highest rating categories by a
nationally recognized statistical rating organization ("NRSRO")) or, if
unrated, are deemed by the Adviser to be of comparable quality to those
securities that are rated high grade, (2) corporate notes, bonds, debentures
and other securities (such as Euro-currency instruments) of non-U.S. issuers
that are rated within the three highest rating categories of rating services
chosen by the Adviser to rate foreign debt obligations or, if unrated, are
deemed by the Adviser to be of comparable credit quality to rated securities
that may be purchased and (3) Treasury bills, notes and bonds issued by the
United States Government or its agencies or instrumentalities and securities
issued by foreign governments and supranational agencies (such as the World
Bank).
The Fund may, for daily cash management purposes, invest in the
non-convertible fixed-income securities described above or in high quality
money market securities. In addition, the Fund may invest, without limit, in
any combination of the U.S. government securities and money market securities
referred to above when, in the opinion of the Adviser, it is determined that a
temporary defensive position is warranted based upon current market conditions.
In such instances, the Fund will not be achieving its stated investment
objective.
The percentage of the Fund's assets invested in particular geographic
sectors will shift from time to time in accordance with the judgment of the
Adviser.
INVESTMENT TECHNIQUES AND RELATED RISKS
Covered Call Options
The Fund may write covered call option contracts on U.S. securities which
the Fund owns if such options are listed on an organized securities exchange
and the Adviser determines that it is consistent with the Fund's investment
objective.
Forward Foreign Currency Exchange Contracts
In order to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward foreign currency exchange contracts
("forward currency contracts") for the purchase or sale of a specified currency
at a specified future date. Such contracts may involve the purchase or sale of
a foreign currency against the U.S. dollar or may involve two foreign
currencies. The Fund may enter into forward currency contracts either with
respect to specific transactions or with respect to the Fund's portfolio
positions. For example, when the Fund anticipates making a purchase or sale of
a security, it may enter into a forward currency contract in order to set the
rate (either relative to the U.S. dollar or another currency) at which a
currency exchange transaction related to the purchase or sale will be made.
Further, when the Adviser believes that a particular currency may decline
compared to the U.S. dollar or another currency, the Fund may enter into a
forward contract to sell the currency that the Adviser expects to decline in an
amount approximating the value of some or all of the Fund's portfolio
securities denominated in that currency. For a discussion of the risks
associated with such contracts, see "Risk Factors and Special Considerations."
Futures Contracts on Foreign Currencies and Options on Futures Contracts
The Fund may engage in futures contracts on foreign currencies and options
on these futures transactions as a hedge against changes in the value of the
currencies to which the Fund is subject or to which the Fund expects to be
subject in connection with future purchases, in accordance with the rules and
regulations of the Commodity Futures Trading Commission (the "CFTC"). The Fund
also may engage in such transactions when they are economically appropriate for
the reduction of risks inherent in the ongoing management of the Fund.
The Fund may buy and sell futures contracts on foreign currencies and
groups of foreign currencies. The Fund will engage in transactions in only
those futures contracts and options thereon that are traded on a commodities
exchange or a board of trade. A "sale" of a futures contract means the
assumption of a contractual obligation to deliver the specified amount of
foreign currency at a specified price in a specified future month. A "purchase"
of a futures contract means the assumption of a contractual obligation to
acquire the currency called for by the contract at a specified price in a
specified future month. At the time a futures contract is purchased or sold,
the Fund must allocate cash or securities as a deposit payment (initial
margin). Thereafter, the futures contract is valued daily and the payment of
"variation margin" may be required, resulting in the Fund's providing or
receiving cash that reflects any decline or increase in the contract's value, a
process known as "marking to market."
Options on Foreign Currencies
The Fund may purchase and write put and call options on foreign currencies
traded on securities exchanges or boards of trade (foreign and domestic) for
hedging purposes in a manner similar to that in which forward currency
contracts and futures contracts on foreign currencies will be employed. Options
on foreign currencies are similar to options on stock, except that the Fund has
the right to take or make delivery of a specified amount of foreign currency,
rather than stock.
The Fund may purchase and write options to hedge the Fund's portfolio
securities denominated in foreign currencies. If there is a decline in the
dollar value of a foreign currency in which the Fund's portfolio securities are
denominated, the dollar value of such securities will decline even though
foreign currency value remains
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the same. See "Risk Factors and Special Considerations." To hedge against the
decline of the foreign currency, the Fund may purchase put options on such
foreign currency. If the value of the foreign currency declines, the gain
realized on the put option would offset, in whole or in part, the adverse
effect such decline would have on the value of the portfolio securities.
Alternatively, the Fund may write a call option on the foreign currency. If the
value of the foreign currency declines, the option would not be exercised and
the decline in the value of the portfolio securities denominated in such
foreign currency would be offset in part by the premium the Fund received for
the option.
If, on the other hand, the Adviser anticipates purchasing a foreign
security and also anticipates a rise in the value of such foreign currency
(thereby increasing the cost of such security), the Fund may purchase call
options on the foreign currency. The purchase of such options could offset, at
least partially, the effects of the adverse movements of the exchange rates.
Alternatively, the Fund could write a put option on the currency and, if the
exchange rates move as anticipated, the option would expire unexercised.
Other Policies
The Fund is authorized to invest in the securities of other investment
companies subject to the limitations contained in the 1940 Act. In certain
countries, investments by the Fund may only be made through investments in
other investment companies that, in turn, are authorized to invest in the
securities that are issued in such countries. Investors should recognize that
the Fund's purchase of the securities of such other investment companies
results in the layering of expenses such that investors indirectly bear a
proportionate part of the expenses for such investment companies including
operating costs, and investment advisory and administrative fees.
The Fund generally invests for the long-term; however, it may attempt to
take advantage of short-term trends in the market occasioning more trading. In
such cases, the Fund's annual portfolio turnover rate may exceed 100%. The
annual portfolio turnover rate indicates changes in a fund's portfolio. Higher
portfolio turnover in any given year will result in the payment by a fund of
increased amounts of brokerage commissions and will result in the acceleration
of realization of capital gains or losses for tax purposes.
Risk Factors and Special Considerations
Investing in the securities of non-U.S. companies involves special risks
and considerations not typically associated with investing in U.S. companies.
These include differences in accounting, auditing and financial reporting
standards, generally higher commission rates on foreign portfolio transactions,
differences and inefficiencies in transaction settlement systems, the
possibility of expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations, political instability which could
affect U.S. investments in foreign countries, and potential restrictions on the
flow of international capital. Additionally, dividends payable on foreign
securities may be subject to foreign taxes withheld prior to distribution.
Foreign securities often trade with less frequency and volume than domestic
securities and therefore may exhibit greater price volatility. Investment in
less-developed countries whose markets are still emerging generally presents
risks in greater degree than those presented by investment in foreign issuers
based in countries with developed securities markets and more advanced
regulatory systems.
Prior governmental approval of foreign investments may be required under
certain circumstances in some developing countries, and the extent of foreign
investment in domestic companies may be subject to limitation in other
developing countries. Foreign ownership limitations also may be imposed by the
charters of individual companies in developing countries to prevent, among
other concerns, violation of foreign investment limitations.
The economies of developing countries generally are heavily dependent upon
international trade and, accordingly, have been and may continue to be
adversely affected by trade barriers, exchange controls, managed adjustments in
relative currency values and other protectionist measures imposed or negotiated
by the countries with which they trade. These economies also have been and may
continue to be adversely affected by economic conditions in the countries with
which they trade.
Significant portions of the Fund's assets will be invested in securities
denominated in foreign currencies. Changes in foreign exchange rates will
affect the value of those securities which are denominated or quoted in
currencies other than the U.S. dollar. Exchange rates are determined by forces
of supply and demand in the foreign exchange markets, and these forces are in
turn affected by a range of economic, political, financial, governmental and
other factors. Exchange rate fluctuations can affect the Fund's net asset value
and dividends either positively or negatively depending upon whether foreign
currencies are appreciating or depreciating in value relative to the U.S.
dollar. Exchange rates fluctuate over both the short and long term.
Many of the foreign securities held by the Fund will not be registered
with, nor the issuers thereof be subject to the reporting requirements of, the
U.S. Securities and Exchange Commission. Accordingly, there may be less
publicly available information about the securities and about the foreign
company or government issuing them than is available about a domestic company
or government entity. Moreover, individual foreign economies may differ
favorably or unfavorably from the United States economy in such respects as
growth of Gross National Product, rate of inflation, capital reinvestment,
resource self-sufficiency and balance of payment positions.
The Fund's use of forward currency contracts involves certain investment
risks and transaction costs to which it might not otherwise be subject. These
include: (1) the Adviser may not always be able to accurately predict movements
within currency markets, (2) the skills and techniques needed to use forward
currency contracts are different from those needed to select the securities in
which the Fund invests and (3) there
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is no assurance that a liquid secondary market will exist that would enable the
Adviser to "close out" existing (current) contracts when doing so is desirable.
The Fund's successful use of forward currency contracts, options on foreign
currencies, futures contracts on foreign currencies and options on such
contracts depends upon the Adviser's ability to predict the direction of the
market and political conditions, which requires different skills and techniques
than predicting changes in the securities markets generally. For instance, if
the value of the securities being hedged moves in a favorable direction, the
advantage to the Fund would be wholly or partially offset by a loss in the
forward contracts or futures contracts. Further, if the value of the securities
being hedged does not change, the Fund's net income would be less than if the
Fund had not hedged since there are transactional costs associated with the use
of these investment practices. These practices are subject to various
additional risks. The correlation between movements in the price of options and
futures contracts and the price of the currencies being hedged is imperfect.
The use of these instruments will hedge only the currency risks associated with
investments in foreign securities, not market risks. In addition, if the Fund
purchases these instruments to hedge against currency advances before it
invests in securities denominated in such currency and the currency market
declines, the Fund might incur a loss on the futures contract. The Fund's
ability to establish and maintain positions will depend on market liquidity.
The ability of the Fund to close out a futures position or an option depends
upon a liquid secondary market. There is no assurance that liquid secondary
markets will exist for any particular futures contract or option at any
particular time. The loss from investing in futures contracts is potentially
unlimited.
Lower rated securities have speculative characteristics and changes in
economic conditions or other circumstances are more likely to weaken the
issuer's capacity to make principal and interest payments. In addition, the
Fund does not have a policy requiring the sale of a security whose rating drops
below investment grade. See "Special Considerations and Risk Factors" in the
Statement of Additional Information.
INVESTMENT RESTRICTIONS
The Fund may not invest more than 25% of its total assets in any one
industry. In addition, the Fund will not purchase any securities (excluding
U.S. government securities) if by reason thereof more than 5% of its total
assets (taken at current value) would then be invested in securities of a
single issuer. See the Statement of Additional Information for a detailed
description of all of the Fund's investment restrictions.
MANAGEMENT OF THE FUND
The Fund is an open-end management investment company known as a mutual
fund. The Trustees of the Fund are responsible for the overall supervision of
the operations of the Fund and perform the various duties imposed on Trustees
by the 1940 Act and Massachusetts business trust law.
The Adviser
The investment adviser to the Fund is National, which is located at 56
Prospect Street, Hartford, CT 06115-0486. National is a direct subsidiary of
Phoenix Duff & Phelps Corporation and an indirect subsidiary of Phoenix Home
Life Mutual Insurance Company, a mutual insurance company engaged in the
insurance and investment businesses. National also acts as the investment
adviser or manager for Phoenix Multi-Sector Short Term Bond Fund, Phoenix
California Tax Exempt Bonds, Inc., Phoenix Income and Growth Fund, Phoenix
Equity Opportunities Fund Series of Phoenix Strategic Equity Series Fund, and
Phoenix Multi-Sector Fixed Income Fund, Inc. The Adviser currently has
approximately $1.7 billion in assets under management. The Adviser has acted as
an investment adviser for over sixty years.
As compensation for its services, the Adviser receives a fee which is
accrued daily against the value of the Fund's net assets and is paid monthly by
the Fund. The fee is computed at the annual rate of 0.75% of the Fund's average
daily net assets up to $1 billion, 0.70% of the Fund's average daily net assets
between $1 billion and $2 billion, and 0.65% of the Fund's average daily net
assets in excess of $2 billion. The total advisory fee of 0.75% of the
aggregate net assets of the Fund is greater than that for most mutual funds;
however, the Trustees have determined that it is similar to fees charged by
other mutual funds whose investment objectives are similar to those of the
Fund.
The ratio of management fees to average net assets for the fiscal year
ended June 30, 1997 for Class A Shares and Class B Shares was 0.75%.
The Portfolio Managers
Ms. Jeanne H. Dorey and Mr. David Lui are the co-portfolio managers of the
Fund and as such are primarily responsible for the day-to-day management of the
Fund's investments. Ms. Dorey is also Portfolio Manager of the International
Portfolio of Phoenix Multi-Portfolio Fund and the International Series of The
Phoenix Edge Series Fund, both advised by Phoenix Investment Counsel, Inc.
("PIC"), an affiliate of National. Ms. Dorey has served as Managing Director,
Equities of National and PIC since September 1996 and previously as Vice
President of National and the Fund since May 1995 and of PIC since April 1993.
She has served as Portfolio Manager of the Fund, Phoenix International
Portfolio and Phoenix International Series since February 1993. From 1990 to
1992, Ms. Dorey was an Investment Analyst and Portfolio Manager with Pioneer
Group, Inc. Mr. Lui is also Co-Portfolio Manager of the International Portfolio
of Phoenix Multi-Portfolio Fund and the International Series of The Phoenix
Edge Series Fund. Mr. Lui previously served as Associate Manager of such funds
since June 1995. He has served as Portfolio Manager, Equities of National and
PIC since September 1996. From 1993 to 1995, Mr. Lui was Vice President of
Asian Equities at Alliance Capital Management and from 1990 to 1993, he was an
Associate, Capital Markets, at Bankers Trust.
The Financial Agent
Equity Planning acts as financial agent of the Fund and, as such, performs
administrative, bookkeeping and pricing
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functions for the Fund. As compensation, Equity Planning is entitled to a fee,
payable monthly and based upon (a) the average of the aggregate daily net asset
value of the Fund, at the following incremental annual rates:
First $100 million .05%
$100 million to $300 million .04%
$300 million through $500 million .03%
Greater than $500 million .015%
(b) a minimum fee of $70,000; and (c) an annual fee of $12,000 for each
class of shares beyond one.
For its services during the Fund's fiscal year ended June 30, 1997, Equity
Planning received $64,066 or 0.04% of average net assets.
The Custodian and Transfer Agent
The Custodian of the assets of the Fund is Brown Brothers Harriman & Co.,
40 Water Street, Boston, Massachusetts 02109 (the "Custodian").
Pursuant to a Transfer Agent and Service Agreement with the Phoenix Funds,
Equity Planning acts as transfer agent for the Fund (the "Transfer Agent") for
which it is paid $14.95 plus out of pocket expenses for each designated
shareholder account. The Transfer Agent engages sub-agents to perform certain
shareholder servicing functions from time to time for which such agents shall
be paid a fee by Equity Planning.
Brokerage Commissions
Although the Conduct Rules of the National Association of Securities
Dealers, Inc. prohibit its members from seeking orders for the execution of
investment company portfolio transactions on the basis of their sales of
investment company shares, under such Rules, sales of investment company shares
may be considered in selecting brokers to effect portfolio transactions.
Accordingly, some portfolio transactions are, subject to such Rules and to
obtaining best prices and executions, effected through dealers (excluding
Equity Planning) who sell shares of the Fund.
DISTRIBUTION PLANS
The offices of Equity Planning, the national distributor of the Fund's
shares, are located at 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield,
Connecticut 06083-2200. Philip R. McLoughlin is a Trustee and President of the
Fund and a director and officer of Equity Planning. David R. Pepin, a Director
and officer of Equity Planning, is an officer of the Fund. Michael E. Haylon, a
director of Equity Planning, is an officer of the Fund. G. Jeffrey Bohne, Nancy
G. Curtiss, William E. Keen, III, William R. Moyer, Leonard J. Saltiel and
Thomas N. Steenburg are officers of the Fund and officers of Equity Planning.
Equity Planning and the Fund have entered into distribution agreements
under which Equity Planning has agreed to use its best efforts to find
purchasers for Fund shares sold subject to an initial sales charge and those
sold subject to a contingent deferred sales charge. The Fund has granted Equity
Planning the exclusive right to purchase from the Fund and resell, as
principal, shares needed to fill unconditional orders for Fund shares. Equity
Planning may sell Fund shares through its registered representatives or through
securities dealers with whom it has sales agreements. Equity Planning may also
sell Fund shares pursuant to sales agreements entered into with banks or
bank-affiliated securities brokers who, acting as agent for their customers,
place orders for Fund shares with Equity Planning. Although the Glass-Steagall
Act prohibits banks and bank affiliates from engaging in the business of
underwriting, distributing or selling securities (including mutual fund
shares), banking regulators have not indicated that such institutions are
prohibited from purchasing mutual fund shares upon the order and for the
account of their customers. If, because of changes in law or regulations, or
because of new interpretations of existing law, it is determined that agency
transactions of banks or bank-affiliated securities brokers are not permitted
under the Glass-Steagall Act, the Trustees will consider what action, if any,
is appropriate. It is not anticipated that termination of sales agreements with
banks or bank-affiliated securities brokers would result in a loss to their
customers or a change in the net asset value per share of the Fund.
The sale of Fund shares through a securities broker affiliated with a
particular bank is not expected to preclude the Fund from borrowing from such
bank or from availing itself of custodial or transfer agency services offered
by such bank.
The Trustees have adopted separate distribution plans under Rule 12b-1 of
the 1940 Act for each class of shares of the Fund (the "Class A Plan," the
"Class B Plan," and collectively the "Plans"). The Plans permit the Fund to
reimburse the Distributor for expenses incurred in connection with the sale and
promotion of Fund shares and the furnishing of shareholder services. Pursuant
to the Class A Plan, the Fund may reimburse the Distributor for actual expenses
of the Distributor up to 0.05% annually of the average daily net assets of the
Fund's Class A Shares. However, the Distributor has voluntarily agreed to waive
reimbursement for distribution expenses under the Class A Plan for the fiscal
year 1998. Under the Class B Plan, the Fund may reimburse the Distributor
monthly for actual expenses of the Distributor up to 0.75% annually of the
average daily net assets of the Fund's Class B Shares. In addition, under the
Plans the Fund shall pay the Distributor 0.25% annually of the average daily
net assets of the Fund shares for providing services to shareholders, including
assistance in connection with inquiries related to shareholder accounts (the
"Service Fee").
Expenditures incurred under the Plans may consist of: (i) commissions to
sales personnel for selling shares of the Fund (including underwriting
commissions and finance charges related to the payment of commissions for sales
of Class B Shares); (ii) compensation, sales incentives and payments to sales,
marketing and service personnel; (iii) payments to broker-dealers and other
financial institutions which have entered into agreements with the Distributor
for services rendered in connection with the sale and distribution of shares of
the Fund; (iv) payment of expenses incurred in sales and promotional
activities, including
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advertising expenditures related to the Fund; (v) the costs of preparing and
distributing promotional materials; (vi) the costs of printing the Fund's
Prospectus and Statement of Additional Information for distribution to
potential investors; and (vii) such other similar services that the Trustees
determine are reasonably calculated to result in the sale of shares of the
Fund. From the Service Fee the Distributor expects to pay a quarterly fee to
qualifying broker/dealer firms, as compensation for providing personal services
and/or the maintenance of shareholder accounts, with respect to shares sold by
such firms. This fee will not exceed on an annual basis 0.25% of the average
annual net asset value of such shares, and will be in addition to sales charges
on Fund shares which are re-allowed to such firms. To the extent that the
entire amount of the Service Fee is not paid to such firms, the balance will
serve as compensation for personal and account maintenance services furnished
by the Distributor.
In order to receive payments under the Plans, participants must meet such
qualifications as are to be established in the sole discretion of the
Distributor, such as services to the Fund's shareholders; or services providing
the Fund with more efficient methods of offering shares to groups of clients,
members or prospects of a participant; or services permitting bulking of
purchases or sales, or transmission of such purchases or sales by computerized
tape or other electronic equipment; or other batch processing.
Under the Class A Plan, reimbursement or payment of expenses may not be
made unless such payment or reimbursement occurs prior to the earliest of (a)
the last day of the one-year period commencing on the last day of the calendar
quarter during which the specific service or activity was performed, or (b) the
last day of the one-year period commencing on the last day of the calendar
quarter during which payment for the service or activity was made by a third
party on behalf of the Fund. The Class B Plan, however, does not limit the
reimbursement of distribution-related expenses to expenses incurred in
specified time periods.
For the fiscal year ended June 30, 1997, the Fund paid $362,581 under the
Class A Plan and $66,061 under the Class B Plan. The fees were used to
compensate broker-dealers for servicing shareholder's accounts, including
$11,693 paid to W.S. Griffith & Co., Inc., an affiliate, compensating sales
personnel and reimbursing the Distributor for commission expenses and expenses
related to preparation of the marketing material. The Distributor's expenses
from selling and servicing Class B Shares may be more than the payments received
from contingent deferred sales charges collected on redeemed shares and from the
Fund under the Class B Plan. Those expenses may be carried over and paid in
future years. At June 30, 1997, the end of the last Plan year, the Distributor
had incurred unreimbursed expenses under the Class B Plan of $266,919 (equal to
0.17% of the Fund's net assets) which have been carried over into the present
Class B Plan year.
On a quarterly basis, the Fund's Trustees review a report on expenditures
under each Plan and the purposes for which expenditures were made. The Trustees
conduct an additional, more extensive review annually in determining whether
each Plan will be continued. By its terms, continuation of each Plan from year
to year is contingent on annual approval by a majority of the Fund's Trustees
and by a majority of the Trustees who are not "interested persons" (as defined
in the 1940 Act) and who have no direct or indirect financial interest in the
operation of either Plan or any related agreements (the "Plan Trustees"). Each
Plan provides that it may not be amended to increase materially the costs which
the Fund may bear without approval of the applicable class of shareholders of
the Fund and that other material amendments must be approved by a majority of
the Plan Trustees by vote cast in person at a meeting called for the purpose of
considering such amendments. Each Plan further provides that while it is in
effect, the selection and nomination of Trustees who are not "interested
persons" shall be committed to the discretion of the Trustees who are not
"interested persons." Each Plan may be terminated at any time by vote of a
majority of the Plan Trustees or a majority of the applicable class of
outstanding shares of the Fund. The Trustees have concluded that there is a
reasonable likelihood that the Plans will benefit the Fund and all classes of
shareholders.
The National Association of Securities Dealers, Inc. ("NASD") regards
certain distribution fees as asset-based sales charges subject to NASD sales
load limits. The NASD's maximum sales charge rule may require the Trustees to
suspend distribution fees or amend either or both Plans.
HOW TO BUY SHARES
The Fund currently issues two classes of shares. Class A Shares are sold
to investors choosing the initial sales charge alternative. Class B Shares are
sold to investors choosing the deferred sales charge alternative. The minimum
initial purchase is $500, and the minimum subsequent investment is $25. Both
the minimum initial and subsequent investment amounts are $25 for investments
pursuant to the "Investo-Matic" plan, a bank draft investing program
administered by Equity Planning, or pursuant to the Systematic Exchange
Privilege (see Statement of Additional Information).Completed applications for
the purchase of shares should be mailed to The Phoenix Funds, c/o State Street
Bank and Trust Company, P.O. Box 8301, Boston, MA 02266-8301.
Each class of shares represents an interest in the same portfolio of
investments of the Fund, has the same rights, and is identical to the other in
all respects, except that Class B Shares bear the expenses of the deferred
sales arrangement and any expenses (including the higher distribution and
services fee and any incremental transfer agency costs) resulting from such
sales arrangement. Each class has exclusive voting rights with respect to
provisions of the Rule 12b-1 distribution plan pursuant to which its
distribution and services fee is paid and each class has different exchange
privileges. Only the Class B Shares are subject to a conversion feature. The
net income attributable to Class B Shares and the dividends paid on Class B
Shares will be reduced by the amount of the higher distribution and services
fee and
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incremental expenses associated with such distribution and services
fee; likewise, the net asset value of the Class B Shares will be reduced by
such amount to the extent the Fund has undistributed net income.
Subsequent investments for the purchase of full and fractional shares in
amounts of $25 or more may be made through an investment dealer or by sending a
check to Phoenix Funds, c/o State Street Bank and Trust Company, P.O. Box 8301,
Boston, MA 02266-8301. Shares issued will be electronically recorded in book
entry form. A fee may be incurred by the shareholder for a previously issued
lost or stolen share certificate. Sales personnel of broker-dealers distributing
the Fund's shares may receive differing compensation for selling Class A or
Class B Shares.
The Fund offers combination purchase privileges, letters of intent,
accumulation plans, withdrawal plans and reinvestment and exchange privileges.
Certain privileges may not be available in connection with Class B Shares.
Shares of the Fund or shares of any other Phoenix Fund may be exchanged for
shares of the same class on the basis of the relative net asset values per
share at the time of the exchange. Exchanges are subject to the minimum initial
investment requirement of the designated Phoenix Fund, except if made in
connection with the Systematic Exchange Privilege. Shareholders may exchange
shares held in book-entry form for an equivalent number (value) of the same
class of shares from any other Phoenix Fund. On Class B Share exchanges, the
contingent deferred sales charge schedule of the original shares purchased
continues to apply.
Alternative Sales Arrangements
The alternative sales arrangements permit an investor to choose the method
of purchasing shares that is most beneficial given the amount of the purchase,
the length of time the investor expects to hold the shares, whether the
investor wishes to receive distributions in cash or to reinvest them in
additional shares of the Fund, and other circumstances. Investors should
consider whether, during the anticipated life of their investment in the Fund,
the accumulated continuing distribution and services fee and contingent
deferred sales charges on Class B Shares prior to conversion would be less than
the initial sales charge and accumulated distribution and services fee on Class
A Shares purchased at the same time, and to what extent such differential would
be offset by the higher yield of Class A Shares. In this regard, Class A Shares
will be more beneficial to the investor who qualifies for certain reduced
initial sales charges. For this reason, the Distributor intends to limit sales
of Class B Shares sold to any shareholder to a maximum total value of $250,000.
Class B Shares sold to unallocated qualified employer sponsored plans will be
limited to a maximum total value of $1,000,000.
Class B Shares sold to allocated qualified employer sponsored plans,
including 401(k) plans, will be limited to a maximum total value of $250,000
for each participant. The Distributor reserves the right to decline the sale of
Class B Shares to allocated qualified employer sponsored plans not utilizing an
approved participant tracking system. In addition, Class B Shares will not be
sold to any qualified employee benefit plan, endowment fund or foundation if,
on the date of the initial investment, the plan, fund or foundation has assets
of $10,000,000 or more or at least 100 eligible employees. Class B Shares will
also not be sold to investors who have reached the age of 85 because of such
persons' expected distribution requirements.
Class A Shares are subject to a lower distribution and services fee and,
accordingly, pay correspondingly higher dividends per share. However, because
initial sales charges are deducted at the time of purchase, such investors
would not have all their funds invested initially and, therefore, would
initially own fewer shares. Investors not qualifying for reduced initial sales
charges who expect to maintain their investment for an extended period of time
might consider purchasing Class A Shares because the accumulated continuing
distribution and services fee on Class B Shares may exceed the initial sales
charge on Class A Shares during the life of the investment. Again, however,
such investors must weigh this consideration against the fact that, because of
such initial sales charge, not all their funds will be invested initially.
However, other investors might determine that it would be more advantageous to
purchase Class B Shares to have all their funds invested initially, although
remaining subject to higher continuing distribution and services fee and, for a
five-year period, being subject to a contingent deferred sales charge.
Initial Sales Charge Alternative--Class A Shares
The public offering price of Class A Shares is the net asset value plus a
sales charge, as set forth below. Offering prices become effective at the close
of the general trading session of the New York Stock Exchange. Orders received
by dealers prior to such time are confirmed at the offering price effective at
that time, provided the order is received by State Street Bank & Trust Company
prior to the close of regular trading on the New York Stock Exchange.
The sales charge varies with the size of the purchase and reduced charges
apply to the aggregate of purchases of the Fund made at one time by "any
person," which term includes an individual, an individual and his/her spouse
and their children under the age of 21, or a trustee or other fiduciary
purchasing shares for a single trust, estate or fiduciary account although more
than one beneficiary is involved.
Class A Shares of the Fund are offered to the public at the net asset
value next computed after the purchase order is received by State Street Bank
and Trust Company, plus a maximum sales charge of 4.75% of the offering price
(4.99% of the amount invested) on single purchases of less than $50,000. The
sales charge is reduced on a graduated scale on single purchases of $50,000 or
more as shown below.
12
<PAGE>
<TABLE>
<CAPTION>
Sales Charge Sales Charge Dealer Discount
Amount of as Percentage as Percentage or Agency Fee
Transaction of Offering of Amount as Percentage of
at Offering Price Price Invested Offering Price*
- -------------------- --------------- --------------- -----------------
<S> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.25%
$50,000 but under
$100,000 4.50% 4.71% 4.00%
$100,000 but under
$250,000 3.50% 3.63% 3.00%
$250,000 but under
$500,000 3.00% 3.09% 2.75%
$500,000 but under
$1,000,000 2.00% 2.04% 1.75%
$1,000,000 or more None None None**
</TABLE>
- ---------
*Equity Planning will sponsor sales contests, training and educational meetings
and provide to all qualifying dealers, from its own profits and resources,
additional compensation in the form of trips, merchandise or expense
reimbursement. Brokers and dealers other than Equity Planning may also make
customary additional charges for their services in effecting purchases, if they
notify the Fund of their intention to do so. Equity Planning shall also pay
service and retention fees, from its own profits and resources, to qualified
wholesalers in connection with the sale of shares of Phoenix Funds (exclusive of
Class A Shares of Phoenix Money Market Series) by registered financial
institutions and related third party marketers.
**In connection with Class A Share purchases by an account held in the name of
a qualified employee benefit plan with at least 100 eligible employees, Equity
Planning may pay broker/dealers, from its own resources, an amount equal to 1%
on the first $3 million of purchases, 0.50% on the next $3 million, plus 0.25%
on the amount in excess of $6 million.
In connection with Class A Share purchases of $1,000,000 or more (or
subsequent purchases in any amount), excluding purchases by qualified employee
benefit plans as described above, Equity Planning may pay broker/dealers, from
its own profits and resources, a percentage of the net asset value of any
shares sold as set forth below:
<TABLE>
<CAPTION>
Purchase Amount Payment to Broker/Dealer
- ------------------------- ------------------------
<S> <C>
$1,000,000 to $3,000,000 1%
$3,000,001 to $6,000,000 0.50 of 1%
$6,000,001 or more 0.25 of 1%
</TABLE>
If part or all of such investment, including investments by qualified
employee benefit plans, is subsequently redeemed within one year of the
investment date, the broker/dealer will refund to the Distributor such amounts
paid with respect to the investment.
How To Obtain Reduced Sales Charges on Class A Shares
Investors choosing the initial sales charge alternative under certain
circumstances may be entitled to pay reduced sales charges. The circumstances
under which such investors may pay reduced sales charges are described below.
Qualified Purchasers. No sales charge will be imposed on sales of shares
to: (1) any Phoenix Fund trustee, director or officer; (2) any director or
officer, or any full-time employee or sales representative (who has acted as
such for at least 90 days) of the Adviser or of Equity Planning; (3) registered
representatives and employees of securities dealers with whom Equity Planning
has sales agreements; (4) any qualified retirement plan exclusively for persons
described above; (5) any officer, director or employee of a corporate affiliate
of the Adviser or Equity Planning; (6) any spouse, child, parent, grandparent,
brother or sister of any person named in (1), (2), (3) or (5) above; (7)
employee benefit plans for employees of the Adviser, Equity Planning and/or
their corporate affiliates; (8) any employee or agent who retires from Phoenix
Home Life or Equity Planning; (9) any account held in the name of a qualified
employee benefit plan, endowment fund or foundation if, on the date of initial
investment, the plan, fund or foundation has assets of $10,000,000 or more or
at least 100 eligible employees; (10) any person with a direct rollover
transfer of shares from an established Phoenix Fund qualified plan; (11) any
Phoenix Home Life separate account which funds group annuity contracts offered
to qualified employee benefit plans; (12) any state, county, city,
instrumentality, department, authority or agency prohibited by law from paying
a sales charge; (13) any fully matriculated student in a U.S. service academy;
(14) any unallocated accounts held by a third party administrator, registered
investment adviser, trust company, or bank trust department which exercises
discretionary authority and holds the account in a fiduciary, agency, custodial
or similar capacity if in the aggregate such accounts held by such entity equal
or exceed $1,000,000; (15) any person who is investing redemption proceeds from
investment companies other than the Phoenix Funds if, in connection with the
purchases or redemption of the redeemed shares, the investor paid a prior sales
charge provided such investor supplies verification that the redemption
occurred within 90 days of the Phoenix Fund purchase and that a sales charge
was paid; provided that sales made to persons listed in (1) through (15) above
are made upon the written assurance of the purchaser that the purchase is made
for investment purposes and that the shares so acquired will not be resold
except to the Fund.
In addition, Class A shares purchased by the following investors are not
subject to any Class A sales charge: (1) investment advisers and financial
planners who charge an advisory, consulting or other fee for their services and
buy shares for their own accounts or the accounts of their clients, and (2)
retirement plans and deferred compensation plans and trusts used to fund those
plans (including, for example, plans qualified or created under sections
401(a), 403(b) or 457 of the Internal Revenue Code), and "rabbi trusts" that
buy shares for their own accounts, in each case if those purchases are made
through a broker or agent or other financial intermediary that has made special
arrangements with the Distributor for those purchases; (3) clients of such
investment advisers or financial planners who buy shares for their own accounts
may also purchase shares without sales charge but only if their accounts are
linked to a master account of their investment adviser or financial planner on
the books and records of the broker, agent or financial intermediary with which
the Distributor has made such special arrangements (each of these investors may
be charged a fee by the broker, agent or financial intermediary for purchasing
shares).
13
<PAGE>
Shares issued pursuant to the automatic reinvestment of income dividends
or capital gains distributions are not subject to any sales charges. The Fund
receives the entire net asset value of its Class A Shares sold to investors.
The Distributor's commission is the sales charge shown above less any
applicable discount or commission "re-allowed" to selected dealers and agents.
The Distributor will re-allow discounts to selected dealers and agents in the
amounts indicated in the table above. In this regard, the Distributor may elect
to re-allow the entire sales charge to selected dealers and agents for all
sales with respect to which orders are placed with the Distributor. A selected
dealer who receives re-allowance in excess of 90% of such a sales charge may be
deemed to be an "underwriter" under the Securities Act of 1933.
Combination Purchase Privilege. Purchases, either singly or in any
combination, of shares of the Fund or shares of any other Phoenix Fund,
(including Class B Shares and excluding Money Market Fund Series Class A Shares)
if made at a single time by a single purchaser, will be combined for the purpose
of determining whether the total dollar amount of such purchases entitles the
purchaser to a reduced sales charge on any such purchases of Class A Shares.
Each purchase of Class A Shares will then be made at the public offering price,
as described in the then current Prospectus relating to such shares, which at
the time of such purchase is applicable to a single transaction of the total
dollar amount of all such purchases. The term "single purchaser" includes an
individual, or an individual, his spouse and their children under the age of
majority purchasing for his or their own account (including an IRA account)
including his or their own trust, commonly known as a living trust; a trustee or
other fiduciary purchasing for a single trust, estate or single fiduciary
account, although more than one beneficiary is involved; multiple trusts or
403(b) plans for the same employer; multiple accounts (up to 200) under a
qualified employee benefit plan or administered by a third party administrator;
or trust companies, bank trust departments, registered investment advisers, and
similar entities placing orders or providing administrative services with
respect to funds over which they exercise discretionary investment authority and
which are held in a fiduciary, agency, custodial or similar capacity, provided
all shares are held in record in the name, or nominee name, of the entity
placing the order.
Letter of Intent. Class A Shares or shares of any other Phoenix Fund
(including Class B Shares and excluding Money Market Fund Series Class A
Shares) may be purchased by a "single purchaser" (as defined above) within a
period of thirteen months pursuant to a Letter of Intent, in the form provided
by Equity Planning, stating the investor's intention to invest in such shares
during such period an amount which, together with the value (at their maximum
offering prices on the date of the Letter) of the Class A Shares of the Fund or
Class A or Class B Shares of any other Phoenix Fund then owned by such
investor, equals a specified dollar amount. Each purchase of shares made
pursuant to a Letter of Intent will be made at the public offering price, as
described in the then current Prospectus relating to such shares, which at the
time of purchase is applicable to a single transaction of the total dollar
amount specified in the Letter of Intent.
An investor's Letter of Intent is not a binding commitment of the investor
to purchase or a binding obligation of the Fund or Equity Planning to sell a
specified dollar amount of shares qualifying for a reduced sales charge.
Accordingly, out of an initial purchase (and subsequent purchases if
necessary), 5% of the dollar amount of purchases required to complete his
investment (valued at the purchase price thereof) is held in escrow in the form
of shares registered in the investor's name until completion of the investment,
at which time escrowed shares are deposited to the investor's account. If the
investor does not complete the investment and does not within 20 days after
written request by Equity Planning or the dealer pay the difference between the
sales charge on the dollar amount specified in his Letter of Intent and the
sales charge on the dollar amount of actual purchases, the difference will be
realized through the redemption of an appropriate number of the escrowed shares
and any remaining escrowed shares will be deposited to his account.
Right of Accumulation. "Single purchasers" (as defined above) may also
qualify for reduced sales charges based on the combined value of purchases of
either class of shares of the Fund, or any other Phoenix Fund, made over time.
Reduced sales charges are offered to investors whose shares, in the aggregate,
are valued (i.e., the dollar amount of such purchases plus the then current
value (at the public offering price as described in the then current prospectus
relating to such shares) of shares of all Phoenix Funds owned) in excess of the
threshold amounts described in the section entitled "Initial Sales Charge
Alternative--Class A Shares." To use this option, the investor must supply
sufficient information as to account registrations and account numbers to
permit verification that one or more of the purchases qualifies for a reduced
sales charge.
Associations. A group or association may be treated as a "single
purchaser" and qualify for reduced initial sales charges under the Combination
Purchase Privilege and Right of Accumulation if the group or association (1)
has been in existence for at least six months; (2) has a legitimate purpose
other than to purchase mutual fund shares at a reduced sales charge; (3) gives
its endorsements or authorization to the investment program to facilitate
solicitation of the membership by the investment dealer, thus effecting
economies of sales effort; and (4) is not a group whose sole organizational
nexus is that the members are credit card holders of a company, policyholders
of an insurance company, customers of a bank or a broker-dealer or clients of
an investment adviser.
Deferred Sales Charge Alternative--Class B Shares
Investors choosing the deferred sales charge alternative purchase Class B
Shares at net asset value per share without the imposition of a sales charge at
the time of purchase. The Class B Shares are being sold without an initial
sales charge, but are subject to a sales charge if redeemed within five years
of purchase.
Proceeds from the contingent deferred sales charge are paid to the
Distributor and are used in whole or in part by the Distributor to defray the
expenses of the Distributor related to providing distribution-related services
to the Fund in
14
<PAGE>
connection with the sale of the Class B Shares, such as the payment of
compensation to selected dealers and agents for selling Class B Shares. The
combination of the contingent deferred sales charge and the distribution and
services fee facilitates the ability of the Fund to sell the Class B Shares
without a sales charge being deducted at the time of purchase.
Contingent Deferred Sales Charge. Class B Shares which are redeemed within
five years of purchase will be subject to a contingent deferred sales charge at
the rates set forth below charged as a percentage of the dollar amount subject
thereto. The charge will be assessed on an amount equal to the lesser of the
current market value or the cost of the shares being redeemed. Accordingly, no
sales charge will be imposed on increases in net asset value above the initial
purchase price. In addition, no charge will be assessed on shares derived from
reinvestment of dividends or capital gains distributions.
The Distributor intends to pay investment dealers a sales commission of 4%
of the sale price of Class B Shares sold by such dealers, subject to future
amendment or termination. The Distributor will retain all or a portion of the
continuing distribution and services fee assessed to Class B shareholders and
will receive the entire amount of the contingent deferred sales charge paid by
shareholders on the redemption of shares to finance the 4% commission plus
interest and related marketing expenses.
The amount of the contingent deferred sales charges, if any, will vary
depending on the number of years from the time of payment for the purchase of
Class B Shares until the time of redemption of such shares. Solely for purposes
of determining the number of years from the time of any payment for the
purchases of shares, all payments during a month will be aggregated and deemed
to have been made on the last day of the previous month.
<TABLE>
<CAPTION>
Contingent Deferred
Sales Charge as
a Percentage of
Dollar Amount
Year Since Purchase Subject to Charge
- --------------------- --------------------
<S> <C>
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth 2%
Sixth 0%
</TABLE>
In determining whether a contingent deferred sales charge is applicable to
a redemption, it will be assumed that any Class A Shares are being redeemed
first, Class B Shares held for over five-years and shares acquired pursuant to
reinvestment of dividends or distributions are redeemed next. Any Class B
Shares held longest during the five-year period are redeemed next unless the
shareholder directs otherwise. The charge will not be applied to dollar amounts
representing an increase in the net asset value since the time of purchase.
To provide an example, assume in 1992, an investor purchased 100 Class B
Shares. In 1995, the investor purchased another 100 Class B Shares at $12 per
share. In 1997, the investor purchased 100 Class A Shares. Assume that in 1998,
the investor owns 225 Class B Shares (15 Class B Shares resulting from dividend
reinvestment and distributions upon the Class B Shares purchased in 1992 and 10
Class B Shares resulting from dividend reinvestment and distributions upon the
Class B Shares purchased in 1995) as well as 100 Class A Shares. If the
investor wished to then redeem 300 shares and had not specified a preference in
redeeming shares: first, 100 Class A Shares would be redeemed without charge.
Second, 115 Class B Shares purchased in 1992 (including 15 shares issued as a
result of dividend reinvestment and distributions) would be redeemed next
without charge. Finally, 85 Class B Shares purchased in 1995 would be redeemed
resulting in a deferred sales charge of $27 [75 shares (85 shares minus 10
shares resulting from dividend reinvestment) x $12 (original price or current
NAV if less than original) x 3% (applicable rate in the third year after
purchase)].
The contingent deferred sales charge is waived on redemptions of shares
(a) if redemption is made within one year of death (i) of the sole shareholder
on an individual account, (ii) of a joint tenant where the surviving joint
tenant is the deceased's spouse, or (iii) of the beneficiary of a Uniform Gifts
to Minors Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other custodial
account; (b) if redemption is made within one year of disability, as defined in
Section 72(m)(7) of the Code; (c) in connection with mandatory distributions
upon reaching age 701/2 under any retirement plan qualified under Sections 401,
408 or 403(b) of the Code or any redemption resulting from the tax-free return
of an excess contribution to an IRA; (d) in connection with redemptions by
401(k) plans using an approved participant tracking system for: participant
hardships, death, disability or normal retirement, and loans which are
subsequently repaid; (e) in connection with the exercise of certain exchange
privileges among Class B Shares of the Fund and Class B Shares of other Phoenix
Funds; (f) in connection with any direct rollover transfer of shares from an
established Phoenix Fund qualified plan into a Phoenix Fund IRA by participants
terminating from the qualifying plan; and (g) in accordance with the terms
specified under the Systematic Withdrawal Program. If, upon the occurrence of a
death as outlined above, the account is transferred to an account registered in
the name of the deceased's estate, the contingent deferred sales charge will be
waived on any redemption from the estate account occurring within one year of
the death. If the Class B Shares are not redeemed within one year of the death,
they will remain Class B Shares and be subject to the applicable contingent
deferred sales charge when redeemed.
Class B Shares of the Fund will automatically convert to Class A Shares
without a sales charge at the relative net asset values of each of the classes
after eight years from the acquisition of the Class B Shares, and as a result,
will thereafter be subject to the lower distribution and services fee under the
Class A Plan. Such conversion will be on the basis of the relative net asset
value of the two classes without the imposition of any sales load, fee or other
charge. The purpose of the conversion feature is to relieve the holders of
Class B Shares that have been outstanding for a period of time sufficient for
the Distributor to have been
15
<PAGE>
compensated for distribution-related expenses from the burden of such
distribution related expenses.
For purposes of conversion to Class A Shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares
in a shareholder's Fund account will be considered to be held in a separate
sub-account. Each time any Class B Shares in the shareholder's Fund account
(other than those in the sub-account) are converted to Class A Shares, an equal
pro rata portion of the Class B Shares in the sub-account will also be
converted to Class A Shares.
The conversion of Class B Shares to Class A Shares is subject to the
continuing availability of an opinion of counsel or a ruling from the Internal
Revenue Service ("IRS") to the effect: (i) that the conversion of shares does
not constitute a taxable event under federal income tax law; and (ii) the
assessment of higher distribution and services fees and transfer agency costs
with respect to Class B Shares does not result in dividends or distributions
constituting "preferential dividends" under the Code. The conversion of Class B
Shares to Class A Shares may be suspended if such an opinion or ruling is no
longer available. In that event, no further conversion of Class B Shares would
occur, and shares might continue to be subject to the higher distribution and
services fee for an indefinite period which may extend beyond the period ending
eight (8) years after the end of the month in which affected Class B Shares were
purchased. If the Fund were unable to obtain such assurances with respect to the
assessment of distribution and services fees and transfer agent costs relative
to the Class B Shares it might make additional distributions if doing so would
assist in complying with the Fund's general practice of distributing sufficient
income to reduce or eliminate U.S. federal taxes.
INVESTOR ACCOUNT SERVICES
The Fund mails periodic statements and reports to shareholders. In order
to reduce the volume and cost of mailings, to the extent possible, only one
copy of most Fund reports will be mailed to households for multiple accounts
with the same surname at the same household address. Please contact Equity
Planning to request additional copies of shareholder reports toll free at (800)
243-4361.
In most cases, changes to any shareholder account may be accomplished by
calling Shareholder Services at (800) 243-1574. More information relating to
shareholder account services can be found in the Fund's Statement of Additional
Information ("SAI").
Bank Draft Investing Program (Investo-Matic Plan). By completing the
Investo-Matic Section of the New Account Application, you may authorize the
bank named in the form to draw $25 or more from your personal checking or
savings account to be used to purchase additional shares for your account. The
amount you designate will be made available, in form payable to the order of
the Transfer Agent, by the bank on the date the bank draws on your account and
will be used to purchase shares at the applicable offering price.
Distribution Option. The Fund currently declares all income dividends and
all capital gain distributions, if any, payable in shares of the Fund at net
asset value or, at your option, in cash. By exercising the distribution option,
you may elect to: (1) receive both dividends and capital gain distributions in
additional shares or (2) receive dividends in cash and capital gain
distributions in additional shares or (3) receive both dividends and capital
gain distributions in cash. If you elect to receive dividends and/or
distributions in cash and the check cannot be delivered or remains uncashed due
to an invalid address, then the dividend and/or distribution will be reinvested
after the Transfer Agent has been informed that the proceeds are undeliverable.
Additional shares will be purchased in your account at the then current net
asset value. Dividends and capital gain distributions received in shares are
taxable to you and credited to your account in full and fractional shares
computed at the closing net asset value on the next business day after the
record date. No interest will accrue on amounts represented by uncashed
distribution or redemption checks.
Systematic Withdrawal Program. The Systematic Withdrawal Program allows
you to periodically redeem a portion of your account on a predetermined
monthly, quarterly, semiannual or annual basis. A sufficient number of full and
fractional shares will be redeemed so that the designated payment is made on or
about the 20th day of the month. Shares are tendered for redemption by the
Transfer Agent, as agent for the shareowner, on or about the 15th of the month
at the closing net asset value on the date of redemption. The Systematic
Withdrawal Program also provides for redemptions to be tendered on or about the
10th, 15th or 25th of the month with proceeds to be directed through Automated
Clearing House (ACH) to your bank account. In addition to the limitations
stated below, withdrawals may not be less than $25 and minimum account balance
requirements shall continue to apply.
Shareholders participating in the Systematic Withdrawal Program must own
shares of a Series worth $5,000 or more, as determined by the then current net
asset value per share, and elect to have all dividends reinvested. The purchase
of shares while participating in the withdrawal program will ordinarily be
disadvantageous to the Class A Shares investor since a sales charge will be
paid by the investor on the purchase of Class A Shares at the same time as
other shares are being redeemed. For this reason, investors in Class A Shares
may not participate in an automatic investment program while participating in
the Systematic Withdrawal Program.
Through the Program, Class B shareholders may withdraw up to 1% of their
aggregate net investments (purchases, at initial value, to date net of
non-Program redemptions) each month or up to 3% of their aggregate net
investments each quarter without incurring otherwise applicable contingent
deferred sales charges. Class B shareholders redeeming more shares than the
percentage permitted by the withdrawal program will be subject to any
applicable contingent deferred sales charge on all shares redeemed.
Accordingly, the purchase of Class B Shares will generally not be suitable for
16
<PAGE>
an investor who anticipates withdrawing sums in excess of the above limits
shortly after purchase.
Tax Sheltered Retirement Plans. Shares of the Fund are offered in
connection with the following qualified prototype retirement plans: IRA,
Rollover IRA, SEP-IRA, SIMPLE IRA, SIMPLE 401(k), Profit-Sharing and Money
Purchase Pension Plans which can be adopted by self-employed persons ("Keogh")
and by corporations and 403(b) Retirement Plans. Write or call Equity Planning
at (800) 243-4361 for further information about the plans.
Exchange Privileges
You may exchange shares of one Phoenix Fund for shares of another Phoenix
Fund without paying any fees or sales charges. On exchanges with share classes
that carry a contingent deferred sales charge, the CDSC schedule of the original
shares purchased continues to apply. Shares held in book-entry form may be
exchanged for shares of the same class of other Phoenix Funds, provided the
following conditions are met: (1) the shares that will be acquired in the
exchange (the "Acquired Shares") are available for sale; (2) the Acquired Shares
are the same class as the shares to be surrendered (the "Exchanged Shares"); (3)
the Acquired Shares will be registered to the same shareholder account as the
Exchanged Shares; (4) the account value of the Fund whose shares are to be
acquired must equal or exceed the minimum initial investment amount required by
that Phoenix Fund after the exchange is made; and (5) if you have elected not to
use the telephone exchange privilege (see below), a properly executed exchange
request must be received by the Distributor. Exchanges may be made over the
telephone or in writing and may be made at one time or systematically over a
period of time. Note, each Phoenix Fund has different investment objectives and
policies. You should read the prospectus of the Phoenix Fund into which the
exchange is to be made before making any exchanges. This privilege may be
modified or terminated at any time on 60 days' notice.
Market Timer Restrictions. Because excessive trading can hurt Fund
performance and harm shareholders, the Fund reserves the right to temporarily
or permanently terminate exchange privileges or reject any specific order from
anyone whose transactions seem to follow a timing pattern, including those who
request more than one exchange out of a fund within any 30 day period. The
Distributor has entered into agreements with certain market timer entities
permitting them to exchange their clients' shares by telephone. These
privileges are limited under those agreements. The Distributor has the right to
reject or suspend these privileges upon reasonable notice.
Telephone Exchanges. If permitted in your state and unless you waive this
privilege in writing, you or your broker may sell or exchange your shares over
the phone by calling the Distributor at (800) 243-1574. Reasonable procedures
will be used to confirm that telephone instructions are genuine. In addition to
requiring that the exchange is only made between accounts with identical
registrations, the Distributor may require address or other forms of
identification and will record telephone instructions. All exchanges will be
confirmed in writing to you. If procedures reasonably designed to prevent
unauthorized telephone exchanges are not followed, the Fund and/or Distributor
may be liable for following telephone instructions that prove to be fraudulent.
Broker/dealers other than the Distributor assume the risk of any loss resulting
from any unauthorized telephone exchange instructions from their firm or their
registered representatives. You assume the risk if the Distributor acts upon
unauthorized instructions it reasonably believes to be genuine. During times of
severe economic or market changes, this privilege may be difficult to exercise
or may be temporarily suspended. In such event, an exchange may be effected by
written request by the registered shareowner(s).
NET ASSET VALUE
The net asset value per share of the Fund is determined as of the close of
regular trading of the New York Stock Exchange (the "Exchange") on days when
the Exchange is open for trading. The net asset value per share of the Fund is
determined by adding the values of all securities and other assets of the Fund,
subtracting liabilities, and dividing by the total number of outstanding shares
of the Fund. The total liability allocated to a class, plus that class's
distribution and services fee and any other expenses allocated solely to that
class, are deducted from the proportionate interest of such class in the assets
of the Fund, and the resulting amount of each is divided by the number of
shares of that class outstanding to produce the net asset value per share.
The Fund's investments are valued at market value or, where market
quotations are not available, at fair value as determined in good faith by the
Trustees or their delegates. Foreign and domestic debt securities (other than
short-term investments) are valued on the basis of broker quotations or
valuations provided by a pricing service approved by the Trustees when such
prices are believed to reflect the fair value of such securities. Foreign and
domestic equity securities are valued at the last sale price or, if there has
been no sale that day, at the last bid price, generally. Short-term investments
having a remaining maturity of less than sixty-one days are valued at amortized
cost, which the Trustees have determined approximates market value. For further
information about security valuations, see the Statement of Additional
Information.
HOW TO REDEEM SHARES
You have the right to have the Fund buy back shares at the net asset value
next determined after receipt of a redemption order, and any other required
documentation in proper form, by Phoenix Funds c/o State Street Bank and Trust
Company, P.O. Box 8301, Boston, MA 02266-8301. In the case of a Class B Share
redemption, you will be subject to the applicable deferred sales charge, if
any, for such shares (see "Deferred Sales Charge Alternative--Class B Shares,"
above). Subject to certain restrictions, shares may be redeemed by telephone or
in writing. In addition, shares may be sold through securities dealers, brokers
or agents who may charge customary commissions or fees
17
<PAGE>
for their services. The Fund does not charge any redemption fees. Payment for
shares redeemed is made within seven days, provided that redemption proceeds
will not be disbursed until each check used for purchases of shares has been
cleared for payment by your bank, which may take up to 15 days after receipt of
the check.
The requirements to redeem shares are outlined in the table below.
Additional documentation may be required for redemptions by corporations,
partnerships or other organizations, executors, administrators, trustees,
custodians, guardians, or from IRA's or other retirement plans, or if
redemption is requested by anyone but the shareholder(s) of record. To avoid
delay in redemption or transfer, shareholders having questions about specific
requirements should contact the Fund at (800) 243-1574. Redemption requests
will not be honored until all required documents in proper form have been
received.
How can I sell my Shares?
<TABLE>
<S> <C> <C>
[graphic of telephone] By Phone [bullet] Sales up to $50,000
[bullet] Not available on most retirement accounts
(800) 243-1574 [bullet] Requests received after 4PM will be
executed on the following business day
[graphic of envelope] In Writing [bullet] Letter of instruction from the registered
owner including the fund and account
number and the number of shares or dollar
amount you wish to sell
[bullet] No signature guarantee is required if your
shares are registered individually, jointly, or
as custodian under the Uniform Gifts to
Minors Act or Uniform Transfers to Minors
Act, the proceeds of the redemption do not
exceed $50,000, and the proceeds are
payable to the registered owner(s) at the
address of record
</TABLE>
Shares previously issued in certificate form cannot be redeemed until the
certificated shares have been deposited to your account.
Telephone Redemptions
The Fund and the Transfer Agent will employ reasonable procedures to
confirm that telephone instructions are genuine. Address and bank account
information will be verified, telephone redemption instructions will be
recorded on tape, and all redemptions will be confirmed in writing to you. If
there has been an address change within the past 60 days, a telephone
redemption will not be authorized. To the extent that procedures reasonably
designed to prevent unauthorized telephone redemptions are not followed, the
Fund and/or the Transfer Agent may be liable for following telephone
instructions for redemption transactions that prove to be fraudulent.
Broker/dealers other than Equity Planning have agreed to bear the risk of any
loss resulting from any unauthorized telephone redemption instruction from the
firm or its registered representatives. However, you would bear the risk of
loss resulting from instructions entered by an unauthorized third party that
the Fund and/or the Transfer Agent reasonably believe to be genuine. The
Telephone Redemption Privilege may be modified or terminated at any time on 60
days' notice to shareholders. In addition, during times of drastic economic or
market changes, the Telephone Redemption Privilege may be difficult to exercise
or may be temporarily suspended. In such event, a redemption may be effected by
written request by following the procedure outlined above.
Written Redemptions
If you elect not to use the telephone redemption or telephone exchange
privileges, you must submit your request in writing. If the shares are being
exchanged between accounts that are not identically registered, the signature
on such request must be guaranteed by an eligible guarantor institution as
defined by the Transfer Agent in accordance with its signature guarantee
procedures. Currently, such procedures generally permit guarantees by banks,
broker dealers, credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings associations.
Account Reinstatement Privilege
You have a one time privilege of using redemption proceeds from Class A
and B Shares to purchase Class A Shares of any Phoenix Fund with no sales
charge (at net asset value next determined after the request for reinvestment
is made). For Federal income tax purposes, a redemption and reinvestment will
be treated as a sale and purchase of shares. Special rules may apply in
computing the amount of gain or loss in these situations. (See "Dividends,
Distributions and Taxes" for information on the Federal income tax treatment of
a disposition of shares.) A written request to reinstate your account must be
received by the Transfer Agent within 180 days of the redemption, accompanied
by payment for the shares (not in excess of the redemption value). Class B
shareholders who have had the contingent deferred sales charge waived through
participation in the Systematic Withdrawal Program are not eligible to use the
Reinstatement Privilege.
Redemption of Small Accounts
Due to the relatively high cost of maintaining small accounts, the Fund
reserves the right to redeem, at net asset value, the shares of any shareholder
whose account has a value, due to redemptions, of less than $200. Before the
Fund redeems these shares, the shareholder will be given notice that the value
of the shares in the account is less than the minimum amount and will be
allowed 60 days to make an additional investment in an amount which will
increase the value of the account to at least $200.
DIVIDENDS, DISTRIBUTIONS
AND TAXES
The Fund intends to continue to qualify annually as a regulated investment
company under Subchapter M of the Code and to distribute annually to
shareholders all or substantially all of its net investment income and net
realized capital gains, after utilization of any capital loss carryovers. If
the Fund so qualifies, it generally will not be subject to Federal
18
<PAGE>
income tax on the income it distributes. The discussion below is based on the
assumption that the Fund will continue to qualify as a regulated investment
company.
The Fund intends to make distributions from net investment income
semi-annually, and intends to distribute net realized capital gain, if any, at
least annually.
The Fund will be subject to a nondeductible 4% excise tax if it fails to
meet certain annual distribution requirements. In order to prevent imposition
of the excise tax, it may be necessary for the Fund to make distributions more
frequently than described in the previous paragraph.
Unless a shareholder elects to receive distributions in cash, dividends
and capital gain distributions will be paid in additional shares of the Fund
credited at the net asset value per share on the ex-date. Dividends and
distributions, whether received in cash or in additional shares of the Fund,
generally are subject to Federal income tax and may be subject to state, local
and other taxes. Shareholders will be notified annually about the amount and
character of distributions made to them by the Fund.
Long-term capital gains, if any, distributed to shareholders and which are
designated by the Fund as capital gain distributions, are taxable to
shareholders as long-term capital gain distributions regardless of the length of
time shares of the Fund have been held by the shareholder. Distributions of
short-term capital gains and net investment income, if any, are taxable to
shareholders as ordinary income.
Dividends and distributions generally will be taxable to shareholders in
the taxable year in which they are received. However, dividends and
distributions declared by the Fund in October, November or December of any
calendar year, with a record date in such a month, and paid during the
following January will be treated as if they were paid by the Fund and received
by shareholders on December 31 of the calendar year in which they were
declared.
A redemption or other disposition (including an exchange) of shares of the
Fund generally will result in the recognition of a taxable gain or loss, which
will be a long- or short-term capital gain or loss (assuming the shares were a
capital asset in the hands of the shareholder), depending upon the
shareholder's holding period for his or her shares. In addition, if shares of
the Fund are disposed of at a loss and are replaced (either through purchases
or through reinvestment of dividends) within a period commencing thirty days
before and ending thirty days after the disposition of such shares, the
realized loss will be disallowed and appropriate adjustments to the tax basis
of the new shares will be made.
Investment income received by the Fund from sources within foreign
countries may be subject to foreign income taxes withheld at the source. If the
Fund should have more than 50% of the value of its assets invested in
securities of foreign corporations at the close of its taxable year, which is
the Fund's present intention, the Fund may elect to permit its shareholders to
take, either as a credit or a deduction, their proportionate share of the
foreign income taxes paid.
Investors are urged to consult their attorney or tax adviser regarding
specific questions as to Federal, foreign, state or local taxes.
Important Notice Regarding Taxpayer IRS Certification
Pursuant to IRS regulations, the Fund may be required to withhold 31% of
all reportable payments including any taxable dividends, capital gain
distributions or share redemption proceeds, for any account which does not have
a taxpayer identification number or social security number and certain required
certifications.
The Fund reserves the right to refuse to open an account for any person
failing to provide a taxpayer identification number along with the required
certifications.
The Fund sends to all shareholders, within 31 days after the end of the
calendar year, information which is required by the Internal Revenue Service
for preparing Federal income tax returns. Investors are urged to consult their
attorney or tax adviser regarding specific questions as to Federal, foreign,
state or local taxes.
ADDITIONAL INFORMATION
Organization of the Fund
The Fund was originally incorporated in New York in 1956, and on January
13, 1992, the Fund was reorganized as a Massachusetts business trust. The Fund
has operated as an open-end, diversified management investment company since
May 1960. On June 30, 1993, the Trustees voted to change the name of the Fund
to "Phoenix Worldwide Opportunities Fund" to reflect the purchase of the
Adviser by Phoenix Home Life Mutual Insurance Company and the affiliation with
other Phoenix Funds.
The Declaration of Trust provides that the Trustees are authorized to
create an unlimited number of series and, with respect to each series, to issue
an unlimited number of full and fractional shares of beneficial interest of one
or more classes and to divide or combine the shares into a greater or lesser
number of shares without thereby changing the proportionate beneficial
interests in the series. All shares have equal voting rights, except that only
shares of the respective series or separate classes within a series are
entitled to vote on matters concerning only that series or class. At the date
of this Prospectus, there is only one existing series of the Fund, which has
two classes of shares.
The shares of the Fund, when issued, will be fully paid and non-assessable,
have no preference, preemptive, or similar rights, and will be freely
transferable. There will normally be no meetings of shareholders for the purpose
of electing Trustees unless and until such time as less than a majority of the
Trustees holding office have been elected by shareholders, at which time the
Trustees then in office will call a shareholders' meeting for the election of
Trustees. Shareholders may, in accordance with the Declaration of Trust, as
amended, cause a meeting of shareholders to be held for the purpose of voting on
the removal of Trustees. Meetings of the shareholders may be called upon written
request of shareholders holding in the aggregate not less
19
<PAGE>
than 10% of the outstanding shares having voting rights. Except as set forth
above and subject to the 1940 Act, the Trustees will continue to hold office and
appoint successor Trustees. Shares do not have cumulative voting rights and the
holders of more than 50% of the shares of the Fund voting for the election of
Trustees can elect all of the Trustees of the Trust if they choose to do so and
in such event the holders of the remaining shares would not be able to elect any
Trustees. Shareholders are entitled to redeem their shares as set forth under
"How to Redeem Shares".
The Declaration of Trust establishing the Fund (a copy of which, together
with all amendments thereto, is on file in the office of the Secretary of the
Commonwealth of Massachusetts), provides that the Fund's name refers to the
Trustees under the Declaration of Trust collectively as Trustees, but not as
individuals or personally; and no Trustee, shareholder, officer, employee or
agent of the Fund shall be held to any personal liability, nor shall resort be
had to their private property for the satisfaction of any obligation or claim
of said Fund, but the "Trust Property" only shall be liable.
Registration Statement
This Prospectus omits certain information included in the Statement of
Additional Information and Part C of the Registration Statement filed with the
Securities and Exchange Commission under the Securities Act of 1933 and the
1940 Act. A copy of the Registration Statement may be obtained from the
Securities and Exchange Commission in Washington, D.C.
20
<PAGE>
BACKUP WITHHOLDING INFORMATION
Step 1. Please make sure that the social security number or taxpayer
identification number (TIN) which appears on the Application complies
with the following guidelines:
Account Type Give Social Security Number or Tax Identification Number of:
<TABLE>
<S> <C>
Individual Individual
Joint (or Joint Tenant) Owner who will be paying tax
Uniform Gifts to Minors Minor
Legal Guardian Ward, Minor or Incompetent
Sole Proprietor Owner of Business (also provide owner's name)
Trust, Estate, Pension Plan Trust Trust, Estate, Pension Plan Trust (not personal TIN of fiduciary)
Corporation, Partnership,
Other Organization Corporation, Partnership, Other Organization
Broker/Nominee Broker/Nominee
</TABLE>
Step 2. If you do not have a TIN, you must obtain Form SS-5 (Application for
Social Security Number) or Form SS-4 (Application for Employer
Identification Number) from your local Social Security or IRS office and
apply for one. Write "Applied For" in the space on the application.
Step 3. If you are one of the entities listed below, you are exempt from backup
withholding.
[bullet] A corporation
[bullet] Financial institution
[bullet] Section 501(a) exempt organization (IRA, Corporate Retirement
Plan, 403(b), Keogh)
[bullet] United States or any agency or instrumentality thereof
[bullet] A State, the District of Columbia, a possession of the United
States, or any subdivision or instrumentality thereof
[bullet] International organization or any agency or instrumentality
thereof
[bullet] Registered dealer in securities or commodities registered in
the U.S. or a possession of the U.S.
[bullet] Real estate investment trust
[bullet] Common trust fund operated by a bank under section 584(a)
[bullet] An exempt charitable remainder trust, or a non-exempt trust
described in section 4947(a)(1)
[bullet] Regulated Investment Company
If you are in doubt as to whether you are exempt, please contact the Internal
Revenue Service.
Step 4. IRS Penalties--If you do not supply us with your TIN, you will be
subject to an IRS $50 penalty unless your failure is due to reasonable
cause and not willful neglect. If you fail to report interest,
dividend or patronage dividend income on your federal income tax
return, you will be treated as negligent and subject to an IRS 5%
penalty tax on any resulting underpayment of tax unless there is clear
and convincing evidence to the contrary. If you falsify information on
this form or make any other false statement resulting in no backup
withholding on an account which should be subject to a backup
withholding, you may be subject to an IRS $500 penalty and certain
criminal penalties including fines and imprisonment.
- -----------
This Prospectus sets forth concisely the information about the Phoenix
Worldwide Opportunities Fund (the "Fund") which you should know before
investing. Please read it carefully and retain it for future reference.
The Fund has filed with the Securities and Exchange Commission a Statement of
Additional Information about the Fund, dated October 30, 1997. The Statement
contains more detailed information about the Fund and is incorporated into this
Prospectus by reference. You may obtain a free copy of the Statement by writing
the Fund c/o Phoenix Equity Planning Corporation, 100 Bright Meadow, P.O. Box
2200, Enfield, Connecticut 06083-2200.
Financial information relating to the Trust is contained in the Annual Report
to Shareholders for the year ended June 30, 1997 and is incorporated into the
Statement of Additional Information by reference.
[recycle symbol] Printed on recycled paper using soybean ink
<PAGE>
Phoenix Funds -----------------
PO Box 2200 BULK RATE MAIL
Enfield CT 06083-2200 U.S. POSTAGE
PAID
SPRINGFIELD, MA
PERMIT NO. 444
------------------
[Phoenix logo] PHOENIX
DUFF&PHELPS
PDP 691(10/97)
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
101 Munson Street
Greenfield, MA 01301
Statement of Additional Information
October 30, 1997
This Statement of Additional Information is not a prospectus, but expands
upon and supplements the information contained in the current Prospectus of
Phoenix Worldwide Opportunities Fund (the "Fund"), dated October 30, 1997, and
should be read in conjunction with it. The Fund's Prospectus may be obtained by
calling Phoenix Equity Planning Corporation ("Equity Planning") at (800)
243-4361 or by writing to Equity Planning at 100 Bright Meadow Boulevard, P.O.
Box 2200, Enfield, CT 06083-2200.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
THE FUND (1) .................................. 1
INVESTMENT OBJECTIVE AND POLICIES (6) ......... 1
INVESTMENT RESTRICTIONS (9) .................. 1
PERFORMANCE INFORMATION (6) .................. 4
PORTFOLIO TRANSACTIONS AND BROKERAGE ......... 5
SERVICES OF THE ADVISER (9) .................. 6
NET ASSET VALUE (17) ........................ 7
HOW TO BUY SHARES (11) ........................ 8
INVESTOR ACCOUNT SERVICES (16) ............... 8
REDEMPTION OF SHARES (17) ..................... 9
DIVIDENDS, DISTRIBUTIONS AND TAXES (18) ...... 9
TAX SHELTERED RETIREMENT PLANS ............... 11
THE DISTRIBUTOR (10) ........................ 11
PLANS OF DISTRIBUTION (10) .................. 11
TRUSTEES AND OFFICERS ........................ 13
OTHER INFORMATION (19) ........................ 19
</TABLE>
Numbers appearing in parentheses correspond to related disclosures in the
Fund's Prospectus.
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders: (800) 367-5877
TTY: (800) 243-1926
PDP 691B (10/97)
<PAGE>
THE FUND
The Fund was originally incorporated in New York in 1956, and on January
13, 1992, the Fund was reorganized as a Massachusetts business trust. The Fund
has operated as an open-end, diversified management investment company since
May 1960. On June 30, 1993, the Trustees voted to change the name of the Fund
to "Phoenix Worldwide Opportunities Fund" to reflect the purchase of the
Adviser by Phoenix Home Life Mutual Insurance Company and the affiliation with
other Phoenix Funds.
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is capital appreciation. The Fund's
investment objective is a fundamental policy and may not be changed without
shareholder approval.
Under normal circumstances, at least 65% of the total assets of the Fund
will be invested in the securities of issuers located in at least three
different countries, one of which will be the United States. The Fund will
invest primarily in equity securities (common stocks, preferred stocks,
securities convertible into common stocks, warrants and any rights to purchase
common stocks). The Fund may also invest up to 35% of its assets in
non-convertible fixed-income securities of U.S. and non-U.S. issuers (described
below) when the Adviser has determined that such securities are appropriate for
the achievement of the Fund's investment objective. Because the market value of
fixed-income securities can be expected to vary inversely to changes in
prevailing interest rates, investing in such fixed-income securities can
provide an opportunity for capital appreciation when interest rates are
expected to decline.
The non-convertible fixed-income securities referred to above will consist
of (1) corporate notes, bonds and debentures of U.S. issuers that are rated
high grade (i.e. within the three highest rating categories of Standard &
Poor's or Moody's Investors Service) or, if unrated, are deemed by the Adviser
to be of comparable quality to those securities that are rated high grade, (2)
corporate notes, bonds, debentures and other securities (such as Euro-currency
instruments) of non-U.S. issuers that are rated within the three highest rating
categories of rating services chosen by the Adviser to rate foreign debt
obligations or, if unrated, are deemed by the Adviser to be of comparable
credit quality to rated securities that may be purchased and (3) Treasury
bills, notes and bonds issued by the United States Government or its agencies
or instrumentalities and securities issued by foreign governments and
supranational agencies (such as World Bank).
The Fund may, for daily cash management purposes, invest in the
non-convertible fixed income securities described above or in high quality
money market securities. In addition, the Fund may invest, without limit, in
any combination of the U.S. Government securities and money market instruments
referred to above when, in the opinion of the Adviser, it is determined that a
temporary defensive position is warranted based upon current market conditions.
In such instances, the Fund will not be achieving its stated investment
objective.
The percentage of the Fund's assets invested in particular geographic
sectors will shift from time to time in accordance with the judgment of the
Adviser. The Adviser will advise the Fund with respect to all other investments
for the Fund.
Capital appreciation will more often than not be sought through long-term
holdings but the Fund may attempt to take advantage of apparent short-term
trends, and such operations will occasion more trading, and hence, more than
normal brokerage commissions and other expenses. Investments are selected for
the Fund in such proportions and amounts as deemed advisable, subject to the
investment restrictions set forth herein (see "Investment Restrictions"), in
accordance with the Adviser's judgment of investment opportunities and the
general economic outlook.
INVESTMENT RESTRICTIONS
Fundamental Policies
The following investment restrictions are fundamental policies that cannot
be changed without the approval of the holders of a majority of the Fund's
outstanding voting securities (which means the lesser of (a) 67% of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented or (b) more than 50% of the outstanding shares).
The Fund may not:
1. Borrow money, except from a bank and then only if there is an asset
coverage of at least 300%; provided, however, that the Fund may not purchase
securities while outstanding borrowings exceed 5% of the Fund's total assets.
2. Underwrite the sale of securities of restricted securities.
3. Purchase or sell real estate.
4. Purchase or sell commodities or commodity contracts; provided, however,
that the terms commodities and commodity contracts shall not be deemed to
include (i) forward foreign currency exchange contracts (ii) futures contracts
on foreign currencies, (iii) options on futures contracts or (iv) options on
foreign currencies.
5. Lend money, except in connection with the acquisition of a portion of
an issue of publicly distributed bonds, debentures or other corporate
obligations.
1
<PAGE>
6. Issue senior securities except to the extent that it is permitted (a)
to borrow money from banks pursuant to the Fund's investment restriction
regarding the borrowing of money, and (b) to enter into transactions involving
forward foreign currency exchange contracts, foreign currency futures contracts
and options thereon, and options on foreign currencies as described in the
Fund's Prospectus and this Statement of Additional Information.
7. Invest more than 25% of its total assets in any one industry. For
purposes of this policy, foreign governments and supranational agencies shall
be deemed to be separate industries.
8. Make short sales unless at the time of the sale the Fund owns, or by
virtue of ownership of other securities, has the right to obtain, at least an
equal amount of the securities sold short.
9. Issue bonds, debentures, or senior equity securities.
10. Issue any of its securities other than for cash or securities
(including securities of which the Fund is the issuer), except as a dividend or
distribution or in connection with a reorganization.
11. Purchase securities on margin, except as may be permitted under the
Investment Company Act of 1940 (the "1940 Act"), and except that, for purposes
of this restriction, the deposit or payment of initial or variation margin in
connection with the entry into or use of futures contracts will not be deemed
to be a purchase of securities on margin.
12. Invest in companies for the purpose of exercising control or
management.
13. Invest in securities of other investment companies except to the extent
permitted by the 1940 Act.
Other Policies
The following investment restrictions do not constitute fundamental
policies and may, therefore, be changed without shareholder approval.
The Fund intends to comply with the Statement of Policy on investment
companies approved by certain state securities commissioners. Additional
investment restrictions currently imposed by the Statement of Policy are as
follows: The Fund will not
1. Purchase any securities (excluding government securities) if by reason
thereof more than 5% of the Fund's total assets (taken at current value) would
then be invested in securities of a single issuer.
2. Purchase any securities if, as a result, the Fund would then have more
than 5% of its total assets (taken at current value) invested in securities of
companies (including their predecessors) with less than three years of
operating history.
3. Invest more than 5% of its total assets in puts, calls, straddles,
spreads, and/or any combination thereof; and
4. Invest in interests in oil, gas, or other mineral exploration or
development programs.
5. Invest more than 15% of its net assets in illiquid securities,
comprised of assets which may not be sold or disposed of in the ordinary course
of business within seven days at approximately the value at which the Fund has
valued the investment.
In addition, the Fund has given undertakings to certain state securities
commissioners to the effect that (a) the Fund will not purchase warrants
(except warrants acquired by the Fund in units or attached to securities which
may be deemed to be without value) in amounts in excess of 5% of the Fund's net
assets, and (b) the Fund may purchase put or call options or combinations
thereof written by others, provided the aggregate premiums paid for all such
options held do not exceed 2% of the Fund's net assets.
Writing Covered Call Options
The Fund may write covered call option contracts, which are options on
securities that the Fund owns, if such options are listed on an organized
securities exchange and the Adviser determines that such activity is consistent
with the Fund's investment objective. A call option gives the purchaser of the
option the right to buy the underlying security from the writer at the exercise
price at any time prior to the expiration of the contract, regardless of the
market price of the security during the option period. The premium paid to the
writer is the consideration for undertaking the obligations under the option
contract. The writer forgoes the opportunity to profit from an increase in the
market price of the underlying security above the exercise price except insofar
as the premium represents such a profit. The writing of option contracts is a
highly specialized activity which involves investment techniques and risks
different from those ordinarily associated with investment companies, and the
restrictions listed above would tend to reduce such risks.
Securities for the Fund's portfolio will continue to be bought and sold on
the basis of investment considerations and appropriateness to the fulfillment
of the Fund's investment objective. In order to close out a position, the Fund
will normally make a "closing purchase transaction"--the purchase of a call
option on the same security with the same exercise price and expiration date as
the call option which it has previously written on any particular security.
When a security is sold from the Fund's portfolio, the Fund will effect a
closing purchase transaction so as to close out any existing call option on
that security.
2
<PAGE>
Forward Foreign Currency Exchange Contracts
In order to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward foreign currency exchange contracts
("forward currency contracts") for the purchase or sale of a specified currency
at a specified future date. Such contracts may involve the purchase or sale of
a foreign currency against the U.S. dollar or may involve two foreign
currencies. The Fund may enter into forward currency contracts either with
respect to specific transactions or with respect to the Fund's portfolio
positions.
Futures Contracts on Foreign Currencies and Options on Futures Contracts
The Fund may engage in futures contracts on foreign currencies and options
on these futures transactions as a hedge against changes in the value of the
currencies to which the Fund is subject or to which the Fund expects to be
subject in connection with future purchases, in accordance with the rules and
regulations of the Commodity Futures Trading Commission (the "CFTC"). The Fund
also may engage in such transactions when they are economically appropriate for
the reduction of risks inherent in the ongoing management of the Fund.
The Fund may buy and sell futures contracts on foreign currencies and
groups of foreign currencies. The Fund will engage in transactions in only
those futures contracts and options thereon that are traded on a commodities
exchange or a board of trade. A "sale" of a futures contract means the
assumption of a contractual obligation to deliver the specified amount of
foreign currency at a specified price in a specified future month. A "purchase"
of a futures contract means the assumption of a contractual obligation to
acquire the currency called for by the contract at a specified price in a
specified future month. At the time a futures contract is purchased or sold,
the Fund must allocate cash or securities as a deposit payment (initial
margin). Thereafter, the futures contract is valued daily and the payment of
"variation margin" may be required, resulting in the Fund's providing or
receiving cash that reflects any decline or increase in the contract's value, a
process known as "marking to market".
Options on Foreign Currencies
The Fund may purchase and write put and call options on foreign currencies
traded on securities exchanges or boards of trade (foreign and domestic) for
hedging purposes in a manner similar to that in which forward currency
contracts and futures contracts on foreign currencies will be employed. Options
on foreign currencies are similar to options on stock, except that the Fund has
the right to take or make delivery of a specified amount of foreign currency,
rather than stock.
The Fund may purchase and write options to hedge the Fund's portfolio
securities denominated in foreign currencies. If there is a decline in the
dollar value of a foreign currency in which the Fund's portfolio securities are
denominated, the dollar value of such securities will decline even though
foreign currency value remains the same. See "Special Considerations and Risk
Factors." To hedge against the decline of the foreign currency, the Fund may
purchase put options on such foreign currency. If the value of the foreign
currency declines, the gain realized on the put option would offset, in whole
or in part, the adverse effect such decline would have on the value of the
portfolio securities. Alternatively, the Fund may write a call option on the
foreign currency. If the value of the foreign currency declines, the option
would not be exercised and the decline in the value of the portfolio securities
denominated in such foreign currency would be offset in part by the premium the
Fund received for the option.
If, on the other hand, the Adviser anticipates purchasing a foreign
security and also anticipates a rise in the value of such foreign currency
(thereby increasing the cost of such security), the Fund may purchase call
options on the foreign currency. The purchase of such options could offset, at
least partially, the effects of the adverse movements of the exchange rates.
Alternatively, the Fund could write a put option on the currency and, if the
exchange rates move as anticipated, the option would expire unexercised.
Segregated Accounts
At the time of purchase of a futures contract, option on futures contract
or forward foreign currency exchange contract, any asset, including equity
securities and non-investment grade debt so long as the asset is liquid,
unencumbered and marked to market daily equal to the contract's market value
minus initial margin deposit will be deposited in a pledged account with the
Fund's custodian bank to fully collateralize the position.
Other Policies
The Fund is authorized to invest in the securities of other investment
companies subject to the limitations contained in the 1940 Act. In certain
countries, investments by the Fund may only be made through investments in
other investment companies that, in turn, are authorized to invest in the
securities that are issued in such countries. Investors should recognize that
the Fund's purchase of the securities of such other investment companies
results in the layering of expenses such that investors indirectly bear a
proportionate part of the expenses for such investment companies including
operating costs and investment advisory and administrative fees.
Special Considerations and Risk Factors
Investing in the securities of foreign companies involves special risks
and considerations not typically associated with investing in U.S. companies.
These include: differences in accounting, auditing and financial reporting
standards, generally higher commission rates on foreign portfolio transactions,
the possibility of expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations, political instability which could
affect U.S. investments in foreign countries, and
3
<PAGE>
potential restrictions on the flow of international capital. Additionally,
dividends payable on foreign securities may be subject to foreign taxes
withheld prior to distribution. Foreign securities often trade with less
frequency and volume than domestic securities and therefore may exhibit greater
price volatility, and changes in foreign exchange rates will affect the value
of those securities which are denominated or quoted in securities which are
denominated or quoted in currencies other than the U.S. dollar. Many of the
foreign securities held by the Fund will not be registered with, nor the
issuers thereof be subject to the reporting requirements of, the U.S.
Securities and Exchange Commission. Accordingly, there may be less publicly
available information about the securities and about the foreign company or
government issuing them than is available about a domestic company or
government entity. Moreover, individual foreign economies may differ favorably
or unfavorably for the United States economy in such respects as growth of
Gross National Product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.
The Fund's use of forward currency contracts involves certain investment
risks and transaction costs to which it might not otherwise be subject. These
include: (1) the Adviser may not always be able to accurately predict movements
within currency markets, (2) the skills and techniques needed to use forward
currency contracts are different from those needed to select the securities in
which the Fund invests and (3) there is no assurance that a liquid secondary
market will exist that would enable the Adviser to "close out" existing forward
contracts when doing so is desirable. The Fund's successful use of forward
currency contracts, options on foreign currencies, futures contracts on foreign
currencies and options on such contracts depends upon the Adviser's ability to
predict the direction of the market and political conditions, which require
different skills and techniques than predicting changes in the securities
markets generally. For instance, if the value of the securities being hedged
moves in a favorable direction, the advantage to the Fund would be wholly or
partially offset by a loss in the forward contracts or futures contracts.
Further, if the value of the securities being hedged does not change, the
Fund's net income would be less than if the Fund had not hedged since there are
transaction costs associated with the use of these investment practices.
These practices are subject to various additional risks. The correlation
between movements in the price of options and futures contracts and the price
of the currencies being hedged is imperfect. The use of these instruments will
hedge only the currency risks associated with investments in foreign currency
advances before it invests in securities denominated in such currency and the
currency market declines, the Fund might incur a loss on the futures contract.
The Fund's ability to establish and maintain positions will depend on market
liquidity. The ability of the Fund to close out a futures position or an option
depends upon a liquid secondary market. There is no assurance that liquid
secondary markets will exist for any particular futures contract or option at
any particular time.
The Fund may invest up to 5% of its net assets in fixed income securities
rated below investment grade (commonly referred to as "junk bonds"). Fixed
income securities rated below investment grade are deemed to be predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligations. Fixed income
securities rated below investment grade may involve a substantial risk of
default or may be in default. Changes in economic conditions or developments
regarding the individual issuer are more likely to cause price volatility and
weaken the capacity of the issuers of such securities to make principal and
interest payments than is the case for higher grade debt securities. An
economic downturn affecting the issuer may result in an increased incidence of
default and a decline in prices of the issuer's lower-rated securities. The
market for fixed income securities rated below investment grade may be thinner
and less active than for higher-rated securities. The secondary market in which
fixed income securities rated below investment grade are traded is generally
less liquid than the market for higher grade debt securities.
PERFORMANCE INFORMATION
The Fund may, from time to time, include its total return in
advertisements, sales literature or reports to shareholders or prospective
investors. Performance information in advertisements and sales literature may
be expressed as a yield of a class of shares and as a total return of a class
of shares.
Standardized quotations of average annual total return for Class A or
Class B Shares will be expressed in terms of the average annual compounded rate
of return for a hypothetical investment in either Class A or Class B Shares
over periods of 1, 5 and 10 years or up to the life of the class of shares),
calculated for each class separately pursuant to the following formula: P(1+T)n
= ERV (where P = a hypothetical initial payment of $1,000, T = the average
annual total return, n = the number of years, and ERV = the ending redeemable
value of a hypothetical $1,000 payment made at the beginning of the period).
All total return figures reflect the deduction of a proportional share of each
Class's expenses (on an annual basis), deduction of the maximum initial sales
load in the case of Class A Shares and the maximum contingent deferred sales
charge applicable to a complete redemption of the investment in the case of
Class B Shares, and assume that all dividends and distributions on Class A and
Class B Shares are reinvested when paid.
Performance information for the Fund may be compared, in reports and
promotional literature, to: (i) the EAFE (Europe, Australia, and Far East)
Index, the MSCI World (Net) Index, the Europac Index, or other unmanaged
indices so that investors may compare the Fund's results with those of a group
of unmanaged securities widely regarded by investors as representative of the
securities markets in general; (ii) other groups of mutual funds tracked by
Lipper Analytical Services, Inc., a widely used independent research firm which
ranks mutual funds by overall performance, investment objectives, and assets,
or tracked by other services, companies, publications,
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or persons who rate or rank mutual funds on overall performance or other
criteria; and (iii) the Consumer Price Index (measure for inflation) to assess
the real rate of return from an investment in the Fund. Unmanaged indices may
assume the reinvestment of dividends but generally do not reflect deductions
for administrative and management costs and expenses.
The Fund may from time to time include in advertisements containing total
return the ranking of those performance figures relative to such figures for
groups of mutual funds having similar investment objectives as categorized by
ranking services such as Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc., Weisenberger Financial Services, Inc. and Morningstar, Inc.
Additionally, the Fund may compare its performance results to other investment
or savings vehicles (such as certificates of deposit) and may refer to results
published in various publications such as Changing Times, Forbes, Fortune,
Money, Barrons, Business Week, Investor's Daily, Stanger's Mutual Fund Monitor,
The Stanger Register, Stanger's Investment Adviser, The Wall Street Journal,
The New York Times, Consumer Reports, Registered Representative, Financial
Planning, Financial Services Weekly, Financial World, U.S. News and World
Report, Standard & Poor's The Outlook, and Personal Investor. The Fund may from
time to time illustrate the benefits of tax deferral by comparing taxable
investments to investments made through tax-deferred retirement plans. The
total return may also be used to compare the performance of the Fund against
certain widely acknowledged outside standards or indices for stock and bond
market performance, such as the Standard & Poor's 500 Composite Stock Price
Index (the "S&P 500"), Dow Jones Industrial Average, Europe Australia Far East
Index (EAFE), Morgan Stanley Capital International World (net) Index, Consumer
Price Index, Lehman Brothers Corporate Index and Lehman Brothers T-Bond Index.
Advertisements, sales literature and other communications may contain
information about the Fund and Adviser's current investment strategies and
management style. Current strategies and style may change to allow the Fund to
respond quickly to changing market and economic conditions. From time to time
the Fund may include specific portfolio holdings or industries, in such
communications. To illustrate components of overall performance, the Fund may
separate its cumulative and average annual returns into income and capital
gains components; or cite separately as a return figure the equity or bond
portion of the Fund's portfolio; or compare the Fund's equity or bond return
figures to well-known indices of market performance, including, but not limited
to: the S&P 500, Dow Jones Industrial Average, CS First Boston High Yield Index
and Salomon Brothers Corporate Bond and Government Bond Indices.
For the 1, 5 and 10 year periods ended June 30, 1997, the average annual
total return of the Class A Shares was 8.05%, 14.68% and 6.08%, respectively.
For the one year ended June 30, 1997 and, since inception, July 15, 1994 for
Class B Shares, the average annual total return was 8.46% and 11.30%,
respectively. Performance information reflects only the performance of a
hypothetical investment in each class during the particular time period on
which the calculations are based. Performance information should be considered
in light of the Fund's investment objectives and policies, characteristics and
quality of the portfolio, and the market condition during the given time
period, and should not be considered as a representation of what may be
achieved in the future.
The Fund may also compute aggregate total return for specified periods
based on a hypothetical Class A or Class B account with an assumed initial
investment of $10,000. The aggregate total return is determined by dividing the
net asset value of this account at the end of the specified period by the value
of the initial investment and is expressed as a percentage. Calculation of
aggregate total return reflects payment of the Class A Shares's maximum sales
charge of 4.75% and assumes reinvestment of all income dividends and capital
gain distributions during the period. Based on the foregoing, the Class A
Share's aggregate total return quotation for the period commencing May 13, 1960
and ending June 30, 1997 was 2,294.56%.
The Fund also may quote annual, average annual and annualized total return
and aggregate total return performance data, for both classes of shares of the
Fund, both as a percentage and as a dollar amount based on a hypothetical
$10,000 investment for various periods other than those noted above. Such data
will be computed as described above, except that (1) the rates of return
calculated will not be average annual rates, but rather, actual annual,
annualized or aggregate rates of return and (2) the maximum applicable sales
charge will not be included with respect to annual, annualized or aggregate
rate of return calculations.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Adviser places orders for the purchase and sale of securities,
supervises their execution and negotiates brokerage commissions on behalf of
the Fund. It is the practice of the Adviser to seek the best prices and
execution of orders and to negotiate brokerage commissions which in its opinion
are reasonable in relation to the value of the brokerage services provided by
the executing broker. Brokers who have executed orders for the Fund are asked
to quote a fair commission for their services. If the execution is satisfactory
and if the requested rate approximates rates currently being quoted by the
other brokers selected by the Adviser, the rate is deemed by the Adviser to be
reasonable. Brokers may ask for higher rates of commission if all or a portion
of the securities involved in the transaction are positioned by the broker, if
the broker believes it has brought the Fund an unusually favorable trading
opportunity, or if the broker regards its research services as being of
exceptional value. Payment of such commissions is authorized by the Adviser
after the transaction has been consummated. If the Adviser more than
occasionally differs with the broker's appraisal of opportunity or value, the
broker would not be selected to execute trades in the future.
The Adviser believes that the Fund benefits with a securities industry
comprised of many diverse firms and that the long-term interests of
shareholders of the Fund are best served by their brokerage policies which
include paying a fair commission rather than seeking
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to exploit their leverage to force the lowest possible commission rate. The
primary factors considered in determining the firms to which brokerage orders
are given are the Adviser's appraisal of: the firm's ability to execute the
order in the desired manner, the value of research services provided by the
firm, and the firm's attitudes toward and interest in mutual funds in general
including those managed and sponsored by the Adviser. The Adviser does not
offer or promise to any broker an amount or percentage of brokerage commissions
as an inducement or reward for the sale of shares of the Fund. Over-the-counter
purchases and sales are transacted directly with principal market-makers except
in those circumstances where, in the opinion of the Adviser, better prices and
executions are available elsewhere. In the over-the-counter market, securities
are usually traded on a "net" basis with dealers acting as principal for their
own accounts without a stated commission, although the price of the security
usually contains a profit to the dealer. The Fund also expects that securities
will be purchased at times in underwritten offerings where the price includes a
fixed amount of compensation, usually referred to as the underwriter's
concession or discount. The foregoing discussion does not relate to
transactions effected on foreign securities exchanges which do not permit the
negotiation of brokerage commissions and where the Adviser would, under the
circumstances, seek to obtain best price and execution on orders for the Fund.
In general terms, the nature of research services provided by brokers
encompasses statistical and background information, and forecasts and
interpretations with respect to U.S. and foreign economies, U.S. and foreign
money markets, fixed income markets and equity markets, specific industry
groups, and individual issues. Research services will vary from firm to firm,
with broadest coverage generally from the large full-line firms. Smaller firms
in general tend to provide information and interpretations on a smaller scale,
frequently with a regional emphasis. In addition, several firms monitor
Federal, state, local, and foreign political developments. Many of the brokers
also provide access to outside consultants. The outside research assistance is
particularly useful to the Adviser's staff since the brokers, as a group, tend
to monitor a broader universe of securities and other matters than the
Adviser's staff can follow. In addition, it provides the Adviser with a diverse
perspective on financial markets. Research and investment information is
provided by these and other brokers at no cost to the Adviser and is available
for the benefit of other accounts advised by the Adviser and its affiliates and
not all of the information will be used in connection with the Fund. While this
information may be useful in varying degrees and may tend to reduce the
Adviser's expenses, it is not possible to estimate its value and in the opinion
of the Adviser it does not reduce the Adviser's expenses in a determinable
amount. The extent to which the Adviser makes use of statistical, research and
other services furnished by brokers is considered by the Adviser in the
allocation of brokerage business but there is no formula by which such business
is allocated. The Adviser does so in accordance with its judgment of the best
interests of the Fund and its shareholders.
The Fund has adopted a policy and procedures governing the execution of
aggregated advisory client orders ("bunching procedures") in an attempt to
lower commission costs on a per-share and per-dollar basis. According to the
bunching procedures, the Adviser shall aggregate transactions unless it
believes in its sole discretion that such aggregation is inconsistent with its
duty to seek best execution (which shall include the duty to seek best price)
for the Fund. No advisory account of the Adviser is to be favored over any
other account and each account that participates in an aggregated order is
expected to participate at the average share price for all transactions of the
Adviser in that security on a given business day, with all transaction costs
shared pro rata based on the Fund's participation in the transaction. If the
aggregated order is filled in its entirety, it shall be allocated among the
Adviser's accounts in accordance with the allocation order, and if the order is
partially filled, it shall be allocated pro rata based on the allocation order.
Notwithstanding the foregoing, the order may be allocated on a basis different
from that specified in the allocation order if all accounts of the Adviser
whose orders are allocated receive fair and equitable treatment and the reason
for such different allocation is explained in writing and is approved in
writing by the Adviser's compliance officer as soon as practicable after the
opening of the markets on the trading day following the day on which the order
is executed. If an aggregated order is partially filled and allocated on a
basis different from that specified in the allocation order, no account that is
benefited by such different allocation may intentionally and knowingly effect
any purchase or sale for a reasonable period following the execution of the
aggregated order that would result in it receiving or selling more shares than
the amount of shares it would have received or sold had the aggregated order
been completely filled. The Trustees will annually review these procedures or
as frequently as shall appear appropriate.
During the fiscal years ended June 30, 1995, 1996, and 1997, brokerage
commissions paid by the Fund totalled $1,792,000, $1,279,610, and $1,136,406,
respectively. Brokerage commissions of $909,125 were paid during the last fiscal
year on portfolio transactions aggregating $371,554,512 and executed by brokers
who provided research and other statistical and factual information.
SERVICES OF THE ADVISER
The Adviser provides certain services and facilities required to carry on
the day-to-day operations of the Fund (for which it receives a management fee)
other than the costs of printing and mailing proxy materials, reports and
notices to shareholders; outside legal and auditing accounting services,
regulatory filing fees and expenses of printing the Fund's registration
statements (but the Distributor purchases such copies of the Fund's
prospectuses and reports and communication to shareholders as it may require
for sales purposes), insurance expense, association membership dues, brokerage
fees, and taxes.
The Adviser is a subsidiary of Phoenix Duff & Phelps Corporation whose
majority shareholder is Phoenix Home Life Mutual Insurance Company ("Phoenix
Home Life"). Phoenix Home Life's principal place of business is located at One
American Row,
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<PAGE>
Hartford, Connecticut, where it is engaged in the insurance and investment
business. The Adviser also serves as investment adviser to Phoenix Multi-Sector
Short Term Fund, Phoenix California Tax Exempt Bonds, Inc., Phoenix Income and
Growth Fund, Phoenix Multi-Sector Fixed Income Fund, Inc. and Phoenix Equity
Opportunities Fund of the Phoenix Strategic Equity Series Fund. The Adviser
currently has approximately $1.7 billion in assets under management. The
Adviser has acted as an investment adviser for over sixty years.
The current Management Agreement was approved by the Trustees of the Fund
on March 16, 1993 and by the shareholders of the Fund on May 7, 1993. The
Management Agreement became effective on May 14, 1993, and it will continue in
effect until lapsed or terminated. The Management Agreement will continue in
effect from year to year if specifically approved annually by a majority of the
Trustees who are not interested persons of the parties thereto, as defined in
the 1940 Act, and by either (a) the Trustees of the Fund or (b) the vote of a
majority of the outstanding voting securities of the Fund (as defined in the
1940 Act). The Agreement may be terminated without penalty at any time by the
Trustees or by a vote of a majority of the outstanding voting securities of the
Fund or by the Adviser upon 60 days' written notice and will automatically
terminate in the event of its "assignment" as defined in Section (2)(a)(4) of
the 1940 Act.
The Management Agreement provides that the Adviser is not liable for any
act or omission in the course of, or in connection with, rendering services
under the Agreement in the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties under the Agreement.
The Agreement permits the Adviser to render services to others and to engage in
other activities.
As compensation for its services, the Adviser receives a fee, which is
accrued daily against the value of the Fund's net assets and is paid by the
Fund monthly. The fee is computed at an annual rate of 0.75% of the Fund's
average daily net assets of up to $1 billion, 0.70% of the Fund's average daily
net assets from $1 billion to $2 billion, and 0.65% of the Fund's average daily
net assets in excess of $2 billion. Total management fees for the fiscal years
ended June 30, 1995, 1996, and 1997 amounted to $972,771, $1,037,386, and
$1,137,290, respectively.
The Adviser makes its personnel available to serve as officers and
"interested" Trustees of the Fund. The Fund has not directly compensated any of
its officers or Trustees for services in such capacities except to pay fees to
the Trustees who are not otherwise affiliated with the Fund. The Fund
reimburses all Trustees for their out-of-pocket expenses. The Trustees of the
Fund are not prohibited from authorizing the payment of salaries to the
officers pursuant to the Management Agreement, including out-of-pocket
expenses, at some future time.
In addition to the management fee, expenses paid by the Fund include: fees
of Trustees who are not compensated by the Adviser, interest charges, taxes,
fees and commissions of every kind, including brokerage fees, expenses of
issuance, repurchase or redemption of shares, expenses of registering or
qualifying shares for sale (including the printing and filing of the Fund's
registration statements, reports and prospectuses excluding those copies used
for sales purposes which the Distributor purchases at printer's over-run cost),
accounting services fees, insurance expenses, association membership dues, all
charges of custodians, transfer agents, registrars, auditors and legal counsel,
expenses of preparing, printing and distributing all proxy material, reports
and notices to shareholders, and, all costs incident to the Fund's existence as
a Massachusetts business trust.
The Adviser has agreed, under the terms of the Management Agreement, to
reimburse the Fund to the extent that, in any fiscal year, aggregate annual
expenses of the Fund, exclusive of taxes, interest, brokerage fees, payments
made pursuant to a Rule 12b-1 distribution plan, and extraordinary charges such
as litigation costs, exceed the most restrictive expense limitations imposed by
any state in which the Fund's shares are qualified for sale. Currently, the
most restrictive expense limitation currently applicable to the Fund, which
provides that aggregate annual expenses of an investment company (which
excludes interest, taxes, certain annual distribution plan expenses, litigation
costs, and capital items such as brokerage costs) shall not normally exceed
2.5% of the first $30,000,000 of the Fund's average net assets, 2% of the next
$70,000,000 of the Fund's average net assets, and 1.5% of the remaining average
net assets of the investment company for any fiscal year. To the extent that
the Fund's expenses exceed this limitation, the Adviser would be required to
reduce or rebate its management fee. The Adviser would not be required to
absorb any other Fund expenses in excess of its fees. See the "Fund Expenses"
Table in the Fund's current Prospectus for further information.
NET ASSET VALUE
The net asset value per share of the Fund is determined as of the close of
regular trading of the New York Stock Exchange (the "Exchange") on days when
the Exchange is open for trading. The Exchange will be closed on the following
observed national holidays: New Year's Day, Martin Luther King Day, President's
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day. Since the Fund does not price securities on weekends or
United States national holidays, the net asset value of the Fund's foreign
assets may be significantly affected on days when the investor has no access to
the Fund. The net asset value per share of the Fund is determined by adding the
values of all securities and other assets of the Fund, subtracting liabilities,
and dividing by the total number of outstanding shares of the Fund. Assets and
liabilities are determined in accordance with generally accepted accounting
principles and applicable rules and regulations of the Securities and Exchange
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Commission. The total liability allocated to a class, plus that class's
distribution fee and any other expenses allocated solely to that class, are
deducted from the proportionate interest of such class in the assets of the
Fund, and the resulting amount of each is divided by the number of shares of
that class outstanding to produce the net asset value per share.
A security that is listed or traded on more than one exchange is valued at
the quotation on the exchange determined to be the primary exchange for such
security by the Directors or their delegates. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world,
the calculation of net asset value may not take place for the Fund which
invests in foreign securities contemporaneously with the determination of the
prices of the majority of the portfolio securities of the Fund. All assets and
liabilities initially expressed in foreign currency values will be converted
into United States dollar values at the mean between the bid and ask quotations
of such currencies against United States dollars as last quoted by any
recognized dealer. If an event were to occur after the value of an investment
was so established but before the net asset value per share was determined,
which was likely to materially change the net asset value, then the instrument
would be valued using fair value considerations by the Directors or their
delegates. If at any time the Fund has investments where market quotations are
not readily available, such investments are valued at the fair value thereof as
determined in good faith by the Directors although the actual calculations may
be made by persons acting pursuant to the direction of the Directors.
HOW TO BUY SHARES
The minimum initial investment is $500 and the minimum subsequent
investment is $25. However, both the minimum initial and subsequent investment
amounts are $25 for investments pursuant to the "Investo-Matic" plan, a bank
draft investing program administered by Distributor, or pursuant to the
Systematic Exchange privilege or for an individual retirement account (IRA). In
addition, there are no subsequent investment minimum amounts in connection with
the reinvestment of dividend or capital gain distributions. Completed
applications for the purchase of shares should be mailed to: Phoenix Funds, c/o
State Street Bank and Trust Company, P.O. Box 8301, Boston, MA 02266-8301. See
the Fund's current Prospectus for more information.
INVESTOR ACCOUNT SERVICES
The Fund offers combination purchase privileges, letters of intent,
accumulation plans, withdrawal plans and reinvestment and exchange privileges.
Certain privileges may not be available in connection with all classes. In most
cases, changes to account services may be accomplished over the phone.
Inquiries regarding policies and procedures relating to shareholder account
services should be directed to Shareholder Services at (800) 243-1574.
Exchanges. Under certain circumstances, shares of any Phoenix Fund may be
exchanged for shares of the same class on the basis of the relative net asset
values per share at the time of the exchange. Exchanges are subject to the
minimum initial investment requirement of the designated Series, Fund, or
Portfolio, except if made in connection with the Systematic Exchange privilege.
Shareholders may exchange shares held in book-entry form for an equivalent
number (value) of the same class of shares of any other Phoenix Fund, if
currently offered. On exchanges with share classes that carry a contingent
deferred sales charge, the CDSC schedule of the original shares purchased
continues to apply. The exchange of shares is treated as a sale and purchase
for federal income tax purposes (see also "Dividends, Distributions and
Taxes").
Systematic Exchanges. If the conditions above have been met, you or your
broker may, by telephone or written notice, elect to have shares exchanged for
the same class of shares of another Phoenix Fund automatically on a monthly,
quarterly, semi-annual or annual basis or may cancel this privilege at any
time. If you maintain an account balance of at least $5,000, or $2,000 for tax
qualified retirement benefit plans (calculated on the basis of the net asset
value of the shares held in a single account), you may direct that shares be
automatically exchanged at predetermined intervals for shares of the same class
of another Phoenix Fund. This requirement does not apply to Phoenix "Self
Security" program participants. Systematic exchanges will be executed upon the
close of business on the 10th day of each month or the next succeeding business
day. Systematic exchange forms are available from the Distributor. Exchanges
will be based upon each Fund's net asset value per share next computed
following receipt of a properly executed exchange request, without sales
charge. On Class B Share exchanges, the CDSC schedule of the original shares
purchased continues to apply.
Dividend Reinvestment Across Accounts. If you maintain an account balance
of at least $5,000, or $2,000 for tax qualified retirement benefit plans
(calculated on the basis of the net asset value of the shares held in a single
account), you may direct that any dividends and distributions paid with respect
to shares in that account be automatically reinvested in a single account of
one of the other Phoenix Funds at net asset value. You should obtain a current
prospectus and consider the objectives and policies of each Fund carefully
before directing dividends and distributions to another Fund. Reinvestment
election forms and prospectuses are available from Equity Planning.
Distributions may also be mailed to a second payee and/or address. Requests for
directing distributions to an alternate payee must be made in writing with a
signature guarantee of the registered owner(s). To be effective with respect to
a particular dividend or distribution, notification of the new distribution
option must be received by the Transfer Agent at least three days prior to the
record date of such dividend or distribution. If all shares in your account are
repurchased or redeemed or transferred between the record date and the payment
date of a dividend or distribution, you will receive cash for the dividend or
distribution regardless of the distribution option selected.
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REDEMPTION OF SHARES
Under the 1940 Act, payment for shares redeemed must ordinarily be made
within seven days after tender. The right to redeem shares may be suspended and
payment therefor postponed during periods when the New York Stock Exchange is
closed, other than customary weekend and holiday closings, or if permitted by
rules of the Securities and Exchange Commission, during periods when trading on
the Exchange is restricted or during any emergency which makes it impracticable
for the Fund to dispose of its securities or to determine fairly the value of
its net assets or during any other period permitted by order of the Securities
and Exchange Commission for the protection of investors. Furthermore, the
Transfer Agent will not mail redemption proceeds until checks received for
shares purchased have cleared, which may take up to 15 days after receipt of
the check. See the Fund's current Prospectus for further information.
Redemptions by Class B shareholders will be subject to the applicable
deferred sales charge, if any.
Each shareholder account in the Fund which has been in existence for at
least one year and has a value of less than $200 may be redeemed upon the
giving of not less than 60 days written notice to the shareholder mailed to the
address of record. During the 60 day period the shareholder has the right to
add to the account to bring its value to $200 or more. See the Fund's current
Prospectus for more information.
Telephone Redemptions
Shareholders may redeem by telephone up to $50,000 worth of their shares
held in book-entry form. See the Fund's current Prospectus for additional
information.
Reinvestment Privilege
Shareholders who may have overlooked features of their investment at the
time they redeemed have the privilege of reinvesting their investment at net
asset value. See the Fund's current Prospectus for more information and
conditions attached to this privilege.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund intends to remain qualified as a regulated investment company
under certain provisions of the Code. Under such provisions, the Fund will not
be subject to Federal income tax on such part of its ordinary income and net
realized capital gains which it distributes to shareholders provided it meets
certain distribution requirements. To qualify for treatment as a regulated
investment company, the Fund generally must, among other things (a) derive in
each taxable year at least 90% of its gross income from (i) dividends, (ii)
interest, (iii) payments with respect to securities loans, (iv) gains from the
sale or other disposition of stock or securities or foreign currencies, and (v)
other income derived with respect to its business of investing in such stock,
securities or currencies; and (b) meet certain diversification requirements
imposed under the Code at the end of each quarter of the taxable year.
Dividends paid by the Fund will be taxable to shareholders as ordinary
income, except for (a) such portion as may exceed a shareholder's ratable share
of the Fund's earnings and profits, which excess will be applied against and
reduce the shareholder's cost or other tax basis for his shares, and (b)
amounts representing a distribution of net capital gains, if any, which are
designated by the Fund as capital gain distributions. If the amount described
in (a) above exceeds the shareholder's tax basis for his shares, the excess
over basis will be treated as gain from the sale or exchange of such shares.
The excess of any net long-term capital gains over net short-term capital
losses recognized and distributed by the Fund and designated by the Fund as a
capital gain distribution, will be taxable to shareholders as a long-term
capital gain regardless of the length of time a particular shareholder may have
held his shares in the Fund. Dividends and distributions are taxable as
described, whether received in cash or reinvested in additional shares of the
Fund.
Under certain circumstances, the sales charge incurred in acquiring shares
of the Fund may not be taken in account in determining the gain or loss on the
disposition of those shares. This rule applies where shares of the Fund are
disposed of within 90 days after the date on which they were acquired and new
shares of a regulated investment company are acquired without a sales charge or
at a reduced sales charge. In that case, the gain or loss realized on the
disposition will be determined by excluding from the tax basis of the shares
disposed all or a portion of the sales charge incurred in acquiring those
shares. This exclusion applies to the extent that the otherwise applicable
sales charge with respect to the newly acquired shares is reduced as a result
of the shareholder having incurred a sales charge initially. The portion of the
sales charge affected by this rule will be treated as a sales charge paid for
the new shares.
Distributions by the Fund reduce the net asset value of the Fund's shares.
Should a distribution reduce the net asset value of a share below a
shareholder's cost for the share, such a distribution nevertheless generally
would be taxable to the shareholder as ordinary income or long-term capital
gain, even though, from an investment standpoint, it may constitute a partial
return of capital. In particular, investors should be careful to consider the
tax implications of buying shares just prior to the declaration of a dividend
or distribution, but the dividend or distribution generally would be taxable to
them.
Some shareholders may be subject to withholding of Federal income tax on
dividends and redemption payments from the Fund ("backup withholding") at the
rate of 31%. Corporate shareholders and certain other shareholders specified in
the Code generally
9
<PAGE>
are exempt from such backup withholding. Generally, shareholders subject to
backup withholding will be (i) those for whom a certified taxpayer
identification number is not on file with the Fund, (ii) those about whom
notification has been received (either by the shareholder or the Fund) from the
Internal Revenue Service that they are subject to backup withholding or (iii)
those who, to the Fund's knowledge, have furnished an incorrect taxpayer
identification number. Generally, to avoid backup withholding, an investor
must, at the time an account is opened, certify under penalties of perjury that
the taxpayer identification number furnished is correct and that he or she is
not subject to backup withholding.
It is anticipated that the Fund will receive dividends from its
investments, in which case dividends paid by the Fund from net investment
income may qualify for the 70% corporate dividends received deduction, but only
to the extent that such income is derived from dividends of domestic
corporations.
The Code imposes a 4% nondeductible excise tax on a regulated investment
company, such as the Fund, if it does not distribute to its shareholders during
the calendar year an amount equal to at least 98% of the Fund's capital gains
net income for the 12-month period ending on October 31 of each calendar year.
In addition, an amount equal to any undistributed investment company taxable
income or capital gain net income from the previous calendar year must also be
distributed to avoid the excise tax. The excise tax is imposed on the amount by
which the regulated investment company does not meet the foregoing distribution
requirements. If the Fund has taxable income that would be subject to the
excise tax, the Fund generally intends to distribute such income so as to avoid
payment of the excise tax.
Under another provision of the Code, any dividend declared by the Fund to
shareholders of record in October, November, and December of any calendar year
will be deemed to have been received by, and will be taxable to shareholders as
of December 31 of such calendar year, provided that the dividend is actually
paid by the Fund before February 1 of the following year.
Based on the foregoing, the Fund's policy is to distribute to its
shareholders at least 90% of net investment company taxable income, as defined
above and in the Code, and any net realized capital gains for each year and,
consistent therewith, to meet the distribution requirements of Part I of
subchapter m of the Code. The Fund intends to meet the other requirements of
Part I of subchapter m, including the requirements with respect to
diversification of assets and sources of income, so that the Fund will continue
to qualify as a regulated investment company.
Equity options written by the Fund (covered call options on portfolio
stock) will be subject to the provisions under Section 1234 of the Code. If the
Fund writes a call option, no gain is recognized upon its receipt of a premium.
If the option lapses or is closed out, any gain or loss is treated as a
short-term capital gain or loss. If a call option is exercised, any resulting
gain or loss is a short-term or long-term capital gain or loss depending on the
holding period of the underlying stock.
Many futures contracts entered into by the Fund and all listed non-equity
options written or purchased by the Fund (including covered call options
written on debt securities and options written or purchased on futures
contracts) will be governed by Section 1256 of the Code. Absent a tax election
to the contrary, gain or loss attributable to the lapse, exercise or closing
out of any such position will be treated as 60% long-term and 40% short-term
capital gain or loss, and on the last trading day of the Fund's fiscal year
(and, generally on October 31 for purposes of the 4% excise tax), all
outstanding Section 1256 positions will be marked to market (i.e. treated as if
such positions were closed out at their closing price on such day), with any
resulting gain or loss recognized as 60% long-term and 40% short-term capital
gain or loss. Under certain circumstances, entry into a futures contract to
sell a security may constitute a short sale for Federal income tax purposes,
causing an adjustment in the holding period of the underlying security or a
substantially identical security in the Fund's portfolio.
Positions of the Fund which consist of at least one stock and at least one
stock option or other position with respect to a related security which
substantially diminishes the Fund's risk of loss with respect to such stock
could be treated as a "straddle" which is governed by Section 1092 of the Code,
the operation of which may cause deferral of losses, adjustments in the holding
periods of stock or securities and conversion of short-term capital losses into
long-term capital losses. An exception to these straddle rules exists for any
"qualified covered call options" on stock options written by the Fund.
If the Fund invests in stock of certain passive foreign investment
companies, the Fund may be subject to U.S. Federal income taxation on a portion
of any "excess distribution" with respect to, or gain from the disposition of,
such stock. The tax would be determined by allocating such distribution or gain
ratably to each day of the Fund's holding period for the stock. The
distributions or gain so allocated to any taxable year of the Fund, other than
the taxable year of the excess distribution or disposition, would be taxed to
the Fund at the highest ordinary income rate in effect for such year, and the
tax would be further increased by an interest charge to reflect the value of
the tax deferral deemed to have resulted from the ownership of the foreign
company's stock. Any amount of distribution or gain allocated to the taxable
year of the distribution or disposition would be included in the Fund's
investment company taxable income and, accordingly, would not be taxable to the
Fund to the extent distributed by the Fund as a dividend to its shareholders.
The Fund may elect to mark to market (i.e., treat as if sold at their closing
market price on same day), its investments in passive foreign investment
companies and avoid any tax and or interest charge on excess distributions.
The foregoing discussion of U.S. Federal income tax law relates solely to
the application of that law to U.S. persons, i.e., U.S. citizens and residents
and U.S. corporations, partnerships, trusts and estates. Each shareholder who
is not a U.S. person should
10
<PAGE>
consider the U.S. and foreign tax consequences of ownership of shares of the
Fund, including the possibility that such a shareholder may be subject to a
U.S. withholding tax at a rate of 31% (or at a lower rate under an applicable
income tax treaty) on amounts constituting ordinary income received by him or
her, where such amounts are treated as income from U.S. sources under the Code.
The Fund furnishes all shareholders, within 31 days after the end of the
calendar year, with information which is required by the Internal Revenue
Service for preparing federal income tax returns. Investors are urged to
consult their attorney or tax adviser regarding specific questions as to
Federal, foreign, state or local taxes.
Important Notice Regarding Taxpayer IRS Certification
Pursuant to IRS Regulations, the Fund may be required to withhold 31% of
all reportable payments including any taxable dividends, capital gains
distributions or share redemption proceeds, for an account which does not have
a taxpayer identification number or social security number and certain required
certifications. The Fund reserves the right to refuse to open an account for
any person failing to provide a taxpayer identification number along with the
required certifications.
TAX SHELTERED RETIREMENT PLANS
Shares of the Fund and other Phoenix Funds may be offered in connection
with employer-sponsored 401(k) plans. National and its affiliates may provide
administrative services to these plans and to their participants, in addition
to the services that National and its affiliates provide to the Phoenix Funds,
and receive compensation therefor. For information on the terms and conditions
applicable to employee participation in such plans, including information on
applicable plan administrative charges and expenses, prospective investors
should consult the plan documentation and employee enrollment information which
is available from participating employers.
THE DISTRIBUTOR
Phoenix Equity Planning Corporation, ("Equity Planning" or "Distributor"),
acts as the Distributor of the Fund and as such will conduct a continuous
offering pursuant to a "best efforts" arrangement requiring it to take and pay
for only such securities as may be sold to the public. Equity Planning is an
indirect less than wholly-owned subsidiary of Phoenix Home Life Mutual
Insurance Company and an affiliate of National. Shares of the Fund may be
purchased through investment dealers who have sales agreements with the
Distributor. During the fiscal years 1995, 1996, and 1997, purchasers of shares
of the Fund paid aggregate sales charges of $149,157, $132,820, and $111,630,
respectively, of which the Distributor received net commissions of $22,744,
$21,894, and $32,104, respectively, for its services, the balance being paid to
dealers.
The Distribution Agreement may be terminated at any time on not more than
60 days written notice, without payment of a penalty, by the Distributor, by
vote of a majority of the outstanding voting securities of the Fund, or by vote
of a majority of the Fund's Trustees who are not "interested persons" of the
Fund and who have no direct or indirect financial interest in the operation of
the Distribution Plan or in any related agreements. The Distribution Agreement
will terminate automatically in the event of its assignment.
Dealers with whom the Distributor has entered into sales agreements
receive sales charges in accordance with the commission table set forth in the
Prospectus. The Distributor may from time to time pay, from its own resources
or pursuant to the Plans of Distribution described below, a bonus or other
incentive to dealers (other than the Distributor) which employ a registered
representative who sells a minimum dollar amount of the shares of the Fund
during a specific period of time. Such bonus or other incentive may take the
form of payment for travel expenses, including lodging, incurred in connection
with trips taken by qualifying registered representatives and members of their
families to places within or without the United States or other bonuses such as
gift certificates or the cash equivalent of such bonuses. The Distributor may,
from time to time, re-allow the entire portion of the sales charge which it
normally retains to individual selling dealers. However, such additional
re-allowance generally will be made only when the selling dealer commits to
substantial marketing support such as internal wholesaling through dedicated
personnel, internal communications and mass mailings.
Equity Planning also acts as administrative agent of the Fund and as such
performs administrative, bookkeeping and pricing functions for the Fund. As
compensation for such services, Equity Planning is entitled to a fee, payable
monthly and based upon the average of the aggregate daily net asset value of
the Fund, at the following incremental annual rates:
<TABLE>
<S> <C>
First $100 million .05% subject to a minimum fee
$100 million to $300 million .04%
$300 million through $500 million .03%
Greater than $500 million .015%
</TABLE>
A minimum charge of $70,000 is applicable. In addition, Equity Planning is paid
$12,000 for each class of shares beyond one.
PLANS OF DISTRIBUTION
The Fund has adopted separate distribution plans under Rule 12b-1 of the
1940 Act for each class of shares of the Fund (the "Class A Plan," the "Class B
Plan," and collectively the "Plans"). The Plans permit the Fund to reimburse
the Distributor for
11
<PAGE>
expenses incurred in connection with activities intended to promote the sale of
shares of each class of shares of the Fund. For the fiscal year 1998, the
Distributor has voluntarily agreed to waive reimbursement of distribution
expenses under the Class A Plan.
Pursuant to the Class A Plan, the Fund may reimburse the Distributor for
actual expenses of the Distributor up to 0.05% of the average daily net assets
of the Fund's Class A Shares. Under the Class B Plan, the Fund may reimburse
the Distributor monthly for actual expense of the Distributor up to 0.75% of
the average daily net assets of the Fund's Class B Shares. Expenditures under
the Plans shall consist of: (i) commissions to sales personnel for selling
shares of the Fund (including underwriting fees and financing expenses incurred
in connection with the sale of Class B Shares); (ii) compensation, sales
incentives and payments to sales, marketing and service personnel; (iii)
payments to broker-dealers and other financial institutions which have entered
into agreements with the Distributor in the form of the Dealer Agreement for
Phoenix Funds for services rendered in connection with the sale and
distribution of shares of the Fund; (iv) payment of expenses incurred in sales
and promotional activities, including advertising expenditures related to the
Fund; (v) the costs of preparing and distributing promotional materials; (vi)
the cost of printing the Fund's Prospectus and Statement of Additional
Information for distribution to potential investors; and (vii) such other
similar services that the Trustees of the Fund determines are reasonably
calculated to result in the sale of shares of the Fund. In addition, the Fund
shall pay the Distributor 0.25% annually of the average daily net assets of the
Fund shares for providing services to the shareholders, including assistance in
connection with inquiries related to shareholder accounts (the "Service Fee").
In order to receive payments under the Plans, participants must meet such
qualifications to be established in the sole discretion of the Distributor,
such as services to the Fund's shareholders; or services providing the Fund
with more efficient methods of offering shares to coherent groups of clients,
members or prospects of a participant; or services permitting bulking of
purchases or sales, or transmission of such purchases or sales by computerized
tape or other electronic equipment; or other processing.
No amounts paid or payable by the Fund under the Class A Plan may be used
to pay for, or reimburse payment for, sales or promotional services or
activities unless such payment or reimbursement takes place prior to the
earliest of (a) the last day of the one year period commencing on the last day
of the calendar quarter during which the specific service or activity was
performed, or (b) the last day of the one year period commencing on the last
day of the calendar quarter during which payment for the services or activity
was made by a third party on behalf of the Fund. No such timing restriction
exists under the Class B Plan. If the Plans are terminated in accordance with
their terms, the obligations of the Fund to make payments to the Distributor
pursuant to the Plans will cease and the Fund will not be required to make any
payments past the date on which each Plan terminates.
In addition to the amount paid to dealers pursuant to the sales charge
table in the Prospectus, the Distributor may from time to time pay, from its
own resources or pursuant to the Plans, a bonus or other incentive to dealers
(other than the Distributor) which employ a registered representative who sells
a minimum dollar amount of the shares of the Fund during a specific period of
time. Such bonus or other incentive may take the form of payment for travel
expenses, including lodging, incurred in connection with trips taken by
qualifying registered representatives and members of their families to places
within or without the United States or other bonuses such as gift certificates
or the cash equivalent of such bonuses. The Distributor may, from time to time,
re-allow the entire portion of the sales charge on Class A Shares which it
normally retains to individual selling dealers. However, such additional
re-allowance generally will be made only when the selling dealer commits to
substantial marketing support such as internal wholesaling through dedicated
personnel, internal communications and mass mailings.
For the fiscal year ended June 30, 1997 the Fund paid Rule 12b-1 Fees in
the amount of $428,642 of which the Distributor received $162,567, W.S. Griffith
& Co., an affiliate, received $11,693 and unaffiliated broker-dealers received
$254,382. The Rule 12b-1 payments were used for (1) compensation to dealers
($345,940), (2) compensation to sales personnel ($178,495), (3) Advertising
($90,722), (4) service costs ($56,152) and (5) Other ($40,803).
On a quarterly basis, the Fund's Trustees review a report on expenditures
under the Plans and the purposes for which expenditures where made. The
Trustees conduct an additional, more extensive review annually in determining
whether the Plans will be continued. By their terms, continuation of the Plans
from year to year is contingent on annual approval by a majority of the Fund's
Trustees and by a majority of the Trustees who are not "interested persons" (as
defined in the 1940 Act) and who have no direct or indirect financial interest
in the operation of the Plans or any related agreements (the "Plan Trustees").
The Plans provide that they may not be amended to increase materially the costs
which the Fund may bear pursuant to the Plans without approval of the
shareholders of the Fund and that other material amendments to the Plans must
be approved by a majority of the Plan Trustees by vote cast in person at a
meeting called for the purpose of considering such amendments. The Plans
further provides that while it is in effect, the selection and nomination of
Trustees who are not "interested persons" shall be committed to the discretion
of the Trustees who are not "interested persons". The Plans may be terminated
at any time by vote of a majority of the Plan Trustees or a majority of the
outstanding shares of the Fund.
The National Association of Securities Dealers, Inc. (the "NASD") regards
certain distribution fees as asset-based sales charges subject to NASD sales
load limits. The NASD's maximum sales charge rule may require the Trustees to
suspend distribution fees or amend the Plans.
12
<PAGE>
TRUSTEES AND OFFICERS
The following table sets forth information concerning the Trustees and
executive officers of the Fund, including their principal occupations during
the past five years. Unless otherwise noted, the address of each executive
officer and Trustee is 56 Prospect Street, Hartford, Connecticut, 06115. The
Trustees and executive officers are listed below:
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- -------------------------- ---------------- ----------------------------------------------------------------
<S> <C> <C>
C. Duane Blinn (70)** Trustee Partner in the law firm of Day, Berry & Howard. Director/
Day, Berry & Howard Trustee, Phoenix Funds (1980-present). Trustee, Phoenix-
CityPlace Aberdeen Series Fund and Phoenix Duff & Phelps
Hartford, CT 06103 Institutional Mutual Funds (1996-present). Director/Trustee,
the National Affiliated Investment Companies (until 1993).
Robert Chesek (63) Trustee Trustee/Director (1981-present) and Chairman (1989-1994),
49 Old Post Road Phoenix Funds. Trustee, Phoenix-Aberdeen Series Fund and
Wethersfield, CT 06109 Phoenix Duff & Phelps Institutional Mutual Funds (1996-
present). Vice President, Common Stock, Phoenix Home Life
Mutual Insurance Company (1980-1994). Director/Trustee, the
National Affiliated Investment Companies (until 1993).
E. Virgil Conway (68) Trustee Chairman, Metropolitan Transportation Authority (1992-
9 Rittenhouse Road present). Trustee/Director, Consolidated Edison Company of
Bronxville, NY 10708 New York, Inc. (1970-present), Pace University (1978-
present), Atlantic Mutual Insurance Company (1974-present),
HRE Properties (1989-present), Greater New York Councils,
Boy Scouts of America (1985-present), Union Pacific Corp.
(1978-present), Blackrock Freddie Mac Mortgage Securities
Fund (Advisory Director) (1990-present), Centennial Insurance
Company (1974-present), Josiah Macy, Jr., Foundation (1975-
present), The Harlem Youth Development Foundation (1987-
present), Accuhealth (1994-present), Trism, Inc. (1994-
present), Realty Foundation of New York (1972-present), New
York Housing Partnership Development Corp. (Chairman)
(1981-present) and Fund Directions (Advisory Director)
(1993-present). Director/Trustee, Phoenix Funds (1993-
present). Trustee, Phoenix-Aberdeen Series Fund and Phoenix
Duff & Phelps Institutional Mutual Funds (1996-present).
Director, Duff & Phelps Utilities Tax-Free Income Inc. and
Duff & Phelps Utility and Corporate Bond Trust Inc. (1995-
present). Chairman, Audit Committee of the City of New York
(1981-1996). Advisory Director, Blackrock Fannie Mae
Mortgage Securities Fund (1989-1996). Chairman, Financial
Accounting Standards Advisory Council (1992-1995).
Director/Trustee, the National Affiliated Investment Companies
(until 1993).
Harry Dalzell-Payne (68) Trustee Director/Trustee, Phoenix Funds (1983-present). Trustee,
330 East 39th Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Apartment 29G Institutional Mutual Funds (1996-present). Director, Duff &
New York, NY 10016 Phelps Utilities Tax-Free Income Inc. and Duff & Phelps
Utility and Corporate Bond Trust Inc. (1995-present). Director,
Farragut Mortgage Co., Inc. (1991-1994). Director/Trustee, the
National Affiliated Investment Companies (1983-1993).
Formerly a Major General of the British Army.
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- ---------------------------- --------------- -----------------------------------------------------------------
<S> <C> <C>
*Francis E. Jeffries (67) Trustee Director/Trustee, Phoenix Funds (1995-present). Trustee,
6585 Nicholas Blvd. Phoenix-Aberdeen Series Inc. and Phoenix Duff & Phelps
Apt. 1601 Institutional Mutual Funds (1996-present). Director, Duff &
Naples, FL 33963 Phelps Utilities Income Inc. (1987-present), Duff & Phelps
Utilities Tax-Free Income Inc. (1991-present) and Duff &
Phelps Utility and Corporate Bond Trust Inc. (1993-present).
Director, The Empire District Electric Company (1984-
present). Director (1989-1997), Chairman of the Board (1993-
1997), President (1989-1993), and Chief Executive Officer
(1989-1995), Phoenix Duff & Phelps Corporation.
Leroy Keith, Jr. (58) Trustee Chairman and Chief Executive Officer, Carson Products
Chairman and Chief Company (1995-present). Director/Trustee, Phoenix Funds
Executive Officer (1980-present). Trustee, Phoenix-Aberdeen Series Fund and
Carson Product Company Phoenix Duff & Phelps Institutional Mutual Funds (1996-
64 Ross Road present). Director, Equifax Corp. (1991-present) and Keystone
Savannah, GA 30750 International Fund, Inc. (1989-present). Trustee, Keystone
Liquid Trust, Keystone Tax Exempt Trust, Keystone Tax Free
Fund, Master Reserves Tax Free Trust, and Master Reserves
Trust. President, Morehouse College (1987-1994). Chairman
and Chief Executive Officer, Keith Ventures (1992-1994).
Director/Trustee, the National Affiliated Investment Companies
(until 1993). Director, Blue Cross/Blue Shield (1989-1993)
and First Union Bank of Georgia (1989-1993).
*Philip R. McLoughlin (51) Trustee and Chairman (1997-present), Vice Chairman (1995-1997) and Chief
President Executive Officer (1995-present), Phoenix Duff & Phelps
Corporation. Director (1994-present) and Executive Vice
President, Investments (1988-present), Phoenix Home Life
Mutual Insurance Company. Director/Trustee and President,
Phoenix Funds (1989-present). Trustee and President, Phoenix-
Aberdeen Series Fund and Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present). Director, Duff & Phelps Utilities
Tax-Free Income Inc. (1995-present) and Duff & Phelps Utility
and Corporate Bond Trust Inc. (1995-present). Director (1983-
present) and Chairman (1995-present), Phoenix Investment
Counsel, Inc. Director (1984-present) and President (1990-
present), Phoenix Equity Planning Corporation. Director (1993-
present), Chairman (1993-present) and Chief Executive Officer
(1993-1995), National Securities & Research Corporation.
Director, Phoenix Realty Group, Inc. (1994-present), Phoenix
Realty Advisors, Inc. (1987-present), Phoenix Realty Investors,
Inc. (1994-present), Phoenix Realty Securities, Inc. (1994-
present), PXRE Corporation (Delaware) (1985-present), and
World Trust Fund (1991-present). Director and Executive Vice
President, Phoenix Life and Annuity Company (1996-present).
Director and Executive Vice President, PHL Variable Insurance
Company (1995-present). Director, Phoenix Charter Oak Trust
Company (1996-present). Director and Vice President, PM
Holdings, Inc. (1985-present). Director and President, Phoenix
Securities Group, Inc. (1993-1995). Director (1992-present) and
President (1992-1994), W.S. Griffith & Co., Inc. Director (1992-
present) and President (1992-1994), Townsend Financial
Advisers, Inc. Director/Trustee, the National Affiliated
Investment Companies (until 1993).
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- --------------------------- --------------- --------------------------------------------------------------
<S> <C> <C>
Everett L. Morris (69) Trustee Vice President, W.H. Reaves and Company (1993-present).
164 Laird Road Director/Trustee, Phoenix Funds (1995-present). Trustee,
Colts Neck, NJ 07722 Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Director, Duff &
Phelps Utilities Tax-Free Income Inc. (1991-present) and Duff
& Phelps Utility and Corporate Bond Trust Inc. (1993-
present). Director, Public Service Enterprise Group,
Incorporated (1986-1993). President and Chief Operating
Officer, Enterprise Diversified Holdings, Incorporated
(1989-1993).
*James M. Oates (51) Trustee Chairman, IBEX Capital Markets LLC (1997-present).
Managing Director Managing Director, Wydown Group (1994-present). Director,
The Wydown Group Phoenix Duff & Phelps Corporation (1995-present). Director/
IBEX Capital Markets LLC Trustee, Phoenix Funds (1987-present). Trustee, Phoenix-
60 State Street Aberdeen Series Fund and Phoenix Duff & Phelps
Suite 950 Institutional Mutual Funds (1996-present). Director, Govett
Boston, MA 02109 Worldwide Opportunity Funds, Inc. (1991-present), Blue Cross
and Blue Shield of New Hampshire (1994-present), Investors
Financial Service Corporation (1995-present), Investors Bank
& Trust Corporation (1995-present), Plymouth Rubber Co.
(1995-present) and Stifel Financial (1996-present). Member,
Chief Executives Organization (1996-present). Director (1984-
1994), President (1984-1994) and Chief Executive Officer
(1986-1994), Neworld Bank. Director/Trustee, the National
Affiliated Investment Companies (until 1993).
*Calvin J. Pedersen (55) Trustee Director (1986-present), President (1993-present) and
Phoenix Duff & Phelps Executive Vice President (1992-1993), Phoenix Duff & Phelps
Corporation Corporation. Director/Trustee, Phoenix Funds (1995-present).
55 East Monroe Street Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff &
Suite 3600 Phelps Institutional Mutual Funds (1996-present). President
Chicago, IL 60603 and Chief Executive Officer, Duff & Phelps Utilities Tax-Free
Income Inc. (1995-present), Duff & Phelps Utilities Income
Inc. (1994-present) and Duff & Phelps Utility and Corporate
Bond Trust Inc. (1995-present).
Philip R. Reynolds (70)** Trustee Director/Trustee, Phoenix Funds (1984-present). Trustee,
43 Montclair Drive Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
West Hartford, CT 06107 Institutional Mutual Funds (1996-present). Director, Vestaur
Securities, Inc. (1972-present). Trustee and Treasurer, J.
Walton Bissell Foundation, Inc. (1988-present). Director/
Trustee, the National Affiliated Investment Companies
(until 1993).
Herbert Roth, Jr. (69) Trustee Director/Trustee, Phoenix Funds (1980-present). Trustee,
134 Lake Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
P.O. Box 909 Institutional Mutual Funds (1996-present). Director, Boston
Sherborn, MA 01770 Edison Company (1978-present), Phoenix Home Life Mutual
Insurance Company (1972-present), Landauer, Inc. (medical
services) (1970-present),Tech Ops./Sevcon, Inc. (electronic
controllers) (1987-present), and Mark IV Industries
(diversified manufacturer) (1985-present). Director, Key
Energy Group (oil rig service) (1988-1994). Director/Trustee,
the National Affiliated Investment Companies (until 1993).
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- ----------------------------- --------------- ---------------------------------------------------------------
<S> <C> <C>
Richard E. Segerson (51) Managing Director, Mullin Associates (1993-present).
102 Valley Road Director/Trustee, Phoenix Funds (1993-present). Trustee,
New Canaan, CT 07840 Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Vice President and
General Manager, Coats & Clark, Inc. (previously Tootal
American, Inc.) (1991-1993). Director/Trustee, the National
Affiliated Investment Companies (1984-1993).
Lowell P. Weicker, Jr. (66) Trustee/Director, Phoenix Funds (1995-present). Trustee,
731 Lake Avenue Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Greenwich, CT 06830 Institutional Mutual Funds (1996-present). Director, UST Inc.
(1995-present), HPSC Inc. (1995-present), Duty Free
International, Inc. (1997-present) and Compuware (1996-
present). Visiting Professor, University of Virginia (1997-
present). Chairman, Dresing, Lierman, Weicker (1995-1996).
Governor of the State of Connecticut (1991-1995).
Michael E. Haylon (39) Executive Director and Executive Vice President--Investments, Phoenix
Vice Duff & Phelps Corporation (1995-present). Executive Vice
President President, Phoenix Funds (1993-present) and Phoenix-
Aberdeen Series Fund (1996-present). Executive Vice
President (1997-present), Vice President (1996-1997),
Phoenix Duff & Phelps Institutional Mutual Funds. Director
(1994-present), President (1995-present), Executive Vice
President (1994-1995), Vice President (1991-1994), Phoenix
Investment Counsel, Inc. Director (1994-present), President
(1996-present), Executive Vice President (1994-1996), Vice
President (1993-1994), National Securities & Research
Corporation. Director, Phoenix Equity Planning Corporation
(1995-present). Senior Vice President, Securities Investments,
Phoenix Home Life Mutual Insurance Company (1993-1995).
Various other positions with Phoenix Home Life Mutual
Insurance Company (1990-1993).
David R. Pepin (54) Executive Executive Vice President, Phoenix Funds and Phoenix-
Vice Aberdeen Series Fund (1996-present). Director (1997-present)
President and Executive Vice President (1996-present), Phoenix Duff &
Phelps Corporation. Managing Director, Phoenix-Aberdeen
International Advisers, LLC (1996-present). Director and
Executive Vice President, Phoenix Equity Planning Corp.
(1996-present). Director, Phoenix Investment Counsel, Inc.
and National Securities & Research Corporation (1996-
present). Various positions with Phoenix Home Life Mutual
Insurance Company (1994-1995). Vice President and General
Manager, Finance and Health, Digital Equipment Corporation
(1980-1994).
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- --------------------------- --------------- --------------------------------------------------------------
<S> <C> <C>
William J. Newman (57) Senior Vice Executive Vice President (1995-present) and Chief Investment
President Strategist (1996-present), Phoenix Investment Counsel, Inc.
Executive Vice President (1996-present) and Chief Investment
Strategist (1996-present), Senior Vice President (1995-1996)
National Securities & Research Corporation. Senior Vice
President, Phoenix Strategic Equity Series Fund (1996-
present). Senior Vice President, The Phoenix Edge Series Fund
(1995-present), Phoenix Multi-Portfolio Fund (1995- present),
Phoenix Income and Growth Fund (1996-present), Phoenix Series
Fund (1996-present), Phoenix Strategic Allocation Fund, Inc.
(1996-present), Phoenix Worldwide Opportunities Fund
(1996-present). Phoenix Duff & Phelps Institutional Mutual
Funds (1996-present) and Phoenix-Aberdeen Series Fund
(1996-present). Senior Vice President, Phoenix Equity Planning
Corporation (1995-1996). Vice President, Common Stock and Chief
Investment Strategist, Phoenix Home Life Mutual Insurance
Company (April 1995-November 1995). Chief Investment
Strategist, Kidder, Peabody Co., Inc. (1993-1994). Managing
Director, Equities, Bankers Trust Company (1991-1993).
Jeanne H. Dorey (36) Vice Managing Director, Equities (1996-present) and Vice
President President (1993-1996), Phoenix Investment Counsel, Inc.
Managing Director, Equities (1996-present) and Vice
President (1993-1996), National Securities & Research
Corporation and Portfolio Manager, Common Stock (1992-
1993). Vice President, Phoenix Multi-Portfolio Fund (1993-
present), The Phoenix Edge Series Fund (1993-present)
and Phoenix Worldwide Opportunities Fund (1993-present).
Portfolio Manager, International, Phoenix Home Life Mutual
Insurance Company (until 1995).
William E. Keen, III (34) Vice Assistant Vice President, Phoenix Equity Planning
100 Bright Meadow Blvd. President Corporation (1996-present). Vice President, Phoenix Funds
P.O. Box 2200 (1996-present), Phoenix Duff & Phelps Institutional Mutual
Enfield, CT 06083-2200 Funds (1996-present), Phoenix-Aberdeen Series Fund (1996-
present). Assistant Vice President, USAffinity Investments LP
(1994-1995). Treasurer and Secretary, USAffinity Funds
(1994-1995). Manager, Fund Administration, SEI Corporation
(1991-1994).
David Lui (38) Vice Portfolio Manager, Equities, Phoenix Investment Counsel, Inc.
President and National Securities & Research Corporation (1996-
present). Vice President, The Phoenix Edge Series Fund,
Phoenix Worldwide Opportunities Fund and Phoenix Multi-
Portfolio Fund (1996-present). Associate Portfolio Manager,
International Portfolios, Phoenix Home Life Mutual Insurance
Company (1995-1996). Vice President, Asian Equities,
Alliance Capital Management (1993-1995). Associate, Global
Markets, Bankers Trust (1990-1993).
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- ------------------------- --------------- ----------------------------------------------------------------
<S> <C> <C>
William R. Moyer (53) Vice Senior Vice President and Chief Financial Officer, Phoenix
100 Bright Meadow Blvd. President Duff & Phelps Corporation (1995-present). Senior Vice
P.O. Box 2200 President, Finance (1990-present), Chief Financial Officer
Enfield, CT 06083-2200 (1996-present), and Treasurer (1994-1996), Phoenix Equity
Planning Corporation. Senior Vice President (1990-present),
Chief Financial Officer (1996-present) and Treasurer (1994-
present), Phoenix Investment Counsel, Inc. Senior Vice
President, Finance (1993-present), Chief Financial Officer
(1996-present), and Treasurer (1994-present), National
Securities & Research Corporation. Senior Vice President
and Chief Financial Officer, Duff & Phelps Investment
Management Co. (1996-present). Vice President, Phoenix
Funds (1990-present), Phoenix-Duff & Phelps Institutional
Mutual Funds (1996-present), Phoenix-Aberdeen Series Fund
(1996-present). Senior Vice President and Chief Financial
Officer, W. S. Griffith & Co., Inc. (1992-1995) and Townsend
Financial Advisers, Inc. (1993-1995). Vice President,
Investment Products Finance, Phoenix Home Life Mutual
Insurance Company (1990-1995). Vice President, the National
Affiliated Investment Companies (until 1993).
Leonard J. Saltiel (43) Vice Managing Director Operations and Service, (1996-present),
President Senior Vice President (1994-1996), Phoenix Equity Planning
Corporation. Vice President, Phoenix Funds (1994-present),
Phoenix Duff & Phelps Institutional Mutual Funds (1996-
present), Phoenix-Aberdeen Series Fund (1996-present). Vice
President, National Securities & Research Corporation (1994-
1996). Vice President, Investment Operations, Phoenix Home
Life Mutual Insurance Company (1994-1995). Various
positions with Home Life Insurance Company and Phoenix
Home Life Mutual Insurance Company (1987-1994).
Nancy G. Curtiss (44) Treasurer Vice President, Fund Accounting (1994-present) and Treasurer
(1996-present), Phoenix Equity Planning Corporation. Treasurer,
Phoenix Funds (1994-present), Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present), Phoenix-Aberdeen
Series Fund (1996-present). Second Vice President and
Treasurer, Fund Accounting, Phoenix Home Life Mutual
Insurance Company (1994-1995). Various positions with Phoenix
Home Life Insurance Company (1987-1994).
G. Jeffrey Bohne (49) Secretary Vice President and General Manager, Phoenix Home Life
101 Munson Street Mutual Insurance Co. (1993-present). Vice President, Mutual
Greenfield, MA 01301 Fund Customer Service (1996-present). Vice President,
Transfer Agency Operations (1993-1996), Phoenix Equity
Planning Corporation. Clerk, Phoenix Investment Counsel, Inc.
(1995-present). Secretary, Phoenix Funds (1993-present),
Phoenix Duff & Phelps Institutional Mutual Funds (1996-
present) and Phoenix-Aberdeen Series Fund (1996-present).
Vice President, Home Life of New York Insurance Company
(1984-1992).
</TABLE>
- -----------
*Indicates that the Trustee is an "interested person" of the Trust within the
meaning of the definition set forth in Section 2(a)(19) of the Investment
Company Act of 1940.
**Pursuant to the retirement policy of the Phoenix Funds, Messrs. Blinn and
Reynolds will retire from the Board of Trustees effective January 1, 1998.
For services rendered to the Fund for the fiscal year ended June 30, 1997,
the Trustees received aggregate remuneration of $19,088. For service on the
Boards of Directors/Trustees of the Phoenix Funds, each Trustee who is not a
full-time employee of
18
<PAGE>
the Adviser or any of its affiliates currently receives a retainer at the
annual rate of $40,000 and $2,500 per joint meeting of the Boards. Each Trustee
who serves on the Audit Committee receives a retainer at the annual rate of
$2,000 and $2,000 per joint Audit Committee meeting attended. Each Trustee who
serves on the Nominating Committee receives a retainer at the annual rate of
$1,000 and $1,000 per joint Nominating Committee meeting attended. Each Trustee
who serves on the Executive Committee and who is not an interested person of
the Fund receives a retainer at the annual rate of $1,000 and $1,000 per joint
Executive Committee meeting attended. The function of the Executive Committee
is to serve as a contract review, compliance review and performance review
delegate of the full Board of Trustees. Trustees costs are allocated equally to
each of the Series and Funds within the complex. The foregoing fees do not
include the reimbursement of expenses incurred in connection with meetings
attended. Officers and employees of the Adviser who are "interested persons"
are compensated for their services by the Adviser and receive no compensation
from the Fund.
For the Fund's last fiscal year, the Trustees received the following
compensation:
<TABLE>
<CAPTION>
Total
Compensation
Pension or From Fund and
Aggregate Retirement Benefits Estimated Fund Complex
Compensation Accrued as Part Annual Benefits (13 Funds)
Name From Fund of Fund Expenses Upon Retirement Paid to Directors
- ------------------------ -------------- --------------------- ----------------- ------------------
<S> <C> <C> <C> <C>
C. Duane Blinn $ 1,755* $64,750
Robert Chesek $ 1,545 $57,750
E. Virgil Conway+ $ 1,875 $69,750
Harry Dalzell-Payne+ $ 1,620 $60,750
Leroy Keith, Jr. $ 1,545 None None $57,750
Philip R. McLoughlin+ $ 0 for any for any $ 0
James M. Oates+ $ 1,605 Trustee Trustee $60,000
Philip R. Reynolds $ 1,545 $57,750
Herbert Roth, Jr.+ $ 1,965* $72,250
Richard E. Segerson $ 1,710 $64,000
Lowell P. Weicker, Jr. $ 1,643 $61,000
Everett L. Morris+ $ 1,530* $58,250
Francis E. Jeffries $ 750* $28,750
Calvin J. Pedersen $ 0 $ 0
</TABLE>
- ---------
*This compensation (and the earnings thereon) will be deferred pursuant to the
Directors' Deferred Compensation Plan. At June 30, 1997, the total amount of
deferred compensation (including interest and other accumulation earned on the
original amounts deferred) accrued for Messrs. Blinn, Jeffries, Morris and Roth
was $349,026.91, $28,561.41, $85,849.73 and $132,587.69, respectively. At
present, by agreement among the Fund, the Distributor and the electing
director, director fees that are deferred are paid by the Fund to the
Distributor. The liability for the deferred compensation obligation appears
only as a liability of the Distributor.
+Messrs. Conway, Dalzell-Payne, McLoughlin, Morris, Oates and Roth are members
of the Executive Committee.
On June 30, 1997, the Trustees and officers of the Fund beneficially owned
less than 1% of the outstanding shares of the Fund.
OTHER INFORMATION
Independent Accountants
Price Waterhouse LLP, 160 Federal Street, Boston, MA 02110, serves as
independent accountants for the Fund (the "Accountants"). The Accountants audit
the Fund's annual financial statements and express an opinion thereon.
Custodian and Transfer Agent
Brown Brothers Harriman & Co., having its principal place of business at
40 Water Street, Boston, Massachusetts 02109, serves as custodian of the Fund's
assets (the "Custodian"). Equity Planning acts as Transfer Agent (the "Transfer
Agent").
Report to Shareholders
The fiscal year of the Fund ends on June 30. The Fund will send financial
statements to its shareholders at least semi-annually. An annual report,
containing financial statements audited by the Fund's independent accountants,
will be sent to shareholders each year.
Financial Statements
The Financial Statements for the Fund's fiscal year ended June 30, 1997,
appearing in the Fund's 1997 Annual Report to Shareholders, are incorporated
herein by reference.
19
Phoenix Worldwide Opportunities Fund
- --------------------------------------------------------------------------------
INVESTMENTS AT JUNE 30, 1997
SHARES VALUE
--------- ------------
COMMON STOCKS--92.1%
Australia--0.6%
Westpac Bank Corp. Ltd. (Diversified
Financial Services) ........................ 153,000 913,553
------------
Belgium--0.9%
Credit Communal Holding/Dexia (Banks).......... 13,000 1,397,636
------------
Brazil--1.9%
Telebras Sponsored ADR
(Utility--Telephone) ..................... 14,600 2,215,550
Uniao de Bancos Brasileiros SA GDR
(Banks) .................................... 24,000 891,000
------------
3,106,550
------------
Chile--0.8%
Santa Isabel SA Sponsored ADR
(Retail--Food) ........................... 42,000 1,354,500
------------
Finland--2.5%
Nokia Corp. Sponsored ADR
(Telecommunications Equipment) ............ 27,000 1,991,250
Raision Tehtaat Oy (Food) ..................... 13,300 914,116
Rauma Group (The) (Machinery) ............... 48,000 1,099,688
------------
4,005,054
------------
France--4.9%
AXA - UAP (Insurance) ........................ 22,700 1,413,216
Elf Aquitaine SA (Oil) ........................ 11,200 1,209,491
Louis Dreyfus Citrus (Food) (b) ............... 28,000 1,046,858
Promodes (Retail) ........................... 4,000 1,559,556
Total SA B Shares (Oil) ..................... 12,300 1,244,477
Usinor Sacilor (Steel) ........................ 76,000 1,372,192
------------
7,845,790
------------
Germany--3.7%
Adidas AG (Textile & Apparel) ............... 11,950 1,323,587
BHW Holding AG (Banks) (b) .................. 73,000 1,235,868
Rhoen-Klinikum AG (Hospital
Management & Services) ..................... 9,310 1,191,466
Schmalbach Lubeca AG (Containers) ............ 5,300 1,189,268
VEBA AG (Utility--Electric) .................. 18,200 1,023,587
------------
5,963,776
------------
Hong Kong--0.0%
Henderson China Holding Ltd. (Real
Estate) .................................... 768 1,294
------------
Hungary--0.4%
Gedeon Richter 144A GDS (Health
Care--Drugs) (d) ........................... 6,600 608,142
------------
Indonesia--0.1%
Wicaksana Overseas International
(Conglomerates) ........................... 167,000 204,329
------------
Italy--3.5%
Gucci Group NV-NY (Textile & Apparel) ......... 29,800 1,918,375
Istituto Bancario San Paolo di Torino
(Banks) .................................... 120,120 874,691
Stet-Societa' Finanziaria Telefonica SPA
(Utility--Telephone) ..................... 488,000 2,839,377
------------
5,632,443
------------
Japan--7.8%
Canon, Inc. (Office & Business
Equipment) ................................. 38,000 1,036,092
Circle K Japan Company Ltd.
(Retail--Food) ........................... 16,800 966,040
Credit Saison Company Ltd. (Diversified
Financial Services) ........................ 59,800 1,463,253
DDI Corp. (Utility--Telephone) ............... 115 850,214
Matsushita Communication Industrial
(Telecommunications Equipment) ............ 22,000 744,036
Meitec (Computer Software & Services) ......... 29,000 864,196
Namco (Entertainment, Leisure &
Gaming) .................................... 20,000 772,525
Nintendo Company Ltd. (Entertainment,
Leisure & Gaming) ........................ 11,000 922,835
Nippon Broadcasting System (Publishing,
Broadcasting, Printing & Cable) ............ 12,000 1,331,819
Paris Miki, Inc. (Retail) ..................... 31,000 912,960
TDK Corp. (Electronics) ..................... 9,000 661,452
Taisho Pharmaceutical Co. (Health
Care--Drugs) .............................. 35,000 945,119
Taiyo Yuden Co. Ltd. (Electrical
Equipment) ................................. 66,000 1,090,099
------------
12,560,640
------------
Mexico--0.9%
Coca-Cola Femsa SA Sponsored ADR
(Beverages) .............................. 30,000 1,548,750
------------
Netherlands--2.6%
DSM NV (Chemical) ........................... 11,500 1,146,302
ING Groep NV (Diversified Financial
Services) ................................. 25,500 1,177,844
Philips Electronics NV (Electronics) ......... 27,000 1,937,529
------------
4,261,675
------------
New Zealand--0.2%
Restaurant Brands New Zealand Ltd.
(Entertainment, Leisure & Gaming) (b) ...... 149,000 258,516
------------
Norway--1.3%
Schibsted ASA (Publishing, Broadcasting,
Printing & Cable) ........................ 64,000 1,267,638
Smedvig ASA A Shares (Oil) .................. 36,300 907,413
------------
2,175,051
------------
3
See Notes to Financial Statements
<PAGE>
Phoenix Worldwide Opportunities Fund
- --------------------------------------------------------------------------------
SHARES VALUE
----------- -------------
Peru--1.0%
Telefonica del Peru SA
(Utility--Telephone) .................. 617,014 $ 1,621,334
------------
Philippines--2.8%
Ayala Land, Inc. Class B (Real Estate) ..... 1,669,000 1,534,473
Manila Electric Co. (Utility--Electric) .... 136,000 670,306
Metropolitan Bank & Trust Co.
(Banks) ................................. 20,000 424,628
Philippine Commercial International
Bank (Banks) ........................... 61,000 589,741
SM Prime Holdings, Inc. (Real Estate) ...... 2,488,000 735,760
San Miguel Corp. Class B (Beverages) ....... 241,000 635,028
------------
4,589,936
------------
Poland--0.1%
Bank Handlowy W. Warszawie
(Banks) (b) ........................... 7,500 86,498
------------
Portugal--2.1%
Electricidade de Portugal SA
(Utility--Electric) ..................... 29,960 550,491
Portugal Telecom SA
(Utility--Telephone) .................. 32,400 1,308,607
Telecel-Comunicacoes Pessoais SA
(Telecommunications Equipment) (b) ...... 18,500 1,536,492
------------
3,395,590
------------
South Korea--9.3%
Daewoo Securities Co. (Broker-
Dealers) (b) ........................... 131,800 2,389,616
Daewoo Telecom Co.
(Telecommunications Equipment) ......... 79,000 768,648
Dongsuh Securities Co. (Broker-
Dealers) (b) ........................... 106,000 972,860
Hyundai Electronics Industries Co.
(Electronics) ........................... 9,800 502,139
Hyundai Marine & Fire Insurance Co.
(Insurance) (b) ........................ 28,600 1,156,238
Hyundai Securities Co. (Diversified
Financial Services) (b) ............... 85,200 1,295,269
L.G. Electronics (Electronics) ............ 71,200 1,322,972
L.G. Information & Communication
Ltd. (Telecommunications
Equipment) .............................. 19,600 2,427,926
L.G. Securities (Diversified Financial
Services) (b) ........................... 113,600 1,381,621
Oriental Fire & Marine Insurance
(Insurance) ........................... 42,600 1,074,594
Samsung Electronics Co.
(Electronics) ........................... 7,600 856,797
Samsung Fire & Marine Insurance
(Insurance) ........................... 490 185,736
Sungmi Telecom Electronics Co.
(Telecommunications Equipment) ......... 5,150 682,607
------------
15,017,023
------------
Spain--0.5%
Telefonica de Espana
(Utility--Telephone) .................. 30,500 883,457
------------
Sweden--1.5%
Astra AB A Shares (Health
Care--Drugs) ........................... 80,000 $ 1,489,854
Biora AB (Medical Products &
Supplies) (b) ........................... 33,300 310,076
Biora AB Sponsored ADR (Medical
Products & Supplies) (b) ............... 12,000 214,500
Hemkopskedjan AB B Shares
(Retail--Food) ........................ 33,000 339,291
------------
2,353,721
------------
Switzerland--3.9%
Ares-Serono Group Bearer Shares
(Health Care--Drugs) .................. 1,080 1,566,882
Novartis AG Registered Shares (Health
Care--Drugs) ........................... 1,100 1,761,147
SIG Schweizerische Industrie
Gesellschaft Holding AG Bearer
Shares (Machinery) ..................... 370 1,123,096
SIG Schweizerische Industrie
Gesellschaft Holding AG Registered
Shares (Machinery) ..................... 120 178,625
Zurich Versicherungs Registered
Shares (Insurance) ..................... 4,000 1,594,183
------------
6,223,933
------------
United Kingdom--15.7%
Avis Europe PLC (Leasing/Rental) (b) ....... 620,000 1,408,622
British Aerospace PLC (Aerospace &
Defense) .............................. 109,700 2,440,314
Carlton Communications PLC
(Publishing, Broadcasting, Printing
& Cable) .............................. 196,000 1,655,626
Celltech PLC (Health Care--Drugs) (b) ...... 152,000 679,294
Compass Group PLC (Lodging &
Restaurants) ........................... 147,000 1,649,101
Cordiant PLC (Professional Services) ...... 1,038,000 2,133,705
Corporate Services Group PLC
(Professional Services) ............... 387,000 1,214,206
GKN PLC (Miscellaneous) .................. 75,000 1,291,403
Granada Group PLC (Entertainment,
Leisure & Gaming) ..................... 87,000 1,143,975
Lloyds TSB Group PLC (Diversified
Financial Services) ..................... 172,000 1,763,515
Next PLC (Retail) ........................ 148,000 1,671,405
Norwich Union PLC 144A (Insurance)
(b) (d) .............................. 120,000 638,149
Rentokil Initial PLC (Professional
Services) .............................. 330,000 1,158,955
Rolls-Royce PLC (Aerospace &
Defense) .............................. 290,000 1,107,773
Siebe PLC (Electrical Equipment) ......... 108,000 1,828,162
WPP Group PLC (Advertising) ............... 658,000 2,699,684
Williams PLC (Professional Services) ...... 160,000 860,186
------------
25,344,075
------------
United States--23.1%
Aetna, Inc. (Insurance) .................. 19,800 2,027,025
Ascend Communications, Inc.
(Telecommunications Equipment) ......... 40,000 1,575,000
4
See Notes to Financial Statements
<PAGE>
Phoenix Worldwide Opportunities Fund
- --------------------------------------------------------------------------------
SHARES VALUE
-------- ---------------
United States--continued
Centura Software Corp. (Computer
Software & Services) (b) ............... 3,436 $ 7,731
Chase Manhattan Corp. (Banks) ............ 17,000 1,650,062
Citicorp (Banks) ........................... 12,000 1,446,750
Ensco International, Inc. (Oil Service
& Equipment) (b) ........................ 37,000 1,951,750
First American Corp. (Banks) ............... 57,000 2,187,375
General Electric Co. (Electrical
Equipment) .............................. 40,000 2,615,000
Hertz Corp. Class A (Autos & Trucks) ....... 50,000 1,800,000
International Business Machines Corp.
(Office & Business Equipment) ......... 23,000 2,074,313
Nautica Enterprises, Inc. (Textile &
Apparel) .............................. 90,000 2,379,375
Philip Morris Companies, Inc.
(Tobacco) .............................. 55,000 2,440,625
Quaker Oats Co. (Food) ..................... 40,000 1,795,000
RJR Nabisco Holdings Corp.
(Tobacco) .............................. 69,000 2,277,000
Schlumberger Ltd. (Oil Service &
Equipment) .............................. 17,200 2,150,000
Teradyne, Inc. (Electronics) ............... 40,000 1,570,000
U.S. Airways Group, Inc. (Airlines) (b) .... 50,000 1,750,000
United Healthcare Corp. (Hospital
Management & Services) .................. 35,500 1,846,000
United Waste Systems, Inc. (Pollution
Control) .............................. 50,000 2,050,000
Watson Pharmaceuticals, Inc. (Health
Care--Drugs) (b) ........................ 40,000 1,690,000
---------------
37,283,006
---------------
TOTAL COMMON STOCKS
(Identified cost $129,316,466) ..................... 148,636,272
---------------
PREFERRED STOCKS--1.6%
Germany--0.9%
Volkswagen AG Pfd. (Autos & Trucks) ........ 2,700 1,518,508
---------------
United Kingdom--0.7%
Egypt Investment Co. (Multi-
Industry) (b) ........................... 73,000 1,076,750
---------------
TOTAL PREFERRED STOCKS
(Identified cost $1,693,195) .................. 2,595,258
---------------
WARRANTS--1.3%
United States--1.3%
Intel Corp. Warrants 3/14/98
(Electronics) (b) ..................... 20,000 $ 2,030,000
---------------
TOTAL WARRANTS
(Identified cost $2,125,000) ............... 2,030,000
---------------
TOTAL LONG-TERM INVESTMENTS--95.0%
(Identified cost $133,134,661) ............ 153,260,530
---------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------- --------
SHORT-TERM OBLIGATIONS--3.0%
Commercial Paper--3.0%
Anheuser-Busch
5.43%, 7-1-97 ...... A-1+ $ 930 930,000
Preferred Receivables
Funding Corp.
5.60%, 7-2-97 (c) A-1 1,425 1,424,778
International Lease
Finance Corp.
5.51%, 7-7-97 ...... A-1 790 789,275
CXC, Inc. 5.52%,
7-8-97 ............ A-1+ 1,715 1,713,159
-----------------
4,857,212
-----------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $4,857,212) ............... 4,857,212
-----------------
TOTAL INVESTMENTS--98.0%
(Identified cost $137,991,873) ............ 158,118,742(a)
Cash and receivables, less liabilities--2.0% 3,298,474
-----------------
NET ASSETS--100.0% ........................... $ 161,417,216
=================
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $22,663,829 and gross
depreciation of $3,310,365 for federal income tax purposes. At June 30,
1997, the aggregate cost of securities for federal income tax purposes was
$138,765,278.
(b) Non-income producing.
(c) Segregated as collateral for forward currency contracts.
(d) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30, 1997,
these securities amounted to a value of $1,246,291 or 0.8% of net assets.
See Notes to Financial Statements
5
<PAGE>
Phoenix Worldwide Opportunities Fund
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
As a percentage of Total Value of Total Long-Term Investments
(Unaudited)
Advertising ................................. 1.8%
Aerospace & Defense ........................ 2.3
Airlines .................................... 1.1
Autos & Trucks .............................. 2.2
Banks ....................................... 7.0
Beverages ................................. 1.4
Broker-Dealers .............................. 2.2
Chemical .................................... 0.7
Computer Software & Services ............... 0.6
Conglomerates .............................. 0.1
Containers ................................. 0.8
Diversified Financial Services ............ 5.2
Electrical Equipment ........................ 3.6
Electronics ................................. 5.8
Entertainment, Leisure & Gaming ............ 2.0
Food ....................................... 2.5
Health Care--Drugs ........................ 5.7
Hospital Management & Services ............ 2.0
Insurance ................................. 5.3
Leasing/Rental .............................. 0.9
Lodging & Restaurants ..................... 1.1
Machinery ................................. 1.6
Medical Products & Supplies ............... 0.3
Miscellaneous .............................. 0.8
Multi-Industry .............................. 0.7
Office & Business Equipment ............... 2.0
Oil ....................................... 2.2
Oil Service & Equipment ..................... 2.7
Pollution Control ........................... 1.3
Professional Services ..................... 3.5
Publishing, Broadcasting, Printing & Cable 2.8
Real Estate ................................. 1.5
Retail .................................... 2.7
Retail--Food .............................. 1.7
Steel ....................................... 0.9
Telecommunications Equipment ............... 6.4
Textile & Apparel ........................... 3.7
Tobacco .................................... 3.1
Utility--Electric ........................... 1.5
Utility--Telephone ........................ 6.3
------
100.0%
======
See Notes to Financial Statements
6
<PAGE>
Phoenix Worldwide Opportunities Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
Assets
Investment securities at value
(Identified cost $137,991,873) $158,118,742
Cash 17,286
Receivables
Investment securities sold 6,063,395
Fund shares sold 73,080
Dividends and interest 281,584
Tax reclaim 67,270
Net unrealized appreciation on
forward currency contracts 85,923
-------------
Total assets 164,707,280
-------------
Liabilities
Payables
Investment securities purchased 2,067,015
Fund shares repurchased 109,441
Closed foreign currency contracts 675,644
Transfer agent fee 99,525
Investment advisory fee 99,186
Distribution fee 38,200
Financial agent fee 7,098
Trustees' fee 2,809
Accrued expenses 191,146
-------------
Total liabilities 3,290,064
-------------
Net Assets $161,417,216
=============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $126,953,154
Undistributed net investment income 1,360,579
Accumulated net realized gain 12,892,630
Net unrealized appreciation 20,210,853
-------------
Net Assets $161,417,216
=============
Class A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $153,005,453) 14,234,784
Net asset value per share $10.75
Offering price per share
$10.75/(1-4.75%) $11.29
Class B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $8,411,763) 798,733
Net asset value and offering price per share $10.53
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1997
Investment Income
Dividends $ 1,837,274
Interest 1,118,172
Foreign taxes withheld (120,967)
-----------
Total investment income 2,834,479
-----------
Expenses
Investment advisory fee 1,137,290
Distribution fee--Class A 362,581
Distribution fee--Class B 66,061
Financial agent fee 64,066
Transfer agent 359,882
Custodian 180,497
Printing 62,128
Professional 50,440
Registration 31,306
Trustees 22,470
Miscellaneous 31,778
-----------
Total expenses 2,368,499
-----------
Net investment income 465,980
-----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 14,387,429
Net realized gain on foreign currency transactions 1,397,324
Net change in unrealized appreciation (depreciation)
on investments 3,616,111
Net change in unrealized appreciation (depreciation)
on foreign currency and foreign currency (405,680)
-----------
transactions
Net gain on investments 18,995,184
-----------
Net increase in net assets resulting from
operations $19,461,164
===========
See Notes to Financial Statements
7
<PAGE>
Phoenix Worldwide Opportunities Fund
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
June 30, 1997 June 30, 1996
--------------- ---------------
<S> <C> <C>
From Operations
Net investment income (loss) $ 465,980 $ (291,385)
Net realized gain 15,784,753 22,536,010
Net change in unrealized appreciation (depreciation) 3,210,431 4,669,762
------------- -------------
Increase in net assets resulting from operations 19,461,164 26,914,387
------------- -------------
From Distributions to Shareholders
Net investment income--Class A (547,706) --
Net investment income--Class B (3,491) --
Net realized gains--Class A (10,600,864) (7,904,822)
Net realized gains--Class B (464,200) (220,021)
In excess of net investment income--Class A (36,512) --
In excess of net investment income--Class B (233) --
------------- -------------
Decrease in net assets from distributions to shareholders (11,653,006) (8,124,843)
------------- -------------
From Share Transactions
Class A
Proceeds from sales of shares (7,287,155 and 9,725,785 shares, respectively) 73,684,613 94,334,086
Net asset value of shares issued from reinvestment of distributions (1,017,922 and
764,481 shares, respectively) 9,812,762 6,849,750
Cost of shares repurchased (8,259,993 and 10,285,880 shares, respectively) (83,959,118) (99,875,851)
------------- -------------
Total (461,743) 1,307,985
------------- -------------
Class B
Proceeds from sales of shares (294,976 and 318,603 shares, respectively) 2,922,714 3,048,479
Net asset value of shares issued from reinvestment of distributions (40,165 and 20,140
shares, respectively) 381,165 178,437
Cost of shares repurchased (99,485 and 92,969 shares, respectively) (994,110) (893,724)
------------- -------------
Total 2,309,769 2,333,192
------------- -------------
Increase in net assets from share transactions 1,848,026 3,641,177
------------- -------------
Net increase in net assets 9,656,184 22,430,721
Net Assets
Beginning of period 151,761,032 129,330,311
------------- -------------
End of period (including undistributed net investment income of $1,360,579
and $85,217, respectively) $161,417,216 $151,761,032
============= =============
</TABLE>
See Notes to Financial Statements
8
<PAGE>
Phoenix Worldwide Opportunities Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------------------------------
Year Ended June 30,
1997 1996 1995 1994 1993
----------------------- ------------------- ------------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.29 $ 9.04 $ 10.17 $ 8.00 $ 7.18
Income from investment operations(6)
Net investment income (loss) 0.03(1) (0.02)(1) 0.01(1) 0.01 0.03
Net realized and unrealized gain 1.25 1.87 0.56 2.19 0.79
---------- ----------- ---------- -------- --------
Total from investment operations 1.28 1.85 0.57 2.20 0.82
---------- ----------- ---------- -------- --------
Less distributions:
Dividends from net investment income (0.04) -- -- (0.03) --
Dividends from net realized gains (0.78) (0.60) (1.37) -- --
In excess of net realized gains -- -- (0.33) -- --
---------- ----------- ---------- -------- --------
Total distributions (0.82) (0.60) (1.70) (0.03) --
---------- ----------- ---------- -------- --------
Change in net asset value 0.46 1.25 (1.13) 2.17 0.82
---------- ----------- ---------- -------- --------
Net asset value, end of period $ 10.75 $ 10.29 $ 9.04 $ 10.17 $ 8.00
========== =========== ========== ======== ========
Total return(2) 13.40% 21.39% 6.53% 27.46% 11.42%
Ratios/supplemental data:
Net assets, end of period (thousands) $ 153,005 $ 146,052 $ 126,481 $118,707 $ 88,870
Ratio to average net assets of:
Operating expenses 1.53% 1.60% 1.80% 1.50% 1.88%
Net investment income (loss) 0.34% (0.19)% 0.16% 0.09% 0.61%
Portfolio turnover 234% 245% 277% 259% 95%
Average commission rate paid(5) $ 0.0180 N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
Class B
----------------------------------------------------------
From
Inception
Year Ended June 30, 7/15/94 to
1997 1996 6/30/95
---------- ----------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.14 $ 8.98 $ 10.40
Income from investment operations(6)
Net investment income (loss) (0.03)(1) (0.08)(1) (0.02)(1)
Net realized and unrealized gain 1.21 1.84 0.30
---------- ----------- ----------
Total from investment operations 1.18 1.76 0.28
---------- ----------- ----------
Less distributions:
Dividends from net investment income (0.01) -- --
Dividends from net realized gains (0.78) (0.60) (1.37)
In excess of net realized gains -- -- (0.33)
---------- ----------- ----------
Total distributions (0.79) (0.60) (1.70)
---------- ----------- ----------
Change in net asset value 0.39 1.16 (1.42)
---------- ----------- ----------
Net asset value, end of period $ 10.53 $ 10.14 $ 8.98
========== =========== ==========
Total return(2) 12.46% 20.50% 3.54%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $ 8,412 $ 5,709 $ 2,849
Ratio to average net assets of:
Operating expenses 2.29% 2.34% 2.61% (4)
Net investment income (loss) (0.35)% (0.86)% (0.33)%(4)
Portfolio turnover 234% 245% 277%
Average commission rate paid(5) $ 0.0180 N/A N/A
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales load is not reflected in the total return calculation.
(3) Not annualized
(4) Annualized
(5) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
(6) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the timing of share purchases and redemptions.
See Notes to Financial Statements
9
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix Worldwide Opportunities Fund ("the Fund") is organized as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940, as amended, as a diversified, open-end management investment company.
The Fund's investment objective is capital appreciation by investing in equity
securities of domestic and non-U.S. issuers. The Fund offers both Class A and
Class B shares. Class A shares are sold with a front-end sales charge of up to
4.75%. Class B shares are sold with a contingent deferred sales charge which
declines from 5% to zero depending on the period of time the shares are held.
Both classes of shares have identical voting, dividend, liquidation and other
rights and the same terms and conditions, except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan. Income and expenses of the Fund are borne pro rata by the
holders of both classes of shares, except that each class bears distribution
expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. 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, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. Security valuation:
Equity securities are valued at the last sale price, or if there had been
no sale of the security on that day, at the last bid price. Short-term
investments having a remaining maturity of 60 days or less are valued at
amortized cost which approximates market. All other securities and assets are
valued at their fair value as determined in good faith by or under the direction
of the Trustees.
B. Security transactions and related income:
Security transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date, or in the case of certain foreign securities,
as soon as the Fund is notified. Realized gains and losses from investment
transactions are reported on the identified cost basis.
C. Income taxes:
It is the policy of the Fund to comply with the requirements of the
Internal Revenue Code (the "Code"), applicable to regulated investment
companies, and to distribute substantially all of its taxable income to its
shareholders. In addition, the Fund intends to distribute an amount sufficient
to avoid imposition of any excise tax under Section 4982 of the Code. Therefore,
no provision for federal income taxes or excise taxes has been made.
D. Distributions to shareholders:
Distributions to shareholders are recorded on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of non-taxable dividends, expiring
capital loss carryforwards, foreign currency gain/loss, partnerships, and losses
deferred due to wash sales and excise tax regulations. Permanent book and tax
basis differences relating to shareholder distributions will result in
reclassifications to paid in capital.
E. Foreign currency translation:
Foreign securities and other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at the
trade date. The gain or loss resulting from a change in currency exchange rates
between the trade and settlement dates of a portfolio transaction is treated as
a gain or loss on foreign currency. Likewise, the gain or loss resulting from a
change in currency exchange rates between the date income is accrued and paid is
treated as a gain or loss on foreign currency. The Fund does not separate that
portion of the results of operations arising from changes in exchange rates and
that portion arising from changes in the market prices of securities.
F. Forward currency contracts:
The Fund may enter into forward currency contracts in conjunction with the
planned purchase or sale of foreign denominated securities in order to hedge the
U.S. dollar cost or proceeds and to manage the Fund's currency exposure. Forward
currency contracts involve, to varying degrees, elements of market risk in
excess of the amount recognized in the statement of assets and liabilities.
Risks arise from the possible movements in foreign exchange rates or if the
counterparty does not perform under the contract.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any number of days from the
date of the contract agreed upon by the parties, at a price set at the time of
the contract. These contracts are traded directly between currency traders and
their customers. The contract is marked-to-market daily and the change in market
value is
10
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Continued)
recorded by the Fund as an unrealized gain (or loss). When the contract is
closed or offset with the same counterparty, the Fund records a realized gain
(or loss) equal to the change in the value of the contract when it was opened
and the value at the time it was closed or offset.
2. INVESTMENT ADVISORY FEES AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the Investment Adviser,
National Securities and Research Corporation, an indirect, majority-owned
subsidiary of Phoenix Home Life Mutual Insurance Company ("PHL"), is entitled to
a fee at an annual rate of 0.75% of the average daily net assets of the Fund for
the first $1 billion.
As Distributor of the Fund's shares, Phoenix Equity Planning Corp.
("PEPCO"), an indirect majority-owned subsidiary of PHL, has advised the Fund
that it retained net selling commissions of $9,821 for Class A shares and
deferred sales charges of $22,283 for Class B shares for the year ended June 30,
1997. In addition, the Fund pays PEPCO a distribution fee at an annual rate of
0.25% for Class A shares and 1.00% for Class B shares of the average daily net
assets of the Fund. The Distribution Plan for Class A shares provides for fees
to be paid up to a maximum on an annual basis of 0.30%; the Distributor has
voluntarily agreed to limit the fee to 0.25%. The Distributor has advised the
Fund that of the total amount expensed for the year ended June 30, 1997,
approximately $162,567 was retained by the Distributor, $254,382 was paid to
unaffiliated participants and $11,693 was paid to W.S. Griffith, an indirect
subsidiary of PHL.
As Financial Agent of the Fund, PEPCO received a fee for bookkeeping,
administration, and pricing services at an annual rate of 0.03% of the average
daily net assets of the Fund through December 31, 1996, and starting on January
1, 1997, at an annual rate of 0.05% of average daily net assets up to $100
million, 0.04% of average daily net assets of $100 million to $300 million,
0.03% of average daily net assets of $300 million through $500 million, and
0.015% of average daily net assets greater than $500 million; a minimum fee may
apply. PEPCO serves as the Fund's Transfer Agent with State Street Bank and
Trust Company as sub-transfer agent. For the year ended June 30, 1997, transfer
agent fees were $359,882 of which PEPCO retained $137,131 which is net of the
fees paid to State Street.
At June 30, 1997, PHL and affiliates held 171 Class A shares and 1 Class B
share of the Fund with a combined value of $1,853.
3. PURCHASE AND SALE OF SECURITIES
Portfolio purchases and sales of investments, excluding short-term
securities, for the year ended June 30, 1997, aggregated $308,758,822 and
$307,198,933 respectively. There were no purchases or sales of long-term U.S.
Government securities.
4. FORWARD CURRENCY CONTRACTS
As of June 30, 1997, the Fund had entered into the following forward
currency contract which contractually obligates the Fund to deliver currencies
at specified dates:
Net
Contracts In Unrealized
to Exchange Settlement Appreciation
Deliver For Date Value (Depreciation)
- -------------- --------------- ------------ ------------ ---------------
FL 8,630,000 USD 4,488,013 8/1/97 $4,402,090 $85,923
========
FL = Dutch Florin
USD = U.S. Dollar
5. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a fund's ability to
repatriate such amounts.
6. RECLASS OF CAPITAL ACCOUNTS
The Fund has recorded several reclassifications in the capital accounts.
These reclassifications have no impact on the net asset value of the Fund and
are designed generally to present undistributed income and realized gains on a
tax basis which is considered to be more informative to the shareholder. For the
year ended June 30, 1997, the Fund has increased undistributed net investment
income by $1,397,324 and decreased accumulated net realized gains by $1,397,324.
TAX INFORMATION NOTICE (UNAUDITED)
For the fiscal year ended June 30, 1997, the Fund distributed long-term
capital gains dividends of $2,975,241.
11
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO] Price Waterhouse LLP
To the Trustees and Shareholders of
Phoenix Worldwide Opportunities Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments (except for bond ratings), and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Phoenix Worldwide Opportunities Fund (the "Fund") at June 30, 1997, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended and the financial highlights for
each of the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 1997 by correspondence with the custodian
and brokers, provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Boston, Massachusetts
August 6, 1997
12
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND PART C--OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part A: Financial Highlights
Included in Part B: Financial Statements and Notes thereto, and
Report of Independent Accountants are included in
the Annual Report to Shareholders for the year
ended June 30, 1997, incorporated by reference
(b) Exhibits:
<TABLE>
<S> <C>
1.1* Declaration of Trust of the Registrant, previously filed and filed via Edgar herewith, herein incorporated by
reference.
1.2 Amendment to Declaration of Trust designating Classes of Shares, filed via Edgar with Post-Effective Amendment
No. 61 on October 30, 1995, incorporated herein by reference.
2.1* By-laws of the Registrant, previously filed and filed via Edgar herewith, herein incorporated by reference.
3. None.
4. Reference is made to Article V of Registrant's Declaration of Trust, as amended, referred to in Exhibit 1.1.
5.1* Management Agreement between Registrant and National Securities & Research Corporation dated May 14,
1993, filed with Post-Effective Amendment No. 58 on August 30, 1993 and filed via Edgar herewith, herein
incorporated by reference.
5.2 Amendment to Management Agreement between Registrant and National Securities & Research Corporation,
dated January 1, 1994, filed via Edgar with Post-Effective Amendment No. 61 on October 30, 1995, incorporated
herein by reference.
6.1* Underwriting Agreement (Class A Shares) between Registrant and Phoenix Equity Planning Corporation ("Equity
Planning") dated May 14, 1993, filed with Post-Effective Amendment No. 58 on August 30, 1993 and filed via
Edgar herewith, herein incorporated by reference.
6.2* Underwriting Agreement for Class B Shares between Registrant and Equity Planning, filed with Post-Effective
Amendment No. 59 on May 4, 1994 and filed via Edgar herewith, incorporated herein by reference.
7. None.
8.* Custody Agreement between Registrant and Brown Brothers Harriman & Co. dated August 11, 1994, filed with Post-
Effective Amendment No. 60 on October 26, 1994 and filed via Edgar herewith, incorporated herein by reference.
9.1* Transfer Agency and Service Agreement between Registrant and Phoenix Equity Planning Corporation dated
June 1, 1994, filed with Post-Effective Amendment No. 60 on October 26, 1994 and filed via EDGAR herewith,
incorporated herein by reference.
9.2* Form of Sales Agreement, previously filed with Post-Effective Amendment No. 59 on May 4, 1994 and filed via
EDGAR herewith, incorporated herein by reference.
9.3* Financial Agent Agreement between Registrant and Phoenix Equity Planning Corporation dated December 11,
1996, filed via EDGAR herewith.
9.4* First Amendment to Financial Agent Agreement between Registrant and Phoenix Equity Planning Corporation
dated February 26, 1997, filed via EDGAR herewith.
9.5* Second Amendment to Financial Agent Agreement between Registrant and Phoenix Equity Planning Corporation
dated July 22, 1997, filed via EDGAR herewith.
10. Opinion as to legality of the shares filed via Edgar with Post Effective Amendment No. 61 on October 30, 1995,
incorporated herein by reference.
11.* Consent of Independent Accountant filed herewith.
12. Not applicable.
13. None.
14. None.
</TABLE>
C-1
<PAGE>
<TABLE>
<S> <C>
15.1* Amended and Restated Distribution Plan Pursuant to Rule 12b-1 for Class A Shares filed via Edgar with Post-
Effective Amendment No. 63 on October 24, 1997.
15.2* Amended and Restated Distribution Plan Pursuant to Rule 12b-1 for Class B Shares filed with Post-Effective
Amendment No. 63 on October 24, 1997.
16.* Schedule for computation of total return, previously filed with Post-Effective Amendment No. 60 on October 26,
1994 and filed via Edgar herewith, incorporated herein by reference.
17.* Financial Data Schedule filed herewith and reflected on EDGAR as Exhibit 27.
18.1 Rule 18f-3 Dual Distribution Plan effective November 15, 1995, filed via Edgar with Post-Effective Amendment
No. 62 on October 29, 1996, and incorporated herein by reference.
18.2 Amended and Restated Rule 18f-3 Dual Distribution Plan effective July 1, 1996, filed via Edgar with Post-
Effective Amendment No. 62 on October 29, 1996, incorporated herein by reference.
18.3* First Amendment to the Amended and Restated Plan Pursuant to Rule 18f-3 effective May 28, 1997 filed via
Edgar with Post-Effective Amendment No. 63 on October 24, 1997.
19. Powers of attorney filed via Edgar with Post-Effective Amendment No. 62 on October 29, 1996, incorporated
herein by reference.
</TABLE>
- -----------
*Filed herewith
Item 25. Persons Controlled by or Under Common Control With Registrant
No person is controlled by, or under common control, with the
Registrant.
Item 26. Number of Holders of Securities
As of August 29, 1997, the number of record holders of each class of
securities of the Registrant was as follows:
Title of Class Number of Record-holders
Shares of Beneficial Interest--Class A 13,731
Shares of Beneficial Interest--Class B 1,130
Item 27. Indemnification
Registrant's indemnification provision is set forth in Post-Effective
Amendment No. 58 filed with the Securities and Exchange Commission on
June 30, 1993, and is incorporated herein by reference.
Item 28. Business and Other Connections of Investment Adviser
See "Management of the Fund" in the Prospectus and "Services of the
Adviser" and "Trustees and Officers" in the Statement of Additional
Information which is included in this Post-Effective Amendment. For
information as to the business, profession, vocation or employment of
a substantial nature of directors and officers of National Securities
& Research Corporation, the Adviser, reference is made to the
Advisers' current Form ADV (SEC File No. 801-8177) filed under the
Investment Advisers Act of 1940 and incorporated herein by reference.
Item 29. Principal Underwriter
(a) Equity Planning also serves as the principal underwriter for the following
other investment companies:
Phoenix Series Fund, Phoenix Strategic Allocation Fund, Inc., Phoenix Duff
& Phelps Institutional Mutual Funds, Phoenix Multi-Sector Fixed Income Fund,
Inc., Phoenix Multi-Sector Short Term Bond Fund, Phoenix Multi-Portfolio
Fund, Phoenix California Tax Exempt Bonds, Inc., Phoenix Income and Growth
Fund, Phoenix Strategic Equity Series Fund, Phoenix Equity Series Fund,
Phoenix-Aberdeen Series Fund, Phoenix-Engemann Funds, Phoenix Investment
Trust 97 (currently in registration), Phoenix Home Life Variable Universal
Life Account, Phoenix Home Life Variable Accumulation Account, PHL Variable
Accumulation Account, Phoenix Life and Annuity Variable Universal Life
Account, and PHL Variable Separate Account MUAI.
(b) Directors and executive officers of Phoenix Equity Planning Corporation are
as follows:
<TABLE>
<CAPTION>
Name and Position and Offices Position and Offices
Principal Address with Distributor with Registrant
- ------------------------ ------------------------ -------------------------
<S> <C> <C>
Michael E. Haylon Director Executive Vice President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
</TABLE>
C-2
<PAGE>
<TABLE>
<CAPTION>
Name and Position and Offices Position and Offices
Principal Address with Distributor with Registrant
- ------------------------- ------------------------------- ----------------------
<S> <C> <C>
Philip R. McLoughlin Director and President Trustee and President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
David R. Pepin Director and Executive None
56 Prospect Street Vice President
P.O. Box 150480
Hartford, CT 06115-0480
Paul Atkins Senior Vice President and None
56 Prospect Street Sales Manager
P.O. Box 150480
Hartford, CT 06115-0480
William R. Moyer Senior Vice President and Vice President
100 Bright Meadow Blvd. Chief Financial Officer
P.O. Box 2200
Enfield, CT 06083-2200
Leonard J. Saltiel Managing Director, Vice President
56 Prospect Street Infrastructure
P.O. Box 150480 and Operations
Hartford, CT 06115-0480
John F. Sharry Managing Director, Mutual None
100 Bright Meadow Blvd. Fund Distribution
P.O. Box 2200
Enfield, CT 06083-2200
G. Jeffrey Bohne Vice President, Mutual Fund Secretary
101 Munson Street Customer Service
Greenfield, MA 01301
Eugene A. Charon Vice President and Controller None
100 Bright Meadow Blvd.
P.O. Box 2200
Enfield, CT 06083-2200
Nancy G. Curtiss Vice President and Treasurer, Treasurer
56 Prospect Street Fund Accounting
P.O. Box 150480
Hartford, CT 06115-0480
Elizabeth R. Sadowinski Vice President, None
56 Prospect Street Administration
P.O. Box 150480
Hartford, CT 06115-0480
Thomas N. Steenburg Vice President, Counsel Assistant Secretary
56 Prospect Street and Secretary
Hartford, CT 06115
William E. Keen, III Assistant Vice President, Vice President
100 Bright Meadow Blvd. Mutual Fund Regulation
P.O. Box 2200
Enfield, CT 06083-2200
</TABLE>
(c) To the best of the Registrant's knowledge, no commissions or other
compensation was received by any principal underwriter who is not an
affiliated person of the Registrant or an affiliated person of such
affiliated person, directly or indirectly, from the Registrant during the
Registrant's last fiscal year.
C-3
<PAGE>
Item 30. Location of Accounts and Records
Persons maintaining physical possession of accounts, books and other
documents required to be maintained by Section 31(a) of the Investment
Company Act of 1940 and the Rules promulgated thereunder include
Registrant's investment adviser, National Securities & Research
Corporation; Registrant's financial agent, transfer agent and
principal underwriter, Phoenix Equity Planning Corporation;
Registrant's dividend disbursing agent, State Street Bank and Trust
Company; and Registrant's custodian, Brown Brothers Harriman & Co. The
address of the Secretary of the Trust is 101 Munson Street,
Greenfield, Massachusetts 01301; the address of National Securities &
Research Corporation is 56 Prospect Street, Hartford, Connecticut
06115; the address of Phoenix Equity Planning Corporation is 100
Bright Meadow Boulevard, P.O. Box 2200, Enfield, Connecticut
06083-2200; the address of the dividend disbursing agent is P.O. Box
8301, Boston, Massachusetts 02266-8301, Attention: Phoenix Funds, and
the address for the custodian is 40 Water Street, Boston,
Massachusetts 02109.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Registrant undertakes to furnish each person to whom a prospectus
is delivered with a copy of Registrant's latest annual report to
shareholders upon request and without charge.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Hartford, and
State of Connecticut on the 24th day of October, 1997.
PHOENIX WORLDWIDE OPPORTUNITIES FUND
ATTEST: /s/ Thomas N. Steenburg By: /s/ Philip R. McLoughlin
----------------------------- -----------------------------------
Thomas N. Steenburg Philip R. McLoughlin
Assistant Secretary President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities indicated, on this 24th day of October, 1997.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
- --------------------------------
C. Duane Blinn* Trustee
- --------------------------------
Robert Chesek* Trustee
- --------------------------------
E. Virgil Conway* Trustee
- --------------------------------
Nancy G. Curtiss* Treasurer (principal financial and
accounting officer)
- --------------------------------
Harry Dalzell-Payne* Trustee
- -------------------------------
Francis E. Jeffries* Trustee
- --------------------------------
Leroy Keith, Jr.* Trustee
/s/ Philip R. McLoughlin
- --------------------------------
Philip R. McLoughlin Trustee and President
- --------------------------------
Everett L. Morris* Trustee
- --------------------------------
James M. Oates* Trustee
- --------------------------------
Calvin J. Pedersen* Trustee
- --------------------------------
Philip R. Reynolds* Trustee
- --------------------------------
Herbert Roth, Jr.* Trustee
- --------------------------------
Richard E. Segerson* Trustee
- --------------------------------
Lowell P. Weicker, Jr.* Trustee
*By: /s/ Philip R. McLoughlin
- --------------------------------
*Philip R. McLoughlin pursuant to powers of attorney filed previously.
</TABLE>
S-1(c)
---------------
DECLARATION OF TRUST OF
NATIONAL WORLDWIDE OPPORTUNITIES FUND
DATED: NOVEMBER 4, 1991
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I -- Name and Definitions 1
--------------------
Section 1.1 Name 1
Section 1.2 Definitions l
ARTICLE II -- Trustees 3
--------
Section 2.1 General Powers 3
Section 2.2 Investments 4
Section 2.3 Legal Title 6
Section 2.4 Issuance and Repurchase of Shares 6
Section 2.5 Delegation; Committees 6
Section 2.6 Collection and Payment 6
Section 2.7 Expenses 7
Section 2.8 Manner of Acting; By-laws 7
Section 2.9 Miscellaneous Powers 7
Section 2.10 Principal Transactions 8
Section 2.11 Number of Trustees 8
Section 2.12 Election and Term 8
Section 2.13 Resignation and Removal 9
Section 2.14 Vacancies 9
Section 2.15 Delegation of Power to Other 10
Trustees
ARTICLE III -- Contracts 10
---------
Section 3.1 Distribution Contract 10
Section 3.2 Advisory or Management Contract 10
Section 3.3 Administrator 11
Section 3.4 Transfer Agent and Shareholder
Servicing Agents 11
Section 3.5 Affiliations of Trustees or 11
Officers, Etc.
Section 3.6 Compliance with 1940 Act 12
ARTICLE IV -- Limitations of Liability of 12
Shareholders, Trustees and Others
---------------------------------
Section 4.1 No Personal Liability of 12
Shareholders, Trustees, Etc.
Section 4.2 Non-Liability of Trustees, Etc. 13
Section 4.3 Mandatory Indemnification 13
Section 4.4 No Bond Required of Trustees 15
Section 4.5 No Duty of Investigation; 15
Notice in Trust Instruments, Etc.
Section 4.6 Reliance on Experts, Etc. 16
<PAGE>
ARTICLE V -- Shares of Beneficial Interest 16
-----------------------------
Section 5.1 Beneficial Interest 16
Section 5.2 Rights of Shareholders 16
Section 5.3 Trust Only 17
Section 5.4 Issuance of Shares 17
Section 5.5 Register of Shares 17
Section 5.6 Transfer of Shares 17
Section 5.7 Notices, Reports 18
Section 5.8 Treasury Shares 18
Section 5.9 Voting Powers 19
Section 5.10 Meetings of Shareholders 19
Section 5.11 Series Designation 20
Section 5.12 Assent to Declaration of Trust 22
Section 5.13 Class Designation 22
ARTICLE VI -- Redemption and Repurchase of Shares 23
-----------------------------------
Section 6.1 Redemption of Shares 23
Section 6.2 Price 24
Section 6.3 Payment 24
Section 6.4 Effect of Suspension of 24
Determination of Net Asset Value
Section 6.5 Repurchase by Agreement 25
Section 6.6 Redemption of Sub-Minimum Accounts 25
Section 6.7 Redemption of Shares in Order to 25
Qualify as Regulated Investment
Company; Disclosure of Holding
Section 6.8 Reductions in Number of 26
outstanding Shares Pursuant
to Net Asset Value Formula
Section 6.9 Suspension of Right of Redemption 26
ARTICLE VII -- Determination of Net Asset Value, 26
Net Income and Distributions
--------------------------------
Section 7.1 Net Asset Value 26
Section 7.2 Distributions to Shareholders 27
Section 7.3 Determination of Net Income; 28
Constant Net Asset Value;
Reduction of Outstanding Shares
Section 7.4 Allocation Between Principal 29
and Income
Section 7.5 Power to Modify Foregoing 29
Procedures
- ii -
<PAGE>
ARTICLE VIII -- Duration; Termination of Trust; 29
Amendment: Mergers, Etc.
------------------------------
Section 8.1 Duration 29
Section 8.2 Termination of Trust 29
Section 8.3 Amendment Procedure 30
Section 8.4 Merger, Consolidation and Sale 31
of Assets
Section 8.5 Incorporation 31
ARTICLE IX -- Reports to Shareholders 32
-----------------------
ARTICLE X -- Miscellaneous 32
-------------
Section 10.1 Filing 32
Section 10.2 Governing Law 33
Section 10.3 Counterparts 33
Section 10.4 Reliance by Third Parties 33
Section 10.5 Provisions in Conflict with 33
Law or Regulations
Section 10.6 Principal Place of Business 34
- iii -
<PAGE>
DECLARATION OF TRUST OF
NATIONAL WORLDWIDE OPPORTUNITIES FUND
DATED NOVEMBER 4, 1991
DECLARATION OF TRUST made this 4th day of November, 1991 by the undersigned
Trustees (together with all other persons from time to time duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof, the "Trustees");
WHEREAS, the Trustees desire to establish a trust for the investment and
reinvestment of funds contributed thereto; and
WHEREAS, the Trustees desire that the beneficial interest in the trust
assets be divided into transferable shares of beneficial interest, as
hereinafter provided;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust established hereunder shall be held and managed in
trust for the benefit of the holders, from time to time, of the shares of
beneficial interest issued hereunder and subject to the provisions hereof.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the Trust created hereby is "National
Worldwide Opportunities Fund".
Section 1.2. Definitions. Wherever they are used herein, the following
terms have the following respective meanings:
(a) "Administrator" means a party furnishing services to the Trust pursuant
to any contract described in Section 3.3 hereof.
(b) "By-laws" means the By-laws referred to in Section 2.8 hereof, as from
time to time amended.
(c) "Class" means the two or more classes as may be established and
designated from time to time by the Trustees pursuant to Section 5.13 hereof.
(d) The term "Commission" has the meaning given it in the 1940 Act. The
term "Interested Person" has the meaning given it in the 1940 Act, as modified
by any applicable order or orders of the Commission. Except as otherwise defined
by the Trustees in conjunction with the establishment of any series of Shares,
the term "vote of a majority of the Shares outstanding and entitled
<PAGE>
to vote" shall have the same meaning as the term "vote of a majority of the
outstanding voting securities" given it in the 1940 Act.
(e) "Custodian" means any Person other than the Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(f) "Declaration" means this Declaration of Trust as further amended from
time to time. Reference in this Declaration of Trust to "Declaration" "hereof"
"herein" and "hereunder" shall be deemed to refer to this Declaration rather
than exclusively to the article or section in which such words appear.
(g) "Distributor" means the party, other than the Trust, to the contract
described in Section 3.1 hereof.
(h) "His" shall include the feminine and neuter, as well as the masculine
genders.
(i) "Investment Adviser" means the party, other than the Trust, to the
contract described in Section 3.2 hereof.
(j) "Municipal Bonds" means obligations issued by or on behalf of states,
territories of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, the interest from which
is exempt from regular Federal income tax.
(k) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.
(1) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures and other entities, whether or not legal
entities, and governments and agencies and political subdivisions thereof.
(m) "Series" individually or collectively means the two or more Series as
may be established and designated from time to time by the Trustees pursuant to
Section 5.11 hereof. Unless the context otherwise requires, the term "Series"
shall include Classes into which shares of the Trust, or of a Series, may be
divided from time to time.
(n) "Shareholder" means a record owner of Outstanding Shares.
- 2 -
<PAGE>
(o) "Shareholder Servicing Agent" means a party furnishing services to the
Trust pursuant to any shareholder servicing contract described in Section 3.4
hereof.
(p) "Shares" means the equal proportionate units of interest into which the
beneficial interest in the Trust shall be divided from time to time, including
the Shares of any and all Series and Classes which may be established by the
Trustees, and includes fractions of Shares as well as whole Shares. "Outstanding
Shares" means those Shares shown from time to time on the books of the Trust or
its Transfer Agent as then issued and outstanding, but shall not include Shares
which have been redeemed or repurchased by the Trust and which are at the time
held in the treasury of the Trust.
(q) "Transfer Agent" means any one or more Persons other than the Trust who
maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.
(r) The "Trust" means the Trust referred to in Section 1.1.
(s) The "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees.
(t) The "Trustees" means the person or persons who has or have signed this
Declaration, so long as he or they shall continue in office in accordance with
the terms hereof, and all other persons who may from time to time be duly
qualified and serving as Trustees in accordance with the provisions of Article
II hereof, and reference herein to a Trustee or the Trustees shall refer to such
person or persons in this capacity or their capacities as trustees hereunder.
ARTICLE II
TRUSTEES
Section 2.1. General Powers. The Trustees shall have exclusive and
absolute control over the Trust Property and over the business of the Trust to
the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may be
permitted by this Declaration. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the Commonwealth of Massachusetts,
in any and all states of the United States of America, in the District of
Columbia, and in any and all commonwealths, territories, dependencies, colonies,
- 3 -
<PAGE>
possessions, agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to promote the
interests of the Trust although such things are not herein specifically
mentioned. Any determination as to what is in the interests of the Trust made by
the Trustees in good faith shall be conclusive. In construing the provisions of
this Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid power. Such powers of the Trustees may be exercised
without order of or resort to any court.
Section 2.2. Investments. The Trustees shall have the power:
(a) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To invest in, hold for investment, or reinvest in, securities,
including common and preferred stocks; warrants; bonds, debentures, bills, time
notes and all other evidences of indebtedness; negotiable or non-negotiable
instruments; any form of gold or other precious metal; commodity contracts;
shares of, or any other interest in, any investment company as defined in the
1940 Act; government securities, including securities of any state, municipality
or other political subdivision thereof, or any governmental or
quasi-governmental agency or instrumentality; and money market instruments
including bank certificates of deposit, finance paper, commercial paper, bankers
acceptances and all kinds of repurchase agreements, of any corporation, company,
trust, association, firm or other business organization however established, and
of any country, state, municipality or other political subdivision, or any
governmental or quasi-governmental agency or instrumentality; "when issued"
contracts for any such securities, contracts or interests; to retain Trust
assets in cash and from time to time to change the securities contracts or
interests in which the assets of the Trust are invested.
(c) To acquire (by purchase, subscription or otherwise), to hold, to trade
in and deal in, to acquire any rights or options to purchase or sell, to sell or
otherwise dispose of, to lend, and to pledge any such securities, contracts or
interests, and to enter into repurchase agreements and forward foreign currency
exchange contracts, to purchase and sell futures contracts on securities,
securities indices and foreign currencies, to purchase or sell options on such
contracts, foreign currency
- 4 -
<PAGE>
contracts, and foreign currencies and to engage in all types of hedging and risk
management transactions.
(d) To exercise all rights, powers and privileges of ownership or interest
in all securities, repurchase agreements, futures contracts and options and
other assets included in the Trust Property, including the right to vote thereon
and other wise act with respect thereto and to do all acts for the preservation,
protection, improvement and enhancement in value of all such assets.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or other wise) any property, real or
personal, including cash, and any interest therein.
(f) To borrow money and in this connection issue notes or other evidence of
indebtedness; to secure borrowings by mortgaging, pledging or otherwise
subjecting as security the Trust Property; to endorse, guarantee, or undertake
the performance of any obligation or engagement of any other Person and to lend
Trust Property.
(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest, and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
and other obligations of any such corporation, company, trust association or
firm.
(h) To enter into a plan of distribution and any related agreements whereby
the Trust may finance directly or indirectly any activity which is primarily
intended to result in the sale of Shares.
(i) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or Proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers, and
the foregoing enumeration of specific powers shall
- 5 -
<PAGE>
not be held to limit or restrict in any manner the general powers of the
Trustees.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust, nor shall the Trustees be limited
by any law limiting the investments which may be made by fiduciaries.
Section 2.3. Legal Title. Legal title to all the Trust Property, including
the property of any Series of the Trust, shall be vested in the Trustees as
joint tenants except that the Trustees shall have power to cause legal title to
any Trust Property to be held by or in the name of one or more of the Trustees,
or in the name of the Trust, or in the name of any other Person as nominee, on
such terms as the Trustees may determine, provided that the interest of the
Trust therein is deemed appropriately protected. The right, title and interest
of the Trustees in the Trust Property and the property of each Series of the
Trust shall vest automatically in each Person who may hereafter become a
Trustee. Upon the termination of the term of office, resignation, removal or
death of a Trustee he shall automatically cease to have any right, title or
interest in any of the Trust Property or the property of any Series of the
Trust, and the right, title and interest of such Trustee in the Trust Property
shall vest automatically in the remaining Trustees. Such vesting and cessation
of title shall be effective whether or not conveyancing documents have been
executed and delivered.
Section 2.4. Issuance and Repurchase of Shares. The Trustees shall have the
power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold, resell,
reissue, dispose of, transfer, and otherwise deal in Shares and, subject to the
provisions set forth in Articles VI and VII and Section 5.11 hereof, to apply to
any such repurchase, redemption, retirement, cancellation or acquisition of
Shares any funds or property of the particular series of the Trust with respect
to which such Shares are issued, whether capital or surplus or otherwise, to the
full extent now or hereafter permitted by the laws of the Commonwealth of
Massachusetts governing business corporations.
Section 2.5. Delegation; Committees. The Trustees shall have power to
delegate from time to time to such of their number or to officers, employees or
agents of the Trust the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Trustees or
otherwise as the Trustees may deem expedient, to the same extent as such
delegation is permitted by the 1940 Act.
Section 2.6. Collection and Payment. The Trustees shall have power to
collect all property due to the Trust; to pay all
- 6 -
<PAGE>
claims, including taxes, against the Trust Property; to prose cute, defend,
compromise or abandon any claims relating to the Trust Property; to foreclose
any security interest securing any obligations, by virtue of which any property
is owed to the Trust; and to enter into releases, agreements and other
instruments.
Section 2.7. Expenses. The Trustees shall have the power to incur and pay
any expenses which in the opinion of the Trustees are necessary or incidental to
carry out any of the purposes of this Declaration, and to pay reasonable
compensation from the funds of the Trust to themselves as Trustees. The Trustees
shall fix the compensation of all officers, employees and Trustees.
Section 2.8. Manner of Acting; By-laws. Except as other wise provided
herein or in the By-laws, any action to be taken by the Trustees may be taken by
a majority of the Trustees present at a meeting of Trustees (a quorum being
present), including any meeting held by means of a conference telephone circuit
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, or by written consents of the entire number
of Trustees then in office. The Trustees may adopt By-laws not inconsistent with
this Declaration to provide for the conduct of the business of the Trust and may
amend or repeal such By-laws to the extent such power is not reserved to the
Shareholders.
Notwithstanding the foregoing provisions of this Section 2.8 and in
addition to such provisions or any other provision of this Declaration or of the
By-laws, the Trustees may by resolution appoint a committee consisting of less
than the whole number of Trustees then in office, which committee may be
empowered to act for and bind the Trustees and the Trust, as if the acts of such
committee were the acts of all the Trustees then in office, with respect to the
institution, prosecution, dismissal, settlement, review or investigation of any
action, suit or proceeding which shall be pending or threatened to be brought
before any court, administrative agency or other adjudicatory body.
Section 2.9. Miscellaneous Powers. Subject to Section 5.11 hereof, the
Trustees shall have the power to: (a) employ or contract with such Persons as
the Trustees may deem desirable for the transaction of the business of the
Trust; (b) enter into joint ventures, partnerships and any other combinations or
associations; (c) remove Trustees or fill vacancies in or add to their number,
elect and remove such officers and appoint and terminate such agents or
employees as they consider appropriate, and appoint from their own number, and
terminate, any one or more committees which may exercise some or all of the
power and
- 7 -
<PAGE>
authority of the Trustees as the Trustees may determine; (d) purchase, and pay
for out of Trust Property, insurance policies insuring the Shareholders, the
Administrator, Trustees, officers, employees, agents, investment advisers,
distributors, selected dealers or independent contractors of the Trust against
all claims arising by reason of holding any such position or by reason of any
action taken or omitted by any such Person in such capacity, whether or not
constituting negligence, or whether or not the Trust would have the power to
indemnify such Person against such liability; (e) establish pension,
profit-sharing, share purchase, and other retirement, incentive and benefit
plans for any Trustees, officers, employees and agents of the Trust; (f) to the
extent permitted by law, indemnify any person with whom the Trust has dealings,
including the Investment Adviser, Distributor, Transfer Agent and selected
dealers, to such extent as the Trustees shall determine; (g) guarantee
indebtedness or contractual obligations of others; (h) determine and change the
fiscal year of the Trust and the method by which its accounts shall be kept; and
(i) adopt a seal for the Trust, but the absence of such seal shall not impair
the validity of any instrument executed on behalf of the Trust.
Section 2.10. Principal Transactions. Except in transactions not permitted
by the 1940 Act or rules and regulations adopted by the Commission, the Trustees
may, on behalf of the Trust, buy any securities from or sell any securities to,
or lend any assets of the Trust to, any Trustee or officer of the Trust or any
firm of which any such Trustee or officer is a member acting as principal, or
have any such dealings with the Investment Adviser, Distributor or transfer
agent or with any Interested Person of such Person; and the Trust may employ any
such Person, or firm or company in which such Person is an Interested Person, as
broker, legal counsel, registrar, transfer agent, dividend disbursing agent or
Custodian upon customary terms.
Section 2.11. Number of Trustees. The number of Trustees shall initially be
one (1), and thereafter shall be such number as shall be fixed from time to time
by a written instrument signed by a majority of the Trustees, provided, however,
that the number of Trustees shall in no event be more than fifteen (15).
Section 2.12. Election and Term. Except for the Trustees named herein or
appointed to fill vacancies pursuant to Section 2.14 hereof, the Trustees shall
be elected by the Shareholders owning of record a plurality of the Shares voting
at a meeting of Shareholders. Such a meeting shall be held on a date fixed by
the Trustees. Except in the event of resignation or removals pursuant to Section
2.13 hereof, each Trustee shall hold office until such time as less than a
majority of the Trustees holding
- 8 -
<PAGE>
office have been elected by Shareholders. In such event the Trustees then in
office will call a Shareholders' meeting for the election of Trustees. Except
for the foregoing circumstances, the Trustees shall continue to hold office and
may appoint successor Trustees.
Section 2.13. Resignation and Removal. Any Trustee may resign his trust
(without the need for any prior or subsequent accounting) by an instrument in
writing signed by him and delivered to the other Trustees and such resignation
shall be effective upon such delivery, or at a later date according to the terms
of the instrument. Any of the Trustees may be removed (provided the aggregate
number of Trustees after such removal shall not be less than one) with cause, by
the action of two-thirds of the remaining Trustees. Any Trustee may be removed
at any meeting of Shareholders by vote of two-thirds of the Outstanding Shares.
The Trustees shall promptly call a meeting of the shareholders for the purpose
of voting upon the question of removal of any such Trustee or Trustees when
requested in writing so to do by the holders of not less than ten percent of the
Outstanding Shares and, in that connection, the Trustees will assist shareholder
communications to the extent provided for in Section 16(c) under the 1940 Act.
Upon the resignation or removal of a Trustee, or his otherwise ceasing to be a
Trustee, he shall execute and deliver such documents as the remaining Trustees
shall require for the purpose of conveying to the Trust or the remaining
Trustees any Trust Property or property of any series of the Trust held in the
name of the resigning or removed Trustee. Upon the incapacity or death of any
Trustee, his legal representative shall execute and deliver on his behalf such
documents as the remaining Trustees shall require as provided in the preceding
sentence.
Section 2.14. Vacancies. The term of office of a Trustee shall terminate
and a vacancy shall occur in the event of the death, resignation, removal,
bankruptcy, adjudicated incompetence or other incapacity to perform the duties
of the office of a Trustee. No such vacancy shall operate to annul the
Declaration or to revoke any existing agency created pursuant to the terms of
the Declaration. In the case of an existing vacancy, including a vacancy
existing by reason of an increase in the number of Trustees, subject to the
provisions of Section 16(a) of the 1940 Act, the remaining Trustees shall fill
such vacancy by the appointment of such other person as they in their discretion
shall see fit, made by a written instrument signed by a majority of the Trustees
then in office. Any such appointment shall not become effective, however, until
the person named in the written instrument of appointment shall have accepted in
writing such appointment and agreed in writing to be bound by the terms of the
Declaration. An appointment of a Trustee may be made in
- 9 -
<PAGE>
anticipation of a vacancy to occur at a later date by reason of retirement,
resignation or increase in the number of Trustees, provided that such
appointment shall not become effective prior to such retirement, resignation or
increase in the number of Trustees. Whenever a vacancy in the number of Trustees
shall occur, until such vacancy is filled as provided in this Section 2.14, the
Trustees in office, regardless of their number, shall have all the powers
granted to the Trustees and shall discharge all the duties imposed upon the
Trustees by the Declaration. A written instrument certifying the existence of
such vacancy signed by a majority of the Trustees in office shall be conclusive
evidence of the existence of such vacancy.
Section 2.15. Delegation of Power to Other Trustees. Any Trustee may,
by power of attorney, delegate his power for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees; Provided that in no
case shall less than two (2) Trustees personally exercise the powers granted to
the Trustees under this Declaration except as herein otherwise expressly
provided.
ARTICLE III
CONTRACTS
Section 3.1. Distribution Contract. The Trustees may in their discretion
from time to time enter into an exclusive or non-exclusive underwriting contract
or contracts providing for the sale of the Shares at a price based on the net
asset value of a Share, whereby the Trustees may either agree to sell the Shares
to the other party to the contract or appoint such other party their sales agent
for the Shares, and in either case on such terms and conditions, if any, as may
be prescribed in the By-laws, and such further terms and conditions as the
Trustees may in their discretion determine not inconsistent with the provisions
of this Article III or of the By-laws; and such contract may also provide for
the repurchase of the Shares by such other party as agent of the Trustees. Such
contract may also further provide that such other party may enter into selected
dealer agreements with registered securities dealers to further the purpose of
the distribution or repurchase of the Shares. The foregoing services may be
provided by one or more Persons.
Section 3.2. Advisory or Management Contract. The Trustees may in their
discretion from time to time enter into an investment advisory or management
contract or separate advisory contracts with respect to one or more Series
whereby the other party to such contract shall undertake to furnish to the Trust
such management, investment advisory, statistical and research
- 10 -
<PAGE>
facilities and services and such other facilities and services, if any, and all
upon such terms and conditions as the Trustees may in their discretion
determine, including the grant of authority to such other party to determine
what securities shall be purchased or sold by the Trust and what portion of its
assets shall be uninvested, which authority shall include the power to make
changes in the investments of the Trust or any Series.
The Trustees may also employ, or authorize the Investment Adviser to
employ, one or more sub-advisers from time to time to perform such of the acts
and services of the Investment Adviser and upon such terms and conditions as may
be agreed upon between the Investment Adviser and such sub-advisers and approved
by the Trustees. Any reference in this Declaration to the Investment Adviser
shall be deemed to include such sub-advisers unless the context otherwise
requires.
Section 3.3. Administrator. The Trustees may in their discretion from time
to time enter into one or more administrative services contracts whereby the
other party to each such contract shall undertake to furnish such administrative
services to the Trust as the Trustees shall from time to time consider desirable
and all upon such terms and conditions as the Trustees may in their discretion
determine, provided that such terms and conditions are not inconsistent with the
provisions of this Declaration or the By-Laws. Such services may be provided by
one or more persons.
Section 3.4. Transfer Agent and Shareholder Servicing Agents. The Trustees
may in their discretion from time to time enter into one or more transfer agency
contracts and one or more shareholder servicing contracts whereby the other
party to each such contract shall undertake to furnish such transfer agency
and/or shareholder services to the Trust as the Trustees shall from time to time
consider desirable and all upon such terms and conditions as the Trustees may in
their discretion determine, provided that such terms and conditions are not
inconsistent with the provisions of this Declaration or the By-Laws. Such
services may be provided by one or more Persons.
Section 3.5. Affiliations of Trustees or Officers, Etc.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser or distributor of or for any partnership, corporation, trust,
association or other organization or of or for any parent or affiliate of
any organization, with which a contract of the character described in
Sections 3.1, 3.2, 3.3 or 3.4 above or any
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Custodian contract as described in Article X of the By-laws, or for related
services may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder of or
has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in Sections
3.1, 3.2, 3.3 or 3.4 above or for services as Custodian or for related
services may have been or may hereafter be made also has any one or more of
such contracts with one or more other partnerships, corporations, trusts,
associations or other organizations, or has other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
Section 3.6. Compliance with 1940 Act. Any contract entered into
pursuant to Sections 3.1 or 3.2, shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act (including any amendment thereof or
other applicable act of Congress hereafter enacted), as modified by any
applicable order or orders of the Commission, with respect to its continuance in
effect, its termination and the method of authorization and approval of such
contract or renewal thereof.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders, Trustees Etc. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust. No Trustee, officer, employee or agent of the Trust shall be subject to
any personal liability whatsoever to any Person, other than to the Trust or its
Shareholders, in connection with Trust Property or the affairs of the Trust,
save only that arising from bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties with respect to such Person; and all such
Persons shall look solely to the Trust Property for satisfaction of claims of
any nature arising in connection with the affairs of the Trust. If any
Shareholder, Trustee, officer, employee, or agent, as such, of the Trust, is
made a party to any suit or proceeding to enforce any such liability of the
Trust, he shall not, on account thereof, be held to any personal liability. The
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Trust shall indemnify and hold each Shareholder harmless from and against all
claims and liabilities, to which such Shareholder may become subject by reason
of his being or having been a Shareholder, and shall reimburse such Shareholder
for all legal and other expenses reasonably incurred by him in connection with
any such claim or liability. The indemnification and reimbursement required by
the preceding sentence shall be made only out of the assets of the one or more
Series of which the Shareholder who is entitled to indemnification or
reimbursement was a Shareholder at the time the act or event occurred which gave
rise to the claim against or liability of said Shareholder. The rights accruing
to a Shareholder under this Section 4.1 shall not impair any other right to
which such Shareholder may be lawfully entitled, nor shall anything herein
contained restrict the right of the Trust to indemnify or reimburse a
Shareholder in any appropriate situation even though not specifically provided
herein.
Section 4.2. Non-Liability of Trustees, Etc. No Trustee, officer, employee
or agent of the Trust shall be liable to the Trust, its Shareholders, or to any
Shareholder, Trustee, officer, employee, or agent thereof for any action or
failure to act (including without limitation the failure to compel in any way
any former or acting Trustee to redress any breach of trust) except for his own
bad faith, willful misfeasance, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
Section 4.3. Mandatory Indemnification. (a) Subject to the exceptions and
limitations contained in paragraph (b) below:
(i) every person who is, or has been, a Trustee or officer of the
Trust shall be indemnified by the Trust to the fullest extent permitted by
law against all liability and against all expenses reasonably incurred or
paid by him in connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by virtue of his being or
having been a Trustee or officer and against amounts paid or incurred by
him in the settlement thereof; and
(ii) the words "claim," "action," "suit," or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal,
administrative or other, including appeals), actual or threatened; and the
words "liability" and "expenses" shall include, without limitation,
attorneys fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
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(b) No indemnification shall be provided hereunder to a Trustee or officer:
(i) against any liability to the Trust, a Series thereof, or the
Shareholders by reason of a final adjudication by a court or other body
before which a proceeding was brought that he engaged in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office;
(ii) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief that
his action was in the best interest of the Trust; or
(iii) in the event of a settlement or other disposition not involving
a final adjudication as provided in paragraph (b)(i) or (b)(ii) resulting
in a payment by a Trustee or officer, unless there has been a determination
that such Trustee or officer did not engage in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office:
(A) by the court or other body approving the settlement or other
disposition; or
(B) based upon a review of readily available facts (as opposed to
a full trial-type inquiry) by (x) vote of a majority of the
Disinterested Trustees acting on the matter (provided that a majority
of the Disinterested Trustees then in office act on the matter) or (y)
written opinion of independent legal counsel.
(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any other
rights to which any Trustee or officer may now or hereafter be entitled, shall
continue as to a person who has ceased to be such Trustee or officer and shall
inure to the benefit of the heirs, executors, administrators and assigns of such
a person. Nothing contained herein shall affect any rights to indemnification to
which personnel of the Trust other than Trustees and officers may be entitled by
contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in paragraph (a) of this
Section 4.3 may be advanced by the Trust prior to final disposition thereof upon
receipt of an
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undertaking by or on behalf of the recipient to repay such amount if it is
ultimately determined that he is not entitled to indemnification under this
Section 4.3, provided that either:
(i) such undertaking is secured by a surety bond or some other
appropriate security provided by the recipient, or the Trust shall be
insured against losses arising out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees act on the matter)
or an independent legal counsel in a written opinion shall determine, based
upon a review of readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the recipient ultimately
will be found entitled to indemnification.
As used in this Section 4.3, a "Disinterested Trustee" is one who is not
(i) an Interested Person of the Trust (including anyone who has been exempted
from being an Interested Person by any rule, regulation or order of the
Commission), or (ii) involved in the claim, action, suit or proceeding.
Section 4.4. No Bond Required of Trustees. No Trustee shall be obligated to
give any bond or other security for the Performance of any of his duties
hereunder.
Section 4.5. No Duty of Investigation Notice in Trust Instruments, Etc. No
purchaser, lender, transfer agent or other Person dealing with the Trustees or
any officer, employee or agent of the Trust shall be bound to make any inquiry
concerning the validity of any transaction purporting to be made by the Trustees
or by said officer, employee or agent or be liable for the application of money
or property paid, loaned, or delivered to or on the order of the Trustees or of
said officer, employee or agent. Every obligation, contract, instrument,
certificate, Share, other security of the Trust or undertaking, and every other
act or thing whatsoever executed in connection with the Trust shall be
conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Trustees under this Declaration or in their capacity
as officers, employees or agents of the Trust. Every written obligation,
contract, instrument, certificate, Share, other security of the Trust or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust under any such instrument are not binding upon
any of the Trustees or Shareholders individually, but bind only the trust
estate, and may contain any further recital which they or he may deem
appropriate, but the omission of such recital shall
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not operate to bind the Trustees individually. The Trustees shall at all times
maintain insurance for the protection of the Trust Property, its Shareholders,
Trustees, officers, employees and agents in such amount as the Trustees shall
deem adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
Section 4.6. Reliance on Experts, Etc. Each Trustee and officer or employee
of the Trust shall, in the performance of his duties, be fully and completely
justified and protected with regard to any act or any failure to act resulting
from reliance in good faith upon the books of account or other records of the
Trust, upon an opinion of counsel, or upon reports made to the Trust by any of
its officers or employees or by the Investment Adviser, the Distributor,
Transfer Agent, selected dealers, accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees, officers or employees
of the Trust, regardless of whether such counsel or expert may also be a
Trustee.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
Section 5.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of beneficial interest, all
of one class, except as provided in Section 5.11 and Section 5.13 hereof, par
value $.01 per share. The number of Shares of beneficial interest authorized
hereunder is unlimited. All Shares issued hereunder including, without
limitation, Shares issued in connection with a dividend in Shares or a split of
Shares, shall be fully paid and non-assessable.
Section 5.2. Rights of Shareholders. The ownership of the Trust Property
and the property of each Series of the Trust of every description and the right
to conduct any business hereinbefore described are vested exclusively in the
Trustees, and the Shareholders shall have no interest therein other than the
beneficial interest conferred by their Shares, and they shall have no right to
call for any partition or division of any property, profits, rights or interests
of the Trust nor can they be called upon to share or assume any losses of the
Trust or suffer an assessment of any kind by virtue of their owner ship of
Shares. The Shares shall be personal property giving only the rights
specifically set forth in this Declaration. The Shares shall not entitle the
holder to preference, preemptive, appraisal, conversion or exchange rights,
except as the Trustees may determine with respect to any Series of Shares.
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Section 5.3. Trust Only. It is the intention of the Trustees to create only
the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or members of
a joint stock association.
Section 5.4. Issuance of Shares. The Trustees in their discretion may, from
time to time without vote of the Shareholders, issue Shares, in addition to the
then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times and on such terms as the Trustees may deem
best, and may in such manner acquire other assets (including the acquisition of
assets subject to, and in connection with the assumption of liabilities) and
businesses. In connection with any issuance of Shares, the Trustees may issue
fractional Shares and Shares held in the treasury. The Trustees may from time to
time divide or combine the Shares into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Trust.
Contributions to the Trust may be accepted for, and Shares shall be redeemed as,
whole Shares and/or 1/1,00ths of a Share or integral multiples thereof.
Section 5.5. Register of Shares. A register shall be kept at the principal
office of the Trust or an office of the Transfer Agent which shall contain the
names and addresses of the Shareholders and the number of Shares held by them
respectively and a record of all transfers thereof. Such register shall be
conclusive as to who are the holders of the Shares and who shall be entitled to
receive dividends or distributions or otherwise to exercise or enjoy the rights
of Shareholders. No Shareholder shall be entitled to receive payment of any
dividend or distribution, nor to have notice given to him as herein or in the
By-laws provided, until he has given his address to the Transfer Agent or such
other officer or agent of the Trustees as shall keep the said register for entry
thereon. It is not contemplated that certificates will be issued for the Shares;
however, the Trustees, in their discretion, may authorize the issuance of share
certificates and promulgate appropriate rules and regulations as to their use.
Section 5.6. Transfer of Shares. Except as otherwise provided by the
Trustees, shares shall be transferable on the records of the Trust only by the
record holder thereof or by his
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agent thereunto duly authorized in writing, upon delivery to the Trustees or the
Transfer Agent of a duly executed instrument of transfer, together with such
evidence of the genuineness of each such execution and authorization and of
other matters as may reasonably be required. Upon such delivery the transfer
shall be recorded on the register of the Trust. Until such record is made, the
Shareholder of record shall be deemed to be the holder of such Shares for all
purposes hereunder and neither the Trustees nor any transfer agent or registrar
nor any officer, employee or agent of the Trust shall be affected by any notice
of the proposed transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.
Section 5.7. Notices, Reports. Any and all notices to which any Shareholder
may be entitled and any and all communications shall be deemed duly served or
given if mailed, postage prepaid, addressed to any Shareholder of record at his
last known address as recorded on the register of the Trust. A notice of a
meeting, an annual report and any other communication to Shareholders need not
be sent to a Shareholder (i) if an annual report and a proxy statement for two
consecutive shareholder meetings have been mailed to such Shareholders address
and have been returned as undeliverable, (ii) if all, and at least two, checks
(if sent by first class mail) in payment of dividends on Shares during a
twelve-month period have been mailed to such Shareholder's address and have been
returned as undeliverable or (iii) in any other case in which a proxy statement
concerning a meeting of security holders is not required to be given pursuant to
the Commission s proxy rules as from time to time in effect under the Securities
Exchange Act of 1934. However, delivery of such proxy statements, annual reports
and other communications shall resume if and when such Shareholder delivers or
cause to be delivered to the trust written notice setting forth such
Shareholder's then current address.
Section 5.8. Treasury Shares. Shares held in the treasury shall, until
reissued pursuant to Section 5.4, not confer any voting rights on the Trustees,
nor shall such Shares be entitled
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to any dividends or other distributions declared with respect to the Shares.
Section 5.9. Voting Powers. The Shareholders shall have power to vote only
(i) for the election of Trustees as provided in Section 2.12; (ii) for the
removal of Trustees as provided in Section 2.13; (iii) with respect to any
investment advisory or management contract entered into pursuant to Section 3.2;
(iv) with respect to termination of the Trust as provided in Section 8.2; (v)
with respect to any amendment of this Declaration to the extent and as provided
in Section 8.3; (vi) with respect to any merger, consolidation or sale of assets
as provided in Section 8.4; (vii) with respect to incorporation of the Trust or
any Series to the extent and as provided in Section 8.5; (viii) to the same
extent as the stockholders of Massachusetts business corporation as to whether
or not a court action, proceeding or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the Trust or any
Series or Class thereof or the Shareholders (provided, however, that a
Shareholder of a particular Series or Class shall not be entitled to a
derivative or class action on behalf of any other Series or Class (or
Shareholder of any other Series or Class) of the Trust); (ix) with respect to
any plan adopted pursuant to Rule 12b-l (or any successor rule) under the 1940
Act; and (x) with respect to such additional matters relating to the Trust as
may be required by this Declaration, the By-laws or any registration of the
Trust as an investment company under the 1940 Act with the Commission (or any
successor agency) or as the Trustees may consider necessary or desirable. Each
whole Share shall be entitled to one vote as to any matter on which it is
entitled to vote and each fractional Share shall be entitled to a proportionate
fractional vote, except that the Trustees may, in conjunction with the
establishment of any Series or Class of Shares, establish or reserve the right
to establish conditions under which the several Series or Classes shall have
separate voting rights or, if a Series or Class would not, in the sole judgment
of the Trustees, be materially affected by a proposal, no voting rights. There
shall be no cumulative voting in the election of Trustees. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required by law, this Declaration or the By laws to be taken by
Shareholders. The By-laws may include further provisions for Shareholders votes
and meetings and related matters.
Section 5.10. Meetings of Shareholders. Meetings of Shareholders may be
called at any time by the President, and shall be called by the President and
Secretary at the request in writing or by resolution, of a majority of Trustees,
or at the written request of the holder or holders of ten percent (10%) or more
of the total number of Shares then issued and outstanding of
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the Trust entitled to vote at such meeting. Any such request shall state the
purpose of the proposed meeting. At any meeting of Shareholders of the Trust or
of any series of the Trust, a Shareholder Servicing Agent may vote any shares as
to which such Shareholder Servicing Agent is the agent of record and which are
not otherwise represented in person or by proxy at the meeting, proportionately
in accordance with the votes cast by holders of all shares otherwise represented
at the meeting in person or by proxy as to which such Shareholder Servicing
Agent is the agent of record. Any shares so voted by a Shareholder Servicing
Agent will be deemed represented at the meeting for quorum purposes.
Section 5.11. Series Designation. The Trustees, in their discretion, may
authorize the division of Shares into two or more Series, and the different
Series shall be established and designated, and the variations in the relative
rights and preferences as between the different Series shall be fixed and
determined, by the Trustees; provided, that all Shares shall be identical except
that there may be variations so fixed and determined between different Series as
to investment objective, purchase price, allocation of expenses, right of
redemption, special and relative rights as to dividends and on liquidation,
conversion rights, and conditions under which the several Series shall have
separate voting rights. All references to Shares in this Declaration shall be
deemed to be Shares of any or all series as the context may require.
If the Trustees shall divide the Shares of the Trust into two or more
Series, the following provisions shall be applicable:
(a) All provisions herein relating to the Trust shall apply equally to each
Series of the Trust except as the context requires otherwise.
(b) The number of authorized Shares and the number of Shares of each Series
that may be issued shall be unlimited. The Trustees may classify or reclassify
any unissued Shares or any Shares previously issued and reacquired of any Series
into one or more Series that may be established and designated from time to
time. The Trustees may hold as treasury Shares (of the same or some other
Series), reissue for such consideration and on such terms as they may determine,
or cancel any Shares of any Series reacquired by the Trust at their discretion
from time to time.
(c) All consideration received by the Trust for the issue or sale of Shares
of a particular Series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment
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of such proceeds in whatever form the same may be, shall irrevocably belong to
that Series for all purposes, subject only to the rights of creditors of such
Series and except as may otherwise be required by applicable laws, and shall be
so recorded upon the books of account of the Trust. In the event that there are
any assets, income, earnings, profits, and proceeds thereof, funds, or payments
which are not readily identifiable as belonging to any particular Series, the
Trustees shall allocate them among any one or more of the Series established and
designated from time to time in such manner and on such basis as they, in their
sole discretion, deem fair and equitable. Each such allocation by the Trustees
shall be conclusive and binding upon the shareholders of all Series for all
purposes.
(d) The assets belonging to each particular Series shall be charged with
the liabilities of the Trust in respect of that Series and all expenses, costs,
charges and reserves attributable to that Series, and any general liabilities,
expenses, costs, charges or reserves of the Trust which are not readily
identifiable as belonging to any particular Series shall be allocated and
charged by the Trustees to and among any one or more of the Series established
and designated from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all Series for all purposes. The
Trustees shall have full discretion, to the extent not inconsistent with the
1940 Act, to determine which items are capital; and each such determination and
allocation shall be conclusive and binding upon the Shareholders. The assets of
a particular Series of the Trust shall, under no circumstances, be charged with
liabilities attributable to any other Series of the Trust. All persons extending
credit to, or contracting with or having any claim against a particular Series
of the Trust shall look only to the assets of that particular Series for payment
of such credit, contract or claim. No Shareholder or former Shareholder of any
Series shall have any claim on or right to any assets allocated or belonging to
any other series.
(e) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series
shall be entitled to receive his pro rata share of distributions of income and
capital gains made with respect to such Series. Upon redemption of his Shares or
indemnification for liabilities incurred by reason of his being or having been a
Shareholder of a Series, such shareholder shall be paid solely out of the funds
and property of such Series of the Trust. Upon liquidation or termination of a
Series of the
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Trust, Shareholders of such Series shall be entitled to receive a pro rata share
of the net assets of such Series. A Shareholder of a particular Series of the
Trust shall not be entitled to participate in a derivative or class action on
behalf of any other Series or the Shareholders of any other Series of the Trust.
(f) The establishment and designation of any Series of Shares shall be
effective upon the execution by a majority of the then Trustees of an instrument
setting forth such establishment and designation and the relative rights and
preferences of such Series, or as otherwise provided in such instrument. The
Trustees may by an instrument executed by a majority of their number abolish any
Series and the establishment and designation thereof. Except as otherwise
provided in this Article V, the Trustees shall have the power to determine the
designations, preferences, privileges, limitations and rights, of each class and
Series of Shares. Each instrument referred to in this paragraph shall have the
status of an amendment to this Declaration.
Section 5.12. Assent to Declaration of Trust. Every Shareholder, by virtue
of having become a shareholder, shall be held to have expressly assented and
agreed to the terms hereof and to have become a party hereto.
Section 5.13. Class Designation. The Trustees, in their discretion, may
authorize the division of the Shares of the Trust, or, if any Series be
established, the Shares of any Series, into two or more Classes, and the
different Classes shall be established and designated, and the variations in the
relative rights and preferences as between the different Classes shall be fixed
and determined, by the Trustees; provided, that all Shares of the Trust or of
any Series shall be identical to all other Shares of the Trust or the same
Series, as the case may be, except that there may be variations between
different classes as to allocation of expenses, right of redemption, special and
relative rights as to dividends and on liquidation, conversion rights, and
conditions under which the several Classes shall have separate voting rights.
All references to Shares in this Declaration shall be deemed to be Shares of any
or all Classes as the context may require.
If the Trustees shall divide the Shares of the Trust or any Series into two
or more Classes, the following provisions shall be applicable:
(a) All provisions herein relating to the Trust, or any Series of the
Trust, shall apply equally to each Class of Shares
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of the Trust or of any Series of the Trust, except as the context requires
otherwise.
(b) The number of Shares of each Class that may be issued shall be
unlimited. The Trustees may classify or reclassify any unissued Shares of the
Trust or any Series or any Shares previously issued and reacquired of any Class
of the Trust or of any Series into one or more Classes that may be established
and designated from time to time. The Trustees may hold as treasury Shares (of
the same or some other Class), reissue for such consideration and on such terms
as they may determine, or cancel any Shares of any Class reacquired by the Trust
at their discretion from time to time.
(c) Liabilities, expenses, costs, charges and reserves related to the
distribution of, and other identified expenses that should properly be allocated
to, the Shares of a particular Class may be charged to and borne solely by such
Class and the bearing of expenses solely by a Class of Shares may be
appropriately reflected (in a manner determined by the Trustees) and cause
differences in the net asset value attributable to, and the dividend, redemption
and liquidation rights of, the Shares of different Classes. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all Classes for all purposes.
(d) The establishment and designation of any Class of Shares shall be
effective upon the execution of a majority of the then Trustees of an instrument
setting forth such establishment and designation and the relative rights and
preferences of such Class, or as otherwise provided in such instrument. The
Trustees may, by an instrument executed by a majority of their number, abolish
any Class and the establishment and designation thereof. Each instrument
referred to in this paragraph shall have the status of an amendment to this
Declaration.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares. All Shares of the Trust shall be
redeemable, at the redemption price determined in the manner set out in this
Declaration. Redeemed or repurchased Shares may be resold by the Trust.
The Trust shall redeem the Shares upon the appropriately verified written
application of the record holder thereof (or upon such other form of request as
the Trustees may determine) at the office of the Transfer Agent, the Shareholder
Servicing
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Agent, which is the agent of record for such Shareholder, or at the office of
any bank or trust company, either in or outside the Commonwealth of
Massachusetts, which is a member of the Federal Reserve System and which the
said Transfer Agent or the said Shareholder Servicing Agent has designated for
that purpose, or at such office or agency as may be designated from time to time
in the Trust's then effective registration statement under the Securities Act of
1933. The Trustees may from time to time specify additional conditions, not
inconsistent with the 1940 Act, regarding the redemption of Shares in the
Trust's then effective registration statement under the Securities Act of 1933.
Section 6.2. Price. Shares shall be redeemed at their net asset value
determined as set forth in Section 7.1 hereof as of such time as the Trustees
shall have theretofore prescribed by resolution. In the absence of such
resolution, the redemption price of Shares deposited shall be the net asset
value of such Shares next determined as set forth in Section 7.1 hereof after
receipt of such application.
Section 6.3. Payment. Payment for such Shares shall be made in cash or in
property out of the assets of the relevant series of the Trust to the
Shareholder of record at such time and in the manner, not inconsistent with the
1940 Act or other applicable laws, as may be specified from time to time in the
Trust's then effective registration statement under the Securities Act of 1933,
subject to the provisions of Section 6.4 hereof.
Section 6.4. Effect of Suspension of Determination of Net Asset Value. If,
pursuant to Section 6.9 hereof, the Trustees shall declare a suspension of the
determination of net asset value, the rights of Shareholders (including those
who shall have applied for redemption pursuant to Section 6.1 hereof but who
shall not yet have received payment) to have Shares redeemed and paid for by the
Trust shall be suspended until the termination of such suspension is declared.
Any record holder who shall have his redemption right so suspended may, during
the period of such suspension, by appropriate written notice of revocation at
the office or agency where application was made, revoke any application for
redemption not honored and withdraw any certificates on deposit. The redemption
price of Shares for which redemption applications have not been revoked shall be
the net asset value of such Shares next determined as set forth in Section 7.1
after the termination of such suspension, and payment shall be made within seven
(7) days after the date upon which the application was made plus the period
after such application during which the determination of net asset value was
suspended.
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<PAGE>
Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the purpose
by agreement with the owner thereof at a price not exceeding the net asset value
per share determined as of the time when the purchase or contract of purchase is
made or the net asset value as of any time which may be later determined
pursuant to Section 7.1 hereof, provided payment is not made for the Shares
prior to the time as of which such net asset value is determined.
Section 6.6. Redemption of Sub-Minimum Accounts. The Trust shall have the
right at any time without prior notice to the shareholder to redeem Shares of
any shareholder for their then current net asset value per Share if at such time
the shareholder owns Shares having an aggregate net asset value of less than an
amount set from time to time by the Trustees, subject to such terms and
conditions as the Trustees may approve, and subject to the Trust's giving
general notice to all shareholders of its intention to avail itself of such
right, either by publication in the Trust s registration statement, if any, or
by such other means as the Trustees may determine.
Section 6.7. Redemption of Shares in order to Qualify as Regulated
Investment Company Disclosure of Holding. If the Trustees shall, at any time and
in good faith, be of the opinion that direct or indirect ownership of Shares or
other securities of the Trust has or may become concentrated in any Person to an
extent which would disqualify any Series of the Trust as a regulated investment
company under the Internal Revenue Code, then the Trustees shall have the power
by lot or other means deemed equitable by them (i) to call for redemption by any
such Person a number, or principal amount, of Shares or other securities of the
Trust sufficient to maintain or bring the direct or indirect ownership of Shares
or other securities of the Trust into conformity with the requirements for such
qualification, and (ii) to refuse to transfer or issue Shares or other
securities of the Trust to any Person whose acquisition of the Shares or other
securities of the Trust in question would result in such disqualification. The
redemption shall be effected at the redemption price and in the manner provided
in Section 6 1.
The holders of Shares or other securities of the Trust shall upon demand
disclose to the Trustees in writing such information with respect to direct and
indirect ownership of Shares or other securities of the Trust as the Trustees
deem necessary to comply with the provisions of the Internal Revenue Code, or to
comply with the requirements of any other taxing authority.
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<PAGE>
Section 6.8. Reductions in Number of Outstanding Shares Pursuant to Net
Asset Value Formula. The Trust may also reduce the number of Outstanding Shares
pursuant to the provisions of Section 7.3.
Section 6.9. Suspension of Right of Redemption. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary week-end and holiday closings,
(ii) during which trading on the New York Stock Exchange is restricted, (iii)
during which an emergency exists as a result of which disposal by the Trust of
securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Trust fairly to determine the value of its net assets, or
(iv) during any other period when the Commission may for the protection of
Shareholders of the Trust by order permit suspension of the right of redemption
or postponement of the date of payment or redemption; provided that applicable
rules and regulations of the Commission shall govern as to whether the
conditions prescribed in (ii), (iii), or (iv) exist. Such suspension shall take
effect at such time as the Trust shall specify but not later than the close of
business on the business day next following the declaration of suspension, and
thereafter there shall be no right of redemption or payment on redemption until
the Trust shall declare the suspension at an end, except that the suspension
shall terminate in any event on the first day on which said stock exchange shall
have reopened or the Period specified in (ii) or (iii) shall have expired (as to
which in the absence of an official ruling by the Commission, the determination
of the Trust shall be conclusive). In the case of a suspension of the right of
redemption, a Shareholder may either withdraw his request for redemption or
receive payment based on the net asset value existing after the termination of
the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
Section 1.1. Net Asset Value. The value of the assets of the Trust or any
Series of the Trust shall be determined by appraisal of the securities of the
Trust or allocated to such Series, such appraisal to be on the basis of the
amortized cost of such securities in the case of money market securities, market
value in the case of other securities, or by such other method as shall be
deemed to reflect the fair value thereof, determined in good faith by or under
the direction of the Trustees. From the total value of said assets, there shall
be deducted all indebtedness, interest, taxes, payable or accrued,
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including estimated taxes on unrealized book profits, expenses and management
charges accrued to the appraisal date, net income determined and declared as a
distribution and all other items in the nature of liabilities attributable to
the Trust or such Series or Class thereof which shall be deemed appropriate. The
net asset value of a Share shall be determined by dividing the net asset value
of the Class, or, if no Class has been established, of the Series, or, if no
Series has been established, of the Trust, by the number of Shares of that
Class, or Series, or of the Trust, as applicable, outstanding. The net asset
value of Shares of the Trust or any Class or Series of the Trust shall be
determined pursuant to the procedure and methods prescribed or approved by the
Trustees in their discretion and as set forth in the most recent Registration
Statement of the Trust as filed with the Securities and Exchange Commission
pursuant to the requirements of the Securities Act of 1933, as amended, the
Investment Company Act of 1940, as amended, and the Rules thereunder. The net
asset value of the Shares shall be determined at least once on each business
day, as of the close of trading on the New York Stock Exchange or as of such
other time or times as the Trustees shall determine. The power and duty to make
the daily calculations may be delegated by the Trustees to the Investment
Adviser, the custodian, the Transfer Agent or such other Person as the Trustees
may determine by resolution or by approving a contract which delegates such duty
to another Person. The Trustees may suspend the daily determination of net asset
value to the extent permitted by the 1940 Act.
Section 7.2. Distributions to Shareholders. The Trustees shall from time to
time distribute ratably among the Shareholders of the Trust or a Series such
proportion of the net profits, surplus (including paid-in surplus), capital, or
assets of the Trust or such Series held by the Trustees as they may deem proper.
Such distributions may be made in cash or property (including without limitation
any type of obligations of the Trust or such Series or any assets thereof), and
the Trustees may distribute ratably among the Shareholders additional Shares of
the Trust or such Series issuable hereunder in such manner, at such times, and
on such terms as the Trustees may deem proper. Such distributions may be among
the Shareholders of record at the time of declaring a distribution or among the
Shareholders of record at such other date or time or dates or times as the
Trustees shall determine. To the extent the Trustees deem it appropriate as a
matter of administrative convenience, distributions to Shareholders may be
effected on different dates to different Shareholders, provided that such
distributions shall be made at regularly occurring intervals of approximately
the same length with respect to each Shareholder of the Trust. The Trustees may
in their discretion determine that, solely for the purposes of such
distributions, Outstanding Shares shall exclude
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<PAGE>
Shares for which orders have been placed subsequent to a specified time on the
date the distribution is declared or on the next preceding day if the
distribution is declared as of a day on which Boston banks are not open for
business, all as described in the registration statement under the Securities
Act of 1933. The Trustees may always retain from the net profits such amount as
they may deem necessary to pay the debts or expenses of the Trust or the Series
or to meet obligations of the Trust or the Series, or as they may deem desirable
to use in the conduct of its affairs or to retain for future requirements or
extensions of the business. The Trustees may adopt and offer to Shareholders
such dividend reinvestment Plans, cash dividend payout plans or related plans as
the Trustees shall deem appropriate.
Inasmuch as the computation of net income and gains for Federal income tax
purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust or the Series to avoid or reduce liability for taxes.
Section 7.3. Determination of Net Income; Constant Net Asset Value;
Reduction of Outstanding Shares. Subject to Section 5.11 hereof, the net income
of the Trust or any Series shall be determined in such manner as the Trustees
shall provide by resolution. Expenses of the Trust or a Series, including the
advisory or management fee and service fees, shall be accrued each day. Such net
income may be determined by or under the direction of the Trustees as of the
close of trading on the New York Stock Exchange on each day on which such
Exchange is open or as of such other time or times as the Trustees shall
determine, and, except as provided herein, all the net income of the Trust or
any Series, as so determined, may be declared as a dividend on the Outstanding
Shares of the Trust or such Series. If, for any reason, the net income of the
Trust or any Series, determined at any time is a negative amount, the Trustees
shall have the power with respect to the Trust or such Series (i) to offset each
Shareholder's pro rata share of such negative amount from the accrued dividend
account of such Shareholder, or (ii) to reduce the number of Outstanding Shares
of the Trust or such Series by reducing the number of Shares in the account of
such Shareholder by that number of full and fractional Shares which represents
the amount of such excess negative net income, or (iii) to cause to be recorded
on the books of the Trust or such Series an asset account in the amount of such
negative net income, which account may be reduced by the amount, provided that
the same shall thereupon become the property of the Trust or such Series with
respect to the Trust or such Series and shall not be paid to any
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<PAGE>
Shareholder, of dividends declared thereafter upon the Outstanding Shares of the
Trust or such Series on the day such negative net income is experienced, until
such asset account is reduced to zero, or (iv) to combine the methods described
in clauses (i) and (ii) and (iii) of this sentence, in order to cause the net
asset value per Share of the Trust or such Series to remain at a constant amount
per Outstanding Share immediately after each such determination and declaration.
The Trustees shall also have the power to fail to declare a dividend out of net
income for the purpose of causing the net asset value per Share to be increased
to a constant amount. The Trustees shall not be required to adopt, but may at
any time adopt, discontinue or amend the practice of maintaining the net asset
value per Share of the Trust or a Series at a constant amount.
Section 7.4. Allocation Between Principal and Income. The Trustees shall
have full discretion to determine whether any cash or property received shall be
treated as income or as principal and whether any item of expense shall be
charged to the income or the principal account, and their determination made in
good faith shall be conclusive upon the Shareholders. In the case of stock
dividends received, the Trustees shall have full discretion to determine, in the
light of the particular circumstances, how much if any of the value thereof
shall be treated as income, the balance, if any, to be treated as principal.
Section 7.5. Power to Modify Foregoing Procedures. Notwithstanding any of
the foregoing provisions of this Article VII, the Trustees may prescribe, in
their absolute discretion, such other bases and times for determining the per
Share net asset value or net income, or the declaration and payment of dividends
and distributions as they may deem necessary or desirable.
ARTICLE VIII
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
Section 8.1. Duration. The Trust shall continue without limitation of time
but subject to the provisions of this Article VIII.
Section 8.2. Termination of Trust. (a) The Trust or any Series of the Trust
may be terminated by an instrument in writing signed by a majority of the
Trustees, or by the affirmative vote of the holders a majority of the Shares of
the Trust or Series outstanding and entitled to vote, at any meeting of
Shareholders. Upon the termination of the Trust or any Series,
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<PAGE>
(i) the Trust or any Series shall carry on no business except for the
purpose of winding up its affairs;
(ii) the Trustees shall proceed to wind up the affairs of the Trust or
Series and all of the powers of the Trustees under this Declaration shall
continue until the affairs of the Trust or Series shall have been wound up,
including the power to fulfill or discharge the contracts of the Trust or
Series, collect its assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining Trust Property or
property of the Series to one or more persons at public or private sale for
consideration which may consist in whole or in part of cash, securities or
other property of any kind, discharge or pay its liabilities, and do all
other acts appropriate to liquidate its business; and
(iii) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property or property of the Series, in cash
or in kind or partly each, among the Shareholders of the Trust or Series
according to their respective rights.
(b) After termination of the Trust or any Series and distribution to the
Shareholders as herein provided, a majority of the Trustees shall execute and
lodge among the records of the Trust an instrument in writing setting forth the
fact of such termination, and the Trustees shall thereupon be discharged from
all further liabilities and duties hereunder, and the rights and interests of
all Shareholders of the Trust or Series shall thereupon cease.
Section 8.3. Amendment Procedure. (a) This Declaration may be amended by a
vote of the holders of a majority of the Shares outstanding and entitled to
vote. Amendments shall be effective upon the taking of action as provided in
this section or at such later time as shall be specified in the applicable vote
or instrument. The Trustees may also amend this Declaration without the vote or
consent of Shareholders if they deem it necessary to conform this Declaration to
the requirements of applicable federal or state laws or regulations or the
requirements of the regulated investment company provisions of the Internal
Revenue Code (including those provisions of such Code relating to the retention
of the exemption from federal income tax with respect to dividends paid by the
Trust out of interest income received on Municipal Bonds), but the Trustees
shall not be liable for failing so to do. The Trustees may also amend this
Declaration without the vote or consent of Shareholders if they deem it
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<PAGE>
necessary or desirable to change the name of the Trust or to make any other
changes in the Declaration which do not materially adversely affect the rights
of Shareholders hereunder.
(b) No amendment may be made under this Section 8.3 which would change any
rights with respect to any Shares of the Trust or Series by reducing the amount
payable thereon upon liquidation of the Trust or Series or by diminishing or
eliminating any voting rights pertaining thereto, except with the vote or
consent of the holders of two-thirds of the Shares of the Trust or Series
outstanding and entitled to vote. Nothing contained in this Declaration shall
permit the amendment of this Declaration to impair the exemption from personal
liability of the Shareholders, Trustees, officers, employees and agents of the
Trust or to permit assessments upon Shareholders.
(c) A certificate signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Shareholders or by the
Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, this Declaration may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.
Section 8.4. Merger Consolidation and Sale of Assets. The Trust or any
Series thereof may merge or consolidate with any other corporation, association,
trust or other organization or may sell, lease or exchange all or substantially
all of the Trust Property or the property of any Series, including its good
will, upon such terms and conditions and for such consideration when and as
authorized at any meeting of Shareholders of the Trust or Series called for the
purpose by the affirmative vote of the holders of a majority of the Shares of
the Trust or Series.
Section 8.5. Incorporation. With the approval of the holders of a majority
of the Shares of the Trust or any Series outstanding and entitled to vote, the
Trustees may cause to be organized or assist in organizing a corporation or
corporations under the laws of any jurisdiction or any other trust, partnership,
association or other organization to take over all of the Trust Property or the
property of any Series or to carry on any business in which the Trust or the
Series shall directly or indirectly have any interest, and to sell, convey and
transfer
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<PAGE>
the Trust Property or the property of any Series to any such corporation, trust,
association or organization in exchange for the Shares or securities thereof or
otherwise, and to lend money to, subscribe for the Shares or securities of, and
enter into any contracts with any such corporation, trust, partnership,
association or organization, or any corporation, partnership, trust, association
or organization in which the Trust or the Series holds or is about to acquire
shares or any other interest. The Trustees may also cause a merger or
consolidation between the Trust or any Series or any successor thereto and any
such corporation, trust, partnership, association or other organization if and
to the extent permitted by law, as provided under the law then in effect.
Nothing contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one or more
corporations, trusts, partnerships, associations or other organizations and
selling, conveying or transferring a portion of the Trust Property to such
organization or entities.
ARTICLE IX
REPORTS TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders a
written financial report, which may be included in the Trust's prospectus or
statement of additional information, of the transactions of the Trust, including
financial statements which shall at least annually be certified by independent
public accountants.
ARTICLE X
MISCELLANEOUS
Section 10.1. Filing. This Declaration and any amendment hereto shall be
filed in the office of the Secretary of the Commonwealth of Massachusetts and in
such other places as may be required under the laws of Massachusetts and may
also be filed or recorded in such other places as the Trustees deem appropriate.
Unless the amendment is embodied in an instrument signed by a majority of the
Trustees, each amendment filed shall be accompanied by a certificate signed and
acknowledged by a Trustee stating that such action was duly taken in a manner
provided herein. A restated Declaration, integrating into a single instrument
all of the provisions of the Declaration which are then in effect and operative,
may be executed from time to time by a majority of the Trustees and shall, upon
filing with the Secretary of the Commonwealth of Massachusetts, be conclusive
evidence of all amendments contained therein and may hereafter be referred to in
lieu of the original Declaration and the various
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<PAGE>
amendments thereto. The restated Declaration may include any amendment which the
Trustees are empowered to adopt, whether or not such amendment has been adopted
prior to the execution of the restated Declaration.
Section 10.2. Governing Law. This Declaration is executed by the Trustees
and delivered in the Commonwealth of Massachusetts and with reference to the
internal laws thereof, and the rights of all parties and the validity and
construction of every provision hereof shall be subject to and construed
according to the internal laws of said State without regard to the choice of law
rules thereof.
Section 10.3. Counterparts. This Declaration may be simultaneously executed
in several counterparts, each of which shall be deemed to be an original, and
such counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counter part.
Section 10.4. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust appears to be a Trustee
hereunder, certifying to: (a) the number or identity of Trustees or
Shareholders, (b) the due authorization of the execution of any instrument or
writing, (c) the form of any vote passed at a meeting of Trustees or
Shareholders, (d) the fact that the number of Trustees or Shareholders present
at any meeting or executing any written instrument satisfies the requirements of
this Declaration, (e) the form of any By-laws adopted by or the identity of any
officers elected by the Trustees, or (f) the existence of any fact or facts
which in any manner relate to the affairs of the Trust, shall be conclusive
evidence as to the matters so certified in favor of any Person dealing with the
Trustees and their successors.
Section 10.5. Provisions in Conflict with Law or Regulations. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; provided, however, that such determination shall not affect any of
the remaining provisions of this Declaration or render invalid or improper any
action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or
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unenforceability shall attach only to such provision in such jurisdiction and
shall not in any manner affect such provisions in any other jurisdiction or any
other provision of this Declaration in any jurisdiction.
Section 10.6. Principal Place of Business. The principal place of business
of the Trust is 2 Pickwick Plaza, Greenwich, Connecticut 06830. The principal
place of business may be changed by resolution of a majority of the Trustees.
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IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
4th of November, 1991.
/s/ Eric G. Woodbury
-------------------------------------
Eric G. Woodbury
(as Trustee and not individually)
Suite 1230
Ten Post Office Square
Boston, MA 02109
/s/ Nancy J. Cox
-------------------------------------
Nancy J. Cox
(as Trustee and not individually)
Suite 1230
Ten Post Office Square
Boston, MA 02109
COMMONWEALTH OF MASACHUSETTS
SUFFOLK, ss. November 4, 1991
Then personally appeared the above-named Eric G. Woodbury and Nancy J. Cox
who acknowledged the foregoing instrument to be their free act and deed.
Before me,
/s/ Patricia M. Luke
-------------------------------------
Notary Public
My commission expires:
[STAMP]
PATRICIA M. LUKE, Notary Public
My Commission Expires July 9, 1993
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BY-LAWS
OF
NATIONAL WORLDWIDE OPPORTUNITIES FUND
November 4, 1991
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I - DEFINITIONS 1
ARTICLE II - OFFICES 1
Section 1. Principal Office 1
Section 2. Other Offices 1
ARTICLE III - SHAREHOLDERS 1
Section 1. Meetings 1
Section 2. Notice of Meetings 2
Section 3. Record Date for Meetings and Other
Purposes 2
Section 4. Proxies 2
Section 5. Inspection of Records 3
Section 6. Action without Meeting 3
ARTICLE IV - TRUSTEES 3
Section 1. Meetings of the Trustees 3
Section 2. Quorum and Manner of Acting 4
ARTICLE V - COMMITTEES 4
Section 1. Executive and Other Committees 4
Section 2. Meetings, Quorum and Manner of Acting 4
Section 3. Chairman 5
ARTICLE VI - OFFICERS 5
Section 1. General Provisions 5
Section 2. Term of Office and Qualifications 5
Section 3. Removal 5
Section 4. Powers and Duties of the President 6
Section 5. Powers and Duties of Vice Presidents 6
Section 6. Powers and Duties of the Treasurer 6
Section 7. Powers and Duties of the Secretary 6
Section 8. Powers and Duties of Assistant
Treasurers 7
Section 9. Powers and Duties of Assistant
Secretaries 7
Section 10. Compensation of Officers and
Trustees 7
ARTICLE VII - FISCAL YEAR 7
ARTICLE VIII - SEAL 7
ARTICLE IX - WAIVERS OF NOTICE 8
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<PAGE>
ARTICLE X - CUSTODY OF SECURITIES 8
Section 1. Employment of a Custodian 8
Section 2. Action Upon Termination of
Custodian Agreement 8
Section 3. Central Certificate System 8
Section 4. Acceptance of Receipts in Lieu
of Certificate 9
ARTICLE XI - AMENDMENTS 9
ARTICLE XII - MISCELLANEOUS 9
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<PAGE>
BY-LAWS
OF
NATIONAL WORLDWIDE OPPORTUNITIES FUND
ARTICLE I
DEFINITIONS
The terms "Administrator", "Commission", '"Custodian", "Declaration",
"Distributor", "His", "Interested Person", "Investment Advisers", "Municipal
Bonds", "1940 Act", "Person", "Series", "Shareholder", "Shareholder Servicing
Agent", "Shares", "Transfer Aqent", "Trust", "Trust Property", "Trustees", and
"vote of a majority of the Shares outstanding and entitled to vote", have the
respective meanings given them in the Declaration of Trust of National Worldwide
Opportunities Fund dated November 4, 1991, as amended from time to time.
ARTICLE II
OFFICES
Section 1. Principal Office. Until changed by the Trustees, the principal.
office of the Trust in the Commonwealth of Massachusetts shall be in the City of
Boston County of Suffolk.
Section 2. Other Offices. The Trust may have offices in such other places
without as well as within the Commonwealth of Massachusetts as the Trustees may
from time to time determine.
ARTICLE III
SHAREHOLDERS
Section 1. Meetings. A meeting of Shareholders may be called at any time by
a majority of the Trustees and shall be called by any Trustee upon written
request which shall specify the purpose or purposes for which such meeting is
to be called of Shareholders holding in the aggregate not less than 10% of the
outstanding Shares entitled to vote on the matters specified in such written
request. Any such meeting shall be held as provided in the Declaration at such
place within or without the Commonwealth of Massachusetts as the Trustees shall
designate. The holders of a majority of outstanding Shares present in person or
by proxy shall constitute a quorum at any meeting of the Shareholders. In the
absence of a quorum, a majority of outstanding Shares entitled to vote present
in person or by proxy may adjourn the meeting from time to time until a quorum
shall be present.
<PAGE>
Section 2. Notice of Meetings. Notice of all meetings of the
Shareholders, stating the time, place and purposes of the meeting, shall be
given by the Trustees by mail to each Shareholder at his address as recorded on
the register of the Trust mailed at least (10) days and not more than sixty (60)
days before the meeting. Only the business stated in the notice of the meeting
shall be considered at such meeting. Any adjourned meeting may be held as
adjourned without further notice. No notice need be given to any Shareholder who
shall have failed to inform the Trust of his current address or if a written
waiver of notice, executed before or after the meeting by the Shareholder or his
attorney "thereunto authorized" is filed with the records of the meeting.
Section 3. Record Date for Meetings and Other Purposes. For the purpose
of determining the Shareholders who are entitled to notice of and to vote at any
meeting, or to participate in any distribution, or for the purpose of any other
action, the Trustees may from time to time close the transfer books for such
period, not exceeding thirty (30) days, as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date not more than
sixty (60) days prior to the date of any meeting of Shareholders or distribution
or other action as a record date for the determinations of the persons to be
treated as Shareholders of record for such purposes, except for dividend
payments which shall be governed by the Declaration.
Section 4. Proxies. At any meeting of Shareholders, any holder of
Shares entitled to vote threat may vote by proxy, provided that no proxy shall
be voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken.
Proxies may be solicited in the name of one or more Trustees or one or more of
the officers of the Trust. Only Shareholders of record shall be entitled to
vote. Each whole share shall be entitled to one vote as to any matter on which
it is entitled by the Delaration to vote, and each fractional Share shall be
entitled to a proportionate fractional vote. When any Share is held jointly by
several persons, any one of them may vote at any meeting in person or by proxy
in respect of such Share, but if more than one of them shall be present at such
meeting in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise,
and the burden of proving invalidity shall rest on the challenger. If the holder
of any such share is a minor or a person of unsound mind, and subject to
guardianship or the legal
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<PAGE>
control of any other person as regards the charge or management of such Share,
he may vote by his guardian or such other person appointed or having such
control, and such vote may be given in person or by proxy.
Section 5. Inspection of Records. The records of the Trust shall be open to
inspection by Shareholders to the same extent as is permitted shareholders of a
Massachusetts business corporation.
Section 6. Action without Meeting. Any action which may be taken by
Shareholders may be taken without a meeting if a majority of Shareholders
entitled to vote on the matter (or such larger proportion thereof as shall be
required by law, the Declaration or these By-Laws for approval of such matter)
consent to the action in writing and the written consents are filed with the
records of the meetings of Shareholders. Such consents shall be treated for all
purposes as a vote taken at a meeting of Shareholders.
ARTICLE IV
TRUSTEES
Section 1. Meetings of the Trustees. The Trustees may in their discretion
provide for regular or stated meetings of the Trustees. Notice of regular or
stated meetings need not be given. Meetings of the Trustees other than regular
or stated meetings shall be held whenever called by the President, or by any one
of the Trustees, at the time being in office. Notice of the time and place of
each meeting other than regular or stated meetings shall be given by the
Secretary or an Assistant Secretary or by the officer or Trustee calling the
meeting and shall be mailed to each Trustee at least two days before the
meeting, or shall be telegraphed, cabled, or wirelessed to each Trustee at his
business address, or personally delivered to him at least one day before the
meeting. Such notice may, however, be waived by any Trustee. Notice of a meeting
need not be given to any Trustee if a written waiver of notice, executed by him
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him. A notice or waiver of notice need not
specify the purpose of any meeting. The Trustees may meet by means of a
telephone conference circuit or similar communications equipment by means of
which all persons participating in the meeting shall be deemed to have been held
at a place designated by the Trustees at the meeting. Participation in a
telephone conference meeting shall constitute presence in person at such
meeting. Any action required or permitted to be taken at any meeting of the
Trustees
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may be taken by the Trustees without a meeting if all the Trustees consent to
the action in writing and the written consents are filed with the records of the
Trustees meetings. Such consents shall be treated as a vote for all purposes.
Section 2. Ouorum and Manner of Acting. A majority of the Trustees shall be
present in person at any regular or special meeting of the Trustees in order to
constitute a quorum for the transaction of business at such meeting and (except
as otherwise required by law, the Declaration of these By-Laws) the act of a
majority of the Trustees present at any such meeting, at which a quorum is
present, shall be the act of the Trustees. In the absence of a quorum, a
majority of the Trustees present may adjourn the meeting from time to time until
a quorum shall be present. Notice of an adjourned meeting need not be given.
ARTICLE V
COMMITTEES
Section 1. Executive and Other Committees. The Trustees by vote of a
majority of all the Trustees may elect from their own number an Executive
Committee to consist of not less than three (3) to hold office at the pleasure
of the Trustees, which shall have the power to conduct the current and ordinary
business of the Trust while the Trustees are not in session, including the
purchase and sale of securities and the designation of securities to be
delivered upon redemption of Shares of the Trust, and such other powers of the
Trustees as the Trustees may, from time to time, delegate to them except those
powers which by law, the Declaration or these By-Laws they are prohibited from
delegating. The Trustees may also elect from their own number other Committees
from time to time, the number composing such Committees, the powers conferred
upon the same (subject to the same limitations as with respect to the Executive
Committee) and the term of membership on such Committees to be determined by the
Trustees. The Trustees may designate a chairman of any such Committee. In the
absence of such designation the Committee may elect its own Chairman.
Section 2. Meetings, Ouorum and Manner of Acting. The Trustees may (1)
provide for stated meetings of any Committee, (2) specify the manner of calling
and notice required for special meetings of any Committee, (3) specify the
number of members of a Committee required to constitute a quorum and the number
of members of a Committee required to exercise specified powers delegated to
such Committee, (4) authorize the making of decisions to exercise specified
powers by written assent of the requisite number of members of a Committee
without a meeting, and
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(5) authorize the members of a Committee to meet by means of a telephone
conference circuit.
The Executive Committee shall keep regular minutes of its meetings and
records of decisions taken without a meeting and cause them to be recorded in a
book designated for that purpose and kept in the Office of the Trust.
Section 3. Chairman. The Trustees may, by a majority vote of all the
Trustees, elect from their own number a Chairman, to hold office until his
successors shall have been duly elected and qualified. The Chairman shall not
hold any other office. The Chairman may be, but need not be, a Shareholder. The
Chairman shall preside at all meetings of the Trustees and shall have such other
duties as from time to time may be assigned to him by the Trustees.
ARTICLE VI
OFFICERS
Section 1. General Provisions. The officers of the Trust shall be a
President, a Treasurer and a Secretary, each of whom shall be elected by the
Trustees. The Trustees may elect or appoint such other officers or agents as the
business of the Trust may require, including one or more Vice Presidents, one or
more Assistant Secretaries, and one or more Assistant Treasurers. The Trustees
may delegate to any officer or committee the power to appoint any subordinate
officers or agents.
Section 2. Term of Office and Qualifications. Except as otherwise provided
by law, the Declaration or these By-Laws, the President, the Treasurer and the
Secretary shall each hold office until his successor shall have been duly
elected and qualified, and all other officers shall hold office at the pleasure
of the Trustees. The Secretary and Treasurer may be the same person. A Vice
President and the Treasurer or a Vice President and the Secretary may be the
same person, but the offices of Vice President, Secretary and Treasurer shall
not be held by the same person. The President shall hold no other office. Except
as above provided, any two offices may be held by the same person. Any officer
may be but none need be a Trustee or Shareholder.
Section 3. Removal. The Trustees, at any regular or special meeting of the
Trustees, may remove any officer without cause, by a vote of a majority of the
Trustees then in office. Any officer or agent appointed by an officer or
committee may be removed with or without cause by such appointing officer or
committee.
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Section 4. Powers and Duties of the President. The President may call
meetings of the Trustees and of any Committee thereof when he deems it necessary
and shall preside at all meetings of the Shareholders. Subject to the control of
the Trustees and to the control of any Committees of the Trustees, within their
respective spheres, as provided by the Trustees, he shall at all times exercise
a general supervision and direction over the affairs of the Trust. He shall have
the power to employ attorneys and counsel for the Trust and to employ such
subordinate officers, agents, clerks and employees as he may find necessary to
transact the business of the Trust. He shall also have the power to grant,
issue, execute or sign such powers of attorney, proxies or other documents as
may be deemed advisable or necessary in furtherance of the interests of the
Trust. The President shall have such other powers and duties, as from time to
time may be conferred upon or assigned to him by the Trustees
Section 5. Powers and Duties of Vice Presidents. In the absence or
disability of the President, the Vice President or, if there be more than one
Vice President, any Vice President designated by the Trustees shall perform all
the duties and may exercise any of the powers of the President, subject to the
control of the Trustees. Each Vice President shall perform such other duties as
may be assigned to him from time to time by the Trustees and the President.
Section 6. Powers and Duties of the Treasurer. The Treasurer shall be the
principal financial and accounting officer of the Trust. He shall deliver all
funds of the Trust which may come into his hands to such Custodian as the
Trustees may employ pursuant to Article X of these By-Laws. He shall render a
statement of condition of the finances of the Trust to the Trustees as often as
they shall require the same and he shall in general perform all the duties
incident to the office of Treasurer and such other duties as from time to time
may be assigned to him by the Trustees. The Treasurer shall give a bond for the
faithful discharge of his duties, if required so to do by the Trustees, in such
sum and with such surety or sureties as the Trustees shall require.
Section 7. Powers and Duties of the Secretary. The Secretary shall keep the
minutes of all meetings of the Trustees and of the Shareholders in proper books
provided for that purpose; he shall have custody of the seal of the Trust he
shall have charge of the Share transfer books, lists and records unless the same
are in the charge of the Transfer Agent. He shall attend to the giving and
serving of all notices by the Trust in accordance with the provisions of these
By-Laws and as required by law; and subject to these By-Laws, he shall in
general perform all duties incident to the office of Secretary and such other
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duties as from time to time may be assigned to him by the Trustees.
Section 8. Powers and Duties of Assistant Treasurers. In the absence or
disability of the Treasurer, any Assistant Treasurer designated by the Trustees
shall perform all the duties, and may exercise any of the powers, of the
Treasurer. Each Assistant Treasurer shall perform such other duties as from time
to time may be assigned to him by the Trustees. Each Assistant Treasurer shall
give a bond for the faithful discharge of his duties, if required so to do by
the Trustees, in such sum and with such surety or sureties as the Trustees shall
require.
Section 9. Powers and Duties of Assistant Secretaries. In the absence or
disability of the Secretary, any Assistant Secretary designated by the Trustees
shall perform all the duties, and may exercise any of the powers, of the
Secretary. Each Assistant Secretary shall perform such other duties as from time
to time may be assigned to him by the Trustees.
Section 10. Compensation of Officers and Trustees. Subject to any
applicable provisions of the Declaration, the compensation of the officers and
Trustees shall be fixed from time to time by the Trustees or, in the case of
officers, by any Committee or officer upon whom such power may be conferred by
the Trustees. No officer shall be prevented from receiving such compensation as
such officer by reason of the fact that he is also a Trustee.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Trust shall begin on the first day of July in each
year and shall end on the thirtieth day of June in each year, provided, however
that the Trustees may from time to time change the fiscal year.
ARTICLE VIII
SEAL
The Trustees may adopt a seal which shall be in such form and shall have
such inscription thereon as the Trustees may from time to time prescribe.
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ARTICLE IX
WAIVERS OF NOTICE
Whenever any notice whatever is required to be given by law, the
Declaration or these By-Laws, a waiver thereof in writing, signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto. A notice shall be deemed to have
been telegraphed, cabled or wirelessed for the purposes of these By-Laws when it
has been delivered to a representative of any telegraph, cable or wireless
company with instructions that it be telegraphed, cabled or wirelessed.
ARTICLE X
CUSTODY OF SECURITIES
Section 1. Employment of a Custodian. The Trust shall place and at all
times maintain in the custody of a Custodian (including any sub-custodian for
the Custodian) all funds, securities and similar investments included in the
Trust Property. The Custodian (and any sub-custodian) shall be a bank having not
less than $2,000,000 aggregate capital, surplus and undivided profits and shall
be appointed from time to time by the Trustees, who shall fix its remuneration.
Section 2. Action Upon Termination of Custodian Agreement. Upon termination
of a Custodian Agreement or inability of the Custodian to continue to serve, the
Trustees shall promptly appoint a successor custodian, but in the event that no
successor custodian can be found who has the required qualifications and is
willing to serve, the Trustees shall call as promptly as possible a special
meeting of the Shareholders to determine whether the Trust shall function
without a custodian or shall be liquidated. If so directed by vote of the
holders of a majority of the outstanding voting securities, the Custodian shall
deliver and pay over all Trust Property held by it as specified in such vote.
Section 3. Central Certificate System. Subject to such rules, regulations
and orders as the Commission may adopt, the Trustees may direct the Custodian to
deposit all or any part of the securities owned by the Trust in a system for the
central handling of securities established by a national securities exchange or
a national securities association registered with the Commission under the
Securities Exchange Act of 1934, or such other person as may be permitted by the
Commission, or otherwise in accordance with the 1940 Act, pursuant to which
system all securities of any particular class or series of any issuer deposited
within the system are treated as fungible and may be
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transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Trust or its custodian.
Section 4. Acceptance of Receipts in Lieu of Certificates. Subject to such
rules, regulations and orders as the Commission may adopt, the Trustees may
direct the Custodian to accept written receipts or other written evidences
indicating purchases of securities held in book-entry form in the Federal
Reserve System in accordance with regulations promulgated by the Board of
Governors of the Federal Reserve System and the local Federal Reserve Banks in
lieu of receipt of certificates representing such securities.
ARTICLE XI
AMENDMENTS
These By-Laws, or any of them, may be altered, amended or repealed, or new
By-Laws may be adopted by (a) vote of a majority of the Shares outstanding and
entitled to vote or (b) by the Trustees, provided, however, that no By-Law may
be amended, adopted or repealed by the Trustees if such amendment, adoption or
repeal requires, pursuant to law, the Declaration or these By-Laws, a vote of
the Shareholders.
ARTICLE XII
MISCELLANEOUS
(A) Except as hereinafter provided, no officer or Trustees of the Trust and
no partner, officer, director or shareholder of the Investment Adviser of the
Trust (as that term is defined in the Investment Company Act of 1940) or of the
underwriter of the Trust, and no Investment Adviser or underwriter of the Trust,
shall take long or short positions in the securities issued by the Trust.
(1) The foregoing provisions shall not prevent the underwriter from
purchasing Shares from the Trust if such purchases are limited (except for
reasonable allowances for clerical errors, delays and errors of
transmission and cancellation of orders) to purchase for the purpose of
filling orders for such Shares received by the underwriter, and provided
that orders to purchase from the Trust are entered with the Trust or the
Custodian promptly upon receipt by the underwriter of purchase orders for
such Shares, unless the underwriter is otherwise instructed by its
customer.
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(2) The foregoing provision shall not prevent the underwriter from
purchasing Shares of the Trust as agent for the account of the Trust.
(3) The foregoing provisions shall not prevent the purchase from the
Trust or from the underwriter of Shares issued by the Trust, by any
officer, or Trustee of the Trust or by any partner, officer, director or
shareholder of the Investment Adviser of the Trust or of the underwriter of
the Trust at the price available to the public generally at the moment of
such purchase, or as described in the then currently effective Prospectus
of the Trust.
(4) The foregoing shall not prevent the Investment Adviser, or any
affiliate thereof, of the Trust from purchasing Shares prior to the
effectiveness of the first registration statement relating to the Shares
under the Securities Act of 1933.
(B) The Trust shall not lend assets of the Trust to any officer or Trustee
of the Trust, or to any partner, officer, director or shareholder of, or person
financially interested in, the Investment Adviser of the Trust, or the
underwriter of the Trust, or to the Investment Adviser of the Trust or to the
underwriter of the Trust.
(C) The Trust shall not impose any restrictions upon the transfer of the
Shares of the Trust except as provided in the Declaration, but this requirement
shall not prevent the charging of customary transfer agent fees.
(D) The Trust shall not permit any officer or Trustee of the Trust, or any
partner, officer or director of the Investment Adviser or underwriter of the
Trust to deal for or on behalf of the Trust with himself as principal or agent,
or with any partnership, association or corporation in which he has a financial
interest; provided that the foregoing provisions shall not prevent (a) officers
and Trustees of the Trust or partners, officers or directors of the Investment
Adviser or underwriter of the Trust from buying, holding or selling shares in
the Trust, or from being partners, officers or directors or otherwise
financially interested in the Investment Adviser or underwriter of the Trust;
(b) purchases or sales of securities or other property by the Trust from or to
an affiliated person or to the Investment Advisers or underwriters of the Trust
if such transaction is exempt from the applicable provisions of the 1940 Act;
(c) purchases of investments for the portfolio of the Trust or sales of
investments owned by the Trust through a security dealer who is, or one or more
of whose partners, shareholders, officers or directors is, an officer or Trustee
of the Trust, or
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a partner, officer or director of the Investment Adviser or underwriter of the
Trust, if such transactions are handled in the capacity of broker only and
commissions charged do not exceed customary brokerage charges for such services;
(d) employment of legal counsel, registrar, Transfer Agent, dividend disbursing
agent or Custodian who is, or has a partner, shareholder, officer, or director
who is, an officer or Trustee of the Trust, or a partner, officer or director of
the Investment Adviser or underwriter of the Trust, if only customary fees are
charged for services to the Trust; (e) sharing statistical research, legal and
management expenses and office hire and expenses with any other investment
company in which an officer or Trustee of the Trust, or a partner, officer or
director of the Investment Adviser or underwriter of the Trust, is an officer or
director or otherwise financially interested.
END OF BY-LAWS
EXHIBIT 5.1
NATIONAL WORLDWIDE OPPORTUNITIES FUND
MANAGEMENT AGREEMENT
AGREEMENT made this 14th day of May, 1993 by and between NATIONAL WORLDWIDE
OPPORTUNITIES FUND, a Massachusetts business trust (hereinafter called the
"Fund") and NATIONAL SECURITIES & RESEARCH CORPORATION, a New York corporation
(hereinafter called the "Manager").
1. The Manager, at its expense, undertakes to afford to the Fund the advice and
assistance of the Manager's organization with respect to the acquisition, by
purchase, exchange, subscription or otherwise, the holding and the disposal
through sale, exchange or otherwise, of securities; and advice and
recommendations with respect to other aspects of the business and affairs of the
Fund; and shall, subject to the Board of Trustees of the Fund and in cooperation
with the officers of the Fund, administer the business and affairs of the Fund.
The Manager shall, in acting hereunder be an independent contractor and shall
not be an agent of the Fund.
2. The Manager, at its expense, shall furnish to the Trustees and officers of
the Fund all statistical information reasonably required by them and reasonably
available to the Manager; shall furnish the Fund an office, and with ordinary
clerical and bookkeeping services at such office; and shall authorize and permit
any such of its directors, officers and employees who may be elected as trustees
or officers of the Fund, to serve in the capacities to which they are elected.
All services to be furnished by the Manager under this agreement may be
furnished through the medium of any such directors, officers or employees of the
Manager. The investment policies, the administration of its business and
affairs, and all other acts of the Fund are and shall at all times be subject to
the approval and direction of the Trustees of the Fund.
3. The Fund shall at all times keep the Manager fully informed with regard to
the securities owned by it, its funds available or to become available for
investment, and generally as to the condition of its affairs. It shall furnish
National with a certified copy of all financial statements, and a signed copy of
each report prepared by Certified Public Accountants and with such other
information with regard to its affairs as the Manager may, from time to time,
reasonably request.
4. The Fund will pay all its expenses other than those expressly stated to be
payable by the Manager hereunder. Expenses payable by the Fund shall include,
but not be limited to, interest charges, taxes, fees and commissions of every
kind, expenses of issue, sale, repurchase or redemption of shares, expenses of
registering or
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qualifying shares for sale, all charges of custodians (including sums as
custodian and for keeping books, performing portfolio valuation and rendering
other services to the Fund), transfer agents including the printing and mailing
of reports and notices to shareholders, registrars, auditors and legal counsel,
expenses of preparing, printing and distributing all proxy material,
prospectuses, reports and notices to shareholders, and all costs incident to the
Fund's organization and existence.
5. The services of the Manager to the Fund are not to be deemed to be exclusive,
the Manager being free to render services to others and to engage in other
activities.
6. As compensation for the services provided and the facilities furnished by the
Manager, the Fund agrees to pay to the Manager a management fee payable monthly,
computed from the average daily net assets of the Fund that month and based on
the following annual rates:
.75% (3/4 of 1%) on the first $100 million of net assets;
.625% on next $50 million;
.60% on next $50 million;
.575% on next $50 million:
.55% on next $50 million;
.525% on next $50 million;
.50% on net assets over $350 million.
7. Notwithstanding any of the above provisions, the Manager shall reimburse the
Fund to the extent that in any fiscal year aggregate annual expenses of the
Fund, exclusive of taxes, interest, brokerage fees, payments made pursuant to
the Fund's Rule 12b-1 distribution plan and extraordinary charges such as
litigation costs, exceed the most restrictive expense limitations imposed by any
state in which the Fund's shares are qualified for sale.
8. The Manager assumes no responsibility under this agreement other than to
render the services called for hereunder in good faith and shall not be
responsible for any action of the Trustees of the Fund in following or declining
to follow any advice or recommendation of the Manager. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Manager, the Manager shall not be subject to
liability to the Fund or to any shareholder of the Fund for any act or omission
in the course of, or connected with, rendering services hereunder or for any
losses that may be sustained in the purchase, holding or sale of any security.
9. This agreement shall terminate automatically in the event of its assignment;
the term "assignment" for this purpose having the meaning defined in Section
2(a) (4) of the Investment Company Act of 1940, as amended (the "Act").
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<PAGE>
10. This agreement may be terminated at any time, without the payment of any
penalty, (a) by the Trustees of the Fund or by vote of a majority of the
outstanding voting securities of the Fund as defined in the Act, by 60 days'
written notice addressed to the Manager at its principal place of business; and
(b) by the Manager by 60 days' written notice addressed to the Fund at its
principal place of business.
11. The Declaration of Trust ("Declaration") establishing the Fund, dated
November 4, 1991, a copy of which in on file in the office of the Secretary of
the Commonwealth of Massachusetts, provides that the name "National Worldwide
Opportunities Fund" refers to the Trustees under the Declaration collectively as
Trustees, but not as individuals or personally; and no Trustee, shareholder,
officer, employee or agent of the Fund may be held to any personal liability,
nor may resort be had to their private property for the satisfaction of any
obligation or claim or otherwise in connection with the affairs of said Fund but
the Fund property only shall be liable.
12. This agreement has been approved by the Trustees of the Fund and shall be
submitted for approval of the shareholders of the Fund. If approved by a vote of
a majority of the outstanding voting securities of the Fund as defined in the
Act, the agreement shall continue in effect for a period of two years from the
date of its execution and thereafter for successive annual periods, provided
that such continuance is specifically approved annually by the Board of Trustees
(including a majority of the Trustees who are not interested parties hereto as
defined in the Act by a vote cast in person at a meeting called for such
purpose) or by a majority of the outstanding voting securities of the Fund, as
defined in the Act.
IN WITNESS THEREOF, the parties hereto have caused this agreement to be executed
by their officers thereunto duly authorized.
NATIONAL WORLDWIDE OPPORTUNITIES FUND
By: /s/ Ernest N. Mysogland
-----------------------------------
Ernest N. Mysogland, Vice President
Attest:
By: /s/ Mairead M. Collins
------------------------
Mairead M. Collins
Assistant Secretary
NATIONAL SECURITIES & RESEARCH CORPORATION
By: /s/ Denis McAuley
-------------------------------------
Denis McAuley, Senior Vice President
& Chief Financial Officer
Attest:
By: /s/ Mairead M. Collins
------------------------
Mairead M. Collins, Assistant Secretary
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NATIONAL WORLDWIDE OPPORTUNITIES FUND
UNDERWRITING AGREEMENT
Class A Shares
AGREEMENT made and entered into this l4th day of May, 1993, by and between
NATIONAL WORLDWIDE OPPORTUNITIES FUND, a Massachusetts business trust
(hereinafter called the "Fund"), and PHOENIX EQUITY PLANNING & CORPORATION, a
Connecticut corporation (hereinafter called the "Underwriter").
1. The Fund hereby appoints the Underwriter as its exclusive agent to
promote the sale and to arrange for the sale of shares of beneficial interest of
the Fund, including both unissued shares and treasury shares, through
broker-dealers or otherwise, in all parts of the United States and elsewhere
throughout the world. The Fund agrees to sell and deliver its shares, upon the
terms hereinafter set forth, as long as it has unissued and/or treasury shares
available for sale.
(a) The Fund hereby authorizes the Underwriter, subject to law and the
Declaration of Trust of the Fund, to accept, for the account of the Fund,
orders for the purchase of its shares, satisfactory to the Underwriter, as
of the time of receipt of such orders by the dealer, or as otherwise
described in the then-current Prospectus of the Fund.
(b) The public offering price of such shares shall be based on the net
asset value per share (as determined by the Fund) of the outstanding shares
of the Fund. Such net asset value shall be regularly determined on every
business day as of the time of closing of the New York Stock Exchange and
the public offering price based upon such net asset value shall become
effective as set forth from time to time in the current Prospectus; such
net asset value shall also be regularly determined, and the public offering
price based thereon shall become effective, as of such other times for the
regular determination of net asset value as may be required or permitted by
rules of the National Association of Securities Dealers, Inc. or of the
Securities and Exchange Commission. The Fund shall furnish the Underwriter,
with all possible promptness, a statement of each computation of net asset
value, and of the details entering into such computation.
The public offering price of such shares shall be equal to the net
asset value, as described above, plus a commission to be fixed from time to
time by the Fund and the Underwriter and as described in the current
Prospectus of the Fund. The Underwriter may fix quantity discounts and
other similar terms not inconsistent with the provisions of the Investment
Company Act of 1940, as amended (the "Act"). The Underwriter shall not
impose any commission, permit any quantity discounts or impose any other
similar terms in connection with the sale of shares of the Fund except as
disclosed in the then-current Prospectus of the Fund.
<PAGE>
(c) The Underwriter shall be entitled to deduct a commission on all
such shares sold equal to the difference between the public offering price
and the net asset value on which such price is based. If any such
commission is received by the Fund, it will pay such commission to the
Underwriter. Out of such commission, the Underwriter may allow to dealers
such concessions as the Underwriter may determine from time to time.
Notwithstanding anything in this Agreement otherwise provided, sales may be
made at net asset value as provided in the then-current Prospectus of the
Fund.
(d) As reimbursement for expenditures made in connection with
providing certain distribution-related services, the Underwriter may
receive from the Fund a distribution services fee under the terms and
conditions set forth in the Fund's Distribution Plan adopted under Rule
12b-1 under the Act (the "Plan"), as the Plan may be amended from time to
time and subject to any further limitations on such fees as the Trustees
may impose.
2. The Underwriter agrees to devote reasonable time and effort to enlist
investment dealers and otherwise promote the sale and distribution and act as
Underwriter for the sale and distribution of the shares of the Fund as such
arrangements may profitably be made; but so long as its does so, nothing herein
contained shall prevent the Underwriter from entering into similar arrangements
with other funds and to engage in other activities. The Fund reserves the right
to issue shares in connection with any merger or consolidation of the Fund with
any other investment company or any personal holding company or in connection
with offers of exchange exempted from Section 22(d) of the Act.
3. Upon receipt by the Fund at its principal place of business of a written
order from the Underwriter, together with delivery instructions, the Fund shall,
as promptly as practicable, cause certificates for the shares called for in such
order to be delivered or credited in such amounts and in such names as shall be
specified by the Underwriter, against payment therefor in such manner as may be
acceptable to the Fund.
4. All sales literature and advertisements used by the Underwriter in
connection with sales of the shares of the Fund shall be subject to the approval
of the Fund. The Fund authorizes the Underwriter in connection with the sale or
arranging for the sale of its shares to give only such information and to make
only such statements or representations as are contained in the Prospectus or in
sales literature or advertisements approved by the Fund or in such financial
statements and reports as are furnished to the Underwriter pursuant to paragraph
6 below. The Fund shall not be responsible in any way for any information,
statements or
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<PAGE>
representations given or made by the Underwriter or its representatives or
agents other than such information, statements and representations.
5. The Underwriter as agent of the Fund is authorized, subject to the
direction of the Fund, to accept shares for redemption at prices determined as
prescribed in the then-current Prospectus of the Fund. The Fund shall reimburse
the Underwriter monthly for its out-of-pocket expenses reasonably incurred in
carrying out the foregoing authorization, but the Underwriter shall not be
entitled to any commissions or other compensation with respect to such
redemptions. The Underwriter shall report all such redemptions promptly to the
Fund.
6. The Fund shall keep the Underwriter fully informed with regard to its
affairs, shall furnish the Underwriter with a certified copy of all financial
statements, and a signed copy of each report, prepared by independent public
accountants and with such reasonable number of printed copies of each annual and
other periodic reports of the Fund as the Underwriter may request, and shall
cooperate fully in the efforts of the Underwriter to sell and arrange for the
sale of its shares and in the performance by the Underwriter of all of its
duties under this Agreement.
7. The Fund will pay or cause to be paid expenses (including counsel fees
and disbursements) of any registration of its shares of beneficial interest
under, but not limited to, Federal, State or other regulatory authority, fees
for filing periodic reports with regulatory bodies and of preparing, setting in
type and printing the Prospectus and any amendments thereto prepared for use in
connection with the offering of shares of the Fund, for fees and expenses
incident to the issuance of shares of capital stock such as the cost of stock
certificates, issuance taxes, fees of the transfer agent including the cost of
preparing and mailing notices to shareholders pertaining to transactions with
respect to such shareholders' accounts, dividend disbursing agent's costs
including the cost of preparing and mailing notices confirming shares acquired
by the shareholder pursuant to the reinvestment of dividends and distributions,
and the mailing to shareholders of prospectuses, notices and reports as may be
required from time to time by regulatory bodies or for such other purposes,
except for purposes of sales by the Underwriter as outlined in paragraph 8
below.
8. The Underwriter shall pay all of its own costs and expenses (other than
expenses and costs heretofore deemed payable by the Fund and other than expenses
which one or more dealers may bear pursuant to any agreement with the
Underwriter) incident to the sale and distribution of the shares issued or sold
hereunder including (a) expenses of printing copies of prospectuses to be
- 3 -
<PAGE>
used in connection with the sale of shares of the Fund at printer's overrun
costs; (b) expenses of printing and distributing or disseminating any other
literature, advertising or selling aids in connection with the offering of
shares for sale (however, the expenses referred to in (a) and (b) do not include
expenses incurred in connection with the preparation, printing and distribution
of any prospectus or report or other communication to shareholders to the extent
that such expenses are necessarily incurred to effect compliance by the Fund
with any Federal or State law or other regulatory bodies); and (c) expenses of
advertising in connection with such offering.
9. The Fund agrees to register, from time to time as necessary, additional
shares with the Securities and Exchange Commission, State and other regulatory
bodies and to pay the related filing fees therefor and to file such amendments,
reports and other documents as may be necessary in order that there may be no
untrue statement of a material fact in the Registration Statement or Prospectus
or no omission to state a material fact therein necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. As used in this Agreement, the term "Registration
Statement" shall mean the Registration Statement most recently filed by the Fund
with the Securities and Exchange Commission and effective under the Securities
Act of 1933, as amended, as such Registration Statement is amended from time to
time, and the term "Prospectus" shall mean the most recent form of prospectus
authorized by the Fund for use by the Underwriter and by dealers.
10. This Agreement shall terminate automatically in the event of its
assignment. The term "assignment" for this purpose shall have the meaning
defined in Section 2(a)(4) of the Act.
11. This Agreement has been approved by the Board of Trustees of the Fund,
including the Trustees who are not "interested persons" of the Fund, as defined
in the Act, and who have no direct or indirect financial interest in this
Agreement (the "Disinterested Trustees"), by vote cast in person at a meeting
called for the purpose of voting on this Agreement. This Agreement shall
continue in effect for two years from its effective date and thereafter for
successive annual periods, provided that such continuance is specifically
approved annually be a majority of the Trustees, acting on behalf of the Fund,
and by a majority of the Disinterested Trustees, cast in person at a meeting
called for such purpose.
12. This Agreement may be terminated at any time, without the payment of
any penalty, by vote of a majority of the Disinterested Trustees or by vote of a
majority of the outstanding voting securities of the Fund, as that term is
defined in the Act, on not
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<PAGE>
more than 60 days' written notice to the Underwriter.
13. The Declaration of Trust establishing the Fund, dated November 4, 1991,
a copy of which, together with all amendments thereto (the "Declaration"), is on
file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name "National Worldwide Opportunities Fund" refers to the
Trustees under the Declaration collectively as trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of the
Fund may be held to any personal liability, nor may resort be had to their
private property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of said Fund, but the Fund property only shall be
liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
NATIONAL WORLDWIDE OPPORTUNITIES
FUND
By: /s/ Ernest N. Mysogland
-----------------------------------------
Ernest N. Mysogland, Vice President
Attest:
By: /s/ Mairead M. Collins
--------------------------
Mairead M. Collins
Assistant Secretary
PHOENIX EQUITY PLANNING CORPORATION
By: /s/ Martin J. Gavin
-----------------------------------------
Martin J. Gavin
Executive Vice President
Attest:
By: /s/ Particia O. McLauglin
----------------------------------
Patricia 0. McLaughlin
Assistant Secretary
natl\wowldwid.u
- 5 -
EXHIBIT 6.2
PHOENIX WORLDWIDE OPPORTUNITIES FUND
UNDERWRITING AGREEMENT
CLASS B SHARES
THIS AGREEMENT by and between PHOENIX WORLDWIDE OPPORTUNITIES FUND, a
Massachusetts business trust (the ("Fund"), and PHOENIX EQUITY PLANNING
CORPORATION, a Connecticut corporation (the "Underwriter").
1. The Fund hereby appoints the Underwriter as exclusive agent to promote the
sales and to arrange for the sale of Class B shares of the Fund, including both
unissued shares and treasury shares, through broker-dealers or otherwise, in all
parts of the United States and elsewhere throughout the world. The Fund agrees
to sell and deliver its shares, upon the terms hereinafter set forth, as long as
it has unissued and/or treasury shares available for sale.
(a) The Fund hereby authorizes the Underwriter, subject to law and the
Articles of Incorporation of the Fund, to accept, for the account of the Fund,
orders for the purchase of its Class B shares, satisfactory to the Underwriter,
as of the time of receipt of such orders by the dealer, or as otherwise
described in the Prospectus of the Fund.
(b) The public offering price of such Class B shares shall be based on the
net asset value per share (as determined by the Fund) of the outstanding Class B
shares of the Fund. Such net asset value shall be regularly determined on every
business day as of the time of closing of the general trading session of the New
York Stock Exchange and the public offering price based upon such net asset
value shall become effective as set forth from time to time in the current
Prospectus; such net asset value shall also be regularly determined, and the
public offering price based thereon shall become effective, as of such other
times for the regular determination of net asset value as may be required or
permitted by rules of the National Association of Securities Dealers, Inc. or
the Securities and Exchange Commission. The Fund shall furnish the Underwriter,
with all possible promptness, a statement of each computation of net asset
value, and of the details entering into such computation. The public offering
price of such Class B shares shall be equal to the net asset value, as described
above, plus a commission to be fixed from time to time by the Fund and the
Underwriter and as described in the current Prospectus of the Fund. The
Underwriter may fix quantity discounts and other similar terms not inconsistent
with the provisions of the Investment Company Act of 1940, as amended (the
"Act"). The Underwriter shall not impose any commission, permit any quantity
discounts or impose any other similar terms in connection with the sale of Class
B shares of the Fund except as disclosed in the Prospectus of the Fund.
(c) As compensation for providing services under this Agreement, the
Underwriter shall receive from the Fund all contingent deferred sales charges
applied on redemptions of Class B shares. Whether and to what extent a
contingent deferred sales charge will be imposed with respect to a redemption
shall be determined in accordance with, and in a manner set forth in, the Fund's
Prospectus.
<PAGE>
-2-
(d) As reimbursement for expenditures made in connection with providing
certain distribution-related services, the Underwriter may receive from the Fund
a distribution services fee under the terms and conditions set forth in the
Fund's Distribution Plan for Class B Shares adopted under Rule 12b-1 under the
Act (the "Plan"), as the Plan may be amended from time to time and subject to
any further limitations on such fees as the Trustees may impose.
2. The Underwriter agrees to devote reasonable time and effort to enlist
investment dealers and otherwise promote the sale and distribution and act as
Underwriter for the sale and -- distribution of the shares of the Fund as such
arrangements may profitably be made; but so long as it does so, nothing
contained herein shall prevent the Underwriter from entering into similar
arrangements with other funds and to engage in other activities. The Fund
reserves the right to issue shares in connection with any merger or
consolidation of the Fund with any other investment company or any personal
holding company or in connection with offers of exchange exempted from Section
22(d) of the Act.
3. Upon receipt by the Fund at its principal place of business of a written
order from the Underwriter, together with the delivery instructions, the Fund
shall, as promptly as practicable, cause certificates for the shares called for
in such order to be delivered or credited in such amounts and in such names as
shall be specified by the Underwriter, against payment therefor in such manner
as may be acceptable to the Fund.
4. All sales literature and advertisements used by the Underwriter in
connection with sales of the shares of the Fund shall be subject to the approval
of the Fund. The Fund authorizes the Underwriter in connection with the sale or
arranging for the sale of its shares to give only such information and to make
only such statements or representations as are contained in the Prospectus or in
sales literature or advertisements approved by the Fund or in such financial
statements and reports as are furnished to the Underwriter pursuant to paragraph
6 below. The Fund shall not be responsible in any way for any information,
statements or representations given or made by the Underwriter or its
representatives or agents.
5. The Underwriter, as agent of the Fund, is authorized, subject to the
direction of the Fund, to accept shares for redemption at prices determined as
prescribed in the then-current Prospectus of the Fund. The Fund shall reimburse
the Underwriter monthly for its out-of-pocket expenses reasonably incurred in
carrying out the foregoing authorization, but the Underwriter shall not be
entitled to any commissions or other compensation with respect to such
redemptions. The Underwriter shall report all such redemptions promptly to the
Fund.
6. The Fund shall keep the Underwriter fully informed with regard to its
affairs, shall furnish the Underwriter with a certified copy of all financial
statements, and a signed copy of each report, prepared by independent public
accountants and with such reasonable number of printed copies of each annual and
other periodic reports of the Fund as the Underwriter may request, and shall
cooperate fully in the efforts of the Underwriter to sell and arrange for the
sale of its shares and in the performance by the Underwriter of all of its
duties under this Agreement.
<PAGE>
-3-
7. The Fund will pay or cause to be paid expenses (including counsel fees
and disbursements) of any registration of its shares under, but not limited to,
Federal, State or other regulatory authority, fees for filing periodic reports
with regulatory bodies and of preparing, setting in type and printing the
Prospectus and any amendments thereto prepared for use in connection with the
offering of shares of the Fund, for fees and expenses incident to the issuance
of shares of capital stock such as the cost of stock certificates, issuance
taxes, fees of the transfer agent including the cost of preparing and mailing
notices to shareholders pertaining to transactions with respect to such
shareholders' accounts, dividend disbursing agent's costs including the cost of
preparing and mailing notices confirming shares acquired by the shareholder
pursuant to the reinvestment of dividends and distributions, and mailing to
shareholders of prospectuses, notices and reports as may be required from time
to time by regulatory bodies or for such other purposes, except for purposes of
sales by the Underwriter as outlined in paragraph 8 below.
8. The Underwriter shall pay all of its own costs and expenses (other than
expenses and costs heretofore deemed payable by the Fund and other than expenses
which one or more dealers may bear pursuant to any agreement with the
Underwriter) incident to the sale and distribution of the Class B shares issued
or sold hereunder including (a) expenses of printing copies of the Prospectus to
be used in connection with the sale of Class B shares of the Fund at printer's
overrun cost; (b) expenses of printing and distributing or disseminating any
other literature, advertising or selling aids in connection with the offering of
Class B shares for sale (however, the expenses referred to in (a) and (b) do not
include expenses incurred in connection with the preparation, printing and
distribution of any prospectus or report or other communication to shareholders
to the extent that such expenses are necessarily incurred to effect compliance
by the Fund with any Federal or State law or other regulatory bodies); and (c)
expenses of advertising in connection with such offering.
9. The Fund agrees to register, from time to time as necessary, additional
shares with the Securities and Exchange Commission, State and other regulatory
bodies and to pay the related filing fees therefor and to file such amendments,
reports and other documents as may be necessary in order that there may be no
untrue statement of a material fact in the Registration Statement or Prospectus
or no omission to state a material fact therein necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. As used in this Agreement, the term "Registration Statement"
shall mean the Registration Statement most recently filed by the Fund with the
Securities and Exchange Commission and effective under the Securities Act of
1933, as amended, as such Registration Statement is amended from time to time,
and the term "Prospectus" shall mean the most recent form of prospectus
authorized by the Fund for use by the Underwriter and by dealers.
10. This Agreement shall terminate automatically in the event of its
assignment. The term "assignment" for this purpose shall have the meaning
defined in Section 2(a)(4) of the Act.
11. This Agreement has been approved by the Trustees of the Fund, including
the Trustees who are not "interested persons" of the Fund, as defined in the
Act, and who have no direct or indirect financial interest in this Agreement
(the "Disinterested Trustees"), by vote cast in person
<PAGE>
-4-
at a meeting called for the purpose of voting on this Agreement. This Agreement
shall continue in effect for two years from its effective date, and thereafter
for successive annual periods, provided that such continuance is specifically
approved annually by a majority of the Trustees, acting on behalf of the Fund,
and by a majority of the Disinterested Trustees, cast in person at a meeting
called for such purpose.
12. This Agreement may be terminated at any time, without the payment of
any penalty, by vote of a majority of the Disinterested Trustees or by vote of a
majority of the outstanding voting securities of the Fund, as that term is
defined in the Act, on not more than 60 days' written notice to the Underwriter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized this 26th day of May, 1994
PHOENIX WORLDWIDE OPPORTUNITIES
FUND
Attest: /s/ Richard Wirth By: /s/ Philip R. McLoughlin
--------------------- -------------------------------
Richard Wirth Name: Philip R. McLoughlin
Asst. Secretary Title: President
PHOENIX EQUITY PLANNING
CORPORATION
Attest: /s/ Patricia O. McLaughlin By: /s/ Martin J. Gavin
-------------------------- -------------------------------
Patricia O. McLaughlin Name: Martin J. Gavin
Title: Executive Vice President
AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
PHOENIX WORLDWIDE OPPORTUNITIES FUND
<PAGE>
TABLE OF CONTENTS
1. Employment of custodian 1
2. Powers and Duties of the Custodian
with respect to Property of the Fund
held by the Custodian 1
2.1 Safekeeping 2
2.2 Manner of Holding Securities 2
2.3 Registration 2
2.4 Purchases 2
2.5 Exchanges 4
2.6 Sales of Securities 4
2.7 Depositary Receipts 5
2.8 Exercise of Rights; Tender Offers 6
2.9 Stock Dividends, Rights, Etc. 6
2.10 Options 6
2.11 Borrowings 8
2.12 Demand Deposit Bank Accounts 8
2.13 Interest Bearing Call or Time Deposits 9
2.14 Futures Contracts 10
2.15 Foreign Exchange Transactions 12
2.16 Stock Loans 13
2.17 Collections 13
2.18 Dividends, Distributions and Redemptions 14
2.19 Proxies, Notices, Etc. 15
2.20 Nondiscretionary Details 15
2.21 Bills 16
2.22 Deposit of Fund Assets in Securities Systems 16
2.23 Other Transfers 18
2.24 Investment Limitations 19
2.25 Custodian Advances 19
2.26 Restricted Securities 21
2.27 Proper Instructions 22
2.28 Segregated Account 23
3. Powers and Duties of the Custodian with
Respect to the Appointment of Subcustodians 24
4. Assistance by the Custodian as to Certain Matters 28
5. Powers and Duties of the Custodian with
Respect to its Role as Recordkeeping Agent 29
5.1 Records 29
5.2 Accounts 29
5.3 Access to Records 29
<PAGE>
-2-
6. Standard of Care and Related Matters 29
6.1 Liability of the Custodian with
Respect to Proper Instructions;
Evidence of Authority; Etc. 30
6.2 Liability of the Custodian with
Respect to Use of Securities Systems
and Foreign Depositories 31
6.3 Standard of Care; Liability;
Indemnification 31
6.4 Reimbursement of Disbursements, Etc. 33
6.5 Security for Obligations to Custodian 33
6.6 Appointment of Agents 34
6.7 Powers of Attorney 34
7. Compensation of the Custodian 35
8. Termination; Successor Custodian 35
9. Amendment 36
10. Governing Law 36
11. Notices 36
12. Binding Effect 37
13. Counterparts 37
14. Miscellaneous 37
<PAGE>
CUSTODIAN AGREEMENT
AGREEMENT made this 11th day of August, 1994, between PHOENIX WORLDWIDE
OPPORTUNITIES FUND (the "Fund") and Brown Brothers Harriman & Co. (the
"Custodian");
WITNESSETH: That in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. Employment of Custodian: The Fund hereby employs and appoints the
Custodian as a custodian for the term and subject to the provisions of this
Agreement. The Custodian shall not be under any duty or obligation to require
the Fund to deliver to it any securities or funds owned by the Fund and shall
have no responsibility or liability for or on account of securities or funds not
so delivered. The Fund will deposit with the Custodian copies of the Declaration
of Trust or Certificate of Incorporation and By-Laws (or comparable documents)
of the Fund and all amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or convenient to the Custodian
in the performance of its duties.
2. Powers and Duties of the Custodian with respect to Property of the Fund
held by the Custodian: Except for securities and funds held by any Subcustodians
appointed pursuant to the provisions of Section 3 hereof or held by any Foreign
Depositories (as said term is defined in Section 3) utilized by a
- 1 -
<PAGE>
Subcustodian, the Custodian shall have and perform the following powers and
duties:
2.1 Safekeeping - To keep safely the securities and other assets of the
Fund that have been delivered to the Custodian and, on behalf of the Fund, from
time to time to receive delivery of securities for safekeeping.
2.2 Manner of Holding Securities - To hold securities of the Fund (1) by
physical possession of the share certificates or other instruments representing
such securities in registered or bearer form, or (2) in book-entry form by a
Securities System (as said term is defined in Section 2.22) or a Foreign
Depository.
2.3 Registration - To hold registered securities of the Fund, with or
without any indication of fiduciary capacity, provided that securities are held
in an account of the Custodian containing only assets of the Fund or only assets
held as fiduciary or custodian for customers.
2.4 Purchases - Upon receipt of Proper Instructions, as defined in Section
2.27, insofar as funds are available for the purpose, to pay for and receive
securities purchased for the account of the Fund, payment being made only upon
receipt of the securities (1) by the Custodian, or (2) by a clearing corporation
of a national securities exchange of which the Custodian is a member, or (3) by
a Securities System or a Foreign Depository. However, (i) in the case of
repurchase agreements entered into by the Fund, the Custodian (as well as an
Agent) may release funds to a Securities System, a Foreign Depository or a
Subcustodian
- 2 -
<PAGE>
prior to the receipt of advice from the Securities System, Foreign Depository or
Subcustodian that the securities underlying such repurchase agreement have been
transferred by book entry into the Account (as defined in Section 2.22) of the
Custodian (or such Agent) maintained with such Securities System or to the
Foreign Depository or Subcustodian, so long as such payment instructions to the
Securities System, Foreign Depository or Subcustodian include a requirement that
delivery is only against payment for securities, (ii) in the case of foreign
exchange contracts, options, time deposits, call account deposits, currency
deposits, and other deposits, contracts or options pursuant to Sections 2.10,
2.12, 2.13, 2.14 and 2.15, the Custodian may make payment therefor without
receiving an instrument evidencing said deposit, contract or option so long as
such payment instructions detail specific securities to be acquired, and (iii)
in the case of securities as to which payment for the security and receipt of
the instrument evidencing the security are under generally accepted trade
practice or the terms of the instrument representing the security expected to
take place in different locations or through separate parties, such as
commercial paper which is indexed to foreign currency exchange rates,
derivatives and similar securities, the Custodian may make payment for such
securities prior to receipt thereof in accordance with such generally accepted
trade practice or the terms of the instrument representing such security.
Except as specifically permitted in this Agreement or as
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<PAGE>
authorized or permitted in Proper Instructions, in any and every case where
payment for purchase of domestic securities for the Fund is made by the
Custodian in advance of receipt of the securities, the Custodian shall be liable
to the Fund for such securities to the same extent as if the securities had been
received by the Custodian.
2.5 Exchanges - Upon receipt of proper instructions, to exchange securities
held by it for the account of the Fund for other securities in connection with
any reorganization, recapitalization, split-up of shares, change of par value,
conversion or other event relating to the securities or the issuer of such
securities and to deposit any such securities in accordance with the terms of
any reorganization or protective plan. Without proper instructions, the
Custodian may surrender securities in temporary form for definitive securities,
may surrender securities for transfer into an account as permitted in Section
2.3, and may surrender securities for a different number of certificates or
instruments representing the same number of shares or same principal amount of
indebtedness, provided the securities to be issued are to be delivered to the
Custodian.
2.6 Sales of Securities - Upon receipt of proper instructions, to make
delivery of securities which have been sold for the account of the Fund, but
only against payment therefor (1) in cash, by a certified check, bank cashier's
check, bank credit, or bank wire transfer, or (2) by credit to the account of
the Custodian with a clearing corporation of a national
- 4 -
<PAGE>
securities exchange of which the Custodian is a member, or (3) by credit to the
account of the Custodian or an Agent of the Custodian with a Securities System
or a Foreign Depository; provided, however, that (i) in the case of delivery of
physical certificates or instruments representing securities, the Custodian may
make delivery to the broker buying the securities, against receipt therefor, for
examination in accordance with "street delivery" custom, provided that the
payment therefor is to be made to the Custodian (which payment may be made by a
broker's check) or that such securities are to be returned to the Custodian, and
(ii) in the case of securities referred to in clause (iii) of the last sentence
of Section 2.4, the Custodian may make settlement, including with respect to the
form of payment, in accordance with generally accepted trade practice relating
to such securities or the terms of the instrument representing said security.
2.7 Depositary Receipts - Upon receipt of proper instructions, to instruct
a Subcustodian or an Agent to surrender securities to the depositary used by an
issuer of American Depositary Receipts or International Depositary Receipts
(hereinafter collectively referred to as "ADRs") for such securities against a
written receipt therefor adequately describing such securities and written
evidence satisfactory to the Subcustodian or Agent that the depositary has
acknowledged receipt of instructions to issue with respect to such securities
ADRs in the name of the Custodian, or a nominee of the Custodian,
- 5 -
<PAGE>
for delivery to the Custodian in Boston, Massachusetts, or at such other place
as the Custodian may from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer
thereof against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian that the issuer
of the ADRs has acknowledged receipt of instructions to cause its depositary to
deliver the securities underlying such ADRs to a Subcustodian or an Agent.
2.8 Exercise of Rights; Tender Offers - Upon timely receipt of proper
instructions, to deliver to the issuer or trustee thereof, or to the agent of
either, warrants, puts, calls, rights or similar securities for the purpose of
being exercised or sold, provided that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian, and, upon receipt
of proper instructions, to deposit securities upon invitations for tenders of
securities, provided that the consideration is to be paid or delivered or the
tendered securities are to be returned to the Custodian.
2.9 Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
2.10 Options - Upon receipt of proper instructions or upon receipt of
instructions given pursuant to any agreement relating to an option or as
otherwise provided in any such agreement to
- 6 -
<PAGE>
(i) receive and retain, to the extent provided to the Custodian, confirmations
or other documents evidencing the purchase, sale or writing of an option of any
type on or in respect of a security, securities index or similar form of
property by the Fund; (ii) deposit and maintain in a segregated account, either
physically or by book-entry in a Securities System or Foreign Depository or with
a broker, dealer or other entity, securities, cash or other assets in connection
with options transactions entered into by the Fund; (iii) transfer securities,
cash or other assets to a Securities System, Foreign Depository, broker, dealer
or other entity, as margin (including variation margin) or other security for
the Fund's obligations in respect of any option; and (iv) pay, release and/or
transfer such securities, cash or other assets in accordance with a notice or
other communication evidencing the expiration, termination or exercise of or
default under any such option furnished by The Options Clearing Corporation, by
the securities or options exchange on which such option is traded or by such
broker, dealer or other entity as may be responsible for handling such options
transaction or have authority to give such notice or communication. The
Custodian shall not be responsible for the sufficiency of assets held in any
segregated account established in compliance with applicable margin maintenance
requirements or the performance of the other terms of any agreement relating to
an option. Notwithstanding the foregoing, options on futures contracts and
options to purchase and sell foreign currencies shall be governed by Sections
2.14 and 2.15.
- 7 -
<PAGE>
2.11 Borrowings - Upon receipt of proper instructions, to deliver
securities of the Fund to lenders or their agents as collateral for borrowings
effected by the Fund, provided that such borrowed money is payable to or upon
the Custodian's order as Custodian for the Fund.
2.12 Demand Deposit Bank Accounts - To open and operate an account or
accounts in the name of the Fund, subject only to draft or order by the
Custodian, and to hold in such account or accounts as a deposit accepted on the
Custodian's books cash, including foreign currency, received for the account of
the Fund other than cash held as deposits with Banking Institutions in
accordance with the following paragraph. The responsibilities of the Custodian
for cash, including foreign currency, of the Fund accepted on the Custodian's
books as a deposit shall be that of a U. S. bank for a similar deposit.
If and when authorized by proper instructions, the Custodian may open and
operate an additional account(s) in such other banks or trust companies as may
be designated by the Fund in such instructions (any such bank or trust company
so designated by the Fund being referred to hereafter as a "Banking
Institution"), and may deposit cash, including foreign currency, of the Fund in
such account or accounts, provided that such account(s) (hereinafter
collectively referred to as "demand deposit bank accounts") shall be in the name
of the Custodian or a nominee of the Custodian for the account of the Fund or
for the account of the Custodian's customers generally and shall be subject only
to the Custodian's
- 8 -
<PAGE>
draft or order; provided that any such demand deposit bank account shall contain
only assets held by the Custodian as a fiduciary or custodian for the Fund
and/or other customers and that the records of the Custodian shall indicate at
all times the Fund and/or other customers for which such funds are held in such
account and the respective interests therein. Such demand deposit accounts may
be opened with Banking Institutions in the United States and in other countries
and may be denominated in either U. S. Dollars or other currencies as the Fund
may determine. The records for each such account will be maintained by the
Custodian but the deposits in any such account shall not constitute a deposit
liability of the Custodian. All such deposits, including with Subcustodians,
shall be deemed to be portfolio securities of the Fund and accordingly the
responsibility of the Custodian therefor shall be the same as and no greater
than the Custodian's responsibility in respect of other portfolio securities of
the Fund. The authorization by the Fund to appoint a Subcustodian as such shall
also constitute a proper instruction to open a demand deposit bank account
subject to the provisions of this paragraph with such Subcustodian.
2.13 Interest Bearing Call or Time Deposits - To place interest bearing
fixed term and call deposits with such banks and in such amounts as the Fund may
authorize pursuant to proper instructions. Such deposits may be placed with the
Custodian or with Subcustodians or other Banking Institutions as the Fund may
determine, in the name of the Custodian or a nominee of the
- 9 -
<PAGE>
Custodian for the account of the Fund or the account of the Custodian's
customers generally and subject only to the Custodian's draft or order; provided
that any such deposit shall be held in an account containing only assets held by
the Custodian as a fiduciary or custodian for the Fund and/or other customers
and that the records of the Custodian shall indicate at all times the Fund
and/or other customers for which such funds are held in such account and the
respective interests therein. Deposits may be denominated in U. S. Dollars or
other currencies and need not be evidenced by the issuance or delivery of a
certificate to the Custodian, provided that the Custodian shall include in its
records with respect to the assets of the Fund appropriate notation as to the
amount and currency of each such deposit, the accepting Banking Institution and
other appropriate details, and shall retain such forms of advice or receipt
evidencing the deposit, if any, as may be forwarded to the Custodian by the
Banking Institution. Funds, other than those accepted on the Custodian's books
as a deposit, but including those placed with Subcustodians, shall be deemed
portfolio securities of the Fund and the responsibilities of the Custodian
therefor shall be the same as those for demand deposit bank accounts placed with
other banks, as described in the second paragraph of Section 2.12 of this
Agreement. The responsibility of the Custodian for funds accepted on the
Custodian's books as a deposit shall be that of a U. S. bank for a similar
deposit.
2.14 Futures Contracts. Upon receipt of proper
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instructions or upon receipt of instructions given pursuant to any agreement
relating to a futures contract or an option thereon or as otherwise provided in
any such agreement, to (i) receive and retain, to the extent provided to the
Custodian, confirmations or other documents evidencing the purchase or sale of a
futures contract or an option on a futures contract by the Fund; (ii) deposit
and maintain in a segregated account, either physically or by book-entry in a
Securities System or Foreign Depository, for the benefit of any futures
commission merchant, or pay to such futures commission merchant, securities,
cash or other assets designated by the Fund as initial, maintenance or variation
"margin" deposits intended to secure the Fund's performance of its obligations
under any futures contract purchased or sold or any option on a futures contract
written, purchased or sold by the Fund, in accordance with the provisions of any
agreement relating thereto or the rules of the Commodity Futures Trading
Commission and/or any contract market or any similar organization on which such
contract or option is traded; and (iii) pay, release and/or transfer securities,
cash or other assets into or out of such margin accounts only in accordance with
any such agreement or rules. The Custodian shall not be responsible for the
sufficiency of assets held in any segregated account established in compliance
with applicable margin maintenance requirements or the performance of the other
terms of any agreement relating to a futures contract or an option thereon.
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<PAGE>
2.15 Foreign Exchange Transactions - Pursuant to proper instructions, to
settle foreign exchange contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf and for the account of the
Fund with such currency brokers or Banking Institutions, including
Subcustodians, as the Fund may direct pursuant to proper instructions. The
Custodian shall be responsible for the transmission of cash and instructions to
and from the currency broker or Banking Institution with which the contract or
option is made, the safekeeping of all certificates and other documents and
agreements evidencing or relating to such foreign exchange transactions as the
Custodian may receive and the maintenance of proper records as set forth in
Section 5.1. In connection with such transactions, as to which Proper
Instructions have been sent, the Custodian is authorized to make free outgoing
payments of cash in the form of U. S. Dollars or foreign currency without
receiving confirmation of a foreign exchange contract or option or confirmation
that the countervalue currency completing the foreign exchange contract has been
delivered or received or that the option has been delivered or received. The
Fund accepts full responsibility for its use of third-party foreign exchange
dealers and for execution of said foreign exchange contracts and options and
understands that the Fund shall be responsible for any and all costs and
interest charges which may be incurred by the Fund or the Custodian as a result
of the failure or delay of third parties to deliver foreign exchange.
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<PAGE>
Alternatively, such transactions may be undertaken by the Custodian as
principal, if instructed by the Fund.
Foreign exchange contracts and options, other than those executed with the
Custodian as principal, but including those executed with Subcustodians, shall
be deemed to be portfolio securities of the Fund and the responsibility of the
Custodian therefor shall be the same as and no greater than the Custodian's
responsibility in respect of other portfolio securities of the Fund. The
responsibility of the Custodian with respect to foreign exchange contracts and
options executed with the Custodian as principal shall be that of a U. S. bank
with respect to a similar contract or option.
2.16 Stock Loans - Upon receipt of proper instructions, to deliver
securities of the Fund, in connection with loans of securities by the Fund, to
the borrower thereof prior to receipt of the collateral, if any, for such
borrowing, provided that for stock loans secured by cash collateral the
Custodian's instructions to any Securities System holding such securities
require that the Securities System may deliver the securities to the borrower
thereof only upon receipt of the collateral for such borrowing.
2.17 Collections - (i) To collect and receive all income, payments of
principal and other payments with respect to the securities held hereunder, and
in connection therewith to deliver the certificates or other instruments
representing the securities to the issuer thereof or its agent when securities
are called,
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<PAGE>
redeemed, retired or otherwise become payable; provided, that the payment is to
be made in such form and manner and at such time, which may be after delivery by
the Custodian of the instrument representing the security, as is in accordance
with the terms of the instrument representing the security, or such proper
instructions as the Custodian may receive, or governmental regulations, the
rules of Securities Systems, Foreign Depositories or other U.S. or foreign
securities depositories and clearing agencies or, with respect to securities
referred to in clause (iii) of the last sentence of Section 2.4, in accordance
with generally accepted trade practice: (ii) to execute ownership and other
certificates and affidavits for all federal and state tax purposes in connection
with receipt of income, principal or other payments with respect to securities
of the Fund or in connection with transfer of securities; and (iii) pursuant to
proper instructions to take such other actions with respect to collection or
receipt of funds or transfer of securities which involve an investment decision.
2.18 Dividends, Distributions and Redemptions - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or
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securities, insofar as available, for the payment of dividends or other
distributions to Fund shareholders. Upon receipt of proper instructions from the
Fund, or upon receipt of instructions from the Shareholder Servicing Agent
(given by such person or persons and in such manner on behalf of the Shareholder
Servicing Agent as the Fund shall have authorized), the Custodian shall release
funds or securities, insofar as available, to the Shareholder Servicing Agent or
as such Agent shall otherwise instruct for payment to Fund shareholders who have
delivered to such Agent a request for repurchase or redemption of their shares
of the Fund.
2.19 Proxies, Notices, Etc. - Promptly to deliver or mail to the Fund all
forms of proxies and all notices of meetings and any other notices or
announcements affecting or relating to securities owned by the Fund that are
received by the Custodian, and upon receipt of proper instructions, to execute
and deliver or cause its nominee to execute and deliver such proxies or other
authorizations as may be required. Neither the Custodian nor its nominee shall
vote upon any of such securities or execute any proxy to vote thereon or give
any consent or take any other action with respect thereto (except as otherwise
herein provided) unless ordered to do so by proper instructions.
2.20 Nondiscretionary Details - Without the necessity of express
authorization from the Fund, (1) to attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase, transfer or other
dealings with securities, funds or other property of the Fund held by the
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<PAGE>
Custodian except as otherwise directed from time to time by the Directors or
Trustees of the Fund, and (2) to make payments to itself or others for minor
expenses of handling securities or other similar items relating to the
Custodian's duties under this Agreement, provided that all such payments shall
be accounted for to the Fund.
2.21 Bills - Upon receipt of proper instructions, to pay or cause to be
paid, insofar as funds are available for the purpose, bills, statements and
other obligations of the Fund (including but not limited to interest charges,
taxes, management fees, compensation to Fund officers and employees, and other
operating expenses of the Fund).
2.22 Deposit of Fund Assets in Securities Systems - The Custodian may
deposit and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) the Participants Trust Company, (iii) any book-entry system as
provided in Subpart O of Treasury Circular No. 300, 31 CFR 306, Subpart B of 31
CFR Part 350, or the book-entry regulations of federal agencies substantially in
the form of Subpart O, or (iv) any other domestic 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 and whose use the
Fund has previously approved in writing (each of the foregoing being referred to
in this Agreement as a "Securities System"). Utilization of a Securities System
shall be in accordance with applicable Federal Reserve Board and Securities
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<PAGE>
and Exchange Commission rules and regulations, if any, and subject to the
following provisions:
1) The Custodian may deposit and/or maintain Fund securities, either
directly or through one or more Agents appointed by the Custodian (provided that
any such agent shall be qualified to act as a custodian of the Fund pursuant to
the Investment Company Act of 1940 and the rules and regulations thereunder), in
a Securities System provided that such securities are represented in an account
("Account") of the Custodian or such Agent in the Securities System which shall
not include any assets of the Custodian or Agent other than assets held as a
fiduciary, custodian, or otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of the
Fund upon (i) receipt of advice from the 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 Fund. The Custodian shall transfer securities sold for the account of the
Fund upon (i) receipt of advice from the 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 Fund. Copies of all advices from the
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Securities System of transfers of securities for the account of the Fund shall
identify the Fund, be maintained for the Fund by the Custodian or an Agent as
referred to above, and be provided to the Fund at its request. The Custodian
shall furnish the Fund confirmation of each transfer to or from the account of
the Fund in the form of a written advice or notice and shall furnish to the Fund
copies of daily transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund on the next business day;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System; and the Custodian and such Agents
shall send to the Fund such reports on their own systems of internal accounting
control as the Fund may reasonably request from time to time.
5) At the written request of the Fund, the Custodian will terminate the use
of any such Securities System on behalf of the Fund as promptly as practicable.
2.23 Other Transfers - To deliver securities, funds and other property of
the Fund to a Subcustodian or another custodian as necessary to effect
transactions authorized by proper instructions and upon receipt of proper
instructions, to deliver securities, funds and other property of the Fund to a
Subcustodian or another custodian of the Fund; and, upon receipt
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of proper instructions, to make such other disposition of securities, funds or
other property of the Fund in a manner other than or for purposes other than as
enumerated elsewhere in this Agreement, provided that the instructions relating
to such disposition shall state the amount of securities to be delivered and the
name of the person or persons to whom delivery is to be made.
2.24 Investment Limitations - In performing its duties generally, and more
particularly in connection with the purchase, sale and exchange of securities
made by or for the Fund, the Custodian may assume unless and until notified in
writing to the contrary that proper instructions received by it are not in
conflict with or in any way contrary to any provisions of the Fund's Declaration
of Trust or Certificate of Incorporation or By-Laws (or comparable documents) or
votes or proceedings of the shareholders or Trustees or Directors of the Fund.
The Custodian shall in no event be liable to the Fund and shall be indemnified
by the Fund for any violation which occurs in the course of carrying out
instructions given by the Fund of any investment limitations to which the Fund
is subject or other limitations with respect to the Fund's powers to make
expenditures, encumber securities, borrow or take similar actions affecting the
Fund.
2.25 Custodian Advances. - In the event that the Custodian is directed by
proper instructions to make any payment or transfer of funds on behalf of the
Fund for which there would be, at the close of business on the date of such
payment or
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<PAGE>
transfer, insufficient funds held by the Custodian on behalf of the Fund, the
Custodian may, in its discretion without further proper instructions, provide an
advance ("Advance") to the Fund in an amount sufficient to allow the completion
of the transaction by reason of which such payment or transfer of funds is to be
made. In addition, in the event the Custodian is directed by proper instructions
to make any payment or transfer of funds on behalf of the Fund as to which it is
subsequently determined that the Fund has overdrawn its cash account with the
Custodian as of the close of business on the date of such payment or transfer,
said overdraft shall constitute an Advance. Any Advance shall be payable on
demand by Custodian, unless otherwise agreed by the Fund and the Custodian, and
shall accrue interest from the date of the Advance to the date of payment by the
Fund at a rate agreed upon from time to time by the Custodian and the Fund. It
is understood that any transaction in respect of which the Custodian shall have
made an Advance, including but not limited to a foreign exchange contract or
transaction in respect of which the Custodian is not acting as a principal, is
for the account of and at the risk of the Fund, and not, by reason of such
Advance, deemed to be a transaction undertaken by the Custodian for its own
account and risk. The Custodian and the Fund acknowledge that the purpose of
Advances is to finance temporarily the purchase or sale of securities for prompt
delivery in accordance with the settlement terms of such transactions or to meet
emergency expenses not reasonably foreseeable by the Fund.
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2.26 Restricted Securities. - In the case of a "restricted security", the
Fund shall have the responsibility to provide to or obtain for the Custodian,
the issuer of the security or other appropriate third party any necessary
documentation, including without limitation, legal opinions or consents, and to
take any necessary actions required in connection with the registration of
restricted securities in the manner provided in Section 2.3 upon acquisition
thereof by the Fund or required in connection with any sale or other disposition
thereof by the Fund. Upon acquisition and until so registered, the Custodian
shall have no duty to service such restricted securities, including without
limitation, the receipt and collection of cash and stock dividends, rights and
other items of like nature, nor shall the Custodian have responsibility for the
inability of the Fund to exercise in a timely manner any right in respect of any
restricted security or to take any action in a timely manner in respect of any
other type of corporate action relating to a restricted security. Similarly, the
Custodian shall not have responsibility for the inability of the Fund to sell or
otherwise transfer in a timely manner any restricted security in the absence of
any such documentation or action to be provided, obtained or taken by the Fund.
At such time as the Custodian shall receive any restricted security, regardless
of when it shall be registered as aforesaid, the Fund shall also deliver to the
Custodian a term sheet summarizing those rights, restrictions or other matters
of which the Custodian should have
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<PAGE>
knowledge, such as exercise periods, expiration dates and payment dates, in
order to assist the Custodian in servicing such securities. As used herein, the
term "restricted security" shall mean a security which is subject to
restrictions on transfer, whether by reason of contractual restrictions or
federal, state or foreign securities or similar laws, or a security which has
special rights or contractual features which do not apply to publicly-traded
shares of, or comparable interests representing, such security.
2.27 Proper Instructions - Proper instructions shall mean a tested telex
from the Fund or a written request, direction, instruction or certification
signed or initialled on behalf of the Fund by one or more person or persons as
the Board of Trustees or Directors of the Fund shall have from time to time
authorized, provided, however, that no such instructions directing the delivery
of securities or the payment of funds to an authorized signatory of the Fund
shall be signed by such person. Those persons authorized to give proper
instructions may be identified by the Board of Trustees or Directors by name,
title or position and will include at least one officer empowered by the Board
to name other individuals who are authorized to give proper instructions on
behalf of the Fund. Telephonic or other oral instructions or instructions given
by facsimile transmission may be given by any one of the above persons and will
be considered proper instructions if the Custodian reasonably believes them to
have been given by a person authorized to give
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<PAGE>
such instructions with respect to the transaction involved. Oral instructions
will be confirmed by tested telex or in writing in the manner set forth above
but the lack of such confirmation shall in no way affect any action taken by the
Custodian in reliance upon such oral instructions. The Fund authorizes the
Custodian to tape record any and all telephonic or other oral instructions given
to the Custodian by or on behalf of the Fund (including any of its officers,
Directors, Trustees, employees or agents or any investment manager or adviser or
person or entity with similar reponsibilities which is authorized to give proper
instructions on behalf of the Fund to the Custodian). Proper instructions may
relate to specific transactions or to types or classes of transactions, and may
be in the form of standing instructions.
Proper instructions may include communications effected directly between
electro-mechanical or electronic devices or systems, in addition to tested
telex, provided that the Fund and the Custodian agree to the use of such device
or system.
2.28 Segregated Account - The Custodian shall upon receipt of proper
instructions establish and maintain on its books a segregated account or
accounts for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities of the Fund, including securities maintained
by the Custodian pursuant to Section 2.22 hereof, (i) in accordance with the
provisions of any agreement among the Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of
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1934 and a member of the National Association of Securities Dealers, Inc. (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 any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Fund, (ii) for purposes of segregating cash or securities in
connection with options purchased, sold or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the Fund, (iii) for
the purposes of compliance by the Fund 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) as mutually
agreed from time to time between the Fund and the Custodian.
3. Powers and Duties of the Custodian with Respect to the Appointment of
Subcustodians: The Fund hereby authorizes and instructs the Custodian to hold
securities, funds and other property of the Fund which are maintained outside
the United States at subcustodians appointed pursuant to the provisions of this
Section 3 (a "Subcustodian"). The Fund shall approve in writing (1) the
appointment of each Subcustodian and the subcustodian agreement to be entered
into between such Subcustodian and the Custodian, and (2) if the Subcustodian is
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organized under the laws of a country other than the United States, the country
or countries in which the Subcustodian is authorized to hold securities, cash
and other property of the Fund. The Fund hereby further authorizes and instructs
the Custodian and any Subcustodian to utilize such securities depositories
located outside the United States which are approved in writing by the Fund to
hold securities, cash and other property of the Fund (a "Foreign Depository").
Upon such approval by the Fund, the Custodian is authorized on behalf of the
Fund to notify each Subcustodian of its appointment as such.
Those Subcustodians, and the countries where and the Foreign Depositories
through which they or the Custodian may hold securities, cash and other property
of the Fund which the Fund has approved to date are set forth on Appendix A
hereto. Such Appendix shall be amended from time to time as Subcustodians,
and/or countries and/or Foreign Depositories are changed, added or deleted. The
Fund shall be responsible for informing the Custodian sufficiently in advance of
a proposed investment which is to be held in a country not listed on Appendix A,
in order that there shall be sufficient time for the Fund to give the approval
required by the preceding paragraph and for the Custodian to put the appropriate
arrangements in place with such Subcustodian, including negotiation of a
subcustodian agreement and submission of such subcustodian agreement to the Fund
for approval.
If the Fund shall have invested in a security to be held in
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a country before the foregoing procedures have been completed, such security
shall be held by such agent as the Custodian may appoint. In any event, the
Custodian shall be liable to the Fund for the actions of such agent if and only
to the extent the Custodian shall have recovered from such agent for any damages
caused the Fund by such agent. At the request of the Fund, Custodian agrees to
remove any securities held on behalf of the Fund by such agent, if practical, to
an approved Subcustodian. Under such circumstances the Custodian will collect
income and respond to corporate actions on a best efforts basis.
With respect to securities and funds held by a Subcustodian, either
directly or indirectly (including by a Foreign Depository or foreign clearing
agency) or by a Foreign Depository or foreign clearing agency utilized by the
Custodian, notwithstanding any provision of this Agreement to the contrary,
payment for securities purchased and delivery of securities sold may be made
prior to receipt of the securities or payment, respectively, and securities or
payment may be received in a form, in accordance with governmental regulations,
rules of Foreign Depositories and foreign clearing agencies, or generally
accepted trade practice in the applicable local market.
With respect to the securities and funds held by a Subcustodian, either
directly or indirectly (including by a Foreign Depository or a foreign clearing
agency), including demand and interest bearing deposits, currencies or other
deposits and foreign exchange contracts as referred to in
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Sections 2.12, 2.13, 2.14 and 2.15, the Custodian shall be liable to the Fund if
and only to the extent that such Subcustodian is liable to the Custodian and the
Custodian recovers under the applicable Subcustodian agreement. The Custodian
shall nevertheless be liable to the Fund for its own negligence in transmitting
to any such Subcustodian any instructions received by it from the Fund and for
its own negligence in connection with the delivery of any securities or funds
held by it to any such Subcustodian.
In the event that any Subcustodian appointed pursuant to the provisions of
this Section 3 fails to perform any of its obligations under the terms and
conditions of the applicable subcustodian agreement, the Custodian shall use its
best efforts to cause such Subcustodian to perform such obligations. In the
event that the Custodian is unable to cause such Subcustodian to perform fully
its obligations thereunder, the Custodian shall forthwith upon the Fund's
request terminate such Subcustodian in accordance with the termination
provisions under the applicable subcustodian agreement and, if necessary or
desirable, appoint another Subcustodian in accordance with the provisions of
this Section 3. At the election of the Fund, it shall have the right to enforce,
to the extent permitted by the subcustodian agreement and applicable law, the
Custodian's rights against any such Subcustodian for loss or damage caused the
Fund by such Subcustodian.
The Custodian will not amend any subcustodian agreement or
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<PAGE>
agree to change or permit any changes thereunder except upon the prior written
approval of the Fund.
The Custodian may, at any time in its discretion upon notification to the
Fund, terminate any Subcustodian of the Fund in accordance with the termination
provisions under the applicable Subcustodian Agreement, and at the written
request of the Fund, the Custodian will terminate any Subcustodian in accordance
with the termination provisions under the applicable Subcustodian Agreement.
If necessary or desirable, the Custodian may appoint another subcustodian
to replace a Subcustodian terminated pursuant to the foregoing provisions of
this Section 3, such appointment to be made upon approval of the successor
Subcustodian by the Fund's Board of Directors or Trustees in accordance with the
provisions of this Section 3.
In the event the Custodian receives a claim from a Subcustodian under the
indemnification provisions of any subcustodian agreement, the Custodian shall
promptly give written notice to the Fund of such claim. No more than thirty days
after written notice to the Fund of the Custodian's intention to make such
payment, the Fund will reimburse the Custodian the amount of such payment except
in respect of any negligence or misconduct of the Custodian.
4. Assistance by the Custodian as to Certain Matters: The Custodian may
assist generally in the preparation of reports to Fund shareholders and others,
audits of accounts, and other ministerial matters of like nature.
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5. Powers and Duties of the Custodian with Respect to its Role as
Recordkeepinq Agent: The Custodian shall have and perform the following duties
with respect to recordkeeping:
5.1 Records - To create, maintain and retain such records relating to its
activities and obligations under this Agreement as are required under the
Investment Company Act of 1940 and the rules and regulations thereunder
(including Section 31 thereof and Rules 31a-1 and 31a-2 thereunder) and under
applicable Federal and State tax laws. All such records will be the property of
the Fund and in the event of termination of this Agreement shall be delivered to
the successor custodian.
5.2 Accounts - To keep books of account and render statements, including
interim monthly and complete quarterly financial statements, or copies thereof,
from time to time as reasonably requested by proper instructions.
5.3 Access to Records - The books and records maintained by the Custodian
pursuant to Sections 5.1 and 5.2 shall at all times during the Custodian's
regular business hours be open to inspection and audit by officers of, attorneys
for and auditors employed by the Fund and by employees and agents of the
Securities and Exchange Commission, provided that all such individuals shall
observe all security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian and such
regulations as may be reasonably imposed by the Custodian.
6. Standard of Care and Related Matters:
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6.1 Liability of the Custodian with Respect to Proper Instructions;
Evidence of Authority, Etc. The Custodian shall not be liable for any action
taken or omitted in reliance upon proper instructions believed by it to be
genuine or upon any other written notice, request, direction, instruction,
certificate or other instrument believed by it to be genuine and signed by the
proper party or parties.
The Secretary or Assistant Secretary of the Fund shall certify to the
Custodian the names, signatures and scope of authority of all persons authorized
to give proper instructions or any other such notice, request, direction,
instruction, certificate or instrument on behalf of the Fund, the names and
signatures of the officers of the Fund, the name and address of the Shareholder
Servicing Agent, and any resolutions, votes, instructions or directions of the
Fund's Board of Directors or Trustees or shareholders. Such certificate may be
accepted and relied upon by the Custodian as conclusive evidence of the facts
set forth therein and may be considered in full force and effect until receipt
of a similar certificate to the contrary.
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 Agreement.
The Custodian shall be entitled to receive and act upon advice of (i)
counsel regularly retained by the Custodian in
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respect of Custodian matters, or (ii) at the expense of the Fund, and upon the
Fund's approval, (x) counsel for the Fund, or (y) such other counsel as the Fund
and the Custodian may agree upon, with respect to all matters, and the Custodian
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
6.2 Liability of the Custodian with Respect to Use of Securities Systems
and Foreign Depositories - With respect to the portfolio securities, cash and
other property of the Fund held by a Securities System or by a Foreign
Depository utilized by the Custodian or any Subcustodian, the Custodian shall be
liable to the Fund only for any loss or damage to the Fund resulting from use of
the Securities System or Foreign Depository if caused by any negligence,
misfeasance or misconduct of the Custodian or any of its Agents (as said term is
defined in Section 6.6) or of any of its or its Agents' employees or from any
failure of the Custodian or any such Agent to enforce effectively such rights as
it may have against the Securities System or Foreign Depository. 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 Securities System, Foreign
Depository or any other person which the Custodian may have as a consequence of
any such loss or damage to the Fund if and to the extent that the Fund has not
been made whole for any such loss or damage.
6.3 Standard of Care; Liability; Indemnification - The Custodian shall be
held only to the exercise of reasonable care
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<PAGE>
and diligence in carrying out the provisions of this Agreement, provided that
the Custodian shall not thereby be required to take any action which is in
contravention of any applicable law, rule or regulation or any order or judgment
of any court of competent jurisdiction.
The Fund agrees to indemnify and hold harmless the Custodian and its
nominees from all claims and liabilities (including counsel fees) incurred or
assessed against it or its nominees in connection with the performance of this
Agreement, except such as may arise from its or its nominee's breach of the
relevant standard of conduct set forth in this Agreement. Without limiting the
foregoing indemnification obligation of the Fund, the Fund agrees to indemnify
the Custodian and any nominee in whose name portfolio securities or other
property of the Fund is registered against any liability the Custodian or such
nominee may incur by reason of taxes assessed to the Custodian or such nominee
or other costs, liability or expense incurred by the Custodian or such nominee
resulting directly or indirectly from the fact that portfolio securities or
other property of the Fund is registered in the name of the Custodian or such
nominee.
In no event shall the Custodian incur liability under this Agreement if the
Custodian or any Subcustodian, Securities System, Foreign Depository, Banking
Institution or any agent or entity utilized by any of them is prevented,
forbidden or delayed from performing, or omits to perform, any act or thing
which this Ageement provides shall be performed or omitted to be performed,
- 32 -
<PAGE>
by reason of (i) any Sovereign Risk or (ii) any provision of any present or
future law or regulation or order of the United States of America or any state
thereof, or of any foreign country or political subdivision thereof, or of any
securities depository or clearing agency which operates a central system for
handling of securities or equivalent book-entries in a country or which operates
a transnational system for the central handling of securities or equivalent
book-entries, or (iii) any provision of any order or judgment of any court of
competent jurisdiction. A "Sovereign Risk" shall mean nationalization,
expropriation, devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de facto or de
jure; or enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange controls, taxes,
levies or other charges affecting the Fund's property; or acts of war,
terrorism, insurrection or revolution; or any other act or event beyond the
Custodian's control.
6.4 Reimbursement of Disbursements, Etc. - The Custodian shall be entitled
to receive reimbursement from the Fund on demand, in the manner provided in
Section 7, for its cash disbursements, expenses and charges (including the fees
and expenses of any Subcustodian or any Agent) in connection with this
Agreement, but excluding salaries and usual overhead expenses.
6.5 Security for Obligations to Custodian - If the
- 33 -
<PAGE>
Custodian or any nominee thereof shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Agreement (collectively a "Liability"), except such as may arise from
its or such nominee's breach of the relevant standard of conduct set forth in
this Agreement, or if the Custodian shall make any Advance to the Fund, then in
such event any property at any time held for the account of the Fund by the
Custodian or a Subcustodian shall be security for such Liability or for such
Advance and the interest thereon, and if the Fund shall fail to pay such Advance
or interest when due or shall fail to reimburse or indemnify the Custodian
promptly in respect of a Liability, the Custodian shall be entitled to utilize
available cash and to dispose of the Fund's property, including securities, to
the extent necessary to obtain repayment, reimbursement or indemnification.
6.6 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
as its agent (an "Agent") to carry out such of the provisions of this Agreement
as the Custodian may from time to time direct, provided, however, that the
appointment of such Agent (other than an Agent appointed pursuant to the third
paragraph of Section 3) shall not relieve the Custodian of any of its
responsibilities under this Agreement.
6.7 Powers of Attorney - Upon request, the Fund shall deliver to the
Custodian such proxies, powers of attorney or
- 34 -
<PAGE>
other instruments as may be reasonable and necessary or desirable in connection
with the performance by the Custodian or any Subcustodian of their respective
obligations under this Agreement or any applicable subcustodian agreement.
7. Compensation of the Custodian: The Fund shall pay the Custodian a
custody fee based on such fee schedule as may from time to time be agreed upon
in writing by the Custodian and the Fund. Such fee, together with all amounts
for which the Custodian is to be reimbursed in accordance with Section 6.4,
shall be billed to the Fund and be paid in cash to the Custodian.
8. Termination; Successor Custodian: This Agreement shall continue in full
force and effect until 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 seventy five (75) days after the date of such
delivery or mailing. In the event of termination the Custodian shall be entitled
to receive prior to delivery of the securities, funds and other property held by
it all accrued fees and unreimbursed expenses the payment of which is
contemplated by Sections 6.4 and 7, and all Advances and Liabilities, upon
receipt by the Fund of a statement setting forth such fees, expenses, Advances
and Liabilities.
In the event of the appointment of a successor custodian, it is agreed that
the funds and securities owned by the Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate
- 35 -
<PAGE>
with the Fund in execution of documents and performance of other actions
necessary or desirable in order to substitute the successor custodian for the
Custodian under this Agreement.
9. Amendment: This Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof. No
provision of this Agreement may be amended or terminated except by a statement
in writing signed by the party against which enforcement of the amendment or
termination is sought.
In connection with the operation of this Agreement, the Custodian and the
Fund may agree in writing from time to time on such provisions interpretative of
or in addition to the provisions of this Agreement as may in their joint opinion
be consistent with the general tenor of this Agreement. No interpretative or
additional provisions made as provided in the preceding sentence shall be deemed
to be an amendment of this Agreement.
The section headings in this Agreement are for the convenience of the
parties and in no way alter, amend, limit or restrict the contractual
obligations of the parties set forth in this Agreement.
10. Governing Law: This Agreement is executed and delivered in The
Commonwealth of Massachusetts and shall be governed by and construed according
to the laws of said Commonwealth.
11. Notices: Notices and other writings delivered or
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<PAGE>
mailed postage prepaid to the Fund addressed to the Fund at
__________________ or to such other address as the Fund may have designated to
the Custodian in writing, or to the Custodian at 40 Water Street, Boston,
Massachusetts 02109, Attention: Manager, Securities Department, or to such other
address as the Custodian may have designated to the Fund in writing, shall be
deemed to have been properly delivered or given hereunder to the respective
addressee.
12. Binding Effect: This Agreement shall be binding on and shall inure to
the benefit of the Fund and the Custodian and their respective successors and
assigns, provided that neither party hereto may assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the
other party.
13. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties.
14. Miscellaneous: It is expressly agreed that the obligations of the Fund
hereunder, shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Trust personally, but bind only
the Trust property as provided in the Declaration of Trust on file with the
Secretary of the Commonwealth of Massachusetts.
- 37 -
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
PHOENIX WORLDWIDE BROWN BROTHERS HARRIMAN & CO.
OPPORTUNITIES FUND
By /s/ Philip R. McLoughlin
----------------------------- per pro /s/ R.A. Hill
Philip R. McLoughlin ------------------------
R.A. Hill
Exhibit 9.1
Transfer Agency and Service Agreement
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
between
PHOENIX FUNDS
and
PHOENIX EQUITY PLANNING CORPORATION
<PAGE>
Table of Contents
-----------------
Page
----
Article 1 - Terms of Appointment; Duties of Transfer Agent.................1
Article 2 - Fees and Expenses..............................................3
Article 3 - Representations and Warranties of Transfer Agent...............3
Article 4 - Representations and Warranties of the Phoenix Funds............3
Article 5 - Data Access and Proprietary Information........................4
Article 6 - Indemnification................................................5
Article 7 - Standard of Care...............................................6
Article 8 - Covenants......................................................6
Article 9 - Termination....................................................7
Article 10 - Assignment.....................................................7
Article 11 - Amendment......................................................7
Article 12 - Connecticut Law to Apply.......................................7
Article 13 - Force Majeure..................................................7
Article 14 - Consequential Damages..........................................8
Article 15 - Merger of Agreement............................................8
Article 16 - Limitations of Liability of the Trustees
and Shareholders...............................................8
Article 17 - Counterparts...................................................8
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
-------------------------------------
AGREEMENT made as of the 1st day of June, 1994, by and between the
undersigned entities (hereinafter singularly referred to as a "Fund" and
collectively referred to as the "Phoenix Funds"), and PHOENIX EQUITY PLANNING
CORPORATION (hereinafter referred to as the "Transfer Agent").
WITNESSETH:
WHEREAS, the Phoenix Funds desire to appoint Transfer Agent as their
transfer agent, dividend disbursing agent and agent in connection with certain
other activities, and Transfer Agent desires to accept such appointment; and
WHEREAS, the parties wish to set forth herein their mutual understandings
and agreements.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and other good and valuable consideration, the receipt and sufficiency whereof
being hereby acknowledged and affirmed, the parties hereto agree as follows:
Article 1 Terms of Appointment; Duties of Transfer Agent
----------------------------------------------
1.01 Subject to the terms and conditions set forth in this Agreement, the
Phoenix Funds hereby employ and appoint Transfer Agent to act as, and Transfer
Agent agrees to act as, transfer agent for the authorized and issued shares of
beneficial interest or common stock, as the case may be, of each of the Phoenix
Funds (hereinafter collectively and singularly referred to as "Shares"),
dividend disbursing agent and agent in connection with any accumulation,
open-account or similar plans provided to the shareholders of the Phoenix Funds
("Shareholders") and as set out in the currently effective registration
statement of each Fund (the prospectus and statement of additional information
portions of such registration statement being referred to as the "Prospectus"),
including, without limitation, any periodic investment plan or periodic
withdrawal program.
1.02 Transfer Agent agrees that it will perform the following services
pursuant to this Agreement:
(a) In accordance with procedures established from time to time by
agreement between the Phoenix Funds and Transfer Agent, Transfer Agent shall:
i) Receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation therefor
to the Custodian appointed from time to time by the
Trustees/Directors of each Fund (which entity or entities, as the
case may be, shall be referred to as the "Custodian");
ii) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the each appropriate Shareholder
account;
iii) Receive for acceptance, redemption requests and redemption
directions and deliver the appropriate documentation therefor to
the Custodian;
iv) In respect to the transactions in items (i), (ii) and (iii)
above, the Transfer Agent shall execute transactions directly
with broker-dealers authorized by the Phoenix Funds who shall
thereby be deemed to be acting on behalf of the Phoenix Funds;
<PAGE>
v) At the appropriate time as and when it receives monies paid to it
by any Custodian with respect to any redemption, pay over or
cause to be paid over in the appropriate manner such monies as
instructed by the redeeming Shareholders;
vi) Effect transfers of Shares by the registered owners thereof upon
receipt of appropriate instructions;
vii) Prepare and transmit payments for dividends and distributions
declared by each Fund, if any;
viii) Issue replacement certificates for those certificates alleged to
have been lost, stolen or destroyed upon receipt by the Transfer
Agent of indemnification satisfactory to the Transfer Agent and
the Phoenix Funds, and the Transfer Agent at its option, may
issue replacement certificates in place of mutilated stock
certificates upon presentation thereof and without such
indemnity;
ix) Maintain records of account for and advise each Fund and its
respective Shareholders as to the foregoing; and
x) Record the issuance of Shares and maintain pursuant to Rule
17Ad-10(e) under the Exchange Act of 1934, a record of the total
number of Shares which are authorized, issued and outstanding
based upon data provided to it by each Fund. The Transfer Agent
shall also provide on a regular basis to each Fund the total
number of Shares which are authorized, issued and outstanding
shall have no obligation, when recording the issuance of Shares,
to monitor the issuance of such Shares or to take cognizance of
any laws relating to the issue or sale of such Shares, which
functions shall be the sole responsibility of each respective
Fund.
(b) In addition to and not in lieu of the services set forth in the above
paragraph (a), Transfer Agent shall: (i) perform all of the customary services
of a transfer agent, dividend disbursing agent and, as relevant, agent in
connection with accumulation, open-account or similar plans (including without
limitation any periodic investment plan or periodic withdrawal program),
including, but not limited to, maintaining all Shareholder accounts, preparing
Shareholder meeting lists, mailing proxies, receiving and tabulating proxies,
mailing Shareholder reports and Prospectuses to current Shareholders,
withholding taxes on U.S. resident and non-resident alien accounts, preparing
and filing U.S. Treasury Department Forms 1099 and other appropriate forms
required with respect to dividends and distributions by federal authorities for
all Shareholders, preparing and mailing confirmation forms and statements of
account to Shareholders for all purchases and redemptions of Shares and other
confirmable transactions in Shareholder accounts, preparing and mailing activity
statements for Shareholders, and providing Shareholder account information; and
(ii) provide a system which will enable each Fund to monitor the total number of
Shares sold in each State.
(c) In addition, the Phoenix Funds shall (i) identify to Transfer Agent in
writing those transactions and assets to be treated as exempt from blue sky
reporting for each State, and (ii) verify the establishment of transactions for
each State on the system prior to activation and thereafter monitor the daily
activity for each State. The responsibility of Transfer Agent for a Fund's blue
sky State registration status is solely limited to the initial establishment of
transactions subject to blue sky compliance by the Phoenix Funds and the
reporting of such transactions to each Fund as provided above.
(d) Procedures as to who shall provide certain of the services in Article 1
may be established from time to time by agreement between the Phoenix Funds and
Transfer Agent per the attached service responsibility schedule, if any. The
Transfer Agent may at times perform only a portion of these services and the
Phoenix Funds or its agent may perform these services on behalf of any Fund.
- 2 -
<PAGE>
(e) The Transfer Agent shall provide additional services on behalf of the
Phoenix Funds (i.e., escheatment services) which may be agreed upon in writing
between the Phoenix Funds and the Transfer Agent.
Article 2 Fees and Expenses
-----------------
2.01 In consideration of the services provided by the Transfer Agent
pursuant to this Agreement, each Fund agrees to pay Transfer Agent an annual
maintenance fee for each Shareholder account as set forth in Schedule A attached
hereto and made a part hereof. Annual Maintenance Fees and out-of-pocket
expenses and advances identified under Section 2.02 below may be changed from
time to time subject to mutual written agreement between each Fund and Transfer
Agent. Nothing herein shall preclude the assignment of all or any portion of the
foregoing fees and expense reimbursements to any sub-agent contracted by
Transfer Agent.
2.02 In addition to the fee paid under Section 2.01 above, the Phoenix
Funds agree to reimburse Transfer Agent for out-of-pocket expenses or advances
incurred by Transfer Agent for the items set out in Schedule A attached hereto.
In addition, any other expenses incurred by Transfer Agent at the request or
with the consent of any Fund, will be reimbursed by the Fund requesting the
same.
2.03 The Phoenix Funds agree to pay all fees and reimbursable expenses
within five days following the mailing of the respective billing notice. The
above fees will be charged against each Fund's custodian checking account five
(5) days after the invoice is transmitted to the Phoenix Funds. Postage for
mailing of dividends, proxies, Fund reports and other mailings to all
Shareholder accounts shall be advanced to Transfer Agent at least seven (7) days
prior to the mailing date of such materials.
Article 3 Representations and Warranties of Transfer Agent
------------------------------------------------
The Transfer Agent represents and warrants to the Phoenix Funds that:
3.01 It is a corporation organized and existing and in good standing under
the laws of the State of Connecticut.
3.02 It is empowered under applicable laws and by its charter and by-laws
to enter into and perform this Agreement.
3.03 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.04 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
3.05 It is and shall continue to be a duly registered transfer agent
pursuant to Section 17A(c)(2) of the Securities Exchange Act of 1934.
Article 4 Representations and Warranties of Phoenix Funds
-----------------------------------------------
The Phoenix Funds represent and warrant to Transfer Agent that:
4.01 All corporate or trust proceedings, as the case may be, required to
enter into and perform this Agreement have been undertaken and are in full force
and effect.
4.02 Each Fund is an open-end, diversified management investment companies
registered under the Investment Company Act of 1940.
- 3 -
<PAGE>
4.03 A registration statement under the Securities Act of 1933 is currently
effective for each Fund that is offering its securities for sale and such
registration statement will remain effective, and appropriate state securities
law filings have been made and will continue to be made, with respect to all
Shares being offered for sale.
Article 5 Data Access and Proprietary Information
---------------------------------------
5.02 The Phoenix Funds acknowledge that the data bases, computer programs,
screen formats, report formats, interactive design techniques, and documentation
manuals furnished to the Phoenix Funds by the Transfer Agent as part of each
Fund's ability to access certain Fund-related data ("Customer Data") maintained
by the Transfer Agent on data bases under the control and ownership of the
Transfer Agent or other third party ("Data Access Services") constitute
copyrighted, trade secret, or other proprietary information (collectively,
"Proprietary Information") of substantial value to the Transfer Agent or other
third party. In no event shall Proprietary Information be deemed Customer Data.
The Phoenix Funds agree to treat all Proprietary Information as proprietary to
the Transfer Agent and further agree that it shall not divulge any Proprietary
Information to any person or organization except as may be provided hereunder.
Without limiting the foregoing, the Phoenix Funds agree for itself and its
employees and agents:
(a) to access Customer Data solely from location as may be designated in
writing by the Transfer Agent and solely in accordance with the
Transfer Agent's applicable user documentation;
(b) to refrain from copying or duplicating in any way the Proprietary
Information;
(c) to refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such access is inadvertently obtained,
to inform in a timely manner of such fact and dispose of such
information in accordance with the Transfer Agent's instructions;
(d) to refrain from causing or allowing third-party data acquired
hereunder from being retransmitted to any other computer facility or
other location, except with the prior written consent of the Transfer
Agent;
(e) that the Phoenix Funds shall have access only to those authorized
transactions agreed upon by the parties; and
(f) to honor all reasonable written requests made by the Transfer Agent to
protect at the Transfer Agent's expense the rights of the Transfer
Agent in Propriety Information at common law, under federal copyright
law and under other federal or state law.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Article 5. The obligations of this Article shall
survive any earlier termination of this Agreement.
5.02 If the Phoenix Funds notified the Transfer Agent that any of the Data
Access Services do not operate in material compliance with the most recently
issued user documentation for such services, the Transfer Agent shall endeavor
in a timely manner to correct such failure. Organizations from which the
Transfer Agent may obtain certain data included in the Data Access Services are
solely responsible for the contents of such data and the Phoenix Funds agree to
make no claim against the Transfer Agent arising out of the contents of such
third-party data, including, but not limited to, the accuracy thereof. DATA
ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN
CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS. THE TRANSFER
AGENT EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
- 4 -
<PAGE>
5.03 If the transactions available to the Phoenix Funds include the ability
to originate electronic instructions to the Transfer Agent in order to (i)
effect the transfer or movement of cash or Shares or (ii) transmit Shareholder
information or other information (such transactions constituting a "COEFI"),
then in such event the Transfer Agent shall be entitled to rely on the validity
and authenticity of such instruction without undertaking any further inquiry as
long as such instruction is undertaken in conformity with security procedures
established by the Transfer Agent from time to time.
Article 6 Indemnification
---------------
6.01 The Transfer Agent shall not be responsible for, and the Phoenix Funds
shall indemnify and hold Transfer Agent harmless from and against, any and all
losses, damages, costs, charges, counsel fees, payments, expenses and liability
arising out of or attributable to:
(a) All actions of Transfer Agent or its agent or subcontractors required
to be taken pursuant to this Agreement, provided that such actions are
taken in good faith and without negligence or willful misconduct.
(b) The lack of good faith, negligence or willful misconduct by the
Phoenix Funds which arise out of the breach of any representation or
warranty of the Phoenix Funds hereunder.
(c) The reliance on or use by the Transfer Agent or its agents or
subcontractors of information, records and documents which (i) are
received by Transfer Agent or its agents or subcontractors, and (ii)
have been prepared, maintained or performed by the Phoenix Funds or
any other person or firm on behalf of the Phoenix Funds including but
not limited to any previous transfer agent or registrar.
(d) The reliance on, or the carrying out by Transfer Agent or its agents
or subcontractors of any instructions or requests of the Phoenix
Funds.
(e) The offer or sale of Shares in violation of any requirement under the
federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state
or in violation of any stop order or other determination or ruling by
any federal agency or any state with respect to the offer or sale of
such Shares in such state.
6.02 Transfer Agent shall indemnify and hold each of the Phoenix Funds
harmless from and against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liability arising out of or attributable to any
action or failure or omission to act by Transfer Agent, or any sub-agent, as a
result of Transfer Agent's, or such sub-agent's, lack of good faith, negligence
or willful misconduct.
6 .03 At any time the Transfer Agent may apply to any officer of the
Phoenix Funds for instructions, and may consult with legal counsel with respect
to any matter arising in connection with the services to be performed by
Transfer Agent under this Agreement, and Transfer Agent and its agents or
subcontractors shall not be liable and shall be indemnified by the Phoenix Funds
for any action taken or omitted by it in reliance upon such instructions or upon
the opinion of such counsel. The Transfer Agent, its agents and subcontractors
shall be protected and indemnified in acting upon any paper or document
furnished by or on behalf of the Phoenix Funds, reasonably believed to be
genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided Transfer Agent or
its agents or subcontrators by machine readable input, telex, CRT data entry or
other similar means authorized by the Phoenix Funds, and shall not be held to
have notice of any change of authority of any person, until receipt of written
notice thereof from the Phoenix Funds. Transfer Agent, its agents and
subcontractors shall also be protected and indemnified in recognizing stock
certificates which are reasonably
- 5 -
<PAGE>
believed to bear the proper manual or facsimile signatures of the officers of
any Fund, and the proper countersignature of any former transfer agent or
registrar, or of a co-transfer agent or co-registrar.
6.04 In order that the indemnification provisions contained in this Article
6 shall apply, upon the assertion of a claim for which either party may be
required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
6.05 Transfer Agent hereby expressly acknowledges that recourse against any
of the Phoenix Funds, if any, shall be subject to those limitations provided by
governing law and the Declaration of Trust of the Phoenix Funds, as applicable,
and agrees that obligations assumed by the Phoenix Funds hereunder shall be
limited in all cases to the Phoenix Funds and their respective assets. Transfer
Agent shall not seek satisfaction of any such obligation from the shareholders
or any shareholder of the Phoenix Funds, nor shall the Transfer Agent seek
satisfaction of any obligations from the Trustees/Directors or any individual
Trustee/Director of the Phoenix Funds.
Article 7 Standard of Care
----------------
7 .01 The Transfer Agent shall at all times act in good faith and agrees to
use its best efforts within reasonable limits to insure the accuracy of all
services performed under this Agreement, but assumes no responsibility and shall
not be liable for loss or damage due to errors unless said errors are caused by
its negligence, bad faith, or willful misconduct of that of its employees.
Article 8 Covenants
---------
8.01 The Phoenix Funds shall promptly furnish to Transfer Agent the
following:
(a) A certified copy of the resolution of its Trustees/Directors
authorizing the appointment of Transfer Agent and the execution and
delivery of this Agreement.
(b) A copy of the Declaration of Trust or Articles of Incorporation, as
the case may be, and ByLaws, if any, and all amendments thereto of
each Fund.
8.02 The Transfer Agent hereby agrees to establish and maintain facilities
and procedures reasonably acceptable to the Phoenix Funds for safekeeping of
stock certificates, check forms and facsimile signature imprinting devices, if
any; and for the preparation or use, and for keeping account of, such
certificates, forms and devices.
8.03 The Transfer Agent shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Company Act of 1940, as amended,
and the Rules thereunder, Transfer Agent agrees that all such records prepared
or maintained by Transfer Agent relating to the services to be performed by
Transfer Agent hereunder are the property of each respective Fund and will be
preserved, maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to each respective Fund on and in
accordance with its request.
8.04 The parties agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or received
pursuant to the negotiation or the carrying out of this
- 6 -
<PAGE>
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law.
8.05 In case of any requests or demands for the inspection of the
Shareholder records, Transfer Agent will endeavor to notify the affected Fund
and to secure instructions from an authorized officer of such Fund as to such
inspection. Transfer Agent reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel that it
may be held liable for the failure to exhibit the Shareholder records to such
person.
Article 9 Termination
-----------
9.01 This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other. The parties mutually acknowledge
that the termination of this Agreement by one, but not each Fund shall not
effect a termination of this Agreement as to any and all other Phoenix Fund(s)
which have not terminated the Agreement.
9.02 Should any Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the terminating Fund. Additionally, Transfer Agent reserves the right to charge
any other reasonable expenses associated with such termination and/or a charge
equivalent to the average of three (3) months' fees to the terminating Fund.
Article 10 Assignment
----------
10.01 Except as provided in Section 10.03 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party without the
written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
10.03 The Transfer Agent may, without further consent on the part of any of
the Phoenix Funds, subcontract for the performance hereof with one or more
sub-agents; provided, however, that Transfer Agent shall be as fully responsible
to each Fund for the acts and omissions of any subcontractor as it is for its
own acts and omissions.
Article 11 Amendment
---------
11.01 This Agreement may be amended or modified by a written agreement
executed by the parties and authorized or approved by a resolution of the
Trustees/Directors of each respective Fund.
Article 12 Connecticut Law to Apply
------------------------
12.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Connecticut.
Article 13 Force Majeure
-------------
13.01 In the event either party is unable to perform its obligations under
the terms of this Agreement because of the acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
- 7 -
<PAGE>
Article 14 Consequential Damages
---------------------
14.01 Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any act
or failure to act hereunder.
Article 15 Merger of Agreement
-------------------
15.01 This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof whether oral or written.
15.02 This Agreement shall not be merged with or construed in conjunction
with any other current or future agreement between the Phoenix Funds (including
any Fund) and Phoenix Equity Planning Corporation, each and all of which
agreements shall at all times remain separate and distinct.
Article 16 Limitations of Liability of the Trustees and Shareholders
---------------------------------------------------------
16.01 For the Funds which that are formed as Massachusetts business trusts,
notice is hereby given that the Agreement and Declaration of such Trusts are on
file with the Secretary of the Commonwealth of Massachusetts and was executed on
behalf of the Trustees of such Trusts as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees or
Shareholders individually but are binding only upon the assets and property of
each Fund.
Article 17 Counterparts
------------
17.01 This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
- 8 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
Phoenix Asset Reserve
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Equity Opportunities Fund
Phoenix Income and Growth Fund
Phoenix Multi-Portfolio Fund
Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Series Fund
Phoenix Total Return Fund, Inc.
Phoenix Worldwide Opportunities Fund
By: /s/ Philip R. McLoughlin
---------------------------------
Name: Philip R. McLoughlin
Title: President
ATTEST:
By: /s/ Richard Wirth
--------------------------
Name: Richard Wirth
Title: Assistant Secretary
PHOENIX EQUITY PLANNING CORPORATION
By: /s/ Martin J. Gavin
---------------------------------
Executive Vice President
ATTEST:
By: /s/ Patricia O. McLaughlin
--------------------------
Name: Patricia O. McLaughlin
Title: Assistant Secretary
- 9 -
<PAGE>
Schedule A
----------
Fee Schedule
Annual Maintenance Fees shall be based on the following formula:
AMF(Fund) = BAMF x SA
where, AMFFund refers to the aggregate Annual Maintenance Fee levied
against each respective Fund,
BAMF refers to the Base Annual Maintenance Fee levied against each
respective Fund for each shareholder account, as more particularly
described below, at the basic annual per account rate of $19.25 for
daily dividend accounts and $14.95 for non-daily dividend accounts,
and
SA refers to the number of Shareholder Accounts subject to the terms
of this Agreement and any and all sub-transfer agent agreements which
presently or hereafter may be entered into by the Transfer Agent. For
the purpose of computing the foregoing, the Transfer Agent will
ascertain the number of Shareholders of each Fund regardless of
whether any such Shares are held in accordance with any pooled or
omnibus accounts or arrangement managed or controlled by any entity,
broker/dealer or sub-transfer agent.
Other Fees
- ----------
o Omnibus Accounts, Per Transaction $2.50
o Closed Accounts, per Account, per month $0.20
o Check writing Fees:
Privilege set-up $5.00
Per Cleared Check $1.00
Out-of-Pocket Expenses
- ----------------------
Out-of-pocket expenses include, but are not limited to: confirmation production,
postage, forms, telephone, microfilm, microfiche, stationary and supplies billed
as .1122% of postage costs and expenses incurred at the specific direction of
any Fund. Postage for mass mailings is due seven days in advance of the mailing
date.
Exhibit 9.2
Form of Sales Agreement
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION
100 Bright Meadow Boulevard
Enfield, Connecticut 06082-1989
800-243-4361
(203) 253-1000
PHOENIX FAMILY OF FUNDS
SALES AGREEMENT
To: Phoenix Equity Planning Corporation From:
100 Bright Meadow Boulevard
Enfield, Connecticut 06082
Sir/Madam:
We desire to enter into an Agreement with you for the sale and distribution of
shares of registered investment companies (which shall collectively be referred
to hereafter as the "Funds") for which you are national distributor or principal
underwriter and which may be listed in the Annex A hereto which such Annex may
be amended by you from time to time. Upon acceptance of this Agreement by you,
we understand that we may offer and sell shares of each of the Funds (hereafter
"Shares") subject, however, to all of the terms and conditions hereof including
your right to suspend or cease the sale of such shares.
1. We understand and agree that in all sales of Shares to the public we shall
be acting as dealer for our own account: that all purchase orders and
applications submitted to you by us are subject to acceptance or rejection
by you in your sole discretion: and that each purchase will be deemed to
have been consummated in your principal office subject to your acceptance
and effective only upon confirmation in us by you.
2. We agree that all purchases of Shares by us shall be made only for the
purpose of covering purchase orders already received from our customers
(who may be any person other than a securities dealer or broker) or for our
own bona fide investment.
3. We shall offer and sell shares purchased pursuant to this Agreement for the
purpose of covering purchase orders of our customers at the current public
offering price for such Shares ("Offering Price") as set forth in the
current prospectus of each of the funds.
4. We shall pay you for Shares purchased by us within five (5) business days
of the date of your confirmation to us of such purchase. The purchase price
shall be the Offering Price, less only the applicable dealer discount
("Dealer Discount"), if any, as set forth in Annex A hereto. We agree that
you have the right, without notice, to cancel any order for which payment
has not been received by you as provided in this paragraph, in which case
you may hold us responsible for any loss suffered by you resulting from our
failure to make payment as aforesaid.
5. We understand and agree that any Dealer Discount or fee is subject to
change from time to time. Any orders placed after the effective date of any
such Dealer Discount change shall be subject to the Dealer Discounts in
effect at the time such order is received by you.
6. We understand and agree that Shares purchased by us under this Agreement
will not be delivered until payment has been received by you. Delivery of
shares will be made by credit to a shareholder open account unless delivery
of certificates is specified in the purchase order. In order to avoid
unnecessary delay, it is understood that, at our request, any Shares resold
by us to one of our customers will be delivered (whether by credit to a
shareholder open account or by delivery of certificates) in the name of our
customer.
<PAGE>
7. We understand that on all purchases of Shares to which the terms of this
Agreement are applicable by a person for whom we are dealer of record, you
will pay us an amount equal to the Dealer Discount or fees which would have
been paid to us with respect to such Shares if such Shares had been
purchased through us. We understand and agree that the dealer of record for
this purpose shall be the dealer through whom such person most recently
purchased Shares of such fund. We understand that all amounts payable to us
under this paragraph and currently payable under this agreement will be
paid as of the end of each month unless specified otherwise for the total
amount of Shares to which this paragraph is applicable but may be paid more
frequently as you may determine in your discretion.
8. You appoint the transfer agent for each of the Funds as your agent to
execute the purchase transaction of Shares and to confirm such purchases to
our customers on our behalf, and we guarantee the legal capacity of our
customers so purchasing such shares. We further understand if a customer's
account is established without the customer signing the application form,
we represent that the instructions relating to the registration and
shareholder options selected (whether on the application form, in some
other document or orally) are in accordance with the customer's
instructions and we agree to indemnify the Funds, the transfer agent and
you for any loss or liability resulting from acting upon such instructions.
9. Upon the purchase of Shares pursuant to a Letter of Intent, we will
promptly return to you any excess of the Dealer Discount previously allowed
or paid to us over that allowable in respect to such larger purchase.
10. Unless at the time of transmitting a purchase order we advise you to the
contrary, you may consider that the investor owns no other Shares and may
further assume that the investor is not entitled to any lower sales charge
than that accorded to a single transaction in the amount of the purchase
order as set forth in Annex A hereto.
11. We understand and agree that if any Shares purchased by us under the terms
of this Agreement are, within seven (7) business days after the date of
your confirmation to us of the original purchase order for such shares,
repurchased by you as agent for such fund or are tendered to such fund for
redemption, we shall forfeit the right to, and shall pay over to you the
amount of, any Dealer Discount allowed to us with respect to such Shares.
It is understood that you will forthwith pay over such amount to such fund
and also shall pay over to such fund your share of the Sales Charge, if
any, on the original transaction. We understand that you will notify us of
such repurchase or redemption within ten (10) days of the date upon which
certificates are delivered to you or to such fund or the date upon which
the holder of Shares held in a shareholder open account places or causes to
be placed to you or with such fund an order to have such Shares repurchased
or redeemed.
12. We agree that, in the case of any repurchase of any Shares made more than
seven (7) business days after confirmation by you of any purchase of such
Shares, except in the case of Shares purchased by us from you for our own
bona fide investment, we will act only as agent for the holders of such
Shares and will place the orders for repurchase only with you. It is
understood that we may charge the holder of such Shares a fair commission
for handling the transaction.
13. Your obligations to us under this Agreement are subject to all the
provisions of the respective distribution agreements entered into between
you and each of the Funds. We understand and agree that in performing our
services under this agreement we are acting in the capacity of an
independent contractor, and you are in no way responsible for the manner of
our performance or for any of our acts or omissions in connection
therewith. Nothing in the Agreement shall be construed to constitute us or
any of our agents, employees or representatives as your agent, partner or
employee or the agent, partner or employee of any of the Funds.
14. We understand that you will supply us with reasonable quantities of the
current prospectus and periodic reports to shareholders for each of the
Funds. We agree not to use any other advertising or sales material relating
to the sale of shares of any of the Funds unless other advertising or sales
material is approved in writing by you.
<PAGE>
15. We shall offer and sell Shares, and execute telephone exchanges, only in
accordance with the terms and conditions of the then current prospectus of
each of the Funds and subject to the provisions of this Agreement, and we
will make no representations not contained in any such prospectus or in any
authorized supplemental material supplied by you. We will use our best
efforts in the development and promotion of sales of the Shares covered by
this Agreement, and agree to be responsible for the proper instruction and
training of all sales representatives employed by us in order that such
Shares will be offered in accordance with terms and conditions of this
Agreement and all applicable laws, rules and regulations. We agree to hold
you harmless and indemnify you in the event that we or any of our sales
representatives should violate any law, rule or regulation or any
provisions of this Agreement which may result in possible liability to you.
In addition, in consideration for the extension of the right to exercise
the telephone exchange privilege to us and our registered representatives,
we acknowledge that neither the Funds nor the Transfer Agent nor Equity
Planning will be liable for any loss, injury or damage incurred as a result
of acting upon, nor will they be responsible for the authenticity of any
telephone instructions, and agree that we will indemnify and hold harmless
the Funds, Equity Planning and the Transfer Agent against any loss, injury
or damage resulting from any telephone exchange instruction from us or our
registered representatives. (Telephone instructions will be recorded on
tape.) In the event you determine to refund any amounts paid by any
investor by reason of any such violation on our part, we shall forfeit the
right to, and pay over to you, the amount of any dealer discount allowed to
us with respect to the transaction for which the refund is made. All
expenses which we incur in connection with our activities under this
Agreement shall be borne by us.
16. We represent that we are properly registered as a broker or dealer under
the Securities Exchange Act of 1934 and are members of the National
Assocation of Securities Dealers, Inc. ("NASD") and agree to maintain
membership in the NASD or, in the alternative, that we are foreign dealers
not eligible for membership in the NASD. We agree to notify you promptly of
any change, termination, or suspension of the foregoing status. We agree to
abide by all the rules and regulations of the NASD including Section 26 of
Article III of the Rules of Fair Practice which is incorporated herein by
reference as if set forth in full. We further agree to comply with all
applicable state and Federal laws and the rules and regulations of
applicable regulatory agencies. We further agree that we will not sell, or
offer for sale, Shares in any state or jurisdiction in which such Shares
have not been duly registered or qualified for sale.
17. Either party may terminate this Agreement for any reason by written or
telegraphic notice to the other party which termination shall become
effective fifteen (15) days after the date of mailing or telegraphing such
notice to the other party. You may also terminate this Agreement for cause
or as a result of a violation by us, as determined by you in your
discretion, of any of the provisions of this Agreement, said termination to
be effective on the date of mailing written or telegraphing notice to us of
the same. Without limiting the generality of the foregoing, our own
expulsion from the NASD will automatically terminate this Agreement without
notice. Our suspension from the NASD of violation or applicable state or
Federal laws or rules and regulations of applicable regulatory agencies
will terminate this Agreement effective upon the date of your mailing
written notice or telegraphing notice to us of such termination. Your
failure to terminate this Agreement for any cause shall not constitute a
waiver of your right to so terminate at a later date for such cause.
18. We understand and agree that all communications and notices to you or to us
shall be sent to the addresses set forth at the beginning of this Agreement
or to such other addresses as either party may specify in writing from time
to time.
19. This Agreement shall become effective upon the date of its acceptance by
you as set forth herein. This Agreement and all rights and obligations of
the parties hereunder shall be governed by and construed under the laws of
the State of Connecticut. This Agreement is not assignable or transferable,
except that you may assign or transfer this Agreement to any successor
distributor of the Shares described herein.
ACCEPTED ON BEHALF OF
PHOENIX EQUITY PLANNING CORPORATION
<TABLE>
<S> <C>
DEALER FIRM
Date_________________________________________________ ____________________________________________________
NAME OF DEALER
By John W. Filoon, Jr., Snr. Vice Pres., Sales & Mktg. Date
-------------------------------------------------- -------------------------------------------------
NAME AND TITLE
By _________________________________________________
NAME AND TITLE
/s/ John W. Filoon, Jr.
- ------------------------------------------------------ -----------------------------------------------------
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
NASD - CRD -NUMBER _________________________________
</TABLE>
<PAGE>
ANNEX A
DEALER'S AGREEMENT WITH
PHOENIX EQUITY PLANNING CORPORATION
The public offering price of Class A Shares of all Series of the Phoenix Series
Fund (except the Money Market Fund Series) all Portfolios of the Phoenix
Multi-Portfolio Fund and the Phoenix Total Return Fund Inc., is the net asset
value plus a sales charge. The offering price so determined becomes effective
after the purchase order is received by Equity Planning or the Trust's agent,
State Street Bank and Trust Company. The sales charge is reduced on a graduated
scale on single purchases of $50,000 or more as shown below:
Class A Shares
- --------------
<TABLE>
<CAPTION>
Sales Charge Sales Charge Dealer Discount or Agency
Amount of Transaction as percentage as percentage fee as percentage
at offering price of offering price of amount invested of offering price*
- ----------------- ----------------- ------------------ --------------------------
<S> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.25%
$50,000 but under $100,000 4.50% 4.71% 4.00%
$100,000 but under $250,000 3.50% 3.63% 3.00%
$250,000 but under $500,000 3.00% 3.09% 2.75%
$500,000 but under $1,000,000 2.00% 2.04% 1.75%
$1,000,000 or more . . . None None (see below*)
</TABLE>
*In connection with purchase of Class A shares of $1,000,000 or more (and
subsequent purchases in any amount) including purchases of shares of the Phoenix
Money Market Fund Series, Equity Planning may pay broker-dealers from its own
profits and resources, a percentage of the net asset value of any shares sold
(excluding Phoenix Money Market Fund Series) as set forth below:
Purchase Amount Payment to Broker/Dealers
- --------------- -------------------------
$1,000,000 - $2,000,000 .75 of 1%
$2,000,000 - $4,000,000 .50 of 1%
$4,000,000 or more .25 of 1%
Effective January 1, 1994: Class B shares will be offered on sales of shares of
the Phoenix High Yield Fund Series and Phoenix U.S. Government Fund Series both
of which are Series of the Phoenix Series Fund, on sales of Shares of the
Phoenix Tax Exempt Bond Portfolio which is a Portfolio of the Phoenix
Multi-Portfolio Fund and on shares of the Phoenix Total Return Fund Inc. Class B
shares are sold at net asset value per share without the imposition of a sales
charge at the time of purchase. Shares which are redeemed within six years of
purchase will be subject to a contingent deferred sales charge, as described in
the Fund's current prospectus, at the rates set forth below:
Class B Shares:
- ---------------
Contingent Deferred Sales Charge
as a percentage of dollar amount
Years Since Purchase subject to charge
- -------------------- --------------------------------
First 4%
Second 4%
Third 3%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh 0
PHOENIX FUNDS DISTRIBUTION PLAN
- -------------------------------
Under their respective Distribution Plans, each of the Phoenix Funds may pay
Equity Planning an amount annually not to exceed a certain percentage of the
average daily net assets of the Fund, as shown below. Equity Planning may pay to
qualifying dealers an amount up to this percentage of the average daily net
assets in qualifying shares sold by such dealers as described in the Fund's
prospectus.
<PAGE>
FUND NAME DISTRIBUTION PLAN
- --------- -----------------
Phoenix Series Fund Class A .25% Class B .75%
Phoenix Multi-Portfolio Fund .25% .75%
Phoenix Total Return Fund .25% .75%
*Equity Planning may sponsor sales contests and provide to all qualifying
dealers from its own profits and resources, additional compensation in the form
of trips and merchandise. Brokers or dealers other than Equity Planning may also
make customary additional charges for their Services in effecting purchases, if
they notify the Trust of their intention to do so.
FINANCIAL AGENT AGREEMENT
THIS AGREEMENT made and concluded as of this 11th day of December, 1996
by and between Phoenix Equity Planning Corporation, a Connecticut corporation
having a place of business located at 100 Bright Meadow Boulevard, Enfield,
Connecticut (the "Financial Agent") and each of the undersigned mutual funds
(hereinafter collectively and singularly referred to as the "Trust").
WITNESSETH THAT:
1. Financial Agent shall keep the books of the Trust and compute the
daily net asset value of shares of the Trust in accordance with instructions
received from time to time from the Board of Trustees of the Trust; which
instructions shall be certified to Financial Agent by the Trust's Secretary.
Financial Agent shall report such net asset value so determined to the Trust and
shall perform such other services as may be requested from time to time by the
Trust as are reasonably incidental to Financial Agent's duties hereunder.
2. Financial Agent shall be obligated to maintain, for the periods and
in the places required by Rule 31a-2 under the Investment Company Act of 1940,
as amended, those books and records maintained by Financial Agent. Such books
and records are the property of the Trust and shall be surrendered promptly to
the Trust upon its request. Furthermore, such books and records shall be open to
inspection and audit at reasonable times by officers and auditors of the Trust.
3. As compensation for its services hereunder during any fiscal year of
the Trust, Financial Agent shall receive, within eight days after the end of
each month, a fee as specified in Schedule A.
4. Financial Agent shall not be liable for anything done or omitted by
it in the exercise of due care in discharging its duties specifically described
hereunder and shall be answerable and accountable only for its own acts and
omissions and not for those of any agent employed by it nor for those of any
bank, trust company, broker, depository, correspondent or other person.
Financial Agent shall be protected in acting upon any instruction, notice,
request, consent, certificate, resolution, or other instrument or paper believed
by Financial Agent to be genuine, and to have been properly executed, and shall,
unless otherwise specifically provided herein, be entitled to receive as
conclusive proof of any fact or matter required to be ascertained by Financial
Agent hereunder a certificate signed by the Secretary of the Trust. Financial
Agent shall be entitled, with respect to questions of law relating to its duties
hereunder, to advice of counsel (which may be counsel for the Trust) and, with
respect to anything done or omitted by it in good faith hereunder in conformity
with the advice of or based upon an opinion of counsel, to be held harmless by
the Trust from all claims of loss or damage. Nothing herein shall protect
Financial Agent against any liability to the Trust or to its respective
shareholders to which Financial Agent would otherwise be subject by reason of
its willful misfeasance, bad faith, gross negligence or reckless disregard of
its duties hereunder. Except as provided in this paragraph, Financial Agent
shall not be entitled to any indemnification by the Trust.
<PAGE>
5. Subject to prior approval of the Board of Trustees of the Trust,
Financial Agent may appoint one or more sub-financial agents to perform any of
the functions and services which are to be provided under the terms of this
Agreement upon such terms and conditions as may be mutually agreed upon by the
Trust, Financial Agent and such sub-financial agent.
6. This Agreement shall continue in effect only so long as (a) such
continuance is specifically approved at least annually by the Board of Trustees
of the Trust or by a vote of a majority of the outstanding voting securities of
the Trust, and (b) the terms and any renewal of such Agreement have been
approved by the vote of a majority of the trustees of the Trust who are not
parties to this Agreement or interested persons, as that term is defined in the
Investment Company Act of 1940, as amended, of any such party, cast in person at
a meeting called for the purpose of voting on such approval. A "majority of the
outstanding voting securities of the Trust" shall have, for all purposes of this
Agreement, the meaning provided therefor in said Investment Company Act.
7. Either party may terminate the within Agreement by tendering written
notice to the other, whereupon Financial Agent will be relieved of the duties
described herein. This Agreement shall immediately terminate in the event of its
assignment, as that term is defined in said Investment Company Act.
8. This Agreement shall be construed and the rights and obligations of
the parties hereunder enforced in accordance with the laws of the Commonwealth
of Massachusetts.
<PAGE>
9. This Agreement shall become effective on January 1, 1997.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first written
above.
PHOENIX CALIFORNIA TAX EXEMPT
BONDS, INC.
PHOENIX INCOME AND GROWTH FUND
PHOENIX MULTI-PORTFOLIO FUND
PHOENIX MULTI-SECTOR FIXED INCOME
FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM
BOND FUND
PHOENIX SERIES FUND
PHOENIX STRATEGIC ALLOCATION FUND, INC.
PHOENIX STRATEGIC EQUITY SERIES FUND
PHOENIX WORLDWIDE OPPORTUNITIES FUND
By: /s/ Philip R. McLoughlin
------------------------
Philip R. McLoughlin
President
PHOENIX EQUITY PLANNING
CORPORATION
By: /s/ David R. Pepin
------------------------
David R. Pepin
Executive Vice President
<PAGE>
SCHEDULE A
FEE SCHEDULE
FEE INFORMATION FOR SERVICES AS FINANCIAL AGENT
Annual Financial Agent Fees shall be based on the following formula:
(1) An incremental schedule applies as follows:
Up to $100 million: 5 basis points on average daily net assets
$100 million to $300 million: 4 basis points on average daily net assets
$300 million thru $500 million: 3 basis points on average daily net assets
Greater than $500 million: 1.5 basis points on average daily net assets
A minimum fee will apply as follows:
Money Market $35,000
Equity $50,000
Balanced $60,000
Fixed Income $70,000
International $70,000
REIT $70,000
(2) An additional charge of $12,000 applies for each additional class
of shares above one, over and above the minimum asset-based fee previously
noted.
The following tables indicates the classification and effective date
for each of the applicable fund/series/portfolio:
Classification Series Name
Money Market Phoenix Money Market Fund Series
Equity Phoenix Aggressive Growth Fund Series
Phoenix Convertible Fund Series
Phoenix Endowment Equity Portfolio
Phoenix Equity Opportunities Fund
Phoenix Growth Fund Series
Phoenix Micro Cap Fund
Phoenix Mid Cap Portfolio
Phoenix Small Cap Fund
Phoenix Strategic Theme Fund
<PAGE>
Classification Series Name
Balanced Phoenix Balanced Fund Series
Phoenix Income and Growth Fund
Phoenix Strategic Allocation Fund, Inc.
Fixed Income Phoenix California Tax Exempt Bonds, Inc.
Phoenix Diversified Income Portfolio
Phoenix Emerging Markets Bond Portfolio
Phoenix High Yield Fund Series
Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Multi-Sector Short Term Bond Fund
Phoenix Tax-Exempt Bond Portfolio
Phoenix U.S. Government Securities Fund Series
International Phoenix International Portfolio
Phoenix Worldwide Opportunities Fund
REIT Phoenix Real Estate Securities Portfolio
FIRST AMENDMENT TO FINANCIAL AGENT AGREEMENT
THIS AMENDMENT made effective as of the 1st day of January, 1997 amends that
certain Financial Agent Agreement dated December 11, 1996 by and among the
following parties (the "Agreement") as hereinbelow provided.
W I T N E S S E T H :
WHEREAS, due to a scrivener's error, the Phoenix Convertible Fund
Series was incorrectly classified as an "Equity" series rather than a "Balanced"
series for purposes of applying the minimum fee; and
WHEREAS, the parties wish to correct this error and correctly classify
the Phoenix Convertible Fund Series as a "Balanced" series:
NOW, THEREFORE, in consideration of the foregoing premises, Schedule A
to the Agreement is hereby replaced with "Revised Schedule A" attached hereto
and made a part hereof. Except as hereinabove provided, the Agreement shall be
and remain unmodified and in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their duly authorized officers on this 25th day of February, 1997.
PHOENIX CALIFORNIA TAX EXEMPT BONDS, INC.
PHOENIX INCOME AND GROWTH FUND
PHOENIX MULTI-PORTFOLIO FUND
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
PHOENIX SERIES FUND
PHOENIX STRATEGIC ALLOCATION FUND, INC.
PHOENIX STRATEGIC EQUITY SERIES FUND
PHOENIX WORLDWIDE OPPORTUNITIES FUND
By: /s/ Philip R. McLoughlin
-------------------------
Philip R. McLoughlin
President (as to all)
PHOENIX EQUITY PLANNING CORPORATION
By: /s/ David R. Pepin
-------------------------
David R. Pepin
Executive Vice President
<PAGE>
REVISED SCHEDULE A
FEE SCHEDULE
FEE INFORMATION FOR SERVICES AS FINANCIAL AGENT
Annual Financial Agent Fees shall be based on the following formula:
(1) An incremental schedule applies as follows:
Up to $100 million: 5 basis points on average daily net assets
$100 million to $300 million: 4 basis points on average daily net assets
$300 million thru $500 million: 3 basis points on average daily net assets
Greater than $500 million: 1.5 basis points on average daily net assets
A minimum fee will apply as follows:
Money Market $35,000
Equity $50,000
Balanced $60,000
Fixed Income $70,000
International $70,000
REIT $70,000
(2) An additional charge of $12,000 applies for each additional class
of shares above one, over and above the minimum asset-based fee previously
noted.
The following tables indicates the classification and effective date
for each of the applicable fund/series/portfolio:
Classification Series Name
Money Market Phoenix Money Market Fund Series
Equity Phoenix Aggressive Growth Fund Series
Phoenix Endowment Equity Portfolio
Phoenix Equity Opportunities Fund
Phoenix Growth Fund Series
Phoenix Micro Cap Fund
Phoenix Mid Cap Portfolio
Phoenix Small Cap Fund
Phoenix Strategic Theme Fund
<PAGE>
Classification Series Name
Balanced Phoenix Balanced Fund Series
Phoenix Convertible Fund Series
Phoenix Income and Growth Fund
Phoenix Strategic Allocation Fund, Inc.
Fixed Income Phoenix California Tax Exempt Bonds, Inc.
Phoenix Diversified Income Portfolio
Phoenix Emerging Markets Bond Portfolio
Phoenix High Yield Fund Series
Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Multi-Sector Short Term Bond Fund
Phoenix Tax-Exempt Bond Portfolio
Phoenix U.S. Government Securities Fund Series
International Phoenix International Portfolio
Phoenix Worldwide Opportunities Fund
REIT Phoenix Real Estate Securities Portfolio
SECOND AMENDMENT TO FINANCIAL AGENT AGREEMENT
THIS AMENDMENT made effective as of the 1st day of July, 1997 amends that
certain Financial Agent Agreement dated December 11, 1997 and amended January 1,
1997 by and among the following parties (the "Agreement") as hereinbelow
provided.
W I T N E S S E T H :
WHEREAS, the parties hereto wish to amend the Agreement to include an
express provision to allow the addition of funds without necessitating a formal
amendment to said Agreement:
NOW, THEREFORE, in consideration of the foregoing premise, Paragraph 8
of the Agreement is renumbered to Paragraph 9 and the following language
inserted as the new Paragraph 8:
8. Additional Funds
Additional funds may become party to this Agreement by
notifying the Financial Agent in writing, and if the Financial Agent
agrees in writing to provide its services, such fund shall become a
Trust subject to the terms of the Agreement. Such notification shall
include a revised Schedule A reflecting the new fund(s) as added to the
appropriate fund classification(s).
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their duly authorized officers on this 22nd day of July, 1997.
PHOENIX CALIFORNIA TAX EXEMPT BONDS, INC.
PHOENIX INCOME AND GROWTH FUND
PHOENIX MULTI-PORTFOLIO FUND
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
PHOENIX SERIES FUND
PHOENIX STRATEGIC ALLOCATION FUND, INC.
PHOENIX STRATEGIC EQUITY SERIES FUND
PHOENIX WORLDWIDE OPPORTUNITIES FUND
By: /s/ Philip R. McLoughlin
---------------------------------
Philip R. McLoughlin
President
PHOENIX EQUITY PLANNING CORPORATION
By: /s/ David R. Pepin
-----------------------------------
David R. Pepin
Executive Vice President
Exhibit 11
Consent of Independent Accountants
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 63 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated August 6, 1997, relating to the financial
statements and financial highlights appearing in the June 30, 1997 Annual
Report to Shareholders of the Phoenix Worldwide Opportunities Fund, which are
also incorporated by reference into the Registration Statement. We also consent
to the reference to us under the heading "Financial Highlights" in the
Prospectus and under the heading "Other Information--Independent Accountants"
in the Statement of Additional Information.
/s/ PRICE WATERHOUSE LLP
Boston, Massachusetts
October 20, 1997
Exhibit 15.1
Amended and Restated Distribution Plan Pursuant to Rule 12b-1
for Class A Shares
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
(the "Fund")
CLASS A SHARES
AMENDED AND RESTATED DISTRIBUTION PLAN
PURSUANT TO RULE 12b-1
under the
INVESTMENT COMPANY ACT OF 1940
1. Introduction
The Fund and Phoenix Equity Planning Corporation (the "Distributor"), a
broker-dealer registered under the Securities Exchange Act of 1934, have entered
into a Distribution Agreement pursuant to which the Distributor will act as
principal underwriter of each class of shares of the Fund for sale to the
permissible purchasers. The Trustees of the Fund have determined to adopt this
Distribution Plan (the "Plan"), in accordance with the requirements of Section
12b-1 of the Investment Company Act of 1940, as amended (the "Act") with respect
to Class A shares of the Fund and have determined that there is a reasonable
likelihood that the Plan will benefit the Fund and its Class A shareholders.
2. Rule 12b-1 Fees
The Fund shall reimburse the Distributor, at the end of each month, up
to a maximum on an annual basis of .05% the average daily value of the net
assets of the Fund's Class A shares, subject to any applicable restrictions
imposed by rules of the National Association of Securities Dealers, Inc., for
distribution expenditures incurred by Distributor subsequent to the
effectiveness of this Plan, in connection with the sale and promotion of the
Class A shares of the Fund and the furnishing of services to Class A
shareholders of the Fund. Such expenditures shall consist of: (i) commissions to
sales personnel for selling Class A shares of the Fund (including underwriting
commissions and finance charges related to the payment of commissions); (ii)
compensation, sales incentives and payments to sales, marketing and service
personnel; (iii) payments to broker-dealers and other financial institutions
which have entered into selling agreements with the Distributor for services
rendered in connection with the sale and distribution of Class A shares of the
Fund; (iv) payment of expenses incurred in sales and promotional activities,
including advertising expenditures related to the Class A shares of the Fund;
(v) the costs of preparing and distributing promotional materials; (vi) the cost
of printing the Fund's Prospectus and Statement of Additional Information for
distribution to potential investors; and (vii) such other similar services that
the Trustees of the Fund determine are reasonably calculated to result in the
sale of Class A shares of the Fund. The Fund shall also pay the Distributor, at
the end of each month, an amount on an annual basis equal to 0.25% of the
average daily value of the net assets of the Fund's Class A shares, as
compensation for providing personal service to
<PAGE>
shareholders, including assistance in connection with inquiries relating to
shareholder accounts, and for maintaining shareholder accounts (the "Service
Fee").
Any reduction to amounts payable under this Plan shall first be to the
extent of the Service Fee, and then from the balance of the 12b-1 Fee.
Amounts paid or payable by the Fund under this Plan or any agreement
with any person or entity relating to the implementation of this Plan ("related
agreement") shall only be used to pay for, or reimburse payment for, the
distribution expenditures described in the preceding paragraph and shall, given
all surrounding circumstances, represent charges within the range of what would
have been negotiated at arm's length as payment for the specific sales or
promotional services and activities to be financed hereunder and any related
agreement, as determined by the Trustees of the Fund, in the exercise of
reasonable business judgment, in light of fiduciary duties under state law and
Sections 36(a) and (b) of the Act and based upon appropriate business estimates
and projections. No amounts paid or payable by the Fund under this Plan or any
related agreement may be used to pay for, or reimburse payment for, sales or
promotional services or activities unless such payment or reimbursement takes
place prior to the earliest of (a) the last day of the one-year period
commencing on the last day of the calendar quarter during which the specific
service or activity was performed, or (b) the last day of the one-year period
commencing on the last day of the calendar quarter during which payment for the
service or activity was made by a third party on behalf of the Fund.
3. Reports
At least quarterly in each year this Plan remains in effect, the Fund's
Principal Accounting Officer or Treasurer, or such other person authorized to
direct the disposition of monies paid or payable by the Fund, shall prepare and
furnish to the Trustees of the Fund for their review, and the Trustees shall
review, a written report complying with the requirements of Rule 12b-l under the
Act regarding the amounts expended under this Plan and the purposes for which
such expenditures were made.
4. Required Approval
This Plan shall not take effect until it, together with any related
agreement, has been approved by a vote of at least a majority of the Fund's
Trustees as well as a vote of at least a majority of the Trustees of the Fund
who are not interested persons (as defined in the Act) of the Fund and who have
no direct or indirect financial interest in the operation of this Plan or in any
related agreement (the "Disinterested Trustees"), cast in person at a meeting
called for the purpose of voting on this Plan or any related agreement and this
Plan shall not take effect with respect to the Fund until it has been approved
by a vote of at least a majority of the outstanding voting Class A shares (as
such phrase is defined in the Act).
5. Term
<PAGE>
This Plan shall remain in effect for one year from the date of its
adoption and may be continued thereafter if specifically approved at least
annually by a vote of at least a majority of the Trustees of the Fund as well as
a majority of the Disinterested Trustees. This Plan may be amended at any time,
provided that (a) the Plan may not be amended to increase materially the amount
of the distribution expenses provided in Paragraph 2 hereof (including the
Service Fee) without the approval of at least a majority of the outstanding
voting securities (as defined in the Act) of the Class A shares of the Fund and
(b) all material amendments to this Plan must be approved by a majority vote of
the Trustees of the Fund and of the Disinterested Trustees cast in person at a
meeting called for the purpose of such vote.
6. Selection of Disinterested Trustees
While this Plan is in effect, the selection and nomination of Trustees
who are not interested persons (as defined in the Act) of the Fund shall be
committed to the discretion of the Disinterested Trustees then in office.
7. Related Agreements
Any related agreement shall be in writing and shall provide that (a)
such agreement shall be subject to termination, without penalty, by vote of a
majority of the outstanding voting securities (as defined in the Act) of the
Class A shares of the Fund on not more than 60 days' written notice to the other
party to the agreement and (b) such agreement shall terminate automatically in
the event of its assignment.
8. Termination
This Plan may be terminated at any time by a vote of a majority of the
Disinterested Trustees or by a vote of a majority of the outstanding voting
securities (as defined in the Act) of the Class A shares of the Fund. In the
event this Plan is terminated or otherwise discontinued, no further payments
hereunder will be made hereunder.
9. Records
The Fund shall preserve copies of this Plan and any related agreements
and all reports made pursuant to Paragraph 3 hereof, and any other information,
estimates, projections and other materials that serve as a basis therefor,
considered by the Trustees of the Fund, for a period of not less than six years
from the date of this Plan, the agreement or report, as the case may be, the
first two years in an easily accessible place.
10. Non-Recourse
<PAGE>
The Fund's Declaration of Trust dated November 4, 1991, a copy of
which, together with the amendments thereto ("Declaration"), is on file in the
office of the Secretary of the Commonwealth of Massachusetts, refers to the
Trustees under the Declaration of Trust collectively as Trustees, but not as
individuals or personally, and no Trustee, shareholder, officer, employee or
agent of the Fund may be held to any personal liability, nor may any resort be
had to their private property for the satisfaction of any obligation or claim or
otherwise in connection with the affairs of the Fund but the Fund property only
shall be liable.
[Adopted at a duly held meeting of the Board of Trustees on August 27, 1997.]
Exhibit 15.2
Amended and Restated Distribution Plan Pursuant to Rule 12b-1
for Class B Shares
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
(the "Fund")
CLASS B SHARES
AMENDED AND RESTATED DISTRIBUTION PLAN
PURSUANT TO RULE 12b-1
under the
INVESTMENT COMPANY ACT OF 1940
1. Introduction
The Fund and Phoenix Equity Planning Corporation (the "Distributor"), a
broker-dealer registered under the Securities Exchange Act of 1934, have entered
into a Distribution Agreement pursuant to which the Distributor will act as
principal underwriter of each class of shares of the Fund for sale to the
permissible purchasers. The Trustees of the Fund have determined to adopt this
Distribution Plan (the "Plan"), in accordance with the requirements of Section
12b-1 of the Investment Company Act of 1940, as amended (the "Act") with respect
to Class B shares of the Fund and have determined that there is a reasonable
likelihood that the Plan will benefit the Fund and its Class B shareholders.
2. Rule 12b-1 Fees
The Fund shall reimburse the Distributor, at the end of each month, up
to a maximum on an annual basis of .75% of the average daily value of the net
assets of the Fund's Class B shares, subject to any applicable restrictions
imposed by rules of the National Association of Securities Dealers, Inc., for
distribution expenditures incurred by Distributor subsequent to the
effectiveness of this Plan, in connection with the sale and promotion of the
Class B shares of the Fund and the furnishing of services to Class B
shareholders of the Fund. Such expenditures shall consist of: (i) commissions to
sales personnel for selling Class B shares of the Fund (including underwriting
commissions and finance charges related to the payment of commissions); (ii)
compensation, sales incentives and payments to sales, marketing and service
personnel; (iii) payments to broker-dealers and other financial institutions
which have entered into selling agreements with the Distributor for services
rendered in connection with the sale and distribution of Class B shares of the
Fund; (iv) payment of expenses incurred in sales and promotional activities,
including advertising expenditures related to the Class B shares of the Fund;
(v) the costs of preparing and distributing promotional materials; (vi) the cost
of printing the Fund's Prospectus and Statement of Additional Information for
distribution to potential investors; and (vii) such other similar services that
the Trustees of the Fund determine are reasonably calculated to result in the
sale of Class B shares of the Fund. The Fund shall also pay the Distributor, at
the end of each month, an amount on an annual basis equal to 0.25% of the
average daily value of the net assets of the Fund's Class B shares, as
compensation for providing personal service to
<PAGE>
shareholders, including assistance in connection with inquiries relating to
shareholder accounts, and for maintaining shareholder accounts (the "Service
Fee").
Any reduction to amounts payable under this Plan shall first be to the
extent of the Service Fee, and then from the balance of the 12b-1 Fee.
Amounts paid or payable by the Fund under this Plan or any agreement
with any person or entity relating to the implementation of this Plan ("related
agreement") shall only be used to pay for, or reimburse payment for, the
distribution expenditures described in the preceding paragraph and shall, given
all surrounding circumstances, represent charges within the range of what would
have been negotiated at arm's length as payment for the specific sales or
promotional services and activities to be financed hereunder and any related
agreement, as determined by the Trustees of the Fund, in the exercise of
reasonable business judgment, in light of fiduciary duties under state law and
Sections 36(a) and (b) of the Act and based upon appropriate business estimates
and projections.
3. Reports
At least quarterly in each year this Plan remains in effect, the Fund's
Principal Accounting Officer or Treasurer, or such other person authorized to
direct the disposition of monies paid or payable by the Fund, shall prepare and
furnish to the Trustees of the Fund for their review, and the Trustees shall
review, a written report complying with the requirements of Rule 12b-l under the
Act regarding the amounts expended under this Plan and the purposes for which
such expenditures were made.
4. Required Approval
This Plan shall not take effect until it, together with any related
agreement, has been approved by a vote of at least a majority of the Fund's
Trustees as well as a vote of at least a majority of the Trustees of the Fund
who are not interested persons (as defined in the Act) of the Fund and who have
no direct or indirect financial interest in the operation of this Plan or in any
related agreement (the "Disinterested Trustees"), cast in person at a meeting
called for the purpose of voting on this Plan or any related agreement and this
Plan shall not take effect with respect to the Fund until it has been approved
by a vote of at least a majority of the outstanding voting Class B shares (as
such phrase is defined in the Act).
5. Term
This Plan shall remain in effect for one year from the date of its
adoption and may be continued thereafter if specifically approved at least
annually by a vote of at least a majority of the Trustees of the Fund as well as
a majority of the Disinterested Trustees. This Plan may be amended at any time,
provided that (a) the Plan may not be amended to increase materially the amount
of the distribution expenses provided in Paragraph 2 hereof (including the
Service Fee)
<PAGE>
without the approval of at least a majority of the outstanding voting securities
(as defined in the Act) of the Class B shares of the Fund and (b) all material
amendments to this Plan must be approved by a majority vote of the Trustees of
the Fund and of the Disinterested Trustees cast in person at a meeting called
for the purpose of such vote.
<PAGE>
6. Selection of Disinterested Trustees
While this Plan is in effect, the selection and nomination of Trustees
who are not interested persons (as defined in the Act) of the Fund shall be
committed to the discretion of the Disinterested Trustees then in office.
7. Related Agreements
Any related agreement shall be in writing and shall provide that (a)
such agreement shall be subject to termination, without penalty, by vote of a
majority of the outstanding voting securities (as defined in the Act) of the
Class B shares of the Fund on not more than 60 days' written notice to the other
party to the agreement and (b) such agreement shall terminate automatically in
the event of its assignment.
8. Termination
This Plan may be terminated at any time by a vote of a majority of the
Disinterested Trustees or by a vote of a majority of the outstanding voting
securities (as defined in the Act) of the Class B shares of the Fund. In the
event this Plan is terminated or otherwise discontinued, no further payments
hereunder will be made hereunder.
9. Records
The Fund shall preserve copies of this Plan and any related agreements
and all reports made pursuant to Paragraph 3 hereof, and any other information,
estimates, projections and other materials that serve as a basis therefor,
considered by the Trustees of the Fund, for a period of not less than six years
from the date of this Plan, the agreement or report, as the case may be, the
first two years in an easily accessible place.
10. Non-Recourse
The Fund's Declaration of Trust dated November 4, 1991, a copy of
which, together with the amendments thereto ("Declaration"), is on file in the
office of the Secretary of the Commonwealth of Massachusetts, refers to the
Trustees under the Declaration of Trust collectively as Trustees, but not as
individuals or personally, and no Trustee, shareholder, officer, employee or
agent of the Fund may be held to any personal liability, nor may any resort be
had to their private property for the satisfaction of any obligation or claim or
otherwise in connection with the affairs of the Fund but the Fund property only
shall be liable.
[Adopted at a duly held meeting of the Board of Trustees on August 27, 1997.]
EXHIBIT 16
TOTAL RETURN FORMULA
P(1 + T )^n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value
<PAGE>
- --------------------------------------------------------------------------------
EXPLANATION OF TOTAL RETURN CALCULATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
====================================================================================================================================
Initial Sales Initial Net Number of Share Gross Less Recurring Ending
Payment Charge* Asset Shares Value Redemption (-) Account Redemption
Value Per Value Fees Value
Initial
Payment
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ten $ 1,000 $ 47.50 $ 953 $ 128 $ 2,267 $ 2,267 -- NONE $ 2,267
Year
- ------------------------------------------------------------------------------------------------------------------------------------
Five 1,000 47.50 953 127 1,381 1,381 -- NONE 1,381
Year
- ------------------------------------------------------------------------------------------------------------------------------------
One 1,000 47.50 953 119 1,214 1,214 -- NONE 1,214
Year
====================================================================================================================================
</TABLE>
* Assumes initial sales load is deducted from the initial $1,000 payment.
Exhibit 18.3
First Amendment to Amended and Restated Plan
pursuant to Rule 18f-3
<PAGE>
PHOENIX FUNDS
(the "Funds")
FIRST AMENDMENT TO THE
AMENDED AND RESTATED PLAN PURSUANT TO RULE 18f-3
under the
INVESTMENT COMPANY ACT OF 1940
That certain Amended and Restated Plan Pursuant to Rule 18f-3 under the
Investment Company Act of 1940 duly adopted by the Board of Directors/Trustees
of the Funds on November 20, 1996, is hereby amended as follows:
1. The first and last sentences of Section 2. The Multi-Class
Structure are deleted and the following two sentences substituted
therefor:
The portfolios of the Funds listed on Schedule A hereto shall offer up
to four classes of shares as indicated on Schedule A: Class A, Class
B, Class C and Class M. ( . . . ) In addition, Class A, Class B, Class
C and Class M shares shall have the features described in Sections a,
b, c and d, below.
2. The following two subparagraphs are added to Section 2a.
Distribution Plans immediately following subparagraph 2a(ii):
iii. Class C shares of each Multi-Class Portfolio shall
reimburse the Distributor for costs and expenses incurred in connection
with distribution and marketing of shares thereof, as provided in the
Class C Distribution Plan and any supplements thereto, subject to an
annual limit of 1.00%, or in some cases 0.50%, of the average daily net
assets of a Multi-Class Portfolio's Class C shares.
iv. Class M shares of each Multi-Class Portfolio shall
reimburse the Distributor for costs and expenses incurred in connection
with distribution and marketing of shares thereof, as provided in the
Class M Distribution Plan and any supplements thereto, subject to an
annual limit of 0.50% of the average daily net assets of a Multi-Class
Portfolio's Class M shares.
3. Schedule A is amended as attached hereto.
This Amendment was approved by the Board of Directors/Trustees at a
meeting held on May 28, 1997.
/s/ Thomas N. Steenburg
----------------------------------
Assistant Secretary
<PAGE>
SCHEDULE A
----------
<TABLE>
<CAPTION>
Class A Class B Class C Class M
------- ------- ------- -------
<S> <C> <C> <C> <C>
PHOENIX CALIFORNIA TAX-EXEMPT BONDS, INC. X X __ __
PHOENIX INCOME AND GROWTH FUND X X __ __
PHOENIX MULTI-PORTFOLIO FUND:
EMERGING MARKETS BOND PORTFOLIO X X X X
INTERNATIONAL PORTFOLIO X X __ __
MID CAP PORTFOLIO X X __ __
REAL ESTATE SECURITIES PORTFOLIO X X __ __
STRATEGIC INCOME PORTFOLIO X X X X
TAX-EXEMPT BOND PORTFOLIO X X __ __
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC. X X X X
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND X X X __
PHOENIX SERIES FUND:
AGGRESSIVE GROWTH FUND SERIES X X __ __
BALANCED FUND SERIES X X __ __
CONVERTIBLE FUND SERIES X X __ __
GROWTH FUND SERIES X X __ __
HIGH YIELD FUND SERIES X X X X
MONEY MARKET FUND SERIES X X X X
U.S. GOVERNMENT SECURITIES FUND X X __ __
SERIES
PHOENIX STRATEGIC EQUITY SERIES FUND:
EQUITY OPPORTUNITIES FUND X X __ __
MICRO CAP FUND X X __ __
SMALL CAP FUND X X __ __
STRATEGIC THEME FUND X X X X
PHOENIX STRATEGIC ALLOCATION FUND, INC. X X __ __
PHOENIX WORLDWIDE OPPORTUNITIES FUND X X __ __
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> WORLDWIDE OPPORTUNITIES FUND CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 137992
<INVESTMENTS-AT-VALUE> 158119
<RECEIVABLES> 6485
<ASSETS-OTHER> 103
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 164707
<PAYABLE-FOR-SECURITIES> 2067
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1223
<TOTAL-LIABILITIES> 3290
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 126953
<SHARES-COMMON-STOCK> 14235
<SHARES-COMMON-PRIOR> 14190
<ACCUMULATED-NII-CURRENT> 1360
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 12893
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 20211
<NET-ASSETS> 161417
<DIVIDEND-INCOME> 1837
<INTEREST-INCOME> 1118
<OTHER-INCOME> (121)
<EXPENSES-NET> (2368)
<NET-INVESTMENT-INCOME> 466
<REALIZED-GAINS-CURRENT> 15785
<APPREC-INCREASE-CURRENT> 3210
<NET-CHANGE-FROM-OPS> 19461
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (588)
<DISTRIBUTIONS-OF-GAINS> (10601)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7287
<NUMBER-OF-SHARES-REDEEMED> (8260)
<SHARES-REINVESTED> 1018
<NET-CHANGE-IN-ASSETS> 6953
<ACCUMULATED-NII-PRIOR> 85
<ACCUMULATED-GAINS-PRIOR> 9570
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1137
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2368
<AVERAGE-NET-ASSETS> 151639
<PER-SHARE-NAV-BEGIN> 10.29
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 1.25
<PER-SHARE-DIVIDEND> (0.04)
<PER-SHARE-DISTRIBUTIONS> (0.78)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.75
<EXPENSE-RATIO> 1.53
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 002
<NAME> WORLDWIDE OPPORTUNITIES FUND CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 137992
<INVESTMENTS-AT-VALUE> 158119
<RECEIVABLES> 6485
<ASSETS-OTHER> 103
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 164707
<PAYABLE-FOR-SECURITIES> 2067
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1223
<TOTAL-LIABILITIES> 3290
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 126953
<SHARES-COMMON-STOCK> 799
<SHARES-COMMON-PRIOR> 563
<ACCUMULATED-NII-CURRENT> 1360
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 12893
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 20211
<NET-ASSETS> 161417
<DIVIDEND-INCOME> 1837
<INTEREST-INCOME> 1118
<OTHER-INCOME> (121)
<EXPENSES-NET> (2368)
<NET-INVESTMENT-INCOME> 466
<REALIZED-GAINS-CURRENT> 15785
<APPREC-INCREASE-CURRENT> 3210
<NET-CHANGE-FROM-OPS> 19461
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3)
<DISTRIBUTIONS-OF-GAINS> (464)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 295
<NUMBER-OF-SHARES-REDEEMED> (99)
<SHARES-REINVESTED> 40
<NET-CHANGE-IN-ASSETS> 2703
<ACCUMULATED-NII-PRIOR> 85
<ACCUMULATED-GAINS-PRIOR> 9570
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1137
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2368
<AVERAGE-NET-ASSETS> 151639
<PER-SHARE-NAV-BEGIN> 10.14
<PER-SHARE-NII> (0.03)
<PER-SHARE-GAIN-APPREC> 1.21
<PER-SHARE-DIVIDEND> (0.01)
<PER-SHARE-DISTRIBUTIONS> (0.78)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.53
<EXPENSE-RATIO> 2.29
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
