As filed with the Securities and Exchange Commission on October 6, 1998
Registration Nos. 2-16590
811-945
================================================================================
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. 64 [X]
and/or
REGISTRATION STATEMENT
Under the
INVESTMENT COMPANY ACT OF 1940
[X]
Amendment No. 64 [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)
-------------
Thomas N. Steenburg
Vice President, Counsel and Secretary
Phoenix Investment Partners, Ltd.
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)
[X] immediately upon filing pursuant to paragraph (b)
[ ] on 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
------------------- ------------------
<S> <C> <C>
1. Cover Page ................................................... Cover Page
2. Synopsis ..................................................... Introduction; Fund Expenses
3. Condensed Financial Information .............................. Financial Highlights
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
5A. Management's Discussion of Fund Performance .................. Performance Information
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
------------------- -----------------------------------
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;
Investment Restrictions
14. Management of the Fund ....................................... Trustees and Officers
15. Control Persons and Principal Holders of Securities .......... Trustees and Officers
16. Investment Advisory & Other Services ......................... Services of the Adviser; The Distributor; Distribution
Plans
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; Investor Account Services;
Redemption of Shares; Net Asset Value
20. Tax Status ................................................... Dividends, Distributions and Taxes
21. Underwriter .................................................. The Distributor; Distribution Plans
22. Calculation of Performance Data .............................. Performance Information
23. Financial Statements ......................................... Financial Statements
</TABLE>
<PAGE>
P H O E N I X
F U N D S
Prospectus October 6, 1998
[TRIANGLE] PHOENIX WORLDWIDE
OPPORTUNITIES FUND
[PHOENIX LOGO] PHOENIX
INVESTMENT PARTNERS
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
101 Munson Street
Greenfield, MA 01301
PROSPECTUS
October 6, 1998
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 6, 1998, 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.
================================================================================
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.
================================================================================
CUSTOMER SERVICE: (800) 243-1574
MARKETING: (800) 243-4361
TELEPHONE ORDERS: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY): (800) 243-1926
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<S> <C>
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 ............... 19
ADDITIONAL INFORMATION ........................... 19
</TABLE>
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
Phoenix Investment Counsel, Inc. (the "Adviser" or "PIC") is the
investment adviser of the Fund. The Adviser is a subsidiary of Phoenix
Investment Partners, Ltd. (formerly 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 Management 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 amended and restated 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 amended and restated 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 will pay the Distributor 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 1999. Pursuant to the amended and restated 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 will pay the Distributor 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 ("State
Street Bank"), or an authorized agent, 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, or an authorized agent,
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 State Street Bank
or an authorized 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."
Pending Change
Subject to shareholder approval, Aberdeen Fund Managers Inc. will be
appointed subadviser to PIC. On May 27, 1998, the Board of Trustees of Phoenix
Worldwide Opportunities Fund approved a change of the portfolio management of
the Fund and has recommended to shareholders that Aberdeen Fund Managers Inc.
be retained as subadviser. This recommendation was submitted to shareholders in
a proxy statement dated September 25, 1998.
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, 1998.
<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)
Management Fees 0.75% 0.75%
12b-1 Fees (a) (after waiver) 0.25% 1.00%
Other Operating Expenses 0.42% 0.42%
------ ----
Total Fund Operating Expenses 1.42%(b) 2.17%
======= ====
</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 1999. For the fiscal year ended June 30, 1998, 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 1.47%,
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 $61 $90 $121 $210
Class B Shares $62 $88 $116 $231
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 $61 $90 $121 $210
Class B Shares $22 $68 $116 $231
</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 PricewaterhouseCoopers 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)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
==========================================================
Year Ended June 30,
----------------------------------------------------------
1998 1997 1996 1995
---------- -------- -------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period .................... $10.75 $10.29 $9.04 $10.17
Income from investment
operations:(7)
Net investment
income (loss) ............... 0.02 0.03(3) (0.02)(3) 0.01(3)
Net realized and
unrealized gain
(loss) ...................... 2.97 1.25 1.87 0.56
-------- -------- -------- ---------
Total from investment
operations ................. 2.99 1.28 1.85 0.57
-------- -------- -------- ---------
Less distributions:
Dividends from net
investment income ........... (0.13) (0.04) -- --
Dividends from net
realized gains .............. (1.20) (0.78) (0.60) (1.37)
In excess of net
investment income ........... (0.01) -- -- --
In excess of net
realized gains .............. -- -- -- (0.33)
-------- -------- -------- ---------
Total distributions ......... (1.34) (0.82) (0.60) (1.70)
-------- -------- -------- ---------
Change in net asset value ..... 1.65 0.46 1.25 (1.13)
-------- -------- -------- ---------
Net asset value, end of
period ....................... $12.40 $10.75 $10.29 $9.04
======== ======== ======== =========
Total return(4) ............... 31.45% 13.40% 21.39% 6.53%
Ratios/supplemental data:
Net assets, end of period
(thousands) .................. $183,188 $153,005 $146,052 $ 126,481
Ratio to average net
assets of:
Operating expenses ........... 1.42% 1.53% 1.60% 1.80%
Net investment
income (loss) ............... 0.21% 0.34% (0.19)% 0.16%
Portfolio turnover ............ 156% 234% 245% 277%
<CAPTION>
Class A
=============================================================================
Year Ended June 30,
-------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989
-------- -------- -------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .................... $8.00 $7.18 $6.82 $7.56 $7.49 $8.00
Income from investment
operations:(7)
Net investment
income (loss) ............... 0.01 0.03 0.01(2) 0.23(1) 0.19(1)(3) 0.16
Net realized and
unrealized gain
(loss) ...................... 2.19 0.79 0.36 (0.67) (0.02) (0.53)
-------- ------ ------- -------- ------- -------
Total from investment
operations ................. 2.20 0.82 0.37 (0.44) 0.17 (0.37)
-------- ------ ------- -------- ------- -------
Less distributions:
Dividends from net
investment income ........... (0.03) -- (0.01) (0.30) (0.10) (0.14)
Dividends from net
realized gains .............. -- -- -- -- -- --
In excess of net
investment income ........... -- -- -- -- -- --
In excess of net
realized gains .............. -- -- -- -- -- --
-------- ------- ------- -------- ------- -------
Total distributions ......... (0.03) -- (0.01) (0.30) (0.10) (0.14)
-------- ------- ------- -------- ------- -------
Change in net asset value ..... 2.17 0.82 0.36 (0.74) 0.07 (0.51)
-------- ------- ------- -------- ------- -------
Net asset value, end of
period ....................... $10.17 $8.00 $7.18 $6.82 $7.56 $7.49
======== ======= ======= ======== ======= =======
Total return(4) ............... 27.46% 11.42% 5.43% (5.27)% 2.19% (4.62)%
Ratios/supplemental data:
Net assets, end of period
(thousands) .................. $118,707 $88,870 $63,354 $59,874 $70,388 $33,881
Ratio to average net
assets of:
Operating expenses ........... 1.50% 1.88% 2.15%(2) 1.75%(1) 1.33%(1) 1.40%
Net investment
income (loss) ............... 0.09% 0.61% 0.16% 3.46% 2.44% 1.83%
Portfolio turnover ............ 259% 95% 51% 76% 119% 87%
<CAPTION>
Class B
----------------------------------------------------------------
From
Year Ended Inception
June 30, 7/15/94
--------------------------------------------- to
1998 1997 1996 6/30/95
----------- ---------------- ---------------- ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period .................... $10.53 $10.14 $8.98 $10.40
Income from investment
operations:(7)
Net investment
income (loss) ............... (0.06) (0.03)(3) (0.08)(3) (0.02)(3)
Net realized and
unrealized gain
(loss) ...................... 2.90 1.21 1.84 0.30
------- --------- --------- ----------
Total from investment
operations ................. 2.84 1.18 1.76 0.28
------- --------- --------- ----------
Less distributions:
Dividends from net
investment income ........... (0.11) (0.01) -- --
Dividends from net
realized gains .............. (1.20) (0.78) (0.60) (1.37)
In excess of net
investment income ........... (0.02) -- -- --
In excess of net
realized gains .............. -- -- -- (0.33)
------- --------- --------- ----------
Total distributions ......... (1.33) (0.79) (0.60) (1.70)
------- --------- --------- ----------
Change in net asset value ..... 1.51 0.39 1.16 (1.42)
------- --------- --------- ----------
Net asset value, end of
period ....................... $12.04 $10.53 $10.14 $8.98
======= ========= ========= ==========
Total return(4) ............... 30.61% 12.46% 20.50% 3.54%(5)
Ratios/supplemental data:
Net assets, end of period
(thousands) .................. $10,855 $8,412 $5,709 $2,849
Ratio to average net
assets of:
Operating expenses ........... 2.17% 2.29% 2.34% 2.61%(6)
Net investment
income (loss) ............... (0.54)% (0.35)% (0.86)% (0.33)%(6)
Portfolio turnover ............ 156% 234% 245% 277%
</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 Adviser
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 charges are 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.
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
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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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<PAGE>
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.
Impact of the Year 2000 Issue
The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. There is the
possibility that some or all of a company's computer programs that have
date-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. The cost of modifying computer programs to become Year 2000
compliant may impact the financial performance and market price of companies
whose securities are held by the Fund.
The Trustees have directed management to ensure that the systems used by
service providers (including Phoenix Investment Partners, Ltd. ("PXP") and its
subsidiaries) in support of the Fund's operations be assessed and brought into
Year 2000 compliance. Based upon preliminary assessments, PXP has determined
that it will be required to modify or replace portions of its software so that
its computer systems will properly utilize dates beyond December 31, 1999.
Since many of the core systems of PXP companies are investment related, PXP
management believes that the majority of these systems are already Year 2000
compliant. PXP believes that with modifications to existing software and
conversions to new software, the Year 2000 issue will be mitigated. It is
anticipated that such modifications and conversions will be completed on a
timely basis. It is not known at this time if there could be a material impact
on the operations of PXP companies or the Fund if such modifications and
conversions are not completed timely.
PXP will utilize both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. Certain systems are
already in the process of being converted due to previous initiatives and it is
expected that all core systems will be remediated by December 31, 1998 and
tested by June 1999. The total cost to become Year 2000 compliant is not an
expense of the Fund and is not expected to have a material impact on the
operating results of PXP.
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 PIC, which is located at 56 Prospect
Street, Hartford, CT 06115-0486. PIC is a direct subsidiary of PXP and an
indirect subsidiary of Phoenix Home Life Mutual Insurance Company, a mutual
insurance company engaged in the insurance and investment businesses. PIC 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 Strategic Equity Series Fund, Phoenix-Seneca Funds, Phoenix
Series Fund, Phoenix Duff & Phelps Institutional Mutual Funds (except Real
Estate Equity Securities, Enhanced Reserves and Core Equity Portfolios),
Phoenix Multi-Portfolio Fund (except Real Estate Securities Portfolio), Phoenix
Growth and Income Fund of Phoenix Equity Series Fund, Phoenix Investment Trust
97, Phoenix Strategic Allocation Fund, Inc., The Phoenix Edge Series Fund and
Phoenix Multi-Sector Fixed Income Fund, Inc. The Adviser had approximately
$21.6 billion in assets under management as of May 30, 1998. 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
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<PAGE>
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, 1998 for Class A Shares and Class B Shares was 0.75%.
The Portfolio Managers
The investment and trading decisions for the Fund are made by a team of
the Adviser's equity investment professionals. The Adviser has retained
Aberdeen Fund Managers Inc. for advice and assistance in making investment and
trading decisions. Aberdeen Fund Managers Inc. does not have discretionary
authority to manage the Fund.
Subject to shareholder approval, effective October 27, 1998, Aberdeen Fund
Managers Inc. will be appointed subadviser to PIC. As subadviser, a team of
Aberdeen Fund Managers Inc. investment professionals will manage the Fund's
foreign investments. Concurrently, a team of PIC investment professionals will
manage the Fund's domestic investments.
The Financial Agent
Equity Planning acts as financial agent of the Fund and, as such, performs
administrative, bookkeeping and pricing functions for the Fund. For its
services as financial agent, Equity Planning will be paid a fee equal to the
sum of (1) the documented cost of fund accounting and related services provided
by PFPC, Inc., as subagent, to the financial agent, plus (2) the documented
cost to the financial agent to provide financial reporting and tax services and
oversight of the subagent's performance. The current fee schedule of PFPC, Inc.
ranges from 0.085% to 0.0125% of the aggregate daily net asset values of the
Fund. Certain minimum fees and fee waivers may apply. For its services during
the Fund's fiscal year ended June 30, 1998, Equity Planning received $97,030 or
.06% 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. ("NASD") 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. Michael E. Haylon and
William R. Moyer, directors of Equity Planning, are officers of the Fund. G.
Jeffrey Bohne, Nancy G. Curtiss, William E. Keen, III, Leonard J. Saltiel, John
F. Sharry 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 amended and restated 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
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<PAGE>
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 to pay for 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 1999. 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 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; (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
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, 1998, the Fund paid $403,413 under the
Class A Plan and $91,030 under the Class B Plan. The fees were used to
compensate broker-dealers for servicing shareholder's accounts, including
$13,032 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, 1998, the end of the last Plan year, the
Distributor had incurred unreimbursed expenses under the Class B Plan of
$354,718 (equal to 0.18% 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 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
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<PAGE>
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 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 Affiliated 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 Affiliated 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 Affiliated 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 trading 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, or an authorized agent, prior to
the close of trading on the New York Stock Exchange.
12
<PAGE>
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,
or an authorized agent, 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.
<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.
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.
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 trustee, director or officer of the Phoenix Funds, Phoenix-Engemann
Funds, Phoenix-Seneca Funds or other mutual funds advised, subadvised or
distributed by the Adviser, Distributor or any of their corporate affiliates
(an "Affiliated Phoenix Fund"); (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 Mutual
Insurance Company 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 Affiliated 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
13
<PAGE>
proceeds from investment companies other than Affiliated 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 Affiliated Phoenix Fund
purchase and that a sales charge was paid; or (16) any deferred compensation
plan established for the benefit of any Affiliated Phoenix Fund trustee or
director; provided that sales made to persons listed in (1) through (16) 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).
Combination Purchase Privilege. Purchases, either singly or in any
combination, of shares of the Fund or shares of any other Affiliated 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 Affiliated 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 Affiliated 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 Affiliated 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 Affiliated 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
14
<PAGE>
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 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.
For example, assume an investor purchased 100 Class B Shares at $10 per
share (at a cost of $1,000) and in the second year after purchase, the net
asset value per share has increased to $12 and, during such time, the investor
has acquired 10 additional Class B Shares through dividend reinvestment. If, at
such time the investor makes his first redemption of 50 Class B Shares
(proceeds of $600), 10 shares will not be subject to charge because they were
acquired through dividend reinvestment. With respect to the remaining 40
shares, the charge is applied only to the original cost of $10 per share and
not to the increase in net asset value of $2 per share. Therefore, $400 of the
$600 redemption proceeds will be charged at a rate of 4% (the applicable rate
in the second year after purchase) or $16.00.
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
Affiliated Phoenix Funds; (f) in connection with any direct rollover transfer
of shares from
15
<PAGE>
an established Affiliated Phoenix Fund qualified plan into a Affiliated 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 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.
16
<PAGE>
Shareholders participating in the Systematic Withdrawal Program must own
shares 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
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, Roth 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
Affiliated 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
Affiliated 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 Affiliated 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 Transfer Agent. 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 Affiliated Phoenix Fund has different investment
objectives and policies. You should read the prospectus of the Affiliated
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 Transfer Agent 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 Transfer Agent 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 Transfer
Agent 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 Transfer
Agent 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
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
17
<PAGE>
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, or an authorized agent. 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 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>
[Telephone
graphic] By Phone o Sales up to $50,000
(800) 243-1574 o Not available on most retirement accounts
o Requests received after 4PM will be executed
on the following business day
o Letter of instruction from the registered owner
[Letter
Graphic] In Writing o 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
o 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.
18
<PAGE>
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.
Redemption in Kind
To the extent consistent with state and federal law, the Fund may make
payment of the redemption price either in cash or in kind. However, the Fund
has elected to pay in cash all requests for redemption by any shareholder of
record, limited in respect to each shareholder during any 90-day period to the
lesser of $250,000 or 1% of the net asset value of the Fund at the beginning of
such period. This election has been made pursuant to Rule 18f-1 under the
Investment Company Act of 1940 and is irrevocable while the Rule is in effect
unless the Securities and Exchange Commission, by order, permits the withdrawal
thereof. In case of a redemption in kind, securities delivered in payment for
shares would be readily marketable and valued at the same value assigned to
them in computing the net asset value per share of the Fund. A shareholder
receiving such securities would incur brokerage costs when selling the
securities.
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 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.
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.
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.
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
19
<PAGE>
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 former 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 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.
Additional Inquiries
Inquiries and requests for the Statement of Additional Information, the
Annual Report to Shareholders and the Semiannual Report to Shareholders should
be directed to Equity Planning at (800) 243-4361 or 100 Bright Meadow
Boulevard, P.O. Box 2200, Enfield, Connecticut 06083-2200.
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. upon payment of the
prescribed fee.
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:
<TABLE>
<CAPTION>
Account Type Give Social Security Number or Tax Identification Number of
- ------------------------------------------------------------------------------------------------------
<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.
o A corporation
o Financial institution
o Section 501(a) exempt organization (IRA, Corporate Retirement Plan,
403(b), Keogh)
o United States or any agency or instrumentality thereof
o A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof
o International organization or any agency or instrumentality thereof
o Registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
o Real estate investment trust
o Common trust fund operated by a bank under section 584(a)
o An exempt charitable remainder trust, or a non-exempt trust described
in section 4947(a)(1)
o 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 6, 1998. 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 Boulevard,
P.O. Box 2200, Enfield, Connecticut 06083-2200.
Financial information relating to the Fund is contained in the Annual Report to
Shareholders for the year ended June 30, 1998 and is incorporated into the
Statement of Additional Information by reference.
[Recycle Logo] Printed on recycled paper using soybean ink
<PAGE>
Phoenix Funds BULK RATE MAIL
PO Box 2200 U.S. POSTAGE
Enfield CT 06083-2200 PAID
SPRINGFIELD, MA
PERMIT NO. 444
[PHOENIX LOGO] PHOENIX
INVESTMENT PARTNERS
PXP 691 (10/98)
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
101 Munson Street
Greenfield, MA 01301
Statement of Additional Information
October 6, 1998
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 6, 1998, 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
INVESTMENT OBJECTIVE AND POLICIES ............. 1
INVESTMENT RESTRICTIONS ....................... 1
PERFORMANCE INFORMATION ....................... 4
PORTFOLIO TRANSACTIONS AND BROKERAGE .......... 5
SERVICES OF THE ADVISER ....................... 6
NET ASSET VALUE ............................... 7
HOW TO BUY SHARES ............................. 8
INVESTOR ACCOUNT SERVICES ..................... 8
REDEMPTION OF SHARES .......................... 9
DIVIDENDS, DISTRIBUTIONS AND TAXES ............ 9
TAX SHELTERED RETIREMENT PLANS ................ 11
THE DISTRIBUTOR ............................... 11
DISTRIBUTION PLANS ............................ 12
TRUSTEES AND OFFICERS ......................... 13
OTHER INFORMATION ............................. 19
</TABLE>
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders: (800) 367-5877
TTY: (800) 243-1926
PXP 691B (10/98)
<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 former
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 other issuers (but the Fund may be
deemed to be an underwriter in connection with any acquisition 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.
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
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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, 1998, the average annual
total return of the Class A Shares was 25.16%, 18.53% and 9.76%, respectively.
For the one year ended June 30, 1998 and, since inception, July 15, 1994 for
Class B Shares, the average annual total return was 26.61% and 16.20%,
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, 1998 was 3,048%.
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, 1996, 1997, and 1998, brokerage
commissions paid by the Fund totalled $1,279,610, $1,136,406 and $911,734,
respectively. Brokerage commissions of $729,387 were paid during the last
fiscal year on portfolio transactions aggregating $325,528,828 and executed by
brokers who provided research and other statistical and factual information.
SERVICES OF THE ADVISER
Effective June 1, 1998, National Securities & Research Corporation
("National") assigned its investment advisory contract to Phoenix Investment
Counsel, Inc. ("PIC"). PIC now serves as adviser for the Fund. National and PIC
are both subsidiaries of Phoenix Investment Partners, Ltd. (formerly 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, Hartford, Connecticut, where
it is engaged in the insurance and investment business.
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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 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, 1996, 1997, and 1998 amounted to $1,037,386, $1,137,290 and
$1,278,505, 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.
Philip R. McLoughlin, a Trustee and officer of the Fund, is also a
director of the Adviser. Michael E. Haylon and William R. Moyer, officers of
the Fund, are also directors and officers of the Adviser. G. Jeffrey Bohne,
Nancy G. Curtiss, William E. Keen, III, Leonard J. Saltiel, Thomas N. Steenburg
and Pierre G. Trinque, officers of the Fund, are also officers of the Adviser.
NET ASSET VALUE
The net asset value per share of the Fund is determined as of the close of
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, Jr. 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 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
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 Trustees 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.
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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 Trustees 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 Trustees although the actual calculations may be made by
persons acting pursuant to the direction of the Trustees.
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.
The Fund has authorized one or more brokers to accept on its behalf
purchase and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Fund's behalf.
The Fund will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts
the order. Customer orders will be priced at the Fund's net asset value next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
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 the Fund may be exchanged for
shares of the same class of any other Affiliated Phoenix Fund 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
Affiliated 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 Affiliated 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 Affiliated 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.
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 Affiliated
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. Redemptions by Class B shareholders will be subject to the
applicable deferred sales charge, if any. See the Fund's current Prospectus for
further information.
The Fund has authorized one or more brokers to accept on its behalf
purchase and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Fund's behalf.
The Fund will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts
the order. Customer orders will be priced at the Fund's net asset value next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
A shareholder should contact his/her broker/dealer if he/she wishes to
transfer shares from an existing broker/dealer street name account to a street
name account with another broker/dealer. The Fund has no specific procedures
governing such account transfers.
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 30 days to make an additional investment in an amount which will
increase the value of the account to at least $200.
By Mail
Shareholders may redeem shares by making written request, executed in the
full name of the account, directly to Phoenix Funds c/o State Street Bank and
Trust Company, P.O. Box 8301, Boston, MA 02266-8301. However, when certificates
for shares are in the possession of the shareholder, they must be mailed or
presented, duly endorsed in the full name of the account, with a written
request to Equity Planning that the Fund redeem the shares. 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
9
<PAGE>
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 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
and payable to shareholders of record on a specified date in such a month 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
10
<PAGE>
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 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 Affiliated Phoenix Funds may be offered in
connection with employer-sponsored 401(k) plans. PIC and its affiliates may
provide administrative services to these plans and to their participants, in
addition to the services that PIC 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 PIC. Shares of the Fund may be purchased
through investment dealers who have sales agreements with the Distributor.
During the fiscal years 1996, 1997, and 1998, purchasers of shares of the Fund
paid aggregate sales charges of $132,820, $111,630 and $115,136, respectively,
of which the Distributor received net commissions of $21,894, $32,104 and
$36,903, respectively, for its services, the balance being paid to dealers.
The Underwriting 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 Plans or in any related agreements. The Underwriting 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 Distribution Plans 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
11
<PAGE>
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. For
its services, Equity Planning will be paid a fee equal to the sum of (1) the
documented cost of fund accounting and related services provided by PFPC, Inc.,
as subagent, plus (2) the documented cost to Equity Planning to provide
financial reporting and tax services and to oversee the subagent's performance.
The current fee schedule of PFPC, Inc. is based upon the average of the
aggregate daily net asset values of the Fund, at the following incremental
annual rates.
<TABLE>
<S> <C>
First $200 million .085%
$200 million to $400 million .05 %
$400 million to $600 million .03 %
$600 million to $800 million .02 %
$800 million to $1 billion .015%
Greater than $1 billion .0125%
</TABLE>
Percentage rates are applied to the aggregate daily net asset values of
the Fund. PFPC, Inc. also charges minimum fees and additional fees for each
additional class of fund shares. Equity Planning retains PFPC, Inc. as subagent
for each of the funds for which Equity Planning serves as administrative agent.
PFPC, Inc. agreed to a modified fee structure and waived certain charges.
Because PFPC, Inc.'s arrangement would have favored smaller funds over larger
funds, Equity Planning reallocates PFPC, Inc.'s overall asset-based charges
among all funds for which it serves as administrative agent on the basis of the
relative net assets of each fund. As a result, the PFPC, Inc. charges to the
Fund are expected to be slightly less than the amount that would be found
through direct application of the table illustrated above. For its services
during the Fund's fiscal year ended June 30, 1998, Equity Planning received
$97,030.
DISTRIBUTION PLANS
The Fund has adopted separate amended and restated 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 activities intended to promote the sale of shares of each class
of shares of the Fund and to pay for the furnishing of shareholder services.
For the fiscal year 1999, 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 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 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 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
12
<PAGE>
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, 1998 the Fund paid Rule 12b-1 Fees in
the amount of $494,443 of which the Distributor received $196,013, W.S.
Griffith & Co., an affiliate, received $13,032 and unaffiliated broker-dealers
received $285,398. The Rule 12b-1 payments were used for (1) compensation to
dealers ($353,361), (2) compensation to sales personnel ($172,649), (3)
advertising ($88,808), (4) service costs ($44,327), (5) printing and mailing of
prospectuses to other than current shareholders ($11,871) and (6) other
($35,251).
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 provide that while they are 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.
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>
Robert Chesek (64) 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).
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- --------------------- -------------- -----------------------
<S> <C> <C>
E. Virgil Conway (69) 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). Member, Audit Committee of the City of New York
(1981-1996). Advisory Director, Blackrock Fannie Mae
Mortgage Securities Fund (1989-1996). Member (1990-1995),
Chairman (1992-1995), Financial Accounting Standards
Advisory Council. Director/Trustee, the National Affiliated
Investment Companies (until 1993).
Harry Dalzell-Payne (69) 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.
*Francis E. Jeffries (68) Trustee Director/Trustee, Phoenix Funds (1995-present). Trustee,
6585 Nicholas Blvd. Phoenix-Aberdeen Series Fund 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 Investment Partners, Ltd.
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- --------------------- -------------- -----------------------
<S> <C> <C>
Leroy Keith, Jr. (59) 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
Savannah, GA 30750 Evergreen International Fund, Inc. (1989-present). Trustee,
Evergreen Liquid Trust, Evergreen Tax Exempt Trust,
Evergreen 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).
*Philip R. McLoughlin (51) Trustee and Chairman (1997-present), Director (1995-present), Vice
President Chairman (1995-1997) and Chief Executive Officer (1995-
present), Phoenix Investment Partners, Ltd. 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,
PHL Associates, Inc. (1995-present). Director and President,
Phoenix Securities Group, Inc. (1993-1995). Director (1992-
present) and President (1992-1994), W.S. Griffith & Co., Inc.
Director/Trustee, the National Affiliated Investment Companies
(until 1993).
**Everett L. Morris (70) 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).
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- --------------------- -------------- -----------------------
<S> <C> <C>
*James M. Oates (52) Trustee Chairman, IBEX Capital Markets LLC (1997-present).
Managing Director Managing Director, Wydown Group (1994-present). Director,
The Wydown Group Phoenix Investment Partners, Ltd. (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, AIB
Boston, MA 02109 Govett Funds. (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), Stifel Financial (1996-present) and Command
Systems, Inc. (1998-present). Vice Chairman, Massachusetts
Housing Partnership (1992-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 (56) Trustee Director (1986-present), President (1993-present) and
Phoenix Investment Executive Vice President (1992-1993), Phoenix Investment
Partners, Ltd. Partners, Ltd. 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).
**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), Landauer, Inc. (medical
services) (1970-present),Tech Ops./Sevcon, Inc. (electronic
controllers) (1987-present), and Mark IV Industries
(diversified manufacturer) (1985-present). Member, Directors
Advisory Counsel, Phoenix Home Life Mutual Insurance
Company (1998-present). Director, Key Energy Group (oil rig
service) (1988-1994) and Phoenix Home Life Mutual
Insurance Company (1972-1998). Director/Trustee, the
National Affiliated Investment Companies (until 1993).
Richard E. Segerson (52) 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. (67) 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), Burroughs Wellcome Fund (1996-present),
HPSC Inc. (1995-present), and Compuware (1996-present).
Visiting Professor, University of Virginia (1997-present).
Director, Duty Free International, Inc. (1997) Chairman,
Dresing, Lierman, Weicker (1995-1996). Governor of the State
of Connecticut (1991-1995).
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- --------------------- -------------- -----------------------
<S> <C> <C>
Michael E. Haylon (40) Executive Director and Executive Vice President--Investments, Phoenix
Vice Investment Partners, Ltd. (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).
John F. Sharry (46) Executive Managing Director, Retail, Phoenix Equity Planning
Vice Corporation (1995-present). Executive Vice President, Phoenix
President Funds and Phoenix-Aberdeen Series Fund (1998-present).
Managing Director, Director and National Sales Manager
(December 1993-November 1995), Senior Vice President,
Director and National Sales Manager (December 1992-
December 1993), Putnam Funds.
William E. Keen, III (35) Vice Assistant Vice President (1996-present), Director of Mutual
100 Bright Meadow Blvd. President Fund Compliance (1995-1996), Phoenix Equity Planning
P.O. Box 2200 Corporation. Vice President, Phoenix Funds (1996-present),
Enfield, CT 06083-2200 Phoenix Duff & Phelps Institutional Mutual Funds (1996-
present), and 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).
William R. Moyer (54) Vice Senior Vice President and Chief Financial Officer, Phoenix
100 Bright Meadow Blvd. President Investment Partners, Ltd. (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 and 1998-present),
Phoenix Equity Planning Corporation. Director (1998-present),
Senior Vice President (1990-present), Chief Financial Officer
(1996-present) and Treasurer (1994-present), Phoenix
Investment Counsel, Inc. Director (1998-present), 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). Vice President, Investment Products Finance,
Phoenix Home Life Mutual Insurance Company (1990-1995).
Senior Vice President and Chief Financial Officer, W. S.
Griffith & Co., Inc. (1992-1995) and Townsend Financial
Advisers, Inc. (1993-1995). Vice President, the National
Affiliated Investment Companies (until 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>
Leonard J. Saltiel (44) 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).
Pierre G. Trinque (42) Vice Managing Director, Large Cap Growth Team (1997-present),
President Managing Direcor, Director of Equity Research (1996-1997),
Senior Research Analyst (1996) and Associate Portfolio
Manager--Institutional Funds (1992-1995), Phoenix
Investment Counsel, Inc. Vice President, The Phoenix Edge
Series Fund (1997-present), Phoenix Series Fund (1997-
present), Phoenix Duff & Phelps Institutional Mutual Funds
(1997-present), Phoenix Multi-Portfolio Fund (1998-present)
and Phoenix Worldwide Opportunities Fund (1998-present).
Nancy G. Curtiss (45) 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 (50) 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. Secretary/Clerk, Phoenix Funds (1993-
present), Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present) and Phoenix-Aberdeen Series Fund (1996-
present).
</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. Morris and
Roth will retire from the Board of Trustees effective January 1, 1999.
For services rendered to the Fund for the fiscal year ended June 30, 1998,
the Trustees received aggregate remuneration of $19,397. For service on the
Boards of Directors/Trustees of the Phoenix Funds, each Trustee who is not a
full-time employee of 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
$2,000 and $2,000 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.
18
<PAGE>
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 (14 Funds)
Name From Fund of Fund Expenses Upon Retirement Paid to Directors
- ------------------------ -------------- --------------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Robert Chesek $ 1,495 $54,750
E. Virgil Conway+ $ 2,044 $75,000
Harry Dalzell-Payne+ $ 1,819 $67,000
Francis E. Jeffries $ 1,525* $56,250
Leroy Keith, Jr. $ 1,553 None None $57,250
Philip R. McLoughlin+ $ 0 for any for any $ 0
Everett L. Morris+ $ 1,790* $66,000
James M. Oates+ $ 1,790 Trustee Trustee $66,000
Calvin J. Pedersen $ 0 $ 0
Herbert Roth, Jr.+ $ 2,102* $77,000
Richard E. Segerson $ 1,808 $66,250
Lowell P. Weicker, Jr. $ 1,808 $66,250
</TABLE>
- ---------
*This compensation (and the earnings thereon) will be deferred pursuant to the
Directors' Deferred Compensation Plan. At July 1, 1998, the total amount of
deferred compensation (including interest and other accumulation earned on the
original amounts deferred) accrued for Messrs. Jeffries, Morris and Roth was
$99,645, $141,647 and $142,534, 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 September 10, 1998, the Trustees and officers of the Fund beneficially
owned less than 1% of the outstanding shares of the Fund.
Principal Shareholders
The following table sets forth information as of September 10, 1998 with
respect to each person who owns of record or is known by the Fund to own of
record or beneficially own 5% or more of any class of the Fund's equity
securities.
<TABLE>
<CAPTION>
Percent
Name of shareholder Class Number of shares of Class
------------------- ------- ---------------- --------
<S> <C> <C> <C>
Trustees of Phoenix Savings & Investment Plan Class A 813,147.210 5.57%
100 Bright Meadow Blvd.
Enfield, CT 06082
</TABLE>
OTHER INFORMATION
Independent Accountants
PricewaterhouseCoopers 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, 100 Bright Meadow Boulevard, P.O.
Box 2200, Enfield, CT 06083-2200, acts as Transfer Agent for the Fund (the
"Transfer Agent"). As compensation, Equity Planning receives a fee equivalent
to $14.95 for each designated shareholder account plus out-of-pocket expenses.
Transfer Agent fees are also utilized to offset costs and fees paid to
subtransfer agents employed by Equity Planning. State Street Bank and Trust
Company serves as a subtransfer agent pursuant to a Subtransfer Agency
Agreement.
19
<PAGE>
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, 1998,
appearing in the Fund's 1998 Annual Report to Shareholders, are incorporated
herein by reference.
20
<PAGE>
Phoenix Worldwide Opportunities Fund
- --------------------------------------------------------
INVESTMENTS AT JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
COMMON STOCKS--29.7%
Airtouch Communications, Inc. (Telecommunications (Cellular/
Wireless)) (b).................................................... 27,600 $ 1,612,875
AT&T Corp. (Telecommunications (Long Distance))..................... 26,800 1,530,950
BMC Software, Inc. (Computers (Software & Services)) (b)............ 15,600 810,225
Boeing Co. (Aerospace/Defense)...................................... 11,900 530,294
Bristol-Myers Squibb Co. (Health Care (Diversified))................ 9,600 1,103,400
Cardinal Health, Inc. (Healthcare (Diversified)).................... 6,400 600,000
Computer Associates International, Inc. (Computers (Software &
Services)) (c).................................................... 18,500 1,027,906
Compuware Corp. (Computers (Software & Services)) (b)............... 20,400 1,042,950
CVS Corp. (Retail (Drug Stores)).................................... 44,400 1,728,825
Diamond Offshore Drilling, Inc. (Oil & Gas (Drilling &
Equipment))....................................................... 4,100 164,000
FDX Corp. (Air Freight) (b)......................................... 21,000 1,317,750
FNMA (Financial (Diversified))...................................... 11,700 710,775
Gannett Co., Inc. (Publishing (Newspapers))......................... 23,400 1,662,863
General Electric Co. (Electrical Equipment)......................... 18,000 1,638,000
Hartford Life, Inc. Class A (Insurance (Life/ Health)).............. 17,000 967,937
HBO & Co. (Computers (Software & Services))......................... 34,800 1,226,700
HEALTHSOUTH Corp. (Health Care (Long Term Care)) (b)................ 27,600 736,575
Home Depot, Inc. (Retail (Building Supplies))....................... 34,400 2,857,350
Household International, Inc. (Consumer Finance).................... 7,900 393,025
Intel Corp. (Electronics (Semiconductors)).......................... 12,000 889,500
International Business Machines Corp. (Computers (Hardware))........ 33,500 3,846,219
Liberty Media Group (Broadcasting (Television, Radio & Cable))
(b)............................................................... 78,000 3,027,375
Medtronic, Inc. (Health Care (Medical Products & Supplies))......... 15,200 969,000
Mellon Bank Corp. (Banks (Major Regional)).......................... 6,100 424,712
Microsoft Corp. (Computers (Software & Services)) (b)............... 3,400 368,475
Monsanto Co. (Biotechnology)........................................ 16,300 910,762
New York Times Co. Class A (Publishing (Newspapers))................ 21,500 1,703,875
Norwest Corp. (Banks (Major Regional)).............................. 34,500 1,289,437
Omnicom Group, Inc. (Services (Advertising/ Marketing))............. 17,600 877,800
Pfizer, Inc. (Healthcare (Drugs--Major Pharmaceuticals))............ 11,600 1,260,775
Procter & Gamble Co. (Personal Care)................................ 6,100 555,481
Rite Aid Corp. (Retail (Drug Stores))............................... 29,700 1,115,606
Safeway, Inc. (Retail (Food Chains)) (b)............................ 34,500 1,403,719
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
COMMON STOCKS--CONTINUED
Schering-Plough Corp. (Health Care (Drugs--Major
Pharmaceuticals))................................................. 13,200 $ 1,209,450
Schlumberger Ltd. (Oil & Gas (Drilling & Equipment))................ 12,300 840,244
Solectron Corp. (Electronics (Component Distribution)) (b).......... 32,000 1,346,000
Southtrust Corp. (Banks (Major Regional))........................... 60,000 2,610,000
Sprint Corp. (Telecommunications (Long Distance))................... 24,300 1,713,150
Staples, Inc. (Retail (Specialty)) (b).............................. 27,300 789,994
Tandy Corp. (Retail (Computers & Electronics))...................... 5,500 291,844
Thermo Electron Corp. (Manufacturing (Diversified)) (b)............. 1,500 51,281
Travelers Group, Inc. (Insurance (Multi-Line))...................... 10,500 636,563
Tyco International Ltd. (Manufacturing (Diversified))............... 16,900 1,064,700
U.S. Bancorp (Banks (Major Regional))............................... 22,400 963,200
USA Waste Services, Inc. (Waste Management) (b)..................... 20,400 1,007,250
Warner-Lambert Co. (Healthcare (Diversified))....................... 32,700 2,268,563
Washington Post Co. Class B (Publishing (Newspapers))............... 2,900 1,670,400
Watson Pharmaceuticals, Inc. (Healthcare (Diversified)) (b)......... 18,000 840,375
------------
57,608,150
------------
TOTAL COMMON STOCKS
(Identified cost $50,022,317)................................................... 57,608,150
------------
FOREIGN COMMON STOCKS--66.2%
AUSTRALIA--0.5%
Westpac Banking Corporation Ltd. (Banks (Major Regional))........... 153,000 933,239
------------
BELGIUM--0.7%
KBC Bancassurance Holding NV (Banks (Major Regional))............... 16,000 1,431,873
------------
BRAZIL--0.6%
Telecomunicacoes Brasileiras SA Sponsored ADR (Telephone)........... 10,600 1,157,388
------------
CANADA--0.8%
Bank of Montreal (Banks (Money Center))............................. 26,800 1,476,192
------------
FINLAND--2.2%
Merita PLC Class A (Banks (Major Regional))......................... 72,800 480,337
Raisio Group PLC (Foods)............................................ 149,000 2,704,904
Tieto Corp. Class B (Computers (Software & Services))............... 13,800 1,048,869
------------
4,234,110
------------
</TABLE>
4 See Notes to Financial Statements
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
- - ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
FRANCE--9.8%
Alcatel Alsthom (Telecommunications (Cellular/Wireless))............ 15,200 $ 3,094,791
Alstom (Machinery (General Industrial)) (b)......................... 45,500 1,497,594
Atos SA (Computers (Software & Services)) (b)....................... 4,000 959,307
AXA SA (Insurance (Multi-Line))..................................... 22,700 2,553,080
Banque National de Paris (Banks (Money Center))..................... 42,300 3,456,185
Coflexip SA (Oil & Gas (Field Services))............................ 8,000 979,155
Galeries Lafayette (Retail (General Merchandise))................... 1,360 1,356,394
Pinault-Printemps-Redoute SA (Retail (General Merchandise))......... 1,230 1,029,403
Rhodia SA (Chemicals (Diversified)) (b)............................. 7,000 195,202
Scor SA (Insurance (Multi-Line)).................................... 7,500 475,725
Societe Generale Class A (Banks (Money Center))..................... 16,400 3,409,642
------------
19,006,478
------------
GERMANY--4.3%
Adidas-Salomon AG (Footwear)........................................ 5,950 1,036,700
Bayerische Motoren Werke AG (Automobiles)........................... 1,200 1,213,276
Bayerische Motoren Werke AG-New (Automobiles) (b)................... 360 358,997
Deutsche Lufthansa AG (Airlines).................................... 93,100 2,344,224
Mannesmann AG (Machinery (General Industrial))...................... 17,000 1,747,062
Muenchener Rueckversicherungs-Gesellschaft AG (Insurance
(Life/Health)).................................................... 3,500 1,737,367
------------
8,437,626
------------
HONG KONG--0.0%
Henderson China Holding Ltd. (Real Estate).......................... 768 300
------------
HUNGARY--0.6%
Magyar Tavkozlesi Rt. Unsponsored ADR (Telecommunications (Long
Distance))........................................................ 36,600 1,077,413
------------
IRELAND--0.4%
Elan Corp. PLC Sponsored ADR (Health Care (Medical Products &
Supplies)) (b).................................................... 11,670 750,527
------------
ITALY--6.4%
Banca Fideuram SPA (Financial (Diversified))........................ 140,400 800,514
Banca Popolare di Brescia (Financial (Diversified))................. 52,000 982,926
Ericsson SPA (Communications Equipment)............................. 25,000 1,480,971
Istituto Mobiliare Italiano SPA (Diversified Miscellaneous)......... 119,400 1,880,791
La Fondiaria Assicurazioni (Insurance (Multi-Line))................. 147,800 848,943
Mediaset SPA (Publishing)........................................... 129,900 829,071
Mediolanum SPA (Insurance (Multi-Line))............................. 46,000 1,459,537
Telecom Italia Mobile di Risp SPA (Communications Equipment)........ 235,000 793,227
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
ITALY--CONTINUED
Telecom Italia Mobile SPA (Communications Equipment)................ 309,000 $ 1,889,584
Telecom Italia SPA (Communications Equipment)....................... 209,500 1,542,183
------------
12,507,747
------------
MEXICO--1.8%
Cemex SA de C.V. Class B (Building Materials)....................... 112,785 497,025
Coca-Cola Femsa SA Sponsored ADR (Beverages (Non-Alcoholic)) (c).... 64,800 1,125,900
Grupo Financiero Bancomer SA de C.V. Class B (Banks (Major
Regional))........................................................ 930,000 346,704
Telefonos de Mexico SA Sponsored ADR Class L (Telephone)............ 33,500 1,610,094
------------
3,579,723
------------
NETHERLANDS--6.6%
AKZO Nobel NV (Chemicals)........................................... 9,500 2,111,817
Getronics NV (Computers (Software & Services))...................... 28,600 1,483,271
IHC Caland NV (Oil & Gas (Drilling & Equipment)).................... 21,800 1,227,055
ING Groep NV (Financial (Diversified)).............................. 38,000 2,488,226
Philips Electronics NV NY Reg. Shares (Electrical Equipment)........ 16,100 1,368,500
Vedior NV (Professional Services)................................... 38,978 1,101,766
Vendex International NV (Retail (General Merchandise)).............. 39,500 1,485,459
VNU-Verenigd Bezit NV (Publishing).................................. 42,500 1,543,958
------------
12,810,052
------------
NORWAY--0.8%
Merkantildata ASA (Computers (Software & Services))................. 121,000 1,529,542
------------
PERU--0.3%
Telefonica del Peru SA Sponsored ADR (Telephone).................... 31,000 633,563
------------
POLAND--0.2%
Amica Wronki SA (Retail (General Merchandise)) (b).................. 29,094 288,686
------------
PORTUGAL--2.1%
Brisa-Auto Estradas de Portugal SA (Transportation (Truckers))...... 2,500 106,919
Portugal Telecom SA (Communications Equipment)...................... 35,200 1,865,569
Telecel-Comunicacoes Pessoais SA (Telecommunications
(Cellular/Wireless)).............................................. 12,000 2,130,792
------------
4,103,280
------------
SPAIN--3.8%
Banco Popular Espanol SA (Banks (Major Regional))................... 25,600 2,187,262
Banco Santander SA (Banks (Money Center))........................... 80,800 2,071,592
</TABLE>
See Notes to Financial Statements 5
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
- - ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
SPAIN--CONTINUED
Telefonica SA (Telephone)........................................... 67,418 $ 3,122,304
------------
7,381,158
------------
SWEDEN--1.6%
ForeningsSparbanken AB (Banks (Major Regional))..................... 23,300 701,196
Mandamus AB (Real Estate Development) (b)........................... 1,165 7,304
Skandia Forsakrings AB (Insurance (Multi-Line))..................... 161,500 2,308,604
------------
3,017,104
------------
SWITZERLAND--4.6%
Novartis AG Registered Shares (Health Care (Drugs-Major
Pharmaceuticals))................................................. 1,990 3,311,397
Schweizerische Lebensversicherungs-und Retenanstalt (Insurance
(Life/Health)).................................................... 2,030 1,718,422
Schweizerische Rueckersicherungs-Gesellschaft Registered (Insurance
(Life/ Health))................................................... 100 252,899
Zurich Verschierungs-Gesellchaft Registered Shares (Insurance
(Multi-Line))..................................................... 5,820 3,714,216
------------
8,996,934
------------
UNITED KINGDOM--18.1%
British Aerospace PLC (Aerospace/Defense)........................... 438,800 3,367,838
Cable & Wireless Communications PLC (Telecommunications (Cellular/
Wireless)) (b).................................................... 283,900 2,872,916
Compass Group PLC (Foods)........................................... 216,000 2,486,735
GKN PLC (Auto Parts & Equipment).................................... 150,000 1,899,590
Granada Group PLC (Leisure Time (Products))......................... 43,000 792,071
Kingfisher PLC (Retail (General Merchandise))....................... 44,600 722,572
Legal & General Group PLC (Financial (Diversified))................. 273,000 2,910,652
Lloyds TSB Group PLC (Financial (Diversified))...................... 253,800 3,544,409
Misys PLC (Computers (Software & Services))......................... 32,157 1,829,066
National Express Group PLC (Railroads).............................. 22,400 361,972
Next PLC (Retail (General Merchandise))............................. 185,500 1,597,057
Norwich Union PLC (Insurance (Life/ Health))........................ 120,000 873,961
Rentokil Initial PLC (Services (Commercial & Consumer))............. 330,000 2,375,863
SEMA Group PLC (Telecommunications (Cellular/Wireless))............. 47,200 561,117
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
UNITED KINGDOM--CONTINUED
Siebe PLC (Electrical Equipment).................................... 66,000 $ 1,320,352
SmithKline Beecham PLC (Health Care (Drugs (Major
Pharmaceuticals))................................................. 62,120 756,107
Stagecoach Holdings PLC (Transportation (Services))................. 95,200 2,052,231
Vodafone Group PLC (Telecommunications (Cellular/Wireless))......... 206,900 2,627,071
Williams PLC (Manufacturing (Diversified)).......................... 190,500 1,231,667
WPP Group PLC (Services (Advertising/ Marketing))................... 148,500 977,463
------------
35,160,710
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $88,683,231)................................................... 128,513,645
------------
FOREIGN PREFERRED STOCKS--3.3%
GERMANY--3.3%
SAP AG Vorzug Pfd. (Computers (Software & Services))................ 9,400 6,379,395
------------
TOTAL FOREIGN PREFERRED STOCKS
(Identified cost $2,286,840).................................................... 6,379,395
------------
TOTAL LONG-TERM INVESTMENTS --99.2%
(Identified cost $140,992,388).................................................. 192,501,190
------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000)
-------- --------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--1.9%
COMMERCIAL PAPER--1.9%
Greenwich Funding Corp.
6.50%, 7/1/98........................................... A-1+ $ 3,005 3,005,000
Asset Securitization Corp.
5.67%, 7/7/98........................................... A-1+ 285 284,731
Enterprise Funding Corp.
5.54%, 7/15/98.......................................... A-1 469 467,989
------------
3,757,720
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $3,757,720).................................................. 3,757,720
------------
TOTAL INVESTMENTS--101.1%
(Identified cost $144,750,108)................................................ 196,258,910(a)
Cash and receivables, less liabilities--(1.1%)................................ (2,215,559)
------------
NET ASSETS--100.0%.................................................... $194,043,351
------------
------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $53,055,631 and gross
depreciation of $2,098,446 for federal income tax purposes. At June 30,
1998, the aggregate cost of securities for federal income tax purposes was
$145,301,725.
(b) Non-income producing.
(c) Segregated as collateral for forward currency contracts.
6 See Notes to Financial Statements
<PAGE>
Phoenix Worldwide Opportunities Fund
- - ------------------------------------------------------
INDUSTRY DIVERSIFICATION
AS A PERCENTAGE OF TOTAL VALUE OF
TOTAL LONG-TERM INVESTMENTS
(UNAUDITED)
<TABLE>
<S> <C>
Aerospace/Defense................................. 2.0%
Air Freight....................................... 0.7
Airlines.......................................... 1.2
Auto Parts & Equipment............................ 1.0
Automobiles....................................... 0.8
Banks (Major Regional)............................ 5.9
Banks (Money Center).............................. 5.4
Beverages (Non-Alcoholic)......................... 0.6
Biotechnology..................................... 0.5
Broadcasting (Television, Radio & Cable).......... 1.6
Building Materials................................ 0.3
Chemicals......................................... 1.1
Chemicals (Diversified)........................... 0.1
Communications Equipment.......................... 3.9
Computers (Software & Services)................... 9.2
Computers (Hardware).............................. 2.0
Consumer Finance.................................. 0.2
Diversified Miscellaneous......................... 1.0
Electrical Equipment.............................. 2.2
Electronics (Component Distribution).............. 0.7
Electronics (Semiconductors)...................... 0.5
Financial (Diversified)........................... 5.9
Foods............................................. 2.7
Footwear.......................................... 0.5
Health Care (Diversified)......................... 2.5
Health Care (Drugs--Major Pharmaceuticals)........ 3.4
Health Care (Long Term Care)...................... 0.4
Health Care (Medical Products & Supplies)......... 0.9
Insurance (Life/Health)........................... 2.9
Insurance (Multi-Line)............................ 6.2%
Leisure Time (Products)........................... 0.4
Machinery (General Industrial).................... 1.7
Manufacturing (Diversified)....................... 1.2
Oil & Gas (Drilling & Equipment).................. 1.2
Oil & Gas (Field Services)........................ 0.5
Personal Care..................................... 0.3
Professional Services............................. 0.6
Publishing........................................ 1.2
Publishing (Newspapers)........................... 2.6
Railroads......................................... 0.2
Real Estate Development........................... 0.0
Retail (Building Supplies)........................ 1.5
Retail (Computers & Electronics).................. 0.2
Retail (Drug Stores).............................. 1.5
Retail (Food Chains).............................. 0.7
Retail (General Merchandise)...................... 3.4
Retail (Specialty)................................ 0.4
Services (Advertising/Marketing).................. 1.0
Services (Commercial & Consumer).................. 1.2
Telecommunications (Long Distance)................ 2.2
Telecommunications (Cellular/Wireless)............ 6.6
Telephone......................................... 3.4
Transportation (Services)......................... 1.1
Truckers.......................................... 0.1
Waste Management.................................. 0.5
-----
100.0%
-----
-----
</TABLE>
See Notes to Financial Statements 7
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
- - ------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $144,750,108) $ 196,258,910
Cash 12,249
Foreign currency at value (Identified cost $52) 45
Receivables
Investment securities sold 594,734
Dividends and interest 243,512
Fund shares sold 118,305
Tax reclaim 141,902
--------------
Total assets 197,369,657
--------------
LIABILITIES
Payables
Investment securities purchased 2,024,086
Fund shares repurchased 660,216
Closed foreign currency contracts 270,349
Investment advisory fee 117,311
Transfer agent fee 73,087
Financial agent fee 14,907
Distribution fee 45,566
Trustees' fee 2,874
Accrued expenses 117,910
--------------
Total liabilities 3,326,306
--------------
NET ASSETS $ 194,043,351
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 131,259,597
Distributions in excess of net investment income (420,414)
Accumulated net realized gain 11,697,612
Net unrealized appreciation 51,506,556
--------------
NET ASSETS $ 194,043,351
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $183,188,428) 14,768,288
Net asset value per share $12.40
Offering price per share
$12.40/(1-4.75%) $13.02
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $10,854,923) 901,909
Net asset value and offering price per share $12.04
</TABLE>
STATEMENT OF OPERATIONS
JUNE 30, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 2,525,050
Interest 436,712
Foreign taxes withheld (197,776)
-------------
Total investment income 2,763,986
-------------
EXPENSES
Investment advisory fee 1,278,505
Distribution fee--Class A 403,413
Distribution fee--Class B 91,030
Financial agent fee 97,030
Transfer agent 328,305
Custodian 160,845
Professional 39,466
Registration 33,903
Printing 21,878
Trustees 15,271
Miscellaneous 12,477
-------------
Total expenses 2,482,123
-------------
NET INVESTMENT INCOME 281,863
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 17,923,154
Net realized loss on foreign currency transactions (2,049,704)
Net change in unrealized appreciation (depreciation) on
investments 31,381,926
Net change in unrealized appreciation (depreciation) on
foreign currency and foreign currency transactions (86,223)
-------------
NET GAIN ON INVESTMENTS 47,169,153
-------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ 47,451,016
-------------
-------------
</TABLE>
8 See Notes to Financial Statements
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
- - ------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
JUNE 30, 1998 JUNE 30, 1997
-------------- --------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 281,863 $ 465,980
Net realized gain 15,873,450 15,784,753
Net change in unrealized appreciation 31,295,703 3,210,431
-------------- --------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 47,451,016 19,461,164
-------------- --------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A (1,559,972) (547,706)
Net investment income--Class B (82,470) (3,491)
Net realized capital gains--Class A (16,213,603) (10,600,864)
Net realized capital gains--Class B (923,384) (464,200)
In excess of net investment income--Class A (334,226) (36,512)
In excess of net investment income--Class B (17,669) (233)
-------------- --------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (19,131,324) (11,653,006)
-------------- --------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (1,700,588 and 7,287,155
shares, respectively) 19,328,353 73,684,613
Net asset value of shares issued from reinvestment of
distributions
(1,716,156 and 1,017,922 shares, respectively) 16,423,613 9,812,762
Cost of shares repurchased (2,883,240 and 8,259,993
shares, respectively) (32,460,031) (83,959,118)
-------------- --------------
Total 3,291,935 (461,743)
-------------- --------------
CLASS B
Proceeds from sales of shares (234,656 and 294,976 shares,
respectively) 2,624,751 2,922,714
Net asset value of shares issued from reinvestment of
distributions (100,820 and 40,165 shares, respectively) 939,638 381,165
Cost of shares repurchased (232,300 and 99,485 shares,
respectively) (2,549,881) (994,110)
-------------- --------------
Total 1,014,508 2,309,769
-------------- --------------
INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 4,306,443 1,848,026
-------------- --------------
NET INCREASE IN NET ASSETS 32,626,135 9,656,184
NET ASSETS
Beginning of period 161,417,216 151,761,032
-------------- --------------
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS OF NET
INVESTMENT INCOME AND UNDISTRIBUTED NET INVESTMENT
INCOME OF ($420,414) AND $1,360,579, RESPECTIVELY) $194,043,351 $161,417,216
-------------- --------------
-------------- --------------
</TABLE>
See Notes to Financial Statements 9
<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,
1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.75 $ 10.29 $ 9.04 $ 10.17 $ 8.00
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) 0.02 0.03(1) (0.02)(1) 0.01(1) 0.01
Net realized and unrealized gain 2.97 1.25 1.87 0.56 2.19
--------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 2.99 1.28 1.85 0.57 2.20
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.13) (0.04) -- -- (0.03)
Dividends from net realized gains (1.20) (0.78) (0.60) (1.37) --
In excess of net investment income (0.01) -- -- -- --
In excess of net realized gains -- -- -- (0.33) --
--------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (1.34) (0.82) (0.60) (1.70) (0.03)
--------- --------- --------- --------- ---------
Change in net asset value 1.65 0.46 1.25 (1.13) 2.17
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 12.40 $ 10.75 $ 10.29 $ 9.04 $ 10.17
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return(2) 31.45% 13.40% 21.39% 6.53% 27.46%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $183,188 $153,005 $146,052 $126,481 $118,707
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.42% 1.53% 1.60% 1.80% 1.50%
Net investment income (loss) 0.21% 0.34% (0.19)% 0.16% 0.09%
Portfolio turnover 156% 234% 245% 277% 259%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------
FROM
INCEPTION
7/15/94
YEAR ENDED JUNE 30, TO
1998 1997 1996 06/30/95
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.53 $ 10.14 $ 8.98 $ 10.40
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) (0.06) (0.03)(1) (0.08)(1) (0.02)(1)
Net realized and unrealized gain 2.90 1.21 1.84 0.30
--------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 2.84 1.18 1.76 0.28
--------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.11) (0.01) -- --
Dividends from net realized gains (1.20) (0.78) (0.60) (1.37)
In excess of net investment income (0.02) -- -- --
In excess of net realized gains -- -- -- (0.33)
--------- --------- --------- ---------
TOTAL DISTRIBUTIONS (1.33) (0.79) (0.60) (1.70)
--------- --------- --------- ---------
Change in net asset value 1.51 0.39 1.16 (1.42)
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 12.04 $ 10.53 $ 10.14 $ 8.98
--------- --------- --------- ---------
--------- --------- --------- ---------
Total return(2) 30.61% 12.46% 20.50% 3.54%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $10,855 $8,412 $5,709 $ 2,849
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.17% 2.29% 2.34% 2.61%(4)
Net investment income (loss) (0.54)% (0.35)% (0.86)% (0.33)%(4)
Portfolio turnover 156% 234% 245% 277%
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales charges are not reflected in the total return calculation.
(3) Not annualized.
(4) Annualized.
(5) 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.
10 See Notes to Financial Statements
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
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 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
Effective June 1, 1998, National Securities and Research Corporation assigned
its investment advisory agreement to Phoenix Investment Counsel, Inc. ("PIC"),
both an indirect majority-owned subsidiary of Phoenix Home Life Mutual Insurance
Company
11
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 (CONTINUED)
("PHL"). PIC 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 $9,838 for Class A shares and deferred sales
charges of $27,065 for Class B shares for the year ended June 30, 1998. 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, 1998, approximately
$196,013 was retained by the Distributor, $285,398 was paid to unaffiliated
participants and $13,032 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 through May 31, 1998, at an annual rate of
0.005% 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 applied. Effective June 1, 1998, PEPCO
receives a financial agent fee equal to the sum of (1) the documented cost of
fund accounting and related services provided by PFPC, Inc. (subagent to PEPCO),
plus (2) the documented cost to PEPCO to provide financial reporting, tax
services and oversight of subagent's performance. The current fee schedule of
PFPC, Inc. ranges from 0.085% to 0.0125% of the average daily net asset values
of the Fund. Certain minimum fees and fee waivers 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, 1998, transfer agent
fees were $328,305 of which PEPCO retained $122,891 which is net of the fees
paid to State Street.
At June 30, 1998, PHL and affiliates held 195 Class A shares and 2 Class B
shares of the Fund with a combined value of $2,430.
3. PURCHASE AND SALE OF SECURITIES
Portfolio purchases and sales of investments, excluding short-term securities,
for the year ended June 30, 1998 aggregated $258,729,907 and $268,779,128
respectively. There were no purchases or sales of long-term U.S. Government
securities.
4. 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.
5. 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, 1998, the Fund has decreased undistributed net investment
income by $68,519 and increased accumulated net realized gains by $68,519.
TAX INFORMATION NOTICE (UNAUDITED)
For the fiscal year ended June 30, 1998, the Fund distributed long-term
capital gains dividends of $9,139,661.
12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO]
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, 1998, 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, 1998 by correspondence with the custodian
and brokers, provide a reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
August 7, 1998
<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 in-cluded in the
Annual Report to Shareholders for the year ended
June 30, 1998, incorporated by reference
(b) Exhibits:
<TABLE>
<S> <C>
1.1 Declaration of Trust of the Registrant, previously filed and filed via EDGAR with Post-Effective Amendment No. 63
on October 24, 1997 and 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 with Post-Effective Amendment No. 63 on
October 24, 1997 and 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
and assigned to Phoenix Investment Counsel, Inc. effective June 1, 1998, filed with Post-Effective Amendment
No. 58 on August 30, 1993 and filed via EDGAR with Post-Effective Amendment No. 63 on October 24, 1997
and herein incorporated by reference.
5.2 Amendment to Management Agreement between Registrant and National Securities & Research Corporation,
dated January 1, 1994 and assigned to Phoenix Investment Counsel, Inc. effective June 1, 1998, filed via EDGAR
with Post-Effective Amendment No. 61 on October 30, 1995, incorporated herein by reference.
6.1* Underwriting Agreement between Registrant and Phoenix Equity Planning Corporation ("Equity Planning")
dated November 19, 1997 and filed via EDGAR herewith, herein incorporated by reference.
6.2* Form of Sales Agreement between Phoenix Equity Planning Corporation and dealers filed via EDGAR herewith.
6.3* Form of Supplement to Phoenix Family of Funds Sales Agreement filed via EDGAR herewith.
6.4* Form of Financial Institution Sales Contract for the Phoenix Family of Funds filed via EDGAR herewith.
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 with Post-Effective Amendment No. 63 on
October 24, 1997 and 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 with Post-
Effective Amendment No. 63 on October 24, 1997 and incorporated herein by reference.
9.2* Sub-transfer Agent Agreement between Equity Planning and State Street Bank and Trust Company dated June
1, 1994 filed herewith via EDGAR.
9.3* Amended and Restated Financial Agent Agreement between Registrant and Phoenix Equity Planning
Corporation dated November 19, 1997 and filed via EDGAR herewith.
9.4* First Amendment to Amended and Restated Financial Agent Agreement between Registrant and Phoenix Equity
Planning Corporation dated March 23, 1998 and filed via EDGAR herewith.
9.5* Second Amendment to Amended and Restated Financial Agent Agreement between Registrant and Phoenix
Equity Planning Corporation dated July 31, 1998 and 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 Accountants filed via EDGAR herewith.
</TABLE>
C-1
<PAGE>
<TABLE>
<S> <C>
12. Not applicable.
13. None.
14. None.
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 and incorporated herein by reference.
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 and incorporated herein by reference.
16. Schedule for computation of total return, previously filed with Post-Effective Amendment No. 60 on October 26,
1994 and filed via EDGAR with Post-Effective Amendment No. 63 on October 24, 1997 and incorporated herein
by reference.
17.* Financial Data Schedule filed herewith and reflected on EDGAR as Exhibit 27.
18.1* Amended and Restated Plan Pursuant to Rule 18f-3 effective July 1, 1997, filed via EDGAR herewith.
18.2* First Amendment to the Amended and Restated Plan Pursuant to Rule 18f-3 effective August 26, 1998 filed
via EDGAR herewith.
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 31, 1998, the number of record holders of each class of
securities of the Registrant was as follows:
<TABLE>
<CAPTION>
Title of Class Number of Record-holders
<S> <C>
Shares of Beneficial Interest--Class A 13,047
Shares of Beneficial Interest--Class B 1,250
</TABLE>
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 Phoenix Investment
Counsel, Inc., the Adviser, reference is made to the Advisers' current
Form ADV (SEC File No. 801-5995) 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, Phoenix-Seneca Funds, 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 MVAI.
C-2
<PAGE>
(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
Philip R. McLoughlin Director and President Trustee and President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
William R. Moyer Director, Senior Vice Vice President
100 Bright Meadow Blvd. President, Chief
P.O. Box 2200 Financial Officer and
Enfield, CT 06083-2200 Treasurer
John F. Sharry Executive Vice Executive Vice President
100 Bright Meadow Blvd. President, Retail
P.O. Box 2200 Distribution
Enfield, CT 06083-2200
Leonard J. Saltiel Managing Director, Vice President
56 Prospect Street Operations and Service
P.O. Box 150480
Hartford, CT 06115-0480
G. Jeffrey Bohne Vice President, Mutual Secretary
101 Munson Street Fund Customer Service
Greenfield, MA 01301
Nancy G. Curtiss Vice President and Treasurer
56 Prospect Street Treasurer,
P.O. Box 150480 Fund Accounting
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
Jacqueline Porter Assistant Vice President Assistant Treasurer
56 Prospect Street
Hartford, CT 06115
</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, Phoenix Investment Counsel, Inc.; 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
Phoenix Investment Counsel, Inc. 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 6th day of October, 1998.
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 6th day of October, 1998.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
- ----------------------------
Robert Chesek* Trustee
- ----------------------------
E. Virgil Conway* Trustee
/s/ Nancy G. Curtiss Treasurer (principal financial and
- ----------------------------
Nancy G. Curtiss 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
- ----------------------------
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)
Exhibit 6.1
UNDERWRITING AGREEMENT
<PAGE>
UNDERWRITING AGREEMENT
THIS AGREEMENT made as of this 19th day of November, 1997, by and
between Phoenix Worldwide Opportunities Fund, a Massachusetts business trust
having a place of business located at 101 Munson Street, Greenfield,
Massachusetts (the "Fund") and Phoenix Equity Planning Corporation, a
Connecticut corporation having a place of business located at 100 Bright Meadow
Boulevard, Enfield, Connecticut (the "Underwriter").
WITNESSETH THAT:
1. The Fund hereby grants to the Underwriter the right to purchase shares of
beneficial interest of each class of each series of the Fund established and
designated as of the date hereof and of any additional series and classes
thereof which the Board of Directors or Board of Trustees, as applicable
("Trustees") may establish and designate during the term of this Agreement
(called the "Series" and "Classes", respectively) and to resell shares of
various Classes, as applicable, of each Series (collectively called the
"Shares") as principal and not as agent. The Underwriter accepts such
appointment and agrees to render the services described in this Agreement for
the compensation herein provided.
2. The Underwriter's right to purchase Shares shall be exclusive except that the
terms of this Agreement shall not apply to Shares issued or transferred:
a) pursuant to an offer of exchange exempted under Section 22(d)
of the Investment Company Act of 1940, as amended (the "Act")
by reason of the fact that said offer is permitted by Section
11 of the Act, including any offer made pursuant to clause (1)
or (2) of Section 11(b);
b) upon the sale to a registered unit investment trust which is
the issuer of periodic payment plan certificates the net
proceeds of which are invested in redeemable securities;
c) pursuant to an offer made solely to all registered holders of
Shares, or all registered holders of Shares of any Series,
proportionate to their holdings or proportionate to any cash
distribution made to them by the Fund (subject to appropriate
qualifications designed solely to avoid issuance of fractional
securities);
d) in connection with any merger or consolidation of the Fund or
of any Series with any other investment company or the
acquisition by the Fund, by purchase or otherwise, of any
other investment company;
<PAGE>
e) pursuant to sales exempted from Section 22(d) of the Act, by
rule or regulation or order of the Securities and Exchange
Commission as provided in the then current registration
statement of the Fund; or
f) in connection with the reinvestment by Fund shareholders of
dividend and capital gains distributions.
3. The "Net Asset Value" and the "Public Offering Price" of the Shares as
referred to in this Agreement shall be computed in accordance with the
provisions of the then current registration statement of the Fund. The
Underwriter shall be notified promptly by the Fund of such computations.
4. The Underwriter has and shall enter into written sales agreements with
broker/dealers ("dealers") and with banks as defined in Section 3(a)(6) of the
Securities Exchange Act of 1934, as amended, (Exchange Act) that are not
required to register as a broker/dealer under the Exchange Act or the
regulations thereunder ("Banks"). Such sales agreements shall provide that
dealers or Banks shall use their best efforts to promote the sale of Shares.
Such sales agreements shall include such terms and conditions as Underwriter may
determine not inconsistent with this Agreement; provided, however, that such
sales agreements shall specify a) that the dealer is registered as a
broker/dealer under the Exchange Act and a member of the National Association of
Securities Dealers, Inc. or, in the alternative, that the Bank is exempt from
broker/dealer registration under the Exchange Act; and b) that such dealers and
Banks agree that they will comply with all applicable state, and federal laws
and the rules and regulations of applicable regulatory agencies.
5. Each day the Underwriter shall have the right to purchase from the Fund, as
principal, the amount of Shares needed to fill unconditional orders for such
Shares received by the Underwriter from dealers, Banks, or investors, but no
more than the Shares needed, at a price equal to the Net Asset Value of the
Shares. Any purchase of Shares by the Underwriter under this Agreement shall be
subject to reasonable adjustment for clerical errors, delays and errors of
transmission and cancellation of orders.
6. With respect to transactions other than with dealers or Banks, the
Underwriter will sell Shares only at the Public Offering Price then in effect,
except to the extent that sales at less than the Public Offering Price may be
allowed by the Act, any rule or regulation promulgated thereunder or by order of
the Securities and Exchange Commission, provided, however, that any such sales
at less than the Public Offering Price shall be consistent with the terms of the
then current registration statement of the Fund. The Underwriter will sell at
Net Asset Value Shares of any Classes which are offered by the then current
registration statement or prospectus of the Fund for sale at such Net Asset
Value or at Net Asset Value with a contingent deferred sales charge ("CDSC
Shares"). The Underwriter shall receive from the Fund all contingent deferred
2
<PAGE>
sales charges applied on redemptions of CDSC Shares.
7. Sales at a discount from the Public Offering Price shall be made in
accordance with the terms and conditions of the terms of the current
registration statement of the Fund allowing such discounts. Such discounts shall
not exceed the difference between the Net Asset Value and the Public Offering
Price; however, the Underwriter may offer compensation in excess of the
difference between the Net Asset Value and the Public Offering Price, at its
discretion and from its own profits and resources, and only as described in the
current registration statement of the Fund. With respect to sales of CDSC
Shares, the Underwriter, in accordance with the terms of the current
registration statement of the Fund, shall pay dealers a commission on such sales
from its own profits and resources.
8. As reimbursement for expenditures made in connection with providing certain
distribution-related services, the Underwriter may receive from the Fund a
distribution service fee under the terms and conditions set forth in the Fund's
distribution plan adopted under Rule 12b-1 under the Investment Company Act of
1940, as amended, as the plan may be amended from time to time and subject to
any further limitations on such fees as the Trustees may impose. The Underwriter
may receive from the Fund a service fee to be retained by the Underwriter as
compensation for providing services to shareholders of the Fund or to be paid to
dealers and Banks for providing services to their clients who are also
shareholders of the Fund.
9. The Fund shall furnish the Underwriter with copies of its organizational
documents, as amended from time to time. The Fund shall also furnish the
Underwriter with any other documents of the Fund which will assist the
Underwriter in the performance of its duties hereunder.
10. The Underwriter agrees to use its best efforts (in states where it may
lawfully do so) to obtain from investors unconditional orders for Shares
authorized for issue by the Fund and registered under applicable Federal
securities laws, and, so long as it does so, nothing herein contained shall
prevent the Underwriter from entering into similar arrangements with other
registered investment companies. The Underwriter may, in the exercise of its
discretion, refuse to accept orders for Shares from any person.
11. Upon receipt by the Fund of a purchase order from the Underwriter,
accompanied by proper delivery instructions, the Fund shall, as promptly as
practicable thereafter, cause evidence of ownership of Shares to be delivered as
indicated in such purchase order. Payment for such Shares shall be made by the
Underwriter to the Fund in a manner acceptable to the Fund, provided that the
Underwriter shall pay for such Shares no later than the third business day after
the Underwriter shall have contracted to purchase such shares.
12. In connection with offering for sale and selling Shares, the Fund authorizes
the
3
<PAGE>
Underwriter to give only such information and to make only such statements or
representations as are contained in the then current registration statement of
the Fund. The Underwriter shall be responsible for the approval and filing of
sales material as required under SEC and NASD regulations.
13. The Fund agrees to pay the following expenses:
a) the cost of mailing stock certificates representing Shares;
b) fees and expenses (including legal expenses) of registering
and maintaining registrations of the Fund and of each Series
and Class with the Securities and Exchange Commission
including the preparation and printing of registration
statements and prospectuses for filing with said Commission;
c) fees and expenses (including legal expenses) incurred in
registering and qualifying Shares for sale with any state
regulatory agency and fees and expenses of maintaining,
renewing, increasing or amending such registrations and
qualifications;
d) the expense of any issue or transfer taxes upon the sale of
Shares to the Underwriter by the Fund;
e) the cost of preparing and distributing reports and notices to
shareholders; and
f) fees and expenses of the transfer agent, including the cost of
preparing and mailing notices to shareholders pertaining to
transactions with respect to such shareholders accounts.
14. The Underwriter agrees to pay the following expenses:
a) all expenses of printing prospectuses and statements of
additional information used in connection with the sale of
Shares and printing and preparing all other sales literature;
b) all fees and expenses in connection with the qualification
of the Underwriter as a dealer in the various states and
countries;
c) the expense of any stock transfer tax required in connection
with the sale of Shares by the Underwriter as principal to
dealers or to investors; and
d) all other expenses in connection with offering for sale and
the sale of Shares which have not been herein specifically
allocated to the Fund.
4
<PAGE>
15. The Fund hereby appoints the Underwriter its agent to receive requests to
accept the Fund's offer to repurchase Shares upon such terms and conditions as
may be described in the Fund's then current registration statement. The agency
granted in this paragraph 15 is terminable at the discretion of the Fund. As
compensation for acting as such agent and as part of the consideration for
acting as underwriter, Underwriter shall receive from the Fund all contingent
deferred sales charges imposed upon the redemption of Shares. Whether and to
what extent a contingent deferred sales charge will be imposed shall be
determined in accordance with, and in the manner set forth in, the Fund's
prospectus.
16. The Fund agrees to indemnify and hold harmless the Underwriter, its officers
and directors and each person, if any, who controls the Underwriter within the
meaning of section 15 of the Securities Act of 1933, as amended, against any
losses, claims, damages, liabilities and expenses (including the cost of any
legal fees incurred in connection therewith) which the Underwriter, its
officers, directors or any such controlling person may incur under said Act,
under any other statute, at common law or otherwise, arising out of or based
upon
a) any untrue statement or alleged untrue statement of a material
fact contained in the Fund's registration statement or prospectus
(including amendments and supplements thereto), or
b) any omission or alleged omission to state a material fact
required to be stated in the Fund's registration statement or
prospectus or necessary to make the statements in either not
misleading, provided, however, that insofar as losses, claims,
damages, liabilities or expenses arise out of or are based upon
any such untrue statement or omission or alleged untrue statement
or omission made in reliance and in conformity with information
furnished to the Fund by the Underwriter for use in the Fund's
registration statement or prospectus, such indemnification is not
applicable. In no case shall the Fund indemnify the Underwriter
or its controlling persons as to any amounts incurred for any
liability arising out of or based upon any action for which the
Underwriter, its officers and directors or any controlling person
would otherwise be subject to liability by reason of willful
misfeasance, bad faith, or gross negligence in the performance of
its duties or by reason of the reckless disregard of its
obligations and duties under this Agreement.
17. The Underwriter agrees to indemnify and hold harmless the Fund, its officers
and trustees and each person, if any, who controls the Fund within the meaning
of Section 15 of the Securities Act of 1933, as amended, against any losses,
claims, damages, liabilities and expenses (including the cost of any legal fees
incurred in connection therewith) which the Fund, its officers, trustees or any
such controlling person may incur under said Act, under any other statute, at
common law
5
<PAGE>
or otherwise arising out of the acquisition of any shares by any person which
a) may be based upon any wrongful act by the Underwriter or any of
its employees or representatives, or
b) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in the Fund's registration
statement, prospectus (including amendments and supplements
thereto) or sales material, or any omission or alleged omission
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading if such
statement or omission was made in reliance upon information
furnished or confirmed in writing to the Fund by the Underwriter.
18. It is understood that:
a) trustees, officers, employees, agents and shareholders of the
Fund are or may be interested persons, as that term is defined in
the Act ("Interested Persons"), of the Underwriter as directors,
officers, stockholders or otherwise;
b) directors, officers, employees, agents and stockholders of the
Underwriter are or may be Interested Persons of the Fund as
trustees, officers, shareholders or otherwise;
c) the Underwriter may be an Interested Person of the Fund as
shareholder or otherwise; and
d) the existence of any such dual interest shall not offset the
validity hereof or of any transactions hereunder.
19. The Fund may terminate this Agreement by 60 days written notice to the
Underwriter at any time, without the payment of any penalty, by vote of the
Trustees or by a vote of a majority of the outstanding voting securities, as
that term is defined in the Act, of the Fund. The Underwriter may terminate this
Agreement by 60 days written notice to the Fund, without the payment of any
penalty. This Agreement shall immediately terminate in the event of its
assignment, as that term is defined in the Act.
20. Subject to prior termination as provided in paragraph 19, this Agreement
shall continue in force for one year from the date of execution and from year to
year thereafter so long as the continuance after such one year period shall be
specifically approved at least annually by vote of the Trustees, or by a vote of
a majority of the appropriate class of outstanding voting securities, as that
term is defined in the Act, of the Fund. Additionally, each annual renewal of
this
6
<PAGE>
Agreement must be approved by the vote of a majority of the Trustees who are not
parties to the Agreement or Interested Persons of any such party, cast in person
at a meeting of the Trustees called for the purpose of voting on such approval.
21. 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 Fund personally, but bind only the trust property of the Fund,
as provided in the Declaration of Trust. The execution and delivery of this
Agreement by the President of the Fund has been authorized by the Trustees
acting as such, and neither such execution and delivery by such officer nor such
authorization by such Trustees shall be deemed to have been made by any of them
individually or be binding upon or impose any liability on any of them
personally, but shall bind only the trust property of the Fund as provided in
the Declaration of Trust. The Declaration of Trust is on file with the Secretary
of the Commonwealth of Massachusetts.
22. This Agreement shall become effective upon the date first set forth above.
This Agreement shall be governed by the laws of the State of Connecticut and
shall be binding on the successors and assigns of the parties to the extend
permitted by law.
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 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
7
Exhibit 6.2
SALES AGREEMENT
<PAGE>
[logo]PHOENIX Phoenix Funds
DUFF&PHELPS Sales Agreement
- --------------------------------------------------------------------------------
PHOENIX EQUITY PLANNING CORPORATION
100 Bright Meadow Blvd.
P.O. Box 2200
Enfield, Connecticut 06083-2200
Dealer Name:
Address:
Phoenix Equity Planning Corporation ("PEPCO", "we", "us", or "our") invites you
to participate in the sale and distribution of shares of registered investment
companies (which shall collectively be referred to hereinafter as the "Funds")
for which we are national distributor or principal underwriter, and which may be
listed in Annex A hereto which such Annex may be amended by us from time to
time. Upon acceptance of this agreement by PEPCO, you may offer and sell shares
of each of the Funds (hereafter "Shares") subject, however, to the terms and
conditions hereof including our right to suspend or cease the sale of such
shares. For the purposes hereof, the above referenced dealer shall be referred
to as "you".
1. You understand and agree that in all sales of Shares to the public, you
shall act as dealer for your own account. All purchase orders and
applications are subject to acceptance or rejection by us in our sole
discretion and are effective only upon confirmation by us. Each purchase
will be deemed to have been consummated in our principal office subject to
our acceptance and effective only upon confirmation to you by us.
2. You agree that all purchases of Shares by you shall be made only for the
purpose of covering purchase orders already received from your customers
(who may be any person other than a securities dealer or broker) or for
your own bona-fide investment.
3. You shall offer and sell Shares pursuant to this agreement for the purpose
of covering purchase orders of your customers, to the extent applicable,
(a) at the current public offering price ("Offering Price") for Class A
Shares or (b) at the Net Asset Value for Class B shares as set forth in the
current prospectus of each of the funds. The offer and sale of Class B
Shares by you is subject to Annex B hereto, "Compliance Standards for the
Sale of the Phoenix Funds Under Their Alternative Purchase Arrangements".
4. You shall pay us for Shares purchased within three (3) business days of the
date of our confirmation to you of such purchase or within such time as
required by applicable rule or law. The purchase price shall be (a) the
Offering Price, less only the applicable dealer discount (Dealer Discount)
for Class A Shares, if applicable, or (b) the Net Asset Value, less only
the applicable sales commission (Sales Commission) for Class B Shares, if
applicable, as set forth in the current prospectus at the time the purchase
is received by us. We have the right, without notice, to cancel any order
for which payment of good and sufficient funds has not been received by us
as provided in this paragraph, in which case you may be held responsible
for any loss suffered resulting from your failure to make payment as
aforesaid.
5. You understand and agree that any Dealer Discount, Sales Commission or fee
is subject to change from time to time without prior notice. Any orders
placed after the effective date of any such change shall be subject to the
Dealer Discount or Sales Commission in effect at the time such order is
received by us.
6. You understand and agree that Shares purchased by you under this Agreement
will not be delivered until payment of good and sufficient funds has been
received by us. 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 your
request, any Shares resold by you to one of your customers will be
delivered (whether by credit to a shareholder open account or by delivery
of certificates) in the name of your customer.
<PAGE>
7. You understand that on all purchases of Shares to which the terms of this
Agreement are applicable by a shareholder for whom you are dealer of
record, we will pay you an amount equal to the Dealer Discount, Sales
Commission or fees which would have been paid to you with respect to such
Shares if such Shares had been purchased through you. You understand and
agree that the dealer of record for this purpose shall be the dealer
through whom such shareholder most recently purchased Shares of such fund,
unless the shareholder or you have instructed us otherwise. You understand
that all amounts payable to you under this paragraph and currently payable
under this agreement will be paid as of the end of the month unless
specified otherwise for the total amount of Shares to which this paragraph
is applicable but may be paid more frequently as we may determine in our
discretion. Your request for Dealer Discount or Sales Commission reclaims
will be considered if adequate verification and documentation of the
purchase in question is supplied to us, and the reclaim is requested within
three years of such purchase.
8. We appoint the transfer agent (or identified sub-transfer agent) for each
of the Funds as our agent to execute the purchase transaction of Shares and
to confirm such purchases to your customers on your behalf, and you
guarantee the legal capacity of your customers so purchasing such Shares.
You further understand that if a customer's account is established without
the customer signing the application form, you hereby 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 you agree to indemnify the
Funds, the transfer agent (or identified sub-transfer agent) and us for any
loss or liability resulting from acting upon such instructions.
9. Upon the purchase of Class A Shares pursuant to a Letter of Intent, you
will promptly return to us any excess of the Dealer Discount previously
allowed or paid to you over that allowable in respect to such larger
purchases.
10. Unless at the time of transmitting a purchase order you advise us to the
contrary, we 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 the current prospectus.
11. You understand and agree that if any Shares purchased by you under the
terms of this Agreement are, within seven (7) business days after the date
of our confirmation to you of the original purchase order for such Shares,
repurchased by us as agent for such fund or are tendered to such fund for
redemption, you shall forfeit the right to, and shall promptly pay over to
us the amount of any Dealer Discount or Sales Commission allowed to you
with respect to such Shares. We will notify you of such repurchase or
redemption within ten (10) days of the date upon which certificates are
delivered to us 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 with us or
with such fund an order to have such shares repurchased or redeemed.
12. You agree that, in the case of any repurchase of any Shares made more than
seven (7) business days after confirmation by us of any purchase of such
Shares, except in the case of Shares purchased from you by us for your own
bona fide investment, you will act only as agent for the holders of such
Shares and will place the orders for repurchase only with us. It is
understood that you may charge the holder of such Shares a fair commission
for handling the transaction.
13. Our obligations to you under this Agreement are subject to all the
provisions of the respective distribution agreements entered into between
us and each of the Funds. You understand and agree that in performing your
services under this agreement you are acting in the capacity of an
independent contractor, and we are in no way responsible for the manner of
your performance or for any of your acts or omissions in connection
therewith. Nothing in the Agreement shall be construed to constitute you or
any of your agents, employees, or representatives as our agent, partner or
employee, or the agent, partner of employee of any of the Funds.
In connection with the sale and distribution of shares of Phoenix Funds,
you agree to indemnify and hold us and our affiliates, employees, and/or
officers harmless from any damage or expense as a result of (a) the
negligence, misconduct or wrongful act by you or any employee,
representative, or agent of yours and/or (b) any actual or alleged
violation of any securities laws, regulations or orders. Any indebtedness
or obligation of yours to us whether arising hereunder or otherwise, and
any liabilities incurred or moneys paid by us to any person as a result of
any misrepresentation, wrongful or unauthorized act or omission, negligence
of, or failure of you or your employees, representatives or agents to
comply with the Sales Agreement, shall be set off against any compensation
payable under this agreement. Any differential between such expenses and
compensation payable hereunder shall be payable to us upon demand. The
terms of this provision shall not be impaired by the termination of this
agreement.
In connection with the sale and distribution of shares of Phoenix Funds, we
agree to indemnify and hold you, harmless from any damage or expense on
account of the gross and willful negligence, misconduct or wrongful act of
us or any employee, representative, or agent of ours which arises out of or
is based upon any untrue statement or alleged untrue statement of material
fact, or the omission or alleged omission of a material fact in: (i) any
registration statement, including any prospectus or any post-effective
amendment thereto; or (ii) any material prepared and/or supplied by us for
use in conjunction with the offer or sale of Phoenix Funds; or (iii) any
state registration or other document filed in any state or jurisdiction in
order to qualify any Fund under the securities laws of such state or
jurisdiction. The terms of this provision shall not be impaired by the
termination of this agreement.
<PAGE>
14. We will supply you with reasonable quantities of the current prospectus,
periodic reports to shareholders, and sales materials for each of the
Funds. You agree not to use any other advertising or sales material
relating to the sale of shares of any of the Funds unless such other
advertising or sales material is pre-approved in writing by us.
15. You agree to offer and sell Shares 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 you will make no representations
not contained in any such prospectus or any authorized supplemental sales
material supplied by us. You agree to use your 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, training and
supervision of all sales representatives employed by you in order that such
Shares will be offered in accordance with the terms and conditions of this
Agreement and all applicable laws, rules and regulations. All expenses
incurred by you in connection with your activities under this Agreement
shall be borne by you. In consideration for the extension of the right to
exercise telephone exchange and redemption privileges to you and your
registered representatives, you agree to bear the risk of any loss
resulting from any unauthorized telephone exchange or redemption
instructions from you or your registered representatives. In the event we
determine to refund any amounts paid by any investor by reason of such
violation on your part, you shall forfeit the right to, and pay over to us,
the amount of any Dealer Discount or Sales Commission allowed to you with
respect to the transaction for which the refund is made.
16. You represent that you are properly registered as a broker or dealer under
the Securities and Exchange Act of 1934 and are member of the National
Association of Securities Dealers, Inc. (NASD) and agree to maintain
membership in the NASD or in the alternative, that you are a foreign dealer
not eligible for membership in the NASD. You agree to notify us promptly of
any change, termination or suspension of the foregoing status. You 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. You further agree to comply with all
applicable state and Federal laws and the rules and regulations of
applicable regulatory agencies. You further agree that you will not sell,
or offer for sale, Shares in any jurisdiction in which such Shares have not
been duly registered or qualified for sale. You agree to promptly notify us
with respect to (a) the initiation and disposition of any formal
disciplinary action by the NASD or any other agency or instrumentality
having jurisdiction with respect to the subject matter hereof against you
or any of your employees or agents; (b) the issuance of any form of
deficiency notice by the NASD or any such agency regarding your training,
supervision or sales practices; and (c) the effectuation of any consensual
order with respect thereto.
17. Either party may terminate this agreement for any reason by written or
electronic notice to the other party which termination shall become
effective fifteen (15) days after the date of mailing or electronically
transmitting such notice to the other party. We may also terminate this
agreement for cause or as a result of a violation by you, as determined by
us in our discretion, of any of the provisions of this Agreement, said
termination to be effective on the date of mailing written or transmitting
electronic notice to you of the same. Without limiting the generality of
the foregoing, your own expulsion from the NASD will automatically
terminate this Agreement without notice. Your suspension from the NASD or
violation of applicable state or Federal laws or rules and regulations of
applicable regulatory agencies will terminate this Agreement effective upon
the date of our mailing written notice or transmitting electronic notice to
you of such termination. Our failure to terminate this Agreement for any
cause shall not constitute a waiver of our right to so terminate at a later
date.
18. All communications and notices to you or us shall be sent to the addresses
set forth at the beginning of this Agreement or to such other address as
may be specified in writing from time to time.
19. This agreement shall become effective upon the date of its acceptance by us
as set forth herein. This agreement may be amended by PEPCO from time to
time. 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
we may assign or transfer this agreement to any successor distributor of
the Shares described herein.
ACCEPTED ON BEHALF OF ACCEPTED ON BEHALF OF
PHOENIX EQUITY PLANNING DEALER FIRM:
CORPORATION:
Date ______________________________ Date __________________________________
By /s/ John F. Sharry By
________________________________ ____________________________________
Print Name John F. Sharry Print Name
_________________________ ____________________________
Managing Director, Retail Sales
Print Title _______________________ Print Title ___________________________
NASD CRD Number _______________________
<PAGE>
[LOGO]PHOENIX AMENDED ANNEX A, DEALER AGREEMENT WITH
DUFF&PHELPS PHOENIX EQUITY PLANNING CORPORATION, FEBRUARY 27, 1998
================================================================================
I. PHOENIX FAMILY OF FUNDS
- --------------------------------------------------------------------------------
PHOENIX SERIES FUND
Balanced Fund Series
Convertible Fund Series
Growth Fund Series
Aggressive Growth Fund Series
High Yield Fund Series
Money Market Fund Series
U.S. Government Securities Fund Series
PHOENIX-ABERDEEN SERIES FUND
Aberdeen New Asia Fund
Aberdeen Global Small Cap Fund
PHOENIX MULTI-PORTFOLIO FUND
Tax-Exempt Bond Portfolio
Mid Cap Portfolio
International Portfolio
Real Estate Securities Portfolio
Emerging Markets Bond Portfolio
Strategic Income Fund
PHOENIX STRATEGIC EQUITY SERIES FUND
Equity Opportunities Fund
Strategic Theme Fund
Small Cap Fund
PHOENIX EQUITY SERIES FUND
Core Equity Fund
Growth and Income Fund
PHOENIX CALIFORNIA TAX EXEMPT BONDS, INC.
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
PHOENIX WORLDWIDE OPPORTUNITIES FUND
PHOENIX STRATEGIC ALLOCATION FUND, INC.
PHOENIX INCOME AND GROWTH FUND
PHOENIX VALUE EQUITY FUND
PHOENIX SMALL CAP VALUE FUND
PHOENIX-ENGEMANN FUNDS
Balanced Return Fund
Global Growth Fund
Growth Fund
Nifty Fifty Fund
Small & Mid-Cap Growth Fund
Value 25 Fund
- --------------------------------------------------------------------------------
Equity Planning may sponsor, to all qualifying dealers, on a non-discriminatory
basis, sales contests, training and educational meetings and provide to all
qualifying broker/dealers, from its own profits and resources, additional
compensation in the form of trips, merchandise or expense reimbursement. Brokers
or 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. Applicable waivers of Class A sales loads and Class B
contingent deferred sales charges are described in the prospectus.
================================================================================
CLASS A SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A SHARES (EXCEPT MULTI-SECTOR SHORT TERM MULTI-SECTOR SHORT TERM
BOND FUND & MONEY MARKET) BOND FUND CLASS A SHARES
DEALER DISCOUNT DEALER DISCOUNT
SALES CHARGE OR AGENCY FEE SALES CHARGE OR AGENCY FEE
AMOUNT OF AS PERCENTAGE OF AS PERCENTAGE OF AS PERCENTAGE OF AS PERCENTAGE OF
TRANSACTION OFFERING PRICE OFFERING PRICE OFFERING PRICE OFFERING PRICE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Less than $50,000 4.75% 4.25% 2.25% 2.00%
- ---------------------------------------------------------------------------------------------------------------------------------
$50,000 but under $100,000 4.50 4.00 1.25 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
$100,000 but under $250,000 3.50 3.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
$250,000 but under $500,000 3.00 2.75 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
$500,000 but under $1,000,000 2.00 1.75 0.75 0.75
- ---------------------------------------------------------------------------------------------------------------------------------
$1,000,000 or more None None None None
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Shares of the Money Market Series are offered to the public at their constant
net asset value of $1.00 per share with no sales charge on Class A shares.
$1 MILLION NAV SALES FINDERS FEE: In connection with Class A Share purchases of
$1,000,000 or more (or subsequent purchases in any amount), Equity Planning may
pay broker/dealers, from its own profits and resources, a percentage of the net
asset value of shares sold (excluding Money Market shares) as set forth in the
table below. If part or all of such investment, is subsequently redeemed within
one year of the investment date, the broker/dealer will refund to Equity
Planning any such amounts paid with respect to the investment.
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PURCHASE AMOUNT $1,000,000 to $3,000,000 $3,000,001 to $6,000,000 $6,000,001 or more
- ---------------------------------------------------------------------------------------------------------------------------------
PAYMENT TO BROKER/DEALERS 1% 0.50 of 1% 0.25 of 1%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
================================================================================
CLASS A SHARES
- --------------------------------------------------------------------------------
TRAIL: Equity Planning intends to pay a quarterly fee to qualifying
broker/dealer firms at the equivalent of 0.25% annually, based on the average
daily net asset value of Class A shares sold by such broker/dealers (except
Money Market Series) and remaining outstanding on the Funds' books during the
period in which the fee is calculated. Dealers must have an aggregate value of
$50,000 or more in one Fund to qualify for payment in that Fund.
<PAGE>
================================================================================
CLASS B SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS B SHARES
(EXCEPT MULTI-SECTOR SHORT TERM BOND FUND) MULTI-SECTOR SHORT TERM BOND FUND CLASS B
<S> <C>
Sales Commission 4.00% Sales Commission 2.00%
</TABLE>
Broker/Dealer firms maintaining house/omnibus accounts, upon redemption of a
customer account within the time frames specified below, shall forward to Equity
Planning the indicated contingent deferred sales charge.
<TABLE>
<CAPTION>
YEARS SINCE PURCHASE CONTINGENT DEFERRED CONTINGENT DEFERRED
SALES CHARGES SALES CHARGES
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
First 5.00% 2.00%
- -----------------------------------------------------------------------------------------------------------------------------
Second 4.00 1.50
- -----------------------------------------------------------------------------------------------------------------------------
Third 3.00 1.00
- -----------------------------------------------------------------------------------------------------------------------------
Fourth and Fifth 2.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------
Sixth 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
TRAIL: Equity Planning intends to pay a quarterly fee to qualifying
broker/dealer firms at the equivalent of 0.25% annually, based on the average
daily net asset value of shares sold by such broker/dealers (except Money Market
Series) and remaining outstanding on the Funds' books during the period in which
the fee is calculated, commencing one year after the investment date. Dealers
must have an aggregate value of $50,000 or more in one Fund to qualify for
payment in that Fund.
================================================================================
CLASS C SHARES - MULTI-SECTOR SHORT TERM BOND FUND ONLY
- --------------------------------------------------------------------------------
TRAIL: Equity Planning intends to pay a quarterly fee to qualifying
broker/dealer firms at the equivalent of 0.50% annually, based on the average
daily net asset value of shares sold by such broker/dealers and remaining
outstanding on the Funds' books during the period in which the fee is
calculated. Dealers must have an aggregate value of $50,000 or more in the Fund
to qualify for payment.
FINDERS FEE:
In connection with Class C Share purchases of $250,000 or more (or subsequent
purchases in any amount), Equity Planning may pay broker-dealers,
from its own resources, on amount equal to 0.50% of purchases above $250,000
but under $3 million plus 0.25% on purchases in excess of $3 million.
If all or part of the investment is subsequently redeemed, except for exchanges
or purchases of other Phoenix funds, within one year of the investment date, the
broker-dealer will refund to the Distributor such amount paid with respect to
the investment.
================================================================================
CLASS C SHARES - AVAILABLE ONLY FOR THE FUNDS LISTED BELOW:
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
CORE EQUITY FUND PHOENIX-ENGEMANN GLOBAL GROWTH FUND PHOENIX-ENGEMANN SMALL & MID-CAP
EMERGING MARKETS BOND PORTFOLIO MULTI-SECTOR FIXED INCOME FUND GROWTH FUND
(EFFECTIVE 3-27-98) STRATEGIC INCOME FUND VALUE EQUITY FUND
GROWTH AND INCOME FUND (EFFECTIVE 3-27-98) SMALL CAP VALUE FUND
HIGH YIELD FUND SERIES STRATEGIC THEME FUND PHOENIX-ENGEMANN BALANCED RETURN FUND
(EFFECTIVE 2-27-98) PHOENIX-ENGEMANN NIFTY FIFTY FUND PHOENIX-ENGEMANN VALUE 25 FUND
PHOENIX-ENGEMANN GROWTH FUND
</TABLE>
Sales Commission: 1%. Contingent deferred sales charge: 1% for one year from the
date of each purchase. Broker/Dealer firms maintaining house/omnibus accounts,
upon redemption of a customer account within one year of purchase date, shall
forward to Equity Planning the indicated contingent deferred sales charge.
TRAIL AND SERVICE FEE: Equity Planning intends to pay a fee after the first year
to qualifying broker/dealer firms at the equivalent of 0.75% annually, and a
Service Fee at the equivalent of 0.25% annually, based on the average daily net
asset value of shares sold by such broker/dealers and remaining outstanding on
the Funds' books during the period in which the fee is calculated. Dealers must
have an aggregate value of $50,000 or more in the Fund to qualify for payment.
<PAGE>
================================================================================
CLASS M SHARES - AVAILABLE ONLY FOR THE FUNDS LISTED BELOW:
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
CORE EQUITY FUND MULTI-SECTOR FIXED INCOME FUND VALUE EQUITY FUND
GROWTH AND INCOME FUND STRATEGIC THEME FUND SMALL CAP VALUE FUND
PHOENIX-ENGEMANN GROWTH FUND PHOENIX-ENGEMANN NIFTY FIFTY FUND PHOENIX-ENGEMANN BALANCED RETURN FUND
PHOENIX-ENGEMANN GLOBAL GROWTH FUND PHOENIX-ENGEMANN SMALL & MID-CAP PHOENIX-ENGEMANN VALUE 25 FUND
GROWTH FUND
</TABLE>
<TABLE>
<CAPTION>
DEALER DISCOUNT
SALES CHARGE OR AGENCY FEE
AMOUNT OF AS PERCENTAGE OF AS PERCENTAGE OF
OFFERING PRICE OFFERING PRICE OFFERING PRICE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Less than $50,000 3.50% 3.00%
- ------------------------------------------------------------------------------------------------------------------
$50,000 but under $100,000 2.50 2.00
- ------------------------------------------------------------------------------------------------------------------
$100,000 but under $250,000 1.50 1.00
- ------------------------------------------------------------------------------------------------------------------
$250,000 but under $500,000 1.00 1.00
- ------------------------------------------------------------------------------------------------------------------
$500,000 but under $1,000,000 None None
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
TRAIL: Equity Planning intends to pay a quarterly fee to qualifying
broker/dealer firms at the equivalent of 0.50% annually, based on the average
daily net asset value of shares sold by such broker/dealers and remaining
outstanding on the Funds' books during the period in which the fee is
calculated. Dealers must have an aggregate value of $50,000 or more in the Fund
to qualify for payment.
================================================================================
II. A. PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
- --------------------------------------------------------------------------------
Balanced Portfolio Growth Stock Portfolio
Enhanced Reserves Portfolio Money Market Portfolio
Managed Bond Portfolio U.S. Government Securities Portfolio
FINDER'S FEE: Equity Planning may pay broker/dealers, from its own profits and
resources, a percentage of the net asset value of Class X and Class Y shares
sold as set forth in the table below. If part of any investment is subsequently
redeemed within one year of the investment date, the broker/dealer will refund
to Equity Planning any such amounts paid with respect to the investment.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PURCHASE AMOUNT 0 to $5,000,000 $5,000,001 to $10,000,000 $10,000,001 or more
- ------------------------------------------------------------------------------------------------------------------------------------
PAYMENT TO BROKER/DEALERS 0.50% 0.25% 0.10%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
TRAIL: (Class Y shares only): Equity Planning intends to pay broker/dealers a
quarterly service fee at the equivalent of 0.25% annually, based on the average
daily net asset value of Class Y shares sold by such broker/dealers and
remaining outstanding on the Funds' books during the period in which the fee is
calculated, subject to future amendment or termination.
================================================================================
II. B. PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
- --------------------------------------------------------------------------------
Phoenix Real Estate Equity Securities Portfolio
TRAIL: (Class Y shares only): Equity Planning intends to pay broker/dealers a
quarterly service fee at the equivalent of 0.25% annually, based on the average
daily net asset value of Class Y shares sold by such broker/dealers and
remaining outstanding on the Funds' books during the period in which the fee is
calculated, subject to future amendment or termination.
<PAGE>
PDP80A (2-98) Distributed by Phoenix Equity Planning Corporation,
Enfield, CT, 06083
<PAGE>
[logo]PHOENIX Annex B To Dealer Agreement With
DUFF&PHELPS Phoenix Equity Planning Corporation
- --------------------------------------------------------------------------------
Compliance Standards for
the Sale of the Phoenix Funds
Under Their Alternative Purchase Arrangements
As national distributor or principal underwriter of the Phoenix Funds, which
offer their shares on both a front-end and deferred sales charge basis, Phoenix
Equity Planning Corporation ("PEPCO") has established the following compliance
standards which set forth the basis upon which shares of the Phoenix Funds may
be sold. These standards are designed for those broker/dealers ("dealers") that
distribute shares of the Phoenix Funds and for each dealer's financial
advisors/registered representatives.
As shares of the Phoenix Funds are offered with two different sales arrangements
for sales and distribution fees, it is important for an investor not only to
choose a mutual fund that best suits his investment objectives, but also to
choose the sales financing method which best suits his particular situation. To
assist investors in these decisions and to ensure proper supervision of mutual
fund purchase recommendations, we are instituting the following compliance
standards to which dealers must adhere when selling shares of the Phoenix Funds:
1. Any purchase of a Phoenix Fund for less than $250,000 may be either of
shares subject to a front-end load (Class A shares) or subject to deferred
sales charge (Class B shares).
2. Any purchase of a Phoenix Fund by an unallocated qualified employer
sponsored plan for less than $1,000,000 may be either of shares subject to
a front-end load (Class A shares) or subject to deferred sales charge
(Class B shares). Class B shares sold to allocated qualified employer
sponsored plans will be limited to a maximum total value of $250,000 per
participant.
3. Any purchase of a Phoenix Fund for $250,000 or more (except as noted above)
or which qualifies under the terms of the prospectus for net asset value
purchase of Class A shares should be for Class A shares.
General Guidelines
These are instances where one financing method may be more advantageous to an
investor than the other. Class A shares are subject to a lower distribution 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 of 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 charges 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 of 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 of their funds invested
initially, although remaining subject to higher continuing distribution charges
and, for a five-year period, being subject to a contingent deferred sales charge
(three years for Asset Reserve).
A National Association of Securities Dealers rule specifically prohibits
"breakpoint sales" of front-end load shares. A "breakpoint sale" is a sale to
the client of an amount of front-end load (Class A) shares just below the amount
which would be subject to the next breakpoint on the fund's sales charge
schedule. Because the deferred sales charge on Class B shares is reduced by 1%
for each year the shares are held, a redemption of Class B shares just before an
"anniversary date" is in some ways analogous to a breakpoint sale. A client
might wish to redeem just before an anniversary date for tax or other reasons,
and a client who chose to wait would continue to be at market risk.
Nevertheless, investment executives should inform clients intending to redeem
Class B shares near an anniversary date that, if the redemption were delayed,
the deferred sales charge would be reduced.
Responsibilities of Branch Office Manager (or other appropriate reviewing
officer).
A dealer's branch manger or other appropriate reviewing officer ("the Reviewing
Officer") must ensure that the financial advisor/registered representative has
advised the client of the available financing methods offered by the Phoenix
Funds, and the impact of choosing one method over another. In certain instances,
it may be appropriate for the Reviewing Officer to discuss the purchase directly
with the client. The reviewing officer should review purchases for Class A or
Class B shares given the relevant facts and circumstances, including but not
limited to: (a) the specific purchase order dollar amount; (b) the length of
time the investor expects to hold his shares; and (c) any other relevant
circumstances, such as the availability of purchases under letters of intent or
pursuant to rights of accumulation and distribution requirements. The foregoing
guidelines, as well as the examples cited above, should assist the Reviewing
Officer in reviewing and supervising purchase recommendations and orders.
Effectiveness
These compliance guidelines are effective immediately with respect to any order
for shares of those Phoenix Funds which offer their shares pursuant to the
alternative purchase arrangement.
Questions relating to these compliance guidelines should be directed by the
dealer to its national mutual fund sales and market group or its legal
department or compliance director. PEPCO will advise dealers in writing of any
future changes in these guidelines.
PEP80B 11/95
Exhibit 6.3
SUPPLEMENT TO PHOENIX FAMILY OF FUNDS
SALES AGREEMENT
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION
SUPPLEMENT TO PHOENIX FAMILY OF FUNDS
SALES AGREEMENT
It is hereby agreed that this AGREEMENT, dated this __________ day
of __________, 19__, between ________________________________________ ("Dealer")
and Phoenix Equity Planning Corporation ("Distributor"), supplements and amends
the Sales Agreement between Dealer and Distributor dated by Distributor
_______________________ 19__ ("Sales Agreement').
WHEREAS, Dealer wishes to use shares of the Funds in a fee-based
program made available by Dealer to clients of Dealer (the "Fee-Based Program");
WHEREAS, Dealer wishes to afford its fee-based clients the
opportunity to qualify for the ability to purchase shares of the Funds at net
asset value; and
WHEREAS, Distributor is willing to allow Dealer to purchase shares
of the Funds for clients in the Fee-Based Program subject to the provisions of
this agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by both parties, Dealer
and Distributor hereby agree as follows:
1. Dealer may sell shares of any Funds made available by
Distributor, from time to time, at net asset value to bona fide clients of
Dealer for use solely in their Fee-Based Program. Dealer will earn no concession
or commission on any such sale.
2. Distributor, after consulting Dealer, will determine, from time
to time, which Funds it will make available to Dealer for use in the Fee-Based
Program. Dealer will comply with all provisions of the Prospectus and Statement
of Additional Information of each Fund.
1
<PAGE>
3. All shares made available to Dealer under the Fee-Based Program
must be purchased by Dealer for the benefit of Dealer's clients participating in
its Fee-Based Program under which Dealer provides portfolio management and other
services to such clients for a fee. Such fee to be paid in connection with
investment in the Funds shall at all times be at a level acceptable to
Distributor. Dealer acknowledges that it has sent the Distributor the current
fee schedule for the Fee-Based Program and Dealer agrees to notify Distributor
at least thirty (30) days in advance in writing of any amendment to such fee
schedule. The current fee schedule is attached. Dealer shall not prepare, use or
distribute brochures, written materials or advertising in any form that refers
to sales of the Funds as no-load or at net asset value except, in the case of
brochures, it may refer to the Funds as available at net asset value under the
Fee-Based Program if the fees and expenses of the Fee-Based Program are given at
least equal prominence. Notwithstanding the foregoing, in connection with
explaining the fees and expenses of the Fee-Based Program, representatives of
Dealer may describe to customers the option of purchasing Fund shares through
the Fee-Based Program at net asset value.
4. Distributor warrants that all necessary disclosures regarding
the sale of shares at net asset value will be set forth in the Prospectus and
Statement of Additional Information of the Funds available under this Agreement.
5. Dealer may maintain either an omnibus account(s) solely for the
clients of its Fee-Based program or may maintain separate accounts for each
client of its Fee-Based Program with the Fund's transfer agent. If an omnibus
account(s) is maintained, Dealer shall be solely responsible for meeting all
legal obligations with respect to each beneficial owner including, but not
limited to, the delivery of proxies, annual and semi-annual reports and other
materials.
6. This Agreement shall be governed and interpreted in accordance
with the laws of the State of Connecticut. This Agreement shall not relieve
Dealer or Distributor from any obligations either may have under any other
agreements between them (except with respect to the payment of service fees),
including but not limited to the Sales Agreement, which is incorporated by
reference herein and shall control in case of any conflict with this Agreement.
7. Distributor is not endorsing, recommending or otherwise involved
in providing any investment product or advisory service of Dealer (including but
not limited to the Fee-Based Program). Distributor is merely affording Dealer
the opportunity to use shares of the Funds distributed by Distributor as an
investment medium for the Fee-Based Program.
8. This Agreement is not exclusive and may be terminated by either
party upon sixty (60) days prior written notice to the other party. It shall
terminate automatically upon termination of the Sales Agreement between the
parties. This Agreement may be amended only by a written instrument, signed by
both parties.
IN WITNESS WHEREOF, this Agreement has been executed as of the date set
forth above by a duly authorized officer of each party.
2
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION
By: _______________________________________
John F. Sharry
Managing Director, Retail Sales
Dealer: _____________________________
By: _________________________________
Name: _______________________________
Title: ______________________________
Address: ____________________________
____________________________
____________________________
Phone: ______________________________
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P O Box 2200
Enfield, CT 06083-2200
(230) 253-1000
3
Exhibit 6.4
FINANCIAL INSTITUTION SALES CONTRACT
FOR THE PHOENIX FAMILY OF FUNDS
<PAGE>
FINANCIAL INSTITUTION SALES CONTRACT
FOR THE PHOENIX FAMILY OF FUNDS
Between: and
PHOENIX EQUITY PLANNING CORPORATION
Distributor of: The Phoenix Family of Funds
100 Bright Meadow Blvd.
P.O. Box 2200
Enfield, CT 06083-2200
As distributor of The Phoenix Family of Funds (the "Funds"), we agree that you
may make available to your customers, under an agency relationship with your
customers, shares of beneficial interest issued by the Funds (the "Shares"),
subject to any limitation imposed by the Funds and to confirmation by us of each
transaction. By your acceptance hereof, you agree to all of the following terms
and conditions:
I. Offering Prices and Fees
The public offering price at which you may make Shares available to your
customers is the net asset value thereof, as computed from time to time, plus
any applicable sales charge described in the then current prospectus of the
applicable Fund. In the case of purchases by you, as agent for your customers,
of shares sold with a sales charge, you will receive an agency fee consisting of
a portion of the public offering price, determined on the same basis as the
"dealer discount" described in the then current Prospectus of the Funds, and
such other compensation to dealers as may be described therein, which shall be
payable to you at the same time and on the same basis as the same is paid to
such dealers, consistent with applicable law, rules and regulations. In
determining the amount of any agency fee payable to you hereunder, we reserve
the right to revise the agency fee referred to herein upon written notice to
you. We will furnish you upon request with the public offering prices for the
Shares and you agree to quote such prices in connection with any Shares made
available by you as agent for your customers. Each purchase of Shares by your
customers is made subject to confirmation by us at the public offering price
next computed after receipt of the order. There is no sales charge or agency fee
to you on the reinvestment of dividends and distributions.
II. Manner of Making Shares Available for Purchase
We will, upon request, deliver to you a copy of each Fund's then current
Prospectus and will provide you with such number of copies of each Fund's
current Prospectus, Statement of Additional Information and shareholder reports
and of supplementary sales materials prepared by us, as you may reasonably
request. It shall be your obligation to ensure that all such information and
materials are distributed to your customers who own Shares in accordance with
securities and/or banking law and regulations and any other applicable
regulations. Neither you nor any other person is authorized to give any
information or make any representations other than those contained in such
prospectuses, Statements of Additional Information and shareholder reports or in
such supplemental sales materials. You shall not furnish or cause to be
furnished to any person, display or publish any information or materials
relating to any Fund (including, without limitation, promotional materials and
sales literature, advertisements, press releases, announcements, statements,
posters, signs or similar material), except such information and materials as
may be furnished to you by us or the Fund, and such other information and
materials as may be approved in writing by us. We reserve the right to reject
any purchases for any accounts which we reasonably determine are not made in
accordance with the terms of the applicable Fund Prospectus and the provisions
of this Agreement.
You hereby agree:
(i) to not purchase any Shares as agent for any customer, unless you
deliver or cause to be delivered to such customer, at or prior to the
time of such purchase, a copy of the then-current Prospectus of the
applicable Fund unless such customer has acknowledged receipt of the
Prospectus of such Fund. You hereby represent that you understand your
obligation to deliver a prospectus to customers who purchase Shares
pursuant to federal securities laws and you have taken all necessary
steps to comply with such prospectus delivery requirements;
PEP 613 12-92
<PAGE>
(ii) to transmit to us promptly upon receipt any and all orders received by
you, it being understood that no conditional orders will be accepted;
(iii) to obtain from each customer for whom you act as agent for the
purchase of Shares any taxpayer identification number certification
and backup withholding information required under the Internal Revenue
Code, as amended from time to time (the "Code"), and the regulations
set forth thereunder, or other sections of the Code which may become
applicable and to provide us or our designee with timely written
notice of any failure to obtain such taxpayer identification number
certification or information in order to enable the implementation of
any required backup withholding in accordance with the Code and the
regulations thereunder;
(iv) to pay to us the offering price, less any agency fee to which you are
entitled, within five (5) business days of our confirmation of your
customer's order, or such shorter time as may be required by law. You
may, subject to our approval, remit the total public offering price to
us, and we will return to you your agency fee. If such payment is not
received within said time period, we reserve the right, without prior
notice, to cancel the sale, or at our option to return the Shares to
the issuer for redemption or repurchase. In the latter case, we shall
have the right to hold you responsible for any loss resulting to us.
Should payment be made by local bank check, liquidation of Shares may
be delayed pending clearance of your check; and
(v) to offer and sell Shares, and execute telephone transactions only in
accordance with the terms and conditions of the then current
prospectuses of the relevant Funds and to make no representations not
contained in any such prospectus or in any authorized supplemental
material supplied to you. In addition, in consideration for the
extension of the right to exercise telephone transaction privileges,
you 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 you agree to
indemnify and hold harmless the Funds, Equity Planning and the
Transfer Agent against any loss, injury or damage resulting from any
unauthorized telephone transaction instruction from you or your
representatives. (Telephone instructions will be recorded on tape).
Unless otherwise mutually agreed in writing or except as provided below, each
transaction placed by you shall be promptly confirmed by us in writing to you,
and shall be confirmed to the customer promptly upon receipt by us of
instructions from you as to such customer. In the case of a purchase order by
customer's application, each transaction shall be promptly confirmed in writing
directly to the customer and a copy of each confirmation shall be sent
simultaneously to you. You understand that in the case of an Omnibus Account we
shall send a confirmation to you as the shareholder of record only. We reserve
the right, at our discretion and without notice, to suspend the sale of Shares
or withdraw entirely the sale of Shares of any or all of the Funds. All orders
are subject to acceptance or rejection by us in our sole discretion, and by the
Funds in their sole discretion. The procedure stated herein relating to the
pricing and handling of orders shall be subject to instructions which we may
forward to you from time to time.
III. Compliance With Law
You hereby represent that you are either (1) a "bank" as defined in Section
3(a)(6) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and at the time of each transaction in shares of the Funds, are not required to
register as a broker-dealer under the Exchange Act or regulations thereunder; or
(2) registered as a broker-dealer under the Exchange Act, a member in good
standing of the National Association of Securities Dealers, Inc. ("NASD") and
affiliated with a bank.
(i) If you are a bank, not required to register as a broker-dealer under
the Exchange Act, you further represent and warrant to us that with
respect to any sales in the United States, you will use your best
efforts to ensure that any purchase of Shares by your customers
constitutes a suitable investment for such customers. You shall not
effect any transaction in, or induce any purchase or sale of, any
Shares by means of any manipulative deceptive or other fraudulent
device or contrivance and shall otherwise deal equitable and fairly
with your customers with respect to transactions in Shares of a Fund.
-2-
<PAGE>
(ii) If you are a NASD member broker-dealer affiliated with a bank and
registered under the Exchange Act, you further represent and warrant
to us that with respect to any sales in the United States, you agree
to abide by all of the applicable laws, rules and regulations
including applicable provisions of the Securities Act of 1933 as
amended, and the applicable rules and regulations of the NASD,
including, without limitation, its Rules of Fair Practice, and the
applicable rules and regulations of any jurisdiction in which you make
Shares available for sale to your customers. You agree not to make
available for sale to your customers the Shares in any jurisdiction in
which the Shares are not qualified for sale or in which you are not
qualified as a broker-dealer. We shall have no obligation or
responsibility as to your right to make Shares of any Fund available
to your customers in any jurisdiction. You agree to notify us
immediately in the event of (a) your expulsion or suspension from the
NASD or your becoming subject to any enforcement action by the
Securities and Exchange Commission, NASD, or any other self-regulatory
organization, or (b) your violation of any applicable federal or state
law, rule or regulation including, but not limited to, those of the
SEC, NASD, or other self-regulatory organization, arising out of or in
connection with this Agreement, or which may otherwise affect in any
material way your ability to act in accordance with the terms of this
Agreement.
You shall not make Shares of any Fund available to your customers, including
your fiduciary customers, except in compliance with all federal and state laws
and rules and regulations of regulatory agencies or authorities applicable to
you, or any of your affiliates engaging in such activity, which may affect your
business practices. You confirm that you are not in violation of any banking law
or regulations to which you are subject. You agree to hold us and the Funds
harmless and indemnify us in the event that you or any of your representatives
should violate any law, rule or regulation or any provisions of this Agreement.
In the event that we determine to refund any amounts paid by a customer in
connection with any such violation on your part, you shall forfeit the right to
the amount of any agency fee allowed by us with respect to the transaction for
which the refund is made. All expenses which you incur in connection with your
activities under this Agreement shall be borne by you.
IV. Relationship With Customer
With respect to any and all transactions in the Shares of any Fund pursuant to
this Agreement, it is understood and agreed in each case that: (i) you shall be
acting solely as agent for the account of your customer; (ii) each transaction
shall be initiated solely upon the order of your customer; (iii) we shall
execute transactions only upon receiving instructions from you acting as agent
for your customer or upon receiving instructions directly from your customer;
(iv) as between you and your customer, your customer will have full beneficial
ownership of all Shares; and (v) each transaction shall be for the account of
your customer and not for your account.
Subject to the foregoing, however, you may maintain record ownership of such
customers' Shares in an "Omnibus Account" or an account registered in your name
or the name of your nominee, for the benefit of such customers. You understand
that such Shares must be held in a separate account for each shareholder of such
Funds. You represent and warrant to us that you will have full right, power and
authority to effect transactions (including, without limitation, any purchases
and redemptions) in Shares on behalf of all customer accounts provided by you.
V. Relationship With Financial Institutions
Your obligations to us under this Agreement are subject to all the provisions of
the respective distribution agreements entered into between us and each of the
Funds. You understand and agree that in performing your services under this
Agreement you are acting in the capacity of an independent contractor, and we
are in no way responsible for the manner of your performance or for any of your
acts or omissions in connection therewith. It is further understood that neither
this Agreement nor the performance of the services of the respective parties
hereunder shall be considered to constitute an exclusive arrangement, or to
create a partnership, association or joint venture between you and us. In making
available Shares of the Funds under this Agreement, nothing herein shall be
construed to constitute you or any of your agents, employees or representatives
as our agent or employee, or as an agent or employee of the Funds, and you shall
not make any representations to the contrary. As distributor of the Funds, we
shall have full authority to take such action as we may deem advisable in
respect of all matters pertaining to the distribution of the Shares. We shall
not be under any obligation to you, except for obligations expressly assumed by
us in this Agreement.
-3-
<PAGE>
VI. Termination
Either party hereto may terminate this Agreement, without cause, upon ten days'
written notice to the other party. We may terminate this Agreement for cause
upon the violation by you of any of the provisions hereof, such termination to
become effective on the date such notice of termination is mailed to you. If you
are registered as a broker-dealer and affiliated with a bank, this Agreement
shall terminate automatically if either Party ceases to be a member of the NASD.
VII. Assignability
This Agreement is not assignable or transferable, except that we may assign or
transfer this Agreement to any successor distributor of the Funds.
VIII. Miscellaneous
(i) All communications mailed to us should be sent to the above address.
Any notice to you shall be duly given if mailed or delivered to you at
the address specified by you below.
(ii) This Agreement constitutes the entire agreement and understanding
between the parties and supersedes any and all prior agreements
between the parties.
(iii) This Agreement and the rights and obligations of the parties hereunder
shall be governed by and construed under the laws of the State of
Connecticut.
Very truly yours,
PHOENIX EQUITY PLANNING CORPORATION
By _________________________________________
Authorized Signature
____________________________________________
Name and Title
We accept and agree to the foregoing Agreement as of the date set forth below
Financial Institution: __________________________________
By _________________________________________
Authorized Signature, Title
____________________________________________
____________________________________________
Address
(NASD CRD # if applicable _________________ )
Date: ______________________________________
Please return the signed copy of this Sales Contract to Phoenix Equity Planning
Corporation at the above address.
Exhibit 9.2
SUB-TRANSFER AGENT AGREEMENT
<PAGE>
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
between
PHOENIX EQUITY PLANNING CORPORATION
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
1. Terms of Appointment; Duties of the Bank and 1-4
Transfer Agent
2. Fees and Expenses 4
3. Bank as Trustee or Custodian of Retirement Plans 4-5
4. Wire Transfer Operating Guidelines 5-7
5. Data Access and Proprietary Information 7-8
6. Indemnification 8-9
7. Standard of Care 10
8. Covenants of the Transfer Agent and the Bank 10
9. Representations and Warranties of the Bank 11
10. Representations and Warranties of the Transfer Agent 11
11. Termination of Agreement 12
12. Assignment 12
13. Amendment 12
14. Massachusetts Law to Apply 13
15. Force Majeure 13
16. Consequential Damages 13
17. Limitation of Shareholder Liability 13
18. Merger of Agreement 13
19. Counterparts 13
<PAGE>
AGREEMENT effective as of the 1st day of June, 1994, by and between
PHOENIX EQUITY PLANNING CORPORATION, a Connecticut corporation, having its
principal office and place of business at 100 Bright Meadow Boulevard, Enfield,
Connecticut, 06083, (the "Transfer Agent"), and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company having its principal office and place of
business at 225 Franklin Street, Boston, Massachusetts 02110 (the "Bank");
WHEREAS, the Transfer Agent has been appointed by each of the investment
companies (including each series thereof) listed on Schedule A (the "Fund(s)"),
each an open-end diversified management investment company registered under the
Investment Company Act of 1940 as amended, as transfer agent, dividend
disbursing agent and shareholder servicing agent in connection with certain
activities, and the Transfer Agent has accepted each such appointment;
WHEREAS, the Transfer Agent has entered into a Transfer Agency and Service
Agreement with each of the Funds (including each series thereof) listed on
Schedule A pursuant to which the Transfer Agent is responsible for certain
transfer agency and dividend disbursing functions for each Fund's shares
("Shares") and each Fund's shareholders ("Shareholders") and the Transfer Agent
is authorized to subcontract for the performance of its obligations and duties
thereunder in whole or in part with the Bank;
WHEREAS, the Transfer Agent desires to appoint the Bank as sub-transfer
agent, and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenant herein contained,
the parties hereto agree as follows:
1. Duties of the Bank and the Transfer Agent
1.1 Subject to the terms and conditions set forth in this Agreement, the
Bank shall act as the Transfer Agent's non-exclusive sub-transfer agent for
Shares in connection with any accumulation plan, open-account, dividend
reinvestment plan, retirement plan or similar plan provided to Shareholders and
set out in each Fund's currently effective prospectus and statement of
additional information ("Prospectus"), including without limitation any
periodic investment plan or periodic withdrawal program. As used herein the
term "Shares" means the authorized and issued shares of common stock, or shares
of beneficial interest, as the case may be, for each Fund listed in Schedule A.
In accordance with procedures established from time to time by agreement
between the Transfer Agent and the Bank, the Bank and Transfer Agent shall
provide the services listed in this Section 1.
(a) According to the service responsibility schedule attached hereto
for Shareholder accounts and record-keeping the Bank or the
Transfer Agent shall:
(i) receive for acceptance, orders for the purchase of Shares,
and promptly deliver payment and appropriate documentation
thereof to the custodian of each Fund authorized pursuant
to the articles of incorporation or organization of each
Fund (the "Custodian");
(ii) pursuant to purchase orders, issue the appropriate number
of Shares and hold such Shares in the appropriate
Shareholder account;
(iii) receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation
thereof to the Custodian;
(iv) in respect to the transactions in items (i), (ii), and
(iii) above, the Bank shall execute transactions directly
with broker-dealers authorized by each Fund;
(v) at the appropriate time as and when it receives monies
paid to it by the 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;
<PAGE>
(viii) issue replacement certificates for those certificates
alleged to have been lost, stolen or destroyed upon
receipt by the Bank of indemnification satisfactory to the
Bank and protecting the Bank and each Fund, and the Bank
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 the Transfer
Agent and its Shareholders as to the foregoing;
(x) record the issuance of Shares of each Fund and maintain
pursuant to Rule 17Ad-10 (e) of the Securities Exchange
Act of 1934 as amended (the "Exchange Act") a record of
the total number of Shares of each Fund that are
authorized, based upon data provided to it by each Fund or
the Transfer Agent and issued and outstanding, the Bank
shall also provide each Fund on a regular basis with the
total number of Shares which are authorized and issued and
outstanding and 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
issues or sale of such Shares, which functions shall be
the sole responsibility of each Fund or the Transfer
Agent.
1.2 (a) For reports, the Bank shall:
(i) maintain all Shareholder accounts, prepare meeting, proxy,
and mailing lists, withhold taxes on U.S. resident and
non-resident alien accounts, prepare and file U.S.
Treasury reports required with respect to dividends and
distributions by federal authorities for all Shareholders,
prepare confirmation forms and statements of account to
Shareholders for all purchases and redemptions of Shares
and other confirmable transactions in Shareholder account
information.
(b) For blue sky reporting the Bank shall provide a system that will
enable each Fund or the Transfer Agent to monitor the total
number of Shares sold in each State, and each Fund or the
Transfer Agency shall:
(i) identify to the Bank 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 activity for each State, the
responsibility of the Bank for each Fund's blue sky State
registration status is solely limited to the initial
establishment of transactions subject to blue sky
compliance by the Fund or the Transfer Agent and the
reporting of such transactions to the Fund as provided
above.
1.3 Per the attached service responsibility schedule procedures as to who
shall provide certain of the services in Section 1 may be established from time
to time by agreement between the Transfer Agent and the Bank. The Bank may at
times perform only a portion of these services and the Transfer Agent may
perform these services on each Fund's behalf.
1.4 The Bank shall provide additional services on behalf of the Transfer
Agent (i.e., escheat services) as may be agreed upon in writing between the Bank
and the Transfer Agent.
2. Fees and Expenses
2.1 For the performance by the Bank pursuant to this Agreement, the
Transfer Agent agrees to pay the Bank an annual maintenance fee for each
Shareholder account as set out in the initial fee schedule attached hereto. Such
fees and out-of-pocket expenses and advances identified under Section 2.2 below
may be changed from time to time subject to mutual written agreement between the
Transfer Agent and the Bank. For purposes hereof the term account should refer
to any Shareholder account designated as such on the DST mutual fund system (or
any replacement system) provided further that so called omnibus accounts shall
be considered to be a single account.
2.2 In addition to the fees paid under Section 2.1 above, the Transfer
Agent agrees to reimburse the Bank for out-of-pocket expenses, including but not
limited to confirmation production, postage, forms, telephone, microfilm,
microfiche, tabulating proxies, records storage, or advances incurred by the
Bank for the items set out in the fee schedule attached hereto. In addition, any
other expenses incurred by the Bank at the request or with the consent of the
Transfer Agent, will be reimbursed by the Transfer Agent.
<PAGE>
2.3 The Transfer Agent agrees to pay all fees and reimbursable expenses
within five days following the receipt of the respective billing notice. Postage
for mailing of dividends, proxies, Fund reports and other mailings to all
accounts shall be advanced to the Bank by the Transfer Agent at least seven (7)
days prior to the mailing date of such materials.
3. Bank as Trustee or Custodian of Retirement Plans
As agreed upon in writing between the parties, the Bank and Transfer Agent
agree that the Bank may serve as the named custodian or trustee of individual
retirement accounts established under section 408 of the Internal Revenue Code
(the "Code"), tax-sheltered plans established under section 403 (b) of the Code,
qualified plans under section 401(a) of the Code, or money purchase plans,
pension plans or profit sharing plans with a cash deferred arrangement under
section 401(k) of the Code (collectively "Retirement Plans").
3.1 The Bank shall provide certain recordkeeping services as more fully
described in the TRAC-2000 Procedures manual provided to the Fund for
Shareholders who become plan participants of Retirement Plans using TRAC-2000
System.
3.2 The Bank shall:
(a) have no investment responsibility for the selection of
investments, no liability for any investments made for Retirement
Plans other than to maintain custody and provide recordkeeping of
the investments subject to the terms of the Agreement; and
(b) not serve as "Plan Administrator" (as defined in the Employee
Retirement Income Securities Act of 1974, as amended) of any
Retirement Plan, or in any other administrative capacity or other
capacity except as trustee or custodian thereof, the Bank shall
not keep records of Retirement Plan accounts except as provided
herein.
3.3 The Transfer Agent agrees that in any communications from the Transfer
Agent or the Funds to any prospective or actual Shareholder, neither the Funds
nor the Transfer Agent shall state or represent that the Bank has any investment
discretion or other power concerning investments of any Retirement Plan or the
Bank shall serve as plan administrator or have any administrative or other
responsibility for the administration or operation of any Retirement Plan. The
Funds, the Funds' designee, or the Transfer Agent as may be required to comply
with the Code and all other applicable federal and state laws shall:
(a) serve as third party administrators of all Retirement Plans; and
(b) provide all Retirement Plan prototype document design, tax form
preparation (excluding services performed by the Bank under
section 1.2 of this Agreement), discrimination testing and
consulting about Retirement Plan qualification and maintenance.
4. Wire Transfer Operating Guidelines/Articles 4A of the Uniform Commercial Code
4.1 The Bank is authorized to promptly debit the appropriate Transfer Agent
account(s) upon the receipt of a payment order in compliance with the selected
security procedure (the "Security Procedure") chosen for funds transfer and in
the amount of money that the Bank has been instructed to transfer. The Bank
shall execute payment orders in compliance with the Security Procedure and with
the Transfer Agent instructions on the execution date provided that such payment
order is received by the customary deadline for processing such a request,
unless the payment order specifies a later time. All payment orders and
communications received after this time-frame will be deemed to have been
received the next business day.
4.2 The Transfer Agent acknowledges that the Security Procedure it has
designated on the Transfer Agent Selection Form was selected by the Transfer
Agent from Security Procedures offered by the Bank. The Transfer Agent shall
restrict access to confidential information relating to the Security Procedure
to authorized persons as communicated to the Bank in writing. The Transfer Agent
must notify the Bank immediately if it has reason to believe unauthorized
persons may have obtained access to such information or of any change in the
Transfer Agent's authorized personnel. The Bank shall verify the authenticity of
all such instructions according to the Security Procedure.
<PAGE>
4.3 The Bank shall process all payment orders on the basis of the account
number contained in the payment order. In the event of a discrepancy between any
name indicated on the payment order and the account number, the account number
shall take precedence and govern.
4.4 When the Transfer Agent initiates or receives Automated Clearing House
("ACH") credit and debit entries pursuant to these guidelines and the rules of
the National Automated Clearing House Association and the New England Clearing
House Association, the Bank will act as an Originating Depository Financial
Institution and/or receiving depository Financial Institution, as the case may
be, with respect to such entries. Credits given by the Bank with respect to an
ACH credit entry are provisional until the Bank receives final settlement for
such entry from the Federal Reserve Bank. If the Bank does not receive such
final settlement, the Transfer Agent agrees that the Bank shall receive a refund
of the amount credited to the Transfer Agent in connection with such entry, and
the party making payment to the Transfer Agent via such entry shall not be
deemed to have paid the amount of the entry.
4.5 The Bank reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected balance in
the account to be charged at the time of the Bank's receipt of such payment
order; (b) if initiating such payment order would cause the Bank, in the Bank's
sole judgement, to exceed any volume, aggregate dollar, network, time, credit or
similar limits upon wire transfers which are applicable to the Bank; or (c) if
the Bank, in good faith, is unable to satisfy itself that the transaction has
been properly authorized.
4.6 The Bank shall use reasonable efforts to act on all authorized requests
to cancel or amend payment orders received in compliance with the Security
Procedure provided that such requests are received in a timely manner affording
the Bank reasonable opportunity to act. However, the Bank assumes liability if
the request for amendment or cancellation cannot be satisfied.
4.7 The Bank shall assume no responsibility for failure to detect any
erroneous payment order provided that the Bank complies with the payment order
instructions as received and the Bank complies with the Security Procedure. The
Security Procedure is established for the purpose of authenticating payment
orders only and not for the detection of errors in payment orders.
4.8 The Bank shall assume no responsibility for lost interest with respect
to the refundable amount of any unauthorized payment order unless the Bank is
notified of the unauthorized payment order within (30) days or notification by
the Bank of the acceptance of such payment order. In no event (including failure
to execute a payment order) shall the Bank be liable for special, indirect or
consequential damages, even if advised of the possibility of such damages.
4.9 Confirmation of Bank's execution of payment orders shall ordinarily be
provided within 24 hours notice of which may be delivered through the Bank's
proprietary information systems, or by facsimile or call-back. Client must
report any objections to the execution of an order within 30 days.
5. Data Access and Proprietary Information
5.1 The Transfer Agent acknowledges that the data bases, computer programs,
screen formats, report formats, interactive design techniques, and other
information furnished to the Transfer Agent by the Bank are provided solely in
connection with the services rendered under this Agreement and constitute
copyrighted trade secrets or proprietary information of substantial value to the
Bank. Such databases, programs, formats, designs, techniques and other
information are collectively referred to below as "Proprietary Information". The
Transfer Agent agrees that it shall treat all Proprietary Information as
proprietary to the Bank and further agrees that it shall not divulge any
Proprietary Information to any person or organization except as expressly
permitted hereunder. The Transfer Agent agrees for itself and its employees and
agents:
(a) to use such programs and databases (i) solely on the Transfer
Agent's computers, or (ii) solely from equipment at the locations
agreed to between the Transfer Agent and the Bank and (iii) in
accordance with the Bank's applicable user documentation;
<PAGE>
(b) to refrain from copying or duplicating in any way (other than in
the normal course of performing processing on the Transfer Agents
computers) any part of any Proprietary Information;
(c) to refrain from obtaining unauthorized access to any programs,
data or other information not owned by the Transfer Agent, and if
such access if accidently obtained, to respect and safeguard the
same Proprietary Information;
(d) to refrain from causing or allowing information transmitted from
the Bank's computer to the Transfer Agent's terminal to be
retransmitted to any other computer terminal or other device
except as expressly permitted by the Bank, such permission not to
be unreasonably withheld;
(e) that the Transfer Agent shall have access only to those
authorized transactions as agreed to between the Transfer Agent
and the Bank; and
(f) to honor reasonable written requests made by the Bank to protect
at the Bank's expense the rights of the Bank in Proprietary
Information at common law and under applicable statutes.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Section 5. The obligations of this Section 5 shall
survive any earlier termination of this Agreement.
6. Indemnification
6.1 The Bank shall not be responsible for, and the Transfer Agent shall
indemnify and hold the Bank harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payment, expenses and liability arising
out of or attributable to:
(a) all actions of the Bank 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 Transfer Agents' lack of good faith, negligence or willful
misconduct;
(c) the reliance on or use by the Bank or its agents or
subcontractors of information, records, documents or services
which (i) are received by the Bank or its agents or
subcontractors from the Transfer Agent or its duly authorized
representative, and (ii) have been prepared, maintained or
performed by the Transfer Agent including but not limited to any
previous transfer agent or registrar excluding the Bank;
(d) the reliance on, or the carrying out by the Bank or its agents or
subcontractors of any instructions or requests of the Transfer
Agent;
(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.
6.2 At any time the Bank may apply to any officer of the Transfer Agent for
instructions, and may consult with legal counsel acceptable to the Transfer
Agent with respect to any matter arising in connection with the services to be
performed by the Bank under this Agreement, and the Bank and its agents or
subcontractors shall not be liable and shall be indemnified by the Transfer
Agent for any action taken or omitted by it in reliance upon such instructions
or upon the opinion of such counsel.
The Bank, its agents and subcontractors shall be protected and indemnified
in acting upon any paper or document furnished by or on behalf of the Transfer
Agent, 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 the Bank or its agents or subcontractors by machine readable
input, telex, tape, CRT data entry or other similar means authorized by the
Transfer Agent, and shall not be held to have notice of any change of authority
of any person, until receipt of written notice thereof from the Transfer Agent.
The Bank, its agents and subcontractors shall also be protected and indemnified
in recognizing stock certificates which are reasonably believed to bear the
proper manual or facsimile signatures of the officers of the Fund, and the
proper countersignature of any former transfer agent or former registrar, or of
a co-transfer agent or co-registrar.
<PAGE>
6.3 In order that the indemnification provisions contained in this Section
6 shall apply, upon the assertion of a claim for which the Transfer Agent may be
required to indemnify the Bank, the Bank shall promptly notify the Transfer
Agent of such assertion, and shall keep the Transfer Agent advised with respect
to all developments concerning such claim. The Transfer Agent shall have the
option to participate with the Bank in the defense of such claim or to defend
against said claim in its own name or in the name of the Bank.
The Bank shall in no case confess any claim or make any compromise in any
case in which the Transfer Agent may be required to indemnify the Bank except
with the Transfer Agent's prior written consent.
6.4 The indemnity provisions of Section 6 shall survive any earlier
termination of this Agreement.
7. Standard of Care
The Bank shall at all times act in good faith and agrees to use its best
efforts 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 or that of its employees.
8. Covenants of the Transfer Agent and the Bank
8.1 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Transfer Agent 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.
8.2 The Bank 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, the Bank agrees that all such records prepared or
maintained by the Bank relating to the services to be performed by the Bank
hereunder are the property of each Fund or the Transfer Agent and will be
preserved, maintained and made available in accordance with such section and
rules, for monitoring by the Transfer Agent, and will be surrendered promptly to
the Transfer Agent on and in accordance with its request. The Bank shall furnish
adequate resources and office space in order to allow the Transfer Agent or any
governmental authority to inspect all books, procedures, information and records
required hereby.
8.3 The Bank and the Transfer Agent 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
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law.
8.4 In case of any requests or demands for the inspection of the
Shareholder records of the Transfer Agent, the Bank will endeavor to notify the
Transfer Agent and to secure instructions from an authorized officer of the
Transfer Agent as to such inspection. The Bank reserves the right, however, to
exhibit the Shareholder records to any person, whenever it is advised by counsel
that it may be held liable for the failure to exhibit the Shareholder records to
such person.
9. Representations and Warranties of the Bank
The Bank represents and warrants to the Transfer Agent that:
(a) it is a trust company duly organized and existing and in good standing
under the laws of the Commonwealth of Massachusetts;
(b) it is duly qualified to carry on its business in the Commonwealth of
Massachusetts;
(c) it is empowered under applicable laws and by its Charter and By-Laws
to enter into and perform this Agreement;
(d) all requisite corporation proceedings have been taken to authorize it
to enter into and perform this Agreement;
(e) it has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement;
<PAGE>
(f) it is registered as a transfer agent under Section 17A(c)(2) of the
Exchange Act.
10. Representations and Warranties of the Transfer Agent
The Transfer Agent represents and warrants to the Bank that:
(a) it is a Connecticut corporation duly organized and existing and in
good standing under the laws of Connecticut;
(b) it is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement;
(c) all corporate proceedings required by said articles of incorporation
and by-law have been taken to authorize it to enter into and perform
this Agreement;
(d) it is registered as a transfer agent under Section 17A(c)(2) of the
Exchange Act.
11. Termination of Agreement
11.1 This Agreement shall continue for a period of three years (the
"Initial Term") and be renewed or terminated as stated below.
11.2 This Agreement shall terminate upon the termination of the Transfer
Agency Agreement between the Funds and the Transfer Agent.
11.3 This Agreement may be terminated or renewed after the Initial Term by
either party upon ninety (90) days written notice to the other.
11.4 Should either party exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the party exercising its right to terminate. Additionally, the party receiving
the notice to terminate reserves the right to charge the terminating party for
any other reasonable expenses associated with such termination.
12. Assignment
12.1 Except as provided in Section 12.3 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party without the
written consent of the other party.
12.2 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
12.3 The Bank may, without further consent on the part of the Transfer
Agent, subcontract for the performance hereof with (a) Boston Financial Data
Services, Inc., a Massachusetts corporation ("BFDS") which is duly registered as
a transfer agent pursuant to Section 17A (c)(2) of the Exchange Act ("Section
17A (c)(2); (b) National Financial Data Services, Inc., a subsidiary of BFDS
duly registered as a transfer agent pursuant to Section 17A (c)(2) or (c) a BFDS
affiliate; provided, however, that the Bank shall be as fully responsible to the
Transfer Agent for the acts and omissions of any subcontractor as it is for its
own acts and omissions.
13. Amendment
This Agreement may be amended or modified by a written agreement executed
by both parties.
14. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts.
15. Force Majeure
In the event either party is unable to perform its obligations under the
terms of this Agreement because of 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.
<PAGE>
16. Consequential Damages
Neither party to this agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
17. Limitations of Shareholder Liability
The Bank hereby expressly acknowledges that recourse against the Funds
shall be subject to those limitations provided by governing law and the
Declaration of Trust of the Funds, as applicable, and agrees that obligations
assumed by the Funds pursuant to the Transfer Agency Agreement shall be limited
in all cases to the Funds and their respective assets. The Bank shall not seek
satisfaction from the Shareholders or any Shareholders of the Funds, nor shall
the Bank seek satisfaction of any obligations from the Trustees/Directors or any
individual Trustee/Director of the Funds.
18. Merger of Agreement
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.
19. Counterparts
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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the 21st day of July 1994.
PHOENIX EQUITY PLANNING CORPORATION
BY: /s/ William R. Moyer
---------------------------------------
William R. Moyer
Senior Vice President, Finance
ATTEST:
/s/Patricia O. McGlaughlin
- -----------------------------------
STATE STREET BANK AND TRUST COMPANY
BY: /s/Donald E. Logue
---------------------------
Executive Vice President
ATTEST:
/s/S. Cesso
- -------------------------------
<PAGE>
STATE STREET BANK & TRUST COMPANY
FEE SCHEDULE
FEE INFORMATION FOR SERVICES AS PLAN
TRANSFER AND DIVIDEND DISBURSEMENT AGENT
THE PHOENIX FUNDS
PHOENIX SERIES FUNDS
PHOENIX HIGH YIELD FUND SERIES--A & B SHARES
*NATIONAL BOND FUND MERGED WITH A SHARES
PHOENIX U.S. GOVERNMENT SECURITIES FUND SERIES--A & B SHARES
*NATIONAL FEDERAL SECURITIES TRUST MERGED WITH A SHARES
PHOENIX BALANCED FUND SERIES--A & B SHARES
PHOENIX CONVERTIBLE FUND SERIES--A & B SHARES
PHOENIX GROWTH FUND SERIES--A & B SHARES
PHOENIX MONEY MARKET FUND SERIES--A & B SHARES
PHOENIX MULTI PORTFOLIO FUNDS
PHOENIX TAX EXEMPT BOND PORTFOLIO--A & B SHARES
*NATIONAL SECURITIES TAX EXEMPT BONDS MERGED WITH A SHARES
PHOENIX CAPITAL APPRECIATION PORTFOLIO--A & B SHARES
PHOENIX INTERNATIONAL PORTFOLIO--A & B SHARES
PHOENIX ENDOWMENT EQUITY PORTFOLIO
PHOENIX ENDOWMENT FIXED-INCOME PORTFOLIO
OTHER PHOENIX FUNDS
PHOENIX TOTAL RETURN FUND, INC.--A & B SHARES
*NATIONAL TOTAL RETURN MERGED WITH A SHARES
PHOENIX MULTI-SECTOR FIXED INCOME FD, INC.--A & B SHARES
*PHOENIX HIGH QUALITY MERGED WITH A SHARES
PHOENIX EQUITY OPPORTUNITIES FUND--A & B SHARES
*A SHARES FORMERLY NATIONAL STOCK FUND
PHOENIX WORLDWIDE OPPORTUNITIES FUND--A & B SHARES
PHOENIX INCOME AND GROWTH FUND--A & B SHARES
PHOENIX CALIFORNIA TAX EXEMPT BOND FUND--A & B SHARES
PHOENIX ASSET RESERVE--A & B SHARES
<PAGE>
STATE STREET BANK & TRUST COMPANY
FEE SCHEDULE
FEE INFORMATION FOR SERVICES AS PLAN
TRANSFER AND DIVIDEND DISBURSEMENT AGENT
THE PHOENIX FUNDS
State Street shall charge PEPCO an annual fee based on a per shareholder
account per fund class for the next three (3) years equal to the following:
PHOENIX FEE SCHEDULE
Annual Per Account Fee
1994 $6.75
1995-1996* 1-600,000 ACCTS $7.00
600,000-1,000,000 ACCTS $6.75
OVER 1,000,000 ACCTS $6.60
Monthly Minimum/Fund Applied to Acct. Fee $1,500.00
Annual Closed Account Fee $1.20
Checkwriting Fees:
Per Check Cleared $1.00
Privilege Set-Up $5.00
Annual 12(B)1 Fee (Billed Quarterly) $1.00
Annual Investor Processing Fee
(Per Investor) $1.80
Other Fees: (1994-1996)
Management $27.00-$37.00 Per Hr. Per FTE
Fund Administrator $29.00 Per Hr. Per FTE
All Transfer Agent Functions $22.50 Per Hr. Per FTE
Liaisons Over 4,000/mth $26.00 Per Item
[bullet] This schedule is based on 700K accounts, 26 funds, and 4,000 liaison
items.
[bullet] If the account base decreases significantly, the per account fee will
be reviewed by both parties.
[bullet] If 12(B)1 product is discontinued the annual per account fee will be
increased by $1.00 [bullet]
[bullet] Additional Fund Administrators will be added as new funds are opened
(ratio 1:8) and charged as detailed above.
[bullet] This schedule does not include fees for Image terminals, conversions,
acquisitions, customer service, audio response, 401 recordkeeping, new product
lines, and out-of-pockets.
In witness whereof, Phoenix Equity Planning Corporation and State Street
Bank and Trust Company have agreed upon this fee schedule and have caused this
fee schedule to be executed in their names and on their behalf through their
duly authorized officers for the next three years.
PHOENIX EQUITY PLANNING CORPORATION STATE STREET BANK & TRUST CO.
By /s/Edward P. Hourihan By /s/ Mark Toomey
------------------------ --------------------------
Title Vice President Title Vice President
Date 7/15/94 Date 7/12/74
*The fee for this period shall be adjusted by the parties to reflect then
prevailing levels of service furnished by State Street.
<PAGE>
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
SERVICE RESPONSIBILITY SCHEDULE
<TABLE>
<CAPTION>
FUNCTIONAL PEPCO BFDS
RESPONSIBILITIES (Transfer Agent) (Sub Transfer Agent)
<S> <C> <C>
A. Transmission Processing:
Remittance Cash Processing X
New Account Setup
[bullet] Regular X
[bullet] Fiduciary X
[bullet] Quality Assurance X
Transfers
[bullet] Regular X
[bullet] Fiduciary X
[bullet] Dealer X
[bullet] Quality Assurance X
Redemptions
[bullet] Regular X
[bullet] Fiduciary X
[bullet] Quality Assurance X
Wire Order
[bullet] Set-Up X
[bullet] Settlement X
[bullet] Quality Assurance X
[bullet] Monitoring of Outstanding Trades X
Maintenance
[bullet] Registration X
[bullet] Rep/Dealer File X *X
[bullet] Sub Files X
[bullet] Quality Assurance X
[bullet] ACH Prenote Reject X
[bullet] All Account Options X
Adjustments (through 12/94)
[bullet] Account Corrections *X
[bullet] LOI Processing *X
[bullet] Year-End Accounts Adjustments *X
[bullet] Sharelot Adjustments *X
[bullet] Bounced Checks *X
[bullet] ACH Cancellations *X
[bullet] Quality Assurance *X
B. Customer Service:
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Telephones X
[bullet] Customer Inquiry X
[bullet] Transaction Line
[bullet] Timer Exchanges *X
[bullet] Liaison Support (Through 12/4) *X
Correspondence X
[bullet] Shareholder/Dealer Letters X
[bullet] Transfer of Assets Letters/Followup X
[bullet] Notice of Levy X
Dealer Services
[bullet] FundsServ/Networking Implementation X
[bullet] Dealer Security Access X
[bullet] Enhancements-Communications/Testing X
???ent Services
[bullet] Product Development/Implementation X
[bullet] Mailings X
[bullet] Year End Reporting X
C. Support:
Image/AWD
[bullet] Scanning X X
[bullet] Work Distribution X
[bullet] Retrieval X
[bullet] Technical Support X
Microfilm/Research Prior Agent X *X
[bullet] Media Production
[bullet] Design/Printing X
[bullet] Marketing Materials X
[bullet] Forms Development X
Corporate Actions
[bullet] Report Generation X
[bullet] Proxy Solicitation X
[bullet] Periodic Financial Activities (DIVs, PACs,
SWPs, etc.) X
Compliance/Regulatory
[bullet] Escheatment X
[bullet] Tax Filings X
[bullet] Lost Shareholder Recovery X
[bullet] BNotice/CNotice Reporting *X
</TABLE>
<PAGE>
<TABLE>
<S> <C>
[bullet] Lost Certificate Processing/SIC *X
[bullet] Reporting
Recon/Control
[bullet] Cash Settlement X
[bullet] Account Reconcilement X
[bullet] Commission Payment X
[bullet] Automated Trade Settlement X
[bullet] Balance Credit Review X
[bullet] Reclaims *X
[bullet] Dividend Processing X
Financial Reporting
[bullet] Billing to the Fund X
Will be internalized to PEPCO
</TABLE>
Exhibit 9.3
AMENDED AND RESTATED FINANCIAL AGENT AGREEMENT
<PAGE>
AMENDED AND RESTATED FINANCIAL AGENT AGREEMENT
THIS AGREEMENT made and concluded as of this 19th day of November, 1997
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
<PAGE>
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.
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. 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).
<PAGE>
9. 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.
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 EQUITY SERIES FUND
PHOENIX INCOME AND GROWTH FUND
PHOENIX INVESTMENT TRUST 97
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/ Michael E. Haylon
--------------------------------
Michael E. Haylon
Executive Vice President
PHOENIX EQUITY PLANNING
CORPORATION
By: /s/ Philip R. McLoughlin
--------------------------------
Philip R. McLoughlin
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:
<TABLE>
<S> <C>
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 through $500 million: 3 basis points on average daily net assets
Greater than $500 million: 1.5 basis points on average daily net assets
</TABLE>
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:
<TABLE>
<CAPTION>
Classification Series Name
- -------------- -----------
<S> <C>
Money Market Phoenix Money Market Fund Series
Equity Phoenix Aggressive Growth Fund Series
Phoenix Core Equity Fund
Phoenix Equity Opportunities Fund
Phoenix Growth and Income Fund
Phoenix Growth Fund Series
Phoenix Micro Cap Fund
Phoenix Mid Cap Portfolio
Phoenix Small Cap Fund
Phoenix Small Cap Value Fund
Phoenix Strategic Theme Fund
Phoenix Value Equity Fund
<PAGE>
<CAPTION>
Classification Series Name
- -------------- -----------
<S> <C>
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 Strategic Income Fund
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
</TABLE>
Exhibit 9.4
FIRST AMENDMENT TO
AMENDED AND RESTATED FINANCIAL AGENT AGREEMENT
<PAGE>
FIRST AMENDMENT TO
AMENDED AND RESTATED FINANCIAL AGENT AGREEMENT
THIS AMENDMENT made effective as of the 27th day of February, 1998 amends that
certain Amended and Restated Financial Agent Agreement dated November 19, 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 eliminate
the provision that states that Financial Agent is not responsible for the acts
or omissions of any agent appointed by it:
NOW, THEREFORE, in consideration of the foregoing premise, the first
sentence of Paragraph 4 of the Agreement is amended to read as follows:
"Financial Agent shall not be liable for anything done or omitted to be
done by it in the exercise of due care in discharging its duties
specifically described hereunder."
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their duly authorized officers on this 23rd day of March, 1998.
PHOENIX CALIFORNIA TAX EXEMPT BONDS, INC.
PHOENIX EQUITY SERIES FUND
PHOENIX INCOME AND GROWTH FUND
PHOENIX INVESTMENT TRUST 97
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/ Michael E. Haylon
----------------------------------------
Michael E. Haylon
Executive Vice President
PHOENIX EQUITY PLANNING CORPORATION
By: /s/ Philip R. McLoughlin
----------------------------------------
Philip R. McLoughlin
President
Exhibit 9.5
SECOND AMENDMENT TO
AMENDED AND RESTATED FINANCIAL AGENT AGREEMENT
<PAGE>
SECOND AMENDMENT TO
AMENDED AND RESTATED FINANCIAL AGENT AGREEMENT
THIS AMENDMENT made effective as of the 1st day of June, 1998 amends that
certain Amended and Restated Financial Agent Agreement dated November 19, 1997,
as amended March 23, 1998, 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 Schedule A of the Agreement to
reflect the recently approved fee structure:
NOW, THEREFORE, in consideration of the foregoing premise, Schedule A is
hereby replaced with the 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 31st day of July, 1998.
PHOENIX CALIFORNIA TAX EXEMPT BONDS, INC.
PHOENIX EQUITY SERIES FUND
PHOENIX INCOME AND GROWTH FUND
PHOENIX INVESTMENT TRUST 97
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/ Michael E. Haylon
------------------------------
Michael E. Haylon
Executive Vice President
PHOENIX EQUITY PLANNING CORPORATION
By: /s/ Philip R. McLoughlin
------------------------------
Philip R. McLoughlin
President
<PAGE>
Schedule A
Revised Fee Schedule
Fee Information For Services as Financial Agent
For its services hereunder Financial Agent shall be paid a fee equal to the sum
of (1) the documented cost of fund accounting and related services provided by
PFPC, Inc., as subagent, to Financial Agent, plus (2) the documented cost to
Financial Agent to provide financial reporting and tax services and oversight
of subagent's performance.
The current PFPC fees are attached hereto and made a part hereof.
<PAGE>
PFPC Fee Schedule
<TABLE>
<CAPTION>
Assets Under Management Fees
---------------------------------------------------------
<S> <C>
$0 - $200,000,000 0.0850%
---------------------------------------------------------
$200 - $400,000,000 0.0500%
---------------------------------------------------------
$400 - $600,000,000 0.0300%
---------------------------------------------------------
$600 - $800,000,000 0.0200%
---------------------------------------------------------
$800 - $1,000,000,000 0.0150%
---------------------------------------------------------
greater than $1,000,000,000 0.0125%
---------------------------------------------------------
Minimum Fund Fee $84,000
---------------------------------------------------------
Additional Class $12,000
---------------------------------------------------------
</TABLE>
Existing Portfolios:
- --------------------
Asset Based Fees less than $50MM WAIVED
Class Fees - WAIVED
Minimum Fund Fees - WAIVED
New Portfolios (First Year):
- ----------------------------
Asset Based Fees less than $50MM - 50% WAIVED
Class Fees less than $25MM per Class - WAIVED
Minimum Fund Fees - WAIVED
New Portfolios (There After):
- -----------------------------
Asset Based Fees less than $50MM - 25% WAIVED
Class Fees less than $25MM per Class - 50% WAIVED
Minimum Fund Fees less than $50MM - 50% WAIVED
Minimum Fund Fees $50-100MM - 25% WAIVED
Variable Unit Investment Trust Valuation and Reporting
- ------------------------------------------------------
$1,500 per Unit Investment Trust
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. 64 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated August 7, 1998, relating to the financial
statements and financial highlights appearing in the June 30, 1998 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/ PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
October 1, 1998
Exhibit 18.1
AMENDED AND RESTATED
PLAN PURSUANT TO RULE 18f-3
<PAGE>
PHOENIX FUNDS
(the "Funds")
AMENDED AND RESTATED
PLAN PURSUANT TO RULE 18f-3
under the
INVESTMENT COMPANY ACT OF 1940
1. Introduction
------------
Pursuant to Rule 18f-3 under the Investment Company Act of 1940, as
amended ("1940 Act"), this Plan describes the multi-class system for the Funds,
including the separate classes of shares' arrangements for distribution, the
method for allocating expenses to those classes and any related conversion or
exchange privileges applicable to these classes.
Upon the original effective date of this Plan, the Funds shall offer
multiple classes of shares, as described herein, pursuant to Rule 18f-3 and this
Plan.
2. The Multi-Class Structure
-------------------------
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 ("Multi-Class Portfolios"). Shares of the Multi-Class Portfolios
shall represent an equal pro rata interest in the respective Multi-Class
Portfolio and, generally, shall have identical voting, dividend, liquidation,
and other rights, preferences, powers, restrictions, limitations, qualifications
and terms and conditions, except that: (a) each class shall have a different
designation; (b) each class shall bear any Class Expenses, as defined by Section
2(b), below; (c) each class shall have exclusive voting rights on any matter
submitted to shareholders that relates solely to its distribution arrangement;
and (d) each class shall have separate voting rights on any matter submitted to
shareholders in which the interests of one class differ from the interests of
any other class. 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.
a. Distribution Plans
------------------
The Funds have adopted Distribution Plans pursuant to Rule 12b-1 with
respect to each Multi-Class Portfolio, containing substantially the following
terms:
i. Class A shares of each Multi-Class Portfolio shall
reimburse Phoenix Equity Planning Corporation (the "Distributor") for costs and
expenses incurred in connection with distribution and marketing of shares
thereof, as provided in the Class A Distribution Plan and any supplements
thereto, subject to an annual limit of 0.25%, or in some cases 0.30%, of the
average daily net assets of a Multi-Class Portfolio's Class A shares.
<PAGE>
-2-
ii. Class B 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 B
Distribution Plan and any supplements thereto, subject to an annual limit of
1.00% of the average daily net assets of a Multi-Class Portfolio's Class B
shares.
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.
b. Allocation of Income and Expenses
---------------------------------
i. General.
--------
The gross income, realized and unrealized capital gains and
losses and expenses (other than Class Expenses, as defined below) of each
Multi-Class Portfolio shall be allocated to each class on the basis of its net
asset value relative to the net asset value of the Multi-Class Portfolio.
Expenses to be so allocated include expenses of the Funds that are not
attributable to a particular Multi-Class Portfolio or class of a Multi-Class
Portfolio but are allocated to a Multi- Class Portfolio ("Fund Expenses") and
expenses of a particular Multi-Class Portfolio that are not attributable to a
particular class of that Multi-Class Portfolio ("Portfolio Expenses"). Fund
Expenses include, but are not limited to, trustees' fees, insurance costs and
certain legal fees. Portfolio Expenses include, but are not limited to, certain
state registration fees, custodial fees, advisory fees and other expenses
relating to the management of the Multi-Class Portfolio's assets.
ii. Class Expenses.
---------------
Expenses attributable to a particular class ("Class Expenses")
shall be limited to: (1) transfer agency fees; (2) stationery, printing,
postage, and delivery expenses relating to preparing and distributing
shareholder reports, prospectuses, and proxy statements; (3) state Blue Sky
registration fees; (4) SEC registration fees; (5) expenses of administrative
personnel and services to the extent related to another category of
class-specific expenses; (6) trustees' fees and expenses; (7) accounting
expenses, auditors' fees, litigation expenses, and legal fees and expenses; and
(8) expenses incurred in connection with shareholder meetings. Expenses
described in subsection (a) (i) and (ii) above of this paragraph must be
allocated to the class for which they are incurred. All other expenses described
in this paragraph will be allocated as Class Expenses, if a Fund's President and
Treasurer have determined, subject to Board approval or
<PAGE>
-3-
ratification, which of such categories of expenses will be treated as Class
Expenses, consistent with applicable legal principles under the 1940 Act and the
Internal Revenue Code of 1986, as amended ("Code"). The difference between the
Class Expenses allocated to each share of a class during a year and the Class
Expenses allocated to each share of any other class during such year shall at
all times be less than .50% of the average daily net asset value of the class of
shares with the smallest average net asset value. The afore-described
description of Class Expenses and any amendment thereto shall be subject to the
continuing availability of an opinion of counsel or a ruling from the Internal
Revenue Service to the effect that any such allocation of expenses or the
assessment of higher distribution fees and transfer agency costs on any class of
shares does not result in any dividends or distributions constituting
"preferential dividends" under the Code.
In the event that a particular expense is no longer reasonably
allocable by class or to a particular class, it shall be treated as a Fund
Expense or Portfolio Expense as applicable, and in the event a Fund Expense or
Portfolio Expense becomes allocable as a Class Expense, it shall be so
allocated, subject to compliance with Rule 1 8f-3 and Board approval or
ratification.
The initial determination of expenses that will be allocated
as Class Expenses and any subsequent changes thereto as set forth in this Plan
shall be reviewed by the Board of Trustees and approved by such Board and by a
majority of the Trustees who are not "interested persons" of the Fund, as
defined in the 1940 Act ("Independent Trustees").
iii. Waivers or Reimbursements of Expenses.
--------------------------------------
Investment Advisor may waive or reimburse its management fee
in whole or in part provided that the fee is waived or reimbursed to all shares
of the Fund in proportion to the relative average daily net asset values.
Investment Advisor or a related entity who charges a fee for a
Class Expense may waive or reimburse that fee in whole or in part only if the
revised fee more accurately reflects the relative cost of providing to each
Multi-Class Portfolio the service for which the Class Expense is charged.
Distributor may waive or reimburse a Rule 12b- 1 Plan fee
payment in whole or in part.
c. Exchange Privileges
-------------------
Shareholders of a Multi-Class Portfolio may exchange shares of
a particular class for shares of the same class in another Multi-Class
Portfolio, at the relative net asset values of the respective shares to be
exchanged and with no sales charge, provided the shares to be acquired in the
exchange are, as may be necessary, qualified for sale in the shareholder's state
of residence and subject to the applicable requirements, if any, as to minimum
amount. Each Multi-Class
<PAGE>
-4-
Portfolio reserves the right to temporarily or permanently terminate exchange
privileges, impose conditions upon the exercision of exchange privileges, or
reject any specific order for any dealer, shareholder or person whose
transactions seem to follow a timing pattern, including those who request more
than one exchange out of a Multi-Class Portfolio within any thirty (30) day
period. Each Multi-Class Portfolio reserves the right to terminate or modify
these exchange privileges at any time upon giving prominent notice to
shareholders at least 60 days in advance.
d. Conversion Feature
------------------
Class B Shares of a Multi-Class Portfolio will automatically convert to
Class A Shares of that portfolio, without sales charge, at the relative net
asset values of each such classes, not later than eight years from the
acquisition of the Class B 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 to the effect that the conversion of
shares does not constitute a taxable event under federal income tax law.
3. Board Review
------------
a. Approval of Amended and Restated Plan
-------------------------------------
The Board of Trustees, including a majority of the Independent
Trustees, at a meeting held on November 19, l997, approved the Amended and
Restated Plan based on a determination that the Plan, including the expense
allocation, is in the best interests of each class and Multi-Class Portfolio
individually and of the Funds. Their determination was based on their review of
information furnished to them which they deemed reasonably necessary and
sufficient to evaluate the Plan.
b. Approval of Amendments
----------------------
The Plan may not be amended materially unless the Board of Trustees,
including a majority of the Independent Trustees, have found that the proposed
amendment, including any proposed related expense allocation, is in the best
interests of each class and Multi-Class Portfolio individually and of the Funds.
Such funding shall be based on information required by the Board and furnished
to them that the Board deems reasonably necessary to evaluate the proposed
amendment.
c. Periodic Review
---------------
The Board shall review reports of expense allocations and such other
information as they request at such times, or pursuant to such schedule, as they
may determine consistent with applicable legal requirements.
<PAGE>
-5-
4. Contracts
---------
Any agreement related to the Multi-Class System shall require the
parties thereto to furnish to the Board of Trustees, upon their request, such
information as is reasonably necessary to permit the Trustees to evaluate the
Plan or any proposed amendment.
5. Effective Date
--------------
The Amended and Restated Plan, having been reviewed and approved by the
Board of Trustees and the Independent Trustees, shall take effect as of the
first day of each Fund's current fiscal year.
6. Amendments
----------
The Plan may not be amended to modify materially its terms unless such
amendment has been approved in the manner specified in Section 3(b) of this
Plan.
<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 EQUITY SERIES FUND:
PHOENIX CORE EQUITY FUND X X X X
PHOENIX GROWTH AND INCOME FUND X X X X
PHOENIX INCOME AND GROWTH FUND X X -- --
PHOENIX INVESTMENT TRUST 97:
PHOENIX SMALL CAP VALUE FUND X X X X
PHOENIX VALUE EQUITY FUND X X 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
<PAGE>
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>
Exhibit 18.2
FIRST AMENDMENT TO THE 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 19, 1997, is hereby amended as follows:
The Board of Directors/Trustees has granted authority for the following
additional Funds to issue Class C Shares:
Phoenix Income and Growth Fund
Phoenix Multi-Portfolio Fund: Phoenix International Fund
Phoenix Worldwide Opportunities Fund
Accordingly, Schedule A is amended as attached hereto.
This Amendment was approved by the Board of Directors/Trustees at a
meeting held on August 26, 1998.
/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 EQUITY SERIES FUND:
PHOENIX CORE EQUITY FUND X X X X
PHOENIX GROWTH AND INCOME FUND X X X X
PHOENIX INCOME AND GROWTH FUND X X X --
PHOENIX INVESTMENT TRUST 97:
PHOENIX SMALL CAP VALUE FUND X X X X
PHOENIX VALUE EQUITY FUND X X X X
PHOENIX MULTI-PORTFOLIO FUND:
EMERGING MARKETS BOND PORTFOLIO X X X X
INTERNATIONAL PORTFOLIO X 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
<PAGE>
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 X --
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000034273
<NAME> PHOENIX WORLDWIDE OPPORTUNITIES FUND
<SERIES>
<NUMBER> 001
<NAME> CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 144750
<INVESTMENTS-AT-VALUE> 196259
<RECEIVABLES> 1099
<ASSETS-OTHER> 12
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 197370
<PAYABLE-FOR-SECURITIES> 2024
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1303
<TOTAL-LIABILITIES> 3326
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 131260
<SHARES-COMMON-STOCK> 14768
<SHARES-COMMON-PRIOR> 14235
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (420)
<ACCUMULATED-NET-GAINS> 11698
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 51507
<NET-ASSETS> 194043
<DIVIDEND-INCOME> 2525
<INTEREST-INCOME> 437
<OTHER-INCOME> (198)
<EXPENSES-NET> (2482)
<NET-INVESTMENT-INCOME> 282
<REALIZED-GAINS-CURRENT> 15873
<APPREC-INCREASE-CURRENT> 31296
<NET-CHANGE-FROM-OPS> 47451
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1560)
<DISTRIBUTIONS-OF-GAINS> (16214)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1701
<NUMBER-OF-SHARES-REDEEMED> (2883)
<SHARES-REINVESTED> 1716
<NET-CHANGE-IN-ASSETS> 30183
<ACCUMULATED-NII-PRIOR> 1361
<ACCUMULATED-GAINS-PRIOR> 12893
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1279
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2482
<AVERAGE-NET-ASSETS> 170468
<PER-SHARE-NAV-BEGIN> 10.75
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> 2.97
<PER-SHARE-DIVIDEND> (.13)
<PER-SHARE-DISTRIBUTIONS> (1.20)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.40
<EXPENSE-RATIO> 1.42
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000034273
<NAME> PHOENIX WORLDWIDE OPPORTUNITIES FUND
<SERIES>
<NUMBER> 002
<NAME> CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 144750
<INVESTMENTS-AT-VALUE> 196259
<RECEIVABLES> 1099
<ASSETS-OTHER> 12
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 197370
<PAYABLE-FOR-SECURITIES> 2024
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1303
<TOTAL-LIABILITIES> 3326
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 131260
<SHARES-COMMON-STOCK> 902
<SHARES-COMMON-PRIOR> 799
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (420)
<ACCUMULATED-NET-GAINS> 11698
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 51507
<NET-ASSETS> 194043
<DIVIDEND-INCOME> 2525
<INTEREST-INCOME> 437
<OTHER-INCOME> (198)
<EXPENSES-NET> (2482)
<NET-INVESTMENT-INCOME> 282
<REALIZED-GAINS-CURRENT> 15873
<APPREC-INCREASE-CURRENT> 31296
<NET-CHANGE-FROM-OPS> 47451
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (82)
<DISTRIBUTIONS-OF-GAINS> (923)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 235
<NUMBER-OF-SHARES-REDEEMED> (232)
<SHARES-REINVESTED> 101
<NET-CHANGE-IN-ASSETS> 2443
<ACCUMULATED-NII-PRIOR> 1361
<ACCUMULATED-GAINS-PRIOR> 12893
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1279
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2482
<AVERAGE-NET-ASSETS> 170468
<PER-SHARE-NAV-BEGIN> 10.53
<PER-SHARE-NII> (.06)
<PER-SHARE-GAIN-APPREC> 2.90
<PER-SHARE-DIVIDEND> (.11)
<PER-SHARE-DISTRIBUTIONS> (1.20)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.04
<EXPENSE-RATIO> 2.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
