As filed with the Securities and Exchange Commission on April 24, 1997.
Registration Nos. 33-9069
811-1442
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 15 [X]
AND/OR
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 27
(CHECK APPROPRIATE BOX OR BOXES) [X]
------------
Phoenix Strategic Allocation Fund, Inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
------------
101 Munson Street, Greenfield, Massachusetts 01301
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
C/O PHOENIX EQUITY PLANNING CORPORATION
(800) 243-1574
(REGISTRANT'S TELEPHONE NUMBER)
------------
Philip R. McLoughlin
Vice Chairman and Chief Executive Officer
Phoenix Duff & Phelps Corporation
56 Prospect Street
Hartford, Connecticut 06115
(NAME AND ADDRESS OF AGENT FOR SERVICE)
It is proposed that this filing will become effective (check
appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[x] on May 1, 1997 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on pursuant to paragraph (a)(2) 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. Declaration
Pursuant to Rule 24f-2.
Registrant has registered an indefinite number of its shares under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act
of 1940. Registrant filed with the Commission the notice required by Rule 24f-2
with respect to the fiscal year ended December 31, 1996 on February 21,
1997.
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
CROSS REFERENCE SHEET REQUIRED BY RULE 495 UNDER THE SECURITIES ACT OF 1933
<TABLE>
PART A
INFORMATION REQUIRED IN PROSPECTUS
<CAPTION>
ITEM
NUMBER 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 Performance Information; Investment
Objective and Policies
5. Management of the Fund Management of the Fund; Distributor and
6. Capital Stock and Other Securities Distribution Plans; Organization of the Fund;
Dividends, Distributions and Taxes;
Net Asset Value
7. Purchase of Securities Being Offered Distributor and Distribution Plans; How to Buy
Shares
8. Redemption or Repurchase How to Redeem Shares
9. Legal Proceedings Not Applicable
PART B
Information Required in Statement of Additional Information
ITEM
NUMBER STATEMENT OF ADDITIONAL INFORMATION CAPTION
- ------ -------------------------------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History The Fund
13. Investment Objective and Policies Investment Objective and Policies; Investment
Restrictions
14. Management of the Fund Directors and Officers
15. Control Persons and Principal Holders
of Securities Directors and Officers
16. Investment Advisory and Other Services Services of the Adviser; Plans of Distribution
17. Brokerage Allocation Portfolio Transactions
18. Capital Stock and Other Securities The Fund
19. Purchase, Redemption and Pricing of How to Buy Shares; Redemption of Shares;
Securities Being Offered Portfolio Turnover Valuations
20. Tax Status Dividends, Distribution and Taxes
21. Underwriters Plans of Distribution
22. Calculations of Performance Data Not Applicable
23. Financial Statements Financial Statements
PART C
The information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
</TABLE>
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
101 Munson Street
Greenfield, MA 01301
PROSPECTUS
May 1, 1997
PHOENIX STRATEGIC ALLOCATION FUND, INC. (the "Fund") is a diversified,
open-end management investment company with an investment objective to provide
the highest total return consistent with reasonable risk. The Fund invests
principally in stocks, bonds and money market instruments and may adjust the
proportion of its assets invested in the different types of securities whenever,
in the opinion of the Fund's investment adviser, the adjustment will contribute
to the attainment of the Fund's investment objective. In seeking to achieve its
investment objective, the Fund may, to the extent permitted by its fundamental
policies, write (sell) covered call options, purchase call and put options,
engage in transactions in financial futures contracts and related options,
invest in repurchase agreements, lend portfolio securities and engage in
portfolio trading. 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 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 May 1, 1997, which has been filed with the Securities and
Exchange Commission (the "Commission") and is available at no charge by calling
1-800-243-4361 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.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY BANK, CREDIT UNION, OR UNAFFILIATED 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/EXCHANGES: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY): (800) 243-1926
<PAGE>
TABLE OF CONTENTS
Page
----
INTRODUCTION............................................................... 3
FUND EXPENSES.............................................................. 4
FINANCIAL HIGHLIGHTS....................................................... 5
PERFORMANCE INFORMATION.................................................... 6
INVESTMENT OBJECTIVE AND POLICIES.......................................... 6
INVESTMENT TECHNIQUES AND RELATED RISKS.................................... 9
INVESTMENT RESTRICTIONS.................................................... 10
PORTFOLIO TURNOVER......................................................... 11
MANAGEMENT OF THE FUND..................................................... 11
DISTRIBUTION PLANS......................................................... 12
HOW TO BUY SHARES.......................................................... 13
INVESTOR ACCOUNTS AND SERVICES AVAILABLE................................... 18
NET ASSET VALUE............................................................ 21
HOW TO REDEEM SHARES....................................................... 21
DIVIDENDS, DISTRIBUTIONS AND TAXES......................................... 22
ADDITIONAL INFORMATION .................................................... 23
2
<PAGE>
INTRODUCTION
This Prospectus describes the shares offered by and operation of Phoenix
Strategic Allocation Fund, Inc. (the "Fund"). The Fund is a diversified open-end
management investment company established as a corporation under the laws of the
Commonwealth of Massachusetts on November 22, 1966. The Fund's investment
objective is to provide the highest total return consistent with reasonable
risk.
THE INVESTMENT ADVISER
Phoenix Investment Counsel, Inc. ("PIC" or the "Adviser") is the investment
adviser of the Fund and its staff selects and supervises the investments in the
Fund's portfolio. The Adviser is a subsidiary of Phoenix Duff & Phelps
Corporation and, prior to November 1, 1995, was an indirect wholly-owned
subsidiary of Phoenix Home Life Mutual Insurance Company. See "Management of the
Fund" for a description of the Investment Advisory Agreement and management
fees.
DISTRIBUTOR AND DISTRIBUTION PLANS
Phoenix Equity Planning Corporation ("Equity Planning" or "Distributor"),
serves as National Distributor of the Fund's shares. See "Distribution Plans"
and the Statement of Additional Information. Equity Planning also acts as
financial agent of the Fund and as such receives a fee. See "The Financial
Agent." Equity Planning also serves as the Fund's transfer agent. See "The
Custodian and Transfer Agent."
The Fund has adopted distribution plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940 as amended (the "1940 Act"). Pursuant to the
distribution plan adopted for Class A Shares, the Fund may pay to the
Distributor amounts not exceeding 0.25% annually 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 for furnishing shareholder
services. Pursuant to the distribution plan adopted for Class B Shares, the Fund
is authorized to pay up to 1.00% annually of the Fund's average daily Class B
Share net assets for distribution expenditures incurred in connection with the
sales and promotion of Class B Shares and for furnishing shareholder services.
See "Distribution Plans."
PURCHASE OF SHARES
The Fund offers two classes of shares of common stock which may be purchased
at a price equal to their net asset value per share plus sales charges which, at
the election of the purchaser, may be imposed (i) at the time of purchase (the
"Class A Shares"), or (ii) on a contingent deferred basis (the "Class B
Shares"). Completed applications for the purchase of shares should be mailed to
the Phoenix Funds, c/o State Street Bank and Trust Company, P.O. Box 8301,
Boston, MA 02266-8301.
Class A Shares are offered to the public at the next determined net asset
value after receipt of the order by State Street Bank and Trust Company plus a
maximum sales charge of 4.75% of the offering price (4.99% of the amount
invested) on single purchases of less than $50,000. The sales charge for Class A
Shares is reduced on a graduated scale on single purchases of $50,000 or more
and subject to other conditions stated below. See "How to Buy Shares," "How to
Obtain Reduced Sales Charges on Class A Shares" and "Net Asset Value."
Class B Shares are offered to the public at the next determined net asset
value after receipt of an order by State Street Bank and Trust Company with no
sales charge. Class B Shares are subject to a sales charge if they are redeemed
within five years of purchase. See "How to Buy Shares" and "Deferred Sales
Charge Alternative--Class B Shares."
Shares of each class represent an identical interest in the investment
portfolio of the Fund and generally have the same rights except that Class B
Shares bear the cost of higher distribution fees which cause the Class B Shares
to have a higher expense ratio and to receive 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
investing 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 PRICE
Class A Shares may be redeemed at any time at the net asset value per share
next computed after receipt of a redemption request by Equity Planning, the
Fund's transfer agent. Class B shareholders redeeming shares within five years
of the date of purchase will normally be assessed a contingent deferred sales
charge. See "How to Redeem Shares."
RISK FACTORS
There can be no assurance that the Fund will achieve its investment
objectives. In addition, special risks may be presented by the particular types
of securities in which the Fund may invest. For example, investments in below or
lower-rated debt securities may have speculative characteristics, including
overall greater risk of non-payment of interest and principal and potentially
greater sensitivity to general economic condition and changes in interest rates.
In addition, investors should consider risks inherent in foreign securities
which involve special risks not typically associated with investing in U.S.
companies. See "Investment Objective and Policies."
3
<PAGE>
<TABLE>
FUND EXPENSES
The following table illustrates all expenses and fees that a shareholder of
the Fund will incur. The expenses and fees set forth in the table are for the
fiscal year ended December 31, 1996.
<CAPTION>
Class A Shares Class B Shares
-------------- --------------
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C>
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 (as a percentage of original purchase price or
redemption proceeds, as applicable) None 5% during the first
year, decreasing 1%
annually to 2%
during the fourth
and fifth years;
dropping from 2%
to 0% after the fifth
year
Redemption Fee None None
Exchange Fee None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets for the fiscal year ended
December 31, 1996)
Management Fees 0.65% 0.65%
Rule 12b-1 Fees(a) 0.25% 1.00%
Other Operating Expenses 0.31% 0.31%
----- -----
Total Fund Operating Expenses 1.21% 1.96%
----- -----
</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").
<TABLE>
<CAPTION>
Cumulative Expenses
Paid for the Period
Example* 1 Year 3 Years 5 Years 10 Years
- ------- ------ ------- ------- --------
An investor would pay the following expenses on a hypothetical
$1,000 investment assuming (1) a 5% annual return, and (2)
redemption at the end of each time period
<S> <C> <C> <C> <C>
Class A Shares $ 59 $ 84 $111 $187
Class B Shares $ 60 $ 82 $106 $209
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 $ 59 $ 84 $111 $187
Class B Shares $ 20 $ 62 $106 $209
*THE PURPOSE OF THE ABOVE TABLE IS TO HELP THE INVESTOR UNDERSTAND THE VARIOUS
COSTS AND EXPENSES THAT 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 SHARES FIGURES
ASSUME CONVERSION TO CLASS A SHARES AFTER EIGHT YEARS. SEE "MANAGEMENT OF THE
FUND," "DISTRIBUTION PLANS" AND "HOW TO BUY SHARES."
</TABLE>
4
<PAGE>
FINANCIAL HIGHLIGHTS
The following table sets forth certain financial information for each class
of shares for the Fund. The financial information has been audited by Price
Waterhouse LLP, independent accountants. Their opinion and the Fund's 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 the Fund's performance) are available at no
charge upon request by calling (800) 243-4361.
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Net asset value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
beginning of period $ 15.98 $ 14.82 $ 15.48 $ 14.89 $ 15.22 $ 13.43 $ 13.90 $ 12.55 $ 12.58 $ 12.37
INCOME FROM INVESTMENT
OPERATIONS:
Net investment Income... 0.31 0.45 0.34 0.06(3) 0.24 0.36 0.60 0.94(2) 0.45(2) 0.18(2)
Net realized and
unrealized gain
(loss)................ 1.10 2.22 (0.69) 1.49 1.32 3.45 0.02 1.34 (0.03) 1.27
-------- -------- --------- ------- ------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS.......... 1.41 2.67 (0.35) 1.55 1.56 3.81 0.62 2.28 0.42 1.45
-------- -------- --------- ------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net
investment income..... (0.29) (0.52) (0.31) (0.11) (0.25) (0.37) (0.49) (0.55) (0.45) (0.24)
Dividends from net
realized gains........ (1.58) (0.99) (0.001) (0.85) (1.64) (1.65) (0.60) (0.38) (0.00) (1.00)
-------- -------- --------- ------- ------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS. (1.87) (1.51) (0.311) (0.96) (1.89) (2.02) (1.09) (0.93) (0.45) (1.24)
-------- -------- --------- ------- ------- ------- ------- ------- ------- -------
CHANGE IN NET ASSET
VALUE................... (0.46) 1.16 (0.66) 0.59 (0.33) 1.79 (0.47) 1.35 (0.03) 0.21
-------- -------- --------- ------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD........... $ 15.52 $ 15.98 $ 14.82 $ 15.48 $ 14.89 $ 15.22 $ 13.43 $ 13.90 $ 12.55 $ 12.58
======== ======== ======== ======= ======= ======= ======= ======= ======= =======
Total return (1)......... 8.78% 18.23% -2.26% 10.49% 10.32% 28.62% 4.43% 18.41% 3.35% 11.02%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (thousands)...... $309,678 $361,526 $335,177 $370,440 $58,006 $35,209 $28,413 $32,424 $34,926 $29,524
RATIO TO AVERAGE
NET ASSETS OF:
Operating expenses...... 1.21% 1.21% 1.24% 1.29% 1.36% 1.58% 1.58% 1.45% 1.52% 1.54%
Net investment income... 1.78% 2.67% 2.18% 1.26% 2.06% 2.51% 4.23% 3.79% 3.72% 2.52%
Portfolio turnover........ 275% 184% 225% 246% 322% 249% 279% 315% 317% 323%
Average commission
rate paid (6)........... $ 0.0529 N/A N/A N/A N/A N/A N/A N/A N/A N/A
(1) Maximum sales charges are not reflected in total return calculation.
(2) Includes reimbursement of operating expenses by investment adviser of $0.016,
$0.022 and $0.030, respectively.
(3) Computed using average shares outstanding.
(4) Annualized.
(5) Not annualized.
(6) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for securities trades on
which commissions are charged. This rate generally does not reflect mark-ups,
mark-downs, or spreads on shares traded on a principal basis.
</TABLE>
5
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
[continuation of financial chart]
<TABLE>
<CAPTION>
CLASS B
--------------------------------
YEAR FROM
ENDED INCEPTION
DECEMBER 31, 10/24/94 TO
1996 1995 12/31/94
---- ---- --------
Net asset value,
<S> <C> <C> <C>
beginning of period $ 15.89 $ 14.79 $ 14.98
INCOME FROM INVESTMENT
OPERATIONS:
Net investment Income... 0.19 0.30(3) 0.07
Net realized and
unrealized gain
(loss)................ 1.09 2.22 (0.09)
------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS.......... 1.28 2.52 (0.02)
------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net
investment income..... (0.16) (0.43) (0.17)
Dividends from net
realized gains........ (1.58) (0.99) --
------- ------- -------
TOTAL DISTRIBUTIONS. (1.74) (1.42) (0.17)
------- ------- -------
CHANGE IN NET ASSET
VALUE................... (0.46) 1.10 (0.19)
------- ------- -------
NET ASSET VALUE,
END OF PERIOD........... $ 15.43 $ 15.89 $ 14.79
======= ======= =======
Total return (1)......... 7.95% 17.31% -0.12%(5)
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (thousands)...... $ 9,594 $ 8,046 $ 1,328
RATIO TO AVERAGE
NET ASSETS OF:
Operating expenses...... 1.96% 1.97% 2.26%(4)
Net investment income... 1.01% 1.88% 1.74%(4)
Portfolio turnover........ 275% 184% 225%
Average commission
rate paid (6)........... $0.0529 N/A N/A
(1) Maximum sales charges are not reflected in total return calculation.
(2) Includes reimbursement of operating expenses by investment adviser of $0.016,
$0.022 and $0.030, respectively.
(3) Computed using average shares outstanding.
(4) Annualized.
(5) Not annualized.
(6) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for securities trades on
which commissions are charged. This rate generally does not reflect mark-ups,
mark-downs, or spreads on shares traded on a principal basis.
</TABLE>
5 (continued)
<PAGE>
PERFORMANCE INFORMATION
The Fund may, from time to time, include its yield and total return in
advertisements, sales literature, or reports to current and prospective
shareholders. Both yield and total return figures are computed separately for
Class A and Class B Shares in accordance with formulas specified by the
Securities and Exchange Commission. Yield and total return are based on
historical earnings and are not intended to indicate future performance.
The yield of the Fund will be computed by dividing the Fund's net investment
income over a 30-day period by an average value of invested assets (using the
average number of shares entitled to receive dividends and the maximum offering
price per share at the end of the period), all in accordance with applicable
regulatory requirements. Such amount will be compounded for six months and then
annualized for a twelve-month period to derive the Fund's yield, for each class.
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 of the
Fund). 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 and certain incrementally
lower expenses paid by Class A Shares. The Fund also may 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 AND 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 AND 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 with
certain widely acknowledged outside standards or indices for stock and bond
market performance, such as the Standard & Poor's 500 Stock Index (the "S&P
500"), Dow Jones Industrial Average, Europe Australia Far East Index (EAFE),
Consumer's 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 and 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 to a
changing market and economic environment. From time to time the Fund may discuss
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 Index,
Dow Jones Industrial Average, 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 objectives
and policies, characteristics and qualities 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 to provide the highest total return
consistent with reasonable risk. Total return consists of the sum of dividends,
interest, premiums and net realized and unrealized appreciation in the value of
portfolio stocks, options, futures contracts, and other
6
<PAGE>
securities, less any expenses. Reasonable risk is risk which in the Adviser's
judgment would not present a greater than normal risk of loss in light of
current and reasonably anticipated future general market and economic
conditions, trends in yields and interest rates, and fiscal and monetary
policies. The investment objective is not deemed to be a fundamental policy and
may be changed by the Fund's Board of Directors.
In seeking to achieve its investment objective, the Fund will invest
principally in stocks, bonds and other debt securities (i.e., those securities
or bonds evidencing the debt owed by a corporation, government or municipality
as discussed below), and money market instruments. The amount or proportion of
the Fund's assets which may be invested in each of the three types of securities
is not fixed and the Fund may adjust the mix of investments whenever, in the
opinion of its Adviser, such an adjustment will enable the Fund to capitalize on
perceived variations in return potential produced by the interaction of changing
financial market and economic conditions.
There can be no assurance that the Fund will achieve its investment
objective.
The Fund will seek current income and capital appreciation over an extended
period of time by investing in stocks. The Fund may invest in common stocks and
other equity-type securities such as preferred stocks, securities convertible
into common stock and securities with warrants to purchase common stock
attached. Investments in stocks will consist largely of common stocks of
generally accepted investment quality. Such stocks will be selected by the
Adviser for current income considerations and/or for the promise they offer of
capital appreciation.
The Fund will seek current income and capital appreciation on an annual
basis by investing in bonds and other debt securities with maturities generally
exceeding one year. The Fund may invest in:
(a) publicly offered straight debt securities having a rating within the
four highest grades as determined by Moody's Investors Service, Inc.
("Moody's") (Aaa, Aa, A or Baa) or by Standard & Poor's Corporation
("Standard & Poor's") (AAA, AA, A or BBB) or, if unrated, those
publicly offered straight debt securities which are judged by the Fund
to be of equivalent quality to securities so rated;
(b) obligations issued, sponsored, assumed or guaranteed as to principal
and interest by the U.S. Government or its agencies or
instrumentalities; and
(c) publicly offered debt securities issued or guaranteed by a national or
state bank or bank holding company (as defined in the Federal Bank
Holding Company Act, as amended) having a rating within the three
highest grades as determined by Moody's (Aaa, Aa or A) or by Standard &
Poor's (AAA, AA, or A), and certificates of deposit of banks issuing or
guaranteeing securities having such ratings.
The Fund may take a modest position in lower or non-rated fixed income
securities, provided that the Fund will not invest more than 5% of its net
assets, determined at the time of investment, in high yield, high risk fixed
income securities (commonly referred to as junk bonds).
Investment in fixed-income securities involves market and credit risks. The
price of fixed-income securities will generally move in inverse proportion to
interest rates. Securities rated Baa by Moody's and BBB by Standard & Poor's may
have some speculative characteristics and changes in economic conditions or
other circumstances may affect the ability to make principal and interest
payments on these types of bonds. Additionally, with lower rated securities,
there is a greater possibility that an adverse change in the financial condition
of the issuer, particularly a highly leveraged issuer, may affect the issuer's
ability to make payments of income and principal and increase the expenses of
the Fund seeking recovery from the issuer. Investment in lower rated and
non-rated convertible fixed-income securities normally involves a greater degree
of market and credit risk than does investment in securities having higher
ratings. The price of these fixed income securities will generally move in
inverse proportion to interest rates. In addition, non-rated securities are
often less marketable than rated securities. To the extent that the Fund holds
any lower rated or non-rated securities, it may be negatively affected by
adverse economic developments, increased volatility and lack of liquidity. The
Fund does not have a policy to dispose of a bond if its rating drops below
investment grade. The Statement of Additional Information contains a description
of Moody's and Standard & Poor's rating categories.
The Fund will seek current income by investing in money market instruments
(which generally mature in one year or less). Investments in money market
instruments may also be made for the purpose of preserving capital or for
liquidity purposes, in which event investment decisions may be based on
considerations other than the highest available yield. The Fund may invest in:
(a) obligations issued or guaranteed by the U.S. Government or its
agencies, authorities or instrumentalities;
(b) obligations issued by U.S. banks and savings and loan associations
(such as bankers' acceptances, certificates of deposit and time
deposits, including dollar denominated obligations of foreign branches
of U.S. banks and U.S. branches of foreign banks) and dollar
denominated obligations unconditionally guaranteed as to payment by
U.S. banks or savings and loan associations which at the date of the
investment have capital, surplus and undivided
7
<PAGE>
profits in excess of $100,000,000 as of the date of their most recently
published financial statements; and obligations of other U.S. banks or
savings and loan associations if such obligations are insured by the
Federal Deposit Insurance Corporation or the Federal Savings and Loan
Insurance Corporation;
(c) commercial paper which at the date of the investment is rated P-1 by
Moody's or A-1 by Standard & Poor's or, if not rated, is issued by a
company which at the date of the investment has an outstanding debt
issue rated Aa or higher by Moody's or AA or higher by Standard &
Poor's;
(d) other corporate obligations maturing in one year or less which at the
date of the investment are rated Aa or higher by Moody's or AA or
higher by Standard & Poor's; and
(e) repurchase agreements with respect to any of the foregoing obligations
with commercial banks, brokers and dealers considered by the Fund to be
creditworthy.
The Fund will not invest in time deposits if, as a result of such
investment, as much as 15% of the Fund's net assets would be invested in time
deposits, repurchase agreements which are not terminable within seven days and
securities subject to legal or contractual restrictions on resale or for which
there is no established market (so-called "illiquid" securities).
The Fund may invest up to 25% of its total net assets in the securities of
foreign issuers. The Fund may invest in a broad range of foreign securities
including equity, debt and convertible securities and foreign government
securities. In connection with investments in foreign securities, the Fund may
enter into forward foreign currency exchange contracts for the purpose of
protecting against losses resulting from fluctuations in exchange rates between
the U.S. dollar and a particular foreign currency denominating a security which
the Fund holds or intends to acquire. The Fund will not speculate in forward
foreign currency exchange contracts.
Investing in the securities of foreign companies involves special risks and
considerations not typically associated with investing in U.S. companies. These
include less liquidity and more volatility in foreign markets, generally higher
commission rates on foreign portfolio transactions, the possibility of
confiscatory taxation, 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. 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. Many of the foreign securities held by
the Fund will not be registered with the Securities and Exchange Commission and
many of the issuers of foreign securities will not be subject to the
Commission's reporting requirements. 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 compare favorably or
unfavorably with the United States economy with respect to such factors as rate
of growth, rate of inflation, capital reinvestment, resource self-sufficiency
and balance of payment positions.
The Fund may invest to a significant extent in securities of the U.S.
Government and its agencies and instrumentalities at a time when adverse market
conditions warrant the adoption of a temporary defensive position or at a time
when the yield differential between U.S. Government securities and other
investments is such that the U.S. Government securities will yield a higher
total return than other investments.
Securities issued or guaranteed as to principal and interest by the U.S.
Government include a variety of Treasury securities, which differ only in their
interest rates, maturities, and times of issuance. Treasury bills have a
maturity of one year or less. Treasury notes have maturities of one to seven
years, and Treasury bonds generally have maturity of greater than five years.
Agencies of the U.S. Government which issue or guarantee obligations
include, among others, Export-Import Banks of the United States, Farmers Home
Administration, Federal Housing Administration, Government National Mortgage
Association, Maritime Administration, Small Business Administration and The
Tennessee Valley Authority. Obligations of instrumentalities of the U.S.
Government include securities issued or guaranteed by, among others, the Federal
National Mortgage Association, Federal Home Loan Banks, Federal Home Loan
Mortgage Corporation, Federal Intermediate Credit Banks, Banks for Cooperatives,
and the U.S. Postal Service. Some of these securities are supported by the full
faith and credit of the U.S. Treasury, others are supported by the right of the
issuer to borrow from the Treasury, while still others are supported only by the
credit of the instrumentality.
Securities issued by Government National Mortgage Association ("GNMA") are,
and securities issued by Federal National Mortgage Association ("FNMA") include,
mortgage-backed securities representing part ownership of a pool of mortgage
loans. In the case of GNMA, the mortgages are insured by the Federal Housing
Administration or Farmers Home Administration or guaranteed by the Veterans
Administration. In the case of FNMA, the mortgages are not insured by an agency
of the U.S. Government.
The prices of mortgage-backed securities are inversely affected by changes
in interest rates and, therefore, are subject to the risk of market price
fluctuations. Mortgage-backed securities issued by GNMA and FNMA generally
offer yields which are higher than those available on other securities of the
U.S. Government and its agencies and
8
<PAGE>
instrumentalities, but may be less effective than these other securities as a
means of "locking in" attractive long-term interest rates. This is a result of
the need to reinvest prepayment of principal and the possibility of significant
unscheduled prepayments resulting from declines in mortgage interest rates. As a
result, these securities have less potential for capital appreciation during
periods of declining interest rates than other investments of comparable risk of
decline in value during periods of rising rates.
INVESTMENT TECHNIQUES AND
RELATED RISKS
In addition to the investment policies described above, the Fund may utilize
the following investment practices or techniques.
WRITING (SELLING) CALL OPTIONS. A call option on a security gives the
purchaser of the option, in return for the premium paid to the writer (seller),
the right to buy the underlying security at the exercise price at any time
during the option period. Upon exercise by the purchaser, the writer of a call
option has the obligation to sell the underlying security at the exercise price.
A call option on a securities index is similar to a call option on an individual
security, except that the value of the option depends on the weighted value of
the group of securities comprising the index and all settlements are made in
cash. A call option may be terminated by the writer (seller) by entering into a
closing purchase transaction in which it purchases an option of the same series
as the option previously written.
The Fund may write exchange-traded call options with respect to 100% of its
portfolio. Call options may be written on portfolio securities and on securities
indices. Call options on portfolio securities will be covered since the Fund
will own the underlying securities at all times during the option period. Call
options on securities indices will be written only to hedge in an economically
appropriate way portfolio securities which are not otherwise hedged with options
or financial futures contracts and will be "covered" by identifying the specific
portfolio securities being hedged.
The Fund will write call options in order to obtain a return on its
investments from the premiums received and will retain the premiums whether or
not the options are exercised. Any decline in the market value of portfolio
securities will be offset to the extent of the premiums received (net of
transaction costs). If an option is exercised, the premium received on the
option will effectively increase the exercise price.
During the option period, the writer of a call option has given up the
opportunity for capital appreciation above the exercise price should the market
price of the underlying security increase, but has retained the risk of loss
should the price of the underlying security decline. Writing call options also
involves risks relating to the Fund's ability to close out options it has
written.
PURCHASING CALL AND PUT OPTIONS. A call option is described above. A put
option on a security gives the purchaser of the option, in return for the
premium paid to the writer (seller), the right to sell the underlying security
at the exercise price at any time during the option period. Upon exercise by the
purchaser, the writer of a put option has the obligation to purchase the
underlying security at the exercise price. A put option on a securities index is
similar to a put option on an individual security, except that the value of the
option depends on the weighted value of the group of securities comprising the
index and all settlements are made in cash.
The Fund may invest up to 5% of its total assets in exchange-traded call and
put options on securities and securities indices. The Fund will invest in call
and put options whenever, in the opinion of its Adviser, such investments will
contribute to the enhancement of total return to the Fund's shareholders. The
Fund may sell a call option or a put option which it has previously purchased
prior to the purchase (in the case of a call) or the sale (in the case of a put)
of the underlying security. Any such sale would result in a net gain or loss
depending on whether the amount received on the sale is more or less than the
premium and other transaction costs paid on the call or put which is sold.
Purchasing a call or a put option involves the risk that the Fund may lose
the premium it paid plus transaction costs.
FINANCIAL FUTURES AND RELATED OPTIONS. Financial futures contracts consist
of interest rate futures contracts and securities index futures contracts. An
interest rate futures contract obligates the seller of the contract to deliver,
and the purchaser to take delivery of, the interest rate securities called for
in the contract at a specified future time and at a specified price. A stock
index assigns relative values to the common stocks included in the index, and
the index fluctuates with changes in the market values of the common stocks so
included. A stock index futures contract is a bilateral agreement pursuant to
which two parties agree to take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the stock index value at
the close of the last trading day of the contract and the price at which the
futures contract is originally struck. An option on a financial futures contract
gives the purchaser the right to assume a position in the contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option.
The Fund may purchase and sell financial futures contracts which are traded
on a recognized exchange or board of trade and may purchase exchange-traded put
and call options on financial futures contracts as a hedge against anticipated
changes in the market value of its portfolio securities or securities which it
intends to
9
<PAGE>
purchase. Hedging is the initiation of a position in the futures market which is
intended as a temporary substitute for the purchase or sale of the underlying
securities in the cash market.
The Fund will engage in transactions in financial futures contracts and
related options only for hedging purposes and not for speculation. In addition,
the Fund will not purchase or sell any financial futures contract or related
option if, immediately thereafter, the sum of the cash or U.S. Treasury bills
committed with respect to the Fund's existing futures and related options
positions and the premiums paid for related options would exceed 5% of the
market value of the Fund's total assets. At the time of purchase of a futures
contract or a call option on a futures 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 market value of the
futures contract minus the Fund's initial margin deposit will be deposited in a
segregated account with the Fund's custodian bank to collateralize fully the
position. The extent to which the Fund may enter into financial futures
contracts and related options may also be limited by requirements of the
Internal Revenue Code for qualification as a regulated investment company.
Engaging in transactions in financial futures contracts involves certain
risks, such as the possibility of an imperfect correlation between futures
market prices and cash market prices and the possibility that the Adviser could
be incorrect in its expectations as to the direction or extent of various
interest rate movements. There is also the risk that a liquid secondary market
may not exist, and the loss from investing in futures contracts is potentially
unlimited because the Fund may be unable to close its position. The risk in
purchasing an option on a financial futures contract is that the Fund will lose
the premium it paid. Also, there may be circumstances when the purchase of an
option on a financial futures contract could result in a loss to the Fund while
the purchase or sale of the contract would not have resulted in a loss.
REPURCHASE AGREEMENTS. The Fund may invest up to 10% of its total assets in
repurchase agreements having maturities of no more than seven days, either for
temporary defensive purposes due to adverse market conditions or to generate
income from its excess cash balances. In addition, the Fund may invest up to 15%
of its net assets in illiquid securities including repurchase agreements having
maturities greater than seven days. A repurchase agreement is an agreement under
which the Fund acquires a money market instrument (generally a security issued
by the U.S. Government or an agency thereof, a bankers' acceptance or a
certificate of deposit) from a commercial bank, broker or dealer, subject to
resale to the seller at an agreed upon price and date (normally the next
business day). The resale price reflects an agreed upon interest rate effective
for the period the instrument is held by the Fund and is unrelated to the
interest rate on the underlying instrument. That instrument must have a total
value, including accrued interest, in excess of the value of the repurchase
agreement and will be held by the Fund's custodian bank until repurchased.
The use of repurchase agreements involves certain risks such as default by
or the insolvency of the other party to the repurchase agreement. Repurchase
agreements will be entered into only with commercial banks, brokers and dealers
considered by the Fund to be creditworthy.
LENDING PORTFOLIO SECURITIES. In order to increase the return on its
investments, the Fund may lend its portfolio securities to broker-dealers and
other financial institutions in amounts up to 25% of the market or other fair
value of its total assets. Loans of portfolio securities will always be fully
collateralized and will be made only to borrowers considered by the Adviser to
be creditworthy. Lending portfolio securities involves risk of delay in the
recovery of the loaned securities and in some cases the loss of rights in the
collateral should the borrower fail financially.
TRADING OPERATIONS. The timing and amounts of purchases and sales of
individual securities and types of securities (stocks, bonds and money market
instruments) is of particular significance in the case of a fund seeking the
highest total return consistent with reasonable risk. Consequently, in seeking
to achieve its investment objective, the Fund intends to engage in portfolio
trading. The Fund will buy and sell portfolio securities in anticipation of, or
in response to, changing financial market and economic conditions and trends and
to take advantage of yield disparities. The Adviser will engage in trading
whenever it believes that the trade, net of transaction costs, will provide the
Fund with additional income or improve the capital appreciation potential of the
Fund's portfolio. Whether trading will enable the Fund to achieve its goals will
depend on the Adviser's ability to anticipate market developments, including
interest rate trends, obtain and properly evaluate relevant information, and
effect purchase and sale transactions on a favorable basis. Trading may result
in frequent changes in the Fund's portfolio and a high rate of portfolio
turnover.
INVESTMENT RESTRICTIONS
The investment restrictions to which the Fund is subject are fundamental
policies which may not be changed without shareholder approval. Among the more
significant restrictions, the Fund may not (i) concentrate its assets in the
securities of issuers which conduct their principal business activities in the
same industry; (ii) invest more than 5% of its total assets in securities issued
or guaranteed by any one issuer (except the U.S. Government) or purchase more
than 10% of the outstanding voting securities or more than 10% of the securities
of any class of any one issuer; (iii) invest in the aggregate more than 5% of
its total assets in the securities of any issuers which have (with predecessors)
a record of less than three years of continuous
10
<PAGE>
operations; (iv) invest in real estate, real estate limited partnerships,
commodities or commodities contracts, except that the Fund may (a) purchase or
sell readily marketable securities which are secured by interests in real estate
or issued by companies which deal in real estate, including real estate
investment and mortgage investment trusts, and (b) engage in financial futures
contracts and related options transactions as described above; (v) borrow in
excess of 5% of the market or other fair value of its total assets or pledge its
assets to an extent greater than 5% of the market or other fair value of its
total assets (any borrowings to be from banks and undertaken only as a temporary
measure for extraordinary or emergency purposes); (vi) issue senior securities
(vii) purchase an illiquid security such as a restricted security or a security
for which market quotations are not readily available or a repurchase agreement
having a maturity longer than seven days if as a result of such purchase more
than 15% of the Fund's net assets would be invested in such securities; and
(viii) purchase securities of other investment companies, except that the Fund
may make such a purchase (a) in the open market involving no commission or
profit to a sponsor or dealer (other than the customary broker's commission),
provided that immediately thereafter (x) not more than 10% of the Fund's total
assets would be invested in such securities, (y) not more than 5% of the Fund's
total assets would be invested in the securities of any one investment company
and (z) not more than 3% of the voting stock of any one investment company would
be owned by the Fund, or (b) as part of a merger, consolidation, or acquisition
of assets.
A detailed description of the Fund's investment restrictions is contained in
the Statement of Additional Information.
PORTFOLIO TURNOVER
A change in securities held by the Fund is known as "portfolio turnover" and
may involve the payment by the Fund of dealer mark-up or underwriting
commissions and other transaction costs on the sale of securities, as well as on
the reinvestment of the proceeds in other securities. Portfolio turnover rate
for a fiscal year is the percentage determined by dividing the lesser of the
cost of purchases or proceeds from sales of portfolio securities by the average
of the value of portfolio securities during such year, all excluding securities
whose maturities at acquisition were one year or less. The Fund's portfolio
turnover rate will not be a limiting factor when the Adviser deems it desirable
to sell or purchase securities. The Fund's portfolio turnover rate may be higher
than some other investment companies having similar objectives if the Fund finds
it necessary to significantly change its portfolio to adopt a temporary
defensive position. A high turnover rate may involve greater expenses to the
Fund and could involve realization of capital gains that would be taxable to the
shareholders.
MANAGEMENT OF THE FUND
The Fund is a mutual fund, known as an open-end diversified management
investment company. The Directors of the Fund ("Directors") are responsible for
the overall supervision of the Fund and perform the various duties imposed on
Directors by the 1940 Act and the Massachusetts General Corporation Law.
THE ADVISER
The Fund's investment adviser is Phoenix Investment Counsel, Inc. (the
"Adviser"), which is located at 56 Prospect Street, Hartford, Connecticut 06115.
The Adviser is a subsidiary of Phoenix Duff & Phelps Corporation. Prior to
November 1, 1995, the Adviser was an indirect, wholly-owned subsidiary Phoenix
Home Life Mutual Insurance Company ("Phoenix") of Hartford, Connecticut. Phoenix
is a majority shareholder of Phoenix Duff & Phelps Corporation. Phoenix is in
the business of writing ordinary and group life and health insurance and
annuities. Its principal offices are located at One American Row, Hartford,
Connecticut 06102. Phoenix Duff & Phelps Corporation is a New York Stock
Exchange-traded company that provides various financial advisory services to
institutional investors, corporations and individuals through operating
subsidiaries. The Adviser also serves as investment adviser or manager for
Phoenix Series Fund, Phoenix Multi-Portfolio Fund (all Portfolios other than the
Real Estate Securities Portfolio), The Phoenix Edge Series Fund (all Series
except the Real Estate Securities Series and Aberdeen New Asia Series) and
Phoenix Strategic Equity Series Fund (all Funds other than the Phoenix Equity
Opportunities Fund), and as sub-adviser to the Chubb America Fund, Inc.,
SunAmerica Series Trust, and JNL Series Trust. The Adviser was originally
organized in 1932 as John P. Chase, Inc. As of December 31, 1996, the Adviser
has approximately $18.2 billion in assets under management.
The Adviser continuously furnishes an investment program for the Fund and
manages the investment and reinvestment of the Fund's assets subject at all
times to the supervision of the Directors. The Adviser, at its expense,
furnishes to the Fund adequate office space and facilities and certain
administrative services, including the services of any member of its staff who
serves as an officer of the Fund.
As compensation for its services, the Adviser receives a fee, which is
accrued daily against the value of the Fund's net assets and payable monthly by
the Fund. The monthly fee is computed at an annual rate of 0.65% of the average
of the daily net asset values of the Fund up to $1 billion; 0.60% of such value
between $1 billion and $2 billion; and 0.55% of such value in excess of $2
billion. The ratio of management fees to average net assets for the fiscal year
ended December 31, 1996 was 0.65%.
11
<PAGE>
THE PORTFOLIO MANAGER
Ms. Mary E. Canning is the manager of the Fund and as such, is primarily
responsible for the day-to-day management of the Fund's portfolio. Ms. Canning
has served as manager of the Fund since August 1996 and as co-manager since June
1996. She has been a Vice President of Phoenix Investment Counsel, Inc. since
1991 and is also a Vice President of Phoenix Series Fund (since 1987) and The
Phoenix Edge Series Fund (since 1987). From June 1991 to November 1995, Ms.
Canning was Associate Portfolio Manager, Common Stock, Phoenix Home Life Mutual
Insurance Company and held various other positions with Phoenix Home Life from
1982 to 1991.
THE FINANCIAL AGENT
Equity Planning acts as financial agent of the Fund and, as such, performs
administrative, bookkeeping and pricing functions for the Fund. As compensation,
Equity Planning is entitled to a fee, payable monthly and based upon (a) the
average of the aggregate daily net asset values of the Fund, at the following
incremental annual rates:
First $100 million .05%
$100 million to $300 million .04%
$300 million to $500 million .03%
Greater than $500 million .015%
(b) a minimum fee based on the predominant type of assets of the Fund; and (c)
an annual fee of $12,000 together with an additional $12,000 for any additional
class of shares created in the future. For its services during the fiscal year
ended December 31, 1996, Equity Planning received $103,432, or 0.03% of average
net assets.
THE CUSTODIAN AND TRANSFER AGENT
The custodian of the assets of the Fund is State Street Bank and Trust
Company, P.O. Box 351, Boston, Massachusetts, 02101 (the "Custodian"). The Fund
has authorized the Custodian to appoint one or more subcustodians for the assets
of the Fund held outside the United States. 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 was paid $14.95 plus
out-of-pocket expenses for each designated shareholder account. The Transfer
Agent is authorized to engage 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 director and President of the
Fund and a director and officer of Equity Planning. David R. Pepin, an officer
of the Fund, is a director and an officer of Equity Planning. Michael E. Haylon,
an officer of the Fund, is a director of Equity Planning. G. Jeffrey Bohne,
Nancy G. Curtiss, William E. Keen III, William R. Moyer and Leonard J. Saltiel
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 and the Fund has granted to 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 Directors
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 Directors adopted separate distribution plans for Class A and Class B
shares (the "Plans") pursuant to Rule 12b-1 under the Investment Company Act of
1940. The Class A Plan, which was approved by shareholders on July 2, 1986,
provides that the Fund may pay to Equity Planning (i) amounts not exceeding
0.25% annually of its average daily net asset value for each year elapsed after
the
12
<PAGE>
inception of the Plan and (ii) amounts not exceeding 0.25% of the amount of any
investment in Fund shares equal to $1,000,000 or more made in a lump sum or
pursuant to an authorized letter of intent. Under a separate plan adopted by the
Directors (including a majority of the Independent Directors) on November 17,
1993, and ratified by the Adviser, as initial sole shareholder of Class B shares
of the Fund, the Fund is authorized to pay up to 1.00% annually of the average
daily net assets of the Fund representing Class B Shares.
Although under no contractual obligation to do so, the Fund intends to make
such payments to Equity Planning (i) as commissions for shares sold, all or any
part of which commissions may be paid by Equity Planning to others (who may be
other dealers or registered representatives of Equity Planning), and (ii) to
enable Equity Planning to pay to such others maintenance or other fees in
respect of shares sold by them and remaining outstanding on the Fund's books
during the period in respect of which the fee is paid (the "Service Fee"); and
(iii) to enable Equity Planning to pay to bank affiliated securities brokers
maintenance or other fees in respect of shares of the Fund purchased by their
customers and remaining outstanding on the Fund's books during the period in
respect of which the fee is paid. The portion of the above fees paid by the Fund
to Equity Planning as "Service Fees" shall not exceed 0.25% annually of the
average daily net assets of the class to which such fee relates. Payments, less
the portion thereof paid by Equity Planning to others, may be used by Equity
Planning for its expenses of distribution of Fund shares. If expenses of
distribution exceed payments and any sales charges are retained by Equity
Planning, the Fund is not required to reimburse Equity Planning for excess
expenses.
In order to receive payments under the Plans, participants must meet such
qualifications which 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 transmissions of such purchases or sales by computerized
tape or other electronic equipment; or other batch processing.
For the fiscal year ended December 31, 1996, the Fund paid $839,140 under
the Class A Plan and $91,191 under the Class B Plan. The fees were used to
compensate unaffiliated broker-dealers for servicing shareholder's accounts,
compensating sales personnel and reimbursing the Distributor for commission
expenses and expenses related to preparation of the marketing material. On a
quarterly basis, the Fund's Directors review a report on expenditures under each
Plan and the purposes for which expenditures were made. The Directors 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 Directors and by a
majority of the Directors 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 Directors"). 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 Directors 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 Directors who are not "interested
persons" shall be committed to the discretion of the Directors who are not
"interested persons." Each Plan may be terminated at any time by vote of a
majority of the Plan Directors or a majority of the applicable class of
outstanding shares of the Fund. If the Plans are terminated in accordance with
their terms, the obligations of the Fund to make payments to the Distributor
pursuant to the Plan, including payments for expenses carried over from previous
years will cease.
The Directors 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 minimum initial investment 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 the Statement of Additional Information). 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.
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 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 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 payable on Class B Shares will be reduced by the amount of the
higher
13
<PAGE>
distribution services fee and incremental expenses associated with such
distribution 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 will be maintained by the Transfer Agent in book
entry form. A fee may be incurred by the shareholder for a lost or stolen share
certificate. Sales personnel of broker-dealers distributing the Fund's shares
may receive differing compensation for selling Class A or Class B Shares.
The Fund offers combination purchase privileges, letters of intent,
accumulation plans, withdrawal plans and reinvestment and exchange privileges.
Certain privileges may not be available in connection with Class B Shares.
Shares of the Fund or shares of any other Phoenix Fund may be exchanged for
shares of the same class on the basis of the relative net asset values per share
at the time of the exchange. Exchanges are subject to the minimum initial
investment requirement of the designated Phoenix Fund, except if made in
connection with the Systematic Exchange privilege. Shareholders may exchange
shares held in book-entry form for an equivalent number (value) of the same
class of shares of any other Phoenix Fund. On Class B Share exchanges, the
contingent deferred sales charge schedule of the original shares purchased is
not taken and continues to apply.
ALTERNATIVE SALES ARRANGEMENTS
The alternative purchase arrangement permits 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 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 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 may be limited to
a 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 participant 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 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 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 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 charges and, for a five-year period, being
subject to a contingent deferred sales charge.
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
The public offering price of Class A Shares is the net asset value plus a
sales charge, as set forth below. Offering prices become effective at the close
of the general trading session of the New York Stock Exchange. Orders received
by dealers prior to such time are confirmed at the offering price effective at
that time, provided the order is received by the Distributor prior to its close
of business.
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 Equity Planning 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 on $50,000 or more as shown below.
14
<PAGE>
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*
- ----------------- ----- -------- ---------------
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**
- ---------------
*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 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.
**In connection with Class A Share purchases (or subsequent purchases in any
amount) 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:
PURCHASE AMOUNT PAYMENT TO BROKER-DEALER
--------------- ------------------------
$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%
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 a pro rata
portion of any such amounts paid with respect to the investment.
HOW TO OBTAIN REDUCED SALES CHARGES--CLASS A SHARES
Investors choosing the initial sales charge alternative under certain
circumstances may be entitled to pay reduced sales charges. The circumstances
under which such investors may pay reduced sales charges are described below.
QUALIFIED PURCHASERS. No sales charge will be imposed on sales of shares to
(1) any Phoenix Fund trustee, director or officer; (2) any director or officer,
or to 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 the
Adviser, Equity Planning and/or their corporate affiliate; (9) any account held
in the name of a 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; (10) any
person with a direct rollover transfer of shares from an established Phoenix
Fund qualified plan; (11) any Phoenix Home Life separate account which funds
group annuity contracts offered to qualified employee benefit plans; (12) any
state, county, city, instrumentality, department, authority or agency prohibited
by law from paying a sales charge; (13) any fully matriculated student in a U.S.
service academy; (14) any unallocated accounts held by a third party
administrator, registered investment adviser, trust company, or bank trust
department which exercises discretionary authority and holds the account in a
fiduciary, agency, custodial or similar capacity if in the aggregate such
accounts held by such entity equal or exceed $1,000,000; or (15) any person who
is investing redemption proceeds from investment companies other than the
Phoenix Funds if, in connection with the purchase or redemption of the redeemed
shares, the investor paid a sales charge provided such investor supplies
verification that the redemption occurred within 90 days of the Phoenix Fund
purchase and that a sales charge was paid; provided that sales to persons listed
in (1) through (15) above are made upon the written assurance of the purchaser
that the purchase is made for investment purposes and that the shares so
acquired will not be resold except to the Fund.
In addition, Class A Shares purchased by the following investors are not
subject to any Class A sales charge: (1) investment advisers and financial
planners who charge an advisory, consulting or other fee for their services and
buy shares for their own accounts or the accounts of their clients, and (2)
retirement plans and deferred compensation plans and trusts used to fund those
plans (including, for example, plans qualified or created under sections 401(a),
403(b) or 457 of the Internal Revenue Code), and "rabbi trusts" that buy shares
for their own accounts, in each case if those purchases are made through a
broker or agent or other financial intermediary that has made special
arrangements with the Distributor for those purchases; (3)
15
<PAGE>
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).
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 "reallowed" to selected dealers and agents. The
Distributor will reallow discounts to selected dealers and agents in the amounts
indicated in the table above. In this regard, the Distributor may elect to
reallow the entire sales charge to selected dealers and agents for all sales
with respect to which orders are placed with the Distributor. A selected dealer
who receives reallowance in excess of 90% of such a sales charge may be deemed
to be an "underwriter" under the Securities Act of 1933.
COMBINATION PURCHASE PRIVILEGE. Purchases, either singly or in any
combination, of shares of the Fund or shares of any other Phoenix Fund,
(including Class B Shares) 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 of record in the name, or nominee name,
of the entity placing the order.
LETTER OF INTENT. Class A Shares or shares of any other Phoenix Fund
(including Class B Shares and excluding Money Market Fund Series Class A Shares)
may be purchased by a "single purchaser" (as defined above) within a period of
thirteen months pursuant to a Letter of Intent, in the form provided by Equity
Planning, stating the investor's intention to invest in such shares during such
period an amount which, together with the value (at their maximum offering
prices on the date of the Letter) of the Class A Shares of the Fund or Class A
or Class B Shares of any other Phoenix Fund then owned by such investor, equals
a specified dollar amount. Each purchase of shares made pursuant to a Letter of
Intent will be made at the public offering price, as described in the then
current Prospectus relating to such shares, which at the time of purchase is
applicable to a single transaction of the total dollar amount specified in the
Letter of Intent.
An investor's Letter of Intent is not a binding commitment of the investor
to purchase or a binding obligation of the Fund or Equity Planning to sell a
specified dollar amount of shares qualifying for a reduced sales charge.
Accordingly, out of his initial purchase (and subsequent purchases if
necessary), 5% of the dollar amount of purchases required to complete his
investment is held in escrow in the form of shares (valued at the purchase price
thereof) registered in the investor's name until he completes his investment, at
which time escrowed shares are deposited to his account. If the investor does
not complete his investment and does not within 20 days after written request by
Equity Planning or his dealer pay the difference between the sales charge on the
dollar amount specified in his Letter and the sales charge on the dollar amount
of actual purchases, the difference will be realized through the redemption of
an appropriate number of the escrowed shares and any remaining escrowed shares
will be deposited to his account.
RIGHT OF ACCUMULATION. "Single purchasers" (as defined above) may also
qualify for reduced sales charges based on the combined value of purchases of
either class of shares of the Fund, or any other Phoenix Fund, made over time.
Reduced sales charges are offered to investors whose shares, in the aggregate,
are valued (i.e., the dollar amount of such purchases plus the then current
value (at the public offering price as described in the then current prospectus
relating to such shares) of shares of all Phoenix Funds owned) in excess of the
threshold amounts described in the section entitled "Initial Sales Charge
Alternative--Class A Shares." To use this option, the investor must supply
sufficient information as to account registrations and account numbers to permit
verification that one or more of his 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 Privilege
and Right of Accumulation if the group or association (1) has been in existence
for at least six months; (2) has a legitimate purpose other than to purchase
mutual fund shares at a reduced sales charge; (3) gives its endorsements or
authorization to the investment program to facilitate
16
<PAGE>
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 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 its
expenses 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. The combination of the contingent
deferred sales charge and the distribution 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 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 charge, 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.
Contingent Deferred
Sales Charge as
a Percentage of
Dollar Amount
Year Since Purchase Subject to Charge
------------------- -----------------
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth 2%
Sixth 0%
In determining whether a contingent deferred sales charge is applicable to a
redemption, the calculation will be determined in the manner that minimizes the
rate being charged. Therefore, Class A Shares will be redeemed first, Class B
Shares held for over 5 years or acquired pursuant to reinvestment of dividends
or distributions are redeemed next and any Class B Shares held longest during
the five-year period, are redeemed next unless the shareholder directs
otherwise. The charge will not be applied to dollar amounts representing an
increase in the net asset value since the time of purchase.
To provide an example, assume in 1990, an investor purchased 100 Class B
Shares. In 1993, the investor purchased another 100 Class B Shares at $12 per
share. In 1995, the investor purchased 100 Class A Shares. Assume that in 1996,
the investor owns 225 Class B Shares (15 Class B Shares resulting from dividend
reinvestment and distributions upon the Class B Shares purchased in 1990 and 10
Class B Shares resulting from dividend reinvestment and distributions upon the
Class B Shares purchased in 1993) as well as 100 Class A Shares. If the investor
wished to then redeem 300 shares and had not specified a preference in redeeming
shares: first, 100 Class A Shares would be redeemed without charge. Second, 115
Class B Shares purchased in 1990 (including 15 shares issued as a result of
dividend reinvestment and distributions) would be redeemed next without charge.
Finally, 85 Class B Shares purchased in 1993 would be redeemed resulting in a
deferred sales charge of $27 [75 shares (85 shares minus 10 shares resulting
from dividend reinvestment) x $12 (original price of current NAV if less than
original) x 3% (applicable rate in the third year after purchase)].
The contingent deferred sales charge is waived on redemptions of shares (a)
if redemption is made within one year of death (i) of the sole shareholder on an
individual account, (ii) of a joint tenant where the surviving joint tenant is
the deceased's spouse, or (iii) of the beneficiary of a Uniform Gifts to Minors
Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other custodial account;
(b) if redemption is made within one year of disability, as defined in Section
72(m)(7) of the Code; (c) in connection with mandatory distributions upon
reaching age 70 1/2 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
17
<PAGE>
approved participant tracking system for participant hardships, death,
disability or normal retirement, and loans which are subsequently repaid; (e) in
connection with the exercise of certain exchange privileges among Class B Shares
of the Fund and Class B Shares of other Phoenix Funds; (f) in connection with
any direct rollover transfer of shares from an established Phoenix Fund
qualified plan into a Phoenix Fund IRA by participants terminating from the
qualifying plan; and (g) in accordance with the terms specified under the
Systematic Withdrawal Program. If, upon the occurrence of a death as outlined
above, the account is transferred to an account registered in the name of the
deceased's estate, the contingent deferred sales charge will be waived on any
redemption from the estate account occurring within one year of the death. If
the Class B Shares are not redeemed within one year of the death, they will
remain Class B Shares and be subject to the applicable contingent deferred sales
charge when redeemed.
Class B Shares of the Fund will automatically convert to Class A Shares
without a sales charge at the relative net asset values of each class after
eight years from the acquisition of the Class B Shares, and as a result, will
thereafter be subject to the lower distribution 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 Equity Planning
to have been compensated for 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 of the Internal
Revenue Service ("IRS") to the effect that (i) the assessment of the higher
distribution fees and transfer agency costs with respect to Class B Shares does
not result in any dividends or distributions constituting "preferential
dividends" under the Code, and (ii) that the conversion of shares does not
constitute a taxable event under federal income tax law. 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 conversions of Class B Shares would
occur, and shares might continue to be subject to the higher distribution fee
for an indefinite period which may extend beyond the period ending eight 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 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 ACCOUNTS AND SERVICES
AVAILABLE
An account will be opened for the investor after the investor makes an
initial investment. Shares purchased will be held in the shareholder's account
by the Transfer Agent in book entry form.
The Fund mails periodic reports to its shareholders. In order to reduce the
volume of mail, 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.
Shareholder inquiries should be directed to the Fund at (800) 243-1574.
BANK DRAFT INVESTING PROGRAM (INVESTO-MATIC PLAN)
By completing the Investo-Matic Section of the New Account Application, a
shareholder may authorize the bank named in the form to draw $25 or more from
his personal checking to be used to purchase additional shares for his account.
The amount the shareholder designates will be made available, in form payable to
the order of the Transfer Agent by the bank on the date the bank draws on his
account and will be used to purchase shares at the applicable offering price.
The shareholder or his or her registered representative may, by telephone or
written notice, cancel or change the dollar amount being invested pursuant to
the Investo-Matic Plan unless the shareholder has notified the Fund or Transfer
Agent that his or her registered representative shall not have this authority.
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
the option of the shareholder, in cash. By exercising the distribution option, a
shareholder 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 a shareholder elects to receive dividends
and/or distributions in cash and the check cannot be delivered or remains
uncashed by the shareholder 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 for the
shareholder's account at the then current
18
<PAGE>
net asset value. Shareholders who 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), may direct
that any dividends and distributions paid with respect to shares in that account
be automatically reinvested in a single account of one of the other Phoenix
Funds at net asset value. Shareholders 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. Dividends and capital gain
distributions received in shares are taxable to the shareholder and credited to
the shareholder's account in full and fractional shares computed at the closing
net asset value on the next business day after the record date. A distribution
option may be changed at any time by notifying Customer Service by telephone at
(800) 243-1574 or by sending a letter signed by the registered owner(s) of the
account. 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 the shareholder's account are repurchased or redeemed or transferred
between the record date and the payment date of a dividend or distribution,
he/she will receive cash for the dividend or distribution regardless of the
distribution option selected.
SYSTEMATIC WITHDRAWAL PROGRAM
The Systematic Withdrawal Program allows shareholders to periodically redeem
a portion of their account on a predetermined monthly or quarterly, semiannual
or annual basis. A sufficient number of full and fractional shares shall
therefore 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 the shareholder's 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. See "Redemption of Small Accounts."
Class A shareholders participating in the Systematic Withdrawal Program must
own shares of the Fund worth $5,000 or more, as determined by the then-current
net asset value per share, and elect to have all dividends reinvested in
additional Class A Shares of the Fund. 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.
To participate in the Systematic Withdrawal Program, Class B shareholders
must initially own shares of the Fund worth $5,000 or more and elect to have all
dividends reinvested in additional Class B Shares of the Fund. 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 shall 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, 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
Shareholders may exchange Class A or Class B Shares held in book entry form
for shares of the same class of other Phoenix Funds provided that the following
conditions are met: (1) the shares that will be acquired in the exchange (the
"Acquired Shares") are available for sale in the shareholder's state of
residence; (2) the Acquired Shares are of 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 Fund after the exchange is
implemented; and (5) if a shareholder has elected not to utilize the Telephone
Exchange Privilege (see below), a properly executed exchange request must be
received by State Street Bank and Trust Company.
Subject to the above requirements for an exchange, a shareholder or his/her
registered representative may, by telephone or written notice, elect to have
Class A or Class B shares of the Fund exchanged for the same class of shares of
another Phoenix Fund automatically on a monthly,
19
<PAGE>
quarterly, semi-annual, or annual basis or may cancel the privilege
("Systematic Exchange").
Shareholders who maintain an account balance in the Fund 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), may direct that
shares of the Fund be automatically exchanged at predetermined intervals for
shares of the same class of another Phoenix Fund. If the shareholder is
participating in the Self Security program offered by Phoenix Home Life, it is
not necessary to maintain the above account balances in order to use the
systematic Exchange privilege.
Such exchanges will be executed upon the close of business on the 10th of a
month and if the 10th falls on a holiday or weekend, then at the close of
business on the next succeeding business day. The minimum initial and subsequent
amount that may be exchanged under the Systematic Exchange is $25. Systematic
Exchange forms are available from Equity Planning.
Exchanges will be based upon each Fund's net asset value per share next
computed following receipt of a properly executed exchange request, without a
sales charge. On Class B Share exchanges, the contingent deferred sales charge
schedule of the original shares purchased continues to apply.
The exchange of shares from one Fund to another is treated as a sale of the
Exchanged Shares and a purchase of the Acquired Shares for Federal income tax
purposes. The shareholder may, therefore, realize a taxable gain or loss. See
"Dividends, Distributions and Taxes" for information concerning the Federal
income tax treatment of a disposition of shares.
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 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 fund within any 30 day period. The Distributor
has entered into agreements with certain dealers and investment advisors
permitting them to exchange their clients' shares by telephone. These privileges
are limited under those agreements and the Distributor has the right to reject
or suspend those privileges. The Fund reserves the right to terminate or modify
its exchange privileges at any time upon giving prominent notice to shareholders
at least 60 days in advance.
Each Phoenix Fund has different investment objectives and policies.
Shareholders should, therefore, obtain and review the current prospectus of the
Fund into which the exchange is to be made before any exchange requests are
made.
TELEPHONE EXCHANGES
Telephone Exchange privileges are only available in states where the shares
to be acquired may be legally sold. Unless a shareholder elects in writing not
to participate in the Telephone Exchange Privilege, shares for which
certificates have not been issued may be exchanged by calling (800) 243-1574
provided that the exchange is made between accounts with identical
registrations. Under the Telephone Exchange Privilege, telephone exchange orders
may also be entered on behalf of the shareholder by his or her registered
representative.
The Fund and the Transfer Agent will employ reasonable procedures to confirm
that telephone instructions are genuine. In addition to requiring identical
registrations on both accounts, the Transfer Agent will require address
verification and will record telephone instructions on tape. All exchanges will
be confirmed in writing to the shareholder. To the extent that procedures
reasonably designed to prevent unauthorized telephone exchanges are not
followed, the Fund and/or the Transfer Agent may be liable for following
telephone instructions for exchange 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 exchange instruction from the
firm or its registered representatives. However, the shareholder 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 Exchange 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 Exchange Privilege may be difficult to exercise or
may be suspended temporarily. In such event an exchange may be effected by
following the procedure outlined for tendering shares represented by
certificate(s).
If a shareholder elects not to use the Telephone Exchange Privilege or if
the shares being exchanged are represented by a certificate or certificates, in
order to exchange shares the shareholder must submit a written request to
Phoenix Funds c/o State Street Bank and Trust Company, P.O. Box 8301, Boston, MA
02266-8301. If the shares are being exchanged between accounts that are not
registered identically, the signature on such request must be guaranteed by an
eligible guarantor institution as defined by the Fund's 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. Any outstanding certificate or certificates for the
tendered shares must be duly endorsed and submitted.
Purchase and withdrawal plans and reinvestment and exchange privileges are
described more fully in the Statement of Additional Information. For further
information, call Equity Planning at (800) 243-1574.
20
<PAGE>
NET ASSET VALUE
The net asset value per share of the Fund is determined as of the close of
regular trading of the New York Stock Exchange (the "Exchange") on days when the
Exchange is open for trading. The net asset value per share of the Fund is
determined by adding the values of all securities and other assets, subtracting
liabilities, and dividing by the total number of outstanding shares. 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.
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
Directors or their delegates. Foreign and domestic debt securities (other than
short-term investments) are valued on the basis of broker quotations or
valuations provided by a pricing service approved by the Directors 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 Directors have determined approximates market value. For
further information about security valuations, see the Statement of Additional
Information.
HOW TO REDEEM SHARES
Shareholders have the right to have the Fund buy back shares at the net
asset value next determined after receipt of a redemption request 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 (see "Net Asset Value"). In
the case of Class B Share redemptions, investors will be subject to the
applicable deferred sales charge, if any, for such shares (see "Deferred Sales
Charge Alternative--Class B Shares"). To redeem, any outstanding share
certificates in proper form for transfer must be received by Phoenix Funds c/o
State Street Bank and Trust Company, P.O. Box 8301, Boston, MA 02266-8801. To be
in proper form to redeem shares, the signature of the shareholder(s) on the
certificate or stock power must be signed exactly as registered, including any
fiduciary title, on a written instruction letter, certificate, or accompanying
stock power, such signatures being guaranteed by an eligible guarantor
institution as determined in accordance with standards and procedures
established by the Transfer Agent (please contact the Fund at (800) 243-1574
with any questions regarding eligible guarantors).
If no certificate has been issued, the Transfer Agent requires a written
request with signature guarantee. The Transfer Agent may waive the signature
guarantee requirement in the case of shares registered in the names of
individuals singly, jointly, or as custodian under the Uniform Gifts to Minors
Act or Uniform Transfers to Minors Act, the proceeds do not exceed $50,000, and
the proceeds are payable to the registered owner(s) at the address of record.
Such requests must be signed by each person in whose name the account is
registered. In addition, the Fund maintains a continuous offer to repurchase its
shares, and shareholders may normally sell their shares through securities
dealers, brokers, or agents, who may charge customary commissions or fees for
their services. The redemption price in such case will be the price as of the
close of the regular trading session of the Exchange on that day, provided the
order is received by the dealer prior thereto, and is transmitted to the
Distributor prior to the close of its business. No charge is made by
the Fund on redemptions, but shares tendered through investment dealers may be
subject to a service charge by such dealers. Payment for shares redeemed is made
within seven days; provided, however, that redemption proceeds will not be
disbursed until each check used for purchases of shares has been cleared for
payment by the investor's bank, which may take up to 15 days after receipt of
the check.
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.
TELEPHONE REDEMPTIONS
Unless a shareholder elects in writing not to participate in the Telephone
Redemption Privilege, shares for which certificates have not been issued may be
redeemed by telephoning (800) 243-1574 and telephone redemptions will also be
accepted on behalf of the shareholder from his or her registered representative.
The Fund and 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 the shareholder. If there
has been an address change within the past 60 days, a telephone redemption will
not be authorized. Equity Planning and the Fund will employ reasonable
procedures to confirm that telephone instructions are genuine. To the extent
that procedures reasonably designed to prevent unauthorized telephone
redemptions are not followed, Equity Planning and the Fund 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
21
<PAGE>
telephone redemption instruction from the firm or its registered
representatives. However, the shareholder would bear the risk of loss resulting
from instructions entered by an unauthorized third party that Equity Planning
and/or the Fund reasonably believe to be genuine. The Telephone Redemption
Privilege may be modified or terminated at any time without prior 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
suspended temporarily and a shareholder should submit a written redemption
request, as described above.
If the amount of the redemption is over $500, the proceeds will be wired to
the designated U.S. commercial bank account. If the amount of the redemption is
less than $500, the proceeds will be sent by check to the address of record on
the shareholder's account.
Telephone redemption orders received and accepted by the Transfer Agent on
any day when the Transfer Agent is open for business will be entered at the next
determined net asset value. However, telephone redemption orders received and
accepted by the Transfer Agent after the close of trading hours on the Exchange
will be executed on the following business day. The proceeds of a telephone
redemption will normally be sent on the first business day following receipt of
the redemption request. However, with respect to the telephone redemption of
shares purchased by check, such requests will only be effected after the Fund
has assured itself that good payment has been collected for the purchase of
shares, which may take up to 15 days. This expedited redemption privilege is not
available to HR-10, IRA and 403(b)(7) Plans.
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 Act 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 he sold the securities. A
complete description of redemption and repurchase procedures is contained in the
Statement of Additional Information.
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.
REINVESTMENT PRIVILEGE
Shareholders have a one time privilege of using redemption proceeds to
purchase Class A Shares of any Phoenix Fund with no sales charge (at the 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 for reinvestment must be received by the Distributor 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 this reinvestment privilege.
DIVIDENDS, DISTRIBUTIONS AND TAXES
It is the policy of the Fund to distribute substantially all of its net
investment income at least annually and to distribute net realized capital
gains, if any, annually. Both dividends and distributions will be payable in
shares of the Fund at net asset value or, at the option of the shareholder, in
cash.
It is also the policy of the Fund to qualify as a "regulated investment
company" by complying with provisions of the Internal Revenue Code of 1986, as
amended (the "Code") relieving investment companies which distribute
substantially all of their net income (both net investment income and net
realized capital gains) from federal income tax on the amounts distributed. The
Directors believe that the Fund so complied for its last taxable year.
Distributions of net investment income and net realized short-term capital gains
(whether received in shares or in cash) are treated by the shareholder as
ordinary income for federal income tax purposes. Distributions which are
designated by the Fund as long-term gains (whether received in shares or in
cash) are treated by the shareholder as long-term capital gains for federal
income tax purposes regardless of the length of time the shareholder may have
owned shares of the Fund. Shareholders who are not subject to tax on their
income will not be required to pay tax on amounts distributed to them. After the
close of the calendar year the Fund will advise shareholders what portion of any
payments received was ordinary income and what portion was long-term capital
gains.
22
<PAGE>
The federal income tax laws impose a four percent nondeductible excise tax
on each regulated investment company with respect to the amount, if any, by
which such company does not meet distribution requirements specified in the
federal income tax laws. The Fund intends to comply with the distribution
requirements and thus does not expect to incur the four percent nondeductible
excise tax.
IMPORTANT NOTICE REGARDING TAXPAYER IRS CERTIFICATION
Pursuant to IRS regulations, the Fund may be required to withhold 31% of all
reportable payments including any taxable dividends, capital gain distributions
or share redemption proceeds, for any account which does not have a taxpayer
identification number or social security number and certain required
certifications.
The Fund reserves the right to refuse to open an account for any person
failing to provide a taxpayer identification number along with the required
certifications.
The Fund sends to all shareholders, within 31 days after the end of the
calendar year, information which is required by the Internal Revenue Service for
preparing federal income tax returns. Investors are urged to consult their
attorney or tax advisor regarding specific questions as to Federal, foreign,
state or local taxes.
ADDITIONAL INFORMATION
ORGANIZATION OF THE FUND
The Fund was originally organized on March 21, 1967 as a Massachusetts
corporation under the name of "Income and Capital Shares, Inc." The Directors
have designated the authorized capital stock of the Fund as 50,000,000 shares of
Class A Common Stock, $1 par value and 50,000,000 shares of Class B Common
Stock, $1 par value. Shareholders of the Fund are entitled to one full vote for
each full share owned and a fractional vote for any fractional share. Shares
will participate equally in dividends and distributions declared by the Fund and
in the Fund's net assets on liquidation, except as otherwise described in this
Prospectus. Shares are fully paid and non-assessable when issued and are
transferable and redeemable. Shares have no preemptive or conversion rights
(other than as described herein).
ADDITIONAL INQUIRIES
Inquiries and requests for the Statement of Additional Information, the
Annual Report to Shareholders and the Semi-Annual 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.
23
<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 Strategic
Allocation Fund, Inc. (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 May 1, 1997. The Statement
contains more detailed information about the Fund and is incorporated into this
Prospectus by reference. You may obtain a free copy of the Statement by writing
the Fund at 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 December 31, 1996 and is incorporated into the
Statement of Additional Information by reference.
[Recycle logo] Printed on recycled paper using soybean ink
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
101 Munson Street
Greenfield, Massachusetts 01301
Statement of Additional Information
May 1, 1997
This Statement of Additional Information is not the prospectus, but expands
upon and supplements the information contained in the current Prospectus of
Phoenix Strategic Allocation Fund, Inc. (the "Fund"), dated May 1, 1997, and
should be read in conjunction with it. The Fund's Prospectus may be obtained by
calling Phoenix Equity Planning Corporation ("Equity Planning") at (800)
243-4361 or by writing to Equity Planning at 100 Bright Meadow Boulevard, P.O.
Box 2200, Enfield, Connecticut 06083-2200.
--------------------
TABLE OF CONTENTS*
THE FUND............................................................... 2
INVESTMENT OBJECTIVE AND POLICIES (6).................................. 2
INVESTMENT RESTRICTIONS (10)........................................... 9
PERFORMANCE INFORMATION (6)............................................ 11
PORTFOLIO TRANSACTIONS AND BROKERAGE................................... 11
SERVICES OF THE ADVISER (11)........................................... 12
NET ASSET VALUE (21)................................................... 14
PLANS OF DISTRIBUTION (12)............................................. 14
HOW TO BUY SHARES (13)................................................. 16
EXCHANGE PRIVILEGE (19)................................................ 18
REDEMPTION OF SHARES (21).............................................. 19
DIVIDENDS, DISTRIBUTIONS AND TAXES (22)................................ 20
DIRECTORS AND OFFICERS................................................. 21
ADDITIONAL INFORMATION................................................. 29
APPENDIX............................................................... 30
- ----------------
*Numbers in parentheses are cross-references to related sections of the
Prospectus.
--------------------
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders: (800) 367-5877
Telecommunications Device (TTY): (800) 243-1926
PDP 458(5/97)
1
<PAGE>
THE FUND
Phoenix Strategic Allocation Fund, Inc. was organized as a corporation under
the laws of the Commonwealth of Massachusetts on November 22, 1966. Originally a
closed-end dual purpose investment company known as Income and Capital Shares,
Inc., its authorized capital stock consisted of two classes of shares,
Cumulative Income Shares, $1 par value, and Capital Shares, $1 par value.
In accordance with the provisions of the Fund's Restated Articles of
Organization, all outstanding Cumulative Income Shares were called for
retirement on March 31, 1982 at a cash call price consisting of $10 per share
plus accrued and unpaid dividends.
At a meeting of the Capital Shareholders held on March 31, 1982 the holders
of a majority of the outstanding Capital Shares approved a proposal to change
the subclassification of the Fund from a closed-end dual purpose investment
company to an open-end investment company with a single class of redeemable
shares and also approved a proposal to amend the Fund's Restated Articles of
Organization to change the name of the Fund from Income and Capital Shares, Inc.
to P-C Capital Fund, Inc. Both the change in the subclassification of the Fund
and the name change became effective March 31, 1982.
At the July 2, 1986 adjourned session of the May 22, 1986 special meeting of
the Fund's shareholders, the holders of a majority of the outstanding shares
approved amendments to the Fund's Restated Articles of Organization (i) to
change the name of the Fund to Phoenix Total Return Fund, Inc. and (ii) to
change the total number of shares which the Fund is authorized to issue (a) by
eliminating the authorized number of Cumulative Income Shares, $1 par value, and
(b) by increasing the authorized number of Capital Shares, $1 par value, from
3,521,000 to 5,000,000 and reclassifying such Capital Shares as Common Stock, $1
par value. The name change became effective July 9, 1986 and the change in
authorized shares became effective July 22, 1986. At the August 20, 1987
adjourned session of the August 13, 1987 special meeting of the Fund's
shareholders, shareholders voted to amend the Fund's Restated Articles of
Organization to increase the authorized number of shares of Common Stock, $l par
value, from 5,000,000 to 15,000,000. The amendment became effective September
15, 1987.
At a special meeting of the Fund's shareholders held on June 24, 1994, the
holders of the requisite percentages of outstanding shares approved further
amendment to the Fund's Restated Articles of Organization to increase the number
of authorized shares of the Fund's Common Stock, $1 par value, from 15,000,000
to 50,000,000. On September 30, 1994, the holders of the requisite percentages
of outstanding shares approved further amendment to the Fund's Restated Articles
of Organization to (i) to redesignate the Common Stock as Class A Common Stock,
$1 par value; (ii) to authorize the Directors to designate additional classes of
Common Stock; and (iii) to authorize an additional 50,000,000 shares of
undesignated Common Stock, $1 par value.
At a special meeting of the Fund's shareholders held on November 8, 1996,
shareholders of the Fund approved a change in the name of the Fund to Phoenix
Strategic Allocation Fund, Inc. Prior to the effective date of the name change,
November 15, 1996, the Fund was known as the "Phoenix Total Return Fund, Inc."
INVESTMENT OBJECTIVE AND POLICIES
The Fund's Prospectus describes the investment objective of the Fund and
summarizes the investment policies and techniques the Fund will employ in
seeking to achieve its objective. The following discussion supplements the
description of the Fund's investment policies and techniques in the Prospectus.
WRITING AND PURCHASING OPTIONS
Call options written by the Fund normally will have expiration dates between
three and nine months from the date written. During the option period the Fund
may be assigned an exercise notice by the broker-dealer through which the call
option was sold, requiring
2
<PAGE>
the Fund to deliver the underlying security (or cash in the case of securities
index calls) against payment of the exercise price. This obligation is
terminated upon the expiration of the option period or at such earlier time as
the Fund effects a closing purchase transaction. A closing purchase transaction
cannot be effected with respect to an option once the Fund has received an
exercise notice.
The exercise price of a call option written by the Fund may be below, equal
to or above the current market value of the underlying security or securities
index at the time the option is written.
A multiplier for an index option performs a function similar to the unit of
trading for an option on an individual security. It determines the total dollar
value per contract of each point between the exercise price of the option and
the current level of the underlying index. A multiplier of 100 means that a
one-point difference will yield $100. Options on different indices may have
different multipliers.
Securities indices for which options are currently traded include the
Standard & Poor's 100 and 500 Composite Stock Price Indices, Computer/Business
Equipment Index, Major Market Index, Amex Market Value Index, Computer
Technology Index, Oil and Gas Index, NYSE Options Index, Gaming/Hotel Index,
Telephone Index, Transportation Index, Technology Index, and Gold/Silver Index.
The Fund may write call options and purchase call and put options on any other
indices traded on a recognized exchange.
Closing purchase transactions will ordinarily be effected to realize a
profit on an outstanding call option written by the Fund, to prevent an
underlying security from being called, or to enable the Fund to write another
call option with either a different exercise price or expiration date or both.
The Fund may realize a net gain or loss from a closing purchase transaction,
depending upon whether the amount of the premium received on the call option is
more or less than the cost of effecting the closing purchase transaction. If a
call option written by the Fund expires unexercised, the Fund will realize a
gain in the amount of the premium on the option less the commission paid.
The option activities of the Fund may increase its portfolio turnover rate
and the amount of brokerage commissions paid. The Fund will pay a commission
each time it purchases or sells a security in connection with the exercise of an
option. These commissions may be higher than those which would apply to
purchases and sales of securities directly.
LIMITATIONS ON OPTIONS
The Fund may write call options only if they are covered and remain covered
so long as the Fund is obligated as a writer. If the Fund writes a call option
on an individual security, the Fund will own the underlying security at all
times during the option period. The Fund will write call options on indices only
to hedge in an economically appropriate way portfolio securities which are not
otherwise hedged with options or financial futures contracts. Call options on
securities indices written by the Fund will be "covered" by identifying the
specific portfolio securities being hedged.
To secure the obligation to deliver the underlying security, the writer of a
covered call option on an individual security is required to deposit the
underlying security or other assets in escrow with the broker in accordance with
clearing corporation and exchange rules. In the case of an index call option
written by the Fund, the Fund will be required to deposit qualified securities.
A "qualified security" is a security against which the Fund has not written a
call option and which has not been hedged by the Fund by the sale of a financial
futures contract. If at the close of business on any day the market value of the
qualified securities falls below 100% of the current index value times the
multiplier times the number of contracts, the Fund will deposit an amount of
cash or liquid assets equal in value to the difference. In addition, when the
Fund writes a call on an index which is "in-the-money" at the time the call is
written, the Fund will segregate with its custodian bank any asset, including
equity securities and non-investment grade debt so long as the asset is liquid,
unencumbered and marked to market daily equal in value to the amount by which
the call is "in-the-money" times the multiplier times the number of contracts
to collateralize fully the position and thereby ensure that it is not leveraged.
Any amount segregated may be applied to the Fund's obligation to segregate
additional amounts in the event that the
3
<PAGE>
market value of the qualified securities falls below 100% of the current index
value times the multiplier times the number of contracts.
The Fund may invest up to 5% of its total assets in exchange-traded call and
put options. The Fund may sell a call option or a put option which it has
previously purchased prior to the purchase (in the case of a call) or the sale
(in the case of a put) of the underlying security. Any such sale of a call
option or a put option would result in a net gain or loss, depending on whether
the amount received on the sale is more or less than the premium and other
transaction costs paid.
In connection with the Fund's qualifying as a regulated investment company
under the Internal Revenue Code, other restrictions on the Fund's ability to
enter into option transactions may apply from time to time. See "Dividends,
Distributions and Taxes."
RISKS RELATING TO OPTIONS
During the option period, the writer of a call option has, in return for the
premium received on the option, given up the opportunity for capital
appreciation above the exercise price should the market price of the underlying
security increase, but has retained the risk of loss should the price of the
underlying security decline. The writer has no control over the time when it may
be required to fulfill its obligation as a writer of the option.
The risk of purchasing a call option or a put option is that the Fund may
lose the premium it paid plus transaction costs. If the Fund does not exercise
the option and is unable to close out the position prior to expiration of the
option, it will lose its entire investment.
An option position may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although the Fund will write
and purchase options only when the Adviser believes that a liquid secondary
market will exist for options of the same series, there can be no assurance that
a liquid secondary market will exist for a particular option at a particular
time and that the Fund, if it so desires, can close out its position by
effecting a closing transaction. If the writer of a covered call option is
unable to effect a closing purchase transaction, it cannot sell the underlying
security until the option expires or the option is exercised. Accordingly, a
covered call writer may not be able to sell the underlying security at a time
when it might otherwise be advantageous to do so.
Possible reasons for the absence of a liquid secondary market on an exchange
include the following: (i) insufficient trading interest in certain options;
(ii) restrictions on transactions imposed by an exchange; (iii) trading halts,
suspensions or other restrictions imposed with respect to particular classes or
series of options or underlying securities; (iv) inadequacy of the facilities of
an exchange or the clearing corporation to handle trading volume; and (v) a
decision by one or more exchanges to discontinue the trading of options or
impose restrictions on orders.
Each exchange has established limitations governing the maximum number of
call options, whether or not covered, which may be written by a single investor
acting alone or in concert with others (regardless of whether such options are
written on the same or different exchanges or are held or written on one or more
accounts or through one or more brokers). An exchange may order the liquidation
of positions found to be in violation of these limits and it may impose other
sanctions or restrictions. The Adviser believes that the position limits
established by the exchanges will not have any adverse impact upon the Fund.
RISKS OF OPTIONS ON INDICES
Because the value of an index option depends upon movements in the level of
the index rather than movements in the price of a particular security, whether
the Fund will realize a gain or loss on the purchase or sale of an option on an
index depends upon movements in the level of prices in the market generally or
in an industry or market segment rather than upon movements in the price of an
individual security. Accordingly, successful use by the Fund of options on
indices will be subject to the Adviser's ability to
4
<PAGE>
predict correctly movements in the direction of the market generally or in the
direction of a particular industry. This requires different skills and
techniques than predicting changes in the prices of individual securities.
Index prices may be distorted if trading of certain securities included in
the index is interrupted. Trading in index options also may be interrupted in
certain circumstances, such as if trading were halted in a substantial number of
securities included in the index. If this occurred, the Fund would not be able
to close out options which it had written or purchased and, if restrictions on
exercise were imposed, might be unable to exercise an option it purchased, which
would result in substantial losses to the Fund. However, it is the Fund's policy
to write or purchase options only on indices which include a sufficient number
of securities so that the likelihood of a trading halt in the index is
minimized.
Because the exercise of an index option is settled in cash, an index call
writer cannot determine the amount of its settlement obligation in advance and,
unlike call writing on portfolio securities, cannot provide in advance for its
potential settlement obligation by holding the underlying securities.
Consequently, the Fund will write call options on indices only subject to the
limitations described above.
Price movements in securities in the Fund's portfolio will not correlate
perfectly with movements in the level of the index and, therefore, the Fund
bears the risk that the price of the securities held by the Fund may not
increase as much as the level of the index. In this event, the Fund would bear a
loss on the call which would not be completely offset by movements in the prices
of the Fund's portfolio securities. It is also possible that the index may rise
when the value of the Fund's portfolio securities does not. If this occurred,
the Fund would experience a loss on the call which would not be offset by an
increase in the value of its portfolio and might also experience a loss in the
market value of portfolio securities.
Unless the Fund has other liquid assets which are sufficient to satisfy the
exercise of a call on an index, the Fund will be required to liquidate portfolio
securities in order to satisfy the exercise. Because an exercise must be settled
within hours after receiving the notice of exercise, if the Fund fails to
anticipate an exercise, it may have to borrow from a bank (in an amount not
exceeding 5% of the Fund's total assets) pending settlement of the sale of
securities in its portfolio and pay interest on such borrowing.
When the Fund has written a call on an index, there is also a risk that the
market may decline between the time the Fund has the call exercised against it,
at a price which is fixed as of the closing level of the index on the date of
exercise, and the time the Fund is able to sell securities in its portfolio. As
with options on portfolio securities, the Fund will not learn that a call has
been exercised until the day following the exercise date but, unlike a call on a
portfolio security where the Fund would be able to deliver the underlying
security in settlement, the Fund may have to sell part of its portfolio
securities in order to make settlement in cash, and the price of such securities
might decline before they could be sold.
If the Fund exercises a put option on an index which it has purchased before
final determination of the closing index value for that day, it runs the risk
that the level of the underlying index may change before closing. If this change
causes the exercised option to fall "out-of-the-money" the Fund will be required
to pay the difference between the closing index value and the exercise price of
the option (multiplied by the applicable multiplier) to the assigned writer.
Although the Fund may be able to minimize this risk by withholding exercise
instructions until just before the daily cutoff time or by selling rather than
exercising an option when the index level is close to the exercise price, it may
not be possible to eliminate this risk entirely because the cutoff times for
index options may be earlier than those fixed for other types of options and may
occur before definitive closing index values are announced.
FINANCIAL FUTURES CONTRACTS AND RELATED OPTIONS
The Fund may use financial futures contracts and related options to hedge
against changes in the market value of its portfolio securities or securities
which it intends to purchase. Hedging is accomplished when an investor takes a
position in the futures market opposite to his cash market position. There are
two types of hedges--long (or buying) and short (or selling) hedges.
Historically, prices in the futures market have tended to move in concert with
cash market prices, and prices in the futures market
5
<PAGE>
have maintained a fairly predictable relationship to prices in the cash market.
Thus, a decline in the market value of securities in the Fund's portfolio may
be protected against to a considerable extent by gains realized on futures
contracts sales. Similarly, it is possible to protect against an increase in
the market price of securities which the Fund may wish to purchase in the
future by purchasing futures contracts.
The Fund may purchase or sell any financial futures contracts which are
traded on a recognized exchange or board of trade. Financial futures contracts
consist of interest rate futures contracts and securities index futures
contracts. A public market presently exists in interest rate futures contracts
covering long-term U.S. Treasury bonds, U.S. Treasury notes, three-month U.S.
Treasury bills and GNMA certificates. Securities index futures contracts are
currently traded with respect to the Standard & Poor's 500 Composite Stock Price
Index and such other broad-based stock market indices as the New York Stock
Exchange Composite Stock Index and the Value Line Composite Stock Price Index. A
clearing corporation associated with the exchange or board of trade on which a
financial futures contract trades assumes responsibility for the completion of
transactions and also guarantees that open futures contracts will be performed.
In contrast to the situation when the Fund purchases or sells a security, no
security is delivered or received by the Fund upon the purchase or sale of a
financial futures contract. Initially, the Fund will be required to deposit in a
segregated account with its custodian bank an amount of cash or U.S. Treasury
bills. This amount is known as initial margin and is in the nature of a
performance bond or good faith deposit on the contract. The current initial
margin deposit required per contract is approximately 5% of the contract amount.
Brokers may establish deposit requirements higher than this minimum. Subsequent
payments of cash or U.S. Treasury bills, called variation margin, will be made
to and from the account on a daily basis as the price of the futures contract
fluctuates. This process is known as marking to market.
The writer of an option on a futures contract is required to deposit margin
pursuant to requirements similar to those applicable to futures contracts. Upon
exercise of an option on a futures contract, the delivery of the futures
position by the writer of the option to the holder of the option will be
accompanied by delivery of the accumulated balance in the writer's margin
account. This amount will be equal to the amount by which the market price of
the futures contract at the time of exercise exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract.
Although financial futures contracts by their terms call for actual delivery
or acceptance of securities, in most cases the contracts are closed out before
the settlement date without the making or taking of delivery. Closing out is
accomplished by effecting an offsetting transaction. A futures contract sale is
closed out by effecting a futures contract purchase for the same aggregate
amount of securities and the same delivery date. If the sale price exceeds the
offsetting purchase price, the seller immediately would be paid the difference
and would realize a gain. If the offsetting purchase price exceeds the sale
price, the seller immediately would pay the difference and would realize a loss.
Similarly, a futures contract purchase is closed out by effecting a futures
contract sale for the same securities and the same delivery date. If the
offsetting sale price exceeds the purchase price, the purchaser would realize a
gain, whereas if the purchase price exceeds the offsetting sale price, the
purchaser would realize a loss.
The Fund will pay commissions on financial futures contract and related
options transactions. These commissions may be higher than those which would
apply to purchases and sales of securities directly.
LIMITATIONS ON FUTURES CONTRACTS AND RELATED OPTIONS
The Fund may not engage in transactions in financial futures contracts or
related options for speculative purposes but only as a hedge against anticipated
changes in the market value of its portfolio securities or securities which it
intends to purchase. The Fund may not purchase or sell financial futures
contracts or related options if, immediately thereafter, the sum of the amount
of initial margin deposits on the Fund's existing futures and related options
positions and the premiums paid for related options would exceed 2% of the
market value of the Fund's total assets after taking into account unrealized
profits and losses on any such contracts. At the
6
<PAGE>
time of purchase of a futures contract or a call option on a futures 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
market value of the futures contract minus the Fund's initial margin deposit
with respect thereto will be deposited in a segregated account with the Fund's
custodian bank to collateralize fully the position and thereby ensure that it is
not leveraged.
The extent to which the Fund may enter into financial futures contracts and
related options also may be limited by the requirements of the Internal Revenue
Code for qualification as a regulated investment company. See "Dividends,
Distributions and Taxes."
RISKS RELATING TO FUTURES CONTRACTS AND RELATED OPTIONS
Positions in futures contracts and related options may be closed out only on
an exchange which provides a secondary market for such contracts or options. The
Fund will enter into an option or futures position only if there appears to be a
liquid secondary market. However, there can be no assurance that a liquid
secondary market will exist for any particular option or futures contract at any
specific time. Thus, it may not be possible to close out a futures or related
option position. In the case of a futures position, in the event of adverse
price movements the Fund would continue to be required to make daily margin
payments. In this situation, if the Fund has insufficient cash to meet daily
margin requirements it may have to sell portfolio securities at a time when it
may be disadvantageous to do so. In addition, the Fund may be required to take
or make delivery of the securities underlying the futures contracts it holds.
The inability to close out futures positions also could have an adverse impact
on the Fund's ability to hedge its portfolio effectively.
There are several risks in connection with the use of futures contracts as a
hedging device. While hedging can provide protection against an adverse movement
in market prices, it can also preclude a hedger's opportunity to benefit from a
favorable market movement. In addition, investing in futures contracts and
options on futures contracts will cause the Fund to incur additional brokerage
commissions and may cause an increase in the Fund's portfolio turnover rate.
The successful use of futures contracts and related options also depends on
the ability of the Adviser to forecast correctly the direction and extent of
market movements within a given time frame. To the extent market prices remain
stable during the period a futures contract or option is held by the Fund or
such prices move in a direction opposite to that anticipated, the Fund may
realize a loss on the hedging transaction which is not offset by an increase in
the value of its portfolio securities. As a result, the Fund's total return for
the period may be less than if it had not engaged in the hedging transaction.
Utilization of futures contracts by the Fund involves the risk of imperfect
correlation in movements in the price of futures contracts and movements in the
price of the securities which are being hedged. If the price of the futures
contract moves more or less than the price of the securities being hedged, the
Fund will experience a gain or loss which will not be completely offset by
movements in the price of the securities. It is possible that, where the Fund
has sold futures contracts to hedge its portfolio against decline in the market,
the market may advance and the value of securities held in the Fund's portfolio
may decline. If this occurred, the Fund would lose money on the futures contract
and would also experience a decline in value in its portfolio securities. Where
futures are purchased to hedge against a possible increase in the prices of
securities before the Fund is able to invest its cash (or cash equivalents) in
securities (or options) in an orderly fashion, it is possible that the market
may decline; if the Fund then determines not to invest in securities (or
options) at that time because of concern as to possible further market decline
or for other reasons, the Fund will realize a loss on the futures that would not
be offset by a reduction in the price of the securities purchased.
The market prices of futures contracts may be affected if participants in
the futures market elect to close out their contracts through offsetting
transactions rather than to meet margin deposit requirements. In such case,
distortions in the normal relationship between the cash and futures markets
could result. Price distortions could also result if investors in futures
contracts opt to make or take delivery of the underlying securities rather than
to engage in closing transactions due to the resultant reduction in the
liquidity
7
<PAGE>
of the futures market. In addition, due to the fact that, from the point of
view of speculators, the deposit requirements in the futures markets are less
onerous than margin requirements in the cash market, increased participation by
speculators in the futures market could cause temporary price distortions. Due
to the possibility of price distortions in the futures market and because of
the imperfect correlation between movements in the prices of securities and
movements in the prices of futures contracts, a correct forecast of market
trends may still not result in a successful hedging transaction.
Compared to the purchase or sale of futures contracts, the purchase of put
or call options on futures contracts involves less potential risk for the Fund
because the maximum amount at risk is the premium paid for the options plus
transaction costs. However, there may be circumstances when the purchase of an
option on a futures contract would result in a loss to the Fund while the
purchase or sale of the futures contract would not have resulted in a loss, such
as when there is no movement in the price of the underlying securities.
REPURCHASE AGREEMENTS
Repurchase agreements are described in the Fund's Prospectus. Repurchase
agreements will be entered into only with commercial banks, brokers and dealers
considered by the Fund to be creditworthy. The Directors of the Fund will
monitor the Fund's repurchase agreement transactions periodically and with the
Adviser will consider standards which the Adviser will use in reviewing the
creditworthiness of any party to a repurchase agreement with the Fund. No more
than an aggregate of 10% of the Fund's total assets, at the time of investment,
will be invested in repurchase agreements having maturities of no more than
seven days. In addition, the Fund may invest up to 15% of its net assets in
illiquid securities including repurchase agreements having maturities greater
than seven days and other investments subject to legal or contractual
restrictions on resale, or for which there are not readily available market
quotations.
The use of repurchase agreements involves certain risks. For example, if the
seller under a repurchase agreement defaults on its obligation to repurchase the
underlying instrument at a time when the value of the instrument has declined,
the Fund may incur a loss upon its disposition. If the seller becomes insolvent
and subject to liquidation or reorganization under bankruptcy or other laws, a
bankruptcy court may determine that the underlying instrument is collateral for
a loan by the Fund and therefore is subject to sale by the trustee in
bankruptcy. Finally, it is possible that the Fund may not be able to
substantiate its interest in the underlying instrument. While the Fund's
Directors acknowledge these risks, it is expected that they can be controlled
through careful monitoring procedures.
LENDING PORTFOLIO SECURITIES
The Fund may lend portfolio securities to broker-dealers and other financial
institutions in amounts up to 25% of the market or other fair value of its total
assets, provided that such loans are callable at any time by the Fund and are at
all times secured by collateral held by the Fund at least equal to the market
value, determined daily, of the loaned securities. The Fund will continue to
receive any income on the loaned securities, and at the same time will earn
interest on cash collateral (which will be invested in short-term debt
obligations) or a securities lending fee in the case of collateral in the form
of U.S. Government securities. A loan may be terminated at any time by either
the Fund or the borrower. Upon termination of a loan, the borrower will be
required to return the securities to the Fund, and any gain or loss in the
market price during the period of the loan would accrue to the Fund. If the
borrower fails to maintain the requisite amount of collateral, the loan will
automatically terminate, and the Fund may use the collateral to replace the
loaned securities while holding the borrower liable for any excess of the
replacement cost over the amount of the collateral.
When voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the policy of calling the loan, in whole or in
part as may be appropriate, to permit the exercise of such rights if the matters
involved would have a material
8
<PAGE>
effect on the Fund's investment in the securities which are the subject of the
loan. The Fund may pay reasonable finders, administrative and custodial fees in
connection with loans of its portfolio securities.
As with any extension of credit, there are risks of delay in recovery of the
loaned securities and in some cases loss of rights in the collateral should the
borrower of the securities fail financially. However, loans of portfolio
securities will only be made to firms considered by the Fund to be creditworthy
and when the consideration to be earned justifies the attendant risks.
FOREIGN SECURITIES
The Fund may purchase foreign securities, including those issued by foreign
branches of U.S. banks. In any event, such investments in foreign securities
will be less than 25% of the total net asset value of the Fund. Investments in
foreign securities, particularly those of non-governmental issuers, involve
considerations which are not ordinarily associated with investing in domestic
issues. These considerations include changes in currency rates, currency
exchange control regulations, the possibility of expropriation, the
unavailability of financial information, the difficulty of interpreting
financial information prepared under foreign securities markets, the impact of
political, social or diplomatic developments, difficulties in invoking legal
process abroad and the difficulty of assessing economic trends in foreign
countries.
The Fund may use a foreign custodian in connection with its purchases of
foreign securities and may maintain cash and cash equivalents in the care of a
foreign custodian. The amount of cash or cash equivalents maintained in the care
of eligible foreign custodians will be limited to an amount reasonably necessary
to effect the Fund's foreign securities transactions. The use of a foreign
custodian invokes considerations which are not ordinarily associated with
domestic custodians. These considerations include the possibility of
expropriations, restricted access to books and records of the foreign custodian,
inability to recover assets that are lost while under the control of the foreign
custodian, and the impact of political, social or diplomatic developments.
INVESTMENT RESTRICTIONS
The following information supplements the information included in the
Prospectus with respect to the investment restrictions to which the Fund is
subject. The investment restrictions described below are fundamental policies
and may not be changed without the approval of the lesser of (i) a majority of
the Fund's outstanding shares and (ii) 67% of the shares represented at a
meeting of Fund shareholders at which the holders of 50% or more of the Fund's
outstanding shares are represented. The Fund may not:
(1) Make short sales of securities, unless at the time of sale the Fund owns an
equal amount of such securities.
(2) Purchase securities on margin, except that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities. The deposit or payment by the Fund of initial or
maintenance margin in connection with financial futures contracts or
related options transactions is not considered the purchase of a security
on margin.
(3) Write, purchase or sell puts, calls or combinations thereof, except that
the Fund may (a) write exchange-traded covered call options on portfolio
securities and enter into closing purchase transactions with respect to
such options, (b) purchase exchange-traded call options and put options,
provided that the premiums on all outstanding call and put options would
not exceed 5% of its total assets, and enter into closing sale transactions
with respect to such options, and (c) engage in financial futures contracts
and related options transactions, provided that the sum of the initial
margin deposits on the Fund's existing futures and related options
positions and the premiums paid for related options would not exceed 5% of
its total assets.
(4) Borrow in excess of 5% of the market or other fair value of its total
assets, or pledge its assets to an extent greater than 5% of the market or
other fair value of its total assets. Any such borrowings shall be from
banks and shall be undertaken only as a temporary measure for extraordinary
or emergency purposes. Deposits in escrow in connection with the writing of
covered call options or in
9
<PAGE>
connection with the purchase or sale of financial futures contracts and
related options are not deemed to be a pledge or other encumbrance.
(5) Underwrite the securities of other issuers, except to the extent that in
connection with the disposition of portfolio securities the Fund may be
deemed to be an underwriter.
(6) Concentrate its assets in the securities of issuers all of which conduct
their principal business activities in the same industry. This restriction
does not apply to obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities.
(7) Make any investment in real estate, real estate limited partnerships,
commodities or commodities contracts, except that the Fund may (a) purchase
or sell readily marketable securities which are secured by interests in
real estate, or issued by companies which deal in real estate including
real estate investment and mortgage investment trusts, and (b) engage in
financial futures contracts and related options transactions, provided that
the sum of the initial margin deposits on the Fund's futures and related
options positions and the premiums paid for related options would not
exceed 5% of the Fund's total assets.
(8) Make loans, except that the Fund may (a) invest up to 10% of its total
assets in repurchase agreements of a type regarded as "liquid" which are
fully collateralized as to principal and interest and which are entered
into only with commercial banks, brokers and dealers considered by the Fund
to be creditworthy and (b) loan its portfolio securities in amounts up to
one-third of the market or other fair value of its total assets.
(9) Purchase securities of other investment companies, except that the Fund may
make such a purchase (a) in the open market involving no commission or
profit to a sponsor or dealer (other than the customary broker's
commission), provided that immediately thereafter (i) not more than 10% of
the Fund's total assets would be invested in such securities and (ii) not
more than 3% of the voting stock of another investment company would be
owned by the Fund, or (b) as part of a merger, consolidation, or
acquisition of assets.
(10) Invest more than 5% of its total assets in the securities of any one issuer
(except the U.S. Government) or purchase more than 10% of the outstanding
voting securities or more than 10% of the securities of any class of any
one issuer.
(11) Invest in securities of any issuer if any officer or director of the Fund
or of the Fund's investment adviser owns more than 1/2 of 1% of the
outstanding securities of such issuer and such officers and directors own
in the aggregate more than 5% of the securities of such issuer.
(12) Invest in the aggregate more than 5% of its total assets in the securities
of any issuers which have (with predecessors) a record of less than three
years of continuous operations.
(13) Invest in warrants or rights except where acquired in units or attached to
other securities.
(14) Purchase an illiquid security such as a restricted security (including
repurchase agreements of a type regarded as "illiquid") or a security for
which market value quotations are not readily available if as a result of
such purchase more than 15% of the Fund's net assets would be invested in
such securities.
(15) Invest in interests in oil, gas, or other mineral exploration or
development programs.
(16) Issue senior securities.
10
<PAGE>
If a percentage restriction on investment or utilization of assets as set
forth is adhered to at the time an investment is made, a later change in the
percentage resulting from a change in the values or costs of the Fund's assets
will not be considered a violation of the restriction.
PERFORMANCE INFORMATION
Performance information for the Fund may appear in advertisements, sales
literature, or reports to shareholders or prospective shareholders. Performance
information in advertisements and sales literature may be expressed as "average
annual total return" and "total return."
The average annual total return for Class A and Class B Shares is computed
in accordance with a standardized method prescribed by rules of the Securities
and Exchange Commission. The average annual total return for a specific period
is found by first taking a hypothetical $1,000 investment ("initial investment")
in the Fund's shares on the first day of the period, adjusting to deduct the
maximum sales charge, and computing the "redeemable value" of that investment at
the end of the period. The redeemable value is then divided by the initial
investment, and this quotient is taken to the Nth root (N representing the
number of years in the period) and 1 is subtracted from the result, which is
then expressed as a percentage. The calculation assumes that all income and
capital gains dividends paid by the Fund have been reinvested at net asset value
on the reinvestment dates during the period.
The manner in which total return will be calculated for public use is
described above. The following table summarizes the calculation of total return
for shares of the Fund, through December 31, 1996.
Average Annual Total Return As Of December 31, 1996
Periods ended From Inception
1 Year 5 Years 10 Years 10/24/94 to 12/31/96
-------- --------- ---------- ----------------------
Class A 3.60% 7.86% 10.29% N/A
Class B 4.07% N/A N/A 10.12%
Performance information reflects only the performance of a hypothetical
investment in the 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 investment objectives 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.
PORTFOLIO TRANSACTIONS AND BROKERAGE
In effecting portfolio transactions for the Fund, the Adviser adheres to the
Fund's policy of seeking best execution and price, determined as described
below, except to the extent it is permitted to pay higher brokerage commissions
for "brokerage and research services" as defined herein. The Adviser may cause
the Fund to pay a broker an amount of commission for effecting a securities
transaction in excess of the amount of commission which another broker or dealer
would have charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker. As provided in
Section 28(e) of the Securities Exchange Act of 1934, "brokerage and research
services" include advice as to the value of securities, the advisability of
investing in, purchasing or selling securities, the availability of securities
or purchasers or sellers of securities; furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement). Brokerage and research services provided by brokers to
11
<PAGE>
the Fund or the Adviser are considered to be in addition to and not in lieu of
services required to be performed by the Adviser under its contract with the
Fund and may benefit both the Fund and other accounts of the Adviser.
Conversely, brokerage and research services provided by brokers to other
accounts of the Adviser may benefit the Fund. Where transactions are made in
the over-the-counter market, the Adviser will cause the Fund to deal with the
primary market makers, unless more favorable prices are otherwise obtainable.
The determination of what may constitute best execution and price in the
execution of a securities transaction by a broker involves a number of
considerations including, without limitation, the overall direct net economic
result to the Fund (involving both price paid or received and any commissions
and other costs paid), the efficiency with which the transaction is effected,
the ability to effect the transaction at all where a large block is involved,
availability of the broker to stand ready to execute possibly difficult
transactions in the future and the financial strength and stability of the
broker. Such considerations are judgmental and are weighed by the Adviser in
determining the overall reasonableness of brokerage commissions paid by the
Fund.
The policy of the Fund with respect to brokerage is and will be reviewed by
the Board of Directors of the Fund from time to time. Because of the possibility
of further regulatory developments affecting the securities exchanges and
brokerage practices generally, the foregoing practices may be changed, modified
or eliminated.
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 consistent 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 share 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
Directors will annually review these procedures or as frequently as shall
appear appropriate.
For the fiscal years ended December 31, 1994, 1995, and 1996 brokerage
commissions paid by the Fund on portfolio transactions totaled $889,406,
$854,032 and $1,442,976, respectively. None of such commissions was paid to a
broker who was an affiliated person of the Fund or an affiliated person of such
a person or, to the knowledge of the Fund, to a broker an affiliated person of
which was an affiliated person of the Fund or the Adviser. Total brokerage
commissions paid during the fiscal year ended December 31, 1996 included
brokerage commissions of $1,301,536 on portfolio transactions aggregating
$953,762,742 executed by brokers who provided research and other statistical
and factual information.
SERVICES OF THE ADVISER
The offices of the Adviser, Phoenix Investment Counsel, Inc., are located at
56 Prospect Street, Hartford, Connecticut 06115-0480. The Adviser was organized
in 1932 as John P. Chase, Inc. and has been engaged in the management of the
Fund since 1967. In addition to the Fund, the Adviser also serves as investment
adviser to Phoenix Series Fund, The Phoenix Edge Series Fund (all Series
12
<PAGE>
except Real Estate Securities Series and Aberdeen New Asia Series), Phoenix
Strategic Equity Series Fund (all Funds other than the Phoenix Equity
Opportunities Fund) and the Phoenix Multi-Portfolio Fund (all Portfolios other
than the Real Estate Securities Portfolio), and as sub-adviser to the Chubb
America Fund, Inc., SunAmerica Series Trust and JNL Series Trust, among other
investment adviser clients.
All of the outstanding stock of the Adviser is owned by Phoenix Equity
Planning Corporation ("Equity Planning"), an indirect subsidiary of Phoenix Duff
& Phelps Corporation. Prior to November 1, 1995, PIC and Equity Planning were
indirect, wholly-owned subsidiaries of Phoenix Home Life Mutual Insurance
Company ("Phoenix") of Hartford, Connecticut. Phoenix is in the business of
writing ordinary and group life and health insurance and annuities. It was
founded in 1851 and at December 31, 1996 had total assets of approximately $14
billion and total life insurance in force of approximately $164 billion. Equity
Planning, a mutual fund distributor, acts as the Distributor of the Fund's
shares and as Financial Agent for the Fund.
Philip R. McLoughlin, a director and officer of the Fund, is also a director
of the Adviser. David R. Pepin and Michael E. Haylon, officers of the Fund, are
directors and officers of the Adviser. G. Jeffrey Bohne, Mary E. Canning,
William R. Moyer and William J. Newman, officers of the Fund, are officers of
the Adviser.
The contract between the Fund and the Adviser provides that the Adviser
shall furnish the Fund investment advice, certain administrative services,
office space and facilities, and shall pay the compensation of all officers and
employees of the Fund. All expenses (other than those specifically referred to
as being borne by the Adviser) incurred in the operation of the Fund, including,
among others, taxes, brokerage fees and commissions, fees of Directors who are
not full time employees of the Adviser or any of its affiliates, charges of
custodians, transfer and dividend disbursing agents and registrars, bookkeeping,
auditing and legal expenses, expenses of insurance premiums for fidelity and
other coverage and extraordinary expenses and expenses of a non-recurring nature
which may include, but not be limited to, the reasonable and proportionate cost
of any reorganization or acquisition of assets and the cost of legal proceedings
to which the Fund is a party, will be borne by the Fund.
The contract between the Fund and the Adviser provides that, as compensation
for its services to the Fund, the Adviser is entitled to a fee, payable within
five days after the end of each fiscal month, at the annual rate of 0.65% of the
average of the aggregate daily net asset values of the Fund up to $1 billion;
0.60% of such value between $1 billion and $2 billion; and 0.55% of such value
in excess of $2 billion. It also provides that the Fund will reimburse the
Adviser on a cost basis in the event the Adviser provides any services
(excluding printing) involved in maintaining registrations of the Fund and of
its shares with the Securities and Exchange Commission or involved in the
preparation of shareholder reports. The Adviser has agreed to reimburse the Fund
for the amount, if any, of the expenses of the Fund (including the Adviser's
compensation but excluding interest, brokerage cost, taxes and extraordinary
expenses) for any fiscal year which exceeds the level of expenses which the Fund
is permitted to bear under the most restrictive expense limitation imposed (and
not waived) on the Fund by any state in which shares of the Fund are then
qualified for sale. Currently, the most restrictive state expense limitation
provisions limit such expenses of the Fund to 2-1/2% of the first $30 million of
average net assets, 2% of the next $70 million of such net assets and 1-1/2% of
such net assets in excess of $100 million. In the event legislation were to be
adopted in each state so as to eliminate this restriction, the Fund would take
such action necessary to eliminate this expense limitation. For the fiscal years
ended December 31, 1994, 1995 and 1996 the Adviser received fees totaling,
$2,276,834, $2,371,629 and $2,241,038, respectively, and it was not necessary
that the Adviser reimburse ordinary operating expenses of the Fund.
The contract between the Fund and the Adviser continues from year to year so
long as (1) such continuance is specifically approved at least annually by the
Board of Directors of the Fund or by a vote of a majority of the outstanding
shares of the Fund and (2) such continuance or any renewal and the terms of such
contract have been approved by the vote of a majority of Directors of the Fund
who are not interested persons, as that term is defined in the Investment
Company Act of 1940, of the Fund or the Adviser, cast in person at a meeting
called for the purpose of voting on such approval. It may be terminated without
penalty at any time on sixty
13
<PAGE>
days' written notice, either by the Board of Directors of the Fund, by a vote
of a majority of the outstanding shares of the Fund or by the Adviser, and
automatically terminates upon its assignment (within the meaning of said
Investment Company Act).
NET ASSET VALUE
The net asset value per share of the Fund is determined as of the close of
regular trading of the New York Stock Exchange (the "Exchange") on days when the
Exchange is open for trading. The Exchange will be closed on the following
observed national holidays: New Year's Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Since the Fund does not price securities on weekends or United States national
holidays, the net asset value of foreign assets may be significantly affected on
days when the investor has no access to the Fund. The net asset value per share
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. 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 Directors or their delegates. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world, the
calculation of net asset value may not take place for the Fund when investing in
foreign securities contemporaneously with the determination of the prices of the
majority of the portfolio securities of the Fund. All assets and liabilities
initially expressed in foreign currency values will be converted into United
States dollar values at the mean between the bid and ask quotations of such
currencies against United States dollars as last quoted by any recognized
dealer. If an event were to occur after the value of an investment was so
established but before the net asset value per share was determined, which was
likely to materially change the net asset value, then the instrument would be
valued using fair value considerations by the Directors or their delegates. If
at any time the Fund has investments where market quotations are not readily
available, such investments are valued at the fair value thereof as determined
in good faith by the Directors although the actual calculations may be made by
persons acting pursuant to the direction of the Directors.
PLANS OF DISTRIBUTION
Equity Planning, a registered broker-dealer which is a subsidiary of Phoenix
Duff & Phelps Corporation, serves as exclusive distributor of the Fund's
shares.
The Fund and Equity Planning have entered into distribution agreements under
which Equity Planning has agreed to use its best efforts to find purchasers for
Fund shares and the Fund has granted to 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 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 Directors will
consider
14
<PAGE>
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.
For its services under the Class A and Class B share distribution
agreements, Equity Planning receives sales charges on transactions in Fund
shares (see "Purchase of Shares" in the Prospectus) and retains such charges
less the portion thereof allowed to its registered representatives and to
securities dealers and securities brokers with whom it has sales agreements. In
addition, Equity Planning may receive payments from the Fund pursuant to the
Distribution Plan described below. For the fiscal year ended December 31, 1995
and 1996 Equity Planning's gross commissions on sales of Fund shares totaled
$468,755 and $289,171, respectively. Of this amount, $409,264 and $50,367,
respectively were paid to dealers with whom Equity Planning had sales
agreements.
Equity Planning also acts as Financial Agent of the Fund and as such
performs bookkeeping and pricing services and certain other administrative
functions for the Fund. As compensation for its services, effective as of
January 1, 1997, Equity Planning is entitled to a fee, payable monthly and based
upon the average of the aggregate daily net asset values of the Fund, at the
following incremental annual rates:
First $100 million .05% plus a minimum fee
$100 million to $300 million .04%
$300 million to $500 million .03%
Greater than $500 million .015%
A minimum fee of $50,000 applies to the Fund. In addition, Equity Planning
is paid $12,000 for each class of shares beyond one. Until December 31, 1996,
Equity Planning's fee for these services was based on an annual rate of 0.03% of
the Fund's aggregate daily net asset value. For services to the Fund during the
fiscal years ended December 31, 1994, 1995 and 1996, the Financial Agent
received fees of $105,085, $109,460 and $103,432, respectively.
Equity Planning also acts as Transfer Agent of the Fund. As compensation,
Equity Planning receives a fee equivalent to $14.95 for each designated
shareholder account. 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 effective June 1, 1994.
Philip R. McLoughlin, a director and officer of the Fund, is a director and
officer of Equity Planning; David R. Pepin, an officer of the Fund, is a
director and an officer of Equity Planning. Michael E. Haylon, an officer of the
Fund, is a director of Equity Planning. G. Jeffrey Bohne, Nancy G. Curtiss,
William E. Keen III, William R. Moyer and Leonard J. Saltiel are officers of the
Fund and officers of Equity Planning.
DISTRIBUTION PLANS
To permit the use of Fund assets to encourage activities primarily intended
to result in the sale of Fund shares, the Fund has adopted Distribution Plans
(the "Plans") pursuant to Rule 12b-1 under the Investment Company Act of 1940.
The Class A and Class B Plans have been approved by the Board of Directors of
the Fund, including a majority of the Directors who are not interested persons
of the Fund and who have no direct or indirect financial interest in the Plan or
any agreement related thereto (the "Rule 12b-1 Directors"), and by the
shareholders of the Fund.
The Class A Plan provides that the Fund may pay to its Distributor (i)
amounts not exceeding 0.25% annually of its average daily net asset value for
each year elapsed after the inception of the Plan and (ii) amounts not exceeding
0.25% of the amount of any investment in Fund shares equal to $1,000,000 or more
made in a lump sum or pursuant to an authorized letter of intent. However, the
Fund presently intends to limit payments under the Plan for any fiscal year to
0.25% of the Fund's average net assets for such
15
<PAGE>
fiscal year. The Class B Plan authorizes the payment by the Fund to the
Distributor of accounts not exceeding 1.00% annually of the Fund's average daily
net assets for each year elapsed after the inception of the Plan. Although under
no contractual obligation to do so, the Fund intends to make such payments to
the Distributor (i) as commissions for shares sold, all or any part of which
commissions may be paid by the Distributor to others (who may be other dealers
or registered representatives of the Distributor), (ii) to enable the
Distributor to pay to such others maintenance or other fees in respect of shares
sold by them and remaining outstanding on the Fund's books during the period in
respect of which the fee is paid and (iii) to enable the Distributor to pay to
bank-affiliated securities brokers maintenance or other fees with respect to
Fund shares purchased by their customers and remaining outstanding on the Fund's
books during the period with respect to which the fee is paid; provided however,
that payments under (ii) and (iii) are subject to limits of 0.25% and 1.00%
annually of the average daily net assets of the Class A or Class B shares
respectively to which the payments relate. Payments, less the portion thereof
paid by the Distributor to others, may be used by the Distributor for its
expenses of distribution of Fund shares. If expenses of distribution exceed
payments and any sales charges retained by the Distributor, the Fund is not
required to reimburse the Distributor for excess expenses.
Each Plan requires that at least quarterly the Directors of the Fund review
a written report with respect to the amounts expended under the Plan and the
purposes for which such expenditures were made. While each Plan is in effect,
the Fund will be required to commit the selection and nomination of candidates
for Directors who are not interested persons of the Fund to the discretion of
other Directors who are not interested persons. Each Plan continues in effect
from year to year only provided such continuance is approved annually in advance
by votes of the majority of both (a) the Board of Directors of the Fund and (b)
the Rule 12b-1 Directors, cast in person at a meeting called for the purpose of
voting on the Plan and any agreements related to each Plan. For the fiscal year
ended December 31, 1996, the Fund paid Rule 12b-1 Fees in the amount of $930,331
of which Equity Planning received $206,149 and unaffiliated broker/dealers
received $724,182. Of this amount: (1) $773,290 represented compensation to
dealers; (2) $114,269 represented compensation to sales and shareholder services
personnel and (3) $42,773 was utilized for compensation for marketing material.
HOW TO BUY SHARES
The Prospectus includes information as to the offering price of Class A and
Class B Fund shares, the sales charge included in the offering price, and the
minimum initial and subsequent investments which may be made in Fund shares.
Sales of shares are made through registered representatives of the Distributor,
Equity Planning, or through securities brokers or dealers with whom Equity
Planning has sales agreements. Dealers purchase shares at a discount from the
applicable offering price. Dealers receiving such discounts may be deemed
"underwriters" within the meaning of that term under the Securities Act of 1933.
Sales of shares are also made to customers of banks or bank-affiliated
securities brokers with whom Equity Planning has sales agreements. Customers
purchase shares at the applicable offering price.
ALTERNATIVE PURCHASE ARRANGEMENTS
The Fund is authorized to offer two classes of shares. Shares may be
purchased from investment dealers 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 either (i) at the time of the purchase (the "initial sales charge
alternative"), or (ii) on a contingent deferred basis (the "deferred sales
charge alternative").
CLASS A SHARES
An investor who pays an initial sales charge or purchases at net asset value
acquires Class A shares. Class A shares are subject to an ongoing distribution
fee at an annual rate of up to 0.25% of the Fund's aggregate average daily net
assets attributable to Class A shares. Certain purchases of Class A shares
qualify for reduced initial sales charges.
16
<PAGE>
CLASS B SHARES
An investor who elects the deferred sales charge alternative acquires Class
B shares. Class B shares do not incur a sales charge when they are purchased,
but are subject to a sales charge if they are redeemed within six years of
purchase. The deferred sales charge may be waived in connection with certain
qualifying redemptions.
Class B shares are subject to an ongoing distribution fee at an annual rate
of up to 1.00% of the Fund's aggregate average daily net assets attributable to
Class B shares. Class B shares permit the investor's payment to be invested in
full from the time the investment is made. The higher ongoing distribution fee
paid by Class B shares will cause such shares to have a higher expense ratio and
to pay lower dividends than those related to Class A shares. Class B shares will
automatically convert to Class A shares eight years after the end of the
calendar month in which the shareholder's order to purchase was accepted. The
purpose of the conversion feature is to eliminate the higher distribution fee
after the Distributor has been compensated for distribution expenses related to
the Class B shares. See "Conversion Feature" below.
The alternative purchase arrangement permits an investor to choose the
method of purchasing shares that is more beneficial given such factors as the
amount of the purchase, the length of time the investor expects to hold the
shares, and whether the investor wishes to receive distributions in cash or to
reinvest them in additional shares. Investors should consider whether, during
the anticipated term of their investment in the Fund, the accumulated continuing
distribution fees and contingent deferred sale charges on Class B shares prior
to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and the extent
to which such differential would be offset by the lower expenses attributable to
Class A shares.
Class A shares are subject to a lower distribution fee and, accordingly, pay
correspondingly higher dividends. However, because initial sales charges are
deducted at the time of purchase, Class A investors do not have all their funds
invested initially and initially own fewer shares. Investors not qualifying for
reduced initial sales charges who expect to maintain their investment for an
extended period of time should 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 term of the investment.
However, such investors must weigh this consideration against the fact that,
because of the initial Class A sales charges, not all of their funds will be
invested initially.
The distribution expenses incurred by the Distributor in connection with the
sale of the shares will be paid, in the case of Class A shares, from the
proceeds of the initial sales charge and the ongoing distribution fees and, in
the case of Class B shares, from the proceeds of the ongoing distribution fees
and the contingent deferred sales charge imposed upon redemptions within six
years of purchase. Sales personnel of broker-dealers distributing shares may
receive differing compensation for selling Class A or Class B shares. The
purpose and function of the contingent deferred sales charge and ongoing
distribution fees with respect to the Class B shares are the same as those of
the initial sale charge and ongoing distribution fees with respect to the Class
A shares.
Dividends paid with respect to Class A and Class B shares will be calculated
in the same manner, at the same time and on the same day, except that the higher
distribution fees and any incremental transfer agency costs relating to Class B
shares will be borne exclusively by that Class and will result in a lower
dividend.
The Directors of the Fund have determined that no conflict of interest will
exist between the Class A and Class B shares. The Directors shall, pursuant to
their fiduciary duties under the Investment Company Act of 1940 and state law,
monitor the question of Class A and Class B shares and seek to ensure that no
such conflict arises.
CONVERSION FEATURE
Class B shares include all shares purchased pursuant to the deferred sales
charge alternative which have been outstanding for less than the period ending
eight years after the end of the month in which the shares were purchased. At
the end of this period, Class B shares will automatically convert to Class A
shares and will no longer be subject to the higher distribution fees. 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
17
<PAGE>
purpose of the conversion feature is to eliminate the higher distribution fee
after the Distributor has been compensated for distribution expenses related to
the Class B shares.
For purposes of conversion to Class A, shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B shares
will be considered to be held in a separate sub-account. Each time any Class B
shares in the shareholder's account (other than those in the sub-account)
convert to Class A, an equal pro rata portion of the Class B shares in the
sub-account will also convert to Class A.
The conversion of Class B shares to Class A shares is subject to the
continuing availability of an opinion of counsel or a ruling of the Internal
Revenue Service to the effect that (i) the assessment of the higher distribution
fees and transfer agency costs with respect to Class B shares does not result in
any dividends or distributions constituting "preferential dividends" under the
Internal Revenue Code of 1986, as amended (the "Code"), and (ii) that the
conversion of shares does not constitute a taxable event under federal income
tax law. 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
conversions of Class B shares would occur, and shares might continue to be
subject to the higher distribution fee for an indefinite period which may extend
beyond the period ending eight years after the end of the month in which the
shares were purchased. If the Fund were unable to obtain such assurances with
respect to the assessment of distribution 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.
INVEST-BY-PHONE
This expedited investment service allows a shareholder to purchase shares
for his account by requesting a transfer of funds from the balance of his bank
account. Once a request is phoned in, Equity Planning will initiate the
transaction by wiring a request for monies to the shareholder's commercial bank,
savings bank or credit union via Automated Clearing House (ACH). The
shareholder's bank, which must be an ACH member, will in turn forward the monies
to State Street Bank and Trust Company for credit to the shareholder's account.
ACH is a computer based clearing and settlement operation established for the
exchange of electronic transactions among participating depository institutions.
To establish this service, please complete an Invest-by-Phone Application
and attach a voided check, if applicable. Upon Equity Planning's acceptance of
the authorization form (usually two weeks) the shareholder may call toll free
800-367-5877 prior to 3:00 p.m. (New York time) to place his purchase request.
Instructions as to the account number and amount to be invested must be
communicated to Equity Planning. Equity will then contact the shareholder's
bank via ACH with appropriate instructions. The purchase is normally credited to
the shareholder's account the day following receipt of the verbal instructions.
The Fund may delay the mailing of a check for redemption proceeds of Fund shares
purchased with a check or via Invest-by-Phone service until the Fund has assured
itself that good payment has been collected for the purchase of the shares,
which may take up to 15 days.
The Fund and Equity Planning reserve the right to modify or terminate the
Invest-by-Phone service for any reason or to institute charges for maintaining
an Invest-by-Phone account.
EXCHANGE PRIVILEGE
Shares of the Fund may be exchanged for shares of the same class of shares of
any other Phoenix Fund on the basis of the relative net asset values per share
at the time of the exchange. A shareholder may elect to have shares of the
Fund exchanged for shares of any other Phoenix Fund automatically on a monthly,
quarterly, semi-annual, or annual basis ("Systematic Exchange").
18
<PAGE>
REDEMPTION OF SHARES
BY MAIL. Non-certificated shares registered on the books of the Fund may be
redeemed by submitting a written request for redemption to Phoenix Funds, c/o
State Street Bank and Trust Company, PO Box 8301, Boston, MA 02266-8301 . The
redemption request must contain the shareholder(s)' account name(s) and
number(s), the number of shares to be redeemed and the signature(s) of the
registered shareholder(s). If the shares are registered in the names of
individuals, singly, jointly or as custodian under the Uniform Gifts to Minors
Act or Uniform Transfers to Minors Act, and the proceeds of the redemption do
not exceed $50,000 and are to be paid to the registered owner(s) at the address
of record, the signature(s) on the redemption request need not be guaranteed.
Otherwise, the signature(s) must be guaranteed by an eligible guarantor
institution as defined by the Fund's 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. Shares represented by certificates in the possession of the
shareholder may be redeemed by submitting a written request for the redemption
to Phoenix Funds, c/o State Street Bank and Trust Company, PO Box 8301,
Boston, MA 02266-8301, together with the certificates, duly endorsed by all
persons in whose names the shares are registered, with signatures guaranteed, if
required, in the manner described above. Signatures must also be guaranteed on
any change of address request submitted in conjunction with a redemption
request.
The redemption price is the net asset value next determined following the
receipt of a duly executed request for redemption of shares, together with any
outstanding certificate or certificates for such shares, duly endorsed, with
signatures guaranteed in the manner described above. Class B shares are subject
to a contingent deferred sales charge upon a redemption of shares within six
years of the date of purchase. Additional documentation may be required where
shares are held by a corporation, partnership, trustee or executor. Therefore,
it is suggested that shareholders holding shares registered in other than
individual names contact Equity Planning prior to redemption to ensure that all
necessary documents accompany the redemption request.
BY TELEPHONE. Unless a shareholder elects in writing not to participate in
the Telephone Redemption Privilege, shares for which certificates have not been
issued may be redeemed by calling (800) 243-1574 and telephone redemptions will
also be accepted on behalf of the shareholder from his or her registered
representative as described in the Prospectus. 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 the shareholder. If
there has been an address change within the past 60 days, a telephone redemption
will not be authorized. Equity Planning and the Fund will employ reasonable
procedures to confirm that telephone instructions are genuine. To the extent
that procedures reasonably designed to prevent unauthorized telephone
redemptions are not followed, Equity Planning and/or the Fund 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, the
shareholder would bear the risk of loss resulting from instructions entered by
an unauthorized third party that Equity Planning and/or the Fund reasonably
believe to be genuine.
Telephone redemption orders received and accepted by the Transfer Agent on
any day when the Transfer Agent is open for business will be entered at the next
determined net asset value. However, telephone redemption orders received and
accepted by the Transfer Agent after the close of trading hours on the Exchange
will be executed on the following business day. The proceeds of a telephone
redemption will normally be sent on the first business day following receipt of
the redemption request. However, with respect to the telephone redemption of
shares purchased by check, such requests will only be effected after the Fund
has assured itself that good payment has been collected for the purchase of
shares, which may take up to 15 days.
If the proceeds of the redemption are less than $500, the redemption will
normally be paid on the first business day following receipt of the request and
sent by mail to the address of record on the shareholder's account. If the
proceeds of the redemption are
19
<PAGE>
$500 or more, the redemption will be wired to the designated U.S. commercial
bank account. (The Telephone Redemption Privilege is not available to HR-10,
IRA or 403(b)(7) Plans.)
DIVIDENDS, DISTRIBUTIONS AND TAXES
It is the policy of the Fund to comply with provisions of the Internal
Revenue Code relieving investment companies which distribute substantially all
of their net income (both net investment income and net realized capital gains)
from Federal income tax on the amounts distributed.
To qualify for treatment as a "regulated investment company" for tax
purposes, the Fund must derive less than 30% of its gross income in each taxable
year from gains (without deduction for losses) from the sale or other
disposition of securities held for less than three months. This requirement may
affect decisions by the Fund regarding the purchase or sale of securities. In
particular, this requirement may affect decisions to purchase or sell options,
futures contracts and options on futures contracts.
Income dividends and short-term capital gain distributions, whether received
in shares or in cash, are treated by shareholders as ordinary income for Federal
income tax purposes.
Distributions which are designated by the Fund as long-term capital gains,
whether received in shares or in cash, are taxable to shareholders as long-term
capital gains (regardless of how long the distributee has been a shareholder).
Any loss from the sale of shares held for six months or less will be treated as
long-term capital loss to the extent of any capital gain distributions paid with
respect to such shares.
Any taxable distribution which is declared in December payable to
shareholders of record on any date in December and paid before the next February
l will be taxable to shareholders in the year declared.
The Fund is required to withhold, for income taxes, 31% of dividends,
distributions and redemption payments if any of the following circumstances
exist: (i) a shareholder fails to provide the Fund with a correct taxpayer
identification number ("TIN"); (ii) the Fund is notified by the Internal Revenue
Service that the shareholder furnished an incorrect TIN; or (iii) the Fund is
notified by the Internal Revenue Service that withholding is required because
the shareholder failed to report the receipt of dividends or interest from other
sources. Withholding may also be required with respect to accounts where the
shareholder fails to certify that (i) the TIN provided is correct and (ii) the
shareholder is not subject to such withholding. However, withholding will not be
required in the case of certain exempt entities nor in the case of those
shareholders who comply with the procedures as set forth by the Internal Revenue
Service. If incorrect information is provided by the shareholder and the
Internal Revenue Service consequently assesses the Fund a penalty, this penalty
will be passed on to the shareholder.
Dividends paid from net investment income and net realized short-term
capital gains to a shareholder who is a non-resident alien individual, a foreign
trust or estate, a foreign corporation or a foreign partnership (a "foreign
shareholder") will be subject to United States withholding tax at a rate of 30%
unless a reduced rate of withholding or a withholding exemption is provided
under applicable treaty law. Foreign shareholders are urged to consult their own
tax advisors concerning the applicability of the United States withholding tax
and any foreign taxes.
The information included in the Prospectus with respect to Dividends,
Distributions and Taxes, in conjunction with the foregoing, is a general and
abbreviated summary of applicable provisions of the Internal Revenue Code and
Treasury regulations now in effect as currently interpreted by the courts and
the Internal Revenue Service. The Code and these Regulations, as well as the
current interpretations thereof, may be changed at any time by legislative,
judicial, or administrative action.
Shareholders ordinarily will also be subject to state income taxes on the
dividends and distributions they receive from the Fund. Shareholders are urged
to consult counsel or other competent tax advisers regarding specific questions
as to Federal, state or local taxes.
20
<PAGE>
DIRECTORS AND OFFICERS
The following table sets forth information concerning the directors and
executive officers of the Fund, including their principal occupations during the
past five years. Unless otherwise noted, the address of each director and
executive officer is 56 Prospect Street, Hartford, Connecticut 06115-0480. The
directors and executive officers are listed below.
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
- ---------------------------- ---------------- -----------------------
<S> <C> <C>
C. Duane Blinn (69) Director Partner in the law firm of Day, Berry & Howard. Director/Trustee,
Day, Berry & Howard Phoenix Funds (1980-present). Trustee, Phoenix Duff & Phelps
CityPlace Institutional Mutual Funds and Phoenix-Aberdeen Series Fund
Hartford, CT 06103 (1996-present). Director/Trustee, the National Affiliated Companies
(until 1993).
Robert Chesek (62) Director Trustee/Director, Phoenix Funds (1981-present) and Chairman
49 Old Post Road (1989-1994). Trustee, Phoenix Duff & Phelps Institutional
Wethersfield, CT 06109 Mutual Funds and Phoenix-Aberdeen Series Fund (1996-present).
Director/Trustee, the National Affiliated Investment Companies (until
1993). Vice President, Common Stock, Phoenix Home Life Mutual
Insurance Company (1980-1994).
E. Virgil Conway (67) Director Chairman, Metropolitan Transportation Authority (1992-present).
9 Rittenhouse Road Trustee/Director, Consolidated Edison Company of New York, Inc.
Bronxville, NY 10708 (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), and The Harlem Youth Development Foundation
(1987-present). Advisory Director, Fund Directors (1993-present).
Chairman, Audit Committee of the City of New York (1981-1996).
Trustee, Phoenix Duff & Phelps Institutional Mutual Funds and
Phoenix-Aberdeen Series Fund (1996-present). Director, Duff &
Phelps Utilities Tax-Free Income Inc. and Duff & Phelps Utility and
Corporate Bond Trust Inc. (1995-present). Director/Trustee, the
National Affiliated Investment Companies (until 1993).
Director/Trustee, Phoenix Funds (1993-present). Director, Accuhealth
(1994-present), Trism, Inc. (1994-present). Realty Foundation of New
York (1972-present). Chairman, New York Housing Partnership
Development Corp. (1981-present) and Blackrock Fannie Mae
Mortgage Securities Fund (1989-1996). Advisory Director, Fund Directions
(1993-present). Chairman, Financial Accounting Standards Advisory
Council (1992-1995).
Harry Dalzell-Payne (67) Director Director/Trustee, Phoenix Funds (1983-present). Trustee, Phoenix-
330 East 39th Street Aberdeen Series Fund and Phoenix Duff & Phelps Institutional Mutual
Apartment 29G Funds (1996-present). Director, Duff & Phelps Utilities Tax-Free
New York, NY 10016 Income Inc. (1995-present) and Duff & Phelps Utility and Corporate
Bond Trust Inc. (1995-present). Director, Farragut Mortgage Co., Inc.
(1991-1994). Director/Trustee, the National Affiliated Investment
Companies (1983-1993). Formerly a Major General of the British Army.
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
- ---------------------------- ---------------- -----------------------
<S> <C> <C>
*Francis E. Jeffries (66) Director Director and Chairman of the Board, Phoenix Duff & Phelps
6585 Nicholas Blvd. Corporation (1995-present). Director/Trustee, Phoenix Funds (1995-
Apt. 1601 present). Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff &
Naples, FL 33963 Phelps Institutional Mutual Funds (1996-present). Director, Duff &
Phelps Utilities Income Fund (1987-present), Duff & Phelps Utilities
Tax-Free Income Inc. (1991-present), Duff & Phelps Utility and Corporate
Bond Trust Inc. (1993-present) and The Empire District Electric Company
(1984-present). Director (1989-1995), Chairman of the Board (1993-1995),
President (1989-1993), and Chief Executive Officer (1989-1995), Duff &
Phelps Corporation.
Leroy Keith, Jr. (58) Director Chairman and Chief Executive Officer, Carson Products Company
64 Ross Road (1995-present). Director/Trustee, Phoenix Funds (1980-present),
Savannah, GA 31405 Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Director, Equifax Corp.
(1991-present) and Keystone International Fund, Inc. (1989-present).
Trustee, Keystone Liquid Trust, Keystone Tax Exempt Trust, Keystone
Tax Free Fund, Master Reserves Tax Free Trust, and Master Reserves
Trust. Director/Trustee, the National Affiliated Investment Companies
(until 1993). Director, Blue Cross/Blue Shield (1989-1993) and First
Union Bank of Georgia (1989-1993). President, Morehouse College
(1987-1994). Chairman and Chief Executive Officer, Keith Ventures
(1992-1994).
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
- ---------------------------- ---------------- -----------------------
<S> <C> <C>
*Philip R. McLoughlin (50) Director and Director, Vice Chairman and Chief Executive Officer, Phoenix Duff &
President Phelps Corporation (1995-present). 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, 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, 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), and
Director, Phoenix Charter Oak Trust Company (1996-present).
Director/Trustee, the National Affiliated Investment Companies (until
1993). Director (1994-present), Chairman (1996-present) and Chief
Executive Officer (1995-1996), National Securities & Research
Corporation, and Director and President, Phoenix Securities Group,
Inc. (1993-1995). Director (1992-present) and President (1992-1994),
W.S. Griffith & Co., Inc. and Director (1992-1995) and President
(1992-1994), Townsend Financial Advisers, Inc. Director and Vice
President, PM Holdings, Inc. (1985-present).
Everett L. Morris (68) Director Vice President, W.H. Reaves and Company (1993-present).
164 Laird Road Director/Trustee, Phoenix Funds (1995-present). Trustee, Duff &
Colts Neck, NJ 07722 Phelps Mutual Funds (1994-present). Trustee, Phoenix-Aberdeen
Series Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free Income Inc.,
(1991-present), Duff & Phelps Utility and Corporate Bond Trust, Inc.
(1993-present). Director, Public Service Enterprise Group, Inc.
(1986-1993). President and Chief Operating Officer, Enterprise
Diversified Holdings, Inc. (1989-1993). Senior Executive Vice
President and Chief Financial Officer, Public Service Electric and Gas
Company (1986-1992).
</TABLE>
23
<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 (50) Director Managing Director, The Wydown Group (1994-present). Chairman,
60 State Street IBEX Capital Markets LLC (1997-present). Director, Phoenix Duff &
Suite 950 Phelps Corporation (1995-present). Director/Trustee, Phoenix Funds.
Boston, MA 02109 Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Director, Govett Worldwide
Opportunity Funds, Inc. (1991-present), Blue Cross & Blue Shield of
New Hampshire (1994-present), Stifel Financial (1996-present),
Investors Bank and Trust Corporation (1995-present), Investors
Financial Services Corporation (1995-present) and Plymouth Rubber
Co. (1995-present). Member, Chief Executives Organization (1996-
present). Director/Trustee, the National Affiliated Investment
Companies (until 1993). Director (1984-1994), President (1984-1994)
and Chief Executive Officer (1986-1994), Neworld Bank.
*Calvin J. Pedersen (55) Director Director and President, Phoenix Duff & Phelps Corporation (1995-
55 East Monroe Street present). Director/Trustee, Phoenix Funds (1984-present). Trustee,
Suite 3600 Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Chicago, IL 60603 Institutional Mutual Funds (1996-present). President and Chief
Executive Officer, Duff & Phelps Utilities Tax-Free Income Inc. (1995-
present), Duff & Phelps Utilities Income Fund (since inception), and
Duff & Phelps Utility and Corporate Bond Trust Inc. (1995-present).
Director (1986-1995), President (1993-1995) and Executive Vice
President (1992-1993), Duff & Phelps Corporation.
Philip R. Reynolds 69) Director Director/Trustee, Phoenix Funds (1984-present). Trustee, Phoenix
43 Montclair Drive Aberdeen Series Fund and Phoenix Duff & Phelps Institutional Mutual
West Hartford, CT 06107 Funds (1996-present). Director, Vestaur Securities, Inc. (1972-
present). Trustee, and Treasurer, J. Walton Bissell Foundation Inc.
(1988-present). Director/Trustee, the National Affiliated Investment
Companies (until 1993).
Herbert Roth, Jr. (68) Director Director/Trustee, Phoenix Funds (1980-present). Trustee, Phoenix-
134 Lake Street Aberdeen Series Fund and Phoenix Duff & Phelps Institutional Mutual
P.O. Box 909 Funds (1996-present). Director, Phoenix Home Life Mutual Insurance
Sherborn, MA 01770 Company (1972-present). Director, Boston Edison Company (1978-
present), Landauer, Inc. (medical services) (1970-present), Tech
Ops./Sevcon, Inc. (electronic controllers) (1987-present), Key Energy
Group (oil rig service) (1988-1994), and Mark IV Industries (diversified
manufacturer) (1985-present). Director/Trustee, the National Affiliated
Investment Companies (until 1993).
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
- ---------------------------- ---------------- -----------------------
<S> <C> <C>
Richard E. Segerson (51) Director Director/Trustee, Phoenix Funds, (1993-present). Trustee, Phoenix-
102 Valley Road Aberdeen Series Fund and Phoenix Duff & Phelps Institutional Mutual
New Canaan, CT 06840 Funds (1996-present). Managing Director, Mullin Associates (1993-
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. (65) Director Trustee/Director, the Phoenix Funds (1995-present). Trustee, Phoenix-
731 Lake Avenue Aberdeen Series Fund and Phoenix Duff & Phelps Institutional Mutual
Greenwich, CT 06830 Funds (1996-present). Visiting Professor, University of Virginia,
(1997-present). Director, UST Inc. (1995-present), HPSC Inc. (1995-
present), Compuware (1997-present) and Duty Free International
(1997-present). Chairman, Dresing, Lierman, Weicker (1995-1996).
Former Governor of the State of Connecticut (1991-1995).
Michael E. Haylon (39) Executive Vice Director and Executive Vice President-Investments, Phoenix Duff
President & Phelps Corporation (1995-present). Senior Vice President,
Securities Investments, Phoenix Home Life Mutual Insurance Company (1993-
1995). Executive Vice President, the Phoenix Funds (1995-present),
Phoenix-Aberdeen Series Fund (1996-present), and Vice President,
Phoenix Duff & Phelps Institutional Mutual Funds (1996-present).
Director (1994-present), President (1995-present), and Executive Vice
President (1994-1995), Phoenix Investment Counsel, Inc. Director (1994-
present), President (1996-present) and Executive Vice President (1994-
1996), National Securities & Research Corporation. Director, Phoenix
Equity Planning Corporation (1995-present). Various other positions with
Phoenix Home Life Mutual Insurance Company (1990-1993).
David R. Pepin (54) Executive Vice Executive Vice President, Phoenix Funds, Phoenix-Aberdeen Series
President Fund and Phoenix Duff & Phelps Institutional Mutual Funds (1996-
present). Director, Phoenix Investment Counsel, Inc., National
Securities & Research Corporation and Phoenix Equity Planning
Corporation (1996-present). Executive Vice President, Mutual Fund
Sales and Operations, Phoenix Equity Planning Corporation (1996-
present). Managing Director, Phoenix-Aberdeen International
Advisors, LLC (1996-present). Executive Vice President (1996-
present) and Director (1997-present), Phoenix Duff & Phelps
Corporation. Vice President, Phoenix Home Life Mutual Insurance
Company (1994-1995). Vice President and General Manager, Digital
Equipment Corporation (1980-1994).
</TABLE>
- ------------------
*Indicates that the Director is an "interested person" of the Fund within the
meaning of the definition set forth in Section 2(a) of the Investment Company
Act of 1940.
25
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
- ---------------------------- ---------------- -----------------------
<S> <C> <C>
William J. Newman (58) Senior Vice Executive Vice (1995-present) and Chief Investment
President Strategist (1996-present), Phoenix Investment Counsel, Inc. Senior Vice
President (1995-1996), Executive Vice President and Chief Investment
Strategist (1996-present), National Securities & Research Corporation.
Senior Vice President, Phoenix Equity Planning Corporation (1995-
1996). Vice President, Common Stock and Chief Investment Strategist,
Phoenix Home Life Insurance Company (April, 1995-November, 1995).
Senior Vice President, Phoenix Strategic Equity Series Fund (1996-
present), The Phoenix Edge Series Fund (1996-present), Phoenix Multi-
Portfolio Fund (1995-present), Phoenix Income and Growth Fund (1996-
present), Phoenix Series Fund (1995-present), Phoenix Strategic
Allocation Fund, Inc. (1996-present), Phoenix Worldwide Opportunities
Fund (1996-present), Phoenix Duff & Phelps Institutional Funds (1996-
present), and Phoenix-Aberdeen Series Fund (1996-present). Chief
Investment Strategist, Kidder, Peabody Co., Inc. (1993-1994).
Managing Director, Equities, Bankers Trust Company (1991-1993).
Mary C. Canning (40) Vice President Managing Director & Investment Strategist, Equities, Phoenix
Investment Counsel, Inc. and National Securities & Research
Corporation (1996-present). Vice President, The Phoenix Edge Series
Fund (1987-present) and Phoenix Strategic Allocation Fund, Inc.
(1996-present). Vice President, Phoenix Investment Counsel, Inc.
(1991-1996). Associate Portfolio Manager, Common Stock, Phoenix
Home Life Mutual Insurance Company (1991-1995). Various
other positions with Phoenix Home Life Mutual Insurance Company (1989-
1991).
William E. Keen III (33) Vice Assistant Vice President, Phoenix Equity Planning Corporation (1996-
100 Bright Meadow Blvd. President present). Vice President, Phoenix Funds, Phoenix-Aberdeen Series
P.O. Box 2200 Fund, and Phoenix Duff & Phelps Institutional Mutual Funds (1996-
Enfield, CT 06083-2200 present). Assistant Vice President, US Affinity Funds, US Affinity
Investments LP, (1994-1995). Manager, Fund Administration, SEI
Corporation (1991-1994).
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
- ---------------------------- ---------------- -----------------------
<S> <C> <C>
William R. Moyer (52) Vice Senior Vice President and Chief Financial Officer, Phoenix Duff &
100 Bright Meadow Blvd. President Phelps Corporation (1995-present). Vice President, Investment
P.O. Box 2200 Products Finance, Phoenix Home Life Mutual Insurance Company
Enfield, CT 06083-2200 (1990-1995). Senior Vice President (1990-present), Chief Financial
Officer (1996-present), Finance (until 1996) and Treasurer (1994-1996),
Phoenix Equity Planning Corporation. Senior Vice President (1990-
present), Chief Financial Officer (1996-present), Finance (until 1996),
and Treasurer (1994-present), Phoenix Investment Counsel, Inc.
Senior Vice President (1994-present), Chief Financial Officer (1996-present),
Finance (until 1996), and Treasurer (1994-present), National Securities
& Research Corporation. Vice President, Phoenix Funds (1990-present)
and Phoenix-Aberdeen Series Fund (1996-present). Vice President, the
National Affiliated Companies (until 1993). Senior Vice President,
Finance, Phoenix Securities Group, Inc. (1993-1995). Senior Vice
President and Chief Financial Officer (1993-1995) and Treasurer (1994-
1995) W.S. Griffith & Co., Inc. and Townsend Financial Advisers, Inc.
Senior Vice President and Chief Financial Officer, Duff & Phelps
Investment Management Co. (1996-present).
Leonard J. Saltiel (43) Vice Managing Director, Operations and Service (1996-present), Senior
100 Bright Meadow Blvd. President Vice President, (1994-1996), Phoenix Equity Planning Corporation.
P.O. Box 2200 Vice President, Phoenix Funds, (1994-present), Phoenix Duff & Phelps
Enfield, CT 06083-2200 Institutional Mutual Funds and Phoenix-Aberdeen Series Fund (1996-
present), and National Securities & Research Corporation (1994-1996).
Vice President, Investment Operations, Phoenix Home Life Mutual
Insurance Company (1994-1995). Various positions with Phoenix Home
Life Insurance Company (1987-1994).
Nancy G. Curtiss (44) Treasurer Treasurer (1996-present), Vice President, Fund Accounting (1994-
1996), Phoenix Equity Planning Corporation. Treasurer, Phoenix Funds
(1994-present), Phoenix-Aberdeen Series Fund (1996-present), and
Phoenix Duff & Phelps Institutional Mutual Funds (1996-present).
Second Vice President and Treasurer, Fund Accounting, Phoenix
Home Life Mutual Insurance Company (1994-1995). Various positions
with Phoenix Home Life Mutual Insurance Company (1987-1994).
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
- ---------------------------- ---------------- -----------------------
<S> <C> <C>
G. Jeffrey Bohne (49) Secretary Vice President, Mutual Fund Customer Service, Phoenix Equity
101 Munson Street and Clerk Planning Corporation (1996-present). Vice President, Transfer Agent
Greenfield, MA 01301 Operations, Phoenix Equity Planning Corporation (1993-1996). Clerk,
Phoenix Investment Counsel, Inc. (1995-present). Secretary, the
Phoenix Funds (1993-present), and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Clerk and Secretary,
Phoenix-Aberdeen Series Fund (1996-present). Vice President and
General Manager, Phoenix Home Life Mutual Insurance Company
(1993-present). Assistant Vice President, Phoenix Home Life Mutual
Insurance Company (1992-1993).
</TABLE>
For services rendered to the Fund during the fiscal year ended December 31,
1996, the Directors received an aggregate of $18,615 from the Fund as Directors'
fees. For services on the Board of Directors of the Phoenix Funds, each Director
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 Director who serves on the Audit Committee receives
a retainer at the annual rate of $2,000 and a fee of $2,000 per joint Audit
Committee meeting attended. Each Director 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 Director who serves on the Executive Committee
and who is not an interested person of the Fund receives a retainer at the
annual rate of $1,000 and $1,000 per 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 Directors. Director
fee costs are allocated equally to each of the Series and Funds within the
Phoenix Funds complex. The foregoing fees do not include reimbursement of
expenses incurred in connection with meeting attendance. Officers and employees
of the Adviser who are interested persons are compensated by the Adviser and
receive no compensation from the Fund. Any other interested persons who are not
compensated by the Adviser receive fees from the Fund.
28
<PAGE>
For the Fund's last fiscal year ending December 31, 1996, the Directors
received the following compensation:
<TABLE>
<CAPTION>
PENSION OR TOTAL
RETIREMENT ESTIMATED COMPENSATION
BENEFITS ANNUAL FROM FUND AND
AGGREGATE ACCRUED AS PART BENEFITS FUND COMPLEX
COMPENSATION OF FUND UPON 11 FUNDS PAID TO
NAME FROM FUND EXPENSES RETIREMENT DIRECTORS
---- --------- ---------- ---------- ----------------
<S> <C> <C> <C> <C>
C. Duane Blinn $1,800* $60,500
Robert Chesek $1,568 $53,500
E. Virgil Conway+ $1,833 $61,750
Harry Dalzell-Payne+ $1,568 $53,750
Francis E. Jeffries $ 0 $ 0
Leroy Keith, Jr $1,568 None None $53,500
Philip R. McLoughlin+ $ 0 for any for any $ 0
Everett L. Morris+ $1,475 Director Director $50,750
James M. Oates+ $1,725 $58,000
Calvin J. Pedersen $ 0 $ 0
Philip R. Reynolds $1,568 $53,500
Herbert Roth, Jr+ $1,925* $64,750
Richard E. Segerson $1,785 $60,250
Lowell P. Weicker, Jr $1,800 $60,500
</TABLE>
- ------------
*This compensation (and the earnings thereon) was deferred pursuant to the
Directors Deferred Compensation Plan.
+Messrs. Conway, Dalzell-Payne, McLoughlin, Morris, Oates and Roth are members
of the Executive Committee.
On December 31, 1996, the Directors and officers of the Fund beneficially
owned less than 1% of the outstanding shares of the Fund.
ADDITIONAL INFORMATION
The Fund's Prospectus and this Statement of Additional Information omit
certain information contained in the registration statement filed with the
Securities and Exchange Commission which may be obtained from the Commission's
principal office at 450 Fifth Street, N.W., Washington, DC 20549, upon payment
of the fee prescribed by the Commission's rules and regulations.
FINANCIAL STATEMENTS
Financial information relating to the Fund is contained in the Annual Report
to Shareholders for the year ended December 31, and is available by calling
Equity Planning at (800) 243-4361, or by writing to Equity Planning at 100
Bright Meadow Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200. The Annual
Report is incorporated into this Statement of Additional Information by
reference. A copy of the Annual Report must precede or accompany this Statement
of Additional Information.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP with principal offices at 160 Federal Street, Boston,
MA 02110, has been selected independent accountants for the Fund. Price
Waterhouse LLP audits the Fund's annual financial statements and expresses an
opinion thereon.
29
<PAGE>
APPENDIX
A-1 AND P-1 COMMERCIAL PAPER RATINGS
The Money Market Series will only invest in commercial paper which at the
date of investment is rated A-1 by Standard & Poor's Corporation or P-1 by
Moody's Investors Services, Inc., or, if not rated, is issued or guaranteed by
companies which at the date of investment have an outstanding debt issue rated
AA or higher by Standard & Poor's or Aa or higher by Moody's.
Commercial paper rated A-1 by Standard & Poor's Corporation ("S&P") has the
following characteristics: Liquidity ratios are adequate to meet cash
requirements. Long-term senior debt is rated "A" or better. The issuer has
access to at least two additional channels of borrowing. Basic earnings and cash
flow have an upward trend with allowance made for unusual circumstances.
Typically, the issuer's industry is well established and the issuer has a strong
position within the industry. The reliability and quality of management are
unquestioned.
The rating P-1 is the highest commercial paper rating assigned by Moody's
Investors Services, Inc. ("Moody's"). Among the factors considered by Moody's in
assigning ratings are the following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationship which exists with the issuer; and (8) recognition
by the management of obligations which may be present or may arise as a result
of public interest questions and preparations to meet such obligations.
MOODY'S INVESTORS SERVICE, INC. CORPORATE BOND RATINGS
AAA--Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
AA--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa Group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment some time in the future.
BAA--Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
BA--Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
30
<PAGE>
B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA--Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
CA--Bonds which are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C--Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS
AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA--Bonds rated AA also qualify as high-quality debt obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
A--Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
BB-B-CCC-CC--Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
D--Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.
31
<PAGE>
- --------------------------------------------------------------------------------
Phoenix Strategic Allocation Fund, Inc.
- --------------------------------------------------------------------------------
INVESTMENTS AT DECEMBER 31, 1996
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- --------------
U.S. GOVERNMENT SECURITIES--2.9%
U.S. Treasury Bonds--0.3%
U.S. Treasury Bonds 6%, '26 AAA $1,060 $ 964,268
--------------
U.S. Treasury Notes--2.6%
U.S. Treasury Notes 5.75%, '98 AAA 7,200 7,181,208
U.S. Treasury Notes 6.50%, '06 AAA 1,000 1,005,625
--------------
8,186,833
--------------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $9,103,318) 9,151,101
--------------
SHARES
-------
COMMON STOCKS--72.9%
Advertising--0.7%
Omnicom Group, Inc. 50,000 2,287,500
--------------
Aerospace & Defense--2.1%
Boeing Co. 62,300 6,627,162
--------------
Banks--4.1%
Ahmanson (H.F.) & Co. 80,700 2,622,750
Golden West Financial Corp. 44,000 2,777,500
Great Western Financial Corp. 141,100 4,091,900
Wells Fargo & Co. 13,300 3,587,675
--------------
13,079,825
--------------
Beverages--1.0%
Seagram Ltd. 83,100 3,220,125
--------------
Chemical--2.4%
Du Pont (E.I.) de Nemours & Co. 41,100 3,878,812
Monsanto Co. 95,900 3,728,113
--------------
7,606,925
--------------
Computer Software & Services--8.5%
Computer Associates International, Inc. 82,800 4,119,300
Fiserv, Inc. (b) 106,700 3,921,225
HBO & Co. 24,700 1,466,562
Microsoft Corp. (b) 76,200 6,296,025
Oracle Corp. (b) 87,100 3,636,425
Parametric Technology Corp. (b) 85,900 4,413,113
Sungard Data Systems, Inc. (b) 83,000 3,278,500
--------------
27,131,150
--------------
Conglomerates--2.3%
AlliedSignal, Inc. 71,700 4,803,900
Tyco International Ltd. 48,500 2,564,438
--------------
7,368,338
--------------
Containers--1.1%
Crown Cork & Seal, Inc. 66,900 3,637,688
--------------
Cosmetics & Soaps--2.2%
Colgate Palmolive Co. 44,600 4,114,350
Procter & Gamble Co. 25,300 2,719,750
--------------
6,834,100
--------------
Diversified Financial Services--1.1%
Federal National Mortgage Assoc. 92,100 3,430,725
--------------
Diversified Miscellaneous--1.0%
CUC International, Inc. (b) 134,700 3,199,125
--------------
Electrical Equipment--2.0%
General Electric Co. 26,700 2,639,963
Honeywell, Inc. 58,000 3,813,500
--------------
6,453,463
--------------
Electronics--1.3%
Intel Corp. 31,000 4,059,063
--------------
Healthcare--Diversified--3.1%
American Home Products Corp. 107,100 6,278,737
Warner-Lambert Co. 47,200 3,540,000
--------------
9,818,737
--------------
Healthcare--Drugs--3.4%
Biochem Pharmaceutical, Inc. (b) 67,700 3,401,925
Lilly (Eli) & Co. 43,300 3,160,900
Pfizer, Inc. 53,100 4,400,663
--------------
10,963,488
--------------
Lodging & Restaurants--1.7%
Marriott International, Inc. 96,000 5,304,000
--------------
Machinery--1.7%
Caterpillar, Inc. 32,500 2,445,625
Deere & Co. 76,300 3,099,688
--------------
5,545,313
--------------
Medical Products & Supplies--3.3%
Boston Scientific Corp. (b) 89,600 5,376,000
Medtronic, Inc. 76,400 5,195,200
--------------
10,571,200
--------------
Metal & Mining--1.1%
Aluminum Company of America 56,600 3,608,250
--------------
Natural Gas--6.3%
Anadarko Petroleum Corp. 49,800 3,224,550
Apache Corp. 100,000 3,537,500
Coastal Corp. 16,600 811,325
Columbia Gas System, Inc. 11,800 750,775
KN Energy, Inc. 20,000 785,000
PanEnergy Corp. 47,700 2,146,500
Questar Corp. 20,000 735,000
Sonat, Inc. 74,000 3,811,000
Tejas Gas Corp. (b) 19,000 904,875
Williams Companies, Inc. 94,200 3,532,500
--------------
20,239,025
--------------
Office & Business Equipment--1.2%
Hewlett Packard Co. 76,000 3,819,000
--------------
Oil--0.5%
Triton Energy Ltd. (b) 34,400 1,668,400
--------------
See Notes to Financial Statements
3
<PAGE>
- --------------------------------------------------------------------------------
Phoenix Strategic Allocation Fund, Inc.
- --------------------------------------------------------------------------------
SHARES VALUE
------- ------------
Oil Service & Equipment--7.0%
BJ Services Co. (b) 80,400 $ 4,100,400
Baker Hughes, Inc. 132,100 4,557,450
Halliburton Co. 86,900 5,235,725
Noble Drilling Corp. (b) 216,600 4,304,925
Varco International, Inc. (b) 110,000 2,543,750
Weatherford Enterra, Inc. (b) 53,100 1,593,000
-------------
22,335,250
-------------
Retail--3.8%
Home Depot, Inc. 95,000 4,761,875
Tiffany & Co. 96,000 3,516,000
TJX Companies, Inc. 78,900 3,737,887
-------------
12,015,762
-------------
Telecommunications Equipment--6.6%
Andrew Corp. (b) 26,800 1,422,075
Ascend Communications, Inc. (b) 48,400 3,006,850
Cisco Systems, Inc. (b) 157,600 10,027,300
Lucent Technologies, Inc. 98,800 4,569,500
Tellabs, Inc. (b) 58,500 2,201,062
-------------
21,226,787
-------------
Textile & Apparel--3.4%
Liz Claiborne, Inc. 75,300 2,908,462
Nautica Enterprises, Inc. (b) 60,300 1,522,575
Nike, Inc. Class B 61,600 3,680,600
Tommy Hilfiger Corp. (b) 55,300 2,654,400
-------------
10,766,037
-------------
TOTAL COMMON STOCKS
(Identified cost $218,089,223) 232,816,438
-------------
FOREIGN COMMON STOCKS--2.1%
Chemical--1.2%
Potash Corp. of Saskatchewan, Inc. (Canada) 44,200 3,757,000
-------------
Textile & Apparel--0.9%
Gucci Group NV-NY (Italy) 45,800 2,925,475
-------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $6,674,591) 6,682,475
-------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- --------------
MUNICIPAL BONDS--3.3%
California--1.7%
Kern County Pension Obligation
Taxable 7.26%, '14 AAA $1,700 1,675,622
Long Beach Pension Obligation
Taxable 6.87%, '06 AAA 950 952,156
San Bernardino County Obligation
Revenue Taxable 6.87%, '08 AAA 455 451,679
San Bernardino County Obligation
Revenue Taxable 6.94%, '09 AAA 1,240 1,235,772
Ventura County Pension Taxable
6.54%, '05 AAA 1,100 1,083,379
--------------
5,398,608
--------------
Florida--1.6%
Dade County Ed. Facs. Authority
5.75%, '20 AAA 300 303,684
Miami Beach Special Obligation
Taxable 8.60%, '21 AAA 3,600 3,940,092
University Miami Exchange Revenue A
Taxable 7.65%, '20 AAA 1,065 1,074,936
--------------
5,318,712
--------------
TOTAL MUNICIPAL BONDS
(Identified cost $10,770,310) 10,717,320
--------------
NON-CONVERTIBLE BONDS--6.6%
Asset-Backed Securities--0.9%
Airplanes Pass Through Trust 1D
10.875%, '19 BB 560 617,719
Fleetwood Credit Corp. 96-B, A
6.90%, '12 AAA 948 957,182
Green Tree Financial Corp. 96-2, M1
7.60%, '27 AA- 1,150 1,154,672
--------------
2,729,573
--------------
Non-Agency Mortgage-Backed Securities--5.6%
CS First Boston Mortgage 95-AE1, B
7.182%, '27 AA- 1,775 1,767,512
GE Capital Mortgage Service
96-8, M 7.25%, '26 AA 249 242,177
Lehman Commercial Conduit
95-C2, B 7.184%, '05 AA 1,850 1,858,672
Merrill Lynch Mortgage, Inc. 95-C2,
B 7.61%, '21 Aa(c) 893 904,589
Merrill Lynch Mortgage, Inc. 96-C1,
B 7.42%, '28 AA 420 424,528
Nationslink Funding Corp. 96-1, B
7.69%, '05 AA 325 337,187
Residential Asset Securitization
Trust 96-A8, A1 8%, '26 AAA 979 993,565
Residential Funding Mortgage 96-S1,
A11 7.10%, '26 AAA 1,500 1,459,453
Residential Funding Mortgage 96-S4,
M1 7.25%, '26 AA 496 482,202
Resolution Trust Corp. 93-C1, B
8.75%, '24 Aa(c) 1,750 1,789,922
See Notes to Financial Statements
4
<PAGE>
- --------------------------------------------------------------------------------
Phoenix Strategic Allocation Fund, Inc.
- --------------------------------------------------------------------------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- --------------
Non-Agency Mortgage-Backed Securities--continued
Resolution Trust Corp. 95-C2, B
6.80%, '27 Aa(c) $ 993 $ 981,670
Resolution Trust Corp. 95-C1, B
6.90%, '27 Aa(c) 2,125 2,105,742
Resolution Trust Corp. 95-2, M1
7.15%, '29 Aa(c) 1,538 1,540,998
Structured Asset Securities
Corp. 95-C1, C 7.375%, '24 A 755 754,882
Structured Asset Securities Corp.
95-C4, B 7%, '26 AA 1,850 1,824,562
Structured Asset Securities
Corp. 96-CFL, C 6.525%, '28 A 405 395,888
--------------
17,863,549
--------------
Paper & Forest Products--0.1%
Buckeye Cellulose Corp. 9.25%, '08 BB- 350 364,875
--------------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $20,917,493) 20,957,997
--------------
FOREIGN GOVERNMENT SECURITIES--2.8%
Argentina--0.4%
Republic of Argentina Discount L-GL
Euro 6.375%, '23 (e) BB- 1,800 1,389,375
--------------
Brazil--0.3%
Republic of Brazil Discount ZL Euro
6.50%, '24 (e) B+ 500 385,938
Republic of Brazil Par Z-L Euro
4.25%, '24 (e) B (c) 1,000 630,000
--------------
1,015,938
--------------
Colombia--1.2%
Republic of Colombia Yankee 7.25%,
'04 BBB- 3,900 3,802,500
--------------
Mexico--0.5%
United Mexican States 144A 7.563%,
'01 (d) (e) Baa(c) 375 375,881
United Mexican States Euro D 6.352%,
'19 (e) (f) BB 1,250 1,078,125
--------------
1,454,006
--------------
Panama--0.4%
Panama IRB 144A 3.50%, '14 (d) (e) NR 700 486,937
Panama PDI 144A, PIK interest
capitalization, 6.75%, '16 (d) (e) NR 925 733,046
--------------
1,219,983
--------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $7,911,854) 8,881,802
--------------
FOREIGN NON-CONVERTIBLE BONDS--1.3%
Chile--0.1%
Petropower Funding 144A 7.36%, '14
(d) BBB 500 477,150
--------------
Colombia--1.2%
Financiera Energ. Nacional EMTN Euro
9%, '99 BBB- 3,600 3,775,500
--------------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $4,186,400) 4,252,650
--------------
TOTAL LONG-TERM INVESTMENTS--91.9%
(Identified cost $277,653,189) 293,459,783
--------------
SHORT-TERM OBLIGATIONS--8.2%
Commercial Paper--5.6%
Abbott Laboratories 5.42%, 1-7-97 A-1+ 4,390 4,386,034
Abbott Laboratories 5.26%, 1-14-97 A-1+ 1,495 1,491,908
Bellsouth Capital Funding Corp.
5.40%, 1-14-97 A-1+ 1,705 1,701,675
Kellog Co. 5.35%, 2-5-97 A-1+ 2,180 2,168,661
General Re Corp. 5.30%, 2-14-97 A-1+ 2,500 2,482,479
First Deposit Funding Trust 5.33%,
3-14-97 A-1 3,617 3,575,406
Receivables Capital Corp. 5.39%,
5-1-97 A-1+ 2,000 1,963,560
--------------
17,769,723
--------------
Federal Agency Securities--2.6%
Federal National Mortgage
Assoc. 5.24%, 2-27-97 5,000 4,955,787
Federal Farm Credit Bank
5.24%, 3-14-97 3,480 3,442,451
--------------
8,398,238
--------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $26,176,892) 26,167,961
--------------
TOTAL INVESTMENTS--100.1%
(Identified cost $303,830,081) 319,627,744(a)
Cash and receivables, less liabilities--(0.1%) (355,981)
--------------
NET ASSETS--100.0% $319,271,763
==============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $21,816,083 and gross
depreciation of $6,018,420 for income tax purposes. At December 31, 1996,
the aggregate cost of securities for federal income tax purposes was
$303,830,081.
(b) Non-income producing.
(c) As rated by Moody's, Fitch, or Duff & Phelps.
(d) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
1996, these securities amounted to a value of $2,073,014 or 0.65% of net
assets.
(e) Variable or step coupon bond; interest rate shown reflects the rate
currently in effect.
(f) Rights incorporated as a unit.
See Notes to Financial Statements
5
<PAGE>
- --------------------------------------------------------------------------------
Phoenix Strategic Allocation Fund, Inc.
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
Assets
Investment securities at value
(Identified cost $303,830,081) $319,627,744
Short-term investments held as collateral for loaned
securities 1,042,575
Receivables
Investment securities sold 558
Fund shares sold 104,166
Dividends and interest 752,622
--------------
Total assets 321,527,665
--------------
Liabilities
Payables
Custodian 28,753
Collateral on securities loaned 1,042,575
Fund shares repurchased 712,076
Investment advisory fee 178,649
Transfer agent fee 82,423
Distribution fee 74,849
Financial agent fee 8,245
Directors' fee 7,985
Accrued expenses 120,347
--------------
Total liabilities 2,255,902
--------------
Net Assets $319,271,763
==============
Net Assets Consist of:
Capital paid in on shares of common stock $299,123,712
Undistributed net investment income 448,303
Accumulated net realized gain 3,902,085
Net unrealized appreciation 15,797,663
--------------
Net Assets $319,271,763
==============
Class A
Shares of common stock, $1 par value,
50,000,000 shares authorized
(Net Assets $309,677,605) 19,953,080
Net asset value per share $15.52
Offering price per share
$15.52/(1-4.75%) $16.29
Class B
Shares of common stock, $1 par value,
50,000,000 shares authorized
(Net Assets $9,594,158) 621,695
Net asset value and offering price per share $15.43
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
Investment Income
Dividends $ 2,681,346
Interest 7,565,350
Security lending 47,825
------------
Total investment income 10,294,521
------------
Expenses
Investment advisory fee 2,241,038
Distribution fee--Class A 839,140
Distribution fee--Class B 91,191
Financial agent fee 103,432
Transfer agent 642,283
Printing 108,837
Custodian 57,088
Registration 53,279
Professional 45,578
Directors 18,795
Miscellaneous 23,962
------------
Total expenses 4,224,623
------------
Net investment income 6,069,898
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 32,230,748
Net realized loss on foreign currency transactions (5,744)
Net change in unrealized appreciation (depreciation) on
investments (9,313,255)
------------
Net gain on investments 22,911,749
------------
Net increase in net assets resulting from operations $28,981,647
============
See Notes to Financial Statements
6
<PAGE>
- --------------------------------------------------------------------------------
Phoenix Strategic Allocation Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Year Year
Ended Ended
December 31, 1996 December 31, 1995
----------------- -----------------
<S> <C> <C>
From Operations
Net investment income $ 6,069,898 $ 9,711,631
Net realized gain 32,225,004 30,657,387
Net change in unrealized appreciation (depreciation) (9,313,255) 20,305,509
--------------- ----------------
Increase in net assets resulting from operations 28,981,647 60,674,527
--------------- ----------------
From Distributions to Shareholders
Net investment income--Class A (5,622,283) (11,137,166)
Net investment income--Class B (90,090) (157,249)
Net realized gains--Class A (29,211,894) (21,046,512)
Net realized gains--Class B (899,061) (460,526)
--------------- ----------------
Decrease in net assets from distributions to shareholders (35,823,328) (32,801,453)
--------------- ----------------
From Share Transactions
Class A
Proceeds from sales of shares (918,493 and 2,327,216 shares,
respectively) 14,942,495 36,428,108
Net asset value of shares issued from reinvestment of
distributions (1,918,313 and 1,767,069 shares, respectively) 30,240,866 27,891,041
Cost of shares repurchased (5,512,257 and 4,076,035 shares,
respectively) (90,484,207) (65,751,129)
--------------- ----------------
Total (45,300,846) (1,431,980)
--------------- ----------------
Class B
Proceeds from sales of shares (168,248 and 418,716 shares,
respectively) 2,738,747 6,684,860
Net asset value of shares issued from reinvestment of
distributions (55,850 and 34,447 shares, respectively) 875,001 539,518
Cost of shares repurchased (108,645 and 36,705 shares,
respectively) (1,770,975) (599,012)
--------------- ----------------
Total 1,842,773 6,625,366
--------------- ----------------
Increase (decrease) in net assets from share transactions (43,458,073) 5,193,386
--------------- ----------------
Net increase (decrease) in net assets (50,299,754) 33,066,460
Net Assets
Beginning of period 369,571,517 336,505,057
--------------- ----------------
End of period (including undistributed net investment income
of $448,303 and $0, respectively) $319,271,763 $369,571,517
=============== ================
</TABLE>
See Notes to Financial Statements
7
<PAGE>
- --------------------------------------------------------------------------------
Phoenix Strategic Allocation Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
Class A Class B
---------------------------------------------------------------------------
From
Year Ended Inception
Year Ended December 31, December 31, 10/24/94
to
1996 1995 1994 1993 1992 1996 1995 12/31/94
--------- -------- -------- ------- ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $15.98 $14.82 $15.48 $14.89 $15.22 $15.89 $14.79 $14.98
Income from investment operations
Net investment income 0.31 0.45 0.34 0.06(2) 0.24 0.19 0.30(2) 0.07
Net realized and unrealized
gain (loss) 1.10 2.22 (0.69) 1.49 1.32 1.09 2.22 (0.09)
------- ------- ------- ------- ------ ------ ------ -------
Total from investment
operations 1.41 2.67 (0.35) 1.55 1.56 1.28 2.52 (0.02)
------- ------- ------- ------- ------ ------ ------ -------
Less distributions
Dividends from net investment
income (0.29) (0.52) (0.31) (0.11) (0.25) (0.16) (0.43) (0.17)
Dividends from net realized
gains (1.58) (0.99) (0.001) (0.85) (1.64) (1.58) (0.99) --
------- ------- ------- ------- ------ ------ ------- -------
Total distributions (1.87) (1.51) (0.311) (0.96) (1.89) (1.74) (1.42) (0.17)
------- ------- ------- ------- ------ ------ ------- -------
Change in net asset value (0.46) 1.16 (0.66) 0.59 (0.33) (0.46) 1.10 (0.19)
------- ------- ------- ------- ------ ------ ------- -------
Net asset value, end of period $15.52 $15.98 $14.82 $15.48 $14.89 $15.43 $15.89 $14.79
======= ======= ======= ======= ====== ======= ======= =======
Total return(1) 8.78% 18.23% -2.26% 10.49% 10.32% 7.95% 17.31% -0.12%(4)
Ratios/supplemental data:
Net assets, end of period
(thousands) $309,678 $361,526 $335,177 $370,440 $58,006 $9,594 $8,046 $1,328
Ratio to average net assets of:
Operating expenses 1.21% 1.21% 1.24% 1.29% 1.36% 1.96% 1.97% 2.26%(3)
Net investment income 1.78% 2.67% 2.18% 1.26% 2.06% 1.01% 1.88% 1.74%(3)
Portfolio turnover 275% 184% 225% 246% 322% 275% 184% 225%
Average commission rate paid(5) $0.0529 N/A N/A N/A N/A $0.0529 N/A N/A
</TABLE>
(1) Maximum sales load is not reflected in total return calculation.
(2) Computed using average shares outstanding.
(3) Annualized
(4) Not annualized
(5) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
8
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix Strategic Allocation Fund, Inc., formerly Phoenix Total Return Fund,
Inc., ("the Fund") 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 to achieve the highest total return consistent with
reasonable risk by investing in stocks, bonds and money market instruments.
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 that day, at the last bid price. Debt securities are valued on the basis
of broker quotations or valuations provided by a pricing service which
utilizes information with respect to recent sales, market transactions in
comparable securities, quotations from dealers, and various relationships
between securities in determining value. 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 fair value
as determined in good faith by or under the direction of the Directors.
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. Interest income is recorded on
the accrual basis. The Fund does not amortize premiums but does amortize
discounts using the effective interest method. Realized gains or losses are
determined 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 the
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.
9
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1996 (Continued)
F. Security lending:
The Fund loans securities to qualified brokers through an agreement with
State Street Bank and Trust Company (State Street). Under the terms of the
agreement, the Fund receives collateral with a market value not less than
100% of the market value of loaned securities. Collateral consists of cash,
securities issued or guaranteed by the U.S. Government or its agencies and
the sovereign debt of foreign countries. Interest earned on the collateral
and premiums paid by the borrower are recorded as income by the Fund net of
fees charged by State Street for its services in connection with this
securities lending program. Lending portfolio securities involves a risk of
delay in the recovery of the loaned securities or in the foreclosure on
collateral. At December 31, 1996, the Fund had loaned securities with a
market value of $1,019,538 and received collateral of $1,042,575.
NOTE 2. INVESTMENT ADVISORY FEES AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the Investment Adviser,
Phoenix Investment Counsel, Inc., an indirect majority-owned subsidiary of
Phoenix Home Life Mutual Insurance Company ("PHL"), is entitled to a fee at
an annual rate of 0.65% 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 $29,291 for Class A shares and
deferred sales charges of $21,076 for Class B shares for the year ended
December 31, 1996. 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 Distributor has advised the Fund
that of the total amount expensed for the year ended December 31, 1996,
$206,149 was retained by the Distributor and $724,182 was paid to
unaffiliated participants.
As Financial Agent of the Fund, PEPCO receives a fee at an annual rate of
0.03% of the average daily net assets of the Fund for bookkeeping,
administration and pricing services. PEPCO serves as the Fund's Transfer
Agent with State Street as sub-transfer agent. For the year ended December
31, 1996, transfer agent fees were $642,283 of which PEPCO retained $226,746
which is net of the fees paid to State Street.
At December 31, 1996, PHL and affiliates held 49 Class A shares and 8,276
Class B shares of the Fund with a combined value of $128,460.
NOTE 3. PURCHASES AND SALES OF SECURITIES
During the year ended December 31, 1996, purchases and sales of investments,
excluding short-term securities and U.S. Government and agency securities,
amounted to $693,453,897 and $685,401,380, respectively. Purchases and sales
of long-term U.S. Government and agency securities amounted to $127,409,131
and $162,628,551, respectively.
NOTE 4. RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, 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. During the year ended
December 31, 1996, the Fund increased undistributed net investment income by
$90,778 and decreased accumulated net realized gains by $90,778.
TAX INFORMATION NOTICE (Unaudited)
For the fiscal year ended December 31, 1996, the Fund distributed
$14,378,203 of long-term capital gain dividends.
For federal income tax purposes, 7.31% of the ordinary income dividends paid
by the Fund qualify for the dividends received deduction for corporate
shareholders.
10
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGOTYPE] Price Waterhouse LLP [LOGO]
To the Board of Directors and Shareholders of
Phoenix Strategic Allocation Fund, Inc.
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 Strategic Allocation Fund, Inc. (formerly Phoenix Total
Return Fund, Inc.) (the "Fund") at December 31, 1996, and the results of its
operations, the changes in its net assets 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 December 31, 1996 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
/s/Price Waterhouse LLP
Boston, Massachusetts
February 7, 1997
11
<PAGE>
RESULTS OF SHAREHOLDER MEETING (Unaudited)
A special meeting in lieu of the Annual Meeting of shareholders of the
Phoenix Strategic Allocation Fund, Inc. was held on November 8, 1996 to
approve the following matters:
1. Fix the number of directors at fourteen and elect such number as
detailed below.
2. Ratify selection of Price Waterhouse LLP, independent accountants, as
auditors for the fiscal year ending December 31, 1996.
3. Approve amending the Fund's Restated Articles of Organization to change
the name of the Fund from Phoenix Total Return Fund, Inc. to Phoenix
Strategic Allocation Fund, Inc.
On the record date for this meeting, there were 20,088,259 shares outstanding
and 60.177% of the shares outstanding and entitled to vote were present by
proxy.
Number of votes:
1. Election of Directors For Withheld
---------- --------
C. Duane Blinn 11,656,327 432,266
Robert Chesek 11,669,951 418,639
E. Virgil Conway 11,651,391 437,202
Harry Dalzell-Payne 11,659,135 429,458
Francis E. Jeffries 11,669,168 419,425
Leroy Keith, Jr. 11,668,501 420,092
Philip R. McLoughlin 11,674,430 414,163
Everett L. Morris 11,656,260 432,333
James M. Oates 11,669,438 419,154
Calvin J. Pedersen 11,674,932 413,661
Philip R. Reynolds 11,651,461 437,132
Herbert Roth, Jr. 11,653,915 434,678
Richard E. Segerson 11,673,864 414,729
Lowell P. Weicker, Jr. 11,631,056 457,537
For Against Abstain
---------- ------- -------
2. Price Waterhouse LLP 11,466,657 131,399 490,537
3. Change name of Fund 10,464,424 750,603 873,566
12
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
Condensed Financial Information is included in Part A of this registration
statement and Condensed Financial Information and Financial Statements for the
year ended December 31, 1996 are included in Part B of this registration
statement.
(b) Exhibits:
1.1 Articles of Organization effective November 22, 1966 previously
filed and filed herewith via EDGAR and incorporated herein by
reference thereto.
1.2 Restated Articles of Organization effective March 21, 1967
previously filed and filed herewith via EDGAR and incorporated
herein by reference thereto.
1.3 Amendment to Restated Articles of Organization effective March 31,
1982 previously filed and filed herewith via EDGAR and incorporated
herein by reference thereto.
1.4 Amendment to Restated Articles of Organization effective July 9,
1986 filed with Amendment No. 10 and filed herewith via EDGAR and
incorporated herein by reference thereto.
1.5 Amendment to Restated Articles of Organization effective July 22,
1986 and filed with Amendment No. 10 and filed herewith via EDGAR
and incorporated herein by reference thereto.
1.6 Amendment to Restated Articles of Organization effective September
15, 1987 and filed with Post-Effective Amendment No. 2 and filed
herewith via EDGAR and incorporated herein by reference thereto.
1.7 Amendment to Restated Articles of Organization effective July 5,
1994 and filed herewith via EDGAR and incorporated herein by
reference thereto.
1.8 Amendment to Restated Articles of Organization effective October 12,
1994 and filed with Post-Effective Amendment No. 12 and filed
herewith via EDGAR and incorporated herein by reference thereto.
1.9 Amendment to Restated Articles of Organization effective November
14, 1996 and filed herewith via EDGAR and incorporated herein by
reference thereto.
2. By-Laws: Filed as Exhibit 2 to Amendment No. 10 (filed on Form N-1A)
to Registrant's Registration Statement on Form N-8B-1 (File No.
811-1442) and filed herewith via EDGAR and incorporated herein by
reference thereto.
3. Not applicable.
4. Reference is made to Article XXI of Registrant's By-Laws filed with
Amendment No. 10 and filed herewith via EDGAR and also
Post-Effective Amendment Nos. 8 and 12 and incorporated herein by
reference thereto.
C-1
<PAGE>
5.2 Management Agreement dated January 1, 1994 between Registrant and
Phoenix Investment Counsel, Inc. Filed as Exhibit 5.2 to
Post-Effective Amendment No. 12 on June 30, 1994 and filed herewith
via EDGAR and incorporated herein by reference thereto.
6.1 Distribution Agreement between Registrant and Phoenix Equity
Planning Corporation for Class A shares. Filed as Exhibit 6.1 to
Amendment No. 8 to Registrant's Registration Statement on Form N-1A
and filed herewith via EDGAR and incorporated herein by reference
thereto.
6.1a Distribution Agreement between Registrant and Phoenix Equity
Planning Corporation for Class B shares. Filed as Exhibit 6.1a to
Amendment No. 8 to Registrant's Registration Statement on Form N-1A
and filed herewith via EDGAR and incorporated herein by reference
thereto.
6.2 Form of Sales Agreement between Phoenix Equity Planning Corporation
and dealers. Filed as Exhibit 6.2 to Amendment No. 8 to Registrant's
Registration Statement on Form N-1A and filed herewith via EDGAR and
incorporated herein by reference thereto.
7. Not applicable.
8.1 Custodian Contract between Registrant and State Street Bank and
Trust Company dated March 10, 1988. Filed as Exhibit 8.1 to
Amendment No. 15 (filed on Form N-1A) to Registrant's Registration
Statement (File N. 811-1442) and filed herewith via EDGAR and
incorporated herein by reference thereto.
8.2 Amendment to Custodian Contract between Registrant and State Street
Bank and Trust Company dated March 10, 1988. Filed as Exhibit 8.2 to
Amendment No. 15 (filed on Form N-1A) to Registrant's Registration
Statement (File N. 811-1442) and filed herewith via EDGAR and
incorporated herein by reference thereto.
8.3 Amendment to Custodian Contract between Registrant and State Street
Bank and Trust Company. Filed as Exhibit 8.3 to Amendment No. 15
(filed on Form N-1A) to Registrant's Registration Statement (File N.
811-1442) and filed herewith via EDGAR and incorporated herein by
reference thereto.
9.1a Financial Agent Agreement between Registrant and Phoenix Equity
Planning Corporation dated December 11, 1996. Filed as Exhibit 9.1c
to Post-Effective Amendment No. 15 and filed herewith via EDGAR and
incorporated herein by reference thereto.
9.1b Amendment to Financial Agent Agreement between Registrant and
Phoenix Equity Planning Corporation dated December 11, 1996 and
effective as of January 1, 1997. Filed as Exhibit 9.1d to
Post-Effective Amendment No. 15 and filed herewith via EDGAR and
incorporated herein by reference thereto.
9.2b Form of Transfer Agency and Service Agreement between Registrant and
Phoenix Equity Planning Corporation. Filed as Exhibit 9.2b to
Post-Effective Amendment No. 12 on June 30, 1994 and filed herewith
via EDGAR and incorporated herein by reference thereto.
9.2c Sub-Transfer Agency Agreement between Registrant and Phoenix Equity
Planning Corporation dated June 1, 1994. Filed as Exhibit 9.2c to
Post-Effective Amendment No. 15 and filed herewith via EDGAR and
incorporated herein by reference thereto.
10. Opinion and Consent of Counsel covering shares of the Fund filed via
EDGAR with Post-Effective Amendment No. 14 and incorporated by
reference.
11. Consent of Independent Accountants, filed herewith.
C-2
<PAGE>
12. Not applicable.
13. Not applicable under rules relating to the filing of exhibits in
effect at date of original filing in 1966.
14. Prototype Individual Retirement Account. Filed as Exhibit 14 to
Registrant's Registration Statement on Form N-1A (File Nos. 33-9069,
811-1442) and incorporated herein by reference thereto.
15. Distribution Plan for Class A shares. Filed as Exhibit 15 to
Amendment No. 8 to Registrant's Registration Statement on Form N-1A
and filed herewith via EDGAR and incorporated herein by reference
thereto.
15.a Distribution Plan for Class B shares. Filed as Exhibit 15.a to
Amendment No. 8 to Registrant's Registration Statement on Form N-1A
and filed herewith via EDGAR and incorporated herein by reference
thereto.
16. Not applicable.
17. Financial Data Schedule filed herewith and reflected on EDGAR as
Exhibit 27.
18.a Rule 18f-3 Dual Distribution Plan effective March 15, 1996 filed via
EDGAR with Post-Effective Amendment No. 14 and incorporated herein
by reference.
18.b Rule 18f-3 Dual Distribution Plan effective January 1, 1997 filed
via EDGAR with Post-Effective Amendment No. 14 and incorporated
herein by reference.
19. Powers of Attorney filed via EDGAR with Post-Effective Amendment No.
14 and incorporated herein by reference.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
The following information is as of February 28, 1997.
Number of Shareholder
Title of Class Accounts
--------- ----------------
Common Stock, $1 par value Class A Shares 21,408
Common Stock, $1 par value Class B Shares 790
C-3
<PAGE>
ITEM 27. INDEMNIFICATION
Under the Registrant's By-Laws any present or former director or officer of
the Registrant is indemnified to the fullest extent permitted by law against
expenses, including attorneys' fees, judgments, fines and amounts paid in
settlement, actually and reasonably incurred by him in connection with any
action, suit or proceeding to which he may be made a party by reason of being or
having been a director or officer of the Registrant, provided he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Registrant and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
By-Laws do not authorize indemnification of any director or officer who is
liable to the Registrant or its shareholders by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
See "Management of the Fund" in the Prospectus and "Services of the Adviser"
in the Statement of Additional Information for information regarding the
business of the Adviser. For information as to the business, profession,
vocation or employment of a substantial nature of directors and officers of the
Adviser, reference is made to the Adviser's current Form ADV (SEC file No.
801-5995 (PIC)) filed under the Investment Advisers Act of 1940, incorporated
herein by reference.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Phoenix Equity Planning Corporation acts as principal underwriter for
the Fund's shares. Phoenix Equity Planning Corporation currently acts as
principal underwriter for the Phoenix Funds and for the variable contracts
issued by the Phoenix Home Life Variable Accumulation Account, Phoenix Home
Life Variable Universal Life Account, Phoenix Life and Annuity Variable
Universal Life Account and PHL Variable Accumulation Account.
(b) Directors and executive officers of Phoenix Equity Planning Corporation
are as follows:
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES WITH
BUSINESS ADDRESS WITH UNDERWRITER REGISTRANT
---------------- ---------------- --------------------------
Michael E. Haylon Director Executive
56 Prospect Street Vice President
P.O. Box 150480
Hartford, CT 06115-0480
Philip R. McLoughlin Director and President Director and
56 Prospect Street President
P.O. Box 150480
Hartford, CT 06115-0480
C-4
<PAGE>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES WITH
BUSINESS ADDRESS WITH UNDERWRITER REGISTRANT
---------------- ---------------- --------------------------
David R. Pepin Director and Executive Executive Vice
56 Prospect St. Vice President, Mutual President
P.O. Box 150480 Fund Sales and Operations
Hartford, CT 06115-0480
Leonard J. Saltiel Managing Director Vice President
100 Bright Meadow Blvd. Operations and Service
P.O. Box 1900
Enfield, CT 06083-2200
Paul A. Atkins Senior Vice President and None
56 Prospect St. Sales Manager
P.O. Box 150480
Hartford, CT 06115-0480
Maris Lambergs Senior Vice President, None
100 Bright Meadow Blvd. Insurance and Independent
P.O. Box 1900 Division
Enfield, CT 06083-2200
William R. Moyer Senior Vice President and Vice President
100 Bright Meadow Blvd. Chief Financial Officer
P.O. Box 1900
Enfield, CT 06083-2200
John F. Sharry Managing Director, Mutual None
100 Bright Meadow Blvd. Fund Distribution
P.O. Box 1900
Enfield, CT 06083-2200
G. Jeffrey Bohne Vice President, Mutual Fund Secretary and Clerk
101 Munson Street Customer Service
P.O. Box 810
Greenfield, MA 01302-0810
Eugene A. Charon Vice President and None
100 Bright Meadow Blvd. Controller
P.O. Box 1900
Enfield, CT 06083-2200
Nancy G. Curtiss Vice President and Treasurer Treasurer
56 Prospect Street Fund Accounting
P.O. Box 150480
Hartford, CT 06115-0480
William E. Keen III Assistant Vice President, Vice President
100 Bright Meadow Blvd. Mutual Fund Regulation
P.O. Box 1900
Enfield, CT 06083-2200
C-5
<PAGE>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES WITH
BUSINESS ADDRESS WITH UNDERWRITER REGISTRANT
---------------- ---------------- --------------------------
Elizabeth R. Sadowinski Vice President, None
56 Prospect St. Administration
P.O. Box 150480
Hartford, CT 06115-0480
Thomas N. Steenberg Vice President, Assistant Secretary
56 Prospect St. and Secretary
P.O. Box 150480
Hartford, CT 06115-0480
(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.
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 Clerk;
Registrant's Secretary; Registrant's investment adviser, Phoenix Investment
Counsel, Inc.; Registrant's financial agent and principal underwriter, Phoenix
Equity Planning Corporation; Registrant's dividend disbursing agent, State
Street Bank and Trust Company; and Registrant's custodian, State Street Bank and
Trust Company. The address of the Secretary and Clerk is 101 Munson Street, P.O.
Box 810, Greenfield, MA 01302-0810; the address of the investment adviser is 56
Prospect Street, Hartford, Connecticut 06115-0480; the address of the transfer
agent and the financial agent is 100 Bright Meadow Boulevard, Enfield,
Connecticut 06083-2200; the address of the dividend disbursing agent is State
Street Bank and Trust Company, P.O. Box 8301, Boston, Massachusetts 02266-8301
Attention: Phoenix Funds; and the address of the custodian is State Street Bank
and Trust Company, P.O. Box 351, Boston, Massachusetts 02101.
ITEM 31. MANAGEMENT SERVICES
The information required by this Item is included in the Statement of
Additional Information.
ITEM 32. UNDERTAKINGS
The information called for by Item 5A of Form N-1A is contained in the
Fund's Annual Report to Shareholders; accordingly, the Fund hereby undertakes to
furnish each person to whom a prospectus is delivered with a copy of the Fund's
latest Annual Report, upon request and without charge.
The Fund undertakes, if requested to do so by the holders of at least 10% of
the Fund's outstanding shares, to call a meeting of shareholders for the purpose
of voting upon the question of removal of a director or directors and to assist
with communications to other shareholders as required by Section 16(c) of the
Investment Company Act of 1940.
C-6
<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 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 the State
of Connecticut on the 24th day of April, 1997.
PHOENIX STRATEGIC ALLOCATION FUND, INC.
ATTEST: /s/ Thomas N. Steenburg By: /s/ Philip R. McLoughlin
----------------------- ----------------------
Thomas N. Steenburg Philip R. McLoughlin,
Assistant Secretary President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities indicated, on this 24th day of April, 1997.
SIGNATURE TITLE
--------- -----
- -------------------------------------------------- Director
C. Duane Blinn*
- -------------------------------------------------- Director
Robert Chesek*
- -------------------------------------------------- Director
E. Virgil Conway*
- -------------------------------------------------- Treasurer (principal
Nancy G. Curtiss* financial and
accounting officer)
- -------------------------------------------------- Director
Harry Dalzell-Payne*
- -------------------------------------------------- Director
Francis E. Jeffries*
- -------------------------------------------------- Director
Leroy Keith, Jr.*
/s/ Philip R. McLoughlin President and Director
- -------------------------------------------------- (principal executive
Philip R. McLoughlin officer)
- -------------------------------------------------- Director
Everett L. Morris*
- -------------------------------------------------- Director
James M. Oates*
- -------------------------------------------------- Director
Calvin J. Pedersen*
- -------------------------------------------------- Director
Philip R. Reynolds*
- -------------------------------------------------- Director
Herbert Roth, Jr.*
S-1(c)
<PAGE>
SIGNATURE TITLE
--------- -----
- -------------------------------------------------- Director
Richard E. Segerson*
- -------------------------------------------------- Director
Lowell P. Weicker, Jr.*
*By /s/ Philip R. McLoughlin
--------------------------------------------------
*Philip R. McLoughlin, Attorney-in-
fact pursuant to powers of
attorney filed with Post-Effective Amendment No. 14
S-2(c)
Exhibit 1.1
Articles of Organization
<PAGE>
The Commonwealth of Massachusetts
KEVIN H. WHITE
Secretary of the Commonwealth
STATE HOUSE
Boston, Mass.
ARTICLES OF ORGANIZATION
(UNDER G.L. CH. 156B)
NAME
(including given name in full) POST OFFICE ADDRESS
We, John Hand 225 Franklin Street, Boston, Mass.
Paul F. Beatty "
Charles C. Cabot, Jr., "
do hereby associate ourselves as incorporators with the intention of
forming a corporation under the provisions of General Laws,
Chapter 156B.
1. The name by which the corporation shall be known is:
Income and Capital Shares, Inc.
2. The purposes for which the corporation is formed are as follows:
(The purposes are set forth on continuation sheets 2A and 2B).
Note: If provisions for which the space provided under Articles 2, 4,
5 and 6 is not sufficient addtions should be set out on continuation
sheets to be numbered 2A, 2B, etc. Indicate under each Article
where the provision is set out. Continuation sheets shall be on
8 1/2" X 11" paper and must have a left-hand margin 1 inch wide for
binding. Only one side should be used.
<PAGE>
3. The number of shares and the par value, if any, of each class of stock
which the corporation is authorized to issue is as follows.
WITHOUT PAR VALUE WITH PAR VALUE
CLASS OF NUMBER OF NUMBER OF PAR
STOCK SHARES SHARES VALUE AMOUNT
Preferred
Participating Pre- 1,260,000 $1 $1,260,000
ference Shares
Common
Capital Shares 2,520,000 $1 $2,520,000
*4. If more than one class is authorized, a description of each of the
different classes of stock with, if any, the preferences, voting
powers, qualifications, special or relative rights or privileges as to
each class thereof and any series now established:
See Continuation Sheets 4A through 4L
*5. The restrictions, if any, imposed by the Articles of Organization
upon the transfer of shares to stock of any class are as follows:
None.
*6. Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution,
or for limiting, defining, or regulating the powers of the corporation,
or of its directors or stockholders, or of any class of stockholders.
See Continuation Sheets 6A through 6H.
*If there are no provisions state "None".
<PAGE>
7. The first meeting of the incorporators was duly held on the 18th day of
November 1966 at which by-laws of the corporation were duly adopted and
at which the initial directors, president, treasurer and clerk, whose
names are set out below, were duly elected.
8. The following information shall not for any purpose be treated as a
permanent part of the Articles of Organization of the corporation.
a. The POST OFFICE ADDRESS of the INITIAL PRINCIPAL OFFICE of
the corporation in Massachusetts is:
535 Boylston Street, Boston, Massachusetts
b. The name, residence, and post office address of each of the
initial directors and following officers of the corporation
elected at the first meeting are as follows:
Name Residence Post Office Address
---- --------- -------------------
President: John Hand 256 Concord Street, Gloucester, Mass.
Treasurer: Paul F. Beatty Mossman Road, Sudbury, Mass.
Clerk: Charles C. Cabot, Jr. Dedham Street, Dover, Mass.
Directors:
John Hand 256 Concord Street, Gloucester, Mass.
Paul F. Beatty Mossman Road, Sudbury, Mass.
Charles C. Cabot, Jr. Dedham Street, Dover, Mass.
c. The DATE INITIALLY ADOPTED on which the corporation's
fiscal year ends is:
December 31
d. The DATE INITIALLY FIXED IN THE BY-LAWS FOR THE ANNUAL
MEETING of stockholders of the corporation is:
The second Thursday in March.
e. The name and business address of the registered agent,
if any, of the corporation are:
None.
IN WITNESS WHEREOF, and under the penalties of perjury, we, the
above-named INCORPORATORS, hereto sign our names, this 18th day of November
1966.
/s/ John Hand
----------------------------------
John Hand
----------------------------------
/s/ Paul F. Beatty
----------------------------------
Paul F. Beatty
/s/ Charles C. Cabot, Jr.
----------------------------------
Charles C. Cabot, Jr .
<PAGE>
CONTINUATION SHEETS
FOR
ARTICLES OF ORGANIZATION
OF
INCOME AND CAPITAL SHARES, INC.
To subscribe for, invest in, purchase or otherwise acquire, own, hold,
sell, exchange, pledge or otherwise dispose of, securities of every nature and
kind, including, without limitation, all types of stocks, bonds, debentures, or
obligations or evidences of indebtedness or ownership issued or created by any
and all associations, trusts or corporations, public or private, whether
created, established or organized under the laws of the United States, any of
the States, or any territory or district or colony or possession thereof, or
under the laws of any foreign country, and also foreign and domestic government
and municipal obligations, bank acceptances, commercial paper and secured call
loans; to pay for the same in cash or by the issue of stock, bonds or notes of
this Corporation or otherwise; and while owning and holding any such securities,
to exercise all the rights, powers and privileges of a stockholder or owner,
including the right to transfer and convey the said stock or other securities to
one or more persons,. firms, associations or corporations subject to voting
trusts or other agreements placing in such persons voting or other powers in
respect of said stocks or other securities; to borrow money or otherwise obtain
credit
2A
<PAGE>
and to secure the same by mortgaging, pledging or otherwise subjecting as
security the assets of this Corporation; and to have all the powers of a
corporation under the applicable corporation laws, as in effect from time to
time, of the Commonwealth of Massachusetts. Notwithstanding the foregoing,
however, so long as any Participating Preference Shares of this Corporation are
outstanding, this Corporation shall not make any investment, except for
investments in short-term obligations of the Government of the United States of
America or any subdivision or instrumentality thereof, prime commercial paper
and other cash equivalents, unless at the time of the making of such investment
the currently indicated yield thereon is at least 2.75% of the cost thereof. In
these provisions, purposes shall also be construed as powers, and powers shall
also be construed as purposes, and the enumeration of specific purposes or
powers shall not be construed to limit other statements of purposes or powers or
purposes or powers which this Corporation may otherwise have under applicable
law, all of the same being separate and cumulative, and all of the same may be
carried on, promoted and pursued, transacted or exercised in any place
whatsoever.
2B
<PAGE>
DESCRIPTION OF THE TWO CLASSES OF STOCK
1. PARTICIPATING PREFERENCE SHARES
a. DIVIDENDS. The Participating Preference Shares will be exclusively
entitled to receive, when and as declared by the Board or Directors out of funds
legally available therefor, cumulative, preferential dividends in an amount
equal to the entire investment company taxable income of this Corporation for
each year, as defined in the Internal Revenue Code and in the applicable
regulations promulgated thereunder, as in effect on the date of organization of
this Corporation, but computed by excluding net realized short-term capital
gains, as defined in said Internal Revenue Code as in effect on that date,
except to the extent that such net realized short-term capital gains for any
fiscal year are required to be paid to the stockholders of this Corporation in
order for this Corporation to be relieved of federal income taxes on such of its
investment company taxable income for such year as is distributed to its
stockholders, and, in any event, will be entitled, when and as declared by the
Board of Directors out of funds legally available therefor, to receive
cumulative, preferential minimum dividends payable, otherwise than upon any call
of, or distribution in liquidation upon, said Participating Preference Shares,
solely out of such investment company taxable income as so computed, at the
annual rate of $.50 per share (5% of the maximum price of $10 per share at which
such shares are to be initially sold to the public). Any arrearages of such
minimum dividends shall be deemed satisfied to the extent such investment
company taxable income, as so computed, is
4A
<PAGE>
subsequently paid as dividends and such payments shall be deemed to be made
first in satisfaction of such arrearages. Dividends declared from such
investment company taxable income, as so computed, for each year shall be paid
to the holders of the Participating Preference Shares quarterly in each such
year, except that the final such payment for any year may be made not later than
the first dividend payment date in the next succeeding year. In addition to the
amounts of dividends for any year paid to the holders of the Participating
Preference Shares pursuant to the foregoing provisions, this Corporation may pay
to such holders as dividends such amounts of such net realized short-term
capital gains for such year as are estimated by the Board of Directors as being
necessary to be paid in order to insure that this Corporation will be relieved
of Federal income taxes for such year on such of its said investment company
taxable income as is distributed to its stockholders for such year. Dividend
payment dates for the Participating Preference Shares shall be the 30th days of
January, April, July and October and payments thereof shall be made to the
holders of Participating Preference Shares of record on the respective dates
fixed for the purpose by the Board of Directors. The Participating Preference
Shares shall have no right to any dividends other than the dividends referred to
in this subdivision (a). Dividends on all Participating Preference Shares shall
commence to accrue and shall be cumulative (as to said minimum dividends,
whether or not earned, and, as to such investment company taxable income
computed as aforesaid, only to the extent that such investment company taxable
income is not deemed paid in satisfaction of any arrearages of said
4B
<PAGE>
minimum dividends) from and after the date of initial issue and sale to
underwriters for distribution to the public of Participating Preference Shares.
b. CALL OF PARTICIPATING PREFERENCE SHARES. The Participating
Preference Shares are callable as a whole, and only as a whole, at the option of
a majority of the Directors elected by the Capital Shares at any time on or
after October 30, 1981 at a call price which shall consist of $10 per share and
a sum equal to all accrued and unpaid dividends thereon to the call date;
provided that the holders of Participating Preference Shares will have the
option to receive said call price in Capital Shares, which this Corporation will
issue to them, taken at the net asset value of such Capital Shares as of the
close of business on the date fixed for such call, determined as herein
provided.
Notice of any proposed call of Participating Preference Shares shall be
given by this Corporation by mailing a copy of such notice, postage prepaid, not
less than 30 days prior to the date fixed for such call, to the holders of
record of the Participating Preference Shares to be called, addressed to them at
their respective addresses appearing on the books of this Corporation.
From and after the date specified in such notice as the date of call
(unless default shall be made by this Corporation in providing monies for the
payment of the call price), all dividends upon the Participating Preference
Shares so called shall cease to accrue and, from and after said date (unless
default shall be made by this Corporation as afore-
4C
<PAGE>
said) or, if this Corporation shall so elect, from and after the date specified
therefor in the notice of call (prior to the date of call so specified) on which
this Corporation shall provide the monies for the payment of the call price
(which for this purpose only shall include accrued and unpaid dividends only to
the date of the notice of call), all rights of the holders of the shares so
called, as stockholders of this Corporation, including without limitation, any
right to vote or participate in or in connection with any corporate act,
excepting only the right to receive the call price on the call date and the
right to convert into Capital Shares as herein provided, shall cease, and such
shares shall be deemed no longer outstanding. This Corporation may provide the
monies for the payment of the call price as aforesaid by depositing with a bank
or trust company doing business in Boston, Massachusetts, having a capital and
surplus of at least $2,000,000 any one or more of the following, namely, (a)
cash or certified or official bank checks in Boston Clearing House funds, (b)
obligations of the United States Government maturing on or prior to the call
date or (c) obligations maturing on or prior to the call date of a bank or trust
company doing business in Boston, Massachusetts having a capital and surplus of
at least $100,000,000. The making of any such deposit with any such bank or
trust company shall not relieve this Corporation of
4D
<PAGE>
liability for payment of the call price, but this Corporation shall be entitled
to all monies so deposited which shall remain unclaimed by the holders of
Participating Preference Shares so called at the end of six (6) years after the
call date, together with any interest on all such monies so deposited which may
have been allowed by said bank or trust company with which the deposit was made,
and such monies shall be paid over to this Corporation, upon its demand, by said
bank or trust company, without liability to any holders or such Participating
Preference Shares for so doing and also without the necessity of any notice to
them. To the extent that any monies so deposited for the call of such
Participating Preference Shares shall exceed the amount required for the call of
such shares outstanding as of the call date by reason of the conversion of any
such shares into Capital Shares of the Corporation, such excess monies shall be
paid back to the Corporation, upon its demand, by said bank or trust company.
Any call of Participating Preference Shares may be effected by payment out of
the net profits of surplus of this Corporation or by the application of capital,
all to the extent and in the manner and at the time permitted by the laws of the
Commonwealth of Massachusetts, except that no call of Participating Preference
Shares may be effected by this Corporation at any time when any dividend on the
Participating Preference Shares, accrued up to the last regular quarterly
dividend payment date thereof, shall be in arrears unless such dividend is paid
upon such call.
4E
<PAGE>
c. PREFERENCE ON LIQUIDATION, ETC. To the extent provided herein the
Participating Preference Shares shall be preferred over the Capital Shares as to
both earnings and assets. In the event this Corporation shall be liquidated,
dissolved or wound up, the holders of the Participating Preference Shares shall
be entitled out of the assets of this Corporation available for distribution to
its stockholders, whether from capital, surplus or earnings, before any amount
shall be paid to the holders of the Capital Shares, to an amount equal to $10
per share in the event such liquidation, dissolution or winding up is voluntary
and $9.15 per share in the event such liquidation, dissolution or winding up is
involuntary, together in either case with a sum equal to all accrued and unpaid
dividends thereon. If the assets of this Corporation available for distribution
to the holders of Participating Preference Shares shall be insufficient to
permit the payment in full of the sums payable, as aforesaid, to the holders of
such Participating Preference Shares upon such liquidation, dissolution or
winding up, then all such assets of this Corporation shall be distributed
ratably among the holders of the Participating Preference Shares according to
the amounts which they respectively would be entitled to receive if such assets
were sufficient to permit the payment in full of said amounts. Neither the call
by this Corporation of Participating Preference Shares in the manner heretofore
provided nor the merger or consolidation of this Corporation with or into any
other corporation
4F
<PAGE>
or corporations, or the sale or transfer by this Corporation of all or any part
of its assets, shall be deemed to be a liquidation, dissolution or winding up of
this Corporation for the purposes of this paragraph. Holders of Participating
Preference Shares shall not be entitled, upon the liquidation, dissolution or
winding up of this Corporation, to receive any amounts with respect to such
Participating Preference Shares other than the amounts referred to in this
subdivision (c.)
d. RECEIPT OF CALL PRICE IN CAPITAL SHARES. The holders of
Participating Preference Shares shall have the option, as aforesaid, upon the
call of said shares as heretofore provided, to receive, to the extent possible,
the call price in whole Capital Shares of the Corporation taken at net asset
value as aforesaid, any balance of such call price to be paid in cash.
In order to exercise such option, a holder of Participating Preference
Shares shall surrender to the Corporation the certificate or certificates for
such shares, duly endorsed to the Corporation or in blank, together with a
notice to the Corporation in writing of the holder's election to exercise such
option stating therein the name or names in which he wishes the certificate or
certificates for Capital Shares of the Corporation to be issued. The Corporation
will, as soon as practicable after the date fixed for call, deliver to such
holder, or his nominee or nominees, a certificate or certificates for the number
of full Capital Shares to which
4G
<PAGE>
he is entitled. Said option relating to such Participating Preference Shares may
be exercised only after the date of the notice from the Corporation that such
shares have been called, and such option shall terminate at the close of
business on the date fixed for call.
2. CAPITAL SHARES
a. DIVIDENDS. So long as any Participating Preference Shares are
outstanding, the holders of Capital Shares shall receive no dividends. When
all Participating Preference Shares are no longer outstanding, dividends may
be declared and paid upon the Capital Shares when and as declared by the
Board of Directors out of funds legally available therefor.
b. DISTRIBUTION OF ASSETS In the event that this Corporation shall be
liquidated, dissolved or wound up, after there shall have been paid to or set
aside for the holders of the Participating Preference Shares the full
preferential amounts to which they are entitled under the provisions hereof, the
holders of the Capital Shares shall be entitled to receive, pro rata and to the
exclusion of the Participating Preference Shares, all of the remaining assets of
this Corporation available for distribution to its stockholders.
3. VOTING RIGHTS OF PARTICIPATING
PREFERENCE SHARES AND CAPITAL SHARES
a. GENERAL. Except as hereinafter otherwise specifically provided,
the holders of Capital Shares and the holders of
4H
<PAGE>
Participating Preference Shares, voting together as one class, shall be entitled
to one vote per share in respect of all matters which require a vote of security
holders.
b. ELECTION OF DIRECTORS. The holders of Participating Preference
Shares, voting as a class, shall be entitled to elect two directors of the
Corporation, provided, however, that if at any time dividends on the
Participating Preference Shares shall be unpaid in an amount equal to or
exceeding two (2) full years' dividends thereon, the holders of the
Participating Preference Shares, voting as a class, shall be entitled to elect a
majority of the directors of the Corporation and to continue to be so
represented until all dividends in arrears shall have been paid or otherwise
provided for, and in the event of any such arrearage the Board of Directors or
the President shall promptly call a meeting of the holders of the Participating
Preference Shares for the purpose of enlarging the Board of Directors and
electing additional Directors to the extent necessary to provide such majority.
Such additional Directors shall hold office until the next annual meeting of the
stockholders or until all arrearages of such dividends shall have been paid or
otherwise provided for, whichever occurs earlier, and at succeeding annual
meetings of the stockholders held while any arrearages of such dividend exist,
the Participating Preference Shares, voting as a class, shall continue to have
the right to elect additional directors
4I
<PAGE>
so to hold office for such terms. The holders of the Capital Shares, voting as a
class, shall be entitled exclusively to elect all directors of the Corporation
other than those elected by the holders of the Participating Preference Shares
in accordance with the foregoing provisions.
c. OTHER VOTING RIGHTS. In respect of any plan of reorganization
adversely affecting the Participating Preference Shares or any action which
requires a vote of security holders as provided under Section 13(a) of the
Investment Company Act of 1940, holders of the Participating Preference Shares
shall be entitled to vote thereon separately as a class and the approval of a
majority of the Participating Preference Shares shall be required for the
approval of such plan or such action, PROVIDED, HOWEVER, that the provisions of
these Articles of Organization may be amended only as provided by the applicable
laws of the Commonwealth of Massachusetts, and further PROVIDED, HOWEVER, that
so long as any Participating Preference Shares remain outstanding, (1) no
amendment whatsoever shall be made of the provisions of these Articles (a)
regulating and restricting the issue and sale of and the purchase or other
acquisition for value of shares of stock of this Corporation, or (b) requiring
that investments, other than short-term obligations of the government of the
United States of America or any subdivision or instrumentality thereof, prime
commercial
4J
<PAGE>
paper and other cash equivalents, must have a currently indicated yield thereon
at the time of the making thereof of at least 2.75% of the cost thereof and (2)
the Corporation shall not be voluntarily liquidated, dissolved or wound up
without the affirmative vote of the holders of 75% of all the outstanding shares
of both classes, voting as a single class.
4. GENERAL.
Except as otherwise specifically provided herein, the holders of
Participating Preference Shares and Capital Shares, as such, shall have no right
to subscribe for or purchase any additional shares of capital stock or other
securities issued by this Corporation. All issues of shares of both classes
shall be in equal numbers and for equal amounts of cash consideration per share,
and after the initial issue and sale of shares to the public, this Corporation
shall not issue or sell any additional shares of either class, except as a stock
dividend or in a capital reclassification or stock split, so long as any
Participating Preference Shares remain outstanding. In these Articles except as
otherwise specifically provided, the term "outstanding" when used with reference
to any shares of stock means that such shares are issued and are held other than
in the treasury of this Corporation. So long as any Participating Preference
Shares are outstanding, this Corporation shall not purchase or otherwise acquire
for value any shares of its capital
4K
<PAGE>
stock of either class except upon any call or the Participating Preference
Shares or any liquidation of this Corporation as herein provided. The shares of
both classes shall be transferable without restriction. When all Participating
Preference Shares have been called and are no longer out-standing, this
Corporation will then be an open-end investment company, as defined in the
Investment Company Act Of 1940, and any holder of Capital Shares of this
Corporation may by presentation or a written request, together with his
certificates, if any, for such shares, duly endorsed, at the office of this
corporation or at the principal office of a custodian or transfer agent
appointed by this Corporation, redeem his shares for the net asset value thereof
as determined in the manner set forth herein. Redemptions as aforesaid, or
voluntary purchases by the corporation of its own stock, shall be made as
provided in the By-Laws, and in accordance with and subject to the requirements
of applicable laws and regulations.
4L
<PAGE>
OTHER LAWFUL PROVISIONS
The following additional provisions not inconsistent with law are
hereby established for the management, conduct and regulation of the business
and affairs of this Corporation, and for creating, limiting, defining, and
regulating the powers of this Corporation and of its Directors and stockholders:
The Board of Directors may, at any time and from time to time, contract
for management services with John P. Chase. Inc., a Massachusetts corporation,
or with such other association, corporation or firm as the Board of Directors
may deem desirable, every such contract to comply with such requirements and
restrictions as may be set forth in the By-Laws of this Corporation as from time
to time amended; and any such contract may contain such other terms
interpretative of or in addition to said requirements and restrictions as the
Board of Directors may determine. The fact that any or all of the directors,
officers or shareholders of this corporation are also shareholders, directors
or officers of John P. Chase, Inc. or may be shareholders, trustees directors
or officers of some other corporation, firm or association with which such a
management contract or any other contract may hereafter be made, shall not
6A
<PAGE>
affect the validity of any such contract or disqualify any officer or director
of this Corporation from voting upon or executing the same or create any
liability or accountability in connection with such contract based on adverse
interest.
The Board of Directors may by action of a majority of the members of
said Board at any time in office, alter, amend or repeal the By-Laws of this
Corporation to the extent, and only to the extent, provided in said By-Laws.
Assets of this Corporation may be held by or deposited with a bank or
trust company or other organization as custodian, pursuant to such requirements
as may be prescribed from time to time by the By-Laws of this corporation and by
the Board of Directors pursuant to said By-Laws.
The Board of Directors or any officer or officers or agent or agents of
this Corporation designated from time to time for this purpose by the Board
shall determine the value of all the assets of this Corporation at the close of
trading on the New York Stock Exchange on any day upon which such Exchange is
open for unrestricted trading or at such other times as the Board of Directors
shall designate, and the value of such assets so determined, less total
liabilities of this Corporations (exclusive of capital stock and surplus) and
less the aggregate
6B
<PAGE>
value or the Participating Preference Shares, so long as said Participating
Preference Shares are outstanding, said value to be computed until notice of
call thereof has been given at $9.15 per share together with a sum equal to all
accrued but unpaid dividends thereon and thereafter at the call price, divided
by the number of Capital Shares outstanding shall be the net asset value of a
Capital Share until a new net asset value is determined by the Board or such
officers or agents. In determinations of net asset value all securities for
which market quotations are available shall be appraised at last sale price, or
if there has been no current sale, last current bid price (as nearly as can
conveniently be determined) and other securities and assets at fair value as
determined in good faith by or under authority of the Board in accordance with
accounting principles generally accepted at the time. In determinations of net
asset value, treasury stock shall be treated as if it were unissued. When net
asset value is determined as of a time other than the close of unrestricted
trading on the New York Stock Exchange, the Board or such officers or agents
may, but need not, determine such net asset value by adjusting the net asset
value determined as of the preceding close of such Exchange in such manner
(based upon changes in the market prices of selected securities or changes in
market averages or on other standard and readily ascertainable market data since
such close) as the Board or such officers or agents deem adequate to
6C
<PAGE>
reflect a fair approximate estimate of the probable change in net asset value
which has occurred since such close. In determining the net asset value the
Board or such officers or agents may include in liabilities such reserves for
taxes, estimated accrued expenses and contingencies in accordance with
accounting principles generally accepted at the time as the Board or such
officers or agents may in its or their best judgment deem fair and reasonable
under the circumstances.
The By-Laws of this corporation, as from time to time amended, may
prescribe limitations upon the borrowing of money and pledging of assets by this
corporation.
Any person (and his heirs, executors and administrators) may be
indemnified by the Corporation against reasonable costs and expenses incurred by
him in connection with any action, suit or proceeding to which he may be made a
party by reason of his being or having been a director, officer or employee of
this Corporation, or of another corporation if this Corporation requested him to
serve as such, except in relation to any actions, suits or proceedings in which
he has been adjudged liable because of willful misfeasance,
6D
<PAGE>
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office. In the absence of an adjudication which expressly
absolves such person of liability to the Corporation or its stockholders for
willful misfeasance, bad faith, gross negligence and reckless disregard of the
duties involved in the conduct of his office, or in the event of a settlement,
each such person (and his heirs, executors and administrators) may be
indemnified by the Corporation against payments made, including reasonable costs
and expenses, provided that such indemnity shall be conditioned upon the prior
determination by a resolution of two-thirds of those members of the Board of
Directors of the corporation who are not involved in the action, suit or
proceeding that such person has no liability by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office, and provided further that if more than one-third of the
members of the Board of Directors of the corporation are involved in the action,
suit or proceeding, such determination shall have been made by a written opinion
of independent counsel. Amounts paid in settlement shall not exceed costs, fees
and expenses which would have been reasonably incurred if the action, suit or
proceeding had been litigated to a conclusion. Such a determination by the Board
of Directors, or by independent counsel, and the payments of amounts by the
corporation on the basis thereof shall not prevent a stockholder from
challenging such indemnification
6E
<PAGE>
by appropriate legal proceedings on the grounds that the person indemnified was
liable to the Corporation or its security holders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. The foregoing rights and indemnification
shall not be exclusive of any other rights to which such person may be entitled
according to law.
John P. Chase, Inc. and any other association, corporation, person,
firm or other entity with which this corporation may have any such contract for
management services may perform management and any other services for any other
person, association, corporation, firm or other entity pursuant to any contract
or otherwise, and take any action or do anything in connection therewith or
related thereto, and no such performance of management or other services or
taking of any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of John P.
Chase, Inc. or any other association, corporation, person, firm or other entity
to or with this Corporation or deemed to violate or give rise to any duty or
obligation of such corporation or any other association, corporation, person,
firm or other entity to this Corporation. The
6F
<PAGE>
name of this Corporation is understood to be used by this Corporation with the
consent of John P. Chase, Inc. which continues to control the use of such name,
and such use by this Corporation shall in no way prevent John P. Chase, Inc. or
any of its successors or assigns from using or permitting the use of, the words
"Income and Capital Shares, Inc." or any combination of them, along or with any
other word or words, for, by or in connection with any other entity or business,
other than this corporation or its business, whether or not the same directly or
indirectly competes or conflicts with this corporation on or its business in any
manner.
Meetings of stockholders may be held outside the Commonwealth of
Massachusetts but within the United States, if the By-Laws so provide. The books
of this Corporation may be kept (subject to any provision contained in the
statutes) outside the Commonwealth of Massachusetts but within the United
States, at such place or places as may be designed from time to time by the
Board of Directors or in the By-Laws of this Corporation. Elections of Directors
need not be by ballot unless the By-Laws of this Corporation shall so provide.
Except as may be otherwise provided herein, this Corporation reserves
the right to amend, alter, change or repeal any provision contained in these
Articles of
6G
<PAGE>
Organization, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
6H
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF ORGANIZATION
GENERAL LAWS, CHAPTER 156B, SECTION 72
I hereby certify that, upon an examination of the within-written articles of
organization, duly submitted to me, it appears that the provisions of the
General Laws relative to the organization of corporations have been complied
with, and I hereby approve the said articles; and the filing fee in the amount
of $1,890.00 having been paid, said articles are deemed to have been filed
with me this 22nd day of November 1966.
/S/ KEVIN H. WHITE
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT
TO: Charles C. Cabot, Jr. c/o Sullivan & Worcester
-------------------------------------------------------
225 Franklin Street
-------------------------------------------------------
Boston, MA 02110
-------------------------------------------------------
Telephone: 423-7474
---------------------------------------------
FILING FEE: 1/20 of 1% of the total amount of the authorized capital stock
with par value, and one cent a share for all authorized shares without par
value, but no less than $75. General Laws, Chapter 156B.
Copy Mailed
7I
Exhibit 1.2
Restated Articles of Organization
<PAGE>
The Commonwealth of Massachusetts
KEVIN H. WHITE
Secretary of the Commonwealth
STATE HOUSE, BOSTON, MASS.
RESTATED ARTICLES OF ORGANIZATION
GENERAL LAWS, CHAPTER 156B, SECTION 74
This certificate must be submitted to the Secretary of the Commonwealth
within sixty days after the date of the vote of stockholders adopting the
restated articles of organization. The fee for filing this certificate is
prescribed by General Laws, Chapter 156B, Section 114. Make check payable to the
Commonwealth of Massachusetts. We, William J. Kirk, President and John N.
Worcester, Clerk of INCOME AND CAPITAL SHARES, INC. located at The Chase
Building, 535 Boylston St., Boston, MA 02116 do hereby certify that the
following restatement of the articles of organization of the corporation was
duly adopted at a meeting held on March 21, 1967, by vote of:
10,011 shares of Capital Shares out of 10,011 shares outstanding,
- ---------- ----------------- ----------
type, class & series, (if any)
ence Shares
10,011 shares of Participating Prefer/ out of 10,011 shares outstanding, and
- --------- ----------------------- --------
type, class & series, (if any)
________ shares of _______________ out of _______________ shares outstanding,
type, class & series, (if any)
being all of each class of stock outstanding and entitled to vote and of
each class or series of stock adversely affected thereby:
1. The name by which the corporation shall be known is:-
Income and Capital Shares, Inc.
2. The purposes for which the corporation is formed are as
follows:-
See Continuation Sheets 2A through 2B
Note: Provisions for which the space provided under articles 2, 4, 5,
and 6 is not sufficient should be set out on continuation sheets to be
numbered 2A, 2B, etc. Indicate under each article where the provision
is set out. Continuation sheets shall be on 8 1/2" wide x 11" high
paper and must have a left-hand margin 1 inch wide for binding.
Only one side should be used.
<PAGE>
3. The total number of shares and the par value, if any, of
each class of stock which the corporation is authorized to
issue is as follows:
- -------------------------------------------------------------------------------
WITHOUT PAR VALUE WITH PAR VALUE
- -------------------------------------------------------------------------------
CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES PAR VALUE
- -------------------------------------------------------------------------------
Preferred - Cumulative Income 1,761,000 $1 per share
Shares
- -------------------------------------------------------------------------------
Common - Capital Shares 3,521,000 $1 per share
- -------------------------------------------------------------------------------
*4. If more than one class is authorized, a description of each of the
different classes of stock with, if any, the preferences, voting
powers, qualifications, special or relative rights or privileges as to
each class thereof and any series now established:
See Continuation Sheets 4A through 4M
*5. The restrictions, if any, imposed by the articles or organization upon
the transfer of shares of stock of any class are as follows:
None
*6. Other lawful provision, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution,
or for limiting, defining, or regulating the powers of the corporation,
or of its directors or stockholders, or of any class of stockholders:
See Continuation Sheets 6A through 6G
*If there are no such provisions, state "None".
<PAGE>
We further certify that the foregoing restated articles of
organization effect no amendments to the articles or organization of the
corporation as heretofore amended, except amendments to the following articles
2, 3, 4 and 6
(*If there are no such provisions, state "None".)
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed
our names this 21st day of March, in the year 1967.
/s/ William J. Kirk, President
- --------------------------------------------------------------------
/s/ John N. Worcester, Clerk
- --------------------------------------------------------------------
<PAGE>
CONTINUATION SHEETS
FOR
ARTICLES OF ORGANIZATION
OF
INCOME AND CAPITAL SHARES, INC.
To subscribe for, invest in, purchase or otherwise acquire, own, hold,
sell, exchange, pledge or otherwise dispose of, securities of every nature and
kind, including, without limitation, all types of stocks, bonds, debentures, or
obligations or evidences of indebtedness or ownership issued or created by any
and all associations, trusts or corporations, public or private, whether
created, established or organized under the laws of the United States, any of
the States, or any territory or district or colony or possession thereof, or
under the laws of any foreign country, and also foreign and domestic government
and municipal obligations, bank acceptances, commercial paper and secured call
loans; to pay for the same in cash or by the issue of stock, bonds or notes of
this Corporation or otherwise; and while owning and holding any such securities,
to exercise all the rights, powers and privileges of a stockholder or owner,
including the right to transfer and convey the said stock or other securities to
one or more persons, firms, associations or corporations subject to voting
trusts or other agreements placing in such persons voting or other powers in
respect of said stocks or other securities; to borrow money or otherwise obtain
credit
2A
<PAGE>
and to secure the same by mortgaging, pledging or otherwise subjecting as
security the assets of this Corporation; and to have all the powers of a
corporation under the applicable corporation laws, as in effect from time to
time, of the Commonwealth of Massachusetts. Notwithstanding the foregoing,
however, so long as any Cumulative Income Shares of this Corporation remain
outstanding, as to 75% of its gross assets (taken at cost), this Corporation may
purchase only securities (except in case of short-term obligations of the
United States of America, prime commercial paper and other cash equivalents)
having a minimum indicated yield on cost of 2.75%. As to the remaining 25% of
its assets taken at cost, this Corporation may purchase securities without
regard of yield. In these provisions, purposes shall also be construed as
powers, and powers shall also be construed as purposes, and the enumeration of
specific purposes or powers shall not be construed to limit other statements of
purposes or powers or purposes or powers which this Corporation may otherwise
have under applicable law, all of the same being separate and cumulative, and
all of the same may be carried on, promoted and pursued, transacted or exercised
in any place whatsoever.
2B
<PAGE>
DESCRIPTION OF THE TWO CLASSES OF STOCK
1. CUMULATIVE INCOME SHARES
a. DIVIDENDS. The Cumulative Income Shares will be exclusively
entitled to receive, when and as declared by the Board or Directors out of
funds legally available therefor, cumulative, preferential dividends in an
amount equal to the entire investment company taxable income of this
Corporation for each year, (and not required to pay any arrearages in the
minimum cumulative dividends), as defined in the Internal Revenue Code, as in
effect on the date of organization of this Corporation; but computed by
excluding net realized short-term capital gains, as defined in said Internal
Revenue Code as in effect on that date, except to the extent that such net
realized short-term capital gains for any fiscal year are necessary to be paid
out as dividends in order for this Corporation to be relieved of federal income
taxes on such of its investment company taxable income for such year as is so
distributed and then only to the extent that such short-term gains are
necessary to pay the current minimum cumulative dividend and any arrearages in
minimum cumulative dividends, or, if not so necessary, are not paid to the
holders of Capital Shares are hereinafter provided; and also computed by
excluding any amount of such investment company taxable income as is required
to be paid to or retained for the holders of Capital Shares on account of the
charges hereinafter referred to. Any balance of such short-term gains so
required to be paid out and not so necessary to pay such minimum cumulative
dividends will be paid to the holders of Capital Shares, provided that after
such payment the Cumulative Income Shares, provided that after such payment
the Cumulative Income Shares would have 200% asset coverage, as defined in the
Investment Company Act of 1940. If such asset coverage would not exist, all or
part of such balance of such short-term gains not paid to the holders of
Capital Shares will be paid to the holders of Cumulative Income Shares and a
4A
<PAGE>
charge in the amount so paid will be established against dividends, in excess of
minimum cumulative dividends, payable to the holders of Income Shares, provided
that, if for any year it is necessary for the corporation to pay out as a
dividend any amount of its investment company taxable income equal to all or any
part of the amount of such charge in order to relieve the corporation of federal
income taxes on the amounts distributed as dividends for such year; then such
amount so necessary to be paid out shall be paid as a dividend to the holders of
Capital Shares to the extent that the asset coverage for the Income Shares then
permits such payment (and said charge shall be reduced by an amount equal to
such payment), and to the extent said asset coverage does not so permit such
payment, such amount so necessary to be paid out shall be paid to the holders of
Income Shares (and said charge, including an amount equal to such payment, shall
be continued against such future dividends, in excess of minimum cumulative
dividends, payable to the holders of Income Shares). In an event, the Cumulative
Income Shares will be entitled, when and as declared by the Board of Directors,
out of funds legally available therefor, to receive cumulative, preferential
minimum dividends payable, otherwise than upon the call of, or distribution in
liquidation upon, the Cumulative Income Shares, solely out of such investment
company taxable income as so computed at the annual rate of $.50 per share (5%
of the maximum price of $10 per share at which such shares are to be initially
sold to the public). Any arrearages of such minimum dividends shall be deemed
satisfied to the extent of any dividends subsequently paid and such payments
shall be deemed to be made first in satisfaction of such arrearages. Capital
surplus shall not be used to pay such minimum cumulative dividends except upon
the call of the Cumulative Income Shares or
4B
<PAGE>
any liquidation. Dividends declared shall be paid to the holders of the
Cumulative Income Shares quarterly in each such year, except that the final such
payment for any year may be made not later than the first dividend payment date
in the next succeeding year. In addition to the amounts of dividends for any
year paid to the holders of the Cumulative Income Shares pursuant to the
foregoing provisions, this Corporation may pay to such holders of Capital
Shares, subject
4B (continued)
<PAGE>
to the limitations mentioned above, or to the holders of Cumulative Income
Shares if such limitations apply, as dividends such amounts of any net realized
short-term capital gains for such year as are estimated by the Board of
Directors as being necessary to be paid in order to insure that this Corporation
will be relieved of Federal income taxes for such year on such of its said
investment company taxable income as is distributed to its stockholders for such
year. Dividend payment dates for the Cumulative Income Shares shall be the 30th
days of January, April, July and October and payments thereof shall be made to
the holders of Cumulative Income Shares of record on the respective dates fixed
for the purpose by the Board of Directors. The Cumulative Income Shares shall
have no right to any further dividends.
Dividends on all Cumulative Income Shares shall commence to accrue and
shall be cumulative (as to said minimum dividends, whether or not earned, and,
as to such investment company taxable income computed as aforesaid, only to the
extent that such investment company taxable income is not deemed paid in
satisfaction of any arrearages of said minimum dividends) from and after the
date of initial issue and sale to underwriters for distribution to the public of
Cumulative Income Shares.
4C
<PAGE>
b. CALL OF CUMULATIVE INCOME SHARES. The Cumulative Income Shares shall
be called and retired on March 31, 1982 at a call price which shall consist of
$10 per share and a sum equal to all accrued and unpaid dividends thereon to
that date; provided that the holders of Cumulative Income Shares will have the
option, exercisable during the month of March, 1982, to receive said call price
in Capital Shares, which this Corporation will issue to them, taken at the net
asset value of such Capital Shares as of the close of business on March 31,
determined as herein provided, provided that the corporation is authorized by
majority vote of the Capital Shares to become an open-end investment company on
that date.
Notice of said call of Cumulative Income Shares shall be given by this
Corporation by mailing a copy of such notice, postage prepaid, not less than
60 days prior to March 31, 1982, to the holders of record of the Cumulative
Income Shares, addressed to them at their respective addresses appearing on the
books of this Corporation.
From and after March 31, 1982 (unless default shall be made by this
Corporation in providing monies for the payment of the call price), all
dividends upon the Cumulative Income Shares so called shall cease to accrue and,
from and after said date (unless default shall be made by this Corporation as
aforesaid) or, if this Corporation shall so elect, from and after the date
specified therefor in the notice of call (prior to March 31, 1982) on which this
Corporation shall
4D
<PAGE>
provide the monies for the payment of the call price (which for this purpose
only shall include accrued and unpaid dividends only to the date specified
therefor in the notice of call), all rights of the holders of the shares so
called, as stockholders of this Corporation, including without limitation, any
right to vote or participate in or in connection with any corporate act,
excepting only the right to receive the call price on the call date and the
right to convert into Capital Shares as herein provided, shall cease, and such
shares shall be deemed no longer outstanding. This Corporation may provide the
monies for the payment of the call price as aforesaid by depositing with a bank
or trust company doing business in Boston, Massachusetts, having a capital and
surplus of at least $2,000,000 any one or more of the following, namely, (a)
cash or certified or official bank checks in Boston Clearing House funds, (b)
obligations of the United States Government maturing on or prior to the call
date or (c) obligations maturing on or prior to the call date of a bank or trust
company doing business in Boston, Massachusetts having a capital and surplus of
at least $50,000,000. The making of any such deposit with any such bank or trust
company shall not relieve this Corporation of liability for payment of the call
price, but this Corporation shall be entitled to all monies so deposited which
shall remain unclaimed by the holders of Cumulative Income Shares so called at
the end of six (6) years after the call date, together with any interest on all
such monies so deposited which may have been allowed by said bank or trust
company with which the deposit was made, and such monies shall be paid over to
this Corporation, upon its demand, by said bank or trust company, without
liability to any holders or such Cumulative
4E
<PAGE>
Income Shares for so doing and also without the necessity of any notice to them.
To the extent that any monies so deposited for the call of such Cumulative
Income Shares shall exceed the amount required for the call of such shares
outstanding as of the call date by reason of the conversion of any such shares
into Capital Shares of the Corporation, such excess monies shall be paid back to
the Corporation, upon its demand, by said bank or trust company. The call of
Cumulative Income Shares may be effected by payment out of the net profits of
surplus of this Corporation or by the application of capital, all to the extent
and in the manner and at the time permitted by the laws of the Commonwealth of
Massachusetts.
4F
<PAGE>
c. PREFERENCE ON LIQUIDATION, ETC. To the extent provided herein the
Cumulative Income Shares shall be preferred over the Capital Shares as to both
earnings and assets. In the event this Corporation shall be liquidated,
dissolved or wound up, the holders of the Cumulative Income Shares shall be
entitled to payment from the assets of this Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any amount shall be paid to the holders of the Capital Shares, to an
amount equal to $10 in the event such liquidation, dissolution or winding up is
voluntary (and no more) and to an amount equal to $9.15 per share in the event
such liquidation, dissolution or winding up is involuntary (and no more),
together in either case with a sum equal to all accrued and unpaid dividends
thereon. If the assets of this Corporation available for distribution to the
holders of Cumulative Income Shares shall be insufficient to permit the payment
in full of the sums payable, as aforesaid, to the holders of such Cumulative
Income Shares upon such liquidation, dissolution or winding up, then all such
assets of this Corporation shall be distributed ratably among the holders of the
Cumulative Income Shares according to the amounts which they respectively would
be entitled to receive if such assets were sufficient to permit the payment in
full of said amounts. Neither the call by this Corporation of Cumulative Income
Shares in the manner heretofore provided nor the merger or consolidation of this
Corporation with or into any other
4G
<PAGE>
corporation or corporations, or the sale or transfer by this Corporation of all
or any part of its assets, shall be deemed to be a liquidation, dissolution or
winding up of this Corporation for the purposes of this paragraph. Holders of
Cumulative Income Shares shall not be entitled, upon the liquidation,
dissolution or winding up of this Corporation, to receive any amounts with
respect to such Cumulative Income Shares other than the amounts referred to in
this subdivision(c.)
d. RECEIPT OF CALL PRICE IN CAPITAL SHARES. The holders of Cumulative
Income Shares shall have the option, as aforesaid, upon the call of said shares
as heretofore provided, to receive, to the extent possible, the call price in
whole Capital Shares of the Corporation taken at net asset value as aforesaid,
any balance of such call price to be paid in cash.
In order to exercise such option, a holder of Cumulative Income Shares
shall surrender to the Corporation the certificate or certificates for such
shares, duly endorsed to the Corporation or in blank, together with a notice to
the Corporation in writing of the holder's election to exercise such option
stating therein the name or names in which he wishes the certificate or
certificates for Capital Shares of the Corporation to be issued. The Corporation
will, as soon as practicable after the call date, deliver to such holder, or his
nominee or nominees, a certificate or certificates for the number of full
Capital Shares to which he is entitled. Said option relating to such Cumulative
4H
<PAGE>
Income Shares may be exercised only after the
month of March, 1982.
2. CAPITAL SHARES
a. DIVIDENDS. So long as any Cumulative Income Shares are outstanding,
the holders of Capital Shares shall receive no dividends, except to the
limited extent that they may receive short-term capital gains as described
above. When all Cumulative Income Shares are no longer outstanding, dividends
may be declared and paid upon the Capital Shares when and as declared by the
Board of Directors out of funds legally available therefor.
b. DISTRIBUTION OF ASSETS In the event that this Corporation shall be
liquidated, dissolved or wound up, after there shall have been paid to or set
aside for the holders of the Cumulative Income Shares the full preferential
amounts to which they are entitled under the provisions hereof, the holders of
the Capital Shares shall be entitled to receive, pro rata and to the exclusion
of the Cumulative Income Shares, all of the remaining assets of this
Corporation available for distribution to its stockholders.
3. VOTING RIGHTS OF
CUMULATIVE INCOME SHARES AND CAPITAL SHARES
a. GENERAL. Except as hereinafter or, including, without
limitation, all rules, regulations and orders of the Federal Securities and
Exchange Commission, or in the By-Laws otherwise specifically provided, the
holders of Capital Shares and the holders of Cumulative Income Shares, voting
together as one class, shall be entitled to one vote per share in respect of all
matters which require a vote of security holders.
b. ELECTION OF DIRECTORS. The holders of Cumulative Income Shares,
voting as a class, shall be entitled to elect
4I
<PAGE>
two directors of the Corporation, provided, however, that if at any time
dividends on the Cumulative Income Shares shall be unpaid in an amount equal to
or exceeding two (2) full years' dividends thereon, the holders of the
Cumulative Income Shares, voting as a class, shall be entitled to elect a
majority of the directors of the Corporation and to continue to be so
represented until all dividends in arrears shall have been paid or otherwise
provided for, and in the event of any such arrearage the Board of Directors or
the President shall promptly call a meeting of the holders of the Cumulative
Income Shares for the purpose of enlarging the Board of Directors and electing
additional Directors to the extent necessary to provide such majority. Such
additional Directors shall hold office until the next annual meeting of the
stockholders or until all arrearages of such dividends shall have been paid or
otherwise provided for, whichever occurs earlier, and at succeeding annual
meetings of the stockholders held while any arrearages of such dividend exist,
the Cumulative Income Shares, voting as a class, shall continue to have the
right to elect additional directors so to hold office for such terms. The
holders of the Capital Shares, voting as a class, shall be entitled exclusively
to elect all directors of the Corporation other than those elected by the
holders of the Cumulative Income Shares in accordance with the foregoing
provisions.
4J
<PAGE>
c. OTHER VOTING RIGHTS.
SO LONG AS CUMULATIVE INCOME SHARES ARE OUTSTANDING:
(1) Anything to the contrary herein notwithstanding, the approval
of the holders of at least two-thirds of the Cumulative Income Shares or of the
Capital Shares outstanding and so affected, acting as a separate class, shall be
required to alter, change or repeal the voting powers, designation, preferences
or relative, participating, optional or other special rights of the Cumulative
Income Shares or of the Capital Shares, as the case may be, or the
qualifications, limitations or restrictions of such preferences and/or rights,
so as to affect the Cumulative Income Shares or of the Capital Shares, as the
case may be, directly and adversely.
(2) the Corporation shall not be voluntarily liquidated,
dissolved, wound up, merged or consolidated, and shall not sell all or
substantially all of its assets, without the approval of at least two-thirds of
the outstanding shares of both classes of stock, each acting as a separate
class.
(3) the approval of a majority of the Capital Shares outstanding
and of 100% of the Cumulative Income Shares outstanding, each acting as a
separate class, shall be required to amend or repeal the provisions of these
Articles of Organization requiring that as to 75% of its gross assets (taken at
cost), the Corporation may purchase only securities (except in the case of cash
equivalents) having specified minimum indicated yield on cost of at least 2.75%.
(4) The approval of a majority of the outstanding shares of the
class of stock so affected, acting as a separate class, shall be required for
the adoption of any plan of re-
4K
<PAGE>
organization adversely affecting such class.
(5) The approval of a majority of the outstanding shares of
both classes of stock, each acting as a separate class, shall be required to
approve any action requiring a vote of security holders as provided under
Section 13(a) of the Federal Investment Company Act of 1940 provided.
For purposes of these provisions a "majority" of the
outstanding shares of a class of stock shall, unless otherwise specifically
required by these Articles or by law, mean: (i) the lesser of: 67% or more of
the outstanding shares of such class represented at a meeting, provided that
more than 50% of the outstanding shares of the class are so represented; or (ii)
more than 50% of the outstanding shares of such class. "Class" shall include
both classes acting together as a single class where such classes so act.
4. GENERAL.
Except as otherwise specifically provided herein, the holders of Cumulative
Income Shares and Capital Shares, as such, shall have no right to subscribe for
or purchase any additional shares of capital stock or other securities issued by
this Corporation. All issues of shares of both classes shall be in equal numbers
and for equal amounts of cash consideration per share, and after the initial
issue and sale of shares to the public and so long as the Cumulative Income
Shares are outstanding, this Corporation shall not issue or sell any additional
Cumulative Income Shares and Capital Shares or series of shares of either class,
except that shares of both classes may be issued in equal number as a stock
dividend or in a stock split.
4L
<PAGE>
In these Articles except as otherwise specifically provided, the term
"outstanding" when used with reference to any shares of stock means that such
shares are issued and are held other than in the treasury of this Corporation.
So long as any Cumulative Income Shares are outstanding, this Corporation shall
not purchase or otherwise acquire for value any shares of its capital stock of
either class except upon any call or the Cumulative Income Shares or any
liquidation of this Corporation as herein provided. The shares of both classes
shall be transferable without restriction. When all Cumulative Income Shares
have been called and are no longer outstanding, this Corporation will then be an
open-end investment company, as defined in the Investment Company Act Of 1940,
subject to the approval of a majority (as defined in said Act) of the Capital
Shares and thereafter any holder of Capital Shares of this Corporation may by
presentation or a written request, together with his certificates, if any, for
such shares, duly endorsed, at the office of this corporation or at the
principal office of a custodian or transfer agent appointed by this Corporation,
redeem his shares for the net asset value thereof as determined in the manner
set forth herein. Redemptions as aforesaid, or voluntary purchases by the
corporation of its own stock, shall be made as provided in the By-Laws, and in
accordance with and subject to the requirements of applicable laws and
regulations.
4M
<PAGE>
OTHER LAWFUL PROVISIONS
The following additional provisions not inconsistent with law are hereby
established for the management, conduct and regulation of the business and
affairs of this Corporation, and for creating, limiting, defining, and
regulating the powers of this Corporation and of its Directors and stockholders:
The Board of Directors may, at any time and from time to time, contract for
management services with John P. Chase. Inc., a Massachusetts corporation, or
with such other association, corporation or firm as the Board of Directors may
deem desirable, every such contract to comply with such requirements and
restrictions as may be set forth in the By-Laws of this Corporation as from time
to time amended; and any such contract may contain such other terms
interpretative of or in addition to said requirements and restrictions as the
Board of Directors may determine. The fact that any or all of the directors,
officers or shareholders of this corporation are also shareholders, directors or
officers of John P. Chase, Inc. or may be shareholders, trustees directors or
officers of some other corporation, firm or association with which such a
management contract or any other contract may hereafter be made, shall not
6A
<PAGE>
affect the validity of any such contract or disqualify any officer or director
of this Corporation from voting upon or executing the same.
The Board of Directors may alter, amend or repeal the By-Laws of this
Corporation except with respect to any provision thereof which by law, by these
Articles of Organization or by the By-Laws requires actions by the
stockholders.
Assets of this Corporation may be held by or deposited with a bank or
trust company or other organization as custodian, pursuant to such requirements
as may be prescribed from time to time by the By-Laws of this corporation and by
the Board of Directors pursuant to said By-Laws.
The Board of Directors or any officer or officers or agent or agents of
this Corporation designated from time to time for this purpose by the Board
shall determine the value of all the assets of this Corporation at the close of
trading on the New York Stock Exchange on any day upon which such Exchange is
open for unrestricted trading or at such other times as the Board of Directors
shall designate, and the value of such assets so determined, less total
liabilities of this Corporation (exclusive of capital stock and surplus) and
less the aggregate
6B
<PAGE>
value or the Cumulative Income Shares, so long as said Cumulative Income Shares
are outstanding, which value shall be initially $9.15 per shares (the
involuntary liquidation value) and thereafter will be $9.15 per shares plus all
accrued and unpaid dividends (including any arrearages and accruals for current
income) plus increases which will be made on each April 1, commencing April 1,
1968, in equal increments so that as at April 1, 1981 and thereafter, said
amount shall equal $10 per share plus all accrued and unpaid dividends thereon,
divided by the number of Capital Shares outstanding shall be the net asset value
of a Capital Share until a new net asset value is determined by the Board or
such officers or agents. In determinations of net asset value all securities for
which market quotations are available shall be appraised at last sale price, or
if there has been no current sale, last current bid price (as nearly as can
conveniently be determined) and other securities and assets at fair value as
determined in good faith by or under authority of the Board in accordance with
accounting principles generally accepted at the time. In determinations of net
asset value, treasury stock shall be treated as if it were unissued. When net
asset value is determined as of a time other than the close of unrestricted
trading on the New York Stock Exchange, the Board or such officers or agents
may, but need not, determine such net asset value by adjusting the net asset
value determined as of the preceding close of such Exchange in such manner
(based upon changes in the market prices of selected securities or changes in
market averages or on other standard and readily ascertainable market data since
such close) as the Board or such officers or agents deem adequate to
6C
<PAGE>
reflect a fair approximate estimate of the probable change in net asset value
which has occurred since such close. In determining the net asset value the
Board or such officers or agents may include in liabilities such reserves for
taxes, estimated accrued expenses and contingencies in accordance with
accounting principles generally accepted at the time as the Board or such
officers or agents may in its or their best judgment deem fair and reasonable
under the circumstances.
The By-Laws of this Corporation, as from time to time amended, may
prescribe limitations upon the borrowing of money and pledging of assets by this
Corporation.
Any person (and his heirs, executors and administrators) may be
indemnified by the Corporation against reasonable costs and expenses incurred by
him in connection with any action, suit or proceeding to which he may be made a
party by reason of his being or having been a director, officer or employee of
this Corporation, or of another corporation if this Corporation requested him to
serve as such, except in relation to any actions, suits or proceedings in which
he has been adjudged liable because of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office. In the absence of an adjudication which expressly absolves such person
of liability to the Corporation or its stockholders for willful misfeasance, bad
faith, gross negligence and reckless disregard of the duties involved in the
conduct of his office, or in the event of a settlement, each such
6D
<PAGE>
person (and his heirs, executors and administrators) may be indemnified by the
Corporation against payments made, including reasonable costs and expenses,
provided that such indemnity shall be conditioned upon the prior determination
by a resolution of two-thirds of those members of the Board of Directors of the
Corporation who are not involved in the action, suit or proceeding that such
person has no liability by reason of willful misfeasance, bad faith, gross
negligence, negligence or reckless disregard of the duties involved in the
conduct of his office, and provided further that if majority of the members of
the Board of Directors of the Corporation are involved in the action, suit or
proceeding, such determination shall have been made by a written opinion of
independent counsel. Amounts paid in settlement shall not exceed costs, fees and
expenses which would have been reasonably incurred if the action, suit or
proceeding had been litigated to a conclusion. Such a determination by the Board
of Directors, or by independent counsel, and the payments of amounts by the
Corporation on the basis thereof shall not prevent a stockholder from
challenging such indemnification
6E
<PAGE>
by appropriate legal proceedings on the grounds that the person indemnified was
liable to the Corporation or its security holders by reason of willful
misfeasance, bad faith, gross negligence, negligence or reckless disregard of
the duties involved in the conduct of his office. The foregoing rights and
indemnification shall not be exclusive of any other rights to which such person
may be entitled according to law.
John P. Chase, Inc. and any other association, corporation, person, firm
or other entity with which this corporation may have any such contract for
management services may perform management and any other services for any other
person, association, corporation, firm or other entity pursuant to any contract
or otherwise, and take any action or do anything in connection therewith or
related thereto. The name of this Corporation is understood to be used by this
Corporation with the consent of John P. Chase, Inc. which continues to control
the use of such name, and such use by this Corporation shall in no way prevent
John P. Chase, Inc. or any of its successors or assigns from using or permitting
the use of, the words "Income and Capital Shares, Inc." or any combination of
them, along or with any other word or words, for, by or in connection with any
other entity or business, other than this Corporation or its business, whether
or not the
6F
<PAGE>
same directly or indirectly competes or conflicts with this corporation on or
its business in any manner.
Meetings of stockholders may be held outside the Commonwealth of
Massachusetts but within the United States, if the By-Laws so provide. The
books of this Corporation may be kept (subject to any provision contained in the
statutes) outside the Commonwealth of Massachusetts but within the United
States, at such place or places as may be designed from time to time by the
Board of Directors or in the By-Laws of this Corporation. Elections of Directors
need not be by ballot unless the By-Laws of this Corporation shall so provide.
Except as may be otherwise provided herein, this Corporation reserves
the right to amend, alter, change or repeal any provision contained in these
Articles of Organization, in the manner now or hereafter prescribed by statute,
and all rights conferred upon stockholders herein are granted subject to this
reservation.
6G
<PAGE>
INCOME AND CAPITAL SHARES, INC.
CERTIFICATE AS TO ARTICLES OF ORGANIZATION
The undersigned hereby certifies that he is the officer of Income and
Capital Shares, Inc. set forth under his signature below; that no amendment to
the Articles of Organization of said Corporation has been filed subsequent to
the filing of the Restated Articles of Organization on March 21, 1967; and that
no further amendment to the Articles of Organization of said Corporation are
pending on the date hereof
Witness my hand and the seal of said Corporation this today of September,
1973.
------------------------------------------
Assistant Clerk
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
RESTATED ARTICLES OF ORGANIZATION
GENERAL LAWS, CHAPTER 156B, SECTION 74
===================================================
I hereby approve the within restated articles of organization and, the
filing fee in the amount of $901.00 having been paid, said articles are deemed
to have been filed with me this 21st day of March 1967.
/s/ Kevin H. White
Kevin H. White
Secretary of State
State House, Boston, Mass.
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT
TO: Paul Beatty c/o Sullivan & Worcester
----------------------------------------------
225 Franklin Street
----------------------------------------------
Boston, MA 02109
----------------------------------------------
Telephone: 423-7474
------------------------------------
8I
Exhibit 1.3
Amendment to Restated Articles of Organization
<PAGE>
The Commonwealth of Massachusetts
_____________ MICHAEL JOSEPH CONNOLLY
Examiner Secretary of State
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION
GENERAL LAWS, CHAPTER 156B, SECTION 72 NO. 04-2400797
-----------
This certificate must be submitted to the Secretary of
the Commonwealth within sixty days after the date of the vote
of stockholders adopting the amendment. The fee for filing this
certificate is prescribed by General Laws, Chapter 156B,
Section 114. Make check payable to the Commonwealth of
Massachusetts.
_____________ We, Philip R. McLoughlin, Vice President and Virginia Spencer,
Name Clerk of INCOME AND CAPITAL SHARES, INC., located at Sullivan
Approved & Worcester, c/o Virginia Spencer, One Post Office Square,
Boston, MA 02109 do hereby certify that the following
amendment to the articles of organization of the corporation
was duly adopted at a meeting held on March 31, 1982, by
vote of:
__1,154,881__ shares of ___Capital Stock___ out of
__the 1,510,011__ shares outstanding,
(Class of Stock)
_____________ shares of _______________ out of _______________
shares outstanding, and
(Class of Stock)
_____________ shares of _______________ out of _______________
shares outstanding,
(Class of Stock)
CROSS OUT being at least a majority of each type, class or
INAPPLI- series outstanding and entitled to vote
CABLE thereon:(1)
CLAUSE [begin strike thru text]
being at least two thirds of each type, class or
series outstanding and entitled to vote thereon
and of each type, class or series of stock whose
rights are adversely affected thereby:
[end strike thru text] (2)
VOTED: That Article 1 of the Fund's Restated
Articles of Organization be, and it
hereby is, amended to read as follows:
"The name by which the corporation shall
be know is P-C Capital Fund, Inc."
C [ ] (1) For amendments adopted pursuant to Chapter 156B, Section 70.
P [ ]
M [ ] (2) For amendments adopted pursuant to Chapter 156B, Section 71.
Note: If the space provided under any Amendment or item on this
form is insufficient, additions shall be set forth on separate
8 1/2 x 11 sheets of paper leaving a left-hand margin of at least
1 inch for binding. Additions to more than one Amendment may be
continued on a single sheet so long as each Amendment requiring
each such addition is clearly indicated.
___________
P.C.
<PAGE>
The foregoing amendment will become effective when these articles of amendment
are filed in accordance with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote adopting the amendment, a
later effective date not more than thirty days after such filing, in which event
the amendment will become effective on such later date.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed
our names this thirty-first day of March, in the year 1982.
/s/ Philip R. McLoughlin, Vice President
- ------------------------------------------------------------
/s/ Virginia Spencer, Clerk
- ------------------------------------------------------------
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
=================================================
I hereby approve the within articles of amendment and, the filing fee in
the amount of $75.00 having been paid, said articles are deemed to have been
filed with me this 31st day of March, 1982.
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT
TO: Ms. Virginia Spencer c/o Sullivan & Worcester
---------------------------------------------------
One Post office Square
---------------------------------------------------
Boston, MA 02109
---------------------------------------------------
Telephone: 338-2827
-----------------------------------------
Exhibit 1.4
Amendment to Restated Articles of Organization
<PAGE>
The Commonwealth of Massachusetts
_____________ OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
Examiner MICHAEL JOSEPH CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION
GENERAL LAWS, CHAPTER 156B, SECTION 72 NO. 04-2400797
-----------
This certificate must be submitted to the Secretary of
the Commonwealth within sixty days after the date of the vote
of stockholders adopting the amendment. The fee for filing this
certificate is prescribed by General Laws, Chapter 156B,
Section 114. Make check payable to the Commonwealth of
Massachusetts.
We, Robert Chesek, President and Virginia Spencer Clerk,
_____________ of P-C CAPITAL FUND, INC., located at Sullivan & Worcester,
Name c/o Virginia Spencer, One Post Office Square, Boston, MA 02109
Approved do hereby certify that the following amendment to the articles
of organization of the corporation was duly adopted at a
meeting held on July 2, 1986, by vote of:
__252,006.690__ shares of ___Capital Stock___ out of
__450,300.186__ shares outstanding,
(Class of Stock)
_____________ shares of _______________ out of _______________
shares outstanding, and
(Class of Stock)
_____________ shares of _______________ out of _______________
shares outstanding,
(Class of Stock)
CROSS OUT being at least a majority of each type, class or
INAPPLI- series outstanding and entitled to vote
CABLE thereon:(1)
CLAUSE [begin strike thru text]
being at least two thirds of each type, class or
series outstanding and entitled to vote thereon
and of each type, class or series of stock whose
rights are adversely affected thereby:
[end strike thru text] (2)
VOTED: That Article 1, as heretofore amended, of
the Fund's Restated Articles of
Organization be, and it hereby is, amended
to read as follows:
"The name by which the corporation shall
be know is Phoenix Total Return Fund, Inc."
C [ ] (1) For amendments adopted pursuant to Chapter 156B, Section 70.
P [ ]
M [ ] (2) For amendments adopted pursuant to Chapter 156B, Section 71.
Note: If the space provided under any Amendment or item on this
form is insufficient, additions shall be set forth on separate
8 1/2 x 11 sheets of paper leaving a left-hand margin of at least
1 inch for binding. Additions to more than one Amendment may be
continued on a single sheet so long as each Amendment requiring
each such addition is clearly indicated.
_________
P.C.
<PAGE>
To CHANGE the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:
The total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ------------------------------------- -------------------------------------
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
- ------------------------------------- -------------------------------------
COMMON: COMMON:
- ------------------------------------- -------------------------------------
PREFERRED: PREFERRED:
- ------------------------------------- -------------------------------------
CHANGE the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ------------------------------------- -------------------------------------
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
- ------------------------------------- -------------------------------------
COMMON: COMMON:
- ------------------------------------- -------------------------------------
PREFERRED: PREFERRED:
- ------------------------------------- -------------------------------------
<PAGE>
The foregoing amendment will become effective when these articles of amendment
are filed in accordance with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote adopting the amendment, a
later effective date not more than thirty days after such filing, in which event
the amendment will become effective on such later date.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed
our names this seventh day of July, in the year 1986.
/s/ Robert Chesek, President
- ----------------------------------------------------
/s/ Virginia Spencer, Clerk
- ----------------------------------------------------
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
==================================================
I hereby approve the within articles of amendment and, the filing fee in
the amount of $75.00 having been paid, said articles are deemed to have been
filed with me this 9th day of July, 1986.
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT
TO: Ms. Virginia Spencer c/o Sullivan & Worcester
-----------------------------------------------------
One Post office Square
-----------------------------------------------------
Boston, MA 02109
-----------------------------------------------------
Telephone: 338-2827
-----------------------------------------
Exhibit 1.5
Amendment to Restated Articles of Organization
<PAGE>
The Commonwealth of Massachusetts
_____________ OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
Examiner MICHAEL JOSEPH CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION
GENERAL LAWS, CHAPTER 156B, SECTION 72 NO. 04-2400797
-----------
This certificate must be submitted to the Secretary of
the Commonwealth within sixty days after the date of the vote
of stockholders adopting the amendment. The fee for filing this
certificate is prescribed by General Laws, Chapter 156B,
Section 114. Make check payable to the Commonwealth of
Massachusetts.
_____________ We, Robert Chesek, President and Virginia Spencer, Clerk of
Name Phoenix Total Return Fund, Inc. located at Sullivan &
Approved Worcester, c/o Virginia Spencer, One Post Office Square,
Boston, MA 02109 do hereby certify that the following
amendment to the articles of organization of the corporation
was duly adopted at a meeting held on July 2, 1986, by vote of:
__238,856.529__ shares of ___Capital Stock___ out of
__450,330.186__ shares outstanding,
(Class of Stock)
_____________ shares of _______________ out of _______________
shares outstanding, and
(Class of Stock)
_____________ shares of _______________ out of _______________
shares outstanding,
(Class of Stock)
CROSS OUT being at least a majority of each type, class or
INAPPLI- series outstanding and entitled to vote
CABLE thereon:(1)
CLAUSE [begin strike thru text]
being at least two thirds of each type, class or
series outstanding and entitled to vote thereon
and of each type, class or series of stock whose
rights are adversely affected thereby:
[end strike thru text] (2)
VOTED: That Article 3 of the Fund's Restated
Articles of Organization be, and it
hereby is, amended to change the total
number of shares, $1 par value, which the
Fund is authorized to issue (i) by
eliminating the authorized number of
preferred (Cumulative Income) shares, none
of which are outstanding, and (ii) by
increasing the authorized number of common
(Capital) shares, which are being renamed
Common Stock, from 3,521,000 to 5,000,000.
C [ ]
P [ ]
M [ ] (1) For amendments adopted pursuant to Chapter 156B, Section 70.
(2) For amendments adopted pursuant to Chapter 156B, Section 71.
Note: If the space provided under any Amendment or item on this
form is insufficient, additions shall be set forth on separate
8 1/2 x 11 sheets of paper leaving a left-hand margin of at least
1 inch for binding. Additions to more than one Amendment may be
continued on a single sheet so long as each Amendment requiring
each such addition is clearly indicated.
_________
P.C.
<PAGE>
To CHANGE the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:
The total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ------------------------------------- -------------------------------------
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
- ------------------------------------- -------------------------------------
COMMON: COMMON: 3,521,000 $1
(Capital Shares)
- ------------------------------------- -------------------------------------
PREFERRED: PREFERRED:
(Cumulative 1,761,000 $1
Income Shares)
- ------------------------------------- -------------------------------------
CHANGE the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ------------------------------------- -------------------------------------
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
- ------------------------------------- -------------------------------------
COMMON: COMMON: 5,000,000 $1
- ------------------------------------- -------------------------------------
PREFERRED: PREFERRED:
- ------------------------------------- -------------------------------------
<PAGE>
The foregoing amendment will become effective when these articles of amendment
are filed in accordance with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote adopting the amendment, a
later effective date not more than thirty days after such filing, in which event
the amendment will become effective on such later date.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed
our names this eighteenth day of July, in the year 1986.
/s/ Robert Chesek, President
- ----------------------------------------------------
/s/ Virginia Spencer, Clerk
- ----------------------------------------------------
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
==================================================
I hereby approve the within articles of amendment and, the filing fee in
the amount of $814.50 having been paid, said articles are deemed to have been
filed with me this 22th day of July, 1986.
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT
TO: Ms. Virginia Spencer c/o Sullivan & Worcester
-----------------------------------------------------
One Post office Square
-----------------------------------------------------
Boston, MA 02109
-----------------------------------------------------
Telephone: 338-2827
-----------------------------------------
Exhibit 1.6
Amendment to Restated Articles of Organization
<PAGE>
The Commonwealth of Massachusetts
_____________ OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
Examiner MICHAEL JOSEPH CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION
GENERAL LAWS, CHAPTER 156B, SECTION 72 NO. 04-2400797
-----------
This certificate must be submitted to the Secretary of
the Commonwealth within sixty days after the date of the vote
of stockholders adopting the amendment. The fee for filing this
certificate is prescribed by General Laws, Chapter 156B,
Section 114. make check payable to the Commonwealth of
Massachusetts.
_____________ We, Robert Chesek, President and Virginia Spencer, Clerk of
Name Phoenix Total Return Fund, Inc. located at Sullivan &
Approved Worcester, c/o Virginia Spencer, One Post Office Square,
Boston, MA 02109 do hereby certify that the following
amendment to the articles of organization of the corporation
was duly adopted at a meeting held on August 20, 1987, by
vote of:
__590,150.351__ shares of ___Common Stock___ out of
__1,162,928.440__ shares outstanding,
(Class of Stock)
_____________ shares of _______________ out of _______________
shares outstanding, and
(Class of Stock)
_____________ shares of _______________ out of _______________
shares outstanding,
(Class of Stock)
CROSS OUT being at least a majority of each type, class or
INAPPLI- series outstanding and entitled to vote
CABLE thereon:(1)
CLAUSE [begin strike thru text]
being at least two thirds of each type, class or
series outstanding and entitled to vote thereon
and of each type, class or series of stock whose
rights are adversely affected thereby:
[end strike thru text] (2)
VOTED: That Article 3, as heretofore amended, of
the Fund's Restated Articles of
Organization be, and it hereby is, further
amended to increase the authorized number
of shares of Common Stock, $1 par value,
from 5,000,000 to 15,000,000.
C [ ]
P [ ]
M [ ] (1) For amendments adopted pursuant to Chapter 156B, Section 70.
(2) For amendments adopted pursuant to Chapter 156B, Section 71.
Note: If the space provided under any Amendment or item on this
form is insufficient, additions shall be set forth on separate
8 1/2 x 11 sheets of paper leaving a left-hand margin of at least
1 inch for binding. Additions to more than one Amendment may be
continued on a single sheet so long as each Amendment requiring
each such addition is clearly indicated.
_________
P.C.
<PAGE>
To CHANGE the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:
The total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ------------------------------------- -------------------------------------
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
- ------------------------------------- -------------------------------------
COMMON: COMMON: 15,000,000 $1
- ------------------------------------- -------------------------------------
PREFERRED: PREFERRED:
- ------------------------------------- -------------------------------------
CHANGE the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ------------------------------------- -------------------------------------
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
- ------------------------------------- -------------------------------------
COMMON: COMMON: 50,000,000 $1
- ------------------------------------- -------------------------------------
PREFERRED: PREFERRED:
- ------------------------------------- -------------------------------------
<PAGE>
The foregoing amendment will become effective when these articles of amendment
are filed in accordance with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote adopting the amendment, a
later effective date not more than thirty days after such filing, in which event
the amendment will become effective on such later date.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed
our names this tenth day of September, in the year 1987.
/s/ Robert Chesek, President
- ----------------------------------------------------
/s/ Virginia Spencer, Clerk
- ----------------------------------------------------
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
==================================================
I hereby approve the within articles of amendment and, the filing fee in
the amount of $5,000.00 having been paid, said articles are deemed to have been
filed with me this 15th day of September, 1987.
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT
TO: Ms. Virginia Spencer c/o Sullivan & Worcester
-----------------------------------------------------
One Post office Square
-----------------------------------------------------
Boston, MA 02109
-----------------------------------------------------
Telephone: 338-2827
-----------------------------------------
Exhibit 1.7
Amendment to Restated Articles of Organization
<PAGE>
The Commonwealth of Massachusetts
_____________ OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
Examiner MICHAEL JOSEPH CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION
GENERAL LAWS, CHAPTER 156B, SECTION 72 NO. 04-2400797
-----------
We Philip Stekel, Vice President and Virginia Spencer, Clerk of
Phoenix Total Return Fund, Inc. located at: 101 Munson Street
Greenfield, MA 01301 do hereby certify that these ARTICLES OF
AMENDMENT affecting Articles NUMBERED: 3 of the Articles of
Organization were duly adopted at a meeting held on June 24,
1994, by vote of:
_____________
Name
Approved
__6,680,376.871__ shares of ___Common Stock___ out of
__13,273,065.426__ shares outstanding,
type, class & series, (if any)
_____________ shares of _______________ out of _______________
shares outstanding, and
type, class & series, (if any)
_____________ shares of _______________ out of _______________
shares outstanding,
type, class & series, (if any)
CROSS OUT being at least a majority of each type, class or
INAPPLI- series outstanding and entitled to vote
CABLE thereon:(1)
CLAUSE [begin strike thru text]
being at least two thirds of each type, class or
series outstanding and entitled to vote thereon
and of each type, class or series of stock whose
rights are adversely affected thereby:
[end strike thru text] (2)
VOTED: That Article 3, as heretofore amended, of
the Fund's Restated Articles of
Organization be, and it hereby is, further
amended to increase the authorized number
of shares of Common Stock, $1 par value,
from 15,000,000 to 50,000,000.
(1) For amendments adopted pursuant to Chapter 156B, Section 70.
C [ ] (2) For amendments adopted pursuant to Chapter 156B, Section 71.
P [ ]
M [ ] Note: If the space provided under any Amendment or item on this
R.A. [ ] form is insufficient, additions shall be set forth on separate
8 1/2 x 11 sheets of paper leaving a left-hand margin of at least
1 inch for binding. Additions to more than one Amendment may be
continued on a single sheet so long as each Amendment requiring
each such addition is clearly indicated.
_________
P.C.
<PAGE>
To CHANGE the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:
The total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ------------------------------------- -------------------------------------
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
- ------------------------------------- -------------------------------------
COMMON: COMMON: 15,000,000 $1
- ------------------------------------- -------------------------------------
PREFERRED: PREFERRED:
- ------------------------------------- -------------------------------------
CHANGE the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ------------------------------------- -------------------------------------
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
- ------------------------------------- -------------------------------------
COMMON: COMMON: 50,000,000 $1
- ------------------------------------- -------------------------------------
PREFERRED: PREFERRED:
- ------------------------------------- -------------------------------------
<PAGE>
The foregoing amendment will become effective when these articles of amendment
are filed in accordance with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote adopting the amendment, a
later effective date not more than thirty days after such filing, in which event
the amendment will become effective on such later date. EFFECTIVE DATE:
- -----------------------------------------
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed
our names this 30th day of June, in the year 1994.
/s/ Philip Stekel, Vice President
- ----------------------------------------------------
/s/ Virginia Spencer, Clerk
- ----------------------------------------------------
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
==================================================
I hereby approve the within articles of amendment and, the filing fee in
the amount of $35,000.00 having been paid, said articles are deemed to have been
filed with me this 5th day of July, 1994.
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT
TO: Ms. Virginia Spencer c/o Sullivan & Worcester
-----------------------------------------------------
One Post office Square
-----------------------------------------------------
Boston, MA 02109
-----------------------------------------------------
Telephone: 338-2827
-----------------------------------------
Exhibit 1.8
Amendment to Restated Articles of Organization
<PAGE>
The Commonwealth of Massachusetts
_____________ OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
Examiner MICHAEL JOSEPH CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION
GENERAL LAWS, CHAPTER 156B, SECTION 72 NO. 04-2400797
-----------
We Philip R. McLoughlin, President and Virginia Spencer, Clerk
of Phoenix Total Return Fund, Inc. located at: 101 Munson Street
Greenfield, MA 01301 do hereby certify that these ARTICLES OF
AMENDMENT affecting Articles NUMBERED: 3 and 4 of the Articles
of Organization were duly adopted at a meeting held on
September 30, 1994, by vote of:
_____________
Name
Approved
__8,881,847.016__ shares of ___Common Stock___ out of
__13,273,065.426__ shares outstanding,
type, class & series, (if any)
_____________ shares of _______________ out of _______________
shares outstanding, and
type, class & series, (if any)
_____________ shares of _______________ out of _______________
shares outstanding,
type, class & series, (if any)
CROSS OUT [begin strike thru text]
INAPPLI- being at least a majority of each type, class or
CABLE series outstanding and entitled to vote thereon:
CLAUSE [end strike thru text](1)
being at least two-thirds of each type, class or
series outstanding and entitled to vote thereon
and of each type, class or series of stock whose
rights are adversely affected thereby:(2)
See Attached
C [ ] (1) For amendments adopted pursuant to Chapter 156B, Section 70.
P [ ]
M [ ] (2) For amendments adopted pursuant to Chapter 156B, Section 71.
R.A. [ ]
Note: If the space provided under any Amendment or item on this
form is insufficient, additions shall be set forth on separate
8 1/2 x 11 sheets of paper leaving a left-hand margin of at least
1 inch for binding. Additions to more than one Amendment may be
continued on a single sheet so long as each Amendment requiring
each such addition is clearly indicated.
_________
P.C.
<PAGE>
VOTED: That Articles 3 and 4, as heretofore amended, of the Fund's Restated
Articles of Organization be, and hereby are amended to read as
follows:
Article 3. The total number of shares and the par value, if any, of each class
of stock which the corporation is authorized to issue is as follows:
- -------------------------------------------------------------------------------
WITHOUT PAR VALUE WITH PAR VALUE
- -------------------------------------------------------------------------------
CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES PAR VALUE
- -------------------------------------------------------------------------------
Class A Common Stock 50,000,000 $1 per share
- -------------------------------------------------------------------------------
Common Stock 50,000,000 $1 per share
- -------------------------------------------------------------------------------
Article 4. If more than one class is authorized, a description of each of the
different classes of stock with, if any, the preferences, voting
powers, qualifications, special or relative rights or privileges as
to each class thereof and any series now established:
The Board of Directors is authorized to designate one or more classes of Common
Stock in addition to the Class A Common Stock, $1 par value, and one or more
series of any class of Common Stock and, before the issuance thereof, to
determine the preferences, voting powers, qualifications and special or relative
rights or privileges thereof, and the relations thereof to existing or future
classes or series in any and all respects, including, without limitation,
preferential or limited dividend, distribution, redemption and liquidation
rights and preferences, limitations and any other differences regarding the
allocation of expenses of the Fund to or among such classes or series thereof,
and voting rights or the expansion, limitation or denial thereof or the granting
thereof to any class or series to vote together with any one or more other
classes or series, and any other matter affecting any class or series thereof,
all of any of which may be more or less favorable to any such class or series
thereof in relation to the Class A Common Stock or any other class or series of
Common Stock then or thereafter authorized or outstanding.
<PAGE>
To CHANGE the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:
The total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ------------------------------------- -------------------------------------
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
- ------------------------------------- -------------------------------------
COMMON: COMMON: 50,000,000 $1
- ------------------------------------- -------------------------------------
PREFERRED: PREFERRED:
- ------------------------------------- -------------------------------------
CHANGE the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ------------------------------------- -------------------------------------
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
- ------------------------------------- -------------------------------------
COMMON: COMMON: 50,000,000 $1
Class A 50,000,000 $1
Common Stock
- ------------------------------------- -------------------------------------
PREFERRED: PREFERRED:
- ------------------------------------- -------------------------------------
<PAGE>
The foregoing amendment will become effective when these articles of amendment
are filed in accordance with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote adopting the amendment, a
later effective date not more than thirty days after such filing, in which event
the amendment will become effective on such later date. EFFECTIVE DATE:
- -----------------------------------------
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed
our names this twelfth day of October, in the year 1994.
/s/ Philip R. McLoughlin, President
- ----------------------------------------------------
/s/ Virginia Spencer, Clerk
- ----------------------------------------------------
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
I hereby approve the within articles of amendment and, the filing fee in
the amount of $ having been paid, said articles are deemed to have been
filed with me this day of , 19___.
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT
TO: Ms. Virginia Spencer c/o Sullivan & Worcester
-----------------------------------------------------
One Post Office Square
-----------------------------------------------------
Boston, MA 02109
-----------------------------------------------------
Telephone: 338-2827
-----------------------------------------
Exhibit 1.9
Amendment to Restated Articles of Organization
<PAGE>
The Commonwealth of Massachusetts
____________ WILLIAM FRANCIS GALVIN
Examiner Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION
(GENERAL LAWS, CHAPTER 156B, SECTION 72) NO. 04-2400797
----------
_____________ We, Philip R. McLoughlin, President and Thomas N. Steenburg,
Name Assistant Clerk of Phoenix Total Return Fund, Inc. located
Approved at: 101 Munson Street Greenfield, MA certify that these
Articles of Amendment affecting articles numbered: 1 of the
Articles of Organization were duly adopted at a meeting held
on November 8, 1996, by vote of:
__10,464,423.710__ shares of __Common Stock______ of
__20,088,258.6660__ shares outstanding,
(type, class & series, if any)
_____________ shares of _________________ out of _______________
shares outstanding, and
(type, class & series, if any)
_____________ shares of _________________ out of _______________
shares outstanding,
(type, class & series, if any)
C [ ] CROSS OUT (1)being at least a majority of each type, class or
P [ ] INAPPLI- series outstanding and entitled to vote thereon:
M [ ] CABLE
R.A. [ ] CLAUSE (2)[begin strike thru text]
being at least two thirds of each type, class or
series outstanding and entitled to vote thereon
and of each type, class or series of stock whose
rights are adversely affected thereby:
[end strike thru text]
Change name to: Phoenix Strategic Allocation Fund, Inc.
---------------------------------------
*Delete the inapplicable words. **Delete the inapplicable clause.
(1) For amendments adopted pursuant to Chapter 156B, Section 70.
(2) For amendments adopted pursuant to Chapter 156B, Section 71.
___________ Note: If the space provided under any article or item on this
P.C. form is insufficient, additions shall be set forth on one side
only of separate 8 1/2 x 11 sheets of paper leaving a left margin
of at least 1 inch. Additions to more than one article may be
made on a single sheet so long as each article requiring each
addition is clearly indicated.
<PAGE>
To CHANGE the number of shares and par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill the
following:
The total PRESENTLY authorized is:
- ------------------------------------------------------------------------------
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ------------------------------------------------------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- ------------------------------------------------------------------------------
Common: Common:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Preferred: Preferred:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
CHANGE the total authorized to:
- ------------------------------------------------------------------------------
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ------------------------------------------------------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- ------------------------------------------------------------------------------
Common: Common:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Preferred: Preferred:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
The foregoing amendment(s) will become effective when these Articles of
Amendment are filed in accordance with General Laws, Chapter 156B, Section 6
unless these articles specify, in accordance with the vote adopting the
amendment, a LATER effective date not more than THIRTY DAYS after such filing,
in which event the amendment will become effective on such later date.
Later effective date:__________________________________
SIGNED UNDER THE PENALTIES OF PERJURY, this 8th day of November, 1996.
/s/ Philip R. McLoughlin, President
- -------------------------------------------------------
/s/ Thomas N. Steenburg, Assistant Clerk
- -------------------------------------------------------
*Delete the inapplicable words.
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
-------------------------------------------------------
I hereby approve the within Articles of Amendment and,
the filing fee in the of $100.00 having been paid, said
articles are deemed to have been filed with me this
14th day of November 1996.
EFFECTIVE DATE:_____________________________
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
Photocopy of document to be sent to:
TO: Noreen O'Connell
-------------------------------------------
c/o Phoenix Home Life
-------------------------------------------
One American Row
-------------------------------------------
Hartford, CT 061115
-------------------------------------------
Telephone: 860-403-5385
-----------------------------
Exhibit 2
By-Laws
<PAGE>
BY-LAWS
OF
PHOENIX TOTAL RETURN FUND, INC.
ARTICLE I
ARTICLES OF ORGANIZATION
The name and purposes of the Corporation shall be as set forth in the
Articles of Organization. These By-Laws, the powers of the Corporation and of
its Directors and stockholders, and all matters concerning the conduct and
regulation of the business of the Corporation shall be subject to such
provisions in regard thereto, if any, as are set forth in the Articles of
Organization: and the Articles of Organization, as from time to time amended,
are hereby made a part of these By-Laws. All references in these By-Laws to the
Articles of Organization shall be construed to mean the Articles of Organization
of the Corporation as from time to time amended.
ARTICLE II
ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of stockholders shall be held on the fourth Tuesday in
April in each year at such hour as may be fixed by vote of the Board of
Directors or, if the Board shall not fix such hour, as may be determined by the
President and set forth in the notice thereof, unless that day be a legal
holiday at the site of the meeting, in which case the meeting shall be held at
the same hour on the next succeeding business day at the site of the meeting.
Purposes for which an annual meeting is to be held, in addition to those
prescribed by law, by the Articles of Organization and by these By-Laws, may be
specified by the President, or by a vote of a majority of the Directors then in
office, or by one or more stockholders who are entitled to vote and who hold in
the aggregate at least ten percent (10%) of the capital stock entitled to vote
at the meeting.
If such annual meeting is omitted on the day herein provided therefor, a
special meeting of stockholders may be held in place thereof and any business
transacted or elections held at such special meeting shall have the same effect
as if transacted or held at the annual meeting, and, in such case, all
references in these By-Laws, except in this Article II and in Article IV, to the
annual meeting of stockholders shall be deemed to refer to such special meeting.
Any such special meeting shall be called, and the purposes thereof shall be
specified in the notice thereof, as provided in Article III.
ARTICLE III
SPECIAL MEETINGS OF STOCKHOLDERS
A special meeting of stockholders may be called at any time by the
President or by a majority of the Directors then in office. A special meeting of
stockholders shall be called by the Clerk, or in the case of the death, absence,
incapacity or refusal of the Clerk, by any other officer, upon written
application of one or more stockholders who hold in the aggregate at least ten
percent (10%) of the
<PAGE>
capital stock entitled to vote at the meeting. Such call shall state the time,
place and purpose of the meeting.
ARTICLE IV
PLACE OF STOCKHOLDERS' MEETINGS
The annual meeting of stockholders and any special meeting of stockholders
by whomever called, shall be held at the principal office of the Corporation in
Massachusetts, or at such other place in Massachusetts or within the continental
limits of the United States of America as may be determined by the Board of
Directors (or, in the event such meeting shall have been called upon the
application of stockholders, by such stockholders) and stated in the notice
thereof. Any adjourned session of and annual or special meeting of stockholders
shall be held within the continental limits of the United States at such place
as is designated in the vote of adjournment.
ARTICLE V
NOTICE OF STOCKHOLDERS' MEETINGS
A written notice of each annual or special meeting of stockholders, stating
the place, date and hour thereof, and the purpose or purposes for which the
meeting is to be held, shall be given at least seven (7) days before the meeting
to each stockholder entitled to vote thereat, and to each stockholder who, under
the Articles of Organization or these By-Laws, is entitled to such notice, by
leaving such notice with him or at his residence, or usual place of business, or
by mailing it, postage prepaid, addressed to such stockholder at his address as
it appears in the records of the Corporation. Such notice shall be given by the
Clerk, by any other officer, or by a person designated either by the Clerk or by
the person or persons calling the meeting, or by the Board of Directors. No
notice of the time, place or purposes of any annual or special meeting of
stockholders shall be required to be given to a stockholder if a written waiver
of such notice is executed before or after the meeting by such stockholder, or
by his attorney thereunto authorized, and filed with the records of the meeting.
ARTICLE VI
QUORUM OF STOCKHOLDERS
At any meeting of stockholders, a quorum for the election of any Director
or officer, or for the consideration of any question, shall consist of a
majority in interest of all stock issued, outstanding and entitled to vote at
such election, or upon such question, respectively, except that if two or more
classes of stock are entitled to vote as separate classes upon any question,
then, in the case of each such class, a quorum for the consideration of such
question shall consist of a majority in interest of all stock of that class
issued, outstanding and entitled to vote; and except in any case where a larger
quorum is required by law, by the Articles of Organization or by these By-Laws.
Stock owned by the Corporation, if any, shall not be deemed outstanding for this
purpose. In any case, any meeting
2
<PAGE>
may be adjourned from time to time by a majority of the votes properly cast
upon the question, whether or not a quorum is present, and the meeting may be
held as adjourned without further notice.
When a quorum is present at any meeting, a plurality of the votes properly
cast for any office shall elect to such office, except where a larger vote is
required by law, by the Articles of Organization or by these By-Laws, and a
majority of the votes properly cast upon any other question (or if two or more
classes of stock are entitled to vote as separate classes upon such question,
then, in the case of each such class, a majority of the votes of such class
properly cast upon the question), except in any case where a larger vote is
required by law, by the Articles of Organization or by these By-Laws, shall
decide the matter.
ARTICLE VII
PROXIES AND VOTING
Except as may be provided in the Articles of Organization, with respect to
two or more classes or series of stock, stockholders entitled to vote shall have
one vote for each share of stock entitled to vote owned by them and a
proportionate vote for each fractional share. No ballot shall be required for
any election unless requested by a stockholder present or represented at the
meeting and entitled to vote in the election. The Corporation shall not,
directly or indirectly, vote upon any share of its own stock.
Stockholders entitled to vote may vote either in person or by proxy in
writing dated not more than six (6) months before the meeting named therein,
which proxies shall be filed with the Clerk of the meeting, or any adjournment
thereof, before being voted. Such proxies shall entitle the holders thereof to
vote at any adjournment of such meeting, but shall not be valid after the final
adjournment of such meeting.
Any action to be taken by stockholders may be taken without a meeting if
all stockholders entitled to vote on the matter consent to the action by a
writing or writings filed with the records of the meetings of stockholders. Such
consent shall be treated for all purposes as a vote at a meeting.
The Chairman of the Board, if there be one, or in his absence the
President, or in absence of both the Chairman of the Board and the President a
vice-president, shall call meetings of the stockholders to order and shall act
as chairman thereof. The Clerk of the Corporation, if present, shall record the
proceedings of all meetings of stockholders and, in his absence, the presiding
officer may appoint a clerk pro tempore of the meeting.
3
<PAGE>
ARTICLE III
BOARD OF DIRECTORS
The Board of Directors shall consist of not fewer than three Directors.
Directors shall be elected annually (by ballot if so requested by any
stockholder entitled to vote) at the annual meeting of stockholders by such
stockholders as have the right to vote at such election. The number of Directors
for each corporate year shall initially be fixed by vote at the meeting at which
they are elected, and if not so fixed shall be the number of Directors
immediately prior to such meeting.
Any action which may by law, the Articles of Organization or these By-Laws
be taken by a majority of the Board of Directors then in office may be taken by
the sole Director when and if the Corporation has only one Director.
At any time during any year the number of the Board of Directors may be
increased by vote of a majority of the Directors then in office. At any time
during any year, the whole number of Directors may be increased or reduced by
the stockholders at a meeting called for the purpose and, in the case of a
reduction the particular directorships which shall terminate shall be determined
by the stockholders, in each case by vote of a majority of the stock outstanding
and entitled to vote for the election of Directors, or, in the case of a
reduction which involves the termination of the directorship of an incumbent
Director, by such larger vote, if any, as would be required to remove such
incumbent from office.
Each newly-created directorship resulting from any increase in the number
of Directors may be filled in the manner provided in Article XIX.
No Director need be a stockholder except as may be otherwise provided by
law, by the Articles of Organization or these By-Laws. Each Director shall hold
office until the next annual meeting of stockholders and until his successor is
elected and qualified, or until he sooner dies, resigns or is removed.
ARTICLE IX
POWERS OF DIRECTORS
The business, property and affairs of the Corporation shall be managed by,
and be under the control and direction of the Board of Directors, which shall
have and may exercise all the powers of the Corporation except such as are
conferred upon the stockholders or other officers by law, by the Articles of
Organization or by these By-Laws.
Except as may be otherwise specifically provided by law, or by vote of the
stockholders, the Board of Directors is expressly authorized to issue, from time
to time all or any portion or portions of the capital stock of the Corporation
of any class which may have been authorized but not issued
4
<PAGE>
or otherwise reserved for issue to such person or persons and for such
consideration (but not less than the par value thereof in case of stock having
par value), whether cash, tangible or intangible property, good will, services
or expenses, as it may deem best, without first offering (for subscription or
sale) such authorized but unissued stock to any present or future stockholders
of the Corporation, and generally in its absolute discretion to determine the
terms and manner of any disposition of such authorized but unissued stock.
The Board of Directors may delegate from time to time to any committee,
officer or agent such powers and authority as the law, the Articles of
Organization and these By-Laws may permit. The Board of Directors in its
discretion may appoint and remove and determine the compensation and duties, in
addition to those fixed by law, the Articles of Organization and these By-Laws,
of all the officers, representatives, agents, employees, and servants of the
Corporation. The Board of Directors shall have power to fix a reasonable
compensation or fee for the attendance of their members at meetings of the
Board. The Board of Directors shall have the power, from time to time, to fix
and determine and to vary, the amount of working capital of the Corporation and
to direct and determine the use and disposition of any surplus or net profits of
the Corporation over and above the amount contributed as, or constituting,
paid-in capital. The Board of Directors, in its discretion, shall, from time to
time, declare what, if any, dividends shall be paid on the stock of the
Corporation out of the remaining surplus or net profits, and any dividend so
declared shall be payable at such time or times as the Board shall determine.
ARTICLE X
COMMITTEES OF DIRECTORS
The Board of Directors, by vote of a majority of the Directors then in
office, may at any time elect from its own number an executive committee and/or
one or more other committees, to consist of not fewer than three members, and
may from time to time designate or alter, within the limits permitted by this
Article X, the duties and powers of such committees or change their membership,
and may at any time abolish such committees or any of them.
Any committee shall be vested with such powers of the Board of Directors as
the Board may determine in the vote establishing such committee or in a
subsequent vote of a majority of Directors then in office, provided, however,
that no such committee shall have any power prohibited by law, or the Articles
of Organization, or the power
(a) to change the principal office of the Corporation;
(b) to amend or authorize the amendment of the Articles of Organization
or these By-Laws;
(c) to issue stock;
5
<PAGE>
(d) to establish and designate series of stock, or fix and determine the
relative rights and preferences of any series of stock;
(e) to elect officers required by law, the Articles of Organization or
these By-Laws to be elected by stockholders or Directors, or to fill
vacancies in any such office;
(f) to change the number of the Board of Directors or to fill vacancies
in the Board of Directors;
(g) to remove officers or Directors from office;
(h) to authorize the payment of any dividend or distribution to
stockholders;
(i) to authorize the reacquisition for value of stock of the Corporation;
(j) to authorize a merger or consolidation of the Corporation or a sale
or other disposition of all or substantially all the property and
business of the Corporation; or
(k) to authorize the liquidation or dissolution of the Corporation;
and provided further, that the fact that a particular power appears in the
foregoing enumeration of powers denied to committees of the Board of Directors
shall not be construed to override by implication any other provision of the
Articles of Organization or these By-Laws limiting or denying to the Board of
Directors the right to exercise such power.
Each member of a committee shall hold office until the first meeting of the
Board of Directors following the next annual meeting of stockholders (or until
such other time as the Board of Directors may determine, either in the vote
establishing the committee or at the election of such member) and until his
successor is elected and qualified, or until he sooner dies, resigns, is
removed, is replaced by change of membership or becomes disqualified by ceasing
to be a Director, or until the committee is sooner abolished by the Board of
Directors.
A majority of the members of any committee then in office, but not fewer
than two, shall constitute a quorum for the transaction of business, but any
meeting may be adjourned from time to time by a majority of the votes cast upon
the question, whether or not a quorum is present, and the meeting may be held as
adjourned without further notice. Each committee may make rules not inconsistent
herewith for the holding and conduct of its meetings, but unless otherwise
provided in such rules its meetings shall be held and conducted in the same
manner, as nearly as may be, as is provided in these By-Laws for meetings of the
Board of Directors. The Board of Directors shall have the power to rescind any
vote or resolution of any committee, provided, however, that no rights of third
parties shall be impaired by such rescission.
6
<PAGE>
ARTICLE XI
MEETINGS OF THE BOARD OF DIRECTORS; ACTION WITHOUT A MEETING
Regular meetings of the Board of Directors may be held without call or
notice at such places and at such times as the Board may from time to time
determine; provided, however, that reasonable notice of such determination and
of any changes therein is given to each member of the Board then in office. A
regular meeting of the Board of Directors for the purpose of electing officers
and agents may be held without call or notice immediately after and at the same
place as the annual meeting of stockholders, and, if held upon due call or
notice, for such other and further purposes as may be specified in such call or
notice.
Special meetings of the Board of Directors may be held at any time and at
any place when called by the President, the Treasurer, the Chairman of the
Board, if there be one, or two or more Directors, reasonable notice thereof
being given to each Director by the Secretary ,or, if there be no Secretary, by
the Clerk, or, in the case of death, absence, incapacity or refusal of the
Secretary (or the Clerk, as the case may be), by the officer or Directors
calling the meeting. In any case, it shall be deemed sufficient notice to a
Director to send notice by mail at least forty-eight (48) hours, or by telegram
at least twenty-four (24) hours, before the meeting, addressed to him at his
usual or last known business or residence address; or to give notice to him in
person, either by telephone or by handing him a written notice, at least
twenty-four (24) hours before the meeting.
Notwithstanding the foregoing, notice of a meeting need not be given to any
Director if a written waiver of notice, executed by him before or after the
meeting, is filed with the records of the meeting, or to any Director who
attends the meeting without protesting prior thereto, or at its commencement,
the lack of notice to him.
Any action required or permitted to be taken at any meeting of the
Directors may be taken without a meeting if a written consent thereto is signed
by all the Directors and such written consent is filed with the records of the
meetings of the Directors. Such consent shall be treated as a vote at a meeting
for all purposes. Such consents may be executed in one or more counterparts and
not every Director need sign the same counterpart.
ARTICLE XII
QUORUM OF DIRECTORS
At any meeting of the Board of Directors, a quorum for any election, or for
the consideration of any question, shall consist of a majority of the Directors
then in office, but any meeting may be adjourned from time to time by a majority
of the votes cast upon the question, whether or not a quorum is present, and the
meeting may be held as adjourned without further notice. When a quorum is
present at any meeting, the votes of a majority of the Directors present shall
be requisite and sufficient for election to any office, and a majority of the
Directors present shall decide any question
7
<PAGE>
brought before such meeting except in any case where a larger vote is required
by law, by the Articles of Organization or by these By-Laws.
ARTICLE XIII
OFFICERS AND AGENTS
The officers of the Corporation shall be a President, a Treasurer, a Clerk,
and such other officers, which may include a Chairman of the Board, a Secretary,
a Controller, one or more Vice Presidents, Assistant Treasurers, Assistant
Clerks, or Assistant Controllers, as the Board of Directors may, in its
discretion, elect or appoint. The Corporation may also have such agents, if any,
as the Board of Directors may, in its discretion, appoint. The President need
not be a Director. The Clerk shall be a resident of Massachusetts unless the
Corporation has a resident agent appointed for the purpose of receiving service
of process. So far as is permitted by law, any two or more offices may be held
by the same person.
Subject to law, to the Articles of Organization and the other provisions of
these By-Laws, each officer shall have, in addition to the duties and powers
herein set forth, such duties and powers as are commonly incident to his office
and as the Board of Directors may from time to time designate.
The President, Treasurer, and Clerk (and the Secretary and Chairman of the
Board, if, as the case may be, there be one) shall be elected annually by the
Board of Directors at its first meeting following the annual meeting of
stockholders, by vote of a majority of the full Board of Directors. Such other
offices of the Corporation as may be created in accordance with these By-Laws
may be filled at such meeting by vote of a majority of the full Board of
Directors or any other time by vote of a majority of the Directors then in
office.
Each officer shall (subject to Article XVIII of these By-Laws) hold office
until the first meeting of the Board of Directors following the next annual
meeting of stockholders and until his successor is elected or appointed and
qualified, or until he sooner dies, resigns, is removed, or becomes
disqualified. Each agent shall retain his authority at the pleasure of the Board
of Directors.
Any officer, employee, or agent of the Corporation may be required, as and
if determined by the Board of Directors, to give bond for the faithful
performance of his duties.
ARTICLE XIV
PRESIDENT AND VICE PRESIDENTS; CHAIRMAN OF THE BOARD
The President shall be the chief executive officer of the Corporation and
shall have general charge and supervision of the business, property and affairs
of the Corporation and such other powers and duties as the Board of Directors
may prescribe, subject to the control of the Board of Directors, unless
otherwise provided by law the Articles of Organization, these By-Laws or by
specific vote of
8
<PAGE>
the Board of Directors. Unless a Chairman of the Board shall have been elected,
the President shall preside at all meetings of stockholders and of the Board
of Directors at which he is present except as otherwise voted by the Board of
Directors.
Any Vice President shall have such duties and powers as shall be designated
from time to time by the Board of Directors or by the President, and, in any
case, shall be responsible to and shall report to the President. In the absence
or disability of the President, the Vice President or, if there be more than
one, the Vice Presidents in the order of their seniority or as otherwise
designated by the Board of Directors, shall have the powers and duties of the
President.
The Chairman of the Board, if there be one, shall be a member of the Board
of Directors and shall preside at its meetings and at the meetings of the
stockholders. He shall keep himself informed of the administration of the
affairs of the Corporation, shall advise and counsel with the President, and, in
the President's absence, with other officers of the Corporation, and shall
perform such other duties as may from time to time be assigned to him by the
Board of Directors.
ARTICLE XV
TREASURER AND ASSISTANT TREASURER
The Treasurer shall be the chief financial officer of the Corporation and
shall be in charge of its funds and the disbursement thereof subject to the
President and the Board of Directors, and shall have such duties and powers as
are commonly incident to the office of a corporate treasurer and such other
duties and powers as may be prescribed from time to time by the Board of
Directors, or by the President. If no Controller is elected, the Treasurer shall
also have the duties and powers of the Controller as provided in these By-Laws.
The Treasurer shall be responsible to and shall report to the Board of
Directors, but in the ordinary conduct of the Corporation's business shall be
under the supervision of the President.
Any Assistant Treasurer shall have such duties and powers as shall be
prescribed from time to time by the Board of Directors or by the Treasurer, and
shall be responsible to and shall report to the Treasurer. In the absence or
disability of the Treasurer, the Assistant Treasurer or, if there be more than
one, the Assistant Treasurers in their order of seniority or as otherwise
designated by the Board of Directors shall have the powers and duties of the
Treasurer.
ARTICLE XVI
CONTROLLER
If a Controller is elected, he shall be the chief accounting officer of the
Corporation and shall be in charge of its books of account and accounting
records and of its accounting procedures, and shall have such duties and powers
as are commonly incident to the office of a corporate controller and such other
duties and powers as may be prescribed from time to time by the Board of
Directors
9
<PAGE>
or by the President. The Controller shall be responsible to and shall report to
the Board of Directors, but in the ordinary conduct of the Corporation's
business shall be under the supervision of the President.
Any Assistant Controller shall have such duties and powers as shall be
prescribed from time to time by the Board of Directors or by the Controller, and
shall be responsible to and shall report to the Controller. In the absence or
disability of the Controller, the Assistant Controller or, if there be more than
one, Assistant Controllers in their order of seniority or as otherwise
designated by the Board of Directors, shall have the powers and duties of the
Controller.
ARTICLE XVII
CLERK; SECRETARY; ASSISTANT CLERK AND ASSISTANT SECRETARY
The Clerk shall record all proceedings of the stockholders in books to be
kept therefor, and shall have custody of the Corporation's records, documents
and valuable papers. In the absence of the Clerk from any such meeting, the
Secretary, if any, may act as temporary clerk, and shall record the proceedings
thereof in the aforesaid books, or a temporary clerk may be chosen by vote of
the meeting.
The Clerk shall also keep, or cause to be kept, the stock transfer records
of the Corporation which shall contain a complete list of the names and
addresses of all stockholders and the amount of stock held by each.
Unless the Board of Directors shall otherwise designate, the Clerk or, in
his absence, the Assistant Clerk, if any, shall have custody of the corporate
seal and be responsible for affixing it to such documents as may be required to
be sealed.
The Clerk shall have such other duties and powers as are commonly incident
to the office of a corporate clerk, and such other duties and powers as may be
prescribed from time to time by the Board of Directors or by the President.
If no Secretary is elected, the Clerk shall also record all proceedings of
the Board of Directors and of any meetings of any committees of the Board, and,
in his absence from any such meeting, a temporary clerk shall be chosen who
shall record the proceedings thereof.
The Secretary shall attend all meetings of the Board of Directors and shall
record the proceedings thereat in books provided for that purpose which shall be
open during business hours to the inspection of any Director. He shall notify
the Directors of the meetings in accordance with these By-Laws and shall have
and may exercise such other powers and duties as the Board of Directors may
prescribe. In the absence of the Secretary at a meeting of the Board of
Directors, a temporary secretary shall be chosen.
10
<PAGE>
Any Assistant Clerk and any Assistant Secretary shall have such duties and
powers as shall from time to time be designated by the Board of Directors or the
Clerk or the Secretary; respectively, and shall be responsible to and shall
report to the Clerk and the Secretary, respectively.
ARTICLE XVIII
RESIGNATIONS AND REMOVALS
Any Director or officer may resign at any time by delivering his
resignation in writing to the President, the Clerk or the Secretary, or to a
meeting of the Board of Directors. The stockholders may, by vote of a majority
in interest of the stock issued and outstanding and entitled to vote at an
election of Directors, remove any Director or Directors from office with or
without cause; provided, however, that the Directors of a class elected by a
particular class of stockholders may be removed only by the vote of the holders
of a majority of the shares of such class. The Board of Directors may, by vote
of the majority of the Directors in office, remove any Director from office with
cause or remove any officer from office, with or without cause. The Board of
Directors may, at any time, by vote of a majority of the Directors present and
voting, terminate or modify the authority of any agent. No Director or officer
resigning and (except where a right to receive compensation for a definite
future period shall be expressly provided in a written agreement with the
Corporation, duly approved by the Board of Directors) no Director or officer
removed shall have any right to any compensation as such Director or officer for
any period following his resignation or removal, or any right to damages on
account of such removal, whether his compensation be by the month, by the year
or otherwise. Any Director or officer may be removed for cause only after
reasonable notice and opportunity to be heard before the body proposing to
remove him.
ARTICLE XIX
VACANCIES
Any vacancy in the Board of Directors, however occurring, including a
vacancy resulting from the enlargement of the Board, and any vacancy in any
other office, may be filled by the stockholders or, in the absence of
stockholder action, by a majority of the Directors then in office.
If the office of any member of any committee or of any other office
becomes vacant, the Board of Directors may elect or appoint a successor or
successors by vote of a majority of the Directors then in office.
Each successor as a Director or officer shall hold office for the unexpired
term and until his successor shall be elected or appointed and qualified, or
until he sooner dies, resigns, is removed or becomes disqualified.
The Board of Directors shall have and may exercise all its powers,
notwithstanding the existence of one or more vacancies in its number as fixed by
either the stockholders or the Directors.
11
<PAGE>
ARTICLE XX
CAPITAL STOCK
The authorized amount of the capital stock and the par value, if any, of
the shares shall be as fixed in the Articles of Organization. At all times when
there are two or more classes of stock, the several classes of stock shall
conform to the description and terms, and have the respective preferences,
voting powers, restrictions and qualifications, set forth in the Articles of
Organization.
ARTICLE XXI
CERTIFICATE OF STOCK
Each stockholder shall be entitled to a certificate of the capital stock of
the Corporation owned by him, in such form as shall, in conformity to law, be
prescribed from time to time by the Board of Directors. Such certificate shall
be signed by either the President or a Vice President, and by either the
Treasurer or an Assistant Treasurer, and may, but need not be, sealed with the
corporate seal; but when any such certificate is signed by a transfer agent or
by a registrar other than a Director, officer, or employee of the Corporation,
the signature of the President or a Vice President and of the Treasurer or an
Assistant Treasurer of the Corporation, or either or both such signatures and
such seal upon such certificate, may be facsimile. If any officer who has
signed, or whose facsimile signature has been placed on, any such certificate
shall have ceased to be such officer before such certificate is issued, the
certificate may be issued by the Corporation with the same effect as if he were
such officer at the time of issue.
Every certificate for shares of stock which are subject to any restriction
on transfer pursuant to law, the Articles of Organization, these By-Laws, or any
agreement to which the Corporation is a party, shall have the restriction noted
conspicuously on the certificate, and shall also set forth, on the face or back,
either the full text of the restriction or a statement of the existence of such
restriction and (except if such restriction is imposed by law) a statement that
the Corporation will furnish a copy thereof to the holder of such certificate
upon written request and without charge. Every certificate issued when the
Corporation is authorized to issue more than one class or series of stock shall
set forth on its face or back either the full text of the preferences, voting
powers, qualifications, and special and relative rights of the shares of each
class and series authorized to be issued, or a statement of the existence of
such preferences, powers, qualifications and rights, and a statement that the
Corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
12
<PAGE>
ARTICLE XXII
TRANSFER OF SHARES OF STOCK
Subject to the restrictions, if any, stated or noted on the stock
certificates, shares of stock may be transferred on the books of the Corporation
only by surrender to the Corporation, or its transfer agent, of the certificate
therefor, properly endorsed or accompanied by a written assignment or power of
attorney properly executed, with all requisite stock transfer stamps affixed,
and with such proof of the authenticity and effectiveness of the signature as
the Corporation or its transfer agent shall reasonably require. Except as may be
otherwise required by law, the Articles of Organization or these By-Laws, the
Corporation shall have the right to treat the person registered on the stock
transfer books as the owner of any shares of the Corporation's stock as the
owner-in-fact thereof for all purposes, including the payment of dividends,
liability for assessments, the right to vote with respect thereto and otherwise,
and accordingly shall not be bound to recognize any attempted transfer, pledge
or other disposition thereof; or any equitable or other claim with respect
thereto, whether or not it shall have actual or other notice thereof until such
shares shall have been transferred on the Corporation's books in accordance with
these By-Laws. It shall be the duty of each stockholder to notify the
Corporation of his post office address.
ARTICLE XXIII
TRANSFER AGENTS AND REGISTRARS; FURTHER REGULATIONS
The Board of Directors may appoint one or more banks, trust companies or
corporations doing a corporate trust business, in good standing under the laws
of the United States or any state therein, to act as the Corporation's transfer
agent and/or registrar for shares of capital stock, and the Board may make such
other and further regulations, not inconsistent with applicable law, as it may
deem expedient concerning the issue, transfer and registration of capital stock
and stock certificates of the Corporation.
ARTICLE XXIV
LOSS OF CERTIFICATES
In the case of the alleged loss, destruction, or wrongful taking of a
certificate of stock, a duplicate certificate may be issued in place thereof
upon receipt by the Corporation of such evidence of loss and such indemnity
bond, with or without surety, as shall be satisfactory to the President and the
Treasurer, or otherwise upon such terms, consistent with law, as the Board of
Directors may prescribe.
13
<PAGE>
ARTICLE XXV
RECORD DATE
The Directors may fix in advance a time, which shall not be more than sixty
days before the date of any meeting of stockholders or the date for the payment
of any dividend or the making of any distribution to stockholders, or the last
day on which the consent or dissent of stockholders may be effectively expressed
for any purpose, as the record date for determining the stockholders having the
right to notice of and to vote at such meeting and any adjournment thereof, or
the right to receive such dividend or distribution, or the right to give such
consent or dissent, and in such case, only stockholders of record on such record
date shall have such right, notwithstanding any transfer of stock on the books
of the Corporation after the record date; or, without fixing such record date,
the Directors may, for any such purposes, close the transfer books for all or
any part of such period.
ARTICLE XXVI
SEAL
The seal of the Corporation shall, subject to alteration by the Board of
Directors, consist of a flat-faced circular die with the word "Massachusetts",
together with the name of the Corporation and the year of incorporation, cut or
engraved thereon. An impression of the seal impressed upon the original copy of
these By-Laws shall be deemed conclusively to be the seal adopted by the Board
of Directors.
ARTICLE XXVII
EXECUTION OF PAPERS
Except as the Board of Directors may generally or in particular cases
otherwise authorize or direct, all deeds, leases, transfers, contracts,
proposals, bonds, notes, checks, drafts and other obligations made, accepted or
endorsed by the Corporation shall be signed or endorsed on behalf of the
Corporation by its President or by one of its Vice Presidents or by its
Treasurer.
ARTICLE XXVIII
FISCAL YEAR
Except as from time to time provided by the Board of Directors, the fiscal
year of the Corporation shall end on the last day of December of each year.
14
<PAGE>
ARTICLE XXIX
INDEMNIFICATION AND INSURANCE
The Corporation shall indemnify any person who is a present or former
Director or officer of the Corporation and who, by reason of his position as
such, was, is or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than any action or suit by or in the right of the
Corporation) against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement, actually and reasonably incurred by him in
connection with the claim, action, suit or proceeding, if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon the plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
The Corporation shall indemnify, any person who is a present or former
Director or officer of the Corporation and who, by reason of his position as
such, was, is or is threatened to be made a party to any threatened, pending or
completed action or suit by or on behalf of the Corporation to obtain a judgment
or decree in its favor against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense or settlement of the
action or suit, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation; provided, that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person has been adjudged to be liable for negligence or misconduct in
the performance of his duty to the Corporation, except to the extent that the
court in which the action or suit was brought determines upon application that,
despite the adjudication of liability but in view of all circumstances of the
case, such person is fairly and reasonably entitled to indemnity for those
expenses which the counsel shall deem proper, and such person is not adjudged to
be liable by reason of his willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
To the extent that a Director or officer of the Corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to above, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection therewith.
Unless a court orders otherwise, any indemnification under the above
provisions may be made by the Corporation only as authorized in the specific
case after a determination that indemnification of the person to be indemnified
is proper in the circumstances because he has met the applicable standard of
conduct set forth above. The determination shall be made by: (a) the Directors,
by a majority vote of a quorum consisting of Directors who were not parties to
the action, suit or
15
<PAGE>
proceeding or (b) if the required quorum is not obtainable or if a quorum of
disinterested Directors so directs, an independent legal counsel in a written
opinion.
Nothing contained in this Article XXIX shall be construed to protect any
person against any liability to the Corporation or its stockholders to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office (any such conduct being hereinafter referred to as "Disabling Conduct").
No indemnification shall be made pursuant to this Article XXIX unless:
(a) there is a final determination on the merits by a court or other body
before whom the action, suit or proceeding was brought that the person to be
indemnified was not liable by reason of Disabling Conduct; or
(b) in the absence of such a judicial determination, there is a reasonable
determination, based upon a review of the facts, that such person was not liable
by reason of Disabling Conduct, which determination shall be made by:
( i) a majority of a quorum of Directors who are neither
"interested persons" of the Corporation, as defined in Section 2(a)(19)
of the 1940 Act, nor parties to the action, suit or proceeding; or
(ii) an independent legal counsel in a written opinion.
Notwithstanding any provision of this Article XXIX, any advance payment of
expenses by the Corporation to any person to be indemnified hereunder shall be
made only upon the undertaking by or on behalf of such person to repay the
advance unless it is ultimately determined that he is entitled to
indemnification as above provided, and only if one of the following conditions
is met:
(a) the Director or officer to be indemnified provides a security for his
undertaking; or
(b) the Corporation is insured against losses arising by reason of any
lawful advances; or
(c) there is a determination, based on a review of readily-available facts,
that there is reason to believe that the person to be indemnified ultimately
will be entitled to indemnification, which determination shall be made by:
(i) a majority of a quorum of Directors who are neither
"interested persons" of the Corporation, as defined in Section 2(a)(19)
of the 1940 Act, nor parties to the action, suit or proceeding; or
(ii) an independent legal counsel in a written opinion.
16
<PAGE>
The indemnification provided by this Article XXIX shall continue as to a
person who has ceased to be a Director or officer of the Corporation and inure
to the benefit of the legal representatives of such person and shall not be
deemed exclusive of any other rights to which such person may be entitled under
any agreement, vote of Directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding office.
The Corporation may purchase and maintain insurance on behalf of any person
who is or was a Director, officer, employee or agent of the Corporation, against
any liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such. However, the Corporation shall not purchase
insurance to indemnify any Director or officer against liability for any conduct
in respect of which the 1940 Act prohibits the Corporation itself from
indemnifying him.
ARTICLE XXX
VOTING STOCK IN OTHER CORPORATIONS
Unless otherwise ordered by the Board of Directors, the President or, in
the case of his absence or failure to act, the Treasurer, shall have full power
and authority on behalf of the Corporation to attend and to act and to vote at
any meetings of the stockholders of any corporation in which this Corporation
may hold stock, and at any such meeting shall possess and may exercise any and
all rights and powers incident to the ownership of such stock and which, as the
owner thereof, the Corporation might have possessed and exercised if present.
The Board of Directors, by resolution from time to time, or, in the absence
thereof, the President, may confer like powers upon any other person or persons
as attorneys and proxies of the Corporation.
ARTICLE XXXI
CORPORATE RECORDS
The original or attested copies of the Articles of Organization, By-Laws,
and records of all meetings of the incorporators and stockholders, and the stock
and transfer records which shall contain the names of all stockholders and the
record address and the amount of stock held by each, shall be kept in
Massachusetts either at the principal office of the Corporation or at an office
of its transfer agent or of the Clerk. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times for
inspection by any stockholder for any proper purpose, but not to secure a list
of the stockholders for the purpose of selling said list, or copies thereof, or
of using the same for a purpose other than in the present interest of the
applicant, as a stockholder, relative to the affairs of the Corporation.
17
<PAGE>
ARTICLE XXXII
AMENDMENTS
These By-Laws may be altered, amended or repealed, in whole or in part, at
any time by vote of the stockholders. The Board of Directors, by a majority vote
of Directors at the time in office, may alter, amend or repeal these By-Laws in
whole or in part, except with respect to any provision hereof which by law, the
Articles of Organization or these By-Laws requires action by the stockholders;
provided that not later than the time of giving notice of the meeting of
stockholders next following the alteration, amendment or repeal of these
By-Laws, in whole or in part, notice thereof, stating the substance of such
action, shall be given to all stockholders entitled to vote on amending these
By-Laws. By-Laws adopted by the Directors may be amended by the stockholders.
18
Exhibit 5.2
Management Agreement
<PAGE>
INVESTMENT ADVISER CONTRACT
January 1, 1994
Phoenix Investment Counsel, Inc.
One American Row
Hartford, CT 06115
Gentlemen:
You are hereby appointed, subject to your acceptance of such appointment by
signing and returning to Phoenix Total Return Fund, Inc. (hereinafter called the
"Fund") a duplicate of this letter, the Investment Adviser of the Fund with the
powers and duties set forth below. Upon such acceptance your appointment as such
Investment Adviser will take effect and this letter shall constitute the
Investment Adviser Contract between you and the Fund.
1. Subject to review by the Fund and except as the Fund may otherwise
direct, you as Investment Adviser shall furnish the Fund continuously an
investment program and shall determine from time to time what securities shall
be purchased or sold by the Fund and what portion of the funds of the Fund shall
be uninvested, always in compliance with the provisions of the Restated Articles
of Organization and By-Laws of the Fund and the then current prospectus.
2. Subject to review by the Fund and except as the Fund may otherwise
direct, all orders for the purchase and sale of portfolio securities are to be
placed by you in your discretion as to the firm, individual or agency executing
them. It is understood and agreed, however, that no such orders shall be placed
in contravention of the provisions of the Investment Company Act of 1940.
3. All assets of the Fund are to be held solely by the Custodian for the
Fund subject to the Custodian Contract. The Custodian is to make delivers and
receive payment for the account of the Fund for securities sold and to accept
deliveries and not make payment for securities purchased only as directed by
such person or persons as are determined from time to time by the Board of
Directors of the Fund. The term "securities" as used herein does not include
shares of the Fund.
4. You shall render to the Fund, at regularly scheduled meetings of its
Board of Directors and at such other times as the Fund may request, a report on
all matters pertaining to your services as Investment Adviser hereunder,
including a list of all securities owned by the Fund, and you shall, at the
Fund's request, supply to the Fund any and all information available to you for
use in connection with the Fund's periodic reports to shareholders.
5. You shall, at your own expense, furnish to the Fund office space in
your offices or in such other place as may be agreed upon from time to time,
and all necessary office facilities,
<PAGE>
Phoenix Investment Counsel, Inc.
January 1, 1994
Page 2
equipment and personnel for managing the investment and reinvestment of the
assets of the Fund and shall arrange, if desired by the Fund, for members of
your organization to serve without salaries from the Fund as officers or agents
of the Fund. You assume and shall pay or reimburse the Fund for: (1) the
compensation (if any) of the directors of the Fund who are employed on a full
time basis by you and by any of your affiliates and of all officers of the Fund
as such, and (2) all expenses incurred by your or by the Fund in connection with
the management of the investment and reinvestment of the assets of the Fund. The
Fund assumes and shall pay all other expenses of the Fund, including, without
limitation: (1) all charges and expenses of any custodian or depositary
appointed by the Fund for the safekeeping of its cash, securities and other
property, (2) all charges and expenses for bookkeeping and auditors, (3) all
charges and expenses of any transfer agents and registrars appointed by the
Fund, (4) all fees of all directors of the Fund who are not employed on a full
time basis by you or by any of your affiliates, (5) all broker's fees, expenses
and commissions and issue and transfer taxes chargeable to the Fund in
connection with securities transactions to which the Fund is a party, (6) all
taxes and corporate fees payable by the Fund to federal, state or other
governmental agencies, (7) all costs of stock certificate representing, shares
of the Fund. (8) all fees and expenses involved in registering and maintaining
registrations of the Fund and of its shares with the Securities and Exchange
Commission and registering or qualifying its shares under state or other
securities laws including the preparation and printing of prospectuses for
filing with said Commission and other authorities (but not the expenses of
preparing any sales literature or of printing the same or of printing any
prospectus for use in selling Fund shares, which expenses neither party
undertakes by this contract to bear), (9) all expenses of shareholders' and
directors' meetings and of preparing and printing reports to shareholders
dealing with shareholders, (10) all charges and expenses of legal counsel for
the Fund in connection with legal matters relating to the Fund, including,
without limitation, legal services rendered in connection with the Fund's
corporate existence, corporate and financial structure and relations with its
shareholders, registrations and qualifications of securities under federal,
state and other laws, issues of securities and expenses which the Fund has
herein assumed, (11) all expenses of insurance premiums for fidelity and other
coverage, and (12) extraordinary expenses and expenses of a non-recurring nature
which may include, but not be limited to, the reasonable and proportionate cost
of any reorganization or acquisition of assets and the cost of legal proceedings
to which the Fund is a party. In the event you provide any of the services
(excluding printing) involved in maintaining registrations of the Fund and of
its shares with the Securities and Exchange Commission or involved in the
preparation of shareholder reports, the Fund will promptly reimburse you
therefor on a cost basis.
6. For providing the services outlined herein, the Fund agrees that you
shall be compensated as follows: (1) Within five days after the end of each
month, the fund shall pay you a fee based on an annual rate of .65% of the
average of the aggregate daily net asset values of the fund up to $1 billion;
(2) .60% of such value between $1 billion and $2 billion; and (3) .55% of such
value in excess of $2 billion. The amounts payable to you shall be based upon
the average value of the net assets of the Fund as of the close of business
each day, computed in
<PAGE>
Phoenix Investment Counsel, Inc.
January 1, 1994
Page 3
accordance with the Fund's Restated Articles of Organization.
If this Contract becomes effective after the first day of a month or is
terminated before the last day of a month, your remuneration for such fraction
of a month shall be pro-rated proportionately to such fraction of a month.
Notwithstanding anything contained in the foregoing, you agree to reimburse
the Fund for the amount, if any, of the expenses of the Fund (including your
compensation but excluding interest, brokerage cost, taxes and extraordinary
expenses) for any fiscal year which exceeds the level of expenses which the Fund
is permitted to bear under the most restrictive expense limitation imposed (and
not waived) on the Fund by any state in which shares of the Fund are then
qualified. Such reimbursement, if any, will be made by you to the Fund within
five days after the end of each month.
7. You shall incur no liability under this Contract for any instructions,
action or failure to act except for willful negligence, bad faith or gross
negligence in the performance of your duties, or by reason of your reckless
disregard of your obligations and duties hereunder.
8. This contract shall continue in effect only so long as (1) such
continuance is specifically approved at least annually by the Board of Directors
of the Fund for by a vote of the majority of the outstanding shares of the Fund
and (2) such continuance or any renewal and the terms of such contract have been
approved by the vote of a majority of directors of the Fund who are not
interested persons, as that term is defined in the Investment Company Act of
1940, of you or of the Fund, cast in person at a meeting called for the purpose
of voting on such approval. For all purposes of this Contract, the term "a
majority of outstanding shares" shall mean the lesser of (i) 67% of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented or (ii) more then 50% of the outstanding shares.
9. On sixty days' written notice to you, this Contract may be terminated
at any time, without the payment of any penalty, by the Board of Directors of
the Fund or by vote of the holders of a majority of the outstanding shares of
the Fund; and on sixty days' written notice to the Fund this Contract may be
terminated at any time by you, without the payment of any penalty. This Contract
shall automatically terminate upon its assignment (as that term is defined in
the Investment Company Act of 1940).
10. This Contract may be amended by the parties hereto with the approving
vote of the holders of a majority of the outstanding shares of the Fund, but no
such amendment shall conflict with any of the provisions of the Restated
Articles of Organization or By-Laws of the Fund of the Investment Company Act of
1940 or of any order of the Securities and Exchange Commission.
<PAGE>
Phoenix Investment Counsel, Inc.
January 1, 1994
Page 4
11. In the event of termination of this Contract, or at your request, the
Fund will eliminate all reference to "Phoenix" from its name, and will not
thereafter transact business in a name using the word "Phoenix" in any form or
combination whatsoever, or otherwise use the word "Phoenix" as part of its
materials, letterheads, and other material designed to be read by investors and
prospective investors and will delete from its name the word "Phoenix" or any
approximation thereof. If you choose to withdraw the right to use the word
"Phoenix", the Fund agrees to submit the question of continuing the Contract to
a vote of the Fund shareholders at the time of such withdrawal.
12. This Contract shall be construed and the rights and obligations of the
parties hereunder enforced in accordance with the laws of the Commonwealth of
Massachusetts.
Very truly yours,
PHOENIX TOTAL RETURN FUND, INC.
By: /s/ Philip R. McLoughlin
-------------------------------
Philip R. McLoughlin, President
Accepted as of the date first written:
PHOENIX INVESTMENT COUNSEL, INC.
By: /s/ Patricia A. Bannan
------------------------------------
Patricia A. Bannan, President
Exhibit 6.1
Distribution Agreement for Class A Shares
<PAGE>
DISTRIBUTION AGREEMENT
CLASS A SHARES
This AGREEMENT is made this 25th day of May, 1994, by and between Phoenix
Total Return Fund, Inc. (the "Fund"), a Massachusetts corporation authorized to
issue shares of beneficial interest, and Phoenix Equity Planning Corporation
(the "Distributor"), a Connecticut corporation.
WITNESSETH THAT:
1. The Fund hereby grants to the Distributor the right to purchase Class A
shares of beneficial interest of the Fund established and designated as of the
date hereof and to resell Class A shares of the Fund (the "Shares") as principal
and not as agent. The Distributor accepts such appointment and agrees to render
the services described in this Agreement for the compensation herein provided.
2. The Distributor'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,
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 with any
other investment company or the acquisition by the Fund, by purchase
or otherwise, of any other investment company;
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
Distributor shall be notified promptly by the Fund of such computations.
1
<PAGE>
4. Each day the Distributor shall have the right to purchase from the Fund,
as principal, the amount of Shares needed to fill unconditional orders for
Shares received by the Distributor from dealers 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 Distributor under this Agreement shall be subject to
reasonable adjustment for clerical errors, delays and errors of transmission and
cancellation of orders.
5. With respect to transactions other than with dealers, the Distributor 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. Any sale of Shares to or through a person
other than a dealer will be at the Public Offering Price; however, the
Distributor may pay a commission to such person equal to no more than the
difference between the Public Offering Price and the Net Asset Value of those
Shares. The Distributor will sell at Net Asset Value Shares of any Series which
are offered by the then current registration statement or prospectus of the Fund
of sale at such Net Asset Value.
6. Sales at a discount from the Public Offering Price shall be made in
accordance with the terms and conditions of uniform selling agreements allowing
such discounts. Such discounts shall not exceed the difference between the Net
Asset Value and the Public Offering Price.
7. The Fund shall furnish the Distributor with copies of its Declaration of
Fund, as amended from time to time. The Fund shall also furnish the Distributor
with any other documents of the Fund which will assist the Distributor in the
performance of its duties hereunder.
8. The Distributor 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 Distributor from entering into similar arrangements with other
registered investment companies. The Distributor may, in the exercise of its
discretion, refuse to accept orders for Shares from any person.
9. Upon receipt by the Fund of a purchase order from the Distributor,
accompanied by proper applications for the purchase of Shares and delivery
instructions, the Fund shall, as promptly as practicable thereafter, cause
evidence of ownership of such Shares to be delivered as indicated in such
purchase order. Payment for such Shares shall be made by the Distributor to the
Fund in a manner acceptable to the Fund, provided that the Distributor shall pay
for such Shares no later than the tenth business day after the Distributor shall
have contracted to purchase such shares.
10. In connection with offering for sale and selling Shares, the Fund
authorizes the Distributor to give only such information and to make only
such statements or representations as are contained
2
<PAGE>
in the then current registration statement of the Fund or in then current sales
literature or advertisements.
11. 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 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 Distributor by the Fund; and
e) the cost of preparing and distributing reports and notices to
shareholders.
12. The Distributor agrees to pay the following expenses:
a) all expenses of printing prospectuses and statements of additional
information sued 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
Distributor 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 Distributor 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.
13. The Fund hereby appoints the Distributor 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 13 is terminable at the discretion of the Fund.
14. The Fund agrees to indemnify and hold harmless the Distributor, its
officers and directors and each person, if any, who controls the Distributor
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 Distributor,
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
3
<PAGE>
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
Distributor for use in the Fund's registration statement or
prospectus, such indemnification is not applicable. In no case shall
the Fund indemnify the Distributor or its controlling persons as to
any amounts incurred for any liability arising out of or based upon
any action for which the Distributor, 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.
15. The Distributor 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 any incur under said Act, under any
other statute, at common law or otherwise arising out of the acquisition of
any shares by any person which
a) may be based upon any wrongful act by the Distributor 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 or
prospectus (including amendments and supplements thereto), 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
Distributor.
16. It is understood that;
a) directors, 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 Distributor as directors, officers,
stockholders or otherwise;
b) directors, officers, employees, agents and stockholders of the
Distributor are or may be Interested Persons of the Fund as
directors, officers, shareholders or otherwise;
c) the Distributor may be an Interested Person of the Fund as
shareholder or otherwise; and
4
<PAGE>
d) the existence of any such dual interest shall not offset the validity
hereof or of any transactions hereunder.
17. The Fund may terminate this Agreement by 60 days written notice to the
Distributor at any time, without the payment of any penalty, by vote of the
Directors or by a vote of a majority of the outstanding voting securities, as
that term is defined in the Act, of the Fund. The Distributor 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.
18. Subject to prior termination as provided in paragraph 17, 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 Directors, or by a vote
of a majority of the Class A outstanding voting securities, as that term is
defined in the Act, of the Fund. Additionally, each annual renewal of this
Agreement must be approved by the vote of a majority of the Directors who are
not parties to the Agreement or Interested Persons of any such party, cast in
person at a meeting of the Directors called for the purpose of voting on such
approval.
19. This Agreement shall become effective upon the date first set forth above.
This Agreement shall be governed by the laws of The Commonwealth of
Massachusetts 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 TOTAL RETURN FUND, INC.
By:____________________________
PHOENIX EQUITY PLANNING CORPORATION
By:____________________________
fund\717
5
Exhibit 6.1a
Distribution Agreement for Class B shares
<PAGE>
DISTRIBUTION AGREEMENT
CLASS B SHARES
This AGREEMENT is made this ____ day of ______, 1994, by and between
Phoenix Total Return Fund, Inc. (the "Fund"), a Massachusetts corporation
authorized to issue shares of beneficial interest, and Phoenix Equity Planning
Corporation (the "Distributor"), a Connecticut corporation.
WITNESSETH THAT:
1. The Fund hereby grants to the Distributor the right to purchase Class B
shares of beneficial interest of the Fund established and designated as of the
date hereof and to resell Class B shares of the Fund (the "Shares") as principal
and not as agent. The Distributor accepts such appointment and agrees to render
the services described in this Agreement for the compensation herein provided.
2. The Distributor'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,
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 with any
other investment company or the acquisition by the Fund, by purchase
or otherwise, of any other investment company;
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
Distributor shall be notified promptly by the Fund of such computations.
1
<PAGE>
4. Each day the Distributor shall have the right to purchase from the Fund, as
principal, the amount of Shares needed to fill unconditional orders for Shares
received by the Distributor from dealers 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 Distributor under this Agreement shall be subject to
reasonable adjustment for clerical errors, delays and errors of transmission and
cancellation of orders.
5. With respect to transactions other than with dealers, the Distributor 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. Any sale of Shares to or through a person
other than a dealer will be at the Public Offering Price; however, the
Distributor may pay a commission to such person equal to no more than the
difference between the Public Offering Price and the Net Asset Value of those
Shares. The Distributor will sell at Net Asset Value Shares of any Series which
are offered by the then current registration statement or prospectus of the Fund
of sale at such Net Asset Value.
6. Sales at a discount from the Public Offering Price shall be made in
accordance with the terms and conditions of uniform selling agreements allowing
such discounts. Such discounts shall not exceed the difference between the Net
Asset Value and the Public Offering Price.
7. The Fund shall furnish the Distributor with copies of its Declaration of
Fund, as amended from time to time. The Fund shall also furnish the Distributor
with any other documents of the Fund which will assist the Distributor in the
performance of its duties hereunder.
8. The Distributor 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 Distributor from entering into similar arrangements with other
registered investment companies. The Distributor may, in the exercise of its
discretion, refuse to accept orders for Shares from any person.
9. Upon receipt by the Fund of a purchase order from the Distributor,
accompanied by proper applications for the purchase of Shares and delivery
instructions, the Fund shall, as promptly as practicable thereafter, cause
evidence of ownership of such Shares to be delivered as indicated in such
purchase order. Payment for such Shares shall be made by the Distributor to
the Fund in a manner acceptable to the Fund, provided that the Distributor
shall pay for such Shares no later than the tenth business day after the
Distributor shall have contracted to purchase such shares.
10. In connection with offering for sale and selling Shares, the Fund
authorizes the Distributor to give only such information and to make only
such statements or representations as are contained
2
<PAGE>
in the then current registration statement of the Fund or in then current sales
literature or advertisements.
11. 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 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 Distributor by the Fund; and
e) the cost of preparing and distributing reports and notices to
shareholders.
12. The Distributor agrees to pay the following expenses:
a) all expenses of printing prospectuses and statements of additional
information sued 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
Distributor 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 Distributor 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.
13. The Fund hereby appoints the Distributor 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 13 is terminable at the discretion of the Fund.
14. The Fund agrees to indemnify and hold harmless the Distributor, its
officers and directors and each person, if any, who controls the Distributor
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 Distributor,
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
3
<PAGE>
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
Distributor for use in the Fund's registration statement or
prospectus, such indemnification is not applicable. In no case shall
the Fund indemnify the Distributor or its controlling persons as to
any amounts incurred for any liability arising out of or based upon
any action for which the Distributor, 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.
15. The Distributor 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 any incur under said Act, under any
other statute, at common law or otherwise arising out of the acquisition of
any shares by any person which
a) may be based upon any wrongful act by the Distributor 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 or
prospectus (including amendments and supplements thereto), 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
Distributor.
16. It is understood that;
a) directors, 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 Distributor as directors, officers,
stockholders or otherwise;
b) directors, officers, employees, agents and stockholders of the
Distributor are or may be Interested Persons of the Fund as
directors, officers, shareholders or otherwise;
c) the Distributor may be an Interested Person of the Fund as
shareholder or otherwise; and
4
<PAGE>
d) the existence of any such dual interest shall not offset the validity
hereof or of any transactions hereunder.
17. The Fund may terminate this Agreement by 60 days written notice to the
Distributor at any time, without the payment of any penalty, by vote of the
Directors or by a vote of a majority of the outstanding voting securities, as
that term is defined in the Act, of the Fund. The Distributor 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.
18. Subject to prior termination as provided in paragraph 17, 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 Directors, or by a vote
of a majority of the Class B outstanding voting securities, as that term is
defined in the Act, of the Fund. Additionally, each annual renewal of this
Agreement must be approved by the vote of a majority of the Directors who are
not parties to the Agreement or Interested Persons of any such party, cast in
person at a meeting of the Directors called for the purpose of voting on such
approval.
19. This Agreement shall become effective upon the date first set forth above.
This Agreement shall be governed by the laws of The Commonwealth of
Massachusetts 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 TOTAL RETURN FUND, INC.
By:______________________________
PHOENIX EQUITY PLANNING CORPORATION
By:______________________________
fund\718
5
Exhibit 6.2
Form of Sales Agreement
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION
100 Bright Meadow Boulevard
Enfield, Connecticut 06082-1989
800-243-4361
(203) 253-1000
PHOENIX FAMILY OF FUNDS
SALES AGREEMENT
TO: Phoenix Equity Planning Corporation FROM:
100 Bright Meadow Boulevard
Enfield, Connecticut 06082
Sir/Madam:
We desire to enter into an Agreement with you for the sale and distribution of
shares of registered investment companies (which shall collectively be referred
to hereafter as the "Funds") for which you are national distributor or principal
underwriter and which may be listed in the Annex A hereto which such Annex may
be amended by you from time to time. Upon acceptance of this Agreement by you,
we understand that we may offer and sell shares of each of the Funds (hereafter
"Shares") subject, however, to all of the terms and conditions hereof including
your right to suspend or cease the sale of such shares.
1. We understand and agree that in all sales of Shares to the public we shall
be acting as dealer for our own account: that all purchase orders and
applications submitted to you by us are subject to acceptance or rejection
by you in your sole discretion: and that each purchase will be deemed to
have been consummated in your principal office subject to your acceptance
and effective only upon confirmation in us by you.
2. We agree that all purchases of Shares by us shall be made only for the
purpose of covering purchase orders already received from our customers
(who may be any person other than a securities dealer or broker) or for
our own bona fide investment.
3. We shall offer and sell shares purchased pursuant to this Agreement for
the purpose of covering purchase orders of our customers at the current
public offering price for such Shares ("Offering Price") as set forth in
the current prospectus of each of the funds.
4. We shall pay you for Shares purchased by us within five (5) business days
of the date of your confirmation to us of such purchase. The purchase
price shall be the Offering Price, less only the applicable dealer
discount ("Dealer Discount"), if any, as set forth in Annex A hereto. We
agree that you have the right, without notice, to cancel any order for
which payment has not been received by you as provided in this paragraph,
in which case you may hold us responsible for any loss suffered by you
resulting from our failure to make payment as aforesaid.
5. We understand and agree that any Dealer Discount or fee is subject to
change from time to time. Any orders placed after the effective date of
any such Dealer Discount change shall be subject to the Dealer Discounts
in effect at the time such order is received by you.
6. We understand and agree that Shares purchased by us under this Agreement
will not be delivered until payment has been received by you. Delivery of
shares will be made by credit to a shareholder open account unless
delivery of certificates is specified in the purchase order. In order to
avoid unnecessary delay, it is understood that, at our request, any Shares
resold by us to one of our customers will be delivered (whether by credit
to a shareholder open account or by delivery of certificates) in the name
of our customer.
PEP 80 (5-92)
<PAGE>
7. We understand that on all purchases of Shares to which the terms of this
Agreement are applicable by a person for whom we are dealer of record, you
will pay us an amount equal to the Dealer Discount or fees which would
have been paid to us with respect to such Shares if such Shares had been
purchased through us. We understand and agree that the dealer of record
for this purpose shall be the dealer through whom such person most
recently purchased Shares of such fund. We understand that all amounts
payable to us under this paragraph and currently payable under this
agreement will be paid as of the end of each month unless specified
otherwise for the total amount of Shares to which this paragraph is
applicable but may be paid more frequently as you may determine in your
discretion.
8. You appoint the transfer agent for each of the Funds as your agent to
execute the purchase transaction of Shares and to confirm such purchases
to our customers on our behalf, and we guarantee the legal capacity of our
customers so purchasing such shares. We further understand if a customer's
account is established without the customer signing the application form,
we represent that the instructions relating to the registration and
shareholder options selected (whether on the application form, in some
other document or orally) are in accordance with the customer's
instructions and we agree to indemnify the Funds, the transfer agent and
you for any loss or liability resulting from acting upon such
instructions.
9. Upon the purchase of Shares pursuant to a Letter of Intent, we will
promptly return to you any excess of the Dealer Discount previously
allowed or paid to us over that allowable in respect to such larger
purchase.
10. Unless at the time of transmitting a purchase order we advise you to the
contrary, you may consider that the investor owns no other Shares and may
further assume that the investor is not entitled to any lower sales charge
than that accorded to a single transaction in the amount of the purchase
order as set forth in Annex A hereto.
11. We understand and agree that if any Shares purchased by us under the terms
of this Agreement are, within seven (7) business days after the date of
your confirmation to us of the original purchase order for such shares,
repurchased by you as agent for such fund or are tendered to such fund for
redemption, we shall forfeit the right to, and shall pay over to you the
amount of, any Dealer Discount allowed to us with respect to such Shares.
It is understood that you will forthwith pay over such amount to such fund
and also shall pay over to such fund your share of the Sales Charge, if
any, on the original transaction. We understand that you will notify us of
such repurchase or redemption within ten (10) days of the date upon which
certificates are delivered to you or to such fund or the date upon which
the holder of Shares held in a shareholder open account places or causes
to be placed to you or with such fund an order to have such Shares
repurchased or redeemed.
12. We agree that, in the case of any repurchase of any Shares made more than
seven (7) business days after confirmation by you of any purchase of such
Shares, except in the case of Shares purchased by us from you for our own
bona fide investment, we will act only as agent for the holders of such
Shares and will place the orders for repurchase only with you. It is
understood that we may charge the holder of such Shares a fair commission
for handling the transaction.
13. Your obligations to us under this Agreement are subject to all the
provisions of the respective distribution agreements entered into between
you and each of the Funds. We understand and agree that in performing our
services under this agreement we are acting in the capacity of an
independent contractor, and you are in no way responsible for the manner
of our performance or for any of our acts or omissions in connection
therewith. Nothing in the Agreement shall be construed to constitute us or
any of our agents, employees or representatives as your agent, partner or
employee or the agent, partner or employee of any of the Funds.
14. We understand that you will supply us with reasonable quantities of the
current prospectus and periodic reports to shareholders for each of the
Funds. We agree not to use any other advertising or sales material
relating to the sale of shares of any of the Funds unless other
advertising or sales material is approved in writing by you.
<PAGE>
15. We shall offer and sell Shares, and execute telephone exchanges, only in
accordance with the terms and conditions of the then current prospectus of
each of the Funds and subject to the provisions of this Agreement, and we
will make no representations not contained in any such prospectus or in
any authorized supplemental material supplied by you. We will use our best
efforts in the development and promotion of sales of the Shares covered by
this Agreement, and agree to be responsible for the proper instruction and
training of all sales representatives employed by us in order that such
Shares will be offered in accordance with terms and conditions of this
Agreement and all applicable laws, rules and regulations. We agree to hold
you harmless and indemnify you in the event that we or any of our sales
representatives should violate any law, rule or regulation or any
provisions of this Agreement which may result in possible liability to
you. In addition, in consideration for the extension of the right to
exercise the telephone exchange privilege to us and our registered
representatives, we acknowledge that neither the Funds nor the Transfer
Agent nor Equity Planning will be liable for any loss, injury or damage
incurred as a result of acting upon, nor will they be responsible for the
authenticity of any telephone instructions, and agree that we will
indemnify and hold harmless the Funds, Equity Planning and the Transfer
Agent against any loss, injury or damage resulting from any telephone
exchange instruction from us or our registered representatives. (Telephone
instructions will be recorded on tape.) In the event you determine to
refund any amounts paid by any investor by reason of any such violation on
our part, we shall forfeit the right to, and pay over to you, the amount
of any dealer discount allowed to us with respect to the transaction for
which the refund is made. All expenses which we incur in connection with
our activities under this Agreement shall be borne by us.
16. We represent that we are properly registered as a broker or dealer under
the Securities Exchange Act of 1934 and are members of the National
Assocation of Securities Dealers, Inc. ("NASD") and agree to maintain
membership in the NASD or, in the alternative, that we are foreign dealers
not eligible for membership in the NASD. We agree to notify you promptly
of any change, termination, or suspension of the foregoing status. We
agree to abide by all the rules and regulations of the NASD including
Section 26 of Article III of the Rules of Fair Practice which is
incorporated herein by reference as if set forth in full. We further agree
to comply with all applicable state and Federal laws and the rules and
regulations of applicable regulatory agencies. We further agree that we
will not sell, or offer for sale, Shares in any state or jurisdiction in
which such Shares have not been duly registered or qualified for sale.
17. Either party may terminate this Agreement for any reason by written or
telegraphic notice to the other party which termination shall become
effective fifteen (15) days after the date of mailing or telegraphing such
notice to the other party. You may also terminate this Agreement for cause
or as a result of a violation by us, as determined by you in your
discretion, of any of the provisions of this Agreement, said termination
to be effective on the date of mailing written or telegraphing notice to
us of the same. Without limiting the generality of the foregoing, our own
expulsion from the NASD will automatically terminate this Agreement
without notice. Our suspension from the NASD of violation or applicable
state or Federal laws or rules and regulations of applicable regulatory
agencies will terminate this Agreement effective upon the date of your
mailing written notice or telegraphing notice to us of such termination.
Your failure to terminate this Agreement for any cause shall not
constitute a waiver of your right to so terminate at a later date for such
cause.
18. We understand and agree that all communications and notices to you or to
us shall be sent to the addresses set forth at the beginning of this
Agreement or to such other addresses as either party may specify in
writing from time to time.
19. This Agreement shall become effective upon the date of its acceptance by
you as set forth herein. This Agreement and all rights and obligations of
the parties hereunder shall be governed by and construed under the laws of
the State of Connecticut. This Agreement is not assignable or
transferable, except that you may assign or transfer this Agreement to any
successor distributor of the Shares described herein.
<TABLE>
<S> <C>
ACCEPTED ON BEHALF OF
PHOENIX EQUITY PLANNING CORPORATION DEALER FIRM
Date_______________________________________________________ ________________________________________________________________
NAME OF DEALER
By John W. Filoon, Jr., Snr. Vice Pres., Sales & Mktg.
___________________________________________________________ Date ___________________________________________________________
NAME AND TITLE
By _____________________________________________________________
NAME AND TITLE
/s/ John W. Filoon,Jr.
___________________________________________________________ ________________________________________________________________
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
NASD - CRD - NUMBER _____________________________________
</TABLE>
<PAGE>
ANNEX A
DEALER'S AGREEMENT WITH
PHOENIX EQUITY PLANNING CORPORATION
The public offering price of CLASS A Shares of all Series of the Phoenix Series
Fund (except the Money Market Fund Series) all Portfolios of the Phoenix
Multi-Portfolio Fund and the Phoenix Total Return Fund Inc., is the net asset
value plus a sales charge. The offering price so determined becomes effective
after the purchase order is received by Equity Planning or the Trust's agent,
State Street Bank and Trust Company. The sales charge is reduced on a graduated
scale on single purchases of $50,000 or more as shown below:
<TABLE>
CLASS A SHARES
- --------------
SALES CHARGE SALES CHARGE DEALER DISCOUNT OR AGENCY
AMOUNT OF TRANSACTION AS PERCENTAGE AS PERCENTAGE FEE AS PERCENTAGE
AT OFFERING PRICE OF OFFERING PRICE OF AMOUNT INVESTED OF OFFERING PRICE*
- ----------------- ----------------- ------------------ ------------------
<S> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.25%
$50,000 but under $100,000 4.50% 4.71% 4.00%
$100,000 but under $250,000 3.50% 3.63% 3.00%
$250,000 but under $500,000 3.00% 3.09% 2.75%
$500,000 but under $1,000,000 2.00% 2.04% 1.75%
$1,000,000 or more . . . None None (see below*)
</TABLE>
*In connection with purchase of CLASS A shares of $1,000,000 or more (and
subsequent purchases in any amount) including purchases of shares of the Phoenix
Money Market Fund Series, Equity Planning may pay broker-dealers from its own
profits and resources, a percentage of the net asset value of any shares sold
(excluding Phoenix Money Market Fund Series) as set forth below:
PURCHASE AMOUNT PAYMENT TO BROKER/DEALERS
- --------------- -------------------------
$1,000,000 - $2,000,000 .75 of 1%
$2,000,000 - $4,000,000 .50 of 1%
$4,000,000 or more .25 of 1%
EFFECTIVE JANUARY 1, 1994: CLASS B shares will be offered on sales of shares of
the PHOENIX HIGH YIELD FUND SERIES AND PHOENIX U.S. GOVERNMENT FUND SERIES both
of which are Series of the Phoenix Series Fund, on sales of Shares of the
PHOENIX TAX EXEMPT BOND PORTFOLIO which is a Portfolio of the Phoenix
Multi-Portfolio Fund and on shares of the PHOENIX TOTAL RETURN FUND INC. Class B
shares are sold at net asset value per share without the imposition of a sales
charge at the time of purchase. Shares which are redeemed within six years of
purchase will be subject to a contingent deferred sales charge, as described in
the Fund's current prospectus, at the rates set forth below:
CLASS B SHARES:
- ---------------
CONTINGENT DEFERRED SALES CHARGE
AS A PERCENTAGE OF DOLLAR AMOUNT
YEARS SINCE PURCHASE SUBJECT TO CHARGE
- -------------------- -----------------
First 4%
Second 4%
Third 3%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh 0
PHOENIX FUNDS DISTRIBUTION PLAN
- -------------------------------
Under their respective Distribution Plans, each of the Phoenix Funds may pay
Equity Planning an amount annually not to exceed a certain percentage of the
average daily net assets of the Fund, as shown below. Equity Planning may pay to
qualifying dealers an amount up to this percentage of the average daily net
assets in qualifying shares sold by such dealers as described in the Fund's
prospectus.
<PAGE>
FUND NAME DISTRIBUTION PLAN
- --------- -----------------
PHOENIX SERIES FUND CLASS A .25% CLASS B .75%
PHOENIX MULTI-PORTFOLIO FUND .25% .75%
PHOENIX TOTAL RETURN FUND .25% .75%
*Equity Planning may sponsor sales contests and provide to all qualifying
dealers from its own profits and resources, additional compensation in the form
of trips and merchandise. Brokers or dealers other than Equity Planning may also
make customary additional charges for their Services in effecting purchases, if
they notify the Trust of their intention to do so.
Exhibit 8.1
Custodian Contract
<PAGE>
120287-1
CUSTODIAN CONTRACT
Between
PHOENIX TOTAL RETURN FUND, INC.
and
STATE STREET BANK AND TRUST COMPANY
SCG 05/87
WP0496c
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
1. Employment of Custodian and Property to be
Held By It....................................................... 1
2. Duties of the Custodian with Respect to Property of
the Fund Held by the Custodian in the United States.............. 2
2.1 Holding Securities...................................... 2
2.2 Delivery of Securities.................................. 3
2.3 Registration of Securities.............................. 7
2.4 Bank Accounts........................................... 8
2.5 Availability of Federal Funds........................... 9
2.6 Collection of Income.................................... 9
2.7 Payment of Fund Monies.................................. 10
2.8 Liability for Payment in Advance of
Receipt of Securities Purchased......................... 13
2.9 Appointment of Agents................................... 13
2.10 Deposit of Securities in Securities System.............. 13
2.10A Fund Assets Held in the Custodian's Direct
Paper System............................................ 16
2.11 Segregated Account...................................... 18
2.12 Ownership Certificates for Tax Purposes................. 19
2.13 Proxies................................................. 19
2.14 Communications Relating to Fund
Portfolio Securities.................................... 20
2.15 Reports to Fund by Independent Public
Accounts................................................ 20
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States....................... 21
3.1 Appointment of Foreign Sub-Custodians................... 21
3.2 Assets to be Held....................................... 22
3.3 Foreign Securities Depositories......................... 22
3.4 Segregation of Securities............................... 22
3.5 Agreements with Foreign Banking Institutions............ 23
3.6 Access of Independent Accountants of the Fund........... 24
3.7 Reports by Custodian.................................... 24
3.8 Transactions in Foreign Custody Account................. 24
3.9 Liability of Foreign Sub-Custodians..................... 25
3.10 Liability of Custodian.................................. 26
3.11 Reimbursement for Advances.............................. 27
3.12 Monitoring Responsibilities............................. 27
3.13 Branches of U.S. Banks.................................. 28
4. Payments for Repurchases or Redemptions and Sales
of Shares of the Fund............................................ 29
5. Proper Instructions.............................................. 30
6. Actions Permitted Without Express Authority...................... 30
7. Evidence of Authority............................................ 31
<PAGE>
8. Duties of Custodian with Respect to the Books of
Account and Calculations of Net Asset Value and
Net Income....................................................... 31
9. Records.......................................................... 32
10. Opinion of Fund's Independent Accountant......................... 33
11. Compensation of Custodian........................................ 33
12. Responsibility of Custodian...................................... 33
13. Effective Period, Termination and Amendment...................... 35
14. Successor Custodian.............................................. 37
15. Interpretive and Additional Provisions........................... 38
16. Massachusetts Law to Apply....................................... 39
17. Prior Contracts.................................................. 39
<PAGE>
CUSTODIAN CONTRACT
This Contract between Phoenix Total Return Fund, Inc., a corporation
organized and existing under the laws of Massachusetts, having its principal
place of business at 101 Munson Street, Greenfield, Massachusetts, 01301,
hereinafter called the "Fund", and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian",
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby employs the Custodian as the custodian of its assets,
including securities it desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Articles of
Incorporation. The Fund agrees to deliver to the Custodian all securities and
cash owned by it, and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the Fund
from time to time, and the cash consideration received by it for such new or
treasury shares of capital stock, $1.00 par value, ("Shares") of the Fund as may
be issued or sold from time to time. The Custodian shall not be responsible for
any property of the Fund held or received by the Fund and not delivered to the
Custodian.
<PAGE>
Upon receipt of "Proper Instructions" (within the meaning of Article
5), the Custodian shall from time to time employ one or more sub-custodians
located in the United States, but only in accordance with an applicable vote by
the Board of Directors of the Fund, and provided that the Custodian shall have
no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodians has to the Custodian. The Custodian may employ as sub-custodians
for the Fund's securities and other assets the foreign banking institutions and
foreign securities depositories designated in Schedule "A" hereto but only in
accordance with the provisions of Article 3.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY
THE CUSTODIAN IN THE UNITED STATES
2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate
for the account of the Fund all non-cash property, to be held by it in
the United States, including all domestic securities owned by the Fund,
other than (a) securities which are maintained pursuant to Section 2.10
in a clearing agency which acts as a securities depository or in a
book-entry system authorized by the U.S. Department of the Treasury,
collectively referred to herein as "Securities System" and (b)
commercial paper of an issuer for which State Street Bank and Trust
Company acts as issuing and paying agent ("Direct Paper") which is
deposited and/or maintained in the Direct Paper System of the Custodian
pursuant to Section 2.10A.
-2-
<PAGE>
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
domestic securities owned by the Fund held by the Custodian or in a
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only
upon receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by the parties, and only in the
following cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered into
by the Fund;
3) In the case of a sale effected through a Securities System,
in accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Fund or into
-3-
<PAGE>
the name of any nominee or nominees of the Custodian or into
the name or nominee name of any agent appointed pursuant to
Section 2.9 or into the name or nominee name of any
sub-custodian appointed pursuant to Article 1; or for
exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount
or number of units; PROVIDED that, in any such case, the new
securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the
Fund, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise
from the Custodian's own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer
-4-
<PAGE>
of such securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights
or similar securities or the surrender of interim receipts
or temporary securities for definitive securities; provided
that, in any such case, the new securities and cash, if any,
are to be delivered to the Custodian;
l0) For delivery in connection with any loans of securities made
by the Fund, BUT ONLY against receipt of adequate collateral
as agreed upon from time to time by the Custodian and the
Fund, which may be in the form of cash or obligations issued
by the United States government, its agencies or
instrumentalities or irrevocable letters of credit;
provided, however, the Custodian shall not be held liable or
responsible where it receives Proper Instructions for the
delivery of securities owned by the Portfolio and delivers
such securities prior to the receipt of such collateral;
-5-
<PAGE>
11) For delivery as security in connection with any borrowings
by the Fund requiring a pledge of assets by the Fund, BUT
ONLY against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 (the
"Exchange Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance
with the rules of The Options Clearing Corporation and of
any registered national securities exchange, or of any
similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the
Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian, and a Futures
Commission Merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any Contract Market, or
any similar organization or organizations, regarding account
deposits in connection with transactions by the Fund;
-6-
<PAGE>
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such
Transfer Agent or to the holders of shares in connection
with distributions in kind, as may be described from time to
time in the Fund's currently effective prospectus and
statement of additional information ("prospectus"), in
satisfaction of requests by holders of Shares for repurchase
or redemption; and
15) For any other proper corporate purpose, BUT ONLY upon
receipt of, in addition to Proper Instructions, a copy of a
resolution of the Board of Directors or of the Executive
Committee signed by an officer of the Fund and certified by
the Secretary or an Assistant Secretary, specifying the
securities to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purpose to
be a proper corporate purpose, and naming the person or
persons to whom delivery of such securities shall be made.
2.3 REGISTRATION OF SECURITIES. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Fund or in the name of any nominee of the Fund or of any nominee of the
Custodian
-7-
<PAGE>
which nominee shall be assigned exclusively to the Fund, UNLESS the
Fund has authorized in writing the appointment of a nominee to be used
in common with other registered investment companies having the same
investment adviser as the Fund, or in the name or nominee name of any
agent appointed pursuant to Section 2.9 or in the name or nominee name
of any sub-custodian appointed pursuant to Article 1. All securities
accepted by the Custodian on behalf of the Fund under the terms of this
Contract shall be in "street name" or other good delivery form.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of the Fund,
subject only to draft or order by the Custodian acting pursuant to the
terms of this Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or for
the account of the Fund, other than cash maintained by the Fund in a
bank account established and used in accordance with Rule 17f-3 under
the Investment Company Act of 1940. Funds held by the Custodian for the
Fund may be deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust companies
as it may in its discretion deem necessary or desirable; PROVIDED,
however, that every such bank or trust company shall be qualified to
act as a custodian under the Investment Company Act of 1940 and that
each such bank or trust company and the funds to be
-8-
<PAGE>
deposited with each such bank or trust company shall be approved by
vote of a majority of the Board of Directors of the Fund. Such funds
shall be deposited by the Custodian in its capacity as Custodian and
shall be withdrawable by the Custodian only in that capacity.
2.5 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between the Fund
and the Custodian, the Custodian shall, upon the receipt of Proper
Instructions, make federal funds available to the Fund as of specified
times agreed upon from time to time by the Fund and the Custodian in
the amount of checks received in payment for Shares of the Fund which
are deposited into the Fund's account.
2.6 COLLECTION OF INCOME. The Custodian shall collect on a timely basis all
income and other payments with respect to United States registered
securities held hereunder to which the Fund shall be entitled either by
law or pursuant to custom in the securities business, and shall collect
on a timely basis all income and other payments with respect to United
States bearer securities if, on the date of payment by the issuer, such
securities are held by the Custodian or its agent thereof and shall
credit such income, as collected, to the Fund's custodian account.
Without limiting the generality of the foregoing, the Custodian shall
detach and present for payment all coupons and other income items
requiring presentation as and when they become due and shall collect
interest when due on securities held hereunder.
-9-
<PAGE>
Income due the Fund on United States securities loaned pursuant to the
provisions of Section 2.2 (10) shall be the responsibility of the Fund.
The Custodian will have no duty or responsibility in connection
therewith, other than to provide the Fund with such information or data
as may be necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the Fund is properly
entitled.
2.7 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Fund in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of
the Fund but only (a) against the delivery of such
securities, or evidence of title to such options, futures
contracts or options on futures contracts, to the Custodian
(or any bank, banking firm or trust company doing business
in the United States or abroad which is qualified under the
Investment Company Act of 1940, as amended, to act as a
custodian and has been designated by the Custodian as its
agent for this purpose) registered in the name of the Fund
or in the name of a nominee of the Custodian referred to in
Section 2.3
-10-
<PAGE>
hereof or in proper form for transfer; (b) in the case of a
purchase effected through a Securities System, in accordance
with the conditions set forth in Section 2.10 hereof or (c)
in the case of a purchase involving the Direct Paper System,
in accordance with the conditions set forth in Section
2.10A; or (d) in the case of repurchase agreements entered
into between the Fund and the Custodian, or another bank, or
a broker-dealer which is a member of NASD, (i) against
delivery of the securities either in certificate form or
through an entry crediting the Custodian's account at the
Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Fund of
securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase
such securities from the Fund;
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued by the
Fund as set forth in Article 4 hereof;
-11-
<PAGE>
4) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments
for the account of the Fund: interest, taxes, management,
accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be
in whole or part capitalized or treated as deferred
expenses;
5) For the payment of any dividends declared pursuant to the
governing documents of the Fund;
6) For payment of the amount of dividends received in respect
of securities sold short;
7) For the purpose of investing in Foreign and Domestic Time
Deposits, but only upon receipt of a non-negotiable receipt
as evidence of payment;
8) For any other proper purpose, BUT ONLY upon receipt of, in
addition to Proper Instructions, a certified copy of a
resolution of the Board of Directors or of the Executive
Committee of the Fund signed by an officer of the Fund and
certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth the
purpose for which such
-12-
<PAGE>
payment is to be made, declaring such purpose to be a proper
purpose, and naming the person or persons to whom such
payment is to be made.
2.8 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED. In
any and every case where payment for purchase of domestic securities
for the account of the Fund is made by the Custodian in advance of
receipt of the securities purchased in the absence of specific written
instructions from the Fund to so pay in advance, the Custodian shall be
absolutely liable to the Fund for such securities to the same extent as
if the securities had been received by the Custodian.
2.9 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such
of the provisions of this Article 2 as the Custodian may from time to
time direct; PROVIDED, however, that the appointment of any agent shall
not relieve the Custodian of its responsibilities or liabilities
hereunder.
2.10 DEPOSIT OF SECURITIES IN SECURITIES SYSTEMS. The Custodian may deposit
and/or maintain domestic securities owned by the Fund in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system
-13-
<PAGE>
authorized by the U.S. Department of the Treasury and certain federal
agencies, collectively referred to herein as "Securities System" in
accordance with applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and subject to
the following provisions:
1) The Custodian may keep domestic securities of the Fund in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in
the Securities System which shall not include any assets of
the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
2) The records of the Custodian with respect to domestic
securities of the Fund which are maintained in a Securities
System shall identify by book-entry those securities
belonging to the Fund;
3) The Custodian shall pay for domestic securities purchased
for the account of the Fund upon (i) receipt of advice from
the Securities System that such securities have been
transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such payment and
transfer for the account of the Fund. The
-14-
<PAGE>
Custodian shall transfer domestic securities sold for the
account of the Fund upon (i) receipt of advice from the
Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all advices
from the Securities System of transfers of domestic
securities for the account of the Fund shall identify the
Fund, be maintained for the Fund by the Custodian and be
provided to the Fund at its request. Upon request, the
Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund in the form of a
written advice or notice and shall furnish to the Fund
copies of daily transaction sheets reflecting each days
transactions in the Securities System for the account of the
Fund.
4) The Custodian shall provide the Fund with any report
obtained by the Custodian on the Securities System's
accounting system, internal accounting control and
procedures for safeguarding domestic securities deposited in
the Securities System;
-15-
<PAGE>
5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 13
hereof;
6) Anything to the contrary in this Contract notwithstanding,
the Custodian shall be liable to the Fund for any loss or
damage to the Fund resulting from use of the Securities
System by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or of any
of its or their employees or from failure of the Custodian
or any such agent to enforce effectively such rights as it
may have against the Securities System; at the election of
the Fund, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claim against
the Securities System or any other person which the
Custodian may have as a consequence of any such loss or
damage if and to the extent that the Fund has not been made
whole for any such loss or damage.
2.10A FUND ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM. The Custodian
may deposit and/or maintain securities owned by the Fund in the Direct
Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper
Instructions;
-16-
<PAGE>
2) The Custodian may keep securities of the Fund in the Direct
Paper System only if such securities are represented in an
account ("Account") of the Custodian in the Direct Paper
System which shall not include any assets of the Custodian
other than assets held as a fiduciary, custodian or
otherwise for customers;
3) The records of the Custodian with respect to securities of
the Fund which are maintained in the Direct Paper System
shall identify by book-entry those securities belonging to
the Fund;
4) The Custodian shall pay for securities purchased for the
account of the Fund upon the making of an entry on the
records of the Custodian to reflect such payment and
transfer of securities to the account of the Fund. The
Custodian shall transfer securities sold for the account of
the Fund upon the making of an entry on the records of the
Custodian to reflect such transfer and receipt of payment
for the account of the Fund;
5) The Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund, in the form of
a written
-17-
<PAGE>
advice or notice, of Direct Paper on the next business day
following such transfer and shall furnish to the Fund copies
of daily transaction sheets reflecting each day's
transaction in the Securities System for the account of the
Fund;
6) The Custodian shall provide the Fund with any report on its
system of internal accounting control as the Fund may
reasonably request from time to time;"
2.11 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts
for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.10 hereof, (i) in
accordance with the provisions of any agreement among the Fund, the
Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of
The Options Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection
with transactions by the Fund, (ii) for purposes of
-18-
<PAGE>
segregating cash or government securities in connection with options
purchased, sold or written by the Fund or commodity futures contracts
or options thereon purchased or sold by the Fund, (iii) for the
purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or
releases of the Securities and Exchange Commission relating to the
maintenance of segregated accounts by registered investment companies
and (iv) for other proper corporate purposes, BUT ONLY, in the case of
clause (iv) upon receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board of Directors or of the
Executive Committee signed by an officer of the Fund and certified by
the Secretary or an Assistant Secretary, setting forth the purpose or
purposes of such segregated account and declaring such purposes to be
proper corporate purposes.
2.12 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to domestic securities of the Fund held by it and
in connection with transfers of such securities.
2.13 PROXIES. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder
of such securities, if the securities are registered otherwise than in
the name
-19-
<PAGE>
of the Fund or a nominee of the Fund, all proxies, without indication
of the manner in which such proxies are to be voted, and shall promptly
deliver to the Fund such proxies, all proxy soliciting materials and
all notices relating to such securities.
2.14 COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES. The Custodian
shall transmit promptly to the Fund all written information (including,
without limitation, pendency of calls ant maturities of domestic
securities and expirations of rights in connection therewith and
notices of exercise of call and put options written by the Fund and the
maturity of futures contracts purchased or sold by the Fund) received
by the Custodian from issuers of the domestic securities being held for
the Fund. With respect to tender or exchange offers, the Custodian
shall transmit promptly to the Fund all written information received by
the Custodian from issuers of the domestic securities whose tender or
exchange is sought and from the party (or his agents) making the tender
or exchange offer. If the Fund desires to take action with respect to
any tender offer, exchange offer or any other similar transaction, the
Fund shall notify the Custodian at least three business days prior to
the date on which the Custodian is to take such action.
2.15 REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS. The Custodian shall
provide the Fund, at such times as the Fund may reasonably require,
with reports by
-20-
<PAGE>
independent public accountants on the accounting system, internal
accounting control and procedures for safeguarding securities, futures
contracts and options on futures contracts, including domestic
securities deposited and/or maintained in a Securities System, relating
to the services provided by the Custodian under this Contract; such
reports shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide reasonable assurance that
any material inadequacies would be disclosed by such examination, and,
if there are no such inadequacies, the reports shall so state.
3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD
OUTSIDE OF THE UNITED STATES
3.1 APPOINTMENT OF FOREIGN SUB-CUSTODIANS. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for the Fund's
securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories
designated on Schedule A hereto ("foreign sub-custodians"). Upon
receipt of "Proper Instructions", as defined in Section 5 of this
Contract, together with a certified resolution of the Fund's Board of
Directors, the Custodian and the Fund may agree to amend Schedule A
hereto from time to time to designate additional foreign banking
institutions and foreign securities depositories to act as
sub-custodian. Upon receipt of Proper
-21-
<PAGE>
Instructions, the Fund may instruct the Custodian to cease the
employment of any one or more of such sub-custodians for maintaining
custody of the Fund's assets.
3.2 ASSETS TO BE HELD. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in paragraph (c)(1) of Rule 17f-5
under the Investment Company Act of 1940, and (b) cash and cash
equivalents in such amounts as the Custodian or the Fund may determine
to be reasonably necessary to effect the Fund's foreign securities
transactions.
3.3 FOREIGN SECURITIES DEPOSITORIES. Except as may otherwise be agreed upon
in writing by the Custodian and the Fund, assets of the Fund shall be
maintained in foreign securities depositories only through arrangements
implemented by the foreign banking institutions serving as
sub-custodians pursuant to the terms hereof. Where possible, such
arrangements shall include entry into agreements containing the
provisions set forth in Section 3.5 hereof.
3.4 SEGREGATION OF SECURITIES. The Custodian shall identify on its books as
belonging to the Fund, the foreign securities of the Fund held by each
foreign sub-custodian. Each agreement pursuant to which the Custodian
employs a foreign banking institution shall require that such
institution establish a custody account
-22-
<PAGE>
for the Custodian on behalf of the Fund and physically segregate in
that account, securities and other assets of the Fund, and, in the
event that such institution deposits the Fund's securities in a foreign
securities depository, that it shall identify on its books as belonging
to the Custodian, as agent for the Fund, the securities so deposited.
3.5 AGREEMENTS WITH FOREIGN BANKING INSTITUTIONS. Each agreement with a
foreign banking institution shall be substantially in the form set
forth in Exhibit l hereto and shall provide that: (a) the Fund's assets
will not be subject to any right, charge, security interest, lien or
claim of any kind in favor of the foreign banking institution or its
creditors or agent, except a claim of payment for their safe custody or
administration; (b) beneficial ownership for the Fund's assets will be
freely transferable without the payment of money or value other than
for custody or administration; (c) adequate records will be maintained
identifying the assets as belonging to the Fund; (d) officers of or
auditors employed by, or other representatives of the Custodian,
including to the extent permitted under applicable law the independent
public accountants for the Fund, will be given access to the books and
records of the foreign banking institution relating to its actions
under its agreement with the Custodian; and (e) assets of the Fund held
by the foreign sub-custodian will be subject only to the instructions
of the Custodian or its agents.
-23-
<PAGE>
3.6 ACCESS OF INDEPENDENT ACCOUNTANTS OF THE FUND. Upon request of the
Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books
and records of any foreign banking institution employed as a foreign
sub-custodian insofar as such books and records relate to the
performance of such foreign banking institutions under its agreement
with the Custodian.
3.7 REPORTS BY CUSTODIAN. The Custodian will supply to the Fund from time
to time, as mutually agreed upon, statements in respect of the
securities and other assets of the Fund held by foreign sub-custodians,
including but not limited to an identification of entities having
possession of the Fund's securities and other assets and advices or
notifications of any transfers of securities to or from each custodial
account maintained by a foreign banking institution for the Custodian
on behalf of the Fund indicating, as to securities acquired for the
Fund, the identity of the entity having physical possession of such
securities.
3.8 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT. (a) Except as otherwise
provided in paragraph (b) of this Section 3.8, the provision of
Sections 2.2 and 2.7 of this Contract shall apply, MUTATIS MUTANDIS to
the foreign securities of the Fund held outside the United States by
foreign sub-custodians.
-24-
<PAGE>
(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of the
Fund and delivery of securities maintained for the account of the Fund
may be effected in accordance with the customary or established
securities trading or securities processing practices and procedures in
the jurisdication or market in which the transaction occurs, including,
without limitation, delivering securities to the purchaser thereof or
to a dealer therefor (or an agent for such purchaser or dealer) against
a receipt with the expectation of receiving later payment for such
securities from such purchaser or dealer. (c) Securities maintained in
the custody of a foreign sub-custodian may be maintained in the name of
such entity's nominee to the same extent as set forth in Section 2.3 of
this Contract and the Fund agrees to hold any such nominee harmless
from any liability as a holder of record of such securities.
3.9 LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which
the Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold harmless,
the Custodian and Fund from and against any loss, damage, cost,
expense, liability or claim arising out of or in connection with the
institution's performance of such obligations. At the election of the
-25-
<PAGE>
Fund, it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claims against a foreign banking
institution as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Fund has not been made
whole for any such loss, damage, cost, expense, liability or claim.
3.10 LIABILITY OF CUSTODIAN. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a
U.S. bank as contemplated by paragraph 3.13 hereof, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim
resulting from nationalization, expropriation, currency restrictions,
or acts of war or terrorism or otherwise resulting from a bank or a
securities depository failure to exercise reasonable care.
Notwithstanding the foregoing provisions of this paragraph 3.10, in
delegating custody duties to State Street London Ltd., the Custodian
shall not be relieved of any responsibility to the Fund for any loss
due to such delegation, except such loss as may result from (a)
political risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization
insurrection, civil strife or armed
-26-
<PAGE>
hostilities) or (b) other risk of loss (excluding a bankruptcy or
insolvency of State Street London Ltd. not caused by political risk)
for which neither the Custodian nor State Street London Ltd. would be
liable (including, but not limited to, losses due to Acts of God,
nuclear incident or other losses under circumstances where the
Custodian and State Street London Ltd. have exercised reasonable care).
3.11 REIMBURSEMENT FOR ADVANCES. If the Fund requires the Custodian to
advance cash or securities for any purpose including the purchase or
sale of foreign exchange or of contracts for foreign exchange, or in
the event that the Custodian or its nominee shall incur or be assessed
any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as may
arise from its or its nominee's own negligent action, negligent failure
to act or willful misconduct, any property at any time held for the
account of the Fund shall be security therefor and should the Fund fail
to repay the Custodian promptly, the Custodian shall be entitled to
utilize available cash and to dispose of the Fund assets to the extent
necessary to obtain reimbursement.
3.12 MONITORING RESPONSIBILITIES. The Custodian shall furnish annually to
the Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
-27-
<PAGE>
similar in kind and scope to that furnished to the Fund in connection
with the initial approval of this Contract. In addition, the Custodian
will promptly inform the Fund in the event that the Custodian learns of
a material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or in the
case of any foreign sub-custodian not the subject of an exemption order
from the Securities Exchange Commission is notified by such foreign
sub-custodian that there appears to be a substantial likelihood that
its shareholders' equity will decline below $200 million (U.S. dollars
or the equivalent thereof) or that its shareholders' equity has
declined below $200 million (in each case computed in accordance with
generally accepted U.S. accounting principles).
3.13 BRANCHES OF U.S. BANKS. (a) Except as otherwise set forth in this
Contract, the provisions hereof shall not apply where the custody of
the Fund assets maintained in a foreign branch of a banking institution
which is a "bank" as defined by Section 2(a) (5) of the Investment
Company Act of 1940 which meets the qualification set forth in Section
26(a) of said Act. The appointment of any such branch as a
sub-custodian shall be governed by Article 1 of this Contract. (b) Cash
held for the Fund in the United Kingdom shall be maintained in an
interest bearing account established for the Fund with the Custodian's
London branch, which account shall be subject
-28-
<PAGE>
to the direction of the Custodian, State Street London Ltd. or both.
4. PAYMENTS FOR REPURCHASES OR REDEMPTIONS AND SALES OF
SHARES OF THE FUND
From such funds as may be available for the purpose but subject to the
limitations of the Articles of Incorporation and any applicable votes of the
Board of Directors of the Fund pursuant thereto, the Custodian shall, upon
receipt of instruction from the Transfer Agent, make funds available for payment
to holders of Shares who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares. In connection with the redemption or
repurchase of Shares of the Fund, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares of the Fund, the Custodian shall honor checks drawn on
the Custodian by a holder of Shares, which checks have been furnished by the
Fund to the holder of Shares, when presented to the Custodian in accordance with
such procedures and controls as are mutually agreed upon from time to time
between the Fund and the Custodian.
The Custodian shall receive from the distributor for the Fund's Shares
or from the Transfer Agent of the Fund and deposit into the Fund's account such
payments as are received for Shares of the Fund issued or sold from time to time
by the Fund. The Custodian will provide timely notification to the Fund and the
Transfer Agent of any receipt by it of payments for Shares of the Fund.
-29-
<PAGE>
5. PROPER INSTRUCTIONS
Proper Instructions as used herein means a writing signed or initialed
by one or more person or persons as the Board of Directors shall have from time
to time authorized. Each such writing shall set forth the specific transaction
or type of transaction involved, including a specific statement of the purpose
for which such action is requested. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. The Fund shall cause all oral instructions to be confirmed in writing.
Upon receipt of a certificate of the Secretary or an Assistant Secretary as to
the authorization by the Board of Directors of the Fund accompanied by a
detailed description of procedures approved by the Board of Directors, Proper
Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Board of Directors
and the Custodian are satisfied that such procedures afford adequate safeguards
for the Fund's assets.
6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from the
Fund:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Contract, PROVIDED that all such payments
shall be accounted for to the Fund;
-30-
<PAGE>
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Fund except as otherwise directed by the Board of
Directors of the Fund.
7. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed by or on behalf of the Fund.
The Custodian may receive and accept a certified copy of a vote of the Board of
Directors of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Directors pursuant to the Articles of Incorporation as described
in such vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
8. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Directors of the Fund to keep
the books of account of the Fund and/or compute the net asset value per share of
the outstanding
-31-
<PAGE>
shares of the Fund or, if directed in writing to do so by the Fund, shall itself
keep such books of account and/or compute such net asset value per share. If so
directed, the Custodian shall also calculate daily the net income of the Fund as
described in the Fund's currently effective prospectus and shall advise the Fund
and the Transfer Agent daily of the total amounts of such net income and, if
instructed in writing by an officer of the Fund to do so, shall advise the
Transfer Agent periodically of the division of such net income among its various
components. The calculations of the net asset value per share and the daily
income of the Fund shall be made at the time or times described from time to
time in the Fund's currently effective prospectus.
9. RECORDS
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All such records shall be the
property of the Fund and shall at all times during the regular business hours of
the Custodian be open for inspection by duly authorized officers, employees or
agents of the Fund and employees and agents of any regulatory agency. The
Custodian shall, at the Fund's request, supply the Fund with a tabulation of
securities owned by the Fund and held by the Custodian and shall, when requested
to do so by
-32-
<PAGE>
the Fund and for such compensation as shall be agreed upon between the Fund and
the Custodian, include certificate numbers in such tabulations.
10. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Fund may from
time to time request, to obtain from year to year favorable opinions from the
Fund's independent accountants with respect to its activities hereunder in
connection with the preparation of the Fund's Form N-lA, and Form N-SAR or other
annual reports to the Securities and Exchange Commission and with respect to any
other requirements of such Commission.
11. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund and the Custodian.
12. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties.
The Custodian shall be held to the exercise of reasonable care in carrying out
the provisions of this Contract, but shall be kept indemnified by and shall be
without liability to the Fund for any action taken or omitted by it in good
faith
-33-
<PAGE>
without negligence. It shall be entitled to rely on and may act upon advice of
counsel (who may be counsel for the Fund) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
Notwithstanding the foregoing, the responsibility of the Custodian with respect
to redemptions effected by check shall be in accordance with a separate
Agreement entered into between the Custodian and the Fund.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to be provisions of Article 3 to the same
extent as set forth in Article 1 hereof with respect to sub-custodians located
in the United States and, regardless of whether assets are maintained in the
custody of a foreign banking institution, a foreign securities depository or a
branch of a U.S. bank as contemplated by paragraph 3.11 hereof, the Custodian
shall not be liable for any loss, damage, cost, expense, liability or claim
resulting from, or caused by, the direction of or authorization by the Fund to
maintain custody or any securities or cash of the Fund in a foreign country
including, but not limited to, losses resulting from nationalization,
expropriation, currency restrictions, or acts of war or terrorism.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable for the payment of money or incurring liability of some
-34-
<PAGE>
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian to advance cash or securities for
any purpose or in the event that the Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Fund shall be
security therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of the Fund
assets to the extent necessary to obtain reimbursement.
13. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; PROVIDED,
however that the Custodian shall not act under Section 2.10 hereof in the
absence of receipt of an initial certificate of the Secretary or an Assistant
Secretary that the Board of Directors of the Fund has approved the initial use
of a particular Securities System and the receipt of an annual
-35-
<PAGE>
certificate of the Secretary or an Assistant Secretary that the Board of
Directors has reviewed the use by the Fund of such Securities System, as
required in each case by Rule 17f-4 under the Investment Company Act of 1940, as
amended and that the Custodian shall not act under Section 2.10A hereof in the
absence of receipt of an initial certificate of the Secretary or an Assistant
Secretary that the Board of Directors has approved the initial use of the Direct
Paper System and the receipt of an annual certificate of the Secretary or an
Assistant Secretary that the Board of Directors has reviewed the use by the Fund
of the Direct Paper System; PROVIDED FURTHER, however, that the Fund shall not
amend or terminate this Contract in contravention of any applicable federal or
state regulations, or any provision of the Articles of Incorporation, and
further provided, that the Fund may at any time by action of its Board of
Directors (1) substitute another bank or trust company for the Custodian by
giving notice as described above to the Custodian, or (ii) immediately terminate
this Contract in the event of the appointment of a conservator or receiver for
the Custodian by the Comptroller of the Currency or upon the happening of a like
event at the direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Fund shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements.
-36-
<PAGE>
14. SUCCESSOR CUSTODIAN
If a successor custodian shall be appointed by the Board of Directors
of the Fund, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all securities then held by it hereunder and shall transfer to an
account of the successor custodian all of the Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Directors of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian and all instruments held by the Custodian
relative thereto and all other property held by it under this Contract and to
transfer to an account of such successor custodian all of the Fund's securities
held in any Securities System. Thereafter,
-37-
<PAGE>
such bank or trust company shall be the successor of the Custodian under this
Contract. State Street Bank shall use its best effort to assist the Fund with
obtaining a Custody Contract with a successor Custodian on terms substantially
similar to this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Directors to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
15. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Custodian and
the Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, PROVIDED that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Articles of Incorporation of the Fund. No interpretive or additional
provisions made as provided in the preceding sentence shall be deemed to be an
amendment of this Contract.
-38-
<PAGE>
16. MASSACHUSETTS LAW TO APPLY
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
17. PRIOR CONTRACTS
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund and the Custodian relating to the custody of
the Fund's assets.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 10th day of March, 1988.
ATTEST PHOENIX TOTAL RETURN FUND, INC.
/s/ Patricia O. McLaughlin By /s/
- ----------------------------- ----------------------------------
Assistant Secretary Vice President
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ J. Farrell By /s/ K. Bergeron
- ----------------------------- ----------------------------------
Assistant Secretary Vice President
-39-
Exhibit 8.2
Amendment to Custodian Contract
<PAGE>
AMENDMENT dated October 24, 1991, of a certain Custodian Agreement dated
March 10, 1988, (the "Custodian Agreement") between Phoenix Total Return Fund,
Inc. (the "Fund") and State Street Bank and Trust Company (the "Custodian").
WITNESSETH:
WHEREAS, the Fund and the Custodian desire to amend the Custodian
Agreement in order to provide for the lending of securities;
NOW, THEREFORE, the Fund and the Custodian hereby agree that said
Custodian Agreement shall be amended by adding the following new Section 18:
LOANS OF SECURITIES. As directed in writing by the Fund, the
Custodian shall participate in a securities lending program
sponsored and administered by the Custodian (the "Program"),
and in connection therewith, the Custodian is authorized to
release and deliver securities and return collateral received
for loaned securities in accordance with the provisions of the
Securities Lending Authorization Agreement between the Custodian
and the Fund.
IN WITNESS WHEREOF; the Fund and the Custodian have caused this amendment
to be executed and their seals affixed by their duly authorized representative,
as of the day and year first above written.
PHOENIX TOTAL RETURN FUND, INC.
ATTEST: /s/ Patricia O. McLaughlin By: /s/ Philip R. McLoughlin
-------------------------- ------------------------------
Title: Assistant Secretary Title: President
--------------------------- ---------------------------
STATE STREET BANK AND TRUST COMPANY
ATTEST: /s/ Denise M. Comeau By: /s/ Charles R. Whittemore Jr.
-------------------------- ------------------------------
Title: Assistant Secretary Title: Vice President
--------------------------- ---------------------------
78C389
WP1566/2
Exhibit 8.3
Amendment to Custodian Contract
<PAGE>
AMENDMENT TO CUSTODIAN CONTRACT
Agreement made by and between State Street Bank and Trust Company (the
"Custodian") and Phoenix Total Return Fund, Inc. (the "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated March 10, 1988 as amended October 24, 1991 (the "Custodian Contract")
governing the terms and conditions under which the Custodian maintains custody
of the securities and other assets of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the terms and
conditions under which the Custodian maintains the Fund's securities and other
non-cash property in the custody of certain foreign sub-custodians in conformity
with the requirements of Rule 17f-5 under the Investment Company Act of 1940, as
amended;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and provisions;
1. Notwithstanding any provisions to the contrary set forth in the
Custodian Contract, the Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provide however, that (i) the
records of the Custodian with respect to securities and other non-cash property
of the Fund which are maintained in such account shall identify by book-entry
those securities and other non-cash property belonging to the Fund and (ii) the
Custodian shall require that securities and other non-cash property so held by
the foreign sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.
2. Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force and
effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed as a sealed instrument in its name and behalf by its duly authorized
representative this 17th day of October, 1996.
PHOENIX TOTAL RETURN FUND, INC.
By: /s/ Michael E. Haylon
--------------------------------------
Title: Executive Vice President
-----------------------------------
STATE STREET BANK AND TRUST COMPANY
By: /s/ Ronald E. Logue
--------------------------------------
Title: Executive Vice President
-----------------------------------
Exhibit 9.1a
Financial Agent Agreement
<PAGE>
FINANCIAL AGENT AGREEMENT
THIS AGREEMENT made and concluded as of this 11th day of December, 1996
by and between Phoenix Equity Planning Corporation, a Connecticut corporation
having a place of business located at 100 Bright Meadow Boulevard, Enfield,
Connecticut (the "Financial Agent") and each of the undersigned mutual funds
(hereinafter collectively and singularly referred to as the "Trust").
WITNESSETH THAT:
1. Financial Agent shall keep the books of the Trust and compute the
daily net asset value of shares of the Trust in accordance with instructions
received from time to time from the Board of Trustees of the Trust; which
instructions shall be certified to Financial Agent by the Trust's Secretary.
Financial Agent shall report such net asset value so determined to the Trust and
shall perform such other services as may be requested from time to time by the
Trust as are reasonably incidental to Financial Agent's duties hereunder.
2. Financial Agent shall be obligated to maintain, for the periods and
in the places required by Rule 31a-2 under the Investment Company Act of 1940,
as amended, those books and records maintained by Financial Agent. Such books
and records are the property of the Trust and shall be surrendered promptly to
the Trust upon its request. Furthermore, such books and records shall be open to
inspection and audit at reasonable times by officers and auditors of the Trust.
3. As compensation for its services hereunder during any fiscal year of
the Trust, Financial Agent shall receive, within eight days after the end of
each month, a fee as specified in Schedule A.
4. Financial Agent shall not be liable for anything done or omitted by
it in the exercise of due care in discharging its duties specifically described
hereunder and shall be answerable and accountable only for its own acts and
omissions and not for those of any agent employed by it nor for those of any
bank, trust company, broker, depository, correspondent or other person.
Financial Agent shall be protected in acting upon any instruction, notice,
request, consent, certificate, resolution, or other instrument or paper believed
by Financial Agent to be genuine, and to have been properly executed, and shall,
unless otherwise specifically provided herein, be entitled to receive as
conclusive proof of any fact or matter required to be ascertained by Financial
Agent hereunder a certificate signed by the Secretary of the Trust. Financial
Agent shall be entitled, with respect to questions of law relating to its duties
hereunder, to advice of counsel (which may be counsel for the Trust) and, with
respect to anything done or omitted by it in good faith hereunder in conformity
with the advice of or based upon an opinion of counsel, to be held harmless by
the Trust from all claims of loss or damage. Nothing herein shall protect
Financial Agent against any liability to the Trust or to its respective
shareholders to which Financial Agent would otherwise be subject by reason of
its willful misfeasance, bad faith, gross negligence or reckless disregard of
its duties hereunder. Except as provided in this paragraph, Financial Agent
shall not be entitled to any indemnification by the Trust.
<PAGE>
5. Subject to prior approval of the Board of Trustees of the Trust,
Financial Agent may appoint one or more sub-financial agents to perform any of
the functions and services which are to be provided under the terms of this
Agreement upon such terms and conditions as may be mutually agreed upon by the
Trust, Financial Agent and such sub-financial agent.
6. This Agreement shall continue in effect only so long as (a) such
continuance is specifically approved at least annually by the Board of Trustees
of the Trust or by a vote of a majority of the outstanding voting securities of
the Trust, and (b) the terms and any renewal of such Agreement have been
approved by the vote of a majority of the trustees of the Trust who are not
parties to this Agreement or interested persons, as that term is defined in the
Investment Company Act of 1940, as amended, of any such party, cast in person at
a meeting called for the purpose of voting on such approval. A "majority of the
outstanding voting securities of the Trust" shall have, for all purposes of this
Agreement, the meaning provided therefor in said Investment Company Act.
7. Either party may terminate the within Agreement by tendering written
notice to the other, whereupon Financial Agent will be relieved of the duties
described herein. This Agreement shall immediately terminate in the event of its
assignment, as that term is defined in said Investment Company Act.
8. This Agreement shall be construed and the rights and obligations of
the parties hereunder enforced in accordance with the laws of the Commonwealth
of Massachusetts.
<PAGE>
9. This Agreement shall become effective on January 1, 1997.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first written
above.
PHOENIX CALIFORNIA TAX EXEMPT
BONDS, INC.
PHOENIX INCOME AND GROWTH FUND
PHOENIX MULTI-PORTFOLIO FUND
PHOENIX MULTI-SECTOR FIXED INCOME
FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM
BOND FUND
PHOENIX SERIES FUND
PHOENIX STRATEGIC ALLOCATION FUND,
INC.
PHOENIX STRATEGIC EQUITY SERIES FUND
PHOENIX WORLDWIDE OPPORTUNITIES
FUND
By: /s/ Philip R. McLoughlin
------------------------
Philip R. McLoughlin
President
PHOENIX EQUITY PLANNING
CORPORATION
By: /s/ David R. Pepin
-------------------------
David R. Pepin
Executive Vice President
<PAGE>
SCHEDULE A
FEE SCHEDULE
FEE INFORMATION FOR SERVICES AS FINANCIAL AGENT
Annual Financial Agent Fees shall be based on the following formula:
(1) An incremental schedule applies as follows:
Up to $100 million: 5 basis points on average daily net assets
$100 million to $300 million: 4 basis points on average daily net assets
$300 million thru $500 million: 3 basis points on average daily net assets
Greater than $500 million: 1.5 basis points on average daily net assets
A minimum fee will apply as follows:
Money Market $35,000
Equity $50,000
Balanced $60,000
Fixed Income $70,000
International $70,000
REIT $70,000
(2) An additional charge of $12,000 applies for each additional class
of shares above one, over and above the minimum asset-based fee previously
noted.
The following tables indicates the classification and effective date
for each of the applicable fund/series/portfolio:
Classification Series Name
-------------- -----------
Money Market Phoenix Money Market Fund Series
Equity Phoenix Aggressive Growth Fund Series
Phoenix Convertible Fund Series
Phoenix Endowment Equity Portfolio
Phoenix Equity Opportunities Fund
Phoenix Growth Fund Series
Phoenix Micro Cap Fund
Phoenix Mid Cap Portfolio
Phoenix Small Cap Fund
Phoenix Strategic Theme Fund
<PAGE>
Classification Series Name
-------------- -----------
Balanced Phoenix Balanced Fund Series
Phoenix Income and Growth Fund
Phoenix Strategic Allocation Fund, Inc.
Fixed Income Phoenix California Tax Exempt Bonds, Inc.
Phoenix Diversified Income Portfolio
Phoenix Emerging Markets Bond Portfolio
Phoenix High Yield Fund Series
Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Multi-Sector Short Term Bond Fund
Phoenix Tax-Exempt Bond Portfolio
Phoenix U.S. Government Securities Fund Series
International Phoenix International Portfolio
Phoenix Worldwide Opportunities Fund
REIT Phoenix Real Estate Securities Portfolio
Exhibit 9.1b
Amendment to Financial Agent Agreement
<PAGE>
FIRST AMENDMENT TO FINANCIAL AGENT AGREEMENT
THIS AMENDMENT made effective as of the 1st day of January, 1997 amends that
certain Financial Agent Agreement dated December 11, 1996 by and among the
following parties (the "Agreement") as hereinbelow provided.
W I T N E S S E T H :
WHEREAS, due to a scrivener's error, the Phoenix Convertible Fund
Series was incorrectly classified as an "Equity" series rather than a "Balanced"
series for purposes of applying the minimum fee; and
WHEREAS, the parties wish to correct this error and correctly classify
the Phoenix Convertible Fund Series as a "Balanced" series:
NOW, THEREFORE, in consideration of the foregoing premises, Schedule A
to the Agreement is hereby replaced with "Revised Schedule A" attached hereto
and made a part hereof. Except as hereinabove provided, the Agreement shall be
and remain unmodified and in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their duly authorized officers on this 26th day of February, 1997.
PHOENIX CALIFORNIA TAX EXEMPT BONDS, INC.
PHOENIX INCOME AND GROWTH FUND
PHOENIX MULTI-PORTFOLIO FUND
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
PHOENIX SERIES FUND
PHOENIX STRATEGIC ALLOCATION FUND, INC.
PHOENIX STRATEGIC EQUITY SERIES FUND
PHOENIX WORLDWIDE OPPORTUNITIES FUND
By:/s/ Philip R. McLoughlin
----------------------------------------
Philip R. McLoughlin
President (as to all)
PHOENIX EQUITY PLANNING CORPORATION
By:/s/ David R. Pepin
----------------------------------------
David R. Pepin
Executive Vice President
<PAGE>
REVISED SCHEDULE A
FEE SCHEDULE
FEE INFORMATION FOR SERVICES AS FINANCIAL AGENT
Annual Financial Agent Fees shall be based on the following formula:
(1) An incremental schedule applies as follows:
Up to $100 million: 5 basis points on average daily net assets
$100 million to $300 million: 4 basis points on average daily net assets
$300 million thru $500 million: 3 basis points on average daily net assets
Greater than $500 million: 1.5 basis points on average daily net assets
A minimum fee will apply as follows:
Money Market $35,000
Equity $50,000
Balanced $60,000
Fixed Income $70,000
International $70,000
REIT $70,000
(2) An additional charge of $12,000 applies for each additional class
of shares above one, over and above the minimum asset-based fee previously
noted.
The following tables indicates the classification and effective date
for each of the applicable fund/series/portfolio:
Classification Series Name
-------------- -----------
Money Market Phoenix Money Market Fund Series
Equity Phoenix Aggressive Growth Fund Series
Phoenix Endowment Equity Portfolio
Phoenix Equity Opportunities Fund
Phoenix Growth Fund Series
Phoenix Micro Cap Fund
Phoenix Mid Cap Portfolio
Phoenix Small Cap Fund
Phoenix Strategic Theme Fund
<PAGE>
Classification Series Name
-------------- -----------
Balanced Phoenix Balanced Fund Series
Phoenix Convertible Fund Series
Phoenix Income and Growth Fund
Phoenix Strategic Allocation Fund, Inc.
Fixed Income Phoenix California Tax Exempt Bonds, Inc.
Phoenix Diversified Income Portfolio
Phoenix Emerging Markets Bond Portfolio
Phoenix High Yield Fund Series
Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Multi-Sector Short Term Bond Fund
Phoenix Tax-Exempt Bond Portfolio
Phoenix U.S. Government Securities Fund Series
International Phoenix International Portfolio
Phoenix Worldwide Opportunities Fund
REIT Phoenix Real Estate Securities Portfolio
Exhibit 9.2b
Form of Transfer Agency and Service Agreement
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
PHOENIX FUNDS
AND
PHOENIX EQUITY PLANNING CORPORATION
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1 - TERMS OF APPOINTMENT; DUTIES OF TRANSFER AGENT........... 1
ARTICLE 2 - FEES AND EXPENSES........................................ 3
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF TRANSFER AGENT......... 3
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF THE PHOENIX FUNDS...... 3
ARTICLE 5 - DATA ACCESS AND PROPRIETARY INFORMATION.................. 4
ARTICLE 6 - INDEMNIFICATION.......................................... 5
ARTICLE 7 - STANDARD OF CARE......................................... 6
ARTICLE 8 - COVENANTS................................................ 6
ARTICLE 9 - TERMINATION.............................................. 7
ARTICLE 10 - ASSIGNMENT............................................... 7
ARTICLE 11 - AMENDMENT................................................ 7
ARTICLE 12 - CONNECTICUT LAW TO APPLY................................. 7
ARTICLE 13 - FORCE MAJEURE............................................ 7
ARTICLE 14 - CONSEQUENTIAL DAMAGES.................................... 8
ARTICLE 15 - MERGER OF AGREEMENT...................................... 8
ARTICLE 16 - LIMITATIONS OF LIABILITY OF THE TRUSTEES
AND SHAREHOLDERS......................................... 8
ARTICLE 17 - COUNTERPARTS............................................. 8
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
-------------------------------------
AGREEMENT made as of the 1st day of June, 1994, by and between the
undersigned entities (hereinafter singularly referred to as a "Fund" and
collectively referred to as the "Phoenix Funds"), and PHOENIX EQUITY PLANNING
CORPORATION (hereinafter referred to as the "Transfer Agent").
W I T N E S S E T H:
WHEREAS, the Phoenix Funds desire to appoint Transfer Agent as their
transfer agent, dividend disbursing agent and agent in connection with certain
other activities, and Transfer Agent desires to accept such appointment; and
WHEREAS, the parties wish to set forth herein their mutual
understandings and agreements.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency whereof being hereby acknowledged and affirmed, the parties hereto
agree as follows:
ARTICLE 1 TERMS OF APPOINTMENT; DUTIES OF TRANSFER AGENT
----------------------------------------------
1.01 Subject to the terms and conditions set forth in this Agreement,
the Phoenix Funds hereby employ and appoint Transfer Agent to act as, and
Transfer Agent agrees to act as, transfer agent for the authorized and issued
shares of beneficial interest or common stock, as the case may be, of each of
the Phoenix Funds (hereinafter collectively and singularly referred to as
"Shares"), dividend disbursing agent and agent in connection with any
accumulation, open-account or similar plans provided to the shareholders of the
Phoenix Funds ("Shareholders") and as set out in the currently effective
registration statement of each Fund (the prospectus and statement of additional
information portions of such registration statement being referred to as the
"Prospectus"), including, without limitation, any periodic investment plan or
periodic withdrawal program.
1.02 Transfer Agent agrees that it will perform the following services
pursuant to this Agreement:
(a) In accordance with procedures established from time to time by
agreement between the Phoenix Funds and Transfer Agent, Transfer Agent shall:
i) Receive for acceptance, orders for the purchase of Shares,
and promptly deliver payment and appropriate documentation
therefor to the Custodian appointed from time to time by
the Trustees/Directors of each Fund (which entity or
entities, as the case may be, shall be referred to as the
"Custodian");
ii) Pursuant to purchase orders, issue the appropriate number
of Shares and hold such Shares in the each appropriate
Shareholder account;
iii) Receive for acceptance, redemption requests and redemption
directions and deliver the appropriate documentation
therefor to the Custodian;
iv) In respect to the transactions in items (i), (ii) and (iii)
above, the Transfer Agent shall execute transactions
directly with broker-dealers authorized by the Phoenix
Funds who shall thereby be deemed to be acting on behalf of
the Phoenix Funds;
<PAGE>
v) At the appropriate time as and when it receives monies paid
to it by any Custodian with respect to any redemption, pay
over or cause to be paid over in the appropriate manner
such monies as instructed by the redeeming Shareholders;
vi) Effect transfers of Shares by the registered owners thereof
upon receipt of appropriate instructions;
vii) Prepare and transmit payments for dividends and
distributions declared by each Fund, if any;
viii) Issue replacement certificates for those certificates
alleged to have been lost, stolen or destroyed upon receipt
by the Transfer Agent of indemnification satisfactory to
the Transfer Agent and the Phoenix Funds, and the Transfer
Agent at its option, may issue replacement certificates in
place of mutilated stock certificates upon presentation
thereof and without such indemnity;
ix) Maintain records of account for and advise each Fund and
its respective Shareholders as to the foregoing; and
x) Record the issuance of Shares and maintain pursuant to Rule
17Ad-10(e) under the Exchange Act of 1934, a record of the
total number of Shares which are authorized, issued and
outstanding based upon data provided to it by each Fund.
The Transfer Agent shall also provide on a regular basis to
each Fund the total number of Shares which are authorized,
issued and outstanding shall have no obligation, when
recording the issuance of Shares, to monitor the issuance
of such Shares or to take cognizance of any laws relating
to the issue or sale of such Shares, which functions shall
be the sole responsibility of each respective Fund.
(b) In addition to and not in lieu of the services set forth in the
above paragraph (a), Transfer Agent shall: (i) perform all of the customary
services of a transfer agent, dividend disbursing agent and, as relevant, agent
in connection with accumulation, open-account or similar plans (including
without limitation any periodic investment plan or periodic withdrawal program),
including, but not limited to, maintaining all Shareholder accounts, preparing
Shareholder meeting lists, mailing proxies, receiving and tabulating proxies,
mailing Shareholder reports and Prospectuses to current Shareholders,
withholding taxes on U.S. resident and non-resident alien accounts, preparing
and filing U.S. Treasury Department Forms 1099 and other appropriate forms
required with respect to dividends and distributions by federal authorities for
all Shareholders, preparing and mailing confirmation forms and statements of
account to Shareholders for all purchases and redemptions of Shares and other
confirmable transactions in Shareholder accounts, preparing and mailing activity
statements for Shareholders, and providing Shareholder account information; and
(ii) provide a system which will enable each Fund to monitor the total number of
Shares sold in each State.
(c) In addition, the Phoenix Funds shall (i) identify to Transfer
Agent in writing those transactions and assets to be treated as exempt from blue
sky reporting for each State, and (ii) verify the establishment of transactions
for each State on the system prior to activation and thereafter monitor the
daily activity for each State. The responsibility of Transfer Agent for a Fund's
blue sky State registration status is solely limited to the initial
establishment of transactions subject to blue sky compliance by the Phoenix
Funds and the reporting of such transactions to each Fund as provided above.
(d) Procedures as to who shall provide certain of the services in
Article 1 may be established from time to time by agreement between the Phoenix
Funds and Transfer Agent per the attached service responsibility schedule, if
any. The Transfer Agent may at times perform only a portion of these services
and the Phoenix Funds or its agent may perform these services on behalf of any
Fund.
-2-
<PAGE>
(e) The Transfer Agent shall provide additional services on behalf of
the Phoenix Funds (i.e., escheatment services) which may be agreed upon in
writing between the Phoenix Funds and the Transfer Agent.
ARTICLE 2 FEES AND EXPENSES
-----------------
2.01 In consideration of the services provided by the Transfer Agent
pursuant to this Agreement, each Fund agrees to pay Transfer Agent an annual
maintenance fee for each Shareholder account as set forth in Schedule A attached
hereto and made a part hereof. Annual Maintenance Fees and out-of-pocket
expenses and advances identified under Section 2.02 below may be changed from
time to time subject to mutual written agreement between each Fund and Transfer
Agent. Nothing herein shall preclude the assignment of all or any portion of the
foregoing fees and expense reimbursements to any sub-agent contracted by
Transfer Agent.
2.02 In addition to the fee paid under Section 2.01 above, the Phoenix
Funds agree to reimburse Transfer Agent for out-of-pocket expenses or advances
incurred by Transfer Agent for the items set out in SCHEDULE A attached hereto.
In addition, any other expenses incurred by Transfer Agent at the request or
with the consent of any Fund, will be reimbursed by the Fund requesting the
same.
2.03 The Phoenix Funds agree to pay all fees and reimbursable expenses
within five days following the mailing of the respective billing notice. The
above fees will be charged against each Fund's custodian checking account five
(5) days after the invoice is transmitted to the Phoenix Funds. Postage for
mailing of dividends, proxies, Fund reports and other mailings to all
Shareholder accounts shall be advanced to Transfer Agent at least seven (7) days
prior to the mailing date of such materials.
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF TRANSFER AGENT
------------------------------------------------
The Transfer Agent represents and warrants to the Phoenix Funds that:
3.01 It is a corporation organized and existing and in good standing
under the laws of the State of Connecticut.
3.02 It is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.
3.03 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.04 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
3.05 It is and shall continue to be a duly registered transfer agent
pursuant to Section 17A(c)(2) of the Securities Exchange Act of 1934.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PHOENIX FUNDS
-----------------------------------------------
The Phoenix Funds represent and warrant to Transfer Agent that:
4.01 All corporate or trust proceedings, as the case may be, required
to enter into and perform this Agreement have been undertaken and are in full
force and effect.
4.02 Each Fund is an open-end, diversified management investment
companies registered under the Investment Company Act of 1940.
-3-
<PAGE>
4.03 A registration statement under the Securities Act of 1933 is
currently effective for each Fund that is offering its securities for sale and
such registration statement will remain effective, and appropriate state
securities law filings have been made and will continue to be made, with respect
to all Shares being offered for sale.
ARTICLE 5 DATA ACCESS AND PROPRIETARY INFORMATION
---------------------------------------
5.01 The Phoenix Funds acknowledge that the data bases, computer
programs, screen formats, report formats, interactive design techniques, and
documentation manuals furnished to the Phoenix Funds by the Transfer Agent as
part of each Fund's ability to access certain Fund-related data ("Customer
Data") maintained by the Transfer Agent on data bases under the control and
ownership of the Transfer Agent or other third party ("Data Access Services")
constitute copyrighted, trade secret, or other proprietary information
(collectively, "Proprietary Information") of substantial value to the Transfer
Agent or other third party. In no event shall Proprietary Information be deemed
Customer Data. The Phoenix Funds agree to treat all Proprietary Information as
proprietary to the Transfer Agent and further agree that it shall not divulge
any Proprietary Information to any person or organization except as may be
provided hereunder. Without limiting the foregoing, the Phoenix Funds agree for
itself and its employees and agents:
(a) to access Customer Data solely from location as may be designated
in writing by the Transfer Agent and solely in accordance with
the Transfer Agent's applicable user documentation;
(b) to refrain from copying or duplicating in any way the Proprietary
Information;
(c) to refrain from obtaining unauthorized access to any portion of
the Proprietary Information, and if such access is inadvertently
obtained, to inform in a timely manner of such fact and dispose
of such information in accordance with the Transfer Agent's
instructions;
(d) to refrain from causing or allowing third-party data acquired
hereunder from being retransmitted to any other computer facility
or other location, except with the prior written consent of the
Transfer Agent;
(e) that the Phoenix Funds shall have access only to those authorized
transactions agreed upon by the parties; and
(f) to honor all reasonable written requests made by the Transfer
Agent to protect at the Transfer Agent's expense the rights of
the Transfer Agent in Proprietary Information at common law,
under federal copyright law and under other federal or state law.
Each party shall take reasonable efforts to advise its employees of
their obligations pursuant to this Article 5. The obligations of this Article
shall survive any earlier termination of this Agreement.
5.02 If the Phoenix Funds notified the Transfer Agent that any of the
Data Access Services do not operate in material compliance with the most
recently issued user documentation for such services, the Transfer Agent shall
endeavor in a timely manner to correct such failure. Organizations from which
the Transfer Agent may obtain certain data included in the Data Access Services
are solely responsible for the contents of such data and the Phoenix Funds agree
to make no claim against the Transfer Agent arising out of the contents of such
third-party data, including, but not limited to, the accuracy thereof. DATA
ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN
CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS. THE TRANSFER
AGENT EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
-4-
<PAGE>
5.03 If the transactions available to the Phoenix Funds include the
ability to originate electronic instructions to the Transfer Agent in order to
(i) effect the transfer or movement of cash or Shares or (ii) transmit
Shareholder information or other information (such transactions constituting a
"COEFI"), then in such event the Transfer Agent shall be entitled to rely on the
validity and authenticity of such instruction without undertaking any further
inquiry as long as such instruction is undertaken in conformity with security
procedures established by the Transfer Agent from time to time.
ARTICLE 6 INDEMNIFICATION
---------------
6.01 The Transfer Agent shall not be responsible for, and the Phoenix
Funds shall indemnify and hold Transfer Agent harmless from and against, any and
all losses, damages, costs, charges, counsel fees, payments, expenses and
liability arising out of or attributable to:
(a) All actions of Transfer Agent or its agent or subcontractors
required to be taken pursuant to this Agreement, provided that such actions are
taken in good faith and without negligence or willful misconduct.
(b) The lack of good faith, negligence or willful misconduct by the
Phoenix Funds which arise out of the breach of any representation or warranty of
the Phoenix Funds hereunder.
(c) The reliance on or use by the Transfer Agent or its agents or
subcontractors of information, records and documents which (i) are received by
Transfer Agent or its agents or subcontractors, and (ii) have been prepared,
maintained or performed by the Phoenix Funds or any other person or firm on
behalf of the Phoenix Funds including but not limited to any previous transfer
agent or registrar.
(d) The reliance on, or the carrying out by Transfer Agent or its
agents or subcontractors of any instructions or requests of the Phoenix Funds.
(e) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities laws or regulations
of any state that such Shares be registered in such state or in violation of any
stop order or other determination or ruling by any federal agency or any state
with respect to the offer or sale of such Shares in such state.
6.02 Transfer Agent shall indemnify and hold each of the Phoenix Funds
harmless from and against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liability arising out of or attributable to any
action or failure or omission to act by Transfer Agent, or any sub-agent, as a
result of Transfer Agent's, or such sub-agent's, lack of good faith, negligence
or willful misconduct.
6.03 At any time the Transfer Agent may apply to any officer of the
Phoenix Funds for instructions, and may consult with legal counsel with respect
to any matter arising in connection with the services to be performed by
Transfer Agent under this Agreement, and Transfer Agent and its agents or
subcontractors shall not be liable and shall be indemnified by the Phoenix Funds
for any action taken or omitted by it in reliance upon such instructions or upon
the opinion of such counsel. The Transfer Agent, its agents and subcontractors
shall be protected and indemnified in acting upon any paper or document
furnished by or on behalf of the Phoenix Funds, reasonably believed to be
genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided Transfer Agent or
its agents or subcontractors by machine readable input, telex, CRT data entry or
other similar means authorized by the Phoenix Funds, and shall not be held to
have notice of any change of authority of any person, until receipt of written
notice thereof from the Phoenix Funds. Transfer Agent, its agents and
subcontractors shall also be protected and indemnified in recognizing stock
certificates which are reasonably
-5-
<PAGE>
believed to bear the proper manual or facsimile signatures of the officers of
any Fund, and the proper countersignature of any former transfer agent or
registrar, or of a co-transfer agent or co-registrar.
6.04 In order that the indemnification provisions contained in this
Article 6 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
6.05 Transfer Agent hereby expressly acknowledges that recourse
against any of the Phoenix Funds, if any, shall be subject to those limitations
provided by governing law and the Declaration of Trust of the Phoenix Funds, as
applicable, and agrees that obligations assumed by the Phoenix Funds hereunder
shall be limited in all cases to the Phoenix Funds and their respective assets.
Transfer Agent shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Phoenix Funds, nor shall the Transfer
Agent seek satisfaction of any obligations from the Trustees/Directors or any
individual Trustee/Director of the Phoenix Funds.
ARTICLE 7 STANDARD OF CARE
----------------
7.01 The Transfer Agent shall at all times act in good faith and
agrees to use its best efforts within reasonable limits to insure the accuracy
of all services performed under this Agreement, but assumes no responsibility
and shall not be liable for loss or damage due to errors unless said errors are
caused by its negligence, bad faith, or willful misconduct of that of its
employees.
ARTICLE 8 COVENANTS
---------
8.01 The Phoenix Funds shall promptly furnish to Transfer Agent the
following:
(a) A certified copy of the resolution of its Trustees/Directors
authorizing the appointment of Transfer Agent and the execution and delivery of
this Agreement.
(b) A copy of the Declaration of Trust or Articles of Incorporation,
as the case may be, and By-Laws, if any, and all amendments thereto of each
Fund.
8.02 The Transfer Agent hereby agrees to establish and maintain
facilities and procedures reasonably acceptable to the Phoenix Funds for
safekeeping of stock certificates, check forms and facsimile signature
imprinting devices, if any; and for the preparation or use, and for keeping
account of, such certificates, forms and devices.
8.03 The Transfer Agent shall keep records relating to the services to
be performed hereunder, in the form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Company Act of 1940, as amended,
and the Rules thereunder, Transfer Agent agrees that all such records prepared
or maintained by Transfer Agent relating to the services to be performed by
Transfer Agent hereunder are the property of each respective Fund and will be
preserved, maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to each respective Fund on and in
accordance with its request.
8.04 The parties agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or received
pursuant to the negotiation or the carrying out of this
-6-
<PAGE>
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law.
8.05 In case of any requests or demands for the inspection of the
Shareholder records, Transfer Agent will endeavor to notify the affected Fund
and to secure instructions from an authorized officer of such Fund as to such
inspection. Transfer Agent reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel that it
may be held liable for the failure to exhibit the Shareholder records to such
person.
ARTICLE 9 TERMINATION
-----------
9.01 This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other. The parties mutually acknowledge
that the termination of this Agreement by one, but not each Fund shall not
effect a termination of this Agreement as to any and all other Phoenix Fund(s)
which have not terminated the Agreement.
9.02 Should any Fund exercise its right to terminate, all out-of-
pocket expenses associated with the movement of records and material will be
borne by the terminating Fund. Additionally, Transfer Agent reserves the
right to charge any other reasonable expenses associated with such termination
and/or a charge equivalent to the average of three (3) months' fees to the
terminating Fund.
ARTICLE 10 ASSIGNMENT
----------
10.01 Except as provided in Section 10.03 below, neither this Agreement
nor any rights or obligations hereunder may be assigned by either party without
the written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
10.03 The Transfer Agent may, without further consent on the part of
any of the Phoenix Funds, subcontract for the performance hereof with one or
more sub-agents; provided, however, that Transfer Agent shall be as fully
responsible to each Fund for the acts and omissions of any subcontractor as it
is for its own acts and omissions.
ARTICLE 11 AMENDMENT
---------
11.01 This Agreement may be amended or modified by a written agreement
executed by the parties and authorized or approved by a resolution of the
Trustees/Directors of each respective Fund.
ARTICLE 12 CONNECTICUT LAW TO APPLY
------------------------
12.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Connecticut.
ARTICLE 13 FORCE MAJEURE
-------------
13.01 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
-7-
<PAGE>
ARTICLE 14 CONSEQUENTIAL DAMAGES
---------------------
14.01 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for any
act or failure to act hereunder.
ARTICLE 15 MERGER OF AGREEMENT
-------------------
15.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
15.02 This Agreement shall not be merged with or construed in
conjunction with any other current or future agreement between the Phoenix Funds
(including any Fund) and Phoenix Equity Planning Corporation, each and all of
which agreements shall at all times remain separate and distinct.
ARTICLE 16 LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
---------------------------------------------------------
16.01 For the Funds which that are formed as Massachusetts business
trusts, notice is hereby given that the Agreement and Declaration of such Trusts
are on file with the Secretary of the Commonwealth of Massachusetts and was
executed on behalf of the Trustees of such Trusts as Trustees and not
individually and that the obligations of this instrument are not binding upon
any of the Trustees or Shareholders individually but are binding only upon the
assets and property of each Fund.
ARTICLE 17 COUNTERPARTS
------------
17.01 This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
-8-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
PHOENIX ASSET RESERVE
PHOENIX CALIFORNIA TAX EXEMPT BONDS, INC.
PHOENIX EQUITY OPPORTUNITIES FUND
PHOENIX INCOME AND GROWTH FUND
PHOENIX MULTI-PORTFOLIO FUND
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
PHOENIX SERIES FUND
PHOENIX TOTAL RETURN FUND, INC.
PHOENIX WORLDWIDE OPPORTUNITIES FUND
By:_______________________________________________
Name: Philip R. McLoughlin
Title: President
ATTEST:
By:___________________________
Name:
Title:
PHOENIX EQUITY PLANNING CORPORATION
By:________________________________
Executive Vice President
ATTEST:
By:___________________________
Name:
Title:
-9-
<PAGE>
SCHEDULE A
FEE SCHEDULE
Annual Maintenance Fees shall be based on the following formula:
AMF = BAMF x SA
Fund
where, AMF(Fund) refers to the aggregate Annual Maintenance Fee
levied against each respective Fund,
BAMF refers to the Base Annual Maintenance Fee levied against
each respective Fund for each shareholder account, as more
particularly described below, at the basic annual per account
rate of $19.25 for daily dividend accounts and $14.95 for
non-daily dividend accounts, and
SA refers to the number of Shareholder Accounts subject to the
terms of this Agreement and any and all sub-transfer agent
agreements which presently or hereafter may be entered into by
the Transfer Agent. For the purpose of computing the foregoing,
the Transfer Agent will ascertain the number of Shareholders of
each Fund regardless of whether any such Shares are held in
accordance with any pooled or omnibus accounts or arrangement
managed or controlled by any entity, broker/dealer or
sub-transfer agent.
Other Fees
- ----------
o Omnibus Accounts, Per Transaction $2.50
o Closed Accounts, per Account, per month $0.20
o Check writing Fees:
o Privilege set-up $5.00
o Per Cleared Check $1.00
Out-of-Pocket Expenses
- ----------------------
Out-of-pocket expenses include, but are not limited to: confirmation production,
postage, forms, telephone, microfilm, microfiche, stationary and supplies billed
as .1122% of postage costs and expenses incurred at the specific direction of
any Fund. Postage for mass mailings is due seven days in advance of the mailing
date.
Exhibit 9.2c
Sub-Transfer Agency 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 1-4
and Transfer Agent
2. Fees and Expenses 4
3. Bank as Trustee or Custodian 4-5
of Retirement Plans
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 form 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.
1
<PAGE>
(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;
(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;
2
<PAGE>
(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.
3
<PAGE>
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.
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").
4
<PAGE>
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 Security 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
5
<PAGE>
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.
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
6
<PAGE>
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 propriety
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;
(b) to refrain form 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;
7
<PAGE>
(c) to refrain from obtaining unauthorized access to any programs,
data or other information not owned by the Transfer Agent, and
if such access is accidently obtained, to respect and
safeguard the same Proprietary Information;
(d) to refrain form causing or allowing information transmitted
from the Bank's computer to the Transfer Agents 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
statues.
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 on 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;
8
<PAGE>
(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.
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.
9
<PAGE>
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
govermental 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.
10
<PAGE>
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;
(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
<PAGE>
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.
12
<PAGE>
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.
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.
13
<PAGE>
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. McLaughlin
- --------------------------
STATE STREET BANK AND TRUST COMPANY
BY: /s/ Ronald E. Logue
-------------------------------
Executive Vice President
ATTEST:
/s/ S. Cesso
- --------------------------
14
<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 $1.80
(Per Investor)
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
o This schedule is based on 700K accounts, 26 funds, and 4,000 liaison items.
o If the account base decreases significantly, the per account fee will be
reviewed by both parties.
o If 12(B) 1 product is discontinued the annual per account fee will be
increased by $1.00
o Additional Fund Administrators will be added as new funds are opened (ratio
1:8) and charged as detailed above.
o 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 Hourihan By /s/ Mark Toomey
-------------------------------- ------------------------------------
Title Vice President Title Vice President
----------------------------- ---------------------------------
Date 7/15/94 Date 7-12-94
------------------------------ ---------------------------------
*The fee for this period shall be adjusted by the parties to reflect then
prevailing levels of service furnished by State Street.
<PAGE>
<TABLE>
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
SERVICE RESPONSIBILITY SCHEDULE
- -----------------------------------------------------------------------------------------------
<CAPTION>
FUNCTIONAL RESPONSIBILITIES PEPCO BFDS
(TRANSFER AGENT) (SUB TRANSFER AGENT)
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
A. Transaction Processing:
Remittance Cash Processing X
New Account Setup
o Regular X
o Fiduciary X
o Quality Assurance X
Transfers
o Regular X
o Fiduciary X
o Dealer X
o Quality Assurance X
Redemptions
o Regular X
o Fiduciary X
o Quality Assurance X
Wire Order
o Set-up X
o Settlement X
o Quality Assurance X
o Monitoring of Outstanding Trades X
Maintenance
o Registration X
o Rep/Dealer File X *X
o Sub Files X
o Quality Assurance X
o ACH Prenote Reject X
o All Account Options X
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
SERVICE RESPONSIBILITY SCHEDULE
- -----------------------------------------------------------------------------------------------
<CAPTION>
FUNCTIONAL RESPONSIBILITIES PEPCO BFDS
(TRANSFER AGENT) (SUB TRANSFER AGENT)
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Adjustments (through 12/94)
o Account Corrections *X
o LOI Processing *X
o Year-End Accounts Adjustments *X
o Sharelot Adjustments *X
o Bounced Checks *X
o ACH Cancellations *X
o Quality Assurance *X
B. Customer Service:
Telephones
o Customer Inquiry X
o Transaction Line X
o Timer Exchanges *X
o Liaison Support (Through 12/4) *X
Correspondence X
Shareholder/Dealer Letters X
Transfer of Assets Letters/Followup X
Notice of Levy X
Dealer Services
o Fund Serv/Networking Implementation X
o Dealer Security Access X
o Enhancements-Communication/Testing X
Client Services
o Product Development/Implementation X
o Mailings X
o Year End Reporting X
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
SERVICE RESPONSIBILITY SCHEDULE
- -----------------------------------------------------------------------------------------------
<CAPTION>
FUNCTIONAL RESPONSIBILITIES PEPCO BFDS
(TRANSFER AGENT) (SUB TRANSFER AGENT)
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
C. Support:
Image/AWD
o Scanning X X
o Work Distribution X
o Retrieval X
o Technical Support X
Microfilm/Research Prior Agent X *X
Media Production
o Design/Printing X
o Marketing Materials X
o Forms Development X
Corporate Actions
o Report Generation X
o Proxy Solicitation X
o Periodic Financial Activities (DIVs X
PACs, SWPs etc
Compliance/Regulatory
o Escheatment X
o Tax Filings X
o Lost Shareholder Recovery X
o BNotice/CNotice Reporting *X
o Lost Certificate Processing/SIC *X
Reporting
Recon/Control
o Cash Settlement X
o Account Reconcilement X
o Commission Payment X
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
SERVICE RESPONSIBILITY SCHEDULE
- -----------------------------------------------------------------------------------------------
<CAPTION>
FUNCTIONAL RESPONSIBILITIES PEPCO BFDS
(TRANSFER AGENT) (SUB TRANSFER AGENT)
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Recon/Control (continued)
o Automated Trade Settlement X
o Balance Credit Review X
o Reclaims *X
o Dividend Processing X
Financial Reporting
o Billing to the Fund X
Will be internalized to PEPCO
- -----------------------------------------------------------------------------------------------
</TABLE>
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. 15 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated February 7, 1997, relating to the financial
statements and financial highlights appearing in the December 31, 1996 Annual
Report to Shareholders of the Phoenix Strategic Allocation Fund, Inc., 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 "Additional Information-Independent
Accountants" in the Statement of Additional Information.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Boston, Massachusetts
April 23, 1997
Exhibit 15
Distribution Plan for Class A Shares
<PAGE>
DISTRIBUTION PLAN OF PHOENIX TOTAL RETURN FUND, INC.
CLASS A SHARES
SECTION 1. Phoenix Total Return Fund, Inc. (the "Fund"), the issuer of Class A
shares, may act as the distributor of such shares pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (the "Act") according to the terms of this
Distribution Plan (the "Plan").
SECTION 2. Amounts not exceeding in the aggregate a maximum amount equal to
0.25% of the average of the daily aggregate net asset value of the Class A
shares during each year of the Fund elapsed after the inception of the Plan may
be paid by the Fund to its principal underwriter at any time after the inception
of the Plan in order to pay to the principal underwriter, for efforts expended
in respect of or in furtherance of sales of Class A shares and to enable the
principal underwriter, in its sole discretion, to pay or to have paid to others
who sell or have sold Class A shares, a maintenance or other fee, at such
intervals as the principal underwriter may determine, in respect of Class A
shares previously sold by any such others at any time and remaining outstanding
during the period in respect of which such fee is or has been paid.
SECTION 3. This plan shall not take effect until it has been approved by a vote
of at least a majority (as defined in the Act) of the outstanding shares.
SECTION 4. This Plan shall not take effect until it has been approved together
with any related agreements of the Fund by votes of the majority of both (a) the
Board of Directors of the Fund and (b) those Directors who are not "interested
persons" of the Fund as defined in the Act and who have no direct or indirect
financial interests in the operation of this Plan or any agreements of the Fund
or any other person related to this Plan (the "Rule 12b-1 Directors"), cast in
person at a meeting called for the purpose of voting on this Plan or such
agreements.
SECTION 5. Unless sooner terminated pursuant to Section 8, this Plan shall
continue in effect for a period of one year from the date it takes effect and
thereafter shall continue in effect so long as such continuance is specifically
approved at least annually in the manner provided for approval of the Plan in
Section 4.
SECTION 6. Any person authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement shall provide
to the Fund's Board, and the Board shall review at least quarterly, a written
report of the amounts so expended and the purposes for which such expenditures
were made.
SECTION 7. The Plan may be terminated at any time by vote of a majority of the
Rule 12b-1 Directors, or by vote of a majority of the outstanding Class A
shares.
<PAGE>
- 2 -
SECTION 8. Any agreement of the Fund related to this Plan shall be in writing,
and shall provide:
a. That such agreement may be terminated at any time, without
payment of any penalty, by vote of a majority of the Rule
12b-1 Directors or by a vote of a majority of the outstanding
Class A shares or on not more than sixty days written notice
to any other party to the agreement; and
b. That such agreement shall terminate automatically in the event
of its assignment.
SECTION 9. This Plan may not be amended to increase materially the amount of
distribution expenses provided for in Section 2 hereof unless such amendment is
approved in the manner provided in Section 3 hereof and no material amendment to
this Plan shall be made unless approved in the manner provided for in Section 4
hereof.
Exhibit 15.a
Distribution Plan for Class B Shares
<PAGE>
DISTRIBUTION PLAN OF
PHOENIX TOTAL RETURN FUND, INC.
PURSUANT TO RULE 12B-1
CLASS B SHARES
Distribution Plan for Class B shares dated _______________ (the "Plan") of
PHOENIX TOTAL RETURN FUND, INC. (the "Fund"), a Massachusetts corporation.
WHEREAS, the Fund and Phoenix Equity Planning Corporation ("PEPCO" or the
"Distributor"), a wholly owned subsidiary of Phoenix Home Life Mutual Insurance
Company ("Phoenix Home Life") and a broker-dealer registered under the
Securities Exchange Act of 1934, have entered into a Distribution Agreement
pursuant to which the Distributor will act as principal underwriter of Class B
shares of the Fund for sale to the public; and
WHEREAS, the Directors of the Fund have determined to adopt this Distribution
Plan (the "Plan"), in accordance with the requirements of the Investment Company
Act of 1940, as amended (the "Act") and have determined that there is a
reasonable likelihood that the Plan will benefit the Fund and its shareholders.
NOW THEREFORE, the Fund hereby adopts the Plan on the following terms and
conditions:
1. The Fund shall reimburse the Distributor, at the end of each month,
up to a maximum on an annual basis of 1.00% of the average daily value of the
net assets of the Fund's Class B shares, subject to any applicable restrictions
imposed by rules of the National Association of Securities Dealers, Inc., for
distribution expenditures incurred by PEPCO subsequent to the effectiveness of
this Plan, in connection with the sale and promotion of the Class B shares of
the Fund and the furnishing of services to Class B shareholders of the Fund.
Such expenditures shall consist of: (i) commissions to sales personnel for
selling Class B shares of the Fund (including underwriting commissions and
finance charges related to the payment of commissions); (ii) compensation, sales
incentives and payments to sales, marketing and service personnel; (iii)
payments to broker-dealers and other financial institutions which have entered
into selling agreements with the Distributor, for services rendered in
connection with the sale and distribution of Class B shares of the Fund; (iv)
payment of expenses incurred in sales and promotional activities, including
advertising expenditures related to the Class B shares of the Fund; (v) the
costs of preparing and distributing promotional materials; (vi) the cost of
printing the Fund's Prospectus and Statement of Additional Information for
distribution to potential investors; and (vii) such other similar services that
the Directors of the Fund determine are reasonably calculated to result in the
sale of Class B shares of the Fund; provided however, that a portion of such
amount paid to the Distributor, which portion shall be equal to or less than
0.25% annually of the average daily net assets of the Fund's Class B shares, may
be paid for reimbursing the costs of providing services to Class B shareholders
including assistance in connection with inquiries related to shareholder
accounts (the "Service Fee").
Amounts paid or payable by the Fund under this Plan or any agreement
with any person or entity relating to the implementation of this Plan ("related
agreement") shall only be used to pay for, or reimburse payment for, the
distribution expenditures described in the preceding paragraph and shall, given
all surrounding circumstances, represent charges within the range of what would
have been negotiated at arm's length as payment for the specific sales or
promotional services and activities
<PAGE>
to be financed hereunder and any related agreement, as determined by the
Directors of the Fund, in the exercise of reasonable business judgment, in light
of fiduciary duties under state law and Sections 36(a) and (b) of the Act and
based upon appropriate business estimates and projections.
2. At least quarterly in each year the Plan remains in effect, the
Fund's Principal Accounting Officer or Treasurer, or such other person
authorized to direct the disposition of monies paid or payable by the Fund,
shall prepare and furnish to the Directors of the Fund for their review, and the
Directors shall review, a written report complying with the requirements of Rule
12b-l under the Act regarding the amounts expended under the Plan and the
purposes for which such expenditures were made.
3. This Plan shall not take effect until it, together with any related
agreement, has been approved by a vote of at least a majority of the Fund's
Directors as well as a vote of at least a majority of the Directors of the Fund
who are not interested persons (as defined in the Act) of the Fund and who have
no direct or indirect financial interest in the operation of the Plan or in any
related agreement (the "Disinterested Directors"), cast in person at a meeting
called for the purpose of voting on the Plan or any related agreement and the
Plan shall not take effect with respect to the Fund until it has been approved
by a vote of at least a majority of the outstanding voting Class B shares (as
defined in the Act).
4. This Plan shall remain in effect for one year from the date of its
adoption and may be continued thereafter if specifically approved at least
annually by a vote of at least a majority of the Directors of the Fund as well
as a majority of the Disinterested Directors. This Plan may be amended at any
time, provided that (a) the Plan may not be amended to increase materially the
amount of the distribution expenses provided in Paragraph 1 hereof (including
the Service Fee) without the approval of at least a majority of the outstanding
voting securities (as defined in the Act) of the Class B shares of the Fund and
(b) all material amendments to this Plan must be approved by a majority vote of
the Directors of the Fund and of the Disinterested Directors cast in person at a
meeting called for the purpose of such vote.
5. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the Fund
shall be committed to the discretion of the Disinterested Directors then in
office.
6. Any related agreement shall be in writing and shall provide that (a)
such agreement shall be subject to termination, without penalty, by vote of a
majority of the outstanding voting securities (as defined in the Act) of the
Class B shares of the Fund on not more than 60 days' written notice to the other
party to the agreement and (b) such agreement shall terminate automatically in
the event of its assignment.
7. This Plan may be terminated at any time by a vote of a majority of
the Disinterested Directors or by a vote of a majority of the outstanding voting
securities (as defined in the Act) of the Class B shares of the Fund. In the
event this Plan is terminated or otherwise discontinued, no further payments
hereunder will be made by the Plan.
8. The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to Paragraph 2 hereof, and any other
information, estimates, projections and other materials that serve as a basis
therefor, considered by the Directors of the Fund, for a period of
-2-
<PAGE>
not less than six years from the date of this Plan, the agreement or report, as
the case may be, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund and its Directors have adopted this Plan
as of this day of , l993.
PHOENIX TOTAL RETURN FUND, INC.
By:____________________________
Attest:
___________________________
-3-
Exhibit 18b
Rule 18f-3 Dual Distribution Plan
<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 two
classes of shares, Class A and Class B ("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 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 and Class B
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.
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) of this paragraph must be allocated to the class for
which they are incurred. All other expenses described in this paragraph may be
allocated as Class Expenses, if a Fund's President and Treasurer have
determined, subject to Board approval or 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.
<PAGE>
- 3 -
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 18f-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
-------------------------------------
Expenses may be waived or reimbursed by the Fund's investment
adviser(s), its principal underwriters, or any other provider of services to a
Multi-Class Portfolio without the prior approval of Broad of Trustees.
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.
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 the Independent Trustees, at a
meeting held on August 21, 1996, 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.
<PAGE>
- 4 -
b. Approval of Amendments
----------------------
The Plan may not be amended materially unless the Board of
Trustees, 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.
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.
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
----------
PHOENIX CALIFORNIA TAX-EXEMPT BONDS, INC.
PHOENIX INCOME AND GROWTH FUND
PHOENIX MULTI-PORTFOLIO FUND:
DIVERSIFIED INCOME PORTFOLIO
EMERGING MARKETS BOND PORTFOLIO
INTERNATIONAL PORTFOLIO
REAL ESTATE SECURITIES PORTFOLIO
MID CAP PORTFOLIO
TAX-EXEMPT BOND PORTFOLIO
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
PHOENIX SERIES FUND:
AGGRESSIVE GROWTH FUND SERIES
BALANCED FUND SERIES
CONVERTIBLE FUND SERIES
GROWTH FUND SERIES
HIGH YIELD FUND SERIES
MONEY MARKET FUND SERIES
U.S. GOVERNMENT SECURITIES FUND SERIES
PHOENIX TOTAL RETURN FUND, INC.
PHOENIX STRATEGIC EQUITY SERIES FUND:
EQUITY OPPORTUNITIES FUND
MICRO CAP FUND
STRATEGIC THEME FUND
SMALL CAP FUND
PHOENIX WORLDWIDE OPPORTUNITIES FUND
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> PHOENIX STRATEGIC ALLOCATION FUND, INC. CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 303830
<INVESTMENTS-AT-VALUE> 319628
<RECEIVABLES> 857
<ASSETS-OTHER> 1043
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 321528
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2256
<TOTAL-LIABILITIES> 2256
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 299124
<SHARES-COMMON-STOCK> 19953
<SHARES-COMMON-PRIOR> 22629
<ACCUMULATED-NII-CURRENT> 448
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3902
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 15798
<NET-ASSETS> 319272
<DIVIDEND-INCOME> 2681
<INTEREST-INCOME> 7566
<OTHER-INCOME> 48
<EXPENSES-NET> (4225)
<NET-INVESTMENT-INCOME> 6070
<REALIZED-GAINS-CURRENT> 32225
<APPREC-INCREASE-CURRENT> (9313)
<NET-CHANGE-FROM-OPS> 28982
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5622)
<DISTRIBUTIONS-OF-GAINS> (29212)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 918
<NUMBER-OF-SHARES-REDEEMED> (5512)
<SHARES-REINVESTED> 1918
<NET-CHANGE-IN-ASSETS> (51848)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1879
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2241
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4225
<AVERAGE-NET-ASSETS> 344775
<PER-SHARE-NAV-BEGIN> 15.98
<PER-SHARE-NII> 0.31
<PER-SHARE-GAIN-APPREC> 1.10
<PER-SHARE-DIVIDEND> (0.29)
<PER-SHARE-DISTRIBUTIONS> (1.58)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 15.52
<EXPENSE-RATIO> 1.21
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 002
<NAME> PHOENIX STRATEGIC ALLOCATION FUND, INC. CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 303830
<INVESTMENTS-AT-VALUE> 319628
<RECEIVABLES> 857
<ASSETS-OTHER> 1043
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 321528
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2256
<TOTAL-LIABILITIES> 2256
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 299124
<SHARES-COMMON-STOCK> 622
<SHARES-COMMON-PRIOR> 506
<ACCUMULATED-NII-CURRENT> 448
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3902
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 15798
<NET-ASSETS> 319272
<DIVIDEND-INCOME> 2681
<INTEREST-INCOME> 7566
<OTHER-INCOME> 48
<EXPENSES-NET> (4225)
<NET-INVESTMENT-INCOME> 6070
<REALIZED-GAINS-CURRENT> 32225
<APPREC-INCREASE-CURRENT> (9313)
<NET-CHANGE-FROM-OPS> 28982
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (90)
<DISTRIBUTIONS-OF-GAINS> (899)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 168
<NUMBER-OF-SHARES-REDEEMED> (109)
<SHARES-REINVESTED> 56
<NET-CHANGE-IN-ASSETS> 1548
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1879
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2241
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4225
<AVERAGE-NET-ASSETS> 344775
<PER-SHARE-NAV-BEGIN> 15.89
<PER-SHARE-NII> 0.19
<PER-SHARE-GAIN-APPREC> 1.09
<PER-SHARE-DIVIDEND> (0.16)
<PER-SHARE-DISTRIBUTIONS> (1.58)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 15.43
<EXPENSE-RATIO> 1.96
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
