SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or
ss. 240.14a-12
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Pamela S. Sinofsky
c/o Phoenix Investment Partners, Ltd.
56 Prospect Street
Hartford, Connecticut 06115-0480
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid: ___________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration No.:
3) Filing Party:
4) Date Filed:
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Phoenix Equity Planning Corporation 101 Munson Street Toll Free 800 243-1574
PO Box 88
Greenfield, MA 01302-0088
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[LOGO] PHOENIX
INVESTMENT PARTNERS
--------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 14, 2000
--------------------
July 25, 2000
Dear Shareholder:
We are pleased to enclose the proxy statement for the September 14, 2000
special shareholders meeting of your Fund. Please take the time to read the
proxy statement and cast your vote, because the changes are important to you as
a shareholder.
We are asking shareholders to approve a tax-free reorganization of the
Fund into a Delaware business trust. This is part of our effort to integrate all
of our mutual funds by adopting a single business form, domicile, form of
charter and fundamental investment restrictions. We think this effort offers the
opportunity for operational efficiencies that will benefit all shareholders. The
reorganization will not change your Fund's investment adviser or its portfolio
manager, and the value of your investment immediately after the reorganization
will be the same as it was immediately before the reorganization.
Your Board of Directors believes that the proposed reorganization is in
the best interests of the shareholders and has unanimously recommended that
shareholders of the Fund vote for the reorganization and for the other matters
identified in the proxy statement and proxy. Should you have any questions,
please feel free to call us at 1(800) 243-1574. We will be happy to answer any
questions you may have.
I URGE EACH SHAREHOLDER TO PROMPTLY MARK, SIGN AND RETURN THE ENCLOSED
PROXY.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
President, Phoenix Funds
This letter has been prepared solely for the information of
existing shareholders.
This letter is not authorized for distribution to
prospective investors.
Mutual funds distributed by Phoenix Equity Planning Corporation.
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PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
101 MUNSON STREET
GREENFIELD, MASSACHUSETTS 01301
1 (800) 243-1574
--------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 14, 2000
To the Shareholders:
A special meeting of shareholders of Phoenix-Oakhurst Strategic Allocation
Fund, Inc., (the "Fund") will be held at the offices of the Fund, 101 Munson
Street, Greenfield, Massachusetts 01301 on September 14, 2000 at 2:00 p.m.,
local time, for the following purposes:
(1) To consider and act upon a proposal to approve an Agreement and Plan
of Reorganization which provides for the reorganization of the Fund into a
Delaware business trust.
(2) To consider and act upon any other business as may properly come
before the meeting and any adjournments thereof.
You are entitled to vote at the meeting and any adjournment(s) if you
owned shares of the Fund at the close of business on July 17, 2000.
Whether or not you plan to attend the meeting in person, please vote your
shares. As a convenience to our shareholders, you may now vote in any one of the
following ways:
o By telephone, with a toll-free call to the number listed on the
enclosed proxy card and following recorded instructions;
o By mail, with the enclosed proxy card and postage-paid envelope; or
o In person at the meeting.
We encourage you to vote by telephone, using the control number that
appears on your enclosed proxy card. Use of telephone voting will reduce the
time and costs associated with this proxy solicitation. Whichever method you
choose, please read the enclosed proxy statement carefully before you vote.
PLEASE RESPOND - WE ASK THAT YOU VOTE PROMPTLY IN ORDER TO
AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION.
YOUR VOTE IS IMPORTANT.
By Order of the Board of Directors
of Phoenix-Oakhurst Strategic Allocation Fund, Inc.
G. JEFFREY BOHNE
Secretary
<PAGE>
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
101 MUNSON STREET
GREENFIELD, MASSACHUSETTS 01301
1 (800) 243-1574
--------------------
PROXY STATEMENT
MEETING OF SHAREHOLDERS
This proxy statement is being furnished in connection with the
solicitation by the Board of Directors of Phoenix-Oakhurst Strategic Allocation
Fund, Inc., (the "Fund") of proxies to be used at a meeting of the shareholders
of the Fund and at any adjournment(s) thereof.
The purpose of the meeting is to consider a plan to reorganize the Fund
from a Massachusetts corporation into a new Delaware business trust (the
"Delaware Trust"). To accomplish the reorganization, the Delaware Trust has been
formed and the Fund will be established (the "New Fund") as an individual series
of the Delaware Trust. The New Fund will have the same classes of shares as the
classes of the existing Fund. A form of the Agreement and Plan of Reorganization
is attached as Appendix A.
The reorganization will not change the Fund's investment objective or
principal investment strategy, investment adviser, independent accountants or
fiscal year. Each shareholder will own the same number of shares of the New Fund
immediately after the reorganization as the number of Fund shares owned by the
shareholder on the closing of the reorganization. The New Fund will offer the
same shareholder services as the Fund. The New Fund will operate under the name
"Phoenix-Oakhurst Strategic Allocation Fund."
This Proxy Statement and the enclosed form of proxy are first being mailed
to shareholders on or about July 25, 2000.
VOTING INFORMATION
Shareholders of record of the Fund at the close of business on July 17,
2000 will be entitled to vote at the meeting or at any adjournments thereof. On
that date, there were issued and outstanding 17,027,170.273 shares of the Fund.
Shareholders are entitled to one vote for each share held and a
proportionate vote for each fractional share held. The holders of a majority of
the outstanding shares of the Fund entitled to vote shall constitute a quorum
for the meeting. A quorum being present, the approval of the reorganization
proposal requires the vote of two-thirds of the shares of the Fund entitled to
vote. The reorganization will not take place unless the Fund approves the
reorganization proposal. If the reorganization is not approved by the Fund, the
Fund will continue as a Massachusetts corporation and the Board of Directors of
the Fund may consider other alternatives that it views as being in the best
interests of the shareholders of the Fund.
For purposes of determining the presence of a quorum for transacting
business at the meeting and for determining whether sufficient votes have been
received for approval of the proposal to be acted upon at the meeting,
abstentions and broker "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have discretionary power) will
be treated as shares that are present at the meeting, but which have not been
voted. For this reason, abstentions and broker non-votes will assist the Fund in
obtaining a quorum, but both have the practical effect of a "no" vote for
purposes of obtaining the requisite vote for approval of the proposal.
If either (a) a quorum is not present at the meeting or (b) a quorum is
present but sufficient votes in favor of the proposal have not been obtained,
then the persons named as proxies may propose one or more adjournments of the
meeting without further notice to shareholders to permit further solicitation of
proxies provided such persons determine, after consideration of all relevant
factors, including the nature of the proposal, the percentage of votes then
cast, the percentage of negative votes then cast, the nature of the proposed
solicitation activities and the nature of the reasons for such further
solicitation, that an adjournment and additional solicitation is reasonable and
in the interests of shareholders. The persons named as proxies will vote those
proxies that such persons are required to vote FOR the proposal in favor of such
an adjournment and will vote those proxies required to be voted AGAINST the
reorganization proposal against such adjournment.
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The meeting may be adjourned from time to time by the vote of a majority
of the shares represented at the meeting, whether or not a quorum is present. If
the meeting is adjourned to another time or place, notice need not be given of
the adjourned meeting at which the adjournment is taken, unless a new record
date of the adjourned meeting is fixed. At any adjourned meeting, the Fund may
transact any business which might have been transacted at the original meeting.
The individuals named as proxies on the enclosed proxy card will vote in
accordance with the shareholder's direction, as indicated thereon, if the proxy
card is received and is properly executed. If the shareholder properly executes
a proxy and gives no voting instructions with respect to the reorganization
proposal, the shares will be voted in favor of the reorganization proposal. The
proxies, in their discretion, may vote upon such other matters as may properly
come before the meeting. The Board of Directors of the Fund is not aware of any
other matters to come before the meeting.
REVOCATION OF PROXIES
Any shareholder who has given a proxy has the right to revoke the proxy
any time prior to its exercise
o by written notice of the proxy's revocation to the Secretary of the
Fund at the above address prior to the meeting;
o by the subsequent execution and return of another proxy prior to the
meeting;
o by submitting a subsequent telephone vote; or
o by being present and voting in person at the meeting and giving oral
notice of revocation to the Chairman of the meeting.
APPRAISAL RIGHTS
The staff of the Securities and Exchange Commission ("SEC") has taken the
position that any rights to appraisal arising under state law are preempted by
the provisions of the Investment Company Act of 1940 (the "1940 Act") and Rule
22c-1 thereunder. Rule 22c-1 generally requires that shares of a registered
open-end investment company be valued at their next determined net asset value.
For purposes of this proxy statement, the "1940 Act" includes the rules and
regulations of the SEC issued under that Act.
SOLICITATION OF PROXIES
In addition to the solicitation of proxies by mail, officers and employees
of Phoenix Investment Partners, Ltd. or its affiliates, may solicit proxies
personally or by telephone or telegram. The Fund may also use a proxy
solicitation firm to assist with the mailing and tabulation effort and any
special personal solicitation of proxies. Banks, brokers, fiduciaries and
nominees will, upon request, be reimbursed by the Fund for their reasonable
expenses in sending proxy material to beneficial owners of shares of the Fund.
The cost of the solicitation of proxies will be borne by the Fund. D.F. King and
Co., Inc., a proxy solicitation firm, has been engaged by the Fund to act as
solicitor and will receive fees estimated at $8,000, plus reimbursement of
out-of-pocket expenses.
If a shareholder wishes to participate in the meeting, but does not wish
to authorize the execution of a proxy by telephone, the shareholder may still
submit the proxy form included with this proxy statement or attend the meeting
in person.
SHARES OWNED BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of July 7, 2000, no shareholder owns of record or is known by the Fund
to own of record or beneficially own 5% or more of any class of the Fund's
shares.
On July 7, 2000, the Directors and officers as a group owned beneficially
less than one percent of the Fund's outstanding shares.
A COPY OF THE FUND'S MOST RECENT ANNUAL AND SEMIANNUAL REPORTS WILL BE
FURNISHED, WITHOUT CHARGE, TO ANY SHAREHOLDER UPON REQUEST TO PHOENIX EQUITY
PLANNING CORPORATION, 100 BRIGHT MEADOW BOULEVARD, P.O. BOX 2200, ENFIELD,
CONNECTICUT 06083-2200. SHAREHOLDERS MAY ALSO CALL PHOENIX EQUITY PLANNING
CORPORATION TOLL-FREE AT (800) 243-4361.
REASONS FOR THE PROPOSED REORGANIZATION
The reorganization is one of a series of proposed transactions in which
mutual funds managed by Phoenix Investment Counsel, Inc. ("Phoenix") and its
affiliates (the "Phoenix Funds") would be reorganized as series of newly created
Delaware business trusts. Each such trust would have a substantially similar
trust instrument and common
2
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fundamental investment restrictions. Because many of these funds began
operations outside of the Phoenix organization, they have a variety of different
domiciles, business forms, charter provisions and fundamental investment
restrictions. Management believes that further integrating all of the Phoenix
Funds by adopting a single business form, domicile, form of trust instrument and
standardized fundamental investment restrictions offers the opportunity for
operational efficiencies that will benefit all shareholders.
In recent years, many mutual funds have reorganized as Delaware business
trusts. The Directors believe that the proposed Delaware business trust form
provides the most flexible and cost efficient method of providing different
investment vehicles to present and prospective shareholders. Phoenix believes
that the use of a common form of organization will help in the administration of
the Fund. A Massachusetts corporation is subject to the legal requirements
imposed by Massachusetts corporate law. A Delaware business trust is subject to
fewer statutory requirements.
It is anticipated that under the Delaware trust instrument, the Delaware
Trust will be required to have fewer shareholder meetings, potentially further
reducing costs. For example, the Delaware trust will not be required to hold an
annual meeting of shareholders. Delaware law affords to Trustees the ability to
adapt the Delaware Trust to future contingencies; for example, the Trustees will
have the power to amend the Delaware trust instrument, merge or consolidate the
New Fund with another entity and to change the Delaware Trust's domicile, in
each case without a shareholder vote. Any exercise of this authority by the
Trustees will be subject to applicable federal law. Although the Trustees will
have the authority to take these actions in the future without a shareholder
vote, they are not required to do so, and may determine that it is appropriate
to submit one or more of these actions to the shareholders for approval. The
flexibility under the Delaware trust instrument should help to assure that the
Delaware Trust always operates under the most advanced form of organization, and
is intended to reduce the expense and frequency of future shareholder meetings
for non-investment-related operational issues. For a more detailed comparison of
the Fund's current Massachusetts Articles of Organization and the proposed
Delaware trust instrument, see "Certain Comparative Information about the Fund
and the Delaware Trust" on page 11.
The New Fund has fundamental investment restrictions which are expected to
become standard for all of the Phoenix Funds. These restrictions differ in
certain respects from those of the existing Fund. Phoenix believes that
increased standardization of fundamental investment restrictions will help to
promote operational efficiencies and facilitate monitoring of compliance with
the restrictions. Phoenix does not presently anticipate that the use of
different investment restrictions will have any material impact on the
investment techniques employed by the New Fund. For a more detailed comparison
of the current and proposed fundamental investment restrictions, see
"Comparative Investment Restrictions" on page 4.
THE AGREEMENT AND PLAN OF REORGANIZATION
The reorganization will consist of several steps that will occur on a
closing date following shareholder approval. First, the Fund will transfer all
of its assets to the New Fund in exchange solely for all of the shares of the
New Fund. The New Fund will also assume all of the liabilities of the Fund.
Immediately thereafter, the Fund will liquidate and distribute shares of the New
Fund to its shareholders in exchange for their shares of the Fund. This will be
accomplished by opening an account on the books of the New Fund in the name of
each shareholder of record of the Fund and by crediting to each account the
shares due in the reorganization. Every shareholder will own the same number of
shares of the corresponding class of the New Fund as the number of Fund shares
held by the shareholder in each class of the Fund immediately before the
reorganization.
The reorganization is subject to a number of conditions set forth in the
reorganization agreement. Certain of these conditions may be waived by the Board
of Directors. The significant conditions which may not be waived include: (a)
the receipt by the Fund and the Delaware Trust of an opinion of counsel as to
certain federal income tax aspects of the reorganization and (b) the approval of
the reorganization agreement by the shareholders of the Fund. The reorganization
agreement may be terminated and the reorganization abandoned at any time, before
or after approval by the shareholders of the Fund prior to the closing date, by
the Board of Directors. In addition, the reorganization agreement may be amended
by the Board of Directors. However, the reorganization agreement may not be
amended subsequent to the shareholders meeting in a manner that would change the
method for determining the number of shares to be issued to shareholders of the
existing Fund without shareholder approval.
The closing of the reorganization is scheduled to occur on the first
Friday after the conditions to closing set forth in the reorganization agreement
are satisfied or waived. Phoenix currently anticipates that the closing will
occur on or about September 29, 2000.
3
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The reorganization agreement authorizes the Fund, as the sole shareholder
of the New Fund prior to the distribution of shares of the New Fund to Fund
shareholders, to:
o elect trustees of the Delaware Trust;
o approve an investment management agreement with Phoenix; and
o ratify the selection of PricewaterhouseCoopers LLP as the independent
accountants for the New Fund.
Following the completion of the reorganization, the Trustees intend to
take all appropriate and necessary action to liquidate and dissolve the Fund
under the laws of the Commonwealth of Massachusetts.
THE BOARD OF DIRECTORS, INCLUDING THE INDEPENDENT
DIRECTORS, RECOMMEND THAT THE SHAREHOLDERS
APPROVE THE PLAN OF REORGANIZATION.
MANAGEMENT AND OTHER SERVICE PROVIDERS
Phoenix, the current adviser of the Fund, will continue to serve as
investment adviser to the New Fund following the reorganization. The
reorganization agreement authorizes the Fund, while it is the sole shareholder
of the New Fund, to approve a new advisory agreement with Phoenix that is
substantially identical to the current agreement. The rate of advisory fees
payable to Phoenix under the new advisory agreement will be the same as under
the current agreement.
Phoenix acts as the investment adviser for 14 fund companies totaling 38
mutual funds, as subadviser to two fund companies totaling three mutual funds,
and as adviser to institutional clients. Phoenix has acted as an investment
adviser for over sixty years. As of December 31, 1999, Phoenix had approximately
$25.7 billion in assets under management.
All of the outstanding stock of Phoenix is owned by Phoenix Equity
Planning Corporation ("Equity Planning" or "Distributor"), a subsidiary of
Phoenix Investment Partners, Ltd. ("PXP"). PXP is a New York Stock Exchange
traded company that provides investment management and related services to
institutional investors, corporations and individuals through operating
subsidiaries. Phoenix Home Life Mutual Insurance Company of Hartford,
Connecticut is a majority shareholder of PXP.
As compensation for its services, Phoenix receives a fee from the Fund,
which is accrued daily against the value of the Fund's net assets equal to 0.65%
of the Fund's average daily net assets up to $1 billion, 0.60% of the Fund's
average daily net assets from $1 billion to $2 billion and 0.55% of the Fund's
average daily net assets in excess of $2 billion.
The current advisory agreement with Phoenix was last approved by the Board
of Directors on November 19, 1999. The advisory agreement may be terminated
without penalty at any time on sixty 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 Advisor, and will automatically terminate in the event of its
assignment as defined in Section 2(a)(4) of the 1940 Act.
PricewaterhouseCoopers LLP currently serves as the Fund's independent
accountants and will also serve as independent accountants for the New Fund. The
reorganization agreement authorizes the Fund, while it is the sole shareholder
of the New Fund, to ratify the selection of PricewaterhouseCoopers LLP as the
New Fund's independent accountants. State Street Bank and Trust Company will
continue to serve as custodian of the New Fund's assets following the
reorganization. Equity Planning will continue to serve as transfer agent
following the reorganization.
FISCAL YEAR
The Fund currently operates on a fiscal year ending December 31. Following
the reorganization, the New Fund will also operate on a fiscal year ending
December 31.
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGY
The investment objectives and principal investment strategy of the New
Fund will be identical to the investment objectives and principal investment
strategy of the Fund.
COMPARATIVE INVESTMENT RESTRICTIONS
The Fund is currently subject to certain investment restrictions that
restrict the scope of its investments. As a result of the reorganization,
shareholders will hold an interest in the New Fund with somewhat different
investment restrictions than the Fund. The differences between the fundamental
investment restrictions applicable to the Fund and the fundamental investment
restrictions applicable to the New Fund include the following:
4
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Diversification. The percentage limitations in the Fund's current
diversification restriction apply to all of the Fund's assets. The percentage
limitations in the proposed restriction will apply to only 75% of the assets of
the New Fund. Consequently, 25% of the New Fund's assets are in a basket that is
excluded from the limitations. This would permit the New Fund to invest in a
smaller number of issuers than the Fund is currently permitted to invest in. The
New Fund's restriction is based upon the definition of a "diversified company"
under the 1940 Act. If the New Fund were to invest in a smaller number of
issuers, the performance of a single issuer could have a substantial impact on
the New Fund's share price. Thus, the New Fund could be exposed to increased
volatility to the extent it invests in a smaller number of issuers.
Concentration. The Fund has an investment restriction which prohibits the
Fund from concentrating its investments in the securities and issuers all of
which conduct their principal business activities in the same industry provided
that the restriction shall not apply to obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities. Under the restriction
applicable to the New Fund, the New Fund may not purchase securities if, after
giving effect to the purchase, more than 25% of its total assets would be
invested in the securities of one or more issuers conducting their principal
business activities in the same industry (excluding the U.S. Government, its
agencies or instrumentalities). The restriction applicable to the New Fund is
essentially identical to the Fund's restriction because the SEC has taken the
position that "concentration" means a fund has invested more than 25% of its
assets in any one industry.
Borrowing. The Fund may not borrow money in excess of 5% of the market
value of its total assets. The Fund may only borrow within this limitation as a
temporary measure for emergency or extraordinary purposes. The New Fund has
greater flexibility to borrow money in that it may borrow up to one-third of its
total assets (including the amount borrowed) from banks, plus an additional 5%
of its total assets from banks or other lenders for temporary purposes. Any
borrowing would exaggerate the effect on the New Fund's net asset value
resulting from any increase or decrease in the market price of securities in the
New Fund's portfolio and, therefore, may increase the volatility of the New
Fund. Money borrowed will be subject to interest and other costs. These costs
may exceed the gain on securities purchased with borrowed funds. The proposed
restriction does not contain a limitation on pledging of assets. The 1940 Act
does not require a mutual fund to adopt a fundamental investment restriction
regarding the pledging of assets. The New Fund's borrowing restriction is based
upon the limitations currently imposed on borrowing by mutual funds by the 1940
Act.
Senior Securities. Under the Fund's current restriction, the Fund may not
issue senior securities as defined in the 1940 Act except to the extent that it
is permissible to borrow money from banks pursuant to the Fund's investment
restriction regarding the borrowing of money. The New Fund has greater
flexibility to issue senior securities in that activities permitted by SEC
exemptive orders or staff interpretations shall not be deemed to be prohibited
by the restriction on senior securities. Mutual funds are generally prohibited
from issuing "senior securities." The SEC staff has previously permitted mutual
funds to engage in certain trading activities, subject to certain limitations,
that could otherwise be viewed as senior securities. The restriction applicable
to the New Fund clarifies that it is allowed to engage in these activities to
the extent permitted by the SEC or the SEC staff. Since the New Fund will have
greater flexibility to issue senior securities, the New Fund may be subject to
additional costs and risks. For example, the costs of engaging in trading
activities which could be viewed as senior securities can reduce a fund's total
return. In addition, upon engaging in activities which could be viewed as senior
securities, the New Fund could experience increased risks due to the effects of
leveraging.
Real Estate. Under the Fund's current restriction, the Fund may not make
any investment in real estate or real estate limited partnerships, except for
the purchase of marketable securities which are secured by interests in real
estate or issued by companies that deal in real estate. The proposed restriction
is substantially similar to the current restriction but would also permit the
New Fund to acquire or lease office space for its own use, although it is not
anticipated that the New Fund will do so. The proposed restriction would also
permit the New Fund to hold and sell real estate acquired as a result of the
ownership of securities (for example, as the holder of a bond in a company that
had gone into bankruptcy). While Phoenix believes this possibility is remote,
this change would provide useful flexibility should such an event occur.
Commodities. The current restriction permits the Fund to invest in futures
and options on futures so long as the aggregate sum of the initial margin
deposits and the premiums paid for related options do not exceed 5% of the
Fund's total assets. The current restriction also permits the Fund to invest in
options, subject to a similar 5% limitation, and to write exchange-traded
covered call options. The restriction applicable to the New Fund permits it to
purchase and sell derivatives that have a value tied to the value of a financial
index, financial instrument or other asset. These derivatives include, for
example, options, futures contracts and options on futures contracts. The
restriction applicable to the New Fund does not impose percentage limitations.
However, the New Fund's ability to engage in futures contracts and options on
futures remains subject to applicable rules of the Commodity Futures Trading
Commission ("CFTC"). Under current
5
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CFTC rules, the New Fund would not be permitted to enter into a futures
transaction if it would cause the aggregate amount of initial margin deposits
and related option premiums for non-hedging purposes to exceed 5% of the value
of its assets. While the use of derivatives can guard against potential risks,
it can eliminate some opportunities for gains. The main risk with derivatives is
that some types can amplify a gain or loss, potentially earning or losing
substantially more money than the actual cost of the derivative. With some
derivatives, whether used for hedging or speculation, there is also the risk
that the counterparty may fail to honor its contract terms, causing a loss for
the New Fund.
Lending. Under the Fund's restriction on lending, the Fund may not make
loans to other persons except that it may lend portfolio securities (up to
one-third of the market or other fair value of its total assets). The lending
restriction applicable to the New Fund does not contain any percentage
limitation. The staff of the SEC currently limits loans of portfolio securities
to one-third of a mutual fund's assets, including any collateral received from
the loan. If the SEC staff were to provide greater flexibility to mutual funds
to engage in securities lending in the future, the New Fund would be able to
take advantage of that increased flexibility. The Fund's restriction on lending
limits the Fund's investments in repurchase agreements to 10% of its total
assets and requires that these investments be liquid. The investment restriction
applicable to the New Fund does not contain any limitations on investments in
repurchase agreements. Based on current SEC staff positions, the New Fund may
not invest more than 15% of its assets in illiquid securities. The proposed
restriction would permit the New Fund to participate in an interfund lending
program with other registered investment companies. The current restriction does
not allow for interfund lending. Phoenix does not currently intend to establish
an interfund lending program.
Other Restrictions. Unlike the Fund, the New Fund does not have fundamental
investment restrictions relating to purchases of securities on margin, short
sales, purchases of securities of other investment companies, investing in
unseasoned issuers, purchasing warrants or rights, purchasing illiquid
securities, investing in oil, gas or mineral exploration interests or
investments in companies in which Directors or officers own an interest. Phoenix
believes these restrictions were based on the requirements formerly imposed by
state "blue sky" regulations as a condition to registration. These state laws
are no longer applicable to mutual funds. Phoenix does not presently anticipate
that the lack of these fundamental investment restrictions will have a material
impact on the investment techniques employed by the New Fund.
The table below sets forth the existing fundamental investment
restrictions of the Fund and the new fundamental investment restrictions which
will be applicable to the New Fund if the shareholders approve the proposed
reorganization. Fundamental investment restrictions may be changed only upon
approval by the holders of a majority of the outstanding shares of the Fund, as
defined in the 1940 Act.
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<CAPTION>
SUBJECT MATTER
OF RESTRICTION PROPOSED RESTRICTION CURRENT RESTRICTION
------------------------------ ------------------------------------------- -----------------------------------------------
<S> <C> <C>
Diversification The Fund may not, with respect to The Fund may not invest more than 5% of its
75% of its total assets, purchase total assets in the securities of any one
securities of an issuer (other than the issuer (except the U.S. Government) or
U.S. Government, its agencies, purchase more than 10% of the outstanding
instrumentalities or authorities or voting securities or more than 10% of the
repurchase agreements collateralized securities of any class of any one issuer.
by U.S. Government securities and other
investment companies), if: (a) such
purchase would, at the time, cause more
than 5% of the Fund's total assets taken
at market value to be invested in the
securities of such issuer; or (b) such
purchase would at the time result in more
than 10% of the outstanding voting
securities of such issuer being held by
the Fund.
------------------------------ ------------------------------------------- -----------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
------------------------------ ------------------------------------------- -----------------------------------------------
<CAPTION>
SUBJECT MATTER
OF RESTRICTION PROPOSED RESTRICTION CURRENT RESTRICTION
------------------------------ ------------------------------------------- -----------------------------------------------
<S> <C> <C>
Industry Concentration The Fund may not purchase securities if, The Fund may not concentrate its assets in
after giving effect to the purchase, more the securities of issuers which conduct their
than 25% of its total assets would be principal business activities in the same
invested in the securities of one or more industry. This restriction does not apply to
issuers conducting their principal obligations issued or guaranteed by the U.S.
business activities in the same industry Government, its agencies or instrumentalities.
(excluding the U.S. Government, its
agencies or instrumentalities).
------------------------------ ------------------------------------------- -----------------------------------------------
Borrowing The Fund may not borrow money, except (i) The Fund may not borrow in excess of 5% of
in amounts not to exceed one-third of the the market or other fair value of its total
value of the Fund's total assets assets, or pledge its assets to an extent
(including the amount borrowed) from greater than 5% of the market or other fair
banks, and (ii) up to an additional 5% of value of its total assets. Any such
its total assets from banks or other borrowings shall be from banks and shall be
lenders for temporary purposes. For undertaken only as a temporary measure for
purposes of this restriction, (a) extraordinary or emergency purposes. Deposits
investment techniques such as margin in escrow in connection with the writing of
purchases, short sales, forward covered call options, or the purchase or sale
commitments, and roll transactions, (b) of financial futures contracts and related
investments in instruments such as options are not deemed to be a pledge or
futures contracts, swaps, and options and other encumbrance.
(c) short-term credits extended in
connection with trade clearance and
settlement, shall not constitute
borrowing.
------------------------------ ------------------------------------------- -----------------------------------------------
Senior Securities The Fund may not issue "senior The Fund may not issue senior securities as
securities" in contravention of the 1940 defined in the Investment Company Act of 1940
Act. Activities permitted by SEC except to the extent that it is permissible
exemptive orders or staff interpretations to borrow money from banks pursuant to he
shall not be deemed to be prohibited by Fund's investment restrictions regarding the
this restriction. borrowing of money.
------------------------------ ------------------------------------------- -----------------------------------------------
Underwriting The Fund may not underwrite the The Fund may not underwrite the securities of
securities issued by other persons, other issuers, except to the extent that in
except to the extent that, in connection connection with the disposition of its
with the disposition of portfolio portfolio securities, the Fund may be deemed
securities, the Fund may be deemed to be to be an underwriter.
an underwriter under applicable law.
------------------------------ ------------------------------------------- -----------------------------------------------
Real Estate The Fund may not purchase or sell real The Fund may not make any investment in real
estate, except that the Fund may (i) estate or real estate limited partnerships,
acquire or lease office space for its own except that the Fund may purchase or sell
use, (ii) invest in securities of issuers readily marketable securities which are
that invest in real estate or interests secured by interests in real estate, or
therein, (iii) invest in mortgage-related issued by companies which deal in real
securities and other securities that are estate, including real estate investment and
secured by real estate or interests mortgage investment trusts.
therein, (iv) hold and sell real estate
acquired by the Fund as a result of the
ownership of securities.
------------------------------ ------------------------------------------- -----------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
------------------------------ ------------------------------------------- -----------------------------------------------
<CAPTION>
SUBJECT MATTER
OF RESTRICTION PROPOSED RESTRICTION CURRENT RESTRICTION
------------------------------ ------------------------------------------- -----------------------------------------------
<S> <C> <C>
Commodities The Fund may not purchase or sell The Fund may not make any investment in
commodities or commodity contracts, commodities or commodities contracts, except
except the Fund may purchase and sell that the Fund may engage in financial futures
derivatives (including, but not limited contracts and related options transactions,
to, options, futures contracts and provided that the sum of the initial margin
options on futures contracts) whose value deposits on the Fund's futures and related
is tied to the value of a financial index options positions and the premiums paid for
or a financial instrument or other asset related options would not exceed 5% of the
(including, but not limited to, Fund's total assets.
securities indexes, interest rates,
securities, currencies and physical
commodities). The Fund may not 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
do 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.
------------------------------ ------------------------------------------- -----------------------------------------------
Lending The Fund may not make loans, except that The Fund may not make loans, except that the
the Fund may (i) lend portfolio Fund may (a) invest up to 10% of its total
securities, (ii) enter into repurchase assets in repurchase agreements of a type
agreements, (iii) purchase all or a regarded as "liquid" which are fully
portion of an issue of debt securities, collateralized as to principal and interest
bank loan participation interests, bank and which are entered into only with
certificates of deposit, bankers' commercial banks, brokers and dealers
acceptances, debentures or other considered by the Fund to be creditworthy and
securities, whether or not the purchase (b) loan its portfolio securities in amounts
is made upon the original issuance of the up to one-third of the market or other fair
securities and (iv) participate in an value of its total assets.
interfund lending program with other
registered investment companies.
------------------------------ ------------------------------------------- -----------------------------------------------
Purchases on Margin None. The Fund may not 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.
------------------------------ ------------------------------------------- -----------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
------------------------------ ------------------------------------------- -----------------------------------------------
<CAPTION>
SUBJECT MATTER
OF RESTRICTION PROPOSED RESTRICTION CURRENT RESTRICTION
------------------------------ ------------------------------------------- -----------------------------------------------
<S> <C> <C>
Short Sales None. The Fund may not make short sales of
securities, unless at the time of sale the
Fund owns an equal amount of such securities.
------------------------------ ------------------------------------------- -----------------------------------------------
Investment Companies None. The Fund may not 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.
------------------------------ ------------------------------------------- -----------------------------------------------
Director and Officer None. The Fund may not invest in securities of any
Interest issuer if any officer or Director of the Fund
or any officer or director of the Advisor
owns more than 1/2 of 1% of the outstanding
securities of such issuer and all such
persons own in the aggregate more than 5% of
the securities of such issuer.
------------------------------ ------------------------------------------- -----------------------------------------------
Unseasoned Issuers None. The Fund may not 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.
------------------------------ ------------------------------------------- -----------------------------------------------
Warrants or Rights None. The Fund may not invest in warrants or rights
except where acquired in units or attached to
other securities.
------------------------------ ------------------------------------------- -----------------------------------------------
Illiquid Securities None. The Fund may not 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.
------------------------------ ------------------------------------------- -----------------------------------------------
Oil, Gas and Mineral None. The Fund may not invest in interests in oil,
Exploration gas, or other mineral exploration or
development programs.
------------------------------ ------------------------------------------- -----------------------------------------------
</TABLE>
9
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
As a condition to the reorganization, the Fund will receive a tax opinion
from its counsel, Goodwin, Procter & Hoar LLP. The tax opinion will provide that
subject to customary assumptions and representations, on the basis of the
existing provisions of the Internal Revenue Code (the "Code"), the Treasury
regulations promulgated thereunder and current administrative and judicial
interpretations thereof, for federal income tax purposes:
o the transfer of all of the assets of the Fund solely in exchange for
shares of the New Fund and the assumption by the New Fund of all
known liabilities of the Fund, and the distribution of such shares to
the shareholders of the Fund, will constitute a "reorganization"
within the meaning of Section 368(a) of the Code; the New Fund and
the Fund will each be a "party to a reorganization" within the
meaning of Section 368(b) of the Code;
o no gain or loss will be recognized by the Fund on the transfer of the
assets of the Fund to the New Fund in exchange for New Fund shares
and the assumption by the New Fund of all known liabilities of the
Fund or upon the distribution of New Fund shares to the Fund
shareholders in exchange for their shares of the Fund;
o the tax basis of the Fund's assets acquired by the New Fund will be
the same to the New Fund as the tax basis of such assets to the Fund
immediately prior to the reorganization, and the holding period of
the assets of the Fund in the hands of the New Fund will include the
period during which those assets were held by the Fund;
o no gain or loss will be recognized by the New Fund upon the receipt
of the assets of the Fund solely in exchange for the New Fund shares
and the assumption by the New Fund of all known liabilities of the
Fund;
o no gain or loss will be recognized by shareholders of the Fund upon
the receipt of shares of the New Fund by such shareholders, provided
such shareholders receive solely New Fund shares (including
fractional shares) in exchange for their Fund shares; and
o the aggregate tax basis of the New Fund shares, including any
fractional shares, received by each shareholder of the Fund pursuant
to the reorganization will be the same as the aggregate tax basis of
the Fund shares held by such shareholder immediately prior to the
reorganization, and the holding period of the New Fund shares,
including fractional shares, to be received by each shareholder of
the Fund will include the period during which the Fund shares
exchanged therefor were held by such shareholder (provided that the
Fund shares were held as a capital asset on the date of the
reorganization).
The Fund has not obtained an Internal Revenue Service ("IRS") private
letter ruling regarding the federal income tax consequences of the
reorganization, and the IRS is not bound by advice of counsel. If the transfer
of the assets of the Fund in exchange for New Fund shares, the assumption by the
New Fund of all known liabilities of the Fund, and the distribution of such
shares to shareholders of the Fund, do not constitute a "reorganization" within
the meaning of Section 368(a) of the Code, each Fund shareholder generally will
recognize gain or loss equal to the difference between the value of New Fund
shares such shareholder acquires and the tax basis of such shareholder's Fund
shares.
Shareholders of the Fund should consult their tax advisers regarding the
effect, if any, of the proposed reorganization in light of their individual
circumstances. Since the foregoing discussion relates only to the federal income
tax consequences of the reorganization, shareholders of the Fund should also
consult tax advisers as to state and local tax consequences, if any, of the
reorganization.
COMPARATIVE INFORMATION ON DISTRIBUTION ARRANGEMENTS
The distribution arrangements of the New Fund will be the same as those of
the Fund. The Fund currently offers Class A and Class B shares. In the proposed
reorganization, shareholders will receive the corresponding class of shares of
the New Fund in exchange for their shares in the Fund. The reorganization will
be effected at net asset value. No sales charge will be imposed in connection
with the reorganization. For purposes of calculating the contingent deferred
sales charges that shareholders may pay when disposing of any shares of the New
Fund subject to a contingent deferred sales charge, the length of time the
shareholder holds shares in the New Fund will be added to the length of time the
shareholder held the shares in the Fund. Holders of shares subject to a
contingent deferred sales charge will continue to be subject to a contingent
deferred sales charge upon subsequent redemption to the same extent as if the
shareholder had continued to hold shares of the Fund.
Equity Planning serves as the distributor of shares for the Fund and will
also be the distributor of the New Fund. The Delaware Trust will adopt
distribution plans under Rule 12b-1 of the 1940 Act for each class of shares
relating to the sale and promotion of shares of the New Fund and the furnishing
of shareholder services that are substantially identical to the existing
distribution plans for the Fund.
10
<PAGE>
COMPARATIVE INFORMATION ON SHAREHOLDER SERVICES
The New Fund will offer the same shareholder services as the Fund,
including a Systematic Withdrawal Program, telephone exchanges, telephone
redemptions and access to the Investo-Matic Program, an automatic investment
program.
Shareholders may exchange shares for another Phoenix Fund in the same
class of shares; e.g., Class A for Class A. Exchange privileges may not be
available for all Phoenix Funds and may be rejected or suspended.
Shares of the New Fund may be redeemed at a redemption price equal to the
net asset value of the shares as next determined following the receipt of a
redemption order and any other required documentation in proper form. In the
case of redemption of shares subject to a contingent deferred sales charge,
investors will be subject to the applicable determined deferred sales charges,
if any, for such shares. Payment of redemption proceeds for redeemed New Fund
shares will be made within seven days after receipt of a redemption request in
proper form and documentation.
DIVIDENDS AND DISTRIBUTIONS
The New Fund will have the same dividend and distribution policy as the
Fund. After the closing of the reorganization, Fund shareholders who currently
have dividends reinvested will continue to have dividends reinvested in the New
Fund. Shareholders who currently have capital gains reinvested will continue to
have capital gains reinvested in the New Fund.
CERTAIN COMPARATIVE INFORMATION ABOUT THE FUND AND THE DELAWARE TRUST
The following is a summary of certain differences between and among the
articles of organization and by-laws of the Fund and the trust instrument and
by-laws of the Delaware Trust. It is not a complete list of the differences.
Shareholders should refer to the provisions of these documents and state law
directly for a more thorough comparison. Copies of the articles of organization
and by-laws of the Fund and of the trust instrument and by-laws of the Delaware
Trust are available to shareholders without charge upon written request.
General. The Fund was organized as a Massachusetts corporation in 1966.
The Fund is currently governed by its Articles of Organization dated March 21,
1967, as amended (the "Massachusetts Charter"). As a Massachusetts corporation,
the Fund's operations are currently governed by the Massachusetts Charter and
applicable Federal and Massachusetts law. The Delaware Trust was organized as a
Delaware business trust in July 2000. As a Delaware business trust, the Delaware
Trust's operations will be governed by an Agreement and Declaration of Trust
(the "Delaware Trust Instrument") and applicable Federal and Delaware law.
Under the Delaware Trust Instrument, the Trustees of the Delaware Trust
will have more flexibility than they currently have as Directors of the Fund
and, subject to applicable requirements of the 1940 Act and Delaware law,
broader authority to act. The increased flexibility may allow the Trustees to
react more quickly to changes in competitive and regulatory conditions and, as a
consequence, may allow the New Fund to operate in a more efficient and
economical manner. The Directors' existing fiduciary obligations to act with due
care and in the interest of shareholders will not be affected by the
reorganization.
Term of Trustees. The term of office of a Trustee of the Delaware Trust is
unlimited in duration unless the Trustees themselves adopt a limited term. A
person serving as Trustee will continue as Trustee until the person resigns,
dies or is removed from office. Under the Delaware Trust Instrument, a Trustee
may be removed with or without cause at any meeting of shareholders by a vote of
at least two-thirds of the outstanding shares of the Trust or by a vote of
two-thirds of the number of Trustees prior to such removal. Under Massachusetts
law, Directors of the Fund currently hold office until the next annual meeting
and until their respective successors are chosen and qualified. Under
Massachusetts law, Directors may be removed from office with or without cause by
a majority shareholder vote. In addition, under Massachusetts law, a Director
may be removed from office for cause by vote of a majority of the Directors then
in office.
Liability of Trustees and Officers. Under Massachusetts law, the charter
of a corporation may include provisions limiting the liability of its Directors
and officers to the corporation, subject to certain exceptions. The
Massachusetts Charter does not currently contain any such provision. A Trustee
of the Delaware Trust will be personally liable only for his or her own willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee. Under both the Massachusetts
Charter and the Delaware Trust, Directors/Trustees, officers and employees will
be indemnified by the respective entity for the expenses of litigation against
them unless it is determined that his or her conduct constitutes willful
misfeasance, bad faith, gross negligence or reckless disregard of his or her
duties. Under Massachusetts law, no indemnification may be provided for any
person with respect to any matter as to which he shall have been adjudicated in
any proceeding not to have acted in good faith in the reasonable belief that his
action was in the best interest of the corporation.
11
<PAGE>
Issuance of Shares. The Delaware Trust is authorized to issue an unlimited
number of shares of beneficial interests of one or more series or classes. The
Fund is authorized to issue only the number of shares of common stock specified
in the Massachusetts Charter. In order to increase the number of authorized
shares, a majority of each class of stock outstanding and entitled to vote
thereon must approve an amendment to the Massachusetts Charter providing for the
increase in authorized shares and the Fund must make a filing with the
Commonwealth of Massachusetts.
Shareholder Liability. Under Massachusetts law, shareholders of a Fund
organized as a Massachusetts corporation generally have no personal liability
for the Fund's obligations. Shareholders of a Delaware business trust generally
have the same protection from personal liability that they would have as
shareholders of a Massachusetts corporation.
Shareholder Voting. The voting rights of shareholders of the Fund are
based on the number of shares the shareholder owns. Each holder of a share of
the Fund is entitled to one vote for each whole share and a proportionate
fractional vote for each fractional share. As a shareholder of the Delaware
Trust, voting rights will be dollar-based. Each shareholder will have one vote
for each dollar of net asset value held by the shareholder regardless of the
number of shares held. Under dollar-based voting rights, a shareholder's voting
power will be in direct proportion to the shareholder's investment in the
Delaware Trust. Therefore, on matters affecting the New Fund as a whole, where
each class of the New Fund is required to vote together on an issue,
shareholders who own shares of a class with a higher net asset value per share
would have more voting power than they currently have relative to shareholders
who own shares of a class with a lower net asset value per share. On matters
where only shareholders of a single class vote on an issue, all shareholders of
the class would have the same voting rights since the net asset value per share
is the same for all shares in a single class.
Shareholder Meetings. Under Massachusetts law, a corporation is required
to hold an annual meeting of shareholders within six months after the end of its
fiscal year. In addition, Massachusetts law provides that special meetings of a
Massachusetts corporation may be called upon the written request of shareholders
owning at least 10% of the outstanding shares entitled to vote at the meeting.
The Delaware Business Trust is not required to hold annual shareholder meetings,
and the Delaware Trust Instrument does not specifically authorize shareholders
to call a special meeting. However, under the 1940 Act, shareholders owning at
least 10% of the outstanding shares of the Delaware Trust may by written request
call a special meeting of shareholders of the Delaware Trust for the purpose of
removing a Trustee.
Reorganization/Combination Transactions. Under the Delaware Trust
Instrument, the Trustees may generally authorize mergers, consolidations, share
exchanges and reorganizations of a New Fund or the Delaware Trust with another
trust, series or other business organization without shareholder approval.
Massachusetts law requires a shareholder vote for a merger, consolidation, share
exchange or transfer of assets of the Fund.
Classification or Reclassification of Shares. The Delaware Trust allows
the Trustees to classify or re-classify any issued shares into shares of one or
more series or classes without obtaining any shareholder approval. While the
Directors of a Massachusetts corporation are permitted to classify or reclassify
unissued shares without shareholder approval, the classification or
reclassification of issued shares currently requires the approval of
shareholders.
Termination of Trust or Fund. Under the Delaware Trust Instrument, the
Delaware Trust may be terminated at any time by the Trustees alone, upon written
notice to the shareholders, or by vote of a majority of the shares of the
Delaware Trust. The New Fund or a class thereof may be terminated at any time by
a vote of a majority of the shares of the New Fund or class or by the Trustees
by written notice to the shareholders of the New Fund or class. As a
Massachusetts corporation, a shareholder vote is required in order to dissolve
the Fund.
Amendment of Charter Document. Under the Delaware Trust Instrument, the
Trustees may generally restate, amend or otherwise supplement the Declaration of
Trust without the approval of shareholders, subject to limited exceptions (such
as amendments affecting shareholders' liability or indemnity rights). Under
Massachusetts law, a shareholder vote is required to amend the Massachusetts
Charter.
CURRENT BOARD COMMITTEES AND MEETINGS
The 1940 Act requires that at least one-half of the Directors of
the Fund and, following the reorganization, Trustees of the Delaware Trust, be
elected by shareholders. The Fund currently meets this standard. Rather than
call another shareholder meeting to vote on Trustees after the reorganization,
the reorganization agreement authorizes the Fund, while it is the sole
shareholder of the New Fund, to elect the then current Trustees of the Fund,
except for Calvin J. Pedersen, as the Trustees of the Delaware Trust.
Information on the individuals that will serve as the Trustees and
officers of the Delaware Trust and their business affiliations for the past five
years are set forth below. Unless otherwise noted, the address of each executive
officer and
12
<PAGE>
Trustee is 56 Prospect Street, Hartford, Connecticut, 06115-0480. Trustees whose
names are preceded by an asterisk will be "interested persons" of the Delaware
Trust (as defined in the 1940 Act).
<TABLE>
--------------------------------- --------------------- -----------------------------------------------------------------
<CAPTION>
POSITIONS HELD
NAME, ADDRESS AND AGE WITH THE FUND PRINCIPAL OCCUPATIONS DURING THE PAST 5 YEARS
--------------------------------- --------------------- -----------------------------------------------------------------
<S> <C> <C>
Robert Chesek (66) Director Trustee/Director (1981-present) and Chairman (1989-1994),
49 Old Post Road Phoenix Funds. Trustee, Phoenix-Aberdeen Series Fund, Phoenix
Wethersfield, CT 06109 Duff & Phelps Institutional Mutual Funds (1996-present) and
Phoenix-Seneca Funds (2000-present).
--------------------------------- --------------------- -----------------------------------------------------------------
E. Virgil Conway (71) Director Chairman, Metropolitan Transportation Authority
9 Rittenhouse Road (1992-present). Trustee/Director, Consolidated Edison Company
Bronxville, NY 10708 of New York, Inc. (1970-present), Pace University
(1978-present), Atlantic Mutual Insurance Company
(1974-present), HRE Properties (1989-present), Greater New
York Councils, Boy Scouts of America (1985-present), Union
Pacific Corp. (1978-present), Blackrock Freddie Mac Mortgage
Securities Fund (Advisory Director) (1990-present), Centennial
Insurance Company (1974-present), Josiah Macy, Jr., Foundation
(1975-present), The Harlem Youth Development Foundation
(1987-present) and New York Housing Partnership Development
Corp. (1981-present). Director, Accuhealth (1994-present),
Trism, Inc. (1994-present), Realty Foundation of New York
(1972-present), Vice Chairman, The Academy of Political
Science (1985-present). Director/Trustee, Phoenix Funds
(1993-present). Trustee, Phoenix-Aberdeen Series Fund, Phoenix
Duff & Phelps Institutional Mutual Funds (1996-present) and
Phoenix-Seneca Funds (2000-present). Director, Duff & Phelps
Utilities Tax-Free Income Inc. and Duff & Phelps Utility and
Corporate Bond Trust Inc. (1995-present). Chairman/Member, Audit
Committee of the City of New York (1981-1996). Advisory
Director, Blackrock Fannie Mae Mortgage Securities Fund
(1989-1996) and Fund Directions (1993-1998). Chairman,
Financial Accounting Standards Advisory Council (1992-1995).
--------------------------------- --------------------- -----------------------------------------------------------------
Harry Dalzell-Payne (71) Director Director/Trustee, Phoenix Funds (1993-present). Trustee,
The Flat Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Elmore Court Institutional Mutual Funds (1996-present) and Phoenix-Seneca
Elmore, GLOS GL2 6NT, UK Funds (1999-present). Director, Duff & Phelps Utilities
Tax-Free Income Inc. and Duff & Phelps Utility and Corporate
Bond Trust Inc. (1995-present). Formerly a Major General of
the British Army.
--------------------------------- --------------------- -----------------------------------------------------------------
*Francis E. Jeffries (69) Director Director/Trustee, Phoenix Funds (1995-present). Trustee,
8477 Bay Colony Dr. Phoenix-Aberdeen Series, and Phoenix Duff & Phelps
#902 Institutional Mutual Funds (1996-present) and Phoenix-Seneca
Naples, FL 34108 Funds (2000-present). Director, Duff & Phelps Utilities
Income Inc. (1987-present), Duff & Phelps Utilities Tax-Free
Income Inc. (1991-present) and Duff & Phelps Utility and
Corporate Bond Trust Inc. (1993-present). Director, The
Empire District Electric Company (1984-present). Director
(1989-1997), Chairman of the Board (1993-1997), President
(1989-1993), and Chief Executive Officer (1989-1995), Phoenix
Investment Partners, Ltd.
--------------------------------- --------------------- -----------------------------------------------------------------
</TABLE>
13
<PAGE>
<TABLE>
--------------------------------- --------------------- -----------------------------------------------------------------
<CAPTION>
POSITIONS HELD
NAME, ADDRESS AND AGE WITH THE FUND PRINCIPAL OCCUPATIONS DURING THE PAST 5 YEARS
--------------------------------- --------------------- -----------------------------------------------------------------
<S> <C> <C>
Leroy Keith, Jr. (61) Director Chairman (1995-present) and Chief Executive Officer
Chairman (1995-1999), Carson Products Company. Director/Trustee,
Carson Products Company Phoenix Funds (1980-present). Trustee, Phoenix-Aberdeen Series
64 Ross Road Fund, Phoenix Duff & Phelps Institutional Mutual Funds
Savannah, GA 30750 (1996-present) and Phoenix-Seneca Funds (2000-present).
Director, Equifax Corp. (1991-present) and Evergreen
International Fund, Inc. (1989-present). Trustee, Evergreen
Liquid Trust, Evergreen Tax Exempt Trust, Evergreen Tax Free
Fund, Master Reserves Tax Free Trust, and Master Reserves
Trust.
--------------------------------- --------------------- -----------------------------------------------------------------
*Philip R. McLoughlin (53) Director and Chairman (1997-present), Director (1995-present), Vice
President Chairman (1995-1997) and Chief Executive Officer
(1995-present), Phoenix Investment Partners, Ltd. Director
(1994-present) and Executive Vice President, Investments
(1988-present), Phoenix Home Life Mutual Insurance Company.
Director/Trustee and President, Phoenix Funds (1989-present).
Trustee and President, Phoenix-Aberdeen Series Fund and
Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free
Income Inc. (1995-present) and Duff & Phelps Utility and
Corporate Bond Trust Inc. (1995-present). Trustee,
Phoenix-Seneca Funds (1999-present). Director (1983-present)
and Chairman (1995-present), Phoenix Investment Counsel, Inc.
Director (1984-present) and President (1990-1999), Phoenix
Equity Planning Corporation. Chairman and Chief Executive
Officer, Phoenix-Zweig Advisers LLC (1999-present). Director,
PXRE Corporation (Delaware) (1985-present) and World Trust
Fund (1991-present). Director and Executive Vice President,
Phoenix Life and Annuity Company (1996-present). Director
and Executive Vice President, PHL Variable Insurance
Company (1995-present). Director, Phoenix Charter Oak Trust
Company (1996-present). Director and Vice President, PM
Holdings, Inc. (1985-present). Director (1992-present)
and President (1992-1994), W.S. Griffith & Co., Inc. Director,
PHL Associates, Inc. (1995-present).
--------------------------------- --------------------- -----------------------------------------------------------------
Everett L. Morris (72) Director Vice President, W.H. Reaves and Company (1993-present).
164 Laird Road Director/Trustee, Phoenix Funds (1995-present). Trustee,
Colts Neck, NJ 07722 Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present) and Phoenix-Seneca
Funds (2000-present). Director, Duff & Phelps Utilities
Tax-Free Income Inc. (1991-present) and Duff & Phelps Utility
and Corporate Bond Trust Inc. (1993-present).
--------------------------------- --------------------- -----------------------------------------------------------------
</TABLE>
14
<PAGE>
<TABLE>
--------------------------------- --------------------- -----------------------------------------------------------------
<CAPTION>
POSITIONS HELD
NAME, ADDRESS AND AGE WITH THE FUND PRINCIPAL OCCUPATIONS DURING THE PAST 5 YEARS
--------------------------------- --------------------- -----------------------------------------------------------------
<S> <C> <C>
*James M. Oates (54) Director Chairman, IBEX Capital Markets, Inc. (formerly, IBEX Capital
Managing Director Markets LLC) (1997-present). Managing Director, Wydown Group
The Wydown Group (1994-present). Director, Phoenix Investment Partners, Ltd.
IBEX Capital Markets, Inc. (1995-present). Director/Trustee, Phoenix Funds
60 State Street (1987-present). Trustee, Phoenix-Aberdeen Series Fund, Phoenix
Suite 950 Duff & Phelps Institutional Mutual Funds (1996-present) and
Boston, MA 02109 Phoenix-Seneca Funds (2000-present). Director, AIB Govett
Funds (1991-present), Investors Financial Service Corporation
(1995-present), Investors Bank & Trust Corporation
(1995-present), Plymouth Rubber Co. (1995-present), Stifel
Financial (1996-present), Command Systems, Inc.
(1998-present), Connecticut River Bancorp (1998-present) and
Endowment for Health (1999-present). Vice Chairman,
Massachusetts Housing-Partnership (1998-2000). Director, Blue
Cross and Blue Shield of New Hampshire (1994-1999).
--------------------------------- --------------------- -----------------------------------------------------------------
Herbert Roth, Jr. (71) Director Director/Trustee, Phoenix Funds (1980-present). Trustee,
134 Lake Street Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
P.O. Box 909 Institutional Mutual Funds (1996-present) and Phoenix-Seneca
Sherborn, MA 01770 Funds (2000-present). Director, Boston Edison Company
(1978-present), Landauer, Inc. (medical services)
(1970-present), Tech Ops./Sevcon, Inc. (electronic
controllers) (1987-present), and Mark IV Industries
(diversified manufacturer) (1985-present). Member, Directors
Advisory Council, Phoenix Home Life Mutual Insurance Company
(1998-present). Director, Phoenix Home Life Mutual Insurance
Company (1972-1998).
--------------------------------- --------------------- -----------------------------------------------------------------
Richard E. Segerson (54) Director Managing Director, Northway Management Company (1998-present).
102 Valley Road Director/Trustee, Phoenix Funds (1993-present). Trustee,
New Canaan, CT 07840 Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present) and Phoenix-Seneca
Funds (2000-present). Managing Director, Mullin Associates
(1993-1998).
--------------------------------- --------------------- -----------------------------------------------------------------
Lowell P. Weicker, Jr. (69) Director Trustee/Director, Phoenix Funds (1995-present). Trustee,
731 Lake Avenue Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Greenwich, CT 06830 Institutional Mutual Funds (1996-present) and Phoenix-Seneca
Funds (2000-present). Director, UST Inc. (1995-present), HPSC
Inc. (1995-present), and Compuware (1996-present) and Burroughs
Wellcome Fund (1996-present). Visiting Professor, University
of Virginia (1997-present). Director, Duty Free International, Inc.
(1997). Chairman, Dresing, Lierman, Weicker (1995-1996).
Governor of the State of Connecticut (1991-1995).
--------------------------------- --------------------- -----------------------------------------------------------------
Michael E. Haylon (42) Executive Director and Executive Vice President--Investments, Phoenix
Vice Investment Partners, Ltd. (1995-present). Director (1994-
President present), President (1995-present), Executive Vice President
(1994-1995), Vice President (1991-1994), Phoenix Investment
Counsel, Inc. Director, Phoenix Equity Planning Corporation
(1995-present). Executive Vice President, Phoenix Funds
(1993-present) and Phoenix-Aberdeen Series Fund (1996-present).
Executive Vice President (1997-present), Vice President (1996-
1997), Phoenix Duff & Phelps Institutional Mutual Funds. Senior
Vice President, Securities Investments, Phoenix Home Life
Mutual Insurance Company (1993-1995).
--------------------------------- --------------------- -----------------------------------------------------------------
</TABLE>
15
<PAGE>
<TABLE>
--------------------------------- --------------------- -----------------------------------------------------------------
<CAPTION>
POSITIONS HELD
NAME, ADDRESS AND AGE WITH THE FUND PRINCIPAL OCCUPATIONS DURING THE PAST 5 YEARS
--------------------------------- --------------------- -----------------------------------------------------------------
<S> <C> <C>
John F. Sharry (48) Executive President, Retail Division (1999-present), Executive Vice
Vice President, Retail Division (1997-1999), Phoenix Investment
President Partners, Ltd. President, Retail Division (1999-present),
Managing Director, Retail Distribution (1995-1999),
Phoenix Equity Planning Corporation. Executive Vice President,
Phoenix Funds, Phoenix-Aberdeen Series Fund (1998-present) and
Phoenix-Seneca Funds (2000-present). Managing Director,
Director and National Sales Manager, Putnam Mutual Funds
(1992-1995).
--------------------------------- --------------------- -----------------------------------------------------------------
James D. Wehr (43) Senior Vice Senior Vice President (1998-present), Managing Director, Fixed
President Income (1996-1998), Vice President (1991-1996), Phoenix
Investment Counsel, Inc. Senior Vice President (1997-present), Vice
President (1988-1997) Phoenix Multi-Portfolio Fund; Senior Vice
President (1997-present), Vice President (1990-1997) Phoenix Series
Fund; Senior Vice President (1997-present), Vice President
(1991-1997) The Phoenix Edge Series Fund; Senior Vice President
(1997-present), Vice President (1993-1997) Phoenix-Goodwin
California Tax Exempt Bonds, Inc., and Senior Vice President
(1997-present), Vice President (1996-1997) Phoenix Duff & Phelps
Institutional Mutual Funds. Senior Vice President (1997-present)
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.,
Phoenix-Goodwin Multi-Sector Short Term Bond Fund, Phoenix-Oakhurst
Income & Growth Fund and Phoenix-Oakhurst Strategic Allocation Fund,
Inc. Managing Director, Public Fixed Income, Phoenix Home Life
Insurance Company (1991-1995).
--------------------------------- --------------------- -----------------------------------------------------------------
Steven L. Colton (41) Vice President Managing Director, Value Equities, Phoenix Investment Counsel,
Inc. (1997-present). Vice President, The Phoenix Edge Series
Fund, Phoenix Series Fund, and Phoenix Equity Series Fund
(1997-present). Vice President, Phoenix-Oakhurst Income &
Growth Fund and Phoenix-Oakhurst Strategic Allocation Fund,
Inc. (1998-present). Vice President/Senior Portfolio Manager,
American Century Investment Management (1987-1997). Portfolio
Manager, American Century/Benham Equity Growth Fund
(1991-1996) and American Century/Benham Utilities Income Fund
(1993-1997).
--------------------------------- --------------------- -----------------------------------------------------------------
Robert S. Driessen (52) Vice President Vice President and Compliance Officer, Phoenix Investment
and Assistant Partners, Ltd. (1999-present) and Phoenix Investment Counsel,
Secretary Inc. (1999-present). Vice President, Phoenix Funds,
Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Institutional Mutual Funds (1999-present) and Phoenix-Seneca
Funds (2000-present). Compliance Officer (2000-present) and
Associate Compliance Officer (1999), PXP Securities Corporation.
Vice President, Risk Management Liaison, Bank of America
(1996-1999). Vice President, Securities Compliance, The
Prudential Insurance Company of America (1993-1996). Branch
Chief/Financial Analyst, Securities and Exchange Commission,
Division of Investment Management (1972-1993).
--------------------------------- --------------------- -----------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
--------------------------------- --------------------- -----------------------------------------------------------------
<CAPTION>
POSITIONS HELD
NAME, ADDRESS AND AGE WITH THE FUND PRINCIPAL OCCUPATIONS DURING THE PAST 5 YEARS
--------------------------------- --------------------- -----------------------------------------------------------------
<S> <C> <C>
Christopher J. Kelleher (43) Vice Managing Director, Fixed Income (1996-present), Vice President
President (1991-1996), Phoenix Investment Counsel, Inc. Vice President,
Phoenix Series Fund (1989-present), The Phoenix Edge Series
Fund (1989-1997 and 1998-present) and Vice President,
Phoenix-Oakhurst Income & Growth Fund. Phoenix Duff & Phelps
Institutional Mutual Funds (1996-1998). Portfolio Manager,
Public Bonds, Phoenix Home Life Insurance Company (1991-1995).
--------------------------------- --------------------- -----------------------------------------------------------------
William R. Moyer (55) Vice Executive Vice President and Chief Financial Officer
100 Bright Meadow Blvd. President (1999-present), Senior Vice President and Chief Financial Officer
PO Box 2200 (1995-1999), Phoenix Investment Partners, Ltd. Director
Enfield, CT 06083-2200 (1998-present), Senior Vice President, (1990-present), Chief
Financial Officer (1996-present), Finance (until 1996) and
Treasurer (1994-1996 and 1998-present), Phoenix Equity Planning
Corporation. Director (1998-present), Senior Vice President
(1990-present), Chief Financial Officer (1996-present) and
Treasurer (1994-present), Phoenix Investment Counsel, Inc.
Treasurer (1999-present), Senior Vice President and Chief Financial
Officer (1996-1999), Duff & Phelps Investment Management Co. Vice
President, Phoenix Funds (1990-present), Phoenix-Aberdeen Series
Fund and Phoenix Duff & Phelps Institutional Mutual Funds (1996-
present). Executive Vice President, Phoenix-Seneca Funds (2000-
present). Vice President, Investment Products Finance, Phoenix
Home Life Mutual Insurance Company (1990-1995).
--------------------------------- --------------------- -----------------------------------------------------------------
Nancy G. Curtiss (47) Treasurer Vice President, Fund Accounting (1994-present) and Treasurer
(1996-present), Phoenix Equity Planning Corporation.
Treasurer, Phoenix Funds (1994-present), Phoenix Duff & Phelps
Institutional Mutual Funds (1995-present), Phoenix-Aberdeen
Series Fund (1996-present) and Phoenix-Seneca Funds (2000-
present). Second Vice President and Treasurer, Fund Accounting,
Phoenix Home Life Mutual Insurance Company (1994-1995). Various
positions with Phoenix Home Life Insurance Company (1987-1994).
--------------------------------- --------------------- -----------------------------------------------------------------
G. Jeffrey Bohne (52) Secretary and Clerk Vice President and General Manager, Phoenix Home Life Mutual
101 Munson Street Insurance Co. (1993-present). Vice President, Transfer Agent
Greenfield, MA 01301 Operations (1993-1996), Senior Vice President, Mutual Fund
Customer Service (1999-present) and Vice President, Mutual Fund
Customer Service (1996-1999), Phoenix Equity Planning
Corporation. Secretary/Clerk, Phoenix Funds (1993-present),
Phoenix Duff & Phelps Institutional Mutual Funds (1996-present),
Phoenix-Aberdeen Series Fund (1996-present) and Phoenix-Seneca
Funds (2000-present).
--------------------------------- --------------------- -----------------------------------------------------------------
</TABLE>
For services rendered to the Fund for the fiscal year ended December 31,
1999, the Directors received aggregate remuneration of $12,195. For services on
the Boards of Directors of the Phoenix Funds, each Director who is not a
full-time employee of Phoenix or any of its affiliates currently receives a
retainer at the annual rate of $40,000 and a fee of $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 a fee of $1,000 per joint Nominating
Committee meeting attended. Each Trustee who serves on the Executive Committee
and who is not an interested person of
17
<PAGE>
the Fund receives a retainer at the annual rate of $2,000 and $2,000 per joint
Executive Committee meeting attended. The function of the Executive Committee is
to serve as a contract review, compliance review and performance review delegate
of the full Board of Directors. Costs are allocated equally to each of the
series and funds within the fund complex. The foregoing fees do not include the
reimbursement of expenses incurred in connection with meeting attendance.
Officers and employees of Phoenix who are interested persons are compensated by
Phoenix and receive no compensation from the Fund.
CURRENT BOARD COMMITTEES AND MEETINGS
The Board of Directors has an Audit Committee and a Nominating Committee.
The Audit Committee of the Fund consists of four of the Directors who are not
interested persons of the Fund (i.e., the "independent Directors"). The Audit
Committee meets with the Fund's auditors to review the scope of the auditing
procedures, the adequacy of internal controls, compliance by the Fund with the
accounting, record keeping and financial reporting requirements of the 1940 Act,
and the possible effect on Fund operations of any new or proposed tax or other
regulations applicable to investment companies. The Audit Committee makes an
annual recommendation concerning the appointment of auditors and reviews and
recommends policies and practices relating to principles to be followed in the
conduct of Fund operations. The Audit Committee reports the results of its
inquiries to the Board of Directors. The Audit Committee currently consists of
E. Virgil Conway, Herbert Roth, Jr., Richard E. Segerson and Lowell P. Weicker,
Jr. The Audit Committee held three meetings during the fiscal year ended
December 31, 1999.
The Nominating Committee consists of four Directors who are not interested
persons of the Fund. It recommends to the Board of Directors persons to be
elected as Directors. During the fiscal year ended December 31, 1999, the
Nominating Committee held brief meetings as needed in conjunction with regular
quarterly executive sessions of the independent Directors. The Nominating
Committee currently consists of Robert Chesek, Harry Dalzell-Payne, Leroy Keith
Jr. and Herbert Roth, Jr. It will consider individuals proposed by a shareholder
for election as a Director. Shareholders who wish to submit the name of any
individual must submit in writing a brief description of the proposed nominee's
business experience and other information relevant to the qualifications of the
individual to serve as a Director of the Fund.
The Delaware Trust has Audit and Nominating Committees, each composed
entirely of the same independent Trustees.
The Board of Directors held five meetings during the fiscal year ended
December 31, 1999. Each Director, except Herbert Roth, Jr., was present for at
least 75% of the total number of meetings of the Board and of those committees
of which the Director was a member which were held during his tenure.
18
<PAGE>
For the Fund's last fiscal year, the Directors received the following
compensation:
<TABLE>
<CAPTION>
TOTAL COMPENSATION FROM
AGGREGATE PENSION OR RETIREMENT ESTIMATED ANNUAL FUND AND FUND COMPLEX
COMPENSATION BENEFITS ACCRUED AS BENEFITS UPON (37 FUNDS) PAID TO
NAME FROM FUND PART OF FUND EXPENSES RETIREMENT DIRECTORS
---- --------- --------------------- ---------- ---------
<S> <C> <C> <C> <C>
Robert Chesek $1,155 $63,750
E. Virgil Conway(1) $1,500 $83,250
Harry Dalzell-Payne(1) $1,355 $95,000
Francis E. Jeffries $1,100* None for any None for any $61,000
Leroy Keith, Jr. $1,155 Director Director $63,750
Philip R. McLoughlin(1) $ 0 $ 0
Everett L. Morris(1) $1,000* $57,750
James M. Oates(1) $1,300 $72,250
Herbert Roth, Jr.(1) $1,080 $59,250
Richard E. Segerson $1,300 $72,000
Lowell Weicker, Jr. $1,250 $68,750
</TABLE>
------------------
*This compensation (and the earnings thereon) will be deferred pursuant to
the Directors' Deferred Compensation Plan. At March 31, 2000, the total amount
of deferred compensation (including interest and other accumulation earned on
the original amounts deferred) accrued for Messrs. Jeffries, Morris, Roth and
Segerson was $507,603, $194,387, $180,843 and $100,929, respectively. At
present, by agreement among the Fund, the Distributor and the electing Trustee,
Trustee fees that are deferred are paid by the Fund to the Distributor. The
liability for the deferred compensation obligation appears only as a liability
of the Distributor.
(1) Messrs. Conway, Dalzell-Payne, McLoughlin, Morris, Oates and Roth are
members of the Executive Committee.
INVESTMENT ADVISER, UNDERWRITER AND FINANCIAL AGENT
Phoenix Investment Counsel, Inc., 56 Prospect Street, Hartford,
Connecticut 06115-0480 is the Fund's investment adviser.
Phoenix Equity Planning Corporation, 100 Bright Meadow Boulevard, P.O. Box
2200, Enfield, Connecticut 06083-2200, serves as the Fund's underwriter and as
the Fund's financial agent.
OTHER BUSINESS
The Board of Directors of the Fund knows of no business to be brought
before the meeting other than the matters set forth in this Proxy Statement.
Should any other matter requiring a vote of the shareholders of the Fund arise,
however, the proxies will vote thereon according to their best judgment in the
interests of the Fund and the shareholders of the Fund.
The Fund does hold annual meetings of shareholders. There will normally be
a meeting of shareholders for the purpose of electing Directors of the Fund.
After the reorganization, the Delaware Trust will not be required to hold an
annual meeting of shareholders. Shareholders wishing to submit proposals for
inclusion in the proxy statement for any subsequent shareholder meeting of the
Fund should send their written submissions to the principal executive offices of
the Fund at 101 Munson Street, Greenfield, Massachusetts 01301.
19
<PAGE>
APPENDIX A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this__ day of _______, 2000, by and between Phoenix-Oakhurst Strategic
Allocation Fund, Inc., a Massachusetts corporation (the "Predecessor
Corporation"), on behalf of the Phoenix-Oakhurst Strategic Allocation Fund, Inc.
series (the "Predecessor Fund"), and Phoenix-Oakhurst Strategic Allocation Fund,
a Delaware business trust (the "Successor Trust"), on behalf of its
Phoenix-Oakhurst Strategic Allocation Fund series (the "Successor Fund").
All references in this Agreement to action taken by the Predecessor Fund
or the Successor Fund shall be deemed to refer to action taken by the
Predecessor Corporation or the Successor Trust, respectively, on behalf of the
respective portfolio series.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization (the "Reorganization") will consist of the transfer by the
Predecessor Fund of all of its assets to the Successor Fund, in exchange solely
for shares of beneficial interest in the Successor Fund ("New Shares") having a
net asset value equal to the net asset value of the Predecessor Fund, the
assumption by the Successor Fund of all the liabilities of the Predecessor Fund,
and the distribution of the New Shares to the shareholders of the Predecessor
Fund in complete liquidation of the Predecessor Fund as provided herein, all
upon the terms and conditions hereinafter set forth in this Agreement.
WHEREAS, the Predecessor Corporation and the Successor Trust are each
open-end, registered investment companies of the management type; and
WHEREAS, the Board of Trustees of the Predecessor Corporation and the
Board of Trustees of the Successor Trust have determined that it is in the best
interest of the Predecessor Corporation and the Successor Trust, respectively,
that the assets of the Predecessor Corporation be acquired by the Successor
Trust pursuant to this Agreement and in accordance with the applicable statutes
of the Commonwealth of Massachusetts and the State of Delaware and that the
interests of existing shareholders will not be diluted as a result of this
transaction;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. PLAN OF REORGANIZATION
1.1 Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Predecessor
Corporation agrees to transfer all of the assets of the Predecessor Fund, as set
forth in paragraph 1.2, to the Successor Fund, and the Successor Trust agrees in
exchange therefor: (i) to deliver to the Predecessor Corporation a number of
full and fractional New Shares of each class of the Successor Fund equal to the
number of shares of the corresponding class of the Predecessor Fund as of the
time and date set forth in Article 2 and (ii) to assume all the liabilities of
the Predecessor Fund, as set forth in paragraph 1.2. Such transactions shall
take place at the closing provided for in paragraph 2.1 (the "Closing").
1.2 The assets of the Predecessor Fund to be acquired by the Successor
Fund shall consist of all property, including, without limitation, all cash,
securities, commodities and futures interests, and dividends or interest
receivable which are owned by the Predecessor Fund and any deferred or prepaid
expenses shown as an asset on the books of the Predecessor Fund on the closing
date provided in paragraph 2.1 (the "Closing Date"). All liabilities, expenses,
costs, charges and reserves of the Predecessor Fund, to the extent that they
exist at or after the Closing, shall after the Closing attach to the Successor
Fund and may be enforced against the Successor Fund to the same extent as if the
same had been incurred by the Successor Fund.
1.3 Immediately upon delivery to the Predecessor Fund of the New Shares,
the Predecessor Fund, as the then sole shareholders of the Successor Fund, shall
(i) with the exception of Calvin J. Pedersen, elect as trustees of the Trust the
persons who currently serve as directors of the Predecessor Corporation; (ii)
approve an Investment Management Agreement between the Successor Trust, on
behalf of the Successor Fund and Phoenix Investment Counsel, Inc. (the
"Investment Manager"), and (iii) ratify the selection of PricewaterhouseCoopers
LLP as the independent accountants of the Successor Fund.
<PAGE>
1.4 Immediately following the action contemplated by paragraph 1.3,
the Predecessor Fund will distribute pro rata to its shareholders
of record, determined as of immediately after the close of business on the
Closing Date (the "Current Shareholders"), the corresponding New Shares received
by the Predecessor Corporation pursuant to paragraph 1.1. Such distribution and
liquidation will be accomplished by the transfer of the New Shares then credited
to the accounts of the Predecessor Fund on the books of the Successor Fund to
open accounts on the share records of the Successor Fund in the names of the
Current Shareholders and representing the respective pro rata number of the New
Shares of the corresponding class due such shareholders. All issued and
outstanding shares of the Predecessor Fund will simultaneously be canceled on
the books of the Predecessor Trust, although share certificates representing
interests in the Predecessor Trust will represent a number of New Shares
after the Closing Date as determined in accordance with paragraph 2.2. The
Successor Fund shall not issue certificates representing the New Shares in
connection with such exchange. Ownership of New Shares will be shown on the
books of the Successor Trust's transfer agent. As soon as practicable after the
Closing, the Predecessor Corporation shall take all steps necessary to effect a
complete liquidation of the Predecessor Fund and shall file such instruments, if
any, as are necessary to effect the dissolution of the Predecessor Corporation
and shall take all other steps necessary to effect such dissolution.
2. CLOSING AND CLOSING DATE
2.1 The Closing Date shall be the next Friday that is a full business
day following satisfaction (or waiver as provided herein) of all of the
conditions set forth in Articles 4 of this Agreement (other than those
conditions which may by their terms be satisfied only at the Closing), or such
later date as the parties may agree to in writing. All acts taking place at the
Closing shall be deemed to take place simultaneously as of immediately after the
close of business on the Closing Date unless otherwise agreed to by the parties.
The close of business on the Closing Date shall be as of 4:00 p.m. New York
Time. The Closing shall be held at the offices of Phoenix Investment Counsel,
Inc. ("PIC"), 56 Prospect Street, Hartford, Connecticut 06115-0480, or at such
other time and/or place as the parties may agree.
2.2 The Predecessor Corporation shall cause Phoenix Equity Planning
Corporation (the "Transfer Agent"), transfer agent of the Predecessor Fund, to
deliver at the Closing a certificate of an authorized officer stating that its
records contain the names and addresses of the Current Shareholders and the
number and percentage ownership of outstanding shares of the Predecessor Fund
and the class of the Predecessor Fund owned by each such shareholder immediately
prior to the Closing. The Successor Fund shall issue and deliver a confirmation
evidencing the New Shares to be credited on the Closing Date to the Secretary of
the Predecessor Corporation or provide evidence satisfactory to the Predecessor
Corporation that such New Shares have been credited to the accounts of the
Predecessor Fund on the books of the Successor Fund. At the Closing, each party
shall deliver to the other such bills of sales, checks, assignments, share
certificates, if any, receipts or other documents as such other party or its
counsel may reasonably request.
3. REPRESENTATIONS AND WARRANTIES
3.1 The Predecessor Corporation, on behalf of the Predecessor Fund,
hereby represents and warrants to the Successor Fund as follows:
(i) the Predecessor Corporation is duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and has full power and authority to conduct its business as
presently conducted;
(ii) the Predecessor Corporation has full power and authority to
execute, deliver and carry out the terms of this Agreement on behalf of the
Predecessor Fund;
(iii) the execution and delivery of this Agreement on behalf of
the Predecessor Fund and the consummation of the transactions contemplated
hereby are duly authorized and no other proceedings on the part of the
Predecessor Trust or the shareholders of the Predecessor Fund (other than as
contemplated in paragraph 4.1(vi) are necessary to authorize this Agreement and
the transactions contemplated hereby;
(iv) this Agreement has been duly executed by the Predecessor
Corporation on behalf of the Predecessor Fund and constitutes its valid and
binding obligation, enforceable in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium and other rights
affecting creditors' rights generally, and general equitable principles;
(v) neither the execution and delivery of this Agreement by the
Predecessor Corporation on behalf of the Predecessor Fund, nor the consummation
by the Predecessor Corporation on behalf of the Predecessor Fund of the
transactions contemplated hereby will conflict with, result in a breach or
violation of or constitute (or with notice, lapse of
A-2
<PAGE>
time or both) a breach of or default under, the Articles of Organization or
By-Laws of the Predecessor Corporation, as each may be amended, or any statute,
regulation, order, judgment or decree, or any instrument, contract or other
agreement to which the Predecessor Corporation is a party or by which the
Predecessor Corporation or any of its assets is subject or bound; and
(vi) no authorization, consent or approval of any governmental
or other public body or authority or any other party is necessary for the
execution and delivery of this Agreement by the Predecessor Corporation on
behalf of the Predecessor Fund or the consummation of any transactions
contemplated hereby by the Predecessor Corporation, other than as shall be
obtained at or prior to the Closing.
3.2 The Successor Trust, on behalf of the Successor Fund, hereby
represents and warrants to the Predecessor Fund as follows:
(i) The Successor Trust is duly organized, validly existing
and in good standing under the laws of the State of Delaware and has full power
and authority to conduct its business as presently conducted;
(ii) the Successor Trust has full power and authority to
execute, deliver and carry out the terms of this Agreement on behalf of the
Successor Fund;
(iii) the execution and delivery of this Agreement on behalf of
the Successor Fund and the consummation of the transactions contemplated hereby
are duly authorized and no other proceedings on the part of the Successor Trust
or the shareholders of the Successor Fund are necessary to authorize this
Agreement and the transactions contemplated hereby;
(iv) this Agreement has been duly executed by the Successor
Trust on behalf of the Successor Fund and constitutes its valid and binding
obligation, enforceable in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium and other rights affecting
creditors' rights generally, and general equitable principles;
(v) neither the execution and delivery of this Agreement by the
Successor Trust on behalf of the Successor Fund, nor the consummation by the
Successor Trust on behalf of the Successor Fund of the transactions contemplated
hereby will conflict with, result in a breach or violation of or constitute (or
with notice, lapse of time or both constitute) a breach of or default under, the
Master Trust Agreement (the "Master Trust Agreement") or By-Laws of the
Successor Trust, as each may be amended, or any statute, regulation, order,
judgment or decree, or any instrument, contract or other agreement to which the
Successor Trust is a party or by which the Successor Trust or any of its assets
is subject or bound; and
(vi) no authorization, consent or approval of any governmental
or other public body or authority or any other party is necessary for the
execution and delivery of this Agreement by the Successor Trust on behalf of the
Successor Fund or the consummation of any transactions contemplated hereby by
the Successor Trust, other than as shall be obtained at or prior to the Closing.
4. CONDITIONS PRECEDENT
4.1 The obligations of the Predecessor Corporation on behalf of the
Predecessor Fund and the Successor Trust on behalf of the Successor Fund to
effectuate the Reorganization shall be subject to the satisfaction of the
following conditions:
(i) The Successor Trust shall have succeeded to the
registration statement of the Predecessor Corporation on Form N-1A under the
Securities Act of 1933, as amended (the "Securities Act") and such amendment or
amendments thereto as are determined by the Board of Trustees of the Successor
Trust to be necessary and appropriate to effect the registration of the New
Shares (the "Post-Effective Amendment"), shall have been filed with the
Securities and Exchange Commission (the "Commission") and the Post-Effective
Amendment shall have become effective, and no stop-order suspending the
effectiveness of the Post-Effective Amendment shall have been issued, and no
proceeding for that purpose shall have been initiated or threatened by the
Commission (and not withdrawn or terminated);
(ii) The applicable New Shares shall have been duly qualified
for offering to the public in all states in which such qualification is required
for consummation of the transactions contemplated hereunder;
(iii) All representations and warranties of the Predecessor
Corporation on behalf of the Predecessor Fund contained in this Agreement shall
be true and correct in all material respects as of the date hereof and as of the
Closing, with the same force and effect as if then made, and the Successor Trust
on behalf of the Successor Fund shall have
A-3
<PAGE>
received a certificate of an officer of the Predecessor Corporation acting on
behalf of the Predecessor Fund to that effect in form and substance reasonably
satisfactory to the Successor Trust on behalf of the Successor Fund;
(iv) All representations and warranties of the Successor Trust
on behalf of the Successor Fund contained in this Agreement shall be true and
correct in all material respects as of the date hereof and as of the Closing,
with the same force and effect as if then made, and the Predecessor Corporation
on behalf of the Predecessor Fund shall have received a certificate of an
officer of the Successor Trust acting on behalf of the Successor Fund to that
effect in form and substance reasonably satisfactory to the Predecessor
Corporation on behalf of the Predecessor Fund;
(v) The Predecessor Corporation on behalf of the Predecessor
Fund and the Successor Trust on behalf of the Successor Fund shall have received
an opinion from Goodwin, Procter & Hoar LLP regarding certain tax matters in
connection with the Reorganization; and
(vi) A vote approving this Agreement shall have been adopted by
at least a majority of the outstanding Class A and Class B shares of the
Predecessor Fund, all classes voting together, entitled to vote at a special
meeting of shareholders of the Predecessor Fund duly called for such purpose
(the "Special Meeting").
5. EXPENSES
5.1 The Successor Trust and the Predecessor Trust each represents and
warrants to the other that there are no brokers or finders entitled to receive
any payments in connection with the transactions provided for herein.
5.2 All of the costs of solicitation of proxies, including the cost of
the proxy solicitation firm, printing and mailing costs, shall be borne by the
Successor Fund. All of the remaining expenses and costs of the Reorganization
and the transactions contemplated thereby shall be borne by Phoenix Investment
Partners, Ltd.
6. ENTIRE AGREEMENT
The Successor Trust and the Predecessor Corporation agree that neither
party has made any representation, warranty or covenant not set forth herein and
that this Agreement constitutes the entire agreement between the parties.
7. TERMINATION
This Agreement and the transactions contemplated hereby may be terminated
and abandoned by either party by resolution of the party's Board of Directors or
Trustees, at any time prior to the Closing Date, if circumstances should develop
that, in the opinion of such Board, make proceeding with the Agreement
inadvisable. In the event of any such termination, there shall be no liability
for damages on the part of either the Successor Trust or the Predecessor
Corporation, or their respective Directors, Trustees or officers, to the other
party.
8. AMENDMENTS
This agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the
Predecessor Corporation and the Successor Trust; provided, however, that
following the meeting of the Current Shareholders called by the Predecessor
Corporation pursuant to paragraph 4.1(vi) of this Agreement, no such amendment
may have the effect of changing the provisions for determining the number of New
Shares to be issued to the Current Shareholders under this Agreement to the
detriment of such shareholders without their further approval.
9. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the parties hereto at their
principal place of business.
10. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
10.1 The Article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.2 This Agreement may be executed in any number of counterparts each
of which shall be deemed an original.
10.3 This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.
10.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon
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<PAGE>
or give any person, firm or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
10.5 It is expressly agreed that the obligations of the Predecessor
Corporation hereunder shall not be binding upon any of the directors,
shareholders, nominees, officers, agents, or employees of the Predecessor
Corporation personally, but shall bind only the trust property of the
Predecessor Corporation, as provided in the charter of the Predecessor
Corporation. The execution and delivery by such officers of the Predecessor
Corporation shall not be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only the trust
property of the Predecessor Corporation as provided in the charter of the
Predecessor Corporation. The Predecessor Corporation is a series company with a
single series and has entered into this Agreement on behalf of the Predecessor
Fund. With respect to any obligation of the Predecessor Corporation arising
hereunder, the Successor Trust and the Successor Fund shall look for payment or
satisfaction of such obligations solely to the assets and property of the
Predecessor Fund.
10.6 It is expressly agreed that the obligations of the Successor Trust
hereunder shall not be binding upon any of the trustees, shareholders, nominees,
officers, agents or employees of the Successor Trust personally, but shall bind
only the trust property of the Successor Trust, as provided in the Declaration
of Trust of the Successor Trust. The execution and delivery by such officers of
the Successor Trust shall not be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Successor Trust as provided in the
Declaration of Trust of the Successor Trust. The Successor Trust is a series
company with a single series and has entered into this Agreement on behalf of
the Successor Fund. With respect to any obligation of the Successor Trust
arising hereunder, the Predecessor Fund and the Predecessor Corporation shall
look for payment or satisfaction of such obligations solely to the assets and
property of the corresponding Successor Fund.
10.7 The sole remedy of a party hereto for a breach of any
representation or warranty made in this Agreement by the other party shall be an
election by the non-breaching party not to complete the transactions
contemplated herein.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President or Vice President.
<TABLE>
<S> <C>
ATTEST PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.,
a Massachusetts corporation
Name: _____________________________ By: ________________________________________________
Title: Name:
Title:
ATTEST PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND,
a Delaware business trust
Name: ____________________________ By: ________________________________________________
Title: Name:
Title:
</TABLE>
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<PAGE>
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
101 Munson Street
Greenfield, Massachusetts 01301
1 (800) 243-1574
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
September 14, 2000
PROXY
The undersigned shareholder of Phoenix-Oakhurst Strategic Allocation
Fund, Inc. (the "Fund"), revoking any and all previous proxies heretofore given
for shares of the Fund held by the undersigned, hereby constitutes Philip R.
McLoughlin and Pamela S. Sinofsky, and each of them, proxies and attorneys of
the undersigned, with power of substitution to each, for and in the name of the
undersigned to vote and act upon all matters (unless and except as expressly
limited below) at the Special Meeting of Shareholders of the Fund to be held on
September 14, 2000 at the offices of the Fund, 101 Munson Street, Greenfield,
Massachusetts, and at any and all adjournments thereof, with respect to all
shares of the Fund for which the undersigned is entitled to provide instructions
or with respect to which the undersigned would be entitled to provide
instructions or act with all the powers the undersigned would possess if
personally present and to vote with respect to specific matters as set forth
below. Any proxies heretofore given by the undersigned with respect to said
meeting are hereby revised.
To avoid the expense of adjourning the Meeting to a subsequent date,
please return this proxy in the enclosed self-addressed, postage-paid envelope.
In the alternative, you may vote by telephone by calling toll-free
1-877-779-8683 and following the recorded instructions. Prompt voting by
shareholders will avoid the costs associated with further solicitation.
This proxy, if properly executed, will be voted in the manner as
directed herein by the undersigned shareholder. Unless otherwise specified in
the squares provided, the undersigned's vote will be cast "FOR" each Proposal.
If no direction is made for any Proposals, this proxy will be voted "FOR" any
and all such Proposals.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF THE FUND WHICH RECOMMENDS A VOTE
"FOR" EACH OF THE PROPOSALS
<PAGE>
ACCOUNT NUMBER:
SHARES:
CONTROL NO.:
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [X]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
VOTE ON PROPOSALS FOR PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
1. To approve an Agreement and Plan of For Against Abstain
Reorganization which provides for the [ ] [ ] [ ]
reorganization of Phoenix-Oakhurst Strategic
Allocation Fund, Inc. as a Delaware business
trust.
TO TRANSACT SUCH OTHER BUSINESS AS PROPERLY MAY COME BEFORE THE MEETING
OR ANY ADJOURNMENT THEREOF.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. IF SHARES ARE REGISTERED
IN MORE THAN ONE NAME, ALL REGISTERED SHAREHOLDERS SHOULD SIGN THIS PROXY; BUT
IF ONE SHAREHOLDER SIGNS, THIS SIGNATURE BINDS THE OTHER SHAREHOLDER(S). WHEN
SIGNING AS AN ATTORNEY, EXECUTOR, ADMINISTRATOR, AGENT, TRUSTEE, GUARDIAN, OR
CUSTODIAN FOR A MINOR, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE
SIGN IN FULL CORPORATE NAME BY AN AUTHORIZED PERSON. IF A PARTNERSHIP, PLEASE
SIGN IN PARTNERSHIP NAME BY AN AUTHORIZED PERSON.
THIS PROXY MAY BE REVOKED BY THE SHAREHOLDER(S) AT ANY TIME PRIOR TO THE SPECIAL
MEETING OF THE SHAREHOLDERS.
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Signature (PLEASE SIGN WITHIN BOX) Date
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Signature (Joint Owners) Date
