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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e) (2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
PHOENIX-GOODWIN CALIFORNIA TAX EXEMPT BONDS, 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-GOODWIN CALIFORNIA TAX EXEMPT BONDS, INC.
101 MUNSON STREET
GREENFIELD, MASSACHUSETTS 01301
1 (800) 243-1574
--------------------
Dear Shareholder:
We are pleased to enclose the proxy statement for the August 17, 2000 special
shareholders meeting of your Fund. Please take the time to read the proxy
statement and cast your vote, because the changes we are requesting are
important to the Fund and 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 the entire
Phoenix family of 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 the Fund's investment adviser
or 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,
Philip R. McLoughlin
President
<PAGE>
PHOENIX-GOODWIN CALIFORNIA TAX EXEMPT BONDS, INC.
101 MUNSON STREET
GREENFIELD, MASSACHUSETTS 01301
1 (800) 243-1574
--------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 17, 2000
TO THE SHAREHOLDERS:
A special meeting of shareholders of Phoenix-Goodwin California Tax Exempt
Bonds, Inc. (the "Fund") will be held at the offices of the Fund, 101 Munson
Street, Greenfield, Massachusetts 01301 on August 17, 2000 at 2:00 p.m., local
time, for the following purposes:
1. To consider and act upon a proposal to approve the Agreement and Plan
of Reorganization, dated June __, 2000, 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 June 19, 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 BostonEquiserve, the Fund's
proxy tabulator, at 1-877-779-8683 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-Goodwin
California Tax Exempt Bonds, Inc.,
G. Jeffrey Bohne
Secretary
<PAGE>
PHOENIX-GOODWIN CALIFORNIA TAX EXEMPT BONDS, INC.
PROXY STATEMENT
MEETING OF SHAREHOLDERS
This proxy statement is being furnished in connection with the solicitation
by the Board of Directors of Phoenix-Goodwin California Tax Exempt Bonds, 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 Maryland 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. For example, the principal investment strategy that the Fund will
invest at least 80% of its net assets in municipal securities that are tax
exempt in California and may invest 100% of its assets in such securities will
not change. 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-Goodwin California Tax Exempt Bond Fund."
This Proxy Statement and the enclosed form of proxy are first being mailed,
or otherwise being made available, to shareholders on or about June 29, 2000.
VOTING INFORMATION
Shareholders of record of the Fund at the close of business on June 19, 2000
will be entitled to vote at the meeting or at any adjournments thereof.
On that date, there were issued and outstanding _____ 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 one-half 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 a majority 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 Maryland 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
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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.
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 and place, unless after the adjournment
the Board of Directors shall fix a new record date for the adjourned meeting or
the adjournment is for more than thirty days, notice of such adjourned meeting
need not be given if the time and place to which the meeting shall be adjourned
is announced at the meeting. 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 (the "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.
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 $______, 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.
2
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SHARES OWNED BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of ______, 2000 with respect
to each person who owns of record or is known by the Fund to own of record or
beneficially own 5% or more of any class of shares of the Fund:
<TABLE>
<CAPTION>
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C>
NAME OF SHAREHOLDER FUND AND CLASS PERCENTAGE OF CLASS NUMBER OF SHARES
------------------- -------------- ------------------- ----------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>
On ________, 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 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 charter and fundamental investment restriction 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. Delaware law offers a mutual fund certain advantages compared with
Maryland law. A Maryland corporation is subject to the legal requirements
imposed by Maryland 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. 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. This flexibility 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 Maryland articles of incorporation and
the proposed Delaware trust instrument, see "Comparative Information about the
Fund and the Delaware Trust" on page __.
The New Fund has fundamental investment restrictions which are expected to
become standard for all 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
3
<PAGE>
Fund. For a more detailed comparison of the current and proposed fundamental
investment restrictions, see "Comparative Investment Restrictions" on page __.
THE AGREEMENT AND PLAN OF REORGANIZATION
The reorganization consists 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 corresponding
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 August __, 2000.
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; and
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 Directors intend to take
all appropriate and necessary action to liquidate and dissolve the Fund under
the laws of the State of Maryland.
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 also acts as the investment adviser for 14 fund companies totaling
38 mutual funds, as sub-adviser 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.
4
<PAGE>
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 0.45%
of the Fund's average daily net assets up to $1 billion, 0.40% of the Fund's
average daily net assets from $1 billion to $2 billion and 0.35% 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 by a similar vote upon 60 days' notice or by the
adviser upon 60 days' written notice and will automatically terminate in the
event of its assignment as defined in Section 2(a)(4) of the 1940 Act.
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 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 April 30. Following the
reorganization, the New Fund will also operate on a fiscal year ending April 30.
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:
Diversification. Although the Fund does not have a fundamental investment
restriction regarding diversification, the Fund is a "diversified company" under
the 1940 Act. The percentage limitations on investments in a single issuer in
the proposed restrictions are consistent with the definition of a "diversified
company" in the 1940 Act.
Concentration. The Fund has an investment restriction which prohibits the
Fund from concentrating its investments in the securities of 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 or its
agencies or instruments). 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 in excess of 5% of the value of its
total assets. The New Fund has greater flexibility to borrow money in that the
New Fund 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. The proposed restriction is consistent
with the limitations currently imposed on borrowing by mutual funds under the
1940 Act. The New Fund's borrowing restriction does not
5
<PAGE>
contain a limitation on the pledging of assets. The 1940 Act does not require a
mutual fund to adopt a fundamental investment restriction regarding the pledge
of assets.
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.
Underwriting. The investment restriction on underwriting clarifies that the
New Fund would not violate the restriction if it was deemed an underwriter
simply as a result of the sale of its portfolio securities.
Real Estate. Under the Fund's current restriction, the Fund may not make any
investment in real estate, except for the purchase of marketable securities of
companies that are secured by interests in real estate. The restriction
applicable to the New Fund clarifies that the New Fund is permitted to acquire
or lease office space, invest in certain real estate securities and hold real
estate that was acquired as a result of owning securities.
Commodities. The current restriction limits initial margin deposits on
futures contracts and option premiums to 5% of total assets. 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 options, futures contracts and options on
futures contracts. The New Fund's ability to engage in futures transactions
remains subject to applicable rules of the Commodity Futures Trading Commission
("CFTC"). Under current 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 deposit and related options for non-hedging purposes to exceed 5% of the
value of its assets.
Lending. Under the Fund's restriction on lending, the Fund is only permitted
to (a) invest up to 15% of its total assets in repurchase agreements of a type
regarded as "liquid" which is fully collateralized as to principal and interest
and which are entered into only with commercial banks, brokers and dealers
considered by the Fund to be creditworthy and (b) lend its portfolio securities
in amounts up to one-third of the value of its total assets at the time the loan
is made. The lending restrictions applicable to the New Fund do 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 lending restriction
applicable to the New Fund 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 short sales. This restriction was based on
the requirements of state "blue sky" laws that required the adoption of formal
investment restrictions regarding certain investments. These state law
requirement are no longer applicable to mutual funds.
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.
<TABLE>
<CAPTION>
---------------------------------------- -------------------------------------- --------------------------------------
SUBJECT MATTER OF RESTRICTION PROPOSED RESTRICTION CURRENT RESTRICTION
---------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Diversification The Fund may not, with respect to None.
75% of its total assets, purchase
securities of an issuer (other than
the U.S. Government, its agencies,
instrumentalities or authorities or
repurchase agreements collateralized
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.
---------------------------------------- -------------------------------------- --------------------------------------
Industry Concentration The Fund may not purchase securities The Fund may not concentrate its
if, after giving effect to the investments in the securities of
purchase, more than 25% of its total issuers all of which conduct their
assets would be invested in the principal business activities in the
securities of one or more issuers same industry provided that this
conducting their principal business restriction shall not apply to
activities in the same industry obligations issued or guaranteed by
(excluding the U.S. Government or the U.S. Government, its agencies or
its agencies or instrumentalities). instrumentalities.
---------------------------------------- -------------------------------------- --------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------- -------------------------------------- --------------------------------------
SUBJECT MATTER OF RESTRICTION PROPOSED RESTRICTION CURRENT RESTRICTION
---------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Borrowing The Fund may not borrow money, The Fund may not borrow money in
except (i) in amounts not to exceed excess of 5% of the value of its
one third of the value of the Fund's total assets, or pledge its assets
total assets (including the amount to an extent greater than 5% of the
borrowed) from banks, and (ii) up to value of its total assets. Any such
an additional 5% of its total assets borrowings shall be from banks and
from banks or other lenders for shall be undertaken only as a
temporary purposes. For purposes of temporary measure or for
this restriction, (a) investment extraordinary or emergency purposes.
techniques such as margin purchases, Deposits in escrow in connection
short sales, forward commitments, with the writing of covered call
and roll transactions, (b) options or in connection with the
investments in instruments such as purchase or sale of financial
futures contracts, swaps, and futures contracts and related
options and (c) short-term credits options shall not be deemed to be a
extended in connection with trade pledge or other encumbrance.
clearance and settlement, shall not
constitute borrowing.
---------------------------------------- -------------------------------------- --------------------------------------
Senior Securities The Fund may not issue "senior The Fund may not issue senior
securities" in contravention of the securities, as such term is defined
1940 Act. Activities permitted by in the Investment Company Act of
SEC exemptive orders or staff 1940, as amended, except as
interpretations shall not be deemed otherwise permitted under these
to be prohibited by this restriction. fundamental investment restrictions.
---------------------------------------- -------------------------------------- --------------------------------------
Underwriting The Fund may not underwrite the The Fund may not engage in the
securities issued by other persons, business of underwriting the
except to the extent that, in securities of others except in
connection with the disposition of connection with the purchase of
portfolio securities, the Fund may securities for its portfolio of
be deemed to be an underwriter under municipal bonds.
applicable law.
---------------------------------------- -------------------------------------- --------------------------------------
Real Estate The Fund may not purchase or sell The Fund may not make any investment
real estate, except that the Fund in real estate, or real estate mortgage
may (i) acquire or lease office loans, except that the Fund may
space for its own use, (ii) invest purchase or sell readily marketable
in securities of issuers that invest securities which are secured by
in real estate or interests therein, interests in real estate or issued
(iii) invest in mortgage-related by companies which deal in real
securities and other securities that estate including real estate
are secured by real estate or investment and mortgage investment
interests therein, (iv) hold and trusts.
sell real estate acquired by the
Fund as a result of the ownership of
securities.
---------------------------------------- -------------------------------------- --------------------------------------
Commodities The Fund may not purchase or sell The Fund may not make any investment
commodities or commodity contracts, in commodities, except that the Fund
except the Fund may purchase and may engage in financial futures
sell derivatives (including, but not contracts and related options
limited to, options, futures transactions, provided that the sum
contracts and options on futures of the initial margin deposits on
contracts) whose the Fund's
---------------------------------------- -------------------------------------- --------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------- -------------------------------------- --------------------------------------
SUBJECT MATTER OF RESTRICTION PROPOSED RESTRICTION CURRENT RESTRICTION
---------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
value is tied to the value of a futures and related options positions
financial index or a financial and the premiums paid for related
instrument or other asset (including, options do not exceed 5% of the
but not limited to, securities value of the Fund's total assets.
indexes, interest rates, securities,
currencies and physical commodities).
---------------------------------------- -------------------------------------- --------------------------------------
Lending The Fund may not make loans, except The Fund may not make loans, except
that the Fund may (i) lend portfolio that the Fund may (a) invest up to
securities, (ii) enter into 15% of its total assets in
repurchase agreements, (iii) repurchase agreements of a type
purchase all or a portion of an regarded as "liquid" which are fully
issue of debt securities, bank loan collateralized as to principal and
participation interests, bank interest and which are entered into
certificates of deposit, bankers' only with commercial banks, brokers
acceptances, debentures or other and dealers considered by the Fund
securities, whether or not the to be creditworthy and (b) loan its
purchase is made upon the original portfolio securities in amounts up
issuance of the securities and (iv) to one-third of the value of its
participate in an interfund lending total assets.
program with other registered
investment companies.
---------------------------------------- -------------------------------------- --------------------------------------
Short Sales None. The Fund may not make short sales of
securities or purchase any
securities on margin, except for
such short-term credits as are
necessary for the clearance of
transactions; provided, however, the
deposit or payment of an 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>
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;
8
<PAGE>
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 the
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.
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.
9
<PAGE>
You may exchange shares for another Phoenix fund in the same class of
shares; e.g., Class A for Class A. Exchange privileges are limited and may not
be available for all Phoenix funds, and the funds' distributor has the right to
reject or suspend them.
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 incorporation 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 incorporation
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 Maryland corporation in April 1983. The
Fund is currently governed by its Articles of Incorporation dated April 7, 1983,
as amended (the "Maryland Charter"). As a Maryland corporation, the Fund's
operations are currently governed by the Maryland Charter and applicable Federal
and Maryland law. The Delaware Trust was organized as a Delaware business trust
in June 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 Maryland law,
Directors remain in office until they either resign or are removed. Directors
may be removed with or without cause, by a vote of a majority of all the votes
entitled to be cast. Maryland law does not permit Directors to remove other
Directors.
Liability of Trustees and Officers. Under Maryland 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 Maryland 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 Maryland 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. Maryland law
also provides that a Director will not entitled to indemnification if his or her
act
10
<PAGE>
or omission was material to the matter giving rise to the proceeding and the
Director actually received an improper personal benefit, or, in the case of any
criminal proceeding, the Director had reasonable cause to believe that the act
or omission was unlawful.
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 Maryland Charter. In order to increase the number of authorized shares,
the Board of Directors must approve the increase and the Fund must make a filing
with the State of Maryland.
Shareholder Liability. Under Maryland law, shareholders of a fund organized
as a Maryland 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
Maryland 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.
Shareholder Meetings. Under Maryland law, a corporation registered under the
1940 Act is not required to hold an annual meeting in any year in which the
election of Directors is not required to be acted upon under the 1940 Act.
Maryland law does, however, provide that special meetings of a Maryland
corporation may be called upon the written request of shareholders owning at
least 25% of the outstanding shares. The Delaware 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 the New Fund or the Delaware Trust with another
trust, series or other business organization without shareholder approval.
Maryland 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 Maryland 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 Maryland
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 Delaware Trust
Instrument without the approval of shareholders, subject to limited exceptions
(such as amendments affecting shareholders' liability or indemnity rights).
Under Maryland law, a shareholder vote is required to amend the Maryland
Charter, except for certain minor changes in the name of the Fund.
CERTAIN INFORMATION REGARDING THE DIRECTORS
Federal securities laws require 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
11
<PAGE>
agreement authorizes the Fund, while it is the sole shareholder of the New Fund,
to elect the then current Directors 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 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>
--------------------------------- ---------------------- -----------------------------------------------------------
NAME, ADDRESS POSITIONS HELD PRINCIPAL OCCUPATIONS
AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
-------------------------------------------------------- ------------------------------------------------------------
<S> <C> <C>
Robert Chesek (66) Trustee Trustee/Director (1981-present) and Chairman (1989-1994),
49 Old Post Road Phoenix Funds. Trustee, Phoenix-Aberdeen Series Fund,
Wethersfield, CT 06109 Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present) and Phoenix-Seneca Funds (2000-present).
-------------------------------- ---------------------- -------------------------------------------------------------
E. Virgil Conway (71) Trustee Chairman, Metropolitan Transportation Authority
9 Rittenhouse Road (1992-present). Trustee/Director, Consolidated Edison
Bronxville, NY 10708 Company 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). Chairman, (1998-present), Accuhealth Trism,
Inc. (1994-present), Realty Foundation of New York
(1972-present), and New York Housing Partnership
Development Corp. (1985-present). Vice Chairman Academy of
Political Science (1985-present) and 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) Trustee Director/Trustee, Phoenix Funds (1993-present). Trustee,
The Flat Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Elmore Court Institutional Mutual Funds (1996-present) and
Elmore, GLOS GL2 6NT, UK Phoenix-Seneca 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.
-------------------------------- ---------------------- -------------------------------------------------------------
</TABLE>
12
<PAGE>
<TABLE>
<S> <C> <C>
-------------------------------- ---------------------- -------------------------------------------------------------
*Francis E. Jeffries (69) Trustee Director/Trustee, Phoenix Funds (1995-present). Trustee,
8477 Bay Colony Dr. Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Apt. #902 Institutional Mutual Funds (1996-present) and
Naples, FL 34108 Phoenix-Seneca 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.
-------------------------------- ---------------------- -------------------------------------------------------------
Leroy Keith, Jr. (61) Trustee 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
64 Ross Road Series Fund, Phoenix Duff & Phelps Institutional Mutual
Savannah, GA 30750 Funds (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) Trustee and Chairman (1997-present), Director (1995-present), Vice
President Chairman (1995-1997) and Chief Executive Officer
(1995-present), Phoenix Investment Partners, Ltd. Director
(1994-present) and Executive Vice President, Investments
(1988-present), Phoenix Home Life Mutual Insurance Company.
Director/Trustee and President, Phoenix Funds
(1989-present). Trustee and President, Phoenix-Aberdeen
Series Fund and Phoenix Duff & Phelps Institutional Mutual
Funds (1996-present). Director, Duff & Phelps Utilities
Tax-Free Income Inc. (1995-present) and Duff & Phelps
Utility and Corporate Bond Trust Inc. (1995-present).
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 Advisors
LLC (1999-present). PXRE Corporation (Delaware)
(1985-present) and World Trust Fund (1991-present). Director
and Executive Vice President, Phoenix Life and Annuity
Company (1996-present). Director and Executive Vice
President, PHL Variable Insurance Company (1995-present).
Director, Phoenix Charter Oak Trust Company (1996-present).
Director and Vice President, PM Holdings, Inc.
(1985-present). Director (1992-present) and President
(1992-1994), W.S. Griffith & Co., Inc. Director, PHL
Associates, Inc. (1995-present).
-------------------------------- ---------------------- -------------------------------------------------------------
Everett L. Morris (72) Trustee Vice President, W.H. Reaves and Company (1993-present).
164 Laird Road Director/Trustee, Phoenix Funds (1995-present),
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>
13
<PAGE>
<TABLE>
<S> <C> <C>
-------------------------------- ---------------------- -------------------------------------------------------------
*James M. Oates (54) Trustee Chairman, IBEX Capital Markets, Inc. (formerly, IBEX
Managing Director Capital Markets LLC) (1997-present). Managing Director,
The Wydown Group Wydown Group (1994-present). Director, Phoenix Investment
IBEX Capital Markets, Inc. Partners, Ltd. (1995-present). Director/Trustee, Phoenix
60 State Street Funds (1987-present). Trustee, Phoenix-Aberdeen Series
Suite 950 Fund, Phoenix Duff & Phelps Institutional Mutual Funds
Boston, MA 02109 (1996-present) and 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) Trustee Director/Trustee, Phoenix Funds (1980-present),
134 Lake Street Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
P.O. Box 909 Institutional Mutual Funds (1996-present) and
Sherborn, MA 01770 Phoenix-Seneca 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) Trustee Managing Director, Northway Management Company
102 Valley Road (1998-present). Director/Trustee, Phoenix Funds
New Canaan, CT 07840 (1993-present). Trustee, 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) Trustee 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), Burroughs
Wellcome Fund (1996-present) and Compuware (1996-present).
Visiting Professor, University of Virginia (1997-present).
Director, Duty Free International, Inc. (1997). Chairman,
Dresing, Lierman, Weicker (1995-1996). Governor of the
State of Connecticut (1991-1995).
-------------------------------- ---------------------- -------------------------------------------------------------
</TABLE>
14
<PAGE>
<TABLE>
<S> <C> <C>
-------------------------------- ---------------------- -------------------------------------------------------------
Michael E. Haylon (42) Executive Director and Executive Vice President, Investments, Phoenix
Vice Investment Partners, Ltd. (1995-present). Director
President (1994-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).
-------------------------------- ---------------------- -------------------------------------------------------------
John F. Sharry (48) Executive President, Retail Division (1999-present), Executive Vice
Vice President, Retail Division (1997-1999), Phoenix Investment
President Partners, Ltd. Managing Director, Retail Distribution,
Phoenix Equity Planning Corporation (1995-present).
Executive Vice President, Phoenix Funds (1998-present) and
Phoenix-Aberdeen Series Funds (1998-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,
President Fixed 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 (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).
-------------------------------- ---------------------- -------------------------------------------------------------
Robert Driessen (52) Vice President and Vice President and Compliance Officer, Phoenix Investment
Assistant Secretary Partners, Ltd. (1999-present) and Phoenix Investment
Counsel, Inc. (1999-present). Vice President, Phoenix
Funds, Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Institutional Mutual Funds (1999-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).
-------------------------------- ---------------------- -------------------------------------------------------------
Timothy M. Heaney (35) Vice Managing Director, Fixed Income (1997-present), Director,
President Fixed Income Research (1996-1997), Investment Analyst
(1995-1996), Phoenix Investment Counsel, Inc. Vice
President, Phoenix-Goodwin California Tax Exempt Bonds,
Inc. and Phoenix Multi-Portfolio Fund (1996-present).
Investment Analyst, Phoenix Home Life Mutual Insurance
Company (1992-1994).
-------------------------------- ---------------------- -------------------------------------------------------------
</TABLE>
15
<PAGE>
<TABLE>
<S> <C> <C>
-------------------------------- ---------------------- -------------------------------------------------------------
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
P.O. Box 2200 Officer (1995-1999), Phoenix Investment Partners, Ltd.
Enfield, CT 06083-2200 (1995-present). Senior Vice President (1990-present), Chief
Financial Officer (1996-present), Finance (until 1996), and
Treasurer (1998-present and 1994-1996), 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), Vice
President and Chief Financial Officer, Duff & Phelps
Investment Management Co. (1996-1999). Vice President,
Phoenix Funds (1990-present), Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present) and Phoenix
Aberdeen Series Fund (1996-present). Vice President,
Investment Products Finance, Phoenix Home Life Mutual
Insurance Company (1990-1995). Senior Vice President, Chief
Financial Officer, W.S. Griffith & Co., Inc. (1992-1995)
and Townsend Financial Advisers, Inc. (1993-1995).
-------------------------------- ---------------------- -------------------------------------------------------------
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
(1996-present) and Phoenix-Aberdeen Series Fund
(1996-present). Second Vice President and Treasurer, Fund
Accounting, Phoenix Home Life Mutual Insurance Company
(1994-1995). Various positions with Phoenix Home Life
Insurance Company (1987-1994).
-------------------------------- ---------------------- -------------------------------------------------------------
G. Jeffrey Bohne (52) Secretary Vice President and General Manager, Phoenix Home Life
101 Munson Street and Clerk Mutual Insurance Co. (1993-present). Vice President,
Greenfield, MA 01301 Transfer Agent Operations (1993-1996), Senior Vice
President (1999-present), Vice President (1996-1999),
Mutual Fund Customer Service, Phoenix Equity Planning
Corporation. Secretary/Clerk, Phoenix Funds (1993-present),
Phoenix Duff & Phelps Institutional Mutual Funds (1996-
present) and Phoenix-Aberdeen Series Fund (1996-present).
Vice President, Home Life of New York Insurance Company
(1984-1992).
-------------------------------------- ------------------------ ------------------------------------------------------
</TABLE>
-------------------------------
*Indicates that the Trustee is an "interested person" of the Delaware Trust
within the meaning of the definition set forth in Section 2(a)(19) of the
Investment Company Act of 1940.
For services rendered to the Fund for the fiscal year ended April 30, 2000,
the Directors received aggregate remuneration of $______. For services on the
Boards of Directors/Trustees 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 Director who serves on the Executive Committee
and who is not an interested person of the Fund receives a retainer at the
annual rate of $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 the Phoenix and receive
no compensation from the Fund.
16
<PAGE>
CURRENT BOARD COMMITTEES AND MEETINGS
The Board of Directors has an Audit Committee and a Nominating Committee.
The members of the Audit Committee of the Fund include 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 April 30, 2000.
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 April 30, 2000, 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 Directors.
The Board of Directors held five meetings during the fiscal year ended April
30, 2000. 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 or her tenure.
For the Fund's last fiscal year, the Directors received the following
compensation:
<TABLE>
<CAPTION>
TOTAL
PENSION OR COMPENSATION
RETIREMENT ESTIMATED FROM FUND AND
AGGREGATE BENEFITS ACCRUED ANNUAL BENEFITS FUND COMPLEX (14
COMPENSATION AS PART OF FUND UPON FUNDS) PAID TO
NAME FROM FUND EXPENSES RETIREMENT DIRECTORS
---- --------- -------- ---------- ---------
<S> <C> <C> <C> <C>
Robert Chesek $ $
E. Virgil Conway(1) $ $
Harry Dalzell-Payne(1) $ None for any None for any $
Francis E. Jeffries $ * Director Director $
Leroy Keith, Jr. $ $
Philip R. McLoughlin(1) $ $
Everett L. Morris(1) $ * $
James M. Oates(1) $ $
Herbert Roth, Jr. $ * $
Richard E. Segerson $ * $
Lowell Weicker, Jr. $ $
</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
17
<PAGE>
the Fund, the Distributor and the electing director, director fees that are
deferred are paid by the Fund to the Distributor. The liability for the deferred
compensation obligation appears only as a liability of the Distributor.
(1)Messrs. Conway, Dalzell-Payne, McLoughlin, Morris, Oates and Roth are
members of the Executive Committee.
INVESTMENT ADVISER, UNDERWRITER AND FINANCIAL AGENT
The address for Phoenix Investment Counsel, Inc., the Fund's investment
adviser, is 66 Prospect Street, Hartford, Connecticut 06115-0480.
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 not hold annual meetings of shareholders. There will normally
be no meeting of shareholders for the purpose of electing Directors of the Fund
unless and until such time as less than a majority of the Directors holding
office have been elected by the shareholders, at which time the Directors then
in office will call a shareholders' meeting for the election of Directors.
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.
18
<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-Goodwin California Tax
Exempt Bonds, Inc., a Maryland corporation (the "Predecessor Corporation"), on
behalf of its Phoenix-Goodwin California Tax Exempt Bonds, Inc. series (the
"Predecessor Fund"), and Phoenix-Goodwin California Tax Exempt Bond Fund, a
Delaware business trust (the "Successor Trust"), on behalf of its
Phoenix-Goodwin California Tax Exempt Bond 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
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 or substantially 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 Directors 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 State of Maryland 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 or substantially 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.
A-1
<PAGE>
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.
1.4 Immediately following the action contemplated by paragraph 1.3, the
Predecessor Fund will distribute 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 Corporation, although share certificates representing interests in
the Predecessor Corporation 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 Funds as follows:
(i) the Predecessor Corporation is duly organized, validly existing
and in good standing under the laws of the State of Maryland 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;
A-2
<PAGE>
(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
Corporation 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 time or both) a breach of
or default under, the Articles of Incorporation 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.
A-3
<PAGE>
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 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. BROKERAGE FEES AND EXPENSES
5.1 The Successor Trust and the Predecessor Corporation 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 expenses and costs of the Reorganization and the
transactions contemplated thereby shall be borne by the Successor Fund.
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.
A-4
<PAGE>
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 or 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 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 trustees,
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 Declaration of Trust
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
A-5
<PAGE>
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>
<CAPTION>
ATTEST PHOENIX-GOODWIN CALIFORNIA TAX EXEMPT BONDS, INC.
<S> <C>
Name: ___________________________ By: _________________________________________________
Title: Secretary Name:
Title:
ATTEST PHOENIX-GOODWIN CALIFORNIA TAX EXEMPT BOND FUND
Name: ______________________________ By: ________________________________________________
Title: Name:
Title:
</TABLE>
A-6
<PAGE>
PHOENIX - GOODWIN CALIFORNIA TAX EXEMPT BONDS, INC.
101 Munson Street
Greenfield, Massachusetts 01301
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
August 17, 2000
PROXY
The undersigned shareholder of Phoenix-Goodwin California Tax Exempt Bonds,
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
August 17, 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" THE PROPOSAL
<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 PROPOSAL
1. REORGANIZATION OF FUND
To approve an Agreement and Plan For Against Abstain
of Reorganization which provides for [ ] [ ] [ ]
the reorganization of Phoenix-Goodwin
California Tax Exempt Bonds, Inc. as a
Delaware business trust
2. 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.
---------------------------------- ------ --------------------------- -------
---------------------------------- ------ --------------------------- -------
Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date
