PHOENIX-SENECA GROWTH FUND
a series of
Phoenix-Seneca Funds
909 Montgomery Street
San Francisco, California 94133
----------------
March 6, 2000
Dear Shareholder:
The Phoenix-Seneca Growth Fund, a series of Phoenix-Seneca Funds (the
"Trust"), will hold a special meeting of shareholders at 10:00 a.m., local
time, on April 28, 2000, at the offices of Phoenix Equity Planning Corporation,
101 Munson Street, Greenfield, Massachusetts. At the meeting, the shareholders
of the Phoenix-Seneca Growth Fund will vote on an agreement and plan of
reorganization under which the Phoenix-Seneca Growth Fund will be combined with
the Phoenix-Seneca Equity Opportunities Fund, a series of the Phoenix Strategic
Equity Series Fund. Immediately prior to the closing date, the Phoenix-Seneca
Equity Opportunities Fund will effect a reverse stock split to adjust the net
asset value per share to match that of the Phoenix-Seneca Growth Fund. The
Phoenix-Seneca Equity Opportunities Fund has a substantially identical
investment objective to that of the Phoenix-Seneca Growth Fund. If the
reorganization agreement is implemented, you will become a shareholder of the
Phoenix-Seneca Equity Opportunities Fund and will receive shares of the
corresponding class of the Phoenix-Seneca Equity Opportunities Fund with an
aggregate value equal to the aggregate value of your investment in the
Phoenix-Seneca Growth Fund. No sales charge will be imposed in connection with
the reorganization. Phoenix Investment Partners, Ltd. will pay all costs of the
reorganization. The reorganization will be conditioned upon receipt of an
opinion of counsel indicating that the reorganization will qualify as a
tax-free reorganization for federal income tax purposes.
The Board of Trustees of the Trust believes that the reorganization offers
you the opportunity to pursue your goals in a larger fund. The Board of
Trustees has carefully considered and has unanimously approved the proposed
reorganization, as described in the accompanying materials, and believes that
the reorganization is in the best interests of the Phoenix-Seneca Growth Fund
and its shareholders. Therefore, the Board of Trustees recommends that you vote
in favor of the reorganization agreement.
We strongly urge you to review, complete, and return your proxy as soon as
possible. Your vote is important no matter how many shares you own. Voting your
shares early will help to avoid costly follow-up mail and telephone
solicitation. After reviewing the enclosed materials, please exercise your
right to vote today by completing, dating and signing each proxy card you
receive and mailing the proxy in the self-addressed, postage-paid envelope that
we have enclosed for your convenience. It is very important that you vote and
that your voting instructions be received no later than April 24, 2000.
Please note that you may receive more than one proxy package if you hold
shares of the Phoenix-Seneca Growth Fund in more than one account. You should
return separate proxy cards for each account. If you have any questions, please
call 800-243-1574 (Option 0), between 8:00 a.m. and 6:00 p.m. Eastern time,
Monday through Friday.
Sincerely,
Gail P. Seneca President
<PAGE>
<PAGE>
PHOENIX-SENECA GROWTH FUND
a series of
Phoenix-Seneca Funds
909 Montgomery Street
San Francisco, California 94133
----------------
Notice of Special Meeting of Shareholders
to be Held April 28, 2000
TO THE SHAREHOLDERS:
The Phoenix-Seneca Growth Fund, a series of Phoenix-Seneca Funds, a
Delaware business trust, will hold a special meeting of shareholders at the
offices of Phoenix Equity Planning Corporation, 101 Munson Street, Greenfield,
Massachusetts 01301 on April 28, 2000 at 10:00 a.m., local time, for the
following purposes:
1. To consider and act upon a proposal to approve the Agreement and Plan
of Reorganization, dated November 17, 1999, and the transactions it
contemplates, including (a) the transfer of all or substantially all of the
assets of the Growth Fund to Phoenix-Seneca Equity Opportunities Fund, a series
of the Phoenix Strategic Equity Series Fund, in exchange solely for shares of
the corresponding class of the Equity Opportunities Fund and the assumption by
the Equity Opportunities Fund of all known liabilities of the Growth Fund and
(b) the distribution of the shares of the Equity Opportunities Fund so received
to shareholders of the Growth Fund in complete liquidation of the Growth Fund.
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 Growth Fund at the close of business on February 28, 2000.
If you attend the meeting, you may vote your shares in person. If you do not
expect to attend the meeting, please indicate your voting instructions, date,
sign, and return the enclosed proxy card in the enclosed self-addressed,
postage-paid return envelope.
If you sign, date, and return the proxy card but give no voting
instructions, your shares will be voted "FOR" the proposal noticed above. In
order to avoid the additional expense and delay of further solicitation, we ask
your cooperation in mailing in your proxy card promptly. Unless proxy cards
submitted by corporations and partnerships are signed by the appropriate
persons as indicated in the voting instructions on the proxy card, such proxy
cards cannot be voted.
By Order of the Board of Trustees of
Phoenix-Seneca Funds,
Thomas N. Steenburg, Secretary
San Francisco, California
March 6, 2000
<PAGE>
<PAGE>
PHOENIX-SENECA EQUITY OPPORTUNITIES FUND
a series of
Phoenix Strategic Equity Series Fund
101 Munson Street
Greenfield, Massachusetts 01301
1 (800) 243-1574
PHOENIX-SENECA GROWTH FUND
a series of
Phoenix-Seneca Funds
909 Montgomery Street
San Francisco, California 94133
1 (800) 243-1574
PROSPECTUS/PROXY STATEMENT
Dated March 6, 2000
This Prospectus/Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Trustees of Phoenix-Seneca Funds, a
Delaware business trust (the "Trust"), for use at the special meeting of
shareholders of the Phoenix-Seneca Growth Fund to be held at 10:00 a.m., local
time, on April 28, 2000 at the offices of Phoenix Equity Planning Corporation,
101 Munson Street, Greenfield, Massachusetts 01301, and at any adjournment(s).
The purpose of the meeting is to consider an agreement and plan of
reorganization that would effect the reorganization of the Growth Fund into the
Phoenix-Seneca Equity Opportunities Fund, a series of Phoenix Strategic Equity
Series Fund (the "Acquiring Trust"), as described below. Under the
reorganization agreement, which has been approved by the Board of Trustees of
the Trust, all or substantially all of the assets of the Growth Fund would be
transferred to the Equity Opportunities Fund in exchange solely for Class A,
Class B, Class C, and Class X shares of beneficial interest in the Equity
Opportunities Fund and the assumption by the Equity Opportunities Fund of all
known liabilities of the Growth Fund. These shares of the Equity Opportunities
Fund would then be distributed pro rata to the shareholders of the
corresponding classes of the Growth Fund, and then the Growth Fund would be
liquidated. Immediately prior to the closing date, the Equity Opportunities
Fund will effect a reverse stock split to adjust the net asset value per share
to match that of the Growth Fund. As a result of the proposed transactions,
each shareholder of the Growth Fund would receive a number of full and
fractional shares of the corresponding class of the Equity Opportunities Fund
with an aggregate net asset value equal to the aggregate net asset value of the
shareholder's Growth Fund shares on the effective date of the reorganization.
After the reorganization agreement is implemented, the Trustees of the
Acquiring Trust will change the name of the Equity Opportunities Fund to the
"Phoenix-Seneca Growth Fund."
The Equity Opportunities Fund and the Growth Fund are both portfolio
series of open-end management investment companies. The Equity Opportunities
Fund has an investment objective of long-term capital growth. The Growth Fund
has an investment objective of capital appreciation. Both funds employ Phoenix
Investment Counsel, Inc. as their investment adviser. Seneca Capital Management
LLC is the subadviser for both funds. As used in this Prospectus/Proxy
Statement, the term "adviser" refers to Phoenix Investment Counsel, as the
context requires.
This Prospectus/Proxy Statement, which you should retain for future
reference, sets forth concisely the information that you should know about the
Growth Fund, the Equity Opportunities Fund, and the transactions contemplated
by the reorganization agreement, before you vote on the proposed
reorganization. As used in this Prospectus/Proxy Statement, the term "funds"
refers to the Growth Fund and the Equity Opportunities Fund, collectively, and
the term "trusts" refers to the
<PAGE>
Trust and the Acquiring Trust, collectively. A copy of the prospectus for the
Equity Opportunities Fund, dated August 27, 1999, is included with this
Prospectus/Proxy Statement and is incorporated by reference in this
Prospectus/Proxy Statement.
A Prospectus and a Statement of Additional Information for the Growth
Fund, each dated January 28, 2000, have been filed with the Securities and
Exchange Commission ("SEC") and are incorporated by reference in this
Prospectus/ Proxy Statement. A Statement of Additional Information for the
Equity Opportunities Fund, dated August 27, 1999 has also been filed with the
SEC and is incorporated by reference in this Prospectus/Proxy Statement. Copies
of the above-referenced documents are available upon written or oral request
and without charge by contacting Phoenix Equity Planning Corporation at 100
Bright Meadow Boulevard, Post Office Box 2200, Enfield, Connecticut 06083-2200,
or by telephoning Phoenix Equity Planning Corporation toll-free at
1-800-243-4361.
A Statement of Additional Information, dated March 6, 2000 relating to the
proposed transactions described in this Prospectus/Proxy Statement has been
filed with the SEC and is incorporated by reference in this Prospectus/Proxy
Statement. Copies of this Statement of Additional Information may be obtained
without charge by contacting Phoenix Equity Planning Corporation, at 100 Bright
Meadow Boulevard, Post Office Box 2200, Enfield, Connecticut 06083-2200, or by
telephoning Phoenix Equity Planning Corporation toll free at 1-800-243-4361.
The Securities and Exchange Commission maintains a web site
(http://www.sec.gov) that contains the Statement of Additional Information
dated March 6, 2000 and other material incorporated by reference, together with
other information regarding the Equity Opportunities Fund and the Growth Fund.
This Prospectus/Proxy Statement constitutes the proxy statement of the
Growth Fund for the meeting and the prospectus for shares of the Equity
Opportunities Fund that have been registered with the SEC and are being issued
in connection with the reorganization. This Prospectus/Proxy Statement is
expected to first be sent to shareholders on or about March 6, 2000.
----------------
THE SECURITIES OF THE EQUITY OPPORTUNITIES FUND HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
The date of this Prospectus/Proxy Statement is March 6, 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SYNOPSIS ..................................................... 1
PRINCIPAL RISK FACTORS ....................................... 8
THE PROPOSED REORGANIZATION .................................. 9
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES ............. 14
COMPARATIVE INFORMATION ON DISTRIBUTION ARRANGEMENTS ......... 25
COMPARATIVE INFORMATION ON SHAREHOLDER SERVICES .............. 26
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS ................ 27
FISCAL YEAR .................................................. 29
MANAGEMENT AND OTHER SERVICE PROVIDERS ....................... 29
VOTING INFORMATION ........................................... 30
ADDITIONAL INFORMATION ABOUT THE FUNDS ....................... 34
MISCELLANEOUS ................................................ 34
OTHER BUSINESS ............................................... 39
</TABLE>
<PAGE>
[This page intentionally left blank]
<PAGE>
SYNOPSIS
Background
The proposed reorganization is the outcome of deliberations by the Boards
of Trustees of the two trusts. Phoenix Investment Counsel, Inc., the adviser to
each of the funds, recommended that the Trustees of each trust consider the
benefits that the shareholders would realize if the Growth Fund were to be
combined with the Equity Opportunities Fund. In response to this
recommendation, the independent trustees of each trust requested that
management outline a specific reorganization proposal for their consideration
and provide an analysis of the specific benefits that shareholders would
realize from the proposal. Independent trustees are trustees who are not
"interested persons" of their respective trusts (as defined in Section 2(a)(19)
of the Investment Company Act of 1940 (the "1940 Act")). After considering the
specific reorganization proposal, the Trustees of the Acquiring Trust and the
Trust, including the independent trustees, at meetings held on August 25, 1999
and August 26, 1999, respectively, unanimously approved the reorganization
agreement.
Summary of the Proposed Reorganization
The reorganization will be effected in accordance with the terms of the
reorganization agreement, a copy of which is attached to this Prospectus/Proxy
Statement as Appendix A. The reorganization agreement provides for:
o the acquisition of all or substantially all of the assets of the Growth
Fund by the Equity Opportunities Fund in exchange solely for Class A,
Class B, Class C and Class X shares of the Equity Opportunities Fund;
o the assumption by the Equity Opportunities Fund of all known liabilities
of the Growth Fund;
o the pro rata distribution of the corresponding class of Equity
Opportunities Fund shares to the Growth Fund shareholders; and
o the liquidation of the Growth Fund and of the outstanding Growth Fund
shares.
The reorganization is anticipated to occur on or about May 12, 2000. If
the reorganization agreement is implemented, each Growth Fund shareholder will
receive a number of full and fractional shares of the corresponding class of
Equity Opportunities Fund shares with an aggregate net asset value equal to the
aggregate net asset value of his or her Growth Fund shares, as of the closing
date of the reorganization.
After the reorganization agreement is implemented, the Trustees of the
Acquiring Trust will change the name of the Equity Opportunities Fund to the
"Phoenix-Seneca Growth Fund."
The implementation of the reorganization agreement is subject to a number
of conditions set forth in the reorganization agreement. See "The Proposed
Reorganization." Among the significant conditions (which may not be waived)
are:
o the receipt by each trust of an opinion of counsel as to the federal
income tax consequences of the reorganization; and
o the approval of the reorganization agreement by the shareholders of the
Growth Fund.
The reorganization agreement provides that Phoenix Investment Partners,
Ltd. will bear all costs and expenses of the reorganization, including the
costs of the meeting, the costs and expenses incurred in the preparation and
mailing of the notice, this Prospectus/Proxy Statement and the proxy, and the
solicitation of proxies.
Investment Objectives and Policies
The investment objectives and principal investment strategies of the
Growth Fund and the Equity Opportunities Fund are substantially identical:
1
<PAGE>
o The Growth Fund has an investment objective of capital appreciation. The
Equity Opportunities Fund has an investment objective of long-term capital
growth.
o The Growth Fund invests at least 65% of its total assets in common stocks,
primarily common stocks of growth companies of any size. The Equity
Opportunities Fund also invests at least 65% of its assets in common
stocks.
See "Principal Risk Factors" and "Comparison of Investment Objectives and
Policies" below, for further information on the similarities and differences
between the investment objectives, policies and risks of the Equity
Opportunities Fund and the Growth Fund. You can also find additional
information in the Equity Opportunities Fund's Prospectus.
Distribution and Purchase Arrangements
The Growth Fund currently offers four classes of shares: Class A, Class B,
Class C and Class X shares. Shares are offered to the public at a price equal
to the net asset value per share plus a sales charge for Class A, Class B and
Class C shares which, at the election of the purchaser, may be imposed as
follows:
o Class A shares--at the time of purchase.
o Class B and Class C shares--on a contingent deferred basis.
Class X shares are offered primarily to certain institutional investors.
The Equity Opportunities Fund currently offers two classes of shares:
Class A and Class B shares. The Class A and Class B shares of the Equity
Opportunities Fund are offered to the public under the same sales charge
arrangements as the Class A and Class B shares of the Growth Fund. As a result
of the reorganization, expenses incurred by Phoenix Equity Planning Corporation
in selling the Class B shares of the Growth Fund that have not been reimbursed
by Rule 12b-1 fees or contingent deferred sales charges will become subject to
reimbursement by the Equity Opportunities Fund.
The Equity Opportunities Fund does not currently offer Class C and Class X
shares. On the closing date of the reorganization, the Equity Opportunities
Fund will issue Class C and Class X shares with the same sales charges and
distribution arrangements as the Growth Fund's existing Class C and Class X
shares to shareholders of the Growth Fund. Therefore, all shareholders of the
Growth Fund will receive the corresponding class of shares of the Equity
Opportunities Fund in exchange for their shares in the Growth Fund.
See "Comparative Information on Distribution Arrangements" below for
further information on the distribution arrangements of the Growth Fund and the
Equity Opportunities Fund. You can also find additional information on
distribution arrangements in the Equity Opportunities Fund's Prospectus.
Dividends and Distributions
The dividend and distribution policies of the funds are substantially
identical.
o The Growth Fund distributes net investment income annually and distributes
net realized capital gains, if any, at least annually.
o The Equity Opportunities Fund distributes net investment income
semi-annually and distributes net realized capital gains, if any, at least
annually.
All dividends and distributions of the Growth Fund and the Equity
Opportunities Fund are paid in additional shares of the respective series
unless shareholders elect to receive cash. You can also find additional
information on dividends and distributions in the Equity Opportunities Fund's
Prospectus.
2
<PAGE>
Exchanges
The Growth Fund and the Equity Opportunities Fund currently offer
shareholders identical exchange privileges. Shareholders of the Growth Fund and
the Equity Opportunities Fund may exchange their shares for shares of a
corresponding class of shares of any other affiliated Phoenix funds, except for
the mutual funds of the Phoenix-Zweig Trust and Phoenix-Euclid Funds.
On exchanges with corresponding classes of shares that carry a contingent
deferred sales charge, the contingent deferred sales charge schedule of the
original shares purchased continues to apply. You can also find additional
information on exchanges in the Equity Opportunities Fund's Prospectus.
Redemption Procedures
Shareholders of both the Growth Fund and the Equity Opportunities Fund may
redeem their shares at a redemption price equal to the net asset value of the
shares (minus any applicable contingent deferred sales charge) as next
determined following the receipt of a redemption order in proper form.
Ordinarily payments of redemption proceeds for redeemed Growth Fund and Equity
Opportunities Fund shares are made within seven days after receipt of a
redemption request in proper form. See "Comparative Information on Shareholder
Services" for more information. You can also find additional information on
redemption procedures in the Equity Opportunities Fund's Prospectus.
Federal Tax Consequences of Proposed Reorganization
At the closing of the reorganization, the Trust and the Acquiring Trust
will receive an opinion of counsel, subject to customary assumptions and
representations, that:
o shareholders of the Growth Fund will recognize no gain or loss for federal
income tax purposes on their receipt of shares of the Equity Opportunities
Fund;
o the aggregate tax basis of the Equity Opportunities Fund shares, including
any fractional shares, received by each shareholder of the Growth Fund
pursuant to the reorganization will be the same as the aggregate tax basis
of the Growth Fund shares held by such shareholder immediately prior to
the reorganization; and
o the holding period of the Equity Opportunities Fund shares, including
fractional shares, to be received by each shareholder of the Growth Fund
will include the period during which the Growth Fund shares exchanged
therefor were held by such shareholder (provided that the Growth Fund
shares were held as a capital asset on the date of the reorganization).
See "The Proposed Reorganization--Federal Income Tax Consequences" for
more information.
Risk Factors
An investment in the Equity Opportunities Fund is subject to specific
risks arising from the types of securities in which the Equity Opportunities
Fund invests and general risks arising from investing in any mutual fund.
Investors can lose money by investing in the Equity Opportunities Fund. There
is no assurance that the Equity Opportunities Fund will meet its investment
objective. Because the Equity Opportunities Fund's investment objectives and
policies are substantially identical to those of the Growth Fund, an investment
in the Equity Opportunities Fund is subject to many of the same risks as an
investment in the Growth Fund. See "Principal Risk Factors" for the principal
risks associated with an investment in the Equity Opportunities Fund.
3
<PAGE>
Management and Other Service Providers
Investment and trading decisions for each fund are made by a team of
managers and analysts. The team leaders for each fund are primarily responsible
for the day-to-day decisions related to that fund. The team leader of any one
fund may be on another fund team. The team leaders for the Equity Opportunities
Fund are Gail P. Seneca, Richard D. Little and Ronald K. Jacks. The team
leaders for the Growth Fund are Gail P. Seneca and Richard D. Little.
Comparative Fee Tables
The tables below are designed to assist an investor in understanding the
various direct and indirect costs and expenses associated with an investment in
the relevant class of shares of each fund. Each table also includes pro forma
information for the combined Equity Opportunities Fund resulting from the
reorganization assuming the reorganization took place on October 31, 1999, and
after adjusting such information to reflect current fees. The expense
information for the Equity Opportunities Fund and the Growth Fund is based upon
expenses for the twelve months ended October 31, 1999.
As indicated in the tables below, immediately upon effectiveness of the
reorganization, the "Total Annual Fund Operating Expenses" for the combined
Equity Opportunities Fund are expected to be lower than the "Total Annual Fund
Operating Expenses" for the Growth Fund.
<TABLE>
<CAPTION>
CLASS A SHARES
----------------------------------------------------------------
Equity Opportunities Growth Pro Forma Combined
Fund Fund Equity Opportunities Fund
---------------------- ---------- --------------------------
<S> <C> <C> <C>
Annual Fund Operating Expenses
(expenses that are deducted from
fund assets)
Management Fees 0.70% 0.70% 0.70%
Distribution and Service (12b-1 Fees) (a) 0.25% 0.25% 0.25%
Other Expenses 0.29% 0.49% 0.26%
---- ---- ----
Total Annual Fund Operating Expenses (b) 1.24% 1.44% 1.21%
==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES
----------------------------------------------------------------
Equity Opportunities Growth Pro Forma Combined
Fund Fund Equity Opportunities Fund
---------------------- ---------- --------------------------
<S> <C> <C> <C>
Annual Fund Operating Expenses
(expenses that are deducted from
fund assets)
Management Fees 0.70% 0.70% 0.70%
Distribution and Service (12b-1 Fees) (a) 1.00% 1.00% 1.00%
Other Expenses 0.29% 1.76% 0.26%
---- ---- ----
Total Annual Fund Operating Expenses (b) 1.99% 3.46% 1.96%
==== ==== ====
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
CLASS C SHARES
---------------------------------------
Growth Pro Forma Combined
Fund Equity Opportunities Fund
---------- --------------------------
<S> <C> <C>
Annual Fund Operating Expenses
(expenses that are deducted from
fund assets)
Management Fees 0.70% 0.70%
Distribution and Service (12b-1 Fees) (a) 1.00% 1.00%
Other Expenses 3.97% 0.26%
---- ----
Total Annual Fund Operating Expenses (b) 5.67% 1.96%
==== ====
</TABLE>
<TABLE>
<CAPTION>
CLASS X SHARES
--------------------------------------------
Growth Pro Forma Combined
Fund Equity Opportunities Fund
--------------- --------------------------
<S> <C> <C>
Annual Fund Operating Expenses
(expenses that are deducted from
fund assets)
Management Fees 0.70% 0.70%
Distribution and Service (12b-1 Fees) (a) None None
Other Expenses 0.46% 0.26%
----- -----
Total Annual Fund Operating Expenses (b) 1.16% 0.96%
===== =====
</TABLE>
The following tables show shareholder transaction expenses currently
applicable to the purchase of Class A and Class B shares of both funds and the
Class C and Class X shares of the Growth Fund. These expenses, including the
expenses of the Class C and Class X shares of the Growth Fund, will remain in
effect as to the combined Equity Opportunities Fund following the
reorganization.
<TABLE>
<CAPTION>
Class A Class B
Equity Opportunities Fund Shares Shares
- ------------------------------------------------------------ ------------------ ------------
<S> <C> <C>
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 4.75% None
Maximum Deferred Sales Charge (Load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5%(c)
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends None None
Redemption Fee None None
Exchange Fee None None
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Class A Class B Class C Class X
Growth Fund Shares Shares Shares Shares
- ------------------------------------------------------------ ----------- ------------ ------------ ---------
<S> <C> <C> <C> <C>
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 4.75% None None None
Maximum Deferred Sales Charge (Load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5%(c) 1%(d) None
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends None None None None
Redemption Fee None None None None
Exchange Fee None None None None
</TABLE>
- ----------------
(a) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end
sales charge permitted by the National Association of Securities Dealers,
Inc.
(b) The Growth Fund's adviser has agreed to reimburse through January 31, 2001,
the Growth Fund's operating expenses to the extent that such expenses
exceed 1.85% for Class A shares, 2.60% for Class B and Class C shares and
1.25% for Class X shares. Total Annual Fund Operating Expenses for the
Growth Fund, after reimbursement, are 1.44% for Class A shares, 2.60% for
Class B shares, 2.60% for Class C shares and 1.16% for Class X shares.
(c) The Maximum Deferred Sales charge is imposed on Class B shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during
the fourth and fifth years and to 0% after the fifth year.
(d) The Deferred Sales Charge is imposed on Class C shares redeemed during the
first year only.
Example
These examples illustrate the impact of the above fees and expenses on an
account with an initial investment of $10,000, based on the expenses shown
above. They assume a 5% annual return, the reinvestment of all dividends and
distributions and "annual fund operating expenses" remaining the same each
year. These examples are hypothetical; actual fund expenses and returns vary
from year to year, and may be higher or lower than those shown. In the case of
Class B shares, it is assumed that your shares are converted to Class A shares
after eight years.
Fees and expenses if you redeemed your shares at the end of each time
period:
<TABLE>
<CAPTION>
Class A Shares
- --------------
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Equity Opportunities Fund ............................ $595 $850 $1,124 $1,904
Growth Fund .......................................... $615 $909 $1,225 $2,117
Pro Forma Combined Equity Opportunities Fund ......... $592 $841 $1,108 $1,871
</TABLE>
<TABLE>
<CAPTION>
Class B Shares
- --------------
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Equity Opportunities Fund ............................ $602 $ 824 $1,073 $2,123
Growth Fund .......................................... $749 $1,262 $1,798 $3,571
Pro Forma Combined Equity Opportunities Fund ......... $599 $ 815 $1,057 $2,091
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
'
Class C Shares
- --------------
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Equity Opportunities Fund ............................ N/A N/A N/A N/A
Growth Fund .......................................... $665 $1,684 $2,788 $5,484
Pro Forma Combined Equity Opportunities Fund ......... $299 $ 615 $1,057 $2,285
</TABLE>
<TABLE>
<CAPTION>
Class X Shares
- --------------
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Equity Opportunities Fund ............................ N/A N/A N/A N/A
Growth Fund .......................................... $118 $368 $638 $1,409
Pro Forma Combined Equity Opportunities Fund ......... $ 98 $306 $531 $1,178
</TABLE>
Fees and expenses if you did not redeem your shares at the end of each
time period:
<TABLE>
<CAPTION>
Class A Shares
- --------------
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Equity Opportunities Fund ............................ $595 $850 $1,124 $1,904
Growth Fund .......................................... $615 $909 $1,225 $2,117
Pro Forma Combined Equity Opportunities Fund ......... $592 $841 $1,108 $1,871
</TABLE>
<TABLE>
<CAPTION>
Class B Shares
- --------------
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Equity Opportunities Fund ............................ $202 $ 624 $1,073 $2,123
Growth Fund .......................................... $349 $1,062 $1,798 $3,571
Pro Forma Combined Equity Opportunities Fund ......... $199 $ 615 $1,057 $2,091
</TABLE>
<TABLE>
<CAPTION>
Class C Shares
- --------------
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Equity Opportunities Fund ............................ N/A N/A N/A N/A
Growth Fund .......................................... $565 $1,684 $2,788 $5,484
Pro Forma Combined Equity Opportunities Fund ......... $199 $ 615 $1,057 $2,285
</TABLE>
<TABLE>
<CAPTION>
Class X Shares
- --------------
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Equity Opportunities Fund ............................ N/A N/A N/A N/A
Growth Fund .......................................... $118 $368 $638 $1,409
Pro Forma Combined Equity Opportunities Fund ......... $ 98 $306 $531 $1,178
</TABLE>
Note: Actual expenses for the Growth Fund may be lower than those shown in
the tables above since the expense levels used to calculate the figures shown
do not include the reimbursement of expenses over certain levels by the Growth
Fund's adviser.
The purpose of the tables above is to help the investor understand the
various costs and expenses that the investor will bear directly or indirectly.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES. ACTUAL RETURNS OR EXPENSES MAY BE GREATER OR LESS THAN SHOWN.
7
<PAGE>
PRINCIPAL RISK FACTORS
Because the Equity Opportunities Fund's investment objective and policies
are substantially identical to those of the Growth Fund, an investment in the
Equity Opportunities Fund is subject to many of the same specific risks as an
investment in the Growth Fund. The following highlights the principal
similarities and differences between the principal risk factors associated with
an investment in the Equity Opportunities Fund as contrasted with those
associated with the Growth Fund and is qualified in its entirety by the more
extensive discussion of risk factors in the Prospectuses and Statements of
Additional Information of the Equity Opportunities Fund and the Growth Fund,
respectively.
An investment in the Equity Opportunities Fund is subject to specific
risks arising from the types of securities in which the Equity Opportunities
Fund invests and general risks arising from investing in any mutual fund. You
can lose money by investing in the Equity Opportunities Fund. There is no
assurance that the Equity Opportunities Fund will meet its investment
objective.
General
The Equity Opportunities Fund and the Growth Fund both invest in common
stocks for capital appreciation. If between the time you purchase shares and
the time you sell shares the value of the funds investments decreases, you will
lose money. Conditions affecting the overall economy, specific industries or
companies in which the fund invests can be worse than expected. As a result,
the value of shares may decrease.
Foreign Investing
Both the Equity Opportunities Fund and the Growth Fund may invest in
foreign countries. Foreign markets and currencies may not perform as well as
U.S. markets. Political and economic uncertainty in foreign countries, as well
as less public information about foreign investments, may negatively impact the
funds portfolios. Dividends and other income payable on foreign securities may
be subject to foreign taxes. Some investments may be made in currencies other
than U.S. dollars that will fluctuate in value as a result of changes in the
currency exchange rate.
Impact of the Year 2000 Issue on Fund Investments
The year 2000 issue is the result of computer programs being written using
two rather than four digits to define the applicable year. There is still a
possibility that some or all of an entity's computer programs that have
date-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. If an entity whose securities are held by the funds does
not "fix" its Year 2000 issue it is still possible that its operations and
financial results would be hurt. Also, the cost of modifying computer programs
to become Year 2000 compliant may hurt the financial performance and market
price of companies whose securities are held by the funds.
Small Capitalization Companies
Both the Equity Opportunities Fund and the Growth Fund may invest in small
companies as well as large companies. Given the limited operating history and
rapidly changing fundamental prospects, investment returns from smaller
capitalization companies can be highly volatile. Small capitalization companies
may be affected to a greater extent to changes in economic conditions and
conditions in particular industries. Also, small capitalization companies are
subject to varying patterns of trading volume and may at times, be more
difficult to sell. Smaller companies may be relatively new and do not have the
same operating history and "track record" as larger companies. This could make
future performance of smaller companies more difficult to predict.
Growth Stocks
The Equity Opportunities Fund and the Growth Fund invest in growth stocks.
Because growth stocks typically make little or no dividend payments to
shareholders, return is based on a stock's capital appreciation and is more
dependent on market increases and decreases. Growth stocks are therefore more
volatile than non-growth stocks to market changes.
8
<PAGE>
Limited Number of Investments
Conditions which negatively affect securities in the portfolio will have a
greater impact on the Growth Fund as compared to a fund that holds a greater
number of security positions. In addition, the Growth Fund may be more
sensitive to changes in the market value of a single issuer in its portfolio
and therefore the value of the Growth Fund shares may be more volatile.
THE PROPOSED REORGANIZATION
Agreement and Plan of Reorganization
The terms and conditions under which the proposed reorganization may be
consummated are set forth in the reorganization agreement. Significant
provisions of the reorganization agreement are summarized below. This summary,
however, is qualified in its entirety by reference to the reorganization
agreement, a form of which is attached to this Prospectus/Proxy Statement as
Appendix A.
The Agreement and Plan of Reorganization contemplates:
o the acquisition by the Equity Opportunities Fund, on the closing date of
the reorganization, of all or substantially all of the assets of the
Growth Fund in exchange solely for Class A, Class B, Class C and Class X
shares of the Equity Opportunities Fund and the assumption by the Equity
Opportunities Fund of all known liabilities of the Growth Fund; and
o the distribution of shares of the corresponding class of the Equity
Opportunities Fund to the shareholders of the Growth Fund in exchange for
their respective shares of the Growth Fund.
The assets of the Growth Fund to be acquired by the Equity Opportunities
Fund include all property, including, without limitation, all cash, securities,
and dividends or interest receivables which are owned by the Growth Fund and
any deferred or prepaid expenses shown as an asset on the books of the Growth
Fund on the closing date of the reorganization. The Equity Opportunities Fund
will assume all liabilities, accrued expenses, costs, charges, and reserves of
the Growth Fund reflected on an unaudited statement of assets and liabilities
as of the closing date. The closing of the reorganization will occur on the
first Friday following satisfaction (or waiver) of the conditions to closing
set forth in the reorganization agreement (currently anticipated to occur on or
about May 12, 2000), or such later date as the parties may agree.
The value of the Growth Fund's assets to be acquired and the Growth Fund's
liabilities to be assumed by the Equity Opportunities Fund and the net asset
value of each class of shares of the Equity Opportunities Fund will be
determined immediately after the close of regular trading on the New York Stock
Exchange on the closing date, using the valuation procedures set forth in the
Equity Opportunities Fund's then current Prospectus and Statement of Additional
Information. The number of Class A, Class B, Class C and Class X shares of the
Equity Opportunities Fund to be issued to the Growth Fund will be determined by
dividing (a) the value of the aggregate net assets attributable to each class
of shares of the Growth Fund by (b) the net asset value per share of the
corresponding class of the Equity Opportunities Fund.
Immediately prior to the closing date, the Equity Opportunities Fund will
effect a reverse stock split to adjust the net asset value per share to match
that of the Growth Fund. On the closing date, the Growth Fund will liquidate
and distribute pro rata to its shareholders of record the Equity Opportunities
Fund shares received by the Growth Fund in exchange for their respective shares
in the Growth Fund. This liquidation and distribution will be accomplished by
opening an account on the books of the Equity Opportunities Fund in the name of
each shareholder of record in the Growth Fund and by crediting to each account
the shares due pursuant to the reorganization. Every Growth Fund shareholder
will own
9
<PAGE>
shares of the corresponding class of the Equity Opportunities Fund immediately
after the reorganization, the value of which will be equal to the value of the
shareholder's Growth Fund shares immediately prior to the reorganization.
At or prior to the closing date, the Growth Fund will declare a dividend
or dividends which, together with all previous such dividends, will have the
effect of distributing to the Growth Fund shareholders all of the Growth Fund's
investment company taxable income for all taxable years ending at or prior to
the closing date (computed without regard to any deduction for dividends paid)
and all of its net capital gains realized (after reduction for any capital loss
carry-forward) in all taxable years ending at or prior to the closing date.
Subject to certain limitations on liability, the Equity Opportunities Fund
has agreed to indemnify and hold harmless the Trustees of the Trust who are not
"interested persons" of the adviser or distributor of the Growth Fund (the
"Independent Trustees") from and against any and all claims, costs, expenses
(including reasonable attorneys' fees), losses and liabilities of any sort or
kind (collectively "Liability") which may be asserted against them or for which
the Independent Trustees may become liable arising out of or attributable to
the transactions contemplated by the reorganization agreement, provided that
any Independent Trustee seeking the benefit of this indemnification shall not
have materially contributed to the creation of such Liability by acting in a
manner contrary to his or her fiduciary duties as a trustee under the 1940 Act.
The consummation of 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 Trustees of either trust, or by an
authorized officer of each trust, as appropriate.
Among the significant conditions which may not be waived are: (a) the
receipt by the Trust and the Acquiring 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 Growth Fund. The
Plan may be terminated and the reorganization abandoned at any time, before or
after approval by the shareholders of the Growth Fund, prior to the closing
date, by either party by resolution of its Board of Trustees. In addition, the
reorganization agreement may be amended by mutual agreement, except that no
amendment may be made to the reorganization agreement subsequent to the meeting
that would change the provisions for determining the number of Equity
Opportunities Fund shares to be issued to shareholders of the Growth Fund
without their further approval.
Reasons for the Reorganization
The proposed reorganization is the outcome of deliberations by the Boards
of Trustees of the trusts. Phoenix Investment Counsel, the adviser to each of
the funds, recommended that the Trustees of each trust consider the benefits
that shareholders would realize if the Growth Fund were to be combined with the
Equity Opportunities Fund. In response to this recommendation, the independent
trustees of each trust requested that management outline a specific
reorganization proposal for their consideration and provide an analysis of the
specific benefits to be realized by shareholders from the proposal.
In the course of their review, the Trustees of the Trust noted that the
reorganization would be a means of combining two series with substantially
identical investment objectives and principal investment strategies and would
permit the shareholders of the Growth Fund to pursue their investment goals in
a larger fund. In reaching this conclusion, the Board considered a number of
additional factors, including the following:
o the total expense ratio of the combined Equity Opportunities Fund
following the reorganization is projected to be lower than the current
total expense ratio of the Growth Fund;
10
<PAGE>
o the reorganization provides for continuity of distribution and shareholder
servicing arrangements;
o the reorganization will not result in the recognition of any gain or loss
for federal income tax purposes either to the Growth Fund or the Equity
Opportunities Fund or to the shareholders of either of the funds; and
o the reorganization could result in economies of scale through the
spreading of fixed costs over a larger asset base. At only $30.7 million
in net assets (as of October 31, 1999), the Growth Fund's fixed costs are
spread over that relatively small asset base.
After considering these and other factors, the Board of Trustees of the
Trust, including the independent trustees, unanimously concluded at a meeting
held on August 26, 1999 that the reorganization would be in the best interests
of the Growth Fund and its shareholders and that the interests of existing
Growth Fund shareholders will not be diluted as a result of the transactions
contemplated by the reorganization. In the course of their review, the Board of
Trustees of the Trust noted that Phoenix Investment Counsel has elected to use
the historical financial statements and performance record of the Growth Fund.
The Board of Trustees of the Trust then unanimously voted to approve the
reorganization agreement and authorize the officers of the Trust to submit the
reorganization agreement to shareholders for consideration.
At a meeting held on August 25, 1999, the Board of Trustees of the
Acquiring Trust, including the independent trustees, also unanimously concluded
that the reorganization would be in the best interests of the Equity
Opportunities Fund and the shareholders and that the interests of existing
Equity Opportunities Fund shareholders will not be diluted as a result of the
reorganization. In the course of their review, the Board of Trustees of the
Acquiring Trust noted that Phoenix Investment Counsel has elected to use the
historical financial statements and performance record of the Growth Fund. The
Board of Trustees of the Acquiring Trust also noted that the expenses incurred
by Phoenix Equity Planning Corporation in selling the Class B shares of the
Growth Fund that have not been reimbursed by Rule 12b-1 fees or contingent
deferred sales charges will become subject to reimbursement by the Equity
Opportunities Fund. The Board of Trustees of the Acquiring Trust also
unanimously voted to approve the reorganization agreement.
Federal Income Tax Consequences
Special counsel to the funds, Goodwin, Procter & Hoar LLP, is to opine
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 or substantially all of the assets of the Growth Fund
solely in exchange for Equity Opportunities Fund shares and the assumption
by the Equity Opportunities Fund of all known liabilities of the Growth
Fund, and the distribution of such shares to the shareholders of the
Growth Fund, will constitute a "reorganization" within the meaning of
Section 368(a) of the Code; the Equity Opportunities Fund and the Growth
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 Growth Fund on the transfer of
the assets of the Growth Fund to the Equity Opportunities Fund in exchange
for Equity Opportunities Fund shares and the assumption by the Equity
Opportunities Fund of all known liabilities of the Growth Fund or upon the
distribution of Equity Opportunities Fund shares to the Growth Fund
shareholders in exchange for their shares of the Growth Fund;
o the tax basis of the Growth Fund's assets acquired by the Equity
Opportunities Fund will be the same to the Equity Opportunities Fund as
the tax basis of such assets to the Growth Fund immediately prior to the
reorganization,
11
<PAGE>
and the holding period of the assets of the Growth Fund in the hands of
the Equity Opportunities Fund will include the period during which those
assets were held by the Growth Fund;
o no gain or loss will be recognized by the Equity Opportunities Fund upon
the receipt of the assets of the Growth Fund solely in exchange for the
Equity Opportunities Fund shares and the assumption by the Equity
Opportunities Fund of all known liabilities of the Growth Fund;
o no gain or loss will be recognized by shareholders of the Growth Fund upon
the receipt of Equity Opportunities Fund shares by such shareholders,
provided such shareholders receive solely Equity Opportunities Fund shares
(including fractional shares) in exchange for their Growth Fund shares;
and
o the aggregate tax basis of the Equity Opportunities Fund shares, including
any fractional shares, received by each shareholder of the Growth Fund
pursuant to the reorganization will be the same as the aggregate tax basis
of the Growth Fund shares held by such shareholder immediately prior to
the reorganization, and the holding period of the Equity Opportunities
Fund shares, including fractional shares, to be received by each
shareholder of the Growth Fund will include the period during which the
Growth Fund shares exchanged therefor were held by such shareholder
(provided that the Growth Fund shares were held as a capital asset on the
date of the reorganization).
The receipt of such an opinion is a condition to the consummation of the
reorganization. The Trust 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 Growth Fund in exchange for Equity Opportunities Fund
shares and the assumption by the Equity Opportunities Fund of all known
liabilities of the Growth Fund do not constitute a tax-free reorganization,
each Growth Fund shareholder generally will recognize gain or loss equal to the
difference between the value of Equity Opportunities Fund shares such
shareholder acquires and the tax basis of such shareholder's Growth Fund
shares.
Shareholders of the funds 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 funds should
also consult tax advisers as to state and local tax consequences, if any, of
the reorganization.
Capitalization
The following table sets forth the capitalization of the Equity
Opportunities Fund and the Growth Fund, and on a pro forma basis for the
combined Equity Opportunities Fund as of October 31, 1999 giving effect to the
proposed acquisition of net assets of the Growth Fund at net asset value.
Immediately prior to the closing date, the Equity Opportunities Fund will
effect a reverse stock split to adjust the net asset value per share to match
that of the Growth Fund. The pro forma data reflects the effect of the reverse
stock split and an exchange ratio of approximately 1.00 for Class A, Class B,
Class C and Class X shares, respectively, of the Equity Opportunities Fund
issued for each Class A, Class B, Class C and Class X share, respectively, of
the Growth Fund.
12
<PAGE>
<TABLE>
<CAPTION>
Pro Forma
Equity Growth Combined Equity
Opportunities Fund Fund Opportunities Fund
-------------------- ---------------- -------------------
<S> <C> <C> <C>
Net assets
Class A $ 220,832,264 $ 30,709,557 $ 251,541,821
Class B 3,082,483 5,121,486 8,203,969
Class C N/A 2,388,084 2,388,084
Class X N/A 36,419,128 36,419,128
Net asset value per share
Class A $ 9.56 $ 21.55 $ 21.55
Class B 9.13 21.22 21.22
Class C N/A 21.18 21.18
Class X N/A 21.95 21.95
Shares outstanding
Class A 23,103,652 1,425,095 11,672,946
Class B 337,793 241,370 386,644
Class C N/A 112,728 112,728
Class X N/A 1,659,335 1,659,335
</TABLE>
The table set forth above should not be relied on to determine the number
of Equity Opportunities Fund shares to be received in the reorganization. The
actual number of shares to be received will depend upon the net asset value and
number of shares outstanding of the Growth Fund and the Equity Opportunities
Fund at the time of the reorganization.
Historical Performance Information
The following table sets forth the average annual total return of the
Class A, Class B, Class C and Class X shares of the Equity Opportunities Fund
and the Growth Fund for the periods indicated.
Average Annual Total Returns for
Periods Ending 10/31/99(a)
<TABLE>
<CAPTION>
Since Inception
Fund Name 1 Year 5 Years 10 Years Inception Date
- ------------------------------ ----------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Equity Opportunities Fund
Class A 32.64% 18.23% 13.13% 11.39% 8/1/1944
Class B 34.29% 18.52% N/A 17.73% 7/18/1994
Russell 2000 Growth Index(b) 25.79% 26.10% 17.85% 14.07% 12/31/1978
Growth Fund
Class A 32.14% N/A N/A 29.58% 3/8/1996
Class B 33.15% N/A N/A 14.72% 7/1/1998
Class C 36.98% N/A N/A 17.41% 7/1/1998
Class X 39.15% N/A N/A 32.11% 3/8/1996
S&P 500 Stock Index (c) 29.28% 12.49% 10.79% 25.56% 3/8/1996
</TABLE>
Returns indicate past performance, which is not predictive of future
performance. Investment return and net asset value will fluctuate, so that
shares, when redeemed, may be worth more or less than the original cost.
13
<PAGE>
- ----------------
(a) The Equity Opportunities Fund's average annual returns in the table above
reflect the deduction of the maximum sales charge for an investment in
Class A shares and a full redemption of Class B shares. The Growth Fund's
average annual returns in the table above reflect the deduction of the
maximum sales charge for an investment in the fund's Class A shares and a
full redemption of Class B and Class C shares.
(b) The Russell 2000 Growth Index is a commonly used, unmanaged indicator of
stock market total return performance for small-cap companies with
above-average growth orientation. The Index does not reflect sales
charges.
(c) The S&P 500 Stock Index is an unmanaged but commonly used measure of common
stock total return performance. The S&P's performance does not reflect
sales charges.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion summarizes some of the more significant
similarities and differences in the investment objectives, policies and
restrictions of the Equity Opportunities Fund and the Growth Fund. The
discussion below is qualified in its entirety by the discussion elsewhere in
this Prospectus/Proxy Statement, and in each fund's Prospectus and Statement of
Additional Information.
Investment Objectives and Policies
The investment objectives of the Equity Opportunities Fund and the Growth
Fund are substantially identical. The Equity Opportunities Fund has an
investment objective of long-term capital growth. The Growth Fund has an
investment objective of capital appreciation. The investment objectives of the
Equity Opportunities Fund and the Growth Fund are "fundamental" policies which
may not be changed without the approval of the holders of at least a "majority
of the outstanding voting securities" (as that term is defined in the 1940 Act)
of the respective fund.
The principal investment strategies of the Equity Opportunities Fund are
substantially identical to the principal investment strategies of the Growth
Fund.
Both the Equity Opportunities Fund and the Growth Fund invest in stocks
they believe are:
o growing at the fastest rates;
o producing quality, sustainable earnings;
o well managed; and
o reasonably valued relative to their growth rate and to the market.
The Equity Opportunities Fund may invest in both U.S. and foreign
(non-U.S.) stocks of any type and from any industry. Under normal
circumstances, the Growth Fund invests at least 65% of its total assets in
common stocks of companies of any size. The Growth Fund may also invest in
securities of foreign issuers.
The Equity Opportunities Fund and Growth Fund will review stocks for sale
if earnings reports disappoint, valuation levels reach the top of their
historic levels or earnings momentum peaks.
The Growth Fund's subadviser seeks growth with controlled risk by
investing a portion of its portfolio in companies that have long and proven
records of financial success ("earnings sustainers"). Earnings sustainers are
generally large, well-known companies that have established histories of
profitability and/or dividend payment. The Growth Fund also
14
<PAGE>
invests in companies that are growing rapidly and that the subadviser believes
have the potential to exceed earnings expectations ("earnings surprisers").
Earnings surprisers are generally small and mid-cap companies. Using
statistical modeling and analysis that evaluates a stock's earnings strength,
quality and sustainability, as well as the management of the issuer and the
stock's valuation, approximately 30 to 50 securities are selected for the
fund's portfolio.
Both the Equity Opportunities Fund and the Growth Fund have the same
adviser and subadviser. Phoenix Investment Counsel, Inc. and Seneca Capital
Management LLC serve as the investment adviser and subadviser to both funds,
respectively. Phoenix is responsible for managing each fund's investment
program and the general operations of the funds. Seneca, as subadviser, is
responsible for the day-to-day management of each fund's portfolio.
Certain Investment Restrictions
The Equity Opportunities Fund and the Growth Fund are both subject to
certain investment restrictions that restrict the scope of their investments.
Fundamental investment restrictions may not be changed without the affirmative
vote of the holders of a majority of the outstanding securities (as defined in
the 1940 Act) of the fund. However, investment restrictions that are not
fundamental may be changed by the Board of Trustees without shareholder
approval. The table below compares certain fundamental and non-fundamental
investment restrictions of the Equity Opportunities Fund and the Growth Fund.
Fundamental restrictions are followed by an (F); non-fundamental restrictions
are followed by an (nf).
15
<PAGE>
<TABLE>
<CAPTION>
Subject Matter of Restriction Equity Opportunities Fund Growth Fund
- ------------------------------ -------------------------------------- --------------------------------------------
<S> <C> <C>
Borrowing The Equity Opportunities Fund may The Growth Fund may not borrow
not borrow money. (F) money, except that it may borrow
from banks or enter into reverse
repurchase agreements or dollar rolls
up to one-third of the value of its
total assets (calculated when the loan
is made) to take advantage of invest-
ment opportunities and may pledge
up to one- third of the value of its
total assets to secure such borrowings.
The Growth Fund is also authorized
to borrow an additional 5% of its
total assets without regard to the
foregoing limitations for temporary
purposes such as the clearance of
transactions and share redemptions.
For purposes of this investment
restriction, short sales, the purchase
or sale of securities on a "when-
issued," delayed delivery or forward
commitment basis, the purchase or
sale of options, futures contracts,
and options on futures contracts,
securities or indices and collateral
arrangements with respect thereto
shall not constitute borrowing. (F)
- ------------------------------------------------------------------------------------------------------------------
Pledging The Equity Opportunities Fund may The Growth Fund may not pledge,
not pledge, mortgage or hypothecate mortgage or hypothecate its assets,
any securities or other property. (F) except to secure permitted borrow-
ings and then only if such pledging,
mortgaging or hypothecating does not
exceed one-third of the Growth
Fund's total assets taken at market
value. Collateral arrangements with
respect to margin, option and other
risk management and when-issued
and forward commitment transactions
are not deemed to be pledges or
other encumbrances for purposes of
this restriction. (nf)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Subject Matter of Restriction Equity Opportunities Fund Growth Fund
- ---------------------------------- ------------------------------------------ ---------------------------------------------
<S> <C> <C>
Lending The Equity Opportunities Fund may The Growth Fund may not make
not make loans to other persons loans, except that the Growth Fund
except that it6 may lend portfolio may (a) lend portfolio securities in
securities (up to 33% of net assets accordance with the Growth Fund's
at the time the loan is made) to investment policies up to one-third of
brokers dealers or other financial the Growth Fund's total assets taken
institutions not affiliated with the at market value, (b) enter into repur-
Acquiring Trust or the adviser, chase agreements, and (c) purchase
subject to conditions established by all or a portion of an issue of debt
the adviser and enter into repurchase securities, bank loan participation
transactions (in accordance with the interests, bank certificates of deposit,
trust's current prospectus). (F) bankers' acceptances, debentures or
other securities, whether or not the
purchase is made upon the original
issuance of the securities. (F)
- --------------------------------------------------------------------------------------------------------------------------
Illiquid Securities/Restricted The Equity Opportunities Fund may The Growth Fund may not invest in
not invest more than 15% of its net securities that are illiquid if, as a result,
assets in illiquid securities. Including more than 15% of its net assets would
(a) securities with legal or contractual consist of such securities, including
restrictions on resale (except in the repurchase agreements maturing in
case of securities issued pursuant to more than seven days, securities that
Rule 144A sold to qualifying are not readily marketable, and
institutional investors under special restricted securities not eligible for
rules adopted by the Securities and resale pursuant to Rule 144A under
Exchange Commission for which the 1933 Act; provided, however, that
the trustees of the Acquiring Trust the fund may invest all or part of its
determine the secondary market is investable assets in an open-end
liquid). (b) repurchase agreements investment company with substan-
maturing in more than seven days, tially the same investment objectives,
and (c) securities that are not policies and restrictions as the fund.
readily marketable. (nf) (nf)
- --------------------------------------------------------------------------------------------------------------------------
Purchases of Securities on Margin The Equity Opportunities Fund may The Growth Fund may not purchase
and Short Sales not purchase on margin. (F) securities on margin (but the Growth
Fund may obtain such short-term
The Equity Opportunities Fund may credits as may be necessary for the
not engage in short sales. (F) clearance of transactions); provided
that the deposit or payment of initial
or variation margin in connection
with options or future contracts is not
considered the purchase of securities
on margin. (F)
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Subject Matter of Restriction Equity Opportunities Fund Growth Fund
- ------------------------------- ----------------------------------------- ------------------------------------------------
<S> <C> <C>
The Growth Fund may not make
short sales of securities or maintain
a short position, unless at all times
when a short position is open, the
Growth Fund owns an equal amount
of the securities or securities con-
vertible into or exchangeable for,
without payment of any further
consideration, securities of the same
issue as, and equal in amount to, the
securities sold short. (nf)
- -------------------------------------------------------------------------------------------------------------------------
Unseasoned Issuers The Equity Opportunities Fund may No fundamental or non-fundamental
not purchase any security unless (a) restriction.
the issuer or its predecessor has had
a three-year record of continuous
operation during which it published
balance sheets and income state-
ments, (b) at the end of its last
fiscal year, the issuer or its pred-
ecessor reported gross receipts of
$1,000,000 and (c) the issuer or its
predecessor had an operating profit
for at least one fiscal year of the five
years immediately preceding. (F)
- ------------------------------------------------------------------------------------------------------------------------
Other Investment Companies The Equity Opportunities Fund may The Growth Fund may not purchase
not purchase any security of an a security of other investment
investment trust except for purchases companies, except when the purchase
in the open market where no com- is part of a plan of merger, consol-
mission or profit to or a sponsor or idation, reorganization acquisition or
dealer results from such purchases, except where such purchase would
other than a customary broker's not result in (a) more than 10% of
commission. (F) the Growth Fund's assets being
invested in securities of other
investment companies, (b) more than
3% of the total outstanding voting
securities of any one such investment
company being held by the Growth
Fund or (c) more than 5% of the
Growth Fund's assets being invested
in any one such investment company;
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Subject Matter of Restriction Equity Opportunities Fund Growth Fund
- ------------------------------- -------------------------------------- -----------------------------------------------
<S> <C> <C>
provided, however, that the fund may
invest all of its investable assets in
an open-end investment company
with substantially the same invest-
ment objectives, policies and
restrictions as the fund. (nf)
- ----------------------------------------------------------------------------------------------------------------------
Diversification The Equity Opportunities Fund may The Growth Fund may not, as to
not purchase any securities (other 75% of its total assets, purchase
than U.S. Government obligations) securities of an issuer (other than
if, as a result, more than 5% of the U.S. Government, its agencies,
the value of the total assets of the instrumentalities or authorities or
Equity Opportunities Fund would be repurchase agreements collateralized
invested in securities of a single by U.S. Government securities and
issuer. (F) other investment companies), if:
The Equity Opportunities Fund may (a) such purchase would cause
not purchase any security if, as a more than 5% of the Growth
result, more than 10% of any class Fund's total assets taken at
of securities or more than 10% of market value to be invested
the outstanding voting securities of in the securities of such
any issuer would be held. (F) securities of any issuer would
be 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 Growth Fund;
provided, however, that the
Growth Fund may, subject to
restrictions imposed by the
1940 Act and applicable state
laws, invest all or part of its
investable assets in an open-end
investment company with
substantially the same invest-
ment objectives, policies and
restrictions as the Growth
Fund. (F)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Subject Matter of Restriction Equity Opportunities Fund Growth Fund
- ------------------------------- --------------------------------------- ------------------------------------------------
<S> <C> <C>
Industry Concentration The Equity Opportunities Fund may The Growth Fund may not purchase
not invests more than 25% of its the securities of issuers conducting
total assets in any one industry or their principal activity in a single
group of industries. (F) industry if, immediately after such
purchase, the value of its investments
in such industry would exceed 25%
of its total assets taken at market
value at the time of such investment
(except investments in obligations of
the U.S. Government or any of its
agencies, ties); provided, however,
that the fund may invest all or part
of its investable assets in an open-
end investment company with
substantially the same investment
objectives, policies and restrictions
as the fund. (F)
- ----------------------------------------------------------------------------------------------------------------------
Oil & Gas and Commodity The Equity Opportunities Fund may The Growth Fund may not purchase
Contracts not invest in interests in oil, gas or interests in oil, gas, or other mineral
other mineral exploration develop- exploration programs or mineral
ment programs or leases. (nf) leases; however, this policy will not
prohibit the acquisition of securities
The Equity Opportunities Fund of companies engaged in the produc-
may not deal in commodities or tion or transmission of oil, gas or
commodities contracts. (F) other minerals. (nf)
The Growth Fund may not invest in
commodities, except that the fund
may purchase and sell options on
securities, securities indices and
currency, futures contracts on
securities, securities indices and
currency and options on such futures,
forward foreign currency exchange
contracts (including, foreign currency
warrants, principal exchange rated
linked securities, and performance
indexed paper), forward commit-
ments, securities index put or call
warrants and repurchase agreements
entered into in accordance with the
Growth Fund's investment policies,
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Subject Matter of Restriction Equity Opportunities Fund Growth Fund
- ------------------------------- ----------------------------------- -----------------------------------------------
<S> <C> <C>
subject to restrictions as may be set
forth elsewhere in the prospectus
or the statement of additional
information. (F)
- -------------------------------------------------------------------------------------------------------------------
Senior Securities The Equity Opportunities Fund may The Growth Fund may not issue
not issue senior securities. (F) senior securities, except as permitted
above. For purposes of this restriction,
the issuance of shares of beneficial
interest in multiple classes or series,
the purchase or sale of options, futures
contracts, forward commitments and
reverse repurchase agreements entered
into in accordance with the fund's
investment policies or within the
meaning of the borrowing restriction
described above, are not deemed to be
senior securities. (F)
- ------------------------------------------------------------------------------------------------------------------
Futures and Options No fundamental or non-fundamental The Growth Fund may not buy and
restriction. sell puts and calls on securities, stock
index futures or options on stock
index futures or financial futures or
options on financial futures if (a) the
aggregate premiums paid on all such
options which are held at any time
exceed 20% of the Growth Fund's
aggregate net assets and (b) the
aggregate margin deposits required
on all such futures or options thereon
held at any time exceed 5% of the
Growth Fund's total assets. (nf)
The Growth Fund may not write
(sell) options that are not "covered"
as described in its statement of
additional information or write puts
on securities if the aggregate value of
the obligations underlying the puts
exceeds 50% of the Growth Fund's
net assets. (nf)
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
Subject Matter of Restriction Equity Opportunities Fund Growth Fund
- --------------------------------- -------------------------------------- -------------------------------------------
<S> <C> <C>
The Growth Fund may not purchase
puts, calls, straddles, spreads, or any
combination thereof if by reason
thereof, the value of its aggregate
investment in such classes of
securities (other than protective puts)
will exceed 5% of its net assets. (nf)
- --------------------------------------------------------------------------------------------------------------------
Securities held by Trustees and The Equity Opportunities Fund may The Growth Fund may not purchase
Officers not purchase or retain any security or retain securities of an issuer if one
of an issuer if the trust officers, or more of the trustees or officers of
trustees or adviser, who individually the trust or principals or officers of
own beneficially more than 1/2 of the investment adviser, any subad-
1% of such issuer, together own viser or any investment management
more than 5% of such issuer's subsidiary of the investment adviser
securities. (nf) individually owns beneficially more
than 0.5% and together own benefi-
cially more than 5% of the securities
of such issuer. (nf)
- -------------------------------------------------------------------------------------------------------------------
Real Estate The Equity Opportunities Fund may The Growth Fund may not purchase
not deal in real estate (including or sell deal in real estate (including
real estate limited partnership) real estate real estate except that the
except that it may purchase Growth Fund may (a) acquire or lease
marketable securities of companies office space for its own use, (b) invest
that deal in real estate or interests in securities of issuers that invest
therein including real estate in real estate or interests therein, (c)
investment trusts. (F) invest in securities that are secured
by real estate or interests therein, (d)
purchase and sell mortgage-related
securities and (e) hold and sell real
estate acquired by the Growth Fund
as result of the ownership of
securities. (F)
- -------------------------------------------------------------------------------------------------------------------
Underwriting The Equity Opportunities Fund may The Growth Fund may not act as an
not underwrite the securities of underwriter with respect to the sec-
others. (F) urities of other issuers, except to the
extent that in connection with the
disposition of portfolio securities, the
Growth Fund may be deemed to be
an underwriter for purposes of the
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Subject Matter of Restriction Equity Opportunities Fund Growth Fund
- ------------------------------- -------------------------------------- ----------------------------------------
<S> <C> <C>
1933 Act; provided, however, that the
fund may invest all or part of its
investable assets in an open-end
investment company with substan-
tially the same investment objectives,
policies and restrictions as the
Growth Fund. (F)
Control The Equity Opportunities Fund may The Growth Fund may not invest for
not make an investment for the the purpose of exercising control over
purpose of exercising control or or management of any company;
management. (F) provided that the Growth Fund may
do so where it is deemed advisable to
protect or enhance the value of an
existing investment; and provided
further, that the Growth Fund may
invest all or part of its investable
assets in an open-end investment
company with substantially the same
investment objectives, policies and
restrictions as the Growth Fund. (nf)
- --------------------------------------------------------------------------------------------------------------
Warrants The Equity Opportunities Fund may The Growth Fund may not purchase
not invest more than 5% of its net warrants of any issuer, if, as a result
assets in warrants and stock rights, of such purchase, more than 2% of
valued at the lower of cost or the value of the Growth Fund's total
market, or more than 2% of its net assets would be invested in warrants
assets in warrants and stock rights that are not listed on the NYSE or
that are not listed on the New York American Stock Exchange or more
Stock Exchange or American Stock than 5% of the total assets of the
Exchange. (nf) Growth Fund, valued at the lower
of cost or current market value,
would be invested in warrants
generally, whether or not so listed.
Warrants acquired by the Growth
Fund in units with or attached to debt
securities shall be deemed to be
without value. (nf)
- -------------------------------------------------------------------------------------------------------------
Joint Account The Equity Opportunities Fund may The Growth Fund may not participate
not participate in any joint trading on a joint or joint-and-several basis
accounts. (F) in any securities trading account. The
"bunching" of orders for the sale or
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
Subject Matter of Restriction Equity Opportunities Fund Growth Fund
- ------------------------------- --------------------------- -----------------------------------------
<S> <C> <C>
purchase of marketable portfolio
securities with other accounts under the
management of the investment adviser
or any subadviser to save commissions
or to average prices among them is not
deemed to result in a joint securities
trading account. (nf)
- -----------------------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
COMPARATIVE INFORMATION ON DISTRIBUTION ARRANGEMENTS
Multiple Class Structure
The Growth Fund currently offers four classes of shares: Class A, Class B,
Class C and Class X shares. The Equity Opportunities Fund currently offers two
classes of shares: Class A and Class B shares. The Class A and Class B shares
of the Equity Opportunities Fund are offered to the public under the same sales
charge arrangements as the Class A and Class B shares of the Growth Fund. The
Equity Opportunities Fund does not currently offer Class C and Class X shares,
but will issue such classes to the Class C and Class X shareholders of the
Growth Fund, respectively, on the closing date of the reorganization.
In the proposed reorganization, you will receive the corresponding class
of shares of the Equity Opportunities Fund in exchange for your shares in the
Growth Fund. The reorganization will be effected at net asset value. No sales
charge will be imposed on your shares. For purposes of calculating the
contingent deferred sales charge that you may pay when you dispose of any
acquired Class B and Class C shares of the Equity Opportunities Fund, the
length of time you hold shares in the Equity Opportunities Fund will be added
to the length of time you hold shares in the Growth Fund. If you acquire Class
B and Class C shares as a result of the reorganization, you will continue to be
subject to a contingent deferred sales charge upon subsequent redemption to the
same extent as if you had continued to hold your shares of the Growth Fund.
The shares of the various classes are offered under the following
arrangements:
Class A Shares (currently offered by both funds)
o Are offered to the public at net asset value plus a maximum sales charge
of 4.75% of the offering price (4.99% of the amount invested). The sales
charge may be reduced or waived under certain conditions.
o Are not subject to any charges when redeemed.
o Have lower distribution and service fees (0.25%) and therefore pay higher
dividends than Class B and Class C shares.
Class B Shares (currently offered by both funds)
o Are offered to the public at the next determined net asset value after
receipt of the order with no sales charge at the time of purchase.
o Are subject to a sales charge of up to 5.00% of the shares' value if they
are redeemed within the first five years of purchase.
o Will automatically convert to Class A shares eight years after purchase.
o Have higher distribution and service fees (1.00%) and pay lower dividends
than Class A shares.
Class C Shares (currently offered by the Growth Fund only)
o Are offered to the public at the next determined net asset value after
receipt of the order with no sales charge at the time of purchase.
o Are subject to a sales charge of 1.00% if they are redeemed within the
first year after they are purchased.
o Have the same distribution and service fees (1.00%) as Class B shares and
therefor pay comparable dividends.
o Class C shares do not convert to any other class of shares of the fund.
25
<PAGE>
Class X Shares (currently offered by the Growth Fund only)
o Are offered primarily to institutional investors, such as pension and
profit sharing plans, other employee benefit trusts, investment advisers,
endowments, foundations and corporations.
o Are not subject to sales charges at any time.
o There are no distribution fees applicable to Class X Shares.
Distribution Plans
Phoenix Equity Planning Corporation serves as the distributor of shares
for both the Equity Opportunities Fund and the Growth Fund. The Acquiring Trust
has adopted separate amended and restated distribution plans under Rule 12b-1
of the 1940 Act for each class of shares relating to the sale and promotion of
Equity Opportunities Fund shares and the furnishing of shareholder services
(the "Acquiring Trust Class A Plan," the "Acquiring Trust Class B Plan" and the
"Acquiring Trust Class C Plan" and collectively, the "Acquiring Trust Plans").
Under the Acquiring Trust Class B Plan and the Acquiring Trust Class C
Plan, Phoenix Equity Planning Corporation is reimbursed monthly for actual
expenses of Phoenix Equity Planning Corporation up to 0.75% of the average
daily value of the net assets of Class B and Class C shares. In addition,
Phoenix Equity Planning Corporation is paid 0.25% annually of the average daily
net assets of each class of shares for providing services to the shareholders,
including assistance in connection with inquiries related to shareholder
accounts. Phoenix Equity Planning Corporation's distribution expenses from
selling and servicing Class B shares may be more than the payments received
from contingent deferred sales charges collected on redeemed shares and from
the Acquiring Trust under the Acquiring Trust Class B Plan. Those expenses may
be carried over and paid in future years. At September 30, 1999, Phoenix Equity
Planning Corporation had incurred unreimbursed expenses under the Acquiring
Trust Class B Plan of $553,186 with respect to the Equity Opportunities Fund.
The Trust has also adopted distribution plans pursuant to Rule 12b-1 on
behalf of the Class B and Class C shares of the Growth Fund, (the "Trust Class
B Plan" and "Trust Class C Plan," and collectively, the "Trust Plans"). Under
the Trust Class B Plan and the Trust Class C Plan, the Growth Fund reimburses
Phoenix Equity Planning Corporation monthly for actual expenses of Phoenix
Equity Planning Corporation up to 0.75% of the average daily net assets of the
Growth Fund's Class B and Class C shares. In addition, the Growth Fund pays
Phoenix Equity Planning Corporation 0.25% annually of the average daily net
assets of the Class A, Class B and Class C shares as compensation for providing
services to the shareholders, including assistance in connection with inquires
related to shareholder accounts. Phoenix Equity Planning Corporation's
distribution expenses from selling and servicing Class B shares may be more
than the payments received from contingent deferred sales charges collected on
redeemed shares and from the Trust under the Trust Class B Plan. Those expenses
may be carried over and paid in future years. At September 30, 1999, Phoenix
Equity Planning Corporation had incurred unreimbursed expenses under the Trust
Class B Plan of $151,199 with respect to the Growth Fund. As a result of the
Reorganization, the unreimbursed expenses incurred by Phoenix Equity Planning
Corporation in selling Class B shares of the Growth Fund will be subject to
reimbursement under the Acquiring Trust Class B Plan.
COMPARATIVE INFORMATION ON SHAREHOLDER SERVICES
Both the Equity Opportunities Fund and the Growth Fund offer the same
shareholder services, including a Systematic Withdrawal Program, telephone
exchanges, telephone redemptions and access to the Investo-Matic Program, an
automatic investment program.
26
<PAGE>
The Equity Opportunities Fund distributes net investment income
semi-annually, and distributes net realized capital gains, if any, at least
annually. The Growth Fund distributes net investment income annually, and
distributes net realized capital gains, if any, at least annually. All
dividends and distributions with respect to the shares of the Equity
Opportunities Fund and the Growth Fund are paid in additional shares of the
respective fund unless shareholders elect to receive cash. The number of shares
received in connection with any reinvestment of dividends will be based upon
the net asset value per share of the applicable class of shares of the Equity
Opportunities Fund and the Growth Fund in effect on the record date.
The Equity Opportunities Fund and the Growth Fund currently offer
shareholders identical exchange privileges. Shareholders of the Equity
Opportunities Fund and the Growth Fund may exchange their shares for shares of
a corresponding class of shares of other affiliated Phoenix funds, except for
the mutual funds of the Phoenix-Zweig Trust and Phoenix-Euclid Funds.
Shares of the Equity Opportunities Fund and the Growth 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 Class B shares
redemptions for the Equity Opportunities Fund or Class B and Class C shares
redemptions for the Growth Fund, investors will be subject to the applicable
determined deferred sales charges, if any, for such shares. Payment of
redemption proceeds for redeemed Equity Opportunities Fund and Growth Fund
shares are made within seven days after receipt of a redemption request in
proper form and documentation.
Because both the Equity Opportunities Fund and the Growth Fund offer the
same shareholder services, after the closing the same services will continue to
be available to the shareholders of the Growth Fund but in their capacity as
shareholders of the Equity Opportunities Fund.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
The following is a summary of certain provisions of the Declarations of
Trust of the Equity Opportunities Fund and the Growth Fund.
Form of Organization
The Equity Opportunities Fund is a series of the Phoenix Strategic Equity
Series Fund, an unincorporated voluntary association organized under the laws
of the Commonwealth of Massachusetts as a business trust, pursuant to a
Declaration of Trust dated June 25, 1986, as amended. The operations of the
Equity Opportunities Fund are governed by its Declaration of Trust and by
Massachusetts law. The Growth Fund is a series of the Phoenix-Seneca Funds, an
unincorporated voluntary association organized under the laws of the State of
Delaware as a business trust, pursuant to an Agreement and Declaration of Trust
dated December 1, 1995, as amended. The operations of the Growth Fund are
governed by its Agreement and Declaration of Trust and by Delaware law. Both
the Phoenix Strategic Equity Series Fund and the Phoenix-Seneca Funds are
registered with the SEC as open-end management investment companies and are
subject to the provisions of the 1940 Act and the rules and regulations of the
SEC thereunder.
Shares
Each Declaration of Trust authorizes the Trustees to create an unlimited
number of series in each trust. Within each series, the Trustees may create an
unlimited number of classes, each with an unlimited number of full and
fractional shares. The Phoenix Strategic Equity Series Fund currently has three
series outstanding: the Phoenix-Engemann Small Cap Fund, the Phoenix-Seneca
Equity Opportunities Fund and the Phoenix-Seneca Strategic Theme Fund. The
Phoenix-Seneca Funds trust currently has four series outstanding: the
Phoenix-Seneca Bond Fund, the Phoenix-Seneca Growth Fund, the
27
<PAGE>
Phoenix-Seneca Mid-Cap "EDGE" Fund, and the Phoenix-Seneca Real Estate
Securities Fund. In addition to the currently existing series, each trust may
organize other series in the future.
The Equity Opportunities Fund currently offers Class A and Class B shares.
The Growth Fund offers Class A, Class B, Class C and Class X shares. When
issued, the shares are fully paid and non-assessable, have no preference,
preemptive or similar rights unless designated by the Trustees, and are freely
transferable. The assets and proceeds received by each trust from the issue or
sale of shares of a series or class are allocated to that series and class and
constitute the rights of that series or class, subject only to the rights of
creditors. Any underlying assets of a series or class are required to be
segregated on the books of account of the trusts. These assets are to be used
to pay the expenses of the series or class as well as a share of the general
expenses of each relevant trust.
Meetings
A majority of the Trustees of the Equity Opportunities Fund may call
shareholder meetings at any time. Trustees shall call meetings upon the written
request of shareholders holding at least ten percent of the outstanding shares
having voting rights. Generally, the presence of holders of one-third of the
outstanding shares, in person or by proxy, constitutes a quorum at a
shareholder meeting.
The Trustees or President of the Growth Fund may call shareholder meetings
as necessary. To the extent required by the 1940 Act, meetings held for the
purpose of voting on the removal of any trustee shall be called by trustees
upon written request by shareholders holding at least ten percent of the
outstanding shares entitled to vote. Generally, one-third of the shares
entitled to vote constitutes a quorum at a shareholder meeting.
Shareholder Liability
Unlike the stockholders of a corporation, under certain circumstances
shareholders of a business trust may be held personally liable for the debts,
claims or other obligations of a business trust. However, the trust documents
of both the Equity Opportunities Fund and the Growth Fund limit shareholder
liability.
The Equity Opportunities Fund's Declaration of Trust provides that
shareholders shall not be subject to any personal liability whatsoever in
connection with trust property or for the acts, obligations or affairs of the
trust. The trust will indemnify shareholders for all claims and liabilities to
which they become subject by reason of being a shareholder.
The Growth Fund's Declaration of Trust specifies that a shareholder shall
be indemnified for claims relating to the shareholder's status as a
shareholder, and not because of the shareholder's acts or omissions. Such
indemnification will come out of the assets of the class of shares held by the
shareholder from which the claim arose.
Liability of Trustees
Each Declaration of Trust provides that trustees will generally be
personally liable only for willful misfeasance, bad faith, gross negligence or
reckless disregard of duties. Under the Declaration of Trust of the Equity
Opportunities Fund, a trustee will not be personally liable in connection with
trust property, the affairs of the trust or the actions of the trustee, unless
the trustee acted in bad faith or with willful misfeasance, gross negligence or
reckless disregard of the trustee's duties. The trust may purchase insurance
for trustees to cover potential liabilities and will generally indemnify a
trustee against such claims. The trust may also advance payments to a trustee
in connection with indemnification.
Under the Declaration of Trust of the Growth Fund, the trust will
indemnify a trustee against liabilities, unless the trustee is liable because
of willful misfeasance, bad faith, gross negligence or reckless disregard of
the trustee's duties. The trust may purchase insurance for a trustee to provide
indemnification and also may advance money to the trustee for the expenses of
proceedings.
28
<PAGE>
Voting Requirements
Each shareholder of the Equity Opportunities Fund is entitled to vote on
any matter required to be submitted to shareholders. Shareholders are entitled
to one vote for each whole share held and a fractional portion of one vote for
each fractional share held.
Each shareholder of the Growth Fund shall be entitled to one vote for each
dollar of net asset value (determined as of the applicable record date) of each
share owned by the shareholder (the number of shares owned times net asset
value per share) on any matter on which such shareholder is entitled to vote.
Each fractional dollar amount shall be entitled to a proportionate fractional
vote.
Liquidation or Dissolution
In the event of the liquidation or dissolution of either fund, the
Trustees shall distribute the assets of the trust to the shareholders,
according to their respective rights, after accounting for the liabilities of
the trust.
FISCAL YEAR
The Equity Opportunities Fund operates on a fiscal year which ends April
30. The Growth Fund operates on a fiscal year which ends September 30.
MANAGEMENT AND OTHER SERVICE PROVIDERS
Responsibility for the overall supervision of the Equity Opportunities
Fund rests with the Phoenix Strategic Equity Series Fund's Board of Trustees.
Responsibility for the overall supervision of the Growth Fund rests with the
Phoenix-Seneca Fund's Board of Trustees. Phoenix Investment Counsel serves as
investment adviser to both funds. Seneca Capital Management serves as
investment subadviser to both funds.
Investment and trading decisions for each fund are made by a team of
managers and analysts. The team leaders for each fund are primarily responsible
for the day-to-day decisions related to that fund. The team leader of any one
fund may be on another fund team. The team leaders for the Equity Opportunities
Fund are Gail P. Seneca, Richard D. Little and Ronald K. Jacks. The team
leaders for the Growth Fund are Gail P. Seneca and Richard D. Little.
Ms. Seneca has been the Chief Executive and Investment Officer of Seneca,
or its predecessor firm GMG/Seneca Capital Management L.P., since November
1989. From October 1987 until October 1989, she was Senior Vice President of
the Asset Management Division of Wells Fargo Bank. From October 1983 to
September 1987, she was Investment Strategist and Portfolio Manager for Chase
Lincoln Bank, heading the fixed income division.
Mr. Little has been Director of Equities with Seneca or GMG/Seneca since
December 1989. Before he joined GMG/
Seneca, Mr. Little held positions as an analyst, board member, and regional
manager with Smith Barney, NatWest Securities, and Montgomery Securities.
Mr. Jacks was Secretary of the Phoenix-Seneca Funds from February 1996
through February 1998. Mr. Jacks was a Trustee of Seneca Funds from February
1996 through June 1997. Mr. Jacks has been a Portfolio Manager with Seneca or
GMG/Seneca since July 1990.
Phoenix Equity Planning Corporation serves as administrative agent of the
Equity Opportunities Fund and the Growth Fund and, as such, performs
administrative, bookkeeping and pricing functions. Phoenix Equity Planning
Corporation also acts as transfer agent for the Equity Opportunities Fund and
the Growth Fund.
29
<PAGE>
State Street Bank and Trust Company serves as custodian of each fund.
PricewaterhouseCoopers LLP serve as independent accountants for both the
Equity Opportunities Fund and the Growth Fund.
VOTING INFORMATION
Quorum and Voting Requirements
This Prospectus/Proxy Statement is being furnished to the shareholders of
the Growth Fund in connection with the solicitation by the Board of Trustees of
Phoenix-Seneca Funds of proxies to be used at the meeting.
Shareholders of record of the Growth Fund at the close of business on
February 28, 2000 will be entitled to vote at the meeting or at any
adjournments thereof. As of the record date, there were 1,860,408.939,
1,978,763.007, 432,123.366 and 361,192.631 issued and outstanding Class X,
Class A, Class B and Class C shares, respectively, of the Growth Fund.
Shareholders are entitled to one vote for each dollar of net asset value
(determined as of the record date) of each share owned by such shareholder
(number of shares owned times net asset value per share) and each fractional
dollar amount shall be entitled to a proportionate fractional vote.
Shareholders of the Growth Fund will vote together as a single class on the
reorganization proposal. The holders of thirty-three and one-third percent
(33-1/3%) of the shares 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 entitled to vote of the Growth
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
Growth 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 reorganization proposal have not
been obtained, then the persons named as proxies may propose one or more
adjournments of the meeting without further notice to shareholders to permit
further solicitation of proxies provided such persons determine, after
consideration of all relevant factors, including the nature of the proposal,
the percentage of votes then cast, the percentage of negative votes then cast,
the nature of the proposed solicitation activities and the nature of the
reasons for such further solicitation, that an adjournment and additional
solicitation is reasonable and in the interests of shareholders. The persons
named as proxies will vote those proxies that such persons are required to vote
FOR the reorganization 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 or place, notice need not be given
of the adjourned meeting at which the adjournment is taken, unless a new record
date of the adjourned meeting is fixed or unless the adjournment is for more
than sixty (60) days from the date set for the original meeting, in which case
the Trustees shall set a new record date. Notice of any such adjourned meeting
shall be given to each Shareholder of record entitled to vote at the adjourned
meeting in accordance with the provisions of the By-Laws of Phoenix-Seneca
Funds. At any adjourned meeting, the Trust may transact any business which
might have been transacted at the original meeting.
30
<PAGE>
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 Trustees of the Trust is not aware of any
other matters to come before the meeting.
Approval of the reorganization proposal by the shareholders of the Growth
Fund is a condition of the consummation of the reorganization. If the
reorganization is not approved, the Growth Fund will continue as a series of
the Trust and the Board of Trustees of the Trust may consider other
alternatives in the best interests of the shareholders of the Growth Fund.
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 Trust
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.
No Appraisal Rights
The staff of the SEC has taken the position that any rights to appraisal
arising under state law are preempted by the provisions of the 1940 Act and
Rule 22c-1 thereunder, which 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 solicitation of proxies by mail, officers of the Trust and
officers and regular employees of Phoenix Investment Counsel, affiliates of
Phoenix Investment Counsel, or other representatives of the Trust may also
solicit proxies by telephone or telegram or in person. The Trust may also use a
proxy solicitation firm to assist with the mailing and tabulation effort and
any special, personal solicitation of proxies.
Shareholders of the Growth Fund may be asked by the proxy solicitor's
representatives to cast their votes by authorizing the execution of a proxy by
telephone. Shareholders will either be contacted by a representative of the
proxy solicitor using information derived from a shareholder list provided by
the Trust or shareholders may be sent a written communication or left a
telephone message asking the shareholder to telephone the solicitor at a
designated toll-free number. In all such cases, the representative of the
solicitor will ask for the shareholder's full name and address, the last four
digits of the shareholder's social security number or employer identification
number, the person's title (in the case of a corporate shareholder) and
confirmation that the person is authorized to direct the voting of the shares.
The shareholder will be asked to confirm that the Prospectus/Proxy Statement
and proxy form have been received. If answered in the affirmative, the
solicitor representative will advise the shareholder that the shareholder may
authorize the execution of a proxy over the telephone and ask the shareholder
if the shareholder desires to authorize the execution of a proxy at that time.
Telephone conversations will be recorded. If the shareholder chooses to
proceed, the representative of the solicitor will then ask the shareholder if
the shareholder wishes to support the reorganization proposal. If answered in
the affirmative, the solicitor will read the reorganization proposal to the
shareholder and ask for such shareholder's voting instruction on the
reorganization proposal.
31
<PAGE>
Although the representative of the solicitor will assist with any
questions, the answers to which are contained in the Proxy Statement, the
representative of the solicitor will not make recommendations on how to vote on
the reorganization proposal. Finally, the representative of the solicitor will
explain that the solicitor will execute a written proxy as the shareholder's
agent in accordance with the shareholder's instructions and will forward the
proxy to the Trust. Within 72 hours after each telephone call, the solicitor
will send to each shareholder who used the telephone proxy voting method a
written confirmation of the shareholder's instructions. The shareholder will be
asked to contact the solicitor immediately if the shareholder's instructions
have not been recorded properly.
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 Prospectus/Proxy Statement or attend
the meeting in person.
The costs of the meeting, such as the preparation and mailing of the
notice, the Prospectus/Proxy Statement and the proxy, and the solicitation of
proxies, including reimbursement to persons who forward proxy materials to
their clients, and the expenses connected with the solicitation of these
proxies in person, by telephone, or by telegraph, will be borne by Phoenix
Investment Partners. The costs of any additional solicitation and of any
adjourned session of the meeting will be borne by Phoenix Investment Partners.
Phoenix Investment Partners will reimburse banks, brokers, and other persons
holding Growth Fund shares registered in their names or in the names of their
nominees, for their expenses incurred in sending proxy material to and
obtaining proxies from the beneficial owners of such Growth Fund shares. D.F.
King, a proxy solicitation firm, has been engaged by Phoenix Investment
Partners, to act as solicitor and will receive fees estimated at $8,000, plus
reimbursement of out-of-pocket expenses.
Ownership of Voting Securities
Based on holdings and total shares outstanding as of February 10, 2000,
the Trustees and officers of the Trust owned as a group less than 1% of the
outstanding voting securities of the Growth Fund. If the reorganization were
consummated as of February 10, 2000, the Trustees and officers of the Trust
would own less than 1% of the outstanding voting securities of the combined
Equity Opportunities Fund based on their holdings and total shares outstanding
as of February 10, 2000.
The following table contains information about all persons who own
beneficially or of record 5% or more of the outstanding shares of the Growth
Fund, Equity Opportunities Fund, or the combined Equity Opportunities Fund
assuming consummation of the reorganization, based on holdings and total shares
outstanding as of February 28, 2000.
<TABLE>
<CAPTION>
Percent of Percent of
Growth Percent of Equity Combined Equity
Fund/Class Opportunities Opportunities
Name and Address of Shareholder Owned Fund/Class Owned Fund/Class Owned
- ------------------------------------- ------------------- ------------------- -----------------
<S> <C> <C> <C>
Bank of New York Custodian FBO Amer.
Fed. Of Mus. & Employer Pen. Fund
Amivest Corp. Dis. Inv. Mgr.
1 Wall Street, Floor 2
New York, NY 01005-2501 25.42% of Class A None 3.90% of Class A
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Percent of Percent of
Growth Percent of Equity Combined Equity
Fund/Class Opportunities Opportunities
Name and Address of Shareholder Owned Fund/Class Owned Fund/Class Owned
- ----------------------------------------- ------------------- ------------------- ------------------
<S> <C> <C> <C>
Bank of New York Custodian Annuity
Fund of Local One IATSE Amivest Corp.
Discretionary Investment Mgr. 717 Master
Tr/Cust Dept.
1 Wall Street, Floor 2
New York, NY 01005-2501 7.05% of Class A None 1.08% of Class A
NFSC FEBO Amalg. Bank of NY Cust
UFCW LCL 50 Pension Plan
Amivest Corp. Disc. Invt. Mngr.
11015 Union Square
New York, NY 10459-3792 5.05% of Class A None 0.77% of Class A
MLPF&S for the Sole Benefit of
its Customers
Attn: Fund Administration
4800 Deer Lake Drive E., 3rd Fl.
Jacksonville, FL 32246-6484 14.58% of Class B 8.87% of Class B 13.74% of Class B
MLPF&S for the Sole Benefit of
its Customers
Attn: Fund Administration
4800 Deer Lake Drive E., 3rd Fl.
Jacksonville, FL 32246-6484 9.45% of Class C N/A 9.45% of Class C
Robert A. Swanson TTEE
Robert A. Swanson Charitable
Remainder Trust
C/o K&E Management Ltd
400 S. El Camino Real Ste. 1289
San Mateo, CA 94104-4122 10.11% of Class X N/A 10.11% of Class X
Charles Schwab & Co., Inc.
Reinvest Account
Attn: Mutual Fund Dept.
101 Montgomery St.
San Francisco, CA 94104-4122 6.22% of Class X N/A 6.22% of Class X
Phoenix Investment Counsel
100 Bright Meadow Blvd.
Enfield, CT 05082-1957 None 7.99% of Class B 2.15% of Class B
</TABLE>
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES OF
THE TRUST, RECOMMEND YOU APPROVE THE PLAN OF REORGANIZATION.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE FILL IN, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS NECESSARY IF IT IS MAILED IN THE UNITED STATES.
33
<PAGE>
ADDITIONAL INFORMATION ABOUT THE FUNDS
Additional information about the Equity Opportunities Fund and the
Acquiring Trust is included in the Equity Opportunities Fund's Prospectus
accompanying this document and is incorporated by reference herein. Further
information about the Equity Opportunities Fund and the Acquiring Trust is
included in the Statement of Additional Information for the Equity
Opportunities Fund, dated August 27, 1999, which has been filed with the SEC
and is incorporated by reference herein. A copy of the Equity Opportunities
Fund's Statement of Additional Information may be obtained without charge by
contacting Phoenix Equity Planning Corporation at 100 Bright Meadow Boulevard,
Post Office Box 2200, Enfield, Connecticut 06083-2200, or by telephoning
Phoenix Equity Planning Corporation toll-free at 1-800-243-4361.
Additional information about the Growth Fund is included in the current
Prospectus of the Growth Fund dated January 28, 2000. A copy of the Growth
Fund's Prospectus has been filed with the SEC, and is incorporated by reference
herein. Further information about the Growth Fund is included in the Statement
of Additional Information for the Growth Fund dated January 28, 2000, which
also has been filed with the SEC and is incorporated by reference herein. A
copy of the Growth Fund's Prospectus and Statement of Additional Information
may be obtained without charge by contacting Phoenix Equity Planning
Corporation at 100 Bright Meadow Boulevard, Post Office Box 2200, Enfield,
Connecticut 06083-2200, or by telephoning Phoenix Equity Planning Corporation
toll-free at 1-800-243-4361.
MISCELLANEOUS
Available Information
The Acquiring Trust and the Trust are each registered under the 1940 Act
and are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended, and the 1940 Act, and, in accordance therewith, files
reports, proxy materials, and other information with the SEC. Such reports,
proxy materials, and other information can be inspected at the Securities and
Exchange Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 as well as at the following regional offices: New York Regional
Office, 75 Park Place, Room 1228, New York, NY 10007; and Chicago Regional
Office, Northwestern Atrium Center, 500 Madison Street, Suite 1400, Chicago, IL
60661. Copies of such material also can be obtained from the Public Relations
Branch, Office of Consumer Affairs and Information Services, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The SEC maintains a Web Site (http://www.sec.gov) that
contains this Prospectus, Statement of Additional Information, material
incorporated by reference, and other information regarding registrants that
file electronically with the SEC.
Management's Discussion of the Equity Opportunities Fund's Performance for the
Year Ended April 30, 1999
The Equity Opportunities Fund seeks long-term capital appreciation by
investing primarily in stocks of dynamic, rapidly growing companies and
focusing on strong relative earnings growth. The Equity Opportunities Fund may
invest in smaller capitalization companies, and investors should note that
small-company investing involves added risks, including greater price
volatility, less liquidity and increased competitive threat.
For the 12 months ended April 30, 1999, Class A shares of the Equity
Opportunities Fund returned 17.08% and Class B shares returned 16.18%, far
surpassing the negative (3.77)% return of the Equity Opportunities Fund's
benchmark, the Russell 2000 Growth Index. All performance figures assume
reinvestment of distributions and exclude the effect of sales charges.
This has been an extremely volatile time for the market, spurred by the
recent global liquidity crises. It has also been a market with very narrow
leadership. A few of the very largest growth stocks have been responsible for
virtually all of the market's gains. Issue selection has been critical. The
Equity Opportunities Fund benefited from good stock pick-
34
<PAGE>
ing and the largest holdings generally performed well. Companies that reported
strong earnings were rewarded, while those that missed their forecasted
earnings estimates by even the smallest amount were severely punished.
It seems the ".com" craze has reached new heights. As of April 30, 1999,
the market capitalization of America Online exceeded that of IBM. The value of
Priceline.com, which sells airline tickets online, was higher than the market
valuation of most U.S. airlines. eBay, an online auctioneer with a three-year
history, was worth 11 times the value of 250-year-old Sothebey's. The Equity
Opportunities Fund's portfolio management team does not know of a valuation
metric or analytic framework, which can explain these outcomes.
The Equity Opportunities Fund's portfolio management team expects the
Internet bubble will deflate as the exciting promise of this technology gives
way to the more sober reality of managing profitable businesses. Only time will
distinguish the few genuine contenders in this highly competitive field.
Non-speculative Internet investing is possible. MCI WorldCom, Cisco and many
others are going concerns with major Internet involvement.
The recent market turbulence will probably plague investors throughout
1999. Periods of euphoria are likely to alternate with periods of despair. The
Equity Opportunities Fund's portfolio management team believes that investors
who persevere will be rewarded with solid returns, but not the stellar returns
of the past few years. Overall earnings growth is modest, valuations cannot
rise sharply from their already lofty levels, and stock prices currently
reflect very optimistic growth expectations. Fortunately, there are many
opportunities that have not yet been fully exploited.
Phoenix-Seneca Equity Opportunities Fund
Average Annual Total Returns(1) Periods Ending 4/30/99
<TABLE>
<CAPTION>
Inception Inception
1 Year 5 Years 10 Years to 4/30/99 Dates
---------- --------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Class A Shares at NAV(2) 17.08% 16.62% 13.33% -- --
Class A Shares at POP(3) 11.52 15.49 12.78 -- --
Class B Shares at NAV(2) 16.18 -- -- 16.57% 7/19/94
Class B Shares with CDSC(4) 12.34 -- -- 16.34 7/19/94
Russell 2000 Growth Index(5) (3.77) 12.62 10.96 14.29 7/19/94
</TABLE>
- ----------------
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for Class B shares decline from 5% to 0%
over a five year period.
(5) The Russell 2000 Growth Index is a measure of small-capitalization growth-
oriented stock total return performance. The index's performance does not
reflect sales charges.
35
<PAGE>
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an investment
will fluctuate so that an investor's shares, when redeemed, may be worth more
or less than their original cost.
Growth of $10,000
Periods Ending 4/30
<TABLE>
<CAPTION>
Phoenix Equity
Opportunities Russell 2000
Fund Class A(1) Growth Index(2)
----------------- ----------------
<S> <C> <C>
1989 $ 9,525.00 $10,000.00
1990 $10,204.33 $10,064.42
1991 $11,445.07 $11,351.92
1992 $12,623.50 $12,875.14
1993 $14,706.64 $13,634.65
1994 $15,440.08 $15,616.56
1995 $16,855.16 $16,979.94
1996 $22,393.87 $23,662.09
1997 $19,663.45 $20,457.24
1998 $28,444.92 $29,397.14
1999 $33,304.73 $28,287.82
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made
on 4/30/89 in Class A shares and reflects the maximum sales charge of 4.75% on
the initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less than
that shown based on differences in inception dates, fees and sales charges.
Sector Weightings as of 4/30/99
As a percentage of equity holdings:
<TABLE>
<S> <C>
Technology 30%
Financials 16
Consumer Cyclicals 12
Capital Goods 11
Consumer Staples 10
Communication Services 6
Health Care 5
Other 10
</TABLE>
- ----------------
(1) This chart illustrates POP returns on Class A Shares for ten years. Returns
on Class B Shares will vary due to differing sales charges.
(2) The Russell 2000 Growth Index is a measure of small-capitalization
growth-oriented stock total return performance. The index's performance
does not reflect sales charges.
36
<PAGE>
Phoenix-Seneca Equity Opportunities Fund
TEN LARGEST HOLDINGS AT APRIL 30, 1999 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<S> <C> <C>
1. Microsoft Corp. 4.8%
WORLD'S LEADING COMPUTER SOFTWARE COMPANY
2. Mellon Bank Corp. 4.2%
LARGE REGIONAL BANK
3. Motorola, Inc. 4.0%
GLOBAL PROVIDER OF INTEGRATED COMMUNICATIONS PRODUCTS
4. Citigroup, Inc. 3.9%
DIVERSIFIED FINANCIAL SERVICES HOLDING COMPANY
5. Morgan Stanley Dean Witter & Co. 3.9%
PROVIDES A BROAD RANGE OF CREDIT AND INVESTMENT PRODUCTS TO INDIVIDUALS
6. Sun Microsystems, Inc. 3.6%
SUPPLIER OF ENTERPRISE NETWORK COMPUTING PRODUCTS
7. General Electric Co. 3.6%
DIVERSIFIED MANUFACTURING AND FINANCIAL SERVICES PROVIDER
8. International Business Machines Corp. 3.5%
PROVIDES ADVANCED INFORMATION TECHNOLOGIES
9. Bristol-Myers Squibb Co. 3.4%
COMPREHENSIVE HEALTH-CARE COMPANY
10. Lucent Technologies, Inc. 3.4%
LEADING SUPPLIER OF TELECOMMUNICATIONS EQUIPMENT
</TABLE>
Legal Matters
Certain legal matters in connection with the issuance of the shares of the
Equity Opportunities Fund will be passed upon by Goodwin, Procter & Hoar LLP.
Additional Financial Information
The table set forth below presents certain financial information for the
Equity Opportunities Fund. The financial highlights for the year ended April
30, 1999 are derived from the Equity Opportunities Fund's audited financial
statements for the year ended April 30, 1999. The data should be read in
conjunction with the audited financial statements and related notes, which are
included in the Statement of Additional Information related to this
Prospectus/Proxy Statement. The financial highlights for the six months ended
October 31, 1999 are unaudited. The financial highlights for the Equity
Opportunities Fund for prior periods are contained in the Equity Opportunities
Fund's Prospectus, and the financial statements for the Equity Opportunities
Fund for prior periods are contained in the Acquiring Trust's Annual Report to
Shareholders which are included in the Statement of Additional Information
related to this Prospectus Proxy/Statement.
37
<PAGE>
EQUITY OPPORTUNITIES FUND
Financial Highlights
(Selected data for Shares outstanding throughout the indicated Period)
<TABLE>
<CAPTION>
Year Ended April 30, 1999
------------------------------------
Class A Class B
----------------- ----------------
<S> <C> <C>
Net asset value, beginning of period $ 8.04 $ 7.80
Income from investment operations
Net investment income (loss) (0.02)(2) (0.08)(2)
Net realized and unrealized gain (loss) 1.33 1.28
---------- --------
Total from investment operations 1.31 1.20
---------- --------
Less distributions
Dividends from net investment income -- --
Dividends from net realized gains (0.63) (0.63)
In excess of accumulated net realized gains -- --
---------- --------
Total distributions (0.63) (0.63)
---------- --------
Change in net asset value 0.68 0.57
---------- --------
Net asset value, end of period $ 8.72 $ 8.37
========== ========
Total return(1) 17.08% 16.18%
Ratios/supplemental data:
Net assets, end of period (thousands) $201,789 $ 2,677
Ratio to average net assets of:
Expenses 1.24%(3) 1.99%(3)
Net investment income (loss) (0.21)% (0.97)%
Portfolio turnover rate 143% 143%
</TABLE>
- ----------------
(1) Maximum sales charge is not reflected in total return calculation.
(2) Computed using average shares outstanding.
(3) For the year ended April 30, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
38
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended October 31, 1999
(Unaudited)
--------------------------------------
Class A Class B
----------------- ------------------
<S> <C> <C>
Net asset value, beginning of period $ 8.72 $ 8.37
Income from investment operations(5)
Net investment income (loss) (0.01)(4) ( 0.05)(4)
Net realized and unrealized gain (loss) 1.21 1.17
----------- ---------
Total from investment operations 1.20 1.12
----------- ---------
Less distributions
Dividends from net investment income -- --
Dividends from net realized gains (0.36) ( 0.36)
In excess of net investment income -- --
Tax return of capital -- --
Total distributions (0.36) ( 0.36)
Change in net asset value 0.84 0.76
----------- ---------
Net asset value, end of period $ 9.56 $ 9.13
=========== =========
Total return(1) 14.20%(3) 13.84%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $ 220,832 $ 3,083
Ratio to average net assets of:
Operating expenses 1.23%(2) 1.98%(2)
Net investment income (loss) (0.32)%(2) ( 1.06)%(2)
Portfolio turnover 67%(3) 67%(3)
</TABLE>
- ----------------
(1) Maximum sales charge is not reflected in total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) For the year ended April 30, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
OTHER BUSINESS
The Board of Trustees of the Trust knows of no business to be brought
before the meeting other than the matters set forth in this Prospectus/Proxy
Statement. Should any other matter requiring a vote of Growth Fund's
shareholders arise, however, the proxies will vote thereon according to their
best judgment in the interests of the Growth Fund and the shareholders of the
Growth Fund.
39
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this 17th day of November, 1999, by and between PHOENIX STRATEGIC EQUITY SERIES
FUND (the "Strategic Equity Series Trust"), a Massachusetts business trust with
its principal place of business at 101 Munson Street, Greenfield, Massachusetts
01301, on behalf of the Phoenix Equity Opportunities Fund, a portfolio series
thereof (the "Acquiring Fund") and THE PHOENIX-SENECA FUNDS (the
"Phoenix-Seneca Trust"), a Delaware business trust with its principal place of
business at 909 Montgomery Street, San Francisco, California 94133, on behalf
of the Phoenix-Seneca Growth Fund, a portfolio series thereof (the "Acquired
Fund").
All references in this Agreement to action taken by the Acquiring Fund or
the Acquired Fund shall be deemed to refer to action taken by the Strategic
Equity Series Trust or the Phoenix-Seneca Trust, on behalf of the respective
portfolio series.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization (the "Reorganization") will consist of the transfer by the
Acquired Fund of all or substantially all of the assets of the Acquired Fund to
the Acquiring Fund, in exchange solely for Class A, Class B, Class C and Class
X shares of beneficial interest in the Acquiring Fund (the "Acquiring Fund
Shares"), the assumption by the Acquiring Fund of all the liabilities of the
Acquired Fund, and the distribution of the Acquiring Fund Shares to the
shareholders of the Acquired Fund in complete liquidation of the Acquired Fund
as provided herein, all upon the terms and conditions hereinafter set forth in
this Agreement.
WHEREAS, the Strategic Equity Series Trust and the Phoenix-Seneca Trust
are each open-end, registered investment companies of the management type;
WHEREAS, the Board of Trustees of the Strategic Equity Series Trust has
determined that the exchange of all or substantially all of the assets of the
Acquired Fund for Acquiring Fund Shares and the assumption of all the
liabilities of the Acquired Fund by the Acquiring Fund is in the best interests
of the Acquiring Fund and that the interests of the existing shareholders of
the Acquiring Fund would not be diluted as a result of this transaction; and
WHEREAS, the Board of Trustees of the Phoenix-Seneca Trust has determined
that the exchange of all or substantially all of the assets of the Acquired
Fund for Acquiring Fund Shares and the assumption of all the liabilities of the
Acquired Fund by the Acquiring Fund is in the best interests of the Acquired
Fund and that the interests of the existing shareholders of the Acquired Fund
would 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. THE TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING
FUND SHARES, THE ASSUMPTION OF ALL THE LIABILITIES OF THE ACQUIRED FUND AND
THE LIQUIDATION OF THE ACQUIRED FUND
1.1 Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Acquired Fund
agrees to transfer all or substantially all of the Acquired Fund's assets, as
set forth in paragraph 1.2, to the Acquiring Fund, and the Acquiring Fund
agrees in exchange therefor: (i) to deliver to the Acquired
A-1
<PAGE>
Fund the number of full and fractional Acquiring Fund Shares, computed in the
manner and as of the time and date set forth in Article 2 and (ii) to assume
all the liabilities of the Acquired Fund, as set forth in paragraph 1.3. Such
transactions shall take place at the closing provided for in paragraph 3.1 (the
"Closing").
1.2 The assets of the Acquired Fund to be acquired by the Acquiring 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 Acquired Fund and any deferred or prepaid
expenses shown as an asset on the books of the Acquired Fund on the closing
date provided in paragraph 3.1 (the "Closing Date").
1.3 The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Acquiring Fund shall
assume all liabilities, expenses, costs, charges and reserves reflected on an
unaudited statement of assets and liabilities of the Acquired Fund, prepared by
Phoenix Equity Planning Corporation, in its capacity as financial agent for the
Acquired Fund as of the Valuation Date (as defined in paragraph 2.1) in
accordance with generally accepted accounting principles consistently applied
from the prior audited period.
1.4 Immediately after the transfer of assets provided for in paragraph
1.1, the Acquired Fund will distribute pro rata to the Acquired Fund's
shareholders of record, determined as of immediately after the close of
business on the Closing Date (the "Acquired Fund Shareholders"), the Acquiring
Fund Shares received by the Acquired Fund pursuant to paragraph 1.1 and will
completely liquidate. Such distribution and liquidation will be accomplished by
the transfer of the Acquiring Fund Shares then credited to the account of the
Acquired Fund on the books of the Acquiring Fund to open accounts on the share
records of the Acquiring Fund in the names of the Acquired Fund Shareholders
and representing the respective pro rata number of the Acquiring Fund Shares of
the corresponding class due such shareholders. All issued and outstanding
shares of the Acquired Fund will simultaneously be canceled on the books of the
Acquired Fund, although share certificates representing interests in the
Acquired Fund will represent a number of Acquiring Fund Shares after the
Closing Date as determined in accordance with paragraph 2.2. The Acquiring Fund
shall not issue certificates representing the Acquiring Fund Shares in
connection with such exchange. Ownership of Acquiring Fund Shares will be shown
on the books of the Acquiring Fund's transfer agent.
2. VALUATION
2.1 The value of the Acquired Fund's net assets to be acquired by the
Acquiring Fund hereunder and the net asset value of Acquiring Fund Shares of
each class shall be computed as of immediately after the close of business of
the New York Stock Exchange on the Closing Date (such time and date being
hereinafter called the ("Valuation Date")), using the valuation procedures set
forth in the Acquiring Fund's Declaration of Trust and then-current prospectus
or statement of additional information.
2.2 The number of the Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Acquired Fund's assets and the
assumption of liabilities shall be determined by dividing the value of the net
assets of the Acquired Fund attributable to each class of shares of the
Acquired Fund by the net asset value of an Acquiring Fund Share of the
corresponding class.
3. CLOSING AND CLOSING DATE
3.1 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 6, 7, and 8 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
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<PAGE>
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.
3.2 The Phoenix-Seneca Trust shall cause Phoenix Equity Planning
Corporation (the "Transfer Agent"), transfer agent of the Acquired Fund, to
deliver at the Closing a certificate of an authorized officer stating that its
records contain the names and addresses of the Acquired Fund Shareholders and
the number and percentage ownership of outstanding shares of each class owned
by each such shareholder immediately prior to the Closing. The Acquiring Fund
shall issue and deliver a confirmation evidencing the Acquiring Fund Shares to
be credited on the Closing Date to the Secretary of Phoenix-Seneca Trust or
provide evidence satisfactory to the Phoenix-Seneca Trust that such Acquiring
Fund Shares have been credited to the Acquired Fund's account on the books of
the Acquiring 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.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Phoenix-Seneca Trust represents and warrants to the Strategic
Equity Series Trust as follows:
(a) The Phoenix-Seneca Trust is a voluntary association with transferable
shares of the type commonly referred to as a Delaware business trust duly
organized and validly existing under the laws of the State of Delaware.
(b) The Phoenix-Seneca Trust is a registered investment company
classified as a management company of the open-end type, and its
registration with the Securities and Exchange Commission (the
"Commission"), as an investment company under the Investment Company Act of
1940, as amended (the "1940 Act"), and the registration of its shares under
the Securities Act of 1933, as amended (the "1933 Act"), are in full force
and effect.
(c) The Phoenix-Seneca Trust is not, and the execution, delivery and
performance of this Agreement will not result, in a material violation of
its Declaration of Trust or By-Laws or of any agreement, indenture,
instrument, contract, lease or other undertaking relating to the Acquired
Fund.
(d) The Acquired Fund has no material contracts or other commitments
(other than this Agreement) which will be terminated with liability to the
Acquired Fund prior to the Closing Date.
(e) No material litigation or administrative proceeding or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against the Acquired Fund or any of its properties or
assets. The Acquired Fund knows of no facts which might form the basis for
the institution of such proceedings and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially and adversely affects its business or its ability to
consummate the transactions herein contemplated.
(f) The Statement of Assets and Liabilities of the Acquired Fund at
September 30, 1998 has been audited by PricewaterhouseCoopers, LLP,
independent accountants, and is in accordance with generally accepted
accounting principles consistently applied and such statement (copies of
which have been furnished to Strategic Equity Series Trust,) fairly
reflects the financial condition of the Acquired Fund as of such date, and
there are no known contingent liabilities of the Acquired Fund as of such
date not disclosed therein.
(g) Since September 30, 1998, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business,
or any incurrence by the Acquired Fund of indebtedness maturing more than
one year from the date such indebtedness was incurred. For the purposes of
this subparagraph (g), a decline in net asset value per share of the
Acquired Fund, the discharge of Acquired Fund liabilities, or the
redemption of Acquired Fund shares by Acquired Fund Shareholders shall not
constitute a material adverse change.
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(h) All Federal and other tax returns and reports of the Acquired Fund
required by law to have been filed have been filed and are correct, and all
Federal and other taxes shown as due or required to be shown as due on said
returns and reports have been paid or provision has been made for the
payment thereof, and to the best of the Acquired Fund's knowledge no such
return is currently under audit and no assessment has been asserted with
respect to such returns.
(i) For each taxable year of its operation, the Acquired Fund has met the
requirements of Subchapter M of the Code for qualification as a regulated
investment company and has elected to be treated as such.
(j) All issued and outstanding shares of the Acquired Fund are duly and
validly issued and outstanding, fully paid and non-assessable by the
Acquired Fund. The Acquired Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the Acquired
Fund shares, nor is there outstanding any security convertible into any of
the Acquired Fund shares (except for the conversion feature of the Class B
shares into Class A shares as described in the current prospectus of the
Acquired Fund).
(k) The execution, delivery and performance of this Agreement has been
duly authorized prior to the Closing Date by all necessary action on the
part of the Board of Trustees of the Phoenix-Seneca Trust, and, subject to
the approval of the Acquired Fund Shareholders, this Agreement constitutes
a valid and binding obligation of the Phoenix-Seneca Trust enforceable in
accordance with its terms, subject as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights, and to general equity principles.
4.2 The Strategic Equity Series Trust represents and warrants to the
Phoenix-Seneca Trust as follows:
(a) The Strategic Equity Series Trust is a voluntary association with
transferable shares of the type commonly referred to as a Massachusetts
business trust duly organized and validly existing under the laws of the
Commonwealth of Massachusetts.
(b) The Strategic Equity Series Trust is a registered investment company
classified as a management company of the open-end type, and its
registration with the Commission, as an investment company under the 1940
Act, and the registration of its shares under the 1933 Act are in full
force and effect.
(c) The current prospectus and statement of additional information of the
Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations
of the Commission thereunder and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading.
(d) The Strategic Equity Series Trust is not, and the execution, delivery
and performance of this Agreement will not result in a material violation
of the Acquiring Fund's Declaration of Trust or By-laws or of any
agreement, indenture, instrument, contract, lease or other undertaking
relating to the Acquiring Fund.
(e) No material litigation or administrative proceeding or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against the Acquiring Fund or any of its properties or
assets. The Acquiring Fund knows of no facts which might form the basis for
the institution of such proceedings and is not a party to or subject to the
provisions of any order, decree, or judgment of any court or governmental
body which materially and adversely affects the Acquiring Fund's business
or its ability to consummate the transactions herein contemplated.
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<PAGE>
(f) The Statement of Assets and Liabilities of the Acquiring Fund at
April 30, 1999, has been audited by PricewaterhouseCoopers, LLP,
independent accountants and is in accordance with generally accepted
accounting principles consistently applied and such statement (copies of
which have been furnished to the Phoenix-Seneca Trust), fairly reflects the
financial condition of the Acquiring Fund as of such date, and there are no
known contingent liabilities of the Acquiring Fund as of such date not
disclosed therein.
(g) Since April 30, 1999, there has not been any material adverse change
in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business,
or any incurrence by the Acquiring Fund of indebtedness maturing more than
one year from the date such indebtedness was incurred. For the purposes of
this subparagraph (g), a decline in net asset value per share of the
Acquiring Fund Shares, the discharge of Acquiring Fund liabilities, or the
redemption of Acquiring Fund shares by Acquiring Fund shareholders, shall
not constitute a material adverse change.
(h) All Federal and other tax returns and reports of the Acquiring Fund
required by law to have been filed have been filed and are correct, and all
Federal and other taxes shown as due or required to be shown as due on said
returns and reports have been paid or provision has been made for the
payment thereof, and, to the best of the Acquiring Fund's knowledge, no
such return is currently under audit and no assessment has been asserted
with respect to such returns.
(i) For each taxable year of its operation, the Acquiring Fund has met
the requirements of Subchapter M of the Code for qualification as a
regulated investment company and has elected to be treated as such.
(j) All issued and outstanding Acquiring Fund Shares are duly and validly
issued and outstanding, fully paid and non-assessable by the Acquiring Fund
(recognizing that, under Massachusetts law, Acquiring Fund shareholders
could under certain circumstances be held personally liable for the
obligations of the Acquiring Fund). The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or
purchase any Acquiring Fund Shares, nor is there outstanding any security
convertible into any Acquiring Fund Shares (except for the conversion
feature of the Class B shares into Class A shares as described in the
current prospectus of the Acquiring Fund).
(k) The execution, delivery and performance of this Agreement has been
fully authorized prior to the Closing Date by all necessary action, if any,
on the part of the Board of Trustees of the Strategic Equity Series Trust
and this Agreement constitutes a valid and binding obligation of the
Acquiring Fund enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors rights, and to general equity
principles.
(l) The Acquiring Fund Shares to be issued and delivered to the Acquired
Fund for the account of the Acquired Fund Shareholders, pursuant to the
terms of this Agreement at the Closing Date have been duly authorized.
5. COVENANTS OF THE ACQUIRING FUND, AND THE ACQUIRED FUND
5.1 The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the Closing Date,
it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions, the dividends
contemplated by Section 8.6 hereof, and any other distribution that may be
advisable.
5.2 The Phoenix-Seneca Trust will call a meeting of the Acquired Fund
Shareholders to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
A-5
<PAGE>
5.3 The Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired for the purpose of making any
distribution thereof other than in accordance with the terms of this Agreement.
5.4 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund Shares
5.5 Subject to the provisions of this Agreement, the Acquiring Fund and
the Acquired Fund will each take, or cause to be taken, all action, and do or
cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.6 The Phoenix-Seneca Trust will provide the Acquiring Fund with
information reasonably necessary for the preparation of a registration
statement on Form N-14 of the Strategic Equity Series Trust (the "Registration
Statement"), such Registration Statement to consist of, without limitation, a
prospectus (the "Prospectus") that includes a proxy statement of the Acquired
Fund (the "Proxy Statement").
5.7 The Strategic Equity Series Trust agrees to use all reasonable efforts
to obtain the approvals and authorizations required by the 1933 Act, the 1940
Act, and such of the state blue sky or securities laws as may be necessary in
order to continue the operations of the Acquiring Fund after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Phoenix-Seneca Trust to consummate the transactions
provided for herein shall be subject, at its election, to the performance by
the Strategic Equity Series Trust and the Acquiring Fund of all the obligations
to be performed by them hereunder on or before the Closing Date, and, in
addition thereto, to the following further conditions:
6.1 All representations and warranties of the Strategic Equity Series
Trust contained in this Agreement shall be true and correct in all material
respects as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date.
6.2 The Strategic Equity Series Trust shall have delivered to the
Phoenix-Seneca Trust a certificate executed in its name by its President or
Vice President and its Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to the Phoenix-Seneca Trust, and dated as of the Closing Date, to
the effect that the representations and warranties of the Strategic Equity
Series Trust made in this Agreement are true and correct in all material
respects at and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement and as to such other matters as the
Phoenix-Seneca Trust shall reasonably request.
6.3 The Acquiring Fund Shares to be issued and delivered to the Acquired
Fund, for the account of the Acquired Fund Shareholders when so issued and
delivered, shall be duly and validly issued, and shall be fully paid and non-
assessable by the Acquiring Fund (recognizing that, under Massachusetts law,
shareholders of the Acquiring Fund could under certain circumstances be held
personally liable for its obligations);
6.4 The Proxy Statement and Prospectus (only insofar as they relate to the
Acquiring Fund), on the effective date of the Registration Statement and on the
Closing Date, (i) shall comply in all material respects with the applicable
provisions of the 1933 Act, the Securities Exchange Act of 1934, as amended
(the "1934 Act") and the 1940 Act and the regulations thereunder and (ii) shall
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statement herein in
light of the circumstances under which such statements were made, not
materially misleading.
A-6
<PAGE>
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Strategic Equity Series Trust to complete the
transactions provided for herein shall be subject, at its election, to the
performance by the Phoenix-Seneca Trust and the Acquired Fund of all of the
obligations to be performed by them hereunder on or before the Closing Date
and, in addition thereto, to the following conditions:
7.1 All representations and warranties of the Phoenix-Seneca Trust
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same force and
effect as if made on and as of the Closing Date.
7.2 The Phoenix-Seneca Trust shall have delivered to the Strategic Equity
Series Trust a statement of the Acquired Fund's assets and liabilities, as of
the Closing Date, certified by the Treasurer of the Acquired Fund; and
7.3 The Phoenix-Seneca Trust shall have delivered to the Strategic Equity
Series Trust on the Closing Date a certificate executed in its name by its
President or Vice President and its Treasurer or Assistant Treasurer, in form
and substance satisfactory to the Strategic Equity Series Trust, and dated as
of the Closing Date, to the effect that the representations and warranties of
the Phoenix-Seneca Trust made in this Agreement are true and correct in all
material respects at and as of the Closing Date, except as they may be affected
by the transactions contemplated by this Agreement, and as to such other
matters as the Strategic Equity Series Trust shall reasonably request.
7.4 The Acquired Fund shall have good and marketable title to the Acquired
Fund's assets to be transferred to the Acquiring Fund pursuant to paragraph 1.1
and full right, power, and authority to sell, assign, transfer and deliver such
assets hereunder, and, upon delivery and payment for such assets.
7.5 The Proxy Statement and Prospectus (other than information therein
that relates to the Strategic Equity Series Trust or the Acquiring Fund), on
the effective date of the Registration Statement and on the Closing Date (i)
shall comply in all material respects with the applicable provisions of the
1933 Act, the 1934 Act, the 1940 Act and the regulations thereunder and (ii)
shall not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such statements were made,
not materially misleading.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND THE
ACQUIRED FUND
The obligations of the Phoenix-Seneca Trust and the Strategic Equity
Series Trust to consummate the transactions contemplated by this Agreement
shall be subject, at their election (except as provided in paragraphs 8.1 and
8.5 below) to the following conditions:
8.1 The Agreement and the transactions contemplated herein shall have been
approved by the holders of the outstanding shares of beneficial interest in the
Acquired Fund in accordance with the provisions of the Declaration of Trust and
By-Laws of the Phoenix-Seneca Trust and certified copies of the resolutions
evidencing such approval shall have been delivered to the Strategic Equity
Series Trust. Notwithstanding anything herein to the contrary, neither the
Strategic Equity Series Trust nor the Phoenix-Seneca Trust may waive the
conditions set forth in this paragraph 8.1;
8.2 On the Closing Date, no action, suit or other proceeding shall be
threatened or pending before any court or governmental agency in which it is
sought to restrain or prohibit, or to obtain damages or other relief in
connection with this Agreement or the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary by
the Strategic Equity Series Trust or the Phoenix-Seneca Trust to permit
consummation,
A-7
<PAGE>
in all material respects, of the transactions contemplated hereby shall have
been obtained, except where failure to obtain any such consent order or permit
would not involve a risk of a material adverse effect on the assets or
properties of the Strategic Equity Series Trust or the Phoenix-Seneca Trust.
8.4 The Registration Statement shall have become effective under the 1933
Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending,
threatened or contemplated under the 1933 Act.
8.5 The parties shall have received an opinion from the law firm of
Goodwin, Procter & Hoar LLP addressed to the Strategic Equity Series Trust and
Phoenix-Seneca Trust substantially to the effect that the transaction
contemplated by this Agreement shall constitute a tax-free reorganization for
Federal income tax purposes. The delivery of such opinion is conditioned upon
receipt by the law firm of Goodwin, Procter & Hoar LLP of representations it
shall request of the Strategic Equity Series Trust and the Phoenix-Seneca
Trust. Notwithstanding anything herein to the contrary, neither the Strategic
Equity Series Trust nor the Phoenix-Seneca Trust may waive the condition set
forth in this paragraph 8.5.
8.6 At or immediately prior to the Closing, the Acquired Fund shall have
declared and paid a dividend or dividends which, together with all previous
such dividends, shall have the effect of distributing to the Acquired Fund
Shareholders all of such Acquired Fund's investment company taxable income for
taxable years ending at or prior to the Closing and all of its net capital
gain, if any, realized in taxable years ending at or prior to the Closing
(after reduction for any capital loss carry-forward).
9. BROKERAGE FEES AND EXPENSES
9.1 The Strategic Equity Series Trust and the Phoenix-Seneca Trust each
represents and warrants to the other that there are no brokers or finders
entitled to receive any payments in connection with the transactions provided
for herein.
9.2 All of the expenses and costs of the Reorganization and the
transactions contemplated thereby shall be borne by PIC.
10. ENTIRE AGREEMENT
10.1 The Strategic Equity Series Trust and the Phoenix-Seneca Trust 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.
11. TERMINATION
This Agreement and the transactions contemplated hereby may be terminated
and abandoned by either party by resolution of the party's Board of 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 Strategic Equity Series Trust or the Phoenix-Seneca
Trust, or their respective Trustees or officers, to the other party.
12. 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
Phoenix-Seneca Trust and the Strategic Equity Series Trust; provided, however,
that following the meeting of the Acquired Fund Shareholders called by the
Phoenix-Seneca Trust pursuant to paragraph 5.2 of this Agreement, no such
amendment may have the effect of changing the provisions for determining the
number of the Acquiring Fund Shares to be issued to the Acquired Fund
Shareholders under this Agreement to the detriment of such shareholders without
their further approval.
A-8
<PAGE>
13. 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.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
14.1 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.
14.2 This Agreement may be executed in any number of counterparts each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
14.4 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.
14.5 It is expressly agreed that the obligations of the Phoenix-Seneca
Trust hereunder shall not be binding upon any of the trustees, shareholders,
nominees, officers, agents, or employees of the Phoenix-Seneca Trust
personally, but shall bind only the trust property of the Phoenix-Seneca Trust,
as provided in the Declaration of Trust of the Phoenix-Seneca Trust. The
execution and delivery by such officers of the Phoenix-Seneca Trust shall not
be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Acquired Fund as provided in the Declaration of Trust of the Phoenix-Seneca
Trust. The Phoenix-Seneca Trust is a series company with multiple series, and
has entered into this Agreement on behalf of one such series, the Acquired
Fund. With respect to any obligation of the Phoenix-Seneca Trust arising
hereunder, the Strategic Equity Series Trust and the Acquiring Fund shall look
for payment or satisfaction of such obligations solely to the assets and
property of the Acquired Fund.
14.6 It is expressly agreed that the obligations of the Strategic Equity
Series Trust hereunder shall not be binding upon any of the trustees,
shareholders, nominees, officers, agents or employees of the Strategic Equity
Series Trust personally, but shall bind only the trust property of the
Strategic Equity Series Trust, as provided in the Declaration of Trust of the
Strategic Equity Series Trust. The execution and delivery by such officers of
the Strategic Equity Series Trust shall not be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the trust property of the Strategic Equity Series Trust as
provided in the Declaration of Trust of the Strategic Equity Series Trust. The
Strategic Equity Series Trust is a series company with multiple series, and has
entered into this Agreement on behalf of one such series, the Acquiring Fund.
With respect to any obligation of the Strategic Equity Series Trust arising
hereunder, the Phoenix-Seneca Trust and the Acquired Fund shall look for
payment or satisfaction of such obligations solely to the assets and property
of the Acquiring Fund.
14.7 Subject to the foregoing limitations on liability, the Acquiring Fund
agrees to indemnify and hold harmless the Trustees of the Phoenix-Seneca Trust
who are not "interested persons" of the adviser or distributor of the Acquired
Fund (the "Independent Trustees") from and against any and all claims, costs,
expenses (including reasonable attorneys' fees), losses and liabilities of any
sort or kind (collectively "Liability") which may be asserted against them or
for which
A-9
<PAGE>
the Independent Trustees may become liable arising out of or attributable to
the transactions contemplated by this Agreement, provided that any Independent
Trustee seeking the benefit of this indemnification shall not have materially
contributed to the creation of such Liability by acting in a manner contrary to
his or her fiduciary duties as a trustee under the 1940 Act.
14.8 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 as
set forth in Paragraph 6.1 and 7.1.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its President or Vice President and its seal to be affixed
hereto and attested by its Secretary or Assistant Secretary.
PHOENIX STRATEGIC EQUITY SERIES FUND,
on behalf of the Phoenix-Seneca Equity
Opportunities Fund
ATTEST:
/s/ G. Jeffrey Bohne By: /s/ Philip R. McLoughlin
- ------------------------------- -------------------------------
G. Jeffrey Bohne Name: Philip R. McLoughlin
Secretary Title: President
THE PHOENIX-SENECA FUNDS, on behalf of the
Phoenix-Seneca Growth Fund
ATTEST:
/s/ G. Thomas N. Steenburg By: /s/ Gail P. Seneca
- ------------------------------- -------------------------------
Thomas N. Steenburg Name: Gail P. Seneca
Secretary Title: President
A-11
PROXY PROXY
PHOENIX-SENECA GROWTH FUND
a series of
Phoenix-Seneca Funds
909 Montgomery Street
San Francisco, California 94133
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS
April 28, 2000
The undersigned shareholder of the Phoenix-Seneca Growth Fund, revoking any and
all previous proxies heretofore given for shares of the Phoenix-Seneca Growth
Fund held by the undersigned, does hereby appoint Ronald K. Jacks and Sandra J.
Monticelli, each and any of them, with full power of substitution each, to be
the attorneys and proxies of the undersigned, to attend the special meeting of
the shareholders of the Phoenix-Seneca Funds to be held on the 28th day of
April, 2000, at 10:00 a.m., local time, at the offices of Phoenix Equity
Planning Corporation, 101 Munson Street, Greenfield, Massachusetts 01301, and
any adjournments thereof and to represent and direct shares of each class of the
Phoenix-Seneca Growth Fund held by the undersigned as of the record date for the
meeting for the proposal specified on the reverse side.
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 1-877-8683 and
following the recorded instructions. Prompt voting by shareholders will save 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 boxes
provided, the undersigned's vote will be cast "FOR" the proposal. If no
direction is made for the proposal, this proxy will be voted "FOR" the proposal.
In their discretion, the proxies are authorized to transact and vote upon such
other matters and business as may come before the meeting or any adjournments
thereof.
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- --------------------------------------
PHOENIX-SENECA GROWTH FUND
- --------------------------------------
CONTROL NUMBER:
RECORD DATE SHARES:
1. To consider and act upon a proposal to approve the Agreement and Plan of
Reorganization, dated November 17, 1999, and the transactions it
contemplates, including (a) the transfer of all or substantially all of
the assets of the Phoenix-Seneca Growth Fund to the Phoenix-Seneca
Equity Opportunities Fund in exchange solely for shares of the
corresponding class of the Equity Opportunities Fund and the assumption
by the Equity Opportunities Fund of all the liabilities of the Growth
Fund and (b) the distribution of the shares of the Equity Opportunities
Fund so received to shareholders of the Growth Fund.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. To consider and act upon any other business as may properly come before
the meeting and any adjournment thereof.
To avoid the expense of adjourning the meeting to a subsequent date,
please return this proxy in the enclosed self-addressed, postage-paid
envelope.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
PHOENIX-SENECA FUNDS, WHICH RECOMMENDS A VOTE FOR THE PROPOSAL.
Please be sure to sign and date this Proxy. Date: ______________
_____________________________________ __________________________________
Shareholder sign here Co-owner sign here
DETACH CARD DETACH CARD
Vote by Telephone
It's fast, convenient, and immediate!
Call Toll-Free on a Touch-Tone Phone
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card.
2. Call the toll-free number
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