As filed with the Securities and Exchange Commission on August 6, 2004
Registration No. 333-116762
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X] Pre-Effective Amendment No. _1__ [ ] Post-Effective Amendment No. ___
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THE PHOENIX EDGE SERIES FUND
(Exact Name of Registrant as Specified in Charter)
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c/o Variable Products Operations
Phoenix Life Insurance Company
101 Munson Street, Greenfield, Massachusetts 01301
(Address of Principal Executive Offices)
(800) 541-0171
(Registrant's Telephone Number, including Area Code)
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John R. Flores, Esq.
c/o Phoenix Life Insurance Company
One American Row, Hartford, Connecticut 06102-5056
(Name and address of Agent for Service)
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Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of this Registration Statement.
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Registrant is relying on Section 24(f) of the Investment Company Act of
1940, as amended, which permits registration of an indefinite number of shares
of beneficial interest of the Phoenix-Oakhurst Growth and Income Series.
Accordingly, no filing fee is due in connection with this Registration
Statement.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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THE PHOENIX EDGE SERIES FUND
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
Caption or Location in
Form N-14 Item No. and Caption Prospectus/Proxy Statement
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Part A: Information Required in Prospectus/Proxy Statement
1. Beginning of Registration Statement Cover Page; Cross Reference Sheet
and Outside Front Cover Page of Prospectus
2. Beginning and Outside Back Cover Table of Contents
Page of Prospectus
3. Fee Table, Synopsis Information and Risk Synopsis; Principal Risk Factors; Comparison of
Investment Objectives and Policies
4. Information about the Transaction Synopsis; The Proposed Reorganizations;
Comparative Information on Shareholder Rights;
Appendix A and Appendix B (Forms of Agreements
and Plans of Reorganization)
5. Information about the Registrant Cover Page; Synopsis; Principal Risk Factors;
Comparison of Investment Objectives and
Policies; The Proposed Reorganizations;
Comparative Information on Purchases and
Exchanges; Comparative Information on
Distributions and Redemptions; Comparative
Information on Shareholder Rights; Management
and Other Service Providers; Additional
Information About The Series; Prospectus of
Registrant dated May 1, 2004, is incorporated
by reference
6. Information about the Series Being Synopsis; Comparison of Investment Objectives
Acquired and Policies; The Proposed Reorganizations;
Comparative Information on Purchases and
Exchanges; Comparative Information on
Distributions and Redemptions; Comparative
Information on Shareholder Rights; Additional
Information About The Series; Prospectus of the
Registrant dated May 1, 2004, is incorporated by
reference
7. Voting Information Synopsis; The Proposed Reorganizations;
Comparative Information on Shareholder Rights;
Voting Information
8. Interest of Certain Persons and Experts The Proposed Reorganization
9. Additional Information Required for Not Applicable
Re-offering By Persons Deemed to be Underwriters
Caption or Location in
Form N-14 Item No. and Caption Prospectus/Proxy Statement
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Part B: Information Required in Statement of Additional Information
10. Cover Page Cover Page
11. Table of Contents
Table of Contents
12. Additional Information about the Registrant Cover Page; Statement of Additional Information
of Registrant, dated May 1, 2004
13. Additional Information about the See item 12
Company Being Acquired
14. Financial Statements Annual Report of the Registrant for the year
ended December 31, 2003 and Pro Forma Financial
Statements for the period ended December 31,
2003
Part C: Other Information
15. Indemnification Indemnification
16. Exhibits Exhibits
17. Undertakings Undertakings
PART A
PHOENIX-ALLIANCE/BERNSTEIN GROWTH + VALUE SERIES
PHOENIX-MFS INVESTORS TRUST SERIES
EACH A SERIES OF
THE PHOENIX EDGE SERIES FUND
C/O PHOENIX VARIABLE PRODUCTS MAIL OPERATIONS
P.O. BOX 8027
BOSTON, MA 02266-8027
(800) 541-0171
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August 6, 2004
Dear Contract/Policyholder:
The Phoenix-Alliance/Bernstein Growth + Value Series and Phoenix-MFS
Investors Trust Series (collectively the "Merging Series"), each a series of The
Phoenix Edge Series Fund (the "Trust"), will hold a Special Meeting of
Shareholders at 10:00 a.m., local time, on September 14, 2004, at One American
Row, Hartford, Connecticut 06102. At the Special Meeting, Phoenix Life Insurance
Company ("PLIC") and its affiliates will vote on Agreements and Plans of
Reorganization (collectively the "Agreements" or "Plans") under which the
Merging Series will be combined with the Phoenix-Oakhurst Growth and Income
Series (the "Surviving Series"), another series of the Trust (individually, a
"Reorganization," and together, the "Reorganizations"). The Surviving Series has
a similar investment objective to those of the Merging Series. If the Agreements
are implemented, the separate accounts holding shares of the Merging Series will
receive shares of the Surviving Series with an aggregate net asset value equal
to the aggregate net asset value of the Merging Series. No sales charge will be
imposed in connection with the Reorganizations. PLIC will pay all costs of the
Reorganizations. The Reorganizations are conditioned upon receipt of an opinion
of counsel indicating that the Reorganizations will qualify as tax-free
reorganizations for Federal income tax purposes.
The Board of Trustees of the Trust believes that the Reorganizations offer
you the opportunity to pursue your goals in a larger series. The Board of
Trustees has carefully considered and has unanimously approved the proposed
Reorganizations, as described in the accompanying materials, and believes that
the Reorganizations are in the best interests of the Merging Series and their
shareholders.
As an owner of a variable annuity or variable life insurance contract issued
by PLIC or one of its affiliated insurance companies (together, "Phoenix"), you
have the contractual right to instruct the insurance company how to vote the
shares of the Merging Series at this meeting. Although you are not directly a
shareholder of the Merging Series, some or all of your contract value is
invested in the Merging Series pursuant to your policy or contract. For the
limited purposes of this Prospectus/Proxy Statement, the term "shareholder"
refers to you as the contract/policyowner, unless the context otherwise
requires. Therefore, the Board of Trustees recommends that you vote in favor of
the Agreements. It is very important that you vote and that your vote be
received no later than September 14, 2004. If the Voting Instructions Card is
executed and no direction is made, you will be considered as voting FOR the
proposal and, in the discretion of the insurance company, upon such other
business as may properly come before the Special Meeting.
We have enclosed a copy of the Notice of Special Meeting of Shareholders, the
Prospectus/Proxy Statement and a card entitled "Voting Instructions." This card
should be used to register your vote on the proposals to be acted upon at the
Special Meeting. It is important for you to provide voting instructions with
respect to the issues described in the accompanying Prospectus/Proxy Statement.
We recommend that you read the Prospectus/Proxy Statement in its entirety as the
explanations will help you to decide what voting instructions you would like to
provide.
Voting instructions executed by you may be revoked at any time prior to
Phoenix voting the shares represented thereby: by written notice of the
instruction card's revocation to the Secretary of the Trust at the address above
prior to the meeting; or by the subsequent execution and return of another
Voting Instructions Card prior to the meeting;
or by use of any electronic, telephonic or other alternative means authorized by
the Trustees for authorizing theproxy to act; or by being present and voting in
person at the meeting and giving oral notice of revocation to the Chairman of
the meeting.
As a convenience, you can provide voting instructions in any one of four ways:
o THROUGH THE INTERNET - www.proxyweb.com
o BY TELEPHONE - 800-690-6903
o BY MAIL - using the enclosed Voting Instructions Card(s) and postage-paid
envelope
o IN PERSON - at the Special Meeting
We encourage you to vote by telephone or Internet; have your Voting
Instructions Card in hand, and call the number or go to the Web Site and follow
the instructions there. Use of telephone or Internet voting will reduce the time
and costs of this proxy solicitation. Whichever method you choose, please read
the enclosed Prospectus/Proxy Statement carefully before you vote.
Your vote on these matters is important. Please complete the Voting
Instructions Card and return it promptly in the envelope provided or vote using
one of the other methods described above. Please respond. In order to avoid the
additional expense of further solicitation, we ask that you vote promptly. It is
important that your policy or contract be represented.
Sincerely,
/s/Philip R. McLoughlin
Philip R. McLoughlin
President
PHOENIX-ALLIANCE/BERNSTEIN GROWTH + VALUE SERIES
PHOENIX-MFS INVESTORS TRUST SERIES
EACH A SERIES OF
THE PHOENIX EDGE SERIES FUND
101 MUNSON STREET
GREENFIELD, MASSACHUSETTS 01301
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 14, 2004
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To The Contract and Policy Holders:
The Phoenix-Alliance/Bernstein Growth + Value Series and the Phoenix-MFS
Investors Trust Series, each a series of The Phoenix Edge Series Fund (the
"Trust"), a Massachusetts business trust, will hold a Special Meeting of
Shareholders at One American Row, Hartford, Connecticut 06102 on September 14,
2004, at 10:00 a.m., local time, for the following purposes:
FOR THE PHOENIX-ALLIANCE/BERNSTEIN GROWTH + VALUE SERIES:
1. To consider and act upon a proposal to approve the Agreement and Plan of
Reorganization, dated September 14, 2004, and the transactions it
contemplates, including (a) the transfer of all of the assets of the
Phoenix-Alliance/Bernstein Growth + Value Series to the Phoenix-Oakhurst
Growth and Income Series (the "Surviving Series"), another series of the
Trust, in exchange solely for shares of the Surviving Series and the
assumption by the Surviving Series of all liabilities of the
Phoenix-Alliance/Bernstein Growth + Value Series, and (b) the
distribution of the shares of the Surviving Series so received to
shareholders of the Phoenix-Alliance/Bernstein Growth + Value Series in
complete liquidation of the Phoenix-Alliance/Bernstein Growth + Value
Series. A vote in favor of the Agreement and Plan of Reorganization is a
vote in favor of termination of the Merging Series.
FOR THE PHOENIX-MFS INVESTORS TRUST SERIES:
2. To consider and act upon a proposal to approve the Agreement and Plan of
Reorganization, dated September 14, 2004, and the transactions it
contemplates, including (a) the transfer of all of the assets of the
Phoenix-MFS Investors Trust Series to the Phoenix-Oakhurst Growth and
Income Series (the "Surviving Series"), another series of the Trust, in
exchange solely for shares of the Surviving Series and the assumption by
the Surviving Series of all liabilities of the Phoenix-MFS Investors
Trust Series, and (b) the distribution of the shares of the Surviving
Series so received to shareholders of the Phoenix-MFS Investors Trust
Series in complete liquidation of the Phoenix-MFS Investors Trust
Series. A vote in favor of the Agreement and Plan of Reorganization is a
vote in favor of termination of the Merging Series.
3. To consider and act upon any other business as may properly come before
the meeting and any adjournment(s) thereof.
The Board of Trustees of the Trust has fixed the close of business on July
20, 2004, as the record date for determining shareholders entitled to notice of
and to vote at the Special Meeting and any adjournment or postponement thereof.
You are cordially invited to attend the Special Meeting.
Contract/Policyholders who do not expect to attend the Special Meeting are asked
to respond promptly via Internet or telephone, or by returning a completed
Voting Instructions Card. The Board of Trustees of the Trust is soliciting the
enclosed proxy.
By Order of the Board of Trustees of
The Phoenix Edge Series Fund
RICHARD J. WIRTH
SECRETARY
Hartford, Connecticut
August 6, 2004
PHOENIX-ALLIANCE/BERNSTEIN GROWTH + VALUE SERIES
PHOENIX-MFS INVESTORS TRUST SERIES
EACH A SERIES OF
THE PHOENIX EDGE SERIES FUND
101 MUNSON STREET
GREENFIELD, MASSACHUSETTS 01301
1-800-541-0171
PROSPECTUS/PROXY STATEMENT
DATED AUGUST 6, 2004
The Phoenix Edge Series Fund (the "Trust"), a Massachusetts business trust,
serves as an investment vehicle for use in connection with variable life
insurance policies and variable annuity contracts (collectively, "Contracts")
issued by Phoenix Life Insurance Company ("PLIC"), PHL Variable Insurance
Company ("PHL Variable"), Phoenix Life and Annuity ("PLAC") (collectively,
"Phoenix") and their separate accounts. Phoenix and the separate accounts are
the sole shareholders of record of the Trust.
This Prospectus/Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Trustees of the Trust, for use at the
Special Meeting of Shareholders of the Phoenix-Alliance/Bernstein Growth + Value
Series and shareholders of the Phoenix-MFS Investors Trust Series (each Series,
a "Merging Series") to be held at 10:00 a.m., local time, on September 14, 2004,
at the offices of the Phoenix Life Insurance Company located at One American
Row, Hartford, Connecticut 06102 and at any adjournment(s) thereof.
The purpose of the meeting is to consider approval of: (1) an Agreement and
Plan of Reorganization that would effect the Reorganization of the
Phoenix-Alliance/Bernstein Growth + Value Series into the Phoenix-Oakhurst
Growth and Income Series (the "Surviving Series"), another series of the Trust,
and (2) an Agreement and Plan of Reorganization that would effect the
Reorganization of the Phoenix-MFS Investors Trust Series into the Surviving
Series, as described below. The Agreements and Plans of Reorganization are
referred to herein individually as an "Agreement," and together as the
"Agreements." Under each respective Agreement, all of the assets of the
respective Merging Series would be transferred to the Surviving Series in
exchange solely for shares of beneficial interest in the Surviving Series and
the assumption by the Surviving Series of all liabilities of the respective
Merging Series. These shares of the Surviving Series would then be distributed
pro rata to the separate accounts of the insurance companies then holding shares
of the respective Merging Series, and then the respective Merging Series would
be liquidated. As a result of the proposed transactions, the separate accounts
would receive a number of full and fractional shares of the Surviving Series
with an aggregate net asset value equal to the aggregate net asset value of the
respective Merging Series shares on the closing date of the Reorganizations.
The Surviving Series and the Merging Series are a series of the same Trust,
an open-end management investment company. The Surviving Series has an
investment objective of dividend growth, current income and capital
appreciation. The Phoenix-Alliance/Bernstein Growth + Value Series has an
investment objective of seeking long-term capital growth. The Phoenix-MFS
Investors Trust Series has an investment objective of primarily seeking
long-term growth of capital and secondarily of providing reasonable current
income. Phoenix Investment Counsel, Inc. ("PIC") is the investment adviser to
the Surviving Series. Phoenix Variable Advisors, Inc. ("PVA") is the investment
adviser to each of the Merging Series. Alliance Capital Management L.P.
("Alliance") is the subadvisor to the Phoenix-Alliance/Bernstein Growth + Value
Series, and Massachusetts Financial Services Company, Inc., doing business as
MFS Investment Management ("MFS"), is the subadvisor to the Phoenix-MFS
Investors Trust Series.
This Prospectus/Proxy Statement, which you should retain for future
reference, sets forth concisely the information that you should know about each
Merging Series, the Surviving Series, and the transactions
contemplated by the Agreement. As used in this Prospectus/Proxy Statement, the
term "Series" collectively refers to the Phoenix-Alliance/Bernstein Growth +
Value Series, the Phoenix-MFS Investors Trust Series and the Surviving Series.
The term "Merging Series" refers individually and collectively to the
Phoenix-Alliance/Bernstein Growth + Value Series and the Phoenix-MFS Investors
Trust Series. A Prospectus, as supplemented, and a Statement of Additional
Information ("SAI"), as supplemented for the Series dated May 1, 2004
(Registration No. 333-05033), have been filed with the Securities and Exchange
Commission ("SEC") and are incorporated by reference in this Prospectus/Proxy
Statement. This means that such information is legally considered to be part of
this Prospectus/Proxy Statement. A copy of the prospectus and periodic reports
have been sent to Shareholders; however, copies of the above-referenced
documents are available upon oral request or written request and without charge
by contacting Phoenix Variable Products Mail Operations, P.O. Box 8027, Boston,
Massachusetts 02266-8027, or by calling toll-free at 1-800-541-0171.
The Trust files reports, proxy materials and other information with the SEC.
Information about the Trust, including the SAI, can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C. You can obtain information
on the operation of the Public Reference Room by calling the SEC at 202-
942-8090. Reports and other information about the Trust are available on the
EDGAR Database on the SEC's Internet site at http://www.sec.gov. Copies of the
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing the
SEC Public Reference Section, Washington, D.C. 20549-0102.
This Prospectus/Proxy Statement constitutes the proxy statement of the
Phoenix-Alliance/Bernstein Growth + Value Series and the Phoenix-MFS Investors
Trust Series for the Special Meeting, and the prospectus for shares of the
Surviving Series that have been registered with the SEC and are being issued in
connection with the Reorganization. The Statement of Additional Information for
this Prospectus/Proxy Statement dated August 6, 2004 is incorporated by
reference (File No. 333-116762). Both the Prospectus/Proxy Statement and
Statement of Additional Information have been filed with the SEC and are
available upon oral request or written request and without charge by contacting
Phoenix Variable Products Mail Operations at the address above or by calling the
toll-free number above. This Prospectus/Proxy Statement is expected to first be
sent to shareholders on or about August 17, 2004.
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THE SECURITIES OF THE SURVIVING SERIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SEC NOR HAS THE SEC DETERMINED IF THIS PROSPECTUS/PROXY STATEMENT IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
Page
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SYNOPSIS................................................................... 1
PRINCIPAL RISK FACTORS..................................................... 6
THE PROPOSED REORGANIZATIONS............................................... 8
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES........................... 12
COMPARATIVE INFORMATION ON PURCHASES AND EXCHANGES......................... 18
COMPARATIVE INFORMATION ON DISTRIBUTIONS AND REDEMPTIONS................... 18
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS.............................. 19
FISCAL YEAR................................................................ 20
MANAGEMENT AND OTHER SERVICE PROVIDERS..................................... 20
VOTING INFORMATION......................................................... 24
ADDITIONAL INFORMATION ABOUT THE SERIES.................................... 27
MISCELLANEOUS.............................................................. 27
SURVIVING SERIES FINANCIAL HIGHLIGHTS...................................... 31
OTHER BUSINESS............................................................. 32
APPENDIX A................................................................. A-1
APPENDIX B................................................................. B-1
THIS PAGE LEFT INTENTIONALLY BLANK.
SYNOPSIS
The following synopsis is a summary, and is qualified by later discussion in
this Prospectus/Proxy Statement. For additional information on the topics
described below, please refer to the respective section of this Prospectus/Proxy
Statement.
BACKGROUND
The proposed Reorganizations are the outcome of deliberations by the Board of
Trustees of the Trust (the "Trustees"). At a special meeting of the Trustees
held on May 11, 2004, the following Series mergers were approved subject to
approval by the Shareholders of the Merging Series:
Merging Series Surviving Series
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Phoenix-Alliance/Bernstein Growth + Value Series Phoenix-Oakhurst Growth and Income Series
Phoenix- MFS Investors Trust Series
Management recommended that the Trustees consider the benefits that the
Series' shareholders would realize if each of the Merging Series were to be
combined with the Surviving Series. In response to their recommendation, the
independent Trustees of the Trust requested that management outline specific
reorganization proposals for their consideration and provide an analysis of the
specific benefits that shareholders would realize from each proposal.
Independent Trustees are Trustees who are not "interested persons" of the Trust
(as defined in Section 2(a)(19) of the Investment Company Act of 1940, as
amended (the "1940 Act")). The Trustees approved the Reorganizations subject to
shareholder approval on May 11, 2004.
SUMMARY OF THE PROPOSED REORGANIZATIONS
The Reorganizations will be effected in accordance with the terms of the
Agreements, forms of which are attached to this Prospectus/Proxy Statement as
Appendices A and B. The Agreements provide for:
o the acquisition by the Surviving Series, on the closing date of the
Reorganization, of all of the assets of each of the Merging Series in
exchange solely for shares of the Surviving Series and the assumption by
the Surviving Series of all liabilities of each of the Merging Series;
o the pro rata distribution of shares of the Surviving Series to the
shareholders of each of the Merging Series in exchange for their
respective shares of the Merging Series; and
o the complete liquidation of the Merging Series as provided in the
Agreements.
The Reorganizations are anticipated to occur on or about September 17, 2004.
If each Agreement is implemented, the insurance company separate accounts
holding shares of each Merging Series will receive a number of full and
fractional shares of the Surviving Series shares with an aggregate net asset
value equal to the aggregate net asset value of the respective Merging Series
shares as of the closing date of the Reorganizations.
The implementation of each Agreement is subject to a number of conditions set
forth in the Agreement. See "The Proposed Reorganizations." The following are
significant conditions (which may not be waived):
o the receipt by the Trust of an opinion of counsel that, for Federal income
tax purposes, the Reorganizations will qualify as tax-free
reorganizations described in Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"); and
o the approval of each Agreement by the shareholders of the respective
Merging Series.
1
The Agreements provide that PLIC will bear all costs and expenses of the
Reorganizations, including the costs of the Special Meeting, the costs and
expenses incurred in the preparation and mailing of the notice, this
Prospectus/Proxy Statement and the proxy, and the tabulation of voting
instructions.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and principal investment strategies of each Merging
Series and the Surviving Series are similar:
o The Phoenix-Alliance/Bernstein Growth + Value Series has an investment
objective of seeking long-term capital growth. The Phoenix-MFS Investors
Trust Series has an investment objective primarily of seeking long-term
growth of capital and secondarily of providing reasonable current income.
The Surviving Series has an investment objective of dividend growth,
current income and capital appreciation.
o Under normal circumstances, the Phoenix-Alliance/Bernstein Growth + Value
Series invests primarily in common stocks of large capitalized U.S.
companies, included in the Russell 1000(R) Index. Normally, about 60-105
companies will be represented in the series, with 25-35 companies,
primarily from the Russell 1000(R) Growth Index constituting approximately
50% of the series' assets, and 40-70 companies, primarily from the Russell
1000(R) Value Index constituting the remainder of the series' assets.
These securities may include common and preferred stocks, depositary
receipts, convertible securities, rights, warrants, and equity-related
options and futures.
o Under normal circumstances, the Phoenix-MFS Investors Trust Series invests
at least 65% of its assets in common stocks and related securities, which
may include preferred stocks, convertible securities and depositary
receipts for those securities.
o The Surviving Series has an investment objective of dividend growth,
current income and capital appreciation. Under normal circumstances, the
Series invests at least 65% of its assets in equity securities, primarily
common stocks.
See "Principal Risk Factors" and "Comparison of Investment Objectives and
Policies" below, for further information on the similarities and differences
among the investment objectives, policies and risks of the Surviving Series and
each Merging Series. You can also find additional information for the Surviving
Series in its Prospectus.
DIVIDENDS AND DISTRIBUTIONS
Phoenix-Alliance/Bernstein Growth + Value Series and Phoenix-MFS Investors
Trust Series distribute net income quarterly, and Phoenix-Oakhurst Growth and
Income Series distributes net investment income semi-annually. Each Series
distributes net realized capital gains, if any, at least annually. All dividends
and distributions of each Merging Series are paid in additional shares of the
respective Series. You can also find additional information on dividends and
distributions for the Surviving Series in its Prospectus.
PURCHASES AND EXCHANGES
The shares of the Trust are not directly offered to the public. Shares of the
Trust are currently offered through certain separate accounts owned by Phoenix
to fund the Contracts. A person can invest in the Trust only by buying a
Contract and directing the allocation of the purchase payment(s) to the
subaccount(s) corresponding to the Series in which the person wishes to invest.
The subaccounts, in turn, invest in shares of the Trust. Not all Series may be
available through a particular Contract. At this time, Phoenix does not charge
for subaccount transfers; however, Phoenix does reserve the right to charge a
fee of up to $20 per transfer after the first twelve transfers in each Contract
year.
Because excessive trading with a Series can hurt fund performance and
therefore be detrimental to all contract/policyholders, Phoenix does reserve the
right to temporarily or permanently terminate exchange privileges
2
or reject any specific order from anyone whose transactions seem to follow a
timing pattern, including those who request more than one exchange out of a
subaccount within any 30-day period. Phoenix will not accept batch transfer
instructions from registered representatives (acting under powers of attorney
for multiple Contract holders), unless Phoenix entered into a third-party
transfer service agreement with the registered representative's broker-dealer
firm.
Each Series currently offers shareholders identical exchange privileges.
Shareholders of each Series may exchange their shares for shares of another
series of the Trust at any time.
REDEMPTION PROCEDURES
As a person owning a Contract issued by Phoenix with shares of a Merging
Series, you have the right to instruct the insurance company how to vote and
redeem the shares of the respective Merging Series and the Surviving Series.
Shareholders of each Series may redeem their shares at a redemption price equal
to the net asset value of the shares (minus any applicable product surrender
charge) as next determined following the receipt of a redemption order in proper
form. Ordinarily, payments of redemption proceeds for redeemed shares are made
within seven days after receipt of a redemption request in proper form. See
"Comparative Information on Distributions and Redemptions" for more information.
You can also find additional information on the Surviving Series' redemption
procedures in its Prospectus.
FEDERAL TAX CONSEQUENCES OF PROPOSED REORGANIZATIONS
At the closing of the Reorganizations, the Trust will receive an opinion of
counsel, subject to customary assumptions and representations, that, for Federal
income tax purposes, the Reorganizations will qualify as tax-free
reorganizations described in Section 368(a) of the Code. Accordingly:
o no gain or loss will be recognized by either Merging Series upon the
transfer of the assets of each Merging Series to the Surviving Series
solely in exchange for Surviving Series shares and the assumption by the
Surviving Series of all liabilities of the respective Merging Series or
upon the distribution of Surviving Series shares to the Merging Series
insurance company shareholders in exchange for their shares of the
Merging Series;
o the tax basis of the respective Merging Series' assets acquired by the
Surviving Series will be the same as the tax basis of such assets to the
respective Merging Series immediately prior to the Reorganization, and
the holding period of the assets of the respective Merging Series in the
hands of the Surviving Series will include the period during which those
assets were held by the respective Merging Series; and
o no gain or loss will be recognized by the Surviving Series upon the
receipt of the assets of the Merging Series solely in exchange for
the Surviving Series shares and the assumption by the Surviving Series
of all liabilities of the Merging Series.
We also believe that both Reorganizations should not adversely impact the tax
treatment of your variable life or variable annuity contracts. Shareholders of
each Merging Series should consult their tax advisors regarding the effect, if
any, of the proposed Reorganizations in light of their individual circumstances.
See "The Proposed Reorganizations--Federal Income Tax Consequences" for more
information.
3
RISK FACTORS
An investment in the Surviving Series is subject to specific risks arising
from the types of securities in which the Surviving Series invests and general
risks arising from investing in any mutual fund type of investment. The primary
risks to which the Surviving Series is subject include the risks of investing in
equity securities, foreign investments, foreign currency and companies with
larger market capitalization. The primary risks to which the Surviving Series is
subject also include market risk and the risk of selecting underperforming
securities and asset classes, which may adversely affect the Series and lead to
loss of principal. This Series tends to be "fully invested" in equity
securities. The net asset value of a series that intends to be fully invested in
securities will decrease more quickly if the value of such securities decreases
as compared to a series that holds a larger cash position. Investors can lose
money by investing in the Surviving Series. There is no assurance that the
Surviving Series will meet its investment objective. The Surviving Series'
investment objectives and policies are similar to those of each Merging Series.
An investment in the Surviving Series is subject to some of the same risks as an
investment in each of the Merging Series. However, see "Principal Risk Factors"
for additional information about the principal risks associated with an
investment in the Surviving Series.
MANAGEMENT AND OTHER SERVICE PROVIDERS
PIC is the investment advisor to the Surviving Series and is responsible for
its day-to-day portfolio management. PVA is the investment advisor to the
Merging Series. PVA has entered into subadvisory agreements with Alliance and
MFS, respectively, who provide day-to-day portfolio management for
Phoenix-Alliance/Bernstein Growth + Value Series and Phoenix-MFS Investors Trust
Series.
COMPARATIVE FEE TABLES
The tables below are designed to assist you in understanding the various
direct and indirect costs and expenses associated with an investment in each
Series. The table and the example do not include any fees or sales charges
imposed under the Contracts for which the Series is an investment option. If
these fees and sales charges were reflected, the total expenses associated with
an investment in each Series shown in the tables would be higher. Each table
also includes pro forma information for the combined Surviving Series resulting
from the Reorganizations assuming the Reorganizations took place on December 31,
2003, and after adjusting such information to reflect current fees. The expense
information for the Surviving Series and each Merging Series is based upon
expenses for the period ended December 31, 2003.
There are no load charges or fees imposed upon shareholders of the Series.
However, contractual charges do apply. As indicated in the tables below,
immediately upon effectiveness of the Reorganizations, the "Total Annual Fund
Operating Expenses" for the combined Surviving Series are expected to be
slightly lower than the "Total Annual Fund Operating Expenses" for each of the
Merging Series.
4
PHOENIX-
ANNUAL SERIES OPERATING EXPENSES ALLIANCE/BERNSTEIN PHOENIX-MFS PRO FORMA
(expenses that are deducted from series SURVIVING GROWTH + VALUE INVESTORS TRUST COMBINED
series assets) SERIES(1) SERIES(2) SERIES(3) SERIES
------------- ------------- ------------- -------------
Management Fees 0.70% 0.85% 0.75% 0.70%
Distribution and Service (12b-1) Fees None None None None
Other Expenses 0.31% 1.80% 3.17% 0.34%
Total Annual Series Operating Expenses 1.01% 2.65% 3.92% 1.04%
The following example illustrates the impact of the above fees and expenses
on an account with an initial investment of $10,000, based on the expenses shown
above. It assumes a 5% annual return, the reinvestment of all dividends and
distributions and "Annual Trust Operating Expenses" remaining the same each
year. The example is offered to show the costs of investing in the Surviving and
Merging Series. This example is hypothetical; actual Trust expenses and returns
vary from year to year, and may be higher or lower than those shown.
Fees and expenses if you redeemed your shares at the end of each time period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Surviving Series $ 103 $ 320 $ 556 $ 1,232
Phoenix-Alliance/Bernstein Growth + Value Series $ 268 $ 824 $ 1,405 $ 2,984
Phoenix-MFS Investors Growth Stock Series $ 394 $ 1,195 $ 2,014 $ 4,139
Pro Forma Combined Surviving Series $ 106 $ 331 $ 574 $ 1,271
Note: Actual expenses for the Merging Series may be lower than those shown in
the example above since the expense levels used to calculate the figures shown
do not include reimbursements of expenses by the Merging Series' advisor.
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
EXPENSES. ACTUAL EXPENSES MAY BE HIGHER OR LOWER THAN SHOWN.
- ----------------------------
(1) The Surviving Series' investment advisor has voluntarily agreed to
reimburse the Surviving Series' expenses, other than the management fees,
to the extent that such expenses exceed 0.25% of the Surviving Series'
average net assets (the "expense cap"). Therefore, the Surviving Series'
operating expenses after reimbursement were 0.95% for the period ended
December 31, 2003. The expense cap noted above may be changed or eliminated
at any time without notice.
(2) The Merging Series' investment advisor has voluntarily agreed to reimburse
the Merging Series' expenses, other than the management fees, to the extent
that such expenses exceed 0.25% of the Series' average net assets (the
"expense cap"). The Merging Series operating expenses after reimbursement
were 1.10% for the year ended December 31, 2003. The expense cap noted
above may be changed or eliminated at any time without notice.
(3) The Merging Series' investment advisor has voluntarily agreed to reimburse
the Series' expenses, other than the management fees, to the extent that
such expenses exceed 0.25% of the Series' average net assets (the "expense
cap"). The Merging Series operating expenses after reimbursement were 1.00%
for the year ended December 31, 2003. The expense cap noted above may be
changed or eliminated at any time without notice.
5
PRINCIPAL RISK FACTORS
The Surviving Series' investment objective and policies are similar to those
of each Merging Series. An investment in the Surviving Series is subject to some
of the same specific risks as an investment in each Merging Series. The
following highlights the principal similarities and differences between the
principal risk factors associated with an investment in the Surviving Series as
contrasted with those associated with each Merging Series; it is qualified in
its entirety by the more extensive discussion of risk factors in the
Prospectuses and Statements of Additional Information of the Surviving Series
and the Merging Series, respectively.
There are differences between the risks of investing in each of the Merging
Series and investing in the Surviving Series. An investment in the
Phoenix-Alliance/Bernstein Growth + Value Series has growth stock investment
risk, value investing risk, reduced diversification risk, derivative investment
risk, and convertible securities risk, while the Surviving Series does not. An
investment in the Surviving Series has foreign currency risk and larger market
capitalization risk, while the Alliance/Bernstein Growth + Value Series does
not. The two series share equity securities investing risk and foreign investing
risk. An investment in the Surviving Series, therefore, may tend to be more
volatile than an investment in the Alliance/Bernstein Growth + Value Series,
with the value of an investment in the Surviving Series rising faster when
markets rise and dropping more sharply when markets fall.
An investment in the Phoenix-MFS Investors Trust Series and an investment in
the Surviving Series are each subject to equity securities investing risk,
foreign currency risk, foreign investing risk, and larger market capitalization
risk. An investment in the Phoenix-MFS Investors Trust Series is subject to
convertible securities risk, while the Surviving Series is not.
An investment in the Surviving Series is subject to specific risks arising
from the types of securities in which the Surviving Series invests and the
general risks arising from investing in any mutual fund. You can lose money by
investing in the Surviving Series. There is no assurance that the Surviving
Series will meet its investment objective.
GENERAL
The value of the investments of the Merging Series and the Surviving Series
that support their share values can decrease. If between the time shares are
purchased and the time shares are sold the value of the Series' investments
decreases, you will lose money.
Investment values can decrease for a number of reasons. Conditions affecting
the overall economy, specific industries or companies in which your Series
invests can be worse than expected and investments may fail to perform as the
Series' investment advisor expects. As a result, the value of shares may
decrease.
Each Series' investments are subject generally to market risk and the risk of
selecting underperforming securities and asset classes, which may adversely
affect the Series and lead to loss of principal.
The following chart indicates the primary investment risks of the Surviving
Series and of the Merging Series. Descriptions of the risks of the Surviving
Series can be found below.
PHOENIX-ALLIANCE/BERNSTEIN PHOENIX-MFS INVESTORS
SURVIVING SERIES GROWTH + VALUE SERIES TRUST SERIES
---------------- --------------------- ------------
Equity Securities Investment Risk Equity Securities Investment Risk Equity Securities Investment Risk
Foreign Investment Risk Growth Stock Investment Risk Larger Market Capitalization Risk
Foreign Currency Risk Value Investing Risk Foreign Investment Risk
Larger Market Capitalization Risk Reduced Diversification Risk Foreign Currency Risk
Foreign Investment Risk Convertible Securities Investment Risk
Derivative Investment Risk
Convertible Securities Investment Risk
6
Convertible Securities Investment Risk
A convertible security is a bond, debenture, note, preferred stock or other
security that may be converted into or exchanged for a prescribed amount of
common stock of the issuer at a predetermined time(s), price(s) or price
formula(s). A convertible security entitles the owner to receive interest paid
or accrued on a debt security or dividends paid on preferred stock until the
security matures or is converted to common stock. Convertible securities have
several unique investment characteristics, such as: (i) yields higher than
common stocks but lower than comparable nonconvertible securities; (ii)
typically less fluctuation in value than the "underlying" common stock, that is,
the common stock that the investor receives if he or she converts; and (iii) the
potential for capital appreciation if the market price of the underlying common
stock increases.
Convertible securities may be subject to redemption at the option of the
issuer. If a security is called for redemption, the series may have to redeem
the security, convert it into common stock or sell it to a third party at a
price and time that is not beneficial for the series.
Derivative Investment Risk
The Series may use various instruments that derive their values from those of
specific securities, indexes, currencies or other points of reference for both
hedging and non-hedging purposes. Derivatives include, but are not limited to,
futures, options, forward contracts, swaps, and structured notes. These
derivatives, including those used to manage risk, are themselves subject to
risks of the different markets in which they trade and, therefore, may not serve
their intended purpose.
These investments may not protect the Series from losses, they may decrease
overall return, and they could, in unusual circumstances, expose the Series to
losses that could be unlimited. A Series' performance may be worse than if it
did not make such investments.
If the prices for derivatives and prices in the cash market do not correlate
as expected or if expectations about interest rate, exchange rate or general
market movements are incorrect, a Series' returns may not be as high as they
would be if it did not invest in these securities. There is also a risk that the
market for reselling derivatives may be limited or nonexistent. A Series could
incur unlimited losses if it cannot liquidate its derivatives investments.
Decisions about the nature and timing of derivative transactions may result in
losses when other investors' decisions about the same derivatives result in
gains. In addition, some derivatives are subject to the risk that the
counterparty to such transaction may not perform as expected.
Equity Securities Investment Risk
In general, prices of equity securities are more volatile than those of
fixed-income securities. The prices of equity securities will rise and fall in
response to a number of different factors. In particular, equity securities will
respond to events that affect entire financial markets or industries (changes in
inflation or consumer demand, for example) and to events that affect particular
issuers (news about the success or failure of a new product, for example). Some
Series may invest in stock offered in Initial Public Offerings ("IPOs"), which
typically have less public information available. Investment returns from IPOs
may be highly volatile, and may be subject to varying patterns of trading
volume, and these securities may, at times, be difficult to sell. In addition,
from time to time, a Series may purchase shares in IPOs and then immediately
sell them. This practice will increase portfolio turnover rates and may increase
costs to the Series, affecting series performance.
Foreign Investment Risk
Foreign investments could be more difficult to sell than U.S. investments.
They also may subject a Series to risks different from investing in domestic
securities. Investments in foreign securities may involve difficulties in
receiving or interpreting financial and economic information, possible
imposition of taxes, higher brokerage and custodian fees, and possible currency
exchange controls or other government restrictions, including possible seizure
or nationalization of foreign deposits or assets. Foreign securities may also be
more volatile in price than U.S. securities. There may also be difficulty in
invoking legal protections across borders. In addition, investment in
emerging-market countries presents risks in greater degree than those presented
by investment in foreign issuers of countries with developed securities markets
and more advanced regulatory systems.
7
Some foreign securities are issued by companies organized outside the United
States and are traded only or primarily in trading markets outside the United
States. These foreign securities can be subject to most, if not all, of the
risks of foreign investing. Some foreign securities are issued by companies
organized outside the United States but are traded in U.S. securities markets
and are denominated in U.S. dollars. For example, American Depositary Receipts
and shares of some large foreign-based companies are traded on the principal
U.S. exchanges. Other securities are not traded in the United States but are
denominated in U.S. dollars. These securities are not subject to all the risks
of foreign investing. For example, foreign trading market and currency risks
will not apply to dollar-denominated securities traded in U.S. securities
markets.
Foreign Currency Risk
Changes in foreign exchange rates will affect the value of those securities
denominated or quoted in currencies other than the U.S. dollar. The forces of
supply and demand in the foreign exchange markets determine exchange rates and
these forces are in turn affected by a range of economic, political, financial,
governmental and other factors. Exchange-rate fluctuations can affect a Series'
net asset value (share price) and dividends either positively or negatively,
depending upon whether foreign currencies are appreciating or depreciating in
value relative to the U.S. dollar. Exchange rates fluctuate over both the short
and long terms. In addition, when certain foreign countries experience economic
difficulties, there is an increased risk that the foreign government may impose
restrictions on the free exchange of its currency.
Growth Stock Investment Risk
Some of the Series invest in growth stocks. Because growth stocks typically
make little or no dividend payments to shareholders, investment return is based
on a stock's capital appreciation, making return more dependent on market
increases and decreases. Growth stocks are therefore more volatile than
non-growth stocks to market changes, tending to rise faster when markets rise
and drop more sharply when markets fall.
Larger Market Capitalization Risk
Companies with large capitalizations go in and out of favor based on market
and economic conditions. Larger companies tend to be less volatile than
companies with smaller market capitalizations. In exchange for this potentially
lower risk, a Series' value may not rise as much as the value of Series that
emphasize companies with smaller market capitalizations.
Reduced Diversification Risk
The Series invests in securities of a limited number of companies, which
makes them more sensitive to changes in the market value of a single issuer or
industry in the Series' portfolios. To the extent that a Series is in fact not
well diversified, it may be more vulnerable to adverse economic, political or
regulatory developments affecting a single issuer than would be the case if it
were more broadly diversified. The net asset value of the Series may fluctuate
substantially. The Series may not be appropriate for short-term investors.
Value Investing Risk
The value approach to investing involves the risk that the value of the
security will not be recognized for an unexpectedly long period of time, and
that the security is not undervalued but is appropriately priced due to
fundamental problems not yet apparent.
THE PROPOSED REORGANIZATIONS
AGREEMENTS AND PLANS OF REORGANIZATION
The terms and conditions under which the proposed Reorganizations may be
consummated are set forth in the respective Agreements. Significant provisions
of the Agreements are summarized below. This summary, however, is
8
qualified in its entirety by reference to the Agreements, forms of which are
attached to this Prospectus/Proxy Statement as Appendices A and B.
With respect to the Phoenix-Alliance/Bernstein Growth + Value Series and the
Phoenix-MFS Investors Trust Series Reorganizations, the Agreements contemplate:
o the acquisition by the Surviving Series, on the closing date of the
Reorganization, of all of the assets of the Phoenix-Alliance/Bernstein
Growth + Value Series and the Phoenix-MFS Investors Trust Series,
respectively, in exchange solely for shares of the Surviving Series and
the assumption by the Surviving Series of all liabilities of the
Phoenix-Alliance/Bernstein Growth + Value Series and the Phoenix-MFS
Investors Trust Series;
o the pro rata distribution of shares of the Surviving Series to the
shareholders of the Phoenix-Alliance/Bernstein Growth + Value Series and
Phoenix-MFS Investors Trust Series in exchange for their respective shares
of the Phoenix-Alliance/Bernstein Growth + Value Series and Phoenix-MFS
Investors Trust Series; and
o the complete liquidation of the Phoenix-Alliance/Bernstein Growth + Value
Series and the Phoenix-MFS Investors Trust Series as provided in the
respective Agreements.
The assets of the Merging Series to be acquired by the Surviving Series
include all property, including, without limitation, all cash, securities, and
dividends or interest receivables which are owned by the Merging Series and any
deferred or prepaid expenses shown as an asset on the books of the Merging
Series on the closing date of the Reorganizations. The Surviving Series will
assume all liabilities of the Merging Series as of the closing date, including
all accrued expenses, costs, charges, and reserves of the Merging Series
reflected on the unaudited statement of assets and liabilities as of the closing
date. The closing of the Reorganizations will occur following satisfaction (or
waiver) of the conditions to closing set forth in the Agreements, or such later
date as the parties may agree.
The value of the Merging Series' assets to be acquired and the Merging
Series' liabilities to be assumed by the Surviving Series, and the net asset
value of shares of the Surviving Series, 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 Series' then-current Prospectus
and Statement of Additional Information. The number of shares of the Surviving
Series to be issued to the Shareholders of each Merging Series will be
determined by dividing (a) the value of the aggregate net assets of each Merging
Series, respectively, by (b) the net asset value of one share of the Surviving
Series.
On the closing date, the Merging Series will liquidate and distribute pro
rata to their shareholders of record the Surviving Series shares received by the
Merging Series in exchange for their respective shares in the Merging Series.
This liquidation and distribution will be accomplished by opening an account on
the books of the Surviving Series in the name of each shareholder of record of
the Merging Series and by crediting to each account the shares due pursuant to
the Reorganizations. Every Merging Series shareholder will own shares of the
Surviving Series immediately after each Reorganization, the value of which will
be equal to the value of the shareholder's Merging Series shares on the closing
date.
At or prior to the closing date, the Merging Series will declare a dividend
or dividends that, together with all previous such dividends, will have the
effect of distributing to the Merging Series shareholders of record all of the
Merging Series' investment company taxable income for all taxable years ending
at or prior to the closing date 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 Surviving Series has agreed
to indemnify and hold harmless those Trustees who are not "interested persons"
of the advisor or distributor of the Merging Series (the "Independent Trustees")
from and against any and all claims, costs, expenses (including reasonable
attorneys' fees), losses and
9
liabilities of any sort or kind (collectively, "Liability") that 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 Agreements, 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 each Reorganization is subject to a number of conditions
set forth in the Agreements. Certain of these conditions may be waived by the
Board of Trustees, or by an authorized officer of the Trust, as appropriate.
The significant conditions which may not be waived are: (a) the receipt by
the Trust of an opinion of counsel that the reorganizations will qualify as a
tax-free reorganization described in Section 368(a) of the Code for Federal
income tax purposes, and (b) the approval of the Agreement by the shareholders
of the Phoenix-Alliance/Bernstein Growth + Value Series or the Phoenix-MFS
Investors Trust Series, as applicable. The Agreements may be terminated and the
Reorganizations abandoned at any time, before or after approval by the
respective shareholders of the Phoenix-Alliance/Bernstein Growth + Value Series
or the Phoenix-MFS Investors Trust Series, as applicable, prior to the closing
date, by resolution of the Board of Trustees. In addition, the Agreements may be
amended by mutual agreement, except that no amendment may be made to the
Agreements subsequent to the Special Meeting that would change the provisions
for determining the number of Surviving Series shares to be issued to respective
shareholders of the Phoenix-Alliance/Bernstein Growth + Value Series or the
Phoenix-MFS Investors Trust Series without their further approval, as
applicable.
REASONS FOR THE REORGANIZATIONS
The proposal for the Reorganizations is the outcome of deliberations by the
Trustees of the Trust. Management recommended that the Trustees consider the
benefits that the shareholders would realize if each of the Merging Series were
to be combined with the Surviving Series. In response to that recommendation,
the independent Trustees of the Trust requested that management outline specific
Reorganization proposals for their consideration and provide an analysis of the
specific benefits that shareholders would realize from each proposal.
In the course of their review, the Trustees noted that the Reorganizations
would be a means of combining three Series with similar investment objectives
and principal investment strategies and would permit the shareholders of the
Merging Series to pursue their investment goals in a Surviving Series which,
after the completion of the Reorganizations, is anticipated to be larger than
each Merging Series. In reaching this conclusion, the Board considered a number
of additional factors, including, but not limited to, the following:
o the potential benefits of the Reorganizations to shareholders of the
Surviving Series and the respective Merging Series, including that the
Reorganizations could result in economies of scale through the spreading
of fixed costs over a larger asset base;
o the terms and conditions of the proposed Agreements, and that the
proposed Agreements will not result in dilution of any shareholder
interests;
o the total expense ratio of the combined Surviving Series following the
Reorganizations is projected to be lower than the current total expense
ratio of each Merging Series;
o the compatibility of investment objectives, policies, restrictions and
investment holdings among the Merging Series and the Surviving Series;
o the ability to better manage asset flows in the Surviving Series because
of its anticipated greater size;
o the comparable performance of the Series;
10
o the terms and conditions of the Agreements will have minimal effect on the
price of the outstanding shares of each Series;
o the Reorganizations provide for continuity of distribution and shareholder
servicing arrangements; and
o the Reorganizations are not expected to result in the recognition of any
gain or loss for Federal income tax purposes, either to the Merging Series
or the Surviving Series and should not adversely impact the tax treatment
of variable products invested in whole or in part in any of the Series.
After considering these and other factors, the Trustees, including the
Independent Trustees, unanimously concluded at a Special Meeting held on May 11,
2004, that the Reorganizations are fair and reasonable and would be in the best
interests of each Merging Series and the Surviving Series and their respective
shareholders and that the interests of the Series' shareholders will not be
diluted as a result of the transactions contemplated by the Reorganizations,
recognizing that there can be no assurance that any operating efficiencies or
other benefits will in fact be realized. The Trustees unanimously voted to
approve the Reorganizations and authorized the officers of the Trust to submit
the Reorganization proposals to shareholders of the Merging Series for
consideration.
FEDERAL INCOME TAX CONSEQUENCES
McDermott Will & Emery LLP, special tax counsel to the Trust, 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, each reorganization
will qualify as a tax-free reorganization described in Section 368(a) of the
Code. Accordingly, with respect to each Reorganization:
o no gain or loss will be recognized by either Merging Series on the
transfer of the assets of the respective Merging Series to the Surviving
Series solely in exchange for Surviving Series shares and the assumption
by the Surviving Series of all liabilities of the respective Merging
Series, or upon the distribution of Surviving Series shares to the Merging
Series insurance company shareholders in exchange for their shares of the
Merging Series;
o the tax basis of the respective Merging Series' assets acquired by the
Surviving Series will be the same as the tax basis of such assets to the
respective Merging Series immediately prior to the Reorganization, and the
holding period of the assets of the respective Merging Series in the hands
of the Surviving Series will include the period during which those assets
were held by the respective Merging Series; and
o no gain or loss will be recognized by the Surviving Series upon the
receipt of the assets of the respective Merging Series solely in exchange
for the Surviving Series shares and the assumption by the Surviving Series
of all liabilities of the respective Merging Series.
The receipt of an opinion that the reorganizations will qualify as
tax-free reorganizations described in Section 368(a) of the Code is a condition
to the consummation of the Reorganizations. The Trust has not obtained an
Internal Revenue Service ("IRS") private letter ruling regarding the Federal
income tax consequences of the Reorganizations, and the IRS is not bound by
advice of counsel. You are not directly a shareholder of either Merging Series
but, instead, some or all of your variable life insurance or variable annuity
contract is invested in one or both of the Merging Series. We also believe,
however, that the Reorganizations should not adversely affect the tax treatment
of your variable contract.
It is possible, although unlikely in our view, that, because the Merging
Series will no longer be an available Series underlying your variable contract,
your Contract could be considered changed in a manner that causes the contract
or policy to be considered newly issued for Federal income tax purposes. In such
a case, your Contract will be subject to Federal income tax rules in effect on
the effective date of the Reorganizations instead of the Federal income tax
rules in effect on the issue date of your Contract, which could have been more
favorable.
11
Shareholders of the Merging Series should consult their tax advisors
regarding the effect, if any, of the proposed Reorganizations in light of their
individual circumstances. Since the foregoing discussion relates only to the
Federal income tax consequences of the Reorganizations, shareholders of the
Merging Series should also consult tax advisors as to state and local tax
consequences, if any, of the Reorganizations.
It is also possible that if the reorganization were not tax free, which as
indicated above is not expected, and the Surviving Series as a result failed to
qualify as a regulated investment company, the diversification rules of Code
Section 817(h) might be violated. In such a case, income on your contract could
be currently taxable to you.
CAPITALIZATION
The following table sets forth the capitalization of the Surviving Series and
each Merging Series, and on a pro forma basis for the combined Surviving Series
as of December 31, 2003, giving effect to the proposed acquisition of net assets
of each Merging Series at net asset value.
PHOENIX-
ALLIANCE/BERNSTEIN PHOENIX-MFS PRO FORMA
SURVIVING GROWTH + VALUE INVESTORS TRUST COMBINED
SERIES SERIES SERIES SERIES
------ ------ ------ ------
Net assets $107,717,811 $9,345,902 $7,498,519 $124,562,232
Net asset value per share $11.06 $10.01 $10.00 $11.06
Shares outstanding 9,742,784 933,312 749,672 11,265,788
The table set forth above should not be relied on to determine the number of
Surviving Series shares to be received in the Reorganizations. The actual number
of shares to be received will depend upon the net asset value and number of
shares outstanding of each Merging Series and the Surviving Series at the time
of the Reorganizations.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion is a summary of some of the more significant
similarities and differences in the investment objectives, policies and
restrictions of the Surviving Series and each Merging Series. The discussion
below is qualified in its entirety by the discussion elsewhere in this
Prospectus/Proxy Statement, and in the Trust's Prospectus and Statement of
Additional Information.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of the Surviving Series and each Merging Series are
similar. The investment objectives of the Surviving Series and each Merging
Series are "fundamental policies" which may not be changed without the approval
of the holders of at least a "majority of the outstanding voting shares" of the
Trust. A majority of the outstanding voting shares is defined in the 1940 Act as
the lesser of (a) the vote of the holders of 67% or more of the outstanding
voting shares of the Series present in person or by proxy, if the holders of
more than 50% of the outstanding voting shares of that Series are present in
person or by proxy, or represented by proxy, or (b) the vote of the holders of
more than 50% of the outstanding voting shares of the Series.
The principal investment strategies of the Surviving Series are also similar
to the principal investment strategies of the Merging Series. There are some
differences, however, between the investment strategies of the Merging and
Surviving Series. Several principal investment strategies of the
Phoenix-Alliance/Bernstein Growth + Value Series are not employed by the
Surviving Series, including investment in growth stocks, convertible securities,
rights and warrants, options, and futures contracts. Furthermore, the portfolio
selection method used by the subadviser to the Phoenix-Alliance/Bernstein Growth
+ Value Series may result in a higher portfolio turnover rate than that of the
Surviving Series. High portfolio turnover rates may increase costs to the Series
and may negatively affect fund performance. The principal investment strategies
for the Phoenix-MFS Investors Trust Series include investment in preferred
stocks and convertible securities, while the Surviving Series does not
principally invest in these instruments.
12
THE SURVIVING SERIES - PHOENIX-OAKHURST GROWTH AND INCOME SERIES
- -----------------------------------------------------------------------------------------------------------------------
Investment Objective Dividend growth, current income and capital appreciation.
- ------------------------------------------------------------- ---------------------------------------------------------
Principal Investment Strategies o The Series invests in equity securities, primarily
common stocks. Under normal circumstances, the
Series invests at least 65% of its assets in equity
securities.
o The Series invests in a diversified portfolio of
securities of primarily U.S. companies. The Series
is designed to invest in equity securities. Under
normal circumstances, the Series intends to be
"fully invested" and will attempt to limit its
holdings of cash and short-term investments to not
more than 2% of its assets.
o The Series seeks to outperform the S&P 500(R) Index
(S&P 500) in total return and dividend yield. The
S&P 500 total return can be negative. When this
happens, the Series may outperform the S&P 500 but
still have a negative return. In that case the value
of the shares would likely decline rather than
increase. The Series may also fail to outperform the
S&P 500.
o The advisor uses a quantitative value strategy that
selects equity securities primarily from among the
1,500 largest companies traded in the United States
based on value criteria such as price to earnings,
sales and cash flows and growth criteria such as
earnings per share. This strategy emphasizes
securities of companies relatively undervalued to
the market in general and with improving
fundamentals.
o The Series may invest up to 20% of its assets in
securities of foreign (non-U.S.) issuers. However,
under normal circumstances, the Series will not
invest more than 10% of its total assets in
securities of foreign issuers.
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13
MERGING SERIES - PHOENIX-ALLIANCE/BERNSTEIN GROWTH + VALUE SERIES
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Investment Objective Long term capital growth.
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Principal Investment Strategies o The Series invests primarily in common stocks of
large capitalization U.S. companies included in the
Russell 1000(R) Index ("Russell 1000"). The Russell
1000 is a market capitalization-weighted index that
measures the performance of the 1,000 largest U.S.
companies.
o Normally, about 60-105 companies are represented in
the Series, with 25-35 companies primarily from the
Russell 1000(R) Growth Index ("Growth Index")
constituting approximately 50% of the Series assets,
and 40-70 companies primarily from the Russell
1000(R) Value Index ("Value Index") constituting the
remainder of the Series assets. Daily cash flows are
divided between the two portfolio segments for
purposes of maintaining the targeted 50%/50%
allocation between growth and value stocks. While it
is not expected that the allocation of assets
between the Series' growth and value assets will
deviate more than 10% from the target allocation, it
is possible that this deviation may be higher due to
factors such as market fluctuation, economic
conditions, corporate transactions and declaration
of dividends. In the event the allocation of the
Series' assets between growth and value stocks
differs by more than 10% from the target 50%/50%
allocation, the subadvisor will rebalance each
portfolio segment's assets in order to maintain the
target allocation. As a result, assets may be
allocated from the portfolio segment that has
appreciated more or depreciated less to the other.
Rebalancing entails transaction costs which over
time may be significant.
o The Growth Index measures the performance of the
Russell 1000 companies with higher price-to-book
ratios and higher forecasted growth values. The
Value Index measures the performance of the Russell
1000 companies with lower price-to-book ratios and
lower forecasted growth values. This combination of
growth stocks and value stocks is intended to
enhance performance of the Series over time, and
reduce the Series' overall risk in comparison to
funds which invest exclusively in growth or value
stocks. During particular periods, the Series may
outperform or underperform funds which invest
exclusively in growth or in value stocks.
o The subadvisor's investment strategy for the portion
of the Series assets invested in growth stocks
emphasizes stock selection. The subadvisor relies
heavily upon the fundamental analysis and rigorous
research of its internal research staff. The
subadvisor
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selects investments based on strong management,
superior industry positions, excellent balance
sheets and superior earnings growth, where all of
these strengths have not been reflected in the
company's stock price. In managing the series, the
subadvisor seeks to take advantage of market
volatility. During market declines, the subadvisor
will add to positions, causing the Series to become
somewhat more aggressive. Conversely, in rising
markets, the subadvisor will trim or eliminate
positions and as a result the series will become
more conservative. As of December 31, 2003, the
market capitalization range of the companies, in
which the Series invested was $2.2 billion to $311
billion.
o The subadvisor's method of selecting the investments
for the portion of the Series' assets invested in
value stocks is to measure each stock's long-term
expected return by comparing the price of the
security to the company's long-term cash flows. The
subadvisor will only purchase those stocks that it
has above-average confidence in the reliability of
its analysts' forecasts. The subadvisor may delay
its purchase of securities if recent weakness in the
stock or negative earnings revisions by analysts
indicate that the stock price is likely to decline
in the near future, and it may delay its sale of
securities if recent strength in the stock or upward
earnings revisions indicate the stock is likely to
rise soon. The subadvisor will control risk within
the value portion of the Series by reviewing whether
there is undue portfolio exposure to industry sector
and other risk factors. The subadvisor will take
more risk when unusually large value distortions
within the value realm create unusually large
opportunities to add returns, and it will take less
risk when the opportunities are limited.
o In addition to investing in equity securities, the
Series also may:
- invest up to 20% of the growth portion of its net
assets in convertible securities;
- invest up to 5% of the growth portion of its net
assets in rights or warrants;
- invest up to 15% of its total assets in foreign
securities (For these purposes, a foreign security
is a security issued by a non-U.S. company, which is
defined as a company that: (i) is organized outside
the United States; (ii) has its principal place of
business outside the United States; and (iii) issues
securities traded principally in a foreign country.
Companies that do not fall within the definition of
a non-U.S. company would be considered a U.S.
company and therefore not subject to the above
limitation on foreign securities. American
Depositary Receipts are not considered foreign
securities for
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15
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purposes of the 15% limitation set forth above and
may be purchased by the series.); and purchase and
sell exchange-traded index options and stock index
futures contracts, write covered exchange-traded
call options on its securities up to 15% of the
growth portion of its total assets, and purchase
exchange-traded call and put options on common
stocks up to, for all options, 10% of the growth
portion of its total assets.
o The subadvisor's portfolio selection method may
result in a higher portfolio turnover rate. High
portfolio turnover rates may increase costs to the
Series, may negatively affect fund performance.
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MERGING SERIES - PHOENIX-MFS INVESTORS TRUST SERIES
- ----------------------------------------------------------------------------------------------------------------------
Investment Objective Long-term growth of capital; secondarily to provide
reasonable current income
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Principal Investment Strategies o The Series invests, under normal market conditions,
at least 65% of its assets in common stocks and
related securities, such as preferred stocks,
convertible securities and depositary receipts for
those securities. These securities may be listed on
a securities exchange or traded in the
over-the-counter markets.
o While the Series may invest in companies of any
size, the Series generally focuses on companies with
larger market capitalizations that the subadvisor
believes have sustainable growth prospects and
attractive valuations based on current and expected
earnings or cash flow.
o The Series also seeks to generate gross income equal
to approximately 90% of the dividend yield on the
S&P 500 Index.
o The subadvisor uses a bottom-up, as opposed to a
top-down, investment style in managing the Series.
This means that securities are selected based upon
fundamental analysis (such as an analysis of
earnings, cash flows, competitive position and
management's abilities) performed by the Series'
portfolio manager and the subadvisor's large group
of equity research analysts.
o The Series may invest up to 20% of its assets in
foreign equity securities, through which it may have
exposure in foreign currencies.
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16
CERTAIN INVESTMENT RESTRICTIONS
Each Series is subject to identical investment restrictions that restrict the
scope of their investments. These investment restrictions are "fundamental"
policies. A "fundamental" policy is defined in the 1940 Act to mean that the
restriction cannot be changed without the vote of a "majority of the outstanding
voting shares" of the Series (as that term is defined in the 1940 Act).
None of the Series' may:
(1) with respect to 75% of its total assets, purchase securities of an
issuer (other than the U.S. Government, its agencies,
instrumentalities or authorities or repurchase agreements
collateralized by U.S. Government securities and other investment
companies), if: (a) such purchase would, at the time, cause more than
5% of the Series' total assets, taken at market value, to be invested
in the securities of such issuer; or (b) such purchase would, at the
time, result in more than 10% of the outstanding voting securities of
such issuer being held by the Series;
(2) purchase securities in a given industry if, after giving effect to the
purchase, more than 25% of its total assets would be invested in the
securities of one or more issuers conducting business activities in
the same industry (excluding the U.S. Government or its agencies or
instrumentalities);
(3) issue senior securities in contravention of the 1940 Act. Activities
permitted by SEC exemptive orders or staff interpretations shall not
be deemed prohibited by this restriction;
(4) borrow money, except (i) in amounts not to exceed one third of the
value of the Series' total assets (including the amount borrowed) from
banks, and (ii) up to an additional 5% of its total assets from banks
or other lenders for temporary purposes. For purposes of this
restriction, (a) investment techniques such as margin purchases, short
sales, forward commitments, and roll transactions, (b) investments in
instruments such as futures contracts, swaps, and options, and (c)
short-term credits extended in connection with trade clearances and
settlement shall not constitute borrowing;
(5) underwrite the securities issued by other persons, except to the
extent that, in connection with the disposition of portfolio
securities, a Series may be deemed to be an underwriter under the
applicable law;
(6) purchase or sell real estate, except that a Series may (i) acquire or
lease office space for its own use, (ii) invest in securities of
issuers that invest in real estate or interests therein, (iii) invest
in mortgage-related securities and other securities that are secured
by real estate or interests therein, or (iv) hold and sell real estate
acquired by the Series as a result of the ownership of securities;
(7) make loans, except that a Series may (i) lend portfolio securities,
(ii) enter into repurchase agreements, (iii) purchase all or a portion
of an issue of debt securities, bank loan participation interests,
bank certificates of deposit, bankers' acceptances, debentures or
other securities, whether or not the purchase is made upon the
original issuance of the securities, and (iv) participate in an
interfund lending program with other registered investment companies;
and/or
(8) purchase or sell commodities or commodity contracts, except a Series
may purchase and sell derivatives (including, but not limited to,
options, futures contracts and options on futures contracts) whose
value is tied to the value of a financial index or a financial
instrument or other asset (including, but not limited to, securities
indices, interest rates, securities, currencies and physical
commodities).
If any percentage restriction described above for the Series is adhered to at
the time of investment, a subsequent increase or decrease in the percentage
resulting from a change in the value of the Series' assets will not constitute a
violation of the restriction.
17
COMPARATIVE INFORMATION ON PURCHASES AND EXCHANGES
The shares of the Trust are not directly offered to the public. Shares of the
Trust are currently offered to certain separate accounts to fund variable
accumulation annuity contracts or variable life insurance policies issued by
Phoenix Life Insurance Company, PHL Variable Insurance Company, and Phoenix Life
and Annuity Company and their separate accounts. Investments in the Trust may
occur only by purchasing a Contract and directing the allocation of your
purchase payment(s) to the subaccount(s) corresponding to a Series. The
subaccounts, in turn, invest in shares of the Trust. Not all Series may be
offered through a particular Contract.
Phoenix Equity Planning Corporation ("PEPCO") is an indirect subsidiary of
The Phoenix Companies, Inc. ("PNX"). PNX is the parent company of PLIC. PEPCO is
also a broker-dealer registered with relevant regulators, and serves as national
distributor of variable products issued by these entities. Contracts may be
purchased through broker-dealers registered with applicable regulatory
authorities and who have entered into a sales agreement with PEPCO. Sales
commissions will be paid to registered representatives based on the amount of
premiums received in connection with the sale of variable products, subject to
governing law. PLIC and its insurance company affiliates also pay commissions to
PEPCO based on the amount of premiums received in connection with the sale of
variable products, subject to governing law.
There are no load charges or fees imposed upon shareholders of the Series.
However, contractual charges do apply. In connection with the proposed
Reorganizations, no sales charges are imposed. Shares of the Series are offered
to the separate accounts at a price equal to their respective net asset value
per share.
Because excessive trading can hurt fund performance and therefore be
detrimental to all policyholders, Phoenix reserves the right to temporarily or
permanently terminate exchange privileges or reject any specific order from
anyone whose transactions seem to follow a timing pattern, including those who
request more than one exchange out of a subaccount within any 30-day period.
Phoenix will not accept batch transfer instructions from registered
representatives (acting under powers of attorney for multiple contract owners),
unless we have entered into a third-party transfer service agreement with the
registered representative's broker-dealer firm.
COMPARATIVE INFORMATION ON DISTRIBUTIONS AND REDEMPTIONS
Each Series offers the same distributions and redemptions. The
Phoenix-Alliance/Bernstein Growth + Value Series and Phoenix-Oakhurst Growth and
Income Series distribute Net investment income quarterly and Phoenix-MFS
Investors Trust Series distributes net investment income semi-annually. Each
Series distributes net realized capital gains, if any, at least annually. All
dividends and distributions with respect to the shares of the Merging Series and
the Surviving Series are paid in additional shares of the respective Series. 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 Series in effect
on the record date. Each Series currently offers shareholders identical exchange
privileges. Shareholders of each Series may exchange their shares for shares of
a corresponding Series of the Trust.
Shares of the Surviving Series and each Merging Series 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. Payment of redemption proceeds for redeemed shares are generally
made within seven days after receipt of a redemption request in proper form and
documentation, provided that each check used for purchases of shares has been
cleared for payment.
Because each Series offers the same distribution and redemption services,
after the closing, the same services will continue to be available to the
shareholders of each Merging Series but in their capacity as shareholders of the
Surviving Series.
18
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
The following is a summary of certain provisions of the Amended Declaration
of Trust of each Merging Series and the Surviving Series.
FORM OF ORGANIZATION
Each Series is a Series of The Phoenix Edge Series Fund, a business trust
organized under the laws of the Commonwealth of Massachusetts, pursuant to a
Declaration of Trust dated February 18, 1986, as amended. The operations of
these Series are governed by the Declaration of Trust and by Massachusetts law.
The shares of the Trust are registered with the SEC as an open-end management
investment company and are subject to the provisions of the 1940 Act and the
rules and regulations of the SEC thereunder. The Trustees may generally
authorize mergers, consolidations, share exchanges and reorganizations of a new
Series or of each respective Series with another Series or other business
organization.
SHARES
The Declaration of Trust authorizes the Trustees to issue an unlimited number
of shares of beneficial interest of each Series. The Trust currently has
thirty-two Series outstanding. The Trustees of the Trust may also create
additional series in the future without shareholder approval. 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.
Shares (including fractional shares) of each Series have equal rights with
regard to voting redemptions, dividends, distributions and liquidations with
respect to that Series. All voting rights of the separate accounts as
shareholders are passed through to the Contract/policyholders. The assets and
proceeds received by the Trust from the issue or sale of shares of a Series are
allocated to that Series and constitute the rights of that Series, subject only
to the rights of creditors. Any underlying assets of a Series are required to be
segregated on the books of account of the Trust. These assets are to be used to
pay the expenses of the Series as well as a share of the general expenses of the
Trust.
MEETINGS
Under the Declaration of Trust and Massachusetts business trust laws, the
Trust is not required to hold annual shareholder meetings. The Trustees or
President of the Trust 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 the Trustees or upon written request by
shareholders holding at least ten percent of the outstanding shares entitled to
vote.
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 Declaration of
Trust limits shareholder liability. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust and that every written agreement, undertaking or
obligation made or issued by the Trust shall contain a provision to that effect.
The Declaration of Trust provides for indemnification out of the Trust's
property for any shareholder and any former shareholder who is exposed to
liability by reason of a claim or demand relating to such person being a
shareholder. Thus, the risk of a shareholder incurring financial loss on account
of shareholder liability, which is considered remote, is limited to
circumstances in which the Trust itself would be unable to meet its obligations.
LIABILITY OF TRUSTEES
The Declaration of Trust provides that the Trustees will generally be
personally liable only for willful misfeasance, bad faith, gross negligence or
reckless disregard of duties. The Trust may purchase insurance for
19
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.
LIQUIDATION OR DISSOLUTION
In the event of the liquidation or dissolution of any Series, the Trustees
shall distribute the assets of the Series to the shareholders, according to
their respective rights, after accounting for the liabilities of the Trust.
FISCAL YEAR
The Series each operate on a fiscal year that ends December 31.
MANAGEMENT AND OTHER SERVICE PROVIDERS
Responsibility for the overall supervision of all Series rests with Trustees.
PIC is the investment advisor to the Surviving Series and is responsible for
the day-to-day portfolio management. Steven L. Colton and Dong Zhang are the
portfolio managers for the Surviving Series. Steven L. Colton is the portfolio
manager for, and Dong Zhang is a member of, the team that manages the Surviving
Series. Mr. Colton joined PIC in June 1997. Previously, Mr. Colton was portfolio
manager for the American Century Income & Growth Fund ("ACIGF") from its
inception on December 17, 1990 through May 30, 1997. Mr. Zhang joined PIC in
June 1997. Mr. Zhang also was a member of the portfolio management team for
ACIGF from June 1996 through June 4, 1997.
PVA is the investment advisor to each of the Merging Series. PVA has entered
into subadvisory agreements with Alliance and MFS to provide day-to-day
portfolio management.
The Phoenix-Alliance/Bernstein Growth + Value Series is managed by Alliance's
Seth J. Masters, who is the Chief Investment Officer for Style Blend Services
and has overall responsibility for the rebalancing and administration of the
growth and value components of the Phoenix-Alliance/Bernstein Growth + Value
Series. Mr. Masters is joined by Karen A. Sesin, Stephanie Simon and Marilyn
Goldstein Fedak. Ms. Sesin is a Senior Vice President and Large Cap Growth
Portfolio Manager. Ms. Sesin joined Alliance Capital in 1999 after serving as
chief investment officer with Waycrosse, Inc., an investment company affiliated
with Cargill, Inc. Previously, Ms. Sesin worked for The Northern Trust Company
in both investment consulting and banking positions. The growth portion of the
series is managed by the Alliance Large Cap Growth team. Karen Sesin will be
principally responsible for day-to-day decisions for the growth portion of the
portfolio. Stephanie Simon is Vice President and Large Cap Portfolio Manager and
joined Alliance in 1998 after serving as Chief Investment Officer for Sargent
Management Company from 1996 to 1998. Day-to-day investment management decisions
for the value portion of the series will be made by Marilyn Goldstein Fedak. Ms.
Fedak has served as Executive Vice President and Chief Investment Officer - U.S.
Value Equities of Alliance since October 2000 and, prior to that, served as
Chief Investment Officer and Chairman of the U.S. Equity Investment Policy Group
at Sanford C. Bernstein & Co., Inc., from 1993 to 2000.
The Phoenix-MFS Investors Trust Series is managed by John D. Laupheimer, Jr.,
Senior Vice President. Mr. Laupheimer has been employed in the MFS investment
management area since 1981.
LEGAL PROCEEDINGS
ALLIANCE CAPITAL MANAGEMENT L.P. ("Alliance") serves as advisor for the
Phoenix-Alliance/Bernstein Enhanced Index and Phoenix-Alliance/Bernstein Growth
+ Value Series. As was publicly reported, the Office of the New York State
Attorney General ("NYAG") and the SEC, are investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Like many other institutions, Alliance was contacted by the SEC and the
NYAG to provide information in connection with the ongoing investigations
pertaining to market timing and late trading. In addition, Alliance undertook an
internal review to make sure all of its employees have followed and will
continue to follow the law and its policies and procedures, all of which are
designed to safeguard the assets of its clients.
20
On December 18, 2003, Alliance confirmed that it had reached terms with the
NYAG and the Staff of the SEC for the resolution of regulatory claims with
respect to market timing in some of its mutual funds. The agreement with the SEC
is reflected in an Order of the Commission. The agreement with the NYAG is
subject to final, definitive documentation.
MFS INVESTMENT MANAGEMENT ("MFS") is the subadvisor to the Phoenix-MFS
Investors Growth Stock Series, Phoenix-MFS Investors Trust Series, and
Phoenix-MFS Value Series. MFS and its predecessor organizations have a history
of money management dating from 1924 and the founding of the first mutual fund.
On March 31, 2004, MFS settled an administrative proceeding with the SEC
regarding disclosure of brokerage allocation practices in connection with the
sale of funds sponsored by MFS (including the Series). Under the terms of the
settlement, in which MFS neither admitted nor denied any wrongdoing, MFS agreed
to pay (one dollar) $1.00 in disgorgement and $50 million in penalty to certain
MFS funds, pursuant to a plan to be approved by an independent distribution
consultant. The agreement with the SEC is reflected in an order of the SEC. The
settlement order states that MFS failed to adequately disclose to the Boards of
Trustees and to shareholders of the MFS funds the specifics of its preferred
arrangements with certain brokerage firms selling MFS fund shares. The
settlement order states that MFS had in place policies designed to obtain best
execution of all fund trades.
As part of the settlement, MFS also agreed to retain an independent
compliance consultant to review the completeness of its disclosure to fund
trustees and to fund shareholders of strategic alliances between MFS or its
affiliates and broker-dealers and other financial advisers who support the sale
of fund shares. The brokerage allocation practices which were the subject of
this proceeding were discontinued by MFS in November 2003. In addition, in
February in 2004, MFS reached agreement with the Securities and Exchange
Commission ("SEC"), the New York Attorney General ("NYAG") and the Bureau of
Securities Regulation of the State of New Hampshire ("NH") to settle
administrative proceedings alleging false and misleading information in certain
MFS retail fund prospectuses regarding market timing and related matters (the
"February Settlements"). These regulators alleged that prospectus language for
certain MFS retail funds was false and misleading because, although the
prospectuses for those funds in the regulators' view indicated that the funds
prohibited market timing. MFS did not limit trading activities in 11 domestic
large cap stock, high grade bond and money market retail funds. MFS' former
Chief Executive officer, John W. Ballen, and former President, Kevin R. Parke,
have also reached an agreement with the SEC (Messrs. Ballen and Parke resigned
their director and officer positions with MFS in February 2004). Under the terms
of the February Settlements, MFS and the executives neither admit nor deny
wrongdoing.
Under the terms of this February Settlements, a $225 million pool has been
established for distribution to shareholders in certain of the MFS funds offered
to retail investors ("Retail Funds"), which has been funded by MFS and of which
$50 million is characterized as a penalty. This pool will be distributed in
accordance with a methodology developed by an independent distribution
consultant in consultation with MFS and the Boards of Trustees of the Retail
Funds, and acceptable to the SEC. MFS has further agreed with the NYAG to reduce
its management fees in the aggregate amount of approximately $25 million
annually over the next five years, and not to increase certain management fees
during this period. MFS has also paid an administrative fine to NH in the amount
of $1 million, which will be used for investor education purposes (NH will
retain $250,000 and $750,000 will be contributed to the North American
Securities Administrative Association's Investor Protection Trust).
In addition, under the terms of the February Settlements, MFS is in the
process of adopting certain governance changes, which include, among others:
o formation of a Code of Ethics Oversight Committee, comprised of senior
executives of MFS' operating businesses, to oversee all matters relating
to issues arising under MFS' Code of Ethics;
o establishment of an Internal Compliance Controls Committee, chaired by
MFS' Chief Compliance Officer and comprised of senior executive of MFS'
operating businesses, to review compliance issues as they may arise from
time to time, endeavor to develop solutions to those issues, and oversee
implementation of those solutions;
21
o establishment of a company ombudsman to whom MFS employees may convey
concerns about MFS business matters that they believe involve matters of
ethics or questionable practices;
o establishment of a full-time senior-level position reporting to MFS' Chief
Compliance Officer whose responsibilities include compliance matters
relating to conflicts of interest; this officer or another designated
compliance officer will implement and oversee the funds' excessive trading
policies and compliance procedures;
o engagement of an Independent Compliance Consultant to conduct a
comprehensive review of MFS supervisory, compliance, and other policies
and procedures designed to prevent and detect conflicts of interest,
breaches of fiduciary duty, breaches of the MFS Code of Ethics and federal
securities law violations by MFS and its employees; and
o commencing in 2006, and at least once every year thereafter, MFS shall
undergo a compliance review by an independent third party.
In addition, under the terms of the February Settlements, MFS has undertaken
to use its best efforts to cause the Retail Funds to operate in accordance with
the following governance policies and practices:
o at least 75% of the Retail Funds' Boards of Trustees will be independent
of MFS and will not have been directors, officers or employees of MFS at
any point during the preceding 10 years (a standard to which the Retail
Funds' Boards currently adhere);
o the chair of the Retail Funds' Board of Trustees will be independent of
MFS and will not have been a director, officer or employee of MFS at any
point during the preceding 10 years (a standard to which the Retail Funds'
Boards currently adhere);
o all action taken by the Retail Funds' Boards of Trustees or a committee
thereof will be approved by a majority of the independent trustees of the
Boards or committee, respectively;
o commencing in 2005 and not less than every fifth calendar year thereafter,
the Retail Funds will hold shareholder meetings at which the Board of
Trustees will be elected; and
o the Retail Funds will designate an independent compliance officer
reporting to the Board of Trustees responsible for assisting the Boards in
monitoring compliance by MFS with the federal securities laws, its
fiduciary duties to fund shareholders and its Code of Ethics in all
matters relevant to the operations of the funds.
Although the terms of the February Settlements apply only to the Retail
Funds, all funds overseen by the Retail Funds' Board of Trustees have undertaken
to observe these governance policies and practices.
Under the terms of the NYAG settlement, MFS has undertaken, on behalf of the
funds, that:
o the funds will retain a senior office responsible for assisting in the
review of fee arrangements and administering the funds' compliance
policies and procedures, and the Board of Trustees of the funds has
determined that MFS shall reimburse the funds for the expenses of this
senior officer; and
o certain statements sent by MFS to fund shareholders will disclose fees and
costs in actual dollar amounts charged to each investor on his or her
actual investment based upon the investor's most recent quarterly closing
balance and on a hypothetical $10,000 investment held for ten years.
Messrs. Ballen and Parke have agreed to suspensions from association with any
investment adviser or registered investment company for periods of 9 months and
6 months, respectively. Upon completion of these suspensions, for periods of 27
months (Mr. Ballen) and 30 months (Mr. Parke). Messrs. Ballen and Parke have
agreed not to serve
22
as an employee, officer or trustee of any registered investment company; not to
serve as chairman, director or as an officer of an investment adviser; and to
otherwise perform only limited functions for an investment adviser, which may
include strategic planning and analysis, portfolio management and non-mutual
fund marketing. Messrs. Ballen and Parke will pay approximately $315,000 each to
the SEC, $250,000 of which is characterized as a penalty. In addition, Messrs.
Ballen and Parke resigned as trustees of the funds' Board of Trustees, and Mr.
Ballen resigned as the funds' President, effective February 2004. Messrs. Ballen
and Parke will not be returning to MFS or the MFS funds after their suspensions.
Since December 2003, MFS, Sun Life Financial Inc., various MFS funds, the
Trustees of these MFS funds, and certain officers of MFS have been named as
defendants in multiple lawsuits filed in federal and state courts. The lawsuits
variously have been commenced as class actions or individual actions on behalf
of investors who purchased, held or redeemed shares of the funds during
specified periods, as class actions on behalf of participants in certain
retirement plan accounts, or as derivative actions on behalf of the MFS funds.
The lawsuits generally allege that some or all of the defendants (i) permitted
or acquiesced in market timing and/or late trading in some of the MFS funds,
inadequately disclosed MFS' internal policies concerning market timing and such
matters, and received excessive compensation as fiduciaries to the MFS funds, or
(ii) permitted or acquiesced in the improper use of fund assets of MFS to
support the distribution of fund shares and inadequately disclosed MFS' use of
fund assets in this manner. The actions assert that some or all of the
defendants violated the federal securities laws, including the Securities Act of
1933 and the Securities Exchange Act of 1934, the Investment Company Act of 1940
and the Investment Advisers Act of 1940, the Employee Retirement Income Security
Act of 1974, as well as fiduciary duties and other violations of common law. The
lawsuits seek unspecified compensatory damages. Insofar as any of the actions is
appropriately brought derivatively on behalf of any of the MFS funds, any
recovery will inure to the benefit of the funds. The defendants are reviewing
the allegations of the multiple complaints and will respond appropriately.
Additional lawsuits based on similar allegations may be filed in the future.
Any potential resolutions of these matters may include, but not be limited
to, judgments or settlements for damages against MFS, the MFS funds, or any
other named defendant. As noted above, as part of the regulatory settlements,
MFS has established a restitution pool in the amount of $225 million to
compensate certain shareholders of the Retail Funds for damages that they
allegedly sustained as a result of market timing or late trading in certain of
the funds, and will pay $50 million to compensate certain MFS funds based upon
the amount of brokerage commissions allocated in recognition of fund sales. It
is not clear whether these amounts will be sufficient to compensate shareholders
for all of the damages they allegedly sustained, whether certain shareholders or
putative class members may have additional claims to compensation, or whether
the damages that may be awarded in any of the actions will exceed these amounts.
In the event the MFS funds incur any losses, cost or expenses in connection with
such lawsuits, the Board of Trustees of the affected funds may pursue claims on
behalf of such funds against any party that may have liability to the funds in
respect thereof.
Review of these matters by the independent Trustees of the MFS funds and
their counsel is continuing. There can be no assurance that these regulatory
actions and lawsuits, or the adverse publicity associated with these
developments will not result in increased fund redemptions, reduced sales of
fund shares, or other adverse consequences to the funds.
PEPCO serves as financial agent of each Series and, as such, performs
administrative, bookkeeping and pricing functions.
State Street Bank and Trust Company serves as the custodian for each Merging
Series and the Surviving Series.
PricewaterhouseCoopers LLP serves as independent registered public
accountants for each Series.
23
VOTING INFORMATION
QUORUM AND VOTING REQUIREMENTS
This Prospectus/Proxy Statement is being furnished to the shareholders of the
Merging Series in connection with the solicitation by the Board of Trustees of
the Trust of proxies to be used at the meeting. Shareholders of record of
Phoenix-Alliance/Bernstein Growth + Value Series and Phoenix-MFS Investors Trust
Series at the close of business on July 20, 2004 ("Record Date") own
1,116,587.856 shares and 760,993.031 shares, respectively. Each share will be
entitled to vote at the meeting or at any adjournment(s) thereof. Each of the
above shares is entitled to one vote, with proportionate voting for fractional
shares. The record owners of the shares of each separate Series of the Trust
include the Phoenix Life Variable Universal Life Account, Phoenix Life and
Annuity Variable Universal Life Account and the PHLVIC Variable Universal Life
Account (collectively, the "VUL Accounts"), which fund variable life insurance
policies, and the Phoenix Life Variable Accumulation Account and the PHL
Variable Accumulation Account (collectively, the "VA Accounts"), which fund
variable annuity contracts.
Each shareholder of record at the close of business on the Record Date is
entitled to a notice of the meeting and will be asked to instruct Phoenix how to
vote at the Special Meeting or any adjourned or postponed session. No
shareholder, to the Trust's knowledge, owns Contracts which are funded by more
than five percent of the outstanding voting shares of the Trust or of any
Series. The number of votes with respect to which each shareholder will be
entitled to instruct Phoenix will be determined by applying the shareholder's
percentage interest in a subaccount to the total number of votes attributable to
the subaccount. In determining the number of votes, fractional shares will be
recognized. The number of votes for which a shareholder may provide instructions
will be determined as of the Record Date.
In accordance with its view of applicable law, Phoenix will vote the shares
of the respective Merging Series for which Phoenix receives voting instructions
from shareholders in accordance with those instructions. Phoenix will vote
shares for which it has not received timely voting instructions from
shareholders and any shares held by Phoenix or its affiliates for their own
accounts in the same proportion as the shares for which shareholders have
provided voting instructions to Phoenix.
In addition to the proxy solicitation by mail, officers and regular employees
of Phoenix or one of its affiliates may solicit voting instructions personally,
by telephone or telegram. Phoenix will, upon request, reimburse banks, brokers,
fiduciaries and nominees for their reasonable expenses in sending proxy
materials. The cost of solicitation of voting instructions will be borne
indirectly by PLIC. You can provide voting instructions in any one of four ways:
o THROUGH THE INTERNET - www.proxyweb.com
o BY TELEPHONE - 800-690-6903
o BY MAIL - using the enclosed Voting Instructions Card(s) and postage paid
envelope
o IN PERSON - at the Special Meeting
Proxies executed by shareholders may be revoked at any time before they are
exercised by a written revocation received by the Secretary of the Trust, by
properly executing a later-dated proxy (in writing, or by telephone or by the
Internet) or by voting in person at the meeting and giving oral notice of
revocation to the Chairman of the meeting.
We encourage you to vote by telephone or Internet; have your Voting
Instruction Card in hand, and call the number or go to the website and follow
the instructions given there. These voting methods will reduce the time and
costs associated with this proxy solicitation. Whichever method you choose,
please read the enclosed proxy statement carefully before you vote.
As of the Record Date, Phoenix through its variable universal life ("VUL")
accounts and variable annuity ("VA") accounts owned 1,116,587.856 shares of the
Phoenix-Alliance/Bernstein Growth + Value Series, 760,993.031 shares
24
of the Phoenix-MFS Investors Trust Series and 10,441,633.69 shares of the
Surviving Series. No one contract/policyholder owns beneficially of record 5% or
more of the outstanding shares of the Merging Series, Surviving Series, or the
combined Surviving Series assuming consummation of the Reorganizations, based on
holdings and total shares of July 20, 2004. As of the Record Date, less than 1%
of the outstanding shares of beneficial interest of either Series were held of
record or beneficially owned under a contract or policy by the Trustees or
nominees for election as Trustee and by the executive officers of the Trust, as
a group.
A COPY OF THE TRUST'S MOST RECENT ANNUAL REPORT, DATED DECEMBER 31, 2003 HAS
BEEN FURNISHED TO SHAREHOLDERS. THE TRUST WILL FURNISH WITHOUT CHARGE, TO ANY
SHAREHOLDER, UPON REQUEST, A COPY OF THE 2003 ANNUAL REPORT. SUCH REQUESTS MAY
BE DIRECTED TO PHOENIX VARIABLE PRODUCTS OPERATIONS, P.O. BOX 8027, BOSTON, MA
02266-8027. SHAREHOLDERS MAY ALSO CALL TOLL-FREE AT 800-541-0171.
The Board knows of no business, other than that mentioned in the Notice of
Special Meeting, that will be presented for consideration at the Special
Meeting. If any other matter is properly presented, it is the intention of the
persons named on the enclosed Voting Instructions Card(s) to vote in accordance
with their best judgment.
A majority of the outstanding voting shares of a Series entitled to vote
shall constitute a quorum for the meeting. Because Phoenix, through its VUL
Accounts and VA Accounts are the record owners of the Merging Series, Phoenix's
attendance at the meeting will constitute a quorum. The affirmative vote of a
majority of the outstanding voting securities of the Trust (i.e., the lesser of
(i) 67% or more of the eligible votes of the respective Merging Series
represented at the meeting if more than 50% of the eligible votes of the
respective Merging Series are present in person or by proxy or (ii) more than
50% of the eligible votes of the respective Merging Series) must approve the
herein contemplated mergers. 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 respective Merging Series 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 proposals 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 are required to be voted FOR the Reorganization
proposals in favor of such an adjournment and will vote those proxies required
to be voted AGAINST the Reorganization proposals 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. At any adjourned meeting, the Trust may transact any business which
might have been transacted at the original meeting.
The individuals named as proxies on the enclosed voting instructions card
will vote in accordance with the shareholder's direction, as indicated thereon,
if the voting instruction card is received and is properly executed. If the
shareholder properly executes a voting instruction card and gives no voting
instructions with respect to the Reorganization proposal, the shares will be
voted in favor of the respective Reorganization proposal. The individuals
25
named as proxies on the enclosed voting instruction cards, in their discretion,
may vote upon such other matters asmay properly come before the meeting. The
Board of Trustees of the Trust are not aware of any other matters to come before
the meeting.
Approval of the Phoenix-Alliance/Bernstein Growth + Value Series
Reorganization proposal by the shareholders of the Phoenix-Alliance/Bernstein
Growth + Value Series is a condition of the consummation of the Reorganization.
If the Reorganization is not approved, the Phoenix-Alliance/Bernstein Growth +
Value Series will continue as a Series of the Trust and the Board of Trustees
may consider other alternatives in the best interests of the shareholders of the
Phoenix-Alliance/Bernstein Growth + Value Series.
Approval of the Phoenix-MFS Investors Trust Series Reorganization proposal by
the shareholders of the Phoenix-MFS Investors Trust Series is a condition of the
consummation of the Reorganization. If the Reorganization is not approved, the
Phoenix-MFS Investors Trust Series will continue as a Series of the Trust and
the Board of Trustees may consider other alternatives in the best interests of
the shareholders of the Phoenix-MFS Investors Trust Series.
REVOCATION OF PROXIES
Any shareholder who has given an instruction card has the right to revoke the
proxy any time prior to its exercise:
o by written notice of the instruction card'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 instruction card prior
to the meeting;
o by use of any electronic, telephonic or other alternative means authorized
by the Trustees for authorizing the proxy to act; 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 and employees of
PLIC or its affiliates, may solicit proxies personally or by telephone or
telegram. PLIC or other representatives of the Trust may also use one or more
proxy solicitation firms to assist with the mailing and tabulation effort and
any special personal solicitation of instruction cards. Banks, brokers,
fiduciaries and nominees will, upon request, be reimbursed by PLIC for their
reasonable expenses in sending proxy material to be beneficial owners of shares
of a Merging Series. The cost of the tabulation of proxies will be borne by
PLIC.
If a shareholder wishes to participate in the meeting, but does not wish to
authorize the execution of an instruction card by telephone or Internet, the
shareholder may still submit the completed Voting Instruction Card form included
with this Prospectus/Proxy Statement or attend the meeting in person.
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES OF THE
TRUST, RECOMMEND YOU APPROVE THE APPLICABLE AGREEMENT AND PLAN OF
REORGANIZATION.
26
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE RESPOND PROMPTLY BY
INTERNET, TELEPHONE OR RETURNING THE VOTING INSTRUCTIONS CARD IN THE
POSTAGE-PAID RETURN ENVELOPE.
ADDITIONAL INFORMATION ABOUT THE SERIES
Additional information about the Series is included in the Trust's
Prospectus, as supplemented and the Statement of Additional Information, as
supplemented dated May 1, 2004 (Registration No. 033-05033), which have been
filed with the SEC and are incorporated by reference herein. A copy of the
Prospectus for the Trust and Statement of Additional Information may be obtained
without charge by contacting Phoenix Variable Products Mail Operations, P.O. Box
8027, Boston, Massachusetts 02266-8027, or by calling toll-free at
1-800-541-0171.
MISCELLANEOUS
AVAILABLE INFORMATION
Each Series 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, file reports,
proxy materials, and other information with the SEC. Information about the
Trust, including the SAI, can be reviewed and copied at the SEC's Public
Reference Room in Washington, D.C. You can obtain information on the operation
of the Public Reference Room by calling the SEC at 202-942-8090. Reports and
other information about the Trust are available on the EDGAR Database on the
SEC's Internet site at http://www.sec.gov. Copies of the information may be
obtained, after paying a duplicating fee, by electronic request at the following
e-mail address: publicinfo@sec.gov, or by writing the SEC Reference Section,
Washington, D.C. 20549-0102.
27
PERFORMANCE FOR THE PERIOD ENDING DECEMBER 31, 2003
The following table compares investment performance for each Series for the
period ending December 31, 2003 and compares the same against relevant
benchmarks. The Series' past performance is not necessarily an indication of how
the Series will perform in the future. The Series' performance shown in the
table does not reflect insurance contract expenses. If these expenses were
included, the Series' performance shown in the table would be lower.
AVERAGE ANNUAL TOTAL RETURNS (FOR THE LIFE OF THE INCEPTION
- ---------------------------- ------------ ----------
PERIOD ENDING DECEMBER 31, 2003) 1 YEAR 5 YEAR SERIES DATE
------ ------ ------ ----
Surviving Series
o Phoenix-Oakhurst Growth and Income Series 27.46% (0.18)% 3.08% 03/02/98
o S&P 500(R) Index(1) 28.71% (0.57)% 2.52% 03/02/98
Merging Series
o Phoenix-Alliance/Bernstein Growth + Value Series 26.06% -- 0.51% 10/29/01
o Russell 1000(R) Index(2) 29.89% -- 4.00% 10/29/01
o S&P 500(R) Index(1) 28.71% -- 3.19% 10/29/01
o Phoenix-MFS Investors Trust Series 22.56% -- 0.55% 10/29/01
o S&P 500(R) Index(1) 28.71% -- 3.19% 10/29/01
GROWTH OF $10,0001 (PERIOD ENDING DECEMBER 31, 2003)
PHOENIX-OAKHURST GROWTH
YEAR AND INCOME SERIES S&P 500(R) INDEX(3)
---- ----------------- -------------------
03/02/98 $10,000 $10,000
12/31/98 $12,045 $11,895
12/31/99 $14,093 $14,409
12/31/00 $13,162 $13,086
12/31/01 $12,087 $11,532
12/31/02 $ 9,366 $ 8,983
12/31/03 $11,938 $11,562
PHOENIX-ALLIANCE/BERNSTEIN
YEAR GROWTH + VALUE SERIES S&P 500(R) INDEX(3) RUSSELL 1000(R) INDEX(2)
---- --------------------- ------------------- ------------------------
10/29/01 $10,000 $10,000 $10,000
12/31/01 $10,703 $10,677 $10,701
12/31/02 $ 8,020 $ 8,317 $ 8,384
12/31/03 $10,110 $10,705 $10,890
PHOENIX-MFS
YEAR INVESTORS TRUST SERIES S&P 500(R) INDEX3
---- ---------------------- -----------------
10/29/01 $10,000 $10,000
12/31/01 $10,425 $10,677
12/31/02 $ 8,257 $ 8,317
12/31/03 $10,120 $10,705
- -------------------------------
(1) This chart assumes an initial investment of $10,000 made on the inception
dates noted in the tables above. Performance assumes dividends and capital
gains are reinvested.
(2) The Russell 1000(R) Index is a market capitalization-weighted index of the
1,000 largest U.S. companies in the Russell universe, which comprises the
3,000 largest U.S. companies. The index is calculated on a total return
basis with dividends reinvested. The index is not available for direct
investments.
(3) The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance. The index is not available for direct
investments.
28
SECTOR WEIGHTINGS (as a percentage of equity holdings as of December 31, 2003)
PHOENIX-ALLIANCE/BERNSTEIN PHOENIX-MFS INVESTORS TRUST PHOENIX-OAKHURST GROWTH AND
SECTOR GROWTH + VALUE SERIES SERIES INCOME SERIES
- ------ --------------------- ------ -------------
Consumer Discretionary $1,172,201 12.99% $1,061,439 14.66% $ 12,340,540 11.60%
Consumer Staples $ 608,336 6.74% $ 692,736 9.57% $ 6,042,427 5.68%
Energy $ 312,952 3.47% $ 498,377 6.88% $ 8,704,189 8.18%
Financials $2,454,418 27.19% $1,482,615 20.47% $ 25,381,729 23.87%
Health Care $1,175,603 13.03% $1,114,661 15.39% $ 14,747,824 13.87%
Industrials $ 835,750 9.26% $ 790,616 10.92% $ 8,158,962 7.67%
Information Technology $1,848,447 20.48% $1,032,049 14.25% $ 21,292,662 20.02%
Materials $ 171,172 1.90% $ 216,496 2.99% $ 985,946 0.93%
Telecommunication Services
$ 88,986 0.99% $ 176,545 2.44% $ 5,530,441 5.20%
Utilities $ 357,679 3.95% $ 176,248 2.43% $ 3,163,940 2.98%
SUM OF EQUITY HOLDINGS $9,025,544 100.00% $7,241,782 100.00% $106,348,660 100.00%
ASSET MIX (as a percentage of total net assets as of December 31, 2003)
SURVIVING SERIES
MERGING SERIES MERGING SERIES PHOENIX-OAKHURST
PHOENIX-ALLIANCE/BERNSTEIN PHOENIX-MFS INVESTORS GROWTH AND INCOME
ASSET MIX GROWTH + VALUE SERIES TRUST SERIES SERIES
- -------- --------------------- ------------ ------
Foreign Preferred Stock 0.00% 0.37% 0.00%
Common Stock 92.50% 88.58% 96.99%
Foreign Common Stock 4.07% 8.00% 1.74%
Short Term Obligations 3.12% 4.67% 1.44%
Other assets and liabilities, net 0.31% (1.62)% (0.17)%
TOTAL NET ASSETS 100.00% 100.00% 100.00%
TEN LARGEST EQUITY HOLDINGS (as a percentage of total net assets as of December 31, 2003)
MERGING SERIES MERGING SERIES SURVIVING SERIES
PHOENIX-ALLIANCE/BERNSTEIN GROWTH + PHOENIX-MFS INVESTORS PHOENIX-OAKHURST GROWTH AND
VALUE SERIES TRUST SERIES INCOME SERIES
------------ ------------ -------------
Pfizer, Inc. 4.2% Microsoft Corp. 3.8% Exxon Mobil Corp. 3.5%
Citigroup, Inc. 3.7% Citigroup, Inc. 3.4% Microsoft Corp. 3.4%
Comcast Corp. Class A 3.1% General Electric Co. 2.9% Intel Corp. 3.2%
Microsoft Corp. 3.1% Exxon Mobil Corp. 2.7% Citigroup, Inc. 2.9%
Dell, Inc. 3.1% Cisco Systems, Inc. 2.5% Cisco Systems, Inc. 2.4%
General Electric Co. 2.9% Wells Fargo & Co. 2.4% Bank of America Corp. 2.4%
Fannie Mae 2.8% Johnson & Johnson 2.4% Bristol-Myers Squibb Co. 2.1%
MBNA Corp. 2.5% International Business Pfizer, Inc. 2.1%
Wal-Mart Stores, Inc. 2.4% Machines Corp. 2.1% J.P. Morgan Chase & Co. 2.0%
Intel Corp. 2.4% Fannie Mae 2.1% ChevronTexaco Corp. 2.0%
Altria Group, Inc. 1.9%
29
LEGAL MATTERS
Matthew A. Swendiman, Counsel for PLIC and Assistant Secretary to the Trust,
has passed upon certain legal matters in connection with the issuance of the
shares of the Surviving Series.
ADDITIONAL FINANCIAL INFORMATION
The table below presents certain financial information for the Surviving
Series. The financial highlights for each year ended December 31 are derived
from the Surviving Series' audited financial statements for that year. The data
should be read in conjunction with the audited financial statements and related
notes, which are incorporated by reference to the Statement of Additional
Information related to this Prospectus/Proxy Statement. The financial statements
for the Surviving Series for prior periods are contained in the Surviving
Series' Annual Report to Shareholders, which are incorporated by reference in
the Statement of Additional Information related to this Prospectus/Proxy
Statement.
30
FINANCIAL HIGHLIGHTS (UNAUDITED)
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
The financial highlights table is intended to help you understand the
Phoenix-Oakhurst Growth and Income Series' financial performance through the
periods indicated. Certain information reflects financial results for a single
share. The total returns in the table represent the rate that an investor would
have earned (or lost) on an investment in the Surviving Series (assuming,
reinvestment of all dividends and distributions). These figures do not include
the imposition of separate account fees and expenses. If such fees or expenses
were imposed, total return would be lower. This information has been audited by
PricewaterhouseCoopers LLP. The Report of Independent Auditors and the Surviving
Series' financial statements are included in the December 31, 2003 Annual Report
and are incorporated by reference in the Statement of Additional Information.
SURVIVING SERIES
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIODS)
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
Net asset value, beginning of period $ 8.77 $ 11.42 $ 12.52 $ 13.53 $ 11.99
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.11 0.08 0.08 0.07 0.07
Net realized and unrealized gain (loss) 2.29 (2.65) (1.09) (0.96) 1.97
-------- ------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 2.40 (2.57) (1.01) (0.89) 2.04
-------- ------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment income (0.11) (0.08) (0.06) (0.07) (0.07)
Distributions from net realized gains -- -- (0.03) (0.05) (0.16)
Tax return of capital -- -- -- -- (0.27)
-------- ------- -------- -------- --------
TOTAL DISTRIBUTIONs (0.11) (0.08) (0.09) (0.12) (0.50)
-------- ------- -------- -------- --------
CHANGE IN NET ASSET VALUE 2.29 (2.65) (1.10) (1.01) 1.54
-------- ------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 11.06 $ 8.77 $ 11.42 $ 12.52 $ 13.53
======== ======= ======== ======== ========
Total return 27.46% (22.51)% (8.17)% (6.61)% 17.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $107,718 $80,824 $115,740 $112,489 $101,834
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) 0.95%(2) 0.93%(2) 0.85%(2) 0.85% 0.85%
Net investment income 1.18% 0.79% 0.65% 0.54% 0.71%
Portfolio turnover 55% 60% 29% 53% 52%
- -------------------------------
(1)If the investment adviser has not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.01%,
0.95%, 0.93%, 0.94% and 1.01% for the periods ended December 31, 2003, 2002,
2001, 2000 and 1999, respectively.
(2)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.
31
FUTURE SHAREHOLDER MEETINGS
As a Massachusetts business trust, the Trust does not hold shareholder
meetings, unless required by the 1940 Act. There will be a Special Meeting of
the Phoenix-Lazard U.S. Multi-Cap Series Shareholders, September 14, 2004; a
Special Meeting of the Phoenix-MFS Value Series Shareholders, September 14,
2004; and a Special Meeting of Phoenix-Sanford Bernstein Global Value Series
Shareholders, September 14, 2004 to consider proposals to approve other
Agreements and Plans of Reorganization. Other than these meetings, the Trust
does not anticipate holding a meeting of shareholders of the Series in 2004.
Shareholders who wish to present a proposal for action at the next meeting
should submit the proposal to:
Richard J. Wirth
Secretary, The Phoenix Edge Series Fund
c/o Phoenix Life Insurance Company
One American Row
PO Box 5056
Hartford, CT 06102-5056
Proposals must be received a reasonable time prior to the date of the
shareholder meeting to be considered for inclusion in the proxy materials for
the meeting. Timely submission of a proposal does not, however, necessarily mean
that the proposal will be submitted for consideration by shareholders.
OTHER BUSINESS
The Board of Trustees of the Trust knows of no business to be brought before
the Special Meeting other than the matters set forth in this Prospectus/Proxy
Statement. Should any other matter requiring a vote of the Merging Series'
shareholders arise, however, the proxies will vote thereon according to their
best judgment in the interests of the Merging Series and the shareholders of the
Merging Series.
By Order of the Board of Trustees,
RICHARD J. WIRTH
Secretary
Hartford, Connecticut
August 6, 2004
32
APPENDIX A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 14th day of September, 2004, by and between The Phoenix Edge Series
Fund, a Massachusetts business trust (the "Trust"), with its principal place of
business at 101 Munson Street, Greenfield, Massachusetts 01301, on behalf of the
Phoenix-Oakhurst Growth and Income Series (the "Surviving Series"), a separate
series of the Trust, and the Trust, on behalf of the Phoenix-Alliance/Bernstein
Growth + Value Series (the "Merging Series"), another separate series of the
Trust.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1) of the
United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization (the "Reorganization") will consist of the transfer of all of the
assets of the Merging Series to the Surviving Series in exchange solely for
voting shares of beneficial interest of the Surviving Series (the "Surviving
Series Shares"), the assumption by the Surviving Series of all liabilities of
the Merging Series, and the distribution of the Surviving Series Shares to the
shareholders of the Merging Series in complete liquidation of the Merging Series
as provided herein, all upon the terms and conditions hereinafter set forth in
this Agreement.
The Merging Series and the Surviving Series are separate series of the
Trust, an open-end, registered investment company of the management type. The
Merging Series owns securities that generally are assets of the character in
which the Surviving Series is permitted to invest.
The Trustees of the Trust have determined, with respect to the
Surviving Series, that the exchange of all of the assets of the Merging Series
for Surviving Series Shares and the assumption of all liabilities of the Merging
Series by the Surviving Series is in the best interests of the Surviving Series
and its shareholders and that the interests of the existing shareholders of the
Surviving Series would not be diluted as a result of this transaction.
The Trustees of the Trust, have also determined, with respect to the
Merging Series, that the exchange of all of the assets of the Merging Series for
Surviving Series Shares and the assumption of all liabilities of the Merging
Series by the Surviving Series is in the best interests of the Merging Series
and its shareholders and that the interests of the existing shareholders of the
Merging Series 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. TRANSFER OF ASSETS OF THE MERGING SERIES TO THE SURVIVING SERIES IN
EXCHANGE FOR THE SURVIVING SERIES SHARES, THE ASSUMPTION OF ALL MERGING
SERIES LIABILITIES, THE LIQUIDATION OF THE MERGING SERIES
1.1 Subject to the requisite approval of the Merging Series
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Merging Series
agrees to transfer all of the Merging Series' assets, as set forth in paragraph
1.2, to the Surviving Series, and the Surviving Series agrees in exchange
therefore: (i) to deliver to the Merging Series the number of full and
fractional Surviving Series Shares, determined by dividing the value of the
Merging Series' net assets, computed in the manner and as of the time and date
set forth in paragraph 2.1, by the net asset value of one Surviving Series
Share, computed in the manner and as of the time and date set forth in paragraph
2.2; and (ii) to assume all liabilities of the Merging Series, as set forth in
paragraph 1.3. Such transactions shall take place at the closing provided for in
paragraph 3.1 (the "Closing Date").
1.2 The assets of the Merging Series to be acquired by the Surviving
Series shall consist of all assets and property, including, without limitation,
all cash, securities, commodities and futures interests and dividends or
interests receivable, that are owned by the Merging Series, and any deferred or
prepaid expenses shown as an asset on the books of the Merging Series, on the
Closing Date (collectively, the "Assets").
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1.3 The Merging Series will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Surviving Series
shall also assume all of the liabilities of the Merging Series, whether accrued
or contingent, known or unknown, existing at the Valuation Date, as defined in
paragraph 2.1 (collectively, "Liabilities"). On or as soon as practicable prior
to the Closing Date, the Merging Series will declare and pay to its shareholders
of record one or more dividends and/or other distributions so that it will have
distributed substantially all (and in no event less than 98%) of its investment
company taxable income and realized net capital gain, if any, for the current
taxable year through the Closing Date.
1.4 Immediately after the transfer of Assets provided for in paragraph
1.1, the Merging Series will distribute to the Merging Series' shareholders of
record, determined as of immediately after the close of business on the Closing
Date (the "Merging Series Shareholders"), on a pro rata basis, the Surviving
Series Shares received by the Merging Series pursuant to paragraph 1.1, and will
completely liquidate. Such distribution and liquidation will be accomplished,
with respect to the Merging Series' shares, by the transfer of the Surviving
Series Shares then credited to the account of the Merging Series on the books of
the Surviving Series to open accounts on the share records of the Surviving
Series in the names of the Merging Series Shareholders. The aggregate net asset
value of Surviving Series Shares to be so credited to Merging Series
Shareholders shall be equal to the aggregate net asset value of the Merging
Series shares owned by such shareholders on the Closing Date. All issued and
outstanding shares of the Merging Series will simultaneously be canceled on the
books of the Merging Series.
1.5 Ownership of Surviving Series Shares will be shown on the books of
the Surviving Series or its transfer agent, as defined in paragraph 3.3.
1.6 Any reporting responsibility of the Merging Series including, but
not limited to, the responsibility for filing of regulatory reports, tax
returns, or other documents with the U.S. Securities and Exchange Commission
(the "Commission"), any state securities commission, and any Federal, state or
local tax authorities or any other relevant regulatory authority, is and shall
remain the responsibility of the Merging Series.
2. VALUATION
2.1 The value of the Assets shall be the value computed as of
immediately after the close of business of the New York Stock Exchange and after
the declaration of any dividends on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), using the valuation procedures
established by the Trust's Board of Trustees, which shall be described in the
then-current prospectus and statement of additional information with respect to
the Surviving Series.
2.2 The net asset value of Surviving Series Shares shall be the net
asset value per share computed as of the Valuation Date, using the valuation
procedures established by the Trust's Board of Trustees, which shall be
described in the Surviving Series' then-current prospectus and statement of
additional information.
2.3 The number of Surviving Series Shares to be issued (including
fractional shares, if any) in exchange for the Merging Series' Assets shall be
determined by dividing the value of the net assets with respect to the shares of
the Merging Series determined using the same valuation procedures referred to in
paragraph 2.1, by the net asset value of a Surviving Series Share, determined in
accordance with paragraph 2.2.
2.4 All computations of value shall be made by Phoenix Equity Planning
Corporation, in its capacity as financial agent for the Trust.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be September 17, 2004, or such other date as
the parties may agree. All acts taking place at the closing of the transaction
(the "Closing") shall be deemed to take place simultaneously as of immediately
after the close of business on the Closing Date unless otherwise agreed to by
the parties. The close of business on the Closing Date shall be as of 4:00 p.m.,
Eastern Time. The Closing shall be held at the offices of the Trust or at such
other time and/or place as the parties may agree.
3.2 The Trust shall direct State Street Bank Trust Company, as
custodian for the Merging Series (the "Custodian"), to deliver, on the next
business day after the Closing, a certificate of an authorized officer stating
that
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(i) the Assets have been delivered in proper form to the Surviving Series
on the next business day following the Closing Date, and (ii) all necessary
taxes in connection with the delivery of the Assets, including all applicable
Federal and state stock transfer stamps, if any, have been paid or provision for
payment has been made. The Merging Series' portfolio securities represented by a
certificate or other written instrument shall be presented by the Custodian to
the custodian for the Surviving Series for examination no later than on the next
business day following the Closing Date, and shall be transferred and delivered
by the Merging Series on the next business day following the Closing Date for
the account of the Surviving Series duly endorsed in proper form for transfer in
such condition as to constitute good delivery thereof. The Custodian shall
deliver as of the Closing Date by book entry, in accordance with the customary
practices of such depositories and the Custodian, the Merging Series' portfolio
securities and instruments deposited with a securities depository, as defined in
Rule 17f-4 under the Investment Company Act of 1940, as amended (the "1940
Act"). The cash to be transferred by the Merging Series shall be delivered by
wire transfer of federal funds on the Closing Date.
3.3 The Trust shall direct the Variable Products Operation unit of
Phoenix Life Insurance Company (the "Transfer Agent"), on behalf of the Merging
Series, to deliver on the next business day following the Closing, a certificate
of an authorized officer stating that its records contain the names and
addresses of the Merging Series Shareholders, and the number and percentage
ownership of outstanding shares owned by each such shareholder immediately prior
to the Closing. The Surviving Series shall issue and deliver to the Secretary of
the Surviving Series, a confirmation evidencing the Surviving Series Shares to
be credited on the Closing Date, or provide evidence satisfactory to the Merging
Series that such Surviving Series Shares have been credited to the Merging
Series' account on the books of the Surviving Series. At the Closing each party
shall deliver to the other such bills of sale, checks, assignments, share
certificates, if any, receipts or other documents as such other party or its
counsel may reasonably request.
3.4 In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Surviving Series or the Merging Series shall be closed to trading or trading
thereupon shall be restricted, or (b) trading or the reporting of trading on
such Exchange or elsewhere shall be disrupted so that, in the judgment of the
Board of Trustees of the Trust, accurate appraisal of the value of the net
assets of the Surviving Series or the Merging Series, respectively, is
impracticable, the Closing Date shall be postponed until the first Friday after
the day when trading shall have been fully resumed and reporting shall have been
restored.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Trust, on behalf of the Merging Series, represents and warrants
as follows:
(a) The Merging Series is duly organized as a series of the Trust,
which is a business trust duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts, with power under the
Trust's Declaration of Trust, as amended ("Declaration of Trust"), to own all of
its Assets and to carry on its business as it is now being conducted;
(b) The 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
shares of the Merging Series under the Securities Act of 1933, as amended ("1933
Act"), is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Merging Series of
the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and the 1940 Act and such as may be required by state securities laws;
(d) The current prospectus and statement of additional information of
the Merging Series and each prospectus and statement of additional information
of the Merging Series used at all times previous to the date of this Agreement
conforms or conformed at the time of its use 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 does not or did not at the time of
its use include any untrue statement of a material fact or omit to state any
material fact required to
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be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading;
(e) On the Closing Date, the Trust, on behalf of the Merging Series,
will have good and marketable title to the Assets and full right, power, and
authority to sell, assign, transfer and deliver such Assets hereunder free of
any liens or other encumbrances; and upon delivery and payment for such Assets;
the Trust, on behalf of the Surviving Series, will acquire good and marketable
title thereto, subject to no restrictions on the full transfer thereof,
including such restrictions as might arise under the 1933 Act, other than as
disclosed to the Surviving Series;
(f) The Merging Series is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of the Declaration of Trust or of any agreement, indenture,
instrument, contract, lease or other undertaking to which the Trust on behalf of
the Merging Series is a party or by which it is bound, or (ii) the acceleration
of any obligation, or the imposition of any penalty, under any agreement,
indenture, instrument, contract, lease, judgment or decree to which the Trust on
behalf of the Merging Series is a party or by which it is bound;
(g) All material contracts or other commitments of the Merging Series
(other than this Agreement and certain investment contracts, including options,
futures and forward contracts) will terminate without liability to the Merging
Series on or prior to the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted by the
Trust, on behalf of the Surviving Series, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or, to its knowledge, threatened against the Trust on behalf
of the Merging Series or any of its properties or assets that, if adversely
determined, would materially and adversely affect its financial condition or the
conduct of its business. The Trust, on behalf of the Merging Series, 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;
(i) The Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets, and Schedule of Investments of the Merging Series at
December 31, 2003, have been audited by PricewaterhouseCoopers, LLP ("PwC"),
independent registered public accountants, and are in accordance with generally
accepted accounting principles ("GAAP") consistently applied, and such
statements (copies of which have been furnished to the Surviving Series) present
fairly, in all material respects, the financial condition of the Merging Series
as of such date in accordance with GAAP, and there are no known contingent
liabilities of the Merging Series required to be reflected on a balance sheet
(including the notes thereto) in accordance with GAAP as of such date not
disclosed therein;
(j) Since December 31, 2003, there has not been any material adverse
change in the Merging Series' financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Merging Series of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Surviving Series. For the purposes of this subparagraph (j),
a decline in net asset value per share of the Merging Series due to declines in
market values of securities in the Merging Series' portfolio, the discharge of
Merging Series liabilities, or the redemption of Merging Series Shares by
shareholders of the Merging Series shall not constitute a material adverse
change;
(k) On the Closing Date, all Federal and other tax returns, dividend
reporting forms, and other tax-related reports of the Merging Series required by
law to have been filed by such date (including any extensions) shall have been
filed and are or will be correct in all material respects, and all Federal and
other taxes shown as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made for the payment
thereof, and to the best of the Merging Series' knowledge, no such return is
currently under audit and no assessment has been asserted with respect to such
returns;
(l) For each taxable year of its operation (including the taxable year
ending on the Closing Date), the Merging Series has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a regulated
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investment company, has been (or will be) eligible to and has computed (or will
compute) its Federal income tax under Section 852 of the Code, and will have
distributed all of its investment company taxable income and net capital gain
(as defined in the Code) that has accrued through the Closing Date, and before
the Closing Date will have declared dividends sufficient to distribute all of
its investment company taxable income and net capital gain for the period ending
on the Closing Date;
(m) All issued and outstanding shares of the Merging Series are, and on
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable and have been offered and sold in every state and the
District of Columbia in compliance in all material respects with applicable
registration requirements of the 1933 Act and state securities laws. All of the
issued and outstanding shares of the Merging Series will, at the time of
Closing, be held by the persons and in the amounts set forth in the records of
the Transfer Agent, on behalf of the Merging Series, as provided in paragraph
3.3. The Merging Series does not have outstanding any options, warrants or other
rights to subscribe for or purchase any of the shares of the Merging Series, nor
is there outstanding any security convertible into any of the Merging Series
shares;
(n) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action, if any,
on the part of the Trustees of the Trust, on behalf of the Merging Series, and,
subject to the approval of the shareholders of the Merging Series, this
Agreement will constitute a valid and binding obligation of the Merging Series,
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;
(o) The information to be furnished by the Merging Series for use in
registration statements, proxy materials and other documents filed or to be
filed with any Federal, state or local regulatory authority (including the
NASD), which may be necessary in connection with the transactions contemplated
hereby, shall be accurate and complete in all material respects and shall comply
in all material respects with Federal securities and other laws and regulations
thereunder applicable thereto; and
(p) The proxy statement of the Merging Series (the "Proxy Statement")
to be included in the Registration Statement referred to in paragraph 5.6,
insofar as it relates to the Merging Series, will, on the effective date of the
Registration Statement and on the Closing Date (i) 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;
provided, however, that the representations and warranties in this subparagraph
(p) shall not apply to statements in or omissions from the Proxy Statement and
the Registration Statement made in reliance upon and in conformity with
information that was furnished by the Surviving Series for use therein, and (ii)
comply in all material respects with the provisions of the 1933 Act, the 1934
Act and the 1940 Act and the rules and regulations thereunder.
4.2 The Trust, on behalf of the Surviving Series, represents and
warrants as follows:
(a) The Surviving Series is duly organized as a series of the Trust,
which is a business trust duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts with power under the Trust's
Declaration of Trust to own all of its Assets and to carry on its business as it
is now being conducted;
(b) The 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
shares of the Surviving Series under the 1933 Act, is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Surviving Series
of the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act and such as may be required by state
securities laws;
(d) The current prospectus and statement of additional information of
the Surviving Series and each prospectus and statement of additional information
of the Surviving Series used during the three years previous to
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the date of this Agreement conforms or conformed at the time of its use 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 does not or
did not at the time of its use 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;
(e) On the Closing Date, the Trust, on behalf of the Surviving Series
will have good and marketable title to the Surviving Series' assets, free of any
liens of other encumbrances, except those liens or encumbrances as to which the
Merging Series has received notice and necessary documentation at or prior to
the Closing;
(f) The Surviving Series is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of the Declaration of Trust or of any agreement, indenture,
instrument, contract, lease or other undertaking to which the Trust on behalf of
the Surviving Series is a party or by which it is bound, or (ii) the
acceleration of any obligation, or the imposition of any penalty, under any
agreement, indenture, instrument, contract, lease, judgment or decree to which
the Trust on behalf of the Surviving Series is a party or by which it is bound;
(g) Except as otherwise disclosed in writing to and accepted by the
Trust, on behalf of the Merging Series, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or, to its knowledge, threatened against the Trust on behalf
of the Surviving Series or any of the Surviving Series' properties or assets
that, if adversely determined, would materially and adversely affect the
Surviving Series' financial condition or the conduct of the Surviving Series'
business. The Trust on behalf of the Surviving Series 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 Surviving Series'
business or the Surviving Series' ability to consummate the transactions herein
contemplated;
(h) The Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets and Schedule of Investments of the Surviving Series at
December 31, 2003, have been audited by PwC, independent registered public
accountants, and are in accordance with GAAP consistently applied, and such
statements (copies of which have been furnished to the Merging Series) present
fairly, in all material respects, the financial condition of the Surviving
Series as of such date in accordance with GAAP, and there are no known
contingent liabilities of the Surviving Series required to be reflected on a
balance sheet (including the notes thereto) in accordance with GAAP as of such
date not disclosed therein;
(i) Since December 31, 2003, there has not been any material adverse
change in the Surviving Series' financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Surviving Series of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Merging Series. For purposes of this subparagraph (i), a
decline in net asset value per share of the Surviving Series due to declines in
market values of securities in the Surviving Series' portfolio, the discharge of
Surviving Series liabilities, or the redemption of Surviving Series Shares by
shareholders of the Surviving Series, shall not constitute a material adverse
change;
(j) On the Closing Date, all Federal and other tax returns, dividend
reporting forms, and other tax-related reports of the Surviving Series required
by law to have been filed by such date (including any extensions) shall have
been filed and are or will be correct in all material respects, and all Federal
and other taxes shown as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made for the payment
thereof, and to the best of the Surviving Series' knowledge no such return is
currently under audit and no assessment has been asserted with respect to such
returns;
(k) For each taxable year of its operation (including the taxable year
including the Closing Date), the Surviving Series has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a regulated
investment company has been eligible to and has computed (or will compute) its
Federal income tax under Section 852 of the Code;
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(l) All issued and outstanding Surviving Series Shares are, and on the
Closing Date will be, duly and validly issued and outstanding, fully paid and
non-assessable (recognizing that, under Massachusetts law, it is theoretically
possible that shareholders of the Merging Series could, under certain
circumstances, be held personally liable for obligations of the Merging Series)
and have been offered and sold in every state and the District of Columbia in
compliance in all material respects with applicable registration requirements of
the 1933 Act. The Surviving Series does not have outstanding any options,
warrants or other rights to subscribe for or purchase any Surviving Series
Shares, nor is there outstanding any security convertible into any Surviving
Series Shares;
(m) The execution, delivery and performance of this Agreement will have
been fully authorized prior to the Closing Date by all necessary action, if any,
on the part of the Trustees of the Trust on behalf of the Surviving Series and
this Agreement will constitute a valid and binding obligation of the Trust on
behalf of the Surviving Series, 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;
(n) Surviving Series Shares to be issued and delivered to the Merging
Series, for the account of the Merging Series Shareholders, pursuant to the
terms of this Agreement, will on the Closing Date have been duly authorized and,
when so issued and delivered, will be duly and validly issued Surviving Series
Shares, and will be fully paid and non-assessable (recognizing that, under
Massachusetts law, it is theoretically possible that shareholders of the Merging
Series could, under certain circumstances, be held personally liable for
obligations of the Merging Series);
(o) The information to be furnished by the Trust for use in the
registration statements, proxy materials and other documents that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with Federal securities and other laws and regulations applicable
thereto; and
(p) That insofar as it relates to the Surviving Series, the
Registration Statement relating to the Surviving Series Shares issuable
hereunder, and the proxy materials of the Merging Series to be included in the
Registration Statement, and any amendment or supplement to the foregoing, will,
from the effective date of the Registration Statement through the date of the
meeting of shareholders of the Merging Series contemplated therein (i) 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
misleading; provided, however, that the representations and warranties in this
subparagraph (p) shall not apply to statements in or omissions from the
Registration Statement made in reliance upon and in conformity with information
that was furnished by the Merging Series for use therein, and (ii) comply in all
material respects with the provisions of the 1933 Act, the 1934 Act and the 1940
Act and the rules and regulations thereunder.
5. COVENANTS OF THE TRUST ON BEHALF OF THE SURVIVING SERIES AND THE
MERGING SERIES
5.1 The Surviving Series and the Merging Series 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, and any other
distribution that may be advisable.
5.2 The Trust will call a meeting of the shareholders of the Merging
Series to consider and act upon this Agreement and to take all other action
necessary to obtain approval of the transactions contemplated herein.
5.3 The Merging Series covenants that the Surviving Series 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 Subject to the provisions of this Agreement, the Surviving Series
and the Merging Series 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.
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5.5 As soon as is reasonably practicable after the Closing, the Merging
Series will make a liquidating distribution to its shareholders consisting of
the Surviving Series Shares received at the Closing.
5.6 The Surviving Series and the Merging Series shall each use its
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent to effect the transactions contemplated by this Agreement as promptly
as practicable.
5.7 The Trust, on behalf of the Merging Series, covenants that it will,
from time to time, as and when reasonably requested by the Trust on behalf of
the Surviving Series, execute and deliver or cause to be executed and delivered
all such assignments and other instruments, and will take or cause to be taken
such further action as the Trust on behalf of the Surviving Series may
reasonably deem necessary or desirable in order to vest in and confirm (a) the
Trust's, on behalf of the Merging Series', title to and possession of the
Surviving Series Shares to be delivered hereunder, and (b) the Trust's, on
behalf of the Surviving Series', title to and possession of all the assets, and
to carry out the intent and purpose of this Agreement.
5.8 The Surviving Series will 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
its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE MERGING SERIES
The obligations of the Trust, on behalf of the Merging Series, to
consummate the transactions provided for herein shall be subject, at the Trust's
election, to the performance by the Trust, on behalf of the Surviving Series, of
all the obligations to be performed by it hereunder on or before the Closing
Date, and, in addition thereto, the following further conditions:
6.1 All representations and warranties of the Trust, on behalf of the
Surviving Series, 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 Trust, on behalf of the Surviving Series, shall have performed
all of the covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by the Trust, on behalf of the
Surviving Series on or before the Closing Date;
6.3 The Merging Series and the Surviving Series shall have agreed on
the number of full and fractional Surviving Series Shares to be issued in
connection with the Reorganization after such number has been calculated in
accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SURVIVING SERIES
The obligations of the Trust, on behalf of the Surviving Series, to
complete the transactions provided for herein shall be subject, at the Trust's
election, to the performance by the Trust, on behalf of the Merging Series, of
all of the obligations to be performed by it hereunder on or before the Closing
Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of the Trust, on behalf of the
Merging Series, 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 Trust shall have delivered to the Surviving Series a statement
of the Merging Series' assets and liabilities, as of the Closing Date, certified
by the Treasurer of the Trust;
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7.3 The Trust, on behalf of the Merging Series, shall have performed
all of the covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by Trust, on behalf of the Merging
Series, on or before the Closing Date;
7.4 The Merging Series and the Surviving Series shall have agreed on
the number of full and fractional Surviving Series Shares to be issued in
connection with the Reorganization after such number has been calculated in
accordance with paragraph 1.1; and
7.5 The Merging Series shall have declared and paid a distribution or
distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its investment company taxable income and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to 4:00
p.m. Eastern time on the Closing; and (ii) any undistributed investment company
taxable income and net realized capital gains from any period to the extent not
otherwise already distributed.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SURVIVING SERIES AND
THE MERGING SERIES
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to the Trust, on behalf of the Merging
Series, or the Trust, on behalf of the Surviving Series, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
8.1 The Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Merging Series in accordance with the provisions of the Declaration of
Trust, applicable Massachusetts law and the 1940 Act. Notwithstanding anything
herein to the contrary, the Trust may not waive the conditions set forth in this
paragraph 8.1;
8.2 On the Closing Date no action, suit or other proceeding shall be
pending or, to its knowledge, threatened before any court or governmental agency
in which it is sought to restrain or prohibit, or 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 Trust to permit consummation, 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 Surviving Series or the Merging
Series, provided that either party hereto may for itself waive any of such
conditions;
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; and
8.5 The parties shall have received the opinion of McDermott Will &
Emery LLP, special tax counsel to the Trust, addressed to the Trust
substantially to the effect that, based upon certain facts, assumptions, and
representations, the transaction contemplated by this Agreement, shall for
Federal income tax purposes, qualify as a tax free reorganization described in
Section 368(a) of the Code. The delivery of such opinion is conditioned upon
receipt of representations McDermott Will & Emery LLP shall request of the
Trust. Notwithstanding anything herein to the contrary, the Trust may not waive
the condition set forth in this paragraph 8.5.
9. BROKERAGE FEES AND EXPENSES
9.1 The Trust on behalf of the Merging Series and the Trust on behalf
of the Surviving Series represent and warrant to each other that there are no
brokers or finders entitled to receive any payments in connection with the
transactions provided for herein.
9.2 The expenses relating to the proposed Reorganization will be borne
by Phoenix Life Insurance Company. The costs of the Reorganization shall
include, but not be limited to, costs associated with obtaining any necessary
order of exemption from the 1940 Act, preparation of the Registration Statement,
printing and distributing
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the Surviving Series' prospectus and the Merging Series' proxy materials, legal
fees, accounting fees, securities registration fees, and expenses of holding
shareholders' meetings. Notwithstanding any of the foregoing, expenses will in
any event be paid by the party directly incurring such expenses if and to the
extent that the payment by another person of such expenses would result in the
disqualification of such party as a "regulated investment company" within the
meaning of Section 851 of the Code.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Trust has not made any representation, warranty or covenant
not set forth herein; this Agreement constitutes the entire agreement between
the parties.
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing shall survive the Closing.
11. TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned (i) by mutual agreement of the parties, (ii) by either
party if the Closing shall not have occurred on or before December 31, 2004,
unless such date is extended by mutual agreement of the parties, or (iii) by
either party if the other party shall have materially breached its obligations
under this Agreement or made a material and intentional misrepresentation herein
or in connection herewith. In the event of any such termination, this Agreement
shall become void and there shall be no liability hereunder on the part of any
party or their respective Trustees or officers, except for any such material
breach or intentional misrepresentation, as to each of which all remedies at law
or in equity of the party adversely affected shall survive.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be deemed necessary or advisable by the authorized officers of the Trust;
provided, however, that following the meeting of the shareholders of the Merging
Series called by the Merging Series 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 Surviving Series Shares to be issued to the Merging Series
Shareholders under this Agreement to the detriment of such shareholders without
their further approval.
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
facsimile, personal service or prepaid or certified mail addressed to The
Phoenix Edge Series Fund, One American Row, Hartford, CT 06102-5056, Attn:
Richard J. Wirth, Esq.
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 without regard to its
principles of conflicts of laws.
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.
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14.5 It is expressly agreed that the obligations of the parties
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Trust personally, but shall bind only the
trust property of the Merging Series and the Surviving Series, as provided in
the Declaration of Trust of the Trust. The execution and delivery by such
officers 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 such party as provided in the Declaration of Trust.
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 thereto and attested by its Secretary or Assistant Secretary.
Attest: THE PHOENIX EDGE SERIES FUND ON BEHALF OF ITS
PHOENIX-ALLIANCE/BERNSTEIN GROWTH + VALUE SERIES
__________________________________ By: _______________________________
SECRETARY
Title: _______________________________
Attest: THE PHOENIX EDGE SERIES FUND ON BEHALF OF ITS
PHOENIX-OAKHURST GROWTH AND INCOME SERIES
__________________________________ By: _______________________________
SECRETARY
Title: _______________________________
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APPENDIX B
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 14th day of September, 2004, by and between The Phoenix Edge Series
Fund, a Massachusetts business trust (the "Trust"), with its principal place of
business at 101 Munson Street, Greenfield, Massachusetts 01301, on behalf of the
Phoenix-Oakhurst Growth and Income Series (the "Surviving Series"), a separate
series of the Trust, and the Trust, on behalf of the Phoenix-MFS Investors Trust
Series (the "Merging Series"), another separate series of the Trust.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1) of the
United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization (the "Reorganization") will consist of the transfer of all of the
assets of the Merging Series to the Surviving Series in exchange solely for
voting shares of beneficial interest of the Surviving Series (the "Surviving
Series Shares"), the assumption by the Surviving Series of all liabilities of
the Merging Series, and the distribution of the Surviving Series Shares to the
shareholders of the Merging Series in complete liquidation of the Merging Series
as provided herein, all upon the terms and conditions hereinafter set forth in
this Agreement.
The Merging Series and the Surviving Series are separate series of the
Trust, an open-end, registered investment company of the management type. The
Merging Series owns securities that generally are assets of the character in
which the Surviving Series is permitted to invest.
The Trustees of the Trust have determined, with respect to the
Surviving Series, that the exchange of all of the assets of the Merging Series
for Surviving Series Shares and the assumption of all liabilities of the Merging
Series by the Surviving Series is in the best interests of the Surviving Series
and its shareholders and that the interests of the existing shareholders of the
Surviving Series would not be diluted as a result of this transaction.
The Trustees of the Trust, have also determined, with respect to the
Merging Series, that the exchange of all of the assets of the Merging Series for
Surviving Series Shares and the assumption of all liabilities of the Merging
Series by the Surviving Series is in the best interests of the Merging Series
and its shareholders and that the interests of the existing shareholders of the
Merging Series 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. TRANSFER OF ASSETS OF THE MERGING SERIES TO THE SURVIVING SERIES IN
EXCHANGE FOR THE SURVIVING SERIES SHARES, THE ASSUMPTION OF ALL MERGING
SERIES LIABILITIES, THE LIQUIDATION OF THE MERGING SERIES
1.1 Subject to the requisite approval of the Merging Series
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Merging Series
agrees to transfer all of the Merging Series' assets, as set forth in paragraph
1.2, to the Surviving Series, and the Surviving Series agrees in exchange
therefore: (i) to deliver to the Merging Series the number of full and
fractional Surviving Series Shares, determined by dividing the value of the
Merging Series' net assets, computed in the manner and as of the time and date
set forth in paragraph 2.1, by the net asset value of one Surviving Series
Share, computed in the manner and as of the time and date set forth in paragraph
2.2; and (ii) to assume all liabilities of the Merging Series, as set forth in
paragraph 1.3. Such transactions shall take place at the closing provided for in
paragraph 3.1 (the "Closing Date").
1.2 The assets of the Merging Series to be acquired by the Surviving
Series shall consist of all assets and property, including, without limitation,
all cash, securities, commodities and futures interests and dividends or
interests receivable, that are owned by the Merging Series, and any deferred or
prepaid expenses shown as an asset on the books of the Merging Series, on the
Closing Date (collectively, the "Assets").
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1.3 The Merging Series will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Surviving Series
shall also assume all of the liabilities of the Merging Series, whether accrued
or contingent, known or unknown, existing at the Valuation Date, as defined in
paragraph 2.1 (collectively, "Liabilities"). On or as soon as practicable prior
to the Closing Date, the Merging Series will declare and pay to its shareholders
of record one or more dividends and/or other distributions so that it will have
distributed substantially all (and in no event less than 98%) of its investment
company taxable income and realized net capital gain, if any, for the current
taxable year through the Closing Date.
1.4 Immediately after the transfer of Assets provided for in paragraph
1.1, the Merging Series will distribute to the Merging Series' shareholders of
record, determined as of immediately after the close of business on the Closing
Date (the "Merging Series Shareholders"), on a pro rata basis, the Surviving
Series Shares received by the Merging Series pursuant to paragraph 1.1, and will
completely liquidate. Such distribution and liquidation will be accomplished,
with respect to the Merging Series' shares, by the transfer of the Surviving
Series Shares then credited to the account of the Merging Series on the books of
the Surviving Series to open accounts on the share records of the Surviving
Series in the names of the Merging Series Shareholders. The aggregate net asset
value of Surviving Series Shares to be so credited to Merging Series
Shareholders shall be equal to the aggregate net asset value of the Merging
Series shares owned by such shareholders on the Closing Date. All issued and
outstanding shares of the Merging Series will simultaneously be canceled on the
books of the Merging Series.
1.5 Ownership of Surviving Series Shares will be shown on the books of
the Surviving Series or its transfer agent, as defined in paragraph 3.3.
1.6 Any reporting responsibility of the Merging Series including, but
not limited to, the responsibility for filing of regulatory reports, tax
returns, or other documents with the U.S. Securities and Exchange Commission
(the "Commission"), any state securities commission, and any Federal, state or
local tax authorities or any other relevant regulatory authority, is and shall
remain the responsibility of the Merging Series.
2. VALUATION
2.1 The value of the Assets shall be the value computed as of
immediately after the close of business of the New York Stock Exchange and after
the declaration of any dividends on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), using the valuation procedures
established by the Trust's Board of Trustees, which shall be described in the
then-current prospectus and statement of additional information with respect to
the Surviving Series.
2.2 The net asset value of Surviving Series Shares shall be the net
asset value per share computed as of the Valuation Date, using the valuation
procedures established by the Trust's Board of Trustees, which shall be
described in the Surviving Series' then-current prospectus and statement of
additional information.
2.3 The number of Surviving Series Shares to be issued (including
fractional shares, if any) in exchange for the Merging Series' Assets shall be
determined by dividing the value of the net assets with respect to the shares of
the Merging Series determined using the same valuation procedures referred to in
paragraph 2.1, by the net asset value of a Surviving Series Share, determined in
accordance with paragraph 2.2.
2.4 All computations of value shall be made by Phoenix Equity Planning
Corporation, in its capacity as financial agent for the Trust.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be September 17, 2004, or such other date as
the parties may agree. All acts taking place at the closing of the transaction
(the "Closing") shall be deemed to take place simultaneously as of immediately
after the close of business on the Closing Date unless otherwise agreed to by
the parties. The close of business on the Closing Date shall be as of 4:00 p.m.,
Eastern Time. The Closing shall be held at the offices of the Trust or at such
other time and/or place as the parties may agree.
3.2 The Trust shall direct State Street Bank and Trust Company, as
custodian for the Merging Series (the "Custodian"), to deliver, on the next
business day after the Closing, a certificate of an authorized officer stating
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that (i) the Assets have been delivered in proper form to the Surviving Series
on the next business day following the Closing Date, and (ii) all necessary
taxes in connection with the delivery of the Assets, including all applicable
Federal and state stock transfer stamps, if any, have been paid or provision for
payment has been made. The Merging Series' portfolio securities represented by a
certificate or other written instrument shall be presented by the Custodian to
the custodian for the Surviving Series for examination no later than on the next
business day following the Closing Date, and shall be transferred and delivered
by the Merging Series on the next business day following the Closing Date for
the account of the Surviving Series duly endorsed in proper form for transfer in
such condition as to constitute good delivery thereof. The Custodian shall
deliver as of the Closing Date by book entry, in accordance with the customary
practices of such depositories and the Custodian, the Merging Series' portfolio
securities and instruments deposited with a securities depository, as defined in
Rule 17f-4 under the Investment Company Act of 1940, as amended (the "1940
Act"). The cash to be transferred by the Merging Series shall be delivered by
wire transfer of Federal funds on the Closing Date.
3.3 The Trust shall direct the Variable Products Operation unit of
Phoenix Life Insurance Company (the "Transfer Agent"), on behalf of the Merging
Series, to deliver on the next business day following the Closing, a certificate
of an authorized officer stating that its records contain the names and
addresses of the Merging Series Shareholders, and the number and percentage
ownership of outstanding shares owned by each such shareholder immediately prior
to the Closing. The Surviving Series shall issue and deliver to the Secretary of
the Surviving Series, a confirmation evidencing the Surviving Series Shares to
be credited on the Closing Date or provide evidence satisfactory to the Merging
Series that such Surviving Series Shares have been credited to the Merging
Series' account on the books of the Surviving Series. At the Closing each party
shall deliver to the other such bills of sale, checks, assignments, share
certificates, if any, receipts or other documents as such other party or its
counsel may reasonably request.
3.4 In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Surviving Series or the Merging Series shall be closed to trading or trading
thereupon shall be restricted, or (b) trading or the reporting of trading on
such Exchange or elsewhere shall be disrupted so that, in the judgment of the
Board of Trustees of the Trust, accurate appraisal of the value of the net
assets of the Surviving Series or the Merging Series, respectively, is
impracticable, the Closing Date shall be postponed until the first Friday after
the day when trading shall have been fully resumed and reporting shall have been
restored.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Trust, on behalf of the Merging Series, represents and
warrants as follows:
(a) The Merging Series is duly organized as a series of the Trust,
which is a business trust duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts, with power under the
Trust's Declaration of Trust, as amended ("Declaration of Trust"), to own all of
its Assets and to carry on its business as it is now being conducted;
(b) The 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
shares of the Merging Series under the Securities Act of 1933, as amended ("1933
Act"), is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Merging Series of
the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and the 1940 Act and such as may be required by state securities laws;
(d) The current prospectus and statement of additional information of
the Merging Series and each prospectus and statement of additional information
of the Merging Series used at all times previous to the date of this Agreement
conforms or conformed at the time of its use 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 does not or did not at the time of
its use include any untrue statement of a material fact or omit to state any
material fact required to
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be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading;
(e) On the Closing Date, the Trust, on behalf of the Merging Series,
will have good and marketable title to the Assets and full right, power, and
authority to sell, assign, transfer and deliver such Assets hereunder free of
any liens or other encumbrances; and upon delivery and payment for such Assets;
the Trust, on behalf of the Surviving Series, will acquire good and marketable
title thereto, subject to no restrictions on the full transfer thereof,
including such restrictions as might arise under the 1933 Act, other than as
disclosed to the Surviving Series;
(f) The Merging Series is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of the Declaration of Trust or of any agreement, indenture,
instrument, contract, lease or other undertaking to which the Trust on behalf of
the Merging Series is a party or by which it is bound, or (ii) the acceleration
of any obligation, or the imposition of any penalty, under any agreement,
indenture, instrument, contract, lease, judgment or decree to which the Trust on
behalf of the Merging Series is a party or by which it is bound;
(g) All material contracts or other commitments of the Merging Series
(other than this Agreement and certain investment contracts, including options,
futures and forward contracts) will terminate without liability to the Merging
Series on or prior to the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted by the
Trust, on behalf of the Surviving Series, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or, to its knowledge, threatened against the Trust on behalf
of the Merging Series or any of its properties or assets that, if adversely
determined, would materially and adversely affect its financial condition or the
conduct of its business. The Trust, on behalf of the Merging Series, 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;
(i) The Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets, and Schedule of Investments of the Merging Series at
December 31, 2003, have been audited by PricewaterhouseCoopers, LLP ("PwC"),
independent registered public accountants, and are in accordance with generally
accepted accounting principles ("GAAP") consistently applied, and such
statements (copies of which have been furnished to the Surviving Series) present
fairly, in all material respects, the financial condition of the Merging Series
as of such date in accordance with GAAP, and there are no known contingent
liabilities of the Merging Series required to be reflected on a balance sheet
(including the notes thereto) in accordance with GAAP as of such date not
disclosed therein;
(j) Since December 31, 2003, there has not been any material adverse
change in the Merging Series' financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Merging Series of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Surviving Series. For the purposes of this subparagraph (j),
a decline in net asset value per share of the Merging Series due to declines in
market values of securities in the Merging Series' portfolio, the discharge of
Merging Series liabilities, or the redemption of Merging Series Shares by
shareholders of the Merging Series shall not constitute a material adverse
change;
(k) On the Closing Date, all Federal and other tax returns, dividend
reporting forms, and other tax-related reports of the Merging Series required by
law to have been filed by such date (including any extensions) shall have been
filed and are or will be correct in all material respects, and all Federal and
other taxes shown as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made for the payment
thereof, and to the best of the Merging Series' knowledge, no such return is
currently under audit and no assessment has been asserted with respect to such
returns;
(l) For each taxable year of its operation (including the taxable year
ending on the Closing Date), the Merging Series has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a regulated
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investment company, has been (or will be) eligible to and has computed (or will
compute) its Federal income tax under Section 852 of the Code, and will have
distributed all of its investment company taxable income and net capital gain
(as defined in the Code) that has accrued through the Closing Date, and before
the Closing Date will have declared dividends sufficient to distribute all of
its investment company taxable income and net capital gain for the period ending
on the Closing Date;
(m) All issued and outstanding shares of the Merging Series are, and on
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable and have been offered and sold in every state and the
District of Columbia in compliance in all material respects with applicable
registration requirements of the 1933 Act and state securities laws. All of the
issued and outstanding shares of the Merging Series will, at the time of
Closing, be held by the persons and in the amounts set forth in the records of
the Transfer Agent, on behalf of the Merging Series, as provided in paragraph
3.3. The Merging Series does not have outstanding any options, warrants or other
rights to subscribe for or purchase any of the shares of the Merging Series, nor
is there outstanding any security convertible into any of the Merging Series
shares;
(n) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action, if any,
on the part of the Trustees of the Trust, on behalf of the Merging Series, and,
subject to the approval of the shareholders of the Merging Series, this
Agreement will constitute a valid and binding obligation of the Merging Series,
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;
(o) The information to be furnished by the Merging Series for use in
registration statements, proxy materials and other documents filed or to be
filed with any Federal, state or local regulatory authority (including the
NASD), which may be necessary in connection with the transactions contemplated
hereby, shall be accurate and complete in all material respects and shall comply
in all material respects with Federal securities and other laws and regulations
thereunder applicable thereto; and
(p) The proxy statement of the Merging Series (the "Proxy Statement")
to be included in the Registration Statement referred to in paragraph 5.6,
insofar as it relates to the Merging Series, will, on the effective date of the
Registration Statement and on the Closing Date (i) 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;
provided, however, that the representations and warranties in this subparagraph
(p) shall not apply to statements in or omissions from the Proxy Statement and
the Registration Statement made in reliance upon and in conformity with
information that was furnished by the Surviving Series for use therein, and (ii)
comply in all material respects with the provisions of the 1933 Act, the 1934
Act and the 1940 Act and the rules and regulations thereunder.
4.2 The Trust, on behalf of the Surviving Series, represents and
warrants as follows:
(a) The Surviving Series is duly organized as a series of the Trust,
which is a business trust duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts with power under the Trust's
Declaration of Trust to own all of its Assets and to carry on its business as it
is now being conducted;
(b) The 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
shares of the Surviving Series under the 1933 Act, is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Surviving Series
of the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act and such as may be required by state
securities laws;
(d) The current prospectus and statement of additional information of
the Surviving Series and each prospectus and statement of additional information
of the Surviving Series used during the three years previous to
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the date of this Agreement conforms or conformed at the time of its use 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 does not or
did not at the time of its use 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;
(e) On the Closing Date, the Trust, on behalf of the Surviving Series
will have good and marketable title to the Surviving Series' assets, free of any
liens of other encumbrances, except those liens or encumbrances as to which the
Merging Series has received notice and necessary documentation at or prior to
the Closing;
(f) The Surviving Series is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of the Declaration of Trust or of any agreement, indenture,
instrument, contract, lease or other undertaking to which the Trust on behalf of
the Surviving Series is a party or by which it is bound, or (ii) the
acceleration of any obligation, or the imposition of any penalty, under any
agreement, indenture, instrument, contract, lease, judgment or decree to which
the Trust on behalf of the Surviving Series is a party or by which it is bound;
(g) Except as otherwise disclosed in writing to and accepted by the
Trust, on behalf of the Merging Series, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or, to its knowledge, threatened against the Trust on behalf
of the Surviving Series or any of the Surviving Series' properties or assets
that, if adversely determined, would materially and adversely affect the
Surviving Series' financial condition or the conduct of the Surviving Series'
business. The Trust on behalf of the Surviving Series 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 Surviving Series'
business or the Surviving Series' ability to consummate the transactions herein
contemplated;
(h) The Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets and Schedule of Investments of the Surviving Series at
December 31, 2003, have been audited by PwC, independent registered public
accountants, and are in accordance with GAAP consistently applied, and such
statements (copies of which have been furnished to the Merging Series) present
fairly, in all material respects, the financial condition of the Surviving
Series as of such date in accordance with GAAP, and there are no known
contingent liabilities of the Surviving Series required to be reflected on a
balance sheet (including the notes thereto) in accordance with GAAP as of such
date not disclosed therein;
(i) Since December 31, 2003, there has not been any material adverse
change in the Surviving Series' financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Surviving Series of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Merging Series. For purposes of this subparagraph (i), a
decline in net asset value per share of the Surviving Series due to declines in
market values of securities in the Surviving Series' portfolio, the discharge of
Surviving Series liabilities, or the redemption of Surviving Series Shares by
shareholders of the Surviving Series, shall not constitute a material adverse
change;
(j) On the Closing Date, all Federal and other tax returns, dividend
reporting forms, and other tax-related reports of the Surviving Series required
by law to have been filed by such date (including any extensions) shall have
been filed and are or will be correct in all material respects, and all Federal
and other taxes shown as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made for the payment
thereof, and to the best of the Surviving Series' knowledge no such return is
currently under audit and no assessment has been asserted with respect to such
returns;
(k) For each taxable year of its operation (including the taxable year
including the Closing Date), the Surviving Series has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a regulated
investment company has been eligible to and has computed (or will compute) its
Federal income tax under Section 852 of the Code;
B-6
(l) All issued and outstanding Surviving Series Shares are, and on the
Closing Date will be, duly and validly issued and outstanding, fully paid and
non-assessable (recognizing that, under Massachusetts law, it is theoretically
possible that shareholders of the Merging Series could, under certain
circumstances, be held personally liable for obligations of the Merging Series)
and have been offered and sold in every state and the District of Columbia in
compliance in all material respects with applicable registration requirements of
the 1933 Act. The Surviving Series does not have outstanding any options,
warrants or other rights to subscribe for or purchase any Surviving Series
Shares, nor is there outstanding any security convertible into any Surviving
Series Shares;
(m) The execution, delivery and performance of this Agreement will have
been fully authorized prior to the Closing Date by all necessary action, if any,
on the part of the Trustees of the Trust on behalf of the Surviving Series and
this Agreement will constitute a valid and binding obligation of the Trust on
behalf of the Surviving Series, 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;
(n) Surviving Series Shares to be issued and delivered to the Merging
Series, for the account of the Merging Series Shareholders, pursuant to the
terms of this Agreement, will on the Closing Date have been duly authorized and,
when so issued and delivered, will be duly and validly issued Surviving Series
Shares, and will be fully paid and non-assessable (recognizing that, under
Massachusetts law, it is theoretically possible that shareholders of the Merging
Series could, under certain circumstances, be held personally liable for
obligations of the Merging Series);
(o) The information to be furnished by the Trust for use in the
registration statements, proxy materials and other documents that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with Federal securities and other laws and regulations applicable
thereto; and
(p) That insofar as it relates to the Surviving Series, the
Registration Statement relating to the Surviving Series Shares issuable
hereunder, and the proxy materials of the Merging Series to be included in the
Registration Statement, and any amendment or supplement to the foregoing, will,
from the effective date of the Registration Statement through the date of the
meeting of shareholders of the Merging Series contemplated therein (i) 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
misleading; provided, however, that the representations and warranties in this
subparagraph (p) shall not apply to statements in or omissions from the
Registration Statement made in reliance upon and in conformity with information
that was furnished by the Merging Series for use therein, and (ii) comply in all
material respects with the provisions of the 1933 Act, the 1934 Act and the 1940
Act and the rules and regulations thereunder.
5. COVENANTS OF THE TRUST ON BEHALF OF THE SURVIVING SERIES AND THE
MERGING SERIES
5.1 The Surviving Series and the Merging Series 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, and any other
distribution that may be advisable.
5.2 The Trust will call a meeting of the shareholders of the Merging
Series to consider and act upon this Agreement and to take all other action
necessary to obtain approval of the transactions contemplated herein.
5.3 The Merging Series covenants that the Surviving Series 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 Subject to the provisions of this Agreement, the Surviving Series
and the Merging Series 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.
B-7
5.5 As soon as is reasonably practicable after the Closing, the Merging
Series will make a liquidating distribution to its shareholders consisting of
the Surviving Series Shares received at the Closing.
5.6 The Surviving Series and the Merging Series shall each use its
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent to effect the transactions contemplated by this Agreement as promptly
as practicable.
5.7 The Trust, on behalf of the Merging Series, covenants that it will,
from time to time, as and when reasonably requested by the Trust on behalf of
the Surviving Series, execute and deliver or cause to be executed and delivered
all such assignments and other instruments, and will take or cause to be taken
such further action as the Trust on behalf of the Surviving Series may
reasonably deem necessary or desirable in order to vest in and confirm (a) the
Trust's, on behalf of the Merging Series', title to and possession of the
Surviving Series Shares to be delivered hereunder, and (b) the Trust's, on
behalf of the Surviving Series', title to and possession of all the assets, and
to carry out the intent and purpose of this Agreement.
5.8 The Surviving Series will 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
its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE MERGING SERIES
The obligations of the Trust, on behalf of the Merging Series, to
consummate the transactions provided for herein shall be subject, at the Trust's
election, to the performance by the Trust, on behalf of the Surviving Series, of
all the obligations to be performed by it hereunder on or before the Closing
Date, and, in addition thereto, the following further conditions:
6.1 All representations and warranties of the Trust, on behalf of the
Surviving Series, 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 Trust, on behalf of the Surviving Series, shall have performed
all of the covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by the Trust, on behalf of the
Surviving Series on or before the Closing Date;
6.3 The Merging Series and the Surviving Series shall have agreed on
the number of full and fractional Surviving Series Shares to be issued in
connection with the Reorganization after such number has been calculated in
accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SURVIVING SERIES
The obligations of the Trust, on behalf of the Surviving Series, to
complete the transactions provided for herein shall be subject, at the Trust's
election, to the performance by the Trust, on behalf of the Merging Series, of
all of the obligations to be performed by it hereunder on or before the Closing
Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of the Trust, on behalf of the
Merging Series, 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 Trust shall have delivered to the Surviving Series a statement
of the Merging Series' assets and liabilities, as of the Closing Date, certified
by the Treasurer of the Trust;
B-8
7.3 The Trust, on behalf of the Merging Series, shall have performed
all of the covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by Trust, on behalf of the Merging
Series, on or before the Closing Date;
7.4 The Merging Series and the Surviving Series shall have agreed on
the number of full and fractional Surviving Series Shares to be issued in
connection with the Reorganization after such number has been calculated in
accordance with paragraph 1.1; and
7.5 The Merging Series shall have declared and paid a distribution or
distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its investment company taxable income and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to 4:00
p.m. Eastern time on the Closing; and (ii) any undistributed investment company
taxable income and net realized capital gains from any period to the extent not
otherwise already distributed.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SURVIVING SERIES AND
THE MERGING SERIES
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to the Trust, on behalf of the Merging
Series, or the Trust, on behalf of the Surviving Series, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
8.1 The Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Merging Series in accordance with the provisions of the Declaration of
Trust, applicable Massachusetts law and the 1940 Act. Notwithstanding anything
herein to the contrary, the Trust may not waive the conditions set forth in this
paragraph 8.1;
8.2 On the Closing Date no action, suit or other proceeding shall be
pending or, to its knowledge, threatened before any court or governmental agency
in which it is sought to restrain or prohibit, or 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 Trust to permit consummation, 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 Surviving Series or the Merging
Series, provided that either party hereto may for itself waive any of such
conditions;
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; and
8.5 The parties shall have received the opinion of McDermott Will &
Emery LLP, special tax counsel to the Trust, addressed to the Trust
substantially to the effect that, based upon certain facts, assumptions, and
representations, the transaction contemplated by this Agreement, shall for
Federal income tax purposes, qualify as a tax free reorganization described in
Section 368(a) of the Code. The delivery of such opinion is conditioned upon
receipt of representations McDermott, Will & Emery LLP shall request of the
Trust. Notwithstanding anything herein to the contrary, the Trust may not waive
the condition set forth in this paragraph 8.5.
9. BROKERAGE FEES AND EXPENSES
9.1 The Trust on behalf of the Merging Series and the Trust on behalf
of the Surviving Series represent and warrant to each other that there are no
brokers or finders entitled to receive any payments in connection with the
transactions provided for herein.
9.2 The expenses relating to the proposed Reorganizations will be borne
by Phoenix Life Insurance Company. The costs of the Reorganizations shall
include, but not be limited to, costs associated with obtaining any necessary
order of exemption from the 1940 Act, preparation of the Registration Statement,
printing and distributing
B-9
the Surviving Series' prospectus and the Merging Series' proxy materials, legal
fees, accounting fees, securities registration fees, and expenses of holding
shareholders' meetings. Notwithstanding any of the foregoing, expenses will in
any event be paid by the party directly incurring such expenses if and to the
extent that the payment by another person of such expenses would result in the
disqualification of such party as a "regulated investment company" within the
meaning of Section 851 of the Code.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Trust has not made any representation, warranty or covenant
not set forth herein; this Agreement constitutes the entire agreement between
the parties.
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing shall survive the Closing.
11. TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned (i) by mutual agreement of the parties, (ii) by either
party if the Closing shall not have occurred on or before December 31, 2004,
unless such date is extended by mutual agreement of the parties, or (iii) by
either party if the other party shall have materially breached its obligations
under this Agreement or made a material and intentional misrepresentation herein
or in connection herewith. In the event of any such termination, this Agreement
shall become void and there shall be no liability hereunder on the part of any
party or their respective Trustees or officers, except for any such material
breach or intentional misrepresentation, as to each of which all remedies at law
or in equity of the party adversely affected shall survive.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be deemed necessary or advisable by the authorized officers of the Trust;
provided, however, that following the meeting of the shareholders of the Merging
Series called by the Merging Series 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 Surviving Series Shares to be issued to the Merging Series
Shareholders under this Agreement to the detriment of such shareholders without
their further approval.
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
facsimile, personal service or prepaid or certified mail addressed to The
Phoenix Edge Series Fund, One American Row, Hartford, CT 06102-5056, Attn:
Richard J. Wirth, Esq.
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 without regard to its
principles of conflicts of laws.
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.
B-10
14.5 It is expressly agreed that the obligations of the parties
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Trust personally, but shall bind only the
trust property of the Merging Series and Surviving Series, as provided in the
Declaration of Trust of the Trust. The execution and delivery by such officers
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 such party as provided in the Declaration of Trust.
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 thereto and attested by its Secretary or Assistant Secretary.
Attest: THE PHOENIX EDGE SERIES FUND ON BEHALF OF ITS
PHOENIX-OAKHURST GROWTH AND INCOME SERIES
__________________________________ By: _______________________________
SECRETARY
Title: _______________________________
Attest: THE PHOENIX EDGE SERIES FUND ON BEHALF OF ITS
PHOENIX-MFS INVESTORS TRUST SERIES
__________________________________ By: _______________________________
SECRETARY
Title: _______________________________
- -----------------------
B-11
PART B
STATEMENT OF ADDITIONAL INFORMATION
ACQUISITION OF THE ASSETS OF
PHOENIX-ALLIANCE/BERNSTEIN GROWTH + VALUE SERIES
AND
PHOENIX-MFS INVESTORS TRUST SERIES
BY AND IN EXCHANGE FOR SHARES OF
PHOENIX-OAKHURST GROWTH AND INCOME SERIES
EACH A SERIES OF
THE PHOENIX EDGE SERIES FUND
101 Munson Street
Greenfield, Massachusetts 01301
800-541-0171
August 6, 2004
This Statement of Additional Information, relating specifically to the
proposed transfer of all of the assets and liabilities of the
Phoenix-Alliance/Bernstein Growth + Value Series and Phoenix-MFS Investors Trust
Series (the "Merging Series") to the Phoenix-Oakhurst Growth and Income Series
(the "Surviving Series") each a series of The Phoenix Edge Series Fund, consists
of this cover page and the following described documents:
1) the Statement of Additional Information of The Phoenix Edge
Series Fund, as filed via EDGAR on Form N-1A (File No. 033-05033) on April 30,
2004 with Post-Effective Amendment No. 47 to the Prospectus dated May 1, 2004
and incorporated by reference;
2) the Annual Report of The Phoenix Edge Series Fund for the
year ended December 31, 2003, as filed via EDGAR on Form N-CRS (File No.
811-04642) on March 8, 2004, and incorporated by reference; and
3) the Pro Forma Financial Statements, filed herewith.
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the Prospectus/Proxy
Statement dated August 6, 2004. A copy of the Prospectus/Proxy Statement may be
obtained without charge by calling Variable Products Operations ("VPO") at
800-541-0171 or by writing to Phoenix Variable Products Mail Operations at PO
Box 8027, Boston, Massachusetts 02266-8027.
The date of this Statement of Additional Information is August 6, 2004.
Phoenix-Oakhurst Growth and Income Series/Phoenix-Alliance/Bernstein Growth +
Value Series/Phoenix MFS Investors Trust Series
Pro Forma Combined Schedule of Investments
December 31, 2003 (Unaudited)
Shares or Par Value Value
========== ========== ========= ========== ============================================ ========= ========== ========= ==========
Phoenix- Phoenix- Phoenix- Phoenix-
Oakhurst Alliance/ Phoenix- Oakhurst Alliance/ Phoenix-
Growth Bernstein MFS Growth Bernstein MFS
and Growth Investors Pro Forma and Growth Investors Pro Forma
Income + Value Trust Combined Income + Value Trust Combined
Series Series Series Portfolios Description Series Series Series Portfolios
========== ========== ========= ========== ============================================ ========= ========== ========= ==========
COMMON STOCKS--96.1%
8,400 - - 8,400 3M Co. $ 714,252 $ - $ - $ 714,252
16,400 - 1,306 17,706 Abbott Laboratories 764,240 - 60,860 825,100
3,700 - - 3,700 Adobe Systems, Inc. 145,410 - - 145,410
6,200 - - 6,200 Aetna, Inc. 418,996 - - 418,996
3,900 - - 3,900 AFLAC, Inc. 141,102 - - 141,102
9,100 - - 9,100 Agilent Technologies, Inc. (b) 266,084 - - 266,084
4,500 - - 4,500 AGL Resources, Inc. 130,950 - - 130,950
- - 597 597 Air Products and Chemicals, Inc. - - 31,539 31,539
4,400 - - 4,400 Alexander & Baldwin, Inc. 148,236 - - 148,236
3,700 - - 3,700 Alliance Data Systems Corp. (b) 102,416 - - 102,416
37,600 1,700 - 39,300 Allstate Corp. (The) 1,617,552 73,134 - 1,690,686
6,600 - - 6,600 ALLTEL Corp. 307,428 - - 307,428
5,300 - - 5,300 Altera Corp. (b) 120,310 - - 120,310
2,500 850 2,635 5,985 Altria Group, Inc. 136,050 46,257 143,397 325,704
7,700 - - 7,700 Ambac Financial Group, Inc. 534,303 - - 534,303
- - 520 520 Amdocs Ltd. (b) - - 11,690 11,690
1,000 - - 1,000 Amerada Hess Corp. 53,170 - - 53,170
3,800 3,100 - 6,900 American Electric Power Co., Inc. 115,938 94,581 - 210,519
22,500 - 1,375 23,875 American Express Co. 1,085,175 - 66,316 1,151,491
- 2,800 1,315 4,115 American International Group, Inc. - 185,584 87,158 272,742
- - 190 190 American Standard Cos., Inc. (b) - - 19,133 19,133
- - 1,355 1,355 AmerisourceBergen Corp. - - 76,083 76,083
5,500 3,500 - 9,000 Amgen, Inc. (b) 339,900 216,300 - 556,200
- - 1,275 1,275 Analog Devices, Inc. (b) - - 58,204 58,204
- - 716 716 Anheuser-Busch Cos., Inc. - - 37,719 37,719
800 - - 800 Anthem, Inc. (b) 60,000 - - 60,000
- - 200 200 Applied Biosystems Group - Applera Corp. - - 4,142 4,142
13,600 - - 13,600 Applied Materials, Inc. (b) 305,320 - - 305,320
- - 935 935 ARAMARK Corp. Class B - - 25,638 25,638
- - 1,080 1,080 Archer Daniels Midland Co. - - 16,438 16,438
8,900 - - 8,900 AT&T Corp. 180,670 - - 180,670
21,000 - 4,120 25,120 AT&T Wireless Services, Inc. (b) 167,790 - 32,919 200,709
800 - - 800 Avnet, Inc. (b) 17,328 - - 17,328
31,900 2,000 1,469 35,369 Bank of America Corp. 2,565,717 160,860 118,152 2,844,729
- - 550 550 Bank of New York Co., Inc. (The) - - 18,216 18,216
15,400 - 1,185 16,585 Bank One Corp. 702,086 - 54,024 756,110
3,900 - 210 4,110 Bard (C.R.), Inc. 316,875 - 17,063 333,938
1,800 - - 1,800 Barnes & Noble, Inc. (b) 59,130 - - 59,130
6,600 - - 6,600 Bausch & Lomb, Inc. 342,540 - - 342,540
- - 1,770 1,770 Baxter International, Inc. - - 54,020 54,020
2,700 - - 2,700 Bear Stearns Cos., Inc. (The) 215,865 - - 215,865
800 - - 800 Beckman Coulter, Inc. 40,664 - - 40,664
8,000 - - 8,000 Becton, Dickinson & Co. 329,120 - - 329,120
- 1,100 - 1,100 Bed Bath & Beyond, Inc. (b) - 47,685 - 47,685
43,100 - - 43,100 BellSouth Corp. 1,219,730 - - 1,219,730
8,100 - - 8,100 Black & Decker Corp. (The) 399,492 - - 399,492
2,400 - - 2,400 Block (H&R), Inc. 132,888 - - 132,888
17,600 - - 17,600 Blockbuster, Inc. Class A 315,920 - - 315,920
6,600 - - 6,600 BMC Software, Inc. (b) 123,090 - - 123,090
11,700 - - 11,700 Briggs & Stratton Corp. 788,580 - - 788,580
80,100 - - 80,100 Bristol-Myers Squibb Co. 2,290,860 - - 2,290,860
1,400 - - 1,400 Brunswick Corp. 44,562 - - 44,562
- 3,600 - 3,600 Burlington Northern Santa Fe Corp. - 116,460 - 116,460
1,700 - - 1,700 Capital Automotive REIT 54,400 - - 54,400
900 - - 900 Capital One Financial Corp. 55,161 - - 55,161
- - 400 400 Cardinal Health, Inc. - - 24,464 24,464
2,900 - - 2,900 Caterpillar, Inc. 240,758 - - 240,758
11,000 - - 11,000 Cendant Corp. (b) 244,970 - - 244,970
6,300 - - 6,300 CenturyTel, Inc. 205,506 - - 205,506
24,500 - - 24,500 ChevronTexaco Corp. 2,116,555 - - 2,116,555
- 1,800 600 2,400 Chubb Corp. (The) - 122,580 40,860 163,440
1,900 - - 1,900 CIGNA Corp. 109,250 - - 109,250
106,400 7,900 7,805 122,105 Cisco Systems, Inc. (b) 2,584,456 191,891 189,583 2,965,930
64,300 7,200 5,270 76,770 Citigroup, Inc. 3,121,122 349,488 255,806 3,726,416
3,900 - - 3,900 Citrix Systems, Inc. (b) 82,719 - - 82,719
12,400 - - 12,400 Claire's Stores, Inc. 233,616 - - 233,616
- - 1,944 1,944 Clear Channel Communications, Inc. - - 91,037 91,037
9,300 - - 9,300 Clorox Co. (The) 451,608 - - 451,608
- - 500 500 Colgate-Palmolive Co. - - 25,025 25,025
- 9,215 2,471 11,686 Comcast Corp. Class A (b) - 288,245 81,222 369,467
2,700 - - 2,700 Computer Sciences Corp. (b) 119,421 - - 119,421
14,800 - - 14,800 ConAgra Foods, Inc. 390,572 - - 390,572
6,000 - - 6,000 Conexant Systems, Inc. (b) 29,820 - - 29,820
5,000 2,520 - 7,520 ConocoPhillips 327,850 165,236 - 493,086
- 1,500 - 1,500 Constellation Energy Group, Inc. - 58,740 - 58,740
1
Phoenix-Oakhurst Growth and Income Series/Phoenix-Alliance/Bernstein Growth +
Value Series/Phoenix MFS Investors Trust Series
Pro Forma Combined Schedule of Investments
December 31, 2003 (Unaudited) (Continued)
Shares or Par Value Value
========== ========== ========= ========== ============================================ ========= ========== ========= ==========
Phoenix- Phoenix- Phoenix- Phoenix-
Oakhurst Alliance/ Phoenix- Oakhurst Alliance/ Phoenix-
Growth Bernstein MFS Growth Bernstein MFS
and Growth Investors Pro Forma and Growth Investors Pro Forma
Income + Value Trust Combined Income + Value Trust Combined
Series Series Series Portfolios Description Series Series Series Portfolios
========== ========== ========= ========== ============================================ ========= ========== ========= ==========
- 1,100 - 1,100 Cooper Industries Ltd. Class A - 63,723 - 63,723
2,900 - - 2,900 Corn Products International, Inc. 99,905 - - 99,905
- 2,600 - 2,600 CSX Corp. - 93,444 - 93,444
- - 1,125 1,125 CVS Corp. - - 40,635 40,635
- - 200 200 Danaher Corp. - - 18,350 18,350
5,200 - - 5,200 Deere & Co. 338,260 - - 338,260
31,000 8,400 500 39,900 Dell, Inc. (b) 1,052,760 285,264 16,980 1,355,004
- - 981 981 Dominion Resources, Inc. - - 62,617 62,617
3,100 - 1,040 4,140 Dow Chemical Co. (The) 128,867 - 43,233 172,100
- 1,300 - 1,300 Du Pont (E.I.) de Nemours & Co. - 59,657 - 59,657
27,200 - - 27,200 Eastman Kodak Co. 698,224 - - 698,224
5,700 400 325 6,425 Eaton Corp. 615,486 43,192 35,094 693,772
- 2,200 - 2,200 eBay, Inc. (b) - 142,098 - 142,098
- - 620 620 EchoStar Communications Corp. Class A (b) - - 21,080 21,080
- 3,100 - 3,100 Electronic Arts, Inc. (b) - 148,118 - 148,118
29,200 - - 29,200 EMC Corp. (b) 377,264 - - 377,264
- - 580 580 Emerson Electric Co. - - 37,555 37,555
3,000 - - 3,000 Endo Pharmaceuticals Holdings, Inc. (b) 57,780 - - 57,780
8,200 1,400 200 9,800 Entergy Corp. 468,466 79,982 11,426 559,874
17,000 - 990 17,990 Exelon Corp. 1,128,120 - 65,697 1,193,817
19,400 - - 19,400 ExpressJet Holdings, Inc. (b) 291,000 - - 291,000
91,000 - 4,960 95,960 Exxon Mobil Corp. 3,731,000 - 203,360 3,934,360
3,100 3,500 2,125 8,725 Fannie Mae 232,686 262,710 159,502 654,898
14,100 700 - 14,800 Federated Department Stores, Inc. 664,533 32,991 - 697,524
- - 750 750 FedEx Corp. - - 50,625 50,625
5,400 - - 5,400 First Data Corp. 221,886 - - 221,886
- - 540 540 FirstEnergy Corp. - - 19,008 19,008
23,200 1,300 - 24,500 FleetBoston Financial Corp. 1,012,680 56,745 - 1,069,425
4,000 - - 4,000 Flowers Foods, Inc. 103,200 - - 103,200
37,900 - - 37,900 Ford Motor Co. 606,400 - - 606,400
8,300 - - 8,300 Fortune Brands, Inc. 593,367 - - 593,367
4,100 - - 4,100 Fox Entertainment Group, Inc. Class A (b) 119,515 - - 119,515
2,800 - - 2,800 Freddie Mac 163,296 - - 163,296
5,400 - - 5,400 Fresh Del Monte Produce, Inc. 128,682 - - 128,682
- - 355 355 Gannett Co., Inc. - - 31,652 31,652
29,500 - - 29,500 Gap, Inc. (The) 684,695 - - 684,695
- 8,850 7,005 15,855 General Electric Co. - 274,173 217,015 491,188
2,700 - - 2,700 General Motors Corp. 144,180 - - 144,180
- - 700 700 Genzyme Corp. (b) - - 34,538 34,538
- - 600 600 Gilead Sciences, Inc. (b) - - 34,884 34,884
36,100 - - 36,100 Gillette Co. (The) 1,325,953 - - 1,325,953
24,100 - - 24,100 GlobespanVirata, Inc. (b) 141,708 - - 141,708
- 1,000 410 1,410 Golden West Financial Corp. - 103,190 42,308 145,498
1,400 1,800 278 3,478 Goldman Sachs Group, Inc. (The) 138,222 177,714 27,447 343,383
- - 600 600 Grainger (W.W.), Inc. - - 28,434 28,434
20,400 - - 20,400 Great Plains Energy, Inc. 649,128 - - 649,128
5,000 - - 5,000 GTECH Holdings Corp. 247,450 - - 247,450
7,400 - 1,360 8,760 Guidant Corp. 445,480 - 81,872 527,352
- - 1,810 1,810 Halliburton Co. - - 47,060 47,060
- - 300 300 Harley-Davidson, Inc. - - 14,259 14,259
1,800 - - 1,800 Harris Corp. 68,310 - - 68,310
- - 450 450 Hartford Financial Services Group, Inc. (The) - - 26,564 26,564
6,100 - - 6,100 Hasbro, Inc. 129,808 - - 129,808
- - 300 300 HCA, Inc. - - 12,888 12,888
53,700 8,800 3,114 65,614 Hewlett-Packard Co. 1,233,489 202,136 71,529 1,507,154
12,500 - - 12,500 Hibernia Corp. Class A 293,875 - - 293,875
19,600 - 2,675 22,275 Home Depot, Inc. (The) 695,604 - 94,936 790,540
6,700 - - 6,700 HON Industries, Inc. 290,244 - - 290,244
2,600 - - 2,600 Hubbell, Inc. Class B 114,660 - - 114,660
1,000 - 328 1,328 Illinois Tool Works, Inc. 83,910 - 27,522 111,432
2,500 - - 2,500 IMS Health, Inc. 62,150 - - 62,150
17,500 - - 17,500 Ingersoll-Rand Co. Class A 1,187,900 - - 1,187,900
105,700 7,000 3,190 115,890 Intel Corp. 3,403,540 225,400 102,718 3,731,658
- - 320 320 InterActiveCorp (b) - - 10,858 10,858
19,400 - 1,730 21,130 International Business Machines Corp. 1,797,992 - 160,336 1,958,328
1,500 - - 1,500 Intuit, Inc. (b) 79,365 - - 79,365
900 - - 900 Invitrogen Corp. (b) 63,000 - - 63,000
7,300 - - 7,300 iStar Financial, Inc. 283,970 - - 283,970
57,900 - - 57,900 J.P. Morgan Chase & Co. 2,126,667 - - 2,126,667
30,100 800 3,510 34,410 Johnson & Johnson 1,554,966 41,328 181,327 1,777,621
25,200 - - 25,200 Kellogg Co. 959,616 - - 959,616
- - 647 647 Kimberly-Clark Corp. - - 38,231 38,231
- 1,000 890 1,890 Kohl's Corp. (b) - 44,940 39,997 84,937
- 2,500 - 2,500 Kroger Co. (The) (b) - 46,275 - 46,275
4,800 - - 4,800 Lear Corp. 294,384 - - 294,384
2
Phoenix-Oakhurst Growth and Income Series/Phoenix-Alliance/Bernstein Growth +
Value Series/Phoenix MFS Investors Trust Series
Pro Forma Combined Schedule of Investments
December 31, 2003 (Unaudited) (Continued)
Shares or Par Value Value
========== ========== ========= ========== ============================================ ========= ========== ========= ==========
Phoenix- Phoenix- Phoenix- Phoenix-
Oakhurst Alliance/ Phoenix- Oakhurst Alliance/ Phoenix-
Growth Bernstein MFS Growth Bernstein MFS
and Growth Investors Pro Forma and Growth Investors Pro Forma
Income + Value Trust Combined Income + Value Trust Combined
Series Series Series Portfolios Description Series Series Series Portfolios
========== ========== ========= ========== ============================================ ========= ========== ========= ==========
6,300 1,000 370 7,670 Lehman Brothers Holdings, Inc. 486,486 77,220 28,571 592,277
4,300 - - 4,300 Lennox International, Inc. 71,810 - - 71,810
2,400 - - 2,400 Lexmark International, Inc. (b) 188,736 - - 188,736
11,700 - - 11,700 Lincoln National Corp. 472,329 - - 472,329
7,500 - - 7,500 Linear Technology Corp. 315,525 - - 315,525
9,800 - - 9,800 Liz Claiborne, Inc. 347,508 - - 347,508
14,100 - 930 15,030 Lockheed Martin Corp. 724,740 - 47,802 772,542
- 2,700 - 2,700 Lowe's Cos., Inc. - 149,553 - 149,553
10,800 - - 10,800 LSI Logic Corp. (b) 95,796 - - 95,796
2,700 - - 2,700 Lubrizol Corp. (The) 87,804 - - 87,804
- - 545 545 Marsh & McLennan Cos., Inc. - - 26,100 26,100
20,800 - - 20,800 Mattel, Inc. 400,816 - - 400,816
- 1,900 - 1,900 Maxim Integrated Products, Inc. - 94,620 - 94,620
24,500 - 1,375 25,875 May Department Stores Co. (The) 712,215 - 39,971 752,186
38,000 9,350 1,040 48,390 MBNA Corp. 944,300 232,348 25,844 1,202,492
25,500 - 1,045 26,545 McDonald's Corp. 633,165 - 25,947 659,112
6,100 - - 6,100 McGraw-Hill Cos., Inc. (The) 426,512 - - 426,512
12,800 - - 12,800 McKesson Corp. 411,648 - - 411,648
- 2,500 - 2,500 MeadWestvaco Corp. - 74,375 - 74,375
- 3,100 - 3,100 Medtronic, Inc. - 150,691 - 150,691
- - 770 770 Mellon Financial Corp. - - 24,725 24,725
27,500 - - 27,500 Merck & Co., Inc. 1,270,500 - - 1,270,500
21,800 700 1,929 24,429 Merrill Lynch & Co., Inc. 1,278,570 41,055 113,136 1,432,761
34,600 3,500 845 38,945 MetLife, Inc. 1,164,982 117,845 28,451 1,311,278
133,800 10,400 10,295 154,495 Microsoft Corp. 3,684,852 286,416 283,524 4,254,792
12,500 - - 12,500 Monsanto Co. 359,750 - - 359,750
19,900 800 - 20,700 Morgan Stanley 1,151,613 46,296 - 1,197,909
27,600 - - 27,600 Motorola, Inc. 388,332 - - 388,332
20,000 - - 20,000 Mylan Laboratories, Inc. 505,200 - - 505,200
- 3,400 - 3,400 National City Corp. - 115,396 - 115,396
- - 1,940 1,940 New York Times Co. (The) Class A - - 92,712 92,712
- - 2,100 2,100 Newell Rubbermaid, Inc. - - 47,817 47,817
2,500 - - 2,500 Newmont Mining Corp. 121,525 - - 121,525
5,700 - - 5,700 Nextel Communications, Inc. Class A (b) 159,942 - - 159,942
30,200 - - 30,200 NiSource, Inc. 662,588 - - 662,588
- - 550 550 Noble Corp. (b) - - 19,679 19,679
9,100 - - 9,100 Nordstrom, Inc. 312,130 - - 312,130
- 4,800 - 4,800 Norfolk Southern Corp. - 113,520 - 113,520
40,500 2,400 - 42,900 Occidental Petroleum Corp. 1,710,720 101,376 - 1,812,096
16,500 - - 16,500 Old Republic International Corp. 418,440 - - 418,440
55,800 - - 55,800 Oracle Corp. (b) 736,560 - - 736,560
2,800 - - 2,800 PACCAR, Inc. 238,336 - - 238,336
7,000 - - 7,000 PanAmSat Corp. (b) 150,920 - - 150,920
8,600 1,300 2,195 12,095 PepsiCo, Inc. 400,932 60,606 102,331 563,869
12,000 - - 12,000 PerkinElmer, Inc. 204,840 - 204,840
64,620 11,040 2,564 78,224 Pfizer, Inc. 2,283,025 390,043 90,586 2,763,654
1,800 - - 1,800 PNC Financial Services Group, Inc. (The) 98,514 - - 98,514
- - 750 750 PPG Industries, Inc. - - 48,015 48,015
200 1,400 400 2,000 PPL Corp. 8,750 61,250 17,500 87,500
- - 1,950 1,950 Praxair, Inc. - - 74,490 74,490
9,000 - 9,000 Principal Financial Group, Inc. 297,630 - - 297,630
10,000 500 1,245 11,745 Procter & Gamble Co. (The) 998,800 49,940 124,351 1,173,091
- 1,200 - 1,200 Progressive Corp. (The) - 100,308 - 100,308
1,800 - - 1,800 Prudential Financial, Inc. 75,186 - - 75,186
11,700 - - 11,700 QUALCOMM, Inc. 630,981 - - 630,981
2,700 - - 2,700 R.J. Reynolds Tobacco Holdings, Inc. 157,005 - - 157,005
11,100 - - 11,100 RadioShack Corp. 340,548 - - 340,548
3,100 - - 3,100 Reebok International Ltd. 121,892 - - 121,892
4,100 - 505 4,605 Rockwell Automation, Inc. 145,960 - 17,978 163,938
- 4,100 700 4,800 Safeway, Inc. (b) - 89,831 15,337 105,168
33,300 - 1,700 35,000 SBC Communications, Inc. 868,131 - 44,319 912,450
- - 3,795 3,795 Schering-Plough Corp. - - 65,995 65,995
- - 928 928 Schlumberger Ltd. - - 50,780 50,780
3,100 - - 3,100 Scientific-Atlanta, Inc. 84,630 - - 84,630
- 1,400 - 1,400 Sears, Roebuck and Co. - 63,686 - 63,686
- 2,100 - 2,100 Sempra Energy - 63,126 - 63,126
14,500 - - 14,500 Sherwin-Williams Co. (The) 503,730 - - 503,730
3,600 - - 3,600 Smucker (J.M.) Co. (The) 163,044 - - 163,044
- 2,000 - 2,000 Smurfit-Stone Container Corp. (b) - 37,140 - 37,140
- 15,400 - 15,400 Solectron Corp. (b) - 91,014 - 91,014
- - 900 900 Southwest Airlines Co. - - 14,526 14,526
52,600 3,400 - 56,000 Sprint Corp. (FON Group) 863,692 55,828 - 919,520
- 5,900 1,840 7,740 Sprint Corp. (PCS Group) (b) - 33,158 10,341 43,499
- - 380 380 Starwood Hotels & Resorts Worldwide, Inc. - - 13,669 13,669
- - 500 500 State Street Corp. - - 26,040 26,040
3
Phoenix-Oakhurst Growth and Income Series/Phoenix-Alliance/Bernstein Growth +
Value Series/Phoenix MFS Investors Trust Series
Pro Forma Combined Schedule of Investments
December 31, 2003 (Unaudited) (Continued)
Shares or Par Value Value
========== ========== ========= ========== ============================================ ========= ========== ========= ==========
Phoenix- Phoenix- Phoenix- Phoenix-
Oakhurst Alliance/ Phoenix- Oakhurst Alliance/ Phoenix-
Growth Bernstein MFS Growth Bernstein MFS
and Growth Investors Pro Forma and Growth Investors Pro Forma
Income + Value Trust Combined Income + Value Trust Combined
Series Series Series Portfolios Description Series Series Series Portfolios
========== ========== ========= ========== ============================================ ========= ========== ========= ==========
6,500 - - 6,500 Storage Technology Corp. (b) 167,375 - - 167,375
- - 510 510 SunTrust Banks, Inc. - - 36,465 36,465
- - 2,042 2,042 Target Corp. - - 78,413 78,413
- 300 - 300 Tech Data Corp. (b) - 11,907 - 11,907
4,600 - - 4,600 Tekelec (b) 71,530 - - 71,530
- 4,800 - 4,800 Tellabs, Inc. (b) - 40,464 - 40,464
- - 4,150 4,150 Tenet Healthcare Corp. (b) - - 66,607 66,607
26,800 - 709 27,509 Texas Instruments, Inc. 787,384 - 20,830 808,214
3,300 2,300 - 5,600 Textron, Inc. 188,298 131,238 - 319,536
12,300 - - 12,300 Thermo Electron Corp. (b) 309,960 - - 309,960
64,000 - 5,130 69,130 Time Warner, Inc. (b) 1,151,360 - 92,289 1,243,649
- - 2,570 2,570 TJX Cos., Inc. (The) - - 56,668 56,668
- - 960 960 Transocean, Inc. (b) - - 23,050 23,050
- 5,200 - 5,200 Travelers Property Casualty Corp. Class A (b) - 87,256 - 87,256
11,500 - 3,215 14,715 Tyco International Ltd. 304,750 - 85,197 389,947
70,700 - 2,020 72,720 U.S. Bancorp 2,105,446 - 60,156 2,165,602
- - 942 942 Union Pacific Corp. - - 65,450 65,450
9,900 - - 9,900 UnionBanCal Corp. 569,646 - - 569,646
6,150 - - 6,150 United Online, Inc. (b) 103,258 - - 103,258
- 557 557 United Parcel Service, Inc. Class B - - 41,524 41,524
11,200 - 100 11,300 United Technologies Corp. 1,061,424 - 9,477 1,070,901
21,400 3,000 - 24,400 UnitedHealth Group, Inc. 1,245,052 174,540 1,419,592
- - 1,680 1,680 Unocal Corp. - - 61,874 61,874
9,300 - - 9,300 V. F. Corp. 402,132 - - 402,132
- 1,000 - 1,000 Valero Energy Corp. - 46,340 - 46,340
500 - - 500 Varian Medical Systems, Inc. 34,550 - - 34,550
17,900 - - 17,900 VeriSign, Inc. (b) 291,770 - - 291,770
12,100 2,500 522 15,122 VERITAS Software Corp. (b) 449,636 92,900 19,398 561,934
44,400 - 2,140 46,540 Verizon Communications, Inc. 1,557,552 - 75,071 1,632,623
- 4,100 3,105 7,205 Viacom, Inc. Class B - 181,958 137,800 319,758
9,300 - - 9,300 Viad Corp. 232,500 - - 232,500
38,700 1,900 - 40,600 Wachovia Corp. 1,803,033 88,521 - 1,891,554
- 2,400 - 2,400 Walgreen Co. - 87,312 - 87,312
8,200 4,300 1,820 14,320 Wal-Mart Stores, Inc. 435,010 228,115 96,551 759,676
21,300 - 900 22,200 Walt Disney Co. (The) 496,929 - 20,997 517,926
- 1,400 - 1,400 Washington Mutual, Inc. - 56,168 - 56,168
3,200 - - 3,200 Waters Corp. 106,112 - - 106,112
7,200 - - 7,200 WellPoint Health Networks, Inc. 698,328 - - 698,328
- - 3,095 3,095 Wells Fargo & Co. - - 182,264 182,264
4,500 - 4,500 Weyerhaeuser Co. 288,000 - - 288,000
- 1,500 - 1,500 Whirlpool Corp. 108,975 - 108,975
8,100 - - 8,100 Wolverine World Wide, Inc. 165,078 - - 165,078
26,000 1,700 2,565 30,265 Wyeth 1,103,700 72,165 108,884 1,284,749
- - 2,200 2,200 Xerox Corp. (b) - - 30,360 30,360
- 900 - 900 Yahoo!, Inc. (b) - 40,653 - 40,653
----------- --------- --------- -----------
TOTAL COMMON STOCKS 104,472,619 8,645,274 6,642,107 119,760,000
FOREIGN COMMON STOCKS--2.3%
15,300 - 1,290 16,590 Accenture Ltd. Class A (b) 402,696 - 33,953 436,649
- - 985 985 AstraZeneca plc - - 47,256 47,256
6,500 - - 6,500 Autoliv, Inc. 244,725 - - 244,725
- - 1,075 1,075 Bayerische Motoren Werke AG - - 50,102 50,102
- - 2,200 2,200 BHP Billiton plc - - 19,219 19,219
- - 296 296 BP plc ADR - - 14,607 14,607
- - 779 779 Canadian National Railway Co. - - 49,295 49,295
- - 325 325 EnCana Corp. - - 12,818 12,818
- - 760 760 EnCana Corp. (c ) - - 29,994 29,994
- 5,400 - 5,400 Flextronics International Ltd. (b) - 80,136 - 80,136
- 2,800 - 2,800 GlaxoSmithKline plc ADR - 130,536 - 130,536
- - 1,800 1,800 Koninklijke (Royal) KPN NV (b) - - 13,895 13,895
- 1,400 250 1,650 Magna International, Inc. Class A - 112,070 20,013 132,083
- - 840 840 Nokia Oyj ADR - - 14,280 14,280
- 13,600 - 13,600 Nortel Networks Corp. (b) - 57,528 - 57,528
- - 2,130 2,130 Novartis AG Registered Shares - - 96,705 96,705
- - 2,330 2,330 Reckitt Benckiser plc - - 52,722 52,722
3,500 - - 3,500 RenaissanceRe Holdings Ltd. 171,675 - - 171,675
- - 560 560 Roche Holding AG - - 56,487 56,487
14,600 - - 14,600 Royal Dutch Petroleum Co. NY Registered Shares 764,894 - - 764,894
- - 691 691 STMicroelectronics NV - - 18,664 18,664
- - 380 380 Total SA ADR - - 35,154 35,154
4,500 - - 4,500 Unilever NV NY Registered Shares 292,050 - - 292,050
- - 445 445 XL Capital Ltd. Class A - - 34,510 34,510
--------- ---------- --------- ----------
TOTAL FOREIGN COMMON STOCKS 1,876,040 380,270 599,674 2,855,984
4
Phoenix-Oakhurst Growth and Income Series/Phoenix-Alliance/Bernstein Growth +
Value Series/Phoenix MFS Investors Trust Series
Pro Forma Combined Schedule of Investments
December 31, 2003 (Unaudited) (Continued)
Shares or Par Value Value
========== ========== ========= ========== ====================================== =========== ========== ========= ===========
Phoenix- Phoenix- Phoenix- Phoenix-
Oakhurst Alliance/ Phoenix- Oakhurst Alliance/ Phoenix-
Growth Bernstein MFS Growth Bernstein MFS
and Growth Investors Pro Forma and Growth Investors Pro Forma
Income + Value Trust Combined Income + Value Trust Combined
Series Series Series Portfolios Description Series Series Series Portfolios
========== ========== ========= ========== ====================================== =========== ========== ========= ===========
FOREIGN PREFERRED STOCKS--0.0%
- - 47 47 Porsche AG Pfd. - - 27,894 27,894
----------- --------- --------- -----------
TOTAL FOREIGN PREFERRED STOCKS - - 27,894 27,894
SHORT-TERM OBLIGATIONS--1.8%
1,550,000 - - 1,550,000 Emerson Electric Co. 0.95%, 1/2/04 1,549,959 - - 1,549,959
- - 350,000 350,000 FHLB Discount Note 0.75%, 1/2/04 - - 349,993 349,993
SSgA Money Market Fund (0.72%
- 291,860 - 291,860 seven day effective yield) - 291,860 - 291,860
----------- --------- --------- -----------
TOTAL SHORT-TERM OBLIGATIONS 1,549,959 291,860 349,993 2,191,812
TOTAL INVESTMENTS--100.2% 107,898,618 9,317,404 7,619,668 124,835,690(a)
(Identified cost $97,146,278,
$8,137,782, $6,663,857 and
$111,947,917)
Other assets and liabilities,
net---(0.2)% (180,807) 28,498 (121,149) (273,458)
----------- --------- --------- -----------
NET ASSETS--100.0% $107,717,811 $9,345,902 $7,498,519 $124,562,232
=========== ========= ========= ===========
(a) Federal Income Tax Information: Net unrealized
appreciation of investment securities is comprised of
gross appreciation of $19,802,355 and gross
depreciation of $7,570,769 for federal income tax
purposes. At December 31, 2003, the aggregate cost
of securities for federal income tax purposes was
$112,604,104.
(b) Non-income producing.
(c) Shares Traded on Toronto Exchange
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
5
Phoenix-Oakhurst Growth and Income Series/Phoenix-Alliance/Bernstein Growth +
Value Series/Phoenix-MFS Investors Trust Series
Pro Forma Combined Statement of Assets and Liabilities
December 31, 2003 (Unaudited)
=============== =============== ============= ============= ==============
Phoenix- Phoenix-
Oakhurst Alliance/ Phoenix-MFS Pro Forma
Growth Bernstein Investors Adjustments Combined
and Income Growth + Trust Portfolios
Series Value Series Series
=============== =============== ============= ============= ==============
ASSETS
Investment securities at value
(Identified cost $97,146,278, $8,137,782,
$6,663,857 and $111,947,917) $ 107,898,618 $ 9,317,404 $ 7,619,668 $ - $ 124,835,690
Cash 2,791 - 461 - 3,252
Foreign currency at value (Identified
cost $3,604) - - 3,628 - 3,628
Receivables
Investment securities sold - - 12,711 - 12,711
Fund shares sold 80,547 63,059 4,193 - 147,799
Dividends and Interest 131,137 12,009 10,047 - 153,193
Tax reclaims - - 461 - 461
Receivable from adviser - 6,373 11,434 - 17,807
Prepaid expenses 1,348 98 86 - 1,532
-------------- -------------- ------------ ------------ -------------
Total assets 108,114,441 9,398,943 7,662,689 - 125,176,073
-------------- -------------- ------------ ------------ -------------
LIABILITIES
Payables
Investment securities purchased - - 85,354 - 85,354
Fund shares repurchased 257,729 1,172 17,291 - 276,192
Investment advisory fee 61,076 - - - 61,076
Administration fee 6,804 583 475 - 7,862
Financial agent fee 8,370 3,639 3,560 - 15,569
Printing fee 24,719 11,819 11,606 - 48,144
Professional fee 28,133 29,787 30,037 - 87,957
Custodian fee 4,472 485 10,291 - 15,248
Trustees' fee 2,360 2,360 2,360 - 7,080
Accrued expenses 2,967 3,196 3,196 - 9,359
-------------- -------------- ------------ ------------ -------------
Total liabilities 396,630 53,041 164,170 - 613,841
-------------- -------------- ------------ ------------ -------------
NET ASSETS $ 107,717,811 $ 9,345,902 $ 7,498,519 $ - $ 124,562,232
============== ============== ============ ============ =============
Net Assets Consist of:
Capital paid in on shares of beneficial
interest $ 117,781,311 $ 8,943,353 $ 7,028,797 $ (1,263,212) $ 132,490,249
Undistributed net investment income 199,110 - 4,428 (4,428)(b) 199,110
Accumulated net realized gain (loss) (21,014,950) (777,073) (490,567) 1,267,640 (b) (21,014,950)
Net unrealized appreciation 10,752,340 1,179,622 955,861 - $ 12,887,823
-------------- -------------- ------------ ------------ -------------
Net Assets $ 107,717,811 $ 9,345,902 $ 7,498,519 $ - $ 124,562,232
============== ============== ============ ============ =============
Shares of beneficial interest outstanding,
$1 par value, unlimited authorization 9,742,784 933,312 749,672 (159,980)(a) 11,265,788
Net assets $ 107,717,811 $ 9,345,902 $ 7,498,519 - $ 124,562,232
Net asset value per share $ 11.06 $ 10.01 $ 10.00 - $ 11.06
(a) Adjustment reflects additional shares issued in conversion.
(b) Adjustment reflects closing entry of capital accounts for target fund.
See Notes to Pro Forma Financial Statements.
6
Phoenix-Oakhurst Growth and Income Series/Phoenix-Alliance/Bernstein Growth +
Value Series/Phoenix-MFS Investors Trust Series
Pro Forma Combined Statement of Operations
January 1, 2003 through December 31, 2003 (Unaudited)
=============== =============== ============= ============= ==============
Phoenix- Phoenix-
Oakhurst Alliance/ Phoenix-MFS Pro Forma
Growth Bernstein Investors Adjustments Combined
and Income Growth + Trust Portfolios
Series Value Series Series
=============== =============== ============= ============= ==============
INVESTMENT INCOME
Dividends $ 1,876,377 $ 106,804 $ 92,010 $ - $ 2,075,191
Interest 14,351 2,034 2,692 - 19,077
Foreign taxes withheld (5,166) (462) (790) - (6,418)
-------------- -------------- ------------ ------------ -------------
Total investment income 1,885,562 108,376 93,912 - 2,087,850
-------------- -------------- ------------ ------------ -------------
EXPENSES
Investment advisory fee 619,735 57,247 42,356 (12,927) 706,411
Financial agent fee 92,167 40,835 40,158 (44,940) 128,220
Administration fee 68,171 (a) 5,186 (a) 4,349 (a) 3,027 (a) 80,733
Printing 37,889 19,769 11,769 (25,583) 43,844
Professional 17,769 27,189 27,489 (40,947) 31,500
Custodian 37,501 13,139 79,788 (98,934) 31,494
Trustees 5,931 5,931 6,394 (11,589) 6,667
Miscellaneous 11,982 9,214 9,133 (9,498) 20,831
-------------- -------------- ------------ ------------ -------------
Total expenses 891,145 178,510 221,436 (241,391) 1,049,700
Less expenses borne by investment advisor (50,061) (104,425) (164,959) 228,463 (90,982)
Custodian fees paid indirectly (15) - (2) - (17)
-------------- -------------- ------------ ------------ -------------
Net expenses 841,069 74,085 56,475 (12,928) 958,701
-------------- -------------- ------------ ------------ -------------
NET INVESTMENT INCOME (LOSS) 1,044,493 34,291 37,437 12,928 1,129,149
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on securities (1,127,003) (232,521) 12,970 - (1,346,554)
Net realized gain (loss) on foreign
currency transactions - - (203) - (203)
Net change in unrealized appreciation
(depreciation) on investments 22,233,757 1,794,570 1,169,474 - 25,197,801
Net change in unrealized appreciation
(depreciation) on foreign currency and foreign
currency transactions - - 21 - 21
-------------- -------------- ------------ ------------ -------------
Net gain (loss) on investments 21,106,754 1,562,049 1,182,262 - 23,851,065
-------------- -------------- ------------ ------------ -------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 22,151,247 $ 1,596,340 $ 1,219,699 $ 12,928 $ 24,980,214
============== ============== ============ ============ =============
Adjustments:
(a) Reflects administration fees of 0.077% for a twelve month period, 1/1/03 -
12/31/03. Effective 1/1/04, the fee is 0.08%. The adjustment column reflects
what the annual fee would be based on combined assets at the new rate of 0.08%.
Note: The expenses for Phoenix-Oakhurst Growth and Income Series are based on
the expense schedule which became effective 2/29/04.
See Notes to Pro Forma Financial Statements.
7
PHOENIX-OAKHURST GROWTH AND INCOME SERIES/PHOENIX-ALLIANCE/BERNSTEIN GROWTH +
VALUE SERIES/PHOENIX-MFS INVESTORS TRUST SERIES
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 2003 (UNAUDITED)
1. BASIS OF COMBINATION
The unaudited Pro Forma Combined Portfolio of Investments, Pro Forma Combined
Statement of Assets and Liabilities and Pro Forma Combined Statement of
Operations give effect to the proposed merger of the Phoenix-Alliance/Bernstein
Growth + Value Series ("Growth + Value") and Phoenix-MFS Investors Trust Series
("MFS Investors Trust") into the Phoenix-Oakhurst Growth and Income Series
("Growth and Income"). The proposed merger will be accounted for by the method
of accounting for tax-free mergers of investment companies. The merger provides
for the transfer of all of the assets of Growth + Value and MFS Investors Trust
to Growth and Income and the subsequent liquidation of Growth + Value and MFS
Investors Trust. The accounting survivor in the proposed merger will be Growth
and Income. This is because the Surviving Series will invest in a style that is
similar to the way in which Growth and Income is currently operated (including
hedging and investment in debt securities). Additionally, Growth and Income has
a significantly larger asset base than Growth + Value and MFS Investors Trust.
The pro forma combined statements should be read in conjunction with the
historical financial statements of the constituent fund and the notes thereto
incorporated by reference in the Registration Statement filed on Form N-14. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses. Actual results could differ from those
estimates.
Growth + Value, MFS Investors Trust and Growth and Income are all, open-end,
management investment companies registered under the Investment Company Act of
1940, as amended.
2. SHARES OF BENEFICIAL INTEREST
The Pro Forma net asset value per share assumes the issuance of additional
shares of Growth and Income which would have been issued at December 31, 2003 in
connection with the proposed reorganization. The amount of additional shares
assumed to be issued was calculated based on the net assets, as of December 31,
2003, of Growth + Value of $9,345,902 and MFS Investors Trust of $7,498,519 and
the net asset value of Growth and Income of $11.06. The Pro Forma Statement of
Assets & Liabilities reflects the combined Pro Forma shares outstanding as
calculated above.
3. PRO FORMA OPERATIONS
Pro Forma operating expenses are based on the expense schedule of Growth and
Income which became effective February 29, 2004, the actual expenses of Growth +
Value and MFS Investors Trust and the combined Series, with certain expenses
adjusted to reflect the expected expenses of the combined entity. The investment
advisory and financial agent fees have been calculated for the combined Series
based on the fee schedule in effect for Growth and Income at the combined level
of average net assets for the period ended December 31, 2003.
4. PORTFOLIO VALUATION
Equity securities are valued at the last sale price, or if there had been no
sale that day, at the last bid price. Debt securities are valued on the basis of
broker quotations or valuations provided by a pricing service which utilizes
information with respect to recent sales, market transactions in comparable
securities, quotations from dealers, and various relationships between
securities in determining value. Short-term investments having a remaining
maturity of 60 days or less are valued at amortized cost which approximates
market. All other securities and assets are valued at fair value as determined
in good faith by or under the direction of the Trustees. Certain foreign common
stocks may be fair valued in cases where closing prices are not readily
available or are deemed not reflective of readily available market prices. For
example, significant events (such as movement in the U.S. securities market, or
other regional and local developments) may occur between the time that foreign
markets
close (where the security is principally traded) and the time that the Fund
calculates its net asset value (generally, the close of the NYSE) that may
impact the value of securities traded in these foreign markets. In these cases,
information from an external vendor may be utilized to adjust closing market
prices of certain foreign common stocks to reflect their fair value. Because the
frequency of significant events is not predictable, fair valuation of certain
foreign common stocks may occur on a frequent basis.
5. COMPLIANCE
As of September 14, 2004, all the securities held by the Merging Series would
comply with the compliance guidelines, investment restrictions and
diversification requirements under the Investment Company Act of 1940, as
amended. The Surviving Series has elected to be taxed as a "regulated investment
company" under the requirements of Subchapter M of the Internal Revenue Code
("IRC"). After the acquisition, the Surviving Series intends to continue to
qualify as a regulated investment company by complying with the provisions
available to certain investment companies, as defined in applicable sections of
the IRC, and to make distributions of taxable income sufficient to relieve it
from all, or substantially all, Federal income taxes.
6. FEDERAL INCOME TAX INFORMATION
The Series have capital loss carryovers which may be used to offset future
capital gains, as follows:
Expiration Date Surviving Series Merging Series Merging Series
Phoenix-Oakhurst Phoenix-MFS Phoenix-Alliance/Bernstein
Growth and Income Series Investors Trust Series Growth + Value Series
2009 $3,195,522 -- --
2010 $11,717,280 $326,812 $462,448
2011 $5,419,237 $6,486 $303,453
Total $20,332,039 $333,298 $765,901
In addition, the Series have deferred post-October losses as follows:
Surviving Series Phoenix-Oakhurst Growth and Income Series $178,131
Merging Series Phoenix-MFS Investors Trust Series $12,736
Merging Series Phoenix-Alliance/Bernstein Growth + Value Series $6,532
The Series may not realize the benefit of these losses to the extent each Series
does not realize gains on investments prior to the expiration of the capital
loss carryover.
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
The Amended Declaration of Trust provides that the Trust shall
indemnify each of its Trustees and officers (hereinafter referred to as a
"Covered Person") against all liabilities, including but not limited to amounts
paid in satisfaction of judgements, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which Covered Person may be or may have
been involved as a party or otherwise or with which such person may be or may
have been threatened, while in office or thereafter, by reason of being or
having been such a Trustee or officer, except with respect to any matter as to
which such Covered Person shall have been finally adjudicated in any such
action, suit or other proceeding not to have acted in good faith in the
reasonable belief that such Covered Person's action was in or not opposed to the
best interests of the Trust and except that no Covered Person shall be
indemnified against any liability to the Trust or its Shareholders to which such
Covered Person would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office. Expenses, including accountants' and
counsel fees so incurred by any such Covered Person (but excluding amounts paid
in satisfaction of judgements, in compromise or as fines or penalties), may be
paid from time to time by the Trust in advance of the final disposition of any
such action, suit of proceeding upon receipt of an undertaking by or on behalf
of such Covered Person to repay amounts so paid to the Trust if it is ultimately
determined that indemnification of such expenses is not authorized under said
article of the Declaration of Trust.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
ITEM 16. EXHIBITS
(1) Amended Declaration of Trust.
1. Declaration of Trust of the Registrant establishing the Big
Edge Series Fund dated February 18, 1986, filed with the
Registration Statement on Form N-1A on April 18, 1986 and
filed via Edgar with Post-Effective Amendment No. 18 (File No.
033-05033) on June 20, 1996.
2. Amendment to Declaration of Trust effective February 28, 1990,
establishing the International Series, filed with
Post-Effective Amendment No. 7 on March 2, 1992 and filed via
Edgar with Post-Effective Amendment No. 20 (File No.
033-05033) on April 29, 1997.
3. Amendment to Declaration of Trust effective November 14, 1991,
conforming the Fund's borrowing restrictions to California
Department's Borrowing Guidelines, filed with Post-Effective
Amendment No. 7 on March 2, 1992 and filed via Edgar with
Post-Effective Amendment No. 20 (File No. 033-05033) on April
29, 1997.
4. Amendment to Declaration of Trust effective May 1, 1992,
changing the name of the Trust to The Phoenix Edge Series
Fund, establishing the Balanced Series, and changing the names
of Stock Series to Growth Series and Total-Vest Series to
Total Return Series filed with Post-Effective Amendment No. 8
on April 28, 1992 and filed via Edgar with Post-Effective
Amendment No. 20 (File No. 033-05033) on April 29, 1997.
C-1
5. Amendment to Declaration of Trust effective January 1, 1995,
establishing the Real Estate Securities Series, filed with
Post-Effective Amendment No. 12 on February 16, 1995 and filed
via Edgar with Post-Effective Amendment No. 20 (File No.
033-05033) on April 29, 1997.
6. Amendment to Declaration of Trust effective November 15, 1995,
establishing the Strategic Theme Series, filed via Edgar with
Post-Effective Amendment No. 16 (File No. 033-05033) on
January 29, 1996.
7. Amendment to Declaration of Trust effective February 21, 1996,
changing the name of the Series currently designated "Bond
Series" to the "Multi-Sector Fixed Income Series," filed via
Edgar with Post-Effective Amendment No. 17 (File No.
033-05033) on April 17, 1996.
8. Amendment to Declaration of Trust effective August 21, 1996,
establishing the Aberdeen New Asia Series and changing the
name of the Total Return Series to Strategic Allocation
Series, filed via Edgar with Post-Effective Amendment No. 19
(File No. 033-05033) on September 3, 1996.
9. Amendment to Declaration of Trust effective May 28, 1997,
establishing the Research Enhanced Index Series, filed via
Edgar with Post-Effective Amendment No. 22 (File No.
033-05033) on July 15, 1997.
10. Amendment to Declaration of Trust effective February 27, 1998,
establishing the Engemann Nifty Fifty Series, Seneca Mid-Cap
Series, Phoenix Growth and Income Series, Phoenix Value Equity
Series and Schafer Mid-Cap Value Series, filed via Edgar with
Post-Effective Amendment No. 46 (File No. 033-05033) on April
30, 2003.
11. Amendment to Declaration of Trust dated May 1, 1998 for
Scribner's error in Amendment filed February 27, 1998, filed
via Edgar with Post-Effective Amendment No. 46 (File No.
033-05033) on April 30, 2003.
12. Amendment to Declaration of Trust effective May 1, 1999,
changing the name of the Series currently designated as
Balanced Series, Multi-Sector Fixed Income Series, Money
Market Series, Strategic Allocation Series, Growth Series,
International Series, Real Estate Securities Series, Strategic
Theme Series, Aberdeen New Asia Series, Research Enhanced
Index Series, Engemann Nifty Fifty Series, Schafer Mid-Cap
Value Series, Seneca Mid-Cap Growth Series, Phoenix Value
Equity Series, and Phoenix Growth and Income Series to
Phoenix-Goodwin Balanced Series, Phoenix-Goodwin Multi-Sector
Fixed Income Series, Phoenix-Goodwin Money Market Series,
Phoenix-Goodwin Strategic Allocation Series, Phoenix-Goodwin
Growth Series, Phoenix-Aberdeen International Series,
Phoenix-Duff & Phelps Real Estate Securities Series,
Phoenix-Goodwin Strategic Theme Series, Phoenix-Aberdeen New
Asia Series, Phoenix Research Enhanced Index Series,
Phoenix-Engemann Nifty Fifty Series, Phoenix-Schafer Mid-Cap
Value Series, Phoenix-Seneca Mid-Cap Growth Series,
Phoenix-Hollister Value Equity Series, and Phoenix-Oakhurst
Growth and Income Series, filed via Edgar with Post-Effective
Amendment No. 46 (File No. 033-05033) on April 30, 2003.
13. Amendment to Declaration of Trust effective December 1, 1999,
establishing the Phoenix-Bankers Trust Dow 30 Series,
Phoenix-Federated U.S. Government Bond Series, Phoenix-Janus
Equity Income Series, Phoenix-Janus Flexible Income Series,
Phoenix-Janus Growth Series and Phoenix-Morgan Stanley Focus
Equity Series, filed via Edgar with Post-Effective Amendment
No. 35 (File No. 033-05033) on November 15, 2000.
C-2
14. Amendment to Declaration of Trust effective December 1, 1999,
changing names of Phoenix-Goodwin Growth Series to
Phoenix-Engemann Capital Growth Series, Phoenix-Goodwin
Strategic Theme Series to Phoenix-Seneca Strategic Theme
Series, Phoenix-Goodwin Balanced Series to Phoenix-Oakhurst
Balanced Series, and Phoenix-Goodwin Strategic Allocation
Series to Phoenix-Oakhurst Strategic Allocation Series, filed
via Edgar with Post-Effective Amendment No. 35 (File No.
033-05033) on November 15, 2000.
15. Amendment to Declaration of Trust effective April 21, 2000,
changing name of Phoenix-Research Enhanced Index Series to
Phoenix-J.P. Morgan Research Enhanced Index Series, filed via
Edgar with Post-Effective Amendment No. 46 (File No.
033-05033) on April 30, 2003.
16. Amendment to Declaration of Trust effective July 26, 2000,
establishing the Phoenix-Bankers Trust Nasdaq-100 Index(R)
Series and Phoenix-Engemann Small & Mid-Cap Growth Series,
filed via Edgar with Post-Effective Amendment No. 35 (File No.
033-05033) on November 15, 2000.
17. Amendment to Declaration of Trust effective September 29,
2000, establishing the "Phoenix-Sanford Bernstein Global Value
Series" and "Phoenix-Sanford Bernstein Small-Cap Value Series"
and changing the name of "Phoenix-Schafer Mid-Cap Value
Series" to "Phoenix-Sanford Bernstein Mid-Cap Value Series",
filed via Edgar with Post-Effective Amendment No. 35 (File No.
033-05033) on November 15, 2000.
18. Amendment to Declaration of Trust effective May 1, 2001,
changing the name of "Phoenix-Bankers Trust Dow 30 Series" to
"Phoenix-Deutsche Dow 30 Series", and "Phoenix-Bankers Trust
Nasdaq-100 Index Series" to "Phoenix-Deutsche Nasdaq-100 Index
Series", filed via Edgar with Post-Effective Amendment No. 46
(File No. 033-05033) on April 30, 2003.
19. Amendment to Declaration of Trust effective August 31, 2001
establishing the "Phoenix-AIM Mid-Cap Equity Series",
"Phoenix-Alliance/Bernstein Growth + Value Series",
"Phoenix-MFS Investors Growth Stock Series", "Phoenix-MFS
Investors Trust Series" and "Phoenix-MFS Value Series", and
changing the name of "Phoenix-Janus Equity Income Series" to
"Phoenix-Janus Core Equity Series", filed via Edgar with
Post-Effective Amendment No. 46 (File No. 033-05033) on April
30, 2003.
20. Amendment to Declaration of Trust effective as of October 29,
2001 amending the fundamental investment restrictions of each
Series, filed via Edgar with Post-Effective Amendment No. 41
(File No. 811-04642) on March 1, 2002.
21. Amendment to Declaration of Trust effective as of March 18,
2002, merging of Phoenix-Oakhurst Balanced Series into
Phoenix-Oakhurst Strategic Allocation Series, Phoenix-Engemann
Nifty Fifty Series into Phoenix-Engemann Growth Series, and
Phoenix-Janus Core Equity Series Income Series into
Phoenix-Janus Growth Series, filed via Edgar with
Post-Effective Amendment No. 42 (File No. 033-05033) on April
29, 2002.
22. Amendment to Declaration of Trust effective May 10, 2002,
changing the name of "Phoenix-Morgan Stanley Focus Equity
Series" to "Phoenix-Van Kampen Focus Equity Series", filed via
Edgar with Post-Effective Amendment No. 43 (File No.
033-05033) on May 24, 2002.
23. Amendment to Declaration of Trust effective August 9, 2002,
establishing "Phoenix-Kayne Large-Cap Core Series",
"Phoenix-Kayne Small-Cap Quality Value Series", "Phoenix-Lord
Abbett Large-Cap Value Series", 'Phoenix-Lord Abbett Mid-Cap
Value Series", "Phoenix-Lord Abbett Bond-Debenture Series",
"Phoenix-Lazard International Equity Select Series",
"Phoenix-Lazard Small-Cap Value Series", "Phoenix-Lazard U.S.
Multi-Cap Series" and "Phoenix-State Street Research Small-Cap
Growth Series" and amending Section 4.2 of Article IV list of
Series as described in Trust's registration statement, filed
via Edgar with Post-Effective Amendment No. 46 (File No.
033-05033) on April 30, 2003.
C-3
24. Amendment to Declaration of Trust effective as of October 25,
2002 deleting reference to Phoenix-Federated U.S. Government
Bond Series, filed via Edgar with Post-Effective Amendment No.
45 (File No. 033-05033) on February 24, 2003.
(2) Not Applicable.
(3) Not Applicable.
(4) Agreements and Plans of Reorganization (included as Appendix A and B to
the Prospectus/Proxy Statement contained in Part A of this Registration
Statement).
(5) Reference is hereby made to Registrant's Amended Declaration of Trust
referenced in Exhibit 1 above.
(6) (a) Investment Advisory Agreements.
(1) Investment Advisory Agreement by and between
Registrant and Phoenix Investment Counsel, Inc. dated
January 1, 1993 (currently pertaining to the
Phoenix-Aberdeen International Series (f/k/a
International Series), Phoenix-Engemann Capital
Growth Series (f/k/a Growth Series), Phoenix-Goodwin
Money Market Series (f/k/a Money Market Series),
Phoenix-Goodwin Multi-Sector Fixed Income Series
(f/k/a Bond Series), Phoenix-Oakhurst Balanced Series
(f/k/a Balanced Series), and Phoenix-Oakhurst
Strategic Allocation Series (f/k/a Total Return
Series) previously filed with Post-Effective
Amendment No. 11 on May 2, 1994 and filed via Edgar
with Post-Effective Amendment No. 20 (File No.
033-05033) on April 29, 1997.
(2) Instrument to Amend Investment Advisory Agreement
between Registrant and Phoenix Investment Counsel,
Inc. pertaining to Phoenix-Seneca Strategic Theme
Series (f/k/a Phoenix Strategic Theme Series)
effective January 23, 1996, filed via Edgar with
Post-Effective Amendment No. 46 (File No. 033-05033)
on April 30, 2003.
(3) Second Amendment to Investment Advisory Agreement
between Registrant and Phoenix Investment Counsel,
Inc., dated August 9, 2002 covering the Phoenix-Kayne
Large-Cap Core Series and Phoenix-Kayne Small-Cap
Quality Value Series and deleting reference to
Phoenix-Oakhurst Balanced Series (f/k/a Balanced
Series) and Phoenix-Engemann Nifty Fifty Series,
filed via Edgar with Post-Effective Amendment No. 46
(File No. 033-05033) on April 30, 2003.
(4) Third Amendment to Investment Advisory Agreement
between Registrant and Phoenix Investment Counsel,
Inc. dated November 12, 2002 to reflect duties to
proxy voting and reflect investment program designed
to manage cash, cash equivalents and short-term
investments, filed via Edgar with Post-Effective
Amendment No. 46 (File No. 033-05033) on April 30,
2003.
(5) Fourth Amendment to Investment Advisory Agreement
between Registrant and Phoenix Investment Counsel,
Inc. dated May 9, 2003 (pertaining to addition of new
series named Phoenix-Goodwin Multi-Sector Short Term
Bond Series), filed via EDGAR with Form N-14 (File
No. 333-111961) on January 16, 2004.
(6) Fifth Amendment to Investment Advisory Agreement
between Registrant and Phoenix Investment Counsel,
Inc. dated August 12, 2003 (pertaining to addition of
new series named Phoenix-Goodwin Multi-Sector Short
Term Series - change in fee schedule from Fourth
Amendment), filed via EDGAR with Post-Effective
Amendment No. 47 (File No. 033-05033) on April 30,
2004.
C-4
(7) Sixth Amendment to Investment Advisory Agreement
between Registrant and Phoenix Investment Counsel,
Inc. dated October 23, 2003 (pertaining to name
change from Phoenix-Kayne Large-Cap Core Series to
Phoenix-Kayne Rising Dividends Series), filed via
EDGAR with Post-Effective Amendment No. 47 (File No.
033-05033) on April 30, 2004.
(7) Not Applicable.
(8) Not Applicable.
(9) Custodian Agreement.
a. Master Custodian Agreement between Registrant and State Street
Bank and Trust Company dated May 1, 1997 via EDGAR with
Post-Effective Amendment No. 23 (File No. 033-05033) on December
12, 1997.
b. Amendment to Master Custodian Contract between Registrant and
State Street Bank and Trust Company dated February 10, 2000,
filed via EDGAR with Form N-14 (File No. 333-116762) on June 23,
2004.
c. Amendment to the Master Custodian Contract between Registrant and
State Street Bank and Trust Company, effective July 2, 2001 filed
via EDGAR with Post-Effective Amendment No. 42 (File No.
033-05033) on April 29, 2002.
d. Amendment to Master Custodian Contract between Registrant and
State Street Bank and Trust Company dated May 10, 2002, filed via
EDGAR with Form N-14 (File No. 333-116762) on June 23, 2004.
e. Letter Amendment to the Master Custodian Contract between
Registrant and State Street Bank and Trust Company, covering the
Phoenix-Kayne Large-Cap Core, Phoenix-Kayne Small-Cap Quality
Value, Phoenix-Lazard Small-Cap Value, Phoenix-Lazard U.S.
Multi-Cap, Phoenix-Lord Abbett Bond-Debenture, Phoenix-Lord
Abbett Mid-Cap Value, Phoenix-Lord Abbett Large-Cap Value, and
Phoenix-State Street Research Small-Cap Growth Series, previously
filed via EDGAR with Post-Effective Amendment No.44 (File No.
033-05033) on August 9, 2002.
(10) Not Applicable.
(11) (a) Opinion and Consent of Matthew A. Swendiman, Esq. with respect to
the legality of the shares being issued, filed herewith.
(b) Opinion and Consent of Matthew A. Swendiman, Esq. with respect to
the legality of the shares being issued, filed herewith.
(12) (a) Opinion and Consent of McDermott Will & Emery, LLP, special tax
counsel to the Trust, with respect to a tax-free reorganization
(to be filed by Amendment).
(b) Opinion and Consent of McDermott Will & Emery, LLP, special tax
counsel to the Trust, with respect to a tax-free reorganization
(to be filed by Amendment).
(13) (a) Financial Agent Agreement between Registrant and Phoenix Home
Life Mutual Insurance Company with respects to Phoenix Home Life
Variable Accumulation Account (VA) and Phoenix Home Life Variable
Universal Life Account dated November 15, 1995, filed via Edgar
with Post-Effective Amendment No. 16 (File No. 033-05033) on
January 29, 1996.
C-5
(b) Transfer Agency Agreement between Registrant and Phoenix
Equity Planning Corporation dated August 29, 1988 filed via
Edgar with Post-Effective Amendment No. 20 (File No.
033-05033) on April 29, 1997.
(c) Financial Agent Agreement between Registrant and Phoenix
Equity Planning Corporation dated December 11, 1996, filed via
Edgar with Post-Effective Amendment No. 20 (File No.
033-05033) on April 29, 1997.
(d) First Amendment to Financial Agent Agreement between
Registrant and Phoenix Equity Planning Corporation effective
February 27, 1998, filed via Edgar with Post-Effective
Amendment No. 25 (File No. 033-05033) on April 29, 1998.
(e) Second Amendment to Financial Agent Agreement between
Registrant and Phoenix Equity Planning Corporation
effective June 1, 1998, filed via EDGAR with
Post-Effective Amendment No. 47 (File No. 033-05033)
on April 30, 2004.
(f) Third Amendment to Financial Agent Agreement between
Registrant and Phoenix Equity Planning Corporation
effective October 29, 2001, filed via EDGAR with
Post-Effective Amendment No. 47 (File No. 033-05033)
on April 30, 2004.
(g) Fourth Amendment to Financial Agent Agreement between
Registrant and Phoenix Equity Planning Corporation
effective August 9, 2002, filed via EDGAR with Form
N-14 (File No. 333-111961) on January 16, 2004.
(h) Fifth Amendment to Financial Agent Agreement between
Registrant and Phoenix Equity Planning Corporation
effective January 1, 2003, filed via EDGAR with
Post-Effective Amendment No. 47 (File No. 033-05033)
on April 30, 2004.
(i) Service Agreement between the Registrant, Phoenix
Life Insurance Company, PHL Variable Insurance
Company and Phoenix Life and Annuity Company dated
January 1, 2003, filed via EDGAR with Form N-14 (File
No. 333-111961) on January 16, 2004.
(i) (1) First Amendment to Service Agreement between
Registrant, Phoenix Life Insurance Company, PHL
Variable Insurance Company and Phoenix Life and
Annuity Company dated November 11, 2003, filed via
EDGAR with Form N-14 (File No. 333-116762) on June
23, 2004.
(i) (2) Second Amendment to Service Agreement between
Registrant, Phoenix Life Insurance Company, PHL
Variable Insurance Company and Phoenix Life and
Annuity Company dated February 27, 2004, filed via
EDGAR with Post-Effective Amendment No. 47 (File No.
033-05033) on April 30, 2004.
(j) Code of Ethics.
(1) Code of Ethics Amended and Restated for The Phoenix
Edge Series Fund and Phoenix Variable Advisors, Inc.,
filed via EDGAR with Form N-14 (File No. 333-111961)
on January 16, 2004.
(2) Amended and Restated Code of Ethics for Phoenix
Funds, Phoenix Institutional Mutual Funds,
Phoenix-Engemann Funds, Phoenix-Partners Funds and
The Phoenix Edge Series Fund, filed via EDGAR with
Form N-14 (File No. 333-116762) on June 23, 2004.
(14) Consent of PricewaterhouseCoopers LLP, filed herewith.
(15) Not Applicable.
C-6
(16) Power of Attorney, filed via EDGAR with Form N-14 (File No. 333-116762)
on June 23, 2004.
(17) (a) Form of Voting Instructions Card and Proxy Card for
Phoenix-Alliance/Bernstein Growth +Value Series, filed via
EDGAR with Form N-14 (File No. 333-116762) on June 23, 2004.
(b) Form of Voting Instructions Card and Proxy Card for
Phoenix-MFS Investors Trust Series, filed via EDGAR with Form
N-14 (File No. 333-116762) on June 23, 2004.
(c) Prospectus of The Phoenix Edge Series Fund, as filed via Edgar
on Form N-1A on April 30, 2004 with Post-Effective Amendment
No. 47 (File No. 33-05033) and supplement to Prospectus dated
July 6, 2004 as filed via EDGAR on Form 497 (File No.
33-05033) on July 7, 2004, and incorporated by reference.
- ------------------
ITEM 17. UNDERTAKINGS
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is a part of this Registration Statement by
any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c) of the Securities Act of 1933, the
reoffering prospectus will contain the information called for
by the applicable registration form for reofferings by persons
who may be deemed underwriters, in addition to the information
called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that
is filed under paragraph (1) above will be filed as a part of
an amendment to the registration statement and will not be
used until the amendment is effective, and that, in
determining any liability under the Securities Act of 1933,
each post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein, and
the offering of the securities at that time shall be deemed to
be the initial bona fide offering of them.
(3) The undersigned Registrant agrees to file, by post-effective
amendment, an Opinion of Counsel or a copy of an IRS ruling
supporting the tax consequences of the Reorganization within a
reasonable time after receipt of such opinion or ruling.
C-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on behalf of the Registrant in the City
of Hartford and State of Connecticut on the 6th day of August, 2004.
THE PHOENIX EDGE SERIES FUND
Attest: /s/ Richard J. Wirth By: /s/ Philip R. McLoughlin
--------------------------- ------------------------------
Richard J. Wirth Name: Philip R. McLoughlin
Secretary Title: President
As required by the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities indicated on this
6th day of August, 2004.
Signature Title
- --------- -----
/s/Nancy G. Curtiss
- -------------------------------
Nancy G. Curtiss Vice President, Treasurer and Principal Financial and
Accounting Officer
- -------------------------------
Frank M. Ellmer* Trustee
- -------------------------------
John A. Fabian* Trustee
- -------------------------------
Roger A. Gelfenbien* Trustee
- -------------------------------
Philip K. Polkinghorn* Trustee and Executive Vice President
- -------------------------------
Eunice S. Groark* Trustee
- -------------------------------
Frank E. Grzelecki* Trustee
- -------------------------------
John R. Mallin* Trustee
S-1
/s/Philip R. McLoughlin
- -----------------------
Philip R. McLoughlin Trustee and President, Chief Executive Officer and Chairman
(Principal Executive Officer)
*By:/s/ Philip R. McLoughlin
------------------------
*Pursuant to power of attorney, filed via EDGAR with Form N-14 (File No.
333-116762) on June 23, 2004.
S-2
INDEX TO EXHIBITS
(11) (a) Opinion and Consent
(11) (b) Opinion and Consent
(14) Consent of PricewaterhouseCoopers LLP