As filed with the Securities and Exchange Commission on August 6, 2004
Registration No. 333-116763
================================================================================
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)
--------------------
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.
--------------------
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-Engemann Capital Growth 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
- ------------------------------ --------------------------
Part A: Information Required in Prospectus/Proxy Statement
1. Beginning of Registration Statement Cover Page
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
Factors Investment Objectives and Policies
4. Information about the Transaction Synopsis; The Proposed Reorganization; Comparative
Information on Shareholder Rights; Appendix A
(Form of Agreement and Plan of Reorganization)
5. Information about the Registrant Cover Page; Synopsis; Principal Risk Factors;
Comparison of Investment Objectives and Policies;
The Proposed Reorganization; 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 Company Being Acquired Synopsis; Comparison of Investment Objectives and
Policies; The Proposed Reorganization; 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 Reorganization; Comparative
Information on Shareholder Rights; Voting Information
8. Interest of Certain Persons and Experts The Proposed Reorganization
9. Additional Information Required for Not Applicable
Reoffering By Persons Deemed to be Underwriters
Caption or Location in
Form N-14 Item No. and Caption Prospectus/Proxy Statement
- ------------------------------ --------------------------
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 ProForma 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-LAZARD U.S. MULTI-CAP SERIES
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
--------------------
August 6, 2004
Dear Contract/Policyholder:
The Phoenix-Lazard U.S. Multi-Cap Series (the "Merging Series"), a series of
The Phoenix Edge Series Fund (the "Trust"), will hold a Special Meeting of
Shareholders at 10:15 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 an Agreement and Plan of
Reorganization (the "Agreement" or "Plan") under which the Merging Series will
be combined with the Phoenix-Engemann Capital Growth Series (the "Surviving
Series"), another series of the Trust (the "Reorganization"). The Surviving
Series has a similar investment objective to that of the Merging Series. If the
Agreement is 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 investment in the Merging
Series. No sales charge will be imposed in connection with the Reorganization.
PLIC will pay all costs of the Reorganization. The Reorganization is conditioned
upon receipt of an opinion of counsel indicating that the Reorganization will
qualify as a tax-free reorganization for Federal income tax purposes.
The Board of Trustees of the Trust believes that the Reorganization offers
you the opportunity to pursue your goals in a larger Series. The Board of
Trustees has carefully considered and has unanimously approved the proposed
Reorganization, as described in the accompanying materials, and believes that
the Reorganization is in the best interests of the Merging Series and its
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/policyholder, unless the context otherwise
requires. Therefore, the Board of Trustees recommends that you vote in favor of
the Agreement. 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 Voting
Instructions 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
the proxy 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 website and follow
the instructions given 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-LAZARD U.S. MULTI-CAP SERIES
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-Lazard U.S. Multi-Cap Series, 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 10:15 a.m., local time, for the following purposes:
1. To consider and act upon a proposal to approve the Agreement and Plan of
Reorganization (the "Agreement"), dated September 14, 2004, and the transactions
it contemplates, including (a) the transfer of all of the assets of the
Phoenix-Lazard U.S. Multi-Cap Series (the "Merging Series") to the
Phoenix-Engemann Capital Growth 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 Merging Series and
(b) the distribution of the shares of the Surviving Series so received to
shareholders of the Merging Series in complete liquidation of the Merging
Series. A vote in favor of the Agreement and Plan of Reorganization is a vote in
favor of termination of the Merging Series.
2. 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
THIS PAGE LEFT INTENTIONALLY BLANK.
PHOENIX-LAZARD U.S. MULTI-CAP SERIES
PHOENIX-ENGEMANN CAPITAL GROWTH 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"), and Phoenix Life and Annuity Company ("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-Lazard U.S. Multi-Cap Series (the
"Merging Series") to be held at 10:15 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 an Agreement and Plan
of Reorganization (the "Agreement") that would effect the reorganization (the
"Reorganization") of the Merging Series into the Phoenix-Engemann Capital Growth
Series, another series of the Trust (the "Surviving Series"), as described
below. Under the Agreement, all of the assets of the 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 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 Merging Series, and then the 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 Merging Series shares on the closing date of the Reorganization.
The Surviving Series and the Merging Series are each a series of the Trust,
an open-end management investment company. The Surviving Series has an
investment objective of intermediate and long-term capital appreciation, with
income as a secondary consideration. The Merging Series has an investment
objective of long-term capital appreciation. Phoenix Investment Counsel, Inc.
("PIC"), is employed as the investment advisor for the Surviving Series, and
Phoenix Variable Advisors, Inc. ("PVA"), is employed as the investment advisor
for the Merging Series. Engemann Asset Management ("Engemann") is the subadvisor
for the Surviving Series. Lazard Asset Management LLC ("Lazard") is the
investment subadvisor for the Merging Series.
This Prospectus/Proxy Statement, which you should retain for future
reference, sets forth concisely the information that you should know about the
Merging Series, the Surviving Series, and the transactions contemplated by the
Agreement. As used in this Prospectus/Proxy Statement, the term "Series" refers
individually and collectively to the Merging Series and the Surviving Series.
A Prospectus, as supplemented, and a Statement of Additional Information
("SAI"), as supplemented, for the Series dated May 1, 2004 (File No. 33-05033),
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 for the Trust, 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
Merging 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. 333-116763). 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.
------------------
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.
------------------
TABLE OF CONTENTS
Page
----
SYNOPSIS................................................................... 1
PRINCIPAL RISK FACTORS..................................................... 5
THE PROPOSED REORGANIZATION................................................ 6
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES........................... 9
COMPARATIVE INFORMATION ON PURCHASES AND EXCHANGES......................... 12
COMPARATIVE INFORMATION ON DISTRIBUTIONS AND REDEMPTIONS................... 13
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS.............................. 13
FISCAL YEAR................................................................ 14
MANAGEMENT AND OTHER SERVICE PROVIDERS..................................... 14
VOTING INFORMATION......................................................... 15
ADDITIONAL INFORMATION ABOUT THE SERIES.................................... 18
MISCELLANEOUS.............................................................. 18
SURVIVING SERIES FINANCIAL HIGHLIGHTS...................................... 22
OTHER BUSINESS............................................................. 23
APPENDIX A................................................................. A-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 Reorganization is the outcome of deliberations by the Board of
Trustees of the Trust (the "Trustees"). Management recommended that the Trustees
consider the benefits that the Series shareholders would realize if 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 a specific Reorganization proposal for their consideration and provide
an analysis of the specific benefits that shareholders would realize from the
proposal. Independent Trustees are Trustees who are not "interested persons" of
the Trust (as defined in Section 2(a)(19) of the Investment Company Act of 1940,
as amended (the "1940 Act")). After considering the specific Reorganization
proposal, and specific benefits that Shareholders are expected to realize from
the proposal, the Trustees, including the independent Trustees, at a meeting
held on May 11, 2004, unanimously approved the Reorganization, subject to
approval by Merging Series Shareholders.
SUMMARY OF THE PROPOSED REORGANIZATION
The Reorganization will be effected in accordance with the terms of the
Agreement, a form of which is attached to this Prospectus/Proxy Statement as
Appendix A. The Agreement provides for:
o the acquisition by the Surviving Series, on the closing date of the
Reorganization, of all of the assets of the Merging Series in exchange
solely for shares of the Surviving Series and the assumption by the
Surviving Series of all liabilities of the Merging Series;
o the pro rata distribution of shares of the Surviving Series to the
shareholders of the Merging Series in exchange for their respective
shares of the Merging Shares; and
o the complete liquidation of the Merging Series as provided in the
Agreement.
The Reorganization is anticipated to occur on or about September 24, 2004. If
the Agreement is implemented, the insurance company separate accounts holding
shares of the 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 their shares of the Merging Series as of the
closing date of the Reorganization.
The implementation of the Agreement is subject to a number of conditions set
forth in the Agreement. See "The Proposed Reorganization." 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 Reorganization will qualify as a tax-free reorganization
described in Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"); and
o the approval of the Agreement by the shareholders of the Merging Series.
The Agreement provides that PLIC will bear all costs and expenses of the
Reorganization, 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.
1
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and principal investment strategies of the Merging
Series and the Surviving Series are similar:
o the Merging Series has an investment objective of long-term capital
appreciation. The Surviving Series has an investment objective of
intermediate and long-term capital appreciation, with income as a
secondary consideration;
o under normal circumstances, the Merging Series primarily invests in equity
securities, principally common stocks, of small-, medium- and large-sized
U.S. companies (defined by the subadvisor as "multi-cap") that the
subadvisor believes are undervalued based on earnings, cash flow or asset
value. The Merging Series typically holds securities of between 50 and 70
different issuers on a long-term basis. The Merging Series, under normal
market circumstances, invests at least 80% of its assets in U.S. equity
securities. The Surviving Series, under normal circumstances invests at
least 65% of its assets in common stocks.
See "Principal Risk Factors" and "Comparison of Investment Objectives and
Policies" below for further information on the similarities and differences
among the investment objectives, policies and risks of the Surviving Series and
the Merging Series. You can also find additional information for the Surviving
Series in its Prospectus.
DIVIDENDS AND DISTRIBUTIONS
The Merging Series and the Surviving Series distribute net income quarterly.
Both Series distribute net realized capital gains, if any, at least annually.
All dividends and distributions of the Merging Series and the Surviving 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 offered directly to the public. Shares of the
Trust currently are offered through certain separate accounts owned by Phoenix
to fund the Contracts. A person can invest in the Trust only by purchasing a
Contract and directing the allocation of the purchase payment(s) to the
sub-account(s) corresponding to the Series in which the Contractholder wishes to
invest. The sub-accounts, 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 sub-account 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 performance and therefore be
detrimental to all contract/policyholders, Phoenix does reserve the right to
temporarily or permanently terminate trading privileges or reject any specific
order from anyone whose transactions seem to follow a timing pattern, including
those who request more than one trade out of a sub-account 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 Phoenix has entered into a third-party transfer service agreement with
the registered representative's broker-dealer firm.
Both Series currently offer shareholders identical exchange privileges.
Shareholders of either 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 the Merging
Series, you have the right to instruct the insurance company how to vote and
redeem the shares of the Merging Series and the Surviving Series. Shareholders
of both 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"
2
for more information. You can also find additional information on the Surviving
Series' redemption procedures in its Prospectus.
FEDERAL TAX CONSEQUENCES OF PROPOSED REORGANIZATION
At the closing of the Reorganization, the Trust will receive an opinion of
counsel, subject to customary assumptions and representations, that, for Federal
income tax purposes, the Reorganization will qualify as a tax-free
reorganization described in Section 368(a) of the Code. Accordingly:
o no gain or loss will be recognized by the Merging Series upon the transfer
of the assets of the 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 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; and
o the tax basis of the Merging Series' assets acquired by the Surviving
Series will be the same as the tax basis of such assets to the Merging
Series immediately prior to the Reorganization, and the holding period of
the assets of the Merging Series in the hands of the Surviving Series will
include the period during which those assets were held by the 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 the Reorganization should not adversely impact the tax
treatment of your variable life or variable annuity contract. Shareholders of
the Merging Series should consult their tax advisors regarding the effect, if
any, of the proposed Reorganization in light of their individual circumstances.
See "The Proposed Reorganization--Federal Income Tax Consequences" for more
information.
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 investment risks of
investing in equity securities, generally, and of growth stocks, in particular,
and the risks associated with investing in equity securities of companies with
small and medium market capitalization. As with any Series of the Trust,
investors can lose money by investing in the Surviving Series. There is no
assurance that the Surviving Series will meet its investment objectives. The
Surviving Series' investment objective and policies are similar to those of the
Merging Series. Investments in the Merging Series are, in the same manner as
investments in the Surviving Series, subject to the investment risks of
investing in equity securities, generally, and the added risks associated with
investing in the equity securities of companies with small and medium market
capitalizations. Additional investment risks for the Merging Series include
those associated with investing in the securities of companies with larger
market capitalizations and those associated with investing in the securities of
companies believed to be undervalued by the investment subadviser. See
"Principal Risk Factors" for further information concerning 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. PIC has entered into a
subadvisory agreement with Engemann, who provides day-to-day portfolio
management for the Surviving Series. PVA is the investment advisor to the
Merging Series. PVA has entered into a subadvisory agreement with Lazard, who
provides day-to-day portfolio management for the Merging Series.
3
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 Reorganization, assuming the Reorganization took place on December 31,
2003, and after adjusting such information to reflect current fees. The expense
information for the Surviving Series and the 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 table below,
immediately upon effectiveness of the Reorganization, the "Total Annual Series
Operating Expenses" for the combined Surviving Series are expected to be lower
than the "Total Annual Series Operating Expenses" for the Merging Series.
ANNUAL SERIES OPERATING EXPENSES
- -------------------------------- PRO FORMA
(expenses that are deducted from series assets) SURVIVING SERIES MERGING SERIES(a) COMBINED SERIES
---------------- ----------------- ---------------
Management Fees 0.66% 0.80% 0.66%
Distribution and/or Service (12b-1) Fees None None None
Other Expenses 0.19% 3.92% 0.20%
Total Annual Series Operating Expenses 0.85% 4.72% 0.86%
(a) 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 0.15% of the Merging Series' average net assets
(the "expense cap"). Therefore, the Merging Series' operating expenses after
reimbursement were 0.95% for the year ended December 31, 2003. This expense cap
may be changed or eliminated at any time without notice.
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 as compared with investing in other mutual funds. 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 $ 87 $ 271 $ 471 $1,047
Merging Series $ 473 $1,422 $2,376 $4,786
Pro Forma Combined Surviving Series $ 88 $ 275 $ 477 $1,062
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 the reimbursement of expenses over certain levels by the Merging
Series' advisor.
4
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.
PRINCIPAL RISK FACTORS
The Surviving Series' investment objective, policies and risk factors are
similar to those of the 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
the Merging Series and 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 the Merging Series
and investing in the Surviving Series. Each series has equity securities
investing risk and smaller market capitalization risk. These risks are described
below. An investment in the Merging Series is subject to larger market
capitalization risk and value investing risk; while an investment in the
Surviving Series is subject to growth stock investing risk, while not subject to
larger market capitalization risk or value investing risk. An investment in the
Surviving Series, therefore, may tend to be more volatile than an investment in
the Merging 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 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. 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 supports their share value can decrease. If between the time you purchase
shares and the time you sell shares the value of your Series' investments
decrease, 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 your shares may
decrease.
The following chart indicates the primary investment risks of the Surviving
Series and the Merging Series. Descriptions of the risks of the Surviving Series
can be found below.
SURVIVING SERIES MERGING SERIES
---------------- --------------
Equity Securities Investment Risk Equity Securities Investment Risk
Growth Stock Investment Risk Value Investing Risk
Smaller Market Capitalization Risk Smaller Market Capitalization Risk
Larger Market Capitalization Risk
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). The
Surviving 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, the Surviving 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.
5
Growth Stock Investment Risk
The Surviving Series may invest in growth stocks. Because growth companies
typically make little or no dividend payments to shareholders, investment return
is based on capital appreciation, making return more dependent on market
fluctuations. 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.
Smaller Market Capitalization Risk
The Series may invest in companies with small and medium capitalizations,
which makes the Series more volatile than a fund that invests in companies with
larger capitalizations. The smaller companies may be affected to a greater
extent than larger companies by changes in general economic conditions and
conditions in particular industries. Smaller companies also may be relatively
new and not have the same operating history and "track record" as larger
companies. This could make future performance of smaller companies more
difficult to predict. Companies with small-capitalization are often companies in
industries that have recently emerged due to cultural, economic, regulatory or
technological developments. Such developments can have a significant positive or
negative effect on small-capitalization companies and their stock performance.
Given the limited operating history and rapidly changing fundamental prospects,
investment returns from smaller-capitalization companies can be highly volatile.
Smaller companies may find their ability to raise capital impaired by their size
or lack of operating history. Product lines are often less diversified and
subject to competitive threats. Smaller-capitalization stocks are subject to
varying patterns of trading volume and may, at times, be difficult to sell.
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 REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION
The terms and conditions under which the proposed Reorganization may be
consummated are set forth in the Agreement. Significant provisions of the
Agreement are summarized below. This summary, however, is qualified in its
entirety by reference to the Agreement, a form of which is attached to this
Prospectus/Proxy Statement as Appendix A.
The Agreement contemplates:
o the acquisition by the Surviving Series, on the closing date of the
Reorganization, of all of the assets of the Merging Series in exchange
solely for shares of the Surviving Series and the assumption by the
Surviving Series of all liabilities of the Merging Series;
o the pro rata distribution of shares of the Surviving Series to the
shareholders 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
Agreement.
6
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 Reorganization. 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 Reorganization will occur following satisfaction (or
waiver) of the conditions to closing set forth in the Agreement 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 the Merging Series will be determined
by dividing (a) the value of the aggregate net assets of each Merging Series 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 its 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 such account the shares due pursuant
to the Reorganization. Every Merging Series shareholder will own shares of the
Surviving Series immediately after the 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 liabilities of any sort or kind (collectively,
"Liability") which may be asserted against them or for which the Independent
Trustees may become liable arising out of or attributable to the transactions
contemplated by the Agreement, provided that any Independent Trustee seeking the
benefit of this indemnification shall not have materially contributed to the
creation of such Liability by acting in a manner contrary to his or her
fiduciary duties as a trustee under the 1940 Act.
The consummation of the Reorganization is subject to a number of conditions
set forth in the Agreement. 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 Reorganization 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 Merging Series. The Agreement may be terminated and the Reorganization
abandoned at any time, before or after approval by the shareholders of the
Merging Series, prior to the closing date, by resolution of the Board of
Trustees. In addition, the Agreement may be amended by mutual agreement, except
that no amendment may be made to the Agreement subsequent to the Special Meeting
that would change the provisions for determining the number of Surviving Series
shares to be issued to shareholders of the Merging Series without their further
approval.
REASONS FOR THE REORGANIZATION
The proposal for the Reorganization is the outcome of deliberations by the
Trustees of the Trust. Management recommended that the Trustees consider the
benefits that shareholders would realize if the Merging Series were to be
combined with the Surviving Series. In response to that recommendation, the
independent Trustees of the Trust
7
requested that management outline a specific Reorganization proposal for their
consideration and provide an analysis of the specific benefits to be realized by
shareholders from the proposal.
In the course of their review, the Trustees of the Trust noted that the
Reorganization would be a means of combining two series with 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 Reorganization, is anticipated to be larger than the 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 Reorganization to shareholders of the
Surviving Series and the Merging Series, including that the Reorganization
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 Agreement, and that the proposed
Agreement will not result in dilution of shareholder interests;
o the total expense ratio of the combined Surviving Series following the
Reorganization is projected to be lower than the current total expense
ratio of the 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;
o the terms and conditions of the Agreement will have minimal effect on the
price of the outstanding shares of each Series;
o the Reorganization provides for continuity of distribution and shareholder
servicing arrangements; and
o the Reorganization is 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 the variable contracts invested in whole or in part in either of the
Series.
After considering these and other factors, the Board of Trustees, including
the Independent Trustees, unanimously concluded at a meeting held on May 11,
2004, that the Reorganization is fair and reasonable and would be in the best
interests of both the Merging Series and the Surviving Series and their
respective shareholders and that the interests of either Series' shareholders
will not be diluted as a result of the transactions contemplated by the
Reorganization recognizing that there can be no assurance that any operating
inefficiencies or other benefits will in fact be realized. The Trustees
unanimously voted to approve the Reorganization and authorized the officers of
the Trust to submit the Reorganization proposal 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, the Reorganization
will qualify as a tax-free reorganization described in Section 368(a) of the
Code. Accordingly:
o no gain or loss will be recognized by the Merging Series on the transfer
of the assets of the 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 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;
8
o the tax basis of the Merging Series' assets acquired by the Surviving
Series will be the same as the tax basis of such assets to the Merging
Series immediately prior to the Reorganization, and the holding period of
the assets of the Merging Series in the hands of the Surviving Series will
include the period during which those assets were held by the 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
known liabilities of the Merging Series.
The receipt of such an opinion that the Reorganization will qualify as a
tax-free reorganization described in Section 368(a) of the Code is a condition
to the consummation of the Reorganization. The Trust has not obtained an
Internal Revenue Service ("IRS") private letter ruling regarding the Federal
income tax consequences of the Reorganization and the IRS is not bound by advice
of counsel. You are not directly a shareholder of the Merging Series but,
instead, some or all of your variable life insurance policy or variable annuity
contract is invested in the Merging Series. We also believe, however, that the
Reorganization 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 would be subject to the Federal income tax rules in effect
on the effective date of the Reorganization instead of the Federal income tax
rules in effect on the issue date of your Contract, which could have been more
favorable.
Shareholders of the Merging Series should consult their tax advisors
regarding the effect, if any, of the proposed Reorganization in light of their
individual circumstances. Since the foregoing discussion relates only to the
Federal income tax consequences of the Reorganization, shareholders of the
Merging Series should also consult tax advisors as to state and local tax
consequences, if any, of the Reorganization.
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
the 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 the Merging Series at net asset value.
SURVIVING MERGING PRO FORMA
SERIES SERIES COMBINED SERIES
------ ------ ---------------
Net assets $632,024,560 $4,218,547 $636,243,107
Net asset value per share $13.69 $12.62 $13.69
Shares outstanding 46,164,954 334,365 46,473,102
The table set forth above should not be relied on to determine the number of
Surviving Series shares to be received in the Reorganization. The actual number
of shares to be received will depend upon the net asset value and number of
shares outstanding of the Merging Series and the Surviving Series at the time of
the Reorganization.
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 the 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.
9
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of the Surviving Series and the Merging Series are
similar. The investment objectives of the Surviving Series and the 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
respective Series. 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 (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. While the Merging Series may engage, to a limited extent, in
various investment techniques such as lending portfolio securities, this is not
a principal investment strategy of the Surviving Series. The Merging Series
principally purchases undervalued equity securities, while the Surviving Series
primarily invests in growth stocks. An investment in the Surviving Series,
therefore, may be more volatile that an investment in the Merging Series, as
investments in growth stocks are more volatile than value stocks to market
changes, tending to rise faster when markets rise and dropping more sharply when
markets fall.
SURVIVING SERIES
- ---------------------------------------------------------------------------------------------------------------------
Investment Objective Intermediate and long-term capital appreciation, with
income as a secondary consideration.
- ----------------------------------------------------------- ---------------------------------------------------------
Principal Investment Strategies Under normal circumstances, the Surviving Series
invests at least 65% of its assets in common stocks.
Engemann seeks growth through disciplined,
diversified investment in stocks of high quality
companies that it believes have the ability to
increase their profits year after year at a much
faster rate than the average company. Engemann
manages the Series' portfolio from a top-down sector
focus based upon market and economic conditions.
Securities are then analyzed using a bottom-up
approach. Engemann focuses on companies that it
believes have consistent, substantial earnings
growth, strong management with a commitment to
shareholders, financial strength and a favorable
long-term outlook.
Generally, stocks are sold when Engemann believes the
growth rate of the stock will drop over the long term
or there is a negative change in fundamentals.
The Surviving Series may invest in small companies as
well as large companies.
- ---------------------------------------------------------------------------------------------------------------------
10
MERGING SERIES
- ---------------------------------------------------------------------------------------------------------------------
Investment Objective Long-term capital appreciation.
- ----------------------------------------------------------- ---------------------------------------------------------
Principal Investment Strategies The Merging Series invests primarily in equity
securities, principally common stocks, of small-,
medium-, and large-sized U.S. companies (defined by
the subadvisor as "multi-cap") that Lazard believes
are undervalued based on their earnings, cash flow or
asset values. Lazard allocates investments of the
Series among companies based on their capitalization
at the time of purchase with the objective of
outperforming the Russell 3000(R) Index over a three
to five year market cycle. The market capitalizations
of companies in which the Merging Series may invest
may vary with market conditions. The Merging Series
invests in equity securities of companies with
capitalizations greater than $500 million.
The Merging Series typically holds securities of
between 50 and 70 different issuers on a long-term
basis. Under normal market circumstances, the Merging
Series invests at least 80% of its assets in U.S.
securities.
The Merging Series may engage, to a limited extent,
in various investment techniques such as lending
portfolio securities.
- ---------------------------------------------------------------------------------------------------------------------
CERTAIN INVESTMENT RESTRICTIONS
The Series are 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 a Series (as that term is defined in the 1940 Act).
Neither 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
11
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.
COMPARATIVE INFORMATION ON PURCHASES AND EXCHANGES
The shares of the Trust are not offered directly to the public. Shares of the
Trust currently are offered to certain separate accounts in order 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 Contracts issued by Phoenix. 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
Reorganization, no sales charges are imposed. Shares of the Series are offered
to the separate accounts at the 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.
12
COMPARATIVE INFORMATION ON DISTRIBUTIONS AND REDEMPTIONS
Both Series offer the same distribution and redemption services. The Merging
Series and the Surviving Series distribute net income quarterly. Both Series
distribute 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. Both Series currently offer shareholders identical exchange
privileges. Shareholders of either Series may exchange their shares for shares
of a corresponding Series of the Trust.
Shares of the Surviving Series and the 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 is 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 both Series offer the same distributions and redemptions, after the
closing, the same services will continue to be available to the shareholders of
the Merging Series but in their capacity as shareholders of the Surviving
Series.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
The following is a summary of certain provisions of the Amended Declaration
of Trust of the 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, subject to shareholder approval.
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 and liquidators 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 law, 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.
13
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 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 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 either 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 both Series rests with Trustees
of the Trust.
PIC is the investment advisor to the Surviving Series. Engemann Asset
Management ("Engemann") is the subadvisor to the Series and is responsible for
its day-to-day portfolio management. Gretchen Lash oversees the research and
portfolio management function at Engemann and has been the Chief Executive
Officer, President, Chief Investment Officer and Portfolio Manager for Engemann
since May 2003. Ms. Lash joined Engemann in October 2001 as the Chief Investment
Officer and Portfolio Manager. Previously, from October 1997 to October 2001,
Ms. Lash was a principal and portfolio manager for William Blair & Co. Ms. Lash
earned the right to use the Chartered Financial Analyst designation in 1992.
Ms. Lash, John Tilson and Scott Swanson serve as co-portfolio managers of the
Surviving Series and as such are responsible for the day-to-day management of
the Series' portfolio. Mr. Tilson is an Executive Vice President of Portfolio
Management of Engemann and has been with Engemann since 1983. He earned the
right to use the Chartered Financial Analyst designation in 1974. Mr. Swanson is
a Vice President of Engemann and has been with Engemann since 1990. He earned
the right to use the Chartered Financial Analyst designation in 1991.
PVA is the investment advisor to the Merging Series. PVA has entered into a
subadvisory agreement with Lazard to provide day-to-day portfolio management.
The subadvisory agreement between PVA and Lazard will be terminated following
the consummation of the proposed merger.
Phoenix Equity Planning Corporation serves as financial agent of both Series
and, as such, performs administrative, bookkeeping and pricing functions.
JP Morgan Chase Bank serves as the custodian of the Surviving Series. State
Street Bank and Trust Company serves as custodian to the Merging Series.
14
PricewaterhouseCoopers LLP serves as independent registered public
accountants for both Series.
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 the
Merging Series at the close of business on July 20, 2004 ("Record Date") own
489,126.6217 shares. 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 Merging Series for which Phoenix receives voting instructions from the
shareholder 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 Phoenix. 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 by 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 of this proxy solicitation. Whichever method you choose, please read the
enclosed proxy statement carefully before you vote.
15
As of the Record Date, Phoenix owned 489,126.6217 shares of the Merging
Series and 42,508,093.09 shares of the Surviving Series. No one
Contract/Policyholder owns beneficially of record 5% or more of the outstanding
shares of the Merged Series, Surviving Series, or the combined Surviving Series
assuming consummation of the Reorganization, based on holdings and total shares
as 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
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 Merging Series represented at the
meeting if more than 50% of the eligible votes of the Merging Series are present
in person or by proxy or (ii) more than 50% of the eligible votes of the Merging
Series) must approve the herein contemplated merger. 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 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 proposal have not
been obtained, then the persons named as proxies may propose one or more
adjournment(s) 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
proposal in favor of such an adjournment and will vote those proxies required to
be voted AGAINST the Reorganization proposal against such adjournment.
The meeting may be adjourned from time to time by the vote of a majority of
the shares represented at the meeting, whether or not a quorum is present. If
the meeting is adjourned to another time or place, notice need not be given of
the adjourned meeting at which the adjournment is taken unless a new record date
of the adjourned meeting is fixed or unless the adjournment is for more than
sixty (60) days from the date set for the original meeting, in which case the
Trustees shall set a new record date. Notice of any such adjourned meeting shall
be given to each shareholder of record entitled to vote at the adjourned
meeting. 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 Instructions Card is received and is properly executed. If the
shareholder properly executes a Voting Instructions Card and gives no voting
instructions with respect to the Reorganization proposal, the shares will be
voted in favor of the Reorganization proposal. The individuals named as proxies
on the enclosed Voting Instructions Card, in their discretion, may vote upon
such other matters as may properly come before the meeting. The Board of
Trustees of the Trust is not aware of any other matters to come before the
meeting.
16
Approval of the Reorganization proposal by the shareholders of the Merging
Series is a condition of the consummation of the Reorganization. If the
Reorganization is not approved, the Merging Series will continue as a series of
the Trust and the Board of Trustees of the Trust may consider other alternatives
in the best interests of the shareholders of the Merging Series.
REVOCATION OF PROXIES
Any shareholder who has given a Voting Instructions Card has the right to
revoke the proxy any time prior to its exercise:
o by written notice of the a Voting Instructions 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 Voting Instructions 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 by
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 Voting Instruction Cards. Banks, brokers,
fiduciaries and nominees will, upon request, be reimbursed by PLIC for their
reasonable expenses in sending proxy material to beneficial owners of shares of
the 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 a Voting Instructions Card by telephone or Internet,
the shareholder may still submit the Voting Instructions 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 PLAN OF REORGANIZATION.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE RESPOND PROMPTLY BY
INTERNET OR BY TELEPHONE OR BY RETURNING THE VOTING INSTRUCTIONS CARD IN THE
POSTAGE-PAID RETURN ENVELOPE.
17
ADDITIONAL INFORMATION ABOUT THE SERIES
Additional information about the Series is included in the Trust's
Prospectus, as supplemented, and Statement of Additional Information, as
supplemented, dated May 1, 2004 (File 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
Both 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 for the Trust, 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.
PERFORMANCE FOR THE PERIOD ENDING DECEMBER 31, 2003
The following table compares investment performance for both 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 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 10 YEAR SERIES DATE
------ ------ ------- ------ ----
Surviving Series
o Phoenix-Engemann Capital Growth Series 26.49% (7.88%) 4.56% -- --
o S&P 500(R)/Barra Growth Index(1) 25.68% (3.48%) 11.12% -- --
o S&P 500(R) Index(2) 28.71% (0.57%) 11.10% -- --
Merging Series
o Phoenix-Lazard U.S. Multi-Cap Series 28.78% - - 20.45% 08/12/02
o Russell 3000(R) Index(3) 31.06% - - 19.75% 08/12/02
o S&P 500(R) Index(2) 28.71% - - 18.29% 08/12/02
- ----------------------------
(1) The S&P 500(R)/Barra Growth Index measures total return performance of
companies with lower book-to-price ratios.
(2) The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return. Performance is provided for general comparative purposes.
(3) The Russell 3000(R) Index is a market capitalization-weighted index of
3,000 largest U.S. companies. The index is calculated on a total-return basis
with dividends reinvested.
(4) This chart assumes an initial investment of $10,000 made on the inception
dates noted in the tables above.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active management
of an actual portfolio.
18
GROWTH OF $10,000(4) (FOR THE PERIOD ENDING DECEMBER 31, 2003)
PHOENIX-ENGEMANN CAPITAL S&P 500(R) /BARRA GROWTH
YEAR GROWTH SERIES INDEX(1) S&P 500(R) INDEX(2)
---- ------------- -------- -------------------
12/31/93 $10,000 $10,000 $10,000
12/30/94 $10,148 $10,314 $10,132
12/29/95 $13,278 $14,246 $13,933
12/31/96 $14,948 $17,661 $17,172
12/31/97 $18,099 $24,113 $22,903
12/31/98 $23,530 $34,278 $29,489
12/31/99 $30,512 $43,962 $35,721
12/29/00 $25,089 $34,255 $32,440
12/31/01 $16,415 $29,894 $28,587
12/31/02 $12,343 $22,843 $22,270
12/31/03 $15,612 $28,708 $28,664
PHOENIX-LAZARD U.S.
YEAR MULTI-CAP SERIES RUSSELL 3000(R) INDEX(3) S&P 500(R) INDEX(2)
---- ---------------- ------------------------ -------------------
08/12/02 $10,000 $10,000 $10,000
12/31/02 $10,050 $ 9,796 $ 9,806
12/31/03 $12,942 $12,839 $12,622
- ----------------------------
(1) The S&P 500(R)/Barra Growth Index measures total return performance of
companies with lower book-to-price ratios.
(2) The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return. Performance is provided for general comparative purposes.
(3) The Russell 3000(R) Index is a market capitalization-weighted index of 3,000
largest U.S. companies. The index is calculated on a total return basis with
dividends reinvested.
(4) This chart assumes an initial investment of $10,000 made on the inception
dates noted in the tables above.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active management
of an actual portfolio.
19
SECTOR WEIGHTINGS (as a percentage of equity holdings as of December 31, 2003)
PHOENIX-LAZARD U.S. PHOENIX-ENGEMANN
SECTOR MULTI-CAP SERIES CAPITAL GROWTH SERIES
------ ---------------- ---------------------
Consumer Discretionary $934,465 22.45% $101,708,733 16.42%
Consumer Staples $290,350 6.98% $75,668,008 12.22%
Energy $289,679 6.96% -- 0.00%
Financials $891,603 21.42% $130,667,778 21.10%
Health Care $541,061 13.00% $131,342,761 21.21%
Industrials $510,221 12.26% $23,043,755 3.72%
Information Technology $559,526 13.44% $156,914,126 25.33%
Materials $59,794 1.44% -- 0.00%
Telecommunication Services $42,390 1.02% -- 0.00%
Utilities $42,848 1.03% -- 0.00%
Sum of Equity Holdings $4,161,937 100.00% $619,345,161 100.00%
ASSET MIX (as a percentage of total net assets as of December 31, 2003)
PHOENIX-LAZARD U.S. PHOENIX-ENGEMANN CAPITAL
ASSET MIX MULTI-CAP SERIES GROWTH SERIES
--------- ---------------- -------------
Common Stock 95.25% 96.91%
Foreign Common Stock 3.41% 1.08%
Agency Asset-Backed Securities 0.00% 0.79%
Short Term Obligations 2.96% 1.30%
Other Assets and Liabilities, Net (1.62)% (0.08)%
Total Net Assets 100.00% 100.00%
TEN LARGEST EQUITY HOLDINGS (as a percentage of total net assets as of December 31, 2003)
PHOENIX-LAZARD U.S. MULTI-CAP SERIES PHOENIX-ENGEMANN CAPITAL GROWTH SERIES
------------------------------------ --------------------------------------
Microsoft Corp. 3.1% Cisco Systems, Inc. 5.0%
Bank of America Corp. 3.0% Amgen, Inc. 4.4%
Pfizer, Inc. 2.9% Pfizer, Inc. 4.1%
Exxon Mobil Corp. 2.7% Hewlett-Packard Co. 3.9%
Pepsi Bottling Group, Inc. (The) 2.5% Medtronic, Inc. 3.9%
International Business Machines Corp. 2.4% Microsoft Corp. 3.8%
Accenture Ltd. Class A 2.4% Sysco Corp. 3.8%
Republic Services, Inc. 2.3% Oracle Corp. 3.4%
Mandalay Resort Group 2.3% PepsiCo, Inc. 3.3%
Home Depot, Inc. (The) 2.3% State Street Corp. 3.1%
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.
20
ADDITIONAL FINANCIAL INFORMATION
The table set forth 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.
FINANCIAL HIGHLIGHTS (Selected data from a share outstanding throughout the
indicated period)
The financial highlights table is intended to help you understand the
Surviving Series' financial performance throughout 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. The 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.
21
SURVIVING SERIES
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIODS)
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
2003 2002 2001(2) 2000 1999
---- ---- ---- ---- ----
Net asset value, beginning of period $ 10.84 $ 14.41 $ 22.49 $ 28.57 $ 23.93
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.01 0.01 --(1) --(1) 0.03
Net realized and unrealized gain (loss) 2.85 (3.58) (7.72) (4.91) 6.97
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 2.86 (3.57) (7.72) (4.91) 7.00
----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net income (0.01) -- (0.01) --(1) (0.06)
----- ----- ----- ----- -----
Distributions from net realized gains -- -- (0.35) (1.17) (2.31)
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.01) -- (0.36) (1.17) (2.37)
----- ----- ----- ----- -----
Capital contribution from Adviser -- -- -- -- 0.01
----- ----- ----- ----- -----
CHANGE IN NET ASSET VALUE 2.85 (3.57) (8.08) (6.08) 4.64
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 13.69 $ 10.84 $ 14.41 $ 22.49 $ 28.57
===== ===== ===== ===== =====
Total return 26.49% (24.81)% (34.57)% (17.77)% 29.67%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $ 632,025 $ 571,076 $ 937,569 $1,680,036 $2,269,090
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 0.85%(3) 0.75%(3) 0.72%(3) 0.68% 0.68%
Net investment income 0.07% 0.08% 0.01% 0.03% 0.11%
Portfolio turnover 41% 115% 58% 82% 106%
- ----------------------------
(1) Amount is less than $0.01.
(2) As required, effective January 1, 2002, the Fund adopted the provisions of
AICPA Audit and Accounting Guide for Investment Companies and began
amortizing premium on debt securities. There was no effect to net
investment income per share and net realized and unrealized gain (loss) per
share and the ratio of net investment income to average net assets. Per
share ratios and supplemental data from prior periods have not been
restated to reflect this change.
(3) 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.
22
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-Alliance/Bernstein Growth + Income Series Shareholders and Phoenix-MFS
Investors Trust Series Shareholders, September 14, 2004; a Special Meeting of
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
P.O. 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 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
23
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-Engemann Capital Growth Series (the "Surviving Series"), a separate
series of the Trust, and the Trust, on behalf of the Phoenix-Lazard U.S. Multi
Cap 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 AND 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
therefor: (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 24, 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.
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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
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 Operations 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
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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 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;
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(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
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,
Inc.), 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;
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(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 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;
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(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;
(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
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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.
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; and
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.
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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;
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
A-9
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 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, or (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.
A-10
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, P. O. Box 5056, 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.
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-LAZARD U.S. MULTI-CAP SERIES
_________________________________ By: _________________________________
SECRETARY
Title: ______________________________
Attest: THE PHOENIX EDGE SERIES FUND ON BEHALF OF
ITS PHOENIX-ENGEMANN CAPITAL GROWTH SERIES
_________________________________ By: _________________________________
SECRETARY
Title: ______________________________
A-11
PART B
STATEMENT OF ADDITIONAL INFORMATION
ACQUISITION OF THE ASSETS OF
PHOENIX-LAZARD U.S. MULTI-CAP SERIES
BY AND IN EXCHANGE FOR SHARES OF
PHOENIX-ENGEMANN CAPITAL GROWTH 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 all the liabilities of the
Phoenix-Lazard U.S. Multi-Cap Series (the "Merging Series") to the
Phoenix-Engemann Capital Growth 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-CSR (File
No. 811-04642) on March 8, 2004 and incorporated by reference;
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 P.O.
Box 8027, Boston, Massachusetts 02266-8027.
The date of this Statement of Additional Information is August 6,
2004.
Phoenix-Engemann Capital Growth Series/Phoenix-Lazard U.S. Multi-Cap Series
Pro Forma Combined Schedule of Investments
December 31, 2003 (Unaudited)
Shares or Par Value Value
========= ========= ========== ============================================== ============ ========== =============
Phoenix- Phoenix- Phoenix- Phoenix-
Engemann Lazard Engemann Lazard
Capital U.S. Pro Forma Capital U.S. Pro-Forma
Growth Multi-Cap Combined Growth Multi-Cap Combined
Series Series Portfolios DESCRIPTION Series Series Portfolios
========= ========= ========== ============================================== ============ ========== =============
COMMON STOCKS--96.9%
- 1,600 1,600 Abercrombie & Fitch Co. Class A (b) $ - $ 39,536 $ 39,536
389,310 1,250 390,560 American Express Co. 18,776,421 60,287 18,836,708
- 1,000 1,000 American International Group, Inc. - 66,280 66,280
- 1,050 1,050 AmerisourceBergen Corp. - 58,958 58,958
453,600 - 453,600 Amgen, Inc. (b) 28,032,480 - 28,032,480
91,000 - 91,000 Apollo Group, Inc. Class A (b) 6,188,000 - 6,188,000
- 1,600 1,600 Apple Computer, Inc. (b) - 34,192 34,192
199,000 - 199,000 Applied Materials, Inc. (b) 4,467,550 - 4,467,550
- 3,150 3,150 ARAMARK Corp. Class B - 86,373 86,373
- 100 100 Arbitron, Inc. (b) - 4,172 4,172
- 1,250 1,250 Avery Dennison Corp. - 70,025 70,025
- 1,550 1,550 Baker Hughes, Inc. - 49,848 49,848
- 1,550 1,550 Bank of America Corp. - 124,666 124,666
- 2,050 2,050 Bank One Corp. - 93,460 93,460
- 500 500 Barr Pharmaceuticals, Inc. (b) - 38,475 38,475
318,000 - 318,000 Carnival Corp. 12,634,140 - 12,634,140
- 1,350 1,350 Charter One Financial, Inc. - 46,643 46,643
- 700 700 ChevronTexaco Corp. - 60,473 60,473
1,306,520 - 1,306,520 Cisco Systems, Inc. (b) 31,735,371 - 31,735,371
- 1,600 1,600 Citigroup, Inc. - 77,664 77,664
- 950 950 City National Corp. - 59,014 59,014
285,900 - 285,900 Colgate-Palmolive Co. 14,309,295 - 14,309,295
- 1,300 1,300 Comcast Corp. Special Class A (b) - 40,664 40,664
240,000 - 240,000 Comerica, Inc. 13,454,400 - 13,454,400
- 1,200 1,200 DaVita, Inc. (b) - 46,800 46,800
373,000 - 373,000 Dell, Inc. (b) 12,667,080 - 12,667,080
- 1,500 1,500 Donnelley (R.H.) Corp. (b) - 59,760 59,760
344,000 - 344,000 EchoStar Communications Corp. Class A (b) 11,696,000 - 11,696,000
- 1,000 1,000 Edwards Lifesciences Corp. (b) - 30,080 30,080
- 1,050 1,050 Emerson Electric Co. - 67,987 67,987
- 750 750 Entergy Corp. - 42,847 42,847
- 2,800 2,800 Exxon Mobil Corp. - 114,800 114,800
176,000 - 176,000 Fannie Mae 13,210,560 - 13,210,560
- 1,000 1,000 First Data Corp. - 41,090 41,090
262,000 - 262,000 Forest Laboratories, Inc. (b) 16,191,600 - 16,191,600
485,300 - 485,300 Fox Entertainment Group, Inc. Class A (b) 14,146,495 - 14,146,495
67,290 - 67,290 Genentech, Inc. (b) 6,296,325 - 6,296,325
- 2,050 2,050 General Electric Co. (c) - 63,509 63,509
- 2,600 2,600 GlobalSantaFe Corp. - 64,558 64,558
119,000 - 119,000 Harley-Davidson, Inc. 5,656,070 - 5,656,070
- 700 700 Hartford Financial Services Group, Inc. (The) - 41,321 41,321
1,085,000 - 1,085,000 Hewlett-Packard Co. 24,922,450 - 24,922,450
- 2,750 2,750 Home Depot, Inc. (The) - 97,598 97,598
555,030 - 555,030 Intel Corp. 17,871,966 - 17,871,966
- 1,104 1,104 International Business Machines Corp. - 102,319 102,319
- 1,650 1,650 Iron Mountain, Inc. (b) - 65,241 65,241
- 900 900 ITT Industries, Inc. - 66,789 66,789
233,520 1,200 234,720 Johnson & Johnson 12,063,643 61,992 12,125,635
- 3,950 3,950 Kroger Co. (The) (b) - 73,114 73,114
- 2,550 2,550 Laboratory Corporation of America Holdings (b) - 94,223 94,223
- 1,050 1,050 Lear Corp. - 64,396 64,396
- 550 550 Lehman Brothers Holdings, Inc. - 42,471 42,471
250,900 - 250,900 Lowe's Cos., Inc. 13,897,351 - 13,897,351
- 2,200 2,200 Mandalay Resort Group - 98,384 98,384
276,000 900 276,900 Marsh & McLennan Cos., Inc. 13,217,640 43,101 13,260,741
- 4,900 4,900 Mattel, Inc. - 94,423 94,423
601,500 - 601,500 MBNA Corp. 14,947,275 - 14,947,275
- 1,800 1,800 MCI, Inc. (b) - 42,390 42,390
510,920 - 510,920 Medtronic, Inc. 24,835,821 - 24,835,821
- 1,250 1,250 MetLife, Inc. - 42,088 42,088
871,000 4,800 875,800 Microsoft Corp. 23,987,340 132,192 24,119,532
- 500 500 Mohawk Industries, Inc. (b) - 35,270 35,270
446,000 - 446,000 Motorola, Inc. 6,275,220 - 6,275,220
- 1,700 1,700 NBTY, Inc. (b) - 45,662 45,662
- 1,250 1,250 NIKE, Inc. Class B - 85,575 85,575
1,647,270 6,300 1,653,570 Oracle Corp. (b) 21,743,964 83,160 21,827,124
- 4,300 4,300 Pepsi Bottling Group, Inc. (The) - 103,974 103,974
447,000 1,450 448,450 PepsiCo, Inc. 20,839,140 67,599 20,906,739
741,807 3,450 745,257 Pfizer, Inc. 26,208,042 121,888 26,329,930
- 2,550 2,550 Polo Ralph Lauren Corp. - 73,440 73,440
1
Phoenix-Engemann Capital Growth Series/Phoenix-Lazard U.S. Multi-Cap Series
Pro Forma Combined Schedule of Investments
December 31, 2003 (Unaudited) (Continued)
Shares or Par Value Value
========= ========= ========== ============================================== ============ ========== =============
Phoenix- Phoenix- Phoenix- Phoenix-
Engemann Lazard Engemann Lazard
Capital U.S. Pro Forma Capital U.S. Pro-Forma
Growth Multi-Cap Combined Growth Multi-Cap Combined
Series Series Portfolios DESCRIPTION Series Series Portfolios
========= ========= ========== ============================================== ============ ========== =============
133,000 - 133,000 QUALCOMM, Inc. $ 7,172,690 $ - $ 7,172,690
- 3,850 3,850 Republic Services, Inc. - 98,675 98,675
- 1,400 1,400 Rohm and Haas Co. - 59,794 59,794
- 3,650 3,650 Schering-Plough Corp. - 63,474 63,474
512,400 - 512,400 SLM Corp. 19,307,232 - 19,307,232
- 1,300 1,300 SouthTrust Corp. - 42,549 42,549
619,000 - 619,000 Staples, Inc. (b) 16,898,700 - 16,898,700
205,000 - 205,000 Starbucks Corp. (b) 6,777,300 - 6,777,300
371,000 - 371,000 State Street Corp. 19,321,680 - 19,321,680
- 225 225 Student Loan Corp. (The) - 32,850 32,850
642,000 - 642,000 Sysco Corp. 23,901,660 - 23,901,660
- 1,300 1,300 Target Corp. - 49,920 49,920
206,620 - 206,620 Texas Instruments, Inc. 6,070,496 - 6,070,496
- 2,700 2,700 TJX Cos., Inc. (The) - 59,535 59,535
- 5,800 5,800 Toys "R" Us, Inc. (b) - 73,312 73,312
128,000 - 128,000 Tribune Co. 6,604,800 - 6,604,800
226,100 - 226,100 United Parcel Service, Inc. Class B 16,855,755 - 16,855,755
- 600 600 United Technologies Corp. - 56,862 56,862
157,450 - 157,450 Univision Communications, Inc. Class A (b) 6,249,190 - 6,249,190
161,079 - 161,079 Viacom, Inc. Class B 7,148,686 - 7,148,686
313,250 - 313,250 Wal-Mart Stores, Inc. 16,617,913 - 16,617,913
- 2,800 2,800 WebMD Corp. (b) - 25,172 25,172
313,000 1,300 314,300 Wells Fargo & Co. 18,432,570 76,557 18,509,127
257,000 - 257,000 Wyeth 10,909,650 - 10,909,650
- 1,700 1,700 Yum! Brands, Inc. (b) - 58,480 58,480
------------- ----------- -------------
TOTAL COMMON STOCKS 612,539,961 4,017,951 616,557,912
FOREIGN COMMON STOCKS--1.1%
- 3,850 3,850 Accenture Ltd. Class A (b) - 101,332 101,332
120,000 - 120,000 Teva Pharmaceutical Industries Ltd. ADR 6,805,200 - 6,805,200
- 550 550 XL Capital Ltd. Class A - 42,653 42,653
------------- ----------- -------------
TOTAL FOREIGN COMMON STOCKS 6,805,200 143,985 6,949,185
AGENCY NON MORTGAGE-BACKED SECURITIES--0.8%
2,500,000 - 2,500,000 Fannie Mae 1.03%, 7/26/04 2,497,510 - 2,497,510
2,500,000 - 2,500,000 Fannie Mae 1.54%, 12/24/04 2,500,723 - 2,500,723
------------- ----------- -------------
TOTAL AGENCY NON MORTGAGE-BACKED SECURITIES 4,998,233 - 4,998,233
SHORT-TERM OBLIGATIONS--1.3%
3,365,000 - 3,365,000 ABSC Capital Corp. 1.12%, 1/12/04 3,363,848 - 3,363,848
4,845,000 - 4,845,000 FHLB Discount Note 0.75%, 1/2/04 4,844,899 - 4,844,899
- 125,000 125,000 U.S. Treasury Bill 0.80%, 2/5/04 - 124,903 124,903
------------- ----------- -------------
TOTAL SHORT-TERM OBLIGATIONS 8,208,747 124,903 8,333,650
TOTAL INVESTMENTS--100.1% 632,552,141 4,286,839 636,838,980 (a)
(Identified cost $515,577,603, $3,613,557
and $519,191,160)
Other assets and liabilities, net---(0.1)% (527,581) (68,292) (595,873)
------------- ----------- -------------
NET ASSETS--100.0% $632,024,560 $4,218,547 $636,243,107
============= =========== =============
(a) Federal Income Tax Information: Net
unrealized appreciation of investment
securities is comprised of gross
appreciation of $123,528,026 and gross
depreciation of $6,089,808 for federal
income tax purposes. At December 31, 2003,
the aggregate cost of securities for
federal income tax purposes was
$519,400,762.
(b) Non income producing.
(c) All or a portion segregated as
collateral for long settlements.
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
2
Phoenix-Engemann Capital Growth Series/Phoenix-Lazard U.S. Multi-Cap Series
Pro Forma Combined Statement of Assets and Liabilities
December 31, 2003 (Unaudited)
================ ============== =========== ============
Phoenix-Engemann Phoenix-Lazard Pro Forma
Capital Growth U.S. Multi-Cap Adjustments Combined
Series Series Portfolios
================ ============== =========== ============
ASSETS
Investment securities at value
(Identified cost $515,577,603, $3,613,557 and $519,191,160) $ 632,552,141 $ 4,286,839 $636,838,980
Cash 3,692 52,488 56,180
Receivables
Investment securities sold - 45,075 45,075
Fund shares sold 149,413 356 149,769
Receivable from advisor - 13,933 13,933
Dividends and interest 767,296 3,312 770,608
Prepaid expenses 8,996 46 9,042
---------------- -------------- ------------ -----------
Total assets 633,481,538 4,402,049 - 637,883,587
---------------- -------------- ------------ -----------
LIABILITIES
Payables
Investment securities purchased - 130,543 130,543
Fund shares repurchased 909,967 920 910,887
Investment advisory fee 347,572 - 347,572
Administration fee 40,518 264 40,782
Financial agent fee 35,178 3,399 38,577
Printing fee 74,460 11,357 85,817
Professional fee 28,373 30,042 58,415
Trustees' fee 2,360 2,360 4,720
Accrued expenses 18,550 4,617 23,167
---------------- -------------- ------------ -----------
Total liabilities 1,456,978 183,502 - 1,640,480
---------------- -------------- ------------ -----------
NET ASSETS $ 632,024,560 $ 4,218,547 - $636,243,107
================ ============== ============ ===========
Net Assets Consist of:
Capital paid in on shares of beneficial interest $ 899,108,542 $ 3,513,251 $ 32,014 $902,653,807
Undistributed net investment income 416,400 - - 416,400
Accumulated net realized gain (loss) (384,474,920) 32,014 (32,014)(b) (384,474,920)
Net unrealized appreciation 116,974,538 673,282 - 117,647,820
---------------- -------------- ------------ -----------
Net Assets $ 632,024,560 $ 4,218,547 $ - $636,243,107
================ ============== ============ ===========
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization 46,164,954 334,365 (26,217)(a) 46,473,102
Net assets $ 632,024,560 $ 4,218,547 $636,243,107
Net asset value per share $ 13.69 $ 12.62 $ 13.69
(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.
3
Phoenix-Engemann Capital Growth Series/Phoenix-Lazard U.S. Multi-Cap Series
Pro Forma Combined Statement of Operations
January 1, 2003 through December 31, 2003 (Unaudited)
================ ============== =========== =============
Phoenix-Engemann Phoenix-Lazard Pro Forma
Capital Growth U.S. Multi-Cap Adjustments Combined
Series Series Portfolios
================ ============== =========== =============
INVESTMENT INCOME
Interest $ 264,315 $ 945 $ - $ 265,260
Dividends 5,169,619 43,104 - 5,212,723
Foreign taxes withheld (5,074) (148) - (5,222)
--------------- --------------- ---------- ------------
Total investment income 5,428,860 43,901 - 5,472,761
--------------- --------------- ---------- ------------
EXPENSES
Investment advisory fee 3,919,356 23,856 (5,963) 3,937,249
Financial agent fee 408,864 38,470 (18,982) 428,352
Administration fee 454,859 (a) 2,296 (a) 17,811 (a) 474,966
Printing 95,504 20,056 4,435 119,995
Professional 24,942 31,674 (25,116) 31,500
Custodian 71,408 8,093 14,224 93,725
Trustees 5,931 5,931 (5,195) 6,667
Miscellaneous 23,333 10,340 (16,452) 17,221
--------------- --------------- ---------- ------------
Total expenses 5,004,197 140,716 (35,238) 5,109,675
Custodian fees paid indirectly (212) (14) - (226)
Less expenses borne by investment advisor - (112,374) 112,374 -
--------------- --------------- ---------- ------------
Net expenses 5,003,985 28,328 77,136 5,109,449
--------------- --------------- ---------- ------------
NET INVESTMENT INCOME (LOSS) 424,875 15,573 (77,136) 363,312
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on securities (6,155,044) 152,596 - (6,002,448)
Net change in unrealized appreciation (depreciation)
on investments 144,496,915 628,096 - 145,125,011
--------------- --------------- ---------- ------------
Net gain (loss) on investments 138,341,871 780,692 - 139,122,563
--------------- --------------- ---------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 138,766,746 $ 796,265 $ (77,136) $ 139,485,875
=============== =============== ========== ============
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-Engemann Capital Growth Series are based on the
expense schedule which became effective 2/29/04.
See Notes to Pro Forma Financial Statements.
4
PHOENIX-ENGEMANN CAPITAL GROWTH SERIES/PHOENIX-LAZARD U.S. MULTI-CAP 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-Lazard U.S.
Multi-Cap Series ("Multi-Cap") into the Phoenix-Engemann Capital Growth Series
("Capital Growth"). 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 Multi-Cap to Capital Growth and the
subsequent liquidation of Multi-Cap. The accounting survivor in the proposed
merger will be Capital Growth. This is because the Surviving Series will invest
in a style that is similar to the way in which Capital Growth is currently
operated (including hedging and investment in debt securities). Additionally,
Capital Growth has a significantly larger asset base than Multi-Cap.
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.
Multi-Cap and Capital Growth are both, 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 Capital Growth 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 Multi-Cap of $4,218,547 and the net asset value of Capital Growth of
$13.69. 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 Capital Growth
which became effective February 29, 2004, the actual expenses of Multi-Cap 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 Fund based on the fee schedule in
effect for Capital Growth 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
Phoenix-Engemann Phoenix-Lazard
Capital Growth Series U.S. Multi-Cap Series
2005 $30,157 --
2006 $590,466 --
2007 $5,141,805 --
2008 $11,718,126 --
2009 $287,550,532 --
2010 $73,263,809 --
2011 $5,973,373 --
Total $384,268,268 --
In addition, the Series have recognized post-October losses as follows:
Surviving Series Phoenix-Engemann Capital Growth Series $0
Merging Series Phoenix-Lazard U.S. Multi-Cap Series $8,434
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.
C-1
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.
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.
C-2
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.
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.
C-3
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.
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) Agreement and Plan of Reorganization (included as Appendix A 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.
C-4
(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 Form
N-14 (File No. 333-111961) on January 16, 2004.
(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) Global Custody Agreement between Registrant and The Chase Manhattan
Bank, NA effective May 1, 1990, covering the International Series,
filed with Post-Effective Amendment No. 4 on March 13, 1990 and filed
via Edgar with Post-Effective Amendment No. 20 (File No. 033-05033) on
April 29, 1997.
(b) Amendment to Global Custody Agreement between Registrant and The Chase
Manhattan Bank, NA effective May 1, 1992, covering International, Money
Market, Growth, Bond, Total Return and Balanced 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.
(10) Not Applicable.
(11) Opinion and Consent of Matthew A. Swendiman, Esq., with respect to the
legality of the shares being issued, filed herewith.
(12) 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.
(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.
C-5
(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 Form N-14 (File No. 333-111961) on January 16, 2004.
(f) Third Amendment to Financial Agent Agreement between Registrant and
Phoenix Equity Planning Corporation effective October 29, 2001, filed
via EDGAR with Form N-14 (File No. 333-111961) on January 16, 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 Form N-14 (File No. 333-111961) on January 16, 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. 333-116763) 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) (1) 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. 333-116763) on June 23, 2004.
(j) (2) 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.
(14) Consent of PricewaterhouseCoopers LLP, filed herewith.
(15) Not Applicable.
(16) Power of Attorney, filed via EDGAR with Form N-14 (Form No. 333-116763) on
June 23, 2004.
(17) (a) Form of Voting Instructions Card and Proxy Card for Phoenix-Lazard U.S.
Multi-Cap Series, filed via EDGAR with Form N-14 (Form No. 333-116763)
on June 23, 2004.
(b) 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 (Form No. 33-05033) on July 7, 2004 and incorporated
by reference.
C-6
- ------------------
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 (Form No.
333-116763).
S-2
INDEX TO EXHIBITS
-----------------
(11) Opinion and Consent
(14) Consent of PricewaterhouseCoopers LLP