<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 17, 2000
REGISTRATION NO. 333-46798
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE MONY GROUP INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3841 13-3976138
(State or Other Jurisdiction of (Primary Standard Industrial (IRS Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
1740 BROADWAY
NEW YORK, NEW YORK 10019
(212) 708-2000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
------------------------
BART SCHWARTZ, ESQ.
THE MONY GROUP INC.
1740 BROADWAY
NEW YORK, NEW YORK 10019
(212) 708-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
COPIES TO:
<TABLE>
<S> <C>
JONATHAN L. FREEDMAN, ESQ. CRAIG M. WASSERMAN, ESQ.
DEWEY BALLANTINE LLP WACHTELL, LIPTON, ROSEN & KATZ
1301 AVENUE OF THE AMERICAS 51 WEST 52ND STREET
NEW YORK, NEW YORK 10019-1035 NEW YORK, NEW YORK 10019
(212) 259-8000 (212) 403-1000
WILLIAM H. CUDDY, ESQ. LEE G. KUCKRO, ESQ.
DAY, BERRY & HOWARD LLP EXECUTIVE VICE PRESIDENT
CITYPLACE I AND GENERAL COUNSEL
HARTFORD, CONNECTICUT 06103-3499 THE ADVEST GROUP, INC.
(860) 275-0100 90 STATE HOUSE SQUARE
HARTFORD, CONNECTICUT 06103
(860) 509-1000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"Securities Act"), check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
------------------------
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 2
[Advest Logo]
Dear Stockholders: October 19, 2000
We are pleased to inform you that the Board of Directors of The Advest
Group, Inc. has approved the acquisition of Advest by The MONY Group Inc. The
acquisition, which will be accomplished by the merger of Advest into a
subsidiary of MONY, will allow Advest and its clients to have access to the
resources of a premier financial services firm. MONY's financial strength and
technological resources will significantly enhance opportunities to build
Advest's brand, grow our network, attract more customers, and better serve our
existing clients. Following the merger, the business of Advest will be operated
as a wholly owned subsidiary of MONY.
The amount that you will receive for the Advest shares you hold will be
fixed prior to the transaction closing date using the 10-day average closing
price of MONY shares at that time. Assuming an average price of $35.00 per MONY
share, the transaction value per Advest share will be $31 and the aggregate
transaction value would be about $275 million.
<TABLE>
<CAPTION>
If the average closing price Then the transaction value per
per MONY share is Advest share will be
<S> <C>
$24.50 $27.71
28.00 29.45
31.50 29.45
35.00 31.00
38.50 32.55
42.00 32.55
45.50 33.97
</TABLE>
As a result of the proposed merger, you may elect to receive for each share
of Advest common stock you own, cash, shares of MONY common stock, or a
combination of cash and MONY shares. These elections will then be adjusted so
that the aggregate merger consideration consists of 49.9% cash and 50.1% MONY
common stock.
The closing price of MONY common stock on October 13, 2000 was $39.13 per
share. Since the price of MONY common stock will fluctuate, we cannot assure you
as to what the price of MONY common stock will be at any time. We expect the
merger to be, in general, tax-free to Advest stockholders, except for the
receipt of cash for shares of Advest common stock and in lieu of fractional MONY
shares.
Advest has scheduled a special meeting of its stockholders to be held on
November 20, 2000 to consider and vote on the merger and the merger agreement.
We cannot complete the merger without the approval of the holders of a majority
of the outstanding shares of Advest common stock. THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE MERGER.
This document provides detailed information about the transaction we are
proposing, and it includes the merger agreement as an appendix. WE ENCOURAGE YOU
TO READ THE ENTIRE DOCUMENT CAREFULLY. You can find additional information about
Advest and MONY from documents filed with the Securities and Exchange
Commission.
YOUR VOTE IS VERY IMPORTANT. PLEASE PROMPTLY COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY CARD IN THE PREPAID ENVELOPE ENCLOSED TO ENSURE THAT
YOUR SHARES WILL BE REPRESENTED AT THE SPECIAL MEETING. IF YOU DO NOT VOTE AT
ALL, YOU WILL, IN EFFECT, VOTE AGAINST THE MERGER.
The common stock of both Advest and MONY are listed on the New York Stock
Exchange. Advest is listed under the symbol "ADV," and MONY is listed under the
symbol "MNY."
We look forward to the successful combination of Advest and MONY.
<PAGE> 3
ON BEHALF OF THE BOARD OF DIRECTORS OF ADVEST, WE URGE YOU TO VOTE "FOR"
APPROVAL OF THE MERGER AND THE RELATED MERGER AGREEMENT.
Sincerely,
/s/ Grant W. Kurtz
Grant W. Kurtz
President, Chief Executive Officer and
Director
See "Risk Factors" beginning on page 15 for a discussion of risks which
should be considered by stockholders with respect to the merger.
Neither the Securities and Exchange Commission nor any state securities
regulators have approved or disapproved of the MONY common stock to be issued in
the merger or determined if this proxy statement/prospectus is accurate or
adequate. Any representation to the contrary is a criminal offense.
This proxy statement/prospectus is dated October 17, 2000 and was first mailed
to stockholders on or about October 19, 2000.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED
ENVELOPE. THE ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
IF YOU ATTEND THE SPECIAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN
IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
FAILURE TO RETURN A PROPERLY EXECUTED PROXY CARD OR TO VOTE AT THE MEETING
WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE MERGER.
THE BOARD OF DIRECTORS OF ADVEST UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
APPROVAL OF THE MERGER AND THE RELATED MERGER AGREEMENT.
<PAGE> 4
[Advest Logo]
THE ADVEST GROUP, INC.
90 STATE HOUSE SQUARE
HARTFORD, CONNECTICUT 06103
------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 20, 2000
------------------------
Dear Stockholder:
You are cordially invited to attend a special meeting of stockholders of
The Advest Group, Inc. to be held at the Court Room of the Old State House, 800
Main Street, Hartford, Connecticut 06103, on the 20th day of November, 2000, at
4:30 p.m., local time, for the following purposes:
Item 1. To consider and vote upon a proposal to approve and adopt the
Agreement and Plan of Merger, dated as of August 23, 2000, among The MONY
Group Inc., a Delaware corporation, MONY Acquisition Corp., a Delaware
corporation, and The Advest Group, Inc., and the transactions contemplated
thereby, including the merger of Advest with and into MONY Acquisition
Corp. upon the terms and subject to the conditions set forth in the merger
agreement, as more fully described in the enclosed Proxy
Statement/Prospectus.
Item 2. To transact any other business as may properly be brought
before the special meeting or any adjournments or postponements of the
meeting.
You are entitled to assert dissenters' rights with respect to the merger
under Section 262 of the Delaware General Corporation Law.
We have fixed the close of business on October 16, 2000 as the record date
for determining those stockholders entitled to vote at the special meeting and
any adjournments or postponements of the special meeting. Accordingly, only
stockholders of record on that date are entitled to notice of, and to vote at,
the special meeting and any adjournments or postponements of the special
meeting.
YOUR VOTE IS VERY IMPORTANT. IF YOU DO NOT VOTE AT ALL, YOU WILL, IN
EFFECT, VOTE AGAINST THE MERGER. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE
MEETING, WE REQUEST THAT YOU DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT
PROMPTLY IN THE ADDRESSED ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING YOU MAY
REVOKE YOUR PROXY AND VOTE IN PERSON.
By Order of the Board of Directors,
/s/ Lee G. Kuckro
Lee G. Kuckro
Secretary
<PAGE> 5
REFERENCES TO ADDITIONAL INFORMATION
You may already have been sent some of the documents incorporated by
reference, but you can obtain any of them from MONY or Advest, as appropriate,
or the SEC. Documents incorporated by reference are available from MONY or
Advest, as appropriate, without charge, excluding all exhibits unless an exhibit
has been specifically incorporated by reference in this document. Stockholders
may obtain documents incorporated by reference in this document by MONY by
requesting them in writing or by telephone at the following address:
The MONY Group Inc.
1740 Broadway
New York, New York 10019
Attention: Jay A. Davis
Tel.: (212) 708-2690
Stockholders may obtain documents incorporated by reference in this
document by Advest by requesting them in writing or by telephone at the
following address:
The Advest Group, Inc.
90 State House Square
Hartford, Connecticut 06103
Attention: Investor Services Department
Tel.: (877) 380-0731
If you would like to request documents from MONY or Advest, please do so by
November 13, 2000 in order to receive them before the special meeting. MONY or
Advest will send requested documents by first-class mail within one business day
of receiving the request.
You should rely only on the information contained or incorporated by
reference in this document to vote on the merger agreement proposal. We have not
authorized anyone to provide you with information that is different from what is
contained in this document. This document is dated October 17, 2000. You should
not assume that the information contained in this document is accurate as of any
date other than this date, and neither the mailing of this document to
stockholders nor the issuance of MONY common shares in the merger shall create
any implication to the contrary.
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<S> <C>
QUESTIONS AND ANSWERS ABOUT THE MERGER...................... 1
SUMMARY..................................................... 3
The Companies............................................... 3
The Merger.................................................. 3
MARKET PRICE AND DIVIDEND INFORMATION....................... 7
Recent Closing Prices....................................... 7
Number of Stockholders...................................... 8
SELECTED CONSOLIDATED FINANCIAL DATA........................ 9
Comparative Per Share Information........................... 13
RISK FACTORS................................................ 15
RISKS WITH RESPECT TO THE MERGER............................ 15
The Value of the Consideration You Receive in the Merger
Depends on the Price of MONY Common Stock................. 15
Failure of MONY and Advest to Work Together Could Have a
Material Adverse Effect on MONY........................... 15
There Is Uncertainty as to the Retention of Key Advest
Personnel................................................. 15
The Termination Fee, Stock Option Agreement and Support
Agreement Could Make a Competing Takeover Proposal More
Difficult and Expensive................................... 15
The Interests of Advest Directors and Officers in the Merger
May be Different from the Interests of Other
Stockholders.............................................. 16
You May Not Receive the Amount of Cash or Stock That You
Elect to Receive in the Merger............................ 16
RISKS WITH RESPECT TO MONY.................................. 16
Dividends and Debt Service Payments May be Affected by
Limitations Imposed on MONY Life Insurance Company........ 16
The Decline and Expiration of Payments and Income Related to
MONY's Group Pension Business Transferred to AEGON May
Reduce its Profits........................................ 17
Changes in Interest Rates May Significantly Affect MONY's
Profitability............................................. 17
The Value of MONY's Investment Portfolio Will Fluctuate..... 17
Writedowns of Fixed Maturity Securities May Adversely Affect
MONY's Profitability...................................... 18
Prepayment of MONY's Mortgage Backed Securities May
Adversely Affect MONY's Profitability..................... 18
General Market Conditions May Adversely Affect MONY's
Investments in Limited Partnerships....................... 18
Fluctuations in Market Value of Separate Account Assets May
Result in Fluctuations in MONY's Revenue from Policy
Charges................................................... 18
Writedowns of Real Estate Held for Investment Would Reduce
MONY's Net Income......................................... 18
Increases in Valuation Allowances Would Reduce MONY's Net
Income.................................................... 19
Any Future Sales of Real Estate Could Result in GAAP or
Statutory Losses.......................................... 19
MONY May be Adversely Affected by the Decline in Value of
its Commercial Mortgage Loan Investments.................. 19
The Expiration of Surrender Penalties with Respect to Some
of MONY's Annuities Could Result in Surrenders Which May
Reduce MONY's Profits..................................... 19
MONY May be Required to Add Assets to the Closed Block in
the Event that the Assets Therein are not Sufficient to
Pay Guaranteed Benefits................................... 19
</TABLE>
i
<PAGE> 7
<TABLE>
<S> <C>
Litigation Challenging the New York Superintendent's Order
Approving the Plan of Demutualization May Have a Material
Adverse Effect on MONY.................................... 20
Litigation with Respect to MONY's Sales Practices May Affect
MONY's Profitability...................................... 21
Variations in Claims Experience Will Affect MONY's Results
from Period to Period..................................... 22
MONY is Highly Regulated and that Regulation May Limit
MONY's Freedom of Action.................................. 22
MONY May Be Unable to Attract and Retain Agents to Sell its
Products.................................................. 23
Competition from Non-Insurance Financial Services Companies
May Adversely Affect MONY's Business...................... 23
A Downgrade in MONY's Ratings May Adversely Affect MONY's
Ability to Market its Products and Retain its Current
Policyholders............................................. 23
Changes in Federal Income Taxation Could Adversely Impact
Sales of MONY's Insurance, Annuities and Investment
Products.................................................. 23
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS........... 24
THE SPECIAL MEETING......................................... 25
Matters to be Considered.................................... 25
Voting Rights; Votes Required for Approval.................. 25
Voting of Proxies........................................... 25
Voting and Election of Shares in the Advest Thrift Plan..... 27
Board Recommendation........................................ 28
THE MERGER.................................................. 29
Background of the Merger.................................... 29
Reasons for the Merger...................................... 30
Operations Following the Merger............................. 31
Opinion of Advest's Financial Advisor....................... 31
Summary of Analysis by Goldman Sachs........................ 33
Interests of Certain Persons in the Merger.................. 37
Accounting Treatment........................................ 42
Material Federal Income Tax Consequences.................... 42
Regulatory Matters.......................................... 44
Appraisal Rights............................................ 44
Stock Transfer Restriction Agreements....................... 46
Financing the Transaction................................... 46
BUSINESS OF MONY AND ADVEST................................. 46
PRINCIPAL PROVISIONS OF THE MERGER AGREEMENT................ 47
General..................................................... 47
Consideration to be Received in the Merger.................. 47
Exchange of Shares.......................................... 50
Election Procedure.......................................... 50
Representations and Warranties.............................. 51
Certain Covenants........................................... 53
Conditions to the Consummation of the Merger................ 56
Termination of the Merger Agreement......................... 57
Termination Fee............................................. 59
</TABLE>
ii
<PAGE> 8
<TABLE>
<S> <C>
Expenses.................................................... 60
Amendment................................................... 60
STOCK OPTION AGREEMENT...................................... 61
SUPPORT AGREEMENT........................................... 64
COMPARISON OF STOCKHOLDER RIGHTS............................ 65
Authorized Capital Stock.................................... 65
Size of Board of Directors.................................. 65
Filling Vacancies on the Board.............................. 65
Removal of Directors........................................ 66
Nomination of Directors for Election........................ 66
Stockholder Rights Plan..................................... 66
Stockholder Action Without a Meeting........................ 66
Calling Special Meetings of Stockholders.................... 67
Submission of Stockholder Proposals......................... 67
Dissenters' Appraisal Rights................................ 68
Limitations on Directors' Liability......................... 68
Amendment of Certificate of Incorporation................... 68
Amendment of Bylaws......................................... 69
Listing or Quotation of MONY Common Shares; Delisting of
Advest Common Stock....................................... 69
LEGAL MATTERS............................................... 70
EXPERTS..................................................... 70
FUTURE STOCKHOLDER PROPOSALS................................ 70
WHERE YOU CAN FIND MORE INFORMATION......................... 70
</TABLE>
LIST OF ANNEXES
Annex A -- Agreement and Plan of Merger
Annex B -- Stock Option Agreement
Annex C -- Support Agreement
Annex D -- Opinion of Goldman, Sachs & Co.
Annex E -- Section 262 of the Delaware General Corporation Law
iii
<PAGE> 9
QUESTIONS AND ANSWERS ABOUT THE MERGER
Q: WHAT DO I NEED TO DO NOW?
A: 1. After you have carefully read this proxy statement/prospectus, just
indicate on your proxy card how you want to vote, and sign and mail it in
the enclosed return envelope as soon as possible, so that your shares will
be represented at the special meeting. If you sign and send in your proxy
and do not indicate how you want to vote, your proxy will be counted as a
vote in favor of the merger. If you do not vote in favor of the merger or
you abstain, you will, in effect, vote against the merger.
2. Return your completed Form of Election, accompanied by your share
certificates, as soon as possible and in no event later than the election
deadline, to express your preference of consideration to be received in
exchange for your Advest common shares if the merger is completed. The Form
of Election may be sent to you under separate cover from the proxy card.
3. If you are a participant in the Advest Thrift Plan, your completed proxy
card and Form of Election will serve as your instructions to Webster Trust
Company, N.A. as independent fiduciary with regard to the voting and the
making of the cash and/or stock election with respect to the shares credited
to your account.
4. If you are a participant in the Advest Equity Plan, the Advest Key
Professionals Equity Plan or other Advest equity program (other than
options), or you have received a restricted stock or other stock-based award
from Advest, you should indicate on your proxy card how you want to vote.
However, you will not receive a Form of Election. Under the merger
agreement, you will receive a cash payment for 50% of your award, and the
remaining 50% of your award will be converted into an award of shares of
MONY stock, subject to the same vesting provisions as your original Advest
award.
The special meeting will take place on November 20, 2000 at 4:30 p.m., local
time, at the Court Room of the Old State House, 800 Main Street, Hartford,
Connecticut 06103. You may attend and vote your shares in person, even after
submitting the enclosed proxy card. In addition, you may take back your
proxy up to and including the day of the special meeting by following the
directions beginning on page 25 and either change your vote or attend the
special meeting and vote in person.
Q: IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER VOTE MY
SHARES FOR ME?
A: No. You should instruct your broker to vote your shares, following the
directions provided by your broker. Your failure to instruct your broker
will be the equivalent of voting against the proposed merger. You must also
instruct your broker as to the making of an election pursuant to the Form of
Election.
Q: WHAT WILL I RECEIVE IN THE MERGER?
A: The amount that you will receive for the Advest shares you hold will be
fixed five days prior to the merger closing date using the 10-day average
closing price of MONY shares at that time. Assuming an average price of
$35.00 per MONY share, then the transaction value per Advest share will be
$31 and the aggregate transaction value would be about $275 million.
<TABLE>
<CAPTION>
If the average closing price Then the transaction value
per MONY share is per Advest share will be
<S> <C>
$24.50 $27.71
28.00 29.45
31.50 29.45
35.00 31.00
38.50 32.55
42.00 32.55
45.50 33.97
</TABLE>
As a result of the proposed merger, you may elect to receive for each share
of Advest common stock you own, cash, shares of MONY common stock, or a
combination of cash and MONY shares. These elections will then be adjusted so
that the aggregate merger consideration consists of 49.9% cash and 50.1% MONY
common stock.
MONY will not issue fractional shares. Instead, you will receive cash for any
fractional share of MONY common stock owed to you based on the applicable
average closing price of a share of MONY common stock.
<PAGE> 10
Q: HOW DO I MAKE AN ELECTION TO RECEIVE MONY COMMON STOCK, CASH OR A
COMBINATION OF BOTH IN THE MERGER?
A: This proxy statement/prospectus is accompanied by a Form of Election and
Letter of Transmittal. You must submit a properly completed Form of Election
with your share certificates, or direct your broker to do so, before the
election deadline for your election to be valid. Holders of shares of Advest
restricted stock will not be entitled to make any election but will instead
receive the consideration described in this proxy statement/prospectus. See
"Election Procedure" for a more complete explanation of these procedures.
Q: CAN I CHANGE OR REVOKE MY ELECTION ONCE I HAVE MAILED MY SIGNED FORM OF
ELECTION?
A: You can change or revoke your election in writing at any time prior to the
election deadline.
Q: WHAT ARE THE CONSEQUENCES IF I FAIL TO PROPERLY COMPLETE AND RETURN THE FORM
OF ELECTION?
A: If you fail to make a proper or timely election to receive cash and/or MONY
common stock for your Advest shares, you will receive cash and/or MONY
common stock based on the results of the adjustment provisions described
under "Allocation" in this proxy statement/prospectus and in the merger
agreement, as those provisions are applied based on the elections of other
Advest stockholders. The election deadline will be 5:00 p.m., New York City
time, on the second business day preceding the date that the merger is
consummated, which day will not be less than 20 days after the initial
mailing of the Form of Election. MONY and Advest will announce the date of
the election deadline by issuing a public announcement no less than 10 days
preceding the election deadline.
Q: WHEN DO YOU EXPECT THE MERGER TO BE COMPLETED?
A: We are working toward completing the merger as quickly as possible. We hope
to complete the merger by December 31, 2000.
Q: WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER TO ME?
A: The receipt of shares of MONY common stock in the merger generally will be
tax free to Advest stockholders for United States federal income tax
purposes, although Advest stockholders will generally pay tax on cash
received for shares of Advest common stock and cash in lieu of fractional
shares of MONY common stock. You are urged to review certain federal income
tax consequences to you in greater detail, see pages 42 through 44. However,
tax matters are complicated, and the tax consequences of the merger to you
will depend on the facts of your particular situation. Consequently, you are
also urged to consult your own tax advisor as to the specific tax
consequences to you of the merger, including the applicable federal, state,
local and foreign tax consequences.
Q: ARE THERE ANY RISKS ASSOCIATED WITH THE MERGER?
A: The merger does involve risks. For a discussion of certain risk factors you
should consider in evaluating the merger, see "Risk Factors," beginning on
page 15.
WHO CAN HELP ANSWER YOUR QUESTIONS
If you have more questions about the merger or would like additional
copies of the Proxy Statement/Prospectus you should contact:
Georgeson Shareholder Communications Inc.
17 State Street, 10th Floor
New York, New York 10004
Phone Number: (800) 223-2064
2
<PAGE> 11
SUMMARY
This summary contains selected information from this document and may not
contain all of the information that is important to you. To understand the
merger fully and for a more complete description of the legal terms of the
merger, you should read this entire document carefully, including the Annexes,
and the documents to which we refer. The SEC allows MONY and Advest to
"incorporate by reference" information into this document, which means that MONY
and Advest can disclose important information to you by referring you to another
document filed separately with the SEC. The information incorporated by
reference is deemed to be part of this document, except for any information
superseded by information in this document. The previously filed documents
contain important information about MONY and Advest and their financial
performance. A list of documents we incorporate by reference appears under the
heading "Where You Can Find More Information" on page 70.
THE COMPANIES
THE MONY GROUP INC.
1740 Broadway
New York, New York 10019
(212) 708-2000
MONY is a holding company which, through MONY Life Insurance Company and
its subsidiaries, is primarily engaged in the business of providing a wide range
of life insurance, annuity, and investment products to higher income
individuals, particularly family builders, pre-retirees, and small business
owners. MONY's products and services are primarily distributed through its
career agency sales force, as well as other complementary distribution channels
(including brokerage general agents, registered representatives, mutual fund
wholesalers and MONY's international sales force). MONY principally sells its
products in all 50 states of the United States, the District of Columbia, the
U.S. Virgin Islands, Guam and the Commonwealth of Puerto Rico. MONY currently
insures or provides financial services to more than one million people.
THE ADVEST GROUP, INC.
90 State House Square
Hartford, Connecticut 06103
(860) 509-1000
Advest is a financial services holding company engaged, with its operating
subsidiaries, in securities brokerage, trading, investment banking, asset
management, trust and other financial services. Advest operates primarily
through its broker-dealer subsidiary, Advest, Inc. Advest, Inc. provides
brokerage, investment banking, institutional sales and trading and asset
management services to retail and institutional investors through 97 sales
offices in 18 states and Washington, D.C. Advest, Inc. is a member of all major
securities exchanges in the United States and is registered with the Commodities
Futures Trading Commission as a commodity trading advisor and a futures
commission merchant. Other Advest subsidiaries include Advest Bank and Trust
Company, a federal savings bank, Boston Advisors, an investment advisor, and
Billings & Company, Inc., a real estate services company.
THE MERGER
WHAT ADVEST STOCKHOLDERS WILL RECEIVE IN THE MERGER
You may elect to receive for each Advest share you hold, subject to the
adjustment provisions described below, (1) a number of shares of MONY common
stock equal to the exchange ratio calculated from the formulas in the merger
agreement and this document, (2) an amount of cash equal to the product of the
exchange ratio and the applicable average price of MONY shares, or (3) a
combination of cash for a specified number of your Advest shares and MONY shares
for the remainder.
3
<PAGE> 12
The average price of MONY shares will be fixed five trading days prior to
the consummation of the merger using the average closing price of MONY's shares
for the ten consecutive trading days ending on that date.
The number of shares of your Advest common stock that will be converted
into the right to be exchanged for cash will be equal to the number of those
shares for which you have elected to receive the cash consideration (calculated
as described above), adjusted on a pro rata basis to make the aggregate number
of Advest shares to be converted into the right to receive cash in the merger
equal to 49.9% of the total number of Advest shares issued and outstanding
immediately prior to the closing of the merger. The number of shares of your
Advest common stock that will be converted into the right to be exchanged for
MONY shares will be equal to the number of those Advest shares for which you
have elected to receive the MONY stock consideration (calculated as described
above), adjusted on a pro rata basis to make the aggregate number of Advest
shares to be converted into the right to receive MONY shares in the merger equal
to 50.1% of the total number of Advest shares issued and outstanding immediately
prior to the closing of the merger.
If you fail to make a proper or timely election to receive either cash or
MONY common stock for any of your Advest shares, you will be deemed to have
indicated no preference as to the receipt of cash or MONY common stock and will
receive cash and/or MONY common stock based on the results of the pro rata
adjustment provisions described under "Allocation" in this proxy
statement/prospectus and in the merger agreement, as those provisions are
applied based on the elections of other Advest stockholders.
RECOMMENDATION TO STOCKHOLDERS (SEE PAGE 28)
Advest's board of directors believes that the merger is in your best
interests and unanimously recommends that you vote FOR the proposal to approve
and adopt the merger agreement and the merger.
OPINION OF FINANCIAL ADVISOR (SEE PAGE 31)
In connection with the merger, Advest's board of directors received a
written opinion, dated August 23, 2000, from its financial advisor, Goldman,
Sachs & Co. This opinion discusses the fairness from a financial point of view,
as of August 23, 2000, of the consideration to be received by Advest's
stockholders. WE HAVE ATTACHED THE FULL TEXT OF THIS OPINION AS ANNEX D TO THIS
DOCUMENT. THIS OPINION DESCRIBES THE PROCEDURES FOLLOWED, ASSUMPTIONS MADE,
MATTERS CONSIDERED AND LIMITATIONS ON THE REVIEW UNDERTAKEN IN CONNECTION WITH
THE OPINION. WE ENCOURAGE YOU TO READ AND CONSIDER THE OPINION IN ITS ENTIRETY.
THE OPINION IS DIRECTED TO ADVEST'S BOARD OF DIRECTORS AND DOES NOT CONSTITUTE A
RECOMMENDATION TO ANY STOCKHOLDER AS TO HOW THAT STOCKHOLDER SHOULD VOTE IN
CONNECTION WITH THE PROPOSED MERGER.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES (SEE PAGE 42)
The receipt of shares of MONY common stock in the merger generally will be
tax free to Advest stockholders for United States federal income tax purposes,
although Advest stockholders will generally pay tax on cash received for shares
of Advest common stock or in lieu of fractional shares of MONY common stock.
Tax matters are complicated, and the tax consequences of the merger to you
will depend on the facts of your particular situation. You are urged to consult
your own tax advisor as to the specific tax consequences to you of the merger,
including the applicable federal, state, local and foreign tax consequences.
ACCOUNTING TREATMENT (SEE PAGE 42)
The merger will be treated as a purchase for financial accounting purposes.
Therefore, the purchase price will be allocated to the assets and liabilities of
Advest based on their estimated fair market values at the date of acquisition,
and any excess of the purchase price over such fair market values will be
accounted for as goodwill.
4
<PAGE> 13
SHARE OWNERSHIP OF MANAGEMENT AND DIRECTORS
On October 13, 2000, directors and executive officers of Advest and their
affiliates owned and were entitled to vote 2,308,712 shares of Advest common
stock, or approximately 25.94% of the shares of Advest common stock outstanding
on the record date for the Advest special meeting.
Grant W. Kurtz, President, Chief Executive Officer and a director of
Advest, Allen Weintraub, Chairman of the Board of Directors of Advest, George A.
Boujoukos, Senior Executive Vice President and Director of Capital Markets of
Advest, and Peter R. Kellogg, a director of Advest, have entered into a support
agreement with MONY under which they have agreed to vote all of their Advest
shares in favor of the merger and merger agreement. As of September 27, 2000,
Messrs. Kurtz, Weintraub, Boujoukos and Kellogg beneficially owned and were
entitled to vote a total of 2,042,989 shares of Advest common stock, or
approximately 22.96% of the shares of Advest common stock outstanding on the
record date for the special meeting.
APPRAISAL RIGHTS (SEE PAGE 44)
Under the Delaware General Corporation Law, certain holders of Advest
common stock may have appraisal rights with respect to the merger. Holders of
Advest common stock who wish to exercise any appraisal rights they may have must
strictly comply with the rules governing the exercise of appraisal rights or may
lose these rights of appraisal. We describe the procedures for exercising
appraisal rights in this proxy statement/prospectus and we attach the provisions
of Delaware law that govern appraisal rights as Annex E to this proxy
statement/prospectus.
COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION (SEE PAGE 7)
MONY common shares are listed on the NYSE under the symbol "MNY." Shares of
Advest common stock are listed on the NYSE under the symbol "ADV." On August 23,
2000, the last full trading day prior to the public announcement of the proposed
merger, the last sale price per share of MONY common stock was $33.75 and the
last sale price per share of Advest common stock was $32.00. On September 22,
2000, the most recent date for which prices were practicably available prior to
the printing of this document, the last sale price per share of MONY common
stock was $39.06 and the last sale price per share of Advest common stock was
$31.25.
REGULATORY APPROVALS (SEE PAGE 44)
MONY and Advest each filed a Notification and Report Form under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the specified waiting
period was terminated on September 29, 2000. MONY and Advest also filed
applications with the Office of Thrift Supervision and the National Association
of Securities Dealers, Inc. on October 2, 2000, and on September 27, 2000,
respectively. On October 6, 2000, the National Association of Securities
Dealers, Inc. granted its approval of the merger. MONY and Advest intend to seek
any other approval and take any other action that may be required to effect the
merger.
INTERESTS OF ADVEST'S EXECUTIVE OFFICERS AND DIRECTORS IN THE MERGER (SEE PAGE
37)
Stockholders should note that a number of Advest directors and executive
officers may have interests in the merger that are different from, or in
addition to, the interests of the Advest stockholders generally.
CONDITIONS TO THE MERGER (SEE PAGE 56)
The consummation of the merger is subject to a number of conditions,
including:
- approval of the merger agreement by a majority of the Advest
stockholders;
- receipt of regulatory approvals and the absence of legal restraints;
- receipt of legal opinions as to the treatment of the merger as a
"reorganization" within the meaning of Section 368(a) of the Internal
Revenue Code and other related matters;
5
<PAGE> 14
- the employment and/or change of control agreements dated August 23, 2000
between MONY and a specified number of certain key Advest employees shall
be unamended and in full force and effect as of the consummation of the
merger;
- at the effective time of the merger, Advest and each of its material
subsidiaries shall meet the criteria of the Home Owners' Loan Act of 1933
and any criteria that the Office of Thrift Supervision deems necessary
for MONY to qualify as a "savings and loan holding company";
- the absence of any event or condition which would result in a material
adverse effect (as defined in the merger agreement) to Advest; and
- no more than 5% of Advest's common stock outstanding at the effective
time of the merger shall be entitled to appraisal rights and shall be
held by stockholders who have each properly exercised and perfected his
or her demand for appraisal rights under the Delaware General Corporation
Law.
TERMINATION OF THE MERGER AGREEMENT (SEE PAGE 57)
Advest and MONY can jointly agree to terminate the merger agreement at any
time before completing the merger. In addition, either company can terminate the
merger agreement if:
- the merger is not completed by February 28, 2001;
- a law or court order prohibits the merger;
- Advest's stockholders fail to approve the merger; or
- the other party materially breaches any of the representations or
warranties it made, which breach has had, or is reasonably likely to
have, a material adverse effect on the other party, or would cause the
conditions described in paragraph (a) of "Principal Provisions of the
Merger Agreement -- Conditions to the Consummation of the
Merger -- Additional Conditions to Obligations of MONY" not to be
satisfied, and that breach is not or cannot be cured within 30 days after
notice of the breach is given to the breaching party.
Advest can also terminate the merger agreement if Advest's board of
directors has determined that an alternative transaction with a third party is
superior to the merger.
MONY can terminate the merger agreement if Advest recommends an alternative
transaction to its stockholders or if Advest's board of directors withdraws its
recommendation of the merger proposal to its stockholders.
TERMINATION FEE AND EXPENSES (SEE PAGE 59)
Advest is obligated to pay MONY a termination fee of $10,000,000 if the
merger agreement is terminated under specified circumstances.
STOCK OPTION AGREEMENT (SEE PAGE 61)
Advest has granted MONY an option to purchase up to 19.9% of Advest's
outstanding shares at a purchase price of $31.00 per share exercisable under
certain circumstances. These circumstances include business combinations or
acquisition transactions involving Advest. In addition to the option to purchase
Advest common stock, MONY may, under certain circumstances, require Advest to
repurchase the option for an agreed upon cash price. Neither MONY nor Advest
knows of any event that has occurred as of the date of this proxy
statement/ prospectus that would allow MONY to exercise the option.
Advest agreed to grant the option in order to induce MONY to enter into the
merger agreement. The stock option agreement may have the effect of discouraging
offers by third parties to acquire Advest prior to the merger, even if such
persons were prepared to offer to pay consideration to the Advest stockholders
which has a higher current market price than the merger consideration.
SUPPORT AGREEMENT (SEE PAGE 64)
Certain stockholders of Advest holding in the aggregate approximately
22.96% of the outstanding shares of Advest common stock have entered into a
support agreement with MONY pursuant to which they have agreed, among other
things, to vote all of their shares of Advest common stock to approve and adopt
the merger agreement and in favor of the merger.
6
<PAGE> 15
MARKET PRICE AND DIVIDEND INFORMATION
MONY common stock is listed on the NYSE under the symbol "MNY" and Advest
common stock is listed on the NYSE under the symbol "ADV". The table below sets
forth, for the calendar quarters indicated, (1) the high and low sales prices
per share of MONY common stock as reported on the NYSE Composite Tape and the
high and low sales prices for Advest common stock as reported on the NYSE
Composite Tape and (2) the dividends declared for the MONY common stock and the
Advest common stock.
<TABLE>
<CAPTION>
MONY ADVEST
COMMON STOCK(1) COMMON STOCK
------------------------------ ---------------------------
HIGH LOW DIVIDENDS(2) HIGH LOW DIVIDENDS
------ ------ ------------ ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
1998:
First Quarter...................... N/A N/A N/A $25.50 $21.00 $0.04
Second Quarter..................... N/A N/A N/A $33.75 $24.50 $0.04
Third Quarter...................... N/A N/A N/A $32.00 $16.50 $0.04
Fourth Quarter..................... $32.50 $27.56 N/A $23.44 $14.13 $0.04
1999:
First Quarter...................... $31.44 $23.44 $0.10 $26.00 $18.19 $0.05
Second Quarter..................... $33.38 $23.25 $0.10 $22.19 $18.31 $0.05
Third Quarter...................... $33.81 $25.13 $0.10 $25.13 $17.50 $0.05
Fourth Quarter..................... $32.00 $25.50 $0.10 $20.56 $16.00 $0.05
2000:
First Quarter...................... $32.81 $26.25 (2) $20.13 $15.63 $0.06
Second Quarter..................... $38.44 $28.75 (2) $21.94 $16.88 $0.06
Third Quarter...................... $41.94 $32.38 (2) $33.94 $20.75 $0.06
Fourth Quarter (through October
13)............................. $42.50 $37.94 (2) $33.19 $30.50 N/A
</TABLE>
---------------
(1) MONY's initial public offering was on November 11, 1998.
(2) MONY has announced that, for periods following December 31, 1999, it will
declare annual, rather than quarterly, dividends, in amounts determined by
its board of directors.
RECENT CLOSING PRICES
The following table sets forth (1) the closing prices per share of MONY
common stock on the NYSE and Advest common stock on the NYSE on August 23, 2000,
the last trading day before announcement of the merger, and on October 13, 2000,
the latest practicable trading day before the printing of this proxy
statement/prospectus, and (2) the equivalent per share prices for Advest common
stock based on the MONY common stock prices:
<TABLE>
<CAPTION>
ADVEST
MONY STOCK ADVEST STOCK EQUIVALENT(1)
---------- ------------ -------------
<S> <C> <C> <C>
August 23, 2000.............................. $33.75 $32.00 $30.45
October 13, 2000............................. $39.13 $31.19 $32.55
</TABLE>
---------------
(1) Advest Equivalent is the value you would have received for each share of
Advest common stock you own if the merger had been completed and you had
exchanged your shares of Advest common stock for shares of MONY common stock
(or the equivalent value in cash) at an exchange ratio established pursuant
to the merger agreement, assuming that the applicable average price per
share of MONY common stock is the MONY stock price for the applicable dates
set forth in this table.
7
<PAGE> 16
Because the market price of MONY common stock is subject to fluctuation,
the market value of the shares of MONY common stock that holders of Advest
common stock will receive in the merger may increase or decrease prior to and
following the merger. The merger agreement contains provisions which address
certain market price fluctuations of MONY common stock prior to the merger by
adjusting within specified parameters the exchange ratio based upon MONY's
average share price. See "Principal Provisions of the Merger
Agreement -- Consideration to be Received in the Merger." ADVEST STOCKHOLDERS
ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR MONY COMMON STOCK AND ADVEST
COMMON STOCK. NO ASSURANCE CAN BE GIVEN AS TO THE FUTURE PRICES OR MARKETS FOR
MONY COMMON STOCK OR ADVEST COMMON STOCK.
NUMBER OF STOCKHOLDERS
As of the record date, there were 617 stockholders of record who held
shares of Advest common stock, as shown on the records of Advest's transfer
agent for such shares.
8
<PAGE> 17
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected consolidated financial information
of MONY. The selected consolidated financial information for each of the years
in the five year period ended December 31, 1999, and as of December 31, 1999,
1998, 1997 and 1996 has been derived from audited consolidated financial
statements of MONY. The selected consolidated financial information set forth
below for all other periods presented has been derived from unaudited
consolidated financial statements and includes all adjustments which MONY
considers necessary for a fair presentation of the consolidated financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles. The selected consolidated financial data
presented below may be different from that presented in MONY's audited
consolidated financial statements and unaudited interim condensed consolidated
financial statements as is described in Note 1 below. Operating results for the
six months ended June 30, 2000, are not necessarily indicative of the results
that may be expected for the entire year ending December 31, 2000. This
information is qualified in its entirety by, and should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" of MONY, and MONY's consolidated financial statements and the notes
thereto, which are incorporated by reference in this proxy statement/prospectus.
SELECTED CONSOLIDATED FINANCIAL DATA OF MONY
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AS OF AND FOR THE
SIX-MONTH PERIOD
ENDED JUNE 30, AS OF AND FOR THE YEAR ENDED DECEMBER 31,
--------------------- ---------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- --------- ---------
($ IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME STATEMENT
DATA: (1)(11)(12)
REVENUES:
Premiums...................... $ 341.5 $ 348.6 $ 717.1 $ 721.8 $ 838.6 $ 859.8 $ 875.9
Universal life and
investment-type product
policy fees................. 105.8 97.9 196.3 151.6 127.3 100.9 80.8
Net investment income......... 581.3 384.2 902.3 735.7 733.0 751.6 728.8
Net realized gains (losses) on
Investments(2).............. 9.7 76.3 125.1 171.1 72.1 75.9 16.2
Group Pension Profits(3)...... 18.2 26.3 63.0 56.8 60.0 59.5 61.7
Other income.................. 121.7 92.4 197.2 163.2 145.4 117.3 96.2
--------- --------- --------- --------- --------- --------- ---------
Total revenues.............. 1,178.2 1,025.7 2,201.0 2,000.2 1,976.4 1,965.0 1,859.6
Total benefits and
expenses.................. 894.5 862.7 1,818.4 1,706.0 1,788.7 1,864.5 1,797.8
--------- --------- --------- --------- --------- --------- ---------
Income before income taxes and
extraordinary item............ 283.7 163.0 382.6 294.2 187.7 100.5 61.8
Income tax expense(4)........... 97.7 55.6 132.0 103.0 57.3 44.0 21.4
--------- --------- --------- --------- --------- --------- ---------
Income before extraordinary
item.......................... 186.0 107.4 250.6 191.2 130.4 56.5 40.4
-- demutualization expense,
net........................... 36.7 -- 2.0 27.2 13.3 -- --
--------- --------- --------- --------- --------- --------- ---------
Net income...................... $ 149.3 $ 107.4 $ 248.6 $ 164.0 $ 117.1 $ 56.5 $ 40.4
========= ========= ========= ========= ========= ========= =========
Basic Earnings Per Share(5)..... 3.19 2.27 5.26 0.19 N/A N/A N/A
Diluted Earnings Per Share(5)... 3.14 2.25 5.20 0.18 N/A N/A N/A
Cash Dividends Per Common
Share......................... -- 0.20 0.40 -- N/A N/A N/A
CONSOLIDATED BALANCE SHEET
DATA:(1)(11)
Total assets(6)(7).............. $24,511.1 $24,814.0 $24,753.4 $24,958.2 $23,611.3 $22,143.5 $21,678.2
Total debt...................... $ 364.3 $ 352.6 $ 298.8 $ 375.4 $ 423.6 $ 422.7 $ 578.4
Total liabilities(8)(9)......... $22,595.0 $23,050.6 $22,927.9 $23,180.6 $22,290.7 $20,973.0 $20,504.3
Shareholders' equity(10)........ $ 1,916.1 $ 1,763.4 $ 1,825.5 $ 1,777.6 $ 1,320.6 $ 1,170.5 $ 1,173.9
</TABLE>
---------------
(1) The conversion of the predecessor to MONY Life Insurance Company to a stock
life insurance company and the establishment of a closed block in
connection with the conversion have significantly
9
<PAGE> 18
affected the presentation of our consolidated financial statements. The
most significant effects are as follows:
- The results of the policies included in the closed block are
reflected as a single line item in our statements of income, entitled
"Contribution from the Closed Block," whereas, prior to the
establishment of the closed block, the results of this business were
reported in various line items in our income statement, including
premiums, net investment income, net realized gains, benefits,
amortization of deferred policy acquisition costs, etc.
- The assets and liabilities allocated to the closed block are reported
separately in our balance sheet under the captions "Closed Block
Assets" and "Closed Block Liabilities," respectively.
To assist interested parties in analyzing our consolidated financial
results, the consolidated income statement information for the years ended
December 31, 1999 and 1998 and the six-month periods ended June 30, 2000
and 1999, present the individual components of the closed block activity
for such periods, combined on a line by line basis, with such activity
outside the closed block. This consolidated combined basis income statement
is provided to facilitate comparisons of current period results with that
of the other periods presented.
(2) Includes writedowns for impairment and net changes in valuation allowances
on real estate, mortgage loans and investment securities aggregating $10.8
million and $10.6 million for the six-month periods ended June 30, 2000 and
1999, respectively, and $23.5 million, $24.4 million, $76.0 million, $20.1
million and $54.3 million for the years ended December 31, 1999, 1998,
1997, 1996, and 1995, respectively.
(3) For a description of the group pension transaction, the group pension
profits and certain summary financial information relating thereto, refer
to Note 10 of the consolidated financial statements incorporated by
reference in this proxy statement/prospectus. Management believes that
group pension profits will decline in future periods consistent with the
continuing run-off of the underlying business until they terminate as of
December 31, 2002.
(4) Prior to November 16, 1998, MONY Life Insurance Company, as a mutual life
insurance company, was subject to the surplus tax imposed on mutual life
insurance companies under Section 809 of the Code. Section 809 requires
(and the surplus tax results from) the disallowance of a portion of a
mutual life insurance company's policyholder dividends as a deduction from
taxable income. There was no income tax expense related to the surplus tax
for the six-month periods ended June 30, 2000 and 1999. The income tax
expense amounts include $0.0 million, $0.0 million, $5.8 million, $12.8
million and $0.0 million of surplus tax for the years ended December 31,
1999, 1998, 1997, 1996, and 1995, respectively.
(5) Prior to its reorganization on November 16, 1998, MONY had no common stock
outstanding and, accordingly, did not report per share earnings. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." In accordance with GAAP, per share amounts presented for 1998
include only the results of operations for the period from November 16,
1998 (the effective date of our reorganization) through December 31, 1998.
On a pro forma basis, assuming the reorganization occurred January 1, 1998,
basic and diluted earnings per share would have been $4.05 and $3.99
respectively.
(6) Includes assets transferred in the group pension transaction of $4,972.2
million and $5,337.1 million at June 30, 2000 and 1999, respectively, and
$5,109.8 million, $5,751.8 million, $5,714.9 million, $5,627.6 million and
$5,992.8 million at December 31, 1999, 1998, 1997, 1996, and 1995,
respectively.
(7) Includes closed block assets of $6,157.3 million and $6,125.6 million at
June 30, 2000 and 1999, respectively, and $6,182.1 million and $6,161.2
million at December 31, 1999 and 1998, respectively.
(8) Includes liabilities transferred in the group pension transaction of
$4,984.4 million and $5,334.2 million at June 30, 2000 and 1999,
respectively, and $5,099.1 million, $5,678.5 million, $5,638.7 million,
$5,544.1 million and $5,855.7 million at December 31, 1999, 1998, 1997,
1996, and 1995, respectively.
(9) Includes closed block liabilities of $7,267.3 million and $7,249.1 million
at June 30, 2000 and 1999, respectively, and $7,303.3 million and $7,290.7
million at December 31, 1999 and 1998, respectively.
10
<PAGE> 19
(10) Shareholders' equity at December 31, 1998 includes approximately $248.7
million which represents the remaining net proceeds from MONY Group's
initial public offering after deducting cash used to pay cash to certain
eligible policyholders and cash used to fund policy credits given to
certain eligible policyholders in connection with MONY's demutualization.
(11) Prior to 1996, MONY, as a mutual life insurance company, prepared its
financial statements in conformity with accounting practices prescribed or
permitted by the New York Insurance Department, which accounting practices
were considered to be GAAP for mutual life insurance companies. As of
January 1, 1996, MONY adopted Financial Accounting Standards Board
Interpretation No. 40, Applicability of Generally Accepted Accounting
Principles to Mutual Life Insurance and Other Enterprises, and Statement of
Financial Accounting Standards No. 120, Accounting and Reporting by Mutual
Life Insurance Enterprises and by Insurance Enterprises for Certain Long
Duration Participating Policies. Interpretation No. 40 and Statement of
Financial Accounting Standards No. 120 require mutual life insurance
companies to adopt all applicable authoritative GAAP pronouncements in
their general purpose financial statements. Accordingly, the financial
information presented in the selected consolidated financial information
for periods prior to 1996 has been derived from financial information of
MONY which has been retroactively restated to reflect the adoption of all
applicable authoritative GAAP pronouncements. All such applicable
pronouncements were adopted as of the effective date originally specified
in each such pronouncement.
(12) The comparability of MONY's results of operations for the six-month periods
ended June 30, 2000 and 1999 and the years ended December 31, 1999 and 1998
with prior years is affected by the sale of MONY's disability income
business in December 1997.
MONY has previously announced that it anticipates that the transaction will
be accretive on a cash basis in 2001, the first full year after it closes and
that, with the amortization of goodwill required under the purchase accounting
method, the acquisition will be accretive on a GAAP reporting basis in 2002.
The National Association of Insurance Commissioners has adopted codified
statutory accounting practices which will constitute the primary source of
prescribed statutory accounting practices assuming formal adoption by the New
York Insurance Department. There can be no assurance as to whether the New York
Insurance Department will adopt the codification, either with or without changes
to the NAIC proposal. If adopted as proposed, the NAIC codification will change,
to some extent, current prescribed statutory practices and may result in changes
to the accounting practices that MONY uses to prepare the statutory financial
statements of its insurance subsidiaries. MONY has not finally determined the
impact of such codification on the statutory financial statements of its
insurance subsidiaries at this time. These changes, however, are likely to
affect the statutory surplus and risk-based capital of MONY's insurance
subsidiaries. The new rules will take effect on January 1, 2001. The new rules
will have no impact on MONY's GAAP financial statements.
11
<PAGE> 20
SELECTED CONSOLIDATED FINANCIAL DATA OF ADVEST
(IN THOUSANDS, EXCEPT PER-SHARE AND OTHER DATA)
The following table sets forth selected consolidated financial information
of Advest. The selected consolidated financial information for each of the years
in the five year period ended September 30, 1999, and as of September 30, 1999,
1998, 1997 and 1996 has been derived from audited consolidated financial
statements of Advest. The selected consolidated financial information set forth
below for all other periods presented has been derived from unaudited
consolidated financial statements and includes all normal recurring adjustments
deemed necessary by Advest management. You should not rely on the information
for the nine months ended June 30, 2000 as being indicative of the results
expected for the entire year. The information in the table is only a summary and
should be read with the full financial statements and related notes of Advest,
incorporated into this proxy statement/prospectus by reference. See "Where You
Can Find More Information."
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED JUNE 30, FOR THE YEARS ENDED SEPTEMBER 30,
----------------------- --------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS AND PERCENTAGES)
<S> <C> <C> <C> <C> <C> <C> <C>
Total revenues............... $ 316,355 $ 248,972 $ 335,238 $ 309,801 $275,204 $241,220 $209,772
Interest expense............. 44,235 24,342 34,965 31,341 23,799 19,513 17,613
---------- ---------- ---------- ---------- -------- -------- --------
Net revenues................. 272,120 224,630 300,273 278,460 251,405 221,707 192,159
Total non-interest
expenses................... 245,188 207,378 277,961 250,632 227,323 203,250 171,692
---------- ---------- ---------- ---------- -------- -------- --------
Income before taxes.......... 26,932 17,252 22,312 27,828 24,082 18,457 20,467
Provision for income taxes... 11,037 6,901 8,925 10,853 9,873 8,121 9,414
---------- ---------- ---------- ---------- -------- -------- --------
Income from continuing
operations................. 15,895 10,351 13,387 16,975 14,209 10,336 11,053
Income (loss) from
discontinued operations.... 294 603 877 977 723 924 (4,666)
Loss on sale of discontinued
operations................. -- (705) (713) -- -- -- --
---------- ---------- ---------- ---------- -------- -------- --------
Net income................... $ 16,189 $ 10,249 $ 13,551 $ 17,952 $ 14,932 $ 11,260 $ 6,387
========== ========== ========== ========== ======== ======== ========
Per share data
Basic earnings:
Income from continuing
operations............... $ 2.00 $ 1.29 $ 1.67 $ 2.08 $ 1.77 $ 1.26 $ 1.31
Income (loss) from
discontinued
operations............... 0.04 0.08 0.11 0.12 0.09 0.11 (0.55)
Loss on sale of
discontinued
operations............... -- (0.09) (0.09) -- -- -- --
---------- ---------- ---------- ---------- -------- -------- --------
Net income................. $ 2.04 $ 1.28 $ 1.69 $ 2.20 $ 1.86 $ 1.37 $ 0.76
========== ========== ========== ========== ======== ======== ========
Diluted earnings:
Income from continuing
operations............... $ 1.74 $ 1.12 $ 1.46 $ 1.82 $ 1.54 $ 1.09 $ 1.17
Income (loss) from
discontinued
operations............... 0.03 0.07 0.10 0.10 0.08 0.09 (0.45)
Loss on sale of
discontinued
operations............... -- (0.08) (0.08) -- -- -- --
---------- ---------- ---------- ---------- -------- -------- --------
Net income................. $ 1.77 $ 1.11 $ 1.48 $ 1.92 $ 1.62 $ 1.18 $ 0.72
========== ========== ========== ========== ======== ======== ========
Book value................... $ 16.57 $ 14.75 $ 15.14 $ 13.82 $ 12.24 $ 10.66 $ 9.52
Dividends.................... $ 0.17 $ 0.14 $ 0.19 $ 0.16 $ 0.09 -- --
Other data
Total assets............... $1,970,578 $1,550,853 $1,462,621 $1,061,116 $908,040 $779,109 $595,125
Shareholders' equity....... $ 147,161 $ 131,575 $ 135,136 $ 123,667 $105,653 $ 89,590 $ 79,818
Subordinated borrowings.... $ -- $ -- -- -- -- $ 20,552 $ 20,552
Long-term borrowings....... $ 20,976 $ 30,598 $ 30,526 $ 41,308 $ 41,321 $ 19,744 $ 17,240
Return on average equity... 14.9% 10.6% 10.5% 15.6% 15.4% 13.2% 8.3%
</TABLE>
12
<PAGE> 21
COMPARATIVE PER SHARE INFORMATION
The following table sets forth certain earnings, dividend and book value
per share data for MONY and Advest on an historical, pro forma, and equivalent
pro forma basis. The equivalent pro forma information for Advest does not take
into consideration value received by Advest stockholders with respect to the
cash portion of the purchase price (See "The Merger" for more information). The
interim historical, pro forma, and equivalent pro forma data, as well as the
year end pro forma and equivalent pro forma data is unaudited. The information
set forth below should be read in conjunction with the historical consolidated
financial statements of MONY and Advest, including the notes thereto,
incorporated by reference or appearing elsewhere in this proxy
statement/prospectus. See "Where You Can Find More Information."
<TABLE>
<CAPTION>
SIX MONTHS ENDED SIX MONTHS ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2000 MARCH 31, 2000 DECEMBER 31, 1999 SEPTEMBER 30, 1999
---------------- ---------------- ----------------- ------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
MONY
Income from continuing
operations:
Historical................... $ 3.91 N/A $ 5.24 N/A
Pro forma(4)................. $ 3.78 N/A $ 4.55 N/A
Dividends:(3)
Historical................... (4) N/A $ 0.40 N/A
Pro forma(2)................. (4) N/A $ 0.40 N/A
Book value:
Historical................... $40.26 N/A $38.18 N/A
Pro forma(4)................. $40.34 N/A $38.73 N/A
ADVEST
Income from continuing
operations:
Historical................... N/A $ 1.24 N/A $ 1.46
Equivalent pro forma(1)...... N/A $ 1.58 N/A $ 1.90
Dividends:
Historical................... N/A $ 0.11 N/A $ 0.19
Equivalent pro forma(1)...... N/A $ 0.00 N/A $ 0.18
Book value:
Historical................... N/A $16.14 N/A $15.14
Equivalent pro forma(1)...... N/A $16.81 N/A $16.14
</TABLE>
---------------
(1) Represents pro forma amounts for MONY multiplied by 50.1% (representing the
stock portion of the purchase price) of an assumed exchange ratio of MONY
common stock to be exchanged for each share of Advest common stock of
0.8333. This exchange ratio has been calculated based on an assumed average
price of MONY common stock for the ten consecutive trading days ending on
the fifth trading day prior to the consummation of the merger of $39.06 per
share (the latest reported sales price per share of MONY common stock on
September 22, 2000, the most recent practicable date prior to the printing
of this document). Assuming the average price of MONY common stock for the
ten consecutive trading days ending on the fifth trading day prior to the
consummation of the merger is $24.50 (the low end of the range illustrated
in "Questions and Answers About the Merger"), the Advest equivalent pro
forma income, dividends and book value per share will be $2.52, $0.23 and
$20.85, respectively, for the year ended September 30, 1999 and $2.08, $0.00
and $22.27, respectively, for the six months ended March 31, 2000. Assuming
the average price of MONY common stock for the ten consecutive trading days
ending on the fifth trading day prior to the consummation of the merger is
$45.50 (the high end of the range illustrated in "Questions and Answers
About the Merger"), the Advest equivalent pro forma income, dividends and
book value per share will be $1.72, $0.15 and $14.42, respectively, for the
year ended September 30, 1999 and $1.42, $0.00 and $15.25, respectively, for
the six months ended March 31, 2000.
(2) MONY's pro forma dividends are the same as MONY's historical dividends
because no change in dividend policy is expected as a result of the merger.
(3) MONY has announced that, for periods following December 31, 1999, it will
declare annual, rather than quarterly, dividends, in amounts determined by
its board of directors.
13
<PAGE> 22
(4) Pro forma amounts for MONY (i) assume that the merger was consummated at the
beginning of the periods indicated for income statement amounts, and at the
balance sheet date for balance sheet amounts, (ii) are based on the number
of shares of Advest common stock and other dilutive securities outstanding
as of June 30, 2000, (iii) combine Advest's results for the six months ended
March 31, 2000 and the fiscal year ended September 30, 1999, with MONY's
results for the six months ended June 30, 2000 and the calendar year ended
December 31, 1999, respectively, and (iv) assume that the average price of
MONY common stock for the ten consecutive trading days ending on the fifth
trading day prior to the consummation of the merger is $35.00.
14
<PAGE> 23
RISK FACTORS
Advest's stockholders should consider the following matters in deciding
whether to vote in favor of the merger agreement and the merger. Stockholders
should consider these matters in conjunction with the other information included
or incorporated by reference in this document.
RISKS WITH RESPECT TO THE MERGER
THE VALUE OF THE CONSIDERATION YOU RECEIVE IN THE MERGER DEPENDS ON THE PRICE OF
MONY COMMON STOCK
In recent years the stock market in general has experienced extreme price
and volume fluctuations which have often been unrelated to operating
performance. These broad market fluctuations have in the past adversely
affected, and may in the future adversely affect, the market price of MONY's
common stock. Fluctuations in the price of MONY's common stock could affect the
value of the consideration received by Advest stockholders in the merger.
Under the terms of the merger agreement, the value you will receive for
your Advest shares will be fixed prior to the transaction closing date using the
closing price of MONY common stock at that time. See "Principal Provisions of
the Merger -- Consideration to be Received In the Merger." There can be no
assurance that the market price of MONY common stock on and after the effective
time of the merger will be higher or lower than the applicable average price
used in determining the number of shares of MONY common stock you receive or the
price as of any other date. Advest stockholders should obtain and consider
recent trading prices of MONY common stock in determining whether to vote in
favor of the merger agreement and the consummation of the merger.
FAILURE OF MONY AND ADVEST TO WORK TOGETHER COULD HAVE A MATERIAL ADVERSE EFFECT
ON MONY
MONY and Advest expect that the merger will result in operating and
strategic benefits. The anticipated benefits of the merger may not be achieved
unless MONY and Advest are able to work together in a coordinated, timely and
efficient manner, and there can be no assurance this will occur. In addition,
implementing this process could cause the interruption of, or a loss of momentum
in, the activities of Advest. Failure to achieve the anticipated benefits could
have a material adverse effect on MONY's financial condition and results of
operations.
THERE IS UNCERTAINTY AS TO THE RETENTION OF KEY ADVEST PERSONNEL
Although MONY has expressed an intention to retain certain key personnel of
Advest, there can be no assurance that Advest will be successful in retaining
its key personnel, including, in particular, its top-producing brokers. Advest's
failure to retain some or all of its key personnel could result in a material
adverse effect upon MONY's financial condition and results of operations. In
this regard, Advest has entered into, or expects to enter into, certain
retention agreements with many of its top producing brokers pursuant to which
these brokers have agreed, or are expected to agree, to continue to be employed
with Advest until the consummation of the merger in order to receive certain
benefits. The agreements provide that certain retention bonus awards may be
payable if the brokers remain employed with Advest through the consummation of
the merger, and if the brokers continue to be employed with Advest following the
merger and achieve certain production goals. In addition, specified Advest
senior managers have entered into executive agreements described in "The
Merger -- Interests of Certain Persons in the Merger."
THE TERMINATION FEE, STOCK OPTION AGREEMENT AND SUPPORT AGREEMENT COULD MAKE A
COMPETING TAKEOVER PROPOSAL MORE DIFFICULT AND EXPENSIVE
Advest must pay MONY a termination fee of $10 million if the merger
agreement terminates under specified circumstances. The termination fee could
discourage another company from making a competing takeover proposal that could
be more advantageous to Advest's stockholders by making the competing proposal
more difficult or expensive and could deter Advest from entering into an
alternative transaction.
15
<PAGE> 24
Similarly, the Stock Option Agreement giving MONY the option to purchase shares
of Advest common stock equivalent to 19.9% of Advest's issued and outstanding
common shares could discourage a competing proposal by eliminating the ability
of another acquirer to use pooling of interests accounting treatment for an
alternative transaction (though the profit of MONY from the Stock Option
Agreement plus any termination fee is capped at $10 million). Finally, the
Support Agreement requiring certain holders of approximately 22.96% of Advest's
outstanding common stock to vote their shares in favor of the merger could
discourage a competing proposal by making it more difficult for another acquirer
to obtain the approval of Advest stockholders for an alternative transaction.
Advest is not aware of any competing proposal.
THE INTERESTS OF ADVEST DIRECTORS AND OFFICERS IN THE MERGER MAY BE DIFFERENT
FROM THE INTERESTS OF OTHER STOCKHOLDERS
Some of the directors and officers of Advest have interests in the merger
that are different from, and/or are in addition to, the interests of Advest's
stockholders. These interests may influence these directors and officers in
making their recommendation that you vote in favor of the merger agreement. In
that regard, see the discussion under "The Merger -- Interests of Certain
Persons in the Merger."
YOU MAY NOT RECEIVE THE AMOUNT OF CASH OR STOCK THAT YOU ELECT TO RECEIVE IN THE
MERGER
The aggregate number of shares of Advest common stock to be converted into
cash and MONY common stock in the merger is fixed by the merger agreement at a
ratio of 49.9% cash and 50.1% stock, respectively. As a result, if either the
cash or stock consideration is over-subscribed, the cash or stock consideration,
as the case may be, will be allocated on a pro rata basis in the manner set
forth in the merger agreement. As a result, it is possible that you may not
receive the amount of cash or stock that you request in your Form of Election in
the merger. In addition, Advest stockholders who make no election as to the
consideration they wish to receive on their Form of Election or who fail to make
a valid and timely election in accordance with the designated procedures will
have the cash and stock consideration to be received by them allocated under the
terms of the merger agreement and will not be able to control to any extent the
form of consideration they receive in the merger.
RISKS WITH RESPECT TO MONY
DIVIDENDS AND DEBT SERVICE PAYMENTS MAY BE AFFECTED BY LIMITATIONS IMPOSED ON
MONY LIFE INSURANCE COMPANY
MONY is a holding company. The assets of MONY consist primarily of all of
the outstanding shares of the common stock of MONY Life Insurance Company.
MONY's ongoing ability to pay dividends to its stockholders and meet its
obligations, including paying operating expenses and any debt service, primarily
depends upon the receipt of dividends from MONY Life Insurance Company. Any
inability of MONY Life Insurance Company to pay dividends to MONY in the future
in an amount sufficient for MONY to pay dividends to MONY's stockholders and
meet MONY's debt service and other obligations, may materially adversely affect
MONY's business, results of operations and financial condition.
The payment of dividends by MONY Life Insurance Company is regulated under
state insurance law. Under the New York Insurance Law, MONY Life Insurance
Company may pay a stockholder dividend to MONY only if it files notice of its
intention to declare a dividend and the amount of the dividend with the New York
Superintendent of Insurance. The New York Superintendent may prevent the payment
of the dividend. Under the New York Insurance Law, the New York Superintendent
has broad discretion in determining whether the financial condition of a stock
life insurance company would support the payment of that dividend. The New York
Insurance Department has established informal guidelines for the New York
Superintendent's determinations that focus on, among other things, an insurer's
overall financial condition and profitability under statutory accounting
practices. MONY cannot assure you that MONY Life Insurance Company will be able
to pay dividends to MONY in an amount sufficient to fund MONY's cash
requirements, pay cash dividends and service MONY's debt.
16
<PAGE> 25
THE DECLINE AND EXPIRATION OF PAYMENTS AND INCOME RELATED TO MONY'S GROUP
PENSION BUSINESS TRANSFERRED TO AEGON MAY REDUCE ITS PROFITS
On December 31, 1993, MONY entered into an agreement with AEGON USA, Inc.
Under the agreement, MONY transferred a substantial portion of its group pension
business to AEGON's wholly-owned subsidiary, AUSA Life Insurance Company, Inc.
On December 31, 1993, MONY also made a $200.0 million capital investment in
AEGON by purchasing $150.0 million face amount of Series A Notes and $50.0
million face amount of Series B Notes. The Series A Notes pay interest at 6.44%
per annum and the Series B Notes pay interest at 6.24% per annum. Both the
Series A and Series B Notes mature on December 31, 2002.
Pursuant to the AEGON agreement, MONY receives from AUSA:
(1) payments on an annual basis through December 31, 2002 equal to all
of the earnings from the deposits on contracts in force and transferred to AEGON
on December 31, 1993,
(2) a final payment at December 31, 2002 based on the remaining fair
value of the deposits on contracts in force and transferred to AEGON on December
31, 1993, and
(3) a contingent payment at December 31, 2002 based on new business
growth subsequent to December 31, 1993. However, it is unlikely that MONY will
receive this payment because of the high level of new business growth necessary
in order to receive it.
The group pension profits have represented a significant portion of MONY's
net income. For the six-month periods ended June 30, 2000 and 1999 and the years
ended December 31, 1999, 1998 and 1997, AUSA reported earnings to MONY pursuant
to the application of the earnings formula of $7.6 million, $16.4 million, $35.7
million, $49.8 million and $55.7 million, respectively, and MONY recorded group
pension profits of $18.2 million, $26.3 million, $63.0 million, $56.8 million
and $60.0 million, respectively. The group pension profits represented
6%,16%,16%,19% and 31% of income before income taxes and extraordinary items for
those periods, respectively. In addition, MONY expects the annual payments
referred to in clause (1) above, and in turn the group pension profits, to
decline in each succeeding annual period consistent with the continuing run-off
of the underlying business until they terminate as of December 31, 2002.
Accordingly, MONY's financial position and results of operations could be
adversely affected unless MONY takes actions which will increase MONY's revenue
and net income in each succeeding year and, particularly, subsequent to December
31, 2002, to replace the group pension profits.
CHANGES IN INTEREST RATES MAY SIGNIFICANTLY AFFECT MONY'S PROFITABILITY
In periods of increasing interest rates, policy loans and surrenders and
withdrawals may tend to increase as policyholders seek investments with higher
perceived returns. Conversely, during periods of declining interest rates, life
insurance and annuity products may be relatively more attractive investments,
resulting in increased premium payments on products with flexible premium
features, repayment of policy loans and increased persistency during a period
when MONY's new investments carry lower returns. In addition, borrowers may
prepay or redeem mortgages and bonds in MONY's investment portfolio as they seek
to borrow at lower market rates, and MONY might have to reinvest those funds in
lower interest-bearing investments. Accordingly, during periods of declining
interest rates, a decrease in the spread between interest and dividend rates to
policyholders and returns on MONY's investment portfolio may adversely affect
MONY's profitability.
THE VALUE OF MONY'S INVESTMENT PORTFOLIO WILL FLUCTUATE
MONY's investment portfolio consists primarily of fixed maturity
securities, equity securities, limited partnership interests, money market
investments, commercial mortgage loans, agricultural mortgage loans and real
estate. The fair value of these and MONY's other invested assets fluctuates
depending on general economic and market conditions, and on fluctuations in
interest rates. In addition, MONY is also subject to credit risk relating to the
uncertainty associated with the continued ability of debtors to make timely
payments pursuant to the contractual terms underlying these investments.
17
<PAGE> 26
MONY may, from time to time, for business, regulatory or other reasons,
elect or be required to sell some of its general account invested assets at a
time when their fair values are less than their carrying values, resulting in
realized losses on investments, which would reduce net income.
WRITEDOWNS OF FIXED MATURITY SECURITIES MAY ADVERSELY AFFECT MONY'S
PROFITABILITY
A portion of MONY's invested assets consist of fixed maturity securities.
MONY writes down to fair value fixed maturity securities whose value is deemed
other than temporarily impaired. MONY records these writedowns as realized
investment losses and, accordingly, MONY reflects those writedowns in its
results of operations and MONY permanently adjusts the cost basis of the
respective assets to reflect the impairment. In the past MONY has recorded
investment losses as a result of writedowns. There can be no assurance that MONY
will not need to make additional writedowns for impairment with respect to
MONY's fixed maturity securities. Any of these writedowns may have a material
adverse effect on MONY's financial position and results of operations.
PREPAYMENT OF MONY'S MORTGAGE BACKED SECURITIES MAY ADVERSELY AFFECT MONY'S
PROFITABILITY
MONY's fixed maturity securities include mortgage backed securities,
collateralized mortgage obligations and pass-through securities. These
securities are subject to prepayment risks that vary with, among other things,
interest rates. During periods of declining interest rates, mortgage backed
securities generally prepay faster as the underlying mortgages are prepaid and
are refinanced by the borrowers in order to take advantage of the lower rates.
Mortgage backed securities that MONY purchases at a premium because they have an
amortized cost that is greater than par, may experience a reduction in yield or
a loss as a result of these prepayments. In addition, during periods of
declining interest rates, MONY will generally be unable to reinvest the proceeds
of the prepayment at comparable yields. Conversely, during periods of rising
interest rates, prepayments are generally slow. Mortgage backed securities that
MONY purchases at a discount because they have an amortized value that is less
than par, may experience a decrease in yield or a loss as a result of slower
prepayments.
GENERAL MARKET CONDITIONS MAY ADVERSELY AFFECT MONY'S INVESTMENTS IN LIMITED
PARTNERSHIPS
MONY has investments in many limited partnerships. Investment results for
this portfolio are dependent upon, among other things, general market conditions
for initial and secondary offerings of common stock. In the past MONY earned
significant investment income from investments in limited partnership interests.
There can be no assurance that the recent level of investment returns achieved
on limited partnership investments can be sustained in the future, and the
failure to do so could have a material adverse effect on MONY's financial
position and results of operations.
FLUCTUATIONS IN MARKET VALUE OF SEPARATE ACCOUNT ASSETS MAY RESULT IN
FLUCTUATIONS IN MONY'S REVENUE FROM POLICY CHARGES
The risk of fluctuations in market value of substantially all of MONY's
separate account assets is borne by the separate account contract holders. A
number of MONY's policy charges for administering these separate account assets,
however, are set as a percentage of market value of the assets. Accordingly,
fluctuations in the market value of separate account assets may result in
fluctuations in MONY's revenue from policy charges.
WRITEDOWNS OF REAL ESTATE HELD FOR INVESTMENT WOULD REDUCE MONY'S NET INCOME
MONY is subject to the risk that its investments in real estate may decline
in value. MONY generally adjusts the carrying value of real estate classified as
held for investment for declines in value whenever events or changes in
circumstances indicate that the carrying amount of the asset may not be
recoverable. MONY records these writedowns as realized investment losses, which
would reduce MONY's net income.
18
<PAGE> 27
INCREASES IN VALUATION ALLOWANCES WOULD REDUCE MONY'S NET INCOME
Once MONY identifies a real estate property to be sold and commences a plan
for marketing the property, the property is classified as "to be disposed of"
and, if necessary, a valuation allowance is established to the extent that its
fair value minus associated selling costs is less than its current carrying
value. These valuation allowances are periodically revised, if necessary, to
reflect changes in fair value, except that, in no case will the carrying value
of the real estate property exceed its original cost. Increases in valuation
allowances serve to reduce MONY's net income.
ANY FUTURE SALES OF REAL ESTATE COULD RESULT IN GAAP OR STATUTORY LOSSES
Because MONY adjusts carrying values to reflect valuation allowances, MONY
expects the net proceeds from sales of real estate will not be materially
different from the carrying value of the real estate on a generally accepted
accounting principles basis. However, MONY cannot assure you that increases in
valuation allowances will not be required in the future or that future sales of
real estate will not be made at amounts below recorded GAAP carrying value,
which may have a material adverse effect on MONY's financial position and
results of operations.
The accounting practices MONY uses in its regulatory filings with the New
York Insurance Department are different from GAAP. The carrying value of real
estate on a statutory basis exceeds the carrying value of these investments on a
GAAP basis. Because of this difference in accounting treatment, MONY expects to
incur losses on a statutory basis as a result of anticipated real estate sales.
These losses could materially affect MONY's statutory basis surplus and net
income.
MONY cannot give you any assurance as to whether, when or for what amounts
any real estate that is classified as to be disposed of will actually be
disposed of.
MONY MAY BE ADVERSELY AFFECTED BY THE DECLINE IN VALUE OF ITS COMMERCIAL
MORTGAGE LOAN INVESTMENTS
MONY is subject to the risk that its investments in commercial mortgage
loans will decline in value. Commercial mortgage loans are stated at their
unpaid principal balances, net of valuation allowances for decline in value.
MONY provides valuation allowances for commercial mortgage loans when it is
probable that it will be unable to collect all amounts due according to the
contractual terms of the loan agreement. Increases in valuation allowances are
recorded as realized investment losses and serve to reduce MONY's net income.
THE EXPIRATION OF SURRENDER PENALTIES WITH RESPECT TO SOME OF MONY'S ANNUITIES
COULD RESULT IN SURRENDERS WHICH MAY REDUCE MONY'S PROFITS
MONY typically imposes surrender charges on the annuities it sells. The
surrender charges enable MONY to recover unamortized policy acquisition costs in
the event that the annuity is surrendered before policy acquisition costs are
fully amortized. In addition, the surrender charges discourage contract
surrenders, which could require MONY to dispose of assets prematurely at a loss.
As surrender penalties expire it is likely that surrenders of single premium
deferred annuities and flexible payment variable annuities will increase. A
substantial increase in surrenders may reduce MONY's profits.
MONY MAY BE REQUIRED TO ADD ASSETS TO THE CLOSED BLOCK IN THE EVENT THAT THE
ASSETS THEREIN ARE NOT SUFFICIENT TO PAY GUARANTEED BENEFITS
The plan of demutualization pursuant to which MONY Life Insurance Company
converted from a mutual insurance company to a stock corporation requires MONY
Life Insurance Company to establish and operate a closed block for the benefit
of certain policyholders holding participating insurance policies of MONY Life
Insurance Company. The closed block is designed to give reasonable assurance
with respect to policies included in the closed block that assets will be
available to maintain dividend scales payable at the time MONY funded the closed
block if the experience underlying such dividend scales continues. The amount
19
<PAGE> 28
of assets MONY allocated to the closed block is expected to produce cash flows
which, together with anticipated revenues from the policies included in the
closed block, are reasonably expected to be sufficient:
- for the payment of claims and surrender benefits, certain expenses
and taxes, and
- to provide for the continuation of the policyholder dividend scales
payable in 1998, if the experience underlying those scales continues,
and for appropriate adjustments in those scales if the experience
changes.
The closed block assets, the cash flows generated by the closed block
assets and the anticipated revenues from the policies in the closed block will
benefit only the holders of those policies, and will not be available to MONY or
its stockholders.
MONY cannot assure that the closed block assets, the cash flows generated
by the closed block assets and the anticipated revenues from the policies
included in the closed block will be sufficient to provide for the benefits
guaranteed under these policies. If they are not sufficient, MONY must fund the
shortfall. Even if they are sufficient, MONY may choose, for competitive
reasons, to support policyholder dividend payments with MONY's general account
funds. As described below, there is currently pending litigation against MONY
which seeks to require MONY to increase the assets in the closed block.
MONY has allocated the Series A Notes and the Series B Notes described
above to the closed block. MONY will reimburse the closed block from its general
account assets for any reduction in principal payments due on the Series A Notes
pursuant to their terms.
LITIGATION CHALLENGING THE NEW YORK SUPERINTENDENT'S ORDER APPROVING THE PLAN OF
DEMUTUALIZATION MAY HAVE A MATERIAL ADVERSE EFFECT ON MONY
On November 16, 1999, The MONY Group Inc. and MONY Life Insurance Company
were served with a complaint in an action entitled Calvin Chatlos, M.D., and
Alvin H. Clement, On Behalf of Themselves And All Others Similarly Situated v.
The MONY Life Insurance Company, The MONY Group Inc., and Neil D. Levin,
Superintendent, New York Department of Insurance, filed in the United States
District Court for the Southern District of New York. The action purports to be
brought as a class action on behalf of all individuals who had an ownership
interest in one or more in-force life insurance policies issued by MONY Life
Insurance Company as of November 16, 1998. The complaint alleges that (i) the
New York Superintendent of Insurance, Neil D. Levin, violated Section 7312 of
the New York Insurance Law by approving the plan of demutualization, which
plaintiffs claim was not fair and adequate, primarily because it allegedly
failed to provide for sufficient assets for the mechanism established under the
plan to preserve reasonable dividend expectations of the closed block, and (ii)
MONY violated Section 7312 by failing to develop and submit to the
Superintendent a plan of demutualization that was fair and adequate. The
plaintiffs seek equitable relief in the form of an order vacating and/or
modifying the Superintendent's order approving the plan of demutualization
and/or directing the Superintendent to order MONY to increase the assets in the
closed block, as well as unspecified monetary damages, attorneys' fees and other
relief.
In early January 2000, MONY and the Superintendent wrote to the District
Court seeking a pre-motion conference preliminary to the filing of a motion to
dismiss the federal complaint on jurisdictional, federal abstention and
timeliness grounds and for failure to state a claim. Following receipt of those
letters, plaintiffs' counsel offered voluntarily to dismiss their complaint, and
a stipulation and order to that effect was thereafter filed and approved by the
court.
On March 27, 2000, plaintiffs filed a new action in New York State Supreme
Court bearing the same caption and naming the same defendants as the previously
filed federal action. The state court complaint differs from the complaint
previously filed in federal court in two primary respects. First, it no longer
asserts a claim for damages against the Superintendent, nor does its prayer for
relief seek entry of an order vacating or modifying the Superintendent's
decision or requiring the Superintendent to direct MONY to place additional
assets into the closed block. Rather, it seeks an accounting and an order from
the Court directing MONY to transfer additional assets to the closed block.
20
<PAGE> 29
Second, the new complaint contains claims for breach of contract and
fiduciary duty, as well as new allegations regarding the adequacy of the
disclosures contained in the Policyholder Information Booklet distributed to
policyholders soliciting their approval of the plan of demutualization (which
plaintiffs claim violated both the Insurance Law and MONY's fiduciary duties).
In order to challenge successfully the New York Superintendent's approval
of the plan, plaintiffs would have to sustain the burden of showing that such
approval was arbitrary and capricious or an abuse of discretion, made in
violation of lawful procedures, affected by an error of law or not supported by
substantial evidence. In addition, Section 7312 provides that MONY may ask the
court to require the challenging party to give security for the reasonable
expenses, including attorneys' fees, which may be incurred by MONY or the
Superintendent or for which MONY may become liable, to which security MONY shall
have recourse in such amount as the court shall determine upon the termination
of the action.
MONY and the Superintendent have moved to dismiss the state court complaint
in its entirety on a variety of grounds. That motion is fully briefed and
awaiting decision by the court. MONY believes that there are substantial
defenses to plaintiffs' claims and intends to defend itself vigorously. There
can be no assurance, however, that the present litigation will not have a
material adverse effect on MONY.
LITIGATION WITH RESPECT TO MONY'S SALES PRACTICES MAY AFFECT MONY'S
PROFITABILITY
Since late 1995 a number of purported class actions have been commenced in
various state and federal courts against MONY alleging that it engaged in
deceptive sales practices in connection with the sale of whole and universal
life insurance policies from the early 1980s through the mid 1990s. Although the
claims asserted in each case are not identical, they seek substantially the same
relief under essentially the same theories of recovery (i.e., breach of
contract, fraud, negligent misrepresentation, negligent supervision and
training, breach of fiduciary duty, unjust enrichment and violation of state
insurance and/or deceptive business practice laws). Plaintiffs in these cases
seek primarily equitable relief (e.g., reformation, specific performance,
mandatory injunctive relief prohibiting MONY from canceling policies for failure
to make required premium payments, imposition of a constructive trust and
creation of a claims resolution facility to adjudicate any individual issues
remaining after resolution of all class-wide issues) as opposed to compensatory
damages, although they also seek compensatory damages in unspecified amounts.
MONY has answered the complaints in each action (except for one being
voluntarily held in abeyance). MONY has denied any wrongdoing and has asserted
numerous affirmative defenses.
On June 7, 1996, the New York State Supreme Court certified one of those
cases, Goshen v. The Mutual Life Insurance Company of New York and MONY Life
Insurance Company of America (now known as DeFilippo, et al v. The Mutual Life
Insurance Company of New York and MONY Life Insurance Company), the first of the
class actions filed, as a nationwide class consisting of all persons or entities
who have, or at the time of the policy's termination had, an ownership interest
in a whole or universal life insurance policy issued by MONY and sold on an
alleged "vanishing premium" basis during the period January 1, 1982 to December
31, 1995. On March 27, 1997, MONY filed a motion to dismiss or, alternatively,
for summary judgment on all counts of the complaint. All of the other putative
class actions have been consolidated and transferred by the Judicial Panel on
Multidistrict Litigation to the United States District Court for the District of
Massachusetts and/or are being held in abeyance pending the outcome of the
Goshen case.
On October 21, 1997, the New York State Supreme Court granted MONY's motion
for summary judgment and dismissed all claims filed in the Goshen case against
MONY. On December 20, 1999, the New York State Court of Appeals affirmed the
dismissal of all but one of the claims in the Goshen case (a claim under New
York's General Business Law), which has been remanded back to the New York State
Supreme Court for further proceedings consistent with the opinion. The New York
State Supreme Court has subsequently reaffirmed that, for purposes of the
remaining New York General Business Law claim, the class is now limited to New
York purchasers only, and has further held that the New York General Business
Law claims of all class members whose claims accrued prior to November 29, 1992
are barred by the applicable statute of limitations. MONY intends to defend
itself vigorously against the sole remaining claim. There can
21
<PAGE> 30
be no assurance, however, that the present litigation relating to sales
practices will not have a material adverse effect on MONY.
VARIATIONS IN CLAIMS EXPERIENCE WILL AFFECT MONY'S RESULTS FROM PERIOD TO PERIOD
An insurance company's earnings significantly depend upon the claims paid
under its insurance contracts. Amounts paid will vary from period to period
depending upon the amount of claims incurred in the relevant periods. Therefore,
there is limited predictability of claims experience within any given month or
year. As a result, MONY anticipates that its financial results may vary from
period to period and that those variations may be material in any given period.
MONY uses certain assumptions in pricing its products. There can be no assurance
that actual experience will match its assumptions made for pricing purposes and,
to the extent that they differ, its operating results could be materially
adversely affected.
MONY IS HIGHLY REGULATED AND THAT REGULATION MAY LIMIT MONY'S FREEDOM OF ACTION
MONY's insurance business is subject to comprehensive state regulation and
supervision throughout the U.S. The primary purpose of such regulation is to
protect policyholders, not securityholders. The laws of the various states
establish insurance departments with broad powers with respect to:
- licensing companies to transact business;
- licensing agents;
- admitting statutory assets;
- mandating certain insurance benefits;
- regulating premium rates;
- approving policy forms;
- regulating unfair trade and claims practices;
- regulating advertising;
- establishing statutory reserve requirements and solvency standards;
- fixing maximum interest rates on life insurance policy loans and
minimum rates for accumulation of surrender values;
- restricting certain transactions between affiliates; and
- regulating the types, amounts and statutory valuation of investments.
The U.S. Federal government does not directly regulate the insurance
business. However, the Gramm-Leach-Bliley Act of 1999 is intended to change the
businesses that financial organizations are permitted to conduct, the manner in
which financial organizations may conduct these businesses and the manner in
which these businesses are regulated, which may impact the regulation and
supervision of MONY's insurance operations. In addition, Federal legislation and
administrative policies in certain areas can significantly and adversely affect
the insurance industry generally and MONY in particular. These areas include
employee benefit plan regulation, financial services regulation and Federal
taxation and securities laws.
MONY Life Insurance Company, some of its subsidiaries and some policies and
contracts offered by them are subject to various levels of regulation under the
Federal securities laws administered by the Securities and Exchange Commission.
These laws and regulations are primarily intended to protect investors in
securities and generally grant supervisory agencies broad administrative powers,
including the power to limit or restrict the conduct of business for failure to
comply with such laws and regulations. MONY may also be subject to similar laws
and regulations in the states in which MONY provides investment advisory
services, offer products or conduct other securities-related activities.
All of these regulations may limit MONY's freedom of action.
22
<PAGE> 31
MONY MAY BE UNABLE TO ATTRACT AND RETAIN AGENTS TO SELL ITS PRODUCTS
MONY must attract and retain productive agents to sell its insurance and
annuity products. Strong competition exists among insurance companies for agents
with demonstrated ability. MONY's management believes that key bases of
competition among insurance companies for agents with demonstrated ability
include a company's financial position and the services provided to, and
relationships developed with, these agents in addition to compensation and
product structure.
COMPETITION FROM NON-INSURANCE FINANCIAL SERVICES COMPANIES MAY ADVERSELY AFFECT
MONY'S BUSINESS
National banks, with their pre-existing customer bases for financial
services products, may increasingly compete with insurers, as a result of court
cases that permit national banks to sell annuity products of life insurance
companies in some circumstances.
In addition there has been recently-enacted legislation removing
restrictions on bank affiliations with insurers. This legislation, the
Gramm-Leach-Bliley Act of 1999, permits mergers that combine commercial banks,
insurers and securities firms under one holding company. Until passage of the
Gramm-Leach-Bliley Act, the Glass-Steagall Act of 1933 had limited the ability
of banks to engage in securities-related businesses, and the Bank Holding
Company Act of 1956 had restricted banks from being affiliated with insurance
companies. With the passage of the Gramm-Leach-Bliley Act, bank holding
companies may acquire insurers, and insurance holding companies may acquire
banks. The ability of banks to affiliate with insurance companies may materially
adversely affect all of MONY's product lines by substantially increasing the
number, size and financial strength of potential competitors.
A DOWNGRADE IN MONY'S RATINGS MAY ADVERSELY AFFECT MONY'S ABILITY TO MARKET ITS
PRODUCTS AND RETAIN ITS CURRENT POLICYHOLDERS
Claims-paying ability and financial strength ratings are an important
factor in establishing the competitive position of insurance companies. Ratings
are important to maintaining public confidence in MONY and in MONY's ability to
market its products. Rating organizations continually review the financial
performance and condition of insurance companies, including MONY. Any downgrade
in MONY's ratings could have a material adverse effect on MONY's ability to
market its products and retain its current policyholders. These consequences
could, depending upon their extent, have a material adverse effect on MONY's
liquidity and, under some situations, net income.
CHANGES IN FEDERAL INCOME TAXATION COULD ADVERSELY IMPACT SALES OF MONY'S
INSURANCE, ANNUITIES AND INVESTMENT PRODUCTS
Current Federal income tax laws generally defer income tax to be paid by
policyholders or contract holders on any accumulation of earnings on the
premiums paid by the holders of annuities and life insurance products. Taxes, if
any, are payable by policyholders and contract holders when earnings are
actually paid. Congress has, from time to time, considered possible legislation
that would eliminate this deferral of taxation with respect to certain annuities
and life insurance products. Enactment of other possible legislation, including
a simplified "flat tax" income structure with an exemption from taxation for
investment income and elimination of, or reduction in, the estate tax, could
also adversely affect purchases of life insurance. MONY cannot foresee whether
such legislation will be enacted or, whether such legislation, if enacted, will
contain provisions with possible adverse effects on MONY's life insurance and
annuity products.
23
<PAGE> 32
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this proxy statement/prospectus (including
information included or incorporated by reference in this proxy
statement/prospectus) and other written and oral statements made from time to
time by MONY and Advest do not relate strictly to historical or current facts.
As such, they are considered "forward-looking statements" which provide current
expectations or forecasts of future events. Such statements can be identified by
the use of terminology such as "anticipate," "believe," "estimate," "expect,"
"intend," "may," "could," "possible," "plan," "project," "will," "forecast" and
similar words or expressions. Both MONY's and Advest's forward-looking
statements generally relate to their strategies, financial results, products and
regulatory issues. One must carefully consider forward-looking statements and
understand that such statements involve a variety of risks and uncertainties,
known and unknown, and may be affected by inaccurate assumptions. Consequently,
no forward-looking statement can be guaranteed and actual results may vary
materially. It is not possible to foresee or identify all factors affecting
MONY's and Advest's forward-looking statements and investors therefore should
not consider any list of factors affecting their forward-looking statements to
be an exhaustive statement of all risks, uncertainties or potentially inaccurate
assumptions. MONY and Advest undertake no obligation to update any
forward-looking statement.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor
for forward-looking statements. In order to comply with the terms of the safe
harbor, MONY and Advest note that a variety of factors could cause their actual
results and experience to differ materially from the anticipated results or
other expectations expressed in their forward-looking statements. Although it is
not possible to create a comprehensive list of all factors that may cause actual
results and experience to differ materially from MONY's and Advest's
forward-looking statements, the factors include those noted in MONY's and
Advest's SEC filings which are incorporated by reference, those discussed in
this proxy statement/prospectus under the caption "Risk Factors," and, among
others, (i) changes in, and the enforcement of, governmental laws, regulations,
policies, judicial decisions and accounting standards that may be adverse to
either MONY or Advest, including changes in tax laws affecting insurance and
annuity products; (ii) agency or government actions or investigations affecting
the industry in general or MONY or Advest in particular; (iii) business
acquisitions, dispositions, discontinuations or restructurings by MONY; (iv) the
integration of businesses acquired by MONY; (v) internal factors such as the
success of the restructuring of MONY's career agency sales force and agent
compensation, the retention of key employees, change in business strategies and
the impact of restructuring and business combinations; (vi) economic factors
over which MONY or Advest have no control, including market fluctuations and
changes in inflation, foreign currency rates and interest rates; (vii) losses
with respect to MONY's equity real estate, and the success of MONY's continuing
process of selectively selling its equity real estate; (viii) MONY's ability to
control operating expenses; (ix) the outcome of pending litigation; (x)
deterioration in the experience of the "closed block" established in connection
with the demutualization of MONY Life Insurance Company; (xi) the intensity of
competition from other financial institutions; (xii) mortality, morbidity,
persistency and claims experience; (xiii) the ability to develop, distribute and
administer competitive products and services in a timely, cost-effective manner;
and (xiv) MONY's financial and claims paying ratings. MONY and Advest note these
factors as permitted by the Private Securities Litigation Reform Act of 1995.
24
<PAGE> 33
THE SPECIAL MEETING
This section contains information about the stockholder meeting that Advest
has called to consider and approve the merger agreement.
Advest is mailing this document to you on or about October 19, 2000.
Together with this document, Advest is also sending to you a notice of the
special meeting and a form of proxy that Advest's board is soliciting for use at
the special meeting, as well as a Form of Election and Letter of Transmittal.
The Advest special meeting will be held at the Court Room of the Old State
House, 800 Main Street, Hartford, Connecticut 06103 on November 20, 2000, at
4:30 p.m., local time.
MATTERS TO BE CONSIDERED
The purpose of the special meeting is to vote on the approval of the merger
agreement, dated August 23, 2000, by and among Advest, MONY and MONY Acquisition
Corp., and the transactions contemplated in that agreement, including the merger
described in this proxy statement/prospectus and any other matters that may
properly be submitted to a vote at the special meeting. You may also be asked to
vote upon a proposal to adjourn or postpone the special meeting. Advest could
use any adjournment or postponement for the purpose, among other things, of
allowing more time to solicit votes to approve the merger agreement.
VOTING RIGHTS; VOTES REQUIRED FOR APPROVAL
Advest's board of directors has fixed the close of business on October 16,
2000 as the record date for Advest stockholders entitled to notice of and to
vote at the special meeting.
Currently, the only outstanding voting securities of Advest are the shares
of Advest common stock. Only holders of record of shares of Advest common stock
on the Advest record date are entitled to notice of the Advest special meeting,
and to vote at the special meeting. Each holder of record, as of the record
date, of Advest common stock is entitled to cast one vote per share on the
merger agreement proposal.
On the record date, there were approximately 8,826,502 shares of Advest
common stock outstanding and entitled to vote at the special meeting, held by
approximately 617 stockholders of record.
The favorable vote of a majority of all outstanding shares of Advest common
stock outstanding on the record date is required to approve the merger
agreement.
On the record date, the directors and executive officers of Advest and
their affiliates beneficially owned and were entitled to vote 2,308,712 shares
of Advest common stock, or approximately 25.94% of the shares of Advest common
stock outstanding on the record date. Grant W. Kurtz, President, Chief Executive
Officer and a director of Advest, Allen Weintraub, Chairman of the Board of
Directors of Advest, and George A. Boujoukos, Senior Executive Vice President
and Director of Capital Markets of Advest, together with Peter R. Kellogg, a
director and stockholder of Advest, have entered into a support agreement which
is described in more detail under the heading "Support Agreement" below.
VOTING OF PROXIES
All shares of Advest common stock represented by proxies properly received
prior to or at the special meeting and not revoked will be voted in accordance
with the instructions indicated in those proxies. If no instructions are
indicated on a properly executed returned proxy, these proxies will be voted FOR
the approval of the merger agreement.
If a proposal to adjourn the Advest special meeting is properly presented,
the persons named in the enclosed form of proxy will not have discretion to vote
shares voted against the merger agreement in favor of the adjournment proposal.
Advest is not aware of any matters expected to be presented at its meeting other
than as described in its notice of special meeting.
25
<PAGE> 34
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by:
1. filing, including by telecopy, with the Secretary of Advest, before
the taking of the vote at the special meeting, a written notice of
revocation bearing a later date than the date of the proxy or a later-
dated proxy relating to the same shares; or
2. attending the relevant meeting and voting in person.
In order to vote in person at the Advest special meeting, Advest
stockholders must attend the meeting and cast their votes in accordance with the
voting procedures established for the meeting. Attendance at a meeting will not
in and of itself constitute a revocation of proxy. Any written notice of
revocation or subsequent proxy must be sent so as to be delivered at or before
the taking of the vote at the applicable meeting as follows:
The Advest Group, Inc.
90 State House Square
Hartford, Connecticut 06103
Telecopy: (860) 509-2143
Attention: Secretary
Advest stockholders who require assistance in changing or revoking a proxy
should contact Georgeson Shareholder Communications Inc. at the address or phone
number provided in this document under the caption "Questions and Answers About
the Merger -- Who Can Help Answer Your Questions."
Abstentions may be specified on the merger agreement proposal. Since the
favorable vote of holders of a majority of the outstanding shares of Advest
common stock on the merger agreement proposal is required to approve this
proposal, a proxy marked "ABSTAIN" with respect to this proposal will have the
effect of a vote against this proposal. In addition, the failure of an Advest
stockholder in connection with the merger agreement proposal to return a proxy
will have the effect of a vote against the merger agreement proposal.
Under the rules of the NYSE, brokers who hold shares in street name for
customers have the authority to vote on "routine" proposals when they have not
received instructions from beneficial owners. Under NYSE rules, these brokers
are precluded from exercising their voting discretion with respect to the
approval and adoption of non-routine matters like the merger agreement proposal
and, thus, absent specific instructions from the beneficial owner of these
shares, brokers are not empowered to vote these shares with respect to the
approval and adoption of the proposal. Since the affirmative vote described
above is required for approval of the merger agreement proposal, a non-vote by a
broker who has not received specific voting instructions with respect to this
proposal will have the effect of a vote against the proposal.
The cost of solicitation of proxies will be paid by Advest. In addition to
solicitation by mail, arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries to send the proxy materials to beneficial
owners and Advest will, upon request, reimburse these brokerage houses and
custodians for their reasonable expenses in so doing. Advest has signed a letter
of agreement with Georgeson Shareholder Communications Inc. which provides that
Georgeson Shareholder Communications Inc. will disseminate broker search cards,
distribute proxy materials in preparation for the special meeting and assist in
the proxy solicitation process. Advest estimates that Georgeson Shareholder
Communications Inc.'s fee for these services will be approximately $7,500, plus
reimbursement for expenses incidental to the solicitation. The letter agreement
with Georgeson Shareholder Communications Inc. contains customary
indemnification and confidentiality provisions. To the extent necessary in order
to ensure sufficient representation at its meeting, Advest may request by
telephone or telecopy the return of proxy cards or electronic vote via the
internet. To the extent to which this will be necessary depends entirely upon
how promptly proxy cards are returned. Stockholders of record may vote either
via the internet or by telephone. Specific instructions to be followed by
registered stockholders interested in voting via the internet or by telephone
are shown on the enclosed proxy card. The internet and telephone voting
procedures are designed to authenticate the stockholder's identity and to allow
stockholders to vote their shares and confirm that their instructions have been
properly recorded. If your shares are registered in the name of a bank or
brokerage firm, you may be eligible to vote your shares
26
<PAGE> 35
electronically via the internet or by telephone. A large number of banks and
brokerage firms participate in the ADP Investor Communications Services online
program. This program provides eligible stockholders who receive a copy of the
proxy statement the opportunity to vote via the internet or by telephone. If the
entity holding your shares participates in ADP's program, your voting form will
provide instructions. If your voting form does not reference internet or
telephone voting information, please complete and return the paper proxy in the
pre-addressed, postage-paid envelope provided. Stockholders are urged to send in
their proxies or vote electronically without delay.
VOTING AND ELECTION OF SHARES IN THE ADVEST THRIFT PLAN
If you are a participant in the Advest Thrift Plan and have Advest shares
allocated to your account, separate procedures that are described below apply to
the voting of these shares with respect to the merger and the cash and/or stock
election for these shares. Under the terms of the Thrift Plan, participants'
instructions as to the voting of and election for their shares will be forwarded
to Webster Trust Company, N.A., an independent fiduciary to the Thrift Plan that
has been appointed by the plan trustees for this purpose. Your completed proxy
card and Form of Election will serve as your instructions to Webster Trust.
Webster Trust is a Connecticut-based trust company that is independent of Advest
and MONY and that will act on behalf of plan participants as a plan fiduciary
under the Employee Retirement Income Security Act of 1974. Participants should
note that the actual voting of and election for the Advest shares credited to
their accounts will be made by the plan trustees as holder of record of the
shares, based on instructions from the participants and the fiduciary
determinations of Webster Trust, as described below. Participants are not
stockholders of the shares credited to their account under the plan and the
information in this proxy statement/prospectus relating to the rights of
stockholders does not apply to plan participants. Participant's rights as to the
shares allocated to their account under the Thrift Plan are governed by the plan
document.
Each participant in the Thrift Plan as of the record date will receive a
separate proxy card and Form of Election identifying the shares credited to the
participant's account. By completing and returning the separate proxy card and
Form of Election, the participant will provide instructions to Webster Trust as
to voting and as to the cash and/or stock election for their plan shares.
Webster Trust will act as independent fiduciary with respect to the final voting
and election decisions. Each participant must return an executed proxy card by
November 13, 2000 and a Form of Election by seven days prior to the election
deadline, the date of which will be publicly announced by MONY and Advest. All
voting and election decisions made by participants will be kept confidential by
Advest, Webster Trust and the plan trustees. All voting and election decisions
for Webster Trust will be made in accordance with the fiduciary duties imposed
under the Employee Retirement Income Security Act of 1974.
If a participant's proxy card and Form of Election are not timely received,
the number of shares credited to the participant's account will be voted and the
cash and/or stock election will be made by Webster Trust. Any participant may
revoke his or her instructions before the dates specified in the preceding
paragraph by timely filing with Webster Trust a written notice of revocation
bearing a date later than the date of the original proxy card or Form of
Election, as the case may be, or by filing a later-dated proxy card or Form of
Election, as the case may be, relating to the same shares.
Participants in the Thrift Plan will not receive any cash or shares of MONY
common stock directly. All merger consideration will remain in the Thrift Plan
and may be withdrawn only in accordance with the terms of the plan. Any cash
received for Advest shares in connection with the merger will be invested in
short term money market investments as soon as administratively possible after
its receipt. Any MONY common stock received for Advest shares in connection with
the merger will consist of a number of shares based on the exchange ratio
described below under the subheading "Consideration to be Received in the
Merger". Following the merger, participants will be able to exchange the shares
of MONY common stock and/or cash received in the merger into other investment
options offered under the plan in accordance with the terms of the plan.
However, in making the cash and/or stock election, participants may wish to take
into account the possibility that limitations may be imposed on the amount of
future plan contributions that may be invested in MONY common stock under the
Thrift Plan.
27
<PAGE> 36
The tax discussion described below under the subheading "Material Federal
Income Tax Consequences" is not applicable to the cash or MONY common stock
received by a participant under the Thrift Plan. The receipt of the merger
consideration will not be taxable to participants at the time of receipt by the
Thrift Plan in accordance with the plan's status as a tax-qualified retirement
plan under the Internal Revenue Code of 1986, as amended. More information
concerning the taxation of distributions from the Thrift Plan, including the
tax-favored treatment of certain distributions of employer securities, can be
obtained from the plan administrator. You may wish to consider these tax
consequences further before making your cash and/or stock election.
BOARD RECOMMENDATION
THE ADVEST BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL
AND ADOPTION OF THE MERGER AND THE MERGER AGREEMENT.
28
<PAGE> 37
THE MERGER
BACKGROUND OF THE MERGER
From time to time, the Advest senior management team has reviewed the
potential long-term and short-term impact of various trends in the retail
securities brokerage business, including those toward consolidation in the
financial services industry and increased competition, on its competitive
position and its ability to continue to increase stockholder value. At regularly
scheduled board meetings over the past three years, the Advest board discussed
with Advest senior management the strategic opportunities and challenges arising
in connection with Advest's business. The Advest board established that, as part
of the specified objectives of Grant W. Kurtz, President and Chief Executive
Officer of Advest, for Advest's 2000 fiscal year, Mr. Kurtz should endeavor to
build alliances and relationships with other firms. Mr. Kurtz reviewed ongoing
activities in this regard with the Advest board.
As a result of these discussions, on March 1, 2000, Advest senior
management indicated to MONY senior management that they would be interested in
discussing a possible transaction.
Thereafter, Advest entered into a confidentiality agreement with MONY, and
representatives of MONY later met with members of the Advest senior management
team to review financial and operating information about Advest's business.
On May 3, 2000, representatives of MONY and Advest met to discuss the
potential benefits of an affiliation between the two companies.
From June through August of 2000, representatives of Advest held a series
of discussions and communications with representatives of MONY concerning the
terms of a possible business combination. During this time, representatives and
advisors of each company conducted due diligence investigations of the other.
On July 25, 2000, at a regularly scheduled board meeting, the directors of
MONY were given an update on the status of discussions with Advest.
Beginning in August of 2000, legal counsel to each company began to
negotiate the terms of the definitive documentation with respect to a possible
merger between Advest and MONY, including drafts of a merger agreement, a stock
option agreement and a shareholder support agreement. The terms of retention
arrangements with Advest's key personnel were also discussed and negotiated
during this period. Throughout these discussions and negotiations, Advest's
executive officers and legal and financial advisors met several times with the
Advest board to update the board with regard to the status of these discussions.
By letter dated August 9, 2000, Advest retained Goldman, Sachs & Co. to act
as Advest's financial advisor in connection with a possible transaction with
MONY. On August 10, 2000, the Advest board held a regularly scheduled meeting
attended by Goldman Sachs. During this meeting, Goldman Sachs reviewed recent
trends in the retail securities brokerage industry, the strategic benefits of
alliances for participants in that industry, valuations of various retail
securities brokerage companies and the financial terms of the possible
transaction with MONY. Following that meeting, on the same date, MONY and Advest
executed an Exclusivity Agreement, pursuant to which, among other things, Advest
agreed not to discuss or negotiate alternative transactions with parties other
than MONY during the period ending not earlier than August 23, 2000.
On August 23, 2000, the Advest board met to discuss the terms of the
proposed merger. Goldman Sachs outlined the proposed transaction with MONY, and
discussed its financial terms. During this meeting, the Advest board received
the oral opinion of Goldman Sachs, confirmed by a written opinion dated August
23, 2000, that, as of that date, and subject to certain matters stated therein,
the consideration received in connection with the merger is fair, from a
financial point of view, to the holders of shares of Advest common stock.
Advest's legal counsel, Wachtell, Lipton, Rosen & Katz, reviewed the terms of
the merger agreement, the stock option agreement, the employee retention
arrangements and other relevant legal issues, including a discussion of several
drafting points in the documents that were subject to being finalized with MONY.
After further discussion of these matters, the Advest board unanimously
determined that the merger is fair to, and in
29
<PAGE> 38
the best interests of, Advest and its stockholders, and approved the merger and
the merger agreement and related agreements, subject to the resolution of the
unresolved issues, and resolved to recommend that Advest stockholders vote to
approve and adopt the merger agreement, and authorized the Advest senior
management to take such actions as was needed to finalize these documents and,
if satisfactorily finalized, to execute the documents and to effectuate the
transactions contemplated in them.
At a special meeting of the board of MONY held on August 23, 2000, the MONY
board determined that the merger and the merger agreement were in the best
interests of MONY and its stockholders, and authorized the MONY senior
management to enter into the merger agreement.
Later that day, representatives of Advest and MONY resolved the remaining
open issues in the merger agreement, retention arrangements and related
documents. The merger agreement and related documents were then signed by Advest
and MONY, and Advest and MONY issued a joint press release announcing the
proposed merger the following day.
REASONS FOR THE MERGER
The Advest board believes that the proposed merger with MONY is in the best
interests of Advest and its stockholders. In making its determination, the board
considered a number of factors, including the following:
- the consideration that Advest stockholders will receive if the merger
is effected, and the likelihood that the merger will deliver greater
value to Advest stockholders than is expected if Advest were to
remain independent;
- the board's consideration of Goldman Sachs' August 23, 2000 oral
presentation and Goldman Sachs' written opinion dated August 23, 2000
that the consideration received in connection with the merger is fair
to Advest stockholders from a financial point of view as of August
23, 2000;
- the complementary nature of Advest's business, services and products
with MONY's, and the opportunity to create a combined business that
offers a wider variety of services to Advest's clients and enhances
the ability to attract new clients;
- the historical performance of MONY's common stock and MONY's
historical financial performance;
- the Advest board's review of other strategic alternatives potentially
available to Advest;
- the opinion of Advest's advisors that the merger will be accomplished
on a tax-free basis for Advest's stockholders for U.S. federal income
tax purposes (except for cash received for Advest shares and instead
of fractional shares);
- the likelihood that Advest and MONY will be able to work together in
a coordinated and efficient manner;
- retention arrangements with key employees of Advest's business in
connection with the merger;
- the terms and conditions of the merger agreement and the option
agreement;
- the judgment and advice of the Advest senior management; and
- the board's conclusion that the merger would provide Advest's
stockholders with an opportunity for continued equity participation
in a larger enterprise, and with greater liquidity.
In view of the wide variety of factors, both positive and negative,
considered by the board of directors of Advest, the board did not find it
practicable to quantify or otherwise assign relative weight to the specific
factors considered in making its determination. However, after taking into
consideration all of the factors set forth above, the board agreed that the
merger is fair to, and in the best interests of, Advest and its stockholders.
THE BOARD OF DIRECTORS OF ADVEST UNANIMOUSLY RECOMMENDS THAT ADVEST
STOCKHOLDERS VOTE FOR APPROVAL OF THE MERGER AGREEMENT AND THE CONSUMMATION OF
THE MERGER.
30
<PAGE> 39
MONY's Reasons for the Merger. MONY's board of directors has determined
that the terms of the merger agreement and the merger are in the best interests
of MONY. In the course of reaching its decision to approve the merger agreement
and the merger, the board consulted with MONY's legal and financial advisors as
well as with MONY's management, and considered a number of factors, including
among others its belief that:
- the business strategy of marketing advice to clients, rather than
merely products, utilized by both companies should be advanced by
their combination;
- the cultures of the two companies are compatible, based on their
similar strategic visions and a good management fit;
- a larger organization with a wider range of products and services
provides opportunities to create greater customer loyalty and
increase penetration of the customer's wealth accumulation and
protection needs;
- MONY's future strategic options will be increased by being a larger
and better diversified company;
- the Advest sales force will enhance MONY's distribution capabilities
through cross-selling and other revenue enhancement possibilities;
- synergies (including reductions in Advest expenses such as those
incident to being a public company) will result from the merger; and
- a combined technology strategy will enhance the capabilities of both
organizations.
MONY's board of directors also considered a number of potentially negative
factors in its deliberations concerning the merger, including that:
- the Producer Retention Plan may be unsuccessful in keeping Advest's
current registered representatives from leaving -- a factor that is
critical to the success of the merger; in this regard, the MONY board
considered that the Producer Retention Plan had received a favorable
response from a select group of Advest's top producing registered
representatives in meetings conducted prior to the board meeting;
- the nature of Advest's business means that its earnings may be
volatile, which would increase the volatility of MONY's consolidated
earnings;
- Advest's earnings momentum and growth has been modest despite the
long bull market in equities; and
- the organizations will need to coordinate two parallel and possibly
conflicting distribution channels.
In view of the wide variety of factors, both positive and negative,
considered by the board of directors of MONY, the board did not find it
practicable to quantify or otherwise assign relative weight to the specific
factors considered in making its determination. However, after taking into
consideration all of the factors set forth above, the board concluded that the
terms of the merger agreement and the merger are in the best interests of MONY.
OPERATIONS FOLLOWING THE MERGER
Upon the consummation of the merger, Advest will continue to keep its
headquarters in Hartford, Connecticut, and will operate under its own brand name
(as a member of the MONY Group) and management structure, with Grant W. Kurtz,
President and Chief Executive Officer of Advest, reporting to Michael I. Roth,
Chairman of the Board and Chief Executive Officer of MONY.
OPINION OF ADVEST'S FINANCIAL ADVISOR
On August 23, 2000, at the meeting of Advest's board of directors, Goldman
Sachs delivered to Advest's board of directors its oral opinion (which was
confirmed in a written opinion dated as of August 23, 2000)
31
<PAGE> 40
that, as of August 23, 2000 and based upon and subject to the matters set forth
in the opinion and such other matters as Goldman Sachs considered relevant, the
consideration to be received for the shares of Advest common stock in the merger
was fair, from a financial point of view, to the holders of Advest common stock.
You should consider the following when reading the discussion of the
opinion of Goldman Sachs in this proxy statement/prospectus:
- we urge you to read carefully the entire opinion of Goldman Sachs,
which is included as Annex D to this proxy statement/prospectus;
- Goldman Sachs's advisory services and opinion were provided to
Advest's board of directors for the information and assistance of
Advest's board of directors in connection with its consideration of
the merger and was directed only to the fairness, from a financial
point of view, to the holders of Advest common stock of the
consideration to be received for the shares of Advest common stock in
the merger;
- Goldman Sachs's opinion does not constitute a recommendation as to
how holders of Advest common stock should vote with respect to the
merger or the form of consideration any holder should request to
receive in the merger; and
- Goldman Sachs expressed no opinion as to the prices at which shares
of MONY common stock may trade in the future.
Although Goldman Sachs evaluated the fairness, from a financial point of
view, to the holders of Advest common stock of the consideration to be received
for the shares of Advest common stock in the merger, the consideration itself
was determined by Advest and MONY through arm's-length negotiations. Advest did
not provide specific instructions to, or place any limitations on, Goldman Sachs
with respect to the procedures to be followed or factors to be considered by
Goldman Sachs in performing its analyses or providing its opinion.
In connection with its opinion, Goldman Sachs reviewed, among other things:
- the merger agreement;
- annual reports to stockholders on Form 10-K of Advest for the five
fiscal years ended September 30, 1999, and annual reports to
stockholders on Form 10-K of MONY for the two years ended December
31, 1999;
- certain interim reports to stockholders of Advest and MONY and
quarterly reports on Form 10-Q of Advest and MONY;
- certain internal financial analyses and forecasts for Advest prepared
by Advest management; and
- certain cost savings and operating synergies projected by the
management of MONY to result from the merger.
Goldman Sachs also held discussions with members of the senior managements
of Advest and MONY regarding the strategic rationale for, and the potential
benefits of, the merger and the past and current business operations, financial
condition and future prospects of their respective companies.
In addition, Goldman Sachs:
- reviewed the reported price and trading activity for the shares of
Advest common stock and the shares of MONY common stock;
- compared certain financial and stock market information for Advest
and MONY with similar information for certain other public companies;
- reviewed the financial terms of certain recent business combinations
in the broker-dealer industry specifically, and in other industries
generally; and
- performed certain other studies and analyses that Goldman Sachs
considered appropriate.
Goldman Sachs relied upon the accuracy and completeness of all of the
financial and other information discussed with or reviewed by it and assumed
such accuracy and completeness for purposes of rendering its opinion. MONY did
not make available its projections of its expected future financial performance.
Goldman Sachs did not make an independent evaluation or appraisal of the assets
and liabilities of Advest or MONY or
32
<PAGE> 41
any of their respective subsidiaries (including any derivative or off balance
sheet assets or liabilities of Advest or MONY or any of their respective
subsidiaries) and Goldman Sachs was not furnished with any such evaluation or
appraisal. Goldman Sachs is not an actuary and its services did not include
actuarial determinations or evaluations with respect to the insurance
subsidiaries of MONY or an attempt to evaluate actuarial assumptions with
respect to the insurance subsidiaries of MONY. Goldman Sachs also assumed that
all material governmental, regulatory or other consents and approvals necessary
for the consummation of the transactions contemplated by the merger agreement
will be obtained without any adverse effect on Advest, MONY or on the
contemplated benefits of the merger.
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Selecting
portions of the analyses or of the summary set forth above, without considering
the analyses as a whole, could create an incomplete view of the processes
underlying the opinion of Goldman Sachs. In arriving at its opinion, Goldman
Sachs considered the results of all the analyses described below and did not
attribute any particular weight to any factor or analysis considered by it;
rather, Goldman Sachs made its determination as to fairness on the basis of its
experience and professional judgment after considering the results of all the
analyses. No company used in the following analyses as a comparison is directly
comparable to Advest or MONY.
Goldman Sachs, as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for estate, corporate and other purposes. Goldman Sachs is
familiar with Advest, having provided certain investment banking services to
Advest from time to time, including having acted as its financial advisor in
connection with, and having participated in certain of the negotiations leading
to, the merger agreement. Goldman Sachs also has provided certain investment
banking services to MONY from time to time, including having acted as co-lead
manager of MONY's initial public offering of 11,250,000 shares of MONY common
stock in November 1998, and co-lead manager in MONY's $300 million offering of
8.35% senior notes due 2010 in March 2000. Goldman Sachs may provide investment
banking services to MONY and its subsidiaries in the future. Goldman Sachs
provides a full range of financial advisory and securities services and, in the
course of its normal trading activities, does from time to time effect
transactions in and hold securities (including derivative securities) of Advest
and/or MONY for its own account and for the accounts of its customers. As of
August 23, 2000, Goldman Sachs and its affiliates held a long position of 1,800
shares of MONY common stock, warrants to purchase 3,555,811 shares of MONY
common stock, and $265,000 aggregate principal amount of MONY's 8.35% senior
notes due 2010.
SUMMARY OF ANALYSIS BY GOLDMAN SACHS
At the meeting of Advest's board of directors on August 23, 2000, Goldman
Sachs made a presentation to the board of directors. The following is a summary
of the material financial analyses in the presentation to Advest's board of
directors. The following quantitative information, to the extent it is based on
market data, is based on market data as it existed at or about August 18, 2000
and is not necessarily indicative of current market conditions. You should
understand that the order of analyses and the results derived from these
analyses described below do not represent relative importance or weight given to
these analyses by Goldman Sachs. The summary of the financial analyses includes
information presented in tabular format. In order to understand fully the
financial analyses used by Goldman Sachs, these tables must be read together
with the text of each summary. The tables alone do not describe completely the
financial analyses.
1. Historical Trading Values Analysis. Goldman Sachs reviewed certain
historical stock price and price-to-earnings multiple information for Advest
common stock. Goldman Sachs compared Advest common stock and Advest's
price-to-earnings multiple on a weekly basis from August 1, 1997 through August
18, 2000 with the following: (i) the S&P 500 index; (ii) a large and mid-size
capitalization broker-dealer index; and (iii) a small capitalization
broker-dealer index.
33
<PAGE> 42
2. Selected Companies Analysis. Goldman Sachs reviewed and compared
certain financial information for Advest to corresponding financial information,
ratios and public market multiples for the following eight small-capitalization,
publicly traded broker-dealers:
- A.G. Edwards;
- Legg Mason;
- Raymond James;
- Dain Rauscher;
- Jefferies Group;
- Morgan Keegan;
- Tucker Anthony;
- Friedman, Billings, Ramsey, and
for six large and mid-capitalization, publicly traded broker-dealers.
The eight small-capitalization companies were chosen, for purposes of
analysis, because they are publicly traded broker-dealer companies with
operations that may be considered similar to Advest. The six large and
mid-capitalization companies were chosen, for purposes of analysis, because they
are publicly traded companies in the broker-dealer industry. Goldman Sachs
calculated and compared various financial information, multiples and ratios,
including:
- closing share price on August 18, 2000 as a percentage of 52-week
high share price;
- estimated 2000 and 2001 price to Institutional Brokers Estimate
System estimated earnings ratios as of July 7, 2000, August 9, 2000
and August 18, 2000;
- Institutional Brokers Estimate System five year growth rate
estimates;
- ratio of 2001 estimated price to earnings ratio to Institutional
Brokers Estimate System's five year growth rate estimate;
- ratio of share price to book value;
- ratio of assets to equity;
- ratio of compensation to pre-tax income and compensation;
- return on average assets for latest 12 months; and
- return on average equity for latest 12 months.
The results of these analyses are summarized as follows:
<TABLE>
<CAPTION>
Selected Large and
Mid-Cap Selected Small-Cap
Broker/Dealer Broker/Dealer
Companies Companies
------------------- -------------------
Ratio/Multiple Advest Median Mean Median Mean
-------------- ------ -------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
August 18, 2000 Stock Price as a Percentage of
52-Week High.................................... 100% N/M N/M N/M N/M
Estimated 2000 Price/Earnings Ratio as of
7/7/00.......................................... 9.4x 12.5x 12.7x 9.7x 10.9x
Estimated 2001 Price/Earnings Ratio as of
7/7/00.......................................... 8.7x 11.9x 12.1x 9.3x 10.2x
Estimated 2000 Price/Earnings Ratio as of
8/9/00.......................................... 12.1x 14.9x 15.0x 11.6x 12.5x
Estimated 2001 Price/Earnings Ratio as of
8/9/00.......................................... 11.3x 14.4x 14.2x 10.8x 11.6x
Estimated 2000 Price/Earnings Ratio as of
8/18/00......................................... 12.6x 14.7x 14.9x 12.5x 13.4x
</TABLE>
34
<PAGE> 43
<TABLE>
<CAPTION>
Selected Large and
Mid-Cap Selected Small-Cap
Broker/Dealer Broker/Dealer
Companies Companies
------------------- -------------------
Ratio/Multiple Advest Median Mean Median Mean
-------------- ------ -------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Estimated 2001 Price/Earnings Ratio as of
8/18/00......................................... 11.7x 14.7x 14.3x 10.9x 11.5x
Institutional Brokers Estimate System Estimated
Five Year Growth Rate........................... 10.0% 12.9% 12.9% 11.8% 11.5%
Estimated 2001 Price/Earnings Ratio to Estimated
Five Year Growth Rate........................... 1.2x 1.2x 1.1x 1.0x 1.0x
Share Price/Book Ratio............................ 1.78x 3.21x 3.46x 1.98x 2.29x
Assets/Equity Ratio............................... 14.5x 29.1x 30.8x 6.7x 6.7x
Compensation/Pre-tax Income and Compensation...... 88.6% 65.9% 65.5% 79.8% 79.6%
Return on Average Assets for Last 12 Months....... 0.93% 0.80% 0.90% 3.45% 3.91%
Return on Average Equity for Last 12 Months....... 12.5% 26.2% 26.8% 19.9% 20.2%
</TABLE>
3. Discounted Cash Flow Analysis. Goldman Sachs performed a discounted
cash flow analysis of the projected distributable cash flows of Advest for the
period of June 30, 2000 through 2005 using the terminal value method. The
following assumptions were used to generate the cash flow projections:
- management projections for the last six months of 2000 and for the
year 2001;
- Institutional Brokers Estimate System estimated long term growth rate
for 2002 through 2005 of 10.0%; and
- a constant capital structure with a 7.5% ratio of equity to assets.
In calculating a range of implied equity value for Advest on a per share
basis, Goldman Sachs used two different terminal value methodologies: one based
on multiples of estimated 2006 net income and one based on multiples of
estimated year end 2005 book value. In both cases, the discount rates ranged
from 11.0% to 16.0%.
The terminal value methodology based on net income used multiples that
ranged from 9.0x to 13.0x. This analyses resulted in implied per share values
for Advest common stock that ranged from $20.91 to $34.30.
The terminal value methodology based on book value used multiples that
ranged from 1.0x to 2.5x. This analyses resulted in implied per share values for
Advest common stock that ranged from $16.51 to $40.95.
4. Analysis of Transaction Price. Goldman Sachs reviewed the premium
and financial multiples and other information implied in the transaction price,
on the assumption that each share of Advest common stock will be exchanged for a
consideration equivalent to $31.00. On this assumption, Goldman Sachs calculated
an implied transaction premium of 8.0% over the closing price of Advest common
stock on August 18, 2000 and an aggregate fully diluted equity consideration in
the merger of $292 million. Additional results of these analyses are as follows:
<TABLE>
<CAPTION>
Multiples
---------
<S> <C>
Multiple of Net Revenues:
Latest 12 Months ending 6/30/2000......................... 0.8x
Multiple of Retail Revenue:
Advest management projections for 2000.................... 1.2x
Multiple of Net Income:
Latest 12 Months ending 6/30/2000......................... 15.4x
Advest management projections for 2000.................... 14.3
Advest management projections for 2001.................... 12.2
Institutional Brokers Estimate System estimates for
2000................................................... 13.5
Institutional Brokers Estimate System estimates for
2001................................................... 12.4
</TABLE>
35
<PAGE> 44
<TABLE>
<CAPTION>
Multiples
---------
<S> <C>
P/E Multiple/Growth Rate:
Institutional Brokers Estimate System estimated long term
growth rate for 2000................................... 1.3x
Multiple of Book Value (June 30, 2000):..................... 2.0x
Premium to Net Revenues:
Latest 12 Months ending 6/30/2000......................... 0.4x
Premium to Retail Revenue:
Advest management projections for 2000.................... 0.6x
Consideration to assets under management.................... 1.1%
Consideration per Broker.................................... $555,000
</TABLE>
5. Selected Transactions Analysis. Goldman Sachs analyzed certain
information relating to 25 broker/dealer transactions since 1997.
Goldman Sachs' analyses of the selected transactions compared the following
to the results for the proposed merger (excluding and including as part of the
total value of the merger an estimated retention pool of $55 million):
- excluding the estimated $55 million retention pool from the total
value of the merger, the premium over market price twenty business
days and five business days prior to announcement;
- aggregate consideration as a percentage of assets under management;
- aggregate consideration divided by the number of brokers;
- aggregate consideration as a multiple of latest twelve months
revenues;
- aggregate consideration as a multiple of latest twelve months net
income;
- aggregate consideration as a multiple of net income for the year
following the year of announcement of the transaction (without
synergies);
- aggregate consideration as a multiple of net income for the year
following the year of announcement of the transaction (with estimated
synergies);
- aggregate consideration as a multiple of the book value; and
- estimated retention pool as percentages of the latest twelve month
revenues, as well as the cash and stock composition of such retention
pool.
6. Other Factors and Analyses. In its presentation to Advest's board
of directors, Goldman Sachs reviewed other factors and analyses, including:
- published research analyst views and comments regarding MONY;
- an analysis of MONY common stock price compared to composites of
selected large and mid capitalization insurance companies, small
capitalization insurance companies and the S&P 500 on a weekly basis
from November 13, 1998 through August 18, 2000;
- an analysis of the one year forward Institutional Brokers Estimate
System estimated price to earnings ratio of MONY compared to a
composite of selected large and mid capitalization insurance
companies, small capitalization insurance companies and the S&P 500
on a weekly basis from November 13, 1998 through August 18, 2000; and
- an analysis of MONY common stock price and trading volume on a daily
basis from August 17, 1999 through August 18, 2000.
Goldman Sachs prepared these analyses solely for purposes of advising
Advest's board of directors, and they do not purport to be appraisals, nor do
they necessarily reflect the prices at which businesses or securities actually
may be sold. Analyses based upon forecasts of future results are not necessarily
indicative of actual
36
<PAGE> 45
future results, which may be significantly more or less favorable than suggested
by these analyses. Because these analyses are inherently subject to uncertainty
and are based upon numerous factors or events beyond the control of the parties
or their respective advisors, none of Advest, MONY or Goldman Sachs assumes
responsibility if future results are materially different from those forecasted.
As described above, the opinion of Goldman Sachs to the Advest board was one of
many factors taken into consideration by the Advest board in making its
determination to approve the merger agreement. The foregoing summary does not
purport to be a complete description of the analyses performed by Goldman Sachs.
Pursuant to a letter agreement dated August 9, 2000 between Advest and
Goldman Sachs, Advest engaged Goldman Sachs to act as its exclusive financial
advisor in connection with the possible sale of all or a majority of Advest.
Pursuant to the terms of this letter, if the merger is consummated, Advest will
pay Goldman Sachs a transaction fee of 1% of the aggregate consideration paid in
the merger.
In addition, Advest has agreed to reimburse Goldman Sachs periodically,
upon request, and upon consummation of the merger or upon termination of its
services pursuant to the letter agreement, for its reasonable out-of-pocket
expenses, including the fees and disbursements of Goldman Sachs' attorneys, plus
any sales, use or similar taxes (including additions to such taxes, if any)
arising in connection with any matter referred to in the letter, which
out-of-pocket expenses may not exceed $100,000 without Advest's prior consent.
Advest has also agreed to indemnify Goldman Sachs and certain related persons
against certain liabilities in connection with its engagement, including
liabilities under the federal securities laws.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
In considering the recommendation of Advest's board of directors with
respect to the merger proposal, Advest stockholders should be aware that the
directors and executive officers of Advest may be deemed to have interests in
the merger that are in addition to their interests as Advest stockholders
generally. Advest's board of directors was aware of these interests and
considered them, among other matters, in approving the merger.
New Employment Agreement with Grant W. Kurtz. In connection with entering
into the merger agreement, MONY and Advest entered into a new employment
agreement with Mr. Grant W. Kurtz that replaces his current employment agreement
with Advest. The term of the agreement begins upon the consummation of the
merger and continues through the fifth anniversary of the date of the merger. At
the end of the fifth anniversary, the term of the agreement will automatically
extend one additional year on each anniversary thereafter, unless one of the
parties notifies the other 90 days prior to such anniversary that it will not
extend the agreement.
Under the employment agreement, Mr. Kurtz will serve as Chief Executive
Officer of Advest. During the term of the employment agreement, Mr. Kurtz will
be entitled to receive a base salary of not less than $450,000 per year,
continued participation under Advest's current Management Incentive Plan or any
successor plan with bonus opportunities substantially similar to those provided
prior to the merger and percentage of awards consistent with percentages
provided prior to the merger, no less than 10% of the bonus pool established
under the new Merger Management Incentive Plan, described below, and a grant of
2,000 performance share units under the MONY Life Long Term Performance Share
Plan. Mr. Kurtz will also be entitled to perquisites and fringe benefits
generally available to officers of his rank at MONY, all employee benefits in
effect for senior executive officers at Advest during the term of the agreement,
retiree medical coverage substantially identical to coverage in effect for
senior executive officers at MONY Life, a ten-year $200,000 per year
supplemental retirement benefit, and a split-dollar life insurance policy.
In the event that Mr. Kurtz's employment is terminated for reason of death
or disability, or in the event that his employment is terminated by Advest
without cause or by Mr. Kurtz for good reason, for the greater of one year or
the remaining term of employment, Advest will pay to Mr. Kurtz a lump-sum
payment equal to his then current base salary and three-year average bonus (or
such shorter applicable period) commencing with his bonus for the Advest fiscal
year ending in 2000 and assuming for purposes of the severance payment an annual
bonus for the three-year averaging period of at least $400,000, plus the highest
amount which Mr. Kurtz is eligible to receive pursuant to the Merger Management
Incentive Plan, described below. In
37
<PAGE> 46
addition, all of Mr. Kurtz's outstanding equity awards will vest in full and all
restrictions will lapse, and the awards will remain exercisable for a period
equal to the later of one year or the end of the term of the agreement, subject
to the terms of the applicable plan. During that period, he will continue to
receive the benefits he is entitled to under the agreement and the split-dollar
life insurance policy maintained for Mr. Kurtz will continue in effect. If any
amounts payable to Mr. Kurtz under the employment agreement or otherwise would
be subject to the golden parachute excise tax under section 4999 of the Internal
Revenue Code, an additional gross-up payment will be made so that after the
payment of all income and excise taxes, Mr. Kurtz will be in the same after-tax
position as if no excise tax under section 4999 had been imposed.
Under the terms of the agreement, Mr. Kurtz has agreed not to disclose any
confidential information about MONY or Advest or any of their affiliates at any
time. During the term of the agreement and for the one-year period following the
term of the agreement, Mr. Kurtz has agreed that, unless he is terminated by
Advest or MONY without cause, or he terminates employment for good reason, he
will not engage in any business in Hartford, Connecticut which is substantially
competitive with the business then actively conducted by Advest. Mr. Kurtz has
also agreed that, for the same period, he will not solicit or otherwise induce
any person employed by Advest to terminate his or her employment with Advest,
hire a current Advest employee or field underwriter, or solicit the clients,
customers or active prospects of Advest.
Change in Control Employment Agreement with Grant W. Kurtz. In connection
with entering into the merger agreement, MONY Life entered into an employment
agreement with Mr. Kurtz, applicable in the event of a change in control of MONY
Life. The term of the agreement begins upon the consummation of the merger and
continues through December 31, 2001, but will automatically be extended from
year to year unless MONY Life notifies Mr. Kurtz that it does not wish to extend
the agreement. If a change in control occurs prior to the original or extended
expiration date of the agreement, the expiration date will automatically be
extended to the third anniversary of the last day of the month in which the
change in control occurred. For all services rendered during the period of
employment following a change in control, Mr. Kurtz will receive a guaranteed
annual base compensation, a guaranteed bonus, incentive compensation,
perquisites, fringe benefits and employee benefits at least equal to those in
effect immediately prior to the date of the change in control.
In the event of a termination by Advest of Mr. Kurtz's employment during
the term of the agreement without cause or by Mr. Kurtz for good reason, Advest
will pay to Mr. Kurtz a lump-sum payment equal to three times the sum of his
annual base salary and his average annual bonus in effect on the date of
termination. This amount will be reduced by any severance payments to Mr. Kurtz
under any other employment contract or severance arrangement with Advest. Advest
will also pay to Mr. Kurtz a pro rata annual incentive bonus amount for the
partial year of service in which the date of termination occurs, and all
outstanding equity awards will fully vest and all restrictions will lapse, and
the awards will remain exercisable for a period equal to the later of one year
or the termination date of the agreement (or such later date provided for in the
applicable plan). Mr. Kurtz will also receive a payment equal to the aggregate
present value of Advest's portion of the cost for medical and dental benefits,
retiree medical benefits and life insurance benefits that he would have been
eligible for had he remained an employee of Advest, and he will receive
continued coverage under the disability plan, the life insurance plan, optional
survivors' insurance plan and the split dollar life insurance plan. Finally, Mr.
Kurtz will be entitled to receive the supplemental retirement benefits described
in his employment agreement. If any amounts payable to Mr. Kurtz under the
change in control employment agreement or otherwise would be subject to the
golden parachute excise tax under section 4999 of the Internal Revenue Code, an
additional gross-up payment will be made so that after the payment of all income
and excise taxes, Mr. Kurtz will be in the same after-tax position as if no
excise tax under section 4999 had been imposed.
Under the terms of the agreement, Mr. Kurtz has agreed not to disclose any
confidential information about MONY or Advest or any of their affiliates at any
time. During the term of the agreement and for the one-year period following the
term of the agreement, Mr. Kurtz has agreed that he will not engage in any
business which is substantially competitive with any business then actively
conducted by MONY or Advest or any of their affiliates, or consult with or
advise any competitive business.
38
<PAGE> 47
Executive Agreements. In connection with entering into the merger
agreement, MONY and Advest have entered into executive agreements with Messrs.
John C. Giesea, Harry H. Branning, Martin M. Lilienthal, Allen Botwinick, Lee G.
Kuckro and Daniel Mullane that provide for certain severance benefits following
the consummation of the merger. The agreements provide that if, within five
years following the merger, an executive's employment is terminated by Advest or
MONY other than for cause or the executive terminates employment for good
reason, the executive will receive a lump-sum cash payment equal to the sum of
(a) his annual base salary which is accrued but unpaid as of the date of
termination, (b) the executive's incentive compensation under Advest's current
Management Incentive Plan or any successor program thereto which is earned but
unpaid with respect to the fiscal year ending prior to the date of termination,
(c) a pro rata amount in respect of the annual incentive compensation that the
executive would have earned for the partial year of service in which the date of
termination occurs, based upon the average of the annual awards under Advest's
current Management Incentive Plan for the last three fiscal years prior to the
date of termination, (d) a payment equal to the salary that the executive would
have been entitled to under the agreement had he remained employed by Advest for
the remainder of the five-year period following the merger, based upon the
executive's average annual base salary measured over the last three full fiscal
years completed prior to the merger, (e) all equity awards will vest in full and
will remain exercisable for not less than 90 days, (f) through the fifth
anniversary of the merger or the first anniversary of the date of termination,
if greater, the executive will continue to participate in all incentive, savings
and retirement plans applicable to Advest employees and will continue to receive
benefits under all welfare benefit plans, practices, policies and programs
applicable to other senior executives of Advest; however, any amounts paid for
these benefits will be reduced by any similar benefits earned by the executive
as a result of employment by another employer, and (g) the executive will
receive additional benefits, over and above that which he would normally be
entitled to under Advest's Nonqualified Executive Post Employment Income Plan
equal to the benefits that the executive would have earned under such plan or
plans had he accumulated additional years of service through the fifth
anniversary of the merger.
If any amounts payable to an executive under the agreements or otherwise
would be subject to the golden parachute excise tax under section 4999 of the
Internal Revenue Code, an additional gross up payment will be made so that after
the payment of all income and excise taxes, the executive would be in the same
after-tax position as if no excise tax under section 4999 had been imposed.
Under the terms of the applicable agreement, the executive has agreed not
to disclose any confidential information about MONY or Advest or any of their
affiliates at any time. During the term of the agreement and for the one-year
period following the term of the agreement, the executive has agreed that,
unless he is terminated by Advest or MONY without cause, or he terminates
employment for good reason, he will not engage in any business in Hartford,
Connecticut which is substantially competitive with the business then actively
conducted by Advest. The executive has also agreed that, for the same period, he
will not solicit or otherwise induce any person employed by Advest to terminate
his or her employment with Advest, hire a current Advest employee or field
underwriter, or solicit the clients, customers or active prospects of Advest.
Advest Stock-Based Rights. As described under the subheading "Advest Stock
Options," the merger agreement provides that each outstanding option to purchase
shares of Advest common stock granted under Advest's stock-based plans, whether
or not then vested or excercisable, will be cancelled in consideration of a cash
payment immediately prior to the merger. In addition, as described under the
subheading "Advest Restricted Stock," the merger agreement provides that 50% of
each restricted stock award, deferred stock award or other stock-based award
(other than options) that is subject to any vesting requirement that would not
be accelerated as a result of the merger will become fully vested and converted
into a right to receive a cash payment. The remaining 50% of each outstanding
award described above will be automatically converted into an award to receive a
number of shares of MONY stock equal to the exchange ratio, subject to the same
vesting provisions as the original Advest stock awards.
39
<PAGE> 48
The following information is current as of September 20, 2000 and assumes
an applicable average closing price for MONY common stock of $35:
- The number of all outstanding stock options to acquire shares of
Advest common stock held by Messrs. Botwinick, Boujoukos, Branning,
Giesea, Kuckro, Kurtz, Lilienthal and Mullane that will be cancelled
in exchange for a cash payment in connection with the merger is
16,740, 30,782, 45,226, 36,245, 12,174, 63,084, 17,876 and 40,467,
respectively.
- The cash payment that will be received in consideration of the
cancellation of all outstanding stock options held by Messrs.
Botwinick, Boujoukos, Branning, Giesea, Kuckro, Kurtz, Lilienthal and
Mullane in connection with the merger is $219,034, $477,846,
$574,060, $538,802, $165,197, $854,806, $246,767 and $502,360,
respectively.
- The cash payment that will be received in consideration of the
cancellation of 50% of all outstanding restricted stock awards held
by Messrs. Botwinick, Boujoukos, Branning, Giesea, Kuckro, Kurtz,
Lilienthal and Mullane in connection with the merger is $164,595,
$250,651, $157,619, $413,276, $57,676, $268,879, $64,046 and $59,427,
respectively.
- The number of shares of Advest common stock underlying awards of
restricted stock held by Messrs. Botwinick, Boujoukos, Branning,
Giesea, Kuckro, Kurtz, Lilienthal and Mullane that will be converted
into shares of restricted stock of MONY in connection with the merger
is 5,310, 8,085, 5,084, 13,332, 1,861, 8,673, 2,066 and 1,917,
respectively.
- The aggregate number of stock options to acquire shares of Advest
common stock held by the members of the Advest board of directors
(other than members who are executive officers as described above)
that will be cancelled in connection with the merger and the
aggregate cash payment to be received in consideration of that
cancellation is 67,603 and $877,600, respectively.
Under the Non-Employee Director Equity Plan, a portion of the annual
retainer and per meeting fee of each non-employee director is deferred and, at
the conclusion of the deferral period, is paid in shares of Advest common stock.
The number of shares paid is based on the market value at the time of deferral.
Under the terms of the Non-Employee Director Equity Plan, all shares deferred
under the plan will be delivered to the non-employee directors in connection
with the cessation of their service on the Advest board at the time of the
merger. The plan will be amended to provide that the non-employee directors will
receive the shares of Advest common stock to which they are entitled prior to
the election deadline of the merger in order for the shares to be treated in the
same manner as other shares of Advest common stock in the merger. The aggregate
number of shares of Advest common stock and the aggregate cash value of the
shares under the plan that will be delivered to the non-employee directors in
connection with the consummation of the merger is 13,344 shares and $413,664,
respectively.
Key Employee Incentive Plan. In order to incentivize designated executive
officers, management personnel and other key employees for the performance of
Advest following the merger, Advest will implement a new Key Employee Incentive
Plan. Under the terms of the plan, Advest will establish two incentive pools
that are payable in cash to participants upon the achievement by the Advest
Private Client Group and Advest in fiscal years 2001 and 2002 of certain
performance goals including increases in Advest's net income beyond levels
previously achieved. The aggregate maximum amount payable under the pools is
$15,000,000. A participant must be employed on the last day of the applicable
performance period to be eligible for payment. All payments will be made in a
cash lump sum, and any amounts forfeited by terminating employees will be
reallocated to the remaining participants.
Upon the termination of a participant's employment by Advest for cause, all
rights under the plan will be forfeited. If a participant's employment is
terminated for reason of death or disability, or by Advest without cause, the
participant will be paid a pro rata payment based on the partial period of
service and estimated results through the date of termination. Upon a voluntary
termination of employment by the participant, all rights will be forfeited,
except in the case of a participant who is subject to an employment agreement
and who terminates for "good reason," in which case a pro rata payment will be
made.
40
<PAGE> 49
As consideration for the right to participate in the plan, participants
will be required to agree not to disclose confidential information of Advest or
MONY or any of their affiliates, not to solicit Advest clients, customers,
active prospects or employees, and not to compete with Advest in Hartford,
Connecticut during their employment and for a one-year period following
employment.
Retention/Incentive Program. In connection with the merger, Advest and
MONY will establish a retention pool, payable upon the closing of the merger, in
an aggregate amount of up to $10 million to be allocated among certain
registered representatives in Advest's Private Client Group on the payroll as of
August 1, 2000, selected by Advest's CEO with the approval of MONY. In addition
to the $10 million retention pool, an aggregate of $45 million may be allocated
to retention incentives for participants upon or after the consummation of the
merger. Receipt or retention of these allocated amounts will be conditioned upon
each participant entering into and honoring a restrictive covenant agreement and
upon the participants' remaining employed by Advest incrementally over a
five-year period, subject to certain exceptions in the case of termination by
Advest of a participant's employment without cause or upon death or disability.
Under the terms of the plan, certain participants will also be eligible to earn
production bonuses in the aggregate amount of $5 million. The amount of the
payments will be based on the achievement of production increase targets from
Advest's 2000 production year to its 2001 production year.
Letter Agreement with Allen Weintraub. On August, 23, 2000, Advest entered
into a letter agreement with Mr. Weintraub which amended the letter agreement
between Mr. Weintraub and Advest, dated January 28, 1999, by increasing the
supplemental executive retirement plan benefit payable to Mr. Weintraub under
the agreement to $300,000 and eliminating his right to designate the charitable
contribution to be made by Advest.
Letter Agreement with George A. Boujoukos. On August 23, 2000, Advest
entered into a letter agreement with Mr. Boujoukos pursuant to which Advest
agreed to pay Mr. Boujoukos, within 10 days following his termination of
employment from Advest for any reason following the closing date of the merger,
a lump-sum amount equal to one times his annual rate of base salary at the time
of the merger.
Indemnification and Insurance. After the effective time of the merger,
MONY has agreed to indemnify, to the fullest extent permitted by the certificate
of incorporation and the bylaws of Advest or its subsidiaries and by applicable
law, the directors and officers of Advest or any of Advest's subsidiaries
against any losses in connection with any threatened or actual claim arising out
of or pertaining to the fact that the indemnified party is or was a director or
officer of Advest or any of its subsidiaries, or arising out of or pertaining to
the merger agreement, any of the transactions contemplated by the merger
agreement, and all actions taken by an indemnified party in connection with the
merger agreement. MONY has also agreed, among other things, that all rights to
indemnification and all limitations of liability existing in the governing
documents of Advest or its subsidiaries that were in effect on the date of the
merger agreement with respect to matters occurring on or prior to the effective
time of the merger will survive the merger and will continue to be in full force
and effect for a period of six (6) years after the consummation of the merger
without being amended. MONY is required by the merger agreement, for a period of
six (6) years from the consummation of the merger, to use its reasonable best
efforts to cause the persons serving as officers and directors of Advest
immediately prior to the effective time of the merger to be covered by the
directors' and officers' liability insurance policy maintained by Advest. MONY
may substitute the existing policy with policies that have at least the same
coverage and amounts and contain terms and conditions that are not less
advantageous to the Advest directors and officers than the terms and conditions
of the existing policy. However, MONY will not be required to spend, in any one
year, an amount exceeding 200% of the annual premiums currently paid by Advest
for such insurance. If MONY is unable to maintain or obtain the insurance
described in this paragraph because the costs that will be incurred in this
regard exceed 200% of the annual premiums currently paid by Advest for such
insurance, MONY is required to use its reasonable best efforts to obtain as much
comparable insurance as is available.
In addition, in Mr. Kurtz's employment agreement and change in control
employment agreement described above, Advest agrees, to, among other things,
indemnify Mr. Kurtz, to the extent permitted by applicable law, against certain
civil and criminal liabilities that arise by reason of his status or service as
a
41
<PAGE> 50
director and/or officer of Advest. The change in control employment agreement
provides that Advest will continue to maintain indemnification policies for Mr.
Kurtz for a period of six (6) years following the termination of his employment.
ACCOUNTING TREATMENT
The merger will be accounted for by MONY under the purchase method of
accounting in accordance with Accounting Principles Board Opinion No. 16,
"Business Combinations," as amended. Purchase accounting for a merger is the
same as the accounting treatment used for the acquisition of any group of
assets. Therefore, the purchase price will be allocated to the assets and
liabilities of Advest based on their estimated fair market values at the date of
acquisition, and any excess of the purchase price over such fair market values
will be accounted for as goodwill. The financial statements of the combined
company will reflect the combined operations of MONY and Advest from the date of
the merger.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
Norman Sinrich, Esq. has provided an opinion to MONY, and Wachtell, Lipton,
Rosen & Katz and Day, Berry & Howard LLP have provided opinions to Advest,
regarding the material federal income tax consequences of the merger. These
opinions have been filed with the SEC as exhibits to the registration statement
related to this proxy statement/prospectus. The opinions rely on assumptions,
including assumptions regarding the absence of changes in existing facts and the
completion of the merger in accordance with the proxy statement/prospectus and
the merger agreement. The opinions also rely on representations and covenants,
including those contained in officer's certificates of MONY and Advest. If any
of these assumptions, representations or covenants are inaccurate, the
conclusions contained in the opinions could be affected.
The opinions described above are to the effect that the merger will
constitute a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code. Accordingly, the material federal income tax consequences
of the Merger will be as follows:
- Holders Receiving Only MONY Common Stock. No gain or loss will be
recognized by a holder of Advest common stock as a result of the
surrender of shares of Advest common stock solely in exchange for
shares of MONY common stock pursuant to the merger, if such holder
receives no cash pursuant to the merger, except as discussed below
with respect to cash received in lieu of fractional shares of MONY
common stock. The aggregate tax basis of the shares of MONY common
stock received in the merger (including any fractional shares of MONY
common stock deemed received) will be the same as the aggregate tax
basis of the shares of Advest common stock surrendered in exchange
for the MONY common stock. The holding period of the shares of MONY
common stock received will include the holding period of shares of
Advest common stock surrendered in exchange for the MONY common
stock.
- Holders Receiving Only Cash. A holder of Advest common stock that
does not receive any shares of MONY common stock pursuant to the
merger will generally recognize gain or loss equal to the difference
between the amount of cash received and the holder's adjusted tax
basis in the shares of Advest common stock exchanged in the merger.
Such gain or loss will generally be a capital gain or loss, and will
generally be a long-term capital gain or loss to the extent that, at
the effective time of the merger, the holder has a holding period in
such Advest common stock of more than one year. However, if the
holder of Advest stock is not treated as completely terminating such
holder's interest in the Advest stock because of the application of
the constructive ownership rules of the Internal Revenue Code (as
described below), under certain circumstances the full amount of cash
received may be treated as a dividend to the extent of undistributed
earning and profits immediately prior to the merger.
- Holders Receiving Both Cash and MONY Common Stock. If a holder of
Advest common stock receives both MONY common stock and cash (other
than cash in lieu of a fractional interest in MONY common stock) in
the merger, such holder will recognize gain equal to the lesser of
(i) the amount of cash received and (ii) the amount by which the sum
of the amount of cash received and
42
<PAGE> 51
the value of the MONY common stock received exceeds the holder's
adjusted tax basis in the shares of Advest common stock exchanged in
the merger. If the tax basis in shares of Advest common stock exceeds
the sum of the amount of cash received and the value of the MONY
common stock received, such a holder will not recognize loss. Any
such recognized gain will generally be capital gain unless the
holder's exchange of Advest common stock for cash and MONY common
stock "has the effect of the distribution of a dividend" after giving
effect to the constructive ownership rules of the Internal Revenue
Code which provide that a holder may be treated as owning stock
actually owned, and in some cases constructively owned, by certain
individuals or entities related to the holder and stock that the
holder had the right to acquire by the exercise of an option or
conversion right. Under these rules, a holder is treated as
exchanging all the holder's Advest common stock for MONY common stock
and receiving cash in redemption of a portion of such MONY common
stock deemed received. Such gain should generally be capital gain to
a holder of Advest common stock that, following the merger, actually
or constructively owns only a small percentage of the total
outstanding MONY common stock and exercises no control over MONY's
affairs. The capital gain recognized will be long-term capital gain
to the extent that, at the effective time of the merger, the holder
has a holding period in the Advest common stock exchanged in the
merger of more than one year. The aggregate tax basis to such a
holder of the shares of MONY common stock received in the merger
(including any fractional shares of MONY common stock deemed
received) will be the same as the aggregate tax basis of the shares
of Advest common stock surrendered in exchange therefor in the
merger, increased by the amount of gain recognized and reduced by the
amount of cash received. The holding period of the shares of MONY
common stock received will include the holding period of Advest
shares of common stock surrendered in exchange for the MONY common
stock.
- Holders Receiving Cash In Lieu of a Fractional Share. Holders of
Advest common stock who receive cash in lieu of a fractional share of
MONY common stock should be treated as having received the fractional
share in the merger and then as having the fractional share redeemed
by MONY. These holders should generally recognize gain or loss equal
to the difference between the tax basis of the fractional share and
the amount of cash received. The gain or loss generally will be
capital gain or loss and long-term capital gain or loss if the Advest
stock exchanged has been held for more than one year.
The parties will not be required to consummate the merger unless they
receive reconfirmation of the opinions of their respective counsel described
above as of the effective time of the merger. In reconfirming its opinion as of
the effective time of the merger, counsel may reasonably rely upon the officer's
certificates of MONY and Advest given in connection with the opinions of counsel
described above, updated as necessary.
The tax consequences summarized above assume that you hold your shares of
Advest common stock as capital assets. Further, this discussion does not address
all of the federal income tax consequences that may be important to you in light
of your particular circumstances; nor does this discussion address the federal
income tax consequences that may be applicable to taxpayers subject to special
treatment under the Internal Revenue Code, such as insurance companies;
financial institutions; dealers in securities; traders in securities that elect
to apply the mark to market method of accounting; tax-exempt organizations;
stockholders who hold their shares as part of a hedge, constructive sale,
straddle or conversion transaction; stockholders who acquired their shares
through the exercise of options or otherwise as compensation or through a
tax-qualified retirement plan; and foreign persons.
No information is provided in this document or the tax opinions referred to
above with respect to the tax consequences, if any, of the merger under
applicable foreign, state, local and other tax laws. This discussion and the tax
opinions are based upon the provisions of the Internal Revenue Code, applicable
Treasury regulations, IRS rulings and judicial decisions, as in effect as of the
date of this document. There can be no assurance that future legislative,
administrative or judicial changes or interpretations, which changes could apply
retroactively, will not affect the accuracy of this discussion or the statements
or conclusions set forth in the tax opinions referred to above. No rulings have
been or will be sought from the IRS concerning the tax consequences of the
merger, and none of the opinions of counsel received in connection with the
merger will be binding on the IRS.
43
<PAGE> 52
THE PRECEDING SUMMARY DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OR
DISCUSSION OF ALL POTENTIAL TAX EFFECTS RELEVANT TO THE MERGER. ACCORDINGLY,
ADVEST STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE
SPECIFIC TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING TAX RETURN REPORTING
REQUIREMENTS, THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS AND THE EFFECT OF ANY PROPOSED CHANGES IN THE TAX LAWS.
REGULATORY MATTERS
The Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the rules and
regulations promulgated under the Hart-Scott-Rodino Act, prohibit MONY and
Advest from consummating the merger until they notify and furnish information to
the Federal Trade Commission and the Antitrust Division of the United States
Department of Justice and specified waiting period requirements are satisfied.
MONY and Advest each filed a Notification and Report Form under the
Hart-Scott-Rodino Act with the Federal Trade Commission and the Antitrust
Division on September 18, 2000. The specified waiting period was terminated on
September 29, 2000.
At any time before or after the completion of the merger, the Antitrust
Division or the FTC could take any action under the antitrust laws as it deems
necessary or desirable in the public interest, including seeking to enjoin the
consummation of the merger or seeking the divestiture of substantial assets of
MONY or Advest. Private parties and the state attorneys general may also bring
actions under the U.S. antitrust laws. Although MONY and Advest believe that the
merger is legal under the U.S. antitrust laws, there can be no assurance that a
challenge to the merger on antitrust grounds will not be made or, if such a
challenge is made, that it would not be successful.
In addition, the Home Owners' Loan Act of 1933 and the rules of the
National Association of Securities Dealers, Inc. prohibit MONY and Advest from
consummating the merger until they have filed applications with, and obtained
approval of the merger from, the Office of Thrift Supervision and the National
Association of Securities Dealers, Inc., respectively. Advest filed an
application with the National Association of Securities Dealers, Inc. on
September 27, 2000. MONY filed an application with the Office of Thrift
Supervision on October 2, 2000. On October 6, 2000, the National Association of
Securities Dealers, Inc. granted its approval of the merger. MONY and Advest are
required to receive the approval of the Office of Thrift Supervision before the
merger can be consummated. If any additional material governmental approvals or
actions are required, the parties presently intend to seek those approvals or
actions. There can be no assurance, however, that the parties will obtain these
additional approvals or actions.
Although MONY and Advest believe that the merger will be approved by the
Office of Thrift Supervision, there can be no assurance that the merger will not
be challenged by the Office of Thrift Supervision or, if such a challenge is
made, that it would not be successful or that the consummation of the merger
will not be delayed.
APPRAISAL RIGHTS
The following summary of the provisions of Section 262 of the Delaware
General Corporation Law is not intended to be a complete statement of the
provisions and is qualified in its entirety by reference to the full text of
Section 262 of the Delaware General Corporation Law, a copy of which is attached
to this proxy statement/prospectus as Annex E and is incorporated into this
summary by reference.
Under Section 262 of Delaware General Corporation Law, appraisal rights
shall generally be available for the shares of any class or series of stock of a
constituent corporation if the holders thereof are required by the terms of the
agreement of merger to accept for such stock anything except (i) shares of stock
of the corporation surviving or resulting from the merger; (ii) shares of stock
of certain other corporations; (iii) cash in lieu of fractional shares; or (iv)
any combination of shares of stock, depository receipts and cash in lieu of
fractional shares.
Advest stockholders wishing to exercise appraisal rights must strictly
comply with the rules governing the exercise of appraisal rights or may lose
these rights of appraisal.
If the merger is consummated, each Advest stockholder who (1) files with
Advest a written demand for appraisal of his or her shares prior to the taking
of the vote on the merger, and (2) follows the procedures set
44
<PAGE> 53
forth in Section 262 of the Delaware General Corporation Law, will be entitled
to be paid by MONY for his or her shares of Advest common stock the fair value
in cash of the shares of Advest common stock, as the case may be. All written
demands for appraisal rights should be mailed or delivered to The Advest Group,
Inc., 90 State House Square, Hartford, Connecticut, 06103, Attention: Corporate
Secretary. The fair value of shares of Advest common stock will be determined by
the Delaware Court of Chancery, exclusive of any element of value arising from
the merger. The shares of Advest common stock with respect to which holders have
perfected their appraisal rights in accordance with Section 262 of the Delaware
General Corporation Law and have not effectively withdrawn or lost their
appraisal rights are referred to in this section as the "dissenting shares."
Within ten days after the effective date of the merger, MONY Acquisition
Corp., as the surviving corporation in the merger, must mail a notice to all
stockholders who have complied with (1) above notifying such stockholders of the
effective date of the merger. Within 120 days after the effective date of the
merger, holders of shares of Advest common stock may file a petition in the
Delaware Court of Chancery for the appraisal of their shares, although they may,
within 60 days of the effective date of the merger, withdraw their demand for
appraisal. Within 120 days of the effective date of the merger, the holders of
dissenting shares may also, upon written request, receive from MONY Acquisition
Corp. a statement setting forth the aggregate number of shares not voted in
favor of the merger and with respect to which demands for appraisals have been
received and the aggregate number of holders of such shares.
Appraisal rights are available only to the holder of record of shares. If
an Advest stockholder wishes to exercise appraisal rights but has a beneficial
interest in shares which are held of record by or in the name of another person,
such as a broker or nominee, the Advest stockholder should act promptly to cause
the holder of record to follow the procedures set forth in Section 262 of the
Delaware General Corporation Law to perfect the Advest stockholder's appraisal
rights.
A demand for appraisal should be signed by or on behalf of the Advest
stockholder exactly as the stockholder's name appears on the stockholder's stock
certificates. If the shares are owned of record in a fiduciary capacity, such as
by a trustee, guardian or custodian, the demand should be executed in that
capacity, and if the shares are owned of record by more than one person, as in a
joint tenancy or tenancy in common, the demand should be executed by or on
behalf of all joint owners. An authorized agent, including one or more joint
owners, may execute a demand for appraisal on behalf of a record holder;
however, in the demand the agent must identify the record owner or owners and
expressly disclose that the agent is executing the demand as an agent for the
record owner or owners. A record holder such as a broker who holds shares as
nominee for several beneficial owners may exercise appraisal rights for the
shares held for one or more beneficial owners and not exercise rights for the
shares held for other beneficial owners. In this case, the written demand should
state the number of shares for which appraisal rights are being demanded. When
no number of shares is stated, the demand will be presumed to cover all shares
held of record by the broker or nominee.
If any holder of shares of Advest common stock who demands appraisal of his
or her shares under Section 262 of the Delaware General Corporation Law fails to
perfect, or effectively withdraws or loses the right to appraisal, his or her
shares will be converted into a right to receive the consideration with respect
to the holder's dissenting shares in accordance with the merger agreement.
Dissenting shares lose their status as dissenting shares if:
- the merger is abandoned;
- the dissenting stockholder fails to make a timely written demand for
appraisal;
- the dissenting shares are voted in favor of the merger;
- neither MONY Acquisition Corp. nor the stockholders files a complaint
or intervenes in a pending action within 120 days after the effective
date of the merger; or
- the stockholder delivers to MONY Acquisition Corp., as the surviving
corporation, within 60 days of the effective date of the merger, or
thereafter, with MONY Acquisition Corp.'s approval, a written
withdrawal of the stockholder's demand for appraisal of the
dissenting shares, although no appraisal proceeding in the Delaware
Court of Chancery may be dismissed as to any stockholder without the
approval of the court.
45
<PAGE> 54
Failure to follow the steps required by Section 262 of the Delaware General
Corporation Law for perfecting appraisal rights may result in the loss of
appraisal rights, in which event the Advest stockholder will be entitled to
receive the consideration with respect to the holder's dissenting shares in
accordance with the merger agreement. In view of the complexity of the
provisions of Section 262 of the Delaware General Corporation Law, holders of
Advest common stock who are considering objecting to the merger should consult
their own legal advisors.
Any Form of Election submitted by a dissenting stockholder will be invalid
and will be rejected. If any dissenting stockholder ceases to be a dissenting
stockholder but does not submit a valid Form of Election prior to the election
deadline, each Advest common share held by that dissenting stockholder will be
treated as a share for which the stockholder has indicated no preference as to
the receipt of cash or MONY common stock.
STOCK TRANSFER RESTRICTION AGREEMENTS
This document does not cover any resales of the MONY common shares to be
received by Advest's stockholders upon consummation of the merger, and no person
is authorized to make any use of this document in connection with any such
resale.
All MONY common shares received by Advest stockholders in the merger will
be freely transferable, with the exception of the MONY common shares received by
persons who are deemed to be "affiliates" of Advest under the Securities Act of
1933 and the rules and regulations promulgated under that act, at the time of
the Advest special meeting. These "affiliates" may only re-sell their MONY
common shares in transactions permitted by Rule 145 under the Securities Act of
1933 (or Rule 144 under the Securities Act of 1933 in the case of persons who
become affiliates of MONY) or as otherwise permitted under that act. Persons who
may be deemed to be affiliates of Advest or MONY for these purposes generally
include individuals or entities that control, are controlled by, or are under
common control with, Advest or MONY and may include officers, directors and
principal stockholders of Advest or MONY. The merger agreement requires Advest
to deliver or cause to be delivered to MONY on or prior to the effective time of
the merger from each of Advest's affiliates an executed letter agreement to the
effect that these persons will not offer or sell or otherwise dispose of any
MONY common shares issued to these persons in the merger in violation of the
Securities Act of 1933.
FINANCING THE TRANSACTION
MONY currently intends to finance the cash portion of the merger
consideration through a $200 million unsecured short term credit facility. It is
expected that the facility will provide for a final maturity of nine months from
the borrowing date. The interest rate on the loan is expected to be the London
Inter Bank Offered Rate (LIBOR) plus 30 basis points.
BUSINESS OF MONY AND ADVEST
MONY. MONY is a holding company which, through MONY Life Insurance Company
and its subsidiaries, is primarily engaged in the business of providing a wide
range of life insurance, annuity, and investment products to higher income
individuals, particularly family builders, pre-retirees, and small business
owners. MONY's products and services are primarily distributed through its
career agency sales force, as well as other complementary distribution channels
(including brokerage general agents, registered representatives, mutual fund
wholesalers and MONY's international sales force). MONY principally sells its
products in all 50 of the United States, the District of Columbia, the U.S.
Virgin Islands, Guam and the Commonwealth of Puerto Rico. MONY currently insures
or provides financial services to more than one million people.
Advest. Advest is a financial services holding company engaged, with its
operating subsidiaries, in securities brokerage, trading, investment banking,
asset management, trust and other financial services. Advest operates primarily
through its broker-dealer subsidiary, Advest, Inc. Advest, Inc. provides
brokerage, investment banking, institutional sales and trading and asset
management services to retail and institutional investors through 97 sales
offices in 18 states and Washington, D.C. Advest, Inc. is a member of all major
securities exchanges in the United States and is registered with the Commodities
Futures Trading Commission as a commodity trading advisor and a futures
commission merchant. Other Advest subsidiaries include Advest Bank and Trust
Company, a federal savings bank, Boston Advisors, an investment advisor, and
Billings & Company, Inc., a real estate services company.
46
<PAGE> 55
PRINCIPAL PROVISIONS OF THE MERGER AGREEMENT
GENERAL
The merger agreement contemplates the merger of Advest with and into MONY
Acquisition Corp., with MONY Acquisition Corp. surviving the merger as a
wholly-owned subsidiary of MONY. The merger will become effective at the
effective time in accordance with the certificate of merger to be filed with the
Secretary of State of the State of Delaware. It is anticipated that this filing
will be made as soon as practicable after the last of the conditions precedent
to the merger, as set forth in the merger agreement, has been satisfied or
waived. The following is a description of the material terms of the merger
agreement but it does not purport to be complete. Stockholders are encouraged to
read the merger agreement in its entirety. A copy of the merger agreement is
attached as Annex A to this proxy statement/prospectus.
CONSIDERATION TO BE RECEIVED IN THE MERGER
At the effective time of the merger, each Advest stockholder will have the
right to receive, based on the election of that stockholder as indicated below
(subject to the allocation formulas described under the heading "Allocation"),
the following merger consideration:
- Stock Election. You may elect to receive for each of your Advest common
shares a number of shares of MONY common stock equal to the exchange ratio
described below.
- Cash Election. You may elect to receive for each of your Advest common
shares an amount of cash equal to the product of the exchange ratio and
the average closing price of MONY common stock for the ten consecutive
trading days ending five trading days prior to the closing date.
- Partial Cash Election. You may elect to receive a combination of (1) cash
in the amount indicated above for a specified number of your Advest shares
and (2) the number of MONY shares indicated above for each of your
remaining shares.
A Form of Election and Letter of Transmittal and a copy of this proxy
statement/prospectus was sent to each holder of record of Advest common shares
on the record date for voting at the Advest special meeting. The Form of
Election will permit you to make one of the above elections. Any Advest common
shares held by a holder who fails to make an election, and any Advest common
shares held by a holder who fails to submit a valid Form of Election prior to
the election deadline described under the heading "Election Procedure," will be
treated as shares as to which no preference as to the receipt of cash or MONY
common stock has been indicated, and these shares will receive merger
consideration in accordance with the allocation formulas described under the
heading "Allocation."
YOU SHOULD CAREFULLY CONSIDER THE TAX CONSEQUENCES OF MAKING AN ELECTION.
WE URGE YOU TO CONSULT WITH YOUR TAX ADVISOR TO DETERMINE THE TAX CONSEQUENCES
OF THE MERGER. SEE "MATERIAL FEDERAL INCOME TAX CONSEQUENCES."
The exchange ratio that represents the number of shares of MONY common
stock you will have the right to receive in exchange for each share of Advest
common stock for which you elect stock rather than cash, subject to the
allocation formulas described under the heading "Allocation," is calculated
based on the following formulas from the merger agreement:
P = Average closing price of MONY common stock; ER = Exchange Ratio
<TABLE>
<CAPTION>
Range of P ER
---------- --
<S> <C>
Less than or equal to $28 15.50/P + 0.498214
More than $28 and less than or equal to $31.50 29.45/P
More than $31.50 and less than or equal to $38.50 15.50/P + 0.442857
More than $38.50 and less than or equal to $42 32.55/P
More than $42 15.50/P + 0.405952
</TABLE>
47
<PAGE> 56
The average closing price of MONY common stock for this purpose means the
average for the ten consecutive trading days ending five trading days prior to
the closing date.
The exchange ratio is subject to a "collar" arrangement on the transaction
value per Advest share (equal to the product of the exchange ratio and the
average price calculated as described above, whether paid in cash or MONY common
stock or a combination of both). The table below shows, solely for illustrative
purposes, the transaction value per Advest share for selected values of the
average price per MONY share.
<TABLE>
<CAPTION>
And the
If the Then the Transaction Value
Average Exchange Per Share of
Price Is Ratio Is Advest Stock Is
-------- -------- -----------------
<S> <C> <C>
$24.50 1.130867 $27.71
28.00 1.051785 29.45
31.50 0.934921 29.45
35.00 0.885714 31.00
38.50 0.845454 32.55
42.00 0.775000 32.55
45.50 0.746611 33.97
</TABLE>
LIMITS ON CASH AND STOCK CONSIDERATION
The number of shares of your Advest common stock that will be converted
into the right to be exchanged for cash will be equal to the number of those
shares for which you have elected to receive the cash consideration (calculated
as described above), adjusted on a pro rata basis to make the aggregate number
of Advest shares to be converted into the right to receive cash in the merger
equal to 49.9% of the total number of Advest shares issued and outstanding
immediately prior to the closing of the merger. The number of shares of your
Advest common stock that will be converted into the right to be exchanged for
MONY shares will be equal to the number of those Advest shares for which you
have elected to receive the MONY stock consideration (calculated as described
above), adjusted on a pro rata basis to make the aggregate number of Advest
shares to be converted into the right to receive MONY shares in the merger equal
to 50.1% of the total number of Advest shares issued and outstanding immediately
prior to the closing of the merger.
MONY will not issue fractional shares. Instead, you will receive cash for
any fractional share of MONY common stock owed to you based on the applicable
average closing price of a share of MONY common stock.
ALLOCATION
Cash Over-Election. If the aggregate number of shares of Advest common
stock for which cash was elected under a cash election or a partial cash
election plus any dissenting shares exceeds the limit on the number of Advest
common shares that can be converted into the right to receive cash (as described
under "Limits on Cash and Stock Consideration" above), then:
- those shares of Advest common stock for which MONY common stock was
elected under a stock election or a partial cash election and those
shares of Advest common stock deemed to be shares as to which no
preference as to the receipt of cash or MONY common stock has been
indicated will be converted into the right to receive MONY common
stock; and
- those shares of Advest common stock for which cash was elected under
a cash election or a partial cash election (but not including any
dissenting shares) will be converted into the right to receive (A) an
amount of cash (rounded to the nearest cent), without interest, equal
to the product of (a) the cash price per share (equal to the product
of the exchange ratio and the applicable average closing price of
MONY common stock) and (b) a fraction, the numerator of which is the
maximum number of Advest common shares that can be converted into the
right to receive cash and the denominator of which is the number of
shares of Advest common stock for which cash was elected under a cash
election or a partial cash election plus any dissenting shares and
(B) a number
48
<PAGE> 57
of shares of MONY common stock equal to the product of (x) the
exchange ratio and (y) a fraction equal to one (1) minus the fraction
described in clause (b) of this paragraph.
Stock Over-Election. If the aggregate number of shares of Advest common
stock for which MONY common stock was elected under a stock election or a
partial cash election exceeds the limit on the number of Advest common shares
that can be converted into the right to receive MONY common stock (as described
under "Limits on Cash and Stock Consideration" above), then:
- those shares of Advest common stock for which cash was elected under
a cash election or a partial cash election and those shares of Advest
common stock deemed to be shares as to which no preference as to the
receipt of cash or MONY common stock has been indicated will be
converted into the right to receive cash; and
- those shares of Advest common stock for which MONY common stock was
elected under a stock election or a partial cash election will be
converted into the right to receive (A) a number of shares of MONY
common stock equal to the product of (a) the exchange ratio and (b) a
fraction, the numerator of which is the maximum number of Advest
common shares that can be converted into the right to receive MONY
common stock and the denominator of which is the number of shares of
Advest common stock for which MONY common stock was elected under a
stock election or a partial cash election and (B) an amount of cash
(rounded to the nearest cent), without interest, equal to the product
of (x) the cash price per share (equal to the product of the exchange
ratio and the applicable average closing price of MONY common stock)
and (y) a fraction equal to one (1) minus the fraction described in
clause (b) of this paragraph.
No Over-Election for Either Cash or Stock. In the event there is neither
an over-election of cash nor an over-election of MONY common stock, then:
- those shares of Advest common stock for which cash was elected under
a cash election or a partial cash election will be converted into the
right to receive cash;
- those shares of Advest common stock for which MONY common stock was
elected under a stock election or a partial cash election will be
converted into the right to receive MONY common stock; and
- those shares of Advest common stock deemed to be shares as to which
no preference as to the receipt of cash or MONY common stock has been
indicated will be converted into the right to receive (A) an amount
of cash (rounded to the nearest cent), without interest, equal to the
product of (x) the cash price per share (equal to the product of the
exchange ratio and the applicable average closing price of MONY
common stock) and (y) a fraction, the numerator of which is the
maximum number of Advest common shares that can be converted into the
right to receive cash less the number of shares of Advest common
stock for which cash was elected under a cash election or a partial
cash election plus any dissenting shares and the denominator of which
is the number of shares of Advest common stock deemed to be shares as
to which no preference as to the receipt of cash or MONY common stock
has been indicated, and (B) a number of shares of MONY common stock
equal to the product of (x) the exchange ratio and (y) a fraction,
the numerator of which is the maximum number of Advest common shares
that can be converted into the right to receive MONY common stock
less the number of shares of Advest common stock for which MONY
common stock was elected under a stock election or a partial cash
election and the denominator of which is the number of shares of
Advest common stock deemed to be shares as to which no preference as
to the receipt of cash or MONY common stock has been indicated.
MONY will make all computations related to the allocation formulas
described in this section, and all of those computations will be binding and
conclusive on all holders of Advest common shares.
Advest Stock Options. At the effective time of the merger, each issued and
outstanding option, warrant or similar right to acquire or receive shares of
Advest capital stock, whether or not then exercisable or vested, will be
cancelled. In consideration of the cancellation, each holder of an option will
have the right to receive an
49
<PAGE> 58
amount of cash equal to the cash election amount per share available to each
Advest stockholder as indicated under the sub-heading "Consideration to be
Received in the Merger", less the exercise price of the option, multiplied by
the number of shares subject to the option immediately prior to the
cancellation.
Advest Restricted Stock. At the effective time of the merger, 50% of each
outstanding restricted stock award, deferred stock award or any other
stock-based award (other than options) that is based on the value of Advest
common stock and subject to any vesting requirement that would not be
accelerated as a result of the merger, will become fully vested and converted
into a right to receive an amount of cash equal to the cash election amount per
share available to each Advest stockholder as indicated under the sub-heading
"Consideration to be Received in the Merger." At the effective time of the
merger, the remaining 50% of each outstanding restricted stock award described
above will be automatically converted into an award to receive, for each share
of Advest common stock, a number of shares of MONY common stock equal to the
exchange ratio described above, rounded up to the nearest whole share. Following
the effective time of the merger, each restricted stock award that is converted
to a MONY stock award will vest on the same terms and conditions as the original
Advest stock awards.
EXCHANGE OF SHARES
Subject to the terms and conditions of the merger agreement, MONY will
deposit with First Chicago Trust Company of New York, acting as the paying
agent, cash in the amount to be distributed and certificates representing the
number of MONY common shares to be issued in exchange for outstanding shares of
Advest common stock, and cash in an amount equal to MONY's good faith estimate
of the cash required to be paid in lieu of fractional MONY common shares and for
dividends and other distributions on the MONY common shares. Holders of
unexchanged shares of Advest common stock will not be entitled to receive any
dividends or other distributions payable by MONY until their certificates are
surrendered. Upon surrender, however, subject to applicable laws, the holders
will receive accumulated dividends and distributions, without interest, together
with cash in lieu of fractional shares.
ELECTION PROCEDURE
Accompanying this proxy statement/prospectus is a Form of Election and
Letter of Transmittal, which includes instructions. All elections must be made
on the Form of Election. Any Form of Election submitted by a dissenting
stockholder will be invalid and will be rejected. If any dissenting stockholder
ceases to be a dissenting stockholder but does not submit a valid Form of
Election prior to the election deadline, each Advest common share held by that
dissenting stockholder will be treated as a share for which the stockholder has
indicated no preference as to the receipt of cash or MONY common stock.
Record holders who are nominees, and who certify at the request of MONY
that they hold Advest common shares as a nominee, may submit a separate Form of
Election for each beneficial owner of Advest common shares held by that nominee,
and each of those beneficial owners will be treated as a separate holder for
purposes of the allocation formulas described above.
You may change or revoke your election by submitting a properly completed
and signed Form of Election that is received by First Chicago Trust Company of
New York prior to the election deadline. You may revoke your election and
withdraw the share certificates representing your Advest common shares by
providing written notice to First Chicago Trust Company of New York by the close
of business on the day prior to the election deadline. First Chicago Trust
Company of New York will use reasonable best efforts to make a Form of Election
available to all Advest stockholders who become holders of Advest common stock
after the mailing of the Form of Election and before the election deadline.
For an election to be validly made, First Chicago Trust Company of New York
must have received a valid, properly completed and executed Form of Election by
the election deadline. An election will be validly made only if the Form of
Election is properly completed and executed by the stockholder in accordance
with the instructions contained in that form (with the signature or signatures
guaranteed as required by the Form of Election) accompanied by the share
certificate or certificates representing all of the Advest common shares owned
by that stockholder (or confirmation of the transfer of the shares by the
book-entry procedure described
50
<PAGE> 59
in the Form of Election), duly endorsed in blank or in another form acceptable
to MONY. If share certificates are not available when the Form of Election is
sent to First Chicago Trust Company of New York, the stockholder may provide a
Guarantee of Delivery from a member of a national securities exchange, a member
of the National Association of Securities Dealers, Inc., or a commercial bank or
trust company located in the United States. A Guarantee of Delivery in effect
guarantees to MONY that those share certificates will be delivered to First
Chicago Trust Company of New York (or that the shares will be transferred by the
book-entry procedure described in the Form of Election).
The election deadline will be 5:00 p.m., New York City time, on the second
business day preceding the date that the merger is consummated, which day is not
less than 20 days after the initial mailing of the Form of Election. MONY and
Advest will announce the date of the election deadline by issuing a public
announcement no less than 10 days preceding the election deadline. MONY will
notify First Chicago Trust Company of New York of any extension of the
originally established election deadline by oral notice (promptly confirmed in
writing) or written notice and will make a press release or other public
announcement of that extension prior to 9:00 a.m., New York City time, on the
next business day following the previously scheduled election deadline.
MONY has the right to make reasonable determinations and to establish
reasonable procedures in guiding First Chicago Trust Company of New York in its
determination as to the validity of Forms of Election. None of Advest, MONY or
First Chicago Trust Company of New York are under any obligation to notify any
Advest stockholder of any defect in a Form of Election. If you submit an invalid
Form of Election prior to the election deadline that is not made valid prior to
the election deadline, you will be deemed to have indicated no preference as to
the receipt of cash or MONY common stock, and all of your Advest common shares
will be treated as such for purposes of the allocation provisions that determine
the amount of cash and number of shares of MONY common stock received by each
Advest stockholder.
If you have questions related to the Form of Election and Letter of
Transmittal, or if you require additional copies of the Form of Election and
Letter of Transmittal, please contact First Chicago Trust Company of New York at
(800) 608-7863.
Holders of shares of restricted stock of Advest subject to vesting
requirements will not be entitled to make any election, but will rather receive
the consideration described above in "Advest Restricted Stock."
If you are a participant in the Advest Thrift Plan and have Advest shares
allocated to your account, separate procedures apply to the cash and/or stock
election for these shares, as described above in "The Special Meeting -- Voting
and Election of Shares in the Advest Thrift Plan".
THE FORM OF ELECTION AND LETTER OF TRANSMITTAL IS INCLUDED WITH THIS PROXY
STATEMENT/PROSPECTUS. YOU SHOULD COMPLETE IT IN ACCORDANCE WITH ITS INSTRUCTIONS
AND RETURN IT TO FIRST CHICAGO TRUST COMPANY OF NEW YORK PRIOR TO THE ELECTION
DEADLINE. YOU SHOULD INCLUDE YOUR SHARE CERTIFICATES (OR CONFIRMATION OF THE
TRANSFER OF THE SHARES BY THE BOOK-ENTRY PROCEDURE DESCRIBED IN THE FORM OF
ELECTION) OR AN APPROPRIATE GUARANTEE OF DELIVERY OF YOUR SHARE CERTIFICATES AS
SET FORTH IN THE FORM OF ELECTION. IF YOU DO NOT PROPERLY COMPLETE AND RETURN TO
FIRST CHICAGO TRUST COMPANY OF NEW YORK A FORM OF ELECTION PRIOR TO THE ELECTION
DEADLINE, YOUR ADVEST COMMON SHARES WILL BE TREATED AS SHARES FOR WHICH NO
PREFERENCE IS INDICATED AS TO THE RECEIPT OF CASH OR MONY COMMON STOCK, AND THE
FORM OF MERGER CONSIDERATION YOU WILL BE ENTITLED TO RECEIVE WILL BE DETERMINED
BY THE APPROPRIATE ALLOCATION PROVISIONS OF THE MERGER AGREEMENT.
REPRESENTATIONS AND WARRANTIES
The merger agreement contains customary reciprocal representations and
warranties of MONY, MONY Acquisition Corp. and Advest as to, among other things,
- due organization and good standing;
- corporate authority to carry on its business;
- corporate authority to enter into the contemplated transactions;
- capitalization;
51
<PAGE> 60
- absence of conflicts with, and violations of, organizational
documents, employee benefit plans, agreements, laws and certain
regulatory requirements;
- validity of agreements;
- reports filed with the SEC;
- governmental investigations and litigation;
- compliance with laws and governmental approvals;
- absence of any material adverse effect, or any event which is
reasonably likely to result in a material adverse effect, on the
parties and on their subsidiaries;
- brokers;
- taxes and tax returns; and
- lack of knowledge of factors preventing favorable tax treatment of
the transaction.
In addition, Advest has made representations and warranties regarding,
among other matters,
- ownership of subsidiaries;
- interests in other businesses;
- no infringement of patents, trademarks, copyrights and trade secrets;
- ownership or possession of intellectual property rights;
- registration, and compliance with all applicable requirements, as a
broker-dealer and an investment advisor;
- existence and enforceability of material contracts, and the absence
of any non-competition agreements or obligations;
- employee benefit plans;
- labor matters;
- absence of any ownership of MONY common stock;
- environmental matters;
- status of the Advest Bank and Trust Company, a subsidiary of Advest;
- derivative instruments;
- inapplicability of state takeover statutes and Advest's shareholder
rights plan; and
- receipt of a fairness opinion from Advest's financial advisor.
Many of these representations and warranties are qualified by the concept
of "material adverse effect", meaning that these representations and warranties
are not intended to apply to facts or circumstances which would not have a
material adverse effect on the financial position, results of operations,
assets, properties or business of the representing party and its subsidiaries,
or on the ability of the representing party to timely perform its obligations
under, or otherwise to consummate the transactions contemplated by, the merger
agreement. For purposes of the merger agreement, material adverse effect does
not include effects caused by:
- changes in general economic conditions or market conditions
(including changes in interest rates), accounting principles, law,
regulations or regulatory policies of general applicability (or
interpretations of these policies);
- changes that generally affect the securities industry (in the case of
Advest), or the securities or insurance industries (in the case of
MONY);
52
<PAGE> 61
- actions or omissions of the representing party, in contemplation of
the merger, with the prior written consent of the other party; and
- facts, circumstances or events resulting from the announcement or
execution of the merger agreement or the transactions contemplated by
the merger agreement.
None of the representations and warranties contained in the merger
agreement will survive the effective time of the merger.
CERTAIN COVENANTS
No Solicitation of Alternative Transaction Proposals. Advest, its
affiliates and their respective officers, directors, employees, representatives
and agents have agreed to cease any existing discussions or negotiations with
any person other than MONY with respect to any transaction. A transaction
involves any merger, consolidation, share exchange, tender offer or other
business combination involving Advest or any of its material subsidiaries as
defined in the merger agreement. A transaction also involves the acquisition, in
any manner, of 10% or more of the voting stock or equity, or of the consolidated
assets, of Advest or any of its material subsidiaries as defined in the merger
agreement.
However, if the Advest board of directors receives an unsolicited written
proposal from any person with respect to any such transaction described above,
Advest may furnish non-confidential information and access to that person, and
may participate in negotiations and discussions with that person, but only if:
- the board of Advest determines in its good faith judgment, after
consultation as to legal matters with outside legal counsel and as to
financial matters with an investment banking firm of national
reputation, that the proposal is a superior proposal, as described
below; and
- that failing to furnish the requested information or access to that
person, or engage in the negotiations or discussions with that
person, may constitute a breach of the board's fiduciary duty.
A superior proposal is any proposal with respect to a transaction of the
type described above which:
- is superior to the merger with MONY from a financial point of view to
the stockholders of Advest;
- faces no material legal or other impediments to the consummation of
the transaction; and
- is fully financed.
The Advest board has agreed not to recommend to the Advest stockholders
that the stockholders tender their shares of Advest common stock in any tender
offer or exchange offer unless in the good faith judgment of a majority of the
Advest board, after consultation as to legal matters with outside legal counsel,
and after consultation as to financial matters with an investment banking firm
of national reputation, the board determines that: (1) the tender offer is a
superior proposal and (2) failing to make the recommendation may constitute a
breach of the board's fiduciary duty under applicable laws. Notwithstanding the
foregoing, nothing contained in the merger agreement will prevent Advest's board
of directors from complying with Rules 14d-9 and 14e-2 under the Securities
Exchange Act of 1934, as amended, with regard to any tender offers.
Conduct of Business Pending the Merger. Pursuant to the merger agreement,
Advest has agreed that until the effective time of the merger, except as set
forth in the merger agreement or with the prior written consent of MONY, Advest
will, and will cause each of its subsidiaries and investment companies (both as
defined in the merger agreement) to, conduct its operations in the usual,
regular and ordinary course in substantially the same manner as conducted prior
to August 23, 2000, and will use reasonable best efforts, and will cause each of
its material subsidiaries and investment companies (both as defined in the
merger agreement) to use its reasonable best efforts, to preserve intact their
business organizations and goodwill, keep available the services of their
respective officers and employees, and maintain satisfactory relationships with
those persons with which each has business relationships.
53
<PAGE> 62
Specifically, from the date of the merger agreement until the effective
time of the merger, Advest may not, and will cause its material subsidiaries, or
its investment companies (all as defined in the merger agreement), as the case
may be, not to:
- amend their Certificates of Incorporation or Bylaws or comparable
governing instruments;
- authorize, propose or enter into an agreement with respect to any
merger, consolidation or business combination (other than this
merger), or any acquisition or disposition of assets or securities
other than in the ordinary course of business;
- authorize, propose or enter into any release or surrender of any
material contract rights other than in the ordinary course of
business;
- issue any shares of its capital stock or convertible securities, or
grant any options, warrants, conversion rights or other rights not
existing as of August 23, 2000 to purchase securities of Advest,
except upon the exercise of options outstanding as of August 23, 2000
under Advest's stock option plans or granted pursuant to the stock
option agreement described in this proxy statement/ prospectus under
the heading "Stock Option Agreement";
- effect any stock split, reverse stock split, stock dividend or other
similar transaction with respect to any Advest shares or other
ownership interests;
- otherwise change its capitalization;
- grant, confer or award any options, warrants, conversion rights or
other rights not existing as of August 23, 2000 to acquire any shares
of Advest's capital stock or other securities of Advest or its
subsidiaries;
- take or fail to take any action which prevents the merger from
qualifying as a tax-free reorganization for federal income tax
purposes;
- except pursuant to applicable law, the terms of pre-existing
contractual arrangements, or in the ordinary course of business
consistent with past practice, amend the terms of any of Advest's
employee benefit plans, including employment, severance or similar
agreements existing as of August 23, 2000;
- except pursuant to applicable law, the terms of pre-existing
contractual arrangements, or in the ordinary course of business
consistent with past practice, adopt any new employee compensation or
benefit plans or any employment, severance or similar agreements,
change any vesting schedule with respect to Advest's employee benefit
plans (or grants or awards thereunder), or grant any salary increases
to any employee of Advest or any of its subsidiaries;
- incur or become liable for any new indebtedness; make any loans or
advances to any other person; or subject any of its property or
assets to any lien, claim or encumbrance of any kind, except in the
ordinary course of business consistent with past practice;
- change any practice, or revoke or change any election, with respect
to taxes;
- make any tax elections or settle any tax liability;
- declare, set aside or pay any dividend or make any other distribution
with respect to Advest's capital stock (other than regular quarterly
cash dividends payable on Advest common stock in an amount not to
exceed $0.06 per share);
- redeem, purchase or otherwise acquire any shares of Advest's capital
stock, or make any commitment for any such action; or
- agree to take any action which would violate any of the
representations or warranties described above.
54
<PAGE> 63
In addition, Advest has agreed to give prompt notice to MONY of each of the
following:
- any event which has a material adverse effect on Advest;
- any litigation matter relating to an amount exceeding $500,000, or
any governmental complaint, investigation or hearing;
- the receipt by Advest of any written notice from any taxing authority
proposing any adjustment to the taxes of Advest or any of its
subsidiaries;
- any material breach of any representation or warranty made by Advest
contained in the merger agreement; and
- any filing made with the SEC (including the delivery of copies of any
filing).
MONY has agreed that from the date of the merger agreement until the
effective time of the merger, except as permitted by the merger agreement or as
required by applicable law, MONY will not, without the prior consent of Advest:
- amend its articles of incorporation or bylaws in a manner that would
materially adversely affect the economic benefits of the merger to
the holders of Advest common stock; and
- take any action that is intended or may reasonably be expected to
result in (a) any of MONY's representations and warranties becoming
untrue in any material respect at any time prior to the effective
time of the merger, (b) any of the conditions to each party's or
Advest's obligation to effect the merger set forth in the merger
agreement not being satisfied in any material respect or (c) a
material violation of any provision of the merger agreement.
Indemnification and Insurance. The agreement of the parties on these
matters is discussed above under the heading "The Merger -- Interests of Certain
Persons in the Merger -- Indemnification and Insurance."
Employee Benefits. For a one year period following the effective time of
the merger, MONY will provide Advest employees who are employed by MONY with
substantially the same base salary and wages and employee benefits that are no
less favorable in the aggregate to benefits provided by Advest immediately prior
to the effective date of the merger. Following the effective time of the merger,
MONY will recognize employees' service with Advest for purposes of eligibility,
participation, level of benefits and vesting of benefits, but not for benefit
accrual under defined pension benefit plans, under any employee benefit plan of
MONY providing benefits to Advest employees to the extent service would have
been recognized under the applicable Advest employee benefits plan and to the
extent recognition of service would not provide duplication of benefits. In
addition, each Advest employee will be immediately eligible to participate,
without any waiting time, in any employee benefit plan of MONY providing
benefits to Advest employees to the extent coverage replaces coverage under any
comparable Advest employee benefits plan and to the extent coverage would have
been recognized under the comparable Advest plan. For each employee benefit plan
of MONY providing medical, dental, pharmaceutical or vision benefits to Advest
employees, all pre-existing condition exclusions and actively at work
requirements will be waived for Advest employees and their dependents to the
extent the exclusion would not have applied under the applicable Advest plan,
and any eligible expenses incurred by Advest employees and their dependents in
the plan year in which coverage is offered under the MONY plan will be taken
into account for purposes of satisfying all deductible, coinsurance and maximum
out of pocket requirements.
Other Covenants. The merger agreement also contains certain other
covenants including, among other things, covenants relating to the special
meeting of Advest stockholders, certain filings with governmental and other
agencies and organizations, inspection of records, public announcements,
obtaining affiliate agreements, expenses, the Advest shareholder rights plan,
conveyance taxes, certain tax matters, investment advisory agreements, Advest's
retention plan, dividends and certain exemptions under the Securities Exchange
Act, as amended.
55
<PAGE> 64
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Conditions to Each Party's Obligations to Effect the Merger. Each party's
obligation to complete the merger is subject to the satisfaction, at or prior to
the closing date of the merger, of several conditions including:
- approval by Advest's stockholders of the merger agreement and the
transactions contemplated by the merger agreement in accordance with
the Delaware General Corporation Law and Advest's certificate of
incorporation;
- the waiting period applicable to the consummation of the merger under
the Hart-Scott-Rodino Antitrust Improvements Act will have expired or
been terminated;
- none of the parties to the merger agreement will be subject to any
order or injunction of a court of competent jurisdiction in the
United States prohibiting the consummation of the transactions
contemplated by the merger agreement and, in the event that any order
or injunction is issued, each party to the merger agreement has
agreed to use all reasonable best efforts to have the injunction
lifted;
- the registration statement on Form S-4 of which this proxy
statement/prospectus is a part will have become effective and will be
effective at the effective time of the merger, and no stop order
suspending effectiveness of the Form S-4 will have been issued, no
action, suit, proceeding, or investigation by the SEC to suspend the
effectiveness of the Form S-4 will have been initiated and be
continuing, and all material approvals under state securities laws
relating to the issuance or trading of MONY's common stock to be
issued to stockholders of Advest in connection with the merger will
have been received;
- MONY's common stock to be issued to stockholders of Advest in
connection with the merger will have been approved for listing on the
NYSE, subject only to official notice of issuance; and
- all consents, authorizations, orders and approvals of (or filings or
registrations with) any governmental commission or other regulatory
body or self-regulatory organization required pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act, the Home Owners' Loan
Act, the Connecticut General Statute and the rules of the National
Association of Securities Dealers, Inc. will have been obtained or
made, and will not contain any terms that, in the reasonable good
faith judgment of MONY, are unreasonably burdensome to MONY.
Additional Conditions to the Obligation of Advest to Effect the
Merger. The obligation of Advest to effect the merger is subject to the
fulfillment, at or prior to the consummation of the merger, of the following
conditions:
- MONY will have performed in all material respects MONY's agreements
contained in the merger agreement and required to be performed on or
prior to the consummation of the merger. The representations and
warranties of MONY and MONY Acquisition Corp. contained in the merger
agreement will be true and correct as of the date of the consummation
of the merger, except that those representations and warranties which
address matters only as of a particular date will have been true and
correct as of that particular date. However, these representations
and warranties will be deemed to be true and correct unless the
failure or failures of these representations and warranties to be
true and correct, either individually or in the aggregate, without
giving effect to any qualification as to materiality, is reasonably
likely to have a material adverse effect on MONY (as defined in the
merger agreement); and
- Advest will have received from its legal counsel, Day, Berry & Howard
LLP and Wachtell, Lipton, Rosen & Katz, an opinion to the effect that
the merger will be treated as a reorganization for U.S. federal
income tax purposes, and the opinion will be reconfirmed as of the
effective time of the merger.
56
<PAGE> 65
Additional Conditions to the Obligation of MONY and MONY Acquisition Corp.
to Effect the Merger. The obligations of MONY and MONY Acquisition Corp. to
effect the merger are subject to the fulfillment, at or prior to the
consummation of the merger, of the following conditions:
- Advest will have performed in all material respects Advest's
agreements contained in the merger agreement and the stock option
agreement, and the shareholders (as defined in the support agreement)
will have performed in all material respects their agreements
contained in the support agreement. The representations and
warranties of Advest contained in the merger agreement and the stock
option agreement, and the representations and warranties of the
shareholders (as defined in the support agreement) contained in the
support agreement, will be true and correct as of the date of the
consummation of the merger, except that those representations and
warranties which address matters only as of a particular date will be
true and correct as of that date. However, the representations and
warranties of Advest will be deemed to be true and correct unless the
failure or failures of those representations and warranties to be
true and correct, either individually or in the aggregate, without
giving effect to any qualification as to materiality, is reasonably
likely to have a material adverse effect on Advest (as defined in the
merger agreement);
- MONY will have received from its tax counsel, Norman Sinrich, Esq.
(or such other tax counsel to MONY that is reasonably acceptable to
Advest), an opinion to the effect that the merger will be treated as
a reorganization for U.S. federal income tax purposes, and the
opinion will be reconfirmed as of the effective time of the merger;
- a specified number of the employment and/or change of control
agreements described in "The Merger -- Interests of Certain Persons
in the Merger" will not have been amended and will be in full force
and effect, other than due to death or disability, and each of these
executives will be performing in all material respects his
obligations thereunder;
- from the date of the merger agreement through the effective time of
the merger, no material adverse effect with respect to Advest (as
defined in the merger agreement) will have occurred;
- at the effective time of the merger Advest and each of its
subsidiaries will meet the criteria set forth in the Home Owners'
Loan Act as then in effect and any other criteria of the Office of
Thrift Supervision necessary for MONY to qualify as a "Savings and
Loan Holding Company" as that term is used in the Home Owners' Loan
Act. In addition, all consents, authorizations, orders and approvals
of (or filings or registrations with) the Office of Thrift
Supervision necessary for MONY to qualify as a Savings and Loan
Holding Company will have been obtained or made, and any requisite
waiting periods imposed in connection with the consents,
authorizations, orders and approvals will have expired and will not
have been contested by any federal or state governmental authority;
and
- no more than 5% of the Advest common stock outstanding at the
effective time of the merger (excluding shares owned by MONY or any
of MONY's wholly-owned subsidiaries) will be dissenting shares that
meet the appraisal and other requirements as set forth in the merger
agreement.
TERMINATION OF THE MERGER AGREEMENT
Termination by Mutual Consent. The merger agreement may be terminated and
the merger may be abandoned at any time prior to the effective time, before or
after the approval of the merger agreement by the stockholders of Advest, by the
mutual consent of MONY and Advest.
Termination by Either MONY or Advest. The merger agreement may be
terminated and the merger may be abandoned at any time prior to the effective
time of the merger by action of the board of directors of either MONY or Advest
if:
- the merger has not been consummated by February 28, 2001, provided
that the terminating party shall not have breached in any material
respect its obligations under the merger agreement in any
57
<PAGE> 66
manner that proximately contributed to the failure to consummate the
merger by February 28, 2001;
- the approval of Advest's stockholders required by the merger
agreement has not been obtained at a duly convened special meeting
called for that purpose, or at any adjournment of the special
meeting; or
- a United States federal, state, local or foreign court of competent
jurisdiction, or a United States federal or state, local or foreign
governmental, regulatory or administrative agency or commission, has
issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by the merger agreement, and such order,
decree, ruling or other action has become final and nonappealable,
provided that the party seeking to so terminate the merger agreement
has used all reasonable best efforts to remove the injunction, order
or decree.
Termination by Advest. The merger agreement may be terminated and the
merger may be abandoned at any time prior to the effective time of the merger,
before or after the approval of the merger agreement by the stockholders of
Advest, by action of the board of directors of Advest if:
- in the exercise of its good faith judgment as to fiduciary duties to
its stockholders imposed by law after consultation as to legal
matters with outside legal counsel and after consultation as to
financial matters with an investment banking firm of national
reputation, Advest determines that termination of the merger
agreement is required by reason of a superior proposal (as defined in
the merger agreement) being made;
- there has been a breach (without regard to materiality, a material
adverse effect with respect to MONY (as defined in the merger
agreement) or similar qualifiers) by MONY or MONY Acquisition Corp.
of any representation or warranty contained in the merger agreement
which is not curable or, if curable, is not cured within 30 days
after written notice of the breach is given by Advest to MONY;
provided that the breach, if occurring or continuing upon the date of
consummation of the merger, would constitute, individually or in the
aggregate with other such breaches, the failure of:
- MONY to have performed in all material respects its agreements
contained in the merger agreement and required to be performed on
or prior to the consummation of the merger; or
- the representations and warranties of MONY and MONY Acquisition
Corp. contained in the merger agreement to be true and correct as
of the date of the consummation of the merger; or
- there has been a material breach by MONY of any of the covenants or
agreements set forth in the merger agreement which is not curable or,
if curable, is not cured within 30 days after written notice of the
breach is given by Advest to MONY.
Termination by MONY. The merger agreement may be terminated and the merger
may be abandoned at any time prior to the effective time of the merger, before
or after the approval of the merger agreement by the stockholders of Advest, by
action of the board of directors of MONY, if:
- the board of directors of Advest has withdrawn, modified in a manner
adverse to MONY, or failed to reconfirm within five business days
after written request from MONY, its approval or recommendation of
the merger agreement, the stock option agreement, the support
agreement or the merger or other transactions contemplated in the
merger agreement, or shall have recommended an alternative proposal
(as defined in the merger agreement) to the stockholders of Advest;
- there has been a breach (without regard to materiality, a material
adverse effect with respect to Advest (as defined in the merger
agreement) or similar qualifiers) by Advest of any representation or
warranty contained in the merger agreement, or by Advest of any
representation or warranty contained in the stock option agreement or
by any shareholder (as defined in the support
58
<PAGE> 67
agreement) of any representation or warranty contained in the support
agreement, which breach is not curable or, if curable, is not cured
within 30 days after written notice of such breach is given by MONY
to Advest or the breaching shareholder, as appropriate; provided that
the breach, if occurring or continuing upon the date of consummation
of the merger, would constitute, individually or in the aggregate
with other such breaches, the failure of any of the following to be
true and correct as of the date of the consummation of the merger:
- the representations and warranties of Advest contained in the
merger agreement and the stock option agreement; or
- the representations and warranties of the shareholders contained
in the support agreement; or
- there has been a material breach of any of the covenants or
agreements contained in the merger agreement or the stock option
agreement on the part of Advest, or any of the covenants or
agreements contained in the support agreement by any shareholder (as
defined in the support agreement), which breach is not curable or, if
curable, is not cured within 30 days after written notice of the
breach is given by MONY to Advest or the breaching shareholder, as
appropriate.
TERMINATION FEE
Advest is obligated to pay to MONY a termination fee of $10,000,000 in cash
if the merger agreement is terminated for any of the following reasons:
- the board of directors of Advest has withdrawn, modified in a manner
adverse to MONY, or failed to reconfirm within five business days
after written request from MONY, its approval or recommendation of
the merger agreement, the stock option agreement, the support
agreement or the merger or other transactions contemplated in the
merger agreement, or has recommended an alternative proposal (as
defined in the merger agreement) to the stockholders of Advest;
- the board of directors of Advest determines, in the exercise of its
good faith judgment as to fiduciary duties to its stockholders
imposed by law after consultation as to legal matters with outside
legal counsel and after consultation as to financial matters with an
investment banking firm of national reputation, that termination of
the merger agreement is required by reason of a superior proposal (as
defined in the merger agreement) being made; or
- any third party acquires beneficial ownership of more than 25% of
Advest's voting stock, or Advest enters into any agreement with
respect to a transaction (as defined in the merger agreement), or if
any transaction (as defined in the merger agreement) is consummated,
each within 18 months after termination of the merger for any of the
following reasons:
- the approval of Advest's stockholders required by the merger
agreement has not been obtained at a duly convened special meeting
called for that purpose or at any adjournment of the special
meeting, after a bona fide transaction proposal (as defined in the
merger agreement) for Advest has been publicly disclosed or any
person or entity has publicly disclosed a bona fide intention to
make a transaction proposal;
- there has been a willful, uncured breach by Advest of any
representation or warranty contained in the merger agreement or
the stock option agreement, or by any shareholder (as defined in
the support agreement) of any representation or warranty contained
in the support agreement, where the breach, without giving effect
to any qualification as to materiality, is reasonably likely to
have a company material adverse effect (as defined in the merger
agreement), after a bona fide transaction proposal (as defined in
the merger agreement) for Advest has been made known to the board
of directors of Advest, or publicly disclosed, or any person or
entity has made known to Advest's board, or otherwise publicly
disclosed, a bona fide intention to make a transaction proposal,
regardless of whether the transaction proposal has been rejected
by Advest or withdrawn prior to the time of the termination of the
merger;
59
<PAGE> 68
- there has been a willful, uncured material breach by Advest of any
of the covenants or agreements contained in the merger agreement
or the stock option agreement, or by any shareholder (as defined
in the support agreement) of any covenant or agreement contained
in the support agreement, after a bona fide transaction proposal
(as defined in the merger agreement) for Advest has been made
known to the board of directors of Advest, or publicly disclosed,
or any person or entity has made known to Advest's board, or
otherwise publicly disclosed, a bona fide intention to make a
transaction proposal, regardless of whether the transaction
proposal has been rejected by Advest or withdrawn prior to the
time of the termination of the merger; or
- the merger has not been consummated by February 28, 2001, and
either on or prior to that date, a bona fide transaction proposal
(as defined in the merger agreement) for Advest has been made
known to the board of directors of Advest, or publicly disclosed,
or any person or entity has made known to Advest's board, or
otherwise publicly disclosed, a bona fide intention to make a
transaction proposal, regardless of whether the transaction
proposal has been rejected by Advest or withdrawn prior to the
time of the termination of the merger.
EXPENSES
Whether or not the merger is consummated, all costs and expenses incurred
in connection with the merger agreement, the option agreement and the support
agreement, and the transactions contemplated by the merger agreement, the option
agreement and the support agreement, will be paid by the party incurring such
expenses except as otherwise provided in the merger agreement. The merger
agreement provides that MONY and Advest shall each pay fifty percent of the
filing fee for, and fifty percent of the expenses incurred in connection with
the printing and mailing of, this proxy statement/prospectus and the related
Form S-4.
AMENDMENT
The merger agreement may be amended by MONY, MONY Acquisition Corp. and
Advest by action taken by their respective boards of directors at any time
before or after approval by the stockholders of Advest of matters presented in
connection with the merger but, after any approval of the merger by Advest
stockholders, no amendment will be made that by law requires the further
approval of stockholders without first obtaining such further approval.
60
<PAGE> 69
STOCK OPTION AGREEMENT
As an inducement to MONY to enter into the merger agreement, Advest entered
into a stock option agreement with MONY, dated as of August 23, 2000. The
following is a summary of the material terms of the stock option agreement, but
it does not purport to be complete. Stockholders are encouraged to read the
stock option agreement in its entirety. A copy of the stock option agreement is
attached as Annex B to this proxy statement/prospectus.
Arrangements such as the stock option agreement are customarily entered
into in connection with corporate mergers and acquisitions in an effort to
increase the likelihood that the transactions will be consummated in accordance
with their terms, and to compensate the grantee for the efforts undertaken and
the expenses, losses and opportunity costs incurred by it in connection with the
transactions if they are not consummated under certain circumstances involving
an acquisition or potential acquisition of the issuer by a third party. The
stock option agreement was entered into to accomplish these objectives. The
stock option agreement may have the effect of discouraging offers by third
parties to acquire Advest prior to the merger, even if such persons were
prepared to offer to pay consideration to the Advest stockholders which has a
higher current market price than the merger consideration. In particular, the
stock option agreement could eliminate the ability of another party to acquire
Advest in a transaction accounted for as a pooling of interests. Neither MONY
nor Advest knows of any event that has occurred as of the date of this proxy
statement/prospectus that would allow MONY to exercise the option.
Pursuant to the stock option agreement, Advest granted MONY an
unconditional, irrevocable option which permits MONY to purchase up to 1,770,909
shares of Advest common stock, but in any case not more than 19.9% of the number
of shares of Advest common stock outstanding without giving effect to any shares
issued subject to or pursuant to the option, at an exercise price of $31.00 per
share. The number of shares of Advest common stock is subject to adjustment to
maintain the 19.9% ratio in the event of a change in the number of issued and
outstanding Advest shares.
The option may be exercised by MONY, in whole or in part, if, and only if,
an initial triggering event occurs followed by a subsequent triggering event,
both prior to termination of the option. Initial triggering events include:
- Advest or any of its subsidiaries, without MONY's prior written
consent, entering into an agreement to engage in an acquisition
transaction (as defined in the stock option agreement) with a third
party; or the board of directors of Advest recommending that the
stockholders of Advest approve or accept any such transaction;
- Advest or any of its subsidiaries, without MONY's prior written
consent, authorizing, recommending, proposing or publicly announcing
their intention to authorize, recommend or propose to engage in an
acquisition transaction, or the Advest board of directors publicly
withdrawing or modifying or publicly announcing its intent to
withdraw or modify, in any manner adverse to MONY, its recommendation
that the Advest stockholders approve the merger;
- any person acquiring beneficial ownership or the right to acquire
beneficial ownership of 10% or more of the outstanding shares of
Advest common stock;
- a publicly disclosed bona fide third party proposal to Advest or its
stockholders to engage in an acquisition transaction;
- following a third party overture regarding an acquisition
transaction, a breach by Advest of any covenant or obligation
contained in the merger agreement that would entitle MONY to
terminate the merger agreement, which is either not curable or not
cured prior to the date MONY gives notice of the exercise of the
option;
- the Advest board recommending that Advest stockholders approve or
accept an acquisition transaction;
61
<PAGE> 70
- an accepted filing with the Office of Thrift Supervision, the
National Association of Securities Dealers or any other federal or
state regulatory by any third party for approval to engage in an
alternative acquisition transaction with Advest;
- termination of the merger agreement under certain of its provisions
that trigger the $10 million termination fee.
Subsequent triggering events include:
- any person or group obtaining beneficial ownership of 25% or more of
the then-outstanding shares of Advest common stock;
- Advest or any of its subsidiaries, without the prior written consent
of MONY, agreeing to enter into an acquisition transaction, or the
Advest board recommending that the Advest stockholders approve or
accept an alternative acquisition transaction (including the
acquisition of securities representing 25% or more of Advest's voting
power);
- termination of the merger agreement by MONY due to public withdrawal
or modification by the Advest board (or a public announcement of the
intention to do so) of its recommendation that Advest stockholders
approve the merger; or
- termination of the merger agreement by Advest due to the exercise by
the Advest board of directors of good faith judgment as to its
fiduciary duties as a result of the receipt of a proposal for a
superior transaction.
MONY may exercise the option only if one of the above listed initial
triggering events and one of the above listed subsequent triggering events occur
prior to any of the following exercise termination events:
- the effective time of the merger;
- the termination of the merger agreement in accordance with its terms,
if such termination occurs prior to the occurrence of an initial
triggering event (except a termination by MONY for a willful, uncured
breach by Advest of a representation or warranty under the merger
agreement or the stock option agreement, or by an Advest stockholder
under the support agreement); or
- the passing of 12 months after termination of the merger agreement,
if such termination follows the occurrence of one of the initial
triggering events listed above or is a termination by MONY for a
willful uncured breach by Advest of any representation or warranty
contained in the merger agreement or the stock option agreement, or
by an Advest stockholder under the support agreement, where the
breach is not curable or, if curable, is not cured within 30 days
after notice of the breach is given by MONY to Advest (unless such
breach is non-volitional); provided, that if an initial triggering
event continues or occurs beyond termination and prior to the passage
of the 12-month period, the limit on the passage of time will be
extended to 12 months from the expiration of the last initial
triggering event to expire, but in no event more than 18 months after
termination of the merger agreement.
Immediately prior to consummation by Advest of any merger, consolidation or
similar transaction, a purchase, lease or other acquisition of all or a
substantial portion of the assets of Advest, or the acquisition by any person of
the beneficial ownership of 50% or more of the then outstanding shares of Advest
common stock, but prior to the occurrence of an exercise termination event,
Advest will be obligated, at the request of the option holder, to repurchase the
option from the option holder and to repurchase all or any part of the option
shares received upon the full or partial exercise of the option from the owner
of the option shares. The repurchase of the option shares will be at a price per
share equal to the greater of, and the repurchase of the option will be at a
price per share equal to the amount by which the option price is exceeded by the
greater of:
- the price per share at which a tender or exchange offer has been made
for Advest common stock;
- the price per share of Advest common stock to be paid by any third
party under an agreement with Advest;
62
<PAGE> 71
- the highest closing price per share of Advest common stock within the
six-month period immediately preceding the date that notice to
repurchase is given; or
- in the event of a sale of all or substantially all of Advest's
assets, the sum of the price paid for such assets and the current
market value of the remaining assets (as determined by a nationally
recognized investment banking firm selected by MONY and reasonably
acceptable to Advest), divided by the number of shares of Advest
common stock outstanding at the time of such sale.
The stock option agreement also provides that MONY may, at any time during
which Advest would be required to repurchase the option and option shares,
surrender the option (and any option shares obtained upon the exercise of the
option and still held by the option holder) for a surrender price equal to:
- $10,000,000; plus, if applicable,
- MONY's purchase price with respect to any previously purchased option
shares; less, if applicable,
- any net cash received by MONY from the arms' length sale of option
shares over MONY's purchase price with respect to such option shares.
MONY may not exercise its right to surrender the option and receive the
surrender price if Advest has previously repurchased any option shares or any
portion of the option pursuant to the provisions of the stock option agreement
described in the preceding paragraph.
The total profit that MONY may realize from the total of the termination
fee under the merger agreement and the net cash amounts received from the
repurchase or sale of the option, option shares or any substitute option may not
exceed $10 million. Furthermore, MONY may not exercise the option for a greater
number of shares of Advest stock than would, at the date of the notice of
exercise, result in the aggregate fair market value of Advest stock issued
pursuant to the option (as determined by the closing price of the Advest stock
on the trading day prior to the notice of exercise) having a value which is in
excess of $10 million greater than the aggregate exercise price for those
shares. In this case, Advest may at its discretion, raise the exercise price for
the option shares so that the aggregate fair market value of Advest stock issued
pursuant to the option (as determined above) will have a value which is not in
excess of $10 million greater than the aggregate exercise price for those
shares.
To the best knowledge of Advest, no event giving rise to the right to
exercise the option has occurred as of the date of this proxy
statement/prospectus.
63
<PAGE> 72
SUPPORT AGREEMENT
As an inducement to MONY entering into the merger agreement, Peter R.
Kellogg, Allen Weintraub, Grant W. Kurtz and George A. Boujoukos entered into a
support agreement with MONY dated as of August 23, 2000. As of the date of the
support agreement, Messrs. Kellogg, Weintraub, Kurtz and Boujoukos together
beneficially owned approximately 22.96% of the outstanding shares of Advest
common stock. The following is a summary of the material terms of the support
agreement, but it does not purport to be complete. Stockholders are encouraged
to read the support agreement in its entirety. A copy of the support agreement
is attached as Annex C to this proxy statement/prospectus.
Pursuant to the support agreement, Messrs. Kellogg, Weintraub, Kurtz and
Boujoukos have agreed, among other things, to vote (or cause to be voted) all
shares of Advest common stock owned or subsequently acquired by them prior to
the earlier of the closing of the merger or the termination of the merger
agreement (1) to approve and adopt the merger agreement and (2) in favor of the
merger. Messrs. Kellogg, Weintraub, Kurtz and Boujoukos have revoked any and all
previous proxies, and granted an irrevocable proxy appointing MONY, and Michael
I. Roth, Richard Daddario and Kenneth M. Levine, each individually, as their
attorney-in-fact and proxy, with full power to vote their shares.
The support agreement provides that, Messrs. Kellogg, Weintraub, Kurtz and
Boujoukos will not, among other things,
- directly or indirectly sell, assign, transfer, pledge or otherwise
dispose of or transfer any of their shares;
- deposit any of their shares into a voting trust or enter into a
voting agreement with or grant any proxy with respect to the shares;
or
- enter into any agreement with respect to the direct or indirect
acquisition or sale, assignment, transfer or other disposition of any
shares
provided that each shareholder may make a bona fide gift of shares and may
transfer shares into one or more trusts for estate or tax planning purposes, so
long as the recipient of each gift or trust enters into an agreement with the
Parent substantially identical to the support agreement.
In addition, Messrs. Kellogg, Weintraub, Kurtz and Boujoukos agreed not to
engage in any of the following actions, and in their capacity as stockholders of
Advest, not to authorize or knowingly permit any of their investment bankers,
attorneys, accountants, representatives and other agents, directly or
indirectly, to take any of the following actions:
- initiating, soliciting or encouraging any inquiries or the making or
the implementation of the submission of any alternative acquisition
proposal, or
- engaging in any negotiations concerning, or providing to any person
any confidential information or data with respect to, or having any
discussions with, any person relating to an alternative acquisition
proposal or relating to any tender offer for or solicitation of
proxies with respect to Advest shares.
Messrs. Kellogg, Weintraub, Kurtz and Boujoukos have also agreed to notify
MONY immediately in writing if,
- any inquiries or acquisition proposals are made by any person,
- any confidential information or data is requested by any person, or
- any negotiations or discussions are initiated or continued by any
person with respect to an acquisition proposal.
The support agreement terminates upon the earlier of the termination of the
merger agreement and the closing of the merger.
64
<PAGE> 73
COMPARISON OF STOCKHOLDER RIGHTS
The rights of Advest stockholders are currently governed by the Delaware
General Corporation Law, or DGCL, Advest's restated certificate of incorporation
and Advest's bylaws. The rights of MONY stockholders are currently governed by
the DGCL, MONY's amended and restated certificate of incorporation and MONY's
amended and restated bylaws. The following is a summary of material differences
between the rights of Advest stockholders and the rights of MONY stockholders.
It is not a complete statement of the provisions affecting, and the differences
between, the rights of Advest stockholders and MONY stockholders. The summary is
qualified in its entirety by reference to the DGCL, Advest's restated
certificate of incorporation and bylaws, and MONY's amended and restated
certificate of incorporation and amended and restated bylaws.
AUTHORIZED CAPITAL STOCK
<TABLE>
<S> <C>
Advest MONY
- 25,000,000 shares of common stock - 400,000,000 shares of common stock
- 2,000,000 preferred stock - 100,000,000 shares preferred stock
SIZE OF BOARD OF DIRECTORS
Advest MONY
The DGCL provides that the board of directors The DGCL provides that the board of directors
of a Delaware corporation shall consist of of a Delaware corporation shall consist of
one or more directors as fixed by the one or more directors as fixed by the
corporation's certificate of incorporation or corporation's certificate of incorporation or
bylaws. Under Advest's restated certificate bylaws. Under MONY's amended and restated
of incorporation, the specific number of certificate of incorporation and subject to
directors shall be as provided for in the the rights of the holders of any preferred
bylaws. Advest's bylaws provide that the size stock, the number of directors shall be as
of the board of directors shall be determined specified in the bylaws but not less than 5
by resolution; provided, however, that if or greater than 15. MONY's amended and
there is an Interested Stockholder (defined restated bylaws provide that the size of the
generally as a holder of 20% or more of board shall be determined by resolution. The
Advest's voting stock), such action will number of directors of MONY is currently
require a majority of the Continuing fixed at 14.
Directors (generally defined as an Advest
director who is not an Interested Stockholder
and was a director prior to the time that the
Interested Stockholder became such) then in
office. Each director will hold office until
his successor shall have become elected and
qualified. The number of directors of Advest
is currently fixed at 10.
FILLING VACANCIES ON THE BOARD
Advest MONY
The DGCL provides that, unless the governing The DGCL provides that, unless the governing
documents of a corporation provide otherwise, documents of a corporation provide otherwise,
vacancies and newly created directorships vacancies and newly created directorships
resulting from an increase in the authorized resulting from an increase in the authorized
number of directors elected by all of the number of directors elected by all of the
stockholders having the right to vote as a stockholders having the right to vote as a
single class may be filled by a majority of single class may be filled by a majority of
the directors then in office. the directors then in office.
The Advest board may fill vacancies or Subject to the rights of the holders of any
newly-created directorships by a majority of preferred stock, vacancies on MONY's board of
the directors then in directors may
</TABLE>
65
<PAGE> 74
<TABLE>
<S> <C>
office. However, if there is an Interested be filled by majority vote of the directors
Stockholder, at the time of such vote, the then in office, except that the stockholders
filling will also require a majority vote of must fill any vacancy resulting from the
the Continuing Directors. removal of a director by the stockholders.
</TABLE>
REMOVAL OF DIRECTORS
The DGCL provides that a director or the entire board of directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors. However, in the case of a
corporation whose board is classified, the directors may be removed only for
cause unless the certificate of incorporation provides otherwise. Both Advest's
and MONY's boards are classified, so directors may be removed only with cause.
Advest directors may be removed by the vote of the holders of at least 80% of
Advest stock. Advest directors may also be removed by at least two-thirds of the
directors then in office, except that if at the time of the removal, there is an
Interested Stockholder, a majority vote of the Continuing Directors would also
be required. MONY directors may be removed by the vote of the holders of at
least a majority of the combined voting power of all outstanding shares of MONY
stock entitled to vote generally in the election of directors, provided,
however, that any directors elected by holders of a series or class of preferred
stock, voting as a separate class, may be removed only in accordance with the
terms of such stock.
NOMINATION OF DIRECTORS FOR ELECTION
<TABLE>
<S> <C>
Advest MONY
Under Advest's bylaws, nominations for Under MONY's amended and restated bylaws,
Advest's board may be made by the board or nominations for MONY's board may be made by
by any stockholder who complies with the the board or any committee designated by the
notice procedures described in the bylaws. board or by any stockholder who complies
These procedures require the notice to be with the notice procedures described in the
received by Advest not earlier than 150 days bylaws. These procedures require the notice
prior to the meeting and not later than the to be received by MONY (a) in the case of an
60th day prior to the meeting or if less annual meeting, (i) not less than 60 nor
than 70 days' prior notice of the date of more than 90 days prior to the first
the scheduled annual meeting is given, then anniversary date of MONY's proxy statement
the 10th day following the first public in connection with the last annual meeting
announcement of the meeting date. or (ii) if no annual meeting was held the
previous year or the date of the current
annual meeting has been changed by more than
30 days from the date referenced in the
previous year's proxy statement, not later
than the close of business on the tenth day
after public disclosure of the date of the
current annual meeting and (b) in the case
of a special meeting called for the purpose
of electing directors, not later than the
close of business on the tenth day following
public disclosure of the meeting.
</TABLE>
STOCKHOLDER RIGHTS PLAN
Both Advest and MONY have implemented a stockholder rights plan, under
which a group of persons becomes an acquiring person upon a public announcement
that they have acquired or intend to acquire 20% of Advest's voting stock or 15%
of MONY's voting stock, respectively. This threshold can be reduced as provided
in the plan. Each share of MONY common stock issued in the merger will be issued
with an attached right. Advest has amended its Stockholder Rights Plan to exempt
from its provisions the merger agreement, stock option agreement and support
agreement and the transactions contemplated by those agreements.
STOCKHOLDER ACTION WITHOUT A MEETING
<TABLE>
<S> <C>
Advest MONY
Under Section 228 of the DGCL, unless Under Section 228 of the DGCL, unless
otherwise provided in the certificate of otherwise provided in the certificate of
incorporation, any action required or incorporation, any action required or
permitted to be taken at a permitted to be taken at a
</TABLE>
66
<PAGE> 75
<TABLE>
<S> <C>
stockholders' meeting may be taken without a stockholders' meeting may be taken without a
meeting pursuant to the written consent of meeting pursuant to the written consent of
the holders of the number of shares that the holders of the number of shares that
would have been required to effect the would have been required to effect the
action at an actual meeting of the action at an actual meeting of the
stockholders. The Advest restated stockholders. MONY's amended and restated
certificate of incorporation permits certificate of incorporation prohibits
stockholder action without a meeting if stockholder action by written consent.
holders of at least 75% of Advest stock give
written consent to taking an action without
a meeting.
</TABLE>
CALLING SPECIAL MEETINGS OF STOCKHOLDERS
<TABLE>
<S> <C>
Advest MONY
Under the DGCL, a special meeting of Under the DGCL, a special meeting of
stockholders may be called by the board of stockholders may be called by the board of
directors or by any other person authorized directors or by any other person authorized
to do so in the certificate of incorporation to do so in the certificate of incorporation
or the bylaws. Advest's bylaws provide that or the bylaws. MONY's amended and restated
a special meeting of stockholders may be bylaws provide that a special meeting of
called only by the board of directors, the stockholders may be called by the chairman
chairman of the board or the president. If of the board or the president, and shall be
at the time, there is an Interested called by the chairman, the president or the
Stockholder, any such call must also be secretary at the written request of a
approved by a majority of the Continuing majority of the board of directors. Holders
Directors. Holders of Advest common stock do of MONY common stock do not have the ability
not have the ability to call a special to call a special meeting of stockholders.
meeting of stockholders.
SUBMISSION OF STOCKHOLDER PROPOSALS
Advest MONY
The Advest bylaws provide that notice of any The MONY amended and restated bylaws provide
proposal to be presented by a stockholder that in order for a stockholder to bring
must be given not less than 60 nor more than business before the annual meeting, the
150 days before the scheduled annual stockholder must give notice of the proposal
meeting. However, if less than 70 days' to MONY (a) in the case of an annual
prior notice of the date of the scheduled meeting, (i) not less than 60 days or more
annual meeting is given, notice must be than 90 days prior to the first anniversary
delivered by the 10th day following the date of MONY's proxy statement in connection
first public announcement of the meeting with the last annual meeting or (ii) if no
date. annual meeting was held the previous year or
the date of the current annual meeting has
been changed by more than 30 days from the
date referenced in the previous year's proxy
statement, not later than the close of
business on the tenth day after public
disclosure of the date of the current annual
meeting and (b) in the case of a special
meeting called for the purpose of electing
directors, not later than the close of
business on the tenth day following public
disclosure of the meeting.
</TABLE>
67
<PAGE> 76
DISSENTERS' APPRAISAL RIGHTS
Section 262 of the DGCL provides stockholders of a corporation involved in
a merger the right to demand and receive payment of the fair value of their
stock in certain mergers. However, appraisal rights are not available to holders
of shares:
- listed on a national securities exchange;
- designated as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers,
Inc.; or
- held of record by more than 2,000 holders
unless holders of stock are required to accept in the merger anything other than
any combination of:
- shares of stock or depository receipts of the surviving corporation
in the merger;
- shares of stock or depository receipts of another corporation that,
at the effective date of the merger, will be:
- listed on a national securities exchange,
- designated as a national market system security on an interdealer
quotation system by the National Association of Securities
Dealers, Inc., or
- held of record by more than 2,000 holders; and
- cash instead of fractional shares of the stock or depository receipts
received.
Dissenters' appraisal rights are available to Advest stockholders with respect
to the merger. Dissenters' appraisal rights are not available to the MONY
stockholders with respect to the merger because the DGCL does not require that
MONY stockholders vote to approve the merger agreement.
LIMITATIONS ON DIRECTORS' LIABILITY
<TABLE>
<S> <C>
Advest MONY
Advest's restated certificate of MONY's amended and restated certificate of
incorporation provides that, to the fullest incorporation provides that a director of
extent permitted by the DGCL, a director of MONY shall not be liable personally to MONY
Advest shall not be personally liable to or its stockholders for monetary damages for
Advest for monetary damages, except for breach of fiduciary duty as a director,
liability under Section 174 of the DGCL. except for liability arising out of:
- any breach of the director's duty of
loyalty to MONY or its stockholders;
- acts or omissions not in good faith or
which involve intentional misconduct or a
knowing violation of law;
- Section 174 of the DGCL; or
- any transaction from which the director
derived an improper personal benefit.
</TABLE>
<TABLE>
<S> <C>
AMENDMENT OF CERTIFICATE OF INCORPORATION
Advest MONY
Under the DGCL, amendments to a Under the DGCL, amendments to a
corporation's certificate of incorporation corporation's certificate of incorporation
require the approval of the board of require the approval of the board of
directors and stockholders holding a directors and stockholders holding a
majority of the outstanding stock entitled majority of the outstanding stock entitled
to vote thereon, and a majority of the to vote thereon, and a majority of the
outstanding stock of each class entitled to outstanding stock of each class entitled to
vote on such amendment as a vote on such amendment as a
</TABLE>
68
<PAGE> 77
<TABLE>
<S> <C>
class, unless a greater number or proportion class, unless a greater number or proportion
is specified in the certificate of is specified in the certificate of
incorporation or by other provisions of the incorporation or by other provisions of the
DGCL. Amendment of Advest's restated DGCL.
certificate of incorporation requires
approval by resolution of the board of MONY's amended and restated certificate of
directors followed by stockholder approval incorporation provides that it may be
by at least a two-third margin for most amended in accordance with Delaware law,
provisions. However, if within sixty days except that terms adversely affecting
prior to the meeting at which stockholder certain preferred stock must be approved by
vote is to be taken, there is an Interested specified percentages of the holders of such
Stockholder, a majority of the Continuing stock.
Directors must approve the amendment prior
to stockholder approval.
AMENDMENT OF BYLAWS
Advest MONY
Under the DGCL, holders of a majority of the Under the DGCL, holders of a majority of the
voting power of a corporation, and, when voting power of a corporation, and, when
provided in the certificate of provided in the certificate of
incorporation, the directors of the incorporation, the directors of the
corporation, have the power to adopt, amend corporation, have the power to adopt, amend
and repeal the bylaws of a corporation. and repeal the bylaws of a corporation.
Advest's bylaws provide that the board may MONY's amended and restated certificate of
amend, adopt or repeal bylaws by a majority incorporation generally provides for
vote (and, if there is an Interested amendment of the bylaws by a majority of
Stockholder, a majority vote of the MONY's board of directors or by a majority,
Continuing Directors) and the stockholders or in specified cases, 80%, of the
may amend, adopt or repeal bylaws by a vote outstanding stock entitled to vote thereon.
of 80% of the outstanding shares.
</TABLE>
LISTING OR QUOTATION OF MONY COMMON SHARES; DELISTING OF ADVEST COMMON STOCK
It is a condition to the merger that MONY common shares issuable in the
merger be approved for listing on the NYSE on or prior to the effective time of
the merger, subject to official notice of issuance. If the merger is
consummated, shares of Advest common stock will cease to be listed on the NYSE.
69
<PAGE> 78
LEGAL MATTERS
The validity of the MONY common stock to be issued to Advest stockholders
will be passed upon for MONY by Dewey Ballantine LLP. Frederick W. Kanner, Esq.,
a member of the firm of Dewey Ballantine LLP, is a member of the board of
directors of MONY. Certain legal matters with respect to federal income tax
consequences in connection with the merger will be passed upon for MONY by
Norman Sinrich, Esq. Certain legal matters with respect to federal income tax
consequences in connection with the merger will be passed upon for Advest by
Wachtell, Lipton, Rosen & Katz and Day, Berry & Howard LLP.
EXPERTS
The consolidated financial statements of MONY incorporated in this proxy
statement/prospectus by reference to the Annual Report on Form 10-K of MONY for
the year ended December 31, 1999, have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of PricewaterhouseCoopers LLP as experts in auditing and accounting.
The consolidated financial statements and schedule of Advest incorporated
in this proxy statement/ prospectus by reference to the Annual Report on Form
10-K of Advest for the year ended September 30, 1999, have been so incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of PricewaterhouseCoopers LLP as experts in
auditing and accounting.
It is expected that representatives of PricewaterhouseCoopers LLP will be
present at the special meeting, to respond to appropriate questions and to make
a statement if they desire.
FUTURE STOCKHOLDER PROPOSALS
In the event the merger is not consummated, the only stockholder proposals
eligible to be considered for inclusion in the proxy materials for the 2001
annual meeting of Advest will be those which were submitted to Advest no later
than August 24, 2000, as provided in the January 27, 2000 Annual Meeting Proxy
Statement of Advest. The inclusion of any proposal will be subject to applicable
rules of the Securities and Exchange Commission.
WHERE YOU CAN FIND MORE INFORMATION
MONY and Advest file annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
reports, statements or other information MONY and Advest file at the SEC's
public reference rooms in Washington, D.C., New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. MONY's and Advest's SEC filings are also available to
the public from commercial document retrieval services and at the web site
maintained by the SEC at http://www.sec.gov.
MONY filed a registration statement on Form S-4 to register with the SEC
the MONY common shares to be issued to Advest stockholders in the merger. This
document is a part of that registration statement and constitutes a prospectus
of MONY in addition to being a proxy statement of Advest for its special
meeting. As permitted by SEC rules, this document does not contain all the
information you can find in the registration statement or the exhibits to the
registration statement.
The SEC allows MONY and Advest to "incorporate by reference" information
into this document, which means that MONY and Advest can disclose important
information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is deemed to be part of this
document, except for any information superseded by information in this document.
This document incorporates by reference the documents set forth below that MONY
and Advest have previously filed with the SEC. These documents contain important
information about MONY and Advest and their financial performance.
70
<PAGE> 79
<TABLE>
<CAPTION>
MONY'S SEC FILINGS
(FILE NO. 1-14603) PERIOD
------------------ ------
<S> <C>
Quarterly Reports on Form 10-Q............... Quarters ended March 31, 2000 and June 30,
2000
Annual Report on Form 10-K................... Fiscal year ended December 31, 1999
Current Reports on Form 8-K.................. Filed on March 8, 2000 and September 1, 2000
Proxy Statement for the Annual Meeting of
Shareholders on Schedule 14A dated March
30, 2000................................... Filed on March 30, 2000
Description of MONY Common Stock from
Registration Statement on Form 8-A......... Filed on November 6, 1998
Description of MONY Preferred Stock Purchase
Rights from Registration Statement on Form
8-A........................................ Filed on November 6, 1998
Amended description of MONY Preferred Stock
Purchase Rights from Registration Statement
on Form 8-A/A.............................. Filed on November 17, 1998
</TABLE>
MONY is also incorporating by reference additional documents that MONY
files with the SEC between the date of this document and the date of the Advest
special meeting.
<TABLE>
<CAPTION>
ADVEST'S SEC FILINGS
(FILE NO. 1-8408) PERIOD
-------------------- ------
<S> <C>
Quarterly Reports on Form 10-Q............... Quarters ended December 31, 1999, March 31,
2000 and June 30, 2000
Annual Report on Form 10-K................... Fiscal year ended September 30, 1999
Current Report on Form 8-K................... Filed on March 3, 2000 and August 24, 2000
Proxy Statement for the Annual Meeting of
Stockholders on Schedule 14A dated December
22, 1999................................... Filed on December 28, 1999
Description of Advest Common Stock Purchase
Rights from Registration Statement on Form
8-A........................................ Filed on November 4, 1988
Amended description of Advest Common Stock
Purchase Rights from Registration Statement
on Form 8-A/A.............................. Filed on February 22, 1989 and March 17, 1998
</TABLE>
Advest is also incorporating by reference additional documents that Advest
files with the SEC between the date of this document and the date of the Advest
special meeting.
MONY has supplied all information contained or incorporated by reference in
this document relating to MONY, and Advest has supplied all the information
contained or incorporated by reference in this document relating to Advest.
71
<PAGE> 80
ANNEX A
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
THE MONY GROUP INC.
MONY ACQUISITION CORP.
AND
THE ADVEST GROUP, INC.
DATED AS OF AUGUST 23, 2000
<PAGE> 81
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
--------
<C> <S> <C>
ARTICLE 1 The Merger.................................................. A-1
1.1 The Merger.................................................. A-1
1.2 The Closing................................................. A-1
1.3 Effective Time.............................................. A-2
1.4 The Charter and Bylaws...................................... A-2
1.5 Directors of the Surviving Corporation...................... A-2
1.6 Officers of the Surviving Corporation....................... A-2
ARTICLE 2 Conversion and Exchange of Securities....................... A-2
2.1 Merger Sub Stock............................................ A-2
2.2 Company Stock............................................... A-2
2.3 Exchange of Certificates Representing Company Common
Stock....................................................... A-5
2.4 Adjustment of Exchange Ratio................................ A-8
ARTICLE 3 Representations and Warranties of the Company............... A-8
3.1 Existence; Good Standing; Corporate Authority............... A-8
3.2 Authorization, Validity and Effect of Agreements............ A-8
3.3 Capitalization.............................................. A-8
3.4 Subsidiaries................................................ A-9
3.5 Other Interests............................................. A-9
3.6 No Violation................................................ A-9
3.7 SEC Documents............................................... A-10
3.8 Patents, Trademarks, Copyrights and Trade Secrets........... A-10
3.9 Investigations; Litigation.................................. A-11
3.10 Compliance with Law; Governmental Approvals................. A-11
3.11 Absence of Certain Changes.................................. A-12
3.12 Taxes and Tax Returns....................................... A-12
3.13 Material Contracts.......................................... A-14
3.14 Employee Benefit Plans...................................... A-14
3.15 Labor Matters............................................... A-15
3.16 Parent Stock Ownership...................................... A-16
3.17 Tax Reorganization.......................................... A-16
3.18 Environmental Matters....................................... A-16
3.19 Status of Subsidiary that is a Savings Association.......... A-16
3.20 Derivative Instruments...................................... A-16
3.21 Investment Advisory Activities.............................. A-16
3.22 State Takeover Statutes and Shareholder Rights Plan......... A-17
3.23 No Brokers.................................................. A-17
3.24 Opinion of Financial Advisor................................ A-17
ARTICLE 4 Representations and Warranties of Parent and Merger Sub..... A-18
4.1 Existence; Good Standing; Corporate Authority; Compliance
with Law.................................................... A-18
4.2 Authorization, Validity and Effect of Agreements............ A-18
4.3 Capitalization.............................................. A-18
4.4 Merger Sub.................................................. A-19
4.5 Compliance with Law; Governmental Approvals................. A-19
4.6 No Violation................................................ A-19
4.7 Investigations; Litigation.................................. A-19
4.8 SEC Documents............................................... A-20
4.9 Absence of Certain Changes.................................. A-20
4.10 No Brokers.................................................. A-20
4.11 Taxes....................................................... A-21
ARTICLE 5 Covenants................................................... A-21
5.1 Alternative Proposals....................................... A-21
5.2 Interim Operations.......................................... A-22
</TABLE>
i
<PAGE> 82
<TABLE>
<CAPTION>
PAGE NO.
--------
<C> <S> <C>
5.3 Meeting of Stockholders..................................... A-23
5.4 Filings; Other Actions...................................... A-23
5.5 Inspection of Records....................................... A-24
5.6 Publicity................................................... A-24
5.7 Registration Statement...................................... A-24
5.8 Listing Application......................................... A-25
5.9 Affiliate Letters........................................... A-25
5.10 Expenses.................................................... A-25
5.11 Directors' and Officers' Indemnification and Insurance...... A-25
5.12 Additional Agreements....................................... A-27
5.13 Shareholder Rights Plan and Takeover Statutes............... A-27
5.14 Conveyance Taxes............................................ A-27
5.15 Certain Tax Matters......................................... A-27
5.16 Company Satisfaction of the Conditions of Section 15 of the
1940 Act.................................................... A-28
5.17 Advisory Contract Consents.................................. A-28
5.18 Retention Plan.............................................. A-28
5.19 Dividends................................................... A-28
5.20 Employee Benefits........................................... A-29
5.21 Section 16 Matters.......................................... A-29
5.22 No Fundamental Parent Changes............................... A-29
ARTICLE 6 Conditions.................................................. A-30
6.1 Conditions to Each Party's Obligation to Effect the
Merger...................................................... A-30
6.2 Conditions to Obligation of the Company to Effect the
Merger...................................................... A-30
6.3 Conditions to Obligation of Parent and Merger Sub to Effect
the Merger.................................................. A-31
ARTICLE 7 Termination................................................. A-32
7.1 Termination by Mutual Consent............................... A-32
7.2 Termination by Either Parent or the Company................. A-32
7.3 Termination by the Company.................................. A-32
7.4 Termination by Parent....................................... A-32
7.5 Effect of Termination and Abandonment....................... A-33
7.6 Extension; Waiver........................................... A-34
ARTICLE 8 General Provisions.......................................... A-34
8.1 Nonsurvival of Representations, Warranties and Agreements... A-34
8.2 Notices..................................................... A-34
8.3 Assignment; Binding Effect.................................. A-35
8.4 Entire Agreement............................................ A-35
8.5 Amendment................................................... A-35
8.6 Governing Law............................................... A-35
8.7 Counterparts................................................ A-35
8.8 Headings.................................................... A-36
8.9 Interpretation.............................................. A-36
8.10 Waivers..................................................... A-36
8.11 Incorporation of Exhibits................................... A-36
8.12 Severability................................................ A-36
8.13 Enforcement of Agreement.................................... A-36
8.14 Subsidiaries and Material Subsidiaries...................... A-36
8.15 Company Material Adverse Effect............................. A-36
8.16 Parent Material Adverse Effect.............................. A-37
EXHIBIT A Form of Affiliate Letter
EXHIBIT B Advest 2000 Retention Plan
EXHIBIT C Advest 2000 Management Incentive Plan
</TABLE>
ii
<PAGE> 83
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of August 23,
2000, between The MONY Group Inc., a Delaware corporation ("Parent"), MONY
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent ("Merger Sub"), and The Advest Group, Inc., a Delaware corporation (the
"Company").
RECITALS
A. Parent and the Company each have determined that a business combination
between Parent and the Company is in the best interests of their respective
companies and stockholders and presents an opportunity for their respective
companies to achieve long-term strategic and financial benefits, and accordingly
have agreed to effect the merger provided for herein upon the terms and subject
to the conditions set forth herein.
B. Concurrently with the execution of this Agreement, in order to induce
Parent and Merger Sub to enter into the Agreement, certain stockholders of the
Company are entering into a support agreement (the "Support Agreement") with
Parent, providing for certain voting and other restrictions with respect to the
shares of Company Common Stock (as defined herein) beneficially owned by them
upon the terms and conditions specified therein.
C. Concurrently with the execution of this Agreement, in order to induce
Parent and Merger Sub to enter into the Agreement, the Company is entering into
an option agreement with Parent pursuant to which Parent shall be granted the
right to purchase up to 19.9% of the issued and outstanding shares of Company
Common Stock upon the occurrence of certain events as set forth therein (the
"Option Agreement").
D. It is intended that for federal income tax purposes, the merger provided
for herein shall qualify as a reorganization within the meaning of Section
368(a) of the Code (as defined in Section 3.12).
E. Merger Sub is a wholly-owned subsidiary of Parent and has been formed
solely to facilitate the Merger (as defined herein) and has conducted and will
conduct no business or activity other than in connection with the Merger.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger.
Subject to the terms and conditions of this Agreement, at the Effective
Time (as defined in Section 1.3), the Company shall be merged with and into
Merger Sub in accordance with this Agreement, and the separate corporate
existence of the Company shall thereupon cease (the "Merger"). Merger Sub shall
be the surviving corporation in the Merger (sometimes hereinafter referred to as
the "Surviving Corporation") and will be a wholly owned subsidiary of Parent.
The Merger shall have the effects specified in the Delaware General Corporation
Law ("DGCL").
1.2 The Closing.
Subject to the terms and conditions of this Agreement, the closing of the
Merger (the "Closing") shall take place (a) at the offices of Dewey Ballantine
LLP, 1301 Avenue of the Americas, New York, New York, at 10:00 a.m., local time,
on the first business day immediately following the day on which the last to be
fulfilled or waived of the conditions set forth in Article 6 shall be fulfilled
or waived in accordance herewith or (b) at such other time, date or place as
Parent and the Company may agree in writing. The date on which the Closing
occurs is hereinafter referred to as the "Closing Date."
A-1
<PAGE> 84
1.3 Effective Time.
If all the conditions set forth in Article 6 shall have been fulfilled or
waived in accordance herewith and this Agreement shall not have been terminated
as provided in Article 7, the parties hereto shall cause a Certificate of Merger
meeting the requirements of Section 251 of the DGCL to be properly executed and
filed in accordance with such Section on the Closing Date. The Merger shall
become effective at the time of filing of the Certificate of Merger with the
Secretary of State of the State of Delaware in accordance with the DGCL or at
such later time which the parties hereto shall have agreed upon and designated
in such filings as the effective time of the Merger (the "Effective Time").
1.4 The Charter and Bylaws.
(a) The Certificate of Incorporation of Merger Sub as in effect immediately
prior to the Effective Time (with Article First thereof amended to read in its
entirety as follows: "The name of the corporation is: The Advest Group, Inc.")
shall be the Certificate of Incorporation of the Surviving Corporation as of the
Effective Time until duly amended as provided therein or by applicable law.
(b) The Bylaws of Merger Sub in effect immediately prior to the Effective
Time shall be the Bylaws of the Surviving Corporation as of the Effective Time,
until thereafter amended as provided therein or by applicable law.
1.5 Directors of the Surviving Corporation.
The directors of Merger Sub immediately prior to the Effective Time shall
be the directors of the Surviving Corporation as of the Effective Time and until
their successors are duly appointed or elected in accordance with applicable
law.
1.6 Officers of the Surviving Corporation.
The officers of Merger Sub immediately prior to the Effective Time shall be
the officers of the Surviving Corporation as of the Effective Time and until
their successors are duly appointed or elected in accordance with applicable
law.
ARTICLE 2
CONVERSION AND EXCHANGE OF SECURITIES
2.1 Merger Sub Stock.
At the Effective Time, each share of common stock, par value $1.00 per
share, of Merger Sub outstanding immediately prior to the Effective Time shall
be converted into and exchanged for one validly issued, fully paid and
non-assessable share of common stock, par value $1.00 per share, of the
Surviving Corporation.
2.2 Company Stock.
(a) At the Effective Time, subject to the provisions of this Section 2.2.,
each share of common stock, par value $.01 per share, of the Company including
all associated Rights (as defined in Section 3.22) ("Company Common Stock"),
other than shares canceled pursuant to Section 2.2(c) and Dissenting Shares (as
defined in Section 2.2(m)), if any, issued and outstanding immediately prior to
the Effective Time shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into the right to receive, at the
option of the holder as contemplated by Sections 2.2(d) through 2.2(i), (i) an
amount in cash equal to the product of (A) the average closing price per share
of the common stock, par value $.01, of Parent ("Parent Common Stock") on the
New York Stock Exchange ("NYSE") for the ten consecutive trading days ending on
the fifth trading day prior to the Closing Date, as set forth in the Eastern
edition of the Wall Street Journal or, if not reported therein, any other
authoritative source ("Average Price") and (B) the Exchange Ratio (as such term
is defined and calculated pursuant to Annex A hereto, based on the Average
Price), without interest, (the "Cash Price Per Share"), (ii) a number of shares
of Parent Common Stock equal to the Exchange Ratio (together with the associated
rights issued pursuant to the Parent Rights Agreement (as
A-2
<PAGE> 85
defined in Section 4.3)) or (iii) a combination of cash and Parent Common Stock
(together with the associated rights) determined in accordance with this Section
(each of the foregoing, the "Merger Consideration").
(b) As a result of the Merger and without any action on the part of the
holder thereof, at the Effective Time, all shares of Company Common Stock
outstanding immediately prior to the Effective Time shall cease to be
outstanding and shall cease to exist, and each holder of shares of Company
Common Stock shall thereafter cease to have any rights with respect to such
shares of Company Common Stock (other than Dissenting Shares, which shall have
the rights contemplated by Section 262 of the DGCL), except the right to
receive, without interest, the consideration contemplated by Section 2.2(a) and
cash in accordance with Sections 2.3(c) and 2.3(e) upon the surrender of a
certificate (a "Certificate") representing such shares of Company Common Stock.
(c) Each share of Company Common Stock that is owned by Parent or any of
Parent's wholly-owned subsidiaries or held in the Company's treasury at the
Effective Time ("Parent Shares") shall, by virtue of the Merger, cease to be
outstanding and shall be canceled and retired and shall cease to exist without
payment of any consideration therefor.
(d) Subject to the provisions of this Section 2.2, each record holder of
shares of Company Common Stock immediately prior to the Effective Time will be
entitled to elect to receive either (i) the Cash Price Per Share for all of such
holder's shares ("Cash Election"), (ii) the Cash Price Per Share for a stated
number of such holder's shares and a number of shares of Parent Common Stock
equal to the Exchange Ratio per share of Company Common Stock for the balance of
such holder's shares of Company Common Stock ("Partial Cash Election") or (iii)
a number of shares of Parent Common Stock equal to the Exchange Ratio per share
of Company Common Stock for all of such holder's shares of Company Common Stock
("Stock Election"). All Cash Elections, Partial Cash Elections and Stock
Elections shall be unconditional and made on a form designed for that purpose
and mutually agreeable to Parent and the Company (a "Form of Election"). Any
holder of Company Common Stock who fails to properly make a Cash Election,
Partial Cash Election or Stock Election and any holder who fails to submit to
the Paying Agent referred to below a properly completed and signed and properly
and timely submitted Form of Election shall be deemed to have indicated no
preference as to the receipt of cash or Parent Common Stock with respect to such
holder's shares (a "Non-Election") and will receive the Merger Consideration
described below.
(e) The aggregate number of shares of Company Common Stock to be converted
into the right to receive cash in the Merger (which shall include Dissenting
Shares, if any) shall be equal to 49.9% of the total number of shares of Company
Common Stock issued and outstanding immediately prior to the Effective Time
(other than Parent Shares) (the "Cash Election Number"). The remaining number of
such issued and outstanding shares of Company Common Stock immediately prior to
the Effective Time (other than Parent Shares) (the "Stock Election Number")
shall be converted into the right to receive Parent Common Stock in the Merger;
provided, however, that notwithstanding anything contained in this Agreement to
the contrary, the Stock Election Number shall equal as nearly as practicable
50.1% of the total number of shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than Parent Shares).
(f) If the aggregate number of shares of Company Common Stock for which
cash was elected under a Cash Election or a Partial Cash Election plus
Dissenting Shares, if any, (collectively, the "Cash Election Shares") exceeds
the Cash Election Number, then all shares of Company Common Stock for which
Parent Common Stock was elected under a Stock Election or a Partial Cash
Election (collectively, the "Stock Election Shares") and all shares of Company
Common Stock covered by Non-Elections (the "Non-Election Shares") shall be
converted into the right to receive Parent Common Stock, and the Cash Election
Shares (other than Dissenting Shares) shall be converted into the right to
receive cash and Parent Common Stock in the following manner:
Each Cash Election Share (other than Dissenting Shares) shall be
converted into the right to receive (A) an amount of cash (rounded to the
nearest cent), without interest, equal to the product of (x) the Cash Price
Per Share and (y) a fraction (the "Cash Fraction"), the numerator of which
shall be
A-3
<PAGE> 86
the Cash Election Number and the denominator of which shall be the total
number of Cash Election Shares and (B) a number of shares of Parent Common
Stock equal to the product of (x) the Exchange Ratio and (y) a fraction
equal to one (1) minus the Cash Fraction.
(g) If the aggregate number of Stock Election Shares exceeds the Stock
Election Number, all Cash Election Shares and all Non-Election Shares shall be
converted into the right to receive cash, and all Stock Election Shares shall be
converted into the right to receive Parent Common Stock and cash in the
following manner:
Each Stock Election Share shall be converted into the right to receive
(A) a number of shares of Parent Common Stock equal to the product of (x)
the Exchange Ratio and (y) a fraction (the "Stock Fraction"), the numerator
of which shall be the Stock Election Number and the denominator of which
shall be the total number of Stock Election Shares, and (B) an amount of
cash (rounded to the nearest cent), without interest, equal to the product
of (x) the Cash Price Per Share and (y) a fraction equal to one (1) minus
the Stock Fraction.
(h) In the event that neither subparagraph (f) or (g) above is applicable,
all Cash Election Shares shall be converted into the right to receive cash, all
Stock Election Shares shall be converted into the right to receive Parent Common
Stock, and all Non-Election Shares shall be converted into the right to receive
(A) an amount of cash (rounded to the nearest cent), without interest, equal to
the product of (x) the Cash Price Per Share and (y) a fraction, the numerator of
which shall be the Cash Election Number less the Cash Election Shares and the
denominator of which shall be the Non-Election Shares, and (B) a number of
shares of Parent Common Stock equal to the product of (x) the Exchange Ratio and
(y) a fraction, the numerator of which shall be the Stock Election Number less
the Stock Election Shares and the denominator of which shall be the Non-Election
Shares.
(i) The Company shall use all reasonable best efforts to cause copies of
the Form of Election (which shall contain a Letter of Transmittal (as defined
herein)) to be mailed with the Proxy Statement/Prospectus (as defined in Section
5.7) to the record holders of Company Common Stock (other than holders of
Dissenting Shares) as of the record date for the Company Stockholders Meeting
and to make the Form of Election available to all persons who become record
holders of Company Common Stock during the period between such record date and
the Election Deadline referred to below. A properly completed Form of Election
must be received by the Paying Agent by 5:00 p.m., New York City time, on the
second business day preceding the Closing Date (the "Election Deadline"), which
day shall not be less than 20 days after the initial mailing of the Form of
Election, in order to be effective. An election by a holder of Company Common
Stock shall be validly made only if the Paying Agent shall have timely received
a Form of Election properly completed and executed (with the signature or
signatures thereon guaranteed as required by the Form of Election) by that
shareholder accompanied either by the Certificate or Certificates representing
all of the shares of Company Common Stock owned by that shareholder, duly
endorsed in blank or otherwise in form acceptable for transfer on the books of
the Company, or by an appropriate guarantee of delivery in the form customarily
used in transactions of this nature from a member of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company in the United States. All elections may be
revoked until the Election Deadline in writing by the record holders submitting
Forms of Election. Parent shall have the authority, in its sole discretion, to
make all determinations as to whether or not a Form of Election has been timely
received.
(j) The Company shall cause a Stock Election to be made with respect to
each Company Common Share owned beneficially or of record by any subsidiary of
the Company or any other affiliate of the Company or any employee benefit plan
controlled by the Company.
(k) Effective immediately prior to the Effective Time, each outstanding
option to purchase shares of Company Common Stock granted under the Company's
1993 Stock Option Plan, 1999 Stock Option Plan, 1994 Non-Employee Director Stock
Option Plan, 2000 Non-Employee Director Stock Option Plan and Equity Plan
(collectively, the "Company Stock Option Plans") or under any other outstanding
option, warrant or similar agreements granting options, warrants or similar
rights to purchase capital stock of the Company (the "Company Options"), whether
or not then exercisable or vested, will be cancelled and, in consideration
A-4
<PAGE> 87
thereof, the Company (or, at Parent's option, Merger Sub) will pay to each
holder of a Company Option an amount in cash in respect thereof equal to the
product of (x) the excess, if any, of the Cash Price Per Share over the exercise
price of each such Company Option and (y) the number of shares of Company Common
Stock previously subject to the Company Option immediately prior to its
cancellation (such payment to be net of any withholding taxes required by the
Code or other applicable law). The Company agrees to take or cause to be taken
all action necessary under such Company Options to provide for such cancellation
and payment.
(l) The Company Stock Option Plans shall terminate as of the Effective
Time, and the provisions in any other plan or arrangement of the Company or any
of its Subsidiaries providing for the offering, issuance, purchase, transfer or
grant of any capital stock of the Company or any interest in respect of any
capital stock of the Company shall be deleted as of the Effective Time, and
following the Effective Time no holder of any Company Option or warrant or any
participant in any Company Stock Option Plan or other plan or arrangement of the
Company shall have any right thereunder to acquire any capital stock of the
Company or the Surviving Corporation.
(m) Prior to the Closing Date the Company shall take all necessary and
appropriate actions to provide that, upon the Effective Time, 50% of each
restricted stock award or deferred stock award or any other stock-based award
(other than the Options), the value of which is based upon the value of the
Company Common Stock (collectively, the "Stock Awards") which is at the
Effective Time subject to any vesting requirement which would not be accelerated
as a result of the transactions contemplated in this Agreement and which was
issued pursuant to a Company Stock Option Plan or any of the Company's
Non-Employee Director Equity Plan, Key Professional Equity Plan, Equity Plan,
1998 Equity Plan, 1997 Equity Plan, or 1995 Equity Plan or any other similar
plans, programs or arrangements, or pursuant to any individual restricted stock
agreements between the Company and certain executive employees, shall become
fully vested and payable or distributable 100% in cash (based upon the Cash
Price Per Share). At the Effective Time, the remaining 50% of such Stock Awards
which are outstanding immediately prior thereto shall be converted automatically
into stock awards for such number of shares of Parent Common Stock as shall be
equal to the product of the number of shares of such Company Common Stock
multiplied by the Exchange Ratio, provided that any fractional shares of Parent
Common Stock resulting therefrom shall be rounded up to the nearest whole share.
The terms of the new stock awards shall otherwise be the same as the original
stock awards, except all references to The Advest Group, Inc. shall be deemed to
be references to The MONY Group Inc. The Company agrees to take or cause to be
taken all actions necessary under such Stock Awards to provide for such
acceleration and payment. No Stock Award shall be subject to any election
pursuant to Section 2.2 (d)-(h).
(n) To the extent that holders thereof are entitled to appraisal rights
under Section 262 of the DGCL, shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time and held by a holder who has
properly exercised and perfected his demand for appraisal rights under Section
262 of the DGCL (the "Dissenting Shares") shall not be converted into the right
to receive the Merger Consideration, but the holders of Dissenting Shares shall
be entitled to receive such consideration as shall be determined pursuant to
Section 262 of the DGCL; provided, however, that if any such holder shall have
failed to perfect or shall effectively withdraw or lose his right to appraisal
and payment under the DGCL, each of such holder's shares of Company Common Stock
shall thereupon be deemed to have been converted as of the Effective Time into
the right to receive the Merger Consideration in accordance with this Agreement
with respect to those shares, as though such shares as of the Effective Time
were Non-Election Shares. The Company shall give Parent (a) prompt notice of any
written demands for fair value received by the Company, withdrawals of such
demands, and any other related instruments served pursuant to Section 262 of the
DGCL and received by the Company and (b) the opportunity to direct all
negotiations and proceedings with respect to demands for fair value under the
DGCL. The Company shall not, except with the prior written consent of Parent,
voluntarily make any payment with respect to any demands for fair value for
Dissenting Shares or offer to settle, or settle, any such demands.
2.3 Exchange of Certificates Representing Company Common Stock.
(a) Prior to the Effective Time, Parent shall appoint EquiServe, or such
other institution as may be reasonably acceptable to the Company, to act as
paying agent (the "Paying Agent") for the payment of
A-5
<PAGE> 88
Merger Consideration upon surrender of certificates representing the shares of
Company Common Stock. As of the Effective Time, Parent shall deposit, or shall
cause to be deposited, with the Paying Agent, for the benefit of the holders of
shares of Company Common Stock, an amount of cash and certificates representing
such number of shares of Parent Common Stock required to effect the conversion
of Company Common Stock into Parent Common Stock and cash pursuant to Section
2.2, plus additional cash in an amount equal to Parent's good faith estimate of
the cash required to be paid to holders of shares of Company Common Stock in
lieu of fractional shares expected to be payable in connection with the Merger
(such cash and certificates for shares of Parent Common Stock, together with any
dividends or distributions with respect thereto (relating to record dates for
such dividends or distributions after the Effective Time), being hereinafter
referred to as the "Exchange Fund") to be issued pursuant to Section 2.2 and
paid pursuant to this Section 2.3 in exchange for outstanding shares of Company
Common Stock.
(b) Promptly after the Effective Time, Parent shall cause the Paying Agent
to mail to each holder of record of shares of Company Common Stock (other than
Dissenting Shares) that has not timely submitted a properly completed and
executed Form of Election accompanied by an appropriately endorsed Certificate
or Certificates representing all of the shares of Company Common Stock owned by
that shareholder (or, alternatively, by an appropriate guarantee of delivery)
(i) a letter of transmittal specifying that delivery shall be effected, and risk
of loss and title to such shares of Company Common Stock shall pass, only upon
delivery of the Certificates representing such shares to the Paying Agent and
which letter shall be in such form and have such other provisions as Parent may
reasonably specify (a "Letter of Transmittal") and (ii) instructions for use in
effecting the surrender of Company Common Stock Certificates in exchange for the
Merger Consideration contemplated by Section 2.2 and this Section 2.3, including
cash in lieu of fractional shares. After the Effective Time, the holders of all
Certificates previously submitted with a Form of Election and of those
subsequently surrendered for cancellation to the Paying Agent together with a
Letter of Transmittal, duly executed and completed in accordance with the
instructions thereto, shall be entitled to receive in exchange therefor (x) a
certificate representing that number of whole shares of Parent Common Stock, if
any, into which the shares of Company Common Stock previously represented by
such Certificate have been converted in accordance with Section 2.2, (y) the
amount of cash, if any, to which such holder is entitled in accordance with
Section 2.2 and (z) the amount of cash in lieu of fractional shares of Parent
Common Stock, if any, and unpaid dividends and distributions, if any, that such
holder has the right to receive in respect of the Certificate surrendered
pursuant to the provisions of this Article 2, after giving effect to any
required withholding tax, and the shares represented by the Certificate so
surrendered shall forthwith be canceled. No interest will be paid or accrued on
the cash payable to holders of shares of Company Common Stock. In the event of a
transfer of ownership of Company Common Stock that is not registered in the
transfer records of the Company, a certificate representing the proper number of
shares of Parent Common Stock, together with a check for the cash to be paid may
be issued to the transferee if the Certificate representing such Company Common
Stock is presented to the Paying Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid.
(c) Notwithstanding any other provisions of this Agreement, no dividends or
other distributions declared after the Effective Time on Parent Common Stock
shall be paid with respect to any shares of Company Common Stock represented by
a Certificate, and no cash payment in lieu of fractional shares shall be paid to
any such holder pursuant to Section 2.3(e), until such Certificate is
surrendered for exchange as provided herein. Subject to the effect of applicable
laws, following surrender of any such Certificate, there shall be paid to the
holder of the certificates representing whole shares of Parent Common Stock
issued in exchange therefor, without interest, (i) at the time of such
surrender, the amount of any cash payable in lieu of a fractional share of
Parent Common Stock to which such holder is entitled pursuant to Section 2.3(e)
and the amount of dividends or other distributions with a record date after the
Effective Time theretofore payable with respect to such whole shares of Parent
Common Stock and not paid, less the amount of any withholding taxes which may be
required thereon, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time but
prior to surrender and a payment date subsequent to surrender payable with
respect to such whole shares of Parent Common Stock, less the amount of any
withholding taxes which may be required thereon.
A-6
<PAGE> 89
(d) At or after the Effective Time, there shall be no transfers on the
stock transfer books of the Company of the shares of Company Common Stock which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
shall be canceled and exchanged for certificates for shares of Parent Common
Stock and cash deliverable in respect thereof pursuant to this Agreement in
accordance with the procedures set forth in this Article 2. Certificates
surrendered for exchange by any person constituting an "affiliate" of the
Company for purposes of Rule 145(c) under the Securities Act of 1933, as amended
(the "Securities Act"), shall not be exchanged until Parent has received a
written agreement from such person as provided in Section 5.9.
(e) No fractional shares of Parent Common Stock shall be issued pursuant
hereto. In lieu of the issuance of any fractional share of Parent Common Stock,
cash adjustments will be paid to holders in respect of any fractional share of
Parent Common Stock that would otherwise be issuable, and the amount of such
cash adjustment shall be equal to the product obtained by multiplying such
stockholder's fractional share of Parent Common Stock that would otherwise be
issuable by the Average Price. In lieu of depositing with the Paying Agent the
amount of cash to be paid to holders of fractional interests, Parent shall have
the right to deliver to the Paying Agent the aggregate number of shares of
Parent Common Stock to be issued in the Merger (the "Aggregate Shares").
Thereupon the Paying Agent shall determine the excess of (i) the number of
Aggregate Shares over (ii) the number of full shares of Parent Common Stock to
be issued in the Merger (the "Excess Shares"). Following the Effective Time, the
Paying Agent, as agent for the holders of the Aggregate Shares, shall sell the
Excess Shares at the prevailing prices on the NYSE. The sale of the Excess
Shares by the Paying Agent shall be executed on the NYSE through one or more
member firms of the NYSE and shall be executed in round lots to the extent
practicable. The Paying Agent shall use all reasonable best efforts to complete
the sale of the Excess Shares as promptly following the Effective Time as, in
the Paying Agent's reasonable judgment, is practicable consistent with obtaining
the best execution of such sales in light of prevailing market conditions. Until
the net proceeds of such sale or sales have been distributed to the holders of
Company Common Stock, the Paying Agent will hold such proceeds in trust for such
holders (the "Common Shares Trust"). Parent shall pay all commissions, transfer
taxes and other out-of-pocket transaction costs, including the expenses and
compensation of the Paying Agent, incurred in connection with such sale of the
Excess Shares. The Paying Agent shall determine the portion of the Common Shares
Trust to which each holder of shares shall be entitled, if any, by multiplying
the amount of the aggregate net proceeds comprising the Common Shares Trust by a
fraction, the numerator of which is the amount of fractional share interests to
which such holder is entitled (after taking into account all shares of Company
Common Stock held at the Effective Time by such holder) and the denominator of
which is the aggregate amount of fractional shares interests to which all
holders of Company Common Stock are entitled.
(f) Any portion of the Exchange Fund (including the proceeds of any
investments thereof and any shares of Parent Common Stock) that remains
unclaimed by the former stockholders of the Company six months after the
Effective Time shall be delivered to Parent. Any former stockholders of the
Company who have not theretofore complied with this Article 2 shall thereafter
look only to Parent, and Parent shall comply with such requests, made in
accordance with the terms of this Agreement, for payment of their shares of
Parent Common Stock, cash and unpaid dividends and distributions on Parent
Common Stock deliverable in respect of each share of Company Common Stock such
stockholder holds as determined pursuant to this Agreement, in each case,
without any interest thereon.
(g) None of Parent, the Company, the Surviving Corporation, the Paying
Agent or any other person shall be liable (except to the extent provided by
applicable law) to any former holder of shares of Company Common Stock for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(h) In the event any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and the posting by such person of a
bond in such amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Paying Agent will issue in exchange for such lost, stolen or destroyed
Certificate the shares of Parent Common Stock and cash deliverable in respect
thereof pursuant to this Agreement.
A-7
<PAGE> 90
2.4 Adjustment of Exchange Ratio.
In the event that, subsequent to the date of this Agreement but prior to
the Effective Time, the outstanding shares of Parent Common Stock or Company
Common Stock, respectively, shall have been changed into a different number of
shares or a different class as a result of a stock split, reverse stock split,
stock dividend, subdivision, reclassification, combination, exchange,
recapitalization or other similar transaction, the Exchange Ratio shall be
appropriately adjusted.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule delivered at or prior to the
execution hereof to Parent (the "Company Disclosure Schedule") or in the Company
Reports (as defined below) filed on or prior to the date hereof, the Company
represents and warrants to Parent as of the date of this Agreement as follows:
3.1 Existence; Good Standing; Corporate Authority.
The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of Delaware. The Company is duly licensed or
qualified to do business as a foreign corporation and is in good standing under
the laws of any other state of the United States in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary, except where the failure to be so qualified
or to be in good standing is not reasonably likely to have a Company Material
Adverse Effect (as defined below). The Company has all requisite corporate power
and authority to own, operate and lease its properties and carry on its business
as now conducted or as reasonably contemplated in the future. Each of the
Company's Subsidiaries is a corporation or partnership duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has the corporate or partnership power and
authority to own its properties and to carry on its business as it is now being
conducted, and is duly qualified to do business and is in good standing in each
jurisdiction in which the ownership of its property or the conduct of its
business requires such qualification, except for jurisdictions in which such
failure to be so qualified or to be in good standing is not reasonably likely to
have a Company Material Adverse Effect. The Advest Group, Inc. has no
governmental or non-governmental permits, licenses or authorizations or any
contracts or other agreements that are not freely assignable.
3.2 Authorization, Validity and Effect of Agreements.
The Company has all requisite corporate power and authority to execute and
deliver this Agreement, the Option Agreement and all other agreements and
documents contemplated hereby and thereby and to perform its obligations
hereunder and thereunder. Subject only to the approval of this Agreement and the
transactions contemplated hereby by the holders of a majority of the outstanding
shares of Company Common Stock, the consummation by the Company of the
transactions contemplated hereby and by the Option Agreement and the Support
Agreement has been unanimously approved by the Board of Directors of the Company
(the "Company Board") and duly authorized by all requisite corporate action.
This Agreement and the Option Agreement constitute, and all other agreements and
documents contemplated hereby to which the Company is a party (when executed and
delivered pursuant hereto) will constitute, the valid and legally binding
obligations of the Company, enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, moratorium or other similar
laws of general applicability relating to creditors' rights and general
principles of equity.
3.3 Capitalization.
The authorized capital stock of the Company consists of 25,000,000 shares
of Company Common Stock and 2,000,000 shares of preferred stock, $.01 par value
per share ("Company Preferred Stock"). As of August 18, 2000, there were
8,899,109 shares of Company Common Stock issued and outstanding, 2,215,047
shares of Company Common Stock held in the Company's treasury, and no shares of
Company Preferred Stock issued and outstanding. Since such date, no shares of
capital stock of the Company have been issued, except shares of Company Common
Stock issued pursuant to the exercise of options outstanding under
A-8
<PAGE> 91
the Company Stock Option Plans. As of August 18, 2000, options to acquire
998,583 shares of Company Common Stock were outstanding pursuant to the terms of
the Company Stock Option Plans. Since such date, no additional options have been
granted. The Company has no outstanding bonds, debentures, notes or other
obligations the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) on any
matter with respect to such securities. All issued and outstanding shares of
Company Common Stock are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights, and were issued in compliance with
all applicable federal and state securities laws, rules and regulations. There
are not at the date of this Agreement any existing options, warrants, calls,
subscriptions, convertible securities, or other rights, agreements or
commitments, other than under the Company Stock Option Plans, that obligate the
Company or any of its Subsidiaries to issue, transfer or sell any shares of
capital stock of the Company or any of its Subsidiaries, except that as of the
date hereof, there were shares of Series A Participating Preferred Stock subject
to issuance pursuant to the Shareholder Rights Agreement, dated as of October
31, 1998, as amended on March 12, 1998, between the Company and American Stock
Transfer and Trust Company, as successor Rights Agent (the "Rights Agreement").
After the Effective Time, the Surviving Corporation will have no obligation to
issue, transfer or sell any shares of capital stock or other securities of the
Company or the Surviving Corporation or any Subsidiary of the Company pursuant
to any Company Plan (as defined in Section 3.14) or otherwise.
3.4 Subsidiaries.
The Company owns directly or indirectly each of the outstanding shares of
capital stock (or other ownership interests having by their terms ordinary
voting power to elect a majority of directors or others performing similar
functions with respect to such Subsidiary) of each of the Company's
Subsidiaries. Each of the outstanding shares of capital stock of each of the
Company's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and is owned, directly or indirectly, by the Company free and
clear of all liens, pledges, security interests, claims or other encumbrances.
Set forth in Section 3.4 of the Company Disclosure Schedule is the name and
jurisdiction of incorporation of each Subsidiary of the Company.
3.5 Other Interests.
Except for interests in its Subsidiaries and except pursuant to its
investment activities in the ordinary course of business, neither the Company
nor any of its Subsidiaries owns directly or indirectly any interest or
investment (whether equity or debt) in any corporation, partnership, joint
venture, business, trust or entity.
3.6 No Violation.
Neither the execution and delivery by the Company of this Agreement or the
Option Agreement nor the consummation by the Company of the transactions
contemplated hereby and thereby in accordance with the terms hereof and thereof,
or the consummation of the transactions contemplated by the Support Agreement,
will: (i) conflict with or result in a breach of any provisions of the Restated
Certificate of Incorporation or Restated Bylaws of the Company; (ii) result in a
breach or violation of, a default under, or the triggering of any payment or
other material obligations pursuant to, or accelerate vesting under, any
existing Company Plan, or any grant or award made under any of the foregoing;
(iii) violate, conflict with, result in a breach of any provision of, constitute
a default (or an event which, with notice or lapse of time or both, would
constitute a default) under, result in the termination or in a right of
termination or cancellation of, accelerate the performance required by, result
in the triggering of any payment or other material obligations pursuant to,
result in the creation of any lien, security interest, charge or encumbrance
upon any of the material properties of the Company or its Subsidiaries under, or
result in being declared void, voidable, or without further binding effect, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
deed of trust or any license, franchise, permit, lease, contract, agreement or
other instrument, commitment or obligation to which the Company or any of its
Subsidiaries is a party, or by which the Company or any of its Subsidiaries or
any of their respective properties is bound or affected, except for any of the
foregoing matters that are not reasonably likely to have a Company Material
Adverse Effect; or (iv) other than (a) the filings provided for in Article 1,
(b) the filings required under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), the Home Owners' Loan Act of 1933, as
amended (the "Home Owners' Loan Act"), the Connecticut General Statute of 1999,
as amended (the "Connecticut General Statute"), the Securities
A-9
<PAGE> 92
Exchange Act of 1934, as amended (the "Exchange Act"), the Securities Act and
applicable state securities and "Blue Sky" laws, the rules of the NYSE and the
National Association of Securities Dealers, Inc. (the "NASD"), (c) the consents,
approvals and notices required or contemplated under the Investment Company Act
of 1940, as amended (the "1940 Act") and the Investment Advisers Act of 1940, as
amended (the "Advisers Act"), and (d) the filing of any required applications or
notices with the Office of Thrift Supervision (the "OTS"), the Commissioner of
Banking for the State of Connecticut and the NASD ((a), (b), (c) and (d),
collectively, the "Regulatory Filings"), require any consent, approval or
authorization of, action by or in respect of, or declaration, filing or
registration with, any domestic governmental or regulatory authority or
self-regulatory organization, other than consents, approvals, authorizations,
actions, declarations or filings or registration that, if not obtained or made,
are not reasonably likely to have an Company Material Adverse Effect.
3.7 SEC Documents.
As of their respective dates, each registration statement, report, proxy
statement or information statement (as defined in Regulation 14C under the
Exchange Act) of the Company prepared by the Company since January 1, 1995, in
the form (including exhibits and any amendments thereto) filed with the
Securities & Exchange Commission (the "SEC"), (collectively, the "Company
Reports") (i) complied as to form in all material respects with the applicable
requirements of the Securities Act, the Exchange Act, and the rules and
regulations thereunder and (ii) did 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 made therein, in the light of the circumstances
under which they were made, not misleading. Each of the balance sheets included
in or incorporated by reference into the Company Reports (including the related
notes and schedules) fairly presents in all material respects the consolidated
financial position of the Company and its Subsidiaries as of its date, and each
of the statements of earnings, changes in shareholders' equity and cash flows
included in or incorporated by reference into the Company Reports (including any
related notes and schedules) fairly presents in all material respects the
results of operations, retained earnings or cash flows, as the case may be, of
the Company and its Subsidiaries for the periods set forth therein (subject, in
the case of unaudited statements, to normal year-end audit adjustments which
would not be material in amount or effect), in each case in accordance with
generally accepted accounting principles ("GAAP") consistently applied during
the periods involved, except as may be noted therein. Neither the Company nor
any of its Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise), except (a) as set forth in
the Company Reports, (b) liabilities or obligations reflected on, or reserved
against in, a balance sheet of the Company or in the notes thereto, prepared in
accordance with GAAP consistently applied and included in the Company Reports,
and (c) liabilities or obligations incurred in the ordinary course of business
which are not reasonably likely to have a Company Material Adverse Effect.
3.8 Patents, Trademarks, Copyrights and Trade Secrets.
(a) Except as set forth in Section 3.8 of the Company Disclosure Schedule
or the Company Reports, (i) there is no existing or, to the knowledge of the
Company, threatened infringement, misuse or misappropriation by others, of any
United States or foreign patents, patent applications, trademarks, whether
registered or as to which registration has been applied for, tradenames, service
marks, copyrights, processes, designs, formulae, inventions, know-how, trade
secrets or concepts (the "Intellectual Property") of the Company or any of its
Subsidiaries that is reasonably likely to be material to the Company's
operation, (ii) there are no pending or threatened claims by the Company or any
of its Subsidiaries against others for infringement, misuse or misappropriating,
of any Intellectual Property of the Company or its Subsidiaries that are
reasonably likely to be material to the Company's operation and (iii) neither
the Company nor any of its Subsidiaries is infringing, misusing or
misappropriating any Intellectual Property of any third party and no claim of
such infringement, misuse or misappropriation is pending or, to the Company's
knowledge, threatened.
(b) Except as set forth in Section 3.8 of the Company Disclosure Schedule
or the Company Reports, the Company and its Subsidiaries own or possess adequate
licenses or other valid rights to use all of the Intellectual Property of the
Company and its Subsidiaries used or proposed to be used in the business of the
A-10
<PAGE> 93
Company and its Subsidiaries as currently conducted or as proposed to be
conducted. The Company has no knowledge of any facts or claims which may bring
the validity of its issued patents into question.
3.9 Investigations; Litigation.
Except as set forth in Section 3.9 of the Company Disclosure Schedule or in
the Company Reports and except in the ordinary course of its business, (a) no
material investigation or review by any governmental entity with respect to the
Company or any of its Subsidiaries or any of the Company Funds (as hereinafter
defined) is pending (or, to the Company's knowledge, threatened) nor has any
governmental entity indicated to the Company an intention to conduct the same;
and (b) there are no actions, suits or proceedings pending against the Company
or its Subsidiaries or, to the knowledge of the Company, threatened against the
Company or its Subsidiaries, at law or in equity, or before or by any federal,
state, local or foreign commission, board, bureau, agency or instrumentality.
Neither the Company nor any of its Subsidiaries is a party to or is subject to
any order, decree, agreement, memorandum of understanding or similar arrangement
with, or a commitment letter or similar submission to, any regulatory agency or
other governmental entity (including any United States or foreign government;
any state or other political subdivision thereof; any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government; any Self-Regulatory Organization (as defined below)
and any court, tribunal or arbitrator(s) of competent jurisdiction) charged with
the supervision or regulation of broker-dealers, securities underwriting or
trading, stock exchanges, commodities exchanges, investment companies,
investment advisors or insurance agents and brokers or the supervision or
regulation of the Company or any of its Subsidiaries or any of the other
businesses they conduct; and neither the Company nor any of its Subsidiaries has
been notified in writing by or received any written communication from any such
regulatory agency or other governmental entity to the effect that such
regulatory agency or other governmental entity is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting) any
such order, decree, agreement, memorandum of understanding, commitment letter or
similar submission. Neither the Company nor any of its affiliated persons, as
defined in Section 2(a)(3) of the 1940 Act, has been convicted within the past
10 years of any felony or misdemeanor described in Section 9(a)(1) of the 1940
Act, or is, by reason of any misconduct, permanently or temporarily enjoined
from acting in the capacities, or engaging in the activities, described in
Section 9(a)(2) of the 1940 Act. As used herein, "Self-Regulatory Organization"
means any United States or foreign governmental or non-governmental
self-regulatory organization, agency or authority, including any of the NYSE,
NASD, the National Futures Association, or any securities or other exchange or
board of trade of which the Company or any of its Subsidiaries is a member or to
the supervision or regulation of which the Company or any of its Subsidiaries is
subject.
3.10 Compliance With Law; Governmental Approvals.
(a) Neither the Company nor any of its Subsidiaries is in violation of any
order of any court, governmental authority, arbitration board or tribunal, or
Self-Regulatory Organization to which the Company or any of its Subsidiaries or
any of their respective properties or assets is subject, other than any
violations that are not reasonably likely to have a Company Material Adverse
Effect. The Company, each of its Subsidiaries, each employee of each of them,
and each of the Company Funds (as hereinafter defined) holds, and has at all
pertinent times held, all licenses, franchises, permits, qualifications,
authorizations, orders and approval of, and has made or obtained all filings,
notices, applications, consents, registrations, approvals, permits or
authorizations with, to or of, all regulatory agencies, other governmental
entities and Self-Regulatory Organizations (collectively, "Permits") necessary
for the lawful ownership and use of the respective properties and assets of the
Company, each of its Subsidiaries, and each of the Company Funds and the conduct
of their respective businesses under and pursuant to every, and is in compliance
with each, and are not in default under any, and have taken all actions required
by each, applicable law, ordinance, governmental rule or regulation, or rule of
each Self-Regulatory Organization to which it is subject in connection with
their business as now conducted (including their sales and marketing practices),
except where the failure to obtain any such item or to take any such action is
not reasonably likely to have a Company Material Adverse Effect. The Company has
received no notice asserting any such violation. All such Permits are valid and
in good standing in all material respects and are not subject to any proceeding
for the suspension, modification or revocation thereof or proceedings related
thereto.
A-11
<PAGE> 94
(b) The Company and each of its Subsidiaries that are required to be
registered as a broker-dealer, an investment advisor, a commodity pool operator,
futures commission merchant, introducing broker, commodity trading advisor or
insurance agent with the SEC, the CFTC, the securities commission or similar
authority or insurance authority of any state or foreign jurisdiction or any
Self-Regulatory Organization are duly registered as such and such registrations
are in full force and effect. All United States Federal, state and foreign
registration requirements have been complied with in all material respects and
such registrations as currently filed, and all periodic reports required to be
filed with respect thereto, are accurate and complete in all material respects.
Since January 1, 1998, there have been no contributions or payments, and there
is no other information, that would be required to be disclosed by the Company
or any of the Company's Subsidiaries on any Form G-37/G-38 or recorded by the
Company or any such Subsidiary pursuant to Rule G-8(a)(xvi) of the United States
Municipal Securities Rulemaking Board. As used herein, "CFTC" means the United
States Commodities Futures Trading Commission.
(c) The Company and each Subsidiary which renders investment advisory
services to investment advisory clients with whom such entity is or was a party
to an investment advisory agreement or similar arrangement has, at all times
since January 1, 1998 or its date of formation, whichever is later, rendered
such services in material compliance with all applicable requirements as to
portfolio composition and portfolio management including, but not limited to,
the terms of such investment advisory agreements, written instructions from such
investment advisory clients, prospectuses or other offering materials, board of
director or trustee directives and applicable law.
(d) Neither the Company, nor any of its Affiliates (as defined below), is
subject to a "statutory disqualification" as defined in Section 3(a)(39) of the
Exchange Act or is subject to a disqualification that would be a basis for
censure, limitations on the activities, functions or operations of, or
suspension or revocation of the registration of any broker-dealer Subsidiary of
the Company as a broker-dealer, municipal securities dealer, government
securities broker or government securities dealer under Section 15, Section 15B
or Section 15C of the Exchange Act, and there is no reasonable basis for, or
proceeding or investigation, whether formal or informal or whether preliminary
or otherwise, that is reasonably likely to result in, any such censure,
limitations, suspension or revocation.
3.11 Absence of Certain Changes.
Since January 1, 2000, the Company and each of its Subsidiaries and each of
the Investment Companies (as defined in Section 3.21(a)) has conducted its
business only in the ordinary course of such business, and there has not been
(i) any Company Material Adverse Effect or any event which is reasonably likely
to result in a Company Material Adverse Effect; (ii) any declaration, setting
aside or payment of any dividend or other distribution with respect to its
capital stock (other than regular quarterly cash dividends payable on Company
Common Stock in an amount not to exceed $0.06 per share); (iii) any material
change in its accounting principles, practices or methods; or (iv) any action
taken of the type contemplated in Section 5.2(iii), (vii), (x), (xii) or (xiii).
3.12 Taxes and Tax Returns.
(a) Definitions:
"Code" means the Internal Revenue Code of 1986, as amended. All
citations to provisions of the Code, or to the Treasury Regulations
promulgated thereunder, shall include any amendments thereto and any
substitute or successor provisions thereto.
"Taxes" means any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions, levies and
liabilities, including, without limitation, taxes based upon or measured by
gross receipts, income, profits, sales, use and occupation, and value
added, ad valorem, transfer, gains, franchise, withholding, payroll,
recapture, employment, excise, unemployment, insurance, social security,
business license, occupation, business organization, stamp, environmental
and property taxes, together with all interest, penalties and additions
imposed with respect to such amounts. For purposes of this Agreement,
"Taxes" also includes any obligations under any agreements or arrangements
with any person with respect to the liability for, or sharing of, Taxes
(including, without limitation,
A-12
<PAGE> 95
pursuant to Treas. Reg. Section 1.1502-6 or comparable provisions of state,
local or foreign Tax law) and including, without limitation, any liability
for Taxes as a transferee or successor, by contract or otherwise.
"Taxable Period" means any taxable year or any other period that is
treated as a taxable year (or other period, or portion thereof, in the case
of a Tax imposed with respect to such other period or portion thereof,
e.g., a quarter) with respect to which any Tax may be imposed under any
applicable statute, rule, or regulation.
"Tax Return" means any report, return, election, notice, estimate,
declaration, information statement and other forms and documents
(including, without limitation, all schedules, exhibits and other
attachments thereto) relating to and filed or required to be filed with a
taxing authority in connection with any Taxes (including, without
limitation, estimated Taxes).
(b) All material Tax Returns required to be filed by or with respect to the
Company and each of its Subsidiaries and, to the Company's knowledge, the
Investment Companies for all Taxable Periods have been timely filed. All such
Tax Returns are true, correct, and complete in all material respects. All Taxes
shown to be payable on such Tax Returns, and all assessments of Tax made against
the Company and each of its Subsidiaries and, to the Company's knowledge, the
Investment Companies with respect to such Tax Returns, have been paid when due.
No adjustment relating to any such Tax Return has been proposed or threatened in
writing or to the Company's knowledge, in any other communication, by any taxing
authority.
(c) The Company and each of its Subsidiaries and the Investment Companies
have provided a reserve (without regard to deferred Tax assets and liabilities)
(the "Tax Reserve") on the financial statements included in the Company Reports
that is adequate in accordance with GAAP for all unpaid Taxes for Taxable
Periods ending on or prior to the date of such financial statements.
(d) The Company and each of its Subsidiaries have complied in all material
respects with the provisions of the Code relating to the withholding and payment
of Taxes, including, without limitation, the withholding and reporting
requirements under Code sections 1441 through 1464, 3401 through 3406, and 6041
through 6050S, as well as similar provisions under any other laws (including
without limitation state, local and foreign laws).
(e) None of the Tax Returns of the Company or any of its Subsidiaries has
been or is currently being examined by the Internal Revenue Service ("IRS") or
state, local or foreign taxing authorities. The Company is not aware of any
state of facts which to the Company's knowledge, would constitute grounds for
the proper assessment of any material liability for Taxes with respect to
periods (or portions thereof) which have not been audited by the IRS or other
taxing authority and with respect to which the relevant statute of limitations
has not expired. There are no examinations or other administrative or court
proceedings relating to Taxes in progress or pending, nor has the Company or any
of its Subsidiaries or, to the Company's knowledge, the Investment Companies
received a revenue agent's or similar written report asserting a Tax deficiency.
(f) No claim has ever been made in writing by any taxing authority with
respect to the Company or any of its Subsidiaries or, to the Company's
knowledge, the Investment Companies in a jurisdiction where the Company and/or
any of its Subsidiaries and/or the Investment Companies do not file Tax Returns
that the Company or any such Subsidiary or Investment Company is or may be
subject to taxation by that jurisdiction. There are no security interests on any
of the assets of the Company or any of its Subsidiaries that arose in connection
with any failure (or alleged failure) to pay any Taxes and, except for liens for
Taxes that are not yet due and payable or are being disputed in good faith by
appropriate proceedings, there are no liens for any Tax upon any asset of the
Company or any of its Subsidiaries or the Investment Companies.
(g) Neither the Company nor any of its Subsidiaries or, to the Company's
knowledge, the Investment Companies is, or has been, a party to any agreement
relating to allocating or sharing the payment of, or liability for, Taxes with
respect to any Taxable Period (other than an agreement solely between or among
the Company and its Subsidiaries).
(h) Neither the Company nor any of its Subsidiaries or, to the Company's
knowledge, the Investment Companies has distributed the stock of any corporation
in a transaction satisfying the requirements of
A-13
<PAGE> 96
Section 355 of the Code since April 16, 1997. The stock of neither the Company
nor any of its Subsidiaries has been distributed in a transaction satisfying the
requirements of Section 355 of the Code since April 16, 1997.
(i) No extension of time with respect to any date on which a Tax Return was
or is to be filed by the Company or any of its Subsidiaries or, to the Company's
knowledge, the Investment Companies is in force, and no waiver or agreement by
the Company or any of its Subsidiaries or, to the Company's knowledge, the
Investment Companies is in force for the extension of time for the assessment or
payment of any Taxes.
(j) Neither the Company nor any of its Subsidiaries has been a member of an
(i) affiliated group (within the meaning of Section 1504 of the Code) or (ii)
affiliated, combined, consolidated, unitary, or similar group for state, local
or foreign Tax purposes, in each case other than the group of which the Company
is the common parent.
(k) Neither the Company nor any of its Subsidiaries or, to the Company's
knowledge, the Investment Companies has been, is or is reasonably expected to be
a party to a closing agreement or similar arrangement with the IRS or any
relevant state, local or foreign taxing authority.
3.13 Material Contracts.
All contracts material to the business and operations of the Company and
its Subsidiaries and the Investment Companies taken as a whole (the "Material
Contracts") are in full force and effect and are enforceable against all parties
thereto in accordance with their terms. Neither the Company nor any of its
Subsidiaries or the Investment Companies is in default under any such Material
Contract and, to the knowledge of the Company, no other party to any Material
Contract with the Company or any Subsidiary or Investment Company is in default
thereunder and the Company has no knowledge of any fact, circumstance or event
which might reasonably be expected in the future to cause any such party to be
in default under any such Material Contract except for such instances that are
not reasonably likely to result in a Company Material Adverse Effect. Neither
the Company nor any of its Subsidiaries or the Investment Companies is a party
to or bound by any non-competition agreement or any other agreement or
obligation which purports to limit in any material respect the manner in which,
or the localities in which, the business of the Company or its Affiliates
(including Parent and its Subsidiaries following the Effective Time) is or would
be conducted.
3.14 Employee Benefit Plans.
(a) Schedule 3.14 of the Company Disclosure Schedule contains a true and
complete list of each material employment, bonus, deferred compensation,
incentive compensation, stock purchase, stock option, stock appreciation right
or other stock-based incentive, severance, change-in-control, or termination
pay, hospitalization or other medical, disability, life or other insurance,
supplemental unemployment benefits, profit-sharing, pension, or retirement plan,
program, agreement or arrangement, and each other employee benefit plan,
program, agreement or arrangement, sponsored, maintained or contributed to or
required to be contributed to by the Company or any Subsidiary for the benefit
of any current or former employee, consultant, or director of the Company or any
of its Subsidiaries (the "Company Plans").
(b) With respect to each of the Company Plans, the Company has delivered to
Parent true and complete copies of each of the following documents, as
applicable: (i) a copy of the Company Plan documents (including all amendments
thereto) for each written Company Plan; (ii) a copy of the annual report or
Internal Revenue Service Form 5500 Series for the last year ending prior to the
date of this Agreement if such report was required to be filed; (iii) a copy of
the actuarial report, if required under the Employment Retirement Income
Security Act of 1974, as amended ("ERISA"), for the last year ending prior to
the date of this Agreement; (iv) a copy of the most recent Summary Plan
Description ("SPD") if required under ERISA; (v) if the Company Plan is funded
through a trust or any other funding vehicle, a copy of the trust or other
funding agreement (including all amendments thereto) and the latest financial
statements thereof, if any, and (vi) the most recent determination letter
received from the IRS with respect to each Company Plan that is intended to be
qualified under Section 401(a) of the Code. In addition, with respect to each
Company Plan, the Company has made available, or will prior to the Closing Date
make available, to Parent true and correct copies of all insurance contracts and
all other material contracts relating to such Company Plans.
A-14
<PAGE> 97
(c) Neither the Company, any Subsidiary, nor any trade or business, whether
or not incorporated (an "ERISA Affiliate"), that together with the Company would
be deemed a "single employer" within the meaning of Section 4001(b)(1) of ERISA
has or at any time in the past has had (i) any obligation to contribute to, or
any liability, contingent or otherwise with respect to, a plan subject to Title
IV of ERISA, Section 412 of the Code, or Section 302 of ERISA, or (ii) an
obligation to contribute to any "multiemployer plan" (as defined in Section
3(37) of ERISA).
(d) Neither the Company, any Subsidiary nor any of the Company Plans, any
trust created thereunder, nor to the knowledge of the Company, any trustee, or
administrator thereof has engaged in a transaction or has taken or failed to
take any action in connection with which the Company, any Subsidiary or any
ERISA Affiliate could be subject to any material liability for either a civil
penalty assessed pursuant to Section 409 or 502(i) of ERISA or a tax imposed
pursuant to Section 4975(a) or (b), 4976, 4980B, 4980D or 4980E of the Code.
(e) Each of the Company Plans has been operated and administered in all
material respects in accordance with applicable laws, including but not limited
to ERISA, the Code and the Age Discrimination in Employment Act of 1967, as
amended.
(f) The Company has applied for and received a currently effective
determination letter from the IRS stating that each of the Company Plans that is
intended to be "qualified" within the meaning of Section 401(a) of the Code is
so qualified and the trusts maintained thereunder are exempt from tax under
Section 501(a) of the Code and no event has occurred which would affect such
qualified status.
(g) Any fund established under a Company Plan that is intended to satisfy
the requirements of section 501(c)(9) of the Code has so satisfied such
requirements.
(h) No Company Plan provides benefits, including health, life, death or
medical benefits (whether or not insured), with respect to current or former
employees of the Company, any Subsidiary or any ERISA Affiliate after retirement
or other termination of service (other than (i) coverage mandated by applicable
laws, (ii) death benefits or retirement benefits under any "employee pension
benefit plan," as that term is defined in Section 3(2) of ERISA, (iii) deferred
compensation benefits accrued as liabilities on the books of the Company, a
Subsidiary or an ERISA Affiliate, (iv) benefits, the full direct cost of which
is borne by the current or former employee (or beneficiary thereof), or (v)
under Section 4980B of the Code).
(i) The consummation of the transactions contemplated by this Agreement,
either alone or together with any other event, will not (i) entitle any current
or former employee, officer or director of the Company, any Subsidiary or any
ERISA Affiliate to severance pay or (ii) accelerate the time of payment or
vesting, or increase the amount of or otherwise enhance any benefit due any such
employee, officer or director. There are no pending, or, to the knowledge of
Parent, threatened or anticipated, claims by or on behalf of any Company Plan,
by any employee or beneficiary under any such Company Plan, or otherwise
involving any such Company Plan (other than routine claims for benefits).
3.15 Labor Matters.
Neither the Company nor any of its Subsidiaries is a party to, or bound by,
any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization. Neither the Company nor
any of its Subsidiaries, nor their respective representatives or employees, has
committed any unfair labor practices in connection with the operation of the
respective businesses of the Company or any of its Subsidiaries. There is no
unfair labor practice or labor arbitration proceeding pending or, to the
knowledge of the Company, threatened against the Company or its Subsidiaries
relating to their business by the National Labor Relations Board or any similar
governmental or adjudicatory agency or court. To the knowledge of the Company,
there are no organizational efforts with respect to the formation of a
collective bargaining unit currently being made or threatened involving
employees of the Company or any of its Subsidiaries. The Company and its
Subsidiaries are in compliance with all applicable federal, state and local
laws, rules and regulations regarding employment, consulting, employment
practices, employee classification, labor relations, safety and health, wages,
hours, withholding and terms and conditions of employment.
A-15
<PAGE> 98
3.16 Parent Stock Ownership.
Neither the Company nor any of its Subsidiaries or the Investment Companies
beneficially owns any shares of Parent Common Stock or other securities
convertible into or exercisable for Parent Common Stock.
3.17 Tax Reorganization.
The Company is not aware of any fact or circumstance that could reasonably
be expected to prevent the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code.
3.18 Environmental Matters.
Except as described in Section 3.18 of the Company Disclosure Schedule or
in the Company Reports, the Company and each of its Subsidiaries are in material
compliance with all applicable federal, state, local and foreign laws, rules and
regulations relating to pollution or protection of human health, worker safety
or the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) (collectively, "Environmental
Laws"). Such compliance includes, but is not limited to, the possession by the
Company and its Subsidiaries of all material permits and other governmental
authorizations required under applicable Environmental Laws, and compliance with
the terms and conditions thereof. Neither the Company nor any of its
Subsidiaries has received written notice of, or to the knowledge of the Company,
is the subject of, any actions, causes of action, claims, investigations,
demands or notices by any person or entity alleging liability under or
noncompliance with any Environmental Law. To the knowledge of the Company, there
are no circumstances that are reasonably likely to prevent or interfere with
such material compliance in the future.
3.19 Status of Subsidiary That is a Savings Association.
(a) Advest Bank and Trust Company (the "Bank"), a subsidiary of the
Company, is currently deemed to be a "savings association" by the OTS. As of the
date hereof, the Bank continues to meet all of the requirements of the OTS to
enable it to retain its status as a "savings association." The Company is
currently treated as a "unitary thrift holding company" by the OTS. As of the
date hereof, the Company continues to meet all of the requirements of the OTS to
enable it to retain its status as a "unitary thrift holding company."
(b) The Bank is "well capitalized" (as that term is defined at 12 C.F.R.
208.43(b)(1) or the relevant regulation of the Bank's primary federal bank
regulator), and "well managed" (as that term is defined at 12 C.F.R. 225.2(s)),
and the Bank's rating pursuant to the Community Reinvestment Act of 1997 ("CRA")
is no less than "satisfactory." Neither the Company nor any of its Subsidiaries
has been informed that the Bank's status as "well capitalized," "well managed"
or "satisfactory" for CRA purposes will change within one year.
3.20 Derivative Instruments.
Any and all swaps, caps, floors, futures, forward contracts, option
agreements and other derivative financial instruments, contracts or
arrangements, whether entered into for the account of the Company or one of its
Subsidiaries or for the account of a customer of the Company or one of its
Subsidiaries, were entered into in the ordinary course of business and, to the
Company's best knowledge, in accordance with prudent business practice and
applicable laws, rules, regulations and policies of all applicable regulatory
agencies and with counterparties believed to be financially responsible at the
time. The Company and each of its Subsidiaries have duly performed in all
respects all of their obligations thereunder to the extent that such obligations
to perform have accrued, and, to the Company's best knowledge, there are no
breaches, violations or defaults or allegations or assertions of such by any
party thereunder, except as, individually or in the aggregate, otherwise are not
reasonably likely to have a Company Material Adverse Effect.
3.21 Investment Advisory Activities.
(a) Each of the Investment Companies (as defined below) (or the trust or
corporation of which it is a series) is duly organized and existing in good
standing under the laws of the jurisdiction under which it is organized. Each of
the Investment Companies (or the trust or corporation of which it is a series)
that is registered or required to be registered under the 1940 Act (each, a
"Company Fund") is governed by a board
A-16
<PAGE> 99
of trustees or directors (each a "Fund Board" and, collectively, the "Fund
Boards") consisting of at least 50% of trustees or directors who are not
"interested persons" (as defined in the 1940 Act) of the Company Funds or the
Company. The Fund Boards operate in all material respects in conformity with the
requirements and restrictions of the 1940 Act. As used herein, "Investment
Company" means any investment company within the meaning of the 1940 Act,
disregarding Section 3(c) thereof, that is sponsored, organized, advised,
managed or distributed by the Company or one of its Subsidiaries (including the
Company Funds). Each Company Fund is identified in Section 3.21 of the Company
Disclosure Schedule.
(b) Each of the Investment Companies is in compliance in all material
respects with all applicable United States federal, state and foreign laws,
rules and regulations of the SEC, the CFTC, the IRS, and any Self-Regulatory
Organization having jurisdiction over such Investment Company.
(c) Each Investment Company has been operated or managed in compliance with
its respective objectives, policies and restrictions, including those set forth
in the applicable prospectus and registration statement, if any, for that
Investment Company. The Company and its Subsidiaries have operated their
investment accounts in accordance with the investment objectives and guidelines
in effect for such investment accounts.
(d) None of the Company or any of its Subsidiaries or any "associated
person" (as defined in the Advisers Act or the Exchange Act) or any "affiliated
person" (as defined in the 1940 Act) of the Company or any of its Subsidiaries
is ineligible pursuant to Section 203 of the Advisers Act, Section 9(a) or 9(b)
of the 1940 Act or Section 15(b) of the Exchange Act to serve as a registered
investment adviser or broker-dealer or as an associated person of a registered
investment adviser or broker-dealer.
3.22 State Takeover Statutes and Shareholder Rights Plan.
No "fair price", "moratorium", "control share acquisition" or other form of
antitakeover statute or regulation is applicable to the Merger or the other
transactions contemplated hereby and by the Option Agreement and the Support
Agreement. The Company has taken all actions necessary such that, for all
purposes under the Rights Agreement, neither Parent nor Merger Sub nor any of
their affiliates shall be deemed an Acquiring Person (as defined in the Rights
Agreement), the Distribution Date (as defined in the Rights Agreement) shall not
be deemed to occur, and the rights issuable pursuant to the Rights Agreement
(the "Rights") will not separate from the Company Common Stock, as a result of
Parent's and Merger Sub's entering into this Agreement, the Option Agreement or
the Support Agreement or consummating the Merger and/or other transactions
contemplated hereby or thereby.
3.23 No Brokers.
The Company has not entered into any contract, arrangement or understanding
with any person or firm which may result in the obligation of the Company or
Parent to pay any finder's fees, brokerage or agent's commissions or other like
payments in connection with the negotiations leading to this Agreement, the
Option Agreement and the Support Agreement, or the consummation of the
transactions contemplated hereby and thereby, except that the Company has
retained Goldman, Sachs & Co. as its financial advisor, the arrangements of
which have been disclosed by the Company to Parent. Other than the foregoing
arrangements, the Company is not aware of any claim for payment of any finder's
fees, brokerage or agent's commissions or other like payments in connection with
the negotiations leading to this Agreement, the Option Agreement and the Support
Agreement, or the consummation of the transactions contemplated hereby and
thereby.
3.24 Opinion of Financial Advisor.
The Company has received the opinion of Goldman, Sachs & Co. to the effect
that, as of the date hereof, the consideration to be received in the Merger is
fair to the holders of Company Common Stock from a financial point of view.
A-17
<PAGE> 100
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth in the disclosure schedule delivered at or prior to the
execution hereof to the Company (the "Parent Disclosure Schedule") or in the
Parent Reports (as defined below) filed on or prior to the date hereof, Parent
and Merger Sub represent and warrant to the Company as of the date of this
Agreement as follows:
4.1 Existence; Good Standing; Corporate Authority; Compliance with Law.
Each of Parent and Merger Sub is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Parent is duly licensed or qualified to do business as a foreign
corporation and is in good standing under the laws of any other state of the
United States in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary,
except where the failure to be so qualified or to be in good standing is not
reasonably likely to have a Parent Material Adverse Effect (as defined below).
Parent has all requisite corporate power and authority to own, operate and lease
its properties and carry on its business as now conducted. Parent and Merger Sub
have obtained all licenses, permits and other authorizations and have taken all
actions required by applicable law or governmental regulations in connection
with their business as now conducted, except where the failure to obtain any
such item or to take any such action is not reasonably likely to have a Parent
Material Adverse Effect.
4.2 Authorization, Validity and Effect of Agreements.
Each of Parent and Merger Sub, respectively, has the requisite corporate
power and authority to execute and deliver this Agreement, the Support
Agreement, the Option Agreement and all other agreements and documents
contemplated hereby to which it is a party and perform its obligations hereunder
and thereunder. The consummation by Parent and Merger Sub, as applicable, of the
transactions contemplated hereby and by the Option Agreement and the Support
Agreement have been unanimously approved by the Board of Directors of Parent and
Merger Sub, as applicable, and duly authorized by all requisite corporate
action. This Agreement, the Support Agreement, and the Option Agreement
constitute, and all other agreements and documents contemplated hereby to which
Parent or Merger Sub, as applicable, is a party (when executed and delivered
pursuant hereto) shall constitute, the valid and legally binding obligations of
Parent and/or Merger Sub, as applicable, enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws of general applicability relating to creditors' rights and
general principles of equity.
4.3 Capitalization.
The authorized capital stock of Parent consists of 400,000,000 shares of
Parent Common Stock and 100,000,000 shares of Preferred Stock, par value $.01
per share ("Parent Preferred Stock"). As of July 31, 2000, there were 46,147,359
shares of Parent Common Stock and no shares of Parent Preferred Stock issued and
outstanding and 1,095,900 shares of Parent Common Stock held in Parent's
treasury. Since such date, no additional shares of capital stock of Parent have
been issued, except shares issued pursuant to the exercise of options
outstanding under the MONY 1998 Stock Incentive Plan (the "Parent 1998 Stock
Plan"). As of July 31, 2000, options to acquire 1,600,400 shares of Parent
Common Stock were outstanding. Since such date, no additional options have been
granted. Parent has no outstanding bonds, debentures, notes or other obligations
the holders of which have the right to vote (or which are convertible into or
exercisable for securities having the right to vote) with the stockholders of
Parent on any matter. All such issued and outstanding shares of Parent Common
Stock are, and all shares of Parent Common Stock to be issued pursuant to
Section 2.2(a) hereof, when issued in accordance with the terms hereof will be,
duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. Except as contemplated by this Agreement, there are not at
the date of this Agreement any existing options, warrants, calls, subscriptions,
convertible securities, or other rights, agreements or commitments, other than
pursuant to the Parent 1998 Stock Plan and the Rights Agreement between Parent
and EquiServe dated November 10, 1998 (the "Parent
A-18
<PAGE> 101
Rights Agreement"), which obligate Parent or any of its Subsidiaries to issue,
transfer or sell any shares of capital stock of Parent or any of its
Subsidiaries.
4.4 Merger Sub.
The authorized capital stock of Merger Sub consists of 2,500 shares of
common stock, par value $1.00 per share, all of which shares are issued and
outstanding and owned by Parent. Merger Sub has not engaged in any activities
other than in connection with its formation and the transactions contemplated by
this Agreement.
4.5 Compliance With Law; Governmental Approvals.
Neither the Parent nor any of its Subsidiaries is in violation of any order
of any court, governmental authority, arbitration board or tribunal, or
Self-Regulatory Organization to which the Parent or any of its Subsidiaries or
any of their respective properties or assets is subject, other than any
violations that are not reasonably likely to have a Parent Material Adverse
Effect. The Parent, each of its Subsidiaries, and each employee of each of them
holds, and has at all pertinent times held, all Permits necessary for the lawful
ownership and use of the respective properties and assets of the Parent and each
of its Subsidiaries and the conduct of their respective businesses under and
pursuant to every, and is in compliance with each, and are not in default under
any, and have taken all actions required by each, applicable law, ordinance,
governmental rule or regulation, or rule of each Self-Regulatory Organization to
which it is subject in connection with their business as now conducted, except
where the failure to obtain any such item or to take any such action is not
reasonably likely to have a Parent Material Adverse Effect. The Parent has
received no notice asserting any such violation. All such Permits are valid and
in good standing in all material respects and are not subject to any proceeding
for the suspension, modification or revocation thereof or proceedings related
thereto.
4.6 No Violation.
Neither the execution and delivery by Parent and Merger Sub, as applicable,
of this Agreement, the Support Agreement or the Option Agreement, nor the
consummation by Parent and Merger Sub, as applicable, of the transactions
contemplated hereby and thereby in accordance with the terms hereof and thereof,
will: (i) conflict with or result in a breach of any provisions of the
respective Amended and Restated Certificate of Incorporation of Parent or
Certificate of Incorporation of Merger Sub or Amended and Restated By-Laws of
Parent or By-Laws of Merger Sub; (ii) result in a breach or violation of, a
default under, or the triggering of any payment or other material obligations
pursuant to, or accelerate vesting under, the Parent 1998 Stock Plan, or any
grant or award thereunder; (iii) violate, conflict with, result in a breach of
any provision of, constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, result in the termination or
in a right of termination or cancellation of, accelerate the performance
required by, result in the triggering of any payment or other material
obligations pursuant to, result in the creation of any lien, security interest,
charge or encumbrance upon any of the material properties of Parent or Merger
Sub under, or result in being declared void, voidable, or without further
binding effect, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust or any material license, franchise, permit,
lease, contract, agreement or other instrument, commitment or obligation to
which Parent or Merger Sub is a party, or by which Parent or Merger Sub or any
of their respective properties is bound or affected, except for any of the
foregoing matters that are not reasonably likely to have a Parent Material
Adverse Effect; or (iv) other than the Regulatory Filings, require any consent,
approval or authorization of, or declaration, filing or registration with, any
domestic governmental or regulatory authority or self-regulatory organization,
other than consents, approvals, authorizations, declarations or filings or
registrations which, if not obtained or made, are not reasonably likely to have
a Parent Material Adverse Effect.
4.7 Investigations; Litigation.
Except as set forth in Section 4.7 of the Parent Disclosure Schedule or in
the Parent Reports and except in the ordinary course of its business, (a) no
material investigation or review by any governmental entity with respect to the
Parent or any of its Subsidiaries is pending (or, to the Parent's knowledge,
threatened) nor has any governmental entity indicated to the Parent an intention
to conduct the same; and (b) there are no actions, suits or proceedings pending
against the Parent or its Subsidiaries or, to the knowledge of the Parent,
A-19
<PAGE> 102
threatened against the Parent or its Subsidiaries, at law or in equity, or
before or by any federal, state, local or foreign commission, board, bureau,
agency or instrumentality. Neither the Parent nor any of its Subsidiaries is a
party to or is subject to any order, decree, agreement, memorandum of
understanding or similar arrangement with, or a commitment letter or similar
submission to, any regulatory agency or other governmental entity (including any
United States or foreign government; any state or other political subdivision
thereof; any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government; any Self-Regulatory
Organization and any court, tribunal or arbitrator(s) of competent jurisdiction)
charged with the supervision or regulation of broker-dealers, securities
underwriting or trading, stock exchanges, commodities exchanges, investment
companies, investment advisors or insurance agents and brokers or the
supervision or regulation of the Parent or any of its Subsidiaries or any of the
other businesses they conduct; and neither the Parent nor any of its
Subsidiaries has been notified in writing by or received any written
communication from any such regulatory agency or other governmental entity to
the effect that such regulatory agency or other governmental entity is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum of
understanding, commitment letter or similar submission. Neither the Parent nor
any of its affiliated persons, as defined in Section 2(a)(3) of the 1940 Act,
has been convicted within the past 10 years of any felony or misdemeanor
described in Section 9(a)(1) of the 1940 Act, or is, by reason of any
misconduct, permanently or temporarily enjoined from acting in the capacities,
or engaging in the activities, described in Section 9(a)(2) of the 1940 Act.
4.8 SEC Documents.
As of their respective dates, each registration statement, report, proxy
statement or information statement (as defined in Regulation 14C under the
Exchange Act) of Parent prepared by Parent since its initial public offering, in
the form (including exhibits and any amendments thereto) filed with the SEC,
(collectively, the "Parent Reports") (i) complied as to form in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act, and the rules and regulations thereunder and (ii) did 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 made therein, in the light
of the circumstances under which they were made, not misleading. Each of the
consolidated balance sheets included in or incorporated by reference into the
Parent Reports (including the related notes and schedules) fairly presents in
all material respects the consolidated financial position of Parent as of its
date, and each of the consolidated statements of income and comprehensive
income, changes in shareholders' equity and cash flows included in or
incorporated by reference into the Parent Reports (including, any related notes
and schedules) fairly presents in all material respects the results of
operations, retained earnings or cash flows, as the case may be, of Parent for
the periods set forth therein (subject, in the case of unaudited statements, to
normal year-end audit adjustments which would not be material in amount or
effect), in each case in accordance with GAAP consistently applied during the
periods involved, except as may be noted therein.
4.9 Absence of Certain Changes.
Since January 1, 2000, other than as set forth in the Parent Reports,
Parent has conducted its business only in the ordinary course of such business,
and there has not been any Parent Material Adverse Effect or any event which is
reasonably likely to result in a Parent Material Adverse Effect.
4.10 No Brokers.
Parent has not entered into any contract, arrangement or understanding with
any person or firm which may result in the obligation of the Company or Parent
to pay any finder's fee, brokerage or agent's commissions or other like payments
in connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby, except that Parent has
retained Donaldson, Lufkin & Jenrette Securities Corporation as its financial
advisor. Other than the foregoing arrangements, Parent is not aware of any claim
for payment of any finder's fees, brokerage or agent's commissions or other like
payments in connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby.
A-20
<PAGE> 103
4.11 Taxes.
Except as would not result in a Parent Material Adverse Effect, each of
Parent and its Subsidiaries has (i) duly and timely filed (including pursuant to
applicable extensions granted without penalty) all Tax Returns required to be
filed by it, and such Tax Returns are to the best knowledge of Parent true,
correct and complete, and (ii) paid in full or made adequate provision in the
financial statements of Parent (in accordance with GAAP) for all taxes related
to such Tax Returns. Except as would not result in a Parent Material Adverse
Effect, no deficiencies for any Taxes have been proposed, asserted or assessed
in writing against or with respect to Parent or any of its Subsidiaries, and, to
the best knowledge of Parent, there are no liens for Taxes upon the assets of
either Parent or its Subsidiaries except for statutory liens for current Taxes
not yet due or liens for Taxes that are being contested in good faith by
appropriate proceedings, for which reserves adequate in accordance with GAAP
have been provided. Parent is not aware of any fact or circumstance that could
reasonably be expected to prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
ARTICLE 5
COVENANTS
5.1 Alternative Proposals.
The Company, its affiliates and their respective officers, directors,
employees, representatives and agents shall immediately cease any existing
discussions or negotiations, if any, with any parties conducted heretofore with
respect to any merger, consolidation, share exchange, tender offer or other
business combination involving the Company or any of its Material Subsidiaries,
or the acquisition (including by way of lease or license) in any manner of 10%
or more of the voting stock or equity or 10% or more of the consolidated assets
of the Company or any of its Material Subsidiaries, other than as contemplated
by this Agreement (each, a "Transaction"). The Company may, directly or
indirectly, prior to the Company Stockholders Meeting (as defined below),
furnish non-confidential information and access, in each case only in response
to unsolicited requests therefor, to any corporation, partnership, person or
other entity or group, and may, prior to the Company Stockholders Meeting,
participate in discussions and negotiate with such entity or group concerning
any Transaction if such entity or group has submitted a written proposal to the
Company Board, prior to the Company Stockholders Meeting, relating to any such
Transaction (an "Alternative Proposal") and the Company Board by a majority vote
determines in its good faith judgment, after consultation as to legal matters
with outside legal counsel and after consultation as to financial matters with
an investment banking firm of national reputation, that the Alternative Proposal
is a Superior Proposal (as hereinafter defined) and that failing to take such
action would constitute a breach of the Company Board's fiduciary duty. The
Company Board shall provide a copy of any such written proposal to Parent
immediately after receipt thereof and thereafter keep Parent promptly advised of
any development with respect thereto. Except as set forth above, neither the
Company or any of its affiliates, nor any of its or their respective officers,
directors, employees, representatives or agents, shall, directly or indirectly,
encourage, solicit, participate in or initiate discussions or negotiations with,
or provide any information to, any corporation, partnership, person or other
entity or group (other than Parent and Merger Sub, any affiliate or associate of
Parent and Merger Sub or any designees of Parent and Merger Sub) concerning, or
enter into any agreement with respect to, any Transaction, provided, however,
that nothing herein shall prevent the Company Board from taking, and disclosing
to the Company's shareholders, a position contemplated by Rules 14d-9 and 14e-2
promulgated under the Exchange Act with regard to any tender offers; provided,
further, that the Company Board shall not recommend that the shareholders of the
Company tender their outstanding shares of Company Common Stock in connection
with any such tender offer or exchange offer unless the Company Board by a
majority vote determines in its good faith judgment, after consultation as to
legal matters with outside legal counsel and after consultation as to financial
matters with an investment banking firm of national reputation, that the tender
offer is a Superior Proposal and that failing to take such action would
constitute a breach of the Company Board's fiduciary duty under applicable laws.
Nothing in this Section 5.1 shall (x) permit the Company to terminate this
Agreement (except as specifically provided in Article 7 hereof), (y) permit the
Company to accept or enter into any
A-21
<PAGE> 104
agreement with respect to an Alternative Proposal during the term of this
Agreement (it being agreed that during the term of this Agreement, the Company
shall not enter into any agreement with any person that provides for, or in any
way facilitates, an Alternative Proposal), or (z) affect any other obligation of
the Company under this Agreement.
For purposes of this Agreement "Superior Proposal" means any Alternative
Proposal with respect to a Transaction which (a) is superior to the Merger from
a financial point of view to the stockholders of the Company, (b) faces no
material legal or other impediments to consummation, and (c) is fully financed.
In deciding whether an Alternative Proposal is a Superior Proposal, the Company
Board shall take into account, among other things, the tax effect on the
Company's stockholders of the Alternative Proposal and the form of consideration
contemplated by the Alternative Proposal.
5.2 Interim Operations.
Prior to the Effective Time, unless Parent has otherwise consented in
writing thereto, the Company:
(i) shall, and shall cause each of its Subsidiaries and each of the
Investment Companies to, conduct its operations according to their usual,
regular and ordinary course in substantially the same manner as heretofore
conducted;
(ii) shall use its reasonable best efforts, and shall cause each of
its Material Subsidiaries and each of the Investment Companies to use its
reasonable best efforts, to preserve intact their business organizations
and goodwill, keep available the services of their respective officers and
employees and maintain satisfactory relationships with those persons having
business relationships with them;
(iii) shall not, and shall cause its Material Subsidiaries not to,
amend their respective Certificates of Incorporation or Bylaws or
comparable governing instruments;
(iv) shall, and shall cause each of the Investment Companies to,
promptly notify Parent of (x) any Company Material Adverse Effect, (y) any
litigation matter relating to an amount in excess of $500,000, governmental
complaints, investigations or hearings (or communications indicating that
the same may be contemplated), or (z) any material breach of any
representation or warranty contained herein;
(v) shall, upon receiving any written notice from any Taxing authority
proposing any adjustment to any Tax relating to the Company or any of its
Subsidiaries, give prompt written notice thereof to Parent, which notice
shall describe in detail each proposed adjustment;
(vi) shall promptly deliver to Parent true and correct copies of any
report, statement or schedule filed with the SEC subsequent to the date of
this Agreement;
(vii) shall not, and shall not permit any of its Subsidiaries to,
authorize, propose or announce an intention to authorize or propose, or
enter into an agreement with respect to, any merger, consolidation or
business combination (other than the Merger), any acquisition of assets or
securities other than in the ordinary course of business, any disposition
of assets or securities other than in the ordinary course of business or
any release or relinquishment of any material contract rights other than in
the ordinary course of business;
(viii) shall not, and shall not permit any of its Subsidiaries to,
issue any shares of its capital stock or securities convertible into or
exchangeable or exercisable for shares of its capital stock, except upon
exercise of options outstanding on the date of this Agreement under the
Company Stock Option Plans or granted pursuant to the terms of the Stock
Option Agreement to purchase shares of Company Common Stock, or effect any
stock split, reverse stock split, stock dividend, subdivision,
reclassification, combination, exchange, or other similar transaction with
respect to any shares of its capital stock or other ownership interests, or
otherwise change its capitalization;
(ix) shall not, and shall not permit any of its Subsidiaries to,
grant, confer or award any options, warrants, conversion rights or other
rights, not existing on the date hereof, to acquire any shares of its
capital stock or other securities of the Company or its Subsidiaries;
A-22
<PAGE> 105
(x) shall not, and shall not permit any of its Subsidiaries to, take
or fail to take any actions which would, or would be reasonably likely to,
prevent the Merger from qualifying as a reorganization with the meaning of
Section 368(a) of the Code;
(xi) except pursuant to (i) applicable law, (ii) the terms of
pre-existing contractual arrangements or policies or (iii) the ordinary
course of business consistent with past practice, shall not, and shall not
permit any of its Subsidiaries to, amend the terms of any Company Plan,
including, without limitation, any employment, severance or similar
agreements or arrangements in existence on the date hereof, or adopt any
new employee compensation or benefit plans, programs or arrangements or any
employment, severance or similar agreements or arrangements, or change in
any respect any vesting schedule with respect to any Company Plan or grant
or award thereunder, or grant any salary increases to any employee of the
Company or any Subsidiary;
(xii) except in the ordinary course consistent with past practice,
shall not, and shall not permit any of its Subsidiaries to, (x) incur,
create, assume or otherwise become liable for borrowed money or assume,
guarantee, endorse or otherwise become responsible or liable for the
obligations of any other individual, corporation or other entity, (y) make
any loans or advances to any other person or (z) subject any of its
property or assets, or permit any of its property or assets to be
subjected, to any lien, claim or encumbrance of any kind;
(xiii) shall not, and shall not permit any of its Subsidiaries to, (x)
change any practice with respect to Taxes, (y) make, revoke or change any
election with respect to Taxes or (z) settle or compromise any Tax
liability;
(xiv) shall not (y) declare, set aside or pay any dividend or make any
other distribution or payment with respect to any shares of its capital
stock (other than regular quarterly cash dividends payable on Company
Common Stock in an amount not to exceed $0.06 per share) or other ownership
interests or (z) redeem, purchase or otherwise acquire any shares of its
capital stock, or make any commitment for any such action;
(xv) shall not, and shall not permit any of its Subsidiaries to,
agree, in writing or otherwise, to take any of the foregoing actions or
take any action which would make any representation or warranty in Article
3 hereof untrue or incorrect.
5.3 Meeting of Stockholders.
The Company will take all action necessary in accordance with applicable
law and its Restated Certificate of Incorporation and Restated Bylaws to convene
a meeting of its stockholders (the "Company Stockholders Meeting,") as promptly
as practicable, and in any case not more than 45 days following the declaration
of the effectiveness of the Form S-4 (as defined in Section 5.7), to consider
and vote upon the approval of this Agreement and the transactions contemplated
hereby. The Company Board shall recommend such approval and shall take all
lawful action to solicit such approval, including, without limitation, timely
mailing the Proxy Statement/Prospectus (as defined in Section 5.7); provided,
however, that such recommendation or solicitation shall not be required if and
to the extent that the Company Board determines after the date hereof, in its
good faith judgment, after consultation as to legal matters with outside legal
counsel and after consultation as to financial matters with an investment
banking firm of national reputation, that the making of such recommendation or
solicitation would involve a breach of its fiduciary duties to its stockholders
imposed by law.
5.4 Filings; Other Actions.
Subject to the terms and conditions herein provided, the Company and Parent
shall: (a) promptly make their respective filings and thereafter make any other
required submissions under the HSR Act, the Home Owners' Loan Act, the
Connecticut General Statute and the rules of the NASD and to the Federal Trade
Commission, the OTS, the Commissioner of Banking for the State of Connecticut
and the NASD with respect to the Merger and the transactions contemplated hereby
and by the Option Agreement and Support Agreement; (b) use all reasonable best
efforts to cooperate with one another (i) in determining which filings
A-23
<PAGE> 106
are required to be made prior to the Effective Time with, and which consents,
approvals, permits or authorizations are required to be obtained prior to the
Effective Time from, governmental or regulatory authorities of the United
States, the several states and foreign jurisdictions and self-regulatory
organizations in connection with the execution and delivery of this Agreement,
the Option Agreement and the Support Agreement and the consummation of the
transactions contemplated hereby and thereby and (ii) in timely making all such
filings and timely seeking all such consents, approvals, permits or
authorizations; and (c) use all reasonable best efforts to take, or cause to be
taken, all other actions and do, or cause to be done, all other things
necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement, the Option Agreement and the
Support Agreement as promptly as practicable.
5.5 Inspection of Records.
From the date hereof to the Effective Time, Company and Parent shall (i)
allow all designated officers, attorneys, accountants and other representatives
of their respective companies reasonable access at all reasonable times to the
offices, records and files, correspondence, audits and properties, as well as to
all information relating to commitments, contracts, titles and financial
position, or otherwise pertaining to the business and affairs, of the other
party and their Subsidiaries, (ii) furnish to such other party and such other
party's counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information as such
persons may reasonably request and (iii) instruct employees, counsel and
financial advisors to cooperate with such party in such party's investigation of
the business of the other party and its Subsidiaries.
5.6 Publicity.
The initial press release relating to this Agreement shall be a joint press
release and thereafter the Company and Parent shall, subject to their respective
legal obligations (including requirements of stock exchanges and other similar
regulatory bodies), consult with each other, and use reasonable best efforts to
agree upon the text of any press release, before issuing any such press release
or otherwise making public statements with respect to the transactions
contemplated hereby and by the Option Agreement and Support Agreement and in
making any filing with any federal or state governmental or regulatory agency or
with any national securities exchange with respect thereto.
5.7 Registration Statement.
Parent and the Company shall cooperate and promptly prepare and Parent
shall file with the SEC as soon as practicable a Registration Statement on Form
S-4 (the "Form S-4") under the Securities Act, with respect to the Parent Common
Stock issuable in the Merger, which Registration Statement shall contain the
proxy statement with respect to the meeting of the stockholders of the Company
in connection with the Merger (the "Proxy Statement/Prospectus"). Parent and the
Company agree that such filing of the Form S-4 shall be made no later than 20
business days from the date hereof. The respective parties will cause the Proxy
Statement/Prospectus and the Form S-4 to comply as to form in all material
respects with the applicable provisions of the Securities Act, the Exchange Act
and the rules and regulations thereunder. Parent shall use reasonable best
efforts, and Company will cooperate with Parent, to have the Form S-4 declared
effective by the SEC as promptly as practicable. Parent shall use reasonable
best efforts to obtain, prior to the effective date of the Form S-4, all
necessary state securities law or "Blue Sky" permits or approvals required to
carry out the transactions contemplated by this Agreement. The information
supplied by the Company for inclusion or incorporation by reference in the Proxy
Statement/Prospectus and the Form S-4 shall not (i) at the time the Form S-4 is
declared effective, (ii) at the time the Proxy Statement/Prospectus (or any
amendment thereof or supplement thereto) is first mailed to holders of Company
Common Stock, (iii) at the time of the Company Stockholders' Meeting and (iv) at
the Effective Time, 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 the light of the circumstances under which they are made,
not misleading. The information supplied by Parent for inclusion or
incorporation by reference in the Proxy Statement/Prospectus and the Form S-4
shall not (i) at the time the Form S-4 is declared effective, (ii) at the time
the Proxy Statement/Prospectus (or any amendment thereof or supplement thereto)
is first mailed to holders of Company Common Stock, (iii) at the time of the
Company Stockholders' Meeting and (iv) at the Effective Time, contain any untrue
statement
A-24
<PAGE> 107
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading. No amendment or
supplement to the Proxy Statement/Prospectus will be made by the Company without
the approval of Parent. Parent will advise the Company, promptly after it
receives notice thereof, of the time when the Form S-4 has become effective or
any supplement or amendment has been filed, the issuance of any stop order, the
suspension of the qualification of the Parent Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or any
request by the SEC for amendment of the Proxy Statement/ Prospectus or the Form
S-4 or comments thereon and responses thereto or requests by the SEC for
additional information.
5.8 Listing Application.
Parent shall promptly prepare and submit to the NYSE a listing application
covering the shares of Parent Common Stock issuable in the Merger, and shall use
all reasonable best efforts to obtain, prior to the Effective Time, approval for
the listing of such Parent Common Stock, subject to official notice of issuance.
5.9 Affiliate Letters.
Not less than 30 days prior to the Closing Date, the Company shall deliver
to Parent a list of names and addresses of those persons who were, at the record
date for the Company Stockholders Meeting, "affiliates" (each such person, an
"Affiliate") of the Company within the meaning of Rule 145 of the rules and
regulations promulgated under the Securities Act. The Company shall provide
Parent such information and documents as Parent shall reasonably request for
purposes of reviewing such list. The Company shall deliver or cause to be
delivered to Parent, prior to the Closing Date, from each of the Affiliates of
the Company identified in the foregoing list, an Affiliate Letter in the form
attached hereto as Exhibit A. Parent shall be entitled to place legends as
specified in such Affiliate Letters on the certificates evidencing any Parent
Common Stock to be received by such Affiliates pursuant to the terms of this
Agreement, and to issue appropriate stop transfer instructions to the transfer
agent for the Parent Common Stock, consistent with the terms of such Affiliate
Letters.
5.10 Expenses.
Whether or not the Merger is consummated, all costs and expenses incurred
in connection with this Agreement, the Option Agreement and the Support
Agreement and the transactions contemplated hereby and thereby shall be paid by
the party incurring such expenses except as expressly provided herein and except
that the filing fee in connection with the filing of the Form S-4 or Proxy
Statement/Prospectus with the SEC and the expenses incurred in connection with
printing and mailing the Form S-4 and the Proxy Statement/ Prospectus shall be
paid one-half by Parent and one-half by the Company.
5.11 Directors' and Officers' Indemnification and Insurance.
(a) From and after the Effective Time, in the event of any threatened or
actual claim, action, suit, proceeding or investigation, whether civil, criminal
or administrative, including, without limitation, any such claim, action, suit,
proceeding or investigation in which any person who is now, or has been at any
time prior to the date of this Agreement, or who becomes prior to the Effective
Time, a director or officer of the Company or any of its Subsidiaries (the
"Indemnified Parties") is, or is threatened to be, made a party based in whole
or in part on, or arising in whole or in part out of, or pertaining to (i) the
fact that he is or was a director or officer of the Company, any of its
Subsidiaries or any of their respective predecessors or was prior to the
Effective Time serving at the request of any such party as a director, officer,
fiduciary or agent of another corporation, partnership, trust or other
enterprise or (ii) this Agreement, or any of the transactions contemplated
hereby and all actions taken by an Indemnified Party in connection herewith,
whether in any case asserted or arising before or after the Effective Time, the
parties hereto agree to cooperate in connection with defending against and
responding to such proceedings. It is understood and agreed that after the
Effective Time, Parent shall indemnify and hold harmless, as and to the fullest
extent permitted by the corporate governance documents of the Company or its
Subsidiaries as of the date hereof and by law, each such Indemnified Party
against any losses, claims, damages, liabilities, costs, expenses (including
reasonable attorneys' fees and expenses in advance of the final disposition of
any claim, suit, proceeding or investigation to each Indemnified Parry to the
A-25
<PAGE> 108
fullest extent permitted by law upon receipt of an undertaking, to the extent
required by the DGCL, from such Indemnified Party to repay such advanced
expenses if it is finally and unappealably determined that such Indemnified
Party was not entitled to indemnification hereunder), judgments, fines and
amounts paid in settlement in connection with any such threatened or actual
claim, action, suit, proceeding or investigation, and in the event of any such
threatened or actual claim, action, suit, proceeding or investigation (whether
asserted or arising before or after the Effective Time) (collectively,
"Claims"), the Indemnified Parties may retain counsel reasonably satisfactory to
them after consultation with Parent; provided, however, that except as otherwise
specified by the corporate governance documents of the Company or its
Subsidiaries, (1) Parent shall have the right to assume the defense thereof by
retaining counsel reasonably satisfactory to the Indemnified Parties and upon
such assumption Parent shall not be liable to any Indemnified Party for any
legal expenses of other counsel or any other expenses subsequently incurred by
any Indemnified Party in connection with the defense thereof, except that if
Parent elects not to assume such defense or counsel for the Indemnified Parties
reasonably advises the Indemnified Parties that there are or may be (whether or
not any have yet actually arisen) issues which raise conflicts of interest
between Parent and the Indemnified Parties, the Indemnified Parties may retain
counsel reasonably satisfactory to them, and Parent shall pay the reasonable
fees and expenses of such counsel for the Indemnified Parties, (2) Parent shall
be obligated pursuant to this paragraph to pay for only one firm of counsel for
all Indemnified Parties with respect to any Claim or series of related Claims,
(3) Parent shall not be liable for any settlement effected without its prior
written consent (which consent shall not be unreasonably withheld) and (4)
Parent shall have no obligation hereunder to any Indemnified Party when and if a
court of competent jurisdiction shall ultimately determine, and such
determination shall have become final and nonappealable, that indemnification of
such Indemnified Party in the manner contemplated hereby is prohibited by the
corporate governance documents of the Company or its Subsidiaries or applicable
law. Any Indemnified Party wishing to claim indemnification under this Section
5.11, upon learning of any such claim, action, suit, proceeding or
investigation, shall notify Parent thereof in writing, provided that the failure
to so notify shall not affect the obligations of Parent under this Section 5.11
except (and only) to the extent such failure to notify materially prejudices the
Surviving Corporation.
(b) Without limiting any of the obligations under paragraph (a) of this
Section 5.11, Parent agrees that all rights to indemnification and all
limitations of liability existing in favor of the Indemnified Parties as
provided in the Company's Certificate of Incorporation or Bylaws or in the
similar governing documents of any of the Company's Subsidiaries as in effect as
of the date of this Agreement with respect to matters occurring on or prior to
the Effective Time shall survive the Merger and shall continue in full force and
effect for six (6) years thereafter, without any amendment thereto; provided,
however, that nothing contained in this Section 5.11(b) shall be deemed to
preclude the liquidation, consolidation or merger of the Company or any
Subsidiary thereof, in which case all of such rights to indemnification and
limitations on liability shall be deemed to so survive and continue
notwithstanding any such liquidation, consolidation or merger and shall
constitute rights which may be asserted against Parent or its successor. Nothing
contained in this Section 5.11(b) shall be deemed to preclude any rights to
indemnification or limitations on liability provided in Parent's Articles of
Incorporation or Bylaws or the similar governing documents of any of Parent's
Subsidiaries with respect to matters occurring subsequent to the Effective Time
to the extent that the provisions establishing such rights or limitations are
not otherwise amended to the contrary.
(c) Parent shall use its reasonable best efforts to cause the persons
serving as officers and directors of the Company immediately prior to the
Effective Time to be covered for a period of six (6) years from the Closing Date
by the directors' and officers' liability insurance policy maintained by the
Company (provided that Parent may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions which are not less
advantageous to such directors and officers of the Company than the terms and
conditions of such existing policy and provided further that in no event will
Parent be required to expend in any one year an amount in excess of 200% of the
annual premiums currently paid by the Company for such insurance (the "Insurance
Amount"), and further provided, that if Parent is unable to maintain or obtain
the insurance called for by this Section 5.11(c) as a result of the preceding
proviso, Parent shall use its reasonable best efforts to obtain as much
comparable insurance as available for the Insurance Amount with respect to acts
or omissions occurring prior to the Effective Time which were committed by such
officers and directors in
A-26
<PAGE> 109
their capacity as such. The provisions of this Section 5.11 are intended to be
for the benefit of, and shall be enforceable by, each Indemnified Party and his
or her heirs and representatives.
5.12 Additional Agreements.
In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement (including,
without limitation, any merger between a Subsidiary of Parent and a Subsidiary
of the Company) or to vest the Surviving Company with full title to all
properties, assets, rights, approvals, immunities and franchises of any of the
parties to the Merger, the proper officers and directors of each party to this
Agreement and their respective Subsidiaries shall take all such necessary action
as may be reasonably requested by Parent.
5.13 Shareholder Rights Plan and Takeover Statutes.
The Company shall take all action necessary to render the Rights Agreement
and the Rights inapplicable to the transactions contemplated hereby or by the
Option Agreement or Support Agreement. The Company shall not amend, modify or
supplement the Rights Agreement or the Rights without the prior written consent
of Parent. If any "fair price," "moratorium," "control share acquisition" or
other form of antitakeover statute or regulation, is or shall become applicable
to the transactions contemplated hereby or by the Option Agreement or the
Support Agreement, the Company and the members of the Company Board shall grant
such approvals and take such actions as are necessary so that the transactions
contemplated hereby and by the Option Agreement and by the Support Agreement may
be consummated as promptly as practicable on the terms contemplated hereby and
by the Option Agreement and by the Support Agreement and otherwise act to
eliminate or minimize the effects of such statute or regulation on the
transactions contemplated hereby and by the Option Agreement and by the Support
Agreement. If requested by Parent at least three business days prior to the
Effective Time, the Company Board shall take all necessary action to terminate
or redeem all of the outstanding Rights and to terminate the Rights Agreement,
effective immediately prior to the Effective Time.
5.14 Conveyance Taxes.
The Company and Parent shall cooperate in the preparation, execution and
filing of all returns, questionnaires, applications or other documents regarding
any real property transfer or gains, sales, use, transfer, value added, stock
transfer and stamp Taxes, any transfer, recording, registration and other fees
or any similar Taxes which become payable in connection with the transactions
contemplated by this Agreement, the Option Agreement and the Support Agreement
that are required or permitted to be filed on or before the Effective Time.
5.15 Certain Tax Matters.
(a) From the date hereof until the Effective Time, (i) the Company and each
of its Subsidiaries and the Investment Companies will prepare and file, or will
cause to be prepared and filed, in the manner required by applicable law, all
Tax Returns that are required (with extensions) to be filed, (ii) the Company
and each of its Subsidiaries and the Investment Companies will timely pay all
Taxes shown as due and payable, or required to be shown as due and payable, on
such Tax Returns that are so filed, (iii) the Company and each of its
Subsidiaries and the Investment Companies will make provision for all Taxes
payable by the Company and/or any such Subsidiary and/or Investment Company for
which no Tax Return is due prior to the Effective Time and (iv) the Company will
promptly notify Parent in writing of any action, suit, proceeding, claim or
audit pending against or with respect to the Company or any Subsidiary thereof
in respect of any Tax.
(b) The Company agrees that it will, and will cause its Subsidiaries and
the Investment Companies to, make available all such information, employees and
records of or relating to the Company and each of its Subsidiaries and the
Investment Companies as Parent may reasonably request with respect to matters
relating to Taxes (including, without limitation, the right to make copies of
such information and records) and will cooperate with respect to all matters
relating to Taxes (including, without limitation, the filing of Tax Returns, the
filing of amended Tax Returns, audits, and proceedings).
A-27
<PAGE> 110
(c) It is understood and agreed that Parent and the Company will request
that (i) Norman Sinrich, Esq., tax counsel to Parent (or such other tax counsel
to Parent as shall be reasonably acceptable to the Company), and (ii) Day, Berry
& Howard LLP and Wachtell, Lipton, Rosen & Katz, legal counsel to the Company,
issue to their respective clients for inclusion as exhibits to the Form S-4
opinions to the effect that the Merger will be treated for U.S. federal income
tax purposes as a reorganization within the meaning of Section 368(a) of the
Code and respecting related matters (each such opinion, an "Exhibit Opinion"
and, collectively, the "Exhibit Opinions"). In rendering such Exhibit Opinions,
such legal counsel may require and reasonably rely upon reasonably requested
representations contained in certificates of the Company, Parent and Merger Sub
(the "Tax Certificates").
5.16 Company Satisfaction of the Conditions of Section 15 of the 1940 Act.
(a) The Company shall use, and shall cause its Subsidiary Boston Advisors
("BA") to use, its best efforts to cause the boards of trustees of the Company
Funds to approve, and to solicit their respective shareholders as promptly as
practicable with regard to the approval of, new investment advisory agreements
with BA acting as investment adviser for such funds, to be effective on or as
promptly as practicable after the Effective Time, pursuant to the provisions of
Section 15 of the 1940 Act, and consistent with all requirements of the 1940 Act
applicable thereto, provided that such agreements are identical in all material
respects to the existing agreements other than the term of the agreement. The
Company and its Subsidiaries also shall take any similar action required under
the 1940 Act to continue any underwriting or distribution agreements of the
Company Funds. Parent shall have a reasonable opportunity to review and provide
comments on any proxy or other materials that are proposed to be used by the
Company and its Subsidiaries to solicit the approvals contemplated by this
Section 5.16(a), prior to the use of such materials.
(b) The Company shall use, and shall cause BA to use, its best efforts to
ensure the satisfaction of the conditions set forth in Section 15(f) of the 1940
Act with respect to each of the Company Funds.
5.17 Advisory Contract Consents.
As promptly as practicable, the Company and its Subsidiaries shall inform,
in compliance with applicable law, its investment advisory services clients
(other than those covered by the foregoing Section 5.16), custodial services
clients and mutual fund distribution services clients of the transactions
contemplated by this Agreement and shall request such clients' written consents
to the deemed assignment of their investment advisory services, custodial
services or mutual fund distribution services agreements, as the case may be,
resulting from the consummation of the transactions contemplated by this
Agreement and use their best efforts to obtain such consents or, in the case of
agreements which are not in writing or which either prohibit assignment or a
change in control or state by their terms that they terminate upon assignment or
a change in control, new agreements (and any required director and investor
approvals) with the Company or the appropriate Subsidiary, effective upon
Closing.
5.18 Retention Plan.
Parent shall cause the Surviving Corporation to honor, effective as of the
Effective Time, the Advest 2000 Retention Plan on terms consistent with those
identified in Exhibit B hereto and the Advest 2000 Management Incentive Plan on
terms consistent with those identified in Exhibit C hereto. The Company shall
keep Parent informed in writing on a timely basis (which shall be not less
frequently than bi-weekly) as to the number of producers who elect to
participate in the Advest 2000 Retention Plan. The Company shall use
commercially reasonable efforts to cause its producers to become participants in
the Advest 2000 Retention Plan.
5.19 Dividends.
The Company shall coordinate with Parent the declaration, setting of record
dates and payment dates of dividends on shares of Company Common Stock so that
holders of shares of Company Common Stock do not receive dividends on both
shares of Company Common Stock and Parent Common Stock received in the Merger in
respect of any calendar quarter (taking into account that Parent declares and
pays dividends on the Parent Common Stock annually).
A-28
<PAGE> 111
5.20 Employee Benefits.
For at least one year following the Effective Time, the Parent shall, or
shall cause its Subsidiaries to, provide the employees of the Company who are
employed by the Parent or any of its Subsidiaries immediately after the
Effective Time ("Company Employees") (i) substantially the same base salary and
wages on substantially the same terms and conditions as those in effect
immediately prior to the Effective Time, and (ii) employee benefits that are no
less favorable in the aggregate to the Company Plans provided to Company
Employees immediately prior to the Effective Time. Following the Effective Time,
the Parent agrees that the Parent shall, or shall cause its Subsidiaries to, (i)
recognize all Company Employees' service with the Company for the purposes of
eligibility, participation, level of benefits and vesting of benefits (but not
for benefit accrual under defined benefit pension plans) under any employee
benefit plans of the Parent or its Subsidiaries providing benefits to Company
Employees after the Effective Date (the "New Plans") to the extent such service
would have been recognized under the applicable Company Plans; provided, that no
such credited service shall result in a duplication of benefits.
In addition, and without limiting the generality of the foregoing: (i) each
Company Employee shall be immediately eligible to participate, without any
waiting time, in any and all New Plans to the extent coverage under such New
Plan replaces coverage under comparable Company Plans in which such Company
Employee participated immediately before the Effective Time (such plans,
collectively, the "Old Plans") and to the extent such coverage would have been
recognized under the applicable Old Plan; and (ii) for purposes of each New Plan
providing medical, dental, pharmaceutical and/or vision benefits to any Company
Employee, Parent shall cause all pre-existing condition exclusions and actively
at work requirements of such New Plan to be waived for such employee and his or
her covered dependents to the extent such exclusion or requirement would not
have applied under the applicable Old Plan, and Parent shall cause any eligible
expenses incurred by such employee and his or her covered dependents during the
portion of the plan year of the Old Plan ending on the date such employee's
participation in the corresponding New Plan begins to be taken into account
under such New Plan for purposes of satisfying all deductible, coinsurance and
maximum out of pocket requirements applicable to such employee and his or her
covered dependents for the applicable plan year as if such amounts had been paid
in accordance with such New Plan.
5.21 Section 16 Matters.
Prior to the Effective Date, Parent and the Company shall take all such
steps as may be required and permitted to cause the transactions contemplated by
this Agreement, including any dispositions of shares of Company Common Stock or
acquisitions of shares of Parent Common Stock (including derivative securities
with respect to shares of Company Common Stock or Parent Common Stock) by each
individual who is or will be subject to the reporting requirements of Section
16(a) of the Exchange Act with respect to the Company or the Parent to be exempt
under Rule 16b-3 promulgated under the Exchange Act.
5.22 No Fundamental Parent Changes.
Except as expressly contemplated or permitted by this Agreement, or as
required by applicable law, rule or regulation, during the period from the date
of this Agreement to the Effective Time, Parent shall not, without the prior
written consent of the Company (which consent shall not be unreasonably
withheld, delayed or conditioned), (i) amend its articles of incorporation or
bylaws in a manner that would materially adversely affect the economic benefits
of the Merger to the holders of the Company Common Stock, (ii) take any action
that is intended or may reasonably be expected to result in any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect at any time prior to the Effective Time, or in
any of the conditions to the Merger set forth in Section 6.1 or 6.2 not being
satisfied in any material respect or in a material violation of any provision of
this Agreement, except, in every case, as may be required by applicable law, or
(iii) agree to, or make any commitment to, take any of the actions prohibited by
this Section 5.23.
A-29
<PAGE> 112
ARTICLE 6
CONDITIONS
6.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) This Agreement and the transactions contemplated hereby shall have
been approved by the holders of the issued and outstanding shares of
capital stock of the Company in accordance with the DGCL and Company's
Certificate of Incorporation.
(b) The waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated.
(c) None of the parties hereto shall be subject to any order or
injunction of a court of competent jurisdiction in the United States which
prohibits the consummation of the transactions contemplated by this
Agreement.
In the event any such order or injunction shall have been issued, each
party agrees to use all reasonable best efforts to have any such injunction
lifted.
(d) The Form S-4 shall have become effective and shall be effective at
the Effective Time, and no stop order suspending effectiveness of the Form
S-4 shall have been issued, no action, suit, proceeding, or investigation
by the SEC to suspend the effectiveness thereof shall have been initiated
and be continuing, and all material approvals under state securities laws
relating to the issuance or trading of the Parent Common Stock to be issued
to the Company stockholders in connection with the Merger shall have been
received.
(e) The Parent Common Stock to be issued to the Company stockholders
in connection with the Merger shall have been approved for listing on the
NYSE, subject only to official notice of issuance.
(f) All consents, authorizations, orders and approvals of (or filings
or registrations with) any governmental commission or other regulatory body
or self-regulatory organization required pursuant to the HSR Act, the Home
Owners' Loan Act, the Connecticut General Statute and the rules of the NASD
shall have been obtained or made, and shall not contain any terms that, in
the reasonable good faith judgment of Parent, is unreasonably burdensome to
Parent.
6.2 Conditions to Obligation of the Company to Effect the Merger.
The obligation of the Company to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) Parent shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior
to the Closing Date, the representations and warranties of Parent and
Merger Sub contained in this Agreement, the Parent Disclosure Schedule and
documents delivered at Closing shall be true and correct as of the Closing
Date, except that those representations and warranties which address
matters only as of a particular date shall have been true and correct as of
such date; provided, however, that for purposes of this paragraph, such
representations and warranties shall be deemed to be true and correct
unless the failure or failures of such representations and warranties to be
so true and correct, either individually or in the aggregate, and without
giving effect to any qualification as to materiality is reasonably likely
to have a Parent Material Adverse Effect, and the Company shall have
received a certificate of the President or a Vice President of Parent,
dated the Closing Date, certifying to such effect.
(b) The Company shall have received from its legal counsel, Day, Berry
& Howard LLP and Wachtell, Lipton, Rosen & Katz, the Exhibit Opinion
rendered by such legal counsel pursuant to Section 5.15(c) and reconfirmed
as of the Effective Time. In reconfirming its Exhibit Opinion as of the
Effective Time, such counsel may reasonably rely upon the Tax Certificates
(updated as necessary).
A-30
<PAGE> 113
6.3 Conditions to Obligation of Parent and Merger Sub to Effect the Merger.
The obligations of Parent and Merger Sub to effect the Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) (i) The Company shall have performed in all material respects its
agreements contained in this Agreement and the Option Agreement and the
Stockholders (as defined in the Support Agreement) shall have performed in
all material respects their agreements contained in the Support Agreement,
in each case required to be performed on or prior to the Closing Date, (ii)
the representations and warranties of the Company contained in this
Agreement and the Option Agreement, the Company Disclosure Schedule and
documents delivered at closing, and the representations and warranties of
the Stockholders contained in the Support Agreement, shall be true and
correct as of the Closing Date, except that those representations and
warranties which address matters only as of a particular date shall have
been true and correct as of such date; provided, however, that for purposes
of this paragraph, such representations and warranties shall be deemed to
be true and correct unless the failure or failures of such representations
and warranties to be so true and correct, either individually or in the
aggregate, and without giving effect to any qualification as to materiality
is reasonably likely to have a Company Material Adverse Effect, and (iii)
Parent shall have received a certificate of the President or a Vice
President of the Company, dated the Closing Date, certifying to such effect
with respect to the Company.
(b) Parent shall have received from its tax counsel, Norman Sinrich,
Esq. (or such other tax counsel to Parent as shall be reasonably acceptable
to the Company), the Exhibit Opinion rendered by such legal counsel
pursuant to Section 5.15(c) and reconfirmed as of the Effective Time. In
reconfirming its Exhibit Opinion as of the Effective Time, such legal
counsel may reasonably rely upon the Tax Certificates (updated as
necessary).
(c) Other than due to the death or disability of the employee party
thereto, the employment and/or change of control agreements between each of
Messrs. Grant W. Kurtz and Daniel Mullane, and at least three (3) of
Messrs. Harry H. Branning, John C. Giesea, George A. Boujoukos, Martin M.
Lilienthal, Lee G. Kuckro, and Allen G. Botwinick, and The MONY Life
Insurance Company dated as of August 23, 2000 shall be unamended and in
full force and effect, and each employee shall be performing in all
material respects his obligations thereunder (or, in the case of Mr.
Boujoukos, he shall be employed by the Company).
(d) From the date of this Agreement through the Effective Time, there
shall not have occurred a Company Material Adverse Effect.
(e) At the Effective Time, the Company and each of its Subsidiaries
shall meet (i) the criteria set forth in Section 1467a of the Home Owners'
Loan Act as in effect as of the Effective Time and (ii) any other criteria
of the OTS necessary for Parent to qualify as a "Savings and Loan Holding
Company" as that term is used in Section 1467a(a)(1)(D), and all consents,
authorizations, orders and approvals of (or filings or registrations with)
the OTS necessary for Parent to qualify as a Savings and Loan Holding
Company shall have been obtained or made, and any requisite waiting periods
imposed in respect thereof shall have expired and shall not have been
contested by any federal or state governmental authority.
(f) No more than 5% of the Company Common Stock outstanding at the
Effective Time (excluding shares owned by Parent or any of Parent's
wholly-owned subsidiaries) shall be Dissenting Shares.
A-31
<PAGE> 114
ARTICLE 7
TERMINATION
7.1 Termination By Mutual Consent.
This Agreement may be terminated and the Merger may be abandoned at any
time prior to the Effective Time, before or after the approval of this Agreement
by the stockholders of the Company, by the mutual consent of Parent and the
Company.
7.2 Termination By Either Parent or the Company.
This Agreement may be terminated and the Merger may be abandoned at any
time prior to the Effective Time by action of the Board of Directors of either
Parent or the Company if (a) the Merger shall not have been consummated by
February 28, 2001, (b) the approval of the Company's stockholders required by
Section 6.1(a) shall not have been obtained at a meeting duly convened therefor
or at any adjournment thereof, or (c) a United States federal, state, local or
foreign court of competent jurisdiction or United States federal or state, local
or foreign governmental, regulatory or administrative agency or commission shall
have issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have become
final and nonappealable; provided, that the party seeking to terminate this
Agreement pursuant to this clause (c) shall have used all reasonable best
efforts to remove such injunction, order or decree; and provided, in the case of
a termination pursuant to clause (a) above, that the terminating party shall not
have breached in any material respect its obligations under this Agreement in
any manner that shall have proximately contributed to the failure to consummate
the Merger by February 28, 2001.
7.3 Termination By the Company.
This Agreement may be terminated and the Merger may be abandoned at any
time prior to the Effective Time, before or after the adoption and approval by
the stockholders of the Company referred to in Section 6.1(a), by action of the
Company Board, if (a) in the exercise of its good faith judgment as to fiduciary
duties to its stockholders imposed by law after consultation as to legal matters
with outside legal counsel and after consultation as to financial matters with
an investment banking firm of national reputation, the Company Board determines
that such termination is required by reason of a Superior Proposal being made,
(b) there has been a breach (without regard to materiality, Parent Material
Adverse Effect or similar qualifiers) by Parent or Merger Sub of any
representation or warranty contained in this Agreement, which breach is not
curable or, if curable, is not cured within 30 days after written notice of such
breach is given by the Company to Parent; provided that such breach, if
occurring or continuing on the Closing Date, would constitute, individually or
in the aggregate with other such breaches, the failure of the conditions set
forth in Section 6.2(a), or (c) there has been a material breach of any of the
covenants or agreements set forth in this Agreement on the part of Parent, which
breach is not curable or, if curable, is not cured within 30 days after written
notice of such breach is given by the Company to Parent. Notwithstanding the
foregoing, the Company's ability to terminate this Agreement pursuant to this
Section 7.3 is conditioned upon the prior payment by the Company of any amounts
owed by it pursuant to Section 7.5(a).
7.4 Termination By Parent.
This Agreement may be terminated and the Merger may be abandoned at any
time prior to the Effective Time, before or after the approval by the
stockholders of the Company referred to in Section 6.1(a), by action of the
Board of Directors of Parent, if (a) the Company Board shall have withdrawn,
modified in a manner adverse to Parent or failed to reconfirm within five
business days after written request from Parent its approval or recommendation
of this Agreement, the Option Agreement, the Support Agreement or the Merger or
other transactions contemplated hereby and thereby or shall have recommended an
Alternative Proposal to the Company stockholders, (b) there has been a breach
(without regard to materiality, Company Material Adverse Effect or similar
qualifiers) by the Company of any representation or warranty contained in this
Agreement, or by the Company of any representation or warranty contained in the
Option Agreement or by any Shareholder of any representation or warranty
contained in the Support Agreement, which breach is not
A-32
<PAGE> 115
curable or, if curable, is not cured within 30 days after written notice of such
breach is given by Parent to the Company or the breaching Shareholder, as
appropriate; provided that such breach, if occurring or continuing on the
Closing Date, would constitute, individually or in the aggregate with other such
breaches, the failure of the conditions set forth in Section 6.3(a)(ii), or (c)
there has been a material breach of any of the covenants or agreements set forth
in this Agreement or the Option Agreement on the part of the Company, or any of
the covenants or agreements set forth in the Support Agreement by any
Shareholder, which breach is not curable or, if curable, is not cured within 30
days after written notice of such breach is given by Parent to the Company or
the breaching Shareholder, as appropriate.
7.5 Effect of Termination and Abandonment.
(a) If this Agreement is terminated (A) by Parent pursuant to Section
7.4(a), (B) by the Company pursuant to 7.3(a), (C) by Parent or the Company
pursuant to Section 7.2(b) because of a failure to obtain the required approval
of the stockholders of the Company after a bona fide Transaction proposal for
the Company shall have been publicly disclosed, or any person or entity shall
have publicly disclosed a bona fide intention (whether or not conditional) to
make a Transaction proposal, (D) by Parent pursuant to Sections 7.4(b) or 7.4(c)
if the breach giving rise to such termination was willful and, at or prior to
such willful violation forming the basis for such termination, a bona fide
Transaction proposal shall have been made known to the Board of Directors of the
Company or shall have been publicly disclosed to the Company's stockholders, or
any person or entity shall have made known to the Board of Directors of the
Company, or otherwise publicly disclosed, a bona fide intention (whether or not
conditional) to make a Transaction proposal, and regardless of whether such
Transaction proposal shall have been rejected by the Company or withdrawn prior
to the time of such termination, or (E) by Parent or the Company pursuant to
Section 7.2(a) if, at or before such termination, a bona fide Transaction
proposal shall have been made known to the Board of Directors of the Company or
shall have been publicly disclosed to the Company's stockholders, or any person
or entity shall have made known to the Board of Directors of the Company, or
otherwise publicly disclosed, a bona fide intention (whether or not conditional)
to make a Transaction proposal, and regardless of whether such Transaction
proposal shall have been rejected by the Company or withdrawn prior to the time
of such termination and, in the cases of clauses (C), (D) and (E), within 18
months of the terminations contemplated thereby, (x) any third party shall
acquire beneficial ownership or more than 25% of the Company's outstanding
shares of voting stock or (y) the Company shall have entered into a definitive
agreement with respect to, or consummated, any Transaction), then in any such
case the Company shall pay to Parent, upon Parent's written request, a
termination fee of $10 million by wire transfer of immediately available funds
to such account as shall be designated by Parent. The Parties agree that, for
purposes of this Section 7.5, Transaction shall be as defined in Section 5.1
above, except that the 10% figures in such definition shall be 25%.
The Company acknowledges that the agreements contained in this Section
7.5(a) are an integral part of the transactions contemplated in this Agreement,
and that, without these agreements, Parent and Merger Sub would not enter into
this Agreement; accordingly, if the Company fails to promptly pay the amount due
pursuant to this Section 7.5(a), and, in order to obtain such payment, Parent or
Merger Sub commences a suit which results in a judgment against the Company for
the full amount of the fee set forth in this Section 7.5(a), the Company shall
pay to Parent its costs and expenses (including attorneys' fees) in connection
with such suit, together with interest on the amount of the fee at the rate of
12% per annum from the date such fee was required to be paid. If the fee
contemplated by Section 7.5(a)(C), (D) or (E) becomes payable, the Company shall
pay such fee within one business day after the acquisition of stock contemplated
by clause (x) of the preceding paragraph, or the entering into of an agreement
or consummation of a Transaction contemplated by clause (y) of the preceding
paragraph.
In the event of termination of this Agreement and the abandonment of the
Merger pursuant to this Article 7, all obligations of the parties hereto shall
terminate, except the obligations of the parties set forth in this Section 7.5
and Section 5.10 and except for the Confidentiality Agreement, dated May 9,
2000, between Parent and the Company (the "Confidentiality Agreement").
Moreover, in the event of termination of this Agreement pursuant to Section 7.3
or 7.4, nothing herein shall prejudice the ability of the nonbreaching party
A-33
<PAGE> 116
from seeking damages from any other party for any breach of this Agreement,
including, without limitation, attorneys' fees and the right to pursue any
remedy at law or in equity.
7.6 Extension; Waiver.
At any time prior to the Effective Time, any party hereto, by action taken
by its Board of Directors, may, to the extent legally allowed, (a) extend the
time for the performance of any of the obligations or other acts of the other
parties hereto, (b) waive any inaccuracies in the representations and warranties
made to such party contained herein or in any document delivered pursuant hereto
and (c) waive compliance with any of the agreements or conditions for the
benefit of such party contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE 8
GENERAL PROVISIONS
8.1 Nonsurvival of Representations, Warranties and Agreements.
All representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall not survive the Merger;
provided, however, that the agreements contained in Article 1, Article 2,
Section 5.10, Section 5.11, Section 5.18 and this Article 8 shall survive the
Merger to the extent contemplated by such sections.
8.2 Notices.
Any notice required to be given hereunder shall be sufficient if in
writing, and sent by facsimile transmission, by courier or other national
overnight express mail service (with proof of service), hand delivery or
certified or registered mail (return receipt requested and first-class postage
prepaid), addressed as follows:
If to Parent or Merger Sub:
The MONY Group Inc.
1740 Broadway
New York, New York 10017
Attention: General Counsel
Telecopy: (212) 708-2080
with copies to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019-6092
Attention: Jonathan L. Freedman, Esq.
Telecopy: (212) 259-6333
If to the Company:
The Advest Group, Inc.
90 State House Square
Hartford, Connecticut 06103
Attention: General Counsel
Telecopy: (860) 509-5210
A-34
<PAGE> 117
with copies to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019-6150
Attention: Craig M. Wasserman, Esq.
Telecopy: (212) 403-2232
and:
Day, Berry & Howard LLP
Cityplace I
Hartford, Connecticut 06103-3499
Attention: William H. Cuddy, Esq.
Telecopy:(860) 275-0343
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
8.3 Assignment; Binding Effect.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of the other parties,
except that Merger Sub may assign its rights hereunder to any Subsidiary of
Parent. Subject to the preceding sentence, this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns. Notwithstanding anything contained in this Agreement to
the contrary, except for the provisions of Section 5.11, nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto or their respective heirs, successors, executors,
administrators and assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
8.4 Entire Agreement.
This Agreement, the Option Agreement, the Exhibits hereto, the Company
Disclosure Schedule, the Parent Disclosure Schedule, the Confidentiality
Agreement and any documents delivered by the parties in connection herewith or
therewith constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings
among the parties with respect thereto. No addition to or modification of any
provision of this Agreement shall be binding upon any party hereto unless made
in writing and signed by all parties hereto.
8.5 Amendment.
This Agreement may be amended by the parties hereto, by action taken by
their respective Boards of Directors, at any time before or after approval of
matters presented in connection with the Merger by the stockholders of the
Company, but after such stockholder approval, no amendment shall be made which
by law requires the further approval of stockholders without obtaining such
further approval. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
8.6 Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware without regard to its rules of conflict of laws.
8.7 Counterparts.
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
Each counterpart may consist of a number of copies hereof each signed by less
than all, but together signed by all of the parties hereto.
A-35
<PAGE> 118
8.8 Headings.
Headings of the Articles and Sections of this Agreement are for the
convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
8.9 Interpretation.
In this Agreement, unless the context otherwise requires, words describing
the singular number shall include the plural and vice versa, and words denoting
each gender shall include the other gender and words denoting natural persons
shall include corporations and partnerships and vice versa.
8.10 Waivers.
Except as provided in this Agreement, no action taken pursuant to this
Agreement, including, without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representations, warranties, covenants or
agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder shall not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
8.11 Incorporation of Exhibits.
The Company Disclosure Schedule, the Parent Disclosure Schedule and all
Exhibits attached hereto and referred to herein are hereby incorporated herein
and made a part hereof for all purposes as if fully set forth herein.
8.12 Severability.
Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
8.13 Enforcement of Agreement.
The parties hereto agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with its specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof, this being in addition to any other remedy to which they are entitled at
law or in equity.
8.14 Subsidiaries and Material Subsidiaries.
As used in this Agreement, the word "Subsidiary" when used with respect to
any party means any corporation or other organization, whether incorporated or
unincorporated, of which such party directly or indirectly owns or controls at
least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization, or any organization of which such party is a general partner.
"Material Subsidiaries" means any subsidiary that is a "significant subsidiary"
as defined in Rule 1-02(w) of Regulation S-X of the SEC.
8.15 Company Material Adverse Effect.
"Company Material Adverse Effect" means any effect that is material and
adverse to (1) the financial position, results of operations, assets, properties
or business of the Company and its Subsidiaries, taken as a whole, or (2) the
ability of the Company to timely perform its obligations under the Agreement or
otherwise to consummate the transactions contemplated by this Agreement, other
than any fact, circumstance, event or thing (i) generally affecting the
securities industry, or resulting from general economic or market conditions
(including changes in interest rates) or changes in accounting principles or
changes in law, regulations or
A-36
<PAGE> 119
regulatory policies of general applicability (or interpretations thereof), (ii)
resulting from actions or omissions of a party hereto taken with the prior
written consent of the other party in contemplation of the transactions
contemplated hereby, or (iii) resulting from the announcement or execution of
this Agreement or the transactions contemplated herein.
8.16 Parent Material Adverse Effect.
"Parent Material Adverse Effect" means any effect that is material and
adverse to (1) the financial position, results of operations, assets, properties
or business of Parent and its Subsidiaries, taken as a whole, or (2) the ability
of Parent to timely perform its obligations under the Agreement or otherwise to
consummate the transactions contemplated by this Agreement, other than any fact,
circumstance, event or thing (i) generally affecting the securities or insurance
industries, or resulting from general economic or market conditions (including
changes in interest rates) or changes in accounting principles or changes in
law, regulations or regulatory policies of general applicability (or
interpretations thereof), (ii) resulting from actions or omissions of a party
hereto taken with the prior written consent of the other party in contemplation
of the transactions contemplated hereby, or (iii) resulting from the
announcement or execution of this Agreement or the transactions contemplated
herein.
A-37
<PAGE> 120
IN WITNESS WHEREOF, the parties have executed this Agreement and caused the
same to be duly delivered on their behalf on the day and year first written
above.
THE MONY GROUP, INC.
By: /s/ MICHAEL I. ROTH
------------------------------------
Name: Michael I. Roth
Title: Chairman & Chief Executive
Officer
MONY ACQUISITION CORP.
By: /s/ BART SCHWARTZ
------------------------------------
Name: Bart Schwartz
Title: President
THE ADVEST GROUP, INC.
By: /s/ GRANT W. KURTZ
------------------------------------
Name: Grant W. Kurtz
Title: President & Chief Executive
Officer
A-38
<PAGE> 121
EXHIBIT A
TO MERGER
AGREEMENT
FORM OF AFFILIATE LETTER
The MONY Group, Inc.
1740 Broadway, New York, NY 10017
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be
deemed to be an "affiliate" of The Advest Group, Inc., a Delaware corporation
(the "Company"), as the term "affiliate" is defined for purposes of paragraphs
(c) and (d) of Rule 145 of the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Act"). Pursuant to the terms of the
Agreement and Plan of Merger, dated as of August 23, 2000 (the "Agreement"),
between The MONY Group Inc., a Delaware corporation ("Parent"), MONY Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of Parent ("Merger
Sub"), and the Company, the Company will be merged with and into Merger Sub (the
"Merger").
As a result of the Merger, I will receive shares of Common Stock, par
value $0.01, of Parent (the "Parent Common Stock") in exchange for shares owned
by me of Common Stock, par value $0.01, of the Company (the "Company Common
Stock").
Compliance with the Act.
1. In compliance with the Act and the Rules and Regulations
thereunder, I represent, warrant and covenant to Parent that in the event I
receive any Parent Common Stock as a result of the Merger:
A. I shall not make any sale, transfer or other disposition of the
Parent Common Stock in violation of the Act or the Rules and Regulations.
B. I have carefully read this letter and the Agreement and
discussed the requirements of such documents and other applicable
limitations upon my ability to sell, transfer or otherwise dispose of the
Parent Common Stock, to the extent I felt necessary, with my counsel or
counsel for the Company.
C. I have been advised that the issuance of Parent Common Stock to
me pursuant to the Merger has been registered with the SEC under the Act on
a Registration Statement on Form S-4. However, I have also been advised
that, since at the time the Merger was submitted for a vote of the
stockholders of the Company, I may be deemed to have been an affiliate of
the Company and the distribution by me of the Parent Common Stock has not
been registered under the Act, I may not sell, transfer or otherwise
dispose of the Parent Common Stock issued to me in the Merger unless such
sale, transfer or other disposition (i) has been registered under the Act
and all applicable state securities or "blue sky" laws, (ii) is made in
conformity with Rule 145 promulgated by the SEC under the Act and all
applicable state securities or "blue sky" laws, or (iii) in the opinion of
legal counsel reasonably acceptable to Parent, or pursuant to a "no action"
letter obtained by the undersigned from the staff of the SEC, is otherwise
exempt from registration under the Act and all applicable state securities
or "blue sky" laws.
D. I understand that Parent is under no obligation to register the
sale, transfer or other disposition of the Parent Common Stock received by
me or on my behalf as a result of the Merger under the Act or to take any
other action necessary in order to make compliance with an exemption from
such registration available.
E. I also understand that stop transfer instructions will be given
to Parent's transfer agents with respect to the Parent Common Stock and
that there will be placed on the certificates for the Parent Common Stock
issued to me, or any substitutions therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION TO
WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933
A-39
<PAGE> 122
APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE TRANSFERRED
IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT DATED AUGUST 23, 2000 BETWEEN
THE REGISTERED HOLDER HEREOF AND PARENT, A COPY OF WHICH AGREEMENT IS ON
FILE AT THE PRINCIPAL OFFICES OF PARENT."
provided, however, that the foregoing legend will not be
placed upon certificates for the Parent Common Stock issued to me, or any
substitutions therefore if (i) I hold all of such shares of Parent Common
Stock issued to me in one brokerage account at one brokerage firm (the
"Firm") and (ii) I and the Firm acknowledge and agree in writing with
Parent that (A) the foregoing clause (i) accurately reflects the holding of
all of the shares of Parent Common Stock issued to me, (B) the shares of
Parent Common Stock were issued in a transaction to which Rule 145 under
the Act applies, and may only be transferred in accordance with Rule 145
and with all applicable state securities or "blue sky" laws and (C) the
shares of Parent Common Stock issued to me will not be transferred, and I
and the Firm will take all actions to ensure that the shares of Parent
Common Stock issued to me will not be transferred, in violation of Rule 145
or any applicable state securities or "blue sky" law.
F. I also understand that unless the transfer by me of my Parent
Common Stock has been registered under the Act or is a sale made in
conformity with the provisions of Rule 145 and all applicable state
securities or "blue sky" laws, Parent reserves the right to put the
following legend on the certificates issued to my transferee:
G. "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES OR "BLUE SKY" LAWS AND WERE ACQUIRED FROM A PERSON WHO RECEIVED
SUCH SHARES IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE BEEN ACQUIRED BY THE HOLDER
NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND MAY NOT BE
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933
AND ALL APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
The representations, covenants and agreements contained herein shall
be true and correct at all times from the date hereof. I understand that my
obligations hereunder shall attach to and be binding upon any person or entity
to whom legal or beneficial ownership of my shares of Company Common Stock (and
shares of Parent Common Stock following the Merger) shall pass by operation of
law or otherwise.
Very truly yours,
Name:
----------------------------------
Accepted this day of
, 2000 by Parent
By:
--------------------------------------------------------
Name:
Title:
A-40
<PAGE> 123
ANNEX A
Calculation of Exchange Ratio
P = Average Price (as defined in Section 2.2(a) of the Agreement)
ER = Exchange Ratio
<TABLE>
<CAPTION>
Range of P ER
---------- --
<S> <C>
$28 and lower 15.50/P + 0.498214
More than $28 and less than or equal to $31.50 29.45/P
More than $31.50 and less than or equal to $38.50 15.50/P + 0.442857
More than $38.50 and less than or equal to $42 32.55/P
More than $42 15.50/P + 0.405952
</TABLE>
<TABLE>
<CAPTION>
Then the Implied Price
If the Average Per Share of Company
Price Is Common Stock Is
-------------- ----------------------
<S> <C>
$24.50 $27.71
28.00 29.45
31.50 29.45
35.00 31.00
38.50 32.55
42.00 32.55
45.50 33.97
</TABLE>
A-41
<PAGE> 124
ANNEX B
THE TRANSFER OF THIS AGREEMENT IS SUBJECT TO
CERTAIN PROVISIONS CONTAINED HEREIN AND TO
RESALE RESTRICTIONS UNDER THE
SECURITIES ACT OF 1933, AS AMENDED
STOCK OPTION AGREEMENT, dated August 23, 2000, between The Advest Group,
Inc., a Delaware corporation ("Issuer"), and The MONY Group Inc., a Delaware
corporation ("Grantee").
W I T N E S S E T H:
WHEREAS, Grantee, MONY Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Grantee ("Merger Sub"), and Issuer have entered into
an Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
which agreement has been executed by the parties hereto immediately prior to
this Stock Option Agreement (this "Agreement"); and
WHEREAS, as a condition to Grantee and Merger Sub entering into the Merger
Agreement and in consideration therefor, Issuer has agreed to grant Grantee the
Option (as hereinafter defined);
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein and in the Merger Agreement, the parties hereto
agree as follows:
1. (a) Issuer hereby grants to Grantee an unconditional, irrevocable
option (the "Option") to purchase, subject to the terms hereof, up to
1,770,909 fully paid and nonassessable shares of Issuer's common stock, par
value $0.01 per share ("Common Stock"), at a price of $31.00 per share (the
"Option Price"); provided, however, that in no event shall the number of
shares of Common Stock for which this Option is exercisable exceed 19.9% of
the Issuer's issued and outstanding shares of Common Stock without giving
effect to any shares subject to or issued pursuant to the Option. The
number of shares of Common Stock that may be received upon the exercise of
the Option and the Option Price are subject to adjustment as herein set
forth.
(b) In the event that any additional shares of Common Stock are either
(i) issued or otherwise become outstanding after the date of this Agreement
(other than pursuant to this Agreement) or (ii) redeemed, repurchased,
retired or otherwise cease to be outstanding after the date of the
Agreement, the number of shares of Common Stock subject to the Option shall
be increased or decreased, as appropriate, so that, after such issuance,
such number equals 19.9% of the number of shares of Common Stock then
issued and outstanding without giving effect to any shares subject or
issued pursuant to the Option. Nothing contained in this Section 1(b) or
elsewhere in this Agreement shall be deemed to authorize Issuer or Grantee
to breach any provision of the Merger Agreement.
2. (a) The Holder (as hereinafter defined) may exercise the Option, in
whole or part, and from time to time, if, but only if, both an Initial
Triggering Event (as hereinafter defined) and a Subsequent Triggering Event
(as hereinafter defined) shall have occurred prior to the occurrence of an
Exercise Termination Event (as hereinafter defined), provided that the
Holder shall have sent the written notice of such exercise (as provided in
subsection (e) of this Section 2) within 90 days following such Subsequent
Triggering Event. Each of the following shall be an "Exercise Termination
Event": (i) the Effective Time (as defined in the Merger Agreement) of the
Merger; (ii) termination of the Merger Agreement in accordance with the
provisions thereof if such termination occurs prior to the occurrence of an
Initial Triggering Event, except a termination by Grantee pursuant to
Section 7.4(b) of the Merger Agreement (unless the breach by Issuer giving
rise to such right of termination is non-volitional); or (iii) the passage
of 12 months after termination of the Merger Agreement if such termination
follows the occurrence of an Initial Triggering Event or is a termination
by Grantee pursuant to Section 7.4(b) of the Merger Agreement (unless the
breach by Issuer giving rise to such right of termination is
non-volitional) (provided that if an Initial Triggering Event continues or
occurs beyond such termination and prior to the passage of such 12-month
period, the Exercise Termination Event shall be 12 months from the
expiration
B-1
<PAGE> 125
of the Last Triggering Event but in no event more than 18 months after such
termination). The "Last Triggering Event" shall mean the last Initial
Triggering Event to expire. The term "Holder" shall mean the holder or
holders of the Option.
(b) The term "Initial Triggering Event" shall mean any of the following
events or transactions occurring after the date hereof:
(i) Issuer or any of its Subsidiaries (each an "Issuer
Subsidiary"), without having received Grantee's prior written consent,
shall have entered into an agreement to engage in an Acquisition
Transaction (as hereinafter defined) with any person (the term "person"
for purposes of this Agreement having the meaning assigned thereto in
Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and the rules and regulations thereunder)
other than Grantee or any of its Subsidiaries (each a "Grantee
Subsidiary") or the Board of Directors of Issuer shall have recommended
that the shareholders of Issuer approve or accept any Acquisition
Transaction. For purposes of this Agreement, "Acquisition Transaction"
shall mean (w) a merger or consolidation, or any similar transaction,
involving Issuer or any Significant Subsidiary (as defined in Rule 1-02
of Regulation S-X promulgated by the Securities and Exchange Commission
(the "SEC")) of Issuer, (x) a purchase, lease or other acquisition or
assumption of all or a substantial portion of the assets of Issuer or
any Significant Subsidiary of Issuer, (y) a purchase or other
acquisition (including by way of merger, consolidation, share exchange
or otherwise) of securities representing 10% or more of the voting power
of Issuer, or (z) any substantially similar transaction; provided,
however, that in no event shall any merger, consolidation, purchase or
similar transaction involving only the Issuer and one or more of its
Subsidiaries or involving only any two or more of such Subsidiaries,
provided that any such transaction is not entered into in violation of
the terms of the Merger Agreement, be deemed to be an Acquisition
Transaction;
(ii) (A) Issuer or any Issuer Subsidiary, without having received
Grantee's prior written consent, shall have authorized, recommended,
proposed or publicly announced its intention to authorize, recommend or
propose, to engage in an Acquisition Transaction with any person other
than Grantee or a Grantee Subsidiary, or (B) the Board of Directors of
Issuer shall have publicly withdrawn or modified, or publicly announced
its interest to withdraw or modify, in any manner adverse to Grantee,
its recommendation that the shareholders of Issuer approve the
transactions contemplated by the Merger Agreement;
(iii) Any person other than Grantee, any Grantee Subsidiary or any
Issuer Subsidiary acting in a fiduciary capacity in the ordinary course
of its business shall have acquired beneficial ownership or the right to
acquire beneficial ownership of 10% or more of the outstanding shares of
Common Stock (the term "beneficial ownership" for purposes of this
Agreement having the meaning assigned thereto in Section 13(d) of the
1934 Act, and the rules and regulations thereunder);
(iv) Any person other than Grantee or any Grantee Subsidiary shall
have made a bona fide proposal to Issuer or its shareholders by public
announcement or written communication that is or becomes the subject of
public disclosure to engage in an Acquisition Transaction;
(v) After an overture is made by a third party to Issuer or its
shareholders to engage in an Acquisition Transaction, Issuer shall have
breached any covenant or obligation contained in the Merger Agreement
and such breach (x) would entitle Grantee to terminate the Merger
Agreement and (y) shall not have been cured prior to the Notice Date (as
hereinafter defined);
(vi) Any person other than Grantee or any Grantee Subsidiary, other
than in connection with a transaction to which Grantee has given its
prior written consent, shall have filed an application or notice with
the OTS or the National Association of Securities Dealers, Inc.
("NASD"), or other federal or state regulatory authority, which
application or notice has been accepted for processing, for approval to
engage in an Acquisition Transaction; or.
(vii) Termination of the Merger Agreement (A) by the Grantee or the
Issuer pursuant to Section 7.2(b) (as qualified by Section 7.5(a)(C)) of
the Merger Agreement, (B) by the Grantee
B-2
<PAGE> 126
pursuant to Section 7.4(b) or 7.4(c) (as qualified by Section 7.5(a)(D))
of the Merger Agreement), (C) by the Grantee or the Issuer pursuant to
Section 7.2(a) (as modified by Section 7.5(a)(E)) of the Merger
Agreement or (D) by the Issuer pursuant to Section 7.3(a) of the Merger
Agreement.
(c) The term "Subsequent Triggering Event" shall mean either of the
following events or transactions occurring after the date hereof:
(i) The acquisition by any person of beneficial ownership of 25% or
more of the then-outstanding Common Stock;
(ii) The occurrence of the Initial Triggering Event described in
paragraph (i) of subsection (b) of this Section 2, except that the
percentage referred to in clause (y) shall be 25%; or
(iii) Termination of the Merger Agreement by (A) the Grantee due to
the Initial Triggering Event described in paragraph (ii)(B) of
subsection (b) of this Section 2 or (B) by the Issuer pursuant to
Section 7.3(a) of the Merger Agreement.
(d) Issuer shall notify Grantee promptly in writing of the occurrence
of any Initial Triggering Event or Subsequent Triggering Event of which it
has notice (together, a "Triggering Event"), it being understood that the
giving of such notice by Issuer shall not be a condition to the right of
the Holder to exercise the Option.
(e) In the event the Holder is entitled to and wishes to exercise the
Option, it shall send to Issuer a written notice (the date of which being
herein referred to as the "Notice Date") specifying (i) the total number of
shares it will purchase pursuant to such exercise and (ii) a place and date
not earlier than three business days nor later than 60 business days from
the Notice Date for the closing of such purchase (the "Closing Date");
provided that if prior notification to or approval of the Office of Thrift
Supervision (the "OTS"), the Commissioner of Banking for the State of
Connecticut, the NASD or pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act") or any other
regulatory agency is required in connection with such purchase, the Holder
and the Grantor, as applicable, shall promptly file the required notice or
application for approval and shall expeditiously process the same and the
period of time that otherwise would run pursuant to this sentence shall run
instead from the date on which any required notification periods have
expired or been terminated or such approvals have been obtained and any
requisite waiting period or periods shall have passed. Any exercise of the
Option shall be deemed to occur on the Notice Date relating thereto.
(f) At the closing referred to in subsection (e) of this Section 2,
the Holder shall pay to Issuer the aggregate purchase price for the shares
of Common Stock purchased pursuant to the exercise of the Option in
immediately available funds by wire transfer to a bank account designated
by Issuer, provided that failure or refusal of Issuer to designate such a
bank account shall not preclude the Holder from exercising the Option.
(g) At such closing, simultaneously with the delivery of immediately
available funds as provided in subsection (f) of this Section 2, Issuer
shall deliver to the Holder a certificate or certificates representing the
number of shares of Common Stock purchased by the Holder and, if the Option
should be exercised in part only, a new Option evidencing the rights of the
Holder thereof to purchase the balance of the shares purchasable hereunder,
and the Holder shall deliver to Issuer a copy of this Agreement and a
letter agreeing that the Holder will not offer to sell or otherwise dispose
of such shares in violation of applicable law or the provisions of this
Agreement.
(h) Certificates for Common Stock delivered at a closing hereunder may
be endorsed with a restrictive legend that shall read substantially as
follows:
"The transfer of the shares represented by this certificate is subject
to certain provisions of an agreement between the registered holder
hereof and Issuer and to resale restrictions arising under the
Securities Act of 1933, as amended. A copy of such agreement is on file
at the principal office of
B-3
<PAGE> 127
Issuer and will be provided to the holder hereof without charge upon
receipt by Issuer of a written request therefor."
It is understood and agreed that: (i) the reference to the resale restrictions
of the Securities Act of 1933, as amended (the "1933 Act"), in the above legend
shall be removed by delivery of substitute certificate(s) without such reference
if the Holder shall have delivered to Issuer a copy of a letter from the staff
of the Securities and Exchange Commission, or an opinion of counsel, in form and
substance reasonably satisfactory to Issuer, to the effect that such legend is
not required for purposes of the 1933 Act; (ii) the reference to the provisions
of this Agreement in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if the shares have been sold or
transferred in compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference; and (iii) the
legend shall be removed in its entirety if the conditions in the preceding
clauses (i) and (ii) are both satisfied. In addition, such certificates shall
bear any other legend as may be required by law.
(i) Upon the giving by the Holder to Issuer of the written notice of
exercise of the Option provided for under subsection (e) of this Section 2
and the tender of the applicable purchase price in immediately available
funds, the Holder shall be deemed, subject to the receipt of applicable
regulatory approvals, to be the holder of record of the shares of Common
Stock issuable upon such exercise, notwithstanding that the stock transfer
books of Issuer shall then be closed or that certificates representing such
shares of Common Stock shall not then be actually delivered to the Holder.
Issuer shall pay all expenses, and any and all United States federal, state
and local taxes and other charges that may be payable in connection with
the preparation, issue and delivery of stock certificates under this
Section 2 in the name of the Holder or its assignee, transferee or
designee.
3. Issuer agrees: (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Common Stock so that the Option may be exercised without additional
authorization of Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Common Stock;
(ii) that it will not, by charter amendment or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other
voluntary act, avoid or seek to avoid the observance or performance of any
of the covenants, stipulations or conditions to be observed or performed
hereunder by Issuer; (iii) promptly to take all action as may from time to
time be required (including (x) complying with all premerger notification,
reporting and waiting period requirements specified in the HSR Act and
regulations promulgated thereunder and (y) under the Home Owners' Loan Act
of 1933, as amended (the "Home Owners' Loan Act"), the Connecticut General
Statute of 1999, as amended (the "Connecticut General Statute"), or any
state banking law, prior approval of or notice to the OTS, the Commissioner
of Banking for the State of Connecticut, the NASD or to any other
regulatory authority is necessary before the Option may be exercised,
cooperating fully with the Holder in preparing such applications or notices
and providing such information to any applicable regulatory authority as
they may require) in order to permit the Holder to exercise the Option and
Issuer duly and effectively to issue shares of Common Stock pursuant
hereto; and (iv) promptly to take all action provided herein to protect the
rights of the Holder against dilution.
4. This Agreement (and the Option granted hereby) are exchangeable,
without expense, at the option of the Holder, upon presentation and
surrender of this Agreement at the principal office of Issuer, for other
Agreements providing for Options of different denominations entitling the
holder thereof to purchase, on the same terms and subject to the same
conditions as are set forth herein, in the aggregate the same number of
shares of Common Stock purchasable hereunder. The terms "Agreement" and
"Option" as used herein include any Stock Option Agreements and related
Options for which this Agreement (and the Option granted hereby) may be
exchanged. Upon receipt by Issuer of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Agreement, and (in
the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Agreement, if
mutilated, Issuer will execute and deliver a new Agreement of like tenor
and date. Any such new Agreement executed and delivered shall constitute an
additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
B-4
<PAGE> 128
5. In addition to the adjustment in the number of shares of Common
Stock that are purchasable upon exercise of the Option pursuant to Section
1 of this Agreement, the number of shares of Common Stock purchasable upon
the exercise of the Option and the Option Price shall be subject to
adjustment from time to time as provided in this Section 5. In the event of
any change in, or distributions in respect of, the Common Stock by reason
of stock dividends, split-ups, mergers, recapitalizations, combinations,
subdivisions, conversions, exchanges of shares, distributions on or in
respect of the Common Stock, or the like, the type and number of shares of
Common Stock purchasable upon exercise hereof and the Option Price shall be
appropriately adjusted in such manner as shall fully preserve the economic
benefits provided hereunder and proper provision shall be made in any
agreement governing any such transaction to provide for such proper
adjustment and the full satisfaction of the Issuer's obligations hereunder.
6. Upon the occurrence of a Subsequent Triggering Event that occurs
prior to an Exercise Termination Event,
(a) Issuer shall, at the request of Grantee delivered within 90
days of such Subsequent Triggering Event (whether on its own behalf or
on behalf of any subsequent holder of this Option (or part thereof) or
any of the shares of Common Stock issued pursuant hereto), promptly
prepare, file and keep current a shelf registration statement under the
1933 Act covering this Option and any shares issued and issuable
pursuant to this Option and shall use its reasonable best efforts to
cause such registration statement to become effective and remain current
in order to permit the sale or other disposition of this Option and any
shares of Common Stock issued upon total or partial exercise of this
Option ("Option Shares") in accordance with any plan of disposition
requested by Grantee. Issuer will use its reasonable best efforts to
cause such registration statement first to become effective and then to
remain effective for such period not in excess of 180 days from the day
such registration statement first becomes effective or such shorter time
as may be reasonably necessary to effect such sales or other
dispositions. Grantee shall have the right to demand two such
registrations. The foregoing notwithstanding, if, at the time of any
request by Grantee for registration of the Option or Option Shares as
provided above, Issuer is in registration with respect to an
underwritten public offering of shares of Common Stock, and if in the
good faith judgment of the managing underwriter or managing
underwriters, or, if none, the sole underwriter or underwriters, of such
offering the inclusion of the Holder's Option or Option Shares would
interfere with the successful marketing of the shares of Common Stock
offered by Issuer, the number of Option Shares otherwise to be covered
in the registration statement contemplated hereby may be reduced;
provided, however, that after any such required reduction the number of
Option Shares to be included in such offering for the account of the
Holder shall constitute at least 25% of the total number of shares to be
sold by the Holder and Issuer in the aggregate; and provided further,
however, that if such reduction occurs, then the Issuer shall file a
registration statement for the balance as promptly as practical and no
reduction shall thereafter occur. Each such Holder shall provide all
information reasonably requested by Issuer for inclusion in any
registration statement to be filed hereunder. If requested by any such
Holder in connection with such registration, Issuer shall become a party
to any underwriting agreement relating to the sale of such shares, but
only to the extent of obligating itself in respect of representations,
warranties, indemnities and other agreements customarily included in
secondary offering underwriting agreements for similar transactions.
Upon receiving any request under this Section 6 from any Holder, Issuer
agrees to send a copy thereof to any other person known to Issuer to be
entitled to registration rights under this Section 6, in each case by
promptly mailing the same, postage prepaid, to the address of record of
the persons entitled to receive such copies. Notwithstanding anything to
the contrary contained herein, in no event shall Issuer be obligated to
effect more than two registrations pursuant to this Section 6 by reason
of the fact that there shall be more than one Grantee as a result of any
assignment or division of this Agreement.
(b) Issuer shall indemnify and hold harmless (i) Grantee, its
affiliates and its officers and directors and (ii) each underwriter and
each person who controls any underwriter within the meaning of the 1933
Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"),
B-5
<PAGE> 129
(collectively, the "Underwriters") ((i) and (ii) being-referred to as
"Indemnified Parties") against any losses, claims, damages, liabilities
or expenses, to which the Indemnified Parties may become subject,
insofar as such losses, claims, damages, liabilities (or actions in
respect thereof) and expenses arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained or
incorporated by reference in any registration statement filed pursuant
to this Section 6, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that Issuer will not be liable in any such case to
the extent that any such loss, liability, claim, damage or expense
arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any such documents in
reasonable reliance upon and in conformity with written information
furnished to Issuer by the Indemnified Parties expressly for use or
incorporation by reference therein.
(c) Grantee and the Underwriters shall indemnify and hold harmless
Issuer, its affiliates and its officers and directors against any
losses, claims, damages, liabilities or expenses to which Issuer, its
affiliates and its officers and directors may become subject, insofar as
such losses, claims, damages, liabilities (or actions in respect
thereof) and expenses arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained or
incorporated by reference in any registration statement filed pursuant
to this Section 6, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in reasonable reliance upon and in conformity with written
information furnished to Issuer by Grantee or the Underwriters, as
applicable, specifically for use or incorporation by reference therein.
7. (a) Immediately prior to the occurrence of a Repurchase Event (as
hereinafter defined), (i) following a request of the Holder, delivered
prior to an Exercise Termination Event, Issuer (or any successor thereto)
shall repurchase the Option from the Holder at a price (the "Option
Repurchase Price") equal to the amount by which (A) the Market/Offer Price
(as hereinafter defined) exceeds (B) the Option Price, multiplied by the
number of shares for which this Option may then be exercised and (ii) at
the request of the owner of Option Shares from time to time (the "Owner"),
delivered within 90 days of such occurrence (or such later period as
provided in Section 10), Issuer shall repurchase such number of the Option
Shares from the Owner as the Owner shall designate at a price (the "Option
Share Repurchase Price") equal to the Market/Offer Price multiplied by the
number of Option Shares so designated. The term "Market/Offer Price" shall
mean the highest of (i) the price per share of Common Stock at which a
tender offer or exchange offer therefor has been made, (ii) the price per
share of Common Stock to be paid by any third party pursuant to an
agreement with Issuer, (iii) the highest closing price for shares of Common
Stock within the six-month period immediately preceding the date the Holder
gives notice of the required repurchase of this Option or the Owner gives
notice of the required repurchase of Option Shares, as the case may be, or
(iv) in the event of a sale of all or a substantial portion of Issuer's
assets, the sum of the price paid in such sale for such assets and the
current market value of the remaining assets of Issuer as determined by a
nationally recognized investment banking firm selected by the Holder or the
Owner, as the case may be, and reasonably acceptable to the Issuer, divided
by the number of shares of Common Stock of Issuer outstanding at the time
of such sale. In determining the Market/Offer Price, the value of
consideration other than cash shall be determined by a nationally
recognized investment banking firm selected by the Holder or Owner, as the
case may be, and reasonably acceptable to the Issuer. The Option Repurchase
Price and the Option Share Repurchase Price shall be payable in immediately
available funds to such account as shall be designated by the Holder or
Owner, as applicable.
(b) The Holder and the Owner, as the case may be, may exercise its
right to require Issuer to repurchase the Option and any Option Shares
pursuant to this Section 7 by surrendering for such purpose to Issuer, at
its principal office, a copy of this Agreement or certificates for Option
Shares, as applicable, accompanied by a written notice or notices stating
that the Holder or the Owner, as the case may be,
B-6
<PAGE> 130
elects to require Issuer to repurchase this Option and/or the Option Shares
in accordance with the provisions of this Section 7. Within the latter to
occur of (x) five business days after the surrender of the Option and/or
certificates representing Option Shares and the receipt of such notice or
notices relating thereto and (y) the time that is immediately prior to the
occurrence of a Repurchase Event, Issuer shall deliver or cause to be
delivered to the Holder the Option Repurchase Price and/or to the Owner the
Option Share Repurchase Price therefor or the portion thereof, if any, that
Issuer is not then prohibited under applicable law and regulation from so
delivering.
(c) To the extent that Issuer is prohibited under applicable law or
regulation from repurchasing the Option and/or the Option Shares in full,
Issuer shall immediately so notify the Holder and/or the Owner and
thereafter deliver or cause to be delivered, from time to time, to the
Holder and/or the Owner, as appropriate, the portion of the Option
Repurchase Price and the Option Share Repurchase Price, respectively, that
it is no longer prohibited from delivering, within five business days after
the date on which Issuer is no longer so prohibited; provided, however,
that if Issuer at any time after delivery of a notice of repurchase
pursuant to paragraph (b) of this Section 7 is prohibited under applicable
law or regulation from delivering to the Holder and/or the Owner, as
appropriate, the Option Repurchase Price and the Option Share Repurchase
Price, respectively, in full (and Issuer hereby undertakes to use its best
efforts to obtain all required regulatory and legal approvals and to file
any required notices, in each case as promptly as practicable in order to
accomplish such repurchase), the Holder or Owner may revoke its notice of
repurchase of the Option or the Option Shares either in whole or to the
extent of the prohibition, whereupon, in the latter case, Issuer shall
promptly (i) deliver to the Holder and/or the Owner, as appropriate, that
portion of the Option Repurchase Price or the Option Share Repurchase Price
that Issuer is not prohibited from delivering; and (ii) deliver, as
appropriate, either (A) to the Holder, a new Stock Option Agreement
evidencing the right of the Holder to purchase that number of shares of
Common Stock obtained by multiplying the number of shares of Common Stock
for which the surrendered Stock Option Agreement was exercisable at the
time of delivery of the notice of repurchase by a fraction, the numerator
of which is the Option Repurchase Price less the portion thereof
theretofore delivered to the Holder and the denominator of which is the
Option Repurchase Price, or (B) to the Owner, a certificate for the Option
Shares it is then so prohibited from repurchasing.
(d) For purposes of this Section 7, a Repurchase Event shall be deemed
to have occurred (i) upon the consummation of any merger, consolidation or
similar transaction involving Issuer or any purchase, lease or other
acquisition of all or a substantial portion of the assets of Issuer, other
than any such transaction which would not constitute an Acquisition
Transaction pursuant to the provisos to Section 2(b)(i) hereof or (ii) upon
the acquisition by any person of beneficial ownership of 50% or more of the
then outstanding shares of Common Stock, provided that no such event shall
constitute a Repurchase Event unless a Subsequent Triggering Event shall
have occurred prior to an Exercise Termination Event. The parties hereto
agree that Issuer's obligations to repurchase the Option or Option Shares
under this Section 7 shall not terminate upon the occurrence of an Exercise
Termination Event unless no Subsequent Triggering Event shall have occurred
prior to the occurrence of an Exercise Termination Event.
8. (a) In the event that, prior to an Exercise Termination Event,
Issuer shall enter into an agreement (i) to consolidate with or merge into
any person, other than Grantee or one of its Subsidiaries, and shall not be
the continuing or surviving corporation of such consolidation or merger,
(ii) to permit any person, other than Grantee or one of its Subsidiaries,
to merge into Issuer and Issuer shall be the continuing or surviving
corporation, but, in connection with such merger, the then outstanding
shares of Common Stock shall be changed into or exchanged for stock or
other securities of any other person or cash or any other property or the
then outstanding shares of Common Stock shall after such merger represent
less than 50% of the outstanding voting shares and voting share equivalents
of the merged company, or (iii) to sell or otherwise transfer all or
substantially all of its assets to any person, other than Grantee or one of
its Subsidiaries, then, and in each such case, the agreement governing such
transaction shall make proper provision so that the Option shall, upon the
consummation of any such transaction and upon the terms and conditions set
forth herein, be converted into, or exchanged for, an option (the
B-7
<PAGE> 131
"Substitute Option"), at the election of the Holder, of either (x) the
Acquiring Corporation (as hereinafter defined) or (y) any person that
controls the Acquiring Corporation.
(b) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (A) the continuing or
surviving corporation of a consolidation or merger with Issuer (if other
than Issuer), (B) Issuer in a merger in which Issuer is the continuing
or surviving person, and (C) the transferee of all or substantially all
of Issuer's assets.
(ii) "Substitute Common Stock" shall mean the common stock issued
by the issuer of the Substitute Option upon exercise of the Substitute
Option.
(iii) "Assigned Value" shall mean the Market/Offer Price, as
defined in Section 7.
(iv) "Average Price" shall mean the average closing price of a
share of the Substitute Common Stock for the one year immediately
preceding the consolidation, merger or sale in question, but in no event
higher than the closing price of the shares of Substitute Common Stock
on the day preceding such consolidation, merger or sale; provided that
if Issuer is the issuer of the Substitute Option, the Average Price
shall be computed with respect to a share of common stock issued by the
person merging into Issuer or by any company that controls or is
controlled by such person, as the Holder may elect.
(c) The Substitute Option shall have the same terms as the Option,
provided, that if the terms of the Substitute Option cannot, for legal
reasons, be the same as the Option, such terms shall be as similar as
possible and in no event less advantageous to the Holder. The issuer of the
Substitute Option shall also enter into an agreement with the then Holder
or Holders of the Substitute Option in substantially the same form as this
Agreement, which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of
shares of Substitute Common Stock as is equal to the Assigned Value
multiplied by the number of shares of Common Stock for which the Option is
then exercisable, divided by the Average Price. The exercise price of the
Substitute Option per share of Substitute Common Stock shall then be equal
to the Option Price multiplied by a fraction, the numerator of which shall
be the number of shares of Common Stock for which the Option is then
exercisable and the denominator of which shall be the number of shares of
Substitute Common Stock for which the Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs, shall
the Substitute Option be exercisable for more than 19.9% of the shares of
Substitute Common Stock outstanding prior to exercise of the Substitute
Option. In the event that the Substitute Option would be exercisable for
more than 19.9% of the shares of Substitute Common Stock outstanding prior
to exercise but for this clause (e), the issuer of the Substitute Option
(the "Substitute Option Issuer") shall make a cash payment to Holder equal
to the excess of (i) the value of the Substitute Option without giving
effect to the limitation in this clause (e) over (ii) the value of the
Substitute Option after giving effect to the limitation in this clause (e).
This difference in value shall be determined by a nationally recognized
investment banking firm selected by the Holder or the Owner, as the case
may be, and reasonably acceptable to the Acquiring Corporation.
(f) Issuer shall not enter into any transaction described in
subsection (a) of this Section 8 unless the Acquiring Corporation and any
person that controls the Acquiring Corporation assume in writing all the
obligations of Issuer hereunder.
9. (a) At the request of the holder of the Substitute Option (the
"Substitute Option Holder"), the Substitute Option Issuer shall repurchase
the Substitute Option from the Substitute Option Holder at a price (the
"Substitute Option Repurchase Price") equal to the amount by which (i) the
Highest Closing Price (as hereinafter defined) exceeds (ii) the exercise
price of the Substitute Option, multiplied by the number of shares of
Substitute Common Stock for which the Substitute Option may then be
exercised, and at the request of the owner (the "Substitute Share Owner")
of shares of Substitute Common Stock (the "Substitute Shares"), the
Substitute Option Issuer shall repurchase the Substitute Shares at a price
B-8
<PAGE> 132
(the "Substitute Share Repurchase Price") equal to the Highest Closing
Price multiplied by the number of Substitute Shares so designated. The term
"Highest Closing Price" shall mean the highest closing price for shares of
Substitute Common Stock within the six-month period immediately preceding
the date the Substitute Option Holder gives notice of the required
repurchase of the Substitute Option or the Substitute Share Owner gives
notice of the required repurchase of the Substitute Shares, as applicable.
The Substitute Option Repurchase Price and the Substitute Share Repurchase
Price shall be payable in immediately available funds to such account as
shall be designated by the Substitute Option Holder or Substitute Share
Owner, as applicable.
(b) The Substitute Option Holder and the Substitute Share Owner, as
the case may be, may exercise its respective right to require the
Substitute Option Issuer to repurchase the Substitute Option and the
Substitute Shares pursuant to this Section 9 by surrendering for such
purpose to the Substitute Option Issuer, at its principal office, the
agreement for such Substitute Option (or, in the absence of such an
agreement, a copy of this Agreement) and certificates for Substitute Shares
accompanied by a written notice or notices stating that the Substitute
Option Holder or the Substitute Share Owner, as the case may be, elects to
require the Substitute Option Issuer to repurchase the Substitute Option
and/or the Substitute Shares in accordance with the provisions of this
Section 9. As promptly as practicable, and in any event within five
business days after the surrender of the Substitute Option and/or
certificates representing Substitute Shares and the receipt of such notice
or notices relating thereto, the Substitute Option Issuer shall deliver or
cause to be delivered to the Substitute Option Holder the Substitute Option
Repurchase Price and/or to the Substitute Share Owner the Substitute Share
Repurchase Price therefor or, in either case, the portion thereof which the
Substitute Option Issuer is not then prohibited under applicable law and
regulation from so delivering.
(c) To the extent that the Substitute Option Issuer is prohibited
under applicable law or regulation from repurchasing the Substitute Option
and/or the Substitute Shares in part or in full, the Substitute Option
Issuer following a request for repurchase pursuant to this Section 9 shall
immediately so notify the Substitute Option Holder and/or the Substitute
Share Owner and thereafter deliver or cause to be delivered, from time to
time, to the Substitute Option Holder and/or the Substitute Share Owner, as
appropriate, the portion of the Substitute Option Repurchase Price or the
Substitute Share Repurchase Price, respectively, which it is no longer
prohibited from delivering, within five business days after the date on
which the Substitute Option Issuer is no longer so prohibited; provided,
however, that if the Substitute Option Issuer is at any time after delivery
of a notice of repurchase pursuant to subsection (b) of this Section 9 is
prohibited under applicable law or regulation from delivering to the
Substitute Option Holder and/or the Substitute Share Owner, as appropriate,
the Substitute Option Repurchase Price and the Substitute Share Repurchase
Price, respectively, in full (and the Substitute Option Issuer shall use
its best efforts to obtain all required regulatory and legal approvals, in
each case as promptly as practicable, in order to accomplish such
repurchase), the Substitute Option Holder or Substitute Share Owner may
revoke its notice of repurchase of the Substitute Option or the Substitute
Shares either in whole or to the extent of the prohibition, whereupon, in
the latter case, the Substitute Option Issuer shall promptly (i) deliver to
the Substitute Option Holder or Substitute Share Owner, as appropriate,
that portion of the Substitute Option Repurchase Price or the Substitute
Share Repurchase Price that the Substitute Option Issuer is not prohibited
from delivering; and (ii) deliver, as appropriate, either (A) to the
Substitute Option Holder, a new Substitute Option evidencing the right of
the Substitute Option Holder to purchase that number of shares of the
Substitute Common Stock obtained by multiplying the number of shares of the
Substitute Common Stock for which the surrendered Substitute Option was
exercisable at the time of delivery of the notice of repurchase by a
fraction, the numerator of which is the Substitute Option Repurchase Price
less the portion thereof theretofore delivered to the Substitute Option
Holder and the denominator of which is the Substitute Option Repurchase
Price, or (B) to the Substitute Share Owner, a certificate for the
Substitute Common Shares it is then so prohibited from repurchasing.
10. The periods for exercise of certain rights under this Agreement,
and the date of termination of the right to exercise the Option pursuant to
Section 19 hereof, shall be extended: (i) to the extent
B-9
<PAGE> 133
necessary to obtain all regulatory approvals for the exercise of such
rights and for the expiration of all statutory waiting periods; (ii) to the
extent necessary to avoid liability under Section 16(b) of the 1934 Act by
reason of such exercise; and (iii) during any period in which Grantee is
precluded from exercising such rights due to an injunction or other legal
restriction, plus in each case such additional period as is reasonably
necessary for the exercise of such rights promptly following the obtaining
of such approvals or the expiration of such periods.
11. Issuer hereby represents and warrants to Grantee as follows:
(a) Issuer has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of Issuer and no other
corporate proceedings on the part of Issuer are necessary to authorize
this Agreement or to consummate the transactions so contemplated. This
Agreement has been duly and validly executed and delivered by Issuer.
(b) Issuer has taken all necessary corporate action to authorize
and reserve and to permit it to issue, and at all times from the date
hereof through the termination of this Agreement in accordance with its
terms will have reserved for issuance upon the exercise of the Option,
that number of shares of Common Stock equal to the maximum number of
shares of Common Stock at any time and from time to time issuable
hereunder, and all such shares, upon issuance pursuant hereto, will be
duly authorized, validly issued, fully paid, nonassessable, and will be
delivered free and clear of all claims, liens, encumbrance and security
interests and not subject to any preemptive rights.
(c) Issuer has taken all action (including if required redeeming
all of the Rights or amending or terminating the Rights Agreement) so
that the entering into of this Agreement, the acquisition of shares of
Common Stock hereunder and the other transactions contemplated hereby do
not and will not result in the grant of any rights to any person under
the Advest Rights Agreement or enable or require the Rights to be
exercised, distributed or triggered and so that no "fair price",
"moratorium" "control share acquisition" or other form of antitakeover
statute or regulation is applicable to the entering of this Agreement,
the acquisition of shares of Common Stock hereunder and the other
transactions contemplated hereby.
12. Grantee hereby represents and warrants to Issuer that:
(a) Grantee has all requisite corporate power and authority to
enter into this Agreement and, subject to any approvals or consents
referred to herein, to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Grantee. This Agreement has
been duly executed and delivered by Grantee.
(b) The Option is not being, and any shares of Common Stock or
other securities acquired by Grantee upon exercise of the Option will
not be, acquired with a view to the public distribution thereof and will
not be transferred or otherwise disposed of except in a transaction
registered or exempt from registration under the 1933 Act.
13. Neither of the parties hereto may assign any of its rights or
obligations under this Option Agreement or the Option created hereunder to
any other person, without the express prior written consent of the other
party, except that in the event a Subsequent Triggering Event shall have
occurred prior to an Exercise Termination Event, Grantee, subject to the
express provisions hereof, may assign in whole or in part its rights and
obligations hereunder within 90 days following such Subsequent Triggering
Event (or such later period as provided in Section 10); provided, however,
that until the date 15 days following the date on which the OTS approves an
application by Grantee under the HOLA to acquire the shares of Common Stock
subject to the Option, Grantee may not assign its rights under the Option
except in (i) a widely dispersed public distribution, (ii) a private
placement in which no one party acquires the right to purchase in excess of
2% of the voting shares of Issuer, (iii) an assignment to a single party
(e.g., a broker
B-10
<PAGE> 134
or investment banker) for the purpose of conducting a widely dispersed
public distribution on Grantee's behalf, or (iv) any other manner approved
by the OTS.
14. Each of Grantee and Issuer will use its best efforts to make all
filings with, and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions contemplated
by this Agreement, including without limitation making application to list
the shares of Common Stock issuable hereunder on the New York Stock
Exchange upon official notice of issuance and applying to the OTS and the
Commissioner of Banking for the State of Connecticut under the Home Owner's
Loan Act and the Connecticut General Statute, and to the NASD, for approval
to acquire the shares issuable hereunder, but Grantee shall not be
obligated to apply for such approval to acquire the shares of Common Stock
issuable hereunder until such time, if ever, as it deems appropriate to do
so.
15. (a) Grantee in its sole discretion may, at any time during which
Issuer would be required to repurchase the Option or any Option Shares
pursuant to Section 7, surrender the Option (together with any Option
Shares issued to and then owned by the Holder) to Issuer in exchange for a
cash payment equal to the Surrender Price (as hereinafter defined);
provided, however, that Grantee may not exercise its rights pursuant to
this Section 15 if Issuer has previously repurchased the Option (or any
portion thereof) or any Option Shares pursuant to Section 7. The "Surrender
Price" shall be equal to (i) $10,000,000, plus (ii) if applicable, the
aggregate purchase price previously paid pursuant hereto by Grantee with
respect to any Option Shares, minus (iii) if applicable, the excess of (A)
the net cash, if any, received by Grantee pursuant to the arm's-length sale
of Option Shares (or any other securities into which such Option Shares
were converted or exchanged) to any party not affiliated with Grantee, over
(B) the purchase price paid by Grantee with respect to such Option Shares.
The Surrender Price shall be payable in immediately available funds to such
account as shall be designated by Grantee.
(b) Grantee may exercise its right to surrender the Option and any
Option Shares pursuant to this Section 15 by surrendering for such purchase
to Issuer, at its principal office, a copy of this Agreement, together with
certificates for Option Shares, if any, accompanied by a written notice
stating (i) that Grantee elects to surrender the Option and Option Shares,
if any, in accordance with the provisions of this Section 15 and (ii) the
Surrender Price. Within two business days after the surrender of the Option
and the Option Shares, if applicable, Issuer shall deliver or cause to be
delivered to Grantee the Surrender Price.
(c) To the extent that the Issuer is prohibited under applicable law
or regulation from paying the Surrender Price to Grantee in full, Issuer
shall immediately so notify Grantee and thereafter deliver, or cause to be
delivered, from time to time, to Grantee, that portion of the Surrender
Price that Issuer is not or no longer prohibited from paying, within two
business days after the date on which Issuer is no longer so prohibited;
provided, however, that if Issuer at any time after delivery of a notice of
Surrender pursuant to Section 15(b) is prohibited under applicable law or
regulation from paying to Grantee the Surrender Price in full, (i) Issuer
shall (A) use its best efforts to obtain all required regulatory and legal
approvals and to file any required notices as promptly as practicable in
order to make such payments, (B) within two business days of the submission
or receipt of any documents relating to any such regulatory and legal
approvals, provide Grantee with copies of the same, and (C) keep Grantee
advised of both the status of any such request for regulatory and legal
approvals and any discussions with any relevant regulatory or other third
party reasonably related to the same, and (ii) Grantee may revoke such
notice of surrender by delivery of a notice of revocation and the Exercise
Termination Event shall be extended to a date six months from the date on
which the Exercise Termination Event would have occurred if not for the
provisions of this Section 15(c) (during which period Grantee may exercise
any of its rights hereunder, including any and all rights pursuant to this
Section 15).
(d) Grantee shall have rights substantially identical to those set
forth in paragraphs (a), (b) and (c) of this Section 15 with respect to the
Substitute Option and the Substitute Option Issuer during any period in
which the Substitute Option Issuer would be required to repurchase the
Substitute Option pursuant to Section 9.
B-11
<PAGE> 135
16. Notwithstanding any other provision of this Agreement, in no event
shall Grantee's Total Profit (as hereinafter defined) exceed $10,000,000
and, if it otherwise would exceed such amount, Grantee, at its sole
election, shall either (a) deliver to Issuer for cancellation Option Shares
previously purchased by Grantee, (b) pay cash or other consideration to
Issuer, (c) reduce the cash payable to Grantee in connection with Issuer's
repurchase of the Option or Option Shares pursuant to Section 7(a) hereof
or surrender of the Option and Option Shares pursuant to Section 15 hereof,
or (d) undertake any combination thereof, so that Grantee's Total Profit
shall not exceed $10,000,000 after taking into account the foregoing
actions.
Notwithstanding any other provision of this Agreement, this Option may
not be exercised for a number of shares of Common Stock as would, as of the
date of the written notice of the exercise of the Option, result in a
Notional Total Profit (as defined below) of more than $10,000,000 and, if
exercise of the Option otherwise would exceed such amount, Grantee, at its
discretion, may increase the Option Price for that number of shares of
Common Stock set forth in the aforesaid notice of exercise so that the
Notional Total Profit shall not exceed $10,000,000; provided, that nothing
in this sentence shall restrict any exercise of the Option permitted hereby
on any subsequent date at the Option Price set forth in Section 1(a)
hereof.
As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount of cash received by
Grantee pursuant to Section 7.5 of the Merger Agreement and in connection
with Issuer's repurchase of the Option or Option Shares pursuant to Section
7(a) hereof and surrender of the Option and Option Shares pursuant to
Section 15 hereof, (less Grantee's purchase price for such Option Shares
(unless already taken into account for purposes of calculation of the
Surrender Price)) and (ii) (x) the net cash amounts received by Grantee
pursuant to the sale of Option Shares (or any other securities into which
such Option Shares are converted or exchanged) to any unaffiliated party
(unless already taken into account for purposes of calculation of the
Surrender Price), less (y) Grantee's purchase price for such Option Shares
(unless already taken into account for purposes of calculation of the
Surrender Price).
As used herein, the term "Notional Total Profit" with respect to any
number of shares of Common Stock as to which Grantee may propose to
exercise this Option shall be the Total Profit determined as of the date of
the written notice of the exercise of the Option assuming that this Option
were exercised on such date for such number of shares of Common Stock and
assuming that such shares of Common Stock, together with all other shares
of Common Stock held by Grantee and its affiliates as of such date, were
sold for cash at the closing market price for the Common Stock as of the
close of business on the preceding trading day (less customary brokerage
commissions).
17. The parties hereto acknowledge that damages would be an inadequate
remedy for a breach of this Agreement by either party hereto and that the
obligations of the parties hereto shall be enforceable by either party
hereto through injunctive or other equitable relief.
18. If any term, provision, covenant or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder
of the terms, provisions and covenants and restrictions contained in this
Agreement shall remain in full force and effect, and shall in no way be
affected, impaired or invalidated. If for any reason such court or
regulatory agency determines that the Holder is not permitted to acquire,
or Issuer or Substitute Option Issuer, as the case may be, is not permitted
to repurchase pursuant to Section 7 or Section 9, as the case may be, the
full number of shares of Common Stock provided in Section 1(a) hereof (as
adjusted pursuant to Section 1(b) or 5 hereof), or Issuer or Substitute
Option Issuer is not permitted to pay the full Surrender Price, it is the
express intention of Issuer (which shall be binding on the Substitute
Option Issuer) to allow the Holder to acquire or to require Issuer or the
Substitute Option Issuer, as the case may be, to repurchase such lesser
number of shares, or to pay such portion of the Surrender Price, as may be
permissible, without any amendment or modification hereof.
19. The right to exercise the Option granted pursuant to this
Agreement shall terminate at the earlier of (i) the Effective Time (as
defined in the Merger Agreement) and (ii) 90 days after the date
B-12
<PAGE> 136
that is the first anniversary of the date the Merger Agreement was
terminated pursuant to the terms thereof (or, if later, 90 days after
Parent becomes entitled to a fee pursuant to Section 7.5(a) (i) of the
Merger Agreement) (the date referred to in clause (ii) being hereinafter
referred to as the "Option Termination Date"), provided that, the Option
Termination Date shall be extended as provided in Section 10 hereof.
20. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person,
by cable, telegram, telecopy or telex, or by registered or certified mail
(postage prepaid, return receipt requested) at the respective addresses of
the parties set forth in the Merger Agreement.
21. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof
(except to the extent that mandatory provisions of federal law apply).
22. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original, but all of which shall
constitute one and the same agreement.
23. Except as otherwise expressly provided herein, each of the parties
hereto shall bear and pay all costs and expenses incurred by it or on its
behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.
24. Except as otherwise expressly provided herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties
with respect to the transactions contemplated hereunder and supersedes all
prior arrangements or understandings with respect thereof, written or oral.
The terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement, expressed or implied, is
intended to confer upon any party, other than the parties hereto, and their
respective successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided herein.
25. Capitalized terms used in this Agreement and not defined herein
shall have the meanings assigned thereto in the Merger Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
THE ADVEST GROUP, INC.
By: /s/ GRANT W. KURTZ
------------------------------------
Name: Grant W. Kurtz
Title: President & Chief Executive
Officer
THE MONY GROUP, INC.
By: /s/ MICHAEL I. ROTH
------------------------------------
Name: Michael I. Roth
Title: Chairman & Chief Executive
Officer
B-13
<PAGE> 137
ANNEX C
SUPPORT AGREEMENT
SUPPORT AGREEMENT (this "Agreement"), dated as of August 23, 2000, between
The MONY Group Inc., a Delaware corporation ("Parent"), and the undersigned
shareholders (the "Shareholders," each a "Shareholder") of The Advest Group,
Inc., a Delaware corporation (the "Company").
WHEREAS, as of the date hereof, each of the Shareholders own (either
beneficially or of record) that number of shares of common stock, par value $.01
per share, of the Company, including all associated preferred share purchase
rights ("Company Common Stock"), as set forth opposite such Shareholder's name
on Schedule A attached hereto (all such shares and any shares of Common Stock
hereafter acquired by the Shareholders prior to the termination of this
Agreement being referred to herein as the "Shares");
WHEREAS, concurrently herewith, Parent, MONY Acquisition Corp., a Delaware
corporation ("Merger Sub") and the Company are entering into an Agreement and
Plan of Merger (as such Agreement may hereafter be amended from time to time,
the "Merger Agreement"), pursuant to which, upon the terms and subject to the
conditions thereof, the Company shall be merged with and into Merger Sub, and
the separate corporate existence of the Company shall thereupon cease (the
"Merger"). Merger Sub shall be the Surviving Corporation (as defined in the
Merger Agreement) in the Merger, and will be a wholly owned subsidiary of
Parent; and
WHEREAS, as a condition to the willingness of Parent to enter into the
Merger Agreement, Parent has requested that the Shareholders agree, and, in
order to induce Parent to enter into the Merger Agreement, the Shareholders have
agreed, to the terms and provisions hereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, the parties hereto, intending to be legally bound, hereby
agree as follows:
ARTICLE I
1.1 Voting of Shares. Until the termination of this Agreement in
accordance with Section 4.12 hereof, each Shareholder hereby agrees as follows:
(a) The Shareholder shall, including by initiating a written consent
solicitation if requested by Parent, vote (or cause to be voted) the Shares
in favor of the Merger, the approval and adoption of the Merger Agreement
and the approval of the other transactions contemplated by the Merger
Agreement and the Option Agreement (as defined in the Merger Agreement), at
any meeting of shareholders of the Company called to vote upon such matters
or at any adjournment thereof or in any other circumstances upon which a
vote, consent or other approval (including by written consent) with respect
to such matters is sought (the "Special Meeting").
(b) The Shareholder shall not take any action to revoke or terminate,
or permit to be revoked or terminated, any trust for which the Shareholder
serves as trustee, or take any other action which would restrict, limit or
frustrate the Shareholder's right to vote the Shares, including on behalf
of such trust, in accordance with this Agreement.
1.2 Grant of Irrevocable Proxy; Appointment of Proxy. (a) The Shareholder
hereby irrevocably grants to, and appoints, Parent and Michael I. Roth, Richard
Daddario and Kenneth M. Levine, in their respective capacities as officers of
Parent, and any individual who shall hereafter succeed to any such office of
Parent, and each of them individually, the Shareholder's proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of the Shareholder, to vote the Shares, or grant a consent or approval
in respect of the Shares, in favor of adoption of the Merger Agreement.
(b) The Shareholder represents that any proxies heretofore given in respect
of the Shares are not irrevocable, and that all such proxies are hereby revoked.
The Shareholder hereby affirms that the irrevocable
C-1
<PAGE> 138
proxy set forth in this Section 1.2 is given in connection with the execution of
the Merger Agreement, and that such irrevocable proxy is given to secure the
performance of the duties of the Shareholder under this Agreement. The
Shareholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. The Shareholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Such irrevocable proxy is executed and intended to
be irrevocable in accordance with the provisions of Section 212(e) of the
Delaware General Corporation Law.
1.3 Restrictions on Transfer and Conversion. (a) Until the close of
business on the date of the Special Meeting, the Shareholder will not (i) sell,
assign, transfer, pledge or otherwise dispose of or transfer any of its Shares,
(ii) deposit its Shares into a voting trust or enter into a voting agreement or
arrangement with respect to such Shares or grant any proxy with respect thereto,
or (iii) enter into any contract, option or other arrangement or undertaking
with respect to the direct or indirect acquisition or sale, assignment, transfer
or other disposition of any Shares; provided, however, that the Shareholder may
make bona fide gifts of Shares, and may make transfers of Shares into one or
more trusts for estate or tax planning purposes, so long as the recipient of
such gift, or such trust, as applicable, enters into an agreement with Parent
substantially identical to this Agreement.
(b) If, at the time the Merger Agreement is submitted for approval to the
shareholders of the Company, the Shareholder is an "affiliate" of the Company
for purposes of Rule 145 under the Securities Act of 1933, as amended, the
Shareholder shall deliver to Parent on or prior to the Closing Date (as defined
in the Merger Agreement) a written agreement substantially in the form attached
as Exhibit A to the Merger Agreement.
(c) The Shareholder agrees to tender to Merger Sub, within 10 business days
after the date hereof (or, in the event the Shares are acquired subsequent to
the date hereof within 10 business days after the date of such acquisition), any
and all certificates representing the Shares in order that Merger Sub may
inscribe upon such certificates a legend in accordance with subsection (d)
below, provided, however, that no such legend shall be required to be inscribed
if (i) the Shareholder holds all of the Shares in one brokerage account at one
brokerage firm (the "Firm") and (ii) the Shareholder and the Firm acknowledge
and agree in writing with the Parent that (A) the foregoing clause (i)
accurately reflects the holding of all of the Shares and (B) the Shares will not
be transferred, and the Shareholder and the Firm will take all actions to ensure
that the Shares will not be transferred, in violation of this Agreement.
(d) The Company will inscribe upon any Certificate (as defined in the
Merger Agreement) representing the Shares tendered by a Shareholder for such
purpose the following legend: THE SHARES OF COMMON STOCK, PAR VALUE $0.01 PER
SHARE, OF THE COMPANY REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A SUPPORT
AGREEMENT DATED AS OF AUGUST 23, 2000, AND ARE SUBJECT TO THE TERMS THEREOF.
COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT THE PRINCIPAL EXECUTIVE OFFICES OF
THE COMPANY.
ARTICLE II
Each Shareholder represents and warrants to Parent as follows:
2.1 Authority. The Shareholder has all requisite power and authority
to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Shareholder and constitutes a valid and binding obligation
of the Shareholder enforceable against the Shareholder in accordance with
its terms. If the Shareholder is a natural person and is married, and the
Shares constitute community property or otherwise require spousal or other
approval for this Agreement to be legal, valid and binding, this Agreement
has been duly authorized, executed and delivered by, and constitutes a
valid and binding agreement of, the Shareholder's spouse, enforceable
against such spouse in accordance with its terms. No trust of which the
Shareholder is a trustee requires the consent of any beneficiary to the
execution and delivery of this Agreement or to the consummation of the
transactions contemplated hereby.
C-2
<PAGE> 139
2.2 The Shares. The Shareholder is the record and beneficial owner of
or is trustee of a trust that is the record holder of, and whose
beneficiaries are the beneficial owners of, and has good and marketable
title to, the Shares, free and clear of any liens, claims, encumbrances or
security interests whatsoever. The Shareholder does not own, of record or
beneficially, any shares of capital stock of the Company other than as set
forth on Schedule A hereto. The Shareholder has the sole right to vote the
Shares, and none of such Shares is subject to any voting trust or other
agreement, arrangement or restriction with respect to the voting of such
Shares, except as contemplated by this Agreement.
2.3 No Violation. Neither the execution and delivery by the
Shareholder of this Agreement nor the consummation by the Shareholder of
the transactions contemplated hereby in accordance with the terms hereof,
will: (i) conflict with, or result in a breach of any provision of the
Certificate of Incorporation or Bylaws (or other comparable organizational
documents, if any) of the Shareholder, if applicable; (ii) violate,
conflict with, result in a breach of any provision of, constitute a default
(or an event which, with notice or lapse of time or both, would constitute
a default) under, any trust agreement, loan or credit agreement, bond,
note, mortgage, indenture, lease or other contract, agreement, obligation,
commitment, arrangement, understanding, instrument, permit, concession,
franchise, license, statute, law, ordinance, rule, regulation, judgment,
order, notice or decree, applicable to the Shareholder or to the
Shareholder's property or assets, including the Shares; (iii) other than
the expiration or termination of the waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
informational filings with the Securities and Exchange Commission, require
any filing with, or permit, authorization, consent or approval of, any
Federal, state or local government or any court, tribunal, administrative
agency or commission or other governmental and regulatory authority or
agency, domestic or foreign, or (iv) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Shareholder or any of
the Shareholder's properties or assets, including the Shares.
ARTICLE III
3.1 No Solicitation. Prior to the Effective Time (as defined in the Merger
Agreement), (a) no Shareholder in its capacity as a shareholder of the Company
shall, or shall permit any agents and representatives (including, without
limitation, any investment banker, attorney or accountant retained by it) to,
initiate, solicit or encourage, directly or indirectly, any inquiries or the
making or implementation of any proposal or offer (including, without
limitation, any proposal or offer to the Company's shareholders) with respect to
an Alternative Proposal (as defined in the Merger Agreement) or with respect to
any tender offer for or solicitation of proxies with respect to any shares of
Company Common Stock, or engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any person
relating to an Alternative Proposal or relating to any tender offer for or
solicitation of proxies with respect to any shares of Company Common Stock, or
otherwise facilitate any effort or attempt to make or implement an Alternative
Proposal or any tender offer for or solicitation of proxies with respect to any
shares of Company Common Stock and (b) each Shareholder will notify Parent
immediately in writing if any such inquiries or proposals are received by, any
such information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, that Shareholder in that Shareholder's
capacity as a shareholder of the Company.
ARTICLE IV
4.1 Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
as of the date delivered, mailed or transmitted, and shall be effective upon
receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be
C-3
<PAGE> 140
specified by like changes of address) or sent by electronic transmission to the
telecopier number specified below:
If to Parent:
The MONY Group Inc.
1740 Broadway
New York, New York 10017
Attention: General Counsel
with a copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019-6092
Attention: Jonathan L. Freedman, Esq.
If to the Shareholders, to the address indicated on Schedule A attached
hereto for each respective Shareholder.
with copies to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019-6150
Attention: Craig M. Wasserman, Esq.
Telecopy: (212) 403-2232
and:
Day, Berry & Howard LLP
Cityplace I
Hartford, Connecticut 06103-3499
Attention: William H. Cuddy, Esq.
Telecopy: (860) 275-0343
4.2 Certain Events. Each Shareholder agrees that this Agreement and the
obligations hereunder shall attach to the Shares and shall be binding upon any
person or entity to which legal or beneficial ownership of such Shares shall
pass, whether by operation of law or otherwise, including such Shareholder's
heirs, guardians, administrators or successors. In the event of any stock split,
stock dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Company Common Stock, or the
acquisition of additional shares of Company Common Stock or other voting
securities of the Company by any Shareholder, the number of Shares listed herein
shall be adjusted appropriately and this Agreement and the obligations hereunder
shall attach to any additional shares of Company Common Stock or other voting
securities of the Company issued to or acquired by such Shareholder.
4.3 Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that Parent may assign its rights
hereunder to any of its direct or indirect wholly-owned subsidiaries, including
Merger Sub. Subject to the preceding sentence, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
4.4 Entire Agreement. This Agreement constitutes the entire agreement of
the parties and supersedes all prior agreements and undertakings, both written
and oral, between the parties, or any of them, with respect to the subject
matter hereof.
C-4
<PAGE> 141
4.5 Amendments. This Agreement may not be amended except by an instrument
in writing signed by each of the parties hereto.
4.6 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without giving effect to
principles of conflicts of laws.
4.7 Enforcement. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity. In addition, each of the parties hereto waives
to the fullest extent permitted by applicable law any right to trial by jury
with respect to any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby. If Parent should
institute an action or proceeding seeking specific enforcement of the provisions
hereof, then each Shareholder hereby waives the claim or defense that Parent has
an adequate remedy at law and hereby agrees not to assert in any such action or
proceeding the claim or defense that such a remedy at law exists. Each
Shareholder further agrees to waive any requirements for the securing or posting
of any bond in connection with obtaining any such equitable relief.
4.8 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable law in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
4.9 Public Announcements. Except as required by law, no Shareholder shall
issue any press release or other public statement with respect to the
transactions contemplated by this Agreement and the Merger Agreement without the
prior written consent of Parent.
4.10 Headings. The headings contained in this Agreement are for reference
only and shall not affect in any way the meaning or interpretation of this
Agreement.
4.11 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which, taken
together, shall constitute one and the same agreement.
4.12 Termination. This Agreement shall terminate automatically immediately
following the earlier of (i) termination of the Merger Agreement and (ii) the
closing of the Merger.
4.13 Shareholder Capacity. As of the date of this Agreement, certain of
the Shareholders are officers or directors of the Company. None of the
Shareholders makes any agreement or understanding herein in his or her capacity
as a director or officer of the Company. Each Shareholder signs solely in his or
her capacity as the record holder and beneficial owner of, or the trustee of a
trust whose beneficiaries are the beneficial owners of, such Shareholder's
securities and nothing herein shall limit or affect any actions taken by a
Shareholder in his or her capacity as an officer or director of the Company to
the extent specifically permitted by the Merger Agreement.
C-5
<PAGE> 142
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE MONY GROUP, INC.
By: /s/ MICHAEL I. ROTH
------------------------------------
Name: Michael I. Roth
Title: Chairman & Chief Executive
Officer
SHAREHOLDERS
By: /s/ PETER R. KELLOGG
------------------------------------
Name: Peter R. Kellogg
By: /s/ ALLEN WEINTRAUB
------------------------------------
Name: Allen Weintraub
By: /s/ GRANT W. KURTZ
------------------------------------
Name: Grant W. Kurtz
By: /s/ GEORGE A. BOUJOUKOS
------------------------------------
Name: George A. Boujoukos
C-6
<PAGE> 143
ANNEX D
[GOLDMAN SACHS LETTERHEAD]
PERSONAL AND CONFIDENTIAL
August 23, 2000
Board of Directors
The Advest Group, Inc.
90 State House Square
Hartford, CT 06193
Madame and Gentlemen:
You have requested our opinion as to the fairness from a financial point of
view to the holders (other than The MONY Group, Inc. ("Parent") or any of its
subsidiaries) of the outstanding shares of Common Stock, par value $0.01 per
share (the "Shares"), of The Advest Group, Inc. (the "Company") of the
Consideration (as defined below) to be received for Shares, in the aggregate,
pursuant to the Agreement and Plan of Merger (the "Agreement"), dated as of
August 23, 2000, among Parent, MONY Acquisition Corp., a wholly-owned subsidiary
of Parent, and the Company. Pursuant to the Agreement, the Company will merge
with and into MONY Acquisition Corp. (the "Merger"), and each Share (other than
those Shares held in treasury by the Company, those Shares owned by Parent or
any of its subsidiaries and Dissenting Shares (as defined in the Agreement) will
be converted into either, at the election of the applicable holder, (i) the
right to receive an amount in cash equal to the product of the average closing
price per share of Common Stock, par value $0.01 per share, of the Parent
("Parent Common Stock") on the New York Stock Exchange for the ten consecutive
trading days ending on the fifth trading day prior to the Closing Date (as
defined in the Agreement) and the Exchange Ratio (as defined and calculated
pursuant to Annex A of the Agreement), without interest or (ii) a number of
shares of Parent Common Stock equal to the Exchange Ratio (together, the
"Corporation"), provided that the aggregate number of Shares to be exchanged for
Parent Common Stock will be equal as nearly as practicable 49.9% of the total
number of Shares outstanding immediately prior to the closing of the Merger, as
to which adjustment (and the related procedures and limitations) we are
expressing no opinion.
Goldman, Sachs & Co., as part of its investment banking business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, competitive
biddings, secondary distributions of listed and unlisted securities, private
placements and valuations for estate, corporate and other purposes. We are
familiar with the Company having provided certain investment banking services to
the Company, including having acted as its financial advisor in connection with,
and having participated in certain of the negotiations leading to, the
Agreement. We also have provided certain investment banking services to Parent
from time to time, including having acted as financial advisor to The Mutual
Life Insurance Company of New York in connection with its demutualization, lead
manager of Parent's initial public offering of 11,250,000 shares of Parent
Common Stock in November 1998, and lead manager in MONY Insurance Company's $300
million offering of 8.35% senior notes due 2010 in March 2000. Goldman, Sachs &
Co. may provide investment banking services to Parent and its subsidiaries in
the future. Goldman, Sachs & Co. provides a full range of financial advisory and
securities services and, in the course of its normal trading activities, does
from time to time effect transactions and hold securities including derivative
securities of the Company and/or Parent for its own account and for the accounts
of customers. As of the date hereof, Goldman, Sachs & Co. and its affiliates
held a long position of 1,800 shares of Parent Common Stock warrants to purchase
3,555,811 shares of Parent Common Stock, and $265,000 aggregate principal amount
of MONY Insurance Company's 8.35% senior notes due 2010.
D-1
<PAGE> 144
The Advest Group, Inc.
August 23, 2000
Page 2
In connection with this opinion, we have reviewed, among other things, the
Agreement; Annual Reports to Stockholders of the Company on Form 10-K of the
Company for the five fiscal years ended September 30, 1999 and Annual Reports to
Stockholders of Parent on Form 10-K of the Parent for the two years ended
December 31, 1999; certain interim reports to stockholders of the Company and
certain interim reports to stockholders of Parent; Quarterly Reports on Form
10-Q of the Company and Quarterly Reports on Form 10-Q of Parent; and certain
internal financial analyses and forecasts for the Company prepared by the
management of the Company, as well as certain cost savings and operating
synergies projected by the management of Parent expected to result from the
transaction contemplated by the Agreement. We also have held discussions with
members of the senior management of the Company and Parent regarding their
assessment of the strategic rationale for, and the potential benefits of, the
Merger and the past and current business operations, financial condition and
future prospects of their respective companies. In addition, we have reviewed
the reported price and trading activity for the Shares and the Parent Common
Stock, compared certain financial and stock market information for the Company
and the Parent with similar information for certain other companies the
securities of which are publicly traded, reviewed the financial terms of certain
recent business combinations in the broker/dealer industry specifically and in
other industries generally and performed such other studies and analyses as we
considered appropriate.
We have relied upon the accuracy and completeness of all of the financial
and other information discussed with or reviewed by us and have assumed such
accuracy and completeness for purposes of rendering this opinion. As you are
aware, Parent did not make available to us its projections of their expected
future financial performance. Accordingly, our review of such future performance
was limited to discussions with members of the senior management of Parent
regarding publicly available research analyst estimates. We have not made an
independent evaluation or appraisal of the assets and liabilities of the Company
or Parent or any or their subsidiaries (including any derivative or off balance
sheet assets or liabilities of the Company or Parent or any of their
subsidiaries) and we have not been furnished with any such evaluation or
appraisal. We are not actuaries and our services did not include actuarial
determinations or evaluations by us with respect to the insurance subsidiaries
of Parent or an attempt to evaluate actuarial assumptions with respect to the
insurance subsidiaries of Parent. We have also assumed that all material
governmental, regulatory or other consents and approvals necessary for the
consummation of the transaction contemplated by the Agreement will be obtained
without any adverse effect on the Company, Parent or on the contemplated
benefits of the transaction. In addition, in connection with our evaluation of
the Agreement, we were not requested to solicit, and did not solicit, interest
from other parties with respect to an acquisition of or other business
combination with the Company.
Our advisory services and the opinion expressed herein are provided for the
information and assistance of the Board of Directors of the Company in
connection with its consideration of the transaction contemplated by the
Agreement and such opinion does not constitute a recommendation as to how any
holder of Shares should vote with respect to such transaction or the form of
consideration any holder of Shares should request to receive in such
transaction.
Based upon and subject to the foregoing and based upon such other matters
as we consider relevant, it is our opinion that as of the date hereof the
Consideration to be received by the holders of Shares, in the aggregate, is fair
from a financial point of view to the holders of Shares (other than Parent or
any of its subsidiaries) receiving such Consideration.
Very truly yours,
/s/ Goldman, Sachs & Co.
D-2
<PAGE> 145
ANNEX E
SECTION 262 OF THE
DELAWARE GENERAL CORPORATION LAW
APPRAISAL RIGHTS. (a) Any stockholder of a corporation of this State who
holds shares of stock on the date of the making of a demand pursuant to
subsection (d) of this section with respect to such shares, who continuously
holds such shares through the effective date of the merger or consolidation, who
has otherwise complied with subsection (d) of this section and who has neither
voted in favor of the merger or consolidation nor consented thereto in writing
pursuant to sec.228 of this title shall be entitled to an appraisal by the Court
of Chancery of the fair value of the stockholder's shares of stock under the
circumstances described in subsections (b) and (c) of this section. As used in
this section, the word "stockholder" means a holder of record of stock in a
stock corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinarily meant by those
words and also membership or membership interest of a member of a nonstock
corporation; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in one or more
shares, or fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to sec.251 (other than a merger effected pursuant to
sec.251(g) of this title), sec.252, sec.254, sec.257, sec.258, sec.263 or
sec.264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of sec.251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to
sections 251, 252, 254, 257, 258, 263 and 264 of this title to accept for
such stock anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under sec.253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
E-1
<PAGE> 146
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsection (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of such
stockholder's shares shall deliver to the corporation, before the taking of
the vote on the merger or consolidation, a written demand for appraisal of
such stockholder's shares. Such demand will be sufficient if it reasonably
informs the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such stockholder's
shares. A proxy or vote against the merger or consolidation shall not
constitute such a demand. A stockholder electing to take such action must
do so by a separate written demand as herein provided. Within 10 days after
the effective date of such merger or consolidation, the surviving or
resulting corporation shall notify each stockholder of each constituent
corporation who has complied with this subsection and has not voted in
favor of or consented to the merger or consolidation of the date that the
merger or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to sec.228 or
sec.253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within 20 days after the date of mailing
of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date that shall be
not more than 10 days prior to the date the notice is given, provided, that
if the notice is given on or after the effective date of the merger or
consolidation, the record date shall be such effective date. If no record
date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the
day on which the notice is given.
E-2
<PAGE> 147
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw such stockholder's demand for appraisal and to accept the terms offered
upon the merger or consolidation. Within 120 days after the effective date of
the merger or consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) hereof, upon written request, shall be
entitled to receive from the corporation surviving the merger or resulting from
the consolidation a statement setting forth the aggregate number of shares not
voted in favor of the merger or consolidation and with respect to which demands
for appraisal have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the stockholder within 10 days
after such stockholder's written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by publication
shall be approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted
such stockholder's certificates of stock to the Register in Chancery, if such is
required, may participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal rights under this
section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
E-3
<PAGE> 148
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the effective date of the merger or consolidation); provided, however, that
if no petition for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder shall deliver to the
surviving or resulting corporation a written withdrawal of such stockholder's
demand for an appraisal and an acceptance of the merger or consolidation, either
within 60 days after the effective date of the merger or consolidation as
provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court
of Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court deems
just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
E-4
<PAGE> 149
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Directors and officers of MONY may be indemnified against liabilities,
fines, penalties and claims imposed upon or asserted against them as provided in
the Delaware General Corporation Law and MONY's amended and restated certificate
of incorporation. Such indemnification covers all costs and expenses incurred by
a director or officer. The board of directors of MONY, by a majority vote of a
quorum of disinterested directors or, under specified circumstances, independent
counsel appointed by the board of directors, must determine that the director or
officer seeking indemnification was not guilty of willful misconduct or a
knowing violation of the criminal law. In addition, the Delaware General
Corporation Law and MONY's amended and restated certificate of incorporation
may, under specified circumstances, eliminate the liability of directors and
officers in a stockholder or derivative proceeding.
If the person involved is not a director or officer of MONY, the board of
directors may cause MONY to indemnify, to the same extent allowed for directors
and officers of MONY, such person who was or is a party to a proceeding, by
reason of the fact that he or she is or was an employee or agent of MONY, or is
or was serving at the request of MONY as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise.
MONY has in force and effect a policy insuring the directors and officers
of MONY against losses which they or any of them shall become legally obligated
to pay for by reason of any actual or alleged error or misstatement or
misleading statement or act or omission or neglect or breach of duty by the
directors and officers in the discharge of their duties, individually or
collectively, or any matter claimed against them solely by reason of their being
directors or officers, such coverage being limited by the specific terms and
provisions of the insurance policy.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<C> <S>
2.1 Agreement and Plan of Merger, dated as of August 23,
2000, by and among The MONY Group Inc., MONY
Acquisition Corp. and The Advest Group, Inc. (attached
as Annex A to the Proxy Statement/Prospectus included
in this Registration Statement).
2.2 Stock Option Agreement, dated as of August 23, 2000,
between The MONY Group Inc. and The Advest Group, Inc.
(attached as Annex B to the Proxy Statement/Prospectus
included in this Registration Statement).
2.3 Support Agreement, dated as of August 23, 2000, by and
among The MONY Group Inc., Peter R. Kellogg, Allen
Weintraub, Grant W. Kurtz and George A. Boujoukos
(attached as Annex C to the Proxy Statement/Prospectus
included in this Registration Statement).
3.1 Amended and Restated Certificate of Incorporation of
The MONY Group Inc.**
3.2 Amended and Restated Bylaws of The MONY Group Inc.**
5.1 Opinion of Dewey Ballantine LLP as to the legality of
the securities.***
8.1 Tax Opinion of Wachtell, Lipton, Rosen & Katz.***
8.2 Tax Opinion of Day, Berry & Howard LLP.***
8.3 Tax Opinion of Norman Sinrich, Esq.***
23.1 Consent of Goldman, Sachs & Co.***
23.2 Consent of PricewaterhouseCoopers LLP, New York, New
York.***
23.3 Consent of PricewaterhouseCoopers LLP, Hartford,
Connecticut.***
23.4 Consent of Dewey Ballantine LLP (included in opinion
filed as Exhibit 5.1).***
23.5 Consent of Wachtell, Lipton, Rosen & Katz (included in
opinion filed as Exhibit 8.1).***
23.6 Consent of Day, Berry & Howard LLP (included in opinion
filed as Exhibit 8.2).***
</TABLE>
II-1
<PAGE> 150
<TABLE>
<S> <C>
23.7 Consent of Norman Sinrich, Esq. (included in opinion filed as Exhibit 8.3).***
99.1 Form of Proxy for Holders of The Advest Group, Inc. Common Stock.***
99.2 Form of Election and Letter of Transmittal.***
</TABLE>
---------------
** Incorporated herein by reference to the corresponding Exhibit Number to
MONY's Registration Statement on Form S-1, Registration Number 333-6385.
*** Filed herewith.
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities 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.
The undersigned Registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through 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), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
The Registrant undertakes that every prospectus (i) that is filed pursuant
to the immediately preceding paragraph, or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Securities Act and is used in connection
with an offering of securities subject to Rule 415, will be filed as a part of
an amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-2
<PAGE> 151
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on the 17th day of October, 2000.
The MONY Group Inc.
By: /s/ MICHAEL ISOR ROTH
------------------------------------
Name: Michael Isor Roth
Title: Chairman of the Board and
Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES
INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ MICHAEL ISOR ROTH Chairman of the Board, Chief October 17, 2000
--------------------------------------------------- Executive Officer and
Michael Isor Roth Director (Principal
Executive Officer)
* Executive Vice President and October 17, 2000
--------------------------------------------------- Chief Financial Officer
Richard Daddario (Principal Financial
Officer)
* Vice President and Controller October 17, 2000
--------------------------------------------------- (Principal Accounting
Larry Cohen Officer)
* President, Chief Operating October 17, 2000
--------------------------------------------------- Officer and Director
Samuel Joseph Foti
* Executive Vice President, October 17, 2000
--------------------------------------------------- Chief Investment Officer and
Kenneth Marc Levine Director
* Director October 17, 2000
---------------------------------------------------
Tom Hans Barrett
* Director October 17, 2000
---------------------------------------------------
David Lincoln Call
* Director October 17, 2000
---------------------------------------------------
Glen Robert Durham
</TABLE>
II-3
<PAGE> 152
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director October 17, 2000
---------------------------------------------------
James Bernard Farley
* Director October 17, 2000
---------------------------------------------------
Robert Holland, Jr.
* Director October 17, 2000
---------------------------------------------------
James Lawrence Johnson
* Director October 17, 2000
---------------------------------------------------
Frederick W. Kanner
* Director October 17, 2000
---------------------------------------------------
Robert Raymond Kiley
* Director October 17, 2000
---------------------------------------------------
John Robert Meyer
Director ----------------
---------------------------------------------------
Jane Cahill Pfeiffer
* Director October 17, 2000
---------------------------------------------------
Thomas Charles Theobald
* The undersigned, pursuant to a Power of Attorney executed by a majority of the Directors and Officers
identified above and filed with the Securities and Exchange Commission, by signing his name hereto,
does hereby sign and execute this Amendment No. 1 to this Registration Statement on behalf of each of
the persons noted above, in the capacities indicated.
October 17, 2000
By: /s/ MICHAEL ISOR ROTH
----------------------------------------------
Michael Isor Roth, Attorney-in-Fact
</TABLE>
II-4
<PAGE> 153
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
2.1 Agreement and Plan of Merger, dated as of August 23,
2000, by and among The MONY Group Inc., MONY
Acquisition Corp. and The Advest Group, Inc. (attached
as Annex A to the Proxy Statement/Prospectus included
in this Registration Statement).
2.2 Stock Option Agreement, dated as of August 23, 2000,
between The MONY Group Inc. and The Advest Group, Inc.
(attached as Annex B to the Proxy Statement/Prospectus
included in this Registration Statement).
2.3 Support Agreement, dated as of August 23, 2000, by and
among The MONY Group Inc., Peter R. Kellogg, Allen
Weintraub, Grant W. Kurtz and George A. Boujoukos
(attached as Annex C to the Proxy Statement/Prospectus
included in this Registration Statement).
3.1 Amended and Restated Certificate of Incorporation of
The MONY Group Inc.**
3.2 Amended and Restated Bylaws of The MONY Group Inc.**
5.1 Opinion of Dewey Ballantine LLP as to the legality of
the securities.***
8.1 Tax Opinion of Wachtell, Lipton, Rosen & Katz.***
8.2 Tax Opinion of Day, Berry & Howard LLP.***
8.3 Tax Opinion of Norman Sinrich, Esq.***
23.1 Consent of Goldman, Sachs & Co.***
23.2 Consent of PricewaterhouseCoopers LLP, New York, New
York.***
23.3 Consent of PricewaterhouseCoopers LLP, Hartford,
Connecticut.***
23.4 Consent of Dewey Ballantine LLP (included in opinion
filed as Exhibit 5.1).***
23.5 Consent of Wachtell, Lipton, Rosen & Katz (included in
opinion filed as Exhibit 8.1).***
23.6 Consent of Day, Berry & Howard LLP (included in opinion
filed as Exhibit 8.2).***
23.7 Consent of Norman Sinrich, Esq. (included in opinion
filed as Exhibit 8.3).***
99.1 Form of Proxy for Holders of The Advest Group, Inc.
Common Stock.***
99.2 Form of Election and Letter of Transmittal.***
</TABLE>
---------------
** Incorporated herein by reference to the corresponding Exhibit Number to
MONY's Registration Statement on Form S-1, Registration Number 333-6385.
*** Filed herewith.
