<PAGE>
ADVEST
Serving Investors Since 1898
THE ADVEST GROUP, INC.
90 State House Square
Hartford, Connecticut 06103
December 22, 1997
Notice of Annual Meeting and Proxy Statement
The Annual Meeting of Stockholders of The Advest Group, Inc. will be held
Thursday, January 29, 1998 at 10:30 a.m. at The Court Room of the Old State
House, 800 Main Street, Hartford, Connecticut 06103, for the following
purposes:
1. To elect three directors;
2. To vote on the stockholder proposal described in the attached
Proxy Statement, if the proposal is presented at the meeting;
and
3. To transact such other business as may properly come before the
meeting or any adjournment.
Record holders of Common Stock as of the close of business on December 10,
1997 are entitled to receive notice of and vote at the meeting or any
adjournment.
Whether or not you plan to attend, please sign and date the enclosed proxy
and return it promptly in the envelope provided. If you are present at the
meeting and would prefer to vote in person rather than by proxy, you would,
of course, have that privilege.
By Order of the Board of Directors
Lee G. Kuckro
Secretary
<PAGE>
ADVEST
Serving Investors Since 1898
Proxy Statement
This Proxy Statement is being furnished on or about December 22, 1997 in
connection with the solicitation of proxies by the Board of Directors of The
Advest Group, Inc. (the "Company") for use at the Annual Meeting of
Stockholders to be held Thursday, January 29, 1998. Stockholders of record
at the close of business on December 10, 1997 are entitled to notice of and
to vote at the meeting. On that record date, 8,680,332 shares of the
Company's Common Stock were outstanding and entitled to vote.
Properly signed proxies will be voted in accordance with the stockholder's
directions. Where specific choices are not indicated, proxies will be voted
for proposal 1 and against proposal 2. If a proxy or a ballot indicates that
a stockholder or nominee abstains from voting or that shares are not to be
voted on a particular proposal, the shares will not be counted as having been
voted on that proposal, and those shares will not be reflected in the final
tally of the votes cast with regard to that proposal. Those shares will be
counted as in attendance at the meeting for purposes of determining a quorum.
Any proxy may be revoked at any time before it is voted by delivery of
written notice to the Secretary of the Company, by a duly executed proxy
bearing a later date, or by attending the meeting and voting in person.
The holders of a majority of the shares entitled to vote at the meeting must
be present in person or by proxy to constitute a quorum. A plurality of the
votes cast for the election of directors by the stockholders attending the
meeting in person or by proxy will elect directors to office (proposal 1).
An affirmative majority of the votes cast at the meeting in person or by
proxy is required for approval of the stockholder proposal (proposal 2). Each
share is entitled to one vote.
All costs of solicitation of proxies will be borne by the Company. In
addition to this solicitation by mail, the Company's directors, officers and
regular employees, without additional remuneration, may solicit proxies by
telephone, telegraph, mail and personal interview. Brokers, custodians and
fiduciaries will be requested to forward proxy soliciting material to the
owners of stock held in their names and the Company will reimburse them for
their out-of-pocket expenses in connection therewith.
Shares owned through the Company's Dividend Reinvestment Plan on the record
date are included in the share ownership figures presented on the enclosed
proxy card. Fractional shares held in the plan have no voting rights.
PROPOSAL 1. ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides for a Board of Directors
divided into three classes whose terms expire at different times. The Board
of Directors has fixed the number of directors at ten and has selected three
nominees for election at the Annual Meeting. The nominees are Ronald E.
Compton, William B. Ellis and Marne Obernauer, Jr. Mr. Ellis is currently a
director and has been nominated for election to an additional three-year term
expiring in 2001. Messrs. Compton and Obernauer are not currently directors
and have each been nominated for a three-year term expiring in 2001.
Information regarding the three nominees and the seven continuing directors
whose terms expire in 1999 or 2000 is set forth below.
The accompanying proxy will be voted for the election of the Board's
nominees, unless contrary instructions are given. If any Board nominee is
unable to serve, which is not anticipated, the persons named as proxies
intend to vote for the remaining Board nominees and, unless the number of
directors is reduced by the Board, for such other person as the Board may
designate. All nominees have indicated that they are willing and able to
serve as directors if elected.
<PAGE>
Nominees for Election to the Board for Three-Year Terms
Expiring at the 2001 Annual Meeting of Stockholders
Ronald E. Compton Nominee for Director
Mr. Compton, age 64, is Chairman and Chief Executive Officer of Aetna Inc.
Since joining Aetna in 1954, Mr. Compton has held various positions of
increasing responsibility. He became President of Aetna in 1988 and held that
position until March 1997. He was appointed Chairman and Chief Executive
Officer of Aetna in 1992. Mr. Compton has served as a Director of Aetna Inc.
since 1996, and of its predecessor, Aetna Life & Casualty Company, since
1988. He is Chairman of the Aetna Foundation, Inc.
William B. Ellis Director since 1996
Mr. Ellis, age 57, is a Senior Fellow at Yale University School of Forestry
and Environmental Studies. Prior to August 1995, he served as Chairman of the
Board of Northeast Utilities and prior to 1993 he served as Chief Executive
Officer of that corporation. Mr. Ellis is a Director of Catalytica Combustion
Systems, Inc., HSB Group, Inc., Massachusetts Mutual Life Insurance Company
and the Greater Hartford Chamber of Commerce. He is also a member of the
Board of the National Museum of Natural History of the Smithsonian
Institution and the Conservation Science Advisory Board of The Nature
Conservancy and is Chairman of the Board of the HIV Action Initiative.
Marne Obernauer, Jr. Nominee for Director
Mr. Obernauer, age 54, has served as Chairman and Chief Executive Officer of
Devon Group, Inc. since 1986. He is also a director of Beverage Distribution
Corp. Mr. Obernauer is a Founding Member and Vice Chairman of the American
Business Conference, Inc. and a Director of the Committee For A Responsible
Federal Budget. He is also a Director of The Associates of The Harvard
Business School and a Trustee of Trinity School.
Members of the Board Continuing in Office
Terms Expire at the 1999 Annual Meeting of Stockholders
Richard G. Dooley Director since 1983
Mr. Dooley, age 68, served as Executive Vice President and Chief Investment
Officer of Massachusetts Mutual Life Insurance Company from 1978 through his
retirement in 1993. He continues to act as consultant to that company. Mr.
Dooley is a Director of HSB Group, Inc., Investment Technology Group, Inc.,
Jefferies Group, Inc., Kimco Realty Corp., and certain Massachusetts Mutual-
sponsored investment companies.
Robert W. Fiondella Director since 1984
Mr. Fiondella, age 55, joined the then Phoenix Mutual Life Insurance Company
in 1969. He served as General Counsel to Phoenix Mutual until his appointment
as Executive Vice President of that corporation in 1983. He is currently the
Chairman, President and Chief Executive Officer of Phoenix Home Life Mutual
Life Insurance Company and a Director of Barnes Group, Inc. Mr. Fiondella
served on the Board from 1984 to 1992 and from January 1995 to the present.
John A. Powers Director since 1992
Mr. Powers, age 71, was employed by Heublein Inc. in 1973, becoming President
and Chief Executive Officer in 1983 and Chairman and Chief Executive Officer
in 1986. He retired in December 1991.
2
<PAGE>
Members of the Board Continuing in Office
Terms Expire at the 2000 Annual Meeting of Stockholders
Sanford Cloud, Jr. Director since 1995
Mr. Cloud, age 53, has been President and Chief Executive Officer of the
National Conference of Christians and Jews since April 1994. Prior to that,
he was an attorney in private practice (from 1993 to 1994) and Vice
President, Corporate Public Involvement for Aetna Life and Casualty Company
and Executive Director of the Aetna Foundation (from 1986 to 1992). Mr. Cloud
is a Director of Yankee Energy Systems, Inc., the Hartford Seminary and the
Juvenile Diabetes Foundation and is Chairman of the Board of the Children's
Fund of Connecticut.
Grant W. Kurtz Director since 1989
Mr. Kurtz, age 55, is President of the Company and Advest, Inc. He joined
the Company in 1985 and became Senior Executive Vice President of the Company
and Advest, Inc. in 1988. In October 1990, Mr. Kurtz became President of
Advest, Inc. and in March 1995 he became President of the Company. Mr. Kurtz
is a member of the Board of Directors of The Connecticut Council on Economic
Education, The Boys & Girls Clubs of Hartford Inc., The Hartford Ballet, The
Connecticut Business and Industry Association and The Connecticut Rivers
Council of Boy Scouts of America.
Barbara L. Pearce Director since 1996
Ms. Pearce, age 43, has been President of H. Pearce Real Estate Company, a
full-service real estate firm located in New Haven, Connecticut, since 1986.
Ms. Pearce is Chairman of the Board of Long Wharf Theatre, Chairman of the
Greater New Haven Regional Leadership Council, and Treasurer of The Foote
School.
Allen Weintraub Director since 1977
Mr. Weintraub, age 62, is Chief Executive Officer and Chairman of the Board
of the Company and Advest, Inc. He joined a predecessor company in 1955 and
became President of the Company in 1989, Chief Executive Officer in 1990 and
Chairman of the Board in December 1993. Mr. Weintraub is a Director of
Phoenix Real Estate Securities, Inc. and Advest Bank.
Members not Continuing
George A. Boujoukos, Executive Vice President of Capital Markets of Advest,
Inc., will be concluding his term of service on the Board effective at the
Annual Meeting. Mr. Boujoukos has served on the Board since 1977.
Anthony A. LaCroix, currently Vice Chairman of the Board of Directors, will
be retiring from the Board effective at the Annual Meeting. Mr. LaCroix
joined the Company in 1964, became a Director in 1977, and served as Chief
Executive Officer from 1979 to 1990 and as Chairman from 1982 through 1993.
The Board wishes to express its sincere gratitude to Messrs. Boujoukos and
LaCroix for their many years of service to the Company.
Committees of the Board of Directors
The Board of Directors has an Executive Committee, an Audit Committee, a
Nominating Committee and a Human Resources Committee.
The Executive Committee, which consists of Messrs. Weintraub (Chairman),
Dooley, Kurtz and LaCroix, has authority to act on behalf of the Board of
Directors between the meetings of the Board except with respect to
fundamental changes and certain other major matters.
3
<PAGE>
The Audit Committee, which consists of Messrs. Powers (Chairman), Cloud,
Dooley and Ellis and Ms. Pearce, is primarily responsible for reviewing the
scope of the audits conducted by the Company's independent accountants,
analyzing the reports and recommendations of the accountants, and reviewing
various internal audit reports.
The Nominating Committee, which consists of Messrs. LaCroix (Chairman),
Dooley, Powers and Weintraub, is responsible for nominating the slate of
directors to be recommended for election to the Company's Board of Directors
at the next-following Annual Stockholders' Meeting. The Nominating Committee
will consider recommendations for director nominations from shareholders.
Shareholders wishing to propose nominees for consideration should write to
Lee G. Kuckro, Secretary, at the principal executive office of the Company.
In addition, shareholders who wish to nominate candidates for election to the
Board may do so by complying with the nomination requirements of the
Company's By-laws. Information concerning these requirements may be obtained
by writing the Company's Secretary.
The Human Resources Committee, which consists of Messrs. Dooley (Chairman),
Cloud, Ellis, Fiondella and Powers, determines the compensation of senior
management, subject to the authority reserved to the Board of Directors. The
Committee also administers the Company's incentive bonus plans and stock
option plans.
During the fiscal year ended September 30, 1997, the Board of Directors met
six times, the Executive Committee did not meet, the Audit Committee met four
times, the Nominating Committee met once and the Human Resources Committee
met twice. Each continuing director attended at least 75% of the aggregate
number of meetings of the Board and the committees on which he or she served.
Compensation of Non-employee Directors
Non-employee directors receive an annual retainer of $10,000, a fee of $2,000
for each meeting of the Board attended and a fee of $750 for each committee
meeting or informational meeting attended. Non-employee committee chairmen
receive an additional $500 for each meeting of that committee which they
attend. Non-employee chairmen or vice chairmen of the Board receive a fee of
$10,000 for each Board meeting attended. Under the Non-Employee Director
Equity Plan, a portion of the annual retainer and per meeting fee of each non-
employee director (but not less than 50% of the annual retainer for any
director) is deferred and, at the conclusion of the applicable deferral
period, will be paid in shares of Company common stock. The number of shares
paid is based on market value at the time of deferral. Shares will be
delivered to the directors after a five-year period or earlier under certain
specified circumstances. Under the 1994 Non-Employee Director Stock Option
Plan each non-employee director receives on the date of the Annual Meeting an
option to purchase 2,500 shares of Common Stock.
Section 16 Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission and the New York Stock Exchange. Based on review of copies of
such forms furnished to the Company, or written representations that no Forms
5 were required, the Company believes that during the fiscal year ended
September 30, 1997 all such reporting requirements were complied with in a
timely manner.
4
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OWNERSHIP OF THE COMPANY'S COMMON STOCK
Ownership by Directors and Executive Officers
The following table sets forth the beneficial ownership of the Company's
Common Stock as of December 1, 1997 by each director, each nominee for
director, each executive officer named in the Summary Compensation Table, and
all directors, nominees and executive officers as a group. All individuals
named in the table have sole voting and investment power over the shares
reported as owned, except as otherwise stated.
Number Percentage
Name of Shares(1) of Class
---- ------------ --------
Allen G. Botwinick 36,825 (2)(3)(4) *
George A. Boujoukos 154,611 (2)(4) 1.76%
Harry H. Branning 17,268 (2)(4) *
Sanford Cloud, Jr. 2,279 (2) *
Ronald E. Compton 1,000 (5) *
Richard G. Dooley 11,984 (2) *
William B. Ellis 1,669 *
Robert W. Fiondella 8,815 (2) *
Grant W. Kurtz 104,689 (2)(3)(4) 1.20%
Anthony A. LaCroix 46,310 (2) *
Marne Obernauer, Jr. 1,000 (5) *
Barbara L. Pearce 421 *
John A. Powers 3,169 (2) *
Allen Weintraub 166,930 (2)(4) 1.90%
All directors, nominees and
executive officers as a
group (17 persons) 572,757 (2)(3)(4) 6.55%
* Less than one percent
(1) As used in this Proxy Statement, "beneficial ownership" means sole or
shared power to vote and/or sole or shared investment power with respect to
shares of Common Stock, or the right to acquire such power within 60 days.
Individual totals include the following shares deliverable under Advest
equity plans: Botwinick (6,829); Boujoukos (11,890); Branning (7,809); Cloud
(669); Dooley (669); Ellis (669); Fiondella (2,315); Kurtz (4,746); Pearce
(321); Powers (669); Weintraub (21,465); all directors, nominees and
executive officers as a group (93,526).
(2) Includes the following shares subject to options exercisable within
60 days of 12/1/97: Botwinick (8,334); Boujoukos (2,500); Branning (1,000);
Cloud (500); Dooley (500); Fiondella (500); Kurtz (22,334); LaCroix (500);
Powers (500); Weintraub (41,667); all directors, nominees and executive
officers as a group (108,337).
(3) Includes the following shares owned by members of such persons'
immediate families residing in the same household: Botwinick (900); Kurtz
(4,000); all directors, nominees and executive officers as a group (5,321).
Beneficial ownership of certain of these shares may be disclaimed.
(4) Includes the following shares held in Advest Thrift Plan ESOP and
401(k) Accounts: Messrs. Botwinick (5,781); Boujoukos (4,726); Branning
(2,801); Kurtz (668); Weintraub (4,726); all directors, nominees and
executive officers as a group (27,589).
(5) Reflects acquisitions during December 1997.
5
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Ownership by Certain Other Persons
The following table sets forth information regarding all persons known to the
Company to be the beneficial owner of more than five percent of the Common
Stock of the Company as of December 1, 1997.
Number Percentage
Name and Address of Shares of Class
- ---------------- ----------- ---------
Mr. Peter R. Kellogg
c/o Spear, Leeds & Kellogg
120 Broadway
New York, NY 10271 1,564,500 (1) 18.12%
The Advest Thrift Plan
Advest, Inc., as Fiduciary
90 State House Square
Hartford, CT 06103 628,267 (2) 7.28%
(1) Such information as to beneficial ownership is derived from a Report
on Form 4 for the month of November 1993 filed by Mr. Kellogg. In that Form
4, Mr. Kellogg reported direct beneficial ownership of 500,000 shares. In
addition, Mr. Kellogg reported indirect beneficial ownership as follows:
910,000 shares held by a corporation of which Mr. Kellogg is the sole holder
of voting stock; 100,000 shares held by Mr. Kellogg's spouse; 20,000 shares
held by a non-profit corporation of which Mr. Kellogg is a trustee; and
34,500 shares held by a firm of which Mr. Kellogg is a senior Managing
Director. Mr. Kellogg disclaimed beneficial ownership of such indirect
holdings. Mr. Kellogg has advised the Company that, pursuant to an
arrangement with the Office of Thrift Supervision, at the Annual Meeting all
of these shares will be voted in proportion to the votes cast by all other
shareholders.
(2) Represents shares held by the Advest Thrift Plan of the Company (the
"ATP") in participant ESOP accounts (536,119 shares) and 401(k) accounts
(92,148). Advest, Inc. acts as trustee for the ATP. Participants may
direct the voting of shares held in their ATP ESOP and 401(k) accounts.
Participants may elect to acquire or dispose of shares held within their ATP
401(k) accounts but not within their ATP ESOP accounts.
6
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EXECUTIVE COMPENSATION
Report of the Human Resources Committee
The Human Resources Committee of the Board of Directors (the "Committee")
determines the compensation of the Chief Executive Officer and other
executive officers named in the Summary Compensation Table set forth below.
The Committee administers the Company's incentive bonus plans and equity and
stock option plans. The Company's compensation philosophies and
determinations are based on the policies described in this report and the
industry specific compensation data collected and analyzed with the
assistance of a compensation consulting firm. The Company's compensation
practices, which relate to all officers including the Chief Executive
Officer, are designed to attract, retain, and reward senior executives who
contribute to the long- and short-term success of the Company's business.
One of the tools used by the Committee to design a competitive program was a
review of compensation packages offered by a group of regional brokerage
firms which are substantially the same firms as those used in constructing
the share performance chart.
The Company's present executive compensation arrangement consists of base
salary, a Management Incentive Plan providing formula-based incentive
compensation, an Executive Equity Program allowing for the purchase of
Company stock on a discretionary basis, and stock option grants. It is
customary in the industry for a substantial majority of total compensation to
be provided to executives through bonus payments and stock vehicles. The
Committee's compensation philosophy is consistent with this industry norm.
The Committee focuses on the compensation program in its entirety considering
together all components.
Consistent with the Company's and Committee's belief that a significant
portion of management's compensation should be based on the Company's
financial performance, no changes were made to base salaries for the Chief
Executive Officer and other executive officers during fiscal 1997.
The Management Incentive Plan for fiscal 1997 provided for incentive
compensation for executive officers based upon the Company's pretax income
over specified threshold performance levels. The threshold performance levels
established for fiscal 1997 exceeded those established for the prior fiscal
year. This reflected the Committee's view that continued enhancement of
profitability is very important and should be rewarded. Pretax income during
fiscal 1997 did exceed the threshold level and, based on the plan formula,
amounts were paid to the Chief Executive Officer and other executive officers
as shown in the accompanying table. Although pretax income during fiscal
1997 was higher than during fiscal 1996, because of the increase in
performance threshholds incentive compensation under the Management Incentive
Plan for fiscal 1997 was lower than for fiscal 1996.
At senior management's request, some of the amount calculated from the
formula for their awards was used to reward other significant contributors to
the Company's performance.
Also during fiscal 1997, option grants were made to the Chief Executive
Officer and other executive officers. These awards consisted exclusively of
option grants made in connection with the investment by the executive officer
of a portion of their compensation in restricted stock under the Executive
Equity Program. Those option awards further support the Company's and
Committee's objective of encouraging greater equity ownership by executive
officers and linking a significant portion of management's compensation to
increasing shareholder value. Beginning with fiscal 1998, under the newly
adopted Key Professional Equity Plan certain executive officers will be
required to invest a portion of their incentive compensation in restricted
shares of the Company's stock.
Richard G. Dooley, Chairman
Sanford Cloud, Jr.
William B. Ellis
Robert W. Fiondella
John A. Powers
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Summary Compensation Table
The following table sets forth all compensation earned by or paid or awarded
to the Chief Executive Officer and the next four most highly compensated
executive officers of the Company for all services rendered in all capacities
for the periods shown. No information is presented for years prior to the
year in which the individual became an executive officer of the Company.
<TABLE>
<CAPTION>
Annual Long Term
Compensation Compensation
----------------- -------------------
Re- Securities All
Name and stricted Underlying Other
Principal Fiscal Stock Op- Compen-
Position Year Salary(1) Bonus(1) Awards($)(2) tions sation(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Allen Weintraub (4) 1997 $300,000 $625,000 0 1,734 $6,750
Chief Executive officer 1996 299,488 548,000 $142,000 34,062 6,000
Chairman of the Board 1995 270,012 365,000 0 38,000 5,250
and Advest, Inc.
Grant W. Kurtz(5)(7) 1997 215,000 450,000 0 2,823 6,750
president of the Company 1996 214,088 390,000 105,000 28,985 6,013
and Advest, Inc. 1995 197,625 260,000 0 25,000 5,237
Harry H. Branning(6) 1997 220,000 255,900 0 2,862 6,753
Executive Vice President 1996 220,000 237,681 0 12,002 6,000
of Advest, Inc. 1995 204,475 118,000 0 12,000 5,250
George A. Boujoukos(5) 1997 $180,000 $230,000 0 1,988 $7,275
Executive Vice President 1996 180,000 210,000 55,000 8,741 6,298
of Capital Markets of 1995 167,250 140,000 0 7,500 5,101
Advest, Inc.
Allen G. Botwinick(5) 1997 $135,000 $220,000 0 804 $9,045
Executive Vice President 1996 135,000 193,000 51,000 6,000 6,762
of Administration and 1995 127,313 130,000 0 0 4,318
Operations of the Company
and Advest, Inc.
</TABLE>
(1) Includes the portion of pre-tax compensation invested in the
Company's common stock and options by the executive officers at their
election under the Executive Equity Program. This program (which is
substantially similar to the Advest Equity Plan offered to certain other
employees) allows executive officers to invest up to 7.5% of their pre-tax
compensation in units consisting of one share of Company common stock and one
stock purchase option. The purchase price for the units is equal to the fair
market value of the common stock. Option grants under this program are made
in January corresponding with share purchases during the preceding calendar
year and are reflected in the Securities Underlying Options for the fiscal
year during which they are received. The shares and options vest,
respectively, three and five years after calendar year end and will be
forfeited under certain circumstances if the executive officer's employment
ends prior to vesting.
(2) Includes grants of restricted stock delivered under the Executive
Equity Program on a mandatory basis. These grants were under a modification
of the Management Incentive Plan (MIP) providing for delivery of restricted
stock valued at current market in lieu of a cash bonus. If the executive
officer's employment ends before the shares vest in 2001, under certain
circumstances the shares may be forfeited. Under the Key Professionals
Equity Plan for fiscal 1998, executive officers will be required to invest a
portion of their incentive compensation over $100,000 in Company shares
purchased at a 20% discount from market. The portion invested will vary from
20% to 35% based on compensation levels. These shares will be restricted for
36 months and will be forfeited under certain circumstances if the executive
officer's employment ends prior to vesting.
(3) Includes direct and matching cash contributions made by the Company
to the Advest Thrift Plan Accounts of the executive officers through 9/30/97.
8
<PAGE>
(4) Mr. Weintraub is a party to an employment agreement with the Company
dated 2/14/91, and restated as of 11/30/95, providing for continued
employment as Chief Executive Officer through 2/13/99. The agreement
provides that Mr. Weintraub's compensation will be set by the Human
Resources Committee, but in no event will his base salary be less than his
base salary on 2/14/91, nor will his share of payments under the MIP be less
than that of any other participant. For aggregate fees of $90,000 per year,
upon request by the Board, for a 10-year period following his retirement Mr.
Weintraub will provide services to the Company as director and consultant.
Mr. Weintraub will also receive supplemental benefits each year during that
10-year period to the extent that payments under the above provisions,
together with amounts attributable to social security income and Company
contributions to the Advest Thrift Plan and its predecessors on his behalf,
are less than one-half of the sum of his average base salary and bonus
(disregarding any bonus over 25% of base salary) over his final three years
of full-time employment (or $200,000, if less). These amounts may also be
paid in an alternative form of equivalent value upon Mr. Weintraub's
election.
(5) The named executive officer is a participant in the Company's
Executive Post-Employment Income Plan, a non-qualified defined benefit plan
which covers certain senior executives of the Company designated by the
Board. The plan is designed to provide those senior executives with income
for 10 years after retirement equal to a target percentage of their final
average compensation. Average compensation includes base pay and bonus
(disregarding any bonus in excess of 25% of base compensation) and is
measured over the highest three consecutive years during the 10 years prior
to retirement. The target percentage is 1% for each year of service with the
Company before 10/1/93 and 1.5% for each year of service thereafter. The plan
will provide supplemental benefits to reach the target percentage, after
taking account of one-half of an assumed level of social security benefits
and the annuity value of the senior executive's retirement plan accounts
attributable to Company contributions and projected earnings. At 9/30/97
there were six participants in the plan. Estimated annual benefits payable at
normal retirement age to the named executive officers is as follows: Kurtz
($76,736); Botwinick ($26,656); Boujoukos ($19,489).
(6) Mr. Branning's salary for 1997, 1996 and 1995 includes net
commissions on securities transactions of $60,000 for each year. Under
agreements with the Company, Mr. Branning earned incentive compensation
during fiscal 1997 based upon profitability of the retail branch system,
return on equity and satisfaction of certain predetermined job goals, and
during fiscal 1996 and 1995 based upon earnings per share, return on equity
and satisfaction of certain predetermined job goals.
(7) Mr. Kurtz is a party to an employment agreement with the Company
dated 10/1/97 providing for continued employment as President through
9/30/02. The agreement provides that Mr. Kurtz's compensation will be set
by the Human Resources Committee, but in no event will his base salary be
less than his base salary on 9/30/02, nor will his share of payments under
the MIP be less than that of any participant other than the Chief Executive
Officer.
Option Grants in Last Fiscal Year
The following table summarizes option grants made during the fiscal year
ended September 30, 1997 to the executive officers named in the Summary
Compensation Table.
9
<PAGE>
<TABLE>
<CAPTION>
Individual Grants (1)
----------------------------------------
Potential
Realizable
Value at
Assumed
% of Total Annual Rates
Number of Options of Stock Price
Securities Granted to Appreciation
Underlying Employees Exercise Expir- For Option
Options In Fiscal Price ation Term(2)
Name Granted Year ($/Share) Date 5% 10%
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Allen Weintraub 1,734 0.44 $11.375 12/31/03 $ 8,030 $18,712
Grant Kurtz 2,823 0.72 $11.375 12/31/03 $13,073 $30,464
Harry H. Branning 2,862 0.73 $11.375 12/31/03 $13,253 $30,885
George Boujoukos 1,988 0.50 $11.375 12/31/03 $ 9,206 $21,453
Allen G. Botwinick 804 0.20 $11.375 12/31/03 $ 3,723 $ 8,676
</TABLE>
(1) All option grants were made pursuant to The Advest Group, Inc. 1993
Stock Option Plan. All grants were made with an exercise price equal to the
closing price per share of the Company's Common Stock on the date of the
grant and become exercisable in their entirety on 1/1/02. Option holders may
use previously owned shares to pay all or part of the exercise price.
(2) The assumed rates of annual appreciation are calculated from the date
of grant through the last date the option may be exercised. Actual gains, if
any, on stock option exercises and Common Stock holdings are dependent on the
future performance of the Common Stock and overall stock market conditions
and may be more or less than the values reflected in either column.
Option Exercises and Fiscal Year-End Values
The following summarizes option exercises during the fiscal year ended
September 30, 1997 by the Executive Officers named in the Summary
Compensation Table and the value of their unexercised options at September
30, 1997. The value of unexercised in-the-money options is calculated by
determining the difference between the exercise price of the options and the
fair market value of the shares of Common Stock on September 30, 1997
($26.313).
<TABLE>
<CAPTION>
Number of Total Value of
Securities Unexercised
Underlying in - the -
Unexercised Money Stock
Shares Stock Options Options at
Acquired at Fiscal Year-End Fiscal Year-End
on Value --------------------- --------------------
Exer- Real- Exer- Unexer- Exer- Unexer-
Name cise ized cisable cisable cisable cisable
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Allen
Weintraub 9,000 $153,000 41,667 61,129 $839,132 $1,128,176
Grant W.
Kurtz 13,000 222,000 22,334 48,474 450,171 880,531
Harry H.
Branning 5,774 87,683 0 23,864 0 432,479
George A.
Boujoukos 7,500 45,000 10,000 15,729 201,255 281,224
Allen G.
Botwinick 5,000 93,100 8,334 15,137 168,247 168,247
</TABLE>
10
<PAGE>
Share Performance Chart
The following chart compares the value of $100 invested in the Company's
Common Stock on September 30, 1992 during the five-year period through
September 30, 1997, with a similar investment in the Standard and Poor's 500
Index or in a peer group consisting of ten comparable regional securities
firms. The chart assumes reinvestment of any dividends and peer group
investment weighted by relative market capitalization at the beginning of
each year.
[Performance graph appears here: comparison of five year
cumulative total return among the Advest Group, Inc., S&P
500 index and peer group]
<TABLE>
<CAPTION>
Measurement Period The Advest S&P
(fiscal year covered) Group, Inc. Peer Group 500 Index
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Measurement Pt - 09/30/1992 $100 $100 $100
FYE 09/30/1993 121 161 113
FYE 09/30/1994 87 132 117
FYE 09/30/1995 155 190 152
FYE 09/30/1996 166 221 183
FYE 09/30/1996 449 490 257
</TABLE>
Peer Group Companies:
First Albany Companies, Inc.
Inter-Regional Financial Group
Interstate/Johnson Lane, Inc.
Legg Mason, Inc.
McDonald & Co. Investments, Inc.
Morgan Keegan, Inc.
Piper Jaffray Companies, Inc.
Raymond James Financial, Inc.
Scott & Stringfellow Financial, Inc.
Stifel Financial Corp.
11
<PAGE>
CERTAIN TRANSACTIONS
Several of the Company's subsidiaries, including Advest, Inc. and Advest Bank
and Trust Company (Advest Bank), extend credit in the ordinary course of
their business. Advest, Inc. is a registered broker-dealer and extends
credit in connection with its customers' margin accounts under Regulation T
of the Federal Reserve Board. Advest Bank is a Federally-chartered capital
stock bank which makes residential, consumer and commercial loans in the
ordinary course of its business. Several directors and executive officers,
nominees for director, and members of such persons' families and entities
related to them, have margin accounts with Advest, Inc. or loans from Advest
Bank or both, which are, individually or in the aggregate, in excess of
$60,000. In each case such loans have been made in the ordinary course of
business of Advest, Inc. or Advest Bank, on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and did not involve more than the
normal risk of collectibility or present other unfavorable features.
PROPOSAL 2. STOCKHOLDER PROPOSAL
The Company has been informed by Mr. John Jennings Crapo, Post Office
Box 151, Porter Square, Cambridge, MA 02140-0002, the owner of 232 shares,
that he plans to present a resolution at the meeting concerning charitable
contributions by the Company. The Board of Directors and Management believe
that adoption of this resolution is not in the best interests of the Company
and recommends a vote AGAINST this resolution. An affirmative vote of a
majority of the votes cast by holders entitled to vote at the meeting would
be required for adoption of this resolution. The resolution, as submitted by
Mr. Crapo, is as follows:
"The stockholders recommend that the Board of Directors of THE ADVEST GROUP,
INC. (the "Registrant") publish in the proxy statement of each Stockholder
Annual Meeting an appendix containing an item concerning the charitable
donations program of the registrant for the immediate past calendar year
which the following information:
i. An explanation of at least five hundred words explaining the
standards of the registrant and procedures of the registrant governing
it's donations to Internal Revenue Service ("IRS") approved private
foundations to include standards for denial of such help.
ii. An enumeration of IRS qualifying charities and IRS approved
foundations which our Board of Directors plans to help in the ensuing
calendar year, included with each charity and foundation an elucidation
of at least twenty-five words how it complied with the standards and
procedures enunciated in i."
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMENDS A VOTE AGAINST THIS PROPOSAL
2, FOR THE FOLLOWING REASONS:
12
<PAGE>
The Company maintains an active program of charitable giving, supporting
worthy organizations in the communities where we conduct business. The
Company also encourages our employees to support financially and to volunteer
their time to assist charitable organizations. However, we do not feel that
the disclosure requested by the shareholder proponent would provide
meaningful information or in any way serve the interests of our shareholders.
The charitable donation program of the Company is a matter supervised by
management, rather than the Board of Directors, and contributions are
generally not determined sufficiently far in advance to permit the disclosure
proposed. The proposal would require unnecessary and time consuming record
keeping. In addition, the proposed disclosures might unnecessarily involve
the Company in controversy. Because this proposal would not serve our
objective of maximizing value to shareholders, we do not support and
recommend a vote AGAINST this proposal.
STOCKHOLDER PROPOSALS FOR FUTURE MEETINGS
Stockholder proposals intended to be presented at the Annual Meeting of
Stockholders in 1999 must be received by the Company at its principal
executive office in Hartford, Connecticut not later than August 20 1998 in
order to be considered for inclusion in the Company's proxy statement and
form of proxy relating to the Annual Meeting of Stockholders in 1999.
RELATIONSHIP WITH AUDITORS
The Board of Directors has selected the firm of Coopers & Lybrand L.L.P.,
independent accountants, as the independent auditors of the Company for the
fiscal year ending September 30, 1998. It is expected that representatives of
Coopers & Lybrand L.L.P. will be present at the Annual Meeting of
Stockholders where they will each have opportunity to make a statement, if
they desire to do so, and to respond to appropriate questions.
OTHER MATTERS
The Board of Directors knows of no other matters which may be presented for
consideration at the meeting. However, if any other matters properly come
before such meeting, the persons named in the enclosed proxy will vote in
accordance with their best judgment on such matters.
Lee G. Kuckro
Secretary
December 22, 1997
13
<PAGE>
DETACH HERE
PROXY PROXY
THE ADVEST GROUP, INC.
90 State House Square, Hartford, Connecticut 06103
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING
JANUARY 29, 1998
The undersigned stockholder of The Advest Group, Inc. hereby appoints Allen
Weintraub, Lee G. Kuckro and David A. Horowitz or any of them, attorneys, and
proxies for the undersigned, with power of substitution to act for and to
vote, as designated below, with the same force and effect as the undersigned,
all shares of the Company's Common Stock standing in the name of the
undersigned at the Annual 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 on January 29, 1998 at 10:30 a.m. and any adjournments
thereof:
<PAGE>
DETACH HERE
/X/ Please mark votes as in this example.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL GRANT AUTHORITY TO VOTE FOR ALL NOMINEES FOR DIRECTOR AND AGAINST
PROPOSAL 2.
1. Election of three Directors
Nominees: Ronald E. Compton, William B. Ellis, Marne Obernauer, Jr.
/__/ FOR /__/ WITHHELD
/__/ ________________________________
For all nominees except as noted above
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND A VOTE AGAINST THE FOLLOWING
PROPOSAL 2.
2. Stockholder proposal to require Proxy Statement disclosure of the
Company's charitable giving:
/__/ FOR /__/ AGAINST /__/ ABSTAIN
3. In their discretion the proxies are authorized to vote upon such other
business as may properly come before the meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT /__/
MARK HERE IF YOU PLAN TO ATTEND THE MEETING /__/
The undersigned hereby acknowledges receipt of notice of said meeting and the
related Proxy Statement.
Please mark, date and sign exactly as name appears on this proxy. Joint
owners should each sign. If the signer is a corporation, please sign full
corporate name by duly authorized officer. Executors, administrators,
trustees, etc. should give full title as such.
If the stockholder giving this proxy attends the Meeting they may vote in
person in lieu of having their proxy voted.
Please sign and return promptly in the enclosed envelope which requires no
postage if mailed in the U.S.A.
Signature: ____________________ Date: _____________________
Signature: ____________________ Date: _____________________
