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[ADVEST LOGO]
THE ADVEST GROUP, INC.
90 State House Square
Hartford, Connecticut 06103
December 22, 1998
Notice of Annual Meeting and Proxy Statement
The Annual Meeting of Stockholders of The Advest Group, Inc. will be
held Thursday, January 28, 1999 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 two 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, 1998 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
/s/ Lee G. Kuckro
Lee G. Kuckro
Secretary
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[ADVEST LOGO]
Proxy Statement
This Proxy Statement is being furnished on or about December 22, 1998 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 28, 1999. Stockholders of record
at the close of business on December 10, 1998 are entitled to notice of and
to vote at the meeting. On that record date, 8,895,709 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 nine and has
selected two nominees for election at the Annual Meeting. The nominees are
Richard G. Dooley and Robert W. Fiondella. Mr. Dooley and Mr. Fiondella
are each currently serving as director and have been nominated for election
to an additional three-year term expiring in 2002. Information regarding
the two nominees and the seven continuing directors whose terms expire in
2000 or 2001 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.
Nominees for Election to the Board for Three-Year Terms
Expiring at the 2002 Annual Meeting of Stockholders
Richard G. Dooley Director since 1983
Mr. Dooley, age 69, 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 56, 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 is a Director of Barnes Group,
Inc., PXRE, and Phoenix Duff & Phelps Corporation. Mr. Fiondella served on
the Board from 1984 to 1992 and from 1995 to the present.
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 54, has been President and Chief Executive Officer of the
National Conference for Community and Justice, Inc. 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 Tenet Healthcare Corp., 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 56, is President of the Company and Advest, Inc. He has been
named by the Board of Directors to succeed Mr. Weintraub as Chief Executive
Officer in April 1999. Mr. Kurtz 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. He is a member of the Securities Industry Association's
Regional Firms Committee and the New York Stock Exchange Regional Firms
Advisory Committee.
Barbara L. Pearce Director since 1996
Ms. Pearce, age 44, 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 63, is Chief Executive Officer and Chairman of the Board
of the Company and Advest, Inc. He has announced that he will step down
from the position of Chief Executive Officer effective April 1999. He will
continue as Chairman of the Board of the Company. Mr. Weintraub 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.
He is a Director of Phoenix Real Estate Securities, Inc. and Advest Bank
and Trust Company.
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Members of the Board Continuing in Office
Terms Expire at the 2001 Annual Meeting of Stockholders
Ronald E. Compton Director since 1998
Mr. Compton, age 65, is retired Chairman of Aetna Inc., retiring with that
company in March 1998. After joining Aetna in 1954, Mr. Compton held
various positions of increasing responsibility. He served as President from
July 1988 to March 1997 and from May 1997 to July 1997. He was appointed
Chairman, President and Chief Executive Officer of Aetna in March 1992 and
held the Chief Executive Officer position until July 1997. Mr. Compton
serves as Chairman of The Bushnell and as Corporator of Hartford Hospital.
William B. Ellis Director since 1996
Mr. Ellis, age 58, 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. Director since 1998
Mr. Obernauer, age 55, is Vice Chairman of Applied Graphics Technologies,
Inc. ("AGT"). Mr. Obernauer served as Chairman and Chief Executive Officer
of Devon Group, Inc. from 1983 until the merger of Devon Group, Inc. with
AGT in May 1998. He is also a Director of Beverage Distributors Corp., a
Founding Member and Vice Chairman of the American Business Conference, Inc.
and a Director of the Committee For A Responsible Federal Budget. He also
serves as a Director of The Associates of The Harvard Business School and a
Trustee of Trinity School.
Member not Continuing
John A. Powers will be retiring from the Board effective at the Annual
Meeting. Mr. Powers has served on the Board since 1992. The Board wishes
to express its sincere gratitude to Mr. Powers for his years of valued
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, Fiondella and Kurtz, 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.
The Audit Committee, which consists of Messrs. Powers (Chairman), Cloud,
Dooley, Ellis and Obernauer 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. Fiondella (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 Annual Stockholders' Meeting. The Nominating Committee
will consider recommendations for
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director nominations from shareholders for the annual meeting in the year
2000. 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, Compton, Ellis and Powers and Ms. Pearce, 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, 1998, 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 three times. Each continuing director other than Mr.
Fiondella 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, is 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 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, 1998 all such reporting requirements were complied with
in a timely manner.
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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, 1998 by each director and nominee, by each
executive officer named in the Summary Compensation Table, and by 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 noted.
Number Percentage
Name of Shares(1) of Class
--------------- -------------- ----------
Allen G. Botwinick 41,939 (2)(3) *
George A. Boujoukos 85,345 (2) *
Harry H. Branning 21,647 (2) *
Sanford Cloud, Jr. 3,517 *
Ronald E. Compton 1,084 *
Richard G. Dooley 13,122 *
William B. Ellis 2,307 *
Robert W. Fiondella 10,323 *
Grant W. Kurtz 118,239 (2)(3) 1.31%
Marne Obernauer, Jr. 1,084 *
Barbara L. Pearce 879 *
John A. Powers 4,307 *
Allen Weintraub 182,749 (2) 2.01%
All directors, nominees
and executive officers
as a group (15 persons) 585,770 (2)(3) 6.18%
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* 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 (6,830); Boujoukos
(13,124); Branning (5,455); Cloud (807); Compton (84); Dooley (807);
Ellis (807); Fiondella (2,823); Kurtz (20,563); Obernauer (84); Pearce
(779); Powers (807); Weintraub (22,053); all directors, nominees and
executive officers as a group (91,098). Individual totals also
include the following shares subject to options exercisable within 60
days of 12/1/98: Botwinick (10,333); Boujoukos (7,000); Branning
(7,334); Cloud (1,500); Dooley (1,500); Ellis (500); Fiondella
(1,500); Kurtz (25,000); Powers (1,500); Weintraub (35,333); all
directors, nominees and executive officers as a group (112,166).
(2) 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 (26,047).
(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 (4,900). Beneficial ownership of certain of these shares may be
disclaimed.
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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, 1998.
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) 17.59%
FMR Corp.
82 Devonshire Street
Boston, MA 02109 668,400(2) 7.51%
The Advest Thrift Plan
Advest, Inc., as Fiduciary
90 State House Square
Hartford, CT 06103 633,660(3) 7.12%
__________
(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) Such information as to beneficial ownership is derived from a Report
on Schedule 13G filed 2/9/98 by FMR Corp. The total reflected in that
Report includes shares beneficially owned by FMR Corp.'s subsidiary,
Fidelity Management & Research Company, in its capacity as investment
adviser and by other related entities.
(3) Represents shares held by the Advest Thrift Plan of the Company (the
"ATP") in participant ESOP accounts (506,328 shares) and 401(k)
accounts (127,332). 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 in their 401(k) accounts. Disposition of shares in ESOP
accounts is permitted only pursuant to a diversification election
available to individuals who have attained aged 55 and participated in
the ESOP for at least 10 years .
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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 also 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 on
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, a Key Professionals Equity Plan mandating that a portion of
that incentive compensation be invested in Company stock, an Executive
Equity Program allowing for the purchase of additional shares 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.
During fiscal 1998, base salaries for the Chief Executive Officer and other
executive officers were raised for the first time over levels established
during fiscal 1994. These increases reflected inflationary adjustments,
changes in prevailing base compensation within the Company's industry, and
recognition of strong performance. Consistent with the belief that a
significant portion of management's compensation should be tied to
financial performance, variable compensation through bonuses and stock
vehicles continues to comprise the majority of executive compensation.
The Management Incentive Plan for fiscal 1998 provided for incentive
compensation for executive officers based upon the Company's pretax income
over specified thresholds. The threshold levels established for fiscal 1998
exceeded those for the prior fiscal year, reflecting the Committee's view
that continued enhancement of profitability is very important and should be
rewarded. Pretax income during fiscal 1998 did exceed the threshold levels
and, based on the plan formula and on achievement of individually
established performance goals, amounts were paid to the Chief Executive
Officer and other executive officers as shown in the accompanying table.
Because pretax income during 1998 substantially exceeded the enhanced
thresholds, incentive compensation under the Management Incentive Plan for
fiscal 1998 was higher than for fiscal 1997. At senior
management's request, a portion of the amount calculated from the formula
for their awards was used to reward other significant contributors to the
Company's performance.
Beginning during fiscal 1998 under the Key Professional Equity Plan a
portion of bonus compensation over $100,000 received by certain executive
officers under the Management Incentive Plan was invested in restricted
shares of the Company's stock on a mandatory basis. The percentage of
compensation over this threshold invested under this plan by the named
executive officers varied from 20% to 25% on a marginal basis, with
officers older than 61 or holding more than $2 million in Company stock
having the right to decline participation. Investments under this plan
were made at 80% of current market value and the shares acquired are
subject to restrictions and possible forfeiture for 36 months after
acquisition.
During fiscal 1998, option grants were made to the Chief Executive Officer
and other executive officers. These awards consisted exclusively of option
grants made in connection with the investment by the executive officers of
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a portion of their compensation in restricted stock under the Executive
Equity Program during fiscal 1997. During fiscal 1998, the Chief Executive
Officer and other executive officers were again given the opportunity to
participate in the Executive Equity Plan. Those participating will receive
corresponding option grants during fiscal 1999.
The restricted stock investments and option awards under these programs
further support the Company's and Committee's objective of encouraging
greater equity ownership by executive officers and linking a significant
portion of management's compensation to increasing shareholder value.
Richard G. Dooley, Chairman
Sanford Cloud, Jr.
Ronald E. Compton
William B. Ellis
Barbara L. Pearce
John A. Powers
Summary Compensation Table
The following table sets forth all compensation earned by or paid or
awarded to the Chief Executive Officer and the next four most highly
compensated executive officers of the Company for all services rendered in
all capacities for the periods shown. No information is presented for years
prior to the year in which the individual became an executive officer of
the Company.
Annual Long Term
Compensation Compensation
----------------- --------------------
Restricted
Stock Securities All Other
Name and Fiscal Awards Underlying Compens-
Principal Position Year Salary(1) Bonus ($)(2) Options ation(3)
- ------------------ ---- --------- -------- -------- --------- ---------
Allen Weintraub(4) 1998 $345,000 $785,000 0 398 $7,550
Chief Executive 1997 300,000 625,000 0 1,734 6,750
Officer and 1996 299,488 548,000 $142,000 34,062 6,000
Chairman of the
Board of the
Company and
Advest, Inc.
Grant W.
Kurtz (5)(6) 1998 240,000 455,000 131,250 1,878 7,550
President of 1997 215,000 450,000 0 2,823 6,750
the Company and 1996 214,088 390,000 105,000 28,985 6,013
Advest, Inc.
Harry H.
Branning(7)(8) 1998 220,000 317,015 72,922 0 7,550
Executive Vice 1997 220,000 255,900 0 2,862 6,753
President of 1996 220,000 237,681 0 12,002 6,000
Advest, Inc.
George A.
Boujoukos(5)(8) 1998 200,000 275,000 0 1,741 7,550
Executive Vice 1997 180,000 230,000 0 1,988 7,275
President of 1996 180,000 210,000 55,000 8,741 6,298
Capital Markets
of Advest, Inc
Allen G.
Botwinick(5)(8) 1998 150,000 244,000 45,000 512 8,186
Executive Vice 1997 135,000 220,000 0 804 9,045
President of 1996 135,000 193,000 51,000 6,000 6,762
Administration
and Operations of
the Company and
Advest, Inc.
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__________
(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 allows executive
officers to invest up to 7.5% of their pre-tax compensation in units
consisting of one share of common stock and one stock purchase option
at a unit purchase price equal to the fair market value of the common
stock. Option grants under this program are made in January equal to
share purchases during the preceding calendar year and are reflected
in the Securities Underlying Options for the fiscal year when
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 the value of the Company's shares purchased with a portion
of incentive compensation for the named executive officers on a
mandatory basis. The shares acquired during 1996 were purchased at
current market value and vest in 2001. The shares acquired during
1998 were purchased under the Key Professionals Equity Plan at a 20%
discount from current market value and also vest in 2001. These
shares 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
401(k) accounts of the executive officers through 9/30/98 and certain
commissions earned by the executive officers.
(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 nonqualified 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 9/30/98 there were
six participants in the plan. Estimated annual benefits payable at
normal retirement age to the named executive officers is as follows:
Kurtz ($85,042); Botwinick ($34,933); Boujoukos ($20,283).
(6) 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' compensation will be
set by the Human Resources Committee, but in no event will his base
salary be less than his base salary on 10/1/97, nor will his share of
payments under the MIP be less than that of any participant other than
the Chief Executive Officer.
(7) Mr. Branning's salary for 1998, 1997 and 1996 includes net commissions
on securities transactions of $60,000 for each year. Under agreements
with the Company, Mr. Branning earned incentive compensation during
fiscal 1998 and 1997 based upon profitability of the retail branch
system, return on equity and satisfaction of certain predetermined job
goals, and during fiscal 1996 based upon earnings per share, return on
equity and satisfaction of certain predetermined job goals.
(8) The named executive officer is a party to an agreement with the Company
dated 9/24/98 providing for severance payments of up to five year's
base salary and certain other benefits if the executive is terminated
without cause following a change of control.
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Option Grants in Last Fiscal Year
The following table summarizes option grants made during the fiscal year
ended September 30, 1998 to the executive officers named in the Summary
Compensation Table.
<TABLE>
<CAPTION>
Individual Grants(1)
-------------------------------------------- Potential Realizable
% of Total Value at Assumed
Number of Options Annual Rates of Stock
Securities Granted to Price Appreciation for
Underlying Employees Exercise Option Term (2)
Options in Fiscal Price Expiration ---------------------
Name Granted Year ($/Share Date 5% 10%
- ----------------- ----------------------- ------------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Allen Weintraub 398 0.31% $22.63 12/31/04 $3,666 $8,543
Grant W. Kurtz 1,878 1.47 22.63 12/31/04 17,298 40,311
Harry H. Branning 0 0 22.63 12/31/04 0 0
George Boujoukos 1,741 1.37 22.63 12/31/04 16,036 37,370
Allen G. Botwinick 512 0.40 22.63 12/31/04 4,716 10,990
</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 1/1/03.
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, 1998 by the Executive Officers named in the Summary
Compensation Table and the value of their unexercised options at September
30, 1998. 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, 1998
($20.375).
<TABLE>
<caption
Total Value of
Number of Securities Unexercised in-the-
Underlying Unexercised Money Stock
Stock Options Options at
Shares at Fiscal Year-End Fiscal Year-End
Acquired on Value ------------------------------------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------- -------------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Allen Weintraub 29,000 525,625 35,333 38,861 477,912 469,368
Grant W. Kurtz 14,000 248,844 25,000 33,686 334,376 378,118
Harry H. Branning 0 0 8,334 15,530 109,919 180,856
George Boujoukos 7,500 151,875 7,000 12,970 94,625 129,128
Allen G. Botwinick 4,167 77,089 10,333 9,483 142,537 112,637
</TABLE>
10
<PAGE>
Share Performance Chart
The following chart compares the value of $100 invested in the Company's
Common Stock on September 30, 1993 during the five-year period through
September 30, 1998, with a similar investment in the Standard and Poor's
500 Index or in a peer group consisting of seven 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.
[Graph]
Fiscal Year Ended September 30,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
Advest $100 $72 $128 $137 $370 $289
Peer Group 100 86 124 147 316 275
S&P 500 100 104 135 162 227 248
Peer Group Companies:
Dain Rauscher Corporation First Albany Companies, Inc.
Interstate/Johnson Lane, Inc. Legg Mason, Inc.
Morgan Keegan, Inc. Raymond James 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 and
supporting statement as submitted by Mr. Crapo, are as follows:
"Stockholders recommend that the Board of Directors of The Advest Group,
Inc. (the "Group") publish in the proxy statement of each stockholder
Annual Meeting an appendix containing an item concerning the charitable
donations program of the Group for the immediate past calendar year with
the following information:
i. An explanation of at least five hundred words explaining the
standards of the Group and procedures of said corporation governing
it's donations to United States Internal Revenue Service approved
private foundations to include standards for denial of such help.
ii. An enumeration of United States Internal Revenue Service ("IRS")
qualifying charities and IRS approved foundations which our Group
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.
Supporting Statement:
The shareholder proposal January 29, 1998 received in the neighborhood of
17-18% of all shareholder votes cast by stockholders meeting in assembled
meeting of shareholders and proxies at Hartford, CT. The vote is evidence
there is strong support among shareholders for adopting this shareholder
proposal, after more thinking and deliberation about it."
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMENDS A VOTE AGAINST THIS
PROPOSAL 2, FOR THE FOLLOWING REASONS:
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.
12
<PAGE>
STOCKHOLDER PROPOSALS FOR FUTURE MEETINGS
Under Rule 14a-8(e) of the Securities and Exchange Commission, shareholder
proposals intended for inclusion in next year's proxy statement must be
directed to the Company's Secretary at 90 State House Square, Hartford, CT
06103, and must be received by August 24, 1999. Under SEC Rule 14a-
4(c)(1), any shareholder proposal for next year's annual meeting submitted
after December 7, 1999 will not be considered filed on a timely basis with
the Company. For proposals that are not timely filed, the Company retains
discretion to vote proxies it receives. For proposals that are timely
filed, the Company retains discretion to vote proxies it receives provided
the Company includes in its proxy statement advice on the nature of the
proposal and how it intends to exercise its voting discretion and the
proponent does not issue a proxy statement.
RELATIONSHIP WITH AUDITORS
The Board of Directors has selected the firm of PricewaterhouseCoopers LLP,
independent accountants, as the independent auditors of the Company for the
fiscal year ending September 30, 1999. It is expected that representatives
of PricewaterhouseCoopers LLP 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.
/s/Lee G. Kuckro
Lee G. Kuckro
Secretary
December 22, 1998
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 28, 1999
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 28, 1999 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 two Directors
Nominees: Richard G. Dooley, Robert W. Fiondella /__/ 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: _____________________
