<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.____________________)*
PennCorp Financial Group, Inc.
----------------------------------------------
(Name of Issuer)
$3.375 Convertible Preferred Stock
----------------------------------------------
(Title of Class of Securities)
708094206
----------------------------------------------
(CUSIP Number)
Copy to:
Paul Chute James Learner
Brown's Dock, L.L.C. Kirkland & Ellis
56 Prospect St. 200 E. Randolph Drive
Hartford, Connecticut 06115 Chicago, Illinois 60601
(860) 403-5594 (312)861-2000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 4, 1998
-----------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following pages)
Page 1 of 23 Pages
<PAGE>
13D
- ----------------------- ---------------------
CUSIP NO. 708094206 PAGE 2 OF 23 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1
Brown's Dock, L.L.C
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
Not Applicable
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) or 2(E) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 792,000 shares of $3.375 Convertible Preferred Stock
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
792,000 shares of $3.375 Convertible Preferred Stock
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
792,000 shares of $3.375 Convertible Preferred Stock (per share
convertible into 2.2124 shares of Common Stock) = 1,752,220.8 shares of
common stock equivalents (See Item 5)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
34.4% of $3.375 Convertible Preferred
5.5% of Common Stock and common stock equivalents
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 708094206 PAGE 3 OF 23 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Phoenix Home Life Mutual Insurance Company
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
Not Applicable
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
New York
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 792,000 shares of $3.375 Convertible Preferred Stock
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
792,000 shares of $3.375 Convertible Preferred Stock
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
792,000 shares of $3.375 Convertible Preferred Stock (per share
convertible into 2.2124 shares of Common Stock) = 1,752,220.8 shares of
common stock equivalents (See Item 5)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
34.4% of $3.375 Convertible Preferred
5.5% of common stock equivalents
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IC
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 708094206 PAGE 4 OF 23 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Phoenix Investment Partners, Ltd.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
00
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 792,000 shares of $3.375 Convertible Preferred Stock
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
792,000 shares of $3.375 Convertible Preferred Stock
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
792,000 shares of $3.375 Convertible Preferred Stock (per share
convertible into 2.2124 shares of Common Stock) = 1,752,220.8 shares of
common stock equivalents (See Item 5)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
34.4% of $3.375 Convertible Preferred
5.5% of common stock equivalents
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IA
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 708094296 PAGE 5 OF 23 PAGES
- ----------------------- ---------------------
===============================================================================
1 NAME OF REPORTING PERSON
Inverness Management Fund I LLC
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [x]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
792,000 shares of $3.375 Convertible Preferred Stock
OWNED BY
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
792,000 shares of $3.375 Convertible Preferred Stock
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
792,000 shares of $3.375 Convertible Preferred Stock (per share
convertible into 2,2124 shares of Common Stock) = 1,752,220.8 shares of
common stock equivalents (See Items 5)
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.4% of $3.375 Convertible Preferred
5.5% of Common Stock and common stock equivalents
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 708094206 PAGE 6 OF 23 PAGES
- ----------------------- ---------------------
===============================================================================
1 NAME OF REPORTING PERSON
WMD LLC
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [x]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
792,000 shares of $3.375 Convertible Preferred Stock
OWNED BY
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
792,000 shares of $3.375 Convertible Preferred Stock
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
792,000 shares of $3.375 Convertible Preferred Stock (per share
convertible into 2.2124 shares of Common Stock) = 1,752,220.8 shares of
common stock equivalents (See Item 5)
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.4% of $3.375 Convertible Preferred
5.5% of Common Stock and common stock equivalents
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 708094206 PAGE 7 OF 23 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J. C. Comis LLC
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
Not Applicable
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
792,000 shares of $3.375 Convertible Preferred Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
792,000 shares of $3.375 Convertible Preferred Stock
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
792,000 shares of $3.375 Convertible Preferred Stock (per share
convertible into 2.2124 shares of Common Stock) =
1,752,220.8 shares of common stock equivalents (Seen Item 5)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
34.4% of $3.375 Convertible Preferred
5.5% of Common Stock and common stock equivalents
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 708094206 PAGE 8 OF 23 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
W. McComb Dunwoody
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
Not Applicable
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 70,000 shares of $3.375 Convertible Preferred Stock
(See Item 5)
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
792,000 shares of $3.375 Convertible Preferred Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 70,000 shares of $3.375 COnvertible Preferred Stock
(See Item 5)
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
792,000 shares of $3.375 Convertible Preferred Stock
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
862,000 shares of $3.375 Convertible Preferred Stock (per share
convertible into 2.2124 shares of Common Stock) =
1,907,088.8 shares of common stock equivalents (see Item 5)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
37.4% of $3.375 Convertible Preferred
5.9% of Common Stock and common stock equivalents
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<TABLE>
<S> <C>
=====================================================================================================
1 NAME OF REPORTING PERSON
James C. Comis, III
- -----------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
- ----------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- ----------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
[_]
- ----------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- ----------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 10,000 shares of $3.375 Convertible Preferred Stock
(See Item 5)
- ----------------------------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 792,000 shares of $3.375 Convertible Preferred Stock
- ----------------------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 10,000 shares of $3.375 Convertible Preferred Stock
(See Item 5)
- ----------------------------------------------------------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 792,000 shares of $3.375 Convertible Preferred Stock
- ----------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
802,000 shares of $3.375 Convertible Preferred Stock (per share convertible into 2.2124 shares
of Common Stock) = 1,774,344.8 shares of common stock equivalents (See Item 5)
- ----------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
- ----------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.8% of $3.375 Convertible Preferred
5.5% of Common Stock and common stock
- ----------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
====================================================================================================
</TABLE>
* SEE INSTRUCTIONS BEFORE FILING OUT!
<PAGE>
ITEM 1. SECURITY AND ISSUER.
-------------------
The name of the issuer is PennCorp. Financial Group, Inc. (the "Issuer").
The address of the Issuer's offices is 590 Madison Avenue, New York, New York
10022. This Schedule 13D Statement (this "Statement") relates to the Issuer's
$3.375 Convertible Preferred Stock (the "Preferred Stock") convertible into the
Company's common stock, par value $.01 (the "Common Stock"). Each share of
Preferred Stock converts into 2.2124 shares of Common Stock.
ITEM 2. IDENTITY AND BACKGROUND.
-----------------------
This Statement is being filed by each of the following persons pursuant to
Rule 13d-1(f) promulgated by the Securities and Exchange Commission (the
"Commission") pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"): (i) Brown's Dock, L.L.C., a Delaware limited
liability company ("Buyer"), by virtue of its direct beneficial ownership of
shares of Preferred Stock covered by this Statement; (ii) Phoenix Home Life
Mutual Insurance Company, a New York mutual life insurance company ("Phoenix"),
by virtue of its being a member of Buyer; (iii) Phoenix Investment Partners,
Ltd., a Delaware corporation ("PXP"), by virtue of its being a member of
Buyer; (iv) Inverness Management Fund I LLC, a Delaware limited liability
company, ("Inverness"), by virtue of its being a member of Buyer; (v) WMD LLC, a
Delaware limited liability company ("WMD"), by virtue of its being a controlling
member of Inverness, (vi) W. McComb Dunwoody, an individual resident of the
State of Connecticut ("Dunwoody"), by virtue of his direct beneficial ownership
of shares of Preferred Stock covered by this statement and by virtue of his
being a controlling member of WMD; (vii) J.C. Comis LLC, a Delaware limited
liability company ("JCC"), by virtue of its being a controlling member of
Inverness; and (viii) James C. Comis III, an individual resident of the State of
New Jersey ("Comis"), by virtue of his direct beneficial ownership of shares of
Preferred Stock covered by this statement and by virtue of his being a
controlling member of JCC. Phoenix, PXP, Inverness, WMD, JCC, Dunwoody and Comis
are sometimes referred to herein individually as a "Reporting Person" and
collectively as the "Reporting Persons." Inverness, WMD, JCC, Dunwoody and Comis
are sometimes referred to herein collectively as the "Inverness Persons."
Information with respect to each of the Reporting Persons is given solely
by such Reporting Person, and no Reporting Person assumes responsibility for the
accuracy or completeness of information given by another Reporting Person. By
their signature on this Statement, each of the Reporting Persons agrees that
this Statement is filed on behalf of such Reporting Person.
The Reporting Persons may be deemed to constitute a "group" for purposes of
Section 13(d)(3) of the Act. The Reporting Persons expressly disclaim that they
have agreed to act as a group other than as described in this Statement.
Certain information required by this Item 2 concerning the directors and
executive officers of Phoenix and PXP is set forth on Schedule A attached
hereto, which is incorporated herein by reference.
Pages 10 of 23 Pages
<PAGE>
Buyer is a holding company that was formed to invest in the Issuer. The
address of the principal business and principal office of Buyer is 56 Prospect
St., Hartford, Connecticut 06115.
Phoenix is a mutual insurance company in the business of life and health
insurance and annuities. The address of the principal business and principal
office of Phoenix is One American Row, Hartford, Connecticut 06115. PXP is a
registered investment advisor and owner of other affiliated investment advisors.
The address of the principal business and principal office of PXP is 56 Prospect
St., Hartford, Connecticut 06115.
The principal business of each of the Inverness Persons is to make
investments in common and preferred stock and other interests in business
organizations, domestic or foreign, with the principal objective of appreciation
of capital invested. The address of the principal business and principal office
of each of the Inverness Entities is c/o Inverness Management LLC, 660 Steamboat
Road, Greenwich, Connecticut 06830.
During the past five years, none of the Reporting Persons nor, to the best
knowledge of the Reporting Persons, any of the persons listed on Schedule A
attached hereto, has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors). During the past five years, none of the
Reporting Persons was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which such person
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activity subject to, federal or state
securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
-------------------------------------------------
The Buyer has acquired 792,000 shares of Preferred Stock in open market
transactions for a net investment cost of $10,014,517. The Buyer utilized funds
derived from capital contributions made by Phoenix, PXP and Inverness (each, a
"Member") pursuant to an Agreement of Limited Liability Company of Brown's Dock,
- -------
L.L.C. (the "LLC Agreement") dated as of August 31, 1998. Under the LLC
-------------
Agreement, the Members contributed $10,025,000 in the aggregate using their
respective internal funds.
Dunwoody has acquired 70,000 shares of Preferred Stock in open market
transactions, and Comis has acquired 10,000 shares of Preferred Stock in open
market transactions. Each of Dunwoody and Comis utilized personal funds to make
such acquisitions.
A Copy of the LLC Agreement is attached hereto as Exhibit A and is
incorporated herein by reference.
ITEM 4. PURPOSE OF TRANSACTION.
----------------------
The Members formed the Buyer and entered into the LLC Agreement for the
express purpose of investing in Preferred Stock. Pursuant to the LLC Agreement,
Phoenix contributed $9,500,000, PXP contributed $506,250 and Inverness
contributed $18,750 to effectuate this investment.
Pages 11 of 23 Pages
<PAGE>
The Buyer acquired and continues to hold the shares of the Preferred Stock
reported herein for investment purposes. The Buyer may, in the future, have
discussions with management, directors and other shareholders of the Issuer
concerning various ways of maximizing long-term shareholder value. In addition,
the Buyer and/or its affiliates intends to have conversations with the Board of
Directors of the Issuer regarding a direct investment in the Company's
securities.
Depending on market conditions and other factors that the Buyer may deem
material to its investment decision, the Buyer may purchase additional shares of
the Preferred Stock or other securities of the Issuer in the open market or in
private transactions. Depending on these same factors, the Buyer may sell
all or a portion of the shares of the Preferred Stock that it now owns or
hereafter may acquire on the open market or in private transactions.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
------------------------------------
At the close of business on September 4, 1998, the Buyer beneficially owned
792,000 shares of Preferred Stock, which, when converted into Common Stock would
result in ownership of 1,752,220.8 shares of Common Stock. Such ownership would
represent approximately 5.5% of the Common Stock and common stock equivalents
issued and outstanding at September 4, 1998.
As of September 5, 1998, Phoenix, PXP and Inverness own all of the
outstanding equity interests of Buyer and, as such, exercise control over Buyer.
Consequently, by virtue of the exercise of such control, each of Phoenix, PXP
and Inverness may be deemed to possess indirect beneficial ownership of the
Shares. By virtue of the relationship between Inverness and each of WMD and JCC
described in Item 2, each of WMD and JCC may be deemed to possess indirect
beneficial ownership of the Shares beneficially owned by Inverness. By virtue
of the relationship between WMD and Dunwoody described in Item 2, Dunwoody
may be deemed to possess indirect beneficial ownership of the Shares
beneficially owned by WCC, and, by virtue of the relationship between JCC and
Comis, described in Item 2, Comis may be deemed to possess indirect beneficial
ownership of the Shares beneficially owned by JCC.
At the close of business on September 4, 1998, Dunwoody beneficially owned,
through joint ownership with his spouse, his children and trusts controlled by
him, 70,000 shares of Preferred Stock, which, when converted into Common Stock
would result in ownership of 154,868 shares of the Common Stock. Such
ownership, together with his indirect beneficial ownership of the shares held by
the Buyer, would represent approximately 5.9% of the Common Stock and common
stock equivalents issued and outstanding at September 4, 1998.
At the close of business on September 4, 1998, Comis beneficially owned
10,000 shares of Preferred Stock, which, when converted into Common Stock would
result in ownership of 22,124 shares of the Common Stock. Such ownership,
together with his indirect beneficial ownership of the shares held by the Buyer,
would represent approximately 5.5% of the Common Stock and common stock
equivalents issued and outstanding at September 4, 1998.
Pages 12 of 23 Pages
<PAGE>
All such ownership percentages of the Common Stock reported herein are
based on the representation of the Issuer to the Reporting Persons that, as of
August 11, 1998, there were 30,064,070 shares of Common Stock issued and
outstanding and 2,300,000 shares of Preferred Stock issued and outstanding and
reported herein to the best knowledge and belief of the Reporting Persons.
The following table sets forth the transactions effected by the Buyer in
the Preferred Stock during the past 60 days. Each of the transactions set forth
below reflects either an acquisition effected by open market transactions or
capital contributions, or a sale effected by open market transactions. The price
per share includes commissions, if any.
PURCHASE DATE PURCHASE PRICE PER SHARE NUMBER OF SHARES
--------------- ------------------------ ----------------
8/28/98 $11.199 282,200
8/31/98 $12.986 104,800
9/1/98 $12.986 283,800
9/3/98 $14.56 7,500
9/4/98 $14.945 130,700
SALE DATE SALE PRICE PER SHARE NUMBER OF SHARES
--------- -------------------- ----------------
9/2/94 $ 14.94 17,000
No person other than the Buyer or the Reporting Persons has the right to
receive or the power to direct the receipt of dividends from the proceeds from
the sale of the Shares.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
---------------------------------------------------------------------
TO SECURITIES OF THE ISSUER.
---------------------------
Reference is made to the information disclosed under Items 2, 3 and 4 of
this Statement which is incorporated by reference in response to this Item.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
---------------------------------
Exhibit A: The Agreement of Liability Company of Brown's Dock,
L.L.C., dated as of August 31, 1998, by and among
Phoenix, PXP and Inverness.
Exhibit B: Agreement of Joint Filing, dated as of September 5,
1998, among Buyer, Phoenix, PXP, Inverness, WMD, JCC,
Dunwoody and Comis.
Pages 13 of 23 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: September 5, 1998
BROWN'S DOCK, L.L.C.
By: /s/ James C. Comis III
------------------------------------
Print Name: James C. Comis III
Its: Managing Director
PHOENIX HOME LIFE MUTUAL
INSURANCE COMPANY
By: /S/ Christopher Wilkos
-------------------------------------
Print Name: Christopher Wilkos
Its: Vice-President
PHOENIX INVESTMENT PARTNERS, LTD.
By: /s/ Michael E. Haylon
-------------------------------------
Print Name: Michael E. Haylon
Its: Executive Vice-President
INVERNESS MANAGEMENT FUND I LLC
By: WMD LLC, its General Partner
By: /s/ W. McComb Dunwoody
-------------------------------
Print Name: W. McComb Dunwoody
Its: Managing Member
WMD LLC
By: /s/ W. McComb Dunwoody
-------------------------------
Print Name: W. McComb Dunwoody
Its: Managing Member
Pages 14 of 23 Pages
<PAGE>
J.C. COMIS LLC
By: /s/ James C. Comis III
---------------------------------
Print Name: James C. Comis III
Its: Managing Member
/s/ W. McComb Dunwoody
-------------------------------
W. McComb Dunwoody
/s/ James C. Comis III
---------------------------------
James C. Comis III
Pages 15 of 23 Pages
<PAGE>
SCHEDULE A
----------
The following table sets forth the names, addresses and principal
occupations of the directors and executive officers of Phoenix Home Life Mutual
Insurance Company ("Phoenix"). Each such person is a citizen of the United
-------
States.
DIRECTORS
---------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NAME ADDRESS PRINCIPAL OCCUPATION
---- ------- --------------------
- --------------------------------------------------------------------------------
<S> <C> <C>
Sal H. Alfiero 9 Four Winds Way Chairman & CEO,
Amherst, NY 14426 Mark IV Industries, Inc.
- --------------------------------------------------------------------------------
J. Carter Bacot 48 Porter Place Chairman & CEO,
Montclair, NJ 07042 The Bank of New York
- --------------------------------------------------------------------------------
Carol H. Baldi 221 North Street President,
Litchfield, CT 06759 Carol H. Baldi, Inc.
- --------------------------------------------------------------------------------
Richard H. Booth 60 High Ridge Road Executive Vice-President,
South Glastonbury, CT Phoenix Home Life Mutual
06073 Insurance Company
- --------------------------------------------------------------------------------
Peter C. Browning 1400 West Carolina Ave. President & Chief Operating
Hartsville, SC 29550 Officer,
Sonoco Products Co.
- --------------------------------------------------------------------------------
Arthur P. Byrne 85 Bishop Lane President, CEO & Chairman,
Avon, Connecticut 06001 The Wiremold Company
- --------------------------------------------------------------------------------
Richard N. Cooper 33 Washington Avenue Professor,
Cambridge, MA 02140 Center for International
Affairs,
Harvard University
- --------------------------------------------------------------------------------
Gordon J. Davis 241 Central Park West Partner,
New York, NY 10024 LeBoeuf, Lamb, Greene &
MacRae
- --------------------------------------------------------------------------------
Robert W. Fiondella 29 Summerberry Circle Chairman, President & CEO,
Bristol, CT 06010 Phoenix Home Life Mutual
Insurance Company
- --------------------------------------------------------------------------------
</TABLE>
Page 16 of 23 Pages
<PAGE>
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------
Jerry J. Jasinowski 3288 Rittenhouse President,
Street, N.W. National Association of
Washington, DC 20015 Manufacturers
- --------------------------------------------------------------------------------
John W. Johnstone 467 Carter Street Chairman of the Board,
New Canaan, CT 06840 Olin Corporation
- --------------------------------------------------------------------------------
Marilyn E. LaMarche 930 Fifth Avenue Limited Managing Director
Apt. 10D Lazard Freres & Co., L.L.C.
New York, NY 10021
- --------------------------------------------------------------------------------
Philip R. McLoughlin 39 Joshua Drive Executive Vice-President,
West Simsbury, CT 06092 Phoenix Home Life Mutual
Insurance Company
- --------------------------------------------------------------------------------
Indra K. Nooyi 12 Deer Lane Senior Vice-President,
Greenwich, CT 06830 PepsiCo., Inc.
- --------------------------------------------------------------------------------
Robert F. Vizza 3 Maria Lane President & CEO
Old Brookville, NY St. Francis Hospital
- --------------------------------------------------------------------------------
Robert G. Wilson Key Colony III Retired
Apt. 1127
151 Crandon Boulevard
Key Biscayne, FL 33149
- --------------------------------------------------------------------------------
Dona D. Young 89 Woodford Hills Drive Executive Vice-President and
Avon, CT 06001 General Counsel,
Phoenix Home Life Mutual
Insurance Company
- --------------------------------------------------------------------------------
</TABLE>
OFFICERS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NAME ADDRESS PRINCIPAL OCCUPATION
---- ------- --------------------
- --------------------------------------------------------------------------------
<S> <C> <C>
Richard H. Booth 60 High Ridge Road Executive Vice-President
South Glastonbury, CT
06073
- --------------------------------------------------------------------------------
Carl T. Chadbum 252 Knollwood Road Executive-Vice President
Manchester, CT
- --------------------------------------------------------------------------------
Robert W. Fiondella 29 Summerberry Circle Chairman, President & Chief
Bristol, CT 06010 Executive Officer
- --------------------------------------------------------------------------------
</TABLE>
Page 17 of 23 pages
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------
<S> <C> <C>
Philip R. McLoughlin 39 Joshua Drive Executive Vice-President
West Simsbury, CT 06092
- ------------------------------------------------------------------------------
David W. Searfoss 3 Stratford Road Executive Vice-President
Farmington, CT 06032
- ------------------------------------------------------------------------------
Dona D. Young 89 Woodford Hills Drive Executive Vice-President
Avon, CT 06001 and General Counsel
------------------------------------------------------------------------------
Kelly J. Carlson 42 Woodchuck Hill Senior Vice-President
West Simsbury, CT
- ------------------------------------------------------------------------------
Robert G. Chipkin 230 Fair Hill Lane Senior Vice-President
Suffield, CT
- ------------------------------------------------------------------------------
Martin J. Gavin 108 Winding Lane Senior Vice-President
Avon, CT 06001
- ------------------------------------------------------------------------------
Randall C. Giangiulio 63 Hildurcrest Drive Senior Vice-President
Simsbury, CT 06070
- ------------------------------------------------------------------------------
Edward P. Hourihan 17 Chesbro Avenue Senior Vice-President
Noank, CT 06266
- ------------------------------------------------------------------------------
Joseph E. Kelleher 6 Spruce Lane Senior Vice-President
Simsbury, CT 06070
- ------------------------------------------------------------------------------
Robert G. Lautensack 21 Stillwood Chase Senior Vice-President
Simsbury, CT 06070
- ------------------------------------------------------------------------------
Maura L. Melley 123 Senate Brook Drive Senior Vice-President
Amston, CT 06231
- ------------------------------------------------------------------------------
Scott C. Noble 15 Apple Hill Road Senior Vice-President
Wilbraham, MA 01095
- ------------------------------------------------------------------------------
Robert E. Primmer 47 Wyngate Senior Vice-President
Simsbury, CT 06070
- ------------------------------------------------------------------------------
Frederick W. Sawyer 8 Sachem Drive Senior Vice-President
Glastonbury, CT 06033
- ------------------------------------------------------------------------------
Richard C. Shaw 18 South Mill Road Senior Vice-President
South Glastonbury, CT
06073
- ------------------------------------------------------------------------------
Simon Y. Tan 169 Weir Street Senior Vice-President
Glastonbury, CT 06033
- ------------------------------------------------------------------------------
</TABLE>
Page 18 of 23 Pages
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------
<S> <C> <C>
Anthony J. Zeppetella 81 81/st/ Street Senior Vice-President
Brooklyn, NY 11209
- ------------------------------------------------------------------------------
Walter H. Zultowski 6 Winhart Drive Senior Vice-President
Granby, CT 06035
- ------------------------------------------------------------------------------
</TABLE>
Page 19 of 23 Pages
<PAGE>
SCHEDULE A (continued)
----------------------
The following table sets forth the names, addresses and principal
occupations of the directors and executive officers of Phoenix Investments
Partners, Ltd. ("PXP"). Each such person is a citizen of the United States.
---
DIRECTORS
---------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
NAME ADDRESS PRINCIPAL OCCUPATION
---- ------- --------------------
- --------------------------------------------------------------------------------------
<S> <C> <C>
John T. Anderson Pine Boughs Cottage Attorney
P.O. Box 4133
The Epworth Assembly
Ludington, MI 49431
- --------------------------------------------------------------------------------------
Clyde E. Bartter 440 Old Reservoir Road President, Duff & Phelps
Berra, OH 44017 Investment Management Co.
- --------------------------------------------------------------------------------------
Richard H. Booth 60 High Ridge Road Executive Vice-
South Glastonbury, CT President, Phoenix Home Life
06073 Mutual Insurance Company
- --------------------------------------------------------------------------------------
Glen D. Churchill 33 Tamarisk Circle Retired
Abilene, TX 79606
- --------------------------------------------------------------------------------------
Robert W. Fiondella 29 Summerberry Circle Chairman of the Board and
Bristol, CT 06010 Chief Executive Officer,
Phoenix Home Life Mutual
Insurance Company
- --------------------------------------------------------------------------------------
Michael E. Haylon 26 Clark Drive Executive Vice-President,
West Hartford, CT 06117 Phoenix Investment Partners,
Ltd.
- --------------------------------------------------------------------------------------
Marilyn E. LaMarche 930 Fifth Avenue Limited Managing Director,
Apartment 10D Lazard Freres & Company,
New York, NY 10020 L.L.C.
- --------------------------------------------------------------------------------------
Edward P. Lyons 5 Londonderry Drive [RETIRED]
Greenwich, CT 06830
- --------------------------------------------------------------------------------------
Philip R. McLoughlin 39 Joshua Drive Chairman of the Board and
West Simsbury, CT 06092 Chief Executive Officer,
Phoenix Investment Partners
- --------------------------------------------------------------------------------------
</TABLE>
Page 20 of 23 Pages
<PAGE>
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------
James M. Oates 51 Spooner Road Chairman, IBEX Capital
Chestnut Hill, MA 02167 Markets, L.L.C. and Managing
Director of the Wydown
- --------------------------------------------------------------------------------------
Calvin J. Pedersen 307 King Street President, Phoenix Investment
Yorkville, IL 60560 Partners, Ltd.
- --------------------------------------------------------------------------------------
Donna F. Tuttle 12733 Parkyns Street President, Korn Tuttle
Los Angeles, CA 90049 Capital Group
- --------------------------------------------------------------------------------------
Ferdinand L.J. Verdonck Nederpolder 7 Managing Director, Almanij
B-9000 Gent N.V.
Belgium
- --------------------------------------------------------------------------------------
David A. Williams Roxborough Holdings President, Roxborough
Limited 90 Holdings, Inc.
Roxborough Street East
Toronto, Ontario M4W
1V8
Canada
- --------------------------------------------------------------------------------------
</TABLE>
OFFICERS
--------
<TABLE>
<CAPTION>
NAME ADDRESS PRINCIPAL OCCUPATION
---- ------- --------------------
- --------------------------------------------------------------------------------------
<S> <C> <C>
Philip R. McLoughlin 56 Prospect Street Chairman and CEO
P.O. Box 150480
Hartford, CT 06115
- --------------------------------------------------------------------------------------
Calvin J. Pedersen 56 Prospect Street President
P.O. Box 150480
Hartford, CT 06115
- --------------------------------------------------------------------------------------
Michael E. Haylon 56 Prospect Street Executive Vice-President
P.O. Box 150480
Hartford, CT 06115
- --------------------------------------------------------------------------------------
John F. Sharry 56 Prospect Street Executive Vice-President,
P.O. Box 150480 Retail Division
Hartford, CT 06115
- --------------------------------------------------------------------------------------
</TABLE>
Page 21 of 23 Pages
<PAGE>
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------
William R. Moyer 56 Prospect Street Senior Vice-President and
P.O. Box 150480 Chief Financial Officer
Hartford, CT 06115
- --------------------------------------------------------------------------------
</TABLE>
Page 22 of 23 Pages
<PAGE>
<TABLE>
<S> <C> <C>
Thomas N. Steenburg 56 Prospect Street Vice-President and
P.O. Box 150480 General Counsel
Hartford, CT 06115
- --------------------------------------------------------------------------------
Elizabeth R. Sadowinski 56 Prospect Street Vice-President
P.O. Box 150480 Administration
Hartford, CT 06115
- --------------------------------------------------------------------------------
</TABLE>
Page 23 of 23 Pages
<PAGE>
EXHIBIT A
AGREEMENT OF LIMITED LIABILITY COMPANY
OF
BROWN'S DOCK, L.L.C.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I
GENERAL PROVISIONS; CAPITAL
CONTRIBUTIONS;DEFINITIONS......................................................................... 1
Section 1.1 Formation............................................................................ 1
Section 1.2 Name................................................................................. 1
Section 1.3 Purpose.............................................................................. 1
Section 1.4 Place of Business; Registered Office and Agent....................................... 1
Section 1.5 Capital Contributions................................................................ 2
Section 1.6 Definitions.......................................................................... 2
ARTICLE II
CAPITAL ACCOUNTS.................................................................................. 4
Section 2.1 Capital Accounts..................................................................... 4
Section 2.2 Distribution in Kind................................................................. 5
ARTICLE III
DISTRIBUTIONS..................................................................................... 6
Section 3.1 Distributions........................................................................ 6
ARTICLE IV
MANAGEMENT........................................................................................ 6
Section 4.1 Management Authority................................................................. 6
Section 4.2 Delegation of Authority.............................................................. 7
Section 4.3 Company Acts......................................................................... 7
Section 4.4 No Liability to Members, Terminated Members or the Company........................... 7
Section 4.5 Indemnification...................................................................... 7
ARTICLE V
MEMBERS........................................................................................... 8
Section 5.1 Limited Liability.................................................................... 8
Section 5.2 No Liability to the Members or the Company........................................... 8
Section 5.3 Indemnification of the Members....................................................... 8
Section 5.4 No Transfer of Interest; No Withdrawal of Funds or Loans............................. 8
Section 5.5 Admission of New Members............................................................. 9
Section 5.6 Withdrawal, Expulsion or Other Termination of Members................................ 9
ARTICLE VI
DURATION; TERMINATION............................................................................. 9
Section 6.1 Duration............................................................................. 9
Section 6.2 Liquidation of Company Interests..................................................... 10
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
ARTICLE VII
VALUATION......................................................................................... 10
Section 7.1 Normal Valuation..................................................................... 10
Section 7.2 Restrictions on Transfer or Blockage................................................. 10
ARTICLE VIII
BOOKS OF ACCOUNT.................................................................................. 11
Section 8.1 Books................................................................................ 11
Section 8.2 Fiscal Year.......................................................................... 11
Section 8.3 Tax-Allocation....................................................................... 11
ARTICLE IX
POWER OF ATTORNEY................................................................................. 12
ARTICLE X
MISCELLANEOUS..................................................................................... 12
Section 10.1 Indemnification and Reimbursement for Payments on Behalf of a Member
or Terminated Member....................................................................... 12
Section 10.2 Deadlock; Arbitration................................................................ 13
Section 10.3 Amendments........................................................................... 13
Section 10.4 Successors........................................................................... 13
Section 10.5 Governing Law; Severability.......................................................... 13
Section 10.6 Notices.............................................................................. 13
Section 10.7 Singular; Plural; Gender............................................................. 13
Section 10.8 Complete Agreement; Headings; Counterparts........................................... 13
Schedule 1 - Capital Commitments
Schedule 2 - Carried Interest Percentage
Schedule 3 - Notices
Schedule 4 - Affiliated Members
</TABLE>
-ii-
<PAGE>
AGREEMENT OF LIMITED LIABILITY COMPANY
OF
BROWN'S DOCK, L.L.C.
Agreement of Limited Liability Company (the "Agreement") of Brown's
---------
Dock, L.L.C. (the "Company"), dated as of August 31, 1998, by and among
-------
Inverness Management Fund I LLC, a Delaware limited liability company
("Inverness"), Phoenix Home Life Mutual Insurance Company ("Phoenix") and
--------- -------
Phoenix Investment Partners, Ltd. ("PXP"). Certain capitalized terms used
herein are defined in Section 1.6.
The parties hereto now agree as follows:
ARTICLE I
GENERAL PROVISIONS; CAPITAL
CONTRIBUTIONS; DEFINITIONS
Section 1.1 Formation. The Company was formed as of August 31, 1998
---------
by the execution and filing of a certificate of formation of the Company with
the Secretary of State of the State of Delaware setting forth the information
required by the Act (the "Certificate"). The Company shall continue until
-----------
dissolution and termination of the Company in accordance with the provisions of
Article VI hereof.
Section 1.2 Name. The name of the Company shall be "Brown's Dock,
----
L.L.C." or such other name or names as may from time to time hereafter be
designated by the Managers.
Section 1.3 Purpose. The Company is organized for the object and
-------
purpose of (i) acquiring, holding and disposing of shares of PennCorp Financial
Group, Inc.'s $3.375 Convertible Preferred Stock (the "Stock") in open market
-----
purchases, and (ii) engaging in such activities incidental or ancillary thereto
as approved by the Managers.
Section 1.4 Place of Business; Registered Office and Agent.
----------------------------------------------
(a) The Company shall maintain an office in Hartford, CT or at such
other place or places as may from time to time be designated by the Managers.
(b) The registered office of the Company in the State of Delaware is
located at 9 East Loockerman, Dover, Kent County, Delaware 19901. The
registered agent of the Company for service of process at such address is
National Registered Agents, Inc.
<PAGE>
Section 1.5 Capital Contributions.
---------------------
(a) Each Member shall make cash contributions or contributions of
Stock to the capital of the Company in the aggregate amount equal to the amount
set forth opposite such Member's name on Schedule I attached hereto. Each
----------
Capital Contribution to the Company shall be made by means of a check or by wire
transfer of funds to an account designated by the Managers.
(b) To the extent a Member is required by law to pay a Company
liability, the amount so paid shall be treated (i) as a capital contribution to
the Company and (ii) as a payment by the Company of such liability.
Section 1.6 Definitions. For purposes of this Agreement:
-----------
"Act" means the Delaware Limited Liability Company Act, 6 Del. C. (S)
---
18-101 et seq., as amended.
"Agreement" has the meaning set forth in the preamble.
---------
"Allocated Preferred Return" with respect to each Member means the
--------------------------
lesser of (i) the excess, if any, of (A) the aggregate amount of all Net
Profits previously allocated to such Member pursuant to Section 2.1(b) over (B)
the aggregate amount of all Net Losses previously allocated to such Member
pursuant to Section 2.1(c) and (ii) such Member's Preferred Return.
"Basis" with respect to any security means the Cost Basis thereof,
-----
reduced by any write-down amount pursuant to clause (iii) of the definition of
"Realized Investment Loss."
"Capital Account" has the meaning set forth in Section 2.1.
---------------
"Capital Contribution" with respect to each Member means any amount
--------------------
contributed by such Member to the Company.
"Certificate" has the meaning set forth in Section 1.1.
-----------
"Code" means the Internal Revenue Code of 1986, as amended from time
----
to time.
"Company" has the meaning set forth in the preamble.
-------
"Cost Basis" with respect to any security means the basis thereof as
----------
determined in accordance with the Code.
"Dispute" has the meaning set forth in Section 10.2.
-------
"Indemnifying Member" has the meaning set forth in Section 10.1.
-------------------
-2-
<PAGE>
"Inverness" has the meaning set forth in the preamble.
---------
"Managers" means collectively Phoenix and Inverness, or any successor
--------
managers as determined pursuant to Section 4.6.
"Member" means the Persons listed on the signature pages hereto as
------
Members and any other Person who is admitted to the Company pursuant to Section
5.5 (so long as such Person continues to be a Member hereunder).
"Net Loss" for any period means the excess of all the Company's
--------
Realized Investment Losses for such period over all of the Company's Realized
Investment Gains for such period.
"Net Profit" for any period means the excess of all the Company's
----------
Realized Investment Gains for such period over all of the Company's Realized
Investment Losses for such period.
"Person" means an individual, a partnership, a corporation, a limited
------
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.
"Phoenix" has the meaning set forth in the preamble.
-------
"Preferred Return" with respect to each Member means the excess, if
----------------
any, of (i) the greater of (A) the aggregate amount of distributions required to
cause the internal rate of return from August 28, 1998 through the date of
determination on the aggregate Capital Contributions made to fund Realized
Investments on or prior to the date of determination, and taking into account
all prior distributions on Realized Investments, to equal 20% per annum, or (B)
120% of the Basis of the Realized Investments, over (ii) the aggregate Capital
Contributions made on or prior to the date of determination to fund Realized
Investments.
"PXP" has the meaning set forth in the preamble.
---
"Realized Investment Gain" means (i) the excess, if any, of the net
------------------------
proceeds from the sale of the Stock over the Basis of the Stock, (ii) the
excess, if any, of the value (as determined pursuant to Article X) of any Stock
distributed to the Members over the Basis of such Stock and (iii) all other
items of gain that are not included in the foregoing clauses (i) and (ii).
"Realized Investment Loss" means (i) the deficiency, if any, of the
------------------------
net proceeds from the sale of Stock as compared to the Basis of such Stock, (ii)
the deficiency, if any, of the value (as determined pursuant to Section 7.1) of
any Stock distributed to the Members as compared to the Basis of such Stock,
(iii) the amount (the "write-down amount"), as determined by the Managers, by
-----------------
which the Stock has permanently declined in value as compared to the Cost Basis
of such Stock
-3-
<PAGE>
as provided in Article VII and (iv) all other items of deduction and loss that
are not included in the foregoing clauses (i) and (ii).
"Realized Investments" means the portion of the Stock which has been
--------------------
disposed of or written-down by the Company.
"Stock has the meaning set forth in Section 1.3.
-----
"Unallocated Preferred Return" with respect to each Member means the
----------------------------
excess, if any, of (i) such Member's Preferred Return over (ii) such Member's
Allocated Preferred Return.
ARTICLE II
CAPITAL ACCOUNTS
Section 2.1 Capital Accounts. A "Capital Account" shall be
---------------- ---------------
established for each Member on the books of the Company and shall be adjusted as
follows:
(a) Capital Contributions. A Member's Capital Contribution shall be
---------------------
credited to such Member's Capital Account when and as received by the Company.
(b) Net Profit. For any period in which the Company has a Net
----------
Profit, such Net Profit shall be credited to the Members' Capital Accounts in
the following priority:
(i) First, 100% of such Net Profit shall be allocated to the
-----
Capital Accounts of the Members to the extent of their Unallocated
Preferred Return (taking into account amounts then and previously credited
pursuant to this Section 2.1(b)(i) (and not reversed pursuant to Section
2.1(c)(iii)).
(ii) Second, after the required allocations of such Net Profit is
------
made pursuant to subparagraph (b)(i) above, such Net Profit shall be
credited 75% to the Capital Account of Inverness and 25% to the Capital
Account of PXP, but only to the extent necessary to cause the aggregate
amount of Net Profit allocated to the Capital Account of Inverness under
this subparagraph (b)(ii) at the time of such allocation to equal 18.75% of
the Net Profit previously allocated to the Members' Capital Accounts
pursuant to subparagraph (b)(i) above (and not reversed pursuant to Section
2.1(c)(ii)).
(iii) Third, after the required amount of an allocation of such Net
-----
Profit is made pursuant to subparagraphs (b)(i) and (b)(ii) above, the
remainder of such Net Profit shall be credited (A) 80% to the Capital
Accounts of the Members, pro rata according to the Capital Contributions,
(B) 15% to the Capital Account of Inverness and 5% to the Capital Account
of PXP.
-4-
<PAGE>
(c) Net Loss. For any period in which the Company has a Net Loss,
--------
such Net Loss shall be debited against the Capital Accounts of the Members in
the following order of priority:
(i) First, 100% of such Net Loss shall be debited (A) 80% to the
-----
Capital Account of the Members, pro rata according to the Capital
Contributions, (B) 15% to the Capital Account of Inverness and (c) 5% to
the Capital Account of PXP, but only to the extent that Net Profit has
previously been allocated pursuant to subparagraph (b)(iii) above and not
previously offset by Net Losses pursuant to this subparagraph (c)(i).
(ii) Second, after the required amount of such Net Loss has been
------
allocated pursuant to subparagraph (c)(i) above, thereafter, such Net Loss
shall be debited (A) 75% to the Capital Account of Inverness and (B) 25% to
the Capital Account of PXP, but only to the extent that Net Profit has
previously been allocated pursuant to subparagraph (b)(ii) above and not
previously offset by Net Losses pursuant to this subparagraph (c)(ii).
(iii) Third, after the required amount of such Net Loss has been
-----
allocated pursuant to subparagraphs (c)(i) and (c)(ii) above, thereafter,
100% of such Net Loss shall be debited against the Capital Account of the
Members, but only to the extent that Net Profit has previously been
allocated pursuant to subparagraph (b)(i) and not previously offset by Net
Losses pursuant to this subparagraph (c)(iii).
(iv) Fourth, after the required amount of an allocation of such Net
------
Loss is made pursuant to subparagraphs (c)(i), (c)(ii) and (c)(iii) above,
thereafter, such Net Loss shall be debited 100% against the Capital
Accounts of all Members, pro rata according to their Capital Contributions.
(d) Distributions. Any amounts distributed to a Member shall be
-------------
debited against such Member's Capital Account.
The Members' Capital Accounts normally shall be adjusted periodically, monthly
or quarterly as set forth above, but the Capital Accounts may be adjusted more
often if a New Member is admitted to the Company or if circumstances otherwise
make it advisable (as determined in the discretion of the Managers). Where
allocations are made more often than annually, the relevant item of income,
expense, etc. being allocated shall be estimated and if subsequent year-end or
other adjustments affect allocations previously made, such adjustments shall be
recorded when determined.
If any income required by this Section 2.1 to be credited to the Members'
Capital Accounts is a negative amount (i.e., a loss), the absolute value of such
negative amount shall be debited against the Members' Capital Accounts.
Similarly, if any expense required to be debited against the Members' Capital
Accounts is a negative amount, the absolute value of such negative amount shall
be credited to the Members' Capital Accounts.
Section 2.2 Distribution in Kind. If securities are to be
--------------------
distributed in kind to the Members, they shall first be written up or down to
their value (as determined pursuant to Section 7.1
-5-
<PAGE>
as of the date of such distribution), thus creating gain or loss for the
Company, and the value of the securities received by each Member as so
determined shall be debited against such Member's Capital Account at the time of
distribution.
ARTICLE III
DISTRIBUTIONS
Section 3.1 Distributions.
-------------
(a) Distributions of cash and/or securities received by the Company
shall be made to all Members from time to time as determined by the Managers;
provided that each Member shall be entitled to receive annual distributions
pursuant to Section 3.1(b) as soon as is reasonably feasible, but in no event
later than 90 days after each calendar year, equal to the anticipated taxes on
the share of taxable income allocated to such Member for the fiscal quarter to
which such date relates, assuming the highest applicable marginal federal and
state rates (taking into account the type of income distributed) for all Member,
subject to the availability of cash after setting aside appropriate reserves for
anticipated or contingent obligations, losses and commitments of the Company.
(b) Distributions out of Net Profit shall be made to all Members in
the same proportions as such Net Profit was credited to their respective Capital
Accounts.
(c) To the extent distributions represent a return of capital to the
Members (i.e., distributions other than out of Net Profit), such distributions
shall be made pro rata among the Members on the basis of the amount of each
Member's net Capital Contributions (i.e., each Member's or Terminated Member's
aggregate Capital Contribution with respect to its Capital Commitment, reduced
by the amount of each distribution received by such Member which constitutes a
return of capital).
(d) It is presently anticipated that distributions of Net Profit
shall be made within a reasonable period of time after receipt thereof by the
Company, subject in each case to the avail ability of cash after setting aside
appropriate reserves for anticipated or contingent obligations, losses and
commitments of the Company.
(e) Notwithstanding the above, no Member shall receive a distribution
which reduces such Member's Capital Account below zero.
ARTICLE IV
MANAGEMENT
Section 4.1 Management Authority. Except as otherwise expressly
--------------------
provided in this Agreement, all material Company decisions and determinations
will be made by unanimous decision of the Managers in their sole discretion,
including all Company decisions and
-6-
<PAGE>
determinations relating to (a) the acquisition of Stock, (b) distributions of
Company cash and securities, and (c) the incurring of expenses on behalf of the
Company; provided that the decision to dispose of Stock shall be made solely by
the Manager with the largest Capital Account.
Section 4.2 Delegation of Authority. The Company may (i) appoint
-----------------------
such officers or employ such Persons to such terms and to perform such functions
as the Managers shall determine, (ii) appoint or otherwise contract with such
other Persons for the transaction of the business of the Company or the
performance of services for or on behalf of the Company as the Managers shall
determine and (iii) delegate to any such officer or Person such authority to act
on behalf of the Company as the Manager may from time to time deem appropriate.
Section 4.3 Company Acts. When the taking of Company action has
------------
been authorized pursuant to Section 4.1 or as otherwise provided in this
Agreement, any Person specifically thereby authorized in writing may execute any
contract or other agreement or document on behalf of the Company and may execute
and file on behalf of the Company with the Secretary of State of the State of
Delaware any certificates of amendment to the Company's certificate of
formation, one or more restated certificates of formation and certificates of
merger or consolidation and, upon the dissolution and completion of winding up
of the Company, at any time when there are fewer than two Members, or as
otherwise provided in the Act, a certificate of cancellation canceling the
Company's certificate of formation.
Section 4.4 No Liability to Members, Terminated Members or the
--------------------------------------------------
Company. Except as otherwise required by law or the provisions of this
- -------
Agreement, no present or former Manager shall be personally liable to any other
Manager, Member or to the Company for any action taken or omitted to be taken as
a Manager with respect to the Company which is not in violation of the
provisions of this Agreement or for any action taken or omitted to be taken by
any officer, director, employee or agent of the Company, except in the case of
such Manager's own gross negligence or willful malfeasance.
Section 4.5 Indemnification. Except as otherwise required by law
---------------
or the provisions of this Agreement, the Company shall indemnify its present or
former Managers, officers, employees and agents against any losses, liabilities,
damages or expenses (including amounts paid for attorneys' fees, judgments and
settlements in connection with any threatened, pending or completed action, suit
or proceeding) to which any of such Persons may directly or indirectly become
subject for action taken or omitted to be taken on behalf of the Company or in
connection with any involvement with the Company, but only to the extent that
such Person (a) acted in good faith, (b) acted in a manner reasonably believed
to be authorized or conferred upon such Person by this Agreement, (c) acted in a
manner reasonably believed to be in the best interests of the Company and (d)
was neither grossly negligent nor engaged in willful malfeasance.
Section 4.6 Successor Manager. The Members may remove the Managers
-----------------
and appoint successor Manager(s) by the unanimous vote of the Members. Upon
such appointment the successor Manager shall become a Manager of the Company and
shall inure to all of the rights and obligations of a Manager pursuant to this
Agreement.
-7-
<PAGE>
ARTICLE V
MEMBERS
Section 5.1 Limited Liability. The Members shall not be personally
-----------------
liable for any obligations of the Company and shall have no obligation to make
contributions to the Company in excess of their respective Capital Contributions
as specified in Schedule 1 attached hereto, except to the extent set forth in
----------
the Act or otherwise expressly provided in this Agreement. The failure of the
Company to observe any formalities or requirements relating to the exercise of
its powers or management of its business or affairs under this Agreement or the
Act shall not be grounds for imposing personal liability on the Members or
Managers of the Company.
Section 5.2 No Liability to the Members or the Company. Except as
------------------------------------------
otherwise required by law or the provisions of this Agreement, no Member or any
of their respective owners, directors, officers or agents, if any, shall be
personally liable to the Company or to any other Member for any action taken or
omitted to be taken as a Member with respect to the Company which is not in
violation of the provisions of this Agreement, or for any action taken or
omitted to be taken by any employee or agent of the Company, except in the case
of such Person's own gross negligence or willful malfeasance.
Section 5.3 Indemnification of the Members. Except as otherwise
------------------------------
required by law or the provisions of this Agreement, the Company shall indemnify
the Members against any losses, liabilities, damages or expenses (including
amounts paid for attorneys' fees, judgments and settlements in connection with
any threatened, pending or completed action, suit or proceeding) to which any of
such Persons may directly or indirectly become subject for action taken or
omitted to be taken as a Member or in connection with any involvement with the
Company, but only to the extent that such Person (a) acted in good faith, (b)
acted in a manner reasonably believed to be authorized or conferred upon such
Person by this Agreement, (c) acted in a manner reasonably believed to be in the
best interests of the Company, and (d) was neither grossly negligent nor
willfully malfeasant.
Section 5.4 No Transfer of Interest; No Withdrawal of Funds or
--------------------------------------------------
Loans.
- -----
(a) A Member may not sell, assign, transfer or otherwise dispose of
all or any part of such Member's interest in the Company unless all of the
Members have consented to such transfer or assignment in writing, except for a
transfer of all or a part of such Member's interest (A) to such Member's estate,
heirs or beneficiaries upon such Member's death and (B) to any trust established
for the benefit of such Member's heirs or beneficiaries or to any guardian or
conservator appointed for such Member's estate upon such Member's Disability
(and in each such case, the transferor, unless otherwise determined by the
Manager, shall remain liable for all liabilities and obligations relating to the
transferred interest and the transferee shall become an assignee of only a
beneficial interest in Company profits, losses and distributions).
-8-
<PAGE>
(b) Notwithstanding anything to the contrary contained in this
Section 5.4, a transferee of a Company interest shall not become a substitute
Member without the consent of the Manager and without executing a copy of this
Agreement (and any Agreement contemplated hereby) or an amendment hereto (or
thereto) in form and substance satisfactory to the Manager. Any substitute
Member admitted to the Company as set forth in the preceding sentence shall
succeed to all rights and be subject to all obligations of the transferring or
assigning Member with respect to the interest to which such Member was
substituted.
(c) The transferor and transferee of any Member's interest shall be
jointly and severally obligated to reimburse the Manager and the Company for all
reasonable expenses (including attorneys' fees and expenses) of any transfer or
proposed transfer of a Member's interest, whether or not consummated.
(d) The transferee of any Member's interest shall be treated, for
purposes of this Agreement, as having made all of the Capital Contributions made
by, and received all of the distributions received by, the transferor of such
interest.
(e) Except as specifically provided in this Agreement, no Member is
entitled to borrow or withdraw any amount from the Company.
(f) Any sale, assignment, transfer, pledge, mortgage or other
disposition which violates this Section 5.4 shall be void and the purported
buyer, assignee, transferee, pledgee, mortgagee or other recipient shall have no
interest in or rights to Company assets, profits, losses or distributions and
neither the Members nor the Company shall be required to recognize any such
interest or rights.
Section 5.5 Admission of New Members. Additional members ("New
------------------------ ---
Members") may be admitted to the Company only upon (i) approval by all of the
- -------
Members and (ii) the execution and delivery of an appropriate amendment to this
Agreement and any other documents requested by the Manager in order to make such
New Member a party hereto and thereto.
Section 5.6 Withdrawal, Expulsion or Other Termination of Members.
-----------------------------------------------------
No Member shall withdraw or be terminated from the Company.
ARTICLE VI
DURATION; TERMINATION
Section 6.1 Duration. The Company shall terminate approximately
--------
120 days (as determined by the Managers and specified in a written notice to all
Members) after the disposition of all of the Stock; provided that if in the
opinion of the Managers there is some risk that the Company may have obligations
or liabilities (contingent or otherwise), the term of the Company may be
extended by the Managers until such risk no longer merits continuing the Company
in the opinion of the Managers.
-9-
<PAGE>
Section 6.2 Liquidation of Company Interests.
--------------------------------
(a) Upon termination, the Company shall be liquidated in an orderly
manner. The Managers shall be the liquidator(s) to wind up the affairs of the
Company pursuant to this Agreement.
(b) Upon termination of the Company, a final allocation of all items
of income, loss and expense shall be made in accordance with Article II hereof
and all other relevant provisions hereof and the Company's liabilities and
obligations to its creditors shall be paid or adequately provided for prior to
any distributions to the Members. After payment or provision for payment of all
debts of the Company, the remaining assets, if any, shall be distributed among
the Members in accordance with their respective Capital Accounts.
ARTICLE VII
VALUATION
Section 7.1 Normal Valuation. For purposes of this Agreement, the
----------------
value of any security as of any date (or in the event such date is a holiday or
other day which is not a business day, as of the immediately preceding business
day) shall be determined as follows:
(a) a security which is listed on a recognized securities exchange or
The NASDAQ National Market ("NASDAQ") shall be valued at the average of its last
------
"bid" price on each trading day during the five trading day periods ending
immediately prior to the date of determination, or if no sales occurred on any
such day, the mean between the closing "bid" and "asked" prices on such day;
(b) a security which is traded over-the-counter (other than on
NASDAQ) shall be valued at the average of its last "bid" price on each trading
day during the five trading day periods ending immediately prior to the date of
determination, or if no sales occurred on any such day, the mean between the
closing "bid" and "asked" prices on such day; and
(c) all other securities shall be valued on such date at fair market
value in such manner as the Managers determine proper.
Section 7.2 Restrictions on Transfer or Blockage. Subject to the
------------------------------------
proviso in Section 7.1, any security which is held under a representation that
it has been acquired for investment and not with a view to public sale or
distribution, or which is held subject to any other restriction on transfer, or
where the size of the Company's holdings compared to the trading volume would
affect its marketability, shall be valued at such discount from the value
determined under Section 7.1 above as determined by the Managers to properly
reflect the marketability of such security.
-10-
<PAGE>
ARTICLE VIII
BOOKS OF ACCOUNT
Section 8.1 Books. The Company shall maintain complete and accurate
-----
books of account of the Company's affairs at the Company's principal office,
which books shall be open to inspection by any Member (or such Member's
authorized representative) at any time during ordinary business hours.
Section 8.2 Fiscal Year. The fiscal year of the Company shall begin
-----------
on January 1 each year and shall end on December 31 of such year, unless
otherwise determined by the Managers.
Section 8.3 Tax-Allocations and Reports.
---------------------------
(a) The income, gains, losses, deductions and credits of the Company
shall be allocated, for federal, state and local income tax purposes, among the
Members in accordance with the allocation of such income, gains, losses,
deductions and credits among the Members for computing their Capital Accounts;
provided that if any such allocation is not permitted by the Code or other
applicable law, the Company's subsequent income, gains, losses, deductions and
credits shall be allocated among the Members so as to reflect as nearly as
possible the allocation set forth herein in computing their Capital Accounts.
(b) If any Member is treated for income tax purposes as realizing
ordinary income because of receipt of such Member's Company interest (whether
under Code (S)83 or any other applicable law, rule, regulation or doctrine) and
the Company is entitled to any offsetting deduction, the Company's deduction
shall be allocated among the Members in such manner as to, as nearly as
possible, offset such ordinary income realized by such Member.
(c) Notwithstanding any other provision of this Agreement, if any
Member unexpectedly receives an adjustment, allocation or distribution described
in Treasury Regulation (S)1.704-1(b)(2)(ii)(d)(4), (5) or (6) which gives rise
to a negative Capital Account (or which would give rise to a negative Capital
Account when added to expected adjustments, allocations or distributions of the
same type), such Member shall be allocated items of income and gain in an amount
and manner sufficient to eliminate such deficit balance as quickly as possible;
provided that the Company's subsequent income, gains, losses, deductions and
credits shall be allocated among the Members so as to achieve as nearly as
possible the results that would have been achieved if this Section 8.3(c) had
not been in this Agreement; provided further that no such allocation shall be
made which would violate the provisions or purposes of Treasury Regulation
(S)1.704-1(b)(2).
(d) If a Member does not ultimately receive distributions equal to
the amounts allocated to such Member for tax purposes, the Company shall
endeavor to allocate its future income, gains, losses, deductions, and credits
among the Members in a manner which shall result in the tax allocations being as
nearly equal to the distributions as possible.
-11-
<PAGE>
(e) The Company shall use its reasonable efforts to, within 75 days
after the end of each fiscal year, furnish each Member with a copy of the
Company's form K-1 for such fiscal year.
(f) The Company may make a Code (S)754 election at the discretion of
the Managers.
ARTICLE IX
POWER OF ATTORNEY
Each of the undersigned does hereby constitute and appoint the
Managers with full power to act without the others, as such Member's true and
lawful representative and attorney-in-fact, in such Member's name, place and
stead, to make, execute, sign, acknowledge and deliver or file (a) the
Certificate, (b) any amendment to, modification to, restatement of or
cancellation of the Certificate, (c) all instruments, documents and certificates
which may from time to time be required by any law to effectuate, implement and
continue the valid and subsisting existence of the Company, and (d) all
instruments, documents and certificates which may be required to effectuate the
dissolution and termination of the Company. The powers of attorney granted
herein shall be deemed to be coupled with an interest, shall be irrevocable and
shall survive the death, incompetency, disability or dissolution of a Member.
ARTICLE X
MISCELLANEOUS
Section 10.1 Indemnification and Reimbursement for Payments on Behalf
--------------------------------------------------------
of a Member or Terminated Member. If the Company is obligated to pay any amount
- --------------------------------
to a governmental agency (or otherwise makes a payment) because of a Member's
status or otherwise specifically attributable to a Member (including, without
limitation, federal withholding taxes with respect to foreign members, state
personal property taxes, state unincorporated business taxes, etc.), then such
Member (the "Indemnifying Member") shall indemnify the Company in full for the
-------------------
entire amount paid (including, without limitation, any interest, penalties and
expenses associated with such payments). The amount to be indemnified shall be
charged against the Capital Account of the Indemnifying Member, and, at the
option of the Indemnifying Member, either:
(a) promptly upon notification of an obligation to indemnify the
Company, the Indemnifying Member shall make a cash payment to the Company equal
to the full amount to be indemnified (and the amount paid shall be added to the
Indemnifying Member's Capital Account but shall not be treated as a Capital
Contribution), or
(b) the Company shall reduce subsequent distributions which would
otherwise be made to the Indemnifying Member, until the Company has recovered
the amount to be
-12-
<PAGE>
indemnified (and, notwithstanding Section 2.1(a), the amount withheld shall not
be treated as a Capital Contribution).
Section 10.2 Deadlock; Arbitration. All claims, disputes,
---------------------
controversies or other matters in question arising under or relating to this
Agreement (collectively, "Disputes") shall, if unable to be resolved within 10
--------
days of preliminary negotiation between the parties to such Dispute, be resolved
through binding arbitration in accordance with the commercial arbitration rules
and practices of the American Arbitration Association. The site of such
arbitration shall be in Hartford, CT, or such other place as is mutually
agreeable to the parties. The cost of each arbitration proceeding, including
without limitation the arbitrator's compensation and expenses, hearing room
charges, court reporter transcript charges, reasonable attorney fees and
expenses, etc., shall be allocated among the parties to such Dispute based upon
the percentage which the portion of the contested amount in such Dispute not
awarded to each party bears to the amount actually contested by such party. The
parties hereto agree that the remedies provided under this Section 10.2 shall be
the sole and exclusive remedies for resolving and remedying all Disputes
hereunder.
Section 10.3 Amendments. This Agreement may be amended only by the
----------
unanimous consent of all Members.
Section 10.4 Successors. Except as otherwise provided herein, this
----------
Agreement shall inure to the benefit of and be binding upon the Members and
their respective legal representatives, heirs, successors and assigns.
Section 10.5 Governing Law; Severability. This Agreement shall be
---------------------------
governed by, and construed in accordance with, the laws of the State of
Delaware, without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of Delaware or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Delaware. If it is determined by a court of competent jurisdiction that any
provision of this Agreement is invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of this Agreement.
Section 10.6 Notices. All notices, demands and other communications
-------
to be given and delivered under or by reason of provisions under this Agreement
shall be in writing and shall be deemed to have been given when personally
delivered, sent by telecopy or sent by reputable overnight courier service
(charges prepaid) to the addresses or telecopy numbers set forth in Schedule 2
----------
attached hereto or to such other addresses or telecopy numbers as have been
supplied in writing to the Company.
Section 10.7 Singular; Plural; Gender. Wherever from the context it
------------------------
appears appropriate, each term stated in either the singular or the plural shall
include the singular and the plural, and pronouns stated in either the
masculine, the feminine or the neuter gender shall include the masculine,
feminine and neuter.
-13-
<PAGE>
Section 10.8 Complete Agreement; Headings; Counterparts. This
------------------------------------------
Agreement terminates and supersedes all other agreements previously entered into
among any of the Members relating to the subject matter hereof. Descriptive
headings are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement. This Agreement may be executed
in counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts together shall constitute one agreement.
* * *
-14-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement of
Limited Liability Company to be signed as of the date first above written.
MEMBERS:
-------
PHOENIX HOME LIFE MUTUAL INSURANCE
COMPANY
By /s/ Christopher Wilkos
-----------------------------
Its Vice-President
-----------------------------
PHOENIX INVESTMENT PARTNERS, LTD.
By /s/ Michael E. Haylon
-----------------------------
Its Executive Vice-President
-----------------------------
INVERNESS MANAGEMENT FUND I LLC
By: J.C. Comis LLC, its General Partner
By: /s/ James C. Comis III
----------------------------------
Name: James C. Comis III
Its: Managing Member
<PAGE>
SCHEDULE 1
----------
CAPITAL CONTRIBUTIONS
<TABLE>
<CAPTION>
- --------------------------------------------------------
Fund Capital
Member Commitment
------ ----------
- --------------------------------------------------------
<S> <C>
Phoenix $9,500,000
- --------------------------------------------------------
PXP $ 506,250
- --------------------------------------------------------
Inverness $ 18,750
- --------------------------------------------------------
</TABLE>
<PAGE>
SCHEDULE 2
----------
NOTICES
-------
Phoenix Home Life Mutual Insurance Company
1 American Row
Hartford, CT 06115
Attention: John Mulrain
Phoenix Investment Partners, Ltd.
56 Prospect Street
Hartford, CT 06115
Attention: Paul Chute
Inverness Management Fund I LLC
c/o Inverness Management LLC
660 Steamboat Road
Greenwich, CT 06839
Attention: Jim Comis
<PAGE>
EXHIBIT B
AGREEMENT RE JOINT FILING OF
SCHEDULE 13D
------------
The undersigned hereby agrees as follows:
(i) Each of them is individually eligible to use the Schedule 13D to which
this Exhibit is attached, and such Schedule 13D is filed on behalf of each of
them; and
(ii) Each of them is responsible for the timely filing of such Schedule
13D and any amendments thereto, and for the completeness and accuracy of the
information concerning such person contained therein; but none of them is
responsible for the completeness or accuracy of the information concerning the
other persons making the filing, unless such person knows or has reason to
believe that such information is inaccurate.
Dated: September 5, 1998
BROWN'S DOCK, L.L.C.
By: /s/ James C. Comis III
-----------------------------
Print Name: James C. Comis III
Its: Managing Director
PHOENIX HOME LIFE MUTUAL
INSURANCE COMPANY
By: /s/ Christopher Wilkos
-----------------------------
Print Name: Christopher Wilkos
Its: Vice-President
PHOENIX INVESTMENT PARTNERS, LTD.
By: /s/ Michael E. Haylon
-----------------------------
Print Name: Michael E. Haylon
Its: Executive Vice-President
INVERNESS MANAGEMENT FUND I LLC
By: WMD LLC, its General Partner
By: /s/ W. McComb Dunwoody
--------------------------
Print Name: W. McComb Dunwoody
Its: Managing Member
WMD LLC
By: /s/ W. McComb Dunwoody
---------------------------
Print Name: W. McComb Dunwoody
Its: Managing Member
J.C. COMIS LLC
By: /s/ James C. Comis III
----------------------------
Print Name: James C. Comis III
Its: Managing Member
/s/ W. McComb Dunwoody
-------------------------------
W. McComb Dunwoody
/s/ James C. Comis III
-------------------------------
James C. Comis III
