<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Phoenix Duff & Phelps Corporation
-------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------
5) Total fee paid:
---------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
---------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------------
3) Filing Party:
---------------------------------------------------------------------------
4) Date Filed:
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<PAGE>
LOGO
PHOENIX DUFF & PHELPS CORPORATION
56 Prospect Street
Hartford, Connecticut 06115
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 7, 1998
To the Stockholders of
PHOENIX DUFF & PHELPS CORPORATION
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Phoenix
Duff & Phelps Corporation (the "Company") will be held at the headquarters of
the Company, 56 Prospect Street, Hartford, Connecticut 06115, on Thursday, May
7, 1998, at 9:00 a.m., for the purpose of considering and acting upon the
following matters:
1. To elect fourteen directors to serve until the next annual meeting of
stockholders and until their successors are duly elected and qualified;
2. To consider and act upon a proposed amendment to the Company's
Certificate of Incorporation to change the corporate name to Phoenix
Investment Partners, Ltd.; and
3. To consider and act upon such other business as may properly come before
the meeting or any adjournments thereof.
Stockholders of record as of the close of business on March 23, 1998 shall
be entitled to notice of and to vote at the meeting. The transfer books will
not be closed. For ten days prior to the meeting, a list of stockholders
entitled to vote at the meeting will be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, at the offices of Phoenix Duff & Phelps Corporation, 56 Prospect
Street, Hartford, Connecticut 06115. Stockholders who do not expect to attend
the meeting in person are urged to execute and return the accompanying proxy
in the envelope enclosed.
By order of the Board of Directors
Thomas N. Steenburg,
Secretary
Hartford, Connecticut
March 31, 1998
<PAGE>
PROXY STATEMENT
PHOENIX DUFF & PHELPS CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
MAY 7, 1998
GENERAL INFORMATION
This proxy statement is being furnished to the stockholders of Phoenix Duff
& Phelps Corporation, a Delaware corporation (the "Company"), 56 Prospect
Street, Hartford, Connecticut 06115, in connection with the solicitation of
proxies by its Board of Directors for use at the annual meeting of
stockholders to be held on Thursday, May 7, 1998 and at any adjournments
thereof. The approximate date on which this proxy statement and the
accompanying proxy are first being sent to stockholders is March 23, 1998.
The proxy is revocable at any time before it is voted by a subsequently
dated proxy, by written notification to the persons named therein as proxies,
which may be mailed or delivered to the Company at the above address, or by
attendance at the meeting and voting in person. All shares represented by
effective proxies will be voted at the meeting and at any adjournments
thereof.
If the enclosed proxy is properly executed and returned in time for voting
with a choice specified thereon, the shares represented thereby will be voted
as indicated thereon. If no specification is made, the proxy will be voted by
the proxy committee for the election as directors of the nominees named below
(or substitutes therefor, if any nominees are unable or refuse to serve), for
the approval of the proposed amendment to the Company's Certificate of
Incorporation to change the corporate name to Phoenix Investment Partners,
Ltd. and in its discretion upon such matters not presently known or determined
which may properly come before the meeting.
The Company has one class of voting stock outstanding, Common Stock, par
value $.01 per share ("Common Stock"). On March 23, 1998, shares of
Common Stock were outstanding and entitled to one vote each on all matters to
be considered at the meeting. Stockholders of record as of the close of
business on March 23, 1998 are entitled to notice of and to vote at the
meeting. There are no cumulative voting rights with respect to the election of
directors. On March 23, 1998, shares of the Company's Series A
Convertible Exchangeable Preferred Stock, par value $.01 per share ("Series A
Preferred Stock"), were also outstanding, but are not entitled to vote at the
meeting.
Inspectors of election will be appointed to tabulate the number of shares of
Common Stock represented at the meeting in person or by proxy, to determine
whether or not a quorum is present and to count all votes cast at the meeting.
The inspectors of election will treat abstentions and broker non-votes as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum. With respect to the tabulation of votes cast on a
specific proposal presented to the stockholders at the meeting, abstentions
will be considered as present and entitled to vote with respect to that
specific proposal, whereas broker non-votes will not be considered as present
and entitled to vote with respect to that specific proposal.
<PAGE>
PRINCIPAL HOLDERS OF SECURITIES
The following table shows with respect to each person who is known to be the
beneficial owner of more than 5% of the Common Stock of the Company: (i) the
total number of shares of Common Stock beneficially owned as of March 23,
1998; and (ii) the percent of the Common Stock so owned as of that date:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) COMMON STOCK
- ------------------------------------ ----------------- ------------
<S> <C> <C>
Phoenix Home Life Mutual Insurance Company....... 30,754,000(2) 63.7%
One American Row
Hartford, Connecticut 06102
</TABLE>
The following table shows with respect to each director and nominee for
director of the Company, which includes the five executive officers of the
Company named in the Executive Compensation Table, and with respect to all
directors and executive officers as a group, eighteen in number: (i) the total
number of shares of Common Stock and Series A Preferred Stock beneficially
owned as of March 23, 1998; and (ii) the percent of the Common Stock and
Series A Preferred Stock so owned as of that date:
<TABLE>
<CAPTION>
COMMON STOCK SERIES A PREFERRED STOCK
------------------------- -------------------------
AMOUNT AND NATURE
AMOUNT AND NATURE OF BENEFICIAL
NAME OF BENEFICIAL OWNER OF BENEFICIAL PERCENT OWNERSHIP(1) PERCENT
- ------------------------ OWNERSHIP(1) ------- ----------------- -------
<S> <C> <C> <C> <C>
Philip R. McLoughlin(3).... 112,436 * -- --
Calvin J. Pedersen(3)(4)... 283,960 * 16,019 *
Michael E. Haylon(3)....... 60,267 * -- --
Clyde E. Bartter(3)(4)..... 64,707 * 4,300 *
William R. Moyer........... 53,737 * -- --
David R. Pepin(3).......... 38,334 * -- --
Robert W. Fiondella(3)..... 73,290 * -- --
Richard H. Booth(3)........ 35,799 * -- --
Edward P. Lyons(3)......... 33,982 * -- --
Marilyn E. LaMarche(3)..... 20,491 * -- --
James M. Oates(3).......... 50,982 * -- --
Ferdinand Verdonck(3)...... 30,982 * -- --
John T. Anderson(3)........ 21,491 * -- --
Glen D. Churchill(3)(4).... 23,624 * 525 *
Donna F. Tuttle(3)(4)...... 35,229 * 610 *
David A. Williams(3)(4).... 32,148 * 375 *
All directors and executive
officers as a group
(18 persons)(3)(4)........ 1,024,075 2.28% 21,829 *
</TABLE>
- --------
*Less than one percent.
(1) Calculated pursuant to Rule 13d-3(d) of the Securities Exchange Act of
1934. Unless otherwise stated below, each such person has sole voting and
investment power with respect to all such shares. Under Rule 13d-3(d),
shares not outstanding which are subject to options, warrants, rights or
conversion privileges exercisable within 60 days are deemed outstanding
for the purpose of calculating the number and percentage
2
<PAGE>
owned by such person, but are not deemed outstanding for the purpose of
calculating the percentage owned by each other person listed.
(2) Based upon the number of shares of Common Stock and Series A Preferred
Stock reported in the most recent Schedule 13D filed by Phoenix Home Life
Mutual Insurance Company with the Securities and Exchange Commission.
Includes 26,400,000 shares of Common Stock beneficially owned by Phoenix
Home Life Mutual Insurance Company and 4,354,000 shares of Common Stock
which could be acquired through the conversion of 1,400,000 shares of
Series A Preferred Stock beneficially owned by Phoenix Home Life Mutual
Insurance Company. Each share of Series A Preferred Stock is convertible
at any time into 3.11 shares of Common Stock.
(3) Includes shares of Common Stock and Series A Preferred Stock which could
be acquired through the exercise of stock options as follows: Mr.
McLoughlin, 95,001 shares of Common Stock; Mr. Pedersen, 138,438 shares of
Common Stock, 8,677 shares of Series A Preferred Stock; Mr. Haylon, 46,667
shares of Common Stock; Mr. Bartter, 18,000 shares of Common Stock, 1,800
shares of Series A Preferred Stock; Mr. Moyer, 40,001 shares of Common
Stock; Mr. Pepin, 33,334 shares of Common Stock; Mr. Fiondella, 43,290
shares of Common Stock; Mr. Booth, 32,799 shares of Common Stock; Mr.
Lyons, 30,982 shares of Common Stock; Ms. LaMarche, 20,491 shares of
Common Stock; Mr. Oates, 30,982 shares of Common Stock; Mr. Verdonck,
30,982 shares of Common Stock; Mr. Anderson, 20,491 shares of Common
Stock; Mr. Churchill, 20,491 shares of Common Stock, 375 shares of Series
A Preferred Stock; Ms. Tuttle, 30,982 shares of Common Stock, 375 shares
of Series A Preferred Stock; Mr. Williams, 30,982 shares of Common Stock,
375 shares of Series A Preferred Stock; all directors and executive
officers as a group, 708,915 shares of Common Stock, 11,602 shares of
Series A Preferred Stock.
(4) Includes shares of Common Stock which could be acquired through the
conversion of shares of Series A Preferred Stock beneficially owned by
such person. Each share of Series A Preferred Stock is convertible at any
time into 3.11 shares of Common Stock.
ELECTION OF DIRECTORS
NOMINEES AND DIRECTORS
At the meeting, fourteen directors are to be elected to hold office until
the next annual meeting of stockholders and until their successors are duly
elected and qualified. All of the nominees are presently directors of the
Company. The affirmative vote of the holders of a plurality of the shares of
Common Stock represented in person or by proxy at the annual meeting is
required to elect directors. It is intended that, in the absence of contrary
specifications, votes will be cast pursuant to the enclosed proxies for the
election of such nominees. Should any of the nominees become unable or
unwilling to accept nomination or election, it is intended, in the absence of
contrary specifications, that the proxies will be voted for the balance of
those named and for a substitute nominee or nominees. However, the Company now
knows of no reason to anticipate such an occurrence. All of the nominees have
consented to be named as nominees and to serve as directors if elected.
The following persons are nominees for election as directors of the Company:
PHILIP R. MCLOUGHLIN--Age--51--Director since--1995
Mr. McLoughlin has been Chairman of the Board of the Company since May
13, 1997 and Chief Executive Officer of the Company since November 1,
1995. Mr. McLoughlin has also been a Director of Phoenix Home Life
Mutual Insurance Company ("Phoenix Home Life") since February 1994 and
3
<PAGE>
has been employed by Phoenix Home Life as Executive Vice President--
Investments since December 1988. In addition, Mr. McLoughlin serves as
President of Phoenix Equity Planning Corporation ("PEPCO"), Chairman of
Phoenix Investment Counsel, Inc. ("PIC") and Chairman and Chief
Executive Officer of National Securities & Research Corporation
("NS&RC"). He also is a member of the Board of Directors of these
corporations, Duff & Phelps Utilities Tax-Free Income Inc. and Duff &
Phelps Utility and Corporate Bond Trust Inc. Mr. McLoughlin also serves
as President and as a Director or Trustee of the Phoenix Funds, Phoenix
Duff & Phelps Institutional Mutual Funds and Phoenix-Aberdeen Series
Fund (collectively, the "Phoenix Mutual Funds"). He is a Director of PM
Holdings, Inc. ("PM Holdings"), Phoenix Charter Oak Trust Company, The
World Trust, a Luxembourg closed-end fund, The Emerging World Trust
Fund, a Luxembourg closed-end fund, and of PXRE Corporation ("PXRE"), a
publicly-traded corporation, and of its wholly-owned subsidiary, PXRE
Reinsurance Company ("PXRE Reinsurance").
CALVIN J. PEDERSEN--Age--56--Director since--1992
Mr. Pedersen has been President of the Company since July 1993. From
January 1992 to July 1993, Mr. Pedersen served as an Executive Vice
President of the Company. Mr. Pedersen was also an Executive Vice
President of Duff & Phelps Inc. ("DPI"), the former parent of the
Company's operating subsidiaries, from 1988 until its dissolution in
1992. From 1986 to 1988, he served as Senior Vice President--Marketing
and Sales of DPI. Mr. Pedersen joined the Company in 1986 from First
Chicago Investment Advisors, an investment management company, where he
was a Managing Director and head of the Account Management and
Administration Division. Mr. Pedersen is also President and Chief
Executive Officer of Duff & Phelps Utilities Income Inc., Duff & Phelps
Utilities Tax-Free Income Inc. and Duff & Phelps Utility and Corporate
Bond Trust Inc. and serves as a Director or Trustee of the Phoenix
Mutual Funds.
MICHAEL E. HAYLON--Age--40--Director since--1995
Mr. Haylon has been an Executive Vice President of the Company since
November 1, 1995. From February 1993 to November 1, 1995, Mr. Haylon
was Senior Vice President--Securities Investments of Phoenix Home Life.
Mr. Haylon is also President of PIC, Executive Vice President of NS&RC
and Executive Vice President of the Phoenix Mutual Funds. From June
1991 through January 1993, Mr. Haylon was Vice President, Public Fixed
Income and from June 1990 through May 1991, he was Vice President,
Public Bond Investments of Phoenix Home Life. Mr. Haylon was Vice
President of Aetna Capital Management from August 1986 until June 1990
and a Managing Director of Aetna Bond Investors from February 1989
until June 1990. Mr. Haylon also serves as a member of the Boards of
Directors of PIC, PEPCO and NS&RC.
CLYDE E. BARTTER--Age--66--Director since--1997
Mr. Bartter has been President of Duff & Phelps Investment Management
Co. since April 7, 1997. He also serves as a member of the Board of
Directors of Duff & Phelps Investment Management Co. Prior to joining
Duff & Phelps Investment Management Co. in 1983, Mr. Bartter was
President of Portfolio Advisory Services, an investment counsel
subsidiary of the National City Bank of Cleveland.
ROBERT W. FIONDELLA--Age--55--Director since--1995
Mr. Fiondella has been Chairman of the Board, President and Chief
Executive Officer of Phoenix Home Life since February 1994. From July
1992 until February 1994, Mr. Fiondella served as President and
Principal Operating Officer and from February 1989 until July 1992, as
President and
4
<PAGE>
Chief Operating Officer, of Phoenix Home Life. Mr. Fiondella is the
President of PM Holdings and is also a member of the Board of Directors
of several of Phoenix Home Life's subsidiaries, including PM Holdings
and Phoenix Charter Oak Trust Company. Mr. Fiondella is also a member
of the Board of Directors of PIC, PEPCO and NS&RC. Mr. Fiondella is
also a member of the Board of Directors of PXRE, PXRE Reinsurance,
Advest Group, Inc. and Loctite Corporation.
RICHARD H. BOOTH--Age--51--Director since--1995
Mr. Booth has been Executive Vice President of Phoenix Home Life since
October 1994. Mr. Booth is also an officer and Director of several
subsidiaries of Phoenix Home Life. Prior to joining Phoenix Home Life
in October 1994, Mr. Booth was President and Chief Operating Officer
and a Director of The Travelers Corporation, where he was employed for
16 years. Mr. Booth is also a member of the Board of Directors of
Hartford Steam Boiler.
EDWARD P. LYONS--Age--71--Director since--1995
From 1984 through February 20, 1996, Mr. Lyons was a Director of
Phoenix Home Life. He presently serves on its Directors Advisory Board.
Prior to 1985, Mr. Lyons was Vice Chairman of the Olin Corporation. Mr.
Lyons is also Chairman of the Board of Directors of Carberry Investment
Management Corp. and a member of the Board of Directors of PXRE and
PXRE Reinsurance.
MARILYN E. LAMARCHE--Age--63--Director since--1995
Ms. LaMarche has been a Director of Phoenix Home Life since 1989. Ms.
LaMarche has been a Limited Managing Director of Lazard Freres & Co.,
L.L.C. (and a general partner of its predecessor), a New York based
investment banking company, since January 1983.
JAMES M. OATES--Age--51--Director since--1995
Mr. Oates has been Chairman of IBEX Capital Markets, LLC since October
1996 and Managing Director of the Wydown Group since April 1994. From
1984 through 1994, he served as President and Chief Executive Officer
of Neworld Bank. Mr. Oates is also a Director or Trustee of the Phoenix
Mutual Funds. In addition, Mr. Oates is a Director of AIB Govett Funds,
Inc., Investors Financial Services Corporation, Investors Bank & Trust
Co., Blue Cross and Blue Shield of New Hampshire, Plymouth Rubber
Company, Massachusetts Housing Partnership, Stifel Financial, and
Command Systems.
FERDINAND VERDONCK--Age--55--Director since--1995
Mr. Verdonck has been Managing Director of Almanij N.V., the holding
company of the Almanij-Kredietbank Group, since 1992. He also serves as
a Director of Kredietbank N.V., Brussels, Belgium, and of various
affiliated companies in the Group. From 1984 to 1992, Mr. Verdonck
served in various senior executive capacities with N.V. Bekaert S.A., a
Belgian steel wire and cord manufacturer, both in Belgium and New York
City. He was a Senior Vice President of Lazard Freres & Co. in New York
from 1977 to 1984, having previously served as an International Banking
Officer of Continental Illinois Bank in Chicago.
5
<PAGE>
JOHN T. ANDERSON--Age--67--Director since--1996
Mr. Anderson has been of counsel to Lord, Bissell & Brook, a Chicago
law firm, since January 2, 1996. From 1966 to January 2, 1996, Mr.
Anderson was a partner of Lord, Bissell & Brook.
GLEN D. CHURCHILL--Age--64--Director since--1992
Mr. Churchill is presently retired. Prior to May 1, 1992, Mr. Churchill
was President and Chief Executive Officer of West Texas Utilities
Company for more than the preceding five years.
DONNA F. TUTTLE--Age--50--Director since--1992
Ms. Tuttle has been President of Korn Tuttle Capital Group, a Los
Angeles, California investment consulting firm, since March 1992. From
January 1990 to March 1992, Ms. Tuttle was Chairman and Chief Executive
Officer of Ayer Tuttle, a division of an international advertising
agency. From January 1988 to January 1989, Ms. Tuttle served as U.S.
Deputy Secretary of Commerce. Ms. Tuttle is also a member of the Board
of Directors of Hilton Hotels Corp.
DAVID A. WILLIAMS--Age--56--Director since--1993
Mr. Williams is President of Roxborough Holdings Ltd. Mr. Williams was
President and Chief Executive Officer of Beutel, Goodman & Company
Ltd., a Toronto, Canada investment counseling firm ("BG"), from 1991 to
December 1994. From 1971 to 1991, he served as Vice President of BG.
Mr. Williams joined BG in 1969. The Company owns 49% of the outstanding
voting capital stock of BG. Mr. Williams is also a member of the Board
of Directors of Emtech Technologies Corp., Pinetree Capital Ltd.,
Octagon Industries Ltd. and Radiant Energy Ltd., Adviser Financial
Network Inc., Global Equity Inc. and Canarco Ltd.
THE BOARD OF DIRECTORS
The business and affairs of the Company are managed under the direction of
the Board of Directors. The Board has responsibility for establishing broad
corporate policies and for the overall performance of the Company. However,
the Board is not involved in day-to-day operating details. Members of the
Board are kept informed of the Company's business by various reports and
documents sent to them, as well as by reports presented at meetings of the
Board and its committees. During 1997, the Board of Directors met times.
No director attended fewer than 75% of the aggregate number of meetings of the
Board of Directors and the committees on which he or she served.
BOARD COMMITTEES
The Board of Directors has three standing committees, the Executive
Committee, the Audit Committee and the Compensation Committee. A fourth
committee, the Stock Option Committee, was dissolved and its functions
reassigned to the Compensation Committee on October 22, 1997.
The Executive Committee is empowered to exercise the authority of the Board
of Directors in the management of the business and affairs of the Company
between meetings of the Board of Directors, except as such authority may be
limited by the provisions of the General Corporation Law of the State of
Delaware. The Executive Committee, which is presently composed of Messrs.
Fiondella (Chairman), Anderson, Booth, Lyons, McLoughlin and Pedersen, did not
meet during 1997.
6
<PAGE>
The Audit Committee recommends to the Board of Directors the appointment of
the independent public accountants for the following year. The Audit Committee
also reviews the scope of the annual audit, the annual financial statements of
the Company and the auditor's report thereon and the auditor's comments
relative to the adequacy of the Company's system of internal controls and
accounting systems. The Audit Committee, which is presently composed of
Messrs. Churchill (Chairman), Lyons and Verdonck and Ms. Tuttle, met four
times during 1997.
Prior to October 22, 1997, the Stock Option Committee administered the
Company's stock incentive plans. The Stock Option Committee, which was
composed of Ms. Tuttle (Chairman) and Messrs. Churchill and Williams, met
three times and acted by written consent once during 1997.
The Compensation Committee reviews management compensation levels and
provides recommendations regarding salaries and other compensation for the
Company's officers, including bonuses and other incentive programs. On October
22, 1997, the Compensation Committee was designated the administrative
committee for the Company's stock incentive program. The Compensation
Committee, which is presently composed of Messrs. Oates (Chairman), Anderson
and Williams and Ms. LaMarche, met four times during 1997, including one
meeting in its capacity as administrator of the stock incentive program.
The Company does not have a standing nominating committee of the Board of
Directors. This function is performed by the Board of Directors. The Company's
By-Laws establish procedures, including advance notice procedures, with regard
to the nomination, other than by or at the direction of the Board of
Directors, of candidates for election as directors. In general, notice must be
received by the Company at its principal executive offices not less than 60
days nor more than 90 days prior to meetings of stockholders of the Company.
Such notice must set forth all information with respect to each such nominee
as required by the federal proxy rules. Such notice must be accompanied by a
signed statement of such nominee consenting to be a nominee and a director, if
elected.
REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION
GENERAL
The Compensation Committee of the Board of Directors is responsible for
establishing, administering and evaluating the Company's policies regarding
the compensation of its executive officers. The Company's compensation
policies are intended to align executive compensation with the business
objectives and performance of the Company. Additionally, the Company's
compensation policies are designed to permit the Company to attract, retain
and motivate executive officers to ensure the long-term success of the
Company.
The compensation of executive officers is composed of three components:
salary, annual incentive compensation and long-term incentive compensation.
The Compensation Committee considers the total compensation of each executive
officer in establishing each element of his compensation. The compensation of
the Company's Chief Executive Officer is subject to the same policies that are
applicable to all executive officers of the Company.
SALARY
In establishing the annual salaries of each of the Company's executive
officers, including the Chief Executive Officer, the responsibilities,
abilities and industriousness of the executive officer and the Company's
performance were considered. The salaries of persons holding similar positions
at comparable companies were also reviewed.
7
<PAGE>
ANNUAL INCENTIVE COMPENSATION
The Board of Directors has adopted two incentive compensation plans, the
Investment Incentive Plan ("IIP") and the Management Incentive Plan ("MIP").
Incentive compensation is intended to be variable and closely tied to
corporate and individual performance in a manner that encourages a continuous
focus on providing top-quality service to clients, increasing productivity and
obtaining new business opportunities in order to increase profitability and
stockholder value.
In 1997, Messrs. McLoughlin, Pedersen, Pepin and participated in the MIP.
Payouts under the IIP are based 75% on the basis of quantitative portfolio
performance results (subject to a maximum aggregate payout of $ million)
and 25% (the "nonquantitative portion") on factors including corporate
earnings and personal performance. The nonquantitative portion of the IIP
(which is capped at $ million) and the entire payout under the MIP are
funded based on achievement of revenue and profitability objectives. Under the
IIP, individual incentive compensation can range from 0% to 300% of salary
based upon the nature of a covered individual's specific job requirements.
Under the MIP, eligible officers with salaries under $100,000 have a payout
range of between 0% and 40% of salary, and officers with salaries of $100,000
or more generally have a payout range of between 0% and 60% of salary.
LONG-TERM INCENTIVE COMPENSATION
Pursuant to the Company's Stock Incentive Plans, key employees of the
Company, including executive officers, are eligible to receive long-term
incentives in a variety of forms including stock options, stock appreciation
rights, restricted stock, phantom stock and other stock based awards. The
purpose of the Stock Incentive Plans is to enable the Company to attract and
retain the best available executive personnel and other key employees, to
provide for the Company's long-term growth and business success and to provide
an incentive for such employees to exert their best efforts on behalf of the
Company and its stockholders. The Compensation Committee believes that the
grant of awards whose value is related to the value of the Company's Common
Stock aligns the interests of stockholders and employees who receive awards.
The Stock Incentive Plans are administered by the Compensation Committee.
The Compensation Committee determines the individuals to whom awards are
granted, the type and amount of awards to be granted, the time of all such
grants and the terms, conditions and provisions of such awards and the
restrictions related thereto. In making awards under the Stock Incentive
Plans, the Compensation Committee considers the recommendations of the
executive officers of the Company, the responsibilities of each grantee, his
past performance and his anticipated future contribution to the Company.
During 1997, only stock options were granted under the Stock Incentive
Plans. The Compensation Committee believes that the grant of stock options
provides a strong incentive for employees to increase stockholder value over
the long term because the full benefit of such awards cannot be realized
unless the value of the Company's Common Stock appreciates over a specified
number of years. Most of the officers of the Company received options in 1997.
The exercise price of options granted in 1997 is equal to the fair market
value per share of Common Stock on the date of grant. Generally, one-third of
each option grant vests on the first, second and third anniversaries of the
date of grant and such options expire ten years after the date of grant.
Amendments adopted in 1993 to the Internal Revenue Code limit the
deductibility for federal income tax purposes of certain compensation payable
to top executive officers of publicly held corporations. Certain types of
compensation are excluded from the limitations. The Company believes that the
limitations are not applicable
8
<PAGE>
to stock options granted under the Stock Incentive Plans. With respect to
annual incentive compensation, the Company has not taken any action to exclude
annual incentive compensation from the limitations on deductibility.
The salary, annual incentive compensation and long-term incentive
compensation paid by the Company to the Chief Executive Officer and the other
four most highly compensated executive officers of the Company in 1997 is set
forth in the tables that follow this Report. The Compensation Committee
believes that the executive officers of the Company are dedicated to
increasing profitability and stockholder value and that the compensation
policies that the Compensation Committee has established and administered
contribute to this focus.
THE COMPENSATION COMMITTEE
James M. Oates (Chairman)
John T. Anderson
Marilyn E. LaMarche
David A. Williams
The foregoing Report of the Compensation Committee on Executive Compensation
shall not be deemed to be incorporated by reference into any filing of the
Company under the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates such
information by reference.
9
<PAGE>
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION TABLE
The following table sets forth certain information regarding the
compensation paid or accrued by the Company to or for the account of the Chief
Executive Officer and each of the other four most highly compensated executive
officers of the Company for services rendered in all capacities during each of
the Company's fiscal years ended December 31, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
------------------ -------------
SECURITIES
NAME AND PRINCIPAL UNDERLYING ALL OTHER
POSITION YEAR SALARY($) BONUS($) OPTIONS(#)(1) COMPENSATION($)(2)
------------------ ---- --------- -------- ------------- ------------------
<S> <C> <C> <C> <C> <C>
Philip R. McLoughlin, 1997 $525,000 $468,167 100,000 $18,468
Chairman of the Board
and Chief Executive
Officer(3)
1996 466,154 443,667 85,000 4,886
1995 -- -- 100,000 --
Calvin J. Pedersen, 1997 498,287 767,817 50,000 20,590
President
1996 456,500 767,900 55,000 6,980
1995 456,500 817,829 100,000 6,653
Michael E. Haylon, 1997 300,000 478,333 60,000 8,925
Executive Vice
President
1996 273,269 500,333 50,000 5,277
1995 247,404 354,302 45,000 4,519
David R. Pepin, 1997 250,000 154,500 30,000 12,520
Executive Vice
President(4)
1996 50,000
1995 25,000
William R. Moyer, 1997
Senior Vice President
and Chief Financial
Officer
1996
1995
</TABLE>
- --------
(1) Number of shares of Common Stock subject to options granted during the
year indicated under the Company's 1992 Long-Term Stock Incentive Plan.
(2) Consists of matching contributions made by the Company pursuant to the
Company's Savings Plan and life insurance premiums paid by the Company.
For 1997, life insurance premiums in the following amounts were paid by
the Company: Mr. McLoughlin, $3,168; Mr. Pedersen, $6,375; Mr. Pepin,
$5,220.
(3) Mr. McLoughlin has been Chief Executive Officer of the Company since
November 1, 1995. During 1995, Mr. McLoughlin was also employed by Phoenix
Home Life and did not receive a separate salary or bonus from the Company
for his services to the Company.
(4) Mr. Pepin resigned as Executive Vice President effective February 4, 1998.
10
<PAGE>
EMPLOYEE STOCK OPTIONS
OPTION GRANTS. The following table sets forth certain information regarding
options to purchase shares of Common Stock granted to the executive officers
of the Company named in the Executive Compensation Table during the Company's
1997 fiscal year:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE
OPTIONS GRANTED TO EMPLOYEES IN PRICE GRANT DATE PRESENT
NAME (#) FISCAL YEAR ($/SH)(2) EXPIRATION DATE VALUE ($)(3)
- ---- --------------- --------------- --------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
Philip R. McLoughlin.... 100,000 5% $8.00 December 31, 2007 $206,420
Calvin J. Pedersen...... 50,000 3 8.00 December 31, 2007 103,210
Michael E. Haylon....... 60,000 3 8.00 December 31, 2007 123,852
David R. Pepin.......... 30,000 2 8.00 December 31, 2007 61,926
William R. Moyer........ 55,000 3 8.00 December 31, 2007 113,531
</TABLE>
(1) These options were granted on December 31, 1997 under the Company's 1992
Long-Term Stock Incentive Plan. These options are non-qualified stock
options. Beginning December 31, 1998, annually, upon the anniversary of
the date of grant of the options, one-third of the options granted become
vested and exercisable, until the third anniversary of the date of grant,
whereupon the options granted are fully vested and exercisable.
(2) The option exercise price is equal to the fair market value per share of
Common Stock on the date of grant.
(3) Calculated pursuant to the Black-Scholes option pricing model. Assumes
with respect to Messrs. McLoughlin, Pedersen, and Moyer expected
volatility of 25%, risk-free rate of return of 5.65%, dividend yield of
2.7%, time to expiration of ten years and no risk of forfeiture.
OPTION EXERCISES. The following table sets forth certain information
regarding options to purchase shares of Common Stock exercised during the
Company's 1997 fiscal year and the number and value of unexercised options to
purchase shares of Common Stock held at the end of the Company's 1997 fiscal
year by the executive officers of the Company named in the Executive
Compensation Table:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS
OPTIONS AT FISCAL AT FISCAL
YEAR END (#) YEAR END ($)(2)
NUMBER OF ---------------------- ------------------------
SHARES ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) VALUE REALIZED ($)(1) UNEXERCISABLE UNEXERCISABLE
- ---- ------------------ --------------------- ---------------------- ------------------------
<S> <C> <C> <C> <C>
Philip R. McLoughlin.... -- -- 95,001/189,999 $ 99,318/86,632
Calvin J. Pedersen...... -- -- 138,438/153,332 201,095/165,231
Michael E. Haylon....... -- -- 46,667/108,333 48,100/45,800
David R. Pepin.......... -- -- 33,334/71,666 33,167/38,333
William R. Moyer........ -- -- 40,001/94,999 41,469/38,132
</TABLE>
- --------
(1) Value realized is equal to the difference between the fair market value
per share of Common Stock on the date of exercise and the option exercise
price per share multiplied by the number of shares acquired upon exercise
of an option.
(2) Value of unexercised in-the-money options is equal to the difference
between the fair market value per share of Common Stock at December 31,
1997 and the option exercise price per share multiplied by the number of
shares subject to options.
11
<PAGE>
The following table sets forth certain information regarding options to
purchase shares of Series A Preferred Stock exercised during the Company's
1997 fiscal year and the number and value of unexercised options to purchase
shares of Series A Preferred Stock held at the end of the Company's 1997
fiscal year by the executive officers of the Company named in the Executive
Compensation Table:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS
OPTIONS AT FISCAL AT FISCAL
YEAR END (#) YEAR END ($)(2)
NUMBER OF ---------------------- ------------------------
SHARES ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) VALUE REALIZED ($)(1) UNEXERCISABLE UNEXERCISABLE
- ---- ------------------ --------------------- ---------------------- ------------------------
<S> <C> <C> <C> <C>
Philip R. McLoughlin.... -- -- -- --
Calvin J. Pedersen...... -- -- 8,677/8,677 $40,446/40,446
Michael E. Haylon....... -- -- -- --
David R. Pepin.......... -- -- -- --
William R. Moyer........ -- -- -- --
</TABLE>
- --------
(1) Value realized is equal to the difference between the fair market value
per share of Series A Preferred Stock on the date of exercise and the
option exercise price per share multiplied by the number of shares
acquired upon exercise of an option.
(2) Value of unexercised in-the-money options is equal to the difference
between the fair market value per share of Series A Preferred Stock at
December 31, 1997 and the option exercise price per share multiplied by
the number of shares subject to options.
EMPLOYMENT AGREEMENTS
On November 1, 1995, Mr. Pedersen entered into an employment agreement with
the Company pursuant to which he serves as President of the Company and
Chairman of the Board of Duff & Phelps Investment Management Co., a subsidiary
of the Company ("Investment Management"). The employment agreement will
terminate on December 31, 1998. Mr. Pedersen's 1998 salary is $552,365,
subject to annual increases. Mr. Pedersen will also receive an annual bonus of
at least $767,817. The employment agreement restricts Mr. Pedersen from
diverting any business from the Company for a period of three years after
termination of his employment.
The employment agreement is terminable by the Company in the event of the
death or incapacity of Mr. Pedersen or if Mr. Pedersen commits an act of
embezzlement or fraud or any act of dishonesty against the Company, neglects
his assigned duties, which neglect continues for at least 90 days after
written notice has been delivered to him, or engages in conduct which is
demonstrably and materially injurious to the Company or its employees
("Cause").
The employment agreement is terminable by Mr. Pedersen in the event of (a) a
materially adverse change in his title or an assignment to him of any duties
or responsibilities inconsistent with his title, (b) a reduction in his base
salary or consulting fees or a failure to pay him any compensation or
benefits, (c) requiring him to be based outside a 30-mile radius from Chicago,
(d) a failure to continue his participation in any material compensation or
employee benefit plan, (e) a material breach of the employment agreement by
the Company, or (f) a failure to obtain an agreement from any person acquiring
all or substantially all the assets and business of the Company to assume the
employment agreement ("Good Reason"). In the event that Mr. Pedersen
terminates
12
<PAGE>
the employment agreement for Good Reason or the Company terminates the
employment agreement other than as a result of his death or incapacity or for
Cause, Mr. Pedersen will be entitled to receive severance pay, in a single
payment, in an amount equal to the aggregate base salary, consulting fees and
guaranteed bonus he would have been entitled to receive if his employment or
retention had continued through the term of the employment agreement, and to
receive through the earlier of 12 months after termination or the end of the
term of the employment agreement, the life insurance, disability, medical,
dental and hospitalization benefits he was receiving immediately prior to
termination. Additionally, upon termination, one-third of all unvested stock
options and stock appreciation rights held by him on the date of termination
will vest and become exercisable, one-third of such options and stock
appreciation rights will vest and become exercisable on the first anniversary
of the date of termination and one-third of such options and stock
appreciation rights will vest and become exercisable on the second anniversary
of the date of termination. Notwithstanding the foregoing, to the extent that
the payments and benefits (including the acceleration of options and stock
appreciation rights) would be subject to the excise tax on "excess parachute
payments" imposed under Section 4999 of the Internal Revenue Code, the
payments and benefits shall be reduced to the extent necessary so that no
payment to be made or benefit to be provided to Mr. Pedersen shall be subject
to such excise tax.
SEVERANCE AGREEMENTS
Messrs. McLoughlin, and Pepin have entered into severance agreements with
the Company. Each agreement provides for payment in the event Phoenix Home
Life and/or its subsidiaries' ownership percentage of the Company falls below
50% or upon the merger, consolidation, acquisition or other organizational
change or event determined by the Executive Committee of the Company's Board
of Directors (collectively a "Change of Control Event"). The agreements
provide that upon a Change of Control Event, if the employee's employment is
terminated without Cause, as defined in the agreement, or if the employee
terminates employment for Good Reason, as defined (including resignation
following reduction in title, functional responsibilities or base salary) the
Company will pay severance benefits. The benefit is to be made in a single
payment in an amount equal to two times (three times, in the case of Mr.
McLoughlin) the sum of the employee's annualized base salary at the time, the
average of the prior three year's bonus or short-term incentive compensation
payments, and the matching contributions made by the Company to its qualified
and non-qualified savings and investment plans during the calendar year
preceding the termination date. Further, one-third of any unvested stock
options granted under the 1992 Long-Term Stock Incentive Plan will vest as of
termination, and a further one-third will vest on each of the first two
anniversaries of termination. In addition, the employee can continue to
participate, at his own expense, in any life, accident and health insurance
programs in which he participated at the time of his termination.
Notwithstanding the foregoing, in the event that the payment and benefits
would constitute an excess parachute payment, the total amount payable will be
reduced so that no excess parachute payment results. Upon Mr. Pepin's
resignation as an officer of the Company, the obligations under his severance
agreement were assumed by Phoenix Home Life.
DIRECTORS' COMPENSATION
Directors who are employees of the Company do not receive any compensation
for serving as directors of the Company. In 1998, other directors receive an
annual retainer of $24,000 and an additional $3,000 payable to any such
director who serves as a chairman of a committee of the Board of Directors,
plus an attendance fee for each such director of $1,000 per regular meeting
and $750 per committee meeting. Under the Company's 1992 Long-Term Stock
Incentive Plan, each non-employee director ("Outside Director") is
automatically granted on
13
<PAGE>
the date he is first elected to the Board of Directors an option to purchase
10,000 shares of Common Stock of the Company at an exercise price per share
equal to the fair market value per share of Common Stock on the date of grant.
Such options become exercisable one year after the date of grant and expire
ten years after the date of grant. Half of each Outside Director's annual
retainer is paid in the form of an option to purchase shares of Common Stock.
Each Outside Director may also elect to receive an option to purchase shares
of Common Stock in lieu of being paid any portion or all of the half of the
annual retainer that would otherwise be paid in cash. The number of shares of
Common Stock subject to any such option is equal to the amount of the
director's annual retainer to be paid in the form of an option divided by 15%
of the fair market value of a share of Common Stock on the date of grant. The
option price per share for any such option is equal to 85% of the fair market
value of a share of Common Stock on the date of grant. Such options become
exercisable one year after the date of grant and expire ten years after the
date of grant. On January 31, 1997, Messrs. Anderson, Booth, Churchill,
Fiondella, Lyons, Oates, Verdonck and Williams and Ms. LaMarche and Tuttle
were each granted an option to purchase 10,491 shares of Common Stock of the
Company at an exercise price equal to $6.49 per share as the option portion of
their annual retainer for 1997. Such options became exercisable in full on
January 31, 1998 and expire on January 31, 2007. On January 31, 1997, Messrs.
Anderson, Booth, Churchill, Fiondella, Lyons, Oates, Verdonck and Williams and
Ms. LaMarche and Tuttle were each granted an option to purchase 6,250 shares
of Common Stock of the Company at an exercise price equal to $6.49 per share
in order to equalize the options granted to each director in connection with
his initial election as a director of the Company. Such options became
exercisable in full on January 31, 1998 and expire on January 31, 2007. On
February 14, 1997, Messrs. Fiondella, Lyons, Oates, Verdonck and Williams and
Ms.Tuttle were each granted an option to purchase 10,491 shares of Common
Stock of the Company at an exercise price equal to $6.49 per share in lieu of
being paid the cash portion of their annual retainer for 1997. Such options
became exercisable in full on February 14, 1998 and expire on February 14,
2007. Additionally, all Outside Directors are reimbursed for expenses incurred
in attending board meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors maintains a Compensation Committee, which presently
consists of Messrs. Oates (Chairman), Anderson and Williams and Ms. LaMarche.
None of the members of the Compensation Committee is presently or was formerly
an officer or employee of the Company or any of its subsidiaries.
CERTAIN TRANSACTIONS
Mr. Pedersen is the President and Chief Executive Officer of Duff & Phelps
Utilities Income Inc., a closed-end investment company ("Utilities Income
Fund"). Investment Management serves as the investment adviser of the
Utilities Income Fund. Pursuant to an investment advisory agreement between
Investment Management and the Utilities Income Fund, Investment Management
received $12.7 million in fees from the Utilities Income Fund in 1997.
Mr. McLoughlin is a director and Mr. Pedersen is President and Chief
Executive Officer of Duff & Phelps Utilities Tax-Free Income Inc., a closed-
end investment company ("Utilities Tax-Free Fund"). Investment Management
serves as the investment adviser of the Utilities Tax-Free Fund. Pursuant to
an investment advisory agreement between Investment Management and the
Utilities Tax-Free Fund, Investment Management received $1.0 million in fees
from the Utilities Tax-Free Fund in 1997.
14
<PAGE>
Mr. McLoughlin is a director and Mr. Pedersen is President and Chief
Executive Officer of Duff & Phelps Utility and Corporate Bond Trust Inc., a
closed-end investment company ("Utility and Corporate Bond Trust"). Investment
Management serves as the investment adviser of the Utility and Corporate Bond
Trust. Pursuant to an investment advisory agreement between Investment
Management and the Utility and Corporate Bond Trust, Investment Management
received $1.8 million in fees from the Utility and Corporate Bond Trust in
1997.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix Duff &
Phelps Institutional Mutual Funds and Mr. McLoughlin is President and Messrs.
and Pepin are Executive Vice Presidents of the Phoenix Duff & Phelps
Institutional Mutual Funds, an open-end investment company. PIC and Investment
Management serve as investment advisers of the Phoenix Duff & Phelps
Institutional Mutual Funds. Pursuant to investment advisory agreements between
PIC and Investment Management and the Phoenix Duff & Phelps Institutional
Mutual Funds, PIC and Investment Management received a total of $.4 million in
fees from the Phoenix Duff & Phelps Institutional Mutual Funds in 1997.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix Series
Fund and Mr. McLoughlin is President and Messrs. and Pepin are Executive Vice
Presidents of the Phoenix Series Fund, an open-end investment company. PIC
serves as the investment adviser of the Phoenix Series Fund. Pursuant to an
investment advisory agreement between PIC and the Phoenix Series Fund, PIC
received $34.2 million in fees from the Phoenix Series Fund in 1997.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix Multi-
Portfolio Fund and Mr. McLoughlin is President and Messrs. and Pepin are
Executive Vice Presidents of the Phoenix Multi-Portfolio Fund, an open-end
investment company. PIC serves as the investment adviser to six portfolios of
the Phoenix Multi-Portfolio Fund. Pursuant to an investment advisory agreement
between PIC and the Phoenix Multi-Portfolio Fund, PIC received $5.2 million in
fees from the Phoenix Multi-Portfolio Fund in 1997.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix
Strategic Equity Series Fund and Mr. McLoughlin is President and Messrs. and
Pepin are Executive Vice Presidents of the Phoenix Strategic Equity Series
Fund, an open-end investment company. PIC and NS&RC serve as the investment
advisers of the Phoenix Strategic Equity Series Fund. Pursuant to investment
advisory agreements between PIC, NS&RC and Investment Management and the
Phoenix Strategic Equity Series Fund, PIC, NS&RC and Investment Management
received a total of $4.7 million in fees from the Phoenix Strategic Equity
Series Fund in 1997.
Messrs. McLoughlin, Pedersen and Oates are directors of The Phoenix Edge
Series Fund and Mr. McLoughlin is President and Messrs. and Pepin are
Executive Vice Presidents of The Phoenix Edge Series Fund, an open-end
investment company. PIC serves as the investment adviser to seven funds of The
Phoenix Edge Series Fund. Pursuant to an investment advisory agreement between
PIC and The Phoenix Edge Series Fund, PIC received $5.2 million in fees from
The Phoenix Edge Series Fund in 1997.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix
Strategic Allocation Fund and Mr. McLoughlin is President and Messrs. and
Pepin are Executive Vice Presidents of the Phoenix Strategic Allocation Fund,
an open-end investment company. PIC serves as the investment adviser of the
Phoenix Strategic Allocation Fund. Pursuant to an investment advisory
agreement between PIC and the Phoenix Strategic Allocation Fund, PIC received
$2.1 million in fees from the Phoenix Strategic Allocation Fund in 1997.
15
<PAGE>
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix Multi-
Sector Short Term Bond Fund and Mr. McLoughlin is President and Messrs. and
Pepin are Executive Vice Presidents of the Phoenix Multi-Sector Short Term
Bond Fund, an open-end investment company. NS&RC serves as the investment
adviser of the Phoenix Multi-Sector Short Term Bond Fund. NS&RC did not
receive any fees from the Phoenix Multi-Sector Short Term Bond Fund in 1997.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix
Worldwide Opportunities Fund and Mr. McLoughlin is President and Messrs. and
Pepin are Executive Vice Presidents of the Phoenix Worldwide Opportunities
Fund, an open-end investment company. NS&RC serves as the investment adviser
of the Phoenix Worldwide Opportunities Fund. Pursuant to an investment
advisory agreement between NS&RC and the Phoenix Worldwide Opportunities Fund,
NS&RC received $1.2 million in fees from the Phoenix Worldwide Opportunities
Fund in 1997.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix Income
and Growth Fund and Mr. McLoughlin is President and Messrs. and Pepin are
Executive Vice Presidents of the Phoenix Income and Growth Fund, an open-end
investment company. NS&RC serves as the investment adviser of the Phoenix
Income and Growth Fund. Pursuant to an investment advisory agreement between
NS&RC and the Phoenix Income and Growth Fund, NS&RC received $5.9 million in
fees from the Phoenix Income and Growth Fund in 1997.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix Multi-
Sector Fixed Income Fund and Mr. McLoughlin is President and Messrs. and Pepin
are Executive Vice Presidents of the Phoenix Multi-Sector Fixed Income Fund,
an open-end investment company. NS&RC serves as the investment adviser of the
Phoenix Multi-Sector Fixed Income Fund. Pursuant to an investment advisory
agreement between NS&RC and the Phoenix Multi-Sector Fixed Income Fund, NS&RC
received $1.9 million in fees from the Phoenix Multi-Sector Fixed Income Fund
in 1997.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix
California Tax-Exempt Fund and Mr. McLoughlin is President and Messrs. and
Pepin are Executive Vice Presidents of the Phoenix California Tax-Exempt Fund,
an open-end investment company. NS&RC serves as the investment adviser of the
Phoenix California Tax-Exempt Fund. Pursuant to an investment advisory
agreement between NS&RC and the Phoenix California Tax-Exempt Fund, NS&RC
received $.5 million in fees from the Phoenix California Tax-Exempt Fund in
1997.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix-Aberdeen
Series Fund and Mr. McLoughlin is President and Messrs. and Pepin are
Executive Vice Presidents of the Phoenix-Aberdeen Series Fund. The Company
serves as the administrator of the Phoenix-Aberdeen Series Fund and receives a
15 basis point fee. PIC serves as one of two subadvisers to the Global Small
Cap portfolio of the Phoenix-Aberdeen Series Fund. The Company received $
thousand and PIC received $123 thousand in fees from the Phoenix-Aberdeen
Series Fund in 1997.
PEPCO is the principal underwriter/distributor for the Phoenix Mutual Funds.
PEPCO received $ million in fees for such services from the Phoenix
Mutual Funds in 1997.
Messrs. McLoughlin, Fiondella and Pepin are directors of Phoenix Charter Oak
Trust Company. PIC serves as the investment adviser of Phoenix Charter Oak
Trust Company, but no fees were earned from Phoenix Charter Oak Trust Company
in 1997.
16
<PAGE>
On November 15, 1993, the Company (i) purchased 43,333 Class 3 Common Shares
of Beutel, Goodman & Company Ltd. ("BG"), representing 40% of the outstanding
voting capital stock of BG, for a purchase price of $7.8 million paid in cash
and (ii) loaned to BG the sum of $3,875,000 evidenced by a 8.5% Redeemable
Unsecured Debenture of BG payable periodically from the net earnings of BG and
maturing as to any unpaid principal on November 14, 2003. On April 1, 1994,
the Company purchased an additional 19,118 Class 3 Common Shares of BG for a
purchase price of $7.2 million. As a result of the purchase of the 19,118
shares, the Company owns 49% of the outstanding voting capital stock of BG.
Also on November 15, 1993, the Company's wholly-owned subsidiary, DP Holdings
Ltd., a New Brunswick corporation, purchased from Crownx Inc. a 8.5%
Redeemable Unsecured Debenture of BG in the principal amount of $19,374,456
for a purchase price of $19,685,522 paid in cash. Said Debenture was to be
paid periodically from the net earnings of BG and to mature on November 14,
2003. Both Debentures were redeemed in 1996. Mr. Williams was President and
Chief Executive Officer of BG until December 1994 and is a director of BG.
Lord, Bissell & Brook, a Chicago law firm, provided legal services to the
Company during 1997 and has been retained to provide legal services to the
Company during 1998. Mr. Anderson is presently of counsel to, and until
January 2, 1996 was a partner of, Lord, Bissell & Brook.
Phoenix Home Life and the Company maintain certain relationships which are
described below.
License Agreement. On November 1, 1995, the Company and Phoenix Home Life
entered into a license agreement (the "License Agreement") pursuant to which
Phoenix Home Life has granted the Company an exclusive license (subject to the
limited non-exclusive license granted to Merrill Lynch Phoenix Fund, Inc.) to
use the name "Phoenix" and the related design (collectively, the "Trademarks")
in the United States and all other jurisdictions where Phoenix Home Life has
rights to such Trademarks in connection with the provision of investment
advisory services to public mutual funds and other institutional investors
with respect to equity and fixed income securities other than securities of
entities primarily engaged in the ownership and/or operation of real estate or
real estate mortgages or other interests in real estate (the "Licensed
Services"). The Company has also been granted the right to sublicense the
Trademarks for use as the name or as a component of the name of any mutual
fund of which the Company is the investment adviser. The exclusive license
will remain in force as long as Phoenix Home Life, PM Holdings and other
subsidiaries of Phoenix Home Life collectively continue to beneficially own
shares of capital stock of the Company representing at least a majority of the
voting power of the Company and for a period of five years from the date that
Phoenix Home Life, PM Holdings and other subsidiaries of Phoenix Home Life
collectively no longer beneficially own shares of capital stock of the Company
representing at least a majority of the voting power of the Company (the
"Term"). The License Agreement also prohibits Phoenix Home Life and its
subsidiaries from competing with the Company by conducting the Licensed
Services during the Term. The License Agreement does not, however, preclude
Phoenix Home Life and its subsidiaries from conducting business in, and
rendering investment advisory services in connection with, life insurance,
variable products, pension products, short-term debt investment management,
management of their general accounts and separate accounts, underwriting and
distribution activities, real estate and securities of entities primarily
engaged in the ownership and/or operation of real estate or real estate
mortgages or other interests in real estate and any other activities (other
than the Licensed Services) currently engaged in by Phoenix Home Life and its
subsidiaries. In the event Phoenix Home Life or any of its subsidiaries
acquires a company conducting the business of the Licensed Services, Phoenix
Home Life, through the acquired company, will have the right to continue to
engage in such business and to use the Trademarks in connection with the
Licensed Services for a period of three years.
17
<PAGE>
Registration Rights Agreement. On November 1, 1995, the Company and PM
Holdings entered into a registration rights agreement (the "Registration
Rights Agreement") pursuant to which the Company has granted PM Holdings and
its transferees the right to require the Company to effect the registration
under the Securities Act of 1933 of all or any part of the shares of Common
Stock and Series A Preferred Stock issued to PM Holdings. As long as the
Company is eligible to use a Form S-3 registration statement (or any successor
form), the number of registrations that the Company will be required to effect
will be unlimited; provided, however, that the Company will not be required to
effect more than three registrations on a registration statement other than
Form S-3 (or any successor form). Additionally, subject to certain conditions,
PM Holdings will also be entitled to piggyback registration rights. Pursuant
to the Registration Rights Agreement, the Company will be required to pay all
expenses in connection with any registration, except underwriting discounts
and selling commissions.
Management of Phoenix Home Life General Account and Separate Account Assets.
PIC manages substantially all of the investment assets of Phoenix Home Life's
General Account, other than investments in real estate and mortgages, under an
agreement with Phoenix Home Life effective January 1, 1995. The agreement
provides, however, that either party thereto may terminate the agreement by
giving 30 days' prior written notice of termination. As of December 31, 1997,
Phoenix Home Life's General Account assets under management by PIC totaled
$8.4 billion. Fees paid to PIC by Phoenix Home Life for the management of its
General Account assets totaled $8.5 million in 1997.
Services and Office Space. Phoenix Home Life provides various support
services to the Company pursuant to an Administrative Agreement dated as of
October 1, 1995 (the "Administrative Agreement"). Currently, these services
are legal, human resources, tax accounting, communications/creative services,
mail and other miscellaneous services. Phoenix Home Life also provides various
computer hardware, software and support services to the Company under a
Computer Services Agreement dated as of October 1, 1995 (the "Computer
Services Agreement"). Either party may terminate (i) the Administrative
Agreement at the end of any calendar year upon 90 days' prior notice and (ii)
the Computer Services Agreement after December 31, 1996 upon 180 days' prior
notice. Phoenix Home Life charged the Company and its subsidiaries $5.9
million for these services (exclusive of rent and direct costs of employee
benefits) in 1997. All such services are provided at rates established from
time to time by negotiation between Phoenix Home Life and the Company. Changes
in such rates are subject to the approval of those disinterested directors of
the Company who are neither employees nor directors of Phoenix Home Life or
its other subsidiaries.
Phoenix Home Life also leases office space to the Company in Hartford,
Connecticut, Enfield, Connecticut, and Greenfield, Massachusetts. Phoenix Home
Life charged the Company and its subsidiaries $3.1 million for office space
rentals in 1997. Phoenix Home Life currently leases an aggregate of
approximately 122,000 square feet of office space to the Company at an average
effective cost per annum of approximately $18 per square foot. The leases for
the Enfield, Connecticut, and Greenfield, Massachusetts office space commenced
as of January 1, 1995 and expire on December 31, 1998 and the lease for the
office space in Hartford, Connecticut, commenced as of June 1, 1995, and
expires on May 31, 2000, with an option to renew for an additional five years.
Management of the Company believes that the rental rates under these leases
are generally at current market rates.
Retail Distribution. WS Griffith & Co., Inc. ("Griffith"), a registered
broker-dealer subsidiary of Phoenix Home Life, is currently the largest retail
distributor of Phoenix investment products, distributing shares of the Phoenix
funds managed by PIC and NS&RC and the variable contracts whose assets are
invested in The Phoenix
18
<PAGE>
Edge Series Fund. Griffith's retail sales force consists of over 1,330
registered representatives, most of whom are also members of Phoenix Home
Life's insurance agent and broker field force. Mutual fund sales by Griffith
accounted for approximately 5% of PIC and NS&RC's total mutual fund sales
other than with respect to money market funds in 1997. Sales of variable
products by Griffith accounted for 68% of PIC and NS&RC's total variable
product sales in 1997.
Griffith distributes Phoenix investment products under a sales agreement
with PEPCO pursuant to which Griffith receives commissions for shares of
mutual funds sold by it ranging from 2.0% to 4.75% of the per share offering
price. Griffith also receives commissions under the sales agreement for
variable products offered by Phoenix Home Life sold by it ranging from 3.0% to
6.0% of purchase or premium payments under such products. The commissions
payable to Griffith under its sales agreement with PEPCO are payable on the
same basis as those commissions paid to unaffiliated brokers for these types
of products. Commissions paid to Griffith by PEPCO totaled $24.0 million in
1997.
Participation in Phoenix Home Life's Employee Benefit Plans. Through
December 31, 1997, employees of PIC and PEPCO and certain employees of the
Company participated in various retirement, profit-sharing, supplemental
insurance and health care and welfare benefit plans sponsored by Phoenix Home
Life. Phoenix Home Life charged the Company the cost of employees'
participation in the plans. Fees paid to Phoenix Home Life relating to
participation of employees of PIC and PEPCO and certain employees of the
Company in plans sponsored by Phoenix Home Life were $3.9 million in 1997.
Certain Other Matters. Transactions between Phoenix Home Life and the
Company entered into in the future, including changes to investment management
fees with respect to the General Account, service fees, leases for office
space and sales commissions to be paid to Griffith, will be determined by
negotiation, will be fair, equitable and reasonable, and will be subject to
the approval by a majority of the directors of the Company who are
disinterested for purposes of Delaware corporate law (consisting in these
circumstances of directors who are neither employees nor directors of Phoenix
Home Life or its other subsidiaries). The Company believes that the financial
aspects of these relationships will be no less favorable to the Company than
those available through unaffiliated third parties.
19
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Company's
Common Stock with the cumulative total return of the Standard & Poor's 500
Stock Index and the common stock of a peer group selected by the Company
("Peer Group Index") for the period beginning on December 31, 1992 (the date
of the Company's initial public offering) through December 31, 1997.
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG PHOENIX DUFF & PHELPS CORPORATION, S&P 500 INDEX AND PEER GROUP
<CAPTION>
Measurement Period PHOENIX DUFF & S&P
(Fiscal Year Covered) PHELPS CORPORATION 500 INDEX PEER GROUP
- ------------------- ------------------ --------- ----------
<S> <C> <C> <C>
Measurement Pt-
3/31/92 $100 $100 $100
FYE 12/31/92 $127.78 $110.44 $133.71
FYE 12/31/93 $184.86 $120.46 $179.32
FYE 12/31/94 $ 95.32 $121.74 $149.76
FYE 12/31/95 $ 98.86 $159.32 $232.82
FYE 12/31/96 $105.81 $195.88 $340.10
FYE 12/31/97 $112.68 $261.25 $328.23
</TABLE>
Assumes $100 invested on December 31, 1992 in the Company's Common Stock,
the Standard & Poor's 500 Stock Index and the common stock of the Peer Group
Index members, and all indices assume dividend reinvestment. Peer Group Index
members are Eaton Vance Corp., Franklin Resources Inc., United Asset
Management Corp. and T. Rowe Price Associates. The Peer Group Index is
capitalization-weighted. The cumulative total return on the Company's Common
Stock has been adjusted to give effect to (i) the distribution of the stock of
the Company's credit rating business to the Company's stockholders in October
1994 and (ii) the merger of Phoenix Securities Group, Inc. into the Company
and the related cash and stock dividends in November 1995.
The foregoing table shall not be deemed to be incorporated by reference into
any filing of the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates such information by reference.
20
<PAGE>
PROPOSED AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO CHANGE
THE CORPORATE NAME
This proposal is to amend the Company's Certificate of Incorporation to
change the corporate name to Phoenix Investment Partners, Ltd.
BACKGROUND
The Company's Board of Directors has approved and recommends to the
stockholders of the Company for their approval and adoption an amendment to
Article FIRST of the Company's Certificate of Incorporation to change the
corporate name to Phoenix Investment Partners, Ltd. If the proposed amendment
is approved, Article FIRST of the Company's Certificate of Incorporation would
be amended to read as follows:
"FIRST: The name of the corporation is Phoenix Investment Partners, Ltd.
(hereinafter the "Corporation")."
REASONS FOR THE AMENDING ARTICLE FIRST
The Board of Directors believes that the change of corporate name is
desirable in order to reflect the focus of the business of the Company on
providing investment management services. Additionally, as a result of several
recent acquisitions by the Company, the Company's investment management
services are now provided through several subsidiaries in addition to Duff &
Phelps Investment Management Co. Accordingly, the Board of Directors believes
that the corporate name should reflect the Company's business as a whole and
not refer to only one of the subsidiaries through which its investment
management services are provided. If the proposed name change is adopted, it
is the intent of the Company to continue to use the tradename Duff & Phelps in
connection with investment management services provided by its subsidiary Duff
& Phelps Investment Management Co.
If the amendment is adopted, stockholders will not be required to exchange
outstanding stock certificates for new certificates.
VOTE REQUIRED
If approved by the stockholders, the proposed amendment to Article FIRST
would become effective upon the filing with the Secretary of State of Delaware
of a Certificate of Amendment to the Company's Certificate of Incorporation,
which filing would take place shortly after the annual meeting.
Adoption of the amendment to Article FIRST of the Company's Certificate of
Incorporation requires the affirmative vote of the holders of a majority of
the shares of Common Stock entitled to notice of and to vote at the annual
meeting.
The Board of Directors recommends a vote FOR the amendment to Article FIRST
of the Company's Certificate of Incorporation to change the corporate name to
Phoenix Investment Partners, Ltd. Proxies solicited by the Board of Directors
will be voted in favor of this proposed amendment unless stockholders specify
to the contrary in their proxies.
21
<PAGE>
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Company's consolidated financial statements for the year ended December
31, 1997 were audited by Price Waterhouse LLP ("Price Waterhouse"),
independent accountants. Price Waterhouse has been engaged as the Company's
independent accountants for fiscal year 1998. Representatives of Price
Waterhouse are expected to attend the annual meeting to respond to appropriate
questions and to make an appropriate statement if they desire to do so.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Stockholder proposals intended to be presented at the next annual meeting
must be received by the Company for inclusion in its proxy statement and form
of proxy relating to such meeting no later than December 1, 1998.
OTHER MATTERS
The Company is not aware of any matters, other than those referred to
herein, which will be presented at the meeting. If any other appropriate
business should properly be presented at the meeting, the proxies named in the
accompanying form of proxy will vote the proxies in accordance with their best
judgment.
EXPENSES OF SOLICITATION
All expenses incident to the solicitation of proxies by the Company will be
paid by the Company. In addition to solicitation by mail, arrangements have
been made with brokerage houses and other custodians, nominees, and
fiduciaries to send the proxy material to their principals, and the Company
will reimburse them for their reasonable out-of-pocket expenses in doing so.
Proxies may also be solicited personally or by telephone or telegraph by
regular employees of the Company.
Hartford, Connecticut
March 31, 1998
22
<PAGE>
PROXY PROXY
PHOENIX DUFF & PHELPS CORPORATION
56 Prospect Street, Hartford, Connecticut 06115
This Proxy is Solicited on Behalf of The Board of Directors
for The Annual Meeting of Stockholders to be held on May 7, 1998
The undersigned hereby appoints Philip R. McLoughlin and Thomas N.
Steenburg, or either of them, as attorneys and proxies, each with the power to
appoint a substitute, and hereby authorizes them to represent and to vote, as
designated below, all the shares of Common Stock of Phoenix Duff & Phelps
Corporation (the "Company") held of record by the undersigned on March 23, 1998,
at the annual meeting of stockholders to be held on May 7, 1998 or any
adjournment thereof.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
- --------------------------------------------------------------------------------
3932--Phoenix Duff & Phelps Corporation
<PAGE>
PHOENIX DUFF & PHELPS CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [_]
1. Election of Directors--
Nominees: John T. Anderson, Clyde E. Bariter,
Richard H. Booth, Glen D. Churchill, Robert W. Fiondelia,
Michael E. Haylon, Marilyn E. LaMarche, Edward P. Lyons,
Philip R. McLoughlin, James M. Oates, Calvin J. Pederson,
Donna F. Tuttle, Ferdinand Verdonck and David A. Williams
---------------------------------------------------------
(Except nominee(s) written above)
For Withhold For All
All All Except
[_] [_] [_]
2. To amend the Company's Certificate of For Against Abstain
Incorporation to change the corporate name to [_] [_] [_]
Phoenix Investment Partners, Ltd.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
FOR Proposals 1 and 2. This proxy is revocable at any time.
Dated: 1998
--------------------------
Signature(s)
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
(IMPORTANT: Please sign your name exactly as it appears hereon. In the case of
joint holders, all should sign. When signing as an attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.)
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
YOUR VOTE IS IMPORTANT.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
3932--Phoenix Duff & Phelps Corporation
