<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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Phoenix Investment Partners, Ltd.
-------------------------------------------------------
(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:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
PHOENIX INVESTMENT PARTNERS, LTD.
56 Prospect Street
Hartford, Connecticut 06115
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 6, 1999
To the Stockholders of
PHOENIX INVESTMENT PARTNERS, LTD.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Phoenix
Investment Partners, Ltd. (the "Company") will be held at One American Row,
Hartford, Connecticut 06102, on Thursday, May 6, 1999, 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;
and
2. 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 22, 1999 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 Investment Partners, Ltd., 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, 1999
<PAGE>
PROXY STATEMENT
PHOENIX INVESTMENT PARTNERS, LTD.
ANNUAL MEETING OF STOCKHOLDERS
May 6, 1999
GENERAL INFORMATION
This proxy statement is being furnished to the stockholders of Phoenix
Investment Partners, Ltd., 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 6, 1999 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 31, 1999.
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) 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 stock outstanding, Common Stock, par value $.01
per share ("Common Stock"). On March 22, 1999, 43,661,524 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 22, 1999 are entitled to notice of and to vote at the meeting. There
are no cumulative voting rights with respect to the election of directors.
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 COMMON STOCK
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 22,
1999; and (ii) the percent of the Common Stock so owned as of that date:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address of Beneficial Owner Beneficial Ownership(1) Common Stock
- - ------------------------------------ ----------------------- ------------
<S> <C> <C>
Phoenix Home Life Mutual Insurance
Company.................................. 30,754,000(2) 64.1%
One American Row
Hartford, Connecticut 06102
Wanger Asset Management, L.P.............. 2,361,100(3) 5.4%
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
Tweedy, Browne Company LLC................ 2,299,372(4) 5.3%
52 Vanderbilt Avenue
New York, New York 10017
</TABLE>
The following table shows with respect to each director and nominee for
director of the Company, each of the five executive officers of the Company
named in the Executive Compensation Table, and all directors and executive
officers as a group, nineteen in number: (i) the total number of shares of
Common Stock beneficially owned as of March 22, 1999; and (ii) the percent of
the Common Stock so owned as of that date:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership(1) Common Stock
- - ------------------------ ----------------------- ------------
<S> <C> <C>
Philip R. McLoughlin(5)................... 230,394 *
Calvin J. Pedersen(5)..................... 310,588 *
Michael E. Haylon(5)...................... 145,243 *
Clyde E. Bartter(5)....................... 84,441 *
John F. Sharry(5)......................... 73,303 *
William R. Moyer(5)....................... 113,835 *
Robert W. Fiondella(5).................... 73,290 *
Richard H. Booth(5)....................... 35,799 *
Edward P. Lyons(5)........................ 54,794 *
Marilyn E. LaMarche(5).................... 41,303 *
James M. Oates(5)......................... 50,982 *
Ferdinand L.J. Verdonck(5)................ 30,982 *
John T. Anderson(5)....................... 21,491 *
Glen D. Churchill(5)...................... 22,457 *
Donna F. Tuttle(5)........................ 34,063 *
David A. Williams(5)...................... 32,148 *
All directors and executive officers as a
group (19 persons)(5).................... 1,482,025 3.3%
</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
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<PAGE>
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 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 the principal amount of
the Company's 6% Convertible Subordinated Debentures due November 1, 2015
(the "Debentures") 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 $35,000,000
principal amount of Debentures beneficially owned by Phoenix Home Life
Mutual Insurance Company. Each $25 principal amount of Debentures is
convertible at any time into 3.11 shares of Common Stock.
(3) Number of shares reported in the most recent Schedule 13G filed by Wanger
Asset Management, L.P. ("Wanger") with the Securities and Exchange
Commission. These securities have been acquired on behalf of discretionary
clients of Wanger. Includes 2,361,100 shares as to which Wanger has shared
voting power and shared dispositive power.
(4) Number of shares reported in the most recent Schedule 13D filed by Tweedy,
Browne Company LLC ("TBC"), TBK Partners, L.P. ("TBK") and Vanderbilt
Partners, L.P. ("Vanderbilt") with the Securities and Exchange Commission.
The securities beneficially owned by TBC are held in the accounts of
various customers of TBC, with respect to which accounts TBC has investment
discretion. Includes 2,057,812 shares as to which TBC has shared
dispositive power, which includes 1,934,339 shares as to which TBC has sole
voting power, 221,560 shares as to which TBK has sole voting power and sole
dispositive power, and 20,000 shares as to which Vanderbilt has sole voting
power and sole dispositive power.
(5) Includes shares of Common Stock which could be acquired through the
exercise of options and the conversion of Debentures as follows: Mr.
McLoughlin, 190,000 shares; Mr. Pedersen, 199,164 shares; Mr. Haylon,
98,333 shares; Mr. Bartter, 51,107 shares; Mr. Sharry, 55,000 shares; Mr.
Moyer, 85,000 shares; Mr. Fiondella, 43,290 shares; Mr. Booth, 32,799
shares; Mr. Lyons, 51,794 shares; Ms. LaMarche, 41,303 shares; Mr. Oates,
30,982 shares; Mr. Verdonck, 30,982 shares; Mr. Anderson, 20,491 shares;
Mr. Churchill, 20,491 shares; Ms. Tuttle, 31,712 shares; Mr. Williams,
32,148 shares; all directors and executive officers as a group, 1,109,596
shares. Also includes shares of restricted Common Stock as follows: Mr.
McLoughlin, 17,210 shares; Mr. Pedersen, 10,220 shares; Mr. Haylon, 25,810
shares; Mr. Sharry, 12,700 shares; Mr. Moyer, 9,160 shares; all directors
and executive officers as a group, 87,540 shares. Each $25 principal amount
of Debentures 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
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<PAGE>
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--52--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
has been employed by Phoenix Home Life as Executive Vice President--
Investments since December 1988. In addition, Mr. McLoughlin serves as
Chairman and President of Phoenix Equity Planning Corporation
("PEPCO"), Chairman of Phoenix Investment Counsel, Inc. ("PIC"), Chief
Executive Officer and Vice Chairman of Duff & Phelps Investment
Management Co. ("DPIM") and Chairman and Chief Executive Officer of
National Securities & Research Corporation ("NS&RC"), subsidiaries of
the Company. He also is a member of the Board of Directors of PIC,
PEPCO, DPIM, NS&RC, Pasadena Capital Corporation, 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,
Aberdeen Asset Management plc, The World Trust, a Luxembourg closed-end
fund, The Emerging World Trust Fund, a Luxembourg closed-end fund, PXRE
Corporation ("PXRE"), a publicly-traded corporation, and of its wholly-
owned subsidiary, PXRE Reinsurance Company ("PXRE Reinsurance").
Calvin J. Pedersen--Age--57--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 and Chairman of DPIM and as a
Director or Trustee of the Phoenix Funds, Phoenix Duff & Phelps
Institutional Mutual Funds and Phoenix-Aberdeen Series Fund.
Michael E. Haylon--Age--41--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,
Executive Vice President of DPIM and Executive Vice President of the
Phoenix Funds, Phoenix Duff & Phelps Institutional Mutual Funds and
Phoenix-Aberdeen Series Fund. From June 1991 through
4
<PAGE>
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--67--Director since--1997
Mr. Bartter has been President of DPIM since April 7, 1997. He also
serves as a member of the Board of Directors of DPIM. Prior to joining
DPIM 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--56--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 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 Boards of Directors of PXRE, PXRE
Reinsurance, Advest Group, Inc. and Barnes Group.
Richard H. Booth--Age--52--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 HSB
Group, Inc., CuraGen Corporation and Aberdeen Asset Management plc.
Edward P. Lyons--Age--72--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--52--Director since--1995
Mr. Oates has been Chairman of IBEX Capital Markets, Inc. 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
Funds, Phoenix Duff & Phelps Institutional Mutual Funds and Phoenix-
Aberdeen Series Fund. In
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<PAGE>
addition, Mr. Oates is a Director of AIB Govett, Inc., Investor
Financial Services Corporation, Investors Bank & Trust Co., Blue Cross
and Blue Shield of New Hampshire, Connecticut River Bancorp, Plymouth
Rubber Company, Stifel Financial, Emerson Investment Management, Inc.
and Command Systems. He also serves as Vice Chairman of Massachusetts
Housing Partnership.
Ferdinand L. J. Verdonck--Age--56--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 Almanij N.V., Kredietbank N.V., Brussels, Belgium,
Kredietbank Luxembourg S.A., 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.
John T. Anderson--Age--68--Director since--1996
Mr. Anderson is presently retired. From January 2, 1996 to December 31,
1998, Mr. Anderson was of counsel to Lord, Bissell & Brook, a Chicago
law firm. From 1966 to January 2, 1996, Mr. Anderson was a partner of
Lord, Bissell & Brook.
Glen D. Churchill--Age--65--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 1983 to January 1989, Ms. Tuttle served as U.S.
Deputy Secretary of Commerce and Under Secretary of Commerce. Ms.
Tuttle is also a member of the Board of Directors of Hilton Hotels
Corp. and Everen Securities.
David A. Williams--Age--57--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 owned 49% of the
outstanding voting capital stock of BG until December 3, 1998. Mr.
Williams is also a member of the Board of Directors of Emtech
Technologies Corp., Enhanced Marketing Services, Esquisure Financial
Network, FRI Corporation, Krystal Bond Corporation, PICO Holdings,
Inc., MicroPulse, Inc., Signature Brands, Ltd., Pinetree Capital
Corporation, Octagon Industries Ltd. and Radiant Energy Corporation.
6
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Directors and executive officers of the Company and beneficial owners of
more than ten percent of the Common Stock file periodic reports regarding
ownership of shares of Common Stock and Debentures with the Securities and
Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act
of 1934. In October 1998, Mr. Pedersen exercised employee stock options with
respect to 13,770 shares of Common Stock and sold such shares. The statement
of changes in beneficial ownership reporting this transaction was
inadvertently untimely filed by the Company's Secretary, Mr. Pedersen's
appointed attorney-in-fact.
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 1998, the Board of Directors met five 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.
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 1998.
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 five
times during 1998.
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. The
Compensation Committee also administers 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
1998.
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
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<PAGE>
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.
Annual Incentive Compensation
The Board of Directors has adopted two incentive compensation plans, the
Management Incentive Plan ("MIP") and the Investment Incentive Plan ("IIP").
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 1998, Messrs. McLoughlin, Pedersen, Haylon, Sharry and Moyer
participated in the MIP. Under the MIP, eligible officers with salaries under
$100,000 have a payout range of between 15% and 25% of salary, and officers
with salaries of $100,000 or more generally have a payout range of between 40%
and 175% of salary. Payouts under the IIP are based 75% on the basis of
quantitative portfolio performance results and 25% (the "nonquantitative
portion") on factors including corporate earnings and personal performance.
Under the IIP, individual incentive compensation can range from 25% to 400% of
salary based upon the nature of a covered individual's specific job
requirements. The entire payout under the MIP and the nonquantitative portion
of the IIP are funded based on achievement of revenue and profitability
objectives.
8
<PAGE>
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 1998, stock options and restricted stock 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 and
certain officers received restricted stock grants in 1998. The exercise price
of options granted in 1998 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 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 1998 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, 1998, 1997 and 1996:
<TABLE>
<CAPTION>
Annual
Compensation Long Term Compensation Awards
------------------ ---------------------------------
Securities All Other
Name and Principal Restricted Underlying Compensation
Position Year Salary($) Bonus($) Stock Awards ($)(1) Options(#)(2) ($)(3)
- - ------------------ ---- --------- -------- ------------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Philip R. McLoughlin..... 1998 $525,000 $704,467 $131,312 75,000 $19,620
Chairman of the Board
and 1997 525,000 468,167 -- 100,000 18,468
Chief Executive
Officer(4) 1996 446,154 443,667 -- 85,000 16,828
Calvin J. Pedersen....... 1998 502,150 767,817 77,554 37,500 22,493
President 1997 498,287 767,817 -- 50,000 20,590
1996 456,500 767,900 -- 55,000 6,980
Michael E. Haylon........ 1998 300,000 564,133 131,312 37,500 8,925
Executive Vice President 1997 300,000 413,333 65,038 60,000 8,925
1996 273,269 500,333 -- 50,000 5,277
John F. Sharry........... 1998 260,000 309,407 103,203 37,500 10,464
President of Retail
Division(5)
William R. Moyer......... 1998 214,038 133,900 44,636 30,000 9,454
Senior Vice President
and 1997 214,038 122,300 25,032 55,000 7,622
Chief Financial Officer 1996 182,692 30,300 -- 40,000 6,458
</TABLE>
- - --------
(1) Value of shares of restricted stock is based upon the closing market price
per share of Common Stock on the date of grant. The number and value of
the aggregate restricted stock holdings of the named executive officers at
December 31, 1998 were as follows: Mr. McLoughlin, 17,210 shares,
$145,252; Mr. Pedersen, 10,220 shares, $86,257; Mr. Haylon, 25,810 shares,
$217,836; Mr. Sharry, 12,700 shares, $107,188; and Mr. Moyer, 9,160
shares, $77,310. Annually, upon the anniversary of the date of grant of
the restricted stock, one-third of the restricted stock granted becomes
vested, until the third anniversary of the date of grant, whereupon the
restricted stock granted is fully vested. Declared dividends are accrued
until the stock restrictions are released, at which time they are paid.
(2) Number of shares of Common Stock subject to options granted during the
year indicated under the Company's 1992 Long-Term Stock Incentive Plan.
(3) Consists of matching contributions made by the Company pursuant to the
Company's Savings Plan and life insurance premiums paid by the Company.
For 1998, life insurance premiums in the following amounts were paid by
the Company: Mr. McLoughlin, $4,320; Mr. Pedersen, $7,650; Mr. Sharry,
$2,958; and Mr. Moyer, $3,341.
10
<PAGE>
(4) Includes total compensation of $291,224, $292,666 and $292,667 in 1998,
1997 and 1996, respectively, for services provided to Phoenix Home Life,
for which the Company was reimbursed by Phoenix Home Life.
(5) Mr. Sharry became an executive officer of the Company on January 1, 1998.
Employee Stock Options
Option Grants. The following table sets forth certain information regarding
options to purchase shares of Common Stock granted to the executive officers
of the Company named in the Executive Compensation Table during the Company's
1998 fiscal year:
<TABLE>
<CAPTION>
Individual Grants
- - ---------------------------------------------------------------------------------------
Number of % of Total
Securities Options Granted Exercise Grant Date
Underlying Options to Employees in Price Present Value
Name Granted (#)(1) Fiscal Year ($/Sh)(2) Expiration Date ($)(3)
- - ---- ------------------ --------------- --------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
Philip R. McLoughlin.... 75,000 4.5% $8.44 December 31, 2008 $154,275
Calvin J. Pedersen...... 37,500 2.3 8.44 December 31, 2008 77,138
Michael E. Haylon....... 37,500 2.3 8.44 December 31, 2008 77,138
John F. Sharry.......... 37,500 2.3 8.44 December 31, 2008 77,138
William R. Moyer........ 30,000 1.8 8.44 December 31, 2008 61,710
</TABLE>
- - --------
(1) These options were granted on December 31, 1998 under the Company's 1992
Long-Term Stock Incentive Plan. These options are non-qualified stock
options. Beginning December 31, 1999, annually, upon the anniversary of
the date of grant of the options, one-third of the options granted become
vested and exercisable, until the third anniversary of the date of grant,
whereupon the options granted are fully vested and exercisable.
(2) The option exercise price is equal to the fair market value per share of
Common Stock on the date of grant.
(3) Calculated pursuant to the Black-Scholes option pricing model. Assumes
expected volatility of 24.9%, risk-free rate of return of 4.67%, dividend
yield of 2.7%, time to expiration of ten years and no risk of forfeiture.
Option Exercises. The following table sets forth certain information
regarding options to purchase shares of Common Stock exercised during the
Company's 1998 fiscal year and the number and value of unexercised options to
purchase shares of Common Stock held at the end of the Company's 1998 fiscal
year by the executive officers of the Company named in the Executive
Compensation Table:
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year End
at Fiscal Year End (#) ($)(2)
Number of ---------------------- --------------------
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized($)(1) Unexercisable Unexercisable
- - ---- --------------- -------------- ---------------------- --------------------
<S> <C> <C> <C> <C>
Philip R. McLoughlin.... -- -- 190,000/170,000 $244,893/ 66,457
Calvin J. Pedersen...... 13,770 $93,705 176,331/139,169 218,770/160,680
Michael E. Haylon....... -- -- 98,933/ 94,167 122,668/ 39,432
John F. Sharry.......... -- -- 55,000/ 72,500 66,901/ 25,549
William R. Moyer........ -- -- 85,001/ 79,999 105,401/ 33,599
</TABLE>
11
<PAGE>
- - --------
(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,
1998 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, which was amended and restated as of March 31, 1998, pursuant to
which he serves as a director and President of the Company and Chairman of the
Board of DPIM. The employment agreement will terminate on December 31, 2002.
Mr. Pedersen's base annual salary will be determined from time to time by the
Compensation Committee, but will not be less than $552,365. Mr. Pedersen is
also entitled to participate in any annual incentive compensation plan adopted
by the Compensation Committee. 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 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, (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, or (g)
the failure of Mr. Pedersen to be nominated and elected as a director of the
Company during any period in which he is employed by the Company and serving
as President of the Company ("Good Reason"). In the event that Mr. Pedersen
terminates 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 two times his base salary as then in effect.
Additionally, upon termination, all unvested stock options and stock
appreciation rights held by him on the date of termination will vest and
become exercisable for a period of three years after termination and all
restrictions applicable to any restricted stock grants made to him will lapse.
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.
12
<PAGE>
Severance Agreements
Messrs. McLoughlin and Haylon 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 three times, in the case of Mr. McLoughlin, and two times, in the case
of Mr. Haylon, 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.
Directors' Compensation
Directors who are employees of the Company do not receive any compensation
for serving as directors of the Company. In 1999, 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 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, 1998, Messrs. Anderson, Booth, Churchill, Fiondella, Lyons, Oates,
Verdonck and Williams and Ms. LaMarche and Tuttle were each granted an option
to purchase 10,406 shares of Common Stock of the Company at an exercise price
equal to $6.53 per share as the option portion of their annual retainer for
1998. Such options became exercisable in full on January 31, 1999 and expire on
January 31, 2008. On January 31, 1998, Messrs. Churchill, Fiondella, Lyons,
Oates, Verdonck and Williams and Ms. LaMarche and Tuttle were each granted an
option to purchase 10,406 shares of Common Stock of the Company at an exercise
price equal to $6.53 per share in lieu of being paid the cash portion of their
annual retainer for 1998. Such options became exercisable in full on January
31, 1999 and expire on January 31, 2008. Additionally, all Outside Directors
are reimbursed for expenses incurred in attending board meetings.
13
<PAGE>
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 a director and the President and Chief Executive Officer of
Duff & Phelps Utilities Income Inc., a closed-end investment company
("Utilities Income Fund"). DPIM serves as the investment adviser of the
Utilities Income Fund. Pursuant to an investment advisory agreement between
DPIM and the Utilities Income Fund, DPIM received $14.7 million in fees from
the Utilities Income Fund in 1998.
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"). DPIM serves as the investment
adviser of the Utilities Tax-Free Fund. Pursuant to an investment advisory
agreement between DPIM and the Utilities Tax-Free Fund, DPIM received $1.0
million in fees from the Utilities Tax-Free Fund in 1998.
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"). DPIM serves
as the investment adviser of the Utility and Corporate Bond Trust. Pursuant to
an investment advisory agreement between DPIM and the Utility and Corporate
Bond Trust, DPIM received $2.3 million in fees from the Utility and Corporate
Bond Trust in 1998.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix Duff &
Phelps Institutional Mutual Funds and Mr. McLoughlin is President and Mr.
Haylon is Executive Vice President of the Phoenix Duff & Phelps Institutional
Mutual Funds, an open-end investment company. PIC and DPIM serve as investment
advisers of the Phoenix Duff & Phelps Institutional Mutual Funds. After
reimbursements, PIC and DPIM did not receive any fees from the Phoenix Duff &
Phelps Institutional Mutual Funds in 1998.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix Series
Fund and Mr. McLoughlin is President and Mr. Haylon is Executive Vice President
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 $33.6
million in fees from the Phoenix Series Fund in 1998.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix Multi-
Portfolio Fund and Mr. McLoughlin is President and Mr. Haylon is Executive Vice
President 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 $4.8 million in fees from the
Phoenix Multi-Portfolio Fund in 1998.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix
Strategic Equity Series Fund and Mr. McLoughlin is President and Mr. Haylon is
Executive Vice President of the Phoenix Strategic Equity Series Fund, an open-
end investment company. During 1998, PIC and NS&RC served as the investment
advisers of the
14
<PAGE>
Phoenix Strategic Equity Series Fund. Pursuant to investment advisory
agreements between PIC and NS&RC and the Phoenix Strategic Equity Series Fund,
PIC and NS&RC received a total of $4.6 million in fees from the Phoenix
Strategic Equity Series Fund in 1998.
Messrs. McLoughlin, Pedersen and Oates are directors of The Phoenix Edge
Series Fund and Mr. McLoughlin is President and Mr. Haylon is Executive Vice
President of The Phoenix Edge Series Fund, an open-end investment company. PIC
and DPIM serve as the investment advisers to twelve funds of The Phoenix Edge
Series Fund. Pursuant to an investment advisory agreement between PIC and DPIM
and The Phoenix Edge Series Fund, PIC and DPIM received $6.3 million in fees
from The Phoenix Edge Series Fund in 1998.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix
Strategic Allocation Fund and Mr. McLoughlin is President and Mr. Haylon is
Executive Vice President 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 $2.0
million in fees from the Phoenix Strategic Allocation Fund in 1998.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix Multi-
Sector Short Term Bond Fund and Mr. McLoughlin is President and Mr. Haylon is
Executive Vice President of the Phoenix Multi-Sector Short Term Bond Fund, an
open-end investment company. During 1998, PIC and NS&RC served as the
investment adviser of the Phoenix Multi-Sector Short Term Bond Fund. Pursuant
to an investment advisory agreement between PIC and NS&RC and the Phoenix
Multi-Sector Short Term Bond Fund, PIC and NS&RC received $.1 million in fees
from the Phoenix Multi-Sector Short Term Bond Fund in 1998.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix-
Aberdeen Worldwide Opportunities Fund and Mr. McLoughlin is President and Mr.
Haylon is Executive Vice President of the Phoenix-Aberdeen Worldwide
Opportunities Fund, an open-end investment company. During 1998, PIC and NS&RC
served as the investment adviser of the Phoenix-Aberdeen Worldwide
Opportunities Fund. Pursuant to an investment advisory agreement between PIC
and NS&RC and the Phoenix-Aberdeen Worldwide Opportunities Fund, PIC and NS&RC
received $1.1 million in fees from the Phoenix-Aberdeen Worldwide
Opportunities Fund in 1998.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix Income
and Growth Fund and Mr. McLoughlin is President and Mr. Haylon is Executive
Vice President of the Phoenix Income and Growth Fund, an open-end investment
company. During 1998, PIC and NS&RC served as the investment adviser of the
Phoenix Income and Growth Fund. Pursuant to an investment advisory agreement
between PIC and NS&RC and the Phoenix Income and Growth Fund, PIC and NS&RC
received $6.7 million in fees from the Phoenix Income and Growth Fund in 1998.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix Multi-
Sector Fixed Income Fund and Mr. McLoughlin is President and Mr. Haylon is
Executive Vice President of the Phoenix Multi-Sector Fixed Income Fund, an
open-end investment company. During 1998, PIC and NS&RC served as the
investment adviser of the Phoenix Multi-Sector Fixed Income Fund. Pursuant to
an investment advisory agreement between PIC and NS&RC and the Phoenix Multi-
Sector Fixed Income Fund, PIC and NS&RC received $1.8 million in fees from the
Phoenix Multi-Sector Fixed Income Fund in 1998.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix
California Tax-Exempt Fund and Mr. McLoughlin is President and Mr. Haylon is
Executive Vice President of the Phoenix California Tax-Exempt
15
<PAGE>
Fund, an open-end investment company. During 1998, PIC and NS&RC served as the
investment adviser of the Phoenix California Tax-Exempt Fund. Pursuant to an
investment advisory agreement between PIC and NS&RC and the Phoenix California
Tax-Exempt Fund, PIC and NS&RC received $.5 million in fees from the Phoenix
California Tax-Exempt Fund in 1998.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix-
Aberdeen Series Fund and Mr. McLoughlin is President and Mr. Haylon is
Executive Vice President of the Phoenix-Aberdeen Series Fund. The Company
serves as the administrator of the Phoenix-Aberdeen Series Fund and receives a
fee equal to 15 basis points of the average daily net assets under management.
PIC serves as one of two subadvisers to the Global Small Cap portfolio of the
Phoenix-Aberdeen Series Fund and performs other services for both portfolios.
The Company received $.1 million and PIC received $.1 million in fees from the
Phoenix-Aberdeen Series Fund in 1998.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix Equity
Series Fund and Mr. McLoughlin is President and Mr. Haylon is Executive Vice
President of the Phoenix Equity Series Fund, an open-end investment company.
PIC and DPIM serve as the investment advisers of the Phoenix Equity Series
Fund. Pursuant to an investment advisory agreement between PIC and DPIM and
the Phoenix Equity Series Fund, PIC and DPIM received $.5 million in fees from
the Phoenix Equity Series Fund in 1998.
Messrs. McLoughlin, Pedersen and Oates are directors of the Phoenix
Investment Trust 97 and Mr. McLoughlin is President and Mr. Haylon is
Executive Vice President of the Phoenix Investment Trust 97, an open-end
investment company. PIC serves as the investment adviser of the Phoenix
Investment Trust 97. After reimbursements, PIC did not receive any fees from
the Phoenix Investment Trust 97 in 1998.
PEPCO is the principal underwriter/distributor for the Phoenix Mutual
Funds. PEPCO received $5.6 million in fees for such underwriter/distributor
services from the Phoenix Mutual Funds in 1998. In addition, PEPCO serves as
transfer agent for the Phoenix Mutual Funds. PEPCO received $6.9 million from
the Phoenix Mutual Funds for such transfer agent services in 1998.
Messrs. McLoughlin and Fiondella 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
1998.
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 owned 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. On December 3, 1998,
the Company sold all of the Class 3 Common Shares of BG owned by it to an
entity unaffiliated with the Company or BG. Mr. Williams was President and
Chief Executive Officer of BG until December 1994 and is a director of BG.
16
<PAGE>
Lord, Bissell & Brook, a Chicago law firm, provided legal services to the
Company during 1998. Until December 31, 1998, Mr. Anderson was 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.
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 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.
17
<PAGE>
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, 1998, Phoenix Home Life's General Account assets under management
by PIC totaled $8.8 billion. Fees paid to PIC by Phoenix Home Life for the
management of its General Account assets totaled $9.5 million in 1998.
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, payroll processing, purchasing, facility
management, communications/ creative services 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 upon 180
days' prior notice. Phoenix Home Life charged the Company and its subsidiaries
$6.0 million for these services (exclusive of rent and direct costs of
employee benefits) in 1998. 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 $3.2 million for office space
rentals in 1998. Phoenix Home Life currently leases an aggregate of
approximately 126,000 square feet of office space to the Company. The leases
for the Enfield, Connecticut, and Greenfield, Massachusetts office space
expire on December 31, 1999 and the lease for the office space in Hartford,
Connecticut, 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 the largest retail
distributor of Phoenix investment products, distributing shares of the Phoenix
funds managed by PIC, NS&RC and DPIM and the variable contracts whose assets
are invested in The Phoenix Edge Series Fund. Griffith's retail sales force
consists of approximately 1,180 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, NS&RC and
DPIM's total mutual fund sales other than with respect to money market funds
in 1998. Sales of variable products by Griffith accounted for 78% of PIC,
NS&RC and DPIM's total variable product sales in 1998.
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 $23.4 million in
1998.
18
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Participation in Phoenix Home Life's Employee Benefit Plans. In 1998,
employees of PIC, PEPCO and DPIM and certain employees of the Company
participated in various retirement, 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, PEPCO and DPIM
and certain employees of the Company in plans sponsored by Phoenix Home Life
were $3.9 million in 1998.
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
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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, 1993 through
December 31, 1998.
Assumes $100 invested on December 31, 1993 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
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RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Company's consolidated financial statements for the year ended December
31, 1998 were audited by PricewaterhouseCoopers LLP
("PricewaterhouseCoopers"), independent accountants. PricewaterhouseCoopers
has been engaged as the Company's independent accountants for fiscal year
1999. Representatives of PricewaterhouseCoopers 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 2000 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, 1999.
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, 1999
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PHOENIX INVESTMENT PARTNERS, LTD.
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 6, 1999
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 Investment Partners,
Ltd. (the "Company") held of record by the undersigned on March 22, 1999, at the
annual meeting of stockholders to be held on May 6, 1999 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.)
- - --------------------------------------------------------------------------------
4502--Phoenix Investment Partners, Ltd.
<PAGE>
PHOENIX INVESTMENT PARTNERS, LTD.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. Election of Directors-
Nominees: John T. Anderson, Clyde E. Bartter,
Richard H. Booth, Glen D. Churchill, Robert W. Fiondella,
Michael E. Haylon, Marilyn E. LaMarche, Edward P. Lyons,
Philip R. McLoughlin, James M. Oates, Calvin J. Pedersen,
Donna F. Tuttle, Ferdinand Verdonck and David A. Williams
----------------------------------------------------------
(Except nominee(s) written above)
For Withhold For All
All All Except
[_] [_] [_]
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 Proposal 1. This proxy is revocable at any time.
Dated: ,1999
------------------------------
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.
4502--Phoenix Investment Partners, Ltd.
