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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 14A
Proxy Statement
Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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-12
PHOENIX INVESTMENT PARTNERS, LTD.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
[X] 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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PHOENIX INVESTMENT PARTNERS, LTD.
56 Prospect Street
Hartford, Connecticut 06115
December 11, 2000
Dear Stockholder:
You are cordially invited to attend a special meeting of the stockholders
of Phoenix Investment Partners, Ltd., or PXP, to be held on January 11, 2001,
at 10:00 A.M., local time, at One American Row, Hartford, Connecticut 06102.
At this meeting, you will be asked to consider and vote on the merger of a
subsidiary of Phoenix Home Life Mutual Insurance Company with and into PXP.
Phoenix Home Life Mutual Insurance Company, through a wholly-owned subsidiary,
owns approximately 58% of the outstanding common stock of PXP. The remaining
42% of the outstanding common stock of PXP is held by PXP's public
stockholders. After the merger, PXP will be the surviving company and will be
wholly-owned by Phoenix Home Life Mutual Insurance Company.
If the merger is completed, you will receive $15.75 for each share of PXP
common stock you own. The aggregate consideration which will be paid in the
merger, including payments to be made to holders of stock options and payments
that may be made to the holders of convertible debentures, is approximately
$434 million.
In order to consider the fairness of the merger to PXP's public
stockholders, PXP's board of directors formed the independent directors
committee, a committee of directors who are neither directors, officers or
employees of Phoenix Home Life Mutual Insurance Company nor employees or
officers of PXP, which negotiated the $15.75 per share merger consideration
and the other terms of the merger agreement. A copy of the merger agreement is
included as Appendix A to the attached proxy statement.
The independent directors committee has concluded that the terms of the
merger agreement are fair to and in the best interests of PXP's public
stockholders. In arriving at this conclusion, the committee considered the
opinion of Salomon Smith Barney, its independent financial advisor, to the
effect that, as of September 10, 2000 and based upon and subject to the
considerations set forth in that opinion, the merger consideration of $15.75
per share was fair to the public stockholders from a financial point of view.
Salomon Smith Barney's opinion addresses the fairness of the merger
consideration only as of September 10, 2000 and not as of the date of the
proxy statement. Salomon Smith Barney's opinion is subject to various
limitations, qualifications, and assumptions described in the opinion, which
is reprinted as Appendix B to the attached proxy statement. You should
carefully read the opinion in its entirety.
The independent directors committee unanimously recommended that the entire
board of directors of PXP approve the merger agreement. The board of directors
of PXP, after careful consideration of the recommendation of the independent
directors committee, unanimously approved the merger agreement, declared it to
be advisable and recommended that it be submitted to PXP's stockholders for
adoption.
The affirmative vote of holders of a majority of the outstanding shares of
PXP common stock is required to adopt the merger agreement. Phoenix Home Life
Mutual Insurance Company has indicated that it will vote its majority
ownership interest in favor of adoption of the merger agreement. Its
affirmative vote will be sufficient to adopt the merger agreement. Therefore,
PXP's public stockholders, other than dissenting stockholders, will receive
$15.75 for each share of PXP common stock owned regardless of whether or how
they vote on the merger. Dissenting stockholders will have appraisal rights as
described in the accompanying proxy statement.
The independent directors committee and the board of directors recommend
that you vote in favor of the adoption of the merger agreement.
The attached notice of meeting and proxy statement describe the merger and
the merger agreement. We urge you to read these materials carefully.
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The merger is an important decision for PXP and its stockholders. Whether
or not you plan to attend the special meeting, I urge you to vote by
completing, dating, signing and promptly returning the enclosed proxy card to
ensure that your shares will be voted at the meeting.
Sincerely,
Philip R. McLoughlin
Chairman
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of this transaction, passed upon the
fairness or merits of this transaction, or passed upon the accuracy or
adequacy of the disclosure in this document. Any representation to the
contrary is a criminal offense.
This proxy statement and form of proxy are being mailed to PXP's
stockholders beginning on or about December 11, 2000.
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PHOENIX INVESTMENT PARTNERS, LTD.
56 Prospect Street
Hartford, Connecticut 06115
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
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Date.............. January 11, 2001
Time.............. 10:00 A.M. local time
Place............. One American Row, Hartford, Connecticut 06102.
Items of Business. 1. To consider and vote on a proposal to adopt the
Agreement and Plan of Merger, dated September 10, 2000, as
amended, among Phoenix Investment Partners, Ltd., or PXP,
PM Holdings, Inc., and Phoenix Home Life Mutual Insurance
Company, pursuant to which a subsidiary of PM Holdings,
Inc. will be merged with and into PXP and each share of PXP
common stock held by PXP's public stockholders will be
converted into the right to receive $15.75 in cash; and
2. To transact such other business as may properly come
before the Special Meeting or any adjournments or
postponements of the Special Meeting.
Record Date....... You are entitled to vote if you were a stockholder of
record on December 6, 2000.
Appraisal Rights.. Any stockholder who does not vote in favor of adoption of
the merger agreement will have the right to dissent and to
seek appraisal of the fair value of his or her shares of
common stock if the merger is consummated. In order to do
so, however, stockholders must properly perfect their
appraisal rights under Delaware law in accordance with the
procedures described in the accompanying proxy statement.
Voting............ Your vote is important. Please vote in one of the following
two ways:
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. attend the special meeting and vote in person; or
. mark, sign, date and promptly return the enclosed proxy
card in the postage-paid envelope.
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TABLE OF CONTENTS
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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING........................... 1
ORGANIZATIONAL STRUCTURE BEFORE AND AFTER THE MERGER...................... 2
SUMMARY TERM SHEET........................................................ 3
The Companies........................................................... 3
The Merger.............................................................. 3
Convertible Debentures.................................................. 4
Vote Required/Security Ownership of Phoenix and PXP's Directors and
Executive Officers..................................................... 4
Consequences of the Merger.............................................. 4
Recommendations of the Independent Directors Committee and PXP's Board
of Directors........................................................... 5
Interests of Certain Persons in the Merger.............................. 5
Conditions to the Merger................................................ 5
Termination of the Merger Agreement..................................... 6
Principal Purposes of the Merger........................................ 6
Independent Directors Committee Considerations.......................... 6
Fairness Opinion of Salomon Smith Barney................................ 7
Appraisal Rights........................................................ 7
Financing; Source of Funds.............................................. 7
Material Federal Income Tax Consequences................................ 7
Accounting Treatment.................................................... 7
Stockholder Lawsuits Challenging the Merger............................. 8
Some Stockholders may seek Appraisal Rights............................. 8
Questions About The Merger.............................................. 8
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION............... 9
INFORMATION CONCERNING THE SPECIAL MEETING................................ 9
Date, Time, and Place of the Special Meeting............................ 9
Purpose of the Special Meeting.......................................... 9
Record Date, Quorum Requirement, and Vote Required...................... 9
Solicitation, Revocation and Use of Proxies............................. 10
Voting Procedures....................................................... 10
Additional Voting Information........................................... 11
Appraisal Rights........................................................ 11
SPECIAL FACTORS........................................................... 11
Background of the Merger................................................ 11
Recommendations of the Independent Directors Committee and Board of
Directors.............................................................. 15
Opinion of the Financial Advisor for the Independent Directors
Committee.............................................................. 17
Financial Analyses...................................................... 20
Financial Analysis of the Financial Advisor to Phoenix.................. 23
Position of Phoenix and PM Holdings as to Fairness of the Merger........ 26
Interests of Certain Persons in the Merger.............................. 26
Consequences of the Merger.............................................. 27
Benefits and Detriments of the Merger to PXP and PXP's Public
Stockholders........................................................... 28
Principal Purposes of the Merger/Plans for Surviving Company After the
Merger................................................................. 29
U.S. Federal Income Tax Consequences.................................... 29
Accounting Treatment.................................................... 30
Public Offerings and Repurchases of Common Stock........................ 31
Financing; Source of Funds.............................................. 31
Fees and Expenses....................................................... 31
Regulatory Requirements................................................. 31
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Stockholder Lawsuits Challenging the Merger............................. 32
Some Stockholders may seek Appraisal Rights............................. 32
THE MERGER AGREEMENT...................................................... 32
The Merger; Time of Closing............................................. 32
Exchange and Payment Procedures......................................... 32
Transfers of Shares..................................................... 33
Treatment of Stock Options.............................................. 33
Representations and Warranties.......................................... 33
PXP's Covenants......................................................... 34
PM Holdings' Covenants.................................................. 34
Phoenix's Performance Guarantee......................................... 34
Conditions.............................................................. 34
Termination of the Merger Agreement..................................... 35
Expenses................................................................ 35
Amendments; Waivers..................................................... 35
TREATMENT OF CONVERTIBLE SUBORDINATED DEBENTURES.......................... 35
APPRAISAL RIGHTS.......................................................... 36
You Have a Right to Dissent............................................. 36
We Must Provide You Notice.............................................. 36
You Must Perfect Appraisal Rights....................................... 37
We Must Notify Each Stockholder Who Has Properly Asserted Appraisal
Rights................................................................. 38
A Petition Must Be Filed in the Delaware Chancery Court................. 38
Stockholders May Request Information.................................... 38
A Court Will Determine Stockholders Entitled to Appraisal Rights, Fair
Value and Allocation of Expenses....................................... 38
No Right to Vote Appraisal Shares or Receive Dividends or Distribution
on Appraisal Shares.................................................... 39
Failure to Perfect Appraisal Rights..................................... 39
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA........................... 39
FINANCIAL PROJECTIONS..................................................... 40
COMMON STOCK MARKET PRICE AND DIVIDEND INFORMATION........................ 41
COMMON STOCK PURCHASE INFORMATION......................................... 42
CURRENT MANAGEMENT OF PXP................................................. 43
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............ 47
PHOENIX................................................................... 49
RELATED PARTY TRANSACTIONS................................................ 53
INDEPENDENT ACCOUNTANTS................................................... 55
WHERE YOU CAN FIND MORE INFORMATION....................................... 55
DOCUMENTS INCORPORATED BY REFERENCE....................................... 55
APPENDICES
Appendix A--Agreement and Plan of Merger................................ A-1
Appendix B--Fairness Opinion of Salomon Smith Barney.................... B-1
Appendix C--Appraisal Rights--Section 262 of the Delaware General
Corporation Law........................................................ C-1
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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING
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Q: Who is entitled to vote at the . filing a revoking instrument
special meeting? or a duly executed proxy
bearing a later date with
PXP's secretary; or
A: Stockholders as of the close of
business on December 6, 2000, the
record date.
. attending the special meeting
and voting in person.
Q: What happens if I sell my shares
before the special meeting?
Q: What do I need to do now?
A: The record date for the special A: Please sign and mail your proxy
meeting is earlier than the card in the enclosed return
expected date of the merger. If you envelope as soon as possible so
transfer your shares of PXP common that your shares can be represented
stock after the record date, but at the meeting, even if you plan to
before the merger, you will retain attend the meeting in person. Soon
your right to vote at the special after the merger is completed, we
meeting, but the right to receive will send you written instructions
the $15.75 per share will pass to explaining how to exchange your
the person to whom you transferred stock certificates for cash.
your shares.
Q: When do you expect the merger to
Q: What approvals does the merger be completed?
require?
A: We are working towards
A: Under Delaware law, the merger completing the merger as quickly as
agreement must be adopted by the possible. We expect to complete the
affirmative vote of the holders of merger in early 2001.
at least a majority of the
outstanding shares of PXP common
stock. Phoenix, which through a
subsidiary owns a majority of the
outstanding shares of common stock,
has indicated its intention to vote
its majority ownership interest in
favor of adoption of the merger
agreement. Accordingly, adoption of
the merger agreement by PXP's
stockholders is assured.
Q: If my shares are held in "street
name" by my broker, will my broker
vote my shares for me?
A: Generally, your broker will not
have the power to vote your shares.
Your broker will vote your shares
only if you provide him or her with
instructions on how to vote. Any
failure to instruct your broker on
how to vote your shares will have
the effect of a vote "against" the
merger. You should follow the
directions provided by your broker
on how to instruct your broker to
vote your shares.
Q: May I change my vote after I
have mailed my signed proxy card?
A: Yes. You may revoke your proxy
any time before the special meeting
by:
. giving written notice of your
revocation to PXP's
secretary;
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________________________________
ORGANIZATIONAL STRUCTURE BEFORE AND AFTER THE MERGER
________________________________
[ORGANIZATIONAL STRUCTURE]
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SUMMARY TERM SHEET
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This summary term sheet highlights important selected information from this
proxy statement relating to our proposed merger with Phoenix Home Life Mutual
Insurance Company. Phoenix Home Life Mutual Insurance Company is referred to
in this proxy statement as Phoenix, and Phoenix Investment Partners, Ltd. is
referred to as PXP. This transaction will be accomplished through the merger
of PXP with a subsidiary of PM Holdings, Inc. PM Holdings is a subsidiary of
Phoenix and owns 58% of the outstanding common stock of PXP.
This summary term sheet and the question and answer section may not contain
all the information that is important to you. To more fully understand the
merger and for a more complete description of the legal terms of the merger
agreement, you should read carefully this entire proxy statement and all of
its appendices before voting on the merger. We have included page references
parenthetically to direct you to more complete descriptions of the topics
presented in this summary term sheet.
The Companies (Page 43)
PXP, a Delaware corporation, and its subsidiaries provide a variety of
investment management and advisory services to a broad base of institutional,
corporate and individual clients. PXP is a publicly-held company that was
formed in 1995 through the merger of a subsidiary of PM Holdings and Duff &
Phelps Corporation. Duff & Phelps was the survivor in the merger and was
subsequently renamed Phoenix Investment Partners, Ltd. PXP common stock trades
on the New York Stock Exchange. Approximately 58% of its outstanding common
stock is held by Phoenix through its wholly-owned subsidiary, PM Holdings,
Inc. The holders of the remaining 42% of the outstanding common stock of PXP
are referred to in this proxy statement as PXP's public stockholders. PXP's
principal executive office is located at 56 Prospect Street, Hartford,
Connecticut 06115 and its telephone number is (860) 403-1000.
Phoenix is a New York domiciled mutual life insurance company. PM Holdings
is a Connecticut corporation, and a wholly-owned subsidiary of Phoenix. PM
Holdings is an intermediate holding company, which owns many of the
subsidiaries of Phoenix. Phoenix and its subsidiaries provide wealth
management products and services offered through a variety of select advisors
and financial services firms to serve the accumulation, preservation and
transfer needs of the affluent and high net worth market, businesses and
institutions. They offer a broad range of life insurance, variable annuity and
investment management products and related services through affiliated and
non-affiliated advisors and financial services firms. On April 20, 2000,
Phoenix announced that its board of directors had authorized the company to
develop a plan for conversion from a mutual to a publicly traded stock
company. The principal executive office of Phoenix and PM Holdings is located
at One American Row, Hartford, Connecticut 06102 and its telephone number is
(860) 403-5000.
The Merger (Page 32)
Upon the effectiveness of the merger, PXP will be merged with a subsidiary
of PM Holdings, and PXP will continue as the surviving corporation. The merger
will occur according to the terms and conditions of the merger agreement. The
merger agreement is described in this proxy statement and is attached as
Appendix A. You should carefully read the description of the merger agreement
in this proxy statement under the heading "THE MERGER AGREEMENT" and the
attached merger agreement itself.
If the merger is completed:
. PXP's public stockholders, other than dissenting stockholders, will
receive $15.75 in cash for each of their shares of PXP common stock
outstanding upon effectiveness of the merger. This cash payment is
referred to as the "merger consideration" in this proxy statement. PM
Holdings will not receive the merger consideration and will become the
sole stockholder of PXP; and
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. All outstanding options to purchase shares of PXP common stock that were
granted under PXP's employee benefit plans will become fully vested and
exercisable and will be converted into the right to receive cash in the
amount by which $15.75 exceeds the exercise price per share of the
particular option.
Convertible Debentures (Page 35)
PXP has outstanding approximately $70 million in principal amount of 6%
convertible subordinated debentures due 2015, and options therefor, which are
convertible at any time into shares of PXP common stock. The conversion rate
is 3.11 shares of PXP common stock for every $25 principal amount of the
convertible debentures. A holder of convertible debentures who converts prior
to the merger will receive shares of PXP common stock entitling the holder to
receive approximately $49 of merger consideration for each $25 principal
amount of the convertible debentures.
PXP has the right to redeem the convertible debentures for face value, plus
accrued interest, upon prior notice. If the merger is completed, a holder who
has converted will receive more money--approximately $49 worth of merger
consideration or $24 in excess of the $25 principal amount of face value--than
the holder would otherwise receive if the convertible debentures are redeemed
by PXP.
Under the terms of the convertible debentures, holders of convertible
debentures who convert after the merger will receive the merger consideration
they would have received had they converted prior to the merger. This means
that regardless of whether a holder converts before or after the merger, the
holder will receive the same value for the holder's convertible debentures. At
the special meeting, holders of convertible debentures who converted prior to
the record date for the special meeting will be entitled to vote their shares
of PXP common stock issued upon conversion of their convertible debentures.
As of November 14, 2000, options to purchase $1.2 million in principal
amount of the convertible debentures were outstanding. Holders of options to
purchase PXP's convertible debentures will, upon exercise, be treated in the
same manner as holders of the convertible debentures. To exercise an option to
purchase convertible debentures, an option holder must notify BNY Midwest
Trust Company, 2 N. LaSalle Street, Suite 1020, Chicago, IL 60602, Attention:
Daniel Donovan.
Vote Required/Security Ownership of Phoenix and PXP's Directors and Executive
Officers (Page 9)
Under Delaware law, the merger agreement must be adopted by the affirmative
vote of the holders of a majority of the outstanding shares of PXP common
stock entitled to vote on the merger at the special meeting. Phoenix, through
its subsidiary PM Holdings, owns approximately 58% of the outstanding shares
of PXP common stock entitled to vote and has indicated its intent to vote in
favor of adoption of the merger agreement. Accordingly, adoption of the merger
agreement by the PXP stockholders is assured. Also, we expect that PXP's
directors and executive officers, who own approximately 1% of the outstanding
shares entitled to vote, will vote their shares of PXP common stock in favor
of adoption of the merger agreement.
Consequences of the Merger (Page 27)
After the merger:
. PXP will survive as a wholly-owned subsidiary of PM Holdings and will no
longer be a public company;
. Phoenix will have the opportunity to participate in PXP's future earnings
and growth, but will bear the risk of any decrease in the value, or
increase in the leverage, of PXP;
. the subsidiary of PM Holdings formed to effect the merger will cease to
exist;
. PXP common stock will no longer be traded on the New York Stock Exchange,
price quotations will no longer be available and the registration of PXP
common stock under the Securities Exchange Act of 1934 will terminate;
and
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. you will no longer have an ownership interest in or be a stockholder of
PXP and, therefore, you will not be able to participate in any future
earnings or growth of PXP.
Recommendations of the Independent Directors Committee and PXP's Board of
Directors (Page 15)
In order to evaluate the fairness of the merger to PXP's public
stockholders, PXP's board of directors formed the independent directors
committee of six directors who are neither directors, officers or employees of
Phoenix and its affiliates, nor officers or employees of PXP. Based on all of
the factors the independent directors committee considered, including the
written fairness opinion of Salomon Smith Barney, dated September 10, 2000, to
the effect that, as of such date and based upon and subject to the
considerations set forth in that opinion, the merger consideration of $15.75
per share was fair from a financial point of view to the public stockholders
of PXP, the committee unanimously recommended that the entire board of
directors of PXP approve the merger agreement. PXP's board of directors,
acting on the recommendation of the independent directors committee,
unanimously approved the merger agreement and recommended that it be submitted
to PXP's stockholders for adoption. Phoenix and PM Holdings also believe that
the merger agreement is fair to PXP's public stockholders.
Interests of Certain Persons in the Merger (Page 26)
In considering the recommendations of the independent directors committee
and the board of directors with respect to the merger agreement, you should be
aware that Phoenix and some of PXP's officers and directors have interests in
the merger or have relationships, including those referred to below, that may
present actual or potential, or the appearance of actual or potential,
conflicts of interest in connection with the merger:
. Phoenix, through its wholly-owned subsidiary PM Holdings, owns
approximately 58% of PXP's outstanding common stock;
. four of the ten members of PXP's board of directors are also employed by
PXP and/or affiliated with or employed by Phoenix;
. PXP's board of directors and executive officers own approximately 386,000
shares of PXP's outstanding common stock, entitling them to receive an
aggregate of approximately $6.1 million in merger consideration; and
. All of PXP's directors and executive officers have outstanding vested and
unvested options that were granted to them under PXP's employee benefit
plans entitling them to receive an aggregate of approximately $16.4
million in option consideration.
For a more detailed discussion of these interests, we refer you to "SPECIAL
FACTORS--Interests of Certain Persons in the Merger."
Conditions to the Merger (Page 34)
The obligations of PXP and PM Holdings to complete the merger are subject
to several conditions. For example:
. the merger agreement must be adopted by the affirmative vote of the
holders of a majority of the outstanding shares of PXP common stock;
. there must be no legal prohibition or material challenge to the merger;
. PXP's and PM Holdings' representations and warranties in the merger
agreement must be accurate at the time of closing;
. holders of more than five percent of PXP's outstanding common stock must
not have exercised their appraisal rights; and
. PXP must have no obligation to issue any shares of its capital stock or
other securities of PXP under any employee benefit plan or otherwise.
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If these conditions are satisfied or waived by PXP or PM Holdings, as the
case may be, the merger should be completed within several days after the
special meeting.
If these conditions are not satisfied, PXP and/or PM Holdings may be able
to terminate the merger agreement.
Termination of the Merger Agreement (Page 35)
The merger agreement may be terminated before the effective time of the
merger by mutual written consent of PM Holdings and PXP. Either PXP or PM
Holdings may terminate if the merger is not completed by February 28, 2001.
PXP and PM Holdings also have the right to terminate the merger agreement if
the independent directors committee changes its recommendation that the public
stockholders adopt the merger agreement after having concluded that there is a
reasonable probability that the failure to take such action would result in a
violation of its fiduciary obligations.
Principal Purposes of the Merger (Page 29)
The principal purposes of the merger are to permit Phoenix to acquire all
of the publicly held shares of PXP common stock, and to afford the public
stockholders the opportunity to dispose of their shares of PXP common stock at
a fair value. Although the merger is expected to close prior to the completion
of Phoenix's proposed conversion from a mutual to a publicly traded stock
company, the proposed conversion is not the reason for the merger and the
merger is not a requirement of the proposed conversion. Phoenix proposed this
transaction as a result of its concern that PXP's stock price did not reflect
the underlying strength of its business. Despite having shown strong earnings
growth, PXP's stock price remained stagnant in 1999 and into 2000. Phoenix
believes that this may be due in part to Phoenix's controlling interest in PXP
and to the limited number of publicly traded shares of PXP. As a result,
public stockholders have not been able to realize appropriate value for their
interests in PXP despite PXP's good performance.
Independent Directors Committee Considerations (Page 15)
In reaching its conclusion to recommend the merger agreement, the
independent directors committee considered, among other factors, the
following:
. the committee's knowledge of PXP's management and the history of its
business, operations, properties, assets, liabilities, liquidity,
financial condition, operating results, prospects, current business
strategy and competitive position in the industry;
. the presentations and written opinion of Salomon Smith Barney regarding
the fairness of the merger consideration from a financial point of view;
. the fact that Phoenix's offer of $15.75 per share represents
approximately a 45.7% premium over the closing sale price on the New York
Stock Exchange per share of $10.81 on July 24, 2000, the last day of
trading prior to the public announcement of Phoenix's initial proposal, a
premium of 42.6% over the prior one-week average closing sale price, a
premium of 45.0% over the prior one-month average closing sale price and
a premium of 65.9% over the prior three month average closing sale price;
. the fact that the merger consideration will consist entirely of cash;
. the fact that Delaware law entitles those PXP stockholders who follow
statutory procedures to a judicial appraisal to determine the fair value
of their shares if the merger is completed and they believe that the
merger consideration does not reflect the "fair value" of the shares;
. the fact that Phoenix had stated that it would not consider selling its
interest in PXP to a third party, and that as a practical matter, no
other alternatives potentially available to PXP would be possible without
the support of Phoenix; and
. the fact that Salomon Smith Barney advised the independent directors
committee that the likelihood of finding a third party purchaser for the
publicly-held minority interest in PXP was low, and the fact that no
potential alternative offer had been presented to the independent
directors committee since Phoenix's first offer was publicly announced on
July 25, 2000.
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Fairness Opinion of Salomon Smith Barney (Page 17)
The independent directors committee retained Salomon Smith Barney to act as
its financial advisor in connection with the merger and to render its opinion
as to the fairness to the PXP public stockholders from a financial point of
view of the consideration you will receive under the merger agreement.
Salomon Smith Barney delivered to the independent directors committee its
written opinion, dated September 10, 2000, stating that, as of that date and
based upon and subject to the factors and assumptions set forth in the
opinion, the consideration you will receive in the merger was fair to you from
a financial point of view. Salomon Smith Barney's opinion addresses the
fairness of the merger consideration only as of September 10, 2000 and not as
of the date of the proxy statement. Salomon Smith Barney would update its
opinion only if engaged to do so by the independent directors committee. The
independent directors committee does not currently anticipate requesting an
updated opinion. In the event there were material changes to the terms of the
merger or the independent directors committee became aware of other material
developments or conditions affecting PXP or its business, the committee would
consider the advisability of seeking an updated opinion.
The full text of Salomon Smith Barney's written opinion, which describes
the assumptions made, matters considered and limitations on its review, is
attached as Appendix B to this proxy statement. We urge you to read this
opinion carefully in its entirety. The opinion of Salomon Smith Barney is
directed only to the matters described in the opinion and does not constitute
a recommendation as to how you should vote at the special meeting.
Appraisal Rights (Page 36)
If you do not wish to accept the $15.75 per share merger consideration in
the merger and you do not vote in favor of adoption of the merger agreement,
you have the right under Delaware law to seek a judicial appraisal of your
shares to determine the "fair value" of your shares, in lieu of the merger
consideration if the merger is completed.
We refer you to the information under the heading "APPRAISAL RIGHTS" in
this proxy statement and to the applicable Delaware statute attached as
Appendix C to this proxy statement for information on how to exercise your
appraisal rights. Failure to follow all of the steps required under Delaware
law will result in the loss of your appraisal rights.
Financing; Source of Funds (Page 31)
Phoenix and PXP estimate that the amount of funds required to fund the
payment of the merger consideration, including payment with respect to options
and the convertible debentures is approximately $434 million. Phoenix intends
to obtain the funds required to pay the merger consideration from internal
sources. PXP intends to borrow approximately $58 million to fund the payments
with respect to the options. It will also borrow any amounts necessary to make
payments with respect to the redemption or conversion of any convertible
debentures after the merger. PXP's borrowing will be under its existing five
year $175 million unsecured credit agreement entered into on March 17, 1999
with a consortium of banks for which Bank of America National Trust and
Savings Association serves as the syndication agent. The interest rate under
this credit agreement is variable based on LIBOR. Phoenix has guaranteed PXP's
obligations under this credit agreement. PXP does not anticipate the need for
any alternative financing arrangements.
Material Federal Income Tax Consequences (Page 29)
Generally, you will be taxed on your receipt of the $15.75 per share merger
consideration to the extent that the amount you receive exceeds your tax basis
in your shares. However, special rules may apply. Because determining the tax
consequences of the merger can be complicated, you should consult your tax
advisor in order to understand fully how the merger will affect you.
Accounting Treatment (Page 30)
The merger will be accounted for under the purchase method of accounting in
accordance with generally accepted accounting principles.
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Stockholder Lawsuits Challenging the Merger (Page 32)
Five lawsuits seeking class action status have been filed in the Delaware
Court of Chancery on behalf of purported stockholders of PXP. These lawsuits
allege, among other things, that Phoenix, PXP and the PXP individual directors
breached fiduciary duties to PXP's public stockholders.
Management of both Phoenix and PXP and the PXP individual directors believe
that the allegations contained in these lawsuits are without merit and they
intend to vigorously defend these lawsuits.
Some Stockholders may seek Appraisal Rights (Page 32)
Phoenix received a letter dated November 10, 2000 from a law firm on behalf
of several PXP stockholders claiming to own approximately 5 million or 10% of
the shares of PXP common stock (including shares issuable on conversion of
convertible debentures) stating that these stockholders intended as of such
date to seek appraisal rights with respect to the merger. Under the merger
agreement, Phoenix is not obligated to effect the merger in the event that
holders of more than 5% of the outstanding shares of PXP common stock have
exercised appraisal rights. However, Phoenix has indicated to PXP that it is
Phoenix's current intention to complete the merger even if these stockholders
seek to exercise their appraisal rights.
Questions About The Merger
If you have more questions about the merger or would like additional copies
of this proxy statement, you should contact:
Nancy J. Engberg, Secretary
Phoenix Investment Partners, Ltd.
56 Prospect Street
Hartford, Connecticut 06115
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------------------------------------------
CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING INFORMATION
------------------------------------------
This proxy statement and the documents to which we refer you and
incorporate into this proxy statement by reference contain forward-looking
statements. In addition, from time to time, we or our representatives may make
forward-looking statements orally or in writing. We base these forward-looking
statements on our expectations and projections about future events, which we
derive from the information currently available to us. Such forward-looking
statements relate to future events or our future performance, including
statements regarding the amount of assets under management.
Forward-looking statements are statements that are not historical in
nature, particularly those that use the words "may," "will," "should,"
"expects," "anticipates," "contemplates," "estimates," "believes," "plans,"
"projected," "predicts," "potential" or "continue" or the negative of these or
similar terms. In evaluating these forward-looking statements, you should
consider various factors, including the competitive environment of our
business, changes in interest rates, the performance of financial markets and
general economic conditions. These and other factors may cause our actual
results to differ materially from any forward-looking statement.
Forward-looking statements are only predictions and by their nature are
subject to risks, uncertainties and assumptions. The forward-looking events
discussed in this proxy statement, the documents to which we refer you and
other statements made from time to time by us or our representatives, may not
occur, and actual events and results may differ materially.
------------------------------------------
INFORMATION CONCERNING THE SPECIAL MEETING
------------------------------------------
Date, Time, and Place of the Special Meeting
The special meeting will be held on January 11, 2001, 10:00 A.M., local
time, at One American Row, Hartford, Connecticut 06102.
Purpose of the Special Meeting
At the special meeting, you will be asked to consider and vote upon a
proposal to adopt the merger agreement. A copy of the merger agreement is
attached as Appendix A to this proxy statement.
The independent directors committee and the board of directors have
unanimously determined that the merger agreement and merger are fair to and in
the best interests of PXP and its public stockholders and upon the unanimous
recommendation of the independent directors committee, the board of directors
unanimously approved the merger agreement and declared it advisable.
Accordingly, the independent directors committee and the board of directors
recommend that you vote in favor of adoption of the merger agreement.
To review the background and reasons for the merger in greater detail, we
refer you to the information under the headings "SPECIAL FACTORS--Background
of the Merger" and "--Recommendations of the Independent Directors Committee
and the Board of Directors."
Record Date, Quorum Requirement, and Vote Required
All stockholders of record at the close of business on December 6, 2000 are
entitled to notice of, and to vote at, the special meeting. The presence, in
person or by proxy, of the holders of at least a majority of the shares of
common stock issued, outstanding and entitled to vote on the merger proposal
is required in order to constitute a quorum. At the close of business on
December 6, 2000, there were 45,963,888 shares of our common stock issued and
outstanding with approximately 170 record holders.
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Each record holder of shares of our common stock at the close of business
on the record date of December 6, 2000 is entitled to one vote for each share
then held on each matter submitted to a vote of the stockholders at the
special meeting. The merger agreement must be adopted by the affirmative vote
of the holders of at least a majority of the issued and outstanding shares of
common stock entitled to vote. PM Holdings owns approximately 58% of the
outstanding shares of PXP entitled to vote and has indicated its intent to
vote in favor of adoption of the merger agreement. Therefore, adoption of the
merger agreement is assured. We also expect that PXP's directors and executive
officers, who own approximately 1% of the outstanding shares entitled to vote,
will vote their shares of PXP common stock in favor of adoption of the merger
agreement.
Solicitation, Revocation and Use of Proxies
Our board of directors is requesting that, after you read this proxy
statement and the appendices attached to it, you complete, date and sign the
accompanying form of proxy and return it promptly in the enclosed postage-paid
envelope. Alternatively, you may vote in person at the special meeting. We
refer you to the heading "Voting Procedures" below for additional information
on how to vote at the special meeting.
We will pay the costs of soliciting proxies. These costs include the
preparation, assembly and mailing of this proxy statement, the notice of
special meeting of stockholders and the enclosed proxy card, as well as the
cost of forwarding these materials to the beneficial owners of our common
stock. In addition to the solicitation of proxies by mail, our directors,
officers and employees may solicit proxies by telephone, telecopy and personal
contact, but will not receive separate compensation for these activities. We
do not expect to retain a proxy solicitation firm for assistance in connection
with the solicitation of proxies for the special meeting. Copies of
solicitation materials will be furnished to fiduciaries, custodians and
brokerage houses for forwarding to beneficial owners of common stock, and
these persons will be reimbursed for their reasonable out-of-pocket expenses.
You may revoke your proxy at any time before the special meeting by:
. giving written notice of your revocation to PXP's secretary;
. filing a revoking instrument or a duly executed proxy bearing a later
date with PXP's secretary; or
. attending the special meeting and voting in person.
Voting Procedures
Vote by Mail. If you choose to vote by mail, simply mark your proxy card,
date and sign it, and return it in the postage-paid envelope provided. Please
do not send any certificates representing shares of PXP common stock with your
proxy card. If the merger is completed, the procedures for the exchange of
share certificates will be as described in this proxy statement. We refer you
to the information under the heading "THE MERGER AGREEMENT--Exchange and
Payment Procedures."
Vote at the Special Meeting. Voting by mail will not limit your right to
vote at the special meeting if you decide to attend in person. If your shares
are held in the name of a bank, broker or other nominee, however, you must
obtain a proxy, executed in your favor, from the holder of record to be able
to vote the shares at the special meeting.
How Shares are Voted. Subject to revocation, all shares represented by each
properly executed proxy received by the secretary of PXP will be voted in
accordance with the instructions indicated. If no instructions are indicated,
the shares will be voted to adopt the merger agreement.
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Additional Voting Information
Proxies that are returned and reflect abstentions from voting will be
counted as present and entitled to vote for purposes of determining whether a
quorum exists at the special meeting. If you do not vote in person at the
special meeting and you do not return a proxy, or if you return a proxy
reflecting an abstention, this will have the same effect as a vote against
adoption of the merger agreement.
Brokers who hold shares in street name for customers have the authority to
vote on "routine" proposals when they have not received instructions from
beneficial owners. These brokers, however, are precluded from exercising their
voting discretion with respect to the approval of non-routine matters such as
approving the merger agreement. A broker "non-vote" occurs when a bank, broker
or other nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting
power for that particular item and has not received instructions from the
beneficial owner. Broker non-votes will be treated as shares that are present
and entitled to vote at the special meeting for purposes of determining
whether a quorum exists and will have the same effect as votes against
adoption of the merger agreement.
If the special meeting is adjourned for any purpose, at any subsequent
reconvening of the special meeting, all proxies will be voted in the same
manner as the proxies would have been voted at the original convening of the
meeting, except for any proxies which have been revoked or withdrawn, even
though they may have been voted on the same or any other matter at a previous
meeting.
Appraisal Rights
Stockholders on the record date who do not vote in favor of adoption of the
merger agreement, who file with PXP before the vote on the merger agreement a
written notice of intent to demand the fair value of their shares and comply
with the other statutory requirements of Section 262 of the DGCL, will be
entitled to appraisal rights. If you vote in favor of adoption of the merger
agreement, you will waive your appraisal rights. A copy of the Delaware
appraisal statute is attached as Appendix C to this proxy statement and is
described in more detail under the heading "APPRAISAL RIGHTS."
------------------------------------------
SPECIAL FACTORS
------------------------------------------
Background of the Merger
During the fall of 1999, Phoenix began to examine its ownership interest in
PXP, particularly with the view to the possibility of the acquisition of the
publicly-held PXP common stock.
On November 29, 1999, the outside directors of PXP met informally with
Philip R. McLoughlin, Chairman and Chief Executive Officer of PXP, at Mr.
McLoughlin's request. Mr. McLoughlin, who also serves as Executive Vice
President--Investments and as a director of Phoenix, advised the outside
directors that Phoenix was evaluating its ownership interest in PXP and was,
among other things, considering the possibility of making an offer to acquire
the publicly-held shares of PXP common stock. In view of possible conflicts of
interest involved in this type of transaction, the directors present decided
that it would be advisable to form a committee of independent directors
consisting of Mr. Anderson, Mr. Churchill, Mr. Oates, Ms. Tuttle, Mr. Verdonck
and Mr. Williams to respond to such an offer on behalf of PXP if an offer was
made. None of these directors is employed by or affiliated with PXP or Phoenix
or any of its affiliates (except in the capacity as a director of PXP and, in
the case of Mr. Oates, as a director of several mutual funds advised by PXP
and as a founder and Chairman of the board of directors of IBEX Capital
Markets, Inc., a company in which Phoenix and its affiliates have investments
totaling approximately $20.5 million, a portion of which is convertible into
approximately a 19%
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equity interest). Mr. Anderson was identified as the person who would serve as
chairman of the independent directors committee. It was agreed that it would
be prudent for the independent directors committee to retain an independent
financial advisor and legal counsel to assist in reviewing any offer by
Phoenix. Shortly after the November 29 meeting, the independent directors
determined to retain the law firm of Lord, Bissell & Brook to act as legal
counsel.
On January 7, 2000, the independent directors met with a representative of
Lord, Bissell & Brook, who reviewed with the directors their duties under
applicable law should Phoenix make an offer to purchase all of the PXP common
stock held by the public stockholders. The independent directors then received
presentations from three nationally recognized investment banking firms
seeking to be retained as financial advisor to the independent directors
committee. After the presentations and discussion, the independent directors
determined to retain Salomon Smith Barney as financial advisor in the event an
offer was received from Phoenix.
At the next regularly scheduled meeting of the board of directors of PXP on
February 26, 2000, the board formally authorized the appointment of the
independent directors committee to consider and negotiate any offer by Phoenix
to purchase the publicly-held PXP common stock and to recommend whether such
offer would be fair to and in the best interest of the other stockholders, and
further authorized the independent directors committee to retain at PXP's
expense an independent financial advisor and legal counsel to assist it in its
review of any such offer.
On April 20, 2000, Phoenix announced that its board of directors had
authorized the company to develop a plan for conversion from a mutual to a
publicly traded stock company.
During the spring and early summer of 2000, the executive committee of the
board of directors and management of Phoenix met on several occasions to
consider a possible offer to acquire the publicly held shares of PXP, the
appropriate structure of the possible acquisition and the treatment of PXP's
employee benefit plans in the event of an acquisition. During this time,
representatives of Phoenix met with Morgan Stanley Dean Witter, its financial
advisor, and Debevoise & Plimpton, its legal counsel, to discuss the financial
and legal aspects of the possible acquisition.
On June 20, 2000, David W. Searfoss, Executive Vice President and Chief
Financial Officer of Phoenix, contacted Mr. Anderson to request information
from PXP to allow Phoenix to consider whether to make an offer to purchase the
publicly-held PXP common stock. On June 22, Mr. Anderson responded to Mr.
Searfoss that PXP would be willing to provide the requested information on the
condition that Phoenix sign a confidentiality agreement in substantially the
form provided by PXP. The confidentiality agreement was executed on June 22,
and thereafter for the remainder of June and during July, Phoenix and its
financial advisor requested and reviewed financial and other information
regarding PXP.
On June 30, 2000, Mr. Searfoss telephoned Mr. Anderson to suggest that,
although the board of directors of Phoenix had not authorized the making of
any offer to purchase the publicly-held PXP common stock, Morgan Stanley and
Salomon Smith Barney engage in informal preliminary discussions regarding the
possibility of an offer. Mr. Anderson responded that he would discuss this
possibility with the independent directors committee.
The independent directors committee met by telephone on July 7, 2000. Mr.
Anderson described to the committee members his recent contacts with Mr.
Searfoss. At this meeting, the committee formally retained Salomon Smith
Barney as its financial advisor in connection with a possible transaction with
Phoenix and confirmed the engagement of Lord, Bissell & Brook as its legal
counsel. The committee authorized Salomon Smith Barney to commence an
evaluation of PXP and report back to the committee at its meeting scheduled
for July 28.
On July 7, 2000, Morgan Stanley made a presentation to the executive
committee of the board of directors of Phoenix. See "SPECIAL FACTORS--
Financial Analysis of the Financial Advisor to Phoenix."
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Between July 7 and July 28, 2000, Salomon Smith Barney conducted a review
of the business, operations and prospects of PXP as well as a review of the
industry in general, and counsel to the independent directors committee
performed legal due diligence. On July 17, representatives from Salomon Smith
Barney and Lord, Bissell & Brook met with members of senior management of PXP
to discuss the business, operations and prospects of PXP.
On July 21, 2000, the independent directors committee met again by
telephone. Mr. Anderson reported that he had had further conversations with
Mr. Searfoss regarding the possibility of an offer from Phoenix for the
publicly-held shares of PXP common stock. The committee authorized Mr.
Anderson to inform Mr. Searfoss that the committee would not proceed further
with discussion of a possible offer from Phoenix unless a written offer from
Phoenix was received.
After the close of regular trading hours on July 24, 2000, Phoenix
submitted a proposal to the independent directors committee for the
acquisition by Phoenix of all of the publicly-held shares of PXP common stock
for $12.50 per share in cash. In its proposal, Phoenix stated that it was
interested only in acquiring the publicly-held shares of PXP common stock and
was not interested in selling its interest in PXP. On July 25, 2000, prior to
the opening of regular trading hours, PXP and Phoenix each issued a press
release announcing the proposal.
On July 25, 2000, five lawsuits seeking class action status were filed in
the Delaware Court of Chancery by purported stockholders of PXP against
Phoenix, PXP and PXP's directors in connection with Phoenix's proposal. These
lawsuits alleged that Phoenix's offer to acquire the publicly held shares of
PXP common stock for $12.50 per share was unfair. See "--Stockholder Lawsuits
Challenging the Merger."
On July 28, 2000, the independent directors committee met with
representatives of Lord, Bissell & Brook and Salomon Smith Barney to review
Phoenix's proposal. Counsel to the committee reviewed the legal obligations of
the committee members in transactions such as that being contemplated. Salomon
Smith Barney provided a preliminary report on the progress of its due
diligence review to date and preliminary views as to various aspects of the
offer. The committee then authorized Salomon Smith Barney to contact Phoenix
and its financial advisor Morgan Stanley to complete its evaluation of the
offer and to report its findings to the committee.
Over the next two weeks, representatives from Salomon Smith Barney met with
representatives from Morgan Stanley to discuss various aspects of Phoenix's
offer. During this period, representatives of Salomon Smith Barney also
participated in a telephone conversation with senior management of Phoenix to
continue its due diligence.
On August 2, 2000, the independent directors committee met in person
(except for Ms. Tuttle who was unable to be present) to review possible
approaches to respond to Phoenix's offer.
On August 10, 2000, the independent directors committee met in person with
its counsel and Salomon Smith Barney to review and formulate a response to
Phoenix's offer. At the meeting, Salomon Smith Barney reviewed the financial
performance and prospects of PXP and presented various valuation analyses. The
committee members also discussed possible transaction structures. After
discussion, the committee authorized Salomon Smith Barney to meet with Morgan
Stanley to negotiate for a higher price. On August 10, Salomon Smith Barney
telephoned Morgan Stanley and conveyed the committee's counteroffer of $18.00
per share. Representatives of Morgan Stanley and Salomon Smith Barney
thereafter met on August 14, and had further discussions by telephone on
August 16, during which Morgan Stanley reported that Phoenix was willing to
increase its offer to $14.00 per share.
On August 16, 2000, the independent directors committee met by telephone to
discuss Phoenix's response to the committee's counteroffer. After discussion,
the committee authorized Salomon Smith Barney to report to Morgan Stanley that
the committee would lower its counteroffer to $16.75 per share. On August 16,
Salomon Smith Barney contacted Morgan Stanley to convey the independent
directors committee's revised counteroffer.
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Mr. Searfoss telephoned Mr. Anderson later on August 16, and again the
following day, to discuss the independent directors committee's most recent
proposal and timing of a Phoenix response. Mr. Searfoss stated that there
would be no response until after a board meeting of Phoenix scheduled for
Monday, August 21. On August 23, Mr. Searfoss telephoned Mr. Anderson to
report that Phoenix had considered the PXP proposal in substantial detail at
its meeting on August 21, but that Phoenix had not yet formulated a response.
On August 29, Mr. Anderson received a telephone call from Mr. Searfoss and
Dona Young, President of Phoenix. Mr. Searfoss and Ms. Young informed Mr.
Anderson that Phoenix was prepared to authorize a transaction price of $15.00
per share.
The independent directors committee met by telephone on August 30 with its
legal and financial advisors to discuss Phoenix's increased offer. At this
meeting, the committee members also discussed a letter dated August 23 from a
law firm hired by one of PXP's largest institutional stockholders requesting
an opportunity for that stockholder and other institutional stockholders to
meet with PXP's board of directors or the independent directors committee to
discuss Phoenix's offer. After discussion, the committee determined it would
be appropriate to meet with these stockholders to hear their views, assuming
the appropriate protections for the committee process could be instituted. The
committee members and the committee's legal and financial advisors discussed
the nature and timing of such a meeting. Counsel to the committee was
instructed to contact the law firm requesting the meeting to arrange a meeting
between the committee members and the stockholders as soon as possible. The
committee then authorized Mr. Anderson to respond to Mr. Searfoss with a
proposal for a transaction at $16.25 per share, subject to the committee's
consideration of the presentation to be made by the institutional
stockholders.
On the morning of September 5, 2000, a meeting was held at the offices of
Salomon Smith Barney with the institutional stockholders at which all of the
committee members participated by teleconference. At the meeting, the
institutional stockholders presented their views concerning the Phoenix offer
of $12.50 per share to the committee members and Salomon Smith Barney.
Later that afternoon, the independent directors committee met by telephone
with representatives of Salomon Smith Barney and Lord, Bissell & Brook.
Salomon Smith Barney reviewed with the committee the various financial
analyses presented by the institutional stockholders at the meeting earlier
that day and confirmed that Salomon Smith Barney had considered in connection
with its previous presentations to the committee all of the methodologies
raised by the institutional stockholders in the meeting. Mr. Anderson then
updated the independent directors committee on developments since the August
30 committee meeting, including his communication to Mr. Searfoss of the
committee's counterproposal of $16.25 per share, and Mr. Searfoss' request
that the committee designate representatives to negotiate with Mr. Searfoss
and Ms. Young with a view to concluding the negotiating process. After further
discussion, Mr. Anderson and Ms. Tuttle left the committee meeting and
commenced negotiation with Mr. Searfoss and Ms. Young by telephone. After
discussion and negotiation, Mr. Anderson and Ms. Tuttle rejoined the committee
meeting to report that Phoenix had increased its offer to $15.25 per share.
After further discussion, Mr. Anderson and Ms. Tuttle again left the meeting
and continued negotiations with Mr. Searfoss and Ms. Young. After further
discussion and negotiations with Mr. Searfoss and Ms. Young, Mr. Anderson and
Ms. Tuttle rejoined the committee members to report that Phoenix had agreed to
increase its offer to $15.75 per share. The committee determined that it would
proceed with the negotiation of the terms of a definitive merger agreement at
that price.
Later on September 5, counsel to Phoenix delivered a draft merger agreement
to counsel to the independent directors committee. Over the next two days,
counsel to the committee and counsel to Phoenix negotiated the terms and
conditions of the merger agreement. At a telephone meeting of the independent
directors committee on September 7, counsel reviewed with the committee the
merger agreement and the terms negotiated. After discussion, the committee
determined to schedule an independent directors committee meeting and,
assuming resolution of all outstanding issues, to request a full meeting of
the PXP board of directors in New York on September 10 to consider approval of
the merger agreement.
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On September 10, the independent directors committee met in person (except
for Ms. Tuttle and Mr. Verdonck, who participated by telephone) with
representatives of Salomon Smith Barney and Lord, Bissell & Brook to consider
the terms of the merger agreement, as negotiated. Salomon Smith Barney
presented its financial analyses to the independent directors committee.
Counsel to the committee then reviewed the duties of the committee and
summarized the merger agreement and changes in the terms of the merger
agreement negotiated by counsel for the committee since receiving the initial
draft. Salomon Smith Barney delivered to the committee its written opinion to
the effect that, as of that date, and subject to the assumptions and
limitations stated in the opinion, the cash consideration of $15.75 per share
to be received in the merger by the public stockholders was fair from a
financial point of view to those stockholders. After further discussion and
deliberation, the independent directors committee unanimously determined that
the merger agreement was fair to and in the best interests of the public
stockholders and unanimously determined to recommend that the board of
directors approve the merger agreement, declare its advisability and recommend
its adoption by the public stockholders.
Immediately following the meeting of the independent directors committee on
September 10, the board of directors held a special meeting to hear the
recommendations of the independent directors committee and consider the
merger. All directors were present in person except for Mr. Fiondella, Ms.
Tuttle and Mr. Verdonck, who participated by telephone. Mr. Anderson reviewed
for the board of directors the process through which the independent directors
committee reached its conclusion that the merger was fair to and in the best
interests of the public stockholders of PXP. Mr. Anderson then reviewed the
independent directors committee's recommendation that the board of directors
approve the merger agreement, declare its advisability and recommend its
adoption by the public stockholders. Salomon Smith Barney presented to the
board of directors a summary of its analysis and opinion delivered orally to
the committee earlier that day. Counsel to the independent directors committee
reviewed certain legal considerations in connection with the transaction and
the terms of the merger agreement. After a thorough discussion and based on
the recommendations of the committee, the board of directors unanimously
adopted resolutions determining that the merger was fair to and in the best
interests of the public stockholders, approving the merger agreement,
declaring its advisability and recommending its adoption by the public
stockholders.
Following the special meeting of the board of directors on September 10,
authorized representatives of PXP, PM Holdings and Phoenix executed and
delivered the merger agreement. Prior to the opening of regular trading on the
New York Stock Exchange on September 11, PXP and Phoenix each issued a press
release publicly announcing the execution of the merger agreement.
Recommendations of the Independent Directors Committee and Board of Directors
Independent Directors Committee. In arriving at its recommendation and
determination that the merger agreement is fair to PXP's public stockholders,
the independent directors committee carefully considered the terms of the
merger agreement. As part of this process, the independent directors committee
considered the advice and assistance of its financial and legal advisors
regarding the terms of the merger agreement and the fairness of the merger
transaction to PXP's public stockholders. In determining to recommend approval
and adoption of the merger agreement, and in determining the fairness of the
merger agreement and merger to PXP's public stockholders, the independent
directors committee considered numerous factors, both positive and negative.
The following are the factors that the committee considered material:
. the committee's knowledge of PXP's management and the history of its
business, operations, properties, assets, liabilities, liquidity,
financial condition, operating results, prospects, current business
strategy, and competitive position in its industry;
. the opinion of Salomon Smith Barney that, based upon and subject to the
assumptions and limitations set forth therein, as of the date of the
opinion, the $15.75 per share cash consideration to be received by PXP's
public stockholders in the merger was fair from a financial point of view
to those stockholders, see "SPECIAL FACTORS--Opinion of the Financial
Advisor;"
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. the presentations of Salomon Smith Barney regarding the fairness of the
consideration to be received in the merger from a financial point of view
that involved various valuation analyses of PXP, see "SPECIAL FACTORS--
Background of the Merger" and "--Opinion of the Financial Advisor;"
. the historical market prices of PXP's stock and recent trading activity
of the stock, including the fact that the $15.75 per share price
represents a premium of 45.7% over the closing sale price on the New York
Stock Exchange on July 24, 2000, the last full trading day prior to the
public announcement of the submission of Phoenix's initial proposal, a
premium of 42.6% over the prior one-week average closing sale price, a
premium of 45.0% over the prior one-month average closing sale price and
a premium of 65.9% over the prior three-month average closing sale price,
see "SPECIAL FACTORS--Opinion of the Financial Advisor;"
. the fact that the financial and other terms of the merger were determined
through arm's-length negotiations between Phoenix and the independent
directors committee and its financial and legal advisors, all of whom are
unaffiliated with Phoenix, which led to a 26% increase in the original
price offered by Phoenix. As a result of its negotiations, the
independent directors committee concluded that a price higher than $15.75
per share could not likely be obtained;
. the fact that PXP has the right to terminate the merger agreement if the
independent directors committee or board of directors of PXP withdraws
its approval of the merger agreement or withdraws its recommendation that
public stockholders adopt the merger;
. the fact that the transaction has been structured as a single step merger
and that dissenters' rights would be available to dissenting
stockholders;
. the likelihood that the merger would be consummated, including the fact
that there are no unusual requirements or conditions to the merger and
the fact that Phoenix has the financial resources to consummate the
merger expeditiously;
. the fact that the consideration to be paid in the merger to the holders
of PXP common stock is all cash, eliminating any uncertainties in valuing
the consideration to be received by the public stockholders;
. Phoenix's ownership, through its wholly-owned subsidiary PM Holdings, of
approximately 58% of the currently outstanding common stock of PXP and
the adverse effects of that ownership on the strategic alternatives
available to PXP;
. the fact that Phoenix had stated that it would not consider selling its
shares to a third party, and that as a practical matter, no other
alternatives potentially available to PXP would be possible without the
support of Phoenix;
. the fact that Salomon Smith Barney advised the committee that the
likelihood of finding a third party purchaser for the publicly held
minority interest in PXP was low, and the fact that no potential
alternative offer had been presented to the independent directors
committee after Phoenix's initial offer was publicly announced on July
25, 2000; and
. the possible conflicts of interest of certain directors and members of
management of both PXP and Phoenix discussed below under "SPECIAL
FACTORS--Interests of Certain Persons in the Merger."
PXP Board. In reaching its determinations referred to above, the PXP board
considered the following factors, each of which, in the view of the PXP board,
supported such determinations:
. the conclusions and recommendations of the independent directors
committee;
. the factors referred to above as having been taken into account by the
independent directors committee, including the receipt by the independent
directors committee of the opinion of Salomon Smith Barney that, based
upon and subject to the assumptions and limitations stated therein, as of
the date of the opinion, the $15.75 per share to be received by the
public stockholders of PXP in the merger was fair from a financial point
of view to such holders; and
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<PAGE>
. the fact that the terms and conditions of the merger agreement were the
result of arm's-length negotiations between the independent directors
committee and Phoenix.
The members of the PXP board, including the members of the independent
directors committee, evaluated the merger in light of their knowledge of PXP's
management and the history of its business, operations, properties, assets,
liabilities, liquidity, financial condition, operating results, prospects,
current business strategy and competitive position, and based upon the advice
of financial and legal advisors.
PXP's board, including the members of the independent directors committee,
believes that the merger is procedurally fair because, among other things:
. the independent directors committee consisted of independent directors
appointed to represent the interests of the public stockholders of PXP;
. the independent directors committee retained and was advised by its own
independent legal counsel;
. the independent directors committee retained and was advised by Salomon
Smith Barney, as its independent financial advisor, to assist it in
evaluating a potential transaction with Phoenix;
. the $15.75 per share price resulted from active arm's-length bargaining
between representatives of the independent directors committee, on the
one hand, and representatives of Phoenix, on the other;
. the independent directors committee engaged in detailed deliberations in
evaluating the merger and alternatives thereto; and
. the independent directors committee is a mechanism well established under
Delaware law in transactions of this type.
The PXP board of directors and the independent directors committee
recognized that, while consummation of the merger will result in all public
stockholders being entitled to receive $15.75 for each of their shares, it
will eliminate the opportunity for current public stockholders to participate
in the benefit of increases, if any, in the value of PXP's business following
the merger. They also recognized that the merger agreement does not require
adoption by the holders of a majority of the shares of common stock held by
PXP's public stockholders. Nevertheless, the independent directors committee
and the PXP board have concluded that these facts do not justify foregoing the
receipt of the immediate cash premium represented by the $15.75 per share
price. Neither the independent directors committee nor the PXP board
considered the liquidation of PXP's assets to be a viable course of action
based on Phoenix's desire for PXP to continue to conduct its business as a
subsidiary of Phoenix. Therefore, no appraisal of liquidation values was
sought for purposes of evaluating the merger.
In view of the wide variety of factors considered in connection with their
respective evaluations of the merger, neither the independent directors
committee nor the PXP board found it practicable to, and accordingly, did not,
quantify or otherwise attempt to assign relative weights to the specific
factors they each considered in reaching their determinations. The foregoing
discussion of the information and factors considered by the independent
directors committee and the PXP board is not intended to be exhaustive but is
believed to include all material factors considered by the independent
directors committee and the PXP board. The PXP board, based upon the unanimous
recommendation of the independent directors committee: (a) unanimously
determined that the terms of the merger and the merger agreement are fair to
and in the best interests of PXP's public stockholders; (b) unanimously
approved the merger agreement and declared it advisable; and (c) unanimously
recommended that PXP's stockholders adopt the merger agreement.
Opinion of the Financial Advisor for the Independent Directors Committee
The independent directors committee retained Salomon Smith Barney as its
financial advisor in connection with the merger. Pursuant to Salomon Smith
Barney's engagement letter, Salomon Smith Barney rendered a
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<PAGE>
written opinion to the independent directors committee on September 10, 2000
to the effect that, based upon and subject to the considerations and
limitations set forth in its opinion, its work described below and other
factors it deemed relevant, as of that date, the merger consideration of
$15.75 per share was fair, from a financial point of view, to PXP's public
stockholders.
The full text of Salomon Smith Barney's opinion, which sets forth the
assumptions made, general procedures followed, matters considered and limits
on the review undertaken, is included as Appendix B to this proxy statement.
The summary of Salomon Smith Barney's opinion set forth below is qualified in
its entirety by reference to the full text of the opinion. Shareholders are
urged to read Salomon Smith Barney's opinion carefully and in its entirety.
Salomon Smith Barney's opinion is directed only to the fairness, from a
financial point of view, of the merger consideration to be received by PXP's
public stockholders, and it does not address the underlying business decision
to effect the merger. Salomon Smith Barney's opinion was provided for the
information of the independent directors committee in the evaluation of the
merger, and is not intended to be and does not constitute a recommendation to
any holder of shares of PXP common stock as to how such holder should vote on
any matters relating to the merger.
In connection with rendering its opinion, Salomon Smith Barney:
. reviewed a draft of the merger agreement dated September 7, 2000;
. reviewed certain publicly available business and financial information
that Salomon Smith Barney deemed relevant relating to PXP and the
industry in which it operates;
. reviewed and analyzed certain financial projections and other non-public
financial and operating data concerning the business and operations of
PXP that were provided to or reviewed with Salomon Smith Barney by the
management of PXP, including information with respect to assets under
management and breakdown among products, types of clients served,
historical asset flows and product performance;
. reviewed certain publicly available business and financial information
with respect to certain other companies that Salomon Smith Barney
believed to be relevant or comparable in certain respects to PXP,
including information with respect to assets under management and
breakdown among products, types of clients served, historical asset flows
and product performance, and the trading markets for such other
companies' securities;
. reviewed and analyzed certain publicly available and other information
concerning the trading of, and the trading market for, PXP common stock;
. reviewed the financial terms of certain business combinations and
acquisition transactions that Salomon Smith Barney deemed reasonably
comparable to the merger and otherwise relevant to Salomon Smith Barney's
inquiry;
. discussed with members of PXP's senior management and certain officers
and employees of PXP the foregoing, including the past and current
business operations, financial condition and prospects of PXP, as well as
other matters that Salomon Smith Barney believed relevant to its inquiry;
and
. considered such other information, financial studies, analyses,
investigations and financial, economic, market and trading criteria as
Salomon Smith Barney deemed relevant to its inquiry.
In its review and analysis and in arriving at its opinion, Salomon Smith
Barney assumed and relied upon, without assuming any responsibility for
verification, the accuracy and completeness of all of the financial and other
information publicly available or provided to, discussed with, or reviewed by
or for Salomon Smith Barney. Salomon Smith Barney also assumed that the final
form of the merger agreement would not vary in any respect that is material to
Salomon Smith Barney's analysis from the last draft reviewed by Salomon Smith
Barney. With respect to the information contained in the financial projections
for PXP provided to, discussed or reviewed with Salomon Smith Barney by the
management of PXP, Salomon Smith Barney was advised by management of PXP, and
Salomon Smith Barney assumed, that the projections were reasonably prepared on
bases reflecting the best
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<PAGE>
available estimates and judgments on the part of management of PXP, as to the
future financial performance of PXP. We refer you to the information under the
heading "FINANCIAL PROJECTIONS." Salomon Smith Barney expressed no view as to
the projections or the information or the assumptions on which they were
based.
Salomon Smith Barney did not assume any responsibility for making or
obtaining any independent evaluations or appraisals of any of the assets or
liabilities (contingent or otherwise) of PXP, nor for conducting a physical
inspection of the properties and facilities of PXP, and Salomon Smith Barney
was not furnished with any such evaluation or appraisal. Salomon Smith
Barney's opinion necessarily was based on the information available to it, and
market, economic and other conditions as they existed and could be evaluated
on September 10, 2000, and Salomon Smith Barney assumed no responsibility to
update or revise its opinion based upon circumstances or events occurring
after September 10, 2000. Salomon Smith Barney's opinion addresses the
fairness of the merger consideration only as of September 10, 2000 and not as
of the date of the proxy statement. Salomon Smith Barney would update its
opinion only if engaged to do so by the independent directors committee. The
independent directors committee does not currently anticipate requesting an
updated opinion. In the event there were material changes to the terms of the
merger or the independent directors committee became aware of other material
developments or conditions affecting PXP or its business, the committee would
consider the advisability of seeking an updated opinion.
Salomon Smith Barney's opinion, and the presentation of Salomon Smith
Barney to the independent directors committee, was only one of the many
factors taken into consideration by the independent directors committee in
making its determination to recommend that the board of directors approve the
merger agreement and declare its advisability. See "SPECIAL FACTORS--
Recommendations of the Independent Directors Committee and Board of
Directors." The terms of the merger agreement were determined through
negotiations between the independent directors committee and Phoenix. The
decision to approve the merger agreement and declare its advisability was
solely that of the PXP board of directors, based upon the recommendation of
the independent directors committee. In connection with the preparation of its
opinion, Salomon Smith Barney was not authorized to solicit, nor did it
solicit, third-party indications of interest for the acquisition of all or any
part of PXP. Salomon Smith Barney noted in rendering its opinion that Phoenix
stated in its initial offer letter of July 24, 2000 that it was not interested
in selling its interest in PXP.
In connection with rendering its opinion to the independent directors
committee, Salomon Smith Barney performed a variety of financial analyses, the
material portions of which are summarized below. The summary of such analyses
set forth below does not purport to be a complete description of the analyses
underlying Salomon Smith Barney's opinion or of Salomon Smith Barney's
presentation to the independent directors committee. In addition, Salomon
Smith Barney believes that its analyses must be considered as a whole and that
selecting portions of such analyses and the factors considered therein,
without considering all such analyses and factors, could create an incomplete
view of the analyses and the process underlying Salomon Smith Barney's
opinion. While the conclusions reached in connection with each analysis were
considered carefully by Salomon Smith Barney in arriving at Salomon Smith
Barney's opinion, Salomon Smith Barney made various subjective judgments in
arriving at its opinion and did not consider it practicable to, nor did it
attempt to, assign relative weights to the individual analyses and specific
factors considered in reaching its opinion.
The preparation of a fairness opinion is a complex process and necessarily
requires a broad range of subjective judgments with respect to appropriate
comparable companies and transactions, appropriate multiples of various
selected financial data, appropriate discount rates and other financial and
other factors. Analyses and estimates of the values of companies do not
purport to be appraisals or necessarily reflect the prices at which companies
or their securities actually may be sold. No public company utilized as a
comparison is identical to PXP, and none of the other transactions utilized as
a comparison is identical to the proposed merger. Accordingly, any analysis of
publicly traded comparable companies or comparable transactions is not
mathematical; rather, it involves complex considerations and judgments
concerning differences in financial and operating characteristics of the
companies involved and other factors that could affect the public trading
value of the companies or company to which they are being compared. The range
of valuation for any particular analysis should not be taken to be the view of
Salomon Smith Barney of the actual value of PXP. In its analyses, Salomon
Smith Barney made numerous assumptions with respect to PXP, industry
performance, general business, economic, market and
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<PAGE>
financial conditions and other matters, many of which are beyond the control
of PXP. The estimates contained in such analyses and the valuation ranges
resulting from any particular analysis are not necessarily indicative of
actual values or predictive of future results or values, which may be
significantly more or less favorable than those suggested by such analyses.
Financial Analyses
The following is a summary of the material financial analyses performed by
Salomon Smith Barney in connection with its opinion dated September 10, 2000.
Normalized Price Analysis. As an initial step in its analysis, Salomon
Smith Barney considered the closing market price per share of PXP common stock
as of July 24, 2000, the day of Phoenix's initial offer regarding a potential
transaction between Phoenix and PXP (which was received after the market
closed), and found the price to be $10.81.
Since the market price of PXP common stock following the initial offer
included the effects of speculation regarding the terms and timing of a
potential transaction, Salomon Smith Barney selected a group of investment
advisors having a market capitalization of less than $2 billion which included
Affiliated Managers Group, Inc., Gabelli Asset Management Inc., Eaton Vance
Corporation, The John Nuveen Company and Waddell & Reed Financial Inc.,
referred to herein as the Selected Small Cap Peer Group, and examined the
changes in the market prices of this group, for the period from July 24, 2000
until September 8, 2000 (the last trading day prior to the date Salomon Smith
Barney rendered its opinion to the independent directors committee). Salomon
Smith Barney calculated the change in the price level of the Selected Small
Cap Peer Group and found that the change in the index over that period was an
increase of 13.6%. Applying that percentage increase to the closing market
price per share of PXP common stock on July 24, 2000, Salomon Smith Barney
obtained a "normalized" price per share of PXP common stock of $12.29, which
it considered to be a reasonable approximation of the price per share of PXP
common stock that might have been expected to exist on September 8, 2000
absent public statements regarding a potential transaction.
Premium Analysis. Salomon Smith Barney calculated that the merger
consideration of $15.75 per share represented the following premiums over the
trading price for PXP common stock:
. A 28.2% premium over the "normalized" price per share of PXP common stock
as of September 8, 2000;
. A 30.6% premium over the highest closing price of PXP common stock during
the year prior to Phoenix's initial offer, and a 147.1% premium over the
lowest closing price of PXP common stock during that year;
. A 45.7% premium over the closing price per share of PXP common stock the
day prior to Phoenix's initial offer;
. A 40.0% premium over the closing price per share of PXP common stock one
week prior to Phoenix's initial offer;
. A 42.6% premium over the average closing price per share of PXP common
stock for the week prior to Phoenix's initial offer;
. A 62.6% premium over the closing price per share of PXP common stock four
weeks prior to Phoenix's initial offer;
. A 45.0% premium over the average closing price per share of PXP common
stock for the four weeks prior to Phoenix's initial offer;
. A 98.4% premium over the closing price per share of PXP common stock
three months prior to Phoenix's initial offer; and
. A 65.9% premium over the average closing price per share of PXP common
stock for the three month period before Phoenix's initial offer.
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<PAGE>
Going Private Implied Premium Analysis. Salomon Smith Barney also analyzed
the premiums offered in other domestic "going private" transactions for the
periods since 1992 and 1999 where the transaction value was at least $40
million and the acquiring party owned at least 40% of the target firm prior to
the transaction, in each case separately for (1) financial institutions as a
group and (2) all target firms as a group where the consideration offered
consisted solely of cash. Based upon these analyses, Salomon Smith Barney
calculated implied valuations for PXP common stock as follows:
<TABLE>
<CAPTION>
Implied Value per share
Based on Median Premium of PXP Common Stock
to Price of Target Stock based on Median Premium
---------------------------------- -------------------------------------
Four weeks prior One week prior to Four weeks prior to One week prior to
to initial offer initial offer initial offer initial offer
---------------- ----------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Cash Transactions:
-------------------------------------------------------------------------------------------------
Since 1992............ 24.9% 22.1% $12.09 $13.74
Since 1999............ 40.6 26.0 13.62 14.17
Financial Institution
Transactions:
-------------------------------------------------------------------------------------------------
Since 1992............ 21.5 20.0 11.77 13.49
Since 1999............ 46.3 39.7 14.17 15.72
</TABLE>
Finally, Salomon Smith Barney analyzed the premiums paid in the following
recent selected "going private" transactions involving financial institution
targets, and based upon these analyses, calculated implied valuations for PXP
common stock as follows:
<TABLE>
<CAPTION>
Implied value per share
Premium to Price of PXP Common Stock
of Target Stock based on Premium Paid
------------------------- -----------------------------------
Four weeks One week
prior to prior to Four weeks prior to One week prior
announcement announcement announcement to announcement
------------ ------------ ------------------- ---------------
<S> <C> <C> <C> <C>
Metropolitan Life
Insurance Company/
Conning Corporation
(target)............... 52.1% 38.9% $14.73 $15.63
---------------------------------------------------------------------------------------
Hartford Financial
Services Group
Inc./Hartford Life Inc.
(target)............... 43.3 40.3 13.88 15.78
---------------------------------------------------------------------------------------
Citigroup Inc./Travelers
Property Casualty Corp.
(target)............... 35.1 39.5 13.08 15.70
</TABLE>
Public Market Comparable Company Analysis. Using publicly available
information, Salomon Smith Barney analyzed, among other things, the operating
performance and market valuation of two groups of publicly traded investment
advisors considered by Salomon Smith Barney to be comparable to PXP. In order
to analyze market valuation, Salomon Smith Barney calculated a variety of
trading multiples, including firm value as a multiple of last twelve months,
or LTM, revenues and earnings before interest, taxes, depreciation and
amortization, or EBITDA, firm value as a multiple of last quarter annualized,
or LQA, EBITDA, and market value as a multiple of LTM cash flow, pre-tax
earnings and earnings, and as a multiple of estimated earnings per share for
2000 and 2001.
The first group utilized by Salomon Smith Barney consisted of broadly
comparable "pure play" investment advisors or the Peer Group, and included
Affiliated Managers Group, Inc., AMVESCAP PLC, BlackRock Inc., Eaton Vance
Corporation, Federated Investors, Inc., Franklin Resources, Inc., Gabelli
Asset Management Inc., The John Nuveen Company, Neuberger Berman Inc.,
Stilwell Financial Inc., T. Rowe Price Associates, Inc., and Waddell & Reed
Financial Inc. The second group consisted of the Selected Small Cap Peer
Group, members of which had market capitalizations more similar to that of
PXP.
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<PAGE>
Using the comparable operating data for PXP, Salomon Smith Barney
calculated the implied valuation range for a share of PXP common stock based
upon the median multiple for each of the measures described above and the
average of the implied valuation ranges calculated for each such median
multiple. Salomon Smith Barney performed this analysis once using each of the
measures of value described above, or the all metrics analysis, and a second
time using only the prospective measures of value, LQA EBITDA, and estimated
2000 and 2001 earnings, or the prospective metrics analysis. The results of
these analyses are as follows:
<TABLE>
<CAPTION>
Implied Value Range
-------------------
<S> <C>
Selected Small Cap Peer Group:
All Metrics......................................... $12.08-13.50
Prospective Metrics................................. 10.80-12.07
Peer Group:
All Metrics......................................... 15.64-17.44
Prospective Metrics................................. 13.28-14.81
</TABLE>
Discounted Cash Flow Analysis. Based on the projections provided by PXP's
management, Salomon Smith Barney performed a discounted cash flow, or DCF,
analysis on PXP to estimate an implied valuation range for a share of PXP
common stock. This range was determined by adding (i) the present value of the
estimated future after-tax cash flow stream that PXP could generate over a
five-year period and (ii) the present value of the "terminal value" of a share
of PXP common stock at the end of the five year period, December 31, 2004.
In calculating the terminal value of PXP common stock at the end of the
five-year period, Salomon Smith Barney applied a range of multiples of 8.0x to
10.0x to forecasted EBITDA for 2004. The after-tax cash flows and terminal
values were then discounted back to June 30, 2000 using a range of discount
rates from 12.0% to 14.0%.
Based upon such analyses, Salomon Smith Barney estimated an implied
valuation range for a share of PXP common stock of $15.85 to $21.23.
Private Market Analysis. Salomon Smith Barney reviewed publicly available
information with respect to the following nine acquisitions of domestic asset
managers occurring from 1997 to 2000 in transactions involving a purchase
price greater than $300 million for which sufficient data was available. In
connection with its analysis, Salomon Smith Barney noted that such
transactions, unlike the merger, involved the sale of all or substantially all
of the target company's stock.
<TABLE>
<CAPTION>
Date of Announcement Acquiror Target
-------------------- -------- ------
<S> <C> <C>
June 20, 2000............ Alliance Capital Management Sanford C. Bernstein & Co.
June 20, 2000............ Old Mutual Plc United Asset Management
June 16, 2000............ CDC Asset Mgmt. Nvest, L.P.
June 12, 2000............ Liberty Financial Companies Wanger Asset Mgmt., LP
May 15, 2000............. Unicredito Italiano Group Pioneer Group
January 13, 2000......... Charles Schwab U.S. Trust Corp.
November 1, 1999......... Allianz AG PIMCO Advisors LP
August 10, 1998.......... Northwestern Mutual Life Frank Russell Company
November 5, 1997......... PIMCO Advisors LP Oppenheimer Capital
</TABLE>
For each transaction, Salomon Smith Barney calculated a variety of
transaction multiples, including firm value as a percentage of assets under
management and as a multiple of LTM revenues and EBITDA, and equity value as a
multiple of LTM pre-tax income and net income.
Using the comparable data for PXP, Salomon Smith Barney calculated an
implied valuation range for PXP common stock based upon the median multiple
for each of the measures of value described above, and the average of such
implied valuation ranges for each share of PXP common stock. Based upon such
analysis, Salomon Smith Barney estimated an implied valuation range for a
share of PXP common stock of $18.33 to $20.45.
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<PAGE>
Salomon Smith Barney is an internationally recognized investment banking
firm that regularly engages in, among other things, the valuation of companies
and their securities in connection with mergers and acquisitions, negotiated
underwritings, competitive bids, secondary distributions of listed and
unlisted securities, and corporate, estate and other purposes. The independent
directors committee retained Salomon Smith Barney as its financial advisor
because of its reputation, expertise in the valuation of companies,
substantial experience in transactions such as those contemplated by the
merger agreement and familiarity with the investment management industry.
Salomon Smith Barney, in the ordinary course of business, may have from
time to time provided, and in the future may continue to provide, investment
banking, financial advisory and other related services to PXP, Phoenix and/or
their respective affiliates, as the case may be, for which it has received or
will receive fees. In the ordinary course of business, Salomon Smith Barney or
its affiliates may hold or actively trade in the debt and equity securities of
PXP, Phoenix and/or their respective affiliates, as the case may be, for its
own account and for the accounts of its customers and, accordingly, may at any
time hold a long or short position in such securities. In addition, Salomon
Smith Barney and its affiliates (including Citigroup Inc. and its affiliates)
may maintain other business relationships with PXP, Phoenix and/or their
respective affiliates.
Pursuant to the terms of Salomon Smith Barney's engagement, PXP has paid
and agreed to pay Salomon Smith Barney the following fees for its services
rendered in connection with the merger:
(i) A retainer fee of $50,000, which was paid upon the commencement of
Salomon Smith Barney's engagement; and
(ii) An additional fee equal to $1,250,000, plus 0.80% of the additional
consideration payable under the merger agreement to holders of PXP common
stock, convertible securities and options resulting from merger
consideration in excess of $14.00 per share of PXP common stock, plus 0.20%
of the additional consideration resulting from merger consideration in
excess of $15.50 per share of PXP common stock, 25% of which was paid upon
delivery of Salomon Smith Barney's opinion, and 75% of which will be
payable upon the consummation of the merger (less the retainer fee paid
under clause (i) above). Based on this formula, Salomon Smith Barney will
receive a total fee of approximately $1.7 million, a majority of which is
payable upon consummation of the transaction.
PXP has also agreed to reimburse Salomon Smith Barney for its reasonable
travel and other expenses incurred in connection with its engagement
(including the reasonable fees and expenses of its counsel), and to indemnify
Salomon Smith Barney and certain related persons against certain liabilities
and expenses, including liabilities under the federal securities laws, arising
out of or relating to Salomon Smith Barney's engagement.
Financial Analysis of the Financial Advisor to Phoenix
Phoenix engaged Morgan Stanley to act as its financial advisor to advise it
of its strategic alternatives regarding its 58% interest in PXP. Morgan
Stanley was not requested to, and did not provide, any opinion as to the
fairness of the merger to Phoenix or to PXP or its stockholders. On July 7,
2000, Morgan Stanley presented to the executive committee of the board of
directors of Phoenix, an analysis of the valuation of the shares held by PXP's
public stockholders.
In preparing the analysis, Morgan Stanley, among other things:
. reviewed the publicly available business and financial information
relating to PXP that Morgan Stanley deemed relevant;
. reviewed selected information relating to the business, earnings, cash
flow, assets, liabilities and prospects of PXP, provided to Morgan
Stanley by the management of PXP;
. reviewed the financial performance and the market prices and valuation
multiples for the common stock of PXP and compared them with those of
selected publicly traded companies that Morgan Stanley deemed to be
relevant;
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<PAGE>
. compared the proposed financial terms of the merger with the financial
terms of other transactions that Morgan Stanley deemed to be relevant;
. participated in discussions and negotiations among representatives of PXP
and its financial advisors and Phoenix and its legal advisors; and
. reviewed such other financial studies and analyses and took into account
such other matters as Morgan Stanley deemed necessary, including an
assessment of general economic and market conditions.
In preparing the analysis, Morgan Stanley assumed and relied, without
independent verification, upon the accuracy and completeness of the
information provided to, reviewed by or discussed with it. With respect to the
information contained in the financial projections provided to Morgan Stanley
by PXP's management, Morgan Stanley assumed that the projections were
reasonably prepared on bases reflecting the best available estimates and
judgments of PXP's management as to the future performance of PXP at that
time. See the information under "FINANCIAL PROJECTIONS". Morgan Stanley did
not make any independent valuation or appraisal of PXP's assets or
liabilities, and it was not provided with any independent valuations or
appraisals. The analysis was necessarily based on information available to
Morgan Stanley as of, and financial, economic, market and other conditions as
in effect on, July 7, 2000. While Morgan Stanley provided advice to Phoenix
with respect to the merger, Morgan Stanley did not recommend any specific
consideration that Phoenix should pay or that any specific consideration
constituted the only appropriate consideration for PXP's shares.
Morgan Stanley's advisory services were provided for the information of
Phoenix in its evaluation of the merger and the analysis is not intended to
be, nor does it constitute, an opinion as to fairness of the merger to Phoenix
or PXP or its stockholders, nor a recommendation to any PXP stockholder as to
how that stockholder should vote at the special meeting.
A copy of the analysis material presented to the executive committee of the
board of directors of Phoenix is included as Exhibit (c)(4) to PXP's Schedule
13E-3 filed with the Securities and Exchange Commission. For information on
where this material is available for inspection or copying, see "WHERE YOU CAN
FIND MORE INFORMATION." The description of the analyses performed by Morgan
Stanley set forth below is qualified by reference to the analysis material.
The following is a brief summary of all material analyses performed by
Morgan Stanley.
Comparable Companies Analysis. Morgan Stanley selected the following
publicly traded companies engaged in business that Morgan Stanley deemed
similar to that of PXP.
. Franklin Resources . T. Rowe Price
. AMVESCAP . Eaton Vance
. Federated Investors . John Nuveen Company
. Waddell & Reed . Neuberger Berman
. United Asset Management . Affiliated Managers Group
. Blackrock . Alliance Capital Management
. Nvest
Morgan Stanley determined the market capitalization for each of these
companies based on the closing price per share as of June 29, 2000, using
publicly available information. Morgan Stanley then arrived at a range of
comparable company multiples by dividing the share price of each company by
its estimated earnings per share, or EPS, for 2000 and 2001. Morgan Stanley
analyzed EPS estimates for 2000 and 2001 from management as well as research
estimates to arrive at an implied value range for PXP stock on an equity value
basis. Year 2000 EPS estimates ranged between $0.78 per share and $0.86 per
share, and 2001 EPS estimates ranged between
24
<PAGE>
$0.82 per share and $1.00 per share. Based on these estimates, Morgan Stanley
arrived at an indicative equity value range of $10.00 to $11.50 per fully
diluted share. Morgan Stanley also determined a trading range based on
aggregate value by using last 12 months EBITDA multiples for PXP. This
analysis resulted in an implied trading range of $11.00 to $15.00 per fully
diluted share.
Analysis of Selected Minority Buy-outs. Morgan Stanley analyzed a select
group of minority buy-out transactions in the asset management sector, from
1992 to present. Morgan Stanley analyzed the premiums paid on these
transactions to the price of the stock the day prior to the public
announcement of the transaction, and by unaffected price. Unaffected price is
the mean share price of the acquiree for the 30 calendar days prior to
implicit or explicit market expectation of acquisition by parent. In these
transactions, the median premium paid over the stock price for the day prior
to announcement was 17.8%, and the median premium paid over the unaffected
stock price was 24.3%. Based on this analysis, Morgan Stanley derived an
implied range of $12.30 to $14.35 per fully diluted share of PXP to be
acquired by Phoenix.
Precedent Transactions Analysis. Morgan Stanley examined multiples based on
publicly available information for selected precedent transactions in the
asset management sector. Precedent transaction analysis is used to look at
range of prices paid on similar transactions in order to estimate a reference
range of values that may be applicable if someone were to acquire PXP. The
precedent prices typically take into consideration a premium paid by the
acquiror for assuming control of the target, i.e. a change-of-control premium.
Morgan Stanley arrived at a range of $11.00 to $16.00 per fully diluted share
based on the prices paid for precedent transactions. Morgan Stanley noted that
in the case of a Phoenix buy-out of the remaining PXP shares, this analysis
may not be relevant because Phoenix already has majority control of PXP and
thus a change-of-control premium may not be applicable to this transaction.
Discounted Cash Flow Analysis. Morgan Stanley generated estimates of future
cash flows for PXP for the period 2000-2010, based on publicly available
information, PXP management projections and Morgan Stanley estimates. Morgan
Stanley determined the present value of such cash flows using a range of
discount rates of 13.0% to 14.0% and a range of terminal EBITDA multiples of
6.5x to 8.5x to arrive at an aggregate value range between $1.02 billion and
$1.16 billion. Morgan Stanley then subtracted from this aggregate value net
debt equal to $239 million to come to an estimated range of aggregate equity
values between $785 million and $918 million. Morgan Stanley derived a range
of $13.50 to $15.50 per fully diluted share implied by this analysis for the
shares to be acquired.
As a follow-up to the analyses presented to the executive committee of the
Phoenix board of directors described above, during a Phoenix board meeting on
August 21 and a conference call with Phoenix senior management on September 5,
Morgan Stanley communicated that the trading performance of asset management
companies had continued to increase, with most comparable companies increasing
approximately 10% since early July. Morgan Stanley also advised the board and
senior management of I/B/E/S forecast earnings which had been marginally
revised upward.
The preceding discussion is a summary of the material financial analyses
furnished by Morgan Stanley to Phoenix, but it does not purport to be a
complete description of the analyses performed by Morgan Stanley or of its
presentation to the executive committee of the board of directors of Phoenix.
The preparation of financial analyses is a complex process involving
subjective judgments. Morgan Stanley made no attempt to assign specific
weights to particular analyses or factors considered, but, rather, made
qualitative judgments as to the significance and relevance of all the analyses
and factors considered. Accordingly, Morgan Stanley believes that its
analyses, and the summary set forth above, must be considered as a whole, and
that selecting portions of the analyses and of the factors considered by
Morgan Stanley, without considering all of the analyses and factors, could
create a misleading or incomplete view of the processes underlying the
analyses conducted by Morgan Stanley.
With regard to the comparable companies analyses summarized above, Morgan
Stanley selected comparable public companies on the basis of various factors,
including the size and similarity of the line of business; however, no company
utilized as a comparison in these analyses summarized above is identical to
PXP. As a
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result, these analyses are not purely mathematical, but also take into account
differences in financial and operating characteristics of the subject
companies and other factors that could affect the public trading value of the
subject companies to which PXP is being compared.
In its financial analyses, Morgan Stanley made numerous assumptions with
respect to PXP, industry performance, general business, economic, market and
financial conditions, and other matters, many of which are beyond the control
of PXP. Any estimates contained in Morgan Stanley's analyses are not
necessarily indicative of actual values or predictive of future results or
values, which may be significantly more or less favorable than those suggested
by these analyses. Estimates of values of companies do not purport to be
appraisals or necessarily to reflect the prices at which companies may
actually be sold. Because these estimates are inherently subject to
uncertainty, none of Phoenix, the Phoenix board of directors, PXP, the PXP
board of directors, Morgan Stanley or any other person assumes responsibility
if future results or actual values differ materially from the estimates.
Morgan Stanley is a nationally recognized investment banking and advisory
firm. Morgan Stanley, as part of its investment banking business, is
continuously engaged in the valuation of businesses and securities in
connection with mergers and acquisitions, negotiated underwritings,
competitive biddings, secondary distributions of listed and unlisted
securities, private placement and valuations for corporate and other purposes.
Morgan Stanley is a full service securities firm engaged in securities trading
and brokerage activities, financing and financial advisory services in
addition to its investment banking activities. In the ordinary course of its
trading, brokerage, and financing activities, Morgan Stanley or its affiliates
may at any time hold long or short positions, and may trade or otherwise
effect transactions, for its own account or the accounts of its customers, in
debt or equity securities or senior loans of PXP, Phoenix or their affiliates.
Morgan Stanley is acting as financial advisor to Phoenix with respect to
certain aspects of its proposed plan of demutualization. Morgan Stanley has,
from time to time in the past, provided financial advice and other services to
Phoenix and PXP.
Pursuant to Morgan Stanley's engagement letter Phoenix has agreed to pay
Morgan Stanley a transaction fee of $2,500,000 on completion of the merger and
has previously paid Morgan Stanley an advisory fee of $100,000. In addition,
Phoenix also has agreed to reimburse Morgan Stanley for its reasonable travel
and other expenses incurred in connection with its engagement and to indemnify
Morgan Stanley against certain liabilities and expenses relating to or arising
out of its engagement.
Position of Phoenix and PM Holdings as to Fairness of the Merger
Phoenix and PM Holdings have considered the factors examined by the
independent directors committee and the board of directors of PXP described in
detail under the heading "SPECIAL FACTORS-- Recommendations of the Independent
Directors Committee and Board of Directors" above. Based on these factors,
Phoenix and PM Holdings believe that the merger agreement is fair to PXP's
public stockholders. Some of the directors of Phoenix are directors and
executive officers of PXP and have interests in the merger not shared by PXP's
public stockholders. These interests are described below under the heading
"Interests of Certain Persons in the Merger". PM Holdings has indicated its
intention to vote in favor of adoption of the merger agreement at the special
meeting.
Interests of Certain Persons in the Merger
General. In considering the recommendations of the independent directors
committee and the PXP board of directors, you should be aware that some of
PXP's officers and directors have interests in the merger or have
relationships, including those referred to below, that present actual or
potential, or the appearance of actual or potential, conflicts of interest in
connection with the merger. The independent directors committee and the PXP
board were aware of these actual or potential conflicts of interest and
considered them along with other matters which have been described in this
proxy statement under the heading "SPECIAL FACTORS--Recommendations of the
Independent Directors Committee and Board of Directors".
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Relationship between PXP and its Officers and Directors. We refer you to
the information under the heading "CURRENT MANAGEMENT OF PXP" and under the
heading "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" for
information regarding our current officers and directors and their stock
ownership in PXP. PXP's officers and directors who own PXP common stock at the
effective time of the merger will be entitled to receive the $15.75 per share
merger consideration for their shares.
Ownership of Phoenix. Phoenix is a mutual insurance company owned by its
members. On April 20, 2000, Phoenix announced that its board of directors had
authorized the company to develop a plan for conversion from a mutual to a
publicly traded stock company.
Treatment of PXP Options. PXP's chief executive officer and the four most
highly compensated executive officers other than the chief executive officer
currently hold options to purchase approximately 1.1 million shares of PXP
common stock that were granted under PXP's employee benefit plans at exercise
prices ranging from $6.88 to $8.44 per share.
At the effective time of the merger, each unexercised stock option
outstanding under PXP's employee benefit plans, whether or not vested or
exercisable, will become fully vested and exercisable, and will be converted
into the right to receive an amount in cash equal to the merger consideration
of $15.75 per share less the exercise price of the stock option. Upon such
conversion, each stock option will automatically be cancelled.
Any amounts actually paid to these officers and directors of PXP for the
cancellation of their stock options under PXP's employee benefit plans will be
reduced by any applicable federal and state income and payroll tax
withholdings.
Continued Employment by PXP. Following the merger, the current officers of
PXP will continue to provide services to PXP, the surviving corporation, as
they did prior to the merger.
Indemnification and Insurance of PXP's Directors and Officers. Phoenix also
agreed that, for six years after the effective time of the merger, the
surviving company will maintain PXP's current provisions in its certificate of
incorporation and bylaws with respect to officers and directors
indemnification. Phoenix has also agreed that, for six years after the
effective time of the merger, the surviving company will maintain PXP's
officers' and directors' liability insurance to the extent available on
commercially reasonable terms.
Consequences of the Merger
Pursuant to the merger agreement, subject to the fulfillment or waiver of
specified conditions, PXP will be merged with a subsidiary of Phoenix, and PXP
will continue as the surviving company in the merger. As a result of the
merger, PXP's public stockholders will be entitled to receive $15.75 in cash,
without interest, for each share of PXP common stock outstanding at the time
of the merger unless they are dissenting shareholders who perfect their
appraisal rights. Following the merger, PXP's public stockholders will cease
to have any ownership interest in PXP and to participate in PXP's future
earnings or growth, if any, or benefit from any increases, if any, in the
value of PXP common stock.
As a result of the merger, Phoenix, through its wholly-owned subsidiary PM
Holdings, will own 100% of the outstanding common stock of PXP. In addition,
Phoenix will have 100% of the benefit of any future earnings of PXP or
increases in the value of PXP and will bear 100% of the risk of any future
losses of PXP or decrease in value of PXP.
PXP will delist its common stock from the New York Stock Exchange and price
quotations will no longer be available. PXP common stock is currently
registered under the Securities Exchange Act of 1934. Following the merger,
PXP will terminate the registration of its common stock under the Exchange Act
and will be relieved of the obligation to comply with the public reporting
requirements of the Exchange Act. Accordingly, PXP will no longer be required
to file periodic reports with the Securities and Exchange Commission, or SEC,
for example
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Form 10-Ks, 10-Qs and 8-Ks. In addition, PXP will no longer be subject to the
proxy rules of Regulation 14A, the short-swing trading profit provisions of
Section 16 and, with respect to future transactions, the going-private
provisions of Rule 13e-3 of the Exchange Act.
At the close of the merger, each outstanding option to purchase shares of
PXP common stock under PXP's employee benefit plans, whether vested or not
vested and whether exercisable or not exercisable, will become fully vested
and exercisable and will be converted into and become the right to receive
cash equal to $15.75 minus the exercise price of the particular option.
Thereafter, all options to purchase shares of PXP common stock granted under
our employee benefit plans, whether vested or not, will be canceled and will
cease to exist.
PXP's certificate of incorporation and bylaws in effect immediately before
the merger will become the surviving company's certificate of incorporation
and bylaws immediately after the merger.
The directors of the newly-formed company, with which PXP will be merged,
will become the surviving company's directors immediately after the merger.
PXP's executive officers immediately before the merger will continue as the
surviving company's executive officers immediately after the merger.
Benefits and Detriments of the Merger to PXP and PXP's Public Stockholders
Benefits and Detriments of the Merger to PXP. PXP believes that the merger
will have the following benefits to PXP:
. as a private company (which will occur as a result of the merger), PXP
will have greater operating flexibility, and it is anticipated that PXP's
management will be able to react with greater speed and flexibility to
changing conditions and opportunities and to make decisions based on
PXP's long-range business interests without having to consider the
possible adverse short-term effect of such decisions upon the market
price of PXP common stock and the interests of PXP's public shareholders;
. the operational and administrative costs currently incurred in connection
with PXP's status as a reporting public company will be eliminated.
PXP believes the detriments of the merger to PXP are:
. PXP will no longer have direct access to the public securities markets;
. PXP will be unable to use its own publicly traded securities as
acquisition capital; and
. PXP will be unable to grant options to its employees to purchase its own
publicly traded securities.
Benefits and Detriments of the Merger to PXP's Public Stockholders. PXP
believes that the merger will result in the following benefits to you:
. it will allow you to immediately realize the value of your investment in
PXP in cash at a price which represents a significant premium to the
market price for PXP common stock before the public announcement of
Phoenix's proposal to acquire all of the outstanding shares of PXP common
stock not owned or controlled by it. The merger consideration of $15.75
per share represents a 45.7% premium over the $10.81 closing price of PXP
common stock on July 24, 2000; and
. it will eliminate the risk of any future decline in the value of your
investment in PXP.
PXP believes the detriments to you of the completion of the merger are:
. you will cease to have any ownership interest in PXP and will cease to
participate in PXP's future earnings or growth, if any, or benefit from
increases, if any, in PXP's value; and
. you may recognize a taxable gain as a result of the merger (see "SPECIAL
FACTORS--U.S. Federal Income Tax Considerations").
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Principal Purposes of the Merger/Plans for Surviving Company After the Merger
The principal purposes of the merger are to permit Phoenix to acquire all
of the publicly held shares of PXP common stock, and to afford the public
stockholders the opportunity to dispose of their shares of PXP common stock at
a fair value. Although the merger is expected to close prior to the completion
of Phoenix's proposed conversion from a mutual to a publicly traded stock
company, the proposed conversion is not the reason for the merger and the
merger is not a requirement of the proposed conversion. Phoenix proposed this
transaction as a result of its concern that PXP's stock price did not reflect
the underlying strength of its business. Despite having shown strong earnings
growth, PXP's stock price remained stagnant in 1999 and into 2000. Phoenix
believes that this may be due in part to Phoenix's controlling interest in PXP
and to the limited number of publicly traded shares of PXP. As a result,
public stockholders have not been able to realize appropriate value for their
interests in PXP despite PXP's good performance.
It is expected that, following consummation of the merger, the operations
and business of PXP will be conducted substantially as, and as independently
as, they are currently conducted. The merger will allow PXP and Phoenix to
work more collaboratively in the execution of a wealth management strategy.
Neither PXP nor Phoenix has any present plans or proposals that relate to or
would result in an extraordinary corporate transaction involving PXP's
corporate structure, business or management, such as a merger, reorganization,
liquidation, relocation of any operations or sale or transfer of a material
amount of assets. However, PXP and Phoenix will continue to evaluate PXP's
business and operations after the merger from time to time, and may propose or
develop new plans and proposals which either considers to be in the best
interests of PXP and Phoenix.
U.S. Federal Income Tax Consequences
The following discussion is a summary of material United States federal
income tax consequences of the merger to PXP's stockholders whose shares of
common stock are held as capital assets and converted into the right to
receive $15.75 cash per share as a result of the merger. Because it is a
summary, it does not include an analysis of all potential tax effects of the
merger. For example, this summary:
. does not consider the effect of any applicable state, local or foreign
tax laws;
. does not address all aspects of federal income taxation that may affect
particular stockholders in light of their particular circumstances;
. is not intended for stockholders who may be subject to special federal
income tax rules, such as:
. insurance companies;
. tax-exempt organizations;
. financial institutions or broker-dealers;
. stockholders who hold their common stock as part of a hedge, straddle
or conversion transaction;
. stockholders who acquired their common stock pursuant to the exercise
of an employee stock option or otherwise as compensation; and
. stockholders who are not citizens or residents of the United States
or that are foreign corporations, foreign partnerships or foreign
estates or trusts as to the United States;
. does not address tax consequences to holders of stock options; and
. does not address tax consequences to Phoenix, its affiliates or any
person who would be treated as constructively owning PXP common stock
immediately after the merger by reason of the attribution rules of
Section 318 of the Internal Revenue Code; these persons must consult with
their tax advisor to determine the tax consequences to them.
This summary assumes that stockholders have held their PXP common stock as
a "capital asset" under the Internal Revenue Code. Generally, a "capital
asset" is property held for investment.
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This summary is based on the current provisions of the Internal Revenue
Code, applicable Treasury Regulations, judicial authorities and administrative
rulings and practice. Neither PXP nor Phoenix nor any of its affiliates has
sought or intends to seek a ruling from the Internal Revenue Service with
respect to any aspect of the merger. Future legislative, judicial or
administrative changes or interpretations could alter or modify the statements
and conclusions set forth in this section. Any of these changes or
interpretations could be retroactive and could affect the tax consequences of
the merger to you.
You should consult your own tax advisor with respect to the particular tax
consequences of the merger, including the applicability and effect of any
state, local or foreign tax laws, and of changes in applicable tax laws.
Treatment of Holders of Common Stock. The conversion of your shares of PXP
common stock into the right to receive $15.75 per share as a result of the
merger, or cash received pursuant to the exercise of your appraisal rights,
will be fully taxable to you. Subject to the assumptions and limitations
described above, you will recognize a capital gain or loss equal to the
difference between:
. the amount of cash you receive in the merger; and
. your tax basis in your PXP common stock.
Generally, your tax basis in your common stock will be equal to what you
paid for your stock. If you are an individual:
. long-term capital gain will be taxable at a maximum capital gains rate of
20% if you held your shares for more than one year at the time of the
merger;
. gain on shares held for one year or less will be subject to ordinary
income tax rates; and
. capital loss may only be offset against capital gains or up to $3,000 per
year of ordinary income, with a carryover of capital loss to subsequent
years to the extent unused.
Backup Withholding. You may be subject to backup withholding at the rate of
31% with respect to the gross proceeds you receive from the conversion of your
common stock into cash unless you:
. are a corporation or other exempt recipient and, when required, establish
this exemption; or
. provide your correct taxpayer identification number, certify that you are
not currently subject to backup withholding and otherwise comply with
applicable requirements of the backup withholding rules.
If, after the merger, you do not provide the paying agent with your correct
taxpayer identification number, and any other documents or certifications
required by the Internal Revenue Service, including, among others, Form W-9 or
a substitute for this Form, you may be subject to penalties imposed by the
Internal Revenue Service. Any amount withheld under these backup withholding
rules will be creditable against your federal income tax liability. The paying
agent will report to you and to the Internal Revenue Service the amount of any
reportable payment made to you (including payments made to you pursuant to the
merger) and any amount withheld pursuant to the merger.
Accounting Treatment
The merger will be accounted for under the purchase method of accounting in
accordance with generally accepted accounting principles. Under this method
the total consideration paid in the merger will be allocated among PXP's
consolidated assets and liabilities based on the fair values of the assets
acquired and liabilities assumed.
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Public Offerings and Repurchases of Common Stock
PXP has not made an underwritten public offering for cash in the past three
years. On November 7, 1996, PXP's board of directors voted to authorize a
stock repurchase plan for up to two million shares of outstanding PXP common
stock. Repurchases were made from time to time in the open market or through
privately negotiated transactions at market prices. The stock repurchase
program was completed in 1999 at a total cost of $14.7 million.
Financing; Source of Funds
Phoenix and PXP estimate that the amount of funds required to fund the
payment of the merger consideration, including payment with respect to options
and the convertible debentures is approximately $434 million. Phoenix intends
to obtain the funds required to pay the merger consideration from internal
sources. PXP intends to borrow approximately $58 million to fund the payments
with respect to the options. It will also borrow any amounts necessary to make
payments with respect to the redemption or conversion of any convertible
debentures after the merger. PXP's borrowing will be under its existing five
year $175 million unsecured credit agreement entered into on March 17, 1999
with a consortium of banks for which Bank of America National Trust and
Savings Association serves as the syndication agent. The interest rate under
this credit agreement is variable based on LIBOR. Phoenix has guaranteed PXP's
obligations under this credit agreement. PXP does not anticipate the need for
any alternative financing arrangements.
Fees and Expenses
PXP will be responsible for paying its merger-related fees and expenses,
consisting primarily of fees and expenses of investment bankers, attorneys and
accountants, SEC filing fees and other related charges, which it estimates
will total approximately $2.4 million, assuming the merger is completed. This
amount consists of the following estimated fees:
<TABLE>
<CAPTION>
Description Amount
----------- ----------
<S> <C>
Advisory fees and expenses.................................... $1,750,000
Legal fees and expenses....................................... 400,000
Accounting fees and expenses.................................. 25,000
SEC filing fee................................................ 87,000
Printing, solicitation and mailing costs...................... 100,000
Miscellaneous expenses........................................ 38,000
----------
Total..................................................... $2,400,000
==========
</TABLE>
In addition, Phoenix and PM Holdings estimate that they will incur merger
related fees and expenses of approximately $2,800,000, consisting primarily of
fees and expenses of investment bankers, attorneys and accountants and other
related charges.
Regulatory Requirements
In connection with the merger, PXP will be required to make filings with
and obtain approvals from various federal and state governmental agencies,
including:
. filing a certificate of merger with the Secretary of State of the State
of Delaware in accordance with the Delaware General Corporation Law after
the adoption of the merger agreement by PXP's stockholders; and
. compliance with federal and state securities laws.
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Stockholder Lawsuits Challenging the Merger
On July 25, 2000, five lawsuits seeking class action status were filed by
purported PXP stockholders in Delaware Court of Chancery against Phoenix, PXP
and the directors of PXP. The plaintiffs allege, among other things, that
Phoenix, PXP and the directors of PXP have breached fiduciary duties owed to
PXP shareholders (other than Phoenix and its affiliates) in connection with
Phoenix's initial offer to acquire the publicly held shares of PXP
stockholders for $12.50 per share, which the plaintiffs contend is an unfair
price.
The plaintiffs seek, among other things:
. an order enjoining Phoenix's initial offer from being consummated (or, if
consummated, an order rescinding the transaction); and
. an award of attorneys' fees and other costs of litigation.
The plaintiffs have consented to extensions of the defendants' time to respond
to the complaints. In the event that the merger is consummated, the plaintiffs
may choose to continue their actions and seek rescission of the merger or
damages. The costs incurred in defense of these lawsuits have not been, and
are not expected to be, a material amount. Phoenix and PXP believe the actions
to be without merit and intend to vigorously defend these lawsuits.
Some Stockholders may seek Appraisal Rights
Phoenix received a letter dated November 10, 2000 from a law firm on behalf
of several PXP stockholders claiming to own approximately 5 million or 10% of
the shares of PXP common stock (including shares issuable on conversion of
convertible debentures) stating that these stockholders intended as of such
date to seek appraisal rights with respect to the merger under Delaware law.
See "APPRAISAL RIGHTS." Under Section 5.3(d) of the merger agreement, the
obligation of Phoenix to effect the merger is subject to the condition that
holders of not more than 5% of the outstanding shares of PXP common stock have
exercised appraisal rights. However, Phoenix has indicated to PXP that it is
Phoenix's current intention to complete the merger and to waive its rights
under Section 5.3(d) of the merger agreement if these stockholders seek to
exercise their appraisal rights.
------------------------------------------
THE MERGER AGREEMENT
------------------------------------------
On September 10, 2000, Phoenix, PM Holdings and PXP entered into the merger
agreement. The following is a summary of the material provisions of the merger
agreement. Because it is a summary, it does not include all of the information
that is included in the merger agreement. The text of the merger agreement,
which is attached as Appendix A to this proxy statement, is incorporated into
this section by reference. We encourage you to carefully read the merger
agreement in its entirety.
The Merger; Time of Closing
At the effective time of the merger, PXP will be merged with a subsidiary
of Phoenix and PXP will continue as the surviving company. As a result of the
merger, you will be entitled to receive $15.75 in cash, without interest, in
exchange for each of your shares of PXP common stock outstanding at the time
of the merger.
We expect that the merger will close in early 2001.
Exchange and Payment Procedures
PXP has appointed ComputerShare Investor Services LLC as its paying agent
to handle the exchange of PXP common stock certificates for cash in the
merger. Soon after the merger becomes effective, the paying agent will mail to
you a letter of transmittal and instructions explaining how to exchange your
stock certificates for
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cash. Upon surrender to the paying agent of a valid share certificate and a
properly completed letter of transmittal, together with such other documents
as the paying agent may reasonably require, you will be entitled to receive
$15.75 per share. Until surrendered in this manner, each stock certificate
will represent only the right to receive the merger consideration.
You should not send your stock certificates now. You should send them only
after you receive a letter of transmittal from the paying agent. A letter of
transmittal will be mailed to you soon after the merger is completed.
Any merger consideration made available to the paying agent that remains
unclaimed by PXP's stockholders for six months after the time the merger is
completed will be returned to PXP, as the surviving company after the merger,
and any of PXP's stockholders who have not by that time made an exchange must
then look to the surviving company for payment of their claim for merger
consideration.
Transfers of Shares
No transfers of shares of PXP common stock will be made on PXP's share
transfer books after the merger is completed.
Treatment of Stock Options
At the time the merger becomes effective, all outstanding options to
purchase shares of PXP common stock that were granted under PXP's employee
benefit plans, whether or not vested or exercisable, will become fully vested
and exercisable, and will be converted into the right to receive an amount
equal to the amount by which $15.75 exceeds the exercise price per share of
the particular option. When so converted, each option will be automatically
cancelled and cease to exist.
Representations and Warranties
In the merger agreement, PXP has represented and warranted particular
matters to PM Holdings. These include, among other things, representations and
warranties relating to:
. its organization, standing and similar corporate matters;
. its capital structure;
. its subsidiaries;
. its authorization to enter into the merger agreement;
. the independent directors committee's recommendation of the merger
agreement and the receipt of a written fairness opinion from Salomon
Smith Barney;
. the absence of brokers' or finders' fees and expenses (other than to
Salomon Smith Barney);
. the accuracy of its SEC filings;
. the absence of certain changes or events since the date of its most
recent quarterly financial statements filed with the SEC;
. the absence of material undisclosed liabilities; and
. compliance with applicable laws.
The merger agreement also contains representations and warranties by PM
Holdings relating to:
. its organization, standing and similar corporate matters;
. its authorization to enter into the merger agreement;
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. the absence of brokers' or finders' fees and expenses (other than to
Morgan Stanley);
. the accuracy of information supplied by Phoenix for PXP's SEC documents;
and
. its financial ability to consummate the merger.
The representations and warranties in the merger agreement do not survive
the closing of the merger or termination of the merger agreement.
PXP's Covenants
PXP has agreed to certain covenants in the merger agreement. The most
significant of these covenants is that PXP has agreed to call a special
meeting to vote on the merger agreement, prepare and mail this proxy statement
and solicit your vote to adopt the merger agreement.
PM Holdings' Covenants
PM Holdings has agreed, among other things, that:
. for six years after the effective time of the merger, the surviving
company will maintain PXP's current provisions in its certificate of
incorporation and bylaws with respect to indemnification of officers and
directors; and
. for six years after the effective time of the merger, the surviving
company will maintain PXP's officers' and directors' liability insurance
to the extent available on commercially reasonable terms.
Phoenix's Performance Guarantee
Phoenix is a party to the merger agreement only to guarantee PM Holdings'
performance of its financial obligations and liabilities under the merger
agreement.
Conditions
Mutual Closing Conditions. Both PXP's and PM Holdings' obligations to
complete the merger are subject to the satisfaction or waiver by PXP and PM
Holdings of the following conditions:
. the absence of any legal prohibition or material challenge to the merger;
. obtaining all required consents and authorizations;
. adoption of the merger agreement by the affirmative vote of the holders
of a majority of the outstanding shares of PXP common stock; and
. non-revocation of the fairness opinion of Salomon Smith Barney.
Additional Closing Conditions for PM Holdings' Benefit. PM Holdings'
obligation to complete the merger is subject to the satisfaction or waiver of
the following additional conditions:
. the accuracy of PXP's representations and warranties in the merger
agreement as of the effective time of the merger;
. the performance by PXP in all material respects of its obligations under
the merger agreement;
. appraisal rights must not have been exercised by holders of more than
five percent of PXP's outstanding common stock; and
. PXP must have no obligation to issue any shares of its capital stock or
other securities of PXP under any employee benefit plan or otherwise.
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Additional Closing Conditions for PXP's Benefit. PXP's obligation to
complete the merger is subject to the satisfaction or waiver of the following
additional conditions:
. the accuracy of PM Holdings' representations and warranties in the merger
agreement as of the effective time of the merger; and
. the performance by PM Holdings in all material respects of its
obligations under the merger agreement.
Termination of the Merger Agreement
Right to Terminate. The merger agreement may be terminated at any time
before the effective time of the merger in any of the following ways:
. by mutual written consent of PXP and PM Holdings;
. by either PXP or PM Holdings if the merger is not completed by February
28, 2001, so long as the failure of the terminating party to fulfill any
obligation under the merger agreement is not the cause of the failure of
the merger to occur on or prior to such date; or
. by either PXP or PM Holdings if the independent directors committee
withdraws, modifies or changes in any manner adverse to PM Holdings, its
approval of the merger agreement or the merger after having concluded in
good faith after consultation with independent legal counsel that there
is a reasonable probability that the failure to take such action would
result in a violation of its fiduciary obligations under applicable law.
If the merger agreement is terminated, it will become void. However,
termination will not affect the rights of either party against the other for
breach of the merger agreement.
Expenses
Except as described above, all costs and expenses incurred in connection
with the merger agreement will be paid by the party incurring those costs or
expenses.
Amendments; Waivers
Any provision of the merger agreement may be amended or waived before the
merger becomes effective.
----------------------------------------
TREATMENT OF CONVERTIBLE SUBORDINATED DEBENTURES
----------------------------------------
PXP has outstanding approximately $70 million in principal amount of 6%
convertible subordinated debentures due 2015, and options therefor, which are
convertible at any time into shares of PXP common stock. The conversion rate is
3.11 shares of PXP common stock for every $25 principal amount of the
convertible debentures. A holder of convertible debentures who converts prior
to the merger will receive shares of PXP common stock entitling the holder to
receive approximately $49 of merger consideration for each $25 principal amount
of the convertible debentures.
PXP has the right to redeem the convertible debentures for face value, plus
accrued interest, upon prior notice. If the merger is completed, a holder who
has converted will receive more money--approximately $49 worth of merger
consideration or $24 in excess of the $25 principal amount of face value--than
the holder would otherwise receive if the convertible debentures are redeemed
by PXP.
35
<PAGE>
Under the terms of the convertible debentures, holders of convertible
debentures who convert after the merger will receive the merger consideration
they would have received had they converted prior to the merger. This means
that regardless of whether a holder converts before or after the merger, the
holder will receive the same value for the holder's convertible debentures. At
the special meeting, holders of convertible debentures who converted prior to
the record date for the special meeting will be entitled to vote their shares
of PXP common stock issued upon conversion of their convertible debentures.
Convertible debentures in the aggregate principal amount of $35 million, or
approximately 50% of all outstanding convertible debentures, are held by PM
Holdings. PM Holdings does not intend to convert these convertible debentures
into shares of PXP common stock prior to the merger.
As of November 14, 2000, options to purchase $1.2 million in principal
amount of the convertible debentures were outstanding. Holders of options to
purchase PXP's convertible debentures will, upon exercise, be treated in the
same manner as holders of the convertible debentures. To exercise an option to
purchase convertible debentures, an option holder must notify BNY Midwest
Trust Company, 2 N. LaSalle Street, Suite 1020, Chicago, IL 60602, Attention:
Daniel Donovan.
------------------------------------------
APPRAISAL RIGHTS
------------------------------------------
You Have a Right to Dissent
Under the Delaware General Corporation Law, or DGCL, if you do not wish to
accept the merger consideration of $15.75 per share for your shares of PXP
common stock as provided in the merger agreement, you have the right to
dissent from the merger and to seek an appraisal of, and to be paid the fair
value (exclusive of any element of value arising from the accomplishment or
expectation of the merger) for, the shares of PXP common stock held by you,
provided that you comply with the provisions of Section 262 of the DGCL.
Holders of record of PXP common stock who do not vote in favor of adoption
of the merger agreement and who otherwise comply with the applicable statutory
procedures will be entitled to appraisal rights under Section 262 of the DGCL.
A person having a beneficial interest in shares of PXP common stock held of
record in the name of another person, such as a broker or nominee, must act
promptly to cause the record holder to follow the steps summarized below
properly and in a timely manner to perfect appraisal rights.
The following discussion is a summary of the provisions of Section 262 of
the DGCL. The following summary is qualified in its entirety by the full text
of Section 262 of the DGCL which is reprinted in its entirety in Appendix C
attached to this proxy statement. All references in Section 262 of the DGCL
and in this summary to a "stockholder" or "holder" are to the record holder of
the shares of PXP common stock as to which appraisal rights are asserted.
Under Section 262 of the DGCL, holders of shares of PXP common stock who
follow the procedures set forth in Section 262 of the DGCL will be entitled to
have their shares appraised by the Delaware Chancery Court and to receive
payment in cash of the "fair value" of these shares, exclusive of any element
of value arising from the accomplishment or expectation of the merger,
together with a fair rate of interest, if any, as determined by such court.
We Must Provide You Notice
Under Section 262 of the DGCL, since we are submitting for adoption at a
meeting of stockholders the merger agreement, we must notify, not less than 20
days prior to the stockholder meeting, each of our stockholders who was a
stockholder on the record date for the meeting with respect to shares for
which appraisal rights are available, that appraisal rights are so available,
and must include in such notice a copy of Section 262 of the DGCL.
36
<PAGE>
This proxy statement constitutes notice to the holders of shares for which
appraisal rights are available and the applicable statutory provisions of the
DGCL are attached to this proxy statement as Appendix C. If you wish to
exercise your appraisal rights or you wish to preserve your right to do so you
should review the following discussion and Appendix C to this proxy statement
carefully, because failure to timely and properly comply with the procedures
therein specified will result in the loss of appraisal rights under the DGCL.
You Must Perfect Appraisal Rights
A holder of shares for which appraisal rights are available wishing to
exercise the holder's appraisal rights
. must not vote in favor of adoption of the merger agreement or consent to
it in writing, and
. must deliver to PXP, prior to the vote on the merger agreement at the
special meeting, a written demand for appraisal of the holder's shares.
Any proxy that does not contain voting instructions will, unless revoked,
be voted for adoption of the merger agreement. Therefore, a shareholder who
votes by proxy and who wishes to exercise his, her, or its appraisal rights
must vote against adoption of the merger agreement or abstain from voting on
adoption of said merger agreement.
A written demand for appraisal must be in addition to and separate from any
proxy or vote abstaining from or against approving the merger. This demand
must reasonably inform PXP of the identity of the stockholder and of the
stockholder's intent to demand appraisal of his, her or its shares. A holder
of appraisal shares wishing to exercise such holder's appraisal rights must be
the record holder of the shares for which appraisal rights are available on
the date the written demand for appraisal is made and must continue to hold
these shares until the completion of the merger. Accordingly, a holder of
shares for which appraisal rights are available who is the record holder of
these shares on the date the written demand for appraisal is made, but who
thereafter transfers these shares prior to the completion of the merger, will
lose any right to appraisal in respect of these shares.
Only a record holder of shares for which appraisal rights are available is
entitled to assert appraisal rights for the shares registered in that holder's
name. A demand for appraisal should be executed by or on behalf of the record
holder, fully and correctly, as the holder's name appears on the holder's
stock certificates. If the shares for which appraisal rights are available are
owned of record in a fiduciary capacity, for example by a trustee, guardian or
custodian, execution of the demand should be made in that capacity, and if
these shares are owned of record by more than one owner as in a joint tenancy
or tenancy in common, the demand should be executed by or on behalf of all
joint owners. An authorized agent, including one or more joint owners, may
execute a demand for appraisal on behalf of a holder of record. The agent,
however, must identify the record owner or owners and expressly disclose the
fact that, in executing the demand, the agent is agent for such owner or
officers.
A record holder that is a broker who holds shares for which appraisal
rights are available as nominee for several beneficial owners may exercise
appraisal rights with respect to these shares for which appraisal rights are
available held for one or more beneficial owners while not exercising these
rights with respect to the shares held for other beneficial owners. In such
case, the written demand should set forth the number of shares for which
appraisal rights are available and is being sought. When no number of shares
for which appraisal rights are available is expressly mentioned, the demand
will be presumed to cover all the shares in brokerage accounts or other
nominee forms and those who wish to exercise appraisal rights under Section
262 of the DGCL are urged to consult with their brokers to determine the
appropriate procedures for the making of a demand for appraisal by such a
nominee.
All written demands for appraisal should be sent or delivered to:
Phoenix Investment Partners, Ltd.
56 Prospect Street
Hartford, Connecticut 06115
Attention: Nancy Engberg, Secretary
37
<PAGE>
We Must Notify Each Stockholder Who Has Properly Asserted Appraisal Rights
Within 10 days after the completion of the merger, the surviving company
will notify each stockholder who has properly asserted appraisal rights under
Section 262 of the DGCL, and who has not voted in favor of adoption of the
merger agreement, of the date the merger became effective.
A Petition Must Be Filed in the Delaware Chancery Court
Within 120 days after the completion of the merger, but not thereafter, the
surviving company, or any stockholder who has complied with the statutory
requirements summarized above may file a petition in the Delaware Chancery
Court demanding a determination of the fair value of the shares whose holders
are entitled to appraisal rights. PXP is under no obligation to, and has no
present intention to file, a petition with respect to the appraisal of the
fair value of the shares that are entitled to appraisal rights. Accordingly,
it will be the obligation of stockholders wishing to assert appraisal rights
to initiate all necessary action to perfect their appraisal rights within the
time prescribed in Section 262 of the DGCL.
Stockholders May Request Information
Within 120 days after the completion of the merger, any stockholder who has
complied with the requirements for exercise of appraisal rights will be
entitled, upon written request, to receive from the surviving company a
statement setting forth the aggregate number of shares of PXP common stock not
voted in favor of adoption of the merger agreement and with respect to which
demands for appraisal have been received and the aggregate number of holders
of these shares. These statements must be mailed within 10 days after a
written request has been received by the surviving company, or within 10 days
after expiration of the period for delivery of demands for appraisal under
Section 262 of the DGCL, whichever is later.
A Court Will Determine Stockholders Entitled to Appraisal Rights, Fair Value
and Allocation of Expenses
If a petition for appraisal is duly filed by a holder of shares of common
stock and a copy is delivered to the surviving corporation, the surviving
corporation will then be obligated within 20 days to provide the Delaware
Court of Chancery with a duly verified list containing the names and addresses
of all holders of shares of common stock who have demanded appraisal of their
shares. After notice to such holders, the Delaware Court of Chancery is
empowered to conduct a hearing upon the petition to determine those holders
who have complied with Section 262 of the DGCL and who have become entitled to
appraisal rights under that section and will appraise the "fair value" of
their shares of PXP common stock, exclusive of any element of value arising
from the accomplishment or expectation of the merger, together with a fair
rate of interest, if any, to be paid upon the amount determined to be the fair
value. The Delaware Court of Chancery may require the holders who have
demanded payment for their shares of common stock to submit their stock
certificates to the Register in Chancery for a notation thereon of the
pendency of the appraisal proceedings; and if any holder fails to comply with
such direction, the Delaware Court of Chancery may dismiss the proceedings as
to such holder.
Stockholders should be aware that the fair value of their shares of PXP
common stock as determined under Section 262 of the DGCL could be more than,
the same as or less than the value of the merger consideration they would
receive pursuant to the merger agreement if they did not seek appraisal of
their shares of PXP common stock and that investment banking opinions as to
fairness from a financial point of view are not necessarily opinions as to
fair value under section 262 of the DGCL. In determining fair value and, if
applicable, a fair rate of interest, the Delaware Court of Chancery must take
into account all relevant factors. In Weinberger v. UOP, Inc., the Delaware
Supreme Court discussed the factors that could be considered in determining
fair value in an appraisal proceeding, stating that "proof of value by any
techniques or methods which are generally considered acceptable in the
financial community and otherwise admissible in court" should be considered,
and that "fair price obviously requires consideration of all relevant factors
involving the value of a company." The Delaware Supreme Court stated that, in
making this determination of fair value, the court must consider market value,
asset value, dividends, earnings prospects, the nature of the enterprise and
any other facts that could be ascertained as of the date of the merger that
shed any light on future prospects of the merged corporation. In
38
<PAGE>
Weinberger, the Delaware Supreme Court further stated that "elements of future
value, including the nature of the enterprise, which are known or susceptible
of proof as of the date of the merger and not the product of speculation, may
be considered." Section 262 provides that fair value is to be "exclusive of
any element of value arising from the accomplishment or expectation of the
merger."
In addition, Delaware courts have decided that the statutory appraisal
remedy, depending on factual circumstances, may or may not be a dissenter's
exclusive remedy. The Delaware Chancery Court will determine the amount of
interest, if any, to be paid upon the amounts to be received by stockholders
whose appraisal shares have been appraised. The costs of the action may be
determined by the Delaware Chancery Court and taxed upon the parties as the
Delaware Chancery Court deems equitable. The Delaware Chancery Court may also
order that all or a portion of the expenses incurred by any stockholder in
connection with an appraisal, including, without limitation, reasonable
attorneys' fees and the fees and expenses of experts utilized in the appraisal
proceeding, be charged pro rata against the value of all of the appraisal
shares entitled to appraisal.
No Right to Vote Appraisal Shares or Receive Dividends or Distribution on
Appraisal Shares
Any holder of shares for which appraisal rights are available who has duly
demanded an appraisal in compliance with Section 262 of the DGCL will not be
entitled to vote those shares subject to such demand for any purpose or be
entitled to the payment of dividends or other distributions on those shares
(except dividends or other distributions payable to holders of record of these
shares as of a record date prior to the completion of the merger).
Failure to Perfect Appraisal Rights
If any stockholder who properly demands appraisal of his, her or its
appraisal shares under section 262 of the DGCL fails to perfect, or
effectively withdraws or loses, his, her or its right to appraisal, as
provided in section 262 of the DGCL, the stockholder's shares of PXP common
stock will be converted into the right to receive the merger consideration of
$15.75 per share. A stockholder will fail to perfect, or effectively lose or
withdraw, his, her or its right to appraisal if, among other things, no
petition for appraisal is filed within 120 days after the completion of the
merger, or if this stockholder delivers to PXP a written withdrawal of his,
her or its demand for appraisal. Any attempt to withdraw an appraisal demand
more than 60 days after the completion of the merger will require the written
approval of the surviving company.
Cash received pursuant to the exercise of appraisal rights will be subject
to income tax. For additional information, we refer you to the information
under the heading "SPECIAL FACTORS--U.S. Federal Income Tax Consequences."
Failure to follow the steps required by Section 262 of the DGCL for
perfecting appraisal rights may result in the loss of your rights. Under these
circumstances, you will be entitled to receive the $15.75 per share merger
consideration with respect to your shares of PXP common stock in accordance
with the merger agreement.
------------------------------------------
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
------------------------------------------
The tables below set forth selected consolidated financial information for
PXP for the dates and time periods indicated. We derived the consolidated
statement of income and consolidated balance sheet data as of and for the
years ended December 31, 1999 and 1998 from our consolidated financial
statements which have been audited by PricewaterhouseCoopers, LLP, independent
public accountants, as of and for the years ended December 31, 1999 and 1998.
We derived the consolidated statement of income and consolidated balance sheet
data as of and for the nine month periods ended September 30, 2000 and 1999
from our unaudited consolidated financial statements, which include all
adjustments, consisting only of normal recurring adjustments, which management
considers necessary for a fair presentation of results for these unaudited
periods. The results of operations for the
39
<PAGE>
nine months ended September 30, 2000 are not necessarily indicative of the
results of operations that may be expected for the full fiscal year 2000. You
should read the selected consolidated financial data presented below in
conjunction with the "Management's Discussion and Analysis of Financial
Condition and Results of Operations," our consolidated financial statements
with related notes and other financial information contained or incorporated
by reference in our Annual Report on Form 10-K for the year ended December 31,
1999, and our Quarterly Report on Form 10-Q for the quarter ended September
30, 2000, which we incorporate by reference in this proxy statement. For
additional information, we refer you to the information under the heading
"DOCUMENTS INCORPORATED BY REFERENCE."
<TABLE>
<CAPTION>
For the Nine Months Ended For the Year Ended
--------------------------- -------------------------
September 30, September 30, December 31, December 31,
2000 1999* 1999* 1998
------------- ------------- ------------ ------------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Operating revenues....... $245,676 $209,330 $286,628 $221,547
Operating income......... 62,799 49,042 69,089 48,685
Net income............... 34,504 17,194 26,711 34,640
Basic earnings per share. 0.78 0.39 0.61 0.76
Diluted earnings per
share................... 0.67 0.36 0.55 0.68
Current assets........... 106,492 93,506 99,289 83,539
Noncurrent assets........ 605,081 600,408 582,397 480,179
Current liabilities...... 60,904 63,763 64,897 53,223
Long-term obligations.... 250,008 254,703 239,513 146,561
Convertible subordinated
debentures.............. 70,021 76,364 76,364 76,364
Other noncurrent
liabilities............. 39,811 51,413 45,656 53,446
Minority interest........ 2,407 3,087 4,255 2,531
Book value per share..... 6.29 5.57 5.74 5.30
Cash dividends declared
per common share........ 0.24 0.18 0.24 0.24
</TABLE>
--------
* 1999 includes the Zweig Fund Group from March 1, 1999 to December 31,
1999.
------------------------------------------
FINANCIAL PROJECTIONS
------------------------------------------
We do not as a matter of course make public forecasts as to future
revenues, earnings or other financial information. We did, however, prepare
projections which we provided to Salomon Smith Barney in connection with its
analysis of the fairness, from a financial point of view, of the merger
consideration to be received by PXP's public stockholders and to Phoenix and
its financial advisor, Morgan Stanley. The projections set forth below are
included in this proxy statement solely because this information was provided
to Salomon Smith Barney and Morgan Stanley. We refer you to the information
under the heading "SPECIAL FACTORS-- Background of the Merger" and "SPECIAL
FACTORS--Opinion of the Financial Advisor for the Independent Directors
Committee" for more information about Salomon Smith Barney's role in the
merger and "SPECIAL FACTORS--Background of the Merger."
The projections set forth below were prepared as of February, 2000. They
were not prepared by PXP with a view to public disclosure or compliance with
published guidelines of the SEC or the American Institute of Certified Public
Accountants regarding prospective financial information. In addition, the
projections were not prepared with the assistance of or reviewed, compiled or
examined by, PXP's independent auditors, or any other independent accountants.
The projections reflect numerous assumptions, all made by PXP's management,
with respect to industry performance, general business, economic, market and
financial conditions and other matters,
40
<PAGE>
all of which are difficult to predict and many of which are beyond PXP's
control. In the view of PXP's management, however, this information was
prepared on a reasonable basis and reflects the best available estimates and
judgments and presents, to the best knowledge and belief of PXP's management,
as of the date they were prepared, the expected course of action and the
expected future financial performance of PXP. The following projections and
information are not facts. Accordingly, there can be no assurance that the
assumptions made in preparing the projections set forth below will prove
accurate, and actual results could be materially greater or less than those
contained in the projections set forth below. In addition, we refer you to the
information under the heading "CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
INFORMATION."
The inclusion of the projections in this proxy statement should not be
regarded as an indication that PXP or any of its respective representatives,
or respective officers and directors, consider such information to be an
accurate prediction of future events or necessarily achievable. In light of
the uncertainties inherent in forward-looking information of any kind, we
caution against undue reliance on such information. We do not intend to update
or revise such projections to reflect circumstances existing after the date
when prepared or to reflect the occurrence of future events, unless required
by law.
The table below summarizes the material aspects of the projections that
were provided to Salomon Smith Barney and Morgan Stanley:
<TABLE>
<CAPTION>
Projected Consolidated
Statements of Income
----------------------------
2000 2001 2002
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total Revenues.............................. $331,207 $353,412 $392,154
Total Operating Expenses.................... 234,094 248,806 265,560
-------- -------- --------
Operating Income............................ 97,113 104,606 126,594
Net Income.................................. 40,495 44,046 57,135
EBITDA Margin............................... 39.10% 38.85% 40.36%
</TABLE>
In preparing the above financial projections, PXP has made assumptions
about its market, growth rates and other factors that may affect the accuracy
of these financial projections. These projections assume that revenues would
increase 16%, 7% and 11% in years 2000 through 2002. Redemption and withdrawal
rates were based primarily on industry averages and management's best
estimates. Performance rates assumed returns of approximately 10% for equity
investments, 6.5% for fixed income investments and 5% for money market
investments. Expense estimates for year 2000 assumed increases in base
compensation averaging approximately 5% and incentive compensation in line
with industry averages. Employment expenses for years 2001 and 2002 assumed
increases of 4% each year over the prior year. Other operating expenses were
assumed to increase 8% in year 2000 and 3% in each of years 2001 and 2002.
The projections set forth above should be read together with the "SELECTED
HISTORICAL CONSOLIDATED FINANCIAL DATA" included in this proxy statement.
These projections should also be read together with our historical financial
statements, and other financial information, and the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" set forth in
our 1999 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the
quarter ended September 30, 2000, each of which is incorporated by reference
into this proxy statement.
------------------------------------------
COMMON STOCK MARKET PRICE AND DIVIDEND INFORMATION
------------------------------------------
Our common stock is traded on the New York Stock Exchange under the symbol
"PXP". The table below sets forth the high and low sales prices per share, and
the cash dividend paid per share, in each quarterly period for the two most
recent fiscal years and for the current fiscal year to date as reported by the
New York Stock Exchange. The common stock prices do not include adjustments
for retail markups, markdowns or commissions.
41
<PAGE>
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
------ ------ ---------
<S> <C> <C> <C>
FISCAL YEAR ENDING DECEMBER 31, 2000
Fourth Quarter (through December 6, 2000)....... $15.69 $15.25 $0.08
Third Quarter................................... 15.75 10.50 0.08
Second Quarter.................................. 10.50 7.13 0.08
First Quarter................................... 8.38 6.38 0.08
FISCAL YEAR ENDED DECEMBER 31, 1999
Fourth Quarter.................................. $ 9.00 $ 7.50 $0.06
Third Quarter................................... 9.25 8.19 0.06
Second Quarter.................................. 10.13 8.38 0.06
First Quarter................................... 9.19 7.00 0.06
FISCAL YEAR ENDED DECEMBER 31, 1998
Fourth Quarter.................................. $ 8.75 $ 6.69 $0.06
Third Quarter................................... 9.44 6.63 0.06
Second Quarter.................................. 9.88 8.19 0.06
First Quarter................................... 9.38 7.38 0.06
</TABLE>
On July 24, 2000, the last day of trading prior to our public announcement
of Phoenix's proposal to acquire all of the outstanding shares of PXP common
stock (other than those held by Phoenix and its affiliates), the high, low and
closing sales prices per share of our common stock as reported by New York
Stock Exchange were $10.94, $10.69 and $10.81, respectively. On September 8,
2000, the last trading day before the public announcement of the merger
agreement, the high, low and closing sales prices per share of our common
stock as reported by New York Stock Exchange were $14.88, $14.50 and $14.50,
respectively. On December 6, 2000, the last trading day before the printing of
this proxy statement, the high, low and closing sales prices per share of our
common stock as reported by New York Stock Exchange were $15.63, $15.56 and
$15.56, respectively. You should obtain current market price quotations for
PXP common stock in connection with voting your shares.
On the record date for the special meeting, there were approximately 170
holders of record of PXP common stock.
------------------------------------------
COMMON STOCK PURCHASE INFORMATION
------------------------------------------
The following sets forth information with respect to purchases of shares of
PXP common stock by PXP, Phoenix and PM Holdings during the past two years.
<TABLE>
<CAPTION>
No. of Shares Average Price
Purchased During Paid During
Quarter/Year Purchaser Quarter Quarter
------------ --------- ---------------- -------------
<S> <C> <C> <C>
Q3-2000.......................... -- -- --
Q2-2000.......................... -- -- --
Q1-2000.......................... PXP 34,899 $8.13
Q4-1999.......................... PXP 106,200 8.26
Q3-1999.......................... PXP 161,700 8.31
Q2-1999.......................... -- -- --
Q1-1999.......................... PXP 270,300 7.00
Q4-1998.......................... PXP 189,600 6.76
</TABLE>
During the past 60 days, the following purchases of PXP common stock were
made for the account of the executive officers of PXP and Phoenix listed below
in transactions pursuant to automatic payroll deductions through employee
benefit plans:
42
<PAGE>
<TABLE>
<CAPTION>
Number of Price
Purchase Shares per
Name Date Purchased Share
---- ---------- --------- ------
<S> <C> <C> <C>
Philip R. McLoughlin.......................... 10/12/2000 162 $15.25
William R. Moyer.............................. 10/12/2000 19 15.25
John F. Sharry................................ 10/12/2000 182 15.25
Thomas N. Steenburg........................... 10/12/2000 32 15.25
Dona Young.................................... 10/12/2000 42 15.25
David Searfoss................................ 10/12/2000 105 15.25
Carl Chadburn................................. 10/12/2000 1 15.25
Philip R. McLoughlin.......................... 10/26/2000 154 15.44
William R. Moyer.............................. 10/26/2000 18 15.44
John F. Sharry................................ 10/26/2000 172 15.44
Thomas N. Steenburg........................... 10/26/2000 30 15.44
Dona Young.................................... 10/26/2000 42 15.44
David Searfoss................................ 10/26/2000 105 15.44
Carl Chadburn................................. 10/26/2000 1 15.44
Philip R. McLoughlin.......................... 11/1/2000 1,284 7.33
William R. Moyer.............................. 11/1/2000 1,365 7.33
John F. Sharry................................ 11/1/2000 404 7.33
Thomas N. Steenburg........................... 11/1/2000 211 7.33
Elizabeth R. Rudden........................... 11/1/2000 522 7.33
Nancy J. Engberg.............................. 11/1/2000 348 7.33
Michael A. Kearney............................ 11/1/2000 225 7.33
Philip R. McLoughlin.......................... 11/9/2000 154 15.44
William R. Moyer.............................. 11/9/2000 18 15.44
John F. Sharry................................ 11/9/2000 172 15.44
Thomas N. Steenburg........................... 11/9/2000 30 15.44
Dona Young.................................... 11/9/2000 42 15.44
David Searfoss................................ 11/9/2000 105 15.44
Carl Chadburn................................. 11/9/2000 1 15.44
Philip R. McLoughlin.......................... 11/22/2000 152 15.63
William R. Moyer.............................. 11/22/2000 18 15.63
John F. Sharry................................ 11/22/2000 170 15.63
Thomas N. Steenburg........................... 11/22/2000 30 15.63
Dona Young.................................... 11/22/2000 42 15.63
David Searfoss................................ 11/22/2000 105 15.63
Carl Chadburn................................. 11/22/2000 1 15.63
</TABLE>
------------------------------------------
CURRENT MANAGEMENT OF PXP
------------------------------------------
Neither PXP nor any of its current executive officers or directors have,
during the last five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors), nor have they been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction and, as a result of this proceeding, was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, United States federal or state securities
laws or finding any violation with respect to these laws.
The following sets forth (1) the names and business address of our current
directors and executive officers, (2) information regarding their current
positions with PXP and their period of service in such positions, and (3)
43
<PAGE>
their business experience for the past five years. All of the individuals
listed below are citizens of the United States, except for Mr. Verdonck who is
a citizen of Belgium and Mr. Williams who is a citizen of Canada.
<TABLE>
<CAPTION>
Name Business Address Position
---- ---------------- --------
<S> <C> <C>
Philip R. McLoughlin.... Phoenix Investment Partners, Ltd. Chairman of the Board and
56 Prospect Avenue Chief Executive Officer
Hartford, CT 06115
Michael E. Haylon....... Phoenix Investment Partners, Ltd. Executive Vice President and
56 Prospect Avenue Director
Hartford, CT 06115
Robert W. Fiondella..... Phoenix Home Life Director
One American Row
Hartford, CT 06115
Marilyn E. LaMarche..... Lazard Freres & Co. LLC Director
30 Rockefeller Plaza
59th Floor
New York, NY 10020
James M. Oates.......... IBEX Capital Markets Director
60 State St., Suite 950
Boston, MA 02109
Ferdinand L.J. Verdonck. Almanij N.V. Director
Havenlaan 2
Brussels, Belguim
B-1080
John T. Anderson........ 2313 Cassia Court Director
Naples, FL 31409
Glen D. Churchill....... 33 Tamarisk Circle Director
Abilene, TX 79606
Donna F. Tuttle......... Korn Tuttle Capital Group Director
12733 Parkyns Street
Los Angeles, CA 90049
David A. Williams....... Roxborough Holdings, Ltd. Director
One First Canadian Place
Suite 6250
Toronto, Ontario M5X 1C7 Canada
John F. Sharry.......... Phoenix Investment Partners, Ltd. President, Private Client
56 Prospect Avenue Group
Hartford, CT 06115
William R. Moyer........ Phoenix Investment Partners, Ltd. Executive Vice President and
56 Prospect Avenue Chief Financial Officer
Hartford, CT 06115
Michael A. Kearney...... Phoenix Investment Partners, Ltd. Senior Vice President
56 Prospect Avenue
Hartford, CT 06115
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
Name Business Address Position
---- ---------------- --------
<S> <C> <C>
Thomas N. Steenburg..... Duff & Phelps Investment Management Co. Senior Vice President
55 E. Monroe St.
Suite 3600
Chicago, IL 60603
Elizabeth R. Rudden..... Phoenix Investment Partners, Ltd. Vice President
56 Prospect Avenue
Hartford, CT 06115
Nancy J. Engberg........ Phoenix Investment Partners, Ltd. Secretary, Vice President and
56 Prospect Avenue Counsel
Hartford, CT 06115
</TABLE>
Mr. McLoughlin has been Chairman of the Board of PXP since May 1997 and
Chief Executive Officer of PXP since November 1, 1995. Mr. McLoughlin has also
been a Director of Phoenix since February 1994 and has been employed by
Phoenix as Executive Vice President--Investments since December 1988. In
addition, Mr. McLoughlin serves as an officer and/or a director of various PXP
subsidiaries.
Mr. Haylon has been an Executive Vice President and a Director of PXP since
November 1, 1995, and serves as President of Phoenix Investment Counsel, Inc.
In addition, Mr. Haylon serves as an officer and/or a director of various
other PXP subsidiaries.
Mr. Fiondella has been Chairman of the Board and Chief Executive Officer of
Phoenix since February 1994. Mr. Fiondella served as President of Phoenix from
1989 to February 2000.
Ms. LaMarche has been a Director of Phoenix 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.
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 Mutual Funds. In
addition, Mr. Oates is a Director of AIB Govett, Inc., Investor Financial
Services Corporation, Investors Bank & Trust Co., 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.
Mr. Verdonck has been Managing Director of Almanij N.V., the holding
company of the Almanij Group, since 1992. He also serves as a Director of
Almanij N.V., KBC Bank & Insurance Holding Company N.V., KBC Bank N.V., KBC
Insurance N.V., Brussels, Belgium, Kredietbank S.A. Luxembourgeoise, 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 also serves as Director of The Fleming Continental European Investment
Trust plc. He was a Senior Vice President of Lazard Freres & Co., L.L.C. in
New York from 1977 to 1984, having previously served as an International
Banking Officer of Continental Illinois Bank in Chicago.
Mr. Anderson is 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.
Mr. Churchill is 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.
45
<PAGE>
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.
Mr. Williams is President of Roxborough Holdings Ltd. Mr. Williams was
President and Chief Executive Officer of Beutel, Goodman & Company Ltd., or
BG, a Toronto, Canada investment counseling firm, from 1991 to December 1994.
From 1971 to 1991, he served as Vice President of BG. Mr. Williams joined BG
in 1969. PXP owned 49% of the outstanding voting capital stock of BG until
December 3, 1998. Mr. Williams is also a member of the Boards of Directors of
Enhanced Marketing Services, Equisure Financial Network, FRI Corporation,
Krystal Bond Corporation, PICO Holdings, Inc., Pinetree Capital Corporation,
Octagon Industries Ltd., Radiant Energy Corporation, Drug Royalty Corporation,
Oxylene Limited, Canenerco Ltd., Carbite Golf, David S. Reid Ltd., Metro One
Telecommunications, Inc. and First International Asset Management.
Mr. Sharry has been President of the Private Client Group of PXP since
January 1, 1999. From January 1, 1998 to December 31, 1998, Mr. Sharry was
Executive Vice President of PXP. From November 1995 to December 31, 1997, Mr.
Sharry was Senior Vice President of the Retail Line of Business. In addition,
Mr. Sharry serves as an officer various PXP subsidiaries.
Mr. Moyer has been Executive Vice President and Chief Financial Officer of
PXP since August 1, 1999. Prior to that date, Mr. Moyer was Senior Vice
President and Chief Financial Officer of PXP since November 1, 1995. In
addition, Mr. Moyer serves as an officer and/or a director of various PXP
subsidiaries.
Mr. Kearney joined PXP on October 4, 1999 as Senior Vice President,
Information Technology. From June 1995 to October 3, 1999, Mr. Kearney was
Vice President, Information Systems of Phoenix.
Mr. Steenburg has been Senior Vice President of PXP since January 1, 1999.
From November 1, 1995 to December 31, 1998, Mr. Steenburg was Vice President
and Counsel of PXP. In addition, Mr. Steenburg is Chairman and Chief Executive
Officer of Duff & Phelps Investment Management Co. In addition, Mr. Steenburg
serves as an officer and/or a director of various PXP subsidiaries.
Ms. Rudden currently holds the position of Vice President, Human Resources.
From May 22, 1995 to December 31, 1995, she was Vice President, Mutual Fund
Customer Service with Phoenix Equity Planning Corporation, or PEPCO.
Ms. Engberg joined PXP on April 15, 1999 as Vice President and Counsel.
From June 1997 to April 14, 1999, Ms. Engberg served as Second Vice President
and Corporate Counsel for Phoenix, and as counsel for Phoenix since December
1994.
46
<PAGE>
------------------------------------------
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
------------------------------------------
The following table provides information as of the record date concerning
the beneficial ownership of our common stock by: (1) each director and
executive officer of PXP; (2) all executive officers and directors as a group,
and (3) persons known to PXP to be the beneficial owners of more than 5% of our
outstanding common stock as of the record date.
<TABLE>
<CAPTION>
Amount and
Nature of Percent of
Beneficial Common
Name of Beneficial Owner (and Address of 5% Holders) Ownership(1)(4) Stock(1)
---------------------------------------------------- --------------- ----------
<S> <C> <C>
Phoenix Home Life Mutual Insurance Company.......... 30,754,000(2) 61.19%
One American Row
Hartford, Connecticut 06102
Wanger Asset Management, L.P........................ 3,857,000(3) 8.40%
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
Philip R. McLoughlin................................ 394,850 *
Michael E. Haylon................................... 230,317 *
John F. Sharry...................................... 165,518 *
William R. Moyer.................................... 184,749 *
Michael A. Kearney.................................. 3,798 *
Thomas N. Steenburg................................. 92,167 *
Elizabeth R. Rudden................................. 47,841 *
Nancy J. Engberg.................................... 10,967 *
Robert W. Fiondella................................. 138,230 *
Marilyn E. LaMarche................................. 85,431 *
James M. Oates...................................... 125,922 *
Ferdinand L.J. Verdonck............................. 95,922 *
John T. Anderson.................................... 53,961 *
Glen D. Churchill................................... 87,772 *
Donna F. Tuttle..................................... 105,339 *
David A. Williams................................... 97,463 *
All directors and executive officers as a group (16
persons)........................................... 1,920,247 4.01%
</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 owned by such person,
but are not deemed outstanding for the purpose of calculating the
percentage owned by each other person listed.
47
<PAGE>
(2) Based upon the number of shares of common stock and the principal amount
of PXP's 6% Convertible Subordinated Debentures due November 1, 2015
reported in the most recent Schedule 13D filed by Phoenix with the SEC.
Includes 26,400,000 shares of common stock beneficially owned by Phoenix
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. Each $25 principal amount of convertible 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., or Wanger, with the SEC. These securities have
been acquired on behalf of discretionary clients of Wanger. Includes
3,857,000 shares as to which Wanger has shared voting power and shared
dispositive power.
(4) Includes shares of common stock which could be acquired through the
exercise of options and the conversion of Debentures as follows: Mr.
McLoughlin, 301,667 shares; Mr. Haylon, 160,000 shares; Mr. Sharry,
103,334 shares; Mr. Moyer, 136,667 shares; Mr. Fiondella, 102,230 shares;
Ms. LaMarche, 85,431 shares; Mr. Oates, 95,922 shares; Mr. Verdonck,
95,922 shares; Mr. Anderson, 52,961 shares; Mr. Churchill, 85,806 shares;
Ms. Tuttle, 97,183 shares; Mr. Williams, 97,463 shares; Mr. Steenburg,
65,867 shares; Ms. Rudden, 37,533 shares; Ms. Engberg, 5,000 shares; Mr.
Kearney, 3,333 shares; all directors and executive officers as a group,
1,532,319 shares. Also includes shares of restricted common stock as
follows: Mr. McLoughlin, 52,742 shares; Mr. Haylon, 43,181 shares; Mr.
Sharry, 31,397 shares; Mr. Moyer, 21,244 shares; Mr. Steenburg, 12,586
shares; Ms. Rudden, 5,245 shares; Ms. Engberg, 5,246 shares; all directors
and executive officers as a group, 171,641 shares. Each $25 principal
amount of Debentures is convertible at any time into 3.11 shares of common
stock.
48
<PAGE>
------------------------------------------
PHOENIX
------------------------------------------
Phoenix is a New York domiciled mutual life insurance company and is
principally engaged in the sale of life insurance. On April 20, 2000, Phoenix
announced that its board of directors had authorized the company to develop a
plan for conversion from a mutual to a publicly traded stock company.
Phoenix's principal business address is One American Row, Hartford,
Connecticut 06102. Neither Phoenix nor any of its current officers or
directors have, during the last five years, been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors), nor have
they been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction, and as a result of this proceeding, was or is
subject to a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, United States federal or
state securities laws or finding any violation with respect to these laws.
The following sets forth (1) the names and business address of each of
Phoenix's current directors and executive officers, (2) information regarding
their current positions with Phoenix and their period of service in such
positions, and (3) their business experience for the past five years. All of
the individuals listed below are citizens of the United States.
<TABLE>
<CAPTION>
Current Occupation/Business Offices and Positions Held During Past
Name Address 5 Years
---- --------------------------- --------------------------------------
Directors
---------
<S> <C> <C>
Salvatore H. Alfiero.... Chairman and CEO 1992-Present: Director, Phoenix Home
Mark IV Industries, Inc. until Life Mutual Insurance Company
September 14, 2000 1969-September 14, 2000: Various
501 John James Audubon Parkway positions with Mark IV Industries
Amherst, NY 14228
J. Carter Bacot......... Director, Retired 1992-Present: Director, Phoenix Home
Chairman and CEO Life Mutual Insurance Company
The Bank of New York 1969-Present: Various positions with
48 Wall Street, 10th Floor The Bank of New York
New York, NY 10286
Arthur P. Byrne......... President, CEO & Chairman 1997-Present: Director, Phoenix Home
The Wiremold Company Life Mutual Insurance Company
60 Woodlawn Street 1986-Present: Group Executive,
West Hartford, CT 06110 The Wiremold Company
Richard N. Cooper....... Professor 1992-Present: Director, Phoenix Home
Center for International Affairs Life Mutual Insurance Company
Harvard University 1995-1997: National Intelligence Council,
1737 Cambridge Street, Room 403 Chairman
Cambridge, MA 02138 1981-Present: Professor, Harvard
University
Gordon J. Davis......... Partner 1994-Present: Director, Phoenix Home
LeBoeuf, Lamb, Greene & MacRae Life Mutual Insurance Company
125 West 55th Street 1994-Present: Partner, LeBoeuf, Lamb,
New York, NY 10019 Greene & MacRae
1983-1994: Partner, Lord Day & Lord,
Barrett, Smith
Robert W. Fiondella..... Chairman & CEO 1987-Present: Director, Phoenix Home
Phoenix Home Life Mutual Ins. Co. Life Mutual Insurance Company
One American Row 1969-Present: Various positions with
Hartford, CT 06102-5056 Phoenix and its various subsidiaries.
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
Current Occupation/Business Offices and Positions Held During Past
Name Address 5 Years
---- --------------------------- --------------------------------------
Directors
---------
<S> <C> <C>
John E. Haire........... President 1999-Present: Director, Phoenix Home
The Fortune Group Life Mutual Insurance Company
1271 Avenue of the Americas 1978-Present: President, The Fortune Group
New York, NY 10020
Jerry J. Jasinowski..... President 1996-Present: Director, Phoenix Home
National Association of Manufacturers Life Mutual Insurance Company
1331 Pennsylvania Avenue, N.W. 1981-Present: Various positions with
Washington, DC 20004 the National Association of Manufacturers
John W. Johnstone, Jr... Retired 1992-Present: Director, Phoenix Home
Life Mutual Insurance Company
1986-1996: Chairman and CEO, Olin
Corporation
Marilyn E. LaMarche..... Limited Managing Director 1992-Present: Director, Phoenix Home
Lazard Freres & Co. L.L.C. Life Mutual Insurance Company
30 Rockefeller Plaza 1983-Present: Various positions with
New York, NY 10020 Lazard Freres & Co. L.L.C.
Philip R. McLoughlin.... Executive Vice President 1994-Present: Director, Phoenix Home
Phoenix Home Life Mutual Ins. Co. Life Mutual Insurance Company
56 Prospect Street, 1st Floor 1983-Present: Various positions with
Hartford, CT 06115 Phoenix and its various subsidiaries.
Robert F. Vizza......... President & CEO 1992-Present: Director, Phoenix Home
The DeMatteis Center of Life Mutual Insurance Company
St. Francis Hospital 1985-Present: Various positions with
Northern Boulevard St. Francis Hospital
Old Brookville, NY 11545
Robert G. Wilson........ Retired 1992-Present: Director, Phoenix Home
Life Mutual Insurance Company
Dona D. Young........... President 1998-Present: Director, Phoenix Home
Phoenix Home Life Mutual Ins. Co. Life Mutual Insurance Company
One American Row 1980-Present: Various positions with
Hartford, CT 06102-5056 Phoenix and its various subsidiaries.
------------------------------------------
<CAPTION>
Executive Officers
------------------
<S> <C> <C>
Carl T. Chadburn........ Executive Vice President 1972-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
One American Row
Hartford, CT 06102-5056
Robert W. Fiondella..... Chairman & CEO 1987-Present: Director, Phoenix Home
Phoenix Home Life Mutual Ins. Co. Life Mutual Insurance Company
One American Row 1969-Present: Various positions with
Hartford, CT 06102-5056 Phoenix and its various subsidiaries.
Philip R. McLoughlin.... Executive Vice President 1994-Present: Director, Phoenix Home
Phoenix Home Life Mutual Ins. Co. Life Mutual Insurance Company
56 Prospect Street, 1st Floor 1983-Present: Various positions with
Hartford, CT 06102-5056 Phoenix and its various subsidiaries.
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
Offices and Positions Held During
Current Occupation/Business Past
Name Address 5 Years
---- --------------------------- ---------------------------------
Executive Officers
------------------
<S> <C> <C>
David W. Searfoss....... Executive Vice President 1987-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
One American Row
Hartford, CT 06102-5056
Simon Y. Tan............ Executive Vice President 1982-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
One American Row
Hartford, CT 06102-5056
Dona D. Young........... President 1980-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
One American Row
Hartford, CT 06102-5056
</TABLE>
------------------------------------------
<TABLE>
<CAPTION>
Senior Officers
---------------
<S> <C> <C>
Michael J. Gilotti...... Senior Vice President 1999-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
One American Row
Hartford, CT 06115
Edward P. Hourihan...... Senior Vice President 1972-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
One American Row
Hartford, CT 06102-5056
Joseph E. Kelleher...... Senior Vice President 1992-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
One American Row
Hartford, CT 06102-5056
Robert G. Lautensack.... Senior Vice President 1992-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
One American Row
Hartford, CT 06102-5056
Maura L. Melley......... Senior Vice President 1993-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
One American Row
Hartford, CT 06102-5056
Charles L. Olson........ Senior Vice President 1997-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
38 Prospect Street 1990-1997: Various positions with
Hartford, CT 06115-0479 Phoenix Duff & Phelps.
Richard R. Paton........ Senior Vice President 2000-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
One American Row 1996-1999: Chief Risk Management
Hartford, CT 06102-5056 Officer, MPTN Foxwoods Casino Resort.
1994-1996: Director, Corporate Risk
Management, Berkshire Health Systems.
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
Offices and Positions Held During
Current Occupation/Business Past
Name Address 5 Years
---- --------------------------- ---------------------------------
Senior Officers
---------------
<S> <C> <C>
Robert E. Primmer....... Senior Vice President 1982-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
One American Row
Hartford, CT 06102-5056
Tracy L. Rich........... Senior Vice President 01/00-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
One American Row 03/96-01/00: Various positions with
Hartford, CT 06102-5056 Massachusetts Mutual Life.
08/82-03/96: Various positions with
Connecticut Mutual Life
John F. Solan, Jr....... Senior Vice President 1998-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
One American Row 1964-1998: Various positions with
Hartford, CT 06102-5056 Ernst & Young.
Walter H. Zultowski..... Senior Vice President 1998-Present: Various positions with
Phoenix Home Life Mutual Ins. Co. Phoenix and its various subsidiaries.
One American Row 1978-1997: Senior Vice President,
Hartford, CT 06102-5056 LIMRA International
</TABLE>
52
<PAGE>
------------------------------------------
RELATED PARTY TRANSACTIONS
------------------------------------------
Phoenix and PXP maintain relationships that are described below. The merger
will result in PXP being wholly owned by Phoenix. PXP does not anticipate that
these relationships will be materially affected as a result of the merger.
When reading the description of these relationships, please refer to the
following chart which we have provided to clarify the relationships among the
parties referred to below.
License Agreement. PXP and Phoenix are parties to a license agreement dated
November 1, 1995 pursuant to which Phoenix granted PXP an exclusive license,
subject to a limited exception, to use the name "Phoenix" and the related
design in the United States and all other jurisdictions where Phoenix has
rights to such trademarks in connection with the provision of specified
investment advisory services. Phoenix also granted PXP the right to sublicense
the trademarks for use as the name or as a component of the name of any mutual
fund of which PXP is the investment adviser. The exclusive license will remain
in force as long as Phoenix and subsidiaries of Phoenix collectively own at
least a majority of the voting power of PXP and for a period of five years
thereafter. The license agreement prohibits Phoenix and its subsidiaries from
competing with PXP by conducting the licensed services during the term. The
license agreement does not, however, preclude Phoenix and its subsidiaries
from conducting business in, and rendering investment advisory services in
connection with, any other activities (other than the licensed services)
currently engaged in by Phoenix and its subsidiaries. In the event Phoenix or
any of its subsidiaries acquires a company conducting the business of the
licensed services, Phoenix, 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.
Management of Phoenix General Account. Phoenix Investment Counsel, Inc., or
PIC, manages all of the investment assets of Phoenix's General Account,
excluding investments in real estate and mortgages, under an agreement with
Phoenix effective January 1, 1995. The agreement provides that either party
thereto may terminate the agreement by giving 30 days' prior written notice of
termination. As of December 31, 1998 and
53
<PAGE>
1999, Phoenix's General Account assets under management by PIC totaled $8.8
billion and $9.1 billion, respectively. Fees paid to PIC by Phoenix for the
management of its General Account assets totaled $9.5 million in 1998 and
$10.5 million in 1999. PXP believes that the fees paid to PIC by Phoenix under
this agreement are comparable to those charged by independent, unaffiliated
investment managers to provide similar services to a comparable account.
Management of Phoenix Variable Contract Assets. PIC manages the mutual fund
subaccounts of Phoenix-sponsored variable contracts, under an agreement with
Phoenix effective January 1, 1993. Phoenix provides administration services to
PIC with respect to the variable contract assets under an agreement dated
January 3, 1995. As of December 31, 1998 and 1999, Phoenix-sponsored variable
contract assets under management by PIC totaled $3.2 billion and $3.9 billion,
respectively. Net fees earned by PIC under these agreements totaled $6.3
million in 1998 and $7.3 million in 1999. PXP believes that the fees paid to
PIC are comparable to those charged by independent, unaffiliated investment
managers to provide similar services to a comparable account.
Service Agreements. Phoenix provides various support services to PXP
pursuant to an administrative agreement dated as of October 1, 1995.
Currently, these services are legal, human resources, payroll processing,
purchasing, facility management, communications and creative services and
other miscellaneous services. Phoenix also provides various computer hardware,
software and support services to PXP under a computer services agreement dated
as of October 1, 1995. 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 charged
PXP and its subsidiaries $4.9 million and $6.0 million for these services
(exclusive of rent and direct costs of employee benefits) in 1999 and 1998,
respectively. All such services are provided at rates established from time to
time by negotiation between Phoenix and PXP. PXP believes the rates charged by
Phoenix under these agreements are no less favorable to PXP than those
available through unaffiliated third parties. Changes in such rates are
subject to the approval of those disinterested directors of PXP who are
neither employees nor directors of Phoenix or its other subsidiaries.
Office Leases. Phoenix also leases office space to PXP in Hartford,
Connecticut, and has leased office space to PXP in Enfield, Connecticut, and
Greenfield, Massachusetts. Phoenix charged PXP and its subsidiaries $3.2
million for office space rentals in each of 1998 and 1999. PXP believes that
the rental rates under these leases are generally at current market rates.
Retail Distribution. WS Griffith & Co., Inc., or Griffith, a registered
broker-dealer subsidiary of Phoenix, is one of the largest retail distributors
of PXP's investment products, distributing shares of the Phoenix Mutual Funds
managed by PXP's subsidiaries. In addition, Griffith is the largest
distributor of Phoenix sponsored variable contracts whose mutual fund
subaccounts are invested in the Phoenix Edge Series Fund, which is managed by
PXP's subsidiaries. Griffith's retail sales force consists of approximately
1,080 registered representatives, most of whom are also members of Phoenix's
insurance agent and broker field force. Mutual fund sales by Griffith
accounted for approximately 5% and 4% of PXP's total mutual fund sales other
than with respect to money market funds in 1998 and 1999, respectively. Sales
of variable products by Griffith accounted for 78% and 88% of total variable
product sales in 1998 and 1999, respectively.
Griffith distributes Phoenix investment products under a sales agreement
with Phoenix Equity Planning Corporation, or PEPCO, pursuant to which Griffith
receives commissions for shares of mutual funds sold by it ranging from 2.0%
to 5.75% of the per share offering price. Griffith also receives commissions
under the sales agreement for variable products offered by Phoenix 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 and $25.8 million in 1999.
Participation in Phoenix's Employee Benefit Plans. Employees of PIC, PEPCO
and Duff & Phelps Investment Management Co., or DPIM, and certain employees of
PXP participate in various retirement, supplemental insurance and health care
and welfare benefit plans sponsored by Phoenix. Phoenix charges PXP
54
<PAGE>
the cost of employees' participation in the plans. Fees paid to Phoenix
relating to participation of employees of PIC, PEPCO and DPIM and certain
employees of PXP in plans sponsored by Phoenix were $3.9 million in 1998 and
$4.1 million in 1999.
Registration Rights Agreement. PXP and PM Holdings entered into a
registration rights agreement on November 1, 1995 pursuant to which PXP has
granted PM Holdings and its transferees various rights, including piggyback
rights, requiring PXP to register under the Securities Act of 1933 all or any
part of the shares of common stock issued to PM Holdings. Pursuant to the
registration rights agreement, PXP will be required to pay all expenses in
connection with any registration, except underwriting discounts and selling
commissions.
------------------------------------------
INDEPENDENT ACCOUNTANTS
------------------------------------------
Our consolidated balance sheets, and related consolidated statements of
operations, changes in stockholders' equity and cash flows, have been audited
by PricewaterhouseCoopers, LLP, independent auditors, as stated in their
reports, which are incorporated by reference in this proxy statement. A
representative of PricewaterhouseCoopers, LLP will be at the special meeting
to answer questions from stockholders and will have the opportunity to make a
statement.
------------------------------------------
WHERE YOU CAN FIND MORE INFORMATION
------------------------------------------
We file annual, quarterly and current reports, proxy statements, and other
documents with the Securities and Exchange Commission under the Securities
Exchange Act of 1934. The Exchange Act file number for our SEC filings is 1-
10994. Our SEC filings made electronically through the SEC's EDGAR system are
available to the public at the SEC's website at http://www.sec.gov. You may
also read and copy any document we file with the SEC at the following SEC
public reference rooms:
Judiciary Plaza Citicorp Center 7 World Trade Center
450 Fifth Street, N.W. 500 West Madison Street Suite 1300
Washington, D.C. 20549 Chicago, Illinois 60621 New York, New York
10048
You may obtain information regarding the operation of the SEC's public
reference rooms by calling the SEC at 1-800-SEC-0330.
No provisions have been made in connection with the merger to grant the
public stockholders access to the corporate files of PXP or Phoenix or to
obtain counsel or appraisal services at the expense of PXP or Phoenix.
PXP and Phoenix have filed with the SEC a Rule 13e-3 Transaction Statement
on Schedule 13E-3 with respect to the merger. As permitted by the SEC, this
proxy statement omits information contained in the Schedule 13E-3. The
Schedule 13E-3, including any amendments and exhibits filed or incorporated by
reference as a part thereof, is available for inspection or copying as set
forth above.
------------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE
------------------------------------------
The SEC permits us to "incorporate by reference" certain documents, which
means that we can disclose important information to you by referring you to
those documents. The information in the documents incorporated by reference is
considered to be part of this proxy statement, except to the extent that this
proxy statement updates or supersedes the information. We incorporate by
reference the documents listed below that we have previously filed with the
SEC (SEC file no. 1-10994);
55
<PAGE>
. Our Annual Report on Form 10-K for the fiscal year ended December 31,
1999;
. Our Quarterly Reports on Form 10-Q for the quarters ended March 31, June
30, and September 30, 2000; and
. Our Current Reports on Form 8-K dated May 17, 1999, August 8 and
September 13, 2000.
We also incorporate by reference the information contained in all other
documents we file with the SEC under Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act after the date of this proxy statement and before the date of
the special meeting. The information will be considered part of this proxy
statement from the date the document is filed and will supplement or amend the
information contained in this proxy statement.
We will provide you upon your request, at no charge, a copy of the
documents we incorporate by reference in this proxy statement. To obtain
timely delivery, requests for copies should be made no later than January 2,
2001. To request a copy of any or all of these documents, you should write us
at:
Phoenix Investment Partners, Ltd.
56 Prospect Street
Hartford, Connecticut 06115
Attention: Investor Relations
These documents are also included in our SEC filings that are made
electronically through the SEC's EDGAR system and are available to the public
at the SEC's website at http://www.sec.gov.
You should rely only on the information contained in this proxy statement
or to which we have referred you to vote your shares at the special meeting.
We have not authorized anyone to provide you with information that is
different.
BY ORDER OF THE BOARD OF DIRECTORS
Nancy J. Engberg
Secretary
December 11, 2000.
56
<PAGE>
Execution Copy
APPENDIX A
AGREEMENT AND PLAN OF MERGER
among
PM HOLDINGS, INC.
and
PHOENIX INVESTMENT PARTNERS, LTD.
and
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
Dated as of September 10, 2000
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<C> <S> <C>
ARTICLE I. The Merger.................................................... A-4
Section 1.1 Formation of Acquisition Co............................. A-4
Section 1.2 The Merger.............................................. A-4
Section 1.3 Effective Time.......................................... A-4
Section 1.4 Closing................................................. A-4
Certificate of Incorporation; By-laws; Officers and
Section 1.5 Directors............................................... A-4
Section 1.6 Effect on Common Stock.................................. A-5
Section 1.7 Dissenting Shares....................................... A-5
Section 1.8 Stock Options........................................... A-6
Section 1.9 Exchange of Certificates................................ A-6
Section 1.10 Proxy Statement and Schedule 13E-3...................... A-8
Section 1.11 Additional Agreement and Provisions..................... A-8
ARTICLE II. Representations and Warranties of PXP........................ A-8
Section 2.1 Organization of PXP and its Subsidiaries................ A-8
Section 2.2 Capitalization of PXP Ownership......................... A-9
Section 2.3 Subsidiaries of PXP..................................... A-9
Section 2.4 Authorization........................................... A-9
Section 2.5 Fairness Opinion and Approval by the Committee.......... A-10
Section 2.6 Brokers and Finders..................................... A-10
Section 2.7 Proxy Statement and other Disclosure Documents.......... A-11
Section 2.8 SEC Documents; Undisclosed Liabilities.................. A-11
Section 2.9 Absence of Certain Changes or Events.................... A-11
Section 2.10 No Undisclosed Material Liabilities..................... A-12
Section 2.11 Compliance with Laws and Court Orders................... A-12
ARTICLE III. Representations and Warranties of PMH....................... A-12
Section 3.1 Organization of PMH..................................... A-12
Section 3.2 Organization and Authority of Acquisition Co. .......... A-12
Section 3.3 Authorization........................................... A-12
Section 3.4 Brokers and Intermediaries.............................. A-13
Section 3.5 PXP Disclosure Document................................. A-13
Section 3.6 Financial Ability....................................... A-13
ARTICLE IV. Certain Covenants and Agreements............................. A-14
Section 4.1 Announcement............................................ A-14
Section 4.2 Notification of Certain Matters......................... A-14
Section 4.3 Directors' And Officers' Indemnification................ A-14
Section 4.4 Stockholder Meeting..................................... A-14
ARTICLE V. Conditions Precedent.......................................... A-14
Conditions to each Party's Obligation to Effect the
Section 5.1 Merger.................................................. A-14
Conditions to the Obligation of PXP to Effect the
Section 5.2 Merger.................................................. A-15
Section 5.3 Conditions to the Obligation of PMH to Cause Acquisition
Co. to Effect the Merger............................... A-15
ARTICLE VI. Termination, Amendment and Waiver............................ A-16
Section 6.1 Termination............................................. A-16
Section 6.2 Effect of Termination................................... A-16
Section 6.3 Amendment............................................... A-16
Section 6.4 Waiver.................................................. A-16
</TABLE>
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<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE VII. Miscellaneous................................................ A-16
Section 7.1 Definitions.............................................. A-16
Section 7.2 Performance Guarantee by PHL............................. A-18
Section 7.3 Non-survival of Representations and Warranties........... A-18
Section 7.4 Expenses................................................. A-18
Section 7.5 Applicable Law........................................... A-18
Section 7.6 Notices.................................................. A-18
Section 7.7 Entire Agreement......................................... A-20
Section 7.8 Assignment....................... ....................... A-20
Section 7.9 Headings References...................................... A-20
Section 7.10 Counterparts............................................. A-20
Section 7.11 No Third Party Beneficiaries............................. A-20
Section 7.12 Severability; Enforcement................................ A-20
</TABLE>
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AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of September 10,
2000, by and among PM Holdings, Inc., a Connecticut corporation ("PMH"),
Phoenix Investment Partners, Ltd., a Delaware corporation ("PXP"), and for the
purposes of Section 7.2 and Section 7.8 only, Phoenix Home Life Mutual
Insurance Company, a New York mutual life insurance company ("PHL").
RECITALS:
A. PMH currently owns approximately 57% of the outstanding common stock,
par value $.01 per share, of PXP (the "PXP Common Stock").
B. PMH desires to acquire all of the shares of PXP Common Stock not owned
by it, and to provide for the payment of $15.75 per share in cash for all such
shares, by means of a merger of a newly-formed, wholly-owned subsidiary of PMH
("Acquisition Co.") with and into PXP in accordance with Section 251 of the
Delaware General Corporation Law (the "DGCL"), upon the terms and subject to
the conditions of this Agreement (the "Merger").
C. The Board of Directors of PXP, upon the recommendation of a Committee of
independent directors (the "Committee"), has unanimously approved this
Agreement and the Merger and deems the Merger advisable and in the best
interests of the stockholders of PXP.
D. All capitalized terms used in this Agreement have the meaning specified
in Section 7.1.
ARTICLE I.
The Merger
Section 1.1 Formation of Acquisition Co. Prior to consummation of the
Merger, PMH will incorporate and organize Acquisition Co. as a Delaware
corporation and contribute to Acquisition Co., in exchange for all of the
issued and outstanding shares of common stock of Acquisition Co., par value
$.01 per share (the "Acquisition Co. Common Stock"), all shares of PXP Common
Stock owned by PMH, which shares will constitute at least a majority of the
issued and outstanding shares of PXP Common Stock.
Section 1.2 The Merger. At the Effective Time, upon the terms and subject
to the conditions set forth in this Agreement and in accordance with the DGCL,
Acquisition Co. will be merged with and into PXP, the separate existence of
Acquisition Co. will cease, and PXP will continue as the surviving corporation
(the "Surviving Corporation"). The Merger will have the effects as provided by
the DGCL and other applicable law.
Section 1.3 Effective Time. As soon as practicable following the
satisfaction or waiver of the conditions set forth in Article V, Acquisition
Co. and PXP will file with the Secretary of State of the State of Delaware a
certificate of merger (the "Certificate of Merger") executed in accordance
with the relevant provisions of the DGCL. The Merger will become effective at
such time as the Certificate of Merger is duly filed with the Secretary of
State of the State of Delaware, or at such other time as is permissible in
accordance with the DGCL and as PMH and PXP may agree and as specified in the
Certificate of Merger (the time the Merger becomes effective, the "Effective
Time").
Section 1.4 Closing. The closing of the Merger (the "Closing") will take
place at the offices of Debevoise & Plimpton, 875 Third Avenue, New York, New
York 10022 at 10:00 a.m. (New York time) on the date of the satisfaction of
the conditions provided in Article V, or at such other time (the "Closing
Date") and place as PMH and PXP may agree.
Section 1.5 Certificate of Incorporation; By-laws; Officers and
Directors. Pursuant to the Merger:
(a) the Certificate of Incorporation and By-laws of PXP as in effect
immediately prior to the Effective Time will be the Certificate of
Incorporation and By-laws of the Surviving Corporation following the
Merger, until thereafter changed or amended as provided in such Certificate
of Incorporation or By-laws and in accordance with applicable law;
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(b) the directors of Acquisition Co. will be the directors of the
Surviving Corporation following the Merger until the earlier of (i) their
death, resignation or removal or (ii) such time as their respective
successors are duly elected or appointed and-qualified; and
(c) the officers of PXP immediately prior to the Effective Time will be
the officers of the Surviving Corporation until the earlier of (i) their
death, resignation or removal or (ii) such time as their respective
successors are duly elected or appointed and qualified.
Section 1.6 Effect on Common Stock. As of the Effective Time, by virtue of
the Merger and without any action on the part of Acquisition Co., PXP or the
holders of any shares of PXP Common Stock:
(a) Common Stock of Acquisition Co. Each share of the Acquisition Co.
Common Stock that is issued and outstanding immediately prior to the
Effective Time will be converted into and become one share of the common
stock, par value $.01 per share, of the Surviving Corporation (the
"Surviving Corporation Common Stock").
(b) Common Stock of PXP. Subject to Section 1.6(c), Section 1.6(d), and
Section 1.7:
(i) each share of PXP Common Stock that is issued and outstanding
immediately prior to the Effective Time (including all issued and
outstanding shares of PXP Common Stock subject to restrictions under
any PXP incentive compensation plans) will be converted into and become
the right to receive $15.75 in cash (the "Merger Consideration"), and,
when so converted, will automatically be canceled and retired and will
cease to exist; and
(ii) each holder of a certificate representing any such shares of
PXP Common Stock will cease to have any rights with respect to such
shares to the extent such certificate represents such shares, except
for the right to receive the Merger Consideration allocable to the
shares formerly represented by such certificate upon surrender of such
certificate in accordance with Section 1.9.
(c) Cancellation of Treasury Stock. Each share of PXP Common Stock that
is owned immediately prior to the Effective Time by PXP or any Subsidiary
of PXP that constitutes treasury stock in the hands of its holder, will be
canceled and retired and will cease to exist, no consideration will be
delivered in exchange for such share, and each holder of a certificate
representing any such shares will cease to have any rights with respect to
such shares.
(d) PXP Common Stock Held by Acquisition Co. Each share of PXP Common
Stock that is owned immediately prior to the Effective Time by Acquisition
Co. will be canceled and retired and will cease to exist, no consideration
will be delivered in exchange for such share, and Acquisition Co. will
cease to have any rights with respect to any certificates representing any
such shares.
Section 1.7 Dissenting Shares
(a) Notwithstanding anything in this Agreement to the contrary, shares of
PXP Common Stock outstanding immediately prior to the Effective Time and held
by a holder who has demanded and perfected such holder's right to appraisal of
such shares in accordance with Section 262 of the DGCL (the "Dissenting
Shares") will not be converted into the right to receive the Merger
Consideration, but their holder will instead be entitled to such rights as are
afforded under the DGCL with respect to Dissenting Shares, unless such holder
fails to perfect or withdraws or otherwise loses its right to appraisal.
(b) If any holder of shares of PXP Common Stock who demands appraisal of
its shares pursuant to the DGCL fails to perfect or withdraws or otherwise
loses such holder's right to appraisal, at the later of the Effective Time or
upon the occurrence of such event, such holder's Dissenting Shares will be
converted into and will represent the right to receive the Merger
Consideration, without interest, in accordance with Section 1.6(b).
A-5
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(c) PXP will give PMH:
(i) prompt notice of any written demand for appraisal or payment of the
fair value of any shares of PXP Common Stock, withdrawals of such demands,
and any other instruments served pursuant to the DGCL received by PXP; and
(ii) the opportunity to direct all negotiations and proceedings with
respect to demands for appraisal under the DGCL.
(d) PXP will not voluntarily make any payment with respect to any demand
for appraisal and will not settle or offer to settle any such demands, except
with the prior written consent of PMH.
Section 1.8 Stock Options. Immediately prior to the Effective Time, each
outstanding option to purchase shares of PXP Common Stock granted under any
PXP stock option or compensation plan or arrangement outstanding immediately
prior to the Effective Time ("PXP Stock Option"), whether or not vested or
exercisable:
(i) will become fully vested and exercisable; and
(ii) will be converted into and become the right to receive from the
Surviving Corporation, promptly following the Effective Time, an amount in
cash equal to the amount by which the Merger Consideration exceeds the
exercise price of the PXP Stock Option, and when so converted, will
automatically be cancelled and retired and will cease to exist.
Section 1.9 Exchange of Certificates.
(a) Exchange Agent. Prior to the Effective Time, PXP will appoint a bank or
trust company to act as exchange agent (the "Exchange Agent") for the payment
of the Merger Consideration. As of the Effective Time, PMH will have
deposited, or caused to be deposited, with the Exchange Agent, for the benefit
of the holders of shares of PXP Common Stock, the aggregate amount of cash
payable under Section 1.6(b) in exchange for outstanding shares of PXP Common
Stock in accordance with this Section 1.9 (the "Exchange Fund").
(b) Exchange Procedures.
(i) Promptly after the Effective Time, the Exchange Agent will mail to
each holder of record of a certificate or certificates, which represented
outstanding shares of PXP Common Stock immediately prior to the Effective
Time, whose shares were converted into the right to receive cash pursuant
to Section 1.6(b):
(1) a letter of transmittal (the "Letter of Transmittal") specifying
that delivery will be effected, and risk of loss and title to the
certificates representing such shares of PXP Common Stock will pass,
only upon delivery of the certificates representing such shares of PXP
Common Stock to the Exchange Agent, which certificates must be in such
form and have such other provisions as the Exchange Agent may
reasonably specify; and
(2) instructions for use in effecting the surrender of the
certificates representing such shares of PXP Common Stock, in exchange
for the Merger Consideration.
(ii) Upon surrender to, and acceptance by, the Exchange Agent of a
certificate or certificates formerly representing shares of PXP Common
Stock, the holder will be entitled to the amount of cash into which the
number of shares of PXP Common Stock formerly represented by such
certificate or certificates surrendered have been converted under this
Agreement.
(iii) The Exchange Agent will accept certificates formerly representing
shares of PXP Common Stock upon compliance with such reasonable terms and
conditions as the Exchange Agent may impose to effect an orderly exchange
of the certificates in accordance with normal exchange practices.
(iv) After the Effective Time, no further transfers may be made on the
records of PXP or its transfer agent of certificates representing shares of
PXP Common Stock and if such certificates are presented to PXP for
transfer, they will be canceled against delivery of the Merger
Consideration allocable to the shares of PXP Common Stock represented by
such certificate or certificates.
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(v) If any Merger Consideration is to be remitted to a name other than
that in which the certificate for the PXP Common Stock surrendered for
exchange is registered, no Merger Consideration may be paid in exchange for
such certificate unless:
(1) the certificate so surrendered is properly endorsed, with
signature guaranteed, or otherwise in proper form for transfer; and
(2) the person requesting such exchange pays to PXP, or its transfer
agent, any transfer or other taxes required by reason of the payment of
the Merger Consideration to a name other than that of the registered
holder of the certificate surrendered, or establishes to the
satisfaction of PXP or its transfer agent that such tax has been paid
or is not applicable.
(vi) Until surrendered as contemplated by this Section 1.9 and at any
time after the Effective Time, each certificate for shares of PXP Common
Stock will be deemed to represent only the right to receive upon such
surrender the Merger Consideration allocable to the shares represented by
such certificate as contemplated by Section 1.6(b). No interest will be
paid or will accrue on any amount payable as Merger Consideration.
(c) No Further Ownership Rights in PXP Stock. The Merger Consideration paid
upon the surrender for exchange of certificates formerly representing shares
of PXP Common Stock in accordance with this Section 1.9 will be deemed to have
been paid in full satisfaction of all rights pertaining to the shares of PXP
Common Stock formerly represented by such certificates.
(d) Termination of Exchange Fund. The Exchange Agent will deliver to the
Surviving Corporation any portion of the Exchange Fund (including any interest
and other income received by the Exchange Agent in respect of all such funds)
which remains undistributed to the holders of the certificates formerly
representing shares of PXP Common Stock upon expiry of the period of six (6)
months following the Effective Time. Any holders of shares of PXP Common Stock
prior to the Merger who have not complied with this Section 1.9 prior to such
time, may look only to the Surviving Corporation, and then only as general
creditors, for payment of their claim for Merger Consideration to which such
holders may be entitled.
(e) No Liability. No party to this Agreement will be liable to any Person
in respect of any amount from the Exchange Fund delivered to a public official
in accordance with any applicable abandoned property, escheat or similar law.
(f) Lost Certificates. If any certificate or certificates formerly
representing shares of PXP Common Stock is lost, stolen or destroyed, the
Exchange Agent will issue the Merger Consideration deliverable in respect of,
and in exchange for, such lost, stolen or destroyed certificate, as determined
in accordance with this Section 1.9, only upon:
(i) the making of an affidavit of such loss, theft or destruction by the
Person claiming such certificate or certificates to be lost, stolen or
destroyed; and
(ii) if required by the Surviving Corporation, the posting by such
Person of a bond in such amount as the Surviving Corporation may reasonably
require as indemnity against any claim that may be made against it with
respect to such certificate.
(g) Withholding Rights. The Surviving Corporation and the Exchange Agent
may deduct and withhold from the consideration otherwise payable under this
Agreement to any holder of shares of PXP Common Stock such amounts as the
Surviving Corporation or the Exchange Agent is required to deduct and withhold
under the United States Internal Revenue Code of 1986, as amended (the
"Code"), or any provision of state, local or foreign tax law with respect to
the making of such payment. Any amounts so withheld by the Surviving
Corporation or the Exchange Agent will be treated as having been paid to the
holder of the shares of PXP Common Stock in respect of which such deduction
and withholding was made for all purposes of this Agreement.
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Section 1.10 Proxy Statement and Schedule 13E-3.
(a) PXP will prepare, in consultation with PMH, the Proxy Statement on
Schedule 14A (the "Proxy Statement") to be distributed to holders of the PXP
Common Stock for the purpose of soliciting proxies for use at the annual or
special meeting of stockholders of PXP at which the adoption of, and the
approval of the transactions contemplated by, this Agreement are sought.
(b) Subject to the fiduciary duties of the PXP Board of Directors and the
Committee, PXP will recommend to its stockholders in the Proxy Statement the
approval of the Merger, this Agreement and the transactions contemplated by
this Agreement. PXP will file the Proxy Statement with the SEC as soon as is
reasonably practicable after the date of this Agreement and will use all
reasonable efforts to respond promptly to comments from the SEC and to cause
the Proxy Statement to be mailed to PXP's stockholders at the earliest
practicable time.
(c) PXP will not mail, amend or supplement the Proxy Statement unless the
Proxy Statement or any amendment or supplement of the Proxy Statement is
satisfactory in content to PMH in the exercise of its reasonable judgment.
(d) As soon as practicable after the date of this Agreement, PMH and PXP
will file with the SEC, and will use their reasonable best efforts to cause
any of their respective affiliates engaging in this transaction to file with
the SEC, a Rule 13e-3 Transaction Statement on Schedule 13E-3 (the "Schedule
13E-3 Transaction Statement") with respect to the Merger.
(e) Each of the Parties agrees to use its reasonable best efforts to
cooperate and to provide the other Party with such information as the other
Party may reasonably request in connection with the preparation of the Proxy
Statement and the Schedule 13E-3 Transaction Statement.
(f) Each Party agrees promptly to supplement, update and correct any
information provided by it for use in the Proxy Statement and the Schedule
13E-3 Transaction Statement if and to the extent that such information is or
becomes incomplete, false or misleading.
Section 1.11 Additional Agreement and Provisions. Upon the terms and
subject to the conditions of this Agreement:
(a) each Party agrees to use its reasonable best efforts to take, or
cause to be taken, all additional action and to do, or cause to be done,
all additional things necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the transactions
contemplated by this Agreement;
(b) each Party will cause its proper officers to take all further action
that is necessary or desirable to carry out the purposes of this Agreement
or to vest the Surviving Corporation with full title to all properties,
assets, rights, approvals, immunities and franchises of either PXP or
Acquisition Co. at any time after the Effective Time; and
(c) each Party agrees to use its reasonable best efforts to challenge
any action brought against any of the Parties seeking a temporary
restraining order or preliminary or permanent injunctive relief which would
prohibit, or materially interfere with, the consummation of the
transactions contemplated by this Agreement.
ARTICLE II.
Representations and Warranties of PXP
PXP hereby represents and warrants to PMH as follows:
Section 2.1 Organization of PXP and its Subsidiaries.
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(a) PXP and each of its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and has all the requisite corporate power and authority to carry
on its business as now being conducted and to own, lease, use and operate the
properties owned and used by it.
(b) PXP and each of its Subsidiaries is qualified and in good standing to
do business in each jurisdiction in which the nature of its business requires
it to be so qualified, except to the extent the failure to be so qualified has
not had, and would not reasonably be expected to have, a Material Adverse
Effect on PXP.
Section 2.2 Capitalization of PXP Ownership.
(a) The authorized capital stock of PXP consists of (i) 100,000,000 shares
of PXP Common Stock, of which 45,227,931 shares are issued and outstanding and
2,027,918 shares are held in treasury as of the date of this Agreement and
(ii) 10,000,000 shares of preferred stock, none of which are outstanding. All
of the issued and outstanding shares of capital stock of PXP are duly
authorized, validly issued, fully paid and non-assessable and free of
preemptive rights.
(b) Except for outstanding PXP Stock Options to purchase an aggregate of no
more than 7,418,317 shares of PXP Common Stock and the 6% Convertible
Subordinated Debentures due 2015 of PXP and options therefor which are
convertible into 9,517,774 shares of PXP Common Stock (the "PXP Debentures"),
there are no outstanding options, warrants or other rights of any kind to
acquire (including preemptive rights) any additional shares of capital stock
of PXP or securities convertible into or exchangeable for, or which otherwise
confer on the holder thereof any right to acquire, any such additional shares,
nor is PXP committed to issue any such option, warrant, right or security.
Section 2.3 Subsidiaries of PXP. Schedule 2.3 sets forth the name and
jurisdiction of organization of each Subsidiary. All shares of the capital
stock of each Subsidiary that is a corporation have been validly issued and
are fully paid and non-assessable and held beneficially and of record by PXP.
Except as listed on Schedule 2.3A, there are no outstanding options, warrants
or other rights of any kind to acquire (including preemptive rights) any
additional equity interests of any Subsidiary or securities convertible into
or exchangeable for, or which otherwise confer on the holder thereof any right
to acquire, any additional equity interests of any Subsidiary, nor is any
Subsidiary committed to issue any such option, warrant, right or security.
Other than the Subsidiaries referred to in this Section 2.3 and except as
listed on Schedule 2.3B, PXP does not own, directly or indirectly, any equity
interest in any other corporation, joint venture, partnership, limited
liability company or other entity.
Section 2.4 Authorization.
(a) PXP has all requisite corporate power and authority to enter into this
Agreement and, subject to any necessary approval of the Merger by the
stockholders of PXP, to carry out its obligations under and to consummate the
transactions contemplated by this Agreement.
(b) The execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement have been duly authorized by
all requisite corporate action on the part of PXP (other than the approval of
this Agreement and the transactions contemplated by this Agreement by the
stockholders of PXP). The Board of Directors of PXP has unanimously adopted
resolutions approving this Agreement and the Merger, and has determined that
the terms of the Merger are fair to, and in the best interests of, PXP and the
Public Stockholders.
(c) PXP has taken all action necessary to exempt the Merger and the other
transactions contemplated by this Agreement with PMH, Acquisition Co. and
their affiliates from the operation of the "Business Combination Statute"
contained in Section 203 of the DGCL.
(d) This Agreement has been duly executed and delivered by PXP and,
assuming the due authorization, execution and delivery of this Agreement by
PMH, constitutes the valid and binding obligation of PXP,
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enforceable against PXP in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally or by
general equitable principles.
(e) Consents.
(i) Assuming that the consents, approvals, qualifications, orders,
authorizations and filings referred to in Section 2.4(e)(ii) have been made
or obtained, the execution, delivery and performance by PXP of this
Agreement will not result in any violation of or be in conflict with, or
result in a breach of, or constitute a default under:
(1) any term or provision of any state or federal law, ordinance,
rule or regulation to which PXP or any of its Subsidiaries is subject,
except for such violations, breaches or defaults that would not have,
together with all such other violations, breaches and defaults, a
Material Adverse Effect on PXP; or
(2) the Certificate of Incorporation or By-Laws of PXP or any of its
Subsidiaries, as amended and in effect on the date of this Agreement or
the Closing Date; or
(3) any Contract or Judgment or other restriction to which PXP or
any of its Subsidiaries is a party or by which PXP or any of its
Subsidiaries is bound, or result in the creation of any Lien upon any
of the properties or assets of PXP or any of its Subsidiaries, except
for such violations, breaches, defaults or Liens that would not have,
together with all such other violations, breaches, defaults and Liens,
a Material Adverse Effect on PXP.
(ii) No consent, approval, qualification, order or authorization of, or
filing with, any Governmental Entity is required in connection with PXP's
valid execution, delivery or performance of this Agreement, or the
consummation of any other transaction contemplated on the part of PXP under
this Agreement, except (1) in connection, or in compliance, with the
Securities Act and the Exchange Act, (2) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which PXP or any
of its Subsidiaries is qualified to do business, (3) such approvals,
qualifications, orders, authorizations, or filings as may be required under
state takeover laws, (4) applicable requirements, if any, of state
securities or "blue sky" laws, and (5) approvals, qualifications, orders,
authorizations, or filings, the failure to obtain which would not have a
Material Adverse Effect on PXP.
Section 2.5 Fairness Opinion and Approval by the Committee.
(a) On or prior to the date of this Agreement, the Committee has (i)
approved the terms of this Agreement and the transactions contemplated by this
Agreement as they related to the Public Stockholders, including without
limitation, the Merger, (ii) determined that the Merger is fair to and in the
best interest of the Public Stockholders, and (iii) recommended that the Board
of Directors of PXP approve this Agreement and such transactions.
(b) The Committee has received an opinion of Salomon Smith Barney Inc. to
the effect that the consideration to be received by the Public Stockholders in
the Merger is fair to the Public Stockholders from a financial point of view.
Section 2.6 Brokers and Finders. Other than Salomon Smith Barney Inc.,
neither PXP nor any Subsidiary has employed any broker, finder, advisor or
intermediary in connection with the transactions contemplated by this
Agreement which would be entitled to a broker's, finder's or similar fee or
commission in connection with or upon the consummation of the transactions
contemplated by this Agreement. PXP will be liable for any such fees due to
Salomon Smith Barney Inc.
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Section 2.7 Proxy Statement and other Disclosure Documents.
(a) None of the information to be supplied by PXP for inclusion in the
Proxy Statement and any other document required to be filed by PXP with the
SEC in connection with the transactions contemplated by this Agreement (each,
a "PXP Disclosure Document"), will contain any untrue statement of a material
fact or omit to state any material fact required to be stated in, or necessary
in order to make the statements in, the PXP Disclosure Document, in light of
the circumstances under which they are made, not misleading at the time of the
mailing or filing of the PXP Disclosure Document, or of any amendments or
supplements to the PXP Disclosure Document.
(b) Each Disclosure Document will, as of its effective date, comply as to
form in all material respects with all applicable laws, including the Exchange
Act.
Section 2.8 SEC Documents; Financial Statements.
(a) Each of PXP and its Subsidiaries has filed all required reports,
schedules, forms, statements and other documents with the SEC since January 1,
1995 (collectively, the "SEC Documents").
(b) As of their respective dates, the SEC Documents complied in all
material respects with all applicable requirements of the Securities Act, the
Exchange Act and the Investment Act. Except to the extent that information
contained in any SEC Document has been revised or superseded by a later filed
SEC Document, none of the SEC Documents contains any untrue statement of a
material fact or omits to state any material fact required to be stated in or
necessary in order to make the statements in the SEC Documents, in light of
the circumstances under which they were made, not misleading.
(c) The financial statements of PXP and its Subsidiaries included in the
SEC Documents (i) comply as to form in all material respects with applicable
accounting requirements and the applicable published rules and regulations of
the SEC, (ii) have been prepared in accordance with GAAP (except, in the case
of unaudited statements, as permitted by applicable instructions or
regulations of the SEC relating to the preparation of quarterly reports on
Form 10-Q) applied on a consistent basis during the period involved (except as
may be indicated in the notes to the financial statements), and (iii) fairly
present the financial position of PXP or its Subsidiaries as of their dates
and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
Section 2.9 Absence of Certain Changes or Events. Except as disclosed in
the SEC Documents filed and publicly available prior to the date of this
Agreement, since the date of the most recent audited financial statements
included in the filed SEC Documents, each of PXP and its Subsidiaries has
conducted its business only in the ordinary course, and there has not been:
(a) any event, occurrence, development or state of circumstances or
facts which has had, or would have a reasonable probability of having,
individually or in the aggregate, a Material Adverse Effect on PXP;
(b) any incurrence, assumption or guarantee by PXP or any of its
Subsidiaries of any material indebtedness for borrowed money other than (i)
in the ordinary course of business consistent with past practices, (ii)
under credit facilities of PXP or any of its Subsidiaries as in effect as
of the date of this Agreement or (iii) indebtedness of a wholly-owned
Subsidiary of PXP to PXP or another wholly-owned Subsidiary of PXP, or of
PXP to a wholly-owned Subsidiary of PXP;
(c) any creation or other incurrence by PXP or any of its Subsidiaries
of any material Lien on any material asset other than in the ordinary
course of business consistent with past practices;
(d) any making of any material loan, advance or capital contributions to
or investment in any Person other than loans, advances, capital
contributions or investments made (i) in the ordinary course of business
consistent with past practices, or (ii) by a wholly-owned Subsidiary of PXP
to PXP or another wholly-owned Subsidiary of PXP, or by PXP to a wholly-
owned Subsidiary of PXP; or
(e) except as set forth in Schedule 2.9(h), any (i) grant of any
severance or termination pay to any director or officer of PXP or any
president of any of its material Subsidiaries, (ii) increase in benefits
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payable to any director or officer of PXP or any president of any of its
material Subsidiaries under any existing severance or termination pay
policies or employment agreements, (iii) entering into of any employment,
deferred compensation or other similar agreement (or any amendment to any
such existing agreement) with any director or officer of PXP or any
president of any of its material Subsidiaries or (iv) establishment,
adoption or amendment (except as required by applicable law) of any
collective bargaining, bonus, profit sharing, thrift, pension, retirement,
deferred compensation, compensation, stock option, restricted stock or
other benefit plan or arrangement covering any director or officer of PXP
or any president of any of its material Subsidiaries.
Section 2.10 No Undisclosed Material Liabilities. There are no liabilities
of PXP or any of its Subsidiaries of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, which would be
required to be reflected, reserved for or disclosed under GAAP in the
consolidated financial statements of PXP, other than:
(a) liabilities or obligations reflected, reserved for or otherwise
provided for in the balance sheet comprising part of the most recent
audited financial statements included in the filed SEC Documents;
(b) liabilities or obligations which would not, individually or in the
aggregate, have a reasonable probability of having a Material Adverse
Effect on PXP;
(c) liabilities or obligations incurred under this Agreement or in
connection with the transactions contemplated hereby; and
(d) liabilities or obligations incurred in the ordinary course of
business since the date of the most recent audited financial statements
included in the filed SEC Documents.
Section 2.11 Compliance with Laws and Court Orders. Except as set forth in
SEC Documents prior to the date of this Agreement, each of PXP and its
Subsidiaries is and has been in compliance with and, to the knowledge of PXP,
is not under investigation with respect to and has not been threatened to be
charged with or given notice of any violation of, any applicable law, rule
regulation, judgment, injunction, order or decree, except for such matters as
would not, individually or in the aggregate, have a reasonable probability of
having a Material Adverse Effect on PXP.
ARTICLE III.
Representations and Warranties of PMH
PMH hereby represents and warrants to PXP as follows:
Section 3.1 Organization of PMH. PMH is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Connecticut.
Section 3.2 Organization and Authority of Acquisition Co. Acquisition Co.
will be a corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware. Acquisition Co. will be incorporated
solely for the purpose of merging with and into PXP and taking action incident
to the Merger. Except for obligations or liabilities and activities
contemplated by this Agreement, Acquisition Co. will not have incurred any
obligations or liabilities or engaged in any business activities of any kind
prior to the Closing.
Section 3.3 Authorization.
(a) PMH has all corporate power and authority to enter into this Agreement,
to perform its obligations under this Agreement and to consummate the
transactions contemplated by this Agreement.
(b) The execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement have been duly authorized by
all corporate action on the part of PMH.
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(c) This Agreement has been duly executed and delivered by PMH and,
assuming the due authorization, execution and delivery of this Agreement by
PXP, constitutes the valid and binding obligation of PMH, enforceable against
PMH in accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, or similar laws
affecting creditors' rights generally or by general equitable principles.
(d) Upon the formation of Acquisition Co. and the assignment of this
Agreement to Acquisition Co. in accordance with Section 7.8, assuming the due
authorization, execution and delivery of this Agreement by PXP, this Agreement
will constitute the valid and binding obligation of Acquisition Co.,
enforceable against Acquisition Co. in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, or similar laws affecting creditors' rights generally or by
general equitable principles.
(e) Consents.
(i) Assuming that the consents, approvals, qualifications, orders,
authorizations and filings referred to in Section 3.3(e)(ii) have been made
or obtained, the execution, delivery and performance by PMH of this
Agreement will not result in any violation of or be in conflict with, or
result in a breach of, or constitute a default under:
(1) any term or provision of any state or federal law, ordinance,
rule or regulation to which PMH or any of its respective Subsidiaries
is subject and which violation, breach or default would have, together
with all such other violations, breaches and defaults, a Material
Adverse Effect on PMH; or
(2) the Certificate of Incorporation or By-Laws of PMH and its
Subsidiaries, as amended and in effect on the date of this Agreement or
the Closing Date, or any Contract or Judgment or other restriction to
which PMH or any of its Subsidiaries is a party or by which PMH or any
of its Subsidiaries is bound, or result in the creation of any Lien
upon any of the properties or assets of PMH or any of its Subsidiaries.
(ii) No consent, approval, qualification, order or authorization of, or
filing with, any Governmental Entity is required in connection with the
valid execution, delivery or performance of this Agreement by PMH, or the
consummation of any other transaction contemplated on the part of PMH or
Acquisition Co. under this Agreement, except (1) in connection, or in
compliance, with the Securities Act and the Exchange Act, (2) the filing of
the Certificate of Merger with the Secretary of State of the State of
Delaware, (3) such approvals, qualifications, orders, authorizations, or
filings as may be required under state takeover laws, (4) applicable
requirements, if any, of state securities or "blue sky" laws, and (5)
approvals, qualifications, orders, authorizations, or filings, the failure
to obtain which would not have a Material Adverse Effect on PMH.
Section 3.4 Brokers and Intermediaries. Other than Morgan Stanley & Co,
Incorporated ("Morgan Stanley"), PMH has not employed any broker, finder,
advisor or intermediary in connection with the transactions contemplated by
this Agreement which would be entitled to a broker's, finder's, or similar fee
or commission in connection with or upon the consummation of the transactions
contemplated by this Agreement. PMH will be liable for any such fees due to
Morgan Stanley.
Section 3.5 PXP Disclosure Document. None of the information to be supplied
by PMH for inclusion in any PXP Disclosure Document will contain any untrue
statement of a material fact or omit to state any material fact required to be
stated in or necessary in order to make the statements in the PXP Disclosure
Document, in light of the circumstances under which they are made, not
misleading at the time of the mailing or filing of the PXP Disclosure Document
and of any amendments or supplements to the PXP Disclosure Document.
Section 3.6 Financial Ability. PMH has the financial ability to cause
Acquisition Co. to pay the Merger Consideration and to consummate the other
transactions contemplated by this Agreement.
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ARTICLE IV.
Certain Covenants and Agreements
Section 4.1 Announcement. None of PXP, PMH or their respective Affiliates
will issue any press release or otherwise make any public statement with
respect to this Agreement and the transactions contemplated by this Agreement
without the prior consent of the other Party (which consent will not be
unreasonably withheld), except as may be required by applicable law or stock
exchange regulation. PMH and PXP will, to the extent practicable, consult with
each other before issuing, and provide each other the opportunity to review
and comment upon, any such press release or other public statement with
respect to this Agreement and the transactions contemplated by this Agreement
whether or not required by law.
Section 4.2 Notification of Certain Matters. PXP will give prompt notice to
PMH, and PMH will give prompt notice to PXP, of:
(a) the occurrence or non-occurrence of any event the occurrence or non-
occurrence of which would be reasonably likely to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the Effective Time; and
(b) any material failure of PXP or of PMH, as the case may be, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement.
The delivery of any notice under this Section 4.2 will not limit or otherwise
affect the remedies available under this Agreement to the Party receiving the
notice.
Section 4.3 Directors' and Officers' Indemnification. (a) The Certificate
of Incorporation and the By Laws of the Surviving Corporation will contain the
provisions with respect to indemnification and limitation of liability of
directors and officers set forth in PXP's Certificate of Incorporation and By
Laws on the date of this Agreement. These provisions may not be amended,
repealed or otherwise modified for a period of six (6) years following the
Effective Time in any manner that would adversely affect the rights under the
Certificate of Incorporation and By Laws of individuals who on or prior to the
Effective Time were directors or officers of PXP, unless such modification is
required by law.
(b) The Surviving Corporation will maintain in effect for six (6) years
from the Effective Time policies of directors' and officers' liability
insurance containing terms and conditions which are not less advantageous to
the insured than any such policies of PXP currently in effect on the date of
this Agreement (the "PXP Insurance Policies"), with respect to matters
occurring prior to the Effective Time, to the extent available to the
Surviving Corporation on commercially reasonable terms.
Section 4.4 Stockholder Meeting. PXP will call and hold a meeting of the
stockholders of PXP for the purpose of approving the adoption and approval of
this Agreement and the transactions contemplated by this Agreement. PMH agrees
to vote all shares of PXP Common Stock owned by it, and to cause Acquisition
Co. to vote all shares of PXP Common Stock owned by Acquisition Co., at the
Stockholders Meeting in favor of the adoption and approval of this Agreement
and the transactions contemplated by this Agreement.
ARTICLE V.
Conditions Precedent
Section 5.1 Conditions to each Party's Obligation to Effect the Merger. The
respective obligation of each Party to effect the Merger is subject to the
satisfaction on or prior to the Closing Date of each of the following
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conditions (any of which may be waived by the Parties in writing, in whole or
in part, to the extent permitted by applicable law):
(a) No Injunction or Proceeding. No preliminary or permanent injunction,
temporary restraining order or other decree of any Governmental Entity and
no action, suit or proceeding by, or before, any Governmental Entity may
have been instituted or threatened that prohibits the consummation of the
Merger or materially challenges the transactions contemplated by this
Agreement.
(b) Consents. Other than the filing of the Certificate of Merger, all
consents, approvals and authorizations of and filings with Governmental
Entities required for the consummation of the transactions contemplated by
this Agreement must have been obtained or effected or filed.
(c) Approval of Holders of PXP Common Stock. This Agreement and the
Merger must have been adopted by the affirmative vote or written consent of
a majority of the outstanding shares of PXP Common Stock.
(d) Opinion of Financial Advisor. The opinion of Salomon Smith Barney
Inc. referred to in Section 2.5 must not have been withdrawn or revoked.
Section 5.2 Conditions to the Obligation of PXP to Effect the Merger. The
obligation of PXP to effect the Merger is further subject to the satisfaction
or waiver of each of the following conditions prior to or at the Closing Date:
(a) Representations and Warranties. The representations and warranties
of PMH contained in this Agreement must be true and correct in all material
respects at and as of the Effective Time as though made at and as of the
Effective Time;
(b) Agreements. PMH must have performed and complied in all material
respects with all its undertakings and agreements required by this
Agreement to be performed or complied with by it prior to or at the Closing
Date; and
(c) Certificate. PXP must have received a certificate of an executive
officer of PMH, dated the Closing Date, certifying that the conditions
specified in Section 5.2(a) and Section 5.2(b), as the case may be, have
been fulfilled.
Section 5.3 Conditions to the Obligation of PMH to Cause Acquisition Co. to
Effect the Merger. The obligation of PMH to cause Acquisition Co. to effect
the Merger is further subject to the satisfaction or waiver of each of the
following conditions prior to or at the Closing Date:
(a) Representations and Warranties. The representations and warranties
of PXP contained in this Agreement must be true and correct in all material
respects at and as of the Effective Time as though made at and as of the
Effective Time (except, in the case of the representation and warranty
contained in Section 2.9, with respect to events occurring after the date
hereof in the ordinary course of business consistent with past practice or
approved in writing by PMH);
(b) Agreements. PXP must have performed and complied in all material
respects with all of its undertakings and agreements required by this
Agreement to be performed or complied with by it prior to or at the Closing
Date;
(c) Certificate. PMH must have received a certificate of an executive
officer of PXP, dated the Closing Date, certifying that the conditions
specified in Section 5.3(a) and Section 5.3(b) have been fulfilled;
(d) Appraisal Rights. The holders of not more than 5% of the issued and
outstanding shares of PXP Common Stock may have exercised their rights to
dissent from the Merger in accordance with Section 262 of the DGCL and
Section 1.7 of this Agreement; and
(e) PXP Benefit Plans. PXP will have no obligation to issue, transfer or
sell any shares of its capital stock or other securities of PXP pursuant to
any employee benefit plan or otherwise.
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ARTICLE VI.
Termination, Amendment and Waiver
Section 6.1 Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, whether before or
after the approval of the holders of PXP Common Stock referred to in Section
5.1(c):
(a) by the mutual written consent of PMH and PXP,
(b) by either PMH or PXP, in each case by written notice to the other,
if:
(i) the Merger has not been consummated on or prior to December 31,
2000; provided that the right to terminate this Agreement under this
Section 6.1(b)(i) will not be available to any Party whose failure to
fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Merger to occur on or prior to such
date; or
(ii) the Committee or the PXP Board of Directors withdraws, or
modifies or changes in any manner adverse to PMH, its approval of this
Agreement or the Merger, or its recommendation that the Public
Stockholders of PXP adopt this Agreement, after having concluded in good
faith after consultation with independent legal counsel that there is a
reasonable probability that the failure to take such action would result
in a violation of its fiduciary obligations under applicable law.
Section 6.2 Effect of Termination. If this Agreement is terminated as
provided in Section 6.1, this Agreement will become null and void, and there
will be no liability on the part of PMH, or PXP or their Affiliates (except
that the provisions of Section 7.4 will survive any termination of this
Agreement); provided that nothing in this Agreement will relieve any party
from any liability or obligation with respect to any breach of this Agreement
prior to such termination.
Section 6.3 Amendment. This Agreement may be amended only by an agreement
in writing executed by both Parties.
Section 6.4 Waiver. At any time prior to the Effective Time. whether before
or after the approval of the holders of PXP Common Stock referred to in
Section 5.1(c), either Party may:
(a) extend the time for the performance of any of the obligations or
other acts of the other Party; or
(b) waive compliance with any of the agreements of the other Party or
fulfillment of any conditions to its own obligations under this Agreement.
Any agreement on the part of a Party to any such extension or waiver will be
valid only if set forth in an instrument in writing signed on behalf of such
Party by a duly authorized officer.
ARTICLE VII.
Miscellaneous
Section 7.1 Definitions. In this Agreement, unless the context otherwise
provides, the following terms have the following meanings:
"Acquisition Co." has the meaning specified in Recital B.
"Acquisition Co. Common Stock" has the meaning specified in Section 1.1.
"Affiliates" means, with respect to any Person, (i) any other Person
that directly or indirectly Controls, is Controlled by or is under common
Control with, such Person, or (ii) any director, officer, partner, member
of management or employee of such Person, provided that none of PMH and its
Subsidiaries will be deemed to be Affiliates of PXP and its Subsidiaries.
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"Certificate of Merger" has the meaning specified in Section 1.3.
"Closing" has the meaning specified in Section 1.4.
"Closing Date" has the meaning specified in Section 1.4.
"Code" has the meaning specified in Section 1.9(g).
"Committee" has the meaning specified in the Recitals.
"Contract" means any contract, license, lease, grant of immunity from
suit in relation to intellectual property rights, commitment, arrangement,
purchase or sale order, undertaking, understanding or other agreement,
whether written or oral.
"Control" means the power to direct or cause the direction of management
or policies of a Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise.
"DGCL" has the meaning specified in Recital B.
"Dissenting Shares" has the meaning specified in Section 1.7.
"Effective Time" has the meaning specified in Section 1.3.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated under such Act from
time to time.
"Exchange Agent" has the meaning specified in Section 1.9(a).
"Exchange Fund" has the meaning specified in Section 1.9(a).
"GAAP" means accounting principles and practices generally accepted from
time to time in the United States.
"Government Entity" means a court, legislature or other agency or
instrumentality or political subdivision of federal, state or local
government.
"Investment Act" means the Investment Company Act of 1940, as amended,
and the Investment Advisors Act of 1940, as amended, and the rules and
regulations of the SEC promulgated under such Acts from time to time.
"Judgment" means any judgment, order, award, writ, injunction or decree
of any Governmental Entity or arbitrator.
"Letter of Transmittal" has the meaning specified in Section 1.9(b)(i).
"Lien" means any mortgage, pledge, lien, charge, restriction, claim or
encumbrance of any nature whatsoever, including but not limited to, any
restriction on use, transfer, voting, receipt of income or other exercise
of any attributes of ownership.
"Material Adverse Effect" means, in relation to a Party, any effect,
condition, circumstance or development preventing or significantly
impairing the ability of that Party to consummate the transactions
contemplated by this Agreement or materially delaying the consummation of
any of the transactions contemplated by this Agreement, including, in
relation to PXP only, any effect, condition, circumstance or development
having a material adverse effect on the business, assets, liabilities,
results of operations, or financial condition of PXP and its Subsidiaries,
taken as a whole.
"Merger" has the meaning specified in Recital B.
"Merger Consideration" has the meaning specified in Section 1.6(b)(i).
"Morgan Stanley" has the meaning specified in Section 3.4.
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"Party" means each of PMH and PXP, and any other Person that may become
a party to this Agreement from time to time.
"Person" means any individual, corporation, joint venture, partnership,
limited liability company, trust, unincorporated organization, Governmental
Entity or other entity.
"Proxy Statement" has the meaning specified in Section 1.10(a).
"Public Stockholders" means all of the holders of shares of PXP Common
Stock, excluding PMH and members of management of PXP.
"PXP Common Stock" has the meaning specified in Recital A.
"PXP Debentures" has the meaning specified in Section 2.2(b).
"PXP Disclosure Document" has the meaning specified in Section 2.7(a).
"PXP Insurance Policies" has the meaning specified in Section 4.3(b).
"PXP Stock Option" has the meaning specified in Section 1.7(d).
"Schedule 13E-3 Transaction Statement" has the meaning specified in
Section 1.10(d).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated under such Act from time to
time.
"SEC" means the Securities and Exchange Commission, and any successor or
replacement entity.
"SEC Documents" has the meaning specified in Section 2.8.
"Subsidiary" means any Person of which PXP, directly or indirectly, owns
or controls capital stock (or other equity interests) representing more
than 50% of the general voting power of such entity under ordinary
circumstances.
"Surviving Corporation" has the meaning specified in Section 1.2.
"Surviving Corporation Common Stock" has the meaning specified in
Section 1.6(a).
Section 7.2 Performance Guarantee by PHL. PHL hereby unconditionally and
irrevocably guarantees for the benefit of PXP, the punctual and complete
performance and discharge by PMH, and following an assignment by PMH of all of
its rights, interests and obligations under this Agreement to Acquisition Co.
under Section 7.8, Acquisition Co., of all their financial obligations and
liabilities under this Agreement.
Section 7.3 Non-survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument
delivered under this Agreement will survive the Effective Time, and none of
PMH, PXP, their respective Affiliates and any of the officers, directors,
employees or stockholders of any of the foregoing, will have any liability
whatsoever with respect to any such representation or warranty after such
time. This Section 7.3 will not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time.
Section 7.4 Expenses. Except as contemplated by this Agreement, all costs
and expenses incurred in connection with the Agreement and the consummation of
the transactions contemplated by this Agreement will be the obligation of the
Party incurring such expenses.
Section 7.5 Applicable Law. This Agreement will be governed by the laws of
the State of Delaware.
Section 7.6 Notices. All notices and other communications under this
Agreement must be in writing and will be deemed to have been duly given or
made as follows: (a) if sent by registered or certified mail in the United
States, return receipt requested, upon receipt; (b) if sent by reputable
overnight air courier, two business days after being so sent; (c) if sent by
telecopy transmission, with a copy mailed on the same day in the manner
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provided in clause (a) or (b) above, when transmitted and receipt is confirmed
by telephone; or (d) if otherwise actually personally delivered, when
delivered, and shall be sent or delivered as follows:
If to PXP, to:
Phoenix Investment Partners, Ltd.
One American Row
Hartford, Connecticut 06102
Attention: Nancy Engberg
Fax: 860-403-7600
Tel: 860-403-5973
with a copy to:
Lord Bissell & Brook
115 South La Salle Street
Chicago, Illinois 60603
Attention: John S. Chapman
Fax: 312-443-0336
Tel: 312-443-0700
If to PMH or Acquisition Co., to:
PM Holdings, Inc.
One American Row
Hartford, Connecticut 06115
Attention: Tracy L. Rich
Fax: 860-403-7203
Tel: 860-403-5566
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
Attention: Gregory V. Gooding
Fax: 212-909-6836
Tel: 212-909-6870
If to PHL, to:
Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, Connecticut 06115
Attention: Tracy L. Rich
Fax: 860-403-7203
Tel: 860-403-5566
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
Attention: Gregory V. Gooding
Fax: 212-909-6836
Tel: 212-909-6870
Such names and addresses may be changed by such notice.
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Section 7.7 Entire Agreement. This Agreement (including the documents and
instruments referred to in this Agreement) contains the entire understanding
of the Parties with respect to the subject matter hereof, and supersedes and
cancels all prior agreements, negotiations, correspondence, undertakings and
communications of the parties, oral or written, respecting such subject
matter.
Section 7.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement may be assigned by either Party
(whether by operation of law or otherwise) without the prior written consent
of the other Party, provided that PMH may assign all of its rights, interests
and obligations under this Agreement to Acquisition Co. following the
formation thereof (in which event PMH will cause Acquisition Co. to comply
with all of its obligations hereunder).
Section 7.9 Headings References. The article, section and paragraph
headings contained in this Agreement are for reference purposes only and will
not affect in any way the meaning or interpretation of this Agreement.
Section 7.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
will be considered one and the same agreement.
Section 7.11 No Third Party Beneficiaries. Except as provided in Section
1.9 and Section 4.3, nothing in this Agreement, express or implied, is
intended to confer upon any Person not a party to this Agreement any rights or
remedies under or by reason of this Agreement.
Section 7.12 Severability; Enforcement. Any term or provision of this
Agreement that is invalid or unenforceable in any jurisdiction will, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
unenforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provisions will be interpreted to be only so broad as is
enforceable.
[remainder of this page left intentionally blank]
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<PAGE>
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the
date first above written.
Phoenix Investment Partners, Ltd.
By: ___________________________________
Name:
Title:
PM Holdings, Inc.
By: ___________________________________
Name:
Title:
With respect to Section 7.2 and
Section 7.8 only:
Phoenix Home Life Mutual
Insurance Company
By: ___________________________________
Name:
Title:
A-21
<PAGE>
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER (the "Amendment"), dated as
of November 29, 2000, by and between PM Holdings, Inc., a Connecticut
corporation ("PMH") and Phoenix Investment Partners, Ltd., a Delaware
corporation ("PXP").
RECITALS:
A. PMH and PXP are parties to an Agreement and Plan of Merger, dated as of
September 10, 2000, among PMH, PXP and Phoenix Home Life Mutual Insurance
Company, a New York mutual life insurance company (as amended from time to
time, the "Merger Agreement").
B. The Merger Agreement may be amended by an agreement in writing executed
by PMH and PXP.
C. PMH and PXP desire to amend the Merger Agreement as set forth in this
Amendment.
AGREEMENT:
1. Definitions. Capitalized terms used but not defined in this Amendment
have the meanings specified in the Merger Agreement.
2. Amendment. Section 6.1(b)(i) of the Merger Agreement is hereby amended
by deleting the date, December 31, 2000, appearing in such provision and
replacing such date with the date, February 28, 2001.
3. Further Assurances. Each of the Parties will, at its own expense,
execute and deliver, or cause to be executed and delivered, such additional
instruments, documents or assurances and take such other actions as may be
necessary, or otherwise reasonably requested by a party, to render effective
the consummation of the transactions contemplated by this Amendment or
otherwise carry out the intent and purposes of this Amendment.
4. Governing Law. This Amendment will be governed by the laws of the State
of Delaware.
[the remainder of this page left intentionally blank]
A-22
<PAGE>
IN WITNESS WHEREOF, the Parties have duly executed this Amendment as of the
date first above written.
PM Holdings, Inc.
By: ___________________________________
Name:
Title:
Phoenix Investment Partners, Ltd.
By: ___________________________________
Name:
Title:
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<PAGE>
Appendix B
September 10, 2000
Independent Directors Committee of the Board of Directors
Phoenix Investment Partners, Ltd.
56 Prospect Street
Hartford, CT 06115
Dear Members of the Independent Directors Committee:
You have requested our opinion as investment bankers as to the fairness,
from a financial point of view, to the holders of common stock, par value
$0.01 per share (the "Common Stock"), of Phoenix Investment Partners, Ltd.
("PXP"), other than Phoenix Home Life Mutual Insurance Company ("PHL") and its
affiliates, (such holders, the "Public Shareholders") of the Merger
Consideration (as defined below) contemplated by the Agreement and Plan of
Merger (the "Merger Agreement") to be entered into between PM Holdings, Inc.
("PMH"), a wholly-owned subsidiary of PHL, and PXP in connection with the
proposed merger (the "Merger") of a newly-formed, wholly-owned subsidiary of
PMH with and into PXP. Pursuant to the Merger Agreement, each share of Common
Stock issued and outstanding immediately prior to the effective time of the
Merger (other than shares cancelled in accordance with Sections 1.6(c) and (d)
of the Merger Agreement, and other than shares of Common Stock in respect of
which dissenters' rights have been perfected) will be converted into the right
to receive $15.75 in cash (the "Merger Consideration").
In connection with rendering our opinion, we have, among other things: (i)
reviewed a draft of the Merger Agreement dated September 7, 2000 in the form
provided to us, and have assumed that the final form of such agreement will
not vary in any respect that is material to our analysis; (ii) reviewed
certain publicly available business and financial information that we deemed
relevant relating to PXP and the industry in which it operates; (iii) reviewed
and analyzed certain financial projections and other non-public financial and
operating data concerning the business and operations of PXP that were
provided to or reviewed for us by the management of PXP; (iv) reviewed certain
publicly available business and financial information with respect to certain
other companies that we believed to be relevant or comparable in certain
respects to PXP, and the trading markets for such other companies' securities;
(v) reviewed and analyzed certain publicly available and other information
concerning the trading of, and the trading market for, the Common Stock; (vi)
reviewed the financial terms of certain recent business combinations and
acquisition transactions we deem reasonably comparable to the Merger and
otherwise relevant to our inquiry; and (vii) considered such other
information, financial studies, analyses, investigations and financial,
economic, market and trading criteria as we deemed relevant to our inquiry. We
have also discussed with members of PXP's senior management and certain
officers and employees of PXP the foregoing, including the past and current
business operations, financial condition and prospects of PXP, as well as
other matters we believed relevant to our inquiry.
In our review and analysis and in arriving at our opinion, we have assumed
and relied upon, without assuming any responsibility for verification, the
accuracy and completeness of all of the financial and other information
provided to, discussed with, or reviewed by or for us, or publicly available.
With respect to PXP's financial projections provided to, discussed with or
reviewed for us by the management of PXP, we have been advised by management
of PXP, and have assumed, that they have been reasonably prepared on bases
reflecting the best currently available estimates and judgments on the part of
management of PXP, as to the future financial performance of PXP. We express
no view as to such projections or information or the assumptions on which they
are based. We have not assumed any responsibility for making or obtaining any
independent evaluations or appraisals of any of the assets or liabilities of
PXP, nor for conducting a physical inspection of the properties and facilities
of PXP, and we have not been furnished with any such evaluation or appraisal.
Our opinion necessarily
B-1
<PAGE>
is based on market, economic and other conditions as they exist and can be
evaluated on the date hereof, and we assume no responsibility to update or
revise our opinion based upon circumstances or events occurring after the date
hereof.
In connection with the preparation of this opinion, we have not been
authorized by PXP to solicit, nor have we solicited, third-party indications
of interest for the acquisition of all or any part of PXP. We note that PHL
has stated in its initial offer letter of July 24, 2000 that PHL is not
interested in selling its interest in PXP.
As you are aware, we have acted as the financial advisor to the Independent
Directors Committee of the Board of Directors of PXP in connection with the
Merger and will receive a fee for our services, a portion of which will be
received in connection with the delivery of this opinion and a portion of
which will be received upon the consummation of the Merger. In addition, PXP
has agreed to indemnify us for certain liabilities arising out of our
engagement. We, in the ordinary course of business, may have from time to time
provided, and in the future may continue to provide, investment banking,
financial advisory and other related services to PXP, PHL and/or their
respective affiliates, as the case may be, for which we have or will receive
fees. In the ordinary course of business, we or our affiliates may hold or
actively trade in the debt and equity securities of PXP, PHL and/or their
respective affiliates, as the case may be, for our own accounts and for the
accounts of our customers and, accordingly, may at any time hold a long or
short position in such securities. In addition, we and our affiliates
(including Citigroup Inc. and its affiliates) may maintain business
relationships with PXP, PHL and/or their respective affiliates.
This opinion is for the use and benefit of the Independent Directors
Committee of the Board of Directors of PXP and the Board of Directors of PXP.
Our opinion does not address PXP's underlying business decision to effect the
Merger or constitute a recommendation to any holder of Common Stock as to how
such holder should vote with respect to the Merger.
Based upon and subject to the foregoing, we are of the opinion that, as of
the date hereof, the Merger Consideration is fair, from a financial point of
view, to the Public Shareholders.
Very truly yours,
Salomon Smith Barney Inc.
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<PAGE>
APPENDIX C
Delaware General Corporation Law, Section 262. Appraisal rights.
(a) Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares
through the effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has neither voted in
favor of the merger or consolidation nor consented thereto in writing pursuant
to (S) 228 of this title shall be entitled to an appraisal by the Court of
Chancery of the fair value of the stockholder's shares of stock under the
circumstances described in subsections (b) and (c) of this section. As used in
this section, the word "stockholder" means a holder of record of stock in a
stock corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinarily meant by those
words and also membership or membership interest of a member of a nonstock
corporation; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in one or more
shares, or fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to
be effected pursuant to (S) 251 (other than a merger effected pursuant to (S)
251(g) of this title), (S) 252, (S) 254, (S) 257, (S) 258, (S) 263 or (S) 264
of this title:
(1) Provided, however, that no appraisal rights under this section shall
be available for the shares of any class or series of stock, which stock,
or depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of (S) 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to (S)(S)
251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock
anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect
thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b., and c. of this
paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under (S) 253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
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<PAGE>
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets
of the corporation. If the certificate of incorporation contains such a
provision, the procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply as nearly as is
practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for
such meeting with respect to shares for which appraisal rights are
available pursuant to subsections (b) or (c) hereof that appraisal rights
are available for any or all of the shares of the constituent corporations,
and shall include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of such stockholder's shares shall deliver
to the corporation, before the taking of the vote on the merger or
consolidation, a written demand for appraisal of such stockholder's shares.
Such demand will be sufficient if it reasonably informs the corporation of
the identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of such stockholder's shares. A proxy or vote against
the merger or consolidation shall not constitute such a demand. A
stockholder electing to take such action must do so by a separate written
demand as herein provided. Within 10 days after the effective date of such
merger or consolidation, the surviving or resulting corporation shall
notify each stockholder of each constituent corporation who has complied
with this subsection and has not voted in favor of or consented to the
merger or consolidation of the date that the merger or consolidation has
become effective; or
(2) If the merger or consolidation was approved pursuant to (S) 228 or
(S) 253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within 20 days after the date of mailing
of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date that shall be
not more than 10 days prior to the date the notice is given, provided, that
if the notice is given on or after the effective date of the merger or
consolidation, the record date shall be such effective date. If no record
date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the
day on which the notice is given.
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<PAGE>
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who
has complied with subsections (a) and (d) hereof and who is otherwise entitled
to appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw such stockholder's demand for appraisal and to accept the terms
offered upon the merger or consolidation. Within 120 days after the effective
date of the merger or consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) hereof, upon written request, shall be
entitled to receive from the corporation surviving the merger or resulting
from the consolidation a statement setting forth the aggregate number of
shares not voted in favor of the merger or consolidation and with respect to
which demands for appraisal have been received and the aggregate number of
holders of such shares. Such written statement shall be mailed to the
stockholder within 10 days after such stockholder's written request for such a
statement is received by the surviving or resulting corporation or within 10
days after expiration of the period for delivery of demands for appraisal
under subsection (d) hereof, whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1 or more
publications at least 1 week before the day of the hearing, in a newspaper of
general circulation published in the City of Wilmington, Delaware or such
publication as the Court deems advisable. The forms of the notices by mail and
by publication shall be approved by the Court, and the costs thereof shall be
borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled
to appraisal rights. The Court may require the stockholders who have demanded
an appraisal for their shares and who hold stock represented by certificates
to submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as
to such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the merger
or consolidation, together with a fair rate of interest, if any, to be paid
upon the amount determined to be the fair value. In determining such fair
value, the Court shall take into account all relevant factors. In determining
the fair rate of interest, the Court may consider all relevant factors,
including the rate of interest which the surviving or resulting corporation
would have had to pay to borrow money during the pendency of the proceeding.
Upon application by the surviving or resulting corporation or by any
stockholder entitled to participate in the appraisal proceeding, the Court
may, in its discretion, permit discovery or other pretrial proceedings and may
proceed to trial upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name appears on
the list filed by the surviving or resulting corporation pursuant to
subsection (f) of this section and who has submitted such stockholder's
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that such
stockholder is not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to
the stockholders entitled thereto. Interest may be simple or compound, as the
Court may direct. Payment shall be so made to each such stockholder, in the
case of holders of uncertificated stock forthwith, and the case of holders of
shares represented by certificates upon the surrender to the corporation
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of the certificates representing such stock. The Court's decree may be
enforced as other decrees in the Court of Chancery may be enforced, whether
such surviving or resulting corporation be a corporation of this State or of
any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation);
provided, however, that if no petition for an appraisal shall be filed within
the time provided in subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a written withdrawal
of such stockholder's demand for an appraisal and an acceptance of the merger
or consolidation, either within 60 days after the effective date of the merger
or consolidation as provided in subsection (e) of this section or thereafter
with the written approval of the corporation, then the right of such
stockholder to an appraisal shall cease. Notwithstanding the foregoing, no
appraisal proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval may be
conditioned upon such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized
and unissued shares of the surviving or resulting corporation.
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<PAGE>
PROXY PHOENIX INVESTMENT PARTNERS, LTD PROXY
56 PROSPECT STREET
HARTFORD, CONNECTICUT 06115
SPECIAL MEETING OF STOCKHOLDERS--JANUARY 11, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
PHOENIX INVESTMENT PARTNERS, LTD.
The undersigned stockholder of Phoenix Investment Partners, Ltd. ("PXP"),
revoking all previous proxies, acknowledges receipt of Notice of Special Meeting
and accompanying Proxy Statement and appoints Philip R. McLoughlin and Nancy J.
Engberg, and each of them, as proxies with full power of substitution to vote
all shares of PXP that I am entitled to vote, upon all matters presented at the
special meeting of stockholders to be held on January 11, 2001, at 10:00 a.m.,
local time, at One American Row, Hartford, Connecticut 06102, and any
adjournment and postponement thereof. In their discretion, the proxies are
authorized to vote such shares upon such other business as may properly come
before the Annual Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN. IF
NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ADOPTION OF THE
AGREEMENT AND PLAN OF MERGER.
(Continued and to be signed on reverse side.)
--------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
<PAGE>
PHOENIX INVESTMENT PARTNERS, LTD
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
1. To adopt the Agreement and Plan of Merger, dated as of September 10, 2000, as
amended, among PM Holdings, Inc., Phoenix Investment Partners, Ltd. and
Phoenix Home Life Mutual Insurance Company.
For Against Abstain
[_] [_] [_]
2. To transact such other business as may properly come before the Special
Meeting or any adjournments or postponements of the Special Meeting.
You are urged to mark, sign and return your proxy promptly in the enclosed
self-addressed, postage-paid (if mailed in the United States) envelope. DO NOT
SUBMIT ANY STOCK CERTIFICATES WITH THIS PROXY CARD.
Change of Address Mark Here [_]
Mark Here if You Plan to Attend the Meeting [_]
Dated: ___________________________________________________
__________________________________________________________
SIGNATURE OF SHAREHOLDER
__________________________________________________________
SIGNATURE OF SHAREHOLDER
When signing the proxy, please date it and take care to have the signature
correspond to the shareholder's name as it appears on this side of the proxy. If
shares are registered in the names of two or more persons, each person should
sign. Executors, administrators, trustees and guardians should so indicate when
signing.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
. FOLD AND DETACH HERE .
PLEASE MARK, SIGN AND RETURN YOUR PROXY PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
