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Phoenix Companies Inc/DE – ‘DEFC14A’ on 3/7/08 re: Phoenix Companies Inc/DE

On:  Friday, 3/7/08, at 4:41pm ET   ·   Effective:  3/7/08   ·   Accession #:  1193125-8-50264   ·   File #:  1-16517

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/07/08  Phoenix Companies Inc/DE          DEFC14A     3/07/08    1:1.5M Phoenix Companies Inc/DE          RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEFC14A     Notice and Proxy Statement                          HTML   1.05M 

Table of Contents

UNITED STATES

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:

THE PHOENIX COMPANIES, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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March 7, 2008

Dear Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders on Friday, May 2, 2008, at 10 a.m. Eastern Time, at our offices at One American Row, Hartford, Connecticut 06102.

The Notice of Annual Meeting and Proxy Statement accompanying this letter provide an outline of the business to be conducted at the meeting. I also will report on the progress of the Company during the past year and answer your questions.

This year’s Annual Meeting will be a particularly important one, and YOUR vote is extremely important.

Please note that Oliver Press Partners, LLC, its principals Augustus Oliver and Clifford Press and certain of their respective affiliates (collectively, “Oliver Press”), have notified us that they intend to solicit proxies for their own slate of three nominees for election to the Company’s Board of Directors at the Annual Meeting, in opposition to the five nominees that our Board and Governance Committee have selected. Our Board of Directors unanimously recommends a vote FOR ALL of the Board’s five nominees on the enclosed BLUE proxy card. We urge you not to sign and return any proxy card or voting instruction card that you may receive from Oliver Press and to sign, date and return only the BLUE proxy card that you receive from the Company. Even if you have previously signed any proxy card sent to you by Oliver Press, you can revoke it by signing, dating and mailing the enclosed BLUE proxy card in the envelope provided.

Regardless of how many shares you own, your vote is very important. Whether or not you plan to attend the Annual Meeting, please vote as promptly as possible. You can vote your shares via the Internet, telephone, or by completing and returning the enclosed BLUE proxy card by mail. Instructions on each of these voting methods are included in the enclosed Proxy Statement.

Thank you.

Yours truly,

Dona D. Young

Chairman, President and Chief Executive Officer

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THE PHOENIX COMPANIES, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

March 7, 2008

To Our Shareholders:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of THE PHOENIX COMPANIES, INC. will be held at our offices at One American Row, Hartford, Connecticut 06102, on Friday, May 2, 2008, at 10 a.m. Eastern Time, to consider and act upon the following matters:

Only shareholders of record at the close of business on March 5, 2008 are entitled to notice of, and to vote at, the meeting and any postponement or adjournment thereof. To enter the meeting, all shareholders will be asked to present both a valid picture identification and proof of ownership of shares of our Common Stock.

Please note that Oliver Press Partners, LLC, its principals Augustus Oliver and Clifford Press and certain of their respective affiliates (collectively, “Oliver Press”), have notified us that they intend to solicit proxies for their own slate of three nominees for election to the Company’s Board of Directors at the Annual Meeting, in opposition to the five nominees that our Board and Governance Committee have selected. Our Board of Directors unanimously recommends a vote FOR ALL of our Board’s five nominees on the enclosed BLUE proxy card. We urge you not to sign and return any proxy card or voting instruction card that you may receive from Oliver Press and to sign and return only the BLUE proxy card that you receive from the Company. Even if you have previously signed any proxy card sent to you by Oliver Press, you can revoke it by signing, dating and mailing the enclosed BLUE proxy card in the envelope provided.

YOUR VOTE IS EXTREMELY IMPORTANT THIS YEAR. Whether or not you plan to attend the Annual Meeting of Shareholders, we urge you to vote. If you are a registered shareholder, you may vote in one of the following ways:

If you are a registered shareholder and attend the meeting after submitting a proxy, you may revoke the proxy prior to its exercise at the meeting and vote your shares in person by following the instructions in the accompanying Proxy Statement. If you hold your shares through a bank or broker, you will receive instructions through your bank or broker and if you want to vote your shares in person at the meeting, please contact your bank or broker to obtain a legal proxy.

By Order of the Board of Directors,

Tracy L. Rich

Secretary

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PROXY STATEMENT

THE PHOENIX COMPANIES, INC.

ANNUAL MEETING OF SHAREHOLDERS

May 2, 2008

GENERAL INFORMATION

This Proxy Statement is being provided to the shareholders of The Phoenix Companies, Inc., a Delaware corporation (the “Company”, “we”, “our” or “us”), in connection with the solicitation by our Board of Directors (the “Board”) of proxies to be voted at the Annual Meeting of Shareholders (the “Annual Meeting”) to be held on Friday, May 2, 2008, at 10 a.m. Eastern Time, at One American Row, Hartford, Connecticut 06102, and at any adjournment of that meeting. The notice of meeting, this Proxy Statement and the accompanying proxy are being sent to shareholders beginning on or about March 7, 2008.

On January 25, 2008, the Company received a notice from Davenport, L.P., a partnership controlled by Oliver Press Partners, LLC and its principals Augustus Oliver and Clifford Press (collectively, with the other participants in their proxy, “Oliver Press”), for the nomination of three nominees for election to our Board at the Annual Meeting. These nominees have NOT been endorsed by your Board. We urge shareholders NOT to sign any proxy card that you may receive from Oliver Press. Your Board urges you to vote FOR ALL of our director nominees: Sal H. Alfiero; Martin N. Baily; John H. Forsgren, Jr.; John E. Haire; and Thomas S. Johnson.

WHAT AM I VOTING ON?

You will be voting on the following:

You also may vote on any other business properly coming before the meeting.

HOW DOES THE BOARD OF DIRECTORS RECOMMEND VOTING?

The Board unanimously recommends a vote FOR ALL on Proposal 1 and a vote FOR Proposal 2 by voting the BLUE proxy card.

WHO IS ENTITLED TO VOTE?

You may vote if you owned shares of the Company’s common stock (“Common Stock”) as of the close of business on March 5, 2008 (the “Record Date”). Each share of Common Stock entitles the owner to one vote. As of the Record Date, we had 114,381,336 shares of Common Stock outstanding.

HOW DO I VOTE BEFORE THE MEETING?

If you are a registered shareholder, meaning that you hold your shares in certificate form or through an account with our transfer agent, The Bank of New York, you have three options for voting before the meeting:

If you hold your shares through an account with a bank, broker or other registered holder, you are considered the beneficial owner of shares held in “street name”, and you may direct your bank, broker or other registered holder on how to vote your shares by following the directions it provides you.

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MAY I VOTE AT THE MEETING?

Registered shareholders may vote in person at the Annual Meeting. If you are a beneficial owner, you must obtain a legal proxy from the bank, broker or other registered holder authorizing you to vote at the Annual Meeting. A legal proxy is an authorization from your bank, broker or other registered holder to vote the shares held in its name for your benefit.

MAY I CHANGE MY MIND AFTER I VOTE?

If you are a registered shareholder, you may revoke your proxy at any time before it is voted at the Annual Meeting by:

If you are a beneficial owner of shares, you may submit new voting instructions by contacting your bank, broker or other registered shareholder. You may also vote in person at the Annual Meeting if you obtain a legal proxy as described in the answer to the previous question.

All shares that have been properly voted and not revoked will be voted at the Annual Meeting.

WHAT IF I RETURN MY BLUE PROXY CARD BUT DO NOT PROVIDE VOTING INSTRUCTIONS?

BLUE proxies that are signed and returned but do not contain instructions will be voted:

WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD OR INSTRUCTION FORM?

It means that you have multiple accounts with our transfer agent and/or banks, brokers or other registered shareholders. Please vote all of your shares. If you would like information on consolidating your accounts, please contact Phoenix Shareholder Services at 800.490.4258 or at www.bnymellon.com/shareowner/isd. We have included this and other web site addresses here and elsewhere in this Proxy Statement only as inactive textual references. The information contained on these web sites is not intended to be part of this Proxy Statement and is not incorporated by reference into this Proxy Statement.

HOW WILL SHARES HELD IN THE PHOENIX COMPANIES, INC. COMMON STOCK FUND BE VOTED?

This Proxy Statement is being used to solicit voting instructions with respect to shares of Common Stock held in The Phoenix Companies, Inc. Common Stock Fund (the “Fund”) by Fidelity Management Trust Company (“Fidelity”), the trustee of The Phoenix Companies, Inc. Savings and Investment Plan (the “401(k) Plan”). These shares are held of record and voted by Fidelity. If you are a participant in the 401(k) Plan and have an account balance in the Fund, you may direct Fidelity as to how to vote the shares of Common Stock attributable to the units of the Fund credited to your individual account through any of the three options described under How Do I Vote Before the Meeting? on page 1. Voting instructions for these shares must be received by 11:59 p.m. Eastern Time on April 29, 2008 to allow sufficient time to process voting instructions and vote on behalf of the Fund shares.

WILL MY SHARES BE VOTED IF I DO NOT PROVIDE MY PROXY OR INSTRUCTION FORM?

If you are a registered shareholder and do not provide a proxy, your shares will not be voted unless you attend the Annual Meeting and cast your vote. If you are a beneficial owner of shares, they may be voted with respect to certain routine matters, even if you do not provide voting instructions on your instruction form. Under the rules of the New York Stock

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Exchange, the election of directors and the ratification of PwC as our independent registered public accounting firm for 2008 are considered routine matters for which brokerage firms may vote without specific instructions. However, if Oliver Press pursues their contested solicitation, your broker may not be able to vote on your behalf without your specific instructions. Due to this possibility, we are urging you to send in the BLUE proxy card to ensure that your vote is counted.

If you hold shares through the Fund and voting instructions for the shares attributable to your account are not received by 11:59 p.m. Eastern Time on April 29, 2008, these shares will be voted in the same proportion as the voting instructions received on a timely basis from other participants in the 401(k) Plan.

WHO MAY ATTEND THE MEETING?

The Annual Meeting is open only to persons who owned Common Stock as of the Record Date. To attend the meeting, you will need to bring valid picture identification and an admission ticket, proxy card or other proof of your ownership of Common Stock. If you are a registered shareholder and you received your proxy materials by mail, your admission ticket is attached to your proxy card. If you are a registered shareholder and you received your proxy materials electronically via the Internet, you will need to click on “I Will Attend Meeting” after you vote and we will be able to verify your ownership of Common Stock electronically at the Annual Meeting. If you are a beneficial owner of shares, you will need to contact your bank, broker or other registered shareholder to request a legal proxy, which will serve as your admission ticket.

HOW DO I GET TO THE MEETING?

Directions to the Annual Meeting at our offices at One American Row in Hartford are available on our web site, www.phoenixwm.com in the Investor Relations section.

CAN I LISTEN TO THE MEETING VIA THE INTERNET?

You can listen to the Annual Meeting live over our web site, www.phoenixwm.com in the Investor Relations section, by clicking on the Annual Meeting icon. A replay will be available on the web site until May 16, 2008.

MAY SHAREHOLDERS ASK QUESTIONS AT THE MEETING?

Yes. Representatives of the Company will answer shareholders’ questions of general interest at the end of the meeting.

HOW MANY VOTES MUST BE PRESENT TO CONDUCT BUSINESS AT THE ANNUAL MEETING?

In order for us to conduct our Annual Meeting, holders of one-third of our shares of Common Stock outstanding as of the Record Date must be present at the meeting in person or by proxy. This is referred to as a quorum. You are counted as present at the meeting if you attend the meeting and vote in person or if you vote by proxy via the Internet, telephone or mail. Abstentions and broker non-votes will be counted for purposes of establishing a quorum at the meeting. A “broker non-vote” occurs when a bank, broker or other registered shareholder holding shares for a beneficial owner does not vote on a particular proposal because the holder does not have discretionary voting power for that item and has not received instructions from the beneficial owner.

HOW MANY VOTES ARE NEEDED TO APPROVE THE COMPANY’S PROPOSALS?

Proposal 1: Election of Directors

Directors will be elected by a plurality of votes cast at the Annual Meeting, meaning the five nominees receiving the most votes will be elected. Only votes cast FOR a nominee will be counted. Shares not voted will have no impact on the election of directors. Each proxy received will be voted FOR ALL of the nominees for director, unless the proxy is otherwise marked. Instructions on the accompanying BLUE proxy card to withhold authority to vote for one or more nominees will result in those nominees receiving fewer votes but will not count as a vote against the nominees. Abstentions and broker non-votes will have no effect on the director election since only votes FOR a nominee will be counted.

Proposal 2: Ratification of the Appointment of our Independent Registered Public Accounting Firm

Ratification of the appointment of PwC as our independent registered public accounting firm for 2008 requires that a majority of the votes represented at the Annual Meeting be voted FOR the proposal. If you vote to ABSTAIN with respect to

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this proposal, your shares will be counted as present for purposes of establishing a quorum, but the abstention will have the same effect as a vote AGAINST the proposal.

WHAT SHOULD I DO IF I RECEIVE A PROXY CARD FROM OLIVER PRESS?

Oliver Press may solicit proxies. Our Board unanimously recommends that you do not sign or return any proxy card furnished by Oliver Press. Even a vote against Oliver Press’s nominees on their proxy card will cancel any previous proxy you may have given to the Company. If you have already provided a proxy card to Oliver Press, you may revoke it at any time and provide your support to the Board’s five nominees by signing, dating and returning the enclosed BLUE proxy card in the postage-prepaid envelope provided. Only your latest dated proxy will be counted at the Annual Meeting.

WHY DID MY FAMILY RECEIVE ONLY ONE COPY OF THIS PROXY STATEMENT?

Unless separate copies were previously requested, we sent only one copy of this Proxy Statement and the annual report to households in which multiple shareholders share the same address, a procedure called “householding”. This reduces our printing costs and benefits the environment. If you would like to receive separate copies of this Proxy Statement and the annual report or wish to receive separate copies of these documents in the future, please contact Phoenix Shareholder Services by calling 800.490.4258, writing to The Phoenix Companies, Inc., c/o BNY Mellon Shareowner Services, P.O. Box 358015, Pittsburgh, Pennsylvania 15258, or going to the BNY Mellon Shareowner Services web site, www.bny.mellon.com/shareowner/isd.

If you are eligible for householding, or hold stock in more than one account and wish to receive only a single copy of Proxy Statements and annual reports for your household, please contact Phoenix Shareholder Services as indicated above.

HOW MANY DIRECTORS DO YOU HAVE? HOW MANY ARE INDEPENDENT?

Our Board currently has 13 members, all of whom are independent under the New York Stock Exchange rules, except the Chairman, Mrs. Dona D. Young, who is also our President and Chief Executive Officer.

WHERE CAN I LEARN MORE ABOUT THE BOARD’S ACTIVITIES?

Please turn to Corporate Governance on page 11.

WHO PAYS FOR THE SOLICITATION OF PROXIES AND HOW ARE THEY SOLICITED?

The Company pays the cost of the solicitation of these proxies. These costs may include the cost of preparing, printing and mailing this Proxy Statement and any other information we sent to shareholders. Also, the Company has retained Morrow and Co., LLC (“Morrow”) to aid in soliciting proxies for a fee estimated at a cost of $250,000, plus expenses. The Company also has agreed to indemnify Morrow against certain liabilities including liabilities arising under the federal securities laws. Morrow has informed the Company that it intends to employ approximately 100 persons to solicit proxies. In addition, brokers and other custodians, nominees and fiduciaries will be requested to forward soliciting material to their principals and obtain their voting instructions, and we will reimburse them for the expense of doing so. Our expenses related to the solicitation (in excess of those normally spent for an annual meeting with an uncontested director election and excluding salaries and wages of our regular employees and officers) are currently expected to be approximately $7,000,000 of which approximately $700,000 has been spent to date.

In addition to mailing proxies, directors, officers and regular employees of the Company, acting on its behalf, may solicit proxies by telephone, fax, personal interview or by postings to our web site. We will not pay directors, officers and regular employees any additional compensation for their efforts in soliciting proxies. Appendix I sets forth certain information relating to our directors, officers and certain employees who are “participants” in our solicitation of proxies for the Annual Meeting under the rules of the Securities and Exchange Commission.

WHO CAN ANSWER MY QUESTIONS?

If you have questions about your shares or status as a shareholder, please call Phoenix Shareholder Services at 800.490.4258. If you have questions about this Proxy Statement or the Annual Meeting, please call Phoenix Investor Relations at 860.403.7100.

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If you have any questions regarding or need assistance voting, please contact Morrow, our proxy solicitor:

Shareholders Call Toll Free: 800.414.4313

Banks and Brokers Call Collect: 203.658.9400

HOW CAN I GET ELECTRONIC DELIVERY OF FUTURE ANNUAL MEETING MATERIALS?

If you are a registered shareholder, simply log on to the web site www.bnymellon.com/shareowner/isd and follow the instructions to enroll in MLink.

Utilizing MLink for delivery of shareholder communications saves the Company a significant portion of the costs associated with printing and mailing. We also believe that registered shareholders will find this service convenient and useful. MLink allows you to view and print your annual meeting materials and provides on-line access to your shareholder communications 24 hours a day, seven days a week within a secure, customized mailbox. If you register for MLink and electronic delivery, we will usually not send you paper copies of shareholder materials unless you request them, although we may choose to send one or more items to you in paper form despite your consent to receive them electronically. If you register for MLink, you will be responsible for your usual Internet charges (e.g., online fees) in connection with your registration. Your consent will be effective until you revoke it by terminating your registration at the web site www.bnymellon.com/shareowner/isd.

If you are a beneficial owner of shares, please contact your bank or broker to learn how to get electronic delivery.

HOW CAN I GET COPIES OF THE DOCUMENTS REFERENCED IN THIS PROXY?

If you have received a copy of this proxy by mail or electronically, you may receive a copy of any document referenced or incorporated by reference herein without charge. We will respond to any such request within one business day of our receipt of the request and provide the documentation by first class mail or an equally prompt means of delivery. If you would like to make such a request, please contact our Corporate Secretary by e-mail to corporate.secretary@phoenixwm.com or by mail to:

Corporate Secretary

The Phoenix Companies, Inc.

One American Row

P.O. Box 5056

Hartford, Connecticut 06102-5056

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE 2008 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 2, 2008.

The Company’s Proxy Statement for the 2008 Annual Meeting of Shareholders and the Company’s Annual Report

to Shareholders for the fiscal year ended December 31, 2007 are available at http:///bnymellon.mobular.net/bnymellon/pnx.

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PROPOSAL 1: ELECTION OF DIRECTORS

Background

Our Board of Directors (our “Board”) consists of three classes of directors, the members of which were each elected to three-year terms:

It is our policy that all of our directors should attend our annual meetings of shareholders if reasonably possible. All 13 of our directors attended the 2007 Annual Meeting of Shareholders.

Directors for Election

At our Annual Meeting on May 2, 2008, five directors will be elected to hold office for three years. The nominees listed below, and supported by the Board, are all current directors. Your BLUE proxy card will be used to vote for the election of all of the Board’s five nominees listed below unless you withhold the authority to do so when you send in your proxy. If any of the nominees becomes unable or unwilling to accept nomination or election, it is intended that, in the absence of contrary specifications in a proxy, each proxy will be voted for the balance of those named and for a substitute nominee or nominees. We know of no reason to anticipate such an occurrence. All nominees have consented to be named as nominees and to serve as directors if elected.

The following persons are nominees for election as directors of the Company for terms to expire in 2011; the Board recommends that shareholders vote FOR ALL of them:

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Please note that Oliver Press has notified us that it intends to solicit proxies for their own slate of three nominees for election to the Board at the Annual Meeting, in opposition to the five nominees that the Board has selected and who are listed in the preceding table under Directors for Election. The process by which our Governance Committee and the Board identifies, evaluates and selects potential directors nominees involves a variety of factors and criteria, all of which are described under Director Nomination Process on page 14. As with all nominees, including the five Board’s nominees listed above, the Governance Committee considered and evaluated those persons for whom Oliver Press has informed us that it intended to nominate and solicit proxies. In addition to reviewing the information provided by Oliver Press with respect to those persons, certain of our independent directors, as well as members of our Senior Management, each separately met with representatives of Oliver Press, including certain of its proposed nominees. As a result of this thorough process, our Board has decided not to endorse Oliver Press’s nominees. Our Board unanimously recommends a vote FOR ALL of our Board’s nominees on the enclosed BLUE proxy card and urges you not to sign or return any proxy card that you may receive from Oliver Press. Even if you have previously signed any proxy card sent to you by Oliver Press, you can revoke it.

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Continuing Directors

The following directors, whose terms expire in 2009, will continue to serve as directors:

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The following directors, whose terms expire in 2010, will continue to serve as directors:

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PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

On November 7, 2007, the Audit Committee (the “Audit Committee”) of our Board of Directors (the “Board”), subject to ratification by the shareholders, appointed PricewaterhouseCoopers LLP (“PwC”), an independent registered public accounting firm, to audit and report on our consolidated financial statements for the fiscal year ending December 31, 2008. We have been advised that representatives of PwC will attend the Annual Meeting. They will have the opportunity to make a statement and to respond to questions from shareholders.

THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF PwC AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2008.

Fees Incurred for Services Performed by PwC

Our Board has a policy to assure the independence of its independent registered public accounting firm. Prior to each fiscal year, the Audit Committee receives a written report from PwC describing the elements expected to be performed in the course of its audit of the Company’s financial statements for the coming year. The Audit Committee may approve the scope and fees not only for the proposed audit, but also for various recurring audit-related services. For services of its independent registered public accounting firm that are neither audit-related nor recurring, a Company vice president may submit in writing a request to the Company’s internal auditor, accompanied by approval of the Company’s chief financial officer or chief accounting officer. The Audit Committee may pre-approve the requested service as long as it is not a prohibited non-audit service and the performance of such service would be consistent with all applicable rules on auditor independence. The Audit Committee may also delegate pre-approval authority to one or more of its members.

All services performed for us by PwC in 2007 and 2006 were pre-approved by the Audit Committee pursuant to the policy described above.

The services performed by PwC in 2007 and 2006 are described below. PwC does not provide any services to us prohibited under applicable laws and regulations. To the extent PwC provides us with consulting services, those services are closely monitored and controlled by both management and the Audit Committee to ensure that their nature and extent do not interfere with PwC’s independence. The independence of PwC is also considered annually by our Board.

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OTHER MATTERS

We are not aware of any matters, other than those referred to in this Proxy Statement, which will be presented at the Annual Meeting of Shareholders. If any other appropriate business is properly presented at the Annual Meeting of Shareholders, the proxies named in the accompanying form of proxy will vote the proxies in accordance with their best judgment in the interests of the Company.

CORPORATE GOVERNANCE

Our Board of Directors (the “Board”) is responsible for providing effective governance over the Company’s affairs. Our corporate governance practices are designed to align the interests of the Board and management with those of shareholders and to promote honesty and integrity. Highlights of our corporate governance practices are described below. More information about corporate governance may be found on our web site at www.phoenixwm.com, in the Investor Relations section, under the heading “Corporate Governance”.

Our Corporate Governance Principles, which outline our corporate governance policies and procedures, embody many of our long-standing practices, and incorporate our current corporate governance best practices, are available on our web site identified above. Copies may also be obtained by contacting our Corporate Secretary at one of the addresses listed under Shareholder and Interested Party Communications on page 16. Portions of these Corporate Governance Principles are discussed below.

Board Committee Membership and Meetings

There are currently five committees of the Board that perform its essential functions. Three of these are standing committees: the Audit Committee, the Compensation Committee and the Executive Committee (the “Audit Committee”, “Compensation Committee” and “Executive Committee”, respectively). The Board has created two additional committees by resolution: the Finance Committee and the Governance Committee (the “Finance Committee” and “Governance Committee”, respectively). Only directors who are not current or former employees of the Company or its affiliates (“Non-employee Directors”) may be members of the Audit Committee, the Compensation Committee or the Governance Committee. Members of these three committees must also meet certain other independence standards, including those of the New York Stock Exchange (“NYSE”). The Audit, Compensation and Governance Committees have authority to retain advisors to help fulfill their responsibilities. It is our practice that, except for the Executive Committee, only Non-employee Directors may be members of the Board committees. Our lead director serves as the chair of the Executive Committee.

Each director of the Company also serves, without additional compensation, as a member of the board of directors of the Company’s subsidiary, Phoenix Life Insurance Company (“Phoenix Life”). Phoenix Life has established the Policyholder Affairs Committee, the responsibilities of which include oversight of the closed block of insurance contracts created when Phoenix Life demutualized in 2001. The members of this committee are also members of the Board.

Committees of the Board

The current Board committees, their responsibilities, committee membership and the number of meetings of each committee in 2007 follow. The descriptions are merely summaries; each is subject to additional details and qualifications imposed by applicable law, the Company’s certificate of incorporation, the committees’ respective charters and resolutions of our Board. The Audit Committee, Compensation Committee, Finance Committee and Governance Committee charters may be found on our web site at www.phoenixwm.com, in the Investor Relations section, under the heading “Corporate Governance”. Copies may also be obtained by contacting our Corporate Secretary at one of the addresses listed under Shareholder and Interested Party Communications on page 16. The chair of each committee is listed with an asterisk.

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Executive Sessions of the Board

As provided in the Corporate Governance Principles, the non-employee directors of the Company meet in executive session at each regular Board meeting. The non-employee chair of the Executive Committee of the Board, currently Mr. Peter C. Browning, presides at these meetings.

Board Attendance and Annual Meeting Policy

Directors are expected to attend our Annual Meetings of Shareholders, Board meetings and meetings of the committees on which they serve. In 2007, there were five meetings of the Board. Each of the directors attended at least 75% of the meetings of the Board and committees on which he or she served. In addition, all members of the Board attended the 2007 Annual Meeting of Shareholders.

Director Nomination Process

The Governance Committee is responsible for proposing qualified candidates to the Board. In considering candidates for nomination to the Board, the Governance Committee seeks individuals with strong intellectual ability, breadth of experience, demonstrated professional achievement, diverse backgrounds and the highest integrity. Prospective directors should also be able and willing to devote significant attention to the Company’s needs through regular attendance at meetings, preparation for meetings and availability for regular consultation between meetings.

The Governance Committee may also consider particular areas of expertise with respect to a given vacancy either because of needs arising from the retirement of a director or those arising out of changes in our business focus, our industry or the regulatory environment. Except in special circumstances, the Governance Committee generally will not recommend an increase in the number of directors beyond the current level of 12 independent directors, plus our chief executive officer.

The Governance Committee looks to its members and to other directors for recommendations for new directors. It may also retain a search firm and will consider individuals recommended by shareholders. Shareholders should submit their recommendation as outlined under Shareholder and Interested Party Communications on page 16. If a vacancy on the Board exists or is anticipated, the Governance Committee will evaluate all proposed nominees in light of the standards above, as well as others deemed relevant. Following its evaluation of all proposed nominees and consultation with our chief executive officer, the Governance Committee will recommend to the Board the individual(s) it considers most qualified to be nominated to run for election to the Board. The Board will make the final determination as to the individual(s) who will be nominated to run for election.

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Code of Conduct

We have adopted a written Code of Conduct which applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. We are committed to the highest standards of ethical and professional conduct and the Code of Conduct provides guidance on how to uphold these standards. The Code of Conduct is available on our web site at www.phoenixwm.com, in the Investor Relations section, under the heading “Corporate Governance”. We intend to post any amendments to, or waivers of, the Code of Conduct applicable to our principal executive officer, principal financial officer or principal accounting officer on our web site. You may request a printed copy of the Code of Conduct by writing to the Corporate Secretary at either of the addresses listed under Shareholder and Interested Party Communications on page 16.

Director Independence

A majority of the directors of the Board must meet the criteria for independence established by the Board in accordance with the NYSE rules. Under these rules, a director will not qualify as independent unless the Board affirmatively determines that the director has no material relationship with the Company. As permitted by the NYSE rules, the Governance Committee has recommended, and the Board has adopted, a set of categorical standards (the “Categorical Independence Standards”) to assist the Board in making independence determinations. These Categorical Independence Standards may be found on our web site at www.phoenixwm.com, in the Investor Relations section, under the heading “Corporate Governance”.

In January 2008, the Governance Committee and the Board evaluated the independence of each director other than our chairman, who is a Company employee, in accordance with the provisions of the Categorical Independence Standards and the NYSE rules. As a result of this evaluation, the Governance Committee has recommended, and the Board has affirmatively determined, that all members of the Board other than the chairman, including all directors standing for election, are independent under both the Categorical Independence Standards and the NYSE rules.

Audit Committee Financial Expert

Ms. Jean S. Blackwell, the Audit Committee’s chair, was determined by the Board, based on her education and experience, to be an audit committee financial expert, as defined by applicable federal securities law. Ms. Blackwell was determined by the Board to be independent, as described above in Director Independence.

Policy Regarding Transactions with Related Persons

In November 2006, the Board adopted a written Policy Regarding Transactions with Related Persons (the “Related Person Policy”). Pursuant to the Related Person Policy, any Related Person (as defined by Item 404(a) of Regulation S-K) must promptly report to the Company’s General Counsel any direct or indirect material interest in any transaction that is reportable by the Company in its Proxy Statement pursuant to Item 404(a) of Regulation S-K (each, a “Related Person Transaction”). Pursuant to the Related Person Policy, no Related Person Transaction may be consummated or shall continue without the approval or ratification of the Audit Committee and any director interested in a Related Person Transaction shall recuse himself or herself from any such vote.

Transactions with Related Persons

State Farm Mutual Automobile Insurance Company (“State Farm”) beneficially owns more than 5% of our outstanding Common Stock. In 2007, our subsidiaries incurred total compensation of $62.3 million to entities which were either subsidiaries of State Farm or owned by State Farm employees, for the sale of our insurance and annuity products. During 2007, we made payments of $60.8 million to State Farm entities for this compensation.

Director Sanford Cloud, Jr. is the non-executive chair and a member of the limited liability company that serves as the general partner of Ironwood Mezzanine Fund LP (“Ironwood”), a mezzanine debt fund. For his services as non-executive chair of Ironwood, Mr. Cloud is paid an annual fee of $25,000. As a member of Ironwood, he also has an indirect equity interest in Ironwood. One of the Company’s subsidiaries is an investor in, and limited partner of, Ironwood. During 2007, the Company’s subsidiary did not fund any pre-existing commitments to Ironwood; however, the Company’s subsidiary did receive returns on sums previously invested in the amount of $1,126,918.

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All Related Person Transactions have been approved or ratified by the Audit Committee pursuant to the Related Person Policy. The Board has determined that Mr. Cloud is independent under the Categorical Independence Standards and the NYSE rules.

Shareholder and Interested Party Communications

If you would like to nominate an individual for election to the Board or submit a shareholder proposal for the 2009 Annual Meeting of Shareholders, we must receive your proposal at our executive offices in Hartford, Connecticut no later than November 21, 2008. Proposals for inclusion in the Proxy Statement must comply with the requirements of the Securities Exchange Act of 1934, as amended, including Rule 14a-8, as well as with our bylaws. A copy of our bylaws may be obtained from our Corporate Secretary at one of the addresses below.

Proposals should be addressed by e-mail to corporate.secretary@phoenixwm.com or by mail to:

Corporate Secretary

The Phoenix Companies, Inc.

One American Row

P.O. Box 5056

Hartford, Connecticut 06102-5056

If you wish to present a matter for action at the 2009 Annual Meeting of Shareholders, but choose not to do so under Rule 14a-8, you must deliver a notice containing the information required by the Company’s bylaws to our Corporate Secretary at one of the addresses above on or before January 30, 2009, but no earlier than January 2, 2009.

Shareholders and other interested parties who wish to communicate with any director(s), committee(s), the presiding director at meetings of non-management directors of the Company, the non-management directors as a group or the entire Board, should send such communication to the relevant director, committee, or group of directors in care of the Corporate Secretary at the mailing address above or to the e-mail address listed above, indicating the director, committee, or group of directors with which they wish to communicate. If shareholders or other interested parties making such communications want their identity to be kept confidential, they should so indicate in their letter or e-mail. The Corporate Secretary will promptly forward all communications to the designated director.

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AUDIT COMMITTEE CHARTER AND REPORT

Audit Committee Charter

The Audit Committee (the “Audit Committee”) of the Board of Directors (the “Board”) reports to the Board and is responsible for overseeing and monitoring the Company’s financial accounting and reporting process, the system of internal controls established by management and the audit process of the Company. The Board adopted a written charter for the Audit Committee in 2001. Since then, the Board has amended the charter to conform to new requirements under applicable law, Securities and Exchange Commission (“SEC”) regulations and the New York Stock Exchange listing standards. A copy of this amended charter may be found on our web site, www.phoenixwm.com, in the Investor Relations section, under the heading “Corporate Governance”. The charter sets out the responsibilities, authority and specific duties of the Audit Committee. It also specifies the structure and membership requirements of the committee, as well as the relationship of the Audit Committee to the Company’s independent registered public accounting firm, internal auditor and management.

Audit Committee Report

The Audit Committee has submitted the following report for inclusion in this Proxy Statement:

The Audit Committee oversees the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for the preparation, presentation and integrity of the Company’s financial statements and for the Company’s reporting process, including its systems of internal controls. PricewaterhouseCoopers LLP (“PwC”) is the Company’s independent registered public accounting firm, responsible for auditing the Company’s annual financial statements and performing quarterly reviews. In fulfilling its responsibilities, the Audit Committee relies, without independent verification, on the information provided by the Company’s management and by PwC.

In fulfilling its oversight responsibilities, the Audit Committee reviewed and has met and discussed with management and with PwC, the Company’s audited financial statements for the year ended December 31, 2007. The Audit Committee also discussed with PwC the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU Section 380), as adopted by the Public Company Accounting Oversight Board (the “PCAOB”) in Rule 3200T, including:

Additionally, the Audit Committee met throughout the year with PwC, the Company’s chief financial officer and the Company’s internal auditor to discuss the results of their examinations and evaluations of the Company’s internal controls and of the overall quality, not just the acceptability, of the Company’s financial reporting process. The meetings with PwC occurred both with and without members of management present; the meetings with the chief financial officer and the internal auditor occurred both with and without other members of management present.

The Audit Committee has received from PwC the written disclosure and the letter required by Independence Standards Board Standard No. 1 (Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees), as adopted by the PCAOB in Rule 3600T, and discussed with PwC its independence from the Company. PwC has confirmed in its letter that, in its professional judgment, it is independent of the Company within the meaning of the federal securities laws. The Audit Committee has considered whether provision of the non-audit services rendered by PwC during the Company’s most recent fiscal year is compatible with maintaining the independence of such auditors and deemed that it was.

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Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board, and the Board has approved, that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, and be filed with the SEC. The Audit Committee has also approved, subject to shareholder ratification, the selection of PwC as the Company’s independent registered public accounting firm for the fiscal year 2008.

THE AUDIT COMMITTEE

Jean S. Blackwell, Chair

Sal H. Alfiero

Martin N. Baily

Arthur P. Byrne

John H. Forsgren, Jr.

Thomas S. Johnson

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COMPENSATION COMMITTEE CHARTER, PROCESSES, INTERLOCKS AND REPORT

Compensation Committee Charter

The Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) consists of independent members of the Board, and meets at scheduled times during the year. Its purpose is to assist the Board in fulfilling its responsibility to maximize long-term return to our shareholders by ensuring that directors and employees are compensated according to the Company’s compensation philosophies, objectives and policies. The Compensation Committee’s responsibilities, summarized on page 12 of this Proxy Statement, are explicitly set forth within the terms of its charter, and are reviewed by the Board at least once a year. A copy of this charter may be found on our web site, www.phoenixwm.com, in the Investor Relations section, under the heading “Corporate Governance”. The charter sets out the responsibilities, authority and specific duties of the Compensation Committee. It also specifies the structure and membership requirements for the Compensation Committee.

Processes and Procedures Related to Executive and Director Compensation

Pursuant to its charter, the Compensation Committee has the following authority and responsibilities with regard to determination and consideration of executive and director compensation:

Annually, the chief executive officer (“CEO”) makes recommendations to the Compensation Committee with regard to base pay, target annual incentives, and target long-term incentives (collectively referred to as “Direct Compensation”) for:

The Compensation Committee is responsible for reviewing the CEO’s recommendations and making final decisions on Direct Compensation based on the Company’s compensation philosophy. See Determining Direct Compensation Levels on page 24.

With regard to the CEO, the Compensation Committee is responsible for evaluating her performance and making compensation recommendations to the Board for its approval.

The Compensation Committee has delegated the following authority to the CEO, except as to Section 16 officers and key executives (as defined in the Compensation Committee charter):

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The Company’s legal and human resources executives support the Compensation Committee in its work. These executives recommend, but do not determine, the amount and form of executive and director compensation. During 2007, the Compensation Committee and the Board each had direct access to independent compensation consultants for advice on executive compensation matters. See Role of Compensation Consultants on page 24. The Compensation Committee has the sole authority to retain and terminate any such compensation consultant used to assist it in the evaluation of director, CEO or senior executive compensation. The Compensation Committee also has the sole authority to approve the consultant’s fees and other retention terms and to monitor the consultant’s objectivity and independence when rendering advice to the Compensation Committee. The Compensation Committee used these consultants frequently during 2007.

Compensation Committee Interlocks and Insider Participation

Compensation Committee member Sanford Cloud, Jr. is the non-executive chair and a member of the limited liability company that serves as the general partner of Ironwood Mezzanine Fund LP (“Ironwood”), a mezzanine debt fund. For his services as non-executive chair of Ironwood, Mr. Cloud is paid an annual fee of $25,000. As a member of Ironwood, he also has an indirect equity interest in Ironwood. One of the Company’s subsidiaries is an investor in, and limited partner of, Ironwood. In 2007, the Company’s subsidiary did not fund any pre-existing commitments to Ironwood; however, the Company’s subsidiary did receive returns on sums previously invested in the amount of $1,126,918.

This transaction was ratified by the Audit Committee pursuant to the Company’s Related Person Policy. The Board has determined that Mr. Cloud is independent under the Categorical Independence Standards that were adopted by the Board and the New York Stock Exchange rules.

Compensation Committee Report

The Compensation Committee has submitted the following report for inclusion in this Proxy Statement:

Our Committee has reviewed and discussed Compensation Discussion and Analysis (which follows this report) contained in this Proxy Statement with management. Based on our review of, and the discussions with management with respect to, Compensation Discussion and Analysis, we recommended to the Board that Compensation Discussion and Analysis be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 for filing with the Securities and Exchange Commission.

The foregoing report is provided by the following directors, who constitute the Compensation Committee:

THE COMPENSATION COMMITTEE

Thomas S. Johnson, Chair

Martin N. Baily

Jean S. Blackwell

Peter C. Browning

Arthur P. Byrne

Sanford Cloud, Jr.

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COMPENSATION OF EXECUTIVE OFFICERS

The following compensation discussion contains statements regarding future individual and Company performance targets and goals. These targets and goals are disclosed in the limited context of our discussion regarding the compensation of our executive officers in this Proxy Statement and should not be interpreted, or relied upon, as statements of our expectations or estimates of results or other guidance. We specifically caution our shareholders not to apply these statements to other contexts.

Compensation Discussion and Analysis

Overview

This Compensation Discussion and Analysis sets forth our compensation policies, programs and practices for:

The above are collectively referred to as “Senior Management”.

All compensation actions for our NEOs are approved by the Compensation Committee and, for the CEO, the Board of Directors (the “Board”).

Our executive compensation program is designed to:

These design considerations are supported by:

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Overall Objectives of Executive Compensation Programs

Our executive compensation program is a critical component of our performance culture. Closely aligned with our business strategy, the program seeks to motivate and reward strong financial performance in order to position the Company for continued growth. It is designed to achieve the following objectives:

Elements of Compensation

The executive compensation program consists of base pay, annual incentives and long-term incentives (collectively referred to as “Direct Compensation”), broad-based benefit plans available to all employees, stock awards to recognize special circumstances, share ownership and retention guidelines, a supplemental retirement plan, deferred compensation, perquisites, executive severance and change-in-control arrangements. Additionally, the CEO has an employment agreement with the Company.

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A description and the objective of each compensation element are summarized in the table that follows.

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Role of Compensation Consultants

During 2007, we continued our practice of using two independent compensation consultants for executive compensation matters, one supporting management and the other supporting the Compensation Committee and the Board. Management’s consultant was Semler Brossy Consulting Group, LLC (“Semler Brossy”), and the consultant for the Compensation Committee and the Board was F.W. Cook & Co., Inc. The role of each consultant in assisting management and the Compensation Committee in 2007 executive compensation decisions is summarized below.

Consistent with our policy, management met with each consultant at least once each quarter in 2007 on our business developments. The chair of the Compensation Committee spoke privately with each consultant at least twice in 2007, and each consultant addressed the Compensation Committee in executive session at least once in 2007.

In January 2008, management and the Compensation Committee reviewed our use of consultants, the services provided by each and their respective fees. As a result of this review, the Compensation Committee determined that using one consultant for all executive compensation matters would eliminate redundancies with respect to services and fees that exist when two consultants are retained. The Compensation Committee also determined that Semler Brossy would be retained as the sole executive compensation consultant, reporting directly to the Compensation Committee. Going forward, the Compensation Committee will be responsible for engaging the consultant, and the chair of the Compensation Committee will oversee all of the consultant’s work with assistance from management. Management will no longer retain its own consultant for executive compensation matters and Semler Brossy will not provide any consulting services to the Company without prior approval by the Compensation Committee.

Determining Direct Compensation Levels

The Compensation Committee determines Direct Compensation for each member of Senior Management by:

These steps are described in the four subsections that follow.

Evaluating Strategic Value

Each year, the CEO evaluates each member of Senior Management with respect to his or her capacity to influence our business strategy and financial results. This analysis is conducted so that the compensation opportunity for each role, expressed as a target percentile of market as described in Aligning Compensation with Strategic Value in the subsection that

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follows, is based on strategic value, which is our analysis of criticality to the execution of our business objectives. The first step in this strategic value analysis is an assessment of the degree to which each position enables us to meet our financial targets and strategic objectives. The second step is an evaluation of each executive’s leadership abilities, business acumen, general management experience, degree of employment retention risk, and the impact of these factors on an individual’s ability to enable us to meet our financial targets and strategic objectives. This analysis is presented to the Compensation Committee for its approval. The Compensation Committee also makes a similar evaluation of the CEO’s role for its recommendation to the Board.

Aligning Compensation with Strategic Value

Based on the strategic value assessments, a target percentile of market compensation levels is established for each member of Senior Management. This percentile represents the market point to which Direct Compensation is compared. The compensation for roles with higher strategic value will be targeted at higher market percentiles than roles with lower strategic value. For 2007, based on the strategic value assessments, Direct Compensation for Senior Management was targeted between the 50^th and 75^th percentiles of the size-adjusted market levels described in Identifying Market Value below. This approximates target pay between the 25^th and 50^th percentiles when the market levels are not size-adjusted. We target pay at this level because we:

We generally consider an executive’s target Direct Compensation to be “at” the target percentile if it is within 10% of the target percentile for that position. Currently, the CEO’s target Direct Compensation is below her target percentile because the Board has set her target percentile as a long-term goal to be achieved over time as the Company’s return to shareholders approaches levels comparable to our peers. The target Direct Compensation for our CFO and head of asset management is below the target percentiles for these positions because both executives are relatively new to their roles. We would expect their compensation opportunity to increase over time as they become more seasoned in their roles. The target Direct Compensation for our chief investment officer is at the target percentile, reflecting this executive’s tenure and performance in the role. The target Direct Compensation for our head of life and annuity is above the target percentile for this role, reflecting the relative contributions this executive and the life and annuity line of business make to the Company’s financial results and the criticality of this business to the Company’s growth strategy.

Identifying Market Value

The market value of each Senior Management position is determined by market comparison using the target percentile established by the strategic value assessment described above. For market comparisons, we consider appropriate groups of life insurance and asset management companies. In doing so, we rely on surveys conducted by independent, third-party organizations. Administration of these surveys by objective, external compensation professionals promotes consistency in evaluating the compensation levels of Senior Management against compensation levels afforded executives at companies participating in these surveys.

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For our life insurance and corporate positions, we use the Diversified Insurance Study of Executive Compensation (“DIS”), which reports compensation practices for a group of approximately 30 insurance organizations. We believe this survey provides the most appropriate market data for comparing our compensation practices for our life insurance and corporate positions since the companies participating in the survey are in our industry and have positions of similar scope and responsibility. The market value of each NEO position, except for the head of asset management, is determined from DIS. In recognition of our smaller size relative to many of the companies in DIS, we typically use a subset of the surveyed companies when determining market value. In 2007, for each of our NEOs, except the head of asset management, we used a subset of the DIS survey by taking into account only the following 12 companies, all with total assets below $75 billion:

As a secondary reference, we also look at the 25^th and 50^th percentiles of the full DIS survey as a proxy for the 50^th and 75^th percentiles of companies closer to our size.

In evaluating 2007 compensation for our life insurance and corporate positions, the following compensation elements were analyzed:

For our head of asset management position, we use the McLagan Partner Management and Administration Survey—U.S. (“McLagan”), which reports compensation practices for a group of approximately 175 investment management companies and advisory firms, insurance companies and banks. We believe this survey provides the most appropriate market data for comparing our compensation practices for our asset management positions since the companies participating in McLagan are all in the asset management industry and have positions of similar scope and responsibility. Sixty-five of these companies have a position comparable to our head of asset management. In recognition of our smaller size relative to many of the companies in McLagan, we typically use a subset of the surveyed companies when determining market value. In 2007, for the head of asset management, we used the 25^th and 50^th percentiles of the full McLagan survey for each compensation element as a proxy for the 50^th and 75^th percentiles of peer companies closer to our size.

In evaluating 2007 compensation for our head of asset management position, the following compensation elements were analyzed:

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When referring to market levels elsewhere in this Compensation Discussion and Analysis, we are referring to the applicable size-adjusted survey subsets described in the preceding paragraphs.

Determining Mix of Direct Compensation Elements

Base Salary and Incentive Pay Mix: One of the central beliefs on which our compensation philosophy is based is that a greater percentage of compensation should be at risk for the executives who bear higher levels of responsibility for our performance. As such, we believe the majority of Senior Management compensation should come from incentive pay. We generally target base salary between 25% and 35% of total Direct Compensation, and incentive pay between 65% and 75% of total Direct Compensation. We intend to weight incentive pay at the higher end of this range (and base salary at the lower end of this range) for the CEO, head of life and annuity, and head of asset management because these roles are primarily accountable for our line of business performance.

We will, at times, deviate from these guidelines to compete with market level mixes, address retention risks, and reflect changes in our business strategy. Currently, each NEO’s base salary and target incentive pay mix is substantially at the desired guidelines reflected above.

Annual and Long-Term Incentive Mix: Our strategic plan is designed to improve our return on equity and line of business earnings substantially each year to create long-term value for our shareholders. For this reason, the target mix between annual and long-term incentives for our CEO is significantly weighted in favor of long-term results to motivate continued focus on long-term goal planning and achievement. The target mix for the other NEOs is intended to be more balanced. Except for the chief investment officer, each NEO’s current incentive opportunity is equally weighted between annual incentives and long-term incentives. The chief investment officer’s current mix is weighted more to annual incentives, consistent with market practice for this role as reported in previous DIS survey results.

Target annual and long-term incentive opportunities for 2007 are shown in the table below.

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Incentive Compensation

Annual Incentives

Annual incentives provide Senior Management with compensation opportunities that promote and reward the achievement of annual performance objectives. Under our annual incentive plan, members of Senior Management are eligible for incentive awards based upon the achievement of pre-determined Company financial goals approved by the Compensation Committee, departmental performance objectives approved by the CEO, and individual performance objectives.

The financial goals approved by the Compensation Committee determine the size of the annual incentive pool based on actual results versus the goals. These financial goals (threshold, target, and maximum) are established based on the strategic and financial plans adopted by the Board. The Compensation Committee determines these goals based on an assessment of the degree of difficulty and the minimum acceptable performance results. Threshold financial goals are generally set to require performance above prior year results so that payouts are limited if performance does not improve over time. Target financial goals are set at an aggressive but achievable level. Maximum financial goals are set to reward performance that is significantly better than target performance.

In 2007, the Compensation Committee changed the financial measure for determining the funding of the pool under the annual incentive plan from return on equity only (“ROE” as defined in note 1 to the 2007 Annual Incentive Pool Funding table that follows this paragraph) to a combination of ROE and line of business earnings growth, as measured by growth in pre-tax operating income for our life and annuity line of business (“Life and Annuity”) (“operating income” as defined in note 2 to the 2007 Annual Incentive Pool Funding table that follows this paragraph), and growth in earnings before interest, taxes, depreciation and amortization for our asset management line of business (“Asset Management”) (“EBITDA” as defined in note 3 to the 2007 Annual Incentive Pool Funding table that follows this paragraph). The Compensation Committee believed that Senior Management’s incentives should directly reflect the performance of their line of business based on the appropriate earnings growth measure for that business. For NEOs, we continued to attach a significant portion of their incentive opportunity to ROE in order to focus the team on enterprise-wide goals. Corporate executives had 70% of their incentive opportunity tied to ROE results, and line of business executives had 50% of their incentive opportunity tied to ROE results, as reflected in the table below:

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The 2007 financial goals for the annual incentive plan and the corresponding performance results are reflected in the following table:

After the incentive pool funding level is determined, individual incentive awards are determined based on department and individual performance results. In 2007, we increased the weight associated with individual performance from 35% to 50% and made a corresponding reduction to the weight associated with department performance from 65% to 50%. This change was made to reflect our progress in establishing a performance culture through performance management programs and training across our organization, such that individual performance goals, accountability and measurement are now systematically engrained in our culture. Based on this change, 2007 incentive awards were determined as follows:

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Following the close of the 2007 fiscal year, actual department results were calculated relative to the stated goals. These assessments take into account the relative difficulty of achieving the goals set and extraordinary contributions not readily captured in the measures. The CEO is responsible for approving final results, which, for each department area, are expressed as a percentage of target performance achieved between 0% and 200%. These results determine the allocation of the incentive pool to each department. Employees, including all NEOs, receive a pro-rata share of their department’s allocation based on their individual target annual incentive award relative to the aggregate target annual incentive awards for the department.

The weights given to department and individual results reflect the Compensation Committee’s intent to balance departmental teamwork with individual accountability. In total, Senior Management can earn between 50% and 200% of their target annual incentive award for performance between threshold and maximum. For performance above threshold but below maximum, incentive payments are adjusted ratably. For 2007 and 2008, the maximum award for Senior Management was increased from 200% of target to 250% to further motivate the continued engagement and focus required of executives to execute significant corporate initiatives, including the spin-off of Asset Management. Any payments resulting from this increase for 2007 would be paid in restricted stock units (“RSUs”), which would vest ratably over two years to provide additional retention incentive to recipients. For 2008, any such increased payments will be made in cash subject to one-year vesting.

In circumstances where the threshold metrics are not achieved, the Compensation Committee has the discretion to fund a top-performer pool equal to 25% of the aggregate target annual incentive awards. This aids us in retaining our top performers during lower performing business periods. To be considered for an award from the top-performer pool, individual performance must be rated within the top two rating categories (“outstanding” and “exceeds fully successful”). Generally, 25% of employees are expected to be rated within these categories.

2007 Awards: With the exception of Mr. Haylon, all of the NEOs participated in the 2007 bonus payout as reflected in the table below. Mr. Haylon was not eligible for a payment since he resigned prior to the payment date.

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These incentives were determined based on the following considerations:

Long-Term Incentives

In 2007, long-term incentives were provided to Senior Management to promote and reward the achievement of long-term goals, requiring performance goals to be met or exceeded for any incentives to be earned, and basing the ultimate value of the awards on our stock performance. These incentives were provided under the long-term incentive component (“LTIP”) of The Phoenix Companies, Inc. 2003 Restricted Stock, Restricted Stock Unit and Long-Term Incentive Plan (the “RSU Plan”).

For 2007 and prior years, Senior Management and other key employees have received grants of RSUs subject to the achievement of specified performance objectives over a three-year cycle. Each RSU awarded is convertible into one share of our Common Stock. Target RSU awards for each participant were determined based on each participant’s target long-term incentive award value (based on the compensation mix established for each NEO as described in Determining Mix of Direct Compensation Elements on page 27 and the percentages reflected for Long-Term Incentive in the table at the end of that section) divided by the share price of our Common Stock at the beginning of the applicable cycle. For the 2007-2009 LTIP cycle, target RSU awards were determined based on the closing share price on January 3, 2007 of $15.74. As part of the annual compensation review process, the Compensation Committee reviewed and approved the target RSU awards for Senior Management, except for the CEO, whose target RSU award was reviewed and approved by the Board upon the recommendation of the Compensation Committee.

For these incentive awards, the Compensation Committee established Company ROE objectives (threshold, target, and maximum) at the beginning of each three-year performance cycle. We used ROE as the performance measure because we believed ROE measures the return management is generating on shareholder investment and the efficiency of our use of assets and resources, and because we evaluate our financial performance based, in part, on ROE. We chose not to use line of business earnings for these incentives because we believe that Senior Management should, over the long-term, focus on enterprise-wide goals in addition to the annual line of business and department goals set forth in our annual incentive plan. ROE results, measured at the end of the three-year cycle, are an important measure of our long-term performance and can produce awards between zero and 200% of target RSU awards. If threshold ROE is achieved, awards for all participants will equal 50% of their target RSU awards. If target ROE is achieved, awards will equal target. If maximum ROE is achieved, awards will equal 200% of target. For ROE results between threshold and target and target and maximum, award amounts are pro-rated. Also, for the 2006-2008 and 2007-2009 cycles, if threshold ROE is not met, a pool of RSUs up to 25% of aggregate target RSU awards may be established to reward top performers, at the Compensation Committee’s discretion. This aids the Company in retaining its top performers during lower performing business periods.

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Each cycle’s ROE goals were established to require improvement in ROE over time. In 2007, the Compensation Committee approved the target performance objective of a 2009 ROE target of 9% for the 2007-2009 performance cycle. This target reflects the goal to improve ROE significantly over the next three years by more than 200% relative to 2006 ROE results of 3.9%.

For comparison purposes, ROE goals are provided in the table that follows for the three LTIP cycles that included 2007 performance.

Assuming threshold ROE is met for the 2007-2009 cycle, RSUs will convert into shares of Common Stock in 2010, except for any RSUs held by executives who elect to defer receipt of the shares. Participants in this incentive cycle are required to retain a fixed percentage of the award based on our share ownership and retention guidelines described under Share Ownership and Retention Guidelines on page 34.

2007 LTIP Payments: Performance for the 2005-2007 cycle was below threshold ROE. As a result, participants did not receive any RSUs for this cycle.

Stock Options and Service-Vested Restricted Stock Units

For 2007, stock options and service-vested RSUs were not part of our Direct Compensation strategy. Stock options were not a viable choice due to share limitations in our stock option plan entering into 2007, and we utilized performance-based RSUs for the long-term incentive component of Direct Compensation. However, we did use stock option and service-vested RSUs for special circumstances:

In 2008, we changed the structure of our annual long-term incentive awards. Beginning in 2008, share limitations in our stock option plan no longer prevented the broader use of stock option grants. This is primarily due to a large number of option awards that were granted in 2002 that became available for reissuance under The Phoenix Companies, Inc. Stock

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Incentive Plan due to their expiration in 2007. Therefore, the Compensation Committee decided to reintroduce stock options as a core part of the long-term incentive program, recognizing the focus they could provide on creating shareholder value as the Company transitions to a “pure-play” life and annuity business in connection with the expected spin-off of Asset Management. Fifty percent of the 2008 long-term incentive value for Senior Management will be provided through stock option grants. The Compensation Committee decided to provide the remaining 50% of target long-term incentive opportunity in the form of service-vested RSUs. As noted above, the Compensation Committee has not had a practice of granting service-vested RSUs more broadly. However, the Compensation Committee recognized that 2008 will be a year of significant change and that service-vested RSUs would support retention at this important time in our history.

For information about current equity holdings of our NEOs, see the Grants of Plan-Based Awards in Fiscal Year 2007 table on page 43, the Outstanding Equity Awards at 2007 Fiscal Year-End table on page 46, and Ownership of Common Stock on page 69.

Equity Grant Procedures

Stock options and RSUs are granted to both executive and non-executive employees. In determining these awards and grant dates, we do not consider material non-public information.

Prior to January 1, 2008, stock options and RSUs were granted intermittently throughout the year. Stock option grants, other than those for the CEO, were approved by the Compensation Committee, generally at its scheduled meetings. RSU awards, other than those for the CEO, were approved by the CEO or the Compensation Committee, as applicable. The CEO approved RSU awards intermittently as needed, and the Compensation Committee approved RSU awards generally at its scheduled meetings. The Board approved stock option and RSU grants for the CEO upon the recommendation of the Compensation Committee. Our practice was not, and is not, to price and date options retroactively. We priced and dated grants on or after the date of the Compensation Committee meeting at which they were approved. Grants for new hires and promotions were always approved by the Compensation Committee in advance of the applicable event, with the grant and pricing date coinciding with the date of hire or promotion, as applicable. Grants were always made with the exercise price equal to the closing price of our Common Stock on the effective date of the grant.

The Compensation Committee approved a new equity grant policy, including procedures for granting stock options and RSUs, beginning in 2008. This new policy was created following a review of emerging practices by management and Semler Brossy. Under this policy:

It has historically been our practice not to consider material inside information in determining award amounts or grant dates, and our policy reinforces this practice by intentionally selecting grant dates when decision makers are the least likely to be in possession of material inside information.

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Share Ownership and Retention Guidelines

To facilitate stock ownership by our directors and Senior Management, we adopted the following ownership and retention guidelines:

Determining Other Compensation Levels

Our overall benefit plan strategy is to provide a core set of health, welfare, work-life, pension and retirement-savings benefits that approximate the market median as measured using the Hewitt Benefit Index, which, for 2007, was an analysis of 21 insurance companies. We supplement this analysis with a study of practices of other financial companies doing business in the Hartford region. The supplemental retirement and non-qualified benefits discussed in this Proxy Statement are determined based on this benefit plan strategy, as these programs serve a broader group of employees than the NEOs, and complement our other retirement programs.

Supplemental Retirement Benefits

The Phoenix Companies, Inc. Nonqualified Supplemental Executive Retirement Plan (“SERP”) is a non-qualified defined benefit pension plan that provides supplemental retirement income to Senior Management and select employees. Prior to 2004, participation in the SERP was automatic for vice presidents and above. As of 2004, the CEO must approve any new participants in the SERP. As of December 31, 2007 there were approximately 132 active employees, 118 terminated vested employees and 144 retired employees in the SERP. The SERP provides the same benefits as those provided under The Phoenix Companies, Inc. Employee Pension Plan (the “Employee Pension Plan”), except that the benefit limitations imposed by the Internal Revenue Code of 1986, as amended (the “Code”), and the exclusion of annual incentive compensation in the definition of earnings under the Employee Pension Plan formula prior to July 1, 2007 are not taken into account. Accordingly, the SERP permits us to provide participants with retirement benefits on the same basis as other similarly situated employees without reduction due to the limits of the Code and the exclusion of their annual incentive awards.

For more detailed information about the SERP benefit, please refer to the narrative to the Pension Benefits at 2007 Fiscal Year-End table on page 49.

Non-Qualified Deferred Compensation

We maintain non-qualified deferred compensation plans that allow Senior Management and select employees to defer a portion of their salary, 100% of their annual incentive award and the receipt of RSUs. As of December 31, 2007 there were

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approximately 100 active employees in these plans. The plans are maintained to (i) provide a competitive benefit, (ii) allow participants an opportunity to defer tax payments and receive Company matching contributions on their cash compensation in excess of the Code limits on compensation placed on The Phoenix Companies, Inc. Savings and Investment Plan, and (iii) promote ownership by providing an opportunity to defer the receipt of RSUs.

For more information about the non-qualified deferred compensation benefits provided to NEOs in 2007, see the Non-Qualified Deferred Compensation in Fiscal Year 2007 table and accompanying notes, sub-tables and narrative beginning on page 53.

Perquisites

We provide perquisites to our NEOs and, in certain instances, to other members of Senior Management, as an incremental benefit to recognize their position within the Company. Perquisites are not a material part of our executive compensation.

For information about perquisites provided to NEOs in 2007, see the All Other Compensation Sub-Table in note 6 of the Summary Compensation Table for 2007 Fiscal Year on page 41.

Severance and Change-in-Control Agreements

Strategy

During change-in-control events, the Board considers the maintenance of a sound management team, who exercise their judgments without bias due to their personal circumstances, to be essential to protecting and enhancing the best interests of the Company and our shareholders. To that end, we afford certain change-in-control benefits to our NEOs because they hold critical positions within the Company and would be integral to effectuating a corporate transaction. During any period in which a change-in-control occurs, these change-in-control benefits are designed to assure a continuity of management, preserve morale and productivity, enable the NEOs to focus on their responsibilities without undue distraction due to concerns about personal financial and job security, and encourage retention. These benefits are also designed to assure that in these circumstances, these NEOs are not influenced in their actions by events that could occur following a change-in-control. These change-in-control arrangements help to align the interests of executives with the interests of our shareholders when considering corporate transactions. Our arrangements are generally consistent with market practice and our approach is generally competitively positioned relative to current market and insurance company practices, as discussed in 2008 Agreements on page 37.

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The change-in-control and post-termination arrangements which are described in Termination Payments and Change-in-Control Agreements on page 56 are not provided exclusively to the NEOs.

Severance

The CEO’s severance benefits are covered by her employment agreement. Based upon the considerations discussed in Employment Agreement on page 56, the CEO’s agreement provides certain enhanced benefits not provided to the other NEOs. These benefits include: (i) an enhanced severance formula, (ii) enhanced long-term performance-based incentive awards, (iii) Company-paid continuation of health care coverage for two years, (iv) lump sum payment for an additional two years of age and service under the pension plans, (v) a payment equal to two years of match under the deferred compensation plans, and (vi) deemed retiree status for all plans except for those subject to Code section 401(a).

Severance benefits to the other NEOs are provided through The Phoenix Companies, Inc. Executive Severance Allowance Plan (the “Executive Severance Allowance Plan”). The Executive Severance Allowance Plan applies to all Senior Management other than the CEO, and to any other employee that the CEO determines to be integral to the formulation or execution of our business strategy. Prior to January 1, 2008, all NEOs covered under the Executive Severance Allowance Plan were eligible for, subject to certain conditions, severance equal to one year of base salary and to a pro-rated portion of their annual incentive based on actual plan results for the year they are terminated.

In conjunction with our change in approach to change-in-control arrangements, as explained in 2008 Agreements on page 37, the Executive Severance Allowance Plan was amended, effective January 1, 2008, for any applicable terminations on or after that date that qualify under the terms of the plan. The amendment changes the calculation of the portion of the severance amount based on base salary to base salary and the average of the last two annual incentive awards already paid as of the termination date. The benefits will be tiered based on years of service and, for Senior Management, the minimum months of payment will be nine months of severance and the maximum will be 18 months of severance.

The severance benefits to all NEOs are triggered if the executive is terminated without cause. The CEO’s benefits are also triggered if she terminates for good reason. For more detail concerning our CEO’s severance benefits, see Termination Payments and Change-in-Control Agreements, and the accompanying tables and narrative beginning on page 56.

Change-in-Control Agreements

Pre-2008 Agreements

We currently have change-in-control agreements with the CEO and the other NEOs. Under these agreements (i) severance benefits are calculated at a multiple of pay (2.0 or 2.5 for NEOs and 3.0 for the CEO), (ii) the protection period runs from 90 to 180 days before a change-in-control and two years following a change-in-control, (iii) welfare benefits are extended for two to three years following a change-in-control, depending on the NEO’s position (tracks severance multiple), (iv) unvested SERP benefits become vested and the NEOs receive an enhancement equal to two to three years of additional service and age credit and/or pension equity formula credits, as applicable (tracks with severance multiple), (v) outplacement services are offered, commensurate with the NEO’s position, and (vi) the NEOs are subject to non-solicitation restrictions (the CEO’s restrictions are described in Mrs. Young’s Employment Agreement on page 42).

Generally, our change-in-control agreements for our NEOs are “double trigger”, meaning that the additional benefits set forth in the agreements will not be paid upon a change-in-control unless the NEO’s employment is terminated involuntarily (other than for cause) or for good reason within a specified period following the transaction. We chose this approach because we believe that executives are materially harmed only if a change-in-control results in reduced responsibilities, reduced compensation opportunity or loss of employment. If we did not require termination of employment to trigger benefits, a change-in-control could result in significant payments even if the executive’s position, responsibilities, and compensation were unaffected. Mrs. Young’s agreement allows her to terminate for any reason within 30 days of the first anniversary of a change-in-control, which provides her with an incentive to stay with the Company and assist during a transition, should the acquiring company desire.

Under the terms of the pre-2008 agreements, all NEOs except Messrs. Hofmann and Aylward were entitled to tax gross-ups in the event that the aggregate value of all covered payments exceeded the maximum amount which could be paid to the executive without the executive incurring an excise tax of 10% or more. If the covered payments did not exceed the

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maximum amount by 10% or more, the executive would have been paid the amount that would result in no portion of the payout being subject to the excise tax. We chose to provide the gross-ups to preserve the level of benefits intended to be provided under the agreements, but included the 10% threshold to avoid gross-up payments in situations where the cost to us far outweighs the benefit to the employee. See Tax and Accounting Considerations on page 39.

2008 Agreements

As a result of the market review of change-in-control agreements conducted by the Compensation Committee in 2005, management agreed to reduce participation and financial exposure associated with the change-in-control agreements over time. Because the agreements executed as a result of the 2005 market review were two-year agreements commencing January 1, 2006, the next opportunity to effect a change was January 1, 2008. This coincided with the expiration of Mrs. Young’s change-in-control agreement on January 1, 2008.

In 2007, the Board directed a comprehensive market assessment of our approach to change-in-control agreements relative to competitive practice, both generally and within the industry. The Compensation Committee’s compensation consultant, F. W. Cook & Co., Inc., prepared an analysis of current broad market practice and emerging market trends, and management prepared an analysis of insurance company practice and financial exposure based upon disclosures in applicable 2007 proxy statements. Management decided to include only insurance organizations in the change-in-control peer group because the vast majority of its change-in-control agreements were with our Life and Annuity executives.

Management included the following insurance organizations in its analysis:

The resulting analysis revealed that our programs were generally consistent with market practice. The assessment demonstrated that our approach was generally competitively positioned relative to current market practice and insurance company practice. The Compensation Committee concluded, however, that we needed to reduce our financial exposure when the agreements in place in 2007 expired, in part by reducing the number of change-in-control agreements offered.

Based on the review of the two assessments by management, the Compensation Committee and the Board, new change-in-control agreements were entered into with our NEOs other than our CEO effective January 1, 2008 that reflected the following changes: (i) a two-year term with automatic renewals for successive one-year periods unless either party provides prior written notice; (ii) in connection with the change to our pension plan formula as of July 1, 2007, the pension enhancement under the SERP is applied only to the new pension equity portion of the SERP benefit; and (iii) with respect to the determination of the severance amount, the portion of the formula based on annual incentive compensation will be based solely on the target amount for the year of termination of employment instead of the greater of such target amount and the average of actual annual incentives paid for the prior three years. These agreements were also revised to comply with Code section 409A, based on guidance available at that time.

In connection with Mr. Hofmann’s appointment as CFO and Senior Executive Vice President in November 2007, he was offered a change-in-control agreement, effective January 1, 2008, containing a higher multiple (2.5 instead of 2.0) and gross-up provisions. As a result of Mr. Aylward’s February 8, 2007 appointment as Senior Executive Vice President and President, Asset Management, in November of 2007 he was offered a change-in-control agreement, effective January 1, 2008, containing a higher multiple (2.5 instead of 2.0) and gross-up provisions.

Mrs. Young’s change-in-control agreement was amended, effective January 1, 2008, to reflect the following changes: (i) a two-year term with automatic renewals for successive one-year periods unless either party provides prior written notice;

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and (ii) with respect to the determination of the severance amount, the portion of the formula based on annual incentive compensation will be based solely on the target amount for the year of termination of employment instead of the greater of such target amount and the average of actual annual incentives paid for the prior three years. The change related to the pension benefit did not apply to Mrs. Young because her benefit under the pension plan is grandfathered under the traditional formula. The agreement was also revised to comply with Code section 409A, based on guidance available at that time.

More detailed information on these change-in-control agreements may be found under Termination Payments and Change-in-Control Agreements on page 56.

Review of Competitive Trends and Practices

In addition to the survey data that we use to identify specific market levels for Direct Compensation, we periodically conduct studies among peer companies concerning general compensation and benefit practices, plan designs, and trends. This informs us about our competitors’ practices when designing programs to meet our compensation objectives. For this purpose, we consider appropriate peer groups of life insurance or asset management companies, including many that we compete with for talent in the Greater Hartford region.

The peer groups used in 2006 were comprised of the following companies:

In 2006, we conducted studies with Semler Brossy and Mercer Human Resources Consulting concerning long-term incentive and retirement plan designs based on the practices of these peers, to the extent information was available.

Approving Pay Decisions

The CEO is responsible for making compensation recommendations to the Compensation Committee regarding other members of Senior Management. She is also responsible for evaluating all departmental results for the Company in conjunction with the annual incentive program based on pre-defined performance goals established at the beginning of each year, and evaluating individual performance results for her direct reports, including the other NEOs. The CEO shares her evaluation of each NEO with the Compensation Committee, along with corresponding compensation recommendations for Direct Compensation, taking into account factors such as performance relative to job responsibilities, key achievements, contributions to the leadership team, overall leadership, retention risk, strategic value and market value. The Compensation Committee is responsible for reviewing these recommendations and making final decisions with regard to compensation.

With regard to the CEO, the Compensation Committee is responsible for evaluating performance and making compensation recommendations to the Board for its approval. The CEO compensation recommendations are set by the Compensation Committee during executive session based on the Compensation Committee’s assessment of the CEO’s individual performance, the financial and operating performance of the Company, input from individual members of the Compensation Committee and the CEO’s self-assessment.

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Tax and Accounting Considerations

Code section 162(m) generally disallows a tax deduction to publicly held companies for compensation over $1 million paid to a company’s chief executive officer or any of the three other most highly compensated executive officers, unless the compensation is performance-based. Qualifying performance-based compensation will not be subject to the deduction limit if certain requirements are met.

The Compensation Committee intends to structure compensation for executive officers so that it qualifies for deductibility under Code section 162(m) to the extent feasible. As noted in Overall Objectives of Executive Compensation Programs on page 22, we follow a pay-for-performance philosophy and have determined that a vast majority of the compensation paid to our Senior Management and, in particular, our NEOs, should be variable compensation that is contingent upon achievement of performance conditions. For this reason, where applicable, our incentive compensation is designed in a manner that meets the requirements of performance-based compensation exempt from Code section 162(m) limitations. Our annual incentives and recent long-term performance awards were designed to qualify as exempt performance-based compensation. However, to maintain a competitive compensation position and to attract and retain high caliber executive talent, the Compensation Committee retains the authority to authorize payments, including salary and bonus, that may not be deductible.

Other tax considerations are factored into the design of our compensation programs. Code section 409A provides that amounts deferred under non-qualified deferred compensation plans are included in an employee’s income when vested unless certain requirements are met. If these requirements are not met, employees are also subject to an additional income tax and interest penalties. It is our intent that our non-qualified deferred compensation plans be operated and administered to meet, and will be amended to meet, these requirements.

Code section 280G disallows a company’s tax deduction for what are defined as “excess parachute payments” and Code section 4999 imposes a 20% excise tax on any person who receives excess parachute payments. As discussed above, NEOs are entitled to certain payments upon termination of their employment, including termination following a change-in-control of the Company. In the event that a portion of the payout would be classified as an excess parachute payment, we may be denied a federal income tax deduction, and NEOs may become entitled to an additional “gross-up” tax payment to compensate them or make them whole in respect of the excise taxes imposed under Code section 4999 and on any such payment.

Congress and the Internal Revenue Service consider from time to time legislation, regulations and other regulatory rulings that could modify or eliminate these tax benefits. Such actions would prompt an evaluation of the impact on our executive compensation programs.

Accounting considerations are also taken into account in designing the compensation programs made available to Senior Management. Principal among these is Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004) Share-Based Payment (“FAS 123R”), which addresses the accounting treatment of certain equity- based compensation. The requirement under FAS 123R that stock options be expensed—as opposed to the prior accounting regime where there was no accounting charge associated with the grant of service-based stock options having an exercise price at least equal to the grant date price of the underlying stock—influenced our decision to limit stock option grants to non-Senior Management employees.

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Summary Compensation Table for 2007 Fiscal Year

The following table sets forth information concerning the 2007 compensation of our former CFO and those executives who were our NEOs as of December 31, 2007. For those executives that were also reported in the Summary Compensation Table of our Proxy Statement for the 2006 fiscal year, 2006 compensation information is also included. The table includes salary, annual incentives and long-term incentive compensation. Additional information may be found in the narrative and supporting tables that accompany this table.