SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
Check the appropriate box:
/ / Preliminary information statement / / Confidential, for use
of the Commission
only (as permitted by Rule
14c-5(d)(2))
/x/ Definitive information statement
Equivest Finance, Inc.
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(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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EQUIVEST FINANCE, INC.
2 Clinton Square
Syracuse, New York 13202
(315) 422-9088
December 9, 1997
Dear Stockholders:
Equivest Finance, Inc. (the "Company") is amending its Articles of
Incorporation to increase the authorized amount of its Common Stock, par
value $.05 per share, to 50,000,000 shares. The Company is also adopting the
Equivest Finance Inc. 1997 Long Term Incentive Plan.
The enclosed Information Statement is being provided to you in order
to comply with requirements of the Securities and Exchange Commission. I
urge you to read it in its entirety, but you need not take any other action
at this time. No vote will take place since all required stockholder
approvals have been obtained, and you are not being asked for a proxy.
Sincerely,
Richard C. Breeden
Chairman and Chief
Executive Officer
WE ARE NOT ASKING YOU FOR A PROXY. THE ACTIONS HAVE BEEN APPROVED.
INFORMATION STATEMENT
EQUIVEST FINANCE, INC.
Common Stock
(Par Value $0.05 Per Share)
Series 1 Class A 12 1/2% Cumulative Convertible Preferred Stock
This Information Statement is being furnished to stockholders of
Equivest Finance, Inc. (the "Company") in connection with (i) the amendment
by the Company to its Articles of Incorporation increasing the authorized
amount of its Common Stock, par value $.05 per share (the "Common Stock"),
from 10,000,000 to 50,000,000 (the "Amendment") and (ii) the adoption of the
Equivest Finance, Inc. 1997 Long Term Incentive Plan (the "Plan"). All such
actions are expected to be effective as of December 31, 1997.
This Information Statement is being mailed on or about December 9,
1997 to all holders of the Company's Common Stock and Series 1 Class A
12 1/2% Cumulative Convertible Preferred Stock (collectively, the "Shares").
____________________
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO
SEND US A PROXY.
____________________
THESE ACTIONS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH
ACTIONS NOR UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED IN THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
The date of this Information Statement is December 9, 1997.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act") and,
accordingly, files periodic reports and other information with the Securities
and Exchange Commission (the "Commission"). Such reports and other
information filed with the Commission are available for inspection and
copying at the public reference facilities of the Commission located in
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and should
also be available for inspection and copying at prescribed rates at the
regional offices of the Commission located at Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade
Center, Suite 1300, New York, New York 10048. Copies of this material may
also be obtained by mail, upon payment of the Commission's customary fees,
from the Commission's principal office at 450 Fifth Street, N.W., Washington,
D.C. 20549. The Commission also maintains an Internet web site at
http://www.sec.gov that contains reports, proxy statements and other
information.
THIS INFORMATION STATEMENT INCORPORATES DOCUMENTS BY REFERENCE WHICH
ARE NOT INCLUDED IN THEIR ENTIRETY. COPIES OF ANY SUCH DOCUMENTS, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY
REFERENCE THEREIN, ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM THIS INFORMATION STATEMENT IS DELIVERED, UPON
WRITTEN OR ORAL REQUEST TO ERIC COTTON, GENERAL COUNSEL, EQUIVEST FINANCE,
INC., 2 CLINTON SQUARE, SYRACUSE, NEW YORK 13202.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the
Commission pursuant to the Exchange Act are incorporated herein by this
reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1996;
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997; and
3. The Company's Current Reports on Form 8-K dated March 29, 1997,
June 19, 1997, November 4, 1997 and November 5, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
and 15(d) of the Exchange Act subsequent to the date hereof and prior to the
date that the Amendment and the Plan become effective shall be deemed to be
incorporated by reference herein and to be a part hereof from the date any
such document is filed.
Any statements contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in
any other subsequently filed document which also is incorporated by reference
herein) modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed to constitute a part hereof except as so
modified or superseded. All information appearing in this Information
Statement is qualified in its entirety by the information and financial
statements (including notes thereto) appearing in the documents incorporated
herein by reference, except to the extent set forth in the immediately
preceding statement.
No person is authorized to give any information or to make any
representations with respect to the matters described in this Information
Statement other than those contained herein or in the documents incorporated
by reference herein. Any information or representations with respect to such
matters not contained herein or therein must not be relied upon as having
been authorized by the Company. The delivery of this Information Statement
shall not, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date hereof or that
the information in this Information Statement or in the documents
incorporated by reference herein is correct as of any time subsequent to the
date hereof or thereof.
INTRODUCTION
This Information Statement is being furnished to holders of Shares in
accordance with the rules and regulations promulgated by the Commission.
Approval of the Amendment and the Plan
On October 29, 1997, the Board of Directors of the Company approved
and adopted the Amendment and the Plan. Bennett Management & Development
Corporation ("BMDC") and the Bennett Funding Group, Inc. ("BFG"),
stockholders holding in the aggregate approximately 86% of the outstanding
voting shares, have acted by written consent in lieu of a meeting of
stockholders and voted to approve the Amendments and the Plan. No additional
stockholder vote is necessary to approve the Amendment or the Plan. Neither
your vote nor your proxy will be solicited.
Effectiveness of the Amendment and the Plan
The Company currently anticipates that the Amendment and the Plan
will be effective as of December 31, 1997.
Stockholders will not have "dissenters' rights" upon consummation of
the Amendment or the Plan.
For additional information concerning the Amendment and the Plan, see
"The Amendment" and "The Plan".
Recent Developments
Effective February 16, 1996, the Company entered into the Agreement
and Plan of Exchange, dated as of February 16, 1996, (the "Exchange
Agreement") among the Company, BFG and Resort Funding, pursuant to which the
Company acquired all of the common stock of Resort Funding, Inc. ("RFI") from
BFG in exchange for the issuance to BFG of 10,000 shares of the Company's
Series 2 Preferred Stock and 3,000 shares of the Company's Convertible
Preferred Stock. As a result of the Exchange Agreement and certain prior
investments, BFG and BMDC acquired beneficial ownership of approximately 86%
of the Company's voting securities.
On March 29, 1996, subsequent to the closing of the transactions
contemplated by the Exchange Agreement, BFG, along with its affiliate BMDC,
also a principal stockholder of the Company, filed voluntary petitions (the
"Petitions") for reorganization (Case Nos. 96-61376 and 96-61379,
respectively) under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the Northern District of New York (the
"Bankruptcy Court"). On April 18, 1996, following the March 29, 1996 filing
of the Petitions, the U.S. Department of Justice appointed, and the
Bankruptcy Court approved, Richard C. Breeden as trustee in bankruptcy (the
"Trustee") for BFG and BMDC, as well as for certain other related debtors.
The Company and RFI utilize certain of their affiliates, including
BMDC, BFG and The Processing Center Inc., for certain of their administrative
requirements. At December 31, 1996, the Trustee beneficially controlled
approximately 86% of the Company's outstanding shares of voting stock, after
giving effect to conversion of the preferred stock. In addition, RFI owes
BFG approximately $25.3 million pursuant to certain intercompany notes. On
October 24, 1997 the Trustee received a proposal from the Official Committee
of Unsecured Creditors of BFG to exchange approximately $25.0 million of debt
owned by RFI into Shares of the Company at a conversion price of $5.375 per
Share. Such proposal was approved by the Board of Directors of the Company on
October 29, 1997. Any such exchange is subject to bankruptcy court approval
and no assurance can be given that the Trustee will receive such bankruptcy
court approval.
RFI has recently completed new financing lines with a three year term
in an aggregate amount of $105 million from Credit Suisse First Boston
("CSFB"). These new financing lines replace and expand the Company's
previous $50 million line of credit for consumer receivables through ING
(U.S.) Capital Markets, Inc. ("ING"), while also reducing the interest rates
payable by the Company on its existing ING debt by nearly 300 basis points.
Of the financing lines provided by CSFB, $75 million will be a revolving
warehouse facility for consumer notes in replacement of the ING facility. In
addition, CSFB is providing a new $30 million revolving commitment to fund
acquisition and development loans at resort properties. In connection with
the financing, Equivest issued CSFB warrants to purchase up to 125,000 shares
of its Common Stock at $3.50, and 125,000 shares at $4.00.
On October 3, 1997, three new directors were elected to serve on the
Board of Directors of the Company. The newly elected directors of the
Company are:
George W. Carmany, III, President of The G.W. Carmany Co., Inc. in
Boston, Massachusetts, which is an advisor of and investor in small
companies. A graduate of Amherst College, Mr. Carmany began his business
career with Bankers Trust Company as an officer in its International Banking
Department in New York, and later as Executive Director of its merchant
banking subsidiary in Australia. From 1975-1995 he served in a variety of
senior positions with American Express Company, including Senior Vice
President, Corporate Strategic Planning. At American Express Bank, Mr.
Carmany served as Senior Executive Vice President and Chief Administrative
Officer before joining American Express Company's subsidiary The Boston
Company as Senior Executive Vice President, Treasurer and Director, a
position he held until the sale of that company to Mellon Bank Corporation.
Mr. Carmany subsequently served as Chairman of the Olympia and York
Noteholder's Steering Committee, and he is Chairman of the New England
Medical Center, Inc. Mr. Carmany serves as a director or trustee of numerous
organizations, including Ekco Group, Inc., Bentley College, the U.S.S.
Constitution Museum and The South Street Seaport Museum.
John R. Petty, former Chairman and Chief Executive Officer of Marine
Midland Bank, is currently Chairman of Federal National Payables, Inc.,
Bethesda, Maryland and TECSEC, Inc., Vienna, Virginia. Following his
graduation from Brown University, and a tour in the U.S. Navy, Mr. Petty
joined The Chase Manhattan Bank, where he worked until serving in the U.S.
Treasury Department from 1966 - 1972, primarily as Assistant Secretary of the
Treasury for International Affairs. After five years as a partner of Lehman
Brothers Inc., Mr. Petty joined Marine Midland Bank, as President and/or
Chairman and Chief Executive Officer from 1976 - 1988. Since retiring from
Marine Midland Bank, Mr. Petty has pursued a variety of interests including
serving as Chairman of the Nippon Credit Trust Company. He has formed and
managed finance companies and is a principal in high technology ventures.
Mr. Petty has served as a director of numerous public companies, including
Hongkong and Shanghai Banking Corporation, RCA, NBC, Hercules, Inc., Anixter
International Corporation, ANTEC Corporation, and others. He is a Trustee of
American University, a member of the Council on Foreign Relations and of the
Inter-American Dialogue, and President of the Foreign Bondholders Protective
Council.
Richard C. Breeden, President and Chief Executive Officer of Richard
C. Breeden & Co., Inc., in Greenwich, Connecticut, which provides consulting
and management services in turnarounds, bankruptcies and other corporate
distress situations, as well as consulting on global and domestic capital
markets. A graduate of Stanford University and Harvard Law School, Mr.
Breeden served in the White House as a senior economics and financial advisor
to President George Bush. From 1989-1993 he served as Chairman of the U.S.
Securities and Exchange Commission. Mr. Breeden currently serves as the
Trustee. Mr. Breeden has served on numerous boards and commissions,
including the North American Advisory Board of Daimler-Benz A.G., The
Philadelphia Stock Exchange, Inc., the German-American Chamber of Commerce,
and advisory commissions on capital markets in Italy, China and Russia. Mr.
Breeden is a Trustee of St. Paul's Cathedral Trust in America and the
National Policy Association in Washington, D.C. Mr. Breeden will serve as
Chairman of the Board at the Company.
THE AMENDMENT
Authorized Common Stock
On October 29, 1997, the Board of Directors of the Company approved
an amendment to the Articles of Incorporation of the Company which increases
the authorized Common Stock from 10,000,000 shares to 50,000,000 shares.
Such increase in the amount of authorized Common Stock was approved pursuant
to the written consent of the shareholders. The increase was approved in
order to provide Common Stock for (i) awards pursuant to the Plan, (ii) the
conversion of the Company's Convertible Preferred Stock which is mandatorily
convertible into 7,500,000 shares of Common Stock upon the date the Company
has a sufficient number of authorized and unissued shares reserved for
conversion, (iii) the exchange of the $25.3 million in debt owed to BFG into
Common Stock and (iv) other general corporate purposes. The effective date of
such amendment to the Articles of Incorporation is December 31, 1997.
Subject to any prior dividend rights of the holders of preferred
stock of the Company, dividends may be paid on the Common Stock as determined
by the Board of Directors out of funds legally available therefor. The
Company's ability to pay dividends is contingent upon the earnings of its
subsidiaries, as well as their ability to declare and pay dividends to the
Company. RFI is limited in its ability to pay dividends by certain covenants
in instruments governing certain indebtedness.
Holders of Common Stock are entitled to vote on all matters to be
voted on by the stockholders of the Company, including the election of
directors. Each share of Common Stock is entitled to one vote on all matters.
Holders of Common Stock do not have cumulative voting rights.
After the satisfaction in full of any liquidation preferences of
holders of preferred stock, holders of Common Stock are entitled to ratable
distribution of the remaining assets available for distribution to
stockholders in the event of any liquidation, dissolution or winding up of
the Company.
The Common Stock is not subject to redemption, whether by operation
of a sinking fund or otherwise. Holders of Common Stock are not entitled to
preemptive rights under the Articles of Incorporation or under the By-Laws of
the Company.
THE PLAN
The Board of Directors of the Company approved the Plan on October
29, 1997. The Plan was also approved pursuant to the written consent of
shareholders.
The Plan supplements the Company's existing Stock Option Plan which
was approved on September 2, 1988 (the "Old Plan").
Summary of the Plan
The following is a brief summary of the terms of the Plan. The
summary does not purport to be complete and is qualified in its entirety by
the full text of the Plan set forth in Schedule A to this Information
Statement.
The purpose of the Plan is to provide selected key employees and
Directors ("Participants") of the Company and its subsidiaries an opportunity
to benefit from the appreciation in the value of the Common Stock, thus
providing an increased incentive for such employees to contribute to the
future success and prosperity of the Company, enhancing the value of the
Common Stock for the benefit of the shareholders and increasing the ability
of the Company and its subsidiaries to attract and retain individuals of
exceptional skill.
During the period in which the Plan is effective, the total number of
Shares of Common Stock that may be issued under the Plan is 1,600,000 shares.
The maximum number of shares of Common Stock for which awards may be granted
during a calendar year to any Participant shall be 400,000.
Awards may be options ("Options"), which may be ISOs or Non-ISOs:
stock appreciation rights granted as a means to exercise Options or
designated portions thereof, or as independent Awards; or other Awards that
are valued in whole or in part by reference to, or are otherwise based on,
the fair market value of Shares. Awards may be paid in Shares, cash or a
combination thereof.
The Plan shall be administered by the Compensation Committee of the
Board of Directors, which may delegate its duties and powers in whole or in
part to any subcommittee thereof consisting solely of at least two
individuals who are each (a) "non-employee directors" within the meaning of
Rule 16b-3 under the Exchange Act (or any successor rule thereto) and (b)
"outside directors" within the meaning of Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code") (or any successor section
thereto). The Compensation Committee of the Board of Directors shall have
the authority to select the participants to be granted awards under the Plan,
to determine the size and terms of an award and to determine the time when
grants of awards will be made. The Compensation Committee of the Board of
Directors is authorized to interpret the Plan, to establish, amend and
rescind any rules and regulations relating to the Plan, and to make any other
determinations that it deems necessary or desirable for the administration of
the Plan. Any decision of the Compensation Committee of the Board of
Directors shall lie within its sole and absolute discretion and shall be
final, conclusive and binding on all parties concerned.
Options granted under the Plan shall be, as determined by the
Compensation Committee, non-qualified, incentive or other stock options for
federal income tax purposes, as evidenced by the related option agreements.
The Compensation Committee may, in its sole discretion, set forth terms in an
option agreement relating to a participant's termination from employment.
The option price per share of Common Stock shall be determined by the
Compensation Committee. Options granted under the Plan shall be exercisable
at such time and upon such terms and conditions as may be determined by the
Compensation Committee, but in no event shall an option be exercisable more
than ten years after the date it is granted.
The Committee may grant a stock appreciation right in conjunction
with an Option or designated portion thereof at the time the related Option
is granted or at any time prior to the exercise or cancellation of the
related Option. The exercise price shall be an amount determined by the
Committee but in no event shall such amount be less than the greater of (i)
the fair market value of a Share on the date the stock appreciation right is
granted or, in the case of a stock appreciation right granted in conjunction
with an Option, or a portion thereof, the option price of the related Option
and (ii) an amount permitted by applicable laws, rules, by-laws or policies
of regulatory authorities or stock exchanges.
Upon the exercise of a stock appreciation right, the Participant
shall be entitled to receive with respect to each Share to which such stock
appreciation right relates an amount in cash and/or Shares, as the case may
be equal to the excess of (i) the fair market value of a Share on the date of
exercise over (ii) the exercise price of the stock appreciation right. The
Committee may impose conditions upon the exercisability of stock appreciation
rights.
The Committee may grant, in its sole discretion, other Awards of
Shares and Awards that are valued in whole or in part by reference to, or are
otherwise based on the fair market value of, Shares ("Other Share-Based
Awards"). Certain of such Other Share-Based Awards ("Performance-Based
Awards") may be granted in a manner that is deductible by the Corporation or
a subsidiary of the Corporation under Section 162(m) of the Code and may be
based upon stock price, market share, sales, earnings per share, return on
equity, costs or other performance goals approved by the Committee.
Except as otherwise provided in the Plan or in an award agreement, an
Award may be exercised for all, or from time to time any part, of the shares
of Common Stock for which it is then exercisable. The purchase price for the
shares of Common Stock as to which an Award is exercised shall be paid to the
Company in full at the time of exercise at the election of the participant
(i) in cash, (ii) in shares of Common Stock having a fair market value equal
to the aggregate option price for the shares of Common Stock being purchased
and satisfying such other requirements as may be imposed by the Compensation
Committee, (iii) partly in cash and partly in such shares of Common Stock,
(iv) through the withholding of shares of Common Stock (which would otherwise
be delivered to the participant) with an aggregate fair market value on the
exercise date equal to the aggregate option price or (v) through the delivery
of irrevocable instructions to a broker to deliver promptly to the Company an
amount equal to the aggregate option price for the shares of Common Stock
being purchased.
Each Award will be non-transferable during the lifetime of the
Participant provided that in the event Section 16 of the Exchange Act ceases
to require awards to be non-transferable, the Compensation Committee may
amend the Plan to provide for such transfers.
The Board of Directors may suspend, amend or terminate the Plan, in
whole or in part. No amendment may be made without approval of the
shareholders, however, if such approval is required by the rules under the
Exchange Act, or by any regulatory authorities or stock exchanges.
Furthermore, no amendment, suspension or termination of the Plan may, without
the consent of a participant, impair any of the rights or obligations under
any award previously granted to such participant under the Plan. The
Compensation Committee may amend the Plan, subject to the limitations cited
above, to permit the granting of awards meeting the requirements of future
amendments or issued regulations, if any, to applicable laws, rules, by-laws
or policies of regulatory authorities or stock exchanges.
In the event of any change in the outstanding Shares by reason of any
Share dividend or split, reorganization, recapitalization, merger,
consolidation, spin-off combination or exchange of Shares or other corporate
exchange, or any distribution to stockholders of Shares other than regular
cash dividends, the Committee, in its sole discretion, may make such
substitution or adjustment as it deems to be equitable to any affected terms
of such Awards. In the event of a Change of Control, the nonvested portion
of any Award shall vest in full.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT OF THE COMPANY
The following table sets forth information as of September 30, 1997
on the Company's voting securities with respect to the share ownership by
beneficial owners of more than 5% of the outstanding amount of such stock.
No director or executive officers of the Company own any voting securities.
Title of Class Name and Address Amount and Nature of
Percent of Class<F2> of Beneficial Owner<F1> Beneficial Ownership
Common Stock Bennett Management & Development 7,121,285
75.1%<F3> Corporation
c/o Richard Breeden, as Trustee
2 Clinton Square
Syracuse, NY 13202
Series 2 Preferred The Bennett Funding Group, Inc. 10,000
Stock 100.0%<F4> c/o Richard Breeden, as Trustee
2 Clinton Square
Syracuse, NY 13202
Convertible Preferred The Bennett Funding Group, Inc. 3,000
Stock<F5> c/o Richard Breeden, as Trustee
2 Clinton Square
Syracuse, NY 13202
[FN]
<F1> Except as otherwise noted below, each person has sole voting power
and investment power with respect to the voting securities indicated
as owned beneficially by such person.
<F2> Except as otherwise noted below, all voting securities listed are
owned both of record and beneficially.
<F3> Based upon 9,484,847 shares of Common Stock outstanding as of August
31, 1997 (without giving effect to the possible issuance of shares
upon conversion of the Convertible Preferred Stock).
<F4> The Series 2 Preferred Stock is entitled to 20% of the total number
of votes of the Company.
<F5> Each share of Convertible Preferred Stock is immediately and
mandatorily convertible into 2,500 shares of Common Stock on the date
the Company first has a sufficient number of authorized and unissued
shares of Common Stock to permit conversion.
The Trustee, who controls 86% of the outstanding voting shares of the
Company approved the Amendment and the Plan on December 9, 1997.
CURRENT INFORMATION
The Company is subject to certain of the informational requirements
of the Exchange Act, and in accordance therewith, files reports and other
documents and information with the Commission. Such reports and other
documents and information are available for inspection and copying at the
Commission and from the Company as described under "AVAILABLE INFORMATION."
SCHEDULE A
EQUIVEST FINANCE, INC.
1997 LONG TERM INCENTIVE PLAN
1. Purpose of the Plan
The purpose of the Plan is to attract, retain and motivate
selected employees and directors who are in a position to have an impact on
the results of the operations of the business of the Company or one or more
of its Subsidiaries. The Company expects that it will benefit from the
additional incentive which such employees and directors will have to increase
the value of the Company's Shares as a result of the Plan.
2. Definitions
The following capitalized terms used in the Plan have the
respective meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as
amended, or any successor thereto.
(b) Award: An Option, Stock Appreciation Right, or Other
Stock-Based Award granted pursuant to the Plan.
(c) Board: The Board of Directors of the Company.
(d) Code: The Internal Revenue Code of 1986, as amended,
or any successor thereto.
(e) Committee: The Compensation Committee of the Board.
(f) Company: Equivest Finance, Inc.
(g) Disability: Except as otherwise provided by the
Committee, the inability to engage in any
substantial gainful activity by reason of a
medically determinable physical or mental impairment
which constitutes a permanent and total disability,
as defined in Section 22(e)(3) of the Code (or any
successor section thereto). The determination
whether a Participant has suffered a Disability
shall be made by the Committee based upon such
evidence as it deems necessary and appropriate. A
Participant shall not be considered disabled unless
he or she furnishes such medical or other evidence
of the existence of the Disability as the Committee,
in its sole discretion, may require.
(h) Effective Date: September 1, 1997.
(i) Fair Market Value: On a given date, the arithmetic
mean of the high and low prices of the Shares as
reported on such date on the Composite Tape of the
principal national securities exchange on which such
Shares are listed or admitted to trading, or, if no
Composite Tape exists for such national securities
exchange on such date, then on the principal
national securities exchange on which such Shares
are listed or admitted to trading, or, if the Shares
are not listed or admitted on a national securities
exchange, the arithmetic mean of the per Share
closing bid price and per Share closing asked price
on such date as quoted on the National Association
of Securities Dealers Automated Quotation System (or
such market in which such prices are regularly
quoted), or, if there is no market on which the
Shares are regularly quoted, the Fair Market Value
shall be the value established by the Committee in
good faith. If no sale of Shares shall have been
reported on such Composite Tape or such national
securities exchange on such date or quoted on the
National Association of Securities Dealers Automated
Quotation System on such date, then the immediately
preceding date on which sales of the Shares have
been so reported or quoted shall be used.
(j) ISO: An Option that is also an incentive stock
option granted pursuant to Section 6(d) of the Plan.
(k) LSAR: A limited stock appreciation right granted
pursuant to Section 7(d) of the Plan.
(l) Option: A stock option granted pursuant to Section 6
of the Plan.
(m) Option Price: The purchase price per Share of an
Option, as determined pursuant to Section 6(a) of
the Plan.
(n) Other Stock-Based Awards: Awards granted pursuant to
Section 8 of the Plan.
(o) Participant: An individual who is selected by the
Committee to participate in the Plan pursuant to
Section 5 of the Plan.
(p) Performance-Based Awards: Certain Other Stock-Based
Awards granted pursuant to Section 8(b) of the Plan.
(q) Plan: The Equivest Finance, Inc. 1997 Stock Option
Plan.
(r) Shares: shares of common stock, par value $0.05 per
share, of the Company.
(s) Stock Appreciation Right: A stock appreciation right
granted pursuant to Section 7 of the Plan.
(t) Subsidiary: A subsidiary corporation of the
Corporation, as defined in Section 424(f) of the
Code (or any successor section thereto).
3. Shares Subject to the Plan
The total number of Shares that may be issued under the Plan
is 1,600,000 shares. The maximum number of Shares for which Awards may be
granted during a calendar year to any one Participant shall be 400,000. The
Shares may consist, in whole or in part, of unissued Shares or treasury
Shares. The issuance of Shares or the payment of cash upon the exercise of
an Award shall reduce the total number of Shares available under the Plan, as
applicable. Shares which are subject to Awards which terminate or lapse may
be granted again under the Plan.
4. Administration
The Plan shall be administered by the Committee, which may
delegate its duties and powers in whole or in part to any subcommittee
thereof consisting solely of at least two individuals who are each (a) "non-
employee directors" within the meaning of Rule 16b-3 under the Act (or any
successor rule thereto) and (b) "outside directors" within the meaning of
Section 162(m) of the Code (or any successor section thereto). The Committee
shall have the authority to select the Participants to be granted Awards
under the Plan, to determine the size and terms of an Award and to determine
the time when grants of Awards will be made. The Committee is authorized to
interpret the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, and to make any other determinations that it deems
necessary or desirable for the administration of the Plan. Any decision of
the Committee shall lie within its sole and absolute discretion and shall be
final, conclusive and binding on all parties concerned.
5. Eligibility
The Committee may, in its sole discretion, designate those
person(s) who shall be Participant(s) in the Plan. Participants shall be
selected from among the employees and directors of the Company and any of its
Subsidiaries who are in a position to have an impact on the results of the
operations of the Company or one or more of its Subsidiaries; provided that
ISOs may only be granted to employees of the Company or its Subsidiaries.
6. Terms and Conditions of Options
Options granted under the Plan shall be, as determined by
the Committee, non-qualified, incentive or other stock options for federal
income tax purposes, as evidenced by the related Option agreements. Options
granted under the Plan shall be subject to the following terms and
conditions:
(a) Option Price. The Option Price per Share shall be
determined by the Committee.
(b) Exercisability of Options. Options granted under the
Plan shall be exercisable at such time and upon such terms and conditions as
may be determined by the Committee, but in no event shall an Option be
exercisable more than ten years after the date it is granted.
(c) Method of Exercise. Except as otherwise provided in
the Plan or in an Award agreement, an Option may be exercised for all, or
from time to time any part, of the Shares for which it is then exercisable.
For purposes of this Section 6 of the Plan, the exercise date of an Option
shall be the later of the date a notice of exercise is received by the
Company and, if applicable, the date payment is received by the Company
pursuant to clauses (i), (ii) or (iii) in the following sentence. The
purchase price for the Shares as to which an Option is exercised shall be
paid to the Company in full at the time of exercise at the election of the
Participant (i) in cash, (ii) in Shares having a Fair Market Value equal to
the aggregate Option Price for the Shares being purchased and satisfying such
other requirements as may be imposed by the Committee, (iii) partly in cash
and partly in such Shares, (iv) through the withholding of Shares (which
would otherwise be delivered to the Participant) with an aggregate Fair
Market Value on the exercise date equal to the aggregate Option Price or (v)
through the delivery of irrevocable instructions to a broker to deliver
promptly to the Company an amount equal to the aggregate Option Price for the
Shares being purchased. No Participant shall have any rights to dividends or
other rights of a stockholder with respect to Shares subject to an Option
until the Shares have been issued to the Participant. A Participant may, if
and to the extent permitted by the Committee, elect to defer payment of an
Award.
(d) ISOs. The Committee may grant Options under the Plan
that are intended to be ISOs. Such ISOs shall comply with the requirements
of Section 422 of the Code (or any successor section thereto). No ISO may be
granted to any Participant who at the time of such grant, owns more than ten
percent of the total combined voting power of all classes of stock of the
Company or of any Subsidiary, unless (i) the Option Price for such ISO is at
least 110% of the Fair Market Value of a Share on the date the ISO is granted
and (ii) the date on which such ISO terminates is a date not later than the
day preceding the fifth anniversary of the date on which the ISO is granted.
Any Participant who disposes of Shares acquired upon the exercise of an ISO
either (i) within two years after the date of grant of such ISO or (ii)
within one year after the transfer of such Shares to the Participant, shall
notify the Company of such disposition and of the amount realized upon such
disposition.
(e) Deferral. The Committee may develop procedures for a
Participant to defer receipt of Shares otherwise subject to Options granted
hereunder.
7. Terms and Conditions of Stock Appreciation Rights
(a) Grants. The Committee also may grant (i) a Stock
Appreciation Right independent of an Option or (ii) a Stock Appreciation
Right in connection with an Option, or a portion thereof. A Stock
Appreciation Right granted pursuant to clause (ii) of the preceding sentence
(A) may be granted at the time the related Option is granted or at any time
prior to the exercise or cancellation of the related Option, (B) shall cover
the same Shares covered by an Option (or such lesser number of Shares as the
Committee may determine) and (C) shall be subject to the same terms and
conditions as such Option except for such additional limitations as are
contemplated by this Section 7 (or such additional limitations as may be
included in an Award agreement).
(b) Terms. The exercise price per Share of a Stock
Appreciation Right shall be an amount determined by the Committee but in no
event shall such amount be less than the greater of (i) the Fair Market Value
of a Share on the date the Stock Appreciation Right is granted or, in the
case of a Stock Appreciation Right granted in conjunction with an Option, or
a portion thereof, the Option Price of the related Option and (ii) an amount
permitted by applicable laws, rules, by-laws or policies of regulatory
authorities or stock exchanges. Each Stock Appreciation Right granted
independent of an Option shall entitle a Participant upon exercise to an
amount equal to (i) the excess of (A) the Fair Market Value on the exercise
date of one Share over (B) the exercise price per Share, times (ii) the
number of Shares covered by the Stock Appreciation Right. Each Stock
Appreciation Right granted in conjunction with an Option, or a portion
thereof, shall entitle a Participant to surrender to the Company the
unexercised Option, or any portion thereof, and to receive from the Company
in exchange therefor an amount equal to (i) the excess of (A) the Fair Market
Value on the exercise date of one Share over (B) the Option Price per Share,
times (ii) the number of Shares covered by the Option, or portion thereof,
which is surrendered. The date a notice of exercise is received by the
Company shall be the exercise date. Payment shall be made in Shares or in
cash, or partly in Shares and partly in cash, valued at such Fair Market
Value, all as shall be determined by the Committee. Stock Appreciation
Rights may be exercised from time to time upon actual receipt by the Company
of written notice of exercise stating the number of Shares subject to an
exercisable Option with respect to which the Stock Appreciation Right is
being exercised. No fractional Shares will be issued in payment for Stock
Appreciation Rights, but instead cash will be paid for a fraction or, if the
Committee should so determine, the number of Shares will be rounded downward
to the next whole Share.
(c) Limitations. The Committee may impose, in its
discretion, such conditions upon the exercisability or transferability of
Stock Appreciation Rights as it may deem fit.
(d) Limited Stock Appreciation Rights. The Committee may
grant LSARs that are exercisable upon the occurrence of specified contingent
events. Such LSARs may provide for a different method of determining
appreciation, may specify that payment will be made only in cash and may
provide that any related Awards are not exercisable while such LSARs are
exercisable. Unless the context otherwise requires, whenever the term "Stock
Appreciation Right" is used in the Plan, such term shall include LSARs.
8. Other Stock-Based Awards
(a) Generally. The Committee, in its sole discretion, may
grant Awards of Shares, Awards of restricted Shares and Awards that are
valued in whole or in part by reference to, or are otherwise based on the
Fair Market Value of, Shares ("Other Stock-Based Awards"). Such Other Stock-
Based Awards shall be in such form, and dependent on such conditions, as the
Committee shall determine, including, without limitation, the right to
receive one or more Shares (or the equivalent cash value of such Shares) upon
the completion of a specified period of service, the occurrence of an event
and/or the attainment of performance objectives. Other Stock-Based Awards
may be granted alone or in addition to any other Awards granted under the
Plan. Subject to the provisions of the Plan, the Committee shall determine
to whom and when Other Stock-Based Awards will be made, the number of Shares
to be awarded under (or otherwise related to) such Other Stock-Based Awards;
whether such Other Stock-Based Awards shall be settled in cash, Shares or a
combination of cash and Shares; and all other terms and conditions of such
Awards (including, without limitation, the vesting provisions thereof).
(b) Performance-Based Awards. Notwithstanding anything to
the contrary herein, certain Other Stock-Based Awards granted under this
Section 8 may be granted in a manner which is deductible by the Company under
Section 162(m) of the Code (or any successor section thereto) ("Performance-
Based Awards"). A Participant's Performance-Based Award shall be determined
based on the attainment of written performance goals approved by the
Committee for a performance period established by the Committee (i) while the
outcome for that performance period is substantially uncertain and (ii) no
more than 90 days after the commencement of the performance period to which
the performance goal relates or, if less, the number of days which is equal
to 25 percent of the relevant performance period. The performance goals,
which must be objective, shall be based upon one or more of the following
criteria: (i) consolidated earnings before or after taxes (including earnings
before interest, taxes, depreciation and amortization); (ii) net income;
(iii) operating income; (iv) earnings per Share; (v) book value per Share;
(vi) return on stockholders' equity; (vii) expense management; (viii) return
on investment; (ix) improvements in capital structure; (x) profitability of
an identifiable business unit or product; (xi) maintenance or improvement of
profit margins; (xii) stock price; (xiii) market share; (xiv) revenues or
sales; (xv) costs; (xvi) cash flow; (xvii) working capital and (xviii) return
on assets. The foregoing criteria may relate to the Company, one or more of
its Subsidiaries or one or more of its divisions or units, or any combination
of the foregoing, and may be applied on an absolute basis and/or be relative
to one or more peer group companies or indices, or any combination thereof,
all as the Committee shall determine. In addition, to the degree consistent
with Section 162(m) of the Code (or any successor section thereto), the
performance goals may be calculated without regard to extraordinary items.
The maximum amount of a Performance-Based Award to any Participant with
respect to a fiscal year of the Company shall be 400,000 Shares. The
Committee shall determine whether, with respect to a performance period, the
applicable performance goals have been met with respect to a given
Participant and, if they have, to so certify and ascertain the amount of the
applicable Performance-Based Award. No Performance-Based Awards will be paid
for such performance period until such certification is made by the
Committee. The amount of the Performance-Based Award actually paid to a
given Participant may be less than the amount determined by the applicable
performance goal formula, at the discretion of the Committee. The amount of
the Performance-Based Award determined by the Committee for a performance
period shall be paid to the Participant at such time as determined by the
Committee in its sole discretion after the end of such performance period;
provided, however, that a Participant may, if and to the extent permitted by
the Committee and consistent with the provisions of Section 162(m) of the
Code, elect to defer payment of a Performance-Based Award.
9. Tax Withholding
The Committee shall have the right to require payment of any
federal, state, local or foreign income or other taxes required to be
withheld with respect to the exercise or payment of an Award. Unless the
Committee specifies otherwise, the Participant may elect to pay a portion or
all of such withholding taxes by (a) delivery in Shares or (b) having Shares
withheld by the Company from any Shares that would have otherwise been
received by the Participant. The number of Shares so delivered or withheld
shall have an aggregate Fair Market Value sufficient to satisfy the
applicable withholding taxes.
10. Amendments or Termination
The Board may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made which, (a) without the
approval of the stockholders of the Company, would (except as is provided in
Section 11 of the Plan), (i) increase the total number of Shares reserved for
the purposes of the Plan, (ii) change the maximum number of Shares for which
Awards may be granted to any Participant, (iii) materially increase the
benefits accruing to Participants under the Plan or (iv) materially modify
the eligibility requirements for participation in the Plan, or (b) without
the consent of a Participant, would impair any of the rights or obligations
under any Award theretofore granted to such Participant under the Plan;
provided, however, that the Committee may amend the Plan in such manner as it
deems necessary to permit the granting of Awards meeting the requirements of
the Code or other applicable (United States or foreign) laws.
11. No Right to Employment
The granting of an Award under the Plan shall impose no
obligation on the Company or any Subsidiary to continue the employment of a
Participant or to make any additional Awards to the Participant and shall not
lessen or affect the Company's or Subsidiary's right to terminate the
employment of such Participant.
12. Successors and Assigns
The Plan shall be binding on all successors and assigns of
the Company and a Participant, including, without limitation, the estate of
such Participant and the executor, administrator or trustee of such estate,
or any receiver or trustee in bankruptcy or representative of the
Participant's creditors.
13. Nontransferability of Awards
Unless otherwise so provided by the Committee, an Award
shall not be subject to disposition by transfer, alienation, anticipation,
pledge, encumbrance, assignment or any other means whether such disposition
be voluntary or involuntary or by operation of law by judgment, levy,
attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null
and void and of no effect.
14. Adjustments Upon Certain Events
Notwithstanding any provision in the Plan to the contrary,
in the event of any change in the outstanding Shares by reason of any Share
dividend or split, reorganization, recapitalization, merger, consolidation,
spin-off, combination or exchange of Shares or other corporate exchange, or
any distribution to stockholders of Shares other than regular cash dividends,
the Committee in its sole discretion and without liability to any person may
make such substitution or adjustment, if any, as it deems to be equitable, as
to (i) the number or kind of Shares or other securities issued or reserved
for issuance pursuant to the Plan or pursuant to outstanding Awards, (ii) the
Option Price and/or (iii) any other affected terms of such Awards.
15. Choice of Law
The Plan shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the choice of law
provisions thereof.
16. Term of the Plan
The Plan shall be effective as of the Effective Date. No
Award may be granted under the Plan after the tenth anniversary of the date
the Plan is adopted by the Board, but Awards theretofore granted may extend
beyond that date.