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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule14a-11(c) or Rule 14a-12
EQUIVEST FINANCE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
EQUIVEST FINANCE, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.
1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
--------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------
5) Total fee paid:
|_| Fee paid previously by written preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule O-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by the registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ____________________________________________
2) Form Schedule or Registration Statement No.: _______________________
3) Filing Party: ______________________________________________________
4) Date Filed: ________________________________________________________
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[LOGO]
EQUIVEST
RICHARD C. BREEDEN
Chairman, President & Chief Executive Officer
April 13, 2000
Dear Stockholder and Series 2 Preferred Stockholder:
You are cordially invited to attend the Equivest Finance, Inc. Combined
1999 and 2000 Annual Meeting of Stockholders to be held on Monday, May 15, 2000,
at 11:00 a.m., local time, at the Long Wharf Resort, 5 Washington Street,
Newport, Rhode Island, 02840. The enclosed Notice and Proxy Statement contain
details concerning the business to be acted upon at the meeting. A proxy card is
also enclosed, and we hope that you will attend the meeting either in person or
by proxy.
In addition to the election of Directors, you are being asked to ratify
the appointment of Firley, Moran, Freer & Eassa, P.C. to serve as independent
auditors of the Company for the 1999 and 2000 fiscal years.
You will note that the Board of Directors of the Company recommends a vote
FOR the election of all nominees for director and a vote FOR the ratification of
the appointment of Firley, Moran, Freer & Eassa, P.C. to serve as the
independent auditors of the Company for the 1999 and 2000 fiscal years.
Please sign and return your proxy card in the enclosed postage-paid
envelope at your earliest convenience to assure that your shares will be
represented and voted at the meeting even if you cannot attend. To help us plan
for the meeting, please mark the appropriate box on the accompanying proxy card
telling us if you will be attending.
Sincerely,
(facsimile signature)
Richard C. Breeden
Chairman, President & Chief Executive Officer
100 NORTHFIELD STREET GREENWICH, CONNECTICUT 06830
TELEPHONE (203) 618-0065 FACSIMILE (203) 618-0063
www.equivest.com
[LOGO]
EQUIVEST
EQUIVEST FINANCE, INC.
(the "Company")
NOTICE OF COMBINED 1999 AND 2000
ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS
OF EQUIVEST FINANCE, INC.
The Combined 1999 and 2000 Annual Meeting of Stockholders of the Company
will be held at the Long Wharf Resort, 5 Washington Street, Newport, Rhode
Island, 02840, on Monday, May 15, 2000, at 11: 00 a.m., local time, for the
following purposes:
(i) To elect five directors; and
(ii) To ratify the appointment of Firley, Moran, Freer & Eassa,
P.C. to serve as the independent auditors of the Company for
the 1999 and 2000 fiscal years; and
(iii) To transact such other business as may properly come before
the meeting and any adjournments thereof.
Holders of record of the Company's Common Stock, par value $.01 per share,
and Series 2 Class A Preferred Stock at the close of business on March 31, 2000,
are entitled to notice of, and to vote at, the meeting and any adjournments
thereof.
Each stockholder is urged to execute and return the enclosed proxy card
promptly. In the event a stockholder decides to attend the meeting, he or she
may, if so desired, revoke the proxy and vote the shares in person. All proxy
cards should be returned to Continental Stock Transfer and Trust Company in the
enclosed return envelope by May 15, 2000.
By Order of the Board of Directors
(facsimile signature)
Richard G. Winkler
Secretary
Greenwich, Connecticut
April 13, 2000
100 NORTHFIELD STREET GREENWICH, CONNECTICUT 06830
TELEPHONE (203) 618-0065 FACSIMILE (203) 618-0063
www.equivest.com
EQUIVEST FINANCE, INC.
100 NORTHFIELD STREET
GREENWICH, CONNECTICUT 06830
--------------------------
PROXY STATEMENT
--------------------------
FOR COMBINED 1999 AND 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 15, 2000
--------------------------
This proxy statement (the "Proxy Statement") is furnished in connection
with the solicitation of proxies by the Board of Directors (the "Board of
Directors") of Equivest Finance, Inc. (the "Company"), a Delaware corporation,
prior to the date of the Combined 1999 and 2000 Annual Meeting of Stockholders
of the Company (the "Annual Meeting"), for use at the Annual Meeting or any
adjournments thereof. The Annual Meeting is to be held at the Long Wharf Resort,
5 Washington Street, Newport, Rhode Island, on Monday May 15, 2000, at 11:00
a.m., local time. The approximate date on which this Proxy Statement and form of
proxy are being first sent to Stockholders is April 13, 2000.
The presence, either in person or by properly executed proxy, of the
owners of a majority of the outstanding shares of common stock, par value $.01
per share (the "Common Stock"), and the outstanding shares of Series 2 Class A
Preferred Stock (the "Series 2 Preferred Stock") of the Company, voting together
as one class, is necessary to constitute a quorum at the Annual Meeting and to
permit action to be taken by the Stockholders at such meeting. Only holders of
record of shares of the Common Stock and Series 2 Preferred Stock at the close
of business on March 31, 2000, (the "Record Date") are entitled to vote at the
Annual Meeting (such shares being collectively referred to as the "Voting
Stock") or any adjournments thereof. The Series 2 Preferred Stock holders on the
Record Date account for 20% of voting power of the Voting Stock. Holders of the
Common Stock on the Record Date account for 80% of voting power of the Voting
Stock, and each such holder is entitled to one vote for each share of Common
Stock so held. The Series 2 Preferred Stock holders shall vote with the Common
Stockholders (such holders of record on the Record Date shall, collectively, be
referred to as the "Stockholders") as a single class on all matters presented at
the Annual Meeting, and each such holder is entitled to one vote for each share
of Preferred Stock so held. As of March 31, 2000, there were shares of Common
Stock and 10,000 shares of Series 2 Preferred Stock of the Company outstanding.
The Bennett Funding Group, Inc. ("BFG"), and certain other related debtors
(collectively, the "Estate"), currently involved in proceedings under Chapter 11
of the United States Bankruptcy Code in the United States Bankruptcy Court for
the Northern District of New York, own 20,685,248 shares, or 73.6% of the Common
Stock, and the Estate also owns 100% of the Series 2 Preferred Stock. Together,
the Common Stock ownership of the Estate and the Series 2 Preferred Stock
ownership of the Estate represent approximately 78.9% of the voting power
entitled to vote at the Annual Meeting. Richard C. Breeden, the trustee for the
Estate (the "Trustee"), has indicated that he will vote in favor of each of the
proposals presented at the Annual Meeting, and therefore each such proposal will
be adopted.
All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted at the Annual Meeting in accordance with the
directions given. Stockholders voting by proxy for the election of Directors may
vote in favor of all nominees, withhold their votes as to all nominees or
withhold their votes as to specific nominees. The elected nominees for Director
will hold office until the 2001 Annual Meeting and until their respective
successors are elected and qualify. Stockholders voting by proxy regarding any
of the following may vote for or against each and any of the proposals or may
withhold their vote as to any of them:
- 1 -
(i) The election of five nominees for director; and
(ii) The ratification of the appointment of Firley, Moran, Freer &
Eassa, P.C. ("Firley, Moran") to serve as the independent
auditors of the Company for the 1999 and 2000 fiscal years.
Stockholders should specify their choices on the enclosed form of proxy.
If no specific instructions are given with respect to the matters to be acted
upon, the shares represented by a signed proxy will be voted FOR (i) each of the
nominees for election for Director to serve until the 2001 Annual Meeting of
Stockholders, and (ii) FOR the ratification of the appointment of Firley, Moran
to serve as the independent auditors of he Company.
Directors will be elected by a plurality of the voting power of the Voting
Stock, whether cast by the Stockholders voting in person or by proxy at the
Annual Meeting. The holders of a majority of the Voting Stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the Stockholders for the
transaction of business, except as otherwise provided in the certificate of
incorporation, but in no event shall a quorum consist of less than one-third
(1/3) of the shares entitled to vote at the meeting. Once a quorum is present,
the vote of the holders of a majority of the stock having voting power present
in person or represented by proxy shall decide any question brought before the
meeting. Abstentions will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business at the Annual Meeting and
will not affect the outcome of the vote for the election of directors. However,
abstentions will have the same practical effect as votes cast against the
ratification of the appointment of Firley, Moran to serve as the independent
auditors of the Company. If you hold your shares with a broker and you do not
tell your broker how to vote, your broker has the authority to vote on both of
the proposals scheduled to be presented at the Annual Meeting.
The Board of Directors of the Company knows of no business that will be
presented for consideration at the Annual Meeting other than the matters
described in this Proxy Statement. If any other matters are presented at the
Annual Meeting, the persons named in the proxy card will vote in accordance with
their judgment, to the extent permitted by law.
All proxies delivered pursuant to this solicitation are revocable at any
time at the option of the persons executing them by giving written notice of
revocation to the Secretary of the Company at the address set forth above before
the Annual Meeting, by delivering another proxy bearing a later date or by
attending the Annual Meeting and voting in person. Stockholders who want to give
the proxy to someone other than the individuals named as proxies on the proxy
card may cross out the names of those individuals and insert the name of the
individual authorized to vote. Either the Stockholder or the individual
authorized to vote must present the proxy card at the meeting.
- 2 -
PROPOSAL NO. I:
ELECTION OF DIRECTORS
Board of Directors
The directors nominated for election at the Annual Meeting are Richard C.
Breeden, Thomas J. Hamel, R. Perry Harris, C. Wayne Kinser, and Olof Nelson. The
elected nominees for directors will hold office until the next Annual Meeting of
Stockholders and until their respective successors are elected and qualify.
Should any one or more of these nominees become unable to serve, or for good
cause will not serve, the Board of Directors may designate a substitute nominee
or nominees, in which event the shares represented by all valid proxies received
may be voted for such substitute nominee or nominees. The Board of Directors
knows of no reason why any nominee may be unable to serve as a director. Your
proxy will vote for each of the nominees unless you specifically withhold
authority to vote for a particular nominee.
During 1998, there were six meetings of the Board of Directors, and during
1999, there were four meetings of the Board of Directors. Each of the directors
who were appointed in 1998 and 1999 attended at least seventy-five (75%) of the
meetings of the Board of Directors during the periods that they served.
The Board of Directors recommends a vote FOR the election of all nominees.
- --------------------------------------------------------------------------------
Biographies of our Board Nominees
- --------------------------------------------------------------------------------
Richard C. Breeden Director since 1997 Age 50
Richard C. Breeden has been Chairman of the Board of Directors and Chief
Executive Officer of the Company since October 1997. Since 1996, Mr. Breeden has
also been Trustee of the Estate. An honors graduate of Stanford University, and
the Harvard Law School, Mr. Breeden served in the White House as a senior
economics and financial advisor to President George Bush, where he was the
principal architect of the government's program to restructure the savings and
loan industry and to create the Resolution Trust Corporation. From 1989 through
1993, he served as Chairman of the U.S. Securities and Exchange Commission (the
"SEC"), following appointment by President Bush and unanimous confirmation by
the U.S. Senate. From 1993 through 1996, Mr. Breeden served as chairman of the
worldwide financial services practice of Coopers and Lybrand L.L.P. Mr. Breeden
currently serves on the boards of eSpeed, Inc., W.P. Stewart & Co., Ltd., and
Clarity Holdings, Inc. Mr. Breeden is also a director of the Little Orchestra
Society of New York, and he serves as a trustee of the New York Yacht Club. Mr.
Breeden serves as a director of the Company in his capacity as Trustee and as a
representative of the Estate.
- --------------------------------------------------------------------------------
Thomas J. Hamel Director since 1996 Age 41
Thomas J. Hamel has been a director of the Company since 1996, and served as
President and Chief Operating Officer of the Company during fiscal year 1997. He
has been an Executive Vice President of the Company since 1998. Mr. Hamel is
also the President and Chief Operating Officer of Resort Funding, Inc. ("Resort
Funding"), a wholly owned subsidiary of the Company, and has held those
positions since February 1996. From 1992 through October 1996, Mr. Hamel served
as Executive Vice President of Resort Funding and was responsible for business
development.
- --------------------------------------------------------------------------------
- 3 -
- --------------------------------------------------------------------------------
R. Perry Harris Director since 1998 Age 60
R. Perry Harris has been a director of the Company since 1998 and is the
President of Eastern Resorts Company, LLC, a subsidiary of the Company ("Eastern
Resorts"). He has been an Executive Vice President of the Company since 1998.
Formed in 1994, by Mr. Harris, Eastern Resorts is the successor to Inn Group
Associates. Mr. Harris founded Inn Group Associates in 1981. A graduate of the
University of Massachusetts, Mr. Harris began his early career at Digital
Equipment Corporation. Mr. Harris founded First Data Corporation in 1970 and
served as a director and its President until 1977. Mr. Harris has spent the last
19 years as the Chief Executive Officer of Eastern Resorts. He is a trustee of
the American Resort Development Association ("ARDA") and is a Registered
Professional within ARDA. Mr. Harris is also past chairman of ARDA New England.
- --------------------------------------------------------------------------------
C. Wayne Kinser Director since 2000 Age 66
C. Wayne Kinser is the former president and founder of Peppertree Resorts, Ltd.
("Peppertree Resorts"), and has been a director of the Company since March of
this year. Mr. Kinser has a background in real estate development and building
materials. He began his career during high school as he worked during summer
vacations for his father's insulation company, Home Insulation of Asheville,
North Carolina. Upon graduating from Wake Forest University in Winston-Salem,
North Carolina in 1955, with a degree in business administration, he joined his
father full-time in the family firm. In the 1960's Mr. Kinser and a friend
founded Heritage Homes and Pioneer Land Development, Inc. They divided their
holdings in the early 1970's and Mr. Kinser became active in other construction
areas. In 1977, he founded Peppertree Vacation Club Villas and became one of the
first timeshare developers in North Carolina. Throughout the years, he built and
acquired other resorts and, in 1982, established Peppertree Resorts, from which
he resigned upon its acquisition by the Company in November 1999. Mr. Kinser is
active with the American Resort Development Association (ARDA).
- --------------------------------------------------------------------------------
Olof Nelson Director since 2000 Age 53
Olof Nelson has been a director of the Company since March 2000. Mr. Nelson is
President of the Bankers Trust Company Connecticut Ltd., which represents
Private Banking for Bankers Trust in the New England region of the United
States, a position he has held since January 1997. For more than 10 years prior
to joining Bankers Trust, Mr. Nelson was President, Chairman, and Chief
Executive Officer of Consolidated Hydro, Inc., one of the largest independent,
owner/operators of hydroelectric power in North America with business operations
in 15 states and two provinces in Canada. A native of Sweden, Mr. Nelson
received a Master's degree from the University of Stockholm, and graduated from
the Royal Swedish Naval Academy. He was co-founder and later Vice Chairman of
the National Independent Energy Producers, and Director of the National
Hydropower Association.
- --------------------------------------------------------------------------------
- 4 -
Committees Of The Board Of Directors
The Board of Directors has an Audit Committee and a Compensation
Committee. The Company does not have a Nominating Committee.
The Audit Committee
Olof Nelson, Chair
C. Wayne Kinser
Richard C. Breeden
The Audit Committee of the Board of Directors was established on October
29, 1997, and is responsible for the review and examination of matters which
primarily relate to a financial audit of the Company and its subsidiaries,
including the audit and certification by the Company's independent auditors of
the Company's financial statements, the accounting principles used by the
Company for corporate and tax reporting purposes, the adequacy of financial and
accounting controls of the Company, the financial and performance and audit of
the Company's retirement plan, the recommendation to the Board of Directors of a
firm of Certified Public Accountants to serve as independent auditors of the
Company, and such other matters which, in the view of the Audit Committee, could
affect the financial value of the Company. Mr. Nelson, the Chairman of the
Committee, Mr. Breeden and Mr. Kinser were appointed as members in March 2000.
The Audit Committee held one meeting during fiscal year 1998, no meetings during
fiscal year 1999, and has held one meeting to date in 2000.
The Compensation Committee
Olof Nelson, Chair
C. Wayne Kinser
R. Perry Harris
The Compensation Committee of the Board of Directors was established on
October 29, 1997, and is responsible for the administration of the 1997 Long
Term Incentive Plan ("LTIP"), including the determination of the terms and
conditions thereunder, such as the exercise price for the stock options granted
to employees and directors of the Company. At the Company's Annual Meeting of
the Stockholders on December 8, 1998, the Company's Stockholders approved an
amendment to the LTIP which increased the shares available from 1,600,000 to
3,500,000 and the number of shares to be granted in any year from 400,000 to
1,000,000. The term of the LTIP is 10 years, but the Company's Board of
Directors may discontinue the LTIP in its discretion. Mr. Nelson, Mr. Harris and
Mr. Kinser were appointed as members in March 2000. The Compensation Committee
held no meetings during fiscal years 1998 or 1999.
Compensation of Directors
Mr. Nelson was granted 50,000 options at an exercise price of $ 4.37 per
share upon joining the board in March 2000. The directors of the Company are not
otherwise compensated by the Company for their services as directors. The
directors are, however, reimbursed for expenses incurred on behalf of the
Company in the performance of their duties as directors of the Company.
- 5 -
Executive Officers
The executive officers of the Company as of March 31, 2000, are as
follows:
Name Age Title
- --------------------------------------------------------------------------------
Richard C. Breeden 50 Chairman, President and Chief
Executive Officer
Thomas J. Hamel 41 Executive Vice President
R. Perry Harris 60 Executive Vice President
Gerald L. Klaben, Jr. 36 Chief Financial Officer and Senior
Vice President
Herbert R. "Butch" Patrick, Jr. 44 Senior Vice President and Treasurer
Richard G. Winkler 43 Senior Vice President, Secretary and
General Counsel
Donald K. Clayton 45 Senior Vice President
James R. Petrie 36 Controller
James A. Mercurio 40 Senior Vice President
Gerald L. Klaben, Jr. currently serves as Chief Financial Officer and
Senior Vice President of the Company. Mr. Klaben also served as Executive Vice
President and Treasurer of the Company from October 1997 through October 1998.
Mr. Klaben is also the Executive Vice President and Chief Financial Officer of
Resort Funding, Inc., a subsidiary of the Company, and has held those positions
since July 1996. From November 1989 through July 1996, he served as a financial
officer of the Pyramid Companies, one of the largest developers of shopping
malls in the Northeastern United States. Mr. Klaben is a graduate of LeMoyne
College.
Herbert R. "Butch" Patrick Jr. was appointed Senior Vice President and
Treasurer of the Company in March 2000. Mr. Patrick also serves as the Chief
Financial Officer of Peppertree Resorts, a position he has held since 1996.
Before coming to work for Peppertree Resorts, Mr. Patrick was a partner in
Painter, Patrick & Russell, PA, a certified public accounting firm located in
Asheville, North Carolina, in which position he served as Peppertree Resorts'
outside auditor for 19 years. Mr. Patrick is a member of the North Carolina
Association of Certified Public Accountants and is a graduate of East Carolina
University.
Richard G. Winkler has been Senior Vice President of the Company since
October 1998 and was appointed General Counsel of the Company in August 1999.
Since August 1999, Mr. Winkler has also been General Counsel of Resort Funding.
Mr. Winkler also serves as Senior Vice President, Chief Operating Officer and
General Counsel of Eastern Resorts, a position he has held since October of
1998. Mr. Winkler has been General Counsel to Eastern Resorts and its
predecessor, Inn Group Associates, since 1983 and, since 1994, a Vice President
of Eastern Resorts. Mr. Winkler received his B.A. degree from the University of
Rhode Island and his J.D. from the New England School of Law.
- 6 -
Donald K. Clayton was appointed Senior Vice President of the Company in
March 2000. Mr. Clayton also serves as Senior Vice President of Sales and
Marketing for Peppertree Resorts, a position he has held since 1994. Mr. Clayton
joined Peppertree Resorts as a Sales Manager in 1983 and is a graduate of Auburn
University.
James R. Petrie has been Controller of the Company since 1997 and
Controller of Resort Funding, since September 1996. From June 1992 through
September 1996, he served in various accounting and financial capacities for the
Pyramid Companies. Mr. Petrie is a graduate of Loyola College.
James A. Mercurio has been Senior Vice President of the Company since
October 1998, and served as Treasurer of the Company from 1998 through March
2000. Mr. Mercurio also serves as Vice President, Treasurer and Chief Financial
Officer of Eastern Resorts, a position he has held since 1994, and has served as
its controller since 1987. From 1984 through 1987, Mr. Mercurio served as
controller of a large regional developer and manager of apartment complexes, and
from 1981 through 1984, he was in the audit and tax departments of the then
Peat, Marwick, Mitchell & Co. where he became licensed as a Certified Public
Accountant in 1983.
- 7 -
Ownership Of Stock By Management And Principal Stockholders
The following table sets forth information as of March 31, 2000, with
respect to persons known to the Company to be the beneficial owners of more than
five percent (5%) of the outstanding shares of Common Stock and Series 2
Preferred Stock of the Company, and with respect to the beneficial ownership of
the outstanding shares of Common Stock and Series 2 Preferred Stock of the
Company held by (i) principal Stockholders; (ii) each director or nominee for
director; (iii) Richard C. Breeden, Thomas J. Hamel , R. Perry Harris, Gerald L.
Klaben, Jr., and Richard G. Winkler (together, the "Named Executive Officers");
and (iv) the directors and executive officers as a group. Except as otherwise
noted below, each director or nominee for director and the executive officers
have sole voting and investment power with respect to the shares they own.
Title of Class Name Number of Shares Percent of
Beneficially Owned Class (2)
- ----------------------------------------------------------------------------------------------------------------------
Common Stock, Richard C. Breeden, as Trustee for the
Par value $.01 Bennett Funding Group, Inc. consolidated Estate.... 20,685,248 73.6%
Per share Richard C. Breeden, individually................... -0- 0%
Thomas J. Hamel................................... -0- 0%
R. Perry Harris (1)............................... 3,200,000 11.3%
C. Wayne Kinser.................................... 1,978,347 7.4%
Olof Nelson........................................ -0- 0%
Gerald L. Klaben, Jr. ........................... -0- 0%
Richard G. Winkler................................. -0- 0%
All directors and executive officers as a group
(11 persons)....................................... 5,316,839 18.9%
Series # 2 Richard C. Breeden, as trustee for
Class A The Bennett Funding Group, Inc..................... 10,000 100.00%
Preferred Stock
(1) Includes 160,000 shares owned by Mr. Harris' wife, Karen Harris. Mr. Harris
disclaims beneficial ownership of these shares.
(2) Percentages are based upon 28,089,722 shares of Common Stock outstanding.
- 8 -
Executive Compensation
The following table summarizes compensation information for the last three
fiscal years for (i) Mr. Breeden, the Chief Executive Officer of the Company,
and (ii) the other Named Executive Officers.
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
Awards Payouts
Other Annual Securities
Compensation Underlying All Other
Name and Principal Fiscal Salary Bonus (2) Options Compensation
Position (1) Year ($) ($) ($) (#) ($)
- ----------------------------------------------------------------------------------------------------------------
Richard C. Breeden, 1999 -0- -0- -0- -0- -0-
Chairman, President and 1998 -0- -0- -0- -0- -0-
Chief Executive Officer (3) 1997 -0- -0- -0- -0- -0-
Thomas J. Hamel, Director 1999 229,472 80,000 -0- -0- -0-
and Executive Vice President 1998 223,159 80,000 -0- -0- -0-
1997 227,463 80,000 -0- 300,000 2,250(4)
R. Perry Harris, Director and 1999 302,416 -0- -0- -0- -0-
Executive Vice President 1998 101,387 -0- -0- -0- -0-
Gerald L. Klaben, Jr. 1999 156,926 50,000 -0- -0- -0-
Chief Financial Officer 1998 152,834 50,000 -0- -0- -0-
and Senior Vice President 1997 149,819 50,000 -0- 75,000 900(4)
Richard G. Winkler, Senior 1999 142,292 40,000 -0- -0- -0-
Vice President, Secretary 1998 45,485 -0- -0- 37,500 -0-
and General Counsel
(1) Messrs. Hamel and Klaben became executive officers of the Company during
fiscal year 1996 and Mr. Breeden became Chief Executive Officer during
fiscal year 1997. Prior to 1996, Mr. Hamel was an executive officer of
Resort Funding. R. Perry Harris and Richard G. Winkler became executive
officers of the Company in 1998.
(2) Excludes certain perquisites which do not exceed the lesser of $50,000 or
10% of the named individual's aggregate salary and bonus.
(3) For the periods ending December 31, 1997, 1998, and 1999, the Company did
not compensate Mr. Breeden for his services as Chief Executive Officer.
Mr. Breeden serves as Chief Executive Officer in his capacity as Trustee,
and is not separately compensated by the Estate for his services to the
Company.
(4) The amount represents Company-paid life insurance premiums.
- 9 -
Option Grants in Fiscal Years 1998 and 1999
The following table provides information about option grants to the
Named Executive Officers of the Company during fiscal years 1998 and 1999.
OPTION GRANTS FISCAL YEARS 1998 AND 1999
(Individual Grants)
Fiscal Number of
Year Securities Percent of Total Exercise or
Name Underlying Options Granted Base Price Expiration
Options to Employees in ($/Sh) Date
Granted (#) Fiscal Year
- ----------------------------------------------------------------------------------------------------------
Richard C. Breeden (1) 1999 -0- 0% n/a n/a
1998 -0- 0% n/a n/a
Thomas J. Hamel 1999 -0- 0% n/a n/a
1998 -0- 0% n/a n/a
R. Perry Harris 1999 -0- 0% n/a n/a
1998 -0- 0% n/a n/a
Gerald L. Klaben Jr. 1999 -0- 0% n/a n/a
1998 -0- 0% n/a n/a
Richard G. Winkler 1999 -0- 0% n/a n/a
1998 37,500 3.7% $4.31 10/21/08
(1) The Estate is the beneficial holder of 200,000 stock options issued in the
name of Mr. Breeden as Trustee.
- 10 -
Options Exercised and Year-End Option Holdings
The following table provides information about stock option exercises
by the Named Executive Officers during fiscal years 1998 and 1999 and stock
options held by each of them at fiscal year-end.
AGGREGATED OPTION EXERCISES IN FISCAL YEARS 1998 AND 1999
AND FY-END OPTION VALUES
Fiscal Shares
Year Acquired Value Number of Securities Value of Unexercised
Name on Realized Underlying Unexercised In-the-Money Options at Fiscal
Exercise ($) Options at Fiscal Year-End (#) Year-End ($) (1)
(#) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------------------------------------------
Richard C. Breeden (2) 1999 -0- -0- -0- -0- -0- -0-
1998 -0- -0- -0- -0- -0- -0-
Thomas J. Hamel 1999 -0- -0- 150,000 150,000 750,000 750,000
1998 -0- -0- 150,000 150,000 450,000 450,000
R. Perry Harris 1999 -0- -0- -0- -0- -0- -0-
1998 -0- -0- -0- -0- -0- -0-
Gerald L. Klaben, Jr. 1999 -0- -0- 37,500 37,500 187,500 187,500
1998 -0- -0- 37,500 37,500 112,500 112,500
Richard G. Winkler 1999 -0- -0- 9,375 28,125 15,844 47,531
1998 -0- -0- -0- 37,500 -0- -0-
(1) Values for "in-the money" outstanding options represent the positive
spread between the respective exercise prices of the outstanding options
and the value of the Common Stock as of December 31, 1999.
(2) The Estate is the beneficial holder of 200,000 stock options issued in the
name of Mr. Breeden as Trustee, issued on December 23, 1997.
- 11 -
401(k) Pension Plan Benefits
The executive officers of the Company may participate in profit sharing
plans and 401(k) pension plans (collectively the "Plans") sponsored by the
individual subsidiaries of the Company, either Resort Funding, Eastern Resorts
or Peppertree Resorts. The Plans all qualify under Internal Revenue Code section
401(a) and the eligibility and contribution requirements are not more favorable
for highly compensated employees than for other employees. Employees are allowed
to contribute from 1% to 15% of their annual compensation. The Plans provide
that on an annual basis, the Company may provide matching contributions based
upon the employee contributions and is also able to make a voluntary profit
sharing contribution on behalf of each employee which will be allocated based
upon the employee's compensation. Amendments were made to the Plans on December
31, 1999, to provide for the provisions below. The Company's goal is to have a
global profit sharing and 401(k) pension plan established and implemented for
all eligible Company employees by year end 2000.
Key provisions of the Plans:
o 25% employer matching on the first 6% of participant contributions,
with additional Discretionary Matching Contribution possible at Plan
Year end
o Leased and part-time employees are not eligible to participate
o Vesting schedule
Less than 1 year = 0%
1 year but less than 2 = 25%
2 years but less than 3 = 50%
3 years but less than 4 = 75%
4 years or more = 100%
o Allowance of hardship withdrawals prior to age 59 1/2
Employment and Consulting Agreements
The Company entered into employment agreements with Messrs. Harris, Hamel
and Klaben on August 24, 1998, May 29, 1997, and July 15, 1996, respectively.
The employment agreements provide for an initial employment term of five years
for Mr. Harris, and three years for Mr. Hamel and Mr. Klaben, and thereafter for
successive one-year renewal terms unless either party gives notice of
non-renewal at least 90 days prior to the expiration of the then term. The
employment agreements generally provide for payment of an annual base salary,
subject to review for increase by the Compensation Committee and increases
annually by the same percentage increase as the urban consumer price index. Base
salaries are, as of year-end 1999, $302,416, $229,472, and $156,926, for Messrs.
Harris, Hamel and Klaben, respectively. The employment agreements also generally
provide for: (i) continued payment of base salary, target cash bonuses, and
other benefits for the remainder of the employment period in the event the
executive's employment is terminated by the Company for any reason other than
for "cause" or if the executive resigns for "good reason"; (ii) participation in
certain benefit plans and programs (including life insurance and medical
benefits); (iii) other restrictive covenants including nondisclosure,
non-compete and non-solicitation of employees; (iv) annual and long term
incentive compensation opportunities; and (v) deferred compensation
arrangements. The employment agreements also provide minimum guidelines for
target annual incentive opportunity as a percent of their base salaries. Mr.
Harris' agreement provides for an annual bonus of 40%-60% of the base salary if
Eastern Resorts achieves targeted levels of profitability, which it failed to do
in either 1998 or 1999. Mr. Hamel's agreement provides for not less than an
$80,000 annual bonus. Mr. Klaben's agreement provides for not less than a
$50,000 annual bonus. In addition, for Mr. Harris, the Company is a party to the
agreement solely for the purpose of (i) the issuance of Options to Mr. Harris
covering (1) 30,000 Option Shares if the Company reaches at least 100%, but less
than 125%, of the "Pre-Tax Profit Target" (as defined
- 12 -
in this agreement) for any fiscal year, and (2) 60,000 Option Shares if the
Company equals or exceeds 125% of the Pre-Tax Profit Target for a fiscal year;
(ii) taking related actions intended to facilitate issuance of the Common Stock;
(iii) seeking the opinion of the Board of Directors of the Company as to the
level of pre-tax profits of the Company; and (iv) guaranteeing the performance
by Eastern Resorts of all of its obligations under the agreement. The agreement
provides that Options granted will have an exercise price of the fair market
value of the Option Shares on the date of grant of such Options and will expire
on the tenth anniversary from their date of grant. Mr. Hamel and Mr. Klaben were
granted Options as indicated in the section above on Aggregated Option Exercises
in Fiscal Years 1998 and 1999.
Legal Proceeding Involving Former Executive Officer and Director
In January 1996, Mr. Joseph Mooney filed a lawsuit in the Circuit Court of
Broward County, Florida against the Company, Murray Bacal (the former Chairman
of the Board of the Company), and another defendant alleging, among other
things, that the Company breached its obligations to him under a termination
agreement and a prior letter of intent that Mr. Mooney claims would have
permitted him to acquire certain assets of the Company upon his resignation in
May 1995 as Senior Executive Vice President and Director. Mr. Mooney alleged
that the Company tortiously interfered with certain business opportunities that
were rightfully his and sought damages in excess of $1.1 million. The Company in
turn filed certain counterclaims against Mr. Mooney alleging that Mr. Mooney
wrongfully retained certain Company property and wrongfully interfered with the
Company's conduct of its business, in violation of the terms of the termination
agreement. On June 15, 1999, the court dismissed with prejudice Counts I, II,
and III of Mr. Mooney's Third Amended Complaint against the Company indicating
that the letter of intent was not a binding enforceable agreement. The court
also denied the tortious interference claim. Mr. Mooney appealed the dismissal
to the Fourth District Court of Appeals, by filing an Initial Brief on December
17, 1999. Mr. Mooney also moved to bifurcate the Company's counterclaim from the
main claims against the remaining defendants. The court agreed to bifurcate the
claims, but has required the Company to participate in discovery. The Company
continues to vigorously pursue its counterclaims against Mr. Mooney.
- 13 -
PROPOSAL NO. II:
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Based on the recommendation of its Audit Committee, the Board of Directors
has appointed Firley, Moran to retain their position as the Company's
independent auditors for 1999 and 2000. Firley, Moran has been the Company's
independent auditors since October 1996. If the appointment of Firley, Moran is
not ratified, the Board of Directors will review its future selection of
auditors.
Firley, Moran is expected to have a representative at the Annual Meeting.
This representative will be available to respond to appropriate questions at
that time and will have an opportunity to make a statement, if he or she so
desires.
The Board of Directors recommends a vote FOR this proposal.
- --------------------------------------------------------------------------------
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act"),
as amended, requires the Company's directors and executive officers and persons
who own more than 10% of the Company's Common Stock to report their ownership
and changes in their ownership of the Company's Common Stock or Series 2
Preferred Stock to the SEC. Directors, officers and greater than 10%
Stockholders also are required to furnish the Company with copies of all Section
16(a) forms they file. Specific due dates for these reports have been
established by the SEC and the Company is required to report in this proxy
statement any failure of its directors, executive officers and greater than 10%
Stockholders to file by these dates. During fiscal year 1998, with respect to
James A. Mercurio and Richard G. Winkler, a Form 3 for each was not filed on a
timely basis. During fiscal year 1999, all reports were filed on a timely basis.
Expenses Of Solicitation
Proxies may be solicited by the Company's directors, officers or other
employees, without additional compensation, personally or by written
communication, telephone or other electronic means. All expenses incurred in
connection with the solicitation of proxies will be borne by the Company. The
Company will also request brokerage houses, custodians, fiduciaries and nominees
to forward proxy materials to their principals and will reimburse them for their
reasonable expenses in doing so.
- 14 -
Stockholders Proposals
Proposals of Stockholders intended to be presented at the 2001 Annual
Meeting of Stockholders must be received by the Company on or before December 6,
2000, to be eligible for inclusion in the Company's proxy statement and proxy
relating to that meeting. Proposals should be addressed to Attn: Legal
Department, Equivest Finance, Inc., Secretary, P.O. Box 2000, Newport, Rhode
Island, 02840. Under SEC Rule 14-4a, we will be able to use proxies given to us
for the 2001 Annual Meeting to vote for or against any Stockholder proposal
submitted other than pursuant to Rule 14a-8 at our discretion unless the
proposal is submitted to us on or before February 19, 2001. If the proposal is
submitted before the deadline, we will retain our discretion to vote proxies we
receive as long as we include in our Proxy Statement information on the nature
of the proposal and how we intend to exercise our voting discretion and the
proponent does not issue a proxy statement.
Other Information
As to any other matter or proposal that may properly come before the
meeting, including voting for the election of any person as a director in place
of a nominee named herein who becomes unable to serve or for good cause will not
serve, and voting on proposals omitted from the proxy statement pursuant to the
rules of the SEC, it is intended that proxies received will be voted in
accordance with the discretion of the proxy holders, to the extent permitted by
law.
The following reports are enclosed for your further information, none of
which under the Exchange Act form any part of the material for the solicitation
of proxies: Company's Annual Report on Form 10-KSB for the fiscal year ending
December 31, 1999. Copies of the Company's 1998 Form 10-KSB may be requested,
free of charge, by any stockholder by calling the Company's Department of
Investor Relations at (203) 618-0065, or through www.investor@equivest.com.
--------------------------------
April 13, 2000
- 15 -
APPENDIX A - FORM OF PROXY
PLEASE MARK VOTES AS IN THIS EXAMPLE |X|
REVOCABLE PROXY
EQUIVEST FINANCE, INC.
ANNUAL MEETING OF STOCKHOLDERS MAY 15, 2000
The undersigned hereby appoints Richard G. Winkler or Sherri M. Durand as
the true and lawful agents and proxies of the undersigned, with full power of
substitution, to represent the undersigned and to vote all shares of stock which
the undersigned is entitled in any capacity to vote at the Combined 1999 and
2000 Annual Meeting of Stockholders of EQUIVEST FINANCE, INC. (the "Company") to
be held at the Long Wharf Resort, 5 Washington Street, Newport, Rhode Island, at
11:00 a.m. on Monday, May 15, 2000, and at any and all adjournments and
postponements thereof, on the matters set forth below, and, in their discretion,
upon all matters incident to the conduct of the Annual Meeting of the
Stockholders and upon such other matters as may properly be brought before the
meeting. This proxy revokes all prior proxies given by the undersigned.
1. The election of directors of all nominees listed (except as marked to the
contrary below):
|_| FOR |_| WITHHOLD |_| FOR ALL EXCEPT
Richard C. Breeden, Thomas J. Hamel, R. Perry Harris, C. Wayne Kinser, and Olof
Nelson
INSTRUCTION: To withhold authority for any individual nominee, mark "For All
Except" and write that nominee's name in the space provided below.
2. The ratification of the appointment of Firley, Moran, Freer, & Eassa, P.C.
to serve as independent auditors of the Company for fiscal years 1999 and
2000.
|_| FOR |_| AGAINST |_| ABSTAIN
(Continued, and to be signed, on the other side)
(Continued from other side)
This Proxy, when properly executed, will be voted in the manner directed hereby
by the undersigned Stockholder. If no direction is made, this Proxy will be
voted FOR all items set forth herein.
Receipt is hereby acknowledged for the Notice and Proxy Statement for this
Combined 1999 and 2000 Annual Meeting, and for the annual report of EQUIVEST
FINANCE, INC. for fiscal year 1999.
Please be sure to sign and date Date ____________________________
this Proxy on the line below.
- -------------------------------------- ---------------------------------
Stockholder sign above Co-holder (if any) sign above
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY. The directors
recommend a vote FOR items 1 and 2.
Please sign this proxy exactly as your name appears hereon. Joint owners should
each sign. Trustees, executors, administrators and others signing in a
representative capacity should indicate this capacity. An authorized officer may
sign on behalf of a corporation and should indicate the name of the corporation
and his capacity.
Please indicate whether you will be attending the Annual Meeting of the
Stockholders in person.
|_| WILL ATTEND |_| WILL NOT ATTEND