UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [x]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
EQUIDYNE CORPORATION
(Name of Registrant as Specified in its Charter)
MFC BANCORP LTD.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was
determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
PRELIMINARY COPY, SUBJECT TO COMPLETION; MATERIALS DATED JULY 11, 2003
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July [15] , 2003
- ---------
PROXY STATEMENT
OF
MFC BANCORP LTD.
RELATING TO THE
2003 ANNUAL MEETING OF STOCKHOLDERS OF
EQUIDYNE CORPORATION
PLEASE SIGN, DATE AND RETURN THE ENCLOSED GREEN PROXY CARD
TO THE STOCKHOLDERS OF EQUIDYNE CORPORATION:
This proxy statement (the "Proxy Statement") and the enclosed green proxy card
are being furnished by MFC Bancorp Ltd. ("MFC", "we" or "us") for the
solicitation of proxies from you, the holders of the shares of common stock of
Equidyne Corporation ("Equidyne" or the "Company"), to be voted at Equidyne's
2003 annual meeting of stockholders to be held September 9, 2003, including any
----------------------------
adjournments, postponements, continuance or rescheduling thereof and any special
meeting called in lieu thereof (the "Annual Meeting").
We are soliciting your proxy to vote for the following proposals (the
"Proposals"), which we intend to submit for approval at the Annual Meeting:
ELECTION OF DIRECTORS: To elect Michael J. Smith, Roy Zanatta,
Mark Steinley, Greg Elderkin, Dr. Stefan Feuerstein, James Musacchio
and James Carter (the "MFC Nominees") to serve as the directors
of the Company until their respective successors are duly elected
and qualified or their earlier resignation or removal (if fewer
than seven directors are elected, we propose to elect the MFC
Nominees in the order listed above); and
REVOCATION OF BYLAWS to adopt the following stockholders' resolution
(which we will refer to as the "Bylaw Revocation Proposal"):
RESOLVED, that each and every provision of the Amended and
Restated Bylaws (the "Bylaws") of Equidyne Corporation
adopted on or after May 1, 2003 and prior to the adoption
of this resolution is hereby repealed.
THIS SOLICITATION IS BEING MADE BY MFC AND NOT ON BEHALF
OF EQUIDYNE OR THE CURRENT BOARD OF DIRECTORS
MFC is not aware of any other proposals to be brought before the Annual Meeting.
However, should other proposals be brought before the Annual Meeting, the
proxies named on the enclosed green proxy card will vote on such matters in
their discretion.
We are soliciting proxies for use at the Annual Meeting.
--
Equidyne's current board of directors (the "Current Board")
---
announced the date of the Annual Meeting to be September 9, 2003 and
---------------------------
the record date for determining those stockholders entitled to receive notice
of and vote at the Annual Meeting to be July 14, 2004
-------------------
(the "Record Date"). Stockholders of record at the close of business on the
Record Date will be entitled to one vote at the Annual Meeting for each share of
Equidyne common stock held on the Record Date. We are asking you to mark, sign
and date the enclosed green proxy card and return it in the enclosed,
postage-paid envelope to our proxy solicitor, Georgeson Shareholder
Communications Inc., as set forth below. We beneficially own approximately 8.7%
of the Company's common stock and intend to vote our shares for the Proposals.
ANY PERSON WHO HELD SHARES OF EQUIDYNE COMMON STOCK ON THE RECORD DATE MAY GIVE
A PROXY. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, WE URGE YOU TO
SIGN AND DATE THE ENCLOSED GREEN PROXY CARD AND RETURN IT IN THE POSTAGE-PAID
ENVELOPE PROVIDED.
YOUR LATEST-DATED PROXY IS THE ONLY ONE THAT COUNTS, SO YOU MAY RETURN THE GREEN
PROXY CARD EVEN IF YOU HAVE ALREADY DELIVERED A PROXY. WE URGE YOU NOT TO
RETURN ANY PROXY SENT TO YOU BY EQUIDYNE OR THE CURRENT BOARD.
This Proxy Statement and the enclosed green proxy card are first being sent or
given to stockholders of Equidyne on or about July [15], 2003.
----------
YOUR VOTE IS IMPORTANT!
TO VOTE FOR OUR PROPOSALS, PLEASE DO THE FOLLOWING:
* If you hold your shares of Equidyne common stock in your own name, please
SIGN, DATE and MAIL or hand-deliver the enclosed green proxy card today in the
enclosed postage-paid envelope to our proxy solicitor, Georgeson Shareholder
Communications Inc., at the address below.
* If you hold your shares of Equidyne common stock in the name of one or
more brokerage firms, banks or nominees, only they can exercise voting rights
with respect to your shares, and then only upon receipt of your specific
instructions. Accordingly, it is critical that you promptly contact the person
responsible for your account and give instructions to SIGN, DATE and MAIL (or
fax both sides of) the GREEN proxy card representing your shares to our proxy
-----
solicitor. We urge you to confirm in writing your instructions to the person
responsible for your account and to provide a copy of those instructions to us
in care of Georgeson Shareholder Communications Inc., who is assisting in this
solicitation, at the address and telephone numbers below and on the back cover
of this proxy statement, so that we will be aware of all instructions and can
attempt to ensure that such instructions are followed.
IF YOU HAVE ANY QUESTIONS OR REQUIRE ANY ASSISTANCE IN EXECUTING OR DELIVERING
YOUR PROXY OR VOTING INSTRUCTIONS, PLEASE WRITE OR CALL:
Georgeson Shareholder Communications Inc.
17 State Street, 10th Floor
---------------------------
New York, New York 10004 Shareholders Call Toll Free: (800) 293-6057
------------------------------------- --- --------
Banks and Brokerage Firms, Please Call Collect: (212) 440-9800
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TABLE OF CONTENTS
-----------------
ITEM PAGE
- ---- ----
Questions and Answers about this Proxy Statement 1
Information Regarding Forward-Looking Statements 6
Reasons for this Proxy Solicitation 6
Poor Recent Operating Results 6
Excessive Management Compensation 7
Management's Actions are not Consistent with Stockholders'
Interests 8
Management Entrenchment 8
Lack of Direction 9
We Believe New Leadership can make Equidyne Succeed 9
Additional Information Regarding the Proposals 10
--
Proposal 1: Election of the MFC Nominees 10
--
Proposal 2: Repeal of Bylaws Adopted on or after May 1, 2003 11
Information about the MFC Nominees 13
--
Voting Securities 16
--
Litigation 16
--
Solicitation 16
--
Stockholder Proposals 17
--
Appraisal Rights 17
--
Reimbursement of Costs 17
--
Special Instructions 17
--
Other Matters to be Voted Upon 18
--
Further Information 19
--
Annex I - Information Concerning The Company I-1
Annex II - Security Ownership of Certain Beneficial Owners
and the Company's Officers and Directors II-1
Annex III - Information Concerning MFC Bancorp Ltd.
and the MFC Nominees III-1
Appendix - Green Proxy Card
QUESTIONS AND ANSWERS ABOUT THIS PROXY STATEMENT
Q: WHO IS MAKING THE PROXY SOLICITATION?
A: This proxy solicitation is being made by MFC. MFC beneficially owns
approximately 8.7% of the Company's common stock. For more information about
MFC, please refer to Annex III hereto. For more information on Equidyne, please
refer to Annex I hereto.
Q: WHAT ARE WE PROPOSING?
A: You are being asked for a proxy to be voted in favor of:
* Electing the MFC Nominees to serve as the directors of Equidyne. The MFC
Nominees together have over 40 years of management experience advising and
restructuring troubled enterprises;
* Approving the following resolution:
RESOLVED, that each and every provision of the Amended and Restated Bylaws of
Equidyne adopted on or after May 1, 2003 and prior to the adoption of this
resolution, is hereby repealed.
Q: WHY ARE WE SOLICITING YOUR PROXY?
A: We are soliciting your proxy to replace Equidyne's Current Board, whom we
believe are at least partially responsible for the Company's poor performance.
Our beliefs are based on the following, among other things:
* From February 22, 2000 to June 17, 2003, the Company's stock price
plummeted more than 95%, from the Company's peak stock price of $9.00 to
----------------------------------
$0.41.(1) The Company's market capitalization decreased from more than $151
million to approximately $6.1 million during this period. (2) Marcus R. Rowan(3)
---
and Jim Fukushima, two of the Company's four current directors, were
directors throughout this period.
* From December 31, 2001, the date Marcus Rowan became the Chief Executive
Officer and Mark Myers became President, until June 17, 2003 the Company's stock
price has decreased over 50%.(4)
* For the nine months ended April 30, 2003 the Company's net sales were only
$65,000, which we believe indicates a minimal level of business activity.
------------------ --
Nonetheless, the Company has continued to incur losses throughout the 2003
fiscal year, including an operating loss of $687,000 for the three months ended
April 30, 2003 and an operating loss of $2,584,000 for the nine months ended
April 30, 2003.(5)
- ----------------
(1) Source: American Stock Exchange website.
(2) Source: Based on 16,823,911 shares outstanding as of March 20, 2000, as
reported in the Company's Quarterly Report on Form 10-QSB
filed on March 21, 2000 and a share price of $9.00 per share
on February 22, 2000, and 14,984,803 shares outstanding as of
May 31, 2003 as reported in the Company's Quarterly Report on
Form 10-QSB filed June 13, 2003 and a share price of $0.41 on
June 17, 2003.
(3) Marcus Rowan only became an officer of the Company on
------------------------------------------------------------
December 31, 2001.
------------------
(4) Source: American Stock Exchange website.
(5) Source: Quarterly Report on Form 10-QSB for the period ended April 30,
2003 filed by Equidyne June 13, 2003.
1
* We believe that management has little stock ownership and therefore, in
-------------------- --
our opinion, its interests are not sufficiently aligned with the stockholders.
- --------------
According to public records on file with the Securities and Exchange Commission
(the "SEC"), the Company's Chief Executive Officer, President and Chief
Financial Officer held a combined total of only 148,300 shares (less than 1% of
the Company's outstanding shares) as of July 3, 2003.(6) MFC's interest
------- - --------------
in Equidyne, on the other hand, consists of voting rights over 1,304,233 shares
- --------------------------------------------------------------------------------
of which MFC is the registered holder of 100. MFC is also funding this
- --------------------------------------------------------------------------------
solicitation and is assuming the risks and financial responsibility of any
- --------------------------------------------------------------------------------
potential litigation which may arise in connection with such solicitation.
- --------------------------------------------------------------------------------
MFC also has an option to acquire 485,844 Shares of Equidyne from Concord
- --------------------------------------------------------------------------
Effekten AG ("Concord") for an exercise price of $0.45 per share.
- -----------------------------------------------------------------
* It is our belief that management compensation is excessive for a company
-----------------------
with the size and circumstances of Equidyne. The Company's Chief Executive
Officer, President and Chief Financial Officer have a combined base salary of
over $600,000 per year, or over nine times the Company's revenues during the
nine months ended April 30, 2003. In addition to salary, the Company paid
$187,000 of executive management bonuses in the quarter ended January 31, 2003.
The Company's Chief Executive Officer was also paid a bonus of $120,000(9) for
His "extraordinary" services to the Current Board in the first five months of
---------------
fiscal 2002.(10) Mr. Rowan also received a signing bonus in the amount of
-------------------------------------------------------------
$80,000 when he was appointed Chief Executive Officer in December 2001.(11)
- ------- ----
Mr. Rowan was paid $40,000 of his signing bonus during his first week
- --------------------------------------------------------------------------------
of employment, with the remaining $40,000 payable in equal installments on each
- --------------------------------------------------------------------------------
of April 1, 2002, July 1, 2002 and October 1, 2002, contingent upon Mr. Rowan's
- --------------------------------------------------------------------------------
continued employment.
- ---------------------
* The Company, in our belief, has performed very poorly, but despite this in
-----------------------------------------------------------------------
January 2003, the Current Board issued to the Company's Chief Executive Officer
and President an aggregate of 630,000 stock options at an exercise price of only
$0.34 per share,(12) a price equal to approximately one-third of the Company's
book value per share as set out in the Quarterly Report on Form 10-QSB for the
period ended January 31, 2003 and among the lowest market values of the shares
------------------------------------------------
for the entire month of January, 2003. This issuance is in addition to an
- ----------------------------------------
issuance of 1,050,000 options to the same two persons in December 2001
when they were appointed to their positions.(13)
* Since the management changes in December 2001, management has failed to
generate new revenue streams from the Company's existing technologies or to
successfully develop new business opportunities for the Company. Though the
Company has announced that it is seeking diversification strategies not
necessarily related to the medical field,(14) it has not announced any
transactions or material developments in this regard. In the meantime, overhead
expenses and losses, which we believe are excessive given the Company's total
-----------------------------------------------------------
revenues, have continued to deplete its capital
- -----------------------------------------------
- ---------------
(6) Source: Definitive additional materials filed by Equidyne under Form
-------------------------------------------------------------
DEFA14A on July 3, 2003.
------------------------
(7) Source: Quarterly Report on Form 10-QSB for the period ended April 30,
2003 filed by Equidyne on June 13, 2003.
(8) Source: Quarterly Report on Form 10-QSB for the period ended January
31, 2003 filed by Equidyne on March 14, 2003.
(9) Source: Ibid.
(10) Source: Annual Report on Form 10-KSB for the fiscal year ended July 31,
----------------------------------------------------------------------------
2002 filed by Equidyne on October 28, 2002.
---------------------------------------------------------------
(11) Source: Ibid.
-----
(12) Source: Form 4 filed by Marcus Rowan and Form 4 filed by Mark Myers
-----------------------------------------------------------
on January 30, 2003.
--------------------
(13) Source: Annual Report on Form 10-KSB for the fiscal year ended July
-----------------------------------------------------------
31, 2002 filed by Equidyne on October 28, 2002.
-----------------------------------------------------------
(14) Source: Ibid.
2
base. Further, management has not explained what investment expertise it
purports to have. If the Company pursues an investment strategy to create
stockholder value, we believe it should be overseen by directors with
--
substantial investment expertise such as the MFC Nominees.
* On January 21, 2003 the Current Board amended the Bylaws, revoking
stockholders' right to call a special meeting and reducing the maximum permitted
number of directors from ten to seven, among other changes. We believe these
changes disadvantage stockholders by making it more difficult to unseat
entrenched leadership.
Q: WHO ARE THE MFC NOMINEES?
A: The MFC Nominees are Michael J. Smith, Roy Zanatta, Mark Steinley, Greg
Elderkin, Dr. Stefan Feuerstein, John Musacchio and James Carter. None of the
MFC Nominees presently serve the Company in any capacity. The principal
occupation and business experience of each MFC Nominee is set forth in this
Proxy Statement under the section entitled "Information About the MFC Nominees"
on page 12, which we urge you to read. As shown therein, the MFC Nominees are
qualified individuals who, combined, possess over 40 years of management
experience advising and restructuring troubled enterprises.
Q: IF THE MFC NOMINEES ARE ELECTED, WHO WILL BE THE OFFICERS OF THE COMPANY
AND WHAT WILL THEIR COMPENSATION BE?
A: If the MFC Nominees are elected, we expect that they will terminate the
employment of Marcus R. Rowan as Equidyne's Chief Executive Officer and Mark C.
Meyers as its President. According to Equidyne's SEC filings, Mr. Rowan's
annual base salary is $250,000 and Mr. Meyers' is $190,000. For the fiscal year
ended July 31, 2002 Equidyne reported that Mr. Rowan received $334,898 in total
cash compensation for services to the Company and options to purchase 750,000
shares and Mr. Meyers received approximately $208,615 in total cash compensation
and options to purchase 300,000 shares. The Company also had disclosed that it
paid $187,000 of executive management bonuses in the quarter ended January 31,
- -
2003 without specifying how the bonuses were allocated. In January, 2003, Mr.
Rowan and Mr. Meyers were also awarded another 450,000 and 180,000 options,
respectively, at an exercise price of only $0.34 per share.
We expect that the MFC Nominees would appoint Michael Smith as Chairman and
Chief Executive Officer and Roy Zanatta as Secretary. Neither Mr. Smith nor Mr.
Zanatta would draw a salary or accrue any compensation until at least such time
--------------------------
as the Company consummates a transaction or becomes active in a new business
venture or activity.
- ---------------------
3
Q: HOW WOULD THE MFC NOMINEES AND NEW MANAGEMENT IMPROVE THE COMPANY'S
PERFORMANCE?
A: The MFC Nominees have extensive business experience, particularly in the
restructuring of troubled companies. For a discussion of the background of the
MFC Nominees, please refer to "Information About the MFC Nominees" on page 12.
If elected, the MFC Nominees will attempt to enhance shareholder value by:
* preserving the Company's cash by minimizing overhead expenses through the
elimination of excessive management salaries and the minimization of other
overhead expenses;
* discontinuing investments and expenses related to the needle free
industry, other than those which the MFC Nominees believe will realistically
produce an attractive return through realization of value from the Company's
existing technologies;
* seek new business opportunities, investments and acquisitions so as to
utilize the Company's capital and public listing to earn a return on the
Company's capital.
Q: WHO CAN VOTE AT THE ANNUAL MEETING?
A: Section 213 of the Delaware General Corporation Law (the "DGCL") gives
the Current Board the authority to fix the Record Date, which must neither be
more than 60 days nor less than 10 days prior to the Annual Meeting. If the
Current Board does not set a Record Date, the Record Date shall be the day
preceding the day on which notice of the Annual Meeting is given.
IF YOU OWNED SHARES OF THE COMPANY ON JULY 14, 2003 YOU HAVE THE RIGHT TO VOTE
-------
AT THE ANNUAL MEETING, EVEN IF YOU DISPOSED OF SOME OR ALL OF YOUR SHARES AFTER
THAT DATE.
Q: HOW MANY SHARES MUST BE VOTED IN FAVOR OF THE PROPOSALS TO ADOPT THEM?
A: When a quorum is present, all elections or questions other than the
election of directors are decided by a majority of votes cast of shares present
in person or represented by proxy. Thus the Bylaw Revocation Proposal requires
a majority approval at the Annual Meeting. Candidates for director receiving
the highest number of votes will be elected, even if such candidates do not
receive a majority of votes cast. The Bylaws provide that when a quorum is
present at a meeting for the election of directors, a plurality of votes cast of
shares present in person or represented by proxy at the meeting and entitled to
vote for the election of directors shall be sufficient to elect directors.
A majority in voting power of the issued and outstanding shares of stock
entitled to vote, either in person or represented by proxy, constitutes a
quorum. The Company reported [14,984,803] shares of common stock outstanding as
- -
of July 14, 2003. Therefore, at least [7,492,402] shares must be present in
--------- - -
person or represented by proxy at the Annual Meeting to constitute a quorum. We
beneficially own approximately 8.7% of the Company's issued and outstanding
shares and will vote for the MFC Nominees and the Bylaw Revocation Proposal.
4
Q: HOW DO I VOTE?
A: If you hold your shares of Equidyne common stock in your own name, please
SIGN, DATE and MAIL or hand-deliver the enclosed GREEN proxy card today in the
-----
enclosed postage-paid envelope to our proxy solicitor, Georgeson Shareholder
Communications Inc. at 17 State Street, 10th Floor, New York, New York, 10004.
------------------------------------------------------
If you hold your shares of Equidyne common stock in the name of one or more
brokerage firms, banks or nominees, only they can exercise voting rights with
respect to your shares, and then only upon receipt of your specific
instructions. Accordingly, it is critical that you promptly contact the person
responsible for your account and give instructions to SIGN, DATE and MAIL the
GREEN proxy card representing your shares to Georgeson Shareholder
- -----
Communications Inc. We urge you to confirm in writing your instructions to the
person responsible for your account and to provide a copy of those instructions
to us in care of Georgeson Shareholder Communications Inc., who is assisting in
this solicitation, at the address and telephone numbers set forth below and on
the back cover of this proxy statement, so that we will be aware of all
instructions and can attempt to ensure that such instructions are followed.
Q: CAN I REVOKE MY PROXY?
A: You may revoke an executed proxy card at any time before the Annual
Meeting by:
* marking, dating, signing and delivering a written revocation to our proxy
solicitor, Georgeson Shareholder Communications Inc., at 17 State Street, 10th
---------------------
Floor, New York, New York, 10004, with a copy to MFC Bancorp Ltd. at Suite 1620
- ---------------------------------
- - 400 Burrard Street, Vancouver, British Columbia, V6C 3A6, Attention: Roy
Zanatta/Rene Randal, facsimile (604) 683-3205. A revocation may be in any
written form signed by the record holder as long as it clearly states that the
proxy previously given is no longer effective;
* delivering a subsequent and properly completed and dated proxy in
opposition to an earlier proxy; or
* attending the Annual Meeting and voting your shares in person.
Although a revocation is also effective if delivered to the Company, we request
that either the original or photostatic copies of all revocations of proxies be
promptly mailed or delivered to our proxy solicitor at the address or facsimile
number on page 18 of this Proxy Statement or proxy solicitation so that we will
be aware of all revocations. Revocations sent to the Company may be delivered to
its business office which, according to its SEC filings, is located at 11300
Sorrento Valley Road, Suite 255, San Diego, CA 92121, or to any other address
provided by the Company.
Q: WHO CAN I CALL WITH QUESTIONS ABOUT THE PROXY SOLICITATION OR THE
PROPOSALS?
A: Please call Georgeson Shareholder Communications Inc. toll free at (800)
---
293-6057.
- --------
5
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This Proxy Statement may contain forward-looking statements. Forward-looking
statements give our current expectations or forecasts of future events. You can
identify these statements by the fact that they do not relate strictly to
historical or current information. They use words such as "anticipate",
"estimate", "expect", "project", "intend", "plan", "believe", and other words
and terms of similar meaning in connection with any discussion of future
operating or financial performance. In particular, these include statements
relating to:
* future actions;
* prospective services;
* future performance or results of anticipated sales efforts;
* potential growth and performance of Equidyne; and
* projected operating results.
Any and all forward-looking statements in this Proxy Statement can be affected
by inaccurate assumptions we might make or by known or unknown risks and
uncertainties. Consequently, no forward-looking statement can be guaranteed.
Because these statements are subject to risks and uncertainties, actual results
may differ materially from those expressed or implied by the forward-looking
statements. We caution you not to place undue reliance on the statements, which
speak only as of the date of this Proxy Statement. The cautionary statements
contained or referred to in this section should be considered in connection with
any subsequent written or oral forward-looking statements that we or persons
acting on our behalf may issue.
REASONS FOR THIS PROXY SOLICITATION
On May 2, 2003, we advised Equidyne of our intention to nominate directors and
otherwise solicit proxies for the upcoming Annual Meeting. On May 9, 2003,
Equidyne advised that it will mail our materials in connection with such
solicitation. On May 24, 2003, the Current Board and the Company were again
advised of an intention to nominate a new slate of persons for election as
directors. In that letter we also demanded that the Current Board:
(i) agree not to undertake any steps outside of the ordinary course until
the conclusion of the Annual Meeting; (ii) announce a date for the Annual
Meeting; (iii) co-operate in the selection of an independent chairman and
scrutineer for the Annual Meeting; and (iv) provide us a list of stockholders
and non-objecting beneficial holders. On May 26, 2003, we formally demanded the
right to inspect and make copies of the books and records of Equidyne, including
its stockholders' list and other materials. Having received no response to our
various demands and requests, further letters were sent on June 12, 2003 and
------ ---
July 11, 2003 reiterating our request for the stockholders' list and other
- ---------------
materials. To date, no formal response has been given to any of our requests
-- ------
and demands. On June 26, 2003, Management set the date of the
---------------------------------------------------------
Annual Meeting for September 9, 2003 and the record date for those entitled to
- -------------------------------------------------------------------------------
receive notice of and vote at the Annual Meeting for July 14, 2003.
- -------------------------------------------------------------------------------
On June 24, 2003, we made an application to the Delaware Court of Chancery (the
"220/211 Application") to seek an order requiring Equidyne to schedule a meeting
and produce information regarding the Company's stockholders. On July 9, 2003
---------------
Equidyne filed its response in the Delaware
- -------------------------------------------
6
Court of Chancery. As at the date hereof, the 220/211 Application is pending
- ------------------------------------------------------------------------------
with the trial having been scheduled for July 30, 2003.
- ----------------------------------------------------------
We are soliciting your proxy to vote for the Proposals because we believe, based
in part on the following, that the Current Board and senior management are at
least partially responsible for the Company's recent poor performance and should
be replaced.
POOR RECENT OPERATING RESULTS
As noted above, we believe the Company's recent financial performance has been
----------
poor, as evidenced by the following:
* From February 22, 2000 to June 17, 2003, the Company's stock price
plummeted more than 95%, from the Company's peak stock price of $9.00 to
-------------------------------------
$0.41.(15) The Company's market capitalization decreased from more than $151
----
million to approximately $6.1 million during this period. (16) Marcus R. Rowan
----
and Jim Fukushima, two of the Company's four current directors, were directors
throughout this period.
* From December 31, 2001, the date Marcus Rowan became the Chief Executive
Officer and Mark Myers became President, until June 17, 2003 the Company's stock
price has decreased over 50%.(17)
----
* For the nine months ended April 30, 2003 the Company's net sales were only
$65,000 which we believe indicates a minimal level of business activity.
------------------ --
Nonetheless, the Company has continued to incur losses throughout the 2003
fiscal year, including an operating loss of $687,000 for the three months ended
April 30, 2003 and an operating loss of $2,584,000 for the nine months ended
April 30, 2003.(18)
----
EXCESSIVE MANAGEMENT COMPENSATION
Despite the poor recent operating results, management has been compensated and
rewarded in a manner as though the Company has been achieving results for the
stockholders:
* It is our belief that management compensation is excessive for a company
-----------------------
with the size and circumstances of Equidyne. The Company's Chief Executive
Officer, President and Chief Financial Officer have a combined base salary of
over $600,000 per year, or approximately ten times the Company's revenues during
the nine months ended April 30, 2003.(19) In addition to salary, the Company
----
paid $187,000 of executive management bonuses in the quarter ended January 31,
2003.(20) The Company's Chief Executive Officer was also paid a bonus of
----
$120,000(21) for his "extraordinary" services to the Current Board in the first
---- ----------------
five months of fiscal 2002.(22) Mr. Rowan also
---- ---------------
- ---------------
(15) Source: American Stock Exchange website.
- ----
(16) Source: Based on 16,823,911 shares outstanding as of March 20,
- ---- 2000, as reported in the Company's Quarterly Report on Form
10-QSB filed on March 21, 2000 and a share price of $9.00 per
share on February 22, 000, and 14,984,803 shares outstanding
as of May 31, 2003 as reported in the Company's Quarterly
Report on Form 10-QSB filed June 13, 2003 and a share price
of $0.41 on June 17, 2003.
(17) Source: American Stock Exchange website.
- ----
(18) Source: Quarterly Report on Form 10-QSB for the period ended April 30,
- ---- 2003 filed by Equidyne on June 13, 2003.
(19) Source: Ibid.
- ---- -----
(20) Source: Quarterly Report on Form 10-QSB for the period ended January
- ---- 31, 2003 filed by Equidyne on March 14, 2003.
(21) Source: Ibid.
- ----
(22) Source: Annual Report on Form 10-KSB for the fiscal year ended July 31,
- ---- 2002 filed by Equidyne on October 28, 2002.
7
received a signing bonus in the amount of $80,000 when he was appointed Chief
- ----------------------------------------------------
Executive Officer in December 2001.(23) Mr. Rowan was paid $40,000 of his
-------------------------------------
signing bonus during his first week of employment, with the remaining $40,000
- ------------------------------------------------------------------------------
payable in equal installments on each of April 1, 2002, July 1, 2002 and
- --------------------------------------------------------------------------
October 1, 2002, contingent upon Mr. Rowan's continued employment.
- -----------------------------------------------------------------------
* The Company, in our belief has performed very poorly, but despite this, in
-----------------------------------------------------------------------
January 2003, the Current Board issued to the Company's Chief Executive Officer
and President an aggregate of 630,000 stock options at an exercise price of only
$0.34 per share,(24) a price equal to approximately one-third of the Company's
book value per share as set out in the Quarterly Report on Form 10-QSB for the
period ended January 31, 2003 and among the lowest market values of the shares
------------------------------------------------
in the entire month of January, 2003. This issuance is in addition to an
- ---------------------------------------
issuance of 1,050,000 options to the same two persons in December 2001
when they were appointed to their positions.(25)
----
MANAGEMENT'S ACTIONS ARE NOT CONSISTENT WITH STOCKHOLDERS' INTERESTS
Management's actions have failed to enhance stockholder value:
* We believe that management has little stock ownership and therefore, in
-------------------- --
our opinion, its interests are not sufficiently aligned with the stockholders.
- -------------
The Company's Chief Executive Officer, President and Chief Financial Officer
held a combined total of only 148,300 shares (less than 1% of the Company's
outstanding shares) as of July 3, 2003.(26) MFC's interest in Equidyne, on the
------------ --- ----------------------------------
other hand, consists of voting rights over 1,304,233 shares of which MFC is the
- --------------------------------------------------------------------------------
registered holder of 100. MFC is also funding this solicitation and is assuming
- --------------------------------------------------------------------------------
the risks and financial responsibility of any potential litigation which may
- --------------------------------------------------------------------------------
arise in connection with such solicitation. MFC also has an option to
- --------------------------------------------------------------------------------
acquire 485,844 Shares of Equidyne from Concord Effekten AG ("Concord") for an
- --------------------------------------------------------------------------------
exercise price of $0.45 per share.
- ---------------------------------------
* Since the management changes in December 2001, management has failed to
generate new revenue streams from the Company's existing technologies or to
successfully develop new business opportunities for the Company. Though the
Company has announced that it is seeking diversification strategies not
necessarily related to the medical field(27), it has not announced any
----
transactions or material developments in this regard . In the meantime, overhead
expenses and losses, which we believe are excessive given the Company's total
-----------------------------------------------------------
revenues, have continued to deplete its capital base. Further, management has
- ---------
not explained what investment expertise it purports to have. If the Company
pursues an investment strategy to create stockholder value, we believe it should
to overseen by directors with substantial investment expertise such as the MFC
Nominees.
Although there can be no assurance that our MFC Nominees will succeed in their
efforts, we believe they can create stockholder value by drawing from their
experience restructuring troubled enterprises.
- ---------------
(23) Source: Annual Report on Form 10-KSB for the fiscal year ended July 31,
- --- 2002 filed by Equidyne on October 28, 2002.
(24) Source: Form 4 filed by Marcus Rowan and Form 4 filed by Mark Myers on
- --------------------------------------------------------------------------------
January 30, 2003.
------------------
(25) Source: Annual Report on Form 10-KSB for the fiscal year ended July 31,
- ---- ---------------------------------------------------------------
2002 filed by Equidyne on October 28, 2002
------------------------------------------
(26) Source: Definitive additional materials filed by Equidyne under Form
------------------------------------------------------------
DEFA14A on July 3, 2003.
------------------------
(27) Source: Annual Report on Form 10-KSB for the fiscal year ended July 31,
- ---- ---------------------------------------------------------------
filed by Equidyne on October 28, 2002.
---------------------------------------------------------------
8
We believe that we can create long term stockholder value by minimizing overhead
expenses and pursuing new business activities and acquisitions.
MANAGEMENT ENTRENCHMENT
On January 21, 2003 the Current Board approved changes to the Bylaws which we
believe reduced the Current Board's accountability to the stockholders. Among
-
other changes, the Current Board:
* eliminated the Bylaws' requirement that the annual meetings of
stockholders be held (an annual meeting must now be held only if required by
applicable law);
* eliminated stockholders' power to call a special meeting;
* eliminated stockholders' power to set the number of directors by
resolution; and
* reduced the maximum number of directors from ten (10) to seven (7).
We believe the Company's Bylaw amendments were adopted as an entrenchment
technique and diminish stockholder value by discouraging leadership changes that
could be beneficial to Equidyne's share price or business operations. We
believe that, by amending the Bylaws, the Current Board has taken significant
defensive steps to entrench itself and to ward off challenges, which may not be
in the best interests of stockholders.
--- - -- -
LACK OF DIRECTION
Management of Equidyne has claimed to be evaluating "diversification strategies"
including "investing in business opportunities not necessarily related to the
medical device field".(28) However, since they were appointed in
----
December, 2001, management has not announced any transactions or material
developments in this regard. In the meantime, expenses and losses, which we
--------
believe are excessive given the Company's total revenues, have continued to
- --------------------------------------------------------------
deplete its capital base. Further, management has not explained what investment
expertise it purports to have. If the Company pursues an investment strategy to
create stockholder value, we believe it should be overseen by directors with
substantial investment expertise such as the MFC Nominees.
WE BELIEVE NEW LEADERSHIP CAN MAKE EQUIDYNE SUCCEED
We believe that the Current Board has totally failed to preserve or enhance
stockholder value. Most recently, Equidyne reported an operating loss of
$2,854,000 for the nine months ended April 30, 2003 in its Quarterly Report on
Form 10-QSB filed with the SEC on June 13, 2003.
If elected, the MFC Nominees intend to seek new business opportunities for
Equidyne. Although the MFC Nominees have indicated that they will implement
this strategic business plan if elected, we cannot guarantee that the Company's
operating performance will improve or that its profitability will be restored.
In addition, if elected, the MFC nominees will owe a fiduciary duty to the
- --------------------------------------------------------------------------------
Company, and therefore cannot guarantee that these fiduciary duties will not
- --------------------------------------------------------------------------------
prevent the implementation of plans that are currently proposed.
- ------------------------------------------------------------------------
- ---------------
(28) Source: Annual Report on Form 10-KSB for the fiscal year
- ------------------------------------------------------------------
ended July 31, 2002 filed by Equidyne on October
------------------------------------------------
28, 2002.
---------
9
ADDITIONAL INFORMATION REGARDING THE PROPOSALS
PROPOSAL 1: ELECTION OF THE MFC NOMINEES
MFC is proposing that Equidyne's stockholders elect the MFC Nominees to
Equidyne's board of directors at the Annual Meeting. The first five individuals
named in the table below will be nominated to be elected to succeed the Current
Board. One or more of the other individuals named in the table below will be
nominated to be elected: (i) in the event that the Current Board purports to
increase the number of directorships pursuant to Article III, Section 2 of the
Bylaws of Equidyne; and/or (ii) in the event that any of the first five
------------
individuals named in the table below is unable for any reason to serve as a
director.
Additional nominations made pursuant to the preceding clauses are without
prejudice to any position MFC may take which may claim that any attempt by
Equidyne to increase the size of Equidyne's board of directors constitutes an
unlawful manipulation of Equidyne's corporate machinery to disenfranchise the
Company's stockholders. Each MFC Nominee has consented to being named in this
Proxy Statement and our other solicitation materials and to serve as a director,
if elected, until the next annual meeting of the Company's stockholders or until
his successor has been elected and qualified. The Bylaws provide that the board
of directors shall determine the number of directors eligible for election,
which is currently five. The Bylaws also provide that a single class of
directors will be elected at each annual meeting and hold office until the
following annual meeting or until their successors are elected and qualified. If
elected, the MFC Nominees would serve together as a single class of directors in
accordance with the Bylaws.
Our primary purpose in seeking to elect the MFC Nominees is to help turn
Equidyne around and enhance the value of the Company for the benefit of all
stockholders. If elected, the MFC Nominees would be responsible for appointing
new management to operate Equidyne.
Although each MFC Nominee has consented to serve as a director if elected and we
have no reason to believe that any of the MFC Nominees may be unable or
unwilling to serve, if any MFC Nominee is unable to serve as a director of
Equidyne due to death, disability or otherwise, the remaining MFC Nominees may
designate another person or persons to replace the nominee or nominees unable to
serve.
The name, age and present principal occupation of each of the MFC Nominees is as
follows:
Michael J. Smith, age 55, is the President and Chief Executive Officer and a
director of MFC. Mr. Smith's principal business address is Floor 21, Millennium
Tower, Handelskai 94-96, A-1200, Vienna, Austria.
Mark Steinley, age 40, is an independent consultant. Mr. Steinley's principal
business address is 3915 East Broadway Boulevard, Fourth Floor, Tucson, AZ
85711.
Greg Elderkin, age 39, is the Executive Vice-President and a director of and the
designated real estate broker at Pacific West Brokerage, Inc. Mr. Elderkin's
principal business address is 555 South Renton Village Place, Suite 700, Renton,
WA 98055.
Roy Zanatta, age 38, is Secretary of MFC. Mr. Zanatta's principal business
address is 1620-400 Burrard Street, Vancouver, British Columbia, Canada.
10
Dr. Stefan Feuerstein, age 51, is Chief Executive Officer of MFC Capital
Partners AG and a director of MFC. Dr. Feuerstein's principal business address
is Charlottenstrasse 59, 10117 Berlin, Germany.
John Musacchio, age 55, is Vice-President of MFC and Chief Operating Officer,
Chief Financial Officer and a director of Mymetics Corporation. Mr. Musacchio's
principal business address is Floor 21, Millennium Tower, Handelskai 94-96,
A-1200, Vienna, Austria.
James Carter, age 57, is Vice-President of MFC. Mr. Carter's principal business
address is Floor 21, Millennium Tower, Handelskai 94-96, A-1200, Vienna,
Austria.
In addition, if the MFC Nominees are elected, it is expected that Mr. Smith, age
55, will be appointed to serve as Equidyne's Chief Executive Officer. Mr. Smith,
as the President and Chief Executive Officer of MFC, has extensive experience in
restructuring companies in order to enhance stockholder value. For further
information about MFC and Mr. Smith please refer to Annex III hereto.
The foregoing information has been furnished to us by the respective MFC
Nominees. Annex III contains additional information about the MFC Nominees
required to be disclosed under Regulation 14A of the Securities Exchange Act of
1934, as amended. It is expected that each MFC Nominee, if elected, will
thereafter be reimbursed by Equidyne for reasonable out-of-pocket expenses
incurred in the performance of his services as a director. The MFC Nominees
will also be entitled to indemnification by the Company in accordance with the
Bylaws and the DGCL.
The green proxy card delivered with this Proxy Statement provides each
shareholder with the opportunity to designate any of the MFC Nominees whom he or
she does not desire to elect. WE URGE YOU TO VOTE FOR ALL OF THE MFC NOMINEES
ON THE GREEN PROXY CARD DELIVERED WITH THIS PROXY STATEMENT.
WE BELIEVE THAT IS IN THE BEST INTERESTS OF THE SHAREHOLDERS OF EQUIDYNE TO
ELECT THE MFC NOMINEES AT THE ANNUAL MEETING. WE STRONGLY RECOMMEND THAT YOU
VOTE "FOR" THE ELECTION OF THE MFC NOMINEES.
PROPOSAL 2: REPEAL OF BYLAWS ADOPTED ON OR AFTER MAY 1, 2003
The Company's stockholders are being asked to adopt the following resolution,
which would repeal any amendments to the Bylaws adopted by the Current Board on
or after May 1, 2003 and prior the adoption of this resolution:
RESOLVED, that each and every provision of the Amended and Restated
Bylaws of Equidyne Corporation adopted on or after May 1, 2003 and prior
to the adoption of this resolution is hereby repealed.
We do not intend to exercise discretion in this regard. Although this Bylaw
Revocation Proposal, if adopted, will repeal every Bylaw amendment adopted by
the Current Board since May 1, 2003, it is not part of a plan to remove all
anti-takeover devices available to the Company, and we believe the MFC Nominees
do not have any present intention to make other proposals which would remove
other anti-takeover measures. Rather, it is designed to prevent the Current
Board from taking actions to amend the Bylaws to attempt to nullify or delay the
actions taken by you under this Proxy Statement or to create new obstacles to
your ability to freely elect a board which we believe represents your best
interests. Based on publicly available information, we are not aware of any
amendments to the Bylaws that have been adopted or proposed since May 1, 2003.
The approval of the Bylaw Revocation
11
Proposal could result in the repeal of newly adopted Bylaws which may be in the
best interests of stockholders, although we believe that such a possibility is
unlikely in view of the fact that the Current Board has not disclosed any such
--------- -----------------
Bylaw amendments. If the Current Board adopts any material amendments to the
Bylaws that would be subject to repeal under this Bylaw Revocation Proposal and
such amendments are made available to us or the general public, we will provide
you with additional materials regarding such amendments. Except for the proposed
actions described in this Proxy Statement, the MFC Nominees, if elected, do not
intend to take any other action that would remove other anti-takeover measures
or render them ineffective.
WE RECOMMEND THAT SHAREHOLDERS OF EQUIDYNE VOTE "FOR" THE APPROVAL OF THE BYLAW
REVOCATION PROPOSAL.
12
INFORMATION ABOUT
THE MFC NOMINEES
The following table sets forth the principal business address, present
occupation or employment and the number and percentage of outstanding shares of
the Company's common stock beneficially owned by us and each of the other MFC
Nominees as of the Record Date. Each of the MFC Nominees has provided written
consent to: (i) participate as a nominee in MFC's solicitation of proxies from
the stockholders of Equidyne in connection with the Annual Meeting; (ii) be
nominated for election as a director at the Annual Meeting and any adjournment,
postponement, continuance or rescheduling thereof; and (iii) serve as a director
of Equidyne if elected at the Annual Meeting and/or any adjournment,
postponement, continuance or rescheduling thereof.
NAME,
AGE AND PRESENT PRINCIPAL OCCUPATION NUMBER OF SHARES PERCENTAGE
BUSINESS ADDRESS AND FIVE YEAR BUSINESS EXPERIENCE BENEFICIALLY OWNED OF CLASS
- ---------------- --------------------------------- ------------------ -----------
Michael J. Smith (55) Mr. Smith is the President, Chief 1,304,233(1) N/A
Floor 21 Executive Officer and a director
Millenium Tower of MFC, a Nasdaq National Market
Handelskai 94-96 quoted company. Mr. Smith has
A-1200 Vienna, been the President and Chief
Austria Executive Officer of MFC since
1996 and a director since 1986.
Mr. Smith is also a director of
TriMaine Holdings, Inc., (which
is listed on the OTC), the
President, Chief Executive
Officer, Chief Financial Officer
and a director of Cybernet Internet
Services, Inc. and a member of the
management board of DTA Holding
Aktiengesellschaft, a Nasdaq
Smallcap Market quoated company.
Mark Steinley (40) Mr. Steinley is an independent None N/A
3915 E Broadway consultant with experience in private
Boulevard, equity and both the traditional
Fourth Floor and alternative energy generation
Tucson AZ 85711 industries. Mr. Steinley has an MBA
from the Marriott School of Management
at Brigham Young University and a
Bachelor of Science in Electrical
Engineering from the University of
Saskatchewan. Previously, Mr. Steinley
was a Partner with KBM Energy Partners,
President and Chief Executive Officer of
Angstrom Power Inc., the Director of
Equity Investments at Chrysalix Energy
L.P. and the Director of Project
Development and Equity Investment at
ABB Equity Ventures.
13
NAME,
AGE AND PRESENT PRINCIPAL OCCUPATION NUMBER OF SHARES PERCENTAGE
BUSINESS ADDRESS AND FIVE YEAR BUSINESS EXPERIENCE BENEFICIALLY OWNED OF CLASS
- ---------------- --------------------------------- ------------------ -----------
Greg Elderkin (39) Elderkin is the Executive None N/A
555 S. Renton Vice-President, a director
Village Place and the designated real estate
Suite 700 broker at Pacific West Brokerage,
Renton, Washington Inc. Mr. Elderkin has held
98055 these positions since 1989. In
addition, Mr. Elderkin is a
co-founder and director of the SFG
Funds, a private real estate lending
organization, and a director of Med Net
International Ltd., a Toronto Stock
Exchange listed company and a member
of the supervisory board of DTA Holding
Aktiengesellschaft, a Nasdaq Smallcap
Market quoted company.
Roy Zanatta (38) Mr. Zanatta is the Secretary of MFC. 1,304,233(1) N/A
1620 - 400 Burrard Mr. Zanatta has been an employee of
Street MFC since 1993 and has been the
Vancouver, Secretary of MFC since 1996. Mr. Zanatta
British Columbia is also a director of TriMaine
Canada V6C 3A6 Holdings, Inc. Formerly, Mr. Zanatta
consulted for and held positions with
the British Columbia Hydro and Power
Authority, the Canadian Standards
Association and Atomic Energy of
Canada Ltd. Mr. Zanatta earned a
B.A.Sc. degree in 1987 from the
University of British Columbia (Canada)
and an MBA in 1991 from McGill
University (Canada).
Dr. Stefan Dr. Feuerstein is a director of MFC 1,304,233(1) N/A
Feuerstein (51) and Chief Executive Officer of MFC
Charlottenstrasse 59 Capital Partners AG. Dr. Feuerstein
D-10117 Berlin was the Managing Director of
the Industrial Investment Council
of the New German States from 1997
to 2001.
John Musacchio (55) Mr. Musacchio is Vice-President 1,304,233(1) N/A
Floor 21 of MFC and Chief Operating Officer,
Millennium Tower Chief Financial Officer and Director
Handelskai 94-96 of Mymetics Corporation. Mr. Musacchio
A-1200 has over 25 years of experience
Vienna, Austria in the engineering, construction,
power generation, petroleum and chemical
industries.
James Carter (57) Mr. Carter is Vice-President of 1,304,233(1) N/A
Floor 21 MFC. Mr. Carter is a chartered
Millenium Tower accountant with extensive senior
Handelskai 94-96 management experience in the natural
A-1200 Vienna, resources sector. Previously,
Austria Mr. Carter was the President and
Chief Executive Officer of Carlin
Resources Corp.
- ------------
(1) 100 of these shares are held by MFC directly and MFC has the right to vote
1,304,133 shares pursuant to a voting agreement with Concord Effeckten AG.
For more information on this agreement, please refer to Annex III
hereto.
14
Under applicable regulations of the SEC, MFC and the MFC Nominees are deemed
"participants" in this proxy solicitation. Certain other information about MFC
and the MFC Nominees and any transactions between any of them and the Company
are set forth in the attached Annex III. No persons other than those named in
this Proxy Statement will participate in the proxy solicitation. Concord may
also be deemed to be a "participant" as a result of an agreement it entered into
with MFC pursuant to which MFC was granted the voting rights over the shares of
common stock of Equidyne beneficially owned by Concord. On April 30, 2003, MFC
----------------------
and Concord entered into an agreement pursuant to which Concord agreed that,
- --------------------------------------------------------------------------------
with relation to the Annual Meeting of stockholders of Equidyne and any other
- --------------------------------------------------------------------------------
meeting of the Company or any adjournment or postponement held prior to June 30,
- --------------------------------------------------------------------------------
2004, Concord would provide to MFC, upon request, any proxies or otherwise take
- --------------------------------------------------------------------------------
such actions as may be required or desirable to vote the common stock of
- --------------------------------------------------------------------------------
Equidyne owned by Concord at the time of such meeting in favor of any nominees
- --------------------------------------------------------------------------------
for election as directors of Equidyne put forth by MFC and otherwise vote such
- --------------------------------------------------------------------------------
common stock as directed by MFC with respect to any proposal before the
- --------------------------------------------------------------------------------
shareholders of the Company. In addition to being granted the voting rights
- --------------------------------------------------------------------------------
over the shares held by Concord, MFC was also granted an option to purchase up
- --------------------------------------------------------------------------------
to 485,844 of the shares held by Concord which option is exercisable at any time
- --------------------------------------------------------------------------------
until earlier of the date that is 60 days after the date of the Annual Meeting
- --------------------------------------------------------------------------------
and August 31, 2003 for an exercise price of $0.45 per share. MFC was also
- --------------------------------------------------------------------------------
granted a right of first refusal pursuant to and for the term of the agreement
- --------------------------------------------------------------------------------
to purchase all, but not less than all, of any shares which Concord proposes to
- --------------------------------------------------------------------------------
sell to an arm's length purchaser.
- ---------------------------------------
The MFC Nominees will not receive any compensation from MFC for their services
as directors of Equidyne. MFC has agreed to indemnify all of the MFC Nominees
against any costs, expenses and other liabilities associated with their
nomination and the election contest.
According to the Company's public filings with the SEC, directors of Equidyne
who are not employees of the Company receive $2,000 for each meeting attended
and all directors of the Company are reimbursed by the Company for travel and
other expenses incurred in connection with their services as directors. MFC
disclaims any responsibility for the accuracy of the foregoing information,
which has been extracted from the Company's public filings with the SEC.
MFC does not expect that any of the MFC Nominees will be unable to stand for
election, but in that event, the shares represented by the enclosed green proxy
card will be voted in each such case for a substitute nominee selected by MFC.
MFC reserves the right to nominate substitute or additional persons if the
Company makes or announces any changes to its Bylaws or takes or announces any
other action that has, or if consummated would have, the effect of disqualifying
any or all of the MFC Nominees. MFC expressly reserves this right without
prejudice to any position MFC may take which may claim that any attempt by
Equidyne to increase the size of Equidyne's board of directors constitutes an
unlawful manipulation of Equidyne's corporate machinery to disenfranchise the
Company's stockholders. In any such case, shares represented by the enclosed
green proxy card will be voted for all such substitute or additional nominees
selected by MFC.
In accordance with applicable regulations of the SEC, the green proxy card
affords each stockholder the opportunity to designate the names of any of the
MFC Nominees whom he or she does not wish to elect. Notwithstanding the
foregoing, we urge stockholders to vote for all of the MFC Nominees on the
enclosed green proxy card. The persons named as proxies in the enclosed green
proxy card will vote, in their discretion, for each of the MFC Nominees who is
nominated for election and for whom authority has not been withheld.
15
VOTING SECURITIES
According to the Company's certificate of incorporation, Equidyne's shares of
common stock constitute its only class of outstanding voting securities.
Accordingly, only the holders of the Company's common stock as of the Record
Date are entitled to execute proxies. The Record Date for determining
stockholders entitled to vote is July 14, 2003. As of the Record Date, there
-------
were [14,984,803] shares of the Company's common stock issued and outstanding.
We believe that there are no other classes of common stock and no shares of
preferred stock outstanding. Each outstanding share of common stock as of the
Record Date is entitled to one vote at the Annual Meeting. Stockholders of
Equidyne do not have cumulative voting rights, which means that your shares are
voted separately for each Proposal.
Pursuant to Article III, Section 2 and Article II, Section 7 of the Bylaws, at
each meeting of stockholders of the Company for the election of directors at
which a quorum is present, the persons receiving a plurality of votes cast of
persons present in person or represented by proxy at the meeting and entitled to
vote for the election of directors shall be elected as directors. All other
matters require approval of a majority of shares represented at the meeting in
person or by proxy and entitled to vote on the matter.
Abstentions and broker non-votes will have the same effect as votes against the
Bylaw Revocation Proposal and will each be included in determining the number of
shares present for purposes of determining the presence of a quorum.
Pursuant to an agreement between MFC and Concord dated April 30, 2003, we
- ----------------------------------------------------------------------------
exercise voting control over 1,304,233 shares of the Company's common stock as
of the date hereof, representing approximately 8.7% of the issued and
outstanding shares. Under this agreement, MFC also has the option to purchase
----------------------------------------------------------
up to 485,844 shares of common stock of Equidyne. We intend to vote for the MFC
- -------------------------------------------------
Nominees and the Bylaw Revocation Proposal. For more information about the
security ownership of certain beneficial owners and the Company's officers and
directors, please refer to Annex II attached hereto.
LITIGATION
As of the date of this Proxy Statement, other than the 220/211 Application filed
by us on June 24, 2003, there are no material pending legal proceedings in which
MFC, any MFC Nominee or Georgeson Shareholder Communications Inc. or any of
their respective associates is a party adverse to Equidyne or any of its
affiliates, or in which MFC, any MFC Nominee or any solicitor or any of their
respective associates has an interest adverse to Equidyne or any of its
affiliates. On July 9, 2003 Equidyne filed its response.
--------------------------------------------
SOLICITATION
The solicitation of proxies pursuant to this Proxy Statement is being made by
MFC. The MFC Nominees may also assist us in soliciting proxies from the
Company's stockholders. Proxies may be solicited by mail, advertisement,
telephone or telecopier and in person. No one will receive additional
compensation for such solicitation.
In addition, we have retained Georgeson Shareholder Communications Inc. as our
proxy solicitor to assist in the solicitation, for which services Georgeson
Shareholder Communications Inc. will be paid
16
an initial fee of $25,000, plus $2,500 for tabulation expenses
------- ---- ---------------------------------
and a $10,000 success fee and will be
- -----------------------------
reimbursed for its reasonable out-of-pocket expenses. It is anticipated that
Georgeson Shareholder Communications Inc. will employ approximately 25 persons
--
to solicit Equidyne stockholders.
Banks, brokers, custodians, the MFC Nominees and fiduciaries will be requested
to forward solicitation material to the beneficial owners of shares of the
Company's common stock. We will reimburse banks, brokers, custodians, the MFC
Nominees and fiduciaries for their reasonable expenses for sending solicitation
material to the beneficial owners. The cost of the solicitation of proxies will
initially be borne by us. We intend to seek reimbursement from the Company for
the costs of this proxy solicitation if we are successful in obtaining the
requisite proxies for the Proposals since we believe the purpose of the
Proposals in this Proxy Statement is to advance the interests of all of the
Company's stockholders. If such reimbursement is sought, the question of whether
such reimbursement will be made will not be submitted to stockholders but will
be submitted to the board of directors for final decision. Any MFC employees or
directors serving on the Equidyne board at the time will abstain from any board
vote on this matter. Costs related to the solicitation of proxies include
expenditures for attorneys, proxy solicitors, litigation, printing, postage, and
related expenses and filing fees and are expected to aggregate approximately
$275,000, of which approximately $75,000 has been spent to date. The portion
- -------- -------
of such costs allocable solely to the solicitation of proxies to the Proposals
is not readily determinable.
STOCKHOLDER PROPOSALS
Equidyne's definitive Proxy Statement on Schedule 14A, dated May 1, 2002, set
July 30, 2002 as the deadline by which proposals by the Company's stockholders
that are intended to be presented by such stockholders at the Annual Meeting
were to be received by the Company in order to be considered for inclusion in
the proxy statement and form of proxy relating to the Annual Meeting. However,
in the event that the Annual Meeting is held more than 30 days after May 28,
2003, the deadline is required to be extended until a reasonable time before the
Company begins to print and mail its proxy materials.
APPRAISAL RIGHTS
Holders of Equidyne common stock do not have dissenters' appraisal rights under
Delaware law in connection with the election of directors or the Bylaw
Revocation Proposal.
REIMBURSEMENT OF COSTS
If the MFC Nominees are elected, we intend to seek reimbursement from the
Company for our costs since we believe the purpose of this Proxy Statement is to
advance the interests of all of the Company's stockholders. We estimate that the
cost of our solicitation efforts will be approximately $275,000. If such
-------
reimbursement was to occur, it would have the effect of a one-time,
non-recurring expense and would reduce the Company's working capital.
Other than the foregoing, we are not aware of any other adverse consequences
that would result from the election of the MFC Nominees pursuant to this Proxy
Statement.
SPECIAL INSTRUCTIONS
IMPORTANT: IF YOU HOLD SHARES THROUGH A BROKER OR BANK, ONLY THEY CAN EXECUTE A
PROXY ON YOUR BEHALF. PLEASE CONTACT THE PERSON
17
RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT THEM TO EXECUTE A PROXY ON YOUR BEHALF
TODAY.
If your shares of the Company's common stock are held in "street-name" only your
bank or broker can execute a proxy on your behalf, and then only upon receipt of
your specific instructions. Please SIGN, DATE and RETURN the enclosed GREEN
-----
proxy instruction form to your bank or broker today in the postage-paid envelope
provided. To ensure that your proxy is effective, please also contact the
persons responsible for your account and instruct them to execute a green proxy
card on your behalf. We urge you to confirm your instructions in writing to the
person responsible for your account and provide a copy of those instructions to
us in care of Georgeson Shareholder Communications Inc. at the address set forth
below so that we will be aware of all instructions given and can attempt to
ensure that such instructions are followed.
We urge you NOT to sign any white proxy card for Equidyne's Current Board and
-----
management. If you have already signed a white proxy card you may revoke it by
-----
signing a green proxy card in favour of the election of the MFC Nominees and the
Bylaw Revocation.
WE URGE YOU TO DATE, SIGN AND RETURN THE ENCLOSED GREEN PROXY IN THE ENCLOSED
-----
ENVELOPE.
YOUR VOTE IS IMPORTANT. PLEASE MARK, SIGN, AND DATE THE ENCLOSED GREEN PROXY AND
-----
RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE PROMPTLY OR MAIL THE CARD TODAY
AT THE ADDRESS STATED BELOW.
OTHER MATTERS TO BE VOTED UPON
Except for the election of directors of Equidyne and the approval of the Bylaw
Revocation Proposal, MFC is not aware of any other matter to be presented for
consideration at the Annual Meeting. However, if any other matter properly
comes before the Annual Meeting, the persons named as proxies by MFC will
exercise their discretionary authority to vote on such matters in accordance
with their best judgment. If MFC becomes aware a sufficient time in advance of
the Annual Meeting that Equidyne's management intends to present for stockholder
vote at the Annual Meeting any matter not included on the enclosed green proxy
card, MFC intends to either: (i) refrain from voting on any such matter (in
which case stockholders will only be able to vote on such matter on proxy cards
furnished by Equidyne's management); or (ii) revise the green proxy card in
order to include any such additional matter thereon. MFC may also furnish
stockholders with additional proxy materials describing any such additional
matter.
IF STOCKHOLDERS VOTED OR VOTE ON THE ORIGINAL GREEN PROXY CARD WHICH DOES NOT
INCLUDE SUCH ADDITIONAL MATTER, THE PERSONS NAMED AS PROXYHOLDERS ON THE
ENCLOSED GREEN PROXY CARD WILL EXERCISE THEIR DISCRETIONARY AUTHORITY WITH
RESPECT TO SUCH ADDITIONAL MATTER AND MFC WILL ADVISE STOCKHOLDERS AS TO HOW THE
PROXYHOLDERS WILL USE SUCH DISCRETIONARY AUTHORITY. IF A STOCKHOLDER WISHES TO
SPECIFY THE MANNER IN WHICH HIS OR HER SHARES ARE TO BE VOTED ON ANY SUCH
ADDITIONAL MATTER, THE STOCKHOLDER WILL HAVE THE OPPORTUNITY TO VOTE ON A
REVISED GREEN PROXY CARD. SUBMISSION OF ANY PROPERLY EXECUTED PROXY CARD WILL
REVOKE ALL PRIOR PROXY CARDS.
18
FURTHER INFORMATION
If you have any questions or require any assistance in executing or delivering
your consent, please write to, or call:
Georgeson Shareholder Communications Inc.
17 State Street, 10th Floor
-------------------------------
New York, New York 10004
----------------------------
Toll Free: (800) 293-6057
--- --------
or
MFC Bancorp Ltd.
c/o 1620 - 400 Burrard Street
Vancouver, British Columbia
Canada V6A 3A6
Telephone: (604) 683-8286
Dated: July [15], 2003
----------
19
ANNEX I
INFORMATION CONCERNING THE COMPANY
According to the Form 10-QSB filed by Equidyne with the SEC on June 13, 2003 and
a press release it issued February 19, 2003, Equidyne's business address is:
Equidyne Corporation
11300 Sorrento Valley Road
Suite 255
San Diego, California 92121
Equidyne's definitive proxy statement is required to set forth information
regarding: (i) the beneficial ownership of securities of Equidyne by: (A) any
person known to Equidyne to beneficially own 5% or more of any class of voting
securities of Equidyne; (B) each director and executive officer of Equidyne; and
(C) all directors and executive officers of Equidyne as a group; (ii) Equidyne's
directors and management, including information relating to management
compensation; and (iii) the procedures for submitting stockholder proposals for
consideration at the 2004 annual meeting of stockholders of Equidyne. Except as
is otherwise disclosed herein, reference is hereby made to such afore-mentioned
information which, to the extent it may be deemed required, is incorporated
herein.
Except as otherwise noted herein, the information in the Proxy Statement
concerning Equidyne has been taken from or is based upon documents and records
on file with the SEC and other publicly available information. Although MFC
does not have any knowledge indicating that any statement contained herein is
untrue, we do not take any responsibility for the accuracy or completeness of
statements taken from public documents and records that were not prepared by, or
on behalf of, MFC, or for any failure by Equidyne to disclose events that may
affect the significance or accuracy of such information.
I-1
ANNEX II
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
THE COMPANY'S OFFICERS AND DIRECTORS
The following table sets forth certain information with regard to the beneficial
ownership of the Company's common stock as of July 3, 2003 so far as can be
------
determined from Equidyne's public filings with the SEC, by: (i) each stockholder
who is known by the Company to beneficially own in excess of 5% of the
outstanding shares of common stock; (ii) each director; and (iii) the Company's
Chief Executive Officer, Executive President and Secretary; and Vice President,
Chief Financial Officer and Treasurer.
TITLE OF NAME AND ADDRESS AMOUNT AND NATURE PERCENTAGE OF
CLASS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP CLASS
- ------- ------------------- ----------------------- -------------
Common stock, Concord Effekten AG 1,304,133(1) 8.7%
par value 9, 60311 Frankfurt, Germany
$0.10 per share
Common stock, MFC Bancorp Ltd. 1,304,233(2) 8.7%
par value Floor 21, Millennium Tower
$0.10 per share Handelskai 94-96, A-1200,
Vienna, Austria
Common stock, Jim Fukushima 1,198,800(3) 8.0%
par value 17660 Irvine Blvd. Ste. 20 --------- ---
$0.10 per share Tustin, CA 92780
Common stock, Thomas A. Slamecka 978,258(4) 6.5%
par value 2 Shannon Court -
$0.10 per share Andersen, South Carolina 29626
Common stock, Marcus Rowan 1,154,550(5) 7.7%
par value 11770 Bernardo Plaza Ct., --------- ---
$0.10 per share Suite 351
San Diego, CA 92128
Common stock, Lloyd I. Miller III 863,500(6) 5.8%
par value 4550 Gordon Dr.
$0.10 per share Naples, Florida 34102
Common stock, Mark C. Myers 362,500(7) 2.4%
par value 11770 Bernardo Plaza Ct., ------- ---
$0.10 per share Suite 351
San Diego, CA 92128
Common stock, Jeffrey B. Weinress 103,125(8) .68%
par value 11770 Bernardo Plaza Ct., ------- ---
$0.10 per share Suite 351
San Diego, CA 92128
Common stock, Dr. James R. Gavin 144,000(9) .96%
par value 11300 Sorrento Valley Rd., ------- ---
$0.10 per share Suite 255
San Diego, CA 92121
Common stock, All executive officers and 2,962,975(10) 19.8%
par value directors as a group (5 persons) --------- ----
$0.10 per share
- ---------------
(1) This figure is taken from a Schedule 13D/A filed on May 9, 2003 by
Concord. These are the same shares beneficially owned by MFC (see note 2). See
Annex III for a description of the terms of the agreement pursuant to
which Concord granted MFC the voting rights over these shares.
(2) This figure is taken from a Schedule 13D filed on May 2, 2003 by MFC.
Except for 100 shares owned of record by MFC, these are the same shares
beneficially owned by Concord. See Annex III for a description of the terms of
the agreement pursuant to which Concord granted MFC the voting rights over these
shares.
(3) This figure was reported in Management's DEFA14A filed with the SEC on
------------------------------------------------------------------------
July 3, 2003 (the "DEFA14A"). According to the DEFA14A, this figure includes
- ------------------------------ -------
presently exercisable options for 299,000 shares of common stock.
-------
(4) This figure includes presently exercisable options for 807,258 shares of
common stock, as reported in Equidyne's Annual Report on Form 10-KSB filed on
October 28, 2002.
(5) This figure was reported in the DEFA14A. According to the DEFA14A,
------------------------------------------- -----------
this figure includes presently exercisable options to purchase 1,006,250 shares
---------------------- ---------
of common stock.
(6) This figure is taken from a Schedule 13G filed by Mr. Miller on January
17, 2003. Mr. Miller shares dispositive and voting power with respect to
361,600 shares of common stock.
(7) This figure was reported in the DEFA14A. According to the DEFA14A,
-------------------------------------------- -------
this figure consists of presently exercisable options to purchase 362,500 shares
--------------------- -------
of common stock.
(8) This figure was reported in the DEFA14A. According to the DEFA14A,
-------------------------------------------- --------
this figure includes presently exercisable options to purchase 103,125 shares
-------- --------------------- -------
of common stock.
(9) This figure was reported in the DEFA14A. According to the DEFA14A,
-------------------------------------------- -------
this figure includes presently exercisable options for 144,000 shares of common
---
stock.
(10) This includes presently exercisable options and warrants for common
stock as discussed in notes 3, 5, 7, 8 and 9 above.
II-1
ANNEX III
INFORMATION CONCERNING MFC BANCORP LTD.
AND THE MFC NOMINEES
The following persons are or may be deemed to be participants (the
"Participants", and each a "Participant") in the solicitation of proxies in
support of electing the nominees of MFC to the board of directors of Equidyne:
(i) MFC; (ii) the MFC Nominees: Michael J. Smith, Roy Zanatta, Mark Steinley,
Greg Elderkin, Dr. Stefan Feuerstein, John Musacchio and James Carter; and (iii)
Concord. Information set forth herein about each Participant was provided by
that Participant.
MFC is a public corporation organized under the laws of the Yukon Territory,
Canada, with its common shares quoted on the Nasdaq National Market and on the
Frankfurt Stock Exchange. MFC operates in the financial services industry,
specializing in merchant banking internationally, and has an address at Floor
21, Millennium Tower, Handelskai 94-96, A-1200, Vienna, Austria.
A description of each MFC Nominee, including his name, business address, age,
present principal occupation and five-year business experience, is described in
MFC's Proxy Statement under the heading "Information About the MFC Nominees".
SECURITY OWNERSHIP
The beneficial ownership of securities of Equidyne by the Participants is
described in the following table. No Participant and no associate of any
Participant (within the meaning of Regulation 14A under the Securities Exchange
Act of 1934, as amended) beneficially owns any securities of Equidyne other than
common stock as described in the following table. No Participant beneficially
owns any securities of any parent or subsidiary of Equidyne. No Participant has
record but not beneficial ownership with respect to any securities of Equidyne.
APPROXIMATE SHARES PERCENTAGE OF
BENEFICIALLY OWNED CLASS COMMON
NAME COMMON STOCK STOCK
- ---- ------------------- -------------
MFC Bancorp Ltd.(1) 1,304,233(2) 8.7%
Concord Effekten AG 1,304,133(3) 8.7%
- ---------------- ----------- ----
(1) MFC is a public corporation with its common shares quoted on the Nasdaq
National Market and on the Frankfurt Stock Exchange. Based solely upon public
records and filings, Peter Kellogg directly and/or indirectly owns approximately
25% of the common shares of MFC. Mr. Kellogg disclaims beneficial ownership of
approximately 92% of such common shares.
(2) MFC holds 100 common shares of Equidyne directly and has the right to
vote 1,304,133 common shares of Equidyne pursuant to an agreement with Concord.
See below for a description of the terms of such agreement.
(3) Concord has granted MFC the right to vote such shares pursuant to an
- --------------------------------------------------------------------------
agreement date April 30, 2003. This figure is taken from a Schedule 13D/A filed
- --------------------------------------------------------------------------------
on May 9, 2003 by Concord.
- --------------------------
III-1
TRANSACTIONS IN EQUIDYNE SECURITIES
Other than the transactions described below, no Participant has purchased or
sold any securities of Equidyne in the past two years.
TRANSACTIONS IN SECURITIES BY MFC
DATE OF TRANSACTION NATURE OF TRANSACTION
- ------------------- ---------------------
January 30, 2003 Purchased 100 shares of common stock
April 30, 2003 Acquired, among other things, the
right to vote 1,304,133 shares of
Equidyne common stock owned by
Concord(1)
- ---------------
(1) On April 30, 2003, MFC and Concord entered into an agreement pursuant to
which Concord agreed that, with relation to the Annual Meeting of stockholders
of Equidyne and any other meeting of the Company or any adjournment or
postponement held prior to June 30, 2004, Concord would provide to MFC, upon
request, any proxies or otherwise take such actions as may be required or
desirable to vote the common stock of Equidyne owned by Concord at the time of
such meeting in favor of any nominees for election as directors of Equidyne put
forth by MFC and otherwise vote such common stock as directed by MFC with
respect to any proposal before the shareholders of the Company. In addition to
being granted the voting rights over the shares held by Concord, MFC was also
granted an option to purchase up to 485,844 of the shares held by Concord which
option is exercisable at any time until earlier of the date that is 60 days
after the date of the Annual Meeting and August 31, 2003 for an exercise price
of $0.45 per share. MFC was also granted a right of first refusal pursuant to
and for the term of the agreement to purchase all, but not less than all, of any
shares which Concord proposes to sell to an arm's length purchaser.
TRANSACTIONS IN SECURITIES BY CONCORD
-------------------------------------
DATE OF TRANSACTION NATURE OF TRANSACTION
- ------------------- ---------------------
April 1, 1999 through Open market purchases and sales of common
- --------------------- -----------------------------------------
to February 5, 2005 stock resulting in ownership of 1,457,333
- --------------------- -----------------------------------------
shares of common stock
-----------------------
February 5, 2002 through Open market purchases and sales of common
- ------------------------ -----------------------------------------
to July 11, 2003 stock resulting in ownership of
- ------------------ ---------------------------------
1,304,133(1) shares of common stock
-----------------------------------
- ---------------
(1) Source: Schedule 13D/A filed by Concord on May 9, 2003.
- -------------------------------------------------------------
ARRANGEMENTS, INTERESTS AND TRANSACTIONS
(a) Except for the shares of Equidyne common stock owned beneficially and/or
of record by MFC, none of the MFC Nominees, or to the knowledge of MFC, any
---------------------------
other participant or any associate of MFC or the MFC Nominees directly or
indirectly owns any securities of Equidyne or any subsidiary of Equidyne
beneficially or of record, has the right to acquire beneficial ownership within
60 days, or has purchased or sold such securities within the past two
years.
(b) None of the MFC Nominees or, to the knowledge of MFC, any other
----------------------------
participant has any substantial interest, direct or indirect, by security
holdings or otherwise, in any matter to be acted upon at the Annual Meeting,
except for the election of directors.
(c) Except for the agreement between MFC and Concord dated April 30, 2003
giving MFC the right to vote 1,304,133 shares of Equidyne common stock owned by
Concord, a copy of which is attached as an exhibit to MFC's Schedule 13D filed
with the SEC on May 2, 2003, none of MFC, the MFC Nominees or, to the knowledge
------------------
of MFC, any other participant is, or within the past year has been, a party to
- -------
any contract, arrangement or understanding with any person
III-2
with respect to any securities of Equidyne. Under this agreement, MFC
----------------------------
also has the option to purchase up to 485,844 shares of common stock
- --------------------------------------------------------------------------
of Equidyne.
- -------------
(d) None of the MFC Nominees or, to the knowledge of MFC, any other
--------------------------------------
participant, has engaged in any transaction or series of transactions since the
- ------------
beginning of Equidyne's last fiscal year, or has currently proposed any
transaction, to which Equidyne or any of its subsidiaries is a party, where the
amount involved exceeded $60,000.
(e) None of the MFC Nominees or, to the knowledge of MFC, any other
------------------------------------
participant, has been indebted to Equidyne or any of its
- ------------
subsidiaries at any time since the beginning of Equidyne's last fiscal year.
(f) None of the MFC Nominees or, to the knowledge of MFC, any other
--------------------------------------
participant, has been convicted in a criminal proceeding
- ------------
(excluding traffic violations or similar misdemeanors) during the last ten
years.
(g) Other than the 220/221 Application, there are no material pending legal
proceedings in which any of the MFC Nominees or any of their associates or,
---
to the knowledge of MFC, any other participant is a
- ------------------------------------------------------
party adverse to Equidyne or any of its affiliates or in which any of the MFC
Nominees or any of their associates or, to the knowledge of MFC, any
--------------------------------
other participant, has an interest adverse to Equidyne of any
- ------------------
of its affiliates.
(h) Except as set forth in this Proxy Statement, none of the MFC Nominees
or, to the knowledge of MFC, any other participant or any associate
- ----------------------------
thereof has any arrangement or understanding with any person: (i) with respect
to any future employment with Equidyne; or (ii) with respect to any future
transactions to which Equidyne or any of the affiliates will or may be a party.
(i) None of the MFC Nominees or, to the knowledge of MFC, any other
--------------------------
participant holds any position or office with Equidyne or any parent,
subsidiary, or affiliate of Equidyne, and none of the MFC Nominees, to the
--------
knowledge of MFC, or any other participant has ever served as a director of
- -----------------
Equidyne or any parent, subsidiary, or affiliate of Equidyne.
(j) None of the MFC Nominees or, to the knowledge of MFC, any other
--------------------------
participant has any family relationship, by blood, marriage, or adoption,
to any director, executive officer, or person nominated or chosen by Equidyne to
become a director or executive officer of Equidyne. During the last three fiscal
years, no compensation was awarded to, earned by, or paid to MFC or, to the
------
the knowledge of MFC, any of the MFC Nominees or any other participant by any
- ---------------------
person for any services rendered in any capacity to Equidyne or its
subsidiaries.
(k) Except as set forth in this Proxy Statement, none of the MFC Nominees
or, to the knowledge of MFC, any other participant has any arrangement or
------------------------------
understanding with any MFC Nominee or any other person pursuant to which the
nominations were made, other than each MFC Nominee's consent to be nominated, to
serve as a director if elected and to participate in our proxy solicitation.
(l) None of the MFC Nominees or, to the knowledge of MFC, any other
---------------------------------------------
participant, is, or during the last fiscal year has been, an
- ------------
executive officer of, or owned of record or beneficially in excess of ten
percent equity interest in, any business or professional entity that has made
during Equidyne's last full fiscal year, or proposes to make during Equidyne's
current fiscal year,
III-3
payments to Equidyne or its subsidiaries for property or services in excess of
five percent of Equidyne's consolidated gross revenues for its last full fiscal
year or the other entity's consolidated gross revenues for its last full fiscal
year.
(m) None of the MFC Nominees or, to the knowledge of MFC, any other
--------------------------------------
participant, or during the last fiscal year has been, an
- ------------
executive officer of, or owns, or during the last fiscal year has owned, of
record or beneficially in excess of ten percent equity interest in any business
or professional entity to which Equidyne or its subsidiaries has made during
Equidyne's last full fiscal year, or proposes to make during Equidyne's current
fiscal year, payments for property or services in excess of five percent of: (i)
Equidyne's consolidated gross revenues for its last full fiscal year; or (ii)
the other entity's consolidated gross revenues for its last full fiscal year.
(n) None of the MFC Nominees or, to the knowledge of MFC, any other
------------------------------------
participant, is, or during the last fiscal year has been, an
- ------------
executive officer of, or owns, or during the last fiscal year has owned, of
record or beneficially in excess of ten percent equity interest in, any business
or professional entity to which Equidyne or its subsidiaries was indebted at the
end of the Equidyne's last full fiscal year in an aggregate amount in excess
of five percent of Equidyne's total consolidated assets at the end of such
fiscal year.
(o) None of the MFC Nominees or, to the knowledge of MFC, any other
--------------------------------------
participant, is, or during the last fiscal year has been, a
- ------------
member of, or of counsel to, a law firm that Equidyne has retained during the
last fiscal year or proposes to retain during the current fiscal year.
(p) None of the MFC Nominees or, to the knowledge of MFC, any other
--------------------------------------
participant, is, or during the last fiscal year has been, a
- ------------
partner or executive officer of any investment banking firm that has performed
services for Equidyne during the last fiscal year or that Equidyne proposes to
have perform services during the current year.
(q) None of the MFC Nominees or, to the knowledge of MFC any other
-------------------------------------
participant, has any other relationships that MFC is aware
- ------------
of between the MFC Nominee and Equidyne that are substantially similar in nature
and scope to those relationships listed in paragraphs (l) through (p).
The information concerning Equidyne and Concord contained in this Annex has been
-----------
taken from, and is based upon, publicly available information, including
Equidyne's press releases and its public filings with the SEC.
MFC has or may be deemed to have interests in the solicitation of proxies in
support of the MFC Nominees from its beneficial ownership of the common stock of
Equidyne. The MFC Nominees may also have an interest in the solicitation
through the forms of compensation described in the Proxy Statement.
III-4
PROXY CARD
PROXY SOLICITATION BY MFC BANCORP LTD.
WITH RESPECT TO EQUIDYNE CORPORATION
The undersigned, a stockholder of record of Equidyne Corporation ("Equidyne") as
of the close of business on July 14, 2003 (the "Record Date"), hereby
--------
constitutes and appoints Michael J. Smith or Roy Zanatta and either jointly, or
severally, to vote all shares of common stock of which the undersigned would be
entitled to vote at the annual meeting of stockholders of Equidyne to be held on
September 9, 2003, and at any adjournments, postponements, continuances or
- ------------
rescheduling thereof, hereby revoking any proxy or proxies heretofore given and
ratifying or confirming all that said proxy or proxies may do or cause to be
done by virtue thereof with respect to the following matters:
Please mark your votes as [X] indicated in this example.
______________________________________________________________________
1. To elect Michael J. Smith, Roy Zanatta, Mark Steinley, Greg Elderkin, Dr.
Stefan Feuerstein, John Musacchio and/or James Carter (the "MFC Nominees") to
serve as the directors of Equidyne until their respective successors are duly
elected and qualified or their earlier resignation or removal.
FOR [ ] WITHHOLD AUTHORITY [ ] ABSTAIN [ ]
all nominees below
(except as indicated)
MFC NOMINEES: Michael J. Smith, Roy Zanatta, Mark Steinley, Greg Elderkin, Dr.
Stefan Feuerstein, John Musacchio and James Carter.
MFC Bancorp Ltd. is proposing that Equidyne's stockholders elect the MFC
- --------------------------------------------------------------------------------
Nominees to Equidyne's board of directors at the Annual Meeting. The first five
- --------------------------------------------------------------------------------
individuals named above will be nominated to be elected to succeed the current
- --------------------------------------------------------------------------------
board of directors of Equidyne. One or more of the other individuals named
- --------------------------------------------------------------------------------
above will be nominated to be elected: (i) in the event that the current board
- --------------------------------------------------------------------------------
of directors of Equidyne purports to increase the number of directorships
- --------------------------------------------------------------------------------
pursuant to Article III, Section 2 of the Bylaws of Equidyne; and/or (ii) in the
- --------------------------------------------------------------------------------
event that any of the first five individuals named above is unable for any
- --------------------------------------------------------------------------------
reason to serve as a director.
- -----------------------------------
INSTRUCTION: IF YOU WISH TO VOTE FOR THE ELECTION OF CERTAIN OF THE PERSONS
NAMED ABOVE, BUT NOT ALL OF THEM, CHECK THE "FOR" BOX ABOVE AND WRITE THE NAME
OF EACH SUCH PERSON YOU DO NOT WISH ELECTED IN THE FOLLOWING SPACE:
---
______________________________________________________________________
2. RESOLVED, that each and every provision of the Amended and Restated
Bylaws of Equidyne Corporation adopted on or after May 1, 2003 and prior to the
adoption of this resolution is hereby repealed.
FOR [ ] WITHHOLD AUTHORITY [ ] ABSTAIN [ ]
3. In their discretion with respect to any other matters as may properly
come before the 2003 annual meeting.
(continued on reverse side)
PROXY CARD
The undersigned hereby revokes any other proxy or proxies heretofore given to
vote or act with respect to the shares of common stock of Equidyne held by the
undersigned, and hereby ratifies and confirms all action the herein names
proxies, their substitutes, or any of them may lawfully take by virtue hereof.
IF PROPERLY EXECUTED, THIS PROXY CARD WILL BE VOTED AS DIRECTED ABOVE. IF NO
DIRECTION IS INDICATED WITH RESPECT TO THE ABOVE PROPOSALS, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF ALL MFC NOMINEES AND FOR THE PROPOSAL SET FORTH IN
ITEM 2 ABOVE, EXCEPT THAT YOU WILL NOT BE DEEMED TO VOTE FOR THE ELECTION OF ANY
---
NOMINEE WHOSE NAME IS WRITTEN IN THE SPACE PROVIDED.
IN THEIR DISCRETION, THE PROXIES NAMED ABOVE ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY BE PROPERLY PRESENTED TO THE MEETING OR IS UNKNOWN TO MFC
BANCORP LTD. AND THEIR REPRESENTATIVES A REASONABLE TIME BEFORE THE COMMENCEMENT
OF THE SOLICITATION OF PROXIES BY MFC BANCORP LTD.
In order for your proxy to be valid, it must be dated. Please mark, sign, date
and mail your proxy promptly in the enclosed postage-paid envelope.
Dated __________________________________
Print Name _____________________________
Signature(s) ___________________________
Signature(s) ___________________________
Authority ______________________________
Please sign exactly as the
name appears on the stock
certificate or on the
attached label. If the shares
are held by joint tenants,
both should sign. In the case
of joint owners, each joint
owner must sign. When signing
as attorney, executor,
administrator, trustee,
guardian, corporate officer,
etc., please give full title.