SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A--INFORMATION REQUIRED
IN A PROXY STATEMENT
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
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Check the appropriate box:
[X] Preliminary Proxy Statement, Amendment No. 1
[ ] Confidential, for use of the Commission Only (as permitted by Rule
14a-6(e)(2)) [ ] Definitive Proxy Statement[ ]0
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to ss.240.14a-11(c) or ss.240.14a-12
AMERICAN ELECTROMEDICS CORP.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
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2) Aggregate number of securities to which transaction
applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth amount
on which the filing fee is calculated and state how it was
determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
AMENDED
PRELIMINARY
COPIES
AMERICAN ELECTROMEDICS CORP.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER , 1999
--
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of American Electromedics Corp., a Delaware corporation (the
"Company"), will be held at the Nashua Marriott, 2200 Southwood Drive, Nashua,
New Hampshire, on , December , 1999 10:00 a.m., local time, for the
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following purposes:
1. To elect a Board of six Directors;
2. To approve an amendment to the Company's Certificate of
Incorporation to increase the authorized number of shares of the
Company's Common Stock, $.10 par value, from 20,000,000 shares
to 35,000,000 shares;
3. To approve an amendment to the Company's Certificate of
Incorporation to change the Company's name to "Equidyne
Corporation";
4. To approve an amendment to the Company's 1996 Stock Option Plan
to increase the number of shares of Common Stock reserved for
issuance pursuant to the exercise of stock options thereunder
from 300,000 shares to 900,000 shares; and
5. To transact such other business as may properly come before the
Meeting or at any adjournment thereof.
A Proxy Statement describing the matters to be considered at the
Meeting is attached to this Notice. Only stockholders of record of Common Stock,
$.10 par value, of the Company at the close of business on November 4, 1999,
which has been fixed as the record date for the Meeting, shall be entitled to
notice of, and to vote at, the Meeting and any adjournments thereof. All
stockholders are cordially invited to attend the Meeting in person.
By order of the Board of Directors
Michael T. Pieniazek
Secretary
November 30, 1999
Amherst, New Hampshire
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WISH YOUR SHARES OF COMMON
STOCK TO BE VOTED, YOU ARE REQUESTED TO SIGN AND MAIL PROMPTLY THE ENCLOSED
PROXY WHICH IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. A RETURN
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED
FOR THAT PURPOSE.
<PAGE>
AMERICAN ELECTROMEDICS CORP.
13 COLUMBIA DRIVE
SUITE 5
AMHERST, NEW HAMPSHIRE 03031
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
DECEMBER , 1999
--
This Proxy Statement and the accompanying proxy card are furnished in
connection with the solicitation of proxies by the Board of Directors of
AMERICAN ELECTROMEDICS CORP., a Delaware corporation (the "Company"), to be
voted at the Annual Meeting of Stockholders of the Company (the "Meeting") to be
held at the Nashua Marriott, 2200 Southwood Drive, Nashua, New Hampshire, at
10:00 a.m., local time, or at such other time or place to which the Meeting may
be adjourned, for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders and in this Proxy Statement.
The approximate date on which this Proxy Statement, Notice and
accompanying Proxy will first be sent or given to stockholders is December 1,
1999.
A copy of the Company's Annual Report for the fiscal year ended July
31, 1999 accompanies this Proxy Statement.
VOTING SECURITIES AND VOTE REQUIRED
Only stockholders of record as of the close of business on November
4, 1999 (the "Record Date") will be entitled to notice of, and to vote the
shares of common stock, $.10 par value (the "Common Stock"), of the Company held
by them on such date at, the Meeting and at any adjournments thereof. On the
Record Date, there were issued and outstanding 9,830,955 shares of Common Stock.
The Common Stock constitutes the only outstanding class of voting securities of
the Company to be voted at the Meeting.
Each share of Common Stock held by a stockholder entitles such holder
to one vote on each matter that is voted upon at the Meeting or any adjournments
thereof.
The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock is necessary to constitute a quorum at
the Meeting. Broker "non-votes" and the shares as to which a stockholder
abstains from voting are included for purposes of determining whether a quorum
of shares is present at a meeting. A broker "non-vote" occurs when a nominee
holding shares for a beneficial owner does not vote on a particular proposal
because the nominee does not have discretionary voting power with respect to
that item and has not received instructions from the beneficial owner.
A plurality of the total votes cast by holders of Common Stock is
required for the election of directors. In tabulating the vote on the election
of directors, abstentions and broker "non-votes" will be disregarded and will
have no effect on the outcome of such vote.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock is required to approve the proposals to amend the
Company's Certificate of Incorporation to (i) increase the number of authorized
shares of Common Stock to 35,000,000 shares "(the "Authorized Common Stock
<PAGE>
Amendment") and (ii) change the Company's name to Equidyne Corporation (the
"Name Change Amendment"). Accordingly, abstentions and broker non-votes will
have the same effect as a negative vote.
The affirmative vote of a majority of the votes cast by holders of
Common Stock is required to approve the proposal to increase the number of
shares of Common Stock reserved for issuance under the Company's 1996 Stock
Option Plan (the "Stock Option Plan Amendment"). In tabulating the votes on the
proposal to approve the Stock Option Plan Amendment, shares as to which a
stockholder abstains are considered shares entitled to vote on the applicable
proposal and therefore an abstention would have the effect of a vote against
such proposal. Broker non-votes, however, are not considered shares entitled to
vote on the proposal and are not included in determining whether the Stock
Option Plan Amendment is approved.
If the accompanying Proxy is properly signed and returned to the
Company and not revoked, it will be voted in accordance with the instructions
contained therein. Unless contrary instructions are given, the persons
designated as proxy holders in the accompanying Proxy will vote "FOR" the Board
of Directors' slate of nominees, the Authorized Common Stock Amendment, the Name
Change Amendment, the Stock Option Plan Amendment and as recommended by the
Board of Directors with regard to any other matter or if no such recommendation
is given, in their own discretion. Each Proxy granted by a stockholder may be
revoked by such stockholder at any time thereafter by writing to the Secretary
of the Company prior to the Meeting, or by execution and delivery of a
subsequent Proxy or by attendance and voting in person at the Meeting, except as
to any matter or matters upon which, prior to such revocation, a vote shall have
been cast pursuant to the authority conferred by such Proxy.
The cost of soliciting these Proxies, consisting of the printing,
handling and mailing of the Proxy and related material, and the actual expense
incurred by brokerage houses, custodians, nominees and fiduciaries in forwarding
proxy material to the beneficial owners of stock, will be paid by the Company.
In order to assure that there is a quorum, it may be necessary for
certain officers, directors, regular employees and other representatives of the
Company to solicit Proxies by telephone or telegraph or in person. These persons
will receive no extra compensation for their services. The Company has retained
Georgeson Shareholder Communications Inc. to aid in the solicitation of proxies
for the Meeting for which they will receive a fee of $10,000 plus expenses. Your
cooperation in promptly signing and returning the enclosed proxy card will help
to avoid additional expense.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of the Record Date
concerning the ownership of Common Stock by (i) persons known to the management
of the Company to be the beneficial owners of more than 5% of the Common Stock
on such date, (ii) each present Director, executive officer and nominee for
election as a Director and (iii) all Directors and executive officers as a
group:
BENEFICIAL
OWNERSHIP(*)
NAME STATUS SHARES PERCENTAGE
---- ------ ------ ----------
Jubilee Investors LLC Stockholder 5,275,395 (1) 36.7%
Dominion Capital Fund Ltd Stockholder 931,483 (2) 8.8%
Sovereign Partners LP Stockholder 1,304,746 (3) 12.0%
Liviakis Financial Stockholder 668,771 6.8%
Communications, Inc.
Thomas A. Slamecka Director and 1,322,535 (4) 12.1%
Chairman of
the Board
Jim Fukushima Director and 1,200,000 (5) 11.4%
Vice Chairman
Michael T. Pieniazek Director, President, 621,084 (6) 6.0%
Chief Financial
Officer
Treasurer and
Secretary
Marcus R. Rowan Director 407,000 (7) 4.0%
Andy Rosch Director 360,000 (8) 3.6%
Blake C. Davenport Director 120,000 (9) 1.2%
All executive 3,830,619 (10) 30.8
officers and directors
as a group
(6 persons)
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* Includes voting and investment power, except where otherwise noted. The
number of shares beneficially owned includes shares each beneficial
owner and the group has the right to acquire within 60 days of the
Record Date pursuant to stock options, warrants and convertible
securities.
(1) Represents (i) 747,627 shares owned directly plus (ii) the number of
shares which Jubilee Investors LLC would receive upon conversion of its
2,400 shares of Series A Preferred Stock on October 29, 1999, subject
to the restriction on conversion prohibiting conversion to the event
that the issuance of Common Stock on conversion would result in the
stockholder being deemed the beneficial holder of more than 9.9% of the
shares outstanding. Subsequent to October 29, 1999, the 2,400 shares of
Series A Preferred Stock were converted and redeemed for 2,218, 312
shares of Common Stock, cash and a note.
(2) Represents (i) 139,962 shares owned directly plus (ii) the number of
shares which Dominion Capital Fund Ltd. would receive upon conversion
of its 415 shares of Series B Preferred Stock and (iii) the exercise of
warrants to purchase 8,594 shares of Common Stock on October 29, 1999,
subject to the restriction on conversion of the Series B Preferred
Stock prohibiting conversion to the extent that the issuance of Common
Stock on conversion would result in the stockholder being deemed the
beneficial holder of more than 9.9% of the shares outstanding.
3
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Subsequent to October 29, 1999, the 415 shares of Series B Preferred
Stock were converted and redeemed for 130,885 shares of Common Stock
and cash.
(3) Represents (i) 245,200 shares owned directly, plus (ii) the number of
shares into which Sovereign Partners LP would receive upon conversion
of its 555 shares of Series B Preferred Stock and (iii) the exercise of
warrants to purchase 12,500 shares of Common Stock, on October 29,
1999. Subsequent to October 29, 1999, the 535 shares of Series B
Preferred Stock were converted and redeemed for 175,038 shares of
Common Stock.
(4) Includes presently exercisable options for 1,016,535 shares of Common
Stock.
(5) Includes indirect beneficial ownership of (i) 500,000 shares and (ii)
presently exercisable options and warrants for 700,000 shares of
Common Stock.
(6) Includes presently exercisable options for 569,084 shares of Common
Stock.
(7) Includes presently exercisable options for 360,000 shares of Common
Stock.
(8) Includes presently exercisable options for 50,000 shares of Common
Stock.
(9) Includes presently exercisable options for 100,000 shares of Common
Stock.
(10) Includes presently exercisable options and warrants for Common Stock
listed in notes 4, 5, 6, 7, 8 and 9 above.
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<PAGE>
PROPOSAL I
ELECTION OF DIRECTORS
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At the Meeting, six Directors will be elected to serve until the next
annual meeting and until their successors are elected and qualified. The Board
of Directors will vote all Proxies received by them in the accompanying form for
the nominees listed below. The current size of the Board of Directors is six,
and all nominees are presently Directors of the Company. In the event any
nominee is unable to or declines to serve at the time of the Meeting, the
Proxies will be voted for an alternative nominee who shall be designated by the
present Board of Directors to fill the vacancy. As of the date of this Proxy
Statement, the Board of Directors is not aware of any nominee who is unable or
will decline to serve as a Director.
The following sets forth information about each nominee for elected
to the Board of Directors:
HAS SERVED
AS DIRECTOR
NAME AGE SINCE POSITION(S) WITH THE COMPANY
---- --- ----- ----------------------------
Thomas A. Slamecka 59 1996 Chairman of the
Board of Directors and Director
Jim Fukushima 55 1999 Vice Chairman and Director
Michael T. Pieniazek. 41 1999 President, Chief Financial
Officer, Treasurer, Secretary and
Director
Blake C. Davenport 32 1998 Director
Andy Rosch 39 1997 General Manager of Rosch GmbH
Medizintechnik and Director
Marcus R. Rowan 38 1996 Director
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Thomas A. Slamecka has been Chairman of the Board of the Company
since February 1997. From 1995 to February 1997, Mr. Slamecka was President of
the ConAgra Poultry Company, Inc., Duluth, Georgia. From 1990 to 1994, he was
President and Chief Executive Officer of CEEC Inc., Atlanta, Georgia.
Michael T. Pieniazek has been President of the Company since April
1997 and Chief Financial Officer and Treasurer since July 1995, and Secretary
since January 1996. From 1987 to 1995, Mr. Pieniazek served in various executive
positions, the last having been Executive Vice President and Chief Financial
Officer, for Organogenesis Inc., a Massachusetts-based, biotechnology company.
From 1980 to 1987, Mr. Pieniazek was an auditor with PriceWaterhouse Coopers
LLP.
Jim Fukushima became Vice Chairman and a Director in October 1999
and September 1999, respectively. Since 1995, he has been President of HNS
International, Inc. which is engaged in the distribution of medical and
automotive products.
Blake C. Davenport has been a Director of the Company since December
1997. For more than the past five years, he has been the President and owner of
Davenport Interests, Inc., a private investment company.
5
<PAGE>
Andy Rosch has been a Director of the Company since December 1997 and
General Manager of Rosch GmbH Medizintechnik since July 1990.
Marcus Rowan has been a Director of the Company since October 1996.
For more than the past five years he has been President of Berkshire Interests,
Inc., Dallas, Texas, which specializes in commercial real estate and
investments.
There are no family relationships among the directors or executive
officers of the Company.
THE BOARD RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of nine meetings
during the fiscal year ended July 31, 1999, including actions by unanimous
written action. No Director attended fewer than 75% of the aggregate of all
meetings of the Board of Directors. The only Board Committee is an Audit
Committee consisting of Messrs. Davenport and Rowan. The Audit Committee has
general responsibility for oversight of financial controls and for accounting
and audit activities of the Company. The Audit Committee met once during the
fiscal year ended July 31, 1999.
COMPENSATION OF DIRECTORS
In August 1999, the Company granted each non-employee director an
option for 50,000 shares of Common Stock exercisable at $1.25 per share vesting
after six months and terminating no later than five years from grant.
Non-employee Directors are reimbursed for travel expenses but are not otherwise
compensated.
EXECUTIVE COMPENSATION AND EMPLOYMENT AGREEMENTS
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning all
cash and non-cash compensation awarded to, earned by or paid to the Company's
Chief Executive Officer and one other executive officer with total compensation
in excess of $100,000 during the fiscal years ended July 31, 1999, 1998 and
1997:
ANNUAL COMPENSATION
LONG-TERM
COMPENSATION
AWARDS
OTHER SECURITIES
NAME AND PRINCIPAL ANNUAL UNDERLYING
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS
Thomas A. Slamecka 1999 $100,000 -- -- 237,985
Chairman of the 1998 100,000 -- -- 618,550
Board and
Director (1) 1997 133,374 -- -- --
6
<PAGE>
Michael T. Pieniazek 1999 125,000 -- -- 166,334
President, Chief
Financial 1998 125,000 -- -- 402,750
Officer, 1997 113,000 -- -- --
Secretary,
Treasurer and
Director (2)
Andy Rosch (3) 1999 110,565 $49,904 -- --
1998 73,053 34,342 -- --
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(1) Mr. Slamecka became Chairman of the Board in February 1997.
(2) Mr. Pieniazek became President in April 1997 and continues to serve as
Chief Financial Officer, Secretary and Treasurer.
(3) Mr. Rosch became a Director in December 1997 and serves as General
Manager of Rosch GmbH Medizintechnik.
EMPLOYMENT AGREEMENTS
As of January 1, 1998, the Company entered into an employment agreement
with Thomas A. Slamecka to serve as Chairman of the Board for an initial term
terminating on March 15, 2001, subject to annual renewals, and his February 1997
employment agreement was terminated. Mr. Slamecka received an annual base salary
of $52,000 through July 31, 1998 and thereafter at $100,000, plus a profits
bonus equal to 10% of the amount that consolidated net after-tax operating
profits exceeds $500,000, provided for such year the Company earns a 12% return
on its Common Stock equity, and may also receive a supplemental bonus. In
addition, the Company agreed to make available certain loans to Mr. Slamecka.
See "Certain Relationships and Related Transactions." The employment agreement
also provided for the grant of options to him for the purchase of 400,000
shares of Common Stock at $1.00 per share, which was the fair market value
of the Company's Common Stock on the date of grant, vesting immediately as
to 212,500 shares and the balance vesting at 46,875 shares per month through
May 1998. The Company is to issue 100,000 shares of Common Stock to Mr.
Slamecka if during the term of his employment the closing price for the
Common Stock is at least $20 per share for a period of three consecutive
trading days. Further, the employment agreement provide that if the Company
issued any shares of Common Stock (other than pursuant to compensation or
employee benefit plans) it would grant to Mr. Slamecka additional options to
purchase shares equal to 9.3% of the outstanding Common Stock at a purchase
price equal to the per share price of the shares issued by the Company (but
not less than $1.00 per share). In calculating Mr. Slamecka's ownership for
purposes of such 9.3% level, unvested options held by him and shares sold by
him during the initial term of the employment agreement would be included in
such calculation. By reason of the foregoing provision, through July 31, 1999
the Company had granted options to Mr. Slamecka for an aggregate of 456,535
shares of Common Stock at exercise prices ranging from $0.94 to $3.33 per
share. As of July 31, 1999, the employment agreement was amended to terminate
the option grant provision. Effective August 31, 1999, the employment
agreement was further modified whereby no further salary or loans would be
provided to Mr. Slamecka. In lieu of these provisions, Mr. Slamecka was
granted an option to purchase 250,000 shares of Common Stock at an exercise
price of $1.25 per share, exercisable six months after grant and terminating
after five years. All other terms and conditions of Mr. Slamecka's employment
agreement remain in effect as of the date hereof.
As of January 1, 1998, the Company entered into an employment agreement
with Michael T. Pieniazek to serve as President for an initial term terminating
on December 31, 2001, subject to automatic renewal for consecutive one-year
terms unless terminated not less than 60 days prior to end of any term. Mr.
Pieniazek receives an annual base salary of $125,000 and a discretionary bonus.
The employment agreement also provided for the grant of options to Mr. Pieniazek
to purchase 250,000 shares of Common Stock at $1.00 per share, which was the
fair market value of the Company's Common Stock on the date of grant, vesting
7
<PAGE>
immediately as to 150,000 shares, vesting ratably over the succeeding seven
months as to the balance, and for the Company to issue 50,000 shares of Common
Stock to Mr. Pieniazek if during the term of his employment the closing price
for the Common Stock is at least $20 per share for three consecutive trading
days. In addition, the employment agreement provided that if the Company issued
any shares of Common Stock (other than pursuant to compensation or employee
benefit plans) it would grant to Mr. Pieniazek additional options to purchase
shares in amount equal to 6.5% of such issuance. In calculating Mr. Pieniazek's
ownership for purposes of such 6.5% level, unvested options held by him and
shares sold by him during the term of the employment agreement would be included
in such calculation. By reason of the foregoing provision, through July 31,
1999, the Company had granted options to Mr. Pieniazek for an aggregate of
319,084 shares of Common Stock at exercise prices ranging from $0.94 to $3.33
per share. As of July 31, 1999, the employment agreement was amended to
terminate the option grant provision.
The employment agreements of Messrs. Slamecka and Pieniazek provide
for lump sum payments of $299,000 for Mr. Slamecka and an amount equal to 2.99
times the current base salary for Mr. Pieniazek, plus continuation of health
benefits for 12 months, upon a change of control of the Company. A change of
control of the Company would include a person or group becoming the beneficial
owner of 20% of the voting power of the Company's securities or individuals
who are current directors of the Company, or successors chosen by them, cease
to constitute a majority of the whole Board of Directors. In the event the
amount payable upon a change of control would result in the application of
an excise tax under Section 4999 of Internal Revenue Code of 1986, as
amended, the payment would be made over such period of time in order
not to cause the application of such excise tax.
On December 18, 1997, Rosch GmbH entered into an amendment to the
employment agreement for Andy Rosch pursuant to which he serves as its Managing
Director for an initial term of three years, terminating on December 31, 2000,
and automatically renewable for one-year terms thereafter unless either party
gives notice of an intention not to renew not less than three months prior to
the end of any term. Mr. Rosch received an annual base salary of 200,000 DM and
an annual cash bonus equal to 1% of net sales of Rosch GmbH, but not to exceed
the amount of his base salary.
In July 1999, Mr. Rosch entered into a new employment agreement with
Rosch GmbH providing for an annual base salary of 400,000 DM and a bonus equal
to 2% of net profits of Rosch GmbH, beginning October 1, 1999 for a term ending
December 31, 2004, with automatic one year renewals thereafter unless notice of
termination is given.
In August 1999, the Company granted options to Messrs. Pieniazek and
Rosch each for the purchase of 50,000 shares of Common Stock at an exercise
price of $1.25 per share exercisable six months after grant and terminating
after five years.
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<PAGE>
OPTION GRANTS
The following table sets forth certain information regarding grants of
stock options made during the fiscal year ended July 31, 1999 to the named
executive officers.
OPTIONS GRANTED IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
INDIVIDUAL GRANTS ASSUMED ANNUAL RATES OF STOCK
APPRECIATION FOR OPTION TERM
(2)
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OR
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED FISCAL YEAR (1) ($/SHARE) DATE 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Thomas A. Dec. 2003/
Slamecka 237,986 42.9% $0.94-2.25 Apr. 2004 $103,424 $228,334
Michael T. Dec. 2003/
Pieniazek 166,334 30.0% $0.94-2.25 Apr. 2004 72,286 159,588
Andy Rosch
--0-- - - - - -
- -----------------
</TABLE>
(1) Based on an aggregate of 554,320 options granted by the Company to
employees in the fiscal year ended July 31, 1999.
(2) Amounts represent hypothetical gains that could achieved for the
respective options if exercised at the end of the option term. These
gains are based on assumed rates of stock appreciation of 5% and 10%
compounded annually from the date the respective options were granted
to their expiration date and are not intended to forecast possible
future appreciation, if any, in the price of the Common Stock. The
gains show are net of the option exercise price, but do not include
deductions for taxes or other expenses associated with the exercise of
the options or the sale of the underlying shares.
STOCK OPTION PLAN
In October 1996, the Company's stockholders approved the 1996 Stock
Option Plan providing for the issuance of up to 300,000 shares of the Company's
Common Stock, which amount will be increased to 900,000 shares if the
stockholders approve Proposal 4 at the Meeting. The 1996 Stock Option Plan is
administered by the Board of Directors or an Option Committee. Options granted
under this Plan are either incentive stock options or non-qualified stock
options which would be granted to employees, officers, directors and other
persons who perform services for or on behalf of the Company and its
subsidiaries. Options are exercisable as determined at the time of grant except
options to officers or directors may not vest earlier than six months from the
date of grant, and the exercise price of all the option cannot be less than the
fair market value at the date of grant. At July 31,1999, options for an
aggregate of 260,500 shares were granted, of which options for 95,500 shares
were exercised and options for 165,000 remaining outstanding. Of the 165,000
outstanding options, 125,000 have an exercise price of $1.00 per share and
expire from January through February 2003. The remaining 40,000 outstanding
options have an exercise price of $4.38 per share and expire in October 2001.
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<PAGE>
Pursuant to employment agreements with Messrs. Slamecka and Pieniazek, the
Company has granted stock options to such persons. See "Employment Agreements"
herein.
AGGREGATE OPTION EXERCISES IN FISCAL 1999 AND FISCAL YEAR-END OPTION VALUES
The following table provides information on the value of unexercised
stock options owned by the executive officers named in the Summary Compensation
Table as of July 31, 1999. No options were exercised in the fiscal year ended
July 31, 1999.
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
JULY 31, 1999 JULY 31, 1999(1)
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
Thomas A. Slamecka 766,535 -- $68,938 --
Michael T. Pieniazek 519,084 -- $46,634 --
Andy Rosch -- -- -- --
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(1) Fair market value of the Common Stock on the last trading date of the
fiscal year ended July 31, 1999, less the applicable exercise prices,
multiplied by the number of shares underlying the options.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than 10%
of a registered class of the Company's equity securities, to file reports of
ownership on Form 3 and changes in ownership on Form 4 or Form 5 with the
Securities and Exchange Commission ("SEC"). Such officers, directors and 10%
stockholders are also required by SEC rules to furnish the Company with copies
of all Section 16(a) forms they file. Based solely on its review of the copies
of such forms received by it, or written representations from certain reporting
persons, the Company believes that, during the fiscal year ended July 31, 1999,
that there was compliance with all Section 16(a) filing requirements applicable
to its officers, directors and 10% stockholders.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of July 31, 1999, the Company had loaned Thomas A. Slamecka,
Chairman of the Board, an aggregate of $258,334 pursuant to his employment
agreement. The initial employment agreement provided that the Company make
available to Mr. Slamecka a loan in the amount of $8,333.33 each month during
the initial term of such agreement, which is through March 15, 2001. The loans
bear interest at 7% per annum and mature on the earliest of (i) March 2002, (ii)
two years after termination of the employment agreement other than termination
for cause by the Company or (iii) upon the Company terminating the agreement for
cause; provided that the loan would be forgiven (A) if Mr. Slamecka remains in
the employ throughout the initial term, (B) the Company terminates the agreement
other than for cause, or (C) upon acquisition or change of control of the
Company. Mr. Slamecka has the election to repay the loans either in cash or in
securities of the Company. Effective July 31, 1999, Mr. Slamecka's employment
agreement was amended and the provisions thereof providing for future
availability of loans to Mr.
Slamecka were eliminated.
Effective November 11, 1999, the Company sold to Mr. Fukushima 800,000
shares of Common Stock at a price of $.50 per share and warrants to purchase up
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<PAGE>
to 300,000 shares of Common Stock at an exercise price of $2.00 per share
exercisable for three years, and also a 5% interest in Rosch GmbH for an
aggregate of $2,000,000.
During the fiscal year ended July 31, 1999, the Company entered into a
distribution agreement with HNS providing HNS with exclusive distribution rights
for the Injex(TM) System throughout Japan and Asia. In April 1999, HNS purchased
500,000 shares of the Company's Common Stock and was issued warrants to purchase
up to 500,000 shares of Common Stock at an exercise price of $2.50 per share,
expiring in April 2002. In September 1999, Jim Fukushima, the President and a
principal stockholder of HNS, was elected to the Company's Board of Directors.
As of July 31, 1999, the Company had a loan of approximately $91,000
payable to Mr. Andy Rosch, a Director of the Company and General Manager of
Rosch GmbH Medizintechnik. Such loan bears interest at 12% per annum and, for
the fiscal year ended July 31, 1999, the Company recognized interest expense of
approximately $15,000 thereon.
In September 1998, the Company entered into a $505,000 line of credit
agreement (the "Loan Agreement") with Guardian Financial Services, Inc., a
company owned by Mr. Slamecka. The borrowings under the Loan Agreement (the
"Loan") were due on demand, bearing interest at a rate of 10% per annum. The
Loan was secured by substantially all of the Company's tangible and intangible
assets. The Loan Agreement's original expiration date was February 28, 1999,
which date was extended to July 31, 1999 for an additional fee of $55,000, or
13% of the outstanding principal balance at February 28, 1999. In addition to
such extension fee, interest expense totaling approximately $22,000 was
recognized during the fiscal year ended July 31, 1999. All borrowings under the
Loan Agreement were paid in full on July 28, 1999, at which time the Loan
Agreement was terminated.
PROPOSAL 2
INCREASE IN AUTHORIZED SHARES OF COMMON STOCK
---------------------------------------------
The Board of Directors of the Company has unanimously adopted a
resolution approving and recommending to the Company's stockholders for their
approval, an amendment to Article 4 of the Company's Certificate of
Incorporation to increase the number of authorized shares of Common Stock, par
value $.10 per share, from 20,000,000 shares to 35,000,000 shares. If this
proposal is adopted and the amendment shall be filed and become effective, the
text of the introductory paragraph of Article 4 of the Certificate of
Incorporation shall read as follows:
"The total number of shares of stock which the Corporation shall have
authority to issue is Thirty-Six Million (36,000,000) of which Thirty-Five
Million (35,000,000) shall be common stock ($.10 par value) and One Million
(1,000,000) shall be preferred stock ($.01 par value)."
The proposed amendment provides for authorization of 15,000,000
additional shares of Common Stock. In addition to the 9,830,955 shares of Common
Stock outstanding on the Record Date, the Company has reserved shares of Common
Stock under options and warrants or subsequent to the Record Date has issued
shares of Common Stock as follows:
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<PAGE>
No. of
Category Shares
------------------------------- ------
1996 Stock Option Plan 300,000
Options outside the Plan 2,230,619
Warrants 955,000
Proposed additional Plan shares 600,000
Conversion of Preferred Stock 2,597,312
Private Placements 2,133,333
In late November 1999, the Company closed agreements with the holders
of its Series A Convertible Preferred Stock and Series B 5% Convertible
Preferred Stock whereby all outstanding shares of Preferred Stock, plus accrued
dividends, were either converted into Common Stock or redeemed. Accordingly, as
of November 30, 1999, there were outstanding 14,561,600 shares of Common Stock
and 4,085,619 shares reserved for options and warrants exercisable at prices
ranging from $1.00 to $4.80 per share through various dates until August 2004,
(assuming stockholder approval of Proposal 4), thereby leaving 1,352,781 shares
(or 16,352,781 shares assuming approval of this Proposal) of Common Stock
available for issuance upon future transactions. Except as set forth above, the
Company has no present plans or proposals to issue any Common Stock or Preferred
Stock.
The Board of Directors deems it in the best interest of the Company to
have an additional amount of Common Stock of the Company authorized and
available for issuance without further action by the stockholders, unless such
action is required by applicable law or the rules of any exchange or market
system on which the Company's securities may hereafter be listed. The Board of
Directors believes that the additional authorized shares of Common Stock may be
needed in the event that the Board of Directors seeks to raise additional
capital funds expeditiously and economically for its ongoing operations, for
issuance under the Company's 1996 Stock Option Plan, for issuance upon exercise
of outstanding options and warrants or upon conversion of outstanding securities
and for other corporate purposes, including acquisitions. The Board of Directors
believes it advisable to authorize additional shares of Common Stock now, so
that if an issuance is determined to be appropriate in the future, it could be
accomplished without the delay and expense involved in obtaining stockholder
approval. The shares would be issued on such terms, at such times and on such
conditions as the Board of Directors may determine.
Depending upon the consideration per share received by the Company for
any subsequent issuance of Common Stock, such issuance could have a dilutive
effect on those stockholders who paid a higher consideration per share of their
stock. Also, future issuances of Common Stock will increase the number of
outstanding shares, thereby decreasing the percentage ownership in the Company
(for voting, distributions, and all other purposes) represented by existing
shares of Common Stock. The availability for issuance of the additional shares
of Common Stock may be viewed as having the effect of discouraging an
unsolicited attempt by another person or entity to acquire control of the
Company. Although the Board of Directors has no present intention of doing so,
the Company's authorized but unissued Common Stock could be issued in one or
more transactions that would make a takeover of the Company more difficult or
costly, and therefore less likely. The Company is not aware of any person or
entity who is seeking to acquire control of the Company.
Holders of Common Stock do not have any conversion, preemptive or other
subscription rights to acquire any additional securities issued by the Company,
and there are no redemption provisions applicable to the Common Stock. To date,
the Company has not declared or paid any dividends on its Common Stock. The
payment by the Company of dividends, if any, is within the discretion of the
Board of Directors and will depend on the Company's earnings, if any, its
capital requirements and financial condition, as well as other relevant factors.
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<PAGE>
The Board of Directors does not intend to declare any dividends in the
foreseeable future, but instead intends to retain earnings for use in the
Company's business operations. The holders of Common Stock are entitled to one
vote for each share held of record on all matters to be voted on by
stockholders. There is no cumulative voting with respect to the election of
directors, with the result that the holders of more than 50% of the shares
voting for the election of directors can elect all of the directors then up for
election. The holders of Common Stock are entitled to receive ratably such
dividends when, as and if declared by the Board of Directors out of funds
legally available therefor. In the event of liquidation, dissolution or winding
up of the Company, the holders of Common Stock are entitled to share ratably in
all assets remaining which are available for distribution to them after payment
of liabilities and after provision has been made for each class of stock, if
any, having preference over the Common Stock, such as the Preferred Stock.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE PROPOSAL TO AMEND THE
CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK
PROPOSAL 3
AMENDMENT TO CERTIFICATE OF INCORPORATION TO CHANGE THE COMPANY'S
-----------------------------------------------------------------
NAME
----
The Company seeks to change its corporate name to Equidyne Corporation
from American Electromedics Corp. In January 1999, the Company announced its
intention to focus on the needle-free injection system developed by its
subsidiary Equidyne Systems, Inc. In April 1999, the Company sold certain assets
of its audiometric business, including all trademarks, patents and other rights
associated with such business and also the name "American Electromedics."
Pursuant to the audiometric sale agreement, the Company agreed to change its
name from American Electromedics Corp.
The Board of Directors has unanimously adopted a resolution declaring
it advisable to amend the Company's Certificate of Incorporation to change the
name of the Company as set forth above. The Board of Directors further directed
that the Name Change Amendment be submitted for consideration by stockholders at
the Meeting.
As amended, Article I of the Certificate of Incorporation would read in
its entirety as follows:
"Article I -- Name. The name of the Corporation shall be Equidyne
Corporation"
The Board of Directors believes that the Name Change Amendment is in
the Company's best interest because the proposed new corporate name reflects the
Company's primary subsidiary and principal line of business. The Board of
Directors believes that, in addition to the requirements of the audiometric sale
agreement and notwithstanding the goodwill associated with the Company's present
name, it is necessary to change the corporate name to broaden the appeal of the
Company among potential customers, suppliers and the investment community. There
can be no assurance that the new corporate name will attract a broader range of
customers, or that the name change will not create confusion that will cause the
Company to lose market support. However, taking the foregoing into account, the
Board of Directors deems that on balance the Name Change Amendment is in the
best interest of the Company and its stockholders. In the event the Name Change
Amendment is approved by stockholders, the Company will thereafter file a
Certificate of Amendment to its Certificate of Incorporation with the Delaware
Secretary of State, amending Article I thereof, which will become effective at
the close of business on the date such filing is accepted by the Secretary of
State.
13
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL TO
AMEND THE CERTIFICATE OF INCORPORATION TO CHANGE THE NAME OF THE COMPANY TO
EQUIDYNE CORPORATION
PROPOSAL 4
AMENDMENT TO 1996 STOCK OPTION PLAN
-----------------------------------
The Board of Directors of the Company has unanimously approved for
submission to a vote of the stockholders a proposal to amend the 1996 Stock
Option Plan to increase from 300,000 shares of Common Stock to 900,000 shares of
Common Stock the number of shares reserved for issuance pursuant to the exercise
of options granted thereunder. The purposes of the Plan are to attract and
retain the best available personnel for positions of responsibility within the
Company, to provide additional incentives to employees of the Company and to
promote the success of the Company's business through the grant of options to
purchase Common Stock. Each option granted pursuant to the Plan shall be
designated at the time of grant as either an "incentive stock option" or as a
"non-qualified option." The 1996 Stock Option Plan, as proposed to be amended,
would authorize the issuance of a maximum of 900,000 shares of Common Stock
pursuant to the exercise of options granted thereunder. As of October 31, 1999,
stock options to purchase 260,500 shares of Common Stock under the 1996 Stock
Option Plan have been granted and165,000 were outstanding, including options to
purchase 95,000 shares to executive officers and Directors of the Company, and
95,500 options have been exercised.
ADMINISTRATION
The 1996 Stock Option Plan is administered by Board of Directors or an
Option Committee. The Board of Directors or the Option Committee has authority
to select the individuals who are to be granted options from among those
eligible to participate in the 1996 Stock Option Plan and to establish the
number of shares which may be issued under each option.
ELIGIBILITY
Options may be granted only to (i) individuals who are employees of the
Company and its subsidiaries, including officers and directors who are also
employees at the time the Option is granted, (ii) individuals who are directors
but not also employees of the Company and its subsidiaries ("Non-Employee
Directors"), and (iii) any other persons who perform services for or on behalf
of the Company and its subsidiaries, affiliates or any entity in which the
Company has an interest, or who are deemed by the Board of Directors to be in a
position to perform such services in the future. Options that constitute
incentive stock option ("ISOs") may only be granted to employees described in
clause (i) above, and Non-Employee Directors shall only be granted non-qualified
stock options ("NQSOs"). No Options may be granted under the 1996 Stock Option
Plan after August 9, 2006.
OPTION PRICE AND TERMS
Options granted under the 1996 Stock Option Plan may be either ISOs or
NQSOs The option price of each share of Common Stock subject to an option will
be fixed by the Board of Directors or the Option Committee but shall not be less
than the fair market value of the Common Stock on the date of grant of the
option. Under the 1996 Stock Option Plan, the fair market value with respect to
such shares be equal to the last reported sales prices of the Common Stock on
the NASDAQ Electronic Bulletin Board (or other interdealer quotation system or
exchange) on the day on which an Option is granted. An option designated as an
ISO is intended to qualify as such under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"). Thus, the aggregate fair market value,
14
<PAGE>
determined at the time of grant, of the shares with respect to which ISO's are
exercisable for the first time by an individual during any calendar year may not
exceed $100,000. NQSOs are not subject to this requirement. Certain adjustments
in the option price may be made for extraordinary dividend distributions. The
Board of Directors determines the option period, provided it is not longer than
five years, in the case of ISOs, or 10 years, in the case of NQSOs, subject to
earlier termination, the vesting period and the payment terms. In the event of
termination of employment, the Optionee may exercise his options at any time
within one year of the termination, but in no event later than the expiration
date of the option; however, if the employee is terminated "for cause," the
option expires immediately. All options vest upon a "change of control" of the
Company. Upon exercise of an option, payment for shares may be made in cash, or,
if the option agreement so provides, in shares of Common Stock calculated based
upon their fair market value as of the date of their delivery or, a combination
of stock and cash.
TRANSFERABILITY
Options granted under the 1996 Stock Option Plan are not transferable
by the Optionee otherwise than by will or the laws of descent and distribution,
to the Optionee's spouse or his children, grandchildren or parents. Options are
exercisable during the lifetime of the Optionee only by the Optionee or by the
Optionee's guardian or legal representative.
TERMINATION. SUSPENSION OR MODIFICATION OF THE 1996 STOCK OPTION PLAN
The Board of Directors may terminate, suspend, or modify the 1996 Stock
Option Plan at any time but may not, without authorization of the Company's
stockholders, effect any change which under Section 16(b) of the Securities
Exchange Act of 1934, as amended, applicable Delaware law or tax law, or the
rules of any national securities exchange or national quotation system on which
the Common Stock is then listed or traded requires the prior approval of
stockholders.
FEDERAL INCOME TAX CONSEQUENCES
A participant under the 1996 Stock Option Plan does not realize income
for federal income tax purposes as a result of (i) the grant of an ISO under the
1996 Stock Option Plan or (ii) the exercise of an ISO under the 1996 Stock
Option Plan. The Company is not entitled to a federal income tax deduction upon
the grant or exercise of an ISO. Long-term capital gains tax rates will apply to
the gain (excess of the amount received for the shares over the amount paid for
the shares) at the time that the participant disposes of the shares provided
that certain holding requirements discussed below are met. The spread between
the exercise price and the fair market value of the transferred shares at the
time of the exercise of an ISO is included in alternative minimum taxable income
subject to the alternative minimum tax for the taxable year in which such
transfer occurs. If the shares are disposed of in the same taxable year and the
amount realized is less than that fair market value at the time of exercise, the
amount included in the alternative minimum taxable income will not exceed the
amount realized over the adjusted basis of the shares.
The availability of the income tax treatment discussed in the foregoing
paragraph is subject to two conditions. First, the participant must continue to
be an employee of the Company or a parent or subsidiary of the Company at all
times during the period beginning on the date that the ISO was granted and
ending (with exceptions for disability and death) on the date three months
before the option is exercised. Second, such income tax treatment is available
only if the participant does not dispose of the shares acquired pursuant to the
exercise of the ISO (i) within two years from the date of granting of the option
nor (ii) within one year after the shares were issued pursuant to the exercise
of the option. If the participant disposes of the shares prior to the expiration
of the required holding period, the participant realizes ordinary income in the
year of disposition and the same amount is then deductible by the Company.
15
<PAGE>
A participant realizes no income as a result of the grant of a NQSO
under the 1996 Stock Option Plan. However, a participant realizes ordinary
income upon the exercise of the NQSO (or at the later date described below)
equal to the excess of the fair market value of the shares at the time of
exercise (or at such later date) over the option exercise price. The Company is
not entitled to a federal income tax deduction upon the grant of the NQSO, but
upon transfer of the shares to such participant upon its exercise (or at the
later date described below) an amount corresponding to the participant's taxable
income becomes deductible by the Company. The amount of income recognized at the
time of exercise is added to the option price to determine the participant's
basis in the shares, and any further appreciation upon ultimate sale of the
shares is taxable as short- or long-term capital gains (with the holding period
measured from the date of exercise). If the shares received upon exercise are
not transferable and are subject to a substantial risk of forfeiture, the
realization of compensation income is postponed until the earlier of the lapse
of the forfeiture restrictions or the making of an "IRC 83(b) election." For
such purposes, potential liability by Company insiders under securities laws
with respect to short swing trading constitutes a substantial risk of
forfeiture. Where other shares of stock have been purchased within six months of
exercise of the option, recognition of the compensation attributable to such
exercise may be postponed for a period of six months from the date of purchase
of such other shares of stock due to such liability.
The foregoing is only a summary of the principal tax consequences to
the Company and the participants from the grant and exercise of options under
the 1996 Stock Option Plan.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" FOR APPROVAL OF THE
PROPOSAL TO AMEND THE 1996 STOCK OPTION PLAN
INDEPENDENT PUBLIC ACCOUNTANTS
Representatives of Ernst & Young LLP, the Company's independent
public accountants for the fiscal year ended July 31, 1999, are expected to
attend the Meeting and will be available to respond to appropriate questions.
Such representatives will also be given an opportunity to make a statement if
they so desire. The Board of Directors has selected Ernst & Young LLP as its
accountants for the fiscal year ending July 31, 2000.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Stockholders who desire to submit proposals for inclusion in the
Company's proxy statement for the 2000 Annual Meeting of Stockholders of the
Company must submit such proposals to the Secretary of the Company at the
Company's principal executive office by July 10, 2000.
OTHER MATTERS
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH BENEFICIAL HOLDER OF
ITS COMMON STOCK ON THE RECORD DATE WHO DID NOT RECEIVE A COPY OF THE COMPANY'S
ANNUAL REPORT, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT OF FORM 10-KSB FOR THE FISCAL YEAR ENDED JULY 31, 1999 AS FILED
WITH THE SEC. ANY SUCH REQUEST SHOULD BE MADE IN WRITING TO THE SECRETARY OF THE
COMPANY, 13 COLUMBIA DRIVE, SUITE 5, AMHERST, NEW HAMPSHIRE, 03031.
16
<PAGE>
As of the date of this Proxy Statement, the Board of Directors of the
Company does not know of any other matters to be brought before the Meeting
other than as set forth in this Proxy Statement. However, if any other matters
not mentioned in the Proxy Statement are properly brought before the Meeting or
any adjournments thereof, the persons named in the enclosed Proxy or their
substitutes will have discretionary authority to vote proxies given in said
form, or otherwise act, in respect of such matters in accordance with their best
judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Michael T. Pieniazek
Secretary
November 30, 1999
STOCKHOLDERS ARE URGED TO DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE
ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE
APPRECIATED.
17
<PAGE>
AMERICAN ELECTROMEDICS CORP.
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER , 1999
--
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of American Electromedics Corp. a Delaware
corporation (the "Company"), acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, dated November 30, 1999, and hereby
constitutes and appoints Thomas A. Slamecka or Michael T. Pieniazek, and either
jointly or severally, to vote all shares of Common Stock of the which the
undersigned would be entitled to vote at the 1999 Annual Meeting of Stockholders
(the "Meeting"), and at any adjournment or adjournments thereof, hereby revoking
any proxy or proxies heretofore given and ratifying and confirming all that said
proxies may do or cause to be done by virtue thereof with respect to the
following matters:
1. The election of six (6) directors nominated by the Board of
Directors.
FOR all nominees listed below WITHHOLD AUTHORITY
(except as indicated) [ ] to vote for all nominees
listed below [ ]
NOMINEES: Blake C. Davenport, Jim Fukushima, Michael T Pieniazek,
Andy Rosch, Marcus R. Rowan and Thomas A. Slamecka
(INSTRUCTION: To withhold authority to vote for any individual nominee
or nominees, write such nominee's or nominees' name(s)
in the space provided below.)
---------------------------------------------------------------------
2. Approve an amendment to the Certificate of Incorporation to
increase the number of authorized shares of Common Stock to
35,000,000 shares.
FOR AGAINST ABSTAIN
-- -- --
3. Approve an amendment to the Certificate of Incorporation to
change the Company's name to Equidyne Corporation
FOR AGAINST ABSTAIN
-- -- --
4. Approve an amendment to the 1996 Stock Option Plan to increase
the number of shares reserved for issuance thereunder to
900,000 shares.
FOR AGAINST ABSTAIN
-- -- --
5. Other matters as may properly come before the Meeting or any
adjournment or adjournments thereof.
This Proxy, when properly executed, will be voted as directed. If no
direction is indicated, the Proxy will be voted FOR the above proposals.
Dated: , 1999
----------------
(L.S.)
-------------------------------
(L.S.)
-------------------------------
Please sign your name exactly as
it appears hereon. When
signing as attorney,
executor, administrator,
trustee or guardian, please
give your full title as it
appears hereon. When signing as
joint tenants, all parties in
the joint tenancy must
sign. When a proxy is given
by a corporation, it
should be signed by an authorized
officer and the corporate seal
affixed. No postage is
required if returned in the
enclosed envelope and
mailed in the United States.
<PAGE>
PLEASE SIGN, DATE AND MAIL THIS PROXY
IMMEDIATELY IN THE ENCLOSED ENVELOPE.
2
