<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 25, 1993, Commission file number 33-4649
RODMAN & RENSHAW CAPITAL GROUP, INC.
(Exact name of Registrant as specified in its charter)
Delaware 36-3111956
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
120 S. LaSalle Street, Chicago, Illinois 60603
Address of principal executive offices Zip Code
Registrant's telephone number, including area code (312) 977-7800
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of exchange on which registered
Common Stock, par value $0.09 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by a check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [x] NO [ ]
Indicate by a check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [x]
As of November 1, 1993, 4,380,217 shares of Common Stock, par value $0.09 per
share, were outstanding, and the aggregate market value of the shares of Common
Stock of the Registrant held by non-affiliates (based upon the closing price of
the Registrant's shares on the New York Stock Exchange on November 1, 1993,
which was $7.625) was $28,727,000.
Documents Incorporated By Reference
NONE
Page 1 of 12 Pages
<PAGE> 2
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth information concerning the age, current
positions with the Company, and term of office as a director and period of
service as such, for all of the directors of the Company, as of November 1,
1993:
<TABLE>
<CAPTION>
Year Became
A Director
(Expiration
of Current
Name Age Term) Office & Title
- ---- --- ------------ --------------
<S> <C> <C> <C>
Vaughn R. Blake 43 1992 Director
(1995)
Victor C. Chigas 66 1989 Executive Vice President and
(1994) Director
Mark J. Grant (1) 42 1991 Executive Vice President and
(1995) Director
Lawrence R. Helfand 57 1981 Executive Vice President and
(1993) Director
Jonathon D. Kantor 38 1993 Director
(1993)
Kenneth M. Karmin 32 1990 Director
(1993)
Kurt B. Karmin 65 1988 Chairman of Board of Directors
(1995) and Chief Executive Officer
Scott H. Lang 46 1985 Executive Vice President and
(1994) Director
Norman E. Mains 50 1991 President, Chief Operating
(1994) Officer and Director
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C> <C> <C>
Gregory P. Quinlivan 33 1992 Secretary, General Counsel,
(1993) Executive Vice President and
Director
Peter J. Schild 46 1993 Chief Financial Officer,
(1994) Executive Vice President and
Director
</TABLE>
(1) Served previously as a director of the Company from 1987 to 1988.
Information is furnished below concerning the business experience of directors
and executive officers, including the period of service of executive officers.
Vaughn R. Blake has served since 1987 as a Managing Director for
Creditanstalt International Advisers, Inc., an investment banking subsidiary of
Creditanstalt-Bankverein, which provides corporate finance advisory, securities
brokerage and money management services.
Victor C. Chigas has served since June 1991 as an Executive Vice
President of the Company and Rodman & Renshaw, Inc. ("Rodman"), a wholly-owned
subsidiary of the Company, having served previously as a Senior Vice President
of both companies since 1988. Prior to such time, Mr. Chigas was a Senior Vice
President of the Investment Management Group of Drexel Burnham Lambert Inc.
Mark J. Grant served as a Senior Vice President of the Company and
Rodman from 1987 to 1989, and has served as an Executive Vice President of the
Company and Rodman since then. Mr. Grant has also served as Managing Director
of Rodman's Fixed Income Department since 1990.
Lawrence R. Helfand has served as an Executive Vice President of the
Company and Rodman since 1988, and was a Senior Vice President prior thereto.
Mr. Helfand is also Rodman's Managing Director of Retail Sales.
Jonathon D. Kantor is a partner with the law firm of Shea & Gould, a
nationwide law firm headquartered in New York City. Mr. Kantor has been with
that firm since 1980. Mr. Kantor also serves on the board of directors of
First City Industries, Inc. and the American Symphony Orchestra.
Kenneth M. Karmin has served as a managing director with Credit
Agricole since August 1993. From 1988 to 1993 Mr. Karmin served as a Senior
Vice President of the Company and Rodman, and was also Managing Director of
Rodman's Financial Futures and Options Department. Prior to such time, Mr.
Karmin was employed by Drexel Burnham Lambert Inc.,
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<PAGE> 4
as a First Vice President in its Institutional Financial Futures Division.
Kurt B. Karmin has served as Chairman of the Board of Directors and
Chief Executive Officer of the Company and Rodman since 1990. From 1988 to
1990, Mr. Karmin served as a Vice Chairman of the Company and Rodman, and
President of the Company. Prior to joining the Company and Rodman, Mr. Karmin
was a Senior Vice President in charge of Midwest Operations for Drexel Burnham
Lambert Inc.
Scott H. Lang has served as an Executive Vice President of the Company
and Rodman since 1988, and was a Senior Vice President prior thereto. Mr. Lang
is also Managing Director of Rodman's Investment Banking Department, and a
director of Pacific International Services Corp.
Norman E. Mains has served as President and Chief Operating Officer of
the Company and Rodman since March, 1991. Prior thereto, Mr. Mains served as
Executive Vice President for the firm of Bateman Eichler, Hill Richards, Inc.,
from 1988 to 1991. Mr. Mains also served as First Vice President and Director
of Research for Drexel Burnham Lambert Inc. from 1982 to 1988. Mr. Mains is
also a director of Suncoast Savings & Loan Association, Hollywood, Florida.
Gregory P. Quinlivan has served since 1991 as Secretary and General
Counsel of the Company and Rodman. Mr. Quinlivan previously was Senior
Attorney for the Chicago Board of Trade from 1989-1991 and an enforcement
attorney for the Securities and Exchange Commission from 1987-1989.
Frederick G. Uhlmann, age 63, has served as an Executive Vice
President of the Company and Rodman since 1990, and previously served as a
Senior Vice President since joining the Company and Rodman since 1988. He was
a director of the Company from 1989 until 1993. Mr. Uhlmann has also served as
Managing Director of Rodman's Commodities Department in 1988. Prior to joining
the Company and Rodman, Mr. Uhlmann was a Senior Vice President with Bear,
Stearns & Co. Inc.
Peter J. Schild has served as Executive Vice President and Chief
Financial Officer of the Company and Rodman since 1992. Prior to joining the
Company and Rodman, Mr. Schild served as Senior Vice President and Treasurer of
Drexel Burnham Lambert Inc. from 1987 to 1992.
All officers of the Company serve at the discretion of the Board of
Directors. Certain of the Company's executive officers and directors serve as
officers and directors of other subsidiaries of the Company not specified in
the preceding discussion. There is no family relationship among any of the
executive officers or directors of the Company, except that Kenneth M. Karmin
is the son of Kurt B. Karmin.
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<PAGE> 5
On November 16, 1993, Mr. Kurt B. Karmin stepped down as Chief
Executive Officer, while remaining as Chairman of the Board, and Mr. Norman E.
Mains was elected to the additional position of Chief Executive Officer.
ITEM 11. EXECUTIVE COMPENSATION
Historically, the Company's executive officers have been paid
principally through commissions and incentives on a production basis, with the
exception of executive officers having substantial administrative
responsibilities.
The following table sets forth information concerning the compensation
for each of the registrant's last three completed fiscal years of those persons
(the "named executive officers") who were, at June 25, 1993 (i) the chief
executive officer and (ii) the other four most highly compensated executive
officers.
SUMMARY EXECUTIVE COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Fiscal Annual Compensation Compensation
Year ----------------------------------------------- ---------------
Name and Ended Other Annual Stock All Other
Principal Position June: Salary Bonus (2) Compensation (3) Options Compensation (4)
------------------- ---- ------ --------- ---------------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Kurt B. Karmin (1) 1993 $75,000 $40,083 $236,697 15,000 $16,263
Chairman of the Board 1992 75,000 72,000 294,769 -0-
of Directors and Chief 1991 75,000 -0- 338,556 20,000
Executive Officer
Victor C. Chigas 1993 -0- 56,741 1,164,444 14,000 47,686
Executive Vice 1992 -0- -0- 984,093 -0-
President 1991 -0- -0- 437,884 4,300
Mark J. Grant 1993 100,000 125,000 443,969 15,000 21,862
Executive Vice 1992 82,500 230,150 165,994 -0-
President 1991 70,833 35,967 246,298 5,000
Norman E. Mains (1) 1993 275,000 40,083 166 12,000 17,546
President and Chief 1992 258,333 98,000 162 50,000
Operating Officer 1991(5) 87,179 -0- -0- -0-
Kenneth M. Karmin 1993 -0- 50,441 323,239 -0- 85,744
Senior Vice President 1992 -0- -0- 379,217 12,500
1991 -0- -0- 363,549 -0-
</TABLE>
(1) On November 16, 1993, Mr. Kurt B. Karmin stepped down as Chief
Executive Officer, while remaining as Chairman of the Board, and Mr.
Norman E. Mains was elected to the additional position of Chief
Executive Officer.
(2) Bonuses are based on profitability of the specific department or area,
or multiple departments or areas, over which the executive has direct
responsibility.
(3) These amounts primarily consist of commissions earned from securities
and commodities transactions, and include amounts voluntarily deferred
under the Company's Voluntary Deferred Compensation Plan.
(4) Amounts included under "All Other Compensation" consist of (i) Company
matching funds under the Company's Retirement and Savings Plan (Mr.
Kurt B. Karmin, $873, Mr. Chigas, $873, Mr. Grant, $873, Mr. Mains,
$873, and Mr. Kenneth M. Karmin, $0.00); (ii) the Company's
contributions to the Supplemental Executive Retirement Plan (Mr. Kurt
B. Karmin, $15,390, Mr. Chigas,
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<PAGE> 6
$46,813, Mr. Grant, $20,989, Mr. Mains, $16,673 and Mr. Kenneth M.
Karmin $0.00); and (iii) in the case of Mr. Kenneth M. Karmin,
includes $64,000 in relocation and living expenses arising from his
assignment in London.
In accordance with the transitional provisions of the rules on
executive officer compensation adopted by the Securities and Exchange
Commission, "All Other Compensation" information is excluded for the
Company's 1992 and 1991 fiscal years.
(5) Mr. Mains joined the Company on February 25, 1991.
OPTION GRANTS IN THE FISCAL YEAR
ENDED JUNE 25, 1993
The following table presents information as to stock option awards to
each of the named executive officers during the fiscal year ended June 25,
1993. No stock appreciation rights were granted.
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option
Individual Grants Term (1)
----------------------------------------------------------------------- -----------------------------
% of Total
Options
Options Granted to Exercise
Granted Employees in Price Expiration
Name (#)2 Fiscal Year ($/SH) Date 5% 10%
---- ---- ------------ -------- ---------- ---- ---
<S> <C> <C> <C> <C> <C> <C>
Kurt B. Karmin 15,000 3.9% $5.00 5-10-98 $60,143 $128,671
Victor C. Chigas 14,000 3.6% 5.00 5-10-98 $56,134 $120,093
Mark J. Grant 15,000 3.9% 5.00 5-10-98 $60,143 $128,671
Norman E. Mains 12,000 3.1% 5.00 5-10-98 $48,115 $102,937
Kenneth M. Karmin -- -- -- -- -- --
</TABLE>
(1) The dollar amounts in these columns project the amount that could be
earned if the Common Stock appreciates at the annual rates indicated
from the date of grant and if the options are held until the
expiration dates shown. These rates of appreciation are specified by
the applicable rules of the Securities and Exchange Commission and are
not intended to forecast possible future actual appreciation, if any,
in the Company's stock prices.
(2) Options granted vest at 20% per year cumulatively and are exercisable
upon vesting.
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<PAGE> 7
AGGREGATED OPTION EXERCISES IN THE FISCAL YEAR ENDED JUNE 25, 1993
AND OPTION VALUES AT JUNE 25, 1993
The following table provides information as to the value of the
options held by each such executive officer at June 25, 1993. No options were
exercised by the named executive officers during the fiscal year ended June 25,
1993. The Company has not granted stock appreciation rights.
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options at
at FY-End (#) FY-End(1)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized Unexercisable Unexercisable
---- --------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Kurt B. Karmin - - 43,000/27,000 $6,000/$20,250
Victor C. Chigas - - 16,720/16,580 1,290/12,435
Mark J. Grant - - 27,000/18,000 1,500/13,500
Norman E. Mains - - 35,000/27,000 26,250/20,250
Kenneth M. Karmin - - 20,000/75,000 3,750/5,625
</TABLE>
(1) Based on a closing stock price of $5.75 per share on June 25, 1993.
REMUNERATION OF DIRECTORS
Directors who are not otherwise employed by the Company or any of its
subsidiaries are entitled to receive an annual retainer of $5,000 and $200 for
each meeting of the Board of Directors and any committee thereof attended by
them. Directors who are otherwise employed by the Company or a subsidiary of
the Company are not entitled to any additional compensation for serving as
directors.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
Pursuant to a Severance Agreement dated June 29, 1993 entered into
between Kenneth M. Karmin and the Company's subsidiary, Rodman & Renshaw, Inc.
("Rodman"), in connection with the sale of Rodman's United Kingdom branch to
Credit Agricole Futures, SNC,
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<PAGE> 8
Mr. Karmin has been paid $135,000 (excluding compensation to which he was
otherwise entitled for his services until his resignation on August 20, 1993,
as an employee of Rodman).
On June 28, 1993, the Company entered into a Change of Control
Employment Agreement with Norman E. Mains, its President and Chief Operating
Officer and a director (the "Employment Agreement"). (On November 16, 1993,
Mr. Mains was elected to the additional position of Chief Executive Officer.)
The Employment Agreement provides that in the event that there is a Change of
Control (as defined therein), which would occur upon consummation of the Offer
(see Item 12(c)), the Company agrees to employ Mr. Mains until June 30, 1995
(the "Employment Period") and he agrees to continue his employment with the
Company until at least one year after the Change of Control. During the
Employment Period, the Company may terminate him for "Cause", which includes
the commission of any felony, the habitual neglect of duties (other than on
account of disability), willful breach of duty in the course of employment and
inability to perform due to habitual alcohol or drug addiction. Mr. Mains may
terminate his employment during the Employment Period for "Good Reason", which
includes the assignment to him of duties other than senior executive and
administrative duties at least commensurate in all material respects with his
experience and abilities or the Company's requiring him to be based at a
location which is more than 25 miles from the location where he was employed
before the Change of Control.
The Employment Agreement provides that Mr. Mains would be paid an
annual base salary during the Employment Period in an amount at least equal to
12 times his highest monthly base salary during the 12-month period before the
Change of Control. (See "Summary Executive Compensation Table" for information
concerning Mr. Mains' past compensation.) In addition to the base salary, Mr.
Mains would be entitled to a bonus for each fiscal year within the Employment
Period in an amount equal to 2% of Pre-Tax Income (as defined in the Employment
Agreement) of the Company. If Mr. Mains' employment is terminated without
Cause or he terminates employment for Good Reason, then he is entitled to
receive his base salary, bonus and benefits as if he had remained employed
throughout the Employment Period (at the times he would have been entitled to
receive such amounts).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Victor C. Chigas and Mr. Norman E. Mains, who served during the fiscal year
ended June 25, 1993, as members of the Compensation Committee, were each,
during the fiscal year, executive officers of the Company.
Mr. Vaughn R. Blake, a director of the Company, who served during the fiscal
year ended June 25, 1993, as a member of the Company's Compensation Committee,
is a managing director for Creditanstalt International Advisers, Inc., an
investment banking subsidiary of Creditanstalt-Bankverein, which entered into a
lease of office space to the Company in November 1992 for a five year term, at
a monthly rental of approximately $12,000 subject to certain escalation
provisions. Creditanstalt-Bankverein also made a $3.5 million subordinated
loan to the Company
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<PAGE> 9
in 1990 (simultaneously with an equity investment that has since been sold to
an outside third party), bearing interest at a rate, at June 25, 1993, of LIBOR
plus 3%, due in eight annual installments beginning October 1, 1993. During
the fiscal year ended June 25, 1993, Creditanstalt-Bankverein received
interest payments from the company aggregating $202,000.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners.
As of November 1, 1993, there were 4,380,217 shares of the Company's
common stock outstanding. The following persons (and Mr. Kurt B. Karmin,
information on whom is provided in Item 12(b)), were known by the Company to be
the beneficial owners of more than 5% of such outstanding common stock:
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent of Total
- ---------------- ---------------- ----------------
<S> <C> <C>
Marshall S. Geller (1)
1875 Century Park East
Suite 1770
Los Angeles, CA 90067 436,130 9.96%
Josephthal Holdings Inc. (2)
Attn: Dan Purjes
200 Park Avenue
New York, NY 10166 339,700 7.76%
</TABLE>
(1) Based upon information contained in Schedule 13D, as amended, dated
September 15, 1993.
(2) Based upon information contained in Schedule 13D, as amended, dated
October 19, 1993.
-8-
<PAGE> 10
(b) Security Ownership of Management
The following table sets forth the beneficial ownership of the Company's common
stock as of November 1, 1993 by each director, by each of the named executive
officers, and by all directors and executive officers as a group:
<TABLE>
<CAPTION>
Name Number of Shares (1) Percent of Total (2)
---- -------------------- --------------------
<S> <C> <C>
Vaughn R. Blake -0- -0-
Victor C. Chigas 95,087 2.16%
Mark J. Grant 84,577 1.92%
Lawrence R. Helfand 32,100 *
Jonathon D. Kantor -0- -0-
Kenneth M. Karmin 135,589 3.08%
Kurt B. Karmin(3) 314,200 7.10%
Scott H. Lang 71,110 1.61%
Norman E. Mains 62,500 1.42%
Gregory P. Quinlivan 2,800 *
Peter J. Schild 18,000 *
All directors and officers as a 841,963 18.18%
group. (12 persons, including
those persons named above)
* LESS THAN 1%
</TABLE>
(1) Includes 250,820 shares of Common Stock of the Company subject to stock
options immediately exercisable (or exercisable within 60 days after
November 1, 1993) under the Company's Incentive Stock Option Plan. Of
those, options on 43,000 shares were held by Kurt B. Karmin, 16,720 by
Mr. Chigas, 27,000 by Mr. Grant, 32,100 by Mr. Helfand, 20,000 by
Kenneth M. Karmin, 30,200 by Mr. Lang, 35,000 by Mr. Mains, 2,800 by
Mr. Quinlivan and 18,000 by Mr. Schild.
(2) Pursuant to the requirements of Rule 13d-3d(1) promulgated under the
Securities Exchange Act of 1934, percentage ownership is calculated as
if the shares subject to immediately exercisable stock options
(including options which became exercisable within sixty days) held by
the persons identified in the above table had been issued to them and
were outstanding as of November 1, 1993, or within sixty days
thereafter.
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<PAGE> 11
(3) The address of Mr. Kurt B. Karmin, the beneficial owner of more than 5%
of the Common Stock of the Company, is 120 South LaSalle Street,
Chicago, Illinois, 60603.
(c) Change In Control
Pursuant to an Acquisition Agreement dated November 17, 1993
("Acquisition Agreement") among Abaco Grupo Financiero, S.A. de C.V.
("Parent"), Parent's majority owned subsidiary, Abaco Casa de Bolsa, S.A. de
C.V., ("Purchaser") and the Company, Purchaser has agreed to commence a tender
offer ("the Offer") within five business days for approximately 51% of the
outstanding shares of the Company, increased by the number of vested options
not cancelled pursuant to the Acquisition Agreement, upon payment of the
difference between the per share price of $10.50 to be paid in the Offer and
the exercise price. Consummation of the Offer is subject to various
conditions, including a minimum tender of at least 51% of the outstanding
shares of the Company or such smaller number of shares as would result
(together with the purchase at the Offer price of up to 220,000 shares of the
Company's common stock from the Company), in Purchaser becoming the owner of at
least 51% of the Company's outstanding common stock. Other conditions to the
Offer include the absence of any material adverse changes in the Company's
business, necessary United States and Mexican regulatory approvals, and other
conditions typical in transactions of this type. There can be no assurance
that the Offer will be consummated.
The Acquisition Agreement provides that on consummation of the Offer,
the Company will take action to amend its bylaws to (A) provide for not less
than 11 and not more than 21 directors, (B) eliminate the staggered board
provisions, (C) provide that directors must be Independent Directors (as
defined below), Parent Directors (as defined below), or employees of the
Company or its affiliates and (D) provide that the term of any director who
ceases to qualify as provided in clause (C) will terminate. The Company has
agreed to cause the Board of Directors on consummation of the offer to consist
of 11 Parent Directors, 2 Independent Directors, and 8 Company Directors (as
defined below). "Parent Directors" will be such persons as are designated by
Parent, as such designation may change from time to time. "Company Directors"
will initially be Messrs. Kurt B. Karmin, Victor C. Chigas, Mark J. Grant,
Lawrence R. Helfand, Scott H. Lang, Norman E. Mains, Gregory P. Quinlivan and
Peter J. Schild (each of whom is currently a director and executive officer of
the Company); provided that in the event that any of such initial directors
resigns or otherwise ceases to be a director for any reason, then, during the
three years after consummation of the offer, the other Company Directors will
have the right, by majority vote, to designate a replacement for such director
except in situations involving reduction of the number of directors, which
during such period will in no event reduce the number of Company Directors
below three. An "Independent Director" means any person designated by Parent
who (i) is in fact independent and qualifies as an independent director in
accordance with the New York Stock Exchange rules, (ii) is not connected with
Parent or the Company or any of their respective affiliates as an officer,
employee, trustee, partner, director (other than of the Company) or person
performing similar
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<PAGE> 12
functions and (iii) has not been employed by the Company or any of its
subsidiaries during the preceding year.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As a matter of policy, the Company does not intend to make any loans to
directors or executive officers of the Company other than in margin
transactions conducted in the ordinary course of the business. Directors and
executive officers of the Company maintain margin accounts with Rodman pursuant
to which Rodman may make loans for the purchase of securities. All margin
loans are made in the ordinary course of business, on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons and do not involve more than the
normal risk of collectibility or present other unfavorable features.
See also "Compensation Committee Interlocks and Insider Participation."
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
(Registrant) RODMAN AND RENSHAW CAPITAL GROUP, INC.
By PETER J. SCHILD
Peter J. Schild
Executive Vice President and Chief Financial Officer
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