<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240-14a-11(c) or
Section 240.14a-12
Rodman & Renshaw Capital Group, Inc.
- - -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Rodman & Renshaw Group, Capital Inc.
- - -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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 transactions applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
[ ] 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:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
RODMAN & RENSHAW CAPITAL GROUP, INC.
120 SOUTH LASALLE STREET
CHICAGO, ILLINOIS 60603
(312) 977-7800
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Annual Meeting") of Rodman & Renshaw Capital Group, Inc. (the "Company"), which
will be held on Wednesday, June 1, 1994 at 9:00 A.M., Central Standard Time, at
the Stouffer Riviere Hotel, 1 West Wacker Drive, Chicago, Illinois.
This will be the first Annual Meeting of the Company since the acquisition
by Abaco Casa de Bolsa, S.A. de C.V., Abaco Grupo Financiero of a majority of
the Company's outstanding common stock. Stockholders will be called upon to
elect 15 directors of the Company, to approve new Company stock option plans, to
approve the terms of the performance goal pursuant to which the Company's new
chief executive officer may receive performance-based compensation, to ratify
the appointment of Deloitte & Touche as independent auditors for the June 24,
1994 fiscal year, and to act upon such other business as may properly come
before the Annual Meeting.
The Notice of Annual Meeting and Proxy Statement follow herein. Please be
assured that we consider it important for your shares to be represented and
voted at the Annual Meeting. Please promptly mark, sign and date the enclosed
Proxy and return it in the enclosed envelope to ensure that your shares will be
represented. If you do attend the Annual Meeting, you may withdraw your Proxy
and vote in person, if you wish.
Sincerely,
Jorge Lankenau Rocha
Chairman of the Board
April 25, 1994
<PAGE> 3
RODMAN & RENSHAW CAPITAL GROUP, INC.
120 SOUTH LASALLE STREET
CHICAGO, ILLINOIS 60603
(312) 977-7800
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 1, 1994
TO THE STOCKHOLDERS OF RODMAN & RENSHAW CAPITAL GROUP, INC.:
The Annual Meeting of Stockholders (the "Annual Meeting") of Rodman &
Renshaw Capital Group, Inc., a Delaware corporation (the "Company") will be held
on Wednesday, June 1, 1994, at 9:00 A.M., Central Standard Time, at the Stouffer
Riviere Hotel, 1 West Wacker Drive, Chicago, Illinois, for the following
purposes:
1. To elect 15 directors to serve until the next Annual Meeting of
Stockholders, or until their respective successors have been duly elected and
qualified.
2. To approve the Rodman & Renshaw Capital Group, Inc. Non-Employee
Director Stock Option Plan.
3. To approve the Rodman & Renshaw Capital Group, Inc. 1994 Stock Option
Plan.
4. To approve the terms of the performance goal pursuant to which the
Company's new chief executive officer may receive performance-based
compensation.
5. To ratify the appointment of Deloitte & Touche as independent auditors
for the Company and its subsidiaries for the June 24, 1994 fiscal year.
6. To transact such other business as may properly be brought before the
Annual Meeting and any adjournments thereof.
Holders of record of Common Stock of the Company at the close of business
on April 15, 1994 will be entitled to notice of and will be eligible to vote on
all matters presented at the Annual Meeting and any adjournments thereof. A list
of such stockholders will be available for inspection at the Company's executive
offices, located at 120 South LaSalle Street, Chicago, Illinois 60603, beginning
ten days prior to the Annual Meeting.
By order of the Board of Directors,
James D. Van De Graaff
Secretary
April 25, 1994
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE MARK, SIGN AND DATE
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE TO ENSURE
THAT YOUR SHARES WILL BE REPRESENTED AT SUCH MEETING. YOU MAY WITHDRAW YOUR
PROXY AND VOTE IN PERSON IF YOU ATTEND THE MEETING.
<PAGE> 4
RODMAN & RENSHAW CAPITAL GROUP, INC.
120 SOUTH LASALLE STREET
CHICAGO, ILLINOIS 60603
(312) 977-7800
-------------------------
PROXY STATEMENT
-------------------------
Annual Meeting of Stockholders
June 1, 1994
-------------------------
This Proxy Statement and the accompanying Notice of Annual Meeting and form
of proxy are being furnished to the stockholders of Rodman & Renshaw Capital
Group, Inc., a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Stockholders (the "Annual Meeting") to be held on Wednesday,
June 1, 1994, at 9:00 A.M., Central Standard Time, at the Stouffer Riviere
Hotel, 1 West Wacker Drive, Chicago, Illinois, and any adjournments thereof, for
the purposes set forth in the attached Notice of Annual Meeting. These proxy
materials are being mailed on or about April 25, 1994 to holders of record of
the Company's Common Stock at the close of business on April 15, 1994.
A proxy may be revoked by a stockholder prior to its exercise by written
notice to the Secretary of the Company, by submission to the Secretary of
another proxy bearing a later date or by voting in person at the Annual Meeting.
Such notice or later proxy will not affect a vote on any matter taken prior to
the receipt thereof by the Company. The mere presence at the Annual Meeting of
the stockholder appointing the proxy will not revoke the appointment. If not
revoked, a properly executed and returned proxy will be voted at the Annual
Meeting in accordance with the instructions indicated on the proxy by the
stockholder, or, if no instructions are indicated, will be voted FOR the slate
of directors who have been nominated to the Board of Directors for a term ending
at the next annual meeting, FOR approval of the Rodman & Renshaw Capital Group,
Inc. 1994 Stock Option Plan and the Rodman & Renshaw Capital Group, Inc.
Non-Employee Director Stock Option Plan, respectively (collectively, the
"Plans"), FOR approval of the terms of the performance goal pursuant to which
the Company's new chief executive officer may receive performance-based
compensation (the "Performance Goal"), FOR ratification of the appointment of
Deloitte & Touche as the Company's independent auditors for the June 24, 1994
fiscal year and, as to any other matter that may be brought before the Annual
Meeting, in accordance with the judgment of the person or persons voting the
same.
All expenses incurred in connection with the solicitation of proxies will
be borne by the Company. The Company will request brokerage firms, nominees,
custodians and fiduciaries to forward proxy materials to the beneficial owners
of shares held of record by such persons and will reimburse such persons for
their reasonable out-of-pocket expenses in forwarding such materials.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Company's authorized capital stock consists of 20,000,000 shares of
Common Stock, par value $.09 per share ("Common Stock"), and 5,000,000 shares of
Preferred Stock, par value $.01 per share ("Preferred Stock"). As of March 31,
1994, there were 4,576,837 shares of Common Stock issued and outstanding. As of
the same date, there were no shares of Preferred Stock issued and outstanding.
Holders of record of the Company's Common Stock at the close of business on
April 15, 1994 are entitled to notice of and to vote at the Annual Meeting and
any adjournments thereof. Each holder of Common Stock is entitled to one vote
per share for the election of directors and on all other matters to be voted on
by the
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<PAGE> 5
Company's stockholders. Inasmuch as each share of Common Stock is entitled to
one vote, the total voting power of all such outstanding shares of Common Stock
as of March 31, 1994 was therefore 4,576,837 votes.
Holders of Common Stock may not cumulate their votes in the election of
directors. Therefore, holders of Common Stock entitled to exercise more than 50%
of the voting rights are able to elect all of the directors to be elected at
each annual meeting, to approve the Plans and the Performance Goal, to ratify
the appointment of independent auditors and to cast a sufficient number of votes
to control the affairs of the Company subject to a vote of stockholders. Abaco
Casa de Bolsa, S.A. de C.V., Abaco Grupo Financiero ("Abaco"), which holds
approximately 52% of the outstanding Common Stock, has advised the Company that
it intends to vote its shares for the election of the nominees described under
the caption "Proposal 1 -- Election of Directors," for approval of the Plans and
the Performance Goal and for ratification of the appointment of independent
auditors.
The presence in person or by proxy at the Annual Meeting of the holders of
a majority of the issued and outstanding Common Stock shall constitute a quorum.
Election of a director requires the affirmative votes of the holders of a
plurality of the Common Stock present in person, or represented by proxy, at a
meeting (at which a quorum is present). Therefore, the 15 persons receiving the
greatest number of votes shall be elected as Directors. Since only affirmative
votes count for this purpose, withheld votes will not affect the outcome, except
that they will count in determining the presence of a quorum.
With respect to each of the Plans and ratification of the appointment of
independent auditors, a stockholder may mark the accompanying form of proxy to
(i) vote for the matter, (ii) vote against the matter or (iii) abstain from
voting on the matter. Assuming that a quorum is present at the Annual Meeting,
the affirmative vote of a majority of the shares of stock represented at the
Annual Meeting and entitled to vote on the matter is required for approval of
each matter. Proxies marked to abstain from voting with respect to any of the
matters will have the legal effect of voting against such matter.
With respect to the Performance Goal, a stockholder may mark the
accompanying form of proxy to (i) vote for approval of the Performance Goal,
(ii) vote against approval of the Performance Goal or (iii) abstain from voting
on the Performance Goal. Assuming that a quorum is present at the meeting, the
affirmative vote of a majority of the shares of stock voted on the matter is
required for approval of the Performance Goal. Proxies marked to abstain from
voting with respect to this matter will not affect the outcome.
Proxies submitted by brokers for shares beneficially owned by other persons
may indicate that all or a portion of the shares represented by such proxies are
not being voted with respect to approval of either or both of the Plans or of
the Performance Goal. This is because the rules of the New York Stock Exchange
do not permit a broker to vote stock held in street name with respect to these
matters in the absence of instructions from the beneficial owner of the stock.
The shares represented by broker proxies which are not voted with respect to the
Plans, the Performance Goal and ratification of the appointment of independent
auditors will not be considered represented at the meeting and entitled to vote
on such matters.
The following table sets forth information concerning the beneficial
ownership of the Company's Common Stock by (i) each stockholder owning more than
5% of the outstanding Common Stock, (ii) each director of the Company and each
nominee for election as director; (iii) each of the named executive officers (as
listed in the Summary Compensation Table below) and (iv) all current directors
and executive officers of the Company as a group. The information for Messrs.
Chigas, Grant, Kenneth Karmin, Kurt Karmin and Mains is as of January 10, 1994,
which is the most recent date for which the Company has such information.
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<PAGE> 6
None of such persons is currently employed by the Company and all options
granted to them by the Company have been cancelled. The information for all
other persons listed on the table is as of March 31, 1994.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
IDENTITY OF HOLDER OWNERSHIP(1) OF CLASS(2)
- - --------------------------------------------------------------------- ------------ -----------
<S> <C> <C>
Abaco(3)............................................................. 2,363,003 51.63%
- - ---------------------------------------------------
Victor C. Chigas..................................................... 51,125 1.12
Mark J. Grant........................................................ 52,278 1.14
Kenneth M. Karmin.................................................... 103,479 2.26
Kurt B. Karmin(4).................................................... 303,000 6.61
Norman E. Mains...................................................... 35,000 *
- - ---------------------------------------------------
Alexander C. Anderson................................................ 0 --
Paul C. Blackman..................................................... 2,075 *
Eduardo Camarena Legaspi(5).......................................... 0 --
Charles W. Daggs, III................................................ 0 --
Jorge Antonio Garcia Garza(5)........................................ 0 --
Lawrence R. Helfand.................................................. 46,751 1.02
Scott H. Lang........................................................ 70,635 1.54
Jorge Lankenau Rocha(5).............................................. 0 --
Thomas E. Meade...................................................... 0 --
Mauricio Morales Sada(5)............................................. 0 --
Richard Pigott....................................................... 0 --
David S. Ruder....................................................... 10,000 *
Peter J. Schild...................................................... 18,000 *
Joseph P. Shanahan(5)................................................ 0 --
Frederick G. Uhlmann................................................. 37,563 *
All current directors and executive officers as a group (18
persons)(3)(5)..................................................... 188,924 4.13
- - -------------------------
</TABLE>
* Less than 1%
(1) Includes 48,125 shares of Common Stock of the Company subject to stock
options vested under the Company's Incentive Stock Option Plan adopted in
1983, as amended and restated in 1988, and as amended in 1991, and
exercisable within 60 days after March 31, 1994. Of those, the following
numbers of shares are subject to stock options exercisable within 60 days
after March 31, 1994: Mr. Blackman, 2,075; Mr. Helfand, 3,300; Mr. Lang,
11,900; Mr. Schild, 18,000; and Mr. Uhlmann, 3,450. For each of the
following persons, the number of shares of Common Stock shown as owned in
the table includes shares, as follows, subject to a contract with Abaco
dated as of January 10, 1994, under which Abaco will acquire such shares in
January, 1995, at a purchase price of $10.50 per share plus interest at 4%
per annum: Mr. Helfand, 32,100 shares; Mr. Lang, 21,000 shares; Mr. Schild,
0 shares; and Mr. Uhlmann, 27,000 shares.
(2) Pursuant to the requirements of Rule 13d-3(d)(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 become exercisable within 60 days) held by the persons
identified in the above table had been issued to them and were outstanding,
as of March 31, 1994, or within 60 days thereafter.
(3) The address of Abaco is Montes Rocallosos, 505 Sur, Residencial San Agustin,
66260, Garza Garcia, N.L. Mexico. Abaco is the beneficial owner of 51.63%
of the Common Stock of the Company. Parent, defined below, also is deemed
the beneficial owner of Abaco's Common Stock. Abaco has the right, under
the Acquisition Agreement, defined below, to acquire Common Stock from the
Company under certain circumstances. See "Change of Control." See also Note
1, above.
(4) Not included are 11,200 shares of Common Stock owned as of January 10, 1994,
by the Lonny H. Karmin Trust, the Trustee of which is Lonny H. Karmin, Mr.
Kurt B. Karmin's wife. As of that date, Mr. Karmin disclaimed beneficial
ownership of said shares.
(5) Not included are 2,363,003 shares held by Abaco, of which the referenced
person is a director and/or officer. See "Proposal 1 -- Election of
Directors."
3
<PAGE> 7
CHANGE OF CONTROL
Pursuant to the Acquisition Agreement dated as of November 17, 1993, (the
"Acquisition Agreement") among the Company, Abaco, and Abaco's parent, Abaco
Grupo Financiero, S.A. de C.V., a Mexican corporation that owns 99.99% of Abaco
("Parent"), Abaco acquired by purchase in a tender offer consummated on December
22, 1993, at a price of $10.50 per share, net to the sellers in cash, 2,363,003
shares of the Company's Common Stock, as a result of which Abaco is the owner,
at March 31, 1994, of 51.63% of the Company's outstanding Common Stock, and
controls the Company. The aggregate cost to Abaco of its acquisition of the
Company's Common Stock (including fees and expenses related thereto) was
approximately $26 million and was financed through the use of internally
available funds and capital contributions from Parent. The Company entered into
agreements with employees of the Company (other than executive officers)
pursuant to the Acquisition Agreement under which such employees agreed to the
cancellation of employee stock options on an aggregate of 445,240 shares and
were paid by the Company $2,026,607 in the aggregate (i.e., for each cancelled
option, the difference between $10.50 per share and the per share option
exercise price.)
Pursuant to the Acquisition Agreement, the Company's Board of Directors (i)
amended the Company's by-laws to (A) provide for not less than eleven 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, and (ii) reconstituted the Company's Board to consist
of eleven Parent Directors, two Independent Directors and eight Company
Directors (as defined below). Since the consummation of the tender offer, the
Company's Board has terminated the employment of four of the Company Directors,
who then became ineligible to serve as Directors, and accepted resignations from
one Company Director, six Parent Directors, and two Independent Directors. It
has appointed two new Company Directors, two new Parent Directors and two new
Independent Directors.
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
functions and (iii) has not been employed by the Company or any of its
subsidiaries during the preceding year. "Parent Directors" means such persons as
are designated by Parent. "Company Directors" currently means the following
persons, each of whom is a director of the Company: Messrs. Blackman, Helfand,
Lang, Schild and Uhlmann; provided that in the event that any of such directors
resigns or otherwise ceases to be a director for any reason, then, until
December 21, 1996, 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. The other Company
Directors designated Messrs. Blackman and Uhlmann pursuant to this provision.
The Acquisition Agreement provides that until December 21, 1996, (i) the Board
will consist of not less than eleven directors and that the number of Parent
Directors will be equal to one more than the total number of other Directors,
who will consist solely of two Independent Directors and the Company Directors,
and (ii) the Board's audit committee and compensation committee shall consist
solely of Independent Directors. The Acquisition Agreement also provides that
until December 21, 1995, the Company will not, without the approval of a
majority of the Company Directors and Independent Directors, voting together,
engage in any going private transaction, as defined in Rule 13e-3 under the
Securities Exchange Act of 1934 (the "Exchange Act") or take any action to cause
the Common Stock to cease to be registered under the Exchange Act or delisted
from the New York Stock Exchange.
Under the Acquisition Agreement, if the Company issues stock and the result
of the issuance is that Parent beneficially owns less than 51% of the Total
Voting Power, as defined below, Parent has the right, for 30 days after notice
of such issuance, to acquire from the Company a number of shares of stock of the
class issued so as to result in Parent beneficially owning 51% of the Total
Voting Power. The price of such shares purchased by Parent is the price at which
such shares had been issued by the Company, except in the case of
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<PAGE> 8
shares issued upon exercise of employee stock options, in which case the price
is the fair market value of the Common Stock on the date that Parent gives
notice of its election to buy. "Total Voting Power" means the aggregate voting
power (in an election of directors) of all of the Voting Stock. "Voting Stock"
generally means stock having the power to vote in the election of directors of
the Company; currently, the Common Stock is the only Voting Stock.
Parent and Abaco have agreed in the Acquisition Agreement that, from
December 21, 1993 through December 21, 1994, Parent will cause the Company to,
and the Company will, continue to provide to employees of the Company benefits
under employee benefit plans which, in the aggregate, are not less favorable
than those provided by the Company to such employees as of the date of the
Acquisition Agreement. Parent has further agreed that Parent will, and will
cause the Company to, (i) honor without modification all terms of all employee
severance plans, employment agreements and severance agreements adopted by the
Board of Directors prior to the date of the Acquisition Agreement or otherwise
permitted by the Acquisition Agreement; (ii) honor without modification until
December 31, 1994 all terms of employee compensation arrangements including,
without limitation, broker payout grids and customer commission schedules for
the Company's employees unless such arrangements are modified with the approval
of a majority of the Company Directors. In addition, the Acquisition Agreement
provides that it is understood and agreed by Parent, Abaco and the Company that
management of the Company may recommend to the Board of Directors reasonable and
prudent additional compensation of specified employees for purposes of
incentivization and retention.
Abaco agreed in the Acquisition Agreement that, at all times after December
21, 1993, it will cause the Company and its subsidiaries to indemnify each
person who is now, or has been at any time prior to the date of the Acquisition
Agreement, an employee, agent, director or officer of the Company or of any of
the Company's subsidiaries, together with each such person's heirs,
representatives, successors and assigns (individually an "Indemnified Party" and
collectively the "Indemnified Parties"), to the same extent and in the same
manner as is now provided in the respective charters or by-laws of the Company
and such subsidiaries or otherwise in effect on the date of the Acquisition
Agreement, with respect to any claim, liability, loss, damage, cost or expense,
whenever asserted or claimed ("Indemnified Liability"), based in whole or in
part on, or arising in whole or in part out of, any matter existing or occurring
at or prior to December 21, 1993. In addition, Abaco has agreed that it will
cause the Company to maintain in effect at least through December 21, 1998, the
current policies of directors' and officers' liability insurance maintained by
the Company and the Company's subsidiaries on the date of the Acquisition
Agreement (provided that Abaco may substitute therefor policies having at least
the same coverage and containing terms and conditions which are not less
advantageous to the persons currently covered by such policies) with respect to
matters existing or occurring at or prior to December 21, 1993, provided, that
in no event will the Company be required to expend in any year in excess of 200%
of the per annum rates paid by the Company and its subsidiaries for such
insurance on the date of the Acquisition Agreement. If, because of the
aforementioned ceiling on premiums, the Company provides policies (at any time
during the five-year period ending December 21, 1998) affording less coverage
than is provided under the Company's existing policies, the Company is obligated
to indemnify the Indemnified Parties for the balance of such insurance coverage
as though it were the insurer.
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting to be held on June 1, 1994, 15 directors will be
elected to hold office until the next annual meeting and until their successors
have been elected and have qualified. The nominees are listed below with brief
biographies. The terms of all current directors will expire at the Annual
Meeting.
Should any nominee become unable or unwilling to accept the nomination or
election, it is intended that the persons named in the enclosed proxy will vote
the shares that they represent for the election of a nominee designated by the
Board of Directors. At present, it is not anticipated that any nominee will not
be a candidate.
The Board of Directors recommends that the stockholders vote FOR the
nominees listed below as directors of the Company.
5
<PAGE> 9
The following table sets forth the age, current positions with the Company,
period of service as a director and business experience for the past five years
for all of the directors of the Company:
<TABLE>
<CAPTION>
NAME AGE, BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS
- - ----------------------------------- --------------------------------------------------------
<S> <C>
Alexander C. Anderson.............. Age 47; Director since April 11, 1994; Research Director
of Abaco since 1989.
Paul C. Blackman................... Age 53; Director, Executive Vice President of the
Company since April 11, 1994; Senior Vice President of
the Company since 1993; Senior Vice President of Dean
Witter Reynolds Inc., a financial services firm, from
1990 to 1993; General Partner and National Sales Manager
of Cowen & Co., a financial services firm, from 1979 to
1990.
Eduardo Camarena Legaspi........... Age 43; Director since 1993; Chief Executive Officer of
Abaco since 1991; Director of Abaco since 1985, Director
of Parent since 1992 and Director of Confia, S.A.,
Institucion de Banca Multiple, Abaco Grupo Financiero,
Parent's commercial bank subsidiary ("Confia, S.A.")
since 1991.
Charles W. Daggs, III.............. Age 46; Director, Chief Executive Officer of the Company
and President of Rodman & Renshaw, Inc. ("Rodman") since
April 11, 1994; Senior Managing Director, Bear Stearns &
Co., Incorporated, a financial services firm, from 1991
to 1994; Chairman, President and Chief Executive Officer
of Sutro & Co. Incorporated, a financial services firm,
from 1986 to 1990.
Jorge Antonio Garcia Garza......... Age 32; Director since 1993; General Counsel, Secretary
of the Board of Directors of Parent since 1992; General
Counsel of Abaco since 1985 and Secretary of Abaco's
Board of Directors since 1986; General Counsel of
Confia, S.A. since 1992, Secretary of the Board of
Directors of Confia, S.A. since 1993 and Director of
Confia, S.A. since 1991.
Lawrence R. Helfand................ Age 58; Director since 1981; Executive Vice President of
the Company and Rodman and Managing Director of Rodman's
Retail Sales Department.
Scott H. Lang...................... Age 47; Director since 1985; Executive Vice President of
the Company and Rodman and Managing Director of Rodman's
Investment Banking Department. Mr. Lang also serves as a
director of Pacific International Services Corp. and of
Thomas Group, Inc.
Jorge Lankenau Rocha............... Age 50; Director since 1993; Chairman of the Board of
Parent since 1992 and of Abaco since 1985; Chief
Executive Officer of Abaco from 1985 to 1991; Chairman
of the Board and Chief Executive Officer of Confia, S.A.
since 1991.
Thomas E. Meade.................... Age 53; Director since March 18, 1994; President of
Private Capital Management, Inc., an investment
management firm, since 1993; President of Fidelity
Brokerage, a securities brokerage firm, from 1992 to
1993; President of Kemper Securities/Boettcher, a
securities brokerage firm, from 1988 to 1991.
Mauricio Morales Sada.............. Age 32; Director since 1993; Vice President of Sales of
Abaco since 1993; securities broker for Abaco prior
thereto.
Richard Pigott..................... Age 53; Director since March 18, 1994; investor and
financial advisor since 1988.
</TABLE>
6
<PAGE> 10
<TABLE>
<CAPTION>
NAME AGE, BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS
- - ----------------------------------- --------------------------------------------------------
<S> <C>
David S. Ruder..................... Age 64; Director since 1993; partner in the Chicago
office of Baker & McKenzie, an international law firm,
since 1990. Chairman of the Securities and Exchange
Commission from 1987 to 1989. Member of the Board of
Governors of the National Association of Securities
Dealers, Inc., from 1990 to 1993. Mr. Ruder also serves
as a Director of Quixote Corporation.
Peter J. Schild.................... Age 46; Director since 1993; Executive Vice President
and Chief Financial Officer of the Company and Rodman
since 1992. Senior Vice President and Treasurer of
Drexel Burnham Lambert Inc. from 1987 to 1992.
Joseph P. Shanahan................. Age 46; Director since 1993; President from 1992 to
January, 1994, and April 11, 1994 to present of Abaco
International Corporation, a wholly-owned subsidiary of
Abaco and a registered broker-dealer and member of the
National Association of Securities Dealers, Inc., based
in New York City; Vice President of the Company and
President of Rodman from January to April, 1994;
Treasurer/Managing Director of Keane Securities Co.,
from 1980 to 1990, and consultant to Excalibur
Management, Ltd., from 1990 to 1992.
Frederick G. Uhlmann............... Age 64; Director from 1989 to 1993 and since April 11,
1994; Executive Vice President of the Company and Rodman
since 1990; Senior Vice President of the Company and
Rodman from 1988 to 1990.
</TABLE>
Board and Committee Meetings, Committee Functions, and Composition. The
Board of Directors held eleven meetings (exclusive of committee meetings) during
the fiscal year of the Company ended on June 25, 1993. Each of the directors who
was a member of the Board during the fiscal year ended June 25, 1993, attended
at least 75% of the Board meetings that he was eligible to attend during such
year. Each director who was a member of a Board committee during the fiscal year
ended June 25, 1993 attended at least 75% of the meetings of each committee that
he was eligible to attend as a member.
(i) Executive Committee. The Executive Committee of the Board of Directors,
which currently consists of Messrs. Charles W. Daggs, III, Eduardo Camarena
Legaspi, and Mauricio Morales Sada, meets as required. The Executive Committee
has the authority, between meetings of the Board of Directors, to take all
actions with respect to the management of the Company's business that require
action of the Board of Directors, except with respect to certain matters that by
law must be approved by the entire Board. The Executive Committee met
approximately 30 times during the fiscal year of the Company ended June 25,
1993.
(ii) Audit Committee. The Audit Committee currently consists of Messrs.
Thomas E. Meade and Richard Pigott, each of whom is a director not otherwise
employed by Abaco, Parent, the Company or any subsidiary of the Company or
otherwise affiliated with the management of the Company or its subsidiaries. The
Audit Committee is responsible for reviewing and helping to ensure the integrity
of the Company's financial statements. Among other matters, the Audit Committee
reviews the Company's internal accounting controls and financial statements,
reviews with the Company's independent accountants the scope of their audit,
their report and their recommendations and recommends the selection of the
Company's independent accountants. The Committee met three times during the
fiscal year of the Company ended June 25, 1993.
(iii) Compensation Committee. The Compensation Committee, which currently
consists of Messrs. Meade and Pigott, formulates recommendations to the Board
with respect to compensation to be paid to executive officers and other key
managerial personnel of the Company. The Compensation Committee met two times
during the fiscal year of the Company ended June 25, 1993. During its 1993
fiscal year, the Board of Directors also had a Stock Option Plan Committee,
which made recommendations of employee stock option grants to the Compensation
Committee. The Stock Option Committee met four times during the fiscal year
7
<PAGE> 11
ended June 25, 1993. The Board has discontinued the Stock Option Plan Committee
and assigned its functions to the Compensation Committee.
(iv) Nominating Committee. The Nominating Committee, which currently
consists of Messrs. David S. Ruder, Eduardo Camarena Legaspi and Jorge Antonio
Garcia Garza, makes recommendations to the Board of Directors in regard to
persons who might be considered for nomination or appointment to the Board, and
with respect to persons who might be selected as executive officers of the
Company. The Nominating Committee met three times during the fiscal year of the
Company ended June 25, 1993. The Nominating Committee will consider nominees
recommended by stockholders in compliance with the procedures set forth below
under "Other Matters."
PROPOSAL 2
APPROVAL OF RODMAN & RENSHAW CAPITAL GROUP, INC.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
The Board of Directors has adopted the Rodman & Renshaw Capital Group, Inc.
Non-Employee Director Stock Option Plan (the "Director Plan"), and directed that
it be presented to the Company's stockholders for their approval at this Annual
Meeting. The purpose of the Director Plan is to assist in attracting, retaining
and motivating non-employee directors of outstanding ability and to promote
identification of their interests with those of the stockholders of the Company.
The following is a summary of the Director Plan and is qualified in its entirety
by the full text of the Director Plan attached to this Proxy Statement as
Exhibit A.
Scope of the Director Plan
Stock options granted under the Director Plan will be non-qualified stock
options. The aggregate number of shares of Common Stock which may be purchased
pursuant to the exercise of options granted under the Director Plan is 400,000
shares. If and to the extent an option expires or terminates for any reason
without having been exercised in full (including a cancellation of an old award
in connection with the grant of a substitute new award), or shall be forfeited,
without, in either case, the optionee having enjoyed any of the benefits of
stock ownership, the shares of stock associated with such option shall be
available for future option grants under the Director Plan.
The Director Plan provides for equitable adjustments of the aggregate
number of shares available under the Director Plan and the number of shares
subject to and the option exercise price of outstanding options to reflect a
stock dividend, stock split, reverse stock split, share combination,
recapitalization, merger, consolidation, asset spin-off, reorganization, or
similar event, of or by the Company. Notwithstanding the foregoing, upon the
approval by the stockholders of the Company of a plan of liquidation for the
Company, any unexercised options shall become exercisable.
Administration of the Director Plan
The Director Plan will be administered by the Secretary of the Company, who
will have the authority to construe and interpret the Director Plan, and to
establish or adopt rules, regulations and forms relating to the administration
of the Director Plan. The Secretary shall have no authority to add to, delete
from or modify the terms of the Director Plan, as the Director Plan shall be
nondiscretionary as to the eligibility of participants and the timing and
amounts of the grants. The Director Plan provides that neither the Secretary nor
any member of the Board shall be liable for any action or determination made in
good faith with respect to the Director Plan or any option.
Eligible Participants in the Director Plan
Only duly elected members of the Board who are not employees of the
Company, a subsidiary of the Company or any entity owning 51% or more of the
outstanding voting stock of the Company, or any other entity controlling,
controlled by or under common control with such entity (each a "Non-Employee
8
<PAGE> 12
Director") are eligible to receive options under the Director Plan. If the
current nominees for director are all elected, Messrs. Meade, Pigott and Ruder
will be eligible to participate in the Director Plan. As of the date hereof, no
options have been granted under the Director Plan.
Terms of Options Granted Under the Director Plan
On July 1 (or if not a business day, the next business day) of each year
during the term of the Director Plan, each person who is then a Non-Employee
Director shall, automatically and without necessity of any action by the
Company, be entitled to receive an option to purchase 7,500 shares of Common
Stock. If on any annual grant date the number of options otherwise issuable to
the Non-Employee Directors exceeds the number of options then remaining
available under the Director Plan, each Non-Employee Director shall be entitled
to receive a number of options equal to (i) the number of options then remaining
available under the Director Plan, divided by (ii) the number of participating
Non-Employee Directors, disregarding any fractions of an option. The term of
each option will be ten years from the grant date, subject to earlier
termination as discussed below.
In general, optionees cannot sell or transfer any options granted under the
Director Plan other than by will or the laws of descent and distribution.
However, upon the death of an optionee, unexercised options may be exercised by
a beneficiary designated by the optionee in a manner specified by the Secretary.
The option price of an option will be 100% of the fair market value of a
share of Common Stock on the date the option is granted. As of April 15, 1994,
the fair market value of the Common Stock was $6.125 per share.
Each option will be fully vested, nonforfeitable and exercisable in one or
more installments commencing on the twelve-month anniversary of the grant date
of such option.
In the event of a termination of an optionee's directorship because of
death or disability, any option granted to such person under the Director Plan
(to the extent it was exercisable at the time of such termination) may be
exercised at any time within one year after such termination, provided that in
no event shall any option be exercised beyond the date which is the tenth
anniversary of the grant date of such option. In the event of a termination of
an optionee's directorship for a reason other than death or disability, any
option granted to such person under the Director Plan (to the extent it was
exercisable at the time of such termination) terminates on the date of such
termination of employment.
Payment of the option exercise price may, at the election of the optionee,
be in any one or any combination of: (i) cash, (ii) shares of Common Stock held
by the optionee for at least six months prior to exercise of the option, or
(iii) through the simultaneous sale through a broker of shares acquired upon
exercise of the option (as permitted under Regulation T of the Federal Reserve
Board).
Notwithstanding any provision of the Director Plan or any option agreement,
an optionee will not be entitled to exercise an option and the Company shall not
be obligated to deliver any stock to any optionee if such exercise or delivery
would constitute a violation by the optionee or the Company of any provision of
any applicable law or regulation.
Duration, Modification or Termination of the Director Plan
The Director Plan is scheduled to terminate on June 1, 2004, although the
Board of Directors can terminate it effective as of an earlier date. Termination
of the Director Plan will not affect stock options granted prior to such a
termination. The Board can amend or modify the Director Plan as it deems
advisable, without approval of the Company's stockholders, except as such
stockholder approval may be required under Rule 16b-3 under the Exchange Act or
under the listing requirements of any stock exchange or quotation system on
which are listed any of the Company's equity securities, provided that the
Director Plan may not be amended more than once every six months.
9
<PAGE> 13
Federal Income Tax Implications of the Director Plan
The Company believes that under present law the following are the federal
income tax consequences generally arising with respect to awards granted under
the Director Plan.
Optionee. Generally, an individual receiving a grant of a non-qualified
stock option does not realize any taxable income for federal income tax purposes
at the time of grant. Upon exercise of an option, the excess of the fair market
value of the Common Stock subject to the option on the date of exercise over the
option exercise price will be taxable to the optionee as ordinary income. The
optionee will have a capital gain (or loss) upon the subsequent sale of the
Common Stock in an amount equal to the sale price reduced by the fair market
value of the Common Stock on the date the option was exercised. The holding
period for purposes of determining whether the capital gain (or loss) is a long-
or short-term capital gain (or loss) will commence on the date the option is
exercised.
The Company. The Company is entitled to a tax deduction in the same amount
and in the same year in which the optionee recognizes ordinary income resulting
from the exercise of an option.
If the Optionee Uses Company Stock to Pay the Option Exercise Price. If the
optionee pays the option exercise price by tendering Common Stock of the Company
and receives back a larger number of shares, the optionee will realize taxable
income in an amount equal to the fair market value of the additional shares
received on the date of exercise, less any cash paid in addition to the shares
tendered. Upon a subsequent sale of the Common Stock, the number of shares equal
to the number delivered as payment of the option exercise price will have a tax
basis equal to that of the shares originally tendered. The additional
newly-acquired shares obtained upon exercise of the option will have a tax basis
equal to the fair market value of such shares on the date of exercise.
* * * *
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ADOPTION OF
THE DIRECTOR PLAN BY THE COMPANY'S STOCKHOLDERS.
PROPOSAL 3
APPROVAL OF RODMAN & RENSHAW CAPITAL GROUP, INC.
1994 STOCK OPTION PLAN
The Board of Directors has adopted the Rodman & Renshaw Capital Group, Inc.
1994 Stock Option Plan (the "Plan"), and directed that it be presented to the
Company's stockholders for their approval at this Annual Meeting. The purpose of
the Plan is to advance the interest of the Company by encouraging and enabling
the acquisition of a larger personal financial interest in the Company by those
employees upon whose judgment and efforts the Company is largely dependent for
the successful conduct of its operations. An additional purpose of the Plan is
to provide a means by which employees of the Company and its subsidiaries can
acquire and maintain stock ownership, thereby strengthening their commitment to
the success of the Company and their desire to remain employed by the Company
and its subsidiaries. It is anticipated that the acquisition of such financial
interest and stock ownership will stimulate the efforts of such employees on
behalf of the Company, strengthen their desire to continue in the service of the
Company and encourage shareholder and entrepreneurial perspectives by such
employees. It is also anticipated that the opportunity to obtain such financial
interest and stock ownership will prove attractive to promising new employees
and will assist the Company in attracting such employees.
The Board contemplates that the Plan will operate in addition to the other
compensation plans currently offered by the Company, and awards outstanding
under the existing plans will not be affected by the adoption of the Plan. The
following is a summary of the Plan and is qualified in its entirety by the full
text of the Plan attached to this Proxy Statement as Exhibit B.
10
<PAGE> 14
Scope of the Plan
Stock options granted under the Plan may be either incentive stock options
("ISOs"), which are intended to comply with Section 422 of the Internal Revenue
Code of 1986, as amended (the "Internal Revenue Code"), or non-qualified stock
options. The aggregate number of shares of Common Stock which may be purchased
pursuant to the exercise of options granted under the Plan is 1,000,000 shares.
If and to the extent an option expires or terminates for any reason without
having been exercised in full (including a cancellation of an old award in
connection with the grant of a substitute new award), or shall be forfeited,
without, in either case, the optionee having enjoyed any of the benefits of
stock ownership, the shares of stock associated with such option shall be
available for future option grants under the Plan.
The Plan provides that a committee of the Board of Directors (the
"Committee") shall make equitable adjustments of: (a) the aggregate number of
shares available under the Plan; (b) the number of shares subject to and the
option exercise price of outstanding options; and (c) the fair market value of
stock to be used to determine the amount of the benefit payable upon exercise;
to reflect a stock dividend, stock split, reverse stock split, share
combination, recapitalization, merger, consolidation, asset spin-off,
reorganization, or similar event, of or by the Company. Notwithstanding the
foregoing, upon the approval by the stockholders of the Company of a plan of
liquidation for the Company, any unexercised options shall become exercisable.
Administration of the Plan
The Plan is administered by the Committee. Subject to the terms of the
Plan, the Committee has full and final authority, in its discretion, to: (i)
grant options, (ii) determine when options may be granted, and whether or not
specific options shall be identified with other specific options, and if so
whether they shall be exercisable cumulatively with or alternatively to such
other specific options, (iii) interpret the Plan and make all determinations
necessary or advisable for the administration of the Plan, (iv) make, amend, and
rescind rules relating to the Plan, including rules with respect to the
exercisability and nonforfeitability of options upon the termination of
employment of an optionee, (v) determine the terms and provisions and any
restrictions or conditions (including specifying such performance criteria as
the Committee deems appropriate, and imposing restrictions with respect to stock
acquired upon exercise of an option, which restrictions may continue beyond the
optionee's termination of employment) of each option agreement and, with the
optionee's consent, to modify any such option agreement at any time, (vi) cancel
outstanding options and grant new options in substitution therefor, (vii)
accelerate the exercisability of, and to accelerate or waive any or all of the
restrictions and conditions applicable to, any option or group of options, for
any reason, (viii) extend the time during which any option or group of options
may be exercised (provided that no option may be exercised more than ten years
after its grant date), and (ix) impose such additional conditions, restrictions,
and limitations upon the grant, exercise or retention of options as the
Committee may, before or concurrently with the grant thereof, deem appropriate,
including requiring the simultaneous exercise of related options and limiting
the percentage of options which may from time to time be exercised by an
optionee.
The determination of the Committee on all matters relating to the Plan or
any option agreement shall be conclusive and final. Neither the Committee's nor
the Board's determinations under the Plan need be uniform and may be made by the
Committee or the Board selectively among persons who receive, or are eligible to
receive, options (whether or not such persons are similarly situated).
Notwithstanding the foregoing, the Committee's interpretation of Plan provisions
shall be uniform as to similarly situated optionees. The Plan provides that no
member of the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any option.
Eligible Participants in the Plan
Options may be granted under the Plan to full-time employees (including
officers) of the Company and its domestic subsidiaries at the discretion of the
Committee. As of March 31, 1994, approximately 424 employees were eligible to
participate in the Plan. In selecting the individuals to whom options are
granted, as well as in determining the number of shares subject to, and the
other terms and conditions applicable to, each option, the Committee takes into
consideration such factors as it deems relevant in promoting the purposes of
11
<PAGE> 15
the Plan. As of the date hereof, 100,000 options have been granted under the
Plan, subject to stockholder approval of the Plan, to Charles W. Daggs, III, the
current President and Chief Executive Officer and a director of the Company.
Options have not been granted to any other persons under the Plan as of the date
hereof. The identity of future optionees and the size of future grants is not
determinable at the present time.
Special Provisions Applicable to ISOs
At the time of the grant of any option, the Committee may designate that
such option shall be made subject to additional restrictions to permit it to
qualify as an ISO. Any option designated as an ISO: (i) with an option exercise
price less than 110% of the fair market value of the Common Stock on the grant
date shall not be granted to a person who owns or is deemed to own stock which
possesses 10% or more of the total combined voting power of all classes of
capital stock of the Company (a "10% Owner"), (ii) shall have a term of not more
than ten years from the grant date (five years if granted to a 10% Owner) and
shall be subject to earlier termination, (iii) shall not have an aggregate fair
market value (determined at its grant date) of stock with respect to which ISOs
are exercisable for the first time by such optionee during any calendar year
(under the Plan and any other employee stock option plan ("Other Plans")) which
exceeds $100,000 (the "$100,000 Limit"), (iv) shall, if the aggregate fair
market value of stock (determined on the grant date) with respect to all ISOs
previously granted under the Plan and any Other Plans and any ISOs under such
grant which are exercisable for the first time during any calendar year would
exceed the $100,000 Limit, be exercisable in accordance with the provisions of
the Plan, (v) shall be granted within ten years from the earlier of the date the
Plan is adopted or the date the Plan is approved by the stockholders of the
Company, and (vi) shall require the optionee to notify the Committee of any
disposition of any Stock issued pursuant to the exercise of the ISO under the
circumstances described in Section 421(b) of the Internal Revenue Code (relating
to certain disqualifying dispositions), within ten days of such disposition.
Notwithstanding the foregoing, the Committee may, without the consent of the
optionee, at any time before the exercise of an option (whether or not an ISO),
take any action necessary to prevent such option from being treated as an ISO.
Terms of Options Granted Under the Plan
In general, optionees cannot sell or transfer any options granted under the
Plan other than by will or the laws of descent and distribution. However, upon
the death of an optionee, unexercised options may be exercised by a beneficiary
designated by the optionee in a manner specified by the Committee. The Committee
may, in its discretion, impose restrictions upon the stock acquired upon the
exercise of an option. In addition, the Plan provides that if an optionee uses
shares of restricted stock of the Company to pay the option exercise price of an
option granted under the Plan, the shares of stock acquired upon such exercise
may be subject to certain restrictions. Optionees who are affiliates of the
Company should resell the shares so acquired only in accordance with any
restrictions imposed by applicable securities laws.
The Committee determines the exercise price of each option in its sole
discretion, except that the option exercise price cannot be less than 100% of
the fair market value of a share of Common Stock on the date the option is
granted. As of April 15, 1994, the market value of the Common Stock was $6.125
per share. No employee may receive an option which, in combination with all
other options to such optionee under the Plan (regardless of whether it has been
exercised or cancelled), aggregates more than 200,000 shares of Common Stock in
a one-year period.
Subject to such terms and conditions as the Committee may impose and
compliance with applicable laws, an option may be exercised in one or more
installments beginning not earlier than the first anniversary of the grant date
of such option. The Committee can, but is not required to, cause an option
granted under the Plan to become exercisable at an earlier date chosen by the
Committee in its sole discretion, except that an option granted to an officer or
director subject to potential liability under Section 16(b) of the Exchange Act
generally may not become exercisable during the first six months after its grant
date. The Committee can extend the period during which an option may be
exercised while the optionee is an employee of the Company, except that no
option granted under the Plan can be extended beyond the date which is the tenth
anniversary of the grant date of such option (fifth anniversary of the grant
date of such option, in the case of an ISO granted to a 10% Owner).
12
<PAGE> 16
In the event of a termination of an optionee's employment because of death
or disability, any option granted to such person under the Plan (to the extent
it was exercisable at the time of such termination) may be exercised at any time
within one year after such termination, provided that in no event shall any
option be exercised beyond the date which is the tenth anniversary of the grant
date of such option (fifth anniversary of the grant date of such option, in the
case of an ISO granted to a 10% Owner). In the event of a termination of an
optionee's employment for a reason other than death or disability, any option
granted to such person under the Plan (to the extent it was exercisable at the
time of such termination) terminates on the date of such termination of
employment. In the event of any termination of employment, the Committee, in its
discretion, may elect to extend the term of any option which would otherwise
expire on account of such termination of employment prior to the end of the
period (if any) following the termination of employment described above for
exercise of options, provided that in no event shall the term of any option be
extended beyond the date which is the tenth anniversary of the grant date of
such option (fifth anniversary of the grant date of such option, in the case of
an ISO granted to a 10% Owner).
Payment of the option exercise price may, at the election of the optionee,
be in any one or any combination of: (i) cash, (ii) shares of Common Stock held
by the optionee for at least six months prior to exercise of the option, (iii)
with the approval of the Committee, shares of restricted stock held by the
optionee for at least six months prior to exercise of the option, (iv) through
the simultaneous sale through a broker of shares acquired upon exercise of the
option (as permitted under Regulation T of the Federal Reserve Board), or (v)
with the approval of the Committee and to the extent permitted by law, the
Company may allow an optionee to defer all or part of the aggregate option
exercise price or may guarantee a loan covering all or part of the aggregate
option exercise price under certain circumstances. Any such payment deferral or
guarantee by the Company (which in certain circumstances may also be used to pay
tax obligations relating to an option exercise) shall be on such terms and
conditions as the Committee may determine, provided that the interest rate
applicable to any such payment deferral shall not be more favorable to the
optionee than the terms applicable to funds borrowed by the Company.
Notwithstanding the foregoing, an optionee will not be entitled to defer the
payment of the option exercise price or any related taxes unless the optionee:
(i) enters into a binding obligation to pay the deferred amount and (ii) except
with respect to treasury shares, pays upon exercise of an option a certain
minimum amount. If the Committee has permitted a payment deferral or caused the
Company to guarantee a loan, then the Committee may, in its discretion, require
the immediate payment of such deferred amount or the immediate release of such
guarantee upon the optionee's termination of employment or if the optionee sells
or otherwise transfers the shares of stock purchased pursuant to such deferral
or guarantee.
Whenever under the Plan, cash or shares of Common Stock are to be delivered
upon exercise of an option, the Company will be entitled to require as a
condition of delivery: (i) that the optionee remit an amount sufficient to
satisfy all federal, state, and local withholding tax requirements related
thereto, (ii) the withholding of such sums from compensation otherwise due to
the optionee or from any shares of Common Stock due to the optionee under the
Plan, or (iii) any combination of the foregoing.
If any disqualifying disposition is made with respect to shares of Common
Stock acquired under an ISO granted pursuant to the Plan, or any election under
Internal Revenue Code Section 83(b) is made, then the person making such
disqualifying disposition or election will be required to remit to the Company
an amount sufficient to satisfy all federal, state, and local withholding taxes
thereby incurred; provided that, in lieu of or in addition to the foregoing, the
Company will have the right to withhold such sums from compensation otherwise
due to the optionee or from any shares or Common Stock due to the optionee under
the Plan.
An optionee may, subject to certain conditions, elect the withholding
("Share Withholding") by the Company of a portion of the shares of Common Stock
otherwise deliverable to such optionee upon the exercise of an option (a
"Taxable Event") having a fair market value equal to:
(i) the minimum amount necessary to satisfy required federal, state,
or local withholding tax liability attributable to the Taxable Event; or
(ii) with the Committee's prior approval, a greater amount, not to
exceed the estimated total amount of such optionee's tax liability with
respect to the Taxable Event.
13
<PAGE> 17
Subject to the terms of the Plan discussed in this paragraph, the Committee
has full and final authority, in its discretion, to cancel outstanding options
and grant new options in substitution therefor. If the Committee cancels any
option (granted under the Plan or any plan of any entity acquired by the Company
or any of its subsidiaries), and a new option is substituted therefor, then the
Committee may, in its discretion, determine the terms and conditions of such new
option, provided that: (i) the option exercise price of any new option shall not
be less than 100% of the fair market value of a share of Common Stock on the
date of grant of the new option, (ii) no option may be cancelled without the
optionee's consent if the terms and conditions of the new option to be
substituted are not at least as favorable as the terms and conditions of the
option to be cancelled (and the grant date of the new option shall be the date
on which such new option is granted) and (iii) no optionee subject to Section 16
of the Exchange Act may exercise a substituted option within six months after
the grant date of such substituted option, unless the Company shall have
received an opinion of counsel for the Company or "no action" or interpretive
letter from the staff of the Securities and Exchange Commission to the effect
that such limitation is not necessary in order to avoid liability under Section
16(b) of the Exchange Act.
Notwithstanding any provision of the Plan or any option agreement, an
optionee will not be entitled to exercise an option and the Company shall not be
obligated to deliver any stock to any optionee if such exercise or delivery
would constitute a violation by the optionee or the Company of any provision of
any applicable law or regulation.
Duration, Modification or Termination of the Plan
The Plan is scheduled to terminate on June 1, 2004, although the Board of
Directors can terminate it effective as of an earlier date. Termination of the
Plan will not affect stock options granted prior to such a termination. The
Board can amend or modify the Plan as it deems advisable, without approval of
the Company's stockholders, except as such stockholder approval may be required
under Rule 16b-3 under the Exchange Act or under the listing requirements of any
stock exchange or quotation system on which are listed any of the Company's
equity securities.
Federal Income Tax Implications of the Plan
The Company believes that under present law the following are the federal
income tax consequences generally arising with respect to awards granted under
the Plan.
NON-QUALIFIED STOCK OPTIONS.
Optionee. Generally, an individual receiving a grant of a non-qualified
stock option does not realize any taxable income for federal income tax purposes
at the time of grant. Upon exercise of an option, the excess of the fair market
value of the Common Stock subject to the option on the date of exercise over the
option exercise price will be taxable to the optionee as ordinary income. The
optionee will have a capital gain (or loss) upon the subsequent sale of the
Common Stock in an amount equal to the sale price reduced by the fair market
value of the Common Stock on the date the option was exercised. The holding
period for purposes of determining whether the capital gain (or loss) is a long
or short-term capital gain (or loss) will commence on the date the option is
exercised.
The Company. The Company is entitled to a tax deduction in the same amount
and in the same year in which the optionee recognizes ordinary income resulting
from the exercise of an option.
Tax Withholding. The amount of income that is taxable to an optionee upon
the exercise of a non-qualified stock option will be treated as compensation
income. Accordingly, such amount will be subject to applicable withholding of
federal, state and local income taxes and Social Security taxes.
If the Optionee Uses Company Stock to Pay the Option Exercise Price. If the
optionee pays the option exercise price by tendering Common Stock of the Company
and receives back a larger number of shares, the optionee will realize taxable
income in an amount equal to the fair market value of the additional shares
received on the date of exercise, less any cash paid in addition to the shares
tendered. Upon a subsequent sale
14
<PAGE> 18
of the Common Stock, the number of shares equal to the number delivered as
payment of the option exercise price will have a tax basis equal to that of the
shares originally tendered. The additional newly-acquired shares obtained upon
exercise of the option will have a tax basis equal to the fair market value of
such shares on the date of exercise.
INCENTIVE STOCK OPTIONS.
Optionee. Generally, an optionee will not realize any taxable income for
federal income tax purposes at the time an ISO is granted. Upon exercise of the
ISO, the optionee will incur no income tax liability (other than pursuant to the
alternative minimum tax, if applicable). If the optionee transfers shares
received upon the exercise of an ISO within a period of two years from the date
of grant of such ISO or one year from the date of receipt of the shares of
Common Stock (the "Holding Period"), then, in general, the optionee will have
taxable ordinary income in the year in which the transfer occurs in an amount
equal to the excess of the fair market value on the date of option exercise over
the option exercise price, and will have long-term or short-term capital gain
(or loss) in an amount equal to the difference between the sale price of the
shares and the fair market value of the shares on the date of exercise. However,
if the sale price is less than the fair market value of the shares on the date
of option exercise, the ordinary income will be not more than the difference
between the sale price and the option exercise price. If the optionee transfers
the shares after the expiration of the Holding Period, he or she will recognize
income taxable at the capital gains tax rates at the difference between the sale
price and the option exercise price.
The Company. The Company is not entitled to a tax deduction upon grant,
exercise or subsequent transfer of shares of common stock acquired upon exercise
of an ISO, provided that the optionee holds the shares received upon the
exercise of such option for the Holding Period. If the optionee transfers the
stock acquired upon the exercise of an ISO prior to the end of the Holding
Period, the Company is entitled to a deduction at the time the optionee
recognizes ordinary income in an amount equal to the amount of ordinary income
recognized by such optionee as a result of such transfer.
Tax Withholding. If the optionee makes any disqualifying disposition
described in Section 421(b) of the Internal Revenue Code with respect to shares
of Common Stock acquired upon the exercise of an ISO granted under the Plan,
then such optionee must remit to the Company an amount sufficient to satisfy all
federal, state, and local withholding taxes thereby incurred.
If the Optionee Uses Common Stock to Pay the Option Exercise Price. If an
optionee pays the option exercise price by tendering shares of Common Stock,
such optionee will generally incur no income tax liability (other than pursuant
to the alternative minimum tax, if applicable), provided the Holding Period
requirement is met. If the tendered stock was subject to the Holding Period
requirement when tendered, payment of the option exercise price with such stock
constitutes a disqualifying disposition. If the optionee pays the option
exercise price by tendering Common Stock and the optionee receives back a larger
number of shares, under proposed Treasury Regulations, the optionee's basis in
the number of shares of newly acquired stock equal to the number of shares
delivered as payment of the option exercise price will be equal to that of the
shares originally tendered. The additional newly acquired shares obtained upon
exercise of the option will have a tax basis of zero. All stock acquired upon
exercise will be subject to the Holding Period requirement, including the number
of shares equal to the number tendered to pay the exercise price. Any
disqualifying disposition will be deemed to be a disposition of stock with the
lowest basis.
* * * *
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ADOPTION OF
THE PLAN BY THE COMPANY'S STOCKHOLDERS.
15
<PAGE> 19
PROPOSAL 4
APPROVAL OF PERFORMANCE GOAL
The Company has entered into an employment agreement (the "Employment
Agreement") with Charles W. Daggs, III, who was appointed Chief Executive
Officer of the Company effective April 11, 1994. The Company is seeking
stockholder approval of the provisions of the Employment Agreement setting forth
the Performance Goal pursuant to which Mr. Daggs may receive performance-based
compensation. These provisions have been recommended by the Compensation
Committee and approved by the Board of Directors.
Stockholder approval is necessary in order to exempt the performance-based
compensation from the operation of Section 162(m) of the Internal Revenue Code
and the proposed regulations thereunder. Section 162(m) generally limits to $1
million a public corporation's annual federal tax deduction for compensation
paid to certain top executive officers, including the chief executive officer.
Under the proposed regulations thereunder, however, qualified performance-based
compensation is not subject to the $1 million deduction limit if: (i) it is paid
solely on account of the attainment of one or more preestablished, objective
performance goals; (ii) the performance goal is established by a compensation
committee comprised solely of two or more outside directors; (iii) that
compensation committee certifies in writing and prior to payment that the
performance goals and any other material terms were, in fact, satisfied; and
(iv) the material terms of the performance goal are approved by the stockholders
of the corporation. Therefore, if the stockholders of the Company approve the
Performance Goal set forth in the Employment Agreement, the performance-based
compensation that Mr. Daggs receives under the Employment Agreement will not be
subject to the Section 162(m) limitation on the Company's deductions.
Under the Employment Agreement, Mr. Daggs will receive a one-time signing
bonus of $500,000 within 30 days of the day he began his duties as Chief
Executive Officer. Mr. Daggs will receive a base salary of $300,000 per year.
Further, if approved by the stockholders, Mr. Daggs will receive
performance-based compensation for each of the two twelve-month periods
commencing July 1, 1994 and July 1, 1995 based on a Performance Goal measured by
the Company's income before taxes ("IBT") for such periods. The Performance Goal
and the performance-based compensation that Mr. Daggs would receive are as
follows:
<TABLE>
<CAPTION>
IBT PERFORMANCE-BASED COMPENSATION
(Without Giving Effect to
Performance-Based Compensation)
<S> <C>
$0 - $5,000,000 5% of IBT
$5,000,000.01 - $10,000,000 $250,000 plus 7.5% of IBT exceeding
$5,000,000
$10,000,000.01 - $15,000,000 $625,000 plus 10% of IBT exceeding
$10,000,000
More than $15,000,000 $1,125,000 plus percentage of IBT
exceeding $15,000,000 to be
determined by the Board of Directors
of the Company but not to exceed 5%.
</TABLE>
Notwithstanding the foregoing, the performance-based compensation for each of
the two twelve-month periods will be no less than $600,000. Mr. Daggs will
receive no portion of the performance-based compensation for a period unless he
is employed by the Company at the end of the period.
Pursuant to the terms of the Employment Agreement, the Company also has
agreed to grant to Mr. Daggs under the Plan, subject to approval of the Plan by
the stockholders, options to purchase 100,000 shares of Common Stock at a price
of $6.50, the fair market value of the Common Stock on his first day of
employment. 50% of such options will become exercisable on June 30, 1996, and
the remaining 50% will become exercisable on June 30, 1997, in each case
provided that Mr. Daggs is employed by the Company on such dates.
16
<PAGE> 20
The Employment Agreement will be in effect through June 30, 1996, subject
to extension by mutual agreement and subject to earlier termination by the
Company for cause or upon Mr. Daggs' death or disability.
* * * *
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
PERFORMANCE GOAL BY THE COMPANY'S STOCKHOLDERS.
PROPOSAL 5
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors desires to obtain from the stockholders an
indication of their approval or disapproval of the Board's action in appointing
Deloitte & Touche as independent auditors for the Company and its subsidiaries
for the June 24, 1994 fiscal year. Deloitte & Touche has been serving the
Company and its subsidiaries for several years, including the 1993 fiscal year.
Representatives of Deloitte & Touche are expected to be present at the
Annual Meeting of Stockholders, and they will be available to respond to
appropriate questions. These representatives will be given the opportunity to
make a statement if they so desire.
* * * *
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE BY THE COMPANY'S
STOCKHOLDERS FOR RATIFICATION OF DELOITTE & TOUCHE AS INDEPENDENT AUDITORS.
CURRENT EXECUTIVE OFFICERS
The following table sets forth information concerning the age and current
positions with the Company for all current executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE OFFICE & TITLE
- - ------------------------------------------ --- ------------------------------------------
<S> <C> <C>
Charles W. Daggs, III..................... 46 President, Chief Executive Officer and
Director
John T. Hague............................. 39 Executive Vice President and Director of
Internal Audit
Lawrence R. Helfand....................... 58 Executive Vice President and Director
Scott H. Lang............................. 47 Executive Vice President and Director
Peter J. Schild........................... 46 Chief Financial Officer, Executive Vice
President and Director
David H. Shulman.......................... 32 Managing Director, Rodman Fixed Income
Group
Frederick G. Uhlmann...................... 64 Executive Vice President and Director
James D. Van De Graaff.................... 34 Executive Vice President, General Counsel
and Secretary
</TABLE>
Information is furnished below concerning the business experience of the
executive officers, including the period of service as executive officers.
CHARLES W. DAGGS, III became Chief Executive Officer of the Company on
April 11, 1994. From 1991 until that date, he was a Senior Managing Director of
Bear Stearns & Co. Incorporated, a financial services firm. From 1986 to 1990,
he was Chairman, President and Chief Executive Officer of Sutro & Co.
Incorporated, a financial services firm.
17
<PAGE> 21
JOHN T. HAGUE became Executive Vice President and Director of Internal
Audit of the Company on April 11, 1994. Prior to joining the Company, Mr. Hague
was a Senior Manager with Deloitte & Touche beginning in 1990 and a partner with
Spicer & Oppenheim from 1988 to 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.
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.
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.
DAVID H. SHULMAN has served as Managing Director of Rodman's Fixed Income
Group since February 14, 1994. From 1990 until that date, he was Rodman's First
Vice President and the Sales Manager for New York Taxable Fixed Income. Prior
thereto, he was a Vice President of Institutional Sales with Salomon Brothers,
an investment banking firm.
FREDERICK G. UHLMANN 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 in 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.
JAMES D. VAN DE GRAAFF has served as Executive Vice President, General
Counsel and Secretary of the Company since March 14, 1994. He was an Associate
with Baker & McKenzie, attorneys at law, from 1987 to 1994.
All officers of the Company serve at the discretion of the Board of
Directors. Certain of the Company's executive officers 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.
18
<PAGE> 22
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation for
each of the Company'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. None
of the listed persons is currently an executive officer of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ------------
FISCAL YEAR ------------------------------------- SECURITIES
NAME AND ENDED OTHER ANNUAL UNDERLYING 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 of 1992 75,000 72,000 294,769 -0-
Directors and Chief 1991 75,000 -0- 338,556 20,000
Executive Officer
Victor C. Chigas(5)........ 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 43,000
Mark J. Grant(6)........... 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(7) 275,000 40,083 166 12,000 17,546
President and Chief 1992 258,333 98,000 162 50,000
Operating Officer 1991 87,179 -0- -0- -0-
Kenneth M. Karmin(8)....... 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. On
January 10, 1994, Mr. Karmin resigned as Chairman of the Board and Mr.
Mains was terminated as an officer of the Company. On January 23, 1994, Mr.
Karmin resigned as an employee of the Company.
(2) Bonuses were based on profitability of the specific department or area, or
multiple departments or areas, over which the executive had 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, $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, $64,000 in
relocation and living expenses arising from his assignment in London.
In accordance with the transitional provisions of the rules on executive
officer compensation adopted by the Securities and Exchange Commission,
"All Other Compensation" information is excluded for the Company's 1992 and
1991 fiscal years.
(5) On January 10, 1994, Mr. Chigas was terminated as an officer of the Company.
(6) On January 10, 1994, Mr. Grant was terminated as an officer of the Company.
(7) Mr. Mains joined the Company on February 25, 1991.
(8) Kenneth Karmin resigned as an officer of the Company on August 20, 1993.
19
<PAGE> 23
The following table presents information as to stock option awards to each
of the named executive officers during the fiscal year ended June 25, 1993. No
stock appreciation rights were granted. None of the listed persons is currently
an executive officer of the Company.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
- - -------------------------------------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF
SECURITIES % OF TOTAL STOCK PRICE
UNDERLYING OPTIONS APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OPTION TERM(1)
GRANTED EMPLOYEES IN PRICE EXPIRATION --------------------
NAME (#)(2) FISCAL YEAR ($/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 have been
earned if the Common Stock appreciates at the annual rates indicated from
the date of grant and if the options were 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.
The following table provides information as to the value of the options
held by each named 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 terminated each of the named executive officers, therefore any
unexercised options outstanding on the date of termination were cancelled. The
Company has not granted stock appreciation rights.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING 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................. -- -- 20,000/7,500 $3,750/$5,625
- - -------------------------
</TABLE>
(1) Based on a closing stock price of $5.75 per share on June 25, 1993. The
closing price on April 15, 1994 was $6.125.
20
<PAGE> 24
REMUNERATION OF DIRECTORS
Directors who are not otherwise employed by Parent, Abaco, the Company or a
subsidiary of the Company are entitled to receive:
- $2,500 for each meeting of the Board of Directors attended in person;
- $500 for each meeting of the Board of Directors attended by telephone;
- $2,500 for each meeting of a committee of the Board of Directors attended
in person (unless such meeting is on the same day as a meeting of the
Board of Directors); and
- $500 for each meeting of a committee of the Board of Directors attended
by telephone;
provided that such directors receive a minimum remuneration of $25,000 per
fiscal year. Directors who are otherwise employed by Parent, Abaco, 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, 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, who was its President and Chief Operating
Officer and a director at that time (the "Mains Agreement"). On January 10,
1994, Mr. Mains was terminated as an officer of the Company and as a result was
ineligible to serve on its Board of Directors. The following, which is a
description of the Mains Agreement, does not constitute an admission by the
Company as to the enforceability of the Mains Agreement or the Company's
obligation to pay Mr. Mains pursuant to its terms. The Company has thus far paid
Mr. Mains certain sums while reserving all of its rights and defenses.
The Mains Agreement provided that following a Change of Control, as defined
therein (which has occurred; see "Change of Control") the Company would employ
Mr. Mains until June 30, 1995 (the "Employment Period"), and he agreed to
continue his employment with the Company until at least one year after the
Change of Control. During the Employment Period, the Company could terminate him
for "Cause," which included 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 could terminate his employment during the Employment Period
for "Good Reason," which included 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. If Mr. Mains' employment were terminated
without Cause or he were to terminate employment for Good Reason, then he would
be entitled to receive his base salary, bonus and benefits described below as if
he had remained employed throughout the Employment Period (at the times he would
have been entitled to receive such amounts). Subject to the aforementioned
reservation of rights and defenses, the Company has paid Mr. Mains compensation
pursuant to the Agreement as specified for a termination without cause.
The Mains Agreement provides that Mr. Mains would be paid an annual base
salary until June 30, 1995 ("during the Employment Period") in an amount at
least equal to twelve times his highest monthly base salary during the
twelve-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 Mains Agreement) of the Company.
21
<PAGE> 25
The Company also entered into Change of Control Employment Agreements with
other officers of the Company.
EMPLOYMENT AGREEMENTS
On February 14, 1994, Rodman entered into an employment agreement with
David H. Shulman, previously a First Vice President of Rodman, pursuant to which
Mr. Shulman assumed the position of Managing Director of the Fixed Income Group
of Rodman. Under the agreement, Mr. Shulman will receive fixed compensation of
$1,300,000 per year, plus additional compensation equal to 15% of the net pretax
profits of the Fixed Income Group. The agreement is for a term of three years
commencing February 14, 1994, although Rodman may terminate it for cause or upon
Mr. Shulman's death or disability. In the event that Rodman terminates Mr.
Shulman without cause, Mr. Shulman will be entitled to receive the fixed
compensation plus all other employee benefits for the remainder of the term of
the agreement.
The terms of the Employment Agreement with Mr. Daggs are set forth above
under "Proposal 4 -- Approval of Performance Goal."
STOCKHOLDER RETURN PERFORMANCE GRAPH
[PASTE UP CRC]
The peer issuers included in the Peer Group Index are The Advest Group,
Alex. Brown & Sons, Bear Stearns, A.G. Edwards, Inter-Regional Financial Group,
Legg Mason, Merrill Lynch & Co., Morgan Stanley Group, PaineWebber Group, The
Quick & Reilly Group, Raymond James Financial, Salomon Inc. and Charles Schwab.
22
<PAGE> 26
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Policy
Following the recent Change of Control (see page 4) the Company intends to
review its executive compensation policies and will revise these policies as it
deems necessary to serve the best interests of the Company. The Company recently
entered into an employment agreement with its new chief executive officer, as
discussed above under "Proposal 4 -- Approval of Performance Goal." Further,
Rodman recently entered into an employment agreement with the new Managing
Director of its Fixed Income Group, discussed above under "Executive
Compensation -- Employment Agreements." The following is a description of what
the present Compensation Committee perceives to have been past management's
policies for the 1993 fiscal year.
Base Salaries, Bonuses and Stock Options
The Compensation Committee of the Board of Directors reviewed
recommendations of senior management with respect to executive officer base
salaries (in the case of those executive officers who received them) and the
recommendations of the Stock Option Committee of the Board of Directors with
respect to stock option grants to executive officers. The Compensation Committee
then reported to the Board its recommendations with respect to such base
salaries and options, after making any revisions that it deemed appropriate. The
recommendations appear to have been subjective in nature and the procedures
informal.
In the case of bonus compensation of certain executive officers, who
received bonuses based on a percentage of the profitability of their respective
departments or of the Company as a whole, the Compensation Committee early in
the fiscal year reviewed the bonus formulas previously in effect and recommended
any revisions it deemed appropriate to the Board for its approval. At the end of
the fiscal year, the Compensation Committee reviewed the amounts of bonuses
produced by the respective formulas, as well as senior management's
recommendations for allocation of discretionary bonuses from a discretionary
bonus pool reserve that had been accumulated on a monthly basis in amounts
determined by senior management in light of the Company's profitability. After
making any revisions it deemed appropriate in the formula and discretionary
bonuses, the Compensation Committee made bonus recommendations for executive
officers to the Board of Directors, for its approval.
Stock options granted to executive officers in March, 1993, were granted
with respect to the fiscal year ended June 25, 1992. No options were granted to
executive officers with respect to the fiscal year ended June 25, 1993.
Commission Compensation
A substantial portion of the compensation of each of the executive officers
who were registered representatives was a percentage of the brokerage
commissions generated by such executive officer. The percentage was determined
by a grid, based on the investment products sold and the total sales volume of
the individual registered representatives during the fiscal year, and was
unaffected by the registered representative's status as an executive officer.
During the fiscal year ended June 25, 1993, there were no modifications in the
grid affecting compensation of any executive officer.
Chief Executive Officer
The base salary and bonus formula for Mr. Kurt B. Karmin, the Company's
chief executive officer during the fiscal year ended June 25, 1993, were
continued without change from the prior fiscal year. Mr. Karmin's bonus of
approximately $40,000 for the fiscal year ended June 25, 1993, was determined in
accordance with his bonus formula. Mr. Karmin's incentive stock option grant of
15,000 shares in March, 1993, was issued with respect to the fiscal year ended
June 30, 1992; he received no option grant with respect to the fiscal year ended
June 25, 1993.
23
<PAGE> 27
Membership of the Committee
Membership of the Compensation Committee during the period of its
involvement in executive officer compensation for the fiscal year ended June 25,
1993 was as follows: Victor C. Chigas, Sr. (Chairman), Vaughan R. Blake
(commencing July, 1993), Frederick C. Uhlmann (until June, 1993), Norman E.
Mains (until November, 1992), Michael J. Stoken (until April, 1993, when he
resigned from the Company and the Board) and Mark G. Grant (until July, 1993).
Membership of the Stock Option Committee during this period consisted of Gregory
P. Quinlivan, Larry Helfand, Kenneth M. Karmin, and Francis L. Kirby (until May,
1993, when he resigned from the Company and the Board).
Due to the substantial changes in management of the Company during the
recent period, and the perceived informality of past committee procedures, the
present Compensation Committee can only present its understanding of past policy
without first-hand knowledge thereof.
Policy with Regard to Deductibility of Executive Compensation
As discussed above under "Proposal 4 -- Approval of Performance Goal,"
Internal Revenue Code Section 162(m) and the proposed regulations thereunder
generally limit a public corporation's annual federal tax deduction for
compensation (including stock-based compensation such as options) paid to
certain top executive officers to $1,000,000. If the stockholders approve the
Plans and the Performance Goal, options granted under the Plans and the
performance-based compensation paid to Mr. Daggs if the Company meets the
Performance Goal will not be subject to the Section 162(m) limit. The Company is
in the process of evaluating how the Company's other compensation programs may
be affected if the proposed regulations are ultimately adopted.
BOARD OF DIRECTORS
ALEXANDER C. ANDERSON
PAUL C. BLACKMAN
EDUARDO CAMARENA LEGASPI
CHARLES W. DAGGS, III
JORGE ANTONIO GARCIA GARZA
LAWRENCE R. HELFAND
SCOTT H. LANG
JORGE LANKENAU ROCHA
THOMAS E. MEADE
MAURICIO MORALES SADA
RICHARD PIGOTT
DAVID S. RUDER
PETER J. SCHILD
JOSEPH P. SHANAHAN
FREDERICK G. UHLMANN
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Victor C. Chigas, Mr. Norman E. Mains, Mr. Frederick C. Uhlmann, Mr.
Michael J. Stoken and Mr. Mark G. Grant, who served during the fiscal year ended
June 25, 1993 (or a portion of such year) as members of the Compensation
Committee, were each, during the fiscal year (or a portion of such year),
executive officers of the Company. Mr. Gregory P. Quinlivan, Mr. Lawrence R.
Helfand, Mr. Kenneth M. Karmin and Mr. Francis L. Kirby, who served during the
fiscal year ended June 25, 1993 (or a portion of such year) as members of the
Stock Option Committee, were each, during the fiscal year (or a portion of such
year) executive officers of the Company.
Mr. Vaughan R. Blake, a director of the Company during the fiscal year
ended June 25, 1993, who served as a member of the Company's Compensation
Committee, was during that time a managing director for
24
<PAGE> 28
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 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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January, 1994, prior to his appointment as a Director of the Company,
Thomas E. Meade entered into an arrangement with the Company pursuant to which
the Company paid Mr. Meade a fee of $225,000 for his assistance to the Company
in its search for a new chief executive officer.
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. Certain 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" and
"Change of Control."
STOCK OWNERSHIP AND TRADING REPORTS
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and persons who own more than 10% of the Common Stock to file
initial stock ownership reports and reports of changes in ownership with the
Securities and Exchange Commission and the New York Stock Exchange. The Company
must also be furnished with a copy of these reports.
Following the recent Change of Control, the Company reviewed the Section 16
filings of those persons who were executive officers and/or directors of the
Company during its 1993 fiscal year. Based on its review of these reports, the
Company has found that several such persons erroneously reported the receipt of
certain options to purchase Common Stock only as the options vested rather than
at the time of grant, as required under Section 16. Because of this
misunderstanding of the Section 16 reporting rules, the following persons each
failed to file a Section 16 report with respect to one option grant and filed
two late reports with respect to two other option grants, which reports listed
only options vested rather than all options granted: Victor C. Chigas, Mark J.
Grant, Lawrence J. Helfand, Kurt B. Karmin, Ira J. Kaufman, Francis L. Kirby,
Scott H. Lang, Gerald B. Rivlin and Frederick G. Uhlmann. The following persons
each filed two late reports with respect to two option grants, which reports
listed only options vested rather than all options granted: Robert D. Glick,
Kenneth M. Karmin and Gerald B. Mullin. The following persons failed to file a
report with respect to one option grant and filed a late report with respect to
a second option grant, which report listed only options vested rather than all
options granted: Norman E. Mains, Eugene Miller, Gregory P. Quinlivan and
Michael J. Stoken. David J. Kenneth failed to file a report with respect to one
option grant and filed three late reports with respect to three option grants,
which reports listed only options vested rather than all options granted. Peter
J. Schild filed one late report which listed only options vested rather than all
options granted.
In addition to the foregoing erroneous reporting, during the June 24, 1994
fiscal year to date, Mr. Uhlmann failed to file three reports with respect to
seven transactions and Messrs. Hague, Meade, Pigott and Shulman each filed a
late Form 3 Initial Statement of Beneficial Ownership of Securities. Also during
the June 24, 1994 fiscal year, Abaco entered into mutually binding agreements
with Messrs. Chigas, Grant, Helfand, Karmin, Lang, Mains, Quinlivan and Uhlmann
to purchase on January 10, 1995, shares that each of such persons obtained upon
the exercise of stock options following the Change of Control. To the extent
that Abaco was required to report such agreements on a Form 4, the Form 4 was
filed late. Further, to date none of
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such persons has filed a Form 4 with the Company reporting the exercise or the
transaction with Abaco other than Mr. Helfand, who filed a timely report of his
exercise of the options.
STOCKHOLDER PROPOSALS
The Board of Directors of the Company has determined as a cost saving
measure to change the Company's fiscal year to a calendar year. Therefore, it
anticipates that it will hold its next Annual Meeting of Stockholders in May,
1995. Any stockholder who wishes to submit a proposal for inclusion in the proxy
material to be distributed by the Company in connection with its annual meeting
in 1995 must do so no later than December 26, 1994.
OTHER MATTERS
As of the date of this Proxy Statement, the Company has no knowledge of any
business other than the matters described above that will be presented at the
Annual Meeting on June 1, 1994. If any other business should come before the
Annual Meeting, it is intended that the persons named in the enclosed proxy will
have discretionary authority to vote the shares that they represent.
* * * *
The By-Laws of the Company require that a stockholder intending to nominate
any person for election as a Director of the Company must deliver written notice
thereof to the Secretary of the Company not less than 90 days prior to the
anniversary date of the immediately preceding annual meeting of stockholders.
The notice must set forth certain information concerning such stockholder and
his nominee(s), including their names and addresses, a representation that the
stockholder is entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons specified in the
notice, a description of all arrangements or understandings between the
stockholder and each nominee, such other information as would be required to be
included in a proxy statement soliciting proxies for the election of the
nominees of such stockholder and the consent of each nominee to serve as a
director of the Company if so elected. The chairman of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.
The Annual Report to Stockholders for the fiscal year ended June 25, 1993
was previously mailed to the stockholders and is not a part of the proxy
solicitation material.
By order of the Board of Directors
James D. Van De Graaff
Secretary
Rodman & Renshaw Capital Group, Inc.
120 South LaSalle Street
Chicago, Illinois 60603
April 25, 1994
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<PAGE> 30
EXHIBIT A
THE PLAN. The Rodman & Renshaw Capital Group, Inc. (the "Company")
Non-Employee Director Stock Option Plan (the "Plan") is adopted as of April 11,
1994.
1. PURPOSE. The Plan is intended to assist in attracting, retaining and
motivating Non-Employee Directors of outstanding ability and to promote
identification of their interests with those of the stockholders of the Company.
2. DEFINITIONS.
As used in the Plan, terms defined parenthetically immediately after their
use shall have the respective meanings provided by such definitions and the
terms set forth below shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
(a) "Award" means options granted under the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Committee" means the Stock Option Plan Committee of the Board.
(d) "Company" has the meaning set forth in the introductory paragraph.
(e) "Disability" means a mental or physical condition which renders a
Grantee unable or incompetent to carry out the job responsibilities which such
Grantee held or the tasks to which such Grantee was assigned at the time the
disability was incurred, and which is expected to be permanent or for an
indefinite duration exceeding one year.
(f) "Effective Date" means June 1, 1994.
(g) "Fair Market Value" of any security of the Company means, as of any
applicable date the closing price, regular way, of the security as reported on
the New York Stock Exchange Composite Tape, or if no such reported sale of the
security shall have occurred on such date, on the next preceding date on which
there was such a reported sale.
(h) "Grant Date" means the date on which an Award shall be duly granted, as
determined in accordance with Section 6(a)(i).
(i) "Grantee" means an individual who has been granted an Award.
(j) "including" or "includes" means "including, without limitation," or
"includes, without limitation."
(k) "1934 Act" means the Securities Exchange Act of 1934, as amended.
References to a particular section of, or rule under, the 1934 Act shall include
references to successor provisions.
(l) "Non-Employee Director" means any duly elected member of the Board who
is not an employee of Parent, the Company or any subsidiary of the Company.
(m) "Option Price" means the per share purchase price of Stock subject to
an option.
(n) "Parent" means any entity owning 51% or more of the outstanding voting
stock of the Company and any other entity controlling, controlled by or under
common control with such entity.
(o) "Plan" has the meaning set forth in the introductory paragraph.
(p) "SEC" means the Securities and Exchange Commission.
(q) "Secretary" means the duly appointed Secretary of the Company.
(r) "Stock" means the common stock of the Company, par value $.09.
3. SCOPE OF THE PLAN.
(a) The aggregate number of shares of Stock which may be purchased pursuant
to options granted under this Plan shall be 400,000 shares of Stock as of the
Effective Date which is hereby made available and is
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reserved for delivery on account of the exercise of Awards and payment of
benefits in connection with Awards. Such shares may be treasury shares or newly
issued shares, as may be determined from time to time by the Board.
(b) If and to the extent an Award shall expire or terminate for any reason
without having been exercised in full or shall be forfeited, without, in either
case, the Grantee having enjoyed any of the benefits of stock ownership, the
shares of Stock associated with such Award shall become available for other
Awards.
4. ADMINISTRATION.
The Plan shall be administered by the Secretary who shall have the
authority to construe and interpret the Plan, and to establish or adopt rules,
regulations and forms relating to the administration of the Plan. The Secretary
shall have no authority to add to, delete from or modify the terms of the Plan,
as the Plan shall be nondiscretionary as to the eligibility of participants and
the timing and amounts of the grants. Neither the Secretary nor any member of
the Board shall be liable for any act or determination made in good faith.
5. ELIGIBILITY. Subject to Sections 10 and 16, Director Shares shall be
granted to all Non-Employee Directors.
6. TERMS OF GRANTS.
(a) GENERAL TERMS.
(i) On July 1 (or if not a business day, the next business day) of
each year during the term of the Plan, each person who is then a
Non-Employee Director shall, automatically and without necessity of any
action by the Company, be entitled to receive an option to purchase 7,500
shares of Stock. If on any annual Grant Date the number of options
otherwise issuable to the Non-Employee Directors shall exceed the number of
options then remaining available under the Plan, each Non-Employee Director
shall be entitled to receive a number of options equal to (i) the number of
options then remaining available under the Plan, divided by (ii) the number
of participating Non-Employee Directors, disregarding any fractions of an
option.
(ii) The term of each Award shall be 10 years from the Grant Date, and
shall be subject to earlier termination as herein provided.
(b) OPTION PRICE. The Option Price of an option shall be 100% of the per
share Fair Market Value of the Stock on the Grant Date. Such price shall be
subject to adjustment as provided in Section 13.
(c) NON-QUALIFIED STOCK OPTIONS. Any option granted under this Plan shall
be a non-qualified stock option and shall not constitute an "incentive stock
option" under Section 422 of the Internal Revenue Code of 1986, as amended.
(d) OPTION AGREEMENT. No person shall have any rights under any option
granted under the Plan unless and until the Company and the person to whom such
option shall have been granted shall have executed and delivered an agreement
expressly granting the option to such person and containing provisions setting
forth the terms for the option.
7. NON-TRANSFERABILITY. Each Award granted hereunder shall not be
assignable or transferable other than by will or the laws of descent and
distribution; provided, however, that a Grantee may in a manner specified by the
Secretary designate in writing a beneficiary to exercise his Award after the
Grantee's death.
8. EXERCISE. Each option shall be fully vested, nonforfeitable and
exercisable in one or more installments commencing on the twelve-month
anniversary of the Grant Date of such option.
Each option shall be exercised by delivery to the Secretary of written
notice of intent to purchase a specific number of shares of Stock subject to the
option. The Option Price of any shares of Stock as to which
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an option shall be exercised shall be paid in full at the time of the exercise.
Payment may, at the election of the Grantee, be made in any one or any
combination of the following:
(i) cash;
(ii) Stock held by the Grantee for at least 6 months prior to exercise
of the option, valued at its Fair Market Value on the date of exercise; or
(iii) through simultaneous sale through a broker of shares acquired on
exercise, as permitted under Regulation T of the Federal Reserve Board.
9. TERMINATION OF DIRECTORSHIP.
(a) ON ACCOUNT OF DEATH. If a Grantee has a termination of directorship on
account of the Grantee's death, any unexercised option, which is exercisable on
the date of death may be exercised, in whole or in part, at any time within one
year after the Grantee's death, by (A) his personal representative or by the
person to whom the option is transferred by will or the applicable laws of
descent and distribution, or (B) the Grantee's beneficiary designated in
accordance with Section 7.
(b) ON ACCOUNT OF DISABILITY. If a Grantee has a termination of
directorship on account of Disability, any outstanding option which is then
exercisable may be exercised, in whole or in part, at any time within one year
after the Grantee's Disability.
(c) ANY OTHER REASON. If a Grantee has a termination of directorship for a
reason other than for death of the Grantee or the Grantee's Disability, any
option to the extent exercisable on the date of such termination of
directorship, shall terminate on the date of the Grantee's termination of
directorship.
(d) EXTENSION OF TERM. In the event of any termination of directorship, the
term of any Award which by its terms would otherwise expire on account of the
Grantee's termination of directorship but prior to the end of the period
following the Grantee's termination of directorship described in Sections (a),
(b), and (c) above for exercise of Awards shall not be extended beyond the date
which is the 10th anniversary of the Grant Date of such Award.
10. SECURITIES LAW MATTERS.
(a) If the Company deems necessary to comply with the Securities Act of
1933, the Company may require a written investment intent representation by the
Grantee and may require that a restrictive legend be affixed to certificates for
shares of Stock.
(b) If, based upon the opinion of counsel for the Company, the Company
determines that the exercise or nonforfeitability of, or delivery of benefits
pursuant to, any Award would violate any applicable provision of (i) federal or
state securities laws or (ii) the listing requirements of any national
securities exchange on which are listed any of the Company's equity securities,
then the Company may postpone any such exercise, nonforfeitability or delivery,
as the case may be, but the Company shall use its best efforts to cause such
exercise, nonforfeitability or delivery to comply with all such provisions at
the earliest practicable date.
11. RIGHTS AS A STOCKHOLDER. A Grantee shall not by reason of any Award
have any right as a stockholder of the Company with respect to the shares of
Stock which may be deliverable upon exercise or payment of such Award until such
shares have been delivered to him.
12. ADJUSTMENTS. The aggregate number of shares of Stock available under
Section 3(a), the number of shares of Stock covered by an Award and the Option
Price shall be equitably adjusted to reflect a stock dividend, stock split,
reverse stock split, share combination, recapitalization, merger, consolidation,
acquisition of property or shares, separation, asset spin-off, reorganization,
stock rights offering, liquidation or similar event, of or by the Company.
Notwithstanding the foregoing, upon the approval by the stockholders of the
Company of a plan of liquidation for the Company, any unexercised options
theretofore granted, shall thereupon become exercisable.
13. AMENDMENT OF THE PLAN. The Board may from time to time in its
discretion amend or modify the Plan without the approval of the stockholders of
the Company, except as such stockholder approval may be
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required (a) to permit the grant of Awards under, and transactions in Stock
pursuant to, the Plan to be exempt from liability under Section 16(b) of the
1934 Act or (b) under the listing requirements of any national securities
exchange on which are listed any of the Company's equity securities; provided,
however, that (i) any amendment or termination of this Plan shall not affect
previously granted options and (ii) to the extent prohibited under Rule
16b-3(2)(ii)(B) under the 1934 Act (or any successor rule), the Plan may not be
amended more than once every six months.
14. TERMINATION OF THE PLAN. The Plan shall terminate on the tenth (10th)
anniversary of the Effective Date or at such earlier time as the Board may
determine. Any termination, whether in whole or in part, shall not affect any
Award then outstanding under the Plan.
15. NO ILLEGAL TRANSACTIONS. The Plan and all Awards granted pursuant to it
are subject to all laws and regulations of any governmental authority which may
be applicable thereto; and notwithstanding any provision of the Plan or any
Award, Grantees shall not be entitled to exercise Awards or receive the benefits
thereof and the Company shall not be obligated to deliver any Stock or pay any
benefits to a Grantee if such exercise, delivery, receipt or payment of benefits
would constitute a violation by the Grantee or the Company of any provision of
any such law or regulation.
16. CONTROLLING LAW. The law of the State of Illinois, except its law with
respect to choice of law, shall be controlling in all matters relating to the
Plan.
17. SEVERABILITY. If all or any part of the Plan is declared by any court
or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of the Plan not declared to
be unlawful or invalid. Any Section or part of a Section so declared to be
unlawful or invalid shall, if possible, be construed in a manner which will give
effect to the terms of such Section or part of a Section to the fullest extent
possible while remaining lawful and valid.
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EXHIBIT B
THE PLAN. The Rodman & Renshaw Capital Group, Inc. (the "Company") 1994
Stock Option Plan is adopted as of April 11, 1994.
1. PURPOSE. The purpose of the Plan is to advance the interest of the
Company by encouraging and enabling the acquisition of a larger personal
financial interest in the Company by those employees upon whose judgment and
efforts the Company is largely dependent for the successful conduct of its
operations. An additional purpose of the Plan is to provide a means by which
employees of the Company and its Subsidiaries can acquire and maintain Stock
ownership, thereby strengthening their commitment to the success of the Company
and their desire to remain employed by the Company and its Subsidiaries. It is
anticipated that the acquisition of such financial interest and Stock ownership
will stimulate the efforts of such employees on behalf of the Company,
strengthen their desire to continue in the service of the Company and encourage
shareholder and entrepreneurial perspectives through employee stock ownership.
It is also anticipated that the opportunity to obtain such financial interest
and Stock ownership will prove attractive to promising new employees and will
assist the Company in attracting such employees.
2. DEFINITIONS.
As used in the Plan, terms defined parenthetically immediately after their
use shall have the respective meanings provided by such definitions and the
terms set forth below shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
(a) "Award" means options granted under the Plan.
(b) "Award Agreement" has the meaning specified in Section 4(b)(v).
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" includes termination based on the commission of any act or acts
involving dishonesty, fraud, illegality or moral turpitude.
(e) "Code" means the Internal Revenue Code of 1986, as amended, and
regulations and rulings thereunder. References to a particular section of the
Code shall include references to successor provisions.
(f) "Committee" means the Compensation/Stock Plan Option Committee of the
Board appointed pursuant to Section 4.
(g) "Company" has the meaning set forth in the introductory paragraph.
(h) "Disability" means, as relates to the exercise of an incentive stock
option after termination of employment, a disability within the meaning of
Section 22(e)(3) of the Code, and for all other purposes, a mental or physical
condition which, in the opinion of the Committee, renders a Grantee unable or
incompetent to carry out the job responsibilities which such Grantee held or the
tasks to which such Grantee was assigned at the time the disability was
incurred, and which is expected to be permanent or for an indefinite duration
exceeding one year.
(i) "Effective Date" means June 1, 1994.
(j) "Fair Market Value" of any security of the Company means, as of any
applicable date the closing price, regular way, of the security as reported on
the New York Stock Exchange Composite Tape, or if no such reported sale of the
security shall have occurred on such date, on the next preceding date on which
there was such a reported sale.
(k) "Grant Date" means the date on which an Award shall be duly granted, as
determined in accordance with Section 6(a)(i).
(l) "Grantee" means an individual who has been granted an Award.
(m) "including" or "includes" means "including, without limitation," or
"includes, without limitation."
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(n) "Minimum Consideration" means $.09 per share with respect to authorized
but previously unissued stock, and zero with respect to treasury stock, or such
larger amount determined pursuant to resolution of the Board to be capital
within the meaning of Section 154 of the Delaware General Corporation Law.
(o) "1934 Act" means the Securities Exchange Act of 1934, as amended.
References to a particular section of, or rule under, the 1934 Act shall include
references to successor provisions.
(p) "Option Price" means the per share purchase price of Stock subject to
an option.
(q) "Plan" has the meaning set forth in the introductory paragraph.
(r) "SEC" means the Securities and Exchange Commission.
(s) "Section 16 Grantee" means a person subject to potential liability
under Section 16(b) of the 1934 Act with respect to transactions involving
equity securities of the Company.
(t) "Stock" means the common stock of the Company, par value $.09.
(u) "Subsidiary" means with respect to incentive stock options, a
corporation as defined in Section 424(f) of the Code with the Company being
treated as the employer corporation for purposes of this definition.
(v) "10% Owner" means a person who owns stock (including stock treated as
owned under Section 424(d) of the Code) possessing more than 10% of the total
combined voting power of all classes of stock of the Company.
3. SCOPE OF THE PLAN.
(a) The aggregate number of shares of Stock which may be purchased pursuant
to options granted under this Plan shall be 1,000,000 shares of Stock as of the
Effective Date which is hereby made available and is reserved for delivery on
account of the exercise of Awards and payment of benefits in connection with
Awards. Such shares may be treasury shares or newly issued shares, as may be
determined from time to time by the Board or the Committee.
(b) If and to the extent an Award shall expire or terminate for any reason
without having been exercised in full (including a cancellation and regrant of
an option pursuant to Section 15), or shall be forfeited, without, in either
case, the Grantee having enjoyed any of the benefits of stock ownership, the
shares of Stock associated with such Award shall become available for other
Awards.
4. ADMINISTRATION.
(a) The Plan shall be administered by a committee ("Committee") which shall
consist of not less than two persons (three persons prior to September 1, 1994)
who are directors of the Company. Membership on the Committee shall be subject
to such limitations as the Board deems appropriate to permit transactions in
Stock pursuant to the Plan to be exempt from liability under Section 16(b) of
the 1934 Act pursuant to Rule 16b-3 thereunder, and to permit compensation
earned by individuals pursuant to the Plan to be exempt from the limitation set
forth in Section 162(m) of the Code.
(b) The Committee shall have full and final authority, in its discretion,
but subject to the express provisions of the Plan, as follows:
(i) to grant Awards;
(ii) to determine (A) when Awards may be granted, and (B) whether or
not specific Awards shall be identified with other specific Awards, and if
so whether they shall be exercisable cumulatively with or alternatively to
such other specific Awards;
(iii) to interpret the Plan and to make all determinations necessary
or advisable for the administration of the Plan;
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(iv) to prescribe, amend, and rescind rules and regulations relating
to the Plan, including rules with respect to the exercisability and
nonforfeitability of Awards upon the termination of employment of a
Grantee;
(v) to determine the terms and provisions and any restrictions or
conditions (including specifying such performance criteria as the Committee
deems appropriate, and imposing restrictions with respect to stock acquired
upon exercise of an option, which restrictions may continue beyond the
Grantee's termination of employment) of the written agreements by which all
Awards shall be evidenced ("Award Agreements") which need not be identical
and, with the consent of the Grantee, to modify any such Award Agreement at
any time;
(vi) to cancel, subject to Section 15, outstanding Awards and to grant
new Awards in substitution therefor;
(vii) to accelerate the exercisability of, and to accelerate or waive
any or all of the restrictions and conditions applicable to, any Award, or
any group of Awards for any reason;
(viii) subject to Section 6(a)(ii), to extend the time during which
any Award or group of Awards may be exercised; and
(ix) to impose such additional conditions, restrictions, and
limitations upon the grant, exercise or retention of Awards as the
Committee may, before or concurrently with the grant thereof, deem
appropriate, including requiring simultaneous exercise of related
identified Awards, and limiting the percentage of Awards which may from
time to time be exercised by a Grantee.
The determination of the Committee on all matters relating to the Plan or any
Award Agreement shall be conclusive and final. No member of the Committee shall
be liable for any action or determination made in good faith with respect to the
Plan or any Award.
5. ELIGIBILITY. Awards may be granted to any full-time employee (including
any officer) of the Company or any of its domestic Subsidiaries. In selecting
the individuals to whom Awards may be granted, as well as in determining the
number of shares of Stock subject to, and the other terms and conditions
applicable to, each Award, the Committee shall take into consideration such
factors as it deems relevant in promoting the purposes of the Plan.
6. CONDITIONS TO GRANTS.
(a) GENERAL CONDITIONS.
(i) The Grant Date of an Award shall be the date on which the
Committee grants the Award or such later date as specified in advance by
the Committee.
(ii) The term of each Award (subject to Section 6(c) with respect to
incentive stock options) shall be a period of not more than 10 years from
the Grant Date, and shall be subject to earlier termination as herein
provided.
(iii) A Grantee may, if otherwise eligible, be granted additional
Awards in any combination.
(iv) No Grantee may receive an Award which, in combination with all
other Awards to such Grantee under the Plan (regardless of whether it has
been exercised or cancelled), aggregates more than 200,000 shares of Stock
in a one-year period.
(b) GRANT OF OPTIONS AND OPTION PRICE. No later than the Grant Date of any
option, the Committee shall determine the Option Price of such option. The
Option Price of an option shall not be less than 100% of the Fair Market Value
of the Stock on the Grant Date. Such price shall be subject to adjustment as
provided in Section 22. The Award Agreement may provide that the option shall be
exercisable for restricted stock.
(c) GRANT OF INCENTIVE STOCK OPTIONS. At the time of the grant of any
option, the Committee may designate that such option shall be made subject to
additional restrictions to permit it to qualify as an
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"incentive stock option" under the requirements of Section 422 of the Code. Any
option designated as an incentive stock option:
(i) shall not be granted to a 10% Owner at an Option Price less than
110% of the Fair Market Value of the Stock on the Grant Date;
(ii) shall be for a period of not more than 10 years from the Grant
Date, (5 years if granted to a 10% Owner) and shall be subject to earlier
termination as provided herein or in the applicable Award Agreement;
(iii) shall not have an aggregate Fair Market Value (determined for
each incentive stock option at its Grant Date) of Stock with respect to
which incentive stock options are exercisable for the first time by such
Grantee during any calendar year (under the Plan and any other employee
stock option plan of the Grantee's employer or any parent or Subsidiary
thereof ("Other Plans")), determined in accordance with the provisions of
Section 422 of the Code, which exceeds $100,000 (the "$100,000 Limit");
(iv) shall, if the aggregate Fair Market Value of Stock (determined on
the Grant Date) with respect to all incentive stock options previously
granted under the Plan and any Other Plans ("Prior Grants") and any
incentive stock options under such grant (the "Current Grant") which are
exercisable for the first time during any calendar year would exceed the
$100,000 Limit, be exercisable as follows:
(A) the portion of the Current Grant exercisable for the first time
by the Grantee during any calendar year which would, when added to any
portions of any Prior Grants, be exercisable for the first time by the
Grantee during such calendar year with respect to Stock which would have
an aggregate Fair Market Value (determined as of the respective Grant
Date for such options) in excess of the $100,000 Limit shall,
notwithstanding the terms of the Current Grant, be exercisable for the
first time by the Grantee in the first subsequent calendar year or years
in which it could be exercisable for the first time by the Grantee when
added to all Prior Grants without exceeding the $100,000 Limit; and
(B) if, viewed as of the date of the Current Grant, any portion of
a Current Grant could not be exercised under the provisions of the
immediately preceding sentence during any calendar year commencing with
the calendar year in which it is first exercisable through and including
the last calendar year in which it may by its terms be exercised, such
portion of the Current Grant shall not be an incentive stock option, but
shall be exercisable as a separate option at such date or dates as are
provided in the Current Grant;
(v) shall be granted within 10 years from the earlier of the date the
Plan is adopted or the date the Plan is approved by the stockholders of the
Company;
(vi) shall require the Grantee to notify the Committee of any
disposition of any Stock issued pursuant to the exercise of the incentive
stock option under the circumstances described in Section 421(b) of the
Code (relating to certain disqualifying dispositions), within 10 days of
such disposition; and
(vii) shall by its terms not be assignable or transferable other than
by will or the laws of descent and distribution and may be exercised,
during the Grantee's lifetime, only by the Grantee; provided, however, that
the Grantee may, to the extent provided in the Plan in any manner specified
by the Committee, designate in writing a beneficiary to exercise his
incentive stock option after the Grantee's death.
Notwithstanding the foregoing and Section 4(b)(v), the Committee may, without
the consent of the Grantee, at any time before the exercise of an option
(whether or not an incentive stock option), take any action necessary to prevent
such option from being treated as an incentive stock option.
7. GRANTEE'S AGREEMENT TO SERVE. Each Grantee who is granted an Award
shall, by executing such Grantee's Award Agreement, agree that such Grantee will
remain in the employ of the Company or any of its Subsidiaries for at least one
year after the Grant Date. No obligation of the Company or any of its
Subsidiaries as to the length of any Grantee's employment shall be implied by
the terms of the Plan, any grant of an Award
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hereunder or any Award Agreement. The Company and its Subsidiaries reserve the
same rights to terminate employment of any Grantee as existed before the
Effective Date.
8. NON-TRANSFERABILITY. Each Award granted hereunder shall not be
assignable or transferable other than by will or the laws of descent and
distribution; provided, however, that a Grantee may in a manner specified by the
Committee designate in writing a beneficiary to exercise his Award after the
Grantee's death.
9. EXERCISE.
(a) EXERCISE OF OPTIONS. Subject to such terms and conditions as the
Committee may impose, each option shall be exercisable in one or more
installments commencing not earlier than the first anniversary of the Grant Date
of such option.
Each option shall be exercised by delivery to the Company of written notice
of intent to purchase a specific number of shares of Stock subject to the
option. The Option Price of any shares of Stock or shares of restricted stock as
to which an option shall be exercised shall be paid in full at the time of the
exercise. Payment may, at the election of the Grantee, be made in any one or any
combination of the following:
(i) cash;
(ii) Stock held by the Grantee for at least 6 months prior to exercise
of the option, valued at its Fair Market Value on the date of exercise;
(iii) with the approval of the Committee, shares of restricted stock
held by the Grantee for at least 6 months prior to exercise of the option,
each valued at the Fair Market Value of a share of Stock on the date of
exercise; or
(iv) through simultaneous sale through a broker of shares acquired on
exercise, as permitted under Regulation T of the Federal Reserve Board.
In the discretion of the Committee and to the extent permitted by law, payment
may also be made in accordance with Section 10.
If restricted stock ("Tendered Restricted Stock") is used to pay the Option
Price for Stock subject to an option, then the Committee may, but need not,
specify that (i) all the shares of Stock acquired on exercise of the option
shall be subject to the same restrictions as the Tendered Restricted Stock,
determined as of the date of exercise of the option, or (ii) a number of shares
of Stock acquired on exercise of the option equal to the number of shares of
Tendered Restricted Stock shall, unless the Committee provides otherwise, be
subject to the same restrictions as the Tendered Restricted Stock, determined as
of the date of exercise of the option.
(b) SPECIAL RULES FOR SECTION 16 GRANTEES. No option shall be exercisable
by a Section 16 Grantee during the first six months after its Grant Date, except
as exempted from Section 16 of the 1934 Act under Rule 16a-2(d) under the 1934
Act.
10. LOANS AND GUARANTEES. The Committee may, in its discretion:
(a) allow a Grantee to defer payment to the Company of all or any
portion of (i) the Option Price of an option, or (ii) any taxes associated
with a benefit hereunder which is not a cash benefit at the time such
benefit is so taxable, or
(b) cause the Company to guarantee a loan from a third party to the
Grantee, in an amount equal to all or any portion of such Option Price,
purchase price, or any related taxes.
Any such payment deferral or guarantee by the Company pursuant to this Section
10 shall be on such terms and conditions as the Committee may determine;
provided that the interest rate applicable to any such payment deferral shall
not be more favorable to the Grantee than the terms applicable to funds borrowed
by the Company. Notwithstanding the foregoing, a Grantee shall not be entitled
to defer the payment of such Option Price, purchase price or any related taxes
unless the Grantee (i) enters into a binding obligation to pay the deferred
amount and (ii) except with respect to treasury shares, pays upon exercise of an
option an amount equal to or greater than the Minimum Consideration thereof. If
the Committee has permitted a
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payment deferral or caused the Company to guarantee a loan pursuant to this
Section 10, then the Committee may, in its discretion, require the immediate
payment of such deferred amount or the immediate release of such guarantee upon
the Grantee's termination of employment or if the Grantee sells or otherwise
transfers the Grantee's shares of Stock purchased pursuant to such deferral or
guarantee.
11. NOTIFICATION UNDER SECTION 83(B). The Committee may, on the Grant Date
or any later date, prohibit a Grantee from making the election described below.
If the Committee has not prohibited such Grantee from making such election, and
the Grantee shall, in connection with the exercise of any option, make the
election permitted under Section 83(b) of the Code (i.e., an election to include
in such Grantee's gross income in the year of exercise the amounts specified in
Section 83(b) of the Code), such Grantee shall notify the Company of such
election within 10 days of filing notice of the election with the Internal
Revenue Service, in addition to any filing and notification required pursuant to
regulations issued under the authority of Section 83(b) of the Code.
12. MANDATORY WITHHOLDING TAXES.
(a) Whenever under the Plan, cash or shares of Stock are to be delivered
upon exercise or payment of an Award or any other event with respect to rights
and benefits hereunder, the Company shall be entitled to require as a condition
of delivery (i) that the Grantee remit an amount sufficient to satisfy all
federal, state, and local withholding tax requirements related thereto, (ii) the
withholding of such sums from compensation otherwise due to the Grantee or from
any shares of Stock due to the Grantee under the Plan or (iii) any combination
of the foregoing.
(b) If any disqualifying disposition described in Section 6(c)(vi) is made
with respect to shares of Stock acquired under an incentive stock option granted
pursuant to the Plan or any election described in Section 11 is made, then the
person making such disqualifying disposition or election shall remit to the
Company an amount sufficient to satisfy all federal, state, and local
withholding taxes thereby incurred; provided that, in lieu of or in addition to
the foregoing, the Company shall have the right to withhold such sums from
compensation otherwise due to the Grantee or from any Award including any shares
of stock due to the Grantee under the Plan.
13. ELECTIVE SHARE WITHHOLDING.
(a) Subject to Section 13(b), a Grantee may elect the withholding ("Share
Withholding") by the Company of a portion of the shares of Stock otherwise
deliverable to such Grantee upon the exercise or payment of an Award (a "Taxable
Event") having a Fair Market Value equal to:
(i) the minimum amount necessary to satisfy required federal, state,
or local withholding tax liability attributable to the Taxable Event; or
(ii) with the Committee's prior approval, a greater amount, not to
exceed the estimated total amount of such Grantee's tax liability with
respect to the Taxable Event.
(b) Each Share Withholding election by a Grantee shall be subject to the
following restrictions:
(i) any Grantee's election shall be subject to the Committee's right
to revoke such election of Share Withholding by such Grantee at any time
before the Grantee's election if the Committee has reserved the right to do
so in the Award Agreement;
(ii) if the Grantee is a Section 16 Grantee, such Grantee's election
shall be subject to the disapproval of the Committee at any time, whether
or not the Committee has reserved the right to do so;
(iii) the Grantee's election must be made before the date (the "Tax
Date") on which the amount of tax to be withheld is determined;
(iv) the Grantee's election shall be irrevocable;
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<PAGE> 40
(v) a Section 16 Grantee may not elect Share Withholding within six
months after the grant of the related option (except if the Grantee dies or
incurs a Disability before the end of the six-month period); and
(vi) except to the extent such condition may be waived by the General
Counsel of the Company a Section 16 Grantee must elect Share Withholding
either six months before the Tax Date or during the ten business day period
beginning on the third business day after the release of the Company's
quarterly or annual summary statement of sales and earnings.
14. TERMINATION OF EMPLOYMENT.
(a) ON ACCOUNT OF DEATH. If a Grantee has a termination of employment on
account of the Grantee's death, any unexercised option, which is exercisable on
the date of such termination of employment may be exercised, in whole or in
part, at any time within one year after the Grantee's death, by (A) his personal
representative or by the person to whom the option is transferred by will or the
applicable laws of descent and distribution, or (B) the Grantee's beneficiary
designated in accordance with Sections 6(c)(vii) or 8; and
(b) ON ACCOUNT OF DISABILITY. If a Grantee has a termination of employment
on account of Disability, any outstanding option which is then exercisable may
be exercised, in whole or in part, at any time within one year after the
Grantee's Disability.
(c) ANY OTHER REASON. If a Grantee has a termination of employment for a
reason other than for death of the Grantee or the Grantee's Disability, any
option to the extent exercisable on the date of the Grantee's termination of
employment, shall terminate on the date of the Grantee's termination of
employment.
(d) EXTENSION OF TERM. In the event of any termination of employment, the
term of any Award which by its terms would otherwise expire on account of the
Grantee's termination of employment but prior to the end of the period following
the Grantee's termination of employment described in Sections (a), (b), and (c)
above for exercise of Awards shall not be extended beyond the date which is the
10th anniversary of the Grant Date of such Award (5th anniversary of the Grant
Date of such Award, in the case of an incentive stock option granted to a 10%
Owner).
15. SUBSTITUTED AWARDS. If the Committee cancels any Award (granted under
this Plan or any plan of any entity acquired by the Company or any of its
Subsidiaries), and a new Award is substituted therefor, then the Committee may,
in its discretion, determine the terms and conditions of such new Award;
provided that (a) the Option Price of any new option shall not be less than 100%
of the Fair Market Value of a share of Stock on the date of grant of the new
Award; (b) no Award shall be cancelled without the consent of the Grantee if the
terms and conditions of the new Award to be substituted are not at least as
favorable as the terms and conditions of the Award to be cancelled (and the
Grant Date of the new Award shall be the date on which such new Award is
granted); (c) no Section 16 Grantee may exercise a substituted option within six
months after the Grant Date (calculated without reference to this Section 15) of
such substituted option, unless the Company shall have received an opinion of
counsel for the Company or "no action" or interpretive letter from the staff of
the SEC to the effect that such limitation is not necessary in order to avoid
liability under Section 16(b) of the 1934 Act; and (d) except as otherwise
provided in (a)-(c) above, the terms of this Plan shall apply to such new Award.
16. SECURITIES LAW MATTERS.
(a) If the Committee deems necessary to comply with the Securities Act of
1933, the Committee may require a written investment intent representation by
the Grantee and may require that a restrictive legend be affixed to certificates
for shares of Stock.
(b) If, based upon the opinion of counsel for the Company, the Committee
determines that the exercise or nonforfeitability of, or delivery of benefits
pursuant to, any Award would violate any applicable provision of (i) federal or
state securities laws or (ii) the listing requirements of any national
securities exchange on which are listed any of the Company's equity securities,
then the Committee may postpone any such exercise, nonforfeitability or
delivery, as the case may be, but the Company shall use its best efforts to
cause such exercise, nonforfeitability or delivery to comply with all such
provisions at the earliest practicable date.
B-7
<PAGE> 41
17. FUNDING. Benefits payable under the Plan to any person shall be paid
directly by the Company. The Company shall not be required to fund, or otherwise
segregate assets to be used for payment of, benefits under the Plan.
18. NO EMPLOYMENT RIGHTS. Neither the establishment of the Plan, nor the
granting of any Award shall be construed to (a) give any Grantee the right to
remain employed by the Company or any of its Subsidiaries or to any benefits not
specifically provided by the Plan or (b) in any manner modify the right of the
Company or any of its Subsidiaries to modify, amend, or terminate any of its
employee benefit plans.
19. RIGHTS AS A STOCKHOLDER. A Grantee shall not, by reason of any Award
have any right as a stockholder of the Company with respect to the shares of
Stock which may be deliverable upon exercise or payment of such Award until such
shares have been delivered to him.
20. NATURE OF PAYMENTS. Any and all grants, payments of cash, or deliveries
of shares of Stock hereunder shall constitute special incentive payments to the
Grantee and shall not be taken into account in computing the amount of salary or
compensation of the Grantee for the purposes of determining any pension,
retirement, death or other benefits under (a) any pension, retirement,
profit-sharing, bonus, life insurance or other employee benefit plan of the
Company or any of its Subsidiaries or (b) any agreement between the Company or
any Subsidiary, on the one hand, and the Grantee, on the other hand, except as
such plan or agreement shall otherwise expressly provide.
21. NON-UNIFORM DETERMINATIONS. Neither the Committee's nor the Board's
determinations under the Plan need be uniform and may be made by the Committee
or the Board selectively among persons who receive, or are eligible to receive,
Awards (whether or not such persons are similarly situated). Without limiting
the generality of the foregoing, the Committee shall be entitled, among other
things, to make non-uniform and selective determinations, to enter into
non-uniform and selective Award Agreements as to (a) the identity of the
Grantees, (b) the terms and provisions of Awards, and (c) the treatment, under
Section 14, of terminations of employment. Notwithstanding the foregoing, the
Committee's interpretation of Plan provisions shall be uniform as to similarly
situated Grantees.
22. ADJUSTMENTS. The Committee shall make equitable adjustment of:
(a) the aggregate numbers of shares of Stock, available under Section 3(a);
(b) the number of shares of Stock covered by an Award;
(c) the Option Price; and
(d) the Fair Market Value of Stock to be used to determine the amount of
the benefit payable upon exercise of an Award;
to reflect a stock dividend, stock split, reverse stock split, share
combination, recapitalization, merger, consolidation, acquisition of property or
shares, separation, asset spin-off, reorganization, stock rights offering,
liquidation or similar event, of or by the Company. Notwithstanding the
foregoing, upon the approval by the stockholders of the Company of a plan of
liquidation for the Company, any unexercised options theretofore granted, shall
thereupon become exercisable.
23. AMENDMENT OF THE PLAN. The Board may from time to time in its
discretion amend or modify the Plan without the approval of the stockholders of
the Company, except as such stockholder approval may be required (a) to permit
the grant of Awards under, and transactions in Stock pursuant to, the Plan to be
exempt from liability under Section 16(b) of the 1934 Act or (b) under the
listing requirements of any national securities exchange on which are listed any
of the Company's equity securities.
24. TERMINATION OF THE PLAN. The Plan shall terminate on the tenth (10th)
anniversary of the Effective Date or at such earlier time as the Board may
determine. Any termination, whether in whole or in part, shall not affect any
Award then outstanding under the Plan.
25. NO ILLEGAL TRANSACTIONS. The Plan and all Awards granted pursuant to it
are subject to all laws and regulations of any governmental authority which may
be applicable thereto; and notwithstanding any provision
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<PAGE> 42
of the Plan or any Award, Grantees shall not be entitled to exercise Awards or
receive the benefits thereof and the Company shall not be obligated to deliver
any Stock or pay any benefits to a Grantee if such exercise, delivery, receipt
or payment of benefits would constitute a violation by the Grantee or the
Company of any provision of any such law or regulation.
26. CONTROLLING LAW. The law of the State of Illinois, except its law with
respect to choice of law, shall be controlling in all matters relating to the
Plan.
27. SEVERABILITY. If all or any part of the Plan is declared by any court
or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of the Plan not declared to
be unlawful or invalid. Any Section or part of a Section so declared to be
unlawful or invalid shall, if possible, be construed in a manner which will give
effect to the terms of such Section or part of a Section to the fullest extent
possible while remaining lawful and valid.
B-9
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<TABLE>
<CAPTION>
/X/ Please mark
your votes
as this
----------------------------
COMMON
<S> <C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1,2,3,4 AND 5.
Item 1-ELECTION OF DIRECTORS FOR WITHHELD
Alexander C. Anderson, Paul C. Blackman ALL FOR ALL
Eduardo Camarena Legaspi, Charles W. Draggs,
III, Jorge Antonio Garcia Garza, Lawrence R.
Holland, Scott H. Lang, Jorge Lankenau Rocha, / / / / Item 3-APPROVAL OF 1994 STOCK / / / / / /
Thomas E. Meade, Mauricio Morales Sada, OPTION PLAN
Richard Pigott, David S. Ruder, Peter J. Schid,
Joseph P. Shanahan, Frederick G. Uhlmann.
WITHHELD FOR: (Write that nominee's name in the space provided below). Item 4-APPROVAL OF CHIEF / / / / / /
EXECUTIVE OFFICER
- - ---------------------------------------------------------------------- PERFORMANCE GOAL
FOR AGAINST ABSTAIN
Item 2-APPROVAL OF NON- / / / / / / Item 5-RATIFICATION OF AUDITORS / / / / / /
EMPLOYEE DIRECTOR
STOCK OPTION PLAN
COMMENTS/ADDRESS CHANGE
Please mark this box if you have
written comments/address change / /
on the reverse side.
RECEIPT IS HEREBY ACKNOWLEDGED OF THE RODMAN &
RENSHAW CAPITAL GROUP, INC. NOTICE OF MEETING AND
PROXY STATEMENT.
Signature(s) Date
---------------------------------------------------------- ------------------------------
Note: Please sign as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
</TABLE>
RODMAN & RENSHAW CAPITAL GROUP, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
JUNE 1, 1994
P THIS PROXY IS SOLICITED ON BEHALF OF THE RODMAN & RENSHAW CAPITAL GROUP, INC.
BOARD OF DIRECTORS
R
The undersigned hereby appoints James D. Van De Graaff and David J.
O Kenneth, and each of them, proxies for the undersigned, with full power of
substitution, to vote all shares of Rodman & Renshaw Capital Group, Inc.
Common Stock which the undersigned may be entitled to vote at the Annual
X Meeting of Stockholders of Rodman & Renshaw Capital Group, Inc., Chicago
Illinois, on Wednesday, June 1, 1994 at 9:00 A.M., or at any adjournment
thereof, upon the matters set forth on the reverse side and described in the
Y accompanying Proxy Statement and upon such other business as may properly
come before the meeting or any adjournment thereof.
PLEASE MARK THIS PROXY AS INDICATED ON THE REVERSE SIDE TO VOTE ON ANY
ITEM. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS, PLEASE SIGN THE REVERSE SIDE; NO BOXES NEED TO BE CHECKED.
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENTS/ADDRESS
BOX IN REVERSE SIDE
(Continued and to be
signed on the other side)
