<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 [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or
Rule 14a-12
RODMAN & RENSHAW CAPITAL GROUP, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
RODMAN & RENSHAW CAPITAL GROUP, INC.
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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)
or Item 22(a)(2) of Schedule 14A.
[ ] $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 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
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 7, 1995
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 7, 1995, at 9:00 A.M., Central Standard Time, in the
Metropolitan Club Oak Room on the 66th floor of the Sears Tower, 233 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 ratify the appointment of Coopers & Lybrand L.L.P. as independent
auditors for the Company and its subsidiaries for the December 31, 1995 fiscal
year.
3. 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 May 2, 1995 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 beginning ten days prior to the Annual Meeting. The Company's
executive offices currently are located at 120 S. LaSalle St., Chicago,
Illinois, 60603. As of May 30, 1995, the executive offices will be located in
the Sears Tower, 233 West Wacker Drive, Chicago, Illinois 60606.
By order of the Board of Directors,
James D. Van De Graaff
Secretary
May 5, 1995
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> 3
RODMAN & RENSHAW CAPITAL GROUP, INC.
120 SOUTH LASALLE STREET
CHICAGO, ILLINOIS 60603
(312) 977-7800
PROXY STATEMENT
Annual Meeting of Stockholders
June 7, 1995
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 7, 1995, at 9:00 A.M., Central Standard Time, in the
Metropolitan Club Oak Room on the 66th floor of the Sears Tower, 233 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 May 5, 1995 to holders of record of the Company's Common
Stock at the close of business on May 2, 1995.
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 ratification of the
appointment of Coopers & Lybrand L.L.P. as the Company's independent auditors
for the December 31, 1995 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 April
21, 1995, there were 6,645,802 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 May 2, 1995 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 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 April 21, 1995 was therefore 6,645,802 votes.
-1-
<PAGE> 4
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 the Annual Meeting, 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 67% 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" and for ratification of the appointment of Coopers & Lybrand L.L.P.
The presence in person or by proxy at the Annual Meeting of the holders of
a majority of the issued and outstanding shares of Common Stock shall
constitute a quorum. Election of a director requires the affirmative vote 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
and broker non-votes will not affect the outcome, except that they will count in
determining the presence of a quorum.
With respect to the proposal to ratify the appointment of Coopers &
Lybrand L.L.P., a stockholder may mark the accompanying form of proxy to (i)
vote for the proposal, (ii) vote against the proposal or (iii) abstain from
voting on the proposal. Assuming that a quorum is present at the Annual
Meeting, the affirmative vote of a majority of the shares of Common Stock
represented at the Annual Meeting and entitled to vote on the matter is
required for approval of the proposal. Broker non-votes and proxies marked to
abstain from voting with respect to the proposal will have the legal effect of
voting against the proposal.
The following table sets forth information as of April 21, 1995 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.
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial Percent
Identity of Holder Ownership (1) of Class (2)
- ------------------ ------------- ------------
<S> <C> <C>
Abaco(3) . . . . . . . . . . . . . . . . . . . . 4,431,968 66.69%
Montes Rocallosos
505 Sur, Residential San Agustin, 66260
Garza Garcia, N.L. Mexico
Scott H. Lang(4) . . . . . . . . . . . . . . . . 8,890 *
Suite 1600
525 West Monroe St.
Chicago, Illinois 60661
</TABLE>
-2-
<PAGE> 5
The business address for each of the following persons until the close of
business on May 26, 1995 is:
Rodman & Renshaw, Inc.
120 S. LaSalle Street
Chicago, Illinois 60603
Beginning May 30, 1995, their business address will be:
Rodman & Renshaw, Inc.
Sears Tower
233 West Wacker Drive
Chicago, Illinois 60606
<TABLE>
<S> <C> <C>
Alexander C. Anderson(5) ............... O --
Paul C. Blackman ....................... 4,650 *
Peter Boneparth ........................ 5,000 *
Eduardo Camarena Legaspi(5) ............ O --
Charles W. Daggs, III .................. O --
Jorge Antonio Garcia Garza(5) .......... O --
Francis L. Kirby ....................... O --
Jorge Lankenau Rocha(5) ................ O --
Thomas E. Meade ........................ O --
Richard Pigott ......................... 500 *
Keith F. Pinsoneault ................... O --
Federico Richardson Lamas(5) ........... O --
David S. Ruder ......................... 10,000 *
Joseph P. Shanahan(5) .................. O --
David H. Shulman ....................... 10,400 *
Frederick G. Uhlmann ................... 10,013 *
All current directors and executive
officers as a group (18 persons)(5) ... 45,563 *
</TABLE>
- -------------------
* Less than 1 %
(1) Includes 12,950 shares of Common Stock 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 April 21, 1995, as follows: Mr. Blackman, 4,650; Mr.
Shulman, 5,400; Mr. Uhlmann, 2,900.
(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 April 21, 1995.
(3) Abaco also has the right to acquire Common Stock from the Company if the
Company issues stock and the result is that Abaco beneficially owns less
than 51% of the total voting power of the Company's stock. Abaco Grupo
Financiero, S.A. de C.V., the parent company of Abaco, also is deemed the
beneficial owner of Abaco's Common Stock.
(4) Mr. Lang is no longer employed by the Company. This figure is based upon
Company records and stock transfer agent records.
-3-
<PAGE> 6
(5) Not included are shares held by Abaco, of which the referenced person is a
director and/or officer or with which the referenced person is otherwise
affiliated.
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting, 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 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, each of whom is a nominee
for re-election:
<TABLE>
<CAPTION>
Age, Business Experience and
Name Other Directorships
- ---- ----------------------------
<S> <C>
Alexander C. Anderson Age 48; Director since April 11, 1994; Research
Director of Abaco since 1989.
Paul C. Blackman Age 54; Director, Executive Vice President of
the Company since April 11, 1994 and Managing
Director of Retail Sales for Rodman & Renshaw,
Inc., the Company's principal subsidiary
("Rodman"); Senior Vice President of the Company
from 1993 to 1994; Senior Vice President of Dean
Witter Reynolds Inc., a financial services firm,
from 1990 to 1993.
Peter Boneparth Age 35; Director since April 25, 1995; Managing
Director of Investment Banking for Rodman since
March 28, 1995; Managing Director of Investment
Banking for Mabon Securities Corp., a financial
services firm, from 1989 to March 28, 1995. Mr.
Boneparth also serves as a director of Marissa
Christina, Inc.
Eduardo Camarena Legaspi Age 44; Director since 1993; Chief Executive
Officer of Abaco from 1991 to 1995; Director of
Abaco from 1985 to 1995; Director of Abaco Grupo
Financiero, S.A. de C.V., parent company of
Abaco ("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 47; Director, President and Chief Executive
Officer of the Company and President of Rodman
since April 11, 1994; Senior Managing Director,
Bear Stearns & Co., Incorporated, a financial
services firm, from 1991 to 1994; Chairman and
Chief Executive Officer of Sutro & Co.
Incorporated, a financial services firm, from
1986 to 1990.
</TABLE>
-4-
<PAGE> 7
<TABLE>
<S> <C>
Jorge Antonio Garcia Garza Age 33; 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.
Francis L. Kirby Age 50; Director since September 8, 1994; Executive
Vice President of the Company since June 24, 1994;
Senior Vice President of Oppenheimer & Co., Inc.,
a financial services firm, from May 1993 to June
1994; Director and Executive Vice President of the
Company from 1978 to 1993.
Jorge Lankenau Rocha Age 51; Chairman of the Board of the Company and
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 54; Director since March 18, 1994; Founder and
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 1992.
Richard Pigott Age 54; Director since March 18, 1994; corporate
merger and acquisition advisor and private investor
since 1988. Mr. Pigott also serves as a Director of
Ameriwood Industries International Corporation.
Keith F. Pinsoneault Age 47; Director since November 17, 1994; Executive Vice
President of the Company since June 1, 1994 and Chief
Operating Officer of the Company since September 8, 1994;
Senior Portfolio Manager for Harris Bretall Sullivan &
Smith from 1991 to June 1994; Portfolio Manager for
McCullough Andrews & Cappiello from 1990 to 1991 .
Federico Richardson Lamas Age 33; Director since April 25, 1995; National Sales
Manager of Abaco since March, 1995; investment advisor
with Abaco since 1986; Director of Confia, S.A. beginning
in 1995.
David S. Ruder Age 65; Director since 1993; Professor of Law, Northwestern
University School of Law; partner with Baker & McKenzie, an
international law firm, from 1990 to 1994 and Senior Counsel
since 1994; 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.
</TABLE>
-5-
<PAGE> 8
<TABLE>
<S> <C>
Joseph P. Shanahan Age 47; Director since 1993; President since 1992
of Abaco International Corporation, a wholly-owned
subsidiary of Abaco based in New York City and a
registered broker-dealer; Vice President of the
Company and President of Rodman from January to
April, 1994; consultant to Excalibur Management,
Ltd., from 1990 to 1992.
David H. Shulman Age 33; Director since April 25, 1995; Executive
Vice President of the Company since October 1, 1994;
Managing Director of Rodman's Institutional Fixed
Income Department since February 14, 1994; First
Vice President and Sales Manager for Rodman's New
York Taxable Fixed Income group from 1990 to
February 14, 1994.
</TABLE>
BOARD AND COMMITTEE MEETINGS, COMMITTEE FUNCTIONS, AND COMPOSITION.
Following the completion of its fiscal year ended June 24, 1994, the
Company adopted a calendar fiscal year. The period from June 25, 1994 through
December 31, 1994 shall be referred to herein as the "Transition Period." The
Board of Directors held two meetings (exclusive of committee meetings) during
the Transition Period. Each of the directors who was a member of the Board
during the Transition Period attended at least 75% of the Board meetings that
he was eligible to attend during such period. Each director who was a member of
a Board committee during the Transition Period attended at least 75% of the
meetings of each committee that he was eligible to attend as a member during
such period.
Executive Committee. The Executive Committee of the Board of Directors,
which currently consists of Messrs. Charles W. Daggs, III and Eduardo Camarena
Legaspi, 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 did not meet during the Transition
Period.
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. 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 Transition Period.
Compensation Committee. The Compensation Committee currently consists of
Messrs. Meade and Pigott. The Compensation Committee's primary functions are to
review the compensation to be received by the Company's senior executives
(defined for these purposes as any Company employee whose annual salary exceeds
$150,000), to monitor and modify as it deems necessary the Company's executive
compensation programs, to review periodically the Company's broker payout
grids, customer commission schedules and incentive based programs and to grant
stock options to employees based upon recommendations of management. The
Compensation Committee met one time during the Transition Period.
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
-6-
<PAGE> 9
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 twice during the Transition Period. The
Nominating Committee will consider nominees recommended by stockholders in
compliance with the procedures set forth below under "Stockholder Proposals."
* * * *
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE NOMINEES
LISTED ABOVE AS DIRECTORS OF THE COMPANY.
PROPOSAL 2
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 actions in
appointing Coopers & Lybrand L.L.P. as independent auditors for the Company and
its subsidiaries for the year ending December 31, 1995 and to perform other
accounting services. Although it is not required to do so, the Company is
submitting the selection of Coopers & Lybrand L.L.P. to the stockholders for
ratification.
Coopers & Lybrand L.L.P. has acted as independent auditors for the Company
and its subsidiaries since October 6, 1994. Deloitte & Touche LLP were the
independent auditors for the Company for the fiscal year ended June 24, 1994.
Following Abaco's acquisition of a majority interest in the Company, the Board
of Directors of the Company determined that it would be cost effective for the
Company and Parent to change the Company's fiscal year to coincide with that of
Parent and Abaco and to engage one independent certified accountant to audit
the financial statements of Parent, Abaco and the Company. Coopers & Lybrand
L.L.P. is the independent auditor for Parent and Abaco.
Deloitte & Touche LLP's report on the Company's financial statements for
the fiscal years ended June 24, 1994 and June 25, 1993 contained no adverse
opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles.
During the two fiscal years ended June 24, 1994 and June 25, 1993, and
during the interim period from June 24, 1994, through the dismissal of Deloitte
& Touche LLP, the Company had no disagreements with Deloitte & Touche LLP on
any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure.
During the two fiscal years ended June 24, 1994 and June 25, 1993, and
during the interim period from June 24, 1994, through its dismissal, Deloitte &
Touche LLP did not advise the Company:
(a) that the internal controls necessary for the Company to develop
reliable financial statements do not exist;
(b) that information had come to such firm's attention that led it to no
longer be able to rely on management's representations, or that made it
unwilling to be associated with the financial statements prepared by
management;
(c) of the need to expand significantly the scope of its audit, or that
information had come to its attention during such period that, if further
investigated, may have:
(i) materially impacted the fairness or reliability of either a
previously issued audit report or the underlying financial statements, or
the financial statements to be issued for the Transition Period; or
-7-
<PAGE> 10
(ii) caused it to be unwilling to rely on management's representations
or be associated with the Company's financial statements;
(d) that information had come to its attention that it had concluded
materially impacted the fairness or reliability of either a previously issued
audit report or the underlying financial statements, or the financial
statements to be issued covering the Transition Period.
During the two fiscal years ended June 24, 1994 and June 25, 1993, and
during the interim period from June 25, 1994, through the dismissal of Deloitte
& Touche LLP, neither the Company nor anyone on the Company's behalf consulted
Coopers & Lybrand L.L.P. regarding either the application of accounting
principles to a specified transaction or the type of audit opinion that might
be rendered on the Company's financial statements.
The Company filed with its Current Report on Form 8-K dated October 6,
1994, a letter from Deloitte & Touche LLP prepared in accordance with Item 304
(a) of Regulation S-K of the Securities and Exchange Commission.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at
the Annual Meeting, 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 THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS
INDEPENDENT AUDITORS.
-8-
<PAGE> 11
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation for
the Transition Period and for each of the Company's last three completed fiscal
years for the following persons (the "named executive officers"): (i) the
Company's chief executive officer during the Transition Period (previously
defined as the period from June 25, 1994 through December 31, 1994) and (ii)
the Company's four most highly compensated executive officers, other than the
chief executive officer, at the end of the Transition Period.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Awards
------
Securities All Other
Other Annual Underlying Compensation
Name and Principal Position Period Salary ($) Bonus ($)(1) Compensation ($)(2) Options (#) ($)(3)
- --------------------------- ------ --------- ------------ ------------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Charles W. Daggs III (4) Transition
President and Chief Period 150,000 -0- -0- -0- -0-
Executive Officer
1994 68,269 500,000 -0- 100,000 10,000
Paul C. Blackman(5) Transition
Executive Vice President
Period 60,417 150,000 316,689 -0- -0-
1994 103,972 75,000 509,819 -0- 924
Scott H. Lang(6) Transition
Executive Vice President Period 75,000 222,218 6,388 -0- 695
1994 150,000 437,257 9,191 -0- 873
1993 150,000 -0- 3,089 8,500 8,441
1992 150,000 225,160 1,922 -0-
David H. Shulman (7) Transition
Executive Vice President Period 650,000 -0- 26,182 -0- -0-
1994 299,363 -0- 1,031,263 5,000 873
Frederick G. Uhlmann Transition
Executive Vice President Period 40,417 100,000 74,539 -0- -0-
1994 153,333 100,000 153,893 -0- 873
1993 100,000 25,000 163,408 2,250 3,841
1992 100,000 25,000 105,708 -0-
</TABLE>
- -------------------
(1) Except where otherwise noted in the footnotes, bonuses were based on
profitability of the specific department or area, or multiple
-9-
<PAGE> 12
departments or areas, over which the executive had direct responsibility.
(2) These amounts primarily consist of commissions earned from securities and
commodities transactions, and include amounts voluntarily deferred under
the Company's Deferred Compensation Plan.
(3) Amounts included under "All Other Compensation" consist of (i) Company
matching funds under the Company's Retirement and Savings Plan and (ii) in
the case of Mr. Daggs, $10,000 in relocation expenses in fiscal 1994. In
accordance with the transitional provisions of the rules on executive
officer compensation adopted by the SEC, "All Other Compensation"
information is excluded for the Company's 1992 fiscal year.
(4) Mr. Daggs joined the Company as President and Chief Executive Officer on
April 11, 1994. The amount in the bonus column reflects a one-time signing
bonus that he received on May 13, 1994.
(5) Mr. Blackman became an executive officer of the Company on April 18, 1994.
(6) Mr. Lang resigned as an officer of the Company on January 23, 1995.
(7) Mr. Shulman became an executive officer of the Company on February 14,
1994.
None of the named executive officers received a grant of options during
the Transition Period. The following table provides information as to the
number and value of the options held by each named executive officer at
December 31, 1994. The Company has not granted stock appreciation rights.
AGGREGATED OPTION EXERCISES IN TRANSITION PERIOD
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Securities In-the-Money
Underlying Options at
Unexercised FY-End ($)(1)
Options
at FY-End (#)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable ($) Unexercisable
- ---- --------------- ------------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Charles W. Daggs III - - -/100,000 -/-
Paul C. Blackman - - 4,650/8,225 -/-
Scott H. Lang - - -/- -/-
David H. Shulman - - 5,400/5,000 -/-
Frederick G. Uhlmann - - 2,900/2,350 -/-
</TABLE>
(1) All options listed in the table were out of the money at December 31, 1994,
based on a closing stock price of $3.875 per share on such date.
-10-
<PAGE> 13
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.
EMPLOYMENT AGREEMENTS
Mr. Daggs' employment agreement is discussed in the Compensation Committee
Report on Executive Compensation, below.
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 receives 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.
STOCKHOLDER RETURN PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS*
Rodman & Renshaw Capital Group, S&P 500 and Value Line's
Securities & Brokerage Index
(Performance Results Through 12/31/94)
<TABLE>
<CAPTION>
12/89 6/90 12/90 6/91 12/91 6/92 12/92 6/93 12/93 6/94 12/94
----- ---- ----- ---- ----- ---- ----- ---- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Rodman & Renshaw Capital Group $100.00 $122.22 $64.44 $ 68.89 $ 75.56 $ 80.00 $ 95.56 $100.00 $128.89 $ 91.25 $ 68.99
S&P 500 $100.00 $103.08 $96.83 $110.70 $126.41 $125.45 $136.25 $142.94 $150.00 $144.92 $151.97
Securities & Brokerage $100.00 $105.38 $91.20 $142.37 $203.43 $181.12 $208.83 $260.69 $281.75 $242.13 $242.19
</TABLE>
Assumes $100 invested at the close of trading 12/89 in Rodman & Renshaw Capital
Group common stock, S&P 500, and Value Line's Securities & Brokerage Index.
*Cumulative total return assumes reinvestment of dividends.
Source: Value Line, Inc.
Factual material is obtained from sources believed to be reliable, but the
publisher is not responsible for any errors or omissions contained herein.
-11-
<PAGE> 14
The issuers included in the Securities & Brokerage 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, Paine Webber
Group, The Quick & Reilly Group, Raymond James Financial, Salomon Inc. and
Charles Schwab.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPOSITION OF COMMITTEE
The Compensation Committee is composed solely of directors of the Company
who (i) qualify as independent directors under New York Stock Exchange rules
and (ii) are not and have not been connected with the Company, Parent or any of
their respective affiliates as an officer, employee, trustee, partner or
director (other than of the Company).
EXECUTIVE COMPENSATION OVERVIEW
On December 22, 1993, Abaco acquired a majority of the Company's
outstanding shares through a tender offer (the "Change of Control"). Since
the Change of Control, the Company has substantially changed its senior
management team, as a result of which all but two of the Company's current
executive officers have become such since the Change of Control. Each executive
officer separately negotiated the terms of his employment with the Company
prior to accepting such employment. In some cases, the Company is bound
contractually to the terms of compensation for a period of two or more years.
Compensation of each executive officer is based upon one or some
combination of the following components: salary, guaranteed bonus,
performance-based bonus, commissions and stock options. The amount of each
component and the percentage of total compensation that it constitutes varies
with each executive officer because, as stated above, they were the product of
individual negotiations. Factors influencing the negotiations included the
position to be filled by the executive officer, his previous experience and the
amount and components of compensation earned by persons in such position at
comparable companies within the industry. (Comparisons with other companies
were informal, and the companies compared were not necessarily those included
in the Company's stock performance graph on page __.) Generally, a portion of
the compensation of executive officers hired to head potentially profit-making
operations within the Company is linked to some objective measure of earnings
from those operations. Initial compensation for persons responsible for
administrative functions has been weighted heavily toward salary.
The Compensation Committee has reviewed the terms of employment for all
senior executives hired since the committee was appointed on April 11, 1995.
(The full Board of Directors has approved the terms in several instances, but
it has not modified or rejected any action or recommendation of the
Compensation Committee.) The goal of the Compensation Committee has been to
attract highly skilled individuals to the Company. Because the Company was
undergoing significant change at the time that it hired most of the current
executive officers, the Compensation Committee determined that in some cases
the Company would need to offer guaranteed compensation in order to appeal to
executives with the talent and experience that the Company was seeking.
In the past, the Company has awarded performance-based bonuses even to
senior executives without a specific contractual right to such bonuses. The
Company awarded no such bonuses for the Transition Period, however, because of
the losses that the Company incurred during such period.
A substantial portion of the compensation of each executive officer who
was a registered representative or revenue producer during the Transition
Period was a percentage of 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 executive
-12-
<PAGE> 15
officer during the Transition Period. In certain cases, the grid payout was
temporarily enhanced as a hiring inducement.
CHIEF EXECUTIVE OFFICER
During the Transition Period, the compensation of Charles W. Daggs, III,
President and Chief Executive Officer of the Company, was based entirely upon
the terms of the employment agreement that he negotiated with the Company as a
condition to his commencement of employment. He began his employment on April
11, 1994. Under the terms of his agreement, Mr. Daggs is entitled to receive a
base salary of $300,000 per year. His base salary during the Transition Period
totaled $150,000. He received no other compensation during the Transition
Period.
Under the terms of his agreement, Mr. Daggs will be eligible to receive
performance based compensation for each of the two twelve-month periods
commencing July 1, 1994 and July 1, 1995 based on the Company's income before
taxes ("IBT") for such periods. (At the time the Company and Mr. Daggs entered
into his agreement, these periods coincided with the Company's fiscal years.
The Company has since changed its fiscal year to a calendar year, as discussed
above.) The performance goal and the performance-based compensation that Mr.
Daggs would receive are as follows:
<TABLE>
<CAPTION>
IBT PERFORMANCE-BASED COMPENSATION
<S> <C>
(Without Giving Effect to
Performance-Based Compensation)
$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. His performance goal was
approved by the Company's stockholders at its annual meeting held on June 1,
1994.
Pursuant to the terms of his agreement, the Company also granted to Mr.
Daggs options to purchase 100,000 shares of Common Stock at a price of $6.50
per share, 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. The purpose
of the grant was to link a portion of Mr. Daggs' compensation to the
performance of the Company's stock.
Mr. Daggs' 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.
-13-
<PAGE> 16
POLICY WITH REGARD TO DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Internal Revenue Code Section 162(m) and the proposed regulations
thereunder generally limit to $1 million a public corporation's annual federal
tax deduction for compensation (including stock-based compensation such as
options) paid to certain top executive officers. Under the proposed
regulations, however, qualified performance-based compensation is not subject
to the $1 million limitation if it meets certain requirements and if the terms
of the performance goal are approved by the stockholders of the corporation.
The Company obtained stockholder approval at the last annual meeting of Mr.
Daggs' performance-based compensation and of the Company's two current stock
option plans. It evaluates the advisability of obtaining stockholder approval
of other performance-based compensation on a case-by-case basis.
COMPENSATION COMMITTEE
Thomas E. Meade
Richard Pigott
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the Transition Period, the sole members of the Company Compensation
Committee were Thomas E. Meade and Richard Pigott. Neither is or has been an
officer or employee of the Company or any of its subsidiaries.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On June 22, 1994, the Company borrowed $10,000,000 from Confia, S.A. The
loan was renewed on December 19, 1994 for a six-month term. The principal
amount bears interest at a rate of 13.5% per year. The Company paid a
commitment fee of $50,000 to Confia, S.A. for the loan, which is Confia, S.A.'s
standard fee for loans in such amount.
In addition, effective June 24, 1994, the Company issued to Abaco for
$15,000,000 150 shares of nonvoting preferred stock convertible into the
Company's common stock at a rate of $7.25 of the preferred stock purchase price
per share of common stock. The preferred stock was automatically converted into
2,068,965 shares of common stock on January 31, 1995 without any further
payment or other action by Abaco. Abaco waived its right to a dividend on the
preferred stock payable on December 31, 1994.
Abaco International Corporation, a wholly-owned subsidiary of Parent based
in New York ("AIC"), subleases from the Company a portion of the New York
office space leased by the Company. Under the sublease, AIC pays annual rent to
the Company of $295,487, which amount is a percentage of the total rent that
the Company pays under its lease equal to the percentage of the Company's total
space occupied by AIC. Under the sublease, AIC also pays operating expenses and
other payments charged to the Company by the landlord under the Company's
lease. The sublease expires on May 31, 1998.
As part of a broker retention package adopted by Rodman in February, 1994,
certain brokers were entitled to receive forgivable loans from Rodman if they
achieved specified levels of sales in the subsequent twelve-month period. Under
this package, Paul C. Blackman, a Director and Executive Vice President of
the Company, received a forgivable loan from the Rodman on March 1, 1995 in the
amount of $79,931. Under the terms of the note, half of the principal amount
owed will be forgiven if Mr. Blackman remains in the employ of Rodman on the
first anniversary of the loan, and the remainder of the principal as well as
all accrued interest will be forgiven if Mr. Blackman remains in the employ of
Rodman on the second anniversary of the loan. Unpaid principal amounts under
the note bear interest at a rate of 4% per annum.
-14-
<PAGE> 17
David S. Ruder, a Director of the Company, is Senior Counsel to Baker &
McKenzie. Baker & McKenzie performs legal services for the Company, Abaco and
Parent.
On March 28, 1995, Rodman acquired certain of the assets and hired
substantially all of the employees of the institutional sales, equity research
and investment banking departments of Mabon Securities Corp.("Mabon"). Peter
Boneparth was at the time Head of Investment Banking of Mabon. Mr. Boneparth is
now a Director and Executive Vice President of the Company. Rodman will pay to
Mr. Boneparth by February 14, 1996, an investment banking fee of $650,000 in
connection with the Mabon transaction. In addition, Rodman entered into a
three-year employment agreement with Mr. Boneparth effective March 28, 1995,
pursuant to which Mr. Boneparth became head of Rodman's investment banking
group. Under the terms of the agreement, Mr. Boneparth receives a guaranteed
base salary of $200,000 per year. In addition, he will receive for each full or
partial fiscal year during the term of the agreement (other than fiscal year
1995) a guaranteed bonus equal to the greater of (i) $650,000 or (ii) 20% of
the total pre-tax profit (as defined in the agreement) of Rodman's investment
banking group and 25% of all revenues generated by him and allocated to the
investment banking group. Each bonus to which Mr. Boneparth may be entitled for
a partial fiscal year shall be pro rated.
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 may 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.
STOCK OWNERSHIP AND TRADING REPORTS
Section 16 (a) of the Securities Exchange Act of 1934 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.
Based on Company records, Kurt B. Karmin, former chairman of the Company,
filed two late reports during the Company's fiscal year ended June 24, 1994
with respect to two transactions, and Edwin J. McGuinn, Jr., an executive
officer of the Company hired on March 28, 1995, filed one late Form 3 Initial
Statement of Beneficial Ownership of Securities.
STOCKHOLDER PROPOSALS
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 1996 must do so no later than January 6, 1996.
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 any nomination not made in compliance
with the foregoing procedure.
-15-
<PAGE> 18
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 7, 1995. 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 Transition Report to Stockholders for the Period Ended December 31,
1994 is being mailed to the stockholders contemporaneously with this Proxy
Statement is a part of the proxy solicitation material.
By order of the Board of Directors
[SIG]
James D. Van De Graaff
Secretary
Rodman & Renshaw Capital Group, Inc.
120 South LaSalle Street
Chicago, Illinois 60603
May 5, 1995
-16-
<PAGE> 19
<TABLE>
<S><C>
- --------------------------------------------------------------------------------
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS OF
RODMAN & RENSHAW CAPITAL GROUP, INC.
JUNE 7, 1995
THIS PROXY IS SOLICITED ON BEHALF OF
THE RODMAN & RENSHAW CAPITAL GROUP, INC. BOARD OF DIRECTORS
The undersigned hereby appoints James D. Van De Graaff and John T.
Hague, 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 Meeting of Stockholders of Rodman & Renshaw Capital Group,
Inc., Chicago, Illinois, on Wednesday, June 7, 1995 at 9:00 A.M., or
at any adjournment thereof, upon the matters set forth below and
described in the accompanying Proxy Statement and upon such other
business as may properly come before the meeting or any adjournment
thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
ITEM 1 -- Election of Directors. / / FOR ALL NOMINEES / / WITHHELD FOR ALL
(except as marked to the contrary below)
Alexander C. Anderson, Paul C. Blackman, Peter Boneparth,
Eduardo Camarena Legaspi, Charles W. Daggs, III, Jorge Antonio
Garcia Garza, Francis L. Kirby, Jorge Lankenau Rocha, Thomas E.
Meade, Richard Pigott, Keith F. Pinsoneault, Federico Richardson
Lamas, David S. Ruder, Joseph P. Shanahan, David H. Shulman
WITHHELD FOR: (Write nominee's name on line below.)
----------------------------------------------------------------
ITEM 2 -- Ratification of Auditors.
/ / FOR / / AGAINST / / ABSTAIN
(Continued and to be signed on the other side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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'
RECOMMENDATION, PLEASE SIGN BELOW; NO BOXES NEED TO BE CHECKED. IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED IN FAVOR OF ALL DIRECTOR
NOMINEES AND OF ITEM 2.
Date
--------------------------
------------------------------
Signature(s)
------------------------------
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>
