<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
[COMPANY NAME]
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
[COMPANY NAME]
- --------------------------------------------------------------------------------
(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)(j), 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 transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
RODMAN & RENSHAW CAPITAL GROUP, INC.
233 SOUTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
(312)526-2000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 24, 1996
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 Tuesday, September 24, 1996, at 9:00 A.M., at the offices of the Company
on the 45th Floor of the Sears Tower, 233 South Wacker Drive, Chicago, Illinois
for the following purposes:
1. To elect 16 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, 1996 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 August 20, 1996 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 233 South Wacker Drive, Chicago, Illinois
60606.
By order of the Board of Directors,
Gilbert R. Ott, Jr.
-------------------
Gilbert R. Ott, Jr.
Secretary
August 23, 1996
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.
233 SOUTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
(312) 526-2000
-------------------------
PROXY STATEMENT
-------------------------
Annual Meeting of Stockholders
September 24, 1996
-------------------------
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 Tuesday,
September 24, 1996, at 9:00 A.M., at the offices of the Company on the 45th
floor of the Sears Tower, 233 South 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 August 23,
1996 to holders of record of the Company's Common Stock at the close of business
on August 20, 1996.
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, 1996
year and, as to any other matter that may be brought before the Annual Meeting,
in accordance with the judgement 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 July 31,
1996, there were 6,645,802 shares of Common Stock issued and outstanding. As of
the same date, there were 145 shares of Preferred Stock issued and outstanding.
Holders of record of the Company's Common Stock at the close of business on
August 20, 1996 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 July 31, 1996 was therefore 6,645,802 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
1
<PAGE> 4
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 70% 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 16 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 July 31, 1996 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)............................................................. 4,625,788 69.6%
Torre Confia
Av. San Jeronimo 999 Pte.
Monterrey, N.L. Mexico
The business address for each of the following persons is:
Rodman & Renshaw, Inc.
233 South Wacker Drive, Ste 4500
Chicago, Illinois 60606
Alexander C. Anderson(4)............................................. 0 --
Ernesto Arechavala(4)................................................ 0 --
Peter Boneparth...................................................... 5,000 *
Eduardo Camarena Legaspi(4).......................................... 0 --
Charles W. Daggs, III................................................ 50,000 *
William C. Dennis.................................................... 0 --
Jorge Antonio Garcia Garza(4)........................................ 0 --
Francis L. Kirby..................................................... 1,000 *
Jorge Lankenau Rocha(4).............................................. 0 --
Edwin J. McGuinn, Jr................................................. 9,000 *
Thomas E. Meade...................................................... 15,000 *
F. Rodrigo Padilla(4)................................................ 0 --
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
IDENTITY OF HOLDER OWNERSHIP(1) OF CLASS(2)
- ------------------ ------------ -----------
<S> <C> <C>
Richard Pigott....................................................... 15,500 *
Federico Richardson Lamas(4)......................................... 0 --
David S. Ruder....................................................... 25,000 *
Joseph P. Shanahan(4)................................................ 0 --
All current directors and executive officers as a group (17
persons)(4)........................................................ 120,500 1.8%
</TABLE>
- ---------------
* Less than 1%
(1) Includes 95,000 shares of Common Stock subject to stock options under the
Company's 1994 Stock Option Plan or Non-Employee Director Stock Option Plan
exercisable within 60 days after July 31, 1996, as follows: Mr. Meade,
15,000; Mr. Pigott, 15,000; Mr. Ruder, 15,000; Mr. Daggs, 50,000.
(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 stock options which are currently exercisable or
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 9,
1996.
(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) 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.
3
<PAGE> 6
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting, 16 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
reelection:
<TABLE>
<CAPTION>
AGE, BUSINESS EXPERIENCE AND
NAME OTHER DIRECTORSHIPS
---- -----------------------------
<S> <C>
Ernesto Arechavala............ Age 31; Director since 1995; Director of Administration and
Finance for Abaco since 1993; Director of Operations for
Abaco from 1991 to 1993.
Alexander C. Anderson......... Age 49; Director since April 11, 1994; Research Director of
Abaco since 1989.
Peter Boneparth............... Age 36; Director since April 25, 1995; Executive Vice
President and Senior Managing Director of Investment Banking
for Rodman & Renshaw, Inc., the Company's principal
subsidiary ("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 45; Director since 1993; Director of International
Affairs for Abaco Grupo Financiero, S.A. de C.V., parent
company of Abaco ("Parent") since 1987; Chief Executive
Officer of Abaco from 1991 to 1995; Director of Abaco from
1985 to 1995; 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 48; 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.
William C. Dennis............. Age 52; Director since June 20, 1996, Executive Vice
President and Chief Financial Officer since May 1996;
Managing Director of Market Imaging Systems, Inc. from 1989
to 1996; Chief Financial Officer of the Capital Markets
Sector of Merrill Lynch & Co., a financial services firm,
prior to 1989.
Jorge Antonio Garcia Garza.... Age 35; Director since 1993; General Counsel, Secretary of
the Board of Directors of Parent since 1993; 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.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
AGE, BUSINESS EXPERIENCE AND
NAME OTHER DIRECTORSHIPS
----- -----------------------------
<S> <C>
Francis L. Kirby.............. Age 51; Director since September 8, 1994; Senior Managing
Director of Retail Financial Services for Rodman since
November 1995; 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
1981 to 1993.
Jorge Lankenau Rocha.......... Age 52; 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.
Edwin J. McGuinn, Jr.......... Age 44; Director since 1995; Senior Managing Director of
Fixed Income for Rodman since February 1996; Executive Vice
President and Senior Managing Director of Equities for
Rodman since March 28, 1995; Managing Director of Mabon
Securities Corp., a financial services firm, from 1992 to
1994; investment banker with Lehman Bros. from 1981 to 1992
with final position of Managing Director.
Thomas E. Meade............... Age 55; Director since 1994; Founder and President of
Private Capital Management, Inc., an investment management
and consulting 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.
Rodrigo Padilla............... Age 48; Director since 1995; Director of Parent since April
1992; Director of Abaco since April 1992; Director of
Confia, S.A. since April 1992.
Richard Pigott................ Age 55; Director since 1994; corporate merger and
acquisition advisor and private investor since 1988. Mr.
Pigott also serves as a Director of Ameriwood Industries
International Corporation.
Federico Richardson Lamas..... Age 34; Director since 1995; National Sales Manager of Abaco
since 1995; investment advisor with Abaco since 1986;
Director of Confia, S.A. since 1995.
David S. Ruder................ Age 66; Director since 1993; Professor of Law, Northwestern
University School of Law since 1961; 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.
Joseph P. Shanahan............ Age 48; Director since 1993; Executive Vice President and
Chief Operating Officer of Rodman since February 8, 1996;
Director of Operations and Administration for Rodman from
January 2, 1996 to February 8, 1996; President of Abaco
International Corp., a wholly-owned subsidiary of Abaco,
from 1992 to 1996; Vice President of Rodman from January
1994 to April 1994; consultant to Excalibur Management, Ltd.
from 1990 to 1992.
</TABLE>
BOARD AND COMMITTEE MEETINGS, COMMITTEE FUNCTIONS AND COMPOSITION.
The Board of Directors held five meetings (exclusive of committee meetings)
during the year ended December 31, 1995. Each of the directors who was a member
of the Board during 1995 attended at least 75%
5
<PAGE> 8
of the Board meetings that he was eligible to attend during such period. Each
director who was a member of a Board committee during 1995 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. Ernesto Arechavala, 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 1995,
but its members acted by unanimous written consent once during the year.
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 five times
during 1995.
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 eight times during 1995.
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 twice during 1995. 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, 1996 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.
6
<PAGE> 9
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 (as
defined below); or
(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 (as
defined below).
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.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation for
the year ended December 31, 1995, the "Transition Period" (as defined below),
the fiscal year ended June 24, 1994, and the fiscal year ended June 25, 1993 for
the following persons (the "named executive officers"): (i) the Company's chief
executive officer, and (ii) the other four executive officers at December 31,
1995 with the highest total salary and bonus for 1995. In 1994, the Company
changed its fiscal year from the year ending on the last Friday of
7
<PAGE> 10
June to the calendar year. The transition period from June 25, 1994 to December
31, 1994 is referred to as the "Transition Period."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
ANNUAL COMPENSATION ------------
------------------------------------------- SECURITIES ALL OTHER
OTHER ANNUAL UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION PERIOD SALARY ($) BONUS ($) COMPENSATION ($) OPTIONS (#) ($)(1)
- --------------------------- ---------- ---------- --------- ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Charles W. Daggs, III(2)... 1995 300,000 600,000 -0- -0- 924
President and Chief Transition
Executive Officer Period 150,000 -0- -0- -0- -0-
1994 68,269 500,000 -0- 100,000 10,000
Peter Boneparth(3)......... 1995 153,846 650,000 -0- 20,000 -0-
Executive Vice President
Edwin J. McGuinn, Jr.(4)... 1995 153,846 500,000 -0- 20,000 -0-
Executive Vice President
Keith F. Pinsoneault(5).... 1995 150,000 100,000 -0- 20,000 924
Executive Vice President Transition
Period 75,000 50,000 -0- -0- -0-
1994 13,077 8,718 -0- -0- -0-
David H. Shulman(6)........ 1995 1,300,000 -0- 39,657 20,000 924
Transition
Period 650,000 -0- 26,182 -0- -0-
1994 299,363 -0- 1,031,263 5,000 873
</TABLE>
- ---------------
(1) 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.
(2) Mr. Daggs joined the Company as President and Chief Executive Officer on
April 11, 1994. The figures in the Bonus column reflect amounts paid
pursuant to the terms of his employment agreement discussed below.
(3) Mr. Boneparth became an executive officer of the Company on March 28, 1995.
The figure in the Bonus column reflects a bonus for 1995 paid in 1996
pursuant to the terms of his employment agreement, discussed below.
(4) Mr. McGuinn became an executive officer of the Company on March 28, 1995.
The figure in the Bonus column includes a $200,000 signing bonus paid in
1995 and a $300,000 bonus for 1995 paid in 1996, both pursuant to the terms
of his employment agreement, discussed below.
(5) Mr. Pinsoneault became an executive officer of the Company on May 31, 1994.
He resigned effective May 31, 1996.
(6) Mr. Shulman became an executive officer of the Company on February 14, 1994.
He resigned as an officer of the Company on January 29, 1996. The figures in
the Other Annual Compensation column include (i) the cash value that he
received in 1995 for a life insurance policy previously purchased by the
Company under a discontinued employee benefit plan, and (ii) for previous
periods, deferred compensation and commissions.
8
<PAGE> 11
The following table presents information as to stock option awards to each
of the named executive officers during 1995. No stock appreciation rights were
granted.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT ASSUMED
ANNUAL RATES
NUMBER OF % OF TOTAL OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ---- ----------- ------------ -------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Charles W. Daggs, III............ -- -- -- -- -- --
Peter Boneparth.................. 20,000(2) 2.43 2.00 12/07/05 103,116 237,497
Edwin J. McGuinn, Jr............. 20,000(2) 2.43 2.00 10/07/05 103,116 237,497
Keith F. Pinsoneault(3).......... 20,000(2) 2.43 2.00 10/07/05 103,116 237,497
David H. Shulman(3).............. 20,000(2) 2.43 2.00 10/07/05 103,116 237,497
</TABLE>
- ---------------
(1) The dollar amounts is these columns project the amount that could be earned
if the common stock appreciates at the annual rates indicated from the date
of grant and if the options are held until the expiration dates shown. These
rates of appreciation are specified by the applicable rules of the SEC and
are not intended to forecast possible future actual appreciation, if any, in
the Company's stock prices.
(2) Options vest at 20% per year cumulatively and are exercisable upon vesting.
(3) No longer employed by the Company. Options have been canceled.
The following table provides information as to the number and value of the
options held by each named executive officer at December 31, 1995. 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 AT OPTIONS AT
FY-END (#) FY-END ($)(1)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
ON EXERCISE (#) REALIZED UNEXERCISABLE UNEXERCISABLE
--------------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Charles W. Daggs, III...................... -- -- -/100,000 -/-
Peter Boneparth............................ -- -- -/20,000 -/-
Edwin J. McGuinn, Jr....................... -- -- -/20,000 -/-
Keith F. Pinsoneault(2).................... -- -- -/20,000 -/-
David H. Shulman(2)........................ -- -- 9,600/26,400 -/-
</TABLE>
- ---------------
(1) All options listed in the table were out of the money at December 31, 1995,
based on a closing stock price of $1.75 per share on such date.
(2) No longer employed by the Company. Options have been canceled.
9
<PAGE> 12
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 for 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. Such directors also receive an automatic grant of 7,500 stock
options each year with an exercise price equal to the market price of the
Company's common stock on the date of grant. The options fully vest after a
period of one year and terminate when the grantee ceases to be a director.
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 AND OTHER AGREEMENTS
Mr. Daggs' employment agreement is discussed below in the Compensation
Committee Report on Executive Compensation under the heading "Chief Executive
Officer."
Rodman entered into a three-year employment agreement with Peter 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 received a $650,000 bonus paid in February, 1996. Mr. Boneparth
receives a guaranteed base salary of $200,000 per year. In addition, for 1996
and 1997 he will receive a guaranteed bonus equal to the greater of (i) $650,000
or (ii) 14% of the total pre-tax profit (as defined in the agreement) (the
"Profit Bonus") of Rodman's investment banking group plus 25% of certain
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. In the event that Rodman terminates Mr. Boneparth's employment upon a
sale or change in control of Rodman, Rodman must (i) continue to pay Mr.
Boneparth's salary and any minimum guaranteed bonuses to which he otherwise
would have been entitled through the earlier of March 25, 1998, or the one-year
anniversary of his death, and (ii) pay to Mr. Boneparth any Profit Bonus to
which he otherwise would have been entitled in respect of the portion of the
fiscal year completed prior to the sale or change of control.
Rodman entered into a two-year employment agreement with Edwin J. McGuinn,
Jr. effective April 1, 1995, pursuant to which Mr. McGuinn became Senior
Managing Director of Rodman's institutional equity department. Under the terms
of the agreement, Mr. McGuinn received a $200,000 signing bonus in 1995. Mr.
McGuinn receives a guaranteed base salary of $200,000 per year. In addition, in
February, 1996, he received a bonus of $300,000. By February 14, 1997, he will
be entitled to receive a bonus equal to the greater of (i) $300,000, or (ii) the
sum of 1.5% of certain revenues derived from equity commissions and public
offerings, 10% of the foregoing revenues less direct expenses and certain
allocated expenses (as defined in the agreement), 6% of certain revenues derived
from Rodman's investment banking group less direct expenses and certain
allocated expenses (as defined in the agreement), and 25% of any profit during
the first year of operation from any business group of the Company not in
existence at the time of execution of the agreement and brought into the Company
due to his efforts. Each bonus to which Mr. McGuinn may be entitled for a
partial fiscal year shall be pro rated. In the event that Rodman terminates Mr.
McGuinn's employment upon a sale or change in control of Rodman, Rodman must
continue to pay Mr. McGuinn's base salary and applicable bonuses through the
earlier of April 1, 1997, or the one-year anniversary of his death.
On February 14, 1994, Rodman entered into an employment agreement with
David H. Shulman, pursuant to which Mr. Shulman assumed the position of Managing
Director of the Fixed Income Group of Rodman. Under the agreement, Mr. Shulman
received fixed compensation of $1.3 million per year and was
10
<PAGE> 13
entitled to additional compensation equal to 15% of any net pretax profits of
the Fixed Income Group. The agreement was for a term of three years commencing
February 14, 1994. However, Mr. Shulman resigned from Rodman on January 29,
1996, therefore, Rodman's payment obligations under the contract have
terminated.
On May 14, 1996, the Company entered into an employment agreement with
William C. Dennis pursuant to which Mr. Dennis assumed the position of Chief
Financial Officer of the Company. Under the agreement, Mr. Dennis receives base
salary at the annual rate of $150,000, a $100,000 bonus subject to one year of
employment by the Company, a $150,000 interest-free loan forgivable over three
years subject to continued employment by the Company, and options to purchase
100,000 shares of Common Stock at $2.00 per share.
Effective May 31, 1996, Rodman entered into an agreement with Keith F.
Pinsoneault which provided for, among other things, severance payments in the
aggregate amount of $62,500. Mr. Pinsoneault also agreed to perform consulting
services as required by Rodman during the period ending November 30, 1996 in
consideration of compensation in the aggregate amount of $62,500.
11
<PAGE> 14
STOCKHOLDER RETURN PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
Rodman & Renshaw Capital Group, Standard & Poors 500 And Value Line's Securities
& Brokerage Index
(Performance Results Through 12/31/95)
<TABLE>
<CAPTION>
Rodman & Renshaw Capital Group Standard & Poors 500 Securities & Brokerage
<S> <C> <C> <C> <C>
$400 1990 $100.00 $100.00 $100.00
$350 1991 $117.24 $130.55 $222.71
$300 1992 $148.28 $140.72 $228.48
$250 1993 $200.00 $154.91 $309.06
$200 1994 $107.06 $157.39 $264.75
$150 1995 $ 48.35 $216.42 $364.05
$100
$ 50
$ 0
</TABLE>
Assumes $100 invested at the close of trading 12/90 in Rodman & Renshaw Capital
Group common stock, Standard & Poors 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.
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 Maxon, Merrill Lynch & Co., Morgan Stanley Group, Paine Webber
Group, The Quick & Reilly Group, Raymond James Financial, Salomon Inc. and
Charles Schwab.
12
<PAGE> 15
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 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 12.) Generally, a portion of the
compensation of executive officers hired to head potentially profit-making
operations within the Company is linked to some objective financial measure 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.
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 officer during 1995. In certain cases,
the grid payout was temporarily enhanced as a hiring inducement.
The Compensation Committee is reviewing the compensation arrangements
throughout the Company including a more formal comparison with other companies
in the industry. The current objective of the Committee is to work with
management of the Company to establish, subject to existing contractual
commitments, competitive compensation arrangements which have a significant link
to profitability of the Company as a whole.
CHIEF EXECUTIVE OFFICER
During 1995, 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.
13
<PAGE> 16
Under the terms of his agreement, Mr. Daggs was entitled to receive a base
salary of $300,000 per year. His base salary during the year 1995 totaled
$300,000.
Under the terms of his agreement, Mr. Daggs was 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 were 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 agreement provided that the
performance-based compensation for each of the two twelve-month periods would be
no less than $600,000. Since no bonuses were earned under the agreement, Mr.
Daggs received $600,000 on each of June 30, 1995 and June 30, 1996. 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 became exercisable on June 30, 1996, and the remaining 50%
will be exercisable on June 30, 1997, provided that Mr. Daggs is employed by the
Company on such date. 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 expired by its terms on June 30, 1996. His
present salary remains payable at the rate of $300,000 per year. Consistent with
the objective of the Compensation Committee discussed above, it is anticipated
that any future bonus arrangements for Mr. Daggs will be based upon the
performance of the Company without guaranteed minimum.
POLICY WITH REGARD TO DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Internal Revenue Code Section 162(m) and the 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 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 of Mr. Daggs' previous performance-based compensation and
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
14
<PAGE> 17
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On June 22, 1994, the Company borrowed $10 million from Confia, S.A. During
1995, the Company obtained additional loans from Confia, S.A. in an aggregate
amount of $16.5 million. The Company required the additional loans in order to
continue to conduct its business because its losses were eroding its net
capital. On December 4, 1995, the Company paid all interest due on the loans and
consolidated the principal amounts, totaling $26.5 million, into a single note
due June 3, 1996 and bearing interest at an annual rate of 12%. The loan was
extended at the same interest rate pursuant to a note due December 2, 1996.
The Company entered into a Note Conversion Agreement with Confia, S.A.
dated September 29, 1995 and amended November 10, 1995, pursuant to which
Confia, S.A. has the right to convert all or a portion of the Company's
outstanding indebtedness to equity in the Company. The number of shares of
common stock to be issued upon a conversion would be determined by dividing the
amount of indebtedness to be converted by the book value per share of common
stock as of the end of the Company's most recent fiscal quarter (provided,
however, that if such book value per share were equal to or less than $.09,
which is the par value per share of the common stock, the denominator would be
$.09). Indebtedness is convertible only if the conversion receives stockholder
approval or if the conversion is made in connection with a rights offering to
all stockholders at the same effective per share price for a number of shares
proportional to the number to be issued upon the conversion. Confia, S.A. may
transfer the conversion right to Abaco or another corporation within the Abaco
group of affiliated companies.
In addition, in December 1995, the Company issued to Abaco 50 shares of
non-voting preferred stock at a price per share of $100,000, which shares are
convertible into Company common stock. In a conversion, the $5 million preferred
stock purchase price would be divided by the book value per share of common
stock as of the end of the most recent month to determine the number of shares
of common stock to be issued (provided, however, that if such book value per
share were equal to or less than $.09, which is the par value per share of the
common stock, the denominator would be $.09). The preferred stock is convertible
only in connection with a rights offering to all stockholders at the same
effective per share price for a number of shares proportional to the number to
be issued upon conversion at a price per share equal to such book value per
share or par value, as the case may be. Accordingly, in the event of such a
rights offering, each stockholder would have the opportunity to purchase a
sufficient number of shares at the offering price to maintain his or her
percentage ownership of the Company.
On February 9, 1996, the Company also received a letter from Parent whereby
Parent agreed to continue to unconditionally support the Company and Rodman for
the next year, up to and including March 31, 1997. Such support may include,
with previous receipt of requisite approvals from Mexican governmental
authorities, infusions of capital, conversion of short-term debt to long-term
debt or conversion of short or long-term debt to equity, if required, to
continue to sustain Rodman's operations and allow it to maintain the required
net capital pursuant to the SEC's Uniform Net Capital Rule 15c3-1. To that end,
Parent agreed to provide the Company with a total of $9.5 million in equity
capital in March and April, 1996. On March 29, 1996, it provided $5 million, and
on April 30, 1996, the remaining $4.5 million, through the purchase by Abaco of
50 and 45 additional shares, respectively, of non-voting preferred stock at a
price per share of $100,000. On April 30, 1996, Abaco provided the remaining
$4.5 million through the purchase of 45 additional shares of non-voting
preferred stock at a price per share of $100,000. The terms of such shares are
identical to those of the preferred stock issued in December 1995, as discussed
above. At June 30, 1996, the book value per share of the Company's common stock
was approximately $0.60. Full conversion of the Company's preferred stock held
by Abaco at such price, assuming only Abaco's exercise of its conversions
rights, would entail the issuance of approximately 24 million shares of common
stock. In the event that such conversion were made at a time when the book value
per share of the Company's common stock was less than $0.09, the conversion
would entail the issuance of approximately 260 million shares of common stock.
In the event that the Company's outstanding indebtedness to Confia also were
converted, such conversion would entail the issuance of an additional 44 million
shares of common stock if the book value per share were $0.60 and 295 million
shares of common stock if such book value was less than $0.09 per share.
15
<PAGE> 18
During the fourth quarter of 1995, the Company finalized an equipment
leasing arrangement for approximately $6 million in financing in order to
minimize the impact of its Chicago and New York office relocations on its
liquidity. Confia, S.A. issued a standby letter of credit for the account of the
Company in the amount of $6 million as additional security for the financing. If
the letter of credit were drawn down, the resulting $6 million of indebtedness
that the Company would owe Confia, S.A. would carry the same conversion rights
as the Company's current indebtedness to Confia, S.A. described above.
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 is required to pay annual
rent to the Company in an amount that 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. AIC's total rent for 1995 was $275,312. Its total rent
for 1996 is expected to be $130,080. Under the sublease, AIC also is required to
pay operating expenses and other payments charged to the Company by the landlord
under the Company's lease. The sublease expires on May 31, 1998.
In June 1996 Constructora Maiz Mier, S.A. de C.V., the landlord of Confia,
S.A.'s principal office building in Monterrey, Mexico, entered into a structured
financing transaction pursuant to which bonds were issued by a trust supported
by Confia S.A.'s payment obligations under the office lease. The Chairman of the
Board and the General Manager of the landlord are directors of Abaco, Confia,
S.A. and Parent and said chairman owns approximately 4.8% of the outstanding
capital stock of Parent. Rodman received a placement fee of $440,000 in
connection with such transaction. Pursuant to a prior fee-splitting
understanding between Rodman and Abaco, half of the fee was paid to Abaco
because Abaco had referred the business to Rodman.
Rodman and Abaco currently are holding discussions as to establishing a
commission sharing arrangement for accounts of non-U.S. citizens.
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.
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 or interest-free forgivable
loans which are compensatory in nature and generally granted as an inducement to
accept employment. By their terms, such forgivable loans become repayable only
if the employee does not remain in the employ of the Company for a specified
period. In October 1994, Francis L. Kirby received such a loan in the amount of
$206,496 which has been forgiven by its terms. William C. Dennis also received a
forgivable loan. See "EXECUTIVE COMPENSATION -- Employment and Other
Agreements." 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 counsel 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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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
Company's 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, Francis L. Kirby, a director and executive
officer of the Company, filed one late report during 1995 with respect to one
transaction. Rodrigo Padilla and Ernesto Arechavala, directors of the Company,
each filed one late Form 3 Initial Statement of Beneficial Ownership of
Securities. Edwin J. McGuinn, Jr., a director and executive officer of the
Company, filed one late report during 1996 with respect to one transaction in
1995.
16
<PAGE> 19
STOCKHOLDER PROPOSALS
Any stockholder who wishes to submit a proposal for inclusion in the proxy
materials to be distributed by the Company in connection with its annual meeting
in 1997 must do so no later than April 24, 1997 or such other date as the
Company may determine in accordance with applicable rules of the Securities and
Exchange Commission.
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.
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 September 24, 1996. 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 Annual Report to Stockholders for the year ended December 31, 1995 is
being mailed to the stockholders contemporaneously with this Proxy Statement and
is a part of the proxy solicitation material.
By order of the Board of Directors
Gilbert R. Ott, Jr.
-------------------
Gilbert R. Ott, Jr.
Secretary
Rodman & Renshaw Capital Group, Inc.
233 South Wacker Drive
Chicago, Illinois 60606
August 23, 1996
17
<PAGE> 20
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS OF
RODMAN & RENSHAW CAPITAL GROUP, INC.
SEPTEMBER 24, 1996
THIS PROXY IS SOLICITED ON BEHALF OF
THE RODMAN & RENSHAW CAPITAL GROUP, INC. BOARD OF DIRECTORS
The undersigned hereby appoints Gilbert R. Ott, Jr. and William C.
Dennis, 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 Tuesday, September 24, 1996 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.
<TABLE>
<S> <C> <C>
ITEM 1 -- Election of Directors. / / FOR ALL NOMINEES / / WITHHELD FOR ALL
(except as marked to the contrary below)
</TABLE>
Alexander C. Anderson, Ernesto Arechavala, Peter Boneparth,
Eduardo Camarena Legaspi, Charles W. Daggs, III, William C.
Dennis, Jorge Antonio Garcia Garza, Francis L. Kirby, Jorge
Lankenau Rocha, Edwin J. McGuinn, Jr., Thomas E. Meade, Rodrigo
Padilla, Richard Pigott, Federico Richardson Lamas, David S.
Ruder, Joseph P. Shanahan
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.
- --------------------------------------------------------------------------------
