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
ACORN VENTURE CAPITAL CORPORATION
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(Name Of Registrant As Specified In Its Charter)
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(Name Of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
ACORN VENTURE CAPITAL CORPORATION
7020 A.C. Skinner Parkway
Suite 100
Jacksonville, Florida 32256
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 30, 1996
To the Stockholders:
The Annual Meeting of the Stockholders of ACORN VENTURE CAPITAL
CORPORATION (the "Company") will be held at Club 101, 101 Park
Avenue, Lobby Level, New York, New York, on Monday, December 30,
1996, at 11:00 A.M., local time, for the following purposes:
1. To elect nine directors to hold office until the next
Annual Meeting of Stockholders and until their respective
successors have been duly elected and qualified;
2. The ratification of the firm of Coopers & Lybrand
L.L.P. as the independent public accountants of the Company
for the 1996 fiscal year; and
3. To transact such other business as may properly come
before the meeting or any adjournment(s) thereof.
The Board of Directors has fixed the close of business on
November 25, 1996, as the record date for the determination of
stockholders entitled to notice of, and to vote at, the Annual
Meeting of Stockholders (the "Meeting"). Only stockholders of
record at the close of business on this date will be entitled to
notice of, and to vote at, the Meeting or any adjournment thereof.
By Order of the Board of Directors
STEPHEN A. OLLENDORFF
Secretary
November 26, 1996
YOU ARE URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE POSTAGE PREPAID ENVELOPE WHICH HAS
BEEN PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN
PERSON. THE PROXY MAY BE REVOKED BY YOU AT ANY TIME PRIOR TO
EXERCISE, AND IF YOU ARE PRESENT AT THE MEETING YOU MAY, IF YOU
WISH, REVOKE YOUR PROXY AT THAT TIME AND EXERCISE YOUR RIGHT TO
VOTE YOUR SHARES PERSONALLY.
<PAGE>
PROXY STATEMENT
ACORN VENTURE CAPITAL CORPORATION
7020 A.C. Skinner Parkway
Suite 100
Jacksonville, Florida 32256
Annual Meeting of Stockholders
To Be Held December 30, 1996
GENERAL INFORMATION
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Acorn Venture
Capital Corporation (the "Company") for use at the Annual Meeting
of Stockholders to be held at Club 101, 101 Park Avenue, Lobby
Level, New York, New York, on Monday, December 30, 1996, at 11:00
A.M., local time, and at any adjournment(s) thereof (the "Meeting")
for the purposes set forth in the accompanying Notice of Meeting of
Stockholders.
The principal executive offices of the Company are located at
7020 A.C. Skinner Parkway, Suite 100, Jacksonville, Florida
(telephone no. 904-359-8624 and after December 12, 1996, 904-296-
1760). The enclosed proxy and this proxy statement are being
transmitted to stockholders of the Company on or about November 27,
1996.
Solicitation and Revocation
- ---------------------------
Proxies in the form enclosed are solicited by, or on behalf
of, the Board of Directors. The persons named in the proxy have
been designated as proxies by the Board of Directors. If a quorum,
consisting of the holders of a majority of the outstanding common
stock, of the Company is present at the Meeting in person or by
proxy, the election of each nominee for director requires the
affirmative vote of a plurality of the votes cast at the Meeting
and entitled to vote thereon, and the approval of all other matters
to come properly before the meeting requires the affirmative vote
of holders of a majority of the shares present at the Meeting and
entitled to vote thereon. Abstentions and broker non-votes (i.e.
shares held by a broker or nominee which are represented at the
Meeting, but with respect to which such broker or nominee is not
empowered to vote on a particular proposal) will be included in
determining the existence of a quorum. Abstentions and broker non-
votes will not be counted in tabulations of the votes cast on
proposals. Thus, neither abstentions nor broker non-votes will
have an effect on the outcome of the election of the nominees for
directors, which requires only that a plurality of the votes cast
be in favor of each nominee, or of the ratification of the
selection of independent accountants, which requires only a
majority of the votes cast at the Meeting in favor of such
proposal.
Shares represented by properly executed proxies received by
the Company will be voted at the Meeting in the manner specified
therein or, if no specification is made, will be voted "FOR" the
election of all of the nominees for directors named herein, and
"FOR" the ratification of the firm of Coopers & Lybrand L.L.P. as
the independent public accountants for the 1996 fiscal year. In
the unanticipated event that any other matters are properly
presented at the Meeting for action, the persons named in the proxy
will vote the proxies (which confer authority upon them to vote on
any such matters) in accordance with their best judgment.
Any proxy given pursuant to this solicitation may be revoked
by the stockholder at any time before it is exercised by written
notification delivered to Messrs. Edward N. Epstein and/or Stephen
A. Ollendorff, c/o of the Company, by voting in person at the
Meeting, or by executing another proxy bearing a later date.
Attendance by a stockholder at the Meeting does not alone serve to
revoke his or her proxy.
The solicitation of proxies will be made by mail and, in
addition, may be made by directors, officers and regular employees
of the Company, personally or by telephone or telegraph, without
extra compensation. Brokers, nominees and fiduciaries will be
reimbursed for their out-of-pocket and clerical expenses in
transmitting proxies and related material to beneficial owners.
The costs of soliciting proxies will be borne by the Company. It is
estimated that said costs will be nominal.
Annual Report
- -------------
The Company's Annual Report for the fiscal year ended December
31, 1995, which contains audited financial statements, and the
Company's Quarterly Reports for the quarters ended March 31, June
30 and September 30, 1996, are being mailed with this Proxy
Statement, to all persons who were stockholders of record as of the
close of business on November 25, 1996.
Voting
- ------
The Board of Directors has fixed the close of business on
November 25, 1996, as the record date for the determination of
stockholders of the Company who are entitled to receive notice of,
and to vote at, the Meeting. At the close of business on that
date, an aggregate of 5,538,906 shares of Common Stock, par value
$.01 (the "Common Stock"), were issued and outstanding, each of
which is entitled to one vote on each matter to be voted upon at
the Meeting. The Company has no other class of voting securities
entitled to vote at the Meeting and does not have cumulative voting
rights.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of the close of business on
November 1, 1996, information as to the stockholder (other than
members of the Company's management), which is known by the Company
to beneficially own more than 5% of its outstanding Common Stock
(based solely upon filings by said entity with the Securities and
Exchange Commission on Schedule 13D of the Securities Exchange Act
of 1934 (the "1934 Act")):
<TABLE>
<CAPTION>
No. of Shares
Name and Address Beneficially Percentage
of Beneficial Owner Owned(1) of Class
- -------------------- ------------- ----------
<S> <C> <C>
Asset Value Fund 1,104,000 19.93%
Limited Partnership
376 Main Street
P.O. Box 74
Bedminster, NJ 07921
_______________
(1) Beneficial ownership, as reported in the above table, has been
determined in accordance with Rule 13d-3 under the 1934 Act.
Unless otherwise indicated, beneficial ownership includes both
sole voting and sole dispositive power. The above information
is based solely on information contained in a Schedule 13D
(including amendments thereto) filed by such entity.
</TABLE>
Ownership by Management
- -----------------------
The following table sets forth, as of November 1, 1996, the
beneficial ownership of the Common Stock of the Company by (i) each
director and nominee for election as a director of the Company
(including the two Named Executives, as defined below) of the
Company, and (ii) all directors and executive officers of the
Company as a group (based upon information furnished by such per-
sons). Under the rules of the Commission, a person is deemed to be
a beneficial owner of a security if he has or shares the power to
vote or direct the voting of such security or the power to dispose
or direct the disposition of such security. Accordingly, more than
one person may be deemed to be a beneficial owner of the same
securities. A person is also deemed to be a beneficial owner of
any securities of which that person has the right to acquire
beneficial ownership within 60 days.
<TABLE>
<CAPTION>
No. of Shares
Name and Address Beneficially Percentage
of Beneficial Owner(1) Owned(2) of Class
- ---------------------- ------------- ----------
<S> <C> <C>
Bert Sager.............. 351,500(3)(4) 6.2%
Stephen A. Ollendorff... 1,471,346 25.3%
(4)(5)(6)
Edward N. Epstein....... 957,500(4)(5)(7) 16.8%
Paula Berliner.......... 195,800(4)(8) 3.5%
Mark Auerbach........... - -
Ronald J. Manganiello... 157,300(9) 2.8%
Paul C. Meyer........... 17,330 *
Joel J. Silver.......... 3,000 *
J. Earl Templeton....... 2,000 *
Kenneth I. Sawyer....... - -
All directors and executive
officers as a group
(12 persons)........... 2,385,557(4) 38.0%
___________
* Less than 1%.
(1) The business address for purposes hereof of all of the
Company's directors and executive officers is in care of the
Company.
(2) Unless otherwise noted, the Company believes that all persons
in the table have sole voting and dispositive power with
respect to all shares of Common Stock beneficially owned by
them.
(3) Does not include 76,825 shares owned by Marilyn Sager, his
wife, with respect to which he disclaims beneficial ownership.
(4) Includes the following shares that may be acquired upon the
exercise of options within 60 days of November 1, 1996: Mr.
Sager - 160,000; Mr. Ollendorff - 280,000; Mr. Epstein -
150,000; Ms. Berliner - 70,000; and all directors and
executive officers as a group (12 persons) - 750,000.
(5) Stephen A. Ollendorff has entered into an Irrevocable Proxy
and Voting Agreement With Respect to Election of Directors,
dated December 19, 1995, with Edward N. Epstein, with respect
to the 957,500 shares of Common Stock beneficially owned by
Mr. Epstein. Accordingly, Mr. Ollendorff's beneficial
ownership includes such shares. Other than as set forth, Mr.
Ollendorff disclaims beneficial ownership of such shares. See
"Certain Relationships and Related Transactions."
(6) Includes 1,000 shares owned of record by Bjorg Ollendorff, his
wife.
(7) Includes 7,500 shares owned by Mr. Epstein as Trustee for his
minor child.
(8) Includes 27,500 shares owned of record by Warren Berliner, her
husband.
(9) Includes 22,300 shares owned of record by Lisa Manganiello,
his wife.
</TABLE>
PROPOSAL I: ELECTION OF NINE DIRECTORS
The entire Board of Directors is to be elected at the Meeting.
The Company's By-laws provide that the number of directors
comprising the Board of Directors shall be at least one, such
number as fixed by resolution of the Board of Directors. The
number of directors, which is presently ten, has been set at nine
persons, effective upon the completion of the Meeting and any
adjournment(s) thereof. The nine persons listed below, all of whom
have consented to being named in this Proxy Statement and to
serving if elected, have been nominated to serve as directors of
the Company until the 1997 annual meeting of stockholders to be
held and until their respective successors have been duly elected
and qualified. All of the nominees are currently directors of the
Company, and each, with the exception of Edward N. Epstein, Mark
Auerbach and Ronald J. Manganiello, was elected by the stockholders
at the last annual meeting of stockholders. Mr. Epstein was
elected to the Board on February 20, 1995 and Messrs. Auerbach and
Manganiello were elected to the Board on November 19, 1995. J.
Earl Templeton has declined to stand for reelection as a member of
the Board of Directors.
Proxies in the accompanying form will be voted at the Meeting in
favor of the election of each of the nominees listed on the
accompanying form of proxy, unless authority to do so is withheld
as to an individual nominee or nominees or all nominees as a group.
Proxies cannot be voted for a greater number of persons than the
number of nominees named. In the unexpected event that any of such
nominees should become unable to or for good cause will not serve,
the persons named in the accompanying proxy may vote with
discretionary authority to vote for the election of substitute
management nominees. Directors will be elected by a plurality of
the votes cast by the holders of shares entitled to vote thereon
who are present at the Meeting in person or by proxy.
Set forth below is certain information with respect to each
nominee for election as a director of the Company at the Meeting:
<TABLE>
<CAPTION>
Year of Principal Occupations During
First Past Five Years;
Name and Age Election Other Directorships
- ------------ -------- ----------------------------
<S> <C> <C>
Bert Sager* 1983 Co-Chairman of the Board of the Company
(71) (1)(2) since November 1995 and Chairman from
June 1989 to November 1995; from
inception until November 1995, Presi-
dent; for more than the past five
years, a practicing attorney; director
of Computer Products, Inc. a
manufacturer of standardized electronic
products, and Windmere Corporation a
manufacturer of personal care products.
Stephen A.
Ollendorff*
(58) (1)(2) 1983 Chief Executive Officer since September
1992, and Chairman of the Board since
November 1995; President of the Company
from June 1989 until November 1995 and
Vice President from inception until his
election as President; Of Counsel to
the law firm of Hertzog, Calamari &
Gleason since December 1990. Director
of Computer Products, Inc.
Edward N. 1995 President and Chief Operating Officer
Epstein* of the Company since November 1995.
(56) (1)(2) for more than the past five years, a
principal of Edward N. Epstein &
Assoc., a consulting firm specializing
in corporate structure and management;
since January 1996, a principal in the
merchant banking firm of New Canaan
Capital LLC; since July 1996, a
principal of Sylhan LLC, an integrated
contract manufacturer specializing in
the precision machining of refractory
metal parts.
Paula Berliner* 1992 Vice President of the Company since
(49) (1)(2) June 1992; since May 1990, private
investor; director of the Family Bank
of Hallandale, located in Florida.
Mark Auerbach 1995 Since June 1993, the Senior Vice
(57) (1)((3)(4) President and Chief Financial Officer
of Central Lewmar L.P., a distributor
of fine papers; from August 1992 to
June 1993, a partner of Marron Capital
L.P., an investment banking firm; from
July 1990 to August 1992, he was
President, Chief Executive Officer and
Director of Implant Technology Inc., a
manufacturer of artificial hips and
knees; director of Pharmaceutical
Resources, Inc. (NYSE) ("PRI"), a
manufacturer of generic drugs, and a
director and Chairman of the Board of
Oakhurst Company, Inc., a publicly-
traded holding company, whose
subsidiaries operate automotive after-
market distributors.
Ronald J. 1995 Since January 1996, a principal in the
Manganiello merchant banking firm of New Canaan
(47) (3) Capital LLC; since July 1996, a
principal of Sylhan LLC, an integrated
contract manufacturer specializing in
the precision machining of refractory
metal parts; from 1986 to January 1996,
Mr. Manganiello was Chairman and Chief
Executive Officer of Hanger Orthopedic
Group, Inc., a publicly-traded provider
of patient care services and products
for orthotic and prosthetic
rehabilitation; director of Hanger
Orthopedic Group, Inc.
Paul C. Meyer 1990 Since October 1996, Senior Vice
(47) (3) President and Chief Operating Officer
of PlayNet Technologies, Inc., a
developer and manufacturer of location-
based, pay-per-play, tournament games
and entertainment products; from
January 1994 to October 1996, held
various executive positions at Viacom
New Media, a publisher and distributor
of multimedia products and a Division
of Viacom International, Inc.; from
October 1991 through January 1994,
President of Paul C. Meyer & Inc., a
financial consulting firm specializing
in financial and operational
restructuring of companies; from
February 1990 until December 1991,
President of Superior Toy &
Manufacturing Company.
Kenneth I. Sawyer 1992 For more than the past five years,
(50) (2) Chairman of the Board, President and
Chief Executive Officer of PRI.
Joel J. Silver 1983 Since December 1994, President,
(60) (4) Chief Executive Officer and a director
of International Cutlery, Ltd., a
publicly-traded specialty gift store
operation; co-founded CW Acquisitions,
Inc., in 1990 and served from its
inception as a director and until 1993,
as senior executive vice president. In
June 1993, appointed CW Acquisition,
Inc.'s co-chairman, president and chief
executive officer; a director,
president, treasurer and secretary of
Hoffritz Holding Company, Inc. and a
director and senior executive vice
president of each of Hoffritz For
Cutlery, Inc. and Edwin Jay, Inc.,
which positions he held for
approximately 19 years. In August
1994, certain creditors of CW
Acquisitions, Inc. and the three
Hoffritz entities filed involuntary
petitions in the Court pursuant to
Chapter 11 of the U.S. Bankruptcy Code,
which petitions on September 28, 1994,
placed the companies into Chapter 11
reorganization proceedings. The
bankruptcy proceeding was dismissed on
March 22, 1996. Director of Claire's
Stores, Inc., a New York Stock Exchange
listed company, located in Pembroke
Pines, Florida.
__________
* Indicates "Interested Person" of the Company within
the meaning of the Investment Company Act of 1940.
(1) Member of the Executive Committee
(2) Member of the Nominating Committee
(3) Member of the Audit Committee
(4) Member of the Stock Option and Compensation Committee.
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
ELECTION OF THE NINE NOMINEES NAMED ABOVE AS DIRECTORS OF THE
COMPANY.
Board of Directors; Committees of the Board
- -------------------------------------------
The Board of Directors met five times during fiscal 1995 and
six times during fiscal 1996. During fiscal 1995, no director
attended fewer than 75% of the total number of meetings of the
Board and of the committees of the Board on which he served, except
as follows: Mr. Epstein attended 50% of the meetings held in fiscal
1995 during the time he was a director; Mr. Sawyer attended 60% of
meetings of the Board during fiscal 1995 and 70% of the meetings
during fiscal 1996; Mrs. Berliner attended 67% of the meetings
during fiscal 1996.
The Board has established four standing committees, which
consist of the Executive Committee, Audit Committee, Stock Option
and Compensation Committee and the Nominating Committee. The
current functions of such committees are as follows:
The Audit Committee, which was established in November 1995,
did not hold any meetings during fiscal 1995, but held one meeting
during fiscal 1996 and acted once by unanimous consent. The Audit
Committee reviews the internal and external audit functions of the
Company and makes recommendations to the Board of Directors with
respect thereto. It also has primary responsibility for the
formulation and development of the auditing policies and procedures
of the Company and for making recommendations to the Board of
Directors with respect to the selection of the Company's
independent auditing firm. The Chairman of this committee is Mark
Auerbach.
The Stock Option and Compensation Committee held two meetings
during fiscal 1995, but has not held any meetings during fiscal
1996. This Committee has primary responsibility for the ad-
ministration of the Company's 1991 Stock Option Plan, including
responsibility for the granting of options thereunder. The
Committee is also responsible for establishing the overall
philosophy of the Company's executive compensation program and
overseeing the Company's compensation strategy. The Chairman of
this Committee is Mark Auerbach.
The function of the Executive Committee, which was established
in November 1995 (which did not hold any meetings during fiscal
1995 or fiscal 1996), is to exercise the powers of the Board of
Directors in the management of the business and affairs of the
Company, subject to limits imposed by applicable law. The Chairman
of this Committee is Stephen A. Ollendorff.
The Nominating Committee did not hold any meetings during
fiscal 1995, but held one meeting during fiscal 1996. This
Committee recommends nominees to fill vacancies of the Board and
the slate of directors to be submitted to stockholders at the
annual meeting. The Nominating Committee will consider responsible
recommendations by the Company's stockholders of candidates to be
nominated as directors of the Company. All such recommendations
must be in writing and addressed to the Secretary of the Company.
By accepting a stockholder recommendation for consideration, the
Nominating Committee does not undertake to adopt or take any other
action concerning the recommendation or to give the proponent its
reasons for any action or failure to act. The Chairman of this
Committee is Stephen A. Ollendorff.
Compensation of Directors
- -------------------------
Effective December 1993, directors who are not executive
officers of the Company are compensated for their services by
payment of an annual retainer of $4,000, $500 for each Board
meeting attended in person by such director (excluding the four
regular quarterly Board meetings) and $250 for each committee
meeting attended in person by such director.
Paul C. Meyer, a director of the Company, reviews, on behalf
of the Board, the financial and operational viability of potential
portfolio companies at an annual compensation of $10,000, subject
to cost-of-living adjustments.
Certain Relationships and Related Transactions
- ----------------------------------------------
Mr. Ollendorff, Chief Executive Officer of the Company, is of
counsel to Hertzog, Calamari & Gleason, general counsel to the
Company. Mr. Ollendorff has entered into an Irrevocable Proxy and
Voting Agreement With Respect to Election of Directors (the
"Proxy"), with Edward N. Epstein, with respect to the 957,500
shares of Common Stock beneficially owned by Mr. Epstein (the
"Stock"), commencing on December 19, 1995 and terminating on
December 31 of such year in which either party shall have given the
other party at least twelve (12) months' written notice thereof
prior to December 31 of such year; provided, that, notwithstanding
the foregoing the Proxy shall remain in full force and effect until
at least December 31, 1998. If any shares of the Stock covered by
the Proxy are sold to any other party, the Proxy as it relates to
such shares of Stock shall terminate immediately upon such sale.
Pursuant to the Proxy Mr. Ollendorff undertakes to vote the Stock,
as well as use his best efforts (including voting shares of stock
of the Company owned by him) for the election of the greater of (i)
two (2) directors or (ii) a number of directors equal to 22%
(rounded up to the next highest number) of the entire Board of
Directors, acceptable to Mr. Epstein.
Executive Officers
- ------------------
The executive officers of the Company consist of Mr.
Ollendorff as Chairman of the Board, Chief Executive Officer and
Secretary, Bert Sager as Co-Chairman of the Board, Mr. Epstein, as
President and Chief Operating Officer, Mrs. Berliner, as Vice
President, Larry V. Unterbrink as Treasurer, and Orland M. Wolford,
as Vice President.
The following table sets forth certain information with
respect to the executive officers of the Company who are not
directors or nominees for election as a director:
Name Age
- ---- ---
Larry V. Unterbrink.......................... 62
Treasurer of the Company since February
1990; private investor residing in Florida.
From May 1982 to December 1994, President
and Treasurer of Seahorse Ltd., a leasing
and publishing company.
Orland M. Wolford............................ 49
Vice President of the Company since
October 1994. For more than the past
five years, President and Chief Executive
Officer of Automotive Industries, Inc.
("Automotive"), a wholly-owned subsidiary
of the Company.
EXECUTIVE COMPENSATION
Summary Compensation Table
- --------------------------
The following table sets forth information for the fiscal
years ended December 31, 1995, December 31, 1994 and December 31,
1993, respectively, respecting compensation earned by the Chief
Executive Officer of the Company and the only other executive
officer (whose salary and bonus earned in Fiscal 1995 exceeded
$100,000) of the Company serving at the end of Fiscal 1995 (the
"Named Executives").
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Securities
Name and Principal Underlying
Position Year Salary($) Bonus($) Options(#)(1)
- ------------------ ---- ----------- -------- -------------
<S> <C> <C> <C> <C>
Stephen A. Ollendorff 1995 $250,000(2) - -
Chairman and Chief 1994 250,000(2) - -
Executive Officer 1993 162,796(3) - 260,000
Edward N. Epstein 1995 $122,500(4) $30,000 150,000
President and
Chief Operating
Officer
- -------------
(1) Represents options awarded under the 1991 Stock Option
Plan.
(2) Mr. Ollendorff has voluntarily assumed responsibility for
rent and secretarial expenses relating to the New York
office. Mr. Ollendorff does not receive any fringe
benefits from the Company.
(3) Does not include approximately $25,000 paid to Mr.
Ollendorff in the 1993 fiscal year by ServiceMax Tire &
Auto Centers, Inc., a wholly-owned subsidiary of the
Company.
(4) This amount was paid to Mr. Epstein pursuant to his consulting
arrangement with the Company.
</TABLE>
The Company does not have any annuity, retirement,
pension, deferred or incentive compensation plan or
arrangement under which any executive officers are entitled to
benefits, nor does the Company have any long-term incentive
plan pursuant to which performance units or other forms of
compensation are paid. Executives who qualify are permitted
to participate in the Company's 1991 Stock Option Plan.
Stock Option Grants In Last Fiscal Year
- ---------------------------------------
The following table sets forth information concerning
stock options granted to the Named Executives during the
fiscal year ended December 31, 1995:
<TABLE>
<CAPTION>
No. of Percentage of
Securities Total Options
Underlying Granted to Exercise
Options Employees in Price Per Expiration
Name Granted(#) Fiscal Year(%) Share($) Date
- ---- ---------- -------------- --------- ----------
<S> <C> <C> <C> <C>
Stephen A. (1) - - -
Ollendorff
Edward N. 150,000 100 .875 11/23/05
Epstein
_____________
(1) On November 19, 1995, Mr. Ollendorff surrendered an aggregate of
40,000 stock options previously granted to him in prior years in
order to enable the Company to grant options to another executive.
</TABLE>
On November 22, 1994, the Stock Option and Compensation
Committee authorized the amendment to the Company's outstanding
stock options in order to deter a hostile takeover, whereby each
optionee would be given the opportunity to exercise his/her options
at the exercise price of $.5625 (equal to the "fair market value"
of the Company's common stock on November 22, 1994), in the event
of a "change of control." A "change of control" would occur in
the following circumstances: (i) the first purchase of shares of
equity securities of the Company pursuant to a tender offer or
exchange offer (other than an offer by the Company) for 25% or more
of the equity securities of the Company, which offer has not been
approved by the Board of the Company, (ii) a single purchaser or a
group of associated purchasers acquiring, without the approval or
consent of the Board of the Company, securities of the Company
representing 25% or more of the combined voting power of the
Company's then outstanding securities in one or a related series of
transactions, or (iii) in respect of an election of directors by
the Company's stockholders, the election of any or all of the
management's slate of directors being contested or opposed, whether
through a solicitation of proxies, or otherwise. As of November
25, 1996, no such "change of control" has occurred.
On November 7, 1996, the Board of Directors authorized the
Company to loan moneys to officers and employees of the Company in
order to encourage them to exercise their stock options. The term
of such loans would be for the shorter of ten years or 60 days
after termination of employment of the officer or employee,
interest would accrue and be payable monthly on the principal, at
the prevailing rate applicable to 90-day treasury bills at the time
the loan is made, and the loan would be collateralized at all
times, which collateral (subject to applicable law) may include
shares of the Company. The loans must be collateralized so that
the fair market value of the collateral would have to equal or
exceed the principal outstanding amount of the loan at all times.
As of November 25, 1996, no such loans to officers or employees
have been made by the Company.
Year-End Option Values Table
- ----------------------------
The following table sets forth information at December 31, 1995
respecting exercisable and non-exercisable options held by the
Named Executives. During Fiscal 1995, the Named Executives did not
exercise any stock options. The table also includes the value of
"in-the-money" stock options which represents the spread between
the exercise prices of the existing stock options and the year-end
price of the Common Stock.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-
Options Held the-Money Options
at December 31, 1995(1) Held at December 31, 1995(1)
------------------------ -----------------------------
Not Not
Name Exercisable Exercisable Exercisable Exercisable
- ---- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Stephen A.
Ollendorff 280,000(2) -0- $-0- $-0-
Edward N.
Epstein 50,000 100,000(3) $ 6,250 $12,500
________________
(1) Based upon the closing sales price of the Common Stock
on December 31, 1995 ($1.00).
(2) On November 19, 1995, Mr. Ollendorff surrendered an aggregate of 40,000
stock options previously granted to him in order to enable the Company
to grant options to another executive.
(3) These shares become exercisable on February 15, 1996.
</TABLE>
Employment Arrangements
- -----------------------
The Company entered into an employment agreement with Stephen
A. Ollendorff, effective December 15, 1993, for a minimum period of
three years, which has been renewed by its terms, pursuant to which
Mr. Ollendorff receives annual compensation of $250,000, subject to
cost-of-living adjustments, from the Company, but receives no
additional amounts from any portfolio companies or subsidiaries of
the Company. On January 17, 1996, Mr. Ollendorff's employment
agreement was amended in order to clarify certain terms and
conditions, including the geographic location in which services are
provided, events of termination and his obligations with respect to
confidential information, non-solicitation of employees and
covenants not to compete. Mr. Ollendorff agrees to devote such
time to the business and affairs of the Company as he believes is
necessary for the operations of the Company. In addition, Mr.
Ollendorff has voluntarily assumed responsibility for rent and
secretarial expenses relating to the Company's New York office.
Mr. Ollendorff receives no fringe benefits from the Company.
The Company entered into an employment agreement with Edward
N. Epstein, effective January 1, 1996, for a three year period, for
an annual compensation of $150,000, subject to cost-of-living
adjustments. Mr. Epstein will devote such time to the business and
affairs of the Company as he believes is necessary for the
operations of the Company. Prior to the execution of the foregoing
employment agreement, Mr. Epstein had been retained as a consultant
to the Company, at the annual compensation of $120,000, and was
primarily devoted to reviewing the sales and marketing efforts of
Automotive and ServiceMax Tire & Auto Centers, Inc.
In addition, effective October 31, 1991, the Company entered
into the employment agreements, for a minimum three year period,
which have been renewed by their terms, with the following
officers. These agreements were amended in January 1996 to clarify
certain terms and conditions, including the geographic location in
which services are provided, events of termination and obligations
with respect to confidential information, non-solicitation of
employees and covenants not to compete.
Bert Sager--$20,000 per year, subject to cost-of-living
adjustments, to devote such time to the business and affairs of the
Company as he deems necessary to fulfill his obligations as
Chairman of the Board.
Larry V. Unterbrink--$20,000 per year, subject to cost-of-
living adjustments, to devote such time to the business and affairs
of the Company as he deems necessary to fulfill his obligations as
Treasurer.
Paula Berliner, Vice President of the Company since June 1992
and a director of the Company since September 1992, reviews, on
behalf of the Board, the financial and operational viability of
potential portfolio companies at an annual compensation of
approximately $22,300, subject to cost-of-living adjustments.
PROPOSAL II: RATIFICATION OF SELECTION
OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Coopers & Lybrand L.L.P.
("C&L"), independent accountants, to audit the books, records and
accounts of the Company for the fiscal year ending December 31,
1996. In accordance with a resolution of the Board of Directors,
this selection is being presented to the stockholders for
ratification at the Meeting. The firm of C&L has acted in such
capacity for the Company since the fiscal year ended December 31,
1995, has offices convenient to the Company, and is considered to
be well qualified. If the stockholders do not ratify the selection
of C&L, the selection of independent accountants will be recon-
sidered by the Board of Directors. It is not anticipated that
representatives of C&L will attend the Meeting.
Prior to the 1995 fiscal year, the Company retained the
accounting firm of Ernst & Young LLP ("E&Y") as its independent
public accountants for more than the past two fiscal years. As a
result of the Company advising E&Y that the Company may be
asserting certain claims with respect to the performance of E&Y's
duties as auditor of one of the Company's portfolio companies, E&Y,
by letter dated December 28, 1995 (and received on January 2,
1996), resigned, stating that under applicable professional
standards, it was no longer independent with respect to the
Company. Pursuant to a recommendation of the Company's Audit
Committee, the Board on January 2, 1996, selected and retained the
firm of C&L to act as its independent accountants for the 1995
fiscal year. For the 1994 and 1993 fiscal years, E&Y's reports on
the Company's financial statements for such fiscal years did not
contain an adverse opinion or a disclaimer of opinion nor were they
qualified or modified as to uncertainty, audit scope or accounting
principles. However, there was an explanatory paragraph in each
report relating to the valuation of investments being based on the
best estimate of the Board in the absence of readily ascertainable
market value. In connection with the audits of the Company's
financial statements for each of the two fiscal years ended as of
December 31, 1994, and in the subsequent interim period, there were
no disagreements with E&Y on any matters of accounting principles
or practices, financial statement disclosure or auditing scope or
procedure, which if not resolved to the satisfaction of E&Y would
have caused E&Y to make reference to the matter in their report on
the Company's financial statements for such periods. E&Y has
previously stated in connection with filings with the Commission
that it agrees with the statements contained in this paragraph.
The affirmative vote of a majority of the votes cast by the
holders of shares entitled to vote thereon who are present at the
Meeting, in person or by proxy, is required for the ratification of
selection of independent accountants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF
PROPOSAL II.
OTHER MATTERS
As of the date of this proxy, the Board has no knowledge of
any business which will be presented for consideration at the
Meeting, other than as described above. If any other matter or
matters are properly brought before the Meeting or any
adjournment(s) thereof, pursuant to the Company's By-laws, it is
the intention of the persons named in the accompanying form of
proxy to vote proxies in accordance with their best judgment.
Pursuant to the Company's By-laws, for business to be properly
brought before this Meeting, a stockholder must have given timely
notice thereof on or before November 21, 1996.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any proposal which is intended to be presented by any
stockholder for action at the 1997 Annual Meeting of Stockholders
must be received in writing by the Secretary of the Company at 7020
A.C. Skinner Parkway, Suite 100, Jacksonville, Florida 32256, not
later than November 1, 1997 no earlier than October 2, 1997 in
order for such proposal to be considered for inclusion in the Proxy
Statement and Proxy relating to the 1997 Annual Meeting of
Stockholders. If the date of the next Annual Meeting is changed,
the Company will inform stockholders in a timely manner of the
change and date by which stockholder proposals must be received.
In addition, for a stockholder to present a matter at an Annual
Meeting of the Company, such stockholder must provide prior timely
notice to the Company setting forth certain information, including
a brief description of the matter proposed to be brought before the
meeting. Generally, such notice must be delivered to the Company
not later than 60 days or earlier than 90 days prior to the first
anniversary of the preceding year's Annual Meeting.
By Order of the Board of Directors
STEPHEN A. OLLENDORFF
Secretary
Dated: November 26, 1996
<PAGE>
ACORN VENTURE CAPITAL CORPORATION
Proxy for Annual Meeting of Stockholders
to be Held December 30, 1996
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS
The undersigned stockholder(s) of ACORN VENTURE CAPITAL
CORPORATION, a Delaware corporation (the "Company"), hereby
constitutes and appoints EDWARD N. EPSTEIN and STEPHEN A.
OLLENDORFF, and each of them, with full power of substitution in
each, as the agent, attorneys and proxies of the undersigned, for
and in the name, place and stead of the undersigned, to vote at the
Annual Meeting of Stockholders of the Company to be held at Club
101, 101 Park Avenue, Lobby Level, New York, New York 10017 on
December 30, 1996, at 11:00 A.M. (local time), and any adjournments
thereof, all of the shares of stock which the undersigned would be
entitled to vote if then personally present in the manner specified
and on any other business as may properly come before the meeting.
This Proxy will be voted in accordance with the instructions
given. If no instructions are given, this Proxy will be voted
"FOR" Proposals 1 and 2.
Please mark boxes /__/ or x in blue or black ink.
1. ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY to
(except as marked to the vote for all nominees
contrary below) /__/ listed below /__/
Mark Auerbach, Paula Berliner, Edward N. Epstein
Ronald J. Manganiello, Paul C. Meyer, Stephen A. Ollendorff
Bert Sager, Kenneth I. Sawyer, Joel J. Silver
(Instruction: To withhold authority to vote for any individual
nominee write the nominee's name in the space below):
______________________________________________________
(Continued and to be signed on the reverse side.)
<PAGE>
2. RATIFICATION OF THE SELECTION OF THE FIRM OF
COOPERS & LYBRAND L.L.P. AS THE INDEPENDENT PUBLIC
ACCOUNTANTS OF THE COMPANY FOR THE 1996 FISCAL YEAR
FOR /____/ AGAINST /____/ ABSTAIN /____/
In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting or
any adjournment thereof and as set forth in Rule 14a-4(c) of
the Securities Exchange Act.
Please sign exactly as name appears above. When
shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in full
corporate name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
Dated________________________, 1996
___________________________________
Signature
___________________________________
Signature if held jointly
Title______________________________
