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 HOLDING CORP.
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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):
[X] 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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[ ] 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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<PAGE>
ACORN HOLDING CORP.
(formerly ACORN VENTURE CAPITAL CORPORATION)
100 Park Avenue
23rd Floor
New York, New York 10017
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 30, 1997
To the Stockholders:
The Annual Meeting of the Stockholders of ACORN HOLDING CORP.
(formerly ACORN VENTURE CAPITAL CORPORATION) (the "Company") will
be held at Club 101, 101 Park Avenue, Lobby Level, New York, New
York, on Tuesday, December 30, 1997, at 11:00 A.M., local time, for
the following purposes:
1. To elect seven directors to hold office until the
next Annual Meeting of Stockholders and until their respective
successors have been duly elected and qualified;
2. To ratify the selection of the firm of Grant Thornton
LLP as the independent public accountants of the Company for
the 1997 fiscal year; and
2. 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 14, 1997, 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 17, 1997
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 HOLDING CORP.
(formerly ACORN VENTURE CAPITAL CORPORATION)
100 Park Avenue
23rd Floor
New York, New York 10017
Annual Meeting of Stockholders
To Be Held December 30, 1997
GENERAL INFORMATION
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Acorn Holding
Corp. (formerly Acorn Venture Capital Corporation) (the "Company")
for use at the 1997 Annual Meeting of Stockholders (the "Meeting")
to be held at Club 101, 101 Park Avenue, Lobby Level, New York, New
York, on Tuesday, December 30, 1997, at 11:00 A.M., local time, and
at any adjournment(s) thereof for the purposes set forth in the
accompanying Notice of Meeting of Stockholders.
The principal executive offices of the Company are located at
100 Park Avenue, 23rd Floor, New York, New York 10017 (telephone
no. 212-685-5654). The enclosed proxy and this proxy statement are
being transmitted to stockholders of the Company on or about
November 19, 1997.
Voting Securities; Solicitation and Revocation
The Company's Board of Directors has fixed the close of
business on November 14, 1997, 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, 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 securities entitled
to vote at the Meeting.
Proxies in the form enclosed are being solicited by, or on
behalf of, the Board of Directors. The persons named in the proxy
have been designated as proxies in respect of the Meeting by the
Company's Board of Directors (the "Board"). Pursuant to Delaware
corporate law and the Company's By-laws, the holders of a majority
of the outstanding shares of Common Stock must be present in person
or represented by proxy for a quorum to exist at the Meeting. If
a quorum is present at the Meeting, the nominees for director shall
be elected by a plurality of the votes present (in person or by
proxy) at the Meeting and entitled to vote thereon. The approval
of all other matters to be properly brought by the Board of
Directors before the Meeting (assuming a quorum exists) requires
the affirmative vote of the holders of a majority of the shares of
Common Stock present (in person or by proxy) at the Meeting and
entitled to vote thereon.
Abstentions and broker non-votes (i.e., shares of Common
Stock represented at the Meeting by proxies held by brokers or
nominees as to which (i) instructions have not been received from
the beneficial owners or persons entitled to vote and (ii) the
broker or nominee does not have discretionary voting power on a
particular matter) with respect to any 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 a plurality of the votes at the
Meeting, or of the ratification of the selection of the independent
accountants, which requires only the affirmative vote of a majority
of the shares of Common Stock present (in person or by proxy) 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 selection of the firm of Grant
Thornton LLP as the Company's independent public accountants for
the 1997 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 judgment.
Any proxy given pursuant to this solicitation may be revoked
by a stockholder at any time before it is voted by written
notification thereof delivered to Messrs. Edward N. Epstein and/or
Stephen A. Ollendorff (Company Secretary), c/o of the Company at
the address set forth hereinabove, by voting in person at the
Meeting, or by executing and delivering 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 principally by mail
and, in addition, may be made by directors and officers of the
Company personally or by telephone or telegraph, without special or
extra compensation for such services. Arrangements will be made
with brokerage firms and other custodians, nominees and fiduciaries
to forward proxies and proxy material to their principals, and the
Company will, upon request, reimburse them 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
relatively nominal.
Annual Report
The Company's Annual Report for the fiscal year ended December
31, 1996, which contains audited financial statements, is being
mailed with this Proxy Statement to all Company stockholders of
record as of the close of business on November 14, 1997.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of the close of business on
November 14, 1997, 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 Common Stock.
No. of Shares
Name and Address Beneficially Percentage
of Beneficial Owner Owned(1) of Class
- ------------------- ------------- ----------
Asset Value Fund 1,279,900 23.10%
Limited Partnership
376 Main Street
P.O. Box 74
Bedminster, NJ 07921
Herbert Berman(2) 283,600 5.12%
405 Lexington Avenue
New York, NY 10174
_______________
(1) Beneficial ownership, as reported in the above table, has been
determined in accordance with Rule 13d-3 under the 1934 Act.
Such beneficial ownership includes both sole voting and sole
dispositive power.
(2) Excludes 51,000 shares of Common Stock owned by his adult
children, with respect to which he disclaims beneficial
ownership.
Ownership by Management
The following table sets forth, as of November 14, 1997, the
beneficial ownership of the Common Stock of the Company by (i) each
present 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.
No. of Shares
Name and Address Beneficially Percentage
of Beneficial Owner(1) Owned(2) of Class
- ---------------------- -------------- ----------
Bert Sager.............. 351,500(3)(4) 6.17%
Stephen A. Ollendorff... 1,513,700 25.79%
(4)(5)(6)
Edward N. Epstein....... 957,500(4)(5)(7) 16.83%
Paula Berliner.......... 195,800(4)(8) 3.49%
Mark Auerbach........... - -
Edward S. Croft, III.... - -
Ronald J. Manganiello... 157,300(9) 2.84%
Paul C. Meyer........... 8,665 *
Joel J. Silver.......... 3,000 *
Kenneth I. Sawyer....... 1,000 *
All directors and executive
officers as a group
(10 persons)........... 2,241,486(4) 35.36%
___________
* 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's principal executive offices at 100 Park Avenue, 23rd
Floor, New York, New York 10017.
(2) Beneficial ownership, as reported in the above table, has been
determined in accordance with Rule 13d-3 under the 1934 Act.
Unless otherwise specifically noted herein, the Company
believes that all persons in the above table have sole voting
and dispositive power with respect to all shares of Common
Stock shown to be beneficially owned by them.
(3) Does not include 76,825 shares of Common Stock owned by
Marilyn Sager, his wife, with respect to which Mr. Sager
disclaims beneficial ownership.
(4) Includes the following shares of Common Stock that may be
acquired upon the exercise of options within 60 days of
November 1, 1997: Mr. Sager - 160,000; Mr. Ollendorff -
330,000; Mr. Epstein - 150,000; and Ms. Berliner - 70,000,
respectively; and all directors and executive officers as a
group (10 persons) - 800,000.
(5) Stephen A. Ollendorff, the Company's Chief Executive Officer,
has entered into an Irrevocable Proxy and Voting Agreement
With Respect to Election of Directors, dated December 19,
1995, with Edward N. Epstein, the Company's President, with
respect to the 957,500 shares of Common Stock beneficially
owned by Mr. Epstein. This arrangement is described in
"Certain Relationships and Related Transactions."
Accordingly, Mr. Ollendorff's beneficial ownership includes
such shares. Other than as set forth above, Mr. Ollendorff
disclaims beneficial ownership of such shares.
(6) Includes 1,000 shares owned by Bjorg Ollendorff, Mr.
Ollendorff's wife.
(7) Includes 7,500 shares owned by Mr. Epstein as trustee for his
minor child.
(8) Includes 27,500 shares owned by Warren Berliner, Ms.
Berliner's husband.
(9) Includes 22,300 shares owned by Lisa Manganiello, Mr.
Manganiello's wife.
PROPOSAL I: ELECTION OF SEVEN 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 shall be at least one, such number to be fixed
by resolution of the Board. The number of directors, which is
presently set at nine, has been reset by the Board to be seven
persons effective immediately prior to the commencement of the
Meeting. The seven 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 Company's 1998 annual meeting of stockholders and until
their respective successors have been duly elected and qualified.
All of the nominees, except Ronald J. Manganiello, are currently
directors of the Company, and each was elected by the Company's
stockholders at the last annual meeting of stockholders, with the
exception of Edward S. Croft, III. Mr. Croft was selected to the
Board by the other members thereof in January 1997. Mr.
Manganiello was a director of the Company from November 1995 until
January 1997. In light of the recent determination of the Company
(and approved by its stockholders) to withdraw its election to be
treated as a business development company and the related reduction
in the size of the Board, Messrs. Auerbach, Meyer and Silver, with
their agreement, will not be standing for re-election to the Board.
Proxies in the accompanying form will be voted at the Meeting
in favor of the election of each of the nominees listed below,
unless authority to do so is specifically 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 have discretionary
authority to select and vote for the election of substitute
management nominees. Directors will be elected by a plurality of
the votes present at the Meeting in person or by proxy and entitled
to vote thereon.
Set forth below is certain information with respect to each
nominee for election as a director of the Company (based solely on
information provided by such nominees):
Year of Principal Occupations During
First Past Five Years;
Name and Age Election Other Directorships
- ------------ -------- ----------------------------
Bert Sager 1983 Co-Chairman of the Board of the Company
(72) (1)(2) since November 1995 and Chairman from
June 1989 to November 1995; from
inception until June 1989, President;
for more than the past five years, a
practicing attorney; director of
Computer Products, Inc. a manufacturer
of standardized electronic products,
and Windmere-Durable Holdings, Inc., a
manufacturer of personal care products.
Stephen A.
Ollendorff
(59) (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.
(57) (1)(2) for more than the past five years, a
principal of Edward N. Epstein &
Assoc., a consulting firm specializing
in corporate structuring 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
(54) (1)(2) June 1992; since May 1990, private
investor; director of the Family Bank
of Hallandale, located in Florida.
Edward S. Croft, 1997 Since August 1996, Managing Director
(54) (3) of Croft & Bender L.L.C., an investment
banking firm and strategic financial
advisory firm. From April 1996 to
August 1996, President of Croft & Co.,
a financial advisory firm; for more
than five years prior to April 1996,
Managing Director of The Robinson-
Humphrey Company, Inc., an investment
banking firm. Director of Computer
Products, Inc., Tensar Corporation, a
manufacturer of plastic products, and
Just For Feet, Inc., an athletic
footwear retailer.
Ronald J. 1995 Since January 1996, a principal in the
Manganiello* merchant banking firm of New Canaan
(48) Capital LLC; since July 1996, a
principal of Sylhan LLC; 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.
Kenneth I. Sawyer 1992 For more than the past five years,
(51) (2)(4) Chairman of the Board, President and
Chief Executive Officer of
Pharmaceutical Resources, Inc. (NYSE),
a manufacturer of generic drugs.
Set forth below is certain information with respect to
directors who will not stand for re-election as directors of the
Company (based solely on information provided by such persons).
Year of Principal Occupations During
First Past Five Years;
Name and Age Election Other Directorships
- ------------ -------- ----------------------------
Mark Auerbach 1995 Since June 1993, the Senior Vice
(59) (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., and a director and
Chairman of the Board of Oakhurst
Company, Inc., a publicly-traded
holding company, whose subsidiaries
operate automotive after-market
distributors.
Paul C. Meyer 1990 Since October 1996, Executive Vice
(50) (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.
Joel J. Silver 1983 Since December 1994, Chairman,
(61) (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.
__________
* Designees for directors of Edward N. Epstein. See "Certain
Relationships and Related Transactions."
(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.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE SEVEN NOMINEES NAMED ABOVE AS DIRECTORS OF THE COMPANY.
Board of Directors; Committees of the Board
The Board met eight times during fiscal 1996. During fiscal
1996, 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 Mr. Sawyer who attended 67% of the meetings
during fiscal 1996.
The Board has established four standing committees, consisting
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,
held one meeting during fiscal 1996 and acted once by unanimous
written consent. The Audit Committee reviews the internal and
external audit functions of the Company and makes recommendations
to the Board 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 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 did not hold any
meetings during fiscal 1996 (but has met once in fiscal 1997).
This Committee has primary responsibility for the administration 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 (and which did not hold any meetings during fiscal
1996), is to exercise the powers of the Board 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 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
Company's annual meetings. 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.
Section 16(a) Compliance
The Company is aware of the following late filings of reports
required by Section 16(a) of the 1934 Act in respect of fiscal year
1996: Paul Meyer failed to file, on a timely basis, his Annual
Statement of Changes in Beneficial Ownership on Form 5; and Kenneth
I. Sawyer failed to file, on a timely basis, a Statement of Changes
in Beneficial Ownership on Form 4. These filings were subsequently
made on the appropriate forms.
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, has received annual
compensation of $10,000, subject to cost-of-living adjustments, to
review, on behalf of the Board, the financial and operational
viability of potential portfolio companies.
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 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' prior written notice thereof; provided,
that 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 directors or (ii) a number of directors equal to 22% (rounded
up to the next highest number) of the entire Board, acceptable to
Mr. Epstein. Pursuant to the foregoing, Mr. Epstein has
designated himself and Ronald J. Manganiello to Mr. Ollendorff with
respect to the election of members of the Board as acceptable to
him.
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, and Larry V. Unterbrink as Treasurer.
The following table sets forth certain information with
respect to the executive officer of the Company who is not a
director or nominee for election as a director:
Name Age
- ---- ---
Larry V. Unterbrink.......................... 63
Treasurer of the Company since February
1990; director from 1985 until February
1995. Private investor residing in Florida.
From May 1982 to December 1994, President
and Treasurer of Seahorse Ltd., a leasing
and publishing company. Since November
1996, a principal of Groupe Financier, a
publishing and consulting firm specializing
in international finance.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information for the fiscal
years ended December 31, 1996, December 31, 1995 and December 31,
1994, 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 1996 exceeded
$100,000) of the Company serving at the end of fiscal 1996 (the
"Named Executives").
Long-Term
Annual Compensation Compensation
-------------------------------- --------------
Securities
Name and Principal Underlying
Position Year Salary($) Bonus($) Options(#)(1)
- --------------------- ---- ----------- -------- -------------
Stephen A. Ollendorff 1996 $264,042(2) - -
Chairman and Chief 1995 256,750(2) - -
Executive Officer 1994 250,000(2) - -
Edward N. Epstein 1996 $150,000 - -
President and 1995 $122,500(3) $30,000 150,000
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 Company's
New York office. Mr. Ollendorff does not receive any
fringe benefits from the Company.
(3) This amount was paid to Mr. Epstein pursuant to his
consulting agreement with the Company.
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
During the fiscal year ended December 31, 1996, there were no
stock option grants or stock appreciation rights granted to the
Named Executives.
On November 22, 1994, the Stock Option and Compensation
Committee authorized an 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
17, 1997, no such "change of control" has occurred.
On November 7, 1996, the Board 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 equal or exceed the principal
outstanding amount of the loan at all times. As of November 17,
1997, 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,
1996 respecting exercisable and non-exercisable options held by the
Named Executives. During fiscal 1996, 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.
Number of Unexercised Value of Unexercised In-
Options Held the-Money Options
at December 31, 1996(1) Held at December 31, 1996(1)
-------------------------- ----------------------------
Not Not
Name Exercisable Exercisable Exercisable Exercisable
- ------ ----------- ----------- ----------- -----------
Stephen A.
Ollendorff 280,000(2) -0- $ 7,800 $-0-
Edward N.
Epstein 150,000 -0- $155,250 $-0-
________________
(1) Based upon the closing sales price of the Common Stock
on December 31, 1996 ($1.91).
(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.
Employment Arrangements
The Company has entered into an employment agreement with
Stephen A. Ollendorff, pursuant to which Mr. Ollendorff receives
annual compensation of $250,000, subject to annual cost-of-living
adjustments, from 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 to be 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.
Effective January 1, 1997, Mr. Ollendorff receives a salary of
$120,000 per year as Chairman of the Board of Recticon Enterprises,
Inc. ("Recticon"), which amount is paid by the Company from the
amounts paid by Recticon to the Company each month. In addition,
Recticon rents office space in Mr. Ollendorff's New Jersey office
and pays rent directly to Mr. Ollendorff directly for such space in
the amount of $500 per month. Any amounts received by Mr.
Ollendorff from Recticon as rent and/or salary are deducted from
his salary from the Company to the extent and as long as he
receives such monies from Recticon.
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. In addition, the Stock Option and Compensation
Committee granted Mr. Epstein a $35,000 bonus in 1996. Mr. Epstein
agrees to 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 such employment agreement, Mr.
Epstein had been retained as a consultant to the Company, at the
annual compensation of $120,000.
As a result of an agreement between Messrs. Epstein and
Ollendorff, Mr. Ollendorff voluntarily reduced his compensation for
1996 by $24,280 to $242,475 in order to increase Mr. Epstein's
compensation for 1996 by $24,280 to $209,230. Mr. Ollendorff has
agreed not to accept any increased compensation (other than cost-
of-living increases) until Mr. Epstein's annual compensation shall
be equal to Mr. Ollendorff's.
In addition, effective October 31, 1991, the Company entered
into employment agreements, for minimum three-year periods, 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 Co-
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 AUDITORS
The Board has selected the firm of Grant Thornton LLP ("Grant
Thornton"), independent certified public accountants, to act as
independent public accountants and to audit the books, records and
accounts for the Company for the fiscal year ending December 31,
1997. In accordance with a resolution of the Board, this selection
is being presented to the stockholders for their ratification at
the Meeting. If the stockholders do not ratify the selection of
Grant Thornton, the selection of independent accountants will be
reconsidered by the Board. A representative of Grant Thornton is
expected to be present at the Meeting and will have the opportunity
to make a statement, if he/she so desires, and will be available to
respond to appropriate questions.
During the Company's 1995 and 1996 fiscal years, the Company
engaged the accounting firm of Coopers & Lybrand L.L.P. ("C&L"),
independent accountants, to audit the books, records and accounts
of the Company. Since the Company recently withdraw its election
to be treated as a business development company under the
Investment Company Act of 1940, its financial statements will, in
the future, be prepared on a consolidated basis. Grant Thornton is
presently the auditor for the Company's principal subsidiary. The
Company determined that it would be appropriate to engage Grant
Thornton as its auditor for the fiscal year ended December 31,
1997. The Company notified C&L, on November 3, 1997, that it would
no longer utilize its services as independent accountants. On
November 3, 1997, the Company engaged the firm of Grant Thornton to
act as its independent accountants for the 1997 fiscal year. The
Company's decision to change independent accountants was approved
by the Company's Board of Directors upon recommendation of its
Audit Committee. For the 1995 and 1996 fiscal years, C&L'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 values. In connection with the audits of the Company's
financial statements for each of the two fiscal years ended as of
December 31, 1996, and in the subsequent interim period, there were
no disagreements with C&L on any matters of accounting principles
or practices, financial statement disclosure or auditing scope or
procedure, which if not resolved to the satisfaction of C&L would
have caused C&L to make reference to the matter in their report on
the Company's financial statements for such periods. C&L has
previously stated in connection with filings with the Commission
that it agrees with the statements contained in this paragraph.
The affirmative vote of the holders of a majority of the
shares of Common Stock present at the Meeting, in person or by
proxy, is required for the ratification of the selection of Grant
Thornton.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ADOPTION OF
PROPOSAL II.
OTHER MATTERS
As of the date of this proxy statement, 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 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 1, 1997.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any stockholder who intends to present a proposal or action at
the Company's 1998 Annual Meeting of Stockholders must comply with
the requirements of Rule 14a-8 of the 1934 Act and the Company's
By-Laws. Rule 14a-8 requires, among other things, that a proposal
shall have been received by the Company in writing at its principal
executive office not later than July 20, 1998 in order for such
proposal to be considered for inclusion in the Proxy Statement
relating to the 1998 Annual Meeting of Stockholders. In addition,
the Company's By-Laws require that a stockholder proposal shall
have been received by the Company no earlier than October 2, 1998
and no later than November 1, 1998.
By Order of the Board of Directors
STEPHEN A. OLLENDORFF
Secretary
Dated: November 17, 1997
<PAGE>
ACORN HOLDING CORP.
(formerly ACORN VENTURE CAPITAL CORPORATION)
Proxy for Annual Meeting of Stockholders
to be Held December 30, 1997
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS
The undersigned stockholder(s) of ACORN HOLDING CORP., 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 1997 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,
1997, at 11:00 A.M. (local time), and any adjournment(s) 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 in respect of a Proposal, this
Proxy will be voted "FOR" such Proposal.
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 /__/
Paula Berliner, Edward S. Croft, III, Edward N. Epstein,
Ronald J. Manganiello, Stephen A. Ollendorff,
Bert Sager, Kenneth I. Sawyer,
(Instruction: To withhold authority to vote for any individual
nominee(s) write the nominee's name in the space below):
______________________________________________________
(Continued and to be signed on the reverse side.)
2. RATIFICATION OF THE SELECTION OF THE FIRM OF
GRANT THORNTON LLP AS THE INDEPENDENT PUBLIC
ACCOUNTANTS OF THE COMPANY FOR THE 1997 FISCAL YEAR
FOR _____ AGAINST _____ ABSTAIN _____
In their discretion, the proxies are hereby 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 of 1934.
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________________________, 1997
___________________________________
Signature
___________________________________
Signature if held jointly
Title______________________________
