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FORM 10-KSB/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the fiscal year ended March 31, 1996
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
FOR THE TRANSITION PERIOD FROM_____________________ TO________________________
Commission File Number 0-233782
RENAISSANCE ENTERTAINMENT CORPORATION
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(Name of Small Business Issuer as Specified in its Charter)
Colorado 84-1094630
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(State or other jurisdiction of incorporation I.R.S. Employer
Identification number
or organization)
4440 Arapahoe Road, Suite 200, Boulder, Colorado 80303
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(Address of principal executive offices) (Zip code)
Issuer's telephone number, including area code: (303) 444-8273
Securities registered under Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.03 par value
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(TITLE OF CLASS)
Common Stock, $.03 par value
Class A Common Stock Purchase Warrants
Class B Common Stock Purchase Warrants
Units, each Unit consisting of one (1) Share of Common Stock,
one (1) Class A Common Stock Purchase Warrant and one (1)
Class B Common Stock Purchase Warrant
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
--- ---
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
The Issuer's revenues for the year ended March 31, 1996 were $12,810,617.
As of May 31, 1996, the aggregate market value of the Common Stock of the
Registrant based upon the average of the closing bid and asked prices of the
Common Stock as quoted on the NASDAQ National Market held by non-affiliates of
the Registrant was approximately $51,362,000. As of June 30, 1996, 4,385,264
shares of the Common Stock of the Registrant were outstanding.
Registrant had planned to incorporate by reference from its definitive proxy
statement for the 1996 Annual Meeting of Shareholders, information responsive to
Items 9, 10, 11, and 12 of PART III to this Annual Report. As it now appears
that the proxy statement will not be filed within 120 days of March 31, 1996,
this amendment, which includes responses to those items it being filed.
ITEM 9 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
DIRECTOR, EXECUTIVE OFFICERS AND KEY EMPLOYEES
Name, position with the Company, age of each Director or executive officer,
and the period during which each Director and officer has served are as follows:
Name(1) Age Position Since
-------- --- -------- -----
Charles S. Leavell 54 Chairman of the Board, 1993
Director & Chief Executive
Officer
Sanford L. Schwartz 46 Director 1993
Phyllis Patterson 64 Director 1994
Rob Geller 43 Director 1994
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Barbara Hope 47 Director 1996
Miles Silverman 47 President and Chief Financial 1993
Officer
Howard Hamburg 59 Director and Vice President 1994
J. Stanley Gilbert 58 Vice-President 1993
Kevin Patterson 36 Vice-President 1994
Gloria Constantin 45 Corporate Secretary 1993
(1) The only familial relationship that exists between or among the Company's
Officers and Directors is that Kevin Patterson is the son of Phyllis
Patterson. Ms. Hope's spouse, Donald C. Gaiti, is President of Creative
Faires, Ltd., a wholly-owned subsidiary of the Company.
CHARLES S. LEAVELL was elected Chief Executive Officer effective June 20,
1996. From April 1993 to March 31, 1995 he was Chief Executive Officer and from
April 1, 1995 to present he has served as Chairman of the Board of the Company.
From 1988 to present, Mr. Leavell has served as President and Chairman of the
Board of Leavell Management Group, Inc. and Ellora Corporation. In that
capacity, he has acquired, developed, and managed numerous ventures, including
the Bristol Renaissance Faire, a period theme park located on 80 acres in
Kenosha, Wisconsin; the 4UR Guest Ranch in Creede, Colorado, a 3,000 acre luxury
ranch; and South Meadow, an exclusive 96 unit single family development in
Boulder, Colorado. Prior to his affiliation with Leavell Management Group and
Ellora Corporation, Mr. Leavell worked with Columbia Pictures in Los Angeles,
California, where he was producer of the feature film, "The Quick and the Dead,"
about Grand Prix automobile racing, and was the executive producer of another
film, "Evil Ways," about street gangs in East Los Angeles. Mr. Leavell also
produced a rock musical for the stage entitled "Goosebumps." Mr. Leavell
currently sits on the Board of Directors of The Leavell Company and CK
Properties, L.C., of El Paso, Texas, both of which are real estate development
and management corporations with extensive holdings in apartments and office
buildings. Mr. Leavell's former affiliations include Board of Directors of the
Denver International Film Festival, Denver, Colorado, and Vice-Chair of Colorado
Venture Capital Corporation, a regional investment firm. Mr. Leavell graduated
from Stanford University in 1965 with a Bachelor of Arts degree in history.
SANFORD L. SCHWARTZ has been a Director of the Company since April, 1993.
In addition, Mr. Schwartz has been a founder, senior executive or director of
nine publicly-traded companies over the last eighteen years. From 1992 to
present, Mr. Schwartz has been the Chairman of Creative Business Strategies,
Inc. ("CBSI"). Prior to starting CBS Mr. Schwartz was, from 1989 to 1991, Chief
Executive Officer of Healthwatch, Inc., a
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publicly-traded biotechnology company and medical equipment manufacturer. Mr.
Schwartz is listed in WHO'S WHO OF LEADING AMERICAN EXECUTIVES, and currently
serves on the Board of Directors of Healthwatch, Inc. Mr. Schwartz graduated
from Hofstra University in 1971 with a Bachelor of Arts degree.
PHYLLIS PATTERSON has been a director of the Company since April 1, 1994.
From April 1, 1994 to October 31, 1995, she also served as the President of
Renaissance Pleasure Faires, Inc., the Company's wholly-owned subsidiary
("RPFI"). She is currently doing consulting work for the Company and is event
production director of Time Games. From 1963 through March 31, 1994, Ms.
Patterson served as President and Artistic Director of the Living History
Centre, Inc., a California nonprofit, public benefit corporation, and producer
of the California Renaissance Pleasure Faires. Ms. Patterson graduated from
Tennessee State University with a Bachelor of Science degree in English and
Speech in 1953.
ROB GELLER has been a Director of the Company since April 1, 1994. He has
served as Chief Financial Officer of Online System Services, Inc., a provider
of Internet services since March 1995. Mr. Geller has also served as the
President of The Growth Strategies Group, a consulting firm specializing in
executive/board services for emerging growth companies since August 1991. From
April, 1990 to July, 1991, he was Executive Vice-President for Healthwatch,
Inc., a publicly-traded medical equipment manufacturer. From September 1986, to
June 1991, Mr. Geller served as President of Hemcure, Inc., a medical services
company. From 1981 through 1985, Mr. Geller held the positions of Corporate
Controller and Director of corporate Planning for Miniscribe Corporation, a
manufacturer of rigid disk drives for small computers. Mr. Geller is currently
a director of Armanino Foods of Distinction, Inc. and Online System Services,
Inc., publicly-held corporations, and Integral Peripherals, Inc., Requisite,
Inc., and Chernow Communications, Inc., all privately-held corporations. Mr.
Geller graduated from the University of Colorado Business School, summa
cum laude, with a Bachelor of Science degree in finance and organizational
behavior in 1976.
BARBARA HOPE was elected a director of the Company, following the Company's
acquisition in February 1996 of Creative Faires, Ltd., now a wholly-owned
subsidiary of the Company. Ms. Hope has served as a director and vice president
of Creative Faires, Ltd., which owns and operates the New York Renaissance
Festival, since its founding in 1977. Ms. Hope attended the State University of
New York at Cortland and Stoneybrook, as well as Cornell University, graduating
with a B.A. in English.
MILES SILVERMAN served as the Company's President and Chief Executive
Officer during fiscal 1996. Mr. Silverman currently serves as the Company's
President and Chief Financial Officer. He also held these positions from April
1993 to April 1, 1995. Prior to his association with the Company, Mr. Silverman
was Executive Vice-President of Leavell Management Group, Inc., a company
specializing in the development and management of residential and resort
developments. Leavell Management Group is a spin-off company from The Leavell
Company of El Paso, Texas, a major development
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company in the Southwest United States. Mr. Silverman served as a Vice-
President of The Leavell Company prior to the creation of Leavell Management
Group. From 1988 until its merger with the Company on March 31, 1996, Mr.
Silverman was the Executive Vice-President and Chief Financial Officer of Ellora
Corporation which owned and managed the Bristol Renaissance Faire. Mr.
Silverman's current board affiliations include South Meadow Realty Corp. and
Silverman Design, Inc., an architectural design firm. Mr. Silverman received a
Master's degree in 1976 from the University of Colorado in Boulder, Colorado
("CU"), and was part of CU's faculty from 1975 to 1977. He served as the head
housing planner for the City of Boulder from 1977 to 1981. In 1971, Mr.
Silverman graduated summa cum laude from the State University of New York at
Buffalo.
HOWARD HAMBURG, Director since April 1, 1994 and Chief Operating Officer
from April 1, 1994 to June 20, 1996 at which time he was elected a Vice
President of the Company. From 1989 to March 31, 1994, Mr. Hamburg served as
Treasurer and Planning Director of the Living History Centre, Inc., a California
non-profit, public benefit corporation and producer of the California
Renaissance Pleasure Faires. In addition to his work with LHC, Mr. Hamburg
served, from 1990 to 1993 as Vice-President of the Patent Protection Institute,
Inc., an intellectual property licensing and royalty recovery corporation. He
also provided services as a business consultant to WBX Corporation, an
intellectual Property royalty recovery project. From 1985 to 1990, Mr. Hamburg
served as General Manager of P 3 Satellite Network, an International Television
Conferencing Network. Mr. Hamburg graduated from New York City Community
College in 1957 with an AA degree in Engineering. In 1969 Mr. Hamburg received
a Bachelor of Arts degree in social science from California State University
Sonoma.
J. STANLEY GILBERT has managed the Bristol Renaissance Faire since 1988.
Prior to that he worked in the commercial banking field in senior management.
Prior to that he was senior vice president of Cinema America, a film and video
production company. Mr. Gilbert is the president of Just in Jest, Inc., an art
studio featuring Renaissance and fantasy handmade sculptures, whose works have
been displayed in galleries and museums, including the Delaware Museum of Fine
Art. Mr. Gilbert has served as a board member of the Kenosha Area Convention
and Business Bureau.
KEVIN PATTERSON, General Manager of RPFI since April 1, 1994, has 18 years
experience in the administration and production of Renaissance Faires. From
1993 to 1994 he served as Vice President & Assistant General Manager of the
Living History Center, a non-profit public benefit corporation which previously
produced the California Renaissance Pleasure Faires. Mr. Patterson served as
Production Manager of Living History Center in 1992, as Community Outreach
Director during 1989 to 1992, and in other positions with the organization
continuously since 1977. Mr. Patterson holds a B.A. degree in Economics from
Moorpark College and attended the B.S.M. program at Pepperdine University. He
is a founding Board Member of the Historic Oaks Foundation and the St. Andrew's
Society of San Francisco.
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Each Director is elected to serve for a term of one year until the next
Annual Meeting of Shareholders or until a successor is duly elected and
qualified.
CERTAIN FILINGS
On May 1, 1991, comprehensive new rules promulgated by the Securities and
Exchange Commission relating to the reporting of securities transactions by
directors and officers became effective. To the Company's knowledge, based
solely on a review of the copies of such reports furnished to the Company and
written representations that no other reports were required, during the fiscal
year ended March 31, 1996, all required reports were timely filed, except that
due to administrative oversight, Gloria Constantin and Barbara Hope each filed
one late Form 4, Charles S. Leavell, J. Stanley Gilbert and Sanford L. Schwartz
each filed two late Form 4s, and Carl Jablonski and Edward C. Pritchard, former
officers of the Company, each filed one late Form 3.
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth certain information for the Company's fiscal
years ended December 31, 1993, 1994 and 1995 regarding compensation earned by
or awarded to the Company's chief executive officer and the two other executive
officers whose total annual salary and bonus exceeded $100,000 (the "Named
Executive Officers").
TABLE I
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
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Annual Compensation Awards Payouts
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Other All
Annual Restricted Other
Name and Compen- Stock LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($)(1) ($) SARs ($) ($)
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Miles
Silverman,
CEO
President 1996 $131,442 -0- -0- -0- -0- -0- -0-
1995 $80,000 $28,894 -0- -0- 80,000 -0- -0-
1994 $72,000 $ 9,500 -0- -0- 33,333 -0- -0-
Phyllis
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Patterson,
President
RPFI 1996 $65,992 -0- $42,840(2)
1995 $98,676 $2,532 -0- -0- -0- -0- -0-
1994 -0- -0- -0- -0- -0- -0- -0-
Howard
Hamburg,
COO 1996 $114,391 -0- -0- -0- -0- -0- -0-
</TABLE>
(1) All executive officers of the Company participate in the Company's group
health insurance plan. However, no Named Executive Officer received
perquisites and other personal benefits which, in the aggregate, exceeded
the lesser of either $50,000 or 10% of the total of annual salary and bonus
paid during the respective years.
(2) Compensation received as consultant after resignation as President of RFPI.
OPTIONS GRANTED DURING FISCAL 1995
During the Company's fiscal year ended March 31, 1996, no options were
granted to Named Executive Officers
AGGREGATED OPTION EXERCISES DURING FISCAL 1996 AND FISCAL YEAR-END OPTION
VALUES
The following table provides information related to the number and value
of options held by the Named Executive Officers as of March 31, 1996. The
Company does not have any outstanding stock appreciation rights.
<TABLE>
<CAPTION>
Value of Number of Unexercised
Unexercised In-the-Money
Options/SARs at Option/SARs
FY-End (#) at FY-End ($)(1)
Shares Acquired Value Realized Exercisable/ Exercisable/
Name on Exercise (#) ($) Unexercisable Unexercisable
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<S> <C> <C> <C> <C>
Miles Silverman -0- $-0- 98,333/15,000 $898,746/$86,250
Phyllis Patterson -0- $-0- 0/0 $-0-/$-0-
Howard Hamburg -0- $-0- 31,022/26,111 $241,397/$193,916
</TABLE>
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(1) The value of unexercised options is determined by calculating the
difference between the fair market value of the securities underlying the
options at fiscal year end and the exercise price of the options.
STOCK INCENTIVE PLAN
On April 21, 1993, the Board of Directors and the shareholders of the
Company adopted the Renaissance Entertainment Corporation 1993 Stock Incentive
Plan (the "ISOP"). Pursuant to the ISOP, as amended, the Company's Board of
Directors is authorized to issue options for the purchase of up to 710,000
shares of the Company's Common Stock to key employees of the Company. Options
granted under the ISOP are incentive stock options within the meaning of Section
422A of the Internal Revenue Code. They are exercisable at prices which were
equal to at least 100% of the fair market value of the Company's Common Stock on
the date of grant, or in the case of an optionee who beneficially owns stock
representing more than 10% of the total combined voting power of the Company,
the exercise price of the option is not less than 110% of the market price of
the shares on the date of grant. Only key management and employees of the
Company are eligible to participate in the ISOP.
The ISOP is administered by the Company's Compensation Committee, a
committee consisting of not less than two members of the Board of Directors (the
"Committee"), which determines eligible employees, the time and number of
options to be granted, and the periods for which such options may be granted.
There are limitations on the number of options which may be granted and the
aggregate fair market value of the stock in any given year. All options granted
under the ISOP may be made subject to vesting by the Committee in its
discretion.
As of March 31, 1996, incentive stock options to purchase 467,798 shares of
Common Stock were outstanding and unexercised, having exercise prices from $2.25
to $7.00 per share.
EMPLOYMENT AGREEMENTS
The Company has Employment Agreements with several of its executive
officers, the material provisions of which are summarized as follows:
MILES SILVERMAN. Effective April 1, 1994, the Company entered into an
Employment Agreement with Mr. Silverman as its President and Chief Financial
Officer. The Agreement provided for payment of a base salary of $80,000 per
year with annual cost of living increases. Effective April 1, 1995, Mr.
Silverman was appointed as the Company's Chief Executive Officer and resigned as
the Company's Chief Financial Officer. As a result, Mr. Silverman's annual
salary was increased to $120,000, with annual cost of living increases.
Effective June 20, 1996, Mr. Silverman resigned as Chief Executive Officer and
was appointed Chief Financial Officer. His salary remained
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$120,000. The current Agreement has a term of one year from the date of
termination notice from the Company.
PHYLLIS PATTERSON. Effective April 1, 1994, the Company entered into an
Employment Agreement with Ms. Patterson as President of Renaissance Pleasure
Faires, Inc. The Agreement had a term of two years from the date of termination
notice from the Company and provided for payment of a base salary of $100,879
per year with annual cost of living increases. Effective October 31, 1995, Ms.
Patterson resigned as President of Renaissance Pleasure Faires, Inc., terminated
her employment with the Company, and entered into a two-year Consulting
Agreement with the Company, pursuant to which she receives $8,568 per month.
HOWARD HAMBURG. Effective April 1, 1994, the Company entered into an
Employment Agreement with Mr. Hamburg as Treasurer of Renaissance Pleasure
Faires, Inc. Effective February 14, 1995, Mr. Hamburg was also appointed the
Company's COO. Effective June 20, 1996, Mr. Hamburg resigned as COO and was
appointed a Vice President. The current Employment Agreement has a term of one
year from the date of termination notice from the Company. His current annual
salary is $105,000, with annual cost of living increases.
KEVIN PATTERSON. Effective April 1, 1994, the Company entered into an
Employment Agreement with Mr. Patterson as Chief Executive Officer of
Renaissance Pleasure Faires, Inc. The current Agreement has a term of one year
from the date of termination notice from the Company. The Agreement provides
for payment of a base salary of $67,900 per year with annual cost of living
increases. His current salary is $75,000.
J. STANLEY GILBERT. The Company has entered into an Employment Agreement
with Mr. Gilbert as its Vice-President. The Agreement has a term of two years
from the date of termination notice from the Company. The Agreement provides
for payment of a base salary of $60,000 per year with annual cost of living
increases. His current salary is $80,000. This Employment Agreement, but not
Mr. Gilbert's employment, was terminated by mutual agreement on April 1, 1995.
RIKKI KIPPLE. The Company has entered into an Employment Agreement with
Ms. Kipple as Vice-President of Ellora Corporation. The Agreement has a term of
two years from the date of termination notice from the Company. The Agreement
provides for payment of a base salary of $40,000 per year with annual cost of
living increases. Her current salary is $65,000. This Employment Agreement,
but not Ms. Kipple's employment, was terminated by mutual agreement on August
31, 1995.
BARBARA HOPE. On February 5, 1996, the Company entered into an Employment
Agreement with Ms. Hope in connection with the acquisition of Creative Faires,
Ltd. The Agreement has a term of two years and provides for a base salary of
$100,000.
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DONALD C. GAITI. On February 5, 1996, the Company entered into an
Employment Agreement with Mr. Gaiti in connection with the acquisition of
Creative Faires, Ltd. The Agreement has a term of two years and provides for a
base salary of $100,000.
DIRECTOR COMPENSATION
During the fiscal year ended March 31, 1996, outside Directors, other than
Mr. Geller and Mr. Leavell, received no cash compensation for their services as
such, however they were reimbursed for their expenses associated with attendance
at meetings or otherwise incurred in connection with the discharge of their
duties as Directors of the Company. Directors who are also executive officers
of the Company receive no additional compensation for their services as
Directors.
LEAVELL CONSULTATION AGREEMENT
Charles S. Leavell began a service as Chief Executive Officer and Chairman
of the Board of the Company in April, 1993. Effective April 1, 1995, Mr.
Leavell resigned as the Company's Chief Executive Officer to concentrate on
other business opportunities. In conjunction with Mr. Leavell's resignation as
Chief Executive Officer, the Company entered into a Consultation Agreement with
Mr. Leavell pursuant to which Mr. Leavell will continue to consult with the
Company's executive committee on matters related to the Company's existing plans
for expansion and proposed faire acquisitions. In consideration of these
services, the Company has agreed to pay Mr. Leavell a fee of $4,000 per month
through March 31, 1996. Thereafter, as services were performed on a project-by-
project basis upon terms and conditions agreeable to both parties at the time.
Effective June 20, 1996, Mr. Leavell once again was elected Chief Executive
Officer of the Company and the consultation agreement was terminated.
GELLER AGREEMENT
Effective April 1, 1994, the Company appointed Rob Geller to serve as a
director of the Company until the next regular annual meeting of the Company's
shareholders and until his successor has been duly elected and qualified. The
Company also entered into an Agreement with Mr. Geller pursuant to which the
Company has agreed to include Mr. Geller's name on the slate of nominees to be
elected to serve as directors of the Company, and Mr. Geller has consented to
the inclusion of his name as a nominee, to be voted upon at the annual meeting
of the Company's shareholders to be held in 1994, 1995 and 1996. Pursuant to
the terms of the agreement, Mr. Geller was granted non-qualified options
exercisable to acquire up to 83,333 shares of the Company's Common Stock at an
exercise price of $2.25 per share. 20,833 of such options vested immediately
upon grant, and the balance are subject to vesting over a period of three years
contingent upon Mr. Geller's continued service as a Director of the Company.
Further, the Company has agreed to pay him $300 for each Board of Directors
meeting he attends and to reimburse him for out-of-pocket expenses incurred in
connection with attending those meetings.
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The Company has also agreed to reimburse Mr. Geller for his out-of-pocket
expenses incurred in connection with his services rendered as a consultant to
the Company for which he also receives $75 an hour. In fiscal 1996, Mr. Geller
received, subject to the prior approval of the Company, $30,137 under this
agreement.
ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock, as of June 30, 1996, by: (i) each of
the directors and executive officers of the Company, (ii) all officers and
directors of the Company as a group, and (iii) holders of 5% or more of the
Company's Common Stock. Each person has sole voting and investment power with
respect to the shares shown, except as noted.
Name and Address Percent of
of Beneficial Owner Number of Shares Class(1)
- ------------------- ---------------- --------
Charles S. Leavell 699,687 (2) 15.96%
1881 Ninth Street, Suite 319
Boulder, Colorado 80302
The Living History Centre 253,668 5.78%
P.O. Box 150329
San Rafael, CA 94915-0329
Barbara Hope 243,000 (3) 5.54%
186 Main Street
Westhampton Beach, NY 11978
Miles Silverman 181,666 (4) 4.05%
2290 Norwood Avenue
Boulder, Colorado 80304
Phyllis Patterson 170,185 3.90%
25 Anton Way
Novato, California 94947
Howard Hamburg 99,096 (5) 2.24%
407 Montford
Mill Valley, California 94941
Rob Geller 77,499 (6) 1.71%
1402 Kalmia
Boulder, Colorado 80304
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Sanford L. Schwartz 10,675 (7) *
5353 Manhattan Circle, #201
Boulder, Colorado 80303
All Directors &
Officers as a Group
(Twelve [12] Persons) 1,690,715 (8) 36.49%
__________________________
* Less than one percent
(1) Shares not outstanding but deemed beneficially owned by virtue of the
individual's right to acquire them as of June 30, 1996, or within 60 days
of such date, are treated as outstanding when determining the percent of
the class owned by such individual and when determining the percent owned
by the group.
(2) Includes 510,000 shares of Common Stock held of record by Leavell
Management Group, Inc., a controlled corporation of Mr. Leavell who would
be deemed to exercise the voting and investment power with respect to the
securities held by LMG. 66,667 shares of Common Stock held of record by
LMG are subject to an option granted in favor of Mr. Leavell, exercisable
at a price of $1.875 per share. Mr. Leavell disclaims beneficial ownership
of the securities held by LMG for purposes of Section 16 under the Exchange
Act.
(3) Includes 122,500 shares owned by Donald C. Gaiti, Ms. Hope's spouse. Ms.
Hope disclaims beneficial ownership of the securities held by Mr. Gaiti for
purposes of Section 16 under the Exchange Act.
(4) Includes incentive stock options exercisable to purchase 33,333 shares of
Common Stock at an exercise price of $2.25 per share, incentive stock
options exercisable to purchase an additional 50,000 shares of Common Stock
at an exercise price of $3.50 per share, issued under the 1993 ISOP, and
incentive stock options exercisable to purchase an additional 15,000 shares
of Common Stock of an exercise price of $7.00 per share, issued under the
1993 ISOP.
(5) Includes Incentive Stock Options exercisable to purchase 16,022 shares of
Common Stock at an exercise of $3.06 per share, issued under the 1993 ISOP
and incentive stock options to purchase an additional 15,000 shares of
Common Stock at an exercise price of $7.00 per share, issued under the 1993
ISOP.
(6) Includes non-qualified options to purchase 62,499 shares of Common Stock at
an exercise price of $2.25 per share and non-qualified options to purchase
15,000 shares of Common Stock at an exercise price of $7.00 per share.
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(7) Includes 10,675 shares owned by Creative Business Strategies, Inc., a
corporation of which Mr. Schwartz is an officer, director and shareholder.
(8) Includes 247,687 shares issuable upon exercise of stock options
exercisable within 60 days of June 30, 1996.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CBSI CONSULTATION AGREEMENT
Sanford L. Schwartz was elected to serve as a member of the Company's Board
of Directors in April, 1993. Mr. Schwartz is President, Director and a
principal stockholder of Creative Business Strategies, Inc. Effective January
1, 1994, CBSI entered into a consultation agreement with the Company in
connection with the Company's acquisition of Western Renaissance Fair
Presentation, Inc., a California corporation ("Western") and the assets of the
Living History Centre, a California non-profit, public benefit corporation. As
a result of its services to the Company in connection with the Western and LHC
acquisitions, the Company issued to CBSI a total of 38,844 shares of the
Company's Common Stock, and issued to CBSI warrants exercisable to purchase an
additional 133,333 shares of the Company's Common Stock at an exercise price of
$ 1.875 per share. These warrants have all been exercised. In connection with
the acquisition of Creative Faires, Ltd., the Company issued an additional
10,675 shares of Common Stock to CBSI.
Further, the Company has entered into a second Consultation Agreement with
CBSI pursuant to which it performs financial and public relations services for a
term expiring December 31, 1996. In consideration of those services, the
Company has agreed to pay CBSI a fee of $4,500 per month and $200 per hour for
services rendered in excess of 20 days per month.
STOCK POOLING AND VOTING AGREEMENT
Effective April 1, 1994, in connection with the Company's acquisition of
the assets of the Living History Centre, the principal shareholders of the
Company entered into a Stock Pooling and Voting Agreement (the "Voting
Agreement"), pursuant to which all parties agreed to vote all shares of the
Company's Common Stock now owned or which in the future may be acquired in favor
of Charles S. Leavell, Phyllis Patterson, Sanford Schwartz and Howard Hamburg to
serve as members of the Company's Board of Directors at any regular or special
meeting of the Company's shareholders held for that purpose. In addition, the
Voting Agreement further provides that such Directors are required to elect a
fifth member of the Board of Directors who shall in all respects be a
disinterested outside Director without a prior or existing business or financial
relationship or affiliation with either the Company or any principal shareholder
of the Company. The outside Director is currently Rob Geller. The Voting
Agreement has a term of three
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years. The parties to the Voting Agreement, Leavell Management Group, Inc.,
Charles S. Leavell, Miles Silverman, Phyllis Patterson, Howard Hamburg, Kevin
Patterson, the Living History Centre, J. Stanley Gilbert and Rikki Kipple
exercise the sole or shared power to vote, in the aggregate, 1,543,023 shares,
or 21.1% of the Company's Common Stock issued and outstanding at February 5,
1996.
LIVING HISTORY CENTRE AGREEMENT
In connection with the Company's purchase of the assets of the Living
History Centre (see "BUSINESS - LIVING HISTORY CENTRE"), the Company issued to
LHC in consideration for the transfer of those assets 262,000 shares of the
Company's Common Stock and 875,000 shares of Series A Convertible Preferred
Stock.
On August 25, 1994, the Company entered into an agreement with LHC to which
LHC agreed to sell to purchasers identified and approved by the Company 100,000
shares of Common Stock at a price of $1.56 per share and an additional 100,000
shares of Common Stock at a price of $1.875 per share. LHC also agreed to
convert all 875,000 shares of Series A Preferred Stock into 291,667 shares of
Common Stock. Further, contingent upon the conversion of the Preferred Stock,
the Company agreed to release and forgive LHC from repayment of an outstanding
indebtedness in the stipulated amount of $62,805. Finally, the Agreement
contained LHC's agreement not to sell, transfer or otherwise dispose of any
shares of Common Stock of the Company until January 27, 1997, without the
consent of the Underwriter.
CREATIVE FAIRES, LTD. AGREEMENT
On February 5, 1996, the Company, its newly-created and wholly-owned
subsidiary Cfaires Acquisition Corp., Creative Faires, Ltd., and Barbara Hope
and Donald C. Gaiti, the sole shareholders of Creative Faires, Ltd., entered
into an Agreement and Plan of Merger pursuant to which Cfaires Acquisition Corp.
was merged with and into Creative Faires, Ltd. In connection with the merger,
Ms. Hope and Mr. Gaiti received 270,000 shares of the Company's Common Stock,
$.03 par value, and the Company became the sole shareholder of Creative Faires,
Ltd. The Company also agreed to employ Mr. Gaiti for a two year period as the
President of Creative Faires, Ltd. and to employ Ms. Hope for the same period of
time as a vice president of Creative Faires, Ltd. In addition, the Company
agreed to use its best efforts expand its board of directors to six members and
to elect Ms. Hope to that board. She was so elected effective February 5, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this annual report to be signed on
its behalf by the undersigned, thereunto duly authorized.
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<PAGE>
RENAISSANCE ENTERTAINMENT
CORPORATION
Date: July 29, 1996 /s/ Charles S. Leavell
-------------------------
Charles S. Leavell
Chief Executive Officer
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