<PAGE>
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
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
RENAISSANCE ENTERTAINMENT CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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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>
PROXY STATEMENT
RENAISSANCE ENTERTAINMENT CORPORATION
4410 Arapahoe Road, Suite 200
Boulder, Colorado 80303
ANNUAL MEETING OF STOCKHOLDERS, NOVEMBER 24, 1997 10:00AM
4410 ARAPAHOE AVENUE, SUITE 200, BOULDER, COLORADO 80303
GENERAL
The enclosed Proxy is solicited by the Board of Directors of Renaissance
Entertainment Corporation (the "Company"). Such solicitation is being made by
mail and may also be made by directors, officers and employees of the Company.
Any Proxy given pursuant to such solicitation may be revoked by the stockholder
at any time prior to the voting thereof by so notifying the Company in writing
at the above address, attention: Gloria Constantin, Secretary, or by appearing
in person at the meeting. Shares represented by Proxies will be voted as
specified in such Proxies. In the absence of specific instructions, Proxies
received by the Board of Directors will be voted (to the extent they are
entitled to be voted on such matters): (1) in favor of the nominees for
directors named in this Proxy Statement; (2) for the ratification of the
appointment of Schumacher & Associates, Inc. as the independent auditors of the
Company; (3) to increase the number of shares which may be issued pursuant to
the exercise of options granted under the Company's 1993 Incentive Stock Option
Plan by an additional 1,000,000 shares, and (4) in the Proxies' discretion, upon
such other business as may properly come before the meeting.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the election inspectors appointed for the meeting and will determine whether or
not a quorum is present. The election inspectors will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum but as unvoted for purposes of determining the approval of
any matter submitted to the stockholders for a vote. If a broker indicates on
the proxy that it does not have discretionary authority as to certain shares to
vote on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.
All of the expenses involved in preparing, assembling and mailing this
Proxy Statement and the material enclosed herewith will be paid by the Company.
The Company may reimburse banks, brokerage firms and other custodians, nominees
and fiduciaries for reasonable expenses incurred by them in sending proxy
material to beneficial owners of stock. This Proxy Statement and the Company's
Annual Report for the fiscal year ended December 31, 1996 are being mailed to
stockholders on or about October 24, 1997.
<PAGE>
OUTSTANDING STOCK
Common Stock, $.03 par value ("Common Stock"), of which there were
9,636,262 shares outstanding on the record date, constitutes the only class
of outstanding voting securities issued by the Company. Each holder of
Common Stock will be entitled to cast one vote in person or by proxy for each
share of Common Stock held for the election of directors and for all other
matters voted on at the meeting. Only stockholders of record at the close of
business on October 17, 1997, will be entitled to vote at the meeting.
Information as to the name, address and stock holdings of each person known
by the Company to be the beneficial owner of more than 5% of its Common Stock
and as to name and the stock holdings of each director and nominee for election
to the Board of Directors and by all officers, directors and nominees, as a
group, as of October 17, 1997, is set forth below. Except as indicated below,
the Company believes that each of such persons has the sole (or joint with
spouse) voting and investment powers with respect to such shares.
Name and Address Percent of
of Beneficial Owner Number of Shares Class (1)
- ------------------- ---------------- ---------
Charles S. Leavell 1,259,374 (2) 13%
4410 Arapahoe Avenue, Ste. 200
Boulder, Colorado 80303
Legacy Fund, LLC 900,000 (3) 9.3%
4900 Woodway
Suite 650
Houston, Texas 77056
Robert M. Geller 226,666 (4) 2.3%
1402 Kalmia
Boulder, Colorado 80304
Sanford L. Schwartz 6,350 (5) *
5353 Manhattan Circle, #201
Boulder, Colorado 80303
Gregg Adam Thaler 0 *
909 Third Avenue; 7th Floor
New York, NY 10022
Dean Petkanas 0 *
100 Store Hill Road
Old Westbury, NY 11568
2
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Charles J. Weber 0 *
1017 Carol Drive
Los Angeles, CA 90069
All Directors, Nominees & Officers 2,392,390 (6) 24.8%
as a Group (Seven (7) Persons)
- ---------------------------
* Less than one percent
(1) Shares not outstanding but deemed beneficially owned by virtue of the
individual's right to acquire them as of October 17, 1997, 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 880,000 shares of Common Stock held of record by Leavell
Management Group, Inc., (LMG) 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. 133,334 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 $.937 per share. Mr. Leavell disclaims
beneficial ownership of the securities held by LMG for purposes of Section
16 under the Exchange Act.
(3) Represents shares issuable upon conversion of Notes at an assumed
conversion price of $.25 per share.
(4) Includes non-qualified options to purchase 166,666 shares of Common Stock
at an exercise price of $1.125 per share and non-qualified options to
purchase 60,000 shares of Common Stock at an exercise price of $3.50 per
share.
(5) Includes 6,350 shares owned by Creative Business Strategies, Inc., a
corporation of which Mr. Schwartz is an officer, director and stockholder.
(6) Includes 226,666 shares issuable upon exercise of stock options exercisable
within 60 days of October 17, 1997.
ELECTION OF DIRECTORS
NOMINATIONS AND ELECTION OF DIRECTORS
The Company's by-laws provide that the size of the Board of Directors shall
be not less than five nor more than fifteen directors. The Board of Directors
has nominated five persons for election as directors. Each of the following
nominees has consented to be nominated to serve as a Director of the
Corporation. The Proxies granted by the stockholders will be voted at the
meeting for the election of the persons listed below as directors of the
Company. In the event that one or more of the below named persons shall
unexpectedly become unavailable for election (the
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Company has no knowledge of any such unavailability), votes will be cast
pursuant to authority granted by the enclosed proxy for such person or persons
as may be designated by the Board of Directors.
NOMINEES FOR DIRECTORS
----------------------
Charles S. Leavell
Sanford L. Schwartz
Robert Geller
Dean Petkanas
Charles J. Weber
Each Director is elected to serve for a term of one year and until the next
Annual Meeting of Stockholders or until a successor is duly elected and
qualified.
There were no family relationships among Directors or persons nominated or
chosen by the Company to become a Director, nor any arrangements or
understandings between any Director and any other person pursuant to which any
Director was elected.
DIRECTORS AND OFFICERS
Name, position with the Company, age of each Director, nominee for Director
or officer, and the period during which each Director has served are as follows:
Director
Name Age Position Since
---- --- -------- -----
Charles S. Leavell 55 Chairman of the Board of 1993
Directors & Chief Executive
Officer
Sanford L. Schwartz 47 Director 1993
Robert M. Geller 44 Director 1994
Dean Petkanas 33 Director 1996
Charles J. Weber 51 Nominee for Director --
J. Stanley Gilbert 59 President and Chief Operating
Officer --
James R. McDonald 51 Chief Financial Officer --
Howard Hamburg 60 Vice President --
Kevin Patterson 36 Vice President --
4
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Gloria Constantin 46 Secretary --
Sue Brophy 41 Controller --
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; 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.
Mr. Schwartz has been a founder, senior executive or director of nine
publicly-traded companies over the last nineteen years. From 1992 to present,
Mr. Schwartz has been the Chairman of Creative Business Strategies, Inc.
("CBSI"), a business consulting firm. Prior to starting CBSI, Mr. Schwartz was,
from 1989 to 1991, Chief Executive Officer of HealthWatch, Inc., a
publicly-traded medical equipment manufacturer. Mr. Schwartz serves on the
Board of Directors of HealthWatch, Inc.
ROBERT M. GELLER has been a Director of the Company since April 1, 1994.
He served as Chief Financial Officer of Online System Services, Inc., a provider
of internet services, from March 1995 to October 1996. 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. 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.
5
<PAGE>
DEAN PETKANAS was elected a director of the Company in 1996. He has been
President of Briarwood Investment Counsel, a broker/dealer registered with the
National Association of Securities Dealers since 1981. From 1992 to 1994, Mr.
Petkanas was Director of Corporate Finance for Kensington Wells, Inc. of New
York. From 1989 to 1992, he served as a Vice President of Corporate Finance and
Assistant Director of Research for Stratton Oakmont of Lake Success, New York, a
broker/dealer.
CHARLES J. WEBER has been a successful key executive in the
Entertainment/Communications Industry since the early 1970's. During this time,
he has also been Chairman and Chief Executive Officer of Weber Communications,
Inc., an international consulting firm providing professional management,
consulting, business development, and financial services. He specializes in
strategic alliances in the multimedia, broadcasting, entertainment, and
communications fields. In this capacity, Mr. Weber has been instrumental in the
production and financing of motion pictures, public and private corporate
financing, domestic and international distribution, and mergers and
acquisitions. He has also served in an executive role for Fortune 500, real
estate and entertainment companies and has executive produced a number of
feature films. In addition, from 1994-1995, he was President and Chief
Executive Officer of Canwest International Corp; from 1995-1996 he was President
and Chief Executive Officer of the Producer's Entertainment Group; from
1996-1997 he was President and Chief Executive Officer of Greenlight
Entertainment, Inc. Mr. Weber graduated from Manhattan College in New York in
1965, with a B.B.A. degree in Accounting. He received an M.B.A. degree in
Finance and Management from Hofstra University in New York in 1967.
J. STANLEY GILBERT became President and Chief Operating Officer in January,
1997. In 1996 Mr. Gilbert was a Vice President of the Company and he managed
the Bristol Renaissance Faire from 1988 until 1996. 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.
He holds a degree in Business Administration.
JAMES R. MCDONALD became Chief Financial Officer of the Company in
November, 1996. From August, 1996 until October, 1996, he served as Chief
Financial Officer of Mountain Solutions, a personal communications services
company. From January, 1994 until August, 1996, Mr. McDonald was Controller of
Omnipoint Corporation, another personal communications services company. Mr.
McDonald also was a principal of James R. McDonald, CPA, from August, 1991 until
December, 1993. Mr. McDonald received a Bachelor of Science degree in
Accounting from California State University at Fullerton in 1978, and a Masters
of Business Administration in Finance from Loyola University of Chicago in 1980.
HOWARD HAMBURG was Chief Operating Officer of the Company 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
6
<PAGE>
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. 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 at
Sonoma.
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 The Living History Centre 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.
GLORIA CONSTANTIN has been Secretary of the Company since 1993. She has
also been in-house Investor Relations since 1993. From 1991 to 1993, she was
employed by Leavell Management Group, Inc. Ms. Constantin holds degrees in
English and Theatre, and is an honors graduate of the Denver Paralegal
Institute.
SUE BROPHY has been Controller of the Company since August, 1995. From
1994 until 1995, Ms. Brophy was employed by Clifton, Gunderson & Co., a public
accounting firm in accounting services. From 1990 to 1993, she was
self-employed. From 1991 to 1992, she was an accountant with Rigden, Inc., a
software development company.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During the 1996 fiscal year, five (5) meetings of the Board of Directors
were held, including regularly scheduled and special meetings. All meetings
were attended by one hundred percent (100%) of the Board members. Outside
Directors were reimbursed their expenses associated with attendance at such
meetings or otherwise incurred in connection with the discharge of their duties
as a Director.
During fiscal 1996, the Company had standing Audit and Compensation
Committees of the Board of Directors, but did not have a standing Nominating
Committee. The members of the Audit Committee were Robert Geller and Dean
Petkanas. No member of the Audit Committee receives any additional compensation
for his services as a member of that Committee. During fiscal 1996, the Audit
Committee held two (2) meetings which were attended by all of its members. The
Audit Committee is responsible for providing assurances that the financial
disclosures made by Management reasonably portray the Company's financial
condition, results of operations, plans and long-term commitments. To
accomplish this, the Audit Committee oversees the external audit coverage,
including the annual nomination of the independent public accountants, reviews
accounting policies and policy decisions, reviews the financial statements,
7
<PAGE>
including interim financial statements and annual financial statements, together
with auditor's opinions, inquiries about the existence and substance of any
significant accounting accruals, reserves or estimates made by Management,
reviews with Management the Management's Discussion and Analysis section of the
Annual Report, reviews the Letter of Management Representations given to the
independent public accountants, meets privately with the independent public
accountants to discuss all pertinent matters, and reports regularly to the Board
of Directors regarding its activities.
During fiscal 1996, the Compensation Committee consisted of Charles S.
Leavell, Sanford L. Schwartz, and Robert Geller. No member of the Compensation
Committee receives any additional compensation for his services as a member of
that Committee. During fiscal 1996, the Compensation Committee held two (2)
formal meetings which were attended by all of its members. The Compensation
Committee is responsible for reviewing pertinent data and making recommendations
with respect to compensation standards for the Company's executive officers,
including the President and Chief Executive Officer, establishing guidelines and
making recommendations for the implementation of Management Incentive
Compensation Plans, reviewing the performance of the President and CEO,
establishing guidelines and standards for the grant of Incentive Stock Options
to key employees under the Company's Incentive Stock Option Plan, and reporting
regularly to the Board of Directors with respect to its recommendations.
Any transactions between the Company and its officers, directors, principal
stockholders, or other affiliates have been and will be on terms no less
favorable to the Company than could be obtained from unaffiliated third parties
on an arms-length basis and will be approved by a majority of the Company's
independent, outside disinterested directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ELECTION OF THE NOMINEES FOR DIRECTORS
EXECUTIVE COMPENSATION
The following table sets forth certain information for the Company's fiscal
periods ended December 31, 1996 (D1996), March 31, 1996 (M1996) and 1995 (M1995)
regarding compensation earned by or awarded to the Company's chief executive
officer and the other executive officers whose total annual salary and bonus
exceeded $100,000 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
Long Term Compensation
-------------------------------
Annual Compensation Awards Payouts
------------------------------------------------------------
Other All
Annual Restricted Other
Name and Compen- Stock LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
- --------------------------------------------------------------------------------
8
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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Position Year ($) ($) ($)(1) ($) SARs ($) ($)
- --------------------------------------------------------------------------------------------------------------------------------
Charles S.
Leavell
Chairman, D1996 -0- -0- -0- -0- -0- -0- -0-
CEO and M1996 -0- -0- $48,000 (1) -0- -0- -0- -0-
President M1995 $92,000 $23,894 -0- -0- -0- -0- -0-
Miles Silverman,
CEO D1996 $95,147 -0- -0- -0- -0- -0- -0-
President M1996 $131,442 -0- -0- -0- -0- -0- -0-
M1995 $80,000 $28,894 -0- -0- 80,000 -0- -0-
Howard
Hamburg,
COO,VP D1996 $83,017 -0- -0- -0- -0- -0- -0-
M1996 $114,391 -0- -0- -0- -0- -0- -0-
M1995 $84,359 -0- -0- -0- 30,000 -0- -0-
</TABLE>
(1) Includes $48,000 received under a Consulting Agreement that terminated
March 31, 1996.
(2) 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 $50,000 or 10% of the total of annual salary and bonus
paid during the respective years.
OPTIONS GRANTED DURING FISCAL 1996
During the Company's fiscal period ended December 31, 1996, no options were
granted to Named Executive Officers.
AGGREGATED OPTION EXERCISES DURING FISCAL 1996 AND FISCAL YEAR-END OPTION VALUES
The following table provides information related to the number and value of
options held by the Named Executive Officers as of December 31, 1996. The
Company does not have any outstanding stock appreciation rights.
<TABLE>
<CAPTION>
Value of Number Unexercised
of Unexercised In-the-Money
Options/SARs at Option/SARs
FY-End (#) at FY-End ($)(1)
Shares Acquired Value Realized Exercisable/ Exercisable/
Name on Exercise (#) ($) Unexercisable Unexercisable
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charles S. Leavell -0- $-0- 0/0 $0/$0
9
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Miles Silverman -0- $-0- 0/0 $0/$0
Howard Hamburg -0- $-0- 84,266/30,000 $296,502/$67,500
</TABLE>
(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 period end and the exercise price of the options.
EMPLOYMENT AGREEMENTS
The Company has Employment Agreements with several of its executive
officers and key employees, the material provisions of which are summarized as
follows:
HOWARD HAMBURG. Effective April 1, 1994, the Company entered into an
Employment Agreement with Mr. Hamburg as Treasurer of Renaissance Pleasure
Faires, Inc. Effective April 28, 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, which supersedes
the agreement dated April 1, 1994, has a term of one year from the date of
termination notice from the Company. His current annual salary is $110,250.
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. Effective August 29, 1994, Mr. Patterson was
also appointed a Vice President of the Company. The current Agreement, which
supersedes the agreement dated April 1, 1994, has a term of one year from the
date of termination notice from the Company. His current base salary is
$78,750.
BARBARA HOPE. On February 5, 1996, the Company entered into an Employment
Agreement with Ms. Hope as an officer of Creative Faires, Ltd. in connection
with the acquisition of Creative Faires, Ltd. The Agreement has a term of two
years, subject to termination only for cause, and provides for a base salary of
$100,000, with bonuses and salary increases payable at the discretion of the
Company. Ms. Hope and Mr. Gaiti are in charge of the Company's faire
merchandise program.
DONALD C. GAITI. On February 5, 1996, the Company entered into an
Employment Agreement with Mr. Gaiti as an officer of Creative Faires, Ltd. in
connection with the acquisition of Creative Faires, Ltd. The Agreement has a
term of two years, subject to termination only for cause, and provides for a
base salary of $100,000, with bonuses and salary increases payable at the
discretion of the Company. Ms. Hope and Mr. Gaiti are in charge of the
Company's faire merchandise program.
DIRECTOR COMPENSATION
During the fiscal period ended December 31, 1996, Directors, other than Mr.
Geller and Mr. Leavell (for fiscal period March 1996), 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
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Company. During July 1997, the Board of Directors authorized the granting of
options to outside directors representing the right to acquire up to 40,000
shares for each year that a director serves on the Board. These options are to
be granted in lieu of cash compensation. Directors who are also executive
officers of the Company receive no additional compensation for their services as
Directors.
GELLER AGREEMENT
Effective April 1, 1994, the Company appointed Robert M. Geller to serve as
a director of the Company and entered into an agreement with him pursuant to
which the Company agreed to include his name on the slate of nominees to be
elected to serve as directors of the Company, and Mr. Geller consented to the
inclusion of his name as a nominee through the 1996 annual meeting of
stockholders. 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. 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. 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 $60 an hour.
Under this agreement, Mr. Geller received $30,137 in the 1996 fiscal year ended
March 31 and $7,432 (exclusive of expenses) in the nine-month period ended
December 31, 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Geller, Schwartz and
Leavell. Mr. Leavell, who is Chief Executive Officer and a director of the
Company, participates in all discussions and decisions regarding salaries,
benefits, and incentive compensation for all employees of the Company, except
discussions and decisions relating to his own salary, benefits, and incentive
compensation.
COMPENSATION COMMITTEE REPORT
The Compensation Committee consists of Messrs. Geller, Schwartz and
Leavell. Mr. Leavell, who is Chief Executive Officer and a director of the
Company, participates in all discussions and decisions regarding salaries,
benefits and incentive compensation for all employees of the Company, except
discussions and decisions relating to his own salary, benefits, and incentive
compensation.
GENERAL COMPENSATION PHILOSOPHY
Currently, the primary elements of the executives' total compensation
program are base salary, annual incentives, and long-term incentives. In
general, the compensation program promotes a pay-for-performance philosophy by
placing a significant portion of total compensation "at risk" while providing
compensation opportunities which are comparable to market levels.
11
<PAGE>
The Company's executive compensation package consists of three main
components: (i) base salary; (ii) annual bonuses based on Company performance;
and (iii) stock options. The base salary of each of the named executive
officers is determined annually after considering the responsibilities and
performance of the individual officer.
CEO COMPENSATION
Charles S. Leavell has been serving as Chief Executive Officer and
Chairman since June 20, 1996. During the fiscal period ended December 31, 1996,
Mr. Leavell agreed to serve without compensation due to the financial position
of the company. In fiscal 1997, Mr. Leavell will be compensated in accordance
with the factors discussed in General Compensation Philosophy, above.
STOCKHOLDER RETURN
Shown below is a line graph comparing the yearly dollar change in the
cumulative total stockholder return on the Company's Common Stock as against the
cumulative total return of the Nasdaq Composite and Nasdaq Non-Financial stocks
for the period January 27, 1995 through August 29, 1997. The graph and table
assume the investment of $100 on January 27, 1995 in the Company's Common Stock.
12
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TOTAL RETURN TO STOCKHOLDERS
(ASSUMES $100 INVESTMENT ON 12/27/95)
[GRAPH]
TOTAL RETURN ANALYSIS
1/27/95 12/29/95 12/31/96 8/29/97
- -------------------------------------------------------------------------------
RENAISSANCE ENTERTAINMENT CORP. $ 100.00 $ 342.86 $ 328.57 $ 39.29
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NASDAQ COMPOSITE $ 100.00 $ 138.64 $ 170.12 $ 209.16
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NASDAQ NON-FINANCIAL $ 100.00 $ 139.85 $ 169.95 $ 208.26
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CERTAIN TRANSACTIONS
CONVERTIBLE DEBENTURES
During May 1997, the Company raised $1,000,000 through the issuance of
convertible debentures, of which $250,000 principal amount was issued to Charles
S. Leavell, Chairman of the Board of Directors of the Company, and the balance
to Mr. Leavell's father and an unrelated party. The investments by Mr. Leavell
and his father were made through the conversion of short-term loans they had
made to the Company earlier in fiscal 1997. The debentures are secured by
mortgages on the Company's Wisconsin and Virginia faire sites and are
convertible into Common Stock at the lesser of $4.50 per share or 70% of the
fair market value of the Company's Common Stock at the time of conversion. The
debenture holders were also granted warrants to purchase an aggregate of 200,000
shares of the Company's Common Stock at the lesser of $3.00 per share or 70% of
the fair market value of the Company's Common Stock at the date of exercise of
the warrants.
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
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Creative Business Strategies, Inc., ("CBSI"), a business consulting firm. The
Company had a Consultation Agreement with CBSI which expired December 31, 1996,
pursuant to which CBSI performed financial and public relations services for the
Company and assisted the Company in the evaluation of acquisition candidates,
including Creative Faires, Ltd. In consideration of those services, the Company
paid CBSI a fee of $4,500 per month and $200 per hour for services rendered in
excess of 20 days per month. A total of $40,500 was paid to CBSI during the
nine months ended December 31, 1996, pursuant this agreement.
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 stockholders 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 who are married to each other, received an aggregate of
540,000 shares of the Company's Common Stock, and the Company became the sole
stockholder of Creative Faires, Ltd. The Company also agreed to employ Mr.
Gaiti and Ms. Hope as officers of Creative Faires, Ltd. for two-year periods.
The market value for the 540,000 shares of Common Stock at the time of the
transaction was $3,071,250. The shares were "restricted" shares as defined in
Rule 144 promulgated by the Securities and Exchange Commission.
The Company believes that the foregoing transactions were on terms as
favorable to the Company as could have been obtained from non-affiliated
parties.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
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 period ended December 31, 1996, all
required reports were timely filed, except that due to administrative oversight,
J. Stanley Gilbert filed one late Form 4 reporting one transaction.
SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has appointed Schumacher & Associates, Inc. as
independent auditors of the Company for the fiscal year ended December 31, 1997,
it being intended that such appointment would be presented for ratification by
the holders of Common Stock. This firm audited the financial statements of the
Company for the fiscal year ended December 31, 1996, and for prior years.
Schumacher & Associates will not have representatives at the meeting, and as a
result will not have an opportunity to make a statement if they so desire or
respond to appropriate questions.
In the event the stockholders do not ratify the appointment of Schumacher &
Associates, the selection of other independent auditors will be considered by
the Board of Directors. The Board of Directors recommends that the stockholders
vote for ratification of the appointment of Schumacher & Associates.
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STOCKHOLDER PROPOSALS
No definitive date for the 1998 Annual Meeting of Stockholders has been
established. Qualifying stockholders may submit proposals that are consistent
with the Company's By-laws and federal securities laws to the Company for
inclusion in the Company's proxy material relating to the 1998 Annual Meeting.
The Company must receive such proposals at its business address (set forth at
the beginning of this Proxy Statement) no later than June 30, 1998.
OTHER MATTERS
The Board of Directors does not intend to bring before the meeting any
business other than as set forth in this Proxy Statement, and has not been
informed that any other business is to be presented to the meeting. However, if
any matters other than those referred to above should properly come before the
meeting, it is the intention of the persons named in the enclosed Proxy to vote
such Proxy in accordance with their best judgment.
Please sign and return promptly the enclosed Proxy in the envelope
provided. The signing of a Proxy will not prevent your attending the meeting
and voting in person.
Dated: October 24, 1997 BY ORDER OF THE BOARD OF DIRECTORS
/s/
Charles S. Leavell
Chief Executive Officer
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RENAISSANCE ENTERTAINMENT CORPORATION
PROXY SOLICITED ON BEHALF OF THE COMPANY
The undersigned hereby constitutes and appoints Charles S. Leavell or
Gloria Constantin _______________(SEE NOTE BELOW) or either of them acting in
the absence of the other, with full power of substitution the true and lawful
attorneys or attorney and proxies of the undersigned to attend the ANNUAL
MEETING OF THE SHAREHOLDERS OF RENAISSANCE ENTERTAINMENT CORPORATION (THE
"COMPANY") TO BE HELD AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY, 4410
ARAPAHOE AVENUE, SUITE 200, BOULDER, COLORADO 80303, ON NOVEMBER 24, 1997 AT
10:00 O'CLOCK A.M. MOUNTAIN TIME, or any adjournment or adjournments thereof,
and vote all shares of the Company standing in the name of the undersigned with
all the powers the undersigned would possess if present at said meeting.
(1) TO ELECT ALL OF THE NOMINEES LISTED BELOW:
CHARLES S. LEAVELL, SANFORD L. SCHWARTZ, ROBERT GELLER, CHARLES WEBER AND
DEAN PETKANAS
FOR___________ WITHHOLD AUTHORITY__________
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name below)
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(2) FOR THE RATIFICATION OF THE APPOINTMENT OF SCHUMACHER & ASSOCIATES, INC.,
AS THE INDEPENDENT AUDITORS OF THE COMPANY.
FOR____________ AGAINST____________ ABSTAIN____________
(3) TO INCREASE THE NUMBER OF SHARES WHICH MAY BE ISSUED PURSUANT TO THE
EXERCISE OF OPTIONS GRANTED UNDER THE COMPANY'S 1993 INCENTIVE STOCK OPTION
PLAN BY AN ADDITIONAL 1,000,000 SHARES.
FOR____________ AGAINST____________ ABSTAIN_____________
(4) UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEM 1, 2, and 3 IN THE
DISCRETION OF THE PERSON HOLDING THE PROXY FOR ANY OTHER BUISNESS.
(NOTE: Should you desire to appoint a proxy other than the management designees
named above, strike out the names of management designees and insert the name of
your proxy in the space provided above. Should you do this, give this proxy
card to the person you appoint instead of returning the proxy card to the
Company.)
PLEASE DATE, SIGN AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
Receipt is acknowledged of Notice of Annual Meeting and Proxy Statement for the
meeting.
- ----------------------------------------- Date:
Name (please type or print) ----------------------
- -----------------------------------------
Signature
- -----------------------------------------
Signature, if held jointly
Please sign exactly as name appears to left. When shares are held by joint
tenants, both should sign. When signing as executor, administrator, attorney,
trustee, or guardian, please give full title as such. If a corporation, please
sign in full corporation name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
