<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:
- -----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- -----------------------------------------------------------------------
(3) Filing Party:
- -----------------------------------------------------------------------
(4) Date Filed:
- -----------------------------------------------------------------------
<PAGE>
RENAISSANCE ENTERTAINMENT CORPORATION
275 Century Circle
Suite 102
Louisville, Colorado 80027
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 28, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Renaissance Entertainment Corporation, a Colorado corporation (the "Company"),
will be held on Tuesday, July 28, 1998, at 10:00 a.m., Mountain Time, at the
Company's offices, 275 Century Circle, Suite 102, Louisville, Colorado, for the
following purposes:
1. To elect four nominees to the Board of Directors to serve for a term
of one year.
2. To approve an amendment to the Renaissance Entertainment Corporation
1993 Incentive Stock Plan to increase the number of shares authorized under such
plan from 142,000 to 342,000.
3. To transact such other business as may properly come before the
meeting and any adjournments thereof.
Only holders of record of common stock of the Company at the close of
business on June 19, 1998 will be entitled to notice of, and to vote at, the
Annual Meeting or any adjournment thereof.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN
TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED REPLY ENVELOPE AS PROMPTLY AS POSSIBLE.
BY ORDER OF THE BOARD OF
DIRECTORS
Gloria Constantin
Secretary
June 29, 1998
<PAGE>
PROXY STATEMENT
RENAISSANCE ENTERTAINMENT CORPORATION
275 Century Circle, Suite 102
Louisville, Colorado 80027
ANNUAL MEETING OF STOCKHOLDERS, JULY 28, 1998, 10:00 A.M.
AT 275 CENTURY CIRCLE, SUITE 102, LOUISVILLE, COLORADO
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) to increase the number of shares
which may be issued pursuant to the exercise of options granted under the
Company's 1993 Incentive Stock Plan by an additional 200,000 shares, and (3) 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, 1997 are being mailed to
stockholders on or about June 29, 1998.
<PAGE>
OUTSTANDING STOCK
Common Stock, $.03 par value ("Common Stock"), of which there were
2,089,894 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 June
19, 1998, will be entitled to vote at the meeting.
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock, as of June 19, 1998, by: (i)
each of the directors 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.
<TABLE>
<CAPTION>
Name and Address Percent of
of Beneficial Owner Number of Shares Class(1)
------------------- ---------------- --------
<S> <C> <C>
Charles S. Leavell 231,874(2) 11.0%
275 Century Circle
Louisville, CO 80027
Robert M. Geller 0 *
Sanford L. Schwartz 870(3) *
Dean Petkanas 100(4) *
Charles J. Weber 0 *
All Directors & Officers as a Group 299,398 14.3%
(8 Persons)
</TABLE>
* 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 19, 1998, 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 155,600 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. 26,667 shares
3
<PAGE>
of Common Stock held of record by LMG are subject to an option granted in
favor of Mr. Leavell, exercisable at a price of $4.69 per share. Mr.
Leavell disclaims beneficial ownership of the securities held by LMG for
purposes of Section 16 under the Exchange Act.
(3) Includes 870 shares owned by Creative Business Strategies, Inc., a
corporation of which Mr. Schwartz is an officer, director and shareholder.
(4) Includes 100 shares owned by Rand Holdings.
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 three nor more than nine directors. The Board of Directors has
nominated four 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 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 M. Geller
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 EXECUTIVE OFFICERS
Name, position with the Company, age of each Director or officer, and the period
during which each Director has served are as follows:
4
<PAGE>
<TABLE>
<CAPTION>
Director
Name Age Position Since
---- --- -------- -----
<S> <C> <C> <C>
Charles S. Leavell 56 Chairman of the Board of 1993
Directors, Chief Executive
Officer & Chief Financial
Officer
Sanford L. Schwartz 48 Director 1993
Robert M. Geller 45 Director 1994
Dean Petkanas 34 Director 1996
Charles J. Weber 52 Director 1997
J. Stanley Gilbert 60 President and Chief --
Operating Officer
Howard Hamburg 61 Vice President --
Gloria Constantin 47 Secretary --
Sue Brophy 42 Controller --
</TABLE>
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'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.
5
<PAGE>
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. Mr. Geller is currently a director of Armanino Foods of
Distinction, Inc. and Online System Services, Inc., publicly-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.
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. Mr. Petkanas is not standing for reelection to the Board at the
1998 Annual Meeting of Shareholders.
CHARLES J. WEBER has been a successful 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
6
<PAGE>
Faire from 1988 until 1996. Before 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 has served as
a board member of the Kenosha Area Convention and Business Bureau. He holds a
degree in Business Administration.
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 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.
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 1997 fiscal year, eight meetings of the Board of Directors were
held, including regularly scheduled and special meetings. During fiscal 1997,
all directors attended at least 75% of the meetings of the Board of Directors
and the committees on which they served. 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 1997, 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 M. 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 1997, the Audit
Committee held two meetings. 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, including interim financial statements and annual
financial statements, together with auditor's opinions, inquiries about the
7
<PAGE>
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 1997, the Compensation Committee consisted of Charles S.
Leavell, Sanford L. Schwartz, and Robert M. Geller. No member of the
Compensation Committee receives any additional compensation for his services as
a member of that Committee. During fiscal 1997, the Compensation Committee held
four formal meetings. 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 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, 1997 (1997), December 31, 1996 (D1996), and March 31,
1996 (M1996) 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 $100,000 (the "Named Executive Officers").
8
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
----------------------------------------------------------
Annual Compensation Awards Payouts
--------------------------------------- ----------------------------- ---------------------------
Other Securities
Annual Restricted Underlying All Other
Name and Compen- Stock Options/ LTIP Compensati
Principal Salary Bonus sation Award(s) SARs Payouts on
Position Year ($) ($) ($)(1)(2) ($) (#) ($) ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles S. Leavell,
Chairman and 1997 $ 80,000 -0- -0- -0- -0- -0- -0-
CEO D1996 -0- -0- -0- -0- -0- -0- -0-
M1996 -0- -0- $48,000(1) -0- -0- -0- -0-
Miles Silverman,
CEO, 1997 -0- -0- -0- -0- -0- -0- -0-
President D1996 $ 95,147 -0- -0- -0- -0- -0- -0-
M1996 $131,442 -0- -0- -0- -0- -0- -0-
Howard Hamburg,
COO, VP 1997 $ 92,516 -0- -0- -0- -0- -0- -0-
D1996 $ 78,182 -0- -0- -0- -0- -0- -0-
M1996 $114,392 -0- -0- -0- -0- -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 1997
The following table shows option grants during fiscal 1997 to the named
executive officers of the Company.
<TABLE>
<CAPTION>
Options Granted Percent of Total Exercise Expiration
Name in Fiscal 1997 Options Granted Price Date
---- -------------- --------------- ----- ----
<S> <C> <C> <C> <C>
Charles S. Leavell 48,000 shs. 38% $0.81(1) 12/11/04
</TABLE>
9
<PAGE>
(1) Exercise price on date of original grant was $1.50. On June 17, 1998, the
Board of Directors approved replacement options with an exercise price of
$.81 per share.
AGGREGATED OPTION EXERCISES DURING FISCAL 1997 AND FISCAL YEAR-END OPTION VALUES
The following table provides information related to the number and value of
options held by the Named Executive Officers as of December 31, 1997
retroactively adjusted for the February 1998 one-for-five reverse stock split.
The Company does not have any outstanding stock appreciation rights.
<TABLE>
<CAPTION>
Value of
Unexercised In-
Number of the-
Unexercised Money
Options/SARs at Option/SARs
Value FY-end (#) at FY-End ($)(1)
Shares Acquired Realized Exercisable/ Exercisable/
Name on Exercise (#) ($) Unexercisable Unexercisable
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charles S. Leavell -0- $-0- 0/0 $0/$0
Miles Silverman -0- $-0- 0/0 $0/$0
Howard Hamburg -0- $-0- 0/0 $0/$0
</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 AGREEMENT
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.
DIRECTOR COMPENSATION
During the fiscal year ended December 31, 1997, 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. During July 1997, the Board of Directors
authorized the granting of options to directors representing the right to
acquire up to
10
<PAGE>
8,000 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.
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
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.
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 was 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 April 30, 1998. The graph and table
assume the investment of $100 on January 27, 1995 in the Company's Common Stock.
11
<PAGE>
[GRAPH]
<TABLE>
<CAPTION>
TOTAL RETURN ANALYSIS
1/27/95 12/31/95 12/31/96 12/31/97 4/30/98
<S> <C> <C> <C> <C> <C>
RENAISSANCE ENTERTAINMENT $100.00 $184.62 $176.92 $ 12.50 $ 2.69
NASDAQ COMPOSITE (US) $100.00 $138.64 $170.12 $209.31 $248.95
NASDAQ NON-FINANCIAL $100.00 $139.85 $169.95 $199.45 $242.51
</TABLE>
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 were secured by
mortgages on the Company's Wisconsin and Virginia faire sites and were
convertible into Common Stock at the lesser of $22.50 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 40,000
shares of the Company's Common Stock at the lesser of $15.00 per share or 70% of
the fair market value of the Company's Common Stock at
12
<PAGE>
the date of exercise of the warrants. During November 1997, the debentures were
paid and the warrants were canceled.
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 who are married to each other, received an aggregate of 108,000 shares of
the Company's Common Stock, and the Company became the sole shareholder 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 108,000 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.
AMENDMENT OF RENAISSANCE ENTERTAINMENT CORPORATION
1993 INCENTIVE STOCK PLAN
PROPOSED AMENDMENT
The Board of Directors proposes that the shareholders of the Company
approve the amendment to the Renaissance Entertainment Corporation 1993 Stock
Incentive Plan to increase the number of shares of Common Stock that may be
issued pursuant to the 1995 Plan from 142,000 to 342,000. The 1993 Plan was
originally adopted by the Board of Directors and the shareholders on April 21,
1993, and the number of shares of the Company's Common Stock reserved for
issuance under the plan was increased in 1995. The features of the 1993 Plan
are summarized below.
SUMMARY OF PLAN
The 1993 Plan terminates April 30, 2003, unless sooner terminated by action
of the Board. The 1993 Plan provides for the grant of options to purchase
shares of the Company's Common Stock to officers, directors, employees and
consultants. Currently, there are 7 officers, 5 directors, 35 employees and 2
consultants eligible to receive such options. Options granted under the 1993
Plan may have a term of up to ten years. Options which expire, are canceled or
are terminated without having been exercised, may be regranted to participants
under the 1993 Plan. Options granted under the 1993 Plan may be either
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended, or options that do not qualify for special tax
treatment. No incentive stock options may be granted with a per share exercise
price less than the fair market value per share at the date of grant (or 110% of
fair
13
<PAGE>
market value in the case of optionees who hold 10% or more of the Company's
outstanding Common Stock). Under the 1993 Plan, the exercise price of
nonqualified stock options shall be as determined by the Compensation Committee.
Not more than $100,000 in value of incentive stock options under all plans of
the Company may vest in any calendar year for any option holder and no incentive
stock option may be exercised more than ten years after the date of grant. The
1993 Plan is administered by the Compensation Committee of the Board of
Directors and options may be granted at such time and in such amounts as the
Committee, in its discretion, determines.
At June 19, 1998, options for the purchase of an aggregate of 226,033
shares of Common Stock were outstanding under the 1993 Plan, held by 21 persons,
with per share exercise prices of $0.81 per share. (On June 17, 1998 the Board
of Directors approved the issuance of replacement options for all outstanding
options, at an exercise price of $.81 per share.) All of the outstanding
options currently held by employees under the 1993 Plan are incentive stock
options. The remaining options granted under the 1993 Plan and held by
non-employee directors and consultants are nonqualified and have an exercise
price equal to the fair market value of the Common Stock on the date of grant.
The following persons have been granted options under the 1993 Plan, each of
which has a term ranging from five to ten years unless earlier terminated as
provided in the 1993 Plan.
<TABLE>
<CAPTION>
STOCK OPTION AWARDS UNDER THE
RENAISSANCE ENTERTAINMENT CORPORATION 1993 STOCK INCENTIVE PLAN
- ---------------------------------------------------------------------------------------------------------
Name and Position Date of Grant Number of Options Exercise Price
----------------- ------------- ----------------- --------------
<S> <C> <C> <C>
Charles S. Leavell, Chief Executive 12/10/93 13,333 $6.19
Officer, Chief Financial Officer, holder of 7/23/97 8,000 $.81(1)
5% of outstanding options and a nominee 12/11/97 40,000 $.81(1)
for director
Sanford L. Schwartz, nominee for director 7/23/97 8,000 $.81(1)
Robert M. Geller, holder of 5% of 2/14/95 12,000 $17.50
outstanding options and nominee for 7/21/94 33,333 $.81(1)
director 7/23/97 8,000 $.81(1)
Charles J Weber, nominee for director 7/23/97 8,000 $.81(1)
J. Stanley Gilbert, President and Chief 12/10/93 3,333 $5.63
Operating Officer and holder of 5% of 2/14/95 4,667 $17.50
outstanding options 12/11/97 40,000 $.81(1)
Howard Hamburg, Vice President 2/15/96 12,000 $17.50
9/1/94 13,333 $7.65
14
<PAGE>
Current Executive Officers, as a group (2 4/21/93 to 109,333 $.81(1) to
persons) present $17.50
Current Directors, who are not also 4/21/93 to 77,333 $.81(1) to
executive officers, as a group (4 persons) present $17.50
Current Employees, excluding executive 4/21/93 to 160,866 $.81(1) to
officers, as a group (30 persons) present $17.50
</TABLE>
- ---------------
(1) On June 17, 1998, the Board of Directors approved replacement options for
these options with an exercise price of $.81 per share. For purposes of
this table, the lower price/ replacement option price has been used.
The last reported sale price for the Common Stock on the Nasdaq SmallCap
Market on June 19, 1998 was $0.656.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the principal federal income tax
consequences under current federal income tax laws relating to awards under the
1993 Plan. This summary is not intended to be exhaustive and, among other
things, does not describe state or local tax consequences.
In general, an optionee will be subject to tax at the time a nonqualified
stock option is exercised (but not at the time of grant), and he or she will
include in ordinary income in the taxable year in which he or she exercises a
nonqualified stock option an amount equal to the difference between the exercise
price and the fair market value of the shares acquired on the date of exercise,
and the Company will generally be entitled to deduct such amount for federal
income tax purposes except as such deductions may be limited by the Revenue
Reconciliation Act of 1993 ("1993 Tax Act"), described below. Upon disposition
of shares, the appreciation (or depreciation) after the date of exercise will be
treated by the optionee as either short-term or long-term capital gain or loss
depending on whether the shares have been held for the then-required holding
period.
In general, an optionee will not be subject to tax at the time an incentive
stock option is granted or exercised. Upon disposition of the shares acquired
upon exercise of an incentive stock option, long-term capital gain or loss will
be recognized in an amount equal to the difference between the disposition price
and the exercise price, provided that the optionee has not disposed of the
shares within two years of the date of grant or within one year from the date of
exercise. If the optionee disposes of the shares without satisfying both holding
period requirements (a "Disqualifying Disposition"), the optionee will recognize
ordinary income at the time of such Disqualifying Disposition to the extent of
the difference between the exercise price and the lesser of the fair market
value of the share on the date the incentive stock option was exercised or the
15
<PAGE>
date of sale. Any remaining gain or loss is treated as short-term or long-term
capital gain or loss depending upon how long the shares have been held. The
Company is not entitled to a tax deduction upon either the exercise of an
incentive stock option or upon disposition of the shares acquired pursuant to
such exercise, except to the extent that the optionee recognizes ordinary income
in a Disqualifying Disposition and then only to the extent that such deduction
is not limited by the 1993 Tax Act.
If the optionee pays the exercise price, in full or in part, with
previously acquired shares, the exchange will not affect the tax treatment of
the exercise. However, if such exercise is effected using shares previously
acquired through the exercise of an incentive stock option, the exchange of the
previously acquired shares will be considered a disposition of such shares for
the purpose of determining whether a Disqualifying Disposition has occurred.
Commencing with the Company's 1995 fiscal year, the federal income tax
deduction that the Company may take for otherwise deductible compensation
payable to executive officers who, on the last day of the fiscal year, are
treated as "named executive officers" in the Company's Proxy Statement for such
year will be limited by the 1993 Tax Act to $1,000,000. Under the provisions of
the 1993 Tax Act, the deduction limit on compensation will apply to all
compensation, except compensation deemed under the 1993 Tax Act to be
"performance-based" and certain compensation related to retirement and other
employee benefit plans. The determination of whether compensation related to the
1993 Plan is performance-based for purposes of the 1993 Tax Act will be
dependent upon a number of factors, including shareholder approval of the 1993
Plan, and the exercise price at which options are granted. The 1993 Tax Act also
prescribes certain limitations and procedural requirements in order for
compensation to qualify as performance-based, including rules which require that
in the case of compensation paid in the form of stock options, the option price
be not less than the fair market value of the stock at date of grant and that
the plan under which the options are granted states the maximum number of shares
with respect to which options may be granted during a specified period to any
employee. The 1993 Plan does not contain a limitation on the number of shares
that can be granted to any employee and accordingly, the Company may be limited
in the deductions it may take with respect to awards under the 1993 Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
AMENDMENT TO THE RENAISSANCE ENTERTAINMENT CORPORATION 1993 INCENTIVE STOCK
PLAN.
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, 1997, all
required reports were timely filed, except that due to administrative oversight,
Gloria Constantin and each of the Directors filed one late Form 4 reporting one
transaction each.
16
<PAGE>
STOCKHOLDER PROPOSALS
No definitive date for the 1999 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 January 29, 1999.
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: June 29, 1998 BY ORDER OF THE BOARD OF DIRECTORS
Charles S. Leavell
Chief Executive Officer
17
<PAGE>
RENAISSANCE ENTERTAINMENT CORPORATION
STOCK INCENTIVE PLAN
I. PURPOSE.
A. This Stock Incentive Plan (the "Plan") is adopted by the Board of
Directors of Renaissance Entertainment Corporation, a Colorado corporation (the
"Company"), on April 21, 1993, to enable the Company to afford certain of its
directors, executive officers and key employees and the directors, executive
officers and key employees of any subsidiary corporation or parent corporation
of the Company who are responsible for the continued growth of the Company, an
opportunity to acquire a proprietary interest in the Company and thus to create
in such directors, executive officers and key employees and increased interest
in, and a greater concern for, the welfare of the Company.
B. The stock options ("Options") offered pursuant to the Plan are a
matter of separate inducement and are not in lieu of any salary or other
compensation for the services of such directors, executive officers or key
employees.
C. The Options granted under the Plan are intended to be either
incentive stock options ("Incentive Options") within the meaning of Section 422A
of the Internal Revenue Code of 1986, as amended (the "Code") or Options that do
not meet the requirements for Incentive Options ("Non-Qualified Options"), but
the Company makes no warranty as to the qualification of any Option as an
Incentive Option.
II. ADMINISTRATION OF THE PLAN.
A. PROCEDURE.
The Plan shall be administered by a Committee of the Board of Directors
of the Company.
1. Subject to subparagraph (2), the Board of Directors shall
appoint a Committee consisting of not less than two members of the Board of
Directors to administer the Plan on behalf of the Board of Directors, subject to
such terms and conditions as the Board of Directors may prescribe. Once
appointed, the Committee shall continue to serve until otherwise directed by the
Board of Directors. All members of the Committee shall be "disinterested
persons" within the meaning of Rule 16b-3(c)(2)(i) (or any successor rule or
regulation) promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). A majority of the members of the Committee shall
constitute a quorum, and the act of a majority of the members of the Committee
shall be the act of the Committee. Any member of the Committee may be removed
at any time, either with or without cause, by resolution adopted by the Board of
Directors, and any vacancy on the Committee may at any time be filled by
resolution adopted by the Board of Directors.
<PAGE>
2. Any or all powers and functions of the Committee may at any
time, and from time to time, be exercised by the Board of Directors; provided,
however, that with respect to the participation in the Plan by members of the
Board of Directors, such powers and functions of the Committee may be exercised
by the Board of Directors only if, at the time of such exercise, a majority of
the members of the Board of Directors, as the case may be, and a majority of the
directors acting in a particular matter, are "disinterested persons" within the
meaning of Rule 16b-3(c)(2)(i) (or any successor rule or regulation) promulgated
under the Exchange Act. Any reference in the Plan to the Committee shall be
deemed also to refer to the Board of Directors, to the extent that the Board of
Directors is exercising any of the powers and function of the Committee.
3. Subject to the foregoing subparagraphs (1) and (2), front
time to time the Board of Directors may increase the size of the Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies however caused, or
remove all members of the Committee and thereafter directly administer the Plan.
B. POWERS OF THE COMMITTEE.
Subject to the provisions of the Plan, the Committee shall have the
authority, in its discretion:
1. to determine the directors, executive officers and key
employees to whom Options shall be granted, the time when such Options shall be
granted, the number of shares which shall be subject to each Option, the
purchase price or exercise price of each share which shall be subject to each
Option, the periods during which such Options shall be exercisable (whether in
whole or in part) and the other terms and provisions with respect to the Options
(which need not be identical);
2. to determine, upon review of relevant information and in
accordance with Article IX hereof, the fair market value of the Common Stock
underlying the Options;
3. to construe the Plan and Options granted thereunder;
4. to accelerate or defer (with the consent of the Optionee)
the exercise of any Option, consistent with the provisions of the Plan;
5. to authorize any person to execute on behalf of the Company
any instrument required to effectuate the grant of an option;
6. to prescribe, amend and rescind rules and regulations
relating to the Plan;
7. to make all other determinations deemed necessary or
advisable for the administration of the Plan.
-2-
<PAGE>
C. AGREEMENTS WITH OPTIONEE.
Without limiting the foregoing, the Committee shall also have the
authority to require, in its discretion, as a condition to the granting of any
Option, that the Participant agree not to sell or otherwise dispose of shares
acquired pursuant to the Option for a prescribed period following the date of
acquisition of such shares and that in the event of termination of a
directorship or employment of such Participant, other than as a result of
dismissal without cause, the Participant will not, for a period to be fixed at
the time of the grant of the Option, enter into any employment or participate
directly or indirectly in any business or enterprise which is competitive with
the business of the Company or any subsidiary corporation or parent corporation
of the Company, or enter into any employment in which such employee or director
will be called upon to utilize special knowledge obtained through his or her
directorship or employment with the Company or any subsidiary corporation or
parent corporation thereof
D. EFFECT OF COMMITTEE'S DECISION.
All decisions, determinations and interpretations of the Committee
shall be final and binding on all Optionees and any other holders of any Options
granted under the Plan.
III. ELIGIBILITY.
A. Non-Qualified Options may be granted only to directors, officers
and other salaried key employees of the Company, or any subsidiary corporation
or parent corporation of the Company now existing or hereafter formed or
acquired, except as hereafter provided. Any person who shall have retired from
active employment by the Company, although such person shall have entered into a
consulting contract with the Company, shall not be eligible to receive an
Option.
B. An Incentive Option may be granted only to salaried key employees
of the Company or any subsidiary corporation or parent corporation of the
Company now existing or hereafter formed or acquired, and not to any director or
officer who is not also an employee.
IV. AMOUNT OF STOCK.
A. The total number of shares of Common Stock of the Company which
may be purchased pursuant to the exercise of Options granted under the Plan
shall not exceed, in the aggregate, 142,000 shares of the authorized Common
Stock, $.03 par value per share, of the Company (the "Shares"). Shares which
are subject to Options shall be counted only once in determining whether the
maximum number of shares which may be purchased or acquired under the Plan has
been exceeded.
B. Shares which may be acquired under the Plan may either be
authorized but unissued Shares, Shares of issued stock held in the Company's
treasury, or both, at the discretion of the Company. If and to the extent that
Options granted under the Plan expire or terminate without having been
exercised, new Options may be granted with respect to the Shares covered
-3-
<PAGE>
by such expired or terminated Options, provided that the grant and the terms
of such new Options shall in all respects comply with the provisions of the
Plan.
V. EFFECTIVE DATE AND TERM OF THE PLAN.
A. The Plan shall become effective on the date (the "Effective
Date") on which it is adopted by the Board of Directors of the Company;
provided, however, that if the Plan is not approved by a vote of the
Shareholders of the Company within twelve (12) months before or after the
Effective Date, the Plan and any Options granted thereunder shall terminate.
B. The Company may, from time to time during the period beginning on
the Effective Date and ending on April 30, 2003 (the "Termination Date") grant
to persons eligible to participate in the Plan, Options under the terms of the
Plan, Options granted prior to the Termination Date may extend beyond that date,
in accordance with the terms thereof. In no event shall the Termination Date be
later than ten (10) years following the Effective Date.
C. As used in the Plan, the terms "subsidiary corporation" and
"parent corporation" shall have the meanings ascribed to such terms,
respectively, in Sections 425(f) and 425(e) of the Code.
D. An employee, executive officer or director to whom Options are
granted hereunder may be referred to herein as a "Participant."
VI. LIMITATION ON INCENTIVE OPTIONS.
The amount of aggregate fair market value of the stock determined at
the time of the grant of the Incentive Option for which any employee may be
granted Incentive Options under this Plan in any calendar year shall not
exceed the sum of (i) $100,000.00 plus (ii) an unused limit carryover amount
for any year after the date of this Plan but prior to the calendar year under
consideration. The unused limit carryover amount shall be determined as
one-half of the amount by which $100,000.00 exceeds the aggregate fair market
value at the time of grant of an Incentive Option under this Plan for which
Incentive Options were granted in any prior year, but carried over for not
more than three (3) years. For this purpose, Incentive Options granted in
any year shall be deemed to first use up the $100,000.00 current year
limitation and then the unused limit carryover amount from the earliest
available year.
VII. TERMS OF OPTIONS.
Stock Options granted pursuant to this Plan shall be evidenced by
written agreements which shall comply with the following terms and conditions:
A. TIME OF EXERCISE.
Any Option may be exercised by the Participant holding such Option for
such period or periods as the Committee shall determine at the date of grant of
such Option. In no event shall
-4-
<PAGE>
any Incentive Option granted to a Participant owning more than ten percent
(10%) of the voting power of all classes of the Company's stock, or the stock
of any subsidiary corporation or parent corporation, be exercisable by its
terms after the expiration of five (5) years from the date it is granted, nor
shall any other Incentive Option granted under this Plan be exercisable by
its terms after ten (10) years from the date it is granted. The Committee
shall have the right to accelerate, in whole or in part, the expiration date
of any Option; and to the extent that an Option is not exercised within the
period of exercisability specified therein, it shall expire as to the then
unexercised portion.
B. TRANSFERABILITY.
Any Option granted under this Plan shall not be transferable by the
director, executive officer or key employee holding same and may be exercised
by the director, executive officer or key employee only during his lifetime,
except that the Option may be exercisable after the death of such director,
executive officer or key employee in accordance with the laws of descent and
distribution.
C. OPTION PRICE.
1. The purchase price for each Share purchasable under any
Non-Qualified Option granted hereunder shall be such amount as the Committee
shall deem appropriate.
2. The purchase price for shares of stock subject to any
Incentive Option under this Plan, shall not be less than the fair market
value of the stock on the date of the grant of the Incentive Option, which
fair market value shall be determined in good faith at the time of the grant
of the Incentive Option by the Committee administering this Plan. In the
event that any Incentive Option is granted to an employee owning more than
ten percent (10%) of the voting power of all classes of the Company's stock,
the purchase price per share of the stock subject to such an Incentive Option
shall not be less than 110% of the fair market value of the stock on the date
of the grant of such Incentive Option determined in good faith by the
Committee.
D. CONSIDERATION FOR SHARES.
The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined
by the Committee and may consist entirely of cash, check, other shares of
common stock of the Company which have a fair market value on the date of
surrender equal to the aggregate exercise price of the shares as to which
said Option shall be exercised, or any combination of such methods of
payment, or such other consideration and method of payment for issuance of
shares to the extent permitted under applicable provisions of the Colorado
Corporation Code and the Company's Articles of Incorporation and Bylaws.
E. VESTING.
Any Options granted pursuant to this Plan may be made subject to
vesting by the Committee in its discretion.
-5-
<PAGE>
VIII. SHAREHOLDER APPROVAL.
This Plan shall not be valid unless it shall be approved by the
shareholders of the Company at a regular or special meeting of shareholders
which shall be held within the period of twelve (12) months following the
effective date of this Plan set forth above.
IX. METHOD OF DETERMINATION OF FAIR MARKET VALUE.
A. If the Shares are listed on a national securities exchange in
the United States on any date on which the fair market value per Share is to
be determined, the fair market value per Share shall be deemed to be the
average of the high and low quotations at which such Shares are sold on such
national securities exchange on such date. If the Shares are listed on a
national securities exchange in the United States on such date but the Shares
are not traded on such dare, or such national securities exchange is not open
for business on such date, the fair market value per Share shall be
determined as of the closest preceding date on which such exchange shall have
been open for business and the Shares were traded. If the Shares are listed
on more than one national securities exchange in the United States on the
date any such Option is granted, the Committee shall determine which national
securities exchange shall be used for the purpose of determining the fair
market value per Share.
B. If a public market exists for the Shares on any date on which
the fair market value per Share is to be determined but the Shares are not
listed on a national securities exchange in the United States, the fair
market value per Share shall be deemed to be the mean between the closing bid
and asked quotations in the over-the-counter market for the Shares on such
date. If there are no bid and asked quotations for the Shares on such date,
the fair market value per Share shall be deemed to be the mean between the
closing bid and asked quotations in the over-the-counter market for the
Shares on the closest date preceding such date for which such quotations are
available.
C. If no public market exists for the Shares on any date on which
the fair market value per Share is to be determined, the Committee shall, in
its sole discretion and best judgment, determine the fair market value of a
Share.
For purposes of this Plan, the determination by the Committee of the
fair market value of a Share shall be conclusive.
X. TERMINATION OF DIRECTORSHIP OR EMPLOYMENT.
A. Upon termination of the directorship or employment of any
Participant with the Company and all subsidiary corporations and parent
corporations of the Company, any Option previously granted to the
Participant, unless otherwise specified by the Committee in the Option,
shall, to the extent nor theretofore exercised. terminate and become null
and void, provided that:
-6-
<PAGE>
1. if the Participant shall die while serving as a director
or while in the employ of such corporation or during either the three (3) or
one (1) year period, whichever is applicable, specified in clause A.2 below
and at a time when such Participant was entitled to exercise an Option as
herein provided, the legal representative of such Participant, or such person
who acquired such Option by bequest or inheritance or by reason of the death
of the Participant. may, not later than one (1) year from the date of death,
exercise such Option, to the extent not theretofore exercised, in respect of
any or all of such number of Shares as specified by the Committee in such
Option; and
2. if the directorship or employment of any Participant to
whom such Option shall have been granted shall terminate by reason of the
Participant's retirement (at such age or upon such conditions as shall be
specified by the Committee), disability (as described in Section 22(e)(3) of
the Code) or dismissal by the employer other than for cause (as defined
below), and while such Participant is entitled to exercise such Option as
herein provided, such Participant shall have the right to exercise such
Option, to the extent nor theretofore exercised, in respect of any or all of
such number of Shares as specified by the Committee in such Option, at any
time up to and including (i) three (3) months after the date of such
termination of directorship or employment in the case of termination by
reason of retirement or dismissal other than for cause, and (ii) one (1) year
after the dare of termination of directorship or employment in the case of
termination by reason of disability. In no event, however, shall any person
be entitled to exercise any Option after the expiration of the period of
exercisability of such Option as specified therein.
B. If a Participant voluntarily terminates his directorship or
employment, or is discharged for cause, any Option granted hereunder shall,
unless otherwise specified by the Committee in the Option, forthwith
terminate with respect to any unexercised portion thereof.
C. If an Option shall be exercised by the legal representative of
a deceased Participant, or by a person who acquired an Option or by bequest
or inheritance or by reason of the death of any Participant, written notice
of such exercise shall be accompanied by a certified copy of letter
testamentary or equivalent proof of the right of such legal representative or
other person to exercise such Option.
D. For the purposes of the Plan, the term "for cause" shall mean:
1. with respect to an employee who is a party to a written
agreement with, or, alternatively, participates in a compensation or benefit
plan of the Company or a subsidiary corporation or parent corporation of the
Company, which agreement or plan contains a definition of "for cause" or
"cause" (or words of like import) for purposes of termination of employment
thereunder by the Company or such subsidiary corporation or parent
corporation of the Company, "for cause" or "cause" as defined in the most
recent of such agreements or plans; or
2. in all other cases, as determined by the Board of
Directors, in its sole discretion, (i) the willful commission by an employee
of a criminal or other act that causes or probably will cause substantial
economic damage to the Company or a subsidiary corporation or parent
corporation of the Company or substantial injury to the business reputation
of the
-7-
<PAGE>
Company or a subsidiary corporation or parent corporation of the Company;
(ii) the commission by an employee of an act of fraud in the performance of
such employee's duties on behalf of the Company or a subsidiary corporation
or parent corporation of the Company; (xii) the continuing willful failure of
an employee to perform the duties of such employee to the Company or a
subsidiary corporation or parent corporation of the Company (other than such
failure resulting from the employee's incapacity due to physical or mental
illness) after written notice thereof (specifying the particulars thereof in
reasonable detail and a reasonable opportunity to be heard and cure such
failure are given to the employee by the Board of Directors; or (iv) the
order of a court of competent jurisdiction requiring the termination of the
employee's employment. For purposes of the Plan, no act, or failure to act,
or the employee's part shall be considered "willful" unless done or omitted
to be done by the employee not in good faith and without reasonable belief
that the employee's action or omission was in the best interest of the
Company or a subsidiary corporation or parent corporation of the Company.
E. For the purposes of the Plan, an employment relationship shall
be deemed to exist between an individual and a corporation if, at the time of
the determination, the individual was an "employee" of such corporation for
purposes of Section 422(a) of the Code. If an individual is on maternity,
military, or sick leave or other bona fide leave of absence, such individual
shall be considered an "employee" for purposes of the exercise of an Option
and shall be entitled to exercise such Option during such leave if the period
of such leave does not exceed ninety (90) days, or if longer, so long as the
individual's right to reemployment with his employer is guaranteed either by
statute or by contract. If the period of leave exceeds ninety (90) days, the
employment relationship shall be deemed to have terminated on the
ninety-first (91) day of such leave, unless the individual's right to
reemployment is guaranteed by statute or contract.
F. A termination of employment shall not be deemed to occur by
reason of (i) the transfer of a Participant from employment by the Company to
employment by a subsidiary corporation or a parent corporation of the
Company, or (ii) the transfer of a Participant from employment by a
subsidiary corporation or a parent corporation of the Company to employment
by the Company or by another subsidiary corporation or parent corporation of
the Company.
XI. RIGHT TO TERMINATE EMPLOYMENT.
The Plan shall not impose any obligation on the Company or on any
subsidiary corporation or parent corporation thereof to continue the
employment of any Participant; and it shall not impose any obligation on the
part of any Participant to remain in the employ of the Company or of any
subsidiary corporation or parent corporation thereof.
XII. PURCHASE FOR INVESTMENT.
Except as hereafter provided, a Participant shall, upon any exercise
of an Option or Right, execute and deliver to the Company a written
statement, in form satisfactory to the Company, in which such Participant
represents and warrants that such Participant is purchasing or acquiring the
Shares acquired thereunder for such Participant's own account, for investment
only and not with a view to the resale or distribution thereof, and agrees
that any subsequent offer for sale or
-8-
<PAGE>
sale or distribution of any of such Shares shall be made only pursuant to
either (a) a Registration Statement on an appropriate form under the
Securities Act of 1933, as amended (the "Securities Act"), which Registration
Statement has become effective and is current with regard to the Shares being
offered or sold or (b) a specific exemption from the registration
requirements of the Securities Act, but in claiming such exemption the holder
shall, if so requested by the Company, prior to any offer for sale or sale of
such Shares, obtain a prior favorable written opinion, in form and substance
satisfactory to the Company, from counsel for or approved by the Company, as
to the applicability of such exemption thereto. The foregoing restriction
shall not apply to (i) issuances by the Company so long as the Shares being
issued are registered under the Securities Act and a prospectus in respect
thereof is current, or (ii) reofferings of Shares by affiliates of the
Company (as defined in Rule 405 or any successor rule or regulation
promulgated under the Securities Act) if the Shares being reoffered are
registered under the Securities Act and a prospectus in respect thereof is
current.
XIII. EXCHANGE, S.E.C. OR OTHER GOVERNMENTAL REQUIREMENTS.
If any law or regulation of the Securities and Exchange Commission,
any stock exchange, NASDAQ, or any governmental body having jurisdiction
shall require any action to be take in connection with the issuance shares
pursuant to an Option under this Plan before shares can be delivered to an
Optionee, then the date for issuance of these shares shall be postponed until
such action can be taken.
XIV. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
Subject to any required action by the shareholders of the Company,
the number of shares of Common Stock covered by each outstanding Option, and
the number of shares of Common Stock which have been authorized for issuance
under the Plan but as to which no Options have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option, as
well as the price per share of Common Stock covered by each such outstanding
Option, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Except
as expressly provided herein, no issuance by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of shares of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the
Company, the Option will terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Board. The Board may,
in the exercise of its sole discretion in such instances, declare that any
Option shall terminate as of a date fixed by the Board and give each Optionee
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the right to exercise his Option as to all or any part of the Optioned Stock,
including Shares as to which the Option would not otherwise be exercisable.
In the event of a proposed sale of all or substantially all of the assets of
the Company, or the merger of the Company with or into another corporation,
the Option shall be assumed or an equivalent option shall be substituted by
such successor corporation or a parent or subsidiary of such successor
corporation, unless such successor corporation does not agree to assume the
Option or to substitute an equivalent option, in which case the Board shall,
in lieu of such assumption or substitution provide for the Optionee to have
the right to exercise the Option as to all of the Optioned Stock. including
Shares as to which the Option would not otherwise be exercisable. If the
Board makes an Option fully exercisable in lieu of assumption or substitution
in the event of a merger or sale of assets, the Board shall notify the
Optionee that the Option shall be fully exercisable for a period of fifteen
(15) days from the date of such notice, and the Option will terminate upon
the expiration of such period.
If, as a result of accelerating the time period during which all
Options are exercisable in full in the event of a merger or asset
transaction, any Optionee would incur liability under Section 16(b) of the
Securities Exchange Act of 1934 as a result of the exercise of an accelerated
Option, such Optionee may request the Company to, and the Company shall be
obligated to repurchase such Option for cash equal to the excess of the fair
market value on the advanced termination date of the shares subject to the
Option over the Option exercise price.
XV. ORDER OF EXERCISE OF OPTIONS.
No Option issued pursuant to this Plan shall be exercisable so long
as there is any outstanding Option issued at an earlier date with respect to
such Employee; Options must be exercised in the order in which they are
granted. Notwithstanding anything in this Plan to the contrary in connection
with any corporate transaction to which Section 425(a) of the Code is
applicable, there may be a substitution of a new Option for an old Option
granted under this Plan, or an assumption of an old Option granted under this
Plan. Any Optionee who has a new Option submitted for an old Option granted
under this Plan shall, in connection with the corporate transaction, lose his
rights tinder the old Option. Nothing in the terms of the assumed or
substituted Option shall confer upon the Optionee more favorable benefits
than he had under the old Option.
XVI. CHANGE IN CONTROL.
A. For purposes of the Plan, a "change in control" of the Company
occurs if (i) any "person" (defined as such term is used in Sections 13(d)
and 14(d)(2) of the Exchange Act, as amended) is or becomes the beneficial
owner, directly or indirectly, of securities of the Company representing
fifty percent (50%) or more of the combined voting power of the Company's
outstanding securities than entitled to vote for the election of directors;
or (ii) during any period of two (2) consecutive years, individuals who at
the beginning of such period constitute the Board of Directors cease for any
reason to constitute at least a majority thereof; or (iii) the Board of
Directors shall approve the sale of all or substantially all of the assets of
the Company or any
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<PAGE>
merger, consolidation, issuance of securities or purchase of assets, the
result of which would be the occurrence of any event described in clause (i)
or (ii) above.
B. In the event of a change in control of the Company (defined
above), the Committee, in its discretion, may determine that, upon the
occurrence of a transaction described in the preceding paragraph, each Option
outstanding hereunder shall terminate within a specified number of days after
notice to the holder, and such holder shall receive, with respect to each
Share subject to such Option, an amount of cash equal to the excess of the
fair market value of such Share immediately prior to the occurrence of such
transaction over the exercise price per Share of such Option. The provisions
contained in the preceding sentence shall be inapplicable to an Option
granted within six (6) months before the occurrence of a transaction
described above if the holder of such Option is a director or officer of the
Company or a beneficial owner of the Company who is described in Section
16(a) of the Exchange Act, unless such holder dies or becomes disabled
(within the meaning of Section 22(e)(3) of the Code) prior to the expiration
of such six-month period.
C. Alternatively, the Committee may determine, in its discretion,
that all then outstanding Options shall immediately become exercisable upon a
change of control of the Company.
XVII. WITHHOLDING TAXES.
The Company may require an employee exercising a Non-Qualified Option
granted hereunder, or disposing of Shares acquired pursuant to the exercise
of an Incentive Option in a disqualifying disposition (within the meaning of
Section 42 1(b) of the Code), to reimburse the corporation that employs such
employee for any taxes required by any government to be withheld or otherwise
deducted and paid by such corporation in respect of the issuance or
disposition of such Shares. In lieu thereof, the employer corporation shall
have the right to withhold the amount of such taxes from any other sums due
or to become due from such corporation to the employee upon such terms and
conditions as the Committee shall prescribe. The employer corporation may,
in its discretion, hold the stock certificate to which such employee is
entitled upon the exercise of an Option as security for the payment of such
withholding tax liability, until cash sufficient to pay that liability has
been accumulated.
XVIII. AMENDMENT OF THE PLAN.
The Board of Directors or the Committee may, from time to time, amend
the Plan, provided that, notwithstanding anything to the contrary herein, no
amendment shall be made, without the approval of the shareholders of the
Company, that will (i) increase the total number of Shares reserved for
Options under the Plan (other than an increase resulting from an adjustment
provided for in Article X, Termination of Directorship or Employment), (ii)
reduce the exercise price of any Incentive Option granted hereunder below the
price required by Article IX, Method of Determination of Fair Market Value;
(iii) modify the provisions of the Plan relating to eligibility, or (iv)
materially increase the benefits accruing to participants under the Plan.
The Board of Directors or the Committee shall be authorized to amend the Plan
and the
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<PAGE>
Options granted thereunder to permit the Incentive Options granted thereunder
to qualify as "incentive stock options" within the meaning of Section 422A of
the Code. The rights and obligations under any Option granted before
amendment of the Plan or any unexercised portion of such Option shall not be
adversely affected by amendment of the Plan or the Option without the consent
of the holder of the Option.
XIX. TERMINATION OR SUSPENSION OF THE PLAN.
The Board of Directors or the Committee may at any time and for any
or no reason suspend or terminate the Plan. The Plan, unless sooner
terminated under Article V, Effective Date and Term of the Plan, or by action
of the Board of Directors, shall terminate at the close of business on the
Termination Date. An Option may not be granted while the Plan is suspended or
after it is terminated. Options granted while the Plan is in effect shall
not be altered or impaired by suspension or termination of the Plan, except
upon the consent of the person to whom the Option was granted. The power of
the Committee under Article II to construe and administer any Options granted
prior to the termination or suspension of the Plan shall continue after such
termination or during such suspension.
XX. GOVERNING LAW.
The Plan, such Options as may be granted thereunder, and all related
matters shall be governed by, and construed and enforced in accordance with,
the laws of the State of Colorado from time to time obtaining.
XXI. PARTIAL INVALIDITY.
The invalidity or illegality of any provision herein shall not be
deemed to affect the validity of any other provision.
The foregoing Stock Incentive Plan of Renaissance Entertainment
Corporation was approved by a majority of the Board of Directors of the
Company at a special meeting of the Board of Directors on April 21, 1993.
RENAISSANCE ENTERTAINMENT
CORPORATION
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<PAGE>
RENAISSANCE ENTERTAINMENT CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned having duly received the Notice of Annual Meeting and the
Proxy Statement dated June 29, 1998, hereby appoints the Chief Executive
Officer, Charles S. Leavell, and the President, J. Stanley Gilbert, as proxies
(each with the power to act alone and with the power of substitution and
revocation) to represent the undersigned and to vote, as designated below, all
common shares of Renaissance Entertainment Corporation held of record by the
undersigned on June 19, 1998, at the Annual Meeting of Shareholders to be held
on July 28, 1998, at 275 Century Circle, Suite 102, Louisville, Colorado, at
10:00 a.m. Mountain Time, and at any adjournment thereof.
<TABLE>
<S> <C> <C> <C> <C>
1. AUTHORITY TO VOTE FOR ELECTION OF GRANT WITHHOLD
CHARLES S. LEAVELL, SANFORD L. SCHWARTZ,
ROBERT M. GELLER AND CHARLES J. WEBER
TO SERVE AS DIRECTORS.
YOU MAY WITHHOLD AUTHORITY TO VOTE FOR A NOMINEE BY LINING THROUGH HIS NAME.
2. PROPOSAL TO APPROVE THE AMENDMENT TO THE FOR AGAINST ABSTAIN
THE RENAISSANCE ENTERTAINMENT CORPORATION 1993
INCENTIVE STOCK PLAN.
THE BOARD RECOMMENDS YOU VOTE FOR THIS PROPOSAL.
3 IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED FOR AGAINST ABSTAIN
TO VOTE UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING
</TABLE>
This Proxy, when properly executed, will be voted in the manner directed on
the Proxy be the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF EACH OF THE NOMINEES TO THE BOARD LISTED IN
PROPOSAL 1 AND FOR PROPOSALS 2 AND 3.
Please sign exactly as your name appears on this card. When shares are
held by joint tenants, both should sign. If signing as attorney, guardian,
executor, administrator or trustee, please give full title as such. If a
corporation, please sign in the corporate name by the president or other
authorized officer. If a partnership, please sign in the partnership name by an
authorized person.
---------------------------------------
(Signature)
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(Signature, if held jointly)
Dated: ___________________________, 1998
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
RETURN ENVELOPE.
