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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
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))
/ / Definitive Proxy Statement
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
RENAISSANCE ENTERTAINMENT CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check 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:
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(2) Aggregate number of securities to which transaction applies
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / 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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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
OF
RENAISSANCE ENTERTAINMENT CORPORATION
To the Stockholders of Renaissance Entertainment Corporation:
PLEASE TAKE NOTICE that the Special Meeting of Stockholders of Renaissance
Entertainment Corporation, will be held at 10:00 a.m. (Denver time) on Tuesday,
February 10, 1998, at the Company's offices, 4410 Arapahoe Avenue, Suite 200,
Boulder, Colorado, to consider and act upon the following matters:
I. To consider and act upon a proposal to amend the Company's Articles of
Incorporation in order to effect a one-for-five reverse stock split of
the Company's outstanding shares of Common Stock.
II. To transact such other business as may properly come before the
meeting.
Whether or not you expect to be present at the meeting, please sign and
date the Proxy and return it to the Company. The Proxy may be revoked at any
time prior to the time that it is voted. Only stockholders of record at the
close of business on December 24, 1997, will be entitled to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Charles S. Leavell
Chairman of the Board
January 19, 1998
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PROXY STATEMENT
RENAISSANCE ENTERTAINMENT CORPORATION
4410 Arapahoe Avenue
Suite 200
Boulder, Colorado 80303
Special Meeting of Stockholders
February 10, 1998
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
personally or by telephone. Any Proxy given pursuant to such solicitation may
be revoked by the stockholder at any time prior to the voting of the Proxy by
filing with the Company either a written revocation or a later dated Proxy or by
attendance and voting in person at the meeting. Shares represented by Proxies
will be voted as specified in such Proxies, and if no choice is specified, will
be voted for the reverse stock split.
Votes cast by proxy or in person at the Special Meeting will be tabulated
by the election inspectors appointed for the meeting who 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.
Directors will not be separately compensated for soliciting Proxies. 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 accompanying form of
Proxy are being mailed to stockholders on or about January 19, 1998.
OUTSTANDING STOCK
Common Stock, $.03 par value ("Common Stock"), of which there were
10,263,247 shares outstanding on the record date, constitutes the only class of
outstanding voting securities issued by the Company. Each stockholder will be
entitled to cast one vote for each share of Common Stock held. Votes may be
cast in person or by proxy. Only stockholders of record at the close of
business on December 24, 1997, will be entitled to vote at the meeting.
The following table sets forth as of December 24, 1997, the shares of
Common Stock and percentage of total shares owned by the stockholders known to
beneficially own 5% of the Company's outstanding shares of Common Stock, each
director and as to all officers and directors as a group. All persons indicated
have (unless indicated to the contrary) sole or shared with spouse voting and
dispositive power over such shares.
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Name and Address of Beneficial
Owner, Name of Director or Amount
Nominee or Identity of Group Beneficially Owned(1) Percentage
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Charles S. Leavell 1,257,374 (2) 12.2%
4440 Arapahoe Avenue, Suite 200
Boulder, Colorado 80303
Legacy Fund, LLC 900,000 8.8%
4900 Woodway, Suite 650
Houston, Texas 77056
Rob Geller 226,667 (3) 2.2%
Sanford L. Schwartz 4,350 (4) *
Dean Petkanas -0- *
Charles Weber -0- *
All Officers and Directors
as a Group (8 persons) 1,947,159 (5) 18.2%
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* Less than 1%
(1) Includes shares not outstanding but deemed beneficially owned by virtue of
the individual's right to acquire them as of the date of this Proxy
statement or within sixty (60) days of such date are treated as outstanding
when determining the percent of class owned by such individual and when
determining the percent owned by the group.
(2) Includes stock options to purchase 100,000 shares of Common Stock and
includes 778,000 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. Mr.
Leavell disclaims beneficial ownership of the securities held by LMG for
purposes of Section 16 under the Exchange Act.
(3) Includes stock options to purchase 226,666 shares of Common Stock.
(4) Includes 4,350 shares owned by Creative Business Strategies, Inc., a
corporation of which Mr. Schwartz is an officer, director, and shareholder.
(5) Includes stock options to purchase 426,666 shares of Common Stock.
AMENDMENT OF ARTICLES OF INCORPORATION
TO EFFECT A REVERSE STOCK SPLIT
The Board of Directors of the Company has concluded that it would be
advisable to amend the Company's Articles of Incorporation to effect a reverse
stock split of the Company's presently issued and outstanding shares of Common
Stock and to provide for the payment of cash in lieu of fractional shares
otherwise issuable. The proposed amendment to Article III of the Articles
required to approve the reverse stock split is set forth below. The proposed
amendment is subject to approval by stockholders and the Board of Directors.
Assuming approval of the proposed amendment by stockholders, the Board of
Directors intends to adopt the proposed amendment following the Special
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Meeting. The amendment would effect the reverse stock split of shares of the
Company's existing Common Stock and would result in one share of post-split
Common Stock ("New Common Stock") being received in exchange for each five
presently issued and outstanding shares of Common Stock.
The Company is presently authorized to issue 50,000,000 shares of Common
Stock, of which 10,263,247 shares were outstanding at the close of business on
December 24, 1997. The Amendment will not have any impact on the aggregate
assigned value of the shares of Common Stock for financial statement purposes
and will not change the authorized number of shares.
The principal effect of the proposed reverse stock split will be to
decrease the number of outstanding shares of Common Stock from 10,263,247 to
approximately 2,052,649. Except for those stockholders who receive cash in lieu
of fractional interests, the proposed reverse stock split will not affect any
stockholder's proportionate equity interest in the Company.
The following tables illustrate the principal effects of the proposed
reverse stock split.
Number of Shares Prior to Proposed After Proposed
of Common Stock Reverse Stock Split Reverse Stock Split
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Authorized 50,000,000 50,000,000
Outstanding 10,263,247 2,052,649
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Available for future issuance 39,736,753 47,947,351
Prior to Proposed After Proposed
Other Effects Reverse Stock Split Reverse Stock Split
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Book value per share (at 9/30/97) $ .58 $ 2.91
Earnings (loss) per share
For the year ended 12/31/96 $ (.21) $(1.04)
For the quarter ended 9/30/97 $ .09 $ .43
* Subject to slight adjustments due to the repurchase of fractional shares.
REASONS FOR THE PROPOSED REVERSE STOCK SPLIT
Effective February 23, 1998, the Company's Common Stock must have an
effective minimum bid price of $1.00 per share in order to continue to be quoted
on the Nasdaq Small Cap Market. On January 13, 1998, the closing bid price for
the stock was $.40625. The main reason for recommending the reverse split of
the Company's Common Stock is to achieve a minimum bid price for the Common
Stock in excess of $1.00.
In addition, the Board of Directors believes that the current low per-share
price of the Common Stock has reduced the effective marketability of the shares
because of the reluctance of many leading brokerage firms to recommend
low-priced stocks to their clients. A variety of brokerage house policies and
practices tend to discourage individual brokers within those firms from dealing
in low-priced stocks. Some of those policies and practices pertain to the
payment of brokers' commissions and to time-consuming procedures that function
to make the handling of low-priced stocks unattractive to brokers from an
economic standpoint. In addition, the structure of trading commissions also
tends to have an adverse impact upon holders of low-priced stocks because the
brokerage commission on a sale of low-priced stock generally represents a higher
percentage of the sales price than the commission on a relatively higher-priced
issue.
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The Board of Directors is hopeful that the decrease in the number of shares
of Common Stock outstanding as a consequence of the proposed reverse stock
split, and the resulting increased price level, will encourage interest in the
Company's New Common Stock and possibly promote greater liquidity for the
Company's stockholders, although such liquidity could be adversely affected by
the reduced number of shares outstanding after the proposed reverse stock split.
Also, although the increase in the price level of the New Common Stock as a
consequence of the proposed reverse stock split may be proportionately less than
the decrease in the number of shares outstanding, the proposed reverse stock
split could result in a price level for the shares that will overcome the
reluctance, policies and practices referred to above and diminish the adverse
impact of trading commissions on the market for the shares. There can, however,
be no assurances that the foregoing effects will occur, or that the per-share
price level of the New Common Stock immediately after the proposed reverse stock
split will be maintained for any period of time.
EXCHANGE OF STOCK CERTIFICATES AND LIQUIDATION OF FRACTIONAL SHARE INTEREST
If the proposed amendment to Article III is approved by stockholders and by
the Board of Directors, the Company will file the amendment to its Articles of
Incorporation on or about February 20, 1998. The proposed reverse stock split
will become effective on the date of that filing (the "Effective Date").
Corporate Stock Transfer, Inc. has been appointed exchange agent (the "Exchange
Agent") to act for stockholders in effecting the exchange of their certificates.
As soon as practicable after the Effective Date, stockholders will be
notified and requested to surrender their certificates representing shares of
Common Stock to the Exchange Agent in exchange for certificates representing
shares of New Common Stock. Commencing with the Effective Date, each
certificate representing shares of Common Stock will be deemed for all corporate
purposes to evidence ownership of shares of New Common Stock, or, to the extent
a stockholder holds a number of shares not evenly divisible by five, fractional
interests for which the Company will pay cash as described below. Stockholders
will not have the opportunity on or after the Effective Date to round off their
shareholdings to a number evenly divisible by five.
No scrip or fractional share certificates of New Common Stock will be
issued in connection with the proposed reverse stock split. Assuming approval
of the proposed reverse stock split by stockholders, stockholders who would
otherwise receive fractional shares will be entitled to payment at the rate of
$.40625 for each share of Common Stock held prior to the Effective Date upon
surrender of certificates representing shares of Common Stock to the Exchange
Agent.
The Company will deposit sufficient cash with the Exchange Agent for the
purchase of the fractional interests. Stockholders are urged to surrender their
certificates to the Exchange Agent and to claim the sums, if any, due them for
fractional interests promptly after the Effective Date. Under the escheat laws
of the various jurisdictions where stockholders reside, the Company is
domiciled, and the funds are deposited, sums due for fractional interests which
are not timely claimed after the Effective Date will, unless correspondence has
been received by the Company or the Exchange Agent concerning those funds within
the time allowed by those jurisdictions, be paid to those various jurisdictions.
Thereafter stockholders otherwise entitled to the funds will have to seek to
obtain them directly from the state to which the funds were paid.
The ownership of a fractional interest will not give the holder any voting,
dividend or any other right except the right to receive payment therefor as
described above. Based on the current market price for the Company's Common
Stock, the Board of Directors of the Company has determined that $.40625 per
share represents the fair value of the shares of the Company's Common Stock for
the purpose of purchasing fractional interests. No service charges will be
payable by stockholders in connection with the exchange of certificates or the
issuance of cash for fractional interest, all of which costs will be borne by
the Company.
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BOARD RECOMMENDATION; VOTE REQUIRED
The Board of Directors recommends a vote for the approval of the proposed
amendment to Article III of the Articles. The affirmative vote of a majority of
the outstanding shares of Common Stock is required to adopt the proposed
amendment.
FEDERAL INCOME TAX CONSEQUENCES
The federal income tax consequences of the proposed reverse stock split
will be as set forth below. The following information is based upon existing
law which is subject to change by legislation, administrative action and
judicial decision and is necessarily general. Therefore, stockholders are
advised to consult with their own tax advisor for more detailed information
relating to their individual tax circumstances.
1. The proposed reverse stock split will be a tax-free recapitalization
for the Company and its stockholders to the extent that shares of Common Stock
are exchanged for shares of New Common Stock.
2. The shares of New Common Stock in the hands of a stockholder will have
an aggregate basis for computing gain or loss equal to the aggregate basis of
shares of Common Stock held by that stockholder immediately prior to the
proposed reverse stock split reduced by the amount of proceeds, if any, received
from the sale of fractional interests and increased by any gain recognized on
that sale.
3. A stockholder's holding period for shares of New Common Stock will
include a holding period of shares of Common Stock exchanged therefor, provided
that the shares of Common Stock were capital assets in the hands of the
stockholder.
4. Stockholders who receive cash for all of their holdings will recognize
a gain or loss for federal income tax purposes as a result of the disposition of
their shares of Common Stock. Although the tax consequences to stockholders who
receive cash for some of their holdings are not entirely certain, those
stockholders in all likelihood will recognize a gain or loss for federal income
tax purposes as a result of the disposition of a portion of their shares of
Common Stock. Stockholders who do not receive any cash for their holdings will
not recognize any gain or loss for federal income tax purposes as a result of
the proposed reverse stock split.
REGISTRATION
It is estimated that the number of shares of Common Stock outstanding after
payment of cash for fractional interests would be reduced by less than 500
shares of Common Stock or 100 shares of New Common Stock and the number of
stockholders of record will not change. Since the number of the Company's
stockholders of record will not be reduced below 300 as a consequence of the
reverse split, the Company will not as a result of those actions become eligible
to terminate the registration of the Common Stock under the Securities Exchange
Act of 1934 or to cease filing reports under the act with the Securities and
Exchange Commission. The Company does not have any present plans to take any
action which would reduce the number of its stockholders.
PROPOSED ARTICLE III
Upon final approval of the proposed one-for-five reverse stock split of the
Company's Common Stock, Article III of the Articles of Incorporation shall be
amended to include a Section 3 which will read in its entirety as follows:
"ARTICLE III
"Section 3. Upon the filing in the Office of the Secretary of
State of the State of Colorado of the Certificate of Amendment of the
Articles of Incorporation of this corporation whereby Article III is
amended to include a Section 3 which reads as set forth herein, each
five (5) issued and outstanding
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shares of Common Stock of this corporation shall thereby and thereupon
be combined into one (1) share of validly issued, fully paid and
nonassessable share of Common Stock. Each person at that time holding
of record any issued and outstanding share of Common Stock shall
receive upon surrender thereof to the corporation's authorized agency
a stock certificate or certificates to evidence and represent the
number of shares of post reverse stock split Common Stock to which the
stockholder is entitled after this reverse split; provided, however,
that this corporation shall not issue fractional shares of Common
Stock in connection with this reverse stock split, but, in lieu
thereof, this corporation shall make a cash payment at the rate of
$.40625 for each share (prior to this reverse stock split) of Common
Stock to the holders thereof who would otherwise be entitled to
receive fractional shares except for the provisions hereof upon
surrender of certificates representing those shares to the
corporation's authorized agency. The ownership of such fractional
interests shall not entitle the holders thereof to any voting,
dividend or other right except the right to receive payment therefor
as described in this Section 3 of Article III of the Articles of
Incorporation."
Sections 1 and 2 of such Article III shall not be amended or otherwise
changed by the proposed amendment.
OTHER MATTERS
Management 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. If any matters other than
those referred to above should properly come before the meeting, however, 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.
By Order of the Board of Directors
Charles S. Leavell
Chairman of the Board
January 19, 1998
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RENAISSANCE ENTERTAINMENT CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
SPECIAL MEETING OF STOCKHOLDERS
February 10, 1998
The undersigned stockholder of Renaissance Entertainment Corporation (the
"Company") hereby appoints Charles S. Leavell and James R. McDonald or either of
them, as attorneys, agents and Proxies of the undersigned with full power of
substitution in each of them, to vote in the name and on behalf of the
undersigned at the Special Meeting of Stockholders of the Company to be held on
February 10, 1998, and at all adjournments thereof, all of the shares of Common
Stock of the Company that the undersigned would be entitled to vote if
personally present, with the powers the undersigned would possess if personally
present.
I. FOR / / Amending Article III of the Company's Articles of
Incorporation to effect a one-for-five reverse stock
AGAINST / / split of the Company's outstanding shares of Common
Stock. (The Board of Directors recommends that you
vote FOR the Amendment.)
ABSTAIN / /
II. In their discretion, upon such other business as may properly come
before the meeting;
all as set out in the Notice of Special Meeting of Stockholders and Proxy
Statement dated January 19, 1998, receipt of which is hereby acknowledged.
(Continued, and to be SIGNED, on other side)
<PAGE>
(Continued from other side)
ALL SHARES WILL BE VOTED AS SPECIFIED. IF NO CHOICE IS SPECIFIED, THE
SHARES WILL BE VOTED FOR THE REVERSE STOCK SPLIT.
A majority of said attorneys or their substitutes who shall be present and
act, or if only one shall attend, then that one, shall have and may exercise all
the powers of said attorneys hereunder.
Dated:
--------------------------------
(Please insert date)
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(Signature)
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(Joint Owner's Signature)
(Signature(s) should agree with
stenciled name(s).] When signing as
attorney, guardian, executor,
administrator or trustee, please give
title. If the signer is a corporation,
please give the full corporate name and
sign by a duly authorized officer,
showing his title. EACH joint owner is
requested to sign.
PLEASE EXECUTE AND RETURN THIS PROXY PROMPTLY.
YOUR COOPERATION WILL BE APPRECIATED.
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