<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. 1)
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:
- --------------------------------------------------------------------------------
1
<PAGE>
RENAISSANCE ENTERTAINMENT CORPORATION
275 Century Circle
Suite 102
Louisville, Colorado 80027
NOTICE OF ADJOURNED ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 8, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Renaissance Entertainment Corporation, a Colorado corporation (the "Company"),
originally to be held on Monday, August 16, 1999, has been adjourned and will be
held on Wednesday, September 8, 1999, 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 six 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 342,000 to 750,000.
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 July 13, 1999 will be entitled to notice of, and to vote at, the
Annual Meeting or any adjournment thereof. The meeting has been adjourned to
September 8, 1999, in order to permit the Company to provide shareholders with a
copy of the financial statements which were inadvertently not included with the
Company's Annual Report sent to shareholders with the Notice of Annual Meeting
and Proxy Statement.
YOU MAY ATTEND THE MEETING. HOWEVER, WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING, IF YOU HAVE NOT ALREADY RETURNED YOUR PROXY, PLEASE COMPLETE, SIGN
AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED REPLY ENVELOPE AS
PROMPTLY AS POSSIBLE. IF YOU HAVE RETURNED YOUR PROXY IN RESPONSE TO OUR PRIOR
MAILING, IT IS NOT NECESSARY TO SEND A SECOND PROXY UNLESS YOU WANT TO CHANGE
YOUR VOTE.
BY ORDER OF THE BOARD OF
DIRECTORS
By: /s/ Charles S. Leavell
--------------------------
Charles S. Leavell
Chairman of the Board
August 17, 1999
GP:621530 v1
<PAGE>
PROXY STATEMENT
RENAISSANCE ENTERTAINMENT CORPORATION
275 Century Circle, Suite 102
Louisville, Colorado 80027
ANNUAL MEETING OF STOCKHOLDERS, AUGUST 16, 1999, 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: Joan C. Jackson,
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 408,000 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, 1998
are being mailed to stockholders on or about July 22, 1999.
<PAGE>
OUTSTANDING STOCK
Common Stock, $.03 par value ("Common Stock"), of which there were
2,144,889 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 July 13, 1999, 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 July 13, 1999,
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
275 Century Circle, Suite 102
Louisville, Colorado 80027 347,874 (2) 15.5%
Robert M. Geller
275 Century Circle, Suite 102
Louisville, Colorado 80027 96,333 (3) 4.3%
Sanford L. Schwartz
275 Century Circle, Suite 102
Louisville, Colorado 80027 31,870 (4) 1.5%
Charles J. Weber
275 Century Circle, Suite 102
Louisville, Colorado 80027 16,000 (5) *
J. Stanley Gilbert
275 Century Circle, Suite 102
Louisville, Colorado 80027 105,287 (6) 4.7%
Thomas Brown
275 Century Circle, Suite 102
Louisville, Colorado 80027 None *
All Directors & Officers as a Group
(8 Persons) 601,364 (7) 24.4%
</TABLE>
- --------------
3
<PAGE>
* Less than 1%
(1) Shares not outstanding but deemed beneficially owned by virtue of the
individual's right to acquire them as of July 13, 1999, 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 175,600 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 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. Includes
options to purchase 56,000 shares and warrants to purchase 40,000
shares.
(3) Includes options to purchase 74,333 shares of Common Stock and
warrants to purchase 22,000 shares.
(4) Includes 870 shares owned by Creative Business Strategies, Inc., a
corporation of which Mr. Schwartz is an officer, director and
shareholder. Includes options to purchase 16,000 shares of Common Stock
and warrants (owned by Creative Business Strategies) to purchase 15,000
shares.
(5) Includes options to purchase 16,000 shares of Common Stock.
(6) Includes 30,687 shares owned by Mr. Gilbert's spouse, options to
purchase 45,000 shares of Common Stock and warrants to purchase 29,600
shares.
(7) Includes 211,333 shares issuable upon exercise of stock options
exercisable within 60 days of July 13, 1999, and 106,600 shares
issuable upon exercise of warrants exercisable within 60 days of July
13, 1999.
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 six persons for election as directors. Each
of the following nominees has consented to be nominated to serve as a
Director of the Corporation. Messrs. Leavell, Geller, Schwartz and Weber were
elected to serve on the Company's Board of Directors at the Annual Meeting of
Shareholders held on July 28, 1998. Messrs. Gilbert and Brown have not
previously served on the Board of Directors. 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
4
<PAGE>
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
Robert M. Geller
Sanford L. Schwartz
Charles J. Weber
J. Stanley Gilbert
Thomas Brown
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 executive
officer, and the period during which each Director has served are as follows:
<TABLE>
<CAPTION>
Director
Name Age Position Since
---- --- -------- -----
<S> <C> <C> <C>
Charles S. Leavell 57 Chairman of the Board of Directors, 1993
Chief Executive Officer & Chief
Financial Officer
J. Stanley Gilbert 61 President and Chief Operating --
Officer and Nominee for election to
Board
Robert M. Geller 46 Director 1994
Sanford L. Schwartz 49 Director 1993
Charles J. Weber 53 Director 1997
Thomas Brown 53 Nominee for election to Board --
Howard Hamburg 62 Vice President --
Sue Brophy 43 Controller and Chief Accounting --
Officer
</TABLE>
5
<PAGE>
CHARLES S. LEAVELL was elected Chief Executive Officer effective
June 20, 1996. From April 1993 to March 31, 1995, he was Chief Executive
Officer, and from April 1, 1995 to present he has served as Chairman of the
Board of the Company. From 1988 to present, Mr. Leavell has served as
President and Chairman of the Board of Leavell Management Group, Inc. and
Ellora Corporation. In that capacity, he has acquired, developed, and managed
numerous ventures, including the Bristol Renaissance Faire; the 4UR Guest
Ranch in Creede, Colorado, a 3,000 acre luxury ranch; and South Meadow, an
exclusive 96 unit single family development in Boulder, Colorado. Prior to
his affiliation with Leavell Management Group and Ellora Corporation, Mr.
Leavell worked with Columbia Pictures in Los Angeles, California, where he
was producer of the feature film, "The Quick and the Dead," about Grand Prix
automobile racing, and was the executive producer of another film, "Evil
Ways," about street gangs in East Los Angeles. Mr. Leavell also produced a
rock musical for the stage entitled "Goosebumps." Mr. Leavell currently sits
on the Board of Directors of The Leavell Company and CK Properties, L.C., of
El Paso, Texas, both of which are real estate development and management
corporations with extensive holdings in apartments and office buildings. Mr.
Leavell's former affiliations include Board of Directors of the Denver
International Film Festival, Denver, Colorado, and Vice-Chair of Colorado
Venture Capital Corporation, a regional investment firm. Mr. Leavell
graduated from Stanford University in 1965 with a Bachelor of Arts degree in
history.
J. STANLEY GILBERT became President and Chief Operating Officer in
January, 1997. In 1996 Mr. Gilbert was a Vice President of the Company and he
managed the Bristol Renaissance Faire from 1988 until 1996. Prior to that he
worked in the commercial banking field in senior management. Prior to that,
he was senior vice president of Cinema America, a film and video production
company. Mr. Gilbert is the president of Just in Jest, Inc., an art studio
featuring Renaissance and fantasy handmade sculptures, whose works have been
displayed in galleries and museums, including the Delaware Museum of Fine
Art. Mr. Gilbert has served as a board member of the Kenosha Area Convention
and Business Bureau. He holds a degree in Business Administration.
ROBERT M. GELLER has been a Director of the Company since April 1,
1994. He served as Chief Financial Officer of Online System Services, Inc., a
provider of internet services, from March 1995 to October 1996. Mr. Geller
has also served as the President of The Growth Strategies Group, a consulting
firm specializing in executive/board services for emerging growth companies
since August 1991. From April, 1990 to July, 1991, he was Executive
Vice-President for HealthWatch, Inc., a publicly-traded medical equipment
manufacturer. Mr. Geller graduated from the University of Colorado Business
School, summa cum laude, with a Bachelor of Science degree in finance and
organizational behavior in 1976.
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
6
<PAGE>
the last twenty 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.
CHARLES J. WEBER was elected a director of the Company in 1997. Mr.
Weber has been a successful key executive in the Entertainment/Communications
Industry since the early 1970's. During this time, he has also been Chairman
and Chief Executive Officer of Weber Communications, Inc., an international
consulting firm providing professional management, consulting, business
development, and financial services. He specializes in strategic alliances in
the multimedia, broadcasting, entertainment, and communications fields. In
this capacity, Mr. Weber has been instrumental in the production and
financing of motion pictures, public and private corporate financing,
domestic and international distribution, and mergers and acquisitions. He has
also served in an executive role for Fortune 500, real estate and
entertainment companies and has executive produced a number of feature films.
In addition, from 1994-1995, he was President and Chief Executive Officer of
Canwest International Corp.; from 1995-1996 he was President and Chief
Executive Officer of the Producer's Entertainment Group; from 1996-1997 he
was President and Chief Executive Officer of Greenlight Entertainment, Inc.
Mr. Weber graduated from Manhattan College in New York in 1965, with a B.B.A.
degree in Accounting. He received an M.B.A. degree in Finance and Management
from Hofstra University in New York in 1967.
THOMAS BROWN has been President and founder of Wyndham Capital
Corporation, an investment banking firm, from January 1996 to present. From
January 1991 to December 1995, Mr. Brown co-founded and was managing Director
of Ablum, Brown & Company, a private investment banking firm. Mr. Brown is a
graduate of the University of Southern California with a B.S. in Business
Administration and an M.B.A. and is a Chartered Financial Analyst. Mr. Brown
is a director of Ashton Technology Group, Inc.
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.
SUE BROPHY has been Controller and Chief Accounting Officer 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. Ms. Brophy holds a Bachelor of Arts
degree in Biology, a Master of Science degree in Accounting, and has been a
licensed CPA since 1995.
7
<PAGE>
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During the 1998 fiscal year, two meetings of the Board of Directors
were held, including regularly scheduled and special meetings. During fiscal
1998, 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 1998, 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, Sanford
Schwartz and Charles J. Weber. No member of the Audit Committee receives any
additional compensation for his services as a member of that Committee.
During fiscal 1998, the Audit Committee held one meeting. 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 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 1998, 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 1998 the Compensation Committee
held three 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.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
THE ELECTION OF THE NOMINEES FOR DIRECTORS
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information for the Company's
fiscal periods ended December 31, 1998 and December 31, 1997, 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
$100,000 (the "Named Executive Officers").
TABLE I
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
-------------------------------------------------
Annual Compensation Awards Payouts
-------------------------------------- ------------------------ ------------------------
Other Restricted LTIP
Name and Annual Stock Options All Other
Principal Salary Bonus Compensation Award(s) /Payouts Compensation
Position Year ($) ($) ($) ($) SARs ($) ($)
- --------------------- -------- -------------- --------- ------------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles S. Leavell,
Chairman and 1998 $120,000 -0- -0- -0- -0- -0- -0-
CEO 1997 90,000 -0- -0- -0- -0- -0- -0-
Howard Hamburg, VP
1998 $115,978 -0- -0- -0- -0- -0- -0-
1997 $112,516 -0- -0- -0- -0- -0- -0-
</TABLE>
(1) All executive officers of the Company participate in the Company's
group health insurance plan. However, no Named Executive Officer
received perquisites and other personal benefits which, in the
aggregate, exceeded the lesser of either $50,000 or 10% of the total of
annual salary and bonus paid during the respective years.
9
<PAGE>
OPTIONS GRANTED DURING FISCAL 1998
The following table shows option grants during fiscal 1998 to the
named executive officers of the Company.
<TABLE>
<CAPTION>
Options Granted Percent of Total Exercise Expiration
Name in Fiscal 1998 Options Granted Price Date
---- --------------- ---------------- -------- ----------
<S> <C> <C> <C> <C>
Charles S. Leavell 40,000 14% 0.81 2005
16,000 6% 0.81 2003
Howard Hamburg 5,000 2% 0.31 2003
</TABLE>
AGGREGATED OPTION EXERCISES DURING FISCAL 1998 AND FISCAL YEAR-END OPTION VALUES
The following table provides information related to the number and
value of options held by the Named Executive Officers as of December 31,
1998. The Company does not have any outstanding stock appreciation rights.
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised In-the-
Options/SARs at Money Option/SARs
Value FY-end (#) at FY-End ($)(1)
Shares Acquired Realized Exercisable/ Exercisable/
Name on Exercise (#) ($) Unexercisable Unexercisable
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charles S. Leavell -0- $-0- 0/56,000 $0/$0
Howard Hamburg -0- $-0- 0/5,000 $0/$638
</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.
REPRICING OF STOCK OPTIONS
During June 1998, the Board of Directors of the Company approved a
repricing of stock options that had been previously granted to certain
employees, directors and consultants of the Company, including Charles S.
Leavell and Howard Hamburg. The Board of Directors' decision to reprice such
options was based on its view that such options are an integral part of the
10
<PAGE>
Company's compensation to such individuals. All of such options were repriced
to $.81 per share, the market price of the Company's common stock on the date
of the repricing.
EMPLOYMENT AGREEMENTS
Effective December 11, 1998 the Company entered into an Employment
Agreements with Charles S. Leavell, CEO, and J. Stanley Gilbert, President
and COO. The agreements become effective at such time as a change of control
(as defined by the acquisition by any individual, entity or group of 30% of
more of the then outstanding shares of common stock of the Company or the
combined voting power of the then outstanding voting securities of the
Company) takes place. These agreements have a term of three years beginning
with a change in control of the Company.
DIRECTOR COMPENSATION
During the fiscal year ended December 31, 1998, 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 outside directors
representing the right to acquire up to 8,000 shares (retroactively adjusted
for the February 1998 one-for-five reverse stock split) for each year that a
director serves on the Board. These options were granted in lieu of cash
compensation. Directors who are also executive officers of the Company
receive no additional compensation for their services as Directors.
GELLER AGREEMENT
Effective April 1, 1994, the Company appointed Robert M. Geller to
serve on the Board of Directors' of the Company. As a Director, Mr. Geller
receives compensation as outlined in the above section entitled Director
Compensation. In addition, Mr. Geller provides consulting services to the
company. For these services, Mr. Geller received cash compensation in the
amount of $4,420 in fiscal 1997 and $22,950 in 1998.
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 $4.50 per share or
70% of the fair market value of the Company's Common Stock at the time of
conversion. The debenture holders were also granted warrants to
11
<PAGE>
purchase an aggregate of 200,000 (pre-split) shares of the Company's Common
Stock at the lesser of $3.00 per share or 70% of the fair market value of the
Company's Common Stock at the date of exercise of the warrants. 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 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 employed Mr. Gaiti and Ms. Hope as officers
through October 31, 1998. 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.
SHORT-TERM NOTES
During February and March 1998, eight private investors loaned the
Company an aggregate of $498,000 pursuant to short-term loans payable July 1,
1998 through August 31, 1998. The loans were secured by substantially all of
the Company's assets other than its real estate and bear interest at 6% per
quarter. In addition, the lenders were granted a five-year warrant to
purchase one share of the Company's Common Stock at $1.50 per share for each
$5.00 loaned to the Company. Charles S. Leavell, Chairman of the Board of
Directors, loaned $100,000 to the Company pursuant to this arrangement and
two directors and two officers of the Company loaned, in the aggregate, an
additional $198,000 to the Company pursuant to this arrangement.
During the first four months of fiscal 1999 the Company raised $500,000 of
short-term capital. These funds were provided by Charles S. Leavell
($100,000), Chairman of the Board of Directors, two directors and two
officers of the Company (an aggregate of $225,000) and three other investors.
The loans allow interest at 4.5% per quarter and are secured by existing
monies and future revenues from the Company's Faires. The investors also were
granted a five-year warrant to purchase one share of common stock for each
$5.00 loaned to the Company at an exercise price equal to the average closing
bid price for the Company's common stock for the five business days
immediately preceding the closing of each loan.
The Company believes that the foregoing transactions were on terms as
favorable to the Company as could have been obtained from non-affiliated
parties.
12
<PAGE>
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 342,000 to 750,000. 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 5 officers, 6 directors, 50
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 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 July 13, 1999, options for the purchase of an aggregate of
575,033 shares of Common Stock were outstanding under the 1993 Plan, held by
57 persons, with per share exercise prices ranging from $.31 to $27.50. (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.
13
<PAGE>
STOCK OPTION AWARDS UNDER THE
<TABLE>
<CAPTION>
RENAISSANCE ENTERTAINMENT CORPORATION 1993 STOCK INCENTIVE PLAN
- -----------------------------------------------------------------------------------------------
Name and Position Number of Options
----------------- -----------------
<S> <C>
Charles S. Leavell, Chief Executive Officer, Chief 166,000 shs.
Financial Officer, holder of 5% of outstanding
options and a nominee for director
Sanford L. Schwartz, nominee for director 24,000 shs.
Robert M. Geller, holder of 5% of outstanding options and nominee
for director 82,333 shs.
Charles J Weber, nominee for director 24,000 shs.
J. Stanley Gilbert, President and Chief Operating Officer and 155,000 shs.
holder of 5% of outstanding options
Howard Hamburg, Vice President 5,000 shs.
Current Executive Officers, as a group (4 persons) 341,000 shs.
Current Directors, who are not also executive officers, 130,333 shs.
as a group (3 persons)
Current Employees, excluding executive officers, as
a group (46 persons) 72,000 shs.
</TABLE>
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
14
<PAGE>
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 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
15
<PAGE>
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
On May 1, 1991, comprehensive new rules promulgated by the
Securities and Exchange Commission relating to the reporting of securities
transactions by directors and officers became effective. To the Company's
knowledge, based solely on a review of the copies of such reports furnished
to the Company and written representations that no other reports were
required, during the fiscal year ended December 31, 1998, all required
reports were timely filed, except that due to administrative oversight,
Howard Hamburg reported one transaction reportable on Form 5 late; and
Charles S. Leavell, Robert M. Geller, Sanford L. Schwartz, Charles J. Weber,
J. Stanley Gilbert, Sue Brophy and Gloria Constantin each reported two
transactions reportable on Form 5 late. In addition, Charles S. Leavell,
Robert M. Geller, Sanford L. Schwartz, and J. Stanley Gilbert each filed one
Form 4, each of which reported one transaction, late.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be considered for inclusion in
the proxy statement for presentation at our 2000 annual meeting must be
received by us by April 22, 2000. The proposal must be in accordance with the
provisions of Rule 14a-8 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934. We suggest that you
submit your proposal by certified mail -- return receipt requested. If you
intend to present a proposal at our 2000 annual meeting without including
such proposal in our proxy statement, then you msut provide us with notice of
such proposal no later than June 1, 2000. We reserve the right to reject,
rule out of order, or take other appropriate action with respect to any
proposal that does not comply with these and other applicable requirements.
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: July 22, 1999 BY ORDER OF THE BOARD OF DIRECTORS
By: /s/ Charles S. Leavell
-----------------------------------------
Charles S. Leavell
Chief Executive Officer
16
<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 July 22, 1999, 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 July 13, 1999, at the Annual Meeting of Shareholders to be
held on August 16, 1999, and adjourned to Wednesday, September 8, 1999, at
275 Century Circle, Suite 102, Louisville, Colorado, at 10:00 a.m. Mountain
Time, and at any adjournment thereof.
1. AUTHORITY TO VOTE FOR ELECTION OF / / GRANT / / WITHHOLD
CHARLES S. LEAVELL, ROBERT M. GELLER,
SANFORD L. SCHWARTZ, CHARLES J. WEBER,
J. STANLEY GILBERT AND THOMAS BROWN
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
RENAISSANCE ENTERTAINMENT
CORPORATION 1993 INCENTIVE
STOCK PLAN.
THE BOARD RECOMMENDS YOU VOTE FOR THIS PROPOSAL.
3. IN THEIR DISCRETION, THE PROXIES ARE / / FOR / / AGAINST / / ABSTAIN
AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING.
(CONTINUED ON OTHER SIDE)
<PAGE>
(CONTINUED FROM OTHER SIDE)
This Proxy, when properly executed, will be voted in the manner
directed on the Proxy by 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)
---------------------------------------
(Signature, if held jointly)
Dated: __________________________, 1999
UNLESS YOU HAVE PREVIOUSLY RETURNED A PROXY IN RESPONSE TO OUR EARLIER
MAILING, PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED RETURN ENVELOPE. IF YOU HAVE RETURNED A PROXY IN RESPONSE TO OUR
EARLIER MAILING, IT IS NOT NECESSARY TO SEND A SECOND PROXY UNLESS YOU DESIRE
TO CHANGE YOUR VOTE.
GP:11715 v2
