Duplicated and Revised ...DSBMAS12.17APROXY 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))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
CORPORATE RENAISSANCE GROUP, INC.
___________________________________________
(Name of Registrant as Specified In Its Charter)
Not Applicable
______________________________________________________________
(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)(1) 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>
CORPORATE RENAISSANCE GROUP, INC.
1185 Avenue of the Americas, 18th Floor
New York, New York 10036
NOTICE OF ANNUAL MEETING
To Be Held February 9, 1998
To all Stockholders of
CORPORATE RENAISSANCE GROUP, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of CORPORATE
RENAISSANCE GROUP, INC., a Delaware corporation (the "Company"), will be held at
the offices of M.D. Sass, 1185 Avenue of the Americas, 18th Floor, New York, New
York, on Monday, February 9, 1998 at the hour of 10:00 A.M. for the following
purposes:
1. To elect eight directors of the Company for the ensuing year.
2. To consider and vote upon a proposal to ratify the selection of Ernst
& Young LLP as independent auditors for the Company's fiscal year ending
September 30, 1998.
3. To transact such other business as may properly come before the
meeting.
All stockholders are cordially invited to attend; however, only
stockholders of record at the close of business on January 2, 1998 are entitled
to vote at such meeting or any adjournment thereof.
MARTIN E. WINTER
Secretary
New York, New York
January 9, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE ENCLOSED
PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY, AND RETURN
IT TO THE COMPANY IN THE PRE-ADDRESSED ENVELOPE PROVIDED FOR THAT PURPOSE. ANY
STOCKHOLDER MAY REVOKE HIS PROXY AT ANY TIME BEFORE THE MEETING BY WRITTEN
NOTICE TO SUCH EFFECT, BY SUBMITTING A SUBSEQUENTLY DATED PROXY OR BY ATTENDING
THE MEETING AND VOTING IN PERSON.
<PAGE>
CORPORATE RENAISSANCE GROUP, INC.
1185 Avenue of the Americas, 18th Floor
New York, New York 10036
PROXY STATEMENT
The Board of Directors presents this Proxy Statement to all stockholders and
solicits their proxies for the Annual Meeting of Stockholders (the "Meeting") of
Corporate Renaissance Group, Inc. (the "Company") to be held on Monday, February
9, 1998.
All proxies duly executed and received will be voted on all matters
presented at the Meeting in accordance with the specifications made in such
proxies. In the absence of specified instructions, proxies so received will be
voted (1) FOR each of the named nominees to the Company's Board of Directors,
and (2) FOR the proposal to ratify the selection of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending September 30, 1998.
The Board does not know of any other matters that may be brought before the
Meeting nor does it foresee or have reason to believe that proxy holders will
have to vote for substitute or alternate nominees. In the event that any other
matter should come before the Meeting or any nominee is not available for
election, the persons named in the enclosed Proxy will have discretionary
authority to vote all proxies not marked to the contrary with respect to such
matters in accordance with their best judgment. A proxy may be revoked at any
time before being voted by written notice to such effect received by the Company
at the address set forth above, attention: Martin E. Winter, Secretary, by
delivery of a subsequently dated proxy or by a vote cast in person at the
Meeting. The Company will pay the entire expense of soliciting proxies, which
solicitation will be by use of the mails. It is anticipated that these proxy
materials will be mailed to stockholders of the Company on or about January 9,
1998.
The total number of shares of Common Stock of the Company outstanding as of
January 2, 1998 (the "Record Date") was 940,350 shares. The Common Stock is the
only class of securities of the Company entitled to vote, each share of Common
Stock being entitled to one noncumulative vote. A majority of the shares of
Common Stock outstanding and entitled to vote as of the Record Date, or 470,176
shares, must be present at the Meeting in person or by proxy in order to
constitute a quorum for the transaction of business. The affirmative vote of a
plurality of the shares of Common Stock present and entitled to vote at the
Meeting is required for the election of directors. The affirmative vote of a
majority of the shares of Common Stock present and entitled to vote at the
Meeting is required to pass upon the proposal to ratify the selection of Ernst &
Young LLP as independent auditors for the Company. Pursuant to Delaware law,
abstentions and broker non-votes are counted as present for purposes of
determining the presence of a quorum. However, abstentions are treated as
present and entitled to vote, and thus have the effect of a vote against a
matter. A broker non-vote on a matter is considered not entitled to vote on
that matter, and thus is not considered when counting votes cast on the matter.
<PAGE>
A list of stockholders entitled to vote at the Meeting will be available at
the Company's offices, 1185 Avenue of the Americas, 18th Floor, New York, New
York 10036, for a period of ten days prior to the Meeting and at the Meeting
itself for examination by any stockholder.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the Company's
Common Stock beneficially owned as of the Record Date by (i) each person known
by the Company to own beneficially or exercise voting or dispositive control
over 5% or more of the Company's Common Stock, (ii) each of the nominees for
director of the Company, (iii) the Company's Chief Executive Officer, and (iv)
all executive officers and director nominees as a group:
Amount and
Name and Address Nature
of Beneficial Stockholder of Beneficial Percentage of
or Identity of Group(1) Ownership Common Stock
Executive Officers and Directors:
Martin D. Sass 71,300 7.6
Hugh R. Lamle 48,600 5.2
James B. Rubin -0- -0-
Thomas M. Garvin -0- -0-
Lawrence W. Leighton 1,000 *
Edward Lowenthal 3,000 *
Daniel R. Mazziota 200 *
Larry Dinkin -0- -0-
All executive officers and director
nominees as a group (nine persons) 124,300 (2) 13.2
5% or Greater Shareholders:
Curators Partners, L.P. 94,034 (3)(4) 10.0
420 Lexington Avenue
New York, New York
Robert Schneider 52,945 (3)(4) 5.6
2 Broadway
New York, New York 10004
* Less than one percent
(1) Unless otherwise indicated, the address of each beneficial owner is c/o the
Company, 1185 Avenue of the Americas, 18th Floor, New York, New York 10036.
(2) Includes 200 shares of Common Stock held by Martin E. Winter, the Company's
Secretary-Treasurer.
(3) Based on a Schedule 13D filed with the Securities and Exchange Commission
(the "SEC").
(4) Includes 45,000 shares of Common Stock held by certain accounts managed by
Curators Capital Management, Inc., an affiliate of Curators Partners, L.P.
(5) Includes 12,000 shares of Common Stock owned jointly with Mr. Schneider's
spouse. Excludes 18,650 shares of Common Stock owned by Mr. Schneider's spouse
over which Mr. Schneider disclaims beneficial ownership and 31,449 shares owned
by RAS Securities Corp., a registered broker-dealer, acquired in its ordinary
course of business and over which Mr. Schneider has voting and dispositive
power.
<PAGE>
ELECTION OF DIRECTORS
Eight directors are to be elected at the Meeting to serve until the next
annual meeting of the Company's stockholders and until their respective
successors shall have been elected and shall have qualified or until their
earlier resignation, removal from office or death.
Nominees
The following table sets forth as of the Record Date, for each of the
following nominees for director, such person's age, position with the Company
and length of service as director:
Name and Age Position with
the Company Director Since
Martin D. Sass (55)* Chairman of the Board,
Chief Executive Officer and Director 1994
Hugh R. Lamle (52)* Executive Vice President and Director 1994
James B. Rubin (44)* Senior Vice President and Director 1994
Thomas M. Garvin (61) Director 1994
Lawrence W. Leighton (63) Director 1994
Edward Lowenthal (53) Director 1994
Daniel R. Mazziota (60) Director 1994
Larry Dinkin (54) Director Nominee --
* Director who is an "Interested Person" within the meaning of the Investment
Company Act of 1940 (the "1940 Act").
<PAGE>
The following is a detailed description of the profession and business
background of each director nominee.
MARTIN D. SASS is an executive officer and principal of M.D. Sass Investors
Services, Inc. (the "Investment Adviser"), the Company's investment adviser, and
various affiliated registered investment advisers and other entities which
comprise the M.D. Sass organization ("M.D. Sass"), founded by Mr. Sass in 1972.
Mr. Sass also serves as a consultant to and a member of the Partnership Board of
Chase & MD Sass Partners ("Chase/MD Sass"), and as Co-Chairman and Chief
Executive Officer of Resurgence Asset Management, L.L.C. ("Resurgence"). Prior
to founding M.D. Sass, Mr. Sass was President and principal shareholder of
Neuwirth Management and Research Corp. from 1969 to 1972, where he managed
several portfolios and mutual funds. Mr. Sass was also a security analyst at
Argus Research Corp. from 1963 to 1969, where he founded and directed the
Special Situations Department. Mr. Sass holds a B.S. degree in Accounting from
Brooklyn College, and has also studied finance in graduate programs in New York
University and City College of New York.
HUGH R. LAMLE is Executive Vice President and a principal of M.D. Sass,
which he joined in 1974. Mr. Lamle is responsible for the formulation of fixed
income and quantitative investment policy and strategy, directing the management
at M.D. Sass of debt securities portfolios and directing the firm's new products
research efforts. Mr. Lamle also serves as the President and Chief Investment
Officer of Chase/MD Sass and President of Resurgence. He also serves as a
public director of the Finex division of the New York Cotton Exchange. Prior to
joining M.D. Sass, Mr. Lamle in 1972 founded Lenox Capital Management, the
investment management subsidiary of DuPont Glore Forgan, Inc. He currently
serves on the Board of the FINEX Division of the New York Cotton Exchange. Mr.
Lamle holds a B.A. degree in Political Science and Economics from Queens College
and an M.B.A. degree in Finance and Investments from Baruch College.
JAMES B. RUBIN joined M.D. Sass as Senior Managing Director in 1989, with
over 15 years experience in advising firms in reorganizations and other special
situations. At M.D. Sass, Mr. Rubin is head of the firm's Distressed Securities
Division and serves as Co-Chairman and Chief Investment Officer of Resurgence.
Mr. Rubin also serves as a director of Computervision, Inc. and Seaman Furniture
Company, Inc., and was Chairman of the Board of Directors of Ranger Industries,
Inc. from February 1996 to July 1997. From 1986 until joining M.D. Sass, he was
the principal of J.B. Rubin and Company. From 1985 to 1986, Mr. Rubin was a
Senior Financial Analyst with Smith Vasiliou and its affiliates, including the
distressed securities brokerage firm of R.D. Smith & Company, Inc. Mr. Rubin is
a graduate of Cornell University, with an undergraduate degree in Industrial
Engineering. He also participated in graduate M.B.A. studies in Finance at
Cornell and Pace Universities.
THOMAS M. GARVIN currently has an industrial partnership with Ripplewood
Holdings L.L.C., an equity investment fund. Through that fund, he has made
direct investments in six leveraged acquisitions over the last two years in
pursuit of a focused strategy in the food industry. He is Chairman and Chief
Executive Officer of the platform company, Edwards Fine Foods. Formerly, Mr.
Garvin served in various executive capacities at Keebler Company, the second
largest U.S. manufacturer and marketer of cookies and crackers, from 1969 to
1993, including those of President and Chief Executive Officer from 1978 to 1993
and Chief Operating Officer from 1976 to 1978. During his tenure at Keebler
Company, the company progressed from a single product biscuit company to its
current position of prominence in the baking and snack industries. Mr. Garvin
holds B.S. and M.B.A. degrees from Loyola University and is a certified public
accountant.
<PAGE>
LAWRENCE W. LEIGHTON is a Senior Advisor at Bentley Associates, an
investment bank specializing in private transactions. Mr. Leighton was a
Managing Director of L.M. Capital, an investment banking and buy-out firm, from
September 1994 to January 1996. From January 1994 to December 1994, he also was
Vice Chairman of 21, Inc., a publicly-held company. From January 1989 to
January 1994, Mr. Leighton was President and Chief Executive Officer of UI USA,
the United States merchant bank of Credit Agricole, a large French-based bank.
From 1982 until joining UI USA, Mr. Leighton was Managing Director responsible
for the international mergers and acquisitions activity of Chase Investment
Bank. From 1977 until 1982, Mr. Leighton was a limited partner in the mergers
and acquisitions department of Bear, Stearns & Co. and from 1974 until 1977, he
was Director of Strategic Planning of Norton Simon, Inc. Mr. Leighton is a
graduate of Princeton University with a B.S.E. degree in Engineering and holds
an M.B.A. degree from Harvard Business School.
EDWARD LOWENTHAL is a founder, and since 1992 has served as trustee and
President, of Wellsford Residential Property Trust ("WRP"), a New York Stock
Exchange listed real estate investment trust. In 1992, WRP succeeded to the
business of Wellsford Group, Inc.'s (the "Wellsford Group") multifamily
affiliates, which had acquired and operated multifamily properties in the
Southwestern and Northwestern states since 1988. Mr. Lowenthal serves as a
director of United American Energy Corporation, a major developer, owner and
operator of hydroelectric and other alternative energy facilities; a director of
Omega Healthcare, Inc., a healthcare real estate investment trust; and as a
trustee of Corporate Realty Income Trust, a real estate investment trust
sponsored by Smith Barney Shearson Inc. Mr. Lowenthal is a member of the Board
of Governors of the National Association of Real Estate Investment Trusts.
Prior to Wellsford Group's formation, Mr. Lowenthal was engaged in the practice
of law for 15 years, and was a partner of the New York City law firm of
Robinson, Silverman, Pearce, Aronsohn & Berman from 1981 to 1984. In 1984 Mr.
Lowenthal entered investment banking as a Managing Director of A.G. Becker
Paribas and then as a partner of Bear Stearns & Co. Inc. As an investment
banker, he was active in structuring and negotiating transactions and raising
the equity in a number of large real estate equity private placements. Mr.
Lowenthal holds a B.A. degree from Case Western Reserve University and a J.D.
degree from Georgetown University Law Center.
DANIEL R. MAZZIOTA is principal of RSA Executive Search ("RSA"), which was
founded in 1978. RSA specializes in recruitment of key executives and
management personnel in the consumer goods and services, healthcare and
pharmaceutical, finance, electronics and telecommunications industries. In
1967, Mr. Mazziota founded Microwave Power Devices, Inc. ("MPD"), which was sold
to M/A-Com, Inc. in 1981. Mr. Mazziota continued as President of MPD until
1987, when he became Chairman of RSA. Mr. Mazziota also serves as President of
IDM Consulting, which provides business consulting in the high technology
mergers and acquisitions field. Mr. Mazziota holds Bachelors and Masters
degrees in Electrical Engineering from New York Polytechnic Institute.
LARRY DINKIN serves as Chairman of Integrated Environmental Technologies,
L.L.C. ("IET"), a company which has developed systems designed to convert a
variety of wastes into glasslike material, recoverable metals and electricity.
Mr. Dinkin joined IET in 1995. In 1985, Mr. Dinkin founded Marie Callender
Retail Foods, where he was the key individual involved in that company's growth
from a startup in 1987 with $2.0 million of venture capital to a business with
over $160 million in sales in 1994. He served as President of Marie Callender
until September, 1994, when that company was sold to Con Agra for over $150
million. Mr. Dinkin has an extensive background in business startup and
management, and has been the key individual involved in the startup of three
successful companies, including Marie Callender. Mr. Dinkin holds a B.A. degree
in Sociology and Anthropology from the City College of New York.
Guy E. Waldvogel (who served as a director of the Company since 1994) and
the Company have mutually agreed that Mr. Waldvogel will not be renominated for
election as a director of the Company based on his commitments to other matters.
<PAGE>
Meetings of the Board of Directors
During the fiscal year ended September 30, 1997, the Board of Directors of
the Company held four meetings. All directors who are standing for election
were present for at least 75% of the meetings of the Board of Directors held
during the fiscal year ended September 30, 1997.
Indemnification of Directors and Officers
As permitted by Delaware law, the Company's Certificate of Incorporation
contains an article limiting the personal liability of directors. The
Certificate of Incorporation provides that a director of the Company shall not
be personally liable for monetary damages for a breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the General Corporation Law of the State of Delaware, which prohibits the
unlawful payment of dividends or the repurchase or redemption of stock, or (iv)
for any transaction from which the director derived an improper personal
benefit. The Company's Certificate of Incorporation also provides that the
Company will indemnify all persons (including officers, directors and employees)
whom it is empowered to indemnify pursuant to the provisions of Section 145 of
the Delaware General Corporation Law (or any similar provision of applicable law
at the time in effect) to the full extent permitted thereby. The foregoing
provisions are subject, however, to Section 17(h) of the 1940 Act which
provides, in part, that neither the Certificate of Incorporation nor the by-laws
of any business development company (such as the Company) shall contain a
provision which protects or purports to protect any officer or director of such
business development company against any liability to such company or its
security holders to which be would otherwise be subject due to his willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. The Company currently maintains $5.0
million of officer and director liability insurance.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers, directors and holders of more than ten percent
of the Company's Common Stock, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and Nasdaq. Such persons
are required to furnish the Company with copies of all Section 16(a) forms they
file. During the fiscal year ended September 30, 1997, all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with.
The Board of Directors recommends a vote "FOR" each of the proposed
nominees for the Board of Directors.
<PAGE>
EXECUTIVE COMPENSATION
Compensation of Executive Officers and Directors
No cash compensation was paid by the Company to any of its executive
officers during the fiscal years ended September 30, 1997 and 1996 and the
period from November 1, 1994 (commencement of operations) to September 30, 1995.
It is not anticipated that executive officers will receive direct cash
compensation in the foreseeable future.
Each director who is not an executive officer of the Company is compensated
for his services at a fee of $10,000 per annum. Each director is also
reimbursed for travel and other out-of-pocket disbursements actually incurred in
the business of the Company.
Executive officers and directors of the Company are permitted to retain any
compensation received for services to other companies, including companies in
connection which the Company invests and to which it renders managerial
assistance.
Financial Advisory Agreement and Fees
The Investment Adviser
The Company has retained the Investment Adviser as the Company's investment
adviser to identify, negotiate, manage and liquidate investments for the
Company. The Company invests only in transactions recommended by the Investment
Adviser.
The Investment Adviser is a registered investment adviser under the
Investment Advisers Act of 1940, as amended. The Investment Adviser is part of
a group of affiliated investment advisers and other affiliated entities
comprising M.D. Sass. Founded in 1972, M.D. Sass is engaged in investment
management for in excess of 100 clients, including pension and profit sharing
funds, municipal employee benefits funds, insurance companies, endowment and
charitable funds, large corporations and wealthy individuals. M.D. Sass
currently has approximately $11 billion in assets under management.
The Investment Adviser and certain other M.D. Sass affiliates currently
serve as general partners of M.D. Sass Re/Enterprise Partners, L.P.
("Re/Enterprise Partners"), M.D. Sass Corporate Resurgence Partners, L.P.
("Resurgence Partners"), and M.D. Sass Re/Enterprise-II L.P. ("Re/Enterprise-
II"), private limited partnerships which have investment objectives similar to
that of the Company, achieving long-term capital appreciation of its assets by
investing primarily in securities of companies that are experiencing significant
financial or business difficulties.
<PAGE>
Re/Enterprise Partners, formed in October 1989, had approximately $130
million in assets as of September 30, 1997. Resurgence Partners completed its
initial closing in May 1997, with committed capital of approximately $160
million. Re/Enterprise-II, formed in February 1996, had approximately $30
million in assets as of September 30, 1997. Re/Enterprise Partners was a member
of a group which acquired a controlling interest in Seaman Furniture Company,
Inc., a furniture retailer headquartered in the New York City area, and
Re/Enterprise Partners assisted such company in a financial restructuring.
Re/Enterprise Partners also participated in the financial restructurings of
other companies, including Memorex Telex Corp., Emerson Radio Corp., Ranger
Industries, Inc. (formerly known as Coleco, Inc.), SPI Holding, Inc., Leaseway
Transportation Corp. and Forstmann & Company, Inc.
In addition to the Re/Enterprise and Resurgence partnerships, the
Investment Adviser and/or other affiliates of M.D. Sass serve as general
partners of a more aggressive, higher-risk private limited partnership that
invests in financially troubled companies, and other private limited
partnerships that invest in municipal and government securities and distressed
real estate that appears to have a potential for recovery, and as investment
adviser to two private offshore investment companies pursuing investment
strategies similar to the Re/Enterprise and Resurgence partnerships and the
Company, as well as two corporate pension funds of a Fortune 100 company.
The principals of the Investment Adviser and other affiliates of M.D. Sass
are Martin D. Sass and Hugh R. Lamle, each of whom serves as an officer and
director of the Company. James B. Rubin and Martin E. Winter, officers of the
Investment Adviser and other affiliates of M.D. Sass, serve as officers of the
Company. In addition, Mr. Rubin also serves as a director of the Company and is
a principal of Resurgence.
The offices of the Investment Adviser are located at 1185 Avenue of the
Americas, 18th Floor, New York, New York 10036, and its telephone number is
(212) 730-2000.
The Financial Advisory Agreement
The Company is party to a Financial Advisory Agreement with the Investment
Adviser (the "Financial Advisory Agreement"). The Investment Adviser's duties
under the Financial Advisory Agreement include locating, structuring, acquiring,
monitoring and disposing of investments for the Company. The Company only makes
investments recommended by the Investment Adviser. In addition, the Investment
Adviser also provides administrative services to the Company, including all
necessary executive, administrative, internal accounting and support services
and furnishes the Company with necessary office space. The activities of the
Investment Adviser on behalf of the Company are subject to the supervision of
the independent Directors of the Company.
<PAGE>
Pursuant to the Financial Advisory Agreement, the Investment Adviser
receives a base fee of $200,000 per annum for furnishing the Company with the
administrative services described above.
In addition to the base fee, the Investment Adviser receives an incentive
fee for its investment advisory services equal to 20% of net new appreciation,
if any, in the net asset value of the shares of Common Stock outstanding,
adjusted for all operating expenses, including accruals for any tax liabilities
on income or gains from portfolio transactions. The initial incentive fee
calculation was made in November 1995 and a new calculation has been and will
continue to be made at the end of each calendar quarter thereafter, with the
Investment Adviser receiving 20% of any net new appreciation occurring during
the preceding four calendar quarters. Thus, the fee is computed and paid on a
"rolling quarter" basis.
At any time the incentive fee is to be calculated, if the net asset value
per share previously has reached a level at which an incentive fee was paid (a
"previous high peak"), an additional incentive fee will be paid only on the
incremental appreciation of the shares of Common Stock over the shares' net
asset value after payment of the previous incentive fee at such peak. In no
event will an incentive fee be paid for recoupment of losses. Thus, if the net
asset value of the shares of Common Stock falls below the initial net asset
value, or the previous high peak at which the incentive fee was paid (less the
incentive fee paid at such level), no incentive fee will be due the Investment
Adviser. The Investment Adviser will only be entitled to a further incentive
fee if the net asset value of the shares increases beyond the initial net asset
value, or its net asset value following payment of the incentive fee at the
previous high peak, as the case may be. Notwithstanding the foregoing,
incentive fees payable to the Investment Adviser under the Financial Advisory
Agreement will not exceed the maximum amount which the Investment Adviser is
entitled to receive under the 1940 Act. During the fiscal year ended September
30, 1997, the Company paid the Investment Adviser the base fee of $200,000.
During the fiscal year ended September 30, 1997, no incentive fee has been
accrued since the Company's net asset value has been below the previous high
peak.
The Investment Adviser bears the expense of maintaining the staff necessary
for performing its obligations under the Financial Advisory Agreement and all
other expenses associated with its duties as Investment Adviser. Other than
fees payable under the Financial Advisory Agreement and Investment Banking
Agreement, the Company bears no operating expenses other than normal operating
expenses such as legal and auditing fees, taxes and all direct expenses related
to an investment including all investment, legal and accounting expenses.
The Financial Advisory continues from year to year if approved by a
majority of independent directors and unless not less than 30 days' prior
written notice is given by a party of its intention not to renew. In November
1997, the independent directors of the Company unanimously approved the renewal
of the Financial Advisory Agreement for a one-year period. The Financial
Advisory Agreement is not assignable and may be terminated by either party upon
60 days prior written notice given to the other party.
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Board of Directors does not have a Compensation Committee and decisions
as to compensation are made by the Board of Directors as a whole. See
"Financial Advisory Agreement and Fees - The Investment Adviser" above with
respect to relationships between certain of the Company's executive officers and
directors and the Investment Adviser.
Report on Executive Compensation
The following report is submitted by the Board of Directors, the membership
of which is set forth below the report:
There is no Compensation Committee of the Board of Directors or other
committee of the Board performing equivalent functions. Compensation decisions
are made by the Board of Directors as a whole. No cash compensation was paid by
the Company to any of its executive officers during the fiscal year ended
September 30, 1997 and it is not anticipated that executive officers will
receive direct cash compensation in the foreseeable future. Executive officers
of the Company are permitted to retain any compensation received for services to
other companies, including companies in which the Company invests and to which
it renders managerial assistance.
Martin D. Sass
Hugh R. Lamle
James B. Rubin
Thomas M. Garvin
Lawrence W. Leighton
Edward Lowenthal
Daniel R. Mazziota
Guy E. Waldvogel
<PAGE>
Stock Performance Graph
The following line graph compares, from October 25, 1994, the first day on
which the Company's Common Stock was publicly traded, through September 30,
1997, the cumulative total return among the Company, companies comprising the
Nasdaq Market Index and to the Media General Group Index of closed-end funds
(the "MG Group Index"), based on an investment of $100 on October 25, 1994 in
the Company's Common Stock and each index, and assuming reinvestment of all
dividends, if any, paid on such securities. Historic stock price is not
necessarily indicative of future stock price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN
CORPORATE RENAISSANCE GROUP, INC.,
NASDAQ MARKET INDEX AND MG GROUP INDEX
September 30,
October 25, 1994 1995 1996 1997
Corporate Renaissance
Group, Inc. $100.00 $ 93.90 $ 78.00 $ 54.88
Nasdaq Market Index $100.00 $111.89 $124.28 $148.60
MG Group Index $100.00 $120.30 $140.45 $190.60
<PAGE>
Certain Relationships and Related Transactions
See "Financial Advisory Agreement and Fees" with respect to the Financial
Advisory Agreement entered into with the Investment Adviser.
The Company invests from time to time jointly with affiliates of the
Investment Adviser subject to restrictions under the 1940 Act and conditions set
forth in an exemptive order granted by the SEC.
The Company from time to time also effects securities sales to or purchases
from affiliates of the Investment Adviser pursuant to a plan adopted in
accordance with Rule 17a-7 under the 1940 Act.
<PAGE>
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Unless instructed to the contrary, the persons named in the enclosed proxy
intend to vote the same in favor of the ratification of the selection of Ernst &
Young LLP as independent auditors to the Company for the fiscal year ending
September 30, 1998.
It is anticipated that representatives of Ernst & Young LLP will attend the
meeting. Such persons will be afforded the opportunity to make a statement
and/or respond to appropriate questions from stockholders.
The Board of Directors recommends a vote "FOR" ratification of the
selection of Ernst & Young LLP as independent auditors to the Company for the
fiscal year ending September 30, 1998.
<PAGE>
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 1998 Annual
Meeting of Stockholders pursuant to the provisions of Rule 14a-8 of the
Securities and Exchange Commission, promulgated under the Securities Exchange
Act of 1934, as amended, must be received by the Company at its principal
executive offices by September 11, 1998 for inclusion in the Company's proxy
statement and form of proxy relating to such meeting.
MARTIN E. WINTER,
Secretary
New York, New York
January 9, 1998
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED, UPON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL
STATEMENTS THERETO. REQUESTS FOR COPIES OF SUCH REPORT SHOULD BE DIRECTED TO
SECRETARY, CORPORATE RENAISSANCE GROUP, INC., 1185 AVENUE OF THE AMERICAS, 18TH
FLOOR, NEW YORK, NEW YORK 10036.
<PAGE>
COMMON STOCK PROXY
CORPORATE RENAISSANCE GROUP, INC.
1185 Avenue of the Americas, 18th Floor
New York, New York 10036
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of shares of Common Stock of CORPORATE RENAISSANCE
GROUP, INC., a Delaware corporation (the "Company"), hereby appoints MARTIN D.
SASS and MARTIN E. WINTER, and each or either of them, the proxy or proxies of
the undersigned, with full power of substitution to such proxy and substitute,
to vote all shares of Common Stock of the Company which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of the Company to be held
at 10:00 A.M., local time, February 9, 1998, and at all adjournments thereof
with authority to vote said Common Stock on the matters set forth below:
The shares of Common Stock represented by this Proxy will be voted in the
manner directed herein by the undersigned stockholder, who shall be entitled to
one vote for each share of Common Stock held. If no direction is made, this
Proxy will be voted FOR each item listed below.
The Board of Directors recommends a vote FOR each proposal.
1. ELECTION OF DIRECTORS. Election of Martin D. Sass, Hugh R. Lamle,
James B. Rubin, Thomas M. Garvin, Lawrence W. Leighton, Edward Lowenthal, Daniel
R. Mazziota and Larry Dinkin.
____ FOR each nominee listed above (except as noted below).
____ WITHHOLD AUTHORITY to vote for all nominees listed above.
____ WITHHOLD AUTHORITY for each nominee printed below:
(please print)
2. Ratification of appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending September 30, 1998.
____ FOR ____ AGAINST ____ ABSTAIN
3. In their discretion, upon such other business as may be properly
brought before the meeting and each adjournment thereof.
(continued on reverse side)
<PAGE>
(continued from other side)
CORPORATE RENAISSANCE GROUP, INC.
THIS PROXY WILL BE VOTED AS SPECIFIED; IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR EACH OF THE MATTERS MENTIONED.
Dated:_________________________________________
_______________________________________________
(Signature)
_______________________________________________
(Signature)
PLEASE SIGN YOUR NAME EXACTLY AS IT APPEARS ON THE LEFT. EXECUTORS,
ADMINISTRATORS, TRUSTEES, GUARDIANS, ATTORNEYS AND AGENTS SHOULD GIVE THEIR FULL
TITLES AND SUBMIT EVIDENCE OF APPOINTMENT UNLESS PREVIOUSLY FURNISHED TO THE
COMPANY OR ITS TRANSFER AGENT. ALL JOINT OWNERS SHOULD SIGN.
PLEASE MARK, DATE, SIGN AND RETURN USING THE ENCLOSED ENVELOPE. YOUR PROMPT
ATTENTION WILL BE APPRECIATED
