SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ________)
Filed by the Registrant |X|
Filed by a Party other than the Registrant | |
Check the appropriate box:
| | Preliminary Proxy Statement | | Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
| | Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
RENAISSANCE ENTERTAINMENT CORPORATION
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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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(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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RE:NAISSANCE ENTERTAINMENT CORPORATION
275 Century Circle
Suite 102
Louisville, Colorado 80027
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 30, 2001
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Renaissance Entertainment Corporation, a Colorado corporation (the "Company"),
will be held on Tuesday, October 30, 2001, at 9:30 a.m. Mountain Time, at the
Company's offices, 275 Century Circle, Suite 102, Louisville, Colorado, for the
following purposes:
1. To elect five 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 750,000 to
1,250,000.
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 September 21, 2001 will be entitled to notice of, and to vote at,
the Annual Meeting or any adjournment thereof.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
AND RETURN IT IN THE ENCLOSED REPLY ENVELOPE AS PROMPTLY AS POSSIBLE.
BY ORDER OF THE BOARD OF
DIRECTORS
Sue Brophy
Chief Accounting Officer
September 21, 2001
PROXY STATEMENT
RENAISSANCE ENTERTAINMENT CORPORATION
275 Century Circle, Suite 102
Louisville, Colorado 80027
ANNUAL MEETING OF STOCKHOLDERS, OCTOBER 30, 2001, 9:30 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: Sue Brophy, Controller, 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) in favor of approving an amendment
to the Renaissance Entertainment Corporation 1993 Incentive Stock Plan to
increase the number of shares authorized under such plan from 750,000 to
1,250,000; 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, 2000 are being mailed to
stockholders on or about September 28, 2001.
3
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 September
21, 2001, 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 September 21, 2001,
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.
Name and Address Percent of
OF BENEFICIAL OWNER NUMBER OF SHARES CLASS (1)
------------------- ---------------- ---------
Charles S. Leavell 874,540 (2) 31.6%
275 Century Circle, Suite 102
Louisville, Colorado 80027
Robert M. Geller 124,333 (3) 5.5%
275 Century Circle, Suite 102
Louisville, Colorado 80027
Sanford L. Schwartz 59,870 (4) 2.7%
275 Century Circle, Suite 102
Louisville, Colorado 80027
Thomas G. Brown 33,000 (5) 1.5%
275 Century Circle, Suite 102
Louisville, Colorado 80027
J. Stanley Gilbert 590,287 (6) 21.8%
275 Century Circle, Suite 102
Louisville, Colorado 80027
All Directors & Officers as a Group 1,697,030 (7) 47.8%
(6 Persons)
4
(1) Shares not outstanding but deemed beneficially owned by virtue of the
individual's right to acquire them as of September 21, 2001, 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 176,000 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. Includes 75,874 shares of Common Stock held of record by Mr.
Leavell. Includes non-qualified options to purchase 166,000 shares.
Includes warrants to purchase 40,000 shares, 20,000 of which are held
by Leavell Management Group, Inc. Includes conversion rights to 416,666
shares of Common Stock, 41,667 of which are held by Leavell Management
Group, Inc. Mr. Leavell disclaims beneficial ownership of the
securities held by LMG for purposes of Section 16 under the Exchange
Act. This does not include warrants to purchase 40,000 shares owned by
an estate to which Mr. Leavell is a beneficiary.
(3) Includes non-qualified options to purchase 102,333 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 non-qualified options to purchase 44,000 shares
of Common Stock and warrants (owned by Creative Business Strategies) to
purchase 15,000 shares.
(5) Includes non-qualified options to purchase 28,000 shares of Common
Stock and 5,000 shares of Common Stock held of record by his spouse.
Mr. Brown disclaims beneficial ownership of the securities held by his
spouse for purposes of Section 16 under the Exchange Act.
(6) Includes 5,200 shares of Common Stock held of record and an option to
purchase 15,000 shares of Common Stock held by his spouse. Mr. Gilbert
disclaims beneficial ownership of the securities for purposes of
Section 16 under the Exchange Act. Includes 25,487 shares of Common
Stock held of record by Mr. Gilbert, non-qualified options to purchase
140,000 shares of Common Stock, warrants to purchase 29,600 shares and
conversion rights to 375,000 shares.
(7) Includes 288,431 shares held of record, 510,333 shares issuable upon
exercise of stock options exercisable within 60 days of September 21,
2001, 106,600 shares issuable upon exercise of warrants and 791,666
conversion rights.
5
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 five persons for election as directors. Each of the
following nominees has consented to be nominated to serve as a Director of the
Corporation. The Proxies granted by the stockholders will be voted at the
meeting for the election of the persons listed below as directors of the
Company. In the event that one or more of the below named persons shall
unexpectedly become unavailable for election (the Company has no knowledge of
any such unavailability), votes will be cast pursuant to authority granted by
the enclosed proxy for such person or persons as may be designated by the Board
of Directors.
NOMINEES FOR DIRECTORS
Charles S. Leavell
Sanford L. Schwartz
Robert M. Geller
Thomas G. Brown
J. Stanley Gilbert
Each Director is elected to serve for a term of one year and until the
next Annual Meeting of Stockholders or until a successor is duly elected and
qualified.
There were no family relationships among Directors or persons nominated
or chosen by the Company to become a Director, nor any arrangements or
understandings between any Director and any other person pursuant to which any
Director was elected.
DIRECTORS AND EXECUTIVE OFFICERS
Name, position with the Company, age of each Director or officer, and the period
during which each Director has served are as follows:
Director
Name Age Position Since
---- --- -------- -----
Charles S. Leavell 59 Chairman of the Board of Directors, 1993
Chief Executive Officer and Chief
Financial Officer
Sanford L. Schwartz 51 Director 1993
Robert M. Geller 48 Director 1994
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Thomas G. Brown 56 Director 1999
J. Stanley Gilbert 63 President and Chief Operating 1999
Officer, and a Director
Sue Brophy 45 Controller and Chief Accounting --
Officer
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 guest ranch; and South Meadow, an exclusive 96 unit single family
development in Boulder, Colorado. Mr. Leavell currently sits on the Board of
Directors of CK Properties, L.C., of El Paso, Texas, which is a real estate
development and management corporation with extensive holdings in apartments and
office buildings.
SANFORD L. SCHWARTZ has been a Director of the Company since April,
1993. Mr. Schwartz has been a founder, senior executive or director of nine
publicly-traded companies over the past twenty years. From 1992 to present, Mr.
Schwartz has been the Chairman of Creative Business Strategies, Inc. a business
consulting firm.
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.
THOMAS G. BROWN was elected a director of the Company on October 19,
1999. Mr. Brown has been President and Managing Director of Wyndham Capital
Corporation, an investment banking and research firm since he founded it in
1996. Mr. Brown was also a co-founder of Ablum, Brown & Company, an investment
banking firm specializing in leveraged buyout transactions. He served as its
Managing Director from January 1988 until December 1995. Prior to his tenure
with Ablum, Brown & Company, Mr. Brown served as principal of several investment
management and investment banking firms including seven years as a principal of
Deihl, Speyer & Brown, a regional investment banking firm. Mr. Brown is a
Chartered Financial Analyst. He also serves as a director of both Ashton
Technology Group, Inc. and Mobile P.E.T. Systems Inc.
7
J. STANLEY GILBERT became President and Chief Operating Officer in
January, 1997. Mr. Gilbert was elected a Director of the Company in December,
2000. 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
was 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.
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. 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.
Each Director is elected to serve for a term of one year and until the
next Annual Meeting of Shareholders or until a successor is duly elected and
qualified.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During the 2000 fiscal year, three meetings of the Board of Directors
were held, including regularly scheduled and special meetings. During fiscal
2000, 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 2000, the Company had standing Audit and Compensation
Committees of the Board of Directors, but did not have a standing Nominating
Committee. The members of the Audit Committee were Robert M. Geller and Charles
S. Leavell. No member of the Audit Committee receives any additional
compensation for his services as a member of that Committee. During fiscal 2000,
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 2000, the Compensation Committee consisted of Thomas
Brown 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 2000, the
8
Compensation Committee held one meeting. The Compensation Committee is
responsible for reviewing pertinent data and making recommendations with respect
to compensation standards for the Company's executive officers, including the
President and Chief Executive Officer, establishing guidelines and making
recommendations for the implementation of Management Incentive Compensation
Plans, reviewing the performance of the President and CEO, establishing
guidelines and standards for the grant of Incentive Stock Options to key
employees under the Company's Incentive Stock Plan, and reporting regularly to
the Board of Directors with respect to its recommendations.
Any transactions between the Company and its officers, directors,
principal stockholders, or other affiliates have been and will be on terms no
less favorable to the Company than could be obtained from unaffiliated third
parties on an arms-length basis and will be approved by a majority of the
Company's independent, outside disinterested directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ELECTION OF THE NOMINEES FOR DIRECTORS
EXECUTIVE COMPENSATION
The following table sets forth certain information for the Company's
fiscal periods ended December 31, 2000 (2000), December 31, 1999 (1999), and
December 31, 1998 (1998) regarding compensation earned by or awarded to the
Company's chief executive officer and the other executive officers whose total
annual salary and bonus exceeded $100,000 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
Long Term Compensation
---------------------------------------------
Annual Compensation Awards Payouts
----------------------------- ------------------ --------------------
Other LTIP
Annual Restricted Options/ All Other
Name and Compensation Stock Payouts Compensation
Principal Salary Bonus ($) Award(s) ($) ($)
Position Year ($) ($) ($) SARs
--------------------- -------- -------------- -------- ------------- ------------- ------------ ----------- -----------
Charles S. Leavell, Chairman
and CEO
2000 $160,000 -0- -0- -0- -0- -0- -0-
1999 160,000 -0- -0- -0- -0- -0- -0-
1998 120,000 -0- -0- -0- -0- -0- -0-
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Howard Hamburg, VP
(2)
2000 $85,000 -0- -0- -0- -0- -0- -0-
1999 85,000 -0- -0- -0- -0- -0- -0-
1998 115,978 -0- -0- -0- -0- -0- -0-
J. Stanley Gilbert,
Director, COO and
President
2000 $120,000 -0- -0- -0- -0- -0- -0-
1999 120,000 -0- -0- -0- -0- -0- -0-
1998 90,000 -0- -0- -0- -0- -0- -0-
(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 $50,000 or 10% of the total of
annual salary and bonus paid during the respective years.
(2) Mr. Hamburg's employment with the Company terminated on January 31,
2001.
OPTIONS GRANTED DURING FISCAL 2000
The following table shows option grants during fiscal 2000 to the Named
Executive Officers of the Company.
Options Granted Percent of Total Exercise Expiration
NAME IN FISCAL 2000 OPTIONS GRANTED PRICE DATE
---- -------------- --------------- ----- ----
Charles S. Leavell 0 0 N/A N/A
Howard Hamburg 0 0 N/A N/A
J. Stanley Gilbert 0 0 N/A N/A
AGGREGATED OPTION EXERCISES DURING FISCAL 2000 AND FISCAL YEAR-END OPTION VALUES
The following table provides information related to the number and value of
options held by the Named Executive Officers as of December 31, 2000. The
Company does not have any outstanding stock appreciation rights.
10
Number of Value of Unexercised
Unexercised In-the-
Options/SARs at Money Option/SARs
Value FY-end (#) at FY-End ($)(1)
Shares Acquired Realized Exercisable/ Exercisable/
Name on Exercise (#) ($) Unexercisable Unexercisable
---------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Charles S. Leavell -0- $-0- 166,000/0 0/0
J. Stanley Gilbert -0- $-0- 140,000/0 0/0
(1) The value of unexercised options is determined by calculating the
difference between the fair market value of the securities underlying
the options at fiscal period end and the exercise price of the options.
EMPLOYMENT AGREEMENTS
Effective December 11, 1998 the Company entered into an Employment Agreement
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, 2000, Directors 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 October 2000, the Board of Directors authorized the granting of
non-statutory options to outside directors pursuant to the Company's Stock
Option Plan. Each such option represents the right to acquire up to 60,000
shares of the Company's common stock, to have an exercise price equal to the
fair market value of the Company's common stock at the close of business and to
vest at the rate of 5,000 shares per quarter beginning December 31, 2000 for a
three year period, so long as the Director continues to serve on the Company's
Board of Directors and attends all meetings. These options are to be granted in
lieu of cash compensation. Directors who are also executive officers of the
Company receive no additional compensation for their services as Directors.
11
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 $35,000 in 1999
and $22,000 in 2000.
SCHWARTZ COMPENSATION
During 1999 and 2000, Mr. Schwartz provided consulting services to the Company.
He received $37,500 in 1999 and $15,000 compensation for services in 2000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Geller and Brown. Mr. Leavell,
who is Chief Executive Officer and a director of the Company, participates in
all discussions and decisions regarding salaries, benefits and incentive
compensation for all employees of the Company, except discussions and decisions
relating to his own salary, benefits and incentive compensation.
COMPENSATION COMMITTEE REPORT
GENERAL COMPENSATION PHILOSOPHY
Currently, the primary elements of the executives' total compensation
program are base salary, annual incentives, and long-term incentives. In
general, the compensation program promotes a pay-for-performance philosophy by
placing a significant portion of total compensation "at risk" while providing
compensation opportunities which are comparable to market levels.
The Company's executive compensation package consists of three main
components: (i) base salary; (ii) annual bonuses based on Company performance;
and (iii) stock options. The base salary of each of the named executive officers
is determined annually after considering the responsibilities and performance of
the individual officer.
CEO COMPENSATION
Charles S. Leavell has been serving as Chief Executive Officer and
Chairman since June 20, 1996. In fiscal 1999, Mr. Leavell was compensated in
accordance with the factors discussed in General Compensation Philosophy, above.
12
PRICE RANGE OF COMMON STOCK
Since December 21, 1998, the Company's Common Stock has been traded on
the OTC Bulletin Board under the symbol FAIRC. The following table reflects the
high and low prices of the Company's Common Stock for each quarterly period of
the two most recent calendar years and the subsequent interim quarters. The
prices reflect the high and low sales prices. The quotations represent prices
between broker-dealers and do not include retail mark-ups and mark-downs or any
commission to the broker-dealer and may not reflect prices in actual
transactions.
CALENDAR YEARS ENDED DECEMBER 31 HIGH LOW
-------------------------------- ---- ---
1999
First Quarter ended March 31 0.9375 0.28
Second Quarter ended June 30 0.60 0.3984
Third Quarter ended September 30 0.55 0.3594
Fourth Quarter ended December 31 0.375 0.19
2000
First Quarter ended March 31 0.40 0.19
Second Quarter ended June 30 0.40 0.21
Third Quarter ended September 30 0.25 0.16
Fourth Quarter ended December 31 1.00 0.12
2001
First Quarter ended March 31 0.281 0.156
Second Quarter ended June 30 0.40 0.15
As of September 5, 2001, there were approximately 149 shareholders of record.
DIVIDENDS
The Company has never paid cash dividends on its Common Stock, and does not
anticipate the payment of such dividends in the foreseeable future.
CERTAIN TRANSACTIONS
SHORT-TERM NOTES-1999
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 provided
for interest at 4.5% per quarter and were 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
13
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.
These loans were retired during July 1999.
PROMISSORY NOTES-2000
In 1999, the Company authorized the issuance of up to $1,000,000 of 12%
subordinated promissory notes due August 31, 2001 in units, each unit consisting
of two promissory notes of equal principal, identical in nature except that one
note is convertible to common stock at a price of $0.30 per share. During the
first six months of fiscal 2000, the Company raised capital in the amount of
$575,000 through the issuance of these notes. The funds were provided by Charles
S. Leavell ($250,000), Chairman of the Board of Directors, J. Stanley Gilbert
($225,000), Member of the Board of Directors, and one other investor.
The Company believes that the foregoing transactions were on terms as favorable
to the Company as could have been obtained from non-affiliated parties.
FAIRE PARTNERS, LTD.
In November of 1997, the Company sold it's Wisconsin property in a
sale-leaseback transaction to Faire Partners, Ltd. of El Paso, Texas. One of the
owners of Faire Partners, Ltd. was related to the CEO and Chairman of the Board
of Directors of the Company. This related party is now deceased and his
ownership in Faire Partners, Ltd. is currently part of his estate. Because the
Company's CEO and Chairman of the Board of Directors of the Company is a
beneficiary of this estate, the estate may be deemed a related party. See "Item
2-Property" for the terms of this transaction. During fiscal 2000 the Company
paid Faire Partners, Ltd. $440,000 pursuant to this transaction.
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 750,000 to 1,100,000. 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 and 1999. 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
14
Common Stock to officers, directors, employees and consultants. Currently, there
are 3 officers, 3 directors, 35 employees and 1 consultant 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 September 5, 2001, options for the purchase of an aggregate of
865,833 shares of Common Stock were outstanding under the 1993 Plan, held by 27
persons, with per share exercise prices ranging from $0.16 to $0.81 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, certain officers 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.
STOCK OPTION AWARDS UNDER THE
RENAISSANCE ENTERTAINMENT CORPORATION 1993 STOCK INCENTIVE PLAN
-----------------------------------------------------------------------------------------------------------------------
NAME AND POSITION DATE OF GRANT NUMBER OF OPTIONS EXERCISE PRICE
----------------- ------------- ----------------- --------------
Charles S. Leavell, Chief Executive Officer, Chief 7/23/97 8,000 $.81(1)
Financial Officer, holder of 12/11/97 40,000 $.81(1)
5% of outstanding options and a nominee 06/17/98 8,000 $.81
For director 3/16/99 110,000 $.53
02/27/01 50,000 $.20
Sanford L. Schwartz, holder of 5% of 7/23/97 8,000 $.81(1)
Outstanding options and nominee for 06/17/98 8,000 $.81
Director 3/16/99 8,000 $.53
10/17/00 60,000 $.16
Robert M. Geller, holder of 5% of outstanding 7/21/94 33,333 $.81(1)
options and nominee for Director 7/23/97 8,000 $.81(1)
6/17/98 8,000 $.81
15
3/16/99 25,000 $.53
3/16/99 8,000 $.53
10/17/00 60,000 $.16
Thomas Brown, holder of 5% of 4/18/00 8,000 $.53
Outstanding options and nominee for 10/17/00 60,000 $.16
Director
J. Stanley Gilbert, President and Chief Operating 6/17/98 40,000 $.81(1)
Officer and holder of 5% of outstanding options and 3/16/99 100,000 $.53
nominee for Director 2/27/01 100,000 $.20
Current Executive Officers, as a group (3 persons) 4/21/93 to 481,000 $.20 to $.81(1)
present
Current Directors, who are not also executive 4/21/93 to 294,333 $.16 to $.81(1)
officers, as a group (3 persons) present
All Employees, excluding executive officers, as a 4/21/93 to 55,500 $.31 to $.81(1)
group (23 persons) present
---------------
(1) On June 17, 1998, the Board of Directors approved replacement options
for these options with an exercise price of $.81 per share. For
purposes of this table, the lower price/replacement option price has
been used.
The last reported sale price for the Common Stock on the OTC on
September 21, 2001 was $0.23.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the principal federal income tax
consequences under current federal income tax laws relating to awards under the
1993 Plan. This summary is not intended to be exhaustive and, among other
things, does not describe state or local tax consequences.
In general, an optionee will be subject to tax at the time a
nonqualified stock option is exercised (but not at the time of grant), and he or
she will include in ordinary income in the taxable year in which he or she
exercises a nonqualified stock option an amount equal to the difference between
the exercise price and the fair market value of the shares acquired on the date
of exercise, and the Company will generally be entitled to deduct such amount
for federal income tax purposes except as such deductions may be limited by the
Revenue Reconciliation Act of 1993 ("1993 Tax Act"), described below. Upon
disposition of shares, the appreciation (or
16
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 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.
17
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
AMENDMENT TO THE RENAISSANCE ENTERTAINMENT CORPORATION 1993 INCENTIVE STOCK
PLAN.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal period ended December 31, 2000, all
required reports were timely filed.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be considered for inclusion in the
proxy statement for presentation at the 2002 Annual Meeting must be received by
January 29, 2002. 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 2002
Annual Meeting without including such proposal in our Proxy Statement, then you
must provide us with notice of such proposal no later than April 14, 2002. 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: September 21, 2001 BY ORDER OF THE BOARD OF DIRECTORS
Charles S. Leavell
Chief Executive Officer
18
Exhibits to Proxy Statement
Exhibit A 1993 Stock Incentive Plan
19
RENAISSANCE ENTERTAINMENT CORPORATION
STOCK INCENTIVE PLAN
I. PURPOSE.
A. This Stock Incentive Plan (the "Plan") is adopted by the Board
of Directors of Renaissance Entertainment Corporation, a Colorado corporation
(the "Company"), on April 21, 1993, to enable the Company to afford certain of
its directors, executive officers and key employees and the directors, executive
officers and key employees of any subsidiary corporation or parent corporation
of the Company who are responsible for the continued growth of the Company, an
opportunity to acquire a proprietary interest in the Company and thus to create
in such directors, executive officers and key employees and increased interest
in, and a greater concern for, the welfare of the Company.
B. The stock options ("Options") offered pursuant to the Plan are
a matter of separate inducement and are not in lieu of any salary or other
compensation for the services of such directors, executive officers or key
employees.
C. The Options granted under the Plan are intended to be either
incentive stock options ("Incentive Options") within the meaning of Section 422A
of the Internal Revenue Code of 1986, as amended (the "Code") or Options that do
not meet the requirements for Incentive Options ("Non-Qualified Options"), but
the Company makes no warranty as to the qualification of any Option as an
Incentive Option.
II. ADMINISTRATION OF THE PLAN.
A. PROCEDURE.
The Plan shall be administered by a Committee of the Board of Directors
of the Company.
1. Subject to subparagraph (2), the Board of Directors
shall appoint a Committee consisting of not less than two members of the Board
of Directors to administer the Plan on behalf of the Board of Directors, subject
to such terms and conditions as the Board of Directors may prescribe. Once
appointed, the Committee shall continue to serve until otherwise directed by the
Board of Directors. All members of the Committee shall be "disinterested
persons" within the meaning of Rule 16b-3(c)(2)(i) (or any successor rule or
regulation) promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). A majority of the members of the Committee shall
constitute a quorum, and the act of a majority of the members of the Committee
shall be the act of the Committee. Any member of the Committee may be removed at
any time, either with or without cause, by resolution adopted by the Board of
Directors, and any vacancy on the Committee may at any time be filled by
resolution adopted by the Board of Directors.
2. Any or all powers and functions of the Committee may
at any time, and from time to time, be exercised by the Board of Directors;
provided, however, that with respect to the participation in the Plan by members
of the Board of Directors, such powers and functions of the Committee may be
exercised by the Board of Directors only if, at the time of such exercise, a
majority of the members of the Board of Directors, as the case may be, and a
majority of the directors acting in a particular matter, are "disinterested
persons" within the meaning of Rule 16b-3(c)(2)(i) (or any successor rule or
regulation) promulgated under the Exchange Act. Any reference in the Plan to the
Committee shall be deemed also to refer to the Board of Directors, to the extent
that the Board of Directors is exercising any of the powers and function of the
Committee.
3. Subject to the foregoing subparagraphs (1) and (2),
front time to time the Board of Directors may increase the size of the Committee
and appoint additional members thereof, remove members (with or without cause)
and appoint new members in substitution therefor, fill vacancies however caused,
or remove all members of the Committee and thereafter directly administer the
Plan.
B. POWERS OF THE COMMITTEE.
Subject to the provisions of the Plan, the Committee shall have the
authority, in its discretion:
1. to determine the directors, executive officers and
key employees to whom Options shall be granted, the time when such Options shall
be granted, the number of shares which shall be subject to each Option, the
purchase price or exercise price of each share which shall be subject to each
Option, the periods during which such Options shall be exercisable (whether in
whole or in part) and the other terms and provisions with respect to the Options
(which need not be identical);
2. to determine, upon review of relevant information and
in accordance with Article IX hereof, the fair market value of the Common Stock
underlying the Options;
3. to construe the Plan and Options granted thereunder;
4. to accelerate or defer (with the consent of the
Optionee) the exercise of any Option, consistent with the provisions of the
Plan;
5. to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an option;
6. to prescribe, amend and rescind rules and regulations
relating to the Plan;
7. to make all other determinations deemed necessary or
advisable for the administration of the Plan.
-2-
C. AGREEMENTS WITH OPTIONEE.
Without limiting the foregoing, the Committee shall also have the
authority to require, in its discretion, as a condition to the granting of any
Option, that the Participant agree not to sell or otherwise dispose of shares
acquired pursuant to the Option for a prescribed period following the date of
acquisition of such shares and that in the event of termination of a
directorship or employment of such Participant, other than as a result of
dismissal without cause, the Participant will not, for a period to be fixed at
the time of the grant of the Option, enter into any employment or participate
directly or indirectly in any business or enterprise which is competitive with
the business of the Company or any subsidiary corporation or parent corporation
of the Company, or enter into any employment in which such employee or director
will be called upon to utilize special knowledge obtained through his or her
directorship or employment with the Company or any subsidiary corporation or
parent corporation thereof
D. EFFECT OF COMMITTEE'S DECISION.
All decisions, determinations and interpretations of the Committee
shall be final and binding on all Optionees and any other holders of any Options
granted under the Plan.
III. ELIGIBILITY.
A. Non-Qualified Options may be granted only to directors,
officers and other salaried key employees of the Company, or any subsidiary
corporation or parent corporation of the Company now existing or hereafter
formed or acquired, except as hereafter provided. Any person who shall have
retired from active employment by the Company, although such person shall have
entered into a consulting contract with the Company, shall not be eligible to
receive an Option.
B. An Incentive Option may be granted only to salaried key
employees of the Company or any subsidiary corporation or parent corporation of
the Company now existing or hereafter formed or acquired, and not to any
director or officer who is not also an employee.
IV. AMOUNT OF STOCK.
A. The total number of shares of Common Stock of the Company
which may be purchased pursuant to the exercise of Options granted under the
Plan shall not exceed, in the aggregate, 750,000 shares of the authorized Common
Stock, $.03 par value per share, of the Company (the "Shares"). Shares which are
subject to Options shall be counted only once in determining whether the maximum
number of shares which may be purchased or acquired under the Plan has been
exceeded.
B. Shares which may be acquired under the Plan may either be
authorized but unissued Shares, Shares of issued stock held in the Company's
treasury, or both, at the discretion of the Company. If and to the extent that
Options granted under the Plan expire or terminate without having been
exercised, new Options may be granted with respect to the Shares covered
-3-
by such expired or terminated Options, provided that the grant and the terms of
such new Options shall in all respects comply with the provisions of the Plan.
V. EFFECTIVE DATE AND TERM OF THE PLAN.
A. The Plan shall become effective on the date (the "Effective
Date") on which it is adopted by the Board of Directors of the Company;
provided, however, that if the Plan is not approved by a vote of the
Shareholders of the Company within twelve (12) months before or after the
Effective Date, the Plan and any Options granted thereunder shall terminate.
B. The Company may, from time to time during the period beginning
on the Effective Date and ending on April 30, 2003 (the "Termination Date")
grant to persons eligible to participate in the Plan, Options under the terms of
the Plan, Options granted prior to the Termination Date may extend beyond that
date, in accordance with the terms thereof. In no event shall the Termination
Date be later than ten (10) years following the Effective Date.
C. As used in the Plan, the terms "subsidiary corporation" and
"parent corporation" shall have the meanings ascribed to such terms,
respectively, in Sections 425(f) and 425(e) of the Code.
D. An employee, executive officer or director to whom Options are
granted hereunder may be referred to herein as a "Participant."
VI. LIMITATION ON INCENTIVE OPTIONS.
The amount of aggregate fair market value of the stock determined at
the time of the grant of the Incentive Option for which any employee may be
granted Incentive Options under this Plan in any calendar year shall not exceed
the sum of (i) $100,000.00 plus (ii) an unused limit carryover amount for any
year after the date of this Plan but prior to the calendar year under
consideration. The unused limit carryover amount shall be determined as one-half
of the amount by which $100,000.00 exceeds the aggregate fair market value at
the time of grant of an Incentive Option under this Plan for which Incentive
Options were granted in any prior year, but carried over for not more than three
(3) years. For this purpose, Incentive Options granted in any year shall be
deemed to first use up the $100,000.00 current year limitation and then the
unused limit carryover amount from the earliest available year.
VII. TERMS OF OPTIONS.
Stock Options granted pursuant to this Plan shall be evidenced by
written agreements which shall comply with the following terms and conditions:
A. TIME OF EXERCISE.
Any Option may be exercised by the Participant holding such Option for
such period or periods as the Committee shall determine at the date of grant of
such Option. In no event shall
-4-
any Incentive Option granted to a Participant owning more than ten percent (10%)
of the voting power of all classes of the Company's stock, or the stock of any
subsidiary corporation or parent corporation, be exercisable by its terms after
the expiration of five (5) years from the date it is granted, nor shall any
other Incentive Option granted under this Plan be exercisable by its terms after
ten (10) years from the date it is granted. The Committee shall have the right
to accelerate, in whole or in part, the expiration date of any Option; and to
the extent that an Option is not exercised within the period of exercisability
specified therein, it shall expire as to the then unexercised portion.
B. TRANSFERABILITY.
Any Option granted under this Plan shall not be transferable by the
director, executive officer or key employee holding same and may be exercised by
the director, executive officer or key employee only during his lifetime, except
that the Option may be exercisable after the death of such director, executive
officer or key employee in accordance with the laws of descent and distribution.
C. OPTION PRICE.
1. The purchase price for each Share purchasable under
any Non-Qualified Option granted hereunder shall be such amount as the Committee
shall deem appropriate.
2. The purchase price for shares of stock subject to any
Incentive Option under this Plan, shall not be less than the fair market value
of the stock on the date of the grant of the Incentive Option, which fair market
value shall be determined in good faith at the time of the grant of the
Incentive Option by the Committee administering this Plan. In the event that any
Incentive Option is granted to an employee owning more than ten percent (10%) of
the voting power of all classes of the Company's stock, the purchase price per
share of the stock subject to such an Incentive Option shall not be less than
110% of the fair market value of the stock on the date of the grant of such
Incentive Option determined in good faith by the Committee.
D. CONSIDERATION FOR SHARES.
The consideration to be paid for the Shares to be issued upon exercise
of an Option, including the method of payment, shall be determined by the
Committee and may consist entirely of cash, check, other shares of common stock
of the Company which have a fair market value on the date of surrender equal to
the aggregate exercise price of the shares as to which said Option shall be
exercised, or any combination of such methods of payment, or such other
consideration and method of payment for issuance of shares to the extent
permitted under applicable provisions of the Colorado Corporation Code and the
Company's Articles of Incorporation and Bylaws.
E. VESTING.
Any Options granted pursuant to this Plan may be made subject to
vesting by the Committee in its discretion.
-5-
VIII. SHAREHOLDER APPROVAL.
This Plan shall not be valid unless it shall be approved by the
shareholders of the Company at a regular or special meeting of shareholders
which shall be held within the period of twelve (12) months following the
effective date of this Plan set forth above.
IX. METHOD OF DETERMINATION OF FAIR MARKET VALUE.
A. If the Shares are listed on a national securities exchange in
the United States on any date on which the fair market value per Share is to be
determined, the fair market value per Share shall be deemed to be the average of
the high and low quotations at which such Shares are sold on such national
securities exchange on such date. If the Shares are listed on a national
securities exchange in the United States on such date but the Shares are not
traded on such dare, or such national securities exchange is not open for
business on such date, the fair market value per Share shall be determined as of
the closest preceding date on which such exchange shall have been open for
business and the Shares were traded. If the Shares are listed on more than one
national securities exchange in the United States on the date any such Option is
granted, the Committee shall determine which national securities exchange shall
be used for the purpose of determining the fair market value per Share.
B. If a public market exists for the Shares on any date on which
the fair market value per Share is to be determined but the Shares are not
listed on a national securities exchange in the United States, the fair market
value per Share shall be deemed to be the mean between the closing bid and asked
quotations in the over-the-counter market for the Shares on such date. If there
are no bid and asked quotations for the Shares on such date, the fair market
value per Share shall be deemed to be the mean between the closing bid and asked
quotations in the over-the-counter market for the Shares on the closest date
preceding such date for which such quotations are available.
C. If no public market exists for the Shares on any date on which
the fair market value per Share is to be determined, the Committee shall, in its
sole discretion and best judgment, determine the fair market value of a Share.
For purposes of this Plan, the determination by the Committee of the
fair market value of a Share shall be conclusive.
X. TERMINATION OF DIRECTORSHIP OR EMPLOYMENT.
A. Upon termination of the directorship or employment of any
Participant with the Company and all subsidiary corporations and parent
corporations of the Company, any Option previously granted to the Participant,
unless otherwise specified by the Committee in the Option, shall, to the extent
nor theretofore exercised. terminate and become null and void, provided that:
-6-
1. if the Participant shall die while serving as a
director or while in the employ of such corporation or during either the three
(3) or one (1) year period, whichever is applicable, specified in clause A.2
below and at a time when such Participant was entitled to exercise an Option as
herein provided, the legal representative of such Participant, or such person
who acquired such Option by bequest or inheritance or by reason of the death of
the Participant. may, not later than one (1) year from the date of death,
exercise such Option, to the extent not theretofore exercised, in respect of any
or all of such number of Shares as specified by the Committee in such Option;
and
2. if the directorship or employment of any Participant
to whom such Option shall have been granted shall terminate by reason of the
Participant's retirement (at such age or upon such conditions as shall be
specified by the Committee), disability (as described in Section 22(e)(3) of the
Code) or dismissal by the employer other than for cause (as defined below), and
while such Participant is entitled to exercise such Option as herein provided,
such Participant shall have the right to exercise such Option, to the extent nor
theretofore exercised, in respect of any or all of such number of Shares as
specified by the Committee in such Option, at any time up to and including (i)
three (3) months after the date of such termination of directorship or
employment in the case of termination by reason of retirement or dismissal other
than for cause, and (ii) one (1) year after the dare of termination of
directorship or employment in the case of termination by reason of disability.
In no event, however, shall any person be entitled to exercise any Option after
the expiration of the period of exercisability of such Option as specified
therein.
B. If a Participant voluntarily terminates his directorship or
employment, or is discharged for cause, any Option granted hereunder shall,
unless otherwise specified by the Committee in the Option, forthwith terminate
with respect to any unexercised portion thereof.
C. If an Option shall be exercised by the legal representative of
a deceased Participant, or by a person who acquired an Option or by bequest or
inheritance or by reason of the death of any Participant, written notice of such
exercise shall be accompanied by a certified copy of letter testamentary or
equivalent proof of the right of such legal representative or other person to
exercise such Option.
D. For the purposes of the Plan, the term "for cause" shall mean:
1. with respect to an employee who is a party to a
written agreement with, or, alternatively, participates in a compensation or
benefit plan of the Company or a subsidiary corporation or parent corporation of
the Company, which agreement or plan contains a definition of "for cause" or
"cause" (or words of like import) for purposes of termination of employment
thereunder by the Company or such subsidiary corporation or parent corporation
of the Company, "for cause" or "cause" as defined in the most recent of such
agreements or plans; or
2. in all other cases, as determined by the Board of
Directors, in its sole discretion, (i) the willful commission by an employee of
a criminal or other act that causes or probably will cause substantial economic
damage to the Company or a subsidiary corporation or parent corporation of the
Company or substantial injury to the business reputation of the
-7-
Company or a subsidiary corporation or parent corporation of the Company; (ii)
the commission by an employee of an act of fraud in the performance of such
employee's duties on behalf of the Company or a subsidiary corporation or parent
corporation of the Company; (xii) the continuing willful failure of an employee
to perform the duties of such employee to the Company or a subsidiary
corporation or parent corporation of the Company (other than such failure
resulting from the employee's incapacity due to physical or mental illness)
after written notice thereof (specifying the particulars thereof in reasonable
detail and a reasonable opportunity to be heard and cure such failure are given
to the employee by the Board of Directors; or (iv) the order of a court of
competent jurisdiction requiring the termination of the employee's employment.
For purposes of the Plan, no act, or failure to act, or the employee's part
shall be considered "willful" unless done or omitted to be done by the employee
not in good faith and without reasonable belief that the employee's action or
omission was in the best interest of the Company or a subsidiary corporation or
parent corporation of the Company.
E. For the purposes of the Plan, an employment relationship shall
be deemed to exist between an individual and a corporation if, at the time of
the determination, the individual was an "employee" of such corporation for
purposes of Section 422(a) of the Code. If an individual is on maternity,
military, or sick leave or other bona fide leave of absence, such individual
shall be considered an "employee" for purposes of the exercise of an Option and
shall be entitled to exercise such Option during such leave if the period of
such leave does not exceed ninety (90) days, or if longer, so long as the
individual's right to reemployment with his employer is guaranteed either by
statute or by contract. If the period of leave exceeds ninety (90) days, the
employment relationship shall be deemed to have terminated on the ninety-first
(91) day of such leave, unless the individual's right to reemployment is
guaranteed by statute or contract.
F. A termination of employment shall not be deemed to occur by
reason of (i) the transfer of a Participant from employment by the Company to
employment by a subsidiary corporation or a parent corporation of the Company,
or (ii) the transfer of a Participant from employment by a subsidiary
corporation or a parent corporation of the Company to employment by the Company
or by another subsidiary corporation or parent corporation of the Company.
XI. RIGHT TO TERMINATE EMPLOYMENT.
The Plan shall not impose any obligation on the Company or on any
subsidiary corporation or parent corporation thereof to continue the employment
of any Participant; and it shall not impose any obligation on the part of any
Participant to remain in the employ of the Company or of any subsidiary
corporation or parent corporation thereof.
XII. PURCHASE FOR INVESTMENT.
Except as hereafter provided, a Participant shall, upon any exercise of
an Option or Right, execute and deliver to the Company a written statement, in
form satisfactory to the Company, in which such Participant represents and
warrants that such Participant is purchasing or acquiring the Shares acquired
thereunder for such Participant's own account, for investment only and not with
a view to the resale or distribution thereof, and agrees that any subsequent
offer for sale or
-8-
sale or distribution of any of such Shares shall be made only pursuant to
either (a) a Registration Statement on an appropriate form under the
Securities Act of 1933, as amended (the "Securities Act"), which Registration
Statement has become effective and is current with regard to the Shares being
offered or sold or (b) a specific exemption from the registration requirements
of the Securities Act, but in claiming such exemption the holder shall, if so
requested by the Company, prior to any offer for sale or sale of such Shares,
obtain a prior favorable written opinion, in form and substance satisfactory to
the Company, from counsel for or approved by the Company, as to the
applicability of such exemption thereto. The foregoing restriction shall not
apply to (i) issuances by the Company so long as the Shares being issued are
registered under the Securities Act and a prospectus in respect thereof is
current, or (ii) reofferings of Shares by affiliates of the Company (as defined
in Rule 405 or any successor rule or regulation promulgated under the
Securities Act) if the Shares being reoffered are registered under the
Securities Act and a prospectus in respect thereof is current.
XIII. EXCHANGE, S.E.C. OR OTHER GOVERNMENTAL REQUIREMENTS.
If any law or regulation of the Securities and Exchange Commission, any
stock exchange, NASDAQ, or any governmental body having jurisdiction shall
require any action to be take in connection with the issuance shares pursuant to
an Option under this Plan before shares can be delivered to an Optionee, then
the date for issuance of these shares shall be postponed until such action can
be taken.
XIV. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
Subject to any required action by the shareholders of the Company, the
number of shares of Common Stock covered by each outstanding Option, and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but as to which no Options have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option, as well as
the price per share of Common Stock covered by each such outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any
other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an Option.
In the event of the proposed dissolution or liquidation of the Company,
the Option will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board. The Board may, in the exercise
of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Board and give each Optionee
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the right to exercise his Option as to all or any part of the Optioned Stock,
including Shares as to which the Option would not otherwise be exercisable. In
the event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, the
Option shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless such successor corporation does not agree to assume the Option or to
substitute an equivalent option, in which case the Board shall, in lieu of such
assumption or substitution provide for the Optionee to have the right to
exercise the Option as to all of the Optioned Stock. including Shares as to
which the Option would not otherwise be exercisable. If the Board makes an
Option fully exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Board shall notify the Optionee that the Option
shall be fully exercisable for a period of fifteen (15) days from the date of
such notice, and the Option will terminate upon the expiration of such period.
If, as a result of accelerating the time period during which all
Options are exercisable in full in the event of a merger or asset transaction,
any Optionee would incur liability under Section 16(b) of the Securities
Exchange Act of 1934 as a result of the exercise of an accelerated Option, such
Optionee may request the Company to, and the Company shall be obligated to
repurchase such Option for cash equal to the excess of the fair market value on
the advanced termination date of the shares subject to the Option over the
Option exercise price.
XV. ORDER OF EXERCISE OF OPTIONS.
No Option issued pursuant to this Plan shall be exercisable so long as
there is any outstanding Option issued at an earlier date with respect to such
Employee; Options must be exercised in the order in which they are granted.
Notwithstanding anything in this Plan to the contrary in connection with any
corporate transaction to which Section 425(a) of the Code is applicable, there
may be a substitution of a new Option for an old Option granted under this Plan,
or an assumption of an old Option granted under this Plan. Any Optionee who has
a new Option submitted for an old Option granted under this Plan shall, in
connection with the corporate transaction, lose his rights tinder the old
Option. Nothing in the terms of the assumed or substituted Option shall confer
upon the Optionee more favorable benefits than he had under the old Option.
XVI. CHANGE IN CONTROL.
A. For purposes of the Plan, a "change in control" of the Company
occurs if (i) any "person" (defined as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act, as amended) is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the combined voting power of the Company's outstanding
securities than entitled to vote for the election of directors; or (ii) during
any period of two (2) consecutive years, individuals who at the beginning of
such period constitute the Board of Directors cease for any reason to constitute
at least a majority thereof; or (iii) the Board of Directors shall approve the
sale of all or substantially all of the assets of the Company or any
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merger, consolidation, issuance of securities or purchase of assets, the result
of which would be the occurrence of any event described in clause (i) or (ii)
above.
B. In the event of a change in control of the Company (defined
above), the Committee, in its discretion, may determine that, upon the
occurrence of a transaction described in the preceding paragraph, each Option
outstanding hereunder shall terminate within a specified number of days after
notice to the holder, and such holder shall receive, with respect to each Share
subject to such Option, an amount of cash equal to the excess of the fair market
value of such Share immediately prior to the occurrence of such transaction over
the exercise price per Share of such Option. The provisions contained in the
preceding sentence shall be inapplicable to an Option granted within six (6)
months before the occurrence of a transaction described above if the holder of
such Option is a director or officer of the Company or a beneficial owner of the
Company who is described in Section 16(a) of the Exchange Act, unless such
holder dies or becomes disabled (within the meaning of Section 22(e)(3) of the
Code) prior to the expiration of such six-month period.
C. Alternatively, the Committee may determine, in its discretion,
that all then outstanding Options shall immediately become exercisable upon a
change of control of the Company.
XVII. WITHHOLDING TAXES.
The Company may require an employee exercising a Non-Qualified Option
granted hereunder, or disposing of Shares acquired pursuant to the exercise of
an Incentive Option in a disqualifying disposition (within the meaning of
Section 42 1(b) of the Code), to reimburse the corporation that employs such
employee for any taxes required by any government to be withheld or otherwise
deducted and paid by such corporation in respect of the issuance or disposition
of such Shares. In lieu thereof, the employer corporation shall have the right
to withhold the amount of such taxes from any other sums due or to become due
from such corporation to the employee upon such terms and conditions as the
Committee shall prescribe. The employer corporation may, in its discretion, hold
the stock certificate to which such employee is entitled upon the exercise of an
Option as security for the payment of such withholding tax liability, until cash
sufficient to pay that liability has been accumulated.
XVIII. AMENDMENT OF THE PLAN.
The Board of Directors or the Committee may, from time to time, amend
the Plan, provided that, notwithstanding anything to the contrary herein, no
amendment shall be made, without the approval of the shareholders of the
Company, that will (i) increase the total number of Shares reserved for Options
under the Plan (other than an increase resulting from an adjustment provided for
in Article X, Termination of Directorship or Employment), (ii) reduce the
exercise price of any Incentive Option granted hereunder below the price
required by Article IX, Method of Determination of Fair Market Value; (iii)
modify the provisions of the Plan relating to eligibility, or (iv) materially
increase the benefits accruing to participants under the Plan. The Board of
Directors or the Committee shall be authorized to amend the Plan and the
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Options granted thereunder to permit the Incentive Options granted thereunder
to qualify as "incentive stock options" within the meaning of Section 422A of
the Code. The rights and obligations under any Option granted before amendment
of the Plan or any unexercised portion of such Option shall not be adversely
affected by amendment of the Plan or the Option without the consent of the
holder of the Option.
XIX. TERMINATION OR SUSPENSION OF THE PLAN.
The Board of Directors or the Committee may at any time and for any or
no reason suspend or terminate the Plan. The Plan, unless sooner terminated
under Article V, Effective Date and Term of the Plan, or by action of the Board
of Directors, shall terminate at the close of business on the Termination Date.
An Option may not be granted while the Plan is suspended or after it is
terminated. Options granted while the Plan is in effect shall not be altered or
impaired by suspension or termination of the Plan, except upon the consent of
the person to whom the Option was granted. The power of the Committee under
Article II to construe and administer any Options granted prior to the
termination or suspension of the Plan shall continue after such termination or
during such suspension.
XX. GOVERNING LAW.
The Plan, such Options as may be granted thereunder, and all related
matters shall be governed by, and construed and enforced in accordance with, the
laws of the State of Colorado from time to time obtaining.
XXI. PARTIAL INVALIDITY.
The invalidity or illegality of any provision herein shall not be
deemed to affect the validity of any other provision.
The foregoing Stock Incentive Plan of Renaissance Entertainment
Corporation was approved by a majority of the Board of Directors of the Company
at a special meeting of the Board of Directors on April 21, 1993.
RENAISSANCE ENTERTAINMENT
CORPORATION
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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 September 28, 2001, 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 September 21, 2001, at the Annual Meeting of Shareholders to be
held on October 30, 2001at 275 Century Circle, Suite 102, Louisville, Colorado,
at 9:30 a.m. Mountain Time, and at any adjournment thereof.
1. AUTHORITY TO VOTE FOR ELECTION OF | | GRANT | | WITHHOLD
CHARLES S. LEAVELL, SANFORD L. SCHWARTZ,
ROBERT M. GELLER, 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 AN | | FOR | | AGAINST | | ABSTAIN
AMENDMENT TO THE RENAISSANCE ENTERTAINMENT
CORPORATION 1993 INCENTIVE STOCK PLAN TO INCREASE THE NUMBER OF SHARES
AUTHORIZED UNDER SUCH PLAN FORM 750,000 TO 1,250,000 SHARES. 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
This Proxy, when properly executed, will be voted in the manner
directed on the Proxy be the undersigned stockholder. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF EACH OF THE NOMINEES TO THE BOARD
LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3.
Please sign exactly as your name appears on this card. When shares are held
by joint tenants, both should sign. If signing as attorney, guardian, executor,
administrator or trustee, please give full title as such. If a corporation,
please sign in the corporate name by the president or other authorized officer.
If a partnership, please sign in the partnership name by an authorized person.
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(Signature)
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(Signature, if held jointly)
Dated: ___________________________, 2001
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
RETURN ENVELOPE.