<PAGE> 1
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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 under sec. 240.14a-12.
</TABLE>
BRANTLEY CAPITAL CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(l)(ii), 14a-6(i)(l), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] 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: ...........................................................
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<PAGE> 2
BRANTLEY CAPITAL CORPORATION
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the 2000 Annual Meeting of Stockholders of
Brantley Capital Corporation, a Maryland corporation (the "Company"), will be
held on Tuesday, June 13, 2000 at 10:00 a.m. Eastern Daylight Time, at the
Residence Inn, Beachwood, Ohio, for the following purposes:
1. To elect one director, as set forth in the accompanying Proxy Statement;
and
2. To consider and take action upon such other matters as may properly come
before the meeting or any adjournment thereof.
The holders of record of shares of common stock of the Company at the close
of business on May 12, 2000, will be entitled to receive notice of and vote at
the Annual Meeting.
IT IS IMPORTANT TO YOUR INTERESTS THAT ALL STOCKHOLDERS PARTICIPATE IN THE
AFFAIRS OF THE COMPANY, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. ACCORDINGLY,
WE URGE YOU PROMPTLY TO FILL OUT, SIGN AND RETURN THE ENCLOSED PROXY EVEN IF YOU
PLAN TO ATTEND THE MEETING. YOU HAVE THE OPTION TO REVOKE IT AT ANY TIME PRIOR
TO THE MEETING, OR TO VOTE YOUR SHARES PERSONALLY ON REQUEST IF YOU ATTEND THE
MEETING.
By order of the Board of Directors,
PAUL H. CASCIO
Vice President and Secretary
May 17, 2000
<PAGE> 3
BRANTLEY CAPITAL CORPORATION
May 17, 2000
PROXY STATEMENT
GENERAL INFORMATION
The proxy that accompanies this statement is solicited by the Board of
Directors of Brantley Capital Corporation, a Maryland corporation (the
"Company"), for use at the 2000 Annual Meeting of the Stockholders of the
Company to be held on June 13, 2000, or at any adjournment thereof. This proxy
statement was first mailed on May 17, 2000 to stockholders of record on May 12,
2000.
Any stockholder giving a proxy for the meeting may revoke it before it is
exercised by giving a later dated proxy or by giving notice of revocation to the
Company in writing or in the open meeting. However, the mere presence at the
meeting of the stockholder granting a proxy does not revoke the proxy. Unless
revoked as stated above, the shares of common stock, par value $.01 per share
(the "Common Stock"), represented by valid proxies will be voted on all matters
to be acted upon at the meeting. On any matter or matters with respect to which
the proxy contains instructions for voting, such shares will be voted in
accordance with such instructions. Abstentions and broker non-votes will be
deemed to be present for the purpose of determining a quorum for the meeting but
will be deemed not voting on the issues or matters as to which abstention is
applicable. Brokers who have not received voting instructions from beneficial
owners generally may vote in their discretion with respect to the election of
directors.
The cost of solicitation of proxies in the form accompanying this statement
will be borne by the Company. Proxies will be solicited by mail or by telephone
or personal interview with an officer or regular employee of the Company or by
requesting brokers and other custodians, nominees and fiduciaries to forward
proxy soliciting material to the beneficial owners of shares held of record by
such brokers, custodians, nominees or fiduciaries, each of whom will be
reimbursed by the Company for their expenses in so doing.
The record date for determination of stockholders entitled to vote at the
2000 Annual Meeting is May 12, 2000. As of May 12, 2000, the outstanding voting
securities of the Company consisted of 3,810,535 shares of Common Stock. Each
share of Common Stock (exclusive of treasury shares) has one vote. The Company
held no Common Stock in its treasury on the record date. The presence, in person
or by proxy, of the holders of a majority of the Common Stock of the Company
outstanding and entitled to be cast shall constitute a quorum for the purposes
of the 2000 Annual Meeting.
ELECTION OF DIRECTORS
The affirmative vote of a plurality of the shares of Common Stock
represented at the 2000 Annual Meeting is required to elect Richard Moodie as a
director of the Company for the term for which he has been nominated. THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF RICHARD
MOODIE AS DIRECTOR OF THE COMPANY FOR THE TERM FOR WHICH HE HAS BEEN NOMINATED.
The following information was furnished to the Company by the nominee and
by each director or executive officer currently serving and sets forth the name,
age, principal occupation or employment of each such person and the period
during which he has served as a director or executive officer of the Company.
Except as otherwise noted below, each director (including the nominee) or
executive officer has held his principal occupation or employment for at least
five years.
NOMINEE FOR TERM EXPIRING IN 2005
RICHARD MOODIE, 50, a director of the Company, is a founder, President and
Chief Executive Officer of KraftMaid Cabinetry, Inc. He has over 29 years of
experience in growing and managing a manufacturing and marketing business. In
1990, Mr. Moodie sold his majority interest in KraftMaid to Masco Corporation of
Taylor,
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<PAGE> 4
Michigan, a $5 billion home furnishing and building materials company. Mr.
Moodie holds a limited partnership interest in Brantley Venture Partners III,
L.P. ("BVP III") and Brantley Partners IV, L.P. ("BVP IV"). Mr. Moodie has been
a director of the Company since its formation in 1996.
DIRECTORS WHOSE TERMS EXPIRE IN 2001
PAUL H. CASCIO,* 38, a director of the Company, serves as Vice President
and Secretary of the Company and as Vice President and Secretary of the
Investment Adviser. Mr. Cascio also serves as a general partner of the general
partner of Brantley Venture Partners II, L.P. ("BVP II"), BVP III and BVP IV.
Prior to joining BVP II and BVP III in May, 1996, Mr. Cascio was a Managing
Director and head of the General Industrial Manufacturing and Services Group in
the Corporate Finance Department at Dean Witter Reynolds Inc. Before joining
Dean Witter in 1986, Mr. Cascio was employed in the Corporate Finance Department
at E.F. Hutton & Company Inc. Mr. Cascio has been Vice President, Secretary, and
a director of the Company since 1998.
PETER SALTZ, 56, a director of the Company, is a consultant to KraftMaid
Cabinetry, Inc., the second largest cabinet manufacturer in the United States.
Mr. Saltz served as Vice Chairman of Finance from 1997 to 1999 and Senior
Executive Vice President and Chief Financial Officer of KraftMaid from 1980 to
1997 and has over 29 years of experience as a certified public accountant in the
United States and South Africa. Mr. Saltz holds a limited partnership interest
in BVP III and BVP IV. Mr. Saltz has been a director of the Company since 1998.
DIRECTORS WHOSE TERMS EXPIRE IN 2002
JAMES P. OLIVER,* 55, a director of the Company, is a partner with the law
firm of Squire, Sanders & Dempsey L.L.P. and is a past member of the firm's
Management Committee. Mr. Oliver's practice focuses on general corporate and
board matters with substantial experience in high net worth individuals and
their succession wealth issues. Mr. Oliver is a graduate of Bowling Green State
University and the University of Cincinnati College of Law. Mr. Oliver has been
a director of the Company since he was appointed by the Board of Directors in
1998 to fill a vacancy on the Board. The law firm of Squire, Sanders & Dempsey
L.L.P. has represented the Company as general counsel since shortly after its
formation in 1996.
BENJAMIN F. BRYAN, 46, a director of the Company, is President of Owl
Properties Company, a real estate management company. He is also a partner in
Synergy Capital LLC, a real estate investment and development entity. From 1992
to 1997, Mr. Bryan served as Executive Vice President and a director of The
Tower Properties Company, a publicly owned, Kansas City, Missouri-based
developer, owner and manager of real estate. From 1980 to 1991, Mr. Bryan held a
series of public policy and public administration positions, including Executive
Assistant to the Mayor of Cleveland, Public Affairs Manager with the Denver
Chamber of Commerce and Executive Director of the Metro Denver Transportation
Development Commission. Mr. Bryan has been a director of the Company since its
formation in 1996.
DIRECTORS WHOSE TERMS EXPIRE IN 2003
ROBERT P. PINKAS,* 46, is Chairman of the Board, Chief Executive Officer,
Treasurer and a director of the Company; and Chairman of the Board, Chief
Executive Officer, Treasurer and a manager of Brantley Capital Management,
L.L.C., which serves as the investment adviser to the Company (the "Investment
Adviser"). Mr. Pinkas was the founding partner of Brantley Venture Partners,
L.P., a venture capital fund started in 1987 ("BVP I"), and led the formation of
three related venture capital funds, BVP II, BVP III and BVP IV. A family
limited partnership of which Mr. Pinkas is the sole general partner serves as a
general partner of the sole general
- ---------------
* Directors who are "interested persons" with respect to the Company, as defined
in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the
"Investment Company Act"). Messrs. Pinkas and Finn are "interested persons"
with respect to the Company because of their positions as directors and
executive officers of the Company and executive officers and managers of the
Investment Adviser. Mr. Cascio is an "interested person" with respect to the
Company because of his position as a director and executive officer of the
Company and an executive officer of the Investment Adviser. Mr. Oliver is an
"interested person" with respect to the Company because his law firm serves as
the Company's legal counsel.
3
<PAGE> 5
partner of each of BVP I, BVP II, BVP III and BVP IV. Each of BVP I, BVP II, BVP
III and BVP IV has made venture capital investments similar to the investments
the Company makes in private companies. From 1981 to 1987, Mr. Pinkas was active
in venture capital management and financing as a founding director and investor
in seven early-stage companies. He serves on the board of directors of several
portfolio companies in which one or more of BVP I, BVP II, BVP III and BVP IV
have invested, including Gliatech, Inc., Pediatric Services of America, Inc.,
Medirisk, Inc., Quad Systems Corporation and Waterlink, Inc. Mr. Pinkas has been
Chairman of the Board, Chief Executive Office, Treasurer and a director of the
Company since its formation in 1996.
L. PATRICK BALES, 57, a director of the Company, is a partner with the firm
of Donahue/Bales Associates, an executive search consulting firm that services
smaller growth companies as well as major corporations in both the private and
public sector. The firm conducts executive search assignments both domestically
and internationally and has affiliate offices in London and Tokyo. Previously,
Mr. Bales was employed with Paul R. Ray & Company from 1981 to 1983 in their
Chicago office and was on the professional staff of two other search firms in
the Chicago area from 1975 to 1981. He spent five years with Weber Marking
Systems prior to embarking upon his career in executive search. Mr. Bales has
been a director of the Company since its formation in 1996.
DIRECTORS WHOSE TERMS EXPIRE IN 2004
MICHAEL J. FINN,* 50, is President and a director of the Company and is
President and a manager of the Investment Adviser. Mr. Finn also serves as a
general partner of the general partner of BVP II, BVP III and BVP IV. From 1987
to 1995, Mr. Finn served as portfolio manager and vice president of the Venture
Capital Group of Sears Investment Management Company ("SIMCO") in Chicago. In
this capacity, Mr. Finn managed the development of a $150 million portfolio of
private equity investments, including the investment of over $24 million
directly in 25 operating companies. From 1983 to 1987, he led the development of
a $250 million venture capital program for the State of Michigan Department of
Treasury as its deputy director. In 1982, Mr. Finn founded and served as
president of the Michigan Certified Development Corporation, a small business
development corporation which financed over $50 million of investments in six
companies in Michigan during the period 1982 to 1984. In 1976, he launched the
Forward Development Corporation, an entity sponsored by the U.S. Small Business
Administration for small business financing. He serves on the board of directors
of several portfolio companies in which one or more of BVP I, BVP II, BVP III
and BVP IV have invested, including Medirisk, Inc. and Pediatric Services of
America, Inc. Mr. Finn has been a director and the President of the Company
since its formation in 1996.
JAMES M. SMITH, 51, a director of the Company, is employed by Pilgrim
Baxter & Associates where he co-manages the PGHG Strategic Small Company Fund.
In addition, Mr. Smith leads the investment team responsible for management of
Pilgrim Baxter's Hybrid Partners I and II and holds additional small cap growth
portfolio management responsibilities. Mr. Smith possesses over twenty years of
investment experience in equity portfolio management and research. Mr. Smith is
a Chartered Financial Analyst and a graduate of Washington & Lee University. He
earned his MBA from Northwestern University. Mr. Smith was appointed in 1998 by
the Board of Directors to fill a vacancy on the Board.
NON-DIRECTOR EXECUTIVE OFFICER
TAB A. KEPLINGER, 39, has served as Vice President and Chief Financial
Officer of the Company since its inception in 1996. Prior to joining the Company
in February, 1997, Mr. Keplinger was Vice President and Chief Financial Officer
of Victoria Financial Corporation. Before joining Victoria Financial Corporation
in 1990, Mr. Keplinger was a senior audit manager in the manufacturing and
service sectors for KPMG Peat Marwick.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the officers
and directors of the Company and persons who beneficially own more than 10% of
the Common Stock to file reports of securities ownership and changes in such
ownership with the Securities and Exchange Commission (the "Commission").
Officers, directors and 10% stockholders are also required by the rules
promulgated by the Commission to furnish to the Company copies of all Section
16(a) reports they file.
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<PAGE> 6
Based solely upon a review of the copies of such forms furnished to the
Company, the Company believes that each of its officers and directors complied
with all Section 16(a) filing requirements applicable to them during the fiscal
year ended December 31, 1999.
STOCK OWNERSHIP OF OFFICERS, DIRECTORS AND BENEFICIAL OWNERS
The following table sets forth as of March 31, 2000, the number of shares
of Common Stock of the Company beneficially owned by each director, nominee for
director, executive officer and all directors and executive officers as a group,
according to information furnished to the Company by such persons:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OWNERSHIP(1) OF CLASS
---- ------------ --------
<S> <C> <C>
L. Patrick Bales....................................... 6,800(2) *
Benjamin F. Bryan...................................... 9,777(2) *
Paul H. Cascio......................................... 43,444(3) 1.03%
Michael J. Finn........................................ 88,517(4) 2.10%
Tab A. Keplinger....................................... 9,583(5) *
Richard Moodie......................................... 16,000(2) *
James P. Oliver........................................ 2,000(7) *
Robert P. Pinkas....................................... 298,916(6) 7.09%
Peter Saltz............................................ 13,000(7) *
James M. Smith......................................... 2,000(7) *
All Directors and Executive Officers as a Group (10
persons)............................................. 490,037 11.58%
</TABLE>
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* Shares owned are less than one percent of class.
(1) Each of the persons named in the above table has sole voting and investment
power with respect to the shares indicated as beneficially owned.
(2) Includes 6,000 shares subject to stock option grants.
(3) Includes 33,333 shares subject to stock option grants.
(4) Includes 83,333 shares subject to stock option grants.
(5) Includes 8,333 shares subject to stock option grants.
(6) Includes 250,000 shares subject to stock option grants.
(7) Includes 2,000 shares subject to stock option grants.
The following table sets forth information about one person known by the
Company to be a beneficial owner of more than 5% of the Company's outstanding
shares of Common Stock:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP(1) CLASS
------------------- ----------------- ----------
<S> <C> <C>
Maxus Investment Group 515,500 12.5%
1301 East Ninth Street, Suite 3600
Cleveland, Ohio 44114-1800
</TABLE>
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(1) Information regarding share ownership was obtained from Schedule 13D filed
by Maxus Investment Group on January 26, 1999. All of the reporting persons
and entities known as Maxus Investment Group reported sole voting and
investment power as to 60,000 shares of Common Stock and shared voting and
investment power as to 455,500 shares of Common Stock.
5
<PAGE> 7
EXECUTIVE COMPENSATION
ORGANIZATION AND COMPENSATION OF THE BOARD OF DIRECTORS
The Company's Board of Directors held four regularly scheduled meetings
during the last fiscal year. The standing committees of the Board of Directors
include the Audit Committee, the Compensation Committee and the Nominating
Committee.
The function of the Audit Committee is to make recommendations to the Board
of Directors concerning selection of the Company's independent public
accountant, oversee the Company's accounting methods and implement and review
the audit and findings of the Company's independent public accountant for the
purpose of reporting to the Board of Directors. The Audit Committee, currently
composed of Messrs. Bales, Bryan and Moodie, held two meetings in connection
with Board meetings during 1999.
The function of the Compensation Committee is to assist the Board of
Directors in evaluating and recommending compensation of the senior executives
of the Company and to administer the Company's Stock Option Plan in accordance
with the terms thereof, including the designation of which officers and
employees of the Company shall receive stock options, and the number of shares
which should be subject to each option so granted. The Compensation Committee,
currently composed of Messrs. Bales, Bryan and Moodie, held one meeting in
connection with a Board meeting during 1999.
The function of the Nominating Committee is to recommend candidates for the
Board of Directors. The Nominating Committee, currently composed of Messrs.
Pinkas*, Finn* and Bales, held one meeting in conjunction with a Board meeting
during 1999. Stockholders also may submit written recommendations to the
Nominating Committee for consideration.
Each director who is not an officer or an employee of the Company receives
a monthly fee of $500 and an attendance fee of $1,000 for each Board and
committee meeting attended.
COMPENSATION
The following table sets forth the compensation of the Company's directors,
none of whom is an employee of the Company. Except as set forth in such table,
no other compensation was paid to any director (including those who also serve
as executive officers) by the Company or any other entity in the Company's fund
complex during 1999. No information has been provided with respect to executive
officers of the Company (other than those who also serve as directors), since
none of them receives aggregate compensation from the Company and the Company's
fund complex in excess of $60,000.
- ---------------
* Directors who are "interested persons" with respect to the Company, as defined
in Section 2(a)(19) of the Investment Company Act.
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<PAGE> 8
COMPENSATION TABLE
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION TOTAL COMPENSATION
NAME OF DIRECTOR FROM THE COMPANY FROM FUND AND FUND COMPLEX
---------------- ---------------------- --------------------------
<S> <C> <C>
L. Patrick Bales(1)........... $10,000 $10,000
Benjamin F. Bryan(1).......... 10,000 10,000
Paul H. Cascio................ 0 0
Michael J. Finn............... 0 0
Richard Moodie(1)............. 10,000 10,000
James P. Oliver............... 0 0
Robert P. Pinkas.............. 0 0
Peter Saltz(1)................ 10,000 10,000
James M. Smith(1)............. 10,000 10,000
</TABLE>
- ---------------
(1) Compensation consists of amounts received for service as a director. See
"Organization and Compensation of the Board of Directors" above.
The following table sets forth information regarding individual grants of
stock options made during the last fiscal year to each of the named individuals.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER % OF TOTAL ANNUAL RATES OF
OF OPTIONS STOCK PRICE
SECURITIES GRANTED TO EXERCISE APPRECIATION FOR
UNDERLYING EMPLOYEES OR BASE OPTION TERM
OPTIONS IN PRICE EXPIRATION --------------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% 10%
---- ---------- ----------- -------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Robert P. Pinkas............ 75,000 15.0% 12.77 5/18/09 602,324 1,526,407
Michael J. Finn............. 25,000 5.0% 12.77 5/18/09 200,775 508,802
Paul H. Cascio.............. 25,000 5.0% 12.77 5/18/09 200,775 508,802
Tab A. Keplinger............ 25,000 5.0% 12.77 5/18/09 200,775 508,802
L. Patrick Bales............ 6000 1.0% 12.77 5/18/09 48,186 122,113
Benjamin F. Bryan........... 6000 1.0% 12.77 5/18/09 48,186 122,113
Richard Moodie.............. 6000 1.0% 12.77 5/18/09 48,186 122,113
James P. Oliver............. 2000 1.0% 12.77 5/18/09 16,062 40,704
James M. Smith.............. 2000 1.0% 12.77 5/18/09 16,062 40,704
</TABLE>
The exercise of the options granted in 1999 to Messrs. Pinkas, Finn,
Cascio, and Keplinger is governed by a multi-year vesting schedule, as described
below under the caption "Stock Options." The exercise of the options granted in
1999 to Messrs. Bales, Bryan, Moodie, Oliver, and Smith is governed by a
one-year vesting requirement, as described below under the caption "Stock
Options."
STOCK OPTIONS
The Company's 1996 Stock Option Plan (the "Stock Option Plan") permits the
granting of nonqualified stock options to officers and employees of the Company.
All officers of the Company are eligible to be selected to participate in the
Stock Option Plan. At present, the Company has no employees. The Stock Option
Plan is administered by the Compensation Committee of the Board of Directors,
which selects the persons who are eligible to participate and determines the
number of options to be granted.
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<PAGE> 9
The number of shares of Common Stock available for grant under the Stock
Option Plan is 1,175,000, subject to certain adjustments. Options granted under
the Stock Option Plan are exercisable at a price not less than the greater of
(i) the current market value (as defined in the Stock Option Plan) on the date
of option grant and (ii) the current net asset value of the shares of Common
Stock. Options become exercisable to the extent of one-third of the subject
shares after one year from the grant date, two-thirds of the subject shares
after two years from the grant date and all subject shares after three years
from the grant date.
The Company's Disinterested Director Option Plan (the "Director Option
Plan") permits the granting of non-qualified stock options to the directors of
the Company who are not employees or officers. All such directors of the Company
are eligible to be selected to participate in the Director Option Plan, which is
administered by the Compensation Committee of the Board of Directors. In order
for options to be issued to the non-employee, non-officer directors, the Company
obtained exemptive relief from the Securities and Exchange Commission. Under the
terms of the exemptive order and the Director Option Plan Agreement, each
qualified director will be granted an option to purchase 2,000 shares upon their
initial appointment to the Board of Directors. Throughout the term of the plan
and immediately following each annual meeting of stockholders of the Company,
each qualified director then serving on the Company's Board of Directors will be
granted options to purchase 2,000 additional shares, subject to adjustment. Such
option grants were made retroactively by the Company to its formation. As a
result, the three original qualifying directors who served on the Company's
Board of Directors since the Company's formation received options to purchase
6,000 shares each. The remaining qualifying directors who served on the
Company's Board of Directors since 1998 received options to purchase 2,000
shares each.
CHANGE OF PUBLIC ACCOUNTANTS
On January 12, 2000, the Company dismissed Ernst & Young LLP ("E&Y") as its
independent auditors and engaged Arthur Andersen LLP ("AA") to act as its
independent auditors to audit the Company's accounts for the fiscal year ending
December 31, 1999 and for the current fiscal year. Representatives of AA are
expected to be present at the 2000 Annual Meeting of Stockholders and will have
the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions. Representatives of E&Y are not
expected to be present at the 2000 Annual Meeting of Stockholders.
The decision to change accountants was based upon a review of fee proposals
for the upcoming fiscal year and was approved by the Audit Committee of the
Company's Board of Directors and by the Company's Board of Directors. E&Y's
reports on the Company's financial statements for the past two years did not
contain an adverse opinion or a disclaimer of opinion, and were not qualified or
modified as to uncertainty, audit scope, or accounting principles. During the
Company's two most recent fiscal years and the subsequent interim period
preceding the dismissal of E&Y, there were no disagreements with E&Y on any
matters of accounting principles or practices, financial statement disclosure,
or auditing scope or procedures, which disagreements, if not resolved to the
satisfaction of E&Y, would have caused them to make reference to the subject
matter of such disagreements in connection with their reports.
During the Company's two most recent fiscal years and the subsequent
interim period preceding E&Y's dismissal: (1) E&Y did not advise the Company
that the internal controls necessary for the Company to develop reliable
financial statements did not exist; (2) E&Y did not advise the Company that
information had come to E&Y's attention that led them to no longer be able to
rely on management's representations, or that made them unwilling to be
associated with the financial statements prepared by management; (3) E&Y did not
advise the Company of the need to expand significantly the scope of their audit,
or that information had come to their attention during such period that, if
further investigated, may (i) materially impact the fairness or reliability of
previously issued financial statements and Reports of Independent Auditors, or
the financial statements issued or to be issued covering the fiscal period(s)
subsequent to the date of the most recent financial statements covered by an
audit report, or (ii) cause E&Y to be unwilling to rely on management's
representations or be associated with the Company's financial statements; and
(4) E&Y did not advise the Company that information had come to their attention
that they had concluded materially impacted the fairness or reliability of
previously issued financial statements and Reports of Independent Auditors, or
the financial statements issued or to be issued covering the fiscal period(s)
subsequent to the date of the most recent financial statements covered by an
audit report.
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<PAGE> 10
During the Company's two most recent fiscal years and the subsequent
interim period prior to engaging AA, the Company did not consult AA regarding
either: (i) the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be
rendered on the Company's financial statements, and AA did not provide either a
written report or oral advice to the Company that AA concluded was an important
factor considered by the Company in reaching a decision as to the accounting,
auditing or financial reporting issue; or (ii) any matter that was either the
subject of a disagreement or a reportable event, each as defined in Item 304 of
Regulation S-K. However, AA has provided due diligence services in connection
with proposed and/or consummated investment transactions by the Company and its
affiliates.
STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Any stockholder who is the record or beneficial owner of at least 1% or
$2,000 in market value of Common Stock of the Company entitled to be voted at
the 2001 Annual Meeting of Stockholders and who has held such Common Stock for
at least one year may present a proposal at the 2001 Annual Meeting.
A stockholder who intends to present a proposal at the 2001 Annual Meeting
of Stockholders, and who wishes to have the proposal included in the Company's
proxy statement and form of proxy for that meeting, must deliver the proposal to
the Company by January 17, 2001. The Company must receive notice of all other
stockholder proposals for the 2001 Annual Meeting of Stockholders no later than
April 14, 2001 or earlier than March 15, 2001, or the Company will consider them
untimely, in which case the Company's proxy shall confer discretionary voting
authority regarding those stockholder proposals.
OTHER MATTERS
Management does not know of any other matters that will come before the
meeting. In case any other matter should properly come before the meeting, it is
the intention of the persons named in the enclosed proxy to vote in accordance
with their best judgment.
ANNUAL REPORT
The Company's annual report for the year ended December 31, 1999 is being
mailed, together with this Proxy Statement, to all stockholders entitled to
receive notice of and vote at the 2000 Annual Meeting of Stockholders.
Additional copies may be obtained from the undersigned.
Please sign, date and return the proxy at your earliest convenience in the
enclosed envelope. No postage is required for mailing in the United States. A
prompt return of your proxy will save the expense of further mailings.
By order of the Board of Directors
PAUL H. CASCIO, Vice President and
Secretary
May 17, 2000
9
<PAGE> 11
BRANTLEY CAPITAL CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF BRANTLEY
CAPITAL CORPORATION.
The undersigned hereby appoints Robert P. Pinkas and Michael J. Finn, and each
of them, the proxies of the undersigned, with full power of substitution, to
vote all Common Stock of Brantley Capital Corporation which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of Brantley Capital
Corporation, on June 13, 2000, and at any adjournments thereof.
IF NO INSTRUCTION IS INDICATED, AUTHORITY IS GRANTED TO CAST THE VOTE OF THE
UNDERSIGNED "FOR" THE ELECTION OF THE NOMINEE.
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PLEASE VOTE, DATE, AND SIGN ON REVERSE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE
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NOTE: THE SIGNATURE(S) ON THIS PROXY SHOULD CORRESPOND WITH THE NAME(S) IN WHICH
YOUR STOCK IS REGISTERED. WHEN STOCK IS REGISTERED JOINTLY IN THE NAMES OF TWO
OR MORE PERSONS. ALL SHOULD SIGN. WHEN SIGNING AS AN ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL TITLE AS SUCH. A PROXY
GIVEN BY A CORPORATION SHOULD BE SIGNED IN THE CORPORATE NAME BY THE CHAIRMAN OF
ITS BOARD OF DIRECTORS, ITS PRESIDENT, VICE PRESIDENT, SECRETARY OR TREASURER.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ----------------------------------- ----------------------------------
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<PAGE> 12
PLEASE MARK VOTE
|X| AS IN THIS EXAMPLE
<TABLE>
<S> <C> <C>
WITHHOLD
AUTHORITY
FOR TO VOTE FOR
BRANTLEY CAPITAL CORPORATION NOMINEE NOMINEE
1. Election of Director. [ ] [ ]
Mark box at right ----
if an address change or | | Richard Moodie
comment has been noted | |
on the reverse side ----
of this card.
2. In their discretion, the proxies are authorized
to vote upon such other business as may
properly come before the meeting or any
adjournment thereof.
</TABLE>
-------------------------
Date
Please be sure to sign and date this Proxy.
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Stockholder sign here Co-owner sign here
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