SCHEDULE 14A
(Rule 14a)
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
Definitive Additional Materials
Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Rand Capital Corporation
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11
(Set forth the amount on which the filing fee is calculated and state
how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
Proxy Statement Rand Capital Corporation
Notice of annual meeting of shareholders
The 1999 Annual Meeting of Shareholders of Rand Capital Corporation
(the "Corporation") will be held on Tuesday, April 27, 1999, at 10:00 am in Room
602, Rand Building, 14 Lafayette Square, Buffalo, New York, for the following
purposes:
1.To elect seven directors to hold office until the next Annual Meeting of
Shareholders and until their successors have been elected and qualified;
2.To ratify the selection of Deloitte & Touche LLP as independent auditors
for the 1999 fiscal year for the Corporation; and
3.To consider and act upon such other business as may properly come
before the meeting. Shareholders of record at the close of business
on March 15, 1999 are entitled to notice of and to vote at the meeting,
and at any adjournment thereof.
March 22, 1999 By Order of the Board of Directors,
Buffalo, New York Reginald B. Newman II
Chairman
General Information
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Rand Capital Corporation (the
"Corporation"), for the Annual Meeting of Shareholders to be held on Tuesday,
April 27, 1999. Only shareholders of record at the close of business on March
15, 1999 are entitled to notice of and to vote at the meeting, and at any
adjournment thereof. On that date, the Corporation had outstanding 5,708,034
Common Shares, par value $.10 per share ("shares").
Each share entitles the holder to one vote. Shares cannot be voted at the
meeting unless the shareholder is present or represented by proxy. If the
enclosed form of proxy is returned properly executed, the shares represented
thereby will be voted at the meeting in accordance with the instructions
contained in the proxy, unless the proxy is revoked prior to its exercise. Any
shareholder who executes and delivers the accompanying form of proxy has the
right to revoke it at any time before it is voted. A shareholder may revoke a
proxy by executing a subsequently dated proxy or a notice of revocation,
provided such subsequent proxy or notice is delivered to the Corporation prior
to the taking of a vote, or by voting in person at the meeting. Proxies
submitted with abstentions and broker non-votes will be counted in determining
whether or not a quorum is present. Abstentions and broker non-votes will not be
counted in tabulating the votes cast on proposals submitted to shareholders.
This Proxy Statement and accompanying form of proxy are being mailed to
shareholders on or about March 22, 1999. A copy of the Corporation's 1998 Annual
Report, which contains financial statements, accompanies this Proxy Statement.
The cost of soliciting proxies in the accompanying form will be borne by the
Corporation. The Corporation does not expect to pay any compensation for the
solicitation of proxies, but may pay brokers, nominees, fiduciaries and other
custodians their reasonable fees and expenses for sending proxy materials to
beneficial owners and obtaining their instructions. In addition to solicitation
by mail, proxies may be solicited in person or by telephone by directors,
officers and regular employees of the Corporation, who will receive no
additional compensation therefor.
The Corporation's office is located at 2200 Rand Building, Buffalo, New
York 14203; telephone number 716-853-0802.
Beneficial Ownership of Shares
Unless otherwise indicated, the following table sets forth beneficial
ownership of the Corporation's shares on March 15, 1999, by (a) persons known to
the Corporation to be beneficial owners of more than 5% of the outstanding
shares, (b) directors and nominees for director of the Corporation and (c) all
directors and officers of the Corporation as a group. Unless otherwise stated,
each person named in the table has sole voting and investment power with respect
to the shares indicated as beneficially owned by that person.
<TABLE>
<CAPTION>
Beneficial Owner Amount and Nature of Beneficial Percent of Class
Ownership (1)
<S> <C> <C>
(a) More than 5% Owners:
Reginald B. Newman II 776,050 13.6
2440 Sheridan Drive, Tonawanda, NY
Willis S. McLeese 700,000(2) 12.3
c/o 2200 Rand Building, Buffalo, NY (2)
(b) Directors and Nominees for Director:
Allen F. Grum 51,128 *
Luiz F. Kahl 64,516 1.1
+ Erland E. Kailbourne - 0 - *
Ross B. Kenzie 155,000 2.7
Willis S. McLeese 700,000(2) 12.3
Reginald B. Newman II 776,050 13.6
Jayne K. Rand 215,734 3.8
(c) All Directors and Officers as a group:
Nine persons 2,013,738(3) 35.3
* less than 1%
</TABLE>
(1) The beneficial ownership information presented is based upon information
furnished by each person or contained in filings made with the Securities
and Exchange Commission.
(2) Shares are owned by Colmac Holdings, Ltd., a corporation of which Mr.
McLeese is the Chairman and principal owner.
(3) Except as indicated above, members of the group have sole voting and
investment power over these shares.
1. Election Of Directors
Seven directors are to be elected at the meeting, each to serve until the
next Annual Meeting of Shareholders and until his or her successor has been
elected and qualified. Unless marked to the contrary, the proxies received will
be voted FOR the election of the seven nominees named below.
Each of the nominees, except for Erland E. Kailbourne, is presently a
member of the Board of Directors, and was elected at the Corporation's last
Annual Meeting of Shareholders. Each of the nominees has consented to serve as
director, if elected. If at the time of the meeting any nominee should be unable
to serve, it is the intention of the persons designated as proxies to vote, in
their discretion, for such other persons as may be designated as a nominee by
the Board of Directors.
Information Regarding the Nominees
*Allen F. Grum, 41, became a director of the Corporation in 1996. He has
served as the President and Chief Executive Officer of the Company since January
1996. Prior to becoming President, Mr. Grum served as Senior Vice President of
the Company commencing in June 1995. From 1994 to June 1995, he was Executive
Vice President of Hamilton Financial Corporation, and from 1991-1994 he served
as Senior Vice President of Marine Midland Mortgage Corporation. Mr. Grum is
also a director of ARIA Wireless Systems, Inc., a marketer of wireless radio
transmission communication equipment.
Luiz F. Kahl, 62, became a director in January 1997. He has been President
of The Vector Group, LLC, Williamsville, NY, a private investment company since
February 1996. Prior thereto, he was the President of the Carborundum Company,
and Chief Executive Officer of BP Advanced Materials, Niagara Falls, NY,
subsidiaries of British Petroleum plc, manufacturers of high technology ceramic
materials since 1984.
Erland E. Kailbourne, 58, is being nominated for director for the first
time. Since October 1998 he has been Chief Executive Officer and President, John
R. Oishei Foundation. Prior thereto, he was Chairman & Chief Executive Officer
of Fleet National Bank, New York Region and Chairman & Chief Executive Officer
of Security Norstar Bank. Mr. Kailbourne is also a director of Albany
International Corporation, a manufacturer of paper machine clothing.
Ross B. Kenzie, 67, became a director in 1996. Mr. Kenzie has been retired
since 1990. Prior thereto, he was the Chairman of the Board and Chief Executive
Officer of Goldome Bank, Buffalo, NY, a savings bank, since 1980.
*Willis S. McLeese, 85, became a director in 1986. Since 1976, Mr. McLeese
has been the Chairman of Colmac Holdings Limited, Toronto, Ontario, Canada,
which develops, owns and operates cogeneration and alternative energy electric
power generating plants.
*Reginald B. Newman II, 61, became a director in 1987 and has been Chairman
of the Board since 1996. Mr. Newman has been President of NOCO Energy
Corporation, Tonawanda, NY, a petroleum distributor, since 1960. Mr. Newman is
also a director of M&T Bank, a financial institution headquartered in Buffalo,
NY.
Jayne K. Rand, 38, became a director in 1989. Since 1993, Ms. Rand has been
a Vice President of M&T Bank. From 1989 to 1993, Ms. Rand was an Assistant Vice
President of Marine Midland Bank.
+ Erland Kailbourne has been nominated by the Board of Directors.
Thomas R. Beecher, Jr., who was elected at the Corporation's last
Annual Meeting of Shareholders, has chosen not to stand for
election, will serve as Director Emeritus.
* Designates Directors and nominees for Director who are "interested
persons" within the meaning of Section 2(a) (19) of the Investment
Company Act of 1940, as amended (the "1940 Act"). Mr. Newman and
Mr. McLeese are included in this category as a result of their
percentage ownership of shares.
<PAGE>
Committees and Meeting Data
The following Committees of the Board of Directors have the members
indicated below:
Audit Committee Compensation Committee Governance Committee
--------------- ---------------------- --------------------
*Willis S. McLeese Ross B. Kenzie Jayne K. Rand
Luiz F. Kahl Luiz F. Kahl Ross B. Kenzie
Jayne K. Rand Jayne K. Rand Open
The Audit Committee considers and recommends to the Board of Directors the
selection of the Corporation's auditors and the range of their services. It
reviews with the auditors the plan and results of the annual audit, the adequacy
of the Corporation's system of internal accounting controls and the costs of the
auditor's services.
The Compensation Committee is responsible for setting the compensation of
the senior executive officers, reviewing the criteria that form the basis for
management's recommendations for officer and employee compensation and reviewing
management's recommendations in this regard.
The Governance Committee is responsible for recommending committee
memberships, ensuring the annual performance evaluation of the President is
completed, and considering and recommending nominees for the Board of Directors.
The Committee will consider a nominee for election to the Board recommended by a
shareholder if the shareholder submits to the Committee a written proposal which
includes the qualifications of the proposed nominee and the consent of the
proposed nominee to serve if elected.
In 1998 the full board met on seven occasions, the Audit and Governance
Committees each met twice in 1998, and the Compensation Committee met once. Each
incumbent director attended at least 86% of the aggregate number of meetings of
the Board of Directors and of the Committees of the Board of which he or she is
a member during the year.
* Designates "interested persons" as noted above.
+ Replacement for Thomas Beecher to be appointed by the Board
<PAGE>
Statement of Financial Position Years Ended December 31, 1998 & 1997
Executive Officers
In addition to Mr. Grum, the executive officers of the company include:
Nora B. Sullivan, 41, has served as Executive Vice President of the
Corporation since September 1995. From February 1995 to July 1995, Ms. Sullivan
served as Senior Associate at Barakat & Chamberlain, a financial and economic
consulting firm located in San Francisco, CA. From 1993 to 1994, Ms. Sullivan
attended The Columbia University Graduate School of Business where she received
an MBA with concentrations in both Finance and International Business. From 1991
to 1992, Ms. Sullivan served as General Counsel to Integrated Waste Services,
Inc., a publicly held solid waste management company located in Buffalo, NY.
Daniel P. Penberthy, 36, has served as Treasurer of the Corporation since
August 1997. Mr. Penberthy is also currently enrolled in the State University of
Buffalo MBA program. From 1993 to 1997, Mr. Penberthy served as Chief Financial
Officer for both the Greater Buffalo Partnership (formerly the Chamber of
Commerce) and the Greater Buffalo Convention and Visitors Bureau. Prior thereto,
from 1990 to 1993 Mr. Penberthy served as a Senior Associate with the Greater
Buffalo Development Foundation, a regional business development organization.
Prior to 1990, Mr. Penberthy was employed by KPMG, a public accounting firm.
Compensation The following table sets forth information with respect to the
compensation paid or accrued by the Corporation in the 1998 fiscal year to each
director, and to each executive officer of the Corporation with aggregate
compensation from the Corporation in excess of $60,000. The Corporation is not
part of a fund complex.
Pension or Retirement
Benefits Accrued as
Part of Company
Name & Position Compensation Expenses
- --------------- ------------ --------
Allen F. Grum, President, Director $ 120,739 $ 7,020 (1)
Ross B. Kenzie, Director $ 6,250 0
Willis S. McLeese, Director $ 6,250 0
Reginald B. Newman II, Director $ 7,000 0
Jayne K. Rand, Director $ 6,250 0
Luiz F. Kahl, Director $ 6,250 0
Nora B. Sullivan, Executive Vice President $ 96,363 $ 5,700 (1)
Daniel P. Penberthy, Treasurer $ 72,533 $ 3,650 (1)
(1) Included within the indicated compensation is payment of Corporation
contributions to the Corporation's 401(k) Profit Sharing Plan. To date, an
aggregate of $34,503 has been deferred for payment to Mr. Grum, Ms. Sullivan and
Mr. Penberthy. Under the plan, participants may elect to contribute up to 20% of
their compensation on a pretax basis by salary reduction. For eligible
employees, the Corporation makes a discretionary flat contribution of 1% of
compensation and matches an eligible contribution of up to a maximum of five
percent (5%). In addition, the Corporation may contribute an annual
discretionary amount as determined by the Board of Directors. In 1998, the
Corporation did not make a discretionary contribution to the 401(k) Plan.
Director Compensation
During 1998, under the Corporation's standard compensation arrangements
with directors, each non-employee director receives an annual fee of $1,000 plus
$750 for attendance at each meeting of the Board of Directors and $250 for each
separate meeting of a Committee. The Chairman of the Board, Mr. Newman, receives
an annual fee of $2,500 plus $750 for attendance at Board meetings.
Stock Options/Stock Appreciation Rights
Restrictions imposed on registered investment companies by the Investment
Company Act of 1940 preclude the Corporation from offering stock options or
stock appreciation rights incentive packages to its employees. The Corporation
does not have any other forms of restricted stock or employee share benefit
plans.
Section Sixteen (a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and persons who own more than
ten percent of the Corporation's stock, to file with the Securities and Exchange
Commission initial reports of stock ownership and reports of changes in stock
ownership. Reporting persons are required by SEC regulations to furnish the
Corporation with all Section 16(a) reports they file.
To the Corporation's knowledge, based solely on review of the copies of
such reports furnished to the Corporation and written representations that no
other reports were required, all Section 16(a) filing requirements applicable to
its officers, directors and greater than ten percent beneficial owners were
complied with during the fiscal year ended December 31, 1998.
Directors' and Officers' Liability Insurance
The Corporation has an insurance policy from Agriculture Excess and Surplus
Insurance Company that indemnifies (1) the Corporation for any obligation
incurred as a result of the Corporation's indemnification of its directors and
officers under the provisions of the New York Business Corporation Law and the
Corporation's Bylaws, and (2) the Corporation's directors and officers as
permitted under the New York Business Corporation Law and the Corporation's
Bylaws. The policy covers all directors and officers of the Corporation for the
12 months ending December 1999 for a total premium of $37,000. No sums have been
paid to the Corporation or its officers or directors under the insurance
contract.
2. Ratification of selection of independent auditors
The Board of Directors has selected the firm of Deloitte & Touche LLP,
Buffalo, New York, as the independent auditors to examine the accounts of the
Corporation for the 1999 fiscal year, subject to ratification by the
shareholders at the Annual Meeting. The directors approving such selection
included a majority of the Corporation's directors who are not "interested
persons" of the Corporation as defined in the Investment Company Act of 1940.
Deloitte & Touche LLP audited the accounts of the Corporation for the 1998
fiscal year.
A representative of Deloitte & Touche LLP is expected to be present at the
Annual Meeting of Shareholders and will be available to respond to appropriate
questions and will be given an opportunity to make a statement if desired.
The board of directors recommends a vote for the ratification of the appointment
of deloitte & touche llp as the independent auditors of the corporation for the
1999 fiscal year.
3. Other Business
The Corporation does not know of any other matters to come before the
meeting. However, if any other matters properly come before the meeting, it is
the intention of the persons designated as proxies to vote in accordance with
their best judgment on such matters.
Shareholder Proposals for the 2000 Annual Meeting
Shareholder proposals intended to be presented at the 2000 Annual Meeting
of Shareholders must be received at the Corporation's offices not later than
December 10, 1999, to be considered for the Corporation's proxy statement and
form of proxy for that meeting.
By Order of the Board of Directors,
Reginald B. Newman II
Chairman of the Board
March 22, 1999
It is important that proxies be promptly returned. shareholders are urged to
sign, date and return the proxy in the enclosed envelope, to which no postage
need be affixed if mailed in the united states. if you attend the meeting you
may, if you wish, withdraw your proxy and vote in person.
