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
Rule 14a-11(c) or Rule 14a-12
THE MICROCAP FUND, INC.
(Name of Registrant as Specified in its Charter)
(Name of Persons(s) Filing Proxy Statement,
if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Ex-
change Act Rule 14a-6(i)(3).
[ ] 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:
Common Shares, par value $0.01 per share
Series A Convertible Preferred Shares,
par value $0.01 per share
(2) Aggregate number of securities to which trans-
action applies:
2,110,573 Common Shares
253,367 Series A Convertible Pre-
ferred Shares
(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):
$6.375 Common Shares
$7.96875 Series A Convertible Pre-
ferred Shares
(4) Proposed maximum aggregate value of transac-
tion:
$15,473,922
(5) Total fee paid:
$ 3,095
[X] 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:
THE MICROCAP FUND, INC.
575 FIFTH AVENUE
37TH FLOOR
NEW YORK, NEW YORK 10017
NOTICE OF SPECIAL SHAREHOLDERS MEETING
TO BE HELD JULY 19, 1996
NOTICE IS HEREBY GIVEN to the holders of common
shares, par value $0.01 per share (the "Common Stock"), and
the holders of preferred shares, par value $0.01 per share
designated as Series A Convertible Preferred Shares (the
"Preferred Stock"), that a special meeting of such sharehold-
ers of The MicroCap Fund, Inc. (the "Fund") shall be held at
the offices of Skadden, Arps, Slate, Meagher & Flom, 919 Third
Avenue, 33rd Floor, New York, New York 10022, on July 19, 1996
at 11:00 a.m. for the following purpose:
To consider and vote upon the liquidation and dissolution
of the Fund pursuant to the provisions of the Plan of
Complete Liquidation and Dissolution of the Fund approved
by the Fund's Board of Directors on May 9, 1996.
Shareholders of record on June 10, 1996 are the only
persons entitled to notice of and to vote at the meeting and
any adjournment thereof.
Your attention is directed to the attached Proxy
Statement. Whether or not you expect to be present at the
upcoming meeting, please fill in, sign, date and mail the
enclosed proxy as promptly as possible. A stamped return
envelope is enclosed for your convenience.
/s/ Joseph Lucchese
Secretary
YOUR VOTE IS IMPORTANT
PLEASE RETURN YOUR PROXY CARD PROMPTLY
NO MATTER HOW MANY SHARES YOU OWN
PROXY STATEMENT
THE MICROCAP FUND, INC.
575 FIFTH AVENUE
37TH FLOOR
NEW YORK, NEW YORK 10017
SPECIAL SHAREHOLDERS MEETING
TO BE HELD JULY 19, 1996
This Proxy Statement is furnished in connection with
the solicitation by the Board of Directors of The MicroCap
Fund, Inc. (the "Fund") of proxies to be voted at a Special
Shareholders Meeting of the Fund to be held at the offices of
Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, 33rd
Floor, New York, New York 10022 on July 19, 1996 at 11:00
a.m. and at any and all adjournments thereof (the "Meeting").
The approximate date of mailing of this Proxy Statement and
the accompanying form of proxy card is June 26, 1996. The
purpose of the Meeting is to consider and vote upon the
liquidation and dissolution of the Fund pursuant to the
provisions of the Plan of Complete Liquidation and Dissolution
of the Fund (the "Plan") approved by the Fund's Board of
Directors on May 9, 1996. The costs of this solicitation will
be paid for by the Fund.
The Fund's Board of Directors has selected June 10,
1996 as the record date (the "Record Date") to determine those
shareholders of the Fund that are entitled to vote. Only the
holders of record of common shares, par value $0.01 per share
(the "Common Stock"), and holders of record of preferred
shares, par value $0.01 per share designated as Series A
Convertible Preferred Shares (the "Preferred Stock"), on the
Record Date may vote at the Meeting. As of the Record Date,
there were 2,400,800 issued and 2,110,573 outstanding shares
of Common Stock with approximately 750 holders and 440,800
issued and 253,367 outstanding shares of Preferred Stock with
approximately 250 holders. The holders of shares representing
a majority of the Common Stock and Preferred Stock together
and of the Preferred Stock by itself that are outstanding on
the Record Date must be present in person or by proxy in order
for action to be taken on the Plan.
When the holders of Common Stock and Preferred Stock
vote together, each holder of a share of the Fund's Common
Stock is entitled to one vote per share of such Common Stock
and each holder of a share of the Fund's Preferred Stock is
currently entitled to one and one-quarter (1.25) vote per
share of such Preferred Stock. When the holders of Preferred
Stock vote by themselves as a separate class, each holder of a
share of the Fund's Preferred Stock is entitled to one vote
per share of such Preferred Stock.
Pursuant to the Articles of Incorporation of the
Fund and Maryland law, approval of the Plan requires the
affirmative vote of a majority of the shares of Common Stock
and Preferred Stock outstanding on the Record Date voting
together as a single class. In addition, pursuant to the
provisions of the Investment Company Act of 1940, as amended
(the "Investment Company Act"), approval of the Plan will also
require the affirmative vote of a majority of the shares of
Preferred Stock outstanding on the Record Date voting as a
separate class.
A proxy may be revoked before the Meeting by giving
written notice of revocation in person or by mail to the
Secretary of the Fund, by delivering a duly executed proxy
bearing a later date or by attending and voting at the Meet-
ing. Where a choice is specified by the shareholder in the
proxy, the proxy will be voted in accordance with the
shareholder's choice. If no specification is made in the
proxy, it will be voted "FOR" approval of the Plan. Absten-
tions will be counted as present for purposes of determining
whether a quorum of shares is present at the Meeting, but will
not be counted as a vote "FOR" the Plan. The proposal to
approve the Plan is considered a "non-discretionary" proposal,
which means that brokers who hold the Fund's shares in street
name for customers are not authorized to vote on such proposal
on behalf of their customers without specific voting instruc-
tions from such customers. If a broker returns a "non-vote"
proxy, indicating a lack of authority to vote on the proposal,
then the shares covered by such non-vote shall be deemed
present at the Meeting for purposes of determining a quorum
but shall not be deemed to be represented at the Meeting for
purposes of calculating the vote with respect to the proposal.
No matters other than the proposal to approve the
Plan may be acted upon at the Meeting.
In the event that sufficient votes in favor of the
proposal to approve the Plan are not received, the persons
named as proxies may propose one or more adjournments of the
Meeting to permit further solicitation of proxies. Such
adjournments will require the affirmative vote of the holders
of a majority of the shares present in person or by proxy at
the Meeting. The persons named as proxies will vote in favor
of such adjournments if they are instructed by a majority of
the shares represented in person or by proxy to vote for the
liquidation proposal. The Fund believes that dissenters
rights do not exist in connection with voting on the Plan.
THE FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
FEBRUARY 29, 1996, INCLUDING FINANCIAL STATEMENTS, HAS PREVI-
OUSLY BEEN MAILED TO SHAREHOLDERS. IF YOU HAVE NOT RECEIVED
THE ANNUAL REPORT OR WOULD LIKE TO RECEIVE ANOTHER COPY OF
SUCH REPORT, PLEASE CONTACT THE FUND AT 575 FIFTH AVENUE, 37TH
FLOOR, NEW YORK, NEW YORK 10017, OR CALL (800) 888-6534, AND
COPIES WILL BE SENT, WITHOUT CHARGE, BY FIRST-CLASS MAIL
WITHIN THREE BUSINESS DAYS OF YOUR REQUEST.
APPROVAL OF THE PLAN OF LIQUIDATION AND DISSOLUTION
Introduction
At a meeting held on May 9, 1996, the Board of
Directors considered and approved a Plan of Complete Liquida-
tion and Dissolution of the Fund (the "Plan"). A copy of the
Plan is attached as Exhibit A to this Proxy Statement. If the
Plan is approved by the shareholders, the investment securi-
ties and other assets of the Fund will be sold, creditors will
be paid or reserves for such payments established, and the
remaining net proceeds of such sales distributed to the
shareholders in cash, pro rata, in accordance with their
holdings. THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE PLAN.
Background
The Fund, formerly known as Commonwealth Associates
Growth Fund, Inc., is a Maryland corporation formed on January
23, 1993. The Fund is a non-diversified, closed-end manage-
ment investment company operating as a business development
corporation under the Investment Company Act. The Fund's
primary investment objective is to achieve long-term capital
appreciation of assets, rather than current income, by invest-
ing in the securities, including equity, debt securities and
debt securities convertible into equity, of emerging companies
and established companies that management believes offer
significant potential opportunities for growth ("Portfolio
Companies"). In addition, the Fund offers managerial assis-
tance to certain Portfolio Companies. The Fund's investment
objective is intended to provide investors with the opportuni-
ty to participate in investments which are generally not
available to the public and which typically require substan-
tial financial commitment. The Fund is managed internally by
its officers under the supervision of its Board of Directors.
The Fund's principal office is located at 575 Fifth Avenue,
New York, New York 10017 and its telephone number is (800)
888-6534.
The Fund completed an initial public offering of
2,194,000 shares of its Common Stock at $10.00 per share in
the Spring of 1993. The sole underwriter of the Fund's
initial public offering was Commonwealth Associates, a broker-
dealer and investment banker. The Fund's Common Stock is
traded on the NASDAQ Small-Cap Market under the symbol MCAP.
On February 28, 1995, the Fund declared a stock
dividend, payable on March 20, 1995 to shareholders of record
on March 13, 1995 in shares of Preferred Stock at the rate of
0.2 shares of Preferred Stock for each share of Common Stock
then outstanding. The Preferred Stock is convertible into
shares of the Fund's Common Stock at any time until February
28, 1998. Each share of Preferred Stock is convertible into
(i) 1.05 shares of Common Stock from the date of issuance
through February 28, 1996, (ii) 1.25 shares of Common Stock
from March 1, 1996 through February 28, 1997 and (iii) 1.33
shares of Common Stock from March 1, 1997 through February 28,
1998. The Preferred Stock is non-transferable.
From the Fund's inception to December 10, 1995,
Commonwealth Associates Asset Management, Inc. ("CAAM"), an
affiliate of Commonwealth Associates, acted as the Fund's
administrator. Since December 11, 1995, the Fund has been
self-administered. Until December 10, 1995, the Fund did not
own or lease physical properties. Office space and equipment
were provided to the Fund by CAAM pursuant to its administra-
tive services agreement. The Fund rented temporary space from
December 10, 1995 to March 3, 1996. Since March 4, 1996, the
Fund has leased office space from an affiliate of the Fund's
president on a monthly basis, at a rate of $1,800 per month,
and has leased or purchased its own furniture and fixtures and
other office equipment.
Based on conversations of management with some of
the original investors in the Fund and the records relating to
Commonwealth Associate's original marketing of the Fund's
Common Stock, it appears that such investors believed the Fund
would invest in debt instruments that would provide high
income and that the Fund would receive warrants and common
stock that were expected to appreciate in value, thereby
leading to recurring substantial distributions of income to
shareholders.
However, the Fund's prior management, which consist-
ed of employees of Commonwealth Associates, invested the
Fund's assets in a series of 15 private placements of issuers
consisting primarily of new clients of Commonwealth Associ-
ates. The Fund received notes, warrants and/or common stock
in these investments and the Fund experienced losses of over
$3 million while Commonwealth Associates received substantial
investment banking fees in cash plus warrants for shares of
the same investments. Although the details of each investment
differed, documents obtained by the Fund show what appears to
have been a pattern in which Commonwealth Associates and its
employees, who were affiliated with the Fund, would (i)
promise to lead a future private placement or initial public
offering for a client; (ii) secure the right to provide short-
term bridge financing for fees often approaching 15% of the
amount placed; (iii) commit the Fund to participate in the
bridge financing with inadequate protective covenants and
without performing adequate due diligence or obtaining commit-
ments from other investors sufficient to meet the client's
near-term financing requirements; (iv) collect substantial
placement fees and warrants based on the investment made by
the Fund and other investors enticed to follow the Fund's
lead; (v) abandon further efforts to raise capital, leaving
the Fund without a good prospect of being repaid; and (vi) go
on to the next deal.
As a result of Commonwealth Associates' investment
program for the Fund, the Fund performed in a manner quite
different to the glowing picture painted by the Commonwealth
Associates sales people. As the Fund's dismal performance
became apparent, its stock price discount from net asset value
widened. Faced with an investment that did not perform as
anticipated, the Fund's original shareholders understandably
became disenchanted.
Prior to alerting the Fund's Board of Directors to
the deteriorating nature of the Fund's portfolio, Commonwealth
Associates brought in current management in April 1994.
Current management spent the balance of 1994 constructing
records regarding the Fund's investments and addressing
immediate problems with some of these investments. Current
management then embarked on a program of seeking to restruc-
ture the terms of the Fund's existing portfolio securities.
Current management also made four significant new investments.
The existing investments that current management was
able to radically restructure and its new investments have on
balance performed very well in the past year. However,
current management has concluded that, in its judgment, in
view of the constraints and costs imposed by the Investment
Company Act, the Fund does not have sufficient capital to
support the staff necessary to source promising new invest-
ments, perform appropriate due diligence, structure invest-
ments with appropriate protections for the Fund and provide
the management assistance required by the Investment Company
Act for business development companies. Furthermore, the
highly illiquid nature of the Fund's investments and the need
to value them conservatively both while the Portfolio Company
is private and during the lengthy lockup periods required
after a public offering period is completed tends to cause the
Fund's shares to trade at a discount from net asset value and
an even greater discount from potential value.
By the Fall of 1995 current management had begun to
suspect that Commonwealth Associate's treatment of the Fund
may have violated the Investment Company Act and other appli-
cable laws, and current management asked the Board of Direc-
tors in November 1995 to appoint a special committee of non-
management directors to study these issues. A preliminary
report by independent counsel to the special committee in
early 1996 concluded that there were likely serious violations
of the Investment Company Act and fiduciary duties by Common-
wealth Associates and its principles.
After receiving the initial report of counsel, the
special committee of the Board engaged a second law firm to
further review these findings. This law firm also concluded
that there appeared to be serious violations of federal and
state law. At this point the Fund engaged new counsel experi-
enced in the Investment Company Act both to assist the Fund in
ensuring that it would operate in compliance with the Invest-
ment Company Act in the future and to assist the Fund in
pursuing whatever claims might be appropriate against Common-
wealth Associates and its principals. At a Board of Directors
meeting held on April 9, 1996, on the recommendation of the
special committee, the Board asked for the resignation of
Michael Falk, the chief executive and majority shareholder of
Commonwealth Associates as a member of the Fund's Board of
Directors. Mr. Falk refused to resign and remains a director.
On April 19, 1996, the Fund commenced an action in
the U.S. District Court for the Southern District of New York
against Commonwealth Associates, Michael Falk and Stephen
Warner (the former president and portfolio manager of the Fund
and former head of corporate finance at Commonwealth Associ-
ates). The complaint claims that the defendants, through a
pattern of deception and fraudulent concealments, used the
Fund to collect underwriting, placement, consulting and other
fees and warrants from the Fund's Portfolio Companies for the
benefit of the defendants instead of acting in the best
interests of the Fund and its shareholders. The claim alleges
that the defendants' illegal actions have damaged the Fund in
an amount of not less than $5 million.
At the end of April 1996, current management met
with several of the original investors in the Fund to solicit
their views regarding the Fund. These investors primarily
were of the view that, although current management had stabi-
lized the Fund and might be able to achieve acceptable re-
turns, the Fund was not at all the type of investment Common-
wealth Associates had marketed to them and, in view of the
large market discount and illiquid trading market for the
Fund's Common Stock, the Fund should liquidate.
Prior to that time, on April 9, 1996, a group of
investors in the Fund filed a beneficial ownership report in
which they suggested, among other things, that the Fund should
liquidate. Several of the members of this group are princi-
pals of, investors in or close business associates of Common-
wealth Associates.
At the May 9, 1996 Board of Directors meeting,
management recommended, in light of the factors and events
discussed above, that the Board adopt a plan of liquidation
and submit it to shareholders for approval. In addition, Mr.
Mustafa has stated his intention to resign as President, Chief
Executive Officer and Portfolio Manager of the Fund upon
shareholder adoption of such a plan although he will continue
to make himself available without compensation to assist in
the Fund's liquidation. The directors (with the exception of
Mr. Falk, who left the meeting shortly after the plan of
liquidation was introduced) carefully reviewed the Plan,
discussed various aspects of the Plan among themselves, with
counsel and with current management and subsequently adopted
the Plan by unanimous vote of all of the directors other than
Mr. Falk who had not returned to the meeting. The Board of
Directors has not considered any offers to sell the assets,
merge or otherwise dispose of the Fund but would consider such
offers if presented.
Recommendation of the Board of Directors
For the reasons discussed in the preceding para-
graphs, the Board of Directors unanimously (with the exception
of Mr. Falk) recommends that shareholders vote "FOR" the Plan.
Description of the Plan and Related Transactions
If the Plan is approved by the Fund's shareholders,
the Fund will voluntarily dissolve and completely liquidate in
accordance with the requirements of Maryland General Corporate
Law ("MGCL") and the Internal Revenue Code of 1986, as amended
(the "Code"). The effective date (the "Effective Date") of
the Plan will be the date on which the Plan is approved by
shareholders. The period from the Effective Date until June
30, 1997 is referred to herein as the "Liquidation Period".
After the Effective Date, the Fund will promptly
seek to convert all of its investment securities and other
assets into cash, including the claims set forth in the
lawsuit by the Fund against Commonwealth Associates and
Messrs. Falk and Warner. The Fund anticipates that sharehold-
ers will receive an initial liquidating distribution of
approximately 80% of the Fund's available cash shortly after
approval of the Plan by the Fund's shareholders. The amount
of the initial distribution will be determined after appropri-
ate valuations and reserves are established based on reviews
by the Fund's accountants, counsel or other consultants. The
Fund anticipates further distributions will be made as invest-
ments are sold and the Fund will be dissolved prior to June
30, 1997.
To the extent the Fund cannot dispose of any assets
during the Liquidation Period or cannot locate shareholders
for purposes of sending liquidating distributions, the Fund
will establish and contribute any such assets to a liquidating
trust. The liquidating trust will be administered by certain
trustees for the benefit of the Fund's shareholders and will
have terms substantially similar to those of the liquidating
trust attached to the Plan as Exhibit A thereto. Distribu-
tions will be made from the trust to shareholders pursuant to
the trust's terms and no assets will revert back to the Fund.
The expenses of any such trust will be charged against the
liquidation distributions held therein.
Any liabilities of the Fund and any claims made
against the Fund must be paid or provided for by the Fund
prior to making liquidating distributions to shareholders. If
the Plan is approved by shareholders, the Fund will promptly
seek to dispose of any claim against it or otherwise enter
into trusts or other arrangements whereby all of the estimated
costs and expenses involved with such claims will be held back
from the liquidating distributions to shareholders until the
final resolution of such claims. Upon final resolution of
such claims, any assets will be paid from the trust or other
arrangement to shareholders pursuant to such instrument's
terms and no assets will revert back to the Fund.
The exact date of liquidating distributions will
depend on the time required to liquidate the Fund's assets and
the extent to which the Fund may need to hold back sufficient
assets to provide for any disputed claims or other contingent
liabilities which may then exist against the Fund. Liquidat-
ing distributions will be made on a pro rata basis to share-
holders of the Fund treating holders of outstanding Preferred
Stock as having been converted at the ratio of 1.25 shares of
Common Stock per share of Preferred Stock for any distribu-
tions prior to March 1, 1997 and 1.33 shares of Common Stock
per share of Preferred Stock for any distributions made on or
after March 1, 1997. It is anticipated that Articles of
Dissolution will be filed with the Maryland State Department
of Assessments and Taxation pursuant to the MGCL during the
Liquidation Period, but such articles may not be filed by the
Fund until claims of all known creditors and claimants have
been paid or adequately provided for. In the event that
claims are not adequately provided for or are brought after
dissolution by previously unknown creditors or claimants, the
Fund's directors and officers could be held personally liable.
In addition, claims possibly could be pursued against share-
holders to the extent of distributions received by them in
liquidation.
As soon as practicable after the distribution of all
of the Fund's assets in complete liquidation, the Fund will
close the books and prepare and file, in a timely manner, any
and all required income tax returns and other documents and
instruments. The Fund will also file, or cause to be filed,
any and all other documents and instruments necessary to
terminate the regulation of the Fund and its business and
affairs by the Securities and Exchange Commission (the "SEC").
Exchange of Stock Certificates for Liquidation Distributions
Prior to completion of the liquidation, the Fund
will send or cause to be sent to its shareholders a letter of
transmittal form for the purpose of exchanging shares of the
Fund for liquidating distributions. Shareholders whose shares
are held in the name of their broker or other financial
institution will receive their distributions through their
nominee firms. No amount will be distributed by the Fund to a
shareholder unless and until such shareholder delivers to the
Fund a signed letter of transmittal form and the certificates
representing the shareholder's shares or, in the event a share
certificate has been lost, a lost certificate affidavit and
such surety bonds and other documents and instruments as are
reasonably required by the Fund, together with appropriate
forms of assignment, endorsed and with any and all signatures
thereon guaranteed by a financial institution reasonably
acceptable to the Fund.
The right of a shareholder to sell his or her shares
of the Fund's Common Stock on the NASDAQ at any time prior to
the Fund's filing of a notice of intent to dissolve will not
be impaired by the adoption of the Plan. The Fund expects
that on or about the date that the Fund files such notice, the
trading of the Fund's shares on NASDAQ will terminate.
Federal Income Tax Consequences
PAYMENT BY THE FUND OF LIQUIDATING DISTRIBUTIONS TO
SHAREHOLDERS WILL BE A TAXABLE SALE OR EXCHANGE. BECAUSE THE
INCOME TAX CONSEQUENCES FOR A PARTICULAR SHAREHOLDER MAY VARY
DEPENDING ON INDIVIDUAL CIRCUMSTANCES, EACH SHAREHOLDER IS
URGED TO CONSULT HIS OR HER OWN TAX ADVISER CONCERNING THE
FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE
RECEIPT OF A LIQUIDATING DISTRIBUTION.
The Fund currently qualifies, and intends to contin-
ue to qualify through the end of the Liquidation Period, as a
regulated investment company under the Code. If the Fund so
qualifies, it generally will not be subject to federal income
tax on any investment company taxable income or net capital
gain (the excess of net long-term capital gain over net
short-term capital loss) that it distributes to shareholders.
Prior to the completion of the liquidation, the Fund may
declare one or more distributions of any undistributed invest-
ment company taxable income and net capital gain (the "Final
Income Distributions"). In such event, shareholders will
report the Final Income Distributions as ordinary income to
the extent that they are paid out of the Fund's investment
company taxable income and as long-term capital gain to the
extent they are paid out of the Fund's net capital gain.
The payment of liquidating distributions (excluding
the payment of any Final Income Distributions which will be
taxed as described above) will be a taxable sale or exchange
to shareholders. Liquidating distributions will first reduce
the adjusted tax basis of a shareholder's Fund shares and,
after such adjusted tax basis is reduced to zero, will consti-
tute capital gains to such holder. A shareholder will recog-
nize a capital loss if, and to the extent that, the adjusted
tax basis of Fund shares exceeds the aggregate amount of
liquidating distributions received in exchange therefor, and
such capital loss will be recognized in the year in which the
Fund makes its final liquidating distribution. Gain or loss
must be calculated separately for each block of shares (shares
of Common Stock or shares of Series A Convertible Preferred
Stock acquired at the same time in a single transaction) held
by a shareholder. Generally, the capital gain or loss will be
long-term if the shares were held for more than one year at
the date of the liquidating distribution.
To facilitate its liquidation, the Fund may transfer
some of its assets to a temporary trust (the "Trust") for the
benefit of the shareholders. The Trust is intended to be
treated as a liquidating trust for federal income tax purpos-
es. For federal income tax purposes, the shareholders should
be treated as if the Fund distributed the Trust assets direct-
ly to the shareholders, and they contributed such assets to
the Trust. In such event, each shareholder will be deemed to
receive a liquidating distribution in an amount equal to its
respective share of the value of the Fund assets transferred
to the Trust on the date of such transfer. In addition, the
Trust should be treated as a pass-through entity for federal
income tax purposes, and consequently the Trust's items of
income, deduction, gain, loss or credit should be proportion-
ately allocated to shareholders regardless of whether there
are distributions. Distributions by the Trust to shareholders
will not be taxable.
Unless a shareholder complies with certain reporting
and/or certification procedures or is an "exempt recipient"
(i.e., in general, corporations and certain other entities),
the shareholder may be subject to backup withholding tax at a
rate of 31% with respect to distributions by the Fund.
Foreign shareholders should consult with their own tax advi-
sors regarding withholding taxes in general.
As of February 29, 1996, the Fund had $2,420,000 in
net capital loss carryforwards and current capital losses that
could be used to offset current or future capital gains. The
Fund had $2,156,659 of unrealized capital gains as of the same
date. If the liquidation and dissolution of the Fund is
approved and all or a portion of such capital gains or any
additional capital gains are realized, the Fund would be able
to use a portion of its net capital loss carryforwards to
offset such gains. Any remaining capital loss carryforwards
that are not used to offset capital gains realized upon
liquidation will be lost, and the benefit of such capital loss
carryforwards will not pass through to shareholders. If the
Fund did not liquidate, it is possible that sufficient capital
gains could be generated in the future to use the entire
amount of the Fund's capital loss carryforwards.
The foregoing summary is generally limited to the
material federal income tax consequences to shareholders who
are individual United States citizens and who hold shares as
capital assets. It does not address the federal income tax
consequences to shareholders who are corporations, trusts,
estates, tax-exempt organizations, non-resident aliens or
shareholders subject to special provisions under the Code.
This summary does not address state or local tax consequences.
Shareholders are urged to consult their own tax advisers to
determine the extent of the federal income tax liability they
would incur as a result of receiving a liquidating distribu-
tion, as well as any tax consequences under any applicable
state, local or foreign laws or proposed changes to the tax
laws.
Financial Highlights
Following are financial highlights of the Fund for
the fiscal years ended February 29, 1996, February 28, 1995
and February 28, 1994. Representatives of Deloitte & Touche
LLP are expected to be present at the meeting and available to
respond to appropriate questions, and they will have the
opportunity to make a statement if they desire to do so.
The MicroCap Fund, Inc.
Selected Financial Highlights
FISCAL YEAR ENDED
1996 1995 1994(B)
PER-SHARE DATA(A)
Net asset value, beginning of period $8.04 $7.96 $8.87(c)
Operations:
Net investment income (loss) (.13) .10 .03
Net realized and unrealized gain
(loss) on investments .44 .18 (.94)
Total increase (decrease)
from operations .31 .28 (.91)
Distributions to shareholders:
From net investment income - .13 -
In excess of net investment income - .04 -
From net realized gains - .03 -
Total distributions to shareholders - .20 -
Adjustments to net assets for:
Preferred Stock dividend (1.40) - -
Repurchase of Common Stock .30 - -
Total adjustments (1.10) - -
Net asset value, end of period $7.25 $8.04 $7.96
Per-share market value, end of period $4.88 $8.42 $7.19
SELECTED INFORMATION
Total investment return, market
value(D) 8.80% (21.55%) (28.13%)
Total investment return, net asset 9.11% 5.05% (20.40%)
value(E)
(A) Per share data is based on the weighted average
number of shares of Common Stock outstanding for
each respective period and assumes conversion of
shares of Preferred Stock into shares of Common
Stock at the applicable conversion rate.
(B) Represents the period from March 19, 1993 (commence-
ment of operations) to February 28, 1994.
(C) Represents the initial purchase price per share of
Common Stock of $10.00 less selling commissions and
offering expenses of $1.13 per share.
(D) Based on the change in market price of a share of
Common Stock during the period. Assumes reinvest-
ment of distributions at market prices.
(E) Based on the change in net asset value of a share of
Common Stock during the period. Assumes reinvest-
ment of distributions at net asset value.
Net Asset Value and Market Price
The Fund's shares of Common Stock currently trade on
the NASDAQ under the symbol MCAP. The following table shows
the history of trading of the Fund's shares, by quarter, for
the last two fiscal years.
PERCENTAGE
PREMIUM OR
QUARTER NET ASSET VALUE MARKET PRICE (DISCOUNT)
ENDED HIGH LOW HIGH LOW HIGH LOW
05/31/94 $8.00 $8.00 $8.25 $7.00 3.13% (12.50%)
08/31/94 8.63 8.63 8.00 7.50 (7.30) (13.09)
11/30/94 8.08 8.08 8.00 6.25 (0.99) (22.65)
02/28/95 8.04 8.04 6.75 6.00 (16.04) (25.37)
05/31/95 6.86 6.86 6.50 4.00 (5.25) (41.69)
08/31/95 7.18 7.18 5.25 4.00 (26.88) (44.29)
11/30/95 7.06 7.06 5.38 4.38 (23.80) (37.96)
02/29/96 7.25 7.25 6.00 4.50 (17.24) (37.93)
On May 8, 1996, the last trading day before the
public announcement of the approval of the liquidation of the
Fund by the Board of Directors, the high, low and closing bid
prices of the Fund's shares of Common Stock reported by the
NASDAQ was $4.75. The closing bid price on such date repre-
sents a discount of 34.48% from the net asset value of $7.25
per weighted average share of Common Stock at February 29,
1996.
Security Ownership
The following table sets forth information as of May
15, 1996, based on information obtained by the Fund or from
the persons named below, with respect to the beneficial
ownership of Common Stock by (i) each person known by the Fund
to be the owner of more than 5% of the outstanding shares of
Common Stock, (ii) each of the directors, (iii) the Chief
Executive Officer and (iv) all officers and directors of the
Fund as a group.
Amount and Nature
of Beneficial Percentage of
Beneficial Owner(1) Ownership Outstanding
Shares
Kamal Mustafa 29,400 1.39%
Joseph Lucchese 6,400 *
Michael S. Falk(3) 23,500 1.11%
Leonard DeRoma 5,000 *
James E. Brands 5,000 *
Jeffrey Lewis 3,500 *
Robert W. Naismith 0 *
Richard L. Hubbell 0 *
All officers and directors
as a group (5 persons) 72,800 3.45%
13D Group(2) 312,100 14.79%
Robert L. Priddy(3) 132,600 6.28%
____________________
*Less than 1%
(1) A person is deemed to be the beneficial owner of
securities that can be acquired by such person
within 60 days upon the exercise of warrants or
options. Each beneficial owner's percentage
ownership is determined by assuming that options
or warrants that are held by such person (but
not those held by any other person) and which
are exercisable within 60 days have been exer-
cised.
(2) On April 9, 1996, a group of holders of the
Fund's Common Stock (the "13D Group") filed a
Form 13D with the SEC, disclosing the 13D
Group's intention to nominate individuals to
the Fund's board of directors who will support
the 13D Group's plan to increase shareholder
value and reduce the discount between the
market price of the Fund's Common Stock and
its net asset value per share of Common Stock.
Actions supported by the 13D Group include a
change in the Fund's dividend policy, conversion
to an open-end fund, liquidation of a material
amount of the Fund's assets and a merger,
reorganization or liquidation of the Fund. On May 3,
1996 and on May 20, 1996, the 13D Group filed with the
SEC Amendments No. 1 and No. 2, respectively, to
the Form 13D filed on April 9, 1996. The
amendments disclose a request by various
shareholders including the members of the 13D
Group for a special meeting of shareholders
for the purpose of modifying certain bylaws of
the Fund and replacing the existing members of
the Fund's board of directors with new directors
who will support the 13D Group's action plan. There
are nine members of the 13D Group that hold an aggregate
of 312,000 shares of the Fund's Common Stock as follows:
13D Group Member Number of Common Shares
Robert M. Pergament 23,000
Gerald B. Cramer 66,000
Ingleside Company 40,000
Edward J. Rosenthal 12,000
Goodness Gardens, Inc. 5,000
Robert L. Priddy 132,600
Michael S Falk 23,500
Commonwealth Associates
Asset Management, Inc. 10,000
The filing submitted by the 13D Group states that the
Group also owns shares of Preferred Stock of the Fund that
are convertible into an additional 26,625 shares of the
Fund's Common Stock.
(3) Member of 13D Group.
SUPPLEMENTAL INFORMATION AND SHAREHOLDER PROPOSALS
Based on the Fund's records and other information,
the Fund believes that all SEC filing requirements applicable
to its directors and officers pursuant to Section 16 of the
Securities Exchange Act of 1934, with respect to the Fund's
fiscal year ended February 29, 1996, were satisfied.
In the event that the Fund has not previously been
dissolved, proposals of shareholders intended to be presented
at the next annual meeting of shareholders must be received at
the Fund's offices, 575 Fifth Avenue, New York, New York,
10017, a reasonable time before the solicitation is made for
such meeting. If the date of such meeting is subsequently
advanced by more than 30 days or delayed more than 90 days,
the Fund will inform shareholders of the change and a new date
for receiving shareholder proposals.
Additional solicitation may be made by letter,
telephone or telegraph by officers or employees of the Fund,
or by dealers and their representatives. In addition, the
Fund has engaged D.F. King to assist in the solicitation of
proxies at a fee of approximately $12,500 plus expenses, the
cost of which will be borne by the Fund.
/s/ Joseph Lucchese
Secretary
<PAGE>
EXHIBIT A
PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION
OF
THE MICROCAP FUND, INC.
This Plan of Complete Liquidation and Dissolu-
tion (the "Plan") of The MicroCap Fund, Inc., a Maryland
corporation (the "Company"), and the transactions contem-
plated thereby have been approved by the Board of Direc-
tors for the Company (the "Board") as being advisable and
in the best interests of the Company and its stockhold-
ers. The Board has directed that this Plan be submitted
to the holders of the outstanding shares of the Company's
Common Stock and Preferred Stock (the "Stockholders") for
their adoption or rejection at a special meeting of
stockholders and has authorized the distribution of a
Proxy Statement (the "Proxy Statement") in connection
with the solicitation of proxies for such meeting. Upon
such adoption the Company shall voluntarily dissolve and
completely liquidate in accordance with the requirements
of the Maryland General Corporation Law (the "MGCL") and
the Internal Revenue Code of 1986, as amended (the
"Code"), as follows:
1. Adoption of Plan. The effective date of
the Plan (the "Effective Plan") shall be the date on
which the Plan is adopted by the Stockholders. Such
approval of the Plan shall constitute approval by the
Company's Stockholders of the sale of substantially all
of the assets of the Company in accordance with Section
___ of the MGCL and approval of each of the other actions
contemplated by the Plan. The period commencing on the
Effective Date and continuing until June 30, 1997 is
referred to herein as the Liquidation Period.
2. Disposition of Assets. Prior to and after
the Effective Date the Company shall use all commercially
reasonable efforts to dispose of all of its investment
securities and other assets (other than the Claims re-
ferred to in Section 3 below) as promptly as practicable
consistent with realizing full value thereon and shall
hold or reinvest the proceeds thereof in cash and such
short-term fixed income securities as the Company may
lawfully hold or invest in. To the extent the Company
cannot dispose of any such asset or assets prior to
expiration of the Liquidation Period, the Company shall
contribute such asset or assets to the Liquidating Trust
referred to in Section 7 below.
3. Disposition of Claims. Prior to and after
the Effective Date the Company shall use all commercially
reasonable efforts to assert, prosecute, reduce to judg-
ment, settle and collect all claims (the "Claims") of the
Company against persons other than the Company, including
the Claims set forth in The MicroCap Fund, Inc. v. Com-
monwealth Associates et al.,. To the extent the Company
cannot resolve any Claim prior to expiration of the
Liquidation Period, then not later than the last day of
such period the Company shall contribute all such unre-
solved Claims to the Liquidating Trust along with such
amounts of cash and other assets as the Company shall
determine might reasonably be required to resolve such
unresolved claims.
4. Transactions. Within the Liquidation
Period, the Company shall have the authority to engage in
such other transactions as may be appropriate to its
complete liquidation and dissolution, including without
limitation, the authority to mortgage, pledge, sell,
lease, exchange or otherwise dispose of all or any part
of its other assets for cash and/or shares, bonds, or
other securities or property upon such terms and condi-
tions as the Company shall determine, with no further
approvals by the Stockholders except as required by law.
5. Provisions for Liabilities. Within the
Liquidation Period, the Company shall pay or discharge or
otherwise provide for the payment or discharge of, any
liabilities and obligations, including, without limita-
tion, contingent or unascertained liabilities and obliga-
tions determined or otherwise reasonably estimated to be
due either by the Company or a court of competent juris-
diction (the "Liabilities"). The foregoing may be accom-
plished by use of one or more trusts (including a liqui-
dating trust), escrows, reserve funds, plans or other
arrangements as determined by the Company or required by
law (collectively, the "Reserve Funds"), and the Stock-
holders by adoption of this Plan do constitute and ap-
point any agent or trustee under the arrangements provid-
ed by the Company pursuant to this Section 5 as the agent
or trustee for the limited purposes provided in the
agreement in which such purposes are set forth.
6. Distributions to Stockholders. Promptly
after the Effective Time and from time to time thereaf-
ter, the Company shall distribute to Stockholders of
record as of the Effective Date, cash or other assets
(other than cash or other assets held in the Reserve
Funds) and all other properties held by it, by way of pro
rata liquidating distributions to such Stockholders of
the Company, treating holders of Preferred Stock out-
standing at such time as having converted into Common
Stock at the ratio of 1.25 shares of Common Stock per
share of Preferred Stock for any distributions to Stock-
holders prior to March 1, 1997 and 1.33 shares of Common
Stock per share of Preferred Stock for any distributions
to Stockholders of record on or after March 1, 1997.
Cash and other assets held in the Reserve Funds (includ-
ing any income earned thereon) or the Liquidating Trust
in excess of the amounts required for the payment or
discharge of the Company's liabilities and obligations
shall be distributed to the Stockholders at the time and
under the conditions set forth in the instruments estab-
lishing the Reserve Funds and the Liquidating Trust.
7. Liquidating Trust. The Company, as
promptly as practicable, but in any event within the
Liquidation Period, shall (i) create and execute with one
or more trustees ("Trustees") selected by the Company, a
liquidating trust agreement substantially in the form
annexed hereto as Exhibit A, as the same may be amended
from time to time (the "Liquidating Trust Agreement") to
establish a liquidating trust (the "Liquidating Trust"),
(ii) grant, assign, and convey to the Trustees of the
Liquidating Trust all rights of ownership of the Reserve
Funds and any other assets not yet distributed to stock-
holders, subject to all of the Liabilities and (iii)
distribute interests in the Liquidating Trust to its
Stockholders (the transactions contemplated by this
Section 7, together with the Initial Distribution, shall
be referred as the "Liquidation").
(a) No distributions of any of the assets
held by the Trustees of the Liquidating Trust
shall be made by the Trustees other than as
provided by the express terms and provisions of
the Liquidating Trust Agreement, and no assets
held by the Trustees shall ever revert or be
distributed to the Company or to any Stockhold-
er, as such, other than a former Stockholder
entitled thereto as provided in the Liquidating
Trust Agreement. Assets held in the Liquidat-
ing Trust shall be distributed to the benefi-
ciaries of the Liquidating Trust at the time
and under the conditions set forth in the ex-
press terms and provisions of the Liquidating
Trust Agreement.
(b) It is intended that the assignment of
the assets to the Trustees of the Liquidating
Trust shall, subject to the terms and provi-
sions of the Liquidating Trust Agreement, con-
stitute a final liquidating distribution by the
Company to its Stockholders of their pro rata
interests in such assets, and the Company's
Stockholders shall be the owners of the Liqui-
dating Trust within the meaning of Sections 671
through 679 of the Code.
8. Notice of Liquidation. As soon as practi-
cable after the Effective Date but in no event later than
20 days prior to the filing of Articles of Dissolution as
provided in Section 9 below, the Company shall mail
notice to all its creditors and employees that this Plan
has been approved by the Board and the Stockholders as
provided in the MGCL.
9. Articles of Dissolution. As promptly as
practicable within the Liquidation Period and pursuant to
the MGCL, the Company shall prepare and file Articles of
Dissolution (the "Articles") with and for acceptance by
the Maryland State Department of Assessments and Taxation
(the "Department"). Thereafter, the Company shall con-
duct no business except as permitted by the MGCL.
10. Termination of BDC Status. At any time
after the Effective Date and consistent with seeking to
maximize the net distribution to Stockholders the Company
may terminate its status as a business development compa-
ny.
11. Amendment or Abandonment of Plan. The
Company may modify or amend this Plan at any time without
Stockholder approval if it determines that such action
would be advisable and in the best interests of the
Company and its Stockholders. If any amendment or modi-
fication appears necessary and in the judgment of the
Company will materially and adversely affect the inter-
ests of the Stockholders or delay the time at which
distributions of the Company's net assets will be made,
such an amendment or modification will be submitted to
the Stockholders for approval. In addition, the Company
may abandon this Plan at any time prior to the filing of
the Articles if it determines that abandonment would be
advisable and in the best interests of the Company and
its Stockholders and if the Stockholders approve such
abandonment in the same manner as they approved the
adoption of this Plan.
12. Powers of Committee and Officers. Except
as required by applicable law or the terms of this Plan,
all of the rights and duties of the Company relating to
the Plan and completion of the transactions contemplated
thereby, including modification, amendment or abandonment
of the Plan, shall be made solely by or under the direc-
tion of a Committee of the Board of Directors of the
Company whose members shall consist solely of individuals
who are not interested persons of the Company, Common-
wealth Associates or Bluestone Capital Partners (as the
term "interested person" is defined in the Investment
Company Act of 1940 as if the Company, Commonwealth
Associates and Bluestone Capital Partners were registered
investment companies). Any rights and duties of the
Company relating to the Plan and completion of the trans-
actions contemplated thereby that are reserved by law or
this Plan exclusively to the Stockholders or the Board of
Directors of the Company as a whole shall be exercised by
the Board or the Stockholders, as the case may be. In
addition to exercising the specific powers granted to the
Company by the Plan, such Committee is authorized to
approve such changes to the terms of any of the transac-
tions referred to herein, to interpret any of the provi-
sions of this Plan, to delegate the exercise of its
rights and duties to Officers or agents of the Company
and to make, execute and deliver or authorize the Offi-
cers or agents of the Company to make, execute and deliv-
er such other agreements, conveyances, assignments,
transfers, certificates and other documents and take such
other action as the Committee deems necessary or desir-
able in order to carry out the provisions of this Plan
and effect as promptly as practicable the complete liqui-
dation and dissolution of the Company in accordance with
the Plan, the Code and the MGCL.
EXHIBIT A to the
Plan of Complete
Liquidation and Dissolution
[FORM OF LIQUIDATING TRUST AGREEMENT]
<PAGE>
THE MICROCAP FUND, INC.
SPECIAL MEETING OF STOCKHOLDERS - JULY 19, 1996
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of shares of Common Stock of THE MICROCAP
FUND, INC. (the "Fund"), a Maryland corporation, hereby appoints James
E. Brands and Joseph Lucchese and each of them, with full power of
substitution and revocation, as proxies to represent the undersigned at
the Special Meeting of Stockholders to be held at the offices of
Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, 33rd Floor, New
York, New York 10022, on July 19, 1996 at 11:00 a.m. and at any and
all adjournments thereof, and thereat to vote all shares of Common
Stock of the Fund which the undersigned would be entitled to vote, with
all powers the undersigned would possess if personally present, in
accordance with the following instructions.
If more than one of the proxies, or their substitute, are present
at the Special Meeting or any adjournment thereof, they jointly (or, if
only one is present and voting, then that one) shall have authority
and may exercise all powers granted hereby.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE STOCKHOLDER. IF NO DIRECTION IS GIVEN, THE
PROXY WILL BE VOTED "FOR" THE PROPOSAL DESCRIBED HEREIN.
PLEASE MARK
X VOTES AS IN
THIS EXAMPLE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL
OF THE PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION
Authority to vote for For Against Abstain The undersigned hereby
the Plan of Complete ___ _______ _______ acknowledges receipt
Liquidation and- of the accompanying
Dissolution of the Notice of Special
Fund: Meeting and Proxy
Statement for the Spe-
cial Meeting to be
held on July 19, 1996.
Please sign this Proxy
exactly as your name
appears on the books
of the Fund. Joint
owners should each
sign personally.
Trustees and other
fiduciaries should
indicate the capacity
in which they sign,
and where more than
one name appears, a
majority must sign.
If a corporation, this
signature should be
that of an authorized
officer who should
state his or her ti-
tle.
PLEASE BE SURE TO SIGN AND DATE
THIS PROXY.
_____________________ ________
Stockholder signature Date
_____________________ ________
Co-owner signature Date
(if applicable)
THE MICROCAP FUND, INC.
SPECIAL MEETING OF STOCKHOLDERS - JULY 19, 1996
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of shares of Preferred Stock of THE
MICROCAP FUND, INC. (the "Fund"), a Maryland corporation, hereby
appoints James E. Brands and Joseph Lucchese and each of them, with
full power of substitution and revocation, as proxies to represent the
undersigned at the Special Meeting of Stockholders to be held at the
offices of Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, 33rd
Floor, New York, New York 10022, on July 19, 1996 at 11:00 a.m. and at
any and all adjournments thereof, and thereat to vote all shares of
Preferred Stock of the Fund which the undersigned would be entitled to
vote, with all powers the undersigned would possess if personally
present, in accordance with the following instructions.
If more than one of the proxies, or their substitute, are present
at the Special Meeting or any adjournment thereof, they jointly (or, if
only one is present and voting, then that one) shall have authority
and may exercise all powers granted hereby. This Proxy, when properly
executed, will be voted in accordance with the instructions marked
herein by the undersigned. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE PROPOSAL DESCRIBED HEREIN.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE STOCKHOLDER. IF NO DIRECTION IS GIVEN, THE
PROXY WILL BE VOTED "FOR" THE PROPOSAL DESCRIBED HEREIN.
PLEASE MARK
X VOTES AS IN
THIS EXAMPLE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL
OF THE PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION
Authority to vote for For Against Abstain The undersigned hereby
the Plan of Complete acknowledges receipt
Liquidation and Dis- of the accompanying
solution of the Fund: Notice of Special
Meeting and Proxy
Statement for the Spe-
cial Meeting to be
held on July 19, 1996.
Please sign this Proxy
exactly as your name
appears on the books
of the Fund. Joint
owners should each
sign personally.
Trustees and other
fiduciaries should
indicate the capacity
in which they sign,
and where more than
one name appears, a
majority must sign.
If a corporation, this
signature should be
that of an authorized
officer who should
state his or her ti-
tle.
PLEASE BE SURE TO SIGN AND DATE
THIS PROXY.
_____________________ _____
Stockholder signature Date
_____________________ _____
Co-owner signature Date
(if applicable)
