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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
May 13, 1996
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MACC Private Equities Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-24412 42-1421406
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Suite 800, 101 Second Street, S.E., Cedar Rapids, Iowa 52401
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(Address of principal executive offices)
Registrant's telephone number, including area code:
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(319) 363-8249
Not Applicable
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(Former name or former address, if changed since last report.)
Page 1 of 21
Exhibit Index appears on page 5.
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS
MACC Private Equities Inc. (the "Registrant") is filing this Current
Report on Form 8-K with respect to an Agreement (the "Agreement"), dated May
13, 1996, between the Registrant and Zions Bancorporation ("Zions"). The
following discussion of the material provisions of the Agreement is limited and
qualified by the terms of the Agreement, which is incorporated herein by
reference to "EXHIBIT 99(I) -- ADDITIONAL EXHIBIT -- AGREEMENT DATED MAY 13,
1996, BETWEEN THE REGISTRANT AND ZIONS BANCORPORATION."
The Agreement provides for the issuance of 20,000 shares of the
Registrant's common stock, $.01 par value, to Zions at a per share price equal
to $17.70, which represents current net asset value per share as reported in
the Registrant's Quarterly Report on Form 10-Q (the "Form 10-Q") for the three
months ended March 31, 1996. The Form 10-Q was filed with the Securities and
Exchange Commission on May 15, 1996. Closing of the Agreement is scheduled for
not later than May 17, 1996.
Together with its existing holdings of the Registrant's common stock
acquired through open market purchases, after closing of the Agreement Zions
will own approximately 69,065 shares, equal to approximately 6.9% of the
Registrant's issued and outstanding shares of common stock. Zions has
announced its intention to further increase its total ownership to
approximately 20% of the issued and outstanding shares of the Registrant's
common stock through open market purchases. The Agreement contemplates that
some or all of Zions' total holdings of the Registrant's common stock may be
transferred to Zions' wholly-owned subsidiary, Zions First National Bank (the
"Bank") or one of the Bank's operating subsidiaries.
The Agreement also requires the Registrant to use reasonable efforts to
cause a nominee of Zions to serve on the Registrant's Board of Directors
commencing on the date of the Registrant's Annual Meeting of Shareholders to be
held during February, 1997. Provisions of the Agreement also limit the ability
of Zions to increase its ownership of the Registrant's common stock above 25%
of issued and outstanding shares without the prior approval of the Registrant's
Board of Directors.
In order to comply with federal regulations applicable to permissable
investments by banks and bank holding companies, and to maximize the
Registrant's ability to leverage the capital of its wholly-owned subsidiary,
MorAmerica Capital Corporation ("MorAmerica Capital"), the Agreement requires
the Registrant to contribute to MorAmerica Capital additional capital in the
amount of approximately $2,500,000. In addition, the Registrant agreed not to
make any investments
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other than in MorAmerica Capital and other debt and equity investments of the
kind and amount eligible for investment by a national bank. Since its election
to be treated as a business development company, the Registrant's practice has
been to make all portfolio investments through MorAmerica Capital, and the
Registrant believes that the provisions of the Agreement described above will
have no material effect on the Registrant's investment activities.
The Registrant is also filing this Current Report on Form 8-K with
respect to a news release (the "News Release"), dated May 15, 1996, regarding
the Agreement. The News Release is incorporated herein by reference to
"EXHIBIT 99(II) -- ADDITIONAL EXHIBIT -- NEWS RELEASE."
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
(99)(i) Additional Exhibit -- Agreement dated May 13, 1996,
between the Registrant and Zions Bancorporation.
(99)(ii) Additional Exhibit -- News Release
No other exhibits are applicable.
[Remainder of page intentionally left blank.]
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MACC Private Equities Inc.
Date: May 15, 1996 By: /s/ Robert A. Comey
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Robert A. Comey,
Executive Vice President
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EXHIBIT INDEX
Exhibit Page
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(99)(i) Additional Exhibit -- Agreement
dated May 13, 1996, between the
Registrant and Zions Bancorporation 6
(99)(ii) Additional Exhibit -- News Release 20
No other exhibits are applicable.
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EXHIBIT 99 (i)
Additional Exhibit -- Agreement dated
May 13, 1996, between the Registrant
and Zions Bancorporation
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AGREEMENT
AGREEMENT between Zions Bancorporation, a Utah corporation ("Investor"), and
MACC Private Equities Inc., a Delaware corporation ("Parent"), dated as of May
13, 1996.
Recitals
A. Investor is a bank holding company registered with the Board of
Governors of the Federal Reserve System under the Bank Holding Company Act of
1956, as amended (the "BHC Act"). As of the date hereof, Investor (together
with one or more affiliates of Investor) owns 49,065 shares of the issued and
outstanding common stock $0.01 par value (the "Common Stock") of Parent.
Pursuant to the BHC Act, bank holding companies in general are prohibited from
acquiring the voting shares of any nonbanking company in excess of 5% of that
company's outstanding voting shares. Under the BHC Act there is an exception
from this prohibition to permit bank holding companies to acquire shares which
"are of the kinds and amounts eligible for investment" by national banks (BHC
Act Section 4(c)(6)). Subject to certain limitations, national banks are
permitted to invest in small business investment companies within the meaning
of the Small Business Investment Act of 1958, as amended (the "SBI Act").
B. As of the date hereof, (i) there are issued and outstanding 994,813
shares of Common Stock, (ii) Parent owns all of the issued and outstanding
stock of MorAmerica
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Capital Corporation, an Iowa corporation (the "SBIC"), which is a small
business investment company under the SBI Act and (iii) the only activity in
which Parent is engaged is acting as a business development company,
principally through the ownership and management of the SBIC.
C. Investor is willing to acquire the Shares of Parent pursuant to this
Agreement, resulting in its ownership of more than 5% of the issued and
outstanding Common Stock of Parent, based upon the representations, warranties
and agreements of Parent set forth in this Agreement.
D. Parent is willing to sell the Shares of Parent pursuant to this
Agreement, based upon the representations, warranties and agreements of
Investor set forth in this Agreement.
NOW THEREFORE, the parties hereto agree as follows:
Section 1. Purchase of Shares. Subject to the terms and conditions
contained herein, Investor hereby agrees to purchase (the "Purchase") from
Parent, and Parent agrees to sell to Investor, 20,000 shares (the "Shares") of
Common Stock for a cash price (the "Purchase Price") per share equal to the net
assets per share of the Common Stock as of March 31, 1996 as reported in
Parent's Form 10-Q for the period ended as of that date ("Book Value").
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Section 2. Conduct Pending the Purchase. During the period from March 31,
1996 to the time of the Purchase, Parent shall (i) conduct its business in the
usual, regular and ordinary course consistent with past practice and (ii) not
adjust, split, combine or reclassify the Common Stock; make, declare or pay any
dividend or make any other distribution on, or, except for a price less than
Book Value, directly or indirectly redeem, purchase or otherwise acquire any
shares of Common Stock; or grant any person any right to acquire Common Stock
for less than Book Value.
Section 3. Representations and Warranties.
(a) Investor represents and warrants that (i) the information with
respect to it set forth in the recitals is true and correct, (ii) the execution
and delivery of this Agreement have been duly and validly authorized by all
necessary corporate action on its part, (iii) this Agreement represents the
valid and legally binding obligation of Investor, enforceable against Investor
in accordance with its terms, (iv) Investor is an "accredited investor" as
defined in Regulation D under the Securities Act of 1933, as amended (an
"Accredited Investor"), and (v) subject to the terms of Section 14 hereof,
Investor is acquiring the Shares for investment and not with a view to their
distribution.
(b) Parent represents and warrants that (i) the information with respect to
it and the SBIC set forth in the recitals is true and correct, (ii) the
execution and
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delivery of this Agreement have been duly and validly authorized by all
necessary corporate action on its part, (iii) this Agreement represents the
valid and legally binding obligation of Parent, enforceable against Parent in
accordance with its terms, (iv) Parent's audited consolidated financial
statements as of September 30, 1995 and for the year then ended, a copy of
which has been delivered to Investor, fairly present the financial position and
results of operation of Parent as of and for the year then ended, (v) other
than as disclosed in Parent's Forms 10-Q for the periods ended December 31,
1995 and March 31, 1996, copies of which have been delivered to Investor, since
September 30, 1995, there has not been any change in the business, assets,
financial condition or results of operations of Parent or the SBIC that,
individually, or in the aggregate, would have a material adverse effect on
Parent and the SBIC, taken as a whole, (vi) upon payment of the Purchase Price,
the Shares will be voting Common Stock, duly authorized, validly issued, fully
paid and nonassessable, and (vii) the issuance of the Shares is exempt from
registration under the Securities Act of 1933 and the registration or
qualification, if required, of the Shares pursuant to applicable state
securities laws has been obtained.
Section 4. Parent Covenants. In consideration of Investor's purchase of
the Shares at a price substantially
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in excess of their market price, and to induce Investor to acquire the Shares,
which will cause Investor to own more than 5% of the outstanding Common Stock,
and so long as Investor owns more than 5% of the Common Stock, Parent agrees
that it will not (a) engage in any activities other than holding (i) the equity
securities of the SBIC, (ii) any other equity security of the kinds and amounts
eligible for investment by a national bank, and (iii) short term investments in
short term treasury bills, insured certificates of deposit in principal amounts
not to exceed $100,000, U.S. government agency securities backed by the full
faith and credit of the federal government with maturities not to exceed one
year, commercial paper rated no less than A-1 or P-1 or any equivalent rating,
high quality repurchase contracts relating to government backed securities, and
money market funds investing primarily in short term U.S. government securities
(collectively, "Permitted Investments"), which term shall include, following
the transfer of Parent's Common Stock contemplated by Section 14 hereof, (iv)
any other investments of the kinds and amounts eligible for investment by
national banks pursuant to 12 C.F.R. Section 1, and (v) any loan or debt
instrument which could be originated or purchased by a national bank, in each
case so long as such are consistent with applicable regulatory requirements;
and (b) make any investment other than in the SBIC and the short term
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investments specified in clause (iii), except upon giving not less than 30
days' prior notice to Investor. If Investor notifies Parent during such 30-day
period that the proposed investment is not a Permitted Investment, Parent
agrees that it will not make such investment.
Section 5. Investor Covenants. Investor agrees that nothing herein shall
preclude Parent from entering into an agreement to merge or consolidate with an
entity engaged in activities which are not limited to the holding of Permitted
Investments; provided, however, that Parent shall not consummate such merger or
consolidation without giving Investor at least 90 days' prior notice.
Section 6. Closing. Subject to the terms and conditions contained herein,
Investor agrees to deliver the Purchase Price for the Shares to Parent not
later than 1:00 p.m. (Central daylight time) on the second business day after
filing of Parent's Form 10-Q for the period ended March 31, 1996, which must be
filed, at the latest, on May 15, 1996 (the "Closing Date") by wire transfer in
immediately available funds to such account as Parent shall specify, against
delivery to Investor of one or more certificates representing the Shares, which
certificates shall be registered in the name of Investor or Investor's nominee.
Section 7. Conditions. (a) The obligation of Investor to purchase
the Shares is subject to (i) the
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accuracy of the representations and warranties on the part of Parent contained
herein as of the Closing Date, (ii) the contribution by Parent to the SBIC,
subsequent to March 31, 1996 and on or before the Closing Date, of all cash,
short term investments and other investments of Parent other than the cash and
short term investments in the amount reasonably estimated by Parent to be
necessary (x) for 24 months operating expenses, (y) to purchase up to 50,000
shares of Common Stock from holders of less than 100 such shares pursuant to
its previously announced odd-lot purchase program and (z) to fund settlement of
pending personal injury litigation against a subsidiary; provided, that the
amount of such contribution to the SBIC shall be not less than $2,500,000,
(iii) evidence that assets not permitted to be held directly by Parent pursuant
to Section 4(i)-(iii) have been contributed to the SBIC and (iv) the
performance by Parent in all material respects of its obligations contained
herein, which accuracy, contribution and performance shall be confirmed by an
officer's certificate of Parent dated the Closing Date.
(b) The obligation of Parent to issue and sell the Shares is subject to the
accuracy of the representations and warranties on the part of Investor
contained herein as of the Closing Date, which shall be confirmed by an
officer's certificate of Investor dated the Closing Date.
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Section 8. Notices. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered by hand,
by facsimile transmission, or by registered or certified mail, postage prepaid,
to the persons at the addresses or facsimile numbers set forth below (or at
such other address or facsimile number as may be provided hereunder), and shall
be deemed to have been delivered as of the date so delivered if by hand or by
facsimile (in either case with confirmation of receipt) or the date so received
if by mail:
If to Investor:
Zions Bancorporation
1380 Kennecott Building
Salt Lake City, Utah 84133
Attention: W. David Hemingway
Facsimile: (801) 524-4659
If to Parent:
MACC Private Equities, Inc.
101 Second Street S.E., Suite 800
Cedar Rapids, Iowa 52401
Facsimile: 319-363-9683
Attention: Paul M. Bass, Jr., Chairman
With a copy to:
David E. Gardels, Esq.
Dixon, Dixon & Jessup Ltd., LLP
Suite 1800
One First National Center
Omaha, Nebraska 68102-1504
Facsimile: (402) 345-3341
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Section 9. Specific Performance. Parent acknowledges and agrees that the
failure of Parent to fulfill any of its covenants and agreements contained
herein will cause irreparable injury to Investor for which damages, even if
available, will not be an adequate remedy. Accordingly, Parent hereby consents
to the issuance of injunctive relief by any court of competent jurisdiction to
compel performance of Parent's obligations and to the granting by any such
court of the remedy of specific performance by the Parent of its obligations
hereunder.
Section 10. Limit on Investment. Investor agrees that, without the prior
approval of Parent's board of directors, it will not purchase any Common Stock
if, after giving effect to such purchase, Investor would own in excess of 25%
of Parent's outstanding Common Stock. Parent agrees to use its reasonable best
efforts to cause a nominee of Investor to serve on Parent's board of directors
commencing with the annual meeting to be held in 1997.
Section 11. Governing Law. This Agreement shall in all respects be
governed by, and construed in accordance with, the laws of the State of
Delaware.
Section 12. Arbitration. Any dispute, controversy or claim arising out of
or based upon the terms of this Agreement or any transaction contemplated
herein shall be settled exclusively and finally by binding arbitration in Salt
Lake City, Utah. Upon written demand
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for arbitration by any party hereto, the parties to the dispute shall confer
and attempt in good faith to agree upon one arbitrator to be selected from
panels maintained by the American Arbitration Association (or any successor
organization). If the parties have not agreed upon an arbitrator within 30
days after receipt of such written demand, each party to the dispute shall
appoint one arbitrator and those two arbitrators shall agree upon a third
arbitrator. The binding arbitration shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (or any
successor organization) and shall be binding upon the parties. Judgment upon
an arbitration award may be entered in any court having jurisdiction. The
Federal Arbitration Act shall apply to the construction, interpretation and
enforcement of this arbitration provision.
Section 13. Termination; Survival. On or before the Closing Date, this
Agreement may be terminated by the mutual consent of both parties. After the
Closing Date, this Agreement may be terminated by mutual consent of the parties
or by either party upon 30 days' prior notice to the other; provided, that no
such termination by one party shall be effective unless and until Investor owns
5% or less of the Common Stock. The representations and warranties and
agreements of the parties set forth herein shall survive the Closing Date.
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Section 14. Transfer to Bank. Investor will use its reasonable efforts to
obtain necessary regulatory approval or non-objection to transfer Parent's
Common Stock to Investor's wholly-owned subsidiary, Zions First National Bank,
a national banking association ("Bank"), or an operating subsidiary of Bank and
will complete such transfer within a reasonable time after such approval or
non-objection. Promptly after the execution of this Agreement, Bank expects to
file an appropriate notice with the Office of the Comptroller of the Currency
to permit such transfer. Parent agrees that (a) Investor may transfer its
ownership in the Common Stock to Bank (or an operating subsidiary thereof), and
(b) following such transfer, Bank shall be, and shall be deemed to be,
substituted for Investor hereunder without any further action by the parties
hereto (except that Bank shall notify Parent promptly after such transfer
occurs). Investor represents, warrants and agrees that Bank or any such
operating subsidiary is, or at the time of acquisition of the Shares will be,
an Accredited Investor, and that the acquisition by Bank or any such operating
subsidiary of the Shares will be for investment and not with a view to their
distribution.
Section 15. Miscellaneous.
(a) This Agreement may be amended only by a writing executed by the parties
hereto.
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(b) This Agreement may be executed in counterparts, each of which shall be
an original, with the same effect as if the signatures had been on the same
instrument.
(c) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that, subject to the provisions of Section 14 hereof, neither party may
assign or otherwise transfer any of its rights or duties under this Agreement
without the prior written consent of the other party.
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IN WITNESS WHEREOF, Investor and Parent have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the
date first written above.
ZIONS BANCORPORATION
By: Gary L. Anderson
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Gary L. Anderson
Senior Vice President
MACC PRIVATE EQUITIES INC.
By: Paul M. Bass, Jr.
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Paul M. Bass, Jr.
Chairman
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EXHIBIT (99)(ii)
Additional Exhibit -- News Release
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MACC PRIVATE EQUITIES INC. NEWS
101 SECOND STREET, S.E., SUITE 800 RELEASE
CEDAR RAPIDS, IOWA 52401
(319) 362-8568
For more information contact:
David R. Schroder, President For Immediate Release
Robert A. Comey, Executive Vice May 15, 1996
President
(319) 363-8249
________________________________________________________________________________
Cedar Rapids, Iowa, May 15, 1996. MACC Private Equities Inc. ("MACC") (Nasdaq:
"MACC") and Zions Bancorporation ("Zions") (Nasdaq: "ZION") announced today
their Agreement (the "Agreement"), dated May 13, 1996 for the purchase of MACC
shares by Zions. MACC is a business development company in the business of
making investments in small businesses in the United States though its
wholly-owned subsidiary, MorAmerica Capital Corporation ("MorAmerica Capital"),
a small business investment company. Zions is a bank holding company, which
through its wholly-owned subsidiary, Zions First National Bank (the "Bank"),
and the Bank's operating subsidiaries, is also engaged in venture capital
investing and making loans guaranteed by the Small Business Administration.
The Agreement provides for the issuance of 20,000 shares of MACC common
stock, $.01 par value, to Zions at a per share price equal to current net asset
value per share, $17.70. Together with its existing holdings of MACC common
stock acquired through open market purchases, Zions will own after closing of
the Agreement approximately 69,065 shares, equal to approximately 6.9% of the
issued and outstanding shares of MACC common stock.
Paul M. Bass, Jr., Chairman of the MACC Board of Directors, stated,
"Zions' investment represents a significant vote of confidence in MACC and its
management from an established player in the venture capital industry. The
alliance with Zions may expand access to a wider range of venture investments
for MACC, which is critical to success in an industry crowded with more
investors pursuing fewer deals."
W. David Hemingway, Executive Vice President of the Bank, stated that
Zions' goal is to increase its ownership of MACC common stock to 20% through
open market purchases in order to consolidate a portion of MACC earnings.
"MACC has a solid reputation in this industry and is a good fit with our
existing venture operations, including our Wasatch Venture Fund, a fund
investing in early stage ventures," Hemingway said.
In a related matter, MACC indicated that its program to repurchase up to
50,000 shares of MACC common stock from holders of fewer than 100 shares each,
as announced at the MACC Annual Meeting of Shareholders held in February, 1996,
had been delayed due to the negotiation of the Agreement. However, MACC
management stated that MACC still intends to complete the program before
September 30, 1996.
