<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MACC PRIVATE EQUITIES INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange 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:
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
[ ] 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.
[X] Fee paid previously with preliminary materials
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
[M A C C LOGO]
Private Equities Inc.
101 SECOND STREET, S.E., SUITE 800
CEDAR RAPIDS, IOWA 52401
January 17, 1997
To the Shareholders of MACC Private Equities Inc:
The Annual Meeting of Shareholders of our Corporation will be held on
Tuesday, February 25, 1997, at 10:00 a.m. at the Five Seasons Hotel, 350 First
Avenue N.E., in Cedar Rapids, Iowa.
A Notice of the meeting, a Proxy and Proxy Statement containing
information about matters to be acted upon are enclosed. In addition, the MACC
Private Equities Inc. Annual Report for the fiscal year ended September 30,
1996, is enclosed and provides information regarding the financial results of
the Corporation for the year. Holders of Common Stock are entitled to vote at
the Annual Meeting on the basis of one vote for each share held. IF YOU ATTEND
THE ANNUAL MEETING IN FEBRUARY, YOU RETAIN THE RIGHT TO VOTE IN PERSON EVEN
THOUGH YOU PREVIOUSLY MAILED THE ENCLOSED PROXY.
It is important that your shares be represented at the meeting whether or
not you are personally in attendance, and I urge you to review carefully the
Proxy Statement and sign, date and return the enclosed Proxy at your earliest
convenience. I look forward to meeting you and, together with our Directors
and Officers, reporting our activities and discussing the Corporation's
business and its prospects. I hope you will be present.
Very truly yours,
Paul M. Bass, Jr.
Paul M. Bass, Jr.
Chairman of the Board
<PAGE> 3
[M A C C LOGO]
PRIVATE EQUITIES INC.
101 SECOND STREET, S.E., SUITE 800
CEDAR RAPIDS, IOWA 52401
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 25, 1997
To the Shareholders of MACC Private Equities Inc:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of MACC
Private Equities Inc., a Delaware corporation (the "Corporation"), will be held
on Tuesday, February 25, 1997, at 10:00 a.m., central time, at the Five Seasons
Hotel, 250 First Avenue N.E., in Cedar Rapids, Iowa, for the following
purposes:
1. To elect three directors to serve until the 2000 Annual Meeting of
Shareholders or until their respective successors shall be elected and
qualified;
2. To ratify the appointment of KPMG Peat Marwick LLP as independent
auditors;
3. To amend the Corporation's Certificate of Incorporation to increase the
number of authorized shares of Common Stock from 2,000,000 to 4,000,000;
4. To approve for a one-year period the policy and practice of the
Corporation of issuing shares of Common Stock of the Corporation at less than
net asset value per share; and
5. To transact such other business as may properly come before the meeting
and any adjournment thereof.
Only holders of Common Stock of the Corporation of record at the close of
business on December 31, 1996, will be entitled to notice of, and to vote at,
the meeting and any adjournment thereof.
By Order of the Board of Directors
David R. Schroder, Secretary
David R. Schroder, Secretary
YOUR OFFICERS AND DIRECTORS DESIRE THAT ALL SHAREHOLDERS BE PRESENT OR
REPRESENTED AT THE ANNUAL MEETING. EVEN IF YOU PLAN TO ATTEND IN PERSON,
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE AT YOUR EARLIEST CONVENIENCE SO THAT YOUR SHARES MAY BE VOTED. IF YOU
DO ATTEND THE MEETING IN FEBRUARY, YOU RETAIN THE RIGHT TO VOTE EVEN THOUGH YOU
MAILED THE ENCLOSED PROXY. THE PROXY MUST BE SIGNED BY EACH REGISTERED HOLDER
EXACTLY AS THE STOCK IS REGISTERED.
<PAGE> 4
[M A C C LOGO]
Private Equities Inc.
101 SECOND STREET, S.E., SUITE 800
CEDAR RAPIDS, IOWA 52401
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 25, 1997
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of MACC Private Equities Inc., a Delaware corporation
(the "Corporation"), of proxies to be voted at the Annual Meeting of
Shareholders to be held on Tuesday, February 25, 1997, or any adjournment
thereof. The date on which this Proxy Statement and the enclosed form of proxy
are first being sent or given to shareholders of the Corporation is on or about
January 17, 1997.
PURPOSES OF THE MEETING
The Annual Meeting of the Shareholders is to be held for the purposes of
(1) electing three persons to serve as directors of the Corporation until the
2000 Annual Meeting of Shareholders, or until their respective successors shall
be elected and qualified (see ELECTION OF DIRECTORS); (2) ratifying the
appointment by the Board of Directors of KPMG Peat Marwick LLP as independent
auditors (see RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS); (3)
amending the Corporation's Certificate of Incorporation to increase the number
of authorized shares of its Common Stock from 2,000,000 to 4,000,000 (see
INCREASE IN AUTHORIZED SHARES); (4) approving for a one-year period the policy
and practice of the Corporation of issuing shares of Common Stock of the
Corporation at less than net asset value per share (see ISSUANCE OF COMMON
STOCK BELOW NET ASSET VALUE); and (5) transacting such other business as may
properly come before the meeting or any adjournment thereof.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR THE ELECTION AS DIRECTORS OF THE PERSONS NAMED UNDER ELECTION OF DIRECTORS,
FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT
AUDITORS, FOR THE AMENDMENT OF THE CORPORATION'S CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK AND FOR THE
APPROVAL FOR A ONE-YEAR PERIOD OF THE POLICY AND PRACTICE OF THE CORPORATION OF
ISSUING SHARES OF COMMON STOCK OF THE CORPORATION AT LESS THAN NET ASSET VALUE
PER SHARE.
<PAGE> 5
VOTING AT THE MEETING
The record date for holders of Common Stock entitled to notice of, and to
vote at, the Annual Meeting of Shareholders is the close of business on
December 31, 1996, at which time the Corporation had outstanding and entitled
to vote at the meeting 964,098 shares of Common Stock.
The presence, in person or by proxy, of the holders of a majority of the
shares of Common Stock outstanding and entitled to vote at the Annual Meeting
is necessary to constitute a quorum. Abstentions and shares held by brokers,
banks, other institutions and nominees that are voted on any matter at the
Annual Meeting are included in determining the presence of a quorum for the
transaction of business at the commencement of the Annual Meeting and on those
matters for which the broker, nominee or fiduciary has authority to vote. In
deciding all questions, a shareholder shall be entitled to one vote, in person
or by proxy, for each share of Common Stock held in the shareholder's name at
the close of business on the record date.
To be elected a director, each nominee must receive the favorable vote of
the holders of a majority of the shares of Common Stock entitled to vote and
represented at the Annual Meeting. In order to ratify the appointment of KPMG
Peat Marwick as independent auditors for the Corporation for the year ending
September 30, 1997, the ratification proposal must receive the favorable vote
of a majority of the shares of Common Stock entitled to vote and represented at
the Annual Meeting. To amend the Corporation's Certificate of Incorporation,
the proposal must receive the favorable vote of a majority of the shares of
Common Stock entitled to vote at the meeting.
In order to approve for a one-year period the policy and practice of the
Corporation of issuing shares of Common Stock at less than net asset value per
share, the proposal must receive the favorable vote of: (1) a majority of the
outstanding shares of Common Stock entitled to vote at the meeting; and (2) a
majority of the outstanding shares of Common Stock entitled to vote at the
meeting which are not held by affiliated persons of the Corporation. With
respect to this proposal, Section 2(a)(42) of the Investment Company Act of
1940 defines "a majority of the outstanding shares" as: (1) 67% or more of the
voting securities present at such meeting if the holders of more than 50% of
the outstanding voting securities of such company are present or represented by
proxy; or (2) 50% of the outstanding voting securities of such company,
whichever is the less.
Each proxy delivered to the Corporation, unless the shareholder otherwise
specifies therein, will be voted FOR the election as directors of the persons
named under ELECTION OF DIRECTORS, FOR the ratification of the appointment by
the Board of Directors of KPMG Peat Marwick LLP as independent auditors, FOR
the amendment of the Corporation's Certificate of Incorporation to increase the
number of authorized shares of Common Stock, and FOR the approval for a
one-year period of the policy and practice of the Corporation of issuing shares
of Common Stock of the Corporation at less than net asset value per share. In
each case where the shareholder has appropriately specified how the proxy is to
be voted, it will be voted in accordance with this specification. As to any
other matter or business which may be brought before the meeting, a vote
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<PAGE> 6
may be cast pursuant to the accompanying proxy in accordance with the judgment
of the person or persons voting the same, but neither management nor the Board
of Directors of the Corporation knows of any such other matter or business. Any
shareholder has the power to revoke his proxy at any time insofar as it is then
not exercised by giving notice of such revocation, either personally or in
writing, to the Secretary of the Corporation or by the execution and delivery to
the Corporation of a new proxy dated subsequent to the original proxy.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
On May 13, 1996, the Corporation entered into an Agreement (the
"Agreement") with Zions Bancorporation ("Zions"). Prior to that date, Zions
had acquired approximately 4.9% of the issued and outstanding shares of the
Corporation's Common Stock through open-market purchases. Pursuant to the
Agreement, Zions purchased 20,000 newly issued shares of the Corporation's
Common Stock for a price equal to then-current net asset value per share of
$17.70. Also pursuant to the Agreement, Zions transferred all of such
shares to its wholly-owned subsidiary, Zions First National Bank (the "Bank"),
and the Corporation agreed to use its reasonable best efforts to cause a
nominee of Zions to be elected to the Corporation's Board of Directors
commencing with the 1997 Annual Meeting of Shareholders. Zions named Todd J.
Stevens as its nominee, and on October 8, 1996, the Board of Directors resolved
to increase the size of the Corporation's Board of Directors from seven to
eight, and nominated Todd J. Stevens for election as Director at the meeting.
Based upon Amendment No.3 to Schedule 13D filed by Zions, as of November
27, 1996, the Bank beneficially owned 123,515 shares of the Common Stock,
representing approximately 12.8% of the issued and outstanding shares of Common
Stock, which were purchased for a total price of $1,286,978.44. The funds used
to acquire the shares were derived from working capital.
As of November 29, 1996, there were 964,098 shares outstanding. The
following table sets forth certain information as of November 29, 1996, with
respect to the Common Stock ownership of: (i) those persons or groups (as that
term is used in Section 13(d)(3) of the Securities and Exchange Act of 1934)
who beneficially own more than 5% of the Common Stock, (ii) each Director and
nominee for Director of the Corporation, and (iii) all Officers and Directors
of the Corporation, eight in number, as a group.
[Remainder of page intentionally left blank]
3
<PAGE> 7
NAME OF BENEFICIAL AMOUNT AND NATURE OF PERCENT OF CLASS OF
OWNER BENEFICIAL OWNERSHIP VOTING COMMON STOCK
Zions First National Bank 123,515 Shares(1) 12.80%
Paul M. Bass 10,980 Shares 1.10%
Robert A. Comey(2) 19,828 Shares 2.10%
Michael W. Dunn 5,388 Shares 0.60%
Henry T. Madden 4,685 Shares 0.50%
James L. Miller 1,100 Shares 0.10%
David R. Schroder(3) 20,434 Shares 2.10%
Todd J. Stevens -- --
John D. Wolfe 932 Shares 0.10%
All Officers and Directors
as a Group 67,334 Shares 7.00%
PROPOSAL 1
ELECTION OF DIRECTORS
The Corporation's Board of Directors is divided into three classes.
Directors are elected to serve three-year terms. Three Directors are proposed
to be elected at the meeting to serve until the 2000 Annual Meeting of
Shareholders or until their respective successors shall be elected and
qualified. The persons named in the accompanying form of proxy intend to vote
such proxy for the election of the nominees named below as directors of the
Corporation to serve until the 2000 Annual Meeting of Shareholders or until
their respective successors shall be elected and qualified, unless otherwise
properly indicated on such proxy. If any nominee shall become unavailable for
any reason, the
(1)Information with respect to Zions First National Bank (the "Bank") is
provided as of November 27, 1996. As stated in its Amendment No. 3 to Schedule
13D, dated November 27, 1996, Zions Bancorporation ("Zions") may be deemed to
share the power to vote or to direct the vote and to dispose or to direct the
disposition of all of the 123,515 shares of the Corporation's Common Stock held
by the Bank, due to Zions' ownership of the Bank.
(2)As principals, officers and directors of the Investment Advisor, Messrs.
Schroder and Comey are "interested persons" of the Corporation, as that term is
defined in Section 2(a)(19) of the Investment Company Act of 1940.
(3)To the extent that Zions or the Bank may be deemed to be in control of
the Corporation as a result of beneficial ownership of the Corporation's Common
Stock, Mr. Stevens, as Managing Director of Wasatch Venture Fund, a
majority-owned subsidiary of the Bank, may be an "interested person" of the
Corporation, as that term is defined in Section 2(a)(19) of the Investment
Company Act of 1940.
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<PAGE> 8
persons named in the accompanying form of proxy are expected to consult with
the Board of Directors of the Corporation in voting the shares represented by
them at the Annual Meeting. The Board of Directors has no reason to doubt the
availability of any of the nominees and no reason to believe that any of the
nominees will be unable or unwilling to serve the entire term for which
election is sought.
To be elected a director, each nominee must receive the favorable vote of
the holders of a majority of the shares of Common Stock entitled to vote and
represented at the Annual Meeting. The names of the nominees, along with
certain information concerning them, are set forth below. Those nominees who
are or may be deemed to be "interested persons," as that term is defined in
Section 2(a)(19) of the Investment Company Act of 1940, of the Corporation, as
affiliates of the Corporation, are indicated by an asterisk.
NOMINEES
TODD J. STEVENS*
Mr. Stevens, age 37, since 1993 has been the Manager of the Utah Office of
Wasatch Venture Fund, a $15,000,000 early stage venture capital fund and
majority-owned subsidiary of Zions First National Bank (the "Bank"). Mr.
Stevens is also a Manager of the Bank's Venture Capital Department. From 1991
through 1993, Mr. Stevens was a Managing Director of Stevens Wood, Inc., a
financial and managerial consulting firm which assisted in raising equity and
debt private placements. Mr. Stevens was also Development Manager, Assistant
Treasurer, and Treasurer for Bonneville Pacific Corporation from 1987-1991,
where his functions included negotiating, closing and administering corporate
credit facilities. From 1985 through 1987, Mr. Stevens performed financial
analysis for development, acquisition and sale of retail, commercial and hotel
properties for Homart Development Company. Mr. Stevens received his B.S. in
Accounting and Management from University of Utah in 1983, and his M.B.A. in
1985 from Harvard Graduate School of Business Administration.
HENRY T. MADDEN
Mr. Madden, age 67, has been a Director of the Corporation and MorAmerica
Capital since 1994. Mr. Madden is a consultant to development stage companies.
Since 1995, Mr. Madden has been an independent trustee of Berthel Growth and
Income Trust I. In 1986, Mr. Madden organized the Institute for
Entrepreneurial Management in the University of Iowa College of Business
Administration. As Director of the Institute, Mr. Madden advises potential and
new entrepreneurs and teaches courses on entrepreneurship in the M.B.A.
program.
JOHN D. WOLFE
Mr. Wolfe, age 70, has been a Director of the Corporation since 1994 and a
Director of MorAmerica Capital since 1989. Mr. Wolfe is retired from a career
in mortgage lending and retail banking. Mr Wolfe had been employed for many
years by the Morris Plan companies prior to the 1985 bankruptcy of MorAmerica
Financial Corporation and Morris Plan Liquidation Company (the
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<PAGE> 9
"Debtors"), and was President of the Morris Plan Company of Iowa. Following
the 1988 reorganization of the Debtors, Mr. Wolfe served as voting trustee for
the MorAmerica Financial Corporation stock and President of both Debtors. Mr.
Wolfe retired from most positions several years ago, but remains a director of
MorAmerica Capital. Mr. Wolfe returned from retirement to serve as voting
trustee and President and Director of the Debtors during the Debtors' 1993
bankruptcy case.
OTHER DIRECTORS
The names of the other Directors of the Corporation, whose terms of office
extend beyond the 1997 Shareholders Meeting, along with certain information
concerning them, are set forth below. Those Directors of the Corporation who
are or may be deemed to be "interested persons," as that term is defined in
Section 2(a)(19) of the Investment Company Act of 1940, of the Corporation, as
principals, officers and directors of the Investment Advisor, are indicated by
an asterisk.
PAUL M. BASS, JR.
Mr. Bass, age 61, has been Chairman of the Boards of Directors of the
Corporation and MorAmerica Capital since 1994. From 1988 to present, Mr. Bass
has also served as Vice Chairman of First Southwest Company, a regional
investment banking firm. Mr. Bass specializes in corporate finance, investment
management and public finance. Mr. Bass is also presently a Director of First
Nationwide Bank F.S.B. (also Chairman of the Audit Committee), Keystone
Consolidated Industries (also Chairman of the Audit Committee), Source
Services, Inc. (also a member of the Compensation and Executive Committees),
and Chairman of the Board of Richman Gordman 1/2 Price Stores, Inc. (also
Chairman of the Executive Committee). Mr. Bass holds a B.B.A. in finance from
Southern Methodist University.
DAVID R. SCHRODER*
Mr. Schroder, age 53, has been President, Secretary and a Director of the
Corporation since 1994, and a Director of MorAmerica Capital since 1989. Since
1985, Mr. Schroder has been a principal of InvestAmerica Venture Group, Inc.
("Venture Group") and is presently President and a Director. From 1985 to
1994, Venture Group provided management and investment services to MorAmerica
Capital. Venture Group presently provides management and investment services
to a private investment partnership, the Iowa Venture Capital Fund, L.P. Mr.
Schroder is also President, Secretary and a Director of InvestAmerica N.D.
Management, Inc., which provide management and investment services to North
Dakota Small Business Investment Company ("NDSBIC"), A North Dakota Limited
Partnership. Mr. Schroder is also President, Secretary and a Director of
InvestAmerica N.D., L.L.C., the general partner of NDSBIC. Mr. Schroder is
President and a Director of the investment advisor to the Corporation and to
MorAmerica Capital, InvestAmerica Investment Advisors, Inc. (the "Investment
Advisor"). As a representative of the Investment Advisor and Venture Group,
Mr. Schroder also serves on the boards of directors of several of the
Corporation's portfolio companies, including Centrum Industries, Inc. Mr.
Schroder received a B.S.F.S. from Georgetown University and an M.B.A. from the
University of Wisconsin.
6
<PAGE> 10
ROBERT A. COMEY*
Mr. Comey, age 50, has served as Vice President, Treasurer and a Director
of the Corporation since 1994, and as a Director of MorAmerica Capital since
1989. Mr. Comey was named Executive Vice President of the Company in 1995.
Since 1986, Mr. Comey has been a principal of Venture Group and is presently
Executive Vice President, Treasurer and a Director. From 1985 to 1994, Venture
Group provided management and investment services to MorAmerica Capital. Venture
Group presently provides management and investment services to a private
investment partnership, the Iowa Venture Capital Fund, L.P. Mr. Comey is also
Executive Vice President, Treasurer and a Director of InvestAmerica N.D.
Management, Inc., which provides management and investment services to NDSBIC.
Mr. Comey is also Executive Vice President, Treasurer, and a Director of
InvestAmerica N.D., L.L.C., the general partner of NDSBIC. Mr. Comey is a
Director, Executive Vice President, Treasurer, and Assistant Secretary of the
Investment Advisor. As a representative of the Investment Advisor and Venture
Group, Mr. Comey also serves on the boards of directors of several of the
Corporation's portfolio companies. Mr. Comey received an A.B. in Economics from
Brown University and an M.B.A. from Fordham University.
MICHAEL W. DUNN
Mr. Dunn, age 47, has been a Director of the Corporation and MorAmerica
Capital since 1994. Mr. Dunn has also been C.E.O. since 1980 and President
since 1983 of Farmers & Merchants Savings Bank of Manchester, Iowa. Mr. Dunn
is also presently a member of the boards of directors of Security Savings Bank
of Eagle Grove, Iowa, and F&M Shares Corp. and Dunn Shares, Inc., both bank
holding companies.
JAMES L. MILLER
Mr. Miller, age 55, has been a director of the Corporation and MorAmerica
Capital since 1994. Mr. Miller was employed by Armstrong's, Inc. department
stores from 1967 until 1992. His capacities included serving as a member of
the Board of Directors and Executive Committee and as Vice President and
C.F.O., Treasurer and Controller. In 1992 and 1993, Mr. Miller was custom
sales manager for Custom Audio/Video, Hiawatha, Iowa. Mr. Miller is currently
developing a new business for Communications Plus, as associate dealer for AT&T
products and services, and developing business for Excel Mortgage, Inc., a
mortgage broker located in Iowa City, Iowa.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Corporation has established an Audit
Committee, a Nominating Committee and an Investment Committee to assist the
Board in carrying out its duties.
The Audit Committee makes recommendations to the Board of Directors
regarding the engagement of the independent auditors for audit and non-audit
services; evaluates the independence of the auditors; and reviews with the
independent auditors the fee, scope and timing of audit and non-audit services.
The Audit Committee also is charged with monitoring the Corporation's Policy
Against Insider Trading and Prohibited Transactions and its Code of Conduct.
The present members
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of the Corporation's Audit Committee include Michael W. Dunn, James L. Miller
and John D. Wolfe.
The Nominating Committee recommends to the Board of Directors nominations
for Director of the Corporation. The Nominating Committee presently has no
established procedures for considering shareholders' recommendations for
Director nominees, but shareholders may propose nominees for Director by
following the procedures set forth in the section of this Proxy Statement
entitled "SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING." The Nominating
Committee presently consists of Robert A. Comey, Michael W. Dunn and James L.
Miller.
The Investment Committee assists the full Board of Directors with
oversight of the Corporation's investment portfolio and evaluates any proposed
revisions to the Corporation's investment policy. The Investment Committee
also assures compliance with the Corporation's policy regarding investments
made in participation with other funds managed by the Investment Advisor.
Henry T. Madden, James L. Miller, and David R. Schroder and Robert A. Comey (as
alternate members with a single vote on any issue) are presently members of the
Investment Committee.
During the fiscal year of the Corporation ended September 30, 1996, six
meetings of the Board of Directors were held. In addition, three meetings of
the Audit Committee, two meetings of the Nominating Committee and three
meetings of the Investment Committee were held. Each of the Directors attended
all of the meetings of the Board of Directors and all of the meetings held by
the committees of the Board on which that Director served, except that Mr. Dunn
did not attend one meeting of the Audit Committee.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the value of $100 invested on
March 31, 1995 (the last day of the first month in which shares of the Common
Stock began public trading) in shares of the Common Stock (based on the closing
market bid price for shares of the Common Stock) with the cumulative total
return of $100 invested on the same date in the NASDAQ Stock Market Index (U.S.
companies) and the NASDAQ Financial Stocks Total Return Index.
[Remainder of page intentionally left blank]
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MACC PRIVATE EQUITIES INC.
COMPARISON CUMULATIVE TOTAL RETURNS
[LINE GRAPH]
<TABLE>
<CAPTION>
3/31/95 6/30/95 9/29/95 12/29/95 3/29/96 6/28/96 9/30/96
<S> <C> <C> <C> <C> <C> <C> <C>
Nasdaq Total Return 100 114.38 128.16 129.75 135.78 146.86 152.08
Nasdaq Financial 100 108.32 123.45 132.44 137.78 141.05 152.99
MACC Private Equities Inc. 100 130 147.5 137.5 175 222.5 190
</TABLE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
Pursuant to the investment advisory agreements of the Corporation and
MorAmerica Capital with the Investment Advisor, Directors of the Corporation
and of MorAmerica Capital who are also officers or directors of the Investment
Advisor receive no compensation for serving on the Boards of Directors of the
Corporation and of MorAmerica Capital. All other Directors of the Corporation,
other than the Chairman of the Board, receive $8,000 per year plus $400 per
Board of Directors meeting attended and $250 per committee meeting attended,
all as total compensation for serving on the Boards of Directors of both the
Corporation and MorAmerica Capital. The Corporation's Chairman of the Board
receives $2,000 per month plus $400 per Board of Directors meeting attended and
$250 per committee meeting attended, all as total compensation for serving as
the Chairman of the Board of Directors of the Corporation and MorAmerica
Capital. In addition, the Corporation reimburses all reasonable expenses of
the Directors and the Chairman of the Board in attending Board of Directors and
committee meetings. Directors' meetings are normally held on a quarterly
basis.
SUMMARY COMPENSATION TABLE
The following table sets forth certain details of compensation paid to
Directors during fiscal year 1996, which includes compensation for serving on
the Boards of Directors of the Corporation, MorAmerica Capital and other wholly
owned subsidiaries of the Corporation. The Corporation presently maintains no
pension or retirement plans for its Directors.
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Name and Aggregate Compensation
Position From Corporation(1)
----------------------- -------------------------
Paul M. Bass, Jr., 26,400
Chairman of the Board
David R. Schroder, -0-
Director, President and
Secretary
Robert A. Comey, -0-
Director, Executive
Vice President and
Treasurer
Henry T. Madden, 11,400
Director
John D. Wolfe, 11,400(2)
Director-
Michael W. Dunn, 11,150
Director
James L. Miller, 12,400
Director
(1) Consists only of directors' fees and does not include reimbursed
expenses. The Corporation presently maintains no pension or retirement plans
for its Directors.
(2) Of the $11,400 earned by Mr. Wolfe in fiscal year 1996, $9,400 was paid
by the Corporation during fiscal year 1996. The remaining $2,000 was deferred
at the election of Mr. Wolfe and will be paid without interest during fiscal
year 1997.
COMPENSATION OF EXECUTIVE OFFICERS
The Corporation has no employees and does not pay any compensation to any
of its officers. All of the Corporation's officers and staff are employed by
the Investment Advisor, which pays all of their cash compensation.
SECTION 16(a) REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended, officers and directors of the Corporation and persons beneficially
owning 10% or more of the Corporation's Common Stock (collectively, "reporting
persons") must file reports on Forms 3, 4 and 5 regarding changes in their
holdings of the Corporation's equity securities with the Securities and
Exchange Commission. Based solely upon a review of copies of these reports
sent to the Secretary of the Corporation and/or written representations from
reporting persons that no Form 5 was required to be filed with respect to
fiscal year 1996, the Corporation believes that all Forms 3, 4, and 5 required
to be filed by all reporting persons have been properly and timely filed with
the Securities and Exchange Commission, except that a December, 1995 purchase
by Henry T. Madden was reported late on January 16, 1996, and based upon a
review of Schedule 13D filed by Zions First National Bank and Zions
Bancorporation, and all amendments thereto, that no Form 3 was filed by Zions
First National Bank or Zions Bancorporation with respect to the transaction
which resulted in Zions First National Bank and Zions Bancorporation becoming
reporting persons, nor were Forms 5 filed by Zions First National Bank or
Zions Bancorporation with respect to the Corporation's fiscal year ended
September 30, 1996.
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THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR THE ELECTION AS DIRECTORS OF THE PERSONS NAMED UNDER "ELECTION OF
DIRECTORS."
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
As recommended by the Audit Committee of the Corporation's Board of
Directors, on October 8, 1996, a majority of those members of the Board of
Directors of the Corporation who are not "interested persons" of the
Corporation (as defined in Section 2(a)(19) of the Investment Company Act of
1940) voted in favor of the appointment of KPMG Peat Marwick LLP to serve as
the Corporation's independent auditors for the fiscal year ended September 30,
1997.
The appointment of KPMG Peat Marwick LLP as independent auditors is
subject to ratification by the shareholders. If the shareholders ratify the
selection of KPMG Peat Marwick LLP as the Corporation's auditors, they will
also serve as independent auditors for all subsidiaries of the Corporation. A
representative of KPMG Peat Marwick LLP is expected to be present at the Annual
Meeting with an opportunity to make a statement, and will be available to
respond to appropriate questions.
In order to ratify the appointment of KPMG Peat Marwick LLP as independent
auditors for the Corporation for the year ending September 30, 1997, the
proposal must receive the favorable vote of a majority of the shares entitled
to vote and represented at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR THE RATIFICATION OF KPMG PEAT MARWICK LLP AS THE INDEPENDENT AUDITORS FOR
THE CORPORATION FOR THE YEAR ENDING SEPTEMBER 30, 1997.
PROPOSAL 3
INCREASE IN AUTHORIZED SHARES
DESCRIPTION OF THE PROPOSED AMENDMENT
AND REQUIRED VOTE
On October 8, 1996, the Board of Directors of the Corporation unanimously
approved a resolution to amend the Corporation's Certificate of Incorporation
to provide for an increase in the number of authorized shares of Common Stock,
par value $.01, from 2,000,000 to 4,000,000 authorized shares. The Board of
Directors determined that such amendment is advisable and directed that the
proposed amendment be considered at the Annual Meeting of Shareholders to be
held on February 25, 1997. The affirmative vote of the holders of a majority
of the outstanding shares of Common Stock entitled to vote at the meeting is
required to approve the proposed amendment. The full text of the proposed
amendment to the Certificate of Incorporation is set forth in Appendix A to
this Proxy Statement.
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<PAGE> 15
PURPOSES AND EFFECTS OF INCREASING THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK
The proposed amendment would increase the number of shares of Common Stock
which the Corporation is authorized to issue from 2,000,000 to 4,000,000. The
additional shares of Common Stock would be a part of the existing class of
Common Stock and, if and when issued, would have the same rights and privileges
as the shares of Common Stock presently issued and outstanding. The holders of
the Common Stock of the Corporation are not entitled to preemptive rights or
cumulative voting.
The Board of Directors believes it desirable to increase the number of
authorized but unissued shares in order to provide necessary capital-raising
flexibility into the foreseeable future; however the Board of Directors has no
specific plan or intention to issue any additional shares for capital-raising
purposes at this time. Such authorized but unissued shares may be issued by
the Corporation to raise additional equity capital to provide funding for the
Corporation's investing activities, payment of principal of outstanding
SBA-guaranteed debentures, or acquisitions of other venture capital funds
and/or the investment portfolios of such funds.
As of November 29, 1996, the Corporation had 1,035,902 authorized shares
available for issuance, and 964,098 shares issued and outstanding.
Accordingly, if the proposed amendment to the Corporation's Certificate of
Incorporation is approved by the Shareholders, the Corporation would have a
total of 3,035,902 shares of Common Stock available for issuance, based upon
the number of shares of Common Stock outstanding as of November 29, 1996.
Shares of the Common Stock are currently listed for trading on the NASDAQ
National Market. The Corporation also will apply for listing on the NASDAQ
National Market of any additional shares of the Common Stock to be issued.
PURPOSES AND EFFECTS OF OBTAINING
ADDITIONAL EQUITY CAPITAL
In the past, the Corporation and MorAmerica Capital have relied primarily
upon their U.S. treasury bills, cash and cash equivalents (collectively,
"Liquid Assets") and SBA-guaranteed debt to finance their investing activities
and other cash requirements. Although the Corporation anticipates that it
will have sufficient capital to fund its investment activities and other cash
requirements over the next twelve months, the Corporation anticipates that it
may need to seek additional capital over the next three to five years. The
Corporation, as of September 30, 1996, had Liquid Assets of $14,181,406, total
assets of $27,906,798 and total liabilities of $10,829,029, and the Corporation
plans to invest $8,500,000 during fiscal year 1997 and at least $7,000,000 per
year over the following several years. In addition, the Corporation
anticipates fewer portfolio company liquidity events and divestitures in the
early years of this same period due to the Corporation's five to seven year
investment cycle and the lower level of portfolio investments made by
MorAmerica Capital during the relevant prior years. Therefore, the Corporation
may utilize most of its Liquid Assets over the next several years to fund its
investing activities and other cash requirements, without generating cash from
portfolio company liquidity events and divestitures sufficient to fund all of
its planned investment activities and other cash requirements over the
succeeding few years. The Corporation's outstanding SBA-guaranteed debt
matures as follows: $2,450,000 in 2000, $5,690,000 in 2001 and
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<PAGE> 16
$2,150,000 in 2003, and these principal payments if not refinanced by the SBA
could further diminish the Corporation's liquidity during these years.
Moreover, the members of the Board of Directors of the Corporation believe
that continued reliance on SBA-guaranteed debt as a primary source of capital
may not be in the best interests of the Corporation and its shareholders
because of the risks and costs inherent in debt financing. The lenders of
these borrowed funds have fixed dollar claims against the Corporation's assets
superior to the claims of the Corporation's shareholders. Any increase in the
value of the Corporation's investments would cause its net asset value to
increase more than it would had the borrowings not been incurred. Conversely,
decreases in the value of the Corporation's investments below their value at
the time of acquisition would cause the Corporation's net asset value to
decrease more sharply than it would had the funds not been borrowed and
invested. Similarly, any increase in the Company's rate of income in excess of
interest payable on the borrowed funds would cause its net investment income to
increase more than it would without the leverage, while any decrease in the
rate of income would cause net investment income to decline more sharply than
it would had the funds not been borrowed and invested. For these reasons,
leverage is generally considered to add both potential risks and advantages to
the Corporation's future performance.
In addition, the interest payments with respect to such debt obligations
typically constitute the single largest component of the Corporation's
operating expenses, and reduction or elimination of this expense may
substantially contribute to the Corporation's ability to achieve its goal of
achieving net investment income. The members of the Corporation's Board of
Directors believe that some of these risks and expenses may be avoided or
reduced by replacing debt financing with additional equity through the issuance
of additional shares of the Corporation's Common Stock.
The members of the Board of Directors of the Corporation also believe that
increasing the asset base of the Corporation through the issuance of additional
shares of Common Stock may be in the best interests of the Corporation and its
shareholders for several reasons. First, the Corporation may be able to
achieve greater breadth in its investment portfolio by increasing the total
number and amount of portfolio investments. Second, any increase in the
Corporation's asset base may tend to decrease the Corporation's operating
expenses as a percentage of assets under management. Third, under SBA rules,
additional contributed capital and net investment income and/or net realized
gains, if any, from additional portfolio investments may indirectly result in
an increase in MorAmerica Capital's maximum single investment size and thus may
permit MorAmerica Capital to make larger portfolio investments as called for
in its growth plans, sooner than otherwise possible.
With a larger maximum single investment size, more portfolio investment
opportunities may be available to MorAmerica Capital. By making larger
investments, the Corporation and MorAmerica Capital may be more competitive in
their investment prospecting when the Corporation and/or MorAmerica Capital is
one of several co-investors. Moreover, issuing additional shares of Common
Stock as a means of accessing additional capital may permit the Corporation to
realize the benefit of its publicly traded status.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE PROPOSAL AMENDING THE CORPORATION'S CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 2,000,000 TO
4,000,000.
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PROPOSAL 4
ISSUANCE OF COMMON STOCK
BELOW NET ASSET VALUE
INTRODUCTION
As indicated above, the Corporation has relied upon several sources to
fund its investment activities and other cash requirements, including the
Corporation's Liquid Assets, and the Small Business Investment Company ("SBIC")
capital program operated by the Small Business Administration (the "SBA"). The
Corporation does not presently need additional capital to fund its investment
activities and other cash requirements over the next twelve months and
anticipates that additional funding for such purposes, if needed, should
probably be available through the SBIC capital program.
Nevertheless, the Corporation is continuing to assess the desirability of
relying primarily on the SBIC capital program as a means of providing
additional capital, as well as methods of increasing its asset base in
accordance with the Corporation's growth plans. One such method would be the
issuance of some or all of the authorized but unissued shares of the
Corporation's common stock. Such shares could be issued to provide funding for
the Corporation's investing activities and other cash requirements, and/or such
shares could be issued in connection with acquisitions of other venture capital
funds and/or the investment portfolios of such funds. To the extent that the
Corporation determines that the incurrence of additional debt capital is not in
the best interests of the Corporation and its shareholders, or that obtaining
additional equity capital is in the best interests of the Corporation and its
shareholders, the Corporation may require the requested flexibility. For a
discussion of the risks and costs inherent in debt financing, as well as a
discussion of the benefits of increasing the Corporation's asset base, please
see "INCREASE IN AUTHORIZED SHARES" above.
DESCRIPTION OF PROPOSAL AND
REQUIRED VOTE
Obtaining such additional equity capital would include the issuance of
some or all of the 1,035,902 authorized but unissued shares of Common Stock of
the Corporation. The Corporation presently has 946,098 shares issued and
outstanding. These numbers of shares available for issuance and issued and
outstanding may double if shareholders approve the proposed amendment to the
Corporation's Certificate of Incorporation. See "INCREASE IN AUTHORIZED
SHARES." Accordingly, if the Corporation were to issue all of the presently
authorized but unissued shares of Common Stock, the number of shares issued and
outstanding would increase by approximately 109%.
Since the Corporation's Common Stock began trading in March, 1995, it has
consistently traded at a discount from net asset value per share. Shares of
closed-end mutual funds similar to the Corporation have a tendency to trade
frequently at a discount from net asset value per share. The Corporation is
presently evaluating different strategies to attempt to decrease the amount of
this discount; however, there can be no assurances that any course of action
taken by the Corporation with respect thereto would have the intended result.
Accordingly, if the Corporation were to issue additional shares of Common Stock
to provide additional equity capital at any time during the next year, such
shares would be sold at a price less than net asset value per share if the
then-prevailing market price for the Common Stock were less than net asset
value per share.
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The Corporation has elected treatment as a business development company
("BDC") under the Investment Company Act of 1940, as amended (the "Act").
Pursuant to Section 63 of the Act, a BDC may not issue shares of common stock
at less than net asset value per share unless such issuance has been approved
by the holders of a majority of the BDC's outstanding voting securities and by
a majority of such holders who are not affiliated persons of the BDC. In
addition, a majority of the directors of the BDC who are not interested persons
of the BDC must first determine that any such issuance would be in the best
interests of the Corporation and its shareholders, and in consultation with the
underwriter, that the offering price would be not less than a price which
closely approximates market price.
Accordingly, this proposal, if approved, would give the Corporation the
ability for the twelve months ending February 25, 1998, to issue shares of
Common Stock at less than net asset value per share if a majority of the
members of the Corporation's Board of Directors who are not interested persons
of the Corporation first determine that such issuance would be in the best
interests of the Corporation and its shareholders.
In order to be approved by the Shareholders, this proposal must receive
the favorable vote of: (1) a majority of the outstanding shares of Common Stock
entitled to vote at the meeting; and (2) a majority of the outstanding shares
of Common Stock entitled to vote at the meeting which are not held by
affiliated persons of the Corporation. With respect to this proposal, Section
2(a)(42) of the Investment Company Act of 1940 defines "a majority of the
outstanding shares" as: (1) 67% or more of the voting securities present at
such meeting if the holders of more than 50% of the outstanding voting
securities of such company are present or represented by proxy; or (2) 50% of
the outstanding voting securities of such company, whichever is the less.
PURPOSES AND EFFECT OF OBTAINING
ADDITIONAL EQUITY CAPITAL
As indicated above, the federal securities laws applicable to BDCs require
those members of a BDC's board of directors who are not interested persons of
the BDC to determine that the issuance of shares of the BDC's common stock for
a price less than net asset value per share is in the best interests of the
Corporation and its shareholders.
As a general matter, and without reference to any proposed transaction,
the members of the Board of Directors of the Corporation who are not interested
persons of the Corporation believe that continued reliance on SBA-guaranteed
debt as a principal source of capital may not be in the best interests of the
Corporation and its shareholders because of the risks and costs inherent in
debt financing. For a discussion of these risks and costs of debt financing,
please see "INCREASE IN AUTHORIZED SHARES" above. Moreover, the SBA capital
programs are subject to federal funding, and therefore the availability of
capital through these programs is difficult to predict over the long term.
Even assuming the availability of federal funding, the Corporation's
qualification for these programs at any particular time is not always certain.
Also as a general matter, and without reference to any proposed
transaction, the members of the Board of Directors of the Corporation who are
not interested persons of the Corporation believe that increasing the asset
base of the Corporation through the issuance of additional shares of Common
Stock may be in the best interests of the Corporation and its shareholders for
several reasons. For a discussion of these benefits of
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<PAGE> 19
increasing the size of the Corporation's asset base, please see "INCREASE IN
AUTHORIZED SHARES" above.
In the absence of shareholder approval of this proposal, the Corporation
may not have the flexibility to raise additional equity capital through the
issuance of additional shares of Common Stock. If shareholders approve this
proposal, the Corporation's Board of Directors will have the authority for a
one-year period without seeking further approval of the shareholders to issue
shares of the Corporation's Common Stock for less than net asset value per
share; however, the Corporation will not engage in any such issuance unless the
required majority of the Corporation's disinterested Directors first
determines, based upon the perceived merits of the specific transaction, that
such issuance is in the best interests of the Corporation and its shareholders
and that the offering price closely approximates market price.
PURPOSES AND EFFECT OF
ISSUANCE OF SHARES
To the extent that any additional shares of Common Stock would be issued
by the Corporation, the offering of such shares by the Corporation and/or by
the holders of such newly issued shares may be registered by the Corporation
with the Securities and Exchange Commission, which may involve significant
delay and expense. Alternatively, any such shares may be privately placed,
with restrictions on transferability, in which case, registration with the
Securities and Exchange Commission may not be required.
Before voting on this proposal or giving proxies with regard to this
matter, shareholders should consider the potentially dilutive effect of the
issuance of shares of the Corporation's Common Stock at less than net asset
value per share on net asset value per outstanding share of Common Stock.
Shareholders should also consider that holders of the Corporation's Common
Stock have no subscription, preferential or preemptive rights to additional
shares of the Common Stock, and thus any future issuance of shares may tend to
dilute shareholders' holdings of the Common Stock as a percentage of shares
outstanding.
The issuance of the additional shares of Common Stock may have an indirect
effect on the gross amount of management fees paid by the Corporation to the
Investment Advisor. The Corporation's and MorAmerica Capital's Investment
Advisory Agreements with the Investment Advisor provide for a management fee
payable to the Investment Advisor as compensation for managing the investment
portfolios of the Corporation and MorAmerica Capital. With regard to the
Corporation, the management fee is computed as a percentage of assets under
management. The increase in the Corporation's asset base resulting from any
such issuance would increase assets under management, and would cause a
corresponding increase in the gross amount of management fees paid to the
Investment Advisor, but would not increase or decrease the management fee as a
percentage of assets under management. Nevertheless, the Corporation will not
engage in any issuance of shares of its Common Stock for less than net asset
value per share unless the required majority of the Corporation's Board of
Directors (i.e., excluding those Directors who are principals, officers and
directors of the Investment Advisor and other Directors who are interested
persons of the Corporation) first determines that such issuance is in the best
interests of the Corporation and its shareholders.
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THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE PROPOSAL APPROVING FOR A ONE-YEAR PERIOD THE POLICY AND PRACTICE OF THE
CORPORATION OF ISSUING SHARES OF COMMON STOCK OF THE CORPORATION AT LESS THAN
NET ASSET VALUE PER SHARE.
OTHER BUSINESS
The Board of Directors knows of no other business to be presented for
action at the Meeting. If any matters do come before the Meeting on which
action can properly be taken, it is intended that the proxies shall vote in
accordance with the judgment of the person or persons exercising the authority
conferred by the proxy at the Meeting.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Under the rules of the Securities and Exchange Commission, any shareholder
proposal to be considered by the Corporation for inclusion in the proxy
material for the February, 1998 Annual Meeting of Shareholders must be received
by the Secretary of the Corporation, 101 Second Street, S.E., Suite 800, Cedar
Rapids, Iowa 52401, no later than September 19, 1997. The submission of a
proposal does not guarantee its inclusion in the proxy statement or
presentation at the annual meeting unless certain securities laws requirements
are met.
In addition, under the Corporation's Bylaws, shareholders desiring to
nominate persons for election as Directors or to propose other business for
consideration at an annual meeting must generally notify the Secretary of the
Corporation in writing not less than 60 days, nor more than 90 days prior to
the first anniversary of the preceding year's annual meeting. Shareholders'
notices must contain the specific information set forth in the Corporation's
Bylaws. A copy of the Corporation's Bylaws will be furnished to shareholders
without charge upon written request to the Secretary of the Corporation.
EXPENSES OF SOLICITATION OF PROXIES
In addition to the use of the mails, proxies may be solicited by personal
interview and telephone by directors, officers and other employees of the
Corporation, who will not receive additional compensation for such services.
The Corporation has employed ChaseMellon Shareholder Services to aid in the
solicitation of proxies at an estimated fee of $3,500 plus $4.50 per
shareholder solicited. The Corporation will also request brokerage houses,
nominees, custodians and fiduciaries to forward soliciting materials to the
beneficial owners of stock held of record by them and will reimburse such
persons for forwarding materials. The cost of soliciting proxies will be borne
by the Corporation.
ANNUAL REPORT
The Annual Report to Shareholders covering the fiscal year ended September
30, 1996, accompanies this proxy statement, but is not deemed a part of the
proxy soliciting material.
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A COPY OF THE FISCAL YEAR 1996 FORM 10-K REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION, EXCLUDING EXHIBITS, WILL BE MAILED TO SHAREHOLDERS WITHOUT
CHARGE UPON WRITTEN REQUEST TO DAVID R. SCHRODER, SECRETARY, MACC PRIVATE
EQUITIES INC., 101 SECOND STREET, S.E., SUITE 800, CEDAR RAPIDS, IOWA 52401.
SUCH REQUESTS MUST SET FORTH A GOOD FAITH REPRESENTATION THAT THE REQUESTING
PARTY WAS EITHER A HOLDER OF RECORD OR A BENEFICIAL OWNER OF COMMON STOCK OF
THE CORPORATION ON DECEMBER 31, 1996. EXHIBITS TO THE FORM 10-K WILL BE MAILED
UPON SIMILAR REQUEST AND PAYMENT OF SPECIFIED FEES.
PLEASE DATE, SIGN AND RETURN THE PROXY AT YOUR EARLIEST CONVENIENCE IN THE
ENCLOSED ENVELOPE. No postage is required for mailing in the United States. A
prompt return of your proxy will be appreciated as it will save the expense of
further mailings and telephone solicitations.
By Order of the Board of Directors
David R. Schroder
David R. Schroder,
Secretary
Cedar Rapids, Iowa
January 17, 1997
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APPENDIX A
RESOLVED, that the Corporation's Certificate of Incorporation be, and
hereby is, amended by deleting the current "ARTICLE V" thereof, and
substituting the following:
ARTICLE V
AUTHORIZED SHARES
The total number of shares of stock of all classes which the
Corporation shall have authority to issue is four million (4,000,000)
shares of a single class of voting common stock and the par value of
each such share is One Cent ($.01) amounting in the aggregate to Forty
Thousand Dollars ($40,000.00);
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<PAGE> 23
MACC PRIVATE EQUITIES INC.
Proxy Solicited on Behalf of the Board of Directors
for
Annual Meeting of Stockholders
February 25, 1997
The undersigned hereby appoints Paul M. Bass, Jr., David R. Schroder
and James L. Miller and each of them, with full power of substitution, and
hereby authorizes them to represent the undersigned and to vote all of the
shares of Common Stock in MACC PRIVATE EQUITIES INC. (the "Company") held of
record by the undersigned on December 31, 1996, at the Annual Meeting of
Stockholders of the Company to be held on February 25, 1997 and any
adjournment(s) thereof.
This proxy when properly executed will be voted as directed by the undersigned
stockholder. If directions are not indicated, the proxy will be voted to elect
the nominees described in Item 1 and for Items 2, 3 and 4.
(continued, and to be signed on reverse side)
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<PAGE> 24
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Please mark
your votes as
indicated in
this example /X /
1. To elect three directors to serve until the 2000 Annual Meeting of Shareholders or until their respective successors
shall be elected and qualified:
FOR WITHHOLD NOMINEES: Todd J. Stevens, Henry T. Madden, John D. Wolfe 2. To ratify the appointment
all authority for of KPMG Peat Marwick LLP
Nominees All Nominees (INSTRUCTION: To withhold authority to vote for any individual as independent auditors:
nominee, write that nominee's name on the space provided
/ / / / below.) FOR AGAINST ABSTAIN
-------------------------------------------------------------- / / / / / /
3. To amend the Corporation's 4. To approve for a one-year period the policy and practice
Certificate of Incorporation of the Corporation of issuing shares of Common Stock of 5. To transact such
to increase the number of the Corporation at less than net asset value per share; per business as
authorized shares of Common and operly come
Stock from 2,000,000 to before the meeting
4,000,000. and any adjournment
thereof.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN I PLAN TO
ATTEND
/ / / / / / / / / / / / MEETING
/ /
----------------------------------------------
Signature Date
----------------------------------------------
Signature Date
Please sign your name exactly as it appears
hereon. If signing for estates, trusts,
corporations or partnerships, title or
capacity should be stated. If shares are
held jointly, each holder should sign.
Please sign, date and return this proxy
using the enclosed envelope.
</TABLE>
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