<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant X
---
Filed by a Party other than the Registrant
Check the appropriate box:
X Preliminary Proxy Statement
- ---
Confidential, for Use of the Commission Only (as permitted by Rule
- --- 14A-6(e)(2)
Definitive Proxy Statement
- ---
Definitive Additional Materials
- ---
Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-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)
X
- --- $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A
- --- $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)
1) Title of each class of securities to which transaction applies:_________
________________________________________________________________________
2) Aggregate number of securities to which transaction applies:____________
________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
_________________________
4) Proposed maximum aggregate value of transaction:
_________________________
5) Total fee paid:__________________________
_________________________________________
___ Fee paid previously with preliminary materials
___ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:___________________________
2) Form, Schedule or Registration Statement No.:
________________________________________
3) Filing Party:___________________________
4) Date Filed:_____________________________
<PAGE> 2
101 SECOND STREET, S.E., SUITE 800
CEDAR RAPIDS, IOWA 52401
January 15, 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.
Chairman of the Board
<PAGE> 3
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 a price
which closely approximates market price if such price is 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
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
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 15, 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 a
price which closely approximates market price if such price is less
than net asset value per share (see ISSUANCE OF COMMON STOCK); 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 A PRICE WHICH CLOSELY APPROXIMATES
MARKET PRICE IF SUCH PRICE IS 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 a price which closely approximates market price if such price
is 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.
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 a price which closely
approximates market price if such price is 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 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.
2
<PAGE> 6
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.
<TABLE>
<CAPTION>
NAME OF BENEFICIAL AMOUNT AND NATURE OF PERCENT OF CLASS OF VOTING
OWNER BENEFICIAL OWNERSHIP COMMON STOCK
<S> <C> <C>
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%
</TABLE>
- --------------------
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
<PAGE> 7
<TABLE>
<CAPTION>
NAME OF BENEFICIAL AMOUNT AND NATURE OF PERCENT OF CLASS OF VOTING
OWNER BENEFICIAL OWNERSHIP COMMON STOCK
<S> <C> <C>
James L. Miller 1,100 Shares 0.10%
David R. Schroder(2) 20,434 Shares 2.10%
Todd J. Stevens(3) -- --
John D. Wolfe 932 Shares 0.10%
All Officers and Directors 67,334 Shares 7.00%
as a Group
</TABLE>
- --------------------
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.
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
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. Nominees for Director
The names of the nominees, along with certain information concerning them,
are set forth below.
4
<PAGE> 8
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 "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.
5
<PAGE> 9
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.
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
6
<PAGE> 10
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 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.
7
<PAGE> 11
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.
MACC PRIVATE EQUITIES INC.
COMPARISON CUMULATIVE TOTAL RETURNS
[GRAPH]
[Remainder of page intentionally left blank]
8
<PAGE> 12
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.
<TABLE>
<CAPTION>
Name and Aggregate Compensation
Position From Corporation(1)
-------- -------------------
<S> <C>
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
</TABLE>
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.
9
<PAGE> 13
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.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
THE ELECTION AS DIRECTORS OF THE PERSONS NAMED UNDER "ELECTION OF DIRECTORS."
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.
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<PAGE> 14
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.
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.
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. 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.
11
<PAGE> 15
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, 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 $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 or 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
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<PAGE> 16
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 diversification 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, net investment
income and/or net realized gains, if any, from additional portfolio investments
would permit the Corporation to increase the size of MorAmerica Capital's
paid-in capital, which 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.
ISSUANCE OF COMMON STOCK
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
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<PAGE> 17
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.
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 a price which closely approximates market price if such price
is 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
14
<PAGE> 18
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.
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 or 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 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 a price
which closely approximates market price if such price is 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.
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
15
<PAGE> 19
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.
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 A PRICE
WHICH CLOSELY APPROXIMATES MARKET PRICE IF SUCH PRICE IS 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 17, 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.
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<PAGE> 20
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 $4.50 per shareholder
solicited. The Corporation will also request brokerage houses, nominees,
custodians and fiduciaries to forward soliciting materials to the beneficial
owners of stock held of record by them and will reimburse such persons for
forwarding materials. The cost of soliciting proxies will be borne by the
Corporation.
ANNUAL REPORT
The Annual Report to Shareholders covering the fiscal year ended September
30, 1996, accompanies this proxy statement, but is not deemed a part of the
proxy soliciting material.
A COPY OF THE FISCAL YEAR 1996 FORM 10-K REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION, EXCLUDING EXHIBITS, WILL BE MAILED TO SHAREHOLDERS WITHOUT
CHARGE UPON WRITTEN REQUEST TO DAVID R. SCHRODER, SECRETARY, MACC PRIVATE
EQUITIES INC., 101 SECOND STREET, S.E., SUITE 800, CEDAR RAPIDS, IOWA 52401.
SUCH REQUESTS MUST SET FORTH A GOOD FAITH REPRESENTATION THAT THE REQUESTING
PARTY WAS EITHER A HOLDER OF RECORD OR A BENEFICIAL OWNER OF COMMON STOCK OF THE
CORPORATION ON DECEMBER 31, 1996. EXHIBITS TO THE FORM 10-K WILL BE MAILED UPON
SIMILAR REQUEST AND PAYMENT OF SPECIFIED FEES.
PLEASE DATE, SIGN AND RETURN THE PROXY AT YOUR EARLIEST CONVENIENCE IN THE
ENCLOSED ENVELOPE. No postage is required for mailing in the United States. A
prompt return of your proxy will be appreciated as it will save the expense of
further mailings and telephone solicitations.
By Order of the Board of Directors
David R. Schroder,
Secretary
Cedar Rapids, Iowa
January 15, 1997
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<PAGE> 21
APPENDIX A
RESOLVED, that the Corporation's Certificate of Incorporation be, and
hereby is, amended by deleting the current "ARTICLE V" thereof, and substituting
the following:
ARTICLE V
AUTHORIZED SHARES
The total number of shares of stock of all classes which the
Corporation shall have authority to issue is four million (4,000,000)
shares of a single class of voting common stock and the par value of
each such share is One Cent ($.01) amounting in the aggregate to Forty
Thousand Dollars ($40,000.00);
<PAGE> 22
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> 23
<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 the 5. To transact such
to increase the number of Corporation at a price which closely approximates market other business as
authorized shares of Common price if such price is less than net asset value per share; may properly come
Stock from 2,000,000 to and 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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