<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:
----- 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 ss.240.14a-11(c) or ss.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 No fee required
-----
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
-----
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------.
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------.
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
----------------------------------------------------------------.
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------.
5) Total fee paid:
-----------------------------.
Fee paid previously with preliminary materials
-----
----- Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
---------------------.
2) Form, Schedule or Registration Statement No.:
----------------.
3) Filing Party:
----------------------------------------.
4) Date Filed:
------------------------------------------.
<PAGE> 2
------------------------
M A C C
========================
PRIVATE EQUITIES INC.
101 SECOND STREET, S.E., SUITE 800
CEDAR RAPIDS, IOWA 52401
January 10, 2001
To the Shareholders of MACC Private Equities Inc:
The Annual Meeting of Shareholders of our Corporation will be held on
Tuesday, February 27, 2001, at 10:00 a.m. at the Crowne Plaza 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,
2000, 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,
/s/ Paul M. Bass, Jr.
Paul M. Bass, Jr.
Chairman of the Board
<PAGE> 3
------------------------
M A C C
========================
PRIVATE EQUITIES INC.
101 SECOND STREET, S.E., SUITE 800
CEDAR RAPIDS, IOWA 52401
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 27, 2001
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 27, 2001, at 10:00 a.m., central time, at the Crowne
Plaza Five Seasons Hotel, 350 First Avenue N.E., in Cedar Rapids, Iowa, for the
following purposes:
1. To elect three directors to serve until the 2004 Annual Meeting of
Shareholders or until their respective successors shall be elected and
qualified;
2. To ratify the appointment of KPMG LLP as independent auditors; and
3. 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 January 2, 2001, will be entitled to notice of, and to vote at,
the meeting and any adjournment thereof.
By Order of the Board of Directors
/s/ David R. Schroder
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
========================
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 27, 2001
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 27, 2001, 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 10, 2001.
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
2004 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 LLP as independent auditors (see
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS); and (3) 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, AND FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS
INDEPENDENT AUDITORS.
<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
January 2, 2001, at which time the Corporation had outstanding and entitled to
vote at the meeting 1,941,879 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 plurality of the shares of Common Stock entitled to vote and
represented at the Annual Meeting. In order to ratify the appointment of KPMG
LLP as independent auditors for the Corporation for the year ending September
30, 2001, 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.
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 and FOR the ratification of the
appointment by the Board of Directors of KPMG LLP as independent auditors. 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.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of October 31, 2000, there were 1,941,879 shares issued and
outstanding. The following table sets forth certain information as of October
31, 2000, 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, ten in number, as a group.
2
<PAGE> 6
NAME OF BENEFICIAL AMOUNT AND NATURE PERCENT OF CLASS OF
OWNER OF BENEFICIAL OWNERSHIP VOTING COMMON STOCK
------------------- ----------------------- -------------------
Zions First National Bank(1) 644,678 Shares 33.20%
Paul M. Bass 24,000 Shares 1.24%
Robert A. Comey(2) 47,266 Shares 2.43%
Michael W. Dunn 11,892 Shares 0.61%
Jeri J. Harman -- --
Henry T. Madden 21,296 Shares 1.10%
James L. Miller 3,044 Shares 0.16%
Gordon J. Roth -- --
David R. Schroder(2) 62,430 Shares 3.21%
Todd J. Stevens(3) -- --
John D. Wolfe 4,296 Shares 0.22%
All Officers and Directors as a 174,224 Shares 8.97%
Group
------------------------------------
(1) Information with respect to Zions First National Bank (the "Bank")
is based upon the Bank's Form 4 with respect to its transactions during October,
2000, as provided to the Corporation. As stated in its Amendment No. 17 to
Schedule 13D, dated August 9, 2000, 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 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 InvestAmerica Investment
Advisors, Inc. (the "Investment Advisor"), the investment advisor for the
Corporation and MorAmerica Capital, 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 Manager of the Bank's Venture Capital Department
and Managing Director of Wasatch Venture Funds, 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.
PROPOSAL 1
ELECTION OF DIRECTORS
The Corporation's Board of Directors is divided into three classes, and
Directors are elected to serve three-year terms. The three Class 3 Directors are
proposed to be elected at the 2001 Annual Meeting of Shareholders to serve until
the 2004 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 2004 Annual Meeting of
Shareholders or until their respective successors shall be elected and
qualified, unless otherwise properly
3
<PAGE> 7
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 2001 Annual Meeting of Shareholders. 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 plurality of the shares of Common Stock entitled to vote and
represented at the 2001 Annual Meeting of shareholders. The names of the
nominees, along with certain information concerning them, are set forth below.
NOMINEES
MICHAEL W. DUNN
Mr. Dunn, age 51, 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.
JERI J. HARMAN
Ms. Harman, age 43, has been a Director of the Corporation and
MorAmerica Capital since 1999. Since May, 2000, Ms. Harman has been a principal
and head of the Los Angeles office of American Capital Strategies, a business
development company headquartered in Bethesda, Maryland. From 1996 to May, 2000,
Ms. Harman was the Managing Director of Corporate Finance for First Security Van
Kasper in Los Angeles, California, where her responsibilities included private
placements of equity, mezzanine and debt securities. First Security Van Kasper
is a regional investment banking firm specializing in serving the needs of
middle market companies. Ms. Harman was Managing Director of the Corporate
Finance Group at Coopers & Lybrand, a public accounting firm, in Los Angeles,
California, from 1993 to 1996. Prior to joining Coopers & Lybrand, Ms. Harman
held various senior level positions, including Senior Vice President, at
Prudential Insurance Company of America, from 1982 to 1993. Ms. Harman is
President and a Director of the Association for Corporate Growth - Los Angeles.
GORDON J. ROTH
Mr. Roth, age 46, has not previously been a Director of the
Corporation. Since June, 2000, Mr. Roth has been Chief Financial Officer and
Executive Vice President of Roth Capital Partners, Inc. (formerly known as
Cruttenden Roth), an independent investment banking firm specializing in
small-cap companies, in Newport Beach, California. For approximately ten years
before joining Roth Capital Partners, Inc., Mr. Roth was Chairman of Roth &
Company, P.C., a public accounting firm, in Des Moines, Iowa. Prior to that, Mr.
Roth was a tax partner at Deloitte & Touche, a public accounting firm, in Des
Moines, Iowa.
4
<PAGE> 8
OTHER DIRECTORS
The names of the other Directors of the Corporation, whose terms of
office extend beyond the 2001 Shareholders Meeting, along with certain
information concerning them, are set forth below. An asterisk (*) indicates
those Directors 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 affiliated persons of the Corporation. A double asterisk
(**) indicates those Directors 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.
PAUL M. BASS, JR.
Mr. Bass, age 65, 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 is also presently a Director of Golden State
Bancorp, Inc. (Chairman of the Compensation and Audit Committees), Keystone
Consolidated Industries (Chairman of the Audit Committee), and Compx
International (member of Audit Committee). Mr. Bass holds a B.B.A. in finance
from Southern Methodist University.
ROBERT A. COMEY**
Mr. Comey, age 54, 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 Corporation 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,
InvestAmerica Venture Group, Inc. ("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.
HENRY T. MADDEN
Mr. Madden, age 71, 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, and since 1997, Mr. Madden has served as an
independent member of the Management Board of Berthel SBIC, LLC, a wholly-owned
subsidiary of Berthel Growth & Income Trust I. In 1986, Mr. Madden organized the
Institute for Entrepreneurial Management in the University of Iowa College of
5
<PAGE> 9
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.
DAVID R. SCHRODER**
Mr. Schroder, age 57, 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 Venture Group and is presently
President, Secretary 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 provides
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, Secretary 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.
TODD J. STEVENS*
Mr. Stevens, age 41, has been a Director of the Corporation and
MorAmerica Capital since 1997. Since 1993, Mr. Stevens has been the Managing
Director of the Wasatch Venture Funds, a $50,000,000 early stage venture capital
fund complex 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 and project finance 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.
JOHN D. WOLFE
Mr. Wolfe, age 74, 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. Following
several years of
6
<PAGE> 10
retirement, Mr. Wolfe returned from retirement to serve as voting trustee and
President and Director of the Debtors during the Debtors' 1993 bankruptcy case.
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, Todd J. Stevens and Jeri J. Harman.
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 2001 ANNUAL MEETING." The Nominating
Committee presently consists of Todd J. Stevens and Henry T. Madden.
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 policies regarding investments made in
participation with other funds managed by the Investment Advisor, with entities
controlling, controlled by or under common control with Zions, and with other
affiliates. The voting members of the Investment Committee presently include
Paul M. Bass, Jr., Michael W. Dunn, Jeri J. Harman, Henry T. Madden, James L.
Miller, and John D. Wolfe, and the nonvoting ex officio members include Robert
A. Comey, David R. Schroder, and Todd J. Stevens.
During the Fiscal Year of the Corporation ended September 30, 2000,
five meetings of the Board of Directors were held. In addition, two meetings of
the Audit Committee, no meetings of the Nominating Committee and eight meetings
of the Investment Committee were held. Each of the Directors attended at least
75% of the meetings of the Board of Directors and at least 75% of the meetings
held by the committees of the Board on which that Director served.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of MACC Private Equities
Inc. (the "Audit Committee") is composed of four directors and operates under a
written charter originally adopted by the Board of Directors and annually
updated by the Audit Committee. The current charter of the Audit Committee is
attached to this Proxy Statement as Appendix "A." The current members of the
Audit Committee are Michael W. Dunn (Chair), Jeri J. Harman, James L.
7
<PAGE> 11
Miller and Todd J. Stevens. Under the terms of the charter and listing standards
of The Nasdaq Stock Market, Inc., all of the Audit Committee members are
considered to be independent, except for Mr. Stevens. Mr. Stevens may not be
considered to be independent because he is an employee of Zions First National
Bank, which may be deemed to be an affiliate of the Corporation as a result of
its ownership of a significant percentage of the issued and outstanding shares
of the Corporation's common stock. The Corporation's Board of Directors
determined that it would be in the best interests of the Corporation and its
shareholders for Mr. Stevens to serve on the Audit Committee notwithstanding
this relationship because of Mr. Stevens' extensive knowledge of financial
matters generally and his significant experience in the venture capital
industry.
Management is responsible for the Corporation's internal controls and
the financial reporting process. The independent accountants are responsible for
performing an independent audit of the Corporation's consolidated financial
statements in accordance with generally accepted auditing standards and to issue
a report thereon. The Audit Committee's responsibility is to monitor and oversee
those processes.
In this regard, the Audit Committee has reviewed and discussed the
audited financial statements for fiscal year 2000 with management and discussed
other matters related to the audit with the independent auditors. Management
represented to the Audit Committee that the Corporation's consolidated financial
statements were prepared in accordance with generally accepted accounting
principles. The Audit Committee discussed with the independent auditors matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees). The independent auditors also provided to
the Audit Committee the written disclosures required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees), and the
Audit Committee discussed with the independent auditors the firm's independence.
Based upon the Audit Committee's discussions with management and the
independent auditors, and the Audit Committee's review of the representations of
management and the report of the independent auditors to the Audit Committee,
the Audit Committee recommended that the Corporation's Board of Directors
include the audited consolidated financial statements in the Corporation's
Annual Report on Form 10-K for the year ended September 30, 2000, filed with the
Securities and Exchange Commission.
AUDIT COMMITTEE:
Michael W. Dunn, Chair
Jeri J. Harman
Todd J. Stevens
James L. Miller
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. The Chairman of the Board receives an
annual retainer of $24,000, and all other outside Directors receive an annual
retainer of $8,000. The Chairman of the Board and all other outside Directors
also receive $1,000 for each Board of Directors meeting attended (whether such
attendance is in person or by telephone) if the meeting is scheduled as an
in-person meeting, and $500 for each Board of Directors meeting attended by
telephone if the meeting is scheduled to be held by teleconference. In addition,
the Chairman of the Board and all other outside Directors receive $500 for each
committee meeting attended (whether such attendance is in person or by
telephone) if the committee meeting is scheduled as an in-person meeting, and
$250 for each committee meeting attended by telephone if the meeting is
scheduled to be held by teleconference The Directors do not receive separate
compensation for serving on the Board of Directors of MorAmerica Capital. The
Corporation also 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, with additional
meetings held as needed on an interim basis.
SUMMARY COMPENSATION TABLE
The following table sets forth certain details of compensation paid to
Directors during Fiscal Year 2000, which includes compensation for serving on
the Boards of Directors of the Corporation, MorAmerica Capital and other wholly
owned subsidiaries of the Corporation. For purposes of the following table, the
Fund Complex (as that term is defined in Item 22(a)(1)(v) of Reg.
ss.240.14a-101) consists solely of the Corporation and MorAmerica Capital. The
Corporation presently maintains no pension or retirement plans for its
Directors.
9
<PAGE> 13
AGGREGATE COMPENSATION
NAME AND POSITION FROM CORPORATION AND FUND COMPLEX(1)
----------------- ----------------------------------
Paul M. Bass, Jr. $29,750
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, Director 13,750
John D. Wolfe, Director 16,750(2)
Michael W. Dunn, Director 14,750
Jeri J. Harman, Director 11,333
James L. Miller, Director 14,750
Todd J. Stevens, Director 14,750
------------------------------------
(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 $16,750 paid to Mr. Wolfe in Fiscal Year 2000, $14,750
represented fees earned by Mr. Wolfe during Fiscal Year 2000, and $2,000
represented fees earned during Fiscal Year 1999 and deferred at Mr. Wolfe's
election.
PERFORMANCE GRAPH
The following graph compares the annual percentage change in cumulative
stockholder return on the Common Stock of the Corporation over the five years
since September 29, 1995, with the cumulative total return over the same period
of (i) the Nasdaq Stock Market Total Return Index (U.S. Companies) and (ii) a
peer group selected in good faith by the Corporation composed of the following
eight business development companies or other funds known by the Corporation to
have similar investment objectives to the Corporation: Allied Capital
Corporation (ALLC), American Capital Strategies (ACAS), Brantley Capital
Corporation (BBDC), Capital Southwest Corporation (CSWC), Harris & Harris Group,
Inc. (HHGP), Rand Capital Corporation (RAND), Waterside Capital Corporation
(WSCC) and Winfield Capital Corporation (WCAP) (the "Peer Group").
In the graph, the comparison assumes $100 was invested on September 29,
1995, in shares of the Corporation's Common Stock and in each of the indices.
The comparison is based upon the closing market bid price for shares of the
Corporation's Common Stock, and assumes
10
<PAGE> 14
the reinvestment of all dividends, if any. The returns of each of the companies
in the Peer Group are weighted according to the respective company's stock
market capitalization at the beginning of each period for which a return is
indicated.
MACC PRIVATE EQUITIES INC.
COMPARISON CUMULATIVE TOTAL RETURNS
COMPARISON OF CUMULATIVE TOTAL RETURN OF ONE OR MORE COMPANIES, PEER GROUPS,
INDUSTRY INDEXES AND/OR BROAD MARKETS
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMPANY/INDEX/MARKET 9/29/1995 9/30/1996 9/30/1997 9/30/1998 9/30/1999 9/29/2000
MACC Private Equities 100.00 140.68 144.51 193.06 285.26 256.85
Peer Group Index 100.00 128.51 136.04 134.79 160.29 180.15
NASDAQ Market Index 100.00 116.75 158.69 164.91 266.79 364.95
</TABLE>
[LINE GRAPH APPEARS HERE]
See attached data points
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
2000, 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 Ms. Harman filed late the Form 3 required
upon being named to the Corporation's Board of Directors.
11
<PAGE> 15
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR THE ELECTION AS DIRECTORS OF THE PERSONS NAMED UNDER "ELECTION OF
DIRECTORS--NOMINEES."
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
As recommended by the Audit Committee of the Corporation's Board of
Directors, on December 12, 2000, 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 LLP to serve as the Corporation's independent
auditors for the Fiscal Year ending September 30, 2001.
The appointment of KPMG LLP as independent auditors is subject to
ratification by the shareholders. If the shareholders ratify the selection of
KPMG LLP as the Corporation's auditors, they will also serve as independent
auditors for all subsidiaries of the Corporation. A representative of KPMG 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 LLP as independent auditors
for the Corporation for the year ending September 30, 2001, 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 LLP AS THE INDEPENDENT AUDITORS FOR THE
CORPORATION FOR THE YEAR ENDING SEPTEMBER 30, 2001.
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 2002 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, 2002 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 12, 2001. 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 date on which the corporation first mailed its proxy materials for the prior
12
<PAGE> 16
year's annual meeting. Accordingly, shareholders desiring to submit a proposal
for consideration at the 2002 Annual Meeting must give written notice of the
proposal to the Secretary of the Corporation not earlier than October 12, 2001,
and not later than November 11, 2001. The Corporation's proxies will have
discretionary authority to vote with respect to any shareholder proposal that
may be presented at an Annual Meeting which does not comply with these notice
requirements. 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 $4,000 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, 2000, accompanies this proxy statement, but is not deemed a part
of the proxy soliciting material.
A COPY OF THE FISCAL YEAR 2000 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 JANUARY 2, 2001. 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
/s/ David R. Schroder
David R. Schroder,
Secretary
Cedar Rapids, Iowa
January 10, 2001
13
<PAGE> 17
APPENDIX "A"
MACC PRIVATE EQUITIES INC.
MORAMERICA CAPITAL CORPORATION
AUDIT COMMITTEE CHARTER
I. ORGANIZATION
There shall be a committee of the Board of Directors to be known as the
Audit Committee. The Audit Committee shall consist of three or more
directors, as determined by the Board of Directors, each of whom shall
not be an officer or employee of the Company but shall be independent
of the management of the Company and free of any relationship that, in
the opinion of the Board of Directors, would interfere with their
exercise of independent judgment as a committee member. Notwithstanding
the foregoing, if and to the extent permitted under the applicable
rules of The Nasdaq Stock Market, Inc., one director who is not deemed
to be independent may be appointed to the Audit Committee.
A. Definition of Independence
The following persons are not considered independent:
(1) a director who is employed by the Company or any of its affiliates
for the current year or any of the past three years;
(2) a director who accepts compensation from the Company or any of its
affiliates in excess of $60,000 during the previous fiscal year,
other than compensation for board service, benefits under a
tax-qualified retirement plan, or non-discretionary compensation;
(3) a director who is a member of the immediate family of an
individual who is, or has been in any of the past three years,
employed by the Company or any of its affiliates as an executive
officer. Immediate family includes a person's spouse, parents,
children, siblings, mother-in-law, father-in-law, brother-in-law,
sister-in-law, son-in-law, daughter-in-law, and anyone who resides
in such person's home;
(4) a director who is a partner in, or a controlling stockholder or an
executive officer of, any for-profit business organization to
which the Company made, or from which the Company received,
payments (other than those arising solely from investments in the
Company's securities) that exceed 5% of the Company's or business
organization's consolidated gross revenues for that year, or
$200,000, whichever is more, in any of the past three years; or
(5) a director who is employed as an executive of another entity where
any of the Company's executives serve on that entity's
compensation committee.
A-1
<PAGE> 18
All members of the Audit Committee shall be able to read and understand
fundamental financial statements, including a company's balance sheet,
income statement, and cash flow statement or will become able to do so
within a reasonable time after their appointment to the Audit
Committee, and at least one member of the Audit Committee shall have
past employment experience in finance or accounting, requisite
professional certification in accounting, or any other comparable
experience or background which results in the individual's financial
sophistication, including having been a chief executive officer, chief
financial officer or other senior officer with financial oversight
responsibilities.
The members of the Audit Committee shall be elected by the Board of
Directors at the annual meeting of the Board of Directors to serve a
term of one year or until their successors shall be duly elected and
qualified. The Board of Directors will appoint a Chair to preside at
the Audit Committee meetings and schedule meetings as appropriate.
II. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing the
financial reports and other financial information provided by the
Company to any governmental body or the public; the Company's systems
of internal controls regarding finance, accounting, legal compliance
and ethics that management and the Board of Directors has established;
and the Company's auditing, accounting and financial reporting
processes generally. Consistent with this function, the Audit Committee
should encourage continuous improvement of, and should foster
compliance with, the Company's policies, procedures and practices at
all levels. The Audit Committee's primary duties and responsibilities
are as follows:
. To serve as an independent and objective party to monitor the
Company's financial reporting process and internal control system.
. To review and appraise the audit efforts of the Company's
independent auditors and management of the Company.
. To provide an open avenue of communication among the independent
auditors, financial and senior management, and the Board of
Directors.
The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV of this Charter.
III. MEETINGS
The Audit Committee shall meet regularly as determined by the members
of the Audit Committee or as directed by the Board of Directors. The
Chair of the Audit Committee shall prepare or approve an agenda in
advance of each meeting. The President, Chief Financial Officer,
outside legal counsel, and a representative from the independent
auditors may be invited to all meetings. Other management may be
invited as necessary.
A-2
<PAGE> 19
Non-committee members may be excused from attendance at any meeting or
portion of any meeting by the Chair.
As part of its job to foster open communication, the Audit Committee
should meet at least annually with management and the independent
auditors in separate executive sessions to discuss any matter that the
Audit Committee or each of these groups believes should be discussed
privately. In addition, the Audit Committee or its Chair should meet
with the independent auditors and management quarterly to review the
Company's financial statements and significant findings based upon the
auditor's limited review procedures.
IV. RESPONSIBILITIES
To fulfill its duties and responsibilities the Audit Committee shall:
Review Procedures
1. Review and reassess the adequacy of this Charter at least
annually.
2. Review the Company's audited financial statements prior to the
release of year-end earnings and/or the Company's financial
statement and prior to filing the Company's Annual Report on Form
10-K.
3. Review the Company's quarterly financial results prior to the
release of quarterly earnings and/or the Company's financial
statement and prior to filing the Company's Quarterly Report on
Form 10-Q.
4. Review, as appropriate, any other material financial information
submitted to any governmental or public body, including any
certification, report, opinion, or review rendered by the
independent auditors.
Independent Auditors
5. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors, as representatives of the
Company's stockholders. The Audit Committee and the Board of
Directors have the ultimate authority and responsibility to
select, evaluate and, where appropriate, replace the independent
auditors (or to nominate the independent auditors to be proposed
for stockholder approval in any proxy statement).
6. Ensure receipt from the independent auditors of a formal written
statement delineating all relationships between the auditor and
the Company, consistent with Independence Standards Board Standard
No. 1.
7. Actively engage in dialogue with the independent auditors and
legal counsel with respect to any disclosed relationships or
services that may impact the objectivity and independence of the
independent auditors.
A-3
<PAGE> 20
8. Take, or recommend that the full Board of Directors take,
appropriate action to oversee the independence of the independent
auditors.
9. Approve, where appropriate, fees and other significant
compensation to be paid to the independent auditors.
10. Meet with the independent auditors to review the scope of the
proposed audit for the current year, the audit procedures to be
utilized, the location, reliance on management, and staffing for
the audit.
11. Following each audit by the independent auditors, obtain from the
independent auditors assurance that Section 10A of the Securities
Exchange Act of 1934, as amended, has not been implicated.
12. In connection with the Company's year-end financials, discuss with
financial management and the independent auditors significant
issues regarding accounting principles, practices and judgments
and any items required to be communicated by the independent
auditors in accordance with Statement on Accounting Standards No.
61.
13. In connection with the Company's interim financials, discuss with
financial management and independent auditors any significant
changes to the Company's accounting principles and any items
required to be communicated by the independent auditors in
accordance with Statement on Accounting Standards No. 71. The
Chair of the Audit Committee may represent the entire Audit
Committee for purposes of the quarterly review and communication.
14. Consider and approve, if appropriate, significant changes to the
Company's auditing and accounting principles and practices as
suggested by the independent auditors or management.
Improvement Process
15. Meet periodically with management to review the Company's major
financial risk exposure and the steps management has taken to
monitor and control such exposures.
Proxy Statement
16. Approve the report of the Audit Committee required by the rules of
the SEC to be included in the Company's annual proxy statement.
17. Oversee the publication of this Charter at least every three years
in the Company's annual proxy statement in accordance with SEC
regulations.
A-4
<PAGE> 21
Ethical Compliance
18. Establish, review and update periodically the Company's Policy
Against Insider Trading and Prohibited Transactions (the "Insider
Trading Policy"). The effectiveness of the Insider Trading Policy
shall be reviewed annually by the Audit Committee, with a report
thereafter by the Audit Committee to the Board of Directors. The
report shall include any recommendations for proposed changes to
the Insider Trading Policy which the Audit Committee believes are
reasonably necessary to prevent fraudulent, deceptive, misleading
or manipulative acts by "Access Persons" as that term is defined
in the Insider Trading Policy.
19. Review management's monitoring of the Company's compliance with
the Insider Trading Policy or any other potential conflict of
interest situations arising in respect of the Company's affairs
and involving the Company's investment adviser, affiliates and
employees.
Miscellaneous
20. Review with the Company's general counsel legal matters that may
have a material impact on the financial statements, the Company's
compliance policies related to financial matters or the Insider
Trading Policy and any material reports or inquiries related to
financial matters that are received from regulators or
governmental agencies.
21. At each meeting of the Audit Committee, the Audit Committee shall
review all invoices for payment of fees and expenses to the
Company's investment adviser together with any related records
requested by the Audit Committee from time to time.
22. The Audit Committee shall oversee the maintenance of investments
in compliance with Section 17(f) of the Investment Company Act of
1940, as amended. The Chair shall have the responsibility to
review the documentation required in connection with the deposit
or withdrawal of the Company's securities or similar investments
by persons authorized by the Board of Directors to have access to
such securities.
23. The Audit Committee is authorized to review, from time to time, in
the Committee's discretion, electronic data processing procedures
and controls, policies and procedures regarding expenses and use
of corporate assets.
24. Periodically conduct a self-assessment of the Audit Committee's
performance.
25. Perform any other activities consistent with this Charter, the
Company's Bylaws and governing law, as the Audit Committee or the
Board of Directors deems necessary or appropriate.
26. While the Audit Committee has the responsibilities and powers set
forth in this Charter, it is not the duty of the Audit Committee
to plan or conduct audits or to
A-5
<PAGE> 22
determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the
independent auditors. Nor is it the duty of the Audit Committee to
assure compliance with laws and regulations and the Insider
Trading Policy.
As amended on December 12, 2000
A-6
<PAGE> 23
MACC PRIVATE EQUITIES INC.
Proxy Solicited on Behalf of the Board of Directors
for
Annual Meeting of Stockholders
February 27, 2001
The undersigned hereby appoints Paul M. Bass, Jr., David R. Schroder and
Robert A. Comey 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 "Corporation") held of record by
the undersigned on January 2, 2001, at the Annual Meeting of Stockholders of
the Corporation to be held on February 27, 2001 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 item 2. The proxies, in their
discretion, are further authorized to vote (a) on matters which the Board of
Directors did not know would be presented at the Annual Meeting within the time
period specified in the Corporation's bylaws; and (b) on other matters which may
properly come before the Annual Meeting and any adjournments or postponements
thereof.
(continued, and to be signed on reverse side)
--------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE> 24
Please mark _____
your vote as
indicated in X
this sample _____
1. To elect three directors to serve until the 2004 Annual Meeting of
Shareholders or until their respective successors shall be elected and
qualified;
<TABLE>
<CAPTION>
<S> <C>
FOR WITHHOLD NOMINEES: Michael W. Dunn; Jeri J. Harman; Gordon J. Roth
all authority for
Nominees All Nominees (INSTRUCTION: To withhold authority to vote for any individual nominee, write that
nominee's name on the space provided below.)
_____ _____
_____ _____ ------------------------------------------------------------------------------------
3. To transact such other business as may properly come before the meeting and any
2. To ratify the appointment of KPMG adjournment thereof.
LLP as independent auditors;
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>
--------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
