SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-12
MACC PRIVATE EQUITIES INC.
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(Name of Registrant as Specified in Its Charter)
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(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)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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M A C C
========================
PRIVATE EQUITIES INC.
101 SECOND STREET, S.E., SUITE 800
CEDAR RAPIDS, IOWA 52401
January 11, 2002
To the Shareholders of MACC Private Equities Inc:
The Annual Meeting of Shareholders of our Corporation will be held on
Tuesday, February 26, 2002, 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, 2001, 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
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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 26, 2002
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 26, 2002, 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 2005 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 December 31, 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.
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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 26, 2002
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 26, 2002, 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 11, 2002.
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
2005 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.
1
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, 2001, at which time the Corporation had outstanding and entitled to vote at
the meeting 2,329,255 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, 2002, 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.
2
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of November 30, 2001, there were 2,329,255 shares issued and
outstanding. The following table sets forth certain information as of November
30, 2001, 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. The address of the
individuals in the following table is 101 Second Street, S.E., Suite 800, Cedar
Rapids, Iowa 52401, and Zions First National Bank's address is One South Main,
3rd Floor, Salt Lake City, Utah 84111.
NAME OF BENEFICIAL AMOUNT AND NATURE PERCENT OF CLASS OF VOTING
OWNER OF BENEFICIAL OWNERSHIP COMMON STOCK
------------------ ----------------------- --------------------------
Zions First National Bank(1) 802,641 Shares 34.45%
Paul M. Bass 30,000 Shares 1.29%
Robert A. Comey(2) 56,719 Shares 2.44%
Michael W. Dunn 14,270 Shares 0.61%
Jeri J. Harman -- --
Henry T. Madden 25,555 Shares 1.10%
Gordon J. Roth 2,000 Shares 0.09%
David R. Schroder(2) 74,916 Shares 3.22%
Todd J. Stevens(3) -- --
John D. Wolfe 4,512 Shares 0.19%
Kevin F. Mullane 11,264 Shares 0.48%
All Officers and Directors as a 219,236 Shares 9.41%
Group
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(1) Information with respect to Zions First National Bank (the "Bank") is
based upon Zion Bancorporation's Amendment No. 19 to Schedule 13D, dated March
22, 2001, in which Zions Bancorporation 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"), 101 Second Street S.E., Suite 800,
Cedar Rapids, IA 52401, 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 Bancorporation 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.
3
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 1 Directors are
proposed to be elected at the 2002 Annual Meeting of Shareholders to serve until
the 2005 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 2005 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 2002 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 2002 Annual Meeting of shareholders. The names of the
nominees, along with certain information concerning them, are set forth below.
An asterisk (*) indicates those Nominees who are or may be deemed to be
"interested persons," as that term is defined in Section 2(a)(19) of the
Investment Company Act of 1940, of the Corporation, as principals, officers and
directors of the Investment Advisor.
NOMINEES
PAUL M. BASS, JR.
Mr. Bass, age 66, has been Chairman of the Boards of Directors of the
Corporation and of the Corporation's wholly-owned subsidiary, MorAmerica Capital
Corporation ("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 Golden
State Bancorp, Inc. (Chairman of the Compensation and Audit Committees),
Keystone Consolidated Industries (Chairman of the Audit Committee), and Compx
International (member of the Audit Committee). Mr. Bass holds a B.B.A. in
finance from Southern Methodist University.
ROBERT A. COMEY*
Mr. Comey, age 55, 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 InvestAmerica Venture Group, Inc.
("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
4
Capital Fund, L.P. Since 1996, Mr. Comey has also been Executive Vice President,
Treasurer and a Director of InvestAmerica N.D. Management, Inc., which provides
management and investment services to North Dakota Small Business Investment
Company ("NDSBIC"), a private investment partnership based in North Dakota. 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
InvestAmerica Investment Advisors, Inc. (the "Investment Advisor"), the
investment advisor to the Corporation and MorAmerica Capital. 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.
DAVID R. SCHRODER*
Mr. Schroder, age 58, has been President, Secretary and a Director of the
Corporation since 1994. 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 NDSBIC. 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. 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. Mr. Schroder received a B.S.F.S. from
Georgetown University and an M.B.A. from the University of Wisconsin.
OTHER DIRECTORS
The names of the other Directors of the Corporation, whose terms of office
extend beyond the 2002 Shareholders Meeting, along with certain information
concerning them, are set forth below. 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 affiliated persons of the Corporation.
MICHAEL W. DUNN
Mr. Dunn, age 52, has been a Director of the Corporation and MorAmerica
Capital since 1994. Mr. Dunn has also been C.E.O. since 1980 and President and
Director since 1983 of Farmers & Merchants Savings Bank of Manchester, Iowa and
Vice President and Director of Security Savings Bank of Eagle Grove, Iowa. Mr.
Dunn also serves as President and C.E.O. of Dunn Investment Co., a bank holding
company for both banks.
JERI J. HARMAN
Ms. Harman, age 44, has been a Director of the Corporation and MorAmerica
Capital since 1999. Ms. Harman has been a Managing Director of Corporate Finance
for First Security Van Kasper in Los Angeles, California, since 1996, where her
responsibilities include private
5
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, and is a wholly-owned subsidiary of First Security
Corporation, which was subsequently purchased by Wells Fargo Bank of Nebraska,
NA in 2000. 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. Currently, Ms. Harman is a principal and
head of the Los Angeles office of American Capital Strategies in Woodland Hills,
California.
HENRY T. MADDEN
Mr. Madden, age 72, 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 Business
Administration. As Director of the Institute, Mr. Madden advised potential and
new entrepreneurs and taught courses on entrepreneurship in the M.B.A. program.
He retired in December, 2000.
GORDON J. ROTH
Mr. Roth, age 47, has been a Director of the Corporation since 2000.
Beginning in June, 2000, Mr. Roth has been Chief Financial Officer and Executive
Vice President of Roth Capital Partners, LLC (formerly known 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, LLC, Mr. Roth was Chairman of Roth & Company, P.C., a public
accounting firm, in Des Moines, Iowa. Prior to that, Mr. Roth was a partner at
Deloitte & Touche, a public accounting firm, in their Des Moines, Iowa office.
TODD J. STEVENS**
Mr. Stevens, age 42, 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, in
which 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.
6
JOHN D. WOLFE
Mr. Wolfe, age 75, 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 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,
Gordon J. Roth, 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 2003 ANNUAL MEETING." The Nominating
Committee presently consists of Henry T. Madden and Todd J. Stevens.
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, Henry T. Madden, Jeri J. Harman, Gordon J.
Roth, 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, 2001, six
meetings of the Board of Directors were held. In addition, three meetings of the
Audit Committee, no meetings of the Nominating Committee and nine meetings of
the Investment Committee were held. Each
7
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, except that Mr. Bass and Ms. Harman each missed three
Investment Committee meetings.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of MACC Private Equities Inc.
(the "Audit Committee") is composed of three directors and operates under a
written charter originally adopted by the Board of Directors and annually
updated by the Audit Committee. The current members of the Audit Committee are
Michael W. Dunn (Chair), Jeri J. Harman, and Gordon J. Roth. 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. During a portion of
the 2001 fiscal year, Todd J. Stevens also served as a member of the Audit
Committee. 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
experiences in the venture capital industry. However, Mr. Stevens' last meeting
as a member of the Audit Committee was held in December, 2000. He was replaced
on the Audit Committee by Gordon J. Roth.
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 auditing standards generally accepted in the
United States of America 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 2001 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 accounting principles generally
accepted in the United States of America. 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.
The Corporation paid KPMG LLP ("KPMG"), the Corporation's independent
auditors for fiscal year 2001, the following amounts during fiscal year 2001:
8
Audit Fees (including quarterly
reviews and audit of Form 468): $49,750
Financial Information Systems
Design and Implementation Fees: $ -0-
All Other Fees (including income
taxes): $26,425
The Audit Committee has considered whether KPMG has maintained its
independence during fiscal year 2001.
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, 2001, filed with the
Securities and Exchange Commission.
AUDIT COMMITTEE:
Michael W. Dunn, Chair
Jeri J. Harman
Gordon J. Roth
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
9
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 2001, 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.
AGGREGATE COMPENSATION
NAME AND POSITION FROM CORPORATION AND FUND COMPLEX(1)
----------------- ------------------------------------
Paul M. Bass, Jr. $29,000(2)
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 15,500
John D. Wolfe, Director 15,750
Michael W. Dunn, Director 16,250
Jeri J. Harman, Director 15,250
Gordon J. Roth, Director 9,233
Todd J. Stevens, Director 16,000
James T. Miller(3) 10,250
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(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) Mr. Bass earned $31,000, but only $29,000 of this amount was paid, in
fiscal year 2001.
(3) Mr. Miller's term as a director of the Corporation expired in February
2001.
PERFORMANCE GRAPH
The following graph compares the semi-annual percentage change in
cumulative stockholder return on the Common Stock of the Corporation since
September 30, 1996, with the cumulative total return over the same period of (i)
the Nasdaq Stock Market Total Return Index
10
(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 October 1, 1996,
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 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
OF ONE OR MORE COMPANIES, PEER GROUPS,
INDUSTRY INDEXES AND/OR BROAD MARKETS
------------------------------ FISCAL YEAR ENDING -----------------------------
COMPANY/INDEX/MARKET 9/30/1996 9/30/1997 9/30/1998 9/30/1999 9/29/2000 9/28/2001
MACC Private Equit 100.00 102.72 137.24 202.78 182.58 122.61
Customer Selected Stock List 100.00 105.59 105.06 129.08 142.84 141.02
NASDAQ Market Index 100.00 135.92 141.25 228.51 312.59 128.07
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) BENEFICIAL OWNERSHIP 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
11
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 2001, 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 Mr. Roth
filed his Form 3 late.
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 11, 2001, 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, 2002.
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, 2002, 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, 2002.
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 2003 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, 2003 Annual Meeting of Shareholders must be received by the
Secretary of the Corporation, 101
12
Second Street, S.E., Suite 800, Cedar Rapids, Iowa 52401, no later than
September 13, 2002. 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
year's annual meeting. Accordingly, shareholders desiring to submit a proposal
for consideration at the 2003 Annual Meeting must give written notice of the
proposal to the Secretary of the Corporation not earlier than October 13, 2002,
and not later than November 12, 2002. 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. 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, 2001, accompanies this proxy statement, but is not deemed a part of the
proxy soliciting material.
A COPY OF THE FISCAL YEAR 2001 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, 2001. EXHIBITS TO THE FORM 10-K WILL BE MAILED UPON
SIMILAR REQUEST AND PAYMENT OF SPECIFIED FEES.
13
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 11, 2002
14
Please mark your votes as indicated in this example [X]
1. To elect three directors to serve until the 2005 Annual Meeting of
Shareholders or until their respective successors shall be elected and
qualified;
FOR WITHHOLD
all Authority for
Nominees All Nominees
[ ] [ ]
NOMINEES: 01 Paul M. Bass, Jr.; 02 Robert A. Comey; 03 David R. Schroder
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
-------------------------------------------------------------------------------
2. To ratify the appointment of KPMG LLP as independent auditors;
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To transact such other business as may properly come before the meeting and
any adjournment thereof.
I PLAN TO ATTEND
MEETING
[ ]
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Signature Date
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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.
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- FOLD AND DETACH HERE -
MACC PRIVATE EQUITIES INC.
Proxy Solicited on Behalf of the Board of Directors
for
Annual Meeting of Stockholders
February 26, 2002
The undersigned hereby appoints Jeri J. Harman, Henry T. Madden and Todd J.
Stevens 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 December 31, 2001, at the Annual Meeting of Stockholders of the
Corporation to be held on February 26, 2002 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)
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- FOLD AND DETACH HERE -
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