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-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)
|_| 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:_______________________.
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January 23, 2006
To the Shareholders of MACC Private Equities Inc.:
The Annual Meeting of Shareholders of our Corporation will be held on
February 28, 2006, at 10:00 a.m. Central Standard Time at the Grand Hyatt DFW,
2337 South International Parkway, DFW Airport, Texas 75261.
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, 2005, 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.
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Very truly yours,
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Geoffrey T. Woolley
Chairman of the Board |
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 28, 2006
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 February 28, 2006, at 10:00 a.m. Central Standard Time at the Grand Hyatt
DFW, 2337 South International Parkway, DFW Airport, Texas 75261, for the
following purposes:
1. To elect five directors to serve until the 2007 Annual Shareholders
Meeting or until their respective successors shall be elected and qualified;
2. To ratify the appointment of KPMG LLP as independent auditors of the
Corporation for fiscal year 2006; 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 13, 2006, will be entitled to notice of, and to vote at, the
meeting and any adjournment thereof.
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By Order of the Board of Directors
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David R. Schroder, Secretary
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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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PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 28, 2006
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 February 28, 2006, or any adjournment thereof (the
"2006 Annual Meeting"). 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 23, 2006.
PURPOSES OF THE MEETING
The 2006 Annual Meeting is to be held for the purposes of:
(1) electing five persons to serve as Directors of the Corporation to serve
until the 2007 Annual Shareholders Meeting or until their respective successors
shall be elected and qualified;
(2) ratifying the appointment by the Board of Directors of KPMG LLP as
independent auditors of the Corporation for fiscal year 2006; 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.
VOTING AT THE MEETING
The record date for holders of Common Stock entitled to notice of, and to
vote at, the 2006 Annual Meeting is the close of business on January 13, 2006
(the "Record Date"). As of the Record Date, the Corporation had outstanding and
entitled to vote at the 2006 Annual Meeting 2,464,621 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 2006 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 2006 Annual Meeting are included in determining the presence of a quorum for
the transaction of business at the commencement of the 2006 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.
1
To be elected a Director, each nominee under PROPOSAL 1 must receive the
favorable vote of the holders of a plurality of the shares of Common Stock
entitled to vote and represented at the 2006 Annual Meeting.
In order to ratify the appointment of KPMG LLP as independent auditors for
the Corporation for the fiscal year ending September 30, 2006 under PROPOSAL 2,
this proposal must receive the favorable vote of a majority of the outstanding
shares of Common Stock entitled to vote at the 2006 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--NOMINEES, 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 the Corporation's
management nor the Board of Directors 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 at the meeting 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.
PROPOSAL 1
ELECTION OF DIRECTORS
All Director nominees elected at the 2006 Annual Meeting will serve until
the 2007 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 next 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 in voting the
shares represented by them at the 2006 Annual Meeting. The Board of Directors
has no reason to doubt the availability of any of the nominees and no reason to
believe that any of the nominees will be unable or unwilling to serve the entire
term for which election is sought.
At their December 16, 2005 meeting, the Board approved revision of the
Corporation's Amended and Restated Bylaws to provide that the Corporation will
have five directors beginning with the 2006 Annual Meeting. Therefore, the
shareholders will only elect five directors at the 2006 Annual Meeting, and Mr.
Paul Bass and Mr. Martin Walton will not seek re-election at the 2006 Annual
Meeting. The Corporation's Amended and Restated Bylaws will take effect
following the 2006 Annual Meeting.
Proxies may not be voted for more than the five Director nominees set forth
below. 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 2006 Annual Meeting. The names of the nominees, along with
certain information concerning them, are set forth below.
2
Nominees
In the chart below, "Interested Directors" indicate those persons who are
"interested persons," as that term is defined in Section 2(a)(19) of the
Investment Company Act, of the Corporation, as affiliated persons of the
Corporation. In contrast, "Independent Directors" are not "interested persons."
The address for all Director nominees is 101 Second Street SE, Suite 800, Cedar
Rapids, Iowa 52401. All Director nominees also serve as Directors of MorAmerica
Capital Corporation ("MorAmerica"), the Corporation's wholly-owned subsidiary.
Interested Directors
Number of
Portfolios
Name Position(s) Term of in Fund Other
and Age Held with Office and Principal Occupation(s) Complex Directorships
the Length of During Past 5 Years Overseen by Held by
Corporation Time Served Nominee (1) Nominee (2)
Benjamin Director Since President, Strategic Planning Group, Charoen One None
Jiaravanon, February, Pokphand Indonesia (agribusiness
35 (3) 2004 conglomerate with sales in excess of $1.5
billion), since 2002; Associate, Direct
Investments Group, Merrill Lynch, 1996 -
2002. Mr. Jiaravanon received his Bachelor
of Science degree in industrial management
from Carnegie Mellon University.
Goeffrey T. Director Director Executive Chairman, European Venture One None
Woolley, and since Partners (founded in 1997 by Mr. Woolley to
46 (4) Chairman 2003, introduce "venture leasing," an asset-backed
of the elected debt instrument with equity participation to
Board Chairman the European and Israeli markets); director,
April, 2004 Dominion Ventures, Inc.; director, BH
Thermal Corp.; director, University
Opportunity Fund; director, Utah Capital
Investment Corporation; Chairman of the
board: MorAmerica, Hild Assets, Ltd. and
Unitus Equity Fund. Mr. Woolley holds an
M.B.A. from the University of Utah and a
B.S. in Business Management with a Minor in
Economics from Brigham Young University.
(1) As the Corporation conducts all of its investments through MorAmerica, the
Corporation and MorAmerica are deemed one "fund."
(2) "Other Directorships" indicate other U.S. publicly-traded companies.
(3) To the extent that Bridgewater International Group, LLC ("Bridgewater") may
be deemed to be in control of the Corporation as a result of its beneficial
ownership of the Corporation's Common Stock, Mr. Jiaravanon, as the sole manager
of Bridgewater, may be an "interested person" of the Corporation, as that term
is defined in Section 2(a)(19) of the Investment Company Act.
(4) Mr. Woolley, as a former Voting Managing Director of Atlas Management
Partners, LLC, the Company's former investment adviser, may be an "interested
person" of the Corporation, as that term is defined in Section 2(a)(19) of the
Investment Company Act.
3
Independent Directors
Term of Number of
Office Portfolios
Name Position(s) and in Fund Other
and Age Held with Length of Principal Occupation(s) Complex Directorships
the Time During Past 5 Years Overseen by Held by
Corporation Served Nominee (1) Nominee (2)
Gordon J. Director Since 2000 CFO and Executive Vice President, Roth Capital One None
Roth, Partners, LLC (independent investment banking
51 firm specializing in small-cap companies),
2000-present; Chairman, Roth & Company, P.C.
(public accounting firm located in Des Moines,
Iowa), 1990-2000. Prior to that, Mr. Roth was
a partner at Deloitte & Touche, a public
accounting firm, in Des Moines.
Jasja Director Since Director of Business Development, Avon One None
Kotterman, February, Products, 2004-present; Vice President,
36 2004 Strategic Planning and Business Development
for Primedia Inc. (diversified media company),
2003-2004; Managing Director, Primedia
International (the international development
group for Primedia), 2000-2003. Ms. Kotterman
holds an M.B.A. from the Wharton School, an
M.A. in International Studies from the
University of Pennsylvania, and is a graduate
of Cambridge University in England, where she
received an M.A. in Genetics and an M.Phil. in
International Development.
Michael W. Director Since 1994 Director, MorAmerica since 1994; C.E.O. (since One None
Dunn, 1980), President and Director (since 1983),
56 Farmers & Merchants Savings Bank of
Manchester, Iowa; Vice President and Director,
Security Savings Bank of Eagle Grove, Iowa;
President and CEO, Dunn Investment Co. (bank
holding company).
(1) As the Corporation conducts all of its investments through MorAmerica, the
Corporation and MorAmerica are deemed one "fund."
(2) "Other Directorships" indicate other U.S. publicly-traded companies.
Corporation Stock Ownership of Director Nominees
The following table represents, as of December 30, 2005, the dollar range
value of equity securities beneficially owned (as that term is defined in Rule
16a-1(a)(2) of the Exchange Act) by each nominee for Director of the Corporation
pursuant to this PROPOSAL 1. In the table, "Interested Directors" indicate those
persons who are "interested persons," as that term is defined in Section
2(a)(19) of the Investment Company Act, of the Corporation, as affiliated
persons of the Corporation. In contrast, "Independent Directors" are not
"interested persons."
4
AGGREGATE DOLLAR RANGE†
NAME OF INDEPENDENT DOLLAR RANGE OF EQUITY SECURITIES IN ALL
DIRECTOR OF EQUITY SECURITIES FUNDS IN CORPORATION
NOMINEE IN THE CORPORATION COMPLEX
Michael W. Dunn $50,001 - $100,000 $50,001 - $100,000
Gordon J. Roth $10,001 - $50,000 $10,001 - $50,000
Jasja Kotterman $1 - $10,000 $1 - $10,000
AGGREGATE DOLLAR RANGE†
NAME OF INTERESTED DOLLAR RANGE OF EQUITY SECURITIES IN ALL
DIRECTOR OF EQUITY SECURITIES FUNDS IN CORPORATION
NOMINEE IN THE CORPORATION COMPLEX
Geoffrey T. Woolley Over $100,000 Over $100,000
Benjamin Jiaravanon Over $100,000 Over $100,000
------------------------------------
† There are no other funds in the Corporation's complex.
Director Nominee Interests in Affiliates of the Corporation
Mr. Woolley, a Director nominee and Chairman of the boards of directors of
both the Corporation and of MorAmerica, was formerly a Voting Managing Director
of Atlas Management Partners, LLC ("Atlas"). Atlas served as the investment
adviser to the Corporation and to MorAmerica from March 1, 2004 through April
29, 2005 pursuant to Investment Advisory Agreements dated March 1, 2004 (the
"Atlas MACC Advisory Agreement" and the "Atlas MorAmerica Advisory Agreement").
Mr. Woolley no longer holds any interests in Atlas.
The Atlas MACC Advisory Agreement provided that Atlas was to receive a
management fee equal to an annual rate of 2.5% of the Assets Under Management
(as defined in the Atlas MACC Advisory Agreement), payable in arrears. In
addition to the annual management fee of 2.5% of the Assets Under Management,
Atlas was to receive an incentive fee (the "Atlas Incentive fee") in an amount
equal to 20.0% of the Corporation's net capital gains (as defined in the Atlas
MACC Advisory Agreement), before taxes. Total management fees under the Atlas
MACC Advisory Agreement amounted to $395 for the year ended September 30, 2005.
There were no Atlas Incentive fees accrued or paid under the Atlas MACC Advisory
Agreement in 2005.
The Atlas MorAmerica Advisory Agreement provided that Atlas was to receive
a management fee equal to an annual rate of 2.5% of the Assets Under Management
(as defined in the Atlas MorAmerica Advisory Agreement), payable in arrears. In
addition to the annual management fee of 2.5% of the Assets Under Management,
Atlas was to receive an incentive fee (the "Atlas MorAmerica Incentive fee") in
an amount equal to 20.0% of MorAmerica's net capital gains (as defined in the
Atlas MorAmerica Advisory Agreement), before taxes. Total management fees under
the Atlas MorAmerica Advisory Agreement amounted to $458,858 for the year ended
September 30, 2005. There were no Atlas MorAmerica Incentive fees accrued or
paid under the Atlas MorAmerica Advisory Agreement in 2005.
As previously reported, Mr. Woolley entered into an Amended and Restated
Convertible Note and Security Agreement with the Corporation on July 20, 2005,
pursuant to which Mr. Woolley subsequently elected to convert all debt owed by
the Corporation to Mr. Woolley into 135,366 shares of the Corporation's Common
Stock.
5
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR THE ELECTION AS DIRECTORS OF THE PERSONS NAMED UNDER "ELECTION OF
DIRECTORS--NOMINEES" TO THEIR RESPECTIVE TERMS.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
As recommended by the Audit Committee of the Corporation's Board of
Directors, on December 16, 2005, 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) voted in favor of
the appointment of KPMG LLP to serve as the Corporation's independent auditors
for the fiscal year ending September 30, 2006.
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 MorAmerica. A representative of KPMG LLP is expected to be present
at the 2006 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 fiscal year ending September 30, 2006, the proposal must
receive the favorable vote of a majority of the shares entitled to vote and
represented at the 2006 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 FISCAL YEAR ENDING SEPTEMBER 30, 2006.
OTHER BUSINESS
The Board of Directors knows of no other business to be presented for
action at the 2006 Annual Meeting. If any matters do come before the 2006 Annual
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 2006 Annual Meeting.
ADDITIONAL INFORMATION
Section 16(a) Beneficial Ownership Reporting Compliance
Pursuant to Section 16(a) of the Exchange Act, 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 SEC. 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
2005, 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 ("SEC").
6
Common Stock Ownership
As of December 30, 2005, there were 2,464,621 shares issued and
outstanding. The following table sets forth certain information as of December
30, 2005, 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, as amended (the "Exchange Act") 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, eleven in
number, as a group. Unless otherwise provided, the address of those in the
following table is 101 Second Street S.E., Suite 800, Cedar Rapids IA 52401.
Name and Address of Amount and Nature Percent of Class of
Beneficial Owner Of Beneficial Ownership Voting Common Stock
Atlas Management Partners, LLC(1) 804, 689 Shares 32.65%
One South Main Street, Suite 1660, Salt Lake
City, Utah 84133
Bridgewater International Group, LLC(1) 804,689 Shares 32.65%
10500 South 1300 West, South Jordan, Utah
84095
Timothy A. Bridgewater(1) 809,689 Shares 32.85%
10500 South 1300 West
South Jordan, Utah 84095
Jasja Kotterman 1,000 Shares .04%
Michael W. Dunn 32,984 Shares 1.34%
Benjamin Jiaravanon(2) 804,689 Shares 32.65%
Ancol Barat, J1 Ancol VIII, No.1
Jakarta 14430 Indonesia
Gordon J. Roth 5,151 Shares 0.21%
David R. Schroder(3) 77,416 Shares 3.32%
Kevin F. Mullane(3) 11,264 Shares 0.48%
Robert A. Comey(3) 57,019 Shares 2.4%
Martin C. Walton 0 Shares 0.00%
Paul M. Bass 37,000 Shares 1.50%
Michael Reynoldson(3) 0 Shares 0.00%
Geoffrey T. Woolley(4) 151,314 Shares 6.14%
All Officers and Directors as a Group 1,182,837 Shares 48%
------------------------------------
7
(1) Information with respect to Atlas Management Partners, LLC ("Atlas"),
Bridgewater International Group, LLC ("BIG") and Mr. Bridgewater is based upon
Amendment No. 4 to Schedule 13D, dated April 30, 2005, filed by Atlas, BIG and
others with the SEC in which Atlas disclosed that its has sole power to vote or
to direct the vote and shared power to dispose or to direct the disposition of
804,689 shares of the Company's Common Stock previously acquired by BIG under a
Shareholder and Voting Agreement entered into between Atlas and BIG (the
"Shareholder Agreement"). Pursuant to the Shareholder Agreement, BIG retains
beneficial ownership and dispositive power of the 804,689 shares. As a voting
Managing Director of Atlas, Mr. Bridgewater has shared control over the voting
power held by Atlas of 804,689 shares, subject to Atlas's rights under the
Shareholder Agreement. Mr. Bridgewater also individually owns 5,000 shares of
stock.
(2) Information with respect to Mr. Jiaravanon is based upon Amendment No.
4 to Schedule 13D, dated April 30, 2005, filed by Atlas, BIG and others with the
SEC. As the sole manager of BIG, Mr. Jiaravanon has shared control over the
voting power of Atlas on the 804,689 shares of the Company's Common Stock Atlas
jointly controls with BIG pursuant to the Shareholder Agreement. To the extent
that BIG may be deemed to be in control of the Corporation as a result of
beneficial ownership of the Company's Common Stock, Mr. Jiaravanon, as the sole
manager of BIG, may be an "interested person" of the Company, as that term is
defined in Section 2(a)(19) of the Investment Company Act.
(3) As principals, officers and directors of InvestAmerica Investment
Advisors, Inc. ("InvestAmerica"), the investment advisor for the Corporation and
MorAmerica, Messrs. Schroder, Mullane, Comey and Reynoldson are "interested
persons" of the Corporation, as that term is defined in Section 2(a)(19) of the
Investment Company Act.
(4) As a former Voting Managing Director of Atlas, the former investment
advisor for the Corporation and MorAmerica, Mr. Woolley is an "interested
person" of the Corporation, as that term is defined in Section 2(a)(19) of the
Investment Company Act. As of April 30, 2005, Mr. Woolley is no longer a Voting
Managing Director of Atlas.
Investment Adviser & Certain Business Relationships
InvestAmerica is the investment advisor to the Corporation pursuant to an
Investment Advisory Agreement between the Corporation and InvestAmerica dated
July 21, 2005 (the "MACC Advisory Agreement"). The address of InvestAmerica is
101 Second Street S.E., Suite 800, Cedar Rapids IA 52401. The MACC Advisory
Agreement provides that InvestAmerica is entitled to receive a management fee
equal to an annual rate of 1.5% of the Assets Under Management (as defined in
the MACC Advisory Agreement), payable monthly in arrears. In addition to the
annual management fee of 1.5% of the Assets Under Management, InvestAmerica is
entitled to receive an incentive fee (the "Incentive fee") in an amount equal to
13.4% of the Corporation's realized capital gains in excess of realized capital
losses of the Corporation after allowance for any unrealized capital losses on
the portfolio investments of the Corporation. The Incentive fee is calculated,
accrued, and paid on a quarterly basis, subject to adjustment at the end of each
fiscal year. Total management fees under the MACC Advisory Agreement amounted to
$241 for the year ended September 30, 2005. There were no Incentive fees accrued
or paid under the MACC Advisory Agreement in 2005.
MorAmerica has a separate investment advisory agreement (the "MorAmerica
Advisory Agreement") with InvestAmerica dated July 21, 2005. MorAmerica pays
InvestAmerica, monthly in arrears, a management fee equal to the lesser of 1.5%
per annum of the (i) Combined Capital (as defined under the SBA Regulations) or
(ii) Assets Under Management (as defined in the MorAmerica Advisory Agreement.
These fees are not based upon any of the Corporation's assets managed by
InvestAmerica under the MACC Advisory Agreement. In addition, the MorAmerica
Advisory Agreement provides that MorAmerica will pay InvestAmerica an incentive
fee in an amount equal to 13.4% of the net capital gains, before taxes. Net
capital gains, as defined in the MorAmerica Advisory Agreement, are calculated
as gross realized gains, minus the sum of capital losses, less any unrealized
depreciation, including reversals of previously recorded unrealized
depreciation, recorded during the year, and net investment losses, if any.
Capital losses and realized capital gains are not cumulative under the incentive
fee computation. Payments for incentive fees resulting from noncash gains are
deferred until the assets are sold. Total management
8
fees (net of management fees waived) under the MorAmerica Advisory Agreement
amounted to $241,517 for the year ended September 30, 2005. Incentive fees
earned and paid for the year ended September 30, 2005 under the MorAmerica
Advisory Agreement amounted to $566,426 and $16,577, respectively. Included in
the incentive fees earned of $566,426 are approximately $94,882 of incentive
fees related to noncash gains which are being deferred.
As a condition to the SBA's approval of the MorAmerica Advisory Agreement,
the SBA has required that MorAmerica enter into a subordination agreement among
it, the SBA and InvestAmerica (the "Subordination Agreement") providing that
MorAmerica's payment to InvestAmerica, and InvestAmerica's receipt of, incentive
fees under the MorAmerica Advisory Agreement be subordinated to MorAmerica's
repayment of all obligations owing to the SBA. Those obligations include the
repayment of all outstanding SBA debentures and MorAmerica's agreement, along
with other SBA licensees, to reimburse the SBA for any losses the SBA may incur
in connection with the settlement of an arbitration proceeding which was
concluded in late 2004 (collectively, the "Obligations"). MorAmerica expects
that the proposed Subordination Agreement will provide that: (i) MorAmerica will
not pay InvestAmerica incentive fees under the MorAmerica Advisory Agreement
unless and until MorAmerica's Obligations to the SBA are satisfied, and (ii) to
the extent (A) incentive fees have been escrowed under the MorAmerica Advisory
Agreement because MorAmerica's capital has been impaired as provided in Section
5.2(c)(ii) of the MorAmerica Advisory Agreement, and (B) MorAmerica is
delinquent in repaying the SBA any amounts respecting SBA debentures, the SBA
may require MorAmerica to pay any so escrowed funds to the SBA to satisfy any
arrearage respecting SBA debentures. The Subordination Agreement will not,
however, affect: (i) InvestAmerica's ability to earn incentive fees under the
MorAmerica Advisory Agreement, (ii) MorAmerica's payment to InvestAmerica of
management fees under the MorAmerica Advisory Agreement, or (iii) any other
terms of the MorAmerica Advisory Agreement. Upon receiving verbal assurance that
the SBA has approved the terms of the proposed Subordination Agreement,
MorAmerica has executed the Subordination Agreement and has sent it to the SBA
for final approval and execution.
Mr. David Schroder, President and Secretary of the Corporation and
MorAmerica, is a shareholder of, Director, President and Secretary of
InvestAmerica. Mr. Robert A. Comey, Executive Vice President, Chief Financial
Officer, Treasurer, Chief Compliance Officer and Assistant Secretary of the
Corporation and of MorAmerica, is a Director of and the Executive Vice
President, Treasurer and Assistant Secretary of InvestAmerica. Mr. Kevin
Mullane, Senior Vice President of the Corporation and MorAmerica, is a
shareholder and Director of, and the Senior Vice President and Assistant
Secretary of InvestAmerica. Mr. Michael H. Reynoldson, Vice President of the
Corporation and MorAmerica, is the Vice President of InvestAmerica.
Executive Officers of the Corporation
As affiliated persons of InvestAmerica, the officers of the Corporation
listed in the chart below are "interested persons," as that term is defined in
Section 2(a)(19) of the Investment Company Act, of the Corporation. The address
for all officers is 101 Second Street SE, Suite 800, Cedar Rapids, Iowa 52401.
The Corporation's officers listed below also serve in similar capacities
with MorAmerica and serve in various capacities with the following companies
which are under common control with or are affiliated with InvestAmerica:
InvestAmerica Venture Group, Inc. (provides management and investment services
to a private investment partnership, the Iowa Venture Capital Fund, L.P.);
InvestAmerica N.D. Management, Inc. (provides management and investment services
to NDSBIC, L.P., a Small Business Investment Company ("SBIC")); InvestAmerica
ND, L.L.C. (general partner of NDSBIC, L.P.); InvestAmerica L&C Management, Inc.
(provides management and investment services to Lewis & Clark Private Equities,
L.P., an SBIC ("Lewis")); InvestAmerica L&C, LLC (general partner of Lewis);
InvestAmerica NW Management, Inc. (provides management and investment services
to Invest Northwest, L.P. ("NWLP") (private venture capital fund); and
InvestAmerica NW, LLC (general partner of NWLP).
As representatives of InvestAmerica and its affiliates, the Corporation's
officers listed below also serve on the boards of directors of several of the
Corporation's portfolio companies and the portfolio companies of other managed
funds.
9
Term of Number of
Office Portfolios in
Name Position(s) and Fund Other
and Age Held with Length of Principal Occupation(s) Complex Directorships
the Time During Past 5 Years Overseen by Held by
Corporation Served Officer (1) Officer (2)
David R. President Since Chief Compliance Officer and Treasurer of the One None
Schroder, and April, Corporation, March, 2004-April, 2005; President,
62 Secretary 2005 Secretary and a Director of the Corporation,
1994-2004. Mr. Schroder also serves as
President, Secretary and a Director of
InvestAmerica. He received a B.S.F.S. from
Georgetown University and an M.B.A. from the
University of Wisconsin.
Robert A. Chief Since Chief Financial Officer, Executive Vice One None
Comey, Financial April, President, Treasurer and a Director of the
59 Officer, 2005 Corporation, 1994-2004; Director of MorAmerica,
Executive 1989-2004; Executive Vice President and
Vice Assistant Secretary of MorAmerica, 1994-2004;
President, Treasurer of MorAmerica, 1994-April, 2005. Mr.
Chief Comey is the Executive Vice President,
Compliance Treasurer, Assistant Secretary and a Director of
Officer, InvestAmerica. He received an A.B. in Economics
Treasurer from Brown University and an M.B.A. from Fordham
and University.
Assistant
Secretary
Kevin F. Senior Vice Since Vice President of the Corporation, 1994-1999; One None
Mullane, President April, Vice President of MorAmerica, 1994-1998; Senior
50 2005 Vice President of the Corporation, 2000-2004;
Senior Vice President of MorAmerica, 1999-2004.
Mr. Mullane is a Senior Vice President,
Assistant Secretary and a Director of
InvestAmerica. He received an M.B.A. and an M.S.
in Business Administration, Emphasis in
Accounting, from Rockhurst Jesuit University.
Michael H. Vice Since Vice President of the Corporation, 2002-2004; One None
Reynoldson, President April, Vice President of MorAmerica since 2002. Mr.
40 2005 Reynoldson is Vice President of InvestAmerica.
He received an M.B.A. from the University of
Iowa and a B.A. in Business Administration from
Washington State University.
(1) As the Corporation conducts all of its investments through MorAmerica, the
Corporation and MorAmerica are deemed one "fund."
(2) "Other Directorships" indicate other U.S. publicly-traded companies.
Advisory Board
At its meeting on December 22, 2003, the Boards of Directors of the
Corporation and MorAmerica voted to create an Advisory Board to MorAmerica.
Initially, two former members of the Boards of Directors of the
10
Corporation and MorAmerica, Henry T. Madden and John Wolfe, were appointed to
the MorAmerica Advisory Board commencing at the end of the 2004 Annual Meeting
of Shareholders. Pursuant to a written agreement, Mr. Madden and Mr. Wolfe have
provided consulting services as advisory directors for a two-year term based on
their prior experience as members of the Board of Directors with respect to the
current investment portfolio. The Boards of Directors of the Corporation and
MorAmerica have since determined that the assistance of the Advisory Board is no
longer necessary, and therefore the Advisory Board will not be utilized by
MorAmerica after the 2006 Annual Meeting.
Meetings and Committees of the Board of Directors
The Audit Committee, the Corporate Governance/Nominating Committee, the
Investment Committee and the Valuation Committee operated during Fiscal Year
2005 to assist the Board of Directors in carrying out its duties. During Fiscal
Year 2005, six meetings of the Board of Directors were held. In addition, five
meetings of the Audit Committee, two meetings of the Corporate
Governance/Nominating Committee, two meetings of the Investment Committee and
three meetings of the Valuation Committee were held. Except for Mr. Jiaravanon,
each of the Directors who are nominated for election at the 2006 Annual Meeting
attended at least 75% of the aggregate meetings of the Board of Directors and
the meetings held by the committees of the Board of Directors on which each
Director served during fiscal year 2005.
Audit Committee
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
Audit Committee has adopted a written charter, which was previously provided
with the Corporation's Proxy Statement for the 2004 Annual Meeting.
The Audit Committee presently consists of Michael W. Dunn (Chair), Paul M.
Bass, Jr. and Gordon J. Roth. Each member of the Audit Committee is independent
under NASDAQ listing standards.
Corporate Governance/Nominating Committee
The Corporate Governance/Nominating Committee was appointed by the Board of
Directors to identify and recommend approval of all Director nominees to be
voted on at the Annual Shareholders' Meetings, to recommend corporate governance
guidelines for the Corporation, to lead the Board of Directors in its annual
review of the Board's performance, and to recommend to the Board of Directors
nominees for each committee of the Board. On December 22, 2003, the Board of
Directors approved the Corporate Governance/Nominating Committee Charter, which
was previously provided with the Corporation's Proxy Statement for the 2004
Annual Meeting.
The Corporate Governance/Nominating Committee may seek input from other
Directors or senior management in identifying candidates. Shareholders may
propose nominees for Director by following the procedures set forth in the
section of this Proxy Statement entitled "SHAREHOLDER PROPOSALS FOR 2007 ANNUAL
MEETING."
The qualifications used in evaluating Director candidates include but are
not limited to: independence, time commitments, attendance, business judgment,
management, accounting, finance, industry and technology knowledge, as well as,
personal and professional ethics, integrity and values. In addition, as set
forth in its Charter, the Corporate Governance/Nominating Committee believes
that having directors with relevant experience in business and industry,
government, finance and other areas is beneficial to the Board of Directors as a
whole. The Corporate Governance/Nominating Committee further reviews the
qualifications of any candidate in the context of the current composition of the
Board of Directors and the needs of the Corporation. The same identifying and
11
evaluating procedures apply to all candidates for director nomination. The
Corporate Governance/Nominating Committee has approved all of the nominees for
Director identified above.
The Corporate Governance/Nominating Committee also oversees the formulation
of, and recommends for adoption to the Board of Directors, a set of corporate
governance guidelines. The Corporate Governance/Nominating Committee also
periodically reviews and reassesses the corporate governance guidelines of the
Corporation and recommends appropriate changes to the Board of Directors for
approval. The Corporate Governance/Nominating Committee also reviews and
approves annually the Corporation's compensation program for service on the
Board of Directors or any of its committees.
The Corporate Governance/Nominating Committee presently consists of Paul M.
Bass, Jr. (Chair), and Jasja Kotterman. All members of the Corporate
Governance/Nominating Committee are independent under NASDAQ listing standards.
Investment Committee
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 InvestAmerica, with entities
controlling, controlled by or under common control with InvestAmerica, and with
other affiliates. The voting members of the Investment Committee presently
include Michael W. Dunn, Gordon J. Roth, and Jasja Kotterman. All voting members
are independent under NASDAQ listing standards. The nonvoting ex officio members
are Benjamin Jiaravanon and Geoffrey T. Woolley.
Valuation Committee
Since the end of Fiscal Year 2003, the Board of Directors has appointed a
Valuation Committee to assist the Board of Directors with its quarterly
portfolio valuations. The Valuation Committee meets with the portfolio managers
to review the portfolio managers' proposed valuations of all investments. The
Valuation Committee then recommends proposed valuations to the full Board, and
selects investments for review by the full Board which have had material
developments or are otherwise determined appropriate for individual review. The
full Board of Directors then reviews the report of the Valuation Committee as
well as all portfolio investments recommended for review at the meeting. The
full Board of Directors also receives and reviews the complete valuation report
and recommendations on every investment and may ask for a detailed review of any
investment. The Board of Directors then approves the valuation of all portfolio
investments, with any changes approved at the meeting. Current members of the
Valuation Committee are Jasja Kotterman and Martin Walton.
Audit Committee Report
The Audit Committee of the Board of Directors of the Corporation (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 charter of the Audit Committee was attached to the
Proxy Statement for the 2004 Annual Shareholders Meeting. The current members of
the Audit Committee are Michael W. Dunn (Chair), Paul M. Bass, Jr. and Gordon J.
Roth. Under the terms of the charter and the listing standards of The NASDAQ
Stock Market, Inc., all of the Audit Committee members are considered to be
independent.
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
these processes.
In this regard, the Audit Committee has reviewed and discussed the audited
financial statements for Fiscal Year 2005 with management and discussed other
matters related to the audit with the independent auditors.
12
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 met with the independent auditors, with and without management
present, and 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 and the letter 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 2005, the following amounts during fiscal year 2005:
Audit Fees (including quarterly reviews, security counts,
and audit of Form 468): $ 64,400
Audit-related services $ -0-
Financial Information Systems Design and Implementation:
Non-Audit Fees:
Preparation of federal and state income tax returns $ 13,500
Other tax research, consultation, correspondence and
advice $ -0-
The Audit Committee has considered whether KPMG has maintained its
independence during Fiscal Year 2005.
Based upon the Audit Committee's discussions with management and the
independent auditors, and the Audit Committee's review of 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, 2005, filed with the
SEC.
AUDIT COMMITTEE:
Michael W. Dunn, Chair
Paul M. Bass, Jr.
Gordon J. Roth
Independent Auditor Fees and Services
The following table presents fees paid for professional services rendered
by KPMG for the Fiscal Year 2005 and the fiscal year ending September 30, 2004
("Fiscal Year 2004"):
Fee Category Fiscal Year 2005 Fees Fiscal Year 2004 Fees
--------------------- ------------------------- -------------------------
Audit Fees $64,400 $58,250
Audit-Related Fees -0- $11,175
Tax Fees $13,500 $24,900
All Other Fees -0- -0-
------------------------- -------------------------
Total Fees $77,900 $94,325
Audit Fees were for professional services rendered for the audit of the
Corporation's consolidated financial statements and review of the interim
consolidated financial statements included in quarterly reports and services
that
13
are normally provided by KPMG in connection with statutory and regulatory
filings or engagements and include quarterly reviews, security counts and audit
of SBA Form 468.
Audit-Related Fees were for assurance and related services that are
reasonably related to the performance of the audit or review of the
Corporation's consolidated financial statements and are not reported under
"Audit Fees." These services include accounting consultations in connection with
acquisitions, consultations concerning financial accounting and reporting
standards.
Tax Fees were for professional services for federal, state and
international tax compliance, tax advice and tax planning and include
preparation of federal and state income tax returns, and other tax research,
consultation, correspondence and advice.
All Other Fees are for services other than the services reported above. The
Corporation did not pay any fees for such other services in Fiscal Year 2004 or
Fiscal Year 2003.
The Audit Committee has concluded the provision of the non-audit services
listed above is compatible with maintaining the independence of KPMG.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Auditors
The Audit Committee pre-approves all audit and permissible non-audit
services provided by the independent auditors. These services may include audit
services, audit-related services, tax services and other services. Pre-approval
is generally provided for up to one year and any pre-approval is detailed as to
the particular service or category of services and is generally subject to a
specific budget. The independent auditors and management are required to
periodically report to the Audit Committee regarding the extent of services
provided by the independent auditors in accordance with this pre-approval, and
the fees for the services performed to date. The Audit Committee may also
pre-approve particular services on a case-by-case basis.
Compensation of Directors and Executive Officers
Compensation of Directors
Pursuant to the Board of Directors Resolution dated February 24, 2004,
Directors of the Corporation and of MorAmerica who are also officers or
directors of any investment advisor of either the Corporation or of MorAmerica
receive no compensation for serving on the Boards of Directors of the
Corporation and of MorAmerica, except that this policy does not apply to the
Chairman of the Board. The Chairman of the Board receives an annual retainer of
$21,600, and all other outside Directors receive an annual retainer of $7,200.
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
$250 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 Directors receive $250 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 $100 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. 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 2005, which includes compensation for serving on
the Boards of Directors of the Corporation and MorAmerica Capital
14
(the only wholly owned subsidiary 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. The
Corporation presently maintains no pension or retirement plans for its
Directors.
Aggregate Compensation
Name and Position From Corporation and Fund Complex(1)
Geoffrey T. Woolley $21,600
Chairman of the Board
Paul M. Bass, Jr., Director(2) $12,750
David R. Schroder, -0-
President and Secretary
Kent I. Madsen(3) -0-
Benjamin Jiaravanon, Director -0-
Jasja De Smedt Kotterman, Director $11,600
Shane V. Robison(4) $4,950
Martin Walton, Director(5) $10,900
Michael W. Dunn, Director $12,400
Gordon J. Roth $11,150
------------------------------------
(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 is not seeking re-election at the 2006 Annual Meeting.
(3) Mr. Madsen resigned from the Board of Directors on May 24, 2005.
(4) Mr. Robison did not stand for re-election at the 2005 Annual Meeting.
(5) Mr. Walton is not seeking re-election at the 2006 Annual Meeting.
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
InvestAmerica Investment Advisors, Inc., which pays all of their cash
compensation.
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, 2000, with the cumulative total return over the same period of (i)
the NASDAQ Stock Market Total Return Index (U.S. Companies), (ii) the
Corporation's former peer group selected in good faith by the Corporation which
was composed of the following nine business development companies or other funds
known by the Corporation to have similar investment objectives to the
Corporation: Allied Capital Corporation (ALD), American Capital Strategies, Ltd.
(ACAS), Brantley Capital Corporation (BBDC), Capital Southwest Corp (CSWC),
Equus II Inc. (EQS), Harris & Harris Group, Inc. (TINY), Rand Capital Corp
(RAND), Waterside Capital Corporation (WSCC) and Winfield Capital Corp (WCAP)
(the "Former Peer Group"),
15
and (iii) the Corporation's new peer group selected in good faith by the
Corporation composed of the following eleven business development companies or
other funds known by the Corporation to have similar investment objectives to
the Corporation: Ares Capital Corporation (ARCC), Brantley Capital Corporation
(BBDC), Capital Southwest Corp (CSWC), Equus II Inc. (EQS), Gladstone Investment
Corporation (GAIN), Harris & Harris Group, Inc. (TINY), MVC Capital (MVC), NGP
Capital Resources Company (NGPC), (Rand Capital Corp (RAND), and Winfield
Capital Corp (WCAP) (the "New Peer Group").
The Corporation periodically reviews the composition of the peer group. In
reviewing the peer group in recent months, the Corporation noted that the two
members of the Former Peer Group which have been removed, Allied Capital
Corporation (ALD), American Capital Strategies, Ltd. (ACAS), are so much larger
than the Corporation and currently have such a different investment focus that
they should no longer be included in the peer group. In addition, the
Corporation determined that there are a number of additional business
development companies with sufficient similarities to the Corporation that
should be included in the peer group. The additions to the peer group are: Ares
Capital Corporation (ARCC), Gladstone Investment Corporation (GAIN), MVC Capital
(MVC) and NGP Capital Resources Company (NGPC).
In the graph, the comparison assumes $100 was invested on October 1, 2000,
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.
|
16
SHAREHOLDER PROPOSALS FOR 2007 ANNUAL MEETING
Under the rules of the SEC, any shareholder proposal to be considered by
the Corporation for inclusion in the proxy material for the February, 2007
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 26, 2006. 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 Amended and Restated Bylaws,
shareholders desiring to nominate persons for election as Directors or to
propose other business for consideration at an annual meeting must 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 2007 Annual Meeting of
shareholders must give written notice of the proposal to the Secretary of the
Corporation not earlier than October 26, 2006, and not later than November 25,
2006. 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 Amended and
Restated Bylaws. A copy of the Corporation's Amended and Restated Bylaws will be
furnished to shareholders without charge upon written request to the Secretary
of the Corporation.
SHAREHOLDER COMMUNICATION
Any shareholder wishing to communicate with any of the Corporation's
Directors regarding matters related to the Corporation may provide
correspondence to the Director in care of Secretary, MACC Private Equities Inc.,
101 Second Street S.E., Suite 800, Cedar Rapids IA 52401. The Chairman of the
Corporate Governance/Nominating Committee will review and determine the
appropriate response to questions from shareholders, including whether to
forward communications to individual Directors. The independent members of the
Board of Directors review and approve the shareholder's communication process
periodically to ensure effective communication with the shareholders.
The Corporation strongly encourages its Directors to attend all annual
meetings, and all Directors attended the Corporation's 2005 Annual Meeting of
shareholders.
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 Mellon Investor Services, LLC ("Mellon") to aid in the
solicitation of proxies at an estimated fee of $5,000. The Corporation's
agreement with Mellon to solicit proxies generally provides that Mellon will:
(i) assist the Corporation in its planning and organization of proxy
solicitation matters, (ii) establish communications with banks, brokers and
other parties for purposes of the solicitation, (iii) disseminate all proxy
materials in a timely manner, (iv) solicit and collect proxies according to
Mellon's calling and reporting procedures.
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.
17
PERIODIC REPORTS
The Corporation's financial statements and related financial information
required by Item 13(a) of Schedule 14A are incorporated herein by this reference
to the Corporation's Annual Report to Shareholders for its fiscal year ended
September 30, 2005 (the "Annual Report"). The Annual Report accompanies this
proxy statement, but is not deemed a part of the proxy soliciting material,
except to the extent that portions thereof have been incorporated herein
pursuant to the preceding sentence.
A copy of the Fiscal Year 2005 Form 10-K report to the SEC, excluding
exhibits, will be mailed to shareholders without charge upon written request to
Secretary, MACC Private Equities Inc., 101 Second Street, S.E., Suite 800, Cedar
Rapids, Iowa 52401 or by calling (319) 363-8249. 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 30,
2005. Exhibits to the Form 10-K will be mailed upon similar request and payment
of specified fees.
Please date, sign and return the proxy at your earliest convenience in the
enclosed envelope. No postage is required for mailing in the United States. A
prompt return of your proxy will be appreciated as it will save the expense of
further mailings and telephone solicitations.
|
By Order of the Board of Directors
|
|
|
|
David R. Schroder
Secretary |
Cedar Rapids, Iowa
January 23, 2006
18
MACC Private Equities Inc.
Proxy Solicited on Behalf of the Board of Directors
for Annual Meeting of Shareholders
February 28, 2006
The undersigned hereby appoints Geoffrey T. Woolley, 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 of MACC PRIVATE EQUITIES INC. (the "Corporation") held of record by
the undersigned on January 13, 2006, at the Annual Meeting of Shareholders of
the Corporation to be held on February 28, 2006 and any adjournment(s) thereof.
The proxy when properly executed will be voted as directed by the
undersigned shareholder. If directors are not indicated, the proxy will be voted
to elect the nominees described in item 1 and for the proposal described in 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 Amended and
Restated 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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- Address Change/Comments (Mark the corresponding box on the reverse side) -
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- -
- -
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Please
Mark Here
for Address |_|
Change or
Comments
SEE REVERSE SIDE
FOR WITHHOLD Authority
all nominees for all nominees
1. To elect five Directors to serve until
the 2007 Annual Meeting of Shareholders or |_| |_|
until their respective successors shall be
elected and qualified;
Director Nominees:
01 Michael W. Dunn
02 Benjamin Jiaravanon
03 Jasja Kotterman
04 Gordon J. Roth
05 Geoffrey T. Woolley
FOR AGAINST ABSTAIN
2. To ratify the appointment of KPMG LLP as |_| |_| |_|
independent auditors; and
3. To transact such other business that may properly come before the meeting and
any adjournment thereof.
(INSTRUCTIONS: To withhold authority for any individual
nominee, write that nominee's name on the space provided
below.)
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PLEASE SIGN, DATE AND RETURN THIS PROXY USING THE ENCLOSED ENVELOPE.
Signature____________________ 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.