UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment
No. )
Filed by the
Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
|
|
|
o Preliminary
Proxy Statement
|
|
|
|
|
|
|
o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|
þ Definitive
Proxy Statement
|
o Definitive
Additional Materials
|
o Soliciting
Material Pursuant to §240.14a-12
|
Rand Capital Corporation
(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):
|
|
þ |
No fee required.
|
|
o |
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:
|
|
|
(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:
|
|
|
o |
Fee paid previously with preliminary materials.
|
|
o |
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.:
|
TABLE OF CONTENTS
Proxy Statement Rand Capital Corporation
Rand Capital Corporation
2200 Rand Building
Buffalo, New York 14203
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO OUR SHAREHOLDERS
The 2009 Annual Meeting of Shareholders of Rand Capital Corporation will be held on Thursday,
April 30, 2009 at 10:30 a.m. in Room 410, Rand Building, 14 Lafayette Square, Buffalo, New York,
for the following purposes:
|
1. |
|
To elect seven Directors to hold office until the next annual meeting of
shareholders and until their successors have been elected and qualified. |
|
|
2. |
|
To authorize sales of our common stock under certain conditions during a one year
period at prices below the then current Net Asset Value per share. |
|
|
3. |
|
To consider and act upon such other business as may properly come
before the meeting. |
Shareholders of record at the close of business on March 6, 2009 are entitled to notice of,
and to vote at the meeting, and any adjournment thereof.
|
|
|
|
|
|
|
April 3, 2009
|
|
|
|
By order of the Board of Directors,
|
|
|
Buffalo, New York
|
|
|
|
Reginald B. Newman II |
|
|
|
|
|
|
Chairman |
|
|
IMPORTANT NOTICE REGARDING
INTERNET AVAILABILITY OF PROXY MATERIALS
FOR THE SHAREHOLDER MEETING TO BE HELD ON
APRIL 30, 2009
THE PROXY STATEMENT AND ANNUAL REPORT
TO SHAREHOLDERS IS AVAILABLE AT HTTP://MATERIALS.PROXYVOTE.COM/752185
Proxy 1
Proxy Statement Rand Capital Corporation
Rand Capital Corporation
2200 Rand Building
Buffalo, New York 14203
Proxy Statement
GENERAL INFORMATION
We are furnishing this Proxy Statement in connection with the solicitation of proxies by the
Board of Directors of Rand Capital Corporation for the Annual Meeting of Shareholders to be held on
April 30, 2009. Only shareholders of record at the close of business on March 6, 2009, are
entitled to notice of and to vote at the meeting, and at any adjournment thereof. On that date
Rand had outstanding 5,718,934 Common Shares, par value $.10 per share (shares).
Each share entitles the holder to one vote. Shares cannot be voted at the meeting unless the
shareholder is present or represented by proxy. If the enclosed form of proxy is returned properly
executed, the shares represented thereby will be voted at the meeting in accordance with the
instructions contained in the proxy, unless the proxy is revoked prior to its exercise. Any
shareholder may revoke a proxy by executing a subsequently dated proxy or a notice of revocation,
provided that the subsequent proxy or notice is delivered to us prior to the taking of a vote, or
by voting in person at the meeting.
Under the New York Business Corporation Law (the BCL) and our by-laws, the presence, in
person or by proxy, of the holders of a majority of the outstanding stock is necessary to
constitute a quorum of the shareholders to take action at the annual meeting. The shares that are
present at the meeting or represented by a proxy will be counted for quorum purposes. Proxies
submitted with abstentions and broker non-votes will be counted in determining whether or not a
quorum is present. Under the BCL and our by-laws, once a quorum is established, Directors standing
for election may be elected by a plurality of the votes cast.
This Proxy Statement and accompanying form of proxy are being mailed to shareholders on or
about April 3, 2009. A copy of Rands 2008 Annual Report, which contains financial statements,
accompanies this Proxy Statement.
We will bear the cost of soliciting proxies in the accompanying form. We do not expect to pay
any compensation for the solicitation of proxies, but may pay brokers, nominees, fiduciaries and
other custodians their reasonable fees and expenses for sending proxy materials to beneficial
owners and obtaining their instructions. In addition to solicitation by mail, our Directors,
officers and employees may solicit proxies in person or by telephone, and they will receive no
additional compensation therefore.
Our office is located at 2200 Rand Building, Buffalo, New York 14203; telephone number
716-853-0802.
Proxy 2
Proxy Statement Rand Capital Corporation
BENEFICIAL OWNERSHIP OF SHARES
Unless otherwise indicated, the following table sets forth beneficial ownership of our common
shares on March 6, 2009, by (a) persons known by us to be beneficial owners of more than 5% of the
outstanding shares, (b) the Directors, nominees for Director, and all the executive officers of
Rand, and (c) all Directors and executive officers as a group. Unless otherwise stated, each
person named in the table has sole voting and investment power with respect to the shares indicated
as beneficially owned by that person.
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature of |
|
Percent |
Beneficial Owner |
|
Beneficial Ownership (1) |
|
of Class (4) |
|
(a) More than 5% Owners: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brown Advisory Holdings Inc. (BAHI)
901 South Bond Street, Baltimore, MD |
|
|
1,603,020 |
(5) |
|
|
28.0 |
% |
|
|
|
|
|
|
|
|
|
Willis S. McLeese
c/o 2200 Rand Building, Buffalo, NY |
|
|
800,000 |
(2) |
|
|
14.0 |
% |
|
|
|
|
|
|
|
|
|
Reginald B. Newman, II
50 North Airport Drive, Buffalo, NY |
|
|
379,635 |
|
|
|
6.6 |
% |
|
|
|
|
|
|
|
|
|
(b) Directors, nominees for Director and executive officers: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allen F. Grum |
|
|
73,128 |
|
|
|
1.3 |
% |
Erland E. Kailbourne |
|
|
10,000 |
|
|
|
|
* |
Ross B. Kenzie |
|
|
100,000 |
|
|
|
1.7 |
% |
Willis S. McLeese |
|
|
800,000 |
(2) |
|
|
14.0 |
% |
Reginald B. Newman II |
|
|
379,635 |
|
|
|
6.6 |
% |
Jayne K. Rand |
|
|
139,478 |
|
|
|
2.4 |
% |
Robert M. Zak |
|
|
20,000 |
|
|
|
|
* |
Daniel P. Penberthy |
|
|
50,000 |
|
|
|
|
* |
|
|
|
|
|
|
|
|
|
(c) All Directors and executive officers as
a group |
|
|
1,572,241 |
(3) |
|
|
27.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Less than 1% |
|
(1) |
|
The beneficial ownership information presented is based upon information furnished by each
person or contained in filings made with the Securities and Exchange Commission (SEC). |
|
(2) |
|
These shares are owned by Colmac Holdings, Ltd., a corporation of which Mr. McLeese is the
Chairman and principal owner. |
|
(3) |
|
Except as indicated above, members of the group have sole voting and investment power
over these shares. |
|
(4) |
|
Percent of Class calculated based on 5,718,934 common shares outstanding at Record Date. |
|
(5) |
|
Shares are owned by clients of Brown Advisory Services, LLC, a broker-dealer and investment
advisory subsidiary of BAHI. BAHI has shared dispositive power but no voting power with
respect to the shares. Shares were reported on a Schedule 13F filed by Brown Advisory
Security LLC on February 17, 2009. |
Proxy 3
Proxy Statement Rand Capital Corporation
PROPOSAL 1. ELECTION OF DIRECTORS
Seven Directors are to be elected at the meeting, each to serve until the next annual meeting
of shareholders and until his or her successor has been elected and qualified. Unless marked to
the contrary, the proxies received will be voted FOR the election of the seven nominees below.
Each of the nominees is presently a member of the Board of Directors and was recommended for
election by the Governance and Nominating Committee, which is comprised of non-management,
independent Directors. Each of the nominees has consented to serve as a Director, if elected. If
at the time of the meeting any nominee should be unable to serve, it is the intention of the
persons designated as proxies to vote, in their discretion, for such other person as may be
designated as a nominee by the Board of Directors. Each of the nominees was elected at Rands last
Annual Meeting of Shareholders.
Director Independence
The Board of Directors affirmatively determined that four of the six non-management Directors,
Erland E. Kailbourne, Ross B. Kenzie, Jayne K. Rand and Robert M. Zak are Independent Directors
under the rules of the SEC and under the rules and guidelines of the National Association of
Security Dealers (NASD) for NASDAQ listed companies and, therefore, that a majority of a
corporations seven-person Board of Directors is currently independent as so defined. The Board of
Directors has determined that there are no relationships between Rand and the Directors classified
as independent other than service on its Board of Directors and compensation paid to Directors.
Three of the Directors are deemed to be Interested Persons under Section 2(a)(19) of the
Investment Company Act of 1940 with respect to Rand: Allen F. Grum because he is an executive
officer of Rand, and Willis S. McLeese and Reginald B. Newman, II, because each of them
beneficially owns more than 5% of Rands outstanding common shares. Persons who are Interested
Persons are not independent Directors under the rules and guidelines of the NASD.
The independence determination of the Board of Directors under the SEC rules and under the
NASD rules and guidelines also included conclusions of the Board of Directors that:
|
|
|
each of the members of the Audit Committee and of the Governance and Nominating
Committee, and a majority of the members of the Compensation Committee are independent
under the standards described above for purposes of membership on each of those
committees; |
|
|
|
|
the 2008 compensation of the executive officers was determined by a majority of the
independent Directors of the Board; and |
|
|
|
|
each of the members of the Audit Committee also meets the additional independence
requirements under SEC Rule 10A-3(b) and NASDAQ Rule 4350(d). |
Proxy 4
Proxy Statement Rand Capital Corporation
As the Chair of the Governance and Nominating Committee, Mr. Kailbourne will serve as the
chair of meetings of Independent Directors. It is currently contemplated that executive sessions
of the Independent Directors will occur at least twice during the fiscal year ended December 31,
2009, in addition to separate meetings of standing committees of the Board of Directors.
Shareholder Communications
Communications to an individual Director, to non-management Directors as a group, or to the
entire Board, should be addressed as follows: Reginald B. Newman, II, Security Holder Board
Communications, 2200 Rand Building, Buffalo, New York, 14203, with an indication of the individual
or subgroup (if any) to whose attention the communication is directed. All security holder
communications addressed in that manner will be delivered directly to Mr. Newman, who will receive
communications for the Board and non-management Directors, and who will deliver the communication
unopened to any individual indicated Director.
Meeting Attendance
Last year all Directors attended the Annual Meeting of Stockholders, and they are expected to
do so this year. A meeting of the Board of Directors will take place on the same day and at the
same place as the Annual Meeting of Stockholders, and Directors are expected to attend all Board
and Committee meetings of Rand and the annual meeting of shareholders, but such attendance is not
required.
Information Regarding Directors, Nominees for Director, and Officers
The following table provides information concerning all persons who are Directors, nominees
for Director, or officers of Rand. Rand is not part of a fund complex.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Length |
|
|
|
|
|
|
Position(s) |
|
of |
|
|
|
Other |
Name, Age and |
|
held with |
|
Time |
|
Principal Occupation During |
|
Director- |
Address |
|
Fund |
|
Served (1) |
|
Last Five Years |
|
ships |
Directors who are |
|
|
|
|
|
|
|
|
|
|
Interested Persons |
|
|
|
|
|
|
|
|
|
|
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Willis S. McLeese
(95)
c/o 2200 Rand Building
Buffalo, NY 14203
|
|
Director
|
|
|
1986 |
|
|
Chairman of Colmac
Holdings Limited, Toronto,
Canada, which develops,
owns and operates
cogeneration and
alternative energy
electric power generating
plants.
|
|
None |
Proxy 5
Proxy Statement Rand Capital Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Length |
|
|
|
|
|
|
Position(s) |
|
of |
|
|
|
Other |
Name, Age and |
|
held with |
|
Time |
|
Principal Occupation During |
|
Director- |
Address |
|
Fund |
|
Served (1) |
|
Last Five Years |
|
ships |
Reginald B. Newman
II
(71)
50 North Airport
Drive
Buffalo, NY 14225
|
|
Director and
Chairman of Board
|
|
|
1987 |
|
|
Mr. Newman has been
Chairman of the
Board since 1996.
Mr. Newman is the
Chairman of Prior
Aviation Services,
Inc., the Fixed
Base Operator (FBO)
at Buffalo Niagara
International
Airport, Buffalo,
NY. Mr. Newman is
also a Director of
M&T Bank
Corporation, a
financial
institution
headquartered in
Buffalo, NY. He is
a Director of Dunn
Tire LLC and Taylor
Devices, Inc.
|
|
Director of M&T Bank
Corporation, Dunn
Tire LLC, Taylor
Devices and Prior
Aviation Services,
Inc. |
|
|
|
|
|
|
|
|
|
|
|
Allen F.
Grum
(51)
c/o 2200 Rand
Building
Buffalo NY 14203
|
|
President of Rand
and a Director
|
|
|
1996 |
|
|
President and Chief
Executive Officer
since 1996. Prior
thereto, Mr. Grum
served as Senior
Vice President of
Rand Capital
Corporation
commencing in June
1995. From 1994 to
1995, Mr. Grum was
Executive Vice
President of
Hamilton Financial
Corporation and
from 1991-1994 he
served as Senior
Vice President of
Marine Midland
Mortgage
Corporation. Mr.
Grum serves on a
number of Boards of
Directors of
companies in which
Rand Capital
Corporation has an
investment.
|
|
None |
|
|
|
|
|
|
|
|
|
|
|
Directors who are not
Interested Persons
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Erland E. Kailbourne
(67)
220 Liberty Street
P.O. Box 227
Warsaw, NY 14569
|
|
Director
|
|
|
1999 |
|
|
Chairman of
Financial
Institutions, Inc.
and its subsidiary
Five Star Bank
since January 2006.
From May 2002
until March 2003,
Mr. Kailbourne was
Chairman and
Interim CEO of
Adelphia
Communications.
(Adelphia filed a
petition under
Chapter 11 of the
United States
Bankruptcy Code in
June 2002.) He
retired as Chairman
and Chief Executive
Officer (New York
Region) of Fleet
National Bank, a
banking subsidiary
of Fleet Financial
Group, Inc., in
1998. He was
Chairman and Chief
Executive Officer
of Fleet Bank, also
a subsidiary of
Fleet Financial
Group, Inc., from
1993 until its
merger into Fleet
National Bank in
1997. He is a
Director of the New
York ISO, The John
R. Oishei
Foundation, Albany
International
Corporation,
Allegany Co-op
Insurance Company,
USA Niagara
Development Corp.
and the Farash
Corporation and the
Max and Marian
Farash Foundation.
|
|
Chairman of Financial
Institutions, Inc.
and its subsidiary,
Five Star Bank, and
Albany International |
Proxy 6
Proxy Statement Rand Capital Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Length |
|
|
|
|
|
|
Position(s) |
|
of |
|
|
|
Other |
Name, Age and |
|
held with |
|
Time |
|
Principal Occupation During |
|
Director- |
Address |
|
Fund |
|
Served (1) |
|
Last Five Years |
|
ships |
Ross B.
Kenzie
(77)
369 Franklin
Street
Buffalo, NY 14202
|
|
Director
|
|
|
1996 |
|
|
Mr. Kenzie has been retired since 1989. Prior thereto, he
was the Chairman of the Board and Chief Executive Officer
of Goldome Bank, Buffalo, NY, a savings bank, since 1980.
Prior thereto, Mr. Kenzie was Executive Vice President and
Director of Merrill Lynch Pierce Fenner & Smith as well as
Merrill Lynch & Co. Through 2006, Mr. Kenzie also served
on the Board of Directors of Biophan Technologies, Inc. and
Natural Nano, Inc., development companies specializing in
highly marketable business devices and naturally occurring
nanotube technologies; and is a former Director of
Merchants Mutual Insurance Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jayne K. Rand
(48)
c/o 2200 Rand
Building
Buffalo, NY 14203
|
|
Director
|
|
|
1989 |
|
|
Since 1993, Miss Rand has been a Vice President of M&T Bank. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert M. Zak
(51)
250 Main
Street
Buffalo, NY 14202
|
|
Director
|
|
|
2005 |
|
|
Since 1995, Mr. Zak has been President and Chief Executive
Officer of Merchants Mutual Insurance Company, which
operates under the trade name Merchants Insurance Group.
Mr. Zak joined Merchants in 1985. Prior to that, his
career was in public accounting. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Director Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel P.
Penberthy
(46)
c/o 2200 Rand
Building
Buffalo, NY 14203
|
|
Executive Vice
President and
Treasurer of Rand
|
|
|
N/A |
|
|
Mr. Penberthy has served as Treasurer of the Corporation
since August 1997. Since January 2002, Mr. Penberthy has
served as Senior Vice President, and he has continued to
serve as the Chief Financial Officer since 1997. From 1993
to 1997, Mr. Penberthy served as Chief Financial Officer
for both the Greater Buffalo Partnership (formerly the
Chamber of Commerce) and the Greater Buffalo Convention and
Visitors Bureau. Prior thereto, from 1990 to 1993, Mr.
Penberthy served as a Senior Associate with the Greater
Buffalo Development Foundation, a regional business
development organization. Prior to 1990, Mr. Penberthy was
employed by KPMG, a public accounting firm. |
|
|
|
(1) |
|
Indicates initial year in which person became Director. All Directors terms of office will be
through the next annual meeting of shareholders and until their successors have been elected
and qualified. |
|
|
(2) |
|
Willis S. McLeese and Reginald B. Newman, II, each beneficially own more than 5% of Rands
outstanding securities, and Allen F. Grum is an officer of Rand, and are deemed to be
Interested Persons under Section 2(a)(19) of the Investment Company Act of 1940. |
Proxy 7
Proxy Statement Rand Capital Corporation
Approximate Value of Investments in Rand
The following table indicates the range of value as of March 6, 2009 of the common shares of
Rand beneficially owned by each Director and nominee for Director of Rand. Rand is not part of a
family of investment companies.
|
|
|
|
|
Dollar Range of Equity |
Name of Director or Nominee |
|
Securities in the Fund |
|
(a) Directors who are not Interested Persons: |
|
Erland E. Kailbourne
|
|
$10,001 $50,000 |
Ross B. Kenzie
|
|
Over $100,000 |
Jayne K. Rand
|
|
Over $100,000 |
Robert M. Zak
|
|
$50,001 $100,000 |
|
(b) Directors who are Interested Persons: |
|
Allen F. Grum
|
|
Over $100,000 |
Willis S. McLeese
|
|
Over $100,000 |
Reginald B. Newman, II
|
|
Over $100,000 |
COMMITTEES AND MEETING DATA
The Committees of the Board of Directors have the following members:
|
|
|
|
|
|
|
Governance and |
|
|
Compensation Committee |
|
Nominating Committee |
|
Audit Committee |
|
Robert M. Zak (Chair)
|
|
Erland E. Kailbourne (Chair)
|
|
Ross B. Kenzie (Chair) |
Willis S. McLeese
|
|
Ross B. Kenzie
|
|
Erland E. Kailbourne |
Jayne K. Rand
|
|
Jayne K. Rand
|
|
Robert M. Zak |
In 2008 the full Board met on four occasions, the Audit Committee met five times, the
Governance and Nominating Committee met twice and the Compensation Committee met once. All
incumbent Directors attended 100% of the total number of meetings of the Board of Directors and the
total number of meetings of committees of the Board that the respective Director was eligible to
attend during 2008.
Proxy 8
Proxy Statement Rand Capital Corporation
Compensation Committee
The Compensation Committee advises the independent members of the Board of Directors with
respect to the compensation of the executive officers and reviews the criteria that form the basis
for management compensation.
The compensation levels of the Corporations Named Executive Officers, NEOs; (the
President/CEO and Executive Vice President) were approved by the independent members of the Board
of Directors, representing a majority of its membership.
The Compensation Committees Charter may be accessed at Rands website, www.randcapital.com.
Governance and Nominating Committee
The primary purposes of the Governance and Nominating Committee include:
|
|
developing, recommending to the Board and assessing corporate governance policies for
Rand; |
|
|
|
overseeing the evaluation of the Board; |
|
|
|
recommending to the Board of Directors the individuals qualified to serve on Rands
Board of Directors for election by shareholders at each annual meeting of shareholders and
to fill vacancies on the Board of Directors. |
The Governance and Nominating Committees Charter may be accessed at Rands website,
www.randcapital.com. None of the persons on the Governance and Nominating Committee are
interested persons as defined in section 2(a)(19) of the Investment Company Act of 1940.
Nomination of Directors
The Governance and Nominating Committee, as part of the responsibilities under its
Charter, and oversees the identification of qualified individuals to serve on the Board.
We seek Directors who have the required and appropriate skills and characteristics
including; business experience and personal skills in finance, marketing, business, and
other areas that are expected to contribute to an effective board. We identify new Director
candidates from prominent business persons and professionals in the communities Rand serves.
We consider nominees of shareholders in the same manner as other nominees.
If a Board vacancy occurs, the Governance and Nominating Committee may recommend a
replacement candidate to the Board. The Board may appoint the new Director to fill the
unexpired term of the seat. Annually, the Governance and Nominating Committee will
recommend a slate of new and/or continuing candidates for the Board of Directors. The Board
will select a slate of nominees for Director from recommendations of the Governance and
Nominating Committee, and submit the slate of nominees to be voted on by shareholders at
Rands next Annual Meeting.
Proxy 9
Proxy Statement Rand Capital Corporation
Rands by-laws provide that an Annual Meeting of Shareholders shall be held on the
fourth Tuesday in April, or such other time within 30 days before or after such date as the
Chairman or Board of Directors shall determine. The number of Directors is determined by
the Board of Directors, but in no event may it be less than three.
Procedure for Shareholders to Nominate Directors
Any shareholder who intends to present a Director nomination proposal for
consideration at the 2010 Annual Meeting and intends to have that proposal
included in the proxy statement and related materials for the 2010 Annual
Meeting must deliver a written copy of the proposal to Rand no later than the
deadline, and in accordance with the procedures, specified under Shareholder
Proposals in this proxy statement, and in accordance with the requirements of
SEC Rule 14a-8.
If a shareholder does not comply with the foregoing procedures, the
shareholder may use the procedures set forth in Rands by-laws, although Rand
would not in the latter case be required to include the nomination as a proposal
in its proxy statement and proxy card mailed to stockholders in connection with
the next annual meeting.
The shareholder nomination proposal referred to above must set forth (1)
the name and address of the shareholder who intends to make the nomination and
of the person or persons to be nominated; (2) a representation that the
shareholder is a shareholder of record of Rand common shares entitled to vote at
the meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the proposal; (3) a description of
the arrangements or understandings between the shareholder and each nominee or
any other person or persons (naming such person or persons) pursuant to which
the nomination or nominations are being made by the shareholder; (4) such other
information regarding each nominee proposed by the shareholder as would have
been required to be included in a proxy statement filed under the proxy rules of
the SEC had each nominee been nominated or intended to be nominated by the Board
of Directors; and (5) the consent of each nominee to serve as a Director of the
Corporation if elected. The Governance and Nominating Committee may refuse to
acknowledge a proposal for the nomination of any person not made in accordance
with the foregoing procedure. Recommendations for nominees should be sent to:
Rand Capital Corporation, Attention: Board Nominations, 2200 Rand Building,
Buffalo, New York 14203.
Rand did not receive any nominations from shareholders for the 2009 Board of Directors
election.
Code of Business Conduct and Ethics
Rand has adopted a Code of Ethics which applies to Rands chief executive officer,
chief financial officer, and controller, and a Business Ethics Policy applicable to Rands
Directors, officers and employees. The Code of Ethics and the Business Ethics Policy are
available in
Proxy 10
Proxy Statement Rand Capital Corporation
the Governance section of Rands website at www.randcapital.com. They are also available in
print to any shareholder who requests it. Rand will disclose any substantive amendments to,
or waiver from provisions of, the Code of Ethics made with respect to the chief executive
officer, chief financial officer or controller via its website.
Audit Committee
The Board of Directors has determined that the members of the Audit Committee are independent,
as described above under Director Independence. The Board of Directors has determined that Ross
B. Kenzie is an Audit Committee financial expert (as defined by SEC regulations) (see Mr. Kenzies
relevant work experience in this Proxys Table Information Regarding Directors, Nominees for
Directors and Officers). Mr. Kenzie is an independent member of Rands Board of Directors (as
defined by SEC and NASD regulations).
The Audit Committee operates under a written charter adopted by the Audit Committee and Board
of Directors. The Charter can be accessed on Rands website at www.randcapital.com. The Audit
Committee reviews the scope and results of the annual audit, receives reports from Rands
independent public accountants, and reports the Audit Committees findings and recommendations to
the Board of Directors.
The Audit Committee has adopted necessary reporting procedures for the confidential
submission, receipt, retention and treatment of accounting and auditing complaints.
Proxy 11
Proxy Statement Rand Capital Corporation
Independent Accountant Appointment
Independent Accountants Appointment
Rand Capital Corporations Audit Committee has appointed Rands current independent
accountants, Freed Maxick & Battaglia, CPAs, PC, (Freed), to examine the accounts of Rand for
the 2009 fiscal year. The Audit Committee members approving such selection are not interested
persons of Rand as defined in the 1940 Act. Freed audited the accounts of Rand for the 2008, 2007
and 2006 fiscal years.
A representative of Freed is expected to be present at the Annual Meeting of Shareholders,
will have the opportunity to make a statement if desired, and will be available to respond to
appropriate questions.
Proxy 12
Proxy Statement Rand Capital Corporation
Independent Accountant Fees
The aggregate fees for each of the last two fiscal years for services rendered by Freed are as
follows:
Audit Fees
This category consists of fees for the audit of annual financial statements, review of
financial statements included in quarterly reports on Form 10-Q and services that are normally
provided by the independent auditor in connection with statutory and regulatory filings or audit
engagements for those fiscal years.
Fees for professional services provided by Freed for the audit of Rands annual financial
statements for the fiscal years ended December 31, 2008 and 2007 were $55,000 and $50,000,
respectively.
Audit Related Fees
This category consists of assurance and related services by the independent accountant that
are reasonably related to the performance of the audit and review of financial statements and are
not reported under audit fees.
During the fiscal years ended December 31, 2008 and 2007, fees for assurance and related
services were $2,115 representing SEC compliance matters and $2,400 representing Sarbanes Oxley
documentation, respectively.
Tax Fees
This category consists of professional services rendered by the independent accountant for tax
compliance and tax planning. The services for the fees disclosed under this category include tax
return preparation and technical advice.
During the fiscal years ended December 31, 2008 and 2007, Rand was billed $16,750 and
$20,550, respectively, in tax fees by Freed.
All Other Fees
This category consists of fees not covered by Audit Fees, Audit Related Fees and Tax Fees.
For the fiscal years ended December 31, 2008 and 2007, Rand did not receive or pay for any
products or services in this category from Freed.
For fiscal years 2008 and 2007, all of the services of Freed described in the above categories
were pre-approved by the Audit Committee.
Estimates of annual audit, quarterly review and tax related fees to be paid during the year
are submitted annually to the Audit Committee for its review and pre-approval and then budgeted for
by Rand. All other non-audit services must be pre-approved by the Audit Committee prior to
engagement, as required by the Committees Charter.
Proxy 13
Proxy Statement Rand Capital Corporation
Audit Committee Report
The Audit Committee has reviewed and discussed Rands audited consolidated financial
statements with management. In addition, the Audit Committee has discussed with Rands independent
accountants, Freed Maxick & Battaglia, CPAs, PC, the matters required to be discussed by Statement
on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1 AU section 380),
as adopted by the Public Company Accounting Oversight Board in Rule 3200T.
The Audit Committee has received the written disclosures and the letter from the independent
accountants required by applicable requirements of the Public Company Accounting Oversight Board
regarding the independent accountants communications with the Audit Committee concerning
independence, and has discussed with the independent accountants the independent accountants
independence.
Based on the Audit Committees review and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited consolidated financial statements be
included in Rand Capital Corporations Annual Report on Form 10-K for the year ended December 31,
2008 for filing with the Securities and Exchange Commission.
This report is respectfully submitted by the Audit Committee of the Board of Directors.
Ross B. Kenzie, Chair
Erland E. Kailbourne
Robert M. Zak
The information provided in the preceding Audit Committee Report will not be deemed to be
soliciting material or filed with the Securities and Exchange Commission or subject to
Regulation 14A or 14C, or to the liabilities of section 18 of the Securities Exchange Act, unless
in the future the Corporation specifically requests that the information be treated as soliciting
material or specifically incorporates it by reference into any filing under the Securities Act or
the Securities Exchange Act.
Proxy 14
Proxy Statement Rand Capital Corporation
COMPENSATION DISCUSSION AND ANALYSIS
Rands President, Executive Vice President, Controller and Office Manager are salaried
employees of Rand. Rand pays the salaries and other employee benefits of these employees. Rand
has a wholly owned subsidiary, Rand Capital SBIC, Inc. (Rand SBIC, formerly Rand Capital SBIC,
L.P.) The President and the Executive Vice President serve as the Management and Investment
Committee of the subsidiary and they are parties to a Profit Sharing Plan of Rand SBIC that was
adopted by Rand as a requirement for the licensing of Rand SBIC as a Small Business Investment
Company.
Rands principal executive officers are its President, Allen F. Grum, and its Executive Vice
President/Chief Financial Officer, Daniel P. Penberthy.
The Compensation Committee, a majority of which are independent members of the Board, advises
the Board of Directors with respect to the compensation of the principal executive officers. The
Compensation Committee recommendations are then reviewed by the independent members of the Board,
who are then responsible for establishing such compensation. Rands President is responsible for
the compensation levels of its Controller and Office Manager.
Introduction
This Compensation Discussion and Analysis is designed to provide shareholders with an
understanding of our compensation philosophy and objectives as well as the analysis that we
performed in setting executive compensation. It discusses the Compensation Committees
determination of how and why, in addition to what, compensation actions were taken for the Named
Executive Officers (NEOs) who are identified in the Summary Compensation Table.
Objectives of Rands Compensation Programs and What they are Designed to Reward
For its long-term success and the enhancement of long-term stockholder value, Rand depends on
the management and analytical abilities of its NEOs, who are employees of, and are compensated by,
Rand. The Compensation Committees compensation objectives are to provide a critical oversight
function of compensation and appropriate levels of compensation, reward above average corporate
performance, recognize individual initiative and achievement, assist Rand in attracting and
retaining qualified management to contribute to its success, and motivate management to enhance
stockholder value.
Key Elements of Rands Compensation Plans and Why they are Paid:
|
|
|
Base Salary Our philosophy is that base salaries should meet the objectives of
attracting and retaining the executive officers needed to successfully manage the
business. Actual individual salary amounts are not determined by formulas, but instead
reflect the Committees judgment with respect to each executive officers
responsibility, performance, experience, and historical compensation, internal equity
considerations and other factors, including any retention concerns. Rand sets a base
salary for its executive officers at levels that are intended to be appropriate given
the scope of their duties and responsibilities. |
Proxy 15
Proxy Statement Rand Capital Corporation
|
|
|
Bonus Rand may pay annual bonuses to executive officers at levels that are
intended to motivate them to achieve Rands principal business and investment goals and
to bring their total compensation to competitive levels. The bonus is based on a
qualitative consideration of individual and company performance. The Committee
considers, and may make appropriate adjustments for, unusual items that were not
included in the Corporations budget and are deemed to be outside the control of the
executives. |
|
|
|
|
Profit Sharing Plan Rand provides long-term incentives to its executive officers
through its Profit Sharing Plan, which allows them to participate in the growth of its
portfolios and aligns their long term interests with those of Rands shareholders. The
terms of Rands license to maintain its SBIC subsidiary require that it maintain a
Profit Sharing Plan, which provides for payment by Rand of designated percentages of
the net realized capital gains of Rand SBIC. The Committee does not have discretion to
change the amounts due under the Plan. |
|
|
|
|
Equity Although we believe that equity ownership by management aligns managements
interests with increasing stockholder value, restrictions imposed by the Investment
Company Act preclude Rand from offering stock options or other equity incentives to its
executive officers at any time when it also allows them to participate in a profit
sharing plan. Rand has a stock option plan that was adopted in 2001 (see Option
Plan, below), but no options have been or will be granted under it while the Profit
Sharing Plan is in effect. |
|
|
|
|
Standard Employee Benefits Rand also provides standard employee benefits that are
considered appropriate to provide competitive employee compensation and necessary to
attract and retain talented personnel. Rand maintains a 401(k) Plan for its employees.
Under the plan, participants may elect to contribute up to 20% of their compensation
on a pretax basis, to a maximum of $16,500 for 2009. Rand makes a flat contribution of
1% of compensation for each participant and matches participant contributions up to 5%
of compensation. Rand may also elect to contribute annual discretionary amounts under
the 401(k) Plan as determined by the Board. Rand also provides life insurance and
automobile reimbursement benefits to its NEOs. |
How the Amounts of Each Element of the Compensation are Determined and How They Fit Into Rands
Overall Compensation Objectives
Salary and Bonus
The Compensation Committee determined that the salary and bonuses paid to Rand employees
during the 2008 fiscal year were at levels that were in the best interests of shareholders. In
making its determination, the Compensation Committee considered whether the salaries and bonuses
paid by Rand to its executive officers were consistent with the compensation philosophies described
above.
The Analysis Used in Setting Compensation Levels
When making compensation decisions for individual executive officers, the Committee takes many
factors into account, including the individuals role and responsibilities, performance, tenure,
and experience; the overall performance of the Corporation; the recommendations of Board
Proxy 16
Proxy Statement Rand Capital Corporation
Committee Chairs; the individuals historical compensation; and comparison to other executive
officers of the Corporation. The Corporation did not utilize any benchmarking or performance
targets to set its compensation levels.
Specifically, the Committee has considered factors such as:
|
|
|
total compensation in relation to Rands size, and the composition and performance of
its investments; |
|
|
|
|
Rands success in identifying appropriate investment opportunities and returns on its
investments; |
|
|
|
|
the value of Rands assets; including changes resulting from the implementation of
Statements of Financial Accounting Standards (SFAS) 157 fair value measurement, |
|
|
|
|
the responsibilities and duties of the executive officers, and |
|
|
|
|
whether there has been any adjustment or potential recovery of prior award payments
resulting from the restatement of prior performance measures upon which the awards were
based. No such adjustments or recovery has occurred during the year. |
Evaluating Performance
The Committee evaluates the performance of the NEOs on an annual basis, and consults with the
other Directors and Committee Chairs regarding the performance. The Committee also seeks the
advice of the President in connection with the performance evaluation for other NEOs; however, the
President is not present when the Committee meets to evaluate his performance and determine his
compensation.
Individual Performance
The Committee uses discretion in a qualitative evaluation of individual performance and
considers the following factors, among others, in approving the annual incentive awards of the
NEOs: the input of other Board Committee Chairs, the NEOs leadership, management, strategic
planning, business development, and investment returns.
Change of Control and Termination Benefits
The Corporation does not provide any employment contracts, change of control and/or
termination benefits.
Accounting and Tax Treatments of Compensation
The Committees policy is to structure compensation that will be fully deductible where doing
so will further the purposes of executive compensation programs. The Committee also considers it
important to retain flexibility to design compensation programs that recognize a full range of
criteria important to Rands success, even where compensation payable under the programs may not be
fully deductible.
Proxy 17
Proxy Statement Rand Capital Corporation
Profit Sharing Plan
We believe Rands provisions for salaries and bonuses create an appropriate focus on
longer-term objectives and promote executive retention. We also believe that the Profit Sharing
Plan is an effective means of promoting long-term shareholder value and providing for executive
retention.
Under the Profit Sharing Plan, Rand will pay its NEOs aggregate profit sharing payments equal
to 12% of the net realized capital gains of Rand SBIC, net of all realized capital losses and
unrealized depreciation, for the fiscal year, computed in accordance with the Plan and Rands
interpretation of such policies.
The profit sharing payments will be split equally between Rands two NEOs, who are fully
vested in the Plan. Under Investment Company Act requirements, the aggregate amount of benefits
which may be paid or accrued under the Profit Sharing Plan and any other profit sharing plan
maintained by Rand during any fiscal year may not in any event exceed 20% of Rands net income
after taxes for that fiscal year. In accordance with Investment Company Act requirements, a
majority of the members of the Board who were not Interested Persons approved the Profit Sharing
Plan on the basis that it is reasonable and fair to Rands shareholders, does not involve
overreaching of Rand or its shareholders on the part of any person concerned, and is consistent
with the interests of the shareholders of Rand.
No payments have been made or accrued under the Profit Sharing Plan since its inception in
2002.
Conclusion
Through the compensation and incentive structure described above, a significant portion of the
amounts that may be payable as compensation have been, and will continue to be, contingent on
Rands performance, and realization of incentive benefits is closely linked to increases in
long-term shareholder value. Rand remains committed to this philosophy of pay for performance,
recognizing that the competitive market for talented executives and the volatility of Rands
business may result in highly variable compensation from year to year.
Based on the factors identified, the independent members of the Board approved the 2009 salary
levels of the Named Executive Officers in January 2009. Based on the same factors, in January 2009
the Independent Directors approved bonuses of $5,000 payable to each of Mr. Grum and Mr. Penberthy
for their services in 2008. Rand accrued these amounts in its 2008 financial statements.
Proxy 18
Proxy Statement Rand Capital Corporation
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis
required by Item 402(b) of Regulation S-K with management and, based on its review and discussions
with management, the Compensation Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in this proxy statement.
Submitted by the Compensation Committee
|
|
|
|
|
Robert M. Zak, Chair |
|
|
Willis S. McLeese |
|
|
Jayne K. Rand |
The information provided in the preceding Compensation Committee Report will not be deemed to
be soliciting material or filed with the Securities and Exchange Commission or subject to
Regulation 14A or 14C, or to the liabilities of section 18 of the Securities Exchange Act, unless
in the future the Corporation specifically requests that the information be treated as soliciting
material or specifically incorporates it by reference into any filing under the Securities Act or
the Securities Exchange Act.
Proxy 19
Proxy Statement Rand Capital Corporation
Compensation Committee Interlocks and Insider Participation
During the last fiscal year, none of the members of the Compensation Committee was a present
or former officer or employee of Rand or had any relationship with respect to Rand that would
require disclosure under Regulation S-K, Item 404.
Summary Compensation Table
The following table sets forth information with respect to the compensation paid or earned for
the 2008, 2007 and 2006 fiscal years to each named executive officer, and to each officer of Rand
with aggregate compensation from Rand in excess of $100,000. Rand is not part of a fund complex.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other |
|
|
Name and Principal |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
|
Position (1) |
|
Year |
|
Salary (2) |
|
Bonus (2)(3) |
|
(4)(5) |
|
Total(6) |
Allen F. Grum, |
|
|
2008 |
|
|
$ |
165,000 |
|
|
$ |
5,000 |
|
|
$ |
11,400 |
|
|
$ |
198,242 |
|
President & Director |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
16,842 |
(5) |
|
|
|
|
|
|
|
2007 |
|
|
$ |
160,000 |
|
|
$ |
25,000 |
|
|
$ |
12,640 |
|
|
$ |
212,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
14,891 |
(5) |
|
|
|
|
|
|
|
2006 |
|
|
$ |
155,000 |
|
|
$ |
50,000 |
|
|
$ |
9,521 |
|
|
$ |
214,521 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other |
|
|
Name and Principal |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
|
Position (1) |
|
Year |
|
Salary (2) |
|
Bonus (2)(3) |
|
(4)(5) |
|
Total(6) |
Daniel P. Penberthy, |
|
|
2008 |
|
|
$ |
150,000 |
|
|
$ |
5,000 |
|
|
$ |
10,500 |
|
|
$ |
176,036 |
|
Treasurer |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,536 |
(5) |
|
|
|
|
|
|
|
2007 |
|
|
$ |
140,000 |
|
|
$ |
25,000 |
|
|
$ |
11,548 |
|
|
$ |
176,548 |
|
|
|
|
2006 |
|
|
$ |
130,000 |
|
|
$ |
50,000 |
|
|
$ |
7,847 |
|
|
$ |
187,847 |
|
|
|
|
(1) |
|
Mr. Grum is Rands principal executive officer, and Mr. Penberthy is Rands principal financial officer. Neither of them has an employment contract with Rand. |
|
(2) |
|
Represent amounts earned, prior to employee 401(k) contributions made by named executive, as described in footnote (4). |
|
(3) |
|
Bonuses were accrued by Rand at December 31, 2008 and paid in 2009. Bonuses for December 31, 2007 were paid in 2008 and for December 31, 2006 were paid in 2007. |
|
(4) |
|
Included within the indicated compensation payment are contributions by Rand to its 401(k) Plan, which is available to all Rand employees. Under the 401(k) Plan, participants may elect
to contribute up to 20% of their compensation on a pretax basis by salary reduction up to a
maximum of $15,500 for 2008. For eligible employees, Rand makes a flat contribution of 1% of
compensation and matches employee contributions of up to a maximum of 5%. In addition,
Rand may elect to contribute an annual discretionary amount as determined by the Board of
Directors. In 2008, Rand did not make a discretionary contribution to the 401(k) Plan. |
|
(5) |
|
Amount indicated includes the cost of life insurance, disability insurance and business automobile reimbursement benefits. In 2007 for Mr. Penberthy, the aggregate amount of |
Proxy 20
Proxy Statement Rand Capital Corporation
|
|
|
|
|
such compensation was $7,055. In 2006, the aggregate amount of such compensation was less than $10,000 for each Rand executive. |
|
(6) |
|
The total of salary and bonus for each named executive officer is greater than 86% of total compensation for each period listed. |
Option Plan
Rand does not have any outstanding equity awards, options or stock vesting rights.
In July 2001, Rands shareholders approved an Employee Stock Option Plan (the Option Plan).
The Option Plan provides for the award of options to purchase up to 200,000 common shares to
eligible employees. In 2002, Rand placed the Option Plan on inactive status as it developed its
Profit Sharing Plan in connection with the establishment of its SBIC subsidiary. As of December
31, 2008, no stock options had been awarded under the Plan.
Because Section 57(n) of the Investment Company Act prohibits maintenance of a profit sharing
plan for the officers and employees of a Business Development Company when any option, warrant or
right is outstanding under an executive compensation plan, no options will be granted under the
Option Plan while the Profit Sharing Plan is in effect.
Pension Benefits
Rand does not provide any tax-qualified defined benefit plan or supplemental executive
retirement plan, or similar plan that provides for specified retirement payments or benefits.
DIRECTOR COMPENSATION
During 2008, under Rands standard compensation arrangements with Directors, the Chairman of
the Board received an annual Chairman retainer of $5,000; each non-employee Director received an
annual fee of $5,000 plus $1,000 for attendance at each meeting of the Board of Directors. Audit
Committee members received $750 for each meeting attended and Compensation Committee and Governance
and Nominating Committee members received $500 for each meeting attended. If a Board and/or
Committee member attends a meeting telephonically, the member will receive half of the meeting fee.
Rand reimburses Directors for reasonable out of pocket expenses incurred in attending meetings of
the Board.
The following table sets forth information with respect to the compensation paid to or earned
by each Director, excluding named executive officers, for the 2008 fiscal year. Rand did not pay
or accrue any other compensation to the following Directors for the 2008 fiscal year.
|
|
|
|
|
Name |
|
Fees Earned or Paid in Cash |
Erland E. Kailbourne |
|
$ |
13,250 |
|
Ross B. Kenzie |
|
$ |
13,250 |
|
Willis S. McLeese |
|
$ |
9,500 |
|
Reginald B. Newman, II |
|
$ |
14,000 |
|
Jayne K. Rand |
|
$ |
10,500 |
|
Robert M. Zak |
|
$ |
13,750 |
|
Proxy 21
Proxy Statement Rand Capital Corporation
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires Rands Directors and executive
officers, and persons who own more than ten percent of Rands stock, to file with the Securities
and Exchange Commission initial reports of stock ownership and reports of changes to stock
ownership. Reporting persons are required by SEC regulations to furnish Rand with all Section
16(a) reports they file.
To our knowledge, based solely on review of the copies of such reports furnished to Rand and
written representations that no other reports were required, the Corporation believes all Section
16(a) filing requirements applicable to its officers, Directors and greater than ten percent
beneficial owners were complied with during the fiscal year ended December 31, 2008.
Directors and Officers Liability Insurance
Rand has an insurance policy from National Union Fire Insurance Co. of Pittsburgh, PA that
indemnifies (1) Rand for any obligation incurred as a result of its indemnification of its
Directors and officers under the provisions of the New York Business Corporation Law and Rands
by-laws, and (2) Rands Directors and officers as permitted under the New York State Business
Corporation Law and Rands by-laws. The policy covers all Directors and officers of Rand for the
12 months ending December 2009 for a total premium of $41,469. No sums have been paid to Rand or
its officers under the insurance contract.
|
|
|
PROPOSAL 2 |
|
TO AUTHORIZE SALES OF OUR COMMON STOCK UNDER CERTAIN CONDITIONS DURING A ONE YEAR PERIOD
AT PRICES BELOW THEN CURRENT NET ASSET VALUE PER SHARE |
Stockholder Authorization
The 1940 Act generally prohibits us, as a business development company, or BDC, from selling
shares of our common stock at a price below the then current net asset value per share of our
stock, with certain exceptions. One exception to this general restriction would permit us to offer
and sell shares of our common stock at a price below net asset value per share at the time of sale
if our shareholders have approved sales below net asset value per share within the one year period
immediately prior to any such sale, and provided that our Board of Directors makes certain
determinations about the advisability and fairness of the sale before it is made.
Accordingly, we are seeking the approval of our shareholders so that we may, in one or more
public or private offerings, offer and sell shares of our common stock at prices below our
then-current net asset value per share, subject to certain conditions discussed below. If
approved, the authorization would be effective for a period expiring on the earlier of one year
after the date of this Annual Meeting and the date of our 2010 Annual Meeting of Shareholders and
would permit us to engage in such transactions at various times within that period subject to
further approval from the Board of Directors.
Generally, common stock offerings are priced based on the market prices of currently
outstanding shares of common stock. Shareholder approval of this proposal would permit us to
Proxy 22
Proxy Statement Rand Capital Corporation
offer and sell shares of our common stock in accordance with pricing standards that market
conditions may require. If the holders of a majority of our outstanding common shares, and the
holders of a majority of our outstanding common shares who are not affiliated persons of the
Company, approve this proposal, the authority provided will give us greater flexibility in taking
advantage of changing market and financial conditions in connection with an equity offering. As of
the date of this Proxy Statement, the Board has approved making an offering of this type in
principle if the circumstances should warrant doing so, but it has not approved the terms of a
specific offering, nor does it have any immediate plans to do so.
Reasons to Offer Common Stock Below Net Asset Value
We believe that market conditions will continue to provide opportunities to invest new capital
at potentially attractive returns. Over the past several months, U.S. credit markets, including
credit facilities provided by many lending institutions, have experienced significant disruptions
resulting in large part from the default in payments on sub-prime residential mortgages and general
concerns about the decline in the U.S. economy. These disruptions have contributed to significant
stock price volatility for capital providers such as our Company and have made access to capital
more challenging for many smaller businesses. However, the change in credit market conditions also
has created opportunities for capital providers like us because small businesses are selling for
lower prices, and they are generally willing to pay higher interest rates and to accept more
contractual terms that are more favorable to us in their investment agreements. Accordingly, for
firms that continue to have access to capital, we believe that the current environment should
provide investment opportunities on more favorable terms than have been available in prior years.
Our ability to take advantage of these opportunities is dependent upon our access to equity
capital.
As a BDC, we primarily rely on our ability to raise capital through the issuance of common
stock. Therefore, to continue to build our investment portfolio, we endeavor to maintain
consistent access to capital through the public and private equity markets to enable us to take
advantage of investment opportunities as they arise.
Although our common stock traded at a premium to its net asset value during 2007, during 2006
and most of 2008 our common stock traded in a range that was below the then current net asset value
per share. The following table shows the per share net asset value of our shares at the end of
each quarter, the reported high and low closing prices for our common stock for each quarter, and
the closing price as a percentage of net asset value as of the end of each quarter. On March 6,
2009, the last reported closing price of our common stock was $3.60 per share.
Proxy 23
Proxy Statement Rand Capital Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing Price |
|
Premium/(Discount) |
|
Premium/(Discount) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of High Closing Price |
|
of Low Closing Price |
|
|
NAV(1) |
|
High |
|
Low |
|
to NAV(2) |
|
to NAV(2) |
|
Fiscal Year ended
December 31, 2006
|
First Quarter |
|
$ |
1.54 |
|
|
$ |
1.43 |
|
|
$ |
1.17 |
|
|
|
(7 |
)% |
|
|
(24 |
)% |
Second Quarter |
|
$ |
1.58 |
|
|
$ |
1.70 |
|
|
$ |
1.27 |
|
|
|
8 |
% |
|
|
(20 |
)% |
Third Quarter |
|
$ |
1.60 |
|
|
$ |
1.90 |
|
|
$ |
1.31 |
|
|
|
19 |
% |
|
|
(18 |
)% |
Fourth Quarter |
|
$ |
2.93 |
|
|
$ |
4.07 |
|
|
$ |
1.98 |
|
|
|
39 |
% |
|
|
(32 |
)% |
Fiscal Year ended
December 31, 2007
|
First Quarter |
|
$ |
3.01 |
|
|
$ |
5.04 |
|
|
$ |
3.26 |
|
|
|
67 |
% |
|
|
8 |
% |
Second Quarter |
|
$ |
3.04 |
|
|
$ |
3.94 |
|
|
$ |
3.26 |
|
|
|
30 |
% |
|
|
7 |
% |
Third Quarter |
|
$ |
2.98 |
|
|
$ |
4.62 |
|
|
$ |
3.35 |
|
|
|
55 |
% |
|
|
12 |
% |
Fourth Quarter |
|
$ |
3.47 |
|
|
$ |
4.72 |
|
|
$ |
3.50 |
|
|
|
36 |
% |
|
|
1 |
% |
Fiscal Year ended
December 31, 2008
|
First Quarter |
|
$ |
3.45 |
|
|
$ |
4.78 |
|
|
$ |
3.55 |
|
|
|
39 |
% |
|
|
3 |
% |
Second Quarter |
|
$ |
3.45 |
|
|
$ |
4.29 |
|
|
$ |
3.25 |
|
|
|
24 |
% |
|
|
(6 |
)% |
Third Quarter |
|
$ |
3.39 |
|
|
$ |
4.00 |
|
|
$ |
3.25 |
|
|
|
18 |
% |
|
|
(4 |
)% |
Fourth Quarter |
|
$ |
3.54 |
|
|
$ |
4.00 |
|
|
$ |
3.11 |
|
|
|
13 |
% |
|
|
(12 |
)% |
|
|
|
(1) |
|
Net asset value per share is determined as of the last day in the relevant quarter and,
therefore, may not reflect the net asset value per share on the date of the high and low
closing prices. The per share net asset values shown are based on outstanding shares at the
end of each period. |
|
(2) |
|
Calculated as the difference between the net asset value per share and the respective high or
low closing prices as reported by NASDAQ, divided by net asset value per share. |
The current volatility in the credit markets and the uncertainty surrounding the U.S. economy
have led to significant stock market fluctuations, particularly with respect to the stock of
financial services companies like ours. During times of increased price volatility, our common
stock may be more likely to trade at a price below its net asset value per share, which is not
uncommon for BDCs. As noted above, however, the current market dislocation has created, and we
believe will continue to create, favorable opportunities to invest in small businesses, including
opportunities that we believe may increase net asset value over the longer-term, even if financed
by the issuance of common stock at prices below current net asset value per share. We believe that
stockholder approval of the proposal to sell shares below net asset value per share subject to the
conditions detailed below will provide us with the flexibility to invest in such opportunities.
The Board of Directors believes that having the flexibility to issue our common stock below
net asset value per share in certain instances is in the best interests of stockholders. If we are
unable to access the capital markets as attractive investment opportunities arise, our ability to
grow over time could be adversely affected. The inability to raise capital through timely sales of
common
Proxy 24
Proxy Statement Rand Capital Corporation
stock could also have the effect of forcing us to sell assets that we would not otherwise
sell, and such sales could occur at times that are disadvantageous to sell. The issuance of
additional common stock may also have the effect of enhancing liquidity of our common stock on the
NASDAQ Capital Market.
Conditions to Sales below Net Asset Value
If this proposal is approved, we would not sell our common stock below its per share net asset
value unless our Board of Directors reasonably believes there are attractive investment
opportunities that will lead to a long-term increase in net asset value. Moreover, the 1940 Act
provides that, in addition to the approval of shareholders sought by this proposal, the following
conditions must be met before Rand could engage in any sale of common stock at a price below per
share net asset value:
|
|
|
both a majority of Directors who do not have any financial interest in the
offering and a majority of Directors who are not interested persons with
respect to Rand would have to approve the proposed sale; and |
|
|
|
|
both a majority of Directors who do not have any financial interest in the
offering and a majority of Directors who are not interested persons with
respect to Rand, in consultation with the underwriters of the offering if it is
underwritten, would have to determine in good faith, as of a time immediately
prior to the first solicitation of firm commitments to purchase the shares or
immediately prior to the issuance of the shares, that the price at which the shares are to be sold is not less than a price that closely approximates the
market value of the shares, less any distributing commission or discount. |
The term interested person is defined under the 1940 Act to generally include anyone who is
affiliated with a company or related to an affiliated person, any officer or employee of the
company, or any person who has recently had any of certain types of business dealings with the
company.
Impact on Existing Stockholders Who Do Not Participate in the Offering Resulting from the Dilutive
Effect of the Issuance of Shares Below Net Asset Value
Our existing stockholders who do not participate in an offering below Net Asset Value (NAV)
per share or who do not buy additional shares in the secondary market at the same or lower price we
obtain in the offering (after expenses and commissions) face the greatest potential dilution.
These stockholders will experience an immediate decrease (often called dilution) in the NAV of the
shares they hold and their NAV per share. These stockholders will also experience a
disproportionately greater decrease in their participation in our earnings and assets and their
voting power than the increase we will experience in our assets, potential earning power and voting
interests due to the offering. These stockholders may also experience a decline in the market
price of their shares, which often reflects to some degree announced or potential increases and
decreases in NAV per share. This decrease could be more pronounced as the size of the offering and
level of discounts increases.
The following table illustrates the level of net asset value dilution that would be
experienced by a nonparticipating stockholder in three different hypothetical offerings of
different sizes and
Proxy 25
Proxy Statement Rand Capital Corporation
levels of discount from net asset value per share, although it is not possible to predict the
level of market price decline that may occur. Actual sales prices, discounts, expenses and
commissions (if any) may differ from the presentation below.
The example assumes that the issuer has 5,700,000 common shares outstanding, $32,000,000 in
total assets and $12,000,000 in total liabilities. The current NAV and NAV per share under this
example are $20,000,000 and $3.51 respectively. The chart illustrates the dilutive effect on
nonparticipating Stockholder A of:
1. an offering of 285,000 shares (5% of the outstanding shares) at $3.33 per share after
offering expenses and commission (a 5% discount from
NAV).
2. an offering of 570,000 shares (10% of the outstanding shares) at $3.16 per share after
offering expenses and commission (a 10% discount from NAV).
3. an offering of 1,140,000 shares (20% of the outstanding shares) at $2.81 per share after
offering expenses and commission (a 20% discount from NAV).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior to |
|
|
Example 1 |
|
|
Example 2 |
|
|
Example 3 |
|
|
|
Sale |
|
|
5% Offering at |
|
|
10% Offering at |
|
|
20% Offering at |
|
|
|
Below NAV |
|
|
5% Discount |
|
|
10% Discount |
|
|
20% Discount |
|
|
|
|
|
|
|
|
|
|
|
% Change |
|
|
|
|
|
|
% Change |
|
|
|
|
|
|
% Change |
|
Offering Price |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price per Share to Public |
|
|
|
|
|
$ |
3.51 |
|
|
|
|
|
|
$ |
3.33 |
|
|
|
|
|
|
$ |
2.96 |
|
|
|
|
|
Net Proceeds per Share to Issuer |
|
|
|
|
|
$ |
3.33 |
|
|
|
|
|
|
$ |
3.16 |
|
|
|
|
|
|
$ |
2.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease to NAV |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Shares Outstanding |
|
|
5,700,000 |
|
|
|
5,985,000 |
|
|
|
5.00 |
% |
|
|
6,270,000 |
|
|
|
10.00 |
% |
|
|
6,840,000 |
|
|
|
20.00 |
% |
Decrease to NAV per Share after
Offering |
|
|
|
|
|
$ |
(0.01 |
) |
|
|
|
|
|
$ |
(0.03 |
) |
|
|
|
|
|
$ |
(0.12 |
) |
|
|
|
|
|
NAV Per Share |
|
$ |
3.51 |
|
|
$ |
3.50 |
|
|
|
-0.24 |
% |
|
$ |
3.48 |
|
|
|
-0.91 |
% |
|
$ |
3.39 |
|
|
|
-3.32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilution to Nonparticipating Stockholder |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Held by Stockholder A |
|
|
20,000 |
|
|
|
20,000 |
|
|
|
0.00 |
% |
|
|
20,000 |
|
|
|
0.00 |
% |
|
|
20,000 |
|
|
|
0.00 |
% |
Percentage Held by Stockholder A |
|
|
0.351 |
% |
|
|
0.334 |
% |
|
|
-4.76 |
% |
|
|
0.319 |
% |
|
|
-9.09 |
% |
|
|
0.292 |
% |
|
|
-16.67 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Asset Values |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total NAV Held by Stockholder A |
|
$ |
70,200 |
|
|
$ |
70,029 |
|
|
|
-0.24 |
% |
|
$ |
69,564 |
|
|
|
-0.91 |
% |
|
$ |
67,867 |
|
|
|
-3.32 |
% |
Total Investment by Stockholder A |
|
$ |
70,200 |
|
|
$ |
70,200 |
|
|
|
|
|
|
$ |
70,200 |
|
|
|
|
|
|
$ |
70,200 |
|
|
|
|
|
(Assumed to be $3.51 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Dilution to Stockholder A |
|
|
|
|
|
$ |
(171 |
) |
|
|
|
|
|
$ |
(636 |
) |
|
|
|
|
|
$ |
(2,333 |
) |
|
|
|
|
(Total NAV less Total Investment) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAV per Share Held by Stockholder A |
|
|
|
|
|
$ |
3.50 |
|
|
|
|
|
|
$ |
3.48 |
|
|
|
|
|
|
$ |
3.39 |
|
|
|
|
|
Investment per Share Held by
Stockholder A |
|
$ |
3.51 |
|
|
$ |
3.51 |
|
|
|
0.00 |
% |
|
$ |
3.51 |
|
|
|
0.00 |
% |
|
$ |
3.51 |
|
|
|
0.00 |
% |
(Assumed to be $3.51 per Share or Shares
Held Prior to Sale) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilution per Share Held by Stockholder A |
|
|
|
|
|
$ |
(0.01 |
) |
|
|
|
|
|
$ |
(0.03 |
) |
|
|
|
|
|
$ |
(0.12 |
) |
|
|
|
|
(NAV per Share Less Investment per
Share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage Dilution to Stockholder A |
|
|
|
|
|
|
|
|
|
|
-0.24 |
% |
|
|
|
|
|
|
-0.91 |
% |
|
|
|
|
|
|
-3.32 |
% |
(NAV Dilution per Share Divided by
Investment per Share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: Amounts in Table have been rounded off.
Proxy 26
Proxy Statement Rand Capital Corporation
Key Shareholder Considerations
Before voting on this proposal or giving proxies with regard to this matter, shareholders
should consider the potentially dilutive effect of the issuance of shares of our common stock at a
price that is less than the net asset value per share, and should also consider the effect that the
expenses associated with such issuance may have on the net asset value per outstanding share of our
common stock. Any sale of common stock at a price below net asset value per share would result in
an immediate dilution to existing common shareholders. If shares of our common stock are issued at
a price that is substantially below the net asset value per share, the dilution could be
substantial. This dilution would include reduction in the net asset value per share and a
proportionately greater decrease in a shareholders interest in Rands earnings, assets, and voting
power, than the increase in our assets resulting from the issuance and sale of the shares. In
addition, any payment of underwriting compensation and other offering expenses could further
increase the dilution. The Board of Directors will consider the potential dilutive effect of the
issuance of shares at a price below the net asset value per share when considering whether to
authorize any such issuance.
The 1940 Act establishes a connection between common share sale price and net asset value per
share because, when stock is sold at a sale price below net asset value per share, the resulting
increase in the number of outstanding shares is not accompanied by a proportionate increase in the
net assets of the issuer. Further, if our current shareholders do not purchase enough shares to
maintain their relative percentage interests, then regardless of whether the offering is above or
below then current net asset value, their voting power will be diluted.
Rand will not sell shares under an offering if the cumulative dilution of the Corporations
NAV per share under the offering exceeds 15%. This would be measured separately for each offering
by multiplying the difference between the most recently calculated NAV per share prior to such
offering and the public offering price in such offering, times the number of shares sold in the
offering, and then dividing the sum of such amounts for all such offerings by the aggregate NAV of
Rands outstanding common shares determined prior to the first such offering.
Sales by us of our common stock at a discount from NAV pose potential risks for our existing
stockholders whether or not they participate in the offering, as well as for new investors who
participate in the offering.
Rand will immediately stop selling, ceasing its proposed stock offering activities, if
subsequent information is identified that would cause Rands financial statements or offering
documents to be misleading to investors. Rand will also file a post-effective amendment or other
required documents with the SEC, in addition to amending its offering documents to reflect the
material changes that are identified.
Rand will immediately stop selling, ceasing its proposed stock offering activities, if the
Corporation receives, or anticipates receiving, a going-concern, qualified, or other adverse
opinion on its financial statements, based upon which we are selling securities. Rand will also
then file a post-effective amendment or other required documents with the SEC, in addition to
amending its offering documents to reflect such events.
Proxy 27
Proxy Statement Rand Capital Corporation
We intend to use the proceeds of any stock offering by the Corporation to which this
authorization applies to fund growth in our investments and operating expenses of the Corporation.
We do not intend to use the proceeds to repay of any outstanding debt of the Corporation.
Required Vote
Approval of this proposal requires the affirmative vote of the holders of: (1) a majority of
our outstanding voting securities; and (2) a majority of our outstanding voting securities that are
not held by affiliated persons of Rand.
For purposes of this proposal, the 1940 Act defines a majority of the outstanding voting
securities as (1) 67% or more of the voting securities, which in this case consists of shares of
our common stock, present at the meeting if the holders of more than 50% of the outstanding voting
securities of such company are present or represented by proxy; or (2) 50% of the outstanding
voting securities of the company, whichever is less. Abstentions and broker non-votes will have
the effect of a vote against this proposal.
The Board of Directors recommends a vote FOR the proposal to authorize us for a period of
one year to sell shares of our common stock at a price below our net asset value per share at the
time of sale.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.
3. OTHER BUSINESS
Rand does not know of any other matters that will come before the meeting. If any other
matters properly come before the meeting, it is the intention of the persons designated as proxies
to vote in accordance with their best judgment on such matters.
Shareholder Proposals for the 2010 Annual Meeting
Shareholder proposals intended to be presented at the 2010 Annual Meeting of Shareholders must
be received at Rands offices not later than December 4, 2009, to be considered for inclusion in
Rands proxy statement and form of proxy for that meeting.
|
|
|
April 3, 2009
|
|
By Order of the Board of Directors |
|
|
Reginald B. Newman II |
|
|
Chairman of the Board |
It is important that proxies be returned promptly. Shareholders are urged to sign, date and
return the proxy in the enclosed envelope, to which no postage need be affixed if mailed in the
United States. If you attend the meeting you may, if you wish, withdraw your proxy and vote in
person.
Proxy 28
Proxy Statement Rand Capital Corporation
Multiple Copies of our Annual Report and Proxy Statement (Householding)
When more than one holder of Rand common stock shares the same address, we may deliver only
one annual report and one proxy statement to that address unless we have received contrary
instructions from one or more of those shareholders. Similarly, brokers and other intermediaries
holding shares of Rand common stock in street name for more than one beneficial owner with the
same address may deliver only one annual report and one proxy statement to that address if they
have received consent from the beneficial owners of the stock.
Rand will deliver promptly upon written or oral request a separate copy of the annual report
and proxy statement to any shareholder, including a beneficial owner of stock held in street
name, at a shared address to which a single copy of either of those documents was delivered. To
receive additional copies of our annual report and proxy statement, you may call or write Elspeth
A. Donaldson, Office Manager, Rand Capital Corporation, 2200 Rand Building, Buffalo, New York
14203, telephone (716) 853-0802 or email her at edonaldson@randcapital.com. You may also access a
copy of Rands annual report and proxy statement on our website, www.randcapital.com, or via the
SECs home page, www.sec.gov.
You may also contact Ms. Donaldson at the address or telephone number above if you are a
shareholder of record of Rand and you wish to receive a separate annual report and proxy statement
in the future, or if you are currently receiving multiple copies of our annual report and proxy
statement and want to request delivery of a single copy in the future. If your shares are held in
street name and you want to increase or decrease the number of copies of our annual report and
proxy statement delivered to your household in the future, you should contact the broker or other
intermediary who holds the shares on your behalf.
Proxy 29
Proxy Statement Rand Capital Corporation
FINANCIAL STATEMENTS AVAILABLE
A copy of Rands 2008 Annual Report containing audited financial statements accompanies this
Proxy Statement
Rand will provide without charge to each shareholder upon written request a copy (without
exhibits, unless otherwise requested) of Rands Annual Report on Form 10-K required to be filed
with the Securities and Exchange Commission (SEC) for the year ended December 31, 2008. Requests
for copies should be addressed to Investor Relations, Rand Capital Corporation, 2200 Rand Building,
Buffalo, New York, 14203. Requests may also be directed to (716) 853-0802 or to
edonaldson@randcapital.com via email. Copies may also be accessed electronically by means of the
SECs home page on the internet at http://www.sec.gov.
FINAL PAGE OF PROXY
Proxy 30
▼ FOLD AND DETACH HERE AND READ THE REVERSE SIDE ▼
RAND CAPITAL CORPORATION
2200 Rand Building
Buffalo, New York 14203
2009 PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jayne K. Rand and Allen F. Grum as proxies, each with the power to
appoint a substitute, and hereby authorizes them to represent and to vote as designated below all
the shares of Common Stock of Rand Capital Corporation (the Company) held of record by the
undersigned at the annual meeting of shareholders of the Company to be held on April 30, 2009 or
any adjournment hereof.
(Continued and to be dated and signed on reverse side)
|
|
|
|
|
|
|
|
|
▼
FOLD AND DETACH HERE AND READ THE REVERSE SIDE▼
|
|
|
|
|
|
|
|
|
PROXY (Continued from reverse side)
|
|
Please mark
your votes
like this
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR ALL NOMINEES |
|
WITHHOLD |
|
|
1. |
|
Election of Directors: |
|
|
|
|
|
(except as marked to |
|
AUTHORITY FOR |
|
|
|
|
Election of
|
|
|
|
|
|
the contrary below)
|
|
ALL NOMINEES
|
|
|
|
|
|
A.F. Grum W.S. McLeese J.K. Rand |
|
E.E. Kailbourne R.B. Newman II R.M. Zak |
|
R.B. Kenzie |
|
o |
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSTRUCTIONS: To withhold authority to vote for an individual nominee, write that nominees name in
the space provided below: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR
|
|
AGAINST
|
|
|
2.
|
|
Authorize Sales of Common Stock
under certain conditions
During One Year Period at Prices
Below then Current Net Asset
Value Per Share.
|
|
o
|
|
o
|
|
|
|
|
|
|
|
|
|
|
|
3. |
|
In their discretion, the Proxies are authorized to vote
upon such other business as may
properly come before the meeting. |
|
|
|
|
|
|
|
|
|
|
|
|
|
This proxy, when properly executed, will be voted in the
manner directed herein
by the undersigned shareholder. If no direction is made,
the proxy will be voted for proposals 1 and 2. |
|
|
|
|
|
|
|
|
|
|
|
|
|
PLEASE DATE, SIGN AND PROMPTLY RETURN IN THE ENCLOSED ENVELOPE. |
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPANY
ID:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROXY NUMBER:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACCOUNT NUMBER:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature
|
|
|
|
Signature
|
|
|
|
Date |
|
|
|
|
, 2009. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Please sign exactly as names appears above. When signing as a Trustee, Executor or Administrator,
or Guardian, give title as such. All joint owners should sign. If a corporation, please sign in
full corporate name by authorized officer, giving title. If a partnership, please sign in
partnership name by authorized persons.