CAPITAL SOUTHWEST CORP

Major Shareholding Notification • May 30, 2008

SC 13D/A 1 sc13da407020002_05292008.htm AMENDMENT NO. 4 TO THE SCHEDULE 13D sc13da407020002_05292008.htm Licensed to: OGFRW Document Created using EDGARizer 4.0.5.0 Copyright 1995 - 2008 EDGARfilings, Ltd., an IEC company. All rights reserved

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 4) 1

Capital Southwest Corporation

(Name of Issuer)

Common Stock, $1 Par Value

(Title of Class of Securities)

140501107

(CUSIP Number)

STEVEN WOLOSKY, ESQ.

OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP

Park Avenue Tower

65 East 55th Street

New York, New York 10022

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

May 29, 2008

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨ .

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

---

1 The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes ).

CUSIP NO. 140501107

| 1 | NAME
OF REPORTING PERSON NED
SHERWOOD | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) x |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS OO | |
| 5 | CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d)
OR 2(e) | ¨ |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION U.S.A. | |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE
VOTING POWER 49,938 |
| | 8 | SHARED
VOTING POWER 235,882 |
| | 9 | SOLE
DISPOSITIVE POWER 63,606 |
| | 10 | SHARED
DISPOSITIVE POWER 235,882 |
| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 299,488 | |
| 12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES | ¨ |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.70% | |
| 14 | TYPE
OF REPORTING PERSON IN | |

2

CUSIP NO. 140501107

| 1 | NAME
OF REPORTING PERSON ZS
CROSSOVER II GP, L.L.C. | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) x |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS OO | |
| 5 | CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d)
OR 2(e) | ¨ |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION DELAWARE | |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE
VOTING POWER -0- |
| | 8 | SHARED
VOTING POWER 225,660 |
| | 9 | SOLE
DISPOSITIVE POWER -0- |
| | 10 | SHARED
DISPOSITIVE POWER 225,660 |
| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 225,660 | |
| 12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES | ¨ |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.80% | |
| 14 | TYPE
OF REPORTING PERSON PN | |

3

CUSIP NO. 140501107

| 1 | NAME
OF REPORTING PERSON ZS
CROSSOVER II LP | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) x |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS WC | |
| 5 | CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d)
OR 2(e) | ¨ |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION DELAWARE | |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE
VOTING POWER -0- |
| | 8 | SHARED
VOTING POWER 116,332 |
| | 9 | SOLE
DISPOSITIVE POWER -0- |
| | 10 | SHARED
DISPOSITIVE POWER 116,332 |
| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 116,332 | |
| 12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES | ¨ |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.99% | |
| 14 | TYPE
OF REPORTING PERSON PN | |

4

CUSIP NO. 140501107

| 1 | NAME
OF REPORTING PERSON ZS
SPECIAL I L.P. | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) x |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS WC | |
| 5 | CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d)
OR 2(e) | ¨ |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION DELAWARE | |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE
VOTING POWER -0- |
| | 8 | SHARED
VOTING POWER 109,328 |
| | 9 | SOLE
DISPOSITIVE POWER -0- |
| | 10 | SHARED
DISPOSITIVE POWER 109,328 |
| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 109,328 | |
| 12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES | ¨ |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.81% | |
| 14 | TYPE
OF REPORTING PERSON PN | |

5

CUSIP NO. 140501107

| 1 | NAME
OF REPORTING PERSON MRMP
TRUST | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) x |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS OO | |
| 5 | CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d)
OR 2(e) | ¨ |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION SOUTH
DAKOTA | |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE
VOTING POWER 49,938 |
| | 8 | SHARED
VOTING POWER -0- |
| | 9 | SOLE
DISPOSITIVE POWER 49,938 |
| | 10 | SHARED
DISPOSITIVE POWER -0- |
| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 49,938 | |
| 12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES | ¨ |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.28% | |
| 14 | TYPE
OF REPORTING PERSON OO | |

6

CUSIP NO. 140501107

| 1 | NAME
OF REPORTING PERSON THE
NED AND EMILY SHERWOOD FOUNDATION | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) x |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS OO | |
| 5 | CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d)
OR 2(e) | ¨ |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION DELAWARE | |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE
VOTING POWER -0- |
| | 8 | SHARED
VOTING POWER 10,222 |
| | 9 | SOLE
DISPOSITIVE POWER -0- |
| | 10 | SHARED
DISPOSITIVE POWER 10,222 |
| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,222 | |
| 12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES | ¨ |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) LESS THAN
1% | |
| 14 | TYPE
OF REPORTING PERSON OO | |

7

CUSIP NO. 140501107

The following constitutes Amendment No. 4 to the Schedule 13D filed by the undersigned (the “Schedule 13D”). This Amendment No. 4 amends the Schedule 13D as specifically set forth.

Item 3 is hereby amended and restated to read as follows:

Item 3. Source and Amount of Funds or Other Consideration .

The aggregate purchase cost of the 299,488 Shares beneficially owned by the Reporting Persons is approximately $39,359,054. The 116,332 Shares owned by Crossover II and the 109,328 Shares owned by Special I were acquired with their working capital. The 49,938 Shares beneficially owned by MRMP were acquired with MRMP’s investment capital. The 10,222 Shares beneficially owned by the Foundation where acquired with the Foundation’s investment capital.

Item 4 is hereby amended to add the following:

On May 29, 2008 the Reporting Persons delivered a letter to Gary Martin and the members of the Issuer’s Board of Directors expressing their dissatisfaction with the continued substantial market undervaluation of the Issuer due to the Issuer’s poor investment performance history and cavalier valuation procedures. In the letter the Reporting Persons demanded that CSWC take steps to sell its approximately $54 million of unrestricted public securities and to register and distribute its holdings in ALG, HLYS, PHHM and WIRE. The letter is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 5 is hereby amended and restated to read as follows:

Item 5. Interest in Securities of the Issuer .

(a) The aggregate percentage of Shares reported owned the Reporting Persons is based upon 3,889,151 Shares outstanding, which is the total number of Shares outstanding as of May 1, 2008, as reported in the Issuer’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 23, 2008.

As of the date hereof, Crossover II and Special I beneficially owned 116,332 and 109,328 Shares, respectively, constituting approximately 2.99%, and 2.81% respectively, of the Shares outstanding. Crossover GP as the general partner of each of Crossover II and Special I may be deemed to beneficially owned the 225,660 Shares owned in the aggregate by Crossover II and Special I, constituting approximately 5.80% of the Shares outstanding. As a management committee member of Crossover GP, Mr. Sherwood may be deemed to beneficially own the Shares owned by Crossover GP.

As of the date hereof, MRMP beneficially owned 49,938 Shares, constituting 1.28% of the Shares outstanding. As a trustee with sole voting and dispository power over the Shares owned by MRMP, Mr. Sherwood may be deemed to beneficially own the Shares owned by MRMP.

8

CUSIP NO. 140501107

As of the date hereof, the Foundation may be deemed to beneficially own 10,222 Shares, constituting less than 1% of the Shares outstanding. As a director of the Foundation Mr. Sherwood may be deemed to beneficially own the 10,222 Shares owned by the Foundation.

As of date hereof, Mr. Sherwood beneficially owned an additional 13,668 Shares, constituti ng less than 1% of the Shares outstanding, by virtue of a written agreement between Mr. Sherwood and the Warlen L.P. (“Warlen”) that gives Mr. Sherwood approval to control all purchases and sales of the Shares owned by Warlen.

(b) By virtue of his positions with Crossover II, Special I and the Foundation, Mr. Sherwood has shared power to vote and dispose of the 235,882 Shares aggregately owned by Crossover II, Special I and the Foundation. Mr. Sherwood has sole power to vote and dispose of the 49,938 Shares owned by MRMP. By virtue of his agreement with Warlen, Mr. Sherwood has the sole power to dispose of the 13,668 Shares that he may be deemed to beneficially own. Mr. Sherwood does not have voting power over the 13,668 Shares owned by Warlen.

(c) Schedule A annexed hereto lists all transactions in the Securities by the Reporting Persons in the past 60 days. All of such transactions were effected in the open market, except as otherwise noted on Schedule A.

(d) No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the Shares.

(e) Not applicable.

Item 7 is hereby amended to add the following exhibit:

Item 7. Material to be Filed as Exhibits .

99.1. Letter from ZS Crossover II LP to Gary Martin and the Board of Directors of the Issuer, dated May 29, 2008.

9

CUSIP NO. 140501107

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

| Dated: May
30, 2008 | |
| --- | --- |
| By:
ZS Crossover II GP, L.L.C. | |
| Its
General Partner | |
| By: | /s/
Ned Sherwood |
| Name:
Ned Sherwood | |
| Title:
Management Committee Member | |
| ZS
SPECIAL I L.P. | |
| By:
ZS Crossover II GP, L.L.C. | |
| Its
General Partner | |
| By: | /s/
Ned Sherwood |
| Name:
Ned Sherwood | |
| Title:
Management Committee Member | |
| ZS
CROSSOVER II GP, L.L.C. | |
| By: | /s/
Ned Sherwood |
| Name:
Ned Sherwood | |
| Title:
Management Committee Member | |
| MRMP
TRUST | |
| By: | /s/
Ned Sherwood |
| Name:
Ned Sherwood | |
| Title:
Trustee | |
| THE
NED AND EMILY SHERWOOD FOUNDATION | |
| By: | /s/
Ned Sherwood |
| Name:
Ned Sherwood | |
| Title:
Director | |
| /s/
Ned Sherwood | |
| NED
SHERWOOD | |

10

CUSIP NO. 140501107

SCHEDULE A

Transactions in the Shares by the Reporting Persons in the Past 60 Days

Shares Purchased / (Sold) Price Per Share ($) Date of Purchase / Sale

ZS SPECIAL I L.P.

773	117.5059	04/03/08
1,000	114.9885	04/09/08
100	114.3000	05/12/08
1,105	119.6242	05/14/08
11	121.7273	05/15/08
1,454	118.6220	05/16/08
358	118.4064	05/19/08
1,628	118.6673	05/20/08
322	119.5715	05/21/08
1,233	120.6023	05/22/08
300	120.6433	05/22/08
2,342	120.5617	05/23/08
13,789	119.7783	05/27/08
2,558	118.0357	05/28/08

ZS CROSSOVER II LP

259	117.7414	04/04/08
961	119.3505	04/25/08
960	119.1142	04/30/08
1,000	121.4720	05/06/08
(1,000)	119.2845	05/06/08
3,501	115.9086	05/07/08
900	115.5654	05/08/08
2,403	114.9949	05/09/08

11