SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
MEVC DRAPER FISHER JURVETSON FUND I, INC.
(D/B/A MVC CAPITAL)
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 29, 2004
MEVC DRAPER FISHER JURVETSON FUND I, INC.
NOTICE IS HEREBY GIVEN that the annual meeting (the "Meeting") of the
stockholders of meVC Draper Fisher Jurvetson Fund I, Inc. (d/b/a MVC Capital)
(the "Fund") will be held at the offices of Schulte Roth & Zabel LLP, 919 Third
Avenue, New York, NY 10022, on March 29, 2004, 10:00 a.m. (Eastern time) for the
following purposes:
1. to elect five nominees to serve as members of the Board of Directors
of the Fund;
2. to approve an amendment to the Fund's Certificate of Incorporation
changing the name of the Fund from "meVC Draper Fisher Jurvetson
Fund I, Inc." to "MVC Capital, Inc."; and
3. to transact such other business as may properly come before the
meeting or any adjournment thereof.
These items are discussed in greater detail in the Proxy Statement attached
to this Notice. Stockholders of record at the close of business on January 30,
2004 are entitled to receive notice of and to vote at the Meeting. Each
stockholder is invited to attend the Meeting in person. If you cannot be present
at the Meeting, we urge you to mark, sign, date and promptly return the enclosed
Proxy Card so that the Meeting can be held and a maximum number of shares may be
voted. If you received more than one Proxy Card, please be sure to mark, sign,
date and return each one.
IT IS IMPORTANT THAT PROXY CARDS BE RETURNED PROMPTLY.
IF YOU DO NOT EXPECT TO ATTEND THE MEETING, YOU ARE URGED TO MARK, SIGN,
DATE AND RETURN WITHOUT DELAY THE ENCLOSED PROXY CARD(S) IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, SO THAT YOUR
SHARES MAY BE REPRESENTED AT THE MEETING. INSTRUCTIONS FOR THE PROPER EXECUTION
OF THE PROXY CARD(S) ARE SET FORTH AT THE END OF THE ATTACHED PROXY STATEMENT.
INSTRUCTIONS FOR TELEPHONE AND INTERNET VOTING (WHICH MAY BE AVAILABLE TO YOU)
ARE SET FORTH ON THE ENCLOSED PROXY CARD.
A PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED BY THE SUBSEQUENT
EXECUTION AND SUBMISSION OF A REVISED PROXY, BY GIVING WRITTEN NOTICE OF
REVOCATION TO THE FUND AT ANY TIME BEFORE THE PROXY IS EXERCISED OR BY VOTING IN
PERSON AT THE MEETING.
By Order of the Board of Directors,
Michael Tokarz
CHAIRMAN
February 26, 2004
Riverview at Purchase
287 Bowman Avenue
3rd Floor
Purchase, NY 10577
ANNUAL MEETING OF STOCKHOLDERS
OF
MEVC DRAPER FISHER JURVETSON FUND I, INC.
MARCH 29, 2004
RIVERVIEW AT PURCHASE
287 BOWMAN AVENUE
3RD FLOOR
PURCHASE, NEW YORK 10577
(212) 687-8080
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of meVC Draper Fisher Jurvetson
Fund I, Inc. (the "Fund") for use at the annual meeting of the stockholders of
the Fund (the "Meeting"), to be held at the offices of Schulte Roth & Zabel LLP,
919 Third Avenue, New York, NY 10022, on March 29, 2004, 10:00 a.m. (Eastern
time), and at any adjournment thereof. This Proxy Statement, the accompanying
Notice of Annual Meeting of Stockholders, and the enclosed Proxy Card(s) are
expected to be mailed on or about February 26, 2004.
A Proxy Card that is properly executed and returned to the Fund prior to
the Meeting will be voted as provided therein at the Meeting and at any
adjournment thereof. A stockholder executing and returning a Proxy Card has the
power to revoke it at any time before it is exercised by giving written notice
of such revocation to the Chairman of the Fund (the "Chairman"). Signing and
mailing a Proxy Card will not affect your right to give a later proxy or to
attend the Meeting and vote your shares in person.
The Board intends to bring before the Meeting two proposals that are set
forth in the Notice of Annual Meeting of Stockholders and are described in this
Proxy Statement. The persons named as proxies on the enclosed Proxy Card will
vote all shares represented by proxies in accordance with the instructions of
stockholders as specified on the Proxy Card. If no instruction is specified,
shares will be voted: (i) to elect each nominee to serve as a member of the
Board (Proposal 1); (ii) FOR the proposal to amend the Fund's Certificate of
Incorporation (Proposal 2); and (iii) in the discretion of the proxies, on any
other matter which may properly come before the Meeting or any adjournment
thereof.
In addition to soliciting proxies by mail, officers or employees of the
Fund may solicit proxies by telephone, telegraph or in person, without special
compensation.
Most beneficial owners whose shares are held in street name will receive
voting instruction forms from their banks, brokers or other agents, rather than
1
the Fund's Proxy Card. A number of banks and brokerage firms are participating
in a program that offers a means to grant proxies to vote shares via the
Internet or by telephone. If your shares are held in an account with a bank or
broker participating in this program, you may grant a proxy to vote those shares
via the Internet or telephonically by using the web site or telephone number
shown on the instruction form provided to you by your broker or bank.
Only stockholders of record at the close of business on January 30, 2004
(the "Record Date") are entitled to notice of, and to vote at, the Meeting. On
the Record Date, 12,293,042 shares of the Fund were outstanding.
Each stockholder of record on the Record Date is entitled to one vote for
each share held.
In the event that a quorum is not present at the Meeting or at any
adjournment thereof, or in the event that a quorum is present at the Meeting but
sufficient votes to approve one or more of the proposals are not received, one
or more adjournments of the Meeting may be proposed to permit further
solicitation of proxies. A stockholder vote may be taken with respect to the
Fund on some or all matters before any such adjournment if a quorum is present
and sufficient votes have been received for approval. Any adjournment will
require the affirmative vote of a majority of the shares represented at the
Meeting in person or by proxy.
THE FUND HAS ENCLOSED A COPY OF THE FUND'S ANNUAL REPORT FOR THE FISCAL
YEAR ENDED OCTOBER 31, 2003 WITH THIS PROXY STATEMENT. PLEASE KEEP THE ANNUAL
REPORT FOR YOUR FUTURE REFERENCE. ADDITIONAL COPIES OF THE ANNUAL REPORT MAY BE
OBTAINED BY WRITING TO THE FUND AT RIVERVIEW AT PURCHASE, 287 BOWMAN AVENUE, 3RD
FLOOR, PURCHASE, NEW YORK 10577, OR BY CALLING THE FUND AT (212) 687-8080. THE
FUND'S NEXT QUARTERLY REPORT ON FORM 10-Q IS SCHEDULED TO BE FILED WITH THE SEC
ON OR BEFORE MARCH 16, 2004.
PROPOSAL 1
ELECTION OF DIRECTORS
At the Meeting, stockholders will vote on a proposal to elect five nominees
to serve as Directors of the Fund. The nominees include Emilio Dominianni,
Robert S. Everett, Gerald Hellerman, Robert C. Knapp and Michael Tokarz.
Each nominee currently is a member of the Board, except for Mr. Everett.
Mr. Everett was elected as Director at the Fund's February 28, 2003 Annual
Meeting of Stockholders (the "2003 Annual Meeting"), but declined to serve as
Director because he was appointed to serve as interim Chief Executive Officer of
the Fund. Mr. Everett resigned as interim Chief Executive Officer of the Fund in
November 2003, as a result of Mr. Tokarz's appointment as Chairman, the senior
executive officer of the Fund.
Three members of the current Board, Terry Feeney, George W. Karpus and
Bruce W. Shewmaker have informed the Board that they will not stand for
re-election and, thus, will not serve on the Board effective as of the date of
the Meeting. Mr. Shewmaker was appointed an officer of the Fund, Managing
Director, effective November 15, 2003, and will continue to serve the Fund in
such capacity.
2
Except for Mr. Tokarz, who was elected as a Director by the Board effective
November 6, 2003, all of the Directors were elected at the 2003 Annual Meeting,
replacing the previous board in its entirety.
Although several members of the Board were elected to serve terms greater
than one year, the Board has determined to have each of the present Directors,
except for Terry Feeney, George W. Karpus and Bruce W. Shewmaker, stand for
re-election at this time. The Board has determined not to fill the vacancies
that would be created by Mr. Karpus' and Mr. Shewmaker's decision not to stand
for re-election and has thus determined to fix the number of Director seats at
five, effective upon the election of the nominees. (If elected, Mr. Everett
would be filling the vacancy created by Mr. Feeney's decision not to stand for
re-election.)
The persons named as proxies on the enclosed Proxy Card intend, in the
absence of contrary instructions, to vote all proxies they are entitled to vote
in favor of the election of the five nominees named above to serve as the
Directors. Each of the nominees has consented to stand for election and to serve
if elected. If elected, a nominee will serve for a term of one year until the
next annual meeting of stockholders after his or her election. If any nominee
should be unable to serve, an event that is not now anticipated, the persons
named as proxies will vote for such replacement nominee as may be recommended by
the presently serving Directors.
Information regarding the nominees and the officers of the Fund, including
brief biographical information, is set forth below.
(5)
NUMBER OF
PORTFOLIOS IN (6)
(2) FUND COMPLEX OTHER
POSITION(S) (3) OVERSEEN BY DIRECTORSHIPS
HELD TERM OF OFFICE/ (4) DIRECTOR OR HELD BY DIRECTOR
(1) WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NOMINEE FOR OR NOMINEE FOR
NAME, ADDRESS AND AGE FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR DIRECTOR
------------------------ ---------- --------------- ---------------------- ------------- ----------------
NOMINEES FOR INDEPENDENT DIRECTORS
Emilio A. Dominianni Director 1 year/1year Mr. Dominianni is a None* See column (4)
retired Partner of, and
Riverview at Purchase is currently a
287 Bowman Avenue Consultant to, the law
3rd Floor firm of Coudert Brothers
Purchase, NY 10577 LLP. He is also a
Consultant to Air
Age: 72 Liquide America Corp.,
an industrial gas
corporation. Mr.
Dominianni is Director
and Secretary of
American Air Liquide,
Inc. and Air Liquide
International Corp.,
industrial gas
corporations, and a
Director of Mouli
Manufacturing Corp., a
kitchen utensil supply
company.
3
(5)
NUMBER OF
PORTFOLIOS IN (6)
(2) FUND COMPLEX OTHER
POSITION(S) (3) OVERSEEN BY DIRECTORSHIPS
HELD TERM OF OFFICE/ (4) DIRECTOR OR HELD BY DIRECTOR
(1) WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NOMINEE FOR OR NOMINEE FOR
NAME, ADDRESS AND AGE FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR DIRECTOR
------------------------ ---------- --------------- ---------------------- ------------- ----------------
Gerald Hellerman Director 1 year/1year Mr. Hellerman has been None* See column (4)
the Principal of
Riverview at Purchase Hellerman Associates, a
287 Bowman Avenue financial and corporate
3rd Floor consulting firm, since
Purchase, NY 10577 the firm's inception in
1993. He is currently a
Age: 66 Director and President
of The Mexico Equity and
Income Fund, Inc., a
Director of Innovative
Clinical Solutions,
Ltd., a company holding
an investment in a
privately-owned clinical
knowledge company in the
neuropsychiatry illness
field, a Director of
Frank's Nursery &
Crafts, Inc., a company
operating the nation's
largest chain of lawn
and garden retail
stores, a Director of
Brantley Capital
Corporation, and
President of ICSL. Mr.
Hellerman is presently
serving as
Manager-Investment
Advisor for a U.S.
Department of Justice
Settlement Trust. Mr.
Hellerman has served as
a Trustee or Director of
Third Avenue Value
Trust, a Trustee of
Third Avenue Variable
Series Trust, and a
Director of Clemente
Global Growth Fund, Inc.
4
(5)
NUMBER OF
PORTFOLIOS IN (6)
(2) FUND COMPLEX OTHER
POSITION(S) (3) OVERSEEN BY DIRECTORSHIPS
HELD TERM OF OFFICE/ (4) DIRECTOR OR HELD BY DIRECTOR
(1) WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NOMINEE FOR OR NOMINEE FOR
NAME, ADDRESS AND AGE FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR DIRECTOR
------------------------ ---------- --------------- ---------------------- ------------- ----------------
Robert C. Knapp Director 1 year/1year Mr. Knapp is a Managing None* See column (4)
Director of Millennium
Millenco, L.P. Partners. He is also a
666 Fifth Avenue, 8th Floor Director of the Vietnam
New York, NY 10103 Opportunity Fund, a
Cayman Islands private
Age: 37 equity fund listed on
the London Stock
Exchange, and the First
Hungary Fund, a Channel
Islands private equity
fund. In 2001 and 2002,
he served as a Director
of Vietnam Frontier
Fund, a Cayman Islands
investment company.
Robert S. Everett Director 1 year/no time Mr. Everett is a None* See column (4)
served Managing Director of
Everett & Solsvig, Inc. Everett & Solsvig, Inc.,
10 Rockefeller Plaza a firm that assists
Suite 815 equity and debt holders
New York, NY 10020 who own positions in
troubled companies. He
Age: 40 also is currently
serving as Chief
Restructuring Officer of
Cornerstone Propane
Partners, L.P., a
propane distribution
company, and is an
Officer of its
subsidiary, Cornerstone
Propane, L.P. Mr.
Everett is also a
Director of Kriton
Medical Inc, Pangborn
Corp., CSS Holdings
Corp, and Calimet Coach
Company. Mr. Everett
has previously founded
Kulen Capital, L.P., a
middle market private
investment fund, and has
served as Managing
Director of Kulen
Capital Corp. He served
as interim Chief
Executive Officer of the
Fund from March 2003
until November 2003.
5
(5)
NUMBER OF
PORTFOLIOS IN (6)
(2) FUND COMPLEX OTHER
POSITION(S) (3) OVERSEEN BY DIRECTORSHIPS
HELD TERM OF OFFICE/ (4) DIRECTOR OR HELD BY DIRECTOR
(1) WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NOMINEE FOR OR NOMINEE FOR
NAME, ADDRESS AND AGE FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR DIRECTOR
------------------------ ---------- --------------- ---------------------- ------------- ----------------
OFFICER AND NOMINEE FOR INTERESTED DIRECTOR
Michael Tokarz** Director, 1 year/3 months Mr. Tokarz is Chairman of None* See column (4)
Chairman, The Tokarz Group, a
Riverview at Purchase and private merchant bank,
287 Bowman Avenue Portfolio since 2002. Prior to
3rd Floor Manager this, Mr. Tokarz was a
Purchase, NY 10577 senior General Partner and
Administrative Partner at
Age: 54 Kohlberg Kravis Roberts &
Co., a private equity firm
specializing in management
buyouts. He also
currently serves on the
corporate boards of
Conseco, Inc, Walter
Industries, Inc., IDEX
Corporation, Evenflo
Company, Inc., Spalding
Holdings Corporation,
Kamaz Stonewater Control
Systems, Lomonsov,
Athleta, Inc. and Apertio
Ltd. Mr. Tokarz also
serves on the Board of the
University of Illinois
Foundation and its
Investment, Nominating and
Governance Committees and
as Chairman for Illinois
Emerging Technology Fund.
6
(5)
NUMBER OF
PORTFOLIOS IN (6)
(2) FUND COMPLEX OTHER
POSITION(S) (3) OVERSEEN BY DIRECTORSHIPS
HELD TERM OF OFFICE/ (4) DIRECTOR OR HELD BY DIRECTOR
(1) WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NOMINEE FOR OR NOMINEE FOR
NAME, ADDRESS AND AGE FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR DIRECTOR
------------------------ ---------- --------------- ---------------------- ------------- ----------------
OFFICERS
Bruce W. Shewmaker Managing Indefinite term/ Mr. Shewmaker serves as None* See column (4)
Director more than 1 month Advisor to Crossbow
Riverview at Purchase (Director (Served as Ventures Inc, a
287 Bowman Avenue until the Director for non-registered investment
3rd Floor date of the approximately management company. Until
Purchase, NY 10577 Meeting) 1 year) June 2003, he has served
as Managing Director of
Age: 58 Crossbow Ventures Inc, and
a Vice President of
Crossbow Venture Partners
Corp., the general partner
of Crossbow Venture
Partners LP, a licensed
small business investment
company. He also has
served as a Director of
the following Crossbow
portfolio companies: Berdy
Medical Systems, Inc., an
electronic patient record
software company; eMotion,
Inc., a digital media
management software
company; Atlantis
Technologies, Inc., a
water technology holding
company; Direct Capital
Markets, Inc., an
electronic financial
services company; and
ResQNet.com, Inc., a
web-enabling legacy
solutions company. Mr.
Shewmaker is also a
co-founder and Director of
Infrared Imaging Systems,
Inc., a medical devices
company. From 1999 to
2001, he was a Managing
Director of E*Offering
Corp., an investment
banking firm which merged
into Wit SoundView Group
in 2000. He has also
served as a General
Partner of ML Oklahoma
Venture Partners, L.P., a
business development
company.
7
(5)
NUMBER OF
PORTFOLIOS IN (6)
(2) FUND COMPLEX OTHER
POSITION(S) (3) OVERSEEN BY DIRECTORSHIPS
HELD TERM OF OFFICE/ (4) DIRECTOR OR HELD BY DIRECTOR
(1) WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NOMINEE FOR OR NOMINEE FOR
NAME, ADDRESS AND AGE FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR DIRECTOR
------------------------ ---------- --------------- ---------------------- ------------- ----------------
Frances Rebecca Spark Principal Indefinite term/ Ms. Spark has served as None* None
Financial approximately 1 Principal of Spark
Riverview at Purchase Officer month Consulting LLC, a
287 Bowman Avenue consulting company, since
3rd Floor 1999.
Purchase, NY 10577
Age: 45
Jaclyn Lauren Shapiro Secretary Indefinite term/ Ms. Shapiro has worked in None* None
less than 1 month the Fund as Portfolio
Riverview at Purchase Development Manager since
287 Bowman Avenue August 2002. Prior to
3rd Floor that, she was an Associate
Purchase, NY 10577 and Business Manager with
Draper Fisher Jurvetson
Age: 25 meVC Management Co. LLC,
the former investment
sub-adviser to the Fund,
and an Associate at
Newmark & Bank
Company/ONCOR
International, Inc., a
commercial real estate
company.
* Other than the Fund.
** Mr. Tokarz is an Interested Director because he serves as an officer of the
Fund.
BOARD MEETINGS AND COMMITTEES.
The Board currently has an Audit Committee, a Valuation Committee, a
Nominating/Corporate Governance Committee and a Compensation Committee. The
Board has adopted a written charter for the Audit Committee, a copy of which is
attached to this Proxy Statement as Exhibit A.
The current members of the Audit Committee are Messrs. Dominianni, Feeney
and Hellerman, each of whom is an independent audit committee member as defined
in Sections 303.01 (B)(2)(a) and (3) of the NYSE's listing standards and is not
an "interested person," as defined by the Investment Company Act of 1940, as
amended (the "1940 Act"), of the Fund (the "Independent Directors"). Mr.
Hellerman is the Chairman of the Audit Committee. The Audit Committee's primary
purposes are:
o oversight responsibility with respect to: (a) the adequacy of the
Fund's accounting and financial reporting processes, policies and
practices; (b) the integrity of the Fund's financial statements and
the independent audit thereof; (c) the adequacy of the Fund's overall
system of internal controls and, as appropriate, the internal controls
of certain service providers; (d) the Fund's compliance with certain
legal and regulatory
8
requirements; (e) determining the qualification and independence of
the Fund's independent auditors; and (f) the Fund's internal audit
function, if any; and
o oversight of the preparation of any report required to be prepared by
the Committee pursuant to the rules of the Securities and Exchange
Commission ("SEC") for inclusion in the Fund's annual proxy statement
with respect to the election of directors.
The most recent fiscal year of the Fund ended on October 31, 2003. During
that fiscal year, the Audit Committee held seven (7) meetings. In connection
with the Fund's audited financial statements for the fiscal year ended October
31, 2003, the Audit Committee has: (i) reviewed and discussed the Fund's audited
financial statements for the fiscal year ended October 31, 2003; (ii) discussed
with Ernst & Young LLP ("E&Y"), the independent auditors of the Fund, the
matters required to be discussed by Statements on Auditing Standards (SAS) No.
61 (Codification of Statements on Auditing Standards, AU ss. 380); (iii)
received the written disclosureS and a letter from E&Y regarding, and discussed
with E&Y, its independence; and (iv) recommended to the Board that the audited
financial statements of the Fund for the fiscal year ended October 31, 2003, be
included in the Fund's Annual Report to Stockholders for filing with the SEC.
During the fiscal year ended October 31, 2003, the Board (following its
election in February 2003) held 12 meetings. For that fiscal year, each of the
nominees that are incumbent Directors attended at least 75% of the aggregate
number of meetings of the Board and any committee of the Board on which such
nominee served. Currently, 71% of the Directors are Independent Directors. If
all of the nominees are elected by stockholders, that percentage would increase
to 80%.
The Valuation Committee, the principal purpose of which is to determine the
fair values of securities in the Fund's portfolio for which market quotations
are not readily available, is currently comprised of Messrs. Hellerman, Knapp
and Shewmaker. The current Valuation Committee members began serving as such as
of March 13, 2003. The Valuation Committee held seven (7) meetings during the
fiscal year ended October 31, 2003.
The Nominating/Corporate Governance Committee (the "Nominating Committee"),
the principal purposes of which are to consider and nominate persons to serve as
Independent Directors and oversee the composition and governance of the Board
and its committees, is currently comprised of Messrs. Hellerman, Karpus and
Knapp, each of whom is an Independent Director. The Nominating Committee was
established in January 2004. The Board has adopted a written charter for the
Nominating Committee (the "Charter"). A copy of the Charter is available on the
Fund's web site at http://www.mvccapital.com.
The Nominating Committee considers director candidates nominated by
stockholders in accordance with procedures set forth in the Fund's By-Laws. The
Fund's By-Laws provide that nominations may be made by any stockholder of record
of the Fund entitled to vote for the election of directors at a meeting,
provided that such nominations are made pursuant to timely notice in writing to
the Secretary of the Fund. The Nominating Committee then determines the
eligibility of any nominated candidate based on criteria described below. To be
timely,
9
a stockholder's notice must be received at the principal executive offices of
the Fund not less than 60 days nor more than 90 days prior to the scheduled date
of a meeting. A stockholder's notice to the Secretary shall set forth: (a) as to
each stockholder-proposed nominee, (i) the name, age, business address and
residence address of the nominee, (ii) the principal occupation or employment of
the nominee, (iii) the class, series and number of shares of capital stock of
the Fund that are owned beneficially by the nominee, (iv) a statement as to the
nominee's citizenship, and (v) any other information relating to the person that
is required to be disclosed in solicitations for proxies for election of
directors pursuant to Section 14 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the "1934 Act");
and (b) as to the stockholder giving the notice, (i) the name and record address
of the stockholder and (ii) the class, series and number of shares of capital
stock of the corporation that are owned beneficially by the stockholder. The
Fund or the Nominating Committee may require a stockholder who proposes a
nominee to furnish any such other information as may reasonably be required by
the Fund to determine the eligibility of the proposed nominee to serve as
director of the Fund.
In addition, the Nominating Committee considers potential director
candidates with input from various sources, which can include: current
Directors, members of the management team, or an outside search firm. Mr.
Everett, the only nominee not currently serving as a Director, was recommended
to serve as a Board member by all of the Independent Directors as well as the
Chairman. (Indeed, as previously discussed, Mr. Everett was elected by
stockholders to serve as a Director at the 2003 Annual Meeting.) The Nominating
Committee seeks to identify candidates that possess, in its view, strong
character, judgment, business experience and acumen. As a minimum requirement,
any eligible candidate who is not proposed to serve as an "inside Director"
(I.E., a candidate who is not employed or proposed to be employed by the Fund)
must not be an "interested person," as defined by the 1940 Act, of the Fund. The
Nominating Committee also considers, among other factors, certain other
relationships (beyond those delineated in the 1940 Act) that might impair the
independence of a proposed Director.
The Compensation Committee, the principal purpose of which is to review and
set the compensation of the Independent Directors, is currently comprised of
Messrs. Hellerman and Karpus. The Compensation Committee was established in
March 2003. The Compensation Committee held two (2) meetings during the fiscal
year ended October 31, 2003.
The Board, including all of the Independent Directors, has adopted a policy
that any communications by stockholders intended for the Board should be sent to
the Fund at the address listed on the first page hereof and, if management deems
it appropriate, it will forward any such communication to the Board (or
applicable Board member) or disclose it to the Board (or Board member) at its
next regular meeting.
The Board has adopted a policy that encourages all Directors, to the extent
reasonable and practicable, to attend the Fund's annual stockholders' meetings
in person. (The current Directors were not yet serving as such at the time of
the last annual meeting.)
10
DIRECTOR COMPENSATION.
The following table sets forth certain information regarding the
compensation received by Directors for the fiscal year ended October 31, 2003
from the Fund. No compensation is paid by the Fund to Directors who are
"interested persons," as defined by the 1940 Act, of the Fund. (The Fund is not
part of any Fund Complex.) One director listed on the table below, Mr.
Shewmaker, is no longer an Independent Director, since he became an interested
person of the Fund when he was appointed Managing Director, effective November
15, 2003. As of that date, he ceased to receive compensation as a Director.
COMPENSATION TABLE
(3) (4) (5)
PENSION OR ESTIMATED TOTAL COMPENSATION
(2) RETIREMENT ANNUAL FROM FUND
(1) AGGREGATE BENEFITS ACCRUED BENEFITS AND FUND
NAME OF PERSON, COMPENSATION AS PART OF FUND UPON COMPLEX PAID TO
POSITION FROM FUND EXPENSES RETIREMENT DIRECTORS
-------------------- ----------------- ------------------- ---------------- -------------------
Emilio Dominianni $49,250 None None $49,250
Terry Feeney 38,750 None None 38,750
Gerald Hellerman 74,750 None None 74,750
George W. Karpus 35,500 None None 35,500
Robert C. Knapp 60,500 None None 60,500
Bruce W. Shewmaker* 70,000 None None 70,000
* Mr. Shewmaker is no longer an Independent Director, since he became an
interested person of the Fund when he was appointed Managing Director as of
November 2003. As of November 2003, he ceased to receive compensation as an
Independent Director. Mr. Shewmaker's compensation also reflects fees received
for service to the Fund's Investment Committee during the months of September
and October 2003. Those fees include a per-diem fee of $2,000. The Investment
Committee was established principally for the purpose of analyzing potential
investment opportunities relating to the Fund's existing investments. The Board
has since determined to eliminate this Committee in light of the Fund's
retention of Mr. Tokarz. It is expected that in the fiscal year ending October
31, 2004, Mr. Shewmaker's base compensation from the Fund for his services as
Managing Director could approximate $150,000.
At a meeting of the Board held on June 6, 2003, the Board reduced the
annual retainer and per-meeting fees payable to Independent Directors by 50% for
the period from July 1 to October 31, 2003. Subsequently, at a meeting of the
Board held on January 29, 2004, the Board extended this period indefinitely.
Currently (I.E., taking into account the 50% reduction), each Independent
Director is paid an annual retainer of $15,000 and per-meeting (including
Committee meetings) fees of $1,250 (or $750 in the case of telephonic meetings)
by the Fund, and is reimbursed by the Fund for reasonable out-of-pocket
expenses. The Chairman of each Committee of the Board receives an additional
annual retainer of $1,500. The Directors do not receive any pension or
retirement benefits from the Fund.
11
EXECUTIVE OFFICER COMPENSATION.
The following table sets forth certain information regarding the
compensation received by Mr. Everett for the fiscal year ended October 31, 2003.
(Mr. Everett was the only executive officer of the Fund that received
compensation from the Fund in excess of $60,000.)
COMPENSATION TABLE
(3) (4)
PENSION OR ESTIMATED (5)
(2) RETIREMENT ANNUAL TOTAL COMPENSATION
(1) AGGREGATE BENEFITS ACCRUED BENEFITS FROM FUND AND FUND
NAME OF PERSON, COMPENSATION AS PART OF FUND UPON COMPLEX PAID TO
POSITION FROM FUND EXPENSES RETIREMENT OFFICERS
Robert S. Everett,* $264,000 None None $264,000
Interim Chief
Executive Officer
(until November 2003)
* Mr. Everett commenced services as interim Chief Executive Officer of the Fund
on March 6, 2003. The compensation for Mr. Everett's services reflected in the
table was paid by the Fund to Everett & Solsvig, Inc. ("Everett & Solsvig"), a
consulting firm of which Mr. Everett is one of two partners. Mr. Everett
resigned as interim Chief Executive Officer in November 2003. He did not receive
any pension or retirement benefits from the Fund. In addition, certain other
fees were paid to Everett & Solsvig for the provision of other administrative
services to the Fund. Those fees amounted to $94,250.
Mr. Tokarz, Chairman and Portfolio Manager, joined the Fund following the
end of the last fiscal year on November 6, 2003, and thus received no
compensation from the Fund during that year. Mr. Tokarz has entered into a
compensation arrangement with the Fund under which he, as Portfolio Manager,
will be compensated by the Fund based upon his positive performance and will be
paid the lesser of: (a) 20% of the net income of the Fund for the fiscal year;
or (b) the sum of (i) 20% of the net capital gains realized by the Fund in
respect of investments made during his tenure as Portfolio Manager and (ii) the
amount, if any, by which the Fund's total expenses for a fiscal year were less
than two percent of the Fund's net assets (determined as of the last day of the
period).
Effective December 8, 2003, the Fund entered into an operating lease for
its current principal executive offices located at 287 Bowman Avenue, 3rd Floor,
Purchase, New York 10577, which is scheduled to expire on November 30, 2005. The
building at 287 Bowman Avenue is owned by Phoenix Capital Partners, LLC, an
entity which is 97% owned by Mr. Tokarz. Future payments under this lease total
$110,933, with annual minimum payments of $49,517 from December 8, 2003 through
October 31, 2004, $56,682 from November 1, 2004 through October 31, 2005, and
$4,734 from November 1, 2005 through November 30, 2005.
Ms. Shapiro, Mr. Shewmaker and Ms. Spark assumed their officer roles
following the end of the fiscal year ended October 31, 2003 and, thus, are not
identified in the executive officer compensation table.
12
DIRECTOR EQUITY OWNERSHIP.
The following table sets forth, as of the Record Date, with respect to each
Director and nominee, certain information regarding the dollar range of equity
securities beneficially owned in the Fund. The Fund does not belong to a family
of investment companies.
(3)
AGGREGATE DOLLAR RANGE OF EQUITY
(2) SECURITIES OF ALL FUNDS OVERSEEN OR TO
(1) DOLLAR RANGE OF EQUITY BE OVERSEEN BY DIRECTOR OR NOMINEE
NAME OF DIRECTOR OR NOMINEE SECURITIES IN THE FUND IN FAMILY OF INVESTMENT COMPANIES
--------------------------- ---------------------- -------------------------------------
Emilio Dominianni $0-$10,000 $0-$10,000
Terry Feeney None* None*
Gerald Hellerman $0-$10,000 $0-$10,000
George W. Karpus None None
Robert C. Knapp None* None*
Robert S. Everett Over $100,000 Over $100,000
Michael Tokarz Over $100,000 Over $100,000
Bruce W. Shewmaker $0-$10,000 $0-$10,000
* Messrs. Knapp and Feeney are Managing Director and Vice Chairman/Chief
Operating Officer, respectively, of Millennium Partners, L.P. The general
partner of Millennium Partners, L.P., Millennium USA, L.P. and Millenco, L.P. is
Millennium Management, LLC. Millennium USA, L.P., Millennium International, Ltd.
and Millennium Global Estate, L.P. are funds that are limited partners of
Millennium Partners, L.P., each of which holds 444,771 shares, 334,729 shares,
and 145,700 shares, respectively, of the Fund. In addition, Millenco, L.P. holds
196,700 shares of the Fund. Messrs. Knapp and Feeney disclaim all beneficial
ownership in these shares.
VOTE REQUIRED
THE ELECTION OF THE NOMINEES REQUIRES THE AFFIRMATIVE VOTE OF A PLURALITY
OF THE VOTES PRESENT OR REPRESENTED BY PROXY AT THE MEETING AND ENTITLED TO VOTE
ON THE ELECTION OF THE NOMINEES.
The Board recommends a vote "FOR" the election of all of the nominees.
13
PROPOSAL 2
APPROVAL OF AMENDMENT TO THE CERTIFICATE OF INCORPORATION
CHANGING THE NAME OF THE FUND FROM "MEVC DRAPER FISHER
JURVETSON FUND I, INC." TO "MVC CAPITAL, INC."
At a meeting on January 29, 2004, the Board unanimously approved a proposed
amendment to Article I of the Certificate of Incorporation of the Fund to change
the Fund's name from "meVC Draper Fisher Jurvetson Fund I, Inc." to "MVC
Capital, Inc." The Board believes that this change is in the best interests of
the Fund because the Fund currently operates under the d/b/a (I.E., "doing
business as") "MVC Capital." Accordingly, the Board directed that the proposed
amendment be submitted to a vote of the stockholders at the Meeting. The
proposed amendment restates Article I of the Fund's Certificate of Incorporation
as follows:
ARTICLE I
The name of this corporation is MVC Capital, Inc.
If approved, the amendment would be effective and implemented as of a date
designated by the Fund's officers, but no later than August 31, 2004.
VOTE REQUIRED
APPROVAL OF PROPOSAL 2 REQUIRES THE AFFIRMATIVE VOTE OF THE MAJORITY OF THE
OUTSTANDING SHARES OF THE FUND ENTITLED TO VOTE ON THIS PROPOSAL.
The Board recommends a vote "FOR" the proposal to approve the amendment to
the Certificate of Incorporation changing the Fund's name from "meVC Draper
Fisher Jurvetson Fund I, Inc." to "MVC Capital, Inc."
VOTING INFORMATION
A quorum is constituted by the presence in person or by proxy of the
holders of a majority of the outstanding shares of the Fund entitled to vote at
the Meeting. For purposes of determining the presence of a quorum for
transacting business at the Meeting, abstentions will be treated as shares that
are present at the Meeting. Abstentions will have no effect on the outcome of
voting on Proposal 1. However, because approval of Proposal 2 requires the
affirmative vote of the holders of a majority of the outstanding shares entitled
to vote, abstentions on Proposal 2 will have the effect as votes "against" the
proposal.
In the event that a quorum is not present at the Meeting, or in the event
that a quorum is present at the Meeting but sufficient votes to approve any
proposal are not received, the persons named as proxies, or their substitutes,
may propose one or more adjournments of the Meeting to permit the further
solicitation of proxies. Any adjourned session or sessions may be held after the
date set for the Meeting without notice, except announcement at the Meeting (or
any adjournment thereof); provided, that if the Meeting is adjourned to a date
that is more than thirty
14
(30) days after the date for which the Meeting was originally called, written
notice will be provided to stockholders. Any adjournment will require the
affirmative vote of a majority of the shares represented at the Meeting in
person or by proxy. In the event an adjournment is proposed because a quorum is
not present, the persons named as proxies will vote those proxies they are
entitled to vote FOR all of the nominees in favor of such adjournment, and will
vote those proxies required to WITHHOLD on any nominee, against any such
adjournment. In the event a quorum is present but sufficient votes to approve
Proposal 2 are not received, the persons named as proxies will vote those
proxies they are entitled to vote FOR Proposal 2 in favor of such adjournment,
and will vote those proxies required to be voted AGAINST Proposal 2, against any
such adjournment.
Most beneficial owners whose shares are held in street name will receive
voting instruction forms from their banks, brokers or other agents, rather than
the Fund's Proxy Card. A number of banks and brokerage firms are participating
in a program that offers a means to grant proxies to vote shares via the
Internet or by telephone. If your shares are held in an account with a bank or
broker participating in this program, you may grant a proxy to vote those shares
via the Internet or telephonically by using the web site or telephone number
shown on the instruction form received from your broker or bank.
EXPENSES OF SOLICITATION
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Stockholders and the enclosed Proxy Card, as well as
the costs associated with the proxy solicitation, will be borne by the Fund.
OTHER MATTERS AND ADDITIONAL INFORMATION
OTHER BUSINESS AT THE MEETING.
The Board does not intend to bring any matters before the Meeting other
than as stated in this Proxy Statement, and is not aware that any other matters
will be presented for action at the Meeting. If any other matters properly come
before the Meeting, it is the intention of the persons named as proxies to vote
on such matters in accordance with their best judgment, unless specific
instructions have been given.
FUTURE STOCKHOLDER PROPOSALS.
If a stockholder intends to present a proposal at the annual meeting of
stockholders of the Fund to be held in 2005 (the "2005 Annual Meeting") AND
desires to have the proposal included in the Fund's proxy statement and form of
proxy for that meeting, the stockholder must deliver the proposal to the
Secretary of the Fund at the principal executive office of the Fund, Riverview
at Purchase, 287 Bowman Avenue, 3rd Floor, Purchase, New York 10577, and such
proposal must be received by the Secretary no later than October 30, 2004. The
submission of a proposal does not guarantee its inclusion in the proxy statement
and is subject to limitations under the 1934 Act.
Stockholders wishing to present proposals at the 2005 Annual Meeting must
send written notice of such proposals to the Secretary of the Fund at the
principal executive office of the
15
Fund, Riverview at Purchase, 287 Bowman Avenue, 3rd Floor, Purchase, New York
10577, and such proposals must be received by the Secretary no sooner than
December 29, 2004, and no later than January 28, 2005, in the form prescribed in
the Fund's By-Laws.
RESULTS OF VOTING.
Stockholders will be informed of the voting results of the Meeting in the
Fund's quarterly report for the fiscal quarter ending April 30, 2004 on Form
10-Q which will be filed with the SEC on or before June 14, 2004.
ADDITIONAL INFORMATION ABOUT THE FUND
INVESTMENT ADVISER.
The Fund does not have an investment adviser. The Fund's portfolio is
managed internally by Mr. Tokarz, Chairman and Portfolio Manager of the Fund.
ADMINISTRATOR.
U.S. Bancorp Fund Services, LLC, located at 615 East Michigan Street,
Milwaukee, WI 53202, serves as the administrator, custodian and accounting agent
of the Fund.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Section 16(a) of the 1934 Act, and Section 30(h) of the 1940 Act, taken
together, require that the Directors, officers of the Fund and beneficial owners
of more than 10% of the equity securities of the Fund (collectively, "Reporting
Persons") file with the SEC reports of their beneficial ownership and changes in
their beneficial ownership of the Fund's securities. Based solely on its review
of the copies of such reports, the Fund believes that each of the Reporting
Persons who was a Reporting Person during the fiscal year ended October 31,
2003, has complied with applicable filing requirements.
Exhibit B attached hereto identifies holders of more than 5% of the shares
of the Fund's common stock as of the Record Date.
INDEPENDENT PUBLIC ACCOUNTANTS.
The Board, upon approval and recommendation of the Audit Committee, at a
meeting held on January 12, 2004, selected E&Y to serve as the independent
accountants for the Fund for the fiscal year ending October 31, 2004. E&Y was
approved by the Audit Committee and the Board to serve as the independent
accountants for the Fund for the fiscal year ended October 31, 2003, and has
served in such capacity since October 27, 2003. A representative of E&Y will
attend the Meeting to respond to appropriate questions and make a statement, if
he/she so desires.
The previous independent accountants of the Fund, PricewaterhouseCoopers
("PwC"), resigned as the independent accountants of the Fund on April 16, 2003.
16
On April 23, 2003, the Fund filed a report on Form 8-K disclosing PwC's
resignation. During the past two fiscal years of the Fund, PwC's report on the
financial statements for either of the past two years did not contain an adverse
opinion or a disclaimer of opinion, and was not qualified or modified as to
uncertainty, audit scope, or accounting principles. During the two fiscal years
of the Fund ended October 31, 2001 and 2002, respectively, and the subsequent
interim period through April 16, 2003, there were no disagreements with PwC on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PwC would have caused PwC to make reference to the
subject matter of the disagreement in connection with its reports on the
financial statements.
During the Fund's two fiscal years ended October 31, 2001 and 2002,
respectively, and the subsequent interim period prior to the engagement of E&Y,
the Fund (or anyone on its behalf) did not consult E&Y regarding: (i) the
application of accounting principles to a specified transaction, either
completed or proposed; (ii) the type of audit opinion that might be rendered on
the Fund's financial statements; or (iii) any matter that was either the subject
of a disagreement or a reportable event.
AUDIT FEES:
The aggregate fees for professional services rendered by E&Y for the
audit of the Fund's annual financial statements for the fiscal year ended
October 31, 2003 are $95,000.
The aggregate fees billed for professional services rendered by PwC
for the audit of the Fund's annual financial statements for the fiscal year
ended October 31, 2002 were $114,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES:
For the fiscal year ended October 31, 2003, the Fund did not obtain
any financial information systems design and implementation services from
E&Y.
For the fiscal year ended October 31, 2002, the Fund did not obtain
any financial information systems design and implementation services from
PwC.
OTHER FEES:
For the fiscal year ended October 31, 2003, the Fund was not billed
fees for any tax return preparation and other tax-related services provided
by E&Y to the Fund.
For the fiscal year ended October 31, 2002, the Fund was billed fees
of $46,500 for tax return preparation and other tax-related services
provided by PwC to the Fund.
The Audit Committee has considered whether E&Y has maintained its
independence during the fiscal year ended October 31, 2003.
17
The Audit Committee Charter requires that the Audit Committee pre-approve
all audit and non-audit services to be provided to the Fund by the independent
accountants; PROVIDED, HOWEVER, that the Audit Committee may specifically
authorize its Chairman to pre-approve the provision of any non-audit service to
the Fund. Further, the foregoing pre-approval policy may be waived, with respect
to the provision of any non-audit services, consistent with the exceptions
provided for in the federal securities laws. All of the audit and tax services
provided by E&Y for the fiscal year ended October 31, 2003 were pre-approved by
the Audit Committee. For the fiscal year ended October 31, 2003, the Fund's
Audit Committee did not waive the pre-approval requirement of any non-audit
services to be provided to the Fund by E&Y.
By Order of the Board of Directors,
Michael Tokarz, Chairman
Dated: February 26, 2004
STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO HAVE
THEIR SHARES VOTED ARE REQUESTED TO MARK, SIGN AND DATE THE ENCLOSED PROXY CARD
AND RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES. ALTERNATIVELY, YOU MAY HAVE THE ABILITY TO VOTE YOUR SHARES BY
THE INTERNET OR BY TELEPHONE.
18
EXHIBIT A
AMENDED AND RESTATED AUDIT COMMITTEE CHARTER
MEVC DRAPER FISHER JURVETSON FUND I, INC.
January 12, 2004
This charter sets forth the purpose, authority and responsibilities of the
Audit Committee of the Board of Directors (the "Board") of meVC Draper Fisher
Jurvetson Fund I, Inc. (the "Fund"), a Delaware corporation.
PURPOSES
The Audit Committee of the Board (the "Committee") has, as its primary
purposes:
(i) oversight responsibility with respect to: (a) the adequacy of the
Fund's accounting and financial reporting processes, policies and practices; (b)
the integrity of the Fund's financial statements and the independent audit
thereof; (c) the adequacy of the Fund's overall system of internal controls and,
as appropriate, the internal controls of certain service providers; (d) the
Fund's compliance with certain legal and regulatory requirements; (e)
determining the qualification and independence of the Fund's independent
auditors; and (f) the Fund's internal audit function, if any; and
(ii) oversight of the preparation of any report required to be prepared by
the Committee pursuant to the rules of the Securities and Exchange Commission
("SEC") for inclusion in the Fund's annual proxy statement with respect to the
election of directors.
AUTHORITY
The Committee has been duly established by the Board and shall have the
resources and authority appropriate to discharge its responsibilities, including
the authority to retain counsel and other experts or consultants at the expense
of the Fund. The Committee has the authority and responsibility to retain and
terminate the Fund's independent auditors. In connection therewith, the
Committee must evaluate the independence of the Fund's independent auditors and
receive the auditors' specific representations as to their independence.
COMPOSITION AND TERM OF COMMITTEE MEMBERS
The Committee shall be comprised of a minimum of three Directors of the
Board. To be eligible to serve as a member of the Committee, a Director must be
an "Independent Director", which term shall mean a Director who is not an
"interested person," as defined in the Investment Company Act of 1940, as
amended, of the Fund. The members of the Committee shall designate one member to
serve as Chairman of the Committee.
A-1
Each member of the Committee shall serve until a successor is appointed.
The Board must determine whether: (i) the Committee has at least one member
who is an "audit committee financial expert," ("ACFE") as such term is defined
in the rules adopted under Section 407 of the Sarbanes-Oxley Act of 2002; (ii)
the Committee has at least one member who possesses "accounting and financial
management expertise" (as such term is described under the New York Stock
Exchange Listing Requirements) which may be based on past employment expertise,
professional certification in accounting or other comparable experience or
background that indicates an individual's financial sophistication; and (iii)
each member of the Committee possesses sufficient "financial literacy," as
required under the New York Stock Exchange Listing Requirements. The designation
of a person as an ACFE is not intended to impose any greater responsibility or
liability on that person than the responsibility and liability imposed on such
person as a member of the Committee, nor does it decrease the duties and
obligations of other Committee members or the Board.
MEETINGS
The Committee shall meet on a regular basis and no less frequently than
quarterly. The Committee shall meet, at a minimum, within 90 days prior to the
filing of each annual and quarterly report of the Fund on Forms 10-K and 10-Q,
respectively. Periodically, the Committee shall meet to discuss with management
the annual audited financial statements and quarterly financial statements,
including the Fund's disclosures under "Management's Discussion and Analysis of
Financial Condition and Results of Operations." Periodically, the Committee
should meet separately with each of management, any personnel responsible for
the internal audit function and, if deemed necessary, the Fund's administrator
and independent auditors to discuss any matters that the Committee or any of
these persons or firms believe should be discussed privately. The Committee may
request any officer or employee of the Fund, or the Fund's legal counsel (or
counsel to the Independent Directors of the Board) or the Fund's independent
auditors to attend a meeting of the Committee or to meet with any members of, or
consultants to, the Committee.
Minutes of each meeting will be taken and circulated to all members of the
Committee in a timely manner.
Any action of the Committee requires the vote of a majority of the
Committee members present, whether in person or otherwise, at the meeting at
which such action is considered. At any meeting of the Committee, one member of
the Committee shall constitute a quorum for the purpose of taking any action.
DUTIES AND POWERS AND OF THE COMMITTEE
The duties and powers of the Committee include, but are not limited to, the
following:
A-2
o bears direct responsibility for the appointment, compensation,
retention and oversight of the work of the Fund's independent auditors
(including resolution of disagreements between management and the
auditor regarding financial reporting) for the purpose of preparing or
issuing an audit report or performing other audit, review or attest
services for the Fund, and the independent auditors must report
directly to the Committee;
o set the compensation for the independent auditors, such amount to be
paid by the Fund;
o evaluate the independence of the Fund's independent auditors and
receive the auditors' specific representations as to their
independence;
o to the extent required by applicable law, pre-approve: (i) all audit
and non-audit services that the Fund's independent auditors provide to
the Fund and (ii) all non-audit services that the Fund's independent
auditors provide to the Fund's investment adviser and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the Fund, if the
engagement relates directly to the operations and financial reporting
of the Fund (To the extent specifically authorized by the Audit
Committee, the Chairman of the Audit Committee may pre-approve the
provision of any non-audit services to the Fund.);
o meet with the Fund's independent auditors, including private meetings,
as necessary to (i) review the arrangements for and scope of the
annual audit and any special audits; (ii) discuss any matters of
concern relating to the Fund's financial statements, including any
adjustments to such statements recommended by the auditors, or other
results of the audit; (iii) review any audit problems or difficulties
with management's response; (iv) consider the auditors' comments with
respect to the Fund's financial policies, procedures and internal
accounting controls and management's responses thereto; and (v) review
the form of opinion the auditors propose to render to the Directors
and the shareholders of the Fund;
o review reports prepared by the Fund's independent auditors detailing
the fees paid to the Fund's independent auditors for: (i) audit
services (includes all services necessary to perform an audit,
services provided in connection with statutory and regulatory filings
or engagements and other services generally provided by independent
auditors, such as comfort letters, statutory audits, attest services,
consents and assistance with, and review of, documents filed with the
SEC); (ii) audit-related services (covers assurance and due diligence
services, including, employee benefit plan audits, due diligence
related to mergers and acquisitions, consultations and audits in
connection with acquisitions, internal control reviews and
consultations concerning financial accounting and reporting
standards); (iii) tax services (services performed by a professional
staff in the accounting firm's tax division, except those services
related to the audit, including tax compliance, tax planning and tax
advice); and (iv) other services (includes financial information
systems implementation and design);
o ensure that the Fund's independent auditors prepare and deliver
annually to the Committee a written statement (the "Auditors'
Statement") describing: (i) the auditors' internal quality control
procedures; (ii) any material issues raised by the most recent
A-3
internal quality control review or peer review of the auditors, or by
any inquiry or investigation by governmental or professional
authorities within the preceding five years respecting one or more
independent audits carried out by the auditors, and any steps taken to
deal with any such issues; and (iii) all relationships between the
independent auditors and the Fund, including each non-audit service
provided to the Fund and the matters set forth in Independence
Standards Board No. 1;
o prior to filing an annual report with the SEC, receive and review a
written report, as of a date 90 days or less prior to the filing, to
the Committee from the Fund's independent auditors regarding any: (i)
critical accounting policies to be used; (ii) alternative accounting
treatments that have been discussed with the Fund's management along
with a description of the ramifications of the use of such alternative
treatments and the treatment preferred by the independent auditors;
and (iii) material written communications between the auditor and
management of the Fund;
o oversee the Fund's internal controls and annual and quarterly
financial reporting process, including results of the annual audit.
Oversee internal accounting controls relating to the activities of the
Fund's custodian, investment adviser and administrator through the
periodic review of reports, discussions with appropriate officers and
consideration of reviews provided by internal audit staff;
o establish procedures for: (i) the receipt, retention and treatment of
complaints received by the Fund from any source regarding accounting,
internal accounting controls or auditing matters; and (ii) the
confidential, anonymous submission from employees of the Fund and its
service providers of concerns regarding questionable accounting or
auditing matters;
o review of any issues brought to the Committee's attention by
independent public accountants or the Fund's management, including
those relating to any deficiencies in the design or operation of
internal controls which could adversely affect the Fund's ability to
record, process, summarize and report financial data, any material
weaknesses in internal controls and any fraud, whether or not
material, that involves management or other employees who have a
significant role in the Fund's internal controls;
o review and evaluate the qualifications, performance and independence
of the lead partner of the Fund's independent auditors;
o require the Fund's independent auditors to report any instance of an
audit partner of those auditors earning or receiving compensation
based on that partner procuring engagements with the Fund to provide
any services other than audit, review or attest services;
o resolve any disagreements between the Fund's management and
independent auditors concerning the Fund's financial reporting;
o to the extent there are Directors who are not members of the
Committee, report its activities to the on a regular basis and to make
such recommendations with respect to the above and other matters as
the Committee may deem necessary or appropriate;
A-4
o discuss any Fund press releases relating to its financial statements
(to the extent such releases are not discussed by the Valuation
Committee or the Board);
o discuss any policies with respect to risk management;
o set clear hiring policies for employees or former employees of the
independent auditors;
o conduct an annual performance evaluation of the Committee;
o review the Committee's charter at least annually and recommend any
material changes to the Board; and
o review such other matters as may be appropriately delegated to the
Committee by the Board.
A-5
EXHIBIT B
As of the Record Date, to the Fund's knowledge, the following stockholders
owned of record more than 5% of the outstanding shares of Common Stock of the
Fund ("Shares") indicated below. The Fund does not know whether such persons
also beneficially own such shares.
---------------------------------------------------------------- ----------------------------- -----------------------
STOCKHOLDER NAME AND ADDRESS AMOUNT OF SHARES OWNED PERCENTAGE OF FUND
HELD
---------------------------------------------------------------- ----------------------------- -----------------------
Deutsche Bank AG 992,220 8.1%
DB Advisors, L.L.C.
Deutsche Bank AG London Branch
Deutsche Bank Securities Inc.
Taunusanlage 12, D-60325
Frankfurt am Main
Federal Republic of Germany
---------------------------------------------------------------- ----------------------------- -----------------------
Millenco, L.P. 1,121,900 9.1%
Millennium USA, L.P.
Millennium International, Ltd. and
Millenco Global Estate, L.P.
c/o Millennium Management, LLC
666 Fifth Avenue, 8th Floor
New York, NY 10103
---------------------------------------------------------------- ----------------------------- -----------------------
Cannell Capital LLC 1,649,600 13.4%
J. Carlo Cannell
The Anegada Fund Limited
The Cuttyhunk Fund Limited
Tonga Partners, L.P.
GS Cannell Portfolio, LLC and
Pleiades Investment Partners, LP
150 California Street, 5th Floor
San Francisco, CA 94111
---------------------------------------------------------------- ----------------------------- -----------------------
B-1
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing Proxy Cards may be of assistance to you
and avoid the time and expense involved in validating your vote if you fail to
sign your Proxy Card properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears
in the registration on the Proxy Card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the
party signing should conform exactly to the name shown in the
registration on the Proxy Card.
3. ALL OTHER ACCOUNTS: The capacity of the individual signing
the Proxy Card should be indicated unless it is reflected in the form
of registration. For example:
REGISTRATION VALID SIGNATURES
CORPORATE ACCOUNTS
(1) ABC Corp............................................ABC Corp.
(2) ABC Corp............................................John Doe, Treasurer
(3) ABC Corp. c/o John Doe, Treasurer...................John Doe
(4) ABC Profit Sharing Plan.............................John Doe, Treasurer
TRUST ACCOUNTS
(1) ABC Trust...........................................Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d 12/28/78.................Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust. f/b/o John B. Smith Jr. UGMA...John B. Smith
(2) John B. Smith.......................................John B. Smith, Jr.,
Executor
MEVC DRAPER FISHER JURVETSON FUND I, INC.
(D/B/A MVC CAPITAL)
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
MARCH 29, 2004
This proxy is solicited on behalf of the Board of Directors of meVC Draper
Fisher Jurvetson Fund I, Inc. (the "Fund") for use at the annual meeting of
stockholders to be held at 10:00 a.m. (Eastern time), on March 29, 2004, at the
offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, NY 10022 (the
"Meeting"), and relates to the proposals with respect to the Fund set forth in
the Notice of Annual Meeting of Stockholders dated February 26, 2004.
The undersigned hereby appoints Michael Tokarz and Bruce W. Shewmaker and each
of them proxies for the undersigned, with full power of substitution and
revocation, to represent the undersigned and to vote, as designated, on behalf
of the undersigned at the Meeting and any adjournment thereof, all shares of the
Fund which the undersigned is entitled to vote at the Meeting and any
adjournment thereof.
Your vote is important. If this proxy is properly executed and received by the
Fund prior to the Meeting, shares represented by this proxy will be voted as
instructed. Unless indicated to the contrary, this proxy will be voted "FOR"
each of Proposal 1 and 2 and to grant discretionary authority to vote upon such
other business as may properly come before the Meeting or any adjournment
thereof. The undersigned hereby revokes any proxy previously given.
Please mark, sign, date and return promptly in the enclosed envelope if you are
not voting by telephone or the Internet.
Some stockholders whose shares are held in street name will receive voting
instruction forms from their banks, brokers or other agents (rather than the
fund's proxy card) which describe how such stockholders can vote by telephone or
internet. Instead of mailing their proxies, such stockholders may choose one of
the two voting methods outlined below to vote their proxies. Have this card in
hand when calling or logging on.
TO VOTE BY TELEPHONE:
1) Read the Proxy Statement and have the Proxy Card below at hand.
2) Call the Toll Free Number on your voting instruction form.
3) Enter the control number set forth on your voting instruction form and follow
the simple instructions.
TO VOTE BY INTERNET:
1) Read the Proxy Statement and have the Proxy Card below at hand.
2) Go to the web site listed on your voting instruction form.
3) Enter the control number set forth on your voting instruction form and follow
the simple instructions.
Proxies submitted by telephone or the Internet must be received by 12:00 a.m.
(Eastern time) on March 29, 2004.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
MEVC DRAPER FISHER JURVETSON FUND I, INC.
Your vote is important, no matter how many shares you own. You may receive
additional Proxy Cards for other accounts. These are not duplicates; you should
sign and return each Proxy Card in order for your votes to be counted.
Unless otherwise specified in the squares provided, the undersigned's vote will
be cast FOR the proposals set forth below.
THE BOARD OF DIRECTORS OF MEVC DRAPER FISHER JURVETSON FUND I, INC.
(THE "FUND") RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS SET
FORTH BELOW.
1. To elect five nominees to serve as members of the Board of Directors of
the Fund:
(1) Emilio Dominianni (4) Michael Tokarz
(2) Gerald Hellerman (5) Robert S. Everett
(3) Robert C. Knapp
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT*
[ ] [ ] [ ]
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*INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S), MARK
"FOR ALL EXCEPT" AND WRITE THE NUMBER(S) OF THE NOMINEE(S) ON THE LINE ABOVE.
2. To approve an amendment to the Certificate of Incorporation of the Fund
changing the name of the Fund from "meVC Draper Fisher Jurvetson Fund I,
Inc." to "MVC Capital, Inc.":
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting or any adjournment
thereof.
Please sign exactly as name(s) appears hereon. If shares are held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
trustees, guardians etc. should so indicate. If stockholder is a corporation or
partnership, please sign in full corporate or partnership name by authorized
person.
The undersigned hereby acknowledges receipt of the notice of annual meeting of
stockholders and the proxy statement, dated February 26, 2004.
------------------------------------------------ Date --------------, 2004
Signature (PLEASE SIGN WITHIN BOX)
------------------------------------------------ Date --------------, 2004
Signature (Joint Owners)