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:
[X] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] 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:
PRELIMINARY COPY
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. (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 in order 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) AND FOR TELEPHONE AND INTERNET VOTING (WHICH MAY BE
AVAILABLE TO YOU) ARE SET FORTH AT THE END OF THE ATTACHED PROXY STATEMENT.
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 AND DIRECTOR
February 26, 2004
Riverview at Purchase
287 Bowman Avenue
3rd Floor
Purchase, NY 10577
PRELIMINARY COPY
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 intend to resign from 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. Feeney's and Mr. Karpus' resignation and has thus
determined to fix the number of Director seats at five, effective upon Mr.
Feeney's and Mr. Karpus' resignation. (If elected, Mr. Everett would be filling
one of the vacancies created by the resignation of those two Directors.)
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/1 year Mr. Dominianni is a None* See column (4)
Riverview at Purchase retired partner of,
287 Bowman Avenue and is currently a
3rd Floor consultant to, the
Purchase, NY 10577 law firm of Coudert
Age: 72 Brothers LLP. He is
also a consultant to
Air 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/1 year Mr. Hellerman has been None* See column (4)
Riverview at Purchase the principal of
287 Bowman Avenue Hellerman Associates, a
3rd Floor financial and corporate
Purchase, NY 10577 consulting firm, since
Age: 66 the firm's inception in
1993. He is currently
a 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.
Robert C. Knapp Director 1 year/1 year Mr. Knapp is a managing None* None
Millenco, L.P. director of Millennium
666 Fifth Avenue Partners. He is also
8th Floor a director of the
New York, NY 10103 Opportunity Fund, a
Age 37 Cayman Islands private
equity fund listed on
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.
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 S. Everett Director 1 year/no time Mr. Everett is a None* See column (4)
Everett & Solsvig, Inc. served managing director of
10 Rockefeller Plaza Everett & Solsvig, Inc.,
Suite 815 a firm that assists
New York, NY 10020 equity and debt holders
Age: 40 who own positions in
troubled companies. He
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.
OFFICER AND NOMINEE FOR INTERESTED DIRECTOR
-------------------------------------------
Michael Tokarz** Director, 1 year/3 months Mr. Tokarz is Chairman None* See column (4)
Riverview at Purchase Chairman, of The Tokarz Group, a
287 Bowman Avenue and private merchant bank,
3rd Floor Portfolio since 2002. Prior to
Purchase, NY 10577 Manager this, Mr. Tokarz was a
Age: 54 senior General Partner
and Administrative
Partner at 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.
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
-------------------- ------------ -------------- ----------------------- ---------------- ----------------
OFFICERS
--------
Bruce W. Shewmaker Managing Indefinite term/ Mr. Shewmaker serves as None* See column (4)
Riverview at Purchase Director more than 1 month Advisor to Crossbow
287 Bowman Avenue (Director (Served as Ventures Inc, a
3rd Floor until the Director for non-registered
Purchase, NY 10577 date of the approximately investment management
Age: 58 Meeting) 1 year) company. Until June
2003, he has served as
managing director of
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.
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
-------------------- ------------ -------------- ----------------------- ---------------- ----------------
Frances Rebecca Spark Principal Indefinite term/ Ms. Spark has served as None* None
Riverview at Purchase Financial approximately 1 Principal of Spark
287 Bowman Avenue Officer month Consulting LLC, a
3rd Floor consulting company,
Purchase, NY 10577 since 1999.
Age: 45
Jaclyn Lauren Shapiro Secretary Indefinite term/ Ms. Shapiro has worked None* None
Riverview at Purchase less than 1 month in the Fund as portfolio
287 Bowman Avenue development manager
3rd Floor since August 2002.
Purchase, NY 10577 Prior to that, she was
Age: 25 an associate and
business manager with
Draper Fisher Jurvetson
meVC Management Co. LLC,
a former investment
adviser/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
7
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. Feeney, Dominianni
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 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 Section 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 83%.
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 11 meetings during the fiscal
year ended October 31, 2003.
8
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. Karpus, Knapp and
Hellerman, 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, 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. Karpus and Hellerman. The Compensation Committee was established in
March 2003. The Compensation Committee held two (2) meetings during the fiscal
year ended October 31, 2003.
9
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.)
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) (5)
(2) PENSION OR (4) TOTAL COMPENSATION
(1) AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL FROM FUND AND FUND
NAME OF PERSON, COMPENSATION FROM ACCRUED AS PART OF BENEFITS UPON COMPLEX PAID TO
POSITION FUND FUND EXPENSES RETIREMENT DIRECTORS
------------------- ----------------- ------------------- ---------------- ------------------
Emilio Dominianni $49,250.00 None None $49,250.00
Terry Feeney $38,750.00 None None $38,750.00
Gerald Hellerman $74,750.00 None None $74,750.00
George W. Karpus $35,500.00 None None $35,500.00
Robert C. Knapp $60,500.00 None None $60,500.00
Bruce W. Shewmaker* $70,000.00 None None $70,000.00
* 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 salary from the Fund for his services as Managing
Director could approximate $150,000.
10
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.
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 $60,000.)
COMPENSATION TABLE
(3) (5)
(2) PENSION OR (4) TOTAL COMPENSATION
(1) AGGREGATE BENEFITS RETIREMENT BENEFITS ESTIMATED ANNUAL FROM FUND AND FUND
NAME OF PERSON, COMPENSATION FROM ACCRUED AS PART OF BENEFITS UPON COMPLEX PAID TO
POSITION FUND FUND EXPENSES RETIREMENT OFFICERS
--------------- ----------------- ------------------- ---------------- -------------------
Robert S. Everett,* [$ ] None None [$ ]
Interim Chief
Executive Officer
* Mr. Everett commenced services as interim Chief Executive Officer of the
Fund on March 6, 2003. The compensation reflected in the table was paid by the
Fund to Everett & Solsvig, Inc., 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.
Mr. Tokarz, Chairman, Director 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;
and (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
11
$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 also assumed their executive
officer roles following the end of the fiscal year ended October 31, 2003, and,
thus, are not identified in the executive officer compensation table.
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 TO 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
APPROVAL OF PROPOSAL 1 REQUIRES THE VOTE OF 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.
12
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 and broker "non-votes" (that
is, proxies from brokers or nominees indicating that such persons have not
received instructions from the beneficial owners or other persons entitled to
vote shares on a particular matter with respect to which the brokers or nominees
do not have discretionary power) will be treated as shares that are present at
the Meeting. Abstentions and broker "non-votes" 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 and broker "non-votes" 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
13
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 (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.
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
restrictions 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
14
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 Fund, Riverview at Purchase, 287 Bowman
Avenue, 3rd Floor, Purchase, New York 10577, and such proposal must be received
by the Secretary no sooner than December 29, 2004, and no later than January 28,
2004, in the form prescribed in the Fund's By-Laws.
APPRAISAL RIGHTS.
As a stockholder, you will not have appraisal rights in connection with the
proposals described in this Proxy Statement.
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 Director 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.
15
INDEPENDENT PUBLIC ACCOUNTANTS.
The Board, upon approval and recommendation of the Audit Committee, at a meeting
held on January 12, 2004, selected Ernst & Young LLP ("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 it so desires.
The previous independent accountants of the Fund, PricewaterhouseCoopers
("PwC"), resigned as the independent accountants of the Fund on April 16, 2003.
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.
16
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, 2003.
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 policies may be waived, with
respect to the provision of any non-audit services, consistent with the
exceptions provided for federal securities laws. All of the audit and tax
services described above for which E&Y billed the Fund fees 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, FOR STOCKHOLDERS WHO RECEIVE VOTING INSTRUCTION
FORMS FROM THEIR BANKS, BROKERS OR OTHER AGENTS, YOU MAY HAVE THE ABILITY TO
VOTE YOUR SHARES BY THE INTERNET OR BY TELEPHONE.
17
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.
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
A-1
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:
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;
A-2
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 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;
A-3
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 Board 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;
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-4
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 PERCENTAGE
SHARES OWNED OF FUND
HELD
--------------------------------------------------------------------------------
Millenco, L.P. 1,125,500 9.2%
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
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
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
FORM OF PROXY
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:
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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:
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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 proxies 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 Dominiani (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 amendment of 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 Meetings 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)