def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12
(Name of Registrant as Specified In Its Charter)
MVC CAPITAL, INC.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
o Fee paid previously with preliminary materials.
o Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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SEC 1913 (04-04)
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Persons who are to respond to the collection of information contained in this form are not required to respond unless the
form displays a currently valid OMB control number. |
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 27, 2010
MVC CAPITAL, INC.
NOTICE IS HEREBY GIVEN that the annual meeting (the
Meeting) of the stockholders of MVC Capital, Inc.
(the Fund) will be held at the offices of Schulte
Roth & Zabel, 919 Third Avenue, New York, NY 10022, on
April 27, 2010, 10:00 a.m. (Eastern time) for the
following purposes:
1. to elect six nominees to serve as members of the Board
of Directors of the Fund;
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2.
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to consider a proposal to ratify the selection of
Ernst & Young LLP as the Funds independent
registered public accounting firm; and
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3. to transact such other business as may properly come
before the meeting or any adjournment thereof.
The proposals are discussed in greater detail in the Proxy
Statement attached to this Notice. Stockholders of record as of
the close of business on March 1, 2010 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.
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), 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.
Important Notice Regarding the Internet Availability of Proxy
Materials
for the Annual Meeting to be Held on April 27, 2010
The proxy statement is available at:
http://www.proxydocs.com/mvc
(if you are a record stockholder) and
http://www.proxydocs.com/brokers/mvc
(if you are a beneficial owner of shares held in
street name)
By Order of the Board of Directors,
Michael Tokarz
Chairman
March 10, 2010
287 Bowman Avenue
2nd Floor
Purchase, NY 10577
TABLE OF CONTENTS
ANNUAL
MEETING OF STOCKHOLDERS
OF
MVC CAPITAL, INC.
APRIL 27, 2010
287 Bowman Avenue
2nd Floor
Purchase, New York 10577
(914) 510-9400
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors (the
Board) of MVC Capital, 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, 919 Third Avenue, New York, NY 10022, on
April 27, 2010, 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 made available to stockholders on or
about March 10, 2010.
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 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. 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 the proposals that
are set forth in the Notice of Annual Meeting of Stockholders
and that 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. Abstentions and
broker non-votes will each be counted as present for purposes of
determining the presence of a quorum. A broker
non-vote occurs when a broker submits a proxy card with
respect to shares of common stock held in a fiduciary capacity
(typically referred to as being held in street
name), but declines to vote on a particular matter because
the broker has not received voting instructions from the
beneficial owner nor does it have discretionary power to vote on
a particular matter. Under the rules that govern brokers who are
voting with respect to shares held in street name, brokers have
the discretion to vote such shares on certain routine matters,
but not on other matters. For example, brokers have the
discretion to vote on the proposal to ratify the selection of
Ernst & Young LLP as the Funds independent
registered public accounting firm, but not on the election of
directors.
With respect to the proposal to ratify the selection of
Ernst & Young LLP as the Funds independent
registered public accounting firm, abstentions and broker
non-votes will not have any effect on the outcome of the
proposal. With respect to the election of each nominee to serve
as a member of the Board, broker non-votes will have no effect
on the outcome of the proposal.
In addition to soliciting proxies by mail, officers of the Fund
may solicit proxies by telephone or in person, without special
compensation. The Fund may retain a proxy solicitor to assist in
the solicitation of proxies, for which the Fund would pay usual
and customary fees.
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 Funds 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 website or telephone number shown on the instruction
form provided to you by your broker or bank.
1
Only stockholders of record as of the close of business on
March 1, 2010 (the Record Date) are entitled to
notice of, and to vote at, the Meeting. On the Record Date,
24,297,087 shares of the Fund were outstanding.
Each stockholder of record on the Record Date is entitled to one
vote for each share held.
The stockholders of the Fund have no dissenters or
appraisal rights in connection with any of the proposals
described herein.
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 a
proposal 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.
This Proxy Statement and the Funds Annual Report on
Form 10-K
for the fiscal year ended October 31, 2009 (the
Report) are available at
http://www.proxydocs.com/mvc
(if you are a record stockholder) and
http://www.proxydocs.com/brokers/mvc
(if you are a beneficial owner of shares held in street
name). The Report is not to be regarded as
proxy-soliciting material. The Report may be obtained without
charge, by writing to the Fund at 287 Bowman Avenue,
2nd Floor, Purchase, New York 10577, or by calling
toll-free
1-800-579-1639.
The Funds next quarterly report on
Form 10-Q
is scheduled to be filed with the Securities and Exchange
Commission (SEC) on or before March 12,
2010.
2
PROPOSAL 1
ELECTION
OF DIRECTORS
At the Meeting, stockholders will vote on a proposal to elect
six nominees to serve as directors of the Fund
(Directors) (Proposal 1). The
nominees include Emilio Dominianni, Gerald Hellerman, Warren
Holtsberg, Robert Knapp, William Taylor and Michael Tokarz. Each
nominee is currently a member of the Board.
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 six
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
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.
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(5)
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Number of
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Portfolios in
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(6)
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Fund Complex
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Other
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(2)
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(3)
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(4)
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Overseen by
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Directorships
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Positions(s)
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Term of Office/
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Principal
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Director or
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Held by Director
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(1)
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Held with
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Length of Time
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Occupation(s)
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Nominee for
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or Nominee for
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Name, Address and Age
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the Fund
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Served
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During Past 5 Years
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Director
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Director
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Nominees for Independent Directors
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Emilio Dominianni
287 Bowman Avenue
2nd Floor
Purchase, NY 10577
Age: 78
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Director
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1 year/7 years
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Mr. Dominianni is a retired Partner of, and was Special
Counsel to Coudert Brothers LLP, a law firm. He is currently a
director of Stamm International Corporation, Powrmatic Inc., and
Powrmatic of Canada Ltd., manufacturers and distributors of
heating, ventilating, and air conditioning equipment. He was
previously a director of American Air Liquide Inc., Air Liquide
International Corporation, and a Consultant to Air Liquide
America Corp., all manufacturers and distributors of industrial
gases.
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None(1)
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See column 4
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Gerald Hellerman
287 Bowman Avenue
2nd Floor
Purchase, NY 10577
Age: 72
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Director
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1 year/7 years
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Mr. Hellerman owns and has served as Managing Director of
Hellerman Associates, a financial and corporate consulting firm,
since the firms inception in 1993. Mr. Hellerman
currently serves as a director, chief financial officer and
chief compliance officer for The Mexico Equity and Income Fund,
Inc., a director of the Old Mutual Absolute Return and Emerging
Managers fund complex (consisting of six funds), a director of
Brantley Capital Corporation and a director, chief financial
officer and chief compliance officer of Special Opportunities
Fund, Inc. Mr. Hellerman was previously a director of
AirNet Systems, Inc. and a director of TM Entertainment and
Media, Inc.
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None(1)
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See column 4
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3
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(5)
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Number of
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Portfolios in
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(6)
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Fund Complex
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Other
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(2)
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(3)
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(4)
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Overseen by
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Directorships
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Positions(s)
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Term of Office/
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Principal
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Director or
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Held by Director
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(1)
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Held with
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Length of Time
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Occupation(s)
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Nominee for
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or Nominee for
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Name, Address and Age
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the Fund
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Served
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During Past 5 Years
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Director
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Director
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Robert Knapp
Ironsides Partners LLC
100 Summer Street
27th Floor
Boston, MA 02108
Age: 43
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Director
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1 year/7 years
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Mr. Knapp is Managing Director of Ironsides Partners LLC,
which was formed in 2007 and manages assets for institutional
investors, including the Ironsides Opportunity Fund and
Millennium Partners LP, his former employer from
1996-2006.
Mr. Knapp specializes in closed end funds, emerging
markets, distressed debt, and corporate restructurings. He is
Chairman of the Africa Opportunity Fund, and former director of
the Vietnam Opportunity Fund, which are Cayman Islands
investment companies listed on the London Stock Exchange. He is
currently a trustee of Princeton in Asia, Sea Education
Association and Regional Plan Association of NY, NJ, CT. He also
served as a director of the First Hungary Fund, a Channel
Islands private equity fund.
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None(1)
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See column 4
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William Taylor
287 Bowman Avenue
2nd Floor
Purchase, NY 10577
Age: 67
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Director
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1 year/4 years
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Mr. Taylor is a Certified Public Accountant and is
currently a director and Treasurer of Northern Illinois
University Foundation, a Trustee of Writers Theatre and the
President and a director of The William and Dian Taylor
Foundation. From 1976 through May 2005, Mr. Taylor was a
Partner at Deloitte & Touche. From 1997 to 2001,
Mr. Taylor was a director of Deloitte & Touche
USA and from 1999 to 2003 Mr. Taylor was a director of
Deloitte Touche Tohmatsu.
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None(1)
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See column 4
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Officer and Nominees for Interested Directors
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Warren Holtsberg(2)
287 Bowman Avenue
2nd Floor
Purchase, NY 10577
Age: 59
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Director
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1 year/2 years, 11 months
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Mr. Holtsberg currently serves as Co-Head of Portfolio
Management of The Tokarz Group Advisers LLC (the
Adviser), the investment adviser to the Fund.
Mr. Holtsberg founded Motorola Ventures, the venture
capital investment arm for Motorola, Inc. where he led the
worldwide fund for eight years. He was also Corporate Vice
President and Director of Equity Investments at Motorola.
Mr. Holtsberg currently serves as a director of MVC
Partners, LLC. a member of the Board of Directors of the
Illinois Venture Capital Association, the Chicagoland
Entrepreneurship Center, and Illinois Ventures, the venture
investment arm for the University of Illinois, and serves on the
advisory board of the Arcapita Fund.
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None(1)
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See column 4
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4
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(5)
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Number of
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Portfolios in
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(6)
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Fund Complex
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Other
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(2)
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(3)
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(4)
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Overseen by
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Directorships
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Positions(s)
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Term of Office/
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Principal
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Director or
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Held by Director
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(1)
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Held with
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Length of Time
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Occupation(s)
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Nominee for
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or Nominee for
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Name, Address and Age
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the Fund
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Served
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During Past 5 Years
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Director
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Director
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Michael Tokarz(3)
287 Bowman Avenue
2nd Floor
Purchase, NY 10577
Age: 60
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Director
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1 year/6 years, 4 months
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Mr. Tokarz currently serves as Chairman and Portfolio
Manager of the Fund and as Manager of the Adviser.
Mr. Tokarz also is Managing Member of The Tokarz Group, a
private merchant bank, since 2002. Prior to this,
Mr. Tokarz was a 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 Energy, Inc. (Chairman of the board), Walter Investment
Management Corp., Mueller Water Products, Inc., IDEX
Corporation, Mr. Tokarz is an active member of the
endowment committee and Board of Trustees of YMCA in Westchester
County. He is also a member of the Board of the Warwick Business
School in England. He is Chairman Emeritus and is a member of
the Board of the University of Illinois Foundation, and serves
on its executive committee, investment policy committee and
budget and finance committee; he is also a member of the Venture
Capital Subcommittee and serves as a member of the Board of
Managers for Illinois Ventures, LLC. Mr. Tokarz also serves
as the Chairman of the Illinois Emerging Technology
Fund LLC. Mr. Tokarz serves as a director for the
following portfolio companies of the Fund: Custom Alloy
Corporation, Dakota Growers Pasta Company, Harmony
Pharmacy & Health Centers, Inc., HuaMei Capital
Company, MVC Automotive Group B.V., MVC Partners LLC, Ohio
Medical Corporation, Summit Research Labs, Inc. and Turf
Products, LLC. He was previously on the board of Stonewater
Control Systems, Lomonosov, Althleta, Inc., Apertio Ltd., and
Timberland Machines & Irrigation, Inc., which was
formerly a portfolio company of the Fund.
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None(1)
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See column 4
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5
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(5)
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Number of
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Portfolios in
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(6)
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Fund Complex
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Other
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(2)
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(3)
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(4)
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Overseen by
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Directorships
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Positions(s)
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Term of Office/
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Principal
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Director or
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Held by Director
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(1)
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Held with
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Length of Time
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Occupation(s)
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Nominee for
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or Nominee for
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Name, Address and Age
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the Fund
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Served
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During Past 5 Years
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Director
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Director
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Executive Officers
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Bruce Shewmaker
287 Bowman Avenue
2nd Floor
Purchase, NY 10577
Age: 64
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Managing Director
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Indefinite term/6 years, 4 months
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Mr. Shewmaker currently serves as Managing Director of the
Adviser and the Fund. Mr. Shewmaker worked directly for the
Fund from November 2003 through October 2006. Until June 2003,
Mr. Shewmaker served as Managing Director of Crossbow
Ventures Inc., and as a Vice President of Crossbow Venture
Partners Corp., the general partner of Crossbow Venture Partners
LP, a licensed small business investment company. From 2001 to
2007, Mr. Shewmaker was a 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.
Mr. Shewmaker served as a director for the following
portfolio companies of the Fund: Baltic Motors Corporation and
Phoenix Coal Corporation. He currently serves on the Boards of
Foliofn, Inc., MVC Partners LLC, Vendio Services, Inc.,
Velocitius B.V. and Vestal Manufacturing Enterprises, Inc.
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N/A
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N/A
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Peter Seidenberg
287 Bowman Avenue
2nd Floor
Purchase, NY 10577
Age: 40
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Chief Financial
Officer
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Indefinite term/ 4 years, 5 months
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Mr. Seidenberg currently serves as Chief Financial Officer
of the Adviser, in addition to his service as Chief Financial
Officer of the Fund. Mr. Seidenberg joined the Fund in
April 2005 after having previously served as a principal of
Nebraska Heavy Industries, where he worked on engagements
including serving as the chief financial officer of Commerce
One, Inc. Prior to that, Mr. Seidenberg served as the
Director of Finance and Business Development and as Corporate
Controller for Plumtree Software, Inc. Mr. Seidenberg has
also worked at AlliedSignal, and several small manufacturing
companies, where he held roles in finance and operations.
Mr. Seidenberg, on behalf of the Fund, sits on the board of
Ohio Medical Corp and serves as its corporate secretary and on
the board of LHD, Inc. Mr. Seidenberg also serves on the
Board of MVC Partners LLC. He was formerly a director of
Vitality Foodservice, Inc. Mr. Seidenberg also serves on
the Advisor Counsel of the Entrepreneurship@Cornell.
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N/A
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N/A
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6
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(5)
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Number of
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Portfolios in
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(6)
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Fund Complex
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Other
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(2)
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(3)
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(4)
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Overseen by
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Directorships
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Positions(s)
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Term of Office/
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Principal
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Director or
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Held by Director
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(1)
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Held with
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Length of Time
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Occupation(s)
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Nominee for
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or Nominee for
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Name, Address and Age
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the Fund
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Served
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During Past 5 Years
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Director
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Director
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Scott Schuenke
287 Bowman Avenue
2nd Floor
Purchase, NY 10577
Age: 30
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Chief Compliance
Officer
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Indefinite term/5 years, 5 months
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Mr. Schuenke currently serves as the Controller and Chief
Compliance Officer of the Adviser, in addition to his service as
Chief Compliance Officer of the Fund. Prior to joining the Fund
in June 2004, Mr. Schuenke served as a compliance officer
with U.S. Bancorp Fund Services, LLC, from 2002 until he
joined MVC Capital, Inc. in 2004. Mr. Schuenke also served
as the secretary of The Mexico Equity & Income Fund,
Inc. and assistant secretary of Tortoise Energy Infrastructure
Corporation during his tenure at U.S. Bancorp
Fund Services, LLC. Mr. Schuenke serves on the Board
of Vestal Manufacturing Enterpries, Inc. on behalf of the Fund.
Mr. Schuenke is a Certified Public Accountant.
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N/A
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N/A
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Jaclyn
Shapiro-Rothchild
287 Bowman Avenue
2nd Floor
Purchase, NY 10577
Age: 31
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Vice President/
Secretary
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Indefinite term/5 years, 3 months; Indefinite
term/6 years, 2 months
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Ms. Shapiro-Rothchild currently serves as Vice President
and Secretary of the Adviser, in addition to her service as Vice
President and Secretary of the Fund. Prior to joining the Fund
in June 2002, she was an Associate and Business Manager with
Draper Fisher Jurvetson meVC Management Co. LLC, the former
investment sub-adviser to the Fund, and an Associate at The Bank
Companies (acquired by Newmark & Co. Real Estate), a
commercial real estate company. Ms. Shapiro-Rothchild
serves on the board of MVC Partners LLC.
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N/A
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N/A
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(1)
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Other than the Fund.
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(2)
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Mr. Holtsberg is an
interested person, as defined in the 1940 Act, of
the Fund (an Interested Director) because of his
employment with the Adviser.
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(3)
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Mr. Tokarz is an Interested
Director because he serves as an officer of the Fund.
|
Corporate
Governance
The Board has adopted a charter for each of its Audit,
Nominating/Corporate Governance/Strategy and Compensation
Committees, as well as a Corporate Governance Policy. The Audit
Committees charter is annexed hereto as Exhibit B.
The Board has also adopted a Code of Ethics, which applies to,
among others, all of the Funds officers and directors, as
well as a Code of Ethics for Principal Executive and Senior
Financial Executives that applies to and has been signed by the
Principal Executive Officer and the Chief Financial Officer of
the Fund. These materials can be found on the Funds
website at www.mvccapital.com. Waivers, if any, of the
Funds Code of Ethics or Code of Ethics for Principal
Executive and Senior Financial Executives will be promptly
disclosed on the Funds website.
During the fiscal year ended October 31, 2009, the Board
held six (6) meetings. During the last fiscal year, each of
the nominees attended 100% of the aggregate number of meetings
of the Board and any committee of the Board on which such
nominee served. Currently, a majority of the Directors are
Independent Directors (as defined below).
7
Mr. Knapp has been appointed by the Independent Directors
to serve as the Lead Independent Director and, in
that role, serves as the Presiding Director over executive
sessions of non-management directors. Mr. Tokarz, the
Portfolio Manager and principal executive officer of the Fund
and the Adviser, serves as Chairman of the Board. Although he is
an Interested Director (i.e., not independent), the Board
believes that by having the principal executive serve as
Chairman, it can more effectively conduct the regular business
of the Fund and that through its regularly-scheduled executive
sessions, the Independent Directors have adequate opportunity to
serve as an independent, effective check on management and
protect stockholders interests. Furthermore, as summarized
below, the Board has three committees performing critical
functions for the Funds governance and operations: the
Audit, Valuation and Nominating/Corporate Governance/Strategy
Committees and all three are comprised exclusively of
Independent Directors.
Interested parties should communicate with the Lead Independent
Director or with the non-management directors as a group
according to the following procedures established by the Fund
for stockholders communication with the Board: any
communications intended for the Board should be sent to the Fund
at the Funds address and any such communication will be
forwarded to the Board (or applicable Board member) or disclosed
to the Board (or applicable Board member) at its next regular
meeting.
Audit
Committee
The Audit Committees primary purposes are:
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oversight responsibility with respect to: (i) the adequacy
of the Funds accounting and financial reporting processes,
policies and practices; (ii) the integrity of the
Funds financial statements and the independent audit
thereof; (iii) the adequacy of the Funds overall
system of internal controls and risk management processes (to
the extent not separately evaluated and monitored by the full
Board) and, as appropriate, the internal controls of certain
service providers; (iv) the Funds compliance with
certain legal and regulatory requirements; (v) determining
the qualification and independence of the Funds
independent auditors; and (vi) the Funds internal
audit function, if any; and
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oversight of the preparation of any report required to be
prepared by the Committee pursuant to the rules of the SEC for
inclusion in the Funds annual proxy statement with respect
to the election of directors.
|
The members of the Audit Committee are Emilio Dominianni, Gerald
Hellerman and William Taylor. During that fiscal year ended
October 31, 2009, the Audit Committee held five
(5) meetings. The Audit Committee oversees the Funds
risk management processes, including risks relating to
investments, compliance and valuations, and the Funds
Disclosure Controls and Procedures (including internal controls
over financial reporting).
Valuation
Committee
The Valuation Committee, the principal purpose of which is to
determine the fair values of securities in the Funds
portfolio for which market quotations are not readily available,
is currently comprised of Messrs. Dominianni, Hellerman and
Knapp. Mr. Knapp is the Chairman of the Valuation
Committee. The Valuation Committee held four (4) meetings
during the fiscal year ended October 31, 2009.
Nominating
Committee
The Nominating/Corporate Governance/Strategy Committee (the
Nominating Committee), the principal purposes of
which are to consider and nominate persons to serve as
Independent Directors, to oversee the composition and governance
of the Board and its committees and to provide strategic
direction with respect to the Fund, is currently comprised of
Messrs. Dominianni, Hellerman, Knapp and Taylor, each of
whom is an Independent Director. Mr. Dominianni is the
Chairman of the Nominating Committee. The Nominating Committee
was established in January 2004.
The Nominating Committee considers director candidates nominated
by stockholders in accordance with procedures set forth in the
Funds By-Laws. The Funds 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. The Nominating Committee
then
8
determines the eligibility of any nominated candidate based on
criteria described below. To be timely, a stockholders
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 stockholders
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 nominees 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
1934 Act, and the rules and regulations promulgated
thereunder; 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. The Nominating Committee held one
(1) meeting during the fiscal year ended October 31,
2009.
In addition, the Nominating Committee considers potential
director candidates with input from various sources, which may
include: current Directors, members of the management team, or
an outside search firm. 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 Interested Director (i.e., a candidate who is not
employed or proposed to be employed by the Fund or the Adviser)
must not be an interested person, as defined by the
Investment Company Act of 1940, as amended (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. Although the Board does not
have a formal diversity policy, it endeavors to comprise itself
of members with a variety of professional backgrounds. (Each of
the nominees different professional backgrounds is set
forth above beginning on page 5.)
In determining to propose each of the nominees for election by
stockholders as Directors, the Nominating Committee and the
Board considered a variety of factors, including each of the
nominees performance as current Directors and their
professional background and experience. In particular, the
Nominating Committee and the Board considered that during the
tenures of Messrs. Dominianni, Hellerman, Knapp and Tokarz,
all of whom represent differing professional backgrounds, since
2003, the Fund has witnessed a significant turnaround in
performance. The Board also considered Mr. Taylors
experience as a former partner at a major accounting firm and
Mr. Holtsbergs experience as the founder of the
venture capital arm of Motorola, Inc. The Nominating Committee
members considered that Messrs. Tokarz and Holtsberg are
not Independent Directors but recognized that they represent the
Adviser, and, as such, help foster the Boards direct
access to information regarding the Adviser, which is the
Funds most significant service provider.
Compensation
Committee
The Compensation Committee, the principal purpose of which is to
oversee the compensation of the Independent Directors, is
currently comprised of Messrs. Hellerman and Knapp.
Mr. Hellerman is the Chairman of the Compensation
Committee. The Compensation Committee was established in March
2003. The Compensation Committee held two (2) meetings
during the fiscal year ended October 31, 2009.
The Board has adopted a policy that encourages all Directors, to
the extent reasonable and practicable, to attend the Funds
annual stockholders meetings in person. All of the
Directors attended the last annual meeting.
9
Director
and Executive Officer Compensation
The Funds officers do not receive any direct compensation
from the Fund. The Fund does not currently have any employees
and does not expect to have any employees. Services necessary
for its business are provided by individuals who are employees
of the Adviser, and the Funds administrator,
U.S. Bancorp Fund Services, LLC (the
Administrator), pursuant to the terms of the
Funds amended and restated investment advisory and
management agreement (the Advisory Agreement) and
administration agreement. Each of the Funds executive
officers is an employee of the Adviser. The Funds
day-to-day investment operations are managed by the Adviser.
The following table sets forth compensation paid by us in all
capacities during the fiscal year ended October 31, 2009 to
all of our Directors. Our Directors have been divided into two
groups Interested Directors and Independent
Directors. The Interested Directors are interested
persons, as defined in the 1940 Act, of the Fund. No
compensation is paid to the Interested Directors. (The Fund is
not part of any Fund Complex.) No information has been
provided with respect to executive officers of the Fund because
the Funds executive officers do not receive any direct
compensation from the Fund.
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Fees Earned or
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|
All Other
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|
Name of Person, Position
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Paid in Cash
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Stock Awards
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Compensation(1)
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Total
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Interested Directors
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|
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|
|
|
|
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|
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Warren Holtsberg, Director
|
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|
None
|
|
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|
None
|
|
|
|
None
|
|
|
|
None
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|
Michael Tokarz, Chairman and Portfolio Manager
|
|
|
None
|
|
|
|
None
|
|
|
|
None
|
|
|
|
None
|
|
Independent Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Emilio Dominianni, Director
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$
|
61,250
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|
|
|
None
|
|
|
|
None
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|
|
$
|
61,250
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|
Gerald Hellerman, Director
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$
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68,333
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|
|
|
None
|
|
|
|
None
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|
|
$
|
68,333
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|
Robert Knapp, Director
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|
$
|
68,333
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|
|
|
None
|
|
|
|
None
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|
|
$
|
68,333
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|
William Taylor, Director
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$
|
58,333
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|
|
|
None
|
|
|
|
None
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|
|
$
|
58,333
|
|
|
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|
(1)
|
|
Directors do not receive any
pension or retirement benefits from the Fund.
|
The fees payable to Independent Directors and the fees payable
to the Chairman of the Audit Committee, Valuation Committee, and
Nominating Committee are as follows: Each Independent Director
is paid an annual retainer of $70,000 ($80,000 for each of the
Chairman of the Audit Committee and the Chairman of the
Valuation Committee) for up to five in-person Board meetings and
committee meetings per year. In the event that more than five
in-person Board meetings and committee meetings occur, each
Independent Director will be paid an additional $1,000 for each
in-person meeting. Each Independent Director is also reimbursed
by the Fund for reasonable out-of-pocket expenses. The Directors
do not receive any pension or retirement benefits from the Fund.
10
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.
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(2)
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(3)
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Dollar Range
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Aggregate Dollar Range of Equity
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of Equity
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|
Securities of All Funds Overseen or to
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(1)
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|
Securities in
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be Overseen by Director or Nominee
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Name of Director or Nominee
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|
the Fund
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in Family of Investment Companies
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Independent Directors
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Emilio Dominianni
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Over $100,000
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Over $100,000
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Gerald Hellerman
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Over $100,000
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Over $100,000
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Robert Knapp
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Over $100,000
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Over $100,000
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William Taylor
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Over $100,000
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|
Over $100,000
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Interested Directors
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Warren Holtsberg(1)
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$50,001 - $100,000
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$50,001 - $100,000
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Michael Tokarz(2)
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Over $100,000
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|
Over $100,000
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|
(1)
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|
Mr. Holtsberg is an Interested
Director because of his employment with the Adviser.
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|
(2)
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|
Mr. Tokarz is an Interested
Director because he serves as an officer of the Fund.
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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.
11
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Audit Committee and the Board, including a majority of those
members who are not interested persons, as defined
in the 1940 Act, of the Fund (the Independent
Directors), have selected Ernst & Young LLP as
the independent registered public accounting firm for the Fund
for the fiscal year ending October 31, 2010. On
January 26, 2010, the Audit Committee recommended, and the
Board approved Ernst & Young LLP as the independent
registered public accounting firm to serve as auditors for the
Fund for the fiscal year ending October 31, 2010.
Ernst & Young LLP began service as the Funds
independent registered public accounting firm effective
October 27, 2003. The firm of Ernst & Young LLP
has extensive experience in investment company accounting and
auditing. A representative of Ernst & Young LLP will
attend the Meeting to respond to appropriate questions and make
a statement, if
he/she so
desires.
Neither the Funds Certificate of Incorporation nor the
Funds By-Laws require that the stockholders ratify the
selection of Ernst & Young LLP as the Funds
independent registered public accounting firm. The Board is
submitting this matter to the stockholders as a matter of common
industry practice. If the stockholders do not ratify the
selection, the Audit Committee will reconsider whether or not to
retain Ernst & Young LLP, but may retain such
independent registered public accounting firm. Even if the
selection is ratified, the Audit Committee and the Board, in
their discretion, may change the selection at any time during
the year if they determine that such change would be in the best
interests of the Fund. It is intended that the persons named in
the accompanying form of proxy will vote FOR the ratification of
the selection of Ernst & Young LLP.
Ernst & Young LLP, in accordance with Public Company
Accounting Oversight Board Rule 3526, has confirmed to the
Audit Committee that they are independent accountants with
respect to the Fund.
The following are the aggregate fees billed to the Fund by
Ernst & Young LLP during each of the last two fiscal
years:
Audit
Fees:
The aggregate fees billed for professional services rendered by
Ernst & Young LLP for the audit of the Funds
annual financial statements for the fiscal years ended
October 31, 2009 and October 31, 2008 were $328,000
and $328,000, respectively.
Audit-Related
Fees:
The aggregate fees billed by Ernst & Young LLP for
assurance and related services that were reasonably related to
the performance of the audit or review of our financial
statements for the fiscal years ended October 31, 2009 and
October 31, 2008 were $60,000 and $60,000, respectively.
Tax
Fees:
The aggregate fees billed by Ernst & Young LLP for
services rendered with respect to tax compliance, tax advice and
tax planning for the fiscal years ended October 31, 2009
and October 31, 2008 were $51,000 and $58,845, respectively.
All
Other Fees:
The aggregate fees billed by Ernst & Young LLP for any
other products or services for the fiscal years ended
October 31, 2009 and October 31, 2008 were $0 and
$110,000, respectively.
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
12
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 Ernst & Young
LLP for the fiscal year ended October 31, 2009 were
pre-approved by the Audit Committee or its Chairman. For the
fiscal year ended October 31, 2009, the Funds Audit
Committee did not waive the pre-approval requirement with
respect to any non-audit services provided to the Fund by
Ernst & Young LLP.
Report of
Audit Committee
The information contained in this report shall not be deemed
to be soliciting material or filed or
incorporated by reference in future filings with the SEC, or
subject to the liabilities of Section 18 of the
1934 Act, except to the extent that we specifically
incorporate it by reference into a document filed under the
Securities Act of 1933 or the 1934 Act.
The independent accountants are responsible for performing an
independent audit of the Funds financial statements in
accordance with the standards of the Public Company Accounting
Oversight Board (United States) and expressing an opinion as to
the conformity of such financial statements with generally
accepted accounting principles in the United States of America
and for auditing and reporting on the effectiveness of the
Funds internal control over financial reporting.
In connection with the Funds audited financial statements
for the fiscal year ended October 31, 2009, the Audit
Committee has: (i) reviewed and discussed with management
the Funds audited financial statements for the fiscal year
ended October 31, 2009; (ii) discussed with
Ernst & Young LLP, 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 § 380); (iii) received
the written disclosures and a letter from Ernst &
Young LLP regarding, and discussed with Ernst & Young
LLP, its independence; and (iv) authorized the inclusion of
the audited financial statements of the Fund for the fiscal year
ended October 31, 2009 in the Funds Annual Report to
Stockholders for filing with the SEC.
Each of the current members of the Audit Committee,
Messrs. Dominianni, Hellerman and Taylor, is considered an
Independent Director. Each member of the Audit Committee meets
the applicable independence and experience requirements, and the
Board has determined that Mr. Hellerman is an audit
committee financial expert, as defined under
Item 407(d)(5) of
Regulation S-K
of the 1934 Act. Mr. Hellerman is the Chairman of the
Audit Committee.
Based on the review and discussions referred to above, the Audit
Committee has approved, and recommended to the Board that it
approve, Ernst & Young LLP to serve as the Funds
independent registered public accounting firm for the year
ending October 31, 2010 and that the selection of
Ernst & Young LLP be submitted to the Funds
stockholders for ratification.
The Audit Committee
Gerald Hellerman (Chairman)
Emilio Dominianni
William Taylor
VOTE
REQUIRED
The affirmative vote of a majority of the votes cast at the
Meeting is required to ratify the selection of
Ernst & Young LLP as independent registered
public accounting firm for the Fund for the fiscal year ending
October 31, 2010.
The Board
recommends a vote FOR the ratification of the
selection of
Ernst & Young LLP as the independent registered public
accounting firm for the
Fund for the fiscal year ending October 31, 2010.
13
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 will be treated as shares that
are present at the Meeting.
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
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 for the proposals, the persons named as proxies will
vote those proxies they are entitled to vote FOR all of the
nominees or FOR the ratification of the selection of
Ernst & Young LLP in favor of such adjournment, and
will vote those proxies required to WITHHOLD on any nominee or
AGAINST the ratification of the selection of Ernst &
Young LLP, 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 Funds 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 website 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, if necessary, 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 2010 and
desires to have the proposal included in the Funds proxy
statement and form of proxy for that meeting, the stockholder
must deliver the proposal to the Secretary at the principal
executive office of the Fund, 287 Bowman Avenue, 2nd Floor,
Purchase, New York 10577, and such proposal must be received by
the Secretary by November 10, 2010. The submission of a
proposal does not guarantee its inclusion in the proxy statement
and is subject to limitations under the 1934 Act. The
proposals must be submitted in a manner consistent with
applicable law and the Funds By-Laws.
Results
of Voting.
Stockholders will be informed of the voting results of the
Meeting in a
Form 8-K,
which will be filed with the SEC on or before May 4, 2010.
14
ADDITIONAL
INFORMATION ABOUT THE FUND
Other
Information about the Investment Adviser.
The following individuals are the principal executive officers
of our investment adviser. The principal business address of
each such person is
c/o The
Tokarz Group Advisers LLC, at 287 Bowman Avenue, 2nd Floor,
Purchase, NY 10577. The principal occupations of the following
individuals are set forth under Election of
Directors in Proposal 1 above.
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Name
|
|
Position
|
|
Michael Tokarz
|
|
Manager
|
Warren Holtsberg
|
|
Co-Head of Portfolio Management
|
Bruce Shewmaker
|
|
Managing Director
|
Peter Seidenberg
|
|
Chief Financial Officer
|
Scott Schuenke
|
|
Controller and Chief Compliance Officer
|
Jaclyn Shapiro-Rothchild
|
|
Vice President and Secretary
|
Brokerage.
During the 2009 fiscal year, the Fund paid no brokerage
commissions to any broker: (i) that is an affiliated person
of the Fund; (ii) that is an affiliated person of such
person; or (iii) an affiliated person of which is an
affiliated person of the Fund, any principal underwriter,
administrator or the Adviser.
Administrator.
U.S. Bancorp Fund Services, LLC, located at
777 E. Wisconsin Avenue, Milwaukee, WI 53202, serves
as the administrator, custodian and accounting agent of the Fund.
Certain
Relationships and Related Transactions.
The Fund has procedures in place for the review, approval and
monitoring of transactions involving the Fund and certain
persons related to the Fund. For example, the Fund has a Code of
Ethics that generally prohibits, among others, any officer or
director of the Fund from engaging in any transaction where
there is a conflict between such individuals personal
interest and the interests of the Fund. As a business
development company, the 1940 Act also imposes regulatory
restrictions on the Funds ability to engage in certain
related party transactions. However, the Fund is permitted to
co-invest in certain portfolio companies with its affiliates to
the extent consistent with applicable law or regulation and, if
necessary, subject to specified conditions set forth in an
exemptive order obtained from the SEC. During the past five
fiscal years, no transactions were effected pursuant to the
exemptive order. As a matter of policy, our Board has required
that any related-party transaction (as defined in Item 404
of
Regulation S-K)
must be subject to the advance consideration and approval of the
Independent Directors, in accordance with applicable procedures
set forth in Section 57(f) of the 1940 Act.
The principal equity owner of the Adviser is Mr. Tokarz,
our Chairman. Our senior officers and Mr. Holtsberg have
other financial interests in the Adviser (i.e., based on
the Advisers performance). In addition, our officers and
the officers and employees of the Adviser may serve as officers,
directors or principals of entities that operate in the same or
related line of business as we do or of investment funds managed
by the Adviser or our affiliates. However, the Adviser intends
to allocate investment opportunities in a fair and equitable
manner. Our Board has approved a specific policy in this regard
which was set forth in our
Form 10-K
filed on December 22, 2009.
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
Funds securities. Based solely on its review of the copies
of such reports, the Fund believes that
15
each of the Reporting Persons who was a Reporting Person during
the fiscal year ended October 31, 2009 has complied with
applicable filing requirements.
Exhibit A attached hereto identifies holders of more than
5% of the shares of the Funds common stock as of the
Record Date.
By Order of the Board of Directors
Michael Tokarz
Chairman
March 10, 2010
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.
16
EXHIBIT A
The following table sets forth, as of February 22, 2010,
each stockholder who owned more than 5% of the Funds
outstanding shares of common stock, each current director, each
nominee for director, the Funds executive officers, and
the directors and executive officers as a group. Unless
otherwise indicated, the Fund believes that each beneficial
owner set forth in the table has sole voting and investment
power.
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Amount of
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Percentage of
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Shareholder Name and Address
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Shares Owned
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Fund Held
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Integrated Core Strategies (US) LLC
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1,469,770
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(1)
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6.05
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%
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Millennium Global Estate LP
Millennium International, Ltd.
Millennium Partners, L.P. and
Millennium USA LP
c/o Millennium
Management, LLC
666 Fifth Avenue, 8th Floor
New York, NY 10103
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Western Investment, LLC
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1,528,664
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(2)
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6.29
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%
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Western Investment Hedged Partners LP
Western Investment Institutional Partners LLC
Western Investment Total Return Master Fund Ltd.
Western Investment Total Return Partners, L.P. and
Arthur D. Lipson
c/o Western
Investment LLC
7050 S. Union Park Center
Suite 590
Midvale, UT 84047
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Wynnefield Partners Small Cap Value, L.P.
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2,091,912
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(3)
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8.61
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%
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Wynnefield Partners Small Cap Value, L.P. I
Wynnefield Small Cap Value Offshore Fund, Ltd.
Channel Partnership II, L.P.
Wynnefield Capital, Inc. Profit Sharing Plan
Wynnefield Capital Management, LLC
Wynnefield Capital, Inc.
Nelson Obus
Joshua Landes
c/o Wynnefield
Capital Management LLC
450 Seventh Avenue
Suite 509
New York, NY 10123
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Interested Directors
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Warren Holtsberg
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7,000
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*
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Michael Tokarz
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678,374.92
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2.79
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%
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Independent Directors
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Emilio Dominianni
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31,994.38
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*
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Gerald Hellerman
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53,114.49
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*
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Robert Knapp
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485,866.53
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1.99
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%
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William Taylor
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42,554.03
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*
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A-1
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Amount of
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Percentage of
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Shareholder Name and Address
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Shares Owned
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Fund Held
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Executive Officers
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Bruce Shewmaker
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19,606.34
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*
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Peter Seidenberg
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4,118.00
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*
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Scott Schuenke
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1,669.35
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*
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Jaclyn Shapiro-Rothchild
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2,311.33
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*
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All directors and executive officers as a group (10 in
total)
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1,326,498.04
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5.46
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%
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*
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Less than 1%.
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(1)
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Based upon information provided by
Millennium Partners, L.P.
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(2)
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Based upon information contained in
Schedule 13G filed with the SEC on February 11, 2010.
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(3)
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Based upon information contained in
Schedule 13G filed with the SEC on February 16, 2010.
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A-2
EXHIBIT B
MVC
CAPITAL, INC.
AMENDED
AND RESTATED AUDIT COMMITTEE CHARTER
January 26,
2010
This charter sets forth the purpose, authority and
responsibilities of the Audit Committee of the Board of
Directors (the Board) of MVC Capital, 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 Funds accounting and financial reporting
processes, policies and practices; (b) the integrity of the
Funds financial statements and the independent audit
thereof; (c) the adequacy of the Funds overall system
of internal controls and risk management processes (to the
extent not separately evaluated and monitored by the full Board)
and, as appropriate, the internal controls of certain service
providers; (d) the Funds compliance with certain
legal and regulatory requirements; (e) determining the
qualification and independence of the Funds independent
auditors; and (f) the Funds 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 Funds 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 Funds independent auditors. In connection
therewith, the Committee must evaluate the independence of the
Funds 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 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
individuals 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,
B-1
respectively. Periodically, the Committee shall meet to discuss
with management the annual audited financial statements and
quarterly financial statements, including the Funds
disclosures under Managements 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 Funds 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 Funds legal counsel (or
counsel to the Independent Directors of the Board) or the
Funds 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, (i) any two members of the
Committee or (ii) one member of the Committee if this
member is the Chairman 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:
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bears direct responsibility for the appointment, compensation,
retention and oversight of the work of the Funds
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;
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set the compensation for the independent auditors, such amount
to be paid by the Fund;
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evaluate the independence of the Funds independent
auditors and receive the auditors specific representations
as to their independence;
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to the extent required by applicable law, pre-approve:
(i) all audit and non-audit services that the Funds
independent auditors provide to the Fund and (ii) all
non-audit services that the Funds independent auditors
provide to the Funds 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.);
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meet with the Funds 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
Funds 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 managements response; (iv) consider the
auditors comments with respect to the Funds
financial policies, procedures and internal accounting controls
and managements responses thereto; and (v) review the
form of opinion the auditors propose to render to the Directors
and the shareholders of the Fund;
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review reports prepared by the Funds independent auditors
detailing the fees paid to the Funds 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 firms 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);
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B-2
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ensure that the Funds 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;
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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 Funds independent
auditors regarding any: (i) critical accounting policies to
be used; (ii) alternative accounting treatments that have
been discussed with the Funds 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;
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oversee the Funds 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 Funds custodian, investment adviser
and administrator through the periodic review of reports,
discussions with appropriate officers and consideration of
reviews provided by internal audit staff;
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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;
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review of any issues brought to the Committees attention
by independent public accountants or the Funds management,
including those relating to any deficiencies in the design or
operation of internal controls which could adversely affect the
Funds 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 Funds
internal controls;
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review and evaluate the qualifications, performance and
independence of the lead partner of the Funds independent
auditors;
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require the Funds 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;
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resolve any disagreements between the Funds management and
independent auditors concerning the Funds financial
reporting;
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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;
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discuss and approve any Fund press releases relating to its
financial statements (to the extent such releases are not
discussed and approved by the Valuation Committee, the Board or
the Chairman of the Committee);
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to the extent not separately evaluated and monitored by the full
Board, oversee the Funds risk management processes,
including risks relating to investments, compliance and
valuations, and discuss any policies with respect to risk
management;
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set clear hiring policies for employees or former employees of
the independent auditors;
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conduct an annual performance evaluation of the Committee;
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review the Committees charter at least annually and
recommend any material changes to the Board; and
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review such other matters as may be appropriately delegated to
the Committee by the Board.
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B-3
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:
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Registration
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Valid Signatures
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CORPORATE ACCOUNTS
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(1) ABC Corp.
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ABC Corp.
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(2) ABC Corp.
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John Doe, Treasurer
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(3) ABC Corp.
c/o John
Doe, Treasurer
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John Doe
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(4) ABC Profit Sharing Plan
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John Doe, Treasurer
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TRUST ACCOUNTS
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(1) ABC Trust
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Jane B. Doe, Trustee
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(2) Jane B. Doe, Trustee u/t/d 12/28/78
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Jane B. Doe
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CUSTODIAL OR ESTATE ACCOUNTS
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(1) John B. Smith, Cust. f/b/o John B. Smith Jr. UGMA
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John B. Smith
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(2) John B. Smith
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John B. Smith, Jr., Executor
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ANNUAL MEETING OF MVC CAPITAL, INC.
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Date:
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April 27, 2010 |
Time:
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10:00 A.M. (Eastern Time) |
Place:
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Offices of Schulte, Roth and Zabel, 919 Third Avenue, New York, NY 10022 |
Please make your marks like this: x Use dark black pencil or pen only
Board of Directors Recommends a Vote FOR proposals 1 and 2.
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1:
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To elect six nominees to serve as members of the Board of
Directors of the Fund: |
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For |
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Withhold |
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01 Emilio Dominianni
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c
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c |
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02 Gerald Hellerman
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c
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03 Warren Holtsberg
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c
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c |
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04 Robert Knapp
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c
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c |
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05 William Taylor
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c
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c |
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06 Michael Tokarz
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c
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c |
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Directors |
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Recommend |
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For |
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Against |
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Abstain |
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2:
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To ratify the selection of Ernst & Young LLP
as the Funds independent registered
public accounting firm.
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c
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c
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c
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For |
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3:
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In their discretion, the Proxies are authorized
to vote upon such other business as may
properly come before the meeting or any
adjournment thereof.
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To attend the meeting and vote your shares in person, please
mark this box. |
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c |
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Authorized Signatures - This section must be
completed for your Instructions to be executed. |
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Please Sign Here
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Please Date Above |
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Please Sign Here
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Please Date Above |
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Please sign exactly as your name(s) appears on your stock certificate. If held in joint tenancy, all
persons should sign. Trustees, administrators, etc., should include title and authority. Corporations
should provide full name of corporation and title of authorized officer signing the proxy.
Annual Meeting of MVC Capital, Inc.
to be held on Tuesday, April 27, 2010
for Holders as of March 1, 2010
This proxy is being solicited on behalf of the Board of Directors
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VOTED BY: |
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![(TELEPHONE LOGO)](c55357c5535714.gif) |
Go To
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866-390-5403 |
www.proxypush.com/mvc |
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Use any touch-tone telephone. |
Cast your vote online.
View Meeting Documents. |
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OR |
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Have your Proxy Card/Voting Instruction Form ready. |
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Follow the simple recorded instructions. |
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![(MAIL LOGO)](c55357c5535715.gif) |
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OR
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Mark, sign and date your Proxy Card/Voting Instruction Form. |
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Detach your Proxy Card/Voting Instruction Form. |
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Return your Proxy Card/Voting Instruction Form in the
postage-paid envelope provided. |
The undersigned hereby appoints Michael Tokarz and Peter Seidenberg, and each or either of
them, as the true and lawful attorneys of the undersigned, with full power of substitution and
revocation, and authorizes them, and each of them, to vote all the shares of capital stock of
MVC Capital, Inc. which the undersigned is entitled to vote at said meeting and any adjournment
thereof upon the matters specified and upon such other matters as may be properly brought
before the meeting or any adjournment thereof, conferring authority upon such true and lawful
attorneys to vote in their discretion on such other matters as may properly come before the
meeting and revoking any proxy heretofore given.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN,
SHARES WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS IN ITEM 1 AND FOR THE PROPOSAL IN ITEM 2
AND AUTHORITY WILL BE DEEMED GRANTED UNDER ITEM 3.
All votes must be received by 5:00 P.M., Eastern Time, April 26, 2010.
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PROXY TABULATOR FOR |
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MVC
CAPITAL, INC.
P.O. BOX 8016
CARY, NC 27512-9903 |
Revocable Proxy MVC Capital, Inc.
Annual Meeting of Shareholders
April 27, 2010, 10:00 a.m. (Eastern Time)
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned appoints Michael Tokarz and Peter Seidenberg, each with full power of
substitution, to act as proxies for the undersigned, and to vote all shares of common
stock of MVC Capital, Inc. that the undersigned is entitled to vote at the Annual Meeting
of Shareholders on Tuesday, April 27, 2010 at 10:00 a.m. at the offices of Schulte, Roth
and Zabel, 919 Third Avenue, New York, NY 10022, and any and all adjournments thereof, as
set forth below.
This proxy is revocable and will be voted as directed, but if no instructions are
specified, this proxy will be voted:
FOR the nominees for directors specified and FOR Proposal 2.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)