220594-1w
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [x]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14A-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (section)240.14a-11(c) or
(section)240.14a-12
meVC Draper Fisher Jurvetson Fund I, Inc.
(Name of Registrant as Specified In Its Charter)
Millenco, L.P.
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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:
...................................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: .....................................
2) Form, Schedule or Registration Statement No.: ...............
3) Filing Party: ...............................................
4) Date Filed: .................................................
MILLENCO, L.P.
666 FIFTH AVENUE TELEPHONE 212.841.4100
NEW YORK, NY 10103-0899 TELEFAX 212.841.4141
January 31, 2003
Dear Fellow Shareholder:
On behalf of Millenco L.P., I am pleased to enclose our Proxy Statement and
GREEN proxy card, which will enable MVC's shareholders to elect a new Board of
Directors at the February 28, 2003 Annual Meeting. You, the owners of MVC
Capital, finally have the opportunity to replace CEO John Grillos and his
associates. NOW IS THE TIME FOR NEW LEADERSHIP AT MVC. WE URGE YOU TO SIGN,
DATE, AND RETURN THE ENCLOSED GREEN PROXY CARD TODAY.
Under Mr. Grillos' three-year tenure, MVC's portfolio value has dropped 70%,
MVC's stock price has fallen 60%, and nearly $200 million of market
capitalization has disappeared. During this time, MVC management has burned
through nearly $36 million in fees and expenses -- a sum equivalent to more than
25% of MVC's current market capitalization. Unlike Mr. Grillos, Millenco is not
seeking management fees and is not seeking salaries. Ask yourself: who has been
raiding MVC?
Millenco's seven nominees are distinguished and experienced business
professionals dedicated to enhancing value for MVC shareholders. They include
representatives from two of the Fund's largest shareholders (Millenco and Karpus
Asset Management), a former SEC branch chief, a seasoned venture capitalist, a
retired partner of an esteemed international law firm and a veteran of crisis
management and corporate restructuring. Each one of our nominees is invested in
MVC--collectively, we own nearly 100 times the stock of Mr. Grillos and his
nominees.
Mr. Grillos pretends to have a newfound concern for MVC shareholders. Don't
believe it. MVC shareholders voted by an overwhelming margin at the 2002 Annual
Meeting to terminate management, and in December 2002, the Delaware Chancery
Court held that Mr. Grillos breached his fiduciary duties to shareholders. Every
director and executive officer of MVC Capital has since resigned, except Mr.
Grillos.
WE ARE A LONG-TERM INVESTOR IN MVC AND THE FUND'S LARGEST SHAREHOLDER. OUR
INTERESTS ARE THE SAME AS YOURS. In their desperation to retain control of the
Fund, MVC management has resorted to scare tactics, sending shareholders false
and misleading letters. Don't be misled. Far from being a "raider," we have been
the Fund's largest shareholder for more than two years, suffering, as all MVC
shareholders have, as Mr. Grillos has personally profited from our misery. Mr.
Grillos also falsely claims that we will liquidate the Fund. To the contrary,
our nominees plan to put in place a highly qualified team to guide MVC toward
significant long-term returns. We believe this can be achieved by investing in a
more diverse portfolio and increasing the dividend yield of the Fund in order to
return value to shareholders.
This election may represent the only chance for MVC shareholders to regain
control of their investment and elect nominees who will serve all shareholders'
interest. YOUR VOTE IS IMPORTANT. We urge you to vote FOR Millenco's Nominees
and FOR both shareholder proposals. Please sign, date and return the GREEN proxy
card today.
Thank you for your support,
Robert Knapp
PROXY SOLICITATION IN OPPOSITION
TO THE BOARD OF DIRECTORS OF
MEVC DRAPER FISHER JURVETSON FUND I, INC. (d/b/a MVC CAPITAL)
SOLICITATION STATEMENT OF
MILLENCO, L.P.
------------
This proxy statement and the accompanying GREEN proxy card are being
furnished to you as a holder of common stock of meVC Draper Fisher Jurvetson
Fund I, Inc., d/b/a MVC Capital (the "Fund") in connection with the Fund's 2003
annual meeting of shareholders which is to be held at Quadrus Conference Center,
QCC Room, 2400 Sand Hill Road, Menlo Park, California, on Friday, February 28,
2003, at 9:00 local time. The Fund has set February 6, 2003 as the record date
for shareholders entitled to notice of and to vote at the annual meeting.
Millenco, L.P. ("Millenco"), the soliciting shareholder, is soliciting your
proxy for a slate of directors who it will nominate in opposition to the
candidates for director who are proposed by the Fund's current board of
directors. Millenco is also soliciting proxies in favor of the two shareholder
proposals.
Millenco, together with its affiliates, owns a total of 1,099,500
shares of common stock, representing 6.7% of the Fund's outstanding common
stock. We are the Fund's largest shareholder. Millenco, a Delaware limited
partnership, is a broker-dealer and member of the American Stock Exchange. The
general partner of Millenco is Millennium Management, LLC, a Delaware limited
liability company ("Millennium"). The sole manager of Millennium is Israel A.
Englander. The principal office of Millenco, Millennium and Mr. Englander is 666
Fifth Avenue, New York, New York 10103. Millennium Partners L.P., the parent of
Millenco, together with its affiliates, is a $3.7 billion multi-strategy private
investment fund.
MILLENCO'S INTERESTS ARE ALIGNED WITH YOURS
Millenco has invested more than $10 million in the Fund. One of our nominees,
George W. Karpus, is the principal of Karpus Investment Management, which, on
behalf of both Mr. Karpus and its clients, has invested more than $6 million in
the Fund. As shareholders of the Fund, our interests are aligned with your
interests.
On March 27, 2002, the Fund's shareholders voted overwhelmingly not to
renew the investment advisory contract between the Fund and the investment
advisory company run by the Fund's CEO, John Grillos. Since then, the other four
directors have resigned, but Mr. Grillos refuses to leave voluntarily.
On December 16, 2002, the Delaware Chancery Court held that Mr.
Grillos' election as a director in 2001 was illegally procured through the use
of a materially false and misleading proxy statement. On January 16, 2003,
except for Mr. Grillos, all of the Fund's directors resigned. As a result, none
of the Fund's incumbent nominees for directors has ever been properly elected as
directors by the shareholders.
In the six weeks since the court order, Mr. Grillos dramatically
increased the Fund's rate of investment, reducing the Fund's cash by more than
$23 million, expanded the size of the board from five to seven directors and
nominated seven directors, including himself, for election at this meeting.
Under Mr. Grillos' management, since the Fund's launch, shareholders have
endured a steady decline in the Fund's cash, net asset value and stock price.
Because all of the Fund's directors are being elected at this meeting,
you, the Fund's shareholders, have the ability to liberate our company and
install management whose only goal will be create value for all of the Fund's
shareholders. This election may be your last chance to have your voice heard and
to make a substantive and immediate impact on the future direction of the Fund.
At the annual meeting, Millenco will nominate the seven individuals
named under the caption "Election of Directors (Proposals 1, 2 and 3)" in this
proxy statement. Millenco's nominees for directors are experienced individuals
who will act in the best interests of the Fund's shareholders.
MVC'S POOR PERFORMANCE RECORD
MVC's investment performance has been remarkably poor. The Fund's IPO
price was $20 per share, and currently is trading in the range of $8.25 per
share, a 59% loss. Since launch, MVC's cumulative return on INVESTED CAPITAL as
of the October 31, 2002 year end was -70.0%, including fees and expenses. As a
point of contrast, the Private Equity Performance Index (PEPI) produced by the
National Venture Capital Association (NVCA) indicates that the cumulative return
from September 2000 to September 2002 for late stage venture capital funds was
-30.9%.
In terms of realized investments, MVC has achieved a return of -79.2%.
The following table shows the investments that were REALIZED, with investment
cost and realized loss.
MVC RETURN ON REALIZED INVESTMENTS
REALIZED
COMPANY COST REALIZED LOSS RETURN
InfoUSA $10,000,000 $3,300,000 -33.0%
EXP Systems $10,000,000 $8,000,000 -80.0%
Personic $10,760,460 $10,760,460 -100.0%
InfoImage $2,356,690 $2,356,690 -100.0%
IQDestination $3,520,000 $3,520,000 -100.0%
Annuncio $5,000,000 $3,400,000 -68.0%
MediaPrise $2,000,000 $2,000,000 -100.0%
ShopEaze $6,000,000 $6,000,000 -100.0%
-------------- ----------- ----------- ------
TOTAL $49,637,150 $39,337,150 -79.2%
The shares of MVC have traded at a significant discount to net asset
value ("NAV") since inception. According to data provided by Bloomberg, the
average weekly discount between MVC's share price and NAV from June 2000 until
January 2003 has been 35%. For most of this period the shares have traded below
the level of MVC's uninvested cash. If elected, Millennium's nominees will
consider the elimination of the discount a high priority.
-2-
A NEW DIRECTION
The strategy of our board, if elected, is to appoint a seasoned
investment advisor capable of creating enhanced value for shareholders by
running the Fund as a more traditional business development company, which we
envision will include the following:
o Investing in a more diverse portfolio of companies across a variety
of industries, in contrast to the current's management's strategy of
investing solely in Internet and information technology companies;
o Investing in income-producing mezzanine and debt securities of more
mature companies;
o Increasing the dividend of the Fund in order to return cash to
shareholders in real time.
Our nominees, if elected, will submit whatever investment management
plan it endorses to the Fund's shareholders for their approval, a pledge made in
stark contrast to the efforts by current management to circumvent the
shareholder approval process.
IMPROVE MVC'S CORPORATE GOVERNANCE
If Millenco's nominees are elected, one of the first matters on the
board's agenda will be the elimination of the anti-shareholder provisions that
exist in the Fund's charter. Millenco believes that these provisions are not in
the best interests of the shareholders. Millenco recognizes that the repeal of
anti-shareholder provisions cannot all be implemented without further
shareholder approval, but the board intends to take all steps necessary to
accomplish this objective.
The specific shareholder-friendly courses of action that the Millenco
nominees will, if elected, seek to implement are:
o The elimination of a classified board. Presently, directors are
elected at staggered terms of three years, with approximately
one-third of the board being elected each year. Millenco's nominees
for director, if elected, will approve the elimination of classified
directors, subject to shareholder approval. If the proposal is
approved, the shareholders will vote for all directors each year. In
the interim, all of Millenco's nominees have agreed not to serve for
more than one year without approval by the Fund's shareholders. In
this manner, the board will be more responsive to the shareholders.
o The elimination of supermajority voting rights. The Fund's
certificate of incorporation provides that any adoption, amendment
or repeal of our by-laws will require the approval of at least
two-thirds of the total number of the Funds' authorized directors,
irrespective of any vacancies that may exist on the board of
directors at the time, or the holders of at least two-thirds of the
then outstanding shares of capital stock entitled to vote on the
matter. This provision makes it more difficult to amend the Fund's
certificate of incorporation, including an amendment to eliminate
the classified board.
-3-
o Amend the by-laws to make it easier for shareholders to call a
special meeting of shareholders. Shareholders have no power to call
a special meeting of shareholders. If Millenco's nominees are
elected, they will adopt resolutions to amend the by-laws and
certificate of incorporation to permit the holders of 5% of the
outstanding common stock to call a special meeting of shareholders.
This is Proposal 4 on your proxy.
You can change your vote at any time prior to the time the polls for
voting for directors are closed. Only your latest dated proxy card will be
voted.
If your shares are held in a brokerage account, you MUST instruct your
broker as to how you want your shares voted. YOUR BROKER CANNOT VOTE YOUR SHARES
WITHOUT YOUR INSTRUCTIONS.
We urge you to vote FOR Millenco's nominees for election as director
(Proposals 1, 2 and 3) and FOR the two shareholder proposals (Proposals 4 and 5)
by signing and dating the GREEN proxy card and returning it in the enclosed
envelope today.
ELECTION OF DIRECTORS (PROPOSALS 1, 2 AND 3)
There will be three separate votes for each of the three classes of
directors. Two directors will be elected for a term that continues until the
2004 annual meeting (Proposal 1), two directors will be elected for a term that
continues until the 2005 annual meeting (Proposal 2) and three directors will be
elected for a term that continues until the 2006 annual meeting (Proposal 3).
Shareholders will vote on each class of directors separately, and,
provided that there is a quorum, the nominees for each class who receive the
most votes for each class will be elected.
It is the intention of the persons named on the enclosed GREEN proxy
card to nominate and vote for the election of the persons listed below. Millenco
knows of no reason why any of these nominees will be unable to serve, but in the
event of any such inability, the proxies received will be voted for such
substituted nominees as Millenco may recommend.
Millenco will nominate the following individuals as directors of the
Fund:
For two directors with a term ending in 2004*:
Gerald Hellerman
Robert C. Knapp
For two directors with a term ending in 2005*:
Bruce W. Shewmaker
George Karpus
-4-
For three directors with a term ending in 2006*:
Emilio A. Dominianni
Terry Feeney
Robert S. Everett
---------------
* The certificate of incorporation presently provides that the directors
are elected for three-year terms, with the terms of the two directors
expiring in each of 2004 and 2005 and the terms of three directors
expiring in 2006. EACH OF THE MILLENCO NOMINEES FOR DIRECTORS HAS
AGREED THAT, UNTIL THE CERTIFICATE OF INCORPORATION IS AMENDED TO
ELIMINATE THE CLASSIFIED BOARD, HE WILL SERVE AS A DIRECTOR AS IF HE
WERE ELECTED FOR A ONE-YEAR TERM AND WILL NOT USE THE DEVICE OF THE
CLASSIFIED BOARD TO ENTRENCH HIMSELF IN OFFICE. THUS, IF THEY ARE
ELECTED AT THIS MEETING, THE MILLENCO NOMINEES WILL, AT THE 2004 ANNUAL
MEETING, AND EACH YEAR THEREAFTER, GIVE THE FUND'S SHAREHOLDERS THE
OPPORTUNITY TO CHOOSE TO RE-ELECT ANY OR ALL OF THE MEMBERS OF THE
BOARD OF DIRECTORS.
Set forth below is information concerning Millenco's nominees,
including their age and principal occupation.
GERALD HELLERMAN, 65, has been the principal of Hellerman Associates, a
financial and corporate consulting firm, since he founded the firm in 1993.
Present clients of Hellerman Associates include the U.S. Department of Justice
and the National Oceanic and Atmospheric Administration, a unit of the U.S.
Department of Commerce. Mr. Hellerman served with the Securities and Exchange
Commission as a financial analyst from 1962 until 1967 and a branch chief from
1967 to 1972. From 1972 until 1976 he served as special financial advisor to the
United States Senate Subcommittee on Antitrust and Monopoly, and from 1976 until
1993 he was chief financial analyst of the Antitrust Division of the U.S.
Department of Justice. Mr. Hellerman has served as a trustee or director of
Third Avenue Value Trust from 1993 until 2002, and trustee of Third Avenue
Variable Series Trust from 1999 until 2002. He is a director and president of
The Mexico Equity and Income Fund, a position he has held since 2001. He also
serves as a director of Innovative Clinical Solutions, Inc., a company that
holds an investment in a privately-owned clinical knowledge company in the
neuropsychiatric illness field, and Frank's Nursery & Crafts, Inc., which
operates the nation's largest chain of lawn and garden retail stores. He also
served as a director of Clemente Global Growth Fund, Inc. from 1998 to 2000. Mr.
Hellerman received his B.A. in economics and an M.B.A. from the University of
Massachusetts.
ROBERT C. KNAPP, 36, has been a managing director of Millennium
Partners for more than five years. Mr. Knapp specializes in identifying
undervalued assets and turnaround situations. He successfully led Millennium's
effort to restructure the International Biotechnology Trust in 2000, and
represented Millennium on the creditors committee that helped achieve a dramatic
turnaround in the African mining company Ashanti Goldfields in 2002. In 2001 and
2002, he served as a director of Vietnam Frontier Fund, a Cayman Islands
investment company. Mr. Knapp received his B.Sc. in electrical engineering from
Princeton University and his B.A. in philosophy, politics and economics from
Oxford University.
BRUCE W. SHEWMAKER, 57, is managing director of Crossbow Ventures Inc.,
a non-registered
-5-
investment management company, and is a vice president of Crossbow Venture
Partners Corp., the general partner of Crossbow Venture Partners LP, a licensed
small business investment company, positions he has held since he co-founded
Crossbow in 1999. The Crossbow management company is responsible for $160
million in capital commitments. From 1999 until 2001, he was also a managing
director of E*Offering Corp., an investment banking firm which merged into Wit
SoundView Group in 2000. From 1997 to 1998, he was president and a director of
The U.S. Russia Investment Fund, Inc., an international private equity and debt
fund. The US Russia Investment Fund had $440 million in committed capital from
the US government. Mr. Shewmaker is a director of three companies in which
Crossbow Equity Partners or its affiliates has an investment - Berdy Medical
Systems, Inc., an electronic patient record software company, eMotion, Inc., a
digital media management software company, and ResQNet.com, Inc., a web-enabling
legacy solutions company. During the past five years he also served as a
director of two other Crossbow portfolio companies - Atlantis Technologies,
Inc., a water technology holding company, and Direct Capital Markets, Inc., an
electronic financial services company. Mr. Shewmaker is also a co-founder and
director of Infrared Imaging Systems, Inc., a medical devices company. During
the past five years he also served as a general partner of ML Oklahoma Venture
Partners, L.P. and several of The U.S. Russia Investment Fund's portfolio
companies operating in Russia. Mr. Shewmaker received his B.S. in finance from
The Ohio State University.
GEORGE W. KARPUS, 56, is president and chief executive officer of
Karpus Management, Inc. d/b/a Karpus Investment Management, a registered
investment advisor with approximately $700 million under management that he
founded in 1986. Karpus Investment Management specializes in investing in
closed-end funds and its portfolio includes approximately $400 million of
investments in closed-end investment companies. He also is a general partner of
Apogee Partners, L.P., Garnsey Partners, L.P., Canalview Partners, L.P. and
Fixed Income Yield Plus Partners, L.P., which are private investment
partnerships. From 1984 to 1986, Mr. Karpus was a senior vice president and
investment officer at Q.C.I. Mr. Karpus received his B.S. in physics from St.
Lawrence University and attended RPI Management School.
EMILIO A. DOMINIANNI, 71, is a retired partner of, and is currently a
consultant to, the law firm of Coudert Brothers LLP, where he was a partner
concentrating in corporate finance, acquisitions and corporate taxation matters,
from 1965 until 1997, during which time he served on Coudert's Executive
Committee for 10 years, and served as special counsel from 1998 until 2001. He
is also a consultant to Air Liquide America Corp., an industrial gas
corporation. Mr. Dominianni is director and secretary of American Air Liquide,
Inc. and Air Liquide International Corp, and a director of Mouli Manufacturing
Corp., a kitchen utensil supply company. Mr. Dominianni is a certified public
accountant. He served as a staff sergeant in the in the United States Army 1950
and 1951 and fought in the Korean war. Mr. Dominianni received his B.S. and J.D.
from Fordham University and his LLM in Taxation from New York University School
of Law.
TERRY FEENEY, 45, is vice chairman and chief operating officer of
Millennium Partners, positions he has held since June 2001. From May 1994 until
June 2001, he was a managing director and chief administrative officer of
Millennium Partners. Prior to joining Millennium Partners, Mr. Feeney was an
audit partner in the financial services division of Ernst & Young, LLP,
specializing in broker dealers. In 2002, Mr. Feeney served as a director of
Vietnam Frontier Fund, an investment fund. From December 1996 until 1998 he was
a director of Horowitz Rae, Inc., a privately-owned printing company in which he
was an investor. Horowitz Rae filed for bankruptcy in November 1998. Mr. Feeney
graduated summa
-6-
cum laude with a B.S. in accounting from Fordham University. Mr. Feeney is a CPA
and member of the American Institute of Certified Public Accountants and the
Securities Industry Association. Mr. Feeney's experience encompasses more than
20 years in securities operations.
ROBERT S. EVERETT, 39, is a managing director of Everett & Solsvig,
Inc., a firm that assists equity and debt holders who own positions in troubled
companies, that he co-founded in 2001. He is currently serving as chief
restructuring officer of Cornerstone Propane Partners, L.P., a propane
distribution company, and is also an officer of its subsidiary, Cornerstone
Propane, L.P. Everett & Solsvig was brought in to manage the company and help
assess its strategic alternatives. Prior to forming Everett & Solsvig, Mr.
Everett was a founder of Kulen Capital, L.P., a middle market private investment
fund. Kulen Capital was formed in 1997 to purchase investments in eight
companies from Merrill Lynch Capital Corp. While at Kulen Capital, Mr. Everett
refinanced senior debt holdings, restructured mezzanine investments and executed
add-on acquisitions. Prior to joining Kulen Capital, Mr. Everett was a vice
president at Merrill Lynch Capital Corp., where he was responsible for managing
debt and equity investments in the firm's $1.2 billion, 60 company portfolio.
Mr. Everett represented Merrill Lynch Capital Corp. on eleven company boards,
and specialized in the oversight of workout and turnaround situations. He
received a B.A. in economics from Harvard College and an M.B.A. from Harvard
Business School.
Millenco has entered into agreements with its nominees for director
pursuant to which the nominees agreed to be Millenco's nominees, and Millenco
agreed to indemnify them against liability which they may incur relating to
their nomination or election. If the nominees are elected, the indemnification
provisions applicable to directors under the Fund's certificate of
incorporation, by-laws and Delaware law will replace Millenco's indemnity.
BENEFICIAL OWNERSHIP OF SECURITIES BY MILLENCO'S NOMINEES
Set forth below is information relating to the beneficial stock
ownership of Millenco and its nominees for election as directors as of January
31, 2003:
Name No of Shares Percentage
---- ------------ ----------
Millennium Partners, L.P. 1,099,500 6.7%
Millennium USA, L.P.
Millennium Global Estate, L.P.
Millennium International, Ltd.
Millenco, L.P.
c/o Millennium Management LLC
666 Fifth Avenue
New York, NY 10103
Robert C. Knapp 1,099,500 6.7%
666 Fifth Avenue
New York, NY 10103
Terry Feeney 1,099,500 6.7%
666 Fifth Avenue
New York, NY 10103
-7-
George W. Karpus 658,981 4.0%
Emilio A. Dominianni 1,000 *
Bruce W. Shewmaker 1,000 *
Robert S. Everett 1,000 *
Gerald Hellerman 1,000 *
All nominees as a group 1,758,481 10.8%
--------------
* Less than 1%.
Millenco is a Delaware limited partnership. Millennium USA, L.P.,
Millennium International, Ltd. and Millennium Global Estate, L.P. are investment
funds that are limited partners of Millennium Partners, L.P. The general partner
of Millennium Partners, L.P. is Millennium Management, LLC. As of January 23,
2003, the shares owned by these companies are as follows:
Name Shares
---- ------
Millennium USA, L.P. 434,771
Millennium International, Ltd. 334,729
Millenco, L.P. 184,300
Millennium Global Estate, L.P. 145,700
---------
1,099,500
The shares listed as being owned by Robert Knapp and Terry Feeney are
the shares that are owned by Millenco and its affiliates. Since Mr. Knapp and
Mr. Feeney, by virtue of their positions with Millennium Partners, have joint
voting and disposition right with respect to the 1,099,500 shares owned by
Millenco and its affiliates, they may also be deemed to beneficially own these
shares, and they may be deemed to be interested directors. However, they
disclaim beneficial interest in these shares. Neither Mr. Knapp nor Mr. Feeney
owns any shares of the Fund's common stock individually.
George W. Karpus owns 6,000 shares personally. The Karpus Investment
Management profit sharing fund owns 3,400 shares of common stock, of which Mr.
Karpus is a co-trustee. Clients of Karpus Investment Management hold 649,581
shares of common stock. Mr. Karpus has either direct or indirect shared
authority to vote and dispose of the shares of common stock owned by the clients
of Karpus Investment Management.
None of Millenco's nominees has engaged in any business or other
transactions with the Fund.
Millenco has proposed the adoption of Proposal No. 4, and George W.
Karpus has proposed the adoption of Proposal No. 5. Both proposals are advisory.
Millenco sued the Fund and its directors in the Chancery Court of
Delaware alleging breach of the directors' fiduciary duty for making materially
false and misleading statements in its proxy statements.
-8-
On December 19, 2002 and January 8, 2003, the court granted judgment to Millenco
and ordered the Fund to hold a meeting of shareholders by February 28, 2003 for
the purpose of electing directors to fill the three positions for the directors
who were elected as a result of the misleading proxy statements. This meeting
was called in response to the court's order.
PROPOSAL 4: SHAREHOLDER PROPOSAL
Millenco has submitted the following proposal (the "Millenco Proposal")
for inclusion in this Proxy Statement.
RESOLVED: That the shareholders of meVC Draper Fisher Jurvetson
Fund I, Inc. ("Company"), recommend that the Company's board of directors
take all steps necessary to amend the Company's By-laws to include the
provision set forth below, granting shareholders the limited right to call
special meetings of shareholders, and that the Company's officers and
Board of Directors take all steps necessary to effectuate, and to enable
the shareholders to vote to approve the same amendment to the certificate
of incorporation:
"Any shareholder owning at least 5% of the outstanding common
stock of the Company may demand that the Company's Chairman, Vice
Chairman, Chief Executive Officer or President call a special meeting of
shareholders. The demand shall be in writing and shall state the
purpose(s) of the special meeting. Within five (5) business days of the
Company's receipt of the demand, the officer(s) upon whom the demand is
made shall call such meeting to be held at the Company's principal office
in the United States, on a date within not less than ten (10) nor more
than sixty (60) days after the record date for such meeting. The record
date shall be fixed as of a date not less than fifteen (15) nor more than
thirty (30) days after the date the demand is received."
This proposal is advisory, which means that it is not binding on the
Fund. It expresses the view of the shareholders that they consider it important
that shareholders have the right to call a special meeting.
The certificate of incorporation and by-laws permit only the chairman,
vice chairman, chief executive officer or president of the Fund to call special
meetings of shareholders. The Fund has stated in its proxy statement that it has
amended the by-laws to provide that the holders of 15% of the outstanding common
stock may request that the board of directors call a special meeting. The
certificate of incorporation and by-laws purport to grant shareholders the right
to vote to make certain amendments, but the provision depriving shareholders of
the right to call a special meeting to vote on such amendments makes the right
almost meaningless.
At the 2002 annual meeting, shareholders voted not to renew the
investment advisory agreement with meVC Advisers and the investment sub-advisory
agreement with Draper Advisers. One of the key terms of the new agreements which
Millenco highlighted in its solicitation in opposition to the agreements was
that, if approved, the new agreements could be renewed in the future by the
board of directors without a vote of shareholders, in contradiction to
historical practice. However, after the Fund's shareholders rejected the new
agreements, rather than recruit new investment advisers and submit new
investment advisory agreements to shareholders for their approval, the Board of
Directors, all of whom were appointed by principals of meVC Advisers and Draper
Advisers, hired executives and employees of
-9-
meVC Advisers and Draper Advisers to manage the Company internally.
A shareholder with 5% of the outstanding stock of the Fund has a
sufficient stake in the Fund that it should have the right to call a special
shareholders meeting. Millenco, together with its affiliates, owns 6.7% of the
Fund's common stock, for which it has invested more than $10 million. The board
of directors, collectively, owns less than 0.1%.
The proposal requires the affirmative votes of the shares present and
voting, either in person or by proxy, provided that there is a quorum at the
meeting.
Millenco recommends that you execute the GREEN proxy card FOR the
Millenco Proposal.
PROPOSAL 5: SHAREHOLDER PROPOSAL
Karpus Investment Management, Inc. d/b/a Karpus Investment Management,
of which George W. Karpus, one of Millenco's nominees for director, is
president, chief executive officer and chief investment officer, has submitted
the following proposal (the "Karpus Proposal").
RESOLVED, that the stockholders of meVC Draper Fisher Jurvetson Fund I
(MVC) recommend that the Board of Directors take all steps necessary to
conduct a tender offer for 25 percent of the outstanding shares at an
amount equal to 95 percent of the NAV in each year where the fund discount
averages more than ten percent; provided, however, that MVC need not take
such action if the effect of that action would be to impair the capital of
MVC within the meaning of section 160 of the Delaware General Corporation
Law.
This proposal is also advisory, which means that is it not binding on
the Fund. Millenco supports the approval of the Karpus Proposal. Millenco
believes that the shareholders' vote in favor of the proposal will convey to the
board the shareholders' dissatisfaction with the present policies of the board
that have resulted in the common stock trading at a significant discount from
net asset value. Millenco has included Mr. Karpus as one of its nominees for
director. The nominees recognize that the board of directors will not be bound
to make the tender offer.
The proposal requires the affirmative votes of the shares present and
voting, either in person or by proxy, provided that there is a quorum at the
meeting.
Millenco recommends that you execute the GREEN proxy card FOR the
Karpus Proposal.
ADDITIONAL INFORMATION
Millenco has engaged the services of Innisfree M&A Incorporated to
assist it in soliciting proxies. Innisfree will be paid a fee of up to $125,000,
plus reasonable out-of-pocket expenses. Innisfree will employ a staff of
approximately 20 persons in connection with this solicitation. The solicitation
will be made by mail as well as by telephone, fax, e-mail, personal interviews
and other methods of communication. In addition, employees of Millenco may also
assist in the solicitation.
Millenco estimates that the total costs incurred and to be incurred
relating to the proxy solicitation (including costs of obtaining the judgment of
the Delaware Chancery Court which makes this election possible) will be
approximately $450,000. These costs will be paid by Millenco. If Millenco's
nominees
-10-
for director are elected, Millenco will request reimbursement from the Fund.
This proxy statement is dated January 31, 2003.
--------------------------------------------------------------------------------
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN VOTING YOUR SHARES, PLEASE CALL
OUR PROXY SOLICITOR, INNISFREE M&A INCORPORATED
TOLL-FREE AT 1-888-750-5834.
BANKS AND BROKERS CALL COLLECT 212 750-5833
--------------------------------------------------------------------------------
-11-
[GREEN PROXY]
PROXY SOLICITED IN OPPOSITION TO THE BOARD OF DIRECTORS OF
meVC DRAPER FISHER JURVETSON FUND I, INC. (d/b/a MVC CAPITAL)
2003 ANNUAL MEETING OF STOCKHOLDERS - FEBRUARY 28, 2003
THIS PROXY IS SOLICITED ON BEHALF OF MILLENCO, L.P.
The undersigned hereby appoints Robert Knapp and Richard W. Cohen or
either one of them acting in the absence of the other, with full power of
substitution or revocation, proxies for the undersigned, to vote at the 2003
Annual Meeting of Stockholders of meVC Draper Fisher Jurvetson Fund I, Inc.
(d/b/a MVC Capital) (the "Fund"), to be held at Quadrus Conference Center, QCC
Room, 2400 Sand Hill Road, Menlo Park, California, on Friday, February 28, 2003,
at 9:00 local time and at any adjournment(s) or postponement(s) thereof,
according to the number of votes the undersigned might cast and with all powers
the undersigned would possess if personally present. By signing this proxy card
on the reverse side, the undersigned authorizes the appointed proxy holders to
vote in their discretion on any other business which may properly come before
the meeting or any adjournment(s) or postponement(s) thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREON.
IF NO DIRECTION IS MADE WITH REGARD TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE
VOTED "FOR" ANY SUCH PROPOSAL.
(1) To elect the following two (2) directors for a term ending at the
2004 annual meeting:
Gerald Hellerman, Robert Knapp
FOR [ ] Withhold authority [ ]
(2) To elect the following two (2) directors for a term ending at the
2005 annual meeting:
Bruce Shewmaker, George Karpus
FOR [ ] Withhold authority [ ]
(3) To elect the following three (3) directors for a term ending at
the 2006 annual meeting:
Emilio Dominianni, Terry Feeney, Robert Everett
FOR [ ] Withhold authority [ ]
TO WITHHOLD AUTHORITY FOR AN INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THAT NOMINEE'S NAME.
(4) The approval of a proposal that the stockholders of meVC Draper
Fisher Jurvetson Fund I, Inc. recommend that the Fund's board of
directors take all steps necessary to amend the Fund's By-laws to
include the provision granting stockholders the limited right to
call special meetings of stockholders.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(5) The approval of a proposal that in each year where the fund
discount averages over 10%, the Fund will conduct a tender offer
for 25% of the outstanding shares at an amount equal to 95% of
the net asset value.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
all as set forth in Millenco's Proxy Statement, dated January 31, 2003.
Dated: , 2003
------------------
------------------------------------------
Signature
------------------------------------------
Signature
------------------------------------------
Title(s)
PLEASE SIGN EXACTLY AS NAME(S) APPEAR HEREON. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES.