SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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meVC Draper Fisher Jurvetson Fund I, Inc.
(Name of Registrant as Specified In Its Charter)
Millenco, L.P.
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The material in this filing represents the material contained on the website
www.mevcshareholders.com as of February 11, 2003, other than documents that are
otherwise filed with the SEC on EDGAR. All additional material which is placed
on the website subsequent to February 11, 2003 that constitutes proxy
solicitation material will be separately filed with the SEC. The list of
documents on the website is revised to reflect the documents that are added to
the website.
meVCshareholders.com
a website for shareholders of MVC Capital (NYSE:MVC)
sponsored by Millennium Partners
ABOUT THIS SITE
Since MVC Capital's inception in early 2000, the Fund's Board has delivered
sub-par performance and continuously demonstrated contempt for shareholders.
Millennium Partners, the largest stockholder of MVC, has been fighting to help
shareholders take back control -- and maximize the value -- of the long
mismanaged and under-performing Fund. Please visit these pages often to learn
more about the latest news and what you can do as a shareholder to protect your
investment and enact change at MVC.
LATEST NEWS
On January 31, Millennium Partners announced that it had proposed a slate of
seven nominees to replace the existing MVC Capital Board and outlined its
proposals for enhancing the value of the Fund for all MVC Shareholders.
See Press Release
See Proxy Statement Cover Letter
See Proxy Statement
See Presentation to Shareholders
BARRON'S
MVC ADVENTURE - SEC TAKES A CLOSER LOOK
February 10, 2003
The battle for MVC Capital, the closed-end fund once known as meVC, is getting
nastier. As last week's Fund of Information column detailed, shareholders at MVC
Capital's Feb. 28 annual meeting will choose from two slates seeking control of
the fund's board. Leading one slate is CEO John Grillos; heading the other is
Robert Knapp, a managing director at New York-based Millennium Partners. See
full story.
LITTLE VENTURED - THE BATTLE FOR CONTROL OF THE ONLY CLOSED-END VENTURE CAPITAL
FUND HEATS UP
JOHN GRILLOS MIGHT WANT to spruce up his resume. Grillos is the CEO at MVC
Capital, a struggling closed-end fund better known by its original name, meVC
Draper Fisher Jurvetson Fund I, or simply meVC. See full story.
ABOUT MILLENNIUM PARTNERS
Millennium Partners, L.P. is a $3 billion multi-strategy private investment fund
managed out of New York City. Millennium has been a significant owner in MVC
Capital since 2000, with over one million shares, and has spent the past two
years committed to effecting change at MVC and returning value to the Fund's
shareholders.
HOME | PRESS RELEASES | SHAREHOLDER LETTERS | MEDIA COVERAGE |
SEC FILINGS | COURT ORDER | CONTACT US
THIS SITE IS MANAGED AND MAINTAINED BY CITIGATE SARD VERBINNEN ON BEHALF OF
MILLENNIUM PARTNERS, L.P.
IMPORTANT NOTICE
AFTER REVIEWING THE FOLLOWING NOTICE, CLICK BELOW TO CLOSE THIS WINDOW >>
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THE FOLLOWING DISCLOSURES ARE MADE PURSUANT TO RULE 14a-12 OF THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC"), PROMULGATED UNDER THE SECURITIES EXCHANGE ACT
OF 1934:
o To the extent the material on this website may be considered a
"solicitation," as defined by SEC regulations, such solicitation is
being made by Millenco, L.P., a Delaware limited partnership, which 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. The sole manager of Millennium Management, LLC is
Israel A. Englander. The principal office of Millenco, Millennium and
Mr. Englander is 666 Fifth Avenue, New York, New York 10103.
o Millenco is the owner of 1,125,500 shares of common stock of MVC Draper
Fisher Jurvetson I, Inc. (d/b/a MVC Capital) (the "Fund"), representing
6.9% of the Fund's outstanding common stock. For a description of the
Millenco's direct or indirect interests in the Fund, we refer you to
Millenco's filings on Schedule 13D which can be obtained from the SEC's
website, www.sec.gov.
o Millenco has filed its definitive proxy statement with the Securities
and Exchange Commission, and it will file additional solicitation
material with the SEC in the future. SHAREHOLDERS SHOULD READ SUCH
PROXY STATEMENT AND OTHER SOLICITATION MATERIAL CAREFULLY BECAUSE IT
CONTAINS AND WILL CONTAIN IMPORTANT INFORMATION. MILLENNIUM'S
DEFINITIVE PROXY STATEMENT IS AVAILABLE THE AT SEC'S WEBSITE AT
www.sec.gov AND IS AVAILABLE ON THIS WEBSITE, WHICH IS
WWW.MEVCSHAREHOLDERS.COM. ANY AND ALL PROXY STATEMENTS AND OTHER
MATERIAL FILED IN CONNECTION WITH THE SHAREHOLDERS MEETING WILL BE
AVAILABLE, FOR FREE, AT THE SECURITIES AND EXCHANGE COMMISSION'S
WEBSITE WWW.SEC.GOV AND AT THIS WEBSITE. IN ADDITION, MILLENCO WILL
MAKE AVAILABLE WITHOUT CHARGE, VIA E-MAIL, ANY PROXY STATEMENT OR OTHER
SOLICITATION MATERIAL IT MIGHT ISSUE, TO SHAREHOLDERS WHO REQUEST IT BY
CONTACTING US AT: MEVCSHAREHOLDERS@YAHOO.COM.
o The statements on this website may be "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995. These statements are subject to risks and uncertainties. In
particular, statements on this website that state the intentions,
beliefs, expectations, strategies, predictions of Millennium or its
nominees for directors with respect to the Fund and its operations, or
any other statements relating to the Fund's future activities or other
future events or conditions are "forward-looking statements."
Forward-looking statements are not guarantees of future performance and
involve risks, uncertainties and other factors, as well as general
economic conditions, which are difficult to predict and any one or more
of which could cause actual results to differ materially from those
stated in such statements. Any forward-looking statements speak only as
of the date on which the material is posted to this website, and
Millennium does not undertake any obligation to update any
forward-looking statement to reflect events or circumstances after the
date of such information is posted on this website. Information on any
website other than this website does not constitute material posted by
Millennium on this website. Articles on this website that appear in
newspapers and other printed or on-line publications represent the
views of the authors of the articles, and Millennium does not take any
responsibility for any statements contained in those articles.
AFTER REVIEWING THE ABOVE INFORMATION, CLICK HERE TO VIEW INFORMATION ON THIS
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WEBSITE >>
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BARRON'S ONLINE
MONDAY, FEBRUARY 10, 2003
Follow up
MCV ADVENTURE
SEC takes a closer look
The battle for MVC Capital, the closed-end fund once known as meVC, is getting
nastier. As last week's Fund of Information column(4) detailed, shareholders at
MVC Capital's Feb. 28 annual meeting will choose from two slates seeking control
of the fund's board. Leading one slate is CEO John Grillos; heading the other is
Robert Knapp, a managing director at New York-based Millennium Partners.
The past week brought several new twists. On Friday, an MVC spokesman confirmed
that the SEC is conducting a "routine investigation" relating to MVC's decision
last year to internalize the fund's management. A year ago, holders voted
against renewing a management contract with an affiliate of fund founder Draper
Fisher Jurvetson, through which Grillos had been running the fund. But rather
than find a new adviser, the MVC board in a controversial move chose to run the
portfolio internally. Opting to keep the status quo, the board named Grillos
portfolio manager, heightening bitterness between him and critics.
[Price Chart of MVC stock]
Meanwhile, the SEC last week began a formal investigation of the financial
reporting practices at SmartForce, a company for which Grillos served as chief
operating officer in 1998 and 1999, and as a director until September 2001.
SkillSoft, a Nashua, N.H., company that later acquired SmartForce, last week
said the SEC is examining financial disclosure and accounting practices at
SmartForce from 1999 through June 2002. SkillSoft, which previously said it
would restate earnings for the relevant period, said the commission is examining
compliance with SEC filing requirements and "the conduct of those responsible
for such matters." Grillos also has been named in at least one related
shareholder suit. There's no mention of the SmartForce probe in MVC's proxy
materials. A MVC spokesperson says that after checking with the SEC, the fund
found no need to disclose the information.
On Thursday, MVC filed suit in federal court in New York alleging securities-law
violations by Millennium, which holds a 6.7% stake, and Karpus Investment
Management with a 3.8% stake. MVC contends Millennium and Karpus improperly
acted in concert, including timing purchases to avoid competing for shares. The
suit also alleges violations of "anti-pyramiding" laws restricting investment
companies from owning more than 3% of other investment companies. Both Karpus
and Millennium say the suit is meritless. Knapp calls it "a transparent attempt
to obstruct shareholders' right to vote, and a shameful waste of shareholder
resources."
It's true that MVC's cash is dwindling: In the past week, according to MVC's
Website, the total has dropped by $3.2 million, to $114.9 million. Whether that
cash went to new investments -- or to lawyers -- wasn't clear.
YOUR VOTE IS IMPORTANT!
HOW TO VOTE YOUR SHARES BY PROXY
You may direct your vote without attending the MVC Capital Annual Meeting, by
granting a proxy. We urge you to vote by proxy promptly, even if you plan on
attending the Annual Meeting.
o IF YOUR SHARES ARE HELD IN "STREET-NAME," I.E., THROUGH A BANK OR BROKER,
only your bank or broker can vote your shares and only upon receipt of your
specific instructions. Please sign, date and return the GREEN proxy card to
your bank or broker, in the postage-paid envelope provided. We recommend
that you also contact the person responsible for your account to ensure
that a GREEN proxy card is voted on your behalf.
o IF YOUR SHARES ARE HELD IN YOUR OWN NAME, please sign, date and return the
GREEN proxy card and return it in the postage-paid envelope provided.
Please sign, date and return each GREEN card you receive, to ensure that all
your shares are represented at the Meeting. Your vote will only be counted once.
If you have inadvertently signed a white card sent to you by MVC, you have every
right to change your vote. Simply sign, date and return a GREEN proxy card. Only
your latest-dated, validly executed card counts.
HOW TO VOTE AT THE MEETING
You may also vote in person at the Meeting on February 28, 2003.
o IF YOUR SHARES ARE HELD IN "STREET-NAME," I.E., THROUGH A BANK OR BROKER,
you must obtain a signed proxy (known as a "legal proxy") from the record
holder (your bank or broker) giving you the right to vote the shares. You
must present the legal proxy at the Meeting, and may be asked to also
provide photo identification.
o IF YOUR SHARES ARE HELD IN YOUR OWN NAME, you may vote in person at the
meeting, even if you have previously voted by proxy. You may be asked to
provide photo identification.
WE URGE YOU NOT TO SIGN ANY WHITE PROXY CARD YOU MAY RECEIVE FROM MVC CAPITAL,
EVEN AS A PROTEST VOTE AGAINST THE MVC NOMINEES. TO VOTE FOR THE MILLENCO
SLATE, PLEASE SIGN, DATE AND RETURN ONLY THE GREEN PROXY CARD.
================================================================================
IF YOU HAVE ANY QUESTIONS ABOUT HOW TO VOTE YOUR SHARES,
PLEASE CONTACT OUR PROXY SOLICITOR,
INNISFREE M&A INCORPORATED
TOLL-FREE AT 1-888-750-5834
(BANKS AND BROKERS CALL COLLECT AT 212-750-5833)
================================================================================
Millenco, L.P. Solicitation
in Opposition to the Board of Directors
of
MVC Capital
February 2003
FOR ADDITIONAL INFORMATION PLEASE SEE MILLENCO's PROXY MATERIALS
FILED WITH THE SEC AND AVAILABLE AT
www.mevcshareholders.com
MVC: DISASTROUS RESULTS FOR SHAREHOLDERS
================================================================================
o Share price down from $20 to $8 (prior to Court Order), erasing $200
MILLION in market capitalization.
o $36 MILLION in aggregate fees and expenses ($2.17 per share).
o ROIC is -70% versus a an average return for late stage funds of -31%.
o Shareholders defeat renewal of investment advisor contracts by 2-1 margin
at April 2002 Annual Meeting.
- President and CFO resign in June 2002.
- Excellent potential advisors rebuffed: same CEO and management team
retained, SEC investigates.
- Chairman and CEO breaches fiduciary duty; entire board of directors
resigns EXCEPT CEO.
2
MVC'S ABYSMAL INVESTMENT PERFORMANCE
================================================================================
o MVC has dramatically underperformed its peers.
o First Six Months of Fund's existence: $112.85 million invested in 16
companies. As of October 31, 2002, INVESTMENTS IN 7 OF THESE COMPANIES HAD
BEEN WRITTEN DOWN TO $0 and the 16 COMPANIES IN TOTAL HAVE BEEN WRITTEN
DOWN BY 78.4%.
o ON INVESTED CAPITAL COMMITTED SINCE LAUNCH, MVC HAS PRODUCED AN RETURN OF
-70.0%, INCLUDING FEES AND EXPENSES. The Private Equity Performance Index
for late stage funds, (PEPI), produced by the National Venture Capital
Association (NVCA) produced a return of -30.9%.
o RETURN ON REALIZED INVESTMENTS HAS BEEN A STUNNING -79.2%.
3
MVC'S ABYSMAL INVESTMENT PERFORMANCE
================================================================================
PERFORMANCE OF ALL REALIZED INVESTMENTS TO DATE
--------------------------------------------------------------------------------
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%
--------------------------------------------------------------------------------
4
MVC'S ABYSMAL INVESTMENT PERFORMANCE
================================================================================
DATAPLAY
Investment Record
-----------------
June 2001: $ 7,500,000 Equity
May 2002: $ 2,000,000 Convertible Note
June 2002: $ 500,000 Convertible Note
June 2002 $ 1,000,000 Convertible Note
August 2002: $ 200,000 Convertible Note
August 2002: $ 400,000 Convertible Note
August 2002: $ 200,000 Convertible Note
Sept 2002: $ 200,000 Convertible Note
-----------
TOTAL $12,000,000
CEO Grillos wrote on August 26, 2002 to shareholders:
"this month I would like to talk about DataPlay, a Boulder Colorado-based
portfolio company that I am particularly excited about."
o On July 31, 2002 the Valuation Committee of MVC wrote Equity investment
DOWN 66% from $7,500,000 to $2,500,000.
o On October 10, 2002 the Valuation Committee further wrote down the Equity
investment to a value of $0.
o On October 30, 2002 the Valuation Committee wrote down the collective value
of the Convertible Notes by 50% from $4,000,000 to $2,000,000.
o On November 20, 2002 DataPlay filed for BANKRUPTCY under Chapter 11.
o In December 2002 Boulder newspapers reported that the Bankruptcy Court had
received a bid for DataPlay's assets in the amount of $1.3 million.
5
MVC'S DEPLORABLE CORPORATE GOVERNANCE
================================================================================
o MVC disregards 2-1 shareholder vote, "internalizes management", and retains
same management team, prompting SEC investigation.
o Delaware Chancery Court rules that election of directors at both 2001 and
2002 Annual Meetings was procured by the use of "materially false and
misleading" proxy materials.
o Management attempt at self-dealing also uncovered during Delaware court
case: CEO proposed MVC support of failing private investment.
o MVC dramatically increases rate of investment, drawing down nearly $20
million in cash the week following Court opinion.
o SmartForce PLC restates earnings, MVC CEO Grillos, also a SmartForce
director, named in class action lawsuits. SEC orders formal order of
investigation.
6
MVC'S DEPLORABLE CORPORATE GOVERNANCE
================================================================================
eVINEYARD: SELF DEALING AND CONFLICTS OF INTEREST
JOHN GRILLOS: CHAIRMAN MAY 1999 - NOV 2001
DIRECTOR MAY 1999 - JAN 2002
PERSONAL INVESTMENT: $256,000
ITECH VENTURES INVESTMENT: $1,474,000
OSPREY INVESTMENT: $1,500,000
LARRY GERHARD: CEO MAY 1999 - JANUARY 2002
CHAIRMAN JANUARY 2002 -
HAROLD HUGHES: COO, PRESIDENT JUNE 1999 - MARCH 2002
DIRECTOR MAY 1999 -
"The Fund would end up owning eVineyard stock in a deal that essentially boils
down to a straight purchase of eVineyard stock [for $1 million] despite
machinations created to make it look otherwise...Even if this transaction is
legal (which is questionable at this juncture), the appearance of conflict is so
great that we at meVC Advisors do not wish for this deal to go forward."
CFO Paul Wozniak, November 2001
o January 2002, eVineyard was recapitalized, and its original equity
investors suffered a virtually complete loss of its capital.
o The San Jose Mercury News reported: "[T]he online wine retailer's books for
the past two years simply weren't there. The auditors had thrown up their
hands in despair. The creditors were suing. And the former chief financial
officer was nowhere to be found."
7
MVC'S DEPLORABLE CORPORATE GOVERNANCE
================================================================================
o "It is undisputed that no information relating to Grillos's association
with eVineyard, Gerhard and Hughes was ever disclosed to the Fund's
shareholders." Opinion, page 7.
o "[T]he court's conclusion [is] that the election of directors at both the
2001 and 2002 Annual Meetings was procured by the use of materially false
and misleading proxy materials." Opinion, page 16.
Judge Lamb
Memorandum Opinion and Order, C.A. 19523, December 19, 2002
8
MVC'S DEPLORABLE CORPORATE GOVERNANCE
================================================================================
MVC TOTAL CASH
[GRAPHIC OMITTED]
Graph shows sharp decline in cash position of the fund following the December
19, 2002 court decision ordering new director elections.
Since the Delaware Court ordered new director elections on December 19th, MVC
management dramatically accelerated its rate of investment.
9
MVC'S DEPLORABLE CORPORATE GOVERNANCE
================================================================================
SMARTFORCE
"SmartForce PLC shares plunged 34 percent after the maker of training software
said it will restate more than three years of results because of improper
revenue recognition." Bloomberg, November 19, 2002.
"SkillSoft PLC, today announced that it is the subject of a formal order of
private investigation entered by the Securities and Exchange
Commission...SkillSoft understands that the SEC's investigation concerns
SmartForce's financial disclosure and accounting during that period, other
related matters, compliance with rules governing reports required to be filed
with the Commission, and the conduct of those responsible for such matters."
SkillSoft PLC, PR Newswire, February 3, 2002.
- Class action lawsuit announced against SmartForce dba SkillSoft, naming
John Grillos as defendant, on December 11, 2002.
- John Grillos served as director since 1994, as COO and Executive Vice
President in 1998, and resigned as director in 2002. MVC IPO documents
claimed Grillos ceased executive functions in 1999, but Grillos SIGNED
a SmartForce registration statement made October 29, 2001 with the SEC
as Executive Vice President and Chief Operating Officer, (available
www.SEC.gov).
- John Grillos served as a member of the audit committee, stock option
committee, and compensation committee according to the 1998 SmartForce
proxy statement.
- No mention of SmartForce made in MVC 2003 proxy statement.
10
A CLEAR CHOICE
================================================================================
MILLENCO'S MVC'S Abysmal Investment Performance
And
Superior Plan Deplorable Corporate Governance
VS.
for
Long Term Returns
11
MILLENCO: SUPERIOR PLAN FOR LONG TERM RETURNS
================================================================================
MANAGERS MATTER
o In the 30 years from 1972 to 2002, the average return for the top quarter
of early-stage VC funds was +19.6% while the performance for the bottom
quarter was -11.4%, according to Harvard Business School Professor Josh
Lerner. February 6, 2003 WSJ: "Something Ventured", by Mark Boslet.
o Millenco believes MVC's prospects would be bright if management is changed.
o MVC has tax losses by Millenco's estimate of approximately $115 million. A
high quality management team could shelter future capital gains and unlock
significant value. MILLENCO DOES NOT ADVOCATE LIQUIDATION, BECAUSE
LIQUIDATION WOULD ELIMINATE THIS POTENTIAL.
12
MILLENCO: SUPERIOR PLAN FOR LONG TERM RETURNS
================================================================================
o MVC SHOULD BE RUN AS A MORE TRADITIONAL INVESTMENT COMPANY. Today several
companies with the same corporate structure as MVC offer dividend yields in
excess of 10% and trade at a PREMIUM to their net asset value, while MVC
has a dividend yield of less than 1% and trades at an average 35% discount
to net asset value.
o MVC has claimed since inception that it is the first fund to offer venture
capital to the public. The reality is rather different. Several public BDCs
exist and trade at PREMIUMS to book value. MVC has always traded at a
discount to book value.
o The crucial distinction between MVC and other more traditional investment
company: DIVERSIFICATION OF PORTFOLIO. MVC's focus on Internet and
information technology is too narrow. The portfolio needs a balance of more
mature, cash generative companies to achieve a premium valuation.
13
MILLENCO: SUPERIOR PLAN FOR LONG TERM RETURNS
================================================================================
Price Market
Company (Symbol) to Book Yield Cap ($ mm)
--------------------------------------------------------------------------------
Allied Capital (ALD) 1.48 11.0% 2,212.2
American Capital Strategies (ACAS) 1.41 11.9% 1,065.8
Gladstone Capital Corp. (GLAD) 1.23 5.4% 160.8
MVC Capital (MVC) 0.72 0.5% 136.6
o MVC's average discount over the last 12 months has been 35%, giving a price
to book ratio of 0.65. In terms of share price, this means that for an NAV
of $11.5, MVC's share price is $7.50.
o If MVC's shares moved from 0.7 to 1.2 times book value, this would imply
appreciation from $8.1 to $13.9, a gain of 72%.
14
MILLENCO: SUPERIOR PLAN FOR LONG TERM RETURNS
================================================================================
MILLENCO NOMINEES
o GERALD HELLERMAN - a distinguished former public servant and branch chief
of the U.S. Securities and Exchange Commission.
o BRUCE W. SHEWMAKER - a seasoned venture capitalist and managing director of
Crossbow Ventures Inc.
o GEORGE W. KARPUS -president and chief executive officer of Karpus
Management, MVC's third largest shareholder.
o EMILIO A. DOMINIANNI - retired partner of, and currently a consultant to,
the law firm of Coudert Brothers LLP.
o ROBERT S. EVERETT - a veteran of crisis management and corporate
restructuring.
o TERRY FEENEY - vice chairman and chief operating officer of Millennium
Partners, with more than 20 years experience in securities operations.
o ROBERT KNAPP - managing director of Millennium Partners, MVC's largest
shareholder.
15
MILLENCO: SUPERIOR PLAN FOR LONG TERM RETURNS
================================================================================
MILLENCO'S PLATFORM
o Election of New Leadership to restore shareholder value.
- Talented Director Nominees.
- Diversity of Experience.
- Large ownership stake: each nominee is also a shareholder, with
collectively nearly 100 times the ownership of Mr. Grillos and his
nominees.
- Sound business plan for improving performance.
- Unanimous commitment not to serve more than one year without approval
by the Fund's shareholders.
o Approval of Shareholder Proposals.
- Proposal 4: Recommending that Fund's Board amend by-laws to grant
shareholders limited right to call special meetings.
- Proposal 5: Authorizing self-tender for 25% of shares at 95% of NAV in
years where NAV discount exceeds 10%.
o Implementation of Action Plan.
16
MILLENCO: SUPERIOR PLAN FOR LONG TERM RETURNS
================================================================================
MILLENCO'S ACTION PLAN
o Appoint interim CEO.
o Sharply reduce new investments.
o Contain expenses.
o Conduct review of portfolio with outside auditor to review NAV.
o Finalize terms of investment advisory agreement with the new investment
advisor. Objective of the new Board of Directors is to have agreement
finalized by March 7, 2003.
o Schedule special meeting of shareholders for the approval of advisor
contract to take place no later than May 15, 2003.
17
MILLENCO: SUPERIOR PLAN FOR LONG TERM RETURNS
================================================================================
MILLENCO'S ACTION PLAN
o Take all necessary steps to:
- Eliminate Classified Board.
- Eliminate supermajority voting rights.
- Amend by-laws to make it allow shareholders to call special meetings.
18
MILLENCO: SUPERIOR PLAN FOR LONG TERM RETURNS
================================================================================
SUMMARY
o New Team
o New Strategy
o Lower Operating Costs
o Lower Risk Portfolio
o Increased Yield
o Improved Transparency
o Sound Corporate Governance
19
MILLENCO: SUPERIOR PLAN FOR LONG TERM RETURNS
================================================================================
CONCLUSION
The destruction of shareholder value at MVC must be stopped. It is time to elect
a talented, experienced, and committed Board, and to retain a premier investment
advisor for future long term growth.
20
APPENDIX
MILLENCO NOMINEES
================================================================================
o GERALD HELLERMAN, 65, has been a distinguished public servant and was a
branch chief of the Securities and Exchange Commission. Currently he is the
principal of Hellerman Associates, a financial and corporate consulting
firm he founded in 1993. Present clients 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 SEC 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.
o ROBERT C. KNAPP, 36, is a managing director of Millennium Partners. Mr.
Knapp specializes in identifying undervalued assets and turnaround
situations. He successfully led Millennium's effort to restructure the
International Biotechnology Trust in 2000, which was supported by over 66%
of shareholders and resulted in the recovery by the fund of over $1 million
in share options improperly taken by then current management. Mr. Knapp
also helped design the debt restructuring of Ashanti Goldfields in 2002,
which led to dramatic improvement in liquidity and contributed to a
threefold appreciation of the shares from 2001 to 2002.
22
MILLENCO NOMINEES
================================================================================
o BRUCE W. SHEWMAKER, 57, is a vice president of Crossbow Venture Partners
Corp., the general partner of Crossbow Venture Partners LP, a licensed
small business investment company, a position he has held since co-founding
Crossbow in 1999. Crossbow is responsible for $160 million in capital
commitments. From 1999 until 2001, he was 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 with
$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., eMotion, Inc.,
and ResQNet.com, Inc. During the past five years he also served as a
director of Atlantis Technologies, Inc., and Direct Capital Markets, Inc.
Mr. Shewmaker is also a co-founder and director of Infrared Imaging
Systems, Inc.
o 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.
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MILLENCO NOMINEES
================================================================================
o 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 United States Army in 1950 and 1951 and fought in the
Korean war.
o 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. Mr. Feeney is a CPA and member
of the American Institute of Certified Public Accountants and the
Securities Industry Association.
24
MILLENCO NOMINEES
================================================================================
o 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. Everett & Solsvig was retained 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.
25
IMPORTANT INFORMATION
================================================================================
To the extent that the foregoing release may be considered a "solicitation," as
defined by SEC regulations, such solicitation is being made by Millenco. L.P., a
Delaware limited partnership, which 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. The sole manager of
Millennium Management, LLC is Israel A. Englander. The principal office of
Millenco, Millennium and Mr. Englander is 666 Fifth Avenue, New York, New York
10103.
For a description of the Millenco's direct or indirect interests in the Fund, we
refer you to Millenco's filings on Schedule 13D which can be obtained from the
SEC's website, www.sec.gov.
Millenco, L.P. has filed its definitive proxy statement with the Securities and
Exchange Commission, and it will file additional solicitation material with the
SEC in the future. SHAREHOLDERS SHOULD READ SUCH PROXY STATEMENT AND OTHER
SOLICITATION MATERIAL CAREFULLY BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.
ANY AND ALL PROXY STATEMENTS AND OTHER MATERIAL FILED IN CONNECTION WITH THE
SHAREHOLDERS MEETING WILL BE AVAILABLE, FOR FREE, AT THE SECURITIES AND EXCHANGE
COMMISSION'S WEBSITE WWW.SEC.GOV AND AT WWW.MEVCSHAREHOLDERS.COM. IN ADDITION,
MILLENCO WILL MAKE AVAILABLE WITHOUT CHARGE, VIA EMAIL, ANY PROXY STATEMENT OR
OTHER SOLICITATION MATERIAL IT MIGHT ISSUE, TO SHAREHOLDERS WHO REQUEST IT BY
CONTACTING US AT: MEVCSHAREHOLDERS@YAHOO.COM.
The statements in this press release may be "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements are subject to risks and uncertainties. In particular, statements in
this press release that state the intentions, beliefs, expectations, strategies,
predictions of Millennium or its nominees for directors with respect to the Fund
and its operations, or any other statements relating to the Fund's future
activities or other future events or conditions are "forward-looking
statements." Forward-looking statements are not guarantees of future performance
and involve risks, uncertainties and other factors, as well as general economic
conditions, which are difficult to predict and any one or more of which could
cause actual results to differ materially from those stated in such statements.
Any forward-looking statements speak only as of the date on which the material
is released, and Millennium does not undertake any obligation to update any
forward-looking statement to reflect events or circumstances after the date of
such information is released.
26