WASHINGTON, D.C. 20549
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 3, 2019
This document will give you the information you need to vote on the matters listed on the accompanying Notice of Annual Meeting of Stockholders (the "Notice of Annual Meeting"). Much of the information in this proxy statement (this "Proxy Statement") is required under rules of the Securities and Exchange Commission ("SEC"); some of it is technical. If there is anything you do not understand, please contact us at 212-810-5800.
This Proxy Statement is furnished in connection with the solicitation by the Board of Directors (the "Board," each member of which is referred to as a "Director") of BlackRock Capital Investment Corporation (the "Company," "we," "our" or "us"), of proxies to be voted at the 2019 Annual Meeting (the "Annual Meeting") of owners of shares of common stock (the "Stockholders") of the Company and, if the Annual Meeting is adjourned, postponed or delayed, at any later meetings, for the purposes stated in the Notice of Annual Meeting. The Annual Meeting will be held on the 4th floor of 40 East 52nd Street, New York, New York, on May 3, 2019 at 10:00 a.m. (New York City time). This Proxy Statement, the Notice of Annual Meeting and the enclosed proxy card are first being sent to Stockholders on or about March 20, 2019.
WHY IS A STOCKHOLDER MEETING BEING HELD?
To address various proposals that require Stockholder approval.
WHAT PROPOSALS WILL BE VOTED ON?
In the first proposal (the "First Proposal" or "Proposal 1"), Stockholders are being asked to elect the Class III Directors to the Board of the Company.
In the second proposal (the "Second Proposal" or "Proposal 2"), Stockholders are being asked to ratify the selection of Deloitte & Touche LLP to serve as the Company's independent registered public accounting firm for the year ending December 31, 2019.
WILL MY VOTE MAKE A DIFFERENCE?
YES! Your vote is important to the governance of the Company, no matter how many shares you own.
WHO IS ASKING FOR YOUR VOTE?
The enclosed proxy is solicited by the Board for use at the Annual Meeting to be held on May 3, 2019, and, if the Annual Meeting is adjourned, postponed or delayed, at any later meetings, for the purposes stated in the Notice of Annual Meeting (see previous page).
HOW DOES THE COMPANY'S BOARD RECOMMEND THAT STOCKHOLDERS VOTE ON THE PROPOSALS?
The Board recommends that you vote "FOR" each Proposal.
WHO IS ELIGIBLE TO VOTE?
Stockholders of record at the close of business on March 5, 2019 are entitled to be present and to vote at the Annual Meeting or any adjournments, postponements or delays thereof. Each share of common stock is entitled to one vote. Shares represented by duly executed proxies will be voted in accordance with your instructions. If you sign the proxy, but do not fill in a vote, your shares will be voted in accordance with the Board's recommendation. If any other business is brought before the Annual Meeting, your shares will be voted by the proxyholders at their discretion according to the Board's recommendation.
3
WHAT IS TH
E DIFFERENCE BETWEEN A STOCKHOLDER OF RECORD AND A BENEFICIAL OWNER OF SHARES?
Stockholders of record own shares that are registered directly in their name with the Company's transfer agent, BNY Mellon Investment Servicing (US) Inc. The Notice of Annual Meeting, Proxy Statement and proxy card are being sent directly to Stockholders of record by the Company. Stockholders of record have the right to vote in person at the Annual Meeting or to grant a voting proxy directly to anyone to vote in their place.
Beneficial owners of shares own shares that are held in a stock brokerage account or by a bank or other nominee. The Notice of Annual Meeting, Proxy Statement and proxy card are being forwarded to beneficial owners by their respective broker, bank or other nominee who is considered, with respect to those shares, the Stockholder of record. A beneficial owner has the right to direct its broker, bank or other nominee on how to vote and is also invited to attend the Annual Meeting. A beneficial owner may vote shares by voting in accordance with the Notice of Annual Meeting, by returning a proxy card to the Company or by making an arrangement with its broker, bank or other nominee concerning how such broker, bank or other nominee should vote its shares. A beneficial owner may also vote its shares in person at the Annual Meeting, if the beneficial owner brings a brokerage statement reflecting its stock ownership as of March 5, 2019, the record date.
HOW DO I VOTE BY PROXY?
Stockholders of record may authorize a proxy to vote on their behalf by mail, as described on the enclosed proxy card. Authorizing a proxy will not limit a Stockholder's right to vote in person at the Annual Meeting. A properly completed and submitted proxy timely received by the Company before the Annual Meeting will be voted in accordance with the Stockholder's instructions, unless those instructions are subsequently revoked. If the Stockholder authorizes a proxy without indicating voting instructions, the proxyholders will vote the Stockholder's shares at their discretion according to the Board's recommendations. Stockholders of record may also vote either via the Internet or by telephone. The enclosed proxy card includes specific instructions to be followed by Stockholders of record interested in voting via the Internet or by telephone. The Internet and telephone voting procedures are designed to authenticate a Stockholder's identity and to allow Stockholders to vote their shares and to confirm that their instructions have been properly recorded. Stockholders that vote via the Internet should understand that there may be costs associated with electronic access, such as usage charges from Internet access providers and telephone companies, which will be borne by the Stockholder.
HOW DO I VOTE IF MY SHARES ARE HELD THROUGH A BROKER?
Stockholders who hold shares of common stock through a broker, bank or other nominee must follow the voting instructions provided by the broker, bank or nominee, whichever is the record holder. If a Stockholder holds shares of common stock through a broker, bank or other nominee and the Stockholder wishes to vote in person at the Annual Meeting, the Stockholder must obtain a legal proxy from the record holder of the Stockholder's shares and present the proxy at the Annual Meeting. If the Stockholder does not vote in person at the Annual Meeting or does not submit voting instructions to its broker, bank or nominee, the broker, bank or other nominee will not be permitted to vote the Stockholder's shares on non-routine proposals. The First Proposal is considered a non-routine proposal. For non-routine proposals, a broker, bank or other nominee that holds shares in street name on behalf of a Stockholder must receive voting instructions from the beneficial owner of the shares in order for the shares to be voted at the Annual Meeting. Broker non-votes represent those shares held in street name for which the beneficial Stockholder has not provided voting instructions. Since the Second Proposal is a routine proposal, there may be broker non-votes at the Annual Meeting. With respect to the First Proposal, Mark S. Lies, Maureen K. Usifer, and James E. Keenan would be elected by the affirmative vote of a plurality of all shares of common stock of the Company present, in person or by proxy, at the Annual Meeting. When there are three director nominees up for election, as is the case here, a vote by plurality means the three director nominees with the highest number of affirmative votes will be elected, regardless of the votes withheld for the candidates. Therefore, with respect to the First Proposal, withheld votes and broker non-votes, if any, will not be counted towards a nominee's achievement of a plurality. If the beneficial owner does not provide voting instructions, the broker, bank or other nominee cannot vote its shares for the First Proposal. If the beneficial owner authorizes a proxy or properly executes any materials prepared by the broker, bank or other nominee without indicating voting instructions, the broker, bank or other nominee will vote its shares according to the Board's recommendations.
4
CAN I REVOK
E MY PROXY OR CHANGE MY VOTE?
The Stockholder of record can revoke a proxy at any time before it is exercised at the Annual Meeting by (1) delivering a written revocation notice prior to the Annual Meeting to BlackRock Capital Investment Corporation, Attention: Corporate Secretary, 40 East 52nd Street, New York, New York 10022; (2) submitting a later-dated proxy card, a later-dated electronic vote via the website stated on the proxy card, or a later-dated vote using the toll-free telephone number stated on the proxy card; or (3) voting in person at the Annual Meeting. If the Stockholder holds shares of common stock through a broker, bank or other nominee, the Stockholder must follow the instructions received from the broker, bank or other nominee in order to revoke the voting instructions. Attending the Annual Meeting does not revoke a proxy unless the Stockholder also votes in person at the Annual Meeting.
WHO IS PAYING FOR THE SOLICITATION OF PROXIES?
The Company will bear the expense of the solicitation of proxies for the Annual Meeting, including the cost of preparing, assembling, printing, mailing and posting to the Internet the Notice of Annual Meeting, this Proxy Statement, the proxy card and any additional information furnished to Stockholders. The Company intends to use the services of Georgeson Inc. to assist in the solicitation of proxies. The Company expects to pay market rates for such services, with an estimated fee not to exceed $6,500 plus expenses.
Proxies may also be solicited in person and/or by telephone, mail, facsimile transmission or email by the Directors or our officers and/or the officers or employees of BlackRock Capital Investment Advisors, LLC, the Company's investment advisor (the "Advisor"), or its affiliates. No additional compensation will be paid to the Directors, officers or regular employees for such services.
WHAT VOTE IS REQUIRED TO APPROVE EACH OF THE PROPOSALS?
First Proposal
. The affirmative vote of a plurality of all shares of common stock of the Company present at the Annual Meeting, in person or by proxy, is required to elect each of the nominees as a director. A vote by a plurality means the three nominees with the highest number of affirmative votes, regardless of the votes withheld for the candidates, will be elected.
Second Proposal
. The affirmative vote of a majority of all shares of common stock of the Company present at the Annual Meeting, in person or by proxy, and entitled to vote, is required to ratify the selection of Deloitte & Touche LLP to serve as the Company's independent registered public accounting firm for the year ending December 31, 2019. Because brokers will have discretionary authority to vote for the ratification of the selection of the Company's independent registered public accounting firm in the event that they do not receive voting instructions from the beneficial owner of the shares, there should not be any broker non-votes with respect to the Second Proposal.
HOW ARE VOTES COUNTED?
First Proposal.
Stockholders may vote "For" or "Withhold." A vote for "Withhold" with respect to a nominee for director will be treated as present for purposes of determining a quorum for the Annual Meeting but will not be counted towards a nominee's achievement of a plurality. Where there are three director nominees up for election, as is the case here, a vote by a plurality means the three nominees with the highest number of affirmative votes, regardless of the votes withheld for the candidates, will be elected. As a result, a "Withhold" vote will have no effect on the First Proposal. If a Stockholder holds shares through a broker, bank or other nominee, the Stockholder's broker, bank or other nominee will not be permitted to exercise voting discretion with respect to the First Proposal. Therefore, if a Stockholder holds shares through a broker, bank or other nominee and the Stockholder does not give its broker, bank or other nominee specific instructions on how to vote and sufficient shares are present at the Annual Meeting for quorum purposes, or the Stockholder does not vote in accordance with the voting instructions on the proxy card, the Stockholder's shares will be treated as present for purposes of establishing quorum, but will not be counted towards a nominee's achievement of a plurality. However, if a Stockholder authorizes a proxy or properly executes any materials prepared by broker, bank or other nominee without indicating voting instructions, the broker, bank or other nominee will have the discretion to vote the Stockholder's shares according to the Board's recommendations.
5
Second Proposal
. Stockholders may vote "For," "Against," or "Abstain." A vote for "Abstain" with respect to the Second Proposal will be
considered present for the purpose of determining the presence of a quorum and will have the effect of a vote against the Second Proposal. Because brokers will have discretionary authority to vote for the ratification of the selection of the Company's ind
ependent registered public accounting firm in the event that they do not receive voting instructions from the beneficial owner of the shares, there should not be any broker non-votes with respect to the Second Proposal. If a Stockholder holds shares throug
h a broker, bank or other nominee, the Stockholder's broker, bank or nominee will be permitted to exercise voting discretion with respect to the Second Proposal.
If a Stockholder holds shares in its own name (i.e., not through a bank, broker or nominee) and signs and returns a proxy card with no further instructions, the Stockholder's shares will be voted in accordance with the recommendations of the Board with respect to the First and Second Proposals. The proxyholders will vote in accordance with their discretion with regard to any other matter that properly comes before the Annual Meeting.
If there appears not to be enough votes to approve any of the Proposals at the Annual Meeting, the Chair of the Annual Meeting or a majority of the Stockholders who are represented in person or by proxy and entitled to vote at the Annual Meeting may vote to adjourn the Annual Meeting to permit the further solicitation of proxies. The persons named as proxies will vote proxies held by them for such adjournment, unless marked to be voted against the proposal for which an adjournment is sought, to permit the further solicitation of proxies.
HOW MANY SHARES OF THE COMPANY WERE OUTSTANDING AS OF THE RECORD DATE?
The Company had 68,836,255 shares of common stock outstanding at the close of business on the record date. Each share of common stock is entitled to one vote.
WHAT IS A QUORUM FOR PURPOSES OF THE PROPOSALS BEING VOTED ON AT THE ANNUAL MEETING?
The holders of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting and present in person or by proxy will constitute a quorum for the Proposals; provided, however, that if there is no contest for the election of Directors, and a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting are not present in person or by proxy, the holders of one-third of such shares shall constitute a quorum to the extent permitted by applicable law. In the event there are not sufficient votes for a quorum or to approve the Proposals at the time of the Annual Meeting, the Annual Meeting may be adjourned, postponed or delayed in order to permit further solicitation of proxies by the Company.
THE PROPOSALS
FIRST PROPOSAL
: TO ELECT THE CLASS III DIRECTORS.
WHO ARE THE NOMINEES FOR CLASS III DIRECTORS?
Mark S. Lies, Maureen K. Usifer and James E. Keenan have been re-nominated for election to the Board at the Annual Meeting. Certain information concerning Mr. Lies, Ms. Usifer and Mr. Keenan is set forth below. Mr. Lies has been a Director of the Company since 2016, Ms. Usifer has been a Director of the Company since 2005 and Mr. Keenan has been a Director of the Company since 2017.
The Board currently consists of seven (7) Directors and is divided into three classes, designated Class I, Class II and Class III. The term of office of one class of Directors expires at each annual meeting of Stockholders on a staggered basis. Each class of Directors holds office for a three-year term. For example, Meridee A. Moore and William E. Mayer stood for re-election as Class II Directors at last year's annual meeting of Stockholders; the Class I Directors, John R. Baron and Jerrold B. Harris are expected to stand for re-election at the Company's 2020 annual meeting of Stockholders; and the Class III Directors, Mark S. Lies, Maureen K. Usifer and James E. Keenan, stand for re-election at this year's annual meeting of Stockholders and if re-elected will serve as Class III Directors. Each Director holds
office for the three-year term to which he or she is elected and until his or her successor is duly elected and qualifies or until his or her earlier resignation, removal from office, death or incapacity.
6
The NASDAQ Global Select Market ("NASDAQ") rules require listed companies, such as the Company, to have a board of directors composed of at least a majority of independent directors. Independent directors are those who are not interested persons of the C
ompany or of the Advisor, for purposes of the 1940 Act (the "Independent Directors"). Section 2(a)(19) of the 1940 Act defines an "interested person" to include, among other things, any person who has, or within the last two years had, a material business
or professional relationship with the Company. As part of its annual assessment of director independence as required under NASDAQ rules, our Board has determined that each of the following Directors are independent: Messrs. Baron, Harris, Lies and Mayer, M
s. Usifer and Ms. Moore. Based upon information requested from each Director concerning his or her background, employment and affiliations, our Board has affirmatively determined that none of the Independent Directors has a material business or professiona
l relationship with the Company, other than in his or her capacity as a member of the Board or any Board committee.
Mr. Lies and Ms. Usifer are nominees for Independent Directors. Mr. Keenan is our Interim Chief Executive Officer and, if elected, will be an Interested Director:
Name, Address
and Year of Birth(1)
|
Positions Held with the Company
and Principal Occupation(s)
During the Past 5 Years and Other
Background Information
|
Term of Office
and Length of
Time Served
|
Number of
Portfolios in
Fund
Complex
Overseen by
Director or
Nominee
|
Other Directorships
Held by Director or
Nominee for Director
During the Past 5 Years
|
Independent Director Nominees:
|
|
|
|
|
|
|
|
|
|
Mark S. Lies
1960
|
Mr. Lies is a Director of the Company and a nominee for Director at the Annual Meeting. From 2008 to 2011, Mr. Lies was a Board Member and Co-Chair of the Investment Committee of the Montana State University Foundation. From 2000 to 2005, Mr. Lies was Global Head of Loan Products and Co-Head of Leveraged Finance for Lehman Brothers Holdings, Inc. responsible for origination, underwriting, distribution, trading and portfolio management of global loan products. He was also a member of the Firm Wide, High Yield and Investment Grade committees, as well as the Business Development Committee.
From 1999 to 2000, he was the Global Co-Head of Leveraged Finance for Bear Sterns & Co., Inc., where we has also a member of the Firm Wide and High Yield Credit committees. From 1987 to 1999, Mr. Lies was an employee of Bank of America Corporation, where his most recent title was Head of U.S. Syndicated Finance. From 1982 to 1986, he was a member of the Chevron Corporation's Corporate Engineering Department. Mr. Lies received a B.S. in Chemical Engineering from Montana State University and an M.B.A. in Finance from the University of California, Los Angeles.
|
Director since
2016; Term
expires 2019.
|
None
(2)
|
None
|
7
Name, Address
and Year of Birth(1)
|
Positions Held with the Company
and Principal Occupation(s)
During the Past 5 Years and Other
Background Information
|
Term of Office
and Length of
Time Served
|
Number of
Portfolios in
Fund
Complex
Overseen by
Director or
Nominee
|
Other Directorships
Held by Director or
Nominee for Director
During the Past 5 Years
|
Independent Director Nominees
:
|
|
|
|
|
|
|
|
|
|
Maureen K. Usifer
1960
|
Ms. Usifer is a Director of the Company and a nominee for Director at the Annual Meeting. Ms. Usifer has been a member of the Green Mountain Care Board, a regulatory board in Vermont responsible for approving hospital budgets, insurance rates and capital projects, since May 2017. Ms. Usifer served as CFO of Seventh Generation Inc., a distributor of its brand of household and personal care products, from April 2012 until June 2016. From April 2009 until April 2012, Ms. Usifer served as Vice President of Investor Relations with Church & Dwight Co., Inc. ("Church & Dwight"), a major producer of baking soda and consumer products.
From May 2004 until April 2009, she was a senior finance director with Church & Dwight. From October 2001 until May 2004, Ms. Usifer was the Chief Financial Officer for Armkel, LLC a joint venture with Church & Dwight and Kelso & Company, L.P. which encompassed over $400 million in personal care sales. Ms. Usifer was Division Controller of Church & Dwight's Armus joint venture, which encompassed $500 million in laundry sales, from May 2000 through October 2001. From 1996 through 2000, Ms. Usifer was a Senior Finance Manager of Church & Dwight responsible for all of the Arm & Hammer's personal care businesses. Ms. Usifer received an undergraduate degree in business from St. Michael's College and an M.B.A. in Finance from Clarkson University.
|
Director since
2005; Term
expires 2019.
|
None
(2)
|
Ms. Usifer currently serves as a Director of Liberty All Star Funds and serves as chair of the audit committee. Ms. Usifer serves as a trustee of St. Michael’s College.
|
|
|
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8
Name, Address
and Year of Birth(1)
|
Positions Held with the Company
and Principal Occupation(s)
During the Past 5 Years and Other
Background Information
|
Term of Office
and Length of
Time Served
|
Number of
Portfolios in
Fund
Complex
Overseen by
Director or
Nominee
|
Other Directorships
Held by Director or
Nominee for Director
During the Past 5 Years
|
Interested Director Nominees:
|
|
|
|
|
|
|
|
|
|
James E. Keenan,
CFA (3)
1976
|
James E. Keenan is Chair of the Board of the Company, Managing Director of BlackRock, Chief Investment Officer and Global Co-Head of Fundamental Credit as well as a member of BlackRock’s Global Operating Committee and the BlackRock Alternative Investment
Executive Committee
and a nominee for Director at the Annual Meeting
. Mr. Keenan leads the strategy for Global Fundamental Credit and is responsible for providing oversight of the investment process and performance, the partnerships with BlackRock’s distribution channels, and the team’s infrastructure. Mr. Keenan has oversight of the Investment Grade Credit and Sub- Investment Grade Credit businesses, is Chief Investment Officer of the Leveraged Finance team and also oversees alternative and distressed products.
Prior to joining BlackRock in 2004, Mr. Keenan was a Senior High Yield Trader at Columbia Management Group. He began his investment career at UBS Global Asset Management where he was a Trader and Research Analyst from 1998 through 2003. Mr. Keenan earned a BBA degree in finance from the University of Notre Dame in 1998.
|
Director since
2017; Term
expires 2019.
|
None
(2)
|
Mr. Keenan serves as a board member of Good Shepherd Services.
|
|
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(1)
|
Unless otherwise specified, the business address of the Directors and officers of the Company is c/o BlackRock Capital Investment Corporation, 40 East 52
nd
Street, New York, New York 10022.
|
(2)
|
Other than the Company.
|
(3)
|
Mr. Keenan is an "interested person" (for purposes of the 1940 Act) of the Company because he is an officer ofthe Advisor.
|
9
Below is information concerning the Directors who are not subject to re-election at the Annual Meeting:
Name, Address
and Year of Birth(1)
|
Positions Held with the Company
and Principal Occupation(s)
During the Past 5 Years and Other
Background Information
|
Term of Office
and Length of
Time Served
|
Number of
Portfolios in
Fund
Complex
Overseen by
Director or
Nominee
|
Other Directorships
Held by Director or
Nominee for Director
During the Past 5 Years
|
Independent Directors:
|
|
|
|
|
|
|
|
|
|
John R. Baron
1957
|
Mr. Baron is a Director of the Company. Mr. Baron is Managing Partner of Crystal Ridge Partners, LP, a New Jersey based private equity firm. Prior to joining Crystal Ridge Partners, Mr. Baron was a Senior Partner of JP Morgan Partners, LP, a global private equity firm, and its predecessors. Prior to joining the private equity unit in 1995, Mr. Baron previously held senior management positions in banking and investment banking with JP Morgan and its predecessors.
In addition to serving on the board of a number of not-for-profit organizations, Mr. Baron currently serves as a Director for Crystal Ridge Partners, Big Rock Sports, a leading distributor of hunting and fishing products, Bronco Manufacturing, a leading manufacturer of spare parts for oil and gas drilling rigs and Rufus Aviation Fund, an aerospace parts business. Mr. Baron also serves on the compensation committee for Big Rock Sports. Mr. Baron received a BS from Lehigh University, an MBA from Fordham University and he completed the Management Corporate Finance program at Harvard University.
|
Director since
2013; Term
expires 2020.
|
None
(2)
|
In addition to serving on the board of a number of not-for-profit organizations, Mr. Baron currently serves as a Director for Crystal Ridge Partners, a private equity firm, Big Rock Sports, a leading distributor of hunting and fishing products, Bronco Manufacturing, a leading manufacturer of spare parts for oil and gas drilling rigs and Rufus Aviation Fund, an aerospace part business.
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|
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Jerrold B. Harris
1942
|
Mr. Harris is a Director of the Company. Mr. Harris has been retired since 1999.
From 1990 to 1999, Mr. Harris was President and Chief Executive Officer of VWR Scientific Products Corporation (which was acquired by Merck KgaA in 1999). From 1996 to 2007, Mr. Harris was a director of the BlackRock Liquidity Funds.
Mr. Harris was a director of the active exchange-listed funds comprising the BlackRock Closed-End Fund Complex from 2007 to 2017. Mr. Harris was previously a Director of the Delta Waterfowl Foundation and Henry Troemner LLC and is currently a director emeritus of Ursinus College. Mr. Harris earned a B.S. degree from the University of California at Berkeley in 1964.
|
Director since
2005; Term
expires 2020.
|
None
(2)
|
Mr. Harris was a director of Henry Troemner LLC, a manufacturer of scientific equipment, from October 2000 to June 2016. In 2013, Mr. Harris became a director of Ducks Unlimited, Inc. (conservation) and Waterfowl Chesapeake (conservation). In 2015, Mr. Harris became a director of Ducks Unlimited Canada (conservation). In 2017, Mr. Harris became a director of Eastern Shore Land Conservancy. Mr. Harris is also a trustee of Ursinus College. From 1996 to 2007, Mr. Harris was a director of the BlackRock Liquidity Funds, and he has previously served as a director of the Delta Waterfowl Foundation. Mr. Harris was a director of the active exchange-listed funds comprising the BlackRock Closed-End Fund Complex from 2007 to 2017.
|
|
|
|
|
|
10
Name, Address
and Year of Birth(1)
|
Positions Held with the Company
and Principal Occupation(s)
During the Past 5 Years and Other
Background Information
|
Term of Office
and Length of
Time Served
|
Number of
Portfolios in
Fund
Complex
Overseen by
Director or
Nominee
|
Other Directorships
Held by Director or
Nominee for Director
During the Past 5 Years
|
Independent Directors:
|
|
|
|
|
|
|
|
|
|
William E. Mayer
Park Avenue Equity
Partners
1 E 52
nd
Street, 3
rd
Floor
New York, NY 1002
1940
|
Mr. Mayer is the lead Independent Director of the Company. Since 1999, Mr. Mayer has been a partner at Park Avenue Equity Partners, L.P. ("Park Avenue"), which he co-founded. From 1996 until the formation of Park Avenue, Mr. Mayer was a founding Partner of Development Capital, which invested in private and public companies. From the fall of 1992 until December 1996, Mr. Mayer was a professor and Dean of the College of Business and Management at the University of Maryland. From 1991 to 1992, Mr. Mayer served as a professor and Dean of the Simon Graduate School of Business at the University of Rochester.
Mr. Mayer worked for The First Boston Corporation (now Credit Suisse), a major investment bank, from 1967 to 1990. During his career at The First Boston Corporation, Mr. Mayer held numerous management positions including President and Chief Executive Officer. Mr. Mayer is currently a board member of Lee Enterprises (a newspaper company owning or having stakes in over 50 daily newspapers), Hambrecht Partners Holdings, LLC (a financial services firm that uses technology and auction processes to access financial markets) and Rosehill Inc. (an oil and gas company). Mr. Mayer is also a director of Premier, Inc. (a healthcare performance improvement alliance for hospitals, and served as a director of PEOPLExpress™ Airlines (an airlines company) until 2014. Mr. Mayer has been a director of numerous public, private and not-for- profit boards over the years. Mr. Mayer is a Trustee of the Aspen Institute and serves on its executive committee. Mr. Mayer is a former trustee of the Columbia Group of Mutual Funds. Mr. Mayer holds a B.S. degree and an M.B.A. degree from the University of Maryland.
|
Director since
2005; Term
expires 2021.
|
None
(2)
|
Mr. Mayer is currently a board member of Lee Enterprises (a newspaper company owning or having stakes in over 50 daily newspapers), Hambrecht Partners Holdings, LLC (a financial services firm that uses technology and auction processes to access financial markets) and Rosehill Inc. (an oil and gas company). Mr. Mayer is also a director of Premier, Inc. (a healthcare performance improvement alliance for hospitals). Mr. Mayer has been a director of numerous public, private and not-for-profit boards over the years. Mr. Mayer is a Trustee of the Aspen Institute and serves on its executive committee. Mr. Mayer served as a director of PEOPLExpress™ Airlines (an airlines company) until 2014. Mr. Mayer served as a trustee of the Columbia Funds Family of Mutual Funds until 2016.
|
|
|
|
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|
11
Name, Address
and Year of Birth(1)
|
Positions Held with the Company
and Principal Occupation(s)
During the Past 5 Years and Other
Background Information
|
Term of Office
and Length of
Time Served
|
Number of
Portfolios in
Fund
Complex
Overseen by
Director or
Nominee
|
Other Directorships
Held by Director or
Nominee for Director
During the Past 5 Years
|
Independent Directors:
|
|
|
|
|
|
|
|
|
|
Meridee A. Moore
1958
|
Ms. Moore is a Director of the Company. In 2002, Ms. Moore founded Watershed Asset Management, LLC (“Watershed”). She is currently the Senior Managing Member of Watershed. Prior to founding Watershed in 2002, Ms. Moore was Partner and Portfolio Manager of Farallon Capital Management, L.L.C. Ms. Moore has over 25 years of financial services experience and serves on the boards of a number of public and non-profit organizations, including Right To Play U.S., NextGen Climate America, Inc., Peer Health Exchange, Family Independence Initiative and Fiduciary Counselling. Ms. Moore was a Director of Right to Play International from 2004 until 2017 and a Director and Chair of the Investment Committee of Grace Cathedral from 2011 until 2017. Ms. Moore received her B.A. from the University of Colorado and her J.D. from Yale Law School.
|
Director since
2017; Term
expires 2021
.
|
None
(2)
|
Ms. Moore has been a director of numerous public and not-for-profit boards over the years. Ms. Moore currently serves as Director, Chair of the Governance Committee and Member of the HR Committee of Right to Play U.S., a Director of NextGen Climate America and Peer Health Exchange, Family Independence Initiative and a Director of Fiduciary Counselling. Ms. Moore was a Director and Chair of the Investment Committee of University High School from 2007 until 2013, a Director of Right to Play International from 2004 until 2017 and a Director and Chair of the Investment Committee of Grace Cathedral from 2011 until 2017.
|
(1)
|
Unless otherwise specified, the business address of the Directors and officers of the Company is c/o BlackRock Capital Investment Corporation, 40 East 52
nd
Street, New York, New York 10022.
|
(2)
|
Other than the Company.
|
DOES THE BOARD HAVE ANY COMMITTEES?
Yes. The Board has determined that the efficient conduct of the Company's affairs makes it desirable to delegate responsibility for certain specific matters to committees of the Board. The committees meet as often as necessary, either in conjunction with regular meetings of the Board or otherwise. The Board has created a Governance and Compensation Committee comprised of all of the Independent Directors. The Board has also created an Audit Committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (the "Exchange Act") comprised solely of Independent Directors.
Audit Committee
The Audit Committee operates pursuant to a charter approved by the Board, a copy of which is available on the Company's website at http://www.blackrockbkcc.com. The charter sets forth the responsibilities of the Audit Committee. The primary function of the Audit Committee is to serve as an independent and objective party to assist the Board in fulfilling its responsibilities for overseeing all material aspects of the Company's accounting and financial reporting processes, internal control and audit functions, monitoring the independence and performance of the Company's independent registered public accounting firm, providing a means for open communication among the Company's independent registered public accounting firm, financial and senior management and the Board, reviewing and commenting on preliminary valuation conclusions by independent valuations firms and overseeing compliance by the Company with legal and regulatory requirements. The Audit Committee is presently composed of six persons, including Mses. Usifer (Chair) and Moore and Messrs. Baron, Lies, Harris, and Mayer, each of whom is independent for purposes of the 1940 Act and The NASDAQ Global Select Market corporate governance regulations. The Board has determined that Ms. Usifer is an "audit committee financial expert" as defined under Item 407 of Regulation S-K of the Exchange Act. Ms. Usifer meets the current independence and experience requirements of Rule 10A-3 of the Exchange Act and, in addition, is not an "interested person" of the Company or of the Advisor as defined in Section 2(a)(19) of the 1940 Act.
12
Governance and Compensation Committee
The Board has a Governance and Compensation Committee. The Governance and Compensation Committee consists of Mses. Usifer and Moore and Messrs. Baron (Chair), Lies, Harris and Mayer, each of whom is independent for purposes of the 1940 Act and the NASDAQ corporate governance regulations. The Governance and Compensation Committee operates pursuant to a charter approved by the Board, which is available on the Company's website at http://www.blackrockbkcc.com. The Governance and Compensation Committee performs those functions enumerated in the Governance and Compensation Committee charter including, but not limited to, making nominations for the appointment or election of Independent Directors, reviewing Independent Director compensation, retirement policies and personnel training policies, administering the provisions of the code of ethics applicable to the Independent Directors and determining or recommending to the Board for determination, the compensation of any executive officers of the Company. Currently, the Company's executive officers do not receive any direct compensation from the Company.
With respect to nominations to the Board, the Governance and Compensation Committee may consider nominations for the office of director made by Company Stockholders as it deems appropriate. Stockholders who wish to recommend a nominee should send a recommendation to the Company's Secretary that includes all information relating to such person that is required to be disclosed in solicitations of proxies for the election of members to the Board or is required by the advance notice provision of the Company's bylaws. For a candidate to be considered by the Governance and Compensation Committee, a Stockholder must submit the recommendation in writing and must include:
•
|
the name and record address of the Stockholder, the class or series and number of shares of the Company which are owned beneficially or of record by the Stockholder, a description of all arrangements or understandings between the Stockholder and each proposed candidate and any other person or persons (including their names) in connection with which the nomination(s) made by the Stockholder, a representation that the Stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its recommendation and any other information relating to the Stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors/trustees pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and
|
•
|
the name, age, business address and residential address of the candidate(s), the principal occupation or employment of the candidate(s), the class or series and number of shares of the Company which are owned beneficially or of record by the candidate(s), if any, and any other information relating to the candidate(s) that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors/trustees pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder.
|
Such recommendation must be accompanied by a written consent of each proposed candidate to being named as a nominee and to serve as a director if elected. The Governance and Compensation Committee may take into consideration the number of shares of the Company's common stock held by the recommending Stockholder and the length of time that such shares have been held. The Governance and Compensation Committee seeks to identify individuals to serve on the Board who have a diverse range of viewpoints, qualifications, experiences, backgrounds and skill sets so that the Board will be better suited to fulfill its responsibility of overseeing the Company's activities. In so doing, the Governance and Compensation Committee reviews the size of the Board and the knowledge, experience, skills, expertise and diversity of the Directors in light of the issues facing the Company in determining whether one or more new directors should be added to the Board. The Governance and Compensation Committee believes that the Directors as a group possess the array of skills, experiences and backgrounds necessary to guide the Company. The Director biographies included herein highlight the diversity and breadth of skills, qualifications and expertise that the Directors bring to the Company.
Stockholder recommendations for nominees must set forth the information required by the Company's bylaws, which includes the information described above and must be delivered to or mailed and received at the Company's principal executive office not more than 120 days nor fewer than 90 days in advance of the anniversary date of the immediately preceding annual meeting of Stockholders; provided, however, that if the date of the annual meeting has changed by more than 30 days from the prior year, the nomination must be received not later than the close of business on the tenth
13
day following t
he day on which such notice of the date of the meeting was mailed or such public disclosure of the date of the meeting was made, whichever first occurs.
Code of Ethics
The Company has adopted codes of ethics and business conduct which apply to, among others, the Directors, as well as its officers, including its Chief Executive Officer and Chief Financial Officer. The Company's codes of ethics and business conduct can be accessed at the Company's website at http://www.blackrockbkcc.com. The Company intends to disclose any amendments to or waivers of required provisions of the applicable codes on the Company's website and as otherwise required by the rules promulgated by NASDAQ and the SEC.
WHAT QUALIFICATIONS ARE CONSIDERED OF DIRECTOR NOMINEES?
The charter of the Governance and Compensation Committee of the Board provides for evaluating potential director candidates against the knowledge, experience, skills, expertise and diversity that in the Company's view are necessary and desirable for such candidates. The knowledge, experience, skills, expertise and diversity of a director candidate are considered in their totality, and none of the criteria, in isolation, is controlling. The Company believes that the criteria set forth in the Governance and Compensation Committee charter allow for directors who have balanced and diverse experience, skills, attributes and qualifications, which in turn allows the Board to operate effectively in governing the Company and protecting the interests of its Stockholders. Each director's background and experience evince the ability to perform his or her duties as a director effectively. In particular, these experiences include the director's education or professional training; business, consulting, public service or academic positions; experience from service as a board member of the Company, other investment companies, public companies, or non-profit entities or other organizations; ongoing commitment and participation in Board and committee meetings, as well as leadership of standing committees throughout the years; or other relevant life experiences.
The table below discusses some of the experiences, qualifications and skills of each of our Directors and Director Nominees that support the conclusion that they should serve (or continue to serve) as such.
Director
|
Experiences, Qualifications and Skills
|
|
|
Mr. Keenan
|
Mr. Keenan’s experience serving in numerous executive and management positions, and his particular expertise in the investment process and performance, the partnerships with BlackRock’s distribution channels, and the team’s infrastructure, provides the Company with a wealth of practical, industry-specific knowledge and leadership. In particular, Mr. Keenan’s experience as Chief Investment Officer and Global Co-Head of Fundamental Credit and Chief Investment Officer of the Leveraged Finance team provides him with a deep understanding of the market for corporate debt and equity investments. In addition, Mr. Keenan’s positions as a member of the Advisor’s Global Operating Committee, the BlackRock Alternative Investment Executive Committee, and as a Managing Director of the Advisor provide the Board with a direct line of communication to, and direct knowledge of the operations of, the Advisor.
|
|
|
Mr. Baron
|
Mr. Baron's expertise in the private equity, banking and investment banking industries provides the Company with an abundance of practical business experience and knowledge. Mr. Baron has served in several senior level management positions, which benefits the Company from a management and leadership perspective. Mr. Baron's experience as a Director of Crystal Ridge Partners (a private equity firm) provides the Board and the Company with additional insight regarding current private equity trends. In addition, as a director of Big Rock Sports, Bronco Manufacturing and Rufus Aviation Fund, Mr. Baron has a deep understanding of the issues facing manufacturing companies and operating companies generally, which provides the Company with added insight into the operational issues facing its existing and potential portfolio companies. Mr. Baron's independence from us and the Advisor enhances his role as Chair of the Board's Governance and Compensation Committee and as a member of its Audit Committee.
|
|
|
14
Director
|
Experiences, Qualifications and Skills
|
|
|
Mr. Harris
|
Mr. Harris's time as President and Chief Executive Officer of VWR Scientific Products Corporation benefits the Company by providing it with additional business leadership and experience, while adding the benefit of Mr. Harris's practical knowledge of the chemicals industry and national and international product distribution. In addition, Mr. Harris's position as a trustee to the BlackRock closed-end fund boards allows him to bring to the Board and the Company the benefit of his experience as a director to other investment companies governed by the 1940 Act. Mr. Harris's previous service on the Board also provides him with a specific understanding of the Company, its operations, and the business and regulatory issues facing business development companies. Mr. Harris's independence from us and the Advisor fosters his role as a member of the Board's Governance and Compensation and Audit Committees. Mr. Harris was a director of the active exchange-listed funds comprising the BlackRock Closed-End Fund Complex from 2007 to 2017 and served as a director of Henry Troemner LLC from October 2000 to June 2016. In 2013, Mr. Harris became a director of Ducks Unlimited, Inc. (conservation) and Waterfowl Chesapeake (conservation). In 2015, Mr. Harris became a director of Ducks Unlimited Canada (conservation). In 2017, Mr. Harris became a director of Eastern Shore Land Conservancy. Mr. Harris previously served as a member of the Finance, Audit and Investment Committee of the board of directors of Delta Waterfowl Foundation, and as a member of the Finance and Investment Committee of the board of trustees of Ursinus College.
|
|
|
Mr. Lies
|
Mr. Lies' experience serving in numerous executive and management positions across a number of loan product divisions of globally recognized investment banks, and his particular expertise with respect to origination, underwriting, distribution, trading and portfolio management of global loan products will provide the Company with a wealth of industry-specific expertise and knowledge. In particular, Mr. Lies' role as Global Head of Loan Product and Co-Head of Leveraged Finance for Lehman Brothers Holdings, Inc. provides him with a deep understanding of the credit markets and credit investment strategy. In addition, his role on various firm-wide, business development and credit investment committees at Lehman Brothers, Bear Stearns and Bank of America allows him to bring to the Board and the Company the benefit of his experience as an advisor to some of the world's foremost credit investors.
|
|
|
Mr. Mayer
|
Mr. Mayer has served in numerous executive management positions, including Chief Executive Officer at The First Boston Corporation. In addition, Mr. Mayer spent four years as Dean of the College of Business and Management at the University of Maryland, and prior to that was Dean of the Simon Graduate School of Business at the University of Rochester. Mr. Mayer's experience in academia, when coupled with his practical business experience and knowledge, adds a dimension of balance to the Company's governance and provides it with a different kind of business perspective. In addition, Mr. Mayer's leadership and experience at Park Avenue serves to keep the Company abreast of the latest trends in private equity. Mr. Mayer's previous service on the Board also provides him with a specific understanding of the Company, its operations, and the business and regulatory issues facing business development companies. Mr. Mayer's independence from us and the Advisor enhances his service as Lead Independent Director and as a member of the Board's Governance and Compensation Committee as well as its Audit Committee. Mr. Mayer is currently a board member of Lee Enterprises (a newspaper company owning or having stakes in over 50 daily newspapers), Hambrecht Partners Holdings, LLC (a financial services firm that uses technology and auction processes to access financial markets) and Rosehill Inc. (an oil and gas company). Mr. Mayer is also a director of Premier, Inc. (a healthcare performance improvement alliance for hospitals).
|
|
|
Ms. Moore
|
Ms. Moore's many years of experience in the financial services industry and serving on the boards of a number of non-profit organizations provides the Company with a broad and diverse knowledge and unique perspective on public and private principal investing. In particular, Ms. Moore's role as the founder and Senior Managing Member of Watershed as well as her prior positions as Partner and Portfolio Manager of Farallon Capital Management, L.L.C. contribute to Ms. Moore's deep understanding of the financial services industry. Ms. Moore's independence from us and the Advisor enhances her role as a member of the Board's Governance and Compensation and Audit Committees. Ms. Moore received her B.A. from the University of Colorado and her J.D. from Yale Law School.
|
|
|
Ms. Usifer
|
Ms. Usifer's role as CFO of Seventh Generation Inc., a distributor of its brand of household and personal care products, provides invaluable guidance to the Company. Ms. Usifer has been a member of The Green Mountain Care Board ("GMCB") since May 2017. The 5 member board of the GMCB are appointed to terms by the Governor of Vermont and regulate health care spending in the State. The GMCB regulates the 14 hospital budgets accounting to approximately $2.5 billion in revenue, insurance rates and the certificate of needs process. From April 2009 until April 2012, Ms. Usifer served as Vice President of Investor Relations with Church & Dwight, a major producer of baking soda and consumer products. In addition, Ms. Usifer's past experience as senior finance director at Church & Dwight and Chief Financial Officer of Armkel, LLC greatly benefits the Company's oversight of its quarterly and annual financial reporting obligations. Moreover, Ms. Usifer's knowledge of financial and accounting matters qualify her as the Board's audit committee financial expert, and her in-depth knowledge of consumer goods benefits the Company's investment efforts in this industry. Ms. Usifer's previous service on the Board also provides her with a specific understanding of the Company, its operations, and the business and regulatory issues facing business development companies. Ms. Usifer's independence from us and the Advisor enhances her service as Chair of the Board's Audit Committee and as a member of its Governance and Compensation Committee.
|
15
IS THE CHAIR OF THE BOARD AN INTERESTED DIRECTOR?
Yes.
Our Directors have been divided into interested Directors and Independent Directors. Interested Directors are interested persons as defined in the 1940 Act. The Board’s Chair, James Keenan, is an interested Director because he is a Managing Director of BlackRock, Chief Investment Officer and Global Co-Head of Fundamental Credit as well as a member of BlackRock’s Global Operating Committee and the BlackRock Alternative Investment Executive Committee. In part because the Company is an externally-managed investment company, the Board believes having an interested chair that is familiar with the Company’s portfolio companies, its day-to-day management and the operations of its Advisor enhances, among other things, the Board’s understanding of the Company’s investment portfolio, business, finances and risk management efforts. In addition, the Board believes that Mr. Keenan’s employment with an affiliate of the Advisor better allows for the efficient mobilization of the Advisor’s resources at the Board’s behest and on its behalf.
IS THERE A LEAD INDEPENDENT DIRECTOR?
On March 7, 2017, the Board of Directors approved the appointment of William E. Mayer to the newly created role of Lead Independent Director. Mr. Mayer has been a Director of the Company since 2005. The Board of Directors believes that the addition of this position will allow each director to enjoy more effective, accurate and efficient communication with the Company, the Advisor and management, and will facilitate the timely transmission of information among such parties.
WHAT IS THE BOARD'S ROLE WITH RESPECT TO OVERSIGHT OF THE COMPANY'S RISKS?
As is the case with most business development companies and investment companies, the Company's investment adviser has responsibility for the day-to-day management of the Company, which includes responsibility for risk management. Examples of prominent risks include investment risk, regulatory and compliance risks, operational risks, accounting risks, valuation risks, service provider risks and legal risks. As part of its oversight role, the Board, acting at its scheduled meetings, or the Board's Chair, acting between Board meetings, interacts with and receives reports from senior personnel of service providers, including the Advisor's portfolio management personnel. The Board receives periodic presentations and reports from senior personnel of the Advisor regarding risk management generally, as well as periodic presentations regarding specific operational, compliance or investment areas such as accounting, administration, anti-money laundering, business continuity, personal trading, valuation, and investment research. The Board also receives reports from counsel to the Company and the Board's own independent legal counsel regarding regulatory compliance and governance matters. The Board's Audit Committee receives periodic communications from the Company's independent registered public accounting firm. The Board interacts with and receives reports from the Company's Chief Compliance Officer in connection with each scheduled meeting and, at least on an annual basis, the Company's Independent Directors meet separately from the Advisor and the Company's management, with the Company's Chief Compliance Officer and independent legal counsel on regulatory compliance matters. The Board's oversight role does not make the Board a guarantor of the Company's investments or activities. While there are a number of risk management functions performed by the Advisor and the other service providers, as applicable, it is not possible to eliminate all of the risks applicable to the Company.
HOW CAN THE COMPANY'S STOCKHOLDERS SEND COMMUNICATIONS TO THE DIRECTORS?
Stockholders and other interested parties may communicate with the Board or any member of the Board by mail addressed to the Board or the Director(s) with whom they wish to communicate by either name or title. All such correspondence should be sent c/o Secretary of the Company at 40 East 52nd Street, New York, New York 10022.
HOW OFTEN DO THE DIRECTORS MEET?
In 2018, the number of meetings held for the full Board totaled five and the number of meetings held for the Audit Committee totaled four. The Governance and Compensation Committee met twice in 2018. During the Company's last full fiscal year, each Director attended at least 75% of the aggregate of (i) all regular meetings of the Board of the Company and (ii) all meetings of all committees of the Board of the Company on which the Director served. The Company requires each Director to make a diligent effort to attend all Board and committee meetings, and encourages,
16
but does not require, Directors to attend the annual meet
ing of Stockholders. At the 2018
Annual Meeting,
one
of the Directors attended in person.
WHAT ARE THE COMPANY'S DIRECTORS AND OFFICERS PAID FOR THEIR SERVICES?
NASDAQ rules require listed companies, such as the Company, to approve the compensation of the chief executive officer. The Company has not paid, and does not intend to pay, compensation to our executive officers for their service as executive officers of the Company. Our executive officers are employees of, and are compensated by, the Advisor and/or the Company's administrator. The Independent Directors have approved the investment management agreement between the Company and the Advisor and the administration agreement between the Company and its administrator, each as required under the 1940 Act.
The following table shows information regarding the compensation received by the Independent Directors and officers from the Company for the fiscal year ended December 31, 2018. No compensation is paid to directors who are "interested persons" as defined in the 1940 Act.
Name and Principal Position with the Company
|
|
Fees Earned From
or Paid in
Cash by the
Company
|
|
|
Pension or
Retirement
Benefits
Accrued
As Part of the
Company's
Expenses
(1)
|
|
All Other
Compensation
|
|
Total Compensation
From the Company
Received by
Directors
|
|
Independent Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
John R. Baron, Director
|
|
$
|
118,000
|
|
|
None
|
|
None
|
|
$
|
118,000
|
|
Jerrold B. Harris, Director
|
|
|
115,500
|
|
|
None
|
|
None
|
|
|
115,500
|
|
Mark S. Lies, Director
|
|
|
115,500
|
|
|
None
|
|
None
|
|
|
115,500
|
|
William E. Mayer, Director
|
|
|
138,000
|
|
|
None
|
|
None
|
|
|
138,000
|
|
Meridee A. Moore
(2
)
, Director
|
|
|
115,500
|
|
|
None
|
|
None
|
|
|
115,500
|
|
Maureen K. Usifer, Director
|
|
|
130,500
|
|
|
None
|
|
None
|
|
|
130,500
|
|
Interested Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
James E. Keenan
(3)
, Director and Interim
Chief Executive Officer
|
|
None
|
|
|
None
|
|
None
|
|
None
|
|
Non-Director Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Pungello
(4
)
,
Interim Chief Financial Officer and Treasurer
|
|
None
|
|
|
None
|
|
None
|
|
None
|
|
Charles C.S. Park
(5
)
,
Chief Compliance Officer
|
|
None
|
|
|
None
|
|
None
|
|
None
|
|
Michael J. Zugay
(6
)
,
Former Chief Executive Officer
|
|
None
|
|
|
None
|
|
None
|
|
None
|
|
(1)
|
We do not have a pension or retirement plan or deferred compensation plan, and Directors do not receive any pension or retirement benefits.
|
(2)
|
Ms. Moore was appointed to the Board on November 7, 2017.
|
(3)
|
Mr. Keenan was appointed as Interim Chief Executive Officer on April 30, 2018.
|
(4)
|
Mr. Pungello was appointed by the Board as Interim Chief Financial Officer on October 20, 2017. Mr. Pungello is currently an employee of, and compensated by, the Advisor.
|
(5)
|
Mr. Park is currently an employee of, and compensated by, an affiliate of the Advisor.
|
(6)
|
Mr. Zugay resigned as Chief Executive Officer of the Company on April 27, 2018.
|
As compensation for serving on our Board, each Independent Director received an annual fee of $100,000 in 2018 and the lead Independent Director received an additional annual fee of $22,500. Additionally, each Independent Director receives meeting attendance fees of $2,500 ($1,250 for telephonic attendance) per board meeting and $1,000 ($500 for telephonic attendance) per committee meeting attended plus reimbursement of reasonable out-of-pocket expenses
17
incurred in connection with such attendance. In addition, the chair of the audit committee receives an annual fee of $15,000 and the chair of any other committee receives an annual fee of $2,500 for
their additional services in these capacities.
In addition, we purchase directors’ and officers’ liability insurance on behalf of our Directors and officers.
HOW LARGE A STAKE DO THE DIRECTORS HAVE IN THE COMPANY?
The following table sets forth the dollar range of our common stock beneficially owned by each of our Directors and Director nominees as of March 18, 2019. We are not part of a "family of investment companies" as that term is defined in the 1940 Act.
Name of Director and Director Nominees
|
|
Dollar Range
of Equity
Securities in
the Company
(1)(2)
|
Independent Directors
|
|
|
John R. Baron
|
|
Over $100,000
|
Jerrold B. Harris
|
|
Over $100,000
|
Mark S. Lies
|
|
Over $100,000
|
William E. Mayer
|
|
None
|
Meridee A. Moore
|
|
Over $100,000
|
Maureen K. Usifer
|
|
Over $100,000
|
Interested Directors and Executive Officers
|
|
|
James E. Keenan
|
|
Over $100,000
|
(1)
|
Dollar ranges are as follows: None; $1—$10,000; $10,001—$50,000; $50,001—$100,000; or over $100,000.
|
(2)
|
The dollar range of equity securities beneficially owned is based on the closing price of $6.06 per share of our common stock on March 18, 2019 on NASDAQ.
|
WHAT VOTE IS REQUIRED TO APPROVE THIS PROPOSAL?
The election of each of Mr. Lies, Ms. Usifer and Mr. Keenan requires the affirmative vote of a plurality of the shares voted. For purposes of the vote on this proposal, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote, although they will be considered present for the purpose of determining the presence of a quorum.
HOW DO THE DIRECTORS RECOMMEND I VOTE ON THIS PROPOSAL?
THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS, RECOMMENDS THAT YOU VOTE "FOR" EACH NOMINEE.
* * * * *
SECOND PROPOSAL
: TO RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP TO SERVE AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2019.
Deloitte & Touche LLP ("D&T") has been selected as the independent registered public accounting firm to audit the financial statements of the Company as of and for the Company's fiscal year ending December 31, 2019. D&T was selected by the Audit Committee of the Company and that selection was ratified by the Company's Board, including all of the Independent Directors, by a vote cast in person. The Company does not know of any direct or indirect financial interest of D&T in the Company. A representative of D&T will attend the Annual Meeting, will have the opportunity to make a statement if he or she desires to do so and will be available to answer questions.
18
Fees Incurred by the Company for Deloitte & Touche LLP
Aggregate fees incurred by the Company for the fiscal years ended December 31, 2018 and 2017 for the Company's principal accounting firm, D&T, the member firms of Deloitte Touche Tohmatsu Limited, and their respective affiliates, are set forth below.
|
|
2018
|
|
|
2017
|
|
Audit Fees
|
|
$
|
684,500
|
|
|
$
|
700,000
|
|
Audit-Related Fees
|
|
|
100,000
|
|
|
|
106,000
|
|
Tax Services Fees
|
|
115,000
|
|
|
|
91,000
|
|
All Other Fees
|
|
|
—
|
|
|
|
—
|
|
Total
|
|
$
|
899,500
|
|
|
$
|
897,000
|
|
Audit Fees
Audit fees consist of fees billed for professional services rendered for the audit of our year-end consolidated financial statements and reviews of the condensed consolidated financial statements filed with the SEC on Forms 10-K and 10-Q, as well as work generally only the independent registered public accounting firm can be reasonably expected to provide, such as comfort letters, consents and review of documents filed with the SEC, including certain 8-K filings. Audit fees also include fees for the audit opinion rendered regarding the effectiveness of internal control over financial reporting.
Audit-Related Fees
Audit-related services consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under "Audit Fees." These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards.
Tax Services Fees
Tax services fees consist of fees billed for professional services performed by the independent registered public accounting firm's tax personnel for tax compliance. These services include assistance regarding federal, state and local tax compliance except those services specifically related to the audit and review of financial statements.
All Other Fees
Other fees would include fees paid to the independent registered public accounting firm for products and services other than the services reported above.
Audit Committee Policies and Procedures
The Audit Committee operates under a written charter adopted by the Board. Management is responsible for the Company's internal controls and the financial reporting process. D&T, as our independent registered public accounting firm ("Independent Auditors"), is responsible for performing an independent audit of our financial statements in accordance with standards of the Public Company Accounting Oversight Board (United States) and expressing an opinion on the conformity of those financial statements in accordance with accounting principles generally accepted in the United States. The Audit Committee's responsibility is to monitor and oversee these processes. The Audit Committee is also directly responsible for the appointment, compensation and oversight of our Independent Auditors.
The Audit Committee has established a pre-approval policy that describes the permitted audit, audit-related, tax and other services that may be provided by our Independent Auditors. The policy requires that the Audit Committee pre-approve the audit and non-audit services performed by the Independent Auditors in order to assure that the provision of such service does not impair the Independent Auditors' independence. The responsibility for pre-approval of audit and permitted non-audit services includes pre-approval of the fees for such services and the other terms of the engagement.
19
Periodically, the Audit Committee reviews and approves all audit, audit-related, tax and all other services that are performed by our Independent Auditors. Normally, pre-approval is provided at regularly scheduled meetin
gs of the Audit Committee. However, the Audit Committee may delegate pre-approval authority between meetings to one or more of its members. The member or members to whom such authority is delegated shall report any pre-approval decisions to the Audit Commi
ttee at its next scheduled meeting. The Audit Committee does not delegate its responsibilities to pre-approve services performed by the Independent Auditors to management.
All services described above under "Audit Fees," "Audit-Related Fees," "Tax Services Fees" and "All Other Fees" were pre-approved by the Audit Committee.
Notwithstanding anything to the contrary set forth in any of the Company's previous filings under the Securities Act of 1933 or the Exchange Act that might incorporate future filings, including this Proxy Statement, in whole or in part, the following Report of the Audit Committee shall not be deemed to be "soliciting material" or to be "filed" with the SEC, nor shall such information be incorporated by reference into any such filings under the Securities Act of 1933 or the Exchange Act.