Entry into a Material Definitive Agreement.
On December 20, 2018, following the consummation of the merger
of Corporate Capital Trust, Inc. (“CCT”) with and into FS KKR
Capital Corp. (the “Company”), the Company entered into a new
investment advisory agreement (the “Amended Advisory Agreement”)
with FS/KKR Advisor, LLC, the Company’s investment adviser (the
“Advisor”), which replaced the existing investment advisory
agreement, dated as of April 9, 2018 (the “Prior Advisory
Agreement”), by and between the Company and the Advisor.
The Amended Advisory Agreement is substantially identical to the
Prior Advisory Agreement, the material terms of which were
described in the Company’s current report on Form 8-K filed on April 9,
2018, except that the Prior Advisory Agreement was amended to:
exclude cash and cash equivalents from the gross assets on which
the annual base management fee is calculated;
revise the calculation of the cap on the subordinated incentive fee
on income to take into account the historic per share pre-incentive fee return of both the
Company and CCT, together with the historic per share incentive
fees paid by both the Company and CCT; and
revise the calculation of incentive fees on capital gains to
include historical net realized losses and unrealized depreciation
of both the Company and CCT.
The Amended Advisory Agreement will remain in effect initially for
two years, and thereafter will continue automatically for
successive annual periods, provided that such continuance is
specifically approved at least annually by (i) the vote of the
board of directors of the Company (the “Board”), or by the vote of
a majority of the outstanding voting securities of the Company and
(ii) the vote of a majority of the members of the Board who
are not parties to the Amended Advisory Agreement, or “interested
persons,” as defined in Section 2(a)(19) of the Investment
Company Act of 1940, as amended (the “1940 Act”), of any such
party. The Amended Advisory Agreement may be terminated at any
time, without the payment of any penalty, upon 60 days’
written notice (a) by the Company to the Advisor,
(i) upon the vote of a majority of the outstanding voting
securities of the Company (within the meaning of
Section 2(a)(42) of the 1940 Act), or (ii) by the vote of
the Board, or (b) by the Advisor to the Company. The Amended
Investment Advisory Agreement will automatically terminate in the
event of its “assignment” (as such term is defined for purposes of
Section 15(a)(4) of the 1940 Act).
The Amended Advisory Agreement was approved by the Board on
July 19, 2018 and by the Company’s stockholders at a meeting
held on December 3, 2018
The foregoing description of the Amended Advisory Agreement, as set
forth in this Item 1.01, is a summary only and is qualified in
its entirety by reference to the text of the Amended Advisory
Agreement, which is filed as Exhibit 10.1 hereto and is
incorporated herein by reference.
Termination of a Material Definitive
Upon the effectiveness of the Amended Advisory Agreement, the Prior
Advisory Agreement was terminated.
Financial Statements and Exhibits.