SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
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American Capital Senior Floating, Ltd.
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AMERICAN CAPITAL SENIOR FLOATING, LTD.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 20, 2015
DATE AND TIME: |
Wednesday, May 20, 2015, at 9:00 a.m., Eastern Time |
PLACE: |
The Companys offices at 2 Bethesda Metro Center, 12th Floor, Bethesda, Maryland 20814 |
ITEMS OF BUSINESS: |
1) | To elect the Board of Directors, with each director serving a one-year term and until his or her successor is duly elected and qualified; |
2) | To ratify the appointment of Ernst & Young LLP to serve as our independent public accountant for the year ending December 31, 2015; and |
3) | To transact such other business as may properly come before the meeting or any adjournments or postponements thereof. |
In addition, there will be a presentation on our business and stockholders will have an opportunity to ask questions. |
WHO CAN VOTE: |
You are entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements of the Annual Meeting if you were a common stockholder of record at the close of business on March 23, 2015. |
VOTING: |
Your vote is important and we urge you to vote. You may vote in person at the Annual Meeting, by telephone, through the internet or by mailing your completed proxy card (or voting instruction form, if you hold your shares through a broker, bank or other nominee). See Question 5 of Questions and Answers About the 2015 Annual Meeting and Voting in the accompanying proxy statement for additional information regarding voting. |
MEETING ADMISSION: |
If you wish to attend the Annual Meeting in person, we request that you register in advance with our Investor Relations department by following the instructions set forth in response to Question 14 of Questions and Answers About the 2015 Annual Meeting and Voting in the accompanying proxy statement. |
DATE OF DISTRIBUTION: |
This notice, the proxy statement, the accompanying proxy card and our annual report to stockholders, which includes our annual report on Form 10-K with audited financial statements for the year ended December 31, 2014, are first being sent to our common stockholders on or about April 8, 2015. |
BY ORDER OF THE BOARD OF DIRECTORS,
Samuel A. Flax
Executive Vice President, Chief Compliance Officer and Secretary
April 8, 2015
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 20, 2015
This proxy statement and our annual report to stockholders, which includes our annual report on Form 10-K for the fiscal year ended December 31, 2014, are available free of charge on the internet at www.ACSF.com/2015proxymaterials.
PROXY STATEMENT
This proxy statement contains information about the 2015 Annual Meeting of Stockholders (the Annual Meeting) of American Capital Senior Floating, Ltd., a Maryland corporation (ACSF, the Company, we and us).
AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement i
QUESTIONS AND ANSWERS ABOUT THE 2015 ANNUAL MEETING AND VOTING
AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement 1
QUESTIONS AND ANSWERS ABOUT THE 2015 ANNUAL MEETING AND VOTING
2 AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement
QUESTIONS AND ANSWERS ABOUT THE 2015 ANNUAL MEETING AND VOTING
AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement 3
BOARD AND GOVERNANCE MATTERS
Our Board of Directors is currently comprised of three independent directors and two affiliated directors, Malon Wilkus and Stan Lundine. The following table sets forth the current members of our Board of Directors and their committee membership, if any:
Name | Director Since | Audit
and Compliance(1) |
Compensation and Corporate Governance(2) | |||||
Malon Wilkus | 2013 | |||||||
Stan Lundine | 2014 | |||||||
Phyllis R. Caldwell* | 2014 | ü | Chair | |||||
Gil Crawford* | 2014 | ü | ü | |||||
Larry K. Harvey* | 2014 | Chair | ü |
* | Director is independent, as defined in Rule 5605(a)(2) of The NASDAQ Global Select Markets marketplace rules (the NASDAQ rules), and is not an Interested Person of ACSF, as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the 1940 Act). |
(1) | Each member of the Audit and Compliance Committee is independent, as defined in Rules 5605(a)(2) and 5605(c)(2) of the NASDAQ rules and Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the Exchange Act). The Board of Directors has determined that Mr. Harvey is an audit committee financial expert, as defined in Item 407 of Regulation S-K under the Securities Act of 1933, as amended (the Securities Act). |
(2) | Each member of the Compensation and Corporate Governance Committee is independent, as defined in Rules 5605(a)(2) and 5605(d)(2) of the NASDAQ rules. |
Mr. Wilkus has served as our Chair and Chief Executive Officer since our incorporation in February 2013. We believe that combining the positions of Chair and Chief Executive Officer is the best corporate governance leadership structure for us at this time because it permits clear accountability, effective decision-making and alignment on corporate strategy.
Although we believe that it is more effective for us to combine the positions of Chair and Chief Executive Officer, we recognize the importance of strong independent leadership on the Board. We believe that our Boards independent oversight continues to be substantial. Our Board of Directors has determined that all of the current directors, except Messrs. Wilkus and Lundine, are independent as defined in the NASDAQ rules. Similarly, only Messrs. Wilkus and Lundine are Interested Persons of ACSF under the 1940 Act.
It is our Boards policy as a matter of good corporate governance to have a majority of our directors who are not Interested Persons meet regularly without persons who are members of management or employee directors present to facilitate the Boards effective independent oversight of management. These directors periodically designate a director who is independent, as defined in the NASDAQ rules, to serve as the lead independent director and preside at these meetings. Presently, our disinterested directors meet during our Boards quarterly in-person meetings and may hold additional meetings at the request of the lead independent director or another disinterested director. The designation of a lead independent director is generally for a one-year term or until his or her successor is elected, and a lead independent director may be re-appointed at the end of a term. If the lead independent director is unavailable for a meeting, his or her immediate predecessor will serve as lead independent director for such meeting. Mr. Crawford is our current lead independent director.
Each of our Boards Audit and Compliance Committee and Compensation and Corporate Governance Committee is composed entirely of independent directors. These independent committees of our Board also have the authority under their respective charters to hire independent advisors and consultants, at our expense, to assist them in performing their duties.
4 AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement
BOARD AND GOVERNANCE MATTERS
Our Board of Directors has developed corporate governance practices to help it fulfill its responsibility to stockholders to oversee the work of management in the conduct of our business. The governance practices are memorialized in corporate governance guidelines to assure that the Board will have the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of management. These guidelines, in conjunction with our charter (our Charter), Amended and Restated Bylaws (our Bylaws) and committee charters of the Audit and Compliance Committee and the Compensation and Corporate Governance Committee, form the framework for our governance. All of these documents are available in the Investor Relations section of our web site at www.ACSF.com.
CORPORATE GOVERNANCE HIGHLIGHTS: | ||
¡ Annual election of directors
¡ Directors elected by majority, not plurality, voting
¡ Resignation policy for directors who do not receive a majority vote
¡ Three of five directors are independent
¡ Lead director is independent |
¡ Regular meetings of independent directors without members of management or affiliated directors
¡ At least 87% attendance for Board and 100% attendance for committee meetings in 2014
¡ Comprehensive Code of Ethics and Conduct and Corporate Governance Guidelines |
Committees of the Board of Directors
Our Board of Directors principal standing committees and their primary functions are described below.
Audit and Compliance Committee
This committee assists the Board of Directors in overseeing:
| our accounting and financial reporting processes; |
| the integrity and audits of our financial statements; |
| our compliance with legal and regulatory requirements; |
| the qualifications and independence of our independent registered public accounting firm; and |
| the performance of our independent registered public accounting firm and any internal auditors. |
In addition, the Audit and Compliance Committee reviews and provides a recommendation to the Board of Directors with regard to its approval of the valuations of our investments presented by management. In such review, the committee discusses the proposed valuations with our independent auditors and other relevant consultants. The Audit and Compliance Committee is also responsible for engaging an independent registered public accounting firm, reviewing with the independent registered public accounting firm the plans and results of the audit engagement, approving professional services provided by the independent registered public accounting firm and considering the range of audit and non-audit fees. The committees meetings include, whenever appropriate, executive sessions with each of our independent external auditors and our Managers internal auditors, without the presence of management.
Compensation and Corporate Governance Committee
This committees principal functions are to:
| evaluate the performance of and compensation paid by us, if any, to our executive officers; |
| evaluate the performance of our Manager; |
AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement 5
BOARD AND GOVERNANCE MATTERS
| review the compensation and fees payable to our Manager under the management agreement with our Manager (which is described under Board and Governance MattersCertain Transactions with Related Persons); |
| decide whether to renew or terminate the management agreement with our Manager; |
| evaluate the compensation and fees payable to the members of the Board of Directors; |
| administer any equity incentive plans that we may adopt, to the extent it is delegated authority by the Board of Directors; |
| review and assist with the development of our executive succession plans; and |
| produce a report on executive compensation required to be included in our proxy statement for our annual meetings. |
The Compensation and Corporate Governance Committee also serves as the Board of Directors standing nominating committee and as such performs the following functions:
| identifying, recruiting and recommending to the Board of Directors qualified candidates for election as directors and recommending a slate of nominees for election as directors by our common stockholders at the annual meeting of stockholders; |
| developing and recommending to the Board of Directors corporate governance guidelines, including the committees selection criteria for director nominees; |
| reviewing and making recommendations on matters involving the general operation of the Board of Directors and our corporate governance; |
| recommending to the Board of Directors nominees for each committee of the Board of Directors; and |
| annually facilitating the assessment of the Board of Directors performance as a whole and of the individual directors and reports thereon to the Board of Directors. |
Under our Bylaws and Maryland law, the Board of Directors is permitted to take actions at regular or special meetings and by written consent. The Board of Directors generally holds regular quarterly meetings and meets on other occasions as necessary. The Board of Directors held eight meetings during 2014, one of which was held to approve the compensation and terms of the management agreement with our Manager. As noted above, the independent directors also met separately in executive sessions to discuss various matters, including our performance and the performance of our Manager.
Each of the Audit and Compliance Committee and the Compensation and Corporate Governance Committee schedules regular meetings to coincide with the quarterly in-person meetings of the Board of Directors and also meets at the request of senior management or at such other times as it determines. Our Secretary, in consultation with the chair of the committee, sets agendas for the meetings. Each committee reports regularly to the Board of Directors on its activities at the next regularly scheduled Board meeting following their committee meetings and when appropriate. During 2014, the Audit and Compliance Committee held four meetings and the Compensation and Corporate Governance Committee held one meeting.
Each of our directors attended at least 87% of the meetings of the Board of Directors and 100% of the meetings of the committees on which he or she served. Although we do not have a policy on director attendance at the Annual Meeting, directors are encouraged to attend the Annual Meeting.
One of the roles of our Board of Directors is being responsible for the general oversight of the Company, including the performance of our executive officers, our Manager and the Companys risk management processes, to assure that the long-term interests of our stockholders are being served. In performing its risk oversight function, the Board, directly or through its standing committees, regularly reviews our material strategic, operational, financial, compensation and compliance risks with senior management. In particular, the Board receives updates at each regular meeting on the Companys strategic plan, which addresses, among other things, the risks and opportunities facing us, as well as our investment platforms.
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BOARD AND GOVERNANCE MATTERS
The Board of Directors also recognizes the importance of effective executive leadership to our success and is actively engaged in overseeing the operational risks related to succession planning. The Board of Directors routinely discusses staffing for critical roles, and potential replacements for key personnel are given exposure to the Board of Directors during meetings and other events. In addition, the Board of Directors is regularly updated on the Managers strategies for recruiting, developing and retaining outstanding personnel at the Manager and its affiliates, as applicable.
The Board has delegated certain risk management oversight responsibility to its committees as follows:
We were incorporated in Maryland on February 6, 2013 and commenced operations on October 15, 2013. We completed our initial public offering (IPO) on January 22, 2014. Mr. Wilkus was appointed to the Board of Directors on February 6, 2013, and Ms. Caldwell and Messrs. Crawford, Harvey and Lundine were appointed to the Board of Directors on January 13, 2014 in connection with our IPO.
Any member of our Board of Directors who is an employee of the Company, American Capital, Ltd. (American Capital) or any of its affiliates, including our Manager, does not receive compensation from us for his or her Board service.
AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement 7
BOARD AND GOVERNANCE MATTERS
During 2014, each such non-employee director was paid a retainer for service on the Board of Directors at an annual rate of $60,000, payable quarterly in advance. In addition, the Chair of our Audit and Compliance Committee was paid a retainer at an annual rate of $15,000, the Chair of our Compensation and Corporate Governance Committee was paid an annual retainer of $10,000, and our lead independent director was paid an annual retainer of $10,000, each payable quarterly in advance. During 2014, directors were reimbursed for travel expenses incurred in connection with such Board and committee meetings and Board-related functions.
The following table sets forth the compensation received by each non-employee director during 2014:
Name |
Fees Earned or Paid in Cash ($) |
Stock Awards ($) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings |
All Other Compensation ($) |
Total ($) |
|||||||||||||||||||||
Phyllis R. Caldwell | 70,000 | | | | | | 70,000 | |||||||||||||||||||||
Gil Crawford | 70,000 | | | | | | 70,000 | |||||||||||||||||||||
Larry K. Harvey | 75,000 | | | | | | 75,000 | |||||||||||||||||||||
Stan Lundine | 60,000 | | | | | | 60,000 |
Nominations for election to the Board of Directors may be made by the Compensation and Corporate Governance Committee of the Board of Directors, or by any common stockholder entitled to vote for the election of directors. Candidates recommended by common stockholders will be evaluated by the Compensation and Corporate Governance Committee under the same criteria that are applied to other candidates.
Although there is not a formal list of qualifications, in discharging its responsibilities to nominate candidates for election to the Board of Directors, the Compensation and Corporate Governance Committee endeavors to identify, recruit and nominate candidates based on the following eligibility and experience criteria: a candidates integrity and business ethics, strength of character, judgment, experience and independence, as well as factors relating to the composition of the Board of Directors, including its size and structure, the relative strengths and experience of current directors and principles of diversity, including diversity of experience, personal and professional backgrounds, race, gender and age. Although the committee does not have formal objective criteria for determining the amount of diversity needed on the Board of Directors, it is one of the factors the committee considers in its evaluation. In nominating candidates to fill vacancies created by the expiration of the term of a member of the Board of Directors, the committee determines whether the incumbent director is willing to stand for re-election. If so, the committee evaluates his or her performance in office to determine suitability for continued service, taking into consideration the value of continuity and familiarity with our business.
Our Bylaws require a candidate in an uncontested election for director to receive a majority of the votes cast in order to be elected as a director. Under this provision, each vote is specifically counted for or against the directors election, unless a common stockholder abstains from voting with respect to the matter. Thus, a director nominee is required to receive more votes for than against to be elected. Pursuant to Maryland law, a director shall remain in office until his or her successor is duly elected and qualifies, even if the director has not received a vote sufficient for re-election. Thus, a company could have a holdover director. However, pursuant to our Board-approved director resignation policy, an incumbent director must tender his or her resignation to the Board of Directors if the director is nominated but not re-elected. The policy also requires the Compensation and Corporate Governance Committee to make a recommendation to the full Board of Directors on whether to accept or reject the resignation, and the full Board of Directors to make that determination. The Board of Directors will publicly disclose its decision within 90 days after receipt of the tendered resignation.
8 AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement
BOARD AND GOVERNANCE MATTERS
Any director who tenders his or her resignation pursuant to this policy may not participate in the Compensation and Corporate Governance Committee recommendation or Board of Directors action regarding whether to accept the resignation offer. If each member of the Compensation and Corporate Governance Committee does not receive a vote sufficient for re-election, then the disinterested directors who did not fail to receive a sufficient vote shall appoint a committee amongst themselves to consider the resignation offers and recommend to the Board of Directors whether to accept them. If the only directors who did not fail to receive a sufficient vote for re-election constitute three or fewer directors, all directors (other than the director who tendered the resignation under review) may participate in the action regarding whether to accept the resignation offers.
Certain Transactions with Related Persons
Related Person Transaction Policies
We have procedures in place for the review, approval and monitoring of transactions involving us and certain persons related to us. As a BDC, the 1940 Act restricts us from participating in transactions with any persons affiliated with us, including our officers and directors, and any other person controlling or under common control with us (including American Capital), subject to certain exceptions.
Our Board of Directors has also adopted a policy regarding the approval of any related person transaction, which is any transaction or series of transactions in which we or any of our subsidiaries is or are to be a participant, the amount involved exceeds $120,000, and a related person (as defined under SEC rules) has a direct or indirect material interest. Under the policy, a related person would need to promptly disclose to our Secretary any related person transaction and all material facts about the transaction. Our Secretary would then assess and promptly communicate that information to the Compensation and Corporate Governance Committee of our Board of Directors. Based on its consideration of all of the relevant facts and circumstances, this committee will decide whether or not to approve such transaction and will generally approve only those transactions that do not create a conflict of interest. If we become aware of an existing related person transaction that has not been pre-approved under this policy, the transaction will be referred to this committee, which will evaluate all options available, including ratification, revision or termination of such transaction. Our policy requires any director who may be interested in a related person transaction to recuse himself or herself from any consideration of such related person transaction.
Our Code of Ethics, which was reviewed and approved by our Board of Directors and provided to all of our directors and officers, our Manager and the persons who provide services to us pursuant to the administrative services agreement, requires that all such persons avoid any situations or relationships that involve actual or potential conflicts of interest, or perceived conflicts of interest, between an individuals personal interests and the interests of ACSF. Pursuant to our Code of Ethics, each of these persons must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict, to their supervisor or our Secretary. If a conflict is determined to exist, the person must disengage from the conflict situation or terminate his provision of services to us. Our chief executive officer, chief financial officer, principal accounting officer, chief investment officer and certain other persons who may be designated by our Board of Directors or its Audit and Compliance Committee, whom we collectively refer to as our financial executives, must consult with our Secretary with respect to any proposed actions or arrangements that are not clearly consistent with our Code of Ethics. In the event that a financial executive wishes to engage in a proposed action or arrangement that is not consistent with our Code of Ethics, the financial executive must obtain a waiver of the relevant provisions of our Code of Ethics in advance from our Audit and Compliance Committee. We intend to post amendments to or waivers from the Code of Ethics (to the extent applicable to our financial executives) on our web site www.ACSF.com.
Related Person Transactions
We have entered into a management agreement with our Manager with an initial term through January 15, 2016. The management agreement will remain in effect from year to year thereafter if approved annually by our Board of Directors or by the affirmative vote of the holders of a majority of our outstanding voting securities, and, in either case, if also approved by a majority of our directors who are not Interested Persons, as defined under the 1940 Act. The management agreement automatically terminates in the event of its assignment, as defined in the 1940 Act, by our Manager. The management agreement may also be terminated at any time, without the payment of any penalty, upon 60 days written notice, by (i) holders of a majority of our outstanding voting securities, (ii) our Board of Directors or (iii) our Manager. As of the date of this proxy statement, no such termination notice has been given.
AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement 9
BOARD AND GOVERNANCE MATTERS
We pay our Manager a base management fee payable quarterly in arrears. The management fee is calculated at an annual rate of 0.8% of our total assets, excluding cash and cash equivalents and net unrealized appreciation or depreciation, each as determined under GAAP at the end of the most recently completed fiscal quarter. There is no incentive compensation paid to our Manager under the management agreement.
We have also agreed to reimburse our Manager and its affiliates for certain expenses related to operations incurred on our behalf, excluding employment-related expenses of our and our Managers officers and any employees of American Capital or its affiliates who provide services to us pursuant to the management agreement or to our Manager pursuant to the administrative services agreement described below. For the 24 months after the date of our IPO, our Manager has agreed to be responsible for certain of our operating expenses in excess of 0.75% of our consolidated net assets, less net unrealized appreciation or depreciation, each as determined under GAAP at the end of the most recently completed fiscal quarter. Operating expenses subject to this reimbursement include both (i) our operating expenses reimbursed to our Manager and its affiliates for the expenses related to our operations incurred on our behalf, and (ii) our operating expenses directly incurred by us excluding the management fee, interest costs, taxes, and accrued costs and fees related to actual, pending, or threatened litigation, each as determined under GAAP for the most recently completed fiscal quarter. As a result of this operating expense limit, any reimbursements to our Manager and its affiliates could be reduced or eliminated, and in certain instances, our Manager could be required to reimburse us so that our other expenses do not exceed the limit described above. Subsequent to the first full 24 months after the date of our IPO, there are no limits on the reimbursement to our Manager or its affiliates of such expenses related to our operations.
We rely on our Manager to administer our business activities and day-to-day operations, subject to the supervision and oversight of our Board of Directors. Because neither we nor our Manager have any employees or separate facilities, our Manager has entered into an administrative services agreement with American Capital and the parent company of our Manager, pursuant to which our Manager has access to their employees, infrastructure, business relationships, management expertise, information technologies and capital raising capabilities, legal and compliance functions and accounting, treasury and investor relations capabilities, which allow our Manager to fulfill all of its responsibilities under the management agreement. However, we are not a party to, or a third party beneficiary under the administrative services agreement. In addition, neither the administrative services agreement nor the management agreement requires our Manager, the parent company of our Manager or American Capital to dedicate specific personnel to our operations nor requires any specific personnel of the parent company of our Manager or American Capital to dedicate a specific amount of time to our business. All of our officers are also officers of our Manager, the parent company of our Manager and/or American Capital.
Our wholly-owned consolidated special purpose financing vehicle, ACSF Funding I, LLC, has entered into an investment advisory agreement with our Manager to manage its assets. No additional compensation is payable to our Manager under such agreement.
On October 15, 2013, we entered into a $200 million revolving credit facility (the ACAM Facility) provided by American Capital Asset Management, LLC, the indirect parent company of our Manager and our sole stockholder prior to our IPO. Under the ACAM Facility, we were able to draw up to $180 million under Loan A and up to $20 million under Loan B at any one time. Any amounts drawn on Loan A bore interest at a fixed rate of 4.75% per annum, and any amounts drawn on Loan B bore interest at a fixed rate of 7.25% per annum. Upon the closing of our IPO in January 2014, we repaid the ACAM Facility in full in the amount of $194.7 million, plus accrued interest in the amount of $1.5 million, and terminated the ACAM Facility.
We have not entered into any other transactions in which any other director or officer or stockholder of ours or our Manager has any material interest.
Compensation and Corporate Governance Committee Interlocks and Insider Participation
No member of the Compensation and Corporate Governance Committee during fiscal year 2014 served as an officer, former officer or employee of ours or had a relationship disclosable under Board and Governance MattersCertain Transactions with Related Persons. Further, during 2014, none of our executive officers served as:
| a member of the compensation committee (or equivalent) of any other entity, one of whose executive officers served as one of our directors or was an immediate family member of a director, or served on our Compensation and Corporate Governance Committee; or |
| a director of any other entity, one of whose executive officers or their immediate family member served on our Compensation and Corporate Governance Committee. |
10 AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS
Pursuant to our Charter and Bylaws, common stockholders elect each of the members of the Board of Directors annually. The term of each director will expire at the Annual Meeting. Each director has been nominated by the Compensation and Corporate Governance Committee of the Board of Directors, in accordance with our Bylaws, to stand for re-election at the Annual Meeting and to serve as a director until our annual meeting to be held in 2016 and until his or her successor is duly elected and qualified. It is expected that each of the nominees will be able to serve, but if any such nominee is unable to serve for any reason, the proxies reserve discretion to vote or refrain from voting for a substitute nominee or nominees. A common stockholder using the enclosed form of proxy can vote for or against any or all of the nominees or may abstain from voting for any or all of the nominees.
We believe that all of our directors, each of whom is a nominee for re-election, possess the personal and professional qualifications necessary to serve as a member of our Board of Directors. Our directors have been evaluated by the Compensation and Corporate Governance Committee pursuant to the guidelines described above under Board and Governance MattersBoard Membership Criteria and the determination was made that each of them fulfills and exceeds the qualities that we look for in members of our Board of Directors. Messrs. Wilkus and Lundine are affiliates of our Manager. Other than Messrs. Wilkus and Lundine, each of the nominees is independent as defined in the NASDAQ rules and is not an Interested Person, as defined in the 1940 Act.
The information set forth below is as of March 23, 2015, with respect to each of our directors, each a nominee for election at the Annual Meeting. The business address of each nominee is c/o American Capital Senior Floating, Ltd., 2 Bethesda Metro Center, 14th Floor, Bethesda, Maryland 20814. We have highlighted specific attributes for each Board member below.
Director Nominee Biographies and Qualifications
Malon Wilkus, 63 | ||||
Director Since: 2013
Board Committees: None |
Professional Experience: Mr. Wilkus has served as our Chair and Chief Executive Officer and as the Chief Executive Officer of our Manager since our incorporation in February 2013. Mr. Wilkus has also served as the Chief Executive Officer of American Capital CLO Management, LLC, the external manager of each of ACAS CLO 2007-1, Ltd., ACAS CLO 2012-1, Ltd., ACAS CLO 2013-1, Ltd., ACAS CLO 2013-2, Ltd., ACAS CLO 2014-1, Ltd. and ACAS CLO 2014-2, Ltd., which also invest in first lien and second lien floating rate loans principally to large-market U.S.-based companies (Senior Floating Rate Loans), since July 2013. In addition, Mr. Wilkus is Chief Executive Officer of ACSF Funding I, LLC, ACAS Funding I, LLC and ACAS Funding II, LLC, which invest in Senior Floating Rate Loans. Mr. Wilkus founded American Capital, Ltd. (NASDAQ:ACAS), the indirect owner of our Manager, in 1986 and has served as its Chief Executive Officer and Chairman of the Board of Directors since that time, except for the period from 1997 to 1998 during which he served as Chief Executive Officer and Vice Chairman of the Board of Directors. He also served as President of American Capital from 2001 to 2008 and from 1986 to 1999. Mr. Wilkus has been the Chairman of European Capital Limited, a European private equity and mezzanine fund, since its formation in 2005. In addition, Mr. Wilkus is the Chief Executive Officer and President of American Capital Asset Management, LLC, the asset fund management portfolio company of American Capital and the owner of the parent company of our Manager. He has also served on the board of directors of over a dozen middle-market companies in various industries. Mr. Wilkus is also the Chair and Chief Executive Officer of each of American Capital Agency Corp. (NASDAQ: AGNC) and American Capital Mortgage Investment Corp. (NASDAQ: MTGE). | |||
Director Qualifications: Mr. Wilkus extensive board and senior executive experience investing in and managing private and public investment vehicles, and his financial expertise and deep knowledge of our business as our Chief Executive Officer strengthen our Boards collective qualifications, skills, experience and viewpoints. |
AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement 11
PROPOSAL 1: ELECTION OF DIRECTORS
Stan Lundine, 76 | ||||
Professional Experience: Mr. Lundine is a former U.S. Congressman and retired attorney and hospital executive. From 1995 to 2008, he served as Of Counsel to the law firm of Sotir and Goldman and as Executive Director of the Chautauqua County Health Network, a consortium of four hospitals. He was also President of the Chautauqua Integrated Delivery System, Inc., a for-profit physician/hospital organization. From 1987 to 1994, Mr. Lundine served as Lieutenant Governor of New York and chairman of several boards and councils. From 1976 until 1987, Mr. Lundine was a Member of Congress serving on the Banking Committee and the Committee on Science and Technology. From 1970 until his election to Congress, Mr. Lundine was Mayor of Jamestown, NY and an executive or board member of various governmental entities and institutions. Mr. Lundine currently serves on the board of directors of American Capital, Ltd. (NASDAQ: ACAS) and has served on the boards of numerous other private and non-profit companies. |
Director Since: 2014
Board Committees: None | |||
Director Qualifications: Mr. Lundines extensive legal, board and government service and his experience with corporate governance and executive compensation matters strengthen our Boards collective qualifications, skills, experience and viewpoints. |
Phyllis R. Caldwell, 55 | ||||
Professional Experience: Ms. Caldwell is a finance and economic development advisor and former commercial bank executive. Ms. Caldwell was also a senior official at the U.S. Department of the Treasury, responsible for oversight of the U.S. housing market stabilization, economic recovery and foreclosure prevention initiatives established through the Troubled Asset Relief Program, from 2009 to 2011. From 2007 to 2009, Ms. Caldwell was the President of the Washington Area Womens Foundation. Ms. Caldwell retired from Bank of America in 2007, after working for twenty years in various leadership positions in real estate and affordable housing finance. During her tenure at Bank of America, Ms. Caldwell also managed the banks investments in community banks, loan funds and small business venture funds. Ms. Caldwell also serves on the board of directors of Ocwen Financial Corporation (NYSE: OCN) and has served on the boards of numerous non-profit organizations engaged in housing and community development finance. |
Director Since: 2014
Board Committees: Audit and Compliance | |||
Director Qualifications: Ms. Caldwells extensive experience in banking and finance strengthen our Boards collective qualifications, skills, experience and viewpoints. |
12 AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS
Gil Crawford, 57 | ||||
Director Since: 2014
Board Committees: Audit and
Compliance |
Professional Experience: Mr. Crawford has over 25 years experience working with microfinance institutions across the globe on various capital markets transactions. Since forming MicroVest Capital Management, LLC in 2003, Mr. Crawford has served as its Chief Executive Officer, responsible for leading MicroVests investment operations and strategy. From 2000 to 2002, Mr. Crawford was a Senior Investment Officer in the Latin American Financial Markets Division of the International Finance Corporation, where he focused on making investments in microfinance institutions in the region. From 1991 to 2000, Mr. Crawford was the founder and Executive Director of Seed Capital Development Fund, Ltd., a U.S. based non-profit firm involved in capitalizing microfinance institutions primarily in Latin America, Asia and Africa. Mr. Crawford has also served on the boards of various microfinance institutions and non-profits. | |||
Director Qualifications: Mr. Crawfords extensive finance and capital markets experience strengthen our Boards collective qualifications, skills, experience and viewpoints. |
Larry K. Harvey, 50 | ||||
Director Since: 2014
Board Committees: Audit and Compliance |
Professional Experience: Mr. Harvey served as Executive Vice President and Chief Financial Officer of Host Hotels & Resorts, Inc. (NYSE: HST) (Host) from 2007 to 2013 and served as its Treasurer from 2007 to 2010. From 2006 to 2007, Mr. Harvey served as Senior Vice President, Chief Accounting Officer of Host and from 2003 to 2006, he served as Hosts Senior Vice President and Corporate Controller. Prior to rejoining Host in 2003, he served as Chief Financial Officer of Barceló Crestline Corporation, formerly Crestline Capital Corporation. Prior to that, Mr. Harvey was Hosts Vice President of Corporate Accounting, before the spin-off of Crestline in 1998. Mr. Harvey also serves on the board of directors of American Capital Agency Corp. (NASDAQ: AGNC) and American Capital Mortgage Investment Corp. (NASDAQ: MTGE). Our Board of Directors has determined that Mr. Harvey is an audit committee financial expert (as defined in Item 407 of Regulation S-K under the Securities Act). | |||
Director Qualifications: Mr. Harveys public company accounting, finance and risk management expertise, including his extensive experience as a senior executive responsible for the preparation of financial statements, strengthens our Boards collective qualifications, skills, experience and viewpoints. |
Conclusion and Recommendation; Vote Required
The election of directors nominated in Proposal 1 requires the affirmative vote of a majority of all of the votes cast by holders of our common stock at the Annual Meeting. The affirmative vote of a majority of the votes cast means that the number of votes cast for a director nominee must exceed the votes cast against that nominee. In the context of the election of five directors at the Annual Meeting, it will mean that each of the five candidates will be required to receive more votes for than against to be elected. Abstentions and broker non-votes will have no effect on the outcome of the proposal. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL THE NOMINEES NAMED ABOVE.
AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement 13
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANT
Ernst & Young LLP has served as our independent public accountant since our IPO and, at a meeting on March 6, 2015, the Audit and Compliance Committee approved the appointment of Ernst & Young LLP to audit our financial statements for 2015. This appointment is subject to ratification or rejection by our common stockholders. A representative of Ernst & Young LLP is expected to be present at the Annual Meeting. The representative will have an opportunity to make a statement if he or she so desires and is expected to be available to respond to appropriate questions.
Independent Public Accountants Fees
Ernst & Young LLP performed various audit and other services for us during 2014 and for the period from our formation in February 2013 to December 31, 2013. Fees for professional services provided by Ernst & Young LLP in 2014 and the period from our formation to December 31, 2013 in each of the following categories are:
2014 | Date of Formation to December 31, 2013 |
|||||||
Audit Fees | $ | 160,000 | $ | 65,000 | ||||
Audit-Related Fees | | | ||||||
Tax Compliance and Consulting Fees | | | ||||||
All Other Fees | | | ||||||
Total Fees | $ | 160,000 | $ | 65,000 |
Audit Fees relate to fees and expenses billed by Ernst & Young LLP for the annual audit, including the audit of our financial statements, review of our quarterly financial statements and for comfort letters and consents related to stock issuances.
All services rendered by Ernst & Young LLP were permissible under applicable laws and regulations, and were pre-approved by the Audit and Compliance Committee for 2014 in accordance with its pre-approval policy. The Audit and Compliance Committee has established a policy regarding the pre-approval of all audit and permissible non-audit services provided by our independent public accountant. The policy requires the Audit and Compliance Committee to approve each audit or non-audit engagement or accounting project involving the independent public accountant, and the related fees, prior to commencement of the engagement or project to make certain that the provision of such services does not impair the firms independence. The committee may delegate its pre-approval authority to one or more of its members, and such member(s) are required to report any pre-approval decisions to the Audit and Compliance Committee at its next meeting. The Audit and Compliance Committee has delegated authority to its Chair to pre-approve the engagement and related fees of the independent public accountant for any additional audit or permissible non-audit services. In addition, pursuant to the policy, pre-approval is not required for additional non-audit services if such services result in a de minimus amount of less than 5% of the total annual fees paid by us to the independent public accountant during the fiscal year in which the non-audit services are provided, were not recognized by us at the time of engagement to be non-audit services and are reported to the Audit and Compliance Committee promptly thereafter and approved prior to the completion of the annual audit.
Conclusion and Recommendation; Vote Required
The affirmative vote of a majority of all of the votes cast by holders of our common stock at the Annual Meeting is required to ratify the appointment of our independent public accountant. Abstentions will have no effect on the outcome of the proposal. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT PUBLIC ACCOUNTANT FOR 2015.
14 AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement
REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE
The Board of Directors has appointed an Audit and Compliance Committee presently composed of three directors, Ms. Caldwell and Messrs. Crawford and Harvey. Each of the directors is independent as defined in the NASDAQ rules. The Board of Directors has determined that Mr. Harvey is an audit committee financial expert (as defined in Item 407 of Regulation S-K under the Securities Act).
The Audit and Compliance Committees responsibility is one of oversight as set forth in its charter, which is available in the Investor Relations section of our web site at www.ACSF.com. It is not the duty of the Audit and Compliance Committee to prepare our financial statements, to plan or conduct audits or to determine that our financial statements are complete and accurate and are in accordance with U.S. generally accepted accounting principles. Our management is responsible for preparing our financial statements and for maintaining internal controls. The independent auditors are responsible for auditing the financial statements and for expressing an opinion as to whether those audited financial statements fairly present our financial position, results of operations, changes in net assets and cash flows in conformity with U.S. generally accepted accounting principles.
The Audit and Compliance Committee has reviewed and discussed our audited consolidated financial statements with management and with Ernst & Young LLP, our independent auditors for 2014.
The Audit and Compliance Committee has discussed with Ernst & Young LLP the matters required to be discussed by Auditing Standard No. 16 (which superseded Auditing Standard No. 61, as amended), as adopted by the Public Company Accounting Oversight Board.
The Audit and Compliance Committee has received from Ernst & Young LLP the written statements required by Public Company Accounting Oversight Board Rule No. 3526, Communications with Audit Committees Concerning Independence, and has discussed Ernst & Young LLPs independence with Ernst & Young LLP, and has considered the compatibility of non-audit services with the auditors independence.
Based on the review and discussions referred to above, the Audit and Compliance Committee recommended to the Board of Directors that the audited consolidated financial statements for the year ended December 31, 2014 be included in our Annual Report on Form 10-K for the year ended December 31, 2014, for filing with the Securities and Exchange Commission.
The Audit and Compliance Committee has approved the appointment of Ernst & Young LLP to serve as our independent public accountants for the year ending December 31, 2015 and has directed that the appointment of Ernst & Young LLP be submitted to our stockholders for ratification.
By the Audit and Compliance Committee:
Larry K. Harvey, Chair
Phyllis R. Caldwell
Gil Crawford
Use of Report of the Audit and Compliance Committee
In accordance with and to the extent permitted by applicable law or regulation, the information contained in the foregoing Report of the Audit and Compliance Committee is not soliciting material and is not to be incorporated by reference into any future filing under the Securities Act or the Exchange Act.
AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement 15
EXECUTIVE OFFICERS
The Board of Directors generally elects officers annually following our annual meeting of stockholders to serve until the meeting of the Board following the next annual meeting. Set forth below is certain information about each executive officer as of March 23, 2015. The business address for Messrs. Wilkus, Erickson and Flax is c/o American Capital Senior Floating, Ltd., 2 Bethesda Metro Center, 14th Floor, Bethesda, MD 20814, and the address for Messrs. Pelletier, Cerullo and Dratch is c/o American Capital Senior Floating, Ltd., 505 Fifth Avenue, 26th Floor, New York, NY 10017.
MALON WILKUS, 63
Chair and Chief Executive Officer
Mr. Wilkus has served as our Chair and Chief Executive Officer since our incorporation in February 2013 and as Chief Executive Officer of our Manager since February 2013. Further information about Mr. Wilkus may be found under Proposal 1: Election of DirectorsDirector Nominee Biographies and Qualifications in this proxy statement.
MARK PELLETIER, 50
President and Chief Investment Officer
Mr. Pelletier has served as our President and Chief Investment Officer and President of our Manager since July 2013, and he previously served as a Senior Vice President of our Manager from February 2013 until July 2013. Mr. Pelletier has primary oversight for all of our investments and has over 25 years of investment experience. Mr. Pelletier is also the President of American Capital CLO Management, LLC, the external manager of each of ACAS CLO 2007-1, Ltd., ACAS CLO 2012-1, Ltd., ACAS CLO 2013-1, Ltd., ACAS CLO 2013-2, Ltd., ACAS CLO 2014-1, Ltd. and ACAS CLO 2014-2, Ltd., which also invest in Senior Floating Rate Loans. In addition, Mr. Pelletier is President of ACSF Funding I, LLC, ACAS Funding I, LLC and ACAS Funding II, LLC, which invest in Senior Floating Rate Loans. Mr. Pelletier served as a Senior Vice President and Managing Director of American Capital from 2005 through 2013. Prior to joining American Capital, Mr. Pelletier served as a senior portfolio manager and analyst for Flagship Capital Management, Inc. where he covered the commercial, industrial and technology sectors. Flagship Capital was part of the asset management arm of Bank of America, and focused on managing approximately $3 billion in Senior Floating Rate Loans across seven CLO portfolios. Mr. Pelletier was a founding member of Flagship Capital, which commenced operations during 2000.
JOHN R. ERICKSON, 55
Executive Vice President, Chief Financial Officer and Assistant Secretary
Mr. Erickson has served as our Executive Vice President, Chief Financial Officer and Assistant Secretary and as Executive Vice President and Treasurer of our Manager since February 2013. Mr. Erickson is also the Executive Vice President and Treasurer of American Capital CLO Management, LLC, the external manager of each of ACAS CLO 2007-1, Ltd., ACAS CLO 2012-1, Ltd., ACAS CLO 2013-1, Ltd., ACAS CLO 2013-2, Ltd., ACAS CLO 2014-1, Ltd. and ACAS CLO 2014-2, Ltd., which also invest in Senior Floating Rate Loans. In addition, Mr. Erickson is Executive Vice President and Treasurer of ACSF Funding I, LLC, ACAS Funding I, LLC and ACAS Funding II, LLC, which invest in Senior Floating Rate Loans. Mr. Erickson is Executive Vice President and Treasurer of American Capital Asset Management, LLC, the asset fund management portfolio company of American Capital. Mr. Erickson has also served as President, Structured Finance of American Capital since 2008 and as its Chief Financial Officer since 1998. Mr. Erickson is also a member of the board of directors, Executive Vice President and Chief Financial Officer of each of American Capital Agency Corp. (NASDAQ: AGNC) and American Capital Mortgage Investment Corp. (NASDAQ: MTGE).
SAMUEL A. FLAX, 58
Executive Vice President, Chief Compliance Officer and Secretary
Mr. Flax has served as our Executive Vice President and Secretary since February 2013 and as our Chief Compliance Officer since July 2013. He has also served as Executive Vice President, Chief Compliance Officer and Secretary of our Manager
16 AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement
EXECUTIVE OFFICERS
since February 2013. Mr. Flax is the Executive Vice President, Chief Compliance Officer and Secretary of American Capital CLO Management, LLC, the external manager of each of ACAS CLO 2007-1, Ltd., ACAS CLO 2012-1, Ltd., ACAS CLO 2013-1, Ltd., ACAS CLO 2013-2, Ltd., ACAS CLO 2014-1, Ltd. and ACAS CLO 2014-2, Ltd., which also invest in Senior Floating Rate Loans. In addition, Mr. Flax is Executive Vice President and Secretary of ACSF Funding I, LLC, ACAS Funding I, LLC and ACAS Funding II, LLC, which invest in Senior Floating Rate Loans. Mr. Flax is Executive Vice President and Secretary of American Capital Asset Management, LLC, the asset fund management portfolio company of American Capital. Mr. Flax has also served as the Executive Vice President, General Counsel, Chief Compliance Officer and Secretary of American Capital since January 2005. Mr. Flax was a partner in the corporate and securities practice group of the Washington, D.C. law firm of Arnold & Porter LLP from 1990 to January 2005. At Arnold & Porter LLP, he represented American Capital in raising debt and equity capital, advised American Capital on corporate, securities and other legal matters and represented American Capital in many of its investment transactions. Mr. Flax is also a member of the board of directors, Executive Vice President and Secretary of each of American Capital Agency Corp. (NASDAQ: AGNC) and American Capital Mortgage Investment Corp. (NASDAQ: MTGE).
MICHAEL CERULLO, 48
Senior Vice President, Portfolio Manager and Head of Research
Mr. Cerullo has served as our Senior Vice President, Portfolio Manager and Head of Research and Senior Vice President of our Manager since July 2013. Mr. Cerullo has over 25 years of investment experience. Mr. Cerullo is also a Senior Vice President of American Capital CLO Management, LLC, the external manager of each of ACAS CLO 2007-1, Ltd., ACAS CLO 2012-1, Ltd., ACAS CLO 2013-1, Ltd., ACAS CLO 2013-2, Ltd., ACAS CLO 2014-1, Ltd. and ACAS CLO 2014-2, Ltd., which also invest in Senior Floating Rate Loans. In addition, Mr. Cerullo is Senior Vice President of ACSF Funding I, LLC, ACAS Funding I, LLC and ACAS Funding II, LLC, which invest in Senior Floating Rate Loans. Mr. Cerullo joined American Capital in December 2005 as a Vice President in the Leveraged Finance Group, became Vice President and Principal in July 2007 and served as Senior Vice President and Managing Director during 2013. Prior to joining American Capital, he was Senior Vice President and Credit Products Officer in Bank of Americas Commercial Bank, serving midsized commercial and industrial companies based in New Jersey. His prior experience also includes over nine years lending to companies in the media and entertainment industries, three years lending to middle market companies located in the upstate New York market, and two years in commercial loan workouts, all with predecessor institutions of Bank of America.
DANA DRATCH, 44
Senior Vice President, Portfolio Manager and Head of Trading
Mr. Dratch has served as our Senior Vice President, Portfolio Manager and Head of Trading since January 2014 and previously served as a Vice President from November 2013 until January 2014. Mr. Dratch has served as a Senior Vice President of our Manager since January 2014 and previously served as a Vice President of our Manager from July 2013 until January 2014. Mr. Dratch has 18 years of investment experience. Mr. Dratch is also a Senior Vice President of American Capital CLO Management, LLC, the external manager of each of ACAS CLO 2007-1, Ltd., ACAS CLO 2012-1, Ltd., ACAS CLO 2013-1, Ltd., ACAS CLO 2013-2, Ltd., ACAS CLO 2014-1, Ltd. and ACAS CLO 2014-2, Ltd., which also invest in Senior Floating Rate Loans. In addition, Mr. Dratch is Senior Vice President of ACSF Funding I, LLC, ACAS Funding I, LLC and ACAS Funding II, LLC, which invest in Senior Floating Rate Loans. Mr. Dratch joined American Capital in November 2005 as a Vice President in the Leveraged Finance Group and served as Vice President and Principal during 2013. Prior to joining American Capital, Mr. Dratch was employed at Merrill Lynch Capital (which was subsequently acquired by General Electric) underwriting leveraged transactions that were primarily sourced through the firms brokerage force. Prior to joining Merrill Lynch, he was employed at RBC Capital Markets Corporate Credit group covering a portfolio of large-cap borrowers. Prior to joining RBC, Mr. Dratch underwrote and monitored leveraged transactions in the Media and Healthcare divisions of FleetBoston Financial (which was subsequently acquired by Bank of America).
We did not pay any compensation to our executive officers, nor did we make any grants of plan-based awards of any kind to them, during 2014, and we have no plans to do so for 2015. None of our executive officers received any options or stock directly from us prior to December 31, 2014, and we have no plans to do so for 2015. We do not provide any of our executive
AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement 17
EXECUTIVE OFFICERS
officers with pension benefits or nonqualified deferred compensation plans. We do not have any employment agreements with any persons and are not obligated to make any payments to any of our executive officers upon termination of employment or a change in control of us.
Compensation Discussion and Analysis
We have not paid, and we do not intend to pay, any cash or equity compensation to any of our executive officers and we do not currently intend to adopt any policies with respect thereto. We have engaged American Capital ACSF Management, LLC as our Manager pursuant to the terms of a management agreement, dated January 15, 2014. See Board and Governance MattersCertain Transactions with Related Persons for a description of the terms of the management agreement, including the management fees payable to our Manager thereunder and our reimbursement obligations to our Manager. Under our management agreement, our Manager has agreed to provide us with a management team, including a chief executive officer, chief financial officer and chief investment officer or similar positions.
Report of the Compensation and Corporate Governance Committee
Our Compensation and Corporate Governance Committee reviewed and discussed with our management the Compensation Discussion and Analysis contained in this proxy statement. Based on that review and discussions, our Compensation and Corporate Governance Committee recommends to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
By the Compensation and Corporate Governance Committee:
Phyllis R. Caldwell, Chair
Gil Crawford
Larry K. Harvey
18 AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement
OWNERSHIP OF COMPANY EQUITY SECURITIES
Security Ownership of Management and Certain Beneficial Owners
On March 23, 2015, there were 10,000,100 shares of our common stock outstanding. The following table sets forth, as of March 23, 2015 (unless otherwise indicated), the beneficial ownership of each current director, each nominee for director, each of our executive officers, our executive officers and directors as a group and each stockholder known to management to own beneficially more than 5% of the outstanding shares of our common stock. Unless otherwise indicated, we believe that the beneficial owners set forth in the table below have sole voting and investment power.
Name and Address of Beneficial Owner(1) | Number of Shares Beneficially Owned |
Percentage of Common Stock Beneficially Owned |
Dollar Range of Equity Securities Beneficially Owned | |||||||
Beneficial owners of more than 5%: | ||||||||||
Morgan Stanley(3)
Morgan Stanley Smith Barney LLC 1585 Broadway New York, NY 10036 |
570,576 | 5.7 | % | N/A | ||||||
Executive officers and directors: | ||||||||||
Malon Wilkus |
21,500 | * | Over $100,000 | |||||||
Mark Pelletier |
33,000 | * | N/A | |||||||
John R. Erickson |
10,750 | * | N/A | |||||||
Samuel A. Flax |
2,000 | * | N/A | |||||||
Michael Cerullo |
6,750 | * | N/A | |||||||
Dana Dratch |
5,000 | * | N/A | |||||||
Phyllis R. Caldwell |
3,750 | * | $50,001-$100,000 | |||||||
Gil Crawford |
5,000 | * | $50,001-$100,000 | |||||||
Larry K. Harvey |
6,723 | * | $50,001-$100,000 | |||||||
Stan Lundine |
| | None | |||||||
All executive officers and directors as a group (10 persons) | 94,473 | * | N/A |
* | Less than one percent. |
(1) | The address of each of the executive officers and directors listed above is c/o American Capital Senior Floating, Ltd., 2 Bethesda Metro Center, 14th Floor, Bethesda, MD 20814, except for Messrs. Pelletier, Cerullo and Dratch whose address is c/o American Capital Senior Floating, Ltd., 505 Fifth Avenue, 26th Floor, New York, NY 10017. |
(2) | The dollar range of our equity securities beneficially owned is calculated by multiplying the closing price of our common stock as reported on The NASDAQ Global Select Market as of March 23, 2015, times the number of shares beneficially owned, in accordance with Rule 16a-1(a)(2) of the Exchange Act. |
(3) | This information is based on a Schedule 13G filed with the SEC on February 17, 2015 by Morgan Stanley (Morgan Stanley), as a parent holding company or control person, and Morgan Stanley Smith Barney LLC (MS Smith Barney), as a broker or dealer. Morgan Stanley is the beneficial owner of 570,576 shares and has the shared power to dispose of or direct the disposition of 565,076 of such shares, sole power to vote or direct the vote of 543,658 of such shares, and shared power to vote or direct the vote of 5,500 of such shares. MS Smith Barney is the beneficial owner of 561,703 shares and has the shared power to dispose of or direct the disposition of 556,203 of such shares, sole power to vote or direct the vote of 534,785 of such shares, and shared power to vote or direct the vote of 5,500 of such shares. |
AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement 19
OWNERSHIP OF COMPANY EQUITY SECURITIES
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act and the disclosure requirements of Item 405 of SEC Regulation S-K require that our directors and executive officers, and any persons holding more than 10% of our common stock report their ownership of such equity securities and any subsequent changes in that ownership to the SEC, The NASDAQ Global Select Market and to us. Based on a review of the written statements and copies of such reports furnished to us by our executive officers, directors and greater than 10% beneficial owners, we believe that during fiscal year 2014 all Section 16(a) filing requirements applicable to our executive officers, directors and beneficial owners of 10% or more of our common stock were timely satisfied, except for a Form 4 filed on November 20, 2014 reflecting the purchase of 500 shares of common stock by Mr. Crawford on November 7, 2014.
20 AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement
QUESTIONS AND ANSWERS ABOUT STOCKHOLDER COMMUNICATIONS AND PROPOSALS
AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement 21
OTHER MATTERS
The Board of Directors does not intend to bring other matters before the Annual Meeting except items incidental to the conduct of the meeting. However, on all other matters properly brought before the meeting, or any adjournments or postponements thereof, by the Board of Directors or others, the persons named as proxies in the accompanying proxy card, or their substitutes, will vote in accordance with their discretion.
22 AMERICAN CAPITAL SENIOR FLOATING, LTD. Proxy Statement
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Electronic Voting Instructions
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time, on May 20, 2015. | ||||||
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Vote by Internet
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Or scan the QR code with your smartphone
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q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
A | Proposals The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposal 2. | |||||||||||||||||||||||||||
1. | Election of Directors: | For | Against | Abstain | For | Against | Abstain | For | Against | Abstain | + | |||||||||||||||||
01 - Phyllis R. Caldwell | ¨ | ¨ | ¨ | 02 - Gill Crawford | ¨ | ¨ | ¨ | 03 - Larry K. Harvey | ¨ | ¨ | ¨ | |||||||||||||||||
04 - Stan Lundine | ¨ | ¨ | ¨ | 05 - Malon Wilkus | ¨ | ¨ | ¨ |
For | Against | Abstain | ||||||||||||||||
2. Ratification of appointment of Ernst & Young LLP as our independent public accountant for the year ending December 31, 2015. |
¨ | ¨ | ¨ | |||||||||||||||
The proxies are authorized to vote in their discretion on any other matter that may properly come before said meeting or any adjournments or postponements thereof. |
B | Non-Voting Items | |||||
Change of Address Please print new address below. | Comments Please print your comments below. | |||||
C | Authorized Signatures This section must be completed for your vote to be counted PLEASE SIGN | |
HERE AND RETURN PROMPLTY. | ||
Please sign exactly as your name appears on your stock certificate. If registered in the names of two or more persons, each person should sign. Executors, administrators, trustees, guardians, attorneys, and corporate officers should show their full titles. |
Date (mm/dd/yyyy) Please print date below. | Signature 1 Please keep signature within the box. | Signature 2 Please keep signature within the box. | ||||||||
/ / |
021AZD
q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM
PORTION IN THE ENCLOSED ENVELOPE. q
Proxy American Capital Senior Floating, Ltd.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
2015 ANNUAL MEETING OF STOCKHOLDERS OF AMERICAN CAPITAL
SENIOR FLOATING, LTD. TO BE HELD ON MAY 20, 2015.
The undersigned hereby appoints Justin Cressall and Christina Houghton and each of them, as proxies, with full power of substitution, to vote all shares of common stock of the undersigned as shown below on this proxy at the Annual Meeting of Stockholders to be held at the companys offices at 2 Bethesda Metro Center, 12th Floor, Bethesda, Maryland 20814, on Wednesday, May 20, 2015, at 9:00 a.m. Eastern Time, and any adjournments or postponements thereof.
This proxy is revocable and your shares of common stock will be voted in accordance with your instructions. If no choice is specified, this proxy will be voted FOR the election of all nominees for Director and FOR the other proposal listed on the reverse side.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE