UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant | ☒ |
Filed by a Party other than the Registrant | ☐ |
Check the appropriate box:
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to Rule |
Oxford Square Capital Corp.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☒ | No fee required. |
☐ |
Fee paid previously with preliminary materials. |
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act |
September 3, 2015July 14, 2023
Dear Stockholder:
You are cordially invited to attend the Special2023 Annual Meeting (the “Annual Meeting”) of Stockholders (the “Special Meeting”) of TICCOxford Square Capital Corp. (the “Company”“Company,” “OXSQ,” “we,” “us” or “our”) to be held on October 27, 2015August 25, 2023 at 10:9:00 a.m., Eastern Time, atin the officessecond floor conference room of Sutherland Asbill & Brennan LLPthe Company’s corporate headquarters located at 1114 Avenue8 Sound Shore Drive, Greenwich, Connecticut 06830. Stockholders of the Americas, 40th Floor, New York, New York 10036.
The members of TICC Management, LLC (the “Adviser”), the investment adviser to the Company, have entered into a purchase agreement with an affiliate of Benefit Street Partners L.L.C. (“BSP”), pursuant to which BSP will acquire control of the Adviser (the “Transaction”). The Transaction would result in a change in control of the Adviser, and as a result, an assignment and subsequent termination of the current investment advisory agreement, dated July 1, 2011, between the Company and the Adviser (the “Existing Advisory Agreement”) in accordance with the Investment Company Act of 1940, as amended (the “1940 Act”).
The stockholdersrecord of the Company at the close of business on June 30, 2023 are being askedentitled to approve a new investment advisory agreement between the Companynotice of, and the Adviser (the “New Advisory Agreement”). As described in the accompanying Proxy Statement, all material terms of the Existing Advisory Agreement and the New Advisory Agreement will remain unchanged except for a decrease in the base management fee payable under the New Advisory Agreement. The 1940 Act requires that a new investment advisory agreement be approved by both a majority of an investment company’s “non-interested” directors and “a majority of the outstanding voting securities,” as such terms are defined under the 1940 Act.The Company’s Board of Directors, including a majority of non-interested directors, has approved the New Advisory Agreement and believes it to be in the best interests of the Company and its stockholders. If approved by the required majority of the Company’s stockholders, the New Advisory Agreement will become effective upon the closing of the Transaction, which is expected to occur as soon as practicable following the Special Meeting. This proposal is explained more fully in the attached Proxy Statement.
In addition, the Company’s stockholders are being asked to vote on the election of the six director nominees named in the accompanying Proxy Statement. At the closing of the Transaction, the Company’s two current interested directors, Jonathan H. Cohen and Charles M. Royce, would resign from the Board of Directors and would be replaced by two interested directors affiliated with BSP if they are elected at, the Special Meeting. As a result, upon the closingAnnual Meeting or any adjournment or postponement thereof. Details of the Transaction, the Company’s Board of Directors would consist of seven non-interested directors and two interested directors. Therefore, the Company would satisfy the 75% non-interested director requirement under Section 15(f) of the 1940 Act upon the closing of the Transaction. For additional information regarding whether the parties to the Transaction will satisfy the other requirements of Section 15(f) of the 1940 Act, please see the attached Proxy Statement. In addition, upon the consummation of the Transaction, the executive officers of the Company and the investment committee of the Adviser will resign and will be replaced with certain individuals affiliated with BSP.
Following the completion of the Transaction, the Company’s name will change to Benefit Street Capital Corp. and the Company will continue to be a business development company, however, you will still own the same amount and type of shares in the same Company. The shares of common stock of the Company will continue to be listed on the NASDAQ Global Select Market, although the ticker symbol will change upon the change in the name of the Company to Benefit Street Capital Corp. Further details regarding the business to be conducted at the SpecialAnnual Meeting are more fully describedprovided in the accompanying Notice of SpecialAnnual Meeting and 2023 Proxy Statement.
It is very important that your shares be represented at the SpecialAnnual Meeting. Whether or not you plan to attend, we hope you will vote as soon as possible. If you are unable to attendparticipate at the SpecialAnnual Meeting, in person, Iwe urge you to complete, datefollow the instructions on the Notice of Internet Availability of Proxy Materials to vote your proxy on the Internet. We encourage you to vote via the Internet, as it saves us significant time and signprocessing costs. However, on the enclosedNotice of Internet Availability of Proxy Materials, you will also find instructions on how to request a hard copy of the proxy statement and proxy card free of charge and promptly return it inyou may vote your proxy by returning your proxy card to us after you request the envelope provided,hard copy materials. Returning the proxy or voting by Internet or telephone does not deprive you of your right to attend the Annual Meeting and to vote your shares in person.
We reserve the right to reconsider the date, time, and/or means of convening the Annual Meeting, including holding the Annual Meeting by telephone,means of remote communications. If we take this step, we will announce the decision to do so in advance, and details on how to participate in the meeting will be issued by press release and filed with the Securities and Exchange Commission as additional proxy material. We urge you to retain your control or proxy voting number after you vote viain case changes are made to the Internet.meeting format and such information is again required.
We look forward to seeing you at the Annual Meeting. Your vote is important.and participation, no matter how many or how few shares you own, are very important to us.
Sincerely yours, | ||
Jonathan H. Cohen | ||
Chief Executive Officer |
OXFORD SQUARE CAPITAL CORP.
8 Sound Shore Drive, Suite 255
Greenwich, Connecticut 06830
(203) 983-5275
NOTICE OF 2023 ANNUAL MEETING OF STOCKHOLDERS
To be held in the Availability second floor conference room
of Proxy Materialsthe Company’s corporate headquarters, located at
8 Sound Shore Drive,
Greenwich, Connecticut 06830
August 25, 2023, at 9:00 a.m., Eastern Time
To the Stockholders of Oxford Square Capital Corp.:
The 2023 Annual Meeting (the “Annual Meeting”) of Stockholders of Oxford Square Capital Corp. (the “Company,” “OXSQ,” “we,” “us” or “our”) will be held in the second floor conference room of the Company’s corporate headquarters located at 8 Sound Shore Drive, Greenwich, Connecticut 06830, on August 25, 2023, at 9:00 a.m., Eastern Time, for the Special Meeting of Stockholders to Be Held on October 27, 2015.following purposes:
Our proxy statement relating to the Special Meeting is available1. To vote on the Internet atwww.edocumentview.com/TICC.election of two directors of the Company to each serve for a term of three years, or until his respective successor is duly elected and qualified;
2. To vote on a proposal to ratify the selection of PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm for the Company for the fiscal year ending December 31, 2023; and
3. To transact such other business as may properly come before the Annual Meeting and any adjournments or postponements.
OXSQ’S BOARD OF DIRECTORS, INCLUDING ALL THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT YOU VOTE:
• “FOR” THE COMPANY’S DIRECTOR NOMINEES DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT, AND
• “FOR” THE PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER31, 2023.
Information about the nominees of the Board of Directors for election as directors of the Company is provided in the accompanying proxy statement.
The following information applicable to the SpecialAnnual Meeting may be found in the proxy statement and accompanying proxy card:
• The date, time and location of the meeting;
• A list of the matters intended to be acted on and our recommendations regarding those matters;
• Any control/identification numbers that you need to access your proxy card; and
• Information about attending the meeting and voting in person.
To the Stockholders of TICC Capital Corp.:
The Special Meeting of Stockholders (the “Special Meeting”) of TICC Capital Corp. (the “Company”) will be held at the offices of Sutherland Asbill & Brennan LLP located at 1114 Avenue of the Americas, 40th Floor, New York, New York 10036 on October 27, 2015, at 10:00 a.m., Eastern Time, for the following purposes:
As discussed in more detail in the enclosed Proxy Statement, the members of TICC Management, LLC (the “Adviser”), the investment adviser to the Company, have entered into a purchase agreement with an affiliate of Benefit Street Partners L.L.C. (“BSP”), pursuant to which BSP will acquire control of the Adviser (the “Transaction”). The Transaction will result in a change in control of the Adviser, and as a result, an assignment and subsequent termination of the current investment advisory agreement, dated July 1, 2011, between the Company and the Adviser (the “Existing Advisory Agreement”) in accordance with the Investment Company Act of 1940, as amended (the “1940 Act”). The stockholders of the Company are being asked to approve a new investment advisory agreement between the Company and the Adviser (the “New Advisory Agreement”) and to elect six director nominees named in the Proxy Statement.
In full, the Special Meeting of Stockholders is being held for the following purposes:
THE BOARD OF DIRECTORS, INCLUDING THE NON-INTERESTED DIRECTORS, UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” PROPOSALS 1 AND 3 AND “FOR” EACH OF THE DIRECTOR NOMINEES DESCRIBED IN PROPOSAL 2.
Each proposal is discussed in greater detail in the enclosed Proxy Statement. You have the right to receive notice of and to vote at the SpecialAnnual Meeting if you were a stockholder of record at the close of business on August 31, 2015. June 30, 2023. We are furnishing the proxy statement and proxy card to our stockholders on the Internet, available at https://www.proxy-direct.com/oxf-33362, rather than mailing printed copies of those materials
to each stockholder. If you received a Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy statement and proxy card unless you request them. Instead, the Notice of Internet Availability of Proxy Materials will instruct you as to how you may access and review the proxy statement, and vote your proxy, on the Internet. You may request hard copy proxy materials at no charge to you by following the instructions provided in the Notice of Internet Availability of Proxy Materials.
Whether or not you expect to be present in person at the meeting, please signAnnual Meeting, and whatever the enclosed proxy and return it promptlynumber of shares you own, you are requested to vote in accordance with the voting instructions in the self-addressed envelope provided,Notice of Internet Availability of Proxy Materials, or submit your vote by calling toll freerequesting hard copy proxy materials from us and returning a proxy card so that you may be represented at the telephone number indicated onAnnual Meeting. Please note, however, that if you wish to vote in person at the enclosedmeeting and your shares are held of record by a broker, bank, trustee, or nominee, you must obtain a “legal” proxy card, or submitissued in your vote through the Internet website of our proxy tabulator atwww.envisionreports.com/TICC, as indicated on the proxy card. Instructions are shown on the proxy card.name from that record holder. In the event there are not sufficient votes for a quorum or to approve or ratify any of the foregoing proposals at the time of the SpecialAnnual Meeting, the SpecialAnnual Meeting may be adjourned in order to permit further solicitation of proxies by the Company.
By OrderWe reserve the right to reconsider the date, time, and/or means of convening the BoardAnnual Meeting, including holding the Annual Meeting by means of Directors,Saul B. RosenthalPresidentremote communications. If we take this step, we will announce the decision to do so in advance, and details on how to participate in the meeting will be issued by press release and filed with the Securities and Exchange Commission as additional proxy material. We urge you to retain your control or proxy voting number after you vote in case changes are made to the meeting format and such information is again required.
We are not aware of any other business, or any other nominees for election as directors, that may properly be brought before the Annual Meeting. Thank you for your continued support of Oxford Square Capital Corp.
By Order of the Board of Directors, | ||
Steven P. Novak | ||
Chairman |
Greenwich, ConnecticutSeptember 3, 2015July 14, 2023
This is ana very important meeting. To ensure proper representation at the meeting,Annual Meeting, please follow the instructions on the Notice of Internet Availability of Proxy Materials to vote your proxy via the Internet or request, complete, sign, date and return thea proxy card in the enclosed, self-addressed envelope, vote your shares by telephone, or vote via the Internet.card. Even if you vote your shares prior to the SpecialAnnual Meeting, if you are a record holder of shares, or a beneficial holder who obtains “legal” proxy from your broker, bank, trustee, or nominee, you still may attend the meetingAnnual Meeting and vote your shares in person.
If you have any questions about the special meeting or the New Advisory Agreement after reading the accompanying proxy statement, please contact our proxy solicitor, Okapi Partners LLC:
Okapi Partners LLC437 Madison Avenue, 28th FloorNew York, New York
Banks and Brokerage Firms, Please Call: (212) 297-0720Stockholders and All Others Call Toll-Free: (877) 566-1922
Email: info@okapipartners.com
|
|
|
18 |
18 | ||
Corporate Governance Committee
19 |
20 |
20 |
20 | ||
Q20: May I revoke my proxy?Executive Officers
21 | ||
Directors | 21 |
22 | ||||||
22 | ||||||
22 | ||||||
23 | ||||||
25 | ||||||
25 | ||||||
25 | ||||||
25 | ||||||
25 | ||||||
27 |
i
Okapi Partners LLC437 Madison Avenue, 28th FloorNew York, New York
Banks and Brokerage Firms, Please Call: (212) 297-0720Stockholders and All Others Call Toll-Free: (877) 566-1922
Email: info@okapipartners.com
PROXY STATEMENTSpecial2023 Annual Meeting of Stockholders
This Proxy Statementproxy statement (the “Proxy Statement”) is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board of Directors” or the “Board”) of TICCOxford Square Capital Corp. (the “Company,” “TICC,“OXSQ,” “we,” “us” or “our”) for use at the Company’s Special2023 Annual Meeting of Stockholders (the “Special“Annual Meeting”) to be held on October 27, 2015,August 25, 2023, at 10:9:00 a.m., Eastern Time, atin the officessecond floor conference room of Sutherland Asbill & Brennan LLPthe Company’s corporate headquarters located at 1114 Avenue of the Americas, 40th Floor, New York, New York 10036,8 Sound Shore Drive, Greenwich, Connecticut 06830, and at any postponements or adjournments thereof. This Proxy Statement, the Notice of 2023 Annual Meeting of Stockholders and the accompanying proxy cardAnnual Report of the Company for the year ended December 31, 2022 are firstbeing provided to the stockholders of OXSQ via the Internet at https://www.proxy-direct.com/oxf-33362 on or about July 14, 2023. In addition, a Notice of Internet Availability of Proxy Materials is being sent to stockholders of record of OXSQ on or about September 3, 2015. This Proxy Statement is also available on the proxy tabulator’s website atwww.edocumentview.com/TICC.July 14, 2023.
We encourage you to vote your shares, either by voting in person at the SpecialAnnual Meeting or by granting a proxy(i.e.,authorizing someone to vote your shares). If you properly sign and date the accompanying proxy card, or otherwise provide voting instructions, either via the Internet, by telephone or by telephone,mail, and the Company receives itthem in time for the SpecialAnnual Meeting, the persons named as proxies will vote theyour shares registered directly in your name in the manner that you specified.
We will hold the Annual Meeting in the second floor conference room of the Company’s corporate headquarters located at 8 Sound Shore Drive, Greenwich, Connecticut 06830, on August 25, 2023 at 9:00 a.m., Eastern Time.
We reserve the right to reconsider the date, time, and/or means of convening the Annual Meeting, including holding the Annual Meeting by means of remote communications. If we take this step, we will announce the decision to do so in advance, and details on how to participate in the meeting will be issued by press release and filed with the Securities and Exchange Commission (“SEC”) as additional proxy material. We urge you to retain your control or proxy voting number after you vote in case changes are made to the meeting format and such information is again required.
You are entitled to attend the Annual Meeting only if you were a stockholder of OXSQ as of the close of business on the record date for the Annual Meeting, which is June 30, 2023 (the “Record Date”), or you hold a valid proxy for the Annual Meeting. You must present valid photo identification, such as a driver’s license or passport, for admittance. If you give no instructions onare not a stockholder of record of the proxy card,Company but hold shares as a beneficial owner in street name, in order to attend the Annual Meeting you must also provide proof of beneficial ownership, such as your most recent account statement prior to the Record Date, a copy of the voting instruction form provided by your broker, bank, trustee, or nominee, or other similar evidence of ownership of shares covered byof the proxy cardCompany.
Since seating is limited, admission to the Annual Meeting will be voted FORon a first-come, first-served basis. If you do not comply with the electionprocedures outlined above, you will not be admitted to the Annual Meeting. For security reasons, you and your bags will be subject to search prior to your admittance to the Annual Meeting.
1
Table of the nominees as directorsContents
Availability of Proxy and FORAnnual Meeting Materials
This Proxy Statement, the other matters listed in the accompanying Notice of Special2023 Annual Meeting of Stockholders and the accompanying Annual Report of the Company for the fiscal year ended December 31, 2022 are available at https://www.proxy-direct.com/oxf-33362.
If your shares are registered in the name of a bank or brokerage firm, you may be eligible to vote your shares electronically via the Internet or by telephone through our proxy tabulator, Computershare Investor Services (“Computershare”), who coordinates proxy delivery and voting for these banks and brokerage firms. If your shares are registered in the name of a bank or brokerage firm, you will receive a copy of this Proxy Statement, either by paper or electronically, from Computershare and will have the opportunity to vote via the Internet or by telephone through Computershare.
At the SpecialAnnual Meeting, you will be asked to vote on the following proposals:
Proposal 1 — | To |
Proposal 2 — | To ratify the selection of PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm for the |
To transact such other business as may properly come before the Annual Meeting and any adjournments or postponements.
OXSQ’S BOARD OF DIRECTORS, INCLUDING ALL THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT YOU VOTE:
• “FOR” OXSQ’s DIRECTOR NOMINEES DESCRIBED IN THIS PROXY STATEMENT (PROPOSAL 1), AND
• “FOR” THE PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR OXSQ FOR THE FISCAL YEAR ENDING DECEMBER 31, 2023 (PROPOSAL 2).
Record Date and Voting Securities
You may vote your shares of the Company’s common stock, in person or by proxy, at the SpecialAnnual Meeting only if you were a stockholder of record at the close of business on August 31, 2015 (the “Record Date”).the Record Date. All shares of the Company’s common stock have equal voting rights and are the only class of voting securities outstanding. On the Record Date, there were 59,987,98656,395,751 shares of the Company’s common stock outstanding. Each share of common stock is entitled to one vote.
A quorum must be present at the SpecialAnnual Meeting for any business to be conducted. The presence at the SpecialAnnual Meeting, in person or by proxy, of the holders of a majority of the shares of common stock outstanding on the Record Date, or 28,197,876 shares of the Company’s common stock, will constitute a quorum. Abstentions will be treated as shares present for quorum purposes. Since banks, brokerage firms or other nomineesShares for which brokers have not received voting instructions from the beneficial owner of the shares and do not have discretiondiscretionary authority to vote on non-routine matters such as Proposals 1, 2 and 3, if you do not provide voting instructions to your bank, brokerage firm or other nominee, your shares will not be voteda proposal at the SpecialAnnual Meeting (which are considered “Broker Non-Votes” with respect to such proposal) will be treated as shares present for quorum purposes. However, abstentions and willBroker Non-Votes are not be counted as present for purposes of meeting the quorum requirement. As of the Record Date, there were 59,987,986 shares of the Company’s common stock outstanding and entitled to vote thereon. Thus, 29,993,994 shares must be represented by stockholders present at the Special Meeting or by proxy to have quorum
votes cast. If a quorum is not present, at the Special Meeting, the stockholders who are represented at the SpecialAnnual Meeting may adjournbe adjourned pursuant to the Special Meetingprovisions of the Company’s bylaws until a quorum is present. The persons named as proxies will vote those proxies for such adjournment, unless marked to be voted against any proposal for which an adjournment is sought, to permit the further solicitation of proxies.
Voting Your Shares
If you are the record holder of your shares, you may vote by submitting your proxy by telephone, over the Internet, by mail, or in person at the Annual Meeting.
• You may vote your shares by telephone or over the Internet by following the instructions set forth on the Notice of Internet Availability of Proxy Materials. We encourage you to vote via the Internet, as it saves us significant time and processing costs.
2
• If you request hard copies of the Proxy Statement and proxy card, you may vote by mail by completing, dating and signing the proxy card and promptly mailing it in the enclosed postage-paid envelope. You do not need to put a stamp on the enclosed envelope if you mail it in the United States. The shares you own will be voted according to the instructions on the proxy card you mail. If you return the proxy card, but do not give any instructions on a particular matter described in this Proxy Statement, the shares you own will be voted in accordance with the recommendations of our Board of Directors. Our Board of Directors recommends that you vote FOR the director nominees and FOR the ratification of the selection of PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm for the Company for the fiscal year ending December 31, 2023.
• If you attend the Annual Meeting and are a registered stockholder, you may vote by completing a ballot available at the Annual Meeting, or, if you requested a hard copy of the proxy card, by delivering your completed proxy card in person at the Annual Meeting.
Submitting Voting Instructions for Shares Held Through a Broker, Bank, Brokerage FirmTrustee, or Other Nominee
If you hold your shares of the Company’s common stock through a broker, bank, brokerage firmtrustee, or other nominee (“Broker Securities”), you must follow the voting instructions you receive from your broker, bank, brokerage firmtrustee, or other nominee. If you hold shares through a bank, brokerage firm or other nomineeBroker Securities and you want to vote in person at the SpecialAnnual Meeting, you must obtain a legal proxy from the record holder of your shares and present it at the SpecialAnnual Meeting.Please instruct your broker, bank, trustee, or nominee so your vote can be counted.
Pursuant to New York Stock Exchange (the “NYSE”) Rule 452 and the corresponding Listed Company Manual Section 402.08, discretionary voting by banks or brokers of Broker Securities is generally prohibited, subject to the exceptions as discussed in this paragraph. If you do not vote in person at the Special Meeting or submit votinggive instructions to your bank brokerage firm or other nominee, your sharesbroker within ten days of the Annual Meeting, the bank or broker may vote Broker Securities with respect to matters that the NYSE determines to be “routine,” but will not be votedpermitted to vote your Broker Securities with respect to “non-routine” items. At the Annual Meeting, brokers will have discretionary authority to vote shares on the ratification of the appointment of our independent registered public accounting firm (Proposal 2), which is the only routine proposal to be presented at the Specialmeeting. However, when a matter to be voted on at a stockholder’s meeting is the subject of a contested solicitation, brokers do not have discretion to vote Broker Securities on any matters at the Annual Meeting, to the extent they have provided you with the opposition party’s proxy materials. When a bank or broker has not received instructions from the beneficial owners of Broker Securities or persons entitled to vote any Broker Securities, and the bank or broker cannot vote on a particular matter because it is not “routine,” then there is a “broker non-vote” on that matter. Broker non-voteswill not be counted as presentin determining whether there is a quorum for the Annual Meeting but are not counted for purposes of meetingdetermining whether a “non-routine” proposal has been approved and thus, have no effect on the quorum requirement.outcome.
IfPlease note that to be sure your shares are registered invote is counted on all of the nameproposals to be considered at the Annual Meeting, including the election of adirectors, you should instruct your broker, bank, trustee, or brokerage firm, you may be eligiblenominee how to vote any Broker Securities. If you do not provide voting instructions, votes may not be cast on your shares electronically via the Internet or by telephone through our proxy tabulator, Computershare, who coordinates proxy delivery and voting for these banks and brokerage firms. If your shares are registered in the name of a bank or brokerage firm, you will receive a copy of this Proxy Statement, either by paper or electronically, from Computershare and will have the opportunitybehalf with respect to vote via the Internet or by telephone through Computershare.those “non-routine” matters.
Authorizing a Proxy for Shares Held in Your Name
If you are a record holder of shares of the Company’s common stock, you may authorize a proxy to vote on your behalf as describedby following the instructions provided on the enclosed proxy card. Authorizing your proxy will not limit your right to vote in person at the SpecialAnnual Meeting. A properly completed and submitted proxy will be voted in accordance with your instructions, unless you subsequently revoke your instructions. If you authorize a proxy without indicating your voting instructions, the proxy holderproxyholder will vote your shares according to the Board of Directors’sBoard’s recommendations. You may returnInternet and telephone voting procedures are designed to authenticate the enclosed proxy card by mail instockholder’s identity and to allow stockholders to vote their shares and confirm that their instructions have been properly recorded. Your telephone or Internet vote authorizes the enclosed, self-addressed envelope, or you maynamed proxies to vote your shares by calling toll free at 1-800-652-8683 or throughin the Internet websitesame manner as if you had marked, signed and returned a proxy card.
3
Receipt of Multiple Proxy Cards
Many of our stockholders hold their shares in more than one account and may receive separate proxy tabulatorcards or voting instruction forms for each of those accounts. To ensure that all of your shares are represented atwww.envisionreports.com/TICC, as indicated on the Annual Meeting, we recommend that you vote every proxy card.card you receive.
If you are a stockholder“stockholder of record,record” (i.e., you canhold shares directly in your name), you may revoke youra proxy at any time before it is exercised by:
If you require assistance with voting proxy or have any questions about the special meeting, please contact our proxy solicitor, Okapi Partners LLC, toll-free at (877) 566-1922.
Annual Meeting. If you hold shares of common stock through a broker, bank or other nominee,Broker Securities, you must follow the instructions you receive from your broker, bank or other nomineethem in order to revoke your voting instructions. Attending the SpecialAnnual Meeting does not revoke your proxy unless you also vote in person at the SpecialAnnual Meeting.
Approval Stockholders have no dissenters’ or appraisal rights in connection with any of the New Advisory Agreement. Approval of the New Advisory Agreement requires the affirmative vote of “a majority of outstanding voting securities” entitled to vote at the Special Meeting, as defined under the Investment Company Act of 1940, as amended (the “1940 Act”). Since the Company’s only voting securities are common stock, consistent with the 1940 Act, the affirmative vote of a majority of the outstanding shares of common stock entitled to vote at the Special Meeting is required to approve the New Advisory Agreement. For purposes of approval of the New Advisory Agreement, “a majority of outstanding shares of common stock” is the lesser of: (i) 67% or more of the shares of common stock present at the Special Meeting if the holders of more than 50% of the outstanding common stock are present or represented by proxy; or (ii) more than 50% of our outstanding shares of common stock as of the Record Date. Abstentions will have the effect of a vote against the New Advisory Agreement. Since banks, brokerage firms or other nominees do not have discretion to vote on non-routine matters such as the approval of the New Advisory Agreement, if you do not provide voting instructions to your bank, brokerage firm or other nominee, your shares will not be voted at the Special Meeting and will not be counted as present for purposes of meeting the quorum requirement.proposals described herein.
Proposal 1 — Election of Directors. The election of a director requires aA plurality of all the votes cast either in person or by proxy at the Special Meeting (i.e., the director nominees receiving the greatest numbera meeting of votes cast for each of the director positions being voted upon). Each share entitledstockholders duly called and at which a quorum is present shall be sufficient to vote may be voted for as many persons as there are directors to be elected. However, stockholderselect a director. Stockholders may not cumulate their votes. If you vote “Withhold Authority”“Withhold” with respect to a director nominee,OXSQ’s Board nominees, your shares will not be voted with respect to the person indicated. Because directors are elected by a pluralityAbstentions and Broker Non-Votes, if any, will not be included in determining the number of all votes cast abstentionsand, as a result, will have no effect on this proposal. This proposal is considered a “non-routine matter”; accordingly, brokers cannot vote on this proposal unless they have received voting instructions from the electionbeneficial owner of directors.Broker Securities.
AdjournmentProposal 2 — Ratification of Special Meeting. Approval of the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies, requires theIndependent Registered Public Accounting Firm. The affirmative vote of the holders of a majority of the votes cast at the Special Meeting.Annual Meeting in person or by proxy is required to ratify the appointment of PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023 (i.e., the number of shares voted “for” the ratification of the appointment of PricewaterhouseCoopers LLP exceeds the number of votes “against” the ratification of the appointment of PricewaterhouseCoopers LLP). Abstentions, if any, will not be included in determining the number of votes cast and, as a result, will have theno effect of a vote againston this proposal.This proposal is considered a “routine matter”; accordingly, brokers have discretionary authority to vote on this proposal without receiving voting instructions from the beneficial owner of Broker Securities.
Additional Solicitation. If there are not enough votes to approve any proposals at the New Advisory Agreement or to elect the director nominees, a majority of theAnnual Meeting, stockholders who are represented may adjourn the SpecialAnnual Meeting to permit the further solicitation of proxies. The persons named as proxies will vote those proxies for such adjournment, unless marked to be voted against theany proposal for which an adjournment is sought, to permit the further solicitation of proxies.
Also, a stockholder vote may be taken on one or more of the election of directors or to approve the New Advisory Agreementproposals in this Proxy Statement prior to any such adjournment if there are sufficient votes for approval of such electionproposal(s).
Participants in the Solicitation of Proxies
Under applicable SEC regulations, the Company, its directors orand certain of its executive officers, the New Advisory Agreement.
The Company will not bear any expensesofficers and employees of Oxford Square Management, LLC (“Oxford Square Management”), the Company’s investment adviser, and the officers and employees of Oxford Funds, LLC (“Oxford Funds”), the Company’s administrator, may be deemed to be participants in the solicitation of proxies from OXSQ’s stockholders in connection with the solicitationAnnual Meeting. Oxford Square Management and Oxford Funds are both located at 8 Sound Shore Drive, Suite 255, Greenwich, CT 06830. No additional compensation will be paid to directors, officers or regular employees of the Company, Oxford Square Management or Oxford Funds for soliciting proxies forin connection with the Special Meeting, but rather BSPAnnual Meeting.
Information Regarding This Solicitation
The Board is making this proxy solicitation and the owners of the AdviserCompany will equally bear the expense of the solicitation of proxies for the SpecialAnnual Meeting, including the cost of preparing, printing and mailing this Proxy Statement, the accompanying Notice of SpecialAnnual Meeting of Stockholders, and proxy card. We have requested that banks, brokerage firmsIf brokers, trustees, or fiduciaries and other institutions or nominees holding shares in their names, or in the name of their nominees, which are beneficially owned by others, forward the proxy materials to, and obtain proxies from, such beneficial owners. BSP andowners, the AdviserCompany will reimburse such persons for their reasonable expenses in so doing.
4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
In addition to the solicitation of proxies by the use of the mail, proxies may be solicited in person and/or by telephone or facsimile transmission by directors, officers or employees of the Company and/or officers or employees of the Adviser. The Adviser and BDC Partners, the Company’s administrator, are both located at 8 Sound Shore Drive, Suite 255, Greenwich, CT 06830. No additional compensation will be paid to directors, officers or regular employees of the Company, the Adviser or BDC Partners for such services. BDC Partners, on behalf of BSP and the Adviser, has also retained Okapi Partners LLC to assist in the solicitation of proxies for a fee of approximately $140,000 plus reimbursement of certain out of pocket expenses.
Any proxy given pursuant to this solicitation may be revoked by notice from the person giving the proxy at any time before it is exercised. Any such notice of revocation should be provided in writing and signed by the stockholder in the same manner as the proxy being revoked and delivered to the Company’s proxy tabulator, TICC Capital Corp., c/o Computershare, 250 Royall Street, Canton, MA 02021 prior to 9:00 a.m., Eastern Time, on October 26, 2015, or submitted by calling toll free at 1-800-652-8683 or through the Internet website of our proxy tabulator atwww.envisionreview.com/TICC, prior to 9:00 a.m., Eastern Time, on October 26, 2015.
Preliminary voting results will be announced at the Special Meeting. Final voting results will be published in a current report on Form 8-K within four business days from the date of the Special Meeting.
The following table sets forth, as of the Record Date, the beneficial ownership of each current director, the director nominees, the Company’s executive officers, each person known to us to beneficially own more than 5% or more of the outstanding shares of our common stock, and the executive officers and directors as a group.
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (“SEC”)SEC and includes voting or investment power with respect to the securities. Ownership information for those persons who beneficially own more than 5% or more of our shares of common stock is based upon Schedule 13D and Schedule 13G filings by such persons with the SEC and other information obtained from such persons, if available.
Unless otherwise indicated, the Company believes that each beneficial owner set forth in the table has sole voting and investment power and has the same address as the Company. The Company’s current address is 8 Sound Shore Drive, Suite 255, Greenwich, Connecticut 06830.
Name of Beneficial Owner | Number | Percentage of | ||||
Interested Directors |
|
| ||||
Jonathan H. Cohen(3) | 2,273,591 |
| 4.0 | % | ||
Charles M. Royce(4) | 2,119,795 |
| 3.8 | % | ||
Independent Directors |
|
| ||||
Steven P. Novak(5) | 30,001 |
| * |
| ||
Barry A. Osherow | 1,863 |
| * |
| ||
George Stelljes III | 34,000 |
| * |
| ||
Executive Officers |
|
| ||||
Saul B. Rosenthal(3) | 2,057,878 |
| 3.6 | % | ||
Bruce L. Rubin | 10,949 |
| * |
| ||
Gerald Cummins | — |
| — |
| ||
Executive Officers and Directors as a Group | 6,526,975 | (6) | 11.6 | % |
____________
* Represents less than one percent
(1) Beneficial ownership has been determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Assumes no other purchases or sales of our common stock since the information most recently available to us as of the Record Date. This assumption has been made under the rules and regulations of the SEC and does not reflect any knowledge that we have with regard to the present intent of the beneficial owners of our common stock listed in this table. Any fractional shares owned directly or beneficially have been rounded down for purposes of this table.
(2) Based on a total of 56,395,751 shares of the Company’s common stock issued and outstanding on the Record Date.
(3) Includes 1,102 shares held by Oxford Funds, which may be deemed to be beneficially owned by Messrs. Cohen and Rosenthal by virtue of their ownership interests therein.
(4) Mr. Royce may be deemed to beneficially own 1,727,510 shares held by Royce Family Investments, LLC and 392,285 shares held by Royce Family Fund, Inc. Mr. Royce disclaims beneficial ownership of any shares directly held by Royce Family Fund, Inc. The address for both of these entities is 745 Fifth Avenue, New York, New York 10151.
(5) Includes 20,001 shares are held by Mr. Novak’s spouse, which Mr. Novak may be deemed to beneficially own.
(6) The 1,102 shares held by Oxford Funds, described in footnote 3 above, are included in the number of shares held by each of Mr. Cohen and Mr. Rosenthal, but are only counted once in the total held by the executive officers and directors as a group.
5
Name and Address of Beneficial Owner | Number of Shares Owned Beneficially(1) | Percentage of Class(2) | ||||||
Current Executive Officers | ||||||||
Saul B. Rosenthal(3) | 107,547 | * | ||||||
Bruce L. Rubin | 8,212 | * | ||||||
Gerald Cummins | — | — | ||||||
Incoming Executive Officers | ||||||||
Bryan R. Martoken | — | — | ||||||
Alexander H. McMillan | — | — | ||||||
Current Executive officers and directors as a group | 1,045,583 | 1.7 | % |
Set forth below is the dollar range of equity securities beneficially owned by each of our directors as of the Record Date.
Name of Director | ||||
Dollar Range of Equity | ||||
Interested Directors | ||||
Jonathan H. Cohen | Over $100,000 | |||
Charles M. Royce | Over $100,000 | |||
Independent Directors | ||||
Steven P. Novak | $ | 50,001 – $100,000 | ||
Barry A. Osherow | $1 – $10,000 | |||
George Stelljes III | $ | 50,001 – $100,000 | ||
____________
(1) The dollar ranges are: 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 for our common stock of $2.65 on the Record Date |
The Adviser currently provides investment advisory services to the Company pursuant to the current investment advisory agreement, dated July 1, 2011, between the Company and the Adviser (the “Existing Advisory Agreement”). The Existing Advisory Agreement was last approved by the Board of Directors, including a majority of directors who are not “interested persons,” as such term is defined under the 1940 Act (the “Non-interested Directors”), on April 27, 2015. The Existing Advisory Agreement was last approved by a vote of the stockholders of the Company on June 7, 2011.
BDC Partners (which is jointly owned by Jonathan H. Cohen and Saul B. Rosenthal), Charles M. Royce and the Royce Family Fund, Inc., the sole owners of all of the issued and outstanding limited liability membership interests of the Adviser have entered into a purchase agreement with BSP Acquisition I, LLC, an affiliate of Benefit Street Partners L.L.C. (“BSP”), pursuant to which BSP will acquire control of the Adviser (the “Transaction”). As a result of the expected change of control of the Adviser resulting from the Transaction, an assignment of the Existing Advisory Agreement under the 1940 Act is expected to occur. This assignment will terminate the Existing Advisory Agreement in accordance with its terms as required by Section 15 of the 1940 Act.
In order for the Adviser to continue to serve as the investment adviser to the Company upon the closing of the Transaction, the stockholders of the Company must approve the New Advisory Agreement. The 1940 Act requires that a new investment advisory agreement be approved by both a majority of a company’s Non-interested Directors and “a majority of its outstanding voting securities,” as such term is defined under the 1940 Act.At an in-person meeting on July 30, 2015 and a telephone meeting on September 2, 2015, the Board of Directors (including a majority of the Non-interested Directors) approved the New Advisory Agreement and voted unanimously to recommend that the Company’s stockholders approve the New Advisory Agreement.
If approved by the stockholders of the Company, the New Advisory Agreement will be executed on behalf of the Company and become effective upon the closing of the Transaction. The closing of the Transaction is conditioned on, among other things: (i) approval of the New Advisory Agreement by the Company’s stockholders; (ii) the election to the Board of Directors of four new Non-interested Directors and two new interested directors by the Company’s stockholders; (iii) the replacement of Jonathan H. Cohen and Charles M. Royce as members of the Board of Directors with two interested directors, Thomas J. Gahan and Richard J. Byrne, who are affiliated with BSP if they are elected at the Special Meeting; (iv) the replacement of the Company’s current executive officers and the Adviser’s investment committee members with certain individuals that are affiliated with BSP; (v) the approval by the Board of Directors of the change in the Company’s name to Benefit Street Capital Corp. and (vi) the receipt of required regulatory and other approvals. If each of the terms and conditions is satisfied or waived, the parties to the Transaction anticipate that the closing will take place as soon as practicable after the Special Meeting.
The stockholders of the Company are being asked to approve the New Advisory Agreement between the Company and the Adviser. The terms and conditions of the New Advisory Agreement will be identical with respect to all material terms and conditions of the Existing Advisory Agreement except for a decrease in the base management fee payable under the New Advisory Agreement. The change between the terms of the New Advisory Agreement and the Existing Advisory Agreement is discussed below. The Board of Directors believes the approval of the New Advisory Agreement will provide continuity of advisory services to the Company by the Adviser, and believes it to be in the best interests of the Company and its stockholders.
The Company’s Board has increased the size of the Board of Directors to nine members and has recommended that the Company’s stockholders vote to elect the four Non-interested Director nominees and two interested director nominees described in Proposal 2. In addition, if Proposals 1 and 2 are approved by the Company’s stockholders, the Company’s two current interested directors, Jonathan H. Cohen and Charles M. Royce, will resign from the Board of Directors and will be replaced by two interested directors, Thomas J.
Gahan and Richard J. Byrne, who are affiliated with BSP. In addition, following the closing of the Transaction, Mr. Gahan, as well as Mr. Paasche, a Senior Managing Director of BSP, and Mr. Faulstich, the Head of Originations of BSP, each with over 20 years of experience in the financial services industry, will replace the current members of the Adviser’s investment committee and all of the Company’s executive officers will be replaced by executive officers that are affiliated with BSP, as further discussed below. See “— Information Regarding the New Executive Officers and Members of the Adviser’s Investment Committee” for further details. As discussed below under “— Administration Agreements,” upon the closing of the Transaction, the current amended and restated administration agreement between the Company and BDC Partners, dated April 24, 2012 (the “Existing Administration Agreement”), will be terminated and the Company will enter into a new administration agreement (the “New Administration Agreement,” and together with the Existing Administration Agreement, the “Administration Agreements”) with BSP or an affiliate thereof (the “New Administrator”) on substantially the same terms and conditions as the Existing Administration Agreement.
The Company will have a similar investment objective to generate current income and capital appreciation by investing primarily in debt investments. BSP plans to achieve this investment objective by transitioning the Company’s portfolio from syndicated loans and CLO investment vehicles to primarily focus on senior secured loans and to a lesser extent, mezzanine or subordinated debt. Senior secured loans include first and second lien and unitranche loans that rank ahead of subordinated debt of a given portfolio company. Mezzanine and subordinated debt is subordinated to senior loans and is generally unsecured. In seeking this investment objective, the Company will target a differentiated investment strategy composed of four key components:
BSP expects to enter into a sub-administration agreement pursuant to which BDC Partners will provide certain financial, accounting, tax, compliance and administrative services from time to time to assist BSP in providing administrative services to the Company. Pursuant to this sub-administration agreement, BSP expects that the current members of the Adviser will continue to be accessible to BSP for continuity purposes.
There will be no changes to the Company’s distribution policy. To the extent that the Company has income available, it intends to continue to distribute quarterly distributions to its stockholders. The amount of the Company’s distributions, if any, will be determined by its Board. Any distributions to the Company’s stockholders will be declared out of assets legally available for distribution.
As a business development company, the Company needs the ability to raise additional capital for investment purposes on an ongoing basis. Accordingly, the Company expects to access the capital markets from time to time in the future to raise cash to take advantage of additional investment opportunities. The Company may offer common stock, preferred stock, debt securities or subscription rights to purchase shares of the Company’s common stock in the future. The Company intends to use the proceeds from these offerings to fund additional investments in portfolio companies consistent with its investment objective and/or general corporate purposes including repayment of the Company’s debt facilities. With BSP controlling the Adviser, BSP believes the Company will be successful in attracting a larger number of commercial bank lenders into the Company’s future credit facilities. BSP will also look for ways to optimize the existing debt facilities of the Company to be better aligned with the new investment strategy focused on private debt.
Following the completion of the Transaction, the Company’s name will change to Benefit Street Capital Corp., however, you will still own the same amount and type of shares in the same Company. The shares of the Company will continue to be listed on the NASDAQ Global Select Market, although the ticker symbol will change upon the change in the name of the Company to Benefit Street Capital Corp.
The Company will not bear the costs associated with the Transaction. These costs will be borne by the Adviser and BSP. BSP and the Adviser will also equally bear the costs associated with the Special Meeting.
To the extent Proposal 3 – Adjournment of the Special Meeting is approved by the Company’s stockholders, the Company may adjourn the Special Meeting and seek additional proxies to vote on Proposal 1 and/or Proposal 2, as necessary. If only Proposal 1 or Proposal 2 is approved by the Company’s stockholders but not both proposals, or if neither of these proposals is approved by the Company’s stockholders, then the Transaction will not close and the Company will continue to operate pursuant to the Existing Advisory Agreement under the supervision of the existing Board of Directors and management team.
In evaluating the New Advisory Agreement, the Board of Directors requested an extensive set of materials regarding BSP and its affiliates, including the Adviser.
BSP is a leading credit-focused alternative asset management firm with over $10.7 billion in assets under management, including $4.2 billion in private debt, as of June 30, 2015. BSPMarket. Beneficial ownership has been registered as an investment adviser under the Investment Advisers Act of 1940, as amended, since February 2011. BSP is an affiliate of Providence Equity Partners L.L.C. (“Providence”) and was formed in 2008 as Providence’s credit investment platform. BSP manages funds for institutions and high-net-worth investors, including private funds with a substantially similar strategy to the anticipated new investment strategy of the Company, globally across various credit funds and strategies including private debt, long-short liquid credit, long-only credit and commercial real estate debt. In addition, BSP has been managing collateralized loan obligation vehicles (“CLOs”) since October 2012 and currently manages seven CLOs with total CLO assets under management of $3.6 billion as of June 30, 2015. These strategies complement each other as they all leverage the sourcing, analytical, compliance, and operational capabilities that encompass BSP’s robust platform. BSP’s private debt strategy seeks to benefit from proprietary access to companies through an extensive, nationwide network of senior partner relationships, CEO relationships, key financial intermediaries, financial sponsors and the extensive global resources and networks of the broader Providence platform. As of June 30, 2015, BSP has 103 professionals, including 59 investment and research professionals.
BSP’s credit investing efforts are strengthened through its affiliation with Providence, a leading global private equity firm with more than $40 billion in committed investor capital. Providence was founded as a sector-focused private equity investor with expertise in global media, communications, education and information sectors. Collectively, Providence and BSP consists of more than 300 employees, including more than 115 investment professionals located across offices in Providence, New York, Houston, London, Hong Kong, New Delhi and Singapore.
Upon consummation of the Transaction, the Company will be led by the senior management team of BSP, including Thomas J. Gahan (former head of corporate and investment banking in the Americas and global head of capital markets at Deutsche Bank), Richard J. Byrne (former chief executive officer of Deutsche Bank Securities), Michael E. Paasche (former global head of leveraged finance at Deutsche Bank), and Blair Faulstich (former managing director of media and communications investment banking at Merrill Lynch). Mr. Gahan will replace Charles M. Royce as Chairman of the Board of Directors of the Company and Mr. Byrne will replace both Saul B. Rosenthal as President of the Company and Jonathan H. Cohen as Chief Executive Officer and as member of the Board of Directors of the Company. Messrs. Gahan, Paasche and Faulstich comprise the investment committee and each have over 20 years of experience in leveraged lending, mezzanine investing, high yield financing, special situations, secondary debt and general credit investing.
The Board of Directors discussed BSP's qualifications and considered its philosophy of management, historical performance, and methods of operations, and considered the following potential benefits to the Company and its stockholders:
The Transaction is structured to comply with the conditions imposed under Section 15(f) of the 1940 Act. Section 15(f) provides that when a sale of securities or a controlling interest in an investment adviser occurs, the investment adviser or any of its affiliated persons may receive any amount or benefit in connection with the sale so long as two conditions are satisfied. These conditions are as follows:
A copy of the New Advisory Agreement is attached to this Proxy Statement asAppendix A, and a copy of a letter agreement relating to the New Advisory Agreement is attached to this Proxy Statement asAppendix B. The following description of the terms of the New Advisory Agreement is only a summary of its material terms and explicitly highlights all material differences between the New Advisory Agreement and the Existing Advisory Agreement.You should refer toAppendix A andAppendix B for the New Advisory Agreement and the related letter agreement, and the description of the New Advisory Agreement set forth in this Proxy Statement is qualified in its entirety by reference toAppendix A, as modified byAppendix B.
The Adviser has served as investment adviser to the Company since the commencement of the Company’s operations in 2003, pursuant to the terms of the Existing Advisory Agreement as amended from time to time. If approved by the stockholders at the Special Meeting, the Adviser will continue to provide services pursuant to the terms of the New Advisory Agreement. The terms and conditions of the New Advisory Agreement are identical in all material respects to the Existing Advisory Agreement except for a decrease in the base management fee payable under the New Advisory Agreement. Following approval by the stockholders of the Company in the manner required by the 1940 Act, the New Advisory Agreement will be entered into immediately following the closing of the Transaction. The New Advisory Agreement will remain in effect for a period of two (2) years from the date it is signed, unless sooner terminated. After the initial two-year period, continuation of the New Advisory Agreement from year-to-year is subject to annual approval by the Board of Directors, including at least a majority of the Non-interested Directors.
Advisory and Other Services. Under the terms of the Existing Advisory Agreement and the New Advisory Agreement (collectively, the “Advisory Agreements”), subject to the supervision of the Board of Directors, the Adviser manages the Company’s day-to-day operations of, and provides investment advisory services to the Company, in each casedetermined in accordance with the Company’s investment objectives, policies and restrictions. The Adviser’s responsibilities have included and will include: (i) the determinationRule 16a-1(a)(2) of the compositionExchange Act.
6
Management Fees. The management fees under the New Advisory Agreement will be calculated in a manner identical to that of the Existing Advisory Agreement, except for the calculation of the base management fee payable under the New Advisory Agreement, which will reflect a 50 basis point reduction.
For services provided by Adviser under the Advisory Agreements, the Company pays and will pay the Adviser a management fee consisting of two components, a base management fee and an incentive fee. The base management fee (the “Base Fee”) is calculated at an annual rate of 2.00% of the Company’s gross assets under the Existing Advisory Agreement and will be calculated at an annual rate of 1.50% of the Company’s gross assets under the New Advisory Agreement. For services rendered under the Advisory Agreements, the Base Fee is and will be payable quarterly in arrears, and is and will be calculated based on the average value of the Company’s gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any equity or debt capital raises, repurchases or redemptions during the current calendar quarter. The Base Fee for any partial quarter will be appropriately prorated.
The incentive fee has two parts. The first part is and will be calculated and payable quarterly in arrears based on the Company’s “Pre-Incentive Fee Net Investment Income” for the immediately preceding calendar quarter. For this purpose, “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income earned by the Company (which includes any consulting or other fees that the Company receives from portfolio companies, but does not include any net realized capital gains) accrued during the calendar quarter minus the Company’s operating expenses for the quarter (including the Base Fee and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind (“PIK”) interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, is compared to one-fourth of an annual “hurdle rate.”
For each year commencing on or after January 1, 2005, the annual hurdle rate has been determined as of the immediately preceding December 31st by adding 5.0% to the interest rate then payable on the most recently issued five-year U.S. Treasury Notes, up to a maximum annual hurdle rate of 10.0%. The annual hurdle rate for the 2014 and 2013 calendar years was 6.75% and 5.72%, respectively. The current hurdle rate for the 2015 calendar year, calculated as of December 31, 2014, is 6.65%. The Company’s net investment income used to calculate this part of the incentive fee also is and will be included in the amount of the Company’s gross assets used to calculate the 2% base management fee to the extent such income is not distributed to shareholders. In addition, in the event the Company recognizes PIK loan interest in excess of its available capital, the Company may be required to liquidate assets in order to pay a portion of the incentive fee. The Adviser, however, is not and will not be required to reimburse the Company for the portion of any fees attributable to accrued deferred loan interest in the event of a default by the obligor. The operation of the incentive fee with respect to the Company’s Pre-Incentive Fee Net Investment Income for each quarter is as follows:
For example, for the quarter ended March 31, 2015, pre-incentive fee net investment income of $10.2 million exceeded the hurdle of $8.7 million (based upon net assets of $520.8 million at December 31, 2014 and the quarterly hurdle rate of approximately 1.7%). The incentive fee rate of 20% resulted in an incentive fee of approximately $300,000 for the quarter.
The second part of the incentive fee is and will be determined and payable in arrears as of the end of each calendar year (or upon termination of the Advisory Agreements, as of the termination date), and equals 20% of the Company’s “Incentive Fee Capital Gains,” which consist of the Company’s realized capital gains for each calendar year, computed net of all realized capital losses and unrealized capital depreciation for that calendar year. For accounting purposes only, in order to reflect the theoretical capital gains incentive fee that would be payable for a given period as if all unrealized gains were realized, the Company will accrue a capital gains incentive fee based upon realized capital gains and losses during the current calendar year
through the end of the period, plus any unrealized capital appreciation and depreciation as of the end of the period. It should be noted that a fee so calculated and accrued would not necessarily be payable under the Advisory Agreements, and may never be paid based upon the computation of capital gains incentive fees in subsequent periods. Amounts paid under the Advisory Agreements will be consistent with the formula reflected in the Advisory Agreements.
During the fiscal year ended December 31, 2014, the Company paid to the Adviser approximately $21.2 in base management fees and $5.6 million in incentive fees.
Expenses. Under the New Advisory Agreement, all personnel of the Adviser or BSP, when and to the extent engaged in providing investment advisory services, and the compensation and expenses of such personnel allocable to such services, will be provided and paid for by the Adviser or by BSP, and not by the Company. The Company is and will be responsible for all other costs and expenses of its operations and transactions, including (without limitation) those relating to: organization and offering; calculating the Company’s net asset value; effecting sales and repurchases of shares of the Company’s common stock and other securities; investment advisory fees; fees payable to third parties relating to, or associated with, making investments (in each case subject to approval by the Company’s Board of Directors); transfer agent and custodial fees; federal and state registration fees; any exchange listing fees; federal, state and local taxes; Non-Interested Directors’ fees and expenses; costs of proxy statements, stockholders’ reports and notices; fidelity bond, directors and officers/errors and omissions liability insurance and other insurance premiums; and direct costs such as printing, mailing, long distance telephone, staff, independent audits and outside legal costs and all other expenses incurred by the Company or its administrator in connection with administering the Company’s business, including payments under the Administration Agreements that is based upon the Company’s allocable portion of overhead incurred by the Company’s administrator in performing its obligations under the Administration Agreements, including. All of these expenses are ultimately borne by the Company’s common stockholders. The Existing Advisory Agreement contains the same provisions with respect to responsibilities for expenses as those described above with respect to the New Advisory Agreement.
Term, Continuance and Termination. The continuance and termination provisions under the New Advisory Agreement will be identical to the continuance and termination provisions under the Existing Advisory Agreement. The Advisory Agreements provide that the Advisory Agreements will remain in force for two years from the date on which they first become effective, and thereafter from year to year, subject to approval by the Board of Directors or a vote of a majority of the outstanding voting securities of the Company and by approval of a majority of the Non-interested Directors. The Advisory Agreements may be terminated at any time, without the payment of any penalty, by the action of the Board of Directors or by a vote of a majority of the Company’s outstanding voting securities, on 60 days’ written notice to the Adviser, or by the Adviser at any time, without the payment of any penalty, on 60 days’ written notice to the Company.
Indemnification. The indemnification provisions under the New Advisory Agreement will be identical to the indemnification provisions under the Existing Advisory Agreement. The Advisory Agreements provide that, absent willful misfeasance, bad faith or gross negligence in the performance of their respective duties or by reason of the reckless disregard of their respective duties and obligations, the Adviser and its officers, managers, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from the Company for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of the Adviser’s services under the Advisory Agreements or otherwise as an investment adviser of the Company.
On July 13, 2015, July 17, 2015, July 28, 2015 and July 30, 2015, the Board of Directors, including a majority of Non-interested Directors, met and discussed the Transaction and its possible effects on the Company, and evaluated the New Advisory Agreement. Senior officers of the Adviser and BSP were present to answer questions from the Board of Directors. The Board of Directors, including a majority of Non-interested Directors, approved the New Advisory Agreement on July 30, 2015.
In evaluating the New Advisory Agreement, the Board of Directors reviewed certain materials furnished separately by the Adviser, BSP and their affiliates relevant to its decision. Those materials included information regarding the Adviser and BSP and their affiliates, their personnel, operations and financial
conditions. Representatives of the Adviser and BSP discussed with the Board of Directors the Adviser’s and BSP’s philosophy of management, historical performance and methods of operation insofar as they related to the Company, and indicated their belief that, as a consequence of the Transaction, the operations of the Adviser and its ability to provide advisory services to the Company would not be adversely affected and would likely be enhanced by the resources of BSP. The Board of Directors considered the potential benefits to stockholders and terms of the Transaction, including, among other things, the changes in the governance structure of the Adviser and the Company; the strategic plans for the Adviser and the Company; the operation of the Company; the nature, extent and quality or level of services to be provided to the Company; key personnel that are expected to service the Company and/or the Board of Directors and the compensations or incentive arrangements to retain such personnel; the Adviser’s new ownership and capital structure; the additional regulatory requirements applicable to the Adviser or the Company’s operations as a result of the Transaction, if any; the Company’s fees and expenses; and such other factors as the Board of Directors and the Non-interested Directors deemed relevant to their decision.
In approving the New Advisory Agreement, the Board of Directors, including all of the Non-interested Directors, considered the following matters and reached the following conclusions:
The Non-interested Directors had the opportunity to consult in executive session with their independent legal counsel regarding the approval of the New Advisory Agreement. Based on the information reviewed and discussions held with respect to each of the foregoing items, the Board of Directors, including all of the Non-interested Directors, concluded in light of all of the Company’s surrounding circumstances that the compensation payable to the Adviser was reasonable in relation to the services to be provided by the Adviser to the Company.
After these deliberations, the Board of Directors, including a majority of the Non-interested Directors, approved the New Advisory Agreement between the Adviser and the Company as in the best interests of the Company and its stockholders. The Board of Directors then directed that the New Advisory Agreement be submitted to the Company’s stockholders for approval with the Board of Directors’s recommendation that stockholders vote to approve the New Advisory Agreement.
The Board of Directors did not assign relative weights to the above factors or the other factors considered by it. Individual members of the Board of Directors may have given different weights to different factors.
Subsequent to publicly disclosing the terms of the New Advisory Agreement, the Board of Directors formed a special committee consisting solely of the Company’s three Non-interested Directors (the “Special Committee”) to evaluate an unsolicited, written proposal from a third party also seeking to replace the Adviser as the investment adviser to the Company. The third party offered a 50% reduction in the base management fee under a new investment advisory agreement for a period of three years and to waive the first $5 million of the management fee. In addition, the third party included a commitment to purchase $10 million of the Company’s common stock in one or more open-market purchases. The third party subsequently offered to further extend its proposed 50% reduction in the base management fee under a new investment advisory agreement for an additional year and provide an additional $20 million of fee concessions or share purchases.
The Special Committee extensively evaluated the unsolicited proposal, including the totality of its quantitative and qualitative aspects, as compared to the quantitative and qualitative aspects of the New Advisory Agreement, and discussed it internally as well as with independent legal counsel. After these extensive deliberations, the Special Committee determined that the greater benefit to the Company and its stockholders would be derived from BSP’s strategy, reputation, institutional relationships, track record, investment skills and the quality of its management team and, as a result, the Special Committee continued to support the Transaction and the New Advisory Agreement. Notwithstanding such determination, the Special Committee also requested that the Company’s management seek to obtain more favorable terms from BSP with respect to the New Advisory Agreement. As a result, the Company engaged in further discussions with BSP in light of the Special Committee’s directive, and BSP ultimately agreed to permanently lower the base management fee payable under the New Advisory Agreement to an annual rate of 1.50% of the Company’s gross assets from an annual rate of 2.00% of the Company’s gross assets. Also, various members and affiliates of BSP and the Adviser have agreed to purchase a minimum of $20 million of the Company’s common stock within 12 months after the closing of the Transaction.
The Special Committee then convened a meeting to discuss the above-referenced developments, including BSP’s agreement to permanently lower the base management fee payable under the New Advisory Agreement,
and determined to continue to recommend the New Advisory Agreement to the Company’s Board of Directors and stockholders. The Board of Directors subsequently determined that the New Advisory Agreement continued to be in the best interests of the Company and its stockholders.
The Adviser has acted as the Company’s investment adviser since the Company’s inception in 2003. The Adviser’s current investment committee members are Jonathan H. Cohen, Saul B. Rosenthal and Darryl M. Monasebian. Messrs. Cohen and Rosenthal are also the Company’s and the Adviser’s Chief Executive Officer and President, respectively. Bruce L. Rubin is the current Chief Financial Officer and Secretary of the Company and the Adviser. Gerald Cummins is the current Chief Compliance Officer of the Company and the Adviser. The Adviser’s investment committee is supported by six additional investment professionals.
Upon the consummation of the Transaction, the Adviser will become controlled by BSP and Messrs. Cohen, Rosenthal, Rubin and Cummins will resign immediately from their respective positions with the Company and the Adviser. In addition, Messrs. Cohen, Rosenthal and Monasebian, as well as the six investment professionals that currently support the Adviser’s investment committee, will resign from their positions with the Adviser. Concurrently, the Board of Directors will appoint Thomas J. Gahan as the Chairman of the Board of Directors, Richard J. Byrne as the Company’s President and Chief Executive Officer, Bryan R. Martoken as the Company’s Chief Financial Officer and Treasurer, and Alexander H. McMillan as the Company’s Chief Compliance Officer and Secretary, all of whom are affiliated with BSP. Upon completion of the transaction the Adviser’s investment committee will consist of Messrs. Gahan, Paasche and Faulstich. Going forward, the Adviser’s investment committee will be supported by BSP’s 59 investment professionals
Following the closing of the Transaction, Messrs. Gahan, Byrne, Paasche and Faulstich, as senior members of the Adviser will have sole investment and dispositive control over all of portfolio company investments held by the Company as of the closing of the Transaction and over all other new investments. The Adviser will continue to make fair value recommendations to the Board of Directors with respect to investments in the Company’s portfolio and will continue to engage third-party valuation firms as needed. Further, with respect to all decisions regarding the Company’s portfolio, each such investment and disposition decision shall be in compliance with applicable law and the fiduciary duties owed to the Company and its stockholders and in compliance with any contractual obligation binding upon the Company.
The table below discloses information regarding the senior management and investment committee members of the Adviser, executive officers of the Company and an estimate of the annual reimbursable compensation expense to be paid by the Company for each such executive officer under the New Administration Agreement, in each case after the Transaction closes:
The following is the biographical information of the new senior management and new investment committee members of the Adviser upon completion of the Transaction. The address for the new senior management and the investment committee members is c/o Benefit Street Partners L.L.C, 9 West 57th Street, Suite 4920, New York, New York 10019. See “Proposal 2 — Election of Directors” for the biographical information of Messrs. Martoken and McMillan.
Thomas J. Gahan. Mr. Gahan is Chief Executive Officer of BSP. Prior to joining Providence in 2008, Mr. Gahan was Chief Executive Officer of Deutsche Bank Securities Inc. and Head of Corporate and Investment Banking in the Americas. He was also the Global Head of Capital Markets at Deutsche Bank, chairman of the principal investment committee and a member of the global banking executive committee and the global markets executive committee. Before joining Deutsche Bank, Mr. Gahan spent 11 years at Merrill Lynch, most recently as Global Head of Credit Trading within the fixed income division. Mr. Gahan received a Bachelor of Arts degree from Brown University.
Richard J. Byrne. Mr. Byrne serves as the President of BSP. Prior to joining BSP in April 2013, Mr. Byrne was Chief Executive Officer of Deutsche Bank Securities, Inc. He was also the Global Co-Head of Capital Markets at Deutsche Bank. Before joining Deutsche Bank, Mr. Byrne was Global Co-Head of the Leveraged Finance Group and Global Head of Credit Research at Merrill Lynch & Co. He was also a perennially top-ranked credit analyst. Mr. Byrne earned an M.B.A. from the Kellogg School of Management at Northwestern University and a B.A. from Binghamton University. Mr. Byrne is a member of the Board of Directors of New York Road Runners and the Board of Directors of MFA Financial, Inc.
Michael E. Paasche. Mr. Paasche is a Senior Managing Director of BSP. Prior to joining Providence in 2008, Mr. Paasche spent 13 years at Deutsche Bank Securities Inc. with multiple positions, including Global Head of Leveraged Finance. Before joining Deutsche Bank, Mr. Paasche spent seven years at Prudential Securities where he held various positions, including Managing Director and Head of High Yield. Mr. Paasche received his Masters of Business Administration degree from the University of Chicago and a Bachelor of Arts degree from Albion College.
Blair D. Faulstich. Mr. Faulstich is Head of Origination of BSP. Prior to joining Providence in 2011, Mr. Faulstich was a managing director and co-head of media and communications investment banking at Citadel Securities. Previously, he was a managing director in the media and communications investment banking group at Merrill Lynch. Mr. Faulstich held various positions at Deutsche Bank Alex. Brown in the media investment banking group. Before joining Alex. Brown in 1997, Mr. Faulstich spent three years at Arthur Andersen. Mr. Faulstich received a Masters of Business Administration degree from Cornell University and Bachelor of Arts from Principia College.
BSP is a leading credit-focused alternative asset management firm with over $10.7 billion in assets under management, including $4.2 billion in private debt, as of June 30, 2015. BSP has been registered as an investment adviser under the Investment Advisers Act of 1940, as amended, since February 2011. BSP is an affiliate of Providence and was formed in 2008 as Providence’s credit investment platform. BSP manages funds for institutions and high-net-worth investors, including private funds with a substantially similar strategy to the anticipated new investment strategy of the Company, globally across various credit funds and strategies including private debt, long-short liquid credit, long-only credit and commercial real estate debt. In addition, BSP has been managing collateralized loan obligation vehicles (“CLOs”) since October 2012 and currently manages seven CLOs with total CLO assets under management of $3.6 billion as of June 30, 2015. These strategies complement each other as they all leverage the sourcing, analytical, compliance, and operational capabilities that encompass BSP’s robust platform. BSP’s private debt strategy seeks to benefit from proprietary access to companies through an extensive, nationwide network of senior partner relationships, CEO relationships, key financial intermediaries, financial sponsors and the extensive global resources and networks of the broader Providence platform. As of June 30, 2015, BSP has 103 professionals, including 59 investment and research professionals.
BSP’s credit investing efforts are strengthened through its affiliation with Providence, a leading global private equity firm with more than $40 billion in committed investor capital. Providence was founded as a sector-focused private equity investor with expertise in global media, communications, education and
information sectors. Collectively, Providence and BSP consists of more than 300 employees, including more than 115 investment professionals located across offices in Providence, New York, Houston, London, Hong Kong, New Delhi and Singapore.
Upon the consummation of the Transaction, BSP Acquisition I, LLC will acquire the limited liability interests of the Adviser from BDC Partners and the other members of the Adviser. BSP Acquisition I, LLC is a subsidiary of and controlled by BSP. The managing member of BSP Acquisition I, LLC is BSP Acquisition I Manager, LLC, which, upon consummation of the Transaction, will be a wholly owned subsidiary of BSP. The address of BSP Acquisition I, LLC and BSP is 9 West 57th Street, Suite 4920, New York, New York 10019.
The principal executive office of BSP is 9 West 57th Street, Suite 4920, New York, New York 10019. Upon the consummation of the Transaction, the principal executive office of each of the Company, the Adviser and the New Administrator will also be 9 West 57th Street, Suite 4920, New York, New York 10019.
BDC Partners currently furnishes the Company with office facilities, together with equipment and clerical, bookkeeping and record keeping services at such facilities pursuant to the Existing Administration Agreement. Under the Existing Administration Agreement, BDC Partners also performs, or oversees the performance of the Company’s required administrative services, which includes being responsible for the financial records which the Company is required to maintain and preparing reports to the Company’s stockholders and reports filed with the SEC. In addition, BDC Partners currently assists the Company in determining and publishing the Company’s net asset value, overseeing the preparation and filing of the Company’s tax returns and the printing and dissemination of reports to the Company’s stockholders, and generally overseeing the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others. Payments under the Existing Administration Agreement are based upon the Company’s allocable portion of overhead and other expenses incurred by BDC Partners in performing its obligations under the Existing Administration Agreement, including a portion of the rent and the compensation of the Company’s Chief Financial Officer, Controller, accounting support staff, and other administrative support staff. The Existing Administration Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other party.
Upon the consummation of the Transaction, the Existing Administration Agreement will be terminated and the Company will enter into the New Administration Agreement with the New Administrator. The New Administration Agreement will be on the same terms in all material respects as the Existing Administration Agreement. Specifically, the New Administrator will provide the Company with office facilities, together with equipment and clerical, bookkeeping and record keeping services at such facilities. The New Administrator will also perform, or oversee the performance of the Company’s required administrative services, which includes being responsible for the financial records which the Company is required to maintain and preparing reports to the Company’s stockholders and reports filed with the SEC. The New Administrator will also assist the Company in determining and publishing the Company’s net asset value, overseeing the preparation and filing of the Company’s tax returns and the printing and dissemination of reports to the Company’s stockholders, and generally overseeing the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others. Payments under the New Administration Agreement will based upon the Company’s allocable portion of overhead and other expenses incurred by the New Administrator in performing its obligations under the New Administration Agreement, including a portion of the rent and the compensation of the Company’s Chief Financial Officer and Treasurer, Chief Compliance Officer and Secretary, accounting support staff, and other administrative support staff. The Company will ultimately be responsible for paying such portion of the compensation of these officers. The New Administration Agreement will also be terminable by either party without penalty upon 60 days’ written notice to the other party.
The Board of Directors, including the Non-interested Directors, considered the nature, quality, cost and extent of administrative services to be performed by the New Administrator under the New Administration Agreement. The Board of Directors, including the Non-interested Directors, also considered the nature and extent of the New Administrator’s supervision of third-party service providers. They concluded that the nature
and quality of the administrative services and supervisory services that will be provided by the New Administrator to be satisfactory and beneficial to the Company. In addition, the Board of Directors has determined that the anticipated fees, expenses and costs to be incurred by the Company under the New Administration Agreement, as well as the sub-administration agreement described below, will not materially increase after the Transaction.
BSP expects to enter into a sub-administration agreement pursuant to which BDC Partners will provide certain financial, accounting, tax, compliance and administrative services from time to time to assist BSP in providing administrative services to the Company in accordance with the Administration Agreement. The Company will ultimately be responsible for making all payments to BDC Partners under the sub-administration agreement and such payments will be based on the actual expenses incurred by BDC Partners in performing its obligations thereunder, including the wages of the personnel of BDC Partners performing services thereunder. Pursuant to this sub-administration agreement, BSP expects that the current members of the Adviser will continue to be accessible to BSP for continuity purposes.
For a period of six years following the closing of the Transaction, BSP has agreed to cause the Adviser, and to use BSP’s reasonable best efforts to cause the Company, in accordance with their respective organizational documents, any other agreements to which each entity is a party and applicable law, to continue to provide indemnification to the current members of the Adviser and the present and former directors, officers, managers, partners, employees and agents of the Adviser and the Company (collectively, the “Covered Persons”) from and against all damages, costs and expenses actually incurred or suffered in connection with any threatened or pending action, suit or proceeding relating to the businesses of the Adviser or the Company or the status of such Covered Person as a director, officer, manager, partner, owner, fiduciary, control person, employee or agent of the Adviser or the Company prior to the closing of the Transaction, to the fullest extent permitted by applicable law. Additionally, for a period of six years following the closing of the Transaction, BSP has agreed to maintain, or cause the Company to maintain or continue in effect a directors’ and officers’ liability insurance policy (the “D&O Tail Policy”) covering the Covered Persons who are covered prior to the closing of the Transaction by the directors’ and officers’ liability insurance policy of the Company. The coverage of the D&O Tail Policy will be in an amount and scope at least as favorable as the existing coverage of the Company. The Company will not incur any additional costs or expenses related to such policy.
Approval of this proposal requires the affirmative vote of “a majority of outstanding voting securities” entitled to vote at the Special Meeting, as defined under the 1940 Act. Since the Company’s only voting securities are common stock, consistent with the 1940 Act, the affirmative vote of a majority of the outstanding shares of common stock entitled to vote at the Special Meeting is required to approve the New Advisory Agreement. For purposes of approval of the New Advisory Agreement, “a majority of outstanding shares of common stock” is the lesser of: (i) 67% or more of the shares of common stock present at the Special Meeting if the holders of more than 50% of the outstanding common stock are present or represented by proxy; or (ii) more than 50% of the Company’s outstanding shares of common stock as of the Record Date. Abstentions will have the effect of a vote against this proposal. Since banks, brokerage firms or other nominees do not have discretion to vote on this proposal, if you do not provide voting instructions to your bank, brokerage firm or other nominee, your shares will not be voted at the Special Meeting and will not be counted as present for purposes of meeting the quorum requirement.
When you consider the recommendation of the Board of Directors that you vote to approve the New Advisory Agreement, you should be aware that certain of our executive officers and members of our Board of Directors have significant conflicts of interests in the Transaction. These interests include, among other things:
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”THE NEW ADVISORY AGREEMENT BETWEEN THE COMPANY AND ADVISER,TO TAKE EFFECT UPON A CHANGE OF CONTROL OF THE ADVISER INCONNECTION WITH THE TRANSACTION.
Pursuant to the Company’s bylaws, the number of directors is set at meetings offive unless otherwise designated by the Board of Directors held on July 30, 2015 and September 2, 2015, the Board of Directors increased the size of the Board of Directors to nine members and recommended for election at the Special Meeting four new Non-Interested Director nominees and two new Interested Director nominees.
Directors. Directors are elected for a staggered term of three years each, with a term of office of one of the three classes of directors expiring each year. Each director will hold office for the term to which he or she is elected or until his or her respective successor is duly elected and qualified.
As a result of the Transaction, as discussed in more detail below, at least 75% of the Company’s Board must be comprised of Non-interested Directors. Accordingly, the Company’sMr. Steven P. Novak and Mr. Charles M. Royce have each been unanimously nominated by OXSQ’s Board of Directors, determined to nominate four new directors that would be considered Non-interested Directors in order to satisfyincluding the 75% Non-interested Director requirement. Further, upon the consummation of the Transaction, the Company’s two current interested directors, Jonathan H. CohenNominating and Charles M. Royce, will resign from the Board of Directors. The Company’s Board of Directors also determined to nominate Thomas J. Gahan and Richard J. Byrne, who are affiliated with BSP and will be interested directors upon consummation of the Transaction to fill the vacancies created by the resignations of Messrs. Cohen and Royce. As a result, if the four director nominees named below are elected to the Board of Directors by the Company’s stockholders at the Special Meeting, upon the closing of the Transaction the Company’s Board will consist of seven Non-interested Directors and two interested directors, and the Company will satisfy the 75% Non-interested Director requirement.
Dennis M. Schaney and Gary Katcher have been nominatedCorporate Governance Committee, for election for a three-yearterm expiring in 2016; Ronald J. Kramer2026. Messrs. Novak and Richard J. Byrne have been nominated for election for a term expiring in 2017; and Lee S. Hillman and Thomas J. Gahan have been nominated for election for a term expiring in 2018. None of Messrs. Schaney, Katcher, Kramer or HillmanRoyce are not being proposed for election pursuant to any agreement or understanding between either the Adviser or BSPMessrs. Novak and Royce and the Company. Messrs. Byrne and Gahan are being proposed for election to fill the vacancies created by the resignations of Messrs. Cohen and Royce pursuant to the terms of the purchase agreement entered into in connection with the Transaction.Company or any other person or entity.
A stockholder can vote for or withhold his, her or herits vote from any nominee.OXSQ’s Board nominees. In the absence of instructions to the contrary, it is the intention of the persons named as proxies to vote such proxy “FOR” the election of each of the OXSQ’s nominees named below.above. If anyeither of theOXSQ’s Board nominees should decline or be unable to serve as a director, it is intended that the proxy will vote for the election of such person as is nominated by the Board of Directors as a replacement. TheOXSQ’s Board of Directors has no reason to believe that the personsperson named above will be unable or unwilling to serve.
The electionThis proposal is considered a “non-routine matter” per the NYSE rules and instructions; accordingly, brokers cannot vote on this proposal unless they have received voting instructions from the beneficial owner of a director requires aBroker Securities.
A plurality of all the votes cast either in person or by proxy at the Special Meeting (i.e., the director nominees receiving the greatest numbera meeting of votes cast for each of the director positions being voted upon). Each share entitledstockholders duly called and at which a quorum is present shall be sufficient to vote may be voted for as many persons as there are directors to be elected. However, stockholderselect a director. Stockholders may not cumulate their votes. If you vote “Withhold Authority”“Withhold” with respect to aeither director nominee, your shares will not be voted with respect to the person indicated. Because directors are elected by a pluralityAbstentions and Broker Non-Votes, if any, will not be included in determining the number of all votes cast abstentionsand, as a result, will have no effect on this proposal. This proposal is considered a “non-routine matter”; accordingly, brokers cannot vote on this proposal unless they have received voting instructions from the beneficial owner of the election of directors.Broker Securities.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THEMR. STEVEN P. NOVAK AND MR. CHARLES M. ROYCE, OXSQ’S NOMINEES NAMED IN THIS PROXY STATEMENT.
Information aboutAbout the Nominees and Directors
As described below under “Committees of the Board of Directors — Nominating and Corporate Governance Committee,” the Board of Directors has identified certain desired talents and experience for director nominees. Each of our directors and the director nominees has demonstrated high character and integrity; the knowledge, skills and experience necessary to be able to offer advice and guidance to our management in light of prevailing business conditions; familiarity with national and international business
matters; experience with accounting rules and practices; appreciation of the relationship of our business to the changing needs of society; and the desire to balancecomplement the considerable benefit of continuity with the periodic injectionbenefit of fresh perspective.diverse view points and perspectives. Each of our directors and the director nominees also has sufficient time available to devote to the affairs of the Company, is able to work with the other members of the Board of Directors and contribute to the success of the Company and can represent the long-termlong-term interests of the Company’s stockholders as a whole. Our directors and the director nominees have been selected such that the Board of Directors represents a diverse range of backgrounds and experience. All of our directors are encouraged to attend the Annual Meeting.
Certain information, as of the Record Date, with respect to the Company’s director nominees for election at the SpecialAnnual Meeting, as well as each of the current directors, is set forth below, including their names, ages, a brief description of their recent business experience, including present occupations and employment, certain directorships that each person holds, the year in which each person became a director of the Company, and a discussion of their particular experience, qualifications, attributes or skills that lead us to conclude, as of the Record Date, that such individual should serve as a director of the Company, in light of the Company’s business and structure.
The business address of the nominees and the directors listed below is 8 Sound Shore Drive, Suite 255, Greenwich, Connecticut 06830. The business address
7
Table of the nominees listed below is 9 West 57th Street, Suite 4920, New York, New York 10019.
Messrs. Schaney and Katcher are not interested persons of the Company as defined in the 1940 Act.
Contents
Interested Director
Mr. KramerRoyce is not an interested person of the Company as defined in the Investment Company Act of 1940, Act.as amended (the “1940 Act”) due to his ownership of a minority, non-controlling interest in the Company’s investment adviser, Oxford Square Management.
Name and Year First Elected Director | Age | Background Information | ||
Charles M. Royce (2003) | 83 | |||
Mr. |
Mr. Byrne will be an interested person of the Company as defined in the 1940 Act due to his positions as the Chief Executive Officer and President of the Company.
Mr. Hillman is not an interested person of the Company as defined in the 1940 Act.
Mr. Gahan will be an interested person of the Company as defined in the 1940 Act due to his position as chief executive officer of the Adviser.
Independent Director — Term Expiring 2016Non-interested DirectorMs. Pankopf is not an interested person of the Company as defined in the 1940 Act. Ms. Pankopf has been a member of the Company’s Board of Directors since 2003 and will continue to serve in this role after the closing of the Transaction.
Prior to the closing of the Transaction, Mr. Royce has been an interested person of the Company as defined in the 1940 Act due to his ownership of a minority, non-controlling interest in the Adviser. Simultaneous with the closing of the Transaction, Mr. Royce will resign from the Company’s Board of Directors. The Board of Directors has nominated Richard J. Byrne for approval by the stockholders to fill the vacancy created by Mr. Royce’s resignation from the Company’s Board of Directors. Mr. Byrne will be an interested person of the Company as defined in the 1940 Act due to his expected positions as Chief Executive Officer and President of the Company.
Mr. Novak is not an interested person as defined in the 1940 Act. Mr. Novak has been a member of the Company’s Board of Directors since 2003 and will continue to serve in this role after the closing of the Transaction.
Name and Year First | Age | Background Information | ||
Steven P. Novak (2003) | 75 | Mr. Novak has extensive capital markets, venture, and public company investing experience. He held senior positions at Harris BankCorp, Sanford C Bernstein & Company (now Alliance Bernstein), Forstmann-Leff & Associates, and Unterberg Harris, before founding Palladio Capital Management LLC, where he managed an investment partnership. In addition to his work in finance, Mr. Novak founded Mederi Therapeutics, where he served as Chairman and CFO, to acquire the assets of Curon Medical. Mr. Novak also founded Quisk, Inc., a software firm that built a next-generation mobile payments platform and served as its Chairman and CEO. Mr. Novak currently serves as |
8
Interested Director
Prior to the closing of the Transaction, Mr. Cohen has beenis an interested person of the Company as defined in the 1940 Act due to his position as Chief Executive Officer of the Company and Oxford Square Management, the Adviser,Company’s investment adviser, and as the managing member of BDC Partners,Oxford Funds, the managing member of TICCOxford Square Management. Upon the closing of the Transaction, Mr. Cohen will resign from the Company’s Board of Directors and from his position as the Chief Executive Officer of the Company. The Board of Directors has nominated Thomas J. Gahan for approval by the stockholders to fill the vacancy created by the resignation of Mr. Cohen as a member of the Company’s Board of Directors. Mr. Gahan will serve as the Chairman of the Company’s Board of Directors and will be an interested person of the Company as defined in the 1940 Act due to his position as chief executive officer of the Adviser.
Name and Year First | Age | Background Information | ||
Jonathan H. Cohen (2003) | 58 | Mr. Cohen has served as Chief Executive Officer of both |
9
Independent Director
Mr. O’BrienStelljes is not an interested person as defined in the 1940 Act. Mr. O’Brien has been a member of the Company’s Board of Directors since 2003 and will continue to serve in this role after the closing of the Transaction.
Name and Year First | Age | Background Information | ||
George Stelljes III (2016) | 61 | Mr. |
Current Director — Term Expiring 2025
Mr. Osherow is not an interested person as defined in the 1940 Act.
Name and Year First Elected Director | Age | Background Information | ||
Barry A. Osherow (2021) | 50 | Mr. Osherow is currently a |
10
The following information, as of the Record Date, pertains to the individuals who have served as the Company’sour executive officers until the consummation of the Transaction, but who haveare not been directors of the Company. Certain of the Company’s executive officers may serve as directors of, or on the board of managers of, certain of its portfolio companies. Messrs. Rosenthal, Cummins and Rubin will resign from their positions with the Company and the Adviser upon the closing of the Transaction.
Name | Age | Background Information | ||
Saul B. Rosenthal | 54 | |||
Saul B. | ||||
Bruce L. Rubin | 63 | Mr. |
11
The following information pertains to the individuals who will serve as the Company’s executive officers upon the closingTable of the Transaction, but who will not be directors of the Company. Certain of the Company’s executive officers may serve as directors of, or on the board of managers of, certain of its portfolio companies.Contents
Name | Age | Background Information | ||
Gerald Cummins | 68 | |||
Mr. Cummins has served as the Company’s Chief Compliance Officer since June 2015 pursuant to an agreement between the Company and ACA Group, a compliance consulting firm. Mr. Cummins also currently serves as the Chief Compliance Officer of Oxford Square Management, Oxford Lane Capital Corp., Oxford Lane Management, LLC, Oxford Funds LLC, and since 2018, Oxford Gate Management, LLC. Mr. Cummins has served as the | ||||
In accordance with rules of the NASDAQ Stock Market, our Board of Directors annually determines each director’s independence. We do not consider a director independent unless our Board of Directors has determined that he or she has no material relationship with us. We monitor the relationships of our directors and officers through a questionnaire each director completes no less frequently than annually and updates periodically as information provided in the most recent questionnaire changes.
In order to evaluate the materiality of any such relationship, our Board of Directors uses the definition of director independence set forth in the rules promulgated by the NASDAQ Stock Market. Rule 5605(a)(2) provides that a director of a BDC, shall be considered to be independent if he or she is not an “interested person” of TICC, as defined in Section 2(a)(19) of the 1940 Act.
The Board of Directors has determined that each of the directors is independent and has no relationship with the Company, except as a director and stockholder, with the exception of Thomas J. Gahan, as a result of his position a member of the Adviser’s investment committee upon consummation of the Transaction, and Richard J. Byrne, as a result of his position as Chief Executive Officer and President of the Company upon consummation of the Transaction.
Our Board of Directors monitors and performs an oversight role with respect to the business and affairs of TICC,OXSQ, including with respect to investment practices and performance, compliance with regulatory requirements and the services, expenses and performance of service providers to TICC.OXSQ. Among other things, our Board of Directors approves the appointment of our investment adviser and officers, reviews and monitors the services and activities performed by our investment adviser and executive officers, and approves the engagement, and reviews the performance, of our independent registered public accounting firm.
Under our bylaws, our Board of Directors may designate a Chairman to preside over the meetings of our Board of Directors and meetings of the stockholders and to perform such other duties as may be assigned to him by our Board of Directors. We do not have a fixed policyMr. Novak serves as to whether the Chairman of our Board of Directors should be an independent director and believe that we should maintain the flexibility to select the Chairman and reorganize the leadership structure, from time to time, based on the criteria that is in the best interests of TICC and its stockholders at such times.
Upon the consummation of the Transaction, Mr. Gahan will serve as the Chairman of the Board of Directors. Mr. Gahan will beNovak is not an “interested person” of TICCOXSQ as defined in Section 2(a)(19) of the 1940 Act as a result of his position as a member of the Adviser’s investment committee.Act. We believe that Mr. Gahan’s extensive knowledgeNovak’s financial expertise from his experience as a financial manager and varied roles on the boards of the financial services industryboth publicly-traded and the investment valuation process qualifyprivately-held companies qualifies him to serve as the Chairman of our Board of Directors.Directors and provides our Board with particular technology-related knowledge and the perspective of a knowledgeable corporate leader. We believe that we are best served through this existing leadership structure, as Mr. Gahan’s relationship with our investment adviser will provide an effective bridge and encourageNovak encourages an open dialogue between management and our Board of Directors, ensuring that these groups act with a common purpose.purpose with respect to the Company.
Our Board of Directors does not currently have a designated lead independent director. We are aware of the potential conflicts that may arise when a non-independent director is Chairman of our Board of Directors, but believe these potential conflicts are offset by our strong corporate governance policies. Our corporate governance policies include regular meetings of the independent directors who are not “interested persons” of the Company, as defined in the 1940 Act (the “Independent Directors”), in executive session without the presence of interested directors and management, the establishment of an Audit Committee, Valuation Committee, Nominating and Corporate Governance Committee, and Compensation CommitteesCommittee, all of which are comprised solely of independent directorsIndependent Directors, and the appointment of a Chief Compliance Officer, with whom the independent directorsIndependent Directors meet regularly without the presence of interested directors and other members of management, for administering our compliance policies and procedures.
We recognize that different board leadership structures are appropriate for companies in different situations. We re-examine our corporate governance policies on an ongoing basis to ensure that they continue to meet our needs.
Our Board of Directors performs its risk oversight function primarily through (i) its four standing committees, which report to the entire Board of Directors and are comprised solely of Non-interestedIndependent Directors, and (ii) active monitoring of our Chief Compliance Officer and our compliance policies and procedures.
12
As described below in more detail under “Committees of the Board of Directors,” the Audit Committee, the Valuation Committee, the Nominating and Corporate Governance Committee and the Compensation Committee assist the Board of Directors in fulfilling its risk oversight responsibilities. The Audit Committee’s risk oversight responsibilities include overseeing our accounting and financial reporting processes, our systems of internal controls regarding finance and accounting, and audits of our financial statements. The Valuation Committee’s risk oversight responsibilities include establishing guidelines and making recommendations to our Board of Directors regarding the valuation of our loans and investments. The Nominating and Corporate Governance Committee’s risk oversight responsibilities include selecting, researching and nominating directors for election by our stockholders, developing and recommending to the Board of Directors a set of corporate governance principles and overseeing the evaluation of our Board of Directors and our management. The Compensation Committee’s risk oversight responsibilities include reviewing and recommending to our Board of Directors for approval the Investment Advisory Agreement (as defined below) and the Administration Agreement (as defined below), and, to the extent that we may compensate our executive officers directly in the future, reviewing and evaluating the compensation of our executive officers and making recommendations to the boardBoard of directorsDirectors regarding such compensation.
Our Board of Directors also performs its risk oversight responsibilities with the assistance of our Chief Compliance Officer. Our Board of Directors annually reviews a written report from the Chief Compliance Officer discussing the adequacy and effectiveness of the compliance policies and procedures of TICCOXSQ and its service providers. The Chief Compliance Officer’s annual report addresses at a minimum (i) the operation of the compliance policies and procedures of TICCOXSQ and its service providers since the last report; (ii) any material changes to such policies and procedures since the last report; (iii) any recommendations for material changes to such policies and procedures as a result of the Chief Compliance Officer’s annual review; and (iv) any compliance matter that has occurred since the date of the last report about which our Board of Directors would reasonably need to know to oversee our compliance activities and risks. In addition, the Chief Compliance Officer meets separately in executive session with the independent directorsIndependent Directors at least quarterly.
We believe that our Board of Directors’ role in risk oversight is effective, and appropriate given the extensive regulation to which we are already subject to as a business development company.BDC. As a business development company,BDC, we are required to comply with certain regulatory requirements that control the levels of risk in our business and operations. For example, our ability to incur indebtedness is limited such that our asset coverage must equal at least 200%150% immediately after each time we incur indebtedness, we generally have tocannot invest in assets that are not “qualifying assets” unless at least 70% of our totalgross assets inconsist of “qualifying assets” immediately prior to such investment, and we are limited in our abilitynot generally permitted to invest, subject to certain exceptions, in any portfolio company in which one of our affiliates currently has an investment.
We recognize that different board roles in risk oversight are appropriate for companies in different situations. We re-examinere-examine the manner in which our Board of Directors administers its oversight function on an ongoing basis to ensure that they continue to meet our needs.
Transactions with Related Persons
We have entered into the Investment Advisory Agreement with Oxford Square Management (the “Investment Advisory Agreement”). Oxford Square Management is controlled by Oxford Funds, its managing member. In addition to Oxford Funds, Oxford Square Management is owned by Charles M. Royce, a member of our Board of Directors, who holds a minority, non-controlling interest in Oxford Square Management as the non-managing member. Oxford Funds, as the managing member of Oxford Square Management, manages the business and internal affairs of Oxford Square Management. In addition, Oxford Funds provides us with office facilities and administrative services pursuant to the Administration Agreement (the “Administration Agreement”).
Messrs. Cohen and Rosenthal also currently serve as Chief Executive Officer and President, respectively, at Oxford Gate Management, LLC, the investment adviser to the Oxford Gate Funds and Oxford Bridge II, LLC. Oxford Funds is the managing member of Oxford Gate Management, LLC. In addition, Bruce L. Rubin serves as the Chief Financial Officer, and Gerald Cummins serves as the Chief Compliance Officer, of Oxford Gate Management, LLC.
Messrs. Cohen and Rosenthal currently serve as Chief Executive Officer and President, respectively, of Oxford Lane Capital Corp., a closed-end management investment company that invests primarily in equity and junior debt tranches of collateralized loan obligation vehicles, and its investment adviser, Oxford Lane Management,
13
LLC. Oxford Funds provides Oxford Lane Capital Corp. with office facilities and administrative services pursuant to an administration agreement and also serves as the managing member of Oxford Lane Management, LLC. In addition, Bruce L. Rubin serves as the Chief Financial Officer, Treasurer and Corporate Secretary of Oxford Lane Capital Corp. and Chief Financial Officer and Treasurer of Oxford Lane Management, LLC, and Mr. Cummins serves as the Chief Compliance Officer of Oxford Lane Capital Corp. and Oxford Lane Management, LLC.
Messrs. Cohen and Rosenthal currently serve as Chief Executive Officer and President, respectively, of Oxford Park Income Fund, Inc., a tender-offer closed-end management investment company that invests primarily in equity and junior debt tranches of collateralized loan obligation vehicles, and its investment adviser, Oxford Park Management, LLC. Oxford Funds provides Oxford Park Income Fund, Inc. with office facilities and administrative services pursuant to an administration agreement and also serves as the managing member of Oxford Park Management, LLC. In addition, Bruce L. Rubin serves as the Chief Financial Officer, Treasurer and Corporate Secretary of Oxford Park Income Fund, Inc. and Chief Financial Officer and Treasurer of Oxford Park Management, LLC, and Mr. Cummins serves as the Chief Compliance Officer of Oxford Park Income Fund, Inc. and Oxford Park Management, LLC.
As a result, certain conflicts of interest may arise with respect to the management of our portfolio by Messrs. Cohen and Rosenthal on the one hand, and the obligations of Messrs. Cohen and Rosenthal to manage Oxford Lane Capital Corp., Oxford Park Income Fund, Inc., Oxford Bridge II, LLC and the Oxford Gate Funds, respectively, on the other hand.
Oxford Square Management, Oxford Lane Management, LLC, Oxford Park Management, LLC and Oxford Gate Management, LLC are subject to a written policy with respect to the allocation of investment opportunities among the Company, Oxford Lane Capital Corp., Oxford Park Income Fund, Inc., Oxford Bridge II, LLC and the Oxford Gate Funds. Where investments are suitable for more than one entity, the allocation policy generally provides that, depending on size and subject to current and anticipated cash availability, the absolute size of the investment as well as its relative size compared to the total assets of each entity, current and anticipated weighted average costs of capital, among other factors, an investment amount will be determined by the adviser to each entity. If the investment opportunity is sufficient for each entity to receive its investment amount, then each entity receives the investment amount; otherwise, the investment amount is reduced pro rata. On June 14, 2017, the SEC issued an order permitting the Company and certain of its affiliates to complete negotiated co-investment transactions in portfolio companies, subject to certain conditions (the “Order”). Subject to satisfaction of certain conditions to the Order, the Company and certain of its affiliates are now permitted, together with any future business development companies (“BDCs”), registered closed-end funds and certain private funds, each of whose investment adviser is the Company’s investment adviser or an investment adviser controlling, controlled by, or under common control with the Company’s investment adviser, to co-invest in negotiated investment opportunities where doing so would otherwise be prohibited under the 1940 Act, providing the Company’s stockholders with access to a broader array of investment opportunities. Pursuant to the Order, we are permitted to co-invest in such investment opportunities with our affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of our Independent Directors make certain conclusions in connection with a co-investment transaction, including, but not limited to, that (1) the terms of the potential co-investment transaction, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned, and (2) the potential co-investment transaction is consistent with the interests of our stockholders and is consistent with our then-current investment objective and strategies.
In the ordinary course of business, we may enter into transactions with portfolio companies that may be considered related party transactions. In order to ensure that we do not engage in any prohibited transactions with any persons affiliated with us, we have implemented certain policies and procedures whereby our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio investment, us, companies controlled by us and our employees and directors. We will not enter into any agreements unless and until we are satisfied that doing so will not raise concerns under the 1940 Act or, if such concerns exist, we have taken appropriate actions to seek board review and approval or exemptive relief for such transaction. Our Board of Directors reviews these procedures on an annual basis.
14
Investment Advisory Agreement Subject to Annual Approval by the Independent Directors
OXSQ’s stockholders benefit from a robust annual review of the Investment Advisory Agreement with Oxford Square Management under the 1940 Act. In accordance with the requirements of the 1940 Act, the Board of Directors, including its Independent Directors, review on an annual basis whether the terms of the Investment Advisory Agreement between OXSQ and Oxford Square Management are fair in light of the services provided by Oxford Square Management. In other words, the Board considers whether the terms are fair and reasonable in relation to the services rendered.
Our Board of Directors determined, at a meeting held in-person on April 25, 2023, to re-approve the Investment Advisory Agreement, dated March 9, 2016. In its consideration of the re-approval of the Investment Advisory Agreement, the Board of Directors focused on information it had received relating to, among other things:
• The nature, extent and quality of advisory and other services provided by Oxford Square Management, including information about the investment performance of the Company relative to its stated objectives and in comparison to the performance of the Company’s peer group and relevant market indices, and concluded that such advisory and other services are satisfactory and the Company’s investment performance is reasonable;
• The experience and qualifications of the personnel providing such advisory and other services, including information about the backgrounds of the investment personnel, the allocation of responsibilities among such personnel and the process by which investment decisions are made, and concluded that the investment personnel of Oxford Square Management have extensive experience and are well qualified to provide advisory and other services to the Company;
• The current fee structure, the existence of any fee waivers, and the Company’s anticipated expense ratios in relation to those of other investment companies having comparable investment policies and limitations, and concluded that the current fee structure is reasonable;
• The advisory fees charged by Oxford Square Management to the Company and comparative data regarding the advisory fees charged by other investment advisers to BDCs with similar investment objectives, and concluded that the advisory fees charged by Oxford Square Management to the Company are reasonable;
• The direct and indirect costs, including for personnel and office facilities, that are incurred by Oxford Square Management and its affiliates in performing services for the Company and the basis of determining and allocating these costs, and concluded that the direct and indirect costs, including the allocation of such costs, are reasonable;
• Possible economies of scale arising from the Company’s size and/or anticipated growth, and the extent to which such economies of scale are reflected in the advisory fees charged by Oxford Square Management to the Company, and concluded that some economies of scale may be possible in the future;
• Other possible benefits to Oxford Square Management and its affiliates arising from their relationships with the Company, and concluded that any such other benefits were not material to Oxford Square Management and its affiliates; and
• Possible alternative fee structures or bases for determining fees, and concluded that the Company’s current fee structure and bases for determining fees are satisfactory.
Based on the information reviewed and the discussions detailed above, the Board of Directors, including all of the Independent Directors, concluded that fees payable to Oxford Square Management pursuant to the Investment Advisory Agreement were reasonable, and comparable to the fees paid by other BDCs with similar investment objectives, in relation to the services to be provided, and the Board of Directors unanimously approved the re-approval of the Investment Advisory Agreement. The Board of Directors did not assign relative weights to the above factors or the other factors considered by it. Individual members of the Board of Directors may have given different weights to different factors.
15
Review, Approval or Ratification of Transactions with Related Persons
We have also adopted a Code of Business Conduct and Ethics which applies to, among others, our senior officers, including our Chief Executive Officer and Chief Financial Officer, as well as all of our officers, directors and employees. Our Code of Business Conduct and Ethics requires that all employees and directors avoid any conflict, or the appearance of a conflict, between an individual’s personal interests and our interests. Pursuant to our Code of Business Conduct and Ethics, each employee and director must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict, to our Chief Compliance Officer. Our Audit Committee is charged with approving any waivers under our Code of Business Conduct and Ethics. As required by the NASDAQ Global Select Market corporate governance listing standards, the Audit Committee of our Board of Directors is also required to review and approve any transactions with related parties (as such term is defined in Item 404 of Regulation S-K).
16
Corporate Governance Documents
Our Code of Business Conduct and Ethics and the charters of the Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee are available on our website at www.oxfordsquarecapital.com and are also available to any stockholder who requests them by writing to Oxford Square Capital Corp., c/o Bruce L. Rubin, Corporate Secretary, 8 Sound Shore Drive, Suite 255, Greenwich, Connecticut 06830.
In accordance with the rules of the NASDAQ Stock Market, our Board of Directors annually determines each director’s independence. We do not consider a director independent unless our Board of Directors has determined that he or she has no material relationship with us. We monitor the relationships of our directors and officers through a questionnaire each director completes no less frequently than annually and updates periodically as information provided in the most recent questionnaire changes.
In order to evaluate the materiality of any such relationship, our Board of Directors uses the definition of director independence set forth in the rules promulgated by the NASDAQ Stock Market. Rule 5605(a)(2) provides that a director of a BDC, shall be considered to be independent if he or she is not an “interested person” of OXSQ, as defined in Section 2(a)(19) of the 1940 Act.
The Board of Directors has determined that each of the directors is independent and has no relationship with us, except as a director and stockholder, with the exception of Jonathan H. Cohen, as a result of his position as our Chief Executive Officer, and Charles M. Royce, as a result of his ownership of a minority, non-controlling interest in our investment adviser, Oxford Square Management.
The Company’s directors perform an evaluation and assessment, no less frequently than annually, of the effectiveness of the Board of Directors and its committees.
Communication with the Board of Directors
Stockholders with questions about OXSQ are encouraged to contact our Investor Relations Department. However, if stockholders believe that their questions have not been addressed, they may communicate with our Board of Directors by sending their communications to Oxford Square Capital Corp., c/o Bruce L. Rubin, Corporate Secretary, 8 Sound Shore Drive, Suite 255, Greenwich, Connecticut 06830. All stockholder communications received in this manner will be delivered to one or more members of our Board of Directors, as appropriate.
Board Diversity
On August 6, 2021, the SEC approved amendments to the Listing Rules of NASDAQ related to board diversity. New Listing Rule 5606 (the “Board Diversity Disclosure Rule”) requires each NASDAQ-listed company, subject to certain exceptions, to provide statistical information about the company’s board of directors, in a uniform format, related to each director’s self-identified gender, race, and self-identification as LGBTQ+. In the matrix below, we have provided the statistical information required by the Board Diversity Disclosure Rule.
17
BOARD DIVERSITY MATRIX (as of July 14, 2023) | ||||||||
Total Number of Directors | 5 | |||||||
Female | Male | Non-Binary | Did Not | |||||
Part I: Gender Identity | ||||||||
Directors | — | — | — | 5 | ||||
Part II: Demographic Background | ||||||||
African American or Black | — | — | — | — | ||||
Alaskan Native or Native American | — | — | — | — | ||||
Asian | — | — | — | — | ||||
Hispanic or Latinx | — | — | — | — | ||||
Native Hawaiian or Pacific Islander | — | — | — | — | ||||
White | — | — | — | — | ||||
Two or More Races or Ethnicities | — | — | — | — | ||||
LGBTQ+ | — | — | — | — | ||||
Did Not Disclose Demographic Background | — | — | — | 5 |
With respect to Nasdaq Rule 5605(f) (the “Rule”), we note that we are unable to determine if the Board consists of at least one person that satisfies the Rule because members of the Company’s Board were selected for service without consideration given to their gender, race, ethnicity, or LGBTQ+ status. Consistent with our belief that an inquiry into those areas would represent a violation of those prospective Board members’ privacy, questions regarding those subjects were not asked during the recruitment or interview process and did not form a basis for the selection of the Company’s Board members.
Hedging Transactions
Our Code of Ethics and Insider Trading Policy prohibits any Covered Persons (as defined below) from engaging in hedging or monetization transactions with respect to our securities, except for covered call writing. Any Covered Person wishing to enter into a covered call transaction with respect to our securities must first pre-clear the proposed transaction with our Chief Compliance Officer. A “Covered Person” means any our directors, officers or employees (including a temporary employee), or of any of our affiliates or subsidiaries, including our investment adviser, our administrator and any other persons designated by our Chief Compliance Officer.
Committees of the Board of Directors
Our Board of Directors has established ana standing Audit Committee, a Valuation Committee, a Nominating and Corporate Governance Committee, and a Compensation Committee. During 2014,2022, our Board of Directors held fivefour Board meetings, fivefour Audit Committee meetings, four Valuation Committee meetings, and one Nominating and Corporate Governance meeting. Themeeting, and one Compensation Committee was established in April 2014. Allmeeting. Each of the incumbent directors attended at least 75% of the aggregate number of meetings of our Board of Directors and of the respective committees on which they served.he served during the last fiscal year and while he served as a director. We require each director to make a diligent effort to attend all Board of Directors and committee meetings, as well as each annual meeting of stockholders. Upon closing of the Transaction, the Board of Directors will determine the composition of the committees.
The Audit Committee operates pursuant to a charter approved by our Board, copy of Directors.which is available on our website at www.oxfordsquarecapital.com. The charter sets forth the responsibilities of the Audit Committee. The Audit Committee’s responsibilities include recommending the selection of our independent registered public accounting firm, reviewing with such independent registered public accounting firm the planning, scope and results of their audit of our financial statements, pre-approvingpre-approving the fees for services performed, reviewing with the independent registered public accounting firm the adequacy of internal control systems, reviewing our annual financial statements and periodic filings, and receiving the audit reports covering our financial statements. The Audit Committee is presently composed of three persons: Messrs. Osherow, Novak, and O’Brien and Ms. Pankopf,Stelljes, all of whom are considered independent under the rules promulgated by the NASDAQ Global Stock Market. After the closing of the Transaction, our Board of Directors may expand the membership on the Audit Committee. Our Board of Directors has determined that each of Mr. Novak and Mr. Stelljes is an “audit committee financial expert” as that term is defined under Item 407 of Regulation S-KS-K of the Securities
18
Exchange Act of 1934. Mr.Act. Messrs. Osherow, Novak, meetsand Stelljes each meet the current independence and experience requirements of Rule 10A-310A-3 of the Exchange Act and, in addition, isare each not an “interested person” of TICCOXSQ as defined in Section 2(a)(19) of the 1940 Act. Mr. NovakOsherow currently serves as Chairman of the Audit Committee. The Audit Committee met on five occasions during 2014.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee operates pursuant to a charter approved by our Board of Directors.Directors, a copy of which is available on our website at www.oxfordsquarecapital.com. The charter sets forth the responsibilities of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee’s responsibilities include selecting, researching and nominating directors for election by our stockholders, selecting nominees to fill vacancies on the Board of Directors or a committee thereof, monitoring and making recommendations to the Board of Directors on matters of Company policies and practices relating to corporate governance and overseeing the evaluation of the Board of Directors and our management. The Nominating and Corporate Governance Committee is presently composed of three persons: Messrs. Novak, Osherow and O’Brien and Ms. Pankopf,Stelljes, all of whom are considered independent under the rules promulgated by the NASDAQ Global Stock Market. After the closing of the Transaction, our Board of Directors may expand the membership on the Nominating and Corporate Governance Committee. Mr. O’BrienStelljes currently serves as Chairman of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee met on one occasion during 2014.
The Nominating and Corporate Governance Committee does not currently have a written policy with regard to nominees recommended by our stockholders. The absence of such a policy does not mean, however, that a stockholder recommendation would not have been considered had one been received.
The Nominating and Corporate Governance Committee will consider qualified director nominees recommended by stockholders when such recommendations are submitted in accordance with our bylaws and any applicable law, rule or regulation regarding director nominations. When submitting a nomination for consideration, a stockholder must provide certain information that would be required under applicable SEC rules, including the following minimum information for each director nominee: full name, age and address; principal occupation during the past five years; current directorships on publicly held companies and investment companies; number of shares of Company common stock owned, if any; and, a written consent of the individual to stand for election if nominated by our Board of Directors and to serve if elected by our stockholders.
In evaluating director nominees, the members of the Nominating and Corporate Governance Committee consider the following factors:
• the appropriate size and composition of our Board of Directors;
• whether or not the person is an “interested person” of TICCOXSQ as defined in Section 2(a)(19) of the 1940 Act;
• familiarity with national and international business matters;
• experience with accounting rules and practices;
• the desire to balancecomplement the considerable benefit of continuity with the periodic injectionbenefit of the fresh perspective provided by new members;diverse viewpoints and
• all applicable laws, rules, regulations, and listing standards.
The Nominating and Corporate Governance Committee’s goal is to assemble a Board of Directors that brings to TICCOXSQ a variety of perspectives and skills derived from high quality business and professional experience.
Other than the foregoing, there are no stated minimum criteria for director nominees, although the members of the Nominating and Corporate Governance Committee may also consider such other factors as they may deem are in the best interests of TICCOXSQ and its stockholders. The Nominating and Corporate Governance Committee also believes it appropriate for certain key members of our management to participate as members of the Board of Directors.
19
The members of the Nominating and Corporate Governance Committee identify nominees by first evaluating the current members of the Board of Directors willing to continue in service. Current members of the Board of Directors with skills and experience that are relevant to our business and who are willing to continue in service are considered for re-nomination,re-nomination, balancing the value of continuity of service by existing members of the Board of Directors with that of obtaining a new perspective.the benefits of diverse perspectives. If any member of the Board of Directors does not wish to continue in service or if the Board of Directors decides not to re-nominatere-nominate a member for re-election,re-election, the independent membersIndependent Directors of the Board of Directors identify the desired skills and experience of a new nominee in light of the criteria above. The entire Board of Directors is polled for suggestions as to individuals meeting the aforementioned criteria. Research may also be performed to identify qualified individuals. To date, neither the Board of Directors nor the Nominating and Corporate Governance Committee has engaged third parties to identify or evaluate or assist in identifying potential nominees although each reserves the right in the future to retain a third party-party search firm, if necessary.
The Nominating and Corporate Governance Committee has not adopted a formal policy with regard to the consideration of diversity in identifying director nominees. In determining whether to recommend a director nominee,Board, including the Nominating and Corporate Governance Committee, considersunanimously recommended that Steven P. Novak and discusses diversity, among other factors, with a view towardCharles M. Royce be nominated for election to the needs of our Board of Directors as a whole. The Nominating and Corporate Governance Committee generally conceptualizes diversity expansively to include, without limitation, concepts such as race, gender, national origin, differences of viewpoint, professional experience, education, skill and other qualities that contribute to our Board of Directors, when identifying and recommending director nominees. The Nominating and Corporate Governance Committee believes that the inclusion of diversity as one of many factors considered in selecting director nominees is consistent with the Nominating and Corporate Governance Committee’s goal of creating a Board of Directors that best serves the needs of TICC and the interest of its stockholders.Board.
The Valuation Committee establishes guidelines and makes recommendations to our Board of Directors regarding the valuation of our loans and investments. Our portfolio investments are generally not publicly traded securities. As a result, there is no readily determinable market value for these securities. Thus, as required by the 1940 Act for such securities, we value these securities at fair value as determined in good faith by our Board of Directors based upon the recommendation of the Valuation Committee. The Valuation Committee is presently composed of three persons: Messrs. Novak, Osherow and O’Brien and Ms. Pankopf,Stelljes, all of whom are considered independent under the rules of the NASDAQ Global Select Market and are not “interested persons” of TICC Capital Corp.OXSQ as that term is defined in Section 2(a)(19) of the 1940 Act. After
the closing of the Transaction, our Board of Directors may expand the membership on the Valuation Committee. Mr. NovakStelljes currently serves as Chairman of the Valuation Committee. The Valuation Committee met on four occasions during 2014.
The Compensation Committee operates pursuant to a charter approved by our boardBoard, a copy of directors.which is available on our website at www.oxfordsquarecapital.com. The charter sets forth the responsibilities of the Compensation Committee. The Compensation Committee is responsible for annually reviewing and recommending for approval to our board of directorsBoard the Investment Advisory Agreement and the Administration Agreement. The Compensation Committee is also responsible for reviewing and approving the compensation of the Independent Directors, including the Chairman of the Board. In addition, although we do not directly compensate our executive officers currently, to the extent that we do so in the future, the Compensation Committee would also be responsible for reviewing and evaluating their compensation and making recommendations to the board of directorsBoard regarding their compensation. Lastly, the Compensation Committee would produce a report on our executive compensation practices and policies for inclusion in our proxy statement if required by applicable proxy rules and regulations and, if applicable, make recommendations to the board of directorsBoard on our executive compensation practices and policies. The Compensation Committee has the authority to engage compensation consultants and to delegate their duties and responsibilities to a member or to a subcommittee of the Compensation Committee. The Compensation Committee is presently composed of three persons: Ms. Pankopf and Messrs. Novak, Osherow and O’Brien,Stelljes, all of whom are considered independent under the rules of the NASDAQ Global Select Market and are not “interested persons” of TICCOxford Square Capital Corp. as that term is defined in Section 2(a)(19) of the 1940 Act. After the closing of the Transaction, our Board of Directors may expand the membership on the Compensation Committee. Tonia PankopfMr. Novak serves as Chairman of the Compensation Committee. The Compensation Committee was established in 2014 and did not meet during 2014.
Stockholders with questions about TICC are encouraged to contact our Investor Relations Department. However, if stockholders believe that their questions have not been addressed, they may communicate with our Board of Directors by sending their communications to TICC Capital Corp., c/o Corporate Secretary, 8 Sound Shore Drive, Suite 255, Greenwich, Connecticut 06830. All stockholder communications received in this manner will be delivered to one or more members of our Board of Directors, as appropriate.
We have adopted a codeCode of ethicsBusiness Conduct and Ethics (“Code of Ethics) which applies to, among others, our senior officers, including our Chief Executive Officer and our Chief Financial Officer, as well as every officer, director and employee of TICC.OXSQ. Our codeCode of Ethics can be accessed via our website athttp://www.ticc.comwww.oxfordsquarecapital.com. We intend to disclose amendments to or waivers from a required provision of the codeCode of Ethics on Form 8-K.8-K. We intend to disclose any substantive amendments to, or waivers from, this Code of Ethics within four business days of the waiver or amendment through a posting on our website.
20
Compensation of DirectorsExecutive Officers
None of our officers receive direct compensation from OXSQ. As a result, we do not engage any compensation consultants. Mr. Cohen, our Chief Executive Officer, and Mr. Rosenthal, our President and Chief Operating Officer, through their ownership interest in Oxford Funds, the managing member of Oxford Square Management, are entitled to a portion of any profits earned by Oxford Square Management, which includes any fees payable to Oxford Square Management under the terms of our Investment Advisory Agreement, less expenses incurred by Oxford Square Management in performing its services under the Investment Advisory Agreement. Messrs. Cohen and Rosenthal do not receive any additional compensation from Oxford Square Management in connection with the management of our portfolio.
The following table sets forth compensation of our directorsChief Financial Officer and Corporate Secretary is paid by our administrator, Oxford Funds, subject to reimbursement by us of an allocable portion of such compensation for services rendered by our Chief Financial Officer and Corporate Secretary to OXSQ. The allocable portion of such compensation that is reimbursed to Oxford Funds by us is based on an estimate of the time spent by our Chief Financial Officer and Corporate Secretary and other administrative personnel in performing their respective duties for us in accordance with the Administration Agreement. For the fiscal year ended December 31, 2014.2022, we accrued approximately $916,000 for the allocable portion of compensation expenses incurred by Oxford Funds on our behalf for our Chief Financial Officer, our Treasurer and Controller, and other administrative support personnel, pursuant to our Administration Agreement with Oxford Funds. Mr. Cummins is a Director of ACA Group, LLC, and performs his functions as our Chief Compliance Officer under the terms of an agreement between us and ACA Group, LLC. For the fiscal year ended December 31, 2022, we accrued approximately $120,000 for the fees paid to ACA Group, LLC.
Name | Fees Earned or Paid in Cash(1) | All Other Compensation(2) | Total | |||||||||
Interested Directors | ||||||||||||
Jonathan H. Cohen | — | — | — | |||||||||
Charles M. Royce | — | — | — | |||||||||
Independent Directors | ||||||||||||
Steven P. Novak | $ | 114,500 | — | $ | 114,500 | |||||||
G. Peter O’Brien | $ | 102,500 | — | $ | 102,500 | |||||||
Tonia L. Pankopf | $ | 101,750 | — | $ | 101,750 |
TheEach independent directors receivedirector receives an annual fee of $75,000.$90,000. The Chairman of the Board receives an additional annual fee of $30,000 for his service as Chairman of the Board. In addition, the independent directors receive $2,000$4,000 plus reimbursement of reasonable out-of-pocketout-of-pocket expenses incurred in connection with attending each Board of Directors meeting, $1,500 plus reimbursement of reasonable out-of-pocketout-of-pocket expenses incurred in connection with attending each Valuation Committee meeting, $1,500 plus reimbursement of reasonable out of-pocketof-pocket expenses incurred in connection with attending each Audit Committee meeting, $1,000 plus reimbursement of reasonable out of-pocket-of-pocket expenses incurred in connection with attending each Nominating and Corporate Governance Committee meeting and $1,000 plus reimbursement of reasonable out of-pocket-of-pocket expenses incurred in connection with attending each Compensation Committee meeting. The Chairman of the Audit Committee also receives an additional annual fee of $7,500$10,000 for his service as chair of the Audit Committee. The Chairman of the Valuation Committee also receives an additional annual fee of $7,500 for his service as chair of the Valuation Committee. The Chairman of the Nominating and Corporate Governance Committee also receives an additional annual fee of $3,000$5,000 for his service as chair of the Nominating and Corporate Governance Committee. The Chairman of the Compensation Committee also receives an additional annual fee of $3,000$5,000 for herhis service as chair of the Compensation Committee. No compensation was paid to directors who are interested persons of TICCOXSQ as defined in the 1940 Act.
NoneThe following table sets forth compensation of our officers receive directdirectors for the year ended December 31, 2022.
Name | Fees Earned or | All Other | Total | |||||
Interested Directors |
|
| ||||||
Jonathan H. Cohen | $ | — | — | $ | — | |||
Charles M. Royce | $ | — | — | $ | — | |||
Independent Directors |
|
| ||||||
Steven P. Novak | $ | 160,571 | — | $ | 160,571 | |||
Barry Osherow | $ | 124,429 | — | $ | 124,429 | |||
George Stelljes III | $ | 132,500 | — | $ | 132,500 |
____________
(1) For a discussion of the independent directors’ compensation, from TICC. As a result, wesee above.
(2) We do not engagemaintain a stock or option plan, non-equity incentive plan or pension plan for our directors.
21
PROPOSAL 2: RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 2023 FISCAL YEAR
The Audit Committee, which is comprised solely of the Independent Directors, and the Board of Directors have selected PricewaterhouseCoopers LLP to serve as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2023. This selection is subject to ratification or rejection by the stockholders of the Company.
PricewaterhouseCoopers LLP has advised us that neither the firm nor any compensation consultants. Priorpresent member or associate of it has any material financial interest, direct or indirect, in the Company or its affiliates. It is expected that a representative of PricewaterhouseCoopers LLP will be present at the Annual Meeting and will have an opportunity to make a statement if he or she chooses and will be available to answer questions.
For the Transaction, Mr. Cohen, as our Chief Executive Officer,years ended December 31, 2022 and Mr. Rosenthal, as our President and Chief Operating Officer, through their ownership interest in BDC Partners,December 31, 2021, the managing memberCompany incurred the following fees for services provided by PricewaterhouseCoopers LLP, including expenses:
Fiscal Year Ended | Fiscal Year Ended | |||||
Audit Fees | $ | 895,000 | $ | 984,350 | ||
Audit-Related Fees |
| — |
| — | ||
Tax Fees |
| — |
| — | ||
All Other Fees |
| — |
| — | ||
Total Fees: | $ | 895,000 | $ | 984,350 |
Audit Fees. Audit fees consist of TICC Management, were entitled to a portion of any profits earned by TICC Management, which included any fees payable to TICC Management underbilled for professional services rendered for the termsaudit of our Existing Investment Advisory Agreement, less expenses incurredyear-end financial statements, including reviews of interim financial statements, and services that are normally provided by TICC Management in performing its services under the Existing Investment Advisory Agreement. Messrs. Cohen and Rosenthal did not receive any additional compensation from TICC ManagementPricewaterhouseCoopers LLP in connection with statutory and regulatory filings and services provided in connection with securities offerings.
Audit-Related Fees. Audit-related services consist of fees billed for assurance and related services that are reasonably related to the managementperformance of the audit or review of our portfolio. Uponfinancial 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 Fees. Tax fees consist of fees billed for professional services for tax compliance. These services include assistance regarding federal, state, and local tax compliance.
All Other Fees. All other fees would include fees for products and services other than the consummationservices reported above.
The affirmative vote of a majority of the Transaction, Mr. Byrnevotes cast at the Annual Meeting in person or by proxy is required to approve this proposal. Abstentions will not receive any direct compensationbe included in determining the number of votes cast and, as a result, will have no effect on this proposal. This proposal is considered a “routine matter”; accordingly, brokers have discretionary authority to vote on this proposal without receiving voting instructions from TICC duethe beneficial owner of the shares.
Unless marked to his position as President of BSP, and insteadthe contrary, the shares represented by the enclosed proxy card will be compensated directly by BSP.
Prior to the Transaction, the compensation of our Chief Financial Officer and Corporate Secretary, was paid by our administrator, BDC Partners, subject to reimbursement by us of an allocable portion of such compensationvoted for services rendered by our Chief Financial Officer and Corporate Secretary to TICC. The allocable portion of such compensation that was reimbursed to BDC Partners by us was based on an estimateratification of the time spentappointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the year ending December 31, 2023.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE COMPANY FOR THE YEAR ENDING DECEMBER31, 2023.
22
The Audit Committee of the Board of Directors of Oxford Square Capital Corp. operates under a written charter adopted by our Chief Financial Officerthe Board of Directors. The Audit Committee is currently composed of Messrs. Osherow, Novak, and Corporate SecretaryStelljes.
Management is responsible for the Company’s internal controls and other administrative personnel inthe financial reporting process. The Company’s independent registered public accounting firm is responsible for performing their respective duties for usan independent audit of the Company’s financial statements in accordance with the Administration Agreement. Forstandards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and expressing an opinion on the conformity of those audited 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 the Company’s independent registered public accounting firm.
Audit Firm Selection/Ratification
At least annually, the Audit Committee reviews the Company’s independent registered public accounting firm to decide whether to retain such firm on behalf of the Company. PricewaterhouseCoopers LLP has been the Company’s independent registered public accounting firm since 2003.
When conducting its latest review of PricewaterhouseCoopers LLP, the Audit Committee actively engaged with PricewaterhouseCoopers LLP’s engagement partners and considered, among other factors:
• the professional qualifications of PricewaterhouseCoopers LLP and that of the lead audit partner and other key engagement members relative to the current and ongoing needs of the Company;
• PricewaterhouseCoopers LLP’s historical and recent performance on the Company’s audits, including the extent and quality of PricewaterhouseCoopers LLP’s communications with the Audit Committee related thereto;
• senior management’s assessment of PricewaterhouseCoopers LLP’s performance;
• the appropriateness of PricewaterhouseCoopers LLP’s fees relative to both efficiency and audit quality;
• PricewaterhouseCoopers LLP’s independence policies and processes for maintaining its independence;
• PCAOB audit quality inspection reports on PricewaterhouseCoopers LLP;
• PricewaterhouseCoopers LLP’s tenure as the Company’s independent registered public accounting firm and its related depth of understanding of the Company’s businesses, operations and systems and the Company’s accounting policies and practices;
• PricewaterhouseCoopers LLP’s professional integrity and objectivity;
• the relative benefits, challenges, overall advisability and potential impact of selecting a different independent registered public accounting firm.
As a result of this evaluation, the Audit Committee approved the appointment of PricewaterhouseCoopers LLP for the 2023 fiscal year, subject to stockholder ratification.
Audit Engagement Partner Selection
Under SEC rules and PricewaterhouseCoopers LLP’s practice, the lead engagement audit partner is required to change every five years, and a current lead audit partner was appointed in 2021. The Audit Committee interviewed the incoming lead audit partner and considered her professional qualifications in light of the Company’s needs. The Audit Committee has approved the incoming lead audit partner.
23
Pre-Approval Policy
The Audit Committee has established a pre-approval policy that describes the permitted audit, audit-related, tax and other services to be provided by PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm. The policy requires that the Audit Committee pre-approve all services performed by the independent auditor in order to assure that the provision of such service does not impair the auditor’s independence.
Any requests for audit, audit-related, tax and other services that have not received general pre-approval must be submitted to the Audit Committee for specific pre-approval, irrespective of the amount, and cannot commence until such approval has been granted. Normally, pre-approval is provided at regularly scheduled meetings of the Audit Committee. However, the Audit Committee may delegate pre-approval authority 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 Committee at its next scheduled meeting. The Audit Committee does not delegate its responsibilities to pre-approve services performed by the independent registered public accounting firm to management.
During the year ended December 31, 2014, we accrued approximately $1.9 million for2022, the allocable portionAudit Committee pre-approved 100% of compensation expenses incurred by BDC Partners on our behalf for our Chief Financial Officernon-audit services in accordance with the pre-approval policy described above.
Review with Management
The Audit Committee has reviewed the audited financial statements and Corporate Secretary, our Treasurermet and Controller, our accounting support staff, and other administrative support staff, pursuant to our Administration Agreementheld discussions with BDC Partners. Gerald Cummins, our Chief Compliance Officer priormanagement regarding the audited financial statements. Management has represented to the Transaction, is a Director of Alaric Compliance Services, LLC,Audit Committee that the Company’s financial statements were prepared in accordance with accounting principles generally accepted in the United States.
Review and performs his functions as our Chief Compliance Officer underDiscussion with Independent Registered Public Accounting Firm
The Audit Committee has discussed with PricewaterhouseCoopers LLP, the terms of an agreement between us and Alaric Compliance Services, LLC.
UponCompany’s independent registered public accounting firm, matters required to be discussed by the consummationapplicable requirements of the Transaction,PCAOB. The Audit Committee received and reviewed the Existing Administration Agreement will be terminatedwritten disclosures and the New Administrator will provide administrative services toletter from the Company pursuant to the New Administration Agreement. As a result, employees of BSP or its affiliates will replace the Company’s current Chief Financial Officer and Corporate Secretary, Treasurer and Controller, Chief Compliance Officer,independent registered public accounting support staff, and other administrative support staff. All such individuals will be compensated directly by BSP and notfirm required by the Company, however, the BSP will be reimbursed by the company for its allocable portion of such compensation for services rendered to the Company. As a result, the Company will ultimately be responsible for paying such portionapplicable requirements of the compensationPCAOB and has discussed with the auditors the auditors’ independence. The Audit Committee has also considered the compatibility of these officers.non-audit services with the auditors’ independence.
The following is a summaryDuring 2022, the Audit Committee met with members of certain relationships and related transactions that exist prior to the closing of the Transaction.
We have entered into the Existing Investment Advisory Agreement with TICC Management. TICC Management is controlled by BDC Partners, its managing member. Charles M. Royce holds a minority, non-controlling interest in TICC Management. BDC Partners, as the managing member of TICC Management, manages the business and internal affairs of TICC Management. In addition, BDC Partners provides us with office facilities and administrative services pursuant to the Administration Agreement. Jonathan H. Cohen, our Chief Executive Officer, as well as a director, is the managing member of and controls BDC Partners. Saul B. Rosenthal, our President and Chief Operating Officer, is also the President and Chief Operating Officer of TICC Management and a member of BDC Partners.
Charles M. Royce, a directorsenior management and the non-executive Chairman of our Board of Directors, has a minority, non-controlling interest in TICC Management, but he does not take part inindependent registered public accounting firm to review the management or participate in the operations of TICC Management; however, Mr. Royce has agreed to make himself or certain other portfolio managers available to TICC Management to provide certain consulting services without compensation.
Further, Messrs. Cohen and Rosenthal currently serve as Chief Executive Officer and President, respectively, of Oxford Lane Capital Corp., a non-diversified closed-end management investment company that invests primarily in leveraged corporate loans, and its investment adviser, Oxford Lane Management. BDC Partners provides Oxford Lane Capital Corp. with office facilities and administrative services pursuant to an administration agreement and also serves as the managing member of Oxford Lane Management. In addition, Bruce L. Rubin, the Chief Financial Officer and Secretary of TICC Management, BDC Partners and TICC, serves in the same capacities for Oxford Lane Capital Corp. and Oxford Lane Management.
BDC Partners has adopted a written policy with respect to the allocation of investment opportunities between us and Oxford Lane Capital Corp. in view of the potential conflicts of interest raisedcertifications provided by the relationships described above.
In the ordinary course of business, we may enter into transactions with portfolio companies that may be considered related party transactions. In order to ensure that we do not engage in any prohibited transactions with any persons affiliated with us, we have implemented certain policies and procedures whereby our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio investment, us, companies controlled by us and our employees and directors. We will not enter into any agreements unless and until we are satisfied that doing so will not raise concerns under the 1940 Act or, if such concerns exist, we have taken appropriate actions to seek board review and approval or exemptive relief for such transaction. Our Board of Directors reviews these procedures on an annual basis.
We have also adopted a Code of Ethics which applies to, among others, our senior officers, including our Chief Executive Officer and Chief Financial Officer as well as allunder the Sarbanes-Oxley Act of our2002 (“Sarbanes-Oxley”), the rules and regulations of the SEC and the overall certification process. At these meetings, company officers directorsreviewed each of the Sarbanes-Oxley certification requirements concerning internal control over financial reporting and employees. Our Codeany fraud, whether or not material, involving management or other employees with a significant role in internal control over financial reporting.
Conclusion
Based on the Audit Committee’s discussion with management and the independent registered public accounting firm, the Audit Committee’s review of Ethics requires that all employeesthe audited financial statements, the representations of management and directors avoid any conflict, or the appearancereport of a conflict, between an individual’s personal interests and our interests. Pursuantthe independent registered public accounting firm to our Code of Ethics, each employee and director must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict, to our Chief Compliance Officer. Our Audit Committee is charged with approving any waivers under our Code of Ethics. As required by the NASDAQ Global Select Market corporate governance listing standards, the Audit Committee, of our Board of Directors is also required to review and approve any transactions with related parties (as such term is defined in Item 404 of Regulation S-K).
The following is a summary of certain relationships and related transactionsthe Audit Committee recommended that may exist after the closing of the Transaction.
We will enter into the New Advisory Agreement with the Adviser upon the closing of the Transaction. The Adviser will be a subsidiary of BSP. In addition, an affiliate of BSP will provide us with office facilities and administrative services pursuant to the New Administration Agreement. Thomas J. Gahan, the incoming Chairman of the Board of Directors isinclude the Chief Executive Officer of BSP. Richard J. Byrne, our incoming Chief Executive Officer and President, isaudited financial statements in the President BSP.
Upon consummationAnnual Report of the Transaction, the Company will rely on BSP to assist in identifying investment opportunities and making investment recommendations to the Adviser. BSP, its affiliates (including Providence) and their respective members, partners, officers and employees will devote as much of their time to our activities as they deem necessary and appropriate. BSP and its affiliates are not restricted from forming additional investment funds, from entering into other investment advisory relationships or from engaging in other business activities, even though such activities may be in competition with the Company and/or may involve substantial time and resources of BSP or the Adviser. Also, in connection with such business activities, BSP and its affiliates may have existing business relationships or access to material, non-public information that may prevent it from recommending investment opportunities that would otherwise fit within the Company’s investment objectives. All of these factors could be viewed as creating a conflict of interest in that the time and effort of the members of BSP, its affiliates and their officers and employees will not be devoted exclusively to the Company’s business but will be allocated between the Company and the management of the assets of other advisees of BSP and its affiliates.
BSP also acts as sub-advisor to Griffin-Benefit Street Partners BDC Corp., a business development company that is externally-managed by Griffin Capital BDC Advisor, LLC. Griffin-Benefit Street Partners BDC Corp. invests in secured debt (including senior secured, unitranche and second lien debt) and unsecured debt (including senior unsecured and subordinated debt), as well as equity and equity related securities issued by private U.S. companies primarily in the middle market or public U.S. companies with market equity capitalization of less than $250 million. As of June 30, 2015, Griffin-Benefit Street Partners BDC Corp. had total assets of $4.77 million. The investment sub-advisory agreement between BSP and Griffin Capital BDC Advisor, LLC, the adviser to Griffin-Benefit Street Partners BDC Corp. provides that BSP will receive a portion of all management and incentive fees payable to the Griffin Capital BDC Advisor, LLC under the investment advisory agreement. On an annualized basis, BSP will be paid 50% of the fees payable to the Griffin Capital BDC Advisor, LLC.
Griffin Capital BDC Advisor, LLC is entitled to fees in two parts: a base management fee and an incentive fee. The base management fee is calculated at an annual rate of 2.0% of Griffin-Benefit Street Partners BDC Corp.’s gross assets, excluding cash and cash equivalents, and is payable quarterly in arrears. The incentive fee is based on Griffin-Benefit Street Partners BDC Corp.’s performance and consists of two parts. The first part, referred to as the incentive fee on income, is calculated and payable quarterly in arrears. The incentive fee on income equals 20% of the “pre-incentive fee net investment income” for the immediately preceding quarter and is subject to a hurdle rate equal to 1.75% per quarter, or 7.0% annually. The second part of the incentive fee, referred to as the incentive fee on capital gains, is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment advisory agreement). This fee equals 20% of Griffin-Benefit Street Partners BDC Corp.’s incentive fee on capital gains, which equals Griffin-Benefit Street Partners BDC Corp.’s realized capital gains on a cumulative basis from inception, calculated as of the end of the applicable period, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gains incentive fees.
In June 2015, BSP and its affiliates, including Griffin-Benefit Street Partners BDC Corp. and Griffin Capital BDC Advisor, LLC, received co-investment relief from the SEC, which will allow the Company to co-invest with other BSP affiliated funds that have similar or overlapping investment objectives and strategies, including Griffin-Benefit Street Partners BDC Corp., in investment opportunities generated at BSP. BSP has developed an allocation policy regarding co-investment by affiliated funds in view of the potential conflicts of interest raised by the relationships described above.
In the ordinary course of business, we may enter into transactions with portfolio companies that may be considered related party transactions. In order to ensure that we do not engage in any prohibited transactions with any persons affiliated with us, we have implemented certain policies and procedures whereby our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio investment, us, companies controlled by us and our employees and directors. We will not enter into any agreements unless and until we are satisfied that doing so will not raise concerns under the 1940 Act or, if such concerns exist, we have taken appropriate actions to seek board review and approval or exemptive relief for such transaction. Our Board of Directors reviews these procedures on an annual basis.
We have also adopted a Code of Ethics which applies to, among others, our senior officers, including our Chief Executive Officer and Chief Financial Officer, as well as all of our officers, directors and employees. Our Code of Ethics requires that all employees and directors avoid any conflict, or the appearance of a conflict, between an individual’s personal interests and our interests. Pursuant to our Code of Ethics, each employee and director must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict, to our Chief Compliance Officer. Our Audit Committee is charged with approving any waivers under our Code of Ethics. As required by the NASDAQ Global Select Market corporate governance listing standards, the Audit Committee of our Board of Directors is also required to review and approve any transactions with related parties (as such term is defined in Item 404 of Regulation S-K).
Pursuant to Section 16(a) of the Exchange Act, the Company’s directors and executive officers, and any persons holding more than 10% of its common stock, are required to report their beneficial ownership and any changes therein to the SEC and the Company. Specific due dates for those reports have been established, and the Company is required to report herein any failure to file such reports by those due dates. Based solely upon review of Forms 3, 4 and 5 (and amendments thereto) furnished to the Company during or in respect of the year ended December 31, 20142022 for filing with the SEC. The Audit Committee also recommended the selection of PricewaterhouseCoopers LLP to serve as the independent registered public accounting firm for the year ending December 31, 2023.
Respectfully Submitted,
The Audit Committee
Barry A. Osherow
Steven P. Novak
George Stelljes III
The material contained in the foregoing Audit Committee Report is not “soliciting material,” is not deemed “filed” with the SEC, and written representations from certain reporting persons, we believe that the following directoris not to be incorporated by reference into any filing of the Company failed one time to file on a timely basis a report required by Section 16(a) ofunder the Exchange Act, duringwhether made before or after the year ended December 31, 2014: G. Peter O’Brien. We believe that all other Section 16(a) filing requirements applicable to our directors, executive officers,date hereof and 10.0% or greater shareholders were satisfied in a timely manner during the year ended December 31, 2014.
The Company’s stockholders may be asked to consider and act upon one or more adjournments of the Special Meeting, if necessary or appropriate, to solicit additional proxies in favorirrespective of any general incorporation language in any such filing.
24
Any stockholder proposals submitted pursuant to the SEC’s Rule 14a-8 for inclusion in the Company’s proxy statement and form of proxy for the 2024 annual meeting of stockholders must be received by the Company on or allbefore March 16, 2024. Such proposals must also comply with the requirements as to form and substance established by the SEC if such proposals are to be included in the Company’s proxy statement and form of proxy. The submission of a proposal does not guarantee its inclusion in the other proposals set forth in thisCompany’s proxy statement.
If a quorum is not presentstatement or presentation at the Special Meeting,2024 annual meeting of stockholders. Any such proposal should be mailed to: Oxford Square Capital Corp., c/o Bruce L. Rubin, Corporate Secretary, 8 Sound Shore Drive, Suite 255, Greenwich, Connecticut 06830.
Stockholder proposals or director nominations for the Company’s stockholders may be asked to vote on the proposal to adjourn the Special Meeting to solicit additional proxies. If a quorum is present at the Special Meeting, but there are not sufficient votes at the time of the Special Meeting to approve the proposals, the Company’s stockholders may also be asked to vote on the proposal to approve the adjournment of the Special Meeting to permit further solicitation of proxies in favor of the other proposals.
If the adjournment proposal is submitted for a vote at the Special Meeting, and if the Company’s stockholders vote to approve the adjournment proposal, the meeting will be adjourned to enable the Board of Directors to solicit additional proxies in favor of the proposals. If the adjournment proposal is approved, and the Special Meeting is adjourned, the Board of Directors will use the additional time to solicit additional proxies in favor of any of the proposalsCompany to be presented at the Special Meeting, including2024 annual meeting of stockholders, other than stockholder proposals submitted pursuant to the solicitation of proxies from stockholders that have previously voted againstSEC’s Rule 14a-8, must be delivered to, or mailed and received at, the relevant proposal.
The Board of Directors believes that, if the number of sharesprincipal executive offices of the Company’s common stock voting in favor of anyCompany not less than 90 days nor more than 120 days prior to the first anniversary of the date of mailing of the notice for the preceding year’s annual meeting of stockholders. For the 2024 annual meeting of stockholders, the Company must receive such proposals presented atand nominations between March 16, 2024 and April 15, 2024. If the Special Meetingdate of the mailing of the notice for the 2024 annual meeting is insufficientadvanced or delayed by more than 30 days from the first anniversary of the date of mailing of the notice for the preceding year’s annual meeting, notice by the stockholder to approve a proposal, itbe timely must be so delivered not earlier than the 120th day prior to the date of mailing of the notice for the 2024 annual meeting and not later than the close of business on the later of the 90th day prior to the date of mailing of the notice for the 2024 annual meeting or the 10th day following the day on which public announcement of the date of mailing of the notice for such meeting is first made. Proposals must also comply with the other requirements contained in the best interests of the Company’s stockholders to enable the Board of Directors, for a limited period of time, to continue to seek to obtain a sufficient number of additional votes in favor of the proposal. Any signed proxies receivedbylaws, including supporting documentation and other information. Proxies solicited by the Company in which nowill confer discretionary voting instructions are provided on such matter will be voted in favorauthority with respect to these proposals, subject to SEC rules governing the exercise of an adjournment in these circumstances. The time and place of the adjourned meeting will be announced at the time the adjournment is taken. Any adjournment of the Special Meeting for the purpose of soliciting additional proxies will allow the Company’s stockholders who have already sent in their proxies to revoke them at any time prior to their use at the Special Meeting as adjourned or postponed.this authority.
Our Board unanimously recommends a vote “FOR” this proposal.Other Business
The Board of Directors knows of no other business to be presented for action at the SpecialAnnual Meeting. If any matters do come before the SpecialAnnual Meeting on which action can properly be taken, it is intended that the proxies shall vote in accordance with the judgment of the person or persons exercising the authority conferred by the proxy at the SpecialAnnual Meeting. The submission of a proposal does not guarantee its inclusion in the Company’s proxy statement or presentation at the SpecialAnnual Meeting, unless certain securities law requirements are met.
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT AND THE MOST RECENT QUARTERLY REPORT SUCCEEDING THE ANNUAL REPORT, IF ANY, TO ANY STOCKHOLDER UPON REQUEST. REQUESTS SHOULD BE DIRECTED TO:Delivery of Proxy Materials
It may be the case that only one copy of the 2023 Proxy Statement, the 2022 Annual Report, or Notice of Annual Meeting will be delivered to two or more stockholders of record of OXSQ who share an address, unless we have received contrary instructions from one or more of such stockholders. We will deliver promptly, upon request, a separate copy of any of these documents to stockholders of record of OXSQ at a shared address to which a single copy of such documents was delivered. Stockholders and All Others Call Toll-Free: (877) 566-1922Email: info@okapipartners.comwho wish to receive a separate copy of any of these documents, or to receive a single copy of such documents if multiple copies were delivered, now or in the future, should submit their request by calling us at (203) 983-5275 or by writing to Oxford Square Capital Corp., c/o Bruce L. Rubin, Corporate Secretary, 8 Sound Shore Drive, Suite 255, Greenwich, Connecticut 06830.
We are required to file with or submit to the SEC annual, quarterly and current periodic reports, proxy statements, and other information meeting the informational requirements of the Exchange Act. You may inspect and copy these reports, proxy statements and other information at the Public Reference Room of the SEC at 100 F Street, NE, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet sitea website that contains reports, proxy and information statements, and other information filed electronically by us with the SEC, which are available on the SEC’s website athttp://www.sec.gov. Copies of these reports, proxy and information statements and other information may be obtained, after paying a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing to the SEC’s Public Reference Section, Washington, D.C. 20549. This information will also be available free of charge by contacting us at TICCOxford Square Capital Corp., 8 Sound Shore Drive, Suite 255, Greenwich, CT 06830 or by telephone at (203) 983-5275 or983-5275. Copies of our proxy statements, annual, quarterly, and periodic reports, and prospectuses are also available on our website athttp://www.ticc.comwww.oxfordsquarecapital.com.
The Company expects that the 2016 Annual Meeting25
For any proposal that is not submitted for inclusion in next year’s proxy statement (as described in the preceding paragraph) but is instead sought to be presented directly at the 2016 Annual Meeting of Stockholders, SEC rules permit management to vote proxies in its discretion if (a) the Company receives notice of the proposal before the close of business on March 20, 2016 and advises stockholders in next year’s proxy statement about the nature of the matter and how management intends to vote on such matter, or (b) does not receive notice of the proposal prior to the close of business on March 20, 2016.
Notices of intention to present proposals at the 2016 Annual Meeting of Stockholders should be addressed to Corporate Secretary, TICC Capital Corp., 8 Sound Shore Drive, Suite 255, Greenwich, Connecticut 06830. The Company reserves the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements.
You are cordially invited to attend the SpecialAnnual Meeting of stockholders in person. Whether or not you plan to attend the SpecialAnnual Meeting, you are requested to complete, date, signvote in accordance with the voting instructions in the Notice of Internet Availability of Proxy Materials, or by requesting hard copy proxy materials from us and promptly return the accompanyingreturning a proxy card in the enclosed postage-paid envelope, or to vote by telephone or through the Internet.
By Order of the Board of DirectorsSaul B. RosenthalPresident
Greenwich, ConnecticutSeptember 3, 2015
We are committed to protecting your privacy. This privacy notice, which is required by federal law, explains privacy policies of TICC Capital Corp. and its affiliated companies. This notice supersedes any other privacy noticeso that you may have received from TICCbe represented at the Annual Meeting.
By Order of the Board of Directors, | ||
Greenwich, Connecticut |
26
Your privacy is very important to us. This Privacy Notice sets forth Oxford Square Capital Corp.,’s (“our,” “we,” or “Oxford Square”) policies with respect to personal information we collect and its terms apply bothprocess (“Notice”). This Notice applies to investors, prospective investors, and former investors in Oxford Square, as well as to visitors of our current stockholderswebsite and to former stockholders as well.applicants for employment with us.
1. Data Controller
To the extent the GDPR applies, and for other data privacy laws with a data controller requirement, Oxford Square is the data controller that directs the purposes for which personal information is processed.
Oxford Square is located at: 8 Sound Shore Drive — Suite 255, Greenwich, CT 06830
We will safeguard, according to strict standards of security and confidentiality, all information we receive about you. With regard to this information, we maintain procedural safeguards that comply with federal standards.
Our goal is to limit the collection and use of information about you. When you purchase shares of our common stock, our transfer agent collects personal information about you only for the purposes and in the manner set forth below, which describes the steps we take to ensure the processing of personal information is in compliance with applicable data protection law, including California’s Consumer Privacy Act (“CCPA”) and the European Union’s General Data Protection Regulation (“GDPR”).
2. Information we collect
We collect personal information from a number of sources, including:
when you or your representative provide, or provided, it to us in correspondence (including when you open an investment) and conversations | publicly available and accessible directories and sources | |
when recruitment agencies provide us with information for prospective employees | governmental and competent regulatory authorities to whom we have regulatory obligations | |
when you have made or make transactions or provide transaction documentation | fraud prevention and detection agencies and organizations | |
through the use of cookies and similar technologies |
The types of personal information we collect and share depend on the product or service you have with us. The personal information we collect, the basis of processing and the purposes of processing are detailed below. For EU/UK data subjects, we have a lawful basis under the GDPR for each of our processing activities, as set out below:
What we collect | Why do we collect it | Lawful Basis | ||
Personal details such as name, address, postal and email address, phone number, Social Security Number or other Tax ID Number, driver’s license number, employment information, and financial information | To open and administer your investment | As is necessary to enter into or perform our contractual obligations to you (for example, to administer, manage and set up your investment, or to facilitate the transfer of funds, and administering and facilitating any other transaction). | ||
It is also necessary to comply with our legal and regulatory obligations, for example, to verify the identity and address of our investors, maintain statutory registers, comply with the U.S. Office of Foreign Assets Control list and other governmental sanction lists, to prevent and detect fraud, to maintain the integrity and security of our systems, to carry out audit checks and conduct surveillance and investigations, comply with lawful requests. |
27
What we collect | Why do we collect it | Lawful Basis | ||
It is also in our legitimate interest to manage our risk and monitor, improve our relationship with you, and keep you up to date on our latest offerings and investment opportunities, which are not outweighed by the privacy impacts on you. If you are an applicant for employment, we use this information to set up and administer your application. It is necessary to take steps at your request prior to entering into a contract (e.g. to respond to your queries and to provide you with further information; or where you have submitted an application to become our customer and to verify your creditworthiness. | ||||
Name, email address, postal address | To provide you with, and inform you about, our investment products and services and keep you updated. | It is in our legitimate interest to keep you up to date on our latest offerings and investment opportunities. |
For California Residents
The personal information about you that we collect includes information within the below categories of data. These categories also represent the categories of personal information that we have collected over the past 12 months. We collect this information as per section 2 above, and we share this information as per section 3 below.
Note that the categories listed below are defined by California state law. Inclusion of a category in the list below indicates only that, depending on the services and products we provide you, we may collect some information within that category. It does not necessarily mean that we collect all information listed in a particular category for all of our customers.
Categories of data collected | Purpose of collection | |
Identifiers such as a real name, alias, postal address, unique personal identifier, online identifier, internet protocol address, email address, account name, social security number, driver’s license number, passport number, or other similar identifiers | As is necessary to perform our obligations to you to administer, manage and set up your investment and to facilitate the transfer of funds, and administering and facilitating any other transactions. As is necessary for compliance with an applicable legal or regulatory obligation which we are subject to verify the identity and addresses of our investors (and, if applicable their beneficial owners) comply with requests from regulatory, governmental, tax and law enforcement authorities maintain statutory registers prevent and detect fraud comply with the U.S Office of Foreign Assets Control list and other governmental sanctions lists carry out audit checks and conduct surveillance and investigations. As is necessary to address or investigate any complaints, claims, proceedings or disputes; to provide you with, and inform you about, our investment products and services monitor and improve our relationships with investors; send direct marketing communications to you; manage our risk and operations; comply with our audit requirements assist with internal compliance with our policies and process ensure appropriate group management and governance; to maintain the integrity and security of our systems; enable any actual or proposed assignee or transferee, participant or sub-participant of the partnership’s or our |
28
Categories of data collected | Purpose of collection | |
rights or obligations to evaluate proposed transactions analyze and manage commercial risks; monitor communications to/from us using our systems facilitate business asset transactions involving the Company or related investment vehicles. If you are an applicant for employment, we use this information to set up and administer your application. | ||
Information that identifies, relates to, describes, or is capable of being associated with, a particular individual, including, but not limited to, your name, signature, social security number, physical characteristics or description, address, telephone number, passport number, driver’s license or state identification card number, insurance policy number, education, employment, employment history, bank account number, credit card number, debit card number, wire transfer information, or any other financial information, such as the amount invested and details of the investment made, medical information, or health insurance information. | As is necessary to perform our obligations to you to administer, manage and set up your investment and to facilitate the transfer of funds, and administering and facilitating any other transactions. As is necessary for compliance with an applicable legal or regulatory obligation which we are subject to verify the identity and addresses of our investors (and, if applicable their beneficial owners) comply with requests from regulatory, governmental, tax and law enforcement authorities maintain statutory registers prevent and detect fraud comply with the U.S Office of Foreign Assets Control list and other governmental sanctions lists carry out audit checks and conduct surveillance and investigations. | |
Commercial information, including records of your transactions with us and banking information | As is necessary to perform our obligations to you to administer, manage and set up your investment and to facilitate the transfer of funds, and administering and facilitating any other transactions. As is necessary for compliance with an applicable legal or regulatory obligation which we are subject to verify the identity and addresses of our investors (and, if applicable their beneficial owners) comply with requests from regulatory, governmental, tax and law enforcement authorities maintain statutory registers prevent and detect fraud comply with the U.S Office of Foreign Assets Control list and other governmental sanctions lists carry out audit checks and conduct surveillance and investigations. | |
Professional or employment-related information | As is necessary to perform our obligations to you to administer, manage and set up your investment. If you are an applicant for employment, we use this information to set up and administer your application. | |
Characteristics of classes protected under federal or California law, including: familial status, disability, sex, national origin, religion, color, race, sexual orientation, gender identity and gender expression, marital status, veteran status, medical condition, ancestry, source of income, age, or genetic information. | If you are an applicant for employment, we use this information to set up and administer your application, including to provide any reasonable accommodations you may require. | |
Internet or other electronic network activity information, including, but not limited to, browsing history, search history, and information regarding a consumer’s interaction with an Internet Web site, application, or advertisement. | To optimize performance of our websites, provide products and services to our customers, and to audit our interactions with our investors and applicants for employment. It is also processed to detect security incidents, protect against malicious, deceptive, fraudulent or illegal activity, and for data analytics. It is also necessary to ensure compliance with our policies and procedures. |
29
3. Sharing your personal information
We may share your personal information with our adviser, Oxford Square Management, LLC, and to certain service providers such as our accountants, administrator, attorneys, auditors, transfer agents and brokers, in each case for our everyday business purposes, such as to facilitate the acceptance and management of your name, address, social security numberinvestment or tax identification number.
Thisaccount and our relationship with you, or as otherwise permitted by applicable law. We will take reasonably necessary steps to ensure that where personal information is shared, it is treated securely and in accordance with this Privacy Notice and applicable laws. We require our service providers to provide written assurances regarding the security and privacy protections they have in place to protect any personal information transferred or disclosed to them, as well as their compliance with our security requirements and any applicable laws and regulations.
We may also disclose the information we collect:
• If you request or authorize disclosure of the information, in each case in accordance with the agreements governing your investment;
• As required by law — for example, to cooperate with any government regulators, self-regulatory organization or law enforcement authorities;
• As otherwise permitted by law — for example, (i) to service providers who maintain, process or service our funds; (ii) in connection with the making, management or disposition of any fund investment; (iii) as otherwise necessary to effect, administer or enforce investment or fund transactions; or (iv) in connection with a sale or other transfer of our public entities. We may also share information with attorneys, accountants, other service providers and with persons otherwise acting in a representative or fiduciary capacity on behalf of investors or the funds;
• We may share information with service providers that perform marketing services on our behalf.
We do not, and will not, sell personal information to third parties, as that term is defined by California law, nor have we done so in the past 12 months. In addition, we do not share personal information with third parties for their direct marketing purposes.
4. Retention of your personal information
As a general principle, we do not retain your personal information for longer than we need it. We keep your personal information only for as long as it is required to provide our services, perform our contractual obligations, or to meet our statutory or regulatory requirements. We typically delete personal information about you 6 years after you are no longer our client.
5. Your rights regarding your personal information
Depending on where you live, your current jurisdiction and applicable data protection laws, and subject to any relevant restrictions/exemption, you may be entitled to certain rights with regards to our processing of your personal information. (Please note: depending on the country you live in and the applicable data protection laws, you may only have access to some of the rights listed below).
Your rights under the California Consumer Privacy Act (“CCPA”)
To the extent we have collected information about you that is not governed by the GLBA or FCRA, you may have the rights described below with respect to personal information about you, residents of California may have certain data protection rights under CCPA relating to certain personal information, including:
Right of access — You may be entitled to request that we disclose the categories and specific pieces of personal information that we have collected about you, the categories of sources from which the information was collected, the purposes of collecting the information, the categories of third parties we have shared the information with, and the categories of personal information that have been shared with third parties for a business purpose. | Right to “opt-out” of a sale of personal information — if our business practices change and we sell personal information you will be provided with notice and be given the opportunity to opt out of the sale of your personal information. |
30
Right of data portability — In some instances, you may have the right to receive the information about you in a portable and readily usable format. Before providing this information, we must be able to verify your identity akin to the request. | Right to have personal information erased — Subject to certain conditions, you may be entitled to request that we delete personal information that we hold. We will not delete personal information about you when the information is required to fulfill a legal obligation, is necessary to exercise or defend legal claims, or where we are required or permitted to retain the information by law. For example, we cannot delete information about you while continuing manage your account or investment. Data solely retained for data backup purposes is principally excluded. |
You may also appoint an authorized agent to make a request on your behalf.
If you chose to exercise any of these rights, to the extent that they apply, U.S. state law prohibits us from discriminating against you on the basis of choosing to exercise the privacy rights.
We may, however, charge a different rate or provide a different level of service to the extent permitted by law.
Your GDPR rights
To the extent the GDPR applies, data subjects of the EU/UK may have certain rights, including:
the right to access your personal data | the right to restrict the use of your personal data | |
the right to have incomplete or inaccurate data corrected | the right to ask us to stop processing your personal data | |
the right to require us to delete your personal data in some limited circumstances | the right to object to processing of your personal data where that processing is carried out for our legitimate interest or for direct marketing | |
the right in some circumstances to request for us to “port” your personal data in a portable, re-usable format to other organizations (where this is possible) | the right to lodge a complaint about the processing of your personal data with your local data protection authority | |
the right to request information, with respect to our practices within the 12 months prior to your request, regarding the specific personal data we have collected from you, the sources from which we obtained it, the purposes for which we collected, used and shared the personal data, and the categories of third parties with whom we have shared it |
You may exercise your right to make these requests/objections by contacting us at 1-203-983-5275 or sending us an email at privacy@oxfordfunds.com at any time if you wish to do so.
For a listing of EU Privacy Regulators, please click here: https://edpb.europa.eu/about- edpb/board/members_en
6. Submitting Requests
To exercise your rights to request information or the deletion of your personal information, please contact us at 1-203-983-5275, or send us an email at privacy@oxfordfunds.com at any time if you wish to do so.
Before providing information requests in accordance with your rights, we must be able to verify your identity. In order to verify identity, you will need to submit information about yourself, including, to the extent applicable, account information, name, government identification number, date of birth, contact information, or other personal information. We will match this information against information we have previously collected about you to verify your identity and request.
Please note that under California law, we are only obligated to respond to personal information requests from the same consumer up to two times in a 12-month period. Under both EU and California law, if an individual makes unfounded, repetitive, or excessive requests (as determined in our reasonable discretion) to access Personal Data, we may charge a fee subject to a maximum set by law.
31
If you would like to appoint an authorized agent to make a request on your behalf, you must provide the agent with written, signed permission to submit privacy right requests on your behalf, or provide a letter
from your attorney. The agent or attorney must provide this authorization at the time of request. We may require you to verify your identity with us directly before we provide any requested information to your approved agent.
Information collected for purposes of verifying your request will only be used onlyfor verification.
If you chose to exercise any of these rights, to the extent that they apply, U.S. state law prohibits us from discriminating against you on the basis of choosing to exercise your privacy rights. We may, however, charge a different rate or provide a different level of service to the extent permitted by law.
We are, of course, happy to provide any further information or explanation needed.
7. Cookies
A cookie is a small piece of data that a website asks your browser to store on your computer or mobile device. The cookie allows the website to “remember” your actions or preferences over time. Cookies are widely used in order to make websites work, or to work more efficiently, as well as to provide reporting information. Some cookies are strictly necessary for the functioning of our website.
Why do we use cookies?
We use cookies to learn how you interact with our content and to improve your experience when visiting our website. For example, some cookies remember your preferences and where you left off so that you do not have to repeatedly make these choices when you visit one of our websites.
What types of cookies do we use?
Third-party cookies belong to and are managed by other parties, such as Google Analytics. These cookies may be required to render certain forms, such as email list sign-up. Session cookies are temporary cookies that are used to remember you during the course of your visit to the website, and they expire when you close the web browser. Persistent cookies are used to remember your preferences within the website and remain on your desktop or mobile device even after you close your browser or restart your computer. We use these cookies to analyze user behavior to establish visit patterns so that we can sendimprove our website functionality for you annual reports, proxy statements and others who visit our website.
How do I reject and delete cookies?
You can choose to reject or block all or specific types of cookies for FIA by changing your browser settings. Please note that most browsers automatically accept cookies. Therefore, if you do not wish cookies to be used, you may need to actively delete or block the cookies. If you reject the use of cookies, you will still be able to visit our websites but some of the functions may not work correctly. You may also visit www.allaboutcookies.org for details on how to delete or reject cookies and for further information on cookies generally. By using our website without deleting or rejecting some or all cookies, you agree that we can place those cookies that you have not deleted or rejected on your device.
See also:
https://tools.google.com/dlpage/gaoptout
https://support.google.com/ads/answer/2662922?hl=en
8. Safeguards and Compliance
We implement and maintain security appropriate to the nature of the personal information that we collect, use, retain, transfer or otherwise process, and will take reasonable steps to protect your personal information against loss or theft, as well as from unauthorized access, disclosure, copying, use or modification, regardless of the format in which it is held. While we are committed to developing, implementing, maintaining, monitoring and updating a reasonable information security program.
32
Unfortunately, no data transmission over the Internet or any wireless network can be guaranteed to be 100% secure. Data security incidents and breaches can occur due to vulnerabilities, criminal exploits or other factors that cannot reasonably be prevented. Accordingly, while our reasonable security program is designed to manage data security risks and thus help prevent data security incidents and breaches, it cannot be assumed that the occurrence of any given incident or breach results from our failure to implement and maintain reasonable security.
9. Do Not Track Signals
Various third parties are developing or have developed signals or other mechanisms for the expression of consumer choice regarding the collection of information required by law,about an individual consumer’s online activities over time and across third-party website or online services (e.g., browser do not track signals). Currently, we do not monitor or take any action with respect to send you information we believe may be of interest to you.these signals or other mechanisms.
10. Children
We do not share such information with any non-affiliated third party except as described below.
11. Changes to this Notice
We reserve the right to modify this Notice at any time and without prior notice. Updated privacy policies will be made available through our behalf, such as record keeping, processing your trades, and mailing you information. These companies are requiredwebsites. We will comply with applicable data privacy laws when making changes to protect your information and use it solely for the purpose for which they received it.
APPENDIX A
Agreement made this day of , 2015, by and between Benefit Street Capital Corp., a Maryland corporation (the “Corporation”), and NEWCO, a Delaware limited liability company (the “Adviser”).
WHEREAS,privacy policy indicates the Corporation is a specialty finance company that has elected to become a business development company underdate when the Investment Company Act of 1940 (the “Investment Company Act”);
WHEREAS, the Adviser is an investment adviser that has registered under the Investment Advisers Act of 1940 (the “Advisers Act”); and
WHEREAS, the Corporation desires to retain the Adviser to furnish investment advisory services to the Corporation on the terms and conditions hereinafter set forth,policy was last updated and the Adviser wishes to be retained to provide such services.updates went into effect.
NOW, THEREFORE,12. Questions
If you have any questions regarding this policy or the treatment of your non-public personal information, please contact us at 203-983-5275 or send us an email at privacy@oxfordfunds.com.
Effective Date: July 23, 2020
33
OXFORD SQUARE CAPITAL CORP. PO Box 43131 Providence, RI 02940-3131 EVERY VOTE IS IMPORTANT EASY VOTING OPTIONS: VOTE ON THE INTERNET Log on to: www.proxy-direct.com or scan the QR code Follow the on-screen instructions available 24 hours VOTE BY PHONE Call 1-800-337-3503 Follow the recorded instructions available 24 hours VOTE BY MAIL Vote, sign and date this Proxy Card and return in consideration of the premises and for other good and valuable consideration, the parties hereby agree as follows:
1.Duties of the Adviser.
(a) The Corporation hereby employs the Adviser to act as the investment adviser to the Corporation and to manage the investment and reinvestment of the assets of the Corporation, subject to the supervisionpostage-paid envelope VOTE IN PERSON Attend Stockholder Meeting 8 Sound Shore Drive, Suite 255 Second floor Conference Room, Greenwich, CT 06830 on August 25, 2023 Please detach at perforation before mailing. COMMON STOCK OXFORD SQUARE CAPITAL CORP. PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON AUGUST 25, 2023 This proxy is solicited on behalf of the Board of Directors of the Corporation, for the period and upon the terms herein set forth, (i) in accordance with the investment objective, policies and restrictions that are set forth in the Corporation’s Registration Statement on Form N-2, as amended from time to time (as amended, the “Registration Statement”), (ii) in accordance with the Investment Company Act, subsequent to the time that the Corporation becomes a business development company, and (iii) during the term of this Agreement in accordance with all other applicable federal and state laws, rules and regulations, and the Corporation’s charter and by-laws. Without limiting the generality of the foregoing, the Adviser shall, during the term and subject to the provisions of this Agreement, (i) determine the composition of the portfolio of the Corporation, the nature and timing of the changes therein and the manner of implementing such changes; (ii) identify, evaluate and negotiate the structure of the investments made by the Corporation; (iii) close, monitor and service the Corporation’s investments; (iv) determine the securities and other assets that the Corporation will purchase, retain, or sell; and (v) provide the Corporation with such other investment advisory, research and related services as the Corporation may, from time to time, reasonably require for the investment of its funds. The Adviser shall have the power and authority on behalf of the Corporation to effectuate its investment decisions for the Corporation, including the execution and delivery of all documents relating to the Corporation’s investments and the placing of orders for other purchase or sale transactions on behalf of the Corporation. In the event that the Corporation determines to acquire debt financing, the Adviser will arrange for such financing on the Corporation’s behalf, subject to the oversight and approval of the Corporation’s Board of Directors.
(b) The Adviser hereby accepts such employment and agrees during the term hereof to render the services described herein for the compensation provided herein.
(c) The Adviser is hereby authorized to enter into one or more sub-advisory agreements with other investment advisers (each, a “Sub-Adviser”) pursuant to which the Adviser may obtain the services of the Sub-Adviser(s) to assist the Adviser in fulfilling its responsibilities hereunder. Specifically, the Adviser may retain a Sub-Adviser to recommend specific securities or other investments based upon the Corporation’s investment objective and policies, and work, along with the Adviser, in structuring, negotiating, arranging or
effecting the acquisition or disposition of such investments and monitoring investments on behalf of the Corporation, subject to the oversight of the Adviser and the Corporation. The Adviser or , the managing member of the Adviser, and not the Corporation, shall be responsible for any compensation payable to any Sub-Adviser. Any sub-advisory agreement entered into by the Adviser shall be in accordance with the requirements of the Investment Company Act and other applicable federal and state law.
(d) The Adviser shall for all purposes herein provided be deemed to be an independent contractor and, except as expressly provided or authorized herein, shall have no authority to act for or represent the Corporation in any way or otherwise be deemed an agent of the Corporation.
(e) The Adviser shall keep and preserve for the period required by the Investment Company Act any books and records relevant to the provision of its investment advisory services to the Corporation and shall specifically maintain all books and records with respect to the Corporation’s portfolio transactions and shall render to the Corporation’s Board of Directors such periodic and special reports as the Board may reasonably request. The Adviser agrees that all records that it maintains for the Corporation are the property of the Corporation and will surrender promptly to the Corporation any such records upon the Corporation’s request, provided that the Adviser may retain a copy of such records.
2.Corporation’s Responsibilities and Expenses Payable by the Corporation. All personnel of the Adviser, when and to the extent engaged in providing investment advisory services hereunder, and the compensation and expenses of such personnel allocable to such services, will be provided and paid for by the Adviser or by , as managing member of the Adviser, and not by the Corporation. The Corporation shall be responsible for all other costs and expenses of its operations and transactions, including (without limitation) those relating to: organization and offering; calculating the Corporation’s net asset value; effecting sales and repurchases of shares of the Corporation’s common stock and other securities; investment advisory fees; fees payable to third parties relating to, or associated with, making investments (in each case subject to approval of the Corporation’s Board of Directors); transfer agent and custodial fees; federal and state registration fees; all costs of registration and listing the Corporation’s shares on any securities exchange; federal, state and local taxes; independent Directors’ fees and expenses; costs of proxy statements, stockholders’ reports and notices; fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums; direct costs such as printing, mailing, long distance telephone, staff, independent auditors and outside legal costs; and all other expenses incurred by the Corporation or Benefit Street Partners L.L.C. in connection with administering the Corporation’s business, including payments under the Administration Agreement between the Corporation and Benefit Street Partners L.L.C. based upon the Corporation’s allocable portion of Benefit Street Partners L.L.C.’s overhead in performing its obligations under the Administration Agreement, including rent.
3.Compensation of the Adviser. The Corporation agrees to pay to the Adviser, and the Adviser agrees to accept as compensation for the services provided by the Adviser hereunder, a base management fee (“Base Management Fee”) and an incentive fee (“Incentive Fee”) as hereinafter set forth. The Adviser may agree to temporarily or permanently waive, in whole or in part, the Base Management Fee and/or the Incentive Fee.
(a) The Base Management Fee shall be calculated at an annual rate of 2.00%. The Base Management Fee will be payable quarterly in arrears, and will be calculated based on the average value of the Corporation’s gross assets at the end of the two most recently completed calendar quarters, and adjustedpro ratafor any share issuances, debt issuances, repurchases or redemptions during the current calendar quarter. Base Management Fees for any partial month or quarter will be pro rated.
(b) The Incentive Fee shall consist of two parts, as follows:
4.Covenants of the Adviser. The Adviser covenants that it will register as an investment adviser under the Advisers Act prior to the Corporation’s election to become a business development company. The Adviser agrees that its activities will at all times be in compliance in all material respects with all applicable federal and state laws governing its operations and investments.
5.Excess Brokerage Commissions. The Adviser is hereby authorized, to the fullest extent now or hereafter permitted by law, to cause the Corporation to pay a member of a national securities exchange, broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission another member of such exchange, broker or dealer would have charged for effecting that transaction, if the Adviser determines in good faith, taking into account such factors as price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution, and operational facilities of the firm and the firm’s risk and skill in positioning blocks of securities, that such amount of commission is reasonable in relation to the value of the brokerage and/or research services provided by such member, broker or dealer, viewed in terms of either that particular transaction or its overall responsibilities with respect to the Corporation’s portfolio, and constitutes the best net results for the Corporation.
6.Limitations on the Employment of the Adviser. The services of the Adviser to the Corporation are not exclusive, and the Adviser may engage in any other business or render similar or different services to others so long as its services to the Corporation hereunder are not impaired thereby, and nothing in this Agreement shall limit or restrict the right of any manager, officer or employee of the Adviser to engage in any other business or to devote his or her time and attention in part to any other business, whether of a similar or dissimilar nature. So long as this Agreement or any extension, renewal or amendment remains in effect, the Adviser shall be the only investment adviser for the Corporation, subject to the Adviser’s right to enter into sub-advisory agreements. The Adviser assumes no responsibility under this Agreement other than to render the services called for hereunder. It is understood that directors, officers, employees and stockholders of the Corporation are or may become interested in the Adviser and its affiliates, as directors, officers, employees, partners, stockholders, members, managers or otherwise, and that the Adviser and directors, officers, employees, partners, stockholders, members and managers of the Adviser and its affiliates are or may become similarly interested in the Corporation as stockholders or otherwise.
7.Responsibility of Dual Directors, Officers and/or Employees. If any person who is a manager, officer or employee of the Adviser or its managing member is or becomes a director, officer and/or employee of the Corporation and acts as such in any business of the Corporation, then such manager, officer and/or employee of the Adviser or its managing member shall be deemed to be acting in such capacity solely for the Corporation, and not as a manager, officer or employee of the Adviser or its managing member or under the control or direction of the Adviser or its managing member, although paid by as managing member of the Adviser.
8.Limitation of Liability of the Adviser; Indemnification. The Adviser (and its officers, managers, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser, including without limitation ) shall not be liable to the Corporation for any action taken or omitted to be taken by the Adviser in connection with the performance of any of its duties or obligations under this Agreement or otherwise as an investment adviser of the Corporation, except to the extent specified in Section 36(b) of the Investment Company Act concerning loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services, and the Corporation shall indemnify the Adviser (and its officers, managers, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser, including without limitation ) (collectively, the “Indemnified Parties”) and hold them harmless from and against all damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Corporation or its security holders) arising out of or otherwise based upon the performance of any of the Adviser’s duties or obligations under this Agreement or otherwise as an investment adviser of the Corporation. Notwithstanding the preceding sentence of this Paragraph 8 to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Corporation or its security holders to which the Indemnified Parties would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of the Adviser’s duties or by reason of the reckless disregard of the Adviser’s duties and obligations under this Agreement.
9.Effectiveness, Duration and Termination of Agreement. This Agreement shall become effective as of the date above written. This Agreement shall remain in effect for two years, and thereafter shall continue automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (a) the vote of the Corporation’s Board of Directors, or by the vote of a majority of the outstanding voting securities of the Corporation and (b) the vote of a majority of the Corporation’s Directors who are not parties to this Agreement or “interested persons” (as such term is defined in Section 2(a)(19) of the Investment Company Act) of any such party, in accordance with the requirements of the Investment Company Act. This Agreement may be terminated at any time, without the payment of any penalty, upon 60 days’ written notice, by the vote of a majority of the outstanding voting securities of the Corporation, or by the vote of the Corporation’s Directors or by the Adviser. This Agreement will automatically terminate in the event of its “assignment” (as such term is defined for purposes of Section 15(a)(4) of the Investment Company Act). The provisions of Paragraph 8 of this Agreement shall remain in full force and effect, and the Adviser shall remain entitled to the benefits thereof, notwithstanding any termination of this Agreement.
10.Notices. Any notice under this Agreement shall be given in writing, addressed and delivered or mailed, postage prepaid, to the other party at its principal office.
11.Amendments. This Agreement may be amended by mutual consent, but the consent of the Corporation must be obtained in conformity with the requirements of the Investment Company Act.
12.Entire Agreement; Governing Law. This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof. This Agreement shall be construed in accordance with the laws of the State of New York and the applicable provisions of the Investment Company Act. To the extent the applicable laws of the State of New York, or any of the provisions herein, conflict with the provisions of the Investment Company Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the date above written.
Benefit Street Capital Corp.By:NEWCOBy: , its managing memberBy:
APPENDIX B
, 2015
Richard J. ByrnePresident and Chief Executive OfficerBenefit Street Capital Corp.9 West 57th Street, Suite 4920New York, New York 10019
Re: Base Management Fee Waiver
Dear Richard:
Reference is hereby made to the Investment Advisory Agreement (the “Agreement”), dated [• ], 2015, by and between Benefit Street Capital Corp. (the “Company”) and us. Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Agreement.
We hereby agree that the Base Management Fee will be calculated at an annual rate of 1.50% (the “Amended Base Management Fee”) and, accordingly, agree to permanently waive such portion of the Base Management Fee that is in excess of the Amended Base Management Fee that we would otherwise be entitled to receive under the Agreement.
[Signature page to follow]
Sincerely yours,
TICC MANAGEMENT, LLC
The undersigned stockholder of TICCOxford Square Capital Corp. (the “Company”) acknowledges receipt of the Notice of Special Meeting of Stockholders of the Company. The undersigned hereby constitutes and hereby appoints Jonathan H. Cohen and Saul B. Rosenthal, and each of them, and eachas proxies for the undersigned, with full power of substitution and resubstitution, and hereby authorizes said proxies, and each of them, to actrepresent and vote, as attorneys and proxies fordesignated on the undersigned to votereverse side, all the shares of common stock of the Company whichheld of record by the undersigned is entitled to voteon June 30, 2023, at the SpecialAnnual Meeting of Stockholders of the Company to be held on August 25, 2023, at the offices of Sutherland Asbill & Brennan LLP located at 1114 Avenue of the Americas, 40th Floor, New York, New York 10036 on October 27, 2015, at 10:9:00 a.m., Eastern Time, in the second floor conference room of the Company’s corporate headquarters, located at 8 Sound Shore Drive, Suite 255, Greenwich, Connecticut 06830, and at any adjournments or postponements thereof. The undersigned hereby revokes any and all postponements or adjournments thereof, as indicated on this proxy.
Please vote, sign and date this proxy If no direction is made on the reverse sideproxy card, the shares covered by the proxy card will be voted FOR the Proposals. VOTE VIA THE INTERNET: www.proxy-direct.com VOTE VIA THE TELEPHONE: 1-800-337-3503 OXF_33362_063023 PLEASE VOTE VIA INTERNET OR TELEPHONE OR MARK, SIGN, DATE ON THE REVERSE SIDE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE. xxxxxxxxxxxxxx code
YOUR VOTE IS IMPORTANT Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on August 25, 2023. The Proxy Statement, the Notice of 2023 Annual Meeting of Stockholders, the accompanying Annual Report of the Company for the fiscal year ended December 31, 2022 and return it promptlythe Form of Proxy Card are available at: https://www.proxy-direct.com/oxf-33362 We reserve the right to reconsider the date, time, and/or means of convening the Annual Meeting, including holding the Annual Meeting by means of remote communications. If we take this step, we will announce the decision to do so in advance, and details on how to participate in the enclosed envelope.
(CONTINUED ON REVERSE SIDE)
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
If you would like to reduce the costs incurred by TICC Capital Corp. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years.
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
Mark, sign and date your proxy card and return it in the postage paid envelope we have provided or return it to TICC Capital Corp., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
4. To transact such other business as may properly come before the SpecialAnnual Meeting and any adjournments or any postponement or adjournment thereof.
IMPORTANT:postponements. B Authorized Signatures ─ This section must be completed for your vote to be counted. ─ Sign and Date Below Note: Please sign your names exactly as shown hereonyour name(s) appear(s) on this Proxy Card, and date your proxy in the blank provided. For joint accounts,it. When shares are held jointly, each joint ownerstockholder should sign. When signing as attorney, executor, guardian, administrator, trustee, officer of corporation or guardian,other entity or in another representative capacity, please give yourthe full title under the signature. Note: Please sign exactly as such. If the signer is ayour name(s) appear(s) on this Proxy Card, and date it. When shares are held jointly, each stockholder should sign. When signing as attorney, executor, guardian, administrator, trustee, officer of corporation or partnership,other entity or in another representative capacity, please sign ingive the full corporate or partnership name by a duly authorized officer or partner.title under the signature. Date (mm/dd/yyyy) ─ Please print date below Signature 1 ─ Please keep signature within the box Signature 2 ─ Please keep signature within the box Scanner bar code xxxxxxxxxxxxxx OXF1 33362 xxxxxxxx