UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 7, 2016 (April 6, 2016)
Fifth Street Asset Management Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-36701 | 46-5610118 |
|
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 777 West Putnam Avenue, 3rd Floor, Greenwich, CT | 06830 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (203) 681-3600
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 8.01 Other Events.
On April 6, 2016, Fifth Street Asset Management Inc. (the “Company”) entered into an agreement (the “Agreement”) with The Mangrove Partners Master Fund, Ltd. and Mangrove Partners (collectively, “Mangrove”). Under the terms of the Agreement, the Company has agreed that, as long as Mangrove’s aggregate beneficial ownership of the Class A Common Stock of the Company (the “Common Stock”) exceeds 5% of the Company’s then outstanding Common Stock (the “Minimum Ownership Threshold”), Mangrove will be entitled to nominate a director of the Company. Subject to certain customary vetting procedures and such nominee qualifying as “independent” pursuant to the Securities and Exchange Commission (the “SEC”) and NASDAQ listing standards, the Board of Directors of the Company (the “Board”) has agreed to take all necessary action to appoint such nominee to the Board.
In addition, as long as Mangrove’s aggregate beneficial ownership of the Common Stock exceeds the Minimum Ownership Threshold, the Company and Mangrove have agreed to mutually seek and identify one additional new director who is not affiliated or associated with Mangrove and who qualifies as “independent” under the standards described above. Any such new director search process will be conducted by the Nominating and Corporate Governance Committee of the Board (the “Nominating Committee”). If, upon the joint recommendation by the Nominating Committee and Mangrove, the Board votes to approve such additional nominee, then the Board has agreed to take all necessary action to appoint the additional nominee as a director of the Company.
In addition, pursuant to the terms of the Agreement, Mangrove has agreed to vote all of the shares of common stock of Fifth Street Senior Floating Rate Corp. (“FSFR”) beneficially owned by it on March 2, 2016, the record date for FSFR’s 2016 annual meeting of stockholders, totaling, in the aggregate approximately 932,281 FSFR shares, in accordance with the recommendations of FSFR’s board of directors as set forth in FSFR’s definitive annual proxy statement on Schedule 14A filed by FSFR with the SEC.
The Agreement’s outside termination date is the date on which the Company’s 2017 annual meeting of stockholders concludes.
The foregoing summary of the Agreement and the transactions contemplated thereby is qualified in its entirety by reference to the complete text of the Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated by reference in its entirety into this Item 8.01.
On April 7, 2016, the Company issued a press release announcing the entering into of the Agreement and related matters. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.2 and is incorporated by reference in its entirety into this Item 8.01.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
| 99.1 | Agreement, dated as of April 6, 2016, by and among Fifth Street Asset Management Inc., The Mangrove Partners Master Fund, Ltd. and Mangrove Partners |
| 99.2 | Press release dated April 7, 2016 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
FIFTH STREET ASSET MANAGEMENT INC.
| ||
| Date: April 7, 2016 | By: | /s/ Kerry Acocella |
|
Name: Kerry Acocella Title: Senior Vice President, Legal and Secretary | ||
INDEX
| Exhibit No. | Description |
| 99.1 | Agreement, dated as of April 6, 2016, by and among Fifth Street Asset Management Inc., The Mangrove Partners Master Fund, Ltd. and Mangrove Partners |
| 99.2 | Press release dated April 7, 2016 |
EXHIBIT 99.1
EXECUTION VERSION
AGREEMENT
This Agreement (this “Agreement”) is dated as of April 6, 2016, by and among Fifth Street Asset Management Inc., a Delaware corporation (the “Company”), and each of the persons or entities listed on the last signature page hereto (collectively, “Mangrove”) (each of the Company and Mangrove, a “Party” to this Agreement, and collectively, the “Parties”).
RECITALS
WHEREAS, as of the date hereof, Mangrove beneficially owns shares of Class A Common Stock of the Company (the “Common Stock”) totaling, in the aggregate, 696,738 shares (the “Shares”), or approximately 12.05%, of the Common Stock issued and outstanding on the date hereof;
WHEREAS, as of March 2, 2016, Mangrove had the right to vote shares of common stock of Fifth Street Senior Floating Rate Corp. (“FSFR”) totaling, in the aggregate approximately 932,281 shares (the “FSFR Shares”), or approximately 3.2% of the common stock of FSFR issued and outstanding on such date; and
WHEREAS, as of the date hereof, the Company and Mangrove have determined to come to an agreement with respect to the matters provided herein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound hereby, agree as follows:
1. Nomination and Election of Directors and Related Agreements.
(a) So long as Mangrove’s aggregate beneficial ownership of Common Stock is in excess of 5% of the Company’s then outstanding Common Stock (the “Minimum Ownership Threshold”), Mangrove shall have the right to nominate a director of the Company (such nominee, the “Mangrove Nominee”) subject to the procedures set forth in this Section 1(a). The Mangrove Nominee must qualify as “independent” pursuant to the Securities and Exchange Commission and NASDAQ listing standards. After (i) the Mangrove Nominee has submitted to the Company the documentation required by Section 1(e)(iv) herein and (ii) representatives of the Board of Directors of the Company (the “Board”) have conducted customary interview(s) and background check(s) of the Mangrove Nominee, the Nominating and Corporate Governance Committee of the Board (the “Nominating Committee”) shall recommend such nominee as the Mangrove Nominee. The Company shall conduct any interview(s) and background check(s) contemplated in the prior sentence as promptly as practicable but, in any event, no more than ten business days after receiving the documentation required by Section 1(e)(iv). After such recommendation by the Nominating Committee, the Board shall take all necessary actions to appoint the Mangrove Nominee as a director, and the Nominating Committee shall make its recommendation to the Board, as promptly as practicable thereafter but, in any event, in no more than three business days; provided, however, that if the Nominating Committee does not recommend the Mangrove Nominee to the Board as a result of such person not meeting the independence standards or satisfying the background check(s) described above (which are the only reasons the Nominating Committee can reject the Mangrove Nominee), the Parties shall continue to follow the procedures of this Section 1(a) until a Mangrove Nominee is appointed to the Board.
(b) So long as Mangrove’s aggregate beneficial ownership of Common Stock is in excess of the Minimum Ownership Threshold, the Company and Mangrove will mutually seek to identify one additional new director who is not affiliated or associated with Mangrove and who qualifies as “independent” pursuant to the Securities and Exchange Commission and NASDAQ listing standards to serve as a director of the Company (such nominee, the “Additional Nominee” and together with the Mangrove Nominee, the “New Nominees”). The search process for the Additional Nominee shall be conducted by the Nominating Committee, which shall interview any candidate proposed by Mangrove within five business days of identification. After the Nominating Committee and Mangrove jointly recommend an Additional Nominee to the Board, the Board shall vote on the appointment of such Additional Nominee to the Board. If the Board votes to appoint such Additional Nominee to the Board, the Board shall take all necessary action to appoint, as soon as practicable, the Additional Nominee as a director.
(c) Mangrove has not, directly or indirectly, compensated or agreed to, and will not, compensate any New Nominee for his or her respective service as a nominee or director of the Company with any cash, securities (including any rights or options convertible into or exercisable for or exchangeable into securities or any profit sharing agreement or arrangement), or other form of compensation directly or indirectly related to the Company or its securities.
(d) If either or both of the New Nominees are identified and appointed to the Board prior to the mailing of the Company’s definitive proxy statement for the 2016 annual meeting of stockholders (the “2016 Annual Meeting”), the Board shall take or cause to be taken all necessary actions to nominate either or both of the New Nominees, as applicable, for election to the Board at the 2016 Annual Meeting. The Company will recommend, support and solicit proxies for the election of the New Nominees, if applicable, at the 2016 Annual Meeting in the same manner as for the other nominees nominated by the Board at the 2016 Annual Meeting.
(e) Additional Agreements.
(i) Mangrove agrees that it will cause its controlled Affiliates and Associates to comply with the terms of this Agreement and shall be responsible for any breach of this Agreement by any such controlled Affiliate or Associate. As used in this Agreement, the terms “Affiliate” and “Associate” shall have the respective meanings set forth in Rule 12b-2 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, or the rules or regulations promulgated thereunder (the “Exchange Act”) and shall include all persons or entities that at any time during the term of this Agreement become Affiliates or Associates of any person or entity referred to in this Agreement.
(ii) Mangrove has voted the FSFR Shares at FSFR’s 2016 annual meeting of stockholders (subject to any adjournments or postponements, the “FSFR 2016 Annual Meeting”) in accordance with the recommendations of FSFR’s board of directors as set forth in the definitive annual proxy statement on Schedule 14A filed by FSFR with the Securities and Exchange Commission on March 4, 2016 and will not revoke such proxy or otherwise modify or change such vote.
(iii) Promptly following the identification of each of the New Nominees, Mangrove will cause to be delivered to the Company an irrevocable resignation letter pursuant to which each such New Nominee shall immediately resign from the Board if at any time Mangrove’s aggregate beneficial ownership of Common Stock decreases to less than the Minimum Ownership Threshold or if this Agreement is terminated pursuant to Section 5(b).
(iv) Promptly after they are identified (but in any event prior to being appointed to the Board in accordance with this Agreement), the New Nominees will submit to the Company (w) a fully completed copy of the Company’s standard director & officer questionnaire, (x) the information required pursuant to Section 1.03 of Article I of the Company’s Second Amended and Restated Bylaws (the “By-Laws”), (y) consent to any customary background check(s) that the Company may perform and any information required for such background check(s) and (z) a written acknowledgment that the New Nominees agree to be bound by all policies, codes and guidelines applicable to directors of the Company upon appointment to the Board.
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(v) Any New Nominee appointed to the Board pursuant to this Agreement will receive all D&O protections and agreements provided to the other members of the Board.
3. Representations and Warranties of the Company.
The Company represents and warrants to Mangrove that (a) the Company has the corporate power and authority to execute this Agreement and to bind it thereto, (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) the execution, delivery and performance of this Agreement by the Company does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to the Company, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could constitute such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound, and (d) the Company has, as of the date hereof, expanded the Board to nine directors.
4. Representations and Warranties of Mangrove.
Mangrove represents and warrants to the Company that (a) the authorized signatory of Mangrove set forth on the signature page hereto has the power and authority to execute this Agreement and any other documents or agreements to be entered into in connection with this Agreement and to bind Mangrove thereto, (b) this Agreement has been duly authorized, executed and delivered by Mangrove, and is a valid and binding obligation of Mangrove, enforceable against Mangrove in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) the execution of this Agreement, the consummation of any of the transactions contemplated hereby, and the fulfillment of the terms hereof, in each case in accordance with the terms hereof, will not conflict with, or result in a breach or violation of the organizational documents of Mangrove as currently in effect, (d) the execution, delivery and performance of this Agreement by Mangrove does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to Mangrove, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could constitute such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which Mangrove is a party or by which it is bound, (e) as of the date of this Agreement, Mangrove beneficially owns in the aggregate 696,738 shares of Common Stock, (f) as of the date hereof, Mangrove does not currently have, and does not currently have any right to acquire or any interest in any other securities of the Company (or any rights, options or other securities convertible into or exercisable or exchangeable (whether or not convertible, exercisable or exchangeable immediately or only after the passage of time or the occurrence of a specified event) for such securities or any obligations measured by the price or value of any securities of the Company or any of its Affiliates, including any swaps or other derivative arrangements designed to produce economic benefits and risks that correspond to the ownership of Common Stock, whether or not any of the foregoing would give rise to beneficial ownership (as determined under Rule 13d-3 promulgated under the Exchange Act), and whether or not to be settled by delivery of Common Stock, payment of cash or by other consideration, and without regard to any short position under any such contract or arrangement), (g) no person other than Mangrove has any rights with respect to the Shares, (h) as of March 2, 2016, Mangrove had the right to vote in the aggregate approximately 932,281 shares of common stock of FSFR, (i) as of the date hereof, Mangrove does not currently have, and does not currently have any right to acquire or any interest in any other securities of FSFR (or any rights, options or other securities convertible into or exercisable or exchangeable (whether or not convertible, exercisable or exchangeable immediately or only after the passage of time or the occurrence of a specified event) for such securities or any obligations measured by the price or value of any securities of the FSFR or any of its Affiliates, including any swaps or other derivative arrangements designed to produce economic benefits and risks that correspond to the ownership of FSFR common stock, whether or not any of the foregoing would give rise to beneficial ownership (as determined under Rule 13d-3 promulgated under the Exchange Act), and whether or not to be settled by delivery of FSFR common stock, payment of cash or by other consideration, and without regard to any short position under any such contract or arrangement) and (j) no person other than Mangrove has any rights with respect to the FSFR Shares.
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5. Termination.
This Agreement and the provisions herein shall remain in full force and effect until the earliest of:
(a) the conclusion of the Company’s 2017 Annual Meeting of Stockholders;
(b) the Company, the Board or Mangrove materially breaches an obligation under this Agreement, provided that the non-breaching party elects to terminate this Agreement and, if such breach is curable, such non-breaching party has provided written notice of such breach (which notice shall specify in reasonable detail the facts and circumstances surrounding such breach) and such breach has not been cured within a ten (10) day period; provided, that if this Agreement is terminated pursuant to this Section 5(b) as a result of an uncured breach by Mangrove, the New Nominees agree to, and Mangrove agrees to cause the New Nominees to, promptly resign from the Board; or
(c) such other date established by mutual written agreement of the Parties hereto.
6. Press Release.
Promptly following the execution of this Agreement, the Company shall issue a mutually agreeable press release, in substantially the form attached hereto as Annex A, announcing certain terms of this Agreement.
7. Specific Performance.
Each of Mangrove, on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other Party hereto would occur in the event the provisions of this Agreement were not performed in accordance with their terms or were otherwise breached and that such injury would not be adequately compensable by the remedies available at law (including the payment of money damages). It is accordingly agreed that Mangrove, on the one hand, and the Company, on the other hand, shall each be entitled to seek specific enforcement of, and injunctive relief to prevent any violation of, the terms hereof without posting bond or security. This Section 7 is not the exclusive remedy for any violation of this Agreement.
8. Expenses.
Except as otherwise agreed by the Parties, the Company shall reimburse Mangrove for its reasonable, documented out-of-pocket attorneys’ fees incurred through the date of this Agreement in connection with the negotiation and execution of this Agreement; provided, that such reimbursement shall not exceed $15,000 in the aggregate.
9. Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. The Parties agree to use their commercially reasonable best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that is held invalid, void or enforceable by a court of competent jurisdiction.
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10. Notices.
Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending Party); (c) upon confirmation of receipt, when sent by email (provided such confirmation is not automatically generated); or (d) one (1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the Party to receive the same. The addresses and facsimile numbers for such communications shall be:
| If to the Company: | Fifth Street Asset Management Inc. |
777 West Putnam Avenue, 3rd Floor
Greenwich, CT 06830
Attention: Kerry S. Acocella, Senior Vice President, Legal
Telephone: 203.681.3600
Facsimile: 203.681.3879
Email: KAcocella@fifthstreetfinance.com
| With copies (which shall not constitute notice) to: | Skadden, Arps, Slate, Meagher & Flom LLP |
4 Times Square
New York, NY 10036
| Attention: | Todd E. Freed | |
| Richard J. Grossman | ||
| Telephone: | 212.735.3714 | |
| 212.735.2116 | ||
| Facsimile: | 917.777.3714 | |
| 917.777.2116 | ||
| Email: | Todd.Freed@skadden.com | |
| Richard.Grossman@skadden.com |
| If to Mangrove: | Mangrove Partners |
645 Madison Avenue, 14th Floor
New York, NY 10022
Attention: Nathaniel August, Portfolio Manager
Telephone: 646.450.0418
Facsimile: 646.652.5399
Email: naugust@mangrovepartners.com
| With a copy (which shall not constitute notice) to: | Kleinberg, Kaplan, Wolff & Cohen, P.C. |
551 Fifth Avenue, 18th Floor
New York, NY 10176
Attention: Christopher P. Davis
Telephone: 212.880.9865
Facsimile: 212.986.8866
Email: cdavis@kkwc.com
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11. Applicable Law.
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware without regard to its choice of law principles to the extent that the application of the laws of another jurisdiction would be required thereby. Each Party hereby irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction and venue of the Delaware Court of Chancery (or, only if the Delaware Court of Chancery does not have jurisdiction over a particular matter, the Superior Court of the State of Delaware (and the Complex Commercial Litigation Division thereof if such division has jurisdiction over the particular matter), or if the Superior Court of the State of Delaware does not have jurisdiction, any federal court of the United States of America sitting in the State of Delaware) (as applicable, the “Delaware Courts”), and any appellate court from any decision thereof, in any suit, action or other proceeding with respect to the subject matter of this Agreement (each, a “Proceeding”), including the negotiation, execution or performance of this Agreement and agrees that all claims in respect of any such Proceeding shall be heard and determined in the Delaware Courts, (b) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any Proceeding with respect to the subject matter of this Agreement or the negotiation, execution or performance of this Agreement in the Delaware Courts, including any objection based on its place of incorporation or domicile, (c) waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such Proceeding in any such court and (d) agrees that a final judgment in any such Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law. The Parties waive any right to a trial by jury with respect to any Proceeding.
12. Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the Parties and delivered to the other Party (including by means of electronic delivery or facsimile).
13. Waiver.
Any waiver of any term or condition of this Agreement must be in writing and signed by the party to be charged. Any waiver by any party hereto of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party hereto to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
14. Headings; Interpretation.
The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The Parties acknowledge and agree that this Agreement has been negotiated at arm’s length and among parties equally sophisticated and knowledgeable in the matters covered hereby. Accordingly, any rule of law or legal decision that would require interpretation of any ambiguities in this Agreement against the party that has drafted it is not applicable and is hereby waived.
15. Entire Agreement; Amendment; Successors and Assigns; Third Party Beneficiaries.
This Agreement (and Annex A) contains the entire understanding of the Parties hereto with respect to its subject matter. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings between the Parties other than those expressly set forth herein. No modifications of this Agreement can be made except in writing signed by an authorized representative of each the Company and Mangrove. The terms and conditions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the Parties hereto and their respective successors, heirs, executors, legal representatives, and permitted assigns. No Party shall assign this Agreement or any rights or obligations hereunder without, with respect to Mangrove, the prior written consent of the Company, and with respect to the Company, the prior written consent of Mangrove. This Agreement is solely for the benefit of the Parties hereto and is not enforceable by any other persons or entities.
[The remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the Parties as of the date hereof.
FIFTH STREET ASSET MANAGEMENT INC.
| By: | /s/ Kerry S. Acocella | |
| Name: Kerry S. Acocella | ||
| Title: SVP, Legal and Secretary |
[Signature Page to Agreement]
| THE MANGROVE PARTNERS MASTER FUND, LTD. | ||
| By: | MANGROVE PARTNERS | |
| The Investment Manager | ||
| By: | /s/ Nathaniel August | |
| Name: Nathaniel August | ||
| Title: Director | ||
| MANGROVE PARTNERS | ||
| By: | /s/ Nathaniel August | |
| Name: Nathaniel August | ||
| Title: Director | ||
[Signature Page to Agreement]
EXHIBIT 99.2
Fifth Street Asset Management Inc. Announces Intent to Appoint Nathaniel August to Board of Directors
GREENWICH, CT, April 7, 2016 -- Fifth Street Asset Management Inc. (NASDAQ: FSAM) (“FSAM” or the “Company”) today announced that Nathaniel August, founder and President of Mangrove Partners (“Mangrove”), the beneficial owner of approximately 12% of FSAM Class A common stock, is expected to be appointed to the Company’s Board of Directors, pursuant to an agreement entered into between FSAM and Mangrove.
“We are pleased that Nathaniel has agreed to be considered as a director to serve on the FSAM Board of Directors,” said Leonard M. Tannenbaum, Chairman and Chief Executive Officer of FSAM. “As a significant stockholder of FSAM, Fifth Street Finance Corp. (“FSC”) and Fifth Street Senior Floating Rate Corp. (“FSFR”), we believe that Mangrove Partners offers an important perspective in the interest of enhancing stockholder value across the Fifth Street platform. Nathaniel would bring unique insight as well as significant financial and operational expertise as we continue to optimize performance to drive value for all stockholders.”
“As an investor of all three publicly-traded Fifth Street entities, we have had a constructive dialogue with management regarding ways to enhance value for stockholders across the Fifth Street platform,” said Mr. August. “We respect FSAM’s track record managing its credit portfolio and position within the middle market. If appointed as an independent director, I look forward to working cooperatively with the rest of the Board to position FSAM for future success by implementing additional best practices across the Fifth Street platform, and further improving credit performance moving forward.”
In connection with today’s announcement, the Company has entered into an agreement with Mangrove Partners, whereby, in addition to the expected appointment of Mr. August as a member of the FSAM Board, FSAM has also committed to appoint a mutually agreeable independent director to the Company’s Board. As part of its agreement with FSAM, Mangrove Partners agreed to vote its approximately 932,000 shares of FSFR in accordance with the FSFR Board of Directors recommendation at FSFR’s 2016 Annual Meeting of Stockholders, being held today. The complete agreement between FSAM and Mangrove Partners will be included as an exhibit to a Current Report on Form 8-K, which will be filed with the Securities and Exchange Commission (SEC).
About Nathaniel August
Nathaniel August is the founder and President of Mangrove Partners and has an extensive background in financial analysis and a broad understanding of the operational, financial and strategic issues facing public companies. Prior to founding Mangrove Partners in April 2010, Mr. August was a Director at White Eagle Partners, a global, value-oriented investment advisory firm, from December 2008 to January 2010.
Previously he served as a Senior Analyst at Brahman Capital Partners, a long/short equity strategy hedge fund, from March 2006 to September 2008, an Investment Analyst at K Capital Partners, a private investment firm, from June 2003 to January 2006, and an Analyst at Goldman Sachs in the Principal Investment Area from July 2001 to May 2003.
About Fifth Street Asset Management Inc.
Fifth Street Asset Management Inc. (FSAM) is a nationally recognized credit-focused asset manager. The firm has over $5 billion of assets under management across two publicly-traded business development companies, Fifth Street Finance Corp. (FSC) and Fifth Street Senior Floating Rate Corp. (FSFR), as well as multiple private investment vehicles. The Fifth Street platform provides innovative and customized financing solutions to small and mid-sized businesses across the capital structure through complementary investment vehicles and co-investment capabilities. With over a 17-year track record focused on disciplined credit investing across multiple economic cycles, Fifth Street is led by a seasoned management team that has issued billions of dollars in public equity, private capital and public debt securities. Fifth Street's national origination strategy, proven track record and established platform are supported by approximately 70 professionals across locations in Greenwich, Chicago and San Francisco. For more information, please visit fsam.fifthstreetfinance.com.
Forward-Looking Statements
This press release may contain, and certain oral statements made by our representatives from time to time may contain, forward-looking statements, because they relate to future events or our future performance or financial condition. Forward-looking statements may include statements as to the fees charged by FSAM to FSC and FSFR, FSAM’s future operating results, dividends by FSAM and business prospects of FSAM. Words such as “believes,” “expects,” “seeks,” “plans,” “should,” “estimates,” “project,” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. These forward-looking statements involve risks and uncertainties. Actual results could differ materially from those implied or expressed in these forward-looking statements for any reason. Such factors are identified from time to time in FSAM’s filings with the Securities and Exchange Commission and include changes in the economy, the financial markets and future changes in laws or regulations, competitive conditions in the business development company space and conditions in FSAM’s operating areas. FSAM undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The contents of any website referenced in this press release are not incorporated by reference herein.
CONTACT:
Investor Contact:
Robyn Friedman, Senior Vice President, Head of Investor Relations
(203) 681-3720
IR-FSAM@fifthstreetfinance.com
Media Contact:
James Golden / Andrew Squire
Joele Frank Wilkinson Brimmer Katcher
(212) 355-4449