New Mountain Finance CorporationNew Mountain Finance Holdings, L.L.C.
New Mountain Finance AIV Holdings Corporation
787 Seventh Avenue, 48th Floor
New York, NY 10019
April 2, 20134, 2014
Dear Stockholder or Unit Holder:Stockholder:
You are cordially invited to attend the 2013 Joint Annual Meeting ("Annual Meeting")The Board of stockholders of New Mountain Finance Corporation ("NMFC"), unit holders of New Mountain Finance Holdings, L.L.C. ("NMF Holdings") and stockholdersDirectors of New Mountain Finance AIV Holdings Corporation ("(the “Company” or “AIV Holdings"Holdings”) is writing to solicit your consent on behalf of the Company to authorize the Board of Directors of the Company to withdraw the Company’s election to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), which the Board of Directors approved at an in-person meeting held on May 6, 2013 at 9:30 a.m., Eastern Time, atMarch 25, 2014.
In order to save the offices of Sutherland Asbill & Brennan LLP located at 1114 Avenueexpense associated with holding a special meeting of the Americas, 40thCompany’s stockholder, the Board of Directors elected to obtain stockholder approval of the proposal described above by written consent pursuant to Section 228 of the Delaware General Corporation Law, rather than by calling a meeting of the stockholder. This consent solicitation statement and enclosed written consent form are being sent to our stockholder on or about April 4, 2014.
Our Board of Directors recommends that you consent to the approval to authorize the Board of Directors of the Company to withdraw the Company’s election to be regulated as a BDC under the 1940 Act. Although our Board of Directors approved this proposal at an in-person meeting held on March 25, 2014, the withdrawal of the Company’s election to be regulated as a BDC under the 1940 Act must also be approved by a “majority of the outstanding shares” of the Company, which is defined under the 1940 Act as (A) 67% or more of the voting securities voting by consent, if the holders of more than 50% of the outstanding voting securities of the Company are represented by consent or (B) more than 50% of the outstanding voting securities of the Company, whichever is the less. Our Board of Directors has set March 28, 2014 as the record date (the “Record Date”) for this consent. As a result, this proposal will be approved when we have received the consent to the approval of this proposal from the holders of record of a majority of our outstanding common stock as of the Record Date. Our Board of Directors determined that the consent must be received on or before April 8, 2014; however, this date may be extended by our Board of Directors in its sole discretion.
Your consent is important because you are a stockholder of the Company. If you consent to the approval of this proposal, please mark the “CONSENT” box on the enclosed written consent form to vote in favor of the proposal to authorize our Board of Directors to withdraw the Company’s election to be regulated as a BDC under the 1940 Act and complete, date, sign, and return your written consent form to us by email at pbosco@newmountaincapital.com, by facsimile at (646) 417-5813 or by mail at New Mountain Finance AIV Holdings Corporation, Attn: Paula Bosco, 787 Seventh Avenue, 48th Floor, New York, New York 10036.10019 by April 8, 2014.
The notice of the Annual Meeting and the proxy statement accompanying this letter provide an outline of the business to be conducted at the Annual Meeting. At the Annual Meeting, (i) the stockholders of NMFC will be asked to elect two directors to the board of directors of NMFC; (ii) the stockholders of AIV Holdings will be asked to elect two directors to the board of directors of AIV Holdings; and (iii) the stockholders of each of NMFC and AIV Holdings, voting on a pass-through basis, and the unit holders of NMF Holdings will be asked to elect two directors to the board of directors of NMF Holdings.
It is important that your voting securities be represented at the Annual Meeting. If you are unable to attend the Annual Meeting in person, I urge you to complete, date and sign the enclosed proxy cards and promptly return them in the envelope provided, vote your voting securities by telephone, or vote via the internet. Your vote is important.
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Important Notice Regarding the Availability of NMFC's, AIV Holdings' and NMF Holdings' Joint Proxy Materials for the Annual Meeting to Be Held on May 6, 2013.
NMFC's, AIV Holdings' and NMF Holdings' joint proxy statement is available on the internet athttp://www.newmountainfinance.com.
�� The following information applicable to the Annual Meeting may be found in NMFC's, AIV Holdings' and NMF Holdings' joint proxy statement and accompanying proxy cards:
•The date, time and location of the annual 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(s); and•Information about attending the meeting and voting in person.
New Mountain Finance Corporation787 Seventh Avenue, 48th FloorNew York, NY 10019
NOTICE OF ANNUAL MEETING OF STOCKHOLDERSTO BE HELD ON MAY 6, 2013
To the Stockholders of New Mountain Finance Corporation:
A meeting (the "Annual Meeting") of stockholders of New Mountain Finance Corporation ("NMFC") 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 at 9:30 a.m., Eastern Time, for the following purposes:
1.To elect two directors to the boards of directors of NMFC and, voting on a pass-through basis, of New Mountain Finance Holdings, L.L.C. ("NMF Holdings"), who will serve for a term of three years, or until their successors are duly elected and qualify; and2.To transact such other business as may properly come before the Annual Meeting.
You have the right to receive notice of and to vote at the Annual Meeting if you were a stockholder of record at the close of business on March 21, 2013. Whether or not you expect to be present in person at the Annual Meeting, please sign the enclosed proxy card and return it promptly in the self-addressed envelope provided or register your vote by telephone or through the internet. Instructions are shown on the proxy card. 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 Annual Meeting, the Annual Meeting may be adjourned in order to permit further solicitation of proxies by NMFC.
By Order of the Board of Directors | ||
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New York, New YorkApril 2, 2013
This is an important meeting. To ensure proper representation at the Annual Meeting, please complete, sign, date and return the proxy card in the enclosed, self-addressed envelope, vote your shares by telephone, or vote via the internet. Even if you vote your shares prior to the Annual Meeting, you still may attend the Annual Meeting and vote your shares in person.
New Mountain Finance Holdings, L.L.C.787 Seventh Avenue, 48th FloorNew York, NY 10019
NOTICE OF ANNUAL MEETING OF UNIT HOLDERSTO BE HELD ON MAY 6, 2013
To the Unit Holders of New Mountain Finance Holdings, L.L.C.:
A meeting (the "Annual Meeting") of unit holders of New Mountain Finance Holdings, L.L.C. ("NMF Holdings") 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 at 9:30 a.m., Eastern Time, for the following purposes:
1.To elect two directors to the board of directors of NMF Holdings who will serve for a term of three years; or until their successors are duly elected and qualify; and2.To transact such other business as may properly come before the Annual Meeting.
You have the right to receive notice of and to vote at the Annual Meeting if you were a unit holder of record at the close of business on March 21, 2013. Whether or not you expect to be present in person at the Annual Meeting, please sign the enclosed proxy card and return it promptly in the self-addressed envelope provided or register your vote by telephone or through the internet. Instructions are shown on the proxy card. 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 Annual Meeting, the Annual Meeting may be adjourned in order to permit further solicitation of proxies by NMF Holdings.
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New York, New YorkApril 2, 2013
This is an important meeting. To ensure proper representation at the Annual Meeting, please complete, sign, date and return the proxy card in the enclosed, self-addressed envelope, vote your units by telephone, or vote via the internet. Even if you vote your units prior to the Annual Meeting, you still may attend the Annual Meeting and vote your units in person.
New Mountain Finance AIV Holdings Corporation
787 Seventh Avenue, 48th Floor
New York, NY 10019
CONSENT SOLICITATION STATEMENT
APRIL 4, 2014
GENERAL INFORMATION
Information Regarding Consent
NOTICE OF ANNUAL MEETING OF STOCKHOLDERSTO BE HELD ON MAY 6, 2013
To the Stockholders of New Mountain Finance AIV Holdings Corporation:
A meeting (the "Annual Meeting") of stockholders of New Mountain Finance AIV Holdings Corporation ("AIV Holdings") 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 at 9:30 a.m., Eastern Time, for the following purposes:
1.To elect two directors to the boards of directors of AIV Holdings and, voting on a pass-through basis, of New Mountain Finance Holdings, L.L.C. ("NMF Holdings"), who will serve for a term of three years; or until their successors are duly elected and qualify; and2.To transact such other business as may properly come before the Annual Meeting.
You have the right to receive notice of and to vote at the Annual Meeting if you were a stockholder of record at the close of business on March 21, 2013. Whether or not you expect to be present in person at the Annual Meeting, please sign the enclosed proxy card and return it promptly in the self-addressed envelope provided or register your vote by telephone or through the internet. Instructions are shown on the proxy card. 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 Annual Meeting, the Annual Meeting may be adjourned in order to permit further solicitation of proxies by AIV Holdings.
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New York, New YorkApril 2, 2013
This is an important meeting. To ensure proper representation at the Annual Meeting, please complete, sign, date and return the proxy card in the enclosed, self-addressed envelope, vote your shares by telephone, or vote via the internet. Even if you vote your shares prior to the Annual Meeting, you still may attend the Annual Meeting and vote your shares in person.
New Mountain Finance CorporationNew Mountain Finance Holdings, L.L.C.New Mountain Finance AIV Holdings Corporation787 Seventh Avenue, 48th FloorNew York, NY 10019
JOINT PROXY STATEMENT
2013 Joint Annual Meetingof Stockholders of New Mountain Finance Corporationof Unit Holders of New Mountain Finance Holdings, L.L.C.and of Stockholders of New Mountain Finance AIV Holdings Corporation
This Joint ProxyConsent Solicitation Statement is furnished in connection with the solicitation of proxiesthe stockholder’s consent by the boardsBoard of directorsDirectors of New Mountain Finance Corporation ("NMFC"), New Mountain Finance Holdings, L.L.C. ("NMF Holdings") and New Mountain Finance AIV Holdings Corporation ("(the “Company” or “AIV Holdings" and together with NMFC and NMF Holdings”). Our Board of Directors is soliciting this consent in lieu of a meeting of the "New Mountain Finance Entities") for use atCompany’s stockholder in order to obtain our stockholder’s approval to authorize the New Mountain Finance Entities' Joint Annual Meeting (the "Annual Meeting")Board of Directors of the Company to withdraw the Company’s election to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), which the Board of Directors approved and declared advisable at an in-person meeting held on May 6, 2013, at 9:30 a.m., Eastern Time at the offices of Sutherland Asbill & Brennan LLP located at 1114 Avenue of the Americas, 40th Floor, New York, New York 10036, and at any postponements or adjournments thereof. This Joint Proxy Statement, the notices of the Annual Meeting and the accompanying proxy card(s) are first being sent to stockholders of NMFC and AIV Holdings and unit holders of NMF Holdings on or about April 2, 2013.
We encourage you to vote your shares of NMFC's or AIV Holdings' common stock or common membership units ("units") of NMF Holdings (collectively, the "Voting Securities"), either by voting in person at the Annual Meeting or by granting a proxy(i.e., authorizing someone to vote your Voting Securities). If you properly sign and date the accompanying proxy card(s), or otherwise provide voting instructions, either via the internet or by telephone, and the applicable New Mountain Finance Entity receives it in time for the Annual Meeting, the persons named as proxies will vote the Voting Securities registered directly in your name in the manner that you specified.If you give no instructions on the proxy card(s), the Voting Securities covered by the proxy card will be voted "FOR" the matters listed in this Joint Proxy Statement.
If you are a stockholder or unit holder "of record"(i.e., you hold Voting Securities directly in your name), you may revoke a proxy at any time before it is exercised by notifying the proxy tabulator, American Stock Transfer & Trust Company, LLC, in writing, by submitting a properly executed, later-dated proxy, or by voting in person at the Annual Meeting. Please send your notification to American Stock Transfer & Trust Company, LLC, c/o Proxy Services, 6201 15th Avenue, Brooklyn, New York 11219, and submit a properly executed, later-dated proxy or vote in person at the Annual Meeting. Any stockholder or unit holder of record attending the Annual Meeting may vote in person whether or not he or she has previously voted his or her Voting Securities. If your Voting Securities are held for your account by a broker, bank or other institution or nominee ("Broker Securities"), you may vote such securities at the Annual Meeting only if you obtain proper written authority from your institution or nominee and present it at the Annual Meeting. All of our directors are encouraged to attend the Annual Meeting.
Stockholders or unit holders of record may also vote either via the internet or by telephone. Specific instructions to be followed by stockholders or unit holders of record interested in voting via the internet or the telephone are shown on the enclosed proxy card. The internet and telephone voting procedures are designed to authenticate the voter's identity and to allow stockholders or unit holders to vote their Voting Securities and confirm that their instructions have been properly recorded.
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At the Annual Meeting:
1. The stockholders of NMFC will be asked to elect two directors to the board of directors of NMFC, who will serve for a term of three years, or until their successors are duly elected and qualify;
2. The stockholders of AIV Holdings will be asked to elect two directors to the board of directors of AIV Holdings, who will serve for a term of three years, or until their successors are duly elected and qualify;
3. The stockholders of each of NMFC and AIV Holdings, voting on a pass-through basis, and the unit holders of NMF Holdings will be asked to elect two directors of NMF Holdings, who will serve for a term of three years, or until their successors are duly elected and qualify; and
4. Such other business as may properly come before the Annual Meeting will be transacted.
Stockholders of NMFC may vote their shares, in person or by proxy, at the Annual Meeting only if such stockholders wereMarch 25, 2014. Only stockholders of record at the close of business on our record date of March 21, 201328, 2014 (the "Record Date"). On the “Record Date there were 24,356,414”) will be entitled to submit a written consent.
We are incorporated in the State of Delaware and are therefore subject to Title 8 of the Delaware Code. Section 228 of the Delaware General Corporation Law permits the stockholders of a corporation that is incorporated in Delaware to take action without a meeting if the votes represented by consent in writing, setting forth the action so taken, represent a majority of the voting power of the outstanding shares of the NMFC's commoncapital stock outstanding. Each share of NMFC's common stock issuch corporation entitled to one vote.
Unit holdersvote thereon. Our Board of NMF Holdings may vote their units in person or by proxy,Directors determined on March 25, 2014 at an in-person meeting that the Annual Meeting only if such unit holders were unit holdersconsent of the stockholders of record on the Record Date. OnDate must be received on or before April 8, 2014; however, this date may be extended by our Board of Directors in its sole discretion. Accordingly, if we receive the executed consents approving the proposal from a majority of the stockholders of record on the Record Date there were 40,578,352 unitson or before April 8, 2014 (unless the Board of NMF Holdings outstanding. Each unitDirectors extends this date), the proposals set forth herein will be approved.
Voting and Revocability of NMF HoldingsConsent
All written consents that we receive, regardless of when dated, will be treated as expired unless valid, written and unrevoked consents constituting the necessary vote for approval of the proposal are received by us by April 8, 2014 (unless this date is entitledextended by the Board of Directors). You may revoke your consent at any time, provided that we receive a written, signed and dated revocation before the earlier of (i) the date we receive valid, written and unrevoked consents constituting the necessary vote for approval of this proposal or (ii) April 8, 2014 (or, if this date is extended by the Board of Directors, such later date). A revocation may be in any written form validly signed by you, as long as it clearly states that a consent previously given is no longer effective. The revocation should be sent to one vote.
Stockholders ofNew Mountain Finance AIV Holdings Corporation, Attn: Paula Bosco, 787 Seventh Avenue, 48th Floor, New York, New York 10019 by April 8, 2014. Under Delaware law, no consent shall be effective to approve the amendments unless, within 60 days of the earliest dated consent delivered to the Company, written consents signed by the holders of a majority of the outstanding shares of our common stock are delivered to the Company.
We will pay the costs of soliciting these consents. In addition to solicitation by mail, our officers, directors and other regular employees, without additional compensation, may vote their shares, in personsolicit consents personally, by facsimile, by email or by proxy,other appropriate means. Banks, brokers, fiduciaries and other custodians and nominees who forward consent soliciting material to their principals will be reimbursed their customary and reasonable out-of-pocket expenses. This Consent Solicitation Statement and the written consent form are available electronically at the Annual Meeting only if such stockholders werewww.newmountainfinance.com.
Record Date and Consent Rights
Only our stockholders of record atas of the close of business on the Record Date.Date, March 28, 2014, will be entitled to submit a consent on the accompanying form. On the Record Date,that date, there were 100 outstanding shares of AIV Holdings'our common stock, outstanding.all of which were owned by New Mountain Guardian AIV, L.P. Each share of AIV Holdings'our common stock is entitled to one vote.
NMFC and AIV Holdings are holding companies with no direct operations of their own, and their only business and sole assets are their respective ownership of units of NMF Holdings. As ofvote in the Record Date, NMFC and AIV Holdings owned approximately 60.0% and 40.0%, respectively,consent solicitation. Consents evidencing a “majority of the outstanding units of NMF Holdings. Stockholders of NMFC and AIV Holdings will vote on matters relating to NMF Holdings on a pass-through basis.
Stockholders of NMFC and AIV Holdings may vote their proportionate share of NMF Holdings' units held by NMFC and AIV Holdings, respectively, on a pass-through basis, in person or by proxy, at the Annual Meeting only if such stockholders were stockholders of record on the Record Date. Each share of NMFC's common stock entitles the holder to vote one unit of NMF Holdings. On the Record Date, there were 100 sharesshares” of the AIV Holdings' common stock outstanding. Each share of AIV Holdings' common stock entitlesCompany, which is defined under the holder to vote 162,219.4 units of NMF Holdings.
A quorum of NMFC's and AIV Holdings' stockholders, and NMF Holdings' unit holders must be present at the Annual Meeting for any business to be conducted. The presence at the Annual Meeting, in person or by proxy, of (i) the holders of a majority of the shares of NMFC common stock outstanding on the Record Date, (ii) the holders of a majority of the shares of AIV Holdings common stock outstanding on the Record Date, and (iii) the holders of a majority of the membership units of NMF Holdings outstanding on the Record Date, will constitute a quorum. Abstentions will be treated1940 Act as Voting Securities present for quorum purposes. Broker Securities for which the nominee has not
received voting instructions from the record holder and does not have discretionary authority to vote the Voting Securities on certain proposals (which are considered "Broker Non-Votes" with respect to such proposals) will be treated as Voting Securities present for quorum purposes.
If a quorum is not present at the Annual Meeting, the stockholders and unit holders who are represented may adjourn the Annual Meeting 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.
Election of Directors. A nominee for director shall be elected to the board of directors of each New Mountain Finance Entity if the votes cast for such nominee's election exceed the votes cast against such nominee's election. If you vote "Withhold Authority" with respect to a nominee, your shares will not be voted with respect to the person indicated.Abstentions and Broker Non-Votes will not be included in determining the number of votes cast and, as a result, will have no effect on this proposal.
Additional Solicitation. If there are not enough votes to approve any proposals at the Annual Meeting, the stockholders and unit holders who are represented may adjourn the Annual 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 the proposal for which an adjournment is sought, to permit the further solicitation of proxies.
Also, a vote may be taken on one(A) 67% or more of the proposals in this Joint Proxy Statement prior to any such adjournmentvoting securities voting by consent, if there are sufficient votes for approval thereof.
Information Regarding This Solicitation
The New Mountain Finance Entities will bear the expense of the solicitation of proxies for the Annual Meeting, including the cost of preparing, printing and mailing this Joint Proxy Statement, the accompanying Notices of Annual Meeting of Stockholders or Unit Holders and proxy card(s). We have requested that brokers, nominees, fiduciaries and other persons holding Voting Securities 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. We will reimburse such persons for their reasonable expenses in so doing.
In addition to the solicitation of proxies by the use of the mail, proxies may be solicited in person and by telephone or facsimile transmission by directors, officers or employees of the New Mountain Finance Entities, NMF Holdings' investment adviser, New Mountain Finance Advisers BDC, L.L.C. (the "Investment Adviser"), or the New Mountain Finance Entities' administrator, New Mountain Finance Administration, L.L.C. (the "Administrator"), without special compensation therefor.
Holders of Voting Securities may also provide their voting instructions by telephone or through the internet. These options require holders of Voting Securities to input the Control Number which is located on each proxy card. After inputting this number, holders of Voting Securities will be prompted to provide their voting instructions. Holders of Voting Securities will have an opportunity to review their voting instructions and make any necessary changes before submitting their voting instructions and terminating their telephone call or internet link. Holders of Voting Securities who vote via the internet, in addition to confirming their voting instructions prior to submission, will also receive an e-mail confirming their instructions upon request.
If a holder of Voting Securities wishes to participate in the Annual Meeting, but does not wish to give a proxy by telephone or electronically, the holder of Voting Securities may still submit the proxy card originally sent with this Joint Proxy Statement or attend in person.
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 or unit holder in the same manner as the proxy being revoked and delivered to the New Mountain Finance Entities' proxy tabulator.
The principal business address of both the Investment Adviser and the Administrator is 787 Seventh Avenue, 48th Floor, New York, NY 10019.
Control Persons and Principal Stockholders
The following table sets forth information with respect to the beneficial ownership of NMFC's common stock, AIV Holdings' common stock and the units of NMF Holdings by:
•each person known to the New Mountain Finance Entities to beneficially own 5.0% ormore than 50% of the outstanding voting securities of the Company are represented by consent or (B) more than 50% of the outstanding voting securities of the Company, whichever is the less, are required in order to approve this proposal. To be counted toward the votes required for approval of the proposal, your consent must be delivered to us on or before April 8, 2014 (unless this date is extended by our Board of Directors). Abstentions and broker non-votes are treated as sharesof NMFC's common stock, AIV Holdings' common stock or units of NMF Holdings;•each of NMFC's directorspresent, andeach executive officer individually; and•all of NMFC's directors and executive officerswill be counted as agroup.
Beneficial ownership has been determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and includes voting or investment power (including the power to dispose) with respect to the securities and assumes no other purchases or sales of securities since the most recently available Securities and Exchange Commission ("SEC") filings. This assumption has been made under the rules and regulations of the SEC and does not reflect any knowledge that the New Mountain Finance Entities have with respect to the present intent of the beneficial owners of the securities listed in the table below.“no” vote.
Percentage of beneficial ownership below takes into account 24,356,414 shares of common stock of NMFC outstanding and 40,578,352 units of NMF Holdings outstanding, in each case as of the Record
Table of ContentsPROPOSAL TO BE ACTED UPON BY STOCKHOLDER:
TO AUTHORIZE THE BOARD OF DIRECTORS OF THE COMPANY TO WITHDRAW THE COMPANY’S ELECTION TO BE REGULATED AS A BUSINESS
DEVELOPMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940
Date. Unless otherwise indicated, the address for each listed holder is c/o New Mountain Finance Corporation, 787 Seventh Avenue, 48th Floor, New York, NY 10019.
| | | | | NMF Holdings' Units(1) | |||||||||||
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| | | NMFC Shares(1) | |||||||||||||
| | Type of Ownership in NMFC(2) | ||||||||||||||
Name | Number | Percentage | Number | Percentage | |||||||||||
Beneficial Owners of More than 5.0%: | |||||||||||||||
New Mountain Guardian AIV, L.P.(3) | Beneficial | 16,221,938 | 40.0 | % | 16,221,938 | 40.0 | % | ||||||||
New Mountain Investments III, L.L.C.(3) | Beneficial | 16,221,938 | 40.0 | % | 16,221,938 | 40.0 | % | ||||||||
New Mountain Finance AIV Holdings Corporation(3) | Beneficial | 16,221,938 | 40.0 | % | 16,221,698 | 40.0 | % | ||||||||
New Mountain Finance Corporation | N/A | — | * | 24,356,414 | 60.0 | % | |||||||||
Ameriprise Financial, Inc.(4) | Direct | 2,034,081 | 5.0 | % | 2,034,081 | 5.0 | % | ||||||||
Executive Officers: | |||||||||||||||
Paula A. Bosco | Direct | 10,482 | * | 10,482 | * | ||||||||||
David M. Cordova | Direct | — | * | — | * | ||||||||||
John R. Kline | Direct | 12,800 | * | 12,800 | * | ||||||||||
Interested Directors: | |||||||||||||||
Steven B. Klinsky(3)(5) | Direct and Beneficial | 18,559,927 | 45.7 | % | 18,559,927 | 45.7 | % | ||||||||
Robert A. Hamwee | Direct | 102,750 | * | 102,750 | * | ||||||||||
Adam B. Weinstein | Direct | 20,227 | * | 20,227 | * | ||||||||||
Independent Directors: | |||||||||||||||
Albert F. Hurley, Jr. | Direct | 15,056 | * | 15,056 | * | ||||||||||
David R. Malpass | Direct | 62,411 | * | 62,411 | * | ||||||||||
David Ogens | Direct | 12,391 | * | 12,391 | * | ||||||||||
Kurt J. Wolfgruber | Direct | 16,817 | * | 16,817 | * | ||||||||||
All executive officers and directors as a group (10 persons)(3) | Direct and Beneficial | 18,812,861 | 46.4 | % | 18,812,861 | 46.4 | % | ||||||||
*Represents less than 1.0%.(1)All units of NMF Holdings are held indirectly by the below-listed parties, other than units held byAIV Holdingsand NMFC. Some or all of the units of NMF Holdings, other than units held by NMFC, can be exchanged at any time and from time to timeis a Delaware corporation that was originally incorporated ona one-for-one basis into shares of NMFC.(2)Direct holders of NMFC's common stock have voting power on a pass-through basis over the same number of units of NMF Holdings and, therefore, may be deemed to beneficially own such units of NMF Holdings.(3)- March 11, 2011. Guardian AIV, a Delaware limited partnership, is the sole stockholder of AIV Holdings. AIV Holdings is a closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the
right to exchange1940 Act. AIV Holdings is a holding company with no direct operations of its own, and until the completion of the final secondary offering on February 3, 2014, its only business and sole asset was its ownership of common membership units ofNMFNew Mountain Finance Holdings, L.L.C. (the “Operating Company”).The Operating Company is a Delaware limited liability company. The Operating Company is externally managed and has elected to be regulated as a BDC under the 1940 Act. The Operating Company is externally managed by New Mountain Finance Advisers BDC, L.L.C. (the “Investment Adviser”). New Mountain Finance Administration, L.L.C. (the “Administrator”) provides the administrative services necessary for
sharesthe Operating Company’s operations. The Investment Adviser and Administrator are wholly-owned subsidiaries ofNMFC's common stock onNew Mountain Capital (defined as New Mountain Capital Group, L.L.C. and its affiliates). New Mountain Capital is aone-for-one basis. If AIV Holdings chooses to exchangefirm with a track record of investing in the middle market and with assets under management (which includes amounts committed, not all ofits unitswhich have been drawn down and invested to date) totaling approximately $12.0 billion as ofNMF Holdings, AIV Holdings would receive 16,221,938 shares of NMFC's common stock.December 31, 2013. Thegeneral partnerOperating Company, formerly known as New Mountain Guardian (Leveraged), L.L.C., was originally formed as a subsidiary of Guardian AIVisby New MountainInvestments III, L.L.C.,Capital in October 2008. Guardian AIV was formed through an allocation ofwhich Steven B. Klinsky isapproximately $300.0 million of themanaging member.$5.1 billion of commitments supporting New MountainInvestmentsPartners III, L.P., a private equity fund managed by New Mountain Capital. In February 2009, New Mountain Capital formed a co-investment vehicle, New Mountain Guardian Partners, L.P., comprising $20.4 million of commitments. New Mountain Guardian (Leveraged), L.L.C. and New Mountain Guardian Partners, L.P., together with their respective direct and indirect wholly-owned subsidiaries, are defined as thegeneral partner“Predecessor Entities”.New Mountain Finance Corporation (“NMFC”) is a Delaware corporation that was originally incorporated on June 29, 2010. NMFC is a closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act. On May 19, 2011, NMFC priced its initial public offering (the “IPO”) of 7,272,727 shares of common stock at a public offering price of $13.75 per share. Additionally, 1,252,964 shares were issued to the limited partners of New Mountain Guardian
AIV, has voting power onPartners, L.P. at that time for their ownership interest in the Predecessor Entities. In connection with NMFC’s IPO and through apass-through basis as to its portionseries ofunits of NMF Holdings. In addition, because Guardian AIVtransactions, the Operating Company owns all of thecommon stockoperations of the Predecessor Entities, including all of the assets and liabilities related to such operations.In connection with the IPO, NMFC and AIV Holdings
Guardian AIV may be deemed to beneficially own the units of NMF Holdings held by AIV Holdings. Mr. Klinsky, as the managing member of New Mountain Investments III, L.L.C., has voting power and decision making power over the disposition of the holdings of Guardian AIV oneach entered into apass-through basis. Mr. Klinsky may be deemed to beneficially own the direct or indirect holdings of Guardian AIV. Mr. Klinsky and New Mountain Investments III, L.L.C. expressly disclaim beneficial ownership of the above shares of NMFC common stock and the above units of NMF Holdings. (4)Such securities are held by certain investment vehicles controlled and/or managed by Ameriprise Financial, Inc. or its affiliates. The address for Ameriprise Financial, Inc. is 145 Ameriprise Financial Center, Minneapolis, Minnesota 55474.
(5)Mr. Klinsky directly owns 1,594,673 shares of NMFC's common stock. The Steven B. Klinsky Trust directly owns 99,246 shares of NMFC's common stock. The Steven B. Klinsky Non-GST Exempt Trust holds 565,128 shares. New Mountain Guardian GP, L.L.C. directly owns 78,942 shares of NMFC's common stock and Mr. Klinsky is the sole owner of New Mountain Guardian GP, L.L.C.
The following table sets forth the dollar range of NMFC equity securities, including units of NMF Holdings over which holders of NMFC's common stock have voting power that is beneficially owned by each of NMFC's directors.
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(1)Beneficial ownership has been determined in accordance with Exchange Act Rule 16a-1(a)(2).(2)The dollar range of equity securities beneficially owned in NMFC is based on the closing price for NMFC's common stock of $14.30 per share on the Record Date on the New York Stock Exchange ("NYSE").(3)The dollar range of equity securities beneficially owned are: None, $1 - $10,000, $10,001 - $50,000, $50,001 - $100,000 or over $100,000.(4)Mr. Ogens is the beneficial owner of a limited partnership interest in New Mountain Partners, L.P. and New Mountain Partners II, L.P. that is held by Ogens Family, Inc.
PROPOSALSPROPOSAL 1: ELECTION OF DIRECTORS
Pursuant to each of the New Mountain Finance Entities' governing documents, the boards of directors of each of the New Mountain Finance Entities are divided into three classes. Directors are elected for a staggered term of three years each, with a term of office 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 successor is duly elected and qualifies.
Messrs. Alfred F. Hurley, Jr. and Robert A. Hamwee have each been nominated for election for a three year term expiring in 2016 to the boards of directors of each of the New Mountain Finance Entities. Messrs. Hurley and Hamwee have not been proposed for election pursuant to anyjoinder agreement or understanding between Mr. Hurley or Mr. Hamwee and the New Mountain Finance Entities.
A holder of Voting Securities can vote for or withhold his or her vote from the 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 nominees named below. If a nominee 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 boards of directors as a replacement. The boards of directors have no reason to believe that the persons named below will be unable or unwilling to serve.
THE BOARDS OF DIRECTORS RECOMMEND THAT YOU VOTE "FOR" THE ELECTION OF THE NOMINEES NAMED IN THIS JOINT PROXY STATEMENT.
Information about the Nominees and Directors
As described below under "Committees of the Board of Directors—Nominating and Corporate Governance Committee", the boards of directors of the New Mountain Finance Entities have identified certain desired attributes for director nominees. Each of the directors and the director nominees have demonstrated high character and integrity, superior credentials and recognition in his respective field and the relevant expertise and experience upon which to be able to offer advice and guidance to our management. Each of the directors and the director nominees also have sufficient time available to devote to the affairs of the New Mountain Finance Entities, are able to work with the other members of the boards of directors and contribute to the success of the New Mountain Finance Entities and can represent the long-term interests of the New Mountain Finance Entities' stockholders or unit holders, as applicable, as a whole. The New Mountain Finance Entities' directors and the director nominees have been selected such that the boards of directors represent a range of backgrounds and experience.
Certain information, as of the Record Date, with respect to the nominees for election at the Annual 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 New Mountain Finance Entities, 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 each of the New Mountain Finance Entities, in light of their business and structure.
The business address of the nominees and the directors listed below is 787 Seventh Avenue, 48th Floor, New York, New York 10019.
Nominees for DirectorNominees for Class II Director—Term Expiring 2016
Mr. Hamwee is an "interested person" of the New Mountain Finance Entities as defined in the Investment Company Act of 1940, as amended (the "1940 Act") due to his position as the President and Chief Executive Officer of the New Mountain Finance Entities.
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Mr. Hamwee's depth of experience in managerial operational positions in investment management and financial services and as a member of other corporate boards of directors, as well as his intimate knowledge of the business and operations of the New Mountain Finance Entities, provides the boards of directors' valuable industry- and company-specific knowledge and expertise.
Mr. Hurley is not an "interested person" of the New Mountain Finance Entities as defined in the 1940 Act.
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Mr. Hurley brings his experience in risk management as well as his experience in the banking and money management industries to the boards of directors of the New Mountain Finance Entities. This background positions Mr. Hurley well to serve as a director of the New Mountain Finance Entities.
Current DirectorsClass I Directors—Term Expiring 2015
Mr. Ogens is not an "interested person" of the New Mountain Finance Entities as defined in 1940 Act.
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Mr. Ogens brings his experience in wealth management and investment banking, including experience with debt issuances, as well as industry-specific expertise in the healthcare industry to the New Mountain Finance Entities' boards of directors. This background positions Mr. Ogens well to serve as a director of the New Mountain Finance Entities.
Mr. Weinstein is an "interested person" of the New Mountain Finance Entities as defined in 1940 Act due to his positions as Chief Administrative Officer and Executive Vice President of the New Mountain Finance Entities.
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Mr. Weinstein brings his industry-specific expertise and background in accounting to the New Mountain Finance Entities' boards of directors. This background positions Mr. Weinstein well to serve as a director of the New Mountain Finance Entities.
Class III Directors—Term Expiring 2014
Mr. Klinsky is an "interested person" of the New Mountain Finance Entities as defined in the 1940 Act due to his position as the Founder and Chief Executive Officer of New Mountain Capital, L.L.C. since its inception in 1999.
From his experience as an executive or director of public and private companies of financial advisory and private equity companies, Mr. Klinsky brings broad financial advisory and investment management expertise to the boards of directors. Mr. Klinsky's intimate knowledge of the business and operations of the New Mountain Finance Entities, as the Founder and Chief Executive Officer of New Mountain Capital, L.L.C. and his experience as a board member or chairman of other publicly-held companies, positions him well to serve as the chairman of the New Mountain Finance Entities' boards of directors.
Mr. Wolfgruber is not an "interested person" of the New Mountain Finance Entities as defined in the 1940 Act.
Mr. Wolfgruber brings experience in portfolio management and his abilities as a chartered financial analyst to the board of directors of the New Mountain Finance Entities. This background positions Mr. Wolfgruber well to serve as a director of the New Mountain Finance Entities.
(1)The business address of the director nominees and other directors and executive officers is c/o New Mountain Finance Corporation, 787 Seventh Avenue, 48thFloor, New York, New York 10019.
Information about Executive Officers Who Are Not Directors
The following information, as of the Record Date, pertains to the executive officers who are not directors or nominees for election as directors of the New Mountain Finance Entities.
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(1)The business address of the executive officers is c/o New Mountain Finance Corporation, 787 Seventh Avenue, 48thFloor, New York, New York 10019.
In accordance with rules of the NYSE, the New Mountain Finance Entities' boards of directors annually determine each director's independence. We do not consider a director independent unless the boards of directors have determined that he 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.
Our governance guidelines, which are available on the New Mountain Finance Entities' website athttp://www.newmountainfinance.com, require any director who has previously been determined to be independent to inform the chairman of the boards of directors, the chairman of the nominating and corporate governance committees and the corporate secretary of any change in circumstance that may cause his status as an independent director to change. The boards of directors limit membership on the audit committees, the valuation committees, the nominating and corporate governance committees and the compensation committees to independent directors. In order to evaluate the materiality of any such relationship, the boards of directors use the definition of director independence set forth in the corporate governance listing standards promulgated by the NYSE.
The boards of directors have determined that each of the directors and the director nominees are independent and has no relationship with us, except as a director and stockholder of NMFC, with the exception of Steven B. Klinsky, as a result of his positions as founder and chief executive officer of New Mountain Capital, L.L.C., Robert A. Hamwee, as a result of his positions as chief executive officer and president of the New Mountain Finance Entities and Adam B. Weinstein, as a result of his
positions as chief administrative officer and executive vice president of the New Mountain Finance Entities.
The New Mountain Finance Entities' boards of directors monitor and perform an oversight role with respect to the New Mountain Finance Entities' businesses and affairs, compliance with regulatory requirements and the services, expenses and performance of service providers to the New Mountain Finance Entities. Among other things, the New Mountain Finance Entities' boards of directors approve the appointment of the Administrator and officers, review and monitor the services and activities performed by the Administrator and officers and approve the engagement, and review the performance of, the New Mountain Finance Entities' independent public accounting firm.
Under the New Mountain Finance Entities' bylaws, the New Mountain Finance Entities' boards of directors may designate a chairman to preside over the meetings of the boards of directors and meetings of the stockholders/unit holders and to perform such other duties as may be assigned to him by the boards of directors. The New Mountain Finance Entities do not have a fixed policy as to whether the chairman of the boards should be an independent director and believe that they 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 the New Mountain Finance Entities and their stockholders/unit holders at such times.
Mr. Klinsky currently serves as the chairman of the New Mountain Finance Entities' boards of directors. Mr. Klinsky is an "interested person" of the New Mountain Finance Entities as defined in Section 2(a)(19) of the 1940 Act because he is the Founder and Chief Executive Officer of New Mountain Capital, L.L.C., serves on the investment committee of the Investment Adviser and is the managing member of the sole member of the Investment Adviser. The New Mountain Finance Entities believe that Mr. Klinsky's history with New Mountain Capital, L.L.C., familiarity with our investment objectives and investment strategy, and extensive knowledge of the financial services industry and the investment valuation process in particular qualify him to serve as the chairman of the New Mountain Finance Entities' boards of directors. The New Mountain Finance Entities believe that, at present, they are best served through this leadership structure, as Mr. Klinsky's relationship with the Investment Adviser and New Mountain Capital, L.L.C., provides an effective bridge and encourages an open dialogue between the New Mountain Finance Entities' management and their boards of directors, ensuring that all groups act with a common purpose.
The New Mountain Finance Entities' boards of directors do not currently have a designated lead independent director. The New Mountain Finance Entities are aware of the potential conflicts that may arise when a non-independent director is chairman of the boards of directors, but believe these potential conflicts are offset by their strong corporate governance policies. The New Mountain Finance Entities' corporate governance policies include regular meetings of the independent directors in executive session without the presence of interested directors and management over which the Chairman of the Audit Committee presides, the establishment of audit and nominating and corporate governance committees comprised solely of independent directors and the appointment of a chief compliance officer, with whom the independent directors meet regularly without the presence of interested directors and other members of management, for administering the New Mountain Finance Entities' compliance policies and procedures.
The New Mountain Finance Entities recognize that different board leadership structures are appropriate for companies in different situations. The New Mountain Finance Entities intend to re-examine their corporate governance policies on an ongoing basis to ensure that they continue to meet their needs.
Boards of Directors' Role In Risk Oversight
The New Mountain Finance Entities' boards of directors perform their risk oversight function primarily through (1) their four standing committees which report to the boards of directors, each of which are comprised solely of independent directors and (2) active monitoring by the New Mountain Finance Entities' chief compliance officer and their compliance policies and procedures. In addition, the New Mountain Finance Entities' boards of directors rely on the risk oversight function of NMF Holdings' board of directors.
The New Mountain Finance Entities' audit committees and nominating and corporate governance committees assist their boards of directors in fulfilling their risk oversight responsibilities. The audit committees' risk oversight responsibilities include overseeing the New Mountain Finance Entities' accounting and financial reporting processes, their systems of internal controls regarding finance and accounting, and audits of the New Mountain Entities' financial statements, including the independence of the New Mountain Finance Entities' independent auditors. The nominating and corporate governance committees' risk oversight responsibilities include selecting, researching and nominating directors for election by the New Mountain Finance Entities' stockholders/unit holders, developing and recommending to the boards of directors a set of corporate governance principles and overseeing the evaluation of the boards of directors and the New Mountain Finance Entities' management. The valuation committees are responsible for making recommendations in accordance with the valuation policies and procedures adopted by the boards of directors of the New Mountain Finance Entities, reviewing valuations and any reports of independent valuation firms, confirming that valuations are made in accordance with the valuation policies of the boards of directors of the New Mountain Finance Entities, reporting any deficiencies or violations of such valuation policies to the boards of directors on at least a quarterly basis and reviewing other matters that the boards of directors or the valuation committees deem appropriate.
The New Mountain Finance Entities' boards of directors perform their risk oversight responsibilities with the assistance of the chief compliance officer. The boards of directors quarterly review a written report from the chief compliance officer discussing the adequacy and effectiveness of the New Mountain Finance Entities' compliance policies and procedures and their service providers. The chief compliance officer's quarterly report addresses at a minimum:
•the operation of the New Mountain Finance Entities' compliance policies and procedures and their service providers since the last report;•any material changes to these policies and procedures since the last report;•any recommendations for material changes to these policies and procedures as a result of the chief compliance officer's annual review; and•any compliance matter that has occurred since the date of the last report about which the boards of directors would reasonably need to know to oversee the New Mountain Finance Entities' compliance activities and risks.
In addition, the chief compliance officer meets separately in executive session with the independent directors at least once each year.
The New Mountain Finance Entities believe that their boards of directors' role in risk oversight is effective, and appropriate given the extensive regulation to which they are subject as business development companies. The New Mountain Finance Entities are required to comply with certain regulatory requirements that control the levels of risk in the New Mountain Finance Entities' businesses and operations. Since NMFC and AIV Holdings have no assets other than their ownership of units of NMF Holdings and have no material long-term liabilities, NMFC and AIV Holdings look to the assets of NMF Holdings for purposes of satisfying these requirements. For example, the NMF
Holdings' ability to incur indebtedness is limited because its asset coverage must equal at least 200.0% immediately after it incurs indebtedness, NMF Holdings generally has to invest at least 70.0% of its total assets in "qualifying assets" and is not generally permitted to invest in any portfolio company in which one of its affiliates currently has an investment.
The New Mountain Finance Entities recognize that different boards of director roles in risk oversight are appropriate for companies in different situations. The New Mountain Finance Entities intend to re-examine the manners in which the boards of directors administer their oversight function on an ongoing basis to ensure that they continue to meet the New Mountain Finance Entities' needs.
Committees of the Boards of Directors
The New Mountain Finance Entities' boards of directors have each established an audit committee, a nominating and corporate governance committee, a compensation committee and a valuation committee. The members of each committee have been appointed by the boards of directors of the New Mountain Finance Entities and serve until their successor is elected and qualifies, unless they are removed or resign. During 2012, the boards of directors of the New Mountain Finance Entities held eight boards of directors meetings, five audit committee meetings, five nominating and corporate governance committee meetings, two compensation committee meetings and eight valuation committee meetings. All directors attended at least 75.0% of the aggregate number of meetings of the boards of directors and of the respective committees of each of the New Mountain Finance Entities on which they serve. We require each director to make a diligent effort to attend all board and committee meetings as well as each annual meeting of the New Mountain Finance Entities' stockholders/unit holders.
Audit Committees
The audit committees operate pursuant to charters approved by the New Mountain Finance Entities' boards of directors, copies of which are available on the New Mountain Finance Entities' website athttp://www.newmountainfinance.com. The charters set forth the responsibilities of the audit committees. The audit committees are responsible for recommending the selection of, engagement of and discharge of the New Mountain Finance Entities' independent auditors, reviewing the plans, scope and results of the audit engagement with the independent auditors, approving professional services provided by the independent auditors (including compensation therefore), reviewing the independence of the independent auditors and reviewing the adequacy of the New Mountain Finance Entities' internal controls over financial reporting. The members of the audit committees are Alfred F. Hurley, Jr., David Ogens, David R. Malpass and Kurt J. Wolfgruber, each of whom is not an interested person of the New Mountain Finance Entities for purposes of the 1940 Act and is independent for purposes of the NYSE's corporate governance listing standards. Kurt J. Wolfgruber serves as the chairman of the audit committees, and the New Mountain Finance Entities' boards of directors have determined that Alfred F. Hurley, Jr., David Ogens and Kurt J. Wolfgruber are "audit committee financial experts" as that term is defined under Item 407 of Regulation S-K, as promulgated under the Exchange Act, and that each of them meets the current independence and experience requirements of Rule 10A-3 of the Exchange Act.
Nominating and Corporate Governance Committees
The nominating and corporate governance committees operate pursuant to charters approved by the New Mountain Finance Entities' boards of directors, copies of which are available on the New Mountain Finance Entities' website athttp://www.newmountainfinance.com. The charters set forth the responsibilities of the nominating and corporate governance committees. The nominating and corporate governance committees are responsible for determining criteria for service on the boards of directors identifying, researching and nominating directors for election by the New Mountain Finance Entities'
stockholders/unit holders, selecting nominees to fill vacancies on the New Mountain Finance Entities' boards of directors or committees of the boards of directors, developing and recommending to the boards of directors a set of corporate governance principles and overseeing the self-evaluation of the boards of directors and their committees and evaluation of the New Mountain Finance Entities' management. The nominating and corporate governance committees consider nominees properly recommended by the New Mountain Finance Entities' stockholders/unit holders. The members of the nominating and corporate governance committees are Alfred F. Hurley, Jr., David Ogens, David R. Malpass and Kurt J. Wolfgruber, each of whom is not an interested person of the New Mountain Finance Entities for purposes of the 1940 Act and is independent for purposes of the NYSE's corporate governance listing standards. Alfred F. Hurley, Jr. serves as the chairman of the nominating and corporate governance committees.
The nominating and corporate governance committees seek candidates who possess the background, skills and expertise to make a significant contribution to the boards of directors, the New Mountain Finance Entities and their stockholders/unit holders. In considering possible candidates for election as a director, the nominating and corporate governance committees take into account, in addition to such other factors as they deem relevant, the desirability of selecting directors who:
•are of high character and integrity;•are accomplished in their respective fields, with superior credentials and recognition;•have relevant expertise and experience upon which to be able to offer advice and guidance to management;•have sufficient time available to devote to the affairs of the New Mountain Finance Entities;•are able to work with the other members of the boards of directors and contribute to the success of the New Mountain Finance Entities;•can represent the long-term interests of the New Mountain Finance Entities' stockholders/unit holders as a whole; and•are selected such that the boards of directors represent a range of backgrounds and experience.
The nominating and corporate governance committees have not adopted formal policies with regard to the consideration of diversity in identifying director nominees. In determining whether to recommend a director nominee, the nominating and corporate governance committees consider and discuss diversity, among other factors, with a view toward the needs of the boards of directors as a whole. The nominating and corporate governance committees generally conceptualize 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 the boards of directors, when identifying and recommending director nominees. The nominating and corporate governance committees believe that the inclusion of diversity as one of many factors considered in selecting director nominees is consistent with the nominating and corporate governance committees' goal of creating boards of directors that best serve the needs of the New Mountain Finance Entities and the interest of their stockholders/unit holders.
Compensation Committees
The compensation committees operate pursuant to charters approved by the New Mountain Finance Entities' boards of directors, copies of which are available on the New Mountain Finance Entities' website athttp://www.newmountainfinance.com. The charters set forth the responsibilities of the compensation committees. The compensation committees are responsible for periodically reviewing director compensation and recommending any appropriate changes to the boards of directors. In addition, although the New Mountain Finance Entities do not directly compensate their executive
officers currently, to the extent that it does so in the future, the compensation committees would also be responsible for reviewing and evaluating their compensation and making recommendations to the boards of directors regarding their compensation. Lastly, the compensation committees would produce a report on the New Mountain Finance Entities' 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 boards of directors on the New Mountain Finance Entities' executive compensation practices and policies. The compensation committees have the authority to engage compensation consultants, although they do not currently do so, and to delegate their duties and responsibilities to a member or to a subcommittee of the compensation committees. The compensation committees are composed of Alfred F. Hurley, Jr., David Ogens, David R. Malpass and Kurt J. Wolfgruber, each of whom is not an interested person of the New Mountain Finance Entities for purposes of the 1940 Act and is independent for purposes of the NYSE's corporate governance listing standards. Alfred F. Hurley, Jr. serves as chairman of the compensation committees.
Valuation Committees
The valuation committees operate pursuant to charters approved by the New Mountain Finance Entities' boards of directors, copies of which are available on the New Mountain Finance Entities' website athttp://www.newmountainfinance.com. The charters set forth the responsibilities of the valuation committees. The valuation committees are responsible for making recommendations in accordance with the valuation policies and procedures adopted by the boards of directors of the New Mountain Finance Entities, reviewing valuations and any reports of independent valuation firms, confirming that valuations are made in accordance with the valuation policies of the boards of directors of the New Mountain Finance Entities and reporting any deficiencies or violations of such valuation policies to the boards of directors on at least a quarterly basis, and reviewing other matters that the boards of directors or the valuation committees deem appropriate. The valuation committees are composed of Alfred F. Hurley, Jr., David Ogens, David R. Malpass and Kurt J. Wolfgruber, each of whom is not an interested person of the New Mountain Finance Entities for purposes of the 1940 Act and is independent for purposes of the NYSE's corporate governance listing standards. David Ogens serves as chairman of the valuation committees.
Communication with the Board of Directors
Stockholders/unit holders and all other interested parties with questions about the New Mountain Finance Entities are encouraged to contact the New Mountain Finance Entities via the "Contact Us" page on the New Mountain Finance Entities' website athttp://www.newmountainfinance.com. However, if stockholders/unit holders believe that their questions have not been addressed, they may communicate with the New Mountain Finance Entities' boards of directors by sending their communications to New Mountain Finance Corporation, c/o Paula A. Bosco, Corporate Secretary, 787 Seventh Avenue, 48th Floor, New York, New York 10019. All stockholder/unit holder communications received in this manner will be delivered to one or more members of the boards of directors.
The New Mountain Finance Entities have adopted a code of ethics which applies to, among others, their senior officers, including their Chief Executive Officer and their Chief Financial Officer, as well as every officer, director and employee of the New Mountain Finance Entities. The New Mountain Finance Entities code of ethics can be accessed via their website athttp://www.newmountainfinance.com. The New Mountain Finance Entities intend to disclose amendments to or waivers from a required provision of the code of ethics on Form 8-K.
The following table sets forth the compensation of the New Mountain Finance Entities' directors for the year ended December 31, 2012.
Name | Fees Paid in Cash(1) | All Other Compensation(2) | Total | |||||||
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Interested Directors | ||||||||||
Steven B. Klinsky | — | — | — | |||||||
Robert A. Hamwee | — | — | — | |||||||
Adam B. Weinstein(3) | — | — | — | |||||||
Adam B. Collins(4) | — | — | — | |||||||
Independent Directors | ||||||||||
David Ogens | $ | 96,000 | — | $ | 96,000 | |||||
Alfred F. Hurley, Jr. | $ | 91,250 | — | $ | 91,250 | |||||
Kurt J. Wolfgruber | $ | 96,500 | — | $ | 96,500 | |||||
David R. Malpass(3) | $ | 64,417 | — | $ | 64,417 | |||||
Daniel Hébert(4) | $ | — | — | $ | — | |||||
(1)For a discussion of the independent directors' compensation, see below.(2)We do not maintain a stock or option plan, non-equity incentive plan or pension plan for our directors(3)Messrs. Malpass and Weinstein joined the boards of directors as of July 31, 2012.(4)Messrs. Collins and Hébert resigned from the boards of directors as of March 7, 2012.
The independent directors of the New Mountain Finance Entities receive an annual retainer fee of $75,000 and further receive a fee of $2,500 for each regularly scheduled board of directors meeting and a fee of $1,000 for each special board of directors meeting as well as reimbursement of reasonable and documented out-of-pocket expenses incurred in connection with attending each board of directors meeting. In addition, the chairman of the audit committees receive an annual retainer of $7,500, while the chairman of the valuation committees, the chairman of the compensation committees and the chairman of the nominating and corporate governance committees receive annual retainers of $5,000, $1,000 and $1,000, respectively. All fees payable to the New Mountain Finance Entities' directors are paid by NMF Holdings. No compensation is paid to directors who are interested persons of the New Mountain Finance Entities as defined in the 1940 Act.
Compensation of Executive Officers
None of the New Mountain Finance Entities' executive officers receive direct compensation from the New Mountain Finance Entities. The New Mountain Finance Entities do not engage any compensation consultants. The compensation of the principals and other investment professionals of the Investment Adviser is paid by the Investment Adviser. Compensation paid to the New Mountain
Finance Entities' chief financial officer and chief compliance officer is set by the Administrator and is subject to reimbursement by NMF Holdings of the allocable portion of such compensation for services rendered to the New Mountain Finance Entities.
NMFC and NMF Holdings have entered into indemnification agreements with their respective directors. The indemnification agreements are intended to provide the directors the maximum indemnification permitted under Delaware law and the 1940 Act. Each indemnification agreement provides that NMFC or NMF Holdings, as applicable, shall indemnify the director who is a party to the agreement, or an Indemnitee, including the advancement of legal expenses, if, by reason of his corporate status, the Indemnitee is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed proceeding, to the maximum extent permitted by Delaware law and the 1940 Act. Any amounts owing by NMFC to any Indemnitee pursuant to the indemnification agreements will be payable by NMF Holdings.
Certain Relationships and Transactions
Together, NMFC and AIV Holdings own all the outstanding units of NMF Holdings. As of the Record Date, NMFC and AIV Holdings owned approximately 60.0% and 40.0%, respectively, of the units of NMF Holdings.
NMF Holdings has entered into an Investment Advisory and Management Agreement with the Investment Adviser. Pursuant to the Investment Advisory and Management Agreement, payments will be equal to (a) a base management fee of 1.75% of the value of NMF Holdings' gross assets and (b) an incentive fee based on NMF Holdings' performance. Steven B. Klinsky, through his financial interest in the Investment Adviser, is entitled to a portion of any profits earned by the Investment Adviser, which includes any fees payable to the Investment Adviser under the terms of the Investment Advisory and Management Agreement, less expenses incurred by the Investment Adviser in performing its services under the Investment Advisory and Management Agreement. In addition, the New Mountain Finance Entities' executive officers and directors, as well as the current or future members of the Investment Adviser, serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as the New Mountain Finance Entities do or of investment funds managed by the New Mountain Finance Entities' affiliates. Accordingly, they may have obligations to investors in those entities, the fulfillment of which might not be in the best interests of NMF Holdings, NMFC or NMFC's stockholders.
Although NMF Holdings is currently New Mountain Capital, L.L.C.'s only vehicle focused primarily on investing in first and second lien debt, unsecured notes and mezzanine securities, in the future, the principals of the Investment Adviser and/or New Mountain Capital, L.L.C. employees that provide services pursuant to the Investment Advisory and Management Agreement may manage other funds which may from time to time have overlapping investment objectives with NMF Holdings' and, accordingly, may invest in, whether principally or secondarily, asset classes similar to those targeted by NMF Holdings. If this occurs, the Investment Adviser may face conflicts of interest in allocating investment opportunities to NMF Holdings and such other funds. Although the investment professionals will endeavor to allocate investment opportunities in a fair and equitable manner, it is possible that NMF Holdings may not be given the opportunity to participate in certain investments made by investment funds managed by the Investment Adviser or persons affiliated with the Investment Adviser or that certain of these investment funds may be favored over NMF Holdings. When these investment professionals identify an investment, they will be forced to choose which investment fund should make the investment. Alternatively, depending on the availability of such investment and other appropriate factors, the Investment Adviser or its affiliates may determine that NMF Holdings should invest side-by-side with one or more other funds. Any such investments will be made only to the extent permitted by applicable law and interpretive positions of the SEC and its staff, and consistent with the Investment Adviser's allocation procedures.
The New Mountain Finance Entities have entered into an administration agreement, as amended and restated (the "Administration Agreement"), with the Administrator. The Administrator arranges office space for the New Mountain Finance Entities and provides office equipment and administrative services necessary to conduct their respective day-to-day operations pursuant to the Administration Agreement. NMF Holdings reimburses the Administrator for the allocable portion of overhead and other expenses incurred by it in performing its obligations to the New Mountain Finance Entities under the Administration Agreement, including rent, the fees and expenses associated with performing administrative, finance, and compliance functions, and the compensation of the New Mountain Finance Entities' chief financial officer and chief compliance officer and their respective staffs. Pursuant to the Administration Agreement, and further restricted by NMF Holdings, expenses payable to the Administrator by NMF Holdings as well as other direct and indirect expenses (excluding interest, other credit facility expenses, trading expenses and management and incentive fees) has been capped at $3.5 million for the time period from April 1, 2012 to March 31, 2013.
The New Mountain Finance Entities, the Investment Adviser and the Administrator, have also entered into a Trademark License Agreement, as amended, with New Mountain Capital, L.L.C., pursuant to which New Mountain Capital, L.L.C. has agreed to grant each of the New Mountain Finance Entities, the Investment Adviser and the Administrator, a non-exclusive, royalty-free license to use the New Mountain and the New Mountain Finance names. Under the Trademark License Agreement, as amended, subject to certain conditions, NMFC, NMF Holdings, AIV Holdings, the Investment Adviser and the Administrator, will have a right to use the New Mountain and the New Mountain Finance names, for so long as the Investment Adviser or one of its affiliates remains the investment adviser of NMF Holdings. Other than with respect to this limited license, NMFC, NMF Holdings, AIV Holdings, the Investment Adviser and the Administrator, will have no legal right to the New Mountain and the New Mountain Finance names.
NMFC and AIV Holdings have entered into joinder agreements with respect to the Amended and Restated Limited Liability Company Agreement, as amended and restated, of NMF Holdingsthe Operating Company, pursuant to which NMFC and AIV Holdings were admitted as members of the NMF Holdings. ConcurrentlyOperating Company. Guardian AIV was the parent of the Operating Company prior to the IPO and, as a result of the transactions completed in connection with the closingIPO, obtained 20,221,938 common membership units in the Operating Company, which Guardian AIV contributed to its newly formed subsidiary, AIV Holdings, in exchange for 100 shares of NMFC's initial publiccommon stock of AIV Holdings, par value $0.01 per share. As a result, Guardian AIV became the sole stockholder of AIV Holdings. Following the IPO, AIV Holdings became a holding company with no direct operations of its own, and its only business and sole asset was its ownership of common membership units of the Operating Company without any material long-term liabilities. AIV Holdings’ only source of cash flow from operations was distributions from the Operating Company. AIV Holdings had the right to exchange all or any portion of its common membership units in the Operating Company for shares of NMFC’s common stock on a one-for-one basis at any time.
This structure was designed to generally prevent NMFC and its stockholders from being allocated taxable income with respect to unrecognized gains that existed at the time of the IPO in the Predecessor Entities’ assets, and rather such amounts would be allocated generally to AIV Holdings and Guardian AIV. The result was that any distributions made to NMFC’s stockholders that may have been attributable to such gains generally would not have been treated as taxable dividends but rather as return of capital.
Since the IPO through the completion of the final secondary offering on February 3, 2014, NMFC sold 2,172,000completed five underwritten secondary offerings of its common stock on behalf of AIV Holdings as the selling stockholder. In connection with these five secondary offerings, AIV Holdings tendered an aggregate of 20,221,938 common membership units of the Operating Company held by AIV Holdings to NMFC in exchange for the net proceeds (after deducting underwriting discounts and commissions) of these five secondary offerings and NMFC issued an aggregate of 20,221,938 shares of its common stock directly to the underwriters for these five secondary offerings. AIV Holdings distributed all of the net proceeds from these five secondary offerings to its sole stockholder, Guardian AIV. With the completion of the final secondary offering on February 3, 2014, AIV Holdings no longer owns any common membership units of the Operating Company.
As a BDC, AIV Holdings has been subject to the 1940 Act, including certain executives and employeesprovisions applicable only to BDCs, although it is exempted from certain provisions of the 1940 Act applicable to registered closed-end investment companies. BDCs generally are provided greater flexibility with respect to management compensation, capital structure, transactions among affiliates and other individuals affiliated with, New Mountain Capital, L.L.C. inmatters than registered closed-end investment companies. Nevertheless, as a separate private placement at the initial public offering price per share.
NMFC entered into a Registration Rights Agreement withBDC, AIV Holdings Steven B. Klinsky (the Chairmanremains subject to significant regulation of our boardsits activities. Accordingly, and after careful consideration of directors), an entity relatedthe 1940 Act requirements applicable to Steven B. KlinskyBDCs, the cost of 1940 Act compliance and a thorough assessment of AIV Holdings’ current business model, AIV Holdings’ Board of Directors has determined that continuation as a BDC is not in the Investment Adviser. Subject to several exceptions,best interests of AIV Holdings and Guardian AIV at the Investment Adviser havepresent time. Specifically, given that AIV Holdings was formed for the right to require NMFC to register for public resale undersole purpose of holding common membership units of the Securities ActOperating Company and AIV Holdings has disposed of 1933,all of the common membership units of the Operating Company that it was holding as amended, all registerable securities that are heldof the completion of the final secondary offering on February 3, 2014, the Board of Directors of AIV Holdings has approved and declared advisable by anyunanimous written consent the withdrawal of them and that they requestAIV Holdings’ election to be registered. Registerable securities subject to the Registration Rights Agreement are shares of NMFC's common stock issued or issuable in exchange for units and any other shares of NMFC's common stock held by AIV Holdings, the Investment Adviser and any of their transferees. The rights under the Registration Rights Agreement can be conditionally exercised by AIV Holdings or the Investment Adviser, meaning that prior to the effectiveness of the registration statement related to the shares, AIV Holdings or the Investment Adviser can withdraw their request to have the shares registered. AIV Holdings and the Investment Adviser may each assign their rights to any person that acquires registerable securities subject to the Registration Rights Agreement and who agrees to be bound by the terms of the Registration Rights Agreement. Steven B. Klinsky (andregulated as a related entity) will have the right to "piggyback", or include his own registrable securities in such a registration.
Holders of registerable securities have "piggyback" registration rights, including AIV Holdings, which means that these holders may include their respective shares in any future registrations of NMFC's equity securities, whether or not that registration relates to a primary offering by NMFC or a secondary offering by or on behalf of any of NMFC's stockholders. AIV Holdings, the Investment
Adviser and Steven B. Klinsky (and a related entity) have priority over NMFC in any registration that is an underwritten offering.
AIV Holdings, the Investment Adviser and Steven B. Klinsky (and a related entity) will be responsible for the expenses of any demand registration (including underwriters' discounts or commissions) and their pro-rata share of any "piggyback" registration. NMFC has agreed to indemnify AIV Holdings, the Investment Adviser and Steven B. Klinsky (and a related entity) with respect to liabilities resulting from untrue statements or omissions in any registration statement filed pursuant to the Registration Rights Agreement, other than untrue statements or omissions resulting from information furnished to NMFC by such parties. AIV Holdings, the Investment Adviser and Steven B. Klinsky (and a related entity) have also agreed to indemnify NFMC with respect to liabilities resulting from untrue statements or omissions furnished by them to NMFC relating to them in any registration statement.
In the ordinary course of business, NMF Holdings may enter into transactions with portfolio companies that may be considered related party transactions. In order to ensure that NMF Holdings does not engage in any prohibited transactions with any persons affiliated with NMF Holdings, NMF Holdings has implemented certain policies and procedures whereby its executive officers screen each of its transactions for any possible affiliations between the proposed portfolio investment, NMF Holdings, companies controlled by NMF Holdings and its employees and directors. NMF Holdings will not enter into any agreements unless and until it is satisfied that doing so will not raise concernsBDC under the 1940 Act or, if such concerns exist, NMFAct. In addition, the Board of Directors has approved and declared advisable for AIV Holdings has taken appropriate actions to seek board review and approval or exemptive relief for such transaction. NMF Holdings' board of directors reviews these procedures on a quarterly basis.
The New Mountain Finance Entities have each adopted a Code of Ethics which applies to, among others, their senior officers, including their respective chief executive officer and chief financial officer, as well as all of their officers, directors and employees. The New Mountain Finance Entities' Codes of Ethics require that all employees and directors avoid any conflict, or the appearance of a conflict, between an individual's personal interests and the New Mountain Finance Entities' interests.
In October 2012, NMF Holdings entered into an agreement with North Sea Partners, L.P. ("North Sea") to assist in identifying counterparty investment opportunities for NMF Holdings. Mr. Daniel Hébert, a former director of NMF Holdings, is managing director of North Sea and has joint primary responsibility for carrying out and delivering such services to NMF Holdings on behalf of North Sea.
Board Considerationterminate its registration under Section 12(g) of the Investment AdvisorySecurities Exchange Act of 1934, as amended (the “1934 Act”) and Management Agreement
to dissolve AIV Holdings under the laws of the State of Delaware.
NMF Holdings' board of directors determined at an in-person meeting held on February 23, 2012, to approve the Amended and Restated Investment Advisory and Management Agreement between NMF Holdings and the Investment Adviser. In its consideration of the approval of the Amended and Restated Investment Advisory and Management Agreement, the board of directors of NMF Holdings focused on information it had received relating to, among other things:
•the nature, quality and extent of the advisory and other services to be provided to NMF Holdings by the Investment Adviser;Timeline•comparative data with respect to advisory fees or similar expenses paid by other business development companies with similar investment objectives;•NMF Holdings' projected operating expenses and expense ratio compared to business development companies with similar investment objectives;•any existing and potential sources of indirect income to the Investment Adviser or the Administrator from their relationships with NMF Holdings and the profitability of those
•information about the services to be performed and the personnel performing such services under the Amended and Restated Investment Advisory and Management Agreement;•the organizational capability and financial condition of the Investment Adviser and its affiliates;•the Investment Adviser's practices regarding the selection and compensation of brokers that may execute NMF Holdings' portfolio transactions and the brokers' provision of brokerage and research services to the Investment Adviser; and•the possibility of obtaining similar services from other third party service providers or through an internally managed structure.
relationships, including through the Amended and Restated Investment Advisory and Management Agreement and the Administration Agreement;
Based on the information reviewed and the discussions, the board of directors of NMF Holdings, includingIf a majority of the non-interested directors, concludedCompany’s stockholders sign and submit the accompanying consent to authorize the Board of Directors to withdraw AIV Holdings’ election to be regulated as a BDC, the withdrawal will become effective upon receipt by the Securities and Exchange Commission (“SEC”) of AIV Holdings’ notification of withdrawal on Form N-54C. As of the date hereof, the Board of Directors believes that fees payableAIV Holdings meets the requirements for filing the notification to withdraw its election to be regulated as a BDC, upon the receipt of the necessary stockholder consents. AIV Holdings anticipates filing the Form N-54C with the SEC as soon as practicable after receipt of the necessary stockholder consents. After the notification of withdrawal of AIV Holdings’ BDC election is filed with the SEC, AIV Holdings will no longer be subject to the Investment Adviser pursuantregulatory provisions of the 1940 Act applicable to BDCs generally, including regulations related to insurance, custody, composition of its Board of Directors, affiliated transactions and any compensation arrangements.
After AIV Holdings files the Form N-54C with the SEC, AIV Holdings will then file a Form 15 with the SEC to terminate AIV Holdings’ registration under Section 12(g) of the 1934 Act. After these SEC filings and any other federal or state regulatory or tax filings are made, AIV Holdings will proceed to dissolve under Delaware law by filing a certificate of dissolution in Delaware.
Risks Associated with the Withdrawal of Election to be Regulated as a BDC
When the Company ceases to be a BDC, the Company’s stockholders will lose certain protections, including the following:
·The Company will no longer be subject to the Amended and Restated Investment Advisory and Management Agreement were reasonable in relationrequirement that it maintain a ratio of assets to senior securities of at least 200%;
·The Company will no longer be prohibited from protecting any director or officer against any liability to the servicesCompany or the Company’s stockholder arising from willful malfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of that person’s office;
·The Company will no longer be required to provide and maintain a bond issued by a reputable fidelity insurance company to protect it against larceny and embezzlement;
·The Company will no longer be required to comply with Section 56 of the 1940 Act by ensuring that a majority of the directors are persons who are not “interested persons,” as that term is defined in Section 2(a)(19) of the 1940 Act, and certain persons that would be prevented from serving on the Company’s Board of Directors if it were a BDC (such as investment bankers) will be able to serve on the Company’s Board of Directors;
·The Company will no longer be subject to provisions of the 1940 Act regulating transactions between BDCs and certain affiliates and restricting the Company’s ability to issue warrants and options;
·The Company will no longer be subject to provisions of the 1940 Act prohibiting the issuance of securities at below net asset value; and
·The Company will no longer be subject to the other provisions and protections set forth in Sections 55 through 64 of the 1940 Act and the rules and regulations promulgated under the 1940 Act.
In addition, after withdrawal of the Company’s election to be provided. The boardregulated as a BDC, the Company intends to terminate its registration under Section 12(g) of directorsthe 1934 Act. As a result, the Company will no longer be required to file periodic reports on Form 10-K, Form 10-Q, Form 8-K, proxy statements and other reports required under the 1934 Act. However, the Company’s Board of NMF Holdings did not assign relative weightsDirectors will still be subject to customary principles of fiduciary duty with respect to the above factors orCompany and its stockholders until the other factors considered by it. In addition, the board of directors of NMF Holdings did not reach any specific conclusion on each factor considered, but conducted an overall analysis of these factors. Individual membersCompany dissolves in Delaware.
Vote Required
Section 58 of the board1940 Act provides that a BDC may not withdraw from election as a BDC unless it is authorized to do so by a majority of directorsits issued and outstanding voting securities. For purposes of NMF Holdings may have given different weights to different factors.
Section 16(a) Beneficial Ownership Reporting Compliance
Pursuant to Section 16(a)this proposal, the vote of a “majority of the Exchange Act,outstanding shares” means the New Mountain Finance Entities' directors and executive officers, and any persons holdingvote of (A) 67% or more of the voting securities voting by consent, if the holders of more than 10.0%50% of itsthe outstanding voting securities of the Company are represented by consent or (B) more than 50% of the outstanding voting securities of the Company, whichever is the less. Since Guardian AIV is the sole stockholder of the Company, receipt of the accompanying consent signed by Guardian AIV will provide the Company with the necessary stockholder approval of this proposal.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU CONSENT TO THE PROPOSAL TO AUTHORIZE THE BOARD OF DIRECTORS OF THE COMPANY TO WITHDRAW THE COMPANY’S ELECTION TO BE REGULATED AS A BUSINESS DEVELOPMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNER
Guardian AIV owns 100 shares of the Company’s common stock, are required to report their beneficial ownershippar value $0.01 per share. Guardian AIV is the Company’s sole stockholder and, therefore, owns 100% of the outstanding shares of the Company’s common stock as of March 28, 2014. The Company does not have any changes thereinpreferred stock outstanding. Guardian AIV has sole voting and investment power with respect to the SEC and the New Mountain Finance Entities. Specific due dates for those reports have been established, and the New Mountain Finance Entities are 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 New Mountain Finance Entities during or in respectshares of the year ended December 31, 2012 and written representations from certain reporting persons, we believe that the following director of the New Mountain Finance Entities inadvertently failed to file on a timely basis certain reports requiredCompany’s common stock owned by Section 16(a) of the Exchange Act during the year ended December 31, 2012: Robert Hamwee. Mr. Hamwee filed one late Form 4 involving one transaction. We have no knowledge of a failure of Mr. Hamwee to file a report required under Section 16(a) of the Exchange Act. We believe that all other Section 16(a) filing requirements applicable to our directors, executive officers, and 10.0% or greater shareholders were satisfied in a timely manner during the year ended December 31, 2012.
Independent Registered Public Accounting Firm
The Audit Committees and the independent directors of the boards of directors of the New Mountain Finance Entities have selected Deloitte & Touche LLP to serve as the independent registered public accounting firm for the New Mountain Finance Entities for the fiscal year ending December 31, 2013.
Deloitte & Touche LLP has advised us that neither the firm nor any present member or associate of it has any material financial interest, direct or indirect, in the New Mountain Finance Entities or their affiliates. ItGuardian AIV. Beneficial ownership is expected that a representative of Deloitte & Touche 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.
| | Year Ended December 31, 2012 | Year Ended December 31, 2011 | |||||
|---|---|---|---|---|---|---|---|
Audit Fees | $ | 541.3 | $ | 460.8 | |||
Audit-Related Fees | 102.7 | 45.0 | |||||
Tax Fees | 288.0 | 170.0 | |||||
All Other Fees | — | 19.8 | |||||
Total Fees: | $ | 932.0 | $ | 695.6 | |||
Audit Fees: Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and quarterly reviews and services that are normally provided by Deloitte & Touche LLP in connection with statutory and regulatory filings.
Audit-Related Fees: Audit-related services consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under "Audit Fees". These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards.
Tax Services Fees: Tax services fees consist of fees billed for professional tax services. These services also include assistance regarding federal, state, and local tax compliance.
All Other Fees: Other fees would include fees for products and services other than the services reported above.
The audit committees of the respective boards of directors operate under a written charter adopted by their respective boards of directors. The audit committees are currently composed of Messrs. Hurley, Malpass, Ogens and Wolfgruber.
Management is responsible for the New Mountain Finance Entities' internal controls and the financial reporting process. The New Mountain Finance Entities' independent registered public accounting firm is responsible for performing an independent audit of the New Mountain Finance Entities' financial statementsdetermined in accordance with auditing standards generally accepted in the United Statesrules 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 committees' responsibility is to monitor and oversee these processes. The audit committees are also directly responsible for the appointment, compensation and oversightregulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers within 60 days. Guardian AIV’s address is 787 Seventh Avenue, 48th Floor, New Mountain Finance Entities' independent registered public accounting firm.York, New York 10019.
SUBMISSION OF STOCKHOLDER PROPOSALS
The audit committees have established a pre-approval policy that describesIf the permitted audit, audit-related, consulting services and other services to be provided by Deloitte & Touche LLP, the New Mountain Finance Entities' independent registered public accounting firm. The policy requires that the audit committees pre-approve the audit, non-audit and consulting services performed by the independent auditors in order to assure that the provision of such service does not impair the auditors' independence.
Any requests for audit, audit-related, tax and other services that have not received general pre-approval must be submitted to the audit committees 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 committees. However, the audit committees may delegate pre-approval authority to one or more of their members. The member or members to whom such authority is delegated shall report any pre-approval decisions to the audit committees at their next scheduled meeting. The audit committees do not delegate their responsibilities to pre-approve services performed by the independent registered public accounting firm to management.
The audit committees have reviewed the audited financial statements and met and held discussions with management regarding the audited financial statements. Management has represented to the audit committees that the New Mountain Finance Entities' financial statements were prepared in accordance with accounting principles generally accepted in the United States.
Review and Discussion with Independent Registered Public Accounting Firm
The audit committees have discussed with Deloitte & Touche LLP, the New Mountain Finance Entities' independent registered public accounting firm, matters required to be discussed by Statement of Auditing Standards No. 114 (The Auditor's Communication with those charged with Governance). The audit committees receive and review the written disclosures and the letter from the independent registered public accounting firm required by Independence Standard No. 1, Independence Discussions with Audit Committees, as amended by the Independence Standards Board, and has discussed with the auditors the auditors' independence. The audit committees have also considered the compatibility of non-audit services with the auditors' independence.
Based on the audit committees' discussions with management and the independent registered public accounting firm, the audit committees' review of the audited financial statements, the representations of management and the reports of the independent registered public accounting firm to the audit committees, the audit committees recommend that the boards of directors include the audited financial statements in the New Mountain Finance Entities' Joint Annual Report on Form 10-K for the year ended December 31, 2012 for filing with the SEC. The audit committees also recommend the selection of Deloitte & Touche LLP to serve as the independent registered public accounting firm for the year ending December 31, 2013.
The material contained in the foregoing Audit Committees ReportCompany is not "soliciting material", is not deemed "filed" withdissolved before then, the SEC, and is not to be incorporated by reference into any filing of any of the New Mountain Finance Entities under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Submission of Stockholder Proposals
The New Mountain Finance Entities expectCompany expects that the 2014 Meeting of Stockholders will be held inon May 2014, but the exact date, time, and location of such meeting have yet to be determined.6, 2014. A stockholder or unit holder who intendshad intended to present a proposal at that annual meeting must submithave submitted the proposal in writing to the New Mountain Finance EntitiesAIV Holdings at theirits address of 787 Seventh Avenue, 48th Floor, New York, New York 10019, and the New Mountain Finance EntitiesAIV Holdings must receivehave received the proposal no later than December 3, 2013, in order for the proposal to behave been considered for inclusion in the New Mountain Finance Entities'AIV Holdings’ proxy statement for that meeting. The submission of a proposal does not guarantee its inclusion in the New Mountain Finance EntitiesAIV Holdings’ proxy statement or presentation at the meeting.
For any proposal that iswas not submitted for inclusion in next year'sthe Company’s 2014 proxy statement (as described in the preceding paragraph) but is instead sought to be presented directly at next year's annual meeting,the 2014 Meeting of Stockholders, SEC rules permit management to vote proxies in its discretion if (a) the New Mountain Finance Entities receiveAIV Holdings had received notice of the proposal before the close of business on February 16, 2014 and advises stockholders in next year'sthe Company’s 2014 proxy statement about the nature of the matter and how management intends to vote on such matter, or (b) doesdid not receive notice of the proposal prior to the close of business on February 16, 2014.
Notices of intention to present proposals at the 2014 annual meeting should behave been addressed to Paula A. Bosco, Corporate Secretary, 787 Seventh Avenue, 48th Floor, New York, New York 10019. The New Mountain Finance Entities reserveCompany 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.
The New Mountain Finance Entities'Company’s audit committees havecommittee has established guidelines and procedures regarding the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters (collectively, "Accounting Matters"“Accounting Matters”). Persons with complaints or concerns regarding Accounting Matters may submit their complaints to the New Mountain Finance Entities'Company’s chief compliance officer. Persons who are uncomfortable submitting complaints to the chief compliance officer, including complaints involving the chief compliance officer, may submit complaints directly to the New Mountain Finance Entities'Company’s audit committee chair. Complaints may also be submitted on an anonymous basis via an anonymous online reporting system.
The Chief Compliance Officer may be contacted at:
Paula A. Bosco
Chief Compliance Officer
New Mountain Finance
AIV Holdings Corporation
787 Seventh Avenue
48th Floor
New York, New York 10019
The Audit Committee Chair may be contacted at:
Kurt J. Wolfgruber
Audit Committee Chair
New Mountain Finance
AIV Holdings Corporation
787 Seventh Avenue
48th Floor
New York, New York 10019
COSTS OF CONSENT SOLICITATION
The boardsCompany will pay the costs of soliciting the stockholder consent pursuant to this Consent Solicitation Statement. In addition to the solicitation by mail, the directors, officers and other regular employees of the New Mountain Finance Entities do not presently intend to bring anyCompany may solicit the consent from the stockholder personally, by facsimile, by email or by other business beforeappropriate means. Upon request, the Annual Meeting,Company will also reimburse brokerage houses and so far as is knownother custodians, nominees and fiduciaries for their reasonable expenses in sending this consent solicitation statement to the boards of directors of the New Mountain Finance Entities, no matters may properly be brought before the Annual Meeting except as specified in the Notices of the Annual Meeting. As to any other business that may properly come before the Annual Meeting, however, the proxies, in the form enclosed, will be voted in respect thereof in accordance with the discretion of the proxyholders. Whether or not you expect to attend the Annual Meeting, please complete, date, sign and promptly return the accompanying proxy in the enclosed postage paid envelope so that you may be represented at the Annual Meeting.sole stockholder, if applicable.
ANNUAL REPORTS
When available, the New Mountain Finance EntitiesCompany will furnish, without charge, copies of the New Mountain Finance Entities' JointCompany’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, to an investor upon request directed to New Mountain Finance AIV Holdings Corporation, 787 Seventh Avenue, 48th Floor, New York, NY 10019, Attention: Investor Relations or by telephone at (212) 720-0300. There reports are also available at no cost through the New Mountain Finance Entities'Company’s website athttp://www.newmountainfinance.com or through the SEC'sSEC’s EDGAR database athttp://www.sec.gov.
You are cordially invited to attend the Annual Meeting in person. Whether or not you plan to attend the Annual Meeting, you are requested to complete, date, sign and promptly return the accompanying proxy card(s) in the enclosed postage-paid envelope, or to vote by telephone or through the internet.
| ||
New York, New YorkApril 2, 2013
Your privacy is very important to us. This Privacy Notice sets forth our policies with respect to non-public personal information about our shareholders and prospective and former shareholders. These policies apply to shareholders of New Mountain Finance Corporation and may be changed at any time, provided a notice of such change is given to you. This notice supersedes any other privacy notice you may have received from us.
We will safeguard, according to strict standards of security and confidentiality, all information we receive about you. The only information we collect from you is your name, address, number of shares you hold and your social security number. This information is used only so that we can send you annual reports and other information about us, and send you proxy statements or other information required by law.
We do not share this information with any non-affiliated third party except as described below.
•Authorized Employees of our Investment Adviser.It is our policy that only authorized employees of our investment adviser who need to know your personal information will have access to it.•Service Providers.We may disclose your personal information to companies that provide services on our behalf, such as recordkeeping, processing your trades, and mailing you information. These companies are required to protect your information and use it solely for the purpose for which they received it.•Courts and Government Officials.If required by law, we may disclose your personal information in accordance with a court order or at the request of government regulators. Only that information required by law, subpoena, or court order will be disclosed.
We seek to carefully safeguard your private information and, to that end, restrict access to non-public personal information about you to those employees and other persons who need to know the information to enable us to provide services to you. We maintain physical, electronic and procedural safeguards to protect your non-public personal information.
If you have any questions regarding this policy or the treatment of your non-public personal information, please contact our Chief Compliance Officer at (212) 655-0024.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OFNew Mountain Finance AIV Holdings Corporation
787 Seventh Avenue, 48th Floor
New York, NY 10019
NEW MOUNTAIN FINANCE CORPORATIONCONSENT OF STOCKHOLDER IN LIEU OF A SPECIAL MEETING
FOR THE ANNUAL MEETING OF STOCKHOLDERSThis consent must be returned by April 8, 2014 (unless extended by the Board of Directors in its sole discretion)
MAY 6, 2013This consent is solicited on behalf of the Board of Directors. Please mark your vote in blue or black ink as shown here. x
Please mark, sign, date and return the consent promptly by electronic mail (in PDF), by facsimile or by mail to:
New Mountain Finance AIV Holdings Corporation
Attn: Paula A. Bosco
Email: pbosco@newmountaincapital.com
Facsimile: (646) 417-5813
Address: 787 Seventh Avenue, 48th Floor, New York, New York 10019
The undersigned stockholder of New Mountain Finance AIV Holdings Corporation, a Delaware corporation (the “Company”“Company”) acknowledges receipt, acting pursuant to Section 228 of the NoticeDelaware General Corporation Law, as amended, and in lieu of Annual Meeting of Stockholdersa special meeting of the Company andCompany’s stockholders, hereby appoints Robert Hamwee, Adam Weinstein, David Cordova and Paula Bosco, and eachacts as follows on the proposal set forth below:
A proposal to authorize the Board of them, and each with full power of substitution, to act as attorneys and proxies for the undersigned to vote all the shares of common stock of the Company which the undersigned is entitled to vote at the Annual Meeting of StockholdersDirectors of the Company to withdraw the Company’s election to be held atregulated as a business development company under the officesInvestment Company Act of Sutherland, Asbill & Brennan, LLP located at 1114 Avenue of the Americas, 40th Floor, New York, New York, 10036 on May 6, 2013, at 9:30 a.m., Eastern Time, and at all postponements or adjournments thereof,1940, as indicated on this proxy.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED BELOW; where no choice is specified, it will be voted FOR Proposal 1, and in the discretion of the proxies with respect to matters described in Proposal 2.
Please vote, sign and date this proxy on the reverse side and return it promptly in the enclosed envelope.
(CONTINUED ON REVERSE SIDE)
ANNUAL MEETING OF STOCKHOLDERS
NEW MOUNTAIN FINANCE CORPORATION
MAY 6, 2013
VOTE BY INTERNET - www.voteproxy.com
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.
VOTE BY PHONE — 1-800-PROXIES or 1-718-921-8500
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.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage paid envelope we have provided.
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD
IN THE ENVELOPE PROVIDED AS SOON AS POSSIBLE
Please Detach and Mail in the Envelope Provided
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.amended.
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THE STOCKHOLDER’S APPROVAL OF THIS PROPOSAL PURSUANT TO THIS CONSENT WILL BE EFFECTIVE UPON THE STOCKHOLDER SIGNING AND DELIVERING THIS CONSENT TO THE COMPANY. THIS CONSENT MAY NOT BE REVOKED AFTER SUCH EFFECTIVENESS.
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IMPORTANT: Please sign your names exactly as shown hereon and date your proxy in the blank provided. For joint accounts, each joint owner should sign. When signing as attorney, executor, administrator, trustee or guardian, please give your full title as such. If the signer is a corporation or partnership, please sign in full corporate or partnership name by a duly authorized officer or partner.
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
NEW MOUNTAIN FINANCE HOLDINGS, L.L.C.
FOR THE ANNUAL MEETING OF UNIT HOLDERS
MAY 6, 2013
The undersigned unit holder of New Mountain Finance Holdings, L.L.C. (the “Company”) acknowledges receipt of the Notice of Annual Meeting of Unit Holders of the Company and hereby appoints Robert Hamwee, Adam Weinstein, David Cordova and Paula Bosco, and each of them, and each with full power of substitution, to act as attorneys and proxies for the undersigned to vote all the membership units of the Company which the undersigned is entitled to vote at the Annual Meeting of Unit Holders of the Company to 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 May 6, 2013, at 9:30 a.m., Eastern Time, and at all postponements or adjournments thereof, as indicated on this proxy.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED BELOW; where no choice is specified, it will be voted FOR Proposal 1, and in the discretion of the proxies with respect to matters described in Proposal 2.
Please vote, sign and date this proxy on the reverse side and return it promptly in the enclosed envelope.
(CONTINUED ON REVERSE SIDE)
ANNUAL MEETING OF UNIT HOLDERS
NEW MOUNTAIN FINANCE HOLDINGS, L.L.C.
MAY 6, 2013
VOTE BY INTERNET - www.voteproxy.com
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.
VOTE BY PHONE — 1-800-PROXIES or 1-718-921-8500
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.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage paid envelope we have provided.
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD
IN THE ENVELOPE PROVIDED AS SOON AS POSSIBLE
Please Detach and Mail in the Envelope Provided
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
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IMPORTANT: Please sign your names exactly as shown hereon and date your proxy in the blank provided. For joint accounts, each joint owner should sign. When signing as attorney, executor, administrator, trustee or guardian, please give your full title as such. If the signer is a corporation or partnership, please sign in full corporate or partnership name by a duly authorized officer or partner.
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| Please sign exactly as your name(s) appears on this consent. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by an authorized person. |
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
NEW MOUNTAIN FINANCE AIV HOLDINGS CORPORATION
FOR THE ANNUAL MEETING OF STOCKHOLDERS
MAY 6, 2013
The undersigned stockholder of New Mountain Finance AIV Holdings Corporation (the “Company”) acknowledges receipt of the Notice of Annual Meeting of Stockholders of the Company and hereby appoints Robert Hamwee, Adam Weinstein, David Cordova and Paula Bosco, and each of them, and each with full power of substitution, to act as attorneys and proxies for the undersigned to vote all the shares of common stock of the Company which the undersigned is entitled to vote at the Annual Meeting of Stockholders of the Company to be held at offices of Sutherland, Asbill & Brennan, LLP located at 1114 Avenue of the Americas, 40th Floor, New York, New York, 10036 on May 6, 2013, at 9:30 a.m., Eastern Time, and at all postponements or adjournments thereof, as indicated on this proxy.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED BELOW; where no choice is specified, it will be voted FOR Proposal 1, and in the discretion of the proxies with respect to matters described in Proposal 2.
Please vote, sign and date this proxy on the reverse side and return it promptly in the enclosed envelope.
(CONTINUED ON REVERSE SIDE)
ANNUAL MEETING OF STOCKHOLDERS
NEW MOUNTAIN FINANCE AIV HOLDINGS CORPORATION
MAY 6, 2013
VOTE BY INTERNET - www.voteproxy.com
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.
VOTE BY PHONE — 1-800-PROXIES or 1-718-921-8500
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.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage paid envelope we have provided.
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD
IN THE ENVELOPE PROVIDED AS SOON AS POSSIBLE
Please Detach and Mail in the Envelope Provided
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
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IMPORTANT: Please sign your names exactly as shown hereon and date your proxy in the blank provided. For joint accounts, each joint owner should sign. When signing as attorney, executor, administrator, trustee or guardian, please give your full title as such. If the signer is a corporation or partnership, please sign in full corporate or partnership name by a duly authorized officer or partner.
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