UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
201 Rouse Boulevard
Philadelphia, Pennsylvania 19112
18, 2022
2022.
2022.
18, 2022
This proxy statement is furnished in connection with the solicitation of proxies by the board of trustees (the "Board"“Board”) of FS Energy and Power Fund, a Delaware statutory trust (the "Company"“Company”), for use at the Annual Meeting of Shareholders of the Company to be held at the offices of the Company, located at 201 Rouse Boulevard, Philadelphia, Pennsylvania 19112, on December 12, 20199, 2022 at 10:30 a.m.1:00 p.m., Eastern Time, and any adjournments or postponements thereof (the "Annual Meeting"“Annual Meeting”). This proxy statement and the accompanying materials, or a Notice of Internet Availability of Proxy Materials containing instructions on how to access the proxy statement and annual report and how to submit proxies over the Internet, are being mailed on or about October 25, 201920, 2022 to shareholders of record described below and are available atwww.proxyvote.com.
the original record date without notice other than the announcement at the Annual Meeting to permit further solicitation of proxies. 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. Any business that might have been transacted at the Annual Meeting as originally called may be transacted at any such adjourned session(s) at which a quorum is present.
communications, please contact the Company'sCompany’s transfer agent, DST Systems,SS&C Technologies, Inc. by telephone at (877) 628-8575 or by mail to FS Energy and Power Fund, c/o DST Systems,SS&C Technologies, Inc., 430 W. 7th7
8, 2022.
Notice of Internet Availability of Proxy Materials
persons who beneficially own 5% or more of the Common Shares is based upon information furnished by the Company'sCompany’s transfer agent and other information provided by such persons, if available.
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Common Shares Beneficially Owned as of October | | |||||||||||||
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Name and Address of Beneficial Owner(1) | | | Number of Common Shares | |||||||||||
| | | Percentage(2) | | ||||||||||
Interested Trustees: | | | | | | | | | | | | | | |
Michael C. Forman(3) | | | | 446,964.440 | | | | | | * | | | ||
R. Blair Thomas | | | | | — | | | | | | * | |||
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Independent Trustees: | | | | | | | | | | | | | | |
Sidney R. Brown(4) | | | | | 64,870.090 | | | | | | * | |||
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Gregory P. Chandler(5) | | | | 29,904.992 | | | | | | * | | | ||
Richard I. Goldstein | | | | | 43,992.788 | | | | | | * | | | |
Charles P. Pizzi | | | | | 22,003.792 | | | | | | * | | | |
Pedro A. Ramos | | | | | — | | | | | | * | |||
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Executive Officers: | | | | | | | | | | | | | | |
Eric Long | | | | | — | | | | | | * | | | |
| | | | 2,114.739 | | | | | | * | | | ||
David S. Weiser | | | | | — | | | | | | * | | | |
Edward T. Gallivan, | | | | 5,171.140 | | | | | | * | | | ||
Stephen S. Sypherd(6) | | | | | 7,920.475 | | | | | | * | | | |
James | | | | 2,246.074 | | | | | | * | | | ||
All Executive Officers and Trustees as a group (13 persons) | | | | 625,188.530 | | | | | | * | | |
Name of Trustee | | | Dollar Range of Equity Securities Beneficially Owned in the Company(1)(2) | ||
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Interested Trustees: | | | | | |
Michael C. Forman | | | Over $100,000 | | |
| | | — | ||
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Independent Trustees: | | | | | |
Sidney R. Brown | | | Over $100,000 | | |
Gregory P. Chandler | | | Over $100,000 | | |
Richard I. Goldstein | | | Over $100,000 | | |
Charles P. Pizzi | | $50,001 - $100,000 | | ||
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Pedro A. Ramos | | | — | |
Section 16(a) Beneficial Ownership Reporting Compliance
Pursuant to Section 16(a) of the Exchange Act, the Company's trustees and executive officers, and any persons holding more than 10% of its Common Shares, are required to report their beneficial ownership and any changes therein to the SEC and the Company. Specific due dates for those reports have been established, and the Company is required to report herein any failure to file such reports by those due dates. Based on the Company's review of Forms 3, 4 and 5 filed by such persons and information provided by the Company's trustees and officers, the Company believes that its trustees, executive officers and greater than 10% shareholders have complied with all applicable filing requirements during the fiscal year ended December 31, 2018, with the exception of a late Form 3 filing for R. Blair Thomas upon his appointment as a trustee and a late Form 3 filing for Eric Long upon his appointment as an executive officer, each due to administrative errors.
and race, that the Board believes enables a trustee to make a significant contribution to the Board, the Company and its shareholders. These experiences, characteristics, attributes and skills, which are more fully described below, include, but are not limited to, management experience, independence, financial expertise and experience serving as directors or trustees of other entities. The Board may also consider such other experiences, characteristics, attributes and skills as it deems appropriate, given the then-current needs of the Board and the Company.
the experience, characteristics, attributes and skills of each trustee nominee that led the Board to conclude that each such person should serve as a trustee.
| | INDEPENDENT TRUSTEE NOMINEES | | | ||||||||||||||||||||||||||||||||
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Name, Address, Age and Position(s) with Company(1) | | | | Term of Office and Length of Time Served(2) | | | | Principal Occupation(s) During Past Five Years | | | | Number of Companies in Fund Complex Overseen by Trustee | | | | Other Public Directorships Held by Trustee During the Past Five Years† | | | ||||||||||||||||||
| | Sidney R. Brown Age: 65 Trustee | | | | Since 2011 | | | | Mr. Brown has served as the chief executive officer of NFI, Inc. Mr. Brown has served as a member of various boards for publicly-traded companies. In addition, his service as chief executive officer of NFI has provided him, in the opinion of the Board, with experience and insight which is beneficial to the Company. | | | | One | | | | Sun National Bank; J Foods Corp.; Cooper Health System | | |
| | INDEPENDENT TRUSTEE NOMINEES | | | ||||||||||||||||||||||||||||||||
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Name, Address, Age and Position(s) with Company(1) | | | | Term of Office and Length of Time Served(2) | | | | Principal Occupation(s) During Past Five Years | | | | Number of Companies in Fund Complex Overseen by Trustee | | | | Other Public Directorships Held by Trustee During the Past Five Years† | | | ||||||||||||||||||
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Gregory P. Chandler Age: 55 Trustee | | | | Since 2010 | | | | Mr. Chandler has been chief financial officer of Herspiegel Consulting LLC (“Herspiegel”), a leading pharmaceutical and biotech consulting firm since December 2020. Prior to Herspiegel, Mr. Chandler acted as chief financial officer of Avocado Systems Inc., a cybersecurity provider, from December 2019 to November 2020, and chief financial officer of Emtec, Inc. |
Mr. Chandler also presently serves as Mr. Chandler began his career as an officer in the United States Army. After business school he spent four years with PricewaterhouseCoopers LLP (“PwC”), and its predecessor, Coopers and Lybrand, where he assisted companies in the “Office of the CFO Practice” and also worked as a certified public accountant. During his tenure at PwC he spent the majority of his time in the investment company practice. He was also an Investment Banker for 10 years leading the Business and IT services practice at Janney Montgomery Scott LLC prior to his CFO positions. Mr. Chandler has extensive experience in valuations and in negotiating debt, equity and mergers and acquisitions transactions in a variety of industries with both public and private companies. In addition, Mr. Chandler has experience managing the audits of mutual funds, hedge funds and venture capital funds. This experience has provided Mr. Chandler, in the opinion of the Board, with experience and insight which is beneficial to the Company. | | | | One | | | | Emtec, Inc.; RBB Funds; Penn Capital Funds Trust overseeing | | |
| | INDEPENDENT TRUSTEE NOMINEES | | | ||||||||||||||||||||||||||||||||
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Name, Address, Age and Position(s) with Company(1) | | | | Term of Office and Length of Time Served(2) | | | | Principal Occupation(s) During Past Five Years | | | | Number of Companies in Fund Complex Overseen by Trustee | | | | Other Public Directorships Held by Trustee During the Past Five Years† | | | ||||||||||||||||||
| | Richard I. Goldstein Age: 61 Trustee and Lead Independent Trustee | | | | Trustee since 2011 Lead Independent Trustee since March 2015 | | | | Mr. Goldstein has served as the Mr. Goldstein has extensive experience as a senior executive and in negotiating investment transactions in a variety of industries, including in the energy industry. This experience has provided Mr. Goldstein, in the opinion of the Board, with experience and insight which is beneficial to the Company. | | | | One | | | | FS KKR Capital Corp. | | |
| | INDEPENDENT TRUSTEE NOMINEES | | | ||||||||||||||||
| | Name, Address, Age and Position(s) with Company(1) | | | | Term of Office and Length of Time Served(2) | | | | Principal Occupation(s) During Past Five Years | | | | Number of Companies in Fund Complex Overseen by Trustee | | | | Other Public Directorships Held by Trustee During the Past Five Years† | | |
| | Charles P. Pizzi Age: 72 Trustee | | | | Since 2012 | | | | Mr. Pizzi is the retired president, director and chief executive officer of Tasty Baking Company, manufacturer of Tastykake branded snack cakes. He served in these positions from 2002 to May 2011. Prior to leading Tasty Baking Company, Mr. Pizzi served as president and chief executive officer of the Greater Philadelphia Chamber of Commerce, vice-chairman of the American Chamber of Commerce Executives and chairman of the Metro Council of Presidents. |
Mr. Pizzi has significant experience as an executive and director at various companies and governmental organizations. This experience has provided Mr. Pizzi, in the opinion of the Board, with experience and insight which is beneficial to the Company. | | | | One | | | | Brandywine Realty Trust; FS Global Credit Opportunities Fund; PHH Corporation; Pennsylvania Real Estate Investment Trust; Mistras Group, Inc.; AmeriHealth Caritas | | |
| | INDEPENDENT TRUSTEE NOMINEES | | | ||||||||||||||||||||||||||||||||
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Name, Address, Age and Position(s) with Company(1) | | | | Term of Office and Length of Time Served(2) | | | | Principal Occupation(s) During Past Five Years | | | | Number of Companies in Fund Complex Overseen by Trustee | | | | Other Public Directorships Held by Trustee During the Past Five Years† | | | ||||||||||||||||||
| | Pedro Ramos Age: 57 Trustee | | | | Since 2011 | | | | Pedro A. Ramos has served as the president and chief executive officer of The Philadelphia Foundation, or TPF, since August 2015, a charitable foundation that builds, manages and distributes philanthropic resources to improve lives in the greater Philadelphia region. Prior to joining TPF, he was a partner with the law firm of Schnader, Harrison, Segal & Lewis LLP Mr. | | | | One | | | | AmeriGas Propane, Inc.; FS KKR Capital Corp. (formerly FS Investment Corporation); Independence Health Group, Inc. | | |
| | INDEPENDENT TRUSTEE NOMINEES | | | ||||||||||||||||||||||||||||||||
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Name, Address, Age and Position(s) with Company(1) | | | | Term of Office and Length of Time Served(2) | | | | Principal Occupation(s) During Past Five Years | | | | Number of Companies in Fund Complex Overseen by Trustee | | | | Other Public Directorships Held by Trustee During the Past Five Years† | | | ||||||||||||||||||
| | Michael C. Forman Age: 61 Chairman of the Board and Chief Executive Officer | | | | Since 2010 | | | | Michael C. Forman is chairman and chief executive officer of Franklin Square Holdings, LP (“FS Investments”) and has been leading FS Investments since its founding in 2007. Mr. Forman has served as the | | | | One | | | | | |
| | INDEPENDENT TRUSTEE NOMINEES | | | ||||||||||||||||
| | Name, Address, Age and Position(s) with Company(1) | | | | Term of Office and Length of Time Served(2) | | | | Principal Occupation(s) During Past Five Years | | | | Number of Companies in Fund Complex Overseen by Trustee | | | | Other Public Directorships Held by Trustee During the Past Five Years† | | |
| | | | | | | | | | Mr. Forman has extensive experience in corporate and securities law and has founded and served in a leadership role of various companies, including FS/EIG Advisor. The Board believes Mr. | | | | | | | | | |
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| | Age: 60 Trustee | | | ||||||||||||||||
| Since 2019 | | | | R. Blair Thomas has served as a trustee of the Company since September 2019. Mr. Thomas is the chairman and chief executive officer of EIG Global Energy Partners Mr. Thomas has significant experience as an executive, director and advisor at various organizations. In addition, Mr. Thomas has significant legal and investment management experience. This experience has provided Mr. Thomas, in the opinion of the Board, | | | | One | | | | | |
issues; and (9) overseeing the services of the Company’s chief compliance officer to test its compliance procedures and those of its service providers.
Board meeting and in determining the need for special meetings of the Board, chairs any meeting of the Independent Trustees in executive session, facilitates communications between other members of the Board and the chairman of the Board and/or the chief executive officer and otherwise consults with the chairman of the boardBoard and/or the chief executive officer on matters relating to corporate governance and Board performance.
Company and the extensive regulation to which the Company is subject as a BDC.
10, 2021.
such committee during the 2018 fiscal year attended over 75% of the aggregate of all the meetings held during 2018.
Nominating and Corporate Governance Committee
2021.
Information about Executive Officers Who Are Not Trustees
Effective September 10, 2019, the Board appointed Mr. Eric Long as the president of the Company. Mr. Long replaces William C. Sonneborn, who had served as the Company's president since April 2018.
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Name, Address, | ||||||||||||||||||||
Age and Position(s) with Company(1) | | | | Length of | ||||||||||||||||
Time | ||||||||||||||||||||
Served | | | | Principal Occupation(s) During Past Five Years | | | ||||||||||||||
| | Eric Long Age: 52 President | | | | Since 2019 | | | | Eric | | |
| | Name, Address, Age and Position(s) with Company(1) | | | | |||||||
Length of | ||||||||||||
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Principal Occupation(s) During Past Five Years | | | ||||||||||||||||||
| | David S. Weiser Age: 42 Chief Investment Officer | | | | Since 2021 | | | | David Weiser has served as the Company’s chief investment officer since March 2021. Mr. Weiser is also a managing director in the investment management group of FS Investments, which he joined in 2015. Before joining FS Investments and its affiliated investment advisers, Mr. Weiser served as a research analyst at Towerview LLC, a long-biased public equities fund, from January 2007 to July 2015, where he originated and executed investments in companies involved in mergers, restructurings and deep value situations. Prior to that role, Mr. Weiser was an associate at Golub Capital from May 2005 to January 2007, where he executed middle market debt and equity investments. Mr. Weiser earned a Bachelor of Science in economics (magna cum laude) from the Wharton School at the University of Pennsylvania | | | ||||||||
| | Edward T. Gallivan, Jr. Age: 60 Chief Financial Officer | | | | Since 2012 | | | | Edward T. Gallivan, Jr. | ||||||||||
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| | James R. Beach Age: 36 Chief Operating Officer | | | | Since 2020 | | | | James Beach has served as the Company’s chief operating officer since June 2020. Mr. Beach is also a managing director of FS Investments, which he joined in 2010. He is one of the persons responsible for fund administration and portfolio management, including valuation, forecasting, and management reporting. Prior to joining FS Investments, Mr. Beach was an investment banking analyst at Ewing Bemiss & Co. Mr. Beach received his B.A. in Economics from the University of Richmond and a general course certificate from the London School of Economics. Mr. Beach holds the CFA Institute’s Chartered Financial Analyst designation. | | |
| | Name, Address, Age and Position(s) with Company(1) | | | | Length of Time Served | | | | Principal Occupation(s) During Past Five Years | | | ||||||||
| | Stephen S. Sypherd Age: 45 General Counsel | | | | Since 2013 | | | | Stephen S. | | | ||||||||
| | James F. Volk Age: 60 Chief Compliance Officer | | | |
2015 | | | ||||||||||
| James F. | |||||||||||
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Trustee Compensation
Trustees who do not also serve in an executive officer capacity for the Company or FS/EIG Advisor or its affiliates are entitled to receive annual cash retainer fees, fees for participating in in-personquarterly Board and Board committee meetings and certain other Board and Board committee meetings and annual fees for serving as a committee chairperson. These trustees are Messrs. Brown, Burdumy, Chandler, Goldstein, Pizzi and Ramos. Mr. Goldstein also receives an annual retainer for his service as the lead Independent Trustee.
Fee | | | Amount | | |||
Annual Board Retainer | | | | $ | 100,000 | | |
Board Meeting Fees | | | | $ | 2,500 | | |
Annual Committee Chair Retainers: | | | | | | | |
Audit and Valuation Committees | | | | $ | 20,000 | | |
Nominating and Corporate Governance Committee | | | | $ | 15,000 | | |
Other Committees | | | | $ | 10,000 | | |
Committee Meeting Fees | | | | $ | 1,000 | | |
Annual Lead Independent Trustee Retainer | | | | $ | 25,000 | | |
Fee | Amount | |||
---|---|---|---|---|
Annual Board Retainer | $ | 100,000 | ||
Board Meeting Fees | $ | 2,500 | ||
Annual Committee Chair Retainers: | ||||
Audit and Valuation Committees | $ | 20,000 | ||
Nominating and Governance Committee | $ | 15,000 | ||
Other Committees | $ | 10,000 | ||
Committee Meeting Fees | $ | 1,000 | ||
Annual Lead Independent Trustee Retainer | $ | 25,000 |
The Company will also reimburse each of the above trustees for all reasonable and authorized business expenses in accordance with its policies as in effect from time to time, including reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each in-person Board meeting and each in-person committee meeting not held concurrently with a Board meeting.
| Name of Trustee | | | Fees Earned or Paid in Cash by the Company | | | Total Compensation from the Company | | ||||||
| Sidney R. Brown | | | | $ | 111,000 | | | | | $ | 111,000 | | |
| Gregory P. Chandler | | | | $ | 140,500 | | | | | $ | 140,500 | | |
| Michael C. Forman | | | | | — | | | | | | — | | |
| Richard I. Goldstein | | | | $ | 161,500 | | | | | $ | 161,500 | | |
| Kathleen A. McGinty(1) | | | | $ | 113,500 | | | | | $ | 113,500 | | |
| Charles P. Pizzi | | | | $ | 131,500 | | | | | $ | 131,500 | | |
| Pedro A. Ramos | | | | $ | 120,500 | | | | | $ | 120,500 | | |
| R. Blair Thomas | | | | | — | | | | | | — | | |
Name of Trustee | Fees Earned or Paid in Cash by the Company | Total Compensation from the Company | |||||
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David J. Adelman(1) | $ | — | $ | — | |||
Sidney R. Brown | $ | 135,500 | $ | 135,500 | |||
Stephen T. Burdumy(2) | | — | | — | |||
Gregory P. Chandler | $ | 164,000 | $ | 164,000 | |||
Michael C. Forman | | — | $ | — | |||
Richard I. Goldstein | $ | 184,000 | $ | 184,000 | |||
Michael J. Heller(1) | $ | — | $ | 53,500 | |||
Charles P. Pizzi | $ | 136,000 | $ | 136,000 | |||
Pedro A. Ramos(2) | $ | — | $ | — | |||
William C. Sonneborn(3) | $ | — | $ | — | |||
Richard W. Vague(4) | $ | 132,000 | $ | 132,000 | |||
Thomas J. Gravina(1) | $ | 57,250 | $ | 57,250 | |||
R. Richard Williams(4) | $ | 140,469 | $ | 140,469 |
The incentive fee on capital gains payable under the FS/EIG Investment Advisory Agreement is determined and payable in arrears as of the end of each calendar year (or upon termination of such agreement). Such fee equals 20.0% of the Company's "incentiveCompany’s “incentive fee capital gains,"” which are the Company'sCompany’s realized capital gains on a cumulative basis from inception, calculated as of the end of the applicable period, computed net of all realized capital losses and unrealized capital depreciation on a
cumulative basis, less the aggregate amount of any previously paid incentive fees on capital gains. The Company will accrue for the incentive fee on capital gains, which, if earned, will be paid annually. The Company will accrue the incentive fee on capital gains based on net realized and unrealized gains; however, the fee payable to FS/EIG Advisor will be based on realized gains and no such fee will be payable with respect to unrealized gains unless and until such gains are actually realized. The
Effective April 9, 2018,Agreement, FS/EIG Advisor agreed to waive incentive fees on income for a period of twelve months ending December 31, 2018.
Pursuant to the FS Advisor investment advisory agreement, FS Advisor was entitled to an annual base management fee of 1.75% of the average value of the Company's gross assets (gross assets equals total assets as set forth on the Company's consolidated balance sheets) and an incentive fee based on the Company's performance. Effective January 1, 2018, FS Advisor had agreed to waive incentive fees on income for a period of twelve months ending December 31, 2018. Pursuant to the investment sub-advisory agreement, GSO wasmay also be entitled to receive 50% of all management anda subordinated incentive fees payable to FS Advisorfee on income. The subordinated incentive fee on income under the FSFS/EIG Investment Advisory and Administrative Services Agreement is calculated and payable quarterly in arrears and equals 20.0% of the Company’s “pre-incentive fee net investment income” for the immediately preceding quarter subject to a hurdle rate, expressed as a rate of return on adjusted capital, equal to 1.625% per quarter, or an annualized hurdle rate of 6.5%. As a result, FS/EIG Advisor will not earn this incentive fee for any quarter until the Company’s pre-incentive fee net investment advisory agreement with respectincome for such quarter exceeds the hurdle rate of 1.625%. For purposes of this fee, “adjusted capital” means cumulative gross proceeds generated from sales of the Company’s Common Shares (including proceeds from its distribution reinvestment plan) reduced for distributions from non- liquidating dispositions of the Company’s investments paid to each year.
shareholders and amounts paid for share repurchases pursuant to the Company’s share repurchase program. Once the Company’s pre-incentive fee net investment income in any quarter exceeds the hurdle rate, FS/EIG Advisor will be entitled to a “catch-up” fee equal to the amount of the Company’s pre-incentive fee net investment income in excess of the hurdle rate, until the Company’s pre-incentive fee net investment income for such quarter equals 2.031%, or 8.125% annually, of adjusted capital. This “catch-up” feature will allow FS/EIG Advisor to recoup the fees foregone as a result of the existence of the hurdle rate. Thereafter, FS/EIG Advisor will be entitled to receive 20.0% of the Company’s pre-incentive fee net investment income.
other administrative items allocated to a controlling person of FS/EIG Advisor. The FS/EIG investment advisory agreement is substantially similar to the FS Advisor investment advisory agreement.
| Related Party | | | Source Agreement | | | Description | | | Six Months Ended June 30, 2022 | | | Six Months Ended June 30, 2021 | | | Year Ended December 31, 2021 | | | Year Ended December 31, 2020 | | ||||||||||||
| FS/EIG Advisor | | | FS/EIG Investment Advisory and Administrative Services Agreement | | | Base Management Fee(1) | | | | $ | 19,613 | | | | | $ | 20,605 | | | | | $ | 40,122 | | | | | $ | 48,323 | | |
| FS/EIG Advisor | | | FS/EIG Investment Advisory and Administrative Services Agreement | | | Administrative Services Expenses(2) | | | | $ | 2,910 | | | | | $ | 3,023 | | | | | $ | 5,713 | | | | | $ | 6,579 | | |
Related Party | | Source Agreement | | Description | | Six Months Ended June 30, 2019 | | Six Months Ended June 30, 2018 | | Year Ended December 31, 2018 | | Year Ended December 31, 2017 | | ||||||||||||
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FS Advisor and FS/EIG Advisor | | FSIA Investment Advisory and Administrative Services Agreement and FS/EIG Investment Advisory and Administrative Services Agreement | | Base Management Fee(1) | | | $ | 32,577 | | | | $ | 35,416 | | | | $ | 68,799 | | | | $ | 88,938 | | |
FS Advisor | | FSIA Investment Advisory and Administrative Services Agreement | | Subordinated Incentive Fee on Income(2) | | | — | | | | — | | | | — | | | | $ | 10,499 | | | |||
FS Advisor and FS/EIG Advisor | | FSIA Investment Advisory and Administrative Services Agreement and FS/EIG Investment Advisory and Administrative Services Agreement | | Administrative Services Expenses(3) | | | $ | 2,045 | | | | $ | 1,595 | | | | $ | 3,717 | | | | $ | 2,829 | | |
FS Advisor | | Expense Support and Conditional Reimbursement Agreement | | Expense Recoupment(4) | | | — | | | | — | | | | — | | | | $ | 2,858 | | |
$5,316, respectively, in administrative services expenses to FS Advisor and FS/EIG Advisor, or its affiliates, during the years ended December 31, 20182021 and 2017.
Expense Reimbursement
Pursuant to an expense support and conditional reimbursement agreement, amended and restated as of May 16, 2013, or, the expense reimbursement agreement, FS Investments agreed to reimburse the Company for expenses in an amount that is sufficient to ensure that no portion of the Company's distributions to shareholders will be paid from its offering proceeds or borrowings.
Under the expense reimbursement agreement, FS Investments agreed to reimburse the Company quarterly for expenses in an amount equal to the difference between the Company's cumulative distributions paid to its shareholders in each quarter, less the sum of the Company's net investment company taxable income, net capital gains and dividends and other distributions paid to the Company on account of preferred and common equity investments in portfolio companies (to the extent such amounts are not included in net investment company taxable income or net capital gains) in each quarter.
Pursuant to the expense reimbursement agreement, the Company has a conditional obligation to reimburse FS Investments for any amounts funded by FS Investments under such agreement if (and only to the extent that), during any fiscal quarter occurring within three years of the date on which FS Investments funded such amount, the sum of the Company's net investment company taxable income, net capital gains and the amount of any dividends and other distributions paid to the Company on account of preferred and common equity investments in portfolio companies (to the extent not included in net investment company taxable income or net capital gains) exceeds the distributions paid by the Company to its shareholders; provided, however, that (i) the Company will only reimburse FS Investments for expense support payments made by FS Investments with respect to any calendar quarter beginning on or after July 1, 2013 to the extent that the payment of such reimbursement (together with any other reimbursement paid during such fiscal year) does not cause "other operating expenses" (as defined below) (on an annualized basis and net of any expense support payments received by the Company during such fiscal year) to exceed the lesser of
(A) 1.75% of the Company's average net assets attributable to its common shares for the fiscal year-to-date period after taking such payments into account and (B) the percentage of the Company's average net assets attributable to its common shares represented by "other operating expenses" during the fiscal year in which such expense support payment from FS Investments was made (provided, however, that this clause (B) shall not apply to any reimbursement payment which relates to an expense support payment from FS Investments made during the same fiscal year) and (ii) the Company will not reimburse FS Investments for expense support payments made by FS Investments if the aggregate amount of distributions per share declared by the Company in such calendar quarter is less than the aggregate amount of distributions per share declared by the Company in the calendar quarter in which FS Investments made the expense support payment to which such reimbursement relates. The Company is not obligated to pay interest on the payments it receives from FS Investments. "Other operating expenses" means the Company's total "operating expenses" (as defined below), excluding base management fees, incentive fees, organization and offering expenses, financing fees and costs, interest expense, brokerage commissions and extraordinary expenses. "Operating expenses" means all operating costs and expenses incurred, as determined in accordance with GAAP for investment companies. The expense reimbursement agreement was terminated on the JV Effective Date. The Company's conditional obligation to reimburse FS Investments pursuant to the terms of the expense reimbursement agreement survived the termination of the agreement. As of the JV Effective Date, the Company entered into an expense support and conditional reimbursement agreement with FS/EIG Advisor, or the FS/EIG expense reimbursement agreement, on substantially similar terms. During the six months ended June 30, 2019, the Company did not pay any amounts in expense recoupments to FS Investments. As of June 30, 2019, $28,104,000 of reimbursements may become subject to repayment by the Company to FS Investments in the future.
On November 14, 2018, FS/EIG Advisor announced that for any calendar quarter ending on or prior to September 30, 2019 it will defer the receipt of base management fees under the FS/EIG investment advisory agreement if, and to the extent that, the Company's distributions paid to the Company's shareholders in the calendar quarter exceeds the sum of the Company's investment company taxable income (as defined in Section 852 of the Internal Revenue Code of 1986, as amended, or the Code), net capital gains (as defined in Section 1222 of the Code) and dividends and other distributions paid to the Company on account of preferred and common equity investments in portfolio companies (to the extent such amounts were not included in net investment company taxable income or net capital gains) in the calendar quarter, or collectively, the Company's distributable funds on a tax basis. FS/EIG Advisor will only receive any deferred fees in a future calendar quarter if, and to the extent that, the Company's distributable funds on a tax basis in the future calendar quarter exceeds the Company's distributions paid to the Company's shareholders in such quarter. In light of this commitment by FS/EIG Advisor, the FS/EIG expense reimbursement agreement was terminated on November 12, 2018.
For the period from January 1, 2018 to November 12, 2018, the Company did not accrue any expense reimbursements from FS/EIG Advisor under the FS/EIG expense reimbursement agreement. During the six months ended June 30, 2019, FS/EIG Advisor did not defer the receipt of any base management fees under the FS/EIG investment advisory agreement. As of June 30, 2019, there were no deferred base management fees subject to future payment by the Company.
The following table reflects the expense reimbursement payments from FS Investments to the Company as of June 30, 2019 that may become subject to repayment by the Company to FS Investments (expressed in thousands in the table below and the notes that follow):
For the Three Months Ended | Amount of Expense Reimbursement Payment | Annualized "Other Operating Expenses" Ratio as of the Date of Expense Reimbursement | Annualized Rate of Distributions Per Share(1) | Reimbursement Eligibility Expiration | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
March 31, 2017 | $ | 15,362 | (2) | 0.40 | % | 9.14 | % | March 31, 2020 | |||
September 30, 2017 | 7,095 | 0.36 | % | 9.91 | % | September 30, 2020 | |||||
December 31, 2017 | 5,647 | 0.36 | % | 10.57 | % | December 31, 2020 | |||||
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Total | $ | 28,104 | |||||||||
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Potential Conflicts of Interest
size of available investment; available liquidity and liquidity requirements; regulatory restrictions; and/or such other factors as may be relevant to a particular transaction. As affiliates of FS Investments and EIG currently serve as the investment adviser to other entities and accounts, it is possible that some investment opportunities will be provided to such other entities and accounts rather than to the Company.
| Fiscal Year | | | Audit Fees | | | Audit-Related Fees(1) | | | Tax Fees | | | All Other Fees(2) | |
| 2021 | | | $457,091 | | | — | | | — | | | — | |
| 2020 | | | $465,551 | | | — | | | — | | | — | |
Fiscal Year | Audit Fees | Audit-Related Fees(1) | Tax Fees | All Other Fees(2) | ||||
---|---|---|---|---|---|---|---|---|
2018 | $399,700 | $45,215 | — | — | ||||
2017 | $400,000 | — | — | $54,600 |
services performed by RSM US LLPan independent registered public accounting firm to management. All of the audit and non-audit services described above for which RSM US LLP invoiced the Company for the fiscal years ended December 31, 20182021 and 20172020 were pre-approved by the Audit Committee.
The material in this Audit Committee report is not "soliciting“soliciting material,"” is not deemed "filed"“filed” with the SEC, and is not to be incorporated by reference into any filing of the Company under the
Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
INVESTMENT ADVISER AND ADMINISTRATOR | | | SUB-ADMINISTRATOR | |
FS/EIG Advisor, LLC 201 Rouse Boulevard Philadelphia, PA 19112 | | | State Street Bank and Trust | |
Company | ||||
One Lincoln Street | ||||
Mailstop SUM 0703 | ||||
Boston, MA 02111 | |
VIEW MATERIALS & VOTE w SCAN TO
*** Exercise Your Right to Vote *** Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on December 12, 2019. FS ENERGY AND POWER FUND You are receiving this communication because you hold shares in the company named above. This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online at www.proxyvote.com, scan the QR Barcode on the reverse side, or easily request a paper copy (see reverse side). We encourage you to access and review all of the important information contained in the proxy materials before voting. FS ENERGY AND POWER FUND 201 ROUSE BLVD. PHILADELPHIA, PA 19112 proxy materials and voting instructions. E86092-P30032 See the reverse side of this notice to obtain Meeting Information Meeting Type:Annual Meeting For holders as of:October 14, 2019 Date: December 12, 2019 Time: 10:30 a.m., Eastern Time Location: 201 Rouse Blvd. Philadelphia, PA 19112
Before You Vote How to Access the Proxy Materials VIEW MATERIALS & VOTE w SCAN TO How To Vote Please Choose One of the Following Voting Methods E86093-P30032 Vote In Person: Many shareholder meetings have attendance requirements including, but not limited to, the possession of an attendance ticket issued by the entity holding the meeting. Please check the meeting materials for any special requirements for meeting attendance. At the meeting, you will need to request a ballot to vote these shares. Vote By Internet: Go to www.proxyvote.com or from a smartphone, scan the QR Barcode above. Have the information that is printed in the box marked by the arrow (located on the following page) available and follow the instructions. Vote By Mail: You can vote by mail by requesting a paper copy of the materials, which will include a proxy card. XXXX XXXX XXXX XXXX Proxy Materials Available to VIEW or RECEIVE: NOTICE AND PROXY STATEMENTANNUAL REPORTSHAREHOLDER LETTER How to View Online: Have the information that is printed in the box marked by the arrow(located on the following page) and visit: www.proxyvote.com, or scan the QR Barcode below. How to Request and Receive a PAPER or E-MAIL Copy: If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request: 1) BY INTERNET:www.proxyvote.com 2) BY TELEPHONE: 1-800-579-1639 3) BY E-MAIL*:sendmaterial@proxyvote.com * If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked by the arrow (located on the following page) in the subject line. Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before November 28, 2019 to facilitate timely delivery. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
The Board of Trustees recommends you vote FOR the following: 1. Election of Trustees Nominees: 01. Sidney R. Brown 02. Stephen T. Burdumy 03. Gregory P. Chandler 04. Michael C. Forman 05. Richard I. Goldstein 06. Charles P. Pizzi 07. Pedro A. Ramos 08. Robert B. Thomas The Board of Trustees recommends you vote FOR the following proposal: 2. To ratify the appointment of RSM US LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2019. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. E86094-P30032 Voting Items
E86095-P30032