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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 0-50398
TECHNOLOGY INVESTMENT CAPITAL CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 20-0188736
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
8 SOUND SHORE DRIVE
GREENWICH, CT 06830
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (203) 983-5275
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
TITLE OF EACH CLASS
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Common Stock, par value
$0.01 per share
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |_|
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2) Yes |_| No |X|.
The aggregate market value of common stock held by non-affiliates of the
Registrant on March 8, 2004 based on the closing price on that date of $15.00 on
the Nasdaq National Market, was $146,463,000. For the purposes of calculating
this amount only, all directors and executive officers of the Registrant have
been treated as affiliates. There were 10,000,100 shares of the Registrant's
common stock outstanding as of March 8, 2004.
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PRELIMINARY NOTE
This Form 10-K/ A is being filed by Technology Investment Capital Corp.
(the "Company") to report Part III information in lieu of the incorporation of
such information by reference to the Company's Proxy Statement for its 2004
Annual Meeting of Stockholders.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Certain information, as of April 14, 2004, with respect to each of the
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 they hold, and the year in which each of
them became a director of the Company. The business address of each director
listed below is 8 Sound Shore Drive, Greenwich, Connecticut 06830.
INDEPENDENT DIRECTORS
The following directors are not "interested persons" as defined in the
Investment Company Act of 1940.
NAME AND YEAR FIRST ELECTED
DIRECTOR AGE BACKGROUND INFORMATION
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Steven P. Novak (2003)........... 55 Mr. Novak currently serves as president of Palladio Capital
Management, LLC and as the principal and managing member of
the General Partner of Palladio Partners, LP, an equities
hedge fund that commenced operations in July 2002. Prior to
founding Palladio, Mr. Novak was a Managing Director of C.E.
Unterberg, Towbin from February 1993 through December 2001.
Mr. Novak serves on the board of directors of CyberSource
Corporation.
G. Peter O'Brien (2003).......... 57 Mr. O'Brien is currently a member of the Board of Trustees
of Colgate University and President of the Board of
Directors of Hill House, Inc., a congregate care facility
for low income elderly residents in Riverside, Connecticut.
Mr. O'Brien retired as a managing director of Merrill Lynch
& Co. in 1999 after working in the Equity Capital Markets
area since he joined Merrill Lynch & Co. in 1971. Mr.
O'Brien serves on the board of directors of the Legg Mason
Family of Mutual Funds, the Royce Funds and the Renaissance
IPO Plus Aftermarket Fund.
Tonia L. Pankopf (2003).......... 35 Ms. Pankopf has been a senior analyst and managing director
at Palladio Capital Management since January of 2004. She was a
private consultant from July 2003 through December 2003. She
previously served as an analyst with P.A.W. Capital Partners, LP
from 2001 to July 2003. Ms. Pankopf was senior analyst and
vice president at Goldman, Sachs & Co. from 1999 to 2001 and
at Merrill Lynch & Co. from 1998 to 1999.
INTERESTED DIRECTORS
Messrs. Cohen and Royce are "interested persons" as defined in the Investment
Company Act of 1940. Mr. Cohen is an interested person of the Company due to his
position as chief executive officer and president of Technology Investment
Management, LLC ("TIM"), the Company's investment adviser, and as the managing
member of BDC Partners, LLC, the managing member of TIM. Mr. Royce is an
interested person of the Company due to his relationship with Royce &
Associates, LLC.
NAME AND YEAR FIRST ELECTED
DIRECTOR AGE BACKGROUND INFORMATION
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Jonathan H. Cohen (2003)......... 39 Mr. Cohen is chief executive officer and president of
Technology Investment Capital Corp. and its investment
adviser, Technology Investment Management, and the managing
member of BDC Partners. Mr. Cohen is also a principal of JHC
Capital Management, a registered investment adviser that
serves as the sub-adviser to the Royce Technology Value
Fund, and was previously a principal of Privet Financial
Securities, LLC, a registered broker-dealer. Prior to
founding JHC Capital Management in 2001, Mr. Cohen managed
technology research groups at Wit SoundView from 1999 to
2001. He has also managed securities research groups at
Merrill Lynch & Co. from 1998 to 1999.
Charles M. Royce (2003).......... 64 Mr. Royce became president and chief investment officer (in
1972) and a member of the Board of Managers (in 2001) of
Royce & Associates, LLC (which term, as used in this proxy
statement, includes its corporate predecessor). He also
manages or co-manages ten of Royce & Associates' open- and
closed-end registered funds. Mr. Royce serves on the board
of directors of The Royce Funds.
INFORMATION ABOUT EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following information, as of April 14, 2004, pertains to our executive
officers who are not directors of the Company. Certain of our executive officers
serve as directors of, or on the board of managers of, certain of our portfolio
companies.
NAME AGE BACKGROUND INFORMATION
- ---- --- ----------------------
Saul B. Rosenthal................ 35 Mr. Rosenthal is chief operating officer, treasurer and
corporate secretary of Technology Investment Capital Corp.
and its investment adviser, Technology Investment
Management, and a member of BDC Partners. Mr. Rosenthal was
previously president of Privet Financial Securities, LLC, a
registered broker-dealer and financial consultant to small
to medium-sized private and public technology companies.
Mr. Rosenthal led the private financing/public company
effort at SoundView Technology Group from 2000 to 2002,
where he co-founded SoundView's Private Equity Group.
Previously, Mr. Rosenthal was a vice president and
co-founder of the Private Equity Group at Wit Capital from
1998 to 2000.
Patrick F. Conroy................ 47 Mr. Conroy is the chief financial officer of Technology
Investment Capital Corp., Technology Investment Management,
and BDC Partners. He joined the Company in December 2003,
and was previously a consultant on financial reporting and
compliance matters, as well as an adjunct professor of
accounting and finance at St. Thomas Aquinas College. Mr.
Conroy was the chief financial officer of New York
Mercantile Exchange from 1993 to 2003. He is a certified
public accountant.
Lee D. Stern..................... 52 Mr. Stern is an executive vice president of Technology
Investment Capital Corp. and the chief transaction officer of
Technology Investment Management and BDC Partners. He has
over 20 years of financial and investment experience in
leveraged finance and in financing technology companies. Prior
to joining the Company, Mr. Stern was a member of Hill Street
Capital, and was previously a partner of Thomas Weisel
Partners and its predecessor, NationsBanc Montgomery, from
1997 to 2000.
COMMITTEES OF THE BOARD OF DIRECTORS
Our board of directors has established an audit committee and a valuation
committee. During 2003, the board of directors of the Company held 4 board
meetings and 1 committee meeting. All directors attended at least 75% of the
aggregate number of meetings of the respective boards and of the respective
committees on which they served. The Company requires each director to make a
diligent effort to attend all board and committee meetings, as well as each
annual meeting of stockholders.
The Audit Committee. The audit committee operates pursuant to a charter
approved by the board of directors. The charter sets forth the responsibilities
of the Audit Committee. The Audit Committee's responsibilities include
recommending the selection of independent auditors for the Company, reviewing
with such independent auditors the planning, scope and results of their audit of
the Company's financial statements, pre-approving the fees for services
performed, reviewing with the independent auditors the adequacy of internal
control systems, reviewing the Company's annual financial statements and
periodic filings, and receiving the Company's audit reports and financial
statements. The Audit Committee is presently composed of three persons,
including Messrs. Novak and O'Brien and Ms. Pankopf, all of whom are considered
independent under the rules promulgated by NASDAQ. The Company's board of
directors has determined that Mr. Novak is an "audit committee financial expert"
as that term is defined under Item 401 of Regulation S-K of the Securities
Exchange Act of 1934. Mr. Novak meets the current independence and experience
requirements of Rule 10A-3 of the Exchange Act and, in addition, is not an
"interested person" of the Company as that term is defined in Section 2(a)(19)
of the Investment Company Act of 1940. The Audit Committee met once during 2003.
The Nominating Committee. The Company does not have a nominating
committee. A majority of the independent directors of the board of directors, in
accordance with the NASDAQ listing standards, recommends candidates for election
as directors. The Company does not currently have a charter or written policy
with regard to the nomination process or stockholder recommendations. The
absence of such a policy does not mean, however, that a stockholder
recommendation would not have been considered had one been received.
In evaluating director nominees, the independent members of the board of
directors consider the following factors:
o the appropriate size and composition of the Company's board of
directors;
o whether or not the person is an "interested person" of the
Company as defined in Section 2(a)(19) of the Investment
Company Act of 1940;
o the needs of the Company with respect to the particular
talents and experience of its directors;
o the knowledge, skills and experience of nominees in light of
prevailing business conditions and the knowledge, skills and
experience already possessed by other members of the board of
directors;
o familiarity with national and international business matters;
o experience with accounting rules and practices;
o appreciation of the relationship of the Company's business to
the changing needs of society;
o the desire to balance the considerable benefit of continuity
with the periodic injection of the fresh perspective provided
by new members; and
o all applicable laws, rules, regulations, and listing
standards.
The board's goal is to assemble a board of directors that brings to the
Company a variety of perspectives and skills derived from high quality business
and professional experience.
Other than the foregoing there are no stated minimum criteria for director
nominees, although the independent members of the board of directors may also
consider such other factors as they may deem are in the best interests of the
Company and its stockholders. The board of directors also believes it
appropriate for certain key members of the Company's management to participate
as members of the board of directors.
The independent members of the board of directors identify nominees by
first evaluating the current members of the board of directors willing to
continue in service. Current members of the board of directors with skills and
experience that are relevant to the Company's business and who are willing to
continue in service are considered for re-nomination, balancing the value of
continuity of service by existing members of the board of directors with that of
obtaining a new perspective. If any member of the board of directors does not
wish to continue in service or if the board of directors decides not to
re-nominate a member for re-election, the independent members of the board of
directors identify the desired skills and experience of a new nominee in light
of the criteria above. The entire board of directors is polled for suggestions
as to individuals meeting the aforementioned criteria. Research may also be
performed to identify qualified individuals. To date, the Company has not
engaged third parties to identify or evaluate or assist in identifying potential
nominees although the Company reserves the right in the future to retain a third
party search firm, if necessary.
The Valuation Committee. The Valuation Committee establishes guidelines
and makes recommendations to our board of directors regarding the valuation of
our loans and investments. The Valuation Committee is presently composed of
Messrs. Novak and O'Brien and Ms. Pankopf. The valuation committee did not meet
during 2003.
The Compensation Committee. The Company does not have a compensation
committee because our executive officers do not receive any direct compensation
from the Company.
COMMUNICATION WITH THE BOARD OF DIRECTORS
Stockholders with questions about the Company are encouraged to contact
Technology Investment Capital Corp.'s Investor Relations department. However, if
stockholders believe that their questions have not been addressed, they may
communicate with the Company's board of directors by sending their
communications to Technology Investment Capital Corp., c/o Saul B. Rosenthal,
Corporate Secretary, 8 Sound Shore Drive, Greenwich, Connecticut 06830. All
stockholder communications received in this manner will be delivered to one or
more members of the board of directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, the
Company's directors and executive officers, and any persons holding more than
10% of its common stock, are required to report their beneficial ownership and
any changes therein to the Securities and Exchange Commission 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, the
Company believes that during 2003 all Section 16(a) filing requirements
applicable to such persons were met in a timely manner.
CODE OF ETHICS
The Company has adopted a code of ethics which applies to, among
others, its senior officers, including its Chief Executive Officer and its Chief
Financial Officer, as well as every employee of the Company. The Company's code
can be accessed via its website at http://www.ticc.com. The Company intends to
disclose amendments to or waivers from a required provision of the code on Form
8-K.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth compensation of the Company's directors,
none of whom is an employee of the Company. Except as set forth in such table,
no other compensation was paid to any directors (including those who also serve
as executive officers) by the Company or any other entity in the Company's fund
complex during 2003.
COMPENSATION TABLE
PENSION OR
RETIREMENT
BENEFITS TOTAL
AGGREGATE ACCRUED AS COMPENSATION FROM
COMPENSATION PART OF THE FUND AND FUND
FROM THE COMPANY'S COMPLEX PAID TO
NAME AND POSITION COMPANY EXPENSES(1) DIRECTORS(2)
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INTERESTED DIRECTORS
Jonathan H. Cohen $ -- None $ --
Charles M. Royce -- None --
INDEPENDENT DIRECTORS
Steven P. Novak -- None --
G. Peter O'Brien -- None --
Tonia L. Pankopf -- None --
EXECUTIVE OFFICERS
Patrick F. Conroy --(3) None --
Saul B. Rosenthal --(4) None --
Lee D. Stern --(4) None --
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(1) We do not have a bonus, profit sharing or retirement plan, and directors do
not receive any pension or retirement benefits. (2) Consists only of
directors' fees paid by the Company during 2003. The directors have waived
all of their fees for 2003.
(2) Consists only of directors' fees paid by the Company during 2003. The
directors have waived all of their fees for 2003.
(3) We hired a chief financial officer after the completion of our initial
public offering; however, he did not receive any compensation from us in
2003. The compensation of our chief financial officer is paid by BDC
Partners, subject to reimbursement by us of an allocable portion of such
compensation for services rendered by him to the Company. For the fiscal
year ending December 31, 2004, we estimate that the amount of such
reimbursement will be approximately $180,000.
(4) With the exception of our chief financial officer, none of our officers
receives compensation from the Company.
COMPENSATION OF DIRECTORS
The directors have waived all of their fees for the year 2003. Beginning
in 2004, the independent directors will receive an annual fee of $35,000 and
will receive $2,000 plus reimbursement of reasonable out-of-pocket expenses
incurred in connection with attending each board meeting. No additional fees
will be paid in connection with attending committee meetings. No compensation is
paid to directors who are interested persons of the Company as defined in the
Investment Company Act of 1940.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 14, 2004, the beneficial
ownership of each director, the Company's executive officers, each person known
to us to beneficially own 5% or more of the outstanding shares of our common
stock, and the executive officers and directors as a group.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting or investment power with
respect to the securities. Ownership information for those persons who
beneficially own 5% or more of our shares of common stock is based upon Schedule
13G filings by such persons with the Securities and Exchange Commission and
other information obtained from such persons.
Unless otherwise indicated, the Company believes that each beneficial
owner set forth in the table has sole voting and investment power and has the
same address as the Company. Our address is 8 Sound Shore Drive, Greenwich,
Connecticut, 06830.
NUMBER OF
SHARES OWNED
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY PERCENTAGE OF CLASS(1)
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INTERESTED DIRECTORS
Jonathan H. Cohen ....................................................... 139,100 1.38%
Charles M. Royce......................................................... 69,500 *
INDEPENDENT DIRECTORS
Steven P. Novak.......................................................... 2,000 *
G. Peter O'Brien......................................................... 10,000 *
Tonia L. Pankopf......................................................... 8,300 *
EXECUTIVE OFFICERS
Patrick F. Conroy........................................................ 200 *
Saul B. Rosenthal........................................................ 3,400 *
Lee D. Stern............................................................. 3,400 *
EXECUTIVE OFFICERS AND DIRECTORS AS A GROUP.............................. 235,900 2.35%
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* Represents less than one percent.
(1) Based on a total of 10,045,961 shares of the Company's common stock issued
and outstanding on April 14, 2004.
Set forth below is the dollar range of equity securities beneficially
owned by each director of the Company as of April 14, 2004:
DOLLAR RANGE OF EQUITY SECURITIES
NAME OF DIRECTOR BENEFICIALLY OWNED (1)(2)(3)
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INTERESTED DIRECTORS
Jonathan H. Cohen(4)................................. Over $100,000
Charles M. Royce(4).................................. Over $100,000
INDEPENDENT DIRECTORS
Steven P. Novak...................................... $10,001 - $50,000
G. Peter O'Brien..................................... Over $100,000
Tonia L. Pankopf..................................... Over $100,000
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(1) Beneficial ownership has been determined in accordance with Rule
16a-1(a)(2) under the Securities Exchange Act of 1934.
(2) The dollar ranges are: None, $1-$10,000, $10,001-$50,000, $50,001-$100,000,
or Over $100,000.
(3) The dollar range of equity securities beneficially owned in the Company is
based on the closing price of $14.38 on April 14, 2004 on the Nasdaq Stock
Market.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has entered into an investment advisory agreement with TIM. TIM is
controlled by BDC Partners, its managing member. In addition to BDC Partners,
TIM is owned by Royce & Associates as the non-managing member. BDC Partners, as
the managing member of TIM, manages the business and internal affairs of TIM .
In addition, BDC Partners provides us with office facilities and administrative
services pursuant to an administration agreement. Jonathan H. Cohen, our chief
executive officer and president, as well as a director, is the managing member
of and controls BDC Partners. Saul B. Rosenthal, our chief operating officer, is
also the chief operating officer of TIM and a member of BDC Partners.
Charles M. Royce, a director and the non-executive chairman of our
board of directors, is president and chief investment officer of Royce &
Associates. Royce & Associates, as the non-managing member of our investment
adviser, does not take part in the management or participate in the operations
of TIM; however, Royce & Accociates has agreed to make Mr. Royce or certain
other portfolio managers available to TIM to provide certain consulting services
without compensation. Royce & Associates is a wholly owned subsidiary of Legg
Mason, Inc.
JHC Capital Management, a registered investment adviser owned by Mr.
Cohen, serves as the sub-adviser to the Royce Technology Value Fund. In
addition, JHC Capital Management has invested on behalf of certain of its
discretionary advisory clients in CyberSource Corporation, a public company
engaged in the business of processing online payments for electronic merchants
listed on the Nasdaq National Market. Mr. Novak, an independent director of the
Company, is also an independent director of CyberSource Corporation. JHC Capital
Management's discretionary advisory clients own in the aggregate less than 5% of
the outstanding common stock (on a fully diluted basis) of CyberSource
Corporation.
Saul B. Rosenthal, chief operating officer, treasurer and corporate
secretary of the Company, holds less than a 0.02% limited partnership interest
in Dawntreader Fund II, a private equity partnership which owns less than 5% of
MortgageIT, Inc., one of the Company's portfolio companies.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The audit committee and the non-interested members of the board of
directors have selected PricewaterhouseCoopers LLP as independent auditors for
the Company for the fiscal year ending December 31, 2004. This selection is
subject to ratification or rejection by the stockholders of the Company.
PricewaterhouseCoopers LLP has advised the Company that neither the firm
nor any present member or associate of it has any material financial interest,
direct or indirect, in the Company or its subsidiaries.
FISCAL YEAR ENDED FISCAL YEAR ENDED
DECEMBER 31, 2003 DECEMBER 31, 2002
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Audit Fees $ 50,000 N/A
Audit-Related Fees -- N/A
Tax Fees -- N/A
All Other Fees -- N/A
TOTAL FEES: $ 50,000 N/A
Audit Fees. Audit fees consist of fees billed for professional services
rendered for the audit of our year-end financial statements and services that
are normally provided by PricewaterhouseCoopers 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 Fees. Tax fees consist of fees billed for professional services for
tax compliance. These services include assistance regarding federal, state, and
local tax compliance.
All Other Fees. All other fees would include fees for products and
services other than the services reported above.
The Audit Committee of the board of directors of Technology Investment
Capital Corp. (the "Audit Committee") operates under a written charter adopted
by the board of directors effective as of October 28, 2003. The Audit Committee
is currently comprised of Messrs. Novak and O'Brien and Ms. Pankopf.
The Audit Committee has established a pre-approval policy that
describes the permitted audit, audit-related, tax and other services to be
provided by PricewaterhouseCoopers LLP, the Company's independent auditor. The
policy requires that the Audit Committee pre-approve the audit and non-audit
services performed by the independent auditor in order to assure that the
provision of such service does not impair the auditor's independence.
Any requests for audit, audit-related, tax and other services that have
not received general pre-approval must be submitted to the Audit Committee for
specific pre-approval, irrespective of the amount, and cannot commence until
such approval has been granted. Normally, pre-approval is provided at regularly
scheduled meetings of the Audit Committee. However, the Audit Committee may
delegate pre-approval authority to one or more of its members. The member or
members to whom such authority is delegated shall report any pre-approval
decisions to the Audit Committee at its next scheduled meeting. The Audit
Committee does not delegate its responsibilities to pre-approve services
performed by the independent auditor to management.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Technology Investment Capital Corp.
Date: April 29, 2004 By: /s/ Jonathan H. Cohen
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Jonathan H. Cohen
Chief Executive Officer