Phenixfin Corporation · NASDAQ:PFX
Phenixfin — Medley Capital — Proxy Contest (May 2019)
29 slides from Phenixfin's proxy contest presentation, May 16, 2019
Slide 1: Presentation to the Stockholders of Medley Capital Corporation
The MCC board of directors has failed to act in your best interests. Vote on or before the Annual Meeting (June 4, 2019) to elect new directors. PRESENTATION TO THE STOCKHOLDERS OF MEDLEY CAPITAL CORPORATION NexPoint believes electing our experienced, independent director nominees to the MCC board i
Slide 2: Disclaimers
DISCLAIMERS The views expressed in this presentation represent the opinions of NexPoint Advisors, L.P. and its affiliates (collectively, the “NexPoint Group”), which beneficially own shares of common stock of Medley Capital Corporation (the “Company” or “MCC”), and are based on publicly available in
Slide 3: Disclaimers (Cont'd)
DISCLAIMERS (CONT’D) speak only as of the date of such materials, and involve risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such projected resul
Slide 4: June 4, 2019: Vote to Improve MCC Oversight
JUNE 4, 2019: VOTE TO IMPROVE MCC OVERSIGHT “…Medley Capital’s directors violated their fiduciary duties in entering into the Proposed Transactions…” 1 “The Special Committee [including Arthur Ainsberg, who is up for reelection]…sat supine in negotiations concerning the [Medley Mergers], allowing th
Slide 5: Contents
CONTENTS Disclaimers 2 Executive Summary 6 Urgent Action Needed 7 I. Overview of Events 9 II. NexPoint’s Director Nominees: Improving Board Independence 15 III. Annual Meeting Details / Voting Information 23 IV. Information on NexPoint’s Proposal to MCC 26 NexPoint urges you to vote FOR NexPoint’s t
Slide 6: Executive Summary
EXECUTIVE SUMMARY NexPoint believes maintaining the status quo presents significant risk to MCC’s stockholders. In order for MCC stockholders to protect their interests, they must vote by June 3, 2019 to be counted at the Annual Meeting (on June 4, 2019) to elect NexPoint’s two qualified, independen
Slide 7: Urgent Action Is Needed
URGENT ACTION IS NEEDED Poor performance is only the beginning: “Since its January 20, 2011 IPO, by every industry measure, Medley Capital has been in a steady financial decline. This decline occurred during a period of sustained stock market and sector share price increases. Medley Capital’s perfor
Slide 8: Urgent Action Is Needed: Covenant Default Risk
URGENT ACTION IS NEEDED MCC is at risk of default under certain financial covenants: ? The valuation risk is exacerbated by the fact that MCC is at risk of violating the debt covenants applicable to its 2024 Notes. As the Company noted in their first quarter 10-Q, the 2024 Notes contain certain fina
Slide 9: I. Overview of Events
I . OVERVIEW OF EVENTS
Slide 10: Timeline of Events
TIMELINE OF EVENTS 1. MCC announces 5. a zero-premium 3. Delaware merger with FrontFour court 7. NexPoint affiliates of the files issues files proxy Taubes lawsuit opinion statement 2. NexPoint 4. ISS 6. FrontFour submits recommends reaches proposals against the settlement mergers 1. In August 2018,
Slide 11: Timeline of Events (Cont'd)
TIMELINE OF EVENTS (CONT’D) 1. MCC announces 5. a zero-premium 3. Delaware merger with affiliate FrontFour court 7. NexPoint managed by the files issues files proxy Taubes lawsuit opinion statement 2. NexPoint 4. ISS 6. submits recommends FrontFour proposals against the reaches mergers settlement 3.
Slide 12: Additional Excerpts from the Delaware Court Opinion
ADDITIONAL EXCERPTS FROM THE DELAWARE COURT OPINION [MCC’s filings] create[d] the misleading impression that the Special Committee replicated an arm’s-length negotiation amid the conflicts tainting “ the [Merger] Transaction.”…the majority of the Special Committee members failed to act independently
Slide 13: Timeline of Events (Cont'd)
TIMELINE OF EVENTS (CONT’D) 1. MCC announces 5. a zero-premium 3. Delaware merger with an FrontFour court 7. NexPoint affiliate managed files issues files proxy by the Taubes lawsuit opinion statement 2. NexPoint 4. ISS 6. submits recommends FrontFour proposals against the reaches mergers settlement
Slide 14: Timeline of Events (Cont'd): Where We Are Today
TIMELINE OF EVENTS (CONT’D): WHERE WE ARE TODAY 1. MCC announces 5. a zero-premium 3. Delaware merger with an FrontFour court 7. NexPoint affiliate managed files issues files proxy by the Taubes lawsuit opinion statement 2. NexPoint 4. ISS 6. submits recommends FrontFour proposals against the reache
Slide 15: II. Improving Board Independence: NexPoint's Director Nominees
II . IMPROVING BOARD INDEPENDENCE : NEXPOINT’S DIRECTOR NOMINEES
Slide 16: MCC Board Members Found to Have Violated Their Fiduciary Duties
MCC BOARD MEMBERS WERE FOUND TO HAVE VIOLATED THEIR FIDUCIARY DUTIES BY THE DELAWARE CHANCERY COURT MEMBERS OF THE BOARD FOUND TO HAVE VIOLATED THEIR FIDUCIARY DUTIES Brook Taube – CEO & Chairman MDLY Co-CEO; financial interests lie in Medley Management over MCC Seth Taube MDLY Co-CEO; financial int
Slide 17: MCC's Current Board Composition
MCC’S CURRENT BOARD COMPOSITION Five of the seven directors who were found to have violated their fiduciary duties remain on the board today. Two are up for reelection. While FrontFour’s directors help, we believe more independent directors are needed to both ensure stockholders are protected from f
Slide 18: The MCC Directors Up for Reelection: Seth Taube
THE MCC DIRECTORS UP FOR REELECTION Seth Taube – Interested Director ? A Medley insider whose “financial interest lies in Medley Management” first and foremost ? Pursued via the Medley Mergers a lucrative compensation package “more secure than the [current] at-will Management Agreement“1 despite poo
Slide 19: The MCC Directors Up for Reelection: Arthur Ainsberg
THE MCC DIRECTORS UP FOR REELECTION Arthur Ainsberg –Legacy Director ? Member of special committee that failed stockholders by allowing Seth Taube and his brother to dominate the transaction process at the expense of other MCC stockholders – approving a transaction that “allowed Medley Management to
Slide 20: Enhancing Board Independence: NexPoint's Nominees
ENHANCING BOARD INDEPENDENCE: NEXPOINT’S NOMINEES ? Currently less than 60% of the MCC board is independent. ? The Investment Company Institute considers it best practice to have at least 75% of a fund board’s directors be independent.1 ? We believe NexPoint’s nominees would drastically improve the
Slide 21: Stephen A. Mongillo | NexPoint Director Nominee
STEPHEN A. MONGILLO | NEXPOINT DIRECTOR NOMINEE Professional Experience Icahn Capital LP, Managing Director Bear Stearns, Senior Managing Director Board Experience ? CVR Energy, Inc., Director (Current) AMPF, Inc., Chairman (Current) Herc Holdings, Inc., Director, Member of Audit and Financing Commi
Slide 22: Mark T. Goglia | NexPoint Director Nominee
MARK T. GOGLIA | NEXPOINT DIRECTOR NOMINEE Professional Experience ? Condon Tobin Sladek Thornton PLLC, Head of Corporate Practice (Current) ? Goglia Law PLLC, Managing Partner ? Egan Nelson LLP, Partner ? Jones Day, Managing Partner Education ? University of Virginia, J.D. ? Washington & Lee Univer
Slide 23: III. Annual Meeting Details/Voting Information
III . ANNUAL MEETING DETAILS/VOTING INFORMATION
Slide 24: Annual Meeting & Proxy Vote: Important Information
ANNUAL MEETING & PROXY VOTE: IMPORTANT INFORMATION Annual Meeting Information June 4, 2019 12:00 p.m., Eastern time Eversheds Sutherland (US) LLP 1114 Avenue of the Americas, 40th Floor New York, New York 10036 Proxy Information Your proxy is due on June 3, 2019 if not voted at the meeting. Only you
Slide 25: Important Contact Information
IMPORTANT CONTACT INFORMATION Proxy/Voting Contact Information D.F. King & Co., Inc. 48 Wall Street, 22nd Floor New York, NY 10005 If you have any questions or need assistance voting your shares, contact: Phone: +1 (866) 342-2676 Email: MCC@DFKing.com NexPoint Contact Information NexPoint Contact Em
Slide 26: IV. Information on NexPoint's Proposal to MCC
IV. INFORMATION ON NEXPOINT’S PROPOSAL TO MCC
Slide 27: NexPoint's Proposal to MCC
NEXPOINT’S PROPOSAL TO MCC1 An external investment advisory agreement between MCC and NexPoint: ? Reduced annualized management fee of 1.25% on the gross assets of the Company.? Reduced incentive fee of 15% on income and capital gains (with retention of the current hurdle rate of 2.1875%). ? Impleme
Slide 28: Why NexPoint: Robust Investment Platform
WHY NEXPOINT: ROBUST INVESTMENT PLATFORM At a Glance: NexPoint Advisors, L.P. ? Independent ? Approximately $10 billion in AUM1 ? Over 25 years of investing in credit and alternatives? Committed to aligning interests with investors? Diverse investment platform with a robust back-office infrastructur
Slide 29: Why NexPoint: Experience & Track Record
WHY NEXPOINT: EXPERIENCE & TRACK RECORD NexPoint Strategic Opportunities Fund (“NHF”)(NYSE:NHF) ? Publicly listed closed-end fund managed by NexPoint? Seeks to provide current income and capital appreciation ? Track record of material outperformance, exceeding that of all BDCs NexPoint Capital, Inc.