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TSLX Argues TICC’s Board Is Either Ignorant of its Fiduciary Duty or Intentionally Acting to Defend the External Manager at the Expense of Stockholders
Delay of Annual Meeting and Significant Share Purchases by Insiders Represent Chairman’s Dismissal of Obligation to All Stockholders
TSLX has published a complete copy of a letter written by Mr. Novak to
TSLX encourages interested stakeholders to visit the website, www.changeticcnow.com, to view other materials relating to TSLXs efforts to effect positive change at TICC to maximize stockholder value.
A copy of the letter follows:
Dear Mr. Novak,
We are in receipt of your letter dated
Your letter demonstrates a profound, but no longer shocking, misalignment with the best interests of stockholders.
The simple fact is that despite the shares trading below net asset value
(“NAV”) for 634 consecutive days as of
Faced with a proxy contest that puts the manager’s income stream at risk, it is hard to see the Board’s continued and unprecedented failure to schedule TICC’s annual stockholder meeting as anything but a blatant and highly concerning effort to buy time to acquire enough shares to block change at TICC to the detriment of stockholders.
Your letter endorsing this share accumulation is a shocking dismissal of your role as Chairman and the lead independent director of TICC. It is self-serving for you to say “[t]he Board of Directors of TICC believes that ownership of TICC stock by management is an effective way to align the interests of management with the long-term interests of the Company and our stockholders, and encourages management and members of the board to own stock in TICC.” Was this not the case over the previous four years? We have included a complete copy of this letter to ensure all stockholders understand the disingenuous nature of your response.
Your defense of this behavior implies that you and the Board are:
- Unable to see that personally buying up TICC stock without an authorized stock repurchase program is simply putting personal interests ahead of stockholder interests. This is an abdication of your fiduciary duties to all stockholders. Individual board members clearly see TICC stock as a strong investment and are happy to take it for themselves while failing to approve a repurchase program that would be accretive to TICC's long-suffering stockholders.
- Complicit in a self-serving strategy to build a position to defend the existing external manager, at the expense of stockholders and in violation of your duties as Chairman of the Board and an independent director. Stockholders already question your ability to act independently following your role in the flawed and failed transaction in 2015 that led a federal judge to find TICC to have misled stockholders and to have likely violated federal securities laws.
Your new enthusiasm for TICC stock as a personal investment is particularly troubling in light of the Board’s delay in setting the Annual Meeting date.
The longer the Company delays setting a date for the 2016 Annual Meeting, the more inappropriate it becomes for insiders to continue to buy TICC shares. Stockholders deserve to vote on material issues put before them in a timely manner consistent with TICC's past practice - this is the first time in 11 years that proxy materials for the Company’s Annual Meeting have not been filed by now. Stockholders can only draw the conclusion that you and the Board are intentionally failing to act to provide insiders the time to purchase stock to protect the existing external manager’s income stream. Otherwise, why are you delaying? And if there is another reason for delaying the meeting that is yet to be disclosed to the public, how can insiders continue to purchase stock?
You first endorse and lead a strategy to put millions of dollars into the management team’s hands by the proposed sale of the manager to a third party. After those efforts failed by a vote of TICC stockholders, you are now facilitating trying to put millions of dollars in the pockets of fellow board members by delaying the Annual Meeting. These efforts to save the external management contract at all costs have directly impacted stockholder value.
You have lost significant value for stockholders by acting in a self-interested manner, ignoring our compelling proposal to deliver real value for TICC stockholders, refusing to authorize a stock repurchase program for ALL stockholders, and continuing to delay setting the 2016 Annual Meeting.
Furthermore, we have seen no evidence that you intend to align your interests with stockholders’ interests, as doing so would jeopardize the current external manager contract and the related fees the contract generates.
TICC stockholders deserve directors who will act in stockholders’ best interests and deliver real value. TICC stockholders need answers now.
Very truly yours,
Chairman and Co-Chief Executive Officer
Co-Chief Executive Officer
ATTN: TICC LETTER
Chairman and Co-Chief Executive Officer
Co-Chief Executive Officer
Mr. Easterly and Mrs. Fishman,
The Special Committee is in receipt of your letter dated
We have carefully considered the allegations contained in your letter
and find nothing improper with the TICC management team’s purchase of
stock in our company. These purchases were consistent with TICC’s Code
of Ethics and Insider Trading Policy, both of which are publicly
available on TICC’s website, and were publicly announced in accordance
The Board of Directors of TICC believes that ownership of TICC stock by management is an effective way to align the interests of management with the long-term interests of the Company and our stockholders, and encourages management and members of the board to own stock in TICC.
As we have previously stated, TICC has bought back shares of its common
stock opportunistically to maximize the value of our company. Consistent
with that policy, during the first quarter of 2016, TICC repurchased
approximately 4.9 million shares of common stock for a total of
Information set forth herein may contain forward-looking statements,
including, but not limited to, statements with regard to the expected
future financial position, results of operations, cash flows, dividends,
portfolio, financing plans, business strategy, budgets, capital
expenditures, competitive positions, growth opportunities, plans and
objectives of management of
Such forward-looking statements are inherently uncertain, and
stockholders and other potential investors must recognize that actual
results may differ materially from TSLX’s expectations as a result of a
variety of factors including, without limitation, those discussed below.
Such forward-looking statements are based upon TSLX’s current
expectations and include known and unknown risks, uncertainties and
other factors, many of which TSLX is unable to predict or control, that
may cause TSLX’s plans with respect to TICC or the actual results or
performance of TICC, TSLX or TICC and TSLX on a combined basis to differ
materially from any plans, future results or performance expressed or
implied by such forward-looking statements. These statements involve
risks, uncertainties and other factors discussed below and detailed from
time to time in TSLX’s filings with the
Risks and uncertainties related to a possible transaction include, among others, uncertainty as to whether TSLX will further pursue, enter into or consummate a transaction on the terms set forth in its proposal or on other terms, uncertainty as to whether TICC’s board of directors will engage in good faith, substantive discussions or negotiations with TSLX concerning its proposal or any other possible transaction, potential adverse reactions or changes to business relationships resulting from the announcement or completion of a transaction, uncertainties as to the timing of a transaction, adverse effects on TSLX’s stock price resulting from the announcement or consummation of a transaction or any failure to complete a transaction, competitive responses to the announcement or consummation of a transaction, the risk that regulatory or other approvals and any financing required in connection with the consummation of a transaction are not obtained or are obtained subject to terms and conditions that are not anticipated, costs and difficulties related to a potential integration of TICC’s businesses and operations with TSLX’s businesses and operations, the inability to obtain, or delays in obtaining, cost savings and synergies from a transaction, unexpected costs, liabilities, charges or expenses resulting from a transaction, litigation relating to a transaction, the inability to retain key personnel, and any changes in general economic and/or industry specific conditions.
In addition to these factors, other factors that may affect TSLX’s plans, results or stock price are set forth in TSLX’s Annual Report on Form 10-K and in its reports on Forms 10-Q and 8-K.
Many of these factors are beyond TSLX’s control. TSLX cautions investors that any forward-looking statements made by TSLX are not guarantees of future performance. TSLX disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.
Third Party-Sourced Statements and Information
Certain statements and information included herein have been sourced from third parties. TSLX does not make any representations regarding the accuracy, completeness or timeliness of such third party statements or information. Except as expressly set forth herein, permission to cite such statements or information has neither been sought nor obtained from such third parties. Any such statements or information should not be viewed as an indication of support from such third parties for the views expressed herein. All information in this communication regarding TICC, including its businesses, operations and financial results, was obtained from public sources. While TSLX has no knowledge that any such information is inaccurate or incomplete, TSLX has not verified any of that information. TSLX reserves the right to change any of its opinions expressed herein at any time as it deems appropriate. TSLX disclaims any obligation to update the data, information or opinions contained herein.
Proxy Solicitation Information
In connection with TSLX’s solicitation of proxies for the 2016 annual
meeting of TICC stockholders in favor of (a) the election of TSLX’s
nominee to serve as a director of TICC and (b) TSLX’s proposal to
terminate the Investment Advisory Agreement, dated as of
TSLX STRONGLY ADVISES ALL STOCKHOLDERS OF TICC TO READ THE TSLX PROXY STATEMENT AND THE OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION. SUCH TSLX PROXY MATERIALS ARE AND WILL BECOME AVAILABLE AT NO CHARGE ON THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV AND ON TSLX’S WEBSITE AT HTTP://WWW.TPGSPECIALTYLENDING.COM. IN ADDITION, TSLX WILL PROVIDE COPIES OF THE TSLX PROXY STATEMENT WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO TSLX’S PROXY SOLICITOR AT TPG@MACKENZIEPARTNERS.COM.
The participants in the solicitation are TSLX and
Security holders may obtain information regarding the names,
affiliations and interests of TSLX’s directors and executive officers in
TSLX’s Annual Report on Form 10-K for the year ended
This document shall not constitute an offer to sell, buy or exchange or the solicitation of an offer to sell, buy or exchange any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
TPG Specialty Lending, Inc.
Lucy Lu, 212-601-4753
Luke Barrett, 212-601-4752
Tom Johnson or Pat Tucker, 212-371-5999
firstname.lastname@example.org / email@example.com