Capital Southwest Corporation (CSWC) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Capital Southwest Corporation Annual Meeting of Shareholders. [Operator Instructions] Now I would like to hand the conference over to our President and CEO, Mr. Bowen Diehl. Sir, please go ahead.

Thank you, operator. Well, on behalf of the Board of Directors, officers and employees of Capital Southwest, welcome to the Annual Meeting of Shareholders. I am Bowen Diehl, CEO of Capital Southwest. I will act as Chairman of the meeting, which I will now call to order. We will conduct the meeting in accordance with the agenda and ask that you abide by the rules of conduct of the annual meeting that we have made available to you online. If any shareholder has any comments that do not pertain to a particular proposal for the attendees, we request that you hold your comments until that portion of the meeting. Michael Sarner, Secretary of the corporation, will now present proof of the due calling of this meeting.

Mr. Diehl, I present the notice of annual meeting of shareholders relating to the calling and convening of this annual meeting of the shareholders, unless otherwise requested, I suggest that we dispense with the reading of this notice.

Is there such a request?

Mr. Diehl, I move the reading of the notice of the annual meeting of shareholders be dispensed with.

You've heard the motion. Is there any discussion? If not, all in favor will signify by saying aye. [Voting]

Opposed? No. [Voting]

Motion is carried.

Second, I present a complete list certified by American Stock Transfer & Trust Company, our transfer agent of the holders of the corporation's common stock as of the close of business on June 1, 2020, the record date fixed by the Board of Directors for shareholders entitled to notice of and to vote at this meeting. The list has been open for at least the last 10 days for the inspection by shareholders. This list will be kept open for the inspection by shareholders throughout the course of this meeting. It shows that at the close of business on June 1, 2020, there were 17,998,098 shares of common stock of the corporation outstanding and entitled to vote at this meeting. Finally, I present an affidavit signed by Joanne Vogel of Broadridge Financial Solutions stating that she caused to be mailed the notice of annual meeting of shareholders and notice of Internet availability of proxy materials to each shareholder of record.

Mr. Sarner, please incorporate a copy of this notice of the annual meeting of shareholders, together with the form of proxy card and the affidavit of mailing in the minute book of the corporation as part of the minutes of this meeting. The Board has appointed [ Robert Johnson ] to be inspector of election at this annual meeting. Has the oath of the inspector of election been signed and filed with the Secretary?

The oath has been signed and filed, Mr. Diehl.

Stockholders may vote online during the meeting. You may vote your shares by clicking on the Vote Here button on your screen. If you previously voted by proxy, you do not need to vote today unless you would like to change your vote. Will the inspector of election, please report on the total number of shares of the corporation present online or represented by proxy to vote at this meeting?

Mr. Diehl, a poll of the holders of common stock present in person or represented by proxy at this meeting shows that there are present in person or represented by proxy at this meeting the holders of record at the close of business on June 1, 2020, an aggregate of 14,652,123 shares of common stock of the corporation, representing 81.4% of the shares entitled to vote.

Thank you. Holders of record of the majority of the issued and outstanding common stock entitled to vote at this meeting are present in person or represented by proxy, and therefore, a quorum is present for all purposes. This meeting is therefore declared lawfully and properly convened, and we can proceed with the transaction of business -- of the business for which this meeting has been called. The certified report of the inspector of election will be attached as an exhibit to the minutes of the meeting. At this time, I would like to introduce the nominees to serve on our Board of Directors who are present this morning: David R. Brooks, Christine S. Battist, Jack D. Furst, T. Duane Morgan, William R. Thomas and myself, Bowen Diehl. The first item of business is the reading of the minutes of the annual meeting of shareholders held on July 31, 2019. The chair will entertain a motion that the reading of the minutes of that meeting be dispensed with and that they be approved and as written.

Mr. Diehl, I move that the reading of the minutes of the 2019 annual meeting be dispensed with and they'd be approved as written.

I second the motion.

You've heard the motion. Is there any discussion? If not, all in favor will signify by saying aye. [Voting]

Any opposed? [Voting]

If none are opposed, the motion is carried. As stated in the notice of annual meeting of shareholders, this meeting is being held to consider and act upon the following: number one, the proposal to elect Mr. Brooks, Ms. Battist, Mr. Furst, Mr. Morgan, Mr. Thomas and myself to serve as Directors until the 2021 Annual Meeting of Shareholders or their respective successors are duly elected and qualified; number two, the proposal to approve, on an advisory basis, the compensation of our named executive officers; number three, the proposal to ratify the appointment of our Audit Committee -- by our Audit Committee of RSM US LLP as our independent registered public accounting firm for the fiscal year ending March 31, 2021; and number four, to transact such other business as may properly come before the annual meeting. The meeting will now consider these items of business, beginning with the election of the 6 directors, each to serve until the next annual meeting of shareholders or until their respective successors shall be elected and qualified. The director will be elected by a majority of the votes cast, whether in person or represented by proxy. Based on the recommendation of the Board's Nominating and Corporate Governance Committee, the Board has recommended that shareholders vote in favor of each of the following persons for election of the Board of Directors: David R. Brooks, Christine S. Battist, Jack D. Furst, T. Duane Morgan, William R. Thomas and Bowen S. Diehl. Mr. Sarner, has the corporation received any nominations for directors from any shareholders in accordance with the corporation's bylaws?

No shareholder nominations for director have been received by the corporation.

Thank you. As there are no shareholder nominations for Director, a motion in order -- the motion is in order that nominations be closed.

Mr. Diehl, I move that the nominations be closed.

I second the motion.