New Mountain Finance Corporation (NMFC) Earnings Call Transcript & Summary

Good morning, and welcome to the New Mountain Finance Corporation's 2020 Annual Stockholder Meeting. [Operator Instructions] I would now like to turn the meeting over to Rob Hamwee.

Hello, ladies and gentlemen. Will the meeting please come to order? I would like to welcome you all to the Annual Meeting of Stockholders of New Mountain Finance Corporation. I am Rob Hamwee, CEO of NMFC, and I will be presiding as Chairman at this meeting. Also present at the meeting today are other senior management members of NMFC: John Kline, President and COO; Shiraz Kajee, CFO; and Karrie Jerry, CCO and Corporate Secretary. Also in attendance, we have Rome Arnold, Al Hurley, David Ogens, Dan Hébert and Alice Handy, all of our independent Board members; as well as Steve Klinsky and Adam Weinstein, Chairman of the Board of Directors; and an interested director of NMFC, respectively. Karrie Jerry will act as secretary of the meeting. Jim Raitt, a representative of American Election Services, LLC, has been appointed to act as inspector of elections. Taylor Limbert, a representative from Deloitte & Touche, is also present at this meeting. During the question-and-answer period at the end of this meeting, he and Shiraz will be available to answer questions concerning the company's financial statements. Before we begin with the formal meeting, I would first like to recognize the current COVID-19 crisis and want to wish good health and safety to all our shareholders and their families. Furthermore, I would like to direct the shareholders to the letter issued on April 7, 2020, that addresses our current view of the COVID-19 crisis on our overall portfolio. We look forward to providing additional information on our quarterly earnings call on May 7. At this time, I will first go through the administrative matters and then have John Kline introduce the proposals that are included in the proxy. Stockholders should not address the meeting until recognized. Should you desire to ask a question or speak during the meeting, please enter your question in the box provided on the host website at www.virtualshareholdermeeting.com/NMFC2020. We ask that you restrict your remarks to the item of the agenda that are before us. Thank you for your cooperation. NMFC has already provided each stockholder access to a copy of the proxy statement and annual report. Copies of these documents are available to any stockholder who does not have them via our -- www.newmountainfinance.com. I would now like to ask the Secretary of NMFC to please read the Notice of Annual Meeting of Stockholders that was provided to all stockholders entitled to vote at this meeting.

Thank you, Rob. The notice reads as follows: to the stockholders of New Mountain Finance Corporation, a meeting, the Annual Meeting of Stockholders of New Mountain Finance Corporation, NMFC, or the company, will be held on April 22, 2020, at 9:00 a.m. Eastern Time. We are very pleased that this year's annual meeting will be a completely virtual meeting of stockholders, which will be conducted via live webcast. It is important to note that stockholders have the same rights and opportunities by participating in a virtual meeting as they would if attending an in-person meeting. You can participate in the annual meeting, vote and submit your questions during the annual meeting by visiting www.virtualshareholdermeeting.com/NMFC2020. You must have your 16-digit control number in order to access the annual meeting. The annual meeting will be held for the following purposes: one, to elect 3 directors to the Board of Directors of NMFC, who will each serve a term of 3 years or until their respective successors are duly elected and qualified; two, to ratify the appointment of Deloitte & Touche LLP to serve as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020; and three, to transact such other business as may properly come before the annual meeting. You have the right to receive notice of and to vote at the annual meeting if you were a stockholder of record at the close of business on March 3, 2020. NMFC is furnishing the proxy statement and proxy card to its stockholders on the Internet rather than mailing printed copies of those materials to each stockholder. If you received a notice of Internet availability of proxy materials by mail, you will not receive a printed copy of the proxy statement and proxy card unless you request them. Instead, the notice of Internet availability of proxy materials will instruct you as to how you may access and review the proxy statement and vote your proxy on the Internet. Your vote is extremely important to us. If you are unable to attend the annual meeting, we encourage you to vote your proxy on the Internet by following the instructions provided on the notice of Internet availability of proxy materials. You may also request from us, free-of-charge, hard copies of the proxy statement and proxy card for the company by following the instructions on the notice of Internet availability of proxy materials. In the event there are not sufficient votes for a quorum or to approve NMFC's proposals at the time of the annual meeting, the annual meeting may be adjourned in order to permit further solicitation of proxies by NMFC, by order of the Board of Directors. I have here an affidavit sworn to by our proxy tabulator and duly signed stating that the notice, as previously read, was mailed to each stockholder as required by the NMFC bylaws.

The secretary has delivered an affidavit of mailing, establishing that notice of this meeting was duly given. A copy of the notice of the meeting and the affidavit of mailing will be incorporated into the minutes of this meeting. Finally, the complete alphabetical list of the stockholders of record as of March 3, 2020, who are entitled to vote, showing their respective addresses and the number of shares held by each is available at this meeting for inspection by stockholders in accordance with the bylaws and applicable law. Our first order of business at this meeting is to determine whether the shares represented at the meeting, either in person or by proxy, are sufficient to constitute a quorum for the purpose of transacting business. Ms. Jerry, do you have a report?

Yes. The stockholder list shows that holders of 96,827,342 shares of common stock of NMFC are entitled to vote as of the March 3, 2020 record date. We are informed by the representative of American Election Services, LLC that there are, represented in person or by proxy, 74,104,900 shares of common stock of NMFC or approximately 76.53% of all shares of NMFC entitled to vote at this meeting. Accordingly, a quorum is present. The Proxy Committee, which is acting as proxy and representative of the holders voting by proxy, is composed of myself, Rob Hamwee, Shiraz Kajee, John Kline and Adam Weinstein.

Thank you. On the basis of the report of the secretary and the inspector of election, I find that proper notice has been given and that a quorum is present. Accordingly, this meeting has been properly convened. The next order of business is a description of the matters to be voted on at today's meeting.

The first proposal before the stockholders of NMFC is the election of Steve Klinsky, Dan Hébert and Rome Arnold as directors of NMFC to serve until the Annual Meeting of Stockholders in 2023 or until the respective successors are duly elected and qualified. The Board of Directors of NMFC recommends the election of Messrs. Klinsky, Hébert and Arnold as directors of NMFC. Information concerning the principal occupations of Messrs. Klinsky, Hébert and Arnold and their respective service with NMFC and other matters that may be of interest are contained in the proxy statement. Is there any discussion with respect to the nominees? The second proposal before the stockholders of NMFC is the ratification of the appointment of Deloitte & Touche LLP to serve as the independent registered public accounting firm for the fiscal year ended December 31, 2020. The Board of Directors of NMFC recommends ratification of the appointment of Deloitte & Touche LLP. Is there any discussion with respect to this proposal?

Now we can proceed to the formal voting on the proposals. The polls for voting on all matters are hereby open at this time, 9:11 a.m., April 22, 2020. If you have returned your proxy, whether by Internet, phone or mail, your vote has already been recorded. If there are any stockholders present who wish to vote now, please submit your proxy now online. [Voting]

Since no stockholder nominations or proposals were properly filed with the Secretary of NMFC in advance of this meeting as provided by the bylaws, the meeting of this -- the business of this meeting is limited to the foregoing matters in accordance with the provisions of the bylaws.

On behalf of the Chairman, I will now entertain a motion to elect Messrs. Klinsky, Hébert and Arnold as directors to the Board of Directors of NMFC to serve until the Annual Meeting of Stockholders in 2023 or until their respective successors are duly elected and qualified.

I move that the following resolutions be adopted. Resolved that Steve Klinsky be and hereby is elected to the Board of Directors of NMFC to serve a 3-year term or until his successor is duly elected and qualified. Further resolved that Dan Hébert be and hereby is elected to the Board of Directors of NMFC, [ to serve a ] 3-year term or until his successor is duly elected and qualified. And further resolved that Rome Arnold be and hereby is elected to the Board of Directors of NMFC to serve a 3-year term or until his successor is duly elected and qualified.

I second the motion.

Those against? [Voting]

[indiscernible] have been made and seconded and the votes will now be taken on the elections of Steve Klinsky, Dan Hébert and Rome Arnold to serve 3-year terms as directors, which terms will expire at the Annual Meeting of Stockholders to be held in 2023 or at such time as their respective successors are elected and qualified. Inspector, please report on the votes cast to elect the nominated directors.

We have received 24,561,498 votes for and 3,598,618 votes withheld from the election of Steve Klinsky. We have received 27,198,582 votes for and 961,534 votes withheld from the election of Dan Hébert. We have received 26,387,240 votes for and 1,772,876 votes withheld from the election of Rome Arnold. This is a preliminary tabulation, and all the votes cast in person at today's meeting will be included in the final tabulation. It is not anticipated that the votes cast in person at this meeting today will change the outcome.

These motions are passed. The nominees have been duly elected to serve 3-year terms as directors, which terms will expire at the Annual Meeting of Stockholders to be held in 2023 or at such time as their respective successors are elected and qualified.

Next, I would like to entertain a motion to ratify the appointment of Deloitte & Touche LLP to serve as the independent registered public accounting firm for the fiscal year ending December 31, 2020.

I move that the following resolution be adopted. Resolved that the selection and appointment of Deloitte & Touche LLP to serve as NMFC's registered independent public accounting firm for the fiscal year ending December 31, 2020, is hereby ratified and affirmed.

I second the motion.

Those against? [Voting]

The motion has been made and seconded, and the vote will now be taken on the proposal to ratify the appointment of Deloitte & Touche LLP to serve as NMFC's independent registered public accounting firm for the fiscal year ended December 31, 2020. Inspector, please report on the votes cast on this proposal.

We have received 72,988,447 votes for; 676,109 votes, against; and 440,344 votes that abstained from the proposal to ratify the appointment of Deloitte & Touche LLP to serve as NMFC's independent registered public accounting firm for the fiscal year ending December 31, 2020. This is a preliminary tabulation, and all votes cast in person at today's meeting will be included in the final tabulation. It is not anticipated that the votes cast in person at this meeting today will change the outcome.

The motion is passed. The inspector of elections will now tabulate any outstanding ballots. If you wish to vote your proxy now, please provide the information to the inspector via the website at www.virtualshareholdermeeting.com/NMFC2020. [Voting]

We now seem to have all the ballots. And since all those desiring to vote have done so, I hereby declare the polls closed. Ms. Jerry, please safeguard, one, the notice of Annual Meeting of Stockholders and proof of mailing thereof; two, the proxies and ballots voted at this meeting, including the ballot cast for the number of shares represented by the Proxy Committee; and three, the oath and certificate and report of the inspector of election and maintain them among the records of NMFC. In addition, we will report the final voting results on our Investor Resources portion of our website in a current form -- in a current report on Form 8-K within 4 business days of this meeting. I will now entertain a motion to adjourn.

I move that the meeting be adjourned.

I second the motion.

All of those in favor, signify by saying aye; those opposed, no. [Voting]

The ayes have it. This meeting is adjourned at 9:18 a.m. Ladies and gentlemen, that concludes the formal business of this meeting. On behalf of the Board of Directors of NMFC, I thank you for your attendance today. We will now have a brief question-and-answer period.

We have not received any questions.

There being no questions at this time, I would like to thank you all for your continued support, and we look forward to speaking with you all again on our next quarterly earnings call.