Fifth Street Asset Management Inc. (NASDAQ:FSAM) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
As previously disclosed, in connection with its initial public offering, Fifth Street Asset Management Inc. (the “Company”) entered into an exchange agreement, dated as of November 4, 2014 (the “Exchange Agreement”) with the limited partners of Fifth Street Holdings L.P. (“Holdings”) that granted each limited partner of Holdings, and certain permitted transferees, the right, beginning two years after the closing of the Company’s initial public offering (November 4, 2016) and subject to vesting and minimum retained ownership requirements, on a quarterly basis, to exchange such person’s limited partnership interests in Holdings (“Partnership Units”) for shares of Class A common stock of the Company, on a one-for-one basis, subject to customary conversion rate adjustments for splits, unit distributions and reclassifications.
On September 26, 2017, the Company entered into a Cutback Agreement (the “Cutback Agreement”) with Holdings and the limited partners of Holdings party thereto (the “Limited Partners”). The Cutback Agreement modifies the terms of the Exchange Agreement such that if either the audit committee or board of directors of the Company determines that it is advisable, for tax purposes or other reasons, to limit the number of Partnership Units to be exchanged for shares of Class A common stock of the Company on the next Quarterly Exchange Date (as defined in the Exchange Agreement), the Limited Partners agree that the number of Partnership Units to be exchanged by each of them shall be reduced, pro rata, so that the total number of Partnership Units to be exchanged does not exceed the amount determined by the audit committee or board of directors of the Company, as applicable. The Cutback Agreement also grants the Company full discretion to change the date of the next Quarterly Exchange Date.
The description of the Cutback Agreement is qualified in its entirety by reference to the Cutback Agreement that is filed herewith as exhibit 10.1 and incorporated herein by reference.
Item 8.01 Other Events.
On September 29, 2017, Holdings adopted two 10b5-1 plans (each, a “Holdings 10b5-1 Plan”) in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. One Holdings 10b5-1 Plan provides for the sale in the open market by Holdings of shares of the common stock of Fifth Street Finance Corp. (“FSC Common Stock”) and the other Holdings 10b5-1 Plan provides for the sale in the open market by Holdings of shares of the common stock of Fifth Street Senior Floating Rate Corp (“FSFR Common Stock”). Sales to each Holdings 10b5-1 Plan will be aggregated with sales to a corresponding 10b5-1 plan adopted by Mr. Leonard M. Tannenbaum, the Company’s chairman and chief executive officer, providing for the sale of FSC Common Stock and FSFR Common Stock (each a “Tannenbaum 10b5-1 Plan”) and allocated pro rata between the corresponding plans. The Holdings 10b5-1 Plans provide for the sale of an aggregate amount of 437,799 shares of FSC Common Stock and 98,349 shares of FSFR Common Stock. Sales to the Holdings 10b5-1 Plans may commence on the second business day (the “Selling Start Date”) after the closing of the transactions contemplated by that certain Asset Purchase Agreement, dated as of July 13, 2017, by and among Fifth Street Management LLC, Oaktree Capital Management, L.P., the Company (solely for the purposes set forth therein) and Holdings (solely for the purposes set forth therein) and may continue through the 44th day after the Selling Start Date, unless earlier terminated.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Fifth Street Asset Management Inc. ExhibitEX-10.1 2 v476267_ex10-1.htm CUTBACK AGREEMENT Exhibit 10.1 CUTBACK AGREEMENT CUTBACK AGREEMENT (the “Agreement”),…To view the full exhibit click here
About Fifth Street Asset Management Inc. (NASDAQ:FSAM)
Fifth Street Asset Management Inc. is an alternative asset manager. The Company provides asset management services to its investment funds (the Fifth Street Funds or the funds), which consist of Fifth Street Finance Corp. (FSC) and Fifth Street Senior Floating Rate Corp. (FSFR), both publicly-traded business development companies (together, the BDCs). Its segment provides asset management services to the Fifth Street Funds. The Company conducts all of its operations through its subsidiaries, Fifth Street Management LLC (FSM), Fifth Street CLO Management LLC (CLO Management) and FSCO GP LLC (FSCO GP). The funds, managed by the Company, provide financing solutions to small and mid-sized companies across their capital structures, mainly in connection with investments by private equity sponsors. It provides credit solutions across the capital structure, including one-stop financing, unitranche debt, senior secured debt, mezzanine debt, equity co-investments and venture debt financing.
