Garrison Capital Inc. (NASDAQ:GARS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
At the annual meeting of stockholders (the Annual Meeting) held
on May 3, 2017, the stockholders of Garrison Capital Inc.(the
Company) approved a fourth amended and restated investment
advisory agreement (the Fourth Amended and Restated Investment
Advisory Agreement) by and between the Company and Garrison
Capital Advisers LLC (the Adviser), as investment adviser. The
Company and the Adviser subsequently signed the Fourth Amended
and Restated Investment Advisory Agreement.
The Fourth Amended and Restated Investment Advisory Agreement,
which is effective beginning as of May 3, 2017, (i) reduced the
base management fee from an annual rate of 1.75% to an annual
rate of 1.50% of the Companys gross assets, excluding cash and
cash equivalents but including assets purchased with borrowed
funds, payable quarterly in arrears and (ii) reduced the hurdle
rate (the Hurdle Rate) for the income component of the incentive
fee from 2.00% per quarter (8.00% annualized) to 1.75% per
quarter (7.00% annualized). Under the Fourth Amended and Restated
Investment Advisory Agreement, the first component of the
incentive fee for each quarter would be calculated as follows:
|
no incentive fee will be payable to the Adviser in any calendar quarter in which the Companys Pre-Incentive Fee Net Investment Income does not exceed the Hurdle Rate of 1.75%; |
|
100% of the Companys Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Rate but is less than 2.1875% in any calendar quarter (8.75% annualized) is payable to the Adviser. We refer to this portion of the Companys Pre-Incentive Fee Net Investment Income (which exceeds the Hurdle Rate but is less than 2.1875%) as the catch-up. The effect of the catch-up provision is that, if such Pre-Incentive Fee Net Investment Income exceeds 2.1875% in any calendar quarter, the Adviser will receive 20% of such Pre-Incentive Fee Net Investment Income as if the Hurdle Rate did not apply; and |
|
20% of the amount of such Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.1875% in any calendar quarter (8.75% annualized) is payable to the Adviser (once the Hurdle Rate is reached and the catch-up is achieved). |
The other commercial terms of the Companys existing investment
advisory relationship with the Adviser, including the capital
gains incentive fee and the incentive fee cap and deferral
mechanism, remain unchanged.
The foregoing description does not purport to be complete and is
qualified in its entirety by reference to the Fourth Amended and
Restated Investment Advisory Agreement, attached hereto as
Exhibit 10.1 and incorporated by reference herein.
Item2.02. Results of Operations and Financial
Condition.
On May 9, 2017, the Company issued a press release announcing its
financial results for the first fiscal quarter ended March 31,
2017.A copy of this press release is attached hereto as Exhibit
99.1.
The information in Item 2.02 of this Current Report on Form 8-K,
including Exhibit 99.1 furnished herewith, is being furnished and
shall not be deemed filed for any purpose of Section 18 of the
Securities Exchange Act of 1934, as amended (the Exchange Act),
or otherwise subject to the liabilities of such Section.The
information in this Current Report on Form 8-K shall not be
deemed to be incorporated by reference into any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except
as shall be expressly set forth by specific reference in such
filing.
Forward-Looking Statements
This Current Report on Form 8-K, including Exhibit 99.1 furnished
herewith, may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Statements other than statements of historical facts included in
this Current Report on Form 8-K may constitute forward-looking
statements and are not guarantees of future performance or
results and involve a number of risks and uncertainties. Actual
results may differ materially from those in the forward-looking
statements as a result of a number of factors, including those
described from time to time in filings with the Securities and
Exchange Commission. The Company undertakes no duty to update any
forward-looking statement made herein. All forward-looking
statements speak only as of the date of this Current Report on
Form 8-K.
Item5.07. Submission of Matters to a Vote of Security
Holders.
On May 3, 2017, the Companys stockholders approved two proposals
at the Annual Meeting. The issued and outstanding shares of stock
of the Company entitled to vote at the Annual Meeting consisted
of 16,049,352 shares of common stock outstanding on the record
date, March 8, 2017. The final voting results from the Annual
Meeting were as follows:
Proposal 1. To elect Matthew Westwood as a Class II director of
the Company who will serve until the 2020 annual meeting of
stockholders or until his successor is duly elected and
qualifies.
| Votes For | Votes Against | Abstentions |
| 9,242,806 | 61,622 | 21,569 |
Proposal 2. To approve the Fourth Amended and Restated Investment
Advisory Agreement.
| Votes For | Votes Against | Abstentions |
| 9,212,838 | 94,929 | 18,230 |
Item9.01. Financial Statements and Exhibits.
(d) Exhibits.
| 10.1 |
Fourth Amended and Restated Investment Advisory Agreement dated as of May 3, 2017, by and between the Company and Garrison Capital Advisers LLC. |
| 99.1 |
Press release of Garrison Capital Inc., dated as of May 9, 2017. |
About Garrison Capital Inc. (NASDAQ:GARS)
Garrison Capital Inc. is a managed, closed-end, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation by making investments primarily in debt securities and loans of the United States-based middle-market companies, which it defines as those having annual earnings before interest, taxes and depreciation, or EBITDA, of certain amount. It invests or provides direct lending in first lien senior secured loans, second lien senior secured loans, one-stop senior secured loans or unitranche loans, subordinated or mezzanine loans, unsecured consumer loans and to a lesser extent, selected equity co-investments in middle-market companies. The Company intends to generate risk-adjusted net returns by assembling a portfolio of investments. The Company’s investment advisor is Garrison Capital Advisers LLC. Garrison Capital Inc. (NASDAQ:GARS) Recent Trading Information
Garrison Capital Inc. (NASDAQ:GARS) closed its last trading session 00.00 at 9.76 with 29,572 shares trading hands.
