DEF 14A of Stellus Capital Investment Corp
Filed Apr 16, 20260001104659-26-044452
Information about Directors and Executive Officers
Information about Directors and Executive Officers
Board of Directors
Board of Directors We have adopted provisions in our articles of incorporation that divide our Board into three classes. At each annual meeting, directors will be elected for staggered terms of three years (other than the initial terms, which extend for up to three years), with the term of office of only one of these three classes of directors expiring each year. Each director will hold office for the term to which he or she is elected and until his or her successor is duly elected and qualifies. The Board considered whether each of the directors is qualified to serve as a director, based on a review of the experience, qualifications, attributes and skills of each director, including those described below. The Board will also consider whether each director has significant experience in the investment or financial services industries and has held management, board or oversight positions in other companies and organizations. For the purposes of this presentation, our directors have been divided into two groups — Independent Directors and interested directors. Interested directors are “interested persons” as defined in the 1940 Act. Information regarding Mr. Bilger, who has been nominated for election as a director of the Company by the stockholders at the Annual Meeting, as well as information about our current directors, whose terms of office will continue after the Annual Meeting, is as follows:
Nominee for Class II Director
Nominee for Class II Director
Nominee for Class II Director
| Name, Address and Age(1) | Position(s) held with the Company | Principal Occupation(s) During the Past 5 Years | Term of Office and Length of Time Served(2) | Number of Companies in Fund Complex(3) Overseen by Director | Other Directorship Held by Director or Nominee for Director | | Independent Director | | | | | | | Bruce R. Bilger, 74 | Director | Retired | Director since 2012; Term expires in 2026 | 2 | Stellus Private Credit BDC |
Nominee for Class II Director
(1) The address for each of our directors is c/o Stellus Capital Investment Corporation, 4400 Post Oak Parkway, Suite 2200, Houston, Texas 77027. (2) Directors serve for three-year terms and until their successors are duly elected and qualified. (3) The term “Fund Complex” refers to (a) the Company and (b) Stellus Private Credit BDC, a BDC whose adviser, Stellus Private BDC Advisor, LLC (“SPBDC Advisor”), is a majority-owned subsidiary of our Advisor. Directors and officers who oversee the funds in the Fund Complex are noted. Bruce R. Bilger has served as a member of our Board since 2012, as well as a member of the Board of Trustees of Stellus Private Credit BDC since 2021. Mr. Bilger has over 43 years of providing advice on mergers and acquisitions, financings, and restructurings, particularly in the energy industry. Mr. Bilger retired in March 2018 from his role as a senior advisor at Lazard Freres & Co. LLC, a leading investment bank, where he began in January 2008 as managing director, chairman and head of Global Energy, and co-head of the Southwest Investment Banking region. Prior to joining Lazard Freres & Co. LLC, Mr. Bilger was a partner at the law firm of Vinson & Elkins LLP, where he was head of its 400-plus-attorney Energy Practice Group and co-head of its 175-plus-attorney corporate and transactional practice. Mr. Bilger is or has been a board or committee member with numerous charitable and civic organizations, including the Greater Houston Partnership, the Greater Houston Community Foundation, Reasoning Mind, Positive Coaching Alliance, Houston Methodist Hospital, Texas Children’s Hospital, Asia Society Texas Center, St. Luke’s United Methodist Church, St. John’s School, Dartmouth College and the University of Virginia. Mr. Bilger graduated Phi Beta Kappa from Dartmouth College and has an M.B.A. and law degree from the University of Virginia. We believe Mr. Bilger’s extensive merger and acquisition, financing, and restructuring experience bring important and valuable skills to our Board.
Incumbent Class III Director
Incumbent Class III Director
Incumbent Class III Director
| Name, Address and Age(1) | Position(s) held with the Company | Principal Occupation(s) During the Past 5 Years | Term of Office and Length of Time Served(2) | Number of Companies in Fund Complex(3) Overseen by Director | Other Directorships Held by Director or Nominee for Director | | Interested Director(4) | | | | | | | Robert T. Ladd, 69 | Chairman, Chief Executive Officer and President | Chairman of the Board, Chief Executive Officer and President of the Company; Chairman of the Board, Chief Executive Officer and President of Stellus Private Credit BDC; Managing Partner and Chief Investment Officer of SCM. | Director since 2012; Term expires in 2027 | 2 | Stellus Private Credit BDC Rice University Rice Management Company | | Independent Director | | | | | | | J. Tim Arnoult, 76 | Director | Retired | Director since 2012; Term expires in 2027 | 2 | Stellus Private Credit BDC |
Incumbent Class III Director
(1) The address for each of our directors is c/o Stellus Capital Investment Corporation, 4400 Post Oak Parkway, Suite 2200, Houston, Texas 77027. (2) Directors serve for three-year terms and until their successors are duly elected and qualified. (3) The term “Fund Complex” refers to (a) the Company and (b) Stellus Private Credit BDC, a BDC whose adviser, SPBDC Advisor, is a majority-owned subsidiary of our Advisor. Directors and officers who oversee the funds in the Fund Complex are noted. (4) “Interested person” of the Company as defined in Section 2(a)(19) of the 1940 Act. Mr. Ladd is an “interested person” because of his affiliation with the Company and our Advisor. Robert T. Ladd has served as the Chairman of our Board and Chief Executive Officer and President since 2012. Mr. Ladd has also served as Chairman of the Board of Trustees, Chief Executive Officer and President of Stellus Private Credit BDC since 2021. Mr. Ladd is the managing partner and Chief Investment Officer of Stellus Capital Management, the external investment manager of the Company. Mr. Ladd has more than 40 years of investing, finance, and restructuring experience. Prior to joining Stellus Capital Management, he had been with the D. E. Shaw group, a global investment and technology development firm, where he led the D. E. Shaw group’s Direct Capital Group from February 2004 to January 2012. Prior to joining the D. E. Shaw group, Mr. Ladd served as the president of Duke Energy North America, LLC, a merchant energy subsidiary of Duke Energy Corporation, and president and chief executive officer of Duke Capital Partners, LLC, a merchant banking subsidiary of Duke Energy Corporation, from September 2000 to February 2004. From February 1993 to September 2000, Mr. Ladd was a partner of Arthur Andersen LLP where he last served as worldwide managing partner for Arthur Andersen’s corporate restructuring practice and U.S. managing partner for that firm’s corporate finance practice. Before joining Arthur Andersen, from June 1980 to February 1993, Mr. Ladd served in various capacities for First City Bancorporation of Texas, Inc., a bank holding company, and its subsidiaries, including serving as president of First City Asset Servicing Company, an asset management business and executive vice president for the Texas Banking Division. He serves as Chairman of the Board of Trustees of Rice University and is a board member of Rice Management Company which oversees Rice University’s endowment. He is a member of the Board of Advisors of the Jesse H. Jones Graduate School of Business of Rice University, as well as a member of the University of Texas Medical School of Houston Advisory Council. Mr. Ladd received a B.A. in managerial studies and economics from Rice University, and an M.B.A. from The University of Texas at Austin, where he was a Sord Scholar and recipient of the Dean’s Award for Academic Achievement. We believe Mr. Ladd’s extensive investing, finance, and restructuring experience bring important and valuable skills to our Board. J. Tim Arnoult has served as a member of our Board since 2012, as well as a member of the Board of Trustees of Stellus Private Credit BDC since 2021. Mr. Arnoult has over 35 years of banking and financial services experience. From 1979 to 2006, Mr. Arnoult served in various positions at Bank of America, including its predecessors, including president of Global Treasury Services from 2005 – 2006, president of Global Technology and Operations from 2000 to 2005, president of Central U.S. Consumer and Commercial Banking from 1996 to 2000 and president of Global Private Banking from 1991 to 1996. Mr. Arnoult is also experienced in mergers and acquisitions, having been directly involved in significant transactions such as the mergers of NationsBank and Bank of America in 1998 and Bank of America and FleetBoston in 2004. Mr. Arnoult previously served on the board of directors of Cardtronics Inc. (NasdaqGM: CATM) and AgileCraft, LLC and has served on a variety of boards throughout his career, including the board of Visa USA before it became a public company. Mr. Arnoult holds a B.A. in Psychology and a M.B.A. from the University of Texas at Austin. We believe Mr. Arnoult’s extensive banking and financial services experience bring important and valuable skills to our Board.
Incumbent for Class I Directors
Incumbent for Class I Directors
Term Expiring 2028
Term Expiring 2028
Term Expiring 2028
| Name, Address and Age(1) | Position(s) held with the Company | Principal Occupation(s) During the Past 5 Years | Term of Office and Length of Time Served(2) | Number of Companies in Fund Complex(3) Overseen by Director | Other Directorship Held by Director or Nominee for Director | | Interested Director(4) | | | | | | | Dean D’Angelo, 58 | Director(5) | Founding partner, SCM; Co-Head of SCM’s Private Credit strategy; Member of SCM investment committee | Director since 2012; Term expires in 2028 | 2 | Stellus Private Credit BDC | | Independent Director | | | | | | | William C. Repko, 76 | Director | Retired | Director since 2012; Term expires in 2028 | 2 | Stellus Private Credit BDC |
Term Expiring 2028
(1) The address for each of our directors is c/o Stellus Capital Investment Corporation, 4400 Post Oak Parkway, Suite 2200, Houston, Texas 77027. (2) Directors serve for three-year terms and until their successors are duly elected and qualified. (3) The term “Fund Complex” refers to (a) the Company and (b) Stellus Private Credit BDC, a BDC whose adviser, SPBDC Advisor, is a majority-owned subsidiary of our Advisor. Directors and officers who oversee the funds in the Fund Complex are noted. “Interested person” of the Company as defined in Section 2(a)(19) of the 1940 Act. Mr. D’Angelo is an “interested person” because of his affiliation with our Advisor. Mr. D’Angelo intends to resign in connection with the approval of the Advisor Change in Control. For more information, see “Proposal 3: Approval of the New Investment Advisory Agreement.” Dean D’Angelo has served as a member of our Board since 2012, as well as a member of the Board of Trustees of Stellus Private Credit BDC since 2021. Mr. D’Angelo is a founding partner of Stellus Capital Management, the external investment manager of the Company, and co-head of its Private Credit strategy and serves on its investment committee. He has over 25 years of experience in investment banking and principal investing. From August 2005 to January 2012, Mr. D’Angelo was a director in the Direct Capital Group at the D. E. Shaw group, a global investment and technology development firm. Prior to joining the D. E. Shaw group, Mr. D’Angelo was a principal of Allied Capital Corporation, a publicly-traded BDC, where he focused on making debt and equity investments in middle-market companies from May 2003 to August 2005. From September 2000 to April 2003, Mr. D’Angelo served as a principal of Duke Capital Partners, LLC, a merchant banking subsidiary of Duke Energy Corporation, where he focused on providing mezzanine, equity, and senior debt financing to businesses in the energy sector. From January 1998 to September 2000, Mr. D’Angelo was a product specialist for Banc of America Securities, LLC where he provided banking services to clients principally in the energy sector. Mr. D’Angelo began his career in the bankruptcy and consulting practice of Coopers & Lybrand L.L.P. in Washington, D.C. Mr. D’Angelo received his B.B.A. in accounting from The College of William and Mary, his M.A. in international economics and relations from The Paul H. Nitze School of Advanced International Studies at The Johns Hopkins University, and his M.B.A., with a concentration in finance, from the Wharton School of the University of Pennsylvania. We believe Mr. D’Angelo’s extensive investment banking and principal investing experience bring important and valuable skills to our Board. William C. Repko has served as a member of our Board since 2012, as well as a member of the Board of Trustees of Stellus Private Credit BDC since 2021. Mr. Repko also served on the board of directors of Danaos Corporation (NYSE: DAC) from 2014 to December 2025. Mr. Repko has over 40 years of investing, finance and restructuring experience. Mr. Repko retired from Evercore Partners in February 2014, where he had served as a senior advisor, senior managing director and was a co-founder of the firm’s Restructuring and Debt Capital Markets Group since September 2005. Prior to joining Evercore Partners Inc., Mr. Repko served as chairman and head of the Restructuring Group at J.P. Morgan Chase, a leading investment banking firm, where he focused on providing comprehensive solutions to clients’ liquidity and reorganization challenges. In 1973, Mr. Repko joined Manufacturers Hanover Trust Company, a commercial bank, which after a series of mergers became part of J.P. Morgan Chase. Mr. Repko has been named to the Turnaround Management Association (TMA)-sponsored Turnaround, Restructuring and Distressed Investing industry Hall of Fame. Mr. Repko received his B.S. in Finance from Lehigh University. We believe Mr. Repko’s extensive investing, finance, and restructuring experience bring important and valuable skills to our Board.
Compensation of Directors
Compensation of Directors The following table shows information regarding the compensation received by each Independent Director of the Company and the Fund Complex for the calendar year ending December 31, 2025. No compensation is paid to directors who are “interested persons” for their service as directors.
Compensation of Directors
| Name | Aggregate Cash Compensation from Stellus Capital Investment Corporation(1) | Total Compensation from Stellus Capital Investment Corporation | Total Compensation from the Fund Complex | | Interested Directors | | | | | Robert T. Ladd | $— | $— | $— | | Dean D’Angelo | $— | $— | $— | | Independent Directors | | | | | J. Tim Arnoult | $143,000 | $143,000 | $203,000 | | Bruce R. Bilger | $133,000 | $133,000 | $183,000 | | William C. Repko | $133,000 | $133,000 | $183,000 |
Compensation of Directors
For a discussion of the Independent Directors’ compensation, see below. We do not have a profit sharing or retirement plan, and directors do not receive any pension or retirement benefits. For the year ended December 31, 2025, the Independent Directors received an annual fee of $100,000. Independent Directors also receive $3,000 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending in person or telephonically each regular Board meeting and each special telephonic Board meeting. They also receive $1,000 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with each committee meeting attended in person and each telephonic committee meeting. The chairmen of the audit committee, the compensation committee, and the nominating and corporate governance committee receive an annual fee of $15,000, $5,000, and $5,000, respectively. We have obtained directors’ and officers’ liability insurance on behalf of our directors and officers. Independent Directors have the option of having their directors’ fees paid in shares of our common stock issued at a price per share equal to the greater of net asset value per share or the market price at the time of payment.
Background
Background On February 5, 2026,the Advisor announced that it has entered into an agreement (the “Purchase Agreement”) pursuant to which Ridgepost Capital, LLC (f/k/a P10 Intermediate Holdings LLC), an affiliate of Ridgepost Capital, Inc. (“f/k/a P10, Inc.) (“Ridgepost”), will acquire all of the outstanding equity interests in Stellus Capital Management, which will result in a change in control of the Advisor (the “Advisor Change in Control”). The consummation of the Advisor Change in Control will result in an assignment and corresponding termination of the current investment advisory agreement, dated as of October 26, 2012, between the Company and the Advisor (the “Existing Investment Advisory Agreement”) in accordance with the Investment Company Act of 1940, as amended (the “1940 Act”). All employees of the Advisor, including all of the investment professionals currently managing the Company, as well as the members of the investment committee of the Advisor (the “Investment Committee”), will continue managing the Company. The Advisor expects that its investment process will remain the same following the Advisor Change in Control and will be enhanced because of the resources of Ridgepost that will be available following the Advisor Change in Control. The Existing Investment Advisory Agreement, as required by Section 15 of the 1940 Act, provides for its automatic termination in the event of its “assignment” (as defined in the 1940 Act). The consummation of the Advisor Change in Control will result in an assignment of the Existing Investment Advisory Agreement and therefore cause the automatic termination of the Existing Investment Advisory Agreement. Contingent upon stockholder approval of the New Investment Advisory Agreement and the consummation of the Advisor Change in Control, the Advisor will enter into a new investment advisory agreement with the Company in order to continue to serve as investment adviser to the Company. The consummation of the Advisor Change in Control is subject to certain terms and conditions, including, among others, the receipt of required regulatory and other approvals. If each of the terms and conditions is satisfied or waived, the parties to the Purchase Agreement anticipate that the closing of the Advisor Change in Control will occur during the middle of 2026. Ridgepost Capital, LLC, is an affiliate of Ridgepost. Ridgepost has over $43.0 billion in assets under management and over 20 years of average executive experience, providing ample capital quantum and duration in order to fund existing and new initiatives. Under the proposed structure, Ridgepost will purchase Stellus Capital Management, and Stellus Capital Management will become a direct, wholly owned subsidiary of Ridgepost. Ridgepost will also enter into certain agreements with the managing principles, including restrictive covenant agreements and new employment agreements. Management of the Advisor believes that the Advisor Change in Control will combine the benefits of the extensive experience of the Advisor’s investment professionals with the resources of Ridgepost. The Advisor expects that, following the Advisor Change in Control, the Advisor will benefit from Ridgepost’s platform by (i) seeking to leverage Ridgepost’s investor relations and business development function to assist in raising additional investable capital for the Company’s lending platform; (ii) obtaining access to lower middle market private equity firms and other Ridgepost relationships to enhance deal origination channels, strengthen sourcing capabilities, and access a broader range of investment opportunities designed to enhance the Company’s stockholder value and (iii) gaining access to broader information technology capabilities and resources and will share in efficiencies in middle and back office best practices.
Certain Considerations Under the 1940 Act
Certain Considerations Under the 1940 Act Section 15(f) of the 1940 Act (“Section 15(f)”) provides that when a sale of securities or any other interest in an investment adviser occurs, the investment adviser or any of its affiliated persons may receive any amount or benefit in connection with the sale so long as two conditions are satisfied: (1) for three years following the consummation of the transaction, at least seventy-five percent (75%) of the board of the investment company are not “interested persons” of the investment company’s investment adviser or its predecessor investment adviser, and (2) during the two years after the transaction, an “unfair burden” is not imposed on the investment company as a result of the sale of such interest. In order to ensure compliance with the Section 15(f) safe harbor provisions, Dean D’Angelo, director and “interested person” of the Advisor, has informed the Board that he intends to resign from his position as director effective upon the closing of the Advisor Change in Control. As a result, the Board is expected to meet this requirement at the time of the consummation of the Advisor Change in Control, and for the three (3)-year period thereafter. Following the closing of the Advisor Change in Control, Mr. D’Angelo is expected to continue to serve in his existing role at Stellus Capital Management.
Certain Board of Directors Considerations Regarding the Approval of the New Investment Advisory Agreement
Certain Board of Directors Considerations Regarding the Approval of the New Investment Advisory Agreement In anticipation of the Advisor Change in Control, the Independent Directors held an executive session on March 24, 2026, and the Board held a meeting on March 25, 2026, for purposes of, among other things, discussing matters relating to the Advisor Change in Control and considering whether it would be in the best interests of the Company and its stockholders to approve the New Investment Advisory Agreement. Prior to the executive session and meeting, the Independent Directors requested, received, and reviewed information from the Advisor and from Ridgepost to help them evaluate the approval of the New Investment Advisory Agreement. At the March 24, 2026 executive session, the Independent Directors consulted with independent counsel regarding the approval of the New Investment Advisory Agreement, discussed various aspects of the information received from the Advisor and from Ridgepost, and provided additional follow-up questions to the Advisor regarding the New Investment Advisory Agreement. At the March 25, 2026 meeting, the Board, including the Independent Directors, unanimously approved the New Investment Advisory Agreement on behalf of the Company, contingent upon the Advisor and the New Owner closing the Advisor Change in Control. The Board discussed matters relating to the Advisor Change in Control and set the date of the Annual Meeting and the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting. The Board, including all of the Independent Directors, unanimously recommend that stockholders of the Company vote to approve the New Investment Advisory Agreement. In reaching the conclusion that the approval of the New Investment Advisory Agreement is in the best interests of the Company’s stockholders, the Board reviewed information prepared for the Board for this purpose and considered the material terms of the Advisor Change in Control as discussed with the Advisor and, among other things: the proposed management of the Advisor following the Advisor Change in Control; the strategic plans for the Advisor’s management after the Advisor Change in Control; the operation of the Company following the Advisor Change in Control; the nature, extent and quality or level of services to be provided to the Company following the Advisor Change in Control; key personnel that are expected to service the Company, and the compensation or incentive arrangements to retain such personnel following the Advisor Change in Control; the resources that will be available to the Advisor following the Advisor Change in Control; the Company’s anticipated fees and expenses following the Advisor Change in Control; and such other factors as the Board and Independent Directors deemed relevant to their decision. In approving the New Investment Advisory Agreement, the Board, including a majority of the Independent Directors, determined as follows: Nature, Extent and Quality of Services. In evaluating the nature, quality and extent of the services expected to be provided by the Advisor under the New Investment Advisory Agreement, the Board concluded that no diminution in the nature, quality and extent of services currently provided to the Company and its stockholders is expected as a result of the Advisor Change in Control and, instead, the Board anticipates that the Company will benefit from the additional resources and investment opportunities that may result from the New Owner’s resources. The Board believes that the Advisor stands to benefit from the access to greater scale and resources that will help to provide a more complete solution to a broader cross-section of potential portfolio companies. The Board noted that the Advisor and the New Owner believe that following the Advisor Change in Control, the Advisor’s ability to source transactions for the Company across a variety of deal source channels will be enhanced, while also ensuring the continuity of management and operations. Ridgepost will also enhance the ability of the Company to attract additional highly talented investment advisory personnel and the Company will benefit from Ridgepost’s technology capabilities and innovative investment infrastructure. Further, the Board noted that Ridgepost possesses an advantage regarding access to market opportunities that could widen the Company’s access to investment opportunities. In making their determination, the Board considered, among other things: the expected impact, if any, of the Advisor Change in Control on the operations, facilities, organization and personnel of the Advisor, the ability of the Advisor to perform its duties as a result of the Advisor Change in Control, including any changes to the level or quality of services provided to the Company; and any anticipated changes to the investment and other practices of the Company. The Board noted that the terms of the New Investment Advisory Agreement, including the fees payable thereunder, are substantially the same as those of the Existing Investment Advisory Agreement. The Board considered that the services to be provided and the standard of care under the New Investment Advisory Agreement are the same as the Existing Investment Advisory Agreement. The Board noted that neither the management of the Advisor nor the New Owner anticipate any material changes to the advisory personnel that manage the Company or the services provided to the Company as a result of the Advisor Change in Control. Investment Performance. The Board reviewed the investment performance of the Company since its commencement of operations and compared the performance of the Company with the performance of comparable BDCs. The Board determined that the Advisor was delivering results consistent with the investment objective of the Company and that the Company’s investment performance was acceptable, relative to comparable BDCs. The Board considered that following the completion of the Advisor Change in Control, all the portfolio investment personnel responsible for the management of the Company’s portfolio were expected to continue to manage the portfolio and the investment strategies of the Company were not expected to materially change as a result of the Advisor Change in Control. Further, the Board considered the Advisor’s view that the Company may have additional investment opportunities due to its relationship with Ridgepost after the Advisor Change in Control is complete. Accordingly, in light of such findings and the performance history of the Company, the Board determined that the investment performance of the Company was likely to remain consistent or potentially improve over time with the approval of the New Investment Advisory Agreement. Costs of the Services Provided to the Company. As noted above, the terms of the New Investment Advisory Agreement are substantially the same as those of the Existing Investment Advisory Agreement, including with respect to fee structure. Based on its review of the information provided to it, the Board determined that the management fees and expenses under the New Investment Advisory Agreement were reasonable and in the best interests of the Company. Economies of Scale.
Certain Board of Directors Considerations Regarding the Approval of the New Investment Advisory Agreement
The Board considered information about the potential for the Company’s stockholders to experience economies of scale as the Company grows in size and considered that the investment objectives and strategies of the Company were not expected to materially change as a result of the Advisor Change in Control. Accordingly, the Board concluded that although the Advisor Change in Control could lead to economies of scale in the future, it would likely not result in immediate economies of scale previously unavailable to the Company. Therefore, potential economies of scale related to the management of the Company’s portfolio were determined not to be a significant consideration for the Board in approving the New Investment Advisory Agreement, and the Board determined that the advisory fee structure with respect to the New Investment Advisory Agreement as proposed was reasonable and that no changes were currently necessary to reflect economies of scale. The Board noted that it would have the opportunity to receive updates in the future regarding any economies of scale realized by the Advisor in connection with its management of the Company. The Board further noted that some economies of scale related to allocated administrative costs might occur as a result of the Advisor Change in Control. Profitability of the Advisor. The Board recognized that it is difficult to predict the Advisor’s profitability after the Advisor Change in Control. However, given that the fee structure, services and costs of personnel under the New Investment Advisory Agreement are substantially the same as that under the Existing Investment Advisory Agreement, the Board determined that, based on information available to the Board related to the Existing Investment Advisory Agreement, the Advisor’s profitability with respect to managing the Company should not be unreasonable in relation to the nature, extent and quality of the services to be provided. Limited Potential for Additional “Fall Out” Benefits Derived by the Advisor. The Board noted that the considerations regarding the potential for the Advisor and its affiliates to derive additional “fall out” benefits, such as soft dollar arrangements with brokers, as a result of the Advisor Change in Control were not expected to materially change from those considerations applicable to the Advisor prior to the Advisor Change in Control. Accordingly, the findings that there was limited potential for the Advisor and its affiliates to derive additional “fall out” benefits, such as soft dollar arrangements with brokers, as a result of the Advisor Change in Control, was not expected to change as a result of the New Investment Advisory Agreement. The Board concluded that, in connection with its evaluation of the New Investment Advisory Agreement, it is not practical to quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its decision. The Board did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate determination of the Board. Rather, the Board based its approval on the totality of information presented to, and the investigation conducted by, it. In considering the factors discussed above, individual directors may have given different weights to different factors. The Board then directed that the New Investment Advisory Agreement be submitted to stockholders for approval with the Board’s recommendation that stockholders of the Company approve the New Investment Advisory Agreement. The Board, including all of the Independent Directors, unanimously recommend that stockholders of the Company vote FOR the New Investment Advisory Agreement.