PennantPark Investment DEF 14A 2008
Information Required in Proxy Statement
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant x
Filed by a Party other than the Registrant ¨
Check the appropriate box:
PennantPark Investment Corporation
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
590 Madison Avenue, 15th Floor
New York, New York 10022
December 22, 2008
You are cordially invited to attend the 2009 Annual Meeting of Stockholders of PennantPark Investment Corporation (the Company) to be held on February 3, 2009 at 9:30 a.m., Eastern Time, at the Omni Berkshire Place, located at 21 East 52nd Street at Madison Avenue, New York, New York 10022.
The Notice of Annual Meeting of Stockholders and the proxy statement of the Board of Directors of the Company, which is accessible on the Internet or by request, provide an outline of the business to be conducted at our Annual Meeting of stockholders. At the Meeting, you will be asked to elect two directors of the Company and to ratify the selection of KPMG LLP as the Companys independent registered public accounting firm for the fiscal year ending September 30, 2009. I will also report on the progress of the Company during the past year and respond to stockholders questions.
It is important that your shares be represented at the annual meeting. If you are unable to attend the Meeting in person, I urge you to follow the instructions on the Notice of Internet Availability of Proxy Materials to vote your proxy on the Internet. We encourage you to vote via the Internet, as it saves us significant time and processing costs. However, on the Notice of Internet Availability of Proxy Materials you also will find instructions on how to request a hard copy of the proxy statement and proxy card free of charge, and you may vote your proxy by returning a proxy card to us after you request the hard copy materials. Your vote and participation in the governance of the Company is very important to us.
Arthur H. Penn
Chief Executive Officer
PENNANTPARK INVESTMENT CORPORATION
590 Madison Avenue, 15th Floor
New York, New York 10022
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 3, 2009
Notice is hereby given to the owners of shares of common stock (the Stockholders) of PennantPark Investment Corporation (the Company) that:
The 2009 Annual Meeting of Stockholders of the Company will be held at the Omni Berkshire Place, located at 21 East 52nd Street at Madison Avenue, New York, New York, on February 3, 2009 at 9:30 a.m., Eastern Time, for the following purposes:
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 December 15, 2008. Under rules adopted by the U.S. Securities and Exchange Commission (SEC), we are now furnishing proxy materials to our shareholders on the Internet, rather than mailing printed copies of those materials to each shareholder. If you received a Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials 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 materials, and vote your proxy, on the Internet.
Your vote is extremely important to us. If you are unable to attend the Annual Meeting of stockholders, 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 a proxy card by following the instructions on the Notice of Availability of Proxy Materials. In the event there are not sufficient votes for a quorum or to approve the proposals at the time of the Annual Meeting, the Annual Meeting may be adjourned in order to permit further solicitation of proxies by the Company.
THE BOARD OF DIRECTORS, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS.
By Order of the Board of Directors,
New York, New York
December 22, 2008
PENNANTPARK INVESTMENT CORPORATION
590 Madison Avenue, 15th Floor
New York, New York 10022
2009 Annual Meeting of Stockholders
To Be Held on February 3, 2009
This document will give you the information you need to vote on the matters listed on the accompanying Notice of Annual Meeting of Stockholders (Notice of Annual Meeting). Much of the information in this Proxy Statement is required under rules of the Securities and Exchange Commission (SEC); some of it is technical in nature. If there is anything you do not understand, please contact us at 212-905-1000.
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors (the Board) of PennantPark Investment Corporation (the Company, we, us or our) for use at our 2009 Annual Meeting of Stockholders (the Meeting) to be held on Tuesday, February 3, 2009 at 9:30 a.m., Eastern Time, at the Omni Berkshire Place, located at 21 East 52nd Street at Madison Avenue, New York, New York and at any postponements or adjournments thereof. This Proxy Statement and the Companys Annual Report for the fiscal year ended September 30, 2008, are being provided to stockholders via the Internet on or about December 15, 2008. In addition, a Notice of Annual Meeting and a Notice of Internet Availability of Proxy Materials are being sent to stockholders of record as of December 15, 2008.
We encourage you to vote your shares, either by voting in person at the Meeting or by voting by proxy (i.e., authorizing someone to vote your shares). Shares represented by duly executed proxies will be voted in accordance with your instructions. If you execute a proxy without specifying your voting instructions, your shares will be voted in accordance with the Boards recommendation. If any other business is brought before the Meeting, your shares will be voted at the Boards discretion unless you specifically state otherwise on your proxy.
You may revoke a proxy at any time before it is exercised by notifying the Companys Secretary in writing, by submitting a properly executed, later-dated proxy, or by voting in person at the Meeting. Any stockholder entitled to vote at the Meeting may attend the Meeting and vote in person whether or not he or she has previously voted his or her shares via proxy or wishes to change a previous vote.
You will be eligible to vote your shares electronically via the Internet, telephone or by mail.
Purpose of Meeting
At the Meeting, you will be asked to vote on the following proposals:
You may vote your shares at the Meeting only if you were a stockholder of record at the close of business on December 15, 2008 (the Record Date). There were 21,068,772 shares of the Companys common stock outstanding on the Record Date. Each share of the common stock is entitled to one vote.
A quorum must be present at the Meeting for any business to be conducted. The presence at the Meeting, in person or by proxy, of the holders of a majority of the shares of stock outstanding on the Record Date will constitute a quorum. Shares held by a broker or other nominee for which the nominee has not received voting instructions from the record holder and does not have discretionary authority to vote the shares on non-routine proposals (which are considered broker non-votes with respect to such proposals), will be treated as shares present for quorum purposes. If there are not enough votes for a quorum, the chairman of the Meeting will adjourn the Meeting to permit the further solicitation of proxies.
Election of Directors. The election of a director requires the vote of a majority of the shares of stock outstanding. Stockholders may not cumulate their votes. If you vote Withhold Authority with respect to a nominee, your shares will not be voted with respect to the person indicated. Because directors are elected by a majority of the votes of the outstanding common shares of the company, votes to withhold authority will have the effect of a vote against the nominee.
Broker Non-votes. If you beneficially own your shares and you do not provide your broker or nominee with proxy instructions, either by voting in accordance with the instructions on the Notice of Internet Availability of Proxy Materials, by requesting hard copy proxy materials from us and returning a proxy card or by other arrangement with your broker or nominee, your broker or nominee will not be able to vote your shares for you on certain non-routine matters that come before the Annual Meeting. Such broker non-votes will, however, count toward a quorum.
Ratification of Independent Registered Public Accounting Firm. The affirmative vote of a majority of the votes cast at the Meeting in person or by proxy is required to ratify the appointment of KPMG LLP to serve as the Companys independent registered public accounting firm. Abstentions and broker non-votes will not be included in determining the number of votes cast and, as a result, will have no effect on this proposal.
Additional Solicitation. If there appears not to be enough votes to approve the proposals at the Meeting, the stockholders who are represented in person or by proxy may vote to adjourn the Meeting to permit the further solicitation of proxies. Mr. Marshall Brozost and Mr. Samuel L. Katz are the persons named as proxies and will vote proxies held by them for such adjournment, unless marked to be voted against any proposal for which an adjournment is sought, to permit the further solicitation of proxies.
A stockholder vote may be taken on one of the proposals in this Proxy Statement prior to any such adjournment if there are sufficient votes for approval of such proposal.
Information Regarding This Solicitation
The Company will bear the expense of the solicitation of proxies for the Meeting, including the cost of preparing and posting this Proxy Statement and the Annual Report to the Internet and the cost of mailing the Notice of Annual Meeting of Stockholders, the Notice of Internet Availability of Proxy Materials and any requested proxy materials to stockholders. The Company intends to use the services of Broadridge Financial Solutions, Inc., a leading provider of investor communications solutions, to aid in the distribution and collection of proxy votes. The Company expects to pay market rates for such services. If brokers, trustees, or fiduciaries and other institutions holding shares in their own names or in the names of their nominees, which shares are beneficially owned by others, forward the proxy materials to, and obtain proxies from, such beneficial owners, we will reimburse such persons for their reasonable expenses in so doing.
In addition to the solicitation of proxies by the use of the Internet, proxies may be solicited in person and/or by telephone, mail or facsimile transmission by directors or officers of the Company, officers or employees of PennantPark Investment Advisers, LLC, the Companys investment adviser and/or by a retained solicitor. No additional compensation will be paid to directors, officers or regular employees for such services.
Stockholders may provide their voting instructions by telephone, through the Internet or by mail by following the instructions on the Notice of Availability of Proxy Materials. These options require stockholders to input the Control Number, which is provided with the Notice of Availability of Proxy Materials, after visiting www.proxyvote.com. Upon inputting this number, stockholders will be prompted to provide their voting instructions. Stockholders will have an opportunity to review their voting instructions and make any necessary changes before submitting their voting instructions and terminating their Internet link. Stockholders who vote via the Internet, in addition to confirming their voting instructions prior to submission, will also receive an e-mail confirming their instructions upon request.
If a stockholder wishes to participate in the Meeting, but does not wish to give a proxy by Internet, the stockholder may attend the Meeting in person or request and submit a proxy card by following the instructions on the Notice of Availability of Internet Proxy Materials.
Any proxy authorized pursuant to this solicitation may be revoked by notice from the person giving the proxy at any time before it is exercised. A revocation may be effected by resubmitting voting instructions via the Internet voting site, by attending the Meeting or by a notice, provided in writing and signed by the stockholder, delivered to the Companys Secretary on any business day before the date of the Meeting.
Security Ownership of Certain Beneficial Owners and Management
As of the Record Date, to our knowledge, no person would be deemed to control us, as such term is defined in the Investment Company Act of 1940, as amended (the 1940 Act).
Our directors consist of an interested director and independent directors. An interested director is an interested person of the Company, as defined in the 1940 Act.
The following table sets forth, as of October 31, 2008, certain ownership information with respect to our common stock for those persons who directly or indirectly own, control or hold with the power to vote, 5 percent or more of our outstanding common stock and all officers and directors, as a group.
Dollar Range of Securities Beneficially Owned by Directors
The following table sets forth the dollar range of our equity securities beneficially owned by each of our directors as of October 31, 2008. Information as to the beneficial ownerships based on information furnished to the company by such persons. We are not part of a family of investment companies, as that term is defined in the 1940 Act.
PROPOSAL I: ELECTION OF DIRECTORS
In accordance with the bylaws, the Company currently has five members of the Board of Directors. Directors are divided into three classes and are elected for staggered terms of three years each, with a term of office of one of the three classes of directors expiring each year. The terms of Class I, II and III expired or will expire in 2011, 2009 and 2010, respectively. Each director will hold office for the term to which he or she is elected or until his or her successor is duly elected and qualifies.
A stockholder can vote for, or withhold his or her vote from, any nominee. In the absence of instructions to the contrary, it is the intention of the persons named as proxies to vote such proxy FOR the election of the nominees named below. If a nominee should decline or be unable to serve as a director, it is intended that the proxy will be voted for the election of such person as is nominated by the Board as a replacement. The Board has no reason to believe that any of the persons named below will be unable or unwilling to serve.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE NOMINEES NAMED IN THIS PROXY STATEMENT.
Information about the Nominees and Directors
Certain information with respect to the Class II nominees for election at the Meeting, as well as each of the other directors, is set forth below, including their names, ages, a brief description of their recent business experience, including present occupations and employment, certain directorships that each person holds, and the year in which each person became a director of the Company. Both of the nominees for Class II directors currently serve as directors of the Company.
Mr. Adam K. Bernstein and Mr. Jeffrey Flug have each been nominated for election as independent directors for a three year term expiring in 2012. Neither Mr. Bernstein nor Mr. Flug is being proposed for election pursuant to any agreement or understanding between either Mr. Bernstein nor Mr. Flug and the Company.
Nominees for Class II Directors
CONTINUING DIRECTORS (not up for election at the Meeting)
Class I Directors
Class III Director
We believe that maintaining the highest standards of corporate governance is a crucial part of our business, and the Company is committed to ensuring that it has in place the necessary controls and procedures to ensure compliance with applicable laws, rules and regulations, as well as our own ethical standards of conduct.
NASDAQ rules require listed companies to have a board of directors with at least a majority of independent directors. Under NASDAQ rules, in order for a director to be deemed independent, our Board must determine that the individual does not have a relationship that would interfere with the directors exercise of independent judgment in carrying out his or her responsibilities. On an annual basis, each member of our Board is required to complete an independence questionnaire designed to provide information to assist the Board in determining whether the director is independent under NASDAQ rules and our corporate governance guidelines. Our Board has determined that each of our directors, other than Mr. Penn, is independent under the listing standards of the NASDAQ Global Select Market. The Board limits membership on the Audit Committee and the Nominating and Corporate Governance Committee to independent directors.
Committees of the Board of Directors
Our Board of Directors has established an Audit Committee and a Nominating and Corporate Governance Committee. For the fiscal year ended September 30, 2008, the Board of Directors of the Company held six board meetings, four Audit Committee meetings and one Nominating and Corporate Governance Committee meeting. All directors attended at least 75% of the aggregate number of meetings of the Board and of the respective Committees on which they served. The Company requires each director to make a diligent effort to attend all Board and Committee meetings, and encourages directors to attend the Annual Meeting of stockholders.
The members of the Audit Committee are Messrs. Bernstein, Brozost, Flug and Katz, each of whom is independent for purposes of the 1940 Act and The Nasdaq Global Market corporate governance regulations. Mr. Flug serves as chairman of the audit committee. The Audit Committee operates pursuant to an Audit Committee Charter approved by the Board of Directors. The charter sets forth the responsibilities of the Audit Committee, which include selecting or retaining each year an independent registered public accounting firm (the auditors) to audit the accounts and records of the Company; reviewing and discussing with management and the auditors the annual audited financial statements of the Company, including disclosures made in managements discussion and analysis, and recommending to the Board of Directors whether the audited financial statements should be included in the Companys annual report on Form 10-K; reviewing and discussing with management and the auditors the Companys quarterly financial statements prior to the filings of its quarterly reports on Form 10-Q; pre-approving the auditors engagement to render audit and/or permissible non-audit services; and evaluating the qualifications, performance and independence of the auditors. The Audit Committee is also responsible for aiding our Board of Directors in fair value pricing of debt and equity securities that are not publicly traded or for which current market values are not readily available. The Board of Directors and Audit Committee use the services of nationally recognized independent valuation firms to help them determine the fair value of these securities. The Companys Board of Directors has determined that Mr. Flug is our Audit Committee financial expert as that term is defined under Item 401 of Regulation S-K under the Securities Exchange Act of 1934, as amended (the Exchange Act). The Audit Committee Charter is available on the Companys website (http://www.pennantpark.com).
Nominating and Corporate Governance Committee
The members of the Nominating and Corporate Governance Committee are Messrs. Bernstein, Brozost, Flug and Katz, each of whom is independent for purposes of the 1940 Act and the corporate governance regulations of The Nasdaq Global Market. Messrs. Bernstein and Brozost serve as co-chairmen of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee is responsible for selecting, researching and nominating directors for election by our stockholders, selecting nominees to fill vacancies on the Board or a committee of the Board, developing and recommending to the Board a set of corporate governance principles and overseeing the evaluation of the Board and our management. The Nominating and Corporate Governance Committee has adopted a written Nominating and Corporate Governance Committee Charter that is available on the Companys website (http://www.pennantpark.com).
The Nominating and Corporate Governance Committee will consider stockholder recommendations for possible nominees for election as directors when such recommendations are submitted in accordance with the Companys bylaws, the Nominating and Corporate Governance Committee Charter and any applicable law, rule or regulation regarding director nominations. Nominations should be sent to Thomas Friedmann, Secretary, c/o PennantPark Investment Corporation, 590 Madison Avenue, 15th Floor, New York, New York 10022. When submitting a nomination to the Company for consideration, a stockholder must provide all information that would be required under applicable SEC rules to be disclosed in connection with election of a director, including the following minimum information for each director nominee: full name, age and address; principal occupation during the past five years; current directorships on publicly held companies and investment companies; number of shares of the Companys common stock owned, if any; and, a written consent of the individual to stand for election if nominated by the Board of Directors and to serve if elected by the stockholders.
Criteria considered by the Nominating and Corporate Governance Committee in evaluating the qualifications of individuals for election as members of the Board of Directors include compliance with the independence and other applicable requirements of the NASDAQ Listing Standards and the 1940 Act, and all other applicable laws, rules, regulations and listing standards, the criteria, policies and principles set forth in the Nominating and Corporate Governance Committee Charter, and the ability to contribute to the effective management of the Company, taking into account the needs of the Company and such factors as the individuals experience, perspective, skills and knowledge of the industry in which the Company operates. The Nominating and Corporate Governance Committee also may consider such other factors as it may deem are in the best interests of the Company and its stockholders. The Board of Directors also believes it is appropriate for a key member of the Companys management to participate as a member of the Board of Directors.
We do not have a compensation committee because our executive officers do not receive compensation from us.
Communication with the Board of Directors
Stockholders with questions about the Company are encouraged to contact PennantPark Investment Corporations Investor Relations Department. However, if stockholders believe that their questions have not been addressed, they may communicate with the Companys Board of Directors by sending their communications to Thomas Friedmann, Secretary, c/o PennantPark Investment Corporation, 590 Madison Avenue, 15th Floor, New York, New York 10022. All stockholder communications received in this manner will be delivered to one or more members of the Board of Directors.
Information about Executive Officers Who Are Not Directors
The following information, as of the Record Date, pertains to our executive officers who are not directors of the Company.
Code of Conduct and Code of Ethics
We expect each of our officers and directors, as well as any person affiliated with our operations, to act in accordance with the highest standards of personal and professional integrity at all times, and to comply with the Companys policies and procedures and all laws, rules and regulations of any applicable international, federal, provincial, state or local government. To this effect, the Company has adopted a Code of Conduct , which is posted on the Companys website at http://www.pennantpark.com. The Code of Conduct applies to the Companys executive officers, directors and staff.
As required by the 1940 Act, we maintain a Joint Code of Ethics with PennantPark Investment Advisers, LLC that establishes procedures that apply to our Chief Executive Officer and our Chief Financial Officer and the employees of PennantPark Investment Advisers, LLC with respect to their personal investments and investment transactions. Our Joint Code of Ethics generally does not permit investments by our directors, officers or any other covered person in securities that may be purchased or held by us. We filed our Joint Code of Ethics as Exhibit 14.1 to our Annual Report on Form 10-K, filed with the SEC on November 20, 2008, and you may access it via the Internet site of the SEC at http://www.sec.gov or our website at http://www.pennantpark.com. We intend to disclose any amendments to or waivers of required provisions of our Code of Conduct or the Joint Code of Ethics on Form 8-K.
Compensation of Directors and Executive Officers
The following table shows information regarding the compensation paid by us to our directors for the fiscal year ended September 30, 2008. No compensation is paid by us to any interested director or executive officer.
Compensation of Directors
Independent directors each receives an annual fee of $75,000. The independent directors also receive $2,500 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each board meeting and receive $1,000 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each committee meeting (unless combined with a board meeting). In addition, the Chairman of the Audit Committee receives an annual fee of $7,500 and each chairman/co-chairman of any other committee receives an annual fee of $2,500 for their additional services in these capacities. Also, we have purchased directors and officers liability insurance on behalf of our directors and officers. Independent directors have the option to receive their directors fees paid in shares of our common stock issued at a price per share equal to the greater of net asset value or the market price at the time of payment. No compensation is expected to be paid to directors who are interested persons.
Audit Committee Report(1)
The following is the report of the Audit Committee with respect to the Companys audited financial statements for the fiscal year ended September 30, 2008.
The Audit Committee has reviewed and discussed the Companys audited financial statements with management and KPMG LLP (KPMG), the Companys independent registered public accounting firm, with and without management present. The Audit Committee included in its review results of KPMGs examinations, the Companys internal controls, and the quality of the Companys financial reporting. The Audit Committee also reviewed the Companys procedures and internal control processes designed to ensure full, fair and adequate financial reporting and disclosures, including procedures for certifications by the Companys chief executive officer and chief financial officer that are required in periodic reports filed by the Company with the SEC. The Audit Committee is satisfied that the Companys internal control system is adequate and that the Company employs appropriate accounting and auditing procedures.
The Audit Committee also has discussed with KPMG matters relating to KPMGs judgments about the quality, as well as the acceptability, of the Companys accounting principles as applied in its financial reporting as required by Statement of Auditing Standards No. 114 (Auditors Communication With Those Charged With Governance). In addition, the Audit Committee has discussed with KPMG their independence from management and the Company, as well as the matters in the written disclosures received from KPMG and required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees). The Audit Committee received a letter from KPMG confirming their independence and discussed it with them. The Audit Committee discussed and reviewed with KPMG the Companys critical accounting policies and practices, internal controls, other material written communications to management, and the scope of KPMGs audits and all fees paid to KPMG during the fiscal year. The Audit Committee adopted guidelines requiring review and pre-approval by the Audit Committee of audit and non-audit services performed by KPMG for the Company. The Audit Committee has reviewed and considered the compatibility of KPMGs performance of non-audit services with the maintenance of KPMGs independence as the Companys independent registered public accounting firm.
Based on the Audit Committees review and discussions referred to above, the Audit Committee recommended to the Board of Directors (and the Board has approved) that the Companys audited financial statements be included in the Companys Annual Report on Form 10-K for the fiscal year ended September 30, 2008 for filing with the SEC. In addition, the Audit Committee has engaged KPMG to serve as the Companys independent registered public accounting firm for the fiscal year ending September 30, 2009, and has directed that the selection of KPMG should be submitted to the Companys stockholders for ratification.
November 20, 2008
The Audit Committee
Jeffrey Flug, Chair
Adam K. Bernstein
Samuel L. Katz
Certain Relationships and Related Party Transactions
Transactions with Affiliated Persons
Our investment activities are managed by PennantPark Investment Advisers, LLC (the Investment Adviser or PennantPark Investment Advisers) and supervised by our Board, a majority of whose directors are independent of our Investment Adviser and us. We have entered into an investment advisory and management agreement (the Investment Management Agreement) with PennantPark Investment Advisers. Under our Investment Management Agreement, we have agreed to pay our Investment Adviser an annual management fee based on our adjusted gross assets as well as an incentive fee based on our investment performance. Arthur H. Penn, our Chief Executive Officer, is the Managing Member of PennantPark Investment Advisers.
We have also entered into an administration agreement (the Administration Agreement) with PennantPark Investment Administration, LLC (the Administrator or PennantPark Investment Administration). Under the Administration Agreement, we have agreed to reimburse the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our chief compliance officer, chief financial officer and their respective staffs. Aviv Efrat, our Chief Financial Officer, is the Managing Director of PennantPark Investment Administration.
PennantPark Investment Advisers has agreed to grant us a non-exclusive, royalty-free license to use the name PennantPark.
In addition, pursuant to the terms of the Administration Agreement, PennantPark Investment Administration provides us with the office facilities and administrative services necessary to conduct our day-to-day operations. PennantPark Investment Advisers is the sole member of and controls PennantPark Investment Administration.
The Audit Committee, in consultation with the Companys Chief Executive Officer, Chief Compliance Officer, and legal counsel, has established a written policy to govern the review of potential related party transactions. The Audit committee conducts quarterly reviews of any potential related party transactions and during these reviews, it also considers any conflicts of interest brought to its attention pursuant to the Companys Code of Conduct or Joint Code of Ethics.
Section 16(a) Beneficial Ownership Reporting Compliance
Pursuant to Section 16(a) of the Exchange Act, the Companys directors and executive officers, and any persons holding more than 10% of its common stock, are required to report their beneficial ownership and any changes therein to the SEC and the Company. Specific due dates for those reports have been established, and the Company is required to report herein any failure to file such reports by those due dates. Based on the Companys review of Forms 3, 4 and 5 filed by such persons and information provided by the Companys directors and officers, the Company believes that during the fiscal year ended September 30, 2008, all Section 16(a) filing requirements applicable to such persons were met in a timely manner with one exception. UBS Global Asset Management (Americas), Inc. has not timely filed Form 3 or Form 5 with respect to its acquisition of more than 10% of our stock on September 30, 2007.
PROPOSAL II: RATIFICATION OF
SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP (KPMG) has been selected as the independent registered public accounting firm to audit the financial statements of the Company at and during the Companys fiscal year ending September 30, 2009. KPMG was selected by the Audit Committee of the Company and that selection was ratified by a majority of the Companys Board, including all of the independent directors, by a vote cast in person. The Company does not know of any direct or indirect financial interest of KPMG in the Company. Representative(s) of KPMG will attend the Annual Meeting and will have the opportunity to make a statement if they desire to do so and will be available to answer questions.
Audit Fees: Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by KPMG in connection with statutory and regulatory filings. Fees billed during the fiscal years ending September 30, 2008 and September 30, 2007 to the Company were $357,269 and $175,000, respectively.
Audit-Related Fees: Audit-related services consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under Audit Fees. These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. Fees billed during the fiscal years ending September 30, 2008 and September 30, 2007 to the Company were zero and $50,000, respectively.
Tax Fees: Tax fees consist of fees billed for professional services for tax compliance. These services include assistance regarding federal, state, and local tax compliance. Tax fees billed to the Company during the fiscal years ending September 30, 2008 and September 30, 2007 were $111,000 and $89,000, respectively, which represented work related to our regulated investment company qualification and excise tax distribution requirements.
All Other Fees: Other fees would include fees billed for products and services other than the services reported above. Fees billed during fiscal years ending September 30, 2008 and September 30, 2007, were $41,338 and zero, respectively.
The Audit Committee has established a pre-approval policy that describes the permitted audit, audit-related, tax and other services to be provided by KPMG, the Companys independent auditor. The policy requires that the Audit Committee pre-approve the audit and non-audit services performed by the independent auditor in order to assure that the provision of such service does not impair the auditors independence.
Any requests for audit, audit-related, tax and other services that have not received general pre-approval must be submitted to the Audit Committee for specific pre-approval, and cannot commence until such approval has been granted. Normally, pre-approval is provided at regularly scheduled meetings of the Audit Committee. However, the Audit Committee may delegate pre-approval authority to one or more of its members. The member or members to whom such authority is delegated shall report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Audit Committee does not delegate its responsibilities to pre-approve services performed by the independent auditor to management.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO THE COMPANY FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2009.
The Board of Directors knows of no other business to be presented for action at the Meeting. If any matters do come before the Meeting on which action can properly be taken, it is intended that the proxies shall vote in accordance with their judgment.
SUBMISSION OF STOCKHOLDER PROPOSALS
The submission of a proposal does not guarantee its inclusion in the Companys proxy statement or presentation at the Meeting unless certain securities law requirements are met. The Company expects that the 2010 Annual Meeting of Stockholders will be held in February 2010, but the exact date, time, and location of such Meeting have yet to be determined. A stockholder who intends to present a proposal at our 2010 Annual Meeting of Stockholders, including nomination of a director, must submit a notice of intention to bring a proposal at the Annual Meeting to the Company at its address in New York, New York in order for the proposal to be considered for inclusion in the Companys proxy statement for that Meeting. Such notices should be in writing and addressed to Thomas Friedmann, Secretary, c/o PennantPark Investment Corporation, 590 Madison Avenue, 15th Floor, New York, New York 10022 and must be received by the Company on or after July 17, 2009 and on or before August 17, 2009 and in accordance with all applicable provisions of the Companys by-laws. The Company reserves the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements.
The Companys Audit Committee has established guidelines and procedures regarding the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters (collectively, Accounting Matters). Persons with complaints or concerns regarding Accounting Matters may submit their complaints to the Companys Chief Compliance Officer (CCO). Persons who are uncomfortable submitting complaints to the CCO, including complaints involving the CCO, may submit complaints directly to the Companys Audit Committee Chair. Complaints may be submitted on an anonymous basis.
The CCO may be contacted at:
Mr. Guy Talarico
PennantPark Investment Corporation
Chief Compliance Officer
590 Madison Avenue, 15th Floor
New York, New York 10022
The Audit Committee Chair may be contacted at:
Mr. Jeffrey Flug
PennantPark Investment Corporation
Audit Committee Chair
590 Madison Avenue, 15th Floor
New York, New York 10022
You are cordially invited to attend our Annual Meeting of Stockholders in person. Whether or not you plan to attend the Meeting, you are requested to complete, date, sign and promptly return the accompanying proxy card in the enclosed postage-paid envelope or to vote by telephone or through the Internet.
New York, New York
December 22, 2008
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
ANNUAL MEETING OF STOCKHOLDERS OF
February 3, 2009
Please date, sign and mail
your proxy card in the
envelope provided as soon
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement, Annual Report and Form 10-K are available at www.proxyvote.com.
À Please detach along perforated line and mail in the envelope provided. À
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -