Loading...
HomeMy WebLinkAboutRes 2014-04-04 Vote for BOD for Build American Mutual Assurance Company.pdfCITY OF ANNA, TEXAS RESOLUTION NO. 2014-04-04 A RESOLUTION OF THE CITY OF ANNA, TEXAS AUTHORIZING THE CITY MANAGER TO ACT ON THE CITY'S BEHALF IN CASTING A VOTE FOR NOMINEES FOR THE BUILD AMERICA MUTUAL ASSURANCE COMPANY'S BOARD OF DIRECTORS WHEREAS, The Build America Mutual Assurance Company ("BAM") will hold its annual meeting with the Board of Directors (the "Board") to re-elect two nominees to the BAM Board WHEREAS, The City of Anna, Texas (the "City") is entitled to vote for the nominees by virtue of having bonds insured by BAM WHEREAS, The City Council (the "Council") wish to exercise their right to vote for the nominees NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS, THAT: Section 1. Recitals Incorporated. The recitals above are incorporated herein as if set forth in full for all purposes. Section 2. Approval and Authorization of Engagement The City Council hereby authorizes the City Manager to execute the attached Proxy Card and cast votes for each nominee as directed by the City Council during this meeting held on April 8, 2014. The City Manager is hereby authorized to execute all documents and to take all other actions necessary to cast the City's vote. Res. 2014-04-04 Vote for BOD for Build America Mutual Assurance Co. PAGE 1 OF 1 04-08-14 Build America Mutual Assurance Company — Proxy_ Carl PROXY— Annual Meeting of Members --Tuesday, April 22, 2014 mis PROXY IS SOLICITED ON BEHALF OF Tile BOARD OF DIRECTORS The undersigned member hereby appouits Alexander Makowski, General Counsel of Build America Mutual Assurance Company, as proxy With the power to appoint his substitute, and hereby authorizes hhu to represent and to cast, as designated below, all of the votes to which the undersigned is entitled to cast as of March 7, 2014,at the Aluival Meeting of Members to be held on Tuesday, April 22, 2014, or at any adjournment or postponement thereof. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS TO PROPOSAL 1 IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED MEMBER (IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES IN FAVOR OF PROPOSAL 1) AND IN ACCORDANCE WITH THE PROXY'S JUDGMENT UPON ANY MATTERS PROPERLY COMING BEFORE THE MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF. 0 Please mark your vote as in this example Proposal L. To re-elect two directors, each for a three-year term, to serve until their, successors have been duly elected and qualified. Nominees: FOR AGAINST ABSTAIN (1) Robert Phillips Cochran ❑ ❑ ❑ (2) Robert Albert Vanosky ❑ ❑ ❑ Member Name: City of Anna Number of Votes: 1 Signature of Authorized Person: Print Name of Authorized Person: Title: Date: March 26, 2014 City of Anna 111 N. Powell Parkway Anna, TX 75409 972-924-3325 By U.S. Mail Dear Philip Sanders, Enclosed is the notice for the 2014 Annual Meeting (the "Meeting") of Members of Build America Mutual Assurance Company ("BAM") to be held on April 22, 2014. The detailed information for the Meeting, along with a proxy card, is enclosed. Having issued bonds insured by BAM, the issuer you represent is entitled to cast one or more votes at the Meeting. Membership in BAM does not impose any obligations on an issuer: the premium is fixed for the maturity of any bond insured, the policies are non -assessable (i.e., the issuer cannot get assessed for a default by another insured issuer), and the policy cannot be cancelled. Rather, membership only bestows certain rights on BAM's members, including the right to (i) vote for the Board of Directors and on any other matter properly brought before the membership, (ii) share in any dividends declared by BAM, and (iii) if an insured bond is refunded, receive a credit for a portion of the member surplus contribution made when the insurance was issued. The only agenda item before the membership at the Meeting is the re-election of two nominees to BAM's Board of Directors. The existing Board and management of BAM ask that you take a moment to mark and sign the enclosed proxy card. Given each of the current directors' role in the successful first full calendar year of BAM's operations, along with the qualifications of the individual nominees (as summarized in the enclosed material), we believe the Board will continue to increase BAM's presence in, and enhance BAM's benefit to, the municipal bond market. Your signed proxy must be returned to us by April 18, 2014 by (i) mail using the enclosed envelope, (ii) fax to 212 962-1710, or (iii) email to GeneralCounsel@buildamerica.com. If you have any questions, please feel free to contact the undersigned at mmoriarty@buildamerica.com or 212 235-2529• BUILD AMERICA MUTUAL ASSURANCE COMPANY 7 World Financial Center, 27th Floor 1 200 Liberty Street I New York, New York 10281 1 t 212.235.2500 f 212.962.2030 1 www.buildamerica.com For your information, we are also enclosing "Putting Policyholders First: A Report on BAM's 2013 Results," which summarizes the highlights of BAM's successful first year. For additional information about BAM, go to our website at www.buildamerica.com. BAM looks forward to receiving your proxy and to a successful and beneficial relationship with its member issuers going forward. Sincerely, Michael J. Moriarty Head of Regulatory Oversight & Compliance Enc. BUILD AMERICA MUTUAL ASSURANCE COMPANY I World Financial Center, 27th Floor 120o Liberty Street ( New York, New York 10281 ( t 212.235.2500 f 212.962.2030 1 www.buildamerica.com 3/12/14 Putting Policyholders First: A Report on BAWS 2013 Results Build America Mutual recently filed its 2013 financial results with the New York Department of Financial Services and 49 other state regulators. It was a successful first year of operations for us, and we want to take a moment to discuss some of the highlights with you. The most important accomplishment is the progress of our insured portfolio, which went from a negligible level on January 1, 2013 to almost $5 billion of gross par by December 31. That growth demonstrated the real market demand for bond insurance generally, and for BAM's guaranty specifically. At this point in time, BAM has far more capital than required for the risk it has assumed - 8:1 leverage, as compared to the 75:1 leverage that Standard & Poor's has set as the maximum level for a AAA -rated financial guaranty insurer. Capital strength and quality of insured portfolio are primary considerations in S&P's assignment of BAM's AA/Stable rating. BAM's Qualified Statutory Capital (QSC) and claims -paying resources declined slightly during 2013. As of December 31, 2013, BAM's QSC was $470.1 million, down $13.6 million from BUILD AMERICA MUTUAL ASSURANCE COMPANY 7 World Financial Center. 27th Floor 1 200 Libertv Street I New York. New York 10281 1 t 212.235.2500 f 212.962.2030 1 www.buildamerica.com In this endeavor, we enjoy strong support from the White Mountains Insurance Group, which provided the initial capitalization of the company through the purchase of surplus notes, which will be repaid over their 30 year term from surplus capital generated by BAM. White Mountains also provides first loss reinsurance to BAM through its subsidiary, HG Re, collateralized with $10o million in initial cash, growing to $400 million over time, plus unearned premiums. The capital and unearned premium reserves of HG Re are held in collateral trusts at BNY Mellon for the protection of BAM. No other municipal bond insurance company has ever had this kind of "first loss" protection for its capital base, which covers most of the potential losses BAM is ever likely to incur and provides an extra layer of stability for BAM's rating. Ray Barrette, Chairman and Chief Executive Officer of White Mountains, recently reinforced his company's support for the BAM business model and its commitment to seeing BAM grow over the long term (see highlighted box). On many prior occasions White Mountains has proven itself to be a patient, supportive provider of capital for the insurance industry. BAM's commitment to transparency is one of the core elements of our culture. A presentation with a more detailed discussion of our results is available on our web site here, along with our audited statutory financial statements and quarterly operating supplement. You can also view our complete insured portfolio and our Obligor Disclosure Briefs, which discuss the credit fundamentals behind every transaction BAM insures. If you have questions about any of the points made in this letter, or about issues raised by others, please do not hesitate to contact Michael Stanton, BAM's Head of Communications, at mstanton@Dbuildam_erica.co_ m. Thank you for your support during BAM's launch period. We look forward to working with you and continuing to serve a growing share of the overall municipal market in 2014 and beyond. Sincerely, Bob Cochran Sean McCarthy Chairman of the Board Chief Executive Officer Managing Director Managing Director BUILD AMERICA MUTUAL ASSURANCE COMPANY 1 WORLD FINANCIAL CENTER, 27th FLOOR 200 LIBERTY STREET NEW YORK, NY 10281 NOTICE OF THE ANNUAL MEETING OF MEMBERS TO BE HELD ON APRIL 22, 2014 To the Members of Build America Mutual Assurance Company: NOTICE IS HEREBY GIVEN that the 2014 Annual Meeting (the "Meeting") of Members of Build America Mutual Assurance Company (the "Company") will be held as, and for the purposes, set forth below: Time: 9:00 a.m. on Tuesday, April 22, 2014 Place: Build America Mutual Assurance Company 1 World Financial Center, 27th Floor 200 Liberty Street New York, NY 10281 Items of Business: 1. To reelect two directors of the Company to hold office as specified in the accompanying Proxy Statement; and 2. To act upon any other matters properly coming before the Meeting or any adjournment or postponement thereof. Record Date: Members of the Company at the close of business on March 7, 2014 are entitled to notice of, and to vote at, the Meeting and any adjournment or postponement thereof. A complete list of members entitled to vote at the Meeting will be available for inspection by any member for any purpose germane to the Meeting for ten days before the Meeting during ordinary business hours at the Company's headquarters located at 1 World Financial Center, 27th Floor, 200 Liberty Street, New York, NY 10281. Threshold Amount: Pursuant to the Company's by-laws, the Threshold Amount for the Meeting has been determined to be $90,000,000. The number of votes that each member is entitled to cast is determined in the manner set forth under "Voting and Revocability of Proxies" in the accompanying Proxy Statement. Important: In order to avoid additional soliciting expense to the Company, please MARK, SIGN, DATE and MAIL your proxy PROMPTLY in the return envelope provided for receipt in New York by April 18, 2014, even if you plan to attend the Meeting. Proxies are also valid if faxed to 212-962-1710, or scanned and emailed to GeneralCounsel a buildamerica.com, in either case no later than April 18, 2014. You may attend the Meeting and vote in person if you advise us by April 18, 2014 that you will be attending. Your notice that you will be attending can be sent by fax to 212-962-1710, emailed to General Counsel @buiIdamerica. coin or mailed to Build America Mutual Assurance Company at the address given above, attention General Counsel. By order of the Board of Directors, /s/ Robert P. Cochran New York, New York Robert P. Cochran March 26, 2014 Seeretary -2- BUILD AMERICA MUTUAL ASSURANCE COMPANY 1 WORLD FINANCIAL CENTER, 27th FLOOR 200 LIBERTY STREET NEW YORK, NY 10281 PROXY STATEMENT ANNUAL MEETING OF MEMBERS TO BE HELD ON APRIL 22, 2014 Purpose of Meeting This Proxy Statement is being furnished to members of Build America Mutual Assurance Company (the "Company") in connection with the solicitation of proxies by the Board of Directors of the Company (the `Board") from such members for use at the 2014 Annual Meeting of Members of the Company (the "Meeting") to be held on Tuesday, April 22, 2014 at 9:00 a.m., local time, at the Company's headquarters at 1 World Financial Center, 27th Floor, 200 Liberty Street, New York, NY 10281, and at any adjourmnent or postponement thereof. This Proxy Statement, the enclosed Notice of Annual Meeting of Members, and the form of proxy are first being mailed to the members of the Company on or about March 26, 2014. At the Meeting, the members of the Company will be asked to consider and vote upon the re- election of two directors, who are policyholders of the Company, to serve for a three-year term expiring at the Company's annual meeting to be held in 2017 (see "Proposal 1. Re-election of Directors"). The Board knows of no matters that will be presented for consideration at the Meeting other than the matters set forth in the Notice of Annual Meeting of Members. If any other matters are properly presented at the Meeting or any postponement or adjournment thereof, the person appointed in the enclosed proxy and acting thereunder will have authority to vote on such matters, in accordance with the appointee's judgment. Record Date Only members of the Company as of the close of business on March 7, 2014 (the "Record Date") will be entitled to notice of, and to vote at, the Meeting or at any adjournment or postponement thereof. Voting and Revocability of Proxies The members will vote on each matter voted upon at the Meeting and any adjournment or postponement thereof. The highest aggregate principal amount of all outstanding obligations of any member which is insured by the Company as of the Record Date shall be the threshold amount (the "Threshold Amount") for the purposes of determining the voting rights of any member at the Meeting. Any member of the Company for which the principal amount of such outstanding obligations is equal to the Threshold Amount is entitled to cast ten votes. Any member of the Company for which the principal amount of such outstanding obligations is less than the Threshold Amount is entitled to cast the number of votes determined by (i) dividing such principal amount by the Threshold Amount, (ii) multiplying such quotient by ten, and (iii) rounding the result up or down to the nearest whole number, or the next highest whole number in the case of a remainder exactly equal to one-half, provided, however, that if such result would be less than one, the member is entitled to cast one vote. Pursuant to the Company's by-laws, the Threshold Amount for the Meeting has been determined to be $90,000,000. The presence, in person or by proxy, of holders of 5% of the votes entitled to be cast at the Meeting shall constitute a quorum. In the absence of a quorum, the members so present may, by majority vote, adjourn the Meeting until a quorum is present. The enclosed proxy is being solicited by the Board for use in connection with the Meeting and any postponement or adjournment thereof. Each member may vote in person or by properly executed proxy on all matters that properly come before the Meeting and any adjournment or postponement thereof. By executing and returning the proxy by April 18, 2014, members are directing the appointed person to vote in accordance with the instructions set forth on such proxy. A proxy executed by a member will be recognized if it is signed by such member's president, vice president, treasurer or assistant treasurer, secretary or assistant secretary, or other appropriate official. All properly executed proxies received by April 18, 2014 and not revoked in the manner described below will be voted in accordance with the instructions indicated on such proxies. If no instructions are indicated, such proxies will be voted "FOR" the election of each of the directors nominated by the Board. If a quorum for the Meeting is not obtained, the Meeting may be adjourned for the purpose of obtaining additional proxies or votes or for any other purpose. At any subsequent reconvening of the Meeting, all proxies will be voted in the same manner as such proxies would have been voted at the original Meeting (except for any proxies that have theretofore effectively been revoked or withdrawn). Proxies may be revoked by those persons executing the proxies by (a) delivering to the Secretary of the Company at or before the Meeting a written notice of revocation bearing a later date than the proxy, (b) duly executing a subsequent proxy and delivering it to the Secretary of the Company at or before the Meeting, or (c) attending the Meeting and voting in person (although mere attendance at the Meeting will not in and of itself constitute revocation of a proxy). Any written notice revoking a proxy or any subsequent proxy should be delivered at or before the Meeting to: General Counsel, Build America Mutual Assurance Company, 1 World Financial Center, 27th Floor, 200 Liberty Street, New York, NY 10281. All expenses of this solicitation, including the cost of preparing and mailing this Proxy Statement, will be borne by the Company. In addition to solicitation by use of the mail, proxies may be solicited by telephone, electronic mail or personally by the directors, officers and employees of the Company, who will receive no extra compensation for their services. Procedure for the Election of Directors Under the terms of the Declaration of Intention and Charter of the Company (the "Charter") and the Company's Bylaws (the "Bylaws"), the number of directors of the Company is fixed at seven. Directors are elected by a plurality of the number of votes cast at the Meeting. Under the terms of the Charter and the Bylaws, the persons nominated and elected to serve as directors of the Company in accordance with the procedures set forth therein shall serve as directors until their successors are duly elected and qualified, unless they die, resign or are otherwise removed before the conclusion of their term of office. -2- PROPOSAL 1. RE-ELECTION OF DIRECTORS The Board has nominated the following two persons (the "Nominees") for re-election as directors: Robert Phillips Cochran; and Robert Albert Vanosky. Pursuant to Section 3.2 of the Bylaws, at the May 17, 2013 meeting of the Board following the April 23, 2013 Annual Meeting of the Members the elected directors were divided into three classes as nearly equal in number as possible. The terms of office of the directors initially classified were as follows: the term of the first class expires at this 2014 Meeting, the tern of the second class shall expire at the 2015 annual meeting, and the term of the third class shall expire at the 2016 annual meeting. If any Nominee should be unable to serve as director, an event not now anticipated, it is intended that the votes represented by proxies will be cast for the election of such substitute as the Board may nominate. The two Nominees have been serving as directors of the Company, with the approval of the New York Department of Financial Services, since the Company was incorporated on March 16, 2012. Mr. Vanosky is paid $75,000 annually for his service as director. Mr. Cochran, as an employee of the Company, does not receive additional payment for his service as director. Set forth below is certain information with respect to each Nominee. The Board, acting as a full nominating committee, recommends that the members vote "FOR" each Nominee. Robert Phillips Cochran, age 64, is a Managing Director, Chairman of the Board and co- founder of the Company. Prior to co-founding the Company, Mr. Cochran was a principal of Hudson - Greenwich Partners, LLC. Mr. Cochran co-founded Financial Security Assurance Inc. ("FSA") in 1985 and was Chief Executive Officer from 1990 to 2009 (NYSE: FSA from 1994 to 2000). In 1990, FSA's board of directors appointed him Chief Executive Officer, successor to Jim Lopp, FSA's principal founder. He also chaired the Association of Financial Guaranty Insurers from 2001 to 2002. Mr. Cochran joined FSA from the law firm Kutak Rock, where he was a public finance lawyer and Managing Partner of the Washington, DC office. He holds a B.A. from Centre College and a J.D. from Duke University School of Law, and clerked for Judge Pierce Lively of the 6th Circuit Court of Appeals. Robert Albert Vanosky, age 65, is a private investor. He retired from RBC Dain Rausher Incorporated in 2004, where he was the Head of the Public Finance Division and a member of the Management Committee. He began his career at Rausher Pierce Refsnes, Inc. in 1972, ultimately serving as head of Fixed Income and a member of the Executive Committee when that firm merged with Dain Bosworth in 1998 to form Dain Rauscher. Mr. Vanosky then served as head of Public Finance and a member of the Management Committee for the combined firm until it was acquired by RBC Capital Markets in 2000. He remained as the Head of the Public Finance Division until his retirement in 2004. During his career, Mr. Vanosky was an active member of The Bond Market Association ("TBMA"), having served on its board of directors, chaired the Municipal Executive Council and served as a past member of TBMA's Regional Advisory Council. He is also a past Board Member of the Municipal Securities Rule Making Board and a past Chairman of the Municipal Advisory Council of Texas. He currently serves on the Board of the Rancho Santa Fe Foundation. He is a past Board Member of the Arizona Higher Education Loan Authority and the Dallas Symphony Orchestra. He holds a B.A. from Arizona State University. -3- In order to avoid additional soliciting expense to the Company, please MARK, SIGN, DATE and MAIL your proxy PROMPTLY in the return envelope provided for receipt in New York by April 18, 2014, even if you plan to attend the Meeting. Proxies are also valid if faxed to 212-962-1710, or scanned and emailed to GeneralCounsel@buildainerica.com, in either case no later than April 18, 2014. You may attend the Meeting and vote in person if you advise us by April 18, 2014, that you will be attending. Your notice that you will be attending can be sent by fax (to 212-962-1710), scanned and emailed to GeneralCounsel@buiIdamerica.com or mailed to Build America Mutual Assurance Company at the address given above, attention General Counsel. By order of the Board of Directors, /s/ Robert P. Cochran New York, New York Robert P. Cochran March 26, 2014 Secretary M Build America Mutual Assurance Company — Proxy Card PROXY — Annual Meeting of Members —Tuesday, April 22, 2014 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned member hereby appoints Alexander Makowski, General Counsel of Build America Mutual Assurance Company, as proxy with the power to appoint his substitute, and hereby authorizes him to represent and to cast, as designated below, all of the votes to which the undersigned is entitled to cast as of March 7, 2014 at the Annual Meeting of Members to be held on Tuesday, April 22, 2014, or at any adjournment or postponement thereof. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS TO PROPOSAL 1 IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED MEMBER (IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES IN FAVOR OF PROPOSAL 1) AND IN ACCORDANCE WITH THE PROXY'S JUDGMENT UPON ANY MATTERS PROPERLY COMING BEFORE THE MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF. © Please mark your vote as in this example Proposal 1: To re-elect two directors, each for a three-year term, to serve until their successors have been duly elected and qualified. Nominees: (1) Robert Phillips Cochran (2) Robert Albert Vanoslcy Member Name: Number of Votes: Signature of Authorized Person: Print Name of Authorized Person: Title: Date: FOR AGAINST City of Anna ABSTAIN u U