INFORMATION ABOUT THE MEETING
When is the Annual Meeting?
The Annual Meeting will be conducted virtually on June 15, 2023,18, 2024, at 11:30 a.m. (Eastern Time).
Where will the Annual Meeting be held?
The Annual Meeting will be conducted virtually via live webcast at www.virtualshareholdermeeting.com/MRCC2023.MRCC2024.
What items will be voted on at the Annual Meeting?
There are two matters scheduled for a vote:
1.To elect threeone Class II directorsIII director to serve for a term of three years, and until their respective successors havehis successor has been duly elected and qualified (Proposal No. 1); and
2.To approve a proposal to authorize flexibility for the Company, subject to approval of the Board of Directors of the Company, to sell shares of its common stock or warrants, options or rights to acquire its common stock during the next twelve months at a price below the Company’s then-current net asset value per share, subject to certain conditions as set forth in this proxy statement (including that the number of shares sold on any given date does not exceed 25% dilution to current investors not participating in the offering) (Proposal No. 2).
As of the date of this proxy statement, we are not aware of any other matters that will be presented for consideration at the Annual Meeting.
What are the recommendations of the Board of Directors?
Our Board of Directors recommends that you vote:
“FOR” the election of the threeone Class IIIII director nomineesnominee named herein to serve on the Board of Directors; and
“FOR” the proposal to authorize flexibility for the Company, subject to approval of the Board of Directors of the Company, to sell shares of its common stock or warrants, options or rights to acquire its common stock during the next twelve months at a price below the Company’s then-current net asset value per share, subject to certain conditions as set forth in this proxy statement (including that the number of shares sold on any given date does not exceed 25% dilution to current investors not participating in the offering).
Will the Company’s directors be in attendance at the Annual Meeting?
The Company encourages, but does not require, its directors to attend annual meetings of stockholders. AllHowever, the Company anticipates that substantially all of ourits directors serving on our Board atwill attend the time of the 20222024 Annual Meeting attended that meeting.Meeting.
INFORMATION ABOUT VOTING
Who is entitled to vote at the Annual Meeting?
Only stockholders of record at the close of business on the record date, April 6, 2023,5, 2024, are entitled to receive notice of the Annual Meeting and to vote the shares for which they are stockholders of record on that date at the Annual Meeting, or any postponement or adjournment of the Annual Meeting. As of the close of business on April 6, 2023,5, 2024, we had 21,666,340 shares of common stock outstanding.
How do I vote?
With respect to Proposal No. 1, you may either vote “FOR” each of the Class II nomineesIII nominee to the Board of Directors, or you may vote “WITHHOLD AUTHORITY” for the nominees.nominee. With respect to Proposal No. 2, you may vote “FOR” or “AGAINST,” or abstain from voting altogether. The procedures for voting are fairly simple:
Stockholders of Record: Shares Registered in Your Name. If on April 6, 2023,5, 2024, your shares were registered directly in your name with the Company’s transfer agent, American Stock Transfer & Trust Company, LLC, then you are a stockholder of record. If you are a stockholder of record, you may vote virtually at the Annual Meeting or vote by giving us your proxy. You may give us your proxy by completing the enclosed proxy card and returning it in the enclosed postage-prepaid envelope. Whether or not you plan to participate in the Annual Meeting, we urge you to fill out and return the enclosed proxy card or to otherwise give your proxy authorization as specified on the proxy card, to ensure your vote is counted. You may still participate in the Annual Meeting and vote virtually if you have already voted by proxy or have otherwise given your proxy authorization.
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VIRTUALLY: To vote virtually, participate in the Annual Meeting, and submit your vote via the website.
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BY MAIL: To vote using the enclosed proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the postage paid envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct.
Beneficial Owners: Shares Registered in the Name of a Broker or Bank. If on April 6, 2023,5, 2024, your shares were held in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name,” and these proxy materials are being forwarded to you by that organization. If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from the Company. Simply complete and mail the proxy card to ensure that your vote is counted. Alternatively, you may be able to vote by telephone or over the internet as instructed by your broker or bank. To vote virtually at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy card.
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock for which you are the stockholder of record as of April 6, 2023.5, 2024.
What does it mean if I receive more than one proxy card?
If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please provide a response for each proxy card you receive to ensure that all of your shares are voted.
What if I return a proxy card but do not make specific choices?
If you return a signed and dated proxy card without marking any voting selections, your shares will be voted: “FOR” the election of the threeone Class IIIII director nomineesnominee named herein to serve on the Board of
Directors and “FOR” the proposal to authorize flexibility for the Company, subject to approval of the Board of Directors of the Company, to sell shares of its common stock or warrants, options or rights to acquire its common stock during the next twelve months at a price below the Company’s then-current net asset value per share, subject to certain conditions as set forth in this proxy statement (including that the number of shares sold on any given date does not exceed 25% dilution to current investors not participating in the offering).
If any other matter is properly presented at the meeting, your proxy (one of the individuals named on your proxy card) will vote your shares as recommended by the Board of Directors or, if no recommendation is given, will vote your shares using his or her discretion.
Can I change my vote after submitting my proxy card?
Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the stockholder of record of your shares, you may revoke your proxy in any one of three ways:
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You may change your vote using the same method that you first used to vote your shares;
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You may send a written notice that you are revoking your proxy to Monroe Capital Corporation, 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606, Attention: Corporate Secretary; or
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You may participate in the Annual Meeting and vote virtually. Simply participating in the Annual Meeting, however, will not, by itself, revoke your proxy.
If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.
How are votes counted?
Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count “FOR” and “WITHHOLD AUTHORITY” votes for Proposal No. 1, and with respect to Proposal No. 2, “FOR,” “AGAINST” and “ABSTAIN.” A broker non-vote occurs when a nominee, such as a brokerage firm, bank, dealer or other similar organization, holding shares for a beneficial owner, does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received instructions with respect to that proposal from the beneficial owner. In the event that a broker, bank, custodian, nominee or other record holder of our common stock indicates on a proxy that it does not have discretionary authority to vote certain shares on a particular proposal, then those shares will be treated as broker non-votes with respect to that proposal. Accordingly, if you own shares through a nominee, such as a brokerage firm, bank, dealer or other similar organization, please be sure to instruct your nominee how to vote to ensure that your vote is counted on each of the proposals.
If your shares are held by your broker as your nominee (that is, in “street name”), you will need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares. Under applicable Nasdaq Stock Market LLC Rules, eachEach of Proposal Nos. 1 (election of directors) and 2 (authorization to sell shares below net asset value) is a non-routine proposal. Since these proposals to be voted on at the Annual Meeting are not routine matters, the broker or nominee that holds your shares will need to obtain your authorization to vote those shares and will enclose a voting instruction form with this proxy statement. The broker or nominee will vote your shares as you direct on their voting instruction form so it is important that you include voting instructions.
Abstentions will be treated as shares present for the purpose of determining the presence of a quorum for the transaction of business at the Annual Meeting.
How many votes are needed to approve each proposal?
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For Proposal No. 1, the three nomineesone nominee receiving the most “FOR” votes, among votes properly cast virtually or by proxy, will be elected, even if they receive approval from less than a majority of the votes cast. Because the nominees arenominee is running unopposed, all nominees arethe nominee is expected to be elected as directors,director, as all nominees who receiveif the nominee receives votes in favor he will be elected, while votes not cast or voted “WITHHOLD AUTHORITY” will have no effect on the election outcome.
ADDITIONAL INFORMATION
How and when may I submit a stockholder proposal for the Company’s 20242025 Annual Meeting?
We will consider for inclusion in our proxy materials for the 20242025 Annual Meeting of Stockholders, stockholder proposals that are received at our executive offices, in writing, no earlier than October , 20232024 and no later than 5:00 p.m. (Eastern Time) on December , 2023,2024, and that comply with our bylaws and all applicable requirements of Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Proposals must be sent to our Corporate Secretary at Monroe Capital Corporation, 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606.
Pursuant to our bylaws, stockholders wishing to nominate persons for election as directors or to introduce an item of business at an annual meeting that are not to be included in our proxy materials must have given timely notice thereof in writing to our Corporate Secretary. To be timely for the 20242025 Annual Meeting of Stockholders, you must notify our Corporate Secretary, in writing, no earlier than October , 2023,2024, and no later than 5:00 p.m. (Eastern Time) on December , 2023.2024. We also advise you to review our bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations, including the different notice submission date requirements in the event that the date of the notice for the 20242025 Annual Meeting of Stockholders is more than 30 days before or after the first anniversary of the date of the notice for the 20232024 Annual Meeting. In accordance with our bylaws, the chair of the 20242025 Annual Meeting of Stockholders may determine, if the facts warrant, that a matter has not been properly brought before the meeting and, therefore, may not be considered at the meeting.
Pursuant to the Company’s bylaws, among other things, a stockholder’s notice shall set forth as to each individual whom the stockholder proposes to nominate for election or reelection as a director:
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the name, age, business address and residence address of such individual;
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the class, series and number of any shares of stock of the Company that are beneficially owned by such individual;
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the date such shares were acquired and the investment intent of such acquisition;
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whether such stockholder believes any such individual is, or is not, an “interested person” of the Company, as defined in the 1940 Act and information regarding such individual that is sufficient, in the discretion of the Board of Directors or any committee thereof or any authorized officer of the Company, to make either such determination; and
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all other information relating to such individual that is required to be disclosed in solicitations of proxies for election of directors in an election contest (even if an election contest is not involved), or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such individual’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected).
All nominees properly submitted to the Company (or which the nominating and corporate governance committee otherwise elects to consider) will be evaluated and considered by the members of the nominating and corporate governance committee using the same criteria as nominees identified by the nominating and corporate governance committee itself.
How can I obtain the Company’s Annual Report on Form 10-K?
A copy of our 20222023 Annual Report on Form 10-K for the fiscal year ended December 31, 20222023 is being mailed along with this proxy statement. Our 20222023 Annual Report is not incorporated into this proxy statement and shall not be considered proxy solicitation material.
We will also mail to you without charge, upon written request, a copy of any specifically requested exhibit to our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.2023. Requests should be sent to: Corporate Secretary, Monroe Capital Corporation, 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606. A copy of our Annual Report on Form 10-K has also been filed with the Securities and Exchange Commission, or the SEC, and may be accessed from the SEC’s homepagewebsite (www.sec.gov).
Who is paying for this proxy solicitation?
The Company will pay for the entire cost of soliciting proxies. The Company has engaged a third partythird-party proxy solicitor, Broadridge Financial Solutions, Inc., and the Company estimates that the Company would pay the proxy solicitor a fee of approximately $115,000$125,000 for such services, plus reimbursement for out-of-pocket expenses, though the costs of the proxy solicitation process could be lower or higher than the Company’s estimate. The proxy solicitor may call you and ask you to vote your shares. The proxy solicitor will not attempt to influence how you vote your shares, but only ask that you take the time to cast a vote. You may also be asked if you would like to vote over the telephone and to have your vote transmitted to our proxy tabulation firm.
In addition to these written proxy materials, directors, officers and employees of Monroe Capital BDC Advisors, LLC, the Company’s investment adviser, or MC Advisors, may also solicit proxies in person, by telephone or by other means of communication; however, the directors, officers and employees of MC Advisors will not be paid any additional compensation for soliciting proxies. In addition to the solicitation of proxies by the use of the mail, proxies may be solicited in person and/or by telephone or facsimile transmission by our proxy solicitor, directors, officers or employees of MC Advisors. MC Advisors is located at 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606.
The Company may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
How many copies should I receive if I share an address with another stockholder?
The SEC has adopted rules that permit companies and intermediaries, such as brokers, to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies.
Brokers may be householding our proxy materials by delivering a single proxy statement and Annual Report to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If at any time you no longer wish to participate in householding and would prefer to receive a separate proxy statement and Annual Report, or if you are receiving multiple copies of the proxy statement and Annual Report and wish to receive only one, please notify your broker if your shares are held in a brokerage account or us if you are a stockholder of record. You can notify us by sending a written request to: Corporate Secretary, Monroe Capital Corporation, 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606, or by calling (312) 258-8300. In addition, the Company will promptly deliver, upon written or oral request to the address or telephone number above, a separate copy of the Annual Report and proxy statement to a stockholder at a shared address to which a single copy of the documents was delivered.
Whom should I contact if I have any questions?
If you have any questions about voting your shares, please call our proxy solicitor, Broadridge Financial Solutions, Inc., at (833) 501-4817. If you have any questions about the Annual Meeting, these proxy materials or your ownership of our common stock, please contact Corporate Secretary, Monroe Capital Corporation, 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606, Telephone: (312) 258-8300, or Fax: (312) 258-8350.
Information about the NomineesNominee and Directors
Biographical information with respect to the Class II nomineesIII nominee up for election at the Annual Meeting, as well as each of the other directors, and such person’s qualifications to serve as a director is set forth on the succeeding pages. Unless otherwise indicated, each director has held his or her principal occupation or other positions with the same or predecessor organizations for at least the last five years. There are currently no family relationships among any director, nominee, or executive officer. Certain of our directors who are also officers of the Company may serve as directors of, or on the boards of managers of, certain of our portfolio companies.
Nominee for Class II DirectorsIII Director
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Name, Address and Age(1) | | | Position(s) Held with MRCC | | | Term of Office and Length of Time Served | | | Principal Occupation(s) During Past 5 Years | | | Number of Portfolios in Fund Complex Overseen by Director/ Nominee | | | Other Directorships Held by Director/Nominee During Past 5 Years |
Interested Director | | | | | | | | | | |
Theodore L. Koenig (65) | | Chief Executive Officer and Chairman of the Board(2) | | Class III director since inception; term expires 2024 | | Founder and Chief Executive Officer of Monroe Capital
Chief Executive Officer and Manager of MC Advisors
Chairman and Chief Executive Officer of MCAP Acquisition Corporation
Chairman and Chief Executive Officer of Monroe Capital Income Plus Corporation | | 2 | | MCAP Acquisition Corporation
Monroe Capital Income Plus Corporation |
__________________________
(1)The address for Mr. Koenig is c/o 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606.
(2)Mr. Koenig is an interested director because of his positions with the Company and/or MC Advisors.
Interested Director
Theodore L. Koenig has served as our Chairman of the Board of Directors and Chief Executive Officer since our formation in February 2011 and as Chairman of MC Advisors’ investment committee since our initial public offering in October 2012. Additionally, Mr. Koenig is the Chief Executive Officer of MC Advisors. Since its formation in May 2018, Mr. Koenig has served as the chairman, a director and Chief Executive Officer of Monroe Capital Income Plus Corporation. From December 2020 to December 2021, Mr. Koenig served as the Chief Executive Officer and chairman of MCAP Acquisition Corporation. Mr. Koenig has approximately 40 years of experience in structuring, negotiating and closing transactions on behalf of asset-based lenders, commercial finance companies, financial institutions and private equity investors. Prior to founding MC Management’s affiliate, Monroe Capital, LLC (“Monroe Capital”) in 2004, Mr. Koenig served as the President and Chief Executive Officer of Hilco Capital LP from 1999 to 2004, where he invested in a variety of debt transactions. Prior to Hilco Capital, Mr. Koenig was a Senior Partner with the Chicago-based corporate law firm, Holleb & Coff from 1986 to 1999 and an Associate with Winston & Strawn from 1983 to 1986. Mr. Koenig earned his J.D. with Honors from the Chicago-Kent College of Law at the Illinois Institute of Technology and his B.S. in Accounting with High Honors from the Kelley School of Business at Indiana University. He is a Director of the Commercial Finance Association, and a member of the Turnaround Management Association, and the Association for Corporate Growth.
Class I Directors (continuing directors not up for re-election at the Annual Meeting)
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Name, Address and Age(1) | | Position(s) Held with MRCC | | Term of Office and Length of Time Served | | Principal Occupation(s) During Past 5 Years | | Number of Portfolios in Fund Complex Overseen by Director/ Nominee | | Other Directorships Held by Director/ Nominee During Past 5 Years |
Independent Directors | | | | | | | | | | |
Thomas J. Allison (72) | | Director | | Class I director since 2013; term expires 2025 | | Principal of Thomas J. Allison & Associates Senior Advisor of Portage Point Partners | | 2 | | Monroe Capital Income Plus Corporation MCAP Acquisition Corporation Katy Industries |
Robert S. Rubin (67) | | Director | | Class I director since 2012; term expires 2025 | | Managing Principal of the Diamond Group President of REAL Training Systems LLC | | 1 | | None. |
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(1)The address for each of Messrs. Allison and Rubin is c/o 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606.
Independent Directors
Thomas J. Allison has served on our Board of Directors and as our audit committee chairperson since April 2013. Mr. Allison has served as Principal of Thomas J. Allison & Associates, a senior management services firm, since 2013, and as Senior Advisor of Portage Point Partners, an interim management and business advisory firm, since May 2018. Mr. Allison has served as a director of Monroe Capital Income Plus Corporation, a business development company, since April 2022 and as a director of MCAP Acquisition Corporation from March 2021 to December 2021. Mr. Allison has been a director of Assertio Therapeutics, Inc. since 2020, where he chairs the Opioid Committee, has been an Independent Director of Virtus Pharmaceuticals LLC since 2022, and has been a member of AArete Consulting’s Advisory Board since 2016. Mr. Allison has been an Independent Director of Grupo HIMA, the second largest healthcare system in Puerto Rico, since 2021. Mr. Allison has served as Lead Independent Director of DTI, a noise dampening company, since 2023. Mr. Allison served as Chairman of Phoenixus AG, a pharmaceutical company, from 2022 to 2023, a director of Katy Industries, a manufacturer of commercial cleaning solutions and consumer storage products, from 2016 to 2018, a director of PTC Alliance Group Holdings, a global manufacturer of steel tubing, from 2015 to 2020, a director of Novum Pharma, from 2019 to 2020, and a director of The NORDAM Group, Inc., an aerospace company, from 2018 to 2019. From September 2018 to January 2019, Mr. Allison was a director of PGHC Holdings, Inc., a restaurant holding company. From 2006 until his retirement in 2012, Mr. Allison served as Executive Vice President and Senior Managing Director of Mesirow Financial Consulting, LLC, a full-service financial and operational advisory consulting firm headquartered in Chicago. At Mesirow, Mr. Allison managed complex turnaround situations and advised on major reorganizations and insolvencies. He also served as CEO, CFO or CRO for several clients. From 2002 to 2006, Mr. Allison served as National Practice Leader of the restructuring practice of Huron Consulting Group. From 1988 to 2002, he served in a variety of roles at Arthur Andersen, LLC, including Partner-in-Charge, Central Region Restructuring Practice. Earlier in his career, Mr. Allison served in various capacities at Coopers & Lybrand, an accounting firm, First National Bank of Chicago and the Chicago Police Department. Mr. Allison has previously served as Chairman of the Association for Certified Turnaround Professionals, Chairman and Director of the Turnaround Management Association, is a Fellow in the American College of Bankruptcy and has taught as a guest lecturer at Northwestern University and DePaul University. Mr. Allison received his bachelor of science in commerce and his master of business administration from DePaul University.
Robert S. Rubin has served on our Board of Directors since our initial public offering in October 2012 and is our compensation committee chairperson, a member of our audit committee and a member of our nominating and corporate governance committee. Mr. Rubin has been managing principal of the Diamond Group, an investment group that operates various companies and partnerships engaged in asset management and real estate investments, since 1998. Mr. Rubin is also founder of and has been President of REAL Training Systems LLC, a company that provides virtual training and education, since 2019. Mr. Rubin was formerly Vice Chairman of the board of Diamond Bancorp, Inc. in Chicago. From 1997 to 1998, Mr. Rubin founded and ran a boutique derivatives advisory firm called Prospect Park Capital Advisors, and from 1991 to 1997 co-founded and ran Horizon Advisors, a hedge fund and commodity trading advisor. From 1986 to 1991, Mr. Rubin worked at Nomura Securities in the Global Syndicate and New Products Department, where he co-founded and served on the board of Nomura Capital Services Inc., the first Japanese dealer in derivative products. From 1983 to 1986, Mr. Rubin worked at First National Bank of Chicago (now a part of JPMorgan Chase Bank, N.A.). Mr. Rubin currently serves on the board of ADI Negev, which supports facilities for developmentally disabled children and adults in Israel. Mr. Rubin received his bachelor of arts from Harvard College in 1978 and his master of business administration from the University of Chicago in 1986.
Class II Directors (continuing directors not up for re-election at the Annual Meeting)
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Name, Address and Age(1) | | Position(s) Held with MRCC | | Term of Office and Length of Time Served | | Principal Occupation(s) During Past 5 Years | | Number of Portfolios in Fund Complex Overseen by Director/ Nominee | | Other Directorships Held by Director/Nominee During Past 5 Years |
Independent Directors | | | | | | | | | | |
Jeffrey A. Golman (67)(68) | | | Director | | | Class II director since 2012; term expires 20232026 | | | Vice Chairman of Mesirow Financial Inc. | | | 1 | | | None. | |
Jorde M. Nathan (60) | | | Director | | | Class II director since 2013; term expires 2023 | | | Retired | | | 1 | | | None. | |
Interested Directors | | | | | | | | | | | | | | | | |
Caroline B. Davidson (46)(47)(2) | | | Director | | | Class II director since 2022; term expires 20232026 | | | Managing Director, Head of Capital Markets of Monroe Capital | | | 1 | | | None. | |
___________________________(1)
The address for each of Mr. Golman Mr. Nathan, and Ms. Davidson is c/o 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606.
(2)
Ms. Davidson is an interested director because of her position with MC Advisors.
Independent Directors
Jeffrey A. Golman has served on our Board of Directors since our initial public offering in October 2012 and is our nominating and corporate governance committee chairperson and a member on our audit committee. SinceFrom 2001 to April 2024, Mr. Golman has served as Vice Chairman of Mesirow Financial, Inc., a diversified financial services firm headquartered in Chicago. Since April 2024, Mr. Golman has served as a Managing Director of Mesirow Financial. Prior to his time with Mesirow Financial, Mr. Golman co-founded GGW Management Partners, LLC, a management-oriented investment group formed in partnership with Madison Dearborn Partners, Willis Stein & Partners and The Pritzker Organization and was Managing Director with Lazard Frères & Co., LLC from 1989 to 1999. From 1981 to 1988, Mr. Golman worked with Salomon Brothers’ Chicago Banking Group, rising to the level of Vice President. Prior to that time, Mr. Golman practiced corporate and tax law in Chicago. Mr. Golman is a director of the Cystic Fibrosis Foundation Leadership Council’s Greater Illinois Chapter. Mr. Golman is also a member of The Economic Club of Chicago, a member of the University of Illinois Foundation and a member of the Development Council of B.U.I.L.D., Inc. (Broader Urban Involvement and Leadership Development), a non-profit organization which helps at-risk youth realize their potential and contributes to the stability, safety and well-being of our communities. Mr. Golman also serves in an advisory position and as a member of the Law Board of Northwestern University School of Law. Mr. Golman received his bachelor of science in accounting from the University of Illinois in Champaign-Urbana and received his juris doctor from Northwestern University.
Jorde M. Nathan has served on our Board of Directors since April 2013 and is a member of our nominating and corporate governance committee and a member of our compensation committee. Mr. Nathan was a Managing Director of Barclays Bank, a major global financial services provider, from
2008 until his retirement in 2012. From 1993 until 2008, Mr. Nathan was employed by Lehman Brothers Inc., and served as a Managing Director of distressed, high yield and leverage loan sales and trading. From 1985 to 1993, Mr. Nathan served in various capacities as a First Scholar at The First National Bank of Chicago, ultimately serving as head of trading for bank loans. Mr. Nathan graduated Phi Beta Kappa with an AB degree in Chinese Language and Economics from Amherst College and earned his master of business administration from the University of Chicago. Mr. Nathan is a member of the national board and serves as chairman of the central region of the Friends of Israel Defense Forces.
Interested Director
Caroline B. Davidson has served on our Board of Directors since June 2022. Ms. Davidson has served as a Managing Director and Head of Capital Markets of Monroe Capital LLC since 2015, where she is responsible for buy-sidebuy side club originations, relationship management, and marketing as well as sell-sidesell side syndications and is a member of Monroe Capital LLC’s investment committee. Ms. Davidson has over 2025 years of experience in middle market investing. Prior to Monroe from 2011 to 2014,Capital, Ms. Davidson was a senior deal professional at The Carlyle Group’s middle market private debt platform, Carlyle GMS Finance, where she focused on originating, structuring, negotiating, executing and managing middle market loans. Prior to Carlyle, Ms. Davidson was a founding professional and Senior Vice President at Churchill Financial from 2006 to 2011 and an Assistant Vice President at GE Antares Capital from 2004 to 2006.Capital. Ms. Davidson was recognized by Mergers & Acquisitions as one of 2017 and 2018’s Most Influential Women in Mid-Market M&A. Ms. Davidson earned her M.B.A. from The University of Chicago Booth School of Business and her B.A. in Communications with a Certificate in Business from The University of Wisconsin – Madison. She is a member of the Association for Corporate Growth, the Women’s Association of Venture & Equity, serves on the National Young Leadership Cabinet of the Jewish Federations of North America and serves on the Board of Directors of The Jewish United Fund. Ms. Davidson earned her M.B.A. from The University of Chicago Booth School of Business and her B.A. in Communications with a Certificate in Business from The University of Wisconsin — Madison.
Class I Directors (continuing directors not up for re-election at the Annual Meeting)
Name, Address and Age(1)
| | | Position(s) Held
with MRCC
| | | TermQualifications of Office
and Length of
Time Served
| | | Principal
Occupation(s)
During Past 5 Years
| | | Number of
Portfolios
in Fund
Complex
Overseen by
Director/
Nominee
| | | Other Directorships Held by
Director/Nominee During
Past 5 Years
| |
Independent Directors | | | | | | | | | | | | | | | | |
Thomas J. Allison (71) | | | Director | | | Class I director since 2013; term expires 2025 | | | Principal of Thomas J. Allison & Associates
Senior Advisor of Portage Point Partners
| | | 2 | | | Monroe Capital Income Plus Corporation
MCAP Acquisition Corporation
Katy Industries
| |
Robert S. Rubin (66) | | | Director | | | Class I director since 2012; term expires 2025 | | | Managing Principal of the Diamond Group
President of REAL Training Systems LLC
| | | 1 | | | None. | |
(1)
The address for each of Messrs. Allison and Rubin is c/o 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606.
Independent Directors
Thomas J. Allison has served onWhen considering whether our directors have the experience, qualifications, attributes and skills, taken as a whole, to enable our Board of Directors and as our audit committee chairperson since April 2013. Mr. Allison has served as Principal of Thomas J. Allison & Associates, a senior management services firm, since 2013, and as Senior Advisor of Portage Point Partners, an interim management and business advisory firm, since May 2018. Mr. Allison has served as a director of Monroe Capital Income Plus
Corporation, a business development company, since April 2022 and as a director of MCAP Acquisition Corporation from March 2021 to December 2021. Mr. Allison has served as Chairman of Phoenixus AG, a pharmaceutical company, since August 2022. Mr. Allison has been an Independent Director of Grupo HIMA, the second largest healthcare systemsatisfy its oversight responsibilities effectively in Puerto Rico, since 2021. Mr. Allison has been a director of Assertio Therapeutics, Inc. since 2020, where he chairs the Opioid Committee, has been an Independent Director of Virtus Pharmaceuticals LLC since 2022, and has been a member of Aarete Consulting’s Advisory Board since 2016. Mr. Allison served as a director of Katy Industries, a manufacturer of commercial cleaning solutions and consumer storage products from 2017 to 2020, a director of PTC Alliance Group Holdings, a global manufacturer of steel tubing from 2014 to 2020, a director of The NORDAM Group, Inc., an aerospace company from 2019 to 2020, a director of Novum Pharma from 2019 to 2020 and a director of CannaTrac Technology, a logistics company, from 2018 to 2020. From 2019 to 2020, Mr. Allison served as Chief Restructuring Officer of Inspirion Delivery Sciences, LLC, a specialty pharmaceutical company. From September 2018 to January 2019, Mr. Allison was a director of PGHC Holdings, Inc., a restaurant holding company. From 2006 until his retirement in 2012, Mr. Allison served as Executive Vice President and Senior Managing Director of Mesirow Financial Consulting, LLC, a full-service financial and operational advisory consulting firm headquartered in Chicago. At Mesirow, Mr. Allison managed complex turnaround situations and advised on major reorganizations and insolvencies. He also served as CEO, CFO or CRO for several clients. From 2002 to 2006, Mr. Allison served as National Practice Leader of the restructuring practice of Huron Consulting Group. From 1988 to 2002, he served in a variety of roles at Arthur Andersen, LLC, including Partner-in-Charge, Central Region Restructuring Practice. Earlier in his career, Mr. Allison served in various capacities at Coopers & Lybrand, an accounting firm, First National Bank of Chicago and the Chicago Police Department. Mr. Allison has previously served as Chairman of the Association for Certified Turnaround Professionals, Chairman and Director of the Turnaround Management Association, is a Fellow in the American College of Bankruptcy and has taught as a guest lecturer at Northwestern University and DePaul University. Mr. Allison received his bachelor of science in commerce and his master of business administration from DePaul University.
Robert S. Rubin has served on our Board of Directors since our initial public offering in October 2012 and is our compensation committee chairperson, a memberlight of our audit committeeoperational and a member of ourorganizational structure, the nominating and corporate governance committee. Mr. Rubin has been managing principalcommittee and the Board of Directors focused primarily on the information discussed in each of the Diamond Group, an investment group that operates various companiesdirector’s individual biographies set forth above and partnerships engaged in asset management and real estate investments, since 1998. Mr. Rubin is also founder of and has been President of REAL Training Systems LLC, a company that provides virtual training and education, since 2019. Mr. Rubin was formerly Vice Chairman of the board of Diamond Bancorp, Inc. in Chicago. From 1997 to 1998, Mr. Rubin founded and ran a boutique derivatives advisory firm called Prospect Park Capital Advisors, and from 1991 to 1997 co-founded and ran Horizon Advisors, a hedge fund and commodity trading advisor. From 1986 to 1991, Mr. Rubin worked at Nomura Securities in the Global Syndicate and New Products Department, where he co-founded and served on the board of Nomura Capital Services Inc., the first Japanese dealer in derivative products. From 1983 to 1986, Mr. Rubin worked at First National Bank of Chicago (now a part of JPMorgan Chase Bank, N.A.). Mr. Rubin currently serves on the board of ADI Negev, which supports facilities for developmentally disabled children and adults in Israel. Mr. Rubin received his bachelor of arts from Harvard College in 1978 and his master of business administration from the University of Chicago in 1986.following particular attributes:
Class III Directors (continuing directors not up for re-election at the Annual Meeting)
Name, Address and Age(1)
| | | Position(s) Held
with MRCC
| | | Term of
Office and
Length of
Time Served
| | | Principal
Occupation(s)
During Past 5 Years
| | | Number of
Portfolios
in Fund
Complex
Overseen by
Director/
Nominee
| | | Other Directorships Held by
Director/Nominee During
Past 5 Years
| |
Interested Directors | | | | | | | | | | | | | | | | |
Theodore L. Koenig (64) | | | Chief Executive Officer and Chairman of the Board(2) | | | Class III director since inception; term expires 2024 | | | Founder and Chief Executive Officer of Monroe Capital
Chief Executive Officer and Manager of MC Advisors
Chairman and Chief Executive Officer of MCAP Acquisition Corporation
Chairman and Chief Executive Officer of Monroe Capital Income Plus Corporation
| | | 2 | | | MCAP Acquisition Corporation
Monroe Capital Income Plus Corporation
| |
Jeffrey D. Steele (63) | | | Director(3) | | | Class III director since 2012; term expires 2024 | | | President — Specialized Industries of CIBC US | | | 1 | | | None. | |
(1)
The address for each of Messrs. Koenig and Steele is c/o 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606.
(2)
Mr. Koenig is an interested director because of his positions with the Company and/or MC Advisors.
(3)
Mr. Steele is an interested director because his employer is a participating lender in the Company’s credit facility.
Interested Directors
Theodore L. Koenig has served as our Chairman of the Board of Directors and Chief Executive Officer since our formation in February 2011 and as chairman of MC Advisors’ investment committee since our initial public offering in October 2012. Additionally, Mr. Koenig is the chief executive officer and a manager of MC Advisors. Since its formation in May 2018, Mr. Koenig has served as the chairman, director and chief executive officer of Monroe Capital Income Plus Corporation. From December 2020 to December 2021, Mr. Koenig served as the chief executive officer and chairman of MCAP Acquisition Corporation. Since founding Monroe Capital in 2004, Mr. Koenig has served continuously as its President and Chief Executive Officer. Prior to founding Monroe Capital, Mr. Koenig served as the President and Chief Executive Officer of Hilco Capital LP from 1999 to 2004, where he invested in distressed debt, junior secured debt and unsecured subordinated debt transactions. From 1986 to 1999, Mr. Koenig was a partner with the Chicago-based corporate law firm, Holleb & Coff. Mr. Koenig is a past President of the Indiana University Kelley School of Business Alumni Club of Chicago. He currently serves as director of the Commercial Finance Association and is a member of the Turnaround Management Association and the Association for Corporate Growth. Mr. Koenig also serves on the Dean’s Advisory Council, Kelley School of Business; on the Board of Overseers, Chicago-Kent School of Law; as Co-Chairman of Hope Chicago, a non-profit organization he co-founded in 2021 that funds post-secondary scholarships for Chicago students and their family members; and as Vice Chairman of the Board of Trustees of Allendale School, a non-profit residential and educational facility for emotionally troubled children in the greater Chicago area. He also holds a certification
as a Certified Public Accountant. Mr. Koenig received a bachelor of science in accounting, with high honors, from Indiana University and earned a juris doctor, with honors, from Chicago Kent College of Law.
Jeffrey D. Steele has served on our Board of Directors since our initial public offering in October 2012. Mr. Steele currently serves as President — Specialized Industries of CIBC US (formerly known as The Private Bank), a commercial bank headquartered in Chicago, where he has held various roles since 2007. Mr. Steele was a founding member of The Private Bank’s Transitional Management Team, and is currently a member on the bank’s Executive Committee and Loan Committee, where his responsibilities include operations, compliance, bank-wide performance and credit approval. From 1992 to 2007, Mr. Steele worked in various capacities at LaSalle Bank, N.A., including serving as Group Senior Vice President from 2001 to 2007. From 1982 to 1992, he served in a variety of roles at National Boulevard Bank of Chicago, including Vice President and Co-Head of Commercial Banking. Mr. Steele has previously served as a board member of the Better Government Association in Chicago and has taught as a guest lecturer at Indiana University Kelley School of Business and the University of Iowa Tippie College of Business. Mr. Steele received his bachelor of science in finance from Indiana University and completed a graduate program in banking management at the Stonier Graduate School of Banking.
Qualifications of Directors
When considering whether our directors have the experience, qualifications, attributes and skills, taken as a whole, to enable our Board of Directors to satisfy its oversight responsibilities effectively in light of our operational and organizational structure, the nominating and corporate governance committee and the Board of Directors focused primarily on the information discussed in each of the director’s individual biographies set forth above and on the following particular attributes:
Interested Directors
•
Mr. Koenig: The nominating and corporate governance committee and the Board of Directors considered his substantial experience implementing Monroe Capital’s investment strategy and investing in a variety of debt transactions, as well as his legal background, which provides our Board of Directors with valuable experience, insight and perspective.
•
Ms. Davidson: The nominating and corporate governance committee and the Board of Directors considered her significant experience in middle market private credit investing coupled with her deep knowledge of the capital markets, which provides our Board of Directors with valuable industry knowledge, expertise and insight.
•
Mr. Steele: The nominating and corporate governance committee and the Board of Directors considered his extensive middle-market commercial banking and corporate finance experience, which provide our Board of Directors with insight, perspective and industry knowledge.
Independent Directors
•
Mr. Allison: The nominating and corporate governance committee and the Board of Directors considered his extensive turnaround and restructuring experience, significant financial leadership and extensive corporate finance experience, which provide our Board of Directors with industry knowledge and practical insight.
•
Mr. Golman: The nominating and corporate governance committee and the Board of Directors considered his extensive capital markets and middle-market investment banking experience as well as his legal background, which provide our Board of Directors with valuable industry knowledge and analytical perspective.
•
Mr. Nathan: The nominating and corporate governance committee and the Board of Directors considered his significant capital markets and leveraged loan experience, which provides our Board of Directors with industry knowledge and practical insight.
•
Mr. Rubin: The nominating and corporate governance committee and the Board of Directors considered his extensive capital markets, risk management and business operating experience, which provide our Board of Directors with practical knowledge and valuable insight and perspective.
CORPORATE GOVERNANCE
Director Independence
The Board of Directors has a majority of directors who are independent under the listing standards of the Nasdaq Global Select Market, or Nasdaq. The Nasdaq Stock Market LLC Rules provide that a director of a business development company shall be considered to be independent if he or she is not an “interested person” of the Company, as defined in Section 2(a)(19) of the 1940 Act. Section 2(a)(19) of the 1940 Act defines an “interested person” to include, among other things, any person who has, or within the last two years had, a material business or professional relationship with the Company.
The Board of Directors has determined that the following directors are independent: Messrs. Allison, Golman (Nominee), Nathan (Nominee) and Rubin. Mr. Koenig and Ms. Davidson are “interested persons” due to their positions with the Company and/or MC Advisors, as discussed in their respective biographies. Mr. Steele is an “interested person” because his employer is a participating lender in the Company’s credit facility. Based upon independently verified information obtained from each director and the Class II director nominees concerning their background, employment and affiliations, the Board of Directors has affirmatively determined that none of the independent directors or the Class II independent director nominees has a material business or professional relationship with the Company, other than in his or her capacity as a member of the Board of Directors or any committee thereof.
Organization of the Board of Directors
The Board of Directors has established an audit committee, a nominating and corporate governance committee and a compensation committee. During 2022,2023, the Board of Directors held sixfive meetings, the audit committee held foursix meetings, and the nominating and corporate governance and compensation committees each held one meeting. Each of our directors attended at least 75% of the aggregate number of meetings of the Board of Directors and of the respective committees on which he or she served that was held during 2022 during the time he or she served, except for Mr. Koenig and Mr. Steele, who were each absent from two meetings of the Board of Directors.2023. The Company encourages, but does not require, the directors to attend the Company’s annual meeting of its stockholders. All of our current directors who served on the Board at the time of the 2023 Annual Meeting attended our 2022the 2023 Annual Meeting.
Board Leadership Structure
The Board of Directors monitors and performs an oversight role with respect to the business and affairs of the Company. Among other things, the Board of Directors approves the appointment of our investment advisor, administrator and officers, reviews and monitors the services and activities performed by our investment advisor, administrator and officers and approves the engagement, and reviews the performance of, the Company’s independent registered public accounting firm.
Under the bylaws, the Board of Directors may designate a chairperson to preside over the meetings of the Board of Directors and meetings of the stockholders and to perform such other duties as may be assigned to him or her by the Board of Directors. The Company does not have a fixed policy as to whether the chair of the Board of Directors should be an independent director and believes that its flexibility to select its chair and reorganize its leadership structure from time to time is in the best interests of the Company and its stockholders.
Presently, Mr. Koenig serves as the Chairman of the Board of Directors. Mr. Koenig is an interested director because he is the Chief Executive Officer of the Company, serves on MC Advisors’ investment committee and is a managerthe Chief Executive Officer of MC Advisors. The Company believes that Mr. Koenig’s history with the Company, familiarity with the Monroe Capital investment platform and extensive experience investing in and managing private equity and debt investments qualifies him to serve as Chairman of the Board of Directors. Moreover, our Board of Directors believes that it is in the best interests of our stockholders for Mr. Koenig to lead our Board of Directors because of his broad experience with the Monroe Capital platform, day-to-day management and operation of other investment funds and his significant background in the financial services industry, as described above.
Our Board of Directors does not have a lead independent director. However, Mr. Allison, the chairman of the audit committee, is an independent director and acts as a liaison between the independent directors and management between meetings of our Board of Directors. Our Board of Directors believes that its leadership structure is appropriate in light of the Company’s characteristics and circumstances because the structure allocates areas of responsibility among the individual directors and the committees in a manner that encourages effective oversight. The Board of Directors also believes that its size creates a highly efficient governance structure that provides ample opportunity for direct communication and interaction between MC Advisors and our Board of Directors.
Board Diversity
The following table summarizes certain self-identified characteristics of our directors, in accordance with Nasdaq Stock Market LLC Rules 5605(f) and 5606. Each term used in the table has the meaning given to it in the rule and related instructions.
Monroe Capital Corporation Board Diversity Matrix as of April 7, 2023 | | |
| Monroe Capital Corporation Board Diversity Matrix as of April 8, 2024 | | Monroe Capital Corporation Board Diversity Matrix as of April 8, 2024 |
Total Number of Directors | | 7 | | Total Number of Directors | 7 |
| | Female | | Male | | Non-Binary | | Did Not Disclose Gender | | |
| | | Female | | Male | | Non-Binary | | Did Not Disclose Gender |
Part I: Gender Identity | | | | | | | | | | | | | | | | | | | | | | Part I: Gender Identity | | | | | | | |
Directors | | | | 1 | | | | | 6 | | | | | — | | | | | — | | | Directors | 1 | | 6 | | — | | — |
Part II: Demographic Information | | | | | | | | | | | | | | | | | | | | | | Part II: Demographic Information | |
African American or Black | | | | — | | | | | — | | | | | — | | | | | — | | | African American or Black | — | | — | | — | | — |
Alaskan Native or Native American | | | | — | | | | | — | | | | | — | | | | | — | | | Alaskan Native or Native American | — | | — | | — | | — |
Asian | | | | — | | | | | — | | | | | — | | | | | — | | | Asian | — | | — | | — | | — |
Hispanic or Latinx | | | | — | | | | | — | | | | | — | | | | | — | | | Hispanic or Latinx | — | | — | | — | | — |
Native Hawaiian or Pacific Islander | | | | — | | | | | — | | | | | — | | | | | — | | | Native Hawaiian or Pacific Islander | — | | — | | — | | — |
White | | | | 1 | | | | | 6 | | | | | — | | | | | — | | | White | 1 | | 6 | | — | | — |
Two or More Races or Ethnicities | | | | — | | | | | — | | | | | — | | | | | — | | | Two or More Races or Ethnicities | — | | — | | — | | — |
LGBTQ+ | | — | | LGBTQ+ | | — | |
Did Not Disclose Demographic Background | | — | | Did Not Disclose Demographic Background | | — | |
Board Role in Risk Oversight
The Board of Directors performs its risk oversight function primarily through (a) its three standing committees, which report to the entire Board of Directors and are comprised solely of independent directors and (b) monitoring by the Company’s Chief Compliance Officer in accordance with its compliance policies and procedures.
As described below in more detail under “Audit Committee” and “Nominating and Corporate Governance Committee,” the audit committee and the nominating and corporate governance committee assist the Board of Directors in fulfilling its risk oversight responsibilities. The audit committee’s risk oversight responsibilities include overseeing the Company’s accounting and financial reporting processes, the Company’s systems of internal controls regarding finance and accounting and audits of the Company’s financial statements and discussing with management the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies. The nominating and corporate governance committee’s risk oversight responsibilities include selecting, researching and nominating directors for election by the Company’s stockholders, developing and recommending to the Board of Directors a set of corporate governance principles and overseeing the evaluation of the Board of Directors and its committees. Both the audit committee and the nominating and corporate governance committee consist solely of independent directors.
The Board of Directors also performs its risk oversight responsibilities with the assistance of the Chief Compliance Officer. The Company’s Chief Compliance Officer prepares a written report annually discussing
the adequacy and effectiveness of the compliance policies and procedures of the Company and certain of its service providers. The Chief Compliance Officer’s report, which is reviewed by the Board of Directors, addresses at a minimum: (a) the operation of the compliance policies and procedures of the Company and certain of its service providers since the last report; (b) any material changes to such policies and procedures since the last report; (c) any recommendations for material changes to such policies and procedures as a result of the Chief Compliance Officer’s annual review; and (d) any compliance matter that has occurred since the date of the last report about which the Board of Directors would reasonably need to know to oversee the Company’s compliance activities and risks. In addition, the Chief Compliance Officer meets separately in executive session with the independent directors periodically, but in no event less than once each year.
The Company believes that the role of the Board of Directors in risk oversight is effective and appropriate given the extensive regulation to which it is already subject as a business development company. Specifically, as a business development company, the Company must comply with certain regulatory requirements that control the levels of risk in its business and operations. For example, the Company’s ability to incur indebtedness is limited such that its asset coverage must equal at least 150% immediately after each time it incurs indebtedness and the Company generally has to invest at least 70% of its total assets in “qualifying assets.” In addition, the Company has elected to be treated as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code. As a RIC, the Company must, among other things, meet certain income source and asset diversification requirements.
The Company believes that the existing role of the Board of Directors in risk oversight is appropriate. However, the Company re-examines the manners in which the Board of Directors administers its oversight function on an ongoing basis to ensure that it continues to meet the Company’s needs.
Audit Committee
Thomas J. Allison, Jeffrey A. Golman and Robert S. Rubin serve as members of our audit committee. Mr. Allison serves as chairman of the audit committee. The members of the audit committee are independent directors, each of whom meets the independence standards established by the SEC and The Nasdaq Stock Market for audit committees and is independent for purposes of the 1940 Act. Our Board of Directors has determined that each of the members of our audit committee is an “audit committee financial expert” as that term is defined under Item 407 of Regulation S-K under the Exchange Act. The audit committee is responsible for approving our independent accountants, reviewing with our independent accountants the plans and results of the audit engagement, approving professional services provided by our independent accountants, reviewing the independence of our independent accountants and reviewing the adequacy of our internal accounting controls. The audit committee charter is available on our website at www.monroebdc.com.
Nominating and Corporate Governance Committee
The members of the nominating and corporate governance committee arefollowing the Annual Meeting will be Jeffrey A. Golman, Jorde M. Nathan and Robert S. Rubin and Thomas J. Allison, each of whom is independent for purposes of the 1940 Act and the Nasdaq corporate governance listing standards. Mr. Golman serves as chairman 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 charter is available on our website at www.monroebdc.com.
The nominating and corporate governance committee considers nominees to the Board of Directors recommended by a stockholder, if such stockholder complies with the advance notice provisions of our bylaws. Our bylaws provide that a stockholder who wishes to nominate a person for election as a director at a meeting of stockholders must deliver written notice to our corporate secretary. This notice must contain, as to each nominee, all of the information relating to such person as would be required to be disclosed in a proxy statement meeting the requirements of Regulation 14A under the Exchange Act, and certain other information set forth in the bylaws. In order to be eligible to be a nominee for election as a director by a stockholder, such potential nominee must deliver to our corporate secretary a written questionnaire providing the requested information about the background and qualifications of such person and a written representation and agreement that such person is not and will not become a party to any voting agreements,
any agreement or understanding with any person with respect to any compensation or indemnification in connection with service on the Board of Directors, and would be in compliance with all of our publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines.
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 corporate governance listing standards, the 1940 Act and the SEC, 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 individual’s experience, perspective, skills and knowledge of the industry in which the Company operates. The nominating and corporate governance committee has not adopted a formal policy with regard to the consideration of diversity in identifying individuals for election as members of the Board of Directors, but the nominating and corporate governance committee will consider such factors as it may deem are in the best interests of the Company and its stockholders. Such factors may include the individual’s professional experience, education, skills and other individual qualities or attributes.
Compensation Committee
The members of the compensation committee arefollowing the Annual Meeting will be Robert S. Rubin, Thomas J. Allison and Jorde M. Nathan,Jeffrey A. Golman, each of whom is independent for purposes of the 1940 Act and the Nasdaq corporate governance listing standards. Mr. Rubin serves as chairman of the compensation committee. However, our executive officers are paid by MC Advisors and do not receive any direct compensation from us. The investment advisory and management agreement, or the Investment Advisory Agreement, which provides for the compensation payable to MC Advisors, is separately approved by a majority of the independent directors in accordance with Nasdaq Stock Market LLC Rule 5605(d) and Section 15(c) of the 1940 Act. The compensation committee charter is available on our website at www.monroebdc.com.
Compensation Committee Interlocks and Insider Participation
No member of our Compensation Committee is or has been one of our officers or employees, and none has any relationships with us of the type that is required to be disclosed in this proxy statement under Item 407(e)(4) of Regulation S-K. None of our executive officers serves or has served as a member of the board of directors, compensation committee or other board committee performing equivalent functions of any entity that has any relationships with us of the type that is required to be disclosed in this proxy statement under Item 407(e)(4) of Regulation S-K.
Communications Between Stockholders and the Board of Directors
Stockholders with questions about Monroe Capital Corporation are encouraged to contact Lewis W. Solimene, Jr. at Monroe Capital Corporation, 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606. However, if stockholders feel their questions have not been addressed, they may communicate with our Board of Directors by sending their communications to: Monroe Capital Corporation, Board of Directors, c/o Lewis W. Solimene, Jr. at the address listed above. All stockholder communications received by the Company through one of the means described will be delivered to one or more members of the Board of Directors.
Information About Executive Officers Who are Not Directors
The following information pertains to the Company’s executive officer who is not a director of the Company:
| | | | | | | | | | | | | | |
Name, Address and Age(1) | | | Position(s) Held with MRCC | | | Principal Occupation(s) During Past 5 Years | |
Lewis W. Solimene, Jr. (63)(64) | | | Chief Financial Officer, Chief Investment Officer and Corporate Secretary | | | Managing Director and Portfolio Manager of Monroe Capital Chief Financial Officer, Chief Investment Officer, and Corporate Secretary of Monroe Capital Income Plus Corporation Managing Director and Head of Opportunistic Investments for Allstate Investments, LLC |
Kristan Gregory (42) | | Chief Compliance Officer | | Chief Compliance Officer, Monroe Capital
Chief Compliance Officer, Monroe Capital Income Plus Corporation
Chief Compliance Officer, Monroe Capital Management Advisors LLC
Chief Compliance Officer, Arena Investors, LP |
___________________________(1)
The address for each of Mr. Solimene and Ms. Gregory is c/o 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606.
Lewis W. Solimene, Jr. has served as our Chief Financial Officer, Chief Investment Officer and Corporate Secretary since June 2022. Mr. SolimeneHe has served as a Managing Director and Portfolio Manager of Monroe Capital LLC since July 2021 and hasalso served as Chief Financial Officer, Chief Investment Officer, and Corporate Secretary of Monroe Capital Income Plus Corporation since January 2022. Prior to joining Monroe Capital LLC,in July 2021, Mr. Solimene served as a Managing Director and Head of Opportunistic Investments for Allstate Investments, LLC, from 2016 to 2021, where he was responsible for managing a portfolio strategy that focusedfocuses on deploying debt and equity capital in dislocated markets, out-of-favor sectors and special situations.solutions. From 2007 to 2016, Mr. Solimene was a Senior Managing Director at Macquarie Capital, where he was head of the Restructuring and Special Situations Group. Mr. Solimene was also a Managing Director at Giuliani Capital Advisors LLC from 2004 to 2007, where he ran the Restructuring Advisory Practice. At Ernst & Young Corporate Finance LLC from 2000 to 2004, Mr. Solimene was a Managing Director specializing in providing strategic solutions for underperforming and over-leveraged companies. From 1981 to 2000, Mr. Solimene held a number of leadership roles at Bank of America (and its predecessor, Continental Illinois National Bank and Trust Company), including as a Managing Director in the Global Special Situation Group where he managed a proprietary capital portfolio of stressed and distressed bank debt, private placements, high-yield bonds and equities. Mr. Solimene served on the Board of Directors of Runway Growth Finance Corp. (NASDAQ:RWAY) from January 2017 until June 2022. In addition, Mr. Solimene currently serves on the boardsboard of directors of a number of privately held companiescompany and several non-profit organizations. Mr. Solimene received a B.S. in Finance from Western Illinois University and an M.B.A. from Thethe University of Chicago BoothGraduate School of Business.
Kristan Gregory has served as our Chief Compliance Officer since September 2022. Ms. Gregory has also served as the Chief Compliance Officer of Monroe Capital Income Plus Corporation and the Chief Compliance Officer of Monroe Capital Management Advisors LLC since September 2022. Prior to joining Monroe Capital in August 2022, Ms. Gregory was the Chief Compliance Officer at Arena Investors, LP, from 2019 to 2021, where she was responsible for the firm’s global compliance program. From 2016 to 2019, Ms. Gregory was a Senior Vice President at HPS Investment Partners, where she was responsible for the non-U.S. compliance program. From 2010 to 2016, Ms. Gregory was a Director at Bain Capital, where she was responsible for the non-U.S. compliance program. Ms. Gregory was a Senior Legal Product Specialist at Putnam Investments from 2004 to 2010 focusing on Investment Company Act compliance. Ms. Gregory earned her B.S. in Legal Studies, summa cum laude, from Suffolk University.
Hedging Transactions
The Joint Code of Ethics adopted by the Company and MC Advisors requires that directors, officers, general partners and certain other designated persons of the Company and MC Advisors receive clearance from the Company’s Chief Compliance Officer prior to buying or selling options on or futures or other derivatives related to, the Company’s common stock, or from selling short shares of the Company’s common stock.
Code of Ethics
The Company has adopted a code of ethics, or our Code of Business Conduct, that all officers, directors and employees of the Company and MC Advisors are expected to observe. The Board of Directors annually reviews our Code of Business Conduct. The Company’s Code of Business Conduct can be accessed via the Company’s website at www.monroebdc.com. The Company intends to disclose any amendments to or waivers of required provisions of the Code of Business Conduct on the Company’s website. We will provide any person, without charge, upon request, a copy of our Code of Business Conduct. To receive a copy, please provide a written request to: Monroe Capital Corporation, Attn: Chief Compliance Officer, 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606.
Clawback Policy
The Board of Directors has adopted a Clawback Policy that complies with Nasdaq’s clawback rules promulgated under Section 10D of the Exchange Act and the rules promulgated thereunder. If the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any such financial reporting requirement, the Board will require reimbursement or forfeiture of the Overpayment (as defined below) received by any covered executive from the Company during the three completed fiscal years immediately preceding the date on which the Company is required to prepare the restatement and any transition period (that results from a change in the Company’s fiscal year) within or immediately following those three completed fiscal years. Executives covered by the clawback policy are current and former executive officers, as determined by the Board in accordance with Section 10D of the Exchange Act, the rules promulgated thereunder, and the Nasdaq listing standards. Incentive-based compensation is defined as any compensation that is granted to, earned by, or received by, a covered executive, based wholly or in part upon the attainment of a financial reporting measure. The amount subject to recovery is the amount of incentive-based compensation received from the Company that is in excess of the amount of incentive-based compensation that otherwise would have been received from the Company had the incentive-based compensation been determined based on the restated financial statements, and must be computed without regard to any taxes paid (“Overpayment”). The Clawback Policy will only apply to incentive-based compensation received on or after the date the Clawback Policy was adopted by the Board of Directors.
COMPENSATION DISCUSSION AND ANALYSIS
Our executive officers do not receive any direct compensation from us. We do not currently have any employees and do not expect to have any employees. Our day-to-day investment operations are managed by MC Advisors. Services necessary for our business are provided by individuals who are employees of an affiliate of MC Advisors, pursuant to the terms of our Investment Advisory Agreement and our administration agreement. Each of our executive officers is an employee of an affiliate of MC Advisors. We reimburse MC Management, as administrator, for its allocable portion of expenses incurred by it in performing its obligations under the administration agreement, including its allocable portion of the cost of our officers and their respective staffs, and we reimburse MC Advisors for certain expenses under the Investment Advisory Agreement.
COMPENSATION COMMITTEE REPORT1(1)
The Compensation Committee of our Board of Directors has reviewed and discussed with management the information contained in the Compensation Discussion and Analysis section of this proxy statement and, based on their review and discussion, has recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement to be filed with the SEC.
February 22, 2023
19, 2024
The Compensation Committee
Robert S. Rubin
Thomas J. Allison
Jorde M. Nathan
1
____________________
(1)The material in this report is not “soliciting material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
20222023 DIRECTOR COMPENSATION TABLE
The following table shows information regarding the compensation received by our directors for the fiscal year ended December 31, 2022.2023. No compensation is paid by us to interested directors, other than to Mr. Steele, who is not an employee of us or MC Advisors.
| Name | | Fees Earned or Paid in Cash(1) | | Total | | Name | | Fees Earned or Paid in Cash by the Company(1) | | Total Compensation from the Company |
Independent Directors | | | | | | | | | | | | Independent Directors | | | | |
Thomas J. Allison | | | $ | 41,000 | | | | $ | 41,000 | | | Thomas J. Allison | | $ | 40,000 | | | $ | 40,000 | |
Jeffrey A. Golman | | | $ | 31,000 | | | | $ | 31,000 | | | Jeffrey A. Golman | | $ | 31,000 | | | $ | 31,000 | |
Jorde M. Nathan | | | $ | 26,000 | | | | $ | 26,000 | | | Jorde M. Nathan | | $ | 25,000 | | | $ | 25,000 | |
Robert S. Rubin | | | $ | 26,000 | | | | $ | 26,000 | | | Robert S. Rubin | | $ | 26,000 | | | $ | 26,000 | |
Interested Directors | | | | | | | | | | | | Interested Directors | |
Jeffrey D. Steele | | | $ | 24,000 | | | | $ | 24,000 | | | Jeffrey D. Steele | | $ | 24,000 | | | $ | 24,000 | |
Theodore L. Koenig | | | | None | | | | | None | | | Theodore L. Koenig | | None | | None |
Aaron D. Peck(2) | | | | None | | | | | None | | | |
Caroline B. Davidson(3) | | | | None | | | | | None | | | | None | | None |
____________________(1)
For a discussion of compensation paid to directors, see below.
(2)
Mr. Peck resigned asFor 2023, each independent director and each interested director who is not an employee of MC Advisors or any of its affiliates, received an annual retainer of $20,000 for serving on the Board of Directors and a director effective June 30, 2022.
(3)
Ms. Davidson was appointed as a director effective June 30, 2022.
Each$1,000 fee for each meeting attended. Effective January 1, 2024, each independent director and each interested director who is not an employee of MC Advisors or any of its affiliates, receives an annual retainer of $20,000$50,000 for serving on the Board of Directors and a $1,000 fee for each meeting attended. TheFor both 2023 and 2024, the chair of our audit committee receives a $15,000 annual retainer and the chair of our nominating and corporate governance committee receives a $5,000 annual retainer. Mr. Steele, who is not an employee of us, MC Advisors or its affiliates, is the only interested director that currently receives director compensation. “Interested Directors” that are employees of MC Advisors or its affiliates do not receive additional compensation for service as a member of our Board of Directors. We also reimburse each of the above directors for all reasonable and authorized business expenses in accordance with our policies as in effect from time-to-time.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
We have entered into agreements with MC Advisors, in which our senior management and members of MC Advisors’ investment committee have ownership and financial interests. Members of our senior management and members of the investment committee also serve as principals of other investment managers affiliated with MC Advisors that do, and may in the future, manage investment funds, accounts or other investment vehicles with investment objectives similar to ours. Our senior management team holds equity interests in MC Advisors. In addition, our executive officers and directors and the principals of MC Advisors and members of the investment committee serve or may serve as officers, directors or principals of entities that operate in the same, or related, line of business as we do or of investment funds, accounts or other investment vehicles managed by our affiliates. These investment funds, accounts or other investment vehicles may have investment objectives similar to our investment objectives.
We may compete with other entities managed by MC Advisors and its affiliates for capital and investment opportunities. As a result, we may not be given the opportunity to participate in certain investments made by investment funds, accounts or other investment vehicles managed by MC Advisors or its affiliates or by members of the investment committee. However, in order to fulfill its fiduciary duties to each of its clients, MC Advisors intends to allocate investment opportunities in a manner that is fair and equitable over time and is consistent with MC Advisors’ allocation policy so that we are not disadvantaged in relation to any other client. MC Advisors has agreed with our Board of Directors that allocations among us and other investment funds affiliated with MC Advisors will be made based on capital available for investment in the asset class being allocated. We expect that our available capital for investments will be determined based on the amount of cash on hand, existing commitments and reserves, if any, and the targeted leverage level and targeted asset mix and diversification requirements and other investment policies and restrictions set by our Board of Directors or as imposed by applicable laws, rules, regulations or interpretations.
Affiliates of MC Advisors manage other assets in 1213 closed-end funds, two small business investment companies and 2025 private funds that also have an investment strategy focused primarily on senior secured, unitranche secured and junior secured debt and to a lesser extent, unsecured subordinated debt to lower middle-market companies.companies and one BDC which focuses on similar investment types, but which may be backed by venture capital and private equity investors. In addition, MC Advisors manages a private BDC, Monroe Capital Income Plus Corporation, and it may manage other entities in the future with an investment focus similar to ours. To the extent that we compete with entities managed by MC Advisors or any of its affiliates for a particular investment opportunity, MC Advisors will allocate investment opportunities across the entities for which such opportunities are appropriate, consistent with (a) its internal conflict of interest and allocation policies, (b) the requirements of the Investment Advisers Act of 1940, as amended, and (c) certain restrictions under the 1940 Act and rules thereunder regarding co-investments with affiliates. MC Advisors’ allocation policies are intended to ensure that we may generally share equitably with other investment funds or other investment vehicles managed by MC Advisors or its affiliates in investment opportunities, particularly those involving a security with limited supply or involving differing classes of securities of the same issuer which may be suitable for us and such other investment funds or other investment vehicles.
MC Advisors and/or its affiliates may in the future sponsor or manage investment funds, accounts or other investment vehicles with similar or overlapping investment strategies and have put in place a conflict-resolution policy that addresses the co-investment restrictions set forth under the 1940 Act. We have in the past and expect in the future to co-invest on a concurrent basis with other affiliates, unless doing so is impermissible with existing regulatory guidance, applicable regulations, the terms of any exemptive relief granted to us and our allocation procedures. MC Advisors will seek to ensure an equitable allocation of investment opportunities when we are able to invest alongside other accounts managed by MC Advisors and its affiliates. Certain types of negotiated co-investments may be made only if we receive an order from the SEC permitting us to do so. We received exemptive relief from the SEC on October 15, 2014, as amended on January 10, 2023, that permits greater flexibility relating to co-investments, subject to certain conditions. On September 26, 2022, we filed a further application for co-investment exemptive relief with the SEC to better align our existing co-investment relief with more recent SEC exemptive orders. On January 10, 2023, the SEC granted the new order in response to our application. When we invest alongside such other accounts as permitted under the 1940 Act, pursuant to SEC staff interpretations, or our exemptive relief from the SEC that permits greater flexibility relating to co-investments, such investments are made consistent with such relief and MC Advisors’ allocation policy. Under this allocation policy, a fixed percentage of each opportunity, which may vary based on asset
class and from time to time, will be offered to us and similar eligible accounts, as periodically determined by MC Advisors and approved by our Board of Directors, including a majority of our independent directors. The allocation policy provides that allocations among us and other accounts will generally be made pro rata based on each account’s capital available for investment, as determined, in our case, by our Board of Directors, including a majority of our independent directors. It is our policy to base our determinations as to the amount of capital available for investment on such factors as the amount of cash on hand, existing commitments and reserves, if any, the targeted leverage level, the targeted asset mix and diversification requirements and other investment policies and restrictions set by our Board of Directors, or imposed by applicable laws, rules, regulations or interpretations.
We expect that these determinations will be made similarly for other accounts. In situations where co-investment with other entities sponsored or managed by MC Advisors or its affiliates is not permitted or appropriate, such as when there is an opportunity to invest in different securities of the same issuer, MC Advisors will need to decide whether we or such other entity or entities will proceed with the investment. MC Advisors will make these determinations based on its policies and procedures which will generally require that such opportunities be offered to eligible accounts on a basis that is fair and equitable over time.
Our senior management, members of MC Advisors’ investment committee and other investment professionals from MC Advisors may serve as directors of, or in a similar capacity with, companies in which we invest or in which we are considering making an investment. Through these and other relationships with a company, these individuals may obtain material nonpublic information that might restrict our ability to buy or sell the securities of such company under the policies of the company or applicable law.
We have entered into an Investment Advisory Agreement with MC Advisors, under which MC Advisors, subject to the overall supervision of the Board of Directors, provides investment advisory services to us. We pay MC Advisors a fee for its services under the Investment Advisory Agreement consisting of two components — a base management fee and an incentive fee.
The base management fee is calculated initially at an annual rate equal to 1.75% of average invested assets (calculated as total assets excluding cash, which includes assets financed using leverage); provided, however, the base management fee is calculated at an annual rate equal to 1.00% of our average invested assets (calculated as total assets excluding cash, which includes assets financed using leverage) that exceeds the product of (i) 200% and (ii) our average net assets. This has the effect of reducing our base management fee rate on assets in excess of regulatory leverage of 1:1 debt to equity to 1.00% per annum. For example, if total assets (including cash of $20.0 million) are $500.0 million and total liabilities are $300.0 million, then net assets are $200.0 million. The excess of these assets over $400.0 million (the product of 200% times $200.0 million of net assets) is $80.0 million, which will be charged the reduced annual management fee rate of 1.00%. The remaining invested assets of $400.0 million (calculated as $500.0 million total assets, less cash of $20.0 million and less $80.0 million of assets charged management fees at the reduced annual management fee rate of 1.00%) will be charged management fees at an annual rate of 1.75%. The base management fee is payable quarterly in arrears.
The incentive fee consists of two parts. The first part is calculated and payable quarterly in arrears and equals 20% of “pre-incentive fee net investment income” for the immediately preceding quarter, subject to a 2% (8% annualized) preferred return, or “hurdle,” and a “catch up” feature. The foregoing incentive fee is subject to a total return requirement, which provides that no incentive fee in respect of our pre-incentive fee net investment income will be payable except to the extent 20% of the cumulative net increase in net assets resulting from operations over the then-current and 11 preceding quarters exceeds the cumulative incentive fees accrued and/or paid for the 11 preceding quarters (the “Incentive Fee Limitation”). Therefore, any ordinary income incentive fee that is payable in a calendar quarter will be limited to the lesser of (i) 20% of the amount by which pre-incentive fee net investment income for such calendar quarter exceeds the 2% hurdle, subject to the “catch-up” provision, and (ii) (x) 20% of the cumulative net increase in net assets resulting from operations for the then current and 11 preceding calendar quarters minus (y) the cumulative incentive fees accrued and/or paid for the 11 preceding calendar quarters. For the foregoing purpose, the “cumulative net increase in net assets resulting from operations” is the amount, if positive, of the sum of our pre-incentive fee net investment income, base management fees, realized gains and losses and unrealized gains and losses for the then-current and 11 preceding quarters.
The second part of the incentive fee is a capital gains incentive fee that is determined and payable in arrears as of the end of each fiscal year in an amount equal to 20% of realized capital gains, if any, on a cumulative basis from inception through the end of the year, computed net of all realized capital losses on a cumulative basis and unrealized depreciation, less the aggregate amount of any previously paid capital gain incentive fees.
The incentive fee is computed and paid on income that we may not have yet received in cash. This fee structure may create an incentive for MC Advisors to invest in certain types of securities that may have a high degree of risk. For the year ended December 31, 2022,2023, we paid MC Advisors a base management fee, net of base management fee waivers, of approximately $9.0$8.6 million and incentive fees, net of incentive fee waivers, of approximately $3.6$5.8 million. Incentive fees during the year ended December 31, 20222023 were not reduced due to the Incentive Fee Limitation described above. During the year ended December 31, 2022,2023, we did not accrue any capital gains incentive fees. The address of MC Advisors is 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606.
Additionally, we rely on investment professionals from MC Advisors to assist our Board of Directors with oversight of the process used to determine the fair value of our portfolio investments. MC Advisors’ management fee and incentive fee are based on the value of our investments and there may be a conflict of interest when personnel of MC Advisors are involved in the valuation process for our portfolio investments.
We have entered into an administration agreement, pursuant to which Monroe Capital Management Advisors, LLC, or MC Management, furnishes us with office facilities and equipment and provides us clerical, bookkeeping, recordkeeping and other administrative services at such facilities. Under our administration agreement, MC Management performs, or oversees the performance of, our required administrative services, which include, among other things, being responsible for the financial records that we are required to maintain and preparing reports to our stockholders and reports filed with the SEC. For the year ended December 31, 2022, $1.22023, $0.9 million of expenses were reimbursed to MC Management under our administration agreement. The address of MC Management is 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606.
MRCC Senior Loan Fund I, LLC, or SLF, an unconsolidated entity in which we co-invest with Life Insurance Company of the Southwest primarily in senior secured loans, has entered into an administration agreement with MC Management, pursuant to which MC Management provides SLF with certain loan servicing and administrative functions. SLF may reimburse MC Management for its allocable share of overhead and other expenses incurred by MC Management. For the year ended December 31, 2022,2023, SLF incurred $0.2 million of allocable expenses under the administration agreement between SLF and MC Management.
We have entered into a license agreement with Monroe Capital LLC under which Monroe Capital LLC has agreed to grant us a non-exclusive, royalty-free license to use the name “Monroe Capital” for specified purposes in our business. Under this agreement, we have a right to use the “Monroe Capital” name, subject to certain conditions, for so long as MC Advisors or one of its affiliates remains our investment advisor. Other than with respect to this limited license, we have no legal right to the “Monroe Capital” name.
Pursuant to its charter, our audit committee is responsible for reviewing with both management and the Company’s independent accountants, as appropriate, all related party transactions or dealings with parties related to the Company.