EXHIBIT 10.1
DIVIDEND REINVESTMENT PLAN
OF
PATRIOT CAPITAL FUNDING, INC.
     Patriot Capital Funding, Inc., a Delaware corporation (the “Corporation”),
hereby adopts the following plan (the “Plan”) with respect to dividends and
distributions declared by its Board of Directors on shares of its Common Stock:
     1. Unless a stockholder specifically elects to receive cash as set forth
below, all dividends and all distributions hereafter declared by the Board of
Directors shall be payable in shares of the Common Stock of the Corporation, and
no action shall be required on such stockholder’s part to receive a dividend or
a distribution in stock.
     2. Such dividends and distributions shall be payable on such date or dates
as may be fixed from time to time by the Board of Directors to stockholders of
record at the close of business on the record date for the dividend and/or
distribution involved.
     3. The Corporation shall use primarily newly-issued shares of its Common
Stock to implement the Plan, whether its shares are trading at a premium or at a
discount to net asset value. However, the Corporation reserves the right to
purchase shares in the open market in connection with the implementation of the
Plan. The number of newly-issued shares to be issued to a stockholder shall be
determined by dividing the total dollar amount of the distribution payable to
such stockholder by the market price per share of the Corporation’s Common Stock
at the close of regular trading on the principal national securities exchange
for the shares on the valuation date fixed by the Board of Directors for such
dividend or distribution. Market price per share on that date shall be the
closing price for such shares on such principal national securities exchange or,
if no sale is reported for such day, at the average of their reported bid and
asked prices. Shares purchased in open market transactions by the Plan
Administrator shall be allocated to each Participant (as defined below) based
upon the average purchase price, excluding any brokerage charges or other
charges, of all shares of Common Stock purchased with respect to the applicable
dividend and/or distribution.
     4. A stockholder may, however, elect to receive his, her or its dividends
and distributions in cash. To exercise this option, such stockholder shall
notify American Stock Transfer & Trust Company, the plan administrator and the
Corporation’s transfer agent and registrar (collectively the “Plan
Administrator”), in writing so that such notice is received by the Plan
Administrator no later than the record date fixed by the Board of Directors for
the dividend and/or distribution involved.
     5. The Plan Administrator will set up an account for shares acquired
pursuant to the Plan for each stockholder who has not so elected to receive
dividends and distributions in cash (each a “Participant”). The Plan
Administrator may hold each Participant’s shares, together with the shares of
other Participants, in non-certificated form in the Plan Administrator’s name or
that of its nominee. Upon request by a Participant, received in writing no later
than 10 days prior to the record date, the Plan Administrator will, instead of
crediting shares to and/or carrying shares in a Participant’s account, issue,
without charge to the Participant, a certificate registered in the Participant’s
name for the number of whole shares payable to the Participant and a check for
any fractional share.
     6. The Plan Administrator will confirm to each Participant each acquisition
made pursuant to the Plan as soon as practicable but not later than 10 business
days after the date thereof. Although each Participant may from time to time
have an undivided fractional interest (computed to three decimal places) in a
share of Common Stock of the Corporation, no certificates for a fractional share
will be issued. However, dividends and distributions on fractional shares will
be credited to each Participant’s account. In the event of termination of a
Participant’s account under the Plan, the Plan Administrator will adjust for any
such undivided fractional interest in cash at the market value of the
Corporation’s shares at the time of termination.
     7. The Plan Administrator will forward to each Participant any Corporation
related proxy solicitation materials and each Corporation report or other
communication to stockholders, and will vote any shares held by it under the
Plan in accordance with the instructions set forth on proxies returned by
Participants to the Corporation.
     8. In the event that the Corporation makes available to its stockholders
rights to purchase additional shares or other securities, the shares held by the
Plan Administrator for each Participant under the Plan will be added to any
other shares held by the Participant in certificated form in calculating the
number of rights to be issued to the Participant.

 

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     9. The Plan Administrator’s service fee, if any, and expenses for
administering the Plan will be paid for by the Corporation.
     10. Each Participant may terminate his, her or its account under the Plan
by so notifying the Plan Administrator via the Plan Administrator’s website at
www.amstock.com, by filling out the transaction request form located at the
bottom of the Participant’s Plan statement and sending it to American Stock
Transfer & Trust Company, P.O. Box 922, Wall Street Station, New York, NY
10269-0560 or by calling the Plan Administrator’s Interactive Voice Response
System at 1-877-366-6442. Such termination will be effective immediately if the
Participant’s notice is received by the Plan Administrator at least 2 days prior
to any dividend or distribution record date; otherwise, such termination will be
effective only with respect to any subsequent dividend or distribution. The Plan
may be terminated by the Corporation upon notice in writing mailed to each
Participant at least 30 days prior to any record date for the payment of any
dividend or distribution by the Corporation. Upon any termination, the Plan
Administrator will cause a certificate or certificates to be issued for the full
shares held for the Participant under the Plan and a cash adjustment for any
fractional share to be delivered to the Participant without charge to the
Participant. If a Participant elects by his, her or its written notice to the
Plan Administrator in advance of termination to have the Plan Administrator sell
part or all of his, her or its shares and remit the proceeds to the Participant,
the Plan Administrator is authorized to deduct a $15 transaction fee plus a
$0.10 per share brokerage commission from the proceeds.
     11. These terms and conditions may be amended or supplemented by the
Corporation at any time but, except when necessary or appropriate to comply with
applicable law or the rules or policies of the Securities and Exchange
Commission or any other regulatory authority, only by mailing to each
Participant appropriate written notice at least 30 days prior to the effective
date thereof. The amendment or supplement shall be deemed to be accepted by each
Participant unless, prior to the effective date thereof, the Plan Administrator
receives written notice of the termination of his, her or its account under the
Plan. Any such amendment may include an appointment by the Plan Administrator in
its place and stead of a successor agent under these terms and conditions, with
full power and authority to perform all or any of the acts to be performed by
the Plan Administrator under these terms and conditions. Upon any such
appointment of any agent for the purpose of receiving dividends and
distributions, the Corporation will be authorized to pay to such successor
agent, for each Participant’s account, all dividends and distributions payable
on shares of the Corporation held in the Participant’s name or under the Plan
for retention or application by such successor agent as provided in these terms
and conditions.
     12. The Plan Administrator will at all times act in good faith and use its
best efforts within reasonable limits to ensure its full and timely performance
of all services to be performed by it under this Plan and to comply with
applicable law, but assumes no responsibility and shall not be liable for loss
or damage due to errors unless such error is caused by the Plan Administrator’s
negligence, bad faith, or willful misconduct or that of its employees or agents.
     13. These terms and conditions shall be governed by the laws of the State
of New York.
February 27, 2008