Exhibit 10.3

 

MAIN STREET CAPITAL CORPORATION

DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS

 

1.                                      Purpose and Effective Date.  The purpose
of this Plan is to provide the non-employee members of the Board of Directors of
the Company with an opportunity to defer payment of all or a portion of their
annual retainer.  The Plan shall be effective as of June 3, 2013.

 

2.                                      Definitions. The following terms shall
have the meanings given in this section unless a different meaning is clearly
implied by the context:

 

(a)                                 “Board” means the board of directors of Main
Street Capital Corporation.

 

(b)                                 “Company” means Main Street Capital
Corporation.

 

(c)                                  “Deferred Compensation Account” means an
account maintained for each director who makes a deferral election as described
in Section 4.

 

(d)                                 “Fair Market Value” means the greater of
(i) the closing price of the common stock of the Company on the trading day
preceding the date the retainer or hypothetical dividend, as applicable, would
otherwise be payable, as reported on the New York Stock Exchange - Composite
Transactions or on such other exchange on which the Company’s common stock is
traded and (ii) the most recently determined net asset value of the common stock
of the Company immediately prior to or on each such applicable trading day.

 

(e)                                  “Plan” means the Main Street Capital
Corporation Deferred Compensation Plan for Non-Employee Directors.

 

(f)                                   “Plan Administrator” means the Corporate
Secretary of the Company or his or her designee.

 

(g)                                  “Retainer” means the annual cash retainer
receivable for service as a director of the Company, but not lead director
retainers, chairperson retainers, meeting fees, or any other compensation or
expense reimbursement.

 

3.                                      Eligibility.  All members of the Board
who are not employees of the Company or any subsidiary or affiliate of the
Company shall be eligible to participate in the Plan.

 

4.                                      Election to Defer Retainer.

 

(a)                                 Manner and Amount of Deferral Election.  A
participant may elect to defer receipt of all or a specified portion of the
Retainer by giving written notice on an election form provided by the Plan
Administrator specifying the amount of the deferral.  The amount of the deferral
shall be $25,000, $50,000, $75,000, $100,000, or 100% of the Retainer, or such
other amounts or percentages permitted by the Plan Administrator and specified
on the election form.

 

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(b)                             Time of Election.  Elections to defer the
Retainer shall be made at the following times:

 

(i)                                     A sitting director may elect to defer
the Retainer, or change or discontinue a prior election to defer the Retainer,
at such time or times during the calendar year as permitted by the Plan
Administrator.  Such election shall be effective for Retainers paid in the
following calendar year and thereafter.

 

(ii)                                  A nominee for election to director (who is
not at the time of nomination a sitting director and was not previously eligible
to participate in this Plan) may elect to defer the Retainer any time prior to
election to the Board and prior to commencing service as a director.  Such
deferral election shall be effective for Retainers paid on and following the
director’s commencement of services as a director.

 

(iii)                               A sitting director who is a director as of
the date of adoption of the Plan may elect to defer the Retainer no later than
June 12, 2013.  Such deferral election shall be effective for Retainers paid on
and following June 13, 2013.

 

(c)                                  Change in, or Discontinuance of, Deferral
Election.  Unless changed or discontinued in accordance with Section 4(b)(i), a
deferral election shall continue in effect with respect to each Retainer paid
until the end of the participant’s service as a director.

 

5.                                      Deferred Compensation Accounts.  The
Company shall establish on its books and records a Deferred Compensation Account
for each participant, as provided below.

 

(a)                                 A deferred Retainer shall be credited to the
participant’s Deferred Compensation Account.  The Company shall credit to the
Deferred Compensation Account that number of phantom stock units that is equal
to the number of whole and fractional shares of common stock of the Company that
could be purchased at Fair Market Value with an amount equal to such deferral.

 

(b)                                 The phantom stock units held in a
participant’s Deferred Compensation Account shall be credited with hypothetical
dividends.  Hypothetical dividends are an amount equal to dividends actually
paid, from time to time, on shares of the Company’s common stock, determined as
if the number of phantom stock units credited to the participant’s Deferred
Compensation Account were actual shares of common stock on the record date of
such dividend. Hypothetical dividends will be treated as if they had been used
to purchase at Fair Market Value the number of whole and fractional phantom
stock units that could be purchased with an amount equal to such hypothetical
dividends.

 

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6.                                      Payment of Deferred Compensation.

 

(a)                                 Time and Manner of Payment.  A participant’s
Deferred Compensation Account under the Plan shall be distributed in a lump sum
within 90 days of the participant’s separation from service (within the meaning
of section 409A of the Internal Revenue Code) with the Company.  In the event of
a participant’s death prior to separation from service, the Deferred
Compensation Account shall be distributed to the participant’s estate in a lump
sum within 90 days of the date of death, provided, however, that if the Plan
Administrator permits the designation of a beneficiary under the Plan, then the
Deferred Compensation Account shall be distributed to such beneficiary or, if
none, to the participant’s estate in a lump sum within 90 days of the date of
death.

 

(b)                                 Medium of Payment.  Payments from the
Deferred Compensation Account shall be made in whole shares of the Company’s
common stock for each whole phantom stock unit, and in cash for any fractional
phantom stock unit.  Shares of the Company’s common stock paid to directors
under the Plan shall be paid with newly issued shares or shares purchased by the
Company on the New York Stock Exchange or on such other exchange on which the
Company’s common stock is traded.

 

7.                                      Unfunded Promise to Pay; No Segregation
of Funds or Assets.  Nothing in this Plan shall require the segregation of any
assets of the Company or any type of funding by the Company, it being the
intention of the parties that the Plan be an unfunded arrangement for federal
income tax purposes.  No participant shall have any rights to or interest in any
specific assets or shares of common stock of the Company by reason of the Plan,
and any participant’s rights to enforce payment of the obligations of the
Company hereunder shall be those of a general creditor of the Company.

 

8.                                      Restricted Securities.  The shares of
the Company’s common stock paid to directors under the Plan, whether newly
issued shares or previously issued shares acquired by the Company, will be
deemed to be “restricted securities” within the meaning of Rule 144 under the
Securities Act of 1933.  Accordingly, such shares must be resold in compliance
with the registration requirements of the Securities Act of 1933 or an exemption
therefrom.

 

9.                                      Nonassignability.  The right of a
participant to receive any unpaid portion of the participant’s Deferred
Compensation Account shall not be assigned, transferred, pledged or encumbered
or subjected in any manner to alienation or anticipation.

 

10.                               Administration.  This Plan shall be
administered by the Plan Administrator, who shall have the authority to adopt
rules and regulations for carrying out the Plan and to interpret, construe and
implement the provisions thereof.  The Plan Administrator’s interpretation of
the Plan shall be final and binding on all parties.  In the event of any stock
split, reverse stock split, merger, reorganization, extraordinary dividend or
other similar transaction or event affecting the common stock of the Company,
the Plan Administrator is authorized to make appropriate adjustments to
participants’ Deferred Compensation Accounts to reflect such transactions or
events.

 

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11.                               Construction.  The Plan is intended to comply
with Internal Revenue Code Section 409A and any regulations and guidance
thereunder and shall be interpreted and operated in accordance with such
intent.  The laws of the state of Texas shall govern all questions of law
arising with respect to the Plan, without regard to the choice of law principles
of any jurisdiction, except where the laws governing the Plan are preempted by
the laws of the United States.  The Plan is intended to be construed so that
participation in the Plan will be exempt from Section 16(b) of the Exchange Act
pursuant to regulations and interpretations issued from time to time by the
Securities and Exchange Commission.  If any provision of the Plan is held to be
illegal or void, such illegality or invalidity shall not affect the remaining
provisions of the Plan, but shall be fully severable, and the Plan shall be
construed and enforced as if the illegal or invalid provision had never been
inserted.  This document constitutes the entire Plan, and supersedes any prior
oral or written agreements on the subject matter hereof.

 

12.                               Amendment and Termination.  The Board is
authorized to make any amendments and modifications to the Plan at any time, and
the Plan Administrator is authorized to make amendments and modifications to the
Plan that he or she deems necessary for ease of administration and for carrying
out the purpose of the Plan.  The Board may terminate the Plan and distribute
the Deferred Compensation Accounts to participants in accordance with and
subject to the rules of Treas. Reg. §1.409A-3(j)(4)(ix), or successor
provisions, and any generally applicable guidance issued by the Internal Revenue
Service permitting such termination and distribution.  Notwithstanding the
foregoing, no such amendment, modification, or termination shall, without the
consent of a participant, adversely affect the amounts theretofore accrued in
the participant’s Deferred Compensation Account.

 

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