Document:

Exhibit 4.7

 

 

 

TORM plc

 2017 MANAGEMENT LONG-TERM INCENTIVE PLAN

Section 1.          Purpose.

Section 1.1          TORM plc, company registration number 09818726 ("TORM), an English company has adopted this management incentive plan (the "Plan") to increase shareholder value and to advance the interests of TORM and its subsidiaries by providing share-based or cash-based economic incentives (the "Incentives") designed to attract, retain, reward, and motivate key employees of TORM and its subsidiaries and to strengthen the mutuality of interests between those service providers and TORM's shareholders.

Section 1.2          Under the Plan, Incentives consist of opportunities (a) to purchase or receive A Shares of a nominal value of US$ 0.01 of TORM (the "A Shares") or Depositary Interests, (b) to earn cash awards valued in relation to A Shares, or (c) to earn other cash-based performance awards, in each case on terms determined under the Plan.

Section 2.          Certain Definitions.

Section 2.1          As used herein, the following words or terms shall have the meanings below:

(a)          "Adoption Date" shall mean the date of the Committee's adoption of the Plan.

(b)          "Affiliate" (and variants thereof) shall mean a Person that controls, or is controlled by, or is under common control with, another specified Person, either directly or indirectly.

(c)          "Beneficial Owner" (and variants thereof), with respect to a security, shall mean a Person who, directly or indirectly (through any contract, understanding, relationship or otherwise), has or shares (i) the power to vote, or direct the voting of, the security, and/or (ii) the power to dispose of, or to direct the disposition of, the security or the traded interest in that security.

(d)          "Business Reorganisation" shall mean the consummation of a reorganization, merger or consolidation (including a merger or consolidation of TORM or any direct or indirect subsidiary thereof), or sale or other disposition of all or substantially all of the assets, of the Group.

(e)          "Change of Control" has the meaning given to it in Section 12.

(f)          "Change of Control Value" shall equal the amount determined by whichever of the following items is applicable:

(i)          the price per share to be paid to TORM's shareholders in the relevant transaction;

(ii)          the price per share offered to TORM's shareholders in any tender offer or exchange offer whereby a Change of Control takes place;

(iii)          in all other events, the Fair Market Value (as defined in Section 13.8) per A Share, as determined by the Committee as of the date determined by the Committee to be the date of conversion of such options or exercise of instruments; or

(iv)          in the event that the consideration offered to TORM's shareholders in any Change of Control transaction consists of anything other than cash, the Committee shall determine the fair cash equivalent of the portion of the consideration offered that is other than cash.

(g)          "Committee" has the meaning given to it in Section 3.1.

(h)          "Depositary" means Computershare DR Nominees Limited, as nominee for Computershare Trustees (Jersey) Limited or another depositary approved by the Committee that will act as depositary for the purposes of holding A Shares and allowing Depositary Interests to be held by Persons and, if either (i) the relevant A Shares are not subject to transfer restrictions or (ii) on cessation of all transfer restrictions applicable to A Shares represented by such Depositary Interests (or, if earlier, when the relevant A Shares are covered by an effective registration statement filed with the U.S. Securities and Exchange Commission or on the sale of the relevant A Shares pursuant to an exemption from applicable transfer restrictions), Cede & Co. as nominee for the Depositary Trust Corporation ("DTC").

(i)          "control" (and variants thereof) shall mean, with respect to any Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.  A general partner, manager or adviser is deemed to control a limited partnership.

(j)          "Depositary Interests" means either depositary receipts in respect of A Shares issued by Computershare Trustees (Jersey) Limited or book entry interests in A Shares allocated by DTC as the context requires (and, for the avoidance of doubt, excludes CREST depository interests).

(k)          "Fair Market Value" has the meaning given in Section 13.8.

(l)          "Immediate Family Members" of a Plan participant shall be defined as the spouse and natural or adopted children or grandchildren of the participant and their spouses.

(m)          "Person" shall mean a natural person or company, and shall also mean the group or syndicate created when two or more Persons act as a syndicate or other group (including, without limitation, a partnership or limited partnership) for the purpose of acquiring, holding, or disposing of a security, except that Person shall not include an underwriter temporarily holding a security pursuant to an offering of the security.  References to a Person in the Plan include successors and assigns of such Person.

(n)          "Successor Corporation" shall mean a corporation that is a successor holding company of the Group in place of TORM or a preceding successor corporation, as a result of a Business Reorganisation or other transaction or series of transactions, and excluding for the avoidance of doubt, an entity in the Sponsor Group.

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(o)          "Sponsor Group" means OCM Njord Holdings S.à r.l. and its Affiliates, excluding TORM or any other Successor Corporation and their respective subsidiaries.

Section 3.          Administration.

Section 3.1          Composition.  The Plan shall generally be administered by the board of directors of TORM or by a subcommittee thereof to whom such board of directors may delegate all or part of its authority in respect of the Plan from time to time (collectively, the "Committee"). In any event, the board of directors of TORM has the ultimate decision making authority in respect of the Plan,

Section 3.2          Authority.  The Committee shall have full power and authority to administer the Plan, including awarding Incentives under the Plan and entering into agreements with, or providing notices to, participants as to the terms of the Incentives (the "Incentive Agreements"). Specifically, the Committee thereof shall have full and final authority and discretion over the Plan and any Incentives granted under it, including, but not limited to, the right, power, and authority, to: (a) determine the Persons to whom Incentives will be granted under Section 4 and the time at which such Incentives will be granted; (b) subject to Section 7.9, determine the terms, provisions, and conditions of each Incentive (including, if applicable, the number of A Shares or Depositary Interests covered by the Incentive), which need not be identical and need not match any default terms set forth in the Plan; (c) subject to Section 7.9, amend any outstanding Incentives or accelerate the time at which any outstanding Incentives may vest; (d) correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Incentive in the manner and to the extent it deems necessary or desirable to further the Plan's objectives; (e) establish, amend, and rescind any rules or regulations relating to administration of the Plan that it determines to be appropriate; (f) resolve all questions of interpretation or application of the Plan or Incentives granted under the Plan; (g) determine any matters for the purposes of Section 12.2; (h) implement an adjustment to the Plan or the Incentives pursuant to Section 13.5; or (i) make any other determination that it believes necessary or advisable for the proper administration of the Plan.  Committee decisions in matters relating to the Plan shall be final, binding, and conclusive on all Persons, including the Group and Plan participants.

Section 4.          Eligible Participants.  Key employees of the Group shall become eligible to receive Incentives under the Plan when designated by the Committee.

Section 5.          Types of Incentives.  Incentives may be granted under the Plan to eligible participants in the form of (a) share options, (b) share appreciation rights ("SARs"), (c) restricted shares, (d) restricted share units ("RSUs"), (e) Other Share-Based Awards (as defined in Section 10), or (f) Cash-Based Performance Awards (as defined in Section 11).  Any entitlement to A Shares under this Plan may be, at the discretion of the Committee, a right to be issued with an A Share or a Depositary Interest which is held by a Depositary.

Section 6.          Shares Subject to the Plan.

Section 6.1          Percentage of Shares.  Subject to adjustment as provided in Section 13.5, the maximum percentage of A Shares (together with Depositary Interests) that may be delivered to participants and their permitted transferees under the Plan is expected to be up to 7% of TORM's share capital from time to time.

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Section 6.2          Share Counting.  Any A Shares subject to an Incentive that is subsequently canceled, forfeited, or expires prior to exercise or realization, whether in full or in part, shall be available again for issuance or delivery under the Plan.  Notwithstanding the foregoing, however, A Shares subject to an Incentive under the Plan shall not be available again for issuance or delivery under the Plan if such A Shares were (a) tendered in payment of the Exercise Price, or (b) covered by, but not issued upon settlement of, share-settled SARs.

Section 6.3          Minimum Vesting Requirements.

(a)          Incentives granted under the Plan may have minimum vesting schedules as prescribed by the Committee.

(b)          No minimum vesting period applies to (i) A Shares or Depositary Interests issued or allocated in payment of cash amounts earned under the Group's annual incentive plans; or (ii) A Shares or Depositary Interests issued or allocated in settlement of a Cash-Based Performance Award granted under Section 11 prescribed by the Committee.

Section 6.4          Type of A Shares.  To the extent permitted by applicable law, A Shares (or Depositary Interests) issued under the Plan may be made available from authorized and previously unissued shares or previously issued shares held as treasury shares or shares held through an employee benefit trust.

Section 7.          Share Options and Share Appreciation Rights.

Section 7.1          Grant of Appreciation Awards.  The Committee may grant appreciation awards in the form of share options or share appreciation rights as provided in this Section 7.

(a)          A share option is a right to acquire A Shares (or Depositary Interests) from TORM or an employee benefit trust established by TORM.

(b)          A SAR is a right to receive, without payment to TORM, a number of A Shares, Depositary Interests, cash, or any combination thereof (as specified in the applicable Incentive Agreement), and the number or amount of which is determined pursuant to the formula set forth in Section 7.6(c).

(c)          Each share option or SAR granted by the Committee under the Plan shall be subject to the terms and conditions of the Plan, including but not limited to, this Section 7, and the applicable Incentive Agreement.

Section 7.2          Exercise Price.  The exercise price per A Share (the "Exercise Price") of a grant of options or SARs shall be determined by the Committee at grant, subject to adjustment under Section 12.2 or Section 13.5.

Section 7.3          Number.  The number of A Shares subject to each grant of share options or SARs shall be determined by the Committee, subject to Section 6 and adjustment as provided in Section 12. 2 or Section 13.5.

Section 7.4          Vesting and Exercisability.  Subject to Section 6.3, at the time an award of share options or SARs is made, the Committee shall establish the time or times at which the Incentive shall vest and become exercisable.  Each award of share options or SARs

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may have a different vesting period.  An acceleration of the vesting period shall occur (a) as provided under Section 13.3 in the event of termination of employment under the circumstances as may be provided in the Incentive Agreement and (b) unless otherwise provided in the Incentive Agreement, as described in Section 12 in the event of a Change of Control.

Section 7.5          Term.  The term of each share option or SAR shall be determined by the Committee, but shall not exceed a maximum term of 10 years.

Section 7.6          Manner of Exercise.

(a)          Each share option may be exercised, in whole or in part, by giving written notice to TORM, specifying the number of A Shares to be purchased.  The exercise notice shall be accompanied by the aggregate Exercise Price due for the A Shares to be purchased.  The aggregate Exercise Price shall be payable in Danish kroner or in another currency as determined by the Committee and may be paid (i) in cash; (ii) by check; (iii) except as may be prohibited by applicable law, by delivery, or attestation of ownership in accordance with procedures established by the Committee, of A Shares (or Depositary Interests), which A Shares shall be valued for this purpose at the Fair Market Value on the business day preceding the date on which TORM received notice of exercise; (iv) except as may be prohibited by applicable law, by delivery of irrevocable written instructions to a broker approved by TORM (with a copy to TORM) to immediately sell a portion of the A Shares issuable under the option (or the relevant Depositary Interest) and to deliver promptly to TORM the amount of sale proceeds (or loan proceeds if the broker lends funds to the participant for delivery to TORM) to pay the aggregate Exercise Price; (v) if approved by the Committee at its sole discretion and subject to any requirements the Committee may deem fit to impose, through a net exercise procedure whereby the optionee surrenders the option in exchange for that number of A Shares (or Depositary Interests) with an aggregate Fair Market Value equal to the difference between the aggregate Exercise Price of the options being surrendered and the aggregate Fair Market Value of the A Shares subject to the option on the business day preceding the date on which TORM received notice of exercise; or (vi) in such other manner as may be authorized from time to time by the Committee.

(b)          A SAR may be exercised, in whole or in part, by giving written notice to TORM, specifying the number of SARs that the holder wishes to exercise.  TORM shall, within 30 days of receiving such notice, deliver to the holder, the A Shares (or Depositary Interests), cash, or combination of A Shares (or Depositary Interests) and cash to which the holder is entitled as provided in the Incentive Agreement, calculated as provided in Section 7.6(c).

(c)          If the SAR is payable in cash, then the holder is entitled to a cash payment equal to the appreciation value of the number of A Shares as to which the SAR is being exercised, calculated by (i) subtracting the Exercise Price of the SAR from the Fair Market Value of an A Share on the business day preceding the date on which TORM received notice of exercise then (ii) multiplying by the number of A Shares as to which the SAR is being exercised (such value, the "Appreciation").  If the SAR is payable in A Shares (or Depositary Interests), then the holder is entitled to receive a number of A Shares (or Depositary Interests) equal to the Appreciation divided by the Fair Market Value of an A Share on the business day preceding the date on which TORM received notice of exercise, rounded down to the next whole share, with cash paid in lieu of fractional shares.

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Section 7.7          No Dividend Equivalent Rights.  Participants shall not be entitled to any dividend equivalent rights (or rights in respect of any other distributions made by TORM) for any period of time prior to exercise of the Incentive.

Section 7.8          Cancellation.  Upon approval of the Committee, and except as may be prohibited by applicable law, TORM may cancel a previously-granted share option or SAR by mutual agreement with the participant prior to exercise by payment to the holder of the amount per A Share by which: (a) the Fair Market Value of an A Share on the trading day immediately preceding the date of cancellation exceeds (b) the Exercise Price, or by payment of such other mutually agreed upon amount; provided, however, that no such cancellation shall be permitted if prohibited by Section 7.9.

Section 7.9          General Prohibition Against Repricing.  Except for adjustments pursuant to Section 13.5 or actions permitted to be taken by the Committee in the event of a Change of Control, unless approved by TORM's shareholders, (a) the Exercise Price of any outstanding option or SAR granted under the Plan may not be decreased after the date of grant and (b) an outstanding option or SAR that has been granted under the Plan may not, as of any date that such option or SAR has a per share Exercise Price that is greater than the then current Fair Market Value of an A Share, be surrendered to TORM as consideration for the grant of a new option or SAR with a lower Exercise Price, restricted shares, RSUs, an Other Share-Based Award, a cash payment, or Depositary Interests.

Section 7.10          Securities Law Restrictions.  By acquiring A Shares (or interests in A Shares) pursuant to the exercise of a share option or SAR, the relevant participant agrees and acknowledges that those A Shares (or Depositary Interests) may be subject to U.S. securities laws restrictions on the transfer of such A Shares (or Depositary Interests) and that the relevant A Shares may be issued to the Depositary and depositary receipts in respect of them may be issued by the Depositary.  Each certificate for A Shares (and Depositary Interests) shall bear the following legend:

"The shares of common stock represented hereby have not been registered under the Securities Act of 1933, as amended (the "Act"), or any state securities laws, and may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of in the absence of (i) an effective registration statement under the Act and compliance with applicable state securities laws or (ii) an applicable exemption therefrom and an opinion of counsel satisfactory to the issuer that such registration is not required."

Alternatively, where, in the discretion of the Committee, no physical certificates are issued, the appropriate restrictions may be reflected in the records of TORM's transfer agent and/or the Depositary.

Section 8.          Restricted Shares.

Section 8.1          Grant of Restricted Shares.  The Committee may award restricted shares to such eligible participants as provided in this Section 8.  An award of restricted shares shall be subject to such restrictions on transfer, forfeitability provisions, and such other terms and conditions, including the attainment of specified performance goals, as the Committee may determine, subject to the provisions of the Plan and applicable law.  Restricted shares may, at the absolute discretion of the Committee, be awarded by way of issue of restricted shares to a Depositary and the issue or allocation by the Depositary of

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Depositary Interests to the relevant participant, such Depositary Interests being subject to like restrictions as the restricted shares.

Section 8.2          The Restricted Period.  Subject to Section 6.3, at the time an award of restricted shares is made, the Committee shall establish the period of time during which the shares are restricted (the "Restricted Period"), following which the restrictions shall lapse and the restricted shares shall vest.  Each award of restricted shares may have a different Restricted Period.  The expiration of the Restricted Period shall occur (a) as provided under Section 13.3 in the event of termination of employment under the circumstances as may be provided in the Incentive Agreement and (b) unless otherwise provided in the Incentive Agreement, as described in Section 12 in the event of a Change of Control.

Section 8.3          Escrow.  The participant receiving restricted shares shall enter into an Incentive Agreement with TORM setting forth the conditions of the grant.  At the direction of the Committee certificates, if issued, representing restricted shares or Depositary Interests in restricted shares may (at the sole discretion of the Committee) be registered in the name of the Depositary or participant and deposited with TORM, together with a stock power endorsed in blank by the participant.  Each such certificate may bear legends in substantially the following form:

"The transferability of this certificate and the securities represented by it are subject to the terms and conditions (including conditions of forfeiture) contained in the TORM plc 2017 management incentive plan (the "Plan"), and an agreement entered into between the beneficial owner and TORM plc ("TORM") thereunder.  Copies of the Plan and the agreement are on file at the principal office of TORM."; and

"The shares of common stock represented hereby have not been registered under the Securities Act of 1933, as amended (the "Act"), or any state securities laws, and may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of in the absence of (i) an effective registration statement under the Act and compliance with applicable state securities laws or (ii) an applicable exemption therefrom and an opinion of counsel satisfactory to the issuer that such registration is not required."

Alternatively, in the discretion of the Committee, ownership of the restricted shares or Depositary Interests in restricted shares and the appropriate restrictions may be reflected in the records of TORM's transfer agent and/or the Depositary and no physical certificates may be issued. In such case, restricted shares shall be issued to and held by the Depositary which will issue Depositary Interests to the participant or to an employee benefit trust established by the Company or Subsidiary or another nominee (as determined by the Committee), in each case on behalf of the participant.

Section 8.4          Dividends on Restricted Shares.  Any and all cash and share dividends and other distributions paid with respect to the restricted shares shall be subject to any restrictions on transfer, forfeitability provisions, or reinvestment requirements as the Committee may, in its discretion, prescribe in the Incentive Agreement.

Section 8.5          Forfeiture.  In the event of the forfeiture of any restricted shares or Depositary Interests under the terms provided in the Incentive Agreement (including any

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additional shares or Depositary Interests that may result from the reinvestment of cash and share dividends, if so provided in the Incentive Agreement), such forfeited shares shall be surrendered and any certificates cancelled.  The participants shall have the same rights and privileges, and be subject to the same forfeiture provisions, with respect to any additional shares received pursuant to Section 13.5.

Section 8.6          Expiration of Restricted Period.  Upon the expiration or termination of the applicable Restricted Period and the satisfaction of any other conditions prescribed by the Committee, the restrictions applicable to the restricted shares shall lapse and TORM shall direct the transfer agent to remove all restrictions and legends from the book entry for the vested shares and/or Depositary Interests, except for any restrictions and legends that may be imposed by law or regulations.

Section 8.7          Rights as a Shareholder.  Subject to the terms and conditions of the Plan and any restrictions on the receipt of dividends and other distributions that may be imposed in the Incentive Agreement, each participant who is registered as the owner of restricted shares shall have all the rights of a shareholder with respect to shares during the Restricted Period, including without limitation, the right to vote such shares.  Each participant who receives Depositary Interests instead of restricted shares agrees that the Depositary will be the legal owner of the restricted shares and, accordingly, the participant will not have the rights conferred on shareholders by TORM's articles of association or under applicable law. As the legal owner of those restricted shares, the Depositary will be entitled to enjoy and exercise all of the rights attached to the restricted shares, provided that, similar to other securities held by depositaries, the Depositary will grant contractual rights to the holders of the Depositary Interests substantially equivalent in effect to the rights attached to the A Shares but not directly enforceable against TORM (subject to compliance with the depositary agreement and applicable law and regulations). Accordingly, the Employee's ability to exercise shareholder rights in respect of restricted shares will be determined by the agreements between TORM and the Depositary.

Section 9.          Restricted Share Units.

Section 9.1          Grant of Restricted Share Units.  A restricted share unit, or RSU, represents the right to receive from TORM on the respective scheduled vesting or settlement date for such RSU one A Share (or a Depositary Interest in respect of one A Share).  An award of RSUs may be subject to the attainment of specified performance goals or targets, forfeitability provisions, and such other terms and conditions as the Committee may determine, subject to the provisions of the Plan. If decided at the Committee's discretion from time to time or in relation to specific Persons to grant RSUs, RSUs are intended to be granted annually. No grant of RSUs in one instance shall automatically entitle any Person to receive grants at any subsequent time.

Section 9.2          Vesting and Settlement.  Subject to Section 6.3, at the time an award of RSUs is made, the Committee shall establish the period of time during which the RSUs shall vest and when the RSUs may settle. Settlement may be in A Shares or in Depositary Interests at the Committee's discretion.  Each award of RSUs may have a different vesting or settlement period.  An acceleration of the vesting and settlement may occur (a) as provided under Section 13.3 in the event of termination of employment under the circumstances as may be provided in the Incentive Agreement and (b) unless otherwise provided in the Incentive Agreement, as described in Section 12 in the event of a Change of Control.

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Section 9.3          Dividend Equivalent Accounts.  Subject to the terms and conditions of the Plan and the applicable Incentive Agreement, as well as any procedures established by the Committee, prior to the vesting and settlement of RSUs granted under the Plan, the Committee may determine to pay dividend equivalent rights (or rights to other distributions made by TORM) with respect to RSUs, in which case, unless determined by the Committee to be paid currently, TORM shall establish a bookkeeping account for the  participant and reflect in that account any securities, cash, or other property comprising any dividend or property distribution with respect to each A Share underlying each RSU.  The participant shall have no rights to the amounts or other property credited to such account except to the extent provided in the Incentive Agreement.

Section 9.4          Rights as a Shareholder.  Subject to the restrictions imposed under the terms and conditions of the Plan and any other restrictions that may be imposed in the Incentive Agreement, each participant receiving RSUs shall have no rights as a shareholder with respect to such RSUs until such time as the RSUs vest and A Shares are issued to the participant.  Each participant who receives Depositary Interests instead of A Shares agrees that the Depositary will be the legal owner of the A Shares and, accordingly, the participant will not have the rights conferred on shareholders by TORM's articles of association or under applicable law. As the legal owner of those restricted shares, the Depositary will be entitled to enjoy and exercise all of the rights attached to the A Shares, provided that, similar to other securities held by depositaries, the Depositary will grant contractual rights to the holders of the Depositary Interests substantially equivalent in effect to the rights attached to the A Shares but not directly enforceable against TORM (subject to compliance with the depositary agreement and applicable law and regulations). Accordingly, the participant's ability to exercise shareholder rights in respect of A Shares will be determined by the agreements between TORM and the Depositary.

Section 10.          Other Share-Based Awards.

Section 10.1          Grant of Other Share-Based Awards.  Subject to the limitations described in Section 10.2 hereof, the Committee may grant to eligible participants other share-based awards, which shall consist of awards (other than options, SARs, restricted shares, RSUs, or Cash-Based Performance Awards described in Section 7 to Section 9 and Section 11) paid out in A Shares (or Depositary Interests) or the value of which is based in whole or in part on the value of A Shares ("Other Share-Based Awards").  Other Share-Based Awards may be awards of A Shares (or Depositary Interests), awards of phantom shares, or may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of, or appreciation in the value of, A Shares (including, without limitation, securities convertible or exchangeable into or exercisable for A Shares (or Depositary Interests), as deemed by the Committee consistent with the purposes of the Plan.  The Committee shall determine the terms and conditions of any Other Share-Based Award (including which rights of a shareholder, if any, the recipient shall have with respect to A Shares (or Depositary Interests) associated with any such award) and may provide that such award is payable in whole or in part in cash.  An Other Share-Based Award may be subject to the attainment of such specified performance goals or targets as the Committee may determine, subject to the provisions of the Plan.

Section 10.2          Vesting.  Subject to Section 6.3, at the time that an Other Share-Based Award is made, the Committee shall establish the period of time during which the Other Share-Based Award shall vest and following which all restrictions shall lapse.  Each award of Other Share-Based Award may have a different vesting period.  An

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acceleration of the vesting period shall occur (a) as provided under Section 13.3 in the event of termination of employment under the circumstances as may be provided in the Incentive Agreement and (b) unless otherwise provided in the Incentive Agreement, as described in Section 12 in the event of a Change of Control.

Section 11.          Cash-Based Performance Awards.  The Committee may grant Incentives in the form of cash-based performance awards to eligible participants, which shall consist of the opportunity to earn awards based on performance and valued in Danish kroner (or in another currency as determined by the Committee) rather than A Shares (or Depositary Interests) ("Cash-Based Performance Awards").  At the Committee's election and as provided in the Incentive Agreement, Cash-Based Performance Awards may be settled in cash, A Shares (or Depositary Interests), or a combination of them. A Cash-Based Performance Award shall be subject to such terms and conditions, including the attainment of specified performance goals, as the Committee may determine, subject to the provisions of the Plan.  Subject to Section 6.3, at the time that a Cash-Based Performance Award is granted, the Committee shall establish the vesting criteria for such Incentive, including, as applicable, the performance period, the time or times at which any payout shall be deemed vested and payable.  An acceleration of vesting shall occur (a) as provided under Section 13.3 in the event of termination of employment under the circumstances as may be provided in the Incentive Agreement and (b) unless otherwise provided in the Incentive Agreement, as described in Section 12 in the event of a Change of Control.

Section 12.          Change of Control.

Section 12.1          Change of Control Defined.  Unless otherwise provided in an Incentive Agreement, "Change of Control" shall mean:

(a)          A transaction or series of transactions, including a Business Reorganisation, that results in:

(1) the Sponsor Group holding Beneficial Ownership of less than 1/3 of the issued and outstanding A Shares or common stock in TORM or the Successor Corporation (as applicable); AND

(2) the acquisition by any Person (other than the Sponsor Group) of Beneficial Ownership of 1/3 or more of the issued and outstanding A Shares or common stock in TORM or the Successor Corporation (as applicable); or

(b)          approval by the shareholders of TORM or the Successor Corporation (as applicable) of a complete winding-up, liquidation or dissolution of TORM or the Successor Corporation (as applicable).

Notwithstanding anything herein to the contrary, the following transactions shall not constitute a Change of Control: (i) a reorganization, merger or consolidation amongst members of the Group, (ii) any acquisition of A Shares (or Depositary Interests) by TORM or its subsidiaries, (iii) any acquisition of A Shares (or Depositary Interests) by any employee benefit plan (or related trust) sponsored or maintained by the Group, (iv) a reincorporation or redomiciliation of a member of the Group in a different jurisdiction, or (v) changes to the Group's holding structure, a listing of a member of the Group or any other transaction, in each case, in which there is no substantial change in the Beneficial Ownership of the Group. See also Section 13.5 (Adjustment) below.

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Section 12.2          Effect of a Change of Control.

(i)          Except as otherwise provided in an Incentive Agreement and notwithstanding any other provision of the Plan, in the event of a Change of Control, all outstanding Incentives shall, as determined by the Committee in its sole discretion:

(ii)          be assumed or an equivalent award shall be substituted by the successor corporation or a parent or subsidiary of such successor corporation, or

(iii)          become vested and immediately and fully exercisable, during such period immediately prior to such Change of Control as may be determined by the Committee, and all forfeiture restrictions shall be waived, or

(iv)           cancelled by the Committee for Fair Market Value (as determined by the Committee), which in the case of any Incentives that set out a strike price, exercise price or similar payment obligation, may equal the excess of the Change of Control Value over such strike price, exercise price or similar payment obligation.

(b)          For the purposes of this Section, the Incentive shall be considered assumed or substituted if, following the transaction, the Incentive confers the right to purchase or receive, for each A Share or Depositary Interest subject to the Incentive immediately before the transaction, the consideration (whether stock, other securities or property) received in the transaction by Beneficial Owners of A Shares for each A Share or Depositary Interest beneficially owned on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the Beneficial Owners of a majority of the outstanding A Shares or Depositary Interests, pursuant to the transaction (but not any statutory squeeze out or other procedure resulting from the transaction) but for those purposes ignoring those Beneficial Owners who are not entitled to elect for certain types of consideration for legal or regulatory reasons); provided, however, that if such consideration received in the transaction is not solely common stock of the successor corporation, its parent or subsidiary, then the Committee may, with the consent of the successor corporation, its parent or subsidiary, provide for the consideration to be received upon the exercise of the Incentive, for each A Share or Depositary Interest, subject to the Incentive, to be solely common stock of the successor corporation its parent or subsidiary, equal in Fair Market Value to the per share consideration received by holders of A Shares in the transaction.

Section 13.          General.

Section 13.1          Duration.  No Incentives may be granted under the Plan after the date that is 10 years following the Adoption Date; provided, however, that the Plan shall remain in effect after such date with respect to Incentives granted prior to that date, until all such Incentives have either been satisfied by the issuance of A Shares (or Depositary Interests) or otherwise been terminated under the terms of the Plan and all restrictions imposed on A Shares (or Depositary Interests) in connection with their issuance under the Plan have lapsed.

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Section 13.2          Transferability.  No Incentives granted hereunder may be transferred, pledged, assigned or otherwise encumbered by a participant, except: (a) by will; (b) by the laws of descent and distribution; or (c) if permitted by the Committee (i) to Immediate Family Members, (ii) to a partnership in which the participant and/or Immediate Family Members, or entities in which the participant and/or Immediate Family Members are the sole owners, members or beneficiaries, as appropriate, are the sole partners, (iii) to a limited liability company in which the participant and/or Immediate Family Members, or entities in which the participant and/or Immediate Family Members are the sole owners, members or beneficiaries, as appropriate, are the sole members, or (iv) to a trust for the sole benefit of the participant and/or Immediate Family Members. Any attempted assignment, transfer, pledge, hypothecation or other disposition of Incentives, or levy of attachment or similar process upon Incentives not specifically permitted herein, shall be null and void and without effect.

Section 13.3          Effect of Termination of Employment or Death.  In the event that a participant ceases to be an employee of the Group or to provide services to the Group for any reason, including death, disability, early retirement, or normal retirement, any Incentives may be exercised, shall vest, or shall expire at such times as may be determined by the Committee and provided in the Incentive Agreement (in compliance with applicable law).

Section 13.4          Additional Conditions.  Anything in the Plan to the contrary notwithstanding, TORM shall have no obligation to issue any Incentives or A Shares (or Depositary Interests) pursuant to the Plan unless the issuance and delivery of such Incentives or A Shares (or Depositary Interests) complies with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which the Incentives or A Shares (or Depositary Interests) may then be listed. The Committee may require, as a condition to the issuance of Incentives or A Shares (or Depositary Interests), that the participant make such covenants, agreements and representations, and that any certifications representing the Incentives bear such legends, as the Committee deems necessary or desirable.

Section 13.5          Adjustment.

(a)          Notwithstanding anything to the contrary herein, in the event of any transaction or series of transactions resulting in a change in the Group's holding structure or change in the outstanding share capital of TORM after the Adoption Date by reason of reorganization, recapitalization, reclassification, redomiciliation, stock dividend, stock split, stock issuance, combination of shares, stock exchange, corporate exchange or Business Reorganisation or other similar transaction which does not constitute a Change of Control under Section 12.1(a), including for the avoidance of doubt, a Business Reorganisation whereby a Successor Corporation of the Group is established through which the Sponsor Group holds at least an equivalent economic interest in the Group as it currently holds through TORM, the Committee at its discretion and without liability to any Person shall make such substitution or adjustment as it deems to be equitable, as to (i) the number or kind of shares or other securities issued or to be issued pursuant to the Plan or pursuant to outstanding Incentives, including to substitute Incentives existing prior to the transaction with substantially the same rights in such acquiring Successor Corporation (ii) the strike price or exercise price of any Incentive, or (iii) any other affected terms of the Plan or an Incentive.

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(b)          Without prejudice to the generality of the foregoing, the Committee may at its discretion determine that following any applicable transaction described in this section, an Incentive shall confer the right to purchase or receive, for each A Share (or Depositary Interests) subject to the Incentive immediately before the transaction, the consideration (whether stock, other securities or property) received in the transaction by holders of A Shares (or Depositary Interests) for each A Share (or Depositary Interest) held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding A Shares (or Depositary Interests), pursuant to the transaction (but not any statutory squeeze out or other procedure resulting from the transaction); provided, however, that if such consideration received in the transaction is not solely common stock of the successor corporation, its parent or subsidiary, then the Committee may, with the consent of the successor corporation, its parent or subsidiary, provide for the consideration to be received upon the exercise of the Incentive, for each A Share (or Depositary Interest in an A Share) subject to the Incentive, to be solely common stock of the successor corporation its parent or subsidiary, equal in Fair Market Value to the per share consideration received by holders of shares in A Shares in the transaction.

(c)          No substitution or adjustment shall require the issuance of a fractional share under the Plan and the substitution or adjustment shall be limited by deleting any fractional share.

Section 13.6          No Continued Employment.  No participant under the Plan shall have any right, because of his or her participation, to continue in the employ of the Group for any period of time or to any right to continue his or her present or any other rate of compensation.

Section 13.7          Amendments to or Termination of the Plan.  The Committee may amend or discontinue the Plan at any time; provided, however, that to no such amendment may:

(a)          materially revise the Plan without the approval of the shareholders to the extent such approval is required under applicable listing standards of any exchange on which A Shares (or Depositary Interests) are listed;

(b)          amend Section 7.9 to permit repricing of options or SARs without the approval of shareholders; or

(c)          materially impair, without the consent of the recipient, an Incentive previously granted, except that the Group retains all of its rights under Section 12.

For the avoidance of doubt, nothing in this Section 13.7 shall impair the Committee's rights under Section 13.5.

A material revision of the Plan as used in this Section 13.7 includes (1) except for adjustments permitted herein, a material increase to the maximum number of A Shares (or Depositary Interests) that may be issued through the Plan; (2) a material increase to the benefits accruing to participants under the Plan; (3) a material expansion of the classes of Persons eligible to participate in the Plan; (4) an expansion of the types of Incentives available for grant under the Plan; (5) a material extension of the term of the Plan; and (6) a

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material change that reduces the price at which A Shares (or Depositary Interests) may be offered through the Plan.

Section 13.8          Definition of Fair Market Value.  Whenever "Fair Market Value" of a member of the Group's shares are required to be determined for purposes of the Plan, it shall be determined in good faith by the Committee, and if such shares are listed, then, shall be based on the closing sale price on the applicable date (or if no sale of the shares shall have been made on that day, on the next preceding day on which there was a sale of the shares) on the consolidated transaction reporting system of the stock exchange with the greatest volume of trading in the Group's shares during the immediately preceding 30 days prior to the time of determination (as such volume is reported in any source the Committee deems reliable). The determination of the Committee shall be conclusive and binding on all Persons.

Section 13.9          Sub-plans.  The Committee may establish sub-plans under the Plan for purposes of satisfying securities, tax, or other laws of various jurisdictions in which the Group intends to grant Incentives.  Any sub-plans shall contain such limitations and other terms and conditions as the Committee determines are necessary or desirable.  All sub-plans shall be deemed a part of the Plan, but any sub-plan shall apply only to the participants specified in that sub-plan, whether specified by individual name, job-title, classification, employer, or jurisdiction.

Section 13.10          No Trust or Fund Created.  Neither the Plan nor any Incentive shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Group and a participant or any other Person.  To the extent that any Person acquires the right to receive payments from the Group pursuant to an Incentive, such right shall be no greater than the right of any unsecured general creditor of the Group.

Section 13.11          Tax. Unless otherwise agreed in writing, the Group shall have the power and right to deduct or withhold from any amount payable to a participant under the Plan or otherwise, or require a participant to remit to the Group, an amount sufficient to satisfy any taxes employee national insurance contributions, social security charges (as applicable) or penalties required by applicable law or regulation to be paid (whether following withholding or otherwise) with respect to any taxable event arising as a result of the Plan. Unless otherwise agreed in writing, Plan participants are solely responsible and liable for the satisfaction of any tax liability, employee national insurance contributions, other social security charges (as applicable) or penalties that may arise in connection with Incentives and the Group shall not have any obligation to indemnify or otherwise hold any such Person harmless from any or all of such taxes, employee national insurance contributions, other social security charges (as applicable) or penalties.  The participant shall make all tax elections and filings required by applicable law or as reasonably required by the Committee within the time limits required by law and provide to the Group such information as it shall require for the purposes of fulfilling its obligations in respect of any such filings and elections. Unless otherwise agreed in writing, the participant shall indemnify the Group against, and shall pay to the Group, the full amount of any tax, employee national insurance contribution, any other social security charge or penalty arising from any Incentive within 90 days of that liability arising to the extent that the Group has not recovered such amounts from the participant by way of deduction or withholding from any other payment. Subject to applicable law and at its discretion, the Group shall have the power and right to transfer to the relevant employee social security liabilities of the applicable member of the Group.

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Section 13.12          Offset. If a participant under the Plan becomes entitled to a cash payment under an Incentive, and if at such time, the participant has any outstanding debt, obligation or other liability representing an amount owed to the Group, then the Group, upon a determination of the Committee and to the extent permitted by applicable law, may offset such amount so owing against the amount of cash otherwise distributable.

Section 13.13          Governing Law.  The Plan will be construed and administered in accordance with the laws of England and Wales, without giving effect to principles of conflict of laws and subject to the non-exclusive jurisdiction of the English courts.

Section 13.14          Severability.  If any term or provision of the Plan shall at any time or to any extent be invalid, illegal, or unenforceable in any respect as written, in whole or in part, such provision shall be deemed modified or limited to the extent necessary to render it valid and enforceable to the fullest extent allowed by law.  Any such provision that is not susceptible of such reformation shall be ignored so as to not affect any other term or provision hereof, and the remainder of the Plan, or the application of such term or provision to Persons or circumstances other than those as to which it is held invalid, illegal or unenforceable, shall not be affected thereby and each term and provision of the Plan shall be valid and enforced to the fullest extent permitted by law.

15Exhibit 4.2

 

SECOND SUPPLEMENTAL INDENTURE

 

between

 

MVC CAPITAL, INC.

 

and

 

U.S. BANK NATIONAL ASSOCIATION,

 

as Trustee

 

Dated as of November 15, 2017

 

SECOND SUPPLEMENTAL INDENTURE

 

THIS SECOND SUPPLEMENTAL INDENTURE (this “Second Supplemental Indenture”), dated as of November 15, 2017, is between MVC Capital, Inc., a Delaware corporation (the “Company”), and U.S. Bank National Association, as trustee (the “Trustee”).  All capitalized terms used herein shall have the meaning set forth in the Base Indenture (as defined below).

 

RECITALS OF THE COMPANY

 

The Company and the Trustee executed and delivered an Indenture, dated as of February 26, 2013 (the “Base Indenture” and, as supplemented by this Second Supplemental Indenture, the “Indenture”), to provide for the issuance by the Company from time to time of the Company’s unsecured debentures, notes or other evidences of indebtedness (the “Securities”), to be issued in one or more series as provided in the Indenture.

 

The Company previously entered into the First Supplemental Indenture, dated as of February 26, 2013 (the “First Supplemental Indenture”), which amended and supplemented the Indenture. The First Supplemental Indenture is not applicable to the 2022 Notes (as defined below).

 

The Company desires to issue and sell up to $100,000,000 in aggregate principal amount of the Company’s 6.25% Senior Notes due 2022 (the “2022 Notes”).

 

Sections 9.01(iv) and 9.01(vi) of the Base Indenture provide that without the consent of Holders of the Securities of any series issued under the Indenture, the Company, when authorized by or pursuant to a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental to the Base Indenture to (i) change or eliminate any of the provisions of the Indenture when there is no Security Outstanding of any series created prior to the execution of a supplemental indenture that is entitled to the benefit of such provision and (ii) establish the form or terms of Securities of any series as permitted by Section 2.01 and Section 3.01 of the Base Indenture.

 

The Company desires to establish the form and terms of the 2022 Notes and to modify, alter, supplement and change certain provisions of the Base Indenture for the benefit of the Holders of the 2022 Notes (except as may be provided in a future supplemental indenture to the Indenture (“Future Supplemental Indenture”)).  The Company has duly authorized the execution and delivery of this Second Supplemental Indenture to provide for the issuance of the 2022 Notes and all acts and things necessary to

 

 

make this Second Supplemental Indenture a valid, binding, and legal obligation of the Company and to constitute a valid agreement of the Company, in accordance with its terms, have been done and performed.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

For and in consideration of the premises and the purchase of the 2022 Notes by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the 2022 Notes, as follows:

 

ARTICLE I.
  TERMS OF THE 2022 NOTES

 

Section 1.01                             Terms of the 2022 Notes.  The following terms relating to the 2022 Notes are hereby established:

 

(a)                                 The 2022 Notes shall constitute a series of Securities having the title “6.25% Senior Notes due 2022” and shall be designated as Senior Securities under the Indenture.  The 2022 Notes shall bear a CUSIP number of 553829 409 and an ISIN number of US5538294092.

 

(b)                                 The aggregate principal amount of the 2022 Notes that may be initially authenticated and delivered under the Indenture (except for 2022 Notes authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other 2022 Notes pursuant to Sections 3.04, 3.05, 3.06, 9.06 or 11.07 of the Base Indenture) shall be $100,000,000.  Under a Board Resolution, Officers’ Certificate pursuant to Board Resolutions or an indenture supplement, so long as no Event of Default has occurred and is continuing, the Company may from time to time, without the consent of the Holders of 2022 Notes, issue additional 2022 Notes (in any such case “Additional 2022 Notes”) having the same ranking and the same interest rate, maturity and other terms as the 2022 Notes.  Any Additional 2022 Notes and the existing 2022 Notes will constitute a single series under the Indenture and all references to the relevant 2022 Notes herein shall include the Additional 2022 Notes unless the context otherwise requires.

 

(c)                                  The entire outstanding principal of the 2022 Notes shall be payable on November 30, 2022.

 

(d)                                 The rate at which the 2022 Notes shall bear interest shall be 6.25% per annum (the “Applicable Interest Rate”). The date from which interest shall accrue on the 2022 Notes shall be November 15, 2017, or the most recent Interest Payment Date to which interest has been paid or provided for; the Interest Payment Dates for the 2022 Notes shall be January 15, April 15, July 15 and October 15 of each year, commencing January 15, 2018 (if an Interest Payment Date falls on a day that is not a Business Day, then the applicable interest payment will be made on the next succeeding Business Day and no additional interest will accrue as a result of such delayed payment); the initial interest period will be the period from and including November 15, 2017 (or the most recent Interest Payment Date to which interest has been paid or provided for), to, but excluding, the initial Interest Payment Date, and the subsequent interest periods will be the periods from and including an Interest Payment Date to, but excluding, the next Interest Payment Date or the Stated Maturity, as the case may be; the interest so payable, and punctually paid or duly provided for, on any Interest Payment Date, will be paid to the Person in whose name the 2022 Note (or one or more predecessor 2022 Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be January 1, April 1, July 1 and October 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Payment of principal of (and premium, if any) and any such interest on the 2022 Notes will be made at the Corporate Trust Office of the Trustee in Boston, Massachusetts in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private

 

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debts; provided, however, that at the option of the Company, payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Interest on the 2022 Notes will be computed on the basis of a 360-day year of twelve 30-day months.

 

(e)                                  The 2022 Notes shall be initially issuable in global form (each such 2022 Note, a “Global 2022 Note”).  The Global 2022 Notes and the Trustee’s certificate of authentication thereon shall be substantially in the form of Exhibit A to this Second Supplemental Indenture.  Each Global 2022 Note shall represent the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate amount of outstanding Notes from time to time endorsed thereon and that the aggregate amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions.  Any endorsement of a Global 2022 Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Security Registrar, in accordance with Sections 2.03 and 3.05 of the Base Indenture.

 

(f)                                   The depositary for such Global 2022 Notes (the “Depositary”) shall be The Depository Trust Company, New York, New York.  The Security Registrar with respect to the Global 2022 Notes shall be the Trustee.

 

(g)                                  The 2022 Notes shall be defeasible pursuant to Section 14.02 or Section 14.03 of the Base Indenture.  Covenant defeasance contained in Section 14.03 of the Base Indenture shall apply to the covenants contained in Sections 10.06, 10.08, 10.09 and 10.10 of the Indenture.

 

(h)                                 The 2022 Notes shall be redeemable pursuant to Section 11.01 of the Base Indenture and as follows:

 

(i)                                     The 2022 Notes will be redeemable in whole or in part at any time or from time to time, at the option of the Company, on or after November 30, 2019, at a redemption price of 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to, but excluding, the date fixed for redemption.

 

(ii)                                  Notice of redemption shall be given in writing and mailed, by first-class mail, postage prepaid, or by overnight courier guaranteeing next-day delivery, to each Holder of the 2022 Notes to be redeemed, not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date, at the Holder’s address appearing in the Security Register.  All notices of redemption shall contain the information set forth in Section 11.04 of the Base Indenture.

 

(iii)                               Any exercise of the Company’s option to redeem the 2022 Notes will be done in compliance with the Investment Company Act.

 

(iv)                              If the Company elects to redeem only a portion of the 2022 Notes, the Trustee or DTC, as applicable, will determine the method for selecting the particular 2022 Notes to be redeemed, in accordance with the Indenture, and in accordance with the rules of any national securities exchange system on which the 2022 Notes are listed and the Investment Company Act.

 

(v)                                 Unless the Company defaults in payment of the Redemption Price, on and after the Redemption Date, interest will cease to accrue on the 2022 Notes called for redemption hereunder.

 

(i)                                     The 2022 Notes shall not be subject to any sinking fund pursuant to Section 12.01 of the Base Indenture.

 

3

 

(j)                                    The 2022 Notes shall be issuable in denominations of $25 and integral multiples of $25 in excess thereof.

 

(k)                                 Holders of the 2022 Notes will not have the option to have the 2022 Notes repaid prior to the Stated Maturity.

 

ARTICLE II.
  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 2.01                             Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the 2022 Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding (other than Securities issued under the First Supplemental Indenture, if applicable under the First Supplemental Indenture), Article One of the Base Indenture shall be amended by adding or amending and restating, as applicable, the following defined terms to Section 1.01 in appropriate alphabetical sequence, as follows:

 

“‘Affiliate’ of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.”

 

“‘Exchange Act’ means the Securities Exchange Act of 1934, as amended, and any statute successor thereto.”

 

“‘GAAP’ means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, the opinions and pronouncements of the Public Company Accounting Oversight Board and the statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession in the United States, which are in effect from time to time.”

 

“‘Investment Company Act’ means the Investment Company Act of 1940, as amended, and the rules, regulations and interpretations promulgated thereunder, to the extent applicable, and any statute successor thereto.”

 

“‘Significant Subsidiary’ means any direct or indirect Subsidiary of the Company that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X under the Exchange Act.”

 

ARTICLE III.
  THE SECURITIES

 

Section 3.01                             Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the 2022 Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding (other than Securities issued under the First Supplemental Indenture, if applicable under the First Supplemental Indenture), the first paragraph of Section 3.03 of the Base Indenture shall be amended and restated with respect to the 2022 Notes as follows:

 

“The Securities shall be executed on behalf of the Company by the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer or its President, and attested by its Secretary.  The

 

4

 

signature of any of these officers on the Securities may be manual or facsimile, .pdf attachment or other electronically transmitted signature (with an original manual signature to be sent to the Trustee via overnight mail, postage prepaid, immediately thereafter) of the present or any future such authorized officer and may be imprinted or otherwise reproduced on the Securities.”

 

Section 3.02                             Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the 2022 Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding (other than Securities issued under the First Supplemental Indenture, if applicable under the First Supplemental Indenture), the first sentence of the second paragraph of Section 3.03 of the Base Indenture shall be amended with respect to the 2022 Notes by adding, after the word “facsimile” and before the word “signatures,” the following:

 

“, .pdf attachment or other electronically transmitted”

 

ARTICLE IV.
 REMEDIES

 

Section 4.01                             Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the 2022 Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding (other than Securities issued under the First Supplemental Indenture, if applicable under the First Supplemental Indenture), Section 5.01 of the Base Indenture shall be amended by replacing clause (ii) thereof with the following:

 

“(ii)                            default in the payment of the principal of (or premium, if any) any 2022 Note when it becomes due and payable at its Maturity; or”

 

Section 4.02                             Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the 2022 Notes but no other series of Securities under the Indenture (other than Securities issued under the First Supplemental Indenture, if applicable under the First Supplemental Indenture), whether now or hereafter issued and Outstanding, Section 5.01 of the Base Indenture shall be amended by replacing clauses (v) and (vi) thereof with the following:

 

“(v)                           the Company or any of its Significant Subsidiaries or any group of Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary, pursuant to or within the meaning of the Bankruptcy Law:

 

(1)                                 commences a voluntary case or proceeding under any Bankruptcy Law,

 

(2)                                 consents to the commencement of any bankruptcy or insolvency case or proceeding against it, or files a petition or answer or consent seeking reorganization or relief against it,

 

(3)                                 consents to the entry of a decree or order for relief against it in an involuntary case or proceeding,

 

(4)                                 consents to the filing of such petition or to the appointment of or taking possession by a Custodian of it or for all or substantially all of its property, or

 

(5)                                 makes an assignment for the benefit of creditors, or admits in writing of its inability to pay its debts generally as they become due or takes any corporate action in furtherance of any such action; or

 

5

 

(vi)                              a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(1)                                 is for relief against the Company or any of its Significant Subsidiaries or any group of Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary in an involuntary case,

 

(2)                                 adjudges the Company or any of its Significant Subsidiaries or any group of Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary bankrupt or insolvent, or approves as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company, any of its Significant Subsidiaries or any group of Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary,

 

(3)                                 appoints a Custodian of the Company or any of its Significant Subsidiaries or any group of Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary or for all or substantially all of the property of the Company or any of its Significant Subsidiaries or any group of Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary, or

 

(4)                                 orders the winding up or liquidation of the Company or any of its Significant Subsidiaries or any group of Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary.”

 

Section 4.03                             Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the 2022 Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Section 5.02 of the Base Indenture shall be amended by replacing the first paragraph thereof with the following:

 

“If an Event of Default with respect 2022 Notes occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding 2022 Notes may declare the principal of all the 2022 Notes to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holders), and upon any such declaration the principal thereof shall become immediately due and payable; provided however, if an Event of Default referred to in Section 5.01(v) or Section 5.01(vi) of the Indenture has occurred, the entire principal amount of all the 2022 Notes will automatically become due and immediately payable without any action by the Trustee or the Holders or any notice to the Company.”

 

ARTICLE V.
  COVENANTS

 

Section 5.01                             Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the 2022 Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Article Ten of the Base Indenture shall be amended by adding the following new Sections 10.08, 10.09 and 10.10 thereto, each as set forth below:

 

6

 

“Section 10.08                                        Section 18(a)(1)(A) of the Investment Company Act.

 

The Company hereby agrees that for the period of time during which 2022 Notes are Outstanding, the Company will not violate, whether or not it is subject to, Section 18(a)(1)(A) as modified by Section 61(a)(1) of the Investment Company Act or any successor provisions thereto of the Investment Company Act, in either case, giving effect to any exemptive relief granted to us by the Commission.”

 

“Section 10.09                                        Section 18(a)(1)(B) of the Investment Company Act.

 

The Company hereby agrees that for the period of time during which 2022 Notes are Outstanding, the Company will not violate Section 18(a)(1)(B) as modified by Section 61(a)(1) of the Investment Company Act or any successor provisions thereto of the Investment Company Act, giving effect to any exemptive relief granted to us by the Commission.”

 

“Section 10.10                                        Commission Reports and Reports to Holders.

 

If, at any time, the Company is not subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act to file any periodic reports with the Commission, the Company agrees to furnish to the Holders of 2022 Notes and the Trustee for the period of time during which the 2022 Notes are Outstanding: (i) within 90 days after the end of each fiscal year of the Company, which currently ends on October 31, audited annual consolidated financial statements of the Company and (ii) within 45 days after the end of each fiscal quarter of the Company (other than the Company’s fourth fiscal quarter), which currently end on January 31, April 30 and July 31, unaudited interim consolidated financial statements of the Company. All such financial statements shall be prepared, in all material respects, in accordance with GAAP.”

 

ARTICLE VI.

DEFEASANCE

 

Section 6.01                             Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the 2022 Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Section 14.04 of the Base Indenture shall be amended by replacing clause (vi) thereof with the following:

 

“(vi) The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to either the defeasance under Section 14.02 or the covenant defeasance under Section 14.03 (as the case may be) have been complied with and an Opinion of Counsel to the effect that as a result of a deposit pursuant to subsection (i) above and the related exercise of the Company’s option under Section 14.02 or Section 14.03 (as the case may be), registration is not required under the Investment Company Act of 1940, as amended, by the Company, with respect to the trust funds representing such deposit or by the trustee for such trust funds.”

 

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ARTICLE VII.
 MISCELLANEOUS

 

Section 7.01                             This Second Supplemental Indenture and the 2022 Notes shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws that would cause the application of laws of another jurisdiction.  This Second Supplemental Indenture is subject to the provisions of the Trust Indenture Act that are required to be part of the Indenture and shall, to the extent applicable, be governed by such provisions.

 

Section 7.02                             Except as may be provided in a Future Supplemental Indenture, Article Six of the Base Indenture shall be amended by adding the following Section 6.14:

 

“Section 6.14                       Trustee’s Cooperation.

 

So long as the outstanding 2022 Notes are registered in the name of Cede & Co. or its registered assigns, the Trustee shall cooperate with Cede & Co., as sole registered owner, and its registered assigns in effecting payment of the principal of, Redemption Price and interest on the 2022 Notes by arranging for payment in such manner that funds for such payments are properly identified and are made immediately available on the date they are due.  The Company acknowledges that in order for the Trustee to make funds for such payments immediately available to the Depositary on the date they are due, the Company shall ensure the funds for such payments are remitted and made immediately available to the Trustee, no later than 1:00 p.m. Eastern Time on the date they are due to Cede & Co. in order for the Trustee to conform to the payment guidelines of the Depositary.  Funds for such payments received by the Trustee after 1:00 p.m. Eastern Time on the date they are due to Cede & Co. may not be assured of timely payment and detail payment notification to the Depositary for subsequent allocation to the noteholders.”

 

Section 7.03                             In case any provision in this Second Supplemental Indenture or in the 2022 Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 7.04                             This Second Supplemental Indenture may be executed in any number of counterparts, each of which will be an original, but such counterparts will together constitute but one and the same Second Supplemental Indenture.  The exchange of copies of this Second Supplemental Indenture and of signature pages by facsimile, .pdf transmission, email or other electronic means shall constitute effective execution and delivery of this Second Supplemental Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile, .pdf transmission, email or other electronic means shall be deemed to be their original signatures for all purposes.

 

Section 7.05                             The Base Indenture, as supplemented and amended by this Second Supplemental Indenture, is in all respects ratified and confirmed, and the Base Indenture and this Second Supplemental Indenture shall be read, taken and construed as one and the same instrument with respect to the 2022 Notes.  All provisions included in this Second Supplemental Indenture supersede any conflicting provisions included in the Base Indenture with respect to the 2022 Notes, unless not permitted by law.  The Trustee accepts the trusts created by the Indenture, as supplemented by this Second Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Indenture, as supplemented by this Second Supplemental Indenture.

 

8

 

Section 7.06                             The provisions of this Second Supplemental Indenture shall become effective as of the date hereof.

 

Section 7.07                             Notwithstanding anything else to the contrary herein, the terms and provisions of this Second Supplemental Indenture shall apply only to the 2022 Notes and shall not apply to any other series of Securities under the Indenture, including, without limitation, the “Notes” under and as defined in the First Supplemental Indenture and this Second Supplemental Indenture shall not and does not otherwise affect, modify, alter, supplement or change the terms and provisions of any other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, including, without limitation, the “Notes” under and as defined in the First Supplemental Indenture.

 

Section 7.08                             The recitals contained herein and in the 2022 Notes shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Second Supplemental Indenture, the 2022 Notes or any Additional 2022 Notes, except that the Trustee represents that it is duly authorized to execute and deliver this Second Supplemental Indenture, authenticate the 2022 Notes and any Additional 2022 Notes and perform its obligations hereunder.  The Trustee shall not be accountable for the use or application by the Company of the 2022 Notes or any Additional 2022 Notes or the proceeds thereof.

 

[Signature Page Follows]

 

9

 

IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed as of the date first above written.

 

	
 
    	
MVC CAPITAL, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Scott Schuenke
    
	
 
    	
Name: Scott Schuenke
    
	
 
    	
Title: Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL ASSOCIATION,   as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Karen Beard
    
	
 
    	
Name: Karen Beard
    
	
 
    	
Title: Vice President
    

 

[Signature page to Second Supplemental Indenture]

 

 

Exhibit A — Form of Global 2022 Note

 

This Security is a Global 2022 Note within the meaning of the Indenture hereinafter referred to and is registered in the name of The Depository Trust Company or a nominee thereof.  This Security may not be exchanged in whole or in part for a Security registered, and no transfer of this Security in whole or in part may be registered, in the name of any Person other than The Depository Trust Company or a nominee thereof, except in the limited circumstances described in the Indenture.

 

Unless this certificate is presented by an authorized representative of The Depository Trust Company to the issuer or its agent for registration of transfer, exchange or payment and such certificate issued in exchange for this certificate is registered in the name of Cede & Co., or such other name as requested by an authorized representative of The Depository Trust Company, any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful, as the registered owner hereof, Cede & Co., has an interest herein.

 

MVC Capital, Inc.

 

	
No. A-1
    	
 
    	
$100,000,000
    
	
 
    	
 
    	
CUSIP No. 553829 409
    
	
 
    	
 
    	
ISIN No. US5538294092
    

 

6.25% Senior Notes due 2022

 

MVC Capital, Inc., a corporation duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of ONE HUNDRED MILLION DOLLARS (U.S. $100,000,000) on November 30, 2022, and to pay interest thereon from November 15, 2017 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly January 15, April 15, July 15 and October 15 in each year, commencing January 15, 2018, at the rate of 6.25% per annum, until the principal hereof is paid or made available for payment.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security is registered at the close of business on the Regular Record Date for such interest, which shall be January 1, April 1, July 1 and October 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.  This Security may be issued as part of a series.

 

Payment of the principal of (and premium, if any) and any such interest on this Security will be made at the Corporate Trust Office of the Trustee in Boston, Massachusetts in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

 

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Exhibit A-1

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

	
Dated:
    	
 
    
	
 
    	
 
    
	
 
    	
MVC CAPITAL, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exhibit A-2

 

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

	
Dated:
    	
 
    
	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL ASSOCIATION,   as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Authorized Signatory
    

 

Exhibit A-3

 

MVC Capital, Inc.

 

6.25% Senior Notes due 2022

 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of February 26, 2013 (herein called the “Base Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and U.S. Bank National Association, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Base Indenture), and reference is hereby made to the Base Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered, as supplemented by the Second Supplemental Indenture, dated as of November 15, 2017, by and between the Company and the Trustee (herein called the “Second Supplemental Indenture,” the Second Supplemental Indenture and the Base Indenture collectively are herein called the “Indenture”). In the event of any conflict between the Base Indenture and the Second Supplemental Indenture, the Second Supplemental Indenture shall govern and control.

 

This Security is one of the series designated on the face hereof, initially limited in aggregate principal amount to $100,000,000. Under a Board Resolution, Officers’ Certificate pursuant to Board Resolutions or an indenture supplement, the Company may from time to time, without the consent of the Holders of Securities, issue additional Securities of this series (in any such case “Additional Securities”) having the same ranking and the same interest rate, maturity and other terms as the Securities.  Any Additional Securities and the existing Securities will constitute a single series under the Indenture and all references to the relevant Securities herein shall include the Additional Securities unless the context otherwise requires. The aggregate amount of outstanding Securities represented hereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions.

 

The Securities of this series are subject to redemption in whole or in part at any time or from time to time, at the option of the Company, on or after November 30, 2019, at a redemption price of 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to the date fixed for redemption.

 

Notice of redemption shall be given in writing and mailed, first-class postage prepaid or by overnight courier guaranteeing next-day delivery, to each Holder of the Securities to be redeemed, not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date, at the Holder’s address appearing in the Security Register.  All notices of redemption shall contain the information set forth in Section 11.04 of the Base Indenture.

 

Any exercise of the Company’s option to redeem the Securities will be done in compliance with the Investment Company Act, and the rules, regulations and interpretations promulgated thereunder, to the extent applicable.

 

If the Company elects to redeem only a portion of the Securities, the Trustee or DTC, as applicable, will determine the method for selecting the particular Securities to be redeemed, in accordance with the Indenture, and in accordance with the rules of any national securities exchange or quotation system on which the 2022 Notes are listed and the Investment Company Act, and the rules and regulations promulgated thereunder, to the extent applicable.  In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

 

Exhibit A-4

 

Unless the Company defaults in payment of the Redemption Price, on and after the Redemption Date, interest will cease to accrue on the 2022 Notes called for redemption.

 

Holders of Securities do not have the option to have the Securities repaid prior to November 30, 2022.

 

The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security or certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain conditions set forth in the Indenture.

 

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default, other than an Event of Default referred to in Section 5.01(v) or Section 5.01(vi) of the Indenture with respect to the Company, with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for sixty (60) days after receipt of such notice, request and offer of indemnity.  The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.  If an Event of Default referred to in Section 5.01(v) or Section 5.01(vi) of the Indenture with respect to the Company has occurred, the entire principal amount of all the 2022 Notes will automatically become due and immediately payable.

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

 

Exhibit A-5

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Securities of this series are issuable only in registered form without coupons in denominations of $25 and any integral multiples of $25 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company, Trustee, or Security Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee, the Security Registrar, and any agent of the Company, the Trustee, or the Security Registrar may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee, the Security Registrar, nor any such agent shall be affected by notice to the contrary.

 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

The Indenture and this Security shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws.

 

Exhibit A-6

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