Document:

EX-10.20

  Exhibit 10.20

  American Eagle Outfitters, Inc. 

  Annual Cash Incentive Compensation Plan

   

  (Adopted by the Compensation Committee of the Board of Directors 

  of American Eagle Outfitters, Inc., effective March 10, 2022)

   

  1.Purpose of this Plan. This American Eagle Outfitters, Inc. Annual Cash Incentive Compensation Plan is intended to attract, retain, motivate and reward Eligible Employees by providing them with the opportunity to earn annual incentive compensation under this Plan related to the Company’s performance. The Plan is designed to motivate such Eligible Employees to achieve certain Company objectives while providing competitive total rewards for key positions and retaining top talent.

   

  2.Definitions. For purposes of this Plan, the following terms shall be defined as follows: 

   

  (a)“Affiliate” means (i) any Subsidiary or parent of the Company or (ii) an entity that directly or through one or more intermediaries controls, is controlled by or is under common control with, the Company, as determined by the Committee.

   

  (b)“Award” means cash incentive compensation earned pursuant to Section 5 of this Plan.  

   

  (c)“Base Salary” means the Participant’s total base salary paid, including overtime wages & wages paid during a leave of absence, during the Performance Period.  

   

  (d)“Board” means the Company’s Board of Directors. 

   

  (e)“Bonus Target” means a percentage of a Participant’s Base Salary for a particular Performance Period. 

   

  (f)“Bonus Target Amount” means an amount equal to the product of (a) the Participant’s Base Salary, multiplied by (b) the Participant’s Bonus Target at fiscal year-end. 

   

  (g)“Cause”  means, unless otherwise determined by the Committee, or otherwise provided in an Award document, as defined in any employment agreement or severance agreement, plan or policy with respect to the Participant and the Company then in effect:

   

  (i)the Participant’s willful and continued failure to substantially perform Participant’s duties;

   

  (ii)any fraudulent conduct by the Participant in connection with the Participant’s duties;

  	 

  (iii)an act that constitutes misconduct resulting in a restatement of the Company’s financial statements due to material non-compliance with any financial reporting requirement);

  	 

  (iv)conviction of, or entrance of a plea of guilty or no contest to a felony under federal or state law; or

   

  (v)the willful violation by the Participant of the Company’s written policies that could reasonably be expected to result in material harm to the business condition or reputation of the Company or any of its Affiliates;

   

  provided, however, that for purposes of this definition, no act or failure to act shall be deemed “willful” unless effected by the Participant not in good faith and without a reasonable belief that such action or failure to act was in or not opposed to the Company’s best interests, and no act or failure to act shall be deemed “willful” if it results from any incapacity of the Participant due to physical or mental illness. As to the grounds stated in the above-mentioned clauses (i) and (v), such grounds will only constitute Cause once the Company has provided Participant with written notice and Participant has failed to cure such issue within 30 days.

  

   

  (h)“Code” means the Internal Revenue Code of 1986, as amended.  References to any provisions of the Code or regulation thereunder shall include any successor provisions and regulations, and reference to regulations includes any applicable guidance or pronouncement of the Department of Treasury and Internal Revenue Service.  

   

  (i)“Committee” means the Compensation Committee of the Board or such other committee as the Board shall appoint from time to time to administer this Plan and to otherwise exercise and perform the authority and functions assigned to the Committee under the terms of this Plan; provided, however, that certain powers and authority of the Committee under this Plan may be delegated to any member of the Company’s Executive Leadership or other employee(s) and, in connection therewith, all references to the Committee in this Plan shall be deemed references to the Company’s Executive Leadership or such employee(s) as it relates to those aspects of this Plan that have been so delegated.  

   

  (j)“Company” means American Eagle Outfitters, Inc., a Delaware corporation (together with is successors and assigns) and all of its Subsidiaries, collectively.  

   

  (k)“Disability” means, except as otherwise defined in an Award document, that the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant’s employer; provided, however, to the extent necessary to avoid tax penalties under Section 409A, “Disability” means “disability” as defined in Section 409(a)(2)(C) of the Code. 

   

  (l)“Eligible Employee” means any officer or full-time or part-time associate of the Company meeting the eligibility requirements set forth in Section 3 of this Plan. 

   

  (m)“Executive Leadership” means an Eligible Employee who has been designated by the Committee as a member of Executive Leadership.

   

  (n)“Maximum Goal Factor” means a percentage established by the Committee with respect to an  Award and a Performance Period and representing the maximum percentage that may be determined to have been attained as a Performance Goal Attainment Factor.

   

  (o)“Participant” means, with respect to each Performance Period, each Eligible Employee selected by the Committee to participate in this Plan for such period.  

   

  (p)“Performance Goal” means the goal(s) (or combined goal(s)), as determined by the Committee to be applicable to a Participant’s Award.  As determined by the Committee, the Performance Goals applicable to an Award may be described in terms of Company-wide objectives and/or objectives that are related to the performance of an individual Participant or of a Subsidiary or division in which the Participant is employed or be established relative to a comparison with other corporations or an external index or indicator, or relative to a comparison with performance in a prior period, as the Committee deems appropriate.  Performance Goals based on one or more financial metrics may be established on a GAAP or adjusted GAAP basis.  Performance Goals may differ among Participants and Awards and may include the following: 

   

   

  (i)earnings or profitability measures (which include net income, operating income, income (loss) per common share from continuing operations, either basic or fully diluted, net income (loss) per common share, either basic or fully diluted, earnings before interest, taxes, depreciation, and amortization, earnings before interest and taxes, any pre-established derivative of revenue (gross, operating, or net), pre-tax operating income, inventory turnover or inventory shrinkage, sales 

  

  growth and volumes, percentage increase in total net revenue or comparable store sales, and economic profit or value created); 

   

  (ii)expense and efficiency measures (which include gross margins, cost of goods sold, mark-ups or mark-downs, operating margins, selling, general and administrative expense, and other pre-established operating expenses); 

   

   

  (iii)return measures (which include total stockholder return, stock price, return on assets, return on investment, return on capital, and return on equity); 

   

   

  (iv)cash flow measures (which include cash flow, free cash flow, cash flow return on investment, and net cash provided by operations); 

   

   

  (v)achievement of balance sheet, income statement, or cash-flow statement objectives; 

   

   

  (vi)strategic or operational business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic expansion or new concept development goals; cost targets; customer satisfaction; employee satisfaction; human resources goals, including staffing, training and development and succession planning; supervision of litigation and information technology; and goals relating to acquisitions or divestitures of Affiliates; and

   

   

  (vii)Other financial, operational, strategic or individual performance criteria, which may include criteria based on environmental, social and governance objectives. 

   

   

  (q)“Performance Goal Attainment Factor” means a percentage ranging from 0% to the Maximum Goal Factor representing the rate at which the Performance Goals have been attained, as determined by the Committee.

   

  (r)“Performance Period” means a fiscal year of the Company or such shorter period as may be designated by the Committee with respect to an Award.  

   

   

  (s)“Plan” means this American Eagle Outfitters, Inc. Annual Cash Incentive Compensation Plan, as may be amended from time to time.  

   

   

  (t)“Retirement” means a termination of service (other than by death, Disability or for Cause) at or after a Participant has achieved a combination of years of age and years of employment by the Company as may be fixed from time to time by the Committee.

   

   

  (u)“Section 409A” means Section 409A of the Code.  

   

   

  (v)“Subsidiary” means any “subsidiary” within the meaning of Rule 405 under the Securities Act of 1933, as amended.  

   

   

  3.Eligibility.  The Committee, in its sole discretion, may grant an Award relating to a given Performance Period to one or more Eligible Employees, as the Committee selects. For avoidance of doubt, Eligible Employees 

  

  may only participate the Plan with respect to one Performance Period at one time, and participation with respect to a particular Performance Period does not guarantee participation in any future Performance Periods under the Plan. Employees who are new hires are eligible to be selected to participate in the Plan as of their hire date, except that an employee with a start date on or after the first day of the fourth fiscal quarter of each year (or such other date established by the Committee at the commencement of the Performance Period) following the commencement of the Performance Period will not be eligible to participate in the Plan with respect to the ongoing Performance Period. If a Participant begins employment with the Company following the commencement of the Performance Period, the amount of an Award Payment, if any that becomes payable may be pro-rated based on the Participant’s date of hire in the Committee’s sole discretion. 

   

  Eligibility to receive an Award under the Plan does not guarantee that the Eligible Employee will actually receive any payment hereunder. 

   

  4.Administration

   

  (a)Power and Authority of the Committee. This Plan shall be administered by the Committee, which shall have full power and authority:

   

  (i)to designate each Performance Period;

   

  (ii)to establish the Performance Goals for each Performance Period and to determine whether and to what extent such Performance Goals have been achieved;

   

  (iii)to determine at any time the cash amount payable with respect to an Award;

   

  (iv)to prescribe, amend and rescind rules and procedures relating to this Plan;

   

  (v)subject to the provisions of this Plan, to delegate to one or more officers, a subcommittee of the Committee or other members of the Board of the Company some of its authority under this Plan and, for such purposes, the delegates shall have the same authority of the Committee hereunder;

   

  (vi)to employ such legal counsel, independent auditors and consultants as it deems desirable for the administration of this Plan and to rely upon any opinion or computation received therefrom;

   

  (vii)to amend, modify, or cancel any Award, and authorize the exchange, substitution, or replacement of Awards; and  

   

  (viii)to make all determinations, and to formulate such procedures, as may be necessary or advisable in the opinion of the Committee for the administration of this Plan.  

   

  (b)Plan Construction and Interpretation. The Committee shall have full power and authority to construe and interpret this Plan and to correct any defect or omission, or reconcile any inconsistency, in this Plan or any Award.

   

  (c)Determinations of Committee Final and Binding. All determinations by the Committee and its delegates in carrying out and administering this Plan and in construing and interpreting this Plan shall be made in the Committee’s and its delegates’ sole discretion and shall be final, binding and conclusive for all purposes and upon all persons interested herein. The Committee’s and its delegates’ decisions regarding the amount of each Award need not be consistent among Participants.

   

  (d)Liability of Committee. No member of the Committee (or its delegates) shall be liable for any action or determination made in good faith with respect to this Plan or any Award, and the members of the Committee (and its delegates) shall be entitled to indemnification and reimbursement in the manner provided in the Company’s Certificate of Incorporation or its Bylaws, as applicable, in each case as 

  

  amended and in effect from time to time. In the performance of its responsibilities with respect to this Plan, the Committee shall be entitled to rely upon information and advice furnished by the Company’s officers and employees, the Company’s accountants, the Company’s legal counsel or any other person the Committee deems necessary, and no member of the Committee shall be liable for any action taken or not taken in good faith reliance upon any such advice.  

   

  5.Awards

   

  (a)Award Terms. At the time an Award is granted pursuant to this Section 5, the Committee shall specify (a) the Participant’s Bonus Target, (b) the Maximum Goal Factor that may be attained upon the achievement of the Performance Goals established hereunder, and (c) the Performance Goal and any applicable adjustments. A Participant’s Bonus Target may be modified from time to time, for example, due to changes in the Company’s financials or salary changes, until the end of the Performance Period.

   

  (b)Performance Goals. Unless otherwise determined by the Committee, Participants may receive between 0% and the Maximum Goal Factor of their Bonus Target Amount based upon the attainment of the Performance Goals. The degree to which a Participant achieves their Bonus Target Amount, if any, represents the degree to which both the Participant and the Company achieve the Performance Goals.

   

   

  (c)Adjustment to Performance Goal Attainment. In determining the Bonus Target Amount earned by a Participant for a given Performance Period, the Committee may, in its discretion, increase, reduce or eliminate, the amount that would otherwise be payable based on the certified level of attained performance of the Performance Goal(s).  In exercising such discretion, the Committee may utilize any such objective or subjective criteria as the Committee deems appropriate in its sole and absolute discretion. Without limiting the generality of the foregoing, the determination of performance with respect to a performance criteria may include or exclude (i) items that are unusual in nature and items that are infrequently occurring, (ii) changes in applicable laws, regulations, or accounting principles, (iii) other events such as restructurings; discontinued operations; asset write-downs; significant litigation or claims, judgments or settlements; acquisitions or divestitures; reorganizations or changes in the corporate structure or capital structure of the Company; foreign exchange gains and losses; change in the fiscal year of the Company; business interruption events; unbudgeted capital expenditures; unrealized investment gains and losses; and impairments; or (iv) such other factors as the Committee may determine.

   

   

  (d)Adjustment for Changes in Employment Position. The Committee may, in its sole discretion, adjust the Bonus Target for a Participant based on changes to a Participant’s position during a Performance Period. 

   

   

  (e)Determination of Award. Following the completion of each Performance Period and prior to payment of any Award, the Committee shall certify in writing whether and the extent to which, in the Committee’s sole discretion, the applicable Performance Goals have been achieved for such Performance Period.  In determining the amount payable to a Participant with respect to the Participant’s Award, the Committee shall retain its sole discretion to modify the Performance Goal Attainment Factors (resulting in a reduction, an increase, or elimination (including to zero) of, the amount otherwise payable to the Participant under the Bonus Award) to take into account recommendations of Executive Leadership or additional factors including factors, if any, that the Committee may deem relevant to the assessment of individual or corporate performance for the Performance Period.

   

   

  (f)Payment of Awards. Awards shall be paid to the Participant as soon as administratively practicable 

  

  following the end of the Performance Period, but in any event, no later than the later of (i) two and one-half months following the end of the Company’s first fiscal year in which the Award is no longer subject to a “substantial risk of forfeiture” (within the meaning of Section 409A) or (ii) two and one-half months following the end of the Participant’s first taxable year in which the Award is no longer to such a substantial risk of forfeiture, unless deferred as described below in this Plan. Awards will be paid in cash as determined by the Committee. Payment of Awards may be subject to such vesting, forfeiture, transfer or such other restrictions (or any combination thereof) as the Committee shall specify.

   

   

  (g)Termination of Employment. Except as otherwise provided in this Section 5(g) or determined by the Committee in its sole discretion, a Participant must be continuously employed throughout the Performance Period and employed by the Company on the date when the Award is paid pursuant to Section 5 of the Plan, in order to be eligible for payment hereunder. A Participant (or the Participant’s estate, as applicable) will be eligible to receive a pro-rated Award in the event of the Participant’s death, Disability, or Retirement, and unless otherwise determined by the Committee, shall be pro-rated based on time employed during the Performance Period and subject to actual performance results, payable at the same time as paid to then-employed Participants. In the case of a deceased Participant, any such Award will be paid to the Participant’s estate. Unless otherwise determined by the Committee, if a Participant’s employment with the Company is terminated for any reason other than death, Disability, or Retirement, all of the Participant’s rights under the Plan shall terminate and the Participant shall not have any right to receive any further payments with respect to any Award granted under the Plan.  

   

  6.Deferral. Subject to applicable laws, including, without limitation, Section 409A, the Committee may (i) require the mandatory deferral of some or all of an Award on terms established by the Committee or (ii) permit a Participant to elect to defer a portion of an Award in accordance with the terms established under any Company deferred compensation plan, as the same may be amended, or under any successor plan.

   

  7.Amendment and Termination. Subject to applicable laws, rules and regulations, the Board or the Committee may, at any time, amend, suspend, discontinue or terminate this Plan. 

   

  8.Miscellaneous

   

  (a)Tax Withholding. The Company shall have the right to deduct from all cash payments made to a Participant, or, if deemed necessary by the Company, from wages or other cash compensation paid to the Participant by the Company, any applicable taxes (including social contributions or similar payments) required to be withheld with respect to such payments, and to take such other action as the Committee may deem advisable to enable the Company and the Participant to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award.

   

  (b)No Rights to Awards or Employment. This Plan is not a contract between the Company and a Participant. No Participant shall have any claim or right to receive Awards under this Plan or give any Participant right to be treated uniformly with other Participants and employees. Nothing in this Plan shall confer upon any employee of the Company any right to continued employment with the Company or interfere in any way with the right of the Company to terminate the employment of any of its employees, in accordance with the laws of the applicable jurisdiction, at any time, with or without cause, including, without limitation, any individual who is then a Participant in this Plan.

   

  (c)Section 409A. The Company intends that this Plan and each Award granted hereunder that is subject to Section 409A shall comply with (or be exempt from) Section 409A and that this Plan shall be interpreted, operated and administered accordingly.  If an Award is subject to Section 409A, (i) distributions shall only be made in a manner and upon an event permitted under Section 409A, (ii) payments to be made upon a termination of employment shall only be made upon a “separation from service” under Section 409A, (iii) unless the Award specifies otherwise, each installment payment shall be treated as a separate payment for purposes of Section 409A, and (iv) in no event shall a 

  

  Participant, directly or indirectly, designate the calendar year in which a distribution is made except in accordance with Section 409A.  Any Award granted under this Plan that is subject to Section 409A and that is to be distributed to a key employee (as defined below for this purpose) upon separation from service shall be administered so that any distribution with respect to such Award shall be postponed for six months following the date of the Participant’s separation from service, if required by Section 409A.  If a distribution is delayed pursuant to Section 409A, the distribution shall be paid within 30 days after the end of the six-month period.  If the Participant dies during such six-month period, any postponed amounts shall be paid within 90 days of the Participant’s death.  The determination of key employees, including the number and identity of persons considered key employees and the identification date, shall be made by the Committee or its delegate each year in accordance with Section 416(i) of the Code and the “specified employee” requirements of Section 409A.  If any provision of this Plan contravenes any regulations or guidance promulgated under Section 409A or could cause any Award to be subject to taxes, interest or penalties under Section 409A, the Board or the Committee may, in its sole discretion, modify this Plan to (i) comply with, or avoid being subject to, Section 409A, (ii) avoid the imposition of taxes, interest and penalties under Section 409A, and/or (iii) maintain, to the maximum extent practicable, the original intent of the applicable provision without violating the provisions of Section 409A. Neither the Board nor the Committee is obligated to modify this Plan and there is no guarantee that any payments will be exempt from interest and penalties under Section 409A. Notwithstanding anything herein to the contrary, in no event shall the Company be liable for the payment of or gross up in connection with any taxes and or penalties owed by the Participant pursuant to Section 409A. Moreover, any discretionary authority that the Board or the Committee may have pursuant to this Plan shall not be applicable to an Award that is subject to Section 409A to the extent such discretionary authority will contravene Section 409A. Although the Company, the Board and the Committee may attempt to avoid adverse tax treatment under Section 409A, none of them makes any representation to that effect and each of them expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment.

   

  (d)Other Compensation. Nothing in this Plan shall preclude or limit the ability of the Company to pay any compensation to a Participant under the Company’s other compensation and benefit plans and programs, including without limitation any equity plan or bonus plan, program or arrangement.

   

  (e)No Limitation on Corporate Actions. Nothing contained in this Plan shall be construed to prevent the Company from taking or not taking any corporate action, whether or not such action could have an adverse effect on any Awards made under this Plan. No Participant, beneficiary or other person shall have any claim against the Company as a result of any such action.

   

  (f)Unfunded Plan. This Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. Prior to the payment of any Award, nothing contained herein shall give any Participant any rights that are greater than those of a general creditor of the Company; provided, however, that the Committee may authorize the creation of trusts or other arrangements to meet the obligations created under this Plan to deliver payment in cash, with respect to Awards hereunder.  Such trusts or other arrangements shall be consistent with the “unfunded” status of the Plan, unless the Committee otherwise determines with the consent of each affected Participant.

   

  (g)Non-Transferability. Except as set forth in Section 8(h) herein, no Participant or beneficiary shall have the power or right to sell, transfer, assign, pledge or otherwise encumber or dispose of the Participant’s interest under this Plan.  

   

  (h)Designation of Beneficiary. Unless otherwise provided by the Committee (or its delegate), a Participant may designate a beneficiary or beneficiaries to receive any payments which may be made following the Participant’s death in accordance with the Company’s policies as in effect from time to time. If a Participant does not designate a beneficiary, or the designated beneficiary or beneficiaries predeceases the Participant, any payments which may be made following the Participant’s death shall be made to the Participant’s estate.

   

  

  (i)Severability; Entire Agreement. If any provision of this Plan or any Award is finally held to be invalid, illegal or unenforceable (whether in whole or in part), such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability, and the remaining provisions shall not be affected thereby; provided, that, if any of such provisions is finally held to be invalid, illegal, or unenforceable because it exceeds the maximum scope determined to be acceptable to permit such provision to be enforceable, such provision shall be deemed to be modified to the minimum extent necessary to modify such scope in order to make such provision enforceable hereunder.  The Plan and any Award contain the entire agreement of the parties with respect to the subject matter thereof and supersede all prior agreements, promises, covenants, arrangements, communications, representations and warranties between them, whether written or oral with respect to the subject matter thereof. 

   

  (j)Expenses. The costs and expenses of administering this Plan shall be borne by the Company.

   

  (k)Forfeiture Provisions. The Committee may condition a Participant’s right to retain cash or other property acquired in connection with an Award upon the Participant’s compliance with specified conditions relating to non-competition, confidentiality of information relating to the Company, non-solicitation of customers, suppliers, and employees of the Company, cooperation in litigation, non-disparagement of the Company and its officers, directors and Affiliates, or other requirements applicable to the Participant, as determined by the Committee, at the time of grant or otherwise, including during specified periods following termination of service.

   

  In the event that the Participant engages in misconduct that causes or partially causes the need for restatement of financial statements that would have resulted in a lower Award where the payment was predicated upon the achievement of certain financial results that were the subject of the restatement, to the extent of the reduction in amount of such Award as determined by the Committee (i) the Award will be cancelled and (ii) the Participant will forfeit the amount paid or payable on the vesting of the Award (and the Participant may be required to return amounts to the Company). The determination of the lower Award must be made by the Committee no later than the end of the third fiscal year following the year for which the inaccurate financial results were measured; provided, that if steps have been taken within such period to restate the Company’s financial or operating results, the time period shall be extended until such restatement is completed. The provisions of this Section 8(k) shall be amended to the extent necessary to comply with final rules issued under the Dodd-Frank Wall Street Reform and Consumer Protection Act by the Securities and Exchange Commission and the principal stock exchange or market on which the Company’s stock is traded.

   

  Without limiting the generality of the foregoing, Awards granted under the Plan are subject to the terms of the Company’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any other policy of the Company that applies to Awards, as they may be in effect from time to time.

   

  By accepting Awards under this Plan, Participants agree and acknowledge that they are obligated to cooperate with, and provide any and all assistance necessary to, the Company to recover or recoup any Award or amounts paid under this Plan subject to clawback as provided hereunder.  Such cooperation and assistance shall include, but is not limited to, executing, completing and submitting any documentation necessary to recover or recoup any Award or amounts paid under this Plan from a Participant’s accounts, or pending or future compensation or Awards.

   

  (l)Governing Law. The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan and any Awards shall be determined in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of laws, and applicable provisions of federal law.Exhibit 4.1

 

DESCRIPTION OF SECURITIES

 

The following
is a brief description of the securities of Monroe Capital Income Plus Corporation (the “Company,” “we,” “our”
or “us”) registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
This description of the terms of our shares of common stock, par value $0.001 (“Shares,” each a “Share”) does
not purport to be complete and is subject to and qualified in its entirety by reference to the applicable provisions of Maryland
General Corporation Law, and the full text of our charter and bylaws. As of December 31, 2021 and the date hereof, our common stock
is the only class of our securities registered under Section 12 of the Exchange Act.

 

General

 

Under the terms of our charter, our authorized
stock consists solely of 100,000,000 Shares, par value $0.001 per Share, and no shares of preferred stock, par value $0.001 per share.
There are no outstanding options or warrants to purchase our stock. No stock has been authorized for issuance under any equity compensation
plan. Under Maryland law, our stockholders generally are not personally liable for our debts or obligations. Under our charter, our board
of directors (the “Board”) is authorized to classify and reclassify any unissued shares of stock into other classes or series
of stock and authorize the issuance of the shares of stock without obtaining stockholder approval. As permitted by the Maryland General
Corporation Law, our charter provides that the Board, without any action by our stockholders, may amend the charter from time to time
to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have authority
to issue.

 

The following are our outstanding classes of securities
as of March 11, 2022:

 

	
            (1)

    Title of
    Class 
	 	(2)

Amount

Authorized	 	 	(3)

Amount Held

by

Us or for

Our Account	 	 	(4)

Amount

Outstanding

Exclusive of

Amounts Shown

Under (3)	 
	Common stock	 	 	100,000,000	 	 	 	—	 	 	 	36,565,162	 

 

Common Stock

 

All shares of our common stock have equal rights
as to earnings, assets, voting, and dividends and other distributions and, when they are issued, will be duly authorized, validly issued,
fully paid and nonassessable. Distributions may be paid to the holders of our common stock if, as and when authorized by our Board and
declared by us out of funds legally available therefor. Shares of our common stock have no preemptive, exchange, conversion or redemption
rights and are freely transferable, except where their transfer is restricted by federal and state securities laws or by contract. In
the event of our liquidation, dissolution or winding up, each share of our common stock would be entitled to share ratably in all of our
assets that are legally available for distribution after we pay all debts and other liabilities and subject to any preferential rights
of holders of our preferred stock, if any preferred stock is outstanding at such time. Each share of our common stock is entitled to one
vote on all matters submitted to a vote of stockholders, including the election of directors. Except as provided with respect to any other
class or series of stock, the holders of our common stock possess exclusive voting power.    

 

Preferred Stock

 

Our
charter authorizes our Board to classify and reclassify any unissued shares of stock into other classes or series of stock, including
preferred stock. The cost of any such reclassification would be borne by our existing common stockholders. Prior to issuance of shares
of each class or series, the Board is required by Maryland law and by our charter to set the terms, preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption
for each class or series. Thus, the Board could authorize the issuance of shares of preferred stock with terms and conditions which could
have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders
of our common stock or otherwise be in their best interest. You should note, however, that any issuance of preferred stock must comply
with the requirements of the Investment Company Act of 1940, as amended (the “1940 Act.”) The 1940 Act limits our flexibility
as to certain rights and preferences of the preferred stock that our charter may provide and requires, among other things, that (1) immediately
after issuance and before any dividend or other distribution is made with respect to our common stock and before any purchase of common
stock is made, such preferred stock together with all other senior securities must not exceed an amount equal to 50% of our total assets
after deducting the amount of such dividend, distribution or purchase price, as the case may be, and (2) the holders of shares of preferred
stock, if any are issued, must be entitled as a class to elect two directors at all times and to elect a majority of the directors if
and so long as dividends on such preferred stock are in arrears by two full years or more. Certain matters under the 1940 Act require
the separate vote of the holders of any issued and outstanding preferred stock. For example, holders of preferred stock would vote separately
from the holders of common stock on a proposal to cease operations as a business development company. We believe that the availability
for issuance of preferred stock will provide us with increased flexibility in structuring future financings and acquisitions. However,
we do not currently have any plans to issue preferred stock.

 

     

     

    

 

Limitation on Liability of Directors and Officers;
Indemnification and Advance of Expenses

 

Maryland law permits a Maryland corporation to
include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money
damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b)
active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our charter contains such a
provision that eliminates directors’ and officers’ liability to the maximum extent permitted by Maryland law, subject to the
requirements of the 1940 Act.

 

Our charter authorizes us, to the maximum extent
permitted by Maryland law and subject to the requirements of the 1940 Act, to indemnify any present or former director or officer or any
individual who, while serving as our director or officer and at our request, serves or has served another corporation, real estate investment
trust, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee, from and
against any claim or liability to which that person may become subject or which that person may incur by reason of his or her service
in any such capacity and to pay or reimburse their reasonable expenses in advance of final disposition of a proceeding. Our bylaws obligate
us, to the maximum extent permitted by Maryland law and subject to the requirements of the 1940 Act, to indemnify any present or former
director or officer or any individual who, while serving as our director or officer and at our request, serves or has served another corporation,
real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner
or trustee and who is made, or threatened to be made, a party to the proceeding by reason of his or her service in that capacity from
and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her service
in any such capacity and to pay or reimburse his or her reasonable expenses in advance of final disposition of a proceeding. Our bylaws
also provide that, to the maximum extent permitted by Maryland law, with the approval of our Board and provided that certain conditions
described in our bylaws are met, we may pay certain expenses incurred by any such indemnified person in advance of the final disposition
of a proceeding upon receipt of an undertaking by or on behalf of such indemnified person to repay amounts we have so paid if it is ultimately
determined that indemnification of such expenses is not authorized under our bylaws. In accordance with the 1940 Act, we will not indemnify
any person for any liability to which such person would be subject by reason of such person’s willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or her office.   

 

Maryland law requires a corporation (unless its
charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise,
in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service in that
capacity. Maryland law permits a corporation to indemnify its present and former directors and officers, among others, against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be
made, or threatened to be made, a party by reason of their service in those or other capacities unless it is established that (a) the
act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith
or (2) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit
in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe
that the act or omission was unlawful. However, under Maryland law, a Maryland corporation may not indemnify for an adverse judgment in
a suit by or in the right of the corporation or for a judgment of liability on the basis that a personal benefit was improperly received
unless, in either, case a court orders indemnification, and then only for expenses. In addition, Maryland law permits a corporation to
advance reasonable expenses to a director or officer in advance of final disposition of a proceeding upon the corporation’s receipt
of (a) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct
necessary for indemnification by the corporation and (b) a written undertaking by him or her or on his or her behalf to repay the amount
paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.

 

We intend to enter into indemnification agreements
with our directors. The indemnification agreements provide our directors the maximum indemnification permitted under Maryland law and
the 1940 Act.

 

Our insurance policy does not currently provide
coverage for claims, liabilities and expenses that may arise out of activities that our present or former directors or officers have performed
for another entity at our request. There is no assurance that such entities will in fact carry such insurance. However, we note that we
do not expect to request our present or former directors or officers to serve another entity as a director, officer, partner or trustee
unless we can obtain insurance providing coverage for such persons for any claims, liabilities or expenses that may arise out of their
activities while serving in such capacities.

 

Certain Provisions of the Maryland General
Corporation Law and Our Charter and Bylaws

 

The Maryland General Corporation Law and our charter
and bylaws contain provisions that could make it more difficult for a potential acquirer to acquire us by means of a tender offer, proxy
contest or otherwise. These provisions are expected to discourage certain coercive takeover practices and inadequate takeover bids and
to encourage persons seeking to acquire control of us to negotiate first with our Board. We believe that the benefits of these provisions
outweigh the potential disadvantages of discouraging any such acquisition proposals because, among other things, the negotiation of such
proposals may improve their terms.

 

     

     

    

 

Classified Board of Directors

 

Our Board is divided into three classes of directors
serving staggered three-year terms. Directors of each class are elected to serve for three-year terms and until their successors are duly
elected and qualify and each year one class of directors is elected by the stockholders. A classified board may render a change in control
of us or removal of our incumbent management more difficult. We believe, however, that the longer time required to elect a majority of
a classified Board will help to ensure the continuity and stability of our management and policies.

 

Election of Directors

 

Our charter and bylaws provide that the affirmative
vote of the holders of a plurality of the outstanding shares of stock entitled to vote in the election of directors cast at a meeting
of stockholders duly called and at which a quorum is present will be required to elect a director. There is no cumulative voting in the
election of directors. Pursuant to our charter, our Board may amend the bylaws to alter the vote required to elect directors.

 

Number of Directors; Vacancies; Removal

 

Our charter provides that the number of directors
will be set by the Board in accordance with our bylaws. Our bylaws provide that a majority of our entire Board may at any time increase
or decrease the number of directors. However, unless our bylaws are amended, the number of directors may never be less than one or more
than twelve. Our charter provides that, at such time as we have at least three independent directors and our common stock is registered
under the Exchange Act, we elect to be subject to the provision of Subtitle 8 of Title 3 of the Maryland General Corporation Law regarding
the filling of vacancies on the Board. Accordingly, at such time, except as may be provided by the Board in setting the terms of any class
or series of preferred stock, any and all vacancies on the Board may be filled only by the affirmative vote of a majority of the remaining
directors in office, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy will serve
for the remainder of the full term of the directorship in which the vacancy occurred and until a successor is elected and qualifies, subject
to any applicable requirements of the 1940 Act.   

 

Our charter provides that a director may be removed
only for cause, as defined in our charter, and then only by the affirmative vote of at least two-thirds of the votes entitled to be cast
in the election of directors.

 

Action by Stockholders

 

Under the Maryland General Corporation Law, stockholder
action can be taken only at an annual or special meeting of stockholders or by unanimous written consent in lieu of a meeting (unless
the charter provides for stockholder action by less than unanimous written consent, which our charter does not). These provisions, combined
with the requirements of our bylaws regarding the calling of a stockholder-requested special meeting of stockholders discussed below,
may have the effect of delaying consideration of a stockholder proposal until the next annual meeting.

 

Advance Notice Provisions for Stockholder
Nominations and Stockholder Proposals

 

Our bylaws provide that with respect to an annual
meeting of stockholders, nominations of persons for election to the Board and the proposal of business to be considered by stockholders
may be made only (1) pursuant to our notice of the meeting, (2) by the Board or (3) by a stockholder who is entitled to vote at the meeting
and who has complied with the advance notice procedures of our bylaws. With respect to special meetings of stockholders, only the business
specified in our notice of the meeting may be brought before the meeting. Nominations of persons for election to the Board at a special
meeting may be made only (1) pursuant to our notice of the meeting, (2) by the Board or (3) provided that the Board has determined that
directors will be elected at the meeting, by a stockholder who is entitled to vote at the meeting and who has complied with the advance
notice provisions of the bylaws.

 

The purpose of requiring stockholders to give
us advance notice of nominations and other business is to afford our Board a meaningful opportunity to consider the qualifications of
the proposed nominees and the advisability of any other proposed business and, to the extent deemed necessary or desirable by our Board,
to inform stockholders and make recommendations about such qualifications or business, as well as to provide a more orderly procedure
for conducting meetings of stockholders. Although our bylaws do not give our Board any power to disapprove stockholder nominations for
the election of directors or proposals recommending certain action, they may have the effect of precluding a contest for the election
of directors or the consideration of stockholder proposals if proper procedures are not followed and of discouraging or deterring a third-party
from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal without regard to whether
consideration of such nominees or proposals might be harmful or beneficial to us and our stockholders.

 

     

     

    

 

Calling of Special Meetings of Stockholders

 

Our bylaws provide that special meetings of stockholders
may be called by our Board and certain of our officers. Additionally, our bylaws provide that, subject to the satisfaction of certain
procedural and informational requirements by the stockholders requesting the meeting, a special meeting of stockholders will be called
by the secretary of the corporation upon the written request of stockholders entitled to cast not less than a majority of all the votes
entitled to be cast at such meeting.

 

Approval of Extraordinary Corporate Action;
Amendment of Charter and Bylaws

 

Under Maryland law, a Maryland corporation generally
cannot dissolve, amend its charter, merge, sell all or substantially all of its assets, engage in a share exchange or engage in similar
transactions outside the ordinary course of business, unless approved by the affirmative vote of stockholders entitled to cast at least
two-thirds of the votes entitled to be cast on the matter. However, a Maryland corporation may provide in its charter for approval of
these matters by a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter. Our charter
generally provides for approval of charter amendments and extraordinary transactions by the stockholders entitled to cast at least a majority
of the votes entitled to be cast on the matter. Our charter also provides that certain charter amendments, any proposal for our conversion,
whether by charter amendment, merger or otherwise, from a closed-end company to an open-end company and any proposal for our liquidation
or dissolution requires the approval of the stockholders entitled to cast at least 80% of the votes entitled to be cast on such matter.
However, if such amendment or proposal is approved by 75% or more of our continuing directors (in addition to approval by our Board),
such amendment or proposal may be approved by a majority of the votes entitled to be cast on such a matter. The “continuing directors”
are defined in our charter as (1) our current directors, (2) those directors whose nomination for election by the stockholders or whose
election by the directors to fill vacancies is approved by a majority of our current directors then on the Board or (3) any successor
directors whose nomination for election by the stockholders or whose election by the directors to fill vacancies is approved by a majority
of continuing directors or the successor continuing directors then in office.   

 

Our charter and bylaws provide that the Board
will have the exclusive power to adopt, alter, amend or repeal any provision of our bylaws and to make new bylaws.

 

No Appraisal Rights

 

Except with respect to appraisal rights arising
in connection with the Maryland Control Share Acquisition Act discussed below, as permitted by the Maryland General Corporation Law, our
charter provides that stockholders will not be entitled to exercise appraisal rights unless a majority of the Board shall determine such
rights apply.

 

Control Share Acquisitions

 

The Maryland General Corporation Law provides
that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved
by a vote of two-thirds of the votes entitled to be cast on the matter (the “Control Share Acquisition Act”). Shares owned
by the acquiror, by officers or by directors who are employees of the corporation are excluded from shares entitled to vote on the matter.
Control shares are voting shares of stock which, if aggregated with all other shares of stock owned by the acquiror or in respect of which
the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle
the acquiror to exercise voting power in electing directors within one of the following ranges of voting power:

 

	 	•	one-tenth or more but less than one-third;

 

	 	•	one-third or more but less than a majority; or

 

	 	•	a majority or more of all voting power.

 

The requisite stockholder approval must be obtained
each time an acquiror crosses one of the thresholds of voting power set forth above. Control shares do not include shares the acquiring
person is then entitled to vote as a result of having previously obtained stockholder approval. A control share acquisition means the
acquisition of control shares, subject to certain exceptions.

 

A person who has made or proposes to make a control
share acquisition may compel the board of directors of the corporation to call a special meeting of stockholders to be held within 50
days of demand to consider the voting rights of the shares. The right to compel the calling of a special meeting is subject to the satisfaction
of certain conditions, including an undertaking to pay the expenses of the meeting. If no request for a meeting is made, the corporation
may itself present the question at any stockholders meeting.

 

If
voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by
the statute, then the corporation may redeem for fair value any or all of the control shares, except those for which voting rights have
previously been approved. The right of the corporation to redeem control shares is subject to certain conditions and limitations, including,
as provided in our bylaws compliance with the 1940 Act. Fair value is determined, without regard to the absence of voting rights for the
control shares, as of the date of the last control share acquisition by the acquirer or of any meeting of stockholders at which the voting
rights of the shares are considered and not approved. If voting rights for control shares are approved at a stockholders meeting and the
acquirer becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights.
The fair value of the shares as determined for purposes of appraisal rights may not be less than the highest price per share paid by the
acquirer in the control share acquisition.

 

     

     

    

 

The Control Share Acquisition Act does not apply
(a) to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (b) to acquisitions
approved or exempted by the charter or bylaws of the corporation. Our bylaws contain a provision exempting from the Control Share Acquisition
Act any and all acquisitions by any person of our shares of stock. There can be no assurance that such provision will not be amended or
eliminated at any time in the future. However, we will amend our bylaws to be subject to the Control Share Acquisition Act only if our
Board determines that it would be in our best interests to do so, including in light of the Board’s fiduciary obligations, applicable
federal and state laws, and the particular facts and circumstances surrounding the Board’s decision.

 

Business Combinations

 

Under Maryland law, “business combinations”
between a corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the
most recent date on which the interested stockholder becomes an interested stockholder (the “Business Combination Act”). These
business combinations include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer
or issuance or reclassification of equity securities. An interested stockholder is defined as:

 

	 	•	any person who beneficially owns 10% or more of the voting power of the corporation’s outstanding voting stock; or

 

	 	•	an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation.

 

A person is not an interested stockholder under
this statute if the board of directors approved in advance the transaction by which the stockholder otherwise would have become an interested
stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or
after the time of approval, with any terms and conditions determined by the board.

 

After the five-year prohibition, any business
combination between the corporation and an interested stockholder generally must be recommended by the board of directors of the corporation
and approved by the affirmative vote of at least:

 

	 	•	80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and

 

	 	•	two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.

 

These super-majority vote requirements do not
apply if the corporation’s common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form
of cash or other consideration in the same form as previously paid by the interested stockholder for its shares.

 

The statute permits various exemptions from its
provisions, including business combinations that are exempted by the board of directors before the time that the interested stockholder
becomes an interested stockholder. Our Board has adopted a resolution that any business combination between us and any other person is
exempted from the provisions of the Business Combination Act, provided that the business combination is first approved by the Board, including
a majority of the directors who are not interested persons as defined in the 1940 Act. This resolution may be altered or repealed in whole
or in part at any time. However, our Board will adopt resolutions so as to make us subject to the provisions of the Business Combination
Act only if our Board determines that it would be in our best interests and if the SEC staff does not object to our determination that
our being subject to the Business Combination Act does not conflict with the 1940 Act. If this resolution is repealed, or the Board does
not otherwise approve a business combination, the statute may discourage others from trying to acquire control of us and increase the
difficulty of consummating any offer.   

 

Conflict with the 1940 Act

 

Our bylaws provide that, if and to the extent
that any provision of the Maryland General Corporation Law, including the Control Share Acquisition Act (if we amend our bylaws to be
subject to such Act) and the Business Combination Act, or any provision of our charter or bylaws conflicts with any provision of the 1940
Act, the applicable provision of the 1940 Act will control.

 

     

     

    

 

 

Dividend Reinvestment Plan

 

We have adopted
a dividend reinvestment plan, pursuant to which stockholders may elect to have their cash dividends and distributions automatically
reinvested in additional Shares, rather than receiving cash dividends and distributions. Stockholders can elect to “opt in”
to the Fund’s dividend reinvestment plan by notifying MC Advisors in writing so that such notice is received by MC Advisors no later
than ten days prior to the record date for a distribution. As a result, if the Board authorizes, and we declare, a cash dividend or other
distribution, then our stockholders who have opted in to our dividend reinvestment plan will have their cash distributions automatically
reinvested in additional Shares rather than receiving the cash dividend or other distribution. Any fractional Share otherwise issuable
to a participant in the dividend reinvestment plan will instead be paid in cash.

 

The number of shares to be issued to a stockholder under the dividend
reinvestment plan will be determined by dividing the total dollar amount of the distribution payable to such stockholder by the net asset
value per Share, as of the last day of our calendar quarter immediately preceding the date such distribution was declared. We intend to
use newly issued Shares to implement the plan.

 

A registered stockholder that wishes to participate in the dividend
reinvestment plan must elect to have his, her, or its dividend reinvested in additional Shares by notifying MC Advisors in writing so
that such notice is received by MC Advisors no later than ten days prior to the record date for distributions to the stockholders.

 

There are no brokerage charges or other charges to stockholders who
participate in the plan.

  

The plan is terminable by us upon notice in writing mailed to each
stockholder of record at least 30 days prior to any record date for the payment of any distribution by us

 

Application for Exemptive Relief to Offer Multiple Classes of our
Common Stock 

 

We have submitted an application to the SEC requesting exemptive relief
that would permit us to offer multiple classes of common stock that may have varying sales loads and asset-based service and/or distribution
fees. To the extent we receive such relief and offer multiple class of shares, we will be subject to additional regulatory requirements
and will incur additional costs related to such additional regulatory requirements. No assurances can be given that we will receive such
requested exemptive relief.

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