Document:

orccii-ex1015_168.htm

Exhibit 10.15

 

SECOND AMENDED AND RESTATED 
INVESTMENT ADVISORY AGREEMENT

BETWEEN

OWL ROCK CAPITAL CORPORATION II

AND

OWL ROCK CAPITAL ADVISORS LLC

 

This Second Amended and Restated Investment Advisory Agreement (the “Agreement”) is made as of February 19, 2020, by and between Owl Rock Capital Corporation II, a Maryland corporation (the “Company”), and Owl Rock Capital Advisors LLC, a Delaware limited liability company (the “Adviser”). 

WHEREAS, the Company is a closed-end management investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “Investment Company Act”); 

WHEREAS, the Adviser is an investment adviser that is registered under the Investment Advisers Act of 1940 (the “Advisers Act”); 

WHEREAS, the Company and the Adviser entered into the Investment Advisory Agreement, dated February 6, 2017 (the “Original Agreement”) which was amended and restated pursuant to the Amended and Restated Investment Advisory Agreement, dated November 6, 2018 (the “First A&R Agreement”); and

WHEREAS, the Company and the Adviser desire to amend and restate the First A&R Agreement in its entirety to reflect, among other things, a reduction in the Management Fee and the Incentive Fee (each as defined herein). 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties hereby agree as follows: 

	
1)
	
Duties of the Adviser

	
 
	
a)
	
The Company hereby employs the Adviser to act as the investment adviser to the Company and to manage the investment and reinvestment of the assets of the Company, subject to the supervision of the Board of Directors of the Company (the “Board”), for the period and upon the terms herein set forth, (x) in accordance with the investment objective, policies and restrictions that are set forth in the Company’s registration statement on Form N-2 (as amended from time to time, the “Registration Statement”) to be filed with the Securities and Exchange Commission (the “SEC”); (y) in accordance with all other applicable federal and state laws, rules and regulations, and the Company’s charter as may be amended from time to time (the “Charter”) and by-laws as the same shall be amended from time to time; and (z) in accordance with the Investment Company Act. Without limiting the generality of the foregoing, the Adviser shall, during the term and subject to the provisions of this Agreement: (i) determine the composition and allocation of the portfolio of the Company, the nature and timing of the changes therein and the manner of implementing such changes; (ii) identify/source, research, evaluate and negotiate the structure of the investments made 

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Exhibit 10.15

 

	
 
		
by the Company; (iii)  execute, close, service and monitor the Company’s investments; (iv) determine the securities, loans and other assets that the Company will purchase, retain, or sell; (v) use reasonable endeavors to ensure that the Company’s investments consist mainly of shares, securities, loans or currencies (or derivative contracts relating thereto), which for the avoidance of doubt may include notes and other evidences of indebtedness (whether or not such investment are securities as defined under the Securities Act); (vi) perform due diligence on prospective portfolio companies; and (vii) provide the Company with such other investment advisory, research, and related services as the Company may, from time to time, reasonably require for the investment of its funds, including providing operating and managerial assistance to the Company and its portfolio companies as required. Subject to the supervision of the Board, the Adviser shall have the power and authority on behalf of the Company to effectuate its investment decisions for the Company, including the execution and delivery of all documents relating to the Company’s investments and the placing of orders for other purchase or sale transactions on behalf of the Company. In the event that the Company determines to acquire debt financing, the Adviser will arrange for such financing on the Company’s behalf, subject to the oversight and approval of the Board. If it is necessary or appropriate for the Adviser to make investments on behalf of the Company through a special purpose vehicle, the Adviser shall have authority to create or arrange for the creation of such special purpose vehicle and to make such investments through such special purpose vehicle (in accordance with the Investment Company Act). 

	
 
	
b)
	
The Adviser hereby accepts such employment and agrees during the term hereof to render the services described herein for the compensation provided herein. 

	
 
	
c)
	
The Adviser shall for all purposes herein provided be deemed to be an independent contractor and, except as expressly provided or authorized herein, shall have no authority to act for or represent the Company in any way or otherwise be deemed an agent of the Company. 

	
 
	
d)
	
Subject to review by, and the overall control of, the Board, the Adviser shall keep and preserve for the period required by the Investment Company Act any books and records relevant to the provision of its investment advisory services to the Company and shall specifically maintain all books and records in accordance with Section 31(a) of the Investment Company Act with respect to the Company’s portfolio transactions and shall render to the Board such periodic and special reports as the Board may reasonably request or as may be required under applicable federal and state law, and shall make such records available for inspection by the Board and its authorized agents, at any time and from time to time during normal business hours. The Adviser agrees that all records that it maintains for the Company are the property of the Company and will surrender promptly to the Company any such records upon the Company’s request and termination of this Agreement pursuant to Section 10, provided that the Adviser may retain a copy of such records. 

	
 
	
e)
	
The Adviser shall be primarily responsible for the execution of any trades in securities or loans in the Company’s portfolio and the Company’s allocation of brokerage commissions. 

	
 
	
f)
	
The Adviser shall, upon request by an official or agency administering the securities laws of a state (a “State Administrator”), submit to such State Administrator the reports and 

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Exhibit 10.15

 

	
 
		
statements required to be distributed to the Company’s stockholders pursuant to this Agreement, any registration statement filed with the SEC and applicable federal and state law.

	
 
	
g)
	
The Adviser has a fiduciary responsibility and duty to the Company and the Company’s stockholders for the safekeeping and use of all the funds and assets of the Company, whether or not in the Adviser’s immediate possession or control. The Adviser shall not employ, or permit another to employ, such funds or assets except for the exclusive benefit of the Company. The Adviser shall not, by entry into an agreement with any stockholder of the Company or otherwise, contract away the fiduciary obligation owed to the Company and the Company’s stockholders under common law. 

	
2)
	
Company’s Responsibilities and Expenses Payable by the Company 

	
 
	
a)
	
Except as otherwise provided herein or in the Administration Agreement (the “Administration Agreement”), dated February 6, 2017, between the Company and the Adviser (the Adviser, in its capacity as the administrator, the “Administrator”), the Adviser shall be solely responsible for the compensation of its investment professionals and employees and all overhead expenses of the Adviser (including rent, office equipment and utilities). 

	
 
	
b)
	
The Company, either directly or through reimbursement to the Adviser, shall bear all other costs and expenses of its operations, administration and transactions, including (without limitation): expenses deemed to be “organization and offering expenses” of the Company for purposes of Conduct Rule 2310(a)(12) of the Financial Industry Regulatory Authority (for purposes of this Agreement, such expenses, exclusive of commissions, the dealer manager fee, any discounts and other similar expenses paid by investors at the time of sale of the stock of the Company, are hereinafter referred to as “Organization and Offering Costs”); corporate and organizational expenses relating to offerings of shares of Common Stock, subject to limitations included in the Agreement; the cost of calculating the Company’s net asset value, including the cost of any third-party valuation services; the cost of effecting any sales and repurchases of the Common Stock and other securities; fees and expenses payable under any dealer manager agreements, if any; debt service and other costs of borrowings or other financing arrangements; costs of hedging; expenses, including travel expense, incurred by the Adviser, or members of the Investment Team, or payable to third parties, performing due diligence on prospective portfolio companies and, if necessary, enforcing the Company’s rights; escrow agent, transfer agent and custodial fees and expenses; fees and expenses associated with marketing efforts; federal and state registration fees, any stock exchange listing fees and fees payable to rating agencies; federal, state and local taxes; independent directors’ fees and expenses, including certain travel expenses; costs of preparing financial statements and maintaining books and records and filing reports or other documents with the SEC (or other regulatory bodies) and other reporting and compliance costs, including registration fees, listing fees and licenses, and the compensation of professionals responsible for the preparation of the foregoing; the costs of any reports, proxy statements or other notices to stockholders (including printing and mailing costs), the costs of any stockholder or director meetings and the compensation of personnel responsible for the preparation of the foregoing and related matters; 

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commissions and other compensation payable to brokers or dealers; research and market data; fidelity bond, directors and officers errors and omissions liability insurance and other insurance premiums; direct costs and expenses of administration, including printing, mailing, long distance telephone and staff; fees and expenses associated with independent audits, outside legal and consulting costs; costs of winding up; costs incurred in connection with the formation or maintenance of entities or vehicles to hold the Company’s assets for tax or other purposes; extraordinary expenses (such as litigation or indemnification); and costs associated with reporting and compliance obligations under the Advisers Act and applicable federal and state securities laws.  

Notwithstanding anything to the contrary contained herein, the Company shall reimburse the Adviser (or its affiliates) for an allocable portion of the compensation paid by the Adviser (or its affiliates) to the Company’s Chief Compliance Officer and Chief Financial Officer and their respective staffs (based on a percentage of time such individuals devote, on an estimated basis, to the business affairs of the Company).

Notwithstanding the foregoing, the Company shall not be liable for Organization and Offering Costs to the extent that Organization and Offering Costs, together with all prior Organization and Offering Costs, exceed 1.5% of the aggregate gross proceeds from the offering of the Company’s securities. 

	
 
	
c)
	
In addition to the compensation paid to the Adviser pursuant to Section 3, the Company shall reimburse the Adviser for all expenses of the Company incurred by the Adviser as well as the actual cost of goods and services used for or by the Company and obtained from entities not affiliated with the Adviser. The Adviser may be reimbursed for the administrative services performed by it on behalf of the Company pursuant to any separate administration or co-administration agreement with the Adviser; provided, however, the reimbursement shall be an amount equal to the lower of the Adviser’s actual cost or the amount the Company would be required to pay third parties for the provision of comparable administrative services in the same geographic location; and provided, further, that such costs are reasonably allocated to the Company on the basis of assets, revenues, time records or other methods conforming with U.S. generally accepted accounting principles. No reimbursement shall be permitted for services for which the Adviser is entitled to compensation by way of a separate fee. Excluded from the allowable reimbursement shall be: 

	
 
	
i)
	
rent or depreciation, utilities, capital equipment, and other administrative items of the Adviser; and 

	
 
	
ii)
	
salaries, fringe benefits, travel expenses and other administrative items incurred or allocated to any Controlling Person of the Adviser. The term “Controlling Person” shall mean a person, whatever his or her title, who performs functions for the Adviser similar to those of (a) the chairman or other member of a board of directors, (b) executive officers or (c) those holding 10% or more equity interest in the Adviser, or a person having the power to direct or cause the direction of the Adviser, whether through the ownership of voting securities, by contract or otherwise.

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Exhibit 10.15

 

	
3)
	
Compensation of the Adviser

     The Company agrees to pay, and the Adviser agrees to accept, as compensation for the services provided by the Adviser hereunder, a base management fee (the “Management Fee”) and an incentive fee (the “Incentive Fee”) as hereinafter set forth. The Adviser may, in its sole discretion, elect or agree to temporarily or permanently waive, defer, reduce or modify, in whole or in part, the Management Fee and/or the Incentive Fee. The Company shall make any payments due hereunder to the Adviser or to the Adviser’s designee as the Adviser may otherwise direct. See Annex A for examples of how these fees are calculated.

	
 
	
a)
	
The Management Fee will be calculated at an annual rate of 1.50% of the average value of the Company’s gross assets, excluding cash and cash-equivalents but including assets purchased with borrowed amounts at the end of the two most recently completed calendar quarters. The Management Fee will be payable quarterly in arrears. All or any part of the Management Fee not taken as to any quarter shall be deferred without interest and may be taken in any such other quarter prior to the occurrence of a liquidity event (as such term is defined in the Registration Statement) as the Adviser shall determine. The Management Fee for any partial quarter shall be appropriately prorated.

The determination of gross assets will reflect changes in the fair value of the Company’s portfolio investments.  The fair value of derivatives and swaps held in the Company’s portfolio, which will not necessarily equal the notional value of such derivatives and swaps, will be included in the calculation of gross assets.

	
 
	
b)
	
The Incentive Fee shall consist of two parts, as follows: 

	
 
	
i)
	
The first part of the Incentive Fee (the “Incentive Fee on Income”) will be calculated and payable quarterly in arrears based on the Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter. In the case of a liquidation of the Company or if this Agreement is terminated, the Incentive Fee on Income will also become payable as of the effective date of the event. The Incentive Fee on Income for each calendar quarter will be calculated as follows:

	
 
	
(1)
	
No Incentive Fee on Income will be payable in any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed a quarterly return to investors of 1.5% per quarter on the Company’s Adjusted Capital (the “Quarterly Preferred Return”).

	
 
	
(2)
	
All of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds the Quarterly Preferred Return, but is less than or equal to 1.818% (the “Upper Level Breakpoint”), of the Company’s Adjusted Capital in any quarter, will be payable to the Adviser. This portion of the Incentive Fee on Income is referred to as the “catch-up.” It is intended to provide an incentive fee of 17.5% on all of the Company’s Pre-Incentive Fee Net Investment Income when the Pre-Incentive Fee Net Investment Income reaches 1.818% of our Adjusted Capital in any quarter, measured as of the end of the immediately preceding calendar quarter. The Quarterly Preferred Return of 1.5% and Upper Level Breakpoint of 1.818% are also adjusted for the actual number of days each calendar quarter.

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Exhibit 10.15

 

	
 
	
(3)
	
For any quarter in which our Pre-Incentive Fee Net Investment Income exceeds 1.818% of our Adjusted Capital, the Incentive Fee on Income will equal 17.5% of the amount of our Pre-Incentive Fee Net Investment Income, because the Quarterly Preferred Return and catch up will have been achieved.

“Pre-Incentive Fee Net Investment Income” is defined as investment income and any other income, accrued during the calendar quarter, minus operating expenses for the calendar quarter, including the Management Fee, expenses payable under this Agreement and the Administration Agreement, any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee. Pre-Incentive Fee Net Investment Income does not include any expense support payments or any reimbursements by the Company of expense support payments, or any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

“Adjusted Capital” is defined as the cumulative proceeds generated from the sales of the Company’s common stock, including proceeds from the Company’s distribution reinvestment plan, net of upfront sales load (up-front selling commissions and dealer manager fees) reduced for (1) distributions paid to the Company’s stockholders that represent a return of capital on a tax basis and (2) amounts paid for share repurchases pursuant to the Company’s share repurchase program, if any, measured at the end of the immediately preceding calendar quarter.  

	
 
	
ii)
	
The second part of the Incentive Fee (the “Incentive Fee on Capital Gains”) will be determined and payable in arrears as of the end of each calendar year of the Company (or upon termination of this Agreement as set forth below), and will equal 17.5% of the Company’s realized capital gains, if any, on a cumulative basis from inception through the end of such calendar year, net of all realized capital losses and unrealized capital depreciation on a cumulative basis, minus the aggregate amount of any previously paid Incentive Fee on Capital Gains as calculated in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).  

 

For purposes of computing the Incentive Fee on Income and the Incentive Fee on Capital Gains, the calculation methodology will look through derivative financial instruments or swaps as if the Company owned the reference assets directly, in the manner described above. With respect to the calculation of quarterly Pre-Incentive Fee Net Investment Income for purposes of calculating the Incentive Fee on Income, net interest, if any, associated with a derivative or swap (which is defined as the difference between (i) the interest income and transaction fees received in respect of the reference assets of the derivative or swap and (ii) all interest and other expenses paid by us to the derivative or swap counterparty) will be included in calculating the Incentive Fee on Income. The notional value of any such derivatives or swaps is not used for these purposes. With respect to the calculation of the Incentive Fee on Capital Gains, realized gains and realized losses on the disposition of any reference assets, as well as unrealized depreciation on reference assets retained in the derivative or swap, will be included on a cumulative basis in calculating the Incentive Fee on Capital Gains.

	
4)
	
Covenants of the Adviser

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Exhibit 10.15

 

	
 
	
a)
	
The Adviser agrees that it will remain registered as an investment adviser under the Advisers Act so long as the Company maintains its election to be regulated as a BDC under the Investment Company Act. The Adviser agrees that its activities will at all times be in compliance in all material respects with all applicable federal and state laws governing its operations and investments. 

	
 
	
b)
	
The Adviser shall prepare or shall cause to be prepared and mailed or delivered by any reasonable means, including an electronic medium, a copy of the Company’s Annual Report on Form 10-K, filed by the Company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to each stockholder as of a record date after the end of the fiscal year within 120 days after the end of the fiscal year to which it relates that shall include:  (i) financial statements prepared in accordance with U.S. GAAP which are audited and reported on by independent certified public accountants; (ii) a report of the material activities of the Company during the period covered by the report; (iii) where forecasts have been provided to the Company’s stockholders, a table comparing the forecasts previously provided with the actual results during the period covered by the report; and (iv) a report setting forth distributions to Company’s stockholders for the period covered thereby and separately identifying distributions from:  (A) cash flow from operations during the period; (B) cash flow from operations during a prior period which have been held as reserves; (C) proceeds from disposition of assets; and (D) reserves from the gross proceeds.  Such Annual Report on Form 10-K must also contain a breakdown of the costs reimbursed to the Adviser.  The Company shall take reasonable steps to assure that:  (v) within the scope of the annual audit of the Company’s financial statements, the independent certified public accountants preparing such Annual Report on Form 10-K will issue a special report on the allocation of such costs to the Company in accordance with this Agreement; (w) the special report shall be in accordance with the American Institute of Certified Public Accountants United States Auditing Standards relating to special reports; (x) the additional costs of such special report will be itemized and may be reimbursed to the Adviser by the Company in accordance with this Section 4(b) only to the extent that such reimbursement, when added to the cost for administrative services rendered, does not exceed the competitive rate for such services as determined above; (y) the special report shall at minimum provide a review of the time records of individual employees, the costs of whose services were reimbursed and the specific nature of the work performed by each such employee; and (z) the prospectus, prospectus supplement or periodic report as filed with the SEC shall disclose in tabular form an itemized estimate of such proposed expenses for the next fiscal year together with a breakdown by year of such expenses reimbursed in each of the last five public programs formed by the Adviser and subject to the Omnibus Guidelines published by the North American Securities Administrators Association on May 7, 2007.

	
 
	
c)
	
The Adviser shall prepare or shall cause to be prepared and mailed or delivered to each Company stockholder within 60 days after the end of each fiscal quarter of the Company a Quarterly Report on Form 10-Q filed by the Company under the Exchange Act.

	
 
	
d)
	
The Adviser shall prepare or shall cause to be prepared and mailed or delivered within 75 days after the end of each calendar year of the Company to each person who was at any time during such calendar year a Company stockholder all information pertaining to such 

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Exhibit 10.15

 

	
 
		
stockholder’s investment in the Company necessary for the preparation of such person’s federal income tax return.

	
 
	
e)
	
The Adviser shall, upon written request of any State Administrator, submit any of the reports and statements to be prepared and distributed by it pursuant to this Section 4 to such State Administrator.

	
 
	
f)
	
In performing its duties hereunder, the Adviser shall cause the Company to provide for adequate reserves for normal replacements and contingencies (but not for the payment of fees payable to the Adviser described in Section 3 of the Agreement) by causing the Company to retain a reasonable percentage of proceeds from offerings and revenues.

	
 
	
g)
	
From time to time and not less than quarterly, the Company shall cause the Adviser to review the Company’s accounts to determine whether cash distributions are appropriate.  The Company may, subject to authorization by the Board, distribute pro rata to the Company’s stockholders funds which the Board deems unnecessary to retain in the Company. The Board of Directors may from time to time authorize the Company to declare and pay to the Company’s stockholders such dividends or other distributions, in cash or other assets of the Company or in securities of the Company, including in shares of one class or series payable to the holders of the shares of another class or series, or from any other source as the Board of Directors in its discretion shall determine. Any such cash distributions to the Adviser shall be made only in conjunction with distributions to stockholders and as a result of any shares held by the Adviser.  All such cash distributions shall be made only out of funds legally available therefor pursuant to the Maryland General Corporation Law, as amended from time to time.

	
 
	
h)
	
The Adviser shall, in its sole discretion, temporarily place proceeds from offerings by the Company of its equity securities into short-term, highly liquid investments which, in its reasonable judgment, afford appropriate safety of principal during such time as it is determining the composition and allocation of the portfolio of the Company and the nature, timing and implementation of any changes thereto pursuant to Section 1 of the Agreement; provided however, that the Adviser shall be under no fiduciary obligation to select any such short-term, highly liquid investment based solely on any yield or return of such investment. The Adviser shall cause any proceeds of the offering of Company securities not committed for investment within the later of two years from the date of effectiveness of the Registration Statement or one year from termination of the offering, unless a longer period is permitted by the applicable State Administrator, to be paid as a distribution to the stockholders of the Company as a return of capital without deduction of Front End Fees.

	
5)
	
Excess Brokerage Commissions

	
 
	
a)
	
The Adviser is hereby authorized, to the fullest extent now or hereafter permitted by law, to cause the Company to pay a member of a national securities exchange, broker or dealer an amount of commission for effecting a securities or loan transaction in excess of the amount of commission another member of such exchange, broker or dealer would have charged for effecting that transaction, if the Adviser determines in good faith, taking into account such factors as price (including the applicable brokerage commission or dealer 

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Exhibit 10.15

 

	
 
		
spread), size of order, difficulty of execution, and operational facilities of the firm and the firm’s risk and skill in positioning blocks of securities, that such amount of commission is reasonable in relation to the value of the brokerage and/or research services provided by such member, broker or dealer, viewed in terms of either that particular transaction or its overall responsibilities with respect to the Company’s portfolio, and constitutes the best net results for the Company. 

	
 
	
b)
	
All Front End Fees (as defined in the Company’s Charter) shall be reasonable and shall not exceed 18% of the gross proceeds of any offering and sale of the Company’s shares, regardless of the source of payment. Any reimbursement to the Adviser or any other person for deferred Organizational and Offering Expenses (as defined in the Company’s Charter), including any interest thereon, if any, will be included within this 18% limitation. 

	
 
	
c)
	
The Adviser shall cause the Company to commit at least 82% of the gross proceeds of any offering and sale of the Company’s shares towards the investment or reinvestment of assets and reserves as set forth in Section 4(f) on behalf of the Company. The remaining proceeds may be used to pay Front End Fees.

	
6)
	
Investment Team

     The Adviser shall manage the Company’s portfolio through a team of investment professionals (the “Investment Team”) primarily dedicated to the Company’s business, in cooperation with the Company’s Chief Executive Officer. The Investment Team shall be comprised of senior personnel of the Adviser, supported by and with access to the investment professionals, analytical capabilities and support personnel of the Adviser. 

	
7)
	
Limitations on the Employment of the Adviser

     The services of the Adviser to the Company are not exclusive, and the Adviser may engage in any other business or render similar or different services to others including, without limitation, the direct or indirect sponsorship or management of other investment-based accounts or commingled pools of capital, however structured, having investment objectives similar to those of the Company, so long as its services to the Company hereunder are not impaired thereby, and nothing in this Agreement shall limit or restrict the right of any manager, partner, officer or employee of the Adviser to engage in any other business or to devote his or her time and attention in part to any other business, whether of a similar or dissimilar nature, or to receive any fees or compensation in connection therewith (including fees for serving as a director of, or providing consulting services to, one or more of the Company’s portfolio companies, subject to applicable law). So long as this Agreement or any extension, renewal or amendment remains in effect, the Adviser shall be the only investment adviser for the Company, subject to the Adviser’s right to enter into sub-advisory agreements as set forth herein. The Adviser assumes no responsibility under this Agreement other than to render the services called for hereunder. It is understood that directors, officers, employees and stockholders of the Company are or may become interested in the Adviser and its affiliates, as directors, officers, employees, partners, stockholders, members, managers or otherwise, and that the Adviser and directors, officers, employees, partners, stockholders, members and managers of the Adviser and its affiliates are or may become similarly interested in the Company as stockholders or otherwise. 

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Exhibit 10.15

 

	
8)
	
Responsibility of Dual Directors, Officers and/or Employees

     If any person who is a manager, partner, officer or employee of the Adviser is or becomes a director, officer and/or employee of the Company and acts as such in any business of the Company, then such manager, partner, officer and/or employee of the Adviser shall be deemed to be acting in such capacity solely for the Company, and not as a manager, partner, officer or employee of the Adviser or under the control or direction of the Adviser, even if paid by the Adviser. 

	
9)
	
Limitation of Liability of the Adviser; Indemnification

	
 
	
a)
	
The Adviser (and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser, including without limitation its sole member) shall not be liable to the Company for any action taken or omitted to be taken by the Adviser in connection with the performance of any of its duties or obligations under this Agreement or otherwise as an investment adviser of the Company (except to the extent specified in Section 36(b) of the Investment Company Act concerning loss resulting from a breach of fiduciary duty (as the same is finally determined by judicial proceedings) with respect to the receipt of compensation for services), and the Company shall indemnify, defend and protect the Adviser (and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser, including without limitation its sole member and the Administrator each of whom shall be deemed a third party beneficiary hereof) (collectively, the “Indemnified Parties”) and hold them harmless from and against all damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Company or its security holders and an administrative or regulatory proceeding against, or investigation of, the Company) arising out of or otherwise based upon the performance of any of the Adviser’s duties or obligations under this Agreement or otherwise as an investment adviser of the Company. Notwithstanding the preceding sentence of this Section 9 to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Company or its security holders to which the Indemnified Parties would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of the Adviser’s duties or by reason of the reckless disregard of the Adviser’s duties and obligations under this Agreement (as the same shall be determined in accordance with the Investment Company Act and any interpretations or guidance by the SEC or its staff thereunder).  

The following provisions in Sections 9(b) – (c) shall not apply in respect of Owl Rock Capital Securities, LLC.

	
 
	
b)
	
Notwithstanding Section 9(a) to the contrary, the Company shall not provide for indemnification of an Indemnified Party for any liability or loss suffered by an Indemnified Party, nor shall the Company provide that any of the Indemnified Parties be held harmless for any loss or liability suffered by the Company, unless all of the following conditions are met:

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Exhibit 10.15

 

	
 
	
i)
	
the Company has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company;

	
 
	
ii)
	
the Company has determined, in good faith, that the Indemnified Party was acting on behalf of or performing services for the Company;

	
 
	
iii)
	
the Company has determined, in good faith, that such liability or loss was not the result of (A) negligence or misconduct, in the case that the Indemnified Party is the Adviser or an Affiliate (as defined in the Articles of Incorporation) of the Adviser, or (B) gross negligence or willful misconduct, in the case that the Indemnified Party is a director of the Company who is not also an officer of the Company or the Adviser or an Affiliate of the Adviser; and

	
 
	
iv)
	
such indemnification or agreement to hold harmless is recoverable only out of the Company’s net assets and not from the Company stockholders.

 

Furthermore, the Indemnified Party shall not be indemnified for any losses, liabilities or expenses arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met:

	
 
	
i)
	
there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the Indemnified Party;

	
 
	
ii)
	
such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnified Party; or

	
 
	
iii)
	
a court of competent jurisdiction approves a settlement of the claims against the Indemnified Party and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which shares of stock of the Company were offered or sold as to indemnification for violations of securities laws.

	
 
	
c)
	
The Company may pay or reimburse reasonable legal expenses and other costs incurred by the Indemnified Party in advance of final disposition of a proceeding only if all of the following are satisfied:

	
 
	
i)
	
the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Company;

	
 
	
ii)
	
the Indemnified Party provides the Company with written affirmation of such Indemnified Party’s good faith belief that the Indemnified Party has met the standard of conduct necessary for indemnification by the Company;

	
 
	
iii)
	
the legal proceeding was initiated by a third party who is not a Company stockholder, or, if by a Company stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement; and

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Exhibit 10.15

 

	
 
	
iv)
	
the Indemnified Party provides the Company with a written agreement to repay the amount paid or reimbursed by the Company, together with the applicable legal rate of interest thereon, if it is ultimately determined that the Indemnified Party did not comply with the requisite standard of conduct and is not entitled to indemnification.

	
10)
	
Effectiveness, Duration and Termination of Agreement

	
 
	
a)
	
This Agreement shall become effective as of the date that the Company meets the minimum offering requirement as such term is defined in the Registration Statement. This Agreement may be terminated at any time, without cause or the payment of any penalty, on 60 days’ written notice, by the vote of a majority of the outstanding voting securities of the Company or by the vote of the Company’s independent directors or, on 120 days’ written notice, by the Adviser. The provisions of Section 9 of this Agreement shall remain in full force and effect, and the Adviser shall remain entitled to the benefits thereof, notwithstanding any termination of this Agreement. Further, notwithstanding the termination or expiration of this Agreement as aforesaid, the Adviser shall be entitled to any amounts owed under Section 3 through the date of termination or expiration, and Section 9 shall continue in force and effect and apply to the Adviser and its representatives as and to the extent applicable. 

	
 
	
b)
	
This Agreement shall continue in effect for two years from the date such minimum offering requirement is satisfied, and thereafter shall continue automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (A) the vote of the Board, or by the vote of a majority of the outstanding voting securities of the Company and (B) the vote of a majority of the Company’s directors who are not parties to this Agreement or “interested persons” (as such term is defined in Section 2(a)(19) of the Investment Company Act) of any such party, in accordance with the requirements of the Investment Company Act. 

	
 
	
c)
	
This Agreement will automatically terminate in the event of its “assignment” (as such term is defined for purposes of Section 15(a)(4) of the Investment Company Act).

	
 
	
d)
	
After the termination of this Agreement, the Adviser shall not be entitled to compensation for further services provided hereunder, except that it shall be entitled to receive from the Company within 30 days after the effective date of such termination all unpaid reimbursements and all earned but unpaid fees payable to the Adviser prior to termination of this Agreement, including any deferred fees.  The Adviser shall promptly upon termination:

	
 
	
i)
	
Deliver to the Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Board;

	
 
	
ii)
	
Deliver to the Board all assets and documents of the Company then in custody of the Adviser; and

	
 
	
iii)
	
Cooperate with the Company to provide an orderly management transition.

12

 

Exhibit 10.15

 

	
 
	
e)
	
Without the approval of holders of a majority of the shares entitled to vote on the matter, the Adviser shall not: (i) amend this Agreement except for amendments that do not adversely affect the rights of the stockholders; (ii) except as otherwise permitted herein, voluntarily withdraw as the Adviser unless such withdrawal would not affect the tax status of the Company and would not materially adversely affect the stockholders; (iii) appoint a new Adviser (other than a sub-adviser pursuant to the terms of this Agreement and applicable law); (iv) sell all or substantially all of the Company’s assets other than in the ordinary course of the Company’s business or as otherwise permitted by law; or (v) cause the merger or other reorganization of the Company except as permitted by law. In the event that the Adviser should withdraw pursuant to (ii) above, the withdrawing Adviser shall pay all expenses incurred as a result of its withdrawal. 

	
 
	
f)
	
The Company may terminate the Adviser’s interest in the Company’s revenues, expenses, income, losses, distributions and capital by payment of an amount equal to the then present fair market value of the terminated Adviser’s interest, determined by agreement of the terminated Adviser and the Company. If the Company and the Adviser cannot agree upon such amount, the parties will submit to binding arbitration which cost will be borne equally by the Adviser and the Company. The method of payment to the terminated Adviser must be fair and must protect the solvency and liquidity of the Company.

	
11)
	
Conflicts of Interest and Prohibited Activities.

	
 
	
a)
	
The Adviser is not hereby granted or entitled to an exclusive right to sell or exclusive employment to sell assets for the Company.

	
 
	
b)
	
The Adviser shall not: (i) receive or accept any rebate, give-up or similar arrangement that is prohibited under applicable federal or state securities laws; (ii) participate in any reciprocal business arrangement that would circumvent provisions of applicable federal or state securities laws governing conflicts of interest or investment restrictions; or (iii) enter into any agreement, arrangement or understanding that would circumvent the restrictions against dealing with affiliates or promoters under applicable federal or state securities laws. 

	
 
	
c)
	
The Adviser shall not directly or indirectly pay or award any fees or commissions or other compensation to any Person engaged to sell shares of the Company’s stock or give investment advice to a potential stockholder; provided, however, that this subsection shall not prohibit the payment to a registered broker-dealer or other properly licensed agent of sales commissions for selling or distributing the Company’s common stock.

	
 
	
d)
	
The Adviser covenants that it shall not permit or cause to be permitted the Company’s funds to be commingled with the funds of any other entity.   However, nothing in this subsection shall prohibit the Adviser from establishing a master fiduciary account pursuant to which separate sub-trust accounts are established for the benefit of affiliated programs, provided that the Company’s funds are protected from the claims of other programs and creditors of such programs.

	
12)
	
Access to Stockholder List

13

 

Exhibit 10.15

 

If a Stockholder requests a copy of the Stockholder List pursuant to Section 10.04 of the Company’s Charter or any successor provision thereto (the “Charter Stockholder List Provision”), the Adviser is hereby authorized to request a copy of the Stockholder List from the Company’s transfer agent and send a copy of the Stockholder List to any Stockholder so requesting in accordance with the Charter Stockholder List Provision. In accordance with Section 9 of this Agreement, the Company shall indemnify, defend and protect the Indemnified Parties and hold them harmless from and against all damages, liabilities, costs and expenses incurred by the Indemnified Parties in or by reason of the Adviser’s refusal to exhibit, produce or mail a copy of the Stockholder List.

	
13)
	
Notices

     Any notice under this Agreement shall be given in writing, addressed and delivered or mailed, postage prepaid, to the other party at its principal office. 

	
14)
	
Amendments

     This Agreement may be amended by mutual consent, but the consent of the Company must be obtained in conformity with the requirements of the Investment Company Act. 

	
15)
	
Certain Definitions

As used in this Agreement, the following terms shall have the following meanings unless the context otherwise requires: 

Approval of a Majority of the Outstanding Voting Securities. The term “Approval of a Majority of the Outstanding Voting Securities” shall mean the affirmative vote, at a duly called and held meeting of stockholders of Company, (a) of the holders of 67% or more of the shares of Company present (in person or by proxy) and entitled to vote at the meeting, if the holders of more than 50% of the outstanding shares of the Company entitled to vote at the meeting are present in person or by proxy or (b) of the holders of more than 50% of the outstanding shares of the Company entitled to vote at the meeting, whichever is less.

	
16)
	
Entire Agreement; Governing Law

     This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof. This Agreement shall be construed in accordance with the laws of the State of Delaware and in accordance with the applicable provisions of the Investment Company Act. In such case, to the extent the applicable laws of the State of Delaware, or any of the provisions herein, conflict with the provisions of the Investment Company Act, the latter shall control. 

[Remainder of page intentionally left blank.]

* * * 

14

 

Exhibit 10.15

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the date above written. 

	
 
	
 
	
 
	
 
	
 

	
 
	
OWL ROCK CAPITAL CORPORATION II
 
	
 

	
 
	
By:  
	
 
	
 

	
 
	
 
	
Name:  
	
Alan Kirshenbaum
	
 

	
 
	
 
	
Title:  
	
Chief Operating Officer 
	
 

	
 

	
 
	
OWL ROCK CAPITAL ADVISORS LLC
 
	
 

	
 
	
By:  
	
 
	
 

	
 
	
 
	
Name:  
	
Alan Kirshenbaum
	
 

	
 
	
 
	
Title:  
	
Chief Operating Officer 
	
 

	
 

  

15

 

Exhibit 10.15

 

Annex A 

Examples of Quarterly Incentive Fee Calculation 

Example 1 — Incentive Fee on pre-incentive fee net investment income for each quarter 

 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Scenarios expressed as a percentage of adjusted capital
	
  
	
Scenario 1
	
 
	
 
	
Scenario 2
	
 
	
 
	
Scenario 3
	
 

	
Pre-incentive fee net investment income
	
  
	
 
	
1.00
	
% 
	
 
	
 
	
1.75
	
% 
	
 
	
 
	
2.50
	
% 

	
Catch up incentive fee (maximum of 0.318%)
	
  
	
 
	
—  
	
  
	
 
	
 
	
(0.25)
	
% 
	
 
	
 
	
(0.318
	
)% 

	
Split incentive fee (17.5% above 1.818%)
	
  
	
 
	
—  
	
  
	
 
	
 
	
—  
	
  
	
 
	
 
	
(0.119
	
)% 

	
 
	
  
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Net Investment income
	
  
	
 
	
1.00
	
% 
	
 
	
 
	
1.50
	
% 
	
 
	
 
	
2.06
	
% 

	
 
	
  
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

Scenario 1 — Incentive Fee on Income 

Pre-incentive fee net investment income does not exceed the 1.5% quarterly preferred return rate, therefore there is no catch up or split incentive fee on pre-incentive fee net investment income. 

Scenario 2 — Incentive Fee on Income 

Pre-incentive fee net investment income falls between the 1.5% quarterly preferred return rate and the upper level breakpoint of 1.818%, therefore the incentive fee on pre-incentive fee net investment income is 100% of the pre-incentive fee above the 1.5% quarterly preferred return. 

Scenario 3 — Incentive Fee on Income 

Pre-incentive fee net investment income exceeds the 1.5% quarterly preferred return and the 1.818% upper level breakpoint provision. Therefore the upper level breakpoint provision is fully satisfied by the 0.318% of pre-incentive fee net investment income above the 1.5% preferred return rate and there is a 17.5% incentive fee on pre-incentive fee net investment income above the 1.818% upper level breakpoint. This ultimately provides an incentive fee which represents 17.5% of pre-incentive fee net investment income. 

Example 2 — Incentive Fee on Capital Gains 

Assumptions 

 

	
 
	
 
	
 

	
Year 1:
	
  
	
No net realized capital gains or losses

	
 
	
 

	
Year 2:
	
  
	
6% realized capital gains and 1% realized capital losses and unrealized capital depreciation; capital gain incentive fee = 17.5% x (realized capital gains for year computed net of all realized capital losses and unrealized capital depreciation at year end)

	
 
	
 
	
 

	
Year 1 Incentive Fee on Capital Gains
	
  
	
= 17.5% x (0)

	
 
	
  
	
= 0

	
 
	
  
	
= No Incentive Fee on Capital Gains

	
 
	
 

	
Year 2 Incentive Fee on Capital Gains
	
  
	
= 17.5% x (6% -1%)

	
 
	
  
	
= 17.5% x 5%

	
 
	
  
	
= 0.875%

 

A-1EX-10.29

 Exhibit 10.29 

MIDDLEFIELD BANC CORP. 

2017 OMNIBUS EQUITY PLAN 

STOCK AWARD AGREEMENT 

1.    Number of Shares Awarded. Middlefield Banc Corp. (“Middlefield”), an Ohio
corporation, hereby awards to                  (the “Participant”) the right to become the owner of
         shares of Middlefield common stock if the terms and conditions of this Stock Award Agreement are satisfied, subject to a potential increase to as many as shares (125%
maximum) based on satisfaction of the performance conditions of section 3(b). The number of shares awarded will be adjusted by the Plan Committee to account for stock dividends, stock splits, or other changes in capital structure. The Participant is
not and will not be the owner of the shares and the shares are not and will not be outstanding until the date when the conditions to the Participant’s entitlement to the shares are satisfied, as provided in section 3. This award is subject to
the terms and conditions of the 2017 Omnibus Equity Plan and this Stock Award Agreement. Terms that are defined in the 2017 Omnibus Equity Plan are used in this Stock Award Agreement as they are defined in the 2017 Omnibus Equity Plan. By entering
into this Stock Award Agreement the Participant agrees to the post-employment restrictions of section 14. 

2.    Date of the Award. The date of this Stock Award Agreement is February 25, 2020. 

3.    The Award is Conditional and is Subject to Forfeiture. The award and the Participant’s right to
become the owner of the shares are subject to two conditions, are subject to forfeiture if the conditions are not satisfied, and will not be considered vested until the conditions are satisfied or waived. The two conditions consist of a service
condition and a performance condition. 
 (a)    Service condition. To become owner of the shares
awarded by section 1 the Participant must maintain continuous employment with Middlefield or a Related Entity for three years after the date of this Stock Award Agreement, except in the case of termination within three years occurring because of
death or disability and except for a Change in Control occurring within three years after the date of this Stock Award Agreement. 

(1)    Continuous employment for three years. If the Participant maintains continuous employment
with Middlefield or a Related Entity until the third anniversary of the date of this Stock Award Agreement, the portion of the shares awarded by section 1 for which the performance conditions of section 3(b) are satisfied will be vested and non-forfeitable, the Participant will be the owner of the vested shares, and the Participant will then possess all right, title, and interest in the shares. 

(2)    Exception for death or disability. If the Participant’s employment ends before the third
anniversary because of death or disability, the service condition will be waived and the Participant or the Participant’s estate or designated beneficiary will be entitled to and vested in a portion of the shares awarded under section 1 based
on the degree to which the performance conditions stated in
 section 3(b) are satisfied on the date of the Participant’s death or the date on which the Participant’s employment terminated because of disability. For purposes of this
Stock Award Agreement the term “disability” means, because of a medically determinable physical or mental impairment that can be expected to result in death or that can be expected to last for a continuous period of at least 12
months, (x) the Participant is unable to engage in any substantial gainful activity, or (y) the Participant is receiving income replacement benefits for a period of at least three months under an accident and health plan of
the employer. Medical determination of disability may be made either by the Social Security Administration or by the provider of an accident or health plan covering employees of Middlefield or Related Entity. Upon request of the Plan Committee, the
Participant must submit proof to the Plan Committee of the Social Security Administration’s or provider’s determination. 

(3)    Exception for a Change in Control. If a Change in Control occurs before the third
anniversary, the service condition will be waived, the performance condition of section 3(b) will be waived, and when the Change in Control occurs the Participant will be entitled to and vested in the shares awarded under section 1
(i.e., the number of shares first stated in section 1, not the 125% to which the award may be increased), provided the Participant remains employed by Middlefield or Related Entity on that date. 

  
 1 

 (4)    Effect of failure to satisfy the service
condition; Plan Committee’s right to waive conditions to vesting. If the Participant does not maintain continuous employment with Middlefield or a Related Entity until the third anniversary of the date of this Stock Award Agreement the
section 1 award shall be forfeited in its entirety as of the date the Participant’s employment terminates, except as provided in section 3(a)(2) for termination because of death or disability and except as provided in section 3(a)(3) for a
Change in Control. In its sole discretion, however, the Plan Committee may elect to accelerate the Participant’s vesting in and right to all or a portion of the award when the Participant’s employment terminates, waiving in whole or in
part the service condition of section 3(a), the performance condition of section 3(b), or both. 

(b)    Performance condition. In addition to the service condition of section 3(a), to become owner
of and vested in the shares awarded by section 1 the performance conditions of this section 3(b) must be satisfied, except as provided in section 3(a)(3) in the case of a Change in Control. The performance condition that must be satisfied to become
the owner of and vested in 100% of the shares awarded by section 1 is achievement of an annual average total shareholder return of 10.00% or more in the three-year performance period beginning on January 1, 2020 and ending on December 31,
2022 (or on the date of employment termination if employment terminates because of death or disability), which is referred to hereinafter as the “performance period.” Total shareholder return means the change in the closing price of
Middlefield common stock on the final trading day of the year over the closing price on the final trading day of the preceding year, divided by the closing price on the final trading day of the preceding year, and taking into account cash dividends
during the period. If the annual average total shareholder return for the performance period is positive but less than the goal of 10.00%, the Participant will become owner of and vested in a percentage of the shares awarded by section 1 equal to
the percentage achievement of the 10.00% goal. Shares will be rounded to the nearest whole number. No fractional shares will be issued. If the annual average total shareholder return for the performance period is negative, the Participant will
forfeit all shares awarded. If the annual average total shareholder return for the performance period exceeds 10.00%, the number of shares awarded will increase based on the percentage excess of average annual total shareholder return over the
10.00% goal, up to a maximum of 125%. Exhibit A contains an illustration of the calculation of average total shareholder return. 

(c)    Plan Committee determinations. The Plan Committee has exclusive authority to perform all
calculations that are necessary and exclusive authority to make all determinations that are necessary under this Stock Award Agreement, including but not limited to calculating closing prices, annual return, and average annual total shareholder
return. The Plan Committee may delegate its authority. Actions of the Plan Committee are final and binding. To prevent dilution or enlargement of the benefit intended to be granted to the Participant by this Stock Award Agreement, the Plan Committee
will modify the award of shares under section 1 and total shareholder return calculations under section 3(b) to account for stock dividends, stock splits, and other changes in capitalization occurring during the performance period. 

4.    The Shares Are Not Transferable While Subject to Forfeiture. Until the shares awarded by section 1
become vested and non-forfeitable under section 3, the Participant is not the owner of and is not permitted to sell, transfer, pledge, assign, or otherwise alienate or hypothecate any of the shares or any
interest in the shares. Until that time, Middlefield is entitled to disregard any attempt by the Participant to sell, transfer, pledge, assign, or otherwise alienate or hypothecate any of the shares or any interest in the shares, and any such sale,
transfer, pledge, assignment, or other alienation or hypothecation is void and of no force or effect. 

5.    Rights as a Stockholder. Until the conditions of section 3 are satisfied the Participant will have
none of the associated rights of a stockholder under Ohio law and Middlefield’s Articles of Incorporation and Code of Regulations. Until the conditions of section 3 are satisfied the Participant will not be entitled to exercise voting power and
will not be entitled to cash dividends declared by Middlefield’s board of directors. 
 6.    The 2017
Omnibus Equity Plan Governs. The award of shares and this Stock Award Agreement are subject to the terms and conditions of the 2017 Omnibus Equity Plan, as well as any rules of the Plan Committee under the 2017 Omnibus Equity Plan. The
Participant acknowledges having received a copy of the 2017 Omnibus Equity Plan. The Participant is familiar with the terms and provisions of the 2017 Omnibus Equity Plan and accepts this award subject to all the terms and provisions of the 2017
Omnibus Equity Plan. The Participant agrees to accept as binding, conclusive, and final all decisions or interpretations of Middlefield’s board of directors or Plan Committee having to do with the 2017 Omnibus Equity Plan or this Stock Award
Agreement. 

  
 2 

 7.    Certificates. Provided book entry registration is
allowed by Middlefield’s Articles of Incorporation and Code of Regulations, Middlefield may record the Participant’s ownership of the shares using a book entry system rather than issuing certificates. If certificates are issued, they will
bear any restrictive legends that Middlefield considers necessary or desirable. 
 8.    Entire Agreement.
This Stock Award Agreement and the 2017 Omnibus Equity Plan supersede any and all other prior understandings and agreements, either oral or in writing, between the parties concerning the subject matter and constitute the sole agreement between the
parties relating to the subject matter. All prior negotiations and agreements between the parties concerning the subject matter of this Stock Award Agreement are merged in this Stock Award Agreement. Each party to this Stock Award Agreement
acknowledges that no representations, inducements, promises, or agreements concerning the shares have been made by any party or by anyone acting on behalf of any party that are not contained in this Stock Award Agreement or in the 2017 Omnibus
Equity Plan. Each party acknowledges that any agreement, statement, or promise concerning the shares that is not contained in this Stock Award Agreement or the 2017 Omnibus Equity Plan is not valid, is not binding, and is of no force or effect. 

9.    Modification. Middlefield may change or modify this Stock Award Agreement without the
Participant’s consent or signature if in its sole discretion Middlefield determines that the change or modification is necessary to comply with or to be exempt from the requirements of the Internal Revenue Code of 1986, including but not
limited to section 409A of the Internal Revenue Code of 1986 or any regulations or other Department of Treasury guidance of general application issued under the Internal Revenue Code of 1986. Middlefield may amend the 2017 Omnibus Equity Plan to the
extent permitted by the 2017 Omnibus Equity Plan. The Plan Committee also may modify the award as provided in section 3. 

10.    Headings. The headings in this Stock Award Agreement are solely for convenience of reference and do
not affect the interpretation of this Stock Award Agreement. 
 11.    Notice. All written notices,
requests, and other communications hereunder will be duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid, to the following addresses or to such other address as either party may
designate by like notice. If to Middlefield, notice must be given to Middlefield Banc Corp., 15985 East High Street, P.O. Box 35, Middlefield, Ohio 44062, Attention: Chief Financial Officer, or to such other address as Middlefield designates to the
Participant in writing. If to the Participant, notice must be given to the Participant at the Participant’s address appearing on the signature page of this Stock Award Agreement, or to such other address as the Participant designates to
Middlefield. 
 12.    Taxes. The Participant is hereby advised to consult immediately with his or her own
tax advisor about the tax consequences of this Stock Award Agreement, the method and timing for filing an election to include this award in income under section 83(b) of the Internal Revenue Code of 1986, and the tax consequences of that election.
By executing this Stock Award Agreement, the Participant agrees that if the Participant makes an election to include the award in income under section 83(b) of the Internal Revenue Code of 1986, the Participant will provide Middlefield with written
notice of the election in accordance with the regulations under section 83(b) of the Internal Revenue Code of 1986. 

13.    No Registration Rights. The Participant acknowledges and agrees that Middlefield and its Related
Entities have no obligation to register the Participant’s offer and sale of the shares awarded under this Stock Award Agreement under the Securities Act of 1933 or the securities laws of any state. 

14.    Post-employment restrictions. The restrictions in this section 14 have been negotiated, presented to,
and accepted by the Participant contemporaneous with the offer and acceptance by the Participant of this Stock Award Agreement. 

(a)    Promise of no solicitation. The Participant promises and agrees that during the Restricted
Period (as defined below) and in the Restricted Territory (as defined below) the Participant will11: 
  

 

	1 	 For example, the promise of no solicitation applies if the Participant is conducting prohibited business in the
Restricted Territory or if the entity with, for, or to whom the Participant is conducting prohibited business is located within the Restricted Territory. 

  
 3 

 (1)    not directly or indirectly solicit or
attempt to solicit any Customer (as defined below) to accept or purchase Financial Products or Services (as defined below) of the same nature, kind, or variety as provided to the Customer by Middlefield or a Related Entity during the two years
immediately before the Participant’s employment termination with Middlefield or a Related Entity, 

(2)    not directly or indirectly influence or attempt to influence any Customer, joint venturer, or
other business partner of Middlefield or a Related Entity to alter that person or entity’s business relationship with Middlefield or the Related Entity in any respect, and 

(3)    not accept the Financial Products or Services business of any Customer or provide Financial
Products or Services to any Customer on behalf of anyone other than Middlefield or a Related Entity. 

(b)    Promise of no raiding/hiring. The Participant promises and agrees that during the Restricted
Period the Participant will not solicit or attempt to solicit and will not encourage or induce in any way any Participant, joint venturer, or business partner of Middlefield or a Related Entity to terminate an employment or contractual
relationship with Middlefield or the Related Entity. The Participant agrees that the Participant will not hire any person employed by Middlefield or a Related Entity during the two-year period before
the Participant’s employment termination with Middlefield or a Related Entity or any person employed by Middlefield or a Related Entity during the Restricted Period. 

(c)    Promise of no disparagement. The Participant promises and agrees that during the Restricted
Period the Participant will not cause statements to be made (whether written or oral) that reflect negatively on the business reputation of Middlefield or a Related Entity. 

(d)    Acknowledgment and remedies. The Participant acknowledges and agrees that the provisions of
this section 14 have been negotiated and carefully determined to be reasonable and necessary for the protection of Middlefield’s legitimate business interests. The Participant acknowledges and agrees that a violation of section 14 is likely to
cause immediate and irreparable harm to Middlefield, requiring injunctive relief. If a breach or threatened breach by the Participant of any provision of this Stock Award Agreement occurs, Middlefield and its successors and assigns may without bond
obtain an injunction restraining the Participant from violating the terms of this Stock Award Agreement, and also may institute an action against the Participant to recover damages from the Participant for the breach. These remedies for default or
breach are in addition to any other remedy or form of redress provided under Ohio law. The parties acknowledge that the provisions of this section 14 survive termination of the employment relationship and are enforceable by Middlefield and its
successors and assigns. The parties agree that if any of the provisions of this section 14 are deemed unenforceable by a court of competent jurisdiction, the unenforceable provisions may be stricken as independent clauses by the court in order to
enforce the remaining territory restrictions and that the intent of the parties is to afford the broadest restriction on post-employment activities as set forth in this Stock Award Agreement. If Middlefield initiates legal action to enforce the
provisions of this section 14 or to recover damages for the Participant’s violation of section 14 and if as a result of that legal action the Participant is held to have violated this section 14, the Participant must reimburse Middlefield for
reasonable costs for enforcement of this section 14, including but not limited to attorneys’ fees. 

(e)    Definitions: 

(1)    “Restricted Period,” as used herein, means the
12-month period immediately after the Participant’s termination and/or separation of employment with Middlefield or a Related Entity, regardless of the reason for termination and/or separation. The
Restricted Period shall be extended in an amount equal to any time period during which a violation of section 14 of this Stock Award Agreement is proven. 

(2)    “Restricted Territory,” as used herein, means all of Geauga, Trumbull, Portage, Ashtabula,
and Franklin Counties in Ohio and the area within a 25-mile radius of any banking office of Middlefield or a Related Entity, if the banking office exists on the date of the Participant’s employment
termination. 

  
 4 

 (3)    “Customer,” as used herein, means any
individual, joint venturer, entity of any sort, or other business partner of Middlefield or a Related Entity with, for, or to whom Middlefield or the Related Entity has provided Financial Products or Services during the last two years of the
Participant’s employment with Middlefield or Related Entity, or any individual, joint venturer, entity of any sort, or business partner whom Middlefield or a Related Entity has identified as a prospective customer of Financial Products or
Services within the last two years of the Participant’s employment with Middlefield or Related Entity. 

(4)    “Financial Products or Services,” as used herein, means any product or service that a
financial institution or a financial holding company could offer by engaging in any activity that is financial in nature or incidental to such a financial activity under section 4(k) of the Bank Holding Company Act of 1956 and that is offered by
Middlefield or a Related Entity on the date of the Participant’s employment termination, including but not limited to banking activities and activities that are closely related and a proper incident to banking, or other products or services of
the type the Participant was involved in during the Participant’s employment with Middlefield or a Related Entity. 

(f)    Enforcement by successors. The provisions of this section are binding upon and enforceable by
Middlefield and any successor to Middlefield, including any person acquiring directly or indirectly all or substantially all of the business, assets, or stock of Middlefield. The Participant’s consent is not necessary for any assignment or
transfer of the rights and obligations of this section that occurs or is deemed to occur as the result of any person acquiring directly or indirectly all or substantially all of the business, assets, or stock of Middlefield. 

IN WITNESS WHEREOF, Middlefield has caused this Stock Award Agreement to be
executed by its duly authorized officer as of the date specified in section 2, and the Participant has duly executed this Stock Award Agreement as of the date specified in section 2 and consents to and approves all of its terms. 

 

							
	PARTICIPANT	 		 	 MIDDLEFIELD BANC CORP.

		 		 	 an Ohio corporation

				
	 

                 
	 		 	By:	 	  

	 Print Name:
	 		 	 Print Name:
	 	
		 		 	Its:	 	
	Residence Address:	 		 		 	

  
 5

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