MAIN STREET CAPITAL
CORPORATION
2008 EQUITY INCENTIVE
PLAN
(A) General Purpose . The Plan has
been established to advance the interests of Main Street Capital
Corporation (the “Company”) by providing for the grant
of Awards to Participants. At all times during such periods as the
Company qualifies or is intended to qualify as a “business
development company” under the 1940 Act, the terms of the
Plan shall be construed so as to conform to the stock-based
compensation requirements applicable to “business development
companies” under the 1940 Act. An Award or related
transaction will be deemed to be permitted under the 1940 Act if
permitted by any exemptive or “no-action” relief
granted by the Commission or its staff.
(B) Available Awards . The purpose
of the Plan is to provide a means by which eligible recipients of
Awards may be given an opportunity to benefit from increases in the
value of the Company’s Stock through the granting of
Restricted Stock, Incentive Stock Options, Non-statutory Stock
Options, Dividend Equivalent Rights, Other Stock-Based Awards or
Performance Awards.
(C) Eligible Participants . All key
Employees and all Employee Directors are eligible to be granted
Awards by the Board under the Plan; provided that, no person shall
be granted Awards of Restricted Stock unless such person is an
Employee of the Company or an Employee of a wholly-owned subsidiary
of the Company.
(A) “1940 Act” means
the Investment Company Act of 1940, as amended, and the rules and
regulations promulgated thereunder.
(B) “Affiliate” means
any corporation or other entity that stands in a relationship to
the Company that would result in the Company and such corporation
or other entity being treated as one employer under Section 414(b)
or Section 414(c) of the Code, except that in determining
eligibility for the grant of an Option by reason of service for an
Affiliate, Sections 414(b) and 414(c) of the Code shall be applied
by substituting “at least 50%” for “at least
80%” under Section 1563(a)(1), (2) and (3) of
the Code and Treas. Regs. § 1.414(c)-2. The Company may at any
time by amendment provide that different ownership thresholds
(consistent with Section 409A) apply. Notwithstanding the
foregoing provisions of this definition, except as otherwise
determined by the Board, a corporation or other entity shall be
treated as an Affiliate only if its employees would be treated as
employees of the Company for purposes of the rules promulgated
under the Securities Act of 1933, as amended, with respect to the
use of Form S-8.
(C) “Award” means an
award of Restricted Stock, Incentive Stock Options, Non-statutory
Stock Options, Dividend Equivalent Rights, Other Stock-Based Awards
or Performance Awards granted pursuant to the Plan.
(D)
“Board” means the Board of Directors of the
Company.
(E)
“Cash Award” means an award denominated in
cash.
(F) “Code” means the
Internal Revenue Code of 1986, as amended and in effect, or any
successor statute as from time to time in effect. Any reference to
a provision of the Code shall be deemed to include a reference to
any applicable guidance (as determined by the Board) with respect
to such provision.
(G)
“Commission” means the Securities and Exchange
Commission.
(H) “Committee” means a
committee of two or more members of the Board appointed by the
Board in accordance with Section 3(C).
(I)
“Company” means Main Street Capital Corporation,
a Maryland corporation.
(J) “Continuous
Service” means the Participant’s uninterrupted
service with the Company or an Affiliate, whether as an Employee or
Employee Director.
(K) “Covered
Transaction” means any of (i) a consolidation,
merger, stock sale or similar transaction or series of related
transactions in which the Company is not the surviving corporation
or which results in the acquisition of all or substantially all of
the Company’s then outstanding common stock by a single
person or entity or by a group of persons and/or entities acting in
concert, (ii) a sale or transfer of all or substantially all
the Company’s assets, (iii) a dissolution or liquidation
of the Company or (iv) following such time as the Company has
a class of equity securities listed on a national securities
exchange or quoted on an inter-dealer quotation system, a change in
the membership of the Board for any reason such that the
individuals who, as of the Effective Date, constitute the Board of
Directors of the Company (the “Continuing
Directors” ) cease for any reason to constitute at least
a majority of the Board (a “Board Change” );
provided, however, that any individual becoming a director after
the Effective Date whose election or nomination for election by the
Company’s shareholders was approved by a vote of at least a
majority of the Continuing Directors will be considered as though
such individual were a Continuing Director, but excluding for this
purpose any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Securities Exchange Act
of 1934, as amended) or other actual or threatened solicitation of
proxies or consents by or on behalf of any person or entity other
than the Board. Where a Covered Transaction involves a tender offer
that is reasonably expected to be followed by a merger described in
clause (i) (as determined by the Board), the Covered Transaction
shall be deemed to have occurred upon consummation of the tender
offer.
(L)
“Dividend Equivalent Rights” has the meaning set
forth in Section 13.
(M) “Effective Date”
has the meaning set forth in Section 16.
(N)
“Employee” means any person employed by the
Company or an Affiliate.
(O) “Employee Director”
means a member of the Board of Directors of the Company who is also
an Employee of the Company.
(P) “Family Member”
means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships,
any person sharing the Participant’s household (other than a
tenant or employee), a trust in which these persons have more than
fifty percent of the beneficial interest, a foundation in which
these persons (or the Participant) control the management of
assets, and any other entity in which these persons (or the
Participant) own more than fifty percent of the voting
interests.
(Q) “Incentive Stock
Option” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of
the Code and the regulations promulgated thereunder.
(R) “Non-Employee Director
Plan” means the 2008 Non-Employee Director Restricted
Stock Plan, as from time to time amended and in effect.
(S)
“Non-statutory Stock Option” means an Option
that is not an Incentive Stock Option.
(T) “Option” means an
Incentive Stock Option or a Non-statutory Stock Option granted
pursuant to the Plan.
(U) “Other Stock-Based
Award” means an Award described in Section 9 of this
Plan that is not covered by Section 7 or 8.
(V)
“Participant” means a person to whom an Award is
granted pursuant to the Plan.
(W) “Performance Award”
means an Award made pursuant to this Plan that is subject to the
attainment of one or more performance goals.
(X) “Performance Goal”
means a standard established by the Committee to determine in whole
or in part whether a Qualified Performance Award shall be
earned.
(Y) “Permitted
Transferee” means a Family Member of a Participant to
whom an Award has been transferred by gift.
(Z)
“Plan” means this 2008 Equity Incentive Plan, as
from time to time amended and in effect.
(AA) “Qualified Performance
Award” means a Performance Award made to a Participant
who is an Employee that is intended to qualify as qualified
performance-based compensation under Section 162(m) of the Code, as
described in Section 10(B) of the Plan.
(BB) “Restricted Stock”
means an Award of Stock for so long as the Stock remains subject to
restrictions requiring that it be forfeited to the Company if
specified conditions are not satisfied.
(CC) “Securities Act”
means the Securities Act of 1933, as amended.
(DD) “Stock” means the
common stock of the Company, par value $.01 per share.
(A) Administration By Board . The
Board shall administer the Plan unless and until it delegates
administration to a Committee, as provided in
Section 3(C).
(B) Powers of the Board . The Board
shall have the power, subject to the express provisions of the Plan
and applicable law:
To determine from time to time which of the
persons eligible under the Plan shall be granted Awards; when and
how each Award shall be granted and documented; what type or
combination of types of Awards shall be granted; the provisions of
each Award granted, including the time or times when a person shall
be permitted to exercise an Award; and the number of shares of
Stock with respect to which an Award shall be granted to each such
person.
To construe and interpret the Plan and Awards
granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of
this power, may correct any defect, omission or inconsistency in
the Plan or in any Award documentation, in such manner and to such
extent as it shall deem necessary or expedient to make the Plan
fully effective.
To amend the
Plan or an Award as provided in Section 14.
To terminate or
suspend the Plan as provided in Section 15.
Generally, to exercise such powers and to
perform such acts as the Board deems necessary or expedient to
promote the best interests of the Company and that are not in
conflict with the provisions of the Plan.
(C) Delegation to Committee . The
Board may delegate the administration of the Plan to a Committee or
Committees composed of not less than two members of the Board, each
of whom shall be (i) a “Non-Employee Director” for
purposes of Exchange Act Section 16 and Rule 16b-3
thereunder, (ii) an “outside director” for
purposes of Section 162(m) and the regulations promulgated under
the Code, and each of whom shall be, subject to any applicable
transitional rules for newly public issuers,
“independent” within the meaning of the listing
standards of the Nasdaq stock market, and the term
“Committee” shall apply to any persons to whom
such authority has been delegated; provided that a “required
majority,” as defined in Section 57(o) of the 1940 Act, must
approve each issuance of Awards and Dividend Equivalent Rights in
accordance with Section 61(a)(3)(A)(iv) of the 1940 Act. If
administration is delegated to a Committee, the Committee shall
have, in connection with
the
administration of the Plan, the powers theretofore possessed by the
Board, including the power to delegate to a subcommittee any of the
administrative powers the Committee is authorized to exercise (and
references in this Plan to the Board, other than the Board
reference at the end of this sentence and the Board references in
the last sentence of this subsection (c), shall thereafter be to
the Committee or subcommittee), subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as
may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the
administration of the Plan, unless such actions are prohibited by
the condition of exemptive relief obtained from the
Commission.
(D) Effect of the Board’s
Decision . Determinations, interpretations and constructions
made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all
persons.
All Awards granted under the Plan will be
evidenced by an agreement. The agreement documenting the Award
shall contain such terms and conditions as the Board shall deem
advisable. Agreements evidencing Awards made to different
participants or at different times need not contain similar
provisions. In the case of any discrepancy between the terms of the
Plan and the terms of any Award agreement, the Plan provisions
shall control.
5. SHARES
SUBJECT TO THE PLAN; CERTAIN LIMITS.
(A) Share Reserve . The maximum
aggregate number of shares of Stock that may be issued under the
Plan pursuant to grants of Restricted Stock or Other Stock-Based
Awards or the exercise of Options is two million (2,000,000)
shares.
(B) Reversion of Shares to the Share
Reserve . If any Award shall for any reason expire or otherwise
terminate, in whole or in part, the shares of Stock not acquired
under such Award shall revert to and again become available for
issuance under the Plan.
(C) Type of Shares . The shares of
Stock subject to the Plan may be unissued shares or reacquired
shares bought on the market or otherwise. No fractional shares of
Stock will be delivered under the Plan.
(D) Limits on Individual Grants .
The maximum number of shares of Stock for which any Employee or
Employee Director may be granted Awards in any calendar year is
five hundred thousand (500,000) shares.
(E) Limits on Grants of Restricted
Stock . The combined maximum amount of Restricted Stock that
may be issued under the Plan and the Non-Employee Director Plan
will be 10% of the outstanding shares of Stock on the effective
date of the plans plus 10% of the number of shares of Stock issued
or delivered by the Company (other than pursuant to compensation
plans) during the term of the plans. No one person shall be granted
Awards of Restricted Stock relating to more than 25% of the shares
available for issuance under this Plan.
(F) No Grants in Contravention of 1940
Act . At all times during such periods as the Company qualifies
or is intended to qualify as a “business development
company,” no Award may be granted under the Plan if the grant
of such Award would cause the Company to violate the 1940 Act,
including, without limitation, Section 61(a)(3), and, if
otherwise approved for grant, shall be void and of no
effect.
(G) Limits on Number of Awards .
The amount of voting securities that would result from the exercise
of all of the Company’s outstanding warrants, options, and
rights, together with any Restricted Stock issued pursuant to this
Plan and the Non-Employee Director Plan, at the time of issuance
shall not exceed 25% of the outstanding voting securities of the
Company, except that if the amount of voting securities that would
result from the exercise of all of the Company’s outstanding
warrants, options, and rights issued to the Company’s
directors, officers, and employees, together with any Restricted
Stock issued pursuant to this Plan and the Non-Employee Director
Plan, would exceed 15% of the outstanding voting securities of the
Company, then the total amount of voting securities that would
result from the exercise of all outstanding warrants, options, and
rights, together with any Restricted Stock issued pursuant to this
Plan and the Non-Employee Director Plan, at the time of issuance
shall not exceed 20% of the outstanding voting securities of the
Company.
(H) Date of Award’s Grant :
The date on which the “required majority,” as defined
in Section 57(o) of the 1940 Act, approves the issuance of an Award
will be deemed the date on which such Award is granted.
Only Employees of the Company and Employees of a
wholly-owned subsidiary of the Company may be granted Awards. By
accepting any Award granted hereunder, the Participant agrees to
the terms of the Award and the Plan. Notwithstanding any provision
of this Plan to the contrary, awards of an acquired company that
are converted, replaced or adjusted in connection with the
acquisition may contain terms and conditions that are inconsistent
with the terms and conditions specified herein, as determined by
the Board.
Each Option shall be evidenced by a written
agreement containing such terms and conditions as the Board shall
deem appropriate. All Options shall be separately designated
Incentive Stock Options or Non-statutory Stock Options at the time
of grant, and, if certificates are issued, a separate certificate
or certificates shall be issued for shares of Stock purchased on
exercise of each type of Option. The provisions of separate
Options
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