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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Hercules Capital Inc | NYSE:HTGC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 21.38 | 0 | 09:04:48 |
Filed by the Registrant ☒
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Filed by a Party other than the Registrant ☐
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☐
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Preliminary Proxy Statement
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☐
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☒
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Definitive Proxy Statement
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☐
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Definitive Additional Materials
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☐
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Soliciting Material Pursuant to §240.14a-12
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Sincerely,
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Scott Bluestein
Chief Executive Officer
Chief Investment Officer
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Time
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9:00 a.m., Pacific Time
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Date
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June 24, 2021
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Place
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Virtually at www.virtualshareholdermeeting.com/HTGC2021
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Please have your 16-Digit Control Number to join the annual meeting. Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted on www.proxyvote.com.
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Purpose
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1.
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Elect three directors who will serve for the term specified in the Proxy Statement.
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2.
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Approve, on an advisory basis, the compensation of the Company’s named executive officers.
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3.
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Ratify the selection of PricewaterhouseCoopers LLP to serve as our independent public accounting firm for the year ending December 31, 2021.
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4.
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Transact such other business as may properly come before the meeting or any postponement or adjournment thereof.
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Record Date
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You have the right to receive notice of and to vote at the annual meeting if you were a stockholder of record at the close of business on April 23, 2021. We plan to begin mailing this Proxy Statement on or about April 30, 2021 to all stockholders entitled to vote their shares at the annual meeting.
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Voting by Proxy
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Please submit a proxy card or, for shares held in “street name,” voting instruction form as soon as possible so your shares can be voted at the virtual meeting. You may submit your proxy card or voting instruction form by mail. If you are a registered stockholder, you may also vote electronically by telephone or over the Internet by following the instructions included with your proxy card. If your shares are held in “street name,” you will receive instructions for voting of shares from your broker, bank or other nominee, which may permit telephone or Internet voting. Follow the instructions on the voting instruction form that you receive from your broker, bank or other nominee to ensure that your shares are properly voted at the annual meeting.
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The enclosed Proxy Statement is also available at www.proxyvote.com. This website also includes copies of the proxy card and our annual report to stockholders. Stockholders may request a copy of the Proxy Statement and our annual report by contacting our main office at (650) 289-3060.
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By Order of the Board,
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General Counsel, Chief Compliance Officer and Secretary
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Page
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Board of Directors and Corporate Governance
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Executive Officers and Director Compensation
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OTHER PROXY PROPOSALS
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MEETING AND OTHER INFORMATION
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Performance Period
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Return on
Average Assets
(excl. cash)
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Return on
Equity
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Return on
Invested Capital
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Average Annual
Shareholder Returns (“AASR”)
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HTGC
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% Rank of
Peer Group
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HTGC
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% Rank of
Peer Group
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HTGC
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% Rank of
Peer Group
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HTGC
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% Rank of
Peer Group
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1-year
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5.8%
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100%
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11.5%
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100%
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5.9%
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100%
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15.1%
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65%
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3-year
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5.8%
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100%
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11.5%
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100%
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5.9%
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100%
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14.5%
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72%
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5-year
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5.8%
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100%
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11.3%
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100%
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6.0%
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100%
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14.3%
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73%
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Agenda Items
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Board Vote Recommendation
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Page Reference
(for more detail)
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1.
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To elect three directors who will serve for the term specified in the Proxy Statement.
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FOR
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2.
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Approve, on an advisory basis, the compensation of the Company’s named executive officers.
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FOR
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3.
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To ratify the selection of PricewaterhouseCoopers LLP (“PwC”) to serve as our independent public accounting firm for the fiscal year ending December 31, 2021.
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FOR
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1
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SUMMARY INFORMATION
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Name
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Age
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Director Since
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Independent(1)
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Board Committee Members
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AC
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CC
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NCGC
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Gayle Crowell
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70
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2019
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C
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Thomas J. Fallon
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59
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2014
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X
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Brad Koenig
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62
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2017
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X
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X
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•
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Board Independence: Independent directors comprise the majority of our board of directors (“Board”) (7 out of 8 directors).
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Chairman: Our Board is led by an independent Chairman who manages the Board’s responsibilities.
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Board Committee: All of members of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee (“Governance Committee”) are independent directors.
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Board Accountability: Our Board and its committees conduct scheduled meetings in executive session, out of the presence of our chief executive officer.
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Risk Management: Our Board and its committees remain in close contact with, and receive reports on various aspects of our business from, our senior management team and independent auditors.
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•
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The “Corporate Governance” section of this Proxy Statement provides further information about our corporate governance practices, Board structure and Board committees.
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2020
(in millions)
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Audit Fees
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$1.1
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Audit-Related Fees
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$—
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Tax Fees
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$0.1
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All Other Fee
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$0.2
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Total
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$1.4
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SUMMARY INFORMATION
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2
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Internet
Visit www.proxyvote.com. You will need the 16-digit control number included in the proxy card, voter instruction card or notice.
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QR Code
You can scan the QR Code on your proxy card to vote with your mobile phone.
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Phone
Call 1-800-690-6903 or the number on your voter instruction form. You will need the control number included in your proxy card.
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Mail
Send your completed and signed proxy card or voter instruction form to the address on your proxy card or voter instruction form.
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In Person
Attend the virtual meeting in person.
Please have your 16-Digit Control Number to join the annual meeting. Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted on www.proxyvote.com
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5
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GENERAL INFORMATION
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(1)
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Beneficial ownership has been determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
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(2)
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Includes 128,387 shares of vested deferred restricted stock and dividend equivalent shares and 432,982 shares of restricted common stock.
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(3)
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Includes 15,000 shares of common stock that can be acquired upon the exercise of outstanding options and 5,499 shares of restricted common stock. 121,953 shares are held of record by the Robert P. Badavas Trust of 2007, and Mr. Badavas disclaims any beneficial ownership interest of such shares except to the extent of his pecuniary interest therein.
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(4)
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Includes 1,439 shares of restricted common stock.
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(5)
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Includes 10,000 shares of common stock that can be acquired upon the exercise of outstanding options. 49,937 shares are held of record by the Fallon Family Revocable Trust, and Mr. Fallon disclaims any beneficial ownership interest of such shares except to the extent of his pecuniary interest therein.
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(6)
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Includes 5,499 shares of restricted common stock.
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(7)
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Includes 10,000 shares of common stock that can be acquired upon the exercise of outstanding options and 3,070 shares of restricted common stock. 37,536 shares are held of record by the Hoffman Trust, and Mr. Hoffman disclaims any beneficial ownership interest of such shares except to the extent of his pecuniary interest therein.
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(8)
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16,391 shares are held of record by the Koenig Family 1994 Trust, and Mr. Koenig disclaims any beneficial ownership interest of such shares except to the extent of his pecuniary interest therein.
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(9)
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Includes 3,070 shares of restricted common stock.
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(10)
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Includes 132,169 shares of restricted common stock.
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SECURITY OWNERSHIP INFORMATION
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6
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(11)
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Includes 17,915 shares of vested deferred restricted stock and dividend equivalents and 15,614 shares of restricted common stock.
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(12)
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Includes 35,000 shares of common stock that can be acquired upon the exercise of outstanding options, 146,302 shares of vested deferred restricted stock and dividend equivalent shares and 599,342 shares of restricted common stock.
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*
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Less than 1%.
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Name
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Dollar Range of
Equity Securities
Beneficially Owned
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Interested Director
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Scott Bluestein
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Over $100,000
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Independent Directors
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Robert P. Badavas
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Over $100,000
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Gayle Crowell
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Over $100,000
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Thomas J. Fallon
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Over $100,000
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Carol L. Foster
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Over $100,000
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Joseph F. Hoffman
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Over $100,000
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Brad Koenig
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Over $100,000
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Doreen Woo Ho
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Over $100,000
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Other Named Executive Officers
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Seth H. Meyer
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Over $100,000
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Melanie Grace
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Over $100,000
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7
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SECURITY OWNERSHIP INFORMATION
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•
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Client Industries—Experience with venture capital-backed companies in general, and our specific portfolio company industries – technology, life sciences, middle market, and sustainable and renewable technology.
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•
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Banking/Financial Services—Experience with commercial or investment banking, mutual fund, or other financial services industries, including regulatory experience and specific knowledge of the Securities Act of 1933, as amended (the “Securities Act”).
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•
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Leadership/Strategy—Experience as a CEO, COO, President, CFO, or significant division manager responsible for leading a large team and establishing and executing successful business strategies.
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•
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Finance, IT and Other Business Operations—Experience related to finance, accounting, IT, treasury, human resources, or other key business processes.
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Enterprise Risk Management—Experience with enterprise risk management processes and functions.
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Governance—Experience with corporate governance issues, particularly in publicly-traded companies.
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Strategic Planning—Experience with senior executive-level strategic planning for publicly-traded companies, private companies, and non-profit entities.
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•
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Mergers and Acquisitions—Experience with public and private mergers and acquisitions, both in identifying and evaluating potential targets, as well as post-acquisition integration activities.
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PROPOSAL 1
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8
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9
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PROPOSAL 1
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Name, Address, and Age(1)
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Position(s) held with Company
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Term of Office
and Length of
Time Served
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Principal
Occupation(s) During Past
5 Years
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Other Directorships
Held by Director
or Nominee for Director
During the past 5 years(2)
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Independent Directors
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Robert P. Badavas (68)
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Director
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Class I Director since 2006
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Retired. Chairman and Chief Executive Officer of PlumChoice, provider of virtual technical services and support, from 2011-2016.
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Constant Contact, Inc., an online marketing company, from 2007-2016.
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Carol L. Foster (57)
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Director
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Class I Director since 2019
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Former Chief Operating Officer and Chief Financial Officer of SharesPost, Inc., a leading provider of capital markets for securities of late-stage, venture-backed private companies and digital assets, from 2017-2019. President and Founder of CLF Advisors LLC from 2015-2017.
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None.
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Gayle Crowell (70)
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Director
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Class II Director since 2019
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Former Senior Operating Consultant at Warburg Pincus, a global private equity firm focused on growth investing 2002-2019.
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Envestnet, a provider of integrated portfolio, practice management, and reporting solutions to financial advisors and institutions since 2016. Pliant Therapeutics, a clinical stage biopharmaceutical company that discovers, develops and commercializes novel therapies for the treatment of fibrosis since 2019.
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Thomas J. Fallon (59)
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Director
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Class II Director since 2014
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Former Chief Executive Officer of Infinera Corporation, manufacturer of high capacity optical transmission equipment, from 2010-2020.
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Infinera Corporation since 2009.
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Brad Koenig (62)
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Director
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Class II Director since 2017
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Co-Chief Executive Officer of Apex Tech Acquisition, a blank check acquisition company or SPAC since 2019. Former Founder and Chief Executive Officer of FoodyDirect.com, an online marketplace that features foods from the top restaurants, bakeries and artisan purveyors around the country from 2011-2018 which was acquired by Goldbelly, Inc. in 2018.
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GSV Capital Corporation, identifies and invests in rapidly growing late stage venture capital-backed private companies from 2015-2017.Apex Tech Acquisition Corp, a blank check acquisition company or SPAC since 2019.
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PROPOSAL 1
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10
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Name, Address, and Age(1)
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Position(s) held with Company
|
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Term of Office
and Length of
Time Served
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Principal
Occupation(s) During Past
5 Years
|
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Other Directorships
Held by Director
or Nominee for Director
During the past 5 years(2)
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Joseph F. Hoffman (72)
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Director Nominee
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Class III Director since 2015
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Retired. SEC Reviewing Partner and Silicon Valley Professional for KPMG from 1998-2009.
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None.
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Doreen Woo Ho (73)
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Director Nominee
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Class III Director since 2016
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Commissioner of the San Francisco Port Commission since May, 2011 and served as President from 2012 to 2014.
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U.S. Bancorp from 2012-2020.
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Interested Director
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Scott Bluestein (42)
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Director, Chief Executive Officer and Chief Investment Officer
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Class III Director Since 2019
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Chief Investment Officer of Hercules since 2014; Interim Chief Executive Officer from March 2019 to July 2019; Director and Chief Executive Officer since July 2019
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None.
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(1)
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The address for each officer and director is c/o Hercules Capital, Inc., 400 Hamilton Avenue., Suite 310, Palo Alto, California 94301.
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(2)
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No director otherwise serves as a director of an investment company subject to the 1940 Act.
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11
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|
PROPOSAL 1
|
Gayle Crowell
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Board Committee:
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Independent:
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• Compensation
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Yes - Chairman
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Business Experience:
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•
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President and CEO, RightPoint Software (acquired by E.piphany), developed customer relationship management software (1998-2000)
|
|
•
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Senior Vice President and General Manager, ViewStar (acquired by Mosaix), a network based process automation software encompassing workflow automation, document image processing and information management company (1994-1998)
|
||
|
•
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Group Director, Oracle Corporation, a computer technology corporation (1990-1992)
|
||
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•
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Vice President of Sales, DSC, a networking company (1989-1990)
|
||
|
•
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Vice President of Sales, Cubix Corporation, a company that designs, engineers and manufactures computer hardware systems (1985-1989)
|
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Public Directorships:
|
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•
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Envestnet, a leading provider of integrated portfolio, practice management, and reporting solutions to financial advisors and institutions (since 2016)
|
|
•
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Pliant Therapeutics, a clinical stage biopharmaceutical company that discovers, develops and commercializes novel therapies for the treatment of fibrosis (since 2019)
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Private Directorships:
|
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•
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Resman, a property management platform of owners, operators and investors across the multifamily, affordable and commercial real estate marketplaces (since 2020)
|
|
•
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GTreasury, an integrated digital treasury management platform that allows companies to manage liquidity risk, market risk, counter party and credit risk (since 2021)
|
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Prior Directorships:
|
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•
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Dude Solutions, the leading provider of cloud-based operations management software to optimize facilities, assets and workflow (since 2014)
|
|
•
|
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MercuryGate, a developer of a transportation management system and offers a software that enables shippers, carriers, brokers, freight forwarders and third party logistics providers to plan, monitor and track shipments (2014-2018)
|
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|
•
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Yodlee, the leading data aggregation and data analytics platform, helps consumers live better financial lives through innovative products and services delivered through financial institutions and FinTech companies (2002-2015)
|
||
|
•
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| |
Coyote Logistics, a third-party logistics provider that combines a centralized marketplace with freight and transportation solutions to empower your business (2011-2015)
|
||
|
•
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SRS (2004-2013)
|
||
|
•
|
| |
TradeCard, a SaaS collaboration product that was designed to allow companies to manage their extended supply chains including tracking movement of goods and payments (2009-2013)
|
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|
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|
Education:
|
| |
•
|
| |
Bachelor of Science from University of Nevada Reno
|
Skills/
Qualifications:
|
| |
Ms. Crowell’s key areas of skill/qualifications include, but are not limited to:
|
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|
| |
•
|
| |
Client Industries—significant experience in venture capital and technology
|
|
| |
•
|
| |
Banking/Financial Services—held a variety of key executive and management positions at large global financial institutions
|
|
| |
•
|
| |
Leadership/Strategy—extensive experience as a director and executive with broad operational experience in investments and finance
|
|
| |
•
|
| |
Finance, IT and other Business Processes—extensive experience in commercial lending, sales marketing as well as other key business processes
|
|
| |
•
|
| |
Enterprise Risk Management—experience in managing enterprise risk as CEO
|
|
| |
•
|
| |
Governance—experienced in both corporate governance and executive compensation for both public and private companies
|
|
| |
•
|
| |
Strategic Planning—experience with senior executive level strategic planning for publicly-traded companies, private companies and/or non-profit companies
|
|
| |
•
|
| |
Mergers and Acquisitions—experience with public and/or private company M&A both in identifying targets and evaluating potential targets, as well as post-acquisition integration activities
|
PROPOSAL 1
|
|
| |
12
|
| |
|
|
Thomas J. Fallon
|
| |
Board Committee:
|
| |
Independent:
|
|
| |
• Nominating
|
| |
Yes
|
Business Experience:
|
| |
•
|
| |
Chief Executive Officer, Infinera Corporation (2010-2020)
|
|||
|
•
|
| |
Chief Operating Officer, Infinera Corporation (2006-2009)
|
| ||||
|
•
|
| |
Vice President of Engineering and Operations, Infinera Corporation (2004-2006)
|
| ||||
|
| |
|
| |
|
| ||
Other Business Experience:
|
| |
•
|
| |
Vice President, Corporate Quality and Development Operations of Cisco Systems, Inc. (2003-2004)
|
| ||
|
•
|
| |
General Manager of Cisco Systems’ Optical Transport Business Unit, VP Operations, VP Supply, various executive positions (1991-2003)
|
| ||||
|
| |
|
| |
|
| ||
Public Directorships:
|
| |
•
|
| |
Infinera Corporation, a global supplier of innovative networking solutions (since 2009)
|
| ||
|
| |
|
| |
|
| ||
Prior Directorships:
|
| |
•
|
| |
Piccaro, a leading provider of solutions to measure greenhouse gas concentrations, trace gases and stable isotopes (2010-2016)
|
| ||
|
| |
|
| |
|
| ||
Other Experience:
|
| |
•
|
| |
Member, Engineering Advisory Board of the University of Texas at Austin
|
| ||
|
•
|
| |
Member, President’s Development Board University of Texas
|
| ||||
|
| |
|
| |
|
| ||
Education:
|
| |
•
|
| |
Bachelor’s degree in Mechanical Engineering from the University of Texas at Austin
|
| ||
|
•
|
| |
Master’s degree in Business Administration from the University of Texas at Austin
|
|
Skills/ Qualifications:
|
| |
Mr. Fallon’s key areas of skill/qualifications include, but are not limited to:
|
|||
|
| |
•
|
| |
Client Industries—significant experience in venture capital and technology
|
|
| |
•
|
| |
Leadership/Strategy—extensive experience as a director and executive with broad operational experience in investments and finance
|
|
| |
•
|
| |
Finance, IT and other Business Processes—extensive experience in commercial lending, sales marketing as well as other key business processes
|
|
| |
•
|
| |
Enterprise Risk Management—experience in managing enterprise risk as CEO
|
|
| |
•
|
| |
Governance—experienced in both corporate governance and executive compensation for both public and private companies
|
|
| |
•
|
| |
Strategic Planning—experience with senior executive level strategic planning for publicly-traded companies, private companies and/or non-profit companies
|
|
| |
•
|
| |
Mergers and Acquisitions—experience with public and/or private company M&A both in identifying targets and evaluating potential targets, as well as post-acquisition integration activities
|
|
| |
|
| |
|
|
|
| |
13
|
| |
|
PROPOSAL 1
|
Brad Koenig
|
| |
Board Committee:
|
| |
Independent:
|
|
| |
• Audit
|
| |
Yes
|
|
| |
• Compensation
|
| |
|
Business Experience:
|
| |
•
|
| |
Chief Executive Officer of FoodyDirect.com, an online marketplace that features foods from the top restaurants, bakeries and artisan purveyors around the country when the company was acquired by Goldbelly, Inc. (2011-2018)
|
|
•
|
| |
Head of Global Technology Investment Banking at Goldman Sachs, a leading global investment banking, securities and investment management firm (1990-2005)
|
||
|
•
|
| |
Co-Head of Global Technology, Media and Telecommunications at Goldman Sachs (2002-2005)
|
||
|
| |
|
| |
|
Public Directorships:
|
| |
•
|
| |
Apex Tech Acquisition Corp, a blank check acquisition company or SPAC (since 2019)
|
|
| |
|
| |
|
Private Directorships:
|
| |
•
|
| |
Theragenics Corporation, medical device company serving the surgical products and prostate cancer treatment markets (since 2013)
|
|
| |
|
| |
|
Prior Directorships:
|
| |
•
|
| |
GSV Capital Corporation, identifies and invests in rapidly growing late stage vesture capital-backed private companies (2015-2017)
|
|
•
|
| |
EveryAction Software, the leading technology provider to Democratic and progressive campaigns and organizations, offering clients an integrated platform of the best fundraising, compliance, field, organizing, digital and social networking products (2009-2018)
|
||
|
| |
|
| |
|
Other Experience:
|
| |
•
|
| |
Adviser to Oak Hill Capital Management, a private equity firm
|
|
| |
|
| |
|
Education:
|
| |
•
|
| |
Bachelor’s degree in Economics from Dartmouth College
|
|
•
|
| |
Master’s degree in Business Administration from Harvard Business School
|
Skills/ Qualifications:
|
| |
Mr. Koenig’s key areas of skill/qualifications include, but are not limited to:
|
|||
|
| |
•
|
| |
Client Industries—significant experience in venture capital and technology
|
|
| |
•
|
| |
Banking/Financial Services—experience with banking, mutual funds, or other financial services industries, including regulatory experience and specific knowledge of the Securities Act
|
|
| |
•
|
| |
Leadership/Strategy—extensive experience as a director and executive in both public and private companies
|
|
| |
•
|
| |
Governance—experience as the chairman of the governance committee with corporate governance issues, particularly in a publicly-traded company
|
|
| |
•
|
| |
Strategic Planning—experience with senior executive level strategic planning for publicly-traded companies, private companies and/or non-profit companies
|
|
| |
•
|
| |
Mergers and Acquisitions—experience with public and/or private company M&A both in identifying targets and evaluating potential targets, as well as post-acquisition integration activities
|
|
| |
|
| |
|
PROPOSAL 1
|
|
| |
14
|
| |
|
|
Robert P. Badavas
|
| |
Board Committee:
|
| |
Independent:
|
|
| |
• Audit
|
| |
Yes – Chairman
|
Business Experience:
|
| |
•
|
| |
President, Petros Ventures, Inc., a management and advisory services firm (2009-2011 and since 2016)
|
|
•
|
| |
President and Chief Executive Officer at TAC Worldwide, a multi-national technical workforce management and business services company (2005-2009)
|
||
|
•
|
| |
Executive Vice President and Chief Financial Officer, TAC Worldwide (2003-2005)
|
||
|
•
|
| |
Senior Partner and Chief Operating Officer, Atlas Venture, an international venture capital firm (2001-2003)
|
||
|
•
|
| |
Chief Executive Officer at Cerulean Technology, Inc., as venture capital backed wireless application software company (1995-2001)
|
||
|
•
|
| |
Certified Public Accountant, PwC (1974-1983)
|
||
|
| |
|
| |
|
Public Directorships:
|
| |
•
|
| |
Constant Contact, Inc., including chairman of the audit committee, a provider of email and other engagement marketing products and services for small and medium sized organizations, acquired by Endurance International Group Holdings, Inc. (2007-2016)
|
|
| |
|
| |
|
Private Directorships:
|
| |
•
|
| |
Polyvinyl Films, Inc., executive chairman, a leading manufacturer and distributer of food-grade film products for consumer, retail, and food-service markets worldwide (since 2019)
|
|
| |
|
| |
|
Prior Directorships:
|
| |
•
|
| |
PlumChoice, a venture-backed technology, software and services company
|
|
•
|
| |
Arivana, Inc., a telecommunications infrastructure company—publicly traded until its acquisition by SAC Capital
|
||
|
•
|
| |
On Technology, an IT software infrastructure company—publicly traded until its acquisition by Symantec
|
||
|
•
|
| |
Renaissance Worldwide; an IT services and solutions company—publicly traded until its acquisition by Aquent
|
||
|
| |
|
| |
|
Other Experience:
|
| |
•
|
| |
Trustee Emeritus, Bentley University (2005-2019); Board Chair (2018-2019); Vice Chair (2013-2018)
|
|
•
|
| |
Board of Trustees Executive Committee and Corporate Treasurer, Hellenic College/Holy Cross School of Theology (2002-2018)
|
||
|
•
|
| |
Trustee Emeritus, The Learning Center for the Deaf; Board Chair (1995-2005)
|
||
|
•
|
| |
Master Professional Director Certification, American College of Corporate Directors
|
||
|
•
|
| |
National Association of Corporate Directors
|
||
|
•
|
| |
Annunciation Greek Orthodox Cathedral of New England, Parish Council President (since 2016)
|
||
|
| |
|
| |
|
Education:
|
| |
•
|
| |
Bachelor’s degree in Accounting and Finance from Bentley University
|
|
| |
|
| |
|
Skills/
Qualifications:
|
| |
Mr. Badavas’ key areas of skill/qualifications include, but are not limited to:
|
|||
|
| |
•
|
| |
Client Industries—extensive experience in software, business and technology enabled services and venture capital
|
|
| |
•
|
| |
Leadership/Strategy—significant experience as a senior corporate executive in private and public companies, including tenure as chief executive officer, chief financial officer and chief operating officer
|
|
| |
•
|
| |
Finance, IT and Other Business Strategy and Enterprise Risk Management—prior experience as a CEO directing business strategy and as a CFO directing IT, financing and accounting, strategic alliances and human resources and evaluation of enterprise risk in such areas
|
|
| |
•
|
| |
Enterprise Risk Management—experience in managing enterprise risk as CEO
|
|
| |
•
|
| |
Governance—extensive experience as an executive and director of private and public companies with governance matters
|
|
| |
•
|
| |
Strategic Planning—experience with senior executive level strategic planning for publicly-traded companies, private companies and/or non-profit companies
|
|
| |
•
|
| |
Mergers and Acquisitions—experience with public and/or private company M&A both in identifying targets and evaluating potential targets, as well as post-acquisition integration activities
|
|
| |
|
| |
|
|
|
| |
15
|
| |
|
PROPOSAL 1
|
Carol L. Foster
|
| |
Board Committee:
|
| |
Independent:
|
|
| |
• Audit
|
| |
Yes
|
|
| |
• Nominating
|
| |
|
Business Experience:
|
| |
•
|
| |
President, SP Investments Management, an SEC Registered Investment Advisor (2017-2019)
|
|||
|
•
|
| |
Principal Financial Officer, SharesPost 100 Fund, an SEC registered public fund (PRIVX) investing in the securities of venture-backed companies across multiple industry segments (2018-2019)
|
|||||
|
•
|
| |
President and Founder, CLF Advisors LLC, an advisory and consulting firm (2012-2013 and 2015-2017)
|
|||||
|
•
|
| |
Chief Financial Officer, PENSCO Trust Company, a tech-enabled financial services company that helps individuals use IRAs to invest in private equity, real estate, and other private assets (2013-2015)
|
|||||
|
| |
|
| |
|
| |
|
Other Business Experience:
|
| |
•
|
| |
Partner, Chief Financial Officer, Calera Capital LLC, a private equity firm (2004-2007)
|
|||
|
•
|
| |
Technology Investment Banking, Merrill Lynch & Co. (1995-2003)
|
|||||
|
•
|
| |
Mergers & Acquisitions, Goldman Sachs (1992-1995)
|
|||||
|
| |
|
| |
|
| |
|
Non-Profit Leadership:
|
| |
•
|
| |
Sacred Heart Schools Atherton, Audit and Risk Committee Member (since 2017)
|
|||
|
•
|
| |
Oakland Lacrosse, an organization providing the youth of Oakland sports training, leadership development, academic advocacy and wellness education
|
|||||
|
|
| |
•
|
| |
Board of Directors (since 2020)
|
||
|
|
| |
•
|
| |
Advisory Council (2019-2020)
|
||
|
| |
•
|
| |
Tufts University Parents Leadership Council, Member (since 2020)
|
|||
|
| |
|
| |
|
| ||
Education:
|
| |
•
|
| |
Bachelor of Science from Southern Methodist University
|
|||
|
•
|
| |
Master’s in Business Administration from Columbia University Graduate School of Business
|
Skills/ Qualifications:
|
| |
Ms. Foster’s key areas of skill/qualifications include, but are not limited to:
|
|||
|
| |
•
|
| |
Client Industries—significant experience in venture capital and technology
|
|
| |
•
|
| |
Banking/Financial Services—held a variety of key executive and management positions at global financial institutions. Extensive experience across multiple sectors including alternative assets, investment management, brokerage and investment banking
|
|
| |
•
|
| |
Leadership/Strategy—significant experience as a director and executive with broad operational experience in financial services
|
|
| |
•
|
| |
Finance, IT and other Business Processes—extensive experience as a CFO directing finance, accounting, treasury and human resources
|
|
| |
•
|
| |
Enterprise Risk Management—experience in managing enterprise risk for financial services companies as a CFO
|
|
| |
•
|
| |
Governance—experience in corporate governance on public board
|
|
| |
•
|
| |
Strategic Planning—experience with senior executive level strategic planning for publicly-traded companies, private companies and/or non-profit companies
|
|
| |
•
|
| |
Mergers and Acquisitions—experience with public and/or private company M&A both in identifying targets and evaluating potential targets, as well as post-acquisition integration activities
|
|
| |
|
| |
|
PROPOSAL 1
|
|
| |
16
|
| |
|
|
Joseph F. Hoffman
|
| |
Board Committee:
|
| |
Independent:
|
|
| |
• Audit, Chair
|
| |
Yes
|
|
| |
• Nominating
|
| |
|
Business Experience:
|
| |
•
|
| |
SEC Reviewing Partner and Silicon Valley Professional Practice Partner, KPMG LLP (1998-2009)
|
|
•
|
| |
Audit Partner and Business Unit Partner in Charge, KPMG LLP (1983-1998)
|
||
|
| |
|
| |
|
Private Directorships:
|
| |
•
|
| |
LiveOps, Inc., a call center services company (since 2013)
|
|
•
|
| |
KPMG LLP, an audit, tax, and advisory professional services firm. (2005-2009)
|
||
|
| |
|
| |
|
Audit Committees:
|
| |
•
|
| |
LiveOps, Inc. (since 2013)
|
|
•
|
| |
KPMG LLP (2005-2009)
|
||
|
•
|
| |
Willamette University (since 2014)
|
||
|
| |
|
| |
|
Non-Profit Leadership:
|
| |
•
|
| |
Board of Trustees, Willamette University (since 2011)
|
|
| |
|
| |
|
Memberships:
|
| |
•
|
| |
California Society of Certified Public Accountants
|
|
•
|
| |
National Association of Corporate Directors
|
||
|
•
|
| |
American College of Corporate Directors
|
||
|
•
|
| |
Association of Governing Boards of Universities and Colleges
|
||
|
| |
|
| |
|
Education:
|
| |
•
|
| |
Bachelor’s degree in Mathematics and Economics, Willamette University
|
|
•
|
| |
Master’s degree in Business Administration, Stanford Graduate School of Business
|
||
|
•
|
| |
Certified public accountant, State of California
|
Skills/ Qualifications:
|
| |
Mr. Hoffman’s key areas of skill/qualifications include, but are not limited to:
|
|||
|
| |
•
|
| |
Client Industries—extensive experience in the technology, manufacturing, and financial services industries
|
|
| |
•
|
| |
Banking/Financial Services—held a variety of key executive and management positions at large global financial institutions
|
|
| |
•
|
| |
Leadership/Strategy-significant experience as a business executive and director
|
|
| |
•
|
| |
Finance and Enterprise Risk Management—extensive experience as an advisor to senior management and audit committees on complex accounting, financial reporting, internal controls, and enterprise risk management
|
|
| |
•
|
| |
Enterprise Risk Management—experience in managing enterprise risk as CEO
|
|
| |
•
|
| |
Governance—experience as the chairman of the governance committee with corporate governance issues, particularly in a publicly-traded company
|
|
| |
•
|
| |
Strategic Planning—experience with senior executive level strategic planning for publicly-traded companies, private companies and/or non-profit companies
|
|
| |
|
| |
|
|
|
| |
17
|
| |
|
PROPOSAL 1
|
Doreen Woo Ho
|
| |
Board Committee:
|
| |
Independent:
|
|
| |
• Nominating, Chair
|
| |
Yes
|
|
| |
• Compensation
|
| |
|
Business Experience:
|
| |
•
|
| |
President of San Francisco Port Commission (2012-2014)
|
|
•
|
| |
President and Chief Executive Officer of United Commercial Bank (2009)
|
||
|
•
|
| |
Executive Vice President, Enterprise Marketing, Student Loans and Corporate Trust, Wells Fargo & Company (2008)
|
||
|
•
|
| |
President of the Consumer Credit Group, Wells Fargo Bank (1998-2007)
|
||
|
•
|
| |
Senior Vice President of National Business Banking, US Consumer Bank, Citibank (1974-1998)
|
||
|
| |
|
| |
|
Prior Directorships:
|
| |
•
|
| |
United Commercial Bank (2009)
|
|
•
|
| |
U.S. Bancorp (2012-2020)
|
||
|
| |
|
| |
|
Private Directorships:
|
| |
•
|
| |
San Francisco Opera (since 1992)
|
|
| |
|
| |
|
Other Experience:
|
| |
•
|
| |
Commissioner of the Port of San Francisco (since 2011)
|
|
•
|
| |
Wells Fargo Bank Management Committee member (1999-2008)
|
||
|
| |
|
| |
|
Education:
|
| |
•
|
| |
Bachelor’s in History from Smith College
|
|
•
|
| |
Masters in East Asian Studies from the School of International and Public Affairs at Columbia University
|
Skills/ Qualifications:
|
| |
Ms. Woo Ho’s key areas of skill/qualifications include, but are not limited to:
|
|||
|
| |
•
|
| |
Banking/Financial Services—held a variety of key executive and management positions at large global financial institutions
|
|
| |
•
|
| |
Leadership/Strategy—extensive experience as a director and executive with broad operational experience in investments and finance
|
|
| |
•
|
| |
Finance, IT and other Business Processes—extensive experience in commercial and consumer lending, sales, marketing, operational and other key business processes
|
|
| |
•
|
| |
Enterprise Risk Management—extensive experience in credit and operational risk management and regulatory compliance in financial services
|
|
| |
•
|
| |
Governance—gained extensive experience in executive management and as CEO of a banking institution in corporate governance and board participation on both public and non-public boards
|
|
| |
•
|
| |
Strategic Planning—experience with senior executive level strategic planning for publicly-traded companies, private companies and/or non-profit companies
|
|
| |
|
| |
|
PROPOSAL 1
|
|
| |
18
|
| |
|
|
Scott Bluestein
|
| |
Board Committee:
|
| |
Independent
|
|
| |
N/A
|
| |
No
|
|
|
| |
19
|
| |
|
PROPOSAL 1
|
•
|
Continued Board Recruitment and Refreshment
|
•
|
Independent Chairman of the Board
|
•
|
Majority Independent Directors
|
•
|
Independent Audit and Compensation, Nominating and Governance Committees
|
•
|
Annual Board and Committee Self-Evaluations
|
•
|
Annual Board Review of CEO and Senior Management Succession Plans
|
•
|
Continued Qualification Policy
|
•
|
Anti-Hedging and Pledging Policy
|
•
|
Active Stockholder Outreach
|
•
|
Pay for Performance Philosophy
|
•
|
Stock Ownership Guidelines for Executives and Directors
|
•
|
Clawback Provisions for Executive Incentive Compensation
|
•
|
No Tax Gross-Up Payments
|
CORPORATE GOVERNANCE
|
|
| |
20
|
| |
|
|
|
Type of Meeting
|
| |
Number
|
| |||
|
|
| |
Regular Meetings to address regular, quarterly business matters
|
| |
4
|
|
|
|
| |
Other Meetings to address business matters that arise between quarters, such as fair valuing the portfolio investments, quarterly audit committee presentations and review and approval of earnings reports, among other matters
|
| |
4
|
|
Audit
|
|
Compensation
|
|
Nominating and Governance
|
Joseph F. Hoffman-C
Robert P. Badavas
Brad Koenig
Carol L. Foster
|
|
Gayle Crowell-C
Brad Koenig
Doreen Woo Ho
|
|
Doreen Woo Ho-C
Thomas J. Fallon
Joseph F. Hoffman
Carol L. Foster
|
|
|
| |
21
|
| |
|
CORPORATE GOVERNANCE
|
Audit Committee
|
| |
Number of meetings held in 2020: 5
|
•
|
Oversees the accounting and financial reporting processes and the integrity of the financial statements.
|
•
|
Establishes procedures for complaints relating to accounting, internal accounting controls or auditing matters.
|
•
|
Examines the independence qualifications of our auditors.
|
•
|
Assists our Board’s oversight of our compliance with legal and regulatory requirements and enterprise risk management.
|
•
|
Assists our Board in fulfilling its oversight responsibilities related to the systems of internal controls and disclosure controls which management has established regarding finance, accounting, and regulatory compliance.
|
•
|
Reviews and recommends to the Board the valuation of the Company’s portfolio.
|
Compensation Committee
|
| |
Number of meetings held in 2020: 5
|
•
|
Oversees our overall compensation strategies, plans, policies and programs.
|
•
|
Approves director and executive compensation.
|
•
|
Assesses compensation-related risks.
|
Nominating and Corporate Governance Committee
|
| |
Number of meetings held in 2020: 4
|
•
|
Discharges our Board’s responsibilities related to general corporate governance practices, including developing, reviewing and recommending to our Board a set of principles to be adopted as the Company’s Corporate Governance Guidelines.
|
•
|
Conducts an annual performance evaluation of our Board, its committees, and its members.
|
•
|
Reviews board composition, size, and refreshment and identifying and recommending to our Board qualified director candidates.
|
•
|
Oversees succession planning for the CEO, Section 16 officers and senior management who report to the CEO.
|
•
|
Oversees the director resignation policy set forth in the Corporate Governance Guidelines.
|
•
|
Criteria considered by the Governance Committee in evaluating qualifications of individuals for election as members of the Board consist of the independence and other applicable NYSE corporate governance requirements; the 1940 Act and all other applicable laws, rules, regulations and listing standards; and the criteria, polices and principles set forth in the Governance Committee charter.
|
•
|
Considers nominees properly recommended by a stockholder. Stockholder recommendations for candidates for the Board should be sent to the Nominating and Corporate Governance Committee, c/o Melanie Grace, Secretary, 400 Hamilton Avenue, Suite 310, Palo Alto, California 94301. The Governance Committee will evaluate any such recommendations using the same criteria as it uses for other candidates.
|
•
|
The Governance Committee regularly considers the composition of our Board to ensure there is a proper combination of skills, experience, diversity and tenure.
|
CORPORATE GOVERNANCE
|
|
| |
22
|
| |
|
|
|
|
| |
23
|
| |
|
CORPORATE GOVERNANCE
|
•
|
Environmental. We limit our consumption of scarce and/or non-renewable resources by being mindful of the products we use in our business. We also utilize an aggressive recycling and composting policy to reduce landfill. We limit emissions of greenhouse gases and other forms of harmful waste by managing our energy use. Our investment philosophy ensures that we generally do not invest directly in the oil and gas industry, mining, forestry, logging, and other areas that we believe are detrimental to our values and principles. Our investment strategy in the sustainable and renewable technologies sector has centered around the reduction in greenhouse gas emissions through our investments in vehicle electrification and renewable resources such as solar and wind power.
|
•
|
Social. We mandate zero tolerance of discrimination and harassment of any kind including but not limited to sexual, gender, race, religion, ethnicity, age among others. We promote diversity, inclusion and belonging in the hiring and retention of our employees with both gender and racial/ethnic consideration. We have an established platform of giving that is focuses on the health and well-being of our entire society and encourages our employees to give to their charities and communities by matching their charitable contributions and providing volunteering opportunities that better their communities. We ensure our business gives back to the communities where we operate by partnering with charitable organizations and making donations to a diverse set of charities and organizations.
|
•
|
Governance. We manage our business with integrity and high moral conduct. We have a corporate governance structure with clear responsibilities and procedures and a separation of the chairman and chief executive roles. Our Board also reflects and practices the core values and beliefs of the Company and supports diversity and inclusion in its composition.
|
CORPORATE GOVERNANCE
|
|
| |
24
|
| |
|
|
Name
|
| |
Age
|
| |
Principal Occupation
|
Scott Bluestein
|
| |
42
|
| |
Chief Executive Officer and Chief Investment Officer
|
Seth H. Meyer
|
| |
52
|
| |
Chief Financial Officer
|
Melanie Grace
|
| |
52
|
| |
General Counsel, Chief Compliance Officer and Secretary
|
Business Experience
|
| |
•
|
| |
Chief Financial Officer, Swiss Re Corporate Solutions Ltd. (2011-2017)
|
|
•
|
| |
Managing Director, Swiss Re, serving as Group Tax Director, Finance Division Operating Officer and Head of Finance Large Transactions (2000-2011)
|
||
|
•
|
| |
Senior Tax Manager, PricewaterhouseCoopers LLP (1997-2000)
|
||
|
•
|
| |
Tax Manager, Jackson National Life Insurance Company (1994-1997)
|
||
|
•
|
| |
Senior Tax Accountant, KPMG Peat Marwick (1992-1994)
|
||
|
•
|
| |
Tax/Audit Assistant, Burke & Stegman CPAs (1990-1992)
|
||
|
| |
|
| |
|
Education/Other:
|
| |
•
|
| |
Bachelor’s in Accounting from Michigan State University
|
|
•
|
| |
Master’s in Business Administration in Professional Accounting from Michigan State University
|
Business Experience
|
| |
•
|
| |
Chief Legal Officer and Corporate Secretary, WHV Investments, Inc. where she also served as interim Chief Compliance Officer (2011-2015)
|
|||
|
|
| |
•
|
| |
Member, Management, Operations and Proxy Committees, WHV Investments, Inc. (2013-2015)
|
||
|
|
| |
•
|
| |
Chair, Ethics Committee, WHV Investments, Inc. (2013-2015)
|
||
|
•
|
| |
Chief Counsel, Corporate, NYSE Euronext (2005-2008)
|
|||||
|
•
|
| |
Associate, Fenwick & West LLP (2000-2005)
|
|||||
|
| |
|
| |
|
| |
|
Education/Other:
|
| |
•
|
| |
Bachelor’s and Master’s in History from the University of California, Riverside
|
|||
|
•
|
| |
Juris Doctor from Boston University School of Law
|
|||||
|
•
|
| |
Member, State Bar of California
|
|||||
|
•
|
| |
Registered In-House Counsel, New York
|
|||||
|
•
|
| |
Designated Investment Adviser Certified Compliance Professional®
|
|
|
| |
25
|
| |
|
EXECUTIVE OFFICERS
|
Scott Bluestein
|
| |
Chief Executive Officer (“CEO”) and Chief Investment Officer
|
Seth H. Meyer
|
| |
Chief Financial Officer (“CFO”)
|
Melanie Grace
|
| |
General Counsel, Chief Compliance Officer and Secretary
|
•
|
Return on Average Assets (“ROAA”)
|
•
|
Return on Equity (“ROE”)
|
•
|
Return on Investment Capital (“ROIC”)
|
•
|
Average Annual Shareholder Return (“AASR”)
|
EXECUTIVE COMPENSATION
|
|
| |
26
|
| |
|
|
•
|
Sourcing and pursuing attractively priced investment opportunities to venture-backed and selected publicly listed companies;
|
•
|
Maintaining credit quality, monitoring financial performance, and ultimately managing a successful exit of the Company’s investment portfolio;
|
•
|
Achieving the Company’s dividend and profitability objectives (which focus on stability and potential growth);
|
•
|
Providing compensation and incentives necessary to attract, motivate and retain key executives critical to our continued success and growth;
|
•
|
Focusing management behavior and decision-making on goals that are consistent with the overall strategy of the business and in alignment with shareholders and stakeholders;
|
•
|
Ensuring a linkage between NEO compensation and individual contributions to our performance; and
|
•
|
Creation of compensation principles and processes that are designed to balance risk and reward in a way that does not encourage unnecessary risk taking.
|
|
ELEMENTS OF EXECUTIVE COMPENSATION
|
| ||||||
|
Compensation Element
|
| |
Form of Compensation
|
| |
Principal Compensation Objective
|
|
|
Annual Base Salary
|
| |
Cash paid on a regular basis throughout the year
|
| |
Provide a level of fixed income that is market competitive to allow the Company to retain and attract executive talent
|
|
|
Annual Discretionary Cash
Bonus Awards
|
| |
Discretionary cash awards paid on an annual basis following year-end (not formulaic, but subject to Committee discretion, due to regulatory requirements that do not allow formulaic incentive plans as explained in more detail later in this CD&A in the section titled “Our Regulatory Status and Limitations Imposed by the Investment Company Act of 1940”)
|
| |
Reward NEOs who contribute to our financial performance and strategic success during the year, and reward individual achievements
|
|
|
Long-Term Equity
Incentive Awards
|
| |
Equity incentive awards vest 1/3 on a one-year cliff with remaining 2/3 vesting quarterly over two years based on continued employment with the Company (other than the one-time retention PSUs, which generally vest based on the Company’s Total Shareholder Return relative to certain publicly traded BDCs over the 4-year performance period)
|
| |
Reward NEOs who contribute to our success through the alignment with and creation of shareholder value, provide meaningful retention incentives, and reward individual achievements
|
|
|
|
| |
27
|
| |
|
EXECUTIVE COMPENSATION
|
|
2020 GOVERNANCE “BEST PRACTICES” HIGHLIGHTS
OF EXECUTIVE COMPENSATION
|
| |||
|
No employment agreements for NEOs.
|
| |
Maintain stock ownership guidelines for our CEO to own at least 5x his salary. Other NEOs must own at least 2x their salary.
|
|
|
No guaranteed retirement benefits or pensions.
|
| |
No executive perquisite allowances beyond the benefit programs offered to all employees.
|
|
|
No tax gross ups for NEOs.
|
| |
No repricing of stock options without stockholder approval, as required under applicable NYSE rules (and subject to other requirements under the 1940 Act).
|
|
|
Clawback policy for all Section 16 officers.
|
| |
Compensation Committee routinely engages an independent compensation consultant to review NEO compensation.
|
|
•
|
Role of Compensation Committee: The Compensation Committee is comprised entirely of independent directors who are also non-employee directors as defined in Rule 16b-3 under the Exchange Act, independent directors as defined by the NYSE rules, and are not “interested persons” of the Company, as defined by Section 2(a)(19) of the 1940 Act. For 2020, Mr. Koenig and Mss. Woo Ho and Crowell comprised the Compensation Committee and Ms. Crowell served as chair of the Compensation Committee.
|
•
|
Evaluates our CEO’s performance;
|
•
|
Reviews our CEO evaluation of the other NEO’s performance;
|
•
|
Determines and approves the compensation paid to our CEO; and
|
•
|
With input from our CEO, reviews and approves the compensation of other NEOs.
|
EXECUTIVE COMPENSATION
|
|
| |
28
|
| |
|
|
•
|
Role of Compensation Consultant: The Compensation Committee has engaged F.W. Cook, as an independent outside compensation consultant to assist the Compensation Committee and provide advice on incorporating a variety of compensation matters relating to CEO and NEOs compensation, peer group selection, compensation program design best practices, market and industry compensation trends, improved program designs, market competitive director compensation levels and regulatory developments. F.W. Cook was hired by and reports directly to the Compensation Committee. F. W. Cook does not provide any other services to the Company. The Compensation Committee has assessed the independence of F.W. Cook pursuant to the NYSE rules, and it has been concluded that F. W. Cook’s work for the Compensation Committee does not raise any conflict of interest.
|
•
|
Provide information, research, market analysis and recommendations with respect to our 2020 executive and non-employee director compensation programs, including evaluating the components of our executive and non-employee director compensation programs and the alignment of the compensation programs with our performance;
|
•
|
Advise on the design of the executive and non-employee director compensation programs and the reasonableness of individual compensation targets and awards, including in the context of business and shareholder performance, as well as importance of individual officers to the Company’s success;
|
•
|
Provide advice and recommendations that incorporated both market data and Company-specific factors; and
|
•
|
Assist the Compensation Committee in making pay recommendations for the NEOs after the evaluation of, among other things, Company and individual performance, market pay level, and management recommendations.
|
•
|
Role of Chief Executive Officer: From time to time and at the Compensation Committee’s request, our CEO will attend the Compensation Committee’s meetings to discuss the Company’s performance and compensation-related matters. Our CEO does not attend executive sessions of the Compensation Committee, unless invited by the Compensation Committee. While our CEO does not participate in any deliberations relating to his own compensation, our CEO reviews on at least an annual basis the performance of each of the other NEOs and other executive officers. Additionally, our CEO generally meets with or speaks to our Compensation Committee Chairman at least quarterly, to discuss the Company’s operating performance relative to key performance objectives and evaluate the discretionary cash bonus pool for our NEO’s. Based on these performance reviews and the Company’s overall absolute and relative performance, our CEO makes recommendations to the Compensation Committee on any changes to base salaries, annual bonuses and equity awards. The Compensation Committee considers the recommendations submitted by our CEO, as well as data and analysis provided by management and F.W. Cook, but retains full discretion to approve and/or recommend for Board approval all executive and director compensation.
|
|
|
| |
29
|
| |
|
EXECUTIVE COMPENSATION
|
|
HTGC Peer Group
|
| ||||||
|
BDCs
|
| |
Financial Services
|
| |
Real Estate Investment Trusts
|
|
|
Main Street Capital
(internally managed)
Portman Ridge
|
| |
Alliance Bernstein
Cohen & Steers
Cowen Inc.
Greenhill & Co.
Moelis & Company
On Deck Capital
PJT Partners
Sculptor Capital
WisdomTree Investment
|
| |
Capstead Mortgage
Hannon Armstrong
iStar Inc.
Ladder Capital MFA Financial
Redwood Trust
Sabra Health Care
Seritage Growth
|
|
|
|
| |
Return on
Average Assets
(excl. cash)
|
| |
Return on
Equity
|
| |
Return on
Invested Capital
|
| |
Average Annual
Shareholder Return (“AASR”)
|
| ||||||||||||
|
Performance
Period
|
| |
HTGC
|
| |
% Rank of
Peer Group
|
| |
HTGC
|
| |
% Rank of
Peer Group
|
| |
HTGC
|
| |
% Rank of
Peer Group
|
| |
HTGC
|
| |
% Rank of
Peer Group
|
|
|
1-year
|
| |
5.8%
|
| |
100%
|
| |
11.5%
|
| |
100%
|
| |
5.9%
|
| |
100%
|
| |
15.1%
|
| |
65%
|
|
|
3-year
|
| |
5.8%
|
| |
100%
|
| |
11.5%
|
| |
100%
|
| |
5.9%
|
| |
100%
|
| |
14.5%
|
| |
72%
|
|
|
5-year
|
| |
5.9%
|
| |
100%
|
| |
11.3%
|
| |
100%
|
| |
6.0%
|
| |
100%
|
| |
14.3%
|
| |
73%
|
|
•
|
Record Total Investment Income and Net Investment Income
|
•
|
Record Total Investment Assets
|
EXECUTIVE COMPENSATION
|
|
| |
30
|
| |
|
|
•
|
The 1940 Act Requirements limit our ability to implement non-equity incentive plans (i.e., cash incentive plans) that would restrict the discretion and decision-making authority of our Compensation Committee. The 1940 Act Requirements provide that we may maintain either an equity incentive plan or a profit-sharing plan. A “profit sharing plan” as defined under the 1940 Act is any written or oral plan, contract, authorization or arrangement, or any practice, understanding or undertaking whereby amounts payable under the compensation plan are dependent upon or related to the profits of the company. The SEC has stated that compensation plans possess profit-sharing characteristics if an investment company is obligated to make payments under such a plan based on the level of income, realized gains or loss on investments or unrealized appreciation or depreciation of assets of such investment company.
|
•
|
We believe that equity incentives strongly align the interests of our stockholders with our executive officers and other employees, and, accordingly, we implemented an equity incentive plan in 2004, which was amended and restated in 2018 (the “Equity Plan”). Given our Equity Plan, the 1940 Act Requirements prohibit us from also implementing a “profit-sharing plan” that restricts our Compensation Committee’s discretion in the final determination of profit-sharing awards.
|
•
|
The 1940 Act Requirements limit the terms we may include in our Equity Plan and limit our ability to implement certain changes to our Equity Plan without the SEC’s prior written approval. Our Equity Plan is administered pursuant to specific exemptive orders granted by the SEC. We believe the current structure of our Equity Plan reflects the terms and plan provisions currently permitted for an internally managed BDC.
|
|
|
| |
31
|
| |
|
EXECUTIVE COMPENSATION
|
NEO
|
| |
2020 Base
Salary
|
Scott Bluestein
|
| |
$650,000
|
Seth H. Meyer
|
| |
$550,000
|
Melanie Grace
|
| |
$366,011
|
EXECUTIVE COMPENSATION
|
|
| |
32
|
| |
|
|
NEO
|
| |
2020 Cash
Bonus Award
|
Scott Bluestein
|
| |
$2,100,000
|
Seth H. Meyer
|
| |
$700,000
|
Melanie Grace
|
| |
$135,000
|
•
|
Align our operating plan, stockholder interests and employee compensation,
|
•
|
Match shareholder return expectations and results of the business, and
|
•
|
Retain and motivate key management talent.
|
NEO
|
| |
Grant
Date
|
| |
Restricted Stock
Award
|
| |
Fair Value of
Restricted Stock
Award
|
Scott Bluestein
|
| |
1/12/2021
|
| |
236,463
|
| |
$3,449,995(1)
|
Seth H. Meyer
|
| |
1/12/2021
|
| |
74,606
|
| |
$1,088,502(1)
|
Melanie Grace
|
| |
1/12/2021
|
| |
9,253
|
| |
$135,001(1)
|
(1)
|
Based on the closing price per share of our common stock of $14.59 on January 12, 2021.
|
|
|
| |
33
|
| |
|
EXECUTIVE COMPENSATION
|
•
|
Benefits and Perquisites: Our NEOs receive the same benefits and perquisites as other full-time employees. Our benefits program is designed to provide competitive benefits and is not based on performance. Our NEOs and other full-time employees receive health and welfare benefits, which consist of life, long-term and short-term disability, health, dental and vision insurance benefits and the opportunity to participate in our defined contribution 401(k) plan. During 2020, our 401(k) plan provided for contributions by the company for up to $19,500 per full-time employee under the age of 50 and $26,000 per full time employee over the age of 50. Other than the benefits set forth immediately above, our NEOs are not entitled to any other benefits or perquisites.
|
EXECUTIVE COMPENSATION
|
|
| |
34
|
| |
|
|
•
|
Mr. Bluestein owned 1,222,557 shares of Company stock and restricted stock. Based on his 2020 salary of $650,000, he owns shares worth 5x his annual base salary.
|
•
|
Mr. Meyer owned 175,110 shares of Company stock and restricted stock. Based on his 2020 salary of $550,000, he owns shares worth 2x his annual base salary.
|
•
|
Ms. Grace owned 87,305 shares of Company stock and restricted stock. Based on her 2020 salary of $366,011, she owns shares worth 2x her annual base salary.
|
|
|
| |
35
|
| |
|
EXECUTIVE COMPENSATION
|
•
|
Bonus payouts and equity incentive awards that are not based solely on corporate performance objectives, but are also based on individual performance levels;
|
•
|
The financial opportunity in our long-term equity incentive program is best realized through long-term appreciation of our stock price, which mitigates excessive short-term risk-taking;
|
•
|
Annual cash bonuses that are paid after the end of the fiscal year to which the bonus payout relates;
|
•
|
The engagement and use of a compensation consultant;
|
•
|
The institution of stock ownership guidelines applicable to our executive officers; and
|
•
|
Final decision making by our Compensation Committee and our Board of Directors on all awards.
|
EXECUTIVE COMPENSATION
|
|
| |
36
|
| |
|
|
|
|
| |
37
|
| |
|
EXECUTIVE COMPENSATION
|
Name and Principal Position
|
| |
Year
|
| |
Salary
($)(1)
|
| |
Bonus
($)(2)
|
| |
Stock
Awards
($)(3)
|
| |
Option
Awards
($)(3)
|
| |
All Other
Compensation
($)(4)
|
| |
Total
($)
|
Scott Bluestein
Chief Executive Officer and
Chief Investment Officer
|
| |
2020
|
| |
$650,000
|
| |
$2,100,000
|
| |
$3,989,493
|
| |
—
|
| |
$1,131,911
|
| |
$7,871,404
|
|
2019
|
| |
$594,028
|
| |
$1,915,000
|
| |
$4,249,994
|
| |
—
|
| |
$825,179
|
| |
$7,584,201
|
||
|
2018
|
| |
$515,000
|
| |
$825,000
|
| |
$9,257,843
|
| |
—
|
| |
$460,090
|
| |
$11,057,933
|
||
Seth H. Meyer
Chief Financial Officer
|
| |
2020
|
| |
$550,000
|
| |
$700,000
|
| |
$1,069,995
|
| |
—
|
| |
$169,498
|
| |
$2,489,493
|
|
2019
|
| |
$456,250
|
| |
$625,000
|
| |
$499,998
|
| |
—
|
| |
$66,162
|
| |
$1,647,411
|
||
Melanie Grace
General Counsel, Chief Compliance Officer & Secretary
|
| |
2020
|
| |
$366,011
|
| |
$135,000
|
| |
$135,005
|
| |
—
|
| |
$117,585
|
| |
$753,601
|
|
2019
|
| |
$365,567
|
| |
$115,000
|
| |
$184,197
|
| |
—
|
| |
$108,247
|
| |
$773,011
|
||
|
2018
|
| |
$355,350
|
| |
$125,000
|
| |
$334,998
|
| |
—
|
| |
$85,770
|
| |
$901,118
|
(1)
|
Salary column amounts represent base salary compensation received by each named executive officer (“NEO”) for the listed fiscal year. Includes holiday pay to Messrs. Bluestein and Meyer, and Ms. Grace in the amount of $35,000, $29,615 and $19,708, respectively.
|
(2)
|
Bonus column amounts represent the annual cash bonus earned during the fiscal year and awarded and paid out during the first quarter of the following fiscal year.
|
(3)
|
The amounts reflect the aggregate grant date fair value of restricted stock unit awards made to our NEOs during the applicable year computed in accordance with FASB ASC Topic 718. The grant date fair value of each restricted stock award is measured based on the closing price of our common stock on the date of grant.
|
(4)
|
All Other Compensation column includes the following:
|
EXECUTIVE COMPENSATION
|
|
| |
38
|
| |
|
|
Name
|
| |
Grant Date
|
| |
All Other Stock
Awards: Number of
Shares of
Stock or Units
Threshold
|
| |
Grant Date
Fair Value of
Stock and
Option Awards(1)
|
Scott Bluestein
|
| |
1/13/2020
|
| |
281,943(2)
|
| |
$3,989,493
|
Seth H. Meyer
|
| |
1/13/2020
|
| |
75,618(2)
|
| |
$1,069,995
|
Melanie Grace
|
| |
1/13/2020
|
| |
9,541(2)
|
| |
$135,005
|
(1)
|
The amounts reflect the aggregate grant date fair value of computed in accordance with FASB ASC Topic 718.
|
(2)
|
Award of restricted stock that vests as to one-third of the total award on the one-year anniversary of the date of the grant and quarterly over the succeeding 24 months. Dividends will generally be paid with respect to restricted stock at the normal (non-preferential) dividend rate.
|
|
|
| |
39
|
| |
|
EXECUTIVE COMPENSATION
|
Name
|
| |
Number of
shares or units
of stock that
have not vested
|
| |
Market value of
shares or units
of stock that
have not vested
|
| |
Equity incentive
plan awards:
number of
unearned
shares, units or
other rights that
have not vested
|
| |
Equity incentive
plan awards:
market or
payout value of
unearned
shares, units or
other rights that
have not vested(1)
|
Scott Bluestein
|
| |
7,670(2)
|
| |
$110,601
|
| |
—
|
| |
—
|
|
| |
10,612(3)
|
| |
$153,025
|
| |
—
|
| |
—
|
|
| |
121,086(4)
|
| |
$1,746,060
|
| |
—
|
| |
—
|
|
| |
44,872(5)
|
| |
$647,054
|
| |
—
|
| |
—
|
|
| |
281,943(6)
|
| |
$4,065,618
|
| |
—
|
| |
—
|
|
| |
—
|
| |
—
|
| |
974,818(8)
|
| |
$14,056,876
|
Seth H. Meyer
|
| |
16,815(7)
|
| |
$242,472
|
| |
—
|
| |
—
|
|
| |
75,618(6)
|
| |
$1,090,412
|
| |
—
|
| |
—
|
Melanie Grace
|
| |
1,071(2)
|
| |
$15,444
|
| |
—
|
| |
—
|
|
| |
1,486(3)
|
| |
$21,428
|
| |
—
|
| |
—
|
|
| |
6,867(4)
|
| |
$99,022
|
| |
—
|
| |
—
|
|
| |
9,541(6)
|
| |
$137,581
|
| |
—
|
| |
—
|
(1)
|
Market value is computed by multiplying the closing market price of the Company’s stock at December 31, 2020 by the number of shares.
|
(2)
|
Restricted stock granted on 01/09/2018 that vests as to one-third of the total award on the one-year anniversary of the date of the grant and quarterly over the succeeding 24 months.
|
(3)
|
Restricted stock units granted on 01/09/2018 that vest as to one-third of the shares underlying the award on the first anniversary of the grant date, and the remaining shares in equal quarterly installments over the next two years. Settlement of the restricted stock units is deferred following vesting and the restricted stock units will not be settled until the earliest to occur of (1) January 9, 2022, (2) the death or disability of the NEO, (3) the separation from service of the NEO, or (4) a change in control of the Company. This amount includes earned unvested dividend equivalents. These dividend equivalents vest when and if the restricted stock units to which they relate vest.
|
(4)
|
Restricted stock units granted on 01/31/2019 that vest as to one-third of the shares underlying the award on the first anniversary of the grant date, and the remaining shares in equal quarterly installments over the next two years. This amount includes earned unvested dividend equivalents. These dividend equivalents vest when and if the restricted stock units to which they relate vest.
|
(5)
|
Restricted stock granted on 07/17/2019 that vests as to one-third of the total award on the one-year anniversary of the date of the grant and quarterly over the succeeding 24 months.
|
(6)
|
Restricted stock granted on 01/13/2020 that vests as to one-third of the total award on the one-year anniversary of the date of the grant and quarterly over the succeeding 24 months
|
(7)
|
Restricted stock granted on 03/14/2019 that vests as to one-third of the total award on the one-year anniversary of the date of the grant and quarterly over the succeeding 24 months.
|
(8)
|
Retention PSUs vest based on the Company’s Total Shareholder Return relative to certain publicly traded BDCs over the 4-year performance period, with 0% of the target number of PSUs vesting if the relative TSR is below the 25th percentile level of the peer group, 50% of the target number of PSUs vesting if the relative TSR is at the 25th percentile level of the peer group, 100% of the target number of PSUs vesting if the relative TSR is at the 50th percentile of the peer group, 200% of the target number of PSUs vesting if the relative TSR is at the 90th percentile of the peer group and by linear interpolation between the foregoing metrics. Values shown represent maximum performance at 200% of the target number of shares granted, exclusive of any accrued dividend equivalents. Actual performance equaled maximum performance based on the Company’s TSR performance through December 31, 2020. Dividend equivalents will accrue in the form of additional Retention PSUs, but will not be paid unless the Retention PSUs to which such dividend equivalents relate actually vest. Based on maximum performance, there would have been 320,585 dividend equivalents accrued through December 31, 2020. TSR is calculated assuming dividend reinvestment and measurement begins on the date of grant and utilizes a 20-trading day volume weighted average price ending on the last trading day of the 4-year TSR performance period. In the event of death or disability occurring prior to the fourth anniversary of the date of grant, Retention PSUs will vest, along with any accrued dividend equivalents, on the date of such death or disability, with the relative TSR used to calculate such vesting to be the greater of (a) 50% and (b) the actual relative TSR as of the date of such death or disability. In the event of a voluntary termination prior to the fourth anniversary, all Retention PSUs, and accrued dividend equivalents, will be forfeited. In the event of an involuntary termination without cause prior to the fourth anniversary of the date of grant, the Retention PSUs will be pro-rated based on service through the date of termination and such pro-rated Retention PSUs will vest based on the actual relative TSR performance over the four-year TSR performance period. In the event of a termination for cause occurring at any time prior to delivery of the shares underlying the Retention PSUs, all Retention PSUs and accrued dividend equivalents will be forfeited. In the event of a change in control of the Company, Retention PSUs will vest and be paid on a non-pro-rated basis based on the actual relative TSR performance through the date of the change in control utilizing the transaction price for the Company and the peer group TSR through the date of the change in control. Settlement of the Retention PSUs is deferred following vesting until the fifth anniversary of the grant date. Notwithstanding the foregoing, in the event of (1) the death or disability of the NEO or (2) a change in control of the Company, the vested portion of the award will become payable on such date.
|
EXECUTIVE COMPENSATION
|
|
| |
40
|
| |
|
|
|
| |
Stock Awards
|
|||
Name
|
| |
Number of Shares
Acquired on
Vesting
|
| |
Value Realized
on Vesting
|
Scott Bluestein
|
| |
201,561
|
| |
$2,520,629
|
Seth H. Meyer
|
| |
23,540
|
| |
$264,960
|
Melanie Grace
|
| |
9,600
|
| |
$122,948
|
Name
|
| |
Executive
contributions in
last fiscal year
($)(1)
|
| |
Aggregate
earnings in last
fiscal year
($)(2)
|
| |
Aggregate
withdrawals/
distributions
($)
|
| |
Aggregate balance
at last fiscal year
end
($)(3)
|
Scott Bluestein
|
| |
$590,318
|
| |
$692,182
|
| |
—
|
| |
$4,310,682
|
Melanie Grace
|
| |
$87,111
|
| |
$109,048
|
| |
—
|
| |
$686,068
|
(1)
|
Represents deferred restricted stock units with respect to the awards granted on 01/24/2017 and 01/09/2018, which were reported in the Summary Compensation Table in 2017 and 2018, respectively.
|
(2)
|
Represents appreciation and dividend equivalents with respect to the underlying deferred restricted stock units. Such dividend equivalents were reported in the Summary Compensation Table in the year in which they were accrued.
|
(3)
|
The aggregate balance at December 31, 2019 was $3,028,182 for Mr. Bluestein and $489,909 for Ms. Grace.
|
|
|
| |
41
|
| |
|
EXECUTIVE COMPENSATION
|
EXECUTIVE COMPENSATION
|
|
| |
42
|
| |
|
|
Name
|
| |
Benefit
|
| |
Upon death or
disability(1)
|
| |
Upon a
change in
control(1)
|
| |
Termination
without cause
prior to a
change in
control(2)
|
| |
Resignation
for good
reason prior to
a change in
control(2)
|
| |
Termination
without cause
or resignation
for good
reason after a
change in
control(2)
|
Scott Bluestein
|
| |
Salary
|
| |
—
|
| |
—
|
| |
$1,137,500
|
| |
$1,137,500
|
| |
$1,137,500
|
|
| |
Bonus
|
| |
—
|
| |
—
|
| |
$3,199,167
|
| |
$3,199,167
|
| |
$3,199,167
|
|
| |
Other(3)
|
| |
—
|
| |
—
|
| |
$76,552
|
| |
$76,552
|
| |
$76,552
|
|
| |
Accelerated equity
award vesting
|
| |
$25,291,454
|
| |
$25,291,454
|
| |
$18,497,889
|
| |
$6,044,763
|
| |
$25,402,056
|
|
| |
Total
|
| |
$25,291,454
|
| |
$25,291,454
|
| |
$22,911,108
|
| |
$10,457,982
|
| |
$29,815,275
|
Seth H. Meyer
|
| |
Accelerated equity
award vesting
|
| |
$1,332,884
|
| |
$1,332,884
|
| |
—
|
| |
—
|
| |
$1,332,884
|
|
| |
Total
|
| |
$1,332,884
|
| |
$1,332,884
|
| |
—
|
| |
—
|
| |
$1,332,884
|
Melanie Grace
|
| |
Accelerated equity
award vesting
|
| |
$258,031
|
| |
$258,031
|
| |
—
|
| |
—
|
| |
$258,031
|
|
| |
Total
|
| |
$258,031
|
| |
$258,031
|
| |
—
|
| |
—
|
| |
$258,031
|
(1)
|
In the event of the death or disability of an NEO or a change in control of the Company, all unvested restricted stock units and all unvested shares of restricted stock granted in 2019 and 2020 will vest in full and, in the case of restricted stock units, will be settled as soon as reasonably practicable following such death, disability or change in control. On December 31, 2020, Messrs. Bluestein and Meyer and Ms. Grace held the following number of outstanding restricted stock units, respectively: 131,698 units, 0 units and 8,353 units. On December 31, 2020, Messrs. Bluestein and Meyer and Ms. Grace held the following number of outstanding shares of restricted stock granted in 2019 and 2020, respectively: 326,815 shares, 92,433 shares and 9,541 shares. With respect to Retention PSUs held by Mr. Bluestein, in the event of death or disability occurring prior to the fourth anniversary of the date of grant, Retention PSUs will vest, along with any accrued dividend equivalents, on the date of such death or disability, with the relative TSR used to calculate such vesting to be the greater of (a) 50% and (b) the actual relative TSR as of the date of such death or disability. On December 31, 2020, the greater is the actual relative TSR, and thus, 200% of the target amount of the Retention PSUs and accrued dividend equivalents would have vested had a death or disability occurred on such date. Accordingly, Mr. Bluestein would have vested in 1,295,402 PSUs. In the event of a change in control of the Company, the Retention PSUs will vest and be paid on a non-pro-rated basis based on the actual relative TSR performance through the date of the change in control. Assuming a change in control of the Company occurred on December 31, 2020, based on the Company’s closing stock price of $14.22, 200% of the target amount of the Retention PSUs and accrued dividend equivalents would have vested, which would have resulted in Mr. Bluestein vesting in 1,295,402 PSUs.
|
(2)
|
Pursuant to the retention agreement entered into by Mr. Bluestein, he shall be entitled to receive certain benefits described above under the section titled “Retention Agreement.” The amounts included in the rows for salary, bonus, other and accelerated equity award vesting (except for amounts with respect to Retention PSUs) are governed by the retention agreement. For purposes of determining the payments and benefits that Mr. Bluestein would be entitled to under the retention agreement, a salary of $650,000, and three-year average annual bonuses of $1,163,333 were used for Mr. Bluestein. With respect to accelerated equity award vesting, on December 31, 2020, Mr. Bluestein held 131,698 outstanding restricted stock units and 334,485 shares of restricted stock of which 131,698 restricted stock units and 287,494 shares of restricted stock would vest within 1.75 years of December 31, 2020. The retention agreement does not modify the terms of the Retention PSUs. With respect to the Retention PSUs, in the event of an involuntary termination without cause prior to the fourth anniversary of the date of grant, the Retention PSUs will be pro-rated based on service through the date of termination and such pro-rated Retention PSUs will vest based on the actual relative TSR performance over the four-year TSR performance period. Assuming a termination without cause on December 31, 2020, 66.67% would be prorated for service through December 31, 2020. Because the actual relative TSR performance over the performance period will not be known until after the performance period ends on May 2, 2022, the actual relative TSR performance has been based on the actual relative TSR performance as of December 31, 2020, which would result in assumed vesting of 200% of the target amount of the Retention PSUs and accrued dividend equivalents. Thus, after prorating for a short service period ending on December 31, 2020, Mr. Bluestein would have vested in 863,601 PSUs. Such number of vested PSUs earned by Mr. Bluestein would increase by the amount of dividend equivalents accrued until the end of the performance period on May 2, 2022, which amount of dividend equivalents will be dependent on the Company’s stock price and the amount of each such dividend.
|
(3)
|
Reimbursement of the full amount of COBRA premiums for Mr. Bluestein and his eligible dependents for 18 months following termination of employment, estimated at $4,252.88 per month.
|
|
|
| |
43
|
| |
|
EXECUTIVE COMPENSATION
|
Name
|
| |
Fees Earned or
Paid in Cash
($)(1)
|
| |
Stock
Awards
($)(2)
|
| |
Option
Awards
($)
|
| |
All Other
Compensation
($)(3)
|
| |
Total
($)
|
Robert P. Badavas
|
| |
$201,250
|
| |
$59,994
|
| |
—
|
| |
$3,629
|
| |
$264,873
|
Gayle Crowell
|
| |
$157,569
|
| |
—
|
| |
—
|
| |
$3,481
|
| |
$161,051
|
Thomas J. Fallon
|
| |
$150,000
|
| |
—
|
| |
—
|
| |
—
|
| |
$150,000
|
Carol L. Foster
|
| |
$150,000
|
| |
$59,994
|
| |
—
|
| |
$5,675
|
| |
$215,669
|
Joseph F. Hoffman
|
| |
$175,000
|
| |
—
|
| |
—
|
| |
$5,341
|
| |
$180,341
|
Brad Koenig
|
| |
$150,000
|
| |
—
|
| |
—
|
| |
—
|
| |
$150,000
|
Jorge Titinger
|
| |
$118,750
|
| |
—
|
| |
—
|
| |
—
|
| |
$118,750
|
Doreen Woo Ho
|
| |
$165,000
|
| |
—
|
| |
—
|
| |
$5,341
|
| |
$170,341
|
Scott Bluestein(4)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
(1)
|
Messrs. Fallon, Hoffman, Koenig and Mss. Crowell and Woo Ho earned $100,000, $125,000, $100,000, $107,569 and $115,000, respectively, in cash and each elected to receive an additional retainer fee of 4,379 shares of our common stock in lieu of cash with a total value of $50,000.
|
(2)
|
During 2020, in connection with their re-election to our Board, we granted Mr. Badavas and Ms. Foster a restricted stock award for 5,499 shares each of common stock. The amounts presented reflect the aggregate grant date fair value of the stock awards, as computed in accordance with FASB ASC Topic 718. The grant date fair value of each restricted stock award is measured based on the closing price of our common stock on the date of grant.
|
(3)
|
Represents distributions paid during 2020 on unvested common stock under restricted stock awards.
|
(4)
|
As an employee director, Mr. Bluestein did not receive any compensation for his service as a director. The compensation Mr. Bluestein received as our chief executive officer is disclosed in the Summary Compensation Table and elsewhere under “EXECUTIVE COMPENSATION.”
|
Annual Director Retainer Fee
|
| |
$100,000
|
Annual Chairperson Fee
|
| |
$25,000, Audit Committee
|
|
| |
$25,000, Compensation Committee
|
|
| |
$15,000, Governance Committee
|
Annual Chairman of the Board Fee
|
| |
$60,000
|
EXECUTIVE COMPENSATION
|
|
| |
44
|
| |
|
|
Plan Category
|
| |
(a)
Number of Securities
to be issued upon
exercise of
outstanding options,
and warrants
|
| |
(b)
Weighted-average
exercise price of
outstanding options,
and warrants
|
| |
(c)
Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (a))
|
Equity compensation plans approved by stockholders:
|
| |
|
| |
|
| |
|
2018 Equity Incentive Plan
|
| |
2,456,581(1)
|
| |
$13.47
|
| |
7,344,285
|
2006 Non-Employee Director Plan(2)
|
| |
80,000(3)
|
| |
$13.65
|
| |
0
|
2018 Non-Employee Director Plan(4)
|
| |
|
| |
|
| |
272,033
|
Equity compensation plans not approved by stockholders:
|
| |
—
|
| |
—
|
| |
—
|
Total
|
| |
2,536,581
|
| |
|
| |
7,616,318
|
(1)
|
Represents the number of shares of common stock associated with outstanding options (438,809 shares), unsettled PSUs (1,295,403 shares) and unsettled RSUs along with dividend equivalent units on such RSUs (722,369 shares) under the 2018 Equity Incentive Plan. The number of shares related to unsettled PSUs, RSUs and dividend equivalent units are not included in the weighted-average exercise price in column (b).
|
(2)
|
Our 2006 Non-Employee Director Plan terminated on June 21, 2017 and no additional awards may be made under our 2006 Non-Employee Director Plan.
|
(3)
|
Represents the number of shares of common stock associated with outstanding options under the 2006 Non-Employee Director Plan.
|
(4)
|
Our 2018 Non-Employee Director Plan was approved on June 28, 2018.
|
|
|
| |
45
|
| |
|
EXECUTIVE COMPENSATION
|
•
|
Aligned long-term performance incentive awards with stockholder interests by tying incentive awards to, among other things, key financial metrics based on objective criteria;
|
•
|
Enhanced our CD&A disclosure to better explain the Company’s compensation principles and process;
|
•
|
Established a clawback policy to enable the Company to recover executive incentive compensation if, among other things, the Company restates its financial statements;
|
•
|
Re-evaluated our stock ownership policy for executive officers and our directors that requires minimum ownership as a multiple of base salary, in the case of executive officers, and minimum ownership as a multiple of their annual cash retainer, in the case of our directors; and
|
•
|
Removed income tax gross-up payments in the event of a future change in control of the Company.
|
PROPOSAL 2
|
|
| |
46
|
| |
|
|
|
|
| |
47
|
| |
|
PROPOSAL 2
|
|
| |
Fiscal Year Ended
(in millions)
|
|||
|
| |
2020
|
| |
2019
|
Audit Fees
|
| |
$1.1
|
| |
$1.1
|
Audit-Related Fees
|
| |
—
|
| |
—
|
Tax Fees
|
| |
$0.1
|
| |
$0.1
|
All Other Fees
|
| |
$0.2
|
| |
$0.1
|
Total Fees:
|
| |
$1.4
|
| |
$1.3
|
PROPOSAL 3
|
|
| |
48
|
| |
|
|
AUDIT COMMITTEE MEMBERS
|
Joseph F. Hoffman, Chair
Robert P. Badavas
Brad Koenig
Carol L. Foster
|
|
|
| |
49
|
| |
|
PROPOSAL 3
|
|
| |
By Order of the Board
|
|
| |
|
|
| |
Melanie Grace
General Counsel, Chief Compliance Officer and
Secretary
|
STOCKHOLDER PROPOSALS
|
|
| |
50
|
| |
|
|
Q:
|
Why did you send me this Proxy Statement?
|
A:
|
We have sent you this Proxy Statement and the enclosed proxy card because our Board is soliciting your proxy to vote at our 2021 annual meeting of stockholders. The annual meeting will be held virtually at www.virtualshareholdermeeting.com/HTGC2021, on June 24, 2021 at 9 a.m., Pacific Time. This Proxy Statement summarizes the information regarding the matters to be voted upon at the annual meeting. However, you do not need to attend the virtual annual meeting to vote your shares. You may simply complete, sign and return the enclosed proxy card or authorize a proxy to vote your shares by telephone or over the Internet in accordance with the instructions contained on the proxy card. If your shares are held in “street name,” you will receive instructions for the voting of your shares from your broker, bank or other nominee, which may permit telephone or Internet voting. Follow the instructions on the voting instruction form that you receive from your broker, bank or other nominee to ensure that your shares are properly voted at the annual meeting. Further information on voting your shares is provided below under “How do I vote?”
|
Q:
|
Who can vote, and how many votes do I have?
|
A:
|
If you owned shares of our common stock at the close of business on April 23, 2021, you are entitled to vote your shares at our virtual 2021 annual meeting. This date is the record date for the annual meeting. As of the record date, we had 115,743,190 shares of common stock outstanding.
|
Q:
|
How do I vote?
|
A:
|
If your shares are registered in your name, you may vote at the virtual annual meeting or by proxy without attending the meeting. Registered stockholders may also authorize a proxy to vote by telephone or over the Internet by following the instructions included with your proxy card or the notice we mailed to you. In addition, if you received a printed proxy card, you may mark, sign, date, and mail the proxy card you received from Hercules in the postage-paid return envelope. If you vote by any of these available methods, your shares will be voted at the annual meeting in accordance with your instructions. If you sign and return the proxy card or vote by telephone or over the Internet, but do not provide voting instructions on some or all of the proposals, your shares will be voted by the persons named in the proxy card on all uninstructed proposals in accordance with the recommendations of our Board given below.
|
Q:
|
What is the quorum requirement for the annual meeting?
|
A:
|
A quorum of stockholders must be present for any business to be conducted at the annual meeting. The quorum requirement for holding the annual meeting and transacting business is the presence in person or by proxy of a majority of our outstanding shares entitled to be voted. Abstentions and broker non-votes will be treated as shares present for determining whether a quorum is established. If there are not sufficient votes for a quorum to be established, the chairman of the annual meeting may adjourn the meeting to permit further solicitation of proxies by the company.
|
Q:
|
What does it mean if I receive more than one proxy card?
|
A:
|
If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.
|
|
|
| |
51
|
| |
|
QUESTION AND ANSWER
|
Q:
|
What is householding?
|
A:
|
Some banks, brokers and other nominee record holders may be “householding” our Proxy Statements, annual reports and related materials. “Householding” means that only one copy of these documents may have been sent to multiple stockholders in one household. If you would like to receive your own set of Hercules’ Proxy Statements, annual reports and related materials, or if you share an address with another Hercules stockholder and together both of you would like to receive only a single set of these documents, please contact your bank, broker or other nominee.
|
Q:
|
May I change my vote or revoke my proxy?
|
A:
|
If you are a registered stockholder, you may revoke or change your proxy at any time before it is voted by notifying the secretary of Hercules in writing, by returning a signed proxy with a later date or submitting an electronic proxy as of a later date or by virtually attending the meeting and voting at the meeting. Attendance at the Annual Meeting, in and of itself, will not constitute a revocation of a proxy. If your shares are held in “street name,” you must contact your bank, broker or other nominee for instructions on changing your vote.
|
Q:
|
What if I do not authorize my shares are to be voted?
|
A:
|
If you are the stockholder of record of your shares and you do not authorize a proxy to vote your shares by proxy card, by telephone or via the Internet or vote at the annual meeting, your shares will not be voted at the annual meeting.
|
Q:
|
What are the Board’s recommendations on how to vote my shares?
|
A:
|
Our Board recommends the following:
|
•
|
Proposal 1—FOR the election of the nominees named herein as a director
|
•
|
Proposal 2—FOR the approval of the advisory proposal on named executive officer compensation
|
•
|
Proposal 3—FOR the ratification of PwC as our independent public accounting firm
|
Q:
|
What if I do not specify how my shares are to be voted?
|
A:
|
If you are a stockholder of record and you submit a proxy, but you do not provide voting instructions, your shares will be voted:
|
•
|
Proposal 1—FOR the election of the nominees named herein as a director
|
•
|
Proposal 2—FOR the approval of the advisory proposal on named executive officer compensation
|
•
|
Proposal 3—FOR the ratification of PwC as our independent public accounting firm
|
•
|
In the discretion of the named proxies regarding any other matters properly presented for a vote at the annual meeting
|
QUESTION AND ANSWER
|
|
| |
52
|
| |
|
|
Q:
|
What is the vote required for each proposal?
|
A:
|
| |
Proposal
|
| |
Vote Required
|
| |
Broker Discretionary Voting Allowed?
|
| |
Effect of Abstentions and Broker Non-Votes
|
|
| |
Proposal 1—Election of three directors nominated by our Board and named in this Proxy Statement who will serve for the terms specified in this Proxy Statement
|
| |
Affirmative vote of a majority of the total votes cast for and votes cast against a nominee at the annual meeting in person or by proxy
|
| |
No
|
| |
Because directors are elected by a majority of the votes cast, an abstention will have no effect on the outcome of the vote and, therefore, is not offered as a voting option for this proposal. Broker non-votes will have no effect on the results of this vote
|
|
| |
|
| |
|
| |
|
| ||
|
| |
Proposal 2—Approval of advisory proposal on named executive officer compensation
|
| |
Affirmative vote of a majority of the votes cast at the annual meeting in person or by proxy
|
| |
No
|
| |
Abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote
|
|
| |
|
| |
|
| |
|
| ||
|
| |
Proposal 3—Ratification of the selection of PwC to serve as our independent public accounting firm for the fiscal year ending December 31, 2021
|
| |
Affirmative vote of a majority of the votes cast at the annual meeting in person or by proxy
|
| |
Yes
|
| |
Abstentions will not be counted as votes cast and will have no effect on the result of the vote; no broker non-votes on this proposal
|
Q:
|
What are abstentions and “broker non-votes”?
|
A:
|
An abstention represents action by a stockholder to refrain from voting “for” or “against” a proposal. “Broker non-votes” represent votes that are not cast on a non-routine matter by a broker that is present (in person or by proxy) at the meeting because the shares entitled to cast the votes are held in street name, the broker lacks discretionary authority to vote the shares and the broker has not received voting instructions from the beneficial owner.
|
Q:
|
Who is paying for the costs of soliciting these proxies?
|
A:
|
Hercules will pay all the costs of soliciting these proxies, including the preparation, assembly, printing and mailing of this Proxy Statement, the proxy card and any additional information furnished to stockholders. In addition to the solicitation of proxies by mail, our officers and employees also may solicit proxies by telephone, fax or other electronic means of communication, or in person. We have has also retained Broadridge Financial Services Inc. to assist in the solicitation of proxies for estimated fees of $6,500 plus out-of-pocket expenses.
|
Q:
|
How do I find out the results of the voting at the annual meeting?
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A:
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Preliminary voting results will be announced at the annual meeting. Final voting results will be published on Form 8-K within four (4) business days from the date of the annual meeting.
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QUESTION AND ANSWER
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Q:
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Who should I call if I have any questions?
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A:
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If you have any questions about the annual meeting, voting or your ownership of our common stock, please call Michael Hara, Investor Relations at (650) 433-5578 or send an e-mail to Melanie Grace, Secretary, at mgrace@htgc.com or call her at 650-600-5405.
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QUESTION AND ANSWER
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1 Year Hercules Capital Chart |
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