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Federal Register / Vol. 86, No. 87 / Friday, May 7, 2021 / Notices states that the ability to offer equitybased compensation to its employees and Non-Employee Directors, which both aligns employee and Board behavior with stockholder interests and provides a retention tool, is vital to Applicants future growth and success.
4. The Applicants 2019 NonEmployee Director Plan and 2019 Long Term Incentive Plan were adopted on October 17, 2019 by the Board, including the required majority as defined in Section 57o the Required Majority.3
5. The Board, including the Required Majority, found that granting Restricted Stock Awards to each Non-Employee Director will allow the Applicant to align its business plan and stockholder interests based on the nature of the Applicants business and the characteristics of Restricted Stock Awards. Applicant states that Restricted Stock Awards allow Participants, over time, to become owners of the Applicants stock with a vested interest in value maintenance, income stream and stock appreciation, which interests align with those of the Applicants stockholders.
6. The Non-Employee Director Plan will be administered by a committee designated by the Board Compensation Committee, the composition of which consists of nonemployee directors within the meaning of rule 16b3 under the Securities Exchange Act of 1934 Exchange Act each of whom also is not an interested person of Applicant within the meaning of section 2a19 of the Act.
7. The Applicants Non-Employee Director Plan provides that each NonEmployee Director may be granted shares of Restricted Stock at or about the beginning of each one-year term of service on the Board, subject to certain forfeiture restrictions. Applicant states that the number of such shares of Restricted Stock granted will be determined in the discretion of the Board. Applicant states that shares of Restricted Stock Awards will not be transferable except to a permitted transferee: The spouse or lineal descendants including adopted children of the Non-Employee Director, any trust for the benefit of the NonEmployee Director or the benefit of the spouse or lineal descendants including adopted children of the Non-Employee 3 Section 57o of the Act provides that the term required majority, when used with respect to the approval of a proposed transaction, plan, or arrangement, means both a majority of a BDCs directors or general partners who have no financial interest in such transaction, plan, or arrangement and a majority of such directors or general partners who are not interested persons of such company.

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Director, or the guardian or conservator of the participant. Applicant states that any shares of Restricted Stock held by a Non-Employee Director or such directors permitted transferee that have not vested shall be terminated, returned to Applicant, and again be available for issuance under the Non-Employee Director Plan. Applicant also states that any Restricted Stock Award granted pursuant to the Non-Employee Director Plan but that is forfeited pursuant to the terms of the Plan or an award agreement shall again be available under the NonEmployee Director Plan. Applicant states that the maximum aggregate number of shares of common stock that may be authorized for issuance as Restricted Stock Awards under the NonEmployee Director Plan is 60,000
shares.
8. The Applicants Long Term Incentive Plan provides for grants to Employee Participants of Restricted Stock and Options Plan Awards.4
The maximum aggregate number of shares of common stock that may be authorized for issuance under Plan Awards granted under the Long Term Incentive Plan is 3,600,00 shares. The maximum number of shares of common stock that any Employee Participant may be granted in a calendar year is 300,000 shares. Applicant states that any shares of common stock pursuant to a Plan Award that expires or otherwise terminates shall revert to and again become available for issuance under the Long Term Incentive Plan.
9. Unless the Board expressly provides otherwise, immediately upon the cessation of an Employee Participants continuous service, that portion, if any, i of any Restricted Stock Award held by the Employee Participant or the Employee Participants permitted transferee that is not then vested will terminate, and, in the case of a Restricted Stock Award, the unvested shares will be returned to the Applicant and will be available to be issued as Plan Awards under the Long Term Incentive Plan and ii of any Option held by an Employee Participant or such Employee Participants Permitted Transferee that is not yet exercisable will terminate and the balance will remain exercisable for the lesser of x a period of three months or y the period ending on the latest date 4 Although its Long Term Incentive Plan also permits the grant of Restricted Stock Units, Other Stock-Based Awards, Performance Based Awards, or Dividend Equivalent Rights, Applicant is not seeking relief from the Commission at this time to grant such units, awards, or rights. Applicant will not grant such units, awards, or rights unless and until Applicant requests and receives the necessary exemptive relief from the Commission with respect to such units, awards, or rights.

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on which such Option could have been exercised, and will thereupon terminate subject to certain provisions. Plan Awards will not be transferable except for disposition by will or the laws of descent and distribution. In addition, a Non-Statutory Stock Option is transferable by gift to a permitted transferee to the extent provided by the Board.
Applicants Legal Analysis Sections 23a and b, Section 63
1. Under section 63 of the Act, the provisions of section 23a of the Act generally prohibit a registered closedend investment company from issuing securities for services or for property other than cash or securities are made applicable to BDCs. This provision would prohibit the issuance of Restricted Stock as a part of the Plans.
2. Section 23b of the Act generally prohibits a registered closed-end investment company from selling any common stock of which it is the issuer at a price below its current net asset value. Section 632 of the Act makes section 23b applicable to BDCs unless certain conditions are met. Because Restricted Stock that would be granted under the Plans would not meet the terms of section 632, sections 23b and 63 would prevent the issuance of Restricted Stock.
3. Section 6c provides, in part, that the Commission may, by order upon application, conditionally or unconditionally exempt any person, security, or transaction, or any class or classes thereof, from any provision of the Act, if and to the extent that the exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act.
4. Applicant requests an order pursuant to section 6c of the Act granting an exemption from the provisions of sections 23a, 23b and 63 of the Act. Applicant states that the Plans would not raise the concerns underlying these sections, which include: a Preferential treatment of investment company insiders and the use of options and other rights by insiders to obtain control of the investment company; b complication of the investment companys structure that made it difficult to determine the value of the companys shares; and c dilution of shareholders equity in the investment company. Applicant asserts that the Restricted Stock element of the Plans does not raise concerns about preferential treatment of Applicants insiders because this element is a bona
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