DEF 14A of Runway Growth Finance Corp.
Filed Jul 3, 20240001104659-24-077786
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS Our business and affairs are managed under the direction of the Board. Pursuant to our articles of amendment and restatement (the “Articles of Amendment and Restatement”), the number of directors is set at three unless otherwise designated by the Board pursuant to our bylaws. In accordance with our bylaws, the Board has designated the number of directors to be five, three of whom are not “interested persons,” as defined in Section 2(a)(19) of the 1940 Act, of us, the Adviser or our respective affiliates. The Board is divided into three classes of directors serving staggered three-year terms. Each director holds office for the term to which he or she is elected and until his or her successor is duly elected and qualifies. At each Annual Meeting, the successors to the class of directors whose terms expire at such meeting will be elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election and until their successors have been duly elected and qualify or any director’s earlier resignation, death or removal. The terms of Julie Persily and John F. Engel, Class II directors, will expire at the Annual Meeting, and the Nominating and Corporate Governance Committee has recommended, and the Board has nominated, each of Ms. Persily and Mr. Engel to stand for re-election at the Annual Meeting and to hold office until the annual meeting to be held in 2027 and until each of their successors are duly elected and qualify. The Board has determined that each of Ms. Persily and Mr. Engel in not an “interested person”, as defined in Section 2(a)(19) of the 1940 Act, of the Company, of the Adviser, or any of their respective affiliates. Pursuant to the Company’s bylaws, the Nominating and Corporate Governance Committee appointed Mr. Share to fill a vacancy on the Board on August 18, 2023. Mr. Share’s appointment will expire at the Annual Meeting, and the Nominating and Corporate Governance Committee has recommended, and the Board has nominated, Mr. Share to stand for re-election at the Annual Meeting and to hold office until the annual meeting to be held in 2025 and until his successor is duly elected and qualified. Mr. Share is an “interested person” of the Company as defined in Section 2(a)(19) of the 1940 Act. Ms. Persily and Messrs. Engel and Share have each indicated their willingness to continue to serve if elected and have each consented to be named as a nominee. Ms. Persily and Mr. Engel have not been nominated to serve as directors pursuant to any agreement or understanding between each of Ms. Persily and Mr. Engel and the Company. Mr. Share is being nominated to serve as a director pursuant to an agreement between OCM Growth and the Company (the “OCM Agreement”). Under the OCM Agreement, OCM Growth has a right to nominate a member of our board of directors, who would be considered an “interested” person of the Company (as defined in the 1940 Act). OCM Growth has nominated Mr. Share. A stockholder can vote for or withhold his or her vote for the nominee. In the absence of instructions to the contrary, it is the intention of the persons named as proxies to vote such proxy FOR the election of the nominees named in this proxy statement. If the nominees should decline or be unable to serve as directors, it is intended that the proxy will be voted for the election of such persons as is nominated as a replacement by the Nominating and Corporate Governance Committee and the Board. The Board has no reason to believe that the nominee will be unable or unwilling to serve.
Required Vote
Required Vote The director nominees shall be elected by a plurality of all the votes cast at the Annual Meeting in person (i.e., virtually) or by proxy, provided that a quorum is present. The requirement for “the affirmative vote of a plurality of all the votes cast” means that the nominee who receives the largest number of votes of the applicable shares cast in person or by proxy at the Annual Meeting (even if he or she receives less than a majority) will be elected or re-elected, as applicable, as a director. If you vote “withhold authority” with respect to the nominee, your shares will not be voted with respect to the nominee indicated. Because directors are elected by a plurality of the votes, an abstention will have no effect on the outcome of the vote and, therefore, is not offered as a voting option for this proposal. Shares represented by broker non-votes also are not considered votes cast and thus have no effect on the proposal.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF JULIE PERSILY JOHN F. ENGEL AND GREGORY M. SHARE
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF JULIE PERSILY JOHN F. ENGEL AND GREGORY M. SHARE
Biographical Information
Biographical Information Set forth below is a brief biography of Ms. Persily and Messrs. Engel and Share, and of all other members of the Board who will continue in office. Also included below following each biography is a brief discussion of the specific experience, qualifications, attributes or skills that led the Board to conclude that the applicable director should serve on our Board at this time. In addition, set forth further below is a biography of each executive officer who is not a director. Unless otherwise indicated by footnote, the address for each listed individual is 205 N. Michigan Ave, Suite 4200, Chicago, IL 60601.
Nominees for Election as Class II Directors
Nominees for Election as Class II Directors
Nominees for Election as Class II Directors
| Name | Age | Position | Expiration of Term | Director Since | | Julie Persily | 58 | Director (Independent) | 2024 | 2017 |
Nominees for Election as Class II Directors
Julie Persily has served as a member of the Board since 2017 and is Chair of the Audit Committee and a member of the Nominating and Corporate Governance Committee and the Compensation Committee.Ms. Persily has also served as a member of the board of directors of Investcorp Credit Management BDC, Inc. (f/k/a CM Finance Inc.) (Nasdaq: ICMB), a business development company, since 2013; SEACOR Marine Holdings Inc. (NYSE: SMHI), a global marine and support transportation services company, since April 2018; and Stepstone Private Credit Fund LLC, a business development company, since 2023. Ms. Persily retired in 2011 after serving as the Co-Head of Leveraged Finance and Capital Markets of Nomura Securities North America, a unit of Nomura Holdings Inc. (NYSE: NMR), a securities and investment banking company, since July 2010. Ms. Persily previously served in various capacities at Citigroup Inc. (NYSE: C), a financial services company, including as the Co-Head of Leveraged Finance Group from December 2006 to November 2008, the Head of Acquisition Finance Group from December 2001 to November 2006 and as Managing Director from July 1999 to November 2001. From 1990 to 1999, Ms. Persily served in various capacities including as a Managing Director, Leveraged Finance at BT Securities Corp., a financial services company and a subsidiary of Bankers Trust Corp., which was acquired by Deutsche Bank in April 1999. From 1987 to 1989, Ms. Persily served as an analyst at Drexel Burnham Lambert, a securities and investment banking company. Ms. Persily received a B.A. in psychology and economics from Columbia College and a M.B.A. in financing and accounting from Columbia Business School. The Board has concluded that Ms. Persily’s extensive experience with structuring, negotiating and marketing senior loans and high-yield and mezzanine financings brings important and valuable skills to the Board.
Nominees for Election as Class II Directors
| Name | Age | Position | Expiration of Term | Director Since | | John F. Engel | 64 | Director (Independent) | 2024 | 2022 |
Nominees for Election as Class II Directors
John F. Engel has served as a member of the Board since 2022 and is the Chair of the Compensation Committee and a member of the Nominating and Corporate Governance Committee and the Audit Committee. Mr. Engel is a co-founder and partner of Jackson Springs Management Partners, LLC, a management firm that provides strategic advice and capital to help closely-held businesses pursue their strategic and financial objectives. Prior to co-founding Jackson Springs Management Partners, LLC in 2019, Mr. Engel served as a consultant and adviser to various executives of start-up companies and large not-for-profit companies from 2016 to 2019. From 1996 until his retirement in 2015, Mr. Engel was employed by Accenture, a global professional services company with leading capabilities in digital, cloud and security, where he served in a variety of client-facing and leadership roles for twenty years, including Managing Partner and Executive Partner for several key strategies. Mr. Engel holds an M.B.A. from the University of Chicago Booth School of Business and a B.S. in Accounting and Business Management from the University of Michigan. The Board has concluded that Mr. Engel’s extensive investment banking and management consulting experience provides the Board with knowledge and expertise on these and other matters, thus qualifying him to serve as a member of the Board.
Nominee for Election as Class III Director
Nominee for Election as Class III Director
Nominee for Election as Class III Director
| Name | Age | Position | Expiration of Term | Director Since | | Gregory M. Share | 50 | Director (Interested) | 2025 | 2023 |
Nominee for Election as Class III Director
Gregory M. Share has served as a member of the Board since August 2023. Mr. Share is a managing director in Oaktree’s Global Opportunities group in Los Angeles. He joined the firm in 2021 from Ambina Partners, investing primarily in U.S.-based private software and financial services companies. Prior thereto, Mr. Share was a partner at Moelis & Company’s Moelis Capital Partners. Before that, he served as a managing director in private equity at Fortress Investment Group. Mr. Share began his career at Lazard Freres & Co. as an analyst in mergers & acquisitions before moving on to Madison Dearborn Partners, first as an associate, and then as a vice president. He received a B.S. in economics magna cum laude from the Wharton School of the University of Pennsylvania with a dual concentration in finance and decision science. Mr. Share is a CFA charterholder. The Board has concluded that Mr. Share’s extensive investment and management experience provides the Board with knowledge and expertise on these and other matters, thus qualifying him to serve as a member of the Board.
Incumbent Class III Directors: Term Expiring 2025
Incumbent Class III Directors: Term Expiring 2025
Incumbent Class III Directors: Term Expiring 2025
| Name | Age | Position | Expiration of Term | Director Since | | R. David Spreng | 62 | Chairman of the Board (Interested), Chief Executive Officer and President | 2025 | 2015 |
Incumbent Class III Directors: Term Expiring 2025
R. David Spreng is our President, Chief Executive Officer and Chairman of the Board. Mr. Spreng is also the founder, Chief Executive Officer and Chief Investment Officer of Runway Growth Capital LLC, our external investment adviser (the “Adviser”). Mr. Spreng has over 25 years of experience as a venture capitalist and ten years as a growth-debt lender. Mr. Spreng also previously served as a Partner of Decathlon Capital Partners, which he co-founded in 2010 as a provider of growth capital for established companies. He also served as Managing Partner of Crescendo Ventures, which he co-founded in 1998 as a venture capital firm focused on early-stage investments in the technology, digital media and technology-enabled service markets. He founded IAI Ventures in 1994, before which he served as Vice President and then Senior Vice President of Investment Advisers Inc., a $20 billion diversified asset management firm from 1989 to 1994. Mr. Spreng served on the board and as chairman of the Government Affairs Committee of the National Venture Capital Association from 2005 to 2009. He served as an advisory board member of the Silicon Valley Executive Network from 2007 to 2012 and as a member of the Silicon Valley Executive Network from 2007 to 2015. Mr. Spreng has been an active member of the World Economic Forum community since 2005, including as a frequent panelist in Davos, as a member of the Technology Pioneers Selection Committee, the Steering Committee for Entrepreneurship and Successful Growth Strategies, and as an adviser to the Alternative Investments 2020 and Mainstreaming Impact Investing initiatives. Mr. Spreng currently serves on the board of directors of a number of private companies. In addition, Mr. Spreng has served on the board of directors of eleven public companies. Mr. Spreng is a graduate, with distinction, of the University of Minnesota. The Board has concluded that Mr. Spreng’s experience in managerial positions in investment management, venture capital and direct growth-debt lending provides the Board valuable industry-specific knowledge and expertise on these and other matters, thus qualifying him to serve as a member of the Board.
Compensation of Directors
Compensation of Directors The following table sets forth the compensation received by our directors for the year ended December 31, 2023. No compensation is paid to our directors who are “interested persons,” as such term is defined in Section 2(a)(19) of the 1940 Act, for their service as directors.
Compensation of Directors
| Name | Fees Earned or Paid in Cash(1) | All Other Compensation(2) | Total | | Interested Directors | | | | | R. David Spreng | — | — | — | | Brian Laibow(3) | — | — | — | | Gregory Share(3) | — | — | — | | Independent Directors | | | | | Gary Kovacs | $112,000 | — | $112,000 | | Julie Persily | $112,000 | — | $112,000 | | John F. Engel | $112,000 | — | $112,000 |
Compensation of Directors
(1) For a discussion of the Independent Directors’ compensation, see below. (2) We do not maintain a stock or option plan, non-equity incentive plan or pension plan for our directors. (3) On July 10, 2023 Mr. Laibow resigned from the Board effective upon the appointment by the Board of another nominee by OCM Growth. On August 18, 2023, the Board approved the appointment of Mr. Share by OCM Growth to fill Mr. Laibow’s position on the Board, and to serve the remainder of Mr. Laibow’s term. The Independent Directors receive an annual fee of $95,000. They also receive $2,500 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending in-person each regular meeting of the Board and $1,500 for attending any regular Board meeting telephonically. They also receive $1,000 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with each committee meeting attended in-person and $500 for attending any committee meeting telephonically, as well as $500 plus reimbursement of reasonable out-of-pocket expenses in connection with attending each special Board meeting. The Chair of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee each receive an annual fee of $5,000. We have obtained directors’ and officers’ liability insurance on behalf of our directors and officers. Independent Directors will have the option of having their directors’ fees paid in shares of our common stock issued at a price per share equal to the per share net asset value of our common stock.