DEF 14A of Trinity Capital Inc., Apr 26, 2024

DEF 14A of Trinity Capital Inc.

Filed Apr 26, 2024 · FY20230001213900-24-036628

Open on EDGAR

  1. PROPOSAL 1: ELECTION OF DIRECTOR NOMINEES

    PROPOSAL 1: ELECTION OF DIRECTOR NOMINEES At the Annual Meeting, stockholders of the Company are being asked to consider the re-election of two directors of the Company, as described below. Pursuant to the Company’s bylaws, the number of directors on the Board may not be fewer than the minimum number required by the Maryland General Corporation Law or greater than eleven. The Board is currently classified as it is divided into three classes of directors serving staggered three-year terms in which directors are elected by stockholders each year. However, commencing as of the date of our 2027 Annual Meeting of Stockholders (the “2027 Annual Meeting”), the Board will cease to be classified and will be de-classified. As a result, the class of directors standing for election at the Annual Meeting will stand for election for three-year terms, the class of directors standing for election at our 2025 Annual Meeting of Stockholders will stand for election for two-year terms, and the class of directors standing for election at our 2026 Annual Meeting of Stockholders will stand for election for one-year terms, in each case expiring at the 2027 Annual Meeting. Commencing with the 2027 Annual Meeting, the directors elected at the 2027 Annual Meeting (and each meeting thereafter) will be elected for a term expiring at the next annual meeting of stockholders. In all cases, each director will hold office until his or her successor has been duly elected and qualified or until such director’s earlier death, retirement, resignation or removal. The Board currently consists of six directors who serve in the following classes: • Class 1 — Ronald E. Estes and Michael E. Zacharia (terms end at the 2026 annual meeting of stockholders); • Class 2 — Kyle Brown and Richard P. Hamada (terms end at the Annual Meeting, and, if re-elected at the Annual Meeting, subsequent terms will end at the 2027 Annual Meeting); and • Class 3 — Irma Lockridge and Steven L. Brown (terms end at the 2025 annual meeting of stockholders). Kyle Brown and Richard P. Hamada have been nominated for re-election to the Board as Class 2 directors to serve a three-year term until the 2027 Annual Meeting and until their respective successors are duly elected and qualified. If any of Messrs. K. Brown and Hamada are not re-elected by stockholders at the Annual Meeting, they will each remain a director until their respective successors are duly elected and qualified. Messrs. K. Brown and Hamada each have agreed to serve as a director if re-elected and consented to being named as a nominee in this Proxy Statement. A stockholder can vote for, against or abstain from voting for any of the director nominees. In the absence of instructions to the contrary, it is the intention of the persons named as proxies to vote such proxy FOR the re-election of each director nominee named in this Proxy Statement. If a director nominee should decline or be unable to serve as a director, the persons named as proxies will vote for such other nominee as may be proposed by the Board’s Nominating and Corporate Governance Committee. The Board has no reason to believe that any person named as director nominee will be unable or unwilling to serve. The affirmative vote of a majority of the votes cast at the Annual Meeting in person (virtually) or by proxy is required to re-elect each director nominee to the Board. For this proposal, “abstain” votes and broker non-votes, if any, will count as Shares represented at the meeting for purpose of establishing a quorum but will have no effect on the outcome of the vote. There will be no cumulative voting with respect to this proposal. THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” EACH DIRECTOR NOMINEE.

  2. Information about the Director Nominees and Other Directors

    Information about the Director Nominees and Other Directors Set forth below is information, as of April 15, 2024, regarding Messrs. K. Brown and Hamada, who have been nominated by the Board for re-election as directors of the Company by stockholders at the Annual Meeting, as well as information about the Company’s other current incumbent directors whose terms of office will continue after the Annual Meeting. Neither Mr. K. Brown nor Mr. Hamada is being proposed for re-election pursuant to any agreement or understanding between any of Mr. K. Brown and Mr. Hamada, on the one hand, and the Company or any other person or entity, on the other hand. The information below includes specific information about each director’s experience, qualifications, attributes or skills that led the Board to the conclusion that the individuals are qualified to serve on the Board, in light of the Company’s business and structure. There were no legal proceedings of the type described in Items 401(f)(7) and (8) of Regulation S-K in the past 10 years against any of our directors, director nominee or officers, and none are currently pending. Nominees for Class 2 Director — Terms Expiring 2027:

  3. Information about the Director Nominees and Other Directors

    | Name, Address, and Age(1) | Position(s) held with the Company | Principal Occupation(s) During the Past 5 Years | Term of Office and Length of Time Served(2) | Other Directorships Held by Director or Nominee for Director | | Interested Director(3) | | | | | | Kyle Brown, 40 | Director, Chief Executive Officer, President, and Chief Investment Officer Director | Managing Partner, Trinity Capital Investments (predecessor to the Company) | Class 2 Director since 2019; Term expires in 2024 | — | | Independent Director | | | | | | Richard P. Hamada, 65 | | Director | Class 2 Director since 2021; Term expires in 2024 | Keysight Technologies, Inc. (KEYS) |

  4. Information about the Director Nominees and Other Directors

    ____________ (1) The address for each director is c/o Trinity Capital Inc., 1 N. 1st Street, Suite 302, Phoenix, Arizona 85004. (2) Directors will serve for three-year terms and until their successors are duly elected and qualified. (3) “Interested person” of the Company as defined in Section 2(a)(19) of the 1940 Act. Mr. K. Brown is an “interested person” because of his affiliation with the Company. Kyle Brown has served as the Company’s Chief Executive Officer since January 2024, the Company’s President and Chief Investment Officer since August 2019 and as a member of the Board since September 2019. Mr. K. Brown is also a member of the Company’s Investment Committee (the “Investment Committee”). Prior to joining the Company, Mr. K. Brown was a Managing Partner at Trinity Capital Investments (“Trinity”), a leading provider of venture loans and equipment financing to growth stage companies, and a member of its investment committees since 2015. In such capacity, Mr. K. Brown was responsible for managing the investment activities at Trinity in order to achieve the firm’s deployment goals and managed relationships with potential customers as well as with strategic partners, including venture capital firms and technology bank lenders. Prior to joining Trinity, Mr. K. Brown was the Founder and Chief Executive Officer of Brown Equity, LLC, a real estate financial investment firm, from 2006 to 2015. He also co-founded and managed Sharp Equity Homes, LLC, a full-service, web-based multiple listing service for trustee sale auctions in Arizona and California, from 2007 to 2012. Prior to that, Mr. K. Brown founded or co-founded three additional startups over the course of his career. Mr. K. Brown is the son of Steven L. Brown. The Company believes that Mr. K. Brown’s extensive investing, leadership, entrepreneurial experience and investment management process experience bring important and valuable skills to the Board and qualify him to serve as a member of the Board. Richard P. Hamada has served as a member of the Board since December 2021. Previously, Mr. Hamada was Chief Executive Officer of Avnet, Inc., an electronic components distributor, from July 2011 until he retired in July 2016. Since 2014, Mr. Hamada has served on the board of directors of Keysight Technologies, Inc., a test and measurement equipment provider, and is a member of Keysight’s Compensation and Human Capital and Nominating & Corporate Governance Committees. Mr. Hamada previously served on the boards of directors of Avnet, Inc. and Global Technology Distribution Council, and served as the board chair of National Education Partners, and as a member of the board of trustees of National University. Mr. Hamada was named to Computer Reseller News’ Top 25 Most Influential Channel Executives three times. The Company believes Mr. Hamada’s numerous management positions and director experience provide him with extensive sales, marketing and management knowledge, all of which make him well qualified to serve on the Board. Incumbent Class 3 Directors — Term Expiring 2025:

  5. Information about the Director Nominees and Other Directors

    | Name, Address, and Age(1) | Position(s) held with the Company | Principal Occupation(s) During the Past 5 Years | Term of Office and Length of Time Served(2) | Other Directorships Held by Director or Nominee for Director | | Independent Director | | | | | | Irma Lockridge, 51 | Director | Chief People and Systems Officer, CoorsTek, Inc. | Class 3 Director since 2021; Term expires in 2025 | — | | Interested Director(3) | | | | | | Steven L. Brown, 62 | Executive Chairman | Managing Partner, Trinity Capital Investments (predecessor to the Company) | Class 3 Director since 2019; Term expires in 2025 | — |

  6. Information about the Director Nominees and Other Directors

    ____________ (1) The address for each director is c/o Trinity Capital Inc., 1 N. 1st Street, Suite 302, Phoenix, Arizona 85004. (2) Directors are serving three-year terms and until their successors are duly elected and qualified. (3) “Interested person” of the Company as defined in Section 2(a)(19) of the 1940 Act. Mr. S. Brown is an “interested person” because of his affiliation with the Company. Irma Lockridge has served as a member of the Board since December 2021. Ms. Lockridge currently serves as the Chief People and Systems Officer for CoorsTek, Inc., a technical ceramics manufacturer. Prior to joining CoorsTek in April 2016, Ms. Lockridge served as the senior vice president of human resources of several companies, including Newell-Rubbermaid, Western Union, TeleTech Holdings, Inc., and Liberty Mutual/Colorado Casualty Insurance. Ms. Lockridge currently serves on the boards of Northwest Pipe Company, where she serves on the Compensation and Nominating & Corporate Governance Committees, the Denver Scholarship Foundation and the American Cancer Society. The Company believes Ms. Lockridge’s numerous management positions and broad experiences in Human Resources provide her with skills and valuable insight in talent acquisition, talent management, and strategic business partnering, all of which make her well qualified to serve on the Board. Steven L. Brown, the Company’s founder, has served as Executive Chairman of the Company since January 2024 and Chairman of the Board since August 2019. Mr. S. Brown previously served as the Company’s Chief Executive Officer from August 2019 to January 2024. Mr. S. Brown is also a member of the Investment Committee. Prior to founding the Company, Mr. S. Brown founded Trinity in January 2008 and was a Managing Partner at Trinity, a leading provider of venture loans and equipment financing to growth stage companies, since January 2008. Mr. S. Brown has 25 years of experience in venture equity and venture debt and working with growth stage companies. Prior to founding Trinity, Mr. S. Brown served as general partner at Point Financial Capital Partners, a venture leasing fund, from 2003 to 2008 and was the President and Chief Financial Officer of InvestLinc Financial Services, an early-stage private equity fund and consulting firm, from 1998 to 2002. He was also part of the founding group of Cornerstone Equity Partners, a private equity fund, and served as a partner from 1996 to 1998. Mr. S. Brown is a member of the Small Business Investment Alliance and serves on the Board of Directors for invisionAZ, which has a mission of accelerating the growth of Arizona’s vibrant tech ecosystem. He also serves on the Investment Committee for invisionAZ’s Arizona-based Venture Fund. Mr. S. Brown is the father of Kyle Brown, a fellow Director of the Company and its Chief Executive Officer, President and Chief Investment Officer. The Company believes that Mr. S. Brown’s history with the Legacy Funds (as such term is defined below), familiarity with the Company’s investment platform and extensive venture capital lending, equipment financing and management experience bring important and valuable skills to the Board and qualify him to serve as Chairman of the Board.

  7. Incumbent Class 1 Directors — Terms Expiring 2026

    Incumbent Class 1 Directors — Terms Expiring 2026

  8. Incumbent Class 1 Directors — Terms Expiring 2026

    | Name, Address, and Age(1) | Position(s) held with the Company | Principal Occupation(s) During the Past 5 Years | Term of Office and Length of Time Served(2) | Other Directorships Held by Director or Nominee for Director | | Independent Directors | | | | | | Ronald E. Estes, 67 | Director | President, CEO and CFO, LifeStream Complete Senior Living, Inc. | Class 1 Director since 2019; Term expires in 2026 | — | | Michael E. Zacharia, 72 | Director | Executive Coach and Consultant; Adjunct Professor of Law, Pepperdine University School of Law; Advisory Board Member, Center for Advanced Coaching | Class 1 Director since 2020; Term expires in 2026 | — |

  9. Incumbent Class 1 Directors — Terms Expiring 2026

    ____________ (1) The address for each director is c/o Trinity Capital Inc., 1 N. 1st Street, Suite 302, Phoenix, Arizona 85004. (2) Directors are serving for three-year terms and until their successors are duly elected and qualified. Ronald E. Estes has served as a member of the Board since September 2019. In 2022, Mr. Estes retired from his position as President and Chief Executive Officer of LifeStream Complete Senior Living, Inc., a non-profit provider of senior living communities, having served in that role since 2016 and as the company’s Chief Financial Officer since January 2013. In such capacities, Mr. Estes was responsible for all matters related to the mission, organization and financial oversight of LifeStream Complete Senior Living, Inc. Prior to that, Mr. Estes served as a tax director at McGladrey LLP (now RSM US LLP), an audit, tax and consulting services firm, from 2011 to 2012. Mr. Estes also previously served as the Chief Financial Officer of The Ryerson Company, a developer and operator of senior living communities, from 2003 to 2010. Mr. Estes is a certified public accountant with 15 years of public accounting experience. The Company believes Mr. Estes’ extensive management, leadership and accounting experience bring important and valuable skills to the Board and qualify him to serve as a member of the Board. Michael E. Zacharia has served as a member of the Board since December 2020. Mr. Zacharia has been an executive coach and consultant to Fortune 150 companies, privately held companies, non-profit organizations, and higher education institutions since 2008 and has served on the advisory board for the Center for Advanced Coaching since 2009. In addition, he has taught Cross-Cultural Negotiations and Dispute Resolution as an Adjunct Professor of Law at the Straus Institute for Dispute Resolution at the Pepperdine University School of Law since 2009 and was the Co-Director of the Pacis Project on Faith Based Diplomacy, a joint venture between Pepperdine University and the International Center for Religion and Diplomacy in Washington D.C., from 2008 to 2012. Previously, Mr. Zacharia served on the board of directors of Martha Stewart Living Omnimedia, Inc., a diversified media and merchandising company, during 2013 and served as the Executive Vice President for Business Development, the General Counsel and the Secretary of DFS Group Limited, a travel retail company, from 1996 to 2007. Prior to joining DFS Group Limited, Mr. Zacharia was a partner at the law firm of Wiley Rein LLP from 1989 to 1995. He also previously served as the Assistant Secretary of Commerce for Export Administration, the Deputy Assistant Secretary of State for International Trade Controls, and Special Counsel to the Undersecretary for International Trade in the Commerce Department. In addition, Mr. Zacharia was previously selected as a White House Fellow and served as Special Assistant in the office of the U.S. Secretary of State. The Company believes Mr. Zacharia’s extensive management, leadership and executive coaching and consulting experience bring important and valuable skills to the Board and qualify him to serve as a member of the Board.

  10. Compensation Committee

    Compensation Committee The Compensation Committee is composed of Michael E. Zacharia (chair), Richard P. Hamada and Ronald E. Estes, each of whom is considered independent under the Nasdaq corporate governance listing standards and is not considered an “interested person” of the Company as that term is defined in Section 2(a)(19) of the 1940 Act. In accordance with its written charter adopted by the Board, the Compensation Committee oversees our overall compensation strategies, plans, policies and programs, including determining the compensation for our executive officers and the amount of salary, bonus and stock-based compensation to be included in the compensation package for each of our executive officers. The Compensation Committee also assesses our compensation-related risks. The Compensation Committee has the authority to engage the services of outside advisers, experts and others as it deems necessary to assist the committee in connection with its responsibilities. In 2021, the Compensation Committee engaged Mercer, an independent third-party compensation consultant, to perform certain services related to our executive officer and non-employee director compensation, including but not limited to development and annual review of a compensation peer group, benchmarking of executive officer and non-employee director compensation and compensation-related governance matters. In choosing Mercer as its independent consultant, the Compensation Committee considered the six factors referenced in Item 407(e)(3)(iv) of Regulation S-K, including (1) the Compensation Committee’s provision of other services to the Company; (2) the amount of fees the Compensation Committee receives from the Company; (3) the Compensation Committee’s policies and procedures that are designed to prevent conflicts of interest; (4) any business or personal relationships between Mercer and any member of the Compensation Committee; (5) any stock of the Company owned by Mercer; and (6) any business or personal relationships between Mercer or the Compensation Committee with an executive officer of the Company. The Compensation Committee held five formal meetings in 2023 and acted on various occasions by unanimous written consent. Each member of the Compensation Committee (during the period for which he or she has been a member of the committee) attended all of the meetings held during 2023.

  11. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  12. Non-Employee Director 2019 Restricted Stock Plan

    Non-Employee Director 2019 Restricted Stock Plan On May 27, 2021, we received exemptive relief from the SEC (the “SEC Exemptive Order”) that allows us to issue restricted stock to our non-employee directors under the 2019 Restricted Stock Plan (as defined under Proposal 3 below), subject to the terms and conditions of such exemptive relief and such equity incentive plans. These equity incentive plans were approved by our Board on October 17, 2019, and by our stockholders on June 17, 2021 at our 2021 Annual Meeting of Stockholders. The 2019 Restricted Stock Plan became effective on June 17, 2021 and provides for grants of restricted stock awards (“Non-Employee Director Awards”) to our non-employee directors (the “Non-Employee Director Participants”), which are directors who are not “interested persons” of the Company (as such term is defined in Section 2(a)(19) of the 1940 Act) in accordance with the SEC Exemptive Order. The Non-Employee Director Participants will have the right to receive dividends on such awarded restricted stock, unless and until the restricted stock is forfeited. Subject to certain adjustments under the 2019 Restricted Stock Plan, the total number of shares of the Company’s common stock that may be subject to Non-Employee Director Awards is 60,000 shares. The Company has included a proposal in this Proxy Statement to increase the number of shares subject to Non-Employee Director Awards by 60,000 shares. See “Proposal 3 — Approval of an Amendment to the Trinity Capital Inc. 2019 Non-Employee Director Restricted Stock Plan.” The 2019 Restricted Stock Plan is administered by the Compensation Committee, subject to the discretion of the Board. The 2019 Restricted Stock Plan provides a means through which we may attract and retain qualified independent directors to enter into and remain in service on the Board. Under the 2019 Restricted Stock Plan, at the beginning of each one-year term of service on the Board, each Independent Director may, at the discretion of the Compensation Committee, receive a grant of shares of restricted stock in an amount determined by the Compensation Committee. These restricted shares are subject to forfeiture provisions that will lapse as to an entire award at the end of the one-year term. The 2019 Restricted Stock Plan will terminate on the day prior to the tenth anniversary of the date it was approved by the Company’s stockholders, unless terminated sooner by action of the Board. As detailed below, during the year ended December 31, 2023, the Company granted 15,196 shares of restricted stock under the 2019 Restricted Stock Plan. The Company determined that the fair value of such restricted stock granted during the year ended December 31, 2023 was approximately $0.2 million and recognized total share-based compensation expense of approximately $0.2 million for the year. As of December 31, 2023, there was approximately $0.1 million of total unrecognized compensation costs related to non-vested restricted stock awards.

  13. Director Summary Compensation Table

    | Name | Fees Earned or Paid in Cash | Stock Awards | Option Awards | All Other Compensation | Total | | Current Independent Directors | | | | | | | Ronald E. Estes | $115,000 | $49,995 | — | — | $164,995 | | Michael E. Zacharia | $115,000 | $49,995 | — | — | $164,995 | | Irma Lockridge | $110,000 | $49,995 | — | — | $159,995 | | Richard P. Hamada | $100,000 | $49,995 | — | — | $149,995 |

  14. Executive Compensation Philosophy

    Executive Compensation Philosophy Overview. Our performance-driven executive compensation program consists of the following three components: • base salary; • discretionary annual cash bonuses; and • equity and equity-based compensation pursuant to the 2019 Long-Term Incentive Plan (as defined under Proposal 2 below). We carefully design each NEO’s compensation package to appropriately reward the NEO for his or her contribution to the Company and align with the interests of our stockholders. This is not a mechanical process, and our Compensation Committee uses its judgment and experience, working in conjunction with our Chief Executive Officer and with input from its independent third-party compensation consultant, to determine the appropriate level and mix of compensation for each NEO. Cash compensation, consisting of base salary and discretionary annual cash bonuses tied to individual and corporate performance metrics set each year by the Compensation Committee, is intended to incentivize NEOs to remain employed with us and to work towards achieving our corporate goals. Equity and equity-based compensation may be awarded based on performance expectations set by the Compensation Committee for each individual and, over time, on his or her performance against those expectations. We continually assess our mix of short-term cash compensation and longer-term equity-based compensation to encourage retention of key employees and align their interests with our stockholders. Base salary. Base salary is set at a level to recognize the particular experience, skills, knowledge and responsibilities required of the NEOs in their roles. In connection with determining the 2023 annual base salaries of the NEOs, the Compensation Committee and management considered several factors, including the seniority of the individual, the functional role of the position, the level of the individual’s responsibility, the ability to replace the individual, and the number of well-qualified candidates available for the role. In addition, we considered the annual base salaries paid to comparably situated executive officers of similar entities and other competitive market practices, with input from the Compensation Committee’s third-party compensation consultant, Mercer. The annual base salaries of the NEOs are reviewed on an annual basis, and at the time of promotion or other changes in roles or responsibilities. The leading factors in determining increases in annual base salary level are relative performance, relative cost of living and market competitiveness. None of the NEOs received a base salary increase in 2023. Annual cash bonuses. Annual cash bonuses are intended to reward individual and company performance during the calendar year and can therefore be highly variable from year to year. These bonuses are determined on a discretionary basis by the Compensation Committee based upon company performance, individual performance and other metrics set by the Compensation Committee, with our management’s input. The Compensation Committee decided to maintain, and not increase, target cash bonus levels for our NEOs in 2023. The 1940 Act requires that discretion is maintained by the Compensation Committee with respect to incentive compensation paid to executive officers. Therefore, the Compensation Committee may consider certain established factors when determining NEOs’ annual cash bonuses, but the incentive compensation framework may not be formulaic or automatic. Our Compensation Committee established certain metrics to consider when determining the NEO cash bonuses for 2023 performance, paid in 2024, which included but were not limited to: • net distributable income for the applicable fiscal year; • return on equity for the applicable fiscal year; • return on assets for the applicable fiscal year; and • total stockholder return and stock performance for the applicable fiscal year. Our Compensation Committee will also consider operational metrics, such as realized gains or losses and unrealized appreciation or depreciation, portfolio activity and growth in total assets, as well as other strategic items of importance for a particular year. In evaluating the performance of our NEOs to determine their 2023 cash bonus amounts, the Compensation Committee compared our performance (particularly with respect to the metrics enumerated above) to our Board-approved annual operating plan and to the performance of a group of our BDC peers. The Compensation Committee also evaluated the performance and contributions of each NEO, with input from our Chief Executive Officer. Based on the foregoing considerations and analysis, and after due deliberation, the Compensation Committee awarded NEO bonuses for performance in 2023, which were paid during the first quarter of 2024, at 120% of target. In addition to these amounts, the Compensation Committee, in its discretion, approved a one-time bonus to our NEOs, paid out over seven quarters beginning in the first quarter of 2022 and ending in the third quarter of 2023, as a result of the Company’s net realized gain of $59.8 million in January 2022 from its liquidation of equity positions in two portfolio companies, Lucid Group, Inc. and Matterport Inc., due to the extraordinary nature of such net realized gain.

  15. Long-Term Incentive Awards

    Long-Term Incentive Awards Generally. We have adopted the 2019 Long-Term Incentive Plan to provide equity and equity-based awards as long-term incentive compensation to our executive officers and key employees. We use equity awards to: • attract and retain key officers and employees; • motivate our officers and employees by means of performance-related incentives to achieve long-range performance goals; • enable our officers and employees to participate in our long-term growth; and • link our officers’ and employees’ compensation to the long-term interests of our stockholders. Subject to the terms of the 2019 Long-Term Incentive Plan, the Compensation Committee determines the persons to receive equity and equity-based awards. At the time of each award, the Compensation Committee determines the terms of the award, including any performance period (or periods) and any performance objectives relating to the award, subject to the terms and conditions set forth in the 2019 Long-Term Incentive Plan. Grant Practices for Executive Officers. Annual equity awards to executive officers are typically granted during the first quarter of the year and typically vest over four years. In March 2023, the Compensation Committee granted restricted stock awards to our NEOs. In determining the amounts of such awards, the Compensation Committee considered competitive long-term incentive amounts, the desired pay mix to balance annual outcomes and a longer-term perspective, each NEO’s individual performance in 2022, as well as the company’s performance against its peers that year, and the achievements of certain strategic and operational goals for the year. These restricted stock awards will become vested as to 25% of the shares underlying the award on the first anniversary of the grant date, with the remaining shares vesting in quarterly installments over the next three years. Restricted stock and restricted stock units. Generally, BDCs such as us may not grant shares of their stock for services without an exemptive order from the SEC. On May 27, 2021, we received such exemptive relief from the SEC, thus allowing us — via the Compensation Committee, subject to the discretion of the Board — to grant awards of restricted stock, incentive stock options and non-statutory stock options (together with incentive stock options, “Options”) to certain of the Company’s executive officers, employee directors and other employees (collectively, the “Employee Participants”) under the 2019 Long-Term Incentive Plan, subject to the terms and conditions of the SEC Exemptive Order and such equity incentive plan. The 2019 Long-Term Incentive Plan was approved by our Board on October 17, 2019, and by our stockholders on June 17, 2021 at our 2021 Annual Meeting of Stockholders. The 2019 Long-Term Incentive Plan became effective on June 17, 2021. Our 2019 Long-Term Incentive Plan provides a means through which we may attract and retain qualified employees to enter into and remain in service to the Company. Each grant of restricted stock allows for a fixed number of shares as set forth in an award agreement between the grantee and us. The Compensation Committee approved annual equity awards for each of our NEOs in March 2023 that reflect an equal dollar value to the equity awards granted in March 2022. Award agreements set forth time and/or performance vesting schedules and other appropriate terms and/or restrictions with respect to awards, including rights to distributions and voting rights. While the 2019 Long Term Incentive Plan contemplates grants of restricted stock, restricted stock units, Options, dividend equivalent rights, performance awards and other stock-based awards to the Employee Participants, the Company only sought and received exemptive relief from the SEC pursuant to the SEC Exemptive Order to grant awards of restricted stock and Options. As a result, the Company will only grant awards of such securities under the 2019 Long Term Incentive Plan. The Employee Participants will have the right to receive dividends on such awarded restricted stock, unless and until the restricted stock is forfeited. During the year ended December 31, 2023, the Company granted 607,200 shares, net of 205,327 retired shares, of restricted stock of the 3.6 million authorized under the 2019 Long Term Incentive Plan. The Company determined that the fair value of such restricted stock granted during the year ended December 31, 2023 was approximately $10.5 million and recognized total share-based compensation expense of $8.6 million for the year. As of December 31, 2023, there was approximately $17.1 million of total unrecognized compensation costs related to non-vested restricted stock awards. These costs are expected to be recognized over a weighted average period of 2.5 years. The 2019 Long-Term Incentive Plan will terminate on the day prior to the tenth anniversary of the date it was approved by the Board, unless terminated sooner by action of the Board or the Compensation Committee, as applicable.

  16. Competitive Market Review

    Competitive Market Review We consider competitive market practices with respect to the salaries and total compensation of our NEOs. We review the market practices of similar companies by speaking to other financial professionals and reviewing annual reports on Form 10-K, proxy statements or similar information of other internally managed BDCs. As discussed under “Compensation Committee”, the Compensation Committee has engaged Mercer, an independent third-party compensation consultant, to perform certain services related to our executive officer compensation, including but not limited to development and annual review of a compensation peer group, annual benchmarking of executive officer compensation, and other compensation-related governance matters. In determining 2023 NEO compensation, the Compensation Committee considered Mercer’s executive benchmarking report, which compared our executive officer compensation to that of the comparator peer group approved by the Compensation Committee, which is made up of internally managed BDCs, internally managed real estate investment trusts, and broader financial services organizations of comparable size to the Company. Selection criteria for comparator peer group companies included publicly traded status, geography, industry, size, organizational structure and disclosure of compensation data. The comparator peer group is believed to reflect the labor market for our executive officers and has a similar investor base.

  17. Severance

    Severance Upon certain terminations of employment, the NEO Agreements provide that the certain NEOs may receive severance payments and equity and equity-based awards under our 2019 Long-Term Incentive Plan may vest and/or become immediately exercisable or salable as described herein. 2019 Long-Term Incentive Plan. Under the 2019 Long-Term Incentive Plan, upon specified covered transactions involving a change in control (as defined in the 2019 Long-Term Incentive Plan), all outstanding awards under the 2019 Long-Term Incentive Plan will be subject to accelerated vesting in full and then terminated to the extent not exercised within a designated time period. Severance. The following discussion regarding severance payments applies only to certain NEOs with whom we have entered into NEO Agreements. See the section below entitled “NEO Agreements” for more information regarding severance payments. The rationale behind providing severance packages under certain circumstances described below is to attract and retain talented executives and assure them that they will not be financially disadvantaged if they relocate and/or leave another job to join us, but are not retained following a transaction and to ensure that our business is operated and governed for our stockholders by a management team, and under the direction of a board of directors, who are not financially motivated to frustrate the consummation of such a transaction. For more discussion regarding executive compensation in the event of a termination or change in control, please see the table entitled “2023 Potential Payments Upon Termination of Employment Table.”

  18. NEO Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($)(1)(2)(3)(4) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified deferred compensation earnings ($) | All Other Compensation ($)(5)(6) | Total ($) | | Steven L. Brown | 2023 | 750,000 | 1,587,800 | 2,822,541 | | | | 13,200 | 5,173,541 | | Chairman and | 2022 | 750,000 | 1,483,450 | 3,799,997 | | | | — | 6,033,447 | | Chief Executive Officer | 2021 | 666,250 | 1,001,250 | 3,374,989 | — | — | — | — | 5,042,489 | | Kyle Brown | 2023 | 650,000 | 1,343,400 | 2,673,982 | | | | 13,200 | 4,680,582 | | Director, President and | 2022 | 650,000 | 1,255,350 | 3,599,992 | | | | 20,500 | 5,525,842 | | Chief Investment Officer | 2021 | 563,750 | 768,750 | 3,374,989 | — | — | — | — | 4,707,489 | | Gerald Harder | 2023 | 500,000 | 792,800 | 742,769 | | | | 13,200 | 2,048,769 | | Chief Operating Officer(7) | 2022 | 500,000 | 732,200 | 999,992 | | | | 27,000 | 2,259,192 | | | 2021 | 461,250 | 397,500 | 749,988 | — | — | — | — | 1,608,738 |

  19. NEO Outstanding Equity Awards at Fiscal Year-End

    NEO Outstanding Equity Awards at Fiscal Year-End

  20. NEO Outstanding Equity Awards at Fiscal Year-End

    | Name | Option Awards | | | | | Stock Awards | | | | | | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: Number of securities underlying unexercised, unearned options (#) | Option Exercise Price ($) | Option Expiration Date | Number of shares or units of stock that have not vested (#) | Market value of shares of units of stock that have not vested ($) | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)(1) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) | | Steven L. Brown | — | — | — | — | — | 394,407 | 5,730,734 | — | — | | Kyle Brown | — | — | — | — | — | 376,343 | 5,468,264 | — | — | | Gerald Harder | — | — | — | — | — | 101,696 | 1,477,643 | — | — |

  21. NEO Outstanding Equity Awards at Fiscal Year-End

    (1) Market value of shares of units of stock that have not vested as of December 31, 2023 valued at the closing stock price on December 29, 2023 (the last trading day prior to the Company’s fiscal year end) of $14.53.

  22. 2023 Potential Payments upon Termination of Employment Table

    2023 Potential Payments upon Termination of Employment Table

  23. 2023 Potential Payments upon Termination of Employment Table

    | Name | Benefit | Death(3) | Disability(3) | Termination Without Cause or Good Reason(3) | Within One Year After Change in Control; Termination Without Cause or Good Reason(3) | | Steven L. Brown | Severance(1) | $1,444,167 | $1,444,167 | $1,444,167 | $1,444,167 | | | Bonus(2) | 1,885,000 | 1,885,000 | 1,885,000 | 1,855,000 | | | Equity Award Acceleration(3) | 5,749,707 | 5,749,707 | 5,749,707 | 5,749,707 | | Kyle Brown | Severance(1) | 1,242,500 | 1,242,500 | 1,242,500 | 1,242,500 | | | Bonus(2) | 1,595,000 | 1,595,000 | 1,595,000 | 1,595,000 | | | Equity Award Acceleration(3) | 5,495,059 | 5,495,059 | 5,495,059 | 5,495,059 | | Gerald Harder | Severance(1) | 487,083 | 487,083 | 487,083 | 487,083 | | | Bonus(2) | 470,833 | 470,833 | 470,833 | 470,833 | | | Equity Award Acceleration(3) | 1,490,291 | 1,490,291 | 1,490,291 | 1,490,291 |

  24. 2023 Potential Payments upon Termination of Employment Table

    ____________ (1) Severance pay includes an employee’s annual base salary (as averaged over three years or employee’s most recent annual base salary if less than three years) and applicable multiple thereof paid in lump sum. (2) Bonus compensation includes an employee’s annual bonus (as averaged over last three years or employee’s most recent annual bonus if less than three years) and applicable multiple thereof plus an employee’s pro rata annual bonus for the year of termination paid lump sum. (3) Upon these termination events, the employee will also become fully vested in any previously unvested equity or equity-based compensation and receive company paid employer contributions towards COBRA continuation coverage for a period of time, paid in lump sum.

  25. Equity Compensation Plan Information

    | Plan Category | Number of shares subject to outstanding equity awards(1) (a) | Dollar value of shares subject to outstanding equity awards ($)(2) (c) | Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column (a)) (d) | | Equity compensation plans approved by security holders: | | | | | 2019 Trinity Capital Inc. Long-Term Incentive Plan | 1,792,149 | $26,308,747 | 742,076 | | Trinity Capital Inc. 2019 Non-Employee Director Restricted Stock Plan | 15,196 | $223,077 | 13,352 | | Equity compensation plans not approved by security holders | — | — | — |

  26. Equity Compensation Plan Information

    | Plan Category | Number of shares subject to outstanding equity awards(1) (a) | Dollar value of shares subject to outstanding equity awards ($)(2) (c) | Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column (a)) (d) | | Equity compensation plans approved by security holders: | | | | | 2019 Trinity Capital Inc. Long-Term Incentive Plan | 1,792,149 | $26,308,747 | 742,076 | | Trinity Capital Inc. 2019 Non-Employee Director Restricted Stock Plan | 15,196 | $223,077 | 13,352 | | Equity compensation plans not approved by security holders | — | — | — |