PROPOSAL 1: ELECTION OF DIRECTORS
The Board currently consists of eight Directors, six of whom are not “interested persons” (as that term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”)) of the Company. At a meeting of the Board held on April 24, 2023, the Board approved a reduction of the number of Directors from eight Directors to six Directors, effective at the adjournment of the 2023 Annual Meeting. Mr. Ginsberg’s term as a Class I Director will expire upon the adjournment of the 2023 Annual Meeting and Mr. Arnold, a Class III Director, has tendered his resignation as a Director of the Board effective immediately upon the adjournment of the 2023 Annual Meeting in order to implement this change. Upon the election of Mr. Henry and Ms. Reidy as Class I Directors, the Board will consist of six Directors, four of whom are not interested persons of the Company.
The Directors are divided into three classes and are elected for staggered terms of three years each, with a term of office of each class of Directors expiring at the third annual meeting of stockholders after the election of such class of Directors. Each Director will hold office for the term to which he or she is elected and until a successor is duly elected and qualified. Each of Emil W. Henry, Jr. and Karen L. Reidy currently serves as an Independent Director and Interested Director, respectively, and has been nominated to serve as a Class I Director for a three-year term to expire at the Company’s 2026 Annual Meeting of Stockholders.
Each nominee has indicated an intention to continue to serve if elected and has also consented to being named in this Proxy Statement.
The classes of Directors are indicated below:
Nominees Serving Until 2026 Annual Meeting of Stockholders (Class I)
Emil W. Henry, Jr.
Karen L. Reidy
Director Serving Until 2023 Annual Meeting of Stockholders (Class I)
Alan Ginsberg*
Directors Serving Until 2024 Annual Meeting of Directors (Class II)
Michael Stolper
Michael P. Van Praag
Directors Serving Until 2025 Annual Meeting of Directors (Class III)
Guy M. Arnold**
Sanjai Bhonsle
John Scott Emrich
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
THE ELECTION OF THE NOMINEES NAMED IN THIS PROXY STATEMENT.
factor, being indicative of Board effectiveness. However, the Board believes that Directors need to have the ability to critically review, evaluate, question and discuss information provided to them, and to interact effectively with the Adviser, other Company management, service providers, counsel and independent auditors, in order to exercise effective business judgment in the performance of their duties. Experience relevant to having this ability may be achieved through a Director’s educational background; business, professional training or practice (e.g., accounting, finance or law); public service or academic positions; experience from service as a board member or as an executive of investment funds, public companies or significant private or not-for-profit entities or other organizations; and/or other life experiences. To assist them in evaluating certain legal matters, the Independent Directors are counseled by their own independent legal counsel and also may benefit from information provided by the Company’s counsel; both counsel to the Independent Directors and the Company have significant experience advising investment companies and Company Board members. The Board and its committees have the ability to engage other experts as appropriate. The Board evaluates its performance on an annual basis.
Independent Directors
• Guy M. Arnold. Mr. Arnold has extensive leadership experience in the financial services industry, having held leadership positions at various investment management firms for over 20 years. While President of Dividend Capital Diversified Property Fund, Mr. Arnold oversaw all aspects of a $2.9 billion real estate investment trust. He is currently the co-COO of Hunt Companies, Inc. Mr. Arnold also served as a member of the Board of Directors for Steele Street Bank & Trust and is a member of the Board of Directors of the Children’s Hospital of Colorado Finance Committee. Mr. Arnold received his Bachelor of Arts degree from the University of Virginia and has been working in the financial services industry since his graduation in 1990. Mr. Arnold has tendered his resignation as a Director of the Board effective immediately upon the adjournment of the 2023 Annual Meeting.
• John Scott Emrich. Mr. Emrich has significant experience in the investment management and financial services industry. Mr. Emrich served as a financial analyst or portfolio manager for over 13 years for various investment advisory firms. Prior to such positions he also performed business valuations and appraisal analyses at KPMG Peat Marwick, an independent registered public accounting firm.
• Alan Ginsberg. Mr. Ginsberg has nearly 40 years of experience in providing financial advisory services to financial institutions. Mr. Ginsberg began his investment banking career at Salomon Brothers Inc in 1983, followed by being a key member of a group that moved to UBS Financial Services Inc. in 1995 and to Donaldson, Lufkin & Jenrette in 1998. He remained at DLJ through the merger with Credit Suisse First Boston until 2004, when he was recruited to head HSBC Bank USA’s Financial Institutions Group Americas, remaining there until mid-2006. Following HSBC, Mr. Ginsberg was a senior member of the Bank of America Securities Financial Institutions Group. From 2017 to 2021, Mr. Ginsberg served as managing Director and Co-Head of Barclays’ Banks and Specialty Finance Group. Currently, Mr. Ginsberg is a strategic adviser to numerous public and private companies and has advised on more than 75 strategic transactions and advisory assignments during his career. Mr. Ginsberg also served as a Senior Advisor to StoneCastle Partners from 2010 to 2013. Mr. Ginsberg received his Bachelor of Arts degree in Economics from Yale University. Mr. Ginsberg’s three-year term will expire at the 2023 Annual Meeting.
• Emil W. Henry, Jr. Mr. Henry is the Founder, CEO and Managing Partner of Tiger Infrastructure Partners, a private equity firm focused on infrastructure investment opportunities. Prior to founding Tiger Infrastructure Partners, he was Global Head of the Lehman Brothers Private Equity Infrastructure businesses, where he oversaw global infrastructure investments. In 2005, Mr. Henry was appointed Assistant Secretary of the Treasury for Financial Institutions by the President of the United States. Until his departure in 2007, he was a key advisor to two Treasury Secretaries on economic, legislative and regulatory matters affecting U.S. financial institutions and markets. Before joining the Treasury, Mr. Henry was a partner of Gleacher Partners LLC, an investment banking and investment management firm, where he served as Chairman of Asset Management, and Managing Director, and where he oversaw the firm’s investment activities. Mr. Henry began the formative part of his career at Morgan Stanley in the mid-1980s in that firm’s merchant banking arm where he executed management buyouts for Morgan Stanley’s flagship private equity fund. He holds a Master of Business Administration degree from Harvard Business School and a Bachelor of Arts degree in Economics from Yale University.
• Michael Stolper. Mr. Stolper provides broad financial advisory and brokerage business experience serving as the President of Stolper & Co., Inc., an investment adviser for over 35 years. Based upon his years of experience, he possesses a keen understanding of the securities industry and the regulatory framework applicable to it, including the Company. He holds a Master of Arts degree in Finance.
• Michael P. Van Praag. Mr. Van Praag has an extensive background in the financial industry as a JPMorgan Chase executive with over 35 years of experience in banking, commercial lending, cash management, treasury services and capital markets. Based upon his depth of experience, Mr. Van Praag possesses a keen understanding of the securities industry and banking-related activity that is of direct relevance to the Company’s investment strategy. He also holds a Master of Business Administration degree in Banking and Finance.
Interested Directors
• Sanjai S. Bhonsle. Chairman and Chief Executive Officer. Mr. Bhonsle joined ArrowMark Partners, an affiliate of the Adviser, in October 2012 and serves as Partner and Portfolio Manager for ArrowMark Partners’ leveraged loan investments and collateralized loan obligation funds. Prior to joining ArrowMark Partners, he founded MB Consulting Partners in 2009, where he specialized in providing financial and operational restructuring advisory services to stressed and distressed middle-market companies. With more than 10 years of restructuring experience, he has led several assignments across various industries. Mr. Bhonsle was a Senior Portfolio Manager at GSO Capital Partners, a subsidiary of The Blackstone Group, and member of the Investment and Management Committee (2005 until 2009). Prior to joining GSO Capital Partners, Mr. Bhonsle was an Assistant Portfolio Manager for RBC Capital Partners’ debt investment group and was a member of the Investment Committee (2001 until 2005). He also led the group’s restructuring efforts related to distressed investments and represented the firm’s interests on creditor committees. From 1999 to 2001, Mr. Bhonsle was a Senior Investment Analyst at Indosuez Capital Partners. Mr. Bhonsle received a Bachelor of Science degree in Mechanical Engineering from the University of Wisconsin — Madison and a Master of Business Administration degree from the Eli Broad Graduate School of Management at Michigan State University.
• Karen L. Reidy. Director. Ms. Reidy is a founding partner of ArrowMark Partners and co-manages ArrowMark Partners’ collateralized loan obligation and specialty finance investments and research analyst teams. Prior to founding ArrowMark Partners, Ms. Reidy served as Executive Vice President and Portfolio Manager at Janus Capital, managing $10 billion for two strategies: Janus Balanced Fund and Janus Core Equity Fund, as well as institutional separate accounts (2000-2005). Ms. Reidy was also the Assistant Portfolio Manager of the Janus Fund (1998-2000). She joined Janus Capital as an equity analyst in 1995. Prior to joining Janus Capital, she worked at PricewaterhouseCoopers LLC, an independent registered public accounting firm, in the audit and mergers and acquisitions departments. Ms. Reidy graduated from the University of Colorado with a Bachelor of Science degree in Business Administration-Accounting and holds the Chartered Financial Analyst designation.
Board Composition and Leadership Structure
The 1940 Act requires that at least 40% of the Directors be Independent Directors. Additionally, reliance on certain exemptive rules under the 1940 Act requires that a majority of the Directors be Independent Directors in order to rely on such rules. Currently, six of the eight Directors are Independent Directors. The Independent Directors exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Director happens to be independent or a member of management. The Board has determined that its leadership structure, in which the Chairman of the Board is an interested person of the Company, is appropriate because the Independent Directors believe that an interested Chairman has a personal and professional stake in the quality and continuity of services provided by management to the Company. The Independent Directors have determined that they can act independently and effectively without having an Independent Director serve as Chairman and that a key factor for assuring that they are in a position to do so is for the Directors who are independent of management to constitute a majority of the Board. Emil W. Henry, Jr. is the lead Independent Director of the Company.
Audit Committee Report
The Audit Committee oversees the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal control over financial reporting. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited financial statements in the Company’s Annual Report for the fiscal year ended December 31, 2022.
The Audit Committee reviewed with the Independent Auditor, which is responsible for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles, its judgments as to the quality, not just the acceptability, of the Company’s accounting principles and such other matters as are required to be discussed with the committee under the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and the SEC. In addition, the Audit Committee has discussed with the Independent Auditor the Independent Auditor’s independence from management and the Company, including the Independent Auditor’s letter and the matters in the written disclosures required by the PCAOB provided to the Audit Committee.
The members of the Audit Committee are not, and do not represent themselves to be, professionally engaged in the practice of auditing or accounting and are not employed by the Company for accounting, financial management, or internal control purposes. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and/or financial reporting principles and policies, or internal controls and procedures, designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions referred to above do not guarantee that the audit of the Company’s financial statements has been carried out in accordance with the standards of the PCAOB or that the financial statements are presented in accordance with generally accepted accounting principles (United States).
Based on its consideration of the audited financial statements and the discussions referred to above with management and the Independent Auditor, and subject to the limitations on the responsibilities and role of the Audit Committee set forth in the Audit Committee Charter and those discussed above, the Audit Committee recommended to the Company’s Board that the Company’s audited financial statements be included in the Company’s Annual Report for the fiscal year ended December 31, 2022.
This report was submitted by the Audit Committee of the Company’s Board
John Scott Emrich, Chairman of the Audit Committee
Alan Ginsberg
Michael Van Praag
March 7, 2023
Other Board-Related Matters
The Board has a Nominating and Governance Committee comprised of three of the Company’s Independent Directors. During the fiscal year ended December 31, 2022, the Nominating Committee held one meeting on March 1, 2022. The functions of the Nominating Committee are to (i) identify individuals qualified to become directors of the Company in the event that a position is vacated or created; (ii) select, or to recommend that the Board select, the director nominees for each annual meeting of Stockholders of the Company; (iii) set any necessary standards or qualifications for service as a director of the Company; (iv) make recommendations concerning the continuing education of the directors on matters relating to their activities as directors; (v) oversee periodic self-assessments of the directors; (vi) periodically review and make recommendations regarding Independent Director compensation; (vii) periodically liaise with the Company’s Chief Compliance Officer; (viii) oversee the contract review process, including the review of the Company’s investment advisory agreement and contracts with any affiliated service providers; and (ix) undertake such matters from time to time relating to Board nominations or governance of the Company as the Nominating Committee shall deem appropriate. In addition, the Nominating Committee will consider corporate governance issues that arise from time to time and develop appropriate recommendations for the Board, giving appropriate weight to relevant factors including “industry-leading practices.” The Nominating Committee will review and report to the Board regarding any actual or potential conflicts of interest involving any director and
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determine whether such director may vote on any issue as to which there may be a conflict. In addition, the Nominating Committee will review all related-party transactions and determine whether such transactions are appropriate for the Company to undertake. In selecting candidates for nomination by the Board, the Nominating Committee follows the process outlined in its charter, and may accept director nominations made by Company stockholders on the same basis as it considers and evaluates nominees recommended by other sources.
The Nominating Committee may accept nominations for the office of Director made by Company stockholders on the same basis as it considers and evaluates nominees recommended by other sources. In identifying and evaluating Director nominees, the Nominating Committee considers factors including: (i) whether or not the individual is an “interested person” as defined in the 1940 Act and whether the person is otherwise qualified under applicable laws and regulations to serve as a Director or Independent Director of the Company; (ii) whether or not the individual has any relationships that might impair his or her independence, such as any business, financial or family relationships with Company management, the Adviser, Company service providers or their affiliates; (iii) whether or not the individual serves on boards of, or is otherwise affiliated with, competing financial service organizations or their related mutual fund complexes; (iv) whether or not the individual is willing to serve, and willing and able to commit the time necessary for the performance of the duties of a Director of the Company; (v) the contribution the individual can make to the Board and the Company, with consideration being given to the individual’s educational background and business and professional experience; (vi) the character and integrity of the individual; (vii) the overall diversity of the Board’s composition; and (vii) all applicable laws, rules, regulations, and listing standards. The Nominating Committee may, but is not required to, retain a third-party search firm at the Company’s expense to assist in the identification of Independent Director nominees. Other than the foregoing, there are no stated minimum criteria for Director nominees, although the Nominating Committee may also consider such other factors as its members deem to be in the best interests of the Company and its stockholders. The Board has not adopted a mandatory retirement policy. The Board may remove or replace any member of the Nominating Committee at any time in its sole discretion.
Stockholders who wish to send communications to the Board should send them to the Secretary of the Company at 100 Fillmore Street, Suite 325, Denver, CO 80206. All such communications will be directed to the Board’s attention.
The Company does not have a formal policy regarding Director attendance at the annual meetings of stockholders. Each Director of the Company (as of December 31, 2022) attended at least 75% of the meetings of the Board and of any Committee of which he or she was a member.
Required Vote
The election of Mr. Henry and Ms. Reidy as Class I Directors requires the affirmative vote of a plurality of the votes cast by the holders of the outstanding shares of Common Stock present and entitled to vote.
* * *
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SUBMISSION OF STOCKHOLDER PROPOSALS FOR
THE 2024 ANNUAL MEETING OF STOCKHOLDERS
All proposals by stockholders of the Company that are intended to be presented at the Company’s next annual meeting of stockholders to be held in 2024 must be received by the Company for consideration for inclusion in the Company’s proxy statement relating to the meeting no later than 5:00 p.m. E.T., on January 6, 2024 and must satisfy the requirements of the federal securities laws including Rule 14a-8 under the 1934 Act.
Stockholders who do not wish to submit a proposal for inclusion in the Company’s proxy statement and proxy card for the 2024 annual meeting of stockholders in accordance with Rule 14a-8 under the 1934 Act may submit a proposal for consideration at the 2024 annual meeting of stockholders in accordance with the By-laws of the Company. The Company’s By-laws currently require stockholders wishing to nominate Directors or propose other business to be brought before the Company’s 2024 annual meeting of stockholders to provide timely notice of the proposal in writing to the Secretary of the Company and, in the case of such other business, such other business must otherwise be a proper matter for action by the stockholders. To be considered timely, any such notice must be delivered to the principal executive officer of ArrowMark Financial Corp. at 100 Fillmore Street, Suite 325, Denver, CO 80206 not earlier than February 17, 2024, nor later than 5:00 p.m., E.T., on March 18, 2024. If such proposals are not “timely,” then proxies solicited by the Board for next year’s annual meeting may confer discretionary authority to such proxies to vote on such proposals at their discretion. Any such notice by a stockholder must set forth all information required by the Company’s By-laws with respect to each nominee or other matter the stockholder proposes to bring before an annual meeting.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Tait, Weller & Baker LLP (“Tait Weller”) has been selected to serve as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2023. The Company knows of no direct financial or material indirect financial interest of Tait Weller in the Company. A representative of Tait Weller will not be present at the 2023 Annual Meeting, but will be available by telephone to respond to appropriate questions and will have an opportunity to make a statement, if the representative desires.
Set forth in the table below are audit fees and tax fees billed to the Company by Tait Weller for professional services provided to the Company as the independent registered accounting firm for the fiscal years ended December 31, 2021 and 2022, respectively.
|
|
Audit Fees
|
|
Audit-Related Fees
|
|
Tax Fees*
|
|
All Other Fees**
|
2021
|
|
$
|
45,000
|
|
$
|
0
|
|
$
|
3,000
|
|
$
|
0
|
2022
|
|
$
|
45,000
|
|
$
|
0
|
|
$
|
3,000
|
|
$
|
0
|
The Company’s Audit Committee Charter requires that the Audit Committee pre-approve all audit and non-audit services to be provided by Tait Weller to the Company, and all non-audit services to be provided by Tait Weller to the Company’s Adviser and any entity controlling, controlled by or under common control with the Company’s Adviser (“Affiliates”) that provides on-going services to the Company, if the engagement relates directly to the operations and financial reporting of the Company. Alternatively, the Audit Committee also may delegate pre-approval to one of its members subject to subsequent reporting to the Audit Committee. All of the audit and non-audit services described above for which Tait Weller billed the Company fees for the fiscal year ended December 31, 2022 were pre-approved by the Audit Committee as required.
Except for the Tax Fees disclosed above, there were no non-audit fees billed by Tait Weller for services rendered to the Company and rendered to the Adviser or its affiliates that provide ongoing services to the Company for the fiscal year ended December 31, 2022.
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ADDITIONAL INFORMATION
Investment Adviser and Administrator
ArrowMark Asset Management LLC serves as the Company’s investment adviser. The principal executive office of the Adviser is 100 Fillmore Street, Suite 325, Denver, CO 80206. The Adviser is a Delaware limited liability company and is an investment adviser registered under the Investment Advisers Act of 1940, as amended.
The Bank of New York Mellon, located at 4400 Computer Drive, Westborough, Massachusetts 01581, serves as administrator to the Company.
The Bank of New York Mellon, located at 240 Greenwich St., New York, New York 10286, serves as custodian to the Company.
Delinquent Section 16(a) Reports
Section 16(a) of the 1934 Act and Section 30(h) of the 1940 Act, and the rules thereunder, require the Company’s Directors and executive officers, certain persons affiliated with the Company and persons who beneficially own more than 10% of a registered class of the Company’s securities to file reports of ownership and changes of ownership with the SEC, NASDAQ and the Company. To the Company’s knowledge, based solely on review of the copies of such reports filed electronically with the SEC during the Company’s fiscal year ended December 31, 2022, all Section 16(a) filing requirements applicable to such reporting persons were complied with, except that (i) on August 8, 2022 a late Form 4 was filed for Sanjai Bhonsle with respect to his acquisition of shares of the Company on November 19, 2021, May 27, 2022 and June 13, 2022; (ii) on August 16, 2022 a late Form 4 was filed for Patrick Farrell with respect to his acquisition of shares of the Company on August 10, 2022; and (iii) on December 8, 2022 a late Form 4 was filed for Dana Staggs with respect to his acquisition of shares of the Company on November 16, 2022 and November 17, 2022.
Broker Non-Vote and Abstentions
Shares represented by properly executed proxies with respect to which a vote is withheld, or for which a broker does not vote, will be treated as Shares that are present and entitled to vote for purposes of determining a Quorum, but will not constitute a vote “FOR” a proposal and will have the effect of a vote against the election of the nominee named in this Proxy Statement.
Information About Attending the Meeting
Virtual attendance at the 2023 Annual Meeting is limited to stockholders (or their authorized representatives) as of the Record Date. All attendees should pre-register.
If you would like to attend the 2023 Annual Meeting, please follow the instructions below to pre-register by June 9, 2023.
Pre-Registration Instructions
If you are a registered stockholder (your shares are held in your name), you may pre-register by contacting us and providing your name as it appears on your stock ownership records and your mailing address.
If you are a beneficial owner (your shares are held through a broker or bank) you may pre-register by contacting us and providing your name and mailing address, and evidence of your stock ownership as of the Record Date. A copy of your brokerage or bank statement will suffice as evidence of ownership, or you can obtain a letter from your broker or bank.
If you are a stockholder as of the Record Date and intend to appoint an authorized representative to attend the 2023 Annual Meeting on your behalf, you may pre-register by submitting a request to us and providing: your name and mailing address, the name and mailing address of your authorized representative, evidence of stock ownership as of the Record Date, and a signed authorization appointing such individual to be your authorized representative at the 2023 Annual Meeting.
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To pre-register for the 2023 Annual Meeting, you can write to us at ArrowMark Financial Corp., Attn.: Investor Relations, 100 Fillmore Street, Suite 325, Denver, CO 80206, email us at BANX@destracapital.com or call us at 877-855-3434. You may also use this Investor Relations phone number for technical assistance if you experience “day of” problems logging on, hearing, or being heard, at the 2023 Annual Meeting.
OTHER MATTERS TO COME BEFORE THE 2023 ANNUAL MEETING
The Company does not intend to present any other business at the 2023 Annual Meeting, nor is the Company aware that any stockholder is entitled to do so. If, however, any other matters are properly brought before the 2023 Annual Meeting, the persons named in the accompanying proxy card will vote thereon in accordance with their discretion.
VOTING RESULTS
The Company will advise its stockholders of the voting results of the matters voted upon at the 2023 Annual Meeting in its next semi-annual report to stockholders.
NOTICE TO BANKS, BROKER/DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES
Please advise the Company whether other persons are the beneficial owners of shares of Common Stock for which proxies are being solicited from you, and, if so, the number of copies of the proxy statement and other soliciting material you wish to receive in order to supply copies to the beneficial owners of shares of Common Stock.
This Proxy Statement has been prepared for stockholders of the Company. The Company will mail one Proxy Statement to each stockholder address upon request. If you would like to obtain an additional paper copy of the Proxy Statement, please contact Broadridge at 1-800-579-1639 or write to ArrowMark Financial Corp. at 100 Fillmore St., Suite 325, Denver, CO 80206.
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DELIVERY OF PROXY MATERIALS
Please note that only one annual or semi-annual report or Proxy Statement or Notice of Internet Availability of Proxy Materials may be delivered to two or more stockholders of the Company who share an address, unless the Company has received instructions to the contrary. To request a separate copy of an annual report or semi-annual report or this Proxy Statement or Notice of Internet Availability of Proxy Materials, or for instructions on how to request a separate copy of these documents or for instructions on how to request a single copy if multiple copies of these documents are received, stockholders should contact the Company at 877-855-3434 or write to ArrowMark Financial Corp. at 100 Fillmore Street, Suite 325, Denver, CO 80206.
IT IS IMPORTANT THAT YOUR PROXY CARD BE COMPLETED PROMPTLY. EVEN IF YOU EXPECT TO VIRTUALLY ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO COMPLETE, SIGN AND DATE THE PROXY CARD AS SOON AS POSSIBLE.
By Order of the Board of Directors
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|
BLAKE RICE Secretary of the Company
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May 5, 2023
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Appendix A
ARROWMARK FINANCIAL CORP.
NOMINATING AND GOVERNANCE COMMITTEE CHARTER
ORGANIZATION AND GOVERNANCE
The Nominating and Governance Committee (the “Committee”) of ArrowMark Financial Corp. (the “Company”) shall be comprised solely of Directors who are not “interested persons” of the Company as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Directors”). Each member must also meet the independence and experience requirements of the NASDAQ Global Market, and Section 10A of the Securities Exchange Act of 1934, as amended (the “Exchange Act’), and Rule 10A-3 thereunder, and other applicable rules and regulations of the Securities and Exchange Commission (“SEC”).
The Committee shall be comprised of as many Independent Directors as the Board of Directors of the Company (the “Board”) shall determine, but in any event not fewer than three (3) members, each of whom shall serve at the pleasure of the Board. The Board may remove or replace any member of the Committee at any time in its sole discretion. The Board shall nominate the members of the Committee and shall designate the chairman and co-chairman of the Committee. The chairman or, in her absence, another member of the Committee, shall preside at each meeting of the Committee.
STATEMENT OF PURPOSES AND RESPONSIBILITIES
The Committee shall select and nominate persons for election as Directors of the Company as well as oversee the Company’s governance. The primary purposes and responsibilities of the Committee are (i) to identify individuals qualified to become Directors of the Company in the event that a position is vacated or created; (ii) to select, or to recommend that the Board select, the Director nominees for each annual meeting of the stockholders; (iii) to set any necessary standards or qualifications for service as a Director of the Company; (iv) to make recommendations concerning the continuing education of the Directors on matters relating to their activities as Directors; (v) to oversee the periodic Director self-assessment; (vi) to periodically review and make recommendations regarding Independent Director compensation; (vii) to undertake such matters from time to time relating to Board nominations or governance of the Company as the Committee shall deem appropriate; (viii) to periodically liaise with the Company’s Chief Compliance Officer and (ix) to oversee the contract review process, including the review of the Company’s investment advisory agreement and contracts with any affiliated service providers.
IDENTIFICATION AND EVALUATION OF POTENTIAL NOMINEES
The Committee may take into account a wide variety of factors in considering Director nominees. In identifying and evaluating an individual as a potential nominee to serve as a Director, or in evaluating whether to remove an incumbent Director, the Committee shall consider among other factors it may deem relevant:
• whether or not the individual is an “interested person” as defined in the 1940 Act and whether the person is otherwise qualified under applicable laws and regulations to serve as a Director or Independent Director of the Company;
• whether or not the individual has any relationships that might impair his or her independence, such as any business, financial or family relationships with Company management, the investment manager of the Company, Company service providers or their affiliates;
• whether or not the individual serves on boards of, or is otherwise affiliated with, competing financial service organizations or their related mutual fund complexes;
• whether or not the individual is willing to serve, and willing and able to commit the time necessary for the performance of the duties of a Director of the Company;
• the contribution the individual can make to the Board and the Company, with consideration being given to the individual’s educational background and business and professional experience;
• the character and integrity of the individual;
• the overall diversity of the Board’s composition; and
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• the Committee may, but is not required to, retain a third-party search firm at the Company’s expense to assist in the identification of Independent Director nominees.
Following an initial evaluation by the Committee, a nominee must:
• be prepared to submit written answers to a questionnaire seeking professional and personal information that will assist the Committee to evaluate the candidate and to determine, among other matters, whether the candidate would be an Independent Director under the 1940 Act or otherwise have material relationships with key service providers to the Company;
• be prepared to submit character references and agree to appropriate background checks; and
• be prepared to meet with one or more members of the Committee at a time and location convenient to those Committee members in order to discuss the nominee’s qualifications.
CONSIDERATION OF NOMINEES RECOMMENDED BY STOCKHOLDERS
The Committee may accept nominations for the office of Director made by Company stockholders on the same basis as it considers and evaluates nominees recommended by other sources. Stockholders who wish to recommend a nominee to the Committee should send nominations to the Secretary of the Company which include biographical information and set forth the qualifications of the proposed nominee.
NOMINATION OF DIRECTORS
After a determination by the Committee that an individual should be selected and nominated as a Director of the Company, the Committee shall present its recommendation to the full Board for its consideration.
GOVERNANCE MATTERS
Committee shall consider any corporate governance issues that arise from time to time, and develop appropriate recommendations for the Board, giving appropriate weight to relevant factors including “industry leading practices.” The Committee shall review and report to the Board regarding any actual or potential conflicts of interest involving any Director and shall determine whether such Director may vote on any issue as to which there may be a conflict. In addition, the Committee shall review all related-party transactions and determine whether such transactions are appropriate for the Company to undertake.
QUORUM
A majority of the members of the Committee shall constitute a quorum, and the act of a majority of the members of the Committee present at any meeting at which there is quorum present shall be the act of the Committee.
MEETINGS
The Committee may meet either on its own or in conjunction with meetings of the Board. Meetings of the Committee may be held in person, video conference or by conference telephone. The Committee may take action by unanimous written consent in lieu of meeting.
The Committee will not have regularly scheduled meetings. Committee meetings shall be held as and when the Committee or the Board determines necessary or appropriate in accordance with the Company’s bylaws.
Members of the Committee shall receive at least three (3) days’ prior written notice of any meeting of the Committee.
FUNDING
The Committee shall receive appropriate funding as determined by the Committee to carry out its responsibilities and shall have the authority to retain experts, consultants, or legal counsel as the Committee deems appropriate.
Adopted: December 6, 2018, amended March 2, 2021
A-2
ARROWMARK FINANCIAL CORP. Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Annual Meeting Proxy Card IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. A Proposals — The Board of Directors recommend A a vote FOR the nominees listed in Proposal 1. 1. Election of Director: 01 - Emil W. Henry, Jr. For Withhold 02 - Karen L. Reidy For Withhold B Non-Voting Items Change of Address — Please print new address below. Comments — Please print your comments below. C Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. 1 U P X 03TD4A
The 2023 Annual Meeting of Shareholders of ArrowMark Financial Corp. will be held on Friday, June 16, 2023 at 2:30 p.m., ET, virtually via the internet at meetnow.global/M4W6KDZ IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Proxy — ARROWMARK FINANCIAL CORP. PROXY IN CONNECTION WITH THE 2023 ANNUAL MEETING OF STOCKHOLDERS (THE “ANNUAL MEETING”) OF ARROWMARK FINANCIAL CORP. TO BE HELD ON JUNE 16, 2023 PROXY SOLICITED BY BOARD OF DIRECTORS The undersigned holder of shares of common stock of ArrowMark Financial Corp., a Delaware corporation (the “Company”), hereby appoints Kelsey Auble, Sanjai Bhonsle and Patrick Farrell proxies for the undersigned, each with full powers of substitution and revocation, to represent the undersigned and to vote on behalf of the undersigned all shares of Common Stock which the undersigned is entitled to vote at the Annual Meeting to be held virtually at 2:30 p.m., ET, on June 16, 2023, and any adjournments or postponements thereof. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement and hereby instructs said proxies to vote said shares of common stock as indicated hereon. The validity of this proxy is governed by Delaware law. A majority of the proxies present and acting at the Annual Meeting in person or by substitute (or, if only one shall be so present, then that one) shall have and may exercise all of the power and authority of said proxies hereunder. The undersigned hereby revokes any proxy previously given. THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE BOARD NOMINEES IN PROPOSAL 1. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY BE PRESENTED AT THE ANNUAL MEETING OR ANY ADJOURNMENTS, POSTPONEMENTS OR DELAYS THEREOF