Monroe Capital (MRCC) investor relations material

Executive summary

• The document details a proposed merger between two business development companies, involving an asset sale and subsequent merger, with the surviving entity continuing operations under its existing management and investment strategy.

• The transaction is structured so that one company sells all its investment assets for cash to an affiliate, then merges with the acquirer, with shareholders receiving shares based on a net asset value exchange ratio.

• The merger is intended to be tax-free for shareholders, with the exchange ratio determined by the relative net asset values of the companies shortly before closing.

• Both boards, following special committee recommendations and fairness opinions from independent financial advisors, unanimously recommend shareholder approval.

• The combined company expects enhanced scale, diversification, operational synergies, and a temporary advisory fee waiver to benefit shareholders.

Voting matters and shareholder proposals

• Shareholders of the acquiring company are asked to approve the issuance of new shares for the merger and to elect a new director from the target company.

• Shareholders of the target company are asked to approve the asset sale and the merger.

• Approval thresholds: a majority of votes cast for the share issuance and a plurality for the director election; a majority of outstanding shares for the asset sale and merger.

• Abstentions and broker non-votes have no effect on the outcome for the acquirer, but count as votes against for the target.

• Termination fees and expense reimbursements are specified if the transaction is not completed and a superior proposal is accepted.

Board of directors and corporate governance

• The post-merger board will include two independent directors from the acquirer, one independent director from the target, and the acquirer's CEO.

• The director nominee from the target company is subject to shareholder approval and contingent on the merger closing.

• The acquirer's board is classified, with staggered three-year terms and removal only for cause by a supermajority.

• Anti-takeover provisions, advance notice requirements, and limitations on shareholder actions are in place.