Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Election of Jack Reilly to
the Board of Directors
On
January 11, 2011, Jack Reilly was elected to the Board of Directors of
Gladstone Capital Corporation (the "Company") and appointed as a member of the
Company’s Audit Committee, effective immediately.
Since
1987, Mr. Reilly has been the President of Reilly Investment Corporation, which
provides advisory services and financing to public and private companies
involved in real estate financing. Mr. Reilly served as President and CEO of
Reilly Mortgage Group, Inc. from 1976 to 1984, before the company was sold to
Perpetual Savings Bank. From 1971 to 1976 Mr. Reilly served as Vice
President at Walker & Dunlop, Inc., which specialized in commercial loan
origination, joint ventures and HUD programs. Prior to that, he worked as a
Research Engineer for the Crane Company after serving in the U.S. Navy as a
Supply Officer from 1964 to 1967. Mr. Reilly received a Bachelor of
Arts and a Bachelor of Science, Mechanical Engineering from University of Notre
Dame and an MBA from Harvard Business School. He is involved in many notable
charities in the Washington, D.C. area.
Appointment of David Watson
as Chief Financial Officer
David
Watson was appointed by the Board of Directors of the Company to fill the
Company’s Chief Financial Officer position, effective January 11, 2011, and
until the appointment of his successor. Since January 2010, Mr. Watson, age 35,
has served and will continue to serve as the Chief Financial Officer for
Gladstone Investment Corporation, an affiliated fund of the
Company.
From
August 2007 to January 2010, Mr. Watson served as Director of Portfolio
Accounting for MCG Capital Corporation. From July 2001 to July 2007,
Mr. Watson was employed by Capital Advisory Services, LLC, which subsequently
joined Navigant Consulting, Inc., where he held various positions providing
finance and accounting consulting services.
The
Company does not pay cash compensation or provide other benefits directly to Mr.
Watson or to any of its other executive officers. Mr. Watson is an
employee of Gladstone Administration, LLC (the “Administrator”), which is
compensated for the services it provides to the Company pursuant to the terms of
an administration agreement between the Company and the Administrator (the
“Administration Agreement”). Pursuant to the Administration
Agreement, the Company makes payments equal to its allocable portion of the
Administrator’s overhead expenses in performing its obligations under the
Administration Agreement including, but not limited to, the Company’s allocable
portion of the salary and bonus (“Salary Expenses”) of Mr.
Watson. Based on the December 31, 2010 proportion of expense
reimbursement due to the Administrator under the Administration Agreement, the
Company expects that its allocable portion of Mr. Watson’s annualized Salary
Expenses will be approximately $48,700.