ArrowMark Financial (BANX) DEF 14ADefinitive proxy

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

_________________

SCHEDULE 14A

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PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934

Check the appropriate box:

ArrowMark Financial Corp.
(Name of Registrant as Specified in Its Charter)

_______________________________________________________________
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

ARROWMARK FINANCIAL CORP.
100 Fillmore Street, Suite 325
Denver, CO 80206

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on June 14, 2024

To the Stockholders of ArrowMark Financial Corp. (the “Company”):

Notice is hereby given that the 2024 Annual Meeting of Stockholders (the “2024 Annual Meeting”) of the Company, a Delaware corporation, will be held on Friday, June 14, 2024 at 2:30 p.m. E.T. for the following purposes, each of which is more fully described in the accompanying Proxy Statement dated May 7, 2024:

1.      To elect one Class II Director of the Company, to serve for a term ending at the 2027 Annual Meeting of Stockholders of the Company and when his successor is duly elected and qualifies (Proposal 1); and

2.      To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

The 2024 Annual Meeting will be held in a virtual meeting format only, which will be conducted online via a live webcast at meetnow.global/MXYPV9M. Stockholders may attend and vote at the virtual meeting by following the instructions included in the accompanying Proxy Statement.

Your vote is important!

The Board of Directors of the Company has fixed the close of business on April 23, 2024 as the record date for the determination of stockholders of the Company entitled to notice of and to vote at the 2024 Annual Meeting and any adjournments or postponements thereof.

All stockholders of record of the Company on the record date are cordially invited to virtually attend the 2024 Annual Meeting. Even if you expect to virtually attend the 2024 Annual Meeting, please complete, date and sign the enclosed proxy card and return it promptly in the envelope provided for this purpose. If you have been provided with the opportunity on your proxy card or voting instruction form to provide voting instructions, and otherwise authorize the persons named as proxy holders in the enclosed proxy to act on your behalf at the 2024 Annual Meeting, via telephone or the Internet, please take advantage of these prompt and efficient voting options.

The enclosed proxy is being solicited on behalf of the Board of Directors of the Company.

May 7, 2024

INSTRUCTIONS FOR SIGNING PROXY CARD

The following general rules for signing the proxy card may be of assistance to you and may minimize the time and expense to the Company in validating your vote if you fail to sign your proxy card properly.

1.      Individual Accounts:    Sign your name exactly as it appears in the registration.

2.      Joint Accounts:    Both owners of a joint account should sign, and the names of the parties signing should conform exactly to the names shown in the registration.

3.      All Other Accounts:    The capacity of the individual signing the proxy card should be indicated unless it is reflected in the form of registration. For example:

ARROWMARK FINANCIAL CORP.
100 Fillmore Street, Suite 325
Denver, CO 80206

ANNUAL MEETING OF STOCKHOLDERS
To Be Held on June 14, 2024

PROXY STATEMENT

This document is a proxy statement (the “Proxy Statement”) for ArrowMark Financial Corp., a Delaware corporation (the “Company”). This Proxy Statement is furnished in connection with the solicitation of proxies by the Company’s Board of Directors (the “Board”) for use at the 2024 Annual Meeting of Stockholders of the Company (“2024 Annual Meeting”) to be held on Friday, June 14, 2024 at 2:30 p.m. E.T.

The Meeting will be held in a virtual meeting format only, which will be conducted online via a live webcast. You will be able to attend and participate in the Meeting online by visiting meetnow.global/MXYPV9M and entering the control number found on your Proxy Card. You may vote during the 2024 Annual Meeting by following the instructions available on the meeting website during the 2024 Annual Meeting. There is no physical location for the 2024 Annual Meeting.

A Notice of the 2024 Annual Meeting and a proxy card for the Company accompany this Proxy Statement. Proxy solicitations will be made, beginning on or about May 7, 2024 primarily by mail, but proxy solicitations may also be made by telephone, email or personal interviews conducted by officers of the Company, ArrowMark Asset Management LLC, the investment adviser to the Company (the “Adviser”), and Computershare Trust Company, N.A., the transfer agent to the Company. There is no stockholder statutory right of appraisal or dissent with respect to any matters to be voted on at the 2024 Annual Meeting. The costs and expenses incurred in connection with the preparation, printing, and mailing of this Proxy Statement and its enclosures will be paid by the Company. The Company also will reimburse brokerage firms and others for their expenses in forwarding solicitation material to the beneficial owners of its shares of common stock. This Proxy Statement and proxy card are first being sent to stockholders on or about May 7, 2024

THE ANNUAL REPORT OF THE COMPANY, INCLUDING AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023, IS AVAILABLE UPON REQUEST, WITHOUT CHARGE BY CALLING INVESTOR RELATIONS AT 877-855-3434 OR BY WRITING TO ARROWMARK FINANCIAL CORP. AT 100 FILLMORE STREET, SUITE 325, DENVER, CO 80206. THE COMPANY’S ANNUAL REPORT IS ALSO AVAILABLE ON THE COMPANY’S WEBSITE (ir.arrowmarkfinancialcorp.com) AND THE SECURITIES AND EXCHANGE COMMISSION’S (“SEC”) WEBSITE (www.sec.gov).

If the enclosed proxy card is properly executed and returned in time to be voted at the 2024 Annual Meeting, the shares of Common Stock (as defined below) represented thereby will be voted in accordance with the instructions marked thereon. Unless instructions to the contrary are marked thereon, a properly executed proxy will be voted “FOR” the election of the nominee for Director named in this Proxy Statement. Any stockholder of record

who has given a proxy has the right to revoke it at any time prior to its exercise either by virtually attending the 2024 Annual Meeting and voting his or her Shares in person, by submitting a letter of revocation, or by a later-dated proxy delivered to the Secretary of ArrowMark Financial Corp. at 100 Fillmore Street, Suite 325, Denver, CO 80206 before the 2024 Annual Meeting or at the 2024 Annual Meeting. Broker-dealers and other nominees holding Shares of the Company in “street name” for the benefit of their customers and clients will request the instructions of such customers and clients on how to vote their shares of Common Stock on the Proposal before the 2024 Annual Meeting. A signed voting instruction card or other authorization by a beneficial owner of the Company’s Shares that does not specify how the beneficial owner’s shares of Common Stock should be voted will be deemed an instruction to vote such shares of Common Stock “FOR” the election of the nominee for Director named in this Proxy Statement. Beneficial owners should consult their broker or other nominees for instructions as to how to revoke any voting instructions.

Under the By-laws of the Company, the presence in person or by proxy of the holders of a majority of the total outstanding shares of Common Stock of the Company entitled to vote shall be necessary and sufficient to constitute a quorum for the transaction of business (a “Quorum”) at the 2024 Annual Meeting. In the event that a Quorum is not present at the 2024 Annual Meeting, or in the event that a Quorum is present but sufficient votes to approve the proposal is not received, the chairman of the 2024 Annual Meeting may adjourn the 2024 Annual Meeting without notice other than announcement at the 2024 Annual Meeting.

The Company has outstanding one class of capital stock, consisting of common stock, par value $0.001 per share (the “Common Stock”). Pursuant to the Company’s Certificate of Incorporation, the Board is authorized to provide for the issuance from time to time of up to 40,000,000 shares of Common Stock, and 10,000,000 shares of preferred stock, par value $0.001 per share, consisting of one or more series (the “Preferred Stock”). The Company currently has no shares of Preferred Stock outstanding. Each share of Common Stock is entitled to one vote at the 2024 Annual Meeting with respect to each matter to be voted on, with pro rata voting rights for any fractional shares. Each share of Common stock entitles the holder to cast one vote for as many individuals as there are Directors to be elected and for whose election the shares of Common Stock is entitled to be voted. No shares of Common Stock have cumulative voting rights. Directors are elected by the affirmative vote of a plurality of the votes cast by all shares of Common Stock present in person or represented by proxy. A “plurality” means that nominees who receive the largest number of votes cast (even if they receive less than a majority) will be elected as directors. Since the nominee is running unopposed, the nominee only needs one vote to be elected if there is a Quorum present at the 2024 Annual Meeting. On the record date, April 23, 2024 (the “Record Date”), 7,116,775 shares of Common Stock were issued and outstanding.

Security Ownership of Certain Beneficial Owners

Based upon the Company’s review of filings made pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “1934 Act”), as of the Record Date, to the Company’s knowledge the following stockholders beneficially owned over 5% of the Company’s shares of Common Stock:

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(1)      Based upon information obtained from Schedule 13G/A filed with the SEC on February 14, 2024.

The following table sets forth the dollar range of equity securities in the Company beneficially owned by each Director and executive officer as of the Record Date. As of that date, the Company’s Directors and executive officers, as a group, owned approximately 0.82% of the Company’s outstanding Common Stock. No shares of Preferred Stock were outstanding as of the Record Date.

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(1)      This information has been furnished by each Director and executive officer.

None of the Independent Directors or their family had any interest in the Adviser or any person directly or indirectly controlling, controlled by, or under common control with the Adviser as of December 31, 2023.

QUESTIONS AND ANSWERS REGARDING THE PROPOSAL

Question:    What proposal will be acted upon at the 2024 Annual Meeting?

Answer:    At the 2024 Annual Meeting, you will be asked to approve the election of one Class II director (Proposal 1).

PROPOSAL 1: ELECTION OF DIRECTOR

The Board currently consists of five Directors, three 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.

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. Michael Stolper currently serves as an Independent Director and has been nominated to serve as a Class II Director for a three-year term to expire at the Company’s 2027 Annual Meeting of Stockholders.

The 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:

Nominee Serving Until 2027 Annual Meeting of Directors (Class II)

Michael Stolper

Directors Serving Until 2025 Annual Meeting of Directors (Class III)

Sanjai Bhonsle

John Scott Emrich

Directors Serving Until 2026 Annual Meeting of Stockholders (Class I)

Emil W. Henry, Jr.

Karen L. Reidy

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE NOMINEE NAMED IN THIS PROXY STATEMENT.

The Board has a Nominating and Governance Committee (“Nominating Committee”) and adopted a written charter for the Nominating Committee. A copy of the written charter is included in this Proxy Statement as Appendix A. The Nominating Committee follows the process outlined in its charter in selecting candidates for nomination by the Board. On the basis of information learned during this process, at a meeting of the Nominating Committee held on March 5, 2024, the Nominating Committee approved, and recommended to the Board, Mr. Stolper as nominee for election as a Class II Director of the Company for a three-year term to expire at the Company’s 2027 annual meeting of stockholders and when his successor is duly elected and qualified.

All properly executed proxies will be voted (unless such authority has been withheld in the proxy or revoked as described herein) “FOR” the nominee named in this Proxy Statement. The Board knows of no reason why the nominee would be unable to serve, but in the event of any such unavailability, the proxies received will be voted for such substitute nominee as the Board may recommend.

Information About Each Director’s and Nominee’s Experience, Qualifications, Attributes or Skills

Certain biographical and other information relating to the Directors and Nominee, including their ages, positions with the Company, principal occupations and other board memberships for the past five years are shown below.

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(1)      The business address of each Director is c/o ArrowMark Financial Corp., 100 Fillmore Street, Suite 325, Denver, CO 80206.

(2)      ArrowMark Financial Corp. is the only portfolio in its fund complex.

(3)      “Independent Directors” are Directors who are not “interested persons” (as such term is defined in the 1940 Act) of the Company.

(4)      Nominee for election. If elected, his term will expire at the 2027 annual meeting of stockholders and when a successor is duly elected and qualified.

(5)      “Interested Directors” are “interested persons” (as such term is defined in the 1940 Act) of the Company. Mr. Bhonsle and Ms. Reidy are considered “interested persons” because of their affiliation with the Adviser.

Additional information about each Director follows, which describes some of the specific experiences, qualifications, attributes or skills that each Director possesses which the Board believes has prepared him or her to be an effective Director. The Board believes that the significance of each Director’s experience, qualifications, attributes or skills is an individual matter (meaning that experience that is important for one Director may not have the same value for another) and that these factors are best evaluated at the Board level, with no single Director, or particular 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

•        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.

•        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.

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.    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, three of the five 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.

Board’s Oversight Role

The Board’s primary role is oversight of the management of the Company. As is the case with virtually all investment companies, service providers to the Company, primarily the Adviser and its affiliates, have responsibility for the day-to-day management of the Company, which includes responsibility for risk management (including management of investment performance and investment risk, valuation risk, issuer and counterparty credit risk, compliance risk and operational risk). As part of its oversight, the Board, acting at its scheduled meetings, or the Chairman, acting between Board meetings, regularly interacts with and receives reports from senior personnel of service providers. The Board’s Audit Committee meets regularly, and between meetings the Audit Committee Chair has access to the Company’s independent registered public accounting firm and to the Company’s Chief Financial Officer. The Adviser and other service providers have adopted a variety of policies, procedures and controls designed to address the Company’s particular risks. However, it is not possible to eliminate, or even to mitigate, all of the risks applicable to the Company. The Board receives reports from Company counsel and the Independent Directors’ own independent legal counsel regarding regulatory, compliance and governance matters. The Board’s oversight role does not make the Board a guarantor of Company investments or of Company activities or the activities of any of the Company’s service providers.

Compensation of Directors and Executive Officers

During the fiscal year ended December 31, 2023, the Board held four meetings. Each Director of the Company attended at least 75% of the meetings of the Board and of any Committee of which he or she was a member. The compensation paid by the Company to the Independent Directors for the fiscal year ended December 31, 2023 is set forth below. No compensation is paid by the Company to the Interested Directors. No officers of the Company received compensation from the Company. The Company did not reimburse the Independent Directors for out-of-pocket expenses incurred in attending the Board and Committee meetings for the year ended December 31, 2023.

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(1)      Interested directors are not compensated by us for their service as directors.

Executive Officers of the Company

The following table provides information concerning each of the executive officers of the Company, including their ages, positions with the Company and principal occupations for the past five years.

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(1)      The business address of each officer is c/o ArrowMark Financial Corp., 100 Fillmore Street, Suite 325, Denver, CO 80206.

(2)      Elected by, and serves at the pleasure of, the Board.

Audit Committee

The Board has an Audit Committee comprised of the Company’s Independent Directors, each of whom is also “independent” under the rules of NASDAQ. The Audit Committee met four times during the Company’s fiscal year ended December 31, 2023. The functions of the Audit Committee are to (a) assist the Board in its oversight of (i) the integrity of the financial statements of the Company; (ii) the independent registered public accounting firm’s (the “Independent Auditor”) qualifications and independence; (iii) the performance of the Company’s internal audit function and Independent Auditor; and (iv) the compliance by the Company with legal and regulatory requirements and (b) prepare an audit committee report as required by Regulation S-K under the 1934 Act. The Audit Committee approves the selection and retention of the Independent Auditor, which is then ratified by both the full Board and a majority of the Independent Directors. The Audit Committee Charter, which describes the Audit Committee’s purpose and duties, is available at https://ir.arrowmarkfinancialcorp.com/static-files/3b9ff923-4bac-4048-9c23-1fed9da9fccf.

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, 2023.

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, 2023.

This report was submitted by the Audit Committee of the Company’s Board

John Scott Emrich, Chairman of the Audit Committee

Emil Henry, Jr.

Michael Stolper

March 5, 2024

Other Board-Related Matters

The Board has a Nominating and Governance Committee comprised of the Company’s Independent Directors. During the fiscal year ended December 31, 2023, the Nominating Committee held two meetings. 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 determine whether such director may vote on any issue as

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

•        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