Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
(b)
and (c) Rand Capital Corporation (the “Company”) and Rand Capital SBIC, Inc. (the “SBIC”),
a wholly owned subsidiary of the Company that is licensed as a small business investment company by the Small Business Administration,
announced today that Allen F. “Pete” Grum, President, Chief Executive Officer and Chief Compliance Officer of the Company
and the SBIC intends to retire effective December 1, 2021. Mr. Grum will remain on as a director of the Company, and has been appointed
Vice Chair of the Board of Directors of the Company (the “Board”), effective December 1, 2021. Beginning December 1, 2021,
with Mr. Grum’s appointment as Vice Chair of the Board, Mr. Grum will receive compensation for his service on the Board
that is consistent with the compensation paid to the Company’s other directors. There was no disagreement between Mr. Gum and the
Company on any matter relating to the Company’s operations, policies or practices.
As
a result of Mr. Grum’s pending retirement, Daniel Penberthy, Executive Vice President, Treasurer, Chief Financial Officer and Secretary
of the Company, has been appointed to serve as President and Chief Executive Officer of the Company and the SBIC, effective December
1, 2021. There are no arrangements or understandings
between Mr. Penberthy and any other person pursuant to which he was selected as President and Chief Executive Officer of the Company.
There are no family relationships between Mr. Penberthy and any director or executive officer of the Company, and there are no transactions
involving Mr. Penberthy requiring disclosure under Item 404(a) of Regulation S-K.
Mr.
Penberthy, age 58, has served as Treasurer and Chief Financial Officer of the Company since August 1997. Since January 2002, Mr. Penberthy
has also served as Executive Vice President of the Company. In addition, Mr. Penberthy has served on the investment committee of Rand
Capital Management, LLC (“RCM”), which is the external investment adviser for the Company and responsible for all aspects
of the Company’s investment process, and as the Executive Vice President and Chief Financial Officer of RCM since November 2019.
Effective December 1, 2021, Mr. Penberthy will also serve as President and Chief Executive Officer of RCM.
As
a result of Mr. Penberthy’s appointment to President and Chief Executive Officer, Margaret Brechtel, age 55, Vice President of
Finance of the Company, has been appointed to serve as Executive Vice President, Treasurer, Chief Financial Officer and Secretary of
the Company and Executive Vice President, Treasurer
and Secretary of the SBIC, effective December 1, 2021. There are no arrangements or understandings
between Ms. Brechtel and any other person pursuant to which she was selected as Executive
Vice President, Treasurer, Chief Financial Officer and Secretary of the Company. There are no family relationships between Ms.
Brechtel and any director or executive officer of the Company, and there are no transactions involving Ms.
Brechtel requiring disclosure under Item 404(a) of Regulation S-K.
Ms.
Brechtel has served as an officer of the Company since 2002, initially as Controller and subsequently as Vice President of Finance since
January 2009. Ms. Brechtel has also served as Vice President of Finance of RCM since November 2019. Effective
December 1, 2021, Ms. Brechtel will also serve as Executive
Vice President and Chief Financial Officer of RCM. Ms. Brechtel earned her Bachelor of Science and her Master of Business Administration
from the State University of New York at Buffalo and is a Certified Public Accountant in the State of New York.
In
addition, Erland E. Kailbourne, Chairman of the Board, will be stepping down as Chairman, effective December 1, 2021, although he will
remain on the Board. Robert M. Zak, a current member of the Board, will replace Mr. Kailbourne as Chairman of the Board effective December
1, 2021.