EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST OF

SOUTHWEST GEORGIA FINANCIAL CORPORATION

 

(Amended and Restated Effective as of January 1, 2014)

 

 

TABLE OF CONTENTS

 

                                                                                                                                                                                                                                                                           

                     
       Page                                                                                       
ARTICLE I DEFINITIONS.....2
                                                                                                            
1.1Account
Balance.....2                                                                                                      
      

1.2Adoption Date.....2
                                                                                                      

1.3Annual
Compensation.....2                                                                                             

1.4Annual Valuation Date.....2
                                                                                            

1.5Authorized Leaves of Absence.....2
                                                                                  

1.6Beneficiary
.....2                                                                                                                    

1.7Board.....3

1.8Break in Service.....3

1.9Code.....3

1.10Company.....3

1.11Effective Date.....3

1.12Eligible Participant.....3

1.13Employee.....3

1.14Employer.....3

1.15Employer Contribution Account.....3

1.16Employer Stock.....4

1.17Employment.....4

1.18ERISA.....4

1.19ESOP Committee.....4

1.20ESOP Account.....4

1.21Fiduciaries.....4

1.22FMLA Leave.....4

1.23Hour of Service.....5

1.24Non-Employer Stock Account.....6

1.25Non-Employer Securities Portion of the Plan.....6

1.26Normal Retirement Date.....6

1.27Participant.....6

1.28Plan.....6

1.29Plan Administrator.....6

1.30Plan Year.....6

1.31Qualified Election Period.....6

1.32Service.....6

1.33Trust (or Trust Fund).....6

1.34Trustee.....6

1.35Valuation Date.....7

1.36Year of Service.....7

ARTICLE II PARTICIPATION AND SERVICE.....7

2.1Participation.....7

2.2Service.....8

2.3Effect of Break in Service.....8

2.4Inactive Account Status.....10

2.5Transfers of Employment Among Employers.....10

i

2.6Election Not to Participate.....10

2.7Qualified Military Service.....10

ARTICLE III CONTRIBUTIONS.....11

3.1Employer Contributions.....11

3.2Fund for Exclusive Benefit of Participants.....12

3.3Special Limitation on Allocations for Plan Years to Which Code   Section
415(c)(6) Applies.....12

ARTICLE IV INTERESTS OF PARTICIPANTS.....12

4.1Accounts of Participants.....12

4.2Allocation of Shares of Employer Stock, Income, Expense, Fluctuations in

Asset Value, Etc.....13

4.3Allocation of Employer Contributions.....13

4.4Maximum Additions.....15

4.5Directed Investments By Eligible Participants.....17

4.6Investment of Non-Employer Stock Accounts.....18

4.7Code Section 1042 Transactions.....19

ARTICLE V BENEFITS.....20

5.1Normal Retirement Benefits.....20

5.2Disability Benefits.....20

5.3Postponed Retirement.....20

5.4Death Benefits.....20

5.5Benefits on Termination of Employment.....21

5.6Payment of Benefits.....22

5.7Restrictions on Participants’ Right To Dispose of Employer Stock;

Employer’s and Plan’s Right of First Refusal.....23

5.8Participant’s Right to Put Employer Stock to the Company and the Plan.....24

5.9Securities Laws Restrictions On Resales.....25

5.10Maintenance of Accounts Prior to Payout.....26

5.11Present Value of Payments.....26

5.12Commencement of Payments.....26

5.13Error in Participant’s Account.....30

5.14No Other Benefits or Withdrawals.....30

5.15Voting Rights.....30

5.16Tender or Exchange Offer for Employer Stock.....31

5.17Appraisal of Employer Stock.....32

5.18Direct Transfer of Eligible Rollover Distributions.....32

5.19Notice of Right to Defer Distribution.....34

 

ii

 

 

ARTICLE VI DESIGNATION OF BENEFICIARY.....34

ARTICLE VII ADMINISTRATION.....35

7.1Allocation of Responsibility Among Fiduciaries for Plan and Trust
Administration.....35

7.2Appointment of Plan Administrator.....36

7.3Claims Procedure.....36

7.4Records and Reports.....37

7.5Other Plan Administrator Powers and Duties.....37

7.6Rules and Decisions.....38

7.7Authorization of Benefit Payments.....38

7.8Application and Forms for Benefits.....38

7.9Payment for Benefit of Disabled or Incapacitated Person.....38

7.10Notices to Trustee.....38

7.11Indemnification by the Company.....39

ARTICLE VIII POWERS, DUTIES AND RESPONSIBILITIES OF THE TRUSTEE.....39

8.1Establishment and Acceptance of Trust.....39

8.2Investment of Trust Fund.....39

8.3Discharge of Duties.....41

8.4Prohibited Transactions.....41

8.5Delegation of Responsibilities.....42

8.6Powers of Trustee.....42

8.7Payments From The Fund.....44

8.8Payment of Compensation, Expenses and Taxes.....44

8.9Accounting.....45

8.10Bond.....45

8.11Resignation or Removal of the Trustee.....45

ARTICLE IX AMENDMENT OF THE PLAN.....46

ARTICLE X DISCONTINUANCE OF CONTRIBUTIONS AND TERMINATION OF PLAN.....46

10.1Intention to Continue Plan.....46

10.2Termination or Partial Termination of Plan.....46

10.3Discontinuance of Contributions.....47

ARTICLE XI MISCELLANEOUS.....47

11.1Participants’ Rights, Acquittance.....47

11.2Spendthrift Clause.....48

11.3Participation of Adopting Employers.....48

11.4Successor Employer.....49

11.5Transfer of Plan Assets.....49

11.6Delegation of Authority by the Company.....50

11.7Construction of Agreement.....50

 

 

11.8Headings.....50

ARTICLE XII TOP-HEAVY PLAN PROVISIONS.....50

12.1Application.....50

12.2Definitions.....50

12.3Allocation of Minimum Contribution.....51

12.4Post-EGTRRA Top-Heavy Provisions.....52

 

 

 

iv

 

 

 

 

EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST OF SOUTHWEST GEORGIA FINANCIAL
CORPORATION

 

THIS AGREEMENT is made and entered as of the day of December, 2014, by and
between Southwest Georgia Financial Corporation, a holding company organized
under the laws of the State of Georgia, (the “Company”) and Southwest Georgia
Bank, a state banking association, as trustee (the “Trustee”);

 

W I T N E S S E T H:

 

WHEREAS, the Company maintains the Southwest Georgia Financial Corporation
Employee Stock Ownership Plan and Trust (the “Plan”);

 

WHEREAS, the Plan was amended and restated effective January 1, 2000 to comply
with the Tax Reform Act of 1986, as amended; the pension provisions of the
General Agreement on Tariffs and Trade (“GATT”); the Uniformed Services
Employment and Reemployment Rights Act of 1994 (“USERRA”) the Small Business Job
Protection Act of 1996 (“SBJPA”), the Tax Reform Act of 1997 (“TRA ‘97”), the
Internal Revenue Restructuring and Reform Act of 1998, and the Community Renewal
Tax Relief Act of 2000 and has subsequently been amended and restated effective
as of January 1, 2005 to incorporate other changes in law and for certain other
purposes.

 

WHEREAS, the Company again amended and restated the Plan, effective as of
January 1, 2009, except where otherwise stated, to incorporate prior amendments
to the Plan, to reflect certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (“EGTRRA”) as applicable to the Plan and to reflect
other legislative changes necessary to bring the Plan into compliance with
current laws, including final Regulations issued under section 415 of the
Internal Revenue Code of 1986, as amended, and the Pension Protection Act of
2006 (“PPA”);

 

WHEREAS, the Company now desires to amend and restate the Plan as required or
permitted by the Small Business Jobs Act of 2010 (“SBJA”), the Preservation of
Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (“PRA
2010”), the Moving Ahead for Progress in the 21st Century Act (“MAP-21”), the
American Taxpayer Relief Act of 2012 (“ATRA”) and the applicable statutory or
regulatory changes included on the 2013 Cumulative List;

 

WHEREAS, the provisions of this amendment and restatement of the Plan shall
apply only to those eligible employees who terminate employment with the Company
on or after January 1, 2014 or such later date as may apply for a provision
which becomes effective afterwards. Benefits payable to or on behalf of a
Participant who terminates employment prior to January 1, 2014 shall not be
affected by the terms of any Plan amendment adopted after such Participant’s
termination of employment unless the amendment and restatement provides
otherwise.

 

1

 

 

NOW THEREFORE, effective as of January 1, 2014 except as otherwise provided, the
Plan is amended and restated as follows.

 

ARTICLE I DEFINITIONS

The following words and phrases when used herein shall have the meanings set
forth

below unless a different meaning is plainly required by the context. The
masculine gender wherever used herein shall be deemed to include the feminine.
Words in the singular shall be read and construed as though used in the plural
in all cases where they would so apply, and vice versa.

 

1.1              Account Balance. The amount standing to the credit of a
Participant in his Employer Contribution Account and Non-Employer Stock Account,
which shall at all times be fully vested.

 

1.2Adoption Date. The date this plan was originally effective, namely July 8,
1981.

 

1.3              Annual Compensation. A Participant’s total compensation paid by
the Employer for the Plan Year including wages, salary, overtime pay, bonuses,
and any amounts contributed by the Employer on behalf of an Employee pursuant to
a salary reduction agreement which is not includible in the gross income of the
Employee under Code Sections 125, 132(f)(4), 401(k), 402(a)(8), 402(h), or
403(b), but excluding commissions, any indirect payments such as contributions
to this Plan or any other profit sharing plan, pension plan, group insurance
plan or welfare plan, and income from the exercise of stock options, stock
appreciation rights, restricted stock units, restricted stock or other stock
awards. The Annual Compensation of each Participant taken into account in
determining contributions and allocations for any Plan Year beginning after
December 31, 2013, shall not exceed $260,000, as adjusted for cost-of-living
increases in accordance with Code Section 401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year applies to Annual Compensation for the
determination period (the Plan Year or other consecutive 12-month period over
which Annual Compensation is otherwise determined under the plan) that begins
with or within such calendar year.

 

1.4Annual Valuation Date. December 31 of each year while the Plan is in effect.

 

1.5              Authorized Leaves of Absence. Any absence authorized by the
Employer under the Employer’s standard personnel practices, provided that all
persons under similar circumstances must be treated alike in the granting of
such Authorized Leaves of Absence pursuant to Section 2.7, and provided further
that the Employee returns within the period of authorized absence. An absence
due to service in the armed forces of the United States shall be considered an
Authorized Leave of Absence pursuant to Section 2.7.

 

1.6              Beneficiary. Any person or persons (natural or otherwise)
designated by a Participant on a form supplied by the ESOP Committee to receive
benefits payable in the event of the death of the Participant, or in the absence
of any such designated person(s), such other person(s) determined to be the
beneficiary under Article VI hereof.

 

 

1.7              Board. The Board of Directors of Southwest Georgia Financial
Corporation, a Georgia corporation.

 

1.8              Break in Service. A twelve-month computation period in which
the subject Employee completes no more than 500 Hours of Service.

 

1.9              Code. The Internal Revenue Code of 1986, as amended, and the
regulations established pursuant thereto and the rulings issued thereunder, as
they now exist or as they may hereafter be amended or modified.

 

1.10Company. Southwest Georgia Financial Corporation, a Georgia corporation.

 

1.11          Effective Date. The date upon which this amendment and restatement
of the Plan is effective, namely January 1, 2014. The Plan was originally
effective as of July 8, 1981.

 

1.12          Eligible Participant. Any Employee who (i) is credited with at
least ten (10) years of participation in the Plan, (ii) who has attained at
least the age of fifty-five (55), and (iii) who is a Participant at the time of
any election under Section 4.5.

 

1.13          Employee. Any person who is an employee (such term having its
customary meaning) of the Employer and who is receiving remuneration for
personal services rendered to the Employer (or who is on an Authorized Leave of
Absence). Provided, however, that for purposes of this Plan, the term Employee
shall not include any person whose terms and conditions of employment are
determined by collective bargaining with a union or an affiliate thereof
representing such persons and with respect to whom inclusion in this Plan has
not been provided for in the collective bargaining agreement setting forth those
terms and conditions. In addition, the term Employee shall include leased
employees within the meaning of Code Section 414(n)(2) unless (i) such leased
employees constitute less than twenty percent (20%) of the Employer’s non-highly
compensated work force within the meaning of Code Section 414(n)(5)(C)(ii), and
(ii) such leased employees are covered by a plan described in Code Section
414(n)(5), in which event such leased employees shall not be considered
Employees for purposes of this Plan. Leased employees shall not be eligible to
participate in the Plan. An individual classified as an independent contractor
or other individual under contract with an Employer and classified by the
Employer as a non-Employee shall not be eligible to participate in the Plan;
provided, however, that if any individual classified by an Employer as an
independent contractor or other non-Employee designation is later required by
action of the Internal Revenue Service, Department of Labor or any other
governmental agency to be classified as an Employee, such individual shall not
be an eligible Employee prior to such reclassification and, after such
reclassification, the individual’s participation shall be in accordance with the
rules established by the Company.

 

1.14          Employer. The Company and any other business enterprise duly
adopting for the exclusive benefit of its eligible employees (and their
beneficiaries) the provisions of this Plan in accordance with the terms hereof.

 

1.15          Employer Contribution Account. The account maintained for a
Participant to record his share of the contributions of the Employer and
adjustments relating thereto in accordance with Article IV.

 

 

1.16          Employer Stock. The common stock, par value $1.00 per share, of
Southwest Georgia Financial Corporation, a qualifying employer security within
the meaning of Section 407(d)(5) of ERISA. Employer Stock shall also include any
securities substituted for such stock by way of recapitalization,
reorganization, merger or consolidation. The Plan shall not hold or invest in
any Employer Stock unless such securities are (i) common stock which is readily
tradable in an established market as provided in Treas. Reg. Section
1.401(a)(35)-1(f)(5) or (ii) if there is no such readily tradable common stock,
then common stock having a combination of voting power and dividend rights equal
to or in excess of that class of common stock having the greatest voting power
and that class of common stock having the greatest dividend rights; provided
that noncallable preferred stock which is convertible at any time at a
reasonable price into common stock having the characteristics described above
may be used.

 

1.17          Employment. Service as an Employee of the Employer. The term
“Reemployment” shall mean Employment following a Break in Service. The terms
“Employed” and “Reemployed” shall be used in the same sense as the terms
Employment and Reemployment, respectively.

 

1.18          ERISA. The Employee Retirement Income Security Act of 1974, as
amended from time to time.

 

1.19          ESOP Committee. The committee appointed by the Board as the Plan
Administrator to, among its other duties: (i) convey the directions of
Participants to the Trustee as to the voting or tender of shares of Employer
Stock under Article V that are allocated to Participants’ accounts and to notify
the Trustee as to the voting of allocated shares of Employer Stock for which it
does not receive timely directions from Participants and the tender of
unallocated shares of Employer Stock in accordance with Article V; (ii) direct
the Trustee as to the acquisition or disposition of Employer Stock, including
the number of shares to purchase, the price of such shares and when to acquire
such shares as provided in Section 8.2; and (iii) direct the Trustee to borrow
funds to acquire Employer Stock, including the terms, amount and timing of any
exempt loan. In the absence of the appointment of an ESOP Committee, the Company
shall assume such responsibilities, except as otherwise restricted in the Plan.
If the ESOP Committee (or any committee which is carrying out any or all of the
functions of the ESOP Committee) decides that it cannot perform the functions
required under Article V with respect to the voting or tender of shares of
Employer Stock because of restrictions under ERISA or the Code, the Board shall
designate a person, committee or entity to perform such functions.

 

1.20          ESOP Account. The ESOP Account consists of the Employer
Contribution Account under which Employer Contributions are made pursuant to
Article IV.

 

1.21          Fiduciaries. The named fiduciaries, who shall be the Employer, the
ESOP Committee and the Trustee, and other parties designated as fiduciaries by
such named fiduciaries in accordance with the powers herein provided, but only
with respect to the specific responsibilities of each for Plan and Trust
administration as set forth herein.

 

1.22          FMLA Leave. The leave of absence taken by an Employee, on either a
paid or unpaid basis, in accordance with the Family and Medical Leave Act of
1993 and in connection with any effective similar state family leave law.

 

 

1.23Hour of Service. Each Employee shall be credited with an Hour of Service
for:

 

(1)               Each hour for which such Employee is paid, or entitled to
payment, by the Employer for the performance of duties. These hours shall be
credited to the Employee for the computation period in which the duties are
performed; and

 

(2)               Each hour for which such Employee is paid, or entitled to
payment, by the Employer on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), jury duty, military duty or leave of absence, provided, however,
that under this paragraph (2):

 

(i)                 No more than 500 Hours of Service shall be credited for any
single continuous period (whether or not such period occurs in a single
computation period) during which the Employee performs no duties:

 

(ii)               No hours shall be credited if such payment is made or due
under a plan maintained by the Employer solely for purposes of complying with
applicable worker’s compensation, unemployment insurance or disability insurance
laws; and

 

(iii)             No hours shall be credited for a payment which reimburses an
Employee for medical or medically related expenses incurred by the Employee; and

 

(3)               Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. These hours shall be
credited to the Employee for the computation period to which the award or
agreement pertains rather than the period in which the award, agreement, or
payment is made. The same Hours of Service shall not be credited under
paragraphs (1) or (2), as the case may be, and this paragraph (3). Crediting of
hours for back pay awarded or agreed to with respect to periods described in
paragraph (2) shall be subject to the limitations of that paragraph.

 

(4)               Hours of Service credited under the Plan shall be calculated
and credited subject to the rules and restrictions set forth in Department of
Labor Regulations Section 2530.200b-2(b), (c) and (f) which are incorporated
herein by this reference.

 

(5)               The method of determining Hours of Service under the Plan
shall be in accordance with Department of Labor Regulations Section 2530.200b-3
and shall be applied in a consistent and nondiscriminatory manner to Employees
or classes of Employees.

 

(6)               For purposes of determining whether a Break in Service has
occurred for participation and vesting purposes, for Plan Years beginning on or
after January 1, 1985, Hours of Service shall also include hours for maternity
or paternity absences in accordance with Section 2.3(e). During such absence,
the Employee shall receive credit for Hours of Service equal to the number of
hours that normally would have been credited during the absence, or if unknown,
then eight hours per day of absence, provided that the credit for Hours of
Service on account of the birth or placement of a child with the Employee by
adoption shall not exceed 501 Hours of Service per absence. Hours of Service on
account of pregnancy or adoption shall only be required to be credited if, in
the Plan Year in which the maternity or paternity absence begins,

 

 

crediting of such hours is necessary to prevent a Break in Service that year;
otherwise, such hours shall be credited in the following Plan Year.

 

1.24          Non-Employer Stock Account. The account maintained for a
Participant to record the amounts realized pursuant to Section 5.16 and
adjustments relating thereto.

 

1.25          Non-Employer Securities Portion of the Plan. The portion of the
Plan consisting of the Non-Employer Stock Account which holds the proceeds of a
tender offer, exchange or other sale or disposition of Employer Stock pursuant
to Section 5.16.

 

1.26          Normal Retirement Date. The first day of the month coincident with
or next following the date on which a Participant attains the age of sixty-five
(65) years. A Participant’s right to his retirement benefits shall become
non-forfeitable upon his attainment of age sixty-five (65).

 

1.27          Participant. Any Employee who has qualified under the terms of the
Plan for participation therein and who remains so qualified.

 

1.28          Plan. The Plan and Trust set forth herein, as amended from time to
time, which shall be known as the Employee Stock Ownership Plan and Trust of
Southwest Georgia Financial Corporation, is intended to qualify as an employee
stock ownership plan as defined in Section 4975(e)(7) of the Code, which is
designed to primarily invest in qualifying employer securities.

 

1.29          Plan Administrator. The ESOP Committee, or in its absence, the
Company or any administrative committee appointed for that purpose by the
Company.

 

1.30Plan Year. January 1 through the next following December 31.

 

1.31Qualified Election Period. The six (6) Plan Year periods beginning with
later of

(a)the first Plan Year in which the relevant Participant first became an
Eligible Participant, or

(b)the first Plan Year beginning after December 31, 1986.

 

1.32          Service. A Participant’s period of employment with the Employer,
or any predecessor of the Employer, whether a corporation, partnership or sole
proprietorship, and any corporation, sole proprietorship or partnership that is
a member of a controlled group of corporations that includes the Employer, or is
under common control, or is a member of an affiliated service group that
includes the Employer, or is related through the leasing of employees, as
determined under Code Section 414(b), (c), (m) and (n).

 

1.33          Trust (or Trust Fund). The fund known as the Employee Stock
Ownership Plan Trust of Southwest Georgia Financial Corporation, maintained in
accordance with the terms of the trust agreement, as amended from time to time,
which constitutes a part of the Plan.

 

1.34          Trustee. Southwest Georgia Bank, a state banking association, and
any successor trustee(s) designated in the manner provided in the Plan and
accepting such trust as provided herein.

 

 

1.35          Valuation Date. The periodic and regularly scheduled date(s) for
valuation of the individual investment funds of the Trust and the respective
Non-Employer Stock Accounts of Participants.

 

1.36          Year of Service. The applicable 12-month period during which the
Employee completes at least 1,000 Hours of Service. Year of Service shall
include past service with any Employer to the extent provided hereunder,
provided there shall be no duplication of benefits.

 

ARTICLE II

PARTICIPATION AND SERVICE

2.1              Participation

 

(a)                Participation Requirements Prior to January 1, 1993. An
Employee shall become a Participant as of the January 1 or July 1 (the “Entry
Date”) coincident with or next following the date on which the Employee first
completes two (2) Years of Service, provided that such Employee is Employed on
such Entry Date. Notwithstanding the foregoing, an Employee who was actively
employed on January 7, 1991 shall become a Participant on January 7, 1991 and
shall be eligible for an allocation of the Employer’s contribution for the Plan
Year ending December 31, 1991 in accordance with Section 4.3 based on his Annual
Compensation during such Plan Year without regard to his Hours of Service for
such Plan Year provided he is in active Employment on December 31, 1991.

 

(b)               Participation Requirements from January 1, 1993 through May
31, 1997. An Employee who is first credited with an Hour of Service on or before
May 31, 1997 who did not become a Participant prior to January 1, 1993 shall be
eligible to participate on (i) January 1, 1993 if the Employee has completed a
ninety (90) day evaluation period on or before January 1, 1993, or (ii) in the
case of any other eligible Employee, the first day of the month following the
completion of a ninety (90) day evaluation period which shall begin on the first
date the Employee is credited with an Hour of Service, provided the Employee is
employed on such date. An Employee who is employed in a janitorial position
shall not be eligible to participate.

 

(c)                Participation Requirements Effective as of June 1, 1997. An
Employee who is first credited with an Hour of Service on or after June 1, 1997
shall become a Participant on the first day of the month following the date on
which the Employee completes two (2) Years of Service, provided that such
Employee is Employed on such date. An Employee who is employed in a janitorial
position shall not be eligible to participate.

 

(d)               Computation of Service. For purposes of determining an
Employee’s eligibility to participate under Section 2.1, the computation period
initially to be taken into account to determine whether the Employee has
completed a Year of Service shall be the 12-month period commencing with the
date of the Employee’s Employment. In the event that the Employee fails to be
credited with at least 1,000 Hours of Service during this initial computation
period, the eligibility computation period shall be the first Plan Year
commencing after the Employee’s date of Employment and succeeding Plan Years. If
the Employee is credited with at least 1,000 Hours of Service during the
12-month period commencing with the

 

 

date of the Employee’s Employment, the computation period used to determine
whether the Employee has been credited with the second Year of Service, shall be
the 12-month period beginning on the first anniversary of the Employee’s
Employment commencement date and, if necessary, succeeding years based on the
Employee’s date of Employment.

 

(e)                Service with Acquired Employers. If an Employee was employed
by an employer who was acquired by the Company or an affiliate of the Company
(either as an acquisition of stock or assets), for purposes of determining the
Employee’s eligibility to participate, the Employee’s last continuous period of
service with such acquired employer shall be credited only as provided in
Schedule A.

 

(f)                Participation Exclusion Effective as of May 1, 1999.
Notwithstanding the other provisions of this Section 2.1, effective May 1, 1999,
any Employee who is employed on an exclusively commissioned basis shall not be
eligible to participate in the Plan.

 

2.2              Service. A Participant’s eligibility for benefits under the
Plan shall be based on his Years of Service determined as follows:

 

(a)                Service Prior to the Adoption Date. With regard to an
Employee who was Employed on the Adoption Date, his Years of Service with the
Employer prior to and including the Adoption Date shall be counted as Service
hereunder, including periods of Authorized Leave of Absence. In addition, an
Employee’s Years of Service with Moultrie National Bank (now, Southwest Georgia
Bank) prior to the Adoption Date shall be counted as Service hereunder.

 

(b)               Service From and After the Adoption Date. Subject to
subsection (a) and the provisions which follow, an Employee shall accrue a Year
of Service for each Plan Year in which he has 1,000 or more Hours of Service.
Provided, however, that if the Employee has completed at least 1,000 Hours of
Service during the 12-month period commencing on the date of his Employment and
such period overlaps two Plan Years in neither of which has the Employee
completed at least 1,000 Hours of Service, he shall nevertheless be credited
with a Year of Service for the Plan Year in which he becomes a Participant (or
in which he becomes eligible for re-participation) in the Plan.

 

(c)                Service of Acquired Employers. If an Employee was employed by
an Employer who was acquired by the Company or an affiliate of the Company
(either by acquisition of stock or assets), for purposes of determining the
Employer’s eligibility to participate, the Employee’s last continuous period of
service with such acquired Employer shall be credited only as provided in
Schedule A.

 

2.3              Effect of Break in Service. In the event a Participant, or an
Employee who was not a Participant, incurs a Break in Service, the following
provisions shall apply to his participation in the Plan:

 

(a)                A Participant shall remain a Participant until such time as
he incurs a Break in Service;

 

 

(b)               In the case of an Employee who was a Participant when he
incurred a Break in Service, he will again be considered a Participant on the
date he completes one Hour of Service after the Break in Service; and

 

(c)                If an Employee who is not a Participant has a Break in
Service, he must satisfy the eligibility requirements of Section 2.1 for
participation as if he were a new Employee whose Employment commenced on the
first date that he completed an Hour of Service after the last date of the
computation period in which the Break in Service occurred, provided that his
earlier period of service will be counted if his Break in Service period does
not equal or exceed five years.

 

(d)               Computation Period. The Plan Year shall be the computation
period for purposes of determining whether a Break in Service has occurred. The
first Plan Year computation period for this purpose shall be, in the case of
Employees who were Participants on the Effective Date, the Plan Year commencing
on said date and shall be, in the case of Employees who thereafter become
Participants, the Plan Year which includes the last day of the computation
period during which the Participant satisfies the requirements for participation
as set forth in Section 2.1 above.

 

(e)                Maternity or Paternity Leave. In the case of an Employee who
is absent from Employment on account of (i) the Employee’s pregnancy, (ii) the
birth of a child of the Employee, (iii) the placement of a child with the
Employee in connection with the adoption of the child by the Employee or (iv) an
absence due to the need for caring for such child for a period beginning
immediately following such birth or placement, the Plan shall treat as Hours of
Service, solely for purposes of determining whether a Break in Service has
occurred, the following hours:

 

(i)                 the Hours of Service which otherwise would normally have
been credited to such Employee but for such absence; or

 

(ii)               if the Hours of Service in (i) cannot be determined, then
eight (8) Hours of Service for each day of such absence.

 

However, such Hours of Service credited under this Section 2.3(e) shall not
exceed 501 Hours of Service for each such absence.

 

The Hours of Service credited under this Section 2.3(e) shall be credited in the
Plan Year in which the absence begins only if an Employee would be prevented
from incurring a Break in service in such Plan Year. In any other case, such
hours shall be credited in the immediately following Plan Year. The Employee
shall not be entitled to receive credit for maternity or paternity leave under
this Section 2.3(e) unless such Employee furnishes to the Plan Administrator
within such reasonable time period as the Plan Administrator may establish
evidence that the absence is on account of one of the four (4) reasons specified
in the first paragraph of this Section 2.3(e) and evidence of the duration of
such absence.

 

For purposes of determining whether a Break in Service has occurred for purposes
of participation and vesting with respect to an Employee who returns to work
following an FMLA Leave, for periods on and after August 5, 1993, any period of
unpaid FMLA Leave shall

 

 

not be treated as or counted toward a Break in Service. Unpaid FMLA Leave shall
not be counted in Hours of Service except to the extent Hours of Service are
otherwise credited for any unpaid leave of absence by the Employer.

 

2.4              Inactive Account Status. In the event that any Participant
(excluding an Employee whose employment is terminated) completes more than 500
Hours of Service but less than 1,000 Hours of Service in any Plan Year of his
participation, or if during a Plan Year a Participant has no more than 500 Hours
of Service but is on an Authorized Leave of Absence which would prevent him from
having a Break in Service, his Employer Contribution Account shall be placed on
inactive status. In such case, such Plan Year shall not be considered as a Year
of Service, and the Participant shall not share in the Employer’s contribution
allocations made pursuant to Section 4.3 for any such Plan Year, but he shall
continue to receive income allocations in accordance with Section 4.2. In the
event such Participant has 1,000 Hours of Service in a subsequent Plan Year, his
Employer Contribution Account shall revert to active status for such Plan Year
with full rights and privileges under this Plan restored.

 

2.5              Transfers of Employment Among Employers. Subject to Section
2.3, in computing Service hereunder, the period of an Employee’s employment with
any other member of a group of related employers which includes the Employer
shall be counted for participation and vesting purposes, and a transfer of an
Employee from the employ of one such member to the employ of another member
shall not interrupt Employment. Related employers shall be determined under Code
Section 414(b), (c), (m) and (n) to include members of a controlled group of
corporations, trades or businesses under common control, members of an
affiliated service group, and entities related through the leasing of employees.
In the event any Participant during the course of any Plan Year is employed
simultaneously by more than one such member, he shall be entitled to an
allocation under Section 4.3 hereof by taking into account his aggregate Annual
Compensation from such simultaneous members. Further, if the Employee was
previously Employed in a job classification which precludes such Employee from
participation in the Plan, his Employment in such job classification shall count
as Service hereunder for eligibility purposes.

 

2.6              Election Not to Participate. An Employee who is eligible to
participate in the Plan may elect in a writing directed to the Plan
Administrator not to participate for the Plan Years specified in such writing.
Effective January 1, 2002, an Employee, leased employee, independent contractor,
Beneficiary or other person with any claim to benefits under the Plan who
provides the Plan Administrator with a knowing, voluntary and irrevocable waiver
of benefits under the Plan in a form satisfactory to the Plan Administrator
shall not be eligible to participate in or receive benefits from the Plan and
shall be treated for all purposes as ineligible.

 

2.7Qualified Military Service.

 

(a)                USERRA Provisions. Notwithstanding any provision of this Plan
to the contrary, contributions, benefits, and service credit with respect to
qualified military service shall be provided as required under Code Section
414(u).

 

(b)HEART Provisions.

 

 

(i)                 Death Benefits. In the case of deaths occurring on or after
January 1, 2007, if a Participant dies while performing qualified military
service as defined in Code Section 414(u), the Participant’s surviving spouse or
Beneficiary shall be entitled to any additional benefits as described in Code
Section 401(a)(37) (other than benefit accruals relating to the period of
qualified military service) and which are provided under the Plan as if the
Participant had resumed and then terminated Employment on account of death.

 

(ii)               Continued Benefit Accruals. In the case of deaths or total
and permanent disabilities occurring on or after January 1, 2007, the Plan shall
not provide any continued benefit accruals under the Plan in the case of a
Participant who dies or becomes totally and permanently disabled while
performing qualified military service.

 

(iii)             Differential Wage Payments. For Plan Years beginning on or
after January 1, 2009, if a Participant on qualified military service receives a
differential wage payment (as defined in Code Section 3401(h)(2)), he or she
shall be treated as an Employee of the Employer making the payment, and the
differential wage payment shall be treated as compensation for all purposes of
applying the Code except for purposes of determining contributions and benefits
under the Plan.

 

ARTICLE III CONTRIBUTIONS

3.1              Employer Contributions. For so long as the Plan continues in
effect, the

Employer may make a contribution annually to the Trust for allocation to the
accounts of all Participants or former Participants as provided in Section
4.3(a). The Employer’s contribution shall be made in (i) cash, (ii) property
acceptable to the Trustee and approved by the Plan Administrator, or (iii)
Employer Stock (as defined herein), or any combination of the foregoing. The
amount of each such contribution to the Trust shall be determined by the Board
of Directors of the Employer, taking into consideration the then prevailing
financial conditions and fiscal requirements of the Employer and such other
factors as the Board of Directors may deem pertinent and applicable under the
circumstances. In no event shall the annual contribution be less than an amount
necessary, when added to other available funds held by the Plan, to pay the
current amounts due (if any) under any loans or purchase money obligations
incurred by the Plan for the purpose of purchasing shares of Employer Stock. The
contributions by the Employer shall be credited to the Employer Contribution
Accounts of Participants in accordance with Article IV. The Employer shall pay
to the Trustee its contribution for each Plan Year not later than the close of
such Plan Year or within such other period thereafter as is described in Code
Section 404(a)(6).

 

In no event shall the contribution by the Employer be greater than the amount
deductible by the Employer for federal income tax purposes for the taxable year
with respect to which the same is made, plus such additional amount as may be
deductible by reason of a deduction carry forward from a prior year or years
when less that the maximum deductible amount was actually contributed, except in
anticipation of a future contribution of less than the maximum amount deductible
with respect to such future year and the carry-forward to such future year of
the

 

 

current excess contribution for deduction purposes under applicable statutes and
regulations. The contribution provisions of Code Section 404(a)(9) shall apply
to the Plan and, in accordance with such provisions, additional contributions
may be made to the Plan for the purposes specified in such provisions.

 

No contributions by Participants shall be permitted under this Plan.

 

3.2              Fund for Exclusive Benefit of Participants. All assets of the
Trust Fund shall be held hereunder for the exclusive benefit of the Participants
and their Beneficiaries for the purpose of distributing to such Participants and
Beneficiaries the corpus and income of the Trust Fund in accordance with the
provisions of Article V hereof. No part of the Trust Fund corpus or income shall
be used for or diverted to purposes other than for the exclusive benefit of
Participants and Beneficiaries under the Plan, whether by operation of law or
natural termination of contracts, by power of revocation or amendment, by the
happening of a contingency, by collateral arrangement or by any other means;
provided that the Employer hereby reserves the right to amend or revoke the Plan
at any time as provided in Articles IX and X hereof.

 

To the extent permitted by the Code and applicable rules and regulations
thereunder and notwithstanding anything herein to the contrary, upon the
Employer’s request, a contribution which was made by a mistake of fact, or
conditioned upon the initial qualification of the Plan or upon the deductibility
of the contribution under Code Section 404, shall be returned to the Employer
within one year after the payment of the contributions, the denial of the
qualified status of the Plan or the disallowance of the deduction for such
contribution (to the extent disallowed), whichever is applicable.

 

3.3              Special Limitation on Allocations for Plan Years to Which Code
Section 415(c)(6) Applies. For any Plan Year to which the special limitation of
Code Section 415(c)(6) shall otherwise apply, no more than one-third (1/3) of
the Employer contributions for the Plan Year shall be allocated to the accounts
of Highly Compensated Employees (within the meaning of Code Section 414(q)).

 

ARTICLE IV

INTERESTS OF PARTICIPANTS

4.1              Accounts of Participants. The Trustee shall maintain an
Employer Contribution

Account for each Participant to which contributions made under the Plan shall be
credited and a Non-Employer Stock Account for each Participant who tenders,
exchanges or otherwise sells Employer Stock pursuant to Section 5.16. The
Participant’s Employer Contribution Account may, if necessary in the view of the
Trustee, be subdivided into subaccounts to reflect allocations of Employer Stock
and allocations of non-Employer Stock assets (“Other Assets”) in each
Participant’s Employer Contribution Account. The Participant’s Non-Employer
Stock Account may also be divided into subaccounts as deemed advisable by the
Trustee.

 

 

4.2              Allocation of Shares of Employer Stock, Income, Expense,
Fluctuations in Asset Value, Etc.

 

(a)                In General. As of the close of business on each Annual
Valuation Date, the Trustee shall determine, in such reasonable ways and from
such information as it may deem appropriate, the fair market value of the Trust
Fund. In making this determination, the value of Employer Stock shall be its
fair market value on such Annual Valuation Date as determined as the closing
price on the last trading date in the month in which the Annual Valuation Date
occurs or, if the Employer Stock is not publicly traded, by an independent
appraisal by a person selected by the Plan Administrator and acceptable to the
Trustee who customarily makes such appraisals and meets the requirements of the
regulations under Code Section 170(a)(1). After such determination is made of
the fair market value of the Trust Fund, the Trustee shall make appropriate
adjustments in the Employer Contribution Accounts of all Participants, former
Participants and Beneficiaries who have unpaid balances in their accounts at
such time, by allocating pro rata among such accounts based on the respective
balances thereof as of the next preceding Annual Valuation Date (but after first
reducing each such account balance by any distribution from the account during
the Plan Year then ending), any increases and decreases in the value of the
assets of the Trust Fund and any income (other than contributions), expenses,
and realized gains and losses of the Trust Fund since such preceding Annual
Valuation Date.

 

(b)               Dividends on Employer Stock. To the extent permitted by law,
the dividends (if any) paid during a Plan Year on Employer Stock held by the
Plan (whether allocated or unallocated to Participants’ accounts) may be used to
pay debt on outstanding borrowings, to pay administrative or other Plan
expenses, or, in the discretion of the Plan Administrator, be paid in cash to
Participants in the Plan in accordance with the respective number of shares of
Employer Stock allocable to each Participant’s account as of the Annual
Valuation Date immediately preceding the dividend payment date.

 

If dividends on allocated shares of Employer Stock are used to pay debt on
outstanding borrowings, there shall be transferred from the suspense account of
unallocated shares of Employer Stock to the accounts of Participants to which
the dividends would have been allocated the number of shares of Employer Stock
equal in value to the amount of dividends that would have been allocated to such
accounts, but for the use of such dividends to make payments on borrowings. Such
allocation of shares from the suspense account shall be made in the Plan Year in
which the dividends would otherwise have been allocated. If dividends are paid
to Participants, they shall be paid not later than ninety (90) days after the
close of the Plan Year in which such dividends are paid to the Trust. The
direction by the Plan Administrator, which may be a continuing direction, to pay
such dividends to Participants shall be made in writing to the Trustee by the
Plan Administrator at least thirty (30) days prior to a dividend payment date.
In the event any dividends on Employer Stock are held by the Plan for a two-year
period or longer, they may only be distributed in cash if the provisions of
Article V regarding cash distributions are satisfied.

 

4.3Allocation of Employer Contributions.

 

(a)                In General. For Plan Years beginning on or after January 1,
1997, as of each Annual Valuation Date, and after the allocations provided in
Section 4.2 above, the current

 

 

contribution of the Employer shall be allocated to the Employer Contribution
Accounts of (i) all Participants who are active Employees on the last day of
such Plan Year and who have a Year of Service for such year, and (ii) all
retirees and disabled Participants who have not elected pursuant to Sections
5.1, 5.2 or 5.3 to have their Account Balances determined as of the Annual
Valuation Date next preceding their dates of retirement, in the same proportion
as the Annual Compensation of each such Participant or former Participant bears
to the aggregate Annual Compensation of all such Participants during such year.

 

For Plan Years beginning on or after January 1, 1993 (but before January 1,
1997), as of each Annual Valuation Date, and after the allocations provided in
Section 4.2 above, the current contribution of the Employer shall be allocated
to the Employer Contribution Accounts of (i) all Participants who are active
Employees on the last day of such Plan Year, and

(ii) all Participants who retired or become totally and permanently disabled (as
defined in Section 5.2) during the Plan Year, and who have not elected pursuant
to Sections 5.1, 5.2 or 5.3 to have their Account Balances determined as of the
Annual Valuation Date next preceding their dates of retirement, in the same
proportion as the Annual Compensation of each such Participant or former
Participant bears to the aggregate Annual Compensation of all such Participants
during such year, without regard to the number of Hours of Service credited to
such Participant or former Participant for such Plan Year.

 

For Plan Years ending on and after August 5, 1993, an Employee on FMLA Leave on
the last day of the Plan Year who returns to work following such FMLA Leave
shall be deemed to have been an active Employee on the last day of such Plan
Year.

 

(b)               Allocation of Suspense Account Employer Stock. The Trustee
shall maintain a suspense account to which it shall credit all borrowings
(loans, purchase money obligations, etc.) made by it to purchase Employer Stock
and to which it shall debit all shares of Employer Stock which are purchased
with such borrowed funds. The shares in the suspense account shall not be
allocated except as the shares are released from the suspense account as
provided for in this subsection 4.3(b).

 

Except in circumstances where the Plan Administrator and the Trustee agree on a
different method, a suspense account established hereunder shall be handled as
follows: on each Annual Valuation Date, the Trustee shall release shares of
Employer Stock in the suspense account for allocation to the accounts of
Participants who are eligible to share in the Employer’s contribution for such
year. The number of shares to be released on each Annual Valuation Date shall be
equal to the number of encumbered securities held immediately before release for
the current Plan Year multiplied by a fraction, the numerator of which is the
amount of principal and interest paid for such year and the denominator of which
is the sum of the principal and interest to be paid for such year and for all
future years. If the interest rate is variable, future interest shall be
projected using the interest rate applicable as of the end of the Plan Year.
Such released shares of Employer Stock shall be allocated to the eligible
Participants’ Employer Contribution Accounts in the manner provided in
subsection (a) above.

 

(c)                Earnings on Advance Employer Contributions. Earnings on
advance Employer contributions shall be allocated to eligible Participants’
Employer Contribution Accounts in the manner provided in subsection (a) above.

 

 

4.4Maximum Additions.

 

(a)                The Annual Additions made to the accounts of a Participant
for any Plan Year shall not exceed the lesser of: (i) $52,000 for Plan Years
beginning after December 31, 2013, as adjusted for increases in the
cost-of-living under Section 415(d) of the Code; or (ii) 100% of the
Participant’s annual compensation, within the meaning of Code Section 415(c)(3),
for the Plan Year. The annual compensation limit referred to in item (ii) above
shall not apply to any contribution for medical benefits after separation from
service (within the meaning of Code Section 401(h) or Section 419A(f)(2)) which
is otherwise treated as an annual addition.

 

(b)               For purposes of this Section 4.4, “compensation” means
compensation as defined in Code Section 415(c)(3). Compensation shall include
elective deferrals under Code Sections 402(g), 125 and 457, and elective amounts
that are not includible in the Participant’s gross income by reason of Code
Section 132(f)(4). Effective for Plan Years beginning on or after July 1, 2007,
“compensation” shall be adjusted for regular pay paid after severance from
employment if such amount is paid by the later of within 2 1/2 months after a
severance from employment (within the meaning of Code Section
401(k)(2)(B)(i)(I)) or by the end of the limitation year that includes the date
of such severance from employment and if:

 

(i)                 the payment is regular compensation for services during the
Participant’s regular working hours, or compensation for services outside the
Participant’s regular working hours (such as overtime or shift differential),
commission, bonuses, or other similar payments paid after a Participant’s
severance from employment with the Employer maintaining the Plan (or any other
entity that is treated as the Employer pursuant to Section 414(b), (c), (m), or
(o) of the Code), and

 

(ii)               the payment would have been paid to the Employee if the
Employment had continued.

 

Any other payment of compensation paid after severance of employment that is not
described in this subsection (b) is not considered compensation with the meaning
of Section 415(c)(3) of the Code, even if payment is made within the time period
specified above.

 

(c)Excess Allocations.

 

(i)                 For Limitation Years Prior to July 1, 2007. If such Annual
Additions with respect to any Participant for any Plan Year would exceed the
limitations set forth in this Section 4.4, such excess Annual Additions shall be
treated in accordance with the following as applicable:

 

(1)               First, any Employee contributions made by the Participant
which would constitute excess Annual Additions for the Plan Year shall be
returned to the Participant.

 

(2)               Second, any remaining excess Annual Additions shall be
reallocated to other Participants in accordance with the method of allocation
under Section 4.3 hereof to the extent that such allocations do not cause the

 

 

Annual Additions to any such other Participant’s Account to exceed the
limitations set forth in this Section 4.4.

 

(3)               To the extent that such allocation or reallocation of excess
amounts causes the limitation set forth in this Section 4.4 to be exceeded with
respect to each participant for the Plan Year, then such amounts will be held
unallocated in a suspense account, to be allocated in the next Plan Year(s) in
accordance with Section 4.3 hereof. If such a suspense account is in existence
at any time in accordance with this provision, all amounts in such suspense
account must be allocated before any Employer contributions and Employee
contribution which would constitute such Annual Additions may be made to the
Plan. Investment gains and losses and other income shall not be allocated to
such suspense account. Upon termination of the Plan, any amount remaining in
such suspense account which is unallowable shall revert to the Employer.

 

(ii)               For Limitation Years Beginning On or After July 1, 2007. If
such Annual Additions with respect to any Participant for any Plan Year would
exceed the limitations set forth in this Section 4.4, such excess Annual
Additions shall be treated in accordance with the final regulations relating to
Code Section 415 that were made effective July 1, 2007. Such final regulations
do not include the correction methods for excess annual additions that were
previously in Section 1.415-6(b)(6) of the 1981 Income Tax Regulations. The
Committee is permitted to implement corrections using these methods; provided,
the Plan satisfies the eligibility requirements for self-correction under the
Employee Plans Compliance Resolution System pursuant to Rev. Proc. 2006-27, as
amended and modified by the Internal Revenue Service from time to time.

 

(d)               For purposes of this Section 4.4, the following definitions
and rules of interpretation shall apply:

 

(i)                 The “Annual Addition” of a Participant means amounts treated
as Employer contributions, plus the Participant’s contributions (if any). With
respect to defined contribution plans under which forfeitures can occur, Annual
Additions shall also include any forfeitures allocable during the Plan Year.
Further, amounts allocated to an individual medical benefit account, as defined
in Code Section 415(1)(2), which is part of a defined benefit plan maintained by
the Employer shall be treated as Annual Additions to a contribution plan. In no
event shall this be construed as applying the limitations of Code Section
415(c)(1)(B) to individual medical accounts or post-retirement medical benefits.
Rollover contributions are also not treated as Annual Additions. For purposes of
clarity, restorative payments allocated to a Participant’s Account Balance
result from actions (or a failure to act) by a fiduciary for which there is a
reasonable risk of liability under Title I of ERISA or under other applicable
federal or state law, where similarly situated Participants are similarly
treated, shall not constitute an Annual Addition.

 

(ii)               “Dollar Limitation” means the limitation provided in Code
Section 415(c)(1)(A) (adjusted in accordance with regulations of the Secretary
of the Treasury) as in effect for the particular Plan Year.

 

 

(iii)             For purposes of computing the maximum allocation under Section
4.4(a), all defined contribution plans (whether or not terminated) of the
Employer shall be treated as one defined contribution plan.

 

(iv)             When the term Employer is used in this Section, it shall mean
the Employer and any other corporation or division which is a member of a
controlled group of corporations (within the meaning of Code Section 414(b), as
modified by Code Section 415(h)) of which the Employer is also a member.

 

(e)                In addition to other limitations set forth in the Plan and
notwithstanding any other provision of the Plan, the Annual Additions under the
Plan (and all other defined contribution plans required to be aggregated with
this Plan under Code Section 415) shall not increase to an amount in excess of
the amount permitted (when considered with all other aggregated plans of the
Employer) under Code Section 415.

 

(f)                If no more than one-third of the Employer contributions for a
Plan Year are allocated to the accounts of highly compensated employees (as
defined in Code Section 414(q)), then, for purposes of determining allocations
to Participant accounts under this Section 4.4, Employer contributions which are
deductible under Code Section 404(a)(9)(B) and charged against Participant
accounts shall not be included, in accordance with Code Section 415(c)(6).

 

4.5Directed Investments By Eligible Participants.

 

(a)                In General. Each Eligible Participant shall, during any
Qualified Election Period, be permitted to direct the investment of his Employer
Contribution Account in accordance with the provisions of this Section 4.5. Each
Eligible Participant may elect, in a writing delivered to the Plan Administrator
within ninety (90) days after the close of each Plan Year in the Qualified
Election Period, to direct the investment of twenty-five percent (25%) of such
Participant’s Account Balance in the Plan attributable to Employer Stock
contributed to or acquired by the Plan after December 31, 1986, determined as of
the Annual Valuation Date for the Plan Year preceding the Plan Year in which
such election is made (to the extent such portion exceeds the amount to which a
prior election under this Section 4.5 applies); provided, however, that in the
case of the election year in which the Participant is permitted to make his last
such election, fifty percent (50%) shall be substituted for twenty-five percent
(25%) in applying this Section 4.5. Any Employer Stock diversified under this
Section 4.5 shall be valued based on the closing sale price of the Employer
Stock as of the last trading day of the calendar month immediately preceding the
month in which the diversification takes place.

 

For purposes of this Section 4.5, a Participant’s Account Balance at the end of
any Plan Year shall be deemed not to include any amounts allocated to a
Participant’s Account or contributed to the Plan after the end of such Plan
Year, even if allocated as of the end of such Plan Year. The Plan shall offer at
least three (3) investment options for Eligible Participants which are
permissible under regulations issued under the Code. Any investment or
reinvestment made pursuant to this Section 4.5 shall be made within a reasonable
time after the Participant’s written election is delivered to the Plan
Administrator, but in any event within ninety (90) days of the 90-day period set
forth in Section 4.5(a). No fiduciary of the Plan shall have any liability

 

 

for investments and reinvestments made under this Section 4.5 pursuant to the
direction of an Eligible Participant. The Account Balance of an Eligible
Participant who directs the investment of a portion of his Account Balance shall
be charged with all costs and expenses of such investment or reinvestment or of
any other transaction hereunder at the request of the Participant, as well as
all income, gains, losses, etc. attributable to such investment or reinvestment.

 

(b)               Alternative To Directed Investments. In lieu of permitting
directed investments by Eligible Participants as provided in subsection (a), the
Company may determine and direct that the portion of such Eligible Participant’s
Account Balance which is actually directed for investment by such Participant be
(i) distributed to such Participant, or (ii) transferred to another qualified
plan of the Employer which accepts such transfers, provided that such plan
permits employee-directed investment and does not invest in Employer Stock to a
substantial degree. Such distribution or transfer shall be made within ninety
(90) days of the 90- day period set forth in Section 4.5(a) during which such
Participant directed such investment.

 

4.6Investment of Non-Employer Stock Accounts.

 

(a)                Non-Employer Stock Accounts. The ESOP Committee may designate
that all or a portion of the Non-Employer Stock Accounts be invested in a
collective trust fund or as otherwise permitted in Section 8.2. If permitted on
a nondiscriminatory basis by the ESOP Committee, all or a portion of the amounts
in a Participant’s Non-Employer Stock Account (if any) shall be subject to the
investment direction of the Participant in accordance with the provisions of
subsection (b). The amount to be invested at the direction of the Participant is
referred to as the “Participant Directed Amount.”

 

(b)               Investment Direction. Any direction by a Participant of the
investment of the amounts credited to him under the Plan, as described in
Section 4.6(a), shall be made in accordance with this subsection.

 

(i)                 A Participant shall direct the investment, or change the
direction of the investment, of his Participant Directed Amount by delivering to
the Plan Administrator a statement on such form, or by following such other
procedure, as may be prescribed by the Plan Administrator, directing the
investment of his Participant Directed Amount into any or all of the separate
investment options selected by the ESOP Committee and offered under the Plan.
Such statement must be submitted within a stated period of time prior to the
date for which it is to be effective as designated by the Plan Administrator.
The Plan Administrator may prescribe different periods of time for the initial
direction of the Participant Directed Amount and for subsequent changes of
direction. A Participant shall be given the opportunity to change the investment
direction of his Participant Directed Amounts pursuant to the uniform and
nondiscriminatory procedures established by the Plan Administrator. Any
Participant direction shall remain in effect until superseded by a subsequent
direction, or until the complete distribution of a Participant’s Non-Employer
Stock Account.

 

(ii)               If individual direction is permitted, the Trustee shall use
its best efforts to ensure that each Participant is provided such information
and rights to exercise control over his Non-Employer Stock Account as required
to satisfy all of the conditions

 

 

to make the Non-Employer Securities Portion of the Plan an “ERISA Section 404(c)
plan” (within the meaning of the ERISA 404(c) regulations) and to make each
election by a Participant subject to the relief provided under ERISA 404(c). The
Participant will have the sole responsibility for the investment of his
Participant Directed Amount among the available investment options and, to the
extent permitted by law, no Fiduciary or other person will have any liability
for any loss or diminution in value resulting from Participant’s exercise of
such investment responsibility. The investment options may be changed,
eliminated, or modified from time to time by the ESOP Committee.”

 

4.7              Code Section 1042 Transactions. Notwithstanding anything to the
contrary contained herein, the provisions of this Section 4.7 shall apply if the
Plan acquires Employer Stock in a sale to which Code Section 1042 applies. In
such event, no allocation of “Code Section 1042 Assets” shall be made, directly
or indirectly, under the Plan or any other plan which is qualified under Code
Section 401(a) and which is maintained by the Employer, to any “Disqualified
Participant” for the “Applicable Period.” For purposes of this Section 4.7:

 

(a)                “Code Section 1042 Assets” shall mean assets of the Plan
attributable to (or allocable in lieu of) shares of Employer Stock acquired in a
sale to which Code Section1042 applies.

 

(b)“Disqualified Participant” shall mean:

 

(i)                 the seller of such Employer Stock;

 

(ii)any individual who is related (within the meaning of Code

§267(b)) to such seller; or

 

(iii)             any person who owns (after application of Code Section 318(a),
as applied without regard to the employee trust exception of Code Section
318(a)(2)(B)(i)), more than twenty-five percent (25%) of the outstanding portion
of (1) any class of, or (2) the total value of, stock of the Company or any
member of its controlled group of corporations (within the meaning of Code
§409(l)(4)).

 

(c)“Applicable Period” shall mean:

 

(i)                 with respect to the individuals described in clauses (b)(i)
and (b)(ii) hereof, the period beginning on the date of such sale and ending on
the later of (1) the date which is ten (10) years after the date of such sale,
or (2) the date of the allocation under the Plan that is attributable to the
final payment on any loan, the proceeds of which are used to acquire such
Employer Stock;

 

(ii)               with respect to an individual described in clause (b)(iii)
hereof who met the requirements of such clause at any time during the one year
period ending on the date of such sale, all periods during which the Plan is in
existence; and

 

(iii)             with respect to an individual described in clause (b)(iii)
hereof (but not in clause (c)(ii) hereof) who meets the requirements of such
clause on a date as of which Code §1042 Assets are allocated, the date of such
allocation.

 

 

ARTICLE V BENEFITS

5.1              Normal Retirement Benefits. A Participant retiring under the
Plan at his Normal

Retirement Date shall be entitled to receive the entire amount of his Account
Balance in the Plan determined, with respect to the ESOP Account, as of the
Annual Valuation Date immediately preceding the payment of such Account,
provided that the Employer Stock allocated to his Account shall be valued based
on the closing sales price of the Employer Stock as of the last trading day of
the calendar month immediately preceding the month in which payment commences
and, with respect to the Non-Employer Securities Portion of the Plan, as of the
Valuation Date coincident with or next preceding the date payment commences. The
manner of payment of benefits distributed pursuant to this Section 5.1 shall be
determined under the provisions of Section 5.6.

 

5.2              Disability Benefits. In the event a Participant shall become
totally and permanently disabled (as defined below), he shall be entitled to
retire under the Plan for disability and to receive the entire amount of his
Account Balance in the Plan, with respect to the ESOP Account, as of the Annual
Valuation Date immediately preceding the payment of such Account, provided that
the Employer Stock allocated to his Account shall be valued based on the closing
sales price of the Employer Stock as of the last trading day of the calendar
month immediately preceding the month in which payment commences and, with
respect to the Non- Employer Securities Portion of the Plan, determined as of
the Valuation Date coincident with or next preceding the date payment commences.
Benefits pursuant to this Section 5.2 shall be distributed as indemnification
against the Participant’s injury or illness, the manner of the payment of which
shall be determined as provided in Section 5.6. A Participant shall be
considered to be totally and permanently disabled if he is eligible for benefits
under the Employer’s long-term disability plan.

 

5.3              Postponed Retirement. If required by law and for purposes of
this Plan only, an Employee may remain in the service of the Employer after his
Normal Retirement Date. In the event a Participant remains so employed after his
Normal Retirement Date, he shall continue to be a Participant just as if he had
not yet reached his Normal Retirement Date. When such a Participant actually
retires, he shall be entitled to receive the entire amount of his Account
Balance in the Plan determined, with respect to the ESOP Account, as of the
Annual Valuation Date immediately preceding the payment of such Account,
provided that the Employer Stock allocated to his Account shall be valued based
on the closing sales price of the Employer Stock as of the last trading day of
the calendar month immediately preceding the month in which payment commences
and, with respect to the Non-Employer Securities Portion of the Plan, as of the
Valuation Date coincident with or next preceding the date payment commences. The
manner of payment of benefits distributed pursuant to this Section 5.3 shall be
determined as provided in Section 5.6.

 

5.4              Death Benefits. In the event of the death of a Participant
before his retirement hereunder, there shall be payable to his Beneficiary the
entire interest of the Participant in the Plan determined, with respect to the
ESOP Account, as of the Annual Valuation Date immediately preceding the payment
of such Account, provided that the Employer Stock

 

 

allocated to his Account shall be valued based on the closing sales price of the
Employer Stock as of the last trading day of the calendar month immediately
preceding the month in which payment commences and, with respect to the
Non-Employer Securities Portion of the Plan, as of the Valuation Date coincident
with or next preceding the date payment commences.

 

5.5Benefits on Termination of Employment.

 

(a)                Benefits Payable Upon Termination of Employment. If a
Participant’s Service is terminated for any reason other than his retirement,
death or total and permanent disability, his participation in the Plan will
terminate upon the occurrence of a Break in Service. Each Participant shall be
fully vested in his Account Balance. Upon incurring a one year Break in Service,
the Participant may file a written claim for benefits with the Plan
Administrator, on a form provided by the Plan Administrator for that purpose,
requesting distribution of his Account Balance. Notwithstanding the preceding
sentence, effective as of May 1, 1999, if a Participant has attained age 60 and
has completed 20 or more Years of Service as of his termination of Employment,
the Participant’s Account Balance, upon request of the Participant, will be
distributed as soon as administratively practicable following Participant’s
termination of Employment. His Account Balance in the Plan shall be determined,
with respect to the ESOP Account, as of the Annual Valuation Date immediately
preceding the payment of such Account, provided that the Employer Stock
allocated to his Account shall be valued based on the closing sales price of the
Employer Stock as of the last trading day of the calendar month immediately
preceding the month in which payment commences and, with respect to the
Non-Employer Securities Portion of the Plan, as of the Valuation Date coincident
with or next preceding the date payment commences.

 

(b)               Time of Payment. Such amounts shall be payable to a
Participant who terminates Employment, in such manner and over such period of
time as the Participant may determine in accordance with Section 5.6. Pending
commencement of payment thereof, the amount so payable shall be maintained as
provided in Section 5.10 hereof. Such payment shall be made to and accepted by
the Participant in full and final satisfaction and settlement of any and all of
his claims and rights under the Plan and in the Trust Fund.

 

In the event a former Participant entitled to benefits under this Section 5.5
dies before such benefits shall have been paid in full, then the remainder of
his Account Balance shall be payable to his Beneficiary.

 

(c)                Lump Sum Payment of Value of Small Benefits. Notwithstanding
any other provision of the Plan, and irrespective of whether a Participant
elects to defer receipt of his Vested Interest under subsections (a) or (b) of
this Section 5.5, any benefits payable under the Plan may be paid as a lump sum
distribution of the Account Balance of a Participant under the following
circumstances:

 

(i)                 If the Participant’s Account Balance is not in excess of
$5,000, then the Plan Administrator shall direct the payment of such Account
Balance in a lump sum to such Participant or his Beneficiary within an
administratively practicable time after the occurrence of the event which
entitles such Participant to a distribution. In the event of a distribution
under this Section 5.5(c)(i) in excess of $1,000, if the Member

 

 

does not elect to have such distribution paid directly to an Eligible Retirement
Plan specified by the Member in a Direct Rollover in accordance with Section
5.18 or to receive the distribution directly, then the Plan Administrator will
pay the distribution in a Direct Rollover to an Eligible Retirement Plan
designated by the Plan Administrator.

 

(ii)               If the Participant’s Account Balance exceeds $5,000, then
with the written consent of the Participant, the Plan Administrator shall direct
the payment of such Account Balance in a lump sum to such Participant or his
Beneficiary.

 

5.6              Payment of Benefits. The benefits to which a retiring, disabled
or terminated Participant is entitled upon his retirement, disability or other
termination of Employment under Sections 5.1, 5.2, 5.3 or 5.5, as the case may
be, shall be paid as elected by the Participant in one of the ways described in
this Section 5.6. Any such election shall be exercised by such person in writing
filed with the Plan Administrator within the period specified in such Section
5.1, 5.2, 5.3 or 5.5, as the case may be. The available optional modes of
payment of benefits under the Plan are as follows:

 

(a)                distribution in full (lump sum) during any single calendar
year;

 

(b)               annual installments for a period not to exceed fifteen (15)
years or the life expectancy of the Participant or the life expectancy of the
Participant and his spouse, if any; or

 

(c)any combination of the above.

 

If a Participant dies before the commencement of distribution of his benefits,
the Beneficiary may elect any of the alternative forms of payment under (a), (b)
or (c) above which otherwise could have been elected by the Participant;
provided, however, that the Participant’s Account Balance shall be distributed
within five (5) years from the date of the Participant’s death if the
Beneficiary is not an individual or if the Beneficiary is an individual and
elects a lump sum distribution. Provided, further, that any installments shall
begin within one year of the Participant’s death and continue for a period not
exceeding the Beneficiary’s life expectancy if the Beneficiary is an individual
or continue for a period of not more than five (5) years from the date of the
Participant’s death if the Beneficiary is not an individual.

 

If any distribution includes an insurance contract, such insurance contract
shall not permit a form of distribution other than a form permitted under this
Section.

 

Distribution of a Participant’s Account Balance will be made in whole shares of
Employer Stock, cash or a combination of both, as determined by the Plan
Administrator; provided, however, that a Participant (or his Beneficiary) shall
have the right to demand distribution of his Account Balance entirely in whole
shares of Employer Stock, with the value of any fractional shares paid in cash.
Notwithstanding the preceding sentence, if the bylaws or charter of the Employer
restrict the ownership of substantially all outstanding employer securities to
employees or a trust described in Code Section 401(a), distribution of a
Participant’s Account Balance will be made in cash.

 

 

If Employer securities (acquired with the proceeds of an exempt loan) which are
to be distributed under the Plan consist of more than one class, the party
receiving the distribution must receive substantially the same proportion of
each such class.

 

(d)               In the event of death of the Participant, the entire amount of
the Participant’s Account, computed as of the Valuation Date coincident with or
next preceding the date of his death shall be distributed as follows:

 

(i)                 Unless Section 5.6(d)(iii) applies, if the Participant’s
surviving spouse is the Participant’s sole designated Beneficiary, then
distributions to the surviving spouse will begin by December 31 of the calendar
year immediately following the calendar year in which the Participant died, or,
if later, by December 31 of the calendar year in which the Participant would
have attained age 70-1/2.

 

(ii)               Unless Section 5.6(d)(iii) applies, if the Participant’s
surviving spouse is not the Participant’s sole designated Beneficiary, then
distributions to the designated Beneficiary will begin by December 31 of the
calendar year immediately following the calendar year in which the Participant
died.

 

(iii)             If the designated beneficiary has elected to receive a lump
sum distribution, or, if there is no designated Beneficiary as of September 30
of the year following the year of the Participant’s death, the Participant’s
entire interest will be distributed by December 31 of the calendar year
containing the fifth anniversary of the Participant’s death.

 

(iv)             If the Participant’s spouse is the Participant’s sole
designated Beneficiary and the surviving spouse dies after the Participant but
before distribution to the surviving spouse has been made, Section 5.6(d)(i)
will apply as if the surviving spouse were the Participant.

 

For purposes of this Section 5.6, unless Section 5.6(d)(iv) applies,
distribution is considered to be made on the Participant’s required beginning
date within the meaning of Section 5.12(b). If Section 5.6(d)(iv) applies,
distribution is considered to be made on the date distribution is made to the
surviving spouse under Section 5.6(d)(i).

 

5.7              Restrictions on Participants’ Right To Dispose of Employer
Stock; Employer’s and Plan’s Right of First Refusal. Any Employer Stock
distributed under the Plan shall be subject to the following restrictions on its
transfer (if it is not readily tradable on an established market when the right
of first refusal is exercised) and an appropriate legend indicating this
restriction will be placed on each stock certificate:

 

(a)                Any person (the “Seller”, which shall include Participants
and their Beneficiaries) desiring to sell, transfer or assign all or any portion
of the Employer Stock distributed under this Plan shall first have received a
bona fide written offer for the purchase of such stock and shall then offer to
sell the same to the Company and the Plan, pursuant to their right of first
refusal, in the manner hereinafter set forth.

 

 

(b)               The Seller shall deliver to the Trustee and the Company a
notice in writing of his desire to sell or transfer his stock which notice shall
contain a signed copy of said bona fide offer to purchase, stating the price and
other terms and conditions of such offer and the name and address of the
proposed purchaser, along with a written statement of the Seller’s willingness
to sell his stock to the Company or the Plan in preference to the proposed
purchaser. The Trustee and the Company shall have fourteen (14) days from the
receipt of such notice within which to decide whether to purchase all of the
stock being offered and, if so, whether such purchase shall be made by the
Company or by the Plan or a part by each (such electing party, whether the
Company or the Trustee, is hereinafter called the “Purchaser”). If the Purchaser
is to purchase such stock, then it shall deliver to the Seller (within the
fourteen (14) day period provided for above) written notice of acceptance of
such offer designating a closing place and date for the purchase of the Employer
Stock (the “Closing”) which shall not be more than thirty

(30) days after the date of its notice of acceptance to the Seller.

 

(c)                If all of the Participant’s offered Employer Stock is not to
be purchased, then the Seller shall have the right to sell such Employer Stock
to the person making the bona fide offer within 30 days following the day upon
which the Trustee and the Company were required to give notice of their election
to purchase. Any such sale shall be under terms and conditions no less favorable
to the Seller than those presented to the Trustee and the Company. In the event
such stock is not so sold, it shall remain subject to the terms and conditions
of this Section 5.8.

 

(d)               In the event the Purchaser elects to purchase the Seller’s
stock pursuant to the provisions hereof, the Seller shall deliver at the Closing
the certificate(s) representing the shares to be sold, which certificate(s)
shall be duly endorsed for transfer to the Purchaser, and the purchase price and
payment thereof shall be made by the Purchaser in accordance with the terms and
provisions of the sale. The selling price must not be less favorable to the
Seller than the greater of (i) the purchase price and terms offered by the bona
fide purchaser or (ii) the fair market value of the Employer Stock as of the
most recent Annual Valuation Date as described in Section 4.2; provided,
however, in the event the Seller is a “disqualified person” (as defined in Code
Section 4975) the fair market value shall be determined in a manner acceptable
to the Plan Administrator and the Trustee as of the date of the transaction.

 

(e)                Any purported gift, sale, transfer, assignment, mortgage,
pledge or hypothecation of Employer Stock distributed under the Plan by a
Participant or his Beneficiary in violation of this restriction shall be null
and void, and the Company and the Plan shall not recognize such gift, sale,
transfer, assignment, mortgage, pledge or hypothecation as passing any interest
in the stock.

 

(f)                Nothing contained herein shall apply to any sale of Employer
Stock directly to the Company or the Plan other than sales made to the Plan
under the right of first refusal provided for hereunder.

 

5.8Participant’s Right to Put Employer Stock to the Company and the Plan.

 

(a)                General. In the event the Plan acquires Employer Stock in a
leveraged transaction, any Participant (or his Beneficiary) thereafter receiving
a distribution of Employer

 

 

Stock from the Plan at a time when such Employer Stock is not readily tradable
on an established market shall have a “put option” on such shares, giving him
the right to have the Company purchase such shares. The same right shall apply
to any Employer Stock distributed to a Participant (or his Beneficiary) pursuant
to his exercising the right to demand Employer Stock described in Section 5.6.
The put option shall be exercisable during the following two election periods by
giving notice in writing to the Employer:

 

(i)                 the first option period shall be the sixty (60) day period
commencing on the date of distribution of the shares of Employer Stock; and

 

(ii)               the second option period shall be the sixty (60) day period
commencing on the date the fair market value of the Employer Stock is determined
(and the Participant or Beneficiary is notified of such determination) for the
Plan Year next following the Plan Year in which such shares of Employer Stock
are distributed. The Plan may be given the opportunity to purchase shares of
Employer Stock tendered to the Employer under the put option, as described in
subsection (c) hereof. Except to the extent otherwise required by law, the put
option hereunder shall not apply at any time that the Employer Stock is readily
tradable on an established market.

 

(b)               Price and Payment. The price at which the put option shall be
exercisable is the fair market value as of the Annual Valuation Date which
precedes the date the put option is exercised except in the case of a put option
in favor of a “disqualified person” (as defined in Code Section 4975) in which
event the fair market value shall be determined as of the date of the
transaction. Payment for the shares of Employer Stock put to the Employer may be
made in cash or in installments over a period not exceeding five (5) years, at
the election of the Employer. If the purchase price is paid in installments, a
reasonable interest rate and adequate security must be provided. The periodic
payments shall begin within thirty (30) days after the put is exercised.

 

(c)                Right of Plan. The Plan shall have the option by notice in
writing to the Employer to assume the rights and obligations of the Employer
under the put option provided for herein at the time the put option is
exercised. The put option provided for hereunder shall not bind the Plan to
purchase the Employer Stock.

 

(d)               Continuation of Rights. The provisions of this Section 5.8
with respect to any Employer Stock acquired by the Plan in a leveraged
transaction, or which is distributed to Participants (or Beneficiaries) pursuant
to the right described in section 5.6 hereinabove in lieu of the Plan’s right to
distribute Plan benefits in cash, shall be non-terminable and shall continue if
the loan is repaid or if the Plan ceases to be an ESOP, except to the extent
such rights have terminated in accordance with the terms hereof. Except as
otherwise expressly provided in this Plan, any Employer Stock acquired in a
leveraged transaction shall not be subject to any put, call, or other option or
buy-sell or similar arrangement while held by and when distributed from the
Plan, regardless of whether the Plan is then an ESOP. The protections set forth
in the preceding sentence shall be non-terminable.

 

5.9              Securities Laws Restrictions On Resales. To the extent that the
shares of Employer Stock to be acquired by the Plan have not been registered
under either state or federal securities laws, but have been issued and acquired
pursuant to applicable exemptions thereunder,

 

 

any such Employer Stock distributed to Participants in the Plan may only be sold
by the Participant upon registration under such securities laws or pursuant to
an available exemption thereunder. The shares of Employer Stock held and
distributed by the Plan may be appropriately legended to reflect the
restrictions on sale in the securities laws.

 

5.10          Maintenance of Accounts Prior to Payout. Subject to the
limitations set forth in Section 5.5, during such period of time between
termination of a Participant’s Employment as described in Section 5.5 hereof and
the date when he becomes entitled to actual payment of his interest in his
Employer Contribution Account, his Account Balance shall be maintained by the
Trustee in the following manner:

 

(a)                The Trustee shall segregate on his books the Participant’s
Account Balance as of the date of the termination of his Employment, and such
segregated Account Balance shall not thereafter share in any Employer
contributions or amounts otherwise allocated as Employer contributions. The
balance in a segregated account may remain invested as a part of the Trust Fund,
sharing in the net income, net loss, net appreciation and net depreciation of
the Trust Fund, to the same extent as if such accounts had not been segregated,
with the Trustee having the same powers of investment, reinvestment and
commingling as he has for all other assets of the Trust.

 

(b)               In the event that an individual for whom a segregated account
is maintained in accordance with Section 5.10(a) is Reemployed following a Break
in Service, such accounts shall continue to be maintained as separate accounts,
provided, however, the Plan Administrator may integrate such segregated account
with his post Break in Service Employer Contribution Account and thereafter
regard it as a single account for all purposes hereunder.

 

5.11          Present Value of Payments. Any method of payment of benefits shall
result in the present value of payments to be paid to the Participant being
greater than fifty percent (50%) of the present value of the total benefits to
be paid to the Participant and his Beneficiary.

 

5.12Commencement of Payments.

 

(a)                In General. Notwithstanding anything herein to the contrary,
unless a Participant otherwise elects in a writing delivered to the Plan
Administrator, subject, however, to the requirements of Section 5.12(b), benefit
payments hereunder shall commence not later than the earlier of (i) sixty (60)
days after the later of (A) the date on which such Participant reaches his
Normal Retirement Date, (B) the Plan Year in which occurs the tenth anniversary
of the year in which such Participant commenced participation, or (C) the Plan
Year in which such Participant’s Employment with the Employer terminates.

 

(b)               Required Beginning Date. Payments of a Participant’s entire
interest in the Plan shall begin no later than the following date: (i) if the
Participant is a five-percent (5%) owner (within the meaning of Code Section
416(i)(1)), April 1 of the calendar year next following the calendar year in
which the Participant attains age 70-1/2, or (ii) for any other Participant,
April 1 of the calendar year next following the later to occur of his attainment
of age 70-1/2 or his retirement.

 

 

(c)Period of Distribution.

 

(i)                 General. The requirements of this Section 5.12(c) will take
precedence over any inconsistent provisions of the Plan. All distributions
required under this Section 5.12(c) will be determined and made in accordance
with the Treasury regulations under Code Section 401(a)(9).

 

(ii)               Required Beginning Date. The Participant’s entire interest
will be distributed, or begin to be distributed, to the Participant no later
than the Participant’s required beginning date, determined pursuant to Section
5.12(b).

 

(iii)             Forms of Distribution. Unless the Participant’s entire
interest is distributed in a single lump sum on or before the required beginning
date, as of the first distribution calendar year distributions will be made in
accordance with subsections (iv), (v), (vi) and (vii) of this Section 5.12(c).

 

(iv)             Amount of Required Minimum Distribution For Each Distribution
Calendar Year. During the Participant’s lifetime, the minimum amount that will
be distributed for each distribution calendar year is the lesser of:

 

(1)               the quotient obtained by dividing the Participant’s Account
balance by the distribution period in the Uniform Lifetime Table set forth in
Section 1.401(a)(9)-9 of the Treasury regulations, using the Participant’s age
as of the Participant’s birthday in the distribution calendar year; or

 

(2)               if the Participant’s sole designated Beneficiary for the
distribution calendar year is the Participant’s spouse, the quotient obtained by
dividing the Participant’s Account balance by the number in the Joint and Last
Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations,
using the Participant’s and spouse’s attained ages as of the Participant’s and
spouse’s birthdays in the distribution calendar year.

 

(v)               Lifetime Required Minimum Distributions Continue Through Year
of Participant’s Death. Required minimum distributions will be determined under
this Section 5.12(c) beginning with the first distribution calendar year and up
to and including the distribution calendar year that includes the Participant’s
date of death.

 

(vi)Death on or After Date Distributions Begin.

 

(1)               Participant Survived by Designated Beneficiary. If the
Participant dies on or after the date distributions begin and there is a
designated Beneficiary, the minimum amount that will be distributed for each
distribution calendar year after the year of the Participant’s death is the
quotient obtained by dividing the Participant’s Account balance by the longer of
the remaining life expectancy of the Participant or the remaining life
expectancy of the Participant’s designated Beneficiary, determined as follows:

 

 

(A)             The Participant’s remaining life expectancy is calculated using
the age of the Participant in the year of death, reduced by one for each
subsequent year.

 

(B)              If the Participant’s surviving spouse is the Participant’s sole
designated Beneficiary, the remaining life expectancy of the surviving spouse is
calculated for each distribution calendar year after the year of the
Participant’s death using the surviving spouse’s age as of the spouse’s birthday
in that year. For distribution calendar years after the year of the surviving
spouse’s death, the remaining life expectancy of the surviving spouse is
calculated using the age of the surviving spouse as of the spouse’s birthday in
the calendar year of the spouse’s death, reduced by one for each subsequent
calendar year.

 

(C)              If the Participant’s surviving spouse is not the Participant’s
sole designated Beneficiary, the designated Beneficiary’s remaining life
expectancy is calculated using the age of the Beneficiary in the year following
the year of the Participant’s death, reduced by one for each subsequent year.

 

(2)               No Designated Beneficiary. If the Participant dies on or after
the date distributions begin and there is no designated Beneficiary as of
September 30 of the year after the year of the Participant’s death, the minimum
amount that will be distributed for each distribution calendar year after the
year of the Participant’s death is the quotient obtained by dividing the
Participant’s Account balance by the Participant’s remaining life expectancy
calculated using the age of the Participant in the year of death, reduced by one
for each subsequent year.

 

(vii)Death Before Date Distributions Begin.

 

(1)               Participant Survived by Designated Beneficiary. If the
Participant dies before the date distributions begin and there is a designated
Beneficiary, the minimum amount that will be distributed for each distribution
calendar year after the year of the Participant’s death is the quotient obtained
by dividing the Participant’s Account balance by the remaining life expectancy
of the Participant’s designated Beneficiary, determined as provided in Section
5.12(c)(vi).

 

(2)               No Designated Beneficiary. If the Participant dies before the
date distributions begin and there is no designated Beneficiary as of September
30 of the year following the year of the Participant’s death, distribution of
the Participant’s entire interest will be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant’s death.

 

(3)               Death of Surviving Spouse Before Distributions to Surviving
Spouse Are Required to Begin. If the Participant dies before the date

 

 

distributions begin, the Participant’s surviving spouse is the Participant’s
sole designated Beneficiary, and the surviving spouse dies before distributions
are required to begin to the surviving spouse under Section 5.6(d), this Section
5.12(c)(vii) will apply as if the surviving spouse were the Participant.

 

(viii)         Definitions. The following definitions shall apply for purposes
of Sections 5.6 and 5.12:

 

(1)               Designated Beneficiary. The individual who is designated as
the Beneficiary under Article VI of the Plan and is the designated Beneficiary
under Code Section 401(a)(9) and Section 1.401(a)(9)-1, Q&A-4 of the Treasury
regulations.

 

(2)               Distribution calendar year. A calendar year for which a
minimum distribution is required. For distributions beginning before the
Participant’s death, the first distribution calendar year is the calendar year
immediately preceding the calendar year which contains the Participant’s
required beginning date. For distributions beginning after the Participant’s
death, the first distribution calendar year is the calendar year in which
distributions are required to begin under Section 5.6(d). The required minimum
distribution for the Participant’s first distribution calendar year will be made
on or before the Participant’s required beginning date. The required minimum
distribution for other distribution calendar years, including the required
minimum distribution for the distribution calendar year in which the
Participant’s required beginning date occurs, will be made on or before December
31 of that distribution calendar year.

 

(3)               Life expectancy. Life expectancy as computed by use of the
Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations.

 

(4)               Participant’s Account balance. The Account balance as of the
last valuation date in the calendar year immediately preceding the distribution
calendar year (valuation calendar year) increased by the amount of any
contributions made and allocated or forfeitures allocated to the Account balance
as of dates in the valuation calendar year after the valuation date and
decreased by distributions made in the valuation calendar year after the
valuation date. The Account balance for the valuation calendar year includes any
amounts rolled over or transferred to the Plan either in the valuation calendar
year or in the distribution calendar year if distributed or transferred to the
Plan either in the valuation calendar year or in the distribution calendar year
if distributed or transferred in the valuation calendar year.

 

(ix)             Required Minimum Distributions for 2009. Notwithstanding
anything contained herein to the contrary, pursuant to Code Section
401(a)(9)(H), distributions required by this Section 5.12 were made for the 2009
Plan Year. Furthermore, no portion of a distribution required under this Section
512 made to a Participant or Designated beneficiary with respect to the 2009
Plan Year was treated as

 

 

an Eligible Rollover Distribution for purposes of the Direct Rollover option
described in Section 5.18.

 

5.13          Error in Participant’s Account. When an error or omission is
discovered in the account of a Participant, the Trustee shall, upon direction by
the Plan Administrator make such equitable adjustments as the Plan Administrator
deems necessary as of the Plan Year in which the error or omission is
discovered.

 

5.14          No Other Benefits or Withdrawals. Except as expressly provided for
in this Article V or Section 4.5(b), for so long as this Plan continues in
effect no individual, whether a Participant, former Participant, Beneficiary or
otherwise, shall be entitled to any payment or withdrawal of funds from the
Trust Fund.

 

5.15Voting Rights.

 

(a)                Voting of Allocated Shares. Except as provided in subsection
(d) below, each Participant shall have the right to direct the Trustee
confidentially with respect to the voting of Employer Stock held in the Trust
and allocated to the Participant’s Employer Contribution Account. The
Participant shall convey his instructions with respect to such shares in
confidence in writing to the ESOP Committee, which shall then inform the Trustee
of such voting instructions. In the absence of an ESOP Committee, such
instructions shall be communicated by the Participants directly to the Trustee.
The instructions so received by the ESOP Committee and Trustee shall be held by
the ESOP Committee and Trustee in confidence and shall not be divulged or
released to any person. Upon timely receipt of such instructions, the Trustee
shall on each matter vote as instructed the number of shares of Employer Stock
allocated to such Participant’s Employer Contribution Account. To the extent
permitted by law, any shares with respect to which the Participant does not give
directions for voting in a timely manner shall be voted by the Trustee as
directed by the ESOP Committee. For voting purposes, allocated fractional shares
of Employer Stock shall be aggregated into whole shares of Employer Stock and
voted by the Trustee to the extent possible to reflect the voting instructions
of Participants with respect to whole shares of Employer Stock allocated to
their Employer Contribution Accounts.

 

(b)               Voting of Unallocated Shares. Except as provided in (d) below,
shares of Employer Stock held by the Trustee and not yet allocated to
Participants’ Employer Contribution Accounts shall be voted by the Trustee, in
the same proportion as Participants direct the voting of allocated shares of
Employer Stock.

 

(c)                Obligations of the Company. Except as provided in (d) below,
the Company shall in an appropriate time and manner furnish the Trustee and
Participants with proxy materials, notices and information statements when
voting rights are to be exercised. In general, the materials to be furnished
Participants shall be the same as those provided to security holders.

 

(d)               Voting Non-Registration Type Stock. In the event the Employer
Stock is not at the time a registration-type class of securities as defined in
Code Section 409(e), then except as provided in the following sentence, the
Employer Stock held in the Trust shall be voted

 

 

in the manner determined by the ESOP Committee and communicated in writing to
the Trustee. With respect to any matter which involves the voting of such shares
with respect to the approval or disapproval of any corporate merger,
consolidation, recapitalization, reclassification, liquidation, dissolution,
sale of substantially all the assets or such similar transaction as prescribed
in regulations, each Participant shall be entitled to direct the Trustee as to
the exercise of any voting rights attributable to shares of Employer Stock
allocated to his Employer Contribution Account at such date. On all other
matters, the ESOP Committee and the Trustee need not solicit voting instructions
from Participants.

 

5.16Tender or Exchange Offer for Employer Stock.

 

(a)                Tender Offer. The provisions of this Section shall apply in
the event any person, including the Company, either alone or in conjunction with
others, makes a tender offer, or exchange offer, or otherwise offers to purchase
or solicits an offer to sell to such person one percent or more of the
outstanding shares of Employer Stock (herein referred to as a “Tender Offer”).

 

(b)               Tender or Exchange of Allocated Shares. Notwithstanding the
other provisions of the Plan, in the event of a Tender Offer at a time when such
Employer Stock is readily tradable on an established market, each current or
former Participant (or after the death of a former Participant, his Beneficiary)
who has shares of Employer Stock allocated to his Employer Contribution Account
(an “Affected Participant”) shall be given the opportunity to direct the Trustee
confidentially regarding whether to tender, exchange or otherwise sell whole
shares of Employer Stock allocated to his Employer Contribution Account in
accordance with the provisions, conditions and terms of such Tender Offer and
the provisions of this Section. If Affected Participants elect to tender,
exchange or sell a greater number of shares of Employer Stock than the total
number of shares of Employer Stock offered in such Tender Offer (referred to as
an “Oversubscribed Offer”), the Trustee shall reduce, on a pro rata basis, the
number of shares of Employer Stock that each Affected Participant agreed to
tender or exchange except that Trustee may provide that the prorata reduction
will not apply, and will be determined without regard to, Affected Participants
whose allocated shares of Employer Stock do not exceed a prescribed amount. Each
direction to tender, exchange or otherwise sell shares of Employer Stock shall
be deemed an agreement to have such number of shares reduced on a pro rata basis
in the event of an Oversubscribed Offer, to the extent determined by the
Trustee.

 

(c)                Required Forms and Instructions. As promptly as practicable
after a Tender Offer is made, the Trustee shall send to all Affected
Participants such materials and forms for responding as are appropriate to
determine the direction of each Affected Participant. Any form for responding
shall prominently note that failure by an Affected Participant to return such
form within a specified reasonable period of time shall be deemed a direction to
the Trustee not to tender, exchange or otherwise sell the whole shares of
Employer Stock allocated to the Employer Contribution Account of such Affected
Participant. The Participant shall convey his instructions in confidence in
writing to the ESOP Committee, which shall then convey such instructions to the
Trustee. In the absence of an ESOP Committee, such instructions shall be
conveyed directly to the Trustee. In carrying out the steps necessary to
determine the directions of Affected Participants under this Section, the
Trustee shall adopt such means as it deems appropriate to provide Affected
Participants with the opportunity to indicate their directions in a

 

 

confidential manner, i.e., without the disclosure of any Affected Participant’s
individual decision to the public or the Company.

 

(d)               Disposition of Allocated Employer Stock. As promptly as
practicable after receiving an Affected Participant’s response form which
directs it to tender, exchange or otherwise sell his whole shares of allocated
Employer Stock, the Trustee shall carry out the tender, exchange or sale of such
shares; provided, however, that the Trustee shall have the right to change or to
modify its actions hereunder to comply with the terms of any valid order of a
court of competent jurisdiction directing it to take certain actions
inconsistent with the requirements of this Section. The proceeds of a
disposition directed by an Affected Participant shall be allocated to the
Non-Employer Stock Account of each such Affected Participant.

 

(e)                Fractional Shares. The Trustee shall determine the total
number of whole shares it was directed to tender, exchange or sell, and the
total number of whole shares it was directed not to tender, exchange or sell
(either expressly or by failure to timely respond). If the majority of the
allocated whole shares of Employer Stock were directed to be tendered, exchanged
or sold, then the Trustee shall also tender, exchange, or sell, as promptly as
practicable, any allocated fractional shares which are held in the Trust.
However, if the majority of the allocated whole shares of Employer Stock were
not directed to be tendered, exchanged or sold, the Trustee shall not tender,
exchange or sell any such allocated fractional shares unless otherwise directed
by the ESOP Committee.

 

(f)                Unallocated Shares. In the case of shares of Employer Stock
that have not been allocated to the Employer Contribution Accounts, the ESOP
Committee shall convey tender or exchange instructions to the Trustee with
respect to such unallocated shares, which instructions shall direct that the
Trustee tender or exchange such shares in the same proportion as Participants
direct the tender or exchange of shares of Employer Stock allocated to their
Employer Contribution Accounts, treating for this purpose the failure of a
Participant to instruct or validly instruct the ESOP Committee or Trustee as a
decision not to tender or exchange.

 

5.17          Appraisal of Employer Stock. In the event that any class or series
of Employer Stock held by the Plan is not readily tradable on an established
market, all valuations, including the annual valuation, of Employer Stock must
be performed by an independent appraiser meeting the requirements of the
regulations under Code Section 170(a)(1).

 

5.18Direct Transfer of Eligible Rollover Distributions.

 

(a)                For the purposes of this Section 5.18, the following
definitions shall apply:

 

(i)                 “Eligible Rollover Distribution” shall mean any distribution
of all or any portion of the balance to the credit of the Distributee, except
that an Eligible Rollover Distribution shall not include: any distribution that
is one of a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the Distributee or the
joint lives (or joint life expectancies) of the Distributee and the
Distributee’s designated Beneficiary, or for a specified period of ten years or
more; any distribution to the extent such distribution is required under Code
Section 401(a)(9); distribution described in Code Section 401(k)(2)(B)(i)(IV);
or the

 

 

portion of any Distribution that is not includable in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities). For taxable years beginning after December 31, 2006, a
Participant may elect to transfer his or her employee after-tax contributions
(if any) by means of a direct rollover to a qualified plan or to a 403(b) plan
that agrees to account separately for amounts so transferred (including interest
thereon), including accounting separately for the portion of such distribution
which is includible in gross income and the portion of such distribution which
is not includible in gross income.

 

(ii)               “Eligible Retirement Plan” shall mean an individual
retirement account described in Code Section 408(a), an individual retirement
annuity described in Code Section 408(b), an annuity plan described in Code
Section 403(a), a qualified trust described in Code Section 401(a), that accepts
the Distributee’s Eligible Rollover Distribution, or an annuity contract
described in Code Section 403(b) and an eligible plan under Code Section 457(b)
which is maintained by a state, political subdivision of a state, or any agency
or instrumentality of a state or political subdivision of a state and which
agrees to separately account for amounts transferred into such plan from the
Plan. The definition of Eligible Retirement Plan shall also apply in the case of
a distribution to a surviving spouse, or to a spouse or former spouse who is the
alternate payee under a qualified domestic relation order, as defined in Code
Section 414(p). However, in the case of an Eligible Rollover Distribution to the
surviving spouse, an Eligible Retirement Plan shall mean only an individual
retirement account or individual retirement annuity. For distributions made
after December 31, 2007, Eligible Retirement Plan shall also include a Roth IRA
described in Code Section 408A(b).

 

(iii)             “Distributee” shall mean an Employee or former Employee. In
addition, the Employees or former Employee’s surviving spouse and the Employee’s
or former Employee’s spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Code Section 414(p), are
Distributees with regard to the interest of the spouse or former spouse. Solely
for purposes of the rollover right set forth in this Subsection 5.18(a)(v), a
Distributee shall also include a non-spouse Beneficiary who is a “designated
beneficiary” under Code Section 401(a)(9)(E) and the regulations thereunder.

 

(iv)             “Direct Rollover” shall mean a payment to the Eligible
Retirement Plan specified by the Distributee either by direct transfer from the
Plan, or by delivery of the distribution check by the Distributee, provided such
check is made out in a manner to ensure that it is negotiable only by the
trustee of the Eligible Retirement Plan.

 

(v)               Non-Spouse Beneficiary Rollover Right. For distributions after
December 31, 2009, a non-spouse Beneficiary who is a “designated beneficiary”
under Code Section 401(a)(9)(E) and the regulations thereunder, by a direct
trustee-to trustee transfer (“direct rollover”), may roll over all or any
portion of his or her distribution to an individual retirement account (“IRA”)
the Beneficiary established for purposes of receiving the distribution. In order
to be able to roll over the distribution, the distribution otherwise must
satisfy the definition of an “eligible rollover distribution” under Code Section
401(a)(31).

 

 

(1)               Certain Requirements Not Applicable. Although a non- spouse
Beneficiary may roll over directly a distribution as provided in this Section
5.18, the distribution, if made prior to January 1, 2010, is not subject to the
direct rollover requirements of Code Section 401(a)(31) (including Code Section
401(a)(31)(B)), the notice requirements of Code Section 402(f) or the mandatory
withholding requirements of Code Section 3405(c). If a non-spouse Beneficiary
receives a distribution from the Plan, the distribution is not eligible for a
60-day (non-direct) rollover.

 

(2)               Trust Beneficiary. If the Participant’s named Beneficiary is a
trust, the Plan may make a direct rollover to an IRA on behalf of the trust,
provided the trust satisfies the requirements to be a designated Beneficiary
within the meaning of Code Section 401(a)(9)(E).

 

(3)               Required Minimum Distributions Not Eligible for Rollover. A
non-spouse Beneficiary may not roll over an amount that is a required minimum
distribution, as determined under applicable Treasury Regulations and other
Internal Revenue Service guidance. If the Participant dies before his or her
Required Beginning Date (as defined in Section 5.12(b) and the non-spouse
Beneficiary rolls over to an IRA the maximum amount eligible for rollover, the
Beneficiary may elect to use either the 5-year rule or the life expectancy rule,
pursuant to Treasury Regulations Section 1.401(a)(9)-3, A-4(c), in determining
the required minimum distributions from the IRA that receives the non-spouse
beneficiary’s distribution.

 

(b)               Notwithstanding any provision of the Plan to the contrary, a
Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover as provided in this Section 5.18.

 

5.19          Notice of Right to Defer Distribution. For any distribution notice
issued in Plan Years beginning after December 31, 2006, such notice that is
delivered to a Participant with respect to a distribution will include a
description of a Participant’s right (if any) to defer receipt of a distribution
and will describe the consequences of failing to defer receipt of the
distribution. With respect to any required distribution notice and election form
that is delivered to a Participant before the 90th day after the issuance of
Treasury regulations (unless future guidance requires otherwise), any notice
that is delivered to a Participant with respect to a distribution will include
at a minimum: (a) a description indicating the investment options available
under the Plan (including fees) that will be available if the Participant defers
distribution; and (b) the portion of the summary plan description that contains
any special rules that might materially affect a Participant’s decision to defer

 

ARTICLE VI

DESIGNATION OF BENEFICIARY

Each Employee becoming a Participant hereunder shall designate in writing, in
such form

 

 

and manner as shall be prescribed by such rules and regulations as the Plan
Administrator may promulgate in this connection, a Beneficiary of any interest
under this Trust which may be payable with respect to such Participant in the
event of his death before or after retirement, or after such termination of
Service as may entitle him to a Vested Interest in the Trust Fund, which
designation may include the designation of an alternate Beneficiary. Subject
also to such rules and regulations as the Plan Administrator may promulgate, a
Participant may from time to time change such designation of Beneficiary (or
alternate Beneficiary).

 

In the event benefits become payable upon the death of a Participant and no
Beneficiary has been properly designated as above provided, or if the designated
Beneficiary shall have predeceased him, such benefits shall be payable in full
to the following in the order set out: (1) to the surviving spouse of the
Participant or (2) if the Participant dies without a spouse then living, to the
surviving children of the Participant (per capita) or (3) if none of the
foregoing persons is then living, to the surviving brothers and sisters of the
Participant (per capita) or (4) if none of the foregoing persons is then living,
to the surviving parents of the Participant (per capita) or (5) if none of the
foregoing persons is then living, to the Participant’s estate. The identity of
the Beneficiary of a deceased Participant’s interest shall be determined by the
Plan Administrator after reasonable investigation. The determination of the Plan
Administrator in this connection shall be final and conclusive and both the Plan
Administrator and the Trustee shall be fully protected in paying such benefits
to such deceased Participant’s Beneficiary as so determined, regardless of
whether payments are actually made to a person or persons who actually
constitute beneficiaries of such deceased Participant under the provisions
hereof.

 

Notwithstanding the foregoing provisions, the Participant’s entire interest in
the Plan at his death, if any, shall be paid to such Participant’s surviving
spouse (if such spouse is then living) unless prior to the Participant’s death,
the spouse consents in a writing witnessed by a Plan representative or a notary
public to permit the Participant to designate a person other than the spouse as
the Participant’s Beneficiary, which consent may expressly permit designations
of Beneficiary(ies) by the Participant without any requirement of further
consent by such spouse. This provision shall not apply where it is established
to the satisfaction of the Plan Administrator that such consent cannot be
obtained because there is no spouse, because the spouse cannot be located, or
because of such other circumstances as may be permitted by the regulations.
Neither shall this provision apply unless the spouse and Participant have been
married throughout the one year period ending on the date of the Participant’s
death. The Plan Administrator shall provide to each Participant within a
reasonable time before such Participant is entitled to receive benefits, a
written explanation of the Participant’s spouse’s right to waive the surviving
spouse benefits described in this Article VI.

 

ARTICLE VII ADMINISTRATION

7.1              Allocation of Responsibility Among Fiduciaries for Plan and
Trust

Administration. The Fiduciaries shall have only those specified powers, duties,
responsibilities and obligations as are specifically given them under this Plan
and Trust. In general, the Employer shall have the sole responsibility for
making the contributions provided for under Article III, and the Company shall
have the sole authority to appoint and remove the Trustee, the

 

 

Plan Administrator and any Investment Manager or Managers which it may elect to
provide for managing all or any portion of the Trust, and to amend or terminate,
in whole or in part, this Plan and Trust. The Plan Administrator shall have the
sole responsibility for the administration of the Plan and the Trustee shall
have the sole responsibility for management of the assets held under the Trust
(except where an Investment Manager has been appointed), all as more
specifically provided hereinafter. Each Fiduciary may rely upon any direction,
information or action of another Fiduciary in the exercise of the latter’s
respective powers, duties, responsibilities arid obligations hereunder, as being
proper under this Plan and Trust, and shall not be required to inquire into the
propriety of any such direction, information or action. It is intended that each
Fiduciary shall be responsible for the proper exercise of its own powers,
duties, responsibilities and obligations under this Plan and Trust and shall not
be responsible for any act or failure to act of another Fiduciary. No Fiduciary
guarantees the Trust Fund in any manner against investment loss or depreciation
in asset value.

 

7.2              Appointment of Plan Administrator. The Plan Administrator shall
be the ESOP Committee, or in its absence, the Employer. It is anticipated that
in the absence of the ESOP Committee, the Employer shall delegate its rights,
duties and responsibilities as Plan Administrator to an administrative committee
consisting of one or more persons designated from time to time by the Board of
Directors of the Employer, and the Employer hereby authorizes such delegation.

 

The President of the Employer (or in the event of the President’s inability or
failure to act, any Vice President of such company) shall certify in writing to
the Trustee, as promptly as practicable after any change in the membership of
the ESOP Committee, the names of the persons then serving as members of the
committee. The Trustee shall be entitled to rely on the names so certified as
being the authorized and acting members of the committee until notified of any
change by subsequent certification.

 

The ESOP Committee or any administrative committee may act at a meeting or by
unanimous written consent without a meeting. Such committee shall elect one of
its members as chairman, appoint a secretary, who may or may not be a committee
member, and advise the Trustee of such actions in writing. The secretary shall
keep a record of all meetings and forward all necessary communications to the
Employer or the Trustee. A quorum of the committee shall consist of not less
than two-thirds of the members thereof, and a majority vote of those present
shall control on all matters acted upon at a meeting of the committee. A
dissenting committee member who, within a reasonable time after he has knowledge
of any action or failure to act by the majority, registers his dissent in
writing delivered to the other committee members, the Employer, and the Trustee,
shall not be responsible for any such action or failure to act.

 

7.3              Claims Procedure. The Plan Administrator shall make all
determinations as to the right of any person to eligibility or a benefit under
the Plan. Benefits under this Plan will be paid only if the Plan Administrator
decides in its discretion that the applicant is entitled to them. If a written
request for a Plan benefit by a Participant or Beneficiary is wholly or
partially denied, the Plan Administrator will provide such claimant a
comprehensible written notice setting forth:

 

(i)                 the specific reason or reasons for such denial;

 

 

 

is based;

(ii)specific reference to pertinent Plan provisions on which the denial

 

(iii)             a description of any additional material or information
necessary for the claimant to submit to perfect the claim and an explanation of
why such material or information is necessary;

 

(iv)             a description of the Plan’s claim review procedure. The review
procedure is available upon written request by the claimant to the Plan
Administrator within 60 days after receipt by the claimant of written notice of
the denial of the claim, and includes the right to examine pertinent documents
and submit issues and comments in writing to the Plan Administrator. The
decision on review will be made within 60 days after receipt of the request for
review unless circumstances warrant an extension of time not to exceed an
additional 60 days and shall be in writing and drafted in a manner calculated to
be understood by the claimant, and include specific reasons for the decision
with references to the specific Plan provisions on which the decision is based.

 

7.4              Records and Reports. The Plan Administrator shall exercise such
authority and responsibility as it deems appropriate in order to comply with
ERISA and governmental regulations issued thereunder relating to records of
Participants’ service and Account Balances; notifications to Participants;
annual registration with the Internal Revenue Service; annual reports to the
Department of Labor; and such other documents or reports as may be required by
ERISA. The Employer shall from time to time make available to the Plan
Administrator such information with respect to the Employees, their dates of
employment, their compensation, and other matters as may be necessary or
desirable in connection with the performance by the Plan Administrator of its
duties with respect to the Plan. The Plan Administrator shall, in turn, furnish
to the Trustee such information and such rulings and decisions as the Trustee
may require or may request in connection with the performance of its duties as
Trustee of the Trust Fund hereby created.

 

7.5              Other Plan Administrator Powers and Duties. The Plan
Administrator shall have such duties and powers as may be necessary to discharge
its duties hereunder, including, but not by way of limitation, the provisions of
Section 1.19 and the following:

 

(a)                the sole and exclusive authority to construe and interpret
the Plan, decide all questions of eligibility and determine the amount, manner
and time of payment of any benefits hereunder;

 

(b)               to prescribe procedures to be followed by Participants or
Beneficiaries filing applications for benefits;

 

(c)                to prepare and distribute, in such manner as the Plan
Administrator determines to be appropriate, information explaining the Plan;

 

(d)               to receive from the Employer and from Participants such
information as shall be necessary for the proper administration of the Plan;

 

 

(e)                to furnish the Employer, upon request, such annual reports
with respect to the administration of the Plan as are reasonable and
appropriate;

 

(f)                to receive, review and keep on file (as it deems convenient
or proper) reports of the financial condition, and of the receipts and
disbursements, of the Trust Fund from the Trustee (or any Investment Manager);

 

(g)               to appoint or employ individuals or other parties to assist in
the administration of the Plan and any other agents it deems advisable,
including accountants and legal and actuarial counsel; and

 

(h)               to designate or employ persons to carry out any of the Plan
Administrator’s fiduciary duties or responsibilities under the Plan.

 

7.6              Rules and Decisions. The Plan Administrator may adopt such
bylaws, rules and regulations as it deems necessary, desirable, or appropriate,
provided that same shall not be inconsistent with or contrary to the express
terms of this Plan. All such bylaws, rules, regulations and decisions of the
Plan Administrator shall be uniformly and consistently applied to all
Participants in similar circumstances. When making a determination or
calculation, the Plan Administrator shall be entitled to rely upon information
furnished by a Participant or Beneficiary, the Employer, the legal or actuarial
counsel of the Employer, any Investment Manager, or the Trustee.

 

7.7              Authorization of Benefit Payments. The Plan Administrator shall
issue directions to the Trustee concerning all benefits which are to be paid
from the Trust Fund pursuant to the provisions of the Plan.

 

7.8              Application and Forms for Benefits. The Plan Administrator may
require a Participant to complete and file with the Plan Administrator an
application for a benefit and all other forms approved by the Plan Administrator
and to furnish all pertinent information requested by the Plan Administrator.
The Plan Administrator may rely upon all such information so furnished it,
including but not limited to the Participant’s current mailing address.

 

7.9              Payment for Benefit of Disabled or Incapacitated Person.
Whenever, in the Plan Administrator’s opinion, a person entitled to receive any
payment of a benefit or installment thereof hereunder is under a legal
disability or is incapacitated in any way so as to be unable to manage his
financial affairs, the Plan Administrator may direct the Trustee to make
payments to such person or to his legal representative or to a relative or
friend of such person for his benefit, or the Plan Administrator may direct the
Trustee to apply the payment for the benefit of such person In such manner as
the Plan Administrator considers advisable. Any payment of a benefit or
installment thereof in accordance with the provisions of this Section shall be a
complete discharge of any liability for the making of such payment under the
provisions of the Plan.

 

7.10          Notices to Trustee. All notices from the Plan Administrator or any
Investment Manager to the Trustee shall be in writing, and the Trustee may rely
thereon in carrying out its duties and responsibilities hereunder.

 

 

7.11          Indemnification by the Company. The Company shall indemnify and
hold harmless the Board of Directors, any Employee performing duties with
respect to the Plan, the Plan Administrator and the Trustee from and against any
and all claims, losses, damages, expenses and liabilities arising from their
responsibilities in connection with the Plan, unless such liability arises from
the person’s gross negligence or dishonesty in the performance of its duties.

 

ARTICLE VIII

 

POWERS, DUTIES AND RESPONSIBILITIES OF THE TRUSTEE

 

8.1              Establishment and Acceptance of Trust. The Trustee shall hold
and manage the assets received by it to be included in the Trust Fund. All
contributions so received together with the income therefrom shall be managed,
invested and reinvested by the Trustee in accordance with Section 8.2, subject,
however, to the right of the Company to appoint and employ an Investment Manager
or Managers, to manage and/or invest and reinvest the Trust Fund, or any part
thereof, in which event the Investment Manager shall be certified as such to the
Trustee by the Company and the Trustee shall not be liable for the acts or
omissions of such Investment Manager or Managers or be under any obligation to
manage or invest the assets of the Trust Fund which are subject to management by
such Investment Manager or Managers. Any such Investment Manager so employed
must meet the definition thereof contained in Section 3(38) of ERISA and must
acknowledge in writing at the time of such employment that he or it is a
fiduciary with respect to the Plan. The chief executive officer of any such
Investment Manager shall certify in writing to the Trustee the names of all
persons who shall act on behalf of the Investment Manager with respect to the
Trust Fund, and the Trustee may rely thereon in its dealings with the Investment
Manager. The Trustee shall have the power to take such action and execute such
documents with respect to the Plan, the Trust Fund created thereunder and the
benefits provided thereunder as it may deem necessary or advisable in order to
carry out the purposes for which the Plan is established and operated.

 

8.2Investment of Trust Fund.

 

(a)                The Plan is designed to be an employee stock ownership plan
as defined in Section 4975(e)(7) of the Code and regulations thereunder.
Therefore, the Plan shall be invested primarily in Employer Stock. The ESOP
Committee shall direct the Trustee in writing as to all purchases and sales of
Employer Stock by the Plan. Shares of Employer Stock may be purchased in the
open market, from the Company or affiliates of the Company, or through privately
negotiated transactions, at prices not in excess of the fair market value of the
Employer Stock on the date of the purchase, as long as such purchases are
permitted by applicable law. The Trustee may suspend purchases of Employer Stock
in circumstances which, in the opinion of counsel for the Trustee, such
suspension is necessary to comply with rules and regulations of the Securities
and Exchange Commission, in which event such purchases will be made or resumed
as or when the Trustee is satisfied that such purchases are permitted under such
rules and regulations.

 

(b)               To the extent the Trustee does not receive such written
direction from the Plan Administrator and to the extent the Trust Fund is not
invested in Employer Stock, the funds

 

 

of the Trust may be invested in stocks, common or preferred, trust shares,
mutual fund shares, annuity contracts and insurance policies (including
specifically “key man” insurance on any key employee of the Employer) bonds and
mortgages and other evidences of indebtedness or ownership, master variable
notes, commercial paper, repurchase agreements issued by persons other than the
Trustee which are secured by obligations of the U.S. Treasury or agencies or
instrumentalities of the United States (except as any such investment may be
limited hereunder or under the provisions of ERISA), and, consistently with Code
Section 4975(d)(4), any deposits with Southwest Georgia Bank or an affiliated
state or federally supervised bank, including certificates of deposits or
savings certificates, and in any common trust fund or commingled trust fund
maintained by the Trustee for the investment of qualified employee benefit
trusts; provided, however, the Trustee or Investment Manager, as the case may
be, shall be subject to the principal requirements that the Plan is to be
invested primarily in Employer Stock and that the investments of the other
assets of the Plan shall be diversified to the extent necessary to minimize the
risk of large losses, unless under the circumstances it is clearly prudent not
to do so. For purposes of the restrictions on investment in and holding of
Employer Stock, the Trustee (and any Investment Manager) shall be permitted to
invest in and hold such securities having an aggregate fair market value up to
100% of the fair market value of the Trust Fund’s assets with respect to the
ESOP Account.

 

(c)                If the Plan Administrator directs the Trustee to dispose of
shares of Employer Stock under circumstances which would, in the opinion of
counsel for the Trustee, require registration of such shares under the
Securities Act of 1933 and/or qualification of the shares under the blue sky
laws of any state or states, then the Trustee shall not be required to proceed
with such disposition of the shares unless the Employer takes any and all
actions as may be deemed necessary to effect such registration and/or
qualification. The costs of such registration and/or qualification shall be
borne by the Employer.

 

(d)               The Trustee may cause any investment in securities held by the
Trustee to be registered in or transferred into its name as Trustee or into the
name of such nominee as it may appoint, or it may retain the same unregistered
and in such form as shall permit transferability, but the books and records of
the Trust Fund shall at all times show that all such investments are part of the
Trust Fund.

 

(e)                The ESOP Committee shall establish the general investment
policy and objectives for the Trust Fund and shall communicate same to the
Trustee and any Investment Manager who may then be serving as such, as promptly
as practicable after establishing or revising same. It shall be the
responsibility of the Trustee and any such Investment Manager to advise the
Company, in writing, at reasonable intervals and at such other times as the
Company shall request of all investments and reinvestments of the Trust Fund
made in furtherance of such investment policy and objectives.

 

(f)                The Non-Employer Securities Portion of the Plan shall be
invested in various investment options according to the investment directions of
Participants or as otherwise directed by the ESOP Committee. If Participants may
direct the investments, the Plan Administrator shall communicate the
Participants’ investment directions to the Trustee who shall invest amounts
credited to such accounts in accordance with Participants’ directions. The
Participant Directed Amount shall not share in general Trust Fund earnings, but
it shall be

 

 

charged or credited as appropriate with the net earnings, gains, losses and
expenses as well as any appreciation or depreciation in market value
attributable to such account.

 

(g)               Notwithstanding the foregoing provisions of this Section 8.2,
the investment of Trust Fund assets shall be subject to the provisions of
Article IV of the Plan.

 

8.3              Discharge of Duties. The ESOP Committee, Plan Administrator,
the Trustee and any Investment Manager (and any other party who may at any time
be serving as a Fiduciary with respect to the Plan) shall discharge their duties
solely in the interests of the Participants and Beneficiaries, for the exclusive
purpose of providing benefits as herein described and defraying reasonable
expenses of administration, in accordance with the Plan and consistent with the
fiduciary responsibility provisions of ERISA Title I, and with the care, skill,
prudence and diligence, under the circumstances then prevailing, that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of like character and with like aims.

 

8.4              Prohibited Transactions. Notwithstanding anything herein to the
contrary, neither the Trustee, nor any other party at any time serving as a
Fiduciary with respect to the Plan, shall cause the Plan to engage in any
“prohibited transactions” as same are defined and applicable to this Plan under
ERISA Section 406 or Code Section 4975, subject to any available and applicable
exception contained in or allowed by ERISA or the Code, and, except as otherwise
permitted by such exemption and provided for herein, in complying with such
limitations, neither the Trustee nor any other Fiduciary shall engage in any
transaction which they know or should know constitutes a direct or indirect:

 

(a)                sale or exchange or leasing of any property between the Trust
Fund and a “party in interest” or a “disqualified person” (as such terms are
defined under ERISA);

 

(b)               lending of money or other extension of credit between the
Trust Fund and a party in interest or a disqualified person;

 

(c)                furnishing of goods, services, or facilities between the
Trust Fund and a party in interest or a disqualified person;

 

(d)               transfer to, or use by or for the benefit of, a party in
interest or a disqualified person, of any assets of the Trust Fund; or

 

(e)                acquisition, on behalf of the Trust Fund, of any Employer
security or Employer real property which would constitute a violation by this
Plan of Section 407 of ERISA.

 

Unless such transaction is permissible under ERISA, neither the Trustee nor any
other Fiduciary shall deal with the assets of the Trust Fund in their own
interest or for their own account or act in any transaction involving the Trust
Fund on behalf of a party (or represent a party) whose interests are adverse to
the interests of the Trust Fund or the interests of its Participants or
Beneficiaries. No Fiduciary shall receive any consideration for its own personal
account from any party dealing with the Trust Fund in connection with a
transaction involving the assets of the Trust Fund.

 

 

8.5              Delegation of Responsibilities. The Trustee and any other party
serving as a Fiduciary with respect to the Plan shall act prudently in the
delegation or allocation of responsibilities to other persons (to the extent
such delegation or allocation is allowable hereunder and under ERISA), and if at
any time there is more than one authorized Trustee serving, each Trustee shall
exercise reasonable care to prevent the other Trustees from committing a breach
of such other Trustees’ obligations and responsibilities hereunder. Each
Fiduciary shall conduct a periodic review to assure that functions delegated by
such Fiduciary are carried out properly. Neither the Trustee nor any other
person serving at any time as a Fiduciary with respect to the Plan shall be
liable for the actions of any other Trustee or Fiduciary unless he knowingly
participates, approves, acquiesces in or conceals a breach of obligations and
responsibilities committed by the other.

 

8.6              Powers of Trustee. Subject to the rights of the ESOP Committee
with respect to the purchase and sale of Employer Stock, the terms of an exempt
loan, and the rights of the Participants with respect to the voting and tender
of Employer Stock, the Trustee (and any Investment Manager to the extent
applicable to its investment powers and duties) shall have the following powers
and authority in the administration and investment of the Trust Fund, to be
exercised without being required to make or to file any inventory or appraisal
with, nor to give any bond or be a surety thereon to, any officer, court or
tribunal, and in accordance with and subject to the above provisions of this
Article VIII:

 

(a)                Purchase of Property. To purchase or subscribe for any
securities or other property, real and personal, and to retain the same in
trust.

 

(b)               Sale, Exchange, Conveyance and Transfer of Property. To sell,
exchange, convey, transfer or otherwise dispose of any securities or other
property held by it, by public or private sale without notice, advertisement or
court order. No person dealing with the Trustee shall be bound to see to the
application of the purchase money or to inquire into the validity, expediency,
or propriety of any such-sale or other disposition.

 

(c)                Exercise of Owner’s Rights. Subject to Section 5.15, to vote
in accordance with its fiduciary obligations hereunder any Employer Stock or any
other stocks, bonds or other securities held in the Trust Fund on all matters
for which such vote is required; to give general or special proxies or powers of
attorney with or without power of substitution; to exercise any conversion
privileges, subscription rights, or other options, and to make any payments
incidental thereto; to oppose, or to consent to or otherwise participate in,
corporate reorganizations or other changes affecting corporate securities, and
to delegate discretionary powers, and to pay any assessments or charges in
connection therewith; and generally to exercise any of the powers of an owner
with respect to the Employer Stock and any other stocks, bonds, securities or
other property held as part of the Trust Fund.

 

(d)               Borrowing. To borrow or raise money for the purpose of the
Plan in such amount, and upon such terms and conditions, including entering into
purchase money transactions, as the ESOP Committee appointed by the Board may
direct and the Trustee shall determine appropriate; and for any sum so borrowed,
to issue its promissory note as Trustee, and to secure the repayment thereof by
pledging all or any part of the Trust Fund. A loan shall be used primarily for
the benefit of Plan Participants and their Beneficiaries. No person lending

 

 

money to the Trustee shall be bound to see to the application of the money lent
or to inquire into the validity, expediency or propriety of any such borrowing.
Any borrowing by the Trustee to purchase Employer Stock shall provide for the
following special provisions:

 

(i)                 the Plan shall repay to the lender the amount of such loan,
together with the interest thereon, only out of amounts contributed for such
purposes to the Plan by the Employer;

 

(ii)               from time to time, as the Plan repays such loan, shares of
Employer Stock shall be released from the suspense account for allocation to
Participants’ accounts as provided in Section 4.3(b);

 

(iii)             the collateral, if any, from the Trust Fund to secure such
loan shall be limited to the Employer Stock purchased with the proceeds of such
loan and then only to the extent that such stock has not been released from the
suspense account for allocation to Participants’ accounts as provided for in
Section 4.3;

 

 

of the Plan;

(iv)the loan shall be made without recourse against the existing assets

 

(v)               in the event of default by the Plan under such loan, the value
of assets of the Plan transferred in satisfaction of the loan must not exceed
the amount of the default; provided, where the lender is a “disqualified person”
(as such term is defined in Code Section 4975), Plan assets may be transferred
to such disqualified person only upon and to the extent of failure to meet the
payment schedule of the loan;

 

(vi)             the loan must be for a specific term, and not payable on
demand, and the interest rate on the loan must not be in excess of a reasonable
rate and the proceeds of any such loan shall be used within a reasonable period
of time after the making of the loan to acquire Employer stock or to repay other
such loans; and

 

(vii)           such other requirements as may be necessary for the loan or
purchase money transaction to meet the applicable requirements of Code Section
4975 for an exempt loan.

 

(e)                Retention of Cash. To keep such portion of the Trust Fund in
cash or cash balances as the Trustee, from time to time, may deem to be in the
best interests of the Trust, without liability for interest thereon.

 

(f)                Retention of Property Acquired. To accept and retain for such
time as it may deem advisable any securities or other property received or
acquired by it as Trustee hereunder, whether or not such securities or other
property would normally be purchased as investments hereunder.

 

(g)               Execution of Instruments. To make, execute, acknowledge and
delivery any and all documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out the powers herein
granted.

 

 

(h)               Settlement of Claims and Debts. To settle, compromise or
submit to arbitration any claims, debts or damages due or owing to or from the
Trust Fund, to commence or defend suits or legal or administrative proceedings,
and to represent the Trust Fund in all suits and legal and administrative
proceedings.

 

(i)                 Employment of Agents and Counsel. To employ suitable agents
and counsel (who shall be counsel for or acceptable to the Company), and to pay
their reasonable expenses and compensation, and the Trustee shall be fully
protected in relying upon the advice of such counsel.

 

(j)                 Buy-Sell Agreements. To enter into buy-sell agreements upon
such terms as the Trustee deems appropriate for the purchase of Employer Stock
which give the Plan the option to purchase Employer Stock upon the death of
another party to the agreement, but which do not obligate the Plan to purchase
such Employer Stock.

 

(k)               Power to Do Any Necessary Act. To do all acts, take all such
proceedings, and exercise all such rights and privileges, although not
specifically mentioned herein, as the Trustee may deem necessary to administer
the Trust Fund and to carry out the purposes of this Trust.

 

The interest and principal payments made with respect to any loan by the Plan
during a Plan Year shall not exceed the excess of (1) the sum of the
contributions made for such Plan Year and all prior Plan Years (together with
any earnings on such contributions); over (2) the interest and principal
payments previously made with respect to all loans in all prior Plan Years. Such
contributions and earnings shall be accounted for separately by the ESOP
Committee until the loan is repaid.

 

8.7              Payments From The Fund. The Trustee shall from time to time, on
the written directions of the Plan Administrator, make payments out of the Trust
Fund to such persons, in such manner, in such amounts, and for such purposes as
may be specified in the written directions of the Plan Administrator, pursuant
to Article V, and upon any such payment being made, the amount thereof shall no
longer constitute a part of the Trust Fund. Each such written direction shall be
accompanied by a certificate of the Plan Administrator that the payment is in
accordance with the Plan. The Trustee shall not be responsible in any way with
respect to the application of such payments, or, subject to observing the
standards hereinabove set forth in Sections 8.1 through 8.5, for the adequacy of
the Trust Fund to meet and discharge any and all liabilities under the Plan.

 

8.8              Payment of Compensation, Expenses and Taxes. The Trustee (and
any Investment Manager) shall be paid such reasonable compensation as shall from
time to time be agreed upon in writing by the Employer and the Trustee or the
Investment Manager, as the case may be. In addition, they shall be reimbursed
for any reasonable expenses, including reasonable counsel fees, incurred by them
in the management and investment of the Trust Fund. Such compensation and
expenses shall be paid either by the Employer or the Trust, as directed by the
Employer, but until paid shall constitute a charge upon the Trust Fund. All
taxes of any and all kinds whatsoever that may be levied or assessed under
existing or future laws upon, or in respect of, the Trust Fund or the income
thereof shall be paid from the Trust Fund. Brokerage fees and

 

 

commissions and other purchase and sale transaction associated costs shall be
paid by the Company or the Trust, as directed by the Company, but until paid
shall constitute a charge upon the Trust Fund.

 

8.9              Accounting. The Trustee shall keep accurate and detailed
accounts of all investments, receipts, disbursements and other transactions
hereunder. All accounts, books and records relating to such transactions shall
be open to inspection and audit at all reasonable times by any person designated
by the Plan Administrator.

 

Within ninety (90) days following the close of each fiscal year of the Trust and
within ninety (90) days after the removal or resignation of the Trustee as
provided in Section 8.11 hereof, the Trustee shall file with the Plan
Administrator a written account setting forth all investments, receipts,
disbursements, and other transactions effected by it during such fiscal year or
during the period from the close of the last fiscal year to the date of such
removal or resignation, and setting forth the current value of the Trust Fund.

 

8.10          Bond. Any person or party serving as a Fiduciary with respect to
the Plan and any other person or party handling funds of the Plan shall, if
required by ERISA and not otherwise exempted, be bonded in an amount which shall
not be less than 10 percent of the amount of the Trust Fund, but in no event
shall any such bond be less than $1,000.00 nor more than $500,000.00. The amount
of such bond shall be fixed at the beginning of each Plan Year in accordance
with the provisions of ERISA Section 412(a). The Employer shall be responsible
for paying the cost of such bond.

 

8.11Resignation or Removal of the Trustee.

 

(a)                Term of Trustee. The Trustee shall continue to serve as such
until his resignation or removal as herein provided.

 

(b)               Resignation. Any Trustee may resign and become and remain
fully discharged from any and all further duties or responsibilities hereunder
by giving at least sixty

(60) days’ prior written notice to the Company stating the effective date of
such resignation, or such shorter notice as the Company may accept as
sufficient. Such resignation shall take effect on the date specified therein
unless a successor Trustee(s) shall have been appointed at an earlier date, in
which event such resignation shall take effect immediately upon the appointment
of such successor Trustee(s).

 

(c)                Removal. Any Trustee may be removed by the Company’s giving
at least sixty (60) days prior written notice to the Trustee stating the
effective date of such removal, or such shorter notice as the Company may
request and the Trustee may accept as sufficient, in which event such removed
Trustee shall become and remain fully discharged from all further duty or
responsibility hereunder after the effective date of such removal.

 

(d)               Appointment of Successor Trustee. In the event of the
resignation or removal of any Trustee, a successor Trustee(s) shall promptly be
appointed by the Board of Directors of the Company who shall give any remaining
Trustee(s) notice of such appointment. Any successor Trustee(s) shall
immediately upon his appointment as a successor Trustee and his acceptance of
same in writing filed with the Company and any remaining Trustee(s) become

 

 

vested with all of the property, rights, powers and duties of a Trustee with
like effect as if originally named the Trustee hereunder. Any successor Trustee
shall not be required to look into the actions of a prior Trustee unless
directed to do so by the Plan Administrator.

 

ARTICLE IX AMENDMENT OF THE PLAN

The Company shall have the right at any time by instrument in writing, duly
executed and

acknowledged and delivered to the Trustee to modify, alter or amend this Plan
and Trust in whole or in part, provided, however, that the duties, powers and
liability of the Trustee hereunder shall not be substantially modified without
its written consent and provided further that any benefits which have actually
accrued and become payable hereunder shall not be affected thereby. No amendment
shall be made which shall cause or authorize any part of the Trust Fund to
revert or be refunded to an Employer or to be used for or diverted to purposes
other than the exclusive and sole benefit of the Participants or their
Beneficiaries (other than such part as is required to pay taxes and expenses of
administration). The Company shall have the limited right to amend this
Agreement at any time, retroactively or otherwise, in such respects and to such
extent as may be necessary to qualify it under existing and applicable laws and
regulations so as to permit the full deduction for tax purposes of the
Employer’s contributions made hereunder, and if and to the extent necessary to
accomplish such purpose may by such amendment decrease or otherwise affect the
rights of Participants to benefits which have actually accrued and become
payable hereunder, any provision herein to the contrary notwithstanding.

 

No amendment to the Plan shall reduce a Participant’s Account Balance or
eliminate an optional form of distribution except to the extent permissible
under Code Sections 411, 412, or any other relevant Code Section. No amendment
to the Plan shall have the effect of decreasing a Participant’s Account Balance
determined without regard to such amendment as of the later of the date such
amendment is adopted or the date it becomes effective.

ARTICLE X

DISCONTINUANCE OF CONTRIBUTIONS

AND TERMINATION OF PLAN

 

10.1          Intention to Continue Plan. The Plan herein provided for has been
established by the Company with the bona fide intention that it shall be
continued in operation indefinitely and that contributions hereunder shall
continue for an indefinite period. However, the Company reserves the right at
any time to terminate the Plan, and any Employer reserves the right at any time
to discontinue contributions.

 

10.2          Termination or Partial Termination of Plan. The Trustee shall be
notified of such termination or partial termination in writing and shall proceed
at the direction of the Plan Administrator to liquidate the assets of the Trust
Fund. Upon termination of the Plan by an Employer, the Employer shall not
thereafter make any further contributions under the Plan, and no amount shall
thereafter be payable under the Plan to or in respect of any Participants then

 

 

employed by such Employer, except as provided in this Section X or except as
amounts may become payable under the Plan as a result of such Participants
continuing their participation in the Plan as a result of being employed by
other participating Employers. To the maximum extent permitted by ERISA,
transfers, distributions or other dispositions of assets of the Plan as provided
in this Article X shall constitute a complete discharge of all liabilities under
the Plan. Promptly upon any such termination the Trustee shall (i) pay any due
and accrued expenses and liabilities of the Trust and any expenses involved in
the termination of the Plan and appropriately adjust, as may be required, all
accounts of Participants for such expenses and charges; and (ii) adjust for
income, gains and losses of the Trust Fund to such termination date in the
manner described in Section 4.2(a) hereof as if such termination date was an
Annual Valuation Date. The interest of each affected Employee in the adjusted
amount then credited to his Employer Contribution Account shall be
nonforfeitable as of such date. The full current value of such adjusted amount
shall be paid from the Trust Fund to each such Participant in such manner of
distribution specified in Section 5.6 hereof as though each such Participant
separated from Service as of the date of termination, or shall continue to be
held in Trust at the discretion of the Plan Administrator as provided in Article
V.

 

In the event of a partial termination of the Plan, the payments, adjustments and
distributions described above shall also be made, but only with respect to the
portion of the Plan being terminated.

 

Termination or partial termination of the Plan shall not affect the payment of
benefits, in accordance with Section 5.6 hereof, from the Trust Fund, nor shall
such funds thereafter be divested by reason of any provision hereof.

 

10.3          Discontinuance of Contributions. In the event of a complete
discontinuance by the Employer of contributions to be made by it hereunder, the
accounts of all Participants shall be treated, and the rights of all
Participants shall be, as if the Plan was terminated as contemplated under
Section 10.2 on the effective date of such discontinuance or the date such
discontinuance is deemed to have been effective, including, but not limited to,
nonforfeitability of all amounts credited to the Employer Contribution Accounts
of all affected Participants.

 

ARTICLE XI MISCELLANEOUS

11.1          Participants’ Rights, Acquittance. Except to the extent required
or provided for

by mandatorily imposed law as in effect and applicable hereto from time to time,
neither the establishment of the Trust hereby created, nor any modification
thereof, nor the creation of any fund or account, nor the payment of any
benefits, shall be construed as giving to any Participant or other person any
legal or equitable right against the Employer, or any officer or employee
thereof, the Trustee or the Plan Administrator except as herein provided nor
shall any Participant have any legal right, title or interest in this Trust or
any of its assets, except in the event and to the extent that benefits may
actually accrue to him hereunder, and the same limitations shall be applicable
with respect to death benefits which may be payable to the beneficiaries of a
Participant. Under no circumstances shall the terms of employment of any
Participant be

 

 

modified or in any way affected hereby. This Plan and Trust shall not constitute
a contract of employment nor afford any individual any right to be retained in
the employ of the Employer.

 

11.2          Spendthrift Clause. Except to the extent permitted by the Code,
Participants are prohibited from anticipating, encumbering, alienating or
assigning any of their rights, claims or interest in this Trust or in any of the
assets thereof, and no undertaking or attempt to do so shall in any way bind the
Plan Administrator or the Trustee or be of any force or effect whatsoever.
Furthermore, except to the extent permitted by the Code, no such rights, claims
or interest of a Participant in this Trust or in any of the assets thereof shall
in any way be subject to such Participant’s debts, contracts or engagement, nor
to attachment, garnishment, levy or other legal or equitable process.

 

The foregoing provision against the assignment of a Participant’s right in the
Plan shall not apply in the case of (i) a qualified domestic relations order
which is determined by the Plan Administrator to meet the requirements of Code
Section 414(p), or (ii) the Participant’s liability to the Plan due to (A) the
Participant’s conviction of a crime involving the Plan, (B) a judgment, consent
order, or decree in action for violation of fiduciary standards, or (C) a
settlement involving the Department of Labor or Pension Benefit Guaranty
Corporation.

 

Effective April 6, 2007, a domestic relations order that otherwise satisfies the
requirements for a qualified domestic relations order will not fail to be a
qualified domestic relations order: (i) solely because the order is issued
after, or revises, another domestic relations order or qualified domestic
relations order; or (ii) solely because of the time at which the order is
issued, including issuance after the Participant’s death.

 

In any action or proceeding involving the Trust Fund, or any property
constituting part or all thereof, or the administration thereof, the Employer,
the Plan Administrator and the Trustee shall be the only necessary parties and
no Employee or former Employee of the Employer or his Beneficiary or any other
person having or claiming to have an interest in the Trust Fund or under the
Plan shall be entitled to any notice or service of process. Any final judgment
which is not appealed or appealable that may be entered in any such action or
proceeding shall be binding and conclusive on the parties hereto, the Plan
Administrator and all persons having or claiming to have any interest in the
Trust Fund or under the Plan.

 

11.3          Participation of Adopting Employers. With the written consent of
the Company, an adopting Employer may become a party to this agreement pursuant
to authorization by its Board of Directors. In the event an adopting Employer
does so become a party, it shall contribute to the Plan, and its Employees shall
be entitled to benefits hereunder, in accordance with the terms of the Plan
subject to the following special provisions:

 

(a)                The contribution of each adopting Employer shall be
determined separately by its Board of Directors under Article III hereof.

 

(b)               In computing the Service of a person who is in the employ of
only one of the adopting Employers at the same time, the period of Service of
such Person with any of the adopting Employers shall be counted, and a transfer
of an Employee from the employ of one

 

 

adopting Employer to the employ of another shall not interrupt his Service, nor
shall such a transfer constitute a termination of Service under the terms of
this Plan.

 

(c)                The contribution of each adopting Employer shall be allocated
among its Employees separately from the contributions of the others in
accordance with the provisions of Article IV. Net increases and decreases in the
value of the Trust Fund resulting from increases or decreases in the value of
the assets of the Trust and earnings and losses shall be allocated among all
Participants under the Plan as a group in accordance with the provisions of
Article IV. Participants who are Employees of one or more adopting Employers
shall have separate accounts with respect to their participation as an Employee
of each such adopting Employer.

 

(d)               In the event of a transfer of any Participant from the employ
of one adopting Employer to the employ of another, his account shall be
considered and treated thereafter as the account of a Participant who is an
Employee of the adopting Employer to which he is transferred.

 

In the event of such a transfer, the Participant transferred shall share in the
next annual contribution of each of such adopting Employers on a pro rata basis,
based upon his Annual Compensation with each such Employer during its fiscal
year in which the transfer takes places.

 

11.4          Successor Employer. In the event of the dissolution, merger,
consolidation or reorganization of the Company, provision may be made by which
the Plan and Trust will be continued by the successor, and such successor shall
be substituted for the Company under the Plan. The substitution of the successor
shall constitute an assumption of Plan liabilities by the successor and the
successor shall have all the powers, duties and responsibilities of the Company
under the Plan.

 

11.5          Transfer of Plan Assets. In the event of any merger or
consolidation of the Plan with, or transfer in whole or in part of the assets
and liabilities of the Trust Fund to another trust fund held under any other
plan of deferred compensation maintained or to be established for the benefit of
all or some of the Participants of this Plan, the assets of the Trust Fund
applicable to such Participants shall be transferred to the other trust fund
only if:

 

(a)                each Participant would, if either this Plan or the other Plan
then terminated, receive a benefit immediately after the merger, consolidation
or transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation or transfer if
the Plan had then terminated;

 

(b)               resolutions of the Board of Directors of the Employer of the
affected Participants shall authorize such transfer of assets and, in the case
of the new or successor employer of the affected Participants, its resolutions
shall include an assumption of liabilities with respect to such Participant’s
inclusion in the new employer’s plan;

 

 

501(a); and

(c)such other plan and trust are qualified under Code Sections 401(a) and

 

 

(d)               the Trustee is authorized to make or receive such direct
transfers at the direction of the Company.

 

11.6          Delegation of Authority by the Company. Whenever the Company under
the terms of this Agreement is permitted or required to do or perform any act or
matter or thing it shall be done and performed by any officer thereunto duly
authorized by the Board of Directors of the Company.

 

11.7          Construction of Agreement. This Plan and Trust agreement shall be
construed according to the laws of the state of Georgia, and all provisions
hereof shall be administered according to, and its validity and enforceability
shall be determined under the laws of such state, except where preempted by
ERISA.

 

11.8          Headings. The headings of Sections and subsections are for ease of
reference only and shall not be construed to limit or modify the detailed
provisions hereof.

 

ARTICLE XII

 

TOP-HEAVY PLAN PROVISIONS

 

12.1          Application. In the event that the Plan is determined to be a
Top-Heavy Plan as hereinafter defined, this Article XII shall become effective
as of the first day of the Plan Year in which the Plan is a Top-Heavy Plan.

 

12.2Definitions.

 

(a)                Compensation. The compensation (within the meaning of Code
Section 415(c)(3)) of the Participant from the Employer for the Plan Year.

 

(b)               Key Employee. During any Plan Year that the Plan is a
Top-Heavy Plan, an Employee who is a Key Employee within the meaning of Code
Section 416(i), including any Employee, former Employee or Beneficiary of an
Employee or former Employee who at any time during the Plan Year or any of the
four (4) preceding Plan Years, is (or was):

 

(i)                 an officer of the Employer whose Compensation is greater
than 50% of the amount in effect under Code Section 415(b)(1)(A) for any such
Plan Year;

 

(ii)               1 of the 10 Employees having Compensation of more than the
dollar limitation in Code Section 415(c)(1)(A) and owning (or considered as
owning within the meaning of Code Section 318) one of the largest interests in
the Employer, which interest is at least 1/2%;

 

(iii)             a one percent (1%) owner of the Employer having Compensation
of more than $170,000 (as indexed); or

 

(iv)a five percent (5%) owner of the Employer.

 

 

Ownership shall be determined according to Code Section 416(i)(1)(B). For
purposes of (i) above, no more than fifty (50) Employees (or if less, the
greater of three (3) or ten percent (10%) of the Employees) shall be treated as
officers. For purposes of (ii) above, if two Employees have the same interest in
the Employer, the Employee with the higher Compensation shall be treated as
having the larger interest. An Employee or former Employee who is not a Key
Employee shall be a non-Key Employee.

 

(c)                Minimum Contribution. For a Plan Year, the lesser of three
percent (3%) of a Participant’s compensation (within the meaning of Treasury
Regulation Section 1.415-2(d)) or a percentage of a Participant’s compensation
equal to the percentage at which contributions are made (or required to be made)
under the Plan and all other plans of the Aggregation Group for the Key Employee
for whom such percentage is highest.

 

Notwithstanding the foregoing, for Plan Years beginning on or after January 1,
2007, solely on behalf of any individual who is covered under a defined benefit
plan maintained by the Employer, the three percent (3%) minimum contribution
referenced above shall be replaced by five percent (5%).

 

(d)               Top-Heavy Plan. With respect to any Plan Year, this Plan shall
be deemed Top-Heavy if the aggregate of the Account Balances of all Key
Employees in the Plan exceeds sixty percent (60%) of the aggregate of the
Account Balances of all Participants in the Plan, such determination to be made
in accordance with the procedures described in Code Section 416(g) as of the
Annual Valuation Date immediately preceding such Plan Year (or in the case of
the first Plan Year, as of the last day of such Plan Year). For purposes of
determining whether the Plan is a Top-Heavy Plan, the Plan shall be aggregated
with all other plans within the Aggregation Group.

 

(e)                Aggregation Group. All plans maintained by the Employer (i)
which are required to be aggregated with the Plan in order for the Plan to meet
the requirements of Code Sections 401(a)(4) and 410, (ii) in which a Key
Employee is a participant, and (iii) any other plan of the Employer that the
Employer elects to include in the Aggregation Group, provided that any such plan
would not cause the Aggregation Group to fail to meet the requirements of Code
Sections 401(a)(4) and 410 with such plan being taken into account.

 

12.3          Allocation of Minimum Contribution. For any year in which the Plan
is a Top- Heavy Plan, the Minimum Contribution as defined in Section 12.2(c)
hereof shall be made to the account of each Participant who is a non-Key
Employee, unless the Minimum Contribution for the Participant is made under
another defined contribution plan maintained by the Employer. Such Minimum
Contribution shall be made to the Employer Contribution Account of each non- Key
Employee Participant who has not separated from service on the last day of such
Plan Year without regard to such Participant’s Hours of Service during such Plan
Year. The Employer and Plan Administrator shall determine under which plan a
Participant shall receive the Minimum Contribution if the Employee is a
Participant in more than one plan maintained by the Employer.

 

 

12.4Post-EGTRRA Top-Heavy Provisions.

 

(a)                Effective date. This Section 12.4 shall apply for purposes of
determining whether the Plan is a Top-Heavy Plan under Code Section 416(g) for
Plan Years beginning after December 31, 2001, and whether the Plan satisfies the
minimum benefits requirements of Code Section 416(c) for such years. This
Section 12.4 amends Sections 12.1 through 12.3 of the Plan.

 

(b)Determination of Top-Heavy Status.

 

(i)                 Key Employee. Key Employee means any Employee or former
Employee (including any deceased Employee) who at any time during the Plan Year
that includes the determination date was an officer of the Employer having
Top-Heavy Compensation greater than $135,000 (as adjusted under Code Section
416(i)(1) for Plan Years beginning after December 31, 2005), a 5% owner of the
Employer, or a 1% owner of the Employer having Top-Heavy Compensation of more
than $150,000. For this purpose, Top-Heavy Compensation means compensation
within the meaning of Code Section 415(c)(3). The determination of who is a key
employee will be made in accordance with Code Section 416(i)(1) and the
applicable regulations and other guidance of general applicability issued
thereunder.

 

(ii)               Determination of Present Values and Amounts. This Section
12.4(b)(ii) shall apply for purposes of determining the amounts of Participant’s
accounts as of the determination date.

 

(1)               Distributions During Year Ending on the Determination Date.
The amounts of account balances of an Employee as of the determination date
shall be increased by the distributions made with respect to the Employee under
the Plan and any plan aggregated with the Plan under Code Section 416(g)(2)
during the 1-year period ending on the determination date. The preceding
sentence shall also apply to distributions under a terminated plan which, had it
not been terminated, would have been aggregated with the Plan under Code Section
416(g)(2)(A)(i). In the case of a distribution made for a reason other than
severance from employment, death, or disability, this provision shall be applied
by substituting “5-year period” for “1-year period.”

 

(2)               Employees Not Performing Services During Year Ending on the
Determination Date. The accounts of any individual who has not performed
services for the Employer during the 1-year period ending on the determination
date shall not be taken into account.

 

(c)                Non-Applicability of Top-Heavy Provisions. The top-heavy
requirements of Code Section 416 and this Section 12.4 of the Plan shall not
apply in any year beginning after December 31, 2001 in which the Plan consists
solely of a cash or deferred arrangement which meets the requirements of Code
Section 401(k)(12) and matching contributions with respect to which the
requirements of Code Section 401(m)(11) are met.

 

 

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized corporate officer and its corporate seal to be hereunto affixed,
and the Trustee has executed same under seal and thereby accepted the Trust, as
of the day and year first above written.

 

COMPANY:

 

 

 

(CORPORATE SEAL)

SOUTHWEST GEORGIA FINANCIAL CORPORATION

 

 

By: DeWitt Drew

Title: President and Chief Executive Officer

 

 

 

 

 

TRUSTEE:

 

 

(CORPORATE SEAL)

SOUTHWEST GEORGIA BANK

 

 

By: DeWitt Drew

Title: President and Chief Executive Officer

 

 

 

 

53

 

 

SCHEDULE A

 

Acquired Employers Service Crediting Provisions

 

Acquired Company Credited Service Baker County Bank Prior  service  with  Baker
 County  Bank  is recognized for participation purposes. Moultrie Federal
Savings and Loan

Any employee who was actively employed on January 7, 1991 automatically became a

participant on January 7, 1991.

Bank of Pavo (acquired 12/11/98) Immediate participation for employees of Bank
of Pavo upon closing of acquisition. Empire Financial Services, Inc. Service of
employees with Empire Financial Services, Inc. prior to January 1, 2002 is
counted for eligibility and vesting but not as credited service or for
allocations of Employer Contributions. Sylvester Banking Company

Immediate participation for employees of Sylvester Banking Company.

 

Prior service with Sylvester Banking Company is recognized for eligibility and
vesting purposes but not as credited service or for allocations of Employer
Contributions. Prior service with Sylvester Banking Company will be counted for
the Break in Service rules under Section 2.3 of the Plan.

 

 

 

 

 

 

 

A-1

 

 

SCHEDULE B

 

Adopting Employers and Dates of Adoption

 

 

Adopting Employer Date of Adoption

Date Ceased to be Adopting Employer

 

Southwest Georgia Bank July 8, 1981

 

Empire Financial Services, Inc.

January 1, 2002

 

 

 

B-1