Exhibit 10.70

 

 

 

 

MCG CAPITAL CORPORATION

SUPPLEMENTAL NON-QUALIFIED RETIREMENT PLAN

AMENDED AND RESTATED AS OF JANUARY 1, 2005

 

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TABLE OF CONTENTS

 

ARTICLE I

     DEFINITIONS    1

ARTICLE II

     ELIGIBILITY AND PARTICIPATION    2

ARTICLE III

     CONTRIBUTIONS AND CREDITS    3

ARTICLE IV

     ALLOCATION OF FUNDS    4

ARTICLE V

     ENTITLEMENT TO BENEFIT    4

ARTICLE VI

     DISTRIBUTION OF BENEFITS    8

ARTICLE VII

     BENEFICIARIES; PARTICIPANT DATA    10

ARTICLE VIII

     ADMINISTRATION AND RECORDKEEPING    11

ARTICLE IX

     AMENDMENT    13

ARTICLE X

     TERMINATION    13

ARTICLE XI

     MISCELLANEOUS    14

 

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MCG CAPITAL CORPORATION

SUPPLEMENTAL NON-QUALIFIED RETIREMENT PLAN

AMENDED AND RESTATED AS OF JANUARY 1, 2005

RECITALS

The MCG Capital Corporation Supplemental Non-Qualified Retirement Plan (the
“Plan”) is hereby amended and restated by MCG Capital Corporation (the
“Employer”) effective January 1, 2005. The Plan was previously adopted by the
Employer effective October 1, 2000. The purpose of the Plan is to offer certain
executive employees of the Employer an opportunity to defer the receipt of
compensation in order to provide deferred compensation benefits taxable pursuant
to Section 409A and Section 451 of the Internal Revenue Code of 1986, as amended
(the “Code”). The Plan is intended to be a “top-hat plan” (i.e., an unfunded
deferred compensation plan maintained for a select group of management or highly
compensated employees) pursuant to sections 201(2), 301(a)(3) and 401(a)(1) of
the Employee Retirement Income Security Act of 1974 (“ERISA”).

ARTICLE I

DEFINITIONS

The following terms, as used herein, shall have the following meanings unless a
different meaning is clearly implied by the context:

 

1.1 BENEFICIARY means any person or persons so designated in accordance with the
provisions of Article VII.

 

1.2 CODE means the Internal Revenue Code of 1986 and the regulations thereunder,
as amended from time to time.

 

1.3 COMPENSATION means the base salary and bonus paid by the Employer to an
individual with respect to the individual’s service for the Employer, as
determined by the Employer, and including amounts deferred under this or any
other plan of the Employer maintained pursuant to Code Section 401(k) or 125.

 

1.4 COMPENSATION DEFERRAL ACCOUNT is described in Article III.

 

1.5 COMPENSATION DEFERRAL is defined in Article III.

 

1.6 ELIGIBLE EMPLOYEE means, on or after January 1, 2007, an employee classified
as a Principal, Managing Director, Senior Vice-President, Executive Vice
President, President or Chief Executive Officer of the Employer, and any
Participant with a

 

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Compensation Deferral Account in the Plan as of October 1, 2006. On or after
January 1, 2005 through December 31, 2006, an Eligible Employee included any
employee classified as a Vice President of the Employer. By each November 1, the
Employer shall notify those individuals, if any, who will be Eligible Employees
for the next Plan Year. If the Employer determines that an individual first
becomes an Eligible Employee during a Plan Year, the Employer shall notify such
individual of its determination and of the date during the Plan Year on which
the individual shall first become an Eligible Employee.

 

1.7 EMPLOYER means MCG Capital Corporation, and its successors and assigns
unless otherwise herein provided, or any other corporation or business
organization which, with the consent of MCG Capital Corporation or its
successors or assigns, assumes the Employer’s obligations hereunder, or any
other corporation or business organization which agrees, with the consent of MCG
Capital Corporation, to become a party to the Plan.

 

1.8 ERISA means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

 

1.9 PARTICIPANT means an Eligible Employee who elects to make Compensation
Deferrals under the Plan in accordance with the provisions of Article III,
including, where appropriate according to the content of the Plan, any former
employee who is or may become (or whose Beneficiaries may become) eligible to
receive a benefit under the Plan.

 

1.10 PLAN means the MCG Capital Corporation Supplemental Non-Qualified
Retirement Plan, as amended from time to time.

 

1.11 PLAN YEAR means the 12-month period ending on December 31 of each year
during which the Plan is in effect.

 

1.12 VALUATION DATE means (i) December 31 of each Plan Year, (ii) the last day
of the month next preceding the date on which any distribution under the Plan is
made to or on behalf of the Participant, or (iii) such other date that is
selected by the Employer for valuing benefits hereunder, in its discretion.

ARTICLE II

ELIGIBILITY AND PARTICIPATION

 

2.1 INITIAL ELIGIBILITY. In the first Plan Year that an individual becomes an
Eligible Employee, (i) if such individual becomes an Eligible Employee on or
before September 30 of such Plan Year, the Eligible Employee may elect to make
contributions in accordance with Article III for the current Plan Year and
(ii) if such individual becomes an Eligible Employee after September 30 of such
Plan Year, the Eligible Employee may elect to make contributions in accordance
with Article III for the next Plan Year.

 

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Participation in the Plan is voluntary. In order to participate in the Plan, an
otherwise Eligible Employee must make written application in such manner as may
be required by Article III and by the Employer and must agree to make
Compensation Deferrals as provided in Article III.

 

  2.2 RE-EMPLOYMENT. If a Participant whose employment with the Employer is
terminated is subsequently re-employed with the Employer as an Eligible
Employee, he or she may elect to make contributions in accordance with Article
III for the next Plan Year.

ARTICLE III

CONTRIBUTIONS AND CREDITS

In the case of an individual who first becomes an Eligible Employee on or before
September 30 of a Plan Year, such individual may elect within 30 days of
becoming an Eligible Employee to defer up to 50% of his or her future base pay
and up to 100% of his or her pro rata bonus which is due to be earned for
services performed after the deferral election and which would otherwise be paid
to the Participant for the Plan Year. A Participant’s “pro rata bonus” is the
Participant’s total bonus for the Plan Year multiplied by the ratio of the
number of days in the Plan Year after the Participant made the deferral election
to 365.

In the case of an individual who was an Eligible Employee in a previous Plan
Year or who first becomes an Eligible Employee after September 30 of a Plan
Year, such individual may elect to defer up to 50% of his or her base pay and up
to 100% of bonus which is due to be earned and which would otherwise be paid to
the Participant for the next Plan Year. A Participant shall make such election
with respect to such Plan Year during an annual enrollment period, as designated
by the Employer, ending prior to the first day of such Plan Year.

Deferrals of base pay and bonus shall be in any fixed percentage in five percent
increments as designated by the Participant and must be made in accordance with
procedures established by the Employer.

Amounts deferred pursuant to this Article III will be considered a Participant’s
“Compensation Deferrals.” A new Compensation Deferral election must be made for
each year. A Compensation Deferral election for a Plan Year shall be irrevocable
for such Plan Year except (i) with respect to compensation payable for the 2005
Plan Year, Participants are permitted to cancel their Compensation Deferral
elections and receive a complete distribution of their account in December of
2005 by written notification to the Employer during the 2005 annual enrollment
period, and (ii) cancellations of future Compensation Deferrals pursuant to an
Unforeseeable Emergency described in Section 5.4.

 

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There shall be established and maintained by the Employer a separate
Compensation Deferral Account in the name of each Participant, and to which
shall be credited or debited, as applicable: (a) amounts equal to the
Participant’s Compensation Deferrals and (b) any deemed earnings and losses
allocated to such deferral account.

A Participant shall at all times be 100% vested in amounts credited to his or
her Compensation Deferral Account.

ARTICLE IV

ALLOCATION OF FUNDS

 

  4.1 ALLOCATION OF DEEMED EARNINGS OR LOSSES ON ACCOUNTS. The Participant’s
Compensation Deferral Account shall accrue interest at a rate of return that is
equal to the overall debt cost of funds rate, net of upfront deferred debt
issuance cost amortization, as published by the Employer in the Employer’s
financial statements plus 2.00%. Interest shall be compounded quarterly and
deemed to be credited to the Participant’s Compensation Deferral Account as of
the last business day of each quarter.

 

  4.2 ACCOUNTING FOR DISTRIBUTIONS. As of the date of any distribution
hereunder, the distribution made to a Participant or his or her Beneficiary or
Beneficiaries shall be charged to such Participant’s Account.

 

  4.3 SEPARATE BOOKKEEPING ACCOUNTS. A separate bookkeeping account under the
Plan shall be established and maintained by the Employer to reflect the
Compensation Deferral Account for each Participant. Each account will separately
account for the credits and debits described in Article III.

 

  4.4 PAYMENT OF FEES AND EXPENSES. Administration fees of the Plan and any
expenses incurred in connection with the establishment of the Plan shall be paid
by the Employer.

ARTICLE V

ENTITLEMENT TO BENEFIT

A Participant shall become entitled to payment of his or her Account upon the
earliest to occur of the following events.

 

5.1

DISABILITY. If a Participant shall become totally and permanently disabled, and
if proof of such disability satisfactory to the Employer shall be furnished,
then as of the date of the determination of disability by the Employer the
Participant’s Compensation Deferral Account shall be valued and payable
according to the provisions of Article VI. “Total and permanent disability”
means that the Participant is, by reason of any medically

 

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determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than
three months under an accident and health plan covering employees of the
Employer. Notwithstanding the foregoing, a Participant will be deemed to have a
total and permanent disability if he or she is determined to be totally disabled
by the Social Security Administration.

 

5.2 DEATH. If a Participant dies, the Participant’s Compensation Deferral
Account shall be valued as provided in Article VI and shall become payable to
the Participant’s designated Beneficiary as provided in Article VI.

 

5.3 TERMINATION OF EMPLOYMENT. If a Participant’s employment relationship with
the Employer is terminated, the full value of his or her Compensation Deferral
Account shall be valued and payable according to the provisions of Article VI.

 

5.4 UNFORSEEABLE EMERGENCY. A Participant may request a distribution due to a
severe financial hardship by submitting a written request to the Administrator
accompanied by evidence to demonstrate that the circumstances being experienced
qualify as an Unforeseeable Emergency. The Administrator shall have the
authority to require such evidence as deemed necessary to determine if a
distribution qualifies under this Section. If an application for a hardship
distribution due to an Unforeseeable Emergency is approved, the distribution
shall be limited to an amount sufficient to meet the emergency (including any
taxes resulting from such distribution). The allowed distribution shall be
payable in a lump sum as soon as practicable after approval of such
distribution.

For purposes of this Plan, an “Unforeseeable Emergency” means a severe financial
hardship to the Participant resulting from an illness or accident of the
Participant, the Participant’s spouse, a dependent of the Participant (as
defined in Code Section 152(a)), or, for distributions on or after January 1,
2007, the Participant’s Beneficiary designated under the Plan, loss of the
Participant’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant. The circumstances that will constitute an “Unforeseeable
Emergency” will depend upon the facts of each case, but in any case, payment may
not be made to the extent that such hardship is or may be relieved:

 

  (a) Through reimbursement or compensation by insurance or otherwise;

 

  (b) By liquidation of the Participant’s assets, to the extent the liquidation
of such assets would not itself cause severe financial hardship; or

 

  (c) By cessation of deferrals under the Plan.

If a hardship can be relieved solely by the cessation of deferrals under this
Plan and other actions described in (a) and (b) above, then the Participant may
elect to cease deferrals as soon as practicable and take such other actions, but
the Participant may not receive a

 

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hardship distribution. If a hardship cannot be relieved solely by the cessation
of deferrals under this Plan and other actions described in (a) and (b) above,
then the Participant must cease deferrals as soon as practicable and take such
other actions before receiving a hardship distribution.

Neither the payment of educational expenses for the Participant or his or her
dependents, nor the purchase of a residence shall be considered an Unforeseeable
Emergency.

In the event of a partial distribution on account of an Unforeseeable Emergency,
the remainder of the Participant’s Account shall be distributed upon the
earliest to occur of the events specified in this Article V.

 

5.5 CHANGE OF CONTROL. If a Change of Control of the Employer occurs, the
Participant’s Compensation Deferral Account at the date of the Change of Control
shall be valued and payable according to the provisions of Article VI. For
purposes of this Plan, a “Change of Control” means an event that both
(i) constitutes a “change in control event” within the meaning of Prop. Treas.
Reg. §1.409A-3(g) (or the corresponding provisions of final regulations under
Code Section 409A) and (ii) is any of the following events:

 

  (a) An acquisition in one or more transactions (other than directly from the
employer) of any voting securities of the Employer by any Person immediately
after which such Person has Beneficial Ownership of fifty percent (50%) or more
of the combined voting power of the Employer’s then outstanding voting
securities; provided, however, in determining whether a Change of Control has
occurred, voting securities which are acquired in a “Non-Control Acquisition”
(as hereinafter defined) shall not constitute an acquisition which would cause a
Change of Control. A “Non-Control Acquisition” shall mean an acquisition by
(i) an employee benefit plan (or a trust forming a part thereof) maintained by
(A) the Employer or (B) any corporation or other Person of which a majority of
its voting power or its voting equity securities or equity interest is owned,
directly or indirectly, by the Employer (for purposes of this definition, a
“Subsidiary”), (ii) the Employer or its Subsidiaries, or (iii) any Person in
connection with a “Non-Control Transaction” (as hereinafter defined);

 

  (b) The individuals who, as of the date hereof are members of the Board (the
“Incumbent Board”), cease for any reason to constitute at least a majority of
the members of the Board or, following a Merger, the board of directors of the
ultimate Parent Corporation; provided, however, that if the election, or
nomination for election by the Employer’s common stockholders, of any new
director was approved by a vote of at least a majority of the Incumbent Board
(or, with respect to the directors who are not “interested persons” as defined
in the Investment Company Act of 1940, by a majority of the directors who are
not “interested persons” serving on the Incumbent Board), such new director
shall, for purposes of this Agreement, be considered as a member of the
Incumbent Board; provided further, however, that no individual shall be
considered a member of the

 

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Incumbent Board if such individual initially assumed office as a result of an
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board (a “Proxy Contest”) including by reason of any
agreement intended to avoid or settle any Proxy Contest; or

 

  (c) The consummation of:

 

  (i) A merger, consolidation or reorganization involving the Employer (a
“Merger”) or an indirect or direct subsidiary of the Employer, or to which
securities of the Employer are issued, unless:

 

  (A) the stockholders of the Employer, immediately before a Merger, own,
directly or indirectly immediately following the Merger, more than fifty percent
(50%) of the combined voting power of the outstanding voting securities of
(x) the corporation resulting from the Merger (the “Surviving Corporation”) if
fifty percent (50%) or more of the combined voting power of the then outstanding
voting securities of the Surviving Corporation is not Beneficially Owned,
directly or indirectly, by another Person or group of Persons (a “Parent
Corporation”), or (y) if there is one or more Parent Corporations, the ultimate
Parent Corporation,

 

  (B) the individuals who were members of the Incumbent Board immediately prior
to the execution of the agreement providing for a Merger constitute at least a
majority of the members of the board of directors of (x) the Surviving
Corporation or (y) the ultimate Parent Corporation, if the ultimate Parent
Corporation, directly or indirectly, owns fifty percent (50%) or more of the
combined voting power of the then outstanding voting securities of the Surviving
Corporation, and

 

  (C) no Person other than (1) the Employer, (2) any Subsidiary, (3) any
employee benefit plan (or any trust forming a part thereof) maintained by the
Employer, the Surviving Corporation, or any Subsidiary, or the ultimate Parent
Corporation, or (4) any Person who, together with its Affiliates, immediately
prior to a Merger had Beneficial Ownership of fifty percent (50%) or more of the
then outstanding voting securities, owns, together with its Affiliates,
Beneficial Ownership of fifty percent (50%) or more of the combined voting power
of the then outstanding voting securities of (x) the Surviving Corporation or
(y) the ultimate Parent Corporation.

Each transaction described in clauses (A) through (C) above shall herein be
referred to as a “Non-Control Transaction.”

 

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  (ii) A complete liquidation or dissolution of the Employer (other than where
assets of the Employer are transferred to or remain with a Subsidiary or
Subsidiaries of the Employer).

 

  (iii) The direct or indirect sale or other disposition of all or substantially
all of the assets of the Employer to any Person (other than (A) a transfer to a
Subsidiary, (B) under conditions that would constitute a Non-Control Transaction
with the disposition of assets being regarded as a Merger for this purpose, or
(C) the distribution to the Employer’s stockholders of the stock of a Subsidiary
or any other assets).

Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
solely because any Person (the “Subject Person”) acquired Beneficial Ownership
of more than the permitted amount of the then outstanding voting securities as a
result of the acquisition of voting securities by the Employer which, by
reducing the number of voting securities then outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Persons,
provided that if a Change of Control would occur (but for the operation of this
sentence) as a result of the acquisition of voting securities by the Employer,
and after such share acquisition by the Employer, the Subject Person becomes the
Beneficial Owner of any additional voting securities which increases the
percentage of the then outstanding voting securities Beneficially Owned by the
Subject Person, then a Change of Control shall occur.

For purposes of the definition of a Change of Control, the term “Employer”
refers to MCG Capital Corporation, but not any other entity that has adopted the
Plan. “Affiliate” means, with respect to any Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person. “Beneficial
Ownership” means ownership within the meaning of Rule 13d-3 promulgated under
the Exchange Act. “Person” means “person” as such term is used for purposes of
Section 13(d) or 14(d) of the Exchange Act, including without limitation, any
individual, corporation, limited liability company, partnership, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity or any group of Persons.

ARTICLE VI

DISTRIBUTION OF BENEFITS

 

6.1 AMOUNT. A Participant (or his or her Beneficiary) shall become entitled to
receive, at such time or times as specified in this Plan, a distribution from
the Employer’s general assets in an amount equal to the Participant’s
Compensation Deferral Account. Determination of the amount to be distributed
shall be based upon the valuation of the Plan Accounts made as of the Valuation
date next preceding the distribution date.

 

6.2 METHOD OF PAYMENT.

 

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  (a) Cash Distributions. All distributions under the Plan shall be made in
cash.

 

  (b) Manner of Distribution. All Compensation Deferrals, whether made before or
after January 1, 2005, are subject to the distribution form election that the
Participant had in place on December 31, 2004, except:

 

  (i) any election to receive the tax liability plus installments form shall be
replaced by the Participant’s election in 2005 pursuant to clause (ii) of this
sentence or, if the Participant does not make such an election, the default form
of a lump sum pursuant to Section 6.2(b);

 

  (ii) Participants are permitted to change their distribution form during the
2005 annual enrollment period to any of the forms permitted under
Section 6.2(b), and such change applies to all Compensation Deferrals and cannot
be changed in the future; and

 

  (iii) Compensation Deferrals of Eligible Employees who make their first
Compensation Deferral elections in the 2005 annual enrollment period or later
are subject to the distribution form elected during the first annual enrollment
period in which they elect to make Compensation Deferrals or, if a Participant
does not make a distribution form election during such annual enrollment period,
the default form of a lump sum pursuant to Section 6.2(b).

The following forms of distribution are permitted under this Section 6.2(b):
(i) a lump sum, or (ii) a fixed number of annual installments not to exceed 20
annual installments. A lump sum payment that is to be made due to termination of
employment as described in Section 5.5 shall be made six months following such
termination of employment. Annual installment payments that are to be made due
to termination of employment as described in Section 5.5 shall not commence for
at least six months following termination of employment.

If a Participant fails to designate properly the form of payment of the
Participant’s Account, such Account will be paid in a lump sum as soon as is
practicable after the Participant becomes entitled to receive payment of
benefit, provided that a lump sum payment that is to be made due to termination
of employment as described in Section 5.5 shall be made six months following
such termination of employment.

If the whole or any part of a distribution hereunder by the Employer, as
applicable, is to be paid in installments, any undistributed amount shall
continue to accrue interest as provided in Section 4.1 under such procedures as
the Employer may establish, in which case any deemed earnings, losses, fees and
charges attributable thereto shall be reflected in the installment
distributions, in accordance with the terms of the Plan.

 

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6.3 DEATH BENEFITS. If a Participant dies before the commencement of payments to
the Participant hereunder, the entire value of the Participant’s Compensation
Deferral Account shall be paid to the person or persons designated in accordance
with Section 7.1.

Upon the death of a Participant after payments hereunder have begun but before
he or she has received all payments to which he or she is entitled under the
Plan, the remaining benefit payments shall be paid to the person or persons
designated in accordance with Section 7.1.

All death benefits payable hereunder shall be paid as soon as practicable after
the date of death of the Participant and shall be paid in a single lump sum.

ARTICLE VII

BENEFICIARIES; PARTICIPANT DATA

 

7.1 DESIGNATION OF BENEFICIARIES. Each Participant from time to time may
designate any person or persons (who may be named contingently or successively)
to receive such benefits as may be payable under the Plan upon or after the
Participant’s death, and such designation may be changed from time to time by
the Participant by filing a new designation. Each designation will revoke all
prior designations by the same Participant, shall be in the form prescribed by
the Employer, and will be effective only when filed in writing with the Employer
during the Participant’s lifetime.

In the absence of a valid Beneficiary designation, or if, at the time any
benefit payment is due to a Beneficiary, there is no living Beneficiary validly
named by the Participant, the Employer shall pay any such benefit payment to the
Participant’s estate.

 

7.2 LOCATING PARTICIPANTS OR BENEFICIARIES. Any communication, statement or
notice addressed to a Participant or to a Beneficiary at his or her last post
office address as shown on the Employer’s records, shall be binding on the
Participant or Beneficiary for all purposes of the Plan. The Employer shall not
be obliged to search for any Participant or Beneficiary beyond the sending of a
registered letter to such last known address. If the Employer notifies any
Participant or Beneficiary that he or she is entitled to an amount under the
Plan and the Participant or Beneficiary fails to claim such amount or make his
or her location known to the Employer within three years thereafter, then,
except as otherwise required by law, if the location of one or more of the next
of kin of the Participant is known to the Employer, the Employer may direct
distribution of such amount to any one or more or all of such next of kin, and
in such proportions as the Employer determines. If the location of none of the
foregoing persons can be determined, the Employer shall have the right to direct
that the amount payable shall be deemed to be a forfeiture and paid to the
Employer, except that the dollar amount of the forfeiture, unadjusted for
investment gains or losses in the interim, shall be paid by the Employer if a
claim for the benefit subsequently is made by the Participant or the Beneficiary
to whom it was payable. If a benefit payable to an unlocated Participant or

 

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Beneficiary is subject to escheat pursuant to applicable state law, the Employer
shall not be liable to any person for any payment made in accordance with such
law.

ARTICLE VIII

ADMINISTRATION AND RECORDKEEPING

 

  8.1 ADMINISTRATIVE AND RECORDKEEPING AUTHORITY. Except as otherwise
specifically provided herein, the Employer shall have the sole responsibility
for and the sole control of the operation, administration and recordkeeping of
the Plan, and shall have the power and authority to take all action and to make
all decisions and interpretations which may be necessary or appropriate in order
to administer and operate the Plan, including, without limiting the generality
of the foregoing, the power, duty and responsibility to:

 

  (a) Resolve and determine all disputes or questions arising under the Plan,
including the power to determine the rights of Participants and Beneficiaries,
and their respective benefits, and to remedy any ambiguities, inconsistencies or
omissions in the Plan.

 

  (b) Adopt such rules of procedure and regulations as in its opinion may be
necessary for the proper and efficient administration of the Plan and as are
consistent with the terms of the Plan.

 

  (c) Establish forms, including without limitation electronic forms, and
procedures for all elections made under the Plan.

 

  (d) Implement the Plan in accordance with its terms and the rules and
regulations adopted as above.

 

  (e) Make determinations concerning the crediting and distribution of
Participants’ Compensation Deferral Accounts.

 

  8.2 UNIFORMITY OF DISCRETIONARY ACTS. Whenever in the administration or
operation of the Plan discretionary actions by the Employer are required or
permitted, such action shall be consistently and uniformly applied to all
persons similarly situated, and no such action shall be taken which shall
discriminate in favor of any particular person or group of persons.

 

  8.3 LITIGATION. In any action or judicial proceeding affecting the Plan, it
shall be necessary to join as a party only the Employer. Except as may be
otherwise required by law, no Participant or Beneficiary shall be entitled to
any notice or service of process, and any final judgment entered in such action
shall be binding on all persons interested in, or claiming under, the Plan.

 

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  8.4 CLAIMS PROCEDURE. Any person claiming a benefit under the Plan (a
“Claimant”) shall present the claim, in writing, to the Employer and the
Employer shall respond in writing. If the claim is denied, the written notice of
denial shall state, in a manner calculated to be understood by the Claimant:

 

  (a) The specific reason or reasons for denial, with specific references to the
Plan provisions on which the denial is based;

 

  (b) A description of any additional material or information necessary for the
Claimant to perfect his or her claim and an explanation of why such material or
information is necessary; and

 

  (c) An explanation of the Plan’s claims review procedure.

The written notice denying or granting the Claimant’s claim shall be provided to
the Claimant within 90 days after the Employer’s receipt of the claim, unless
special circumstances require an extension of time for processing the claim. If
such an extension is required, written notice of the extension shall be
furnished by the Employer to the Claimant within the initial 90 day period and
in no event shall such an extension exceed a period of 90 days from the end of
the initial 90 day period. Any extension notice shall indicate the special
circumstances requiring the extension and the date on which the Employer expects
to render a decision on the claim. Any claim not granted or denied within the
period noted above shall be deemed to have been denied.

Any Claimant whose claim is denied, or deemed to be denied under the preceding
sentence (or such Claimant’s authorized representative), may, within 60 days
after the Claimant’s receipt of notice of the denial, or after the date of the
deemed denial, request a review of the denial by written notice given to the
Employer. Upon such a request for review, the claim shall be reviewed by the
Employer (or its designated representative) which may, but shall not be required
to, grant the Claimant a hearing. In connection with the review, the Claimant
may have representation, may examine pertinent documents, and may submit issues
and comments in writing.

The decision on review normally shall be made within 60 days of the Employer’s
receipt of the request for review. If an extension of time is required due to
special circumstances, the Claimant shall be notified, in writing, by the
Employer, and the time limit for the decision on review shall be extended to 120
days. The decision on review shall be in writing and shall state, in a manner
calculated to be understood by the Claimant, the specific reasons for the
decision and shall include references to the relevant Plan provisions on which
the decision is based. The written decision on review shall be given to the
Claimant within the 60 day (or, if applicable, the 120 day) time limit discussed
above. If the decision on review is not communicated to the Claimant within the
60 day (or, if applicable, the 120 day) period discussed above, the claim shall
be deemed to have been denied upon review. All decisions on review shall be
final and binding with respect to all concerned parties.

 

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ARTICLE IX

AMENDMENT

 

  9.1 RIGHT TO AMEND. The Employer, by written instrument, shall have the right
to amend the Plan at any time and with respect to any provisions hereof, and all
parties hereto or claiming any interest under the Plan shall be bound by such
amendment; provided, however, that no such amendment shall deprive any
Participant or Beneficiary of a benefit accrued hereunder prior to the date of
the amendment, including the right to receive the payment of his or her
Compensation Deferral Account.

 

  9.2 AMENDMENT REQUIRED BY LAW. Notwithstanding the provisions of Section 9.1,
the Plan may be amended at any time, retroactively if required, if found
necessary by the Employer, in order to ensure that the Plan is characterized as
a “top-hat” plan of deferred compensation maintained for a select group of
management or highly compensated employees, as described under ERISA
Section 201(2), 301(a)(3) and 401(a)(1) and to conform the Plan to the
provisions and requirements of Section 409A of the Code and any other applicable
law (including ERISA and the Code).

ARTICLE X

TERMINATION

The Employer reserves the right to terminate the Plan and make distributions to
Participants in accordance with and subject to the rules of Prop. Treas. Reg.
§1.409A-3(h)(2)(viii) (or the corresponding provision of the final regulations
under Code Section 409A) and any generally applicable guidance issued by the
Internal Revenue Service permitting such termination and distribution; provided,
however, that no such termination shall deprive any Participant or Beneficiary
of a benefit accrued hereunder prior to the date of termination.

ARTICLE XI

MISCELLANEOUS

 

  11.1 LIMITATIONS ON LIABILITY OF EMPLOYER. Neither the establishment of the
Plan nor any modification hereof, nor the creation of any account under the
Plan, nor the payment of any benefits under the Plan, shall be construed as
giving to any Participant or any other person any legal or equitable right
against the Employer or any officer or employee thereof, except as provided by
law or by any Plan provision.

 

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  11.2 CONSTRUCTION. If any provision of the Plan is held to be illegal or void,
such illegality or invalidity shall not affect the remaining provisions of the
Plan, but shall be fully severable, and the Plan shall be construed and enforced
as if the illegal or invalid provisions had never been inserted. For all
purposes of the Plan, where the context permits, the singular shall include the
plural, and the plural shall include the singular. Headings of Articles and
Sections herein are inserted only for convenience of reference and are not to be
considered in the construction of the Plan. The laws of the Commonwealth of
Virginia shall govern, control and determine all questions of law arising with
respect to the Plan and the interpretation and validity of its respective
provisions, except where those laws are preempted by the laws of the United
States. Participation in the Plan will not give a Participant the right to be
retained in the service of the Employer nor any right or claim to any benefit
under the Plan unless such right or claim has specifically accrued hereunder.

The Plan is intended to be and at all times shall be interpreted and
administered so as to comply with Section 409A of the Code and to qualify as an
unfunded plan of deferred compensation, and no provision of this Plan shall be
interpreted so as to give any individual any right to any assets of the Employer
which right is greater than the rights of any general unsecured creditor of the
Employer.

 

  11.3 SPENDTHRIFT PROVISION. No amount payable to a Participant or any
Beneficiary under the Plan will, except as otherwise specifically provided by
law, be subject in any manner to anticipation, alienation, attachment,
garnishment, sale, transfer, assignment (either at law or in equity), levy,
execution, pledge, encumbrance, charge or any other legal or equitable process,
and any attempt to do so will be void; nor will any benefit hereunder be in any
manner liable for or subject to the debts, contracts, liabilities, engagements
or torts of the person entitled thereto. Further: (a) the withholding of taxes
from Plan benefit payments, (b) the recovery under the Plan of overpayment of
benefits previously made to a Participant or any Beneficiary, (c) if applicable,
the transfer of benefit rights from the Plan to another plan, or (d) the direct
deposit of Plan benefit payments to an account in a banking institution (if not
actually part of an arrangement constituting an assignment or alienation) shall
not be construed as an assignment or alienation.

In the event that a Participant’s or any Beneficiary’s benefits hereunder are
garnished or attached by order of any court, the Employer may bring an action
for a declaratory judgment in a court of competent jurisdiction to determine the
proper recipient of the benefits to be paid under the Plan. During the pendency
of said action, any benefits that become payable shall be held as credits to a
Participant’s or Beneficiary’s Compensation Deferral Account or, if the Employer
elects, paid into the court as they become payable, to be distributed by the
court to the recipient as it deems proper at the close of said action.

 

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IN WITNESS WHEROF, the Employer has caused this Plan to be amended and restated
effective as of the 1st day of January 1, 2005.

 

ATTEST/WITNESS:

   

MCG CAPITAL CORPORATION

By:         

By:

           Date:      Date:          Title:     

 

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