Exhibit 10.21

SUMMARY PLAN DESCRIPTION

MCG Capital Corporation 401k Plan

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MCG Capital Corporation 401k Plan

 

SUMMARY PLAN DESCRIPTION

     1   

I.

   

BASIC PLAN INFORMATION

     2   

A.

      ACCOUNT      2   

B.

      BENEFICIARY      2   

C.

      DEFERRAL CONTRIBUTION      2   

D.

      EMPLOYEE      2   

E.

      EMPLOYER      2   

F.

      ERISA      2   

G.

      HIGHLY COMPENSATED EMPLOYEE      2   

H.

      NON-HIGHLY COMPENSATED EMPLOYEE      2   

I.

      PARTICIPANT      2   

J.

      PLAN TYPE      3   

K.

      PLAN ADMINISTRATOR      3   

L.

      PLAN NUMBER      3   

M.

      PLAN SPONSOR      3   

N.

      PLAN YEAR      3   

O.

      SERVICE OF PROCESS      3   

P.

      TRUSTEE      3   

II.

   

PARTICIPATION

     3     

A.

   

ELIGIBILITY REQUIREMENTS

     3   

III.

   

CONTRIBUTIONS

     4   

A.

      COMPENSATION      4   

B.

      EMPLOYEE DEFERRAL CONTRIBUTIONS      4        1.  

Regular Deferral Contributions

     4        2.  

Additional Deferrals

     5        3.  

Bonus Contributions

     5        4.  

Age 50 and Over Catch-Up Contributions

     5   

C.

      EMPLOYER MATCHING CONTRIBUTIONS      5        1.  

Discretionary Matching Contributions

     5        2.  

Safe Harbor Matching Contributions

     5   

D.

      NONELECTIVE CONTRIBUTIONS      6        1.  

Discretionary Nonelective Contributions

     6   

E.

      QUALIFIED NONELECTIVE CONTRIBUTIONS      6   

F.

      LIMIT ON CONTRIBUTIONS      6   

G.

      ROLLOVER CONTRIBUTIONS      6   

IV.

   

INVESTMENTS

     7     

A.

   

INVESTMENTS

     7     

B.

   

STATEMENT OF ACCOUNT

     7     

C.

   

ELECTION

     7   

V.

   

VESTING

     7     

A.

   

FORFEITURE AND RE-EMPLOYMENT

     8   

VI.

   

PARTICIPANT LOANS

     9     

A.

   

GENERAL LOAN RULES

     9     

B.

   

SPECIFIC LOAN PROCEDURES

     9       

1.

 

Loan Application

     9       

2.

 

Loan Amount

     9       

3.

 

Number of Loans

     9       

4.

 

Interest Rate

     9       

5.

 

Loan Repayments and Loan Maturity

     10       

6.

 

Default or Termination of Employment

     10   

 

 

 

MCG Capital Corporation 401k Plan    i

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VII.            IN SERVICE WITHDRAWALS    10    A.       HARDSHIP WITHDRAWALS   
10    B.       WITHDRAWALS AFTER AGE 59 1/2    10    C.       WITHDRAWALS AFTER
AGE 70 1/2    11    D.       WITHDRAWALS AFTER NORMAL RETIREMENT AGE    11    E.
      WITHDRAWALS OF ROLLOVER CONTRIBUTIONS    11 VIII.            DISTRIBUTION
OF BENEFITS    11    A.       ELIGIBILITY FOR BENEFITS    11    B.      
DISTRIBUTABLE EVENTS    12       1.       Death    12       2.       Disability
   12       3.       Retirement    12       4.       Minimum Required
Distributions    12       5.       Termination of Employment    12    C.      
FORM OF PAYMENTS    12       1.    Lump Sum Distributions    12          a)   
    Non-rollover Distribution    12          b)        Direct Rollover
Distribution    13          c)        Combination Non-rollover Distribution and
Direct Rollover Distribution    13 IX.            MISCELLANEOUS INFORMATION   
13    A.       BENEFITS NOT INSURED    13    B.       ATTACHMENT OF YOUR ACCOUNT
   14    C.       PLAN-TO-PLAN TRANSFER OF ASSETS    14    D.       PLAN
AMENDMENT    14    E.       PLAN TERMINATION    14    F.       INTERPRETATION OF
PLAN    14    G.       ELECTRONIC DELIVERY    14 X.            INTERNAL REVENUE
CODE TESTS    14    A.       NON-DISCRIMINATION TESTS    15    B.       TOP
HEAVY TEST    15 XI.            PARTICIPANT RIGHTS    15 A.          CLAIMS   
15       1.       Claims Procedures    15       2.       Review Procedures (For
Appeal of an Adverse Benefit Determination)    16 B.          STATEMENT OF ERISA
RIGHTS    17 XII.            SERVICES AND FEES    18 APPENDIX A.   
        INVESTMENT OPTIONS    19

 

 

MCG Capital Corporation 401k Plan    ii

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SUMMARY PLAN DESCRIPTION

MCG CAPITAL CORPORATION 401K PLAN

The MCG Capital Corporation 401k Plan (the “Plan”) of MCG Capital Corporation
has been amended as of 01/01/2011 (the “Effective Date”). This Plan is intended
to be a qualified retirement plan under the Internal Revenue Code.

The purpose of the plan is to enable eligible Employees to save for retirement.
As well as retirement benefits, the plan provides certain benefits in the event
of death, disability, or other termination of employment. The Plan is for the
exclusive benefit of eligible Employees and their Beneficiaries.

This booklet is called a Summary Plan Description (“SPD”) and it contains a
summary in understandable language of your rights and benefits under the plan.
If you have difficulty understanding any part of this SPD, you should contact
the Plan Administrator identified in the Basic Plan Information section of this
document during normal business hours for assistance.

This SPD is a brief description of the principal features of the plan document
and trust agreement and is not meant to interpret, extend or change these
provisions in any way. A copy of the plan document is on file with the Plan
Administrator and may be read by any employee at any reasonable time. The plan
document and trust agreement shall govern if there is a discrepancy between this
SPD and the actual provisions of the plan.

This SPD is based on the federal tax implications of your participation in the
Plan, transactions made within your Account, and distributions you may receive
from the plan. The state tax implications of your participation and these
transactions should be determined based on an examination of appropriate state
law. Please consult with your tax advisor if you have any questions regarding
state tax law.

 

 

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I. Basic Plan Information

The information in this section contains definitions to some of the terms that
may be used in this SPD and general Plan information. If the first letter of any
of the terms defined below is capitalized when it is used within this SPD, then
it represents the indicated defined term.

 

A. Account

An Account shall be established by the Trustee to record contributions made on
your behalf and any related income, expenses, gains or losses. It may also be
referred to as an Account balance.

 

B. Beneficiary

This is the person or persons (including a trust) you designate, or who are
identified by the plan document if you fail to designate or improperly
designate, who will receive your benefits in the event of your death. You may
designate more than one Beneficiary.

 

C. Deferral Contribution

This is a contribution taken directly from the pay of an Employee and
contributed to the Plan, subject to certain limits (described below). The plan
permits you to make only pre-tax Deferral Contributions.

 

D. Employee

An Employee is an individual who is employed by your Employer as a common law
employee or, in certain cases, as a leased employee and is not terminated.

 

E. Employer

The name and address of your Employer is:

MCG Capital Corporation

1100 Wilson Blvd.

Ste. 3000

Arlington, VA 22209

(703) 247-7512

Your Employer’s federal tax identification number is: 54-1889518

 

F. ERISA

The Employee Retirement Income Security Act of 1974 (ERISA) identifies the
rights of Participants and Beneficiaries covered by a qualified retirement plan.

 

G. Highly Compensated Employee

An Employee is considered a highly compensated Employee if (i) at anytime during
the current or prior year you own, or are considered to own, at least five
percent of your Employer, or (ii) received compensation from your Employer
during the prior year in excess of $110,000, as adjusted.

 

H. Non-Highly Compensated Employee

An Employee who is not a Highly Compensated Employee.

 

I. Participant

A participant is an eligible Employee who has satisfied the eligibility and
entry date requirements and is eligible to participate in the Plan or a formerly
eligible Employee who has an account balance remaining in the Plan.

 

 

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J. Plan Type

The MCG Capital Corporation 401k Plan is a defined contribution plan. These
types of plans are commonly described by the method by which contributions for
participants are made to the plan. The MCG Capital Corporation 401k Plan is a
401(k) deferral plan. More information about the contributions made to the plan
can be found in Section III, Contributions.

 

K. Plan Administrator

The Plan Administrator is responsible for the administration of the Plan and its
duties are identified in the plan document. In general, the Plan Administrator
is responsible for providing you and your Beneficiaries with information about
your rights and benefits under the Plan. The name and address of the Plan
Administrator is:

MCG Capital Corporation

1100 Wilson Blvd.

Ste. 3000

Arlington, VA 22209

(703) 247-7512

 

L. Plan Number

The three digit IRS number for the Plan is 001.

 

 

M. Plan Sponsor

Your Employer is the sponsor of the Plan.

 

N. Plan Year

The Plan Year is the twelve-month period ending on the last day of December.
Your Employer may only change or have changed the Plan Year by amending and
restating to a new Plan Document.

 

O. Service of Process

The plan’s agent for service of legal process is the Plan Administrator.

 

P. Trustee

The trustee is responsible for trusteeing the Plan’s assets. The trustee’s
duties are identified in the trust agreement and relate only to the assets in
its possession. The name and address of the Plan’s Trustee are:

Fidelity Management Trust Company

82 Devonshire Street

Boston, MA 02109

II. Participation

 

A. Eligibility Requirements

You are eligible to participate in the Plan if you are an Employee. However, you
are not eligible to participate if you are:

 

  •  

a resident of Puerto Rico

 

  •  

Interns/Temporary Employees. However, if you are in the group(s) listed below,
you shall become eligible to participate in the plan on the first entry date
after you have reached age 21 and have completed at least 1,000 Hours of Service
during an Eligibility Computation Period:

 

  •  

Interns/Temporary Employees.

You are also not eligible to participate if you are an individual who is a
signatory to a contract, letter of agreement, or other document that
acknowledges your status as an independent contractor not entitled to benefits
under the Plan

 

 

MCG Capital Corporation 401k Plan    3

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and you are not otherwise classified by the Employer as a common law employee or
the Employer does not withhold income taxes, file Form W-2 (or any replacement
form), or remit Social Security payments to the Federal government for you, even
if you are later adjudicated to be a common law employee.

You will become eligible to participate in the Plan according to the table
below:

 

Contribution type

  

Age Requirement

  

Service Requirement

  

Entry Date

All Sources    None    None   

First day of Plan Year and first

day of fourth, seventh, and
tenth months

Service with the following predecessor employer, if applicable, shall be counted
for eligibility purposes: Kagan Research, LLC. Once you become a Participant you
are eligible to participate in the Plan until you terminate your employment with
your Employer or become a member of a class of Employees excluded from the Plan.
If you terminate your employment after you have met the eligibility
requirements, and are later re-employed by your Employer, you will again be
eligible to participate in the Plan when you complete one hour of service.

III. Contributions

After you satisfy the participation requirements in Section II of this Summary
Plan Description, you will be eligible to make Deferral Contributions. In
addition, your Employer may make matching and nonelective contributions to your
Account. The type(s) of contributions available under the Plan are described in
this section.

 

A. Compensation

Compensation must be defined to compute contributions under the Plan. For
purposes of determining contributions, only Compensation paid to you for
services you performed while employed as an Eligible Employee shall be
considered. Eligible compensation for computing contributions under the Plan is
the taxable compensation for a Plan Year reportable by your Employer on your IRS
Form W-2, excluding reimbursements or other expense allowances, fringe benefits,
moving expenses, deferred compensation and welfare benefits and including salary
reduction contributions you made to an Employer sponsored cafeteria, qualified
transportation fringe, simplified employee pension, 401(k), 457(b) or 403(b)
plan.

The definition of compensation for your plan for purposes of computing
contributions also excludes certain amounts from certain contribution source
types as indicated in the table below.

 

Source

  

Exclusion (s)

Employee Deferral Contributions, Safe Harbor Match and
Qualified Nonelective Contributions    Severance pay received prior to
termination. Employer Matching Contributions    Severance pay received prior to
termination. Employer Nonelective Contributions    Severance pay received prior
to termination.

Compensation for your first year of eligible Plan participation will be measured
only for that portion of your initial Plan Year that you are eligible. Tax laws
limit the amount of compensation that may be taken into account each Plan Year;
the maximum amount for the 2011 Plan Year is $245,000.

 

B. Employee Deferral Contributions

 

  1. Regular Deferral Contributions

You may elect to defer a percentage of your eligible compensation into the Plan
after you satisfy the Plan’s eligibility requirements. The percentage of your
eligible compensation you elect will be withheld from each payroll and
contributed to an Account in the Plan on your behalf. For pre-tax contributions
being withheld from your compensation, the percentage you defer is subject to an
annual limit of the lesser of 60% of eligible compensation or $16,500 (in 2011;
thereafter as adjusted by the Secretary of the Treasury) in a calendar year.

 

 

MCG Capital Corporation 401k Plan    4

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All Deferral Contributions will be withheld from your pay on a pre-tax basis
(for federal income tax purposes).

Your Deferral Contributions cannot be forfeited for any reason, however, there
are special Internal Revenue Code rules that must be satisfied and may require
that some of your contributions be returned to you. The Plan Administrator will
notify you if any of your contributions will be returned. You may increase or
decrease the amount you contribute as of the next January 1, April 1, July 1, or
October 1. You may also completely suspend your contributions which you may
resume as of the next January 1, April 1, July 1, or October 1. If you want to
increase, decrease, suspend, or resume your Deferral Contributions, you must
call the Fidelity Retirement Benefits Line at 1-800-835-5097 or access the
NetBenefits® web site at www.401k.com.

 

  2. Additional Deferrals

You may make additional Deferral Contributions during the payroll period(s)
designated by your Employer. You may defer a whole percentage between 1 and 100%
of your eligible compensation into the Plan by completing a special election
form. The total amount of your additional, bonus, and regular Deferral
Contributions for the Plan Year may not exceed 60% of your eligible compensation
or other applicable Internal Revenue Code limits. Your Employer may refuse to
accept any or all of your additional Deferral Contributions if they will have an
adverse effect on the Plan’s annually required Internal Revenue Code tests.

 

  3. Bonus Contributions

You may make Deferral Contributions on any Employer paid bonus. You may defer a
whole percentage from 1% to 100% of any bonus designated by your Employer into
the Plan by completing a special election form. The total amount of your bonus,
additional, and regular Deferral Contributions for the Plan Year may not exceed
60% of your eligible compensation or other applicable Internal Revenue Code
limits. If you fail to make an election with regard to bonus compensation, then
your Employer will make a Deferral Contribution into the Plan from your bonus
compensation at the same rate as is in place for your Regular Deferral
Contributions. Your Employer may refuse to accept any or all of your bonus
contribution if it will have an adverse effect on the Plan’s annually required
Internal Revenue Code test.

 

  4. Age 50 and Over Catch-Up Contributions

The Plan provides that participants who are projected to be age 50 or older by
the end of the calendar year and who are making Deferral Contributions to the
Plan may also make a catch-up contribution of up to $5,500 (in 2011; thereafter
as adjusted by the Secretary of the Treasury).

 

C. Employer Matching Contributions

You become eligible for matching contributions only if you make Deferral
Contributions. For purposes of determining your matching contributions under the
Plan, your Contributions will not include Age 50 and Over Catch-Up
Contributions, except in unusual circumstances where otherwise required by the
safe harbor matching contributions formula. Employer matching contributions must
be allocated to your Account in the Plan within prescribed legal time limits.

 

  1. Discretionary Matching Contributions

Discretionary matching contributions will be computed by your Employer based on
your eligible compensation contributed to the Plan each Plan Year.

Your Employer will limit the matching contributions to 4% of your eligible
compensation contributed to the Plan. Your Employer will communicate the amount
of any annual discretionary matching contributions.

 

  2. Safe Harbor Matching Contributions

Your Employer has elected to make matching contributions to all Participants who
are Non-Highly Compensated Employees in an amount equal to 100% of the first
three percent of your eligible compensation, and 50% of the next two percent of
your eligible compensation, contributed to the Plan as Deferral Contributions.
These contributions satisfy certain Internal Revenue Code requirements and
eliminate the need for the Plan to perform certain non-discrimination annual
tests. You will be 100% vested in these contributions when made. These
contributions may be distributed under the same circumstances which allow your
Deferral Contributions to be distributed (i.e., death, disability, separation
from service, age 59 1/2, and termination of the plan without the establishment
of a successor plan) but you may not request a hardship withdrawal of these
contributions. Your Employer will provide written notice to you describing your
rights and obligations under

 

 

MCG Capital Corporation 401k Plan    5

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the Plan generally 30 days to 90 days prior to the beginning of Plan Years for
which these contributions will be made. If you become eligible to participate
during the Plan Year, the notice will be provided no more than 90 days before
you become eligible.

 

D. Nonelective Contributions

 

  1. Discretionary Nonelective Contributions

Your Employer may make discretionary nonelective contributions in an amount to
be determined by the Board of Directors for each Plan Year. You must be employed
as of the last day of the Plan Year to be eligible for any nonelective
contributions that may be made for that Plan Year. Discretionary nonelective
contributions, if any, made to the Plan by your Employer will be allocated to
your Account in the ratio that your eligible compensation bears to the total
eligible compensation paid to all eligible Participants.

 

E. Qualified Nonelective Contributions

Your Employer may designate all or a portion of any nonelective contributions
for a Plan Year as “qualified nonelective contributions” and allocate them to
Non-Highly Compensated Employees to help the Plan pass one or more annually
required Internal Revenue Code nondiscrimination test(s). You will be 100%
vested in these contributions and may not request a hardship withdrawal of these
contributions.

 

F. Limit on Contributions

Federal law requires that amounts contributed by you and on your behalf by your
Employer for a given limitation year generally may not exceed the lesser of:
$49,000 (or such amount as may be prescribed by the Secretary of the Treasury);
or 100% of your annual compensation.

The limitation year for purposes of applying the above limits is the twelve
month period ending December 31st. Contributions under this Plan, along with
Employer contributions under any other Employer-sponsored defined contribution
plans, may not exceed the above limits. If this does occur, then excess
contributions in your Account may be forfeited or refunded to you based on the
provisions of the Plan document. You will be notified by the Plan Administrator
if you have any excess contributions. Income tax consequences may apply on the
amount of any refund you receive.

 

G. Rollover Contributions

You can roll over part or all of an eligible rollover distribution you receive
from an eligible retirement plan into this Plan even if you have not yet
satisfied the age and Eligibility service requirements described in Section II
above; however you will not become a Participant in the Plan and become entitled
to make Deferral Contributions and share in Employer contributions until you
have met the Plan’s eligibility and entry date requirements. An eligible
retirement plan is a qualified plan under Section 401(a), a 403(a) annuity plan,
a 403(b) annuity contract, an eligible 457(b) plan maintained by a governmental
employer, and an individual retirement account and individual retirement
annuity. An eligible rollover distribution includes any distribution from an
eligible retirement plan, except any distribution from an individual retirement
account or an individual retirement annuity consisting of nondeductible
contributions or any distribution from a 403(b) annuity contract consisting of
after-tax employee contributions. Making Rollover Contributions to the Plan that
consist of assets other than qualified 401(a) plan assets may result in the loss
of favorable capital gains or ten year income averaging tax treatment that may
otherwise be available with respect to a lump sum distribution to you from the
Plan. The loss of this favorable tax treatment may also occur if you make a
Rollover Contribution to the Plan that consists of qualified 401(a) plan assets
under certain circumstances. If you may be eligible for this special tax
treatment, you should consult your tax advisor and carefully consider the impact
of making a Rollover Contribution to the Plan.

The Plan Administrator must approve any Rollover Contribution and reserves the
right to refuse to accept any such contribution. If your Rollover Contribution
to the Plan is not a direct rollover (i.e., you received a cash distribution
from your eligible retirement plan), then it must be received by the Trustee
within 60 days of your receipt of the distribution. Rollover Contributions may
only be made in the form of cash, allowable fund shares, or (if the Plan allows
new loans in accordance with the terms of this SPD) promissory notes from an
eligible retirement plan. Your Rollover Contributions Account will be subject to
the terms of this Plan and will always be fully vested and nonforfeitable. In
general, if you receive an eligible rollover distribution as a surviving spouse
of a participant or as

 

 

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a spouse or former spouse who is an “alternate payee” pursuant to a qualified
domestic relations order (“QDRO”), you may also make a Rollover Contribution to
the Plan.

The Plan will not accept a Rollover Contribution of any amounts attributable to
Roth (after-tax deferral) contributions made to another plan.

IV. Investments

 

A. Investments

The Employee Retirement Income Security Act of 1974 (ERISA) imposes certain
duties on the parties who are responsible for the operation of the Plan. These
parties, called fiduciaries, have a duty to invest Plan assets in a prudent
manner. However, an exception exists for plans that comply with ERISA
Section 404(c) and permit a Participant to exercise control over the assets in
his/her Account and choose from a broad range of investment alternatives. This
Plan is intended to be a Section 404(c) plan. To the extent that you have
directed the investment of assets in your Account under the Plan, you are
responsible for the investment decisions you made relating to those assets and
the Plan fiduciaries are not responsible for any losses resulting from your
investment instructions. In addition, you have the right to direct the trustee
regarding mutual fund proxy voting based on the number of shares you own. Please
see Appendix A for a list of the investments currently available under the Plan.
If you want additional information about any investment alternative, you may
request any of the following information by contacting Fidelity by calling
1-800-835-5097 or by accessing NetBenefits® at www.401k.com:

 

  •  

A description of the annual operating expenses of each investment fund (e.g.,
investment management fees, administrative fees, transaction costs) which reduce
the rate of return to you, and the aggregate amount of such expenses expressed
as a percentage of average net assets of the designated investment alternative;

 

  •  

Prospectuses, financial statements and reports, plus any other material provided
to the Plan which relates to the available investment alternatives;

 

  •  

A list of the assets comprising the portfolio of each investment fund that
constitute plan assets within the meaning of 29 CFR 2510.3 -101, the value of
each such asset (or the proportion of the investment fund which it comprises),
and with respect to each such asset which is a fixed rate investment contract
issued by a bank, savings and loan association or insurance company, the name of
the issuer of the contract, the term of the contract and the rate of return on
the contract;

 

  •  

Information concerning the value of shares or units of the investment funds
available to you under the Plan, as well as the past investment performance of
such funds, determined net of expenses, on a reasonable and consistent basis;
and

 

  •  

Information concerning the value of shares or units in the investment funds held
in your Plan account.

 

B. Statement of Account

The assets in the Plan are invested in available investment options and a
separate Account is established for each Participant who receives and/or makes a
contribution. The value of your Account is updated each business day to reflect
any contributions, exchanges between investment options, investment earnings or
losses for each investment option and withdrawals. Your account statement is
available online through NetBenefits® at www.401k.com. You can view and print a
statement for any time period up to 24 previous months. A statement is also
available to be automatically mailed to you every three months. You can initiate
these mailings by logging on to NetBenefits® and selecting Mail Preferences
under the Accounts tab.

 

C. Election

The Plan is intended to qualify as a Participant-directed plan under
Section 404(c) of ERISA. This means that you are responsible for your investment
decisions under the plan and any resulting investment activity. The plan
fiduciaries, including, but not limited to, Fidelity Management Trust Company
and MCG Capital Corporation, are not responsible for any losses incurred as a
result of your investment decisions.

V. Vesting

 

 

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The term “vesting” refers to your nonforfeitable right to the money in your
Account. You receive vesting credit for the number of years that you have worked
for your Employer. In addition, service with the following Employer will be
included to determine the number of years of service for vesting purposes: Kagan
Research, LLC.

If you terminate your employment with your Employer, you may be able to receive
a portion or all of your Account based on your vested percentage. You are always
100% vested in your Rollover Contributions, Qualified Nonelective Contributions,
Deferral Contributions, Safe Harbor Matching Employer Contributions and any
earnings thereon. Your Employer Matching Contributions and Employer Nonelective
Contributions and any earnings thereon will be vested in accordance with the
following schedule:

 

Years of Service    Vesting Percentage

less than 1

   0

1

   20

2

   40

3

   60

4

   80

5

   100

Vesting under the Plan is based upon the elapsed time method. Hours of service
are not counted and instead periods of service are computed. A period of service
starts with your date of employment and, generally, ends on your date of
termination. Only your whole years of service with your Employer will be counted
to compute your years of service for vesting purposes. For example, if you work
three years and ten months then for vesting purposes you will receive credit for
three years of service.

 

A. Forfeiture and Re-employment

If you terminate your employment with your Employer and are less than 100%
vested in your Employer Account, you may forfeit the non-vested portion of your
Employer Account. A forfeiture will occur in the Plan Year that you receive a
distribution of your entire vested Account, or if you do not receive a
distribution, after five consecutive one year breaks in service. Forfeitures are
retained in the Plan and may first be used to pay administrative expenses. Any
remaining amounts will be used to reduce future Employer contributions payable
under the Plan.

Example: (This example is for illustration purposes only.) Assuming you
terminate your employment in 2011 with the following Account:

 

Source    Amount     

Vested

Percentage

   

Vested

Amount

 

Employee

   $ 2,000         100 %†    $ 2,000   

Employer

   $ 1,000         80 %      800                       

Total

   $ 3,000         $ 2,800   

You received a $2,800 distribution in 2011 from the Plan. This represented a
complete distribution of your Account. A $200 forfeiture will occur in 2011.

 

† You are always 100% vested in your own employee Deferral Contributions and
earnings in the Plan.

A one-year break in service occurs when you have less than one hour of service
in the twelve consecutive month period beginning with the earlier of the day
your employment terminates or the 12 month anniversary of the date on which you
are otherwise first absent from service. Notwithstanding the above, if you are
absent from work due to a maternity or paternity leave, then the 12-consecutive
month period beginning on the first anniversary of the first date of that
absence will not be a one-year break in service, and if you are absent from work
due to a leave of absence under the Family and Medical Leave Act, no
12-consecutive month period beginning on the first anniversary of the first date
of that absence, and subsequent anniversaries, during which the absence
continues, will be a one-year break in service, provided you return to work
following the leave.

 

 

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When any period of absence is due to military service entitling you to
reemployment rights under federal law and you return to work at the Employer or
a Related Employer following that absence, there will be no break in service and
you will be credited with service for the entire period of that absence.

If you were a Participant when you terminated your employment and are
re-employed by your Employer, then you will again become a Participant on the
date you complete one hour of service. Your period of employment before you were
rehired is referred to as your pre-break service. Your period of employment
after you were rehired is referred to as your post-break service. If you are
re-employed after incurring five consecutive one-year breaks in service then
your post-break service will not count in determining your vesting percentage in
your pre-break Account balance. Your post-break service will count in
determining your vesting percentage in your pre-break Account balance and any
forfeited amounts will be restored to your Account if:

 

  (1) You are re-employed by your Employer before you incur five consecutive
one-year breaks in service, and

 

  (2) If you received distribution of your vested Account and you repay the full
amount of the distribution before the end of the five-year period that begins on
the date you are re-employed.

Example: Assume you terminate employment with your Employer in 2011 with an
Account balance of $3,000, of which $2,800 is vested. You elect to receive a
lump sum distribution of your vested Account balance. The remainder, or $200, is
forfeited in 2011. If you are rehired on January 1, 2012 and repay the $2,800
distribution prior to January 1, 2017, the $200 previously forfeited will be
restored to your Account. Additionally, your service after January 1, 2012 is
counted toward vesting your pre-break Account balance of $3,000.

VI. Participant Loans

 

A. General Loan Rules

Loans shall be made available to all qualifying Participants on a reasonably
equivalent basis. Loans are not considered distributions and are not subject to
Federal or state income taxes, provided they are repaid as required. While you
do have to pay interest on your loan, both the principal and interest are
deposited in your Account.

 

B. Specific Loan Procedures

 

  1. Loan Application

If you have met the Plan’s eligibility and entry date requirements, you may
apply for a loan by calling the Fidelity Retirement Benefits Line,
1-800-835-5097 or by accessing the NetBenefits® web site at www.401k.com. All
telephone calls will be recorded. You may apply for only one loan each calendar
year. All loans have been pre-approved by the Plan Administrator based on the
criteria outlined in the Plan’s loan procedures. Loans will be allowed for any
purpose. A loan set up fee of $175 will be deducted from your Account for each
new loan processed.

 

  2. Loan Amount

The minimum loan is $1,000 and the maximum amount is the lesser of one-half of
your vested Account balance or $50,000 reduced by the highest outstanding loan
balance in your Account during the prior twelve month period. All of your loans
from plans maintained by your Employer or a Related Employer will be considered
for purposes of determining the maximum amount of your loan. Up to 50% of your
vested Account balance may be used as collateral for any loan.

 

  3. Number of Loans

You may only have 1 loan outstanding at any given time. If you have an existing
loan you may not apply for another loan until the existing loan is paid in full.

 

  4. Interest Rate

All loans shall bear a reasonable rate of interest as determined by the Plan
Administrator based on the prevailing interest rates charged by persons in the
business of lending money for loans which would be made under similar
circumstances. The interest rate shall remain fixed throughout the duration of
the loan.

 

 

MCG Capital Corporation 401k Plan    9

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  5. Loan Repayments and Loan Maturity

All loans must be repaid in level payments through after-tax payroll deductions
on at least a quarterly basis over a five year period unless it is for the
purchase of your principal residence in which case the loan repayment period may
not extend beyond 10 years from the date of the loan. If repayment is not made
by payroll deduction, a loan shall be repaid to the Plan by payment to the
Employer. The level repayment requirement may be waived for a period of one year
or less if you are on a leave of absence, however, your loan must still be
repaid in full on the maturity date. If you are on a military leave of absence,
the repayment schedule may be waived for the entire length of the time missed on
leave. Your loan will accrue interest during this time, and upon return from a
military leave of absence, your loan will be reamortized to extend the length of
the loan by the length of the leave. If a loan is not repaid within its stated
period, it will be treated as a taxable distribution to you.

 

  6. Default or Termination of Employment

The Plan Administrator shall consider a loan in default if any scheduled
repayment remains unpaid as of the last business day of the calendar quarter
following the calendar quarter in which a loan is initially considered past due.
In the event of a default, death, disability or termination of employment, the
entire outstanding principal and accrued interest shall be immediately due and
payable. However, if your termination of employment results from a corporate
action on the part of your employer and you remain performing the same job after
that corporate action, within 60 days of your termination of employment you may
request that the Plan Administrator roll over your loan to your new employer’s
retirement plan (if such new plan will accept your loan roll over). Unless you
roll over your loan, any default in repayment to the Plan will result in the
treating of the balance due for your loan as a taxable distribution from the
Plan.

VII. In Service Withdrawals

The following types of withdrawals are available under the Plan:

 

A. Hardship Withdrawals

If you are an Employee and request a hardship withdrawal and it is approved by
the Plan Administrator, you may withdraw certain contributions to satisfy the
following immediate and heavy financial needs: (1) medical expenses for you,
your spouse, children, dependents or a primary beneficiary designated by you
under the Plan; (2) the purchase of your principal residence; (3) to prevent
your eviction from, or foreclosure on, your principal residence; (4) to pay for
post-secondary education expenses (tuition, related educational fees, room and
board) for you, your spouse, children, dependents or a primary beneficiary
designated by you under the Plan for the next twelve months; (5) to make
payments for burial or funeral expenses for your deceased parent, spouse, child,
dependent or a primary beneficiary designated by you under the Plan; (6) to pay
expenses for the repair of damage to your principal residence that would qualify
for the casualty deduction under Section 165 of the Internal Revenue Code
(without regard to whether the loss exceeds 10% of adjusted gross income); or
any other immediate and heavy financial need as determined based on Internal
Revenue Service regulations. In accordance with Internal Revenue Service
regulations, you must first exhaust all other assets reasonably available to you
prior to obtaining a hardship withdrawal. This includes obtaining a loan from
this Plan and any other qualified plan maintained by your Employer. Your
Deferral Contributions to this Plan, and any other Employer-sponsored qualified
or non-qualified plan, will be suspended for six months after your receipt of
the hardship withdrawal. The minimum hardship withdrawal is $500. Hardship
withdrawals will be subject to the 10% nonperiodic income tax withholding rate
unless you elect out of the withholding. Contributions available to withdraw
under the terms of this section are:

 

B.

Withdrawals After Age 59 1/2

If you have reached age 59 1/2, then you may elect to withdraw all or a portion
of your employee Deferral Contributions Account while you are still employed by
your Employer.

 

 

MCG Capital Corporation 401k Plan    10

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C.

Withdrawals After Age 70 1/2

Starting in the calendar year in which you reach age 70 1/2, you may elect to
receive distributions calculated in the same manner as Minimum Required
Distributions. For more information, please refer to the paragraph so entitled
under the Distributable Events subsection of this SPD’s section on Distribution
of Benefits below.

 

D. Withdrawals After Normal Retirement Age

You may elect to withdraw your vested Account balance after you reach the Plan’s
normal retirement age, 65, or delay it until you retire. Notwithstanding the
above, by law certain contributions including employee deferral, qualified
matching, safe harbor matching, qualified nonelective, and safe harbor
nonelective contributions cannot be withdrawn prior to age 59 1/2.

 

E. Withdrawals of Rollover Contributions

If you have a balance in your rollover contributions Account, you may elect to
withdraw all or a portion of it. There is no limit on the number of withdrawals
of this type.

The amount of any taxable withdrawal that is not rolled over into an Individual
Retirement Account or another qualified employer retirement plan will be subject
to Federal and state, if applicable, income taxes. In general, the amount of any
taxable withdrawal that is not rolled over into an Individual Retirement Account
or another qualified employer retirement plan will be subject to 20% Federal
Income Tax and any applicable State Income Tax. A 10% Internal Revenue Code
early withdrawal penalty tax may apply to the amount of your withdrawal if you
are under the age of 59 1/2 and do not meet one of the Internal Revenue Code
exceptions.

The Plan Administrator will notify you of the appropriate procedures to make a
withdrawal from the Plan. Consult your Plan Administrator for more information.

VIII. Distribution of Benefits

 

A. Eligibility For Benefits

A distribution can be made to you if you request one due to your disability,
retirement, or termination of employment from your Employer and any Related
Employer. Your Beneficiary or Beneficiaries may request a distribution of your
vested Account balance in the event of your death. The value of your Account
balance will continue to increase or decrease, as appropriate, based on the
investment returns until it is distributed.

You may defer receipt of your distribution until a later date. However, you
cannot postpone it if your vested Account balance is $5,000 or less in which
case the Plan Administrator will direct the Trustee that any amount exceeding
$1,000 be distributed to an Individual Retirement Account or Annuity (“IRA”) for
your benefit. If your vested Account balance is $1,000 or less, the Plan
Administrator will direct the Trustee to distribute it to you as a lump sum
distribution without your consent. Prior to such distribution you still have the
right to request that the amount be distributed directly to you in the form of a
lump sum payment or to request that it be rolled-over to a different IRA
provider or another retirement plan eligible to receive rollover contributions.

If you fail to request a different treatment of an automatic distribution under
the Plan’s Cash-Out Provision, your distribution will be paid over to an IRA
provider chosen by the Plan Administrator and invested in a product designed to
preserve the principal of that distribution while still providing a reasonable
rate of return and preserving liquidity. The fees assessed against this newly
established IRA by its provider will be paid by the participant.

If you have questions regarding the Plan’s automatic rollover rules, the Plan’s
IRA provider for automatic rollovers, or the fees and expenses applicable to the
automatic rollover IRA, please contact the Plan Administrator. Your consent will
be required for any distribution if your vested Account balance is greater than
$5,000.

You should consult with your tax advisor to determine the financial impact of
your situation before you request a distribution. You may apply for a
distribution by calling the Fidelity Retirement Benefits Line at 1-800-835-5097
and/or by accessing the NetBenefits® web site at www.401k.com. All telephone
calls will be recorded. Most distributions have been pre-approved by the Plan
Administrator.

 

 

MCG Capital Corporation 401k Plan    11

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B. Distributable Events

You are eligible to request a distribution of your vested Account balance based
on any of the following events:

 

  1. Death

If you are a Participant in the Plan and die, your vested Account balance, if
any, will be paid to your designated Beneficiary or Beneficiaries. If you are an
Employee of your Employer or a Related Employer at the time of your death, your
Account balance will automatically become 100% vested. You may designate a
Beneficiary or Beneficiaries on a designation form that must be properly signed
and filed with the Plan Administrator. If you are married and want to designate
someone other than your spouse as your primary Beneficiary, your spouse must
consent to this designation by signing the form. His/her signature must be
witnessed by a Plan representative or a notary public. You should contact the
Plan Administrator to obtain a designation of beneficiary form.

 

  2. Disability

If you become disabled while you are employed by your Employer or a Related
Employer, so that you are determined disabled by a physician selected by the
Plan Administrator, the full value of your Account balance may be distributed to
you upon request. You will automatically become 100% vested in your Account
balance when you become disabled. You may request a distribution of your Account
balance only if you terminate your employment with your Employer or Related
Employer.

 

  3. Retirement

You do not have to terminate your employment with your Employer just because you
attain your early retirement age of 62 and complete 5 years of service or you
attain your normal retirement age of 65. You will automatically become 100%
vested in your Account balance upon meeting the retirement requirements. You may
take an early retirement distribution at or after age 62 and after you complete
5 years of service, but you must first terminate your employment with your
Employer or Related Employer.

 

  4. Minimum Required Distributions

You are required by law to receive a minimum required distribution from the
Employer’s Plan, unless you are a five percent owner of the Employer, no later
than April 1 of the calendar year following the calendar year you turn 70 1/2 or
terminate your employment, whichever is later. If you are a five percent owner
of the Employer, you must start receiving your distribution no later than
April 1 of the calendar year following the calendar year you turn 70 1/2. Once
you start receiving your minimum required distribution, you should receive it at
least annually and you should complete the appropriate documentation each year
until all assets in your Account are distributed. If you have any questions
about your minimum required distributions, please contact your Plan
Administrator.

 

  5. Termination of Employment

Generally, if you terminate your employment with your Employer and all Related
Employers, you may elect to receive a distribution of your vested Account
balance from the Plan.

 

C. Form of Payments

 

  1. Lump Sum Distributions

Your entire vested Account balance will be paid to you in a single distribution
or other distribution that you elect.

 

  a) Non-rollover Distribution

Any distribution paid directly to you will be subject to mandatory Federal
income tax withholding of 20% of the taxable distribution and the remaining
amount will be paid to you. You cannot elect out of this tax withholding but you
can avoid it by electing a direct rollover distribution as described below. This
withholding is not a penalty but a prepayment of your Federal income taxes.

You may rollover the taxable distribution you receive to an individual
retirement account (IRA) or your new employer’s qualified plan, if it accepts
rollover contributions and you roll over this distribution within 60 days after
receipt. You will not be taxed on any amounts timely rolled over into the IRA or
your new

 

 

MCG Capital Corporation 401k Plan    12

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employer’s qualified Plan until those amounts are later distributed to you. Any
amounts not rolled over may also be subject to certain early withdrawal
penalties prescribed under the Internal Revenue Code.

 

  b) Direct Rollover Distribution

As an alternative to a non-rollover distribution, you may request that your
entire distribution be rolled directly into a Fidelity IRA, a non-Fidelity IRA
or to your new employer’s qualified plan if it accepts rollover contributions.
Federal income taxes will not be withheld on any direct rollover distribution.

When you call the Fidelity Retirement Benefits Line to take a withdrawal, you
will be asked whether you will be rolling over any part of your distribution. If
you wish to have any part of your distribution rolled over to an IRA or another
qualified plan, you will need to speak to a Fidelity representative.

 

  1. Rollover to Fidelity IRA – You will be asked whether you have received a
Fidelity Service for Exiting Employees (‘SEE’) Rollover IRA Kit. If you haven’t
received a SEE Kit, the Fidelity representative will send out one. Then, your
rollover request will be entered on the system and will pend (for up to 90 days)
until the Rollover IRA account is set up. You must return the signed Rollover
IRA application to Fidelity’s Retail Customer Service Department (in Dallas, TX)
in order to set up the Rollover IRA account. Once the Rollover IRA account has
been set up, your vested Account balance will be transferred to the Fidelity
Rollover IRA.

 

  2. Rollover to Non-Fidelity IRA – A check will be issued by the Trustee
payable to the IRA custodian or trustee for your benefit. The check will contain
the notation ‘Direct Rollover’ and it will be mailed directly to you. You will
be responsible for forwarding it on to the custodian or trustee. You must
provide the Plan Administrator with complete information to facilitate your
direct rollover distribution.

 

  3. Rollover to your New Employer’s Qualified Plan – You should check with your
new employer to determine if its plan will accept rollover contributions. If
allowed, then a check will be issued by the Trustee payable to the trustee of
your new employer’s qualified plan. The check will contain the notation ‘Direct
Rollover’ and it will be mailed directly to you. You will be responsible for
forwarding it on to the new trustee. You must provide the plan Administrator
with complete information to facilitate your direct rollover distribution.

 

  c) Combination Non-rollover Distribution and Direct Rollover Distribution

You may request that part of your distribution be paid directly to you and the
balance rolled into an IRA, your new employer’s retirement plan, or a 403(a)
annuity. Any part of the distribution paid directly to you will be subject to
the Federal income tax withholding rules referred to in subsection a) above and
any direct rollover distribution will be made in accordance with section b)
above. Your direct rollover distribution must be at least $500.

You will pay income tax on the amount of any taxable distribution you receive
from the Plan unless it is rolled into an IRA or your new employer’s qualified
Plan. A 10% IRS premature distribution penalty tax may also apply to your
taxable distribution unless it is rolled into an IRA or another qualified plan.
The 20% Federal income tax withheld under this section may not cover your entire
income tax liability. In the case of a combination distribution, if any portion
of the eligible rollover distribution consists of after-tax contributions, the
amount paid directly to you will be considered to consist completely of
after-tax contributions before any after-tax contributions are attributed to the
portion paid as a direct rollover. Consult with your tax advisor for further
details.

IX. Miscellaneous Information

 

A. Benefits Not Insured

Benefits provided by the Plan are not insured or guaranteed by the Pension
Benefit Guaranty Corporation under Title IV of the Employee Retirement Income
Security Act of 1974 because the insurance provisions under ERISA are not
applicable to this particular Plan. You will only be entitled to the vested
benefits in your Account based upon the provisions of the Plan and the value of
your Account will be subject to investment gains and losses.

 

 

MCG Capital Corporation 401k Plan    13

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B. Attachment of Your Account

Your Account may not be attached, garnished, assigned or used as collateral for
a loan outside of this Plan except to the extent required by law. Your creditors
may not attach, garnish or otherwise interfere with your Account balance except
in the case of a proper Internal Revenue Service tax levy or a Qualified
Domestic Relations Order (QDRO). A QDRO is a special order issued by the court
in a divorce, child support or similar proceeding. In this situation, your
spouse, or former spouse, or someone other than you or your Beneficiary, may be
entitled to a portion or all of your Account balance based on the court order.
Participants and Beneficiaries can obtain, without a charge, a copy of QDRO
procedures from the Plan Administrator.

 

C. Plan-to-Plan Transfer Of Assets

Your Employer may direct the Trustee to transfer all or a portion of the assets
in the Account of designated Participants to another plan or plans maintained by
your Employer or other employers subject to certain restrictions. The plan
receiving the Trust Funds must contain a provision allowing the transfer and
preserve any benefits required to be protected under existing laws and
regulations. In addition, a Participant’s vested Account balance may not be
decreased as a result of the transfer to another plan.

 

D. Plan Amendment

Your Employer reserves the authority to amend certain provisions of the Plan by
taking the appropriate action. However, any amendment may not eliminate certain
forms of benefits under the Plan or reduce the existing vested percentage of
your Account balance derived from Employer contributions. If you have three or
more years of service with your Employer and a Related Employer and the vesting
schedule is amended, then you will be given a choice to have the vested
percentage of future Employer contributions made to your Account computed under
the new or the old vesting schedule. The Plan Administrator will provide you
with the appropriate information to make an informed decision if the Plan’s
vesting schedule is amended.

 

E. Plan Termination

Your Employer has no legal or contractual obligation to make annual
contributions to or to continue the Plan. Your Employer reserves the right to
terminate the Plan at any time by taking appropriate action as circumstances may
dictate, with the approval of the Board of Directors. In the event the Plan
should terminate, each Participant affected by such termination shall have a
vested interest in his Account of 100 percent. The Plan Administrator will
facilitate the distribution of Account balances in single lump sum payments to
each Participant in accordance with Plan provisions until all assets have been
distributed by the Trustee. Each Participant in the Plan upon Plan termination
will automatically become 100% vested in his/her Account balance.

 

F. Interpretation of Plan

The Plan Administrator has the power and discretionary authority to construe the
terms of the Plan based on the Plan document, existing laws and regulations and
to determine all questions that arise under it. Such power and authority
include, for example, the administrative discretion necessary to resolve issues
with respect to an Employee’s eligibility for benefits, credited services,
disability, and retirement, or to interpret any other term contained in Plan
documents. The Plan Administrator’s interpretations and determinations are
binding on all Participants, Employees, former Employees, and their
Beneficiaries.

 

G. Electronic Delivery

This Summary Plan Description and other important Plan information may be
delivered to you through electronic means. This Summary Plan Description
contains important information concerning the rights and benefits of your Plan.
If you receive this Summary Plan Description (or any other Plan information)
through electronic means you are entitled to request a paper copy of this
document, free of charge, from the Plan Administrator. The electronic version of
this document contains substantially the same style, format and content as the
paper version.

X. Internal Revenue Code Tests

 

 

MCG Capital Corporation 401k Plan    14

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A. Non-Discrimination Tests

The Plan must pass Internal Revenue Code non-discrimination tests as of the last
day of each Plan Year to maintain a qualified Plan. These tests are intended to
ensure that the amount of contributions under the Plan do not discriminate in
favor of Highly Compensated Employees. In order to meet the tests, your Employer
encourages participation from all eligible Employees. Depending upon the results
of the tests, the Plan Administrator may have to refund Deferral Contributions
contributed to the Plan and vested matching contributions to certain Highly
Compensated Employees, as determined under Internal Revenue Service regulations.
Deferral Contributions or matching contributions will be refunded to you from
applicable investment options. You will be notified by the Plan Administrator if
any of your contributions will be refunded to you.

 

B. Top Heavy Test

The Plan is subject to the Internal Revenue Code “top-heavy” test. Each Plan
Year, the Plan Administrator tests this Plan, together with any other
Employer-sponsored qualified plans that cover one or more key employees, to
ensure that no more than 60% of the benefits are for key employees. If this Plan
is top-heavy, then your Employer may be required to make a minimum annual
contribution on your behalf to this, or another Employer sponsored plan, if you
are employed as of Plan Year-end. In addition, the following vesting schedule
will be used instead of the one previously listed in the vesting section of this
Summary Plan Description.

 

Years of Service    Vesting Percentage

less than 1

   0

1

   20

2

   40

3

   60

4

   80

5

   100

XI. Participant Rights

 

A. Claims

 

  1. Claims Procedures

A plan participant or beneficiary may make a claim for benefits under the Plan.
Any such claim you file must be submitted to the Plan Administrator in a form
and manner acceptable to the Plan Administrator. Contact your Plan Administrator
for more information. Generally, the Plan Administrator will provide you with
written notice of the disposition of your claim within 90 days after receipt of
your claim by the Plan. If the Plan Administrator determines that special
circumstances require an extension of time to process your claim, the Plan
Administrator will furnish written notice of the extension to the claimant prior
to the expiration of the initial 90-day period. In no event shall such extension
exceed a period of 90 days from the end of the initial period the Plan
Administrator had to dispose of your claim. The extension notice shall indicate
the special circumstances requiring an extension of time and the date by which
the Plan expects to render the benefit determination. (A different procedure
applies for disability related claims – see the next paragraph). In the event
the claim is denied, the Plan Administrator will disclose to you in writing the
specific reasons for the denial, a reference to the specific provisions of the
Plan on which the determination is based, a description of additional material
or information necessary for the claimant to perfect the claim and an
explanation of why it is required, and information about the steps that must be
taken to submit a timely request for review, including a statement of your right
to bring a civil action under Section 502(a) of ERISA following as adverse
determination upon review.

If your claim concerns disability benefits under the Plan, the Plan
Administrator must notify you in writing within 45 days after you have filed
your claim in order to deny it. If special circumstances require an extension

 

 

MCG Capital Corporation 401k Plan    15

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of time to process your claim, the Plan Administrator must notify you before the
end of the 45-day period that your claim may take up to 30 days longer to
process. If special circumstances still prevent the resolution of your claim,
the Plan Administrator may then only take up to another 30 days after giving you
notice before the end of the original 30-day extension. If the Plan
Administrator gives you notice that you need to provide additional information
regarding your claim, you must do so within 45 days of that notice.

 

  2. Review Procedures (For Appeal of an Adverse Benefit Determination)

You may appeal the denial of your claim made under the procedures described
above within 60 days after the date following your receipt of notification of
the denied claim (a different procedure applies for disability related claims –
see the next paragraph) by filing a written request for review with the Plan
Administrator. This written request may include comments, documents, records,
and other information relating to your claim for benefits. You shall be
provided, upon your request and free of charge, reasonable access to, and copies
of, all documents, records, and other information relevant to your claim for
benefits. The review will take into account all comments, documents, records,
and other information submitted by you relating to the claim, without regard to
whether such information was submitted or considered in the initial benefit
determination. Generally, the Plan Administrator will provide you with written
notice of the disposition of your claim on review within 60 days after receipt
of your appeal by the Plan. If the Plan Administrator determines that special
circumstances require an extension of time to process your claim, the Plan
Administrator will furnish written notice of the extension to the claimant prior
to the expiration of the initial 60-day period. In no event shall such extension
exceed a period of 60 days from the end of the initial period the Plan
Administrator had to dispose of your claim. The extension notice shall indicate
the special circumstances requiring an extension of time and the date by which
the Plan expects to render the benefit determination. (A different procedure
applies for disability related claims – see the next paragraph). In the event
the claim on review is denied, the Plan Administrator will disclose to you in
writing the specific reasons for the denial, a reference to the specific
provisions of the Plan on which the determination is based, a description of
additional material or information necessary for the claimant to perfect the
claim and an explanation of why it is required, and information about the steps
that must be taken to submit a timely request for review, including a statement
of your right to bring a civil action under Section 502(a) of ERISA following as
adverse determination upon review.

If your initial claim was for disability benefits under the Plan and has been
denied by the Plan Administrator, you have 180 days from the date you receive
notice of your denial in which to appeal that decision. Your review will be
handled completely independently of the findings and decision made regarding
your initial claim and will be processed by an individual who is not a
subordinate of the individual who denied your initial claim. If your claim
requires medical judgment, the individual handling your appeal will consult with
a medical professional who was not consulted regarding your initial claim and
who is not a subordinate of anyone consulted regarding your initial claim and
identify that medical professional to you. The Plan Administrator must notify
you in writing within 45 days after you have filed your claim in order to deny
it. If the Plan Administrator determines that special circumstances require an
extension of time to process your claim, the Plan Administrator will furnish
written notice of the extension to the claimant prior to the expiration of the
initial 45-day period. In no event shall such extension exceed a period of 45
days from the end of the initial period the Plan Administrator had to dispose of
your claim. The extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the Plan expects to render
the benefit determination.

The Plan Administrator shall notify you of the Plan’s benefit determination on
review within a reasonable period of time, but not later than 60 days after
receipt of your request for review by the Plan, unless the Plan Administrator
determines that special circumstances require an extension of time for
processing the claim. If the Plan Administrator determines that an extension of
time for processing is required, written notice of the extension shall be
furnished to you prior to the termination of the initial 60-day period. In no
event shall such extension exceed a period of 60 days from the end of the
initial period. The extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the Plan expects to render
the determination on review.

The Plan Administrator shall provide you with written notification of a plan’s
benefit determination on review. In the case of an adverse benefit
determination, the notification shall set forth, in a manner calculated to be
understood by you – the specific reason or reasons for the adverse
determinations, reference to the specific plan provisions on which the benefit
determination is based, a statement that you are entitled to receive, upon your
request and free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to your claim for benefits.

 

 

MCG Capital Corporation 401k Plan    16

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B. Statement of ERISA Rights

As a Participant in the Plan, you are entitled to certain rights and protections
under ERISA. ERISA provides that all Plan Participants shall be entitled to:

Receive Information About Your Plan and Benefits

 

  •  

Examine, without charge, at the Plan Administrator’s office and at other
specified locations, such as worksites and union halls, all documents governing
the Plan, including insurance contracts and collective bargaining agreements,
and a copy of the latest annual report (Form 5500 Series) filed by the Plan with
the U.S. Department of Labor and available at the Public Disclosure Room of the
Employee Benefits Security Administration.

 

  •  

Obtain, upon written request to the Plan Administrator, copies of documents
governing the operation of the plan, including insurance contracts and
collective bargaining agreements, and copies of the latest annual report (Form
5500 Series) and updated Summary Plan Description. The Plan Administrator may
make a reasonable charge for the copies.

 

  •  

Receive a summary of the Plan’s annual financial report. The Plan Administrator
is required by law to furnish each Participant with a copy of this Summary
Annual Report each year.

 

  •  

Obtain a statement telling you the fair market value of your vested, accrued
benefit, as of the date for which the benefits are reported, if you stop working
under the Plan now. If you do not have a right to a benefit under the plan, the
statement will tell you how many more years you have to work to get a right to a
benefit. This statement must be requested in writing and is not required to be
given more than once every twelve (12) months. The Plan must provide the
statement free of charge.

Prudent Actions by Fiduciaries

In addition to creating rights for Plan Participants, ERISA imposes duties upon
the people who are responsible for the operation of the employee benefit plan.
The people who operate your Plan, called “fiduciaries” of the Plan, have a duty
to do so prudently and in the interest of you, other Plan Participants and
Beneficiaries. No one, including your Employer, your union, or any other person,
may fire you or otherwise discriminate against you in any way to prevent you
from obtaining a retirement benefit or exercising your rights under ERISA.

Enforce Your Rights

If your claim for a benefit under the Plan is denied or ignored, in whole or in
part, you have a right to know why this was done, to obtain copies of documents
relating to the decision without charge, and to appeal any denial, all within
certain time schedules. Under ERISA, there are steps you can take to enforce the
above rights. For instance, if you request a copy of plan documents or the
latest annual report from the Plan and do not receive them within 30 days, you
may file suit in a Federal court. The Plan’s agent for legal service of process
in the event of a lawsuit is the Plan Administrator. In such a case, the court
may require the Plan Administrator to provide the materials and pay you up to
$110 a day until you receive the materials, unless the materials were not sent
because of reasons beyond the control of the Plan Administrator.

If you have a claim for benefits which is denied or ignored, in whole or in
part, you may file suit in a state or Federal court. In addition, if you
disagree with the Plan’s decision or lack thereof concerning the qualified
status of a domestic relations order, you may file suit in Federal court. If it
should happen that Plan fiduciaries misuse the Plan’s money, or if you are
discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a Federal court. The court
will decide who should pay court costs and legal fees. If you are successful,
the court may order the person you have sued to pay these costs and fees. If you
lose, the court may order you to pay these costs and fees, for example, if it
finds your claim frivolous.

Assistance with Your Questions

If you have any questions about your Plan, you should contact the Plan
Administrator. If you have any questions about this statement or your rights
under ERISA, or if you need assistance in obtaining documents from the Plan
Administrator, you should contact the nearest office of the Employee Benefits
Security Administration, U.S. Department of Labor, listed in your telephone
directory or the Division of Technical Assistance and Inquiries, Employee
Benefits Security Administration, U.S. Department of Labor, 200 Constitution
Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications
about your rights and responsibilities under ERISA by calling the publications
hotline of the Employee Benefits Security Administration.

 

 

MCG Capital Corporation 401k Plan    17

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XII. Services and Fees

Fees and expenses charged under your Account will impact your retirement
savings, and fall into three basic categories. Investment fees are generally
assessed as a percentage of assets invested, and are deducted directly from your
investment returns. Investment fees can be in the form of sales charges, loads,
commissions, 12b-1 fees, or management fees. Certain of these Investment fees
may not apply depending upon the funds and share classes available in the Plan.
You can obtain more information about such fees from the documents (e.g., a
prospectus) that describe the investments available under your Plan and from
Appendix A: Investment Options. Plan administration fees cover the day-to-day
expenses of your Plan for recordkeeping, accounting, legal and trustee services,
as well as additional services that may be available under your Plan, such as
daily valuation, telephone response systems, internet access to plan
information, retirement planning tools, and educational materials. In some
cases, these costs are covered by investment fees that are deducted directly
from investment returns. In other cases, these administrative fees are either
paid directly by your Employer, or are passed through to the participants in the
Plan, in which case a recordkeeping fee will be deducted from your Account.
Transaction-based fees are associated with optional services offered under your
Plan, and are charged directly to your Account if you take advantage of a
particular plan feature that may be available, such as a Plan loan. For more
information on fees associated with your Account, refer to your Account
statement or speak with your Plan Administrator.

 

 

MCG Capital Corporation 401k Plan    18

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Appendix A. Investment Options

You have the opportunity to direct the investments of your Account among the
following investment funds:

 

Name

  

Ticker Symbol

  

Fund Code

  

Fund Overview

Managed Income Portfolio       0632    Seeks to preserve your principal
investment while earning a level of interest income that is consistent with the
principal preservation. MIP seeks to maintain a stable net asset value (NAV) of
$1 per share, but it cannot guarantee that it will be able to do so. The yield
of MIP will fluctuate.          A stable value fund (not a mutual fund). It is a
commingled pool of the Fidelity Group Trust for Employee Benefit Plans and is
managed by Fidelity Management Trust Company (FMTC). Fidelity® Government Income
Fund    FGOVX    0054    Seeks a high level of current income, consistent with
preservation of principal.          Normally investing at least 80% of assets in
U.S. Government securities and repurchase agreements for those securities.
Investing in instruments related to U.S. Government securities. Engaging in
transactions that have a leveraging effect on the fund. Fidelity® Intermediate
Bond Fund    FTHRX    0032    Seeks a high level of current income.         
Normally investing at least 80% of assets in investment-grade debt securities
(those of medium and high quality) of all types and repurchase agreements for
those securities. Normally maintaining a dollar-weighted average maturity
between three and 10 years. Engaging in transactions that have a leveraging
effect on the fund. Fidelity® Puritan® Fund    FPURX    0004    Seeks income and
capital growth consistent with reasonable risk.          Investing approximately
60% of assets in stocks and other equity securities and the remainder in bonds
and other debt securities, including lower-quality debt securities, when its
outlook is neutral. Investing at least 25% of total assets in fixed-income
senior securities (including debt securities and preferred stock). Engaging in
transactions that have a leveraging effect on the fund. Oakmark Equity And
Income Fund Class I    OAKBX    OMWG    A Balanced mutual fund; the Morningstar
Category is Moderate Allocation.          The investment seeks current income,
preservation and growth of capital. The fund invests primarily in a diversified
portfolio of U.S. equity and fixed-income securities (although the fund may
invest up to 35% of total assets in securities of non-U.S. issuers). It

 

 

MCG Capital Corporation 401k Plan    19

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         invests approximately 40-75% of total assets in common stock, including
securities convertible into common stock, and up to 60% of assets in U.S.
government securities and debt securities rated within the two highest grades
assigned by Moody’s Investors Service, Inc. or by Standard & Poor’s Corporation
Ratings Group, a division of The McGraw-Hill Companies. American Century
Investments Equity Income Fund Investor Class    TWEIX    OF8L    An
Equity-Income mutual fund; the Morningstar Category is Large Value.          The
investment seeks current income; capital appreciation is a secondary
consideration. The fund invests in equity securities with a favorable
income-paying history that have prospects for income payments to continue or
increase. It invests at least 80% of its assets in equity securities at all
times regardless of the movement of stock prices generally and invests at least
85% of its assets in income-paying securities. The fund also invests in equity
securities of companies that the advisor believes are undervalued and have the
potential for an increase in price. American Century Investments Value Fund
Class Investor    TWVLX    OF9E    A Growth mutual fund; the Morningstar
Category is Large Value.          The investment seeks long-term capital
appreciation; income is a secondary consideration. The fund invests in stocks of
companies of all sizes that they believe are undervalued at the time of
purchase. The managers attempt to purchase the stocks of these undervalued
companies and hold each stock until the price has increased to, or is higher
than, a level the managers believe more accurately reflects the fair value of
the company. Fidelity® Fund    FFIDX    0003    Seeks long-term capital growth.
         Normally investing primarily in common stocks. Investing in either
“growth” stocks or “value” stocks or both. Spartan® 500 Index - Investor Class
   FUSEX    0650    Seeks to provide investment results that correspond to the
total return (i.e., the combination of capital changes and income) performance
of common stocks publicly traded in the United States.          Normally
investing at least 80% of assets in common stocks included in the S&P 500 Index,
which broadly represents the performance of common stocks publicly traded in the
United States. Fidelity® Low-Priced Stock Fund    FLPSX    0316    Seeks capital
appreciation.          Normally investing at least 80% of assets in

 

 

MCG Capital Corporation 401k Plan    20

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         low-priced stocks (those priced at or below $35 per share), which can
lead to investments in small and medium-sized companies. Investing in either
“growth” or “value” stocks or both. Normally investing primarily in common
stocks. Loomis Sayles Small Capital Value Fund Class Retail    LSCRX    OFD0   

A Small Company mutual fund; the Morningstar Category is Small Blend.

 

The investment seeks long-term growth of capital. The fund invests 80% of assets
in equity securities of small cap companies with market capitalizations that
fall within the capitalization range of the Russell 2000 Index. It may invest up
to 20% of assets in foreign securities including emerging-markets securities.
The fund may also invest in REITs, Rule 144A securities and investment
companies. It may engage in foreign currency hedging transactions, options and
futures transactions, REITs and Rule 144A securities.

Fidelity® Blue Chip Growth Fund    FBGRX    0312   

Seeks growth of capital over the long term.

 

Normally investing at least 80% of assets in blue chip companies (companies
whose stock is included in the S&P 500 or the Dow Jones Industrial Average, and
companies with market capitalizations of at least $1 billion if not included in
either index). Investing in companies that FMR believes have above- average
growth potential (stocks of these companies are often called “growth” stocks).
Normally investing primarily in common stocks of well-known and established
companies.

Fidelity® Capital Appreciation Fund    FDCAX    0307   

Seeks capital appreciation.

 

Normally investing primarily in common stocks. Investing in either “growth”
stocks or “value” stocks or both.

Fidelity® Contrafund®    FCNTX    0022   

Seeks capital appreciation.

 

Investing in securities of companies whose value FMR believes is not fully
recognized by the public. Investing in either ‘growth’ stocks or ‘value’ stocks
or both. Normally investing primarily in common stocks.

Fidelity® Mid-Cap Stock Fund    FMCSX    0337   

Seeks long-term growth of capital.

 

Normally investing at least 80% of assets in common stocks of companies with
medium market capitalizations (companies with market capitalization similar to
companies in the Russell Midcap Index or the S&P MidCap 400). Investing in
either “growth” stocks or “value” stocks or both. Potentially investing in
companies with smaller or larger market

 

 

MCG Capital Corporation 401k Plan    21

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         capitalization. Morgan Stanley Institutional Mid Cap Growth Fund Class
P    MACGX    OFM5   

 

A Growth mutual fund; the Morningstar Category is Mid-Cap Growth.

 

The investment seeks long-term capital growth. The fund primarily invests in
growth-oriented equity securities of U.S. and non-U.S. mid-cap companies. It may
invest up to 25% of net assets in securities of foreign issuers, including
issuers located in emerging market countries or developing countries. The
securities in which the fund may invest may be denominated in U.S. dollars or in
currencies other than U.S. dollars.

Morgan Stanley Institutional Small Company Growth Fund Class P    MSSMX    OFM7
  

A Small Company mutual fund; the Morningstar Category is Small Growth.

 

The investment seeks long-term capital appreciation. The fund invests at least
80% of assets in growth-oriented equity securities of small U.S. and foreign
companies with market capitalizations of generally less than $4 billion. The
advisor seeks to invest in high quality companies it believes have sustainable
competitive advantages and the ability to redeploy capital at high rates of
return. It may invest up to 25% of net assets in foreign securities, including
emerging market securities, classified as ADRs, GDRs, ADSs or GDSs, foreign U.S.
dollar-denominated securities that are traded on a U.S. exchange or local shares
of foreign issuers.

Royce Value Plus Fund Class Service    RYVPX    OSOD   

A Growth mutual fund; the Morningstar Category is Small Growth.

 

The investment seeks long-term growth of capital. The fund normally invests at
least 80% of assets in equities securities of small-, mid-, and micro-cap
companies. It may invest up to 25% of assets in the securities of foreign
issuers that it believes are trading significantly below its estimate of their
current worth. The fund may give consideration to those companies that Royce
believes have above- average growth prospects.

Fidelity® Diversified International Fund    FDIVX    0325   

Seeks capital growth.

 

Normally investing primarily in non-U.S. securities. Normally investing
primarily in common stocks.

Fidelity® International Discovery Fund    FIGRX    0305   

Seeks long-term growth of capital.

 

Normally investing primarily in non-U.S. securities. Normally investing
primarily in common stocks.

Fidelity Freedom Income    FFFAX    0369    Seeks high total current income and,
as a

 

 

MCG Capital Corporation 401k Plan    22

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Fund®          secondary objective, capital appreciation.          Investing in
a combination of underlying Fidelity equity, fixed-income, and short-term funds
using a moderate asset allocation strategy designed for investors already in
retirement. Allocating assets among underlying Fidelity funds according to a
stable asset allocation strategy of approximately 14.6% in domestic equity
funds, 5.4% in international equity funds, 35% in investment-grade fixed-income
funds, 5% in high yield fixed-income funds, and 40% in short-term funds.
Fidelity Freedom 2000 Fund®    FFFBX    0370   

Seeks high total return until its target retirement date. Thereafter the fund’s
objective will be to seek high current income and, as a secondary objective,
capital appreciation.

 

Investing in a combination of underlying Fidelity equity, fixed-income, and
short-term funds using a moderate asset allocation strategy designed for
investors expected to have retired around the year 2000. Allocating assets among
underlying Fidelity funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches approximately 15% in domestic equity
funds, 5% in international equity funds, 35% in investment- grade fixed-income
funds, 5% in high yield fixed-income funds, and 40% in short-term funds
(approximately 10 to 15 years after the year 2000). Ultimately, the fund will
merge with Freedom Income Fund.

Fidelity Freedom 2010 Fund®    FFFCX    0371   

Seeks high total return until its target retirement date. Thereafter the fund’s
objective will be to seek high current income and, as a secondary objective,
capital appreciation.

 

Investing in a combination of underlying Fidelity equity, fixed-income, and
short-term funds using a moderate asset allocation strategy designed for
investors expecting to retire around the year 2010. Allocating assets among
underlying Fidelity funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches approximately 15% in domestic equity
funds, 5% in international equity funds, 35% in investment- grade fixed-income
funds, 5% in high yield fixed-income funds, and 40% in short-term funds
(approximately 10 to 15 years after the year 2010). Ultimately, the fund will
merge with Freedom Income Fund.

Fidelity Freedom 2020 Fund®    FFFDX    0372    Seeks high total return until
its target retirement date. Thereafter the fund’s objective will be to seek high
current income and, as a secondary objective, capital appreciation.    

 

 

MCG Capital Corporation 401k Plan    23

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         Investing in a combination of underlying Fidelity equity, fixed-income,
and short-term funds using a moderate asset allocation strategy designed for
investors expecting to retire around the year 2020. Allocating assets among
underlying Fidelity funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches approximately 15% in domestic equity
funds, 5% in international equity funds, 35% in investment- grade fixed-income
funds, 5% in high yield fixed-income funds, and 40% in short-term funds
(approximately 10 to 15 years after the year 2020). Ultimately, the fund will
merge with Freedom Income Fund. Fidelity Freedom 2030 Fund®    FFFEX    0373   

Seeks high total return until its target retirement date. Thereafter the fund’s
objective will be to seek high current income and, as a secondary objective,
capital appreciation.

 

Investing in a combination of underlying Fidelity equity, fixed-income, and
short-term funds using a moderate asset allocation strategy designed for
investors expecting to retire around the year 2030. Allocating assets among
underlying Fidelity funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches approximately 15% in domestic equity
funds, 5% in international equity funds, 35% in investment- grade fixed-income
funds, 5% in high yield fixed-income funds, and 40% in short-term funds
(approximately 10 to 15 years after the year 2030). Ultimately, the fund will
merge with Freedom Income Fund.

Fidelity Freedom 2040 Fund®    FFFFX    0718   

Seeks high total return until its target retirement date. Thereafter the fund’s
objective will be to seek high current income and, as a secondary objective,
capital appreciation.

 

Investing in a combination of underlying Fidelity equity, fixed-income, and
short-term funds using a moderate asset allocation strategy designed for
investors expecting to retire around the year 2040. Allocating assets among
underlying Fidelity funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches approximately 15% in domestic equity
funds, 5% in international equity funds, 35% in investment- grade fixed-income
funds, 5% in high yield fixed-income funds, and 40% in short-term funds
(approximately 10 to 15 years after the year 2040). Ultimately, the fund will
merge with Freedom Income Fund.

Fidelity Freedom 2005    FFFVX    1312    Seeks high total return until its
target retirement date. Thereafter the fund’s objective

 

 

MCG Capital Corporation 401k Plan    24

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Fund®         

will be to seek high current income and, as a secondary objective, capital
appreciation.

 

Investing in a combination of underlying Fidelity equity, fixed-income, and
short-term funds using a moderate asset allocation strategy designed for
investors expected to have retired around the year 2005. Allocating assets among
underlying Fidelity funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches approximately 15% in domestic equity
funds, 5% in international equity funds, 35% in investment- grade fixed-income
funds, 5% in high yield fixed-income funds, and 40% in short-term funds
(approximately 10 to 15 years after the year 2005). Ultimately, the fund will
merge with Freedom Income Fund.

Fidelity Freedom 2015 Fund®    FFVFX    1313   

Seeks high total return until its target retirement date. Thereafter the fund’s
objective will be to seek high current income and, as a secondary objective,
capital appreciation.

 

Investing in a combination of underlying Fidelity equity, fixed-income, and
short-term funds using a moderate asset allocation strategy designed for
investors expecting to retire around the year 2015. Allocating assets among
underlying Fidelity funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches approximately 15% in domestic equity
funds, 5% in international equity funds, 35% in investment- grade fixed-income
funds, 5% in high yield fixed-income funds, and 40% in short-term funds
(approximately 10 to 15 years after the year 2015). Ultimately, the fund will
merge with Freedom Income Fund.

Fidelity Freedom 2025 Fund®    FFTWX    1314   

Seeks high total return until its target retirement date. Thereafter the fund’s
objective will be to seek high current income and, as a secondary objective,
capital appreciation.

 

Investing in a combination of underlying Fidelity equity, fixed-income, and
short-term funds using a moderate asset allocation strategy designed for
investors expecting to retire around the year 2025. Allocating assets among
underlying Fidelity funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches approximately 15% in domestic equity
funds, 5% in international equity funds, 35% in investment- grade fixed-income
funds, 5% in high yield fixed-income funds, and 40% in short-term
funds(approximately 10 to 15 years after the year 2025). Ultimately, the fund
will merge

 

 

MCG Capital Corporation 401k Plan    25

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         with Freedom Income Fund Fidelity Freedom 2035 Fund®    FFTHX    1315
  

Seeks high total return until its target retirement date. Thereafter the fund’s
objective will be to seek high current income and, as a secondary objective,
capital appreciation.

 

Investing in a combination of underlying Fidelity equity, fixed-income, and
short-term funds using a moderate asset allocation strategy designed for
investors expecting to retire around the year 2035. Allocating assets among
underlying Fidelity funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches approximately 15% in domestic equity
funds, 5% in international equity funds, 35% in investment- grade fixed-income
funds, 5% in high yield fixed-income funds, and 40% in short-term funds
(approximately 10 to 15 years after the year 2035). Ultimately, the fund will
merge with Freedom Income Fund.

Fidelity Freedom 2045 Fund®    FFFGX    1617   

Seeks high total return until its target retirement date. Thereafter the fund’s
objective will be to seek high current income and, as a secondary objective,
capital appreciation.

 

Investing in a combination of underlying Fidelity equity, fixed-income, and
short-term funds using a moderate asset allocation strategy designed for
investors expecting to retire around the year 2045. Allocating assets among
underlying Fidelity funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches approximately 15% in domestic equity
funds, 5% in international equity funds, 35% in investment- grade fixed-income
funds, 5% in high yield fixed-income funds, and 40% in short-term funds
(approximately 10 to 15 years after the year 2045). Ultimately, the fund will
merge with Freedom Income Fund.

Fidelity Freedom 2050 Fund®    FFFHX    1618   

Seeks high total return until its target retirement date. Thereafter the fund’s
objective will be to seek high current income and, as a secondary objective,
capital appreciation.

 

Investing in a combination of underlying Fidelity equity, fixed-income, and
short-term funds using a moderate asset allocation strategy designed for
investors expecting to retire around the year 2050. Allocating assets among
underlying Fidelity funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches approximately 15% in domestic equity
funds, 5% in international equity funds, 35% in investment- grade fixed-income
funds, 5% in high yield

 

 

MCG Capital Corporation 401k Plan    26

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         fixed-income funds, and 40% in short-term funds (approximately 10 to 15
years after the year 2050). Ultimately, the fund will merge with Freedom Income
Fund

Exchanges from the Managed Income Portfolio to certain bond or money market
funds (considered “competing funds”), must first be exchanged to an option that
is “non-competing”, such as an equity mutual fund. Ninety days after your
exchange, you can then exchange your money to a “competing fund” by calling the
Fidelity Participant Services Group Representative at 1-800-835-5097. While this
requirement may seem restrictive, it is typically imposed by issuers, such as
insurance companies, banks, or other approved financial institutions as a
condition for issuing investment contracts to retirement plans. You may also
contact your Plan Administrator for more information.

If you have not supplied investment instructions, your Employer has directed
that your contributions to the plan will be invested, based upon your date of
birth, in the Fidelity Freedom Funds described in the above table of this
Appendix A. These funds are subject to the volatility of the financial markets
and may be subject to the additional risks associated with investing in high
yield, small cap and foreign securities including the risk of loss of your
principal investment.

You may redirect the investment of your future contributions or exchange your
existing Account balance among available investment options by calling
1-800-835-5097 on any business day between 8:30 AM (ET) and 8:00 PM (ET). This
is an automated telephone service and you should follow the telephonic
instructions or you can press the appropriate number if you want to talk to a
Fidelity telephone representative. All representative-assisted calls will be
recorded for your protection. You may call the telephone number virtually 24
hours a day, seven days a week to check Account balances, prices, yields or
obtain investment information. You may also use the internet to redirect the
investment or your future contributions or exchange your existing Account
balance by logging onto NetBenefits® at www.401k.com. Please contact the Plan
Administrator for further information.

Exchanges received and confirmed before the close of the market (usually 4:00 PM
(ET)) will be posted on that business day based upon the closing price of the
affected investment(s). Exchanges received and confirmed after the market close
will be processed on the next business day based upon the closing price of the
affected investment(s) on that next business day. The minimum exchange is the
lesser of $250 or 100% of your Account balance in the investment option. If your
exchange is less than $250 then it may only be exchanged into one investment
option. A confirmation of your change in the investment of your future
contributions or your exchange of an existing fund will be sent to you within
five business days or an online confirmation will be displayed on NetBenefits®.
Fidelity reserves the right to change, restrict, or terminate exchange
procedures to protect mutual fund shareholders.

 

 

MCG Capital Corporation 401k Plan    27