Document:

EX-10.1

	 	 	 	 	 
	 	 	Principal Life Insurance Company	 	 
	`

	 	Raleigh, NC 27612

1-800-999-4031

A member of the Principal Financial GroupÒ
	 	

THE EXECUTIVE

Nonqualified “Excess” PLANSM

ADOPTION AGREEMENT

THIS AGREEMENT is the joint adoption by Gladstone Commercial Corporation, Gladstone Capital
Corporation, and Gladstone Investment Corporations (the “Employers”) of the Executive Nonqualified
Excess Plan (“Plan”).

W I T N E S S E T H:

WHEREAS, the Employer desires to adopt the Plan as an unfunded, nonqualified deferred
compensation plan; and

WHEREAS, the provisions of the Plan are intended to comply with the requirements of Section
409A of the Code and the regulations thereunder, and shall apply to amounts deferred after January
1, 2005, and to amounts deferred under the terms of any predecessor plan which are not earned and
vested before January 1, 2005; and

WHEREAS, the Employer has been advised by Principal Life Insurance Company to obtain legal and
tax advice from its professional advisors before adopting the Plan, and Principal Life Insurance
Company disclaims all liability for the legal and tax consequences which result from the elections
made by the Employer in this Adoption Agreement;

NOW, THEREFORE, the Employer hereby adopts the Plan in accordance with the terms and
conditions set forth in this Adoption Agreement:

ARTICLE I

Terms used in this Adoption Agreement shall have the same meaning as in the Plan, unless some
other meaning is expressly herein set forth. The Employer hereby represents and warrants that the
Plan has been adopted by the Employer upon proper authorization and the Employer hereby elects to
adopt the Plan for the benefit of its Participants as referred to in the Plan. By the execution of
this Adoption Agreement, the Employer hereby agrees to be bound by the terms of the Plan.

1

ARTICLE II

The Employer hereby makes the following designations or elections for the purpose of the Plan:

2.6 Committee: The duties of the Committee set forth in the Plan shall be satisfied by:

	 	 	 	     (a) The administrative committee of at least three individuals appointed by
the Board to serve at the pleasure of the Board.

	 	 	 	 	 	 	 	 	 
	XX
	 	 	(b)	 	 	Employer.

	 
	 	 	 	 	 	 	 	 
	___
	 	 	(c)	 	 	Other (specify):                                                                                 .

2.7 Compensation: The “Compensation” of a Participant shall mean all of a Participant’s:

	 	 	 	 	 	 	 	 	 
	___
	 	 	(a)	 	 	Base salary.

	___
	 	 	(b)	 	 	Service Bonus.

	___
	 	 	(c)	 	 	Performance-Based Compensation earned in a period of 12 months or more.

	___
	 	 	(d)	 	 	Commissions.

	XX
	 	 	(e)	 	 	Compensation received as an Independent Contractor reportable on Form 1099.

	 
	 	 	 	 	 	 	 	 
	___
	 	 	(f)	 	 	Other:  ______________________________________________.

2.8 Crediting Date: The Deferred Compensation Account of a Participant shall be credited with the
amount of any Participant Deferral to such account at the time designated below:

	 	 	 	 	 
	 
	 	___(a)The last business day of each Plan Year.
	 
	 	___(b)The last business day of each calendar quarter during the Plan Year.
	 
	 	___(c)The last business day of each month during the Plan Year.
	 
	 	___(d)The last business day of each payroll period during the Plan Year.
	 
	 	___(e)Each pay day as reported by the Employer.
	 
	 	XX(f)Any business day on which the Participant Deferral is received by the
	 
	 	Provider.

	 
	 	___(g)Other:  ______________________________________________.
	2.12
	 	Effective Date:

XX (a) This is a newly-established Plan, and the Effective Date of the Plan is January
1, 2007.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	___	 	 	(b) This is an amendment and restatement of a plan named

	 	 	 	 	 	 	________________________________ with an effective date of _________.

	 	 	 	 	 	 	 

	 	 	 	 	 	 	The Effective Date of this amended and restated Plan is ___________.

	 
	 	 	 	 	 	This is amendment number _____.
	 	 	 	 
	2.18	 	Normal Retirement Age: The Normal Retirement Age of a Participant shall be:
	 	 	 	 
	 
	 	XX	 	 	(a)	 	 	Age 60.

	 
	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	     (b) The later of age      or the      anniversary of the participation
commencement date. The participation commencement date is the first day of the first
Plan Year in which the Participant commenced participation in the Plan.

	 	 	 	     (c) Other:      .

2.22 Participating Employer(s): As of the Effective Date, the following Participating Employer(s)
are parties to the Plan:

	 	 	 	 	 	 	 
	Name of Employer	 	Address	 	Telephone No.	 	EIN
	 	 	1521 Westbranch	 	 	 	 
	 	 	Drive, Suite 200	 	 	 	 
	Gladstone Investment	 	McLean, VA 22102	 	703-287-5800	 	83-0423116
	 	 	1521 Westbranch	 	 	 	 
	 	 	Drive, Suite 200	 	 	 	 
	Gladstone Capital	 	McLean, VA 22102	 	703-287-5800	 	54-2040781
	Gladstone Commercial

	 	1521 Westbranch

Drive, Suite 200

McLean, VA 22102
	 	

703-287-5800
	 	

02-0681276
	 

	 	 
	 	 
	 	 

2.24 Plan: The name of the Plan as applied to the Employer is

The Joint Directors Nonqualified Excess Plan of Gladstone Commercial Corporation,
Gladstone Capital Corporation, and Gladstone Investment Corporation

	 	 	 
	2.25

	 	Plan Administrator: The Plan Administrator shall be:
	 
	 	 
	
 
	 	     (a)Committee.
	 
	 	 
	
 
	 	XX(b)Employer.
	
 
	 	 
	 
	 	 
	
 
	 	     (c)Other:       .
	
 
	 	 
	 
	 	 
	2.27

	 	Plan Year: The Plan Year shall end each year on the last day of the month of December.
	 
	 	 
	2.35

	 	Trust:

	 	 	 	XX (a) The Employer does desire to establish a “rabbi” trust for the purpose of
setting aside assets of the Employer contributed thereto for the payment of benefits
under the Plan.

	 	 	 	     (b) The Employer does not desire to establish a “rabbi” trust for the purpose
of setting aside assets of the Employer contributed thereto for the payment of benefits
under the Plan.

	 	 	 	     (c) The Employer desires to establish a “rabbi” trust for the purpose of
setting aside assets of the Employer contributed thereto for the payment of benefits
under the Plan upon the occurrence of a Change in Control.

4.1 Participant Deferral Credits: Subject to the limitations in Section 4.1 of the Plan, a
Participant may elect to have his Compensation (as selected in Section 2.7 of this Adoption
Agreement) deferred within the annual limits below by the following percentage or amount as
designated in writing to the Committee:

	 	 	 	 	 
	     

	 	(a)
	 	Base salary:
	 
	 	 	 	 
	
 
	 	 	 	maximum deferral: $     or      %
	 
	 	 	 	 
	     

	 	(b)
	 	Service Bonus:
	 
	 	 	 	 
	
 
	 	 	 	maximum deferral: $     or      %
	 
	 	 	 	 
	     

	 	(c)
	 	Performance-Based Compensation:
	 
	 	 	 	 
	
 
	 	 	 	maximum deferral: $     or      %

	 	 	 	XX (d) Other: Compensation Received as an Independent Contractor reportable
on Form 1099

maximum deferral: $     or      %

     (e) Participant deferrals not allowed.

2

4.2 Employer Credits: The Employer will make Employer Credits in the following manner:

	 	 	 	     (a) Employer Discretionary Credits: The Employer may make discretionary
credits to the Deferred Compensation Account of each Participant in an amount
determined as follows:

	 	 	 	 	 	 	 	 	 
	XX
	 	 	(i)	 	 	An amount determined each Plan Year by the Employer.

	 
	 	 	 	 	 	 	 	 
	___
	 	(ii)
	 	Other:  _________________________________________.

	 	 	 	     (b) Employer Profit Sharing Credits: The Employer may make profit sharing
credits to the Deferred Compensation Account of each Active Participant in an amount
determined as follows:

	 	 	 	 	 	 	 	 	 
	XX
	 	 	(i)	 	 	An amount determined each Plan Year by the Employer.

	 
	 	 	 	 	 	 	 	 
	___
	 	(ii)
	 	Other:  _________________________________________.

	 	 	 	     (c) Other:      .

XX (d) Employer Credits not allowed.

5.3 Death of a Participant: If the Participant dies while in Service, the Employer shall pay a
benefit to the Beneficiary in an amount equal to the vested balance in the Deferred Compensation
Account of the Participant determined as of the date payments to the Beneficiary commence, plus:

	 	 	 	 	 	 	 	 	 
	 	 	___	 	(a)	 	An amount to be determined by the Committee.

	 
	 	 	 	 	 	 	 	 
	 	 	___	 	(b)	 	Other: _______________________________________________.

	 
	 	 	 	 	 	 	 	 
	
 
	 	XX
	 	(c)
	 	No additional benefits.
	 	

	
 
	 	 
	 	

	 	

	 	

	 
	 	 	 	 	 	 	 	 

3

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	5.4	 	In-Service Distributions: In-service accounts are permitted under the Plan:
	 	 
	 
	 	 	 	 	 	 	 	 
	
 
	 	XX
	 	(a)
	 	Yes, with respect to:
	 	

	
 
	 	 
	 	

	 	

	 	

	
 
	 	 	 	 	 	XX
	 	Participant Deferral Credits only.
	
 
	 	 	 	 	 	 
	 	

	
 
	 	 	 	 	 	     

     
	 	Employer Credits only.

Participant Deferral and Employer Credits.
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	In-service distributions may be made in the following manner:

	 
	 	 	 	 	 	 	 	 
	
 
	 	 	 	 	 	XX
	 	Single lump sum payment.
	
 
	 	 	 	 	 	 
	 	

	
 
	 	 	 	 	 	     
	 	Annual installment payments over no more than      years.

If applicable, amounts not vested at the specified time of distribution will be:

	 	 	 	 	 	 	 	 	 
	
 
	 	 	 	 	 	     

     
	 	Forfeited

Distributed annually when vested
	 
	 	 	 	 	 	 	 	 
	
 
	 	     
	 	(b)
	 	No in-service distributions permitted.
	 	

	 
	 	 	 	 	 	 	 	 
	5.5	 	Education Distributions: Education accounts are permitted under the Plan:
	 	 
	 
	 	 	 	 	 	 	 	 
	
 
	 	XX
	 	(a)
	 	Yes, with respect to:
	 	

	
 
	 	 
	 	

	 	

	 	

	
 
	 	 	 	 	 	XX
	 	Participant Deferral Credits only.
	
 
	 	 	 	 	 	 
	 	

	
 
	 	 	 	 	 	     

     
	 	Employer Credits only.

Participant Deferral and Employer Credits.
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Education distributions may be made in the following manner:

	 
	 	 	 	 	 	 	 	 
	
 
	 	 	 	 	 	     

XX
	 	Single lump sum payment.

Annual installment payments over no more than SIX years.
	
 
	 	 	 	 	 	 
	 	

If applicable, amounts not vested at the specified time of distribution will be:

	 	 	 	 	 
	
 
	 	 	 	     Forfeited

     Distributed annually when vested
	
 
	 	 	 	 
	 
	 	 	 	 
	     

	 	(b)
	 	No education distributions permitted.

	5.6	 	Change in Control: Participant may elect to receive distributions under the Plan upon a
Change in Control:

	 	 	 	XX (a) Yes, Participants may elect upon initial enrollment to have accounts
distributed upon a Change in Control.

	 	 	 	     (b) Participants may not elect to have accounts distributed upon a Change in
Control.

4

6.1 Payment Options: Any benefit payable under the Plan upon a Qualifying Distribution Event may
be made to the Participant or his Beneficiary (as applicable) in any of the following payment
forms, as selected by the Participant in the Participant Deferral Agreement:

	 	1.	 	Separation from Service other than Retirement (Retirement
is defined the Employer

	 	 	 	 	 
	XX

—

	 	(a)
	 	A lump sum in cash as soon as practicable

following the date of the Qualifying Distribution

Event.
	 
	 	 	 	 
	     

	 	(b)
	 	Approximately equal annual installments over a

term certain as elected by the Participant upon

his entry into the Plan not to exceed      years.

 

	 	 	 	     (c) Other:      .

2. Separation from Service due to Retirement

	 	 	 	 	 
	XX

—

	 	(a)
	 	A lump sum in cash as soon as practicable

following the date of the Qualifying Distribution

Event.
	 
	 	 	 	 
	     

	 	(b)
	 	Approximately equal annual installments over a

term certain as elected by the Participant upon

his entry into the Plan not to exceed      years.

 

	 	 	 	     (c) Other:      .

3. Death

	 	 	 	 	 
	XX

—

	 	(a)
	 	A lump sum in cash upon the date of the

Qualifying Distribution Event.
	 
	 	 	 	 
	     

	 	(b)
	 	Approximately equal annual installments over a

term certain as elected by the Participant upon

his entry into the Plan not to exceed      years.

 

	 	 	 	     (c) Other:      .

5

4. Disability

	 	 	 	 	 
	XX

—

	 	(a)
	 	A lump sum in cash upon the date of the

Qualifying Distribution Event.
	 
	 	 	 	 
	     

	 	(b)
	 	Approximately equal annual installments over a

term certain as elected by the Participant upon

his entry into the Plan not to exceed _     years.

 

	 	 	 	     (c) Other:      .

5. Change in Control

	 	 	 	 	 
	XX

—

	 	(a)
	 	A lump sum in cash upon the date of the

Qualifying Distribution Event.
	 
	 	 	 	 
	     

	 	(b)
	 	Approximately equal annual installments over a

term certain as elected by the Participant upon

his entry into the Plan not to exceed      

years.  

	 	 	 	     (c) Other:      .

	 	 	 	     (d) Not applicable (if not permitted in 5.6)

6.2 De Minimis Amounts. Notwithstanding any payment election made by the Participant, the
vested balance in the Deferred Compensation Account of the Participant will be distributed in a
single lump sum payment if the payment accompanies the termination of the Participant’s entire
interest in the Plan and the amount of such payment does not exceed $10,000.

6

7. Vesting: An Active Participant shall be fully vested in the Employer Credits made to the
Deferred Compensation Account upon the first to occur of the following events:

	 	 	 	 	 
	     

     

     

     

	 	(a)

(b)

(c)

(d)
	 	Normal Retirement Age.

Death.

Disability.

Change in Control

	 	 	 	     (e) Other:      .

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	___	 	 	(f	)	 	Satisfaction of the vesting requirement specified below:
	 	 	 	 	 	 	 	 
	 
	 	XX	 	Employer Discretionary Credits:
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	XX	 	 	(i)	 	 	Immediate 100% vesting.
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	___	 	 	(ii)	 	100% vesting after            Years of Service.
	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 	—	 	 	(iii)
	 	100% vesting at age ____.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	—	 	 	(iv)
	 	Number of Years
	 	 	 	 	 	Vested

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	of Service
	 	 	 	 	 	Percentage

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	Less than
	 	 	1	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	5	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	6	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	7	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	8	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	9	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	10 or more	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

For this purpose, Years of Service of a Participant shall be
calculated from the date designated below:

	 	 	 	 	 	 	 
	XX

	 	 	(1	)	 	First Day of Service.
	 

	 	

	 	

	 
	 	 	 	 	 	 
	     

	 	 	(2	)	 	Effective Date of the Plan Participation.

	 	 	 	     (3) Each Crediting Date. Under
this option (3), each Employer Credit shall vest based on the
Years of Service of a Participant from the Crediting Date on
which each Employer Discretionary Credit is made to his or her
Deferred Compensation Account. Notwithstanding the vesting
schedule elected above, all Employer Discretionary Credits to
the Deferred Compensation Account shall be 100% vested upon the
following event(s):      .

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	XX	 	Employer Profit Sharing Credits:
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	XX	 	 	(i)	 	 	Immediate 100% vesting.
	 	 	 	 	 	 	 	 
	 
	 	 	___	 	 	(ii)	 	100% vesting after            Years of Service.
	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

	 
	 	 	—	 	 	(iii)
	 	100% vesting at age ____.	 	 	 	 	 	 	 	 
	 
	 	 	—	 	 	(iv)
	 	Number of Years
	 	 	 	 	 	Vested

	 
	 	 	 	 	 	 	 	 	 	of Service
	 	 	 	 	 	Percentage

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Less than
	 	 	1	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	5	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	6	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	7	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	8	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	9	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	10 or more	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

For this purpose, Years of Service of a Participant shall be
calculated from the date designated below:

	 	 	 	 	 	 	 
	XX

	 	 	(1	)	 	First Day of Service.
	 

	 	

	 	

	 
	 	 	 	 	 	 
	     

	 	 	(2	)	 	Effective Date of the Plan Participation.

	 	 	 	     (3) Each Crediting Date. Under
this option (3), each Employer Credit shall vest based on the
Years of Service of a Participant from the Crediting Date on
which each Employer Profit Sharing Credit is made to his or her
Deferred Compensation Account. Notwithstanding the vesting
schedule elected above, all Employer Profit Sharing Credits to
the Deferred Compensation Account shall be 100% vested upon the
following event(s):      .

7

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	XX	 	Other Employer Credits:
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	XX	 	 	(i)	 	 	Immediate 100% vesting.
	 	 	 	 	 	 	 	 
	 
	 	 	___	 	 	(ii)	 	100% vesting after            Years of Service.
	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

	 
	 	 	—	 	 	(iii)
	 	100% vesting at age ____.	 	 	 	 	 	 	 	 
	 
	 	 	—	 	 	(iv)
	 	Number of Years
	 	 	 	 	 	Vested

	 
	 	 	 	 	 	 	 	 	 	of Service
	 	 	 	 	 	Percentage

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Less than
	 	 	1	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	5	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	6	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	7	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	8	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	9	 	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	10 or more	 	 	%	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

For this purpose, Years of Service of a Participant shall be
calculated from the date designated below:

	 	 	 	 	 	 	 
	XX

	 	 	(1	)	 	First Day of Service.
	 

	 	

	 	

	 
	 	 	 	 	 	 
	     

	 	 	(2	)	 	Effective Date of the Plan Participation.

	 	 	 	     (3) Each Crediting Date. Under
this option (3), each Employer Credit shall vest based on the
Years of Service of a Participant from the Crediting Date on
which each Employer Credit is made to his or her Deferred
Compensation Account. Notwithstanding the vesting schedule
elected above, all other Employer Credits to the Deferred
Compensation Account shall be 100% vested upon the following
event(s):      .

14. Amendment and Termination of Plan: Notwithstanding any provision in this Adoption
Agreement or the Plan to the contrary, Section      of the Plan shall be amended to read as
provided in attached Exhibit      .

XX There are no amendments to the Plan.

17.9 Construction: The provisions of the Plan and Trust (if any) shall be construed and
enforced according to the laws of the State of Virginia, except to the extent that such
laws are superseded by ERISA and the applicable provisions of the Code.

IN WITNESS WHEREOF, this Agreement has been executed as of the day and year stated below.

The Plan is adopted by the following Participating Employers:

Gladstone Commercial Corporation

Name of Employer

By: /s/ David Gladstone

Authorized Person

Date:___July 11, 2006________________________

Gladstone Capital Corporation

Name of Employer

	 	 	 	 	 
	
 
	 	By: /s/ David Gladstone
	 	

	 	 	 

	Date:_July 11, 2006

	 	Authorized Person

           
	 	

	 
	 	 	 	 
	 	 	 

	 
	 	 	 	 
	 	 	Gladstone Investment Corporation

	 
	 	 	 	 
	 	 	 

	 
	 	 	 	 
	
 
	 	Name of Employer
	 	

	 
	 	 	 	 
	
 
	 	By:
	 	/s/ David Gladstone
	
 
	 	 	 	 

	 	 	 	 	 
	 	 	 	 	 	Authorized Person
	 	 	Date:_July 11, 2006	 	 	__________________

NOTE: Execution of this Adoption Agreement creates a legal liability of the Employer with
significant tax consequences to the Employer and Participants. The Employer should obtain legal
and tax advice from its professional advisors before adopting the Plan. Principal Life Insurance
Company disclaims all liability for the legal and tax consequences which result from the elections
made by the Employer in this Adoption Agreement.

8First Supplemental Indenture

EXHIBIT 4.1

FIRST SUPPLEMENTAL INDENTURE

     FIRST SUPPLEMENTAL INDENTURE, dated as of July 11, 2006, among The Neiman Marcus Group, Inc., a Delaware corporation (the "Company"), The Bank of New York Trust Company, N.A., a national banking association, as successor trustee (the "Trustee"), and Neiman Marcus, Inc., a Delaware corporation, as guarantor (the "Guarantor").

W I T N E S S E T H:

     WHEREAS, the Company and the Trustee previously have entered into an indenture, dated as of May 27, 1998 (the "Base Indenture"), providing for the issuance of 7.125% Senior Debentures Due 2028 (the "2028 Debentures") (the Base Indenture together with the terms of the 2028 Debentures as established as contemplated by Section 301 thereof is referred to herein as the "Original Indenture" and the Original Indenture as it may from time to time be supplemented or amended, including by this First Supplemental Indenture, is referred to herein as the "Indenture");

     WHEREAS, Section 901 of the Base Indenture permits the Company, when authorized by a Board Resolution, and the Trustee to enter into one or more indentures supplemental to the Indenture without the consent of holders of any securities issued thereunder to add to the rights of the holders of such securities;

     WHEREAS, the Company received cash consideration for the issuance and initial sale of the 2028 Debentures on May 27, 1998;

     WHEREAS, the Company is a wholly-owned subsidiary of the Guarantor;

     WHEREAS, the Guarantor desires to provide and the Board of Directors of the Company has authorized the Guarantor to provide a guarantee of the outstanding 2028 Debentures;

     WHEREAS, the Company has requested that the Trustee join in the execution of this First Supplemental Indenture; and

     WHEREAS, all things necessary to make this First Supplemental Indenture a valid agreement of the parties and a valid supplement to the Indenture have been done.

     NOW, THEREFORE, for and in consideration of the premises and the mutual covenants contained herein and in the Original Indenture and for other good and valuable consideration, the receipt and sufficiency of which are herein acknowledged, the Company and the Trustee hereby agree, for the equal and ratable benefit of all holders of the outstanding 2028 Debentures (the "Holders"), as follows:

ARTICLE ONE

DEFINITIONS

     Section 1.01     Defined Terms. All capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Original Indenture, as supplemented and amended hereby. All definitions in the Original Indenture shall be read in a manner consistent with the terms of this First Supplemental Indenture.

ARTICLE TWO

GUARANTEE

Pursuant to Section 901 of the Base Indenture, the Company and the Trustee hereby provide and the Guarantor hereby agrees as follows:

     Section 2.01     The Guarantee. The Guarantor hereby irrevocably and unconditionally guarantees (the "Guarantee"), as primary obligor and not merely as surety, the 2028 Debentures and obligations of the Company under the Indenture and the 2028 Debentures, and guarantees to each Holder of a 2028 Debenture authenticated and delivered by the Trustee, and to the Trustee for itself and on behalf of such Holder, that: (1) the principal of (and premium, if any) and interest on the 2028 Debentures shall be paid in full when due, whether at Stated Maturity, by acceleration or otherwise (including the amount that would become due but for the operation of the automatic stay under Section 362(a) of Title 11 of the United States Bankruptcy Code of 1978, as amended (the "Bankruptcy Law")) together with interest on the overdue principal, if any, and interest on any overdue interest, to the extent lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder shall be paid in full or performed, all in accordance with the terms hereof and thereof; and (2) in case of any extension of time of payment or renewal of any 2028 Debentures or of any such other obligations, the same shall be paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise.

          (a)     The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the 2028 Debentures or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of the Guarantor.

          (b)     The Guarantor hereby waives (to the extent permitted by law) the benefits of diligence, presentment, demand for payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company or any other Person, protest, notice and all demands whatsoever and covenants that the Guarantee shall not be discharged as to any 2028 Debenture except by complete performance of the obligations contained in such 2028 Debenture, the Indenture and the Guarantee.  The Guarantor acknowledges that the Guarantee is a guarantee of payment, performance and compliance when due and not of collection.  The Guarantor hereby agrees that, in the event of a default in payment of principal (or premium, if any) or interest on such 2028 Debenture, whether at its Stated Maturity, by acceleration, purchase or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such 2028 Debenture, subject to the terms and conditions set forth in the Indenture, directly against the Guarantor to enforce the Guarantee without first proceeding against the Company.  The Guarantor agrees that if, after the occurrence and during the continuance of an Event of Default, the Trustee or any of the Holders are prevented by applicable law from exercising their respective rights to accelerate the Maturity of the 2028 Debentures, to collect interest on the 2028 Debentures, or to enforce or exercise any other right or remedy with respect to the 2028 Debentures, the Guarantor shall pay to the Trustee for the account of the Holder, upon demand therefor, the amount that would otherwise have been due and payable had such rights and remedies been permitted to be exercised by the Trustee or any of the Holders.

          (c)     If any Holder or the Trustee is required by any court or otherwise to return to the Company or the Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantor, any amount paid by any of them to the Trustee or such Holder, the Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.  The Guarantor further agrees that, as between the Guarantor, on one hand, and the Holders and the Trustee on the other hand, (1) subject to the provisions of the Guarantee, the Maturity of the obligations guaranteed hereby may be accelerated as provided in Article Five of the Base Indenture for the purposes of the Guarantee notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any acceleration of such obligation as provided in Article Five of the Base Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantor for the purpose of the Guarantee.

          (d)     The Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Company for liquidation or reorganization, should the Company become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Company's assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the 2028 Debentures are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the 2028 Debentures, whether as a "voidable preference", "fraudulent transfer" or otherwise, all as though such payment or performance had not been made.  In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the 2028 Debentures shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

     Section 2.02  Severability.  In case any provision of the Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby to the extent permitted by applicable law.

     Section 2.03  Subrogation.  The Guarantor shall be subrogated to all rights of Holders against the Company in respect of any amounts paid by the Guarantor pursuant to the provisions of Section 2.01 of this First Supplemental Indenture; provided, however, that, if a Default or Event of Default has occurred and is continuing, the Guarantor shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Company under the Indenture or the 2028 Debentures shall have been paid in full.

     Section 2.04  Reinstatement.  The Guarantor hereby agrees that the Guarantee provided for in Section 2.01 of this First Supplemental Indenture shall continue to be effective or be reinstated, as the case may be, if at any time, payment, or any part thereof, of any obligations or interest thereon is rescinded or must otherwise be restored by a Holder to the Company upon the bankruptcy or insolvency of the Company or the Guarantor.

     Section 2.05  Release. The Guarantee shall automatically and unconditionally be released and discharged, and no further action by the Guarantor, the Company or the Trustee is required for the release of the Guarantee, upon exercise by the Company of its defeasance of the Notes under Section 403(a) or (b) the Base Indenture or if the Company's obligations under this Indenture are discharged in accordance with Section 401 of the Base Indenture.

ARTICLE THREE

MISCELLANEOUS

     Section 3.01  Effect of This First Supplemental Indenture. This First Supplemental Indenture supplements the Original Indenture and shall be a part, and subject to all the terms, thereof. The Original Indenture, as supplemented and amended by this First Supplemental Indenture, is in all respects ratified and confirmed, and the Original Indenture and this First Supplemental Indenture shall be read, taken and construed as one and the same instrument. All provisions included in this First Supplemental Indenture supersede any conflicting provisions included in the Original Indenture unless not permitted by law.

     Section 3.02  Governing Law. This First Supplemental Indenture shall be governed by, and construed in accordance with and governed by the laws of the State of New York, without regard to conflicts of laws principles thereof.

     Section 3.03  Effect of Headings. The section headings herein are for convenience only and shall not affect the construction of this First Supplemental Indenture.

     Section 3.04  Counterparts. The parties may sign multiple counterparts of this First Supplemental Indenture. Each signed counterpart shall be deemed an original, but all of them together represent one and the same agreement.

     Section 3.05  Trustee. The Trustee makes no representations as to the validity or sufficiency of this First Supplemental Indenture; the recitals and statements herein are deemed to be those of the Company and Guarantor and not of the Trustee.

     IN WITNESS WHEREOF, the parties have caused this First Supplemental Indenture to be duly executed, all as of the date and year first written above.

	
                           
	
 
	
THE NEIMAN MARCUS GROUP, INC.

	
 
	
 
	
 

	
 
	
By:
	
/s/ Nelson A. Bangs

	
	
	

	
 
	
Name:
	
Nelson A. Bangs

	
 
	
Title:
	
Senior Vice President

	
 
	
 
	
 

	
 
	
 
	
NEIMAN MARCUS, INC.

	
 
	
 
	
 

	
 
	
By:
	
/s/ Nelson A. Bangs

	
	
	

	
 
	
Name:
	
Nelson A. Bangs

	
 
	
Title:
	
Senior Vice President

	
 
	
 
	
 

	
 
	
 
	
THE BANK OF NEW YORK TRUST

	
 
	
 
	
COMPANY, N.A.

	
 
	
 
	
 

	
 
	
By:
	
/s/ John C. Stuhlmann

	
	
	

	
 
	
Name:
	
John C. Stuhlmann

	
 
	
Title:
	
Vice President

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