Document:

exv10w2xcy

 

Exhibit 10.2(c)

THIRD AMENDMENT TO CREDIT AGREEMENT

     THIS THIRD AMENDMENT TO CREDIT AGREEMENT (the “Amendment”) is entered into
as of May 28, 2004, by and among ALLIED CAPITAL CORPORATION, a corporation
organized under the laws of the State of Maryland (“Borrower”), WESTLB AG, NEW
YORK BRANCH (“WestLB”), and BANK OF AMERICA, N.A., as Administrative Agent (in
such capacity, the “Administrative Agent”) for the Lenders under the Credit
Agreement (hereinafter defined).

R E C I T A L S

     A. Borrower, Administrative Agent, and certain other Agents and Lenders
are parties to that certain Third Amended and Restated Credit Agreement dated
as of April 18, 2003, as amended by that certain First Amendment to Credit
Agreement dated as of October 6, 2003, and as further amended by that certain
Second Amendment to Credit Agreement dated as of December 17, 2003 (the “Credit
Agreement”). Unless otherwise indicated herein, all terms used with their
initial letter capitalized are used herein with their meaning as defined in the
Credit Agreement; all Section references are to Sections in the Credit
Agreement; and all Paragraph references are to Paragraphs in this Amendment.

     B. Pursuant to and in accordance with Section 2.13, Borrower has requested
an increase in the aggregate Commitments under the Credit Agreement by
requesting WestLB to become a Lender with a Commitment of $20,000,000 (the
“Supplemental Commitment”).

     C. Subject to and upon the following terms and conditions, WestLB has
agreed to the Supplemental Commitment, and Administrative Agent has agreed to
the addition of WestLB as a Lender.

     D. Accordingly, in accordance with the requirements of Sections 2.13 and
12.5 and subject to and upon the following terms and conditions, Borrower,
Administrative Agent, and WestLB are entering into this Amendment (i) to add
WestLB as a “Lender” with a Commitment of $20,000,000, pursuant to Section 2.13
of the Credit Agreement, and (ii) to amend Schedule 2 to the Credit Agreement
to reflect the Supplemental Commitment.

     NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrower, WestLB, and Administrative Agent agree, as follows:

PARAGRAPH 1. AMENDMENTS TO CREDIT AGREEMENT.

1.1 Supplemental Commitment and Consent to New Lender.

     (a) Pursuant to Section 2.13, effective on and after the Amendment
Effective Date (hereinafter defined), (i) WestLB agrees to be a Lender having
the Commitment set forth opposite its name on Annex A hereto. Accordingly,
each Lender’s Commitment Percentage (and to the extent any Letters of Credit
are issued and outstanding on the Amendment Effective Date, all participations
by Lenders in the LC Subfacility) shall be recalculated to reflect the new
proportionate share of the revised total Commitments as stated on Annex A. As
of the Amendment Effective Date, WestLB shall be deemed irrevocably and
unconditionally to have purchased, without recourse or warranty, an undivided
interest and participation in such Letters of Credit in an amount equal to its
Commitment Percentage as stated on Annex A.

     (b) Borrower shall prepay all Revolving Loans (if any) outstanding on the
Amendment Effective Date (and pay any additional amounts required to be paid to
any Lender pursuant to Section 4.5,

     

			
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	Third Amendment to Credit Agreement

 

 

unless waived by such Lender) to the extent necessary to keep the
Revolving Loans ratable with the revised Commitment Percentages arising from
the non-ratable increase in the aggregate Commitments pursuant to this
Paragraph 1.1. If any Revolving Loans are prepaid on the Amendment Effective
Date as required hereby, then, notwithstanding anything to the contrary set
forth in the definition of “Interest Period,” Eurodollar Loans made during the
thirty day period immediately following the Amendment Effective Date may have
durations commencing on the date such Eurodollar Loan is made and ending on the
date 7 or 14 days thereafter.

     (c) On the Amendment Effective Date, WestLB shall be entitled to the
rights and benefits and subject to the duties of a Lender under the Loan
Documents.

     (d) By execution hereof, Administrative Agent and Borrower consent to the
addition of WestLB as a “Lender” under the Loan Documents.

1.2 Definitions and Terms. On and after the Amendment Effective Date
(hereinafter defined), (i) each reference to “Lender” or “Lenders” in the
Credit Agreement and the related Loan Documents shall include WestLB, and (ii)
each reference to Schedule 2 shall be to the Revised Schedule 2 as set forth on
Annex A, as the same may hereafter be amended or modified in accordance with
the Loan Documents.

1.3 Confirmations and Agreements of WestLB. WestLB (a) confirms that it has
received a copy of the Credit Agreement, together with copies of the
consolidated balance sheets of Borrower and its Consolidated Subsidiaries most
recently delivered under the Credit Agreement and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Amendment, including, without limitation, the
transaction contemplated in this Paragraph 1; and (b) agrees that it will,
independently and without reliance upon the Administrative Agent or any Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement. Furthermore, WestLB (i) appoints and authorizes
Administrative Agent to take such action as “Administrative Agent” on its
behalf and to exercise such powers and discretion under the Credit Agreement as
are delegated to Administrative Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (ii) agrees that it
will perform in accordance with their terms all of the obligations that by the
terms of the Credit Agreement are required to be performed by it as a Lender;
and (iii) shall deliver to Administrative Agent any U.S. Internal Revenue
Service or other forms required under Section 4.6 of the Credit Agreement.

1.5 Noteless Transaction. If requested by WestLB pursuant to Section 2.11(b),
Borrower shall execute and deliver to WestLB a Revolving Note reflecting the
Commitment of WestLB, after giving effect to the Supplemental Commitment
contemplated and effected in accordance with Paragraph 1.

PARAGRAPH 2. AMENDMENT EFFECTIVE DATE. This Amendment shall be binding upon
the Administrative Agent, Borrower, WestLB, and each other Lender on the last
day (the “Amendment Effective Date”) upon which (a) counterparts of this
Amendment shall have been executed and delivered to Administrative Agent by
Borrower, Administrative Agent, and WestLB, or when Administrative Agent shall
have received, telecopied, telexed, or other evidence satisfactory to it that
all such parties have executed and are delivering to Administrative Agent
counterparts thereof; (b) the Revolving Note (if previously requested by
WestLB) is executed by Borrower and delivered in accordance with Paragraph 1.5
hereof; (c) Borrower shall have paid to Administrative Agent (for distribution
to WestLB) the upfront fee payable to WestLB in the amount set forth as the
“Third Amendment Upfront Fee” on Annex A for WestLB; (d) Borrower shall have
repaid all outstanding Revolving Loans, to the extent any such Revolving Loans
are outstanding (without giving effect to any Revolving Loans made after the
effectiveness of this Amendment); (e) Borrower shall have delivered to
Administrative Agent copies

			
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	Third Amendment to Credit Agreement

 

 

(certified by the Secretary or Assistant Secretary of Borrower) of all
corporate action taken by Borrower to authorize the execution, delivery, and
performance of this Amendment, and any related Debt incurrence; and (f)
Borrower shall have delivered to Administrative Agent an opinion of Sutherland
Asbill & Brennan LLP, counsel to Borrower, addressed to Administrative Agent
and Lenders, in form and substance reasonably acceptable to Administrative
Agent.

PARAGRAPH 3. REPRESENTATIONS AND WARRANTIES. As a material inducement to
WestLB and Administrative Agent to execute and deliver this Amendment, Borrower
hereby represents and warrants to WestLB and Administrative Agent (with the
knowledge and intent that such parties are relying upon the same in entering
into this Amendment) the following: (a) the representations and warranties in
the Credit Agreement and in all other Loan Documents are true and correct on
the date hereof in all material respects, as though made on the date hereof,
except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties
shall have been true and accurate as of such earlier date); (b) no Default or
Event of Default exists under the Loan Documents or will exist after giving
effect to the transactions contemplated by this Amendment; (c) Borrower has the
right and power, and has taken all necessary action to authorize it to borrow
under the Credit Agreement, as further amended by this Amendment (the “Amended
Facility”); (d) Borrower has the right and power, and has taken all necessary
action to authorize it to execute, deliver, and perform this Amendment in
accordance with its terms and to consummate the transaction contemplated
hereby; (e) this Amendment has been duly executed and delivered by the duly
authorized officers of Borrower, and is a legal, valid, and binding obligation
of Borrower, enforceable against it in accordance with its terms; and (f) the
execution, delivery and performance of this Amendment in accordance with its
terms, and the borrowings under the Amended Facility do not and will not, by
the passage of time, the giving of notice, or otherwise: (i) require any
Governmental Approval, other than such as have been obtained and are in full
force and effect, or violate any Applicable Law (including all Environmental
Laws) relating to Borrower or any Subsidiary; (ii) conflict with, result in a
breach of, or constitute a default under the articles of incorporation or the
bylaws of Borrower or the organizational documents of any Subsidiary, or any
indenture, agreement, or other instrument to which Borrower or any Subsidiary
is a party or by which it or any of its respective properties may be bound; or
(iii) result in or require the creation or imposition of any Lien upon or with
respect to any property now owned or hereafter acquired by Borrower or any
Subsidiary.

PARAGRAPH 4. MISCELLANEOUS.

4.1 Effect on Loan Documents. The Credit Agreement and all related Loan
Documents shall remain unchanged and in full force and effect, except as
provided in this Amendment, and are hereby ratified and confirmed. On and
after the Amendment Effective Date, all references to the “Credit Agreement” or
the “Agreement” shall be to the Credit Agreement as herein amended. The
execution, delivery, and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any rights of the Lenders
under the Credit Agreement or any Loan Documents, nor constitute a waiver under
the Credit Agreement or any other provision of the Loan Documents.

4.2 Reference to Miscellaneous Provisions. This Amendment and the other
documents delivered pursuant to this Amendment are part of the Loan Documents
referred to in the Credit Agreement, and the provisions relating to Loan
Documents set forth in Section 12 are incorporated herein by reference the same
as if set forth herein verbatim.

4.3 Costs and Expenses. Borrower agrees to pay promptly the reasonable fees
and expenses of counsel to Administrative Agent for services rendered in
connection with the preparation, negotiation, reproduction, execution, and
delivery of this Amendment.

			
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	Third Amendment to Credit Agreement

 

 

4.4 Counterparts. This Amendment may be executed in a number of identical
counterparts, each of which shall be deemed an original for all purposes, and
all of which constitute, collectively, one agreement; but, in making proof of
this Amendment, it shall not be necessary to produce or account for more than
one such counterpart. It is not necessary that all parties execute the same
counterpart so long as identical counterparts are executed by Borrower,
Administrative Agent, and WestLB.

4.5 Entirety. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.

4.6 Parties. This Amendment binds and inures to Borrower, Administrative
Agent, WestLB, the other Lenders, and their respective successors and assigns.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment in
multiple counterparts as of the respective dates indicated on each signature
page hereof, but effective as of the Amendment Effective Date.

REMAINDER OF THIS PAGE INTENTIONALLY BLANK.

SIGNATURE PAGE TO FOLLOW.

			
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	Third Amendment to Credit Agreementexv10w20xby

 

Exhibit 10.20(b)

ALLIED CAPITAL 401(k) PLAN

 

 

Allied Capital 401(k) Plan

ADOPTION AGREEMENT #005

NONSTANDARDIZED 401(k) PROFIT SHARING PLAN

     The undersigned, Allied Capital Corporation (“Employer”), by
executing this Adoption Agreement, elects to establish a retirement plan and
trust (“Plan”) under the Wachovia Bank, National Association (basic
plan document
# 01). The Employer, subject to the Employer’s Adoption Agreement
elections, adopts fully the Prototype Plan and Trust provisions. This Adoption
Agreement, the basic plan document and any attached appendices or addenda,
constitute the Employer’s entire plan and trust document. All section
references within this Adoption Agreement are Adoption Agreement section
references unless the Adoption Agreement or the context indicate otherwise. All
article references are basic plan document and Adoption Agreement references as
applicable. Numbers in parenthesis which follow headings are references to
basic plan document sections. The Employer makes the following elections
granted under the corresponding provisions of the basic plan document.

ARTICLE I

DEFINITIONS

1. PLAN (1.21). The name of the Plan as adopted by the Employer is
Allied Capital 401(k) Plan .

2. TRUSTEE (1.33). The Trustee executing this Adoption Agreement is: (Choose
one of (a), (b) or (c))

	o	 	(a) A discretionary Trustee. See Plan Section 10.03[A].
	 
	þ	 	(b) A nondiscretionary Trustee. See Plan Section 10.03[B].
	 
	o	 	(c) A Trustee under a separate trust agreement. See Plan Section 10.03[G].

3. EMPLOYEE (1.11). The following Employees are not eligible to participate in
the Plan: (Choose (a) or one or more of (b) through (g) as applicable)

	o	 	(a) No exclusions.
	 
	o	 	(b) Collective bargaining Employees.
	 
	o	 	(c) Nonresident aliens.
	 
	þ	 	(d) Leased Employees.
	 
	þ	 	(e) Reclassified Employees.
	 
	þ	 	(f) Classifications: Any part time employee who works less than 35
hours per work week and any Temporary Employee as defined in Allied Capital’s
Resource Guide who works less than 1 year.
	 
	o	 	(g) Exclusions by types of contributions. The following
classification(s) of Employees are not eligible for the specified
contributions:

	 	 	 	Employee classification:                    
	 
	 	 	 	Contribution type:                    

4. COMPENSATION (1.07). The Employer makes the following election(s) regarding
the definition of Compensation for purposes of the contribution allocation
formula under Article III: (Choose one of (a), (b) or (c))

	þ	 	(a) W-2 wages increased by Elective Contributions.
	 
	o	 	(b) Code §3401(a) federal income tax withholding wages increased by Elective Contributions.
	 
	o	 	(c) 415 compensation.

[Note: Each of the Compensation definitions in (a), (b) and (c) includes
Elective Contributions. See Plan Section 1.07(D). To exclude Elective
Contributions, the Employer must elect (g).]

Compensation taken into account. For the Plan Year in which an Employee first
becomes a Participant, the Plan Administrator will determine the allocation of
Employer contributions (excluding deferral contributions) by taking into
account: (Choose one of (d) or (e))

	o	 	(d) Plan Year. The Employee’s Compensation for the entire Plan Year.

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Allied Capital 401(k) Plan

	þ	 	(e) Compensation while a Participant. The Employee’s Compensation only for
the portion of the Plan Year in which the Employee actually is a Participant.

Modifications to Compensation definition. The Employer elects to modify the
Compensation definition elected in (a), (b) or (c) as follows. (Choose one or
more of (f) through (n) as applicable. If the Employer elects to allocate its
nonelective contribution under Plan Section 3.04 using permitted disparity,
(i), (j), (k) and (l) do not apply):

	o	 	(f) Fringe benefits. The Plan excludes all reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses, deferred
compensation and welfare benefits.
	 
	o	 	(g) Elective Contributions. The Plan excludes a Participant’s Elective
Contributions. See Plan Section 1.07(D).
	 
	o	 	(h) Exclusion. The Plan excludes Compensation in
excess of:                    .
	 
	o	 	(i) Bonuses. The Plan excludes bonuses.
	 
	o	 	(j) Overtime. The Plan excludes overtime.
	 
	o	 	(k) Commissions. The Plan excludes commissions.
	 
	þ	 	(l) Nonelective contributions. The following modifications apply to the
definition of Compensation for nonelective contributions: Excludes
cut-off awards, formula awards, retention awards, referral fees, deferred
compensation distributions, non-cash benefits, severance payments, and any
bonuses other than amounts designated as an annual bonus by the Employer.
	 
	þ	 	(m) Deferral contributions. The following modifications apply to the
definition of Compensation for deferral contributions: Excludes cut-off
awards, formula awards, retention awards, referral fees, deferred compensation
distributions, non-cash benefits, severance payments, and all forms of bonuses.
	 
	o	 	(n) Matching contributions. The following modifications apply to the
definition of Compensation for matching
contributions:                    .

5. PLAN YEAR/LIMITATION
YEAR (1.24). Plan Year and Limitation Year mean the
12-consecutive month period (except for a short Plan Year) ending every:
(Choose (a) or (b). Choose (c) if applicable)

	þ	 	(a) December 31.
	 
	o	 	(b) Other:                    .
	 
	o	 	(c) Short Plan Year: commencing on:                     and ending on:                     .

6. EFFECTIVE DATE (1.10). The Employer’s adoption of the Plan is a: (Choose
one of (a) or (b))

	o	 	(a) New Plan. The Effective Date of the Plan is:                     .
	 
	þ	 	(b) Restated Plan. The restated Effective Date is: September 1, 1999.
	 
	 	 	This Plan is an amendment and restatement of an existing retirement
plan(s) originally established effective as of: September 1, 1999.

7. HOUR OF SERVICE/ELAPSED
TIME METHOD (1.15). The crediting method for Hours
of Service is: (Choose one or more of (a) through (d) as applicable)

     þ (a) Actual Method. See Plan Section 1.15(B).

     o (b) Equivalency Method. The Equivalency Method is:                      [Note: Insert “daily,” “weekly,” “semi-monthly payroll periods” or “monthly.”] See Plan Section 1.15(C).

     o (c) Combination Method. In lieu of the Equivalency Method specified in
(b), the Actual Method applies for purposes of:                     .

© Copyright 2001 Wachovia Bank, National Association

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Allied Capital 401(k) Plan

	o	 	(d) Elapsed Time Method. In lieu of crediting Hours of Service, the
Elapsed Time Method applies for purposes of crediting Service for: (Choose
one or more of (1), (2) or (3) as applicable)

	 	o	 	(1) Eligibility under Article II.
	 
	 	o	 	(2) Vesting under Article V.
	 
	 	o	 	(3) Contribution allocations under Article III.

8. PREDECESSOR EMPLOYER
SERVICE (1.30). In addition to the predecessor service
the Plan must credit by reason of Section 1.30 of the Plan, the Plan credits as
Service under this Plan, service with the following predecessor employer(s):
N/A.

[Note: If the Plan does not credit any additional predecessor service under
this Section 1.30, insert “N/A” in the blank line. The Employer also may elect
to credit predecessor service with specified Participating Employers only. See
the Participation Agreement.] Service with the designated predecessor
employer(s) applies: (Choose one or more of (a) through (d) as applicable)

	o	 	(a) Eligibility. For eligibility under Article II. See Plan Section 1.30 for time of Plan entry.
	 
	o	 	(b) Vesting. For vesting under Article V.
	 
	o	 	(c) Contribution allocation. For contribution allocations under Article III.
	 
	o	 	(d) Exceptions. Except for the following Service:                     .

ARTICLE II

ELIGIBILITY REQUIREMENTS

9. ELIGIBILITY (2.01).

Eligibility conditions. To become a Participant in the Plan, an Employee must
satisfy the following eligibility conditions:

(Choose one or more of (a) through (e) as applicable) [Note: If the Employer
does not elect (c), the Employer’s elections under (a) and (b) apply to all
types of contributions. The Employer as to deferral contributions may not elect
(b)(2) and may not elect more than 12 months in (b)(4) and (b)(5).]

	þ	 	(a) Age. Attainment of age 21 (not to exceed age 21).
	 
	þ	 	(b) Service. Service requirement. (Choose one of (1) through (5))

	 	o	 	(1) One Year of Service.
	 
	 	o	 	(2) Two Years of Service, without an intervening Break in Service. See Plan Section 2.03(A).
	 
	 	þ	 	(3) One Hour of Service (immediate completion of Service requirement).
The Employee satisfies the Service requirement on his/her Employment
Commencement Date.
	 
	 	o	 	(4)        months (not exceeding 24).
	 
	 	o	 	(5) An Employee must complete            Hours of Service
within the            time period following the
Employee’s Employment Commencement Date. If an Employee does not complete
the stated Hours of Service during the specified time period (if any), the
Employee is subject to the One Year of Service requirement. [Note: The
number of hours may not exceed 1,000 and the time period may not exceed 24
months. If the Plan does not require the Employee to satisfy the Hours of
Service requirement within a specified time period, insert “N/A” in the
second blank line.]

	o	 	(c) Alternative 401(k)/401(m) eligibility conditions. In lieu of the
elections in (a) and (b), the Employer elects the following eligibility
conditions for the following types of contributions: (Choose (1) or (2) or
both if the Employer wishes to impose less restrictive eligibility
conditions for deferral/Employee contributions or for matching
contributions)

	 	(1)o	 	Deferral/Employee contributions: (Choose one of a. through
d. Choose e. if applicable)
	 
	 	a.o	 	One Year of Service
	 
	 	b.o	 	One Hour of Service (immediate
completion of Service requirement)
	 
	 	c.o	 	         months (not exceeding 12)
	 
	 	d.o	 	An Employee must complete            Hours of Service
within the            time period following an Employee’s
Employment Commencement Date. If an Employee does not complete the
stated Hours

© Copyright 2001 Wachovia Bank, National Association

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Allied Capital 401(k) Plan

	 	 	 	of Service during the specified time period (if any), the
Employee is subject to the One Year of Service requirement.
[Note: The number of hours may not exceed 1,000 and the
time period may not exceed 12 months. If the Plan does not
require the Employee to satisfy the Hours of Service
requirement within a specified time period, insert “N/A” in
the second blank line.]
	 
	 	e.o	 	Age        (not exceeding age 21)
	 
	 	(2)o	 	Matching contributions: (Choose one of f. through i. Choose
j. if applicable)
	 
	 	f.o	 	One Year of Service
	 
	 	g.o	 	One Hour of Service (immediate
completion of Service requirement)
	 
	 	h.o	 	       months (not exceeding 24)
	 
	 	i.o	 	An Employee must complete            Hours of Service
within the            time period following an Employee’s
Employment Commencement Date. If an Employee does not complete the
stated Hours of Service during the specified time period (if any),
the Employee is subject to the One Year of Service requirement.
[Note: The number of hours may not exceed 1,000 and the time period
may not exceed 24 months. If the Plan does not require the Employee
to satisfy the Hours of Service requirement within a specified time
period, insert “N/A” in the second blank line.]
	 
	 	j.o	 	Age        (not exceeding age 21)

	o	 	(d) Service requirements:             .

[Note: Any Service requirement the Employer elects in (d) must be
available under other Adoption Agreement elections or a combination thereof.]
	 
	o	 	(e) Dual eligibility. The eligibility conditions of this Section 2.01
apply solely to an Employee employed by the
Employer after             . If the Employee was employed by the Employer
by the specified date, the Employee will become a Participant on the
latest of: (i) the Effective Date; (ii) the restated Effective Date;
(iii) the Employee’s Employment Commencement Date; or (iv) on the date
the Employee attains age        (not exceeding age 21).

Plan Entry Date. “Plan Entry Date” means the Effective Date and: (Choose one of
(f) through (j). Choose (k) if applicable) [Note: If the Employer does not
elect (k), the elections under (f) through (j) apply to all types of
contributions. The Employer must elect at least one Entry Date per Plan Year.]

	o	 	(f) Semi-annual Entry Dates. The first day of the Plan Year and the
first day of the seventh month of the Plan Year.
	 
	o	 	(g) The first day of the Plan Year.
	 
	þ	 	(h) Employment Commencement Date (immediate eligibility).
	 
	o	 	(i) The first day of each:
             (e.g., “Plan Year quarter”).
	 
	o	 	(j) The following Plan Entry Dates:             .

	þ	 	(k) Alternative 401(k)/401(m) Plan Entry Date(s). For the alternative
401(k)/401(m) eligibility conditions under (c),
Plan Entry Date means: (Choose (1) or (2) or both as applicable)

	 	(1)	 	þ Deferral/Employee contributions
(Choose one of a. through d.)
	 
	 	(2)	 	Matching
contributions
 (Choose one of e. through h.)

	 	a.	 	o Semi-annual Entry Dates
	 
	 	b.	 	o The first day of the Plan Year
	 
	 	c.	 	o Employment Commencement Date
	 
	 	d.	 	þ The first day of
each: Quarter
	 
	 	e.	 	o Semi-annual Entry Dates
	 
	 	f.	 	o The first day of the Plan Year
	 
	 	g.	 	o Employment Commencement Date (immediate
eligibility) (immediate eligibility)
	 
	 	h.	 	o The first day of each: 

Time of participation. An Employee will become a Participant, unless excluded
under Section 1.11, on the Plan Entry Date (if employed on that date): (Choose
one of (l), (m) or (n). Choose (o) if applicable): [Note: If the Employer does
not elect (o), the election under (l), (m) or (n) applies to all types of
contributions.]

	þ	 	(l) Immediately following or coincident with
	 
	o	 	(m) Immediately preceding or coincident with
	 
	o	 	(n) Nearest
	 
	o	 	(o) Alternative 401(k)/401(m) election(s): (Choose (1) or (2) or both as applicable)

© Copyright 2001 Wachovia Bank, National Association

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Allied Capital 401(k) Plan

	 	 	 	 	 	 	 	 	 	 	 	 	 
	(1)

	 	o
	 	Deferral contributions
	 	 	(2	)	 	o
	 	Matching contributions
(Choose one of b., c. or d.)
	a.

	 	o
	 	Immediately following
or coincident with
	 	 	b.	 	 	o
	 	Immediately following
or coincident with
	 
	 	 
	 	 	 	 	c.	 	 	o
	 	Immediately preceding

or coincident with

	 
	 	 
	 	 	 	 	d.	 	 	o
	 	Nearest

the date the Employee completes the eligibility conditions described in this
Section 2.01. [Note: Unless otherwise excluded under
Section 1.11, an Employee must become a Participant by the earlier of: (1) the
first day of the Plan Year beginning after the date
the Employee completes the age and service requirements of Code §410(a); or (2)
6 months after the date the Employee
completes those requirements.]

10. YEAR OF SERVICE — ELIGIBILITY (2.02). (Choose (a) and (b) as applicable):
[Note: If the Employer does not elect
a Year of Service condition or elects the Elapsed Time Method, the Employer
should not complete (a) or (b).]

	o	 	(a) Year of Service. An Employee must complete                     Hour(s) of
Service during an eligibility computation period
to receive credit for a Year of Service under Article II: [ Note: The number may not exceed 1,000. If left blank, the
requirement is 1,000.]
	 
	o	 	(b) Eligibility computation period. After the initial eligibility
computation period described in Plan Section 2.02, the
Plan measures the eligibility computation period as: (Choose one of (1) or
(2))

	 	o	 	(1) The Plan Year beginning with the Plan Year which includes the
first anniversary of the Employee’s Employment
Commencement Date.
	 
	 	o	 	(2) The 12-consecutive month period beginning with each
anniversary of the Employee’s Employment
Commencement Date.

11. PARTICIPATION — BREAK IN SERVICE (2.03). The one year hold-out rule
described in Plan Section 2.03(B):
(Choose one of (a), (b) or (c))

	þ	 	(a) Not applicable. Does not apply to the Plan.
	 
	o	 	(b) Applicable. Applies to the Plan and to all Participants.
	 
	o	 	(c) Limited application. Applies to the Plan, but only to a
Participant who has incurred a Separation from Service.

12. ELECTION NOT TO PARTICIPATE (2.06). The Plan: (Choose one of (a) or (b))

	þ	 	(a) Election not permitted. Does not permit an eligible Employee to
elect not to participate.
	 
	o	 	(b) Irrevocable election. Permits an Employee to elect not to
participate if the Employee makes a one-time
irrevocable election prior to the Employee’s Plan Entry Date.

ARTICLE III

EMPLOYER CONTRIBUTIONS, DEFERRAL CONTRIBUTIONS AND FORFEITURES

13. AMOUNT AND TYPE (3.01). The amount and type(s) of the Employer’s
contribution to the Trust for a Plan Year or
other specified period will equal: (Choose one or more of (a) through (f) as
applicable)

	þ	 	(a) Deferral contributions (401(k) arrangement). The dollar or
percentage amount by which each Participant has
elected to reduce his/her Compensation, as provided in the Participant’s
salary reduction agreement and in accordance
with Section 3.02.
	 
	o	 	(b) Matching contributions (other than safe harbor matching
contributions under Section 3.01(d)). The
matching contributions made in accordance with Section 3.03.
	 
	þ	 	(c) Nonelective contributions (profit sharing). The following nonelective
contribution (Choose (1) or (2) or both as
applicable): [Note: The Employer may designate as a qualified nonelective
contribution, all or any portion of its
nonelective contribution. See Plan Section 3.04(F).]

	 	o	 	(1) Discretionary. An amount the Employer in its sole discretion may determine.
	 
	 	þ	 	(2) Fixed. The following amount: 2% of eligible compensation under the Plan

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Allied Capital 401(k) Plan

	þ	 	(d) 401(k) safe harbor contributions. The following 401(k) safe harbor
contributions described in Plan Section
14.02(D): (Choose one of (1), (2) or (3). Choose (4), if applicable)

	 	þ	 	(1) Safe harbor nonelective contribution. The safe harbor
nonelective contribution equals 3% % of a
Participant’s Compensation [Note: the amount in the blank must be at least
3%.].
	 
	 	o	 	(2) Basic safe harbor matching contribution. A matching
contribution equal to 100% of each Participant’s
deferral contributions not exceeding 3% of the Participant’s Compensation,
plus 50% of each Participant’s deferral
contributions in excess of 3% but not in excess of 5% of the Participant’s
Compensation. For this purpose,
“Compensation” means Compensation for:           . [Note: The Employer
must complete the blank line with the
applicable time period for computing the Employer’s basic safe harbor
match, such as “each payroll period,”
“each month,” “each Plan Year quarter” or “the Plan Year”.]
	 
	 	o	 	(3) Enhanced safe harbor matching contribution. (Choose one of a.
or b.).

	 	o	 	a. Uniform percentage. An amount equal to      % of each
Participant’s deferral contributions not
exceeding      % of the Participant’s Compensation. For this purpose,
“Compensation” means Compensation
for:           . [See the Note in (d)(2).]
	 
	 	o	 	b. Tiered formula. An amount equal to the specified matching
percentage for the corresponding level of
each Participant’s deferral contribution percentage. For this purpose,
“Compensation” means Compensation
for:           . [See the Note in (d)(2).]

	 	 	 	 	 	 	 	 
	 	Deferral Contribution Percentage
	 	Matching Percentage

	 	 	 	 	 	 	 	 
	 	 	
 	 	 	 	
 	 
	 	 	 	 	 	 	 	 
	 	 	
 	 	 	 	
 	 
	 	 	 	 	 	 	 	 
	 	 	
 	 	 	 	
 	 

[ Note: The matching percentage may not increase as the deferral contribution
percentage increases and the enhanced
matching formula otherwise must satisfy the requirements of Code
§§401(k)(12)(B)(ii) and (iii). If the Employer wishes to
avoid ACP testing on its enhanced safe harbor matching contribution, the
Employer also must limit deferral contributions
taken into account (the “Deferral Contribution Percentage”) for the matching
contribution to 6% of Plan Year Compensation.]

	 	o	 	(4) Another plan. The Employer will satisfy the 401(k) safe harbor
contribution in the following plan:           .

	o	 	(e) Davis-Bacon contributions. The amount(s) specified for the
applicable Plan Year or other applicable period in
the Employer’s Davis-Bacon contract(s). The Employer will make a
contribution only to Participants covered by the
contract and only with respect to Compensation paid under the contract. If
the Participant accrues an allocation of
nonelective contributions (including forfeitures) under the Plan in
addition to the Davis-Bacon contribution, the Plan
Administrator will: (Choose one of (1) or (2))

	 	o	 	(1) Not reduce the Participant’s nonelective contribution
allocation by the Davis-Bacon contribution.
	 
	 	o	 	(2) Reduce the Participant’s nonelective contribution allocation
by the Davis-Bacon contribution.

	o	 	(f) Frozen Plan. This Plan is a frozen Plan effective:           .
For any period following the specified date, the Employer
will not contribute to the Plan, a Participant may not contribute and an
otherwise eligible Employee will not become a
Participant in the Plan.

14. DEFERRAL
CONTRIBUTIONS (3.02). The following limitations and terms apply to
an Employee’s deferral
contributions: (If the Employer elects Section 3.01(a), the Employer must elect
(a). Choose (b) or (c) as applicable)

	þ	 	(a) Limitation on amount. An Employee’s deferral contributions are
subject to the following limitation(s) in addition
to those imposed by the Code: (Choose (1), (2) or (3) as applicable)

	 	þ	 	(1) Maximum deferral amount: any whole percentage of eligible
compensation under the Plan.
	 
	 	þ	 	(2) Minimum deferral amount: 1%.
	 
	 	o	 	(3) No limitations.

For the Plan Year in which an Employee first becomes a Participant, the Plan
Administrator will apply any percentage limitation
the Employer elects in (1) or (2) to the Employee’s Compensation: (Choose one
of (4) or (5) unless the Employer elects (3))

	 	þ	 	(4) Only for the portion of the Plan Year in which the Employee
actually is a Participant.

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Allied Capital 401(k) Plan

	 	o	 	(5) For the entire Plan Year.

	o	 	(b) Negative deferral election. The Employer will withhold      %
from the Participant’s Compensation unless the
Participant elects a lesser percentage (including zero) under his/her
salary reduction agreement. See Plan Section
14.02(C). The negative election will apply to: (Choose one of (1) or (2))

	 	o	 	(1) All Participants who have not deferred at least the automatic deferral amount as of:           .
	 
	 	o	 	(2) Each Employee whose Plan Entry Date is on or following the negative election effective date.

	o	 	(c) Cash or deferred contributions. For each Plan Year for which the
Employer makes a designated cash or deferred
contribution under Plan Section 14.02(B), a Participant may elect to
receive directly in cash not more than the
following portion (or, if less, the 402(g) limitation) of his/her
proportionate share of that cash or deferred contribution:
(Choose one of (1) or (2))

	 	o	 	(1) All or any portion. o (2)      %.

Modification/revocation of salary reduction agreement. A Participant
prospectively may modify or revoke a salary reduction
agreement, or may file a new salary reduction agreement following a prior
revocation, at least once per Plan Year or during any
election period specified by the basic plan document or required by the
Internal Revenue Service. The Plan Administrator also
may provide for more frequent elections in the Plan’s salary reduction
agreement form.

15. MATCHING CONTRIBUTIONS (INCLUDING ADDITIONAL SAFE HARBOR MATCH UNDER PLAN
SECTION 14.02(D)(3)) (3.03). The Employer matching contribution is: (If the
Employer elects Section 3.01(b), the Employer
must elect one or more of (a), (b) or (c) as applicable. Choose (d) if
applicable)

	 	o	 	(a) Fixed formula. An amount equal to      % of each Participant’s
deferral contributions.
	 
	 	o	 	(b) Discretionary formula. An amount (or additional amount) equal to a
matching percentage the Employer from
time to time may deem advisable of the Participant’s deferral
contributions. The Employer, in its sole discretion, may
designate as a qualified matching contribution, all or any portion of its
discretionary matching contribution. The portion
of the Employer’s discretionary matching contribution for a Plan Year not
designated as a qualified matching
contribution is a regular matching contribution.
	 
	 	o	 	(c) Multiple level formula. An amount equal to the following
percentages for each level of the Participant’s deferral
contributions. [Note: The matching percentage only will apply to deferral
contributions in excess of the previous level
and not in excess of the stated deferral contribution percentage.]

	 	 	 	 	 	 	 	 
	 	Deferral Contributions
	 	Matching Percentage

	 	 	 	 	 	 	 	 
	 	 	
 	 	 	 	
 	 
	 	 	 	 	 	 	 	 
	 	 	
 	 	 	 	
 	 
	 	 	 	 	 	 	 	 
	 	 	
 	 	 	 	
 	 

	o	 	(d) Related Employers. If two or more Related Employers contribute to
this Plan, the Plan Administrator will
allocate matching contributions and matching contribution forfeitures only
to the Participants directly employed by the
contributing Employer. The matching contribution formula for the other
Related Employer(s) is:           . [Note: If the
Employer does not elect (d), the Plan Administrator will allocate all
matching contributions and matching forfeitures
without regard to which contributing Related Employer directly employs the
Participant.]

Time period for matching contributions. The Employer will determine its
matching contribution based on deferral
contributions made during each: (Choose one of (e) through (h))

	o	 	(e) Plan Year.
	 
	o	 	(f) Plan Year quarter.
	 
	o	 	(g) Payroll period.
	 
	o	 	(h) Alternative time period:           . [Note: Any alternative time
period the Employer elects in (h) must be the same
for all Participants and may not exceed the Plan Year.]

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Allied Capital 401(k) Plan

Deferral contributions taken into account. In determining a Participant’s
deferral contributions taken into account for the
above-specified time period under the matching contribution formula, the following limitations apply: (Choose one of (i), (j) or
(k))

	o	 	(i) All deferral contributions. The Plan Administrator will take into account all deferral contributions.
	 
	o	 	(j) Specific limitation. The Plan Administrator will disregard
deferral contributions exceeding      % of the
Participant’s Compensation. [ Note: To avoid the ACP test in a safe harbor
401(k) plan, the Employer must limit
deferrals and Employee contributions which are subject to match to 6% of
Plan Year Compensation.]
	 
	o	 	(k) Discretionary. The Plan Administrator will take into account the
deferral contributions as a percentage of the
Participant’s Compensation as the Employer determines.

Other matching contribution requirements. The matching contribution formula is
subject to the following additional
requirements: (Choose (l) or (m) or both if applicable)

	o	 	(l) Matching contribution limits. A Participant’s matching
contributions may not exceed: (Choose one of (1) or (2))

	 	o	 	(1)           . [Note: The Employer may elect (1) to place an
overall dollar or percentage limit on matching
contributions.]
	 
	 	o	 	(2) 4% of a Participant’s Compensation for the Plan Year under the
discretionary matching contribution formula.
[Note: The Employer must elect (2) if it elects a discretionary matching
formula with the safe harbor 401(k)
contribution formula and wishes to avoid the ACP test.]

	o	 	(m) Qualified matching contributions. The Plan Administrator will
allocate as qualified matching contributions, the
matching contributions specified in Adoption Agreement Section:           . The Plan Administrator will allocate all
other matching contributions as regular matching contributions. [Note: If the Employer elects two matching formulas,
the Employer may use (m) to designate one of the formulas as a qualified
matching contribution.]

16. CONTRIBUTION ALLOCATION (3.04).

Employer nonelective contributions (3.04(A)).The Plan Administrator will
allocate the Employer’s nonelective contribution under
the following contribution allocation formula: (Choose one of (a), (b) or (c).
Choose (d) if applicable)

	þ	 	(a) Nonintegrated (pro rata) allocation formula.
	 
	o	 	(b) Permitted disparity. The following permitted disparity formula and
definitions apply to the Plan: (Choose one of
(1) or (2). Also choose (3))

	 	o	 	(1) Two-tiered allocation formula.
	 
	 	o	 	(2) Four-tiered allocation formula.
	 
	 	o	 	(3) For purposes of Section 3.04(b), “Excess Compensation” means
Compensation in excess of: (Choose one of
a. or b.)

	 	o	 	a.      % of the taxable wage base in effect on the first day of the Plan Year, rounded to the next highest
$      (not exceeding the taxable wage base).
	 
	 	o	 	b. The following integration level:           .
	 
	 	 	 	[Note: The integration level cannot exceed the taxable wage base in effect
for the Plan Year for which this
Adoption Agreement first is effective.]

	o	 	(c) Uniform points allocation formula. Under the uniform points
allocation formula, a Participant receives: (Choose
(1) or both (1) and (2) as applicable)

	 	o	 	(1)      point(s) for each Year of Service. Year of Service means:           .
	 
	 	o	 	(2) One point for each $          [not to exceed $200] increment of Plan Year Compensation.

	o	 	(d) Incorporation of contribution formula. The Plan Administrator will allocate the Employer’s nonelective
contribution under Section(s) 3.01(c)(2), (d)(1) or (e) in accordance with
the contribution formula adopted by the
Employer under that Section.

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Allied Capital 401(k) Plan

Qualified nonelective contributions. (3.04(F)). The Plan Administrator will
allocate the Employer’s qualified nonelective
contributions to: (Choose one of (e) or (f))

	o	 	(e) Nonhighly compensated Employees only.
	 
	þ	 	(f) All Participants.

Related Employers. (Choose (g) if applicable)

	o	 	(g) Allocate only to directly employed Participants. If two or more
Related Employers adopt this Plan, the Plan
Administrator will allocate all nonelective contributions and forfeitures
attributable to nonelective contributions only to
the Participants directly employed by the contributing Employer. If a
Participant receives Compensation from more
than one contributing Employer, the Plan Administrator will determine the
allocations under this Section 3.04 by
prorating the Participant’s Compensation between or among the
participating Related Employers. [Note: If the
Employer does not elect 3.04(g), the Plan Administrator will allocate all
nonelective contributions and forfeitures
without regard to which contributing Related Employer directly employs the
Participant. The Employer may not elect
3.04(g) under a safe harbor 401(k) Plan.]

17. FORFEITURE ALLOCATION (3.05). The Plan Administrator will allocate a
Participant forfeiture: (Choose one or
more of (a), (b) or (c) as applicable) [Note: Even if the Employer elects
immediate vesting, the Employer should complete Section
3.05. See Plan Section 9.11.]

	o	 	(a) Matching contribution forfeitures. To the extent attributable to matching contributions: (Choose one of (1)
through (4))

	 	o	 	(1) As a discretionary matching contribution.
	 
	 	o	 	(2) To reduce matching contributions.
	 
	 	o	 	(3) As a discretionary nonelective contribution.
	 
	 	o	 	(4) To reduce nonelective contributions.

	þ	 	(b) Nonelective contribution forfeitures. To the extent attributable to
Employer nonelective contributions: (Choose
one of (1) through (4))

	 	o	 	(1) As a discretionary nonelective contribution.
	 
	 	þ	 	(2) To reduce nonelective contributions.
	 
	 	o	 	(3) As a discretionary matching contribution.
	 
	 	o	 	(4) To reduce matching contributions.

	o	 	(c) Reduce administrative expenses. First to reduce the Plan’s ordinary and necessary administrative expenses for
the Plan Year and then allocate any remaining forfeitures in the manner
described in Sections 3.05(a) or (b) as
applicable.

Timing of forfeiture allocation. The Plan Administrator will allocate
forfeitures under Section 3.05 in the Plan Year: (Choose
one of (d) or (e))

	o	 	(d) In which the forfeiture occurs.
	 
	þ	 	(e) Immediately following the Plan Year in which the forfeiture occurs.

18. ALLOCATION CONDITIONS (3.06).

Allocation conditions. The Plan does not apply any allocation conditions to
deferral contributions, 401(k) safe harbor
contributions (under Section 3.01(d)) or to Davis-Bacon contributions (except
as the Davis-Bacon contract provides). To receive
an allocation of matching contributions, nonelective contributions, qualified
nonelective contributions or Participant forfeitures, a
Participant must satisfy the following allocation condition(s): (Choose one or
more of (a) through (i) as applicable)

	þ	 	(a) Hours of Service condition. The Participant must complete at least
the specified number of Hours of Service (not
exceeding 1,000) during the Plan Year: 1000.

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Allied Capital 401(k) Plan

	þ	 	(b) Employment condition. The Participant must be employed by the Employer
on the last day of the Plan
Year (designate time period).
	 
	o	 	(c) No allocation conditions.
	 
	o	 	(d) Elapsed Time Method. The Participant must complete at least the
specified number (not exceeding 182) of consecutive calendar days of
employment with the Employer during the Plan Year:                    .
	 
	o	 	(e) Termination of Service/501 Hours of Service coverage rule. The
Participant either must be employed by the
Employer on the last day of the Plan Year or must complete at least 501
Hours of Service during the Plan Year. If the Plan uses the Elapsed Time
Method of crediting Service, the Participant must complete at least 91
consecutive calendar days of employment with the Employer during the Plan
Year.
	 
	o	 	(f) Special allocation conditions for matching contributions. The
Participant must complete at least                     Hours of Service during the                     (designate
time period) for the matching contributions made for that time period.
	 
	o	 	(g) Death, Disability or Normal Retirement Age. Any condition specified
in Section 3.06                     applies if the Participant incurs a Separation from
Service during the Plan Year on account of:                     (e.g., death, Disability or
Normal Retirement Age).
	 
	o	 	(h) Suspension of allocation conditions for coverage. The suspension of
allocation conditions of Plan Section
3.06(E) applies to the Plan.
	 
	o	 	(i) Limited allocation conditions. The Plan does not impose an
allocation condition for the following types of contributions:                    . [Note:
Any election to limit the Plan’s allocation conditions to certain
contributions must be the same for all Participants, be definitely
determinable and not discriminate in favor of Highly Compensated
Employees.]

ARTICLE IV

PARTICIPANT CONTRIBUTIONS

19. EMPLOYEE (AFTER TAX)
CONTRIBUTIONS (4.02). The following elections apply to
Employee contributions:
(Choose one of (a) or (b). Choose (c) if applicable)

	þ	 	(a) Not permitted. The Plan does not permit Employee contributions.
	 
	o	 	(b) Permitted. The Plan permits Employee contributions subject to the
following limitations:                    . [Note: Any designated limitation(s) must be the same
for all Participants, be definitely determinable and not discriminate in favor
of Highly Compensated Employees.]
	 
	o	 	(c) Matching contribution. For each Plan Year, the Employer’s matching
contribution made with respect to
Employee contributions is:                    .

ARTICLE V

VESTING REQUIREMENTS

20. NORMAL/EARLY
RETIREMENT AGE (5.01). A Participant attains Normal Retirement
Age (or Early Retirement Age, if applicable) under the Plan on the following
date: (Choose one of (a) or (b). Choose (c) if applicable)

	þ	 	(a) Specific age. The date the Participant attains age 59 1/2 . [Note: The
age may not exceed age 65.]
	 
	o	 	(b) Age/participation. The later of the date the Participant attains                    
years of age or the                     anniversary of the first day of the Plan Year in which
the Participant commenced participation in the Plan. [Note: The age may
not exceed age 65 and the anniversary may not exceed the 5th.]
	 
	o	 	(c) Early Retirement Age. Early Retirement Age is the later of: (i) the
date a Participant attains age                     or (ii) the date a Participant reaches
his/her                     anniversary of the first day of the Plan Year in which the
Participant commenced participation in the Plan.

21. PARTICIPANT’S
DEATH OR DISABILITY (5.02). The 100% vesting rule under Plan
Section 5.02 does not apply to:
(Choose (a) or (b) or both as applicable)

	o	 	(a) Death.
	 
	o	 	(b) Disability.

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Allied Capital 401(k) Plan

22. VESTING SCHEDULE (5.03). A Participant has a 100% Vested interest at all
times in his/her deferral contributions, qualified nonelective contributions,
qualified matching contributions, 401(k) safe harbor contributions and
Davis-Bacon contributions (unless otherwise indicated in (f)). The following
vesting schedule applies to Employer regular matching contributions and to
Employer nonelective contributions: (Choose (a) or choose one or more of (b)
through (f) as applicable)

	þ	 	(a) Immediate vesting. 100% Vested at all times. [Note: The Employer must
elect (a) if the Service condition under Section 2.01 exceeds One Year of
Service or more than twelve months.]
	 
	o	 	(b) Top-heavy vesting schedules. [Note: The Employer must choose one of
(b)(1), (2) or (3) if it does not elect (a).]

	 	o	 	(1) 6-year graded as specified in the Plan.
	 
	 	o	 	(2) 3-year cliff as specified in the Plan.

	 	o	 	(3) Modified top-heavy schedule

	 	 	 	 	 
	Years of	 	Vested
	Service
	 	Percentage

	Less than 1
	 	 	%	 
	1
	 	 	%	 
	2
	 	 	%	 
	3
	 	 	%	 
	4
	 	 	%	 
	5
	 	 	%	 
	6 or more
	 	 	100	%

	o	 	(c) Non-top-heavy vesting schedules. [Note: The Employer may elect one
of (c)(1), (2) or (3) in addition to (b).]

	 	o	 	(1) 7-year graded as specified in the Plan.
	 
	 	o	 	(2) 5-year cliff as specified in the Plan.

	 	o	 	(3) Modified non-top-heavy schedule

	 	 	 	 	 
	Years of	 	Vested
	Service
	 	Percentage

	Less than 1
	 	 	%	 
	1
	 	 	%	 
	2
	 	 	%	 
	3
	 	 	%	 
	4
	 	 	%	 
	5
	 	 	%	 
	6
	 	 	%	 
	7 or more
	 	 	100	%

If the Employer does not elect (c), the vesting schedule elected in (b) applies
to all Plan Years. [Note: The modified top-heavy schedule of (b)(3) must
satisfy Code §416. If the Employer elects (c)(3), the modified non-top-heavy
schedule must satisfy Code §411(a)(2).]

	o	 	(d) Separate vesting election for regular matching contributions. In
lieu of the election under (a), (b) or (c), the following vesting schedule
applies to a Participant’s regular matching contributions: (Choose one of
(1) or (2))

	 	o	 	(1) 100% Vested at all times.
	 
	 	o	 	(2) Regular matching vesting
schedule:                    .

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Allied Capital 401(k) Plan

	 	 	 	[Note: The vesting schedule completed under (d)(2) must comply with Code
§411(a)(4).]

	o	 	(e) Application of top-heavy schedule. The non-top-heavy schedule
elected under (c) applies in all Plan Years in which the Plan is not a
top-heavy plan. [Note: If the Employer does not elect (e), the top-heavy
vesting schedule will apply for the first Plan Year in which the Plan is
top-heavy and then in all subsequent Plan Years.]
	 
	o	 	(f) Special vesting provisions:                    . [Note: Any special vesting provision
must satisfy Code §411(a). Any special vesting provision must be
definitely determinable, not discriminate in favor of Highly Compensated
Employees and not violate Code §401(a)(4).]

23. YEAR OF SERVICE —
VESTING (5.06). (Choose (a) and (b)): [Note: If the
Employer elects the Elapsed Time Method or elects immediate vesting, the
Employer should not complete (a) or (b).]

	o	 	(a) Year of Service. An Employee must complete at least                     Hours of
Service during a vesting computation period to receive credit for a Year
of Service under Article V. [Note: The number may not exceed 1,000. If
left blank, the requirement is 1,000.]
	 
	o	 	(b) Vesting computation period. The Plan measures a Year of Service on
the basis of the following 12-consecutive month period: (Choose one of (1)
or (2))

	 	o	 	(1) Plan Year.
	 
	 	o	 	(2) Employment year (anniversary of Employment Commencement Date).

24. EXCLUDED YEARS OF
SERVICE — VESTING (5.08). The Plan excludes the following
Years of Service for purposes of vesting: (Choose (a) or choose one or more of
(b) through (f) as applicable)

	o	 	(a) None. None other than as specified in Plan Section 5.08(a).
	 
	o	 	(b) Age 18. Any Year of Service before the Year of Service during which
the Participant attained the age of 18.
	 
	o	 	(c) Prior to Plan establishment. Any Year of Service during the period
the Employer did not maintain this Plan or a predecessor plan.
	 
	o	 	(d) Parity Break in Service. Any Year of Service excluded under the
rule of parity. See Plan Section 5.10.
	 
	o	 	(e) Prior Plan terms. Any Year of Service disregarded under the terms
of the Plan as in effect prior to this restated Plan.
	 
	o	 	(f) Additional exclusions. Any Year of Service before:                    .

[Note: Any exclusion specified under (f) must comply with Code
§411(a)(4). Any exclusion must be definitely determinable, not
discriminate in favor of Highly Compensated Employees and not violate
Code §401(a)(4). If the Employer elects immediate vesting, the Employer
should not complete Section 5.08.]

ARTICLE VI

DISTRIBUTION OF ACCOUNT BALANCE

25. TIME OF PAYMENT OF
ACCOUNT BALANCE (6.01). The following time of
distribution elections apply to the Plan:

Separation from Service/Vested Account Balance not exceeding $5,000. Subject to
the limitations of Plan Section 6.01(A)(1), the Trustee will distribute in a
lump sum (regardless of the Employer’s election under Section 6.04) a separated
Participant’s Vested Account Balance not exceeding $5,000: (Choose one of (a)
through (d))

	þ	 	(a) Immediate. As soon as administratively practicable following the
Participant’s Separation from Service.
	 
	o	 	(b) Designated Plan Year. As soon as administratively practicable in
the                     Plan Year beginning after the Participant’s Separation from Service.
	 
	o	 	(c) Designated Plan Year quarter. As soon as administratively
practicable in the                     Plan Year quarter beginning after the Participant’s
Separation from Service.
	 
	o	 	(d) Designated distribution. As soon as administratively practicable in
the:                     following the Participant’s Separation from Service. [Note: The
designated distribution time must be the same for all Participants, be
definitely determinable, not discriminate in favor of Highly Compensated
Employees and not violate Code §401(a)(4).]

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Allied Capital 401(k) Plan

Separation from Service/Vested Account Balance exceeding $5,000. A separated
Participant whose Vested Account Balance exceeds $5,000 may elect to commence
distribution of his/her Vested Account Balance no earlier than: (Choose one of
(e) through (i). Choose (j) if applicable)

	þ	 	(e) Immediate. As soon as administratively practicable following the
Participant’s Separation from Service.
	 
	o	 	(f) Designated Plan Year. As soon as administratively practicable in
the                     Plan Year beginning after the Participant’s Separation from Service.
	 
	o	 	(g) Designated Plan Year quarter. As soon as administratively
practicable in the                     Plan Year quarter following the Plan Year quarter in
which the Participant elects to receive a distribution.
	 
	o	 	(h) Normal Retirement Age. As soon as administratively practicable
after the close of the Plan Year in which the
Participant attains Normal Retirement Age and within the time required
under Plan Section 6.01(A)(2).
	 
	o	 	(i) Designated distribution. As soon as administratively practicable in
the:                     following the Participant’s Separation from Service. [Note: The
designated distribution time must be the same for all Participants, be
definitely determinable, not discriminate in favor of Highly Compensated
Employees and not violate Code §401(a)(4).]
	 
	o	 	(j) Limitation on Participant’s right to delay distribution. A
Participant may not elect to delay commencement of distribution of his/her
Vested Account Balance beyond the later of attainment of age 62 or Normal
Retirement Age.

[Note: If the Employer does not elect (j), the Plan permits a Participant
who has Separated from Service to delay distribution until his/her
required beginning date. See Plan Section 6.01(A)(2).]

Participant elections prior to Separation from Service. A Participant, prior to
Separation from Service may elect any of the following distribution options in
accordance with Plan Section 6.01(C). (Choose (k) or choose one or more of (l)
through (o) as applicable). [Note: If the Employer elects any in-service
distributions option, a Participant may elect to receive one in-service
distribution per Plan Year unless the Plan’s in-service distribution form
provides for more frequent in-service distributions.]

	o	 	(k) None. A Participant does not have any distribution option prior to
Separation from Service, except as may be provided under Plan Section
6.01(C).
	 
	þ	 	(l) Deferral contributions. Distribution of all or any portion (as
permitted by the Plan) of a Participant’s Account
Balance attributable to deferral contributions if: (Choose one or more of
(1), (2) or (3) as applicable)

	 	þ	 	(1) Hardship (safe harbor hardship rule). The Participant has incurred a
hardship in accordance with Plan
Sections 6.09 and 14.11(A).
	 
	 	þ	 	(2) Age. The Participant has attained age 59 1/2 (Must be at least age 59 1/2).
	 
	 	o	 	(3) Disability. The Participant has incurred a Disability.

	o	 	(m) Qualified nonelective contributions/qualified matching
contributions/safe harbor contributions. Distribution of all or any
portion of a Participant’s Account Balance attributable to qualified
nonelective contributions, to qualified matching contributions, or to
401(k) safe harbor contributions if: (Choose (1) or (2) or both as
applicable)

	 	o	 	(1) Age. The Participant has attained age                     (Must be at least age 59 1/2).
	 
	 	o	 	(2) Disability. The Participant has incurred a Disability.

	þ	 	(n) Nonelective contributions/regular matching contributions. Distribution
of all or any portion of a Participant’s Vested Account Balance attributable to
nonelective contributions or to regular matching contributions if: (Choose one
or more of (1) through (5) as applicable)

	 	þ	 	(1) Age/Service conditions. (Choose one or more of a. through d. as applicable):

	 	þ	 	a. Age. The Participant has attained age 59 1/2 .
	 
	 	o	 	b. Two-year allocations. The Plan Administrator has
allocated the contributions to be distributed for a period of not
less than                     Plan Years before the distribution date. [Note: The
minimum number of years is 2.]
	 
	 	o	 	c. Five years of participation. The Participant has
participated in the Plan for at least                     Plan Years. [Note: The minimum
number of years is 5.]

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Allied Capital 401(k) Plan

	 	o	 	d. Vested. The Participant is                    % Vested in his/her Account
Balance. See Plan Section 5.03(A). [Note: If an Employer makes more
than one election under Section 6.01(n)(1), a Participant must
satisfy all conditions before the Participant is eligible for the
distribution.]

	 	o	 	(2) Hardship. The Participant has incurred a hardship in
accordance with Plan Section 6.09.
	 
	 	o	 	(3) Hardship (safe harbor hardship rule). The Participant has
incurred a hardship in accordance with Plan
Sections 6.09 and 14.11(A).
	 
	 	o	 	(4) Disability. The Participant has incurred a Disability.
	 
	 	o	 	(5) Designated condition. The Participant has satisfied the following condition(s):                    .

[Note: Any designated condition(s) must be the same for all Participants,
be definitely determinable and not discriminate in favor of Highly Compensated
Employees.]

	þ	 	(o) Participant contributions. Distribution of all or any portion of a
Participant’s Account Balance attributable to the following Participant
contributions described in Plan Section 4.01: (Choose one of (1), (2) or (3))

	 	o	 	(1) All Participant contributions.
	 
	 	o	 	(2) Employee contributions only.
	 
	 	þ	 	(3) Rollover contributions only.

Participant loan default/offset. See Section 6.08 of the Plan.

26. DISTRIBUTION METHOD (6.03). A separated Participant whose Vested Account
Balance exceeds $5,000 may elect distribution under one of the following
method(s) of distribution described in Plan Section 6.03: (Choose one or more
of (a) through (d) as applicable)

	þ	 	(a) Lump sum.
	 
	þ	 	(b) Installments.
	 
	o	 	(c) Installments for required minimum distributions only.
	 
	o	 	(d) Annuity distribution option(s):                    .

[Note: Any optional method of distribution may not be subject to Employer,
Plan Administrator or Trustee discretion.]

27. JOINT AND SURVIVOR
ANNUITY REQUIREMENTS (6.04). The joint and survivor
annuity distribution requirements of Plan Section 6.04: (Choose one of (a) or
(b))

	þ	 	(a) Profit sharing plan exception. Do not apply to a Participant, unless
the Participant is a Participant described in
Section 6.04(H) of the Plan.
	 
	o	 	(b) Applicable. Apply to all Participants.

ARTICLE IX

PLAN ADMINISTRATOR — DUTIES WITH RESPECT TO PARTICIPANTS’ ACCOUNTS

28. ALLOCATION OF NET
INCOME, GAIN OR LOSS (9.08). For each type of
contribution provided under the Plan, the Plan allocates net income, gain or
loss using the following method: (Choose one or more of (a) through (e) as
applicable)

	þ	 	(a) Deferral contributions/Employee contributions. (Choose one or more of
(1) through (5) as applicable)

	 	þ	 	(1) Daily valuation method. Allocate on each business day of the Plan
Year during which Plan assets for which there is an established market are
valued and the Trustee is conducting business.
	 
	 	o	 	(2) Balance forward method. Allocate using the balance forward
method.
	 
	 	o	 	(3) Weighted average method. Allocate using the weighted average
method, based on the following weighting period:                    . See Plan Section
14.12.
	 
	 	o	 	(4) Balance forward method with adjustment. Allocate pursuant to
the balance forward method, except treat as part of the relevant
Account at the beginning of the valuation period                    % of the contributions
made during the following valuation period:                    .

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Allied Capital 401(k) Plan

	 	o	 	(5) Individual account method. Allocate using the individual
account method. See Plan Section 9.08.

	o	 	(b) Matching contributions. (Choose one or more of (1) through (5) as
applicable)

	 	o	 	(1) Daily valuation method. Allocate on each business day of the
Plan Year during which Plan assets for which
there is an established market are valued and the Trustee is conducting
business.
	 
	 	o	 	(2) Balance forward method. Allocate using the balance forward
method.
	 
	 	o	 	(3) Weighted average method. Allocate using the weighted average method, based on the following weighting
period: . See Plan Section 14.12.
	 
	 	o	 	(4) Balance forward method with adjustment. Allocate pursuant to the balance forward method, except treat
as part of the relevant Account at the beginning of the valuation
period      % of the contributions made during
the following valuation period:                    .
	 
	 	o	 	(5) Individual account method. Allocate using the individual
account method. See Plan Section 9.08.

	þ	 	(c) Employer nonelective contributions. (Choose one or more of (1)
through (5) as applicable)

	 	þ	 	(1) Daily valuation method. Allocate on each business day of the
Plan Year during which Plan assets for which
there is an established market are valued and the Trustee is conducting
business.
	 
	 	o	 	(2) Balance forward method. Allocate using the balance forward
method.
	 
	 	o	 	(3) Weighted average method. Allocate using the weighted average method, based on the following weighting
period:                    . See Plan Section 14.12.
	 
	 	o	 	(4) Balance forward method with adjustment. Allocate pursuant to the balance forward method, except treat
as part of the relevant Account at the beginning of the valuation period                    % of the contributions made during
the following valuation period:            .
	 
	 	o	 	(5) Individual account method. Allocate using the individual
account method. See Plan Section 9.08.

	o	 	(d) Specified method. Allocate pursuant to the following method:                    .

[Note: The specified method must be a definite predetermined formula which
is not based on Compensation, which
satisfies the nondiscrimination requirements of Treas. Reg. §1.401(a)(4)
and which is applied uniformly to all
Participants.]

	o	 	(e) Interest rate factor. In accordance with Plan Section 9.08(E), the
Plan includes interest at the following rate on
distributions made more than 90 days after the most recent valuation date:                    .

ARTICLE X

TRUSTEE AND CUSTODIAN, POWERS AND DUTIES

29. INVESTMENT POWERS (10.03). The following additional investment options or
limitations apply under Plan
Section 10.03: NA. [Note: Enter “N/A” if not applicable.]

30. VALUATION OF TRUST (10.15) . In addition to the last day of the Plan Year,
the Trustee must value the Trust Fund
on the following valuation date(s): (Choose one of (a) through (d))

	þ	 	(a) Daily valuation dates. Each business day of the Plan Year on which
Plan assets for which there is an established
market are valued and the Trustee is conducting business.
	 
	o	 	(b) Last day of a specified period. The last day of each                    
of the Plan Year.
	 
	o	 	(c) Specified dates:                    .
	 
	o	 	(d) No additional valuation dates.

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Allied Capital 401(k) Plan

Execution Page

     The Trustee (and Custodian, if applicable), by executing this Adoption
Agreement, accepts its position and agrees to all
of the obligations, responsibilities and duties imposed upon the Trustee (or
Custodian) under the Prototype Plan and Trust. The
Employer hereby agrees to the provisions of this Plan and Trust, and in witness
of its agreement, the Employer by its duly
authorized officers, has executed this Adoption Agreement, and the Trustee (and
Custodian, if applicable) has signified its
acceptance, on:                                                   .

	 	 	 	 	 	 	 
	 	 	Name of Employer:	Allied Capital Corporation
	 	 	 	 	 	
 
	 	 	Employer’s EIN:	 52-1081052
	 	 	 	 	
 
	

	 	Signed:	 	 	 	 
	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	 	 	 	 	[Name/Title]

	 	 	Name(s) of Trustee:
	 
	 	 	 	 	 	 
	 	 	 	 	Wachovia Bank, National Association
	 	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	Trust EIN (Optional):
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	

	 	Signed:	 	 	 	 
	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	 	 	 	 	[Name/Title]

	

	 	Signed:	 	 	 	 
	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	 	 	 	 	[Name/Title]

	

	 	Signed:	 	 	 	 
	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	 	 	 	 	[Name/Title]

	

	 	Signed:	 	 	 	 
	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	 	 	 	 	[Name/Title]

	

	 	Signed:	 	 	 	 
	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	 	 	 	 	[Name/Title]

	

	 	Signed:	 	 	 	 
	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	 	 	 	 	[Name/Title]

	

	 	Signed:	 	 	 	 
	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	 	 	 	 	[Name/Title]

	

	 	Signed:	 	 	 	 
	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	 	 	 	 	[Name/Title]

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16

 

Allied Capital 401(k) Plan

	 	 	 	 	 	 	 
	 	 	Name of Custodian (Optional):
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	

	 	Signed:	 	 	 	 
	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	 	 	
 
	 	 	 	 	[Name/Title]

31. Plan Number. The 3-digit plan number the Employer assigns to this Plan for
ERISA reporting purposes (Form 5500
Series) is: 002.

Use of Adoption Agreement. Failure to complete properly the elections in this
Adoption Agreement may result in
disqualification of the Employer’s Plan. The Employer only may use this
Adoption Agreement in conjunction with the basic plan
document referenced by its document number on Adoption Agreement page one.

Execution for Page Substitution Amendment Only. If this paragraph is completed,
this Execution Page documents an
amendment to Adoption Agreement Section(s)                     effective                    ,
by substitute Adoption Agreement page number(s)                    .

Prototype Plan Sponsor. The Prototype Plan Sponsor identified on the first page
of the basic plan document will notify all
adopting employers of any amendment of this Prototype Plan or of any
abandonment or discontinuance by the Prototype Plan
Sponsor of its maintenance of this Prototype Plan. For inquiries regarding the
adoption of the Prototype Plan, the Prototype Plan
Sponsor’s intended meaning of any Plan provisions or the effect of the opinion
letter issued to the Prototype Plan Sponsor, please
contact the Prototype Plan Sponsor at the following address and telephone
number: 1525 West W.T. Harris Blvd., Charlotte, NC
28288, (800) 669-5812.

Reliance on Sponsor Opinion Letter. The Prototype Plan Sponsor has obtained
from the IRS an opinion letter specifying the
form of this Adoption Agreement and the basic plan document satisfy, as of the
date of the opinion letter, Code §401. An
adopting Employer may rely on the Prototype Sponsor’s IRS opinion letter only
to the extent provided in Announcement
2001-77, 2001-30 I.R.B. The Employer may not rely on the opinion letter in
certain other circumstances or with respect to certain
qualification requirements, which are specified in the opinion letter and in
Announcement 2001-77. In order to have reliance in
such circumstances or with respect to such qualification requirements, the
Employer must apply for a determination letter to
Employee Plans Determinations of the Internal Revenue Service.

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Allied Capital 401(k) Plan

PARTICIPATION AGREEMENT

o Check here if not applicable and do not complete this page.

          The undersigned Employer, by executing this Participation Agreement,
elects to become a Participating Employer in
the Plan identified in Section 1.21 of the accompanying Adoption Agreement, as
if the Participating Employer were a signatory
to that Adoption Agreement. The Participating Employer accepts, and agrees to
be bound by, all of the elections granted under
the provisions of the Prototype Plan as made by the Signatory Employer to the
Execution Page of the Adoption Agreement,
except as otherwise provided in this Participation Agreement.

32. EFFECTIVE DATE (1.10). The Effective Date of the Plan for the
Participating Employer is: May 1, 2001.

33. NEW
PLAN/RESTATEMENT. The Participating Employer’s adoption of this Plan
constitutes: (Choose one of (a) or (b))

	o	 	(a) The adoption of a new plan by the Participating Employer.
	 
	þ	 	(b) The adoption of an amendment and restatement of a plan currently
maintained by the Participating Employer,
identified as: A.C. Corporation, and having an original effective date of: September 1, 1999.

34. PREDECESSOR EMPLOYER
SERVICE (1.30). In addition to the predecessor
service credited by reason of Section 1.30
of the Plan, the Plan credits as Service under this Plan, service with this
Participating Employer. (Choose one or more of (a)
through (d) as applicable): [Note: If the Plan does not credit any additional
predecessor service under Section 1.30 for this
Participating Employer, do not complete this election.]

	þ	 	(a) Eligibility. For eligibility under Article II. See Plan Section 1.30
for time of Plan entry.
	 
	þ	 	(b) Vesting. For vesting under Article V.
	 
	þ	 	(c) Contribution allocation. For contribution allocations under Article III.
	 
	o	 	(d) Exceptions. Except for the following Service:                    .

	 	 	 	 	 	 	 
	Name of Plan:	 	Name of Participating Employer:
	 
	 	 	 	 	 	 
	Allied Capital 401(k) Plan	 	A.C. Corporation
	
 	 	
 
	 
	 	 	 	 	 	 
	

	 	Signed:	 	 	 	 
	 	 	 	
 
	 	 	 	 	[Name/Title]

	 
	 	 	 	 	 	 
	 	 	
 
	 	 	 	 	[Date]

	 	 	Participating Employer’s EIN:	 	52-2316212
	

	 	 	 	 	 	
 

Acceptance by the Signatory Employer to the Execution Page of the Adoption
Agreement and by the Trustee.

	 	 	 	 	 	 	 
	Name of Signatory Employer:	 	Name(s) of Trustee:
	 
	 	 	 	 	 	 
	Allied Capital Corporation	 	Wachovia Bank, National Association
	
 	 	
 
	 
	 	 	 	 	 	 
	
 	 	
 
	[Name/Title]
	 	[Name/Title]

	 
	 	 	 	 	 	 
	Signed:

	 	 	 	Signed:	 	 
	

	
 
	 	 	
 
	 
	 	 	 	 	 	 
	
 	 	
 
	[Date]
	 	[Date]

[Note: Each Participating Employer must execute a separate Participation
Agreement. If the Plan does not have a Participating
Employer, the Signatory Employer may delete this page from the Adoption
Agreement.]

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Allied Capital 401(k) Plan

APPENDIX A

TESTING ELECTIONS/EFFECTIVE DATE ADDENDUM

35. The following testing elections and special effective dates apply: (Choose
one or more of (a) through (n) as applicable)

	o	 	(a) Highly Compensated Employee (1.14). For Plan Years beginning after                    ,
the Employer makes the
following election(s) regarding the definition of Highly Compensated
Employee:

	 	(1)	 	o    Top paid group election.
	 
	 	(2)	 	o    Calendar year data election (fiscal year plan).

	o	 	(b) 401(k) current year testing. The Employer will apply the current
year testing method in applying the ADP and
ACP tests effective for Plan Years beginning after:                    . [ Note:
For Plan Years beginning on or after the
Employer’s execution of its “GUST” restatement, the Employer must use the
same testing method within the same Plan
Year for both the ADP and ACP tests.]
	 
	o	 	(c) Compensation. The Compensation definition under Section 1.07 will apply for Plan Years beginning after:
                   .
	 
	o	 	(d) Election not to participate. The election not to participate under
Section 2.06 is effective:                    .
	 
	þ	 	(e) 401(k) safe harbor. The 401(k) safe harbor provisions under Section
3.01(d) are effective: January 1, 2000.
	 
	o	 	(f) Negative election. The negative election provision under Section
3.02(b) is effective:                    .
	 
	o	 	(g) Contribution/allocation formula. The specified contribution(s) and allocation method(s) under Sections 3.01 and
3.04 are effective:                    .
	 
	þ	 	(h) Allocation conditions. The allocation conditions of Section 3.06 are
effective: January 1, 2001.
	 
	o	 	(i) Benefit payment elections. The distribution elections of
Section(s)                     are effective:                    .
	 
	o	 	(j) Election to continue pre-SBJPA required beginning date. A
Participant may not elect to defer commencement
of the distribution of his/her Vested Account Balance beyond the April 1
following the calendar year in which the
Participant attains age 70 1/2. See Plan Section 6.02(A).
	 
	o	 	(k) Elimination of age 70 1/2 in-service distributions. The Plan
eliminates a Participant’s (other than a more than
5% owner) right to receive in-service distributions on April 1 of the
calendar year following the year in which the
Participant attains age 70 1/2 for Plan Years beginning after:                    .
	 
	o	 	(l) Allocation of earnings. The earnings allocation provisions under
Section 9.08 are effective:                    .
	 
	o	 	(m) Elimination of optional forms of benefit. The Employer elects
prospectively to eliminate the following optional
forms of benefit: (Choose one or more of (1), (2) and (3) as applicable)

	 	o	 	(1) QJSA and QPSA benefits as described in Plan Sections 6.04,
6.05 and 6.06 effective:                    .
	 
	 	o	 	(2) Installment distributions as described in Section 6.03
effective:                    .
	 
	 	o	 	(3) Other optional forms of benefit (Any election to eliminate
must be consistent with Treas. Reg. §1.411(d)-4):                    .

	þ	 	(n) Special effective date(s): Employee Deferral Contributions modified to increase the deferral percentage
(Section 14 (a) (1)) and Employee Classifications modified to include
participation exclusions (Section 3 (f)) effective
July 1, 2002.

     For periods prior to the above-specified special effective date(s), the
Plan terms in effect prior to its restatement under
this Adoption Agreement will control for purposes of the designated provisions.
A special effective date may not result in the
delay of a Plan provision beyond the permissible effective date under any
applicable law.

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Allied Capital 401(k) Plan

APPENDIX B

GUST Remedial Amendment Period Elections

	36.	 	The following GUST restatement elections apply: (Choose one or more of (a)
through (j) as applicable)

	þ	 	(a) Highly Compensated Employee elections. The Employer makes the following remedial amendment period
elections with respect to the Highly Compensated Employee definition:

	 	 	 	 	 	 	 	 	 	 	 
	(1)

	 	1997:
	 	o
	 	Top paid group election.
	 	o
	 	Calendar year election.
	

	 	 	 	o
	 	Calendar year data election.	 	 	 	 
	(2)

	 	1998:
	 	o
	 	Top paid group election.
	 	o
	 	Calendar year data election.
	(3)

	 	1999:
	 	o
	 	Top paid group election.
	 	o
	 	Calendar year data election.
	(4)

	 	2000:
	 	o
	 	Top paid group election.
	 	o
	 	Calendar year data election.
	(5)

	 	2001:
	 	o
	 	Top paid group election.
	 	o
	 	Calendar year data election.
	(6)

	 	2002:
	 	þ
	 	Top paid group election.
	 	o
	 	Calendar year data election.

	þ	 	(b) 401(k) testing methods. The Employer makes the following remedial amendment period elections with respect to
the ADP test and the ACP test: [Note: The Employer may use a different testing method for the ADP and ACP tests
through the end of the Plan Year in which the Employer executes its GUST restated Plan.]

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	ADP test	 	 	 	ACP test
	(1)

	 	1997:
	 	o
	 	prior year
	 	o
	 	current year
	 	1997:
	 	o
	 	prior year
	 	o
	 	current year
	(2)

	 	1998:
	 	o
	 	prior year
	 	o
	 	current year
	 	1998:
	 	o
	 	prior year
	 	o
	 	current year
	(3)

	 	1999:
	 	o
	 	prior year
	 	o
	 	current year
	 	1999:
	 	o
	 	prior year
	 	o
	 	current year
	(4)

	 	2000:
	 	o
	 	prior year
	 	o
	 	current year
	 	2000:
	 	o
	 	prior year
	 	o
	 	current year
	(5)

	 	2001:
	 	o
	 	prior year
	 	o
	 	current year
	 	2001:
	 	o
	 	prior year
	 	o
	 	current year
	(6)

	 	2002:
	 	þ
	 	prior year
	 	o
	 	current year
	 	2002:
	 	þ
	 	prior year
	 	o
	 	current year

	o	 	(c) Delayed application of SBJPA required beginning date. The Employer elects to delay the effective date for the
required beginning date provision of Plan Section 6.02 until
Plan Years beginning after:
                      .
	 
	o	 	(d) Model Amendment for required minimum distributions. The Employer adopts the IRS Model Amendment in
Plan Section 6.02(E) effective                       . [Note: The date must not be earlier than January 1, 2001.]

Defined Benefit Limitation

	o	 	(e) Code §415(e) repeal. The repeal of the Code §415(e) limitation is effective for Limitation Years beginning after                       .
[Note: If the Employer does not make an election under (e), the repeal is effective for Limitation Years
beginning after December 31, 1999.]

Code §415(e) limitation. To the extent necessary to satisfy the limitation
under Plan Section 3.17 for Limitation Years beginning
prior to the repeal of Code §415(e), the Employer will reduce: (Choose one of
(f) or (g))

	o	 	(f) The Participant’s projected annual benefit under the defined benefit plan.
	 
	o	 	(g) The Employer’s contribution or allocation on behalf of the Participant to the defined contribution plan and then, if
necessary, the Participant’s projected annual benefit under the defined benefit plan.

Coordination with top-heavy minimum allocation. The Plan Administrator will
apply the top-heavy minimum allocation
provisions of Article XII with the following modifications: (Choose (h) or
choose (i) or (j) or both as applicable)

	o	 	(h) No modifications.
	 
	o	 	(i) For Non-Key Employees participating only in this Plan, the top-heavy minimum allocation is the minimum allocation
determined by substituting      % (not less than 4%) for “3%,” except: (Choose one of (1) or (2))

	 	o	 	(1) No exceptions.
	 
	 	o	 	(2) Plan Years in which the top-heavy ratio exceeds 90%.

	o	 	(j) For Non-Key Employees also participating in the defined benefit plan, the top-heavy minimum is: (Choose one of (1)
or (2))

	 	o	 	(1) 5% of Compensation irrespective of the contribution rate of any Key Employee: (Choose one of a. or b.)

	 	o	 	a. No exceptions.
	 
	 	o	 	b. Substituting “7 1/2%” for “5%” if the top-heavy ratio does not exceed 90%.

	 	o	 	(2) 0%. [Note: The defined benefit plan must satisfy the top-heavy minimum benefit requirement for these Non-Key
Employees.]

Actuarial assumptions for top-heavy calculation. To determine the top-heavy ratio, the Plan Administrator will use the following
interest rate and mortality assumptions to value accrued benefits under a defined benefit plan:                       .

© Copyright 2001 Wachovia Bank, National Association

20

 

Allied Capital 401(k) Plan

CHECKLIST OF EMPLOYER INFORMATION

AND EMPLOYER ADMINISTRATIVE ELECTIONS

Commencing with the 2002 Plan Year

     The Prototype Plan permits the Employer to make certain administrative
elections not reflected in the Adoption Agreement.
This form lists those administrative elections and provides a means of
recording the Employer’s elections. This checklist is not
part of the Plan document.

	37.	 	Employer Information.

	 	 	 	 	 
	 

	 	Allied Capital Corporation	 	 
	 	 	

	

	 	[Employer Name]	 	 
	 
	 	 	 	 
	

	 	1919 Pennsylvania Ave, NW	 	 
	 	 	

	

	 	[Address]	 	 
	 
	 	 	 	 
	

	 	Washington, District of Columbia 20006-3434
	 	(202) 331-1112
	

	 	

	 	

	

	 	[City, State and Zip Code]
	 	[Telephone Number]

	38.	 	Form of Business.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	(a)
	 	þ
	 	Corporation
	 	(b)
	 	o
	 	S Corporation
	

	 	(c)
	 	o
	 	Limited Liability Company
	 	(d)
	 	o
	 	Sole Proprietorship
	

	 	(e)
	 	o
	 	Partnership
	 	(f)
	 	o
	 	                   

	39.	 	Section 1.07(F) — Nondiscriminatory definition of Compensation. When
testing nondiscrimination under the Plan, the
Plan permits the Employer to make elections regarding the definition of
Compensation. [Note: This election solely is for
purposes of nondiscrimination testing. The election does not affect the
Employer’s elections under Section 1.07 which apply
for purposes of allocating Employer contributions and Participant
forfeitures.]

	 	(a)	 	þ The Plan will “gross up” Compensation for Elective Contributions.
	 
	 	(b)	 	o The Plan will exclude Elective Contributions.

40. Section 4.04 — Rollover contributions.

	 	(a)	 	þ The Plan accepts rollover contributions.
	 
	 	(b)	 	o The Plan does not accept rollover contributions.

	41.	 	Section 8.06 — Participant direction of investment/404(c). The Plan
authorizes Participant direction of investment with
Trustee consent. If the Trustee permits Participant direction of
investment, the Employer and the Trustee should adopt a
policy which establishes the applicable conditions and limitations,
including whether they intend the Plan to comply with
ERISA §404(c).

	 	(a)	 	þ The Plan permits Participant direction of investment and is a 404(c) plan.
	 
	 	(b)	 	o The Plan does not permit Participant direction of investment or is a non-404(c) plan.

	42.	 	Section 9.04[A] — Participant loans. The Plan authorizes the Plan
Administrator to adopt a written loan policy to permit
Participant loans.

	 	(a)	 	þ The Plan permits Participant loans subject to the following conditions:

	 	(1)	 	þ Minimum loan amount: $ 1000.
	 
	 	(2)	 	þ Maximum number of outstanding loans: 2.
	 
	 	(3)	 	þ Reasons for which a Participant may request a loan:

	 	a.	 	þ Any purpose.
	 
	 	b.	 	o Hardship events.
	 
	 	c.	 	o Other: .

	 	(4)	 	þ Suspension of loan repayments:

	 	a.	 	o Not permitted.
	 
	 	b.	 	þ Permitted for non-military leave of absence.
	 
	 	c.	 	þ Permitted for military service leave of absence.

	 	(5)	 	o The Participant must be a party in interest.

	 	(b)	 	o The Plan does not permit Participant loans.

	43.	 	Section 11.01 — Life insurance. The Plan with Employer approval
authorizes the Trustee to acquire life insurance.

	 	(a)	 	o The Plan will invest in life insurance contracts.
	 
	 	(b)	 	þ The Plan will not invest in life insurance contracts.

	44.	 	Surety bond company: Gulf Insurance Group. Surety bond
amount: $ 25,000,000.00

© Copyright 2001 Wachovia Bank, National Association

21

 

EGTRRA

AMENDMENT TO THE

ALLIED CAPITAL 401(k) PLAN

 

 

EGTRRA — Employer

ARTICLE I

PREAMBLE

	1.1	 	Adoption and effective date of amendment. This amendment of the plan is adopted to reflect certain provisions of the
Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”). This amendment is intended as good faith
compliance with the requirements of EGTRRA and is to be construed in accordance with EGTRRA and guidance
issued thereunder. Except as otherwise provided, this amendment shall be effective as of the first day of the first plan
year beginning after December 31, 2001.
	 
	1.2	 	Supersession of inconsistent provisions. This amendment shall supersede the provisions of the plan to the extent those
provisions are inconsistent with the provisions of this amendment.

ARTICLE II

ADOPTION AGREEMENT ELECTIONS

	 	 	The questions in this Article II only need to be completed in order to override the default provisions set forth
below. If all of the default provisions will apply, then these questions should be skipped.
	 
	 	 	Unless the employer elects otherwise in this Article II, the following defaults apply:

	 	1)	 	The vesting schedule for matching contributions will be a 6 year
graded schedule (if the plan currently has a
graded schedule that does not satisfy EGTRRA) or a 3 year cliff schedule
(if the plan currently has a cliff
schedule that does not satisfy EGTRRA), and such schedule will apply to
all matching contributions (even
those made prior to 2002).
	 
	 	2)	 	Rollovers are automatically excluded in determining whether the $5,000
threshold has been exceeded for
automatic cash-outs (if the plan is not subject to the qualified joint and
survivor annuity rules and provides
for automatic cash-outs). This is applied to all participants regardless
of when the distributable event
occurred.
	 
	 	3)	 	The suspension period after a hardship distribution is made will be 6
months and this will only apply to
hardship distributions made after 2001.
	 
	 	4)	 	Catch-up contributions will be allowed.
	 
	 	5)	 	For target benefit plans, the increased compensation limit of $200,000
will be applied retroactively (i.e., to
years prior to 2002).

	2.1	 	Vesting Schedule for Matching Contributions
	 
	 	 	If there are matching contributions subject to a vesting schedule that does not satisfy EGTRRA, then unless otherwise
elected below, for participants who complete an hour of service in a plan year beginning after December 31, 2001, the
following vesting schedule will apply to all matching contributions subject to a vesting schedule:
	 
	 	 	If the plan has a graded vesting schedule (i.e., the vesting schedule includes a vested percentage that is more than 0%
and less than 100%) the following will apply:

	 	 	 
	Years of vesting service
	 	Nonforfeitable percentage

	2
	 	20%
	3
	 	40%
	4
	 	60%
	5
	 	80%
	6
	 	100%

	 	 	If the plan does not have a graded vesting schedule, then matching
contributions will be nonforfeitable upon the
completion of 3 years of vesting service.
	 
	 	 	In lieu of the above vesting schedule, the employer elects the following
schedule:

	 	 	 	 	 	 	 
	 

	 	a.
	 	o
	 	3 year cliff (a participant’s accrued benefit derived from employer matching contributions shall be
nonforfeitable upon the participant’s completion of three years of vesting service).
	 
	 	 	 	 	 	 
	 

	 	b.
	 	o
	 	6 year graded schedule (20% after 2 years of vesting service and an additional 20% for each year
thereafter).
	 
	 	 	 	 	 	 
	 

	 	c.
	 	o
	 	Other (must be at least as liberal as a. or the b. above):

© Copyright 2001 Wachovia Bank, National Association

1

 

EGTRRA — Employer

	 	 	 
	Years of vesting service
	 	Nonforfeitable percentage

	________
	 	—%
	________
	 	—%
	________
	 	—%
	________
	 	—%
	________
	 	—%

	 	 	The vesting schedule set forth herein shall only apply to participants who
complete an hour of service in a plan year
beginning after December 31, 2001, and, unless the option below is
elected, shall apply to all matching contributions
subject to a vesting schedule.

	 	 	 	 	 	 	 
	 

	 	d.
	 	o
	 	The vesting schedule will only apply to matching contributions made in plan years beginning after
December 31, 2001 (the prior schedule will apply to matching contributions made in prior plan years).

	2.2	 	Exclusion of Rollovers in Application of Involuntary Cash-out Provisions (for profit sharing and 401(k) plans
only). If the plan is not subject to the qualified joint and survivor annuity rules and includes involuntary cash-out
provisions, then unless one of the options below is elected, effective for distributions made after December 31, 2001,
rollover contributions will be excluded in determining the value of the participant’s nonforfeitable account balance for
purposes of the plan’s involuntary cash-out rules.

	 	 	 	 	 	 	 
	 

	 	a.
	 	o
	 	Rollover contributions will not be excluded.
	 
	 	 	 	 	 	 
	 

	 	b.
	 	o
	 	Rollover contributions will be
excluded only with respect to distributions made after
                    . (Enter a date
no earlier than December 31, 2001.)
	 
	 	 	 	 	 	 
	 

	 	c.
	 	o
	 	Rollover contributions will only be excluded with respect to participants who separated from service after
                    .
(Enter a date. The date may be earlier than December 31, 2001.)

	2.3	 	Suspension period of hardship distributions. If the plan provides for hardship distributions upon satisfaction of the
safe harbor (deemed) standards as set forth in Treas. Reg. Section 1.401(k)-1(d)(2)(iv), then, unless the option below is
elected, the suspension period following a hardship distribution shall only apply to hardship distributions made after
December 31, 2001.

	 	o	 	With regard to hardship distributions made during 2001, a participant shall be prohibited from making
elective deferrals and employee contributions under this and all other plans until the later of January 1,
2002, or 6 months after receipt of the distribution.

	2.4	 	Catch-up contributions (for 401(k) profit sharing plans only): The plan permits catch-up contributions (Article VI)
unless the option below is elected.

	 	o	 	The plan does not permit catch-up contributions to be made.

	2.5	 	For target benefit plans only: The increased compensation limit ($200,000 limit) shall apply to years prior to 2002
unless the option below is elected.

	 	o	 	The increased compensation limit will not apply to years prior to 2002.

ARTICLE III

VESTING OF MATCHING CONTRIBUTIONS

	3.1	 	Applicability. This Article shall apply to participants who complete an Hour of Service after December 31, 2001, with
respect to accrued benefits derived from employer matching contributions made in plan years beginning after
December 31, 2001. Unless otherwise elected by the employer in Section 2.1 above, this Article shall also apply to all
such participants with respect to accrued benefits derived from employer matching contributions made in plan years
beginning prior to January 1, 2002.
	 
	3.2	 	Vesting schedule. A participant’s accrued benefit derived from employer matching contributions shall vest as provided
in Section 2.1 of this amendment.

ARTICLE IV

INVOLUNTARY CASH-OUTS

	4.1	 	Applicability and effective date. If the plan provides for involuntary cash-outs of amounts less than $5,000, then unless
otherwise elected in Section 2.2 of this amendment, this Article shall apply for distributions made after December 31,
2001, and shall apply to all participants. However, regardless of the preceding, this Article shall not apply if the plan is
subject to the qualified joint and survivor annuity requirements of Sections 401(a)(11) and 417 of the Code.
	 
	4.2	 	Rollovers disregarded in determining value of account balance for involuntary distributions. For purposes of the
Sections of the plan that provide for the involuntary distribution of vested accrued benefits of $5,000 or less, the value
of a participant’s nonforfeitable account balance shall be determined without regard to that portion of the account

© Copyright 2001 Wachovia Bank, National Association

2

 

EGTRRA — Employer

balance that is attributable to rollover contributions (and earnings
allocable thereto) within the meaning of Sections 402(c), 403(a)(4),
403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Code. If the value of
the participant’s nonforfeitable account balance as so determined is
$5,000 or less, then the plan shall immediately distribute the
participant’s entire nonforfeitable account balance.

ARTICLE V

HARDSHIP DISTRIBUTIONS

	 	5.1	 	Applicability and effective date. If the plan provides for hardship
distributions upon satisfaction of the safe harbor (deemed) standards as set
forth in Treas. Reg. Section 1.401(k)-1(d)(2)(iv), then this Article shall
apply for calendar years beginning after 2001.
	 
	 	5.2	 	Suspension period following hardship distribution. A participant who
receives a distribution of elective deferrals after December 31, 2001, on
account of hardship shall be prohibited from making elective deferrals and
employee contributions under this and all other plans of the employer for 6
months after receipt of the distribution. Furthermore, if elected by the
employer in Section 2.3 of this amendment, a participant who receives a
distribution of elective deferrals in calendar year 2001 on account of hardship
shall be prohibited from making elective deferrals and employee contributions
under this and all other plans until the later of January 1, 2002, or 6 months
after receipt of the distribution.

ARTICLE VI

CATCH-UP CONTRIBUTIONS

Catch-up Contributions. Unless otherwise elected in Section 2.4 of this
amendment, all employees who are eligible to make elective deferrals under this
plan and who have attained age 50 before the close of the plan year shall be
eligible to make catch-up contributions in accordance with, and subject to the
limitations of, Section 414(v) of the Code. Such catch-up contributions shall
not be taken into account for purposes of the provisions of the plan
implementing the required limitations of Sections 402(g) and 415 of the Code.
The plan shall not be treated as failing to satisfy the provisions of the plan
implementing the requirements of Section 401(k)(3), 401(k)(11), 401(k)(12),
410(b), or 416 of the Code, as applicable, by reason of the making of such
catch-up contributions.

ARTICLE VII

INCREASE IN COMPENSATION LIMIT

Increase in Compensation Limit. The annual compensation of each participant
taken into account in determining allocations for any plan year beginning after
December 31, 2001, shall not exceed $200,000, as adjusted for cost-of-living
increases in accordance with Section 401(a)(17)(B) of the Code. Annual
compensation means compensation during the plan year or such other consecutive
12-month period over which compensation is otherwise determined under the plan
(the determination period). If this is a target benefit plan, then except as
otherwise elected in Section 2.5 of this amendment, for purposes of determining
benefit accruals in a plan year beginning after December 31, 2001, compensation
for any prior determination period shall be limited to $200,000. The
cost-of-living adjustment in effect for a calendar year applies to annual
compensation for the determination period that begins with or within such
calendar year.

ARTICLE VIII

PLAN LOANS

Plan loans for owner-employees or shareholder-employees. If the plan permits
loans to be made to participants, then effective for plan loans made after
December 31, 2001, plan provisions prohibiting loans to any owner-employee or
shareholder-employee shall cease to apply.

ARTICLE IX

LIMITATIONS ON CONTRIBUTIONS (IRC SECTION 415 LIMITS)

	 	9.1	 	Effective date. This Section shall be effective for limitation years beginning after December 31, 2001.
	 
	 	9.2	 	Maximum annual addition. Except to the extent permitted under Article VI of
this amendment and Section 414(v) of the Code, if applicable, the annual
addition that may be contributed or allocated to a participant’s account under
the plan for any limitation year shall not exceed the lesser of:

	 	a.	 	$40,000, as adjusted for increases in the cost-of-living under Section
415(d) of the Code, or
	 
	 	b.	 	100 percent of the participant’s compensation, within the meaning of
Section 415(c)(3) of the Code, for the limitation year.

© Copyright 2001 Wachovia Bank, National Association

3

 

EGTRRA — Employer

The compensation limit referred to in b. shall not apply to any
contribution for medical benefits after separation from service (within
the meaning of Section 401(h) or Section 419A(f)(2) of the Code) which is
otherwise treated as an annual addition.

ARTICLE X

MODIFICATION OF TOP-HEAVY RULES

	 	10.1	 	Effective date. This Article shall apply for purposes of determining
whether the plan is a top-heavy plan under Section 416(g) of the Code for plan
years beginning after December 31, 2001, and whether the plan satisfies the
minimum benefits requirements of Section 416(c) of the Code for such years.
This Article amends the top-heavy provisions of the plan.
	 
	 	10.2	 	Determination of top-heavy status.
	 
	 	10.2.1	 	Key employee. Key employee means any employee or former employee
(including any deceased employee) who at any time during the plan year that
includes the determination date was an officer of the employer having annual
compensation greater than $130,000 (as adjusted under Section 416(i)(1) of the
Code for plan years beginning after December 31, 2002), a 5-percent owner of
the employer, or a 1-percent owner of the employer having annual compensation
of more than $150,000. For this purpose, annual compensation means compensation
within the meaning of Section 415(c)(3) of the Code. The determination of who
is a key employee will be made in accordance with Section 416(i)(1) of the Code
and the applicable regulations and other guidance of general applicability
issued thereunder.
	 
	 	10.2.2	 	Determination of present values and amounts. This Section 10.2.2 shall
apply for purposes of determining the present values of accrued benefits and
the amounts of account balances of employees as of the determination date.

	 	a.	 	Distributions during year ending on the determination date. The
present values of accrued benefits and the amounts of account balances of
an employee as of the determination date shall be increased by the
distributions made with respect to the employee under the plan and any
plan aggregated with the plan under Section 416(g)(2) of the Code during
the 1-year period ending on the determination date. The preceding
sentence shall also apply to distributions under a terminated plan which,
had it not been terminated, would have been aggregated with the plan
under Section 416(g)(2)(A)(i) of the Code. In the case of a distribution
made for a reason other than separation from service, death, or
disability, this provision shall be applied by substituting “5-year
period” for “1-year period.”
	 
	 	b.	 	Employees not performing services during year ending on the
determination date. The accrued benefits and accounts of any individual
who has not performed services for the employer during the 1-year period
ending on the determination date shall not be taken into account.

	 	10.3	 	Minimum benefits.
	 
	 	10.3.1	 	Matching contributions. Employer matching contributions shall be taken
into account for purposes of satisfying the minimum contribution requirements
of Section 416(c)(2) of the Code and the plan. The preceding sentence shall
apply with respect to matching contributions under the plan or, if the plan
provides that the minimum contribution requirement shall be met in another
plan, such other plan. Employer matching contributions that are used to satisfy
the minimum contribution requirements shall be treated as matching
contributions for purposes of the actual contribution percentage test and other
requirements of Section 401(m) of the Code.
	 
	 	10.3.2	 	Contributions under other plans. The employer may provide, in an
addendum to this amendment, that the minimum benefit requirement shall be met
in another plan (including another plan that consists solely of a cash or
deferred arrangement which meets the requirements of Section 401(k)(12) of the
Code and matching contributions with
respect to which the requirements of Section 401(m)(11) of the Code are met).
The addendum should include the name of the other plan, the minimum benefit
that will be provided under such other plan, and the employees who will receive
the minimum benefit under such other plan.

ARTICLE XI

DIRECT ROLLOVERS

	 	11.1	 	Effective date. This Article shall apply to distributions made after
December 31, 2001.
	 
	 	11.2	 	Modification of definition of eligible retirement plan. For purposes of
the direct rollover provisions of the plan, an eligible retirement plan shall
also mean an annuity contract described in Section 403(b) of the Code and an
eligible plan under Section 457(b) of the Code which is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state
or political subdivision of a state and which agrees to separately account for
amounts transferred into such plan from this plan. The definition of eligible
retirement plan shall also apply in the case of a

© Copyright 2001 Wachovia Bank, National Association

4

 

EGTRRA — Employer

distribution to a surviving spouse, or to a spouse or former spouse who
is the alternate payee under a qualified domestic relation order, as
defined in Section 414(p) of the Code.

	 	11.3	 	Modification of definition of eligible rollover distribution to exclude
hardship distributions. For purposes of the direct rollover provisions of the
plan, any amount that is distributed on account of hardship shall not be an
eligible rollover distribution and the distributee may not elect to have any
portion of such a distribution paid directly to an eligible retirement plan.
	 
	 	11.4	 	Modification of definition of eligible rollover distribution to include
after-tax employee contributions. For purposes of the direct rollover
provisions in the plan, a portion of a distribution shall not fail to be an
eligible rollover distribution merely because the portion consists of after-tax
employee contributions which are not includible in gross income. However, such
portion may be transferred only to an individual retirement account or annuity
described in Section 408(a) or (b) of the Code, or to a qualified defined
contribution plan described in Section 401(a) or 403(a) of the Code that agrees
to separately account for amounts so transferred, including separately
accounting for the portion of such distribution which is includible in gross
income and the portion of such distribution which is not so includible.

ARTICLE XII

ROLLOVERS FROM OTHER PLANS

Rollovers from other plans. The employer, operationally and on a
nondiscriminatory basis, may limit the source of rollover contributions that
may be accepted by this plan.

ARTICLE XIII

REPEAL OF MULTIPLE USE TEST

Repeal of Multiple Use Test. The multiple use test described in Treasury
Regulation Section 1.401(m)-2 and the plan shall not apply for plan years
beginning after December 31, 2001.

ARTICLE XIV

ELECTIVE DEFERRALS

	 	14.1	 	Elective Deferrals — Contribution Limitation. No participant shall be
permitted to have elective deferrals made under this plan, or any other
qualified plan maintained by the employer during any taxable year, in excess of
the dollar limitation contained in Section 402(g) of the Code in effect for
such taxable year, except to the extent permitted under Article VI of this
amendment and Section 414(v) of the Code, if applicable.
	 
	 	14.2	 	Maximum Salary Reduction Contributions for SIMPLE plans. If this is a
SIMPLE 401(k) plan, then except to the extent permitted under Article VI of
this amendment and Section 414(v) of the Code, if applicable, the maximum
salary reduction contribution that can be made to this plan is the amount
determined under Section 408(p)(2)(A)(ii) of the Code for the calendar year.

ARTICLE XV

SAFE HARBOR PLAN PROVISIONS

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

ARTICLE XVI

DISTRIBUTION UPON SEVERANCE OF EMPLOYMENT

	 	16.1	 	Effective date. This Article shall apply for distributions and
transactions made after December 31, 2001, regardless of when the severance of
employment occurred.
	 
	 	16.2	 	New distributable event. A participant’s elective deferrals, qualified
nonelective contributions, qualified matching contributions, and earnings
attributable to these contributions shall be distributed on account of the
participant’s severance from employment. However, such a distribution shall be
subject to the other provisions of the plan regarding distributions, other than
provisions that require a separation from service before such amounts may be
distributed.

© Copyright 2001 Wachovia Bank, National Association

5

 

EGTRRA — Employer

This amendment has been executed this            day of                      ,      .

Name of Employer: Allied Capital Corporation

By:

EMPLOYER

Name of Plan: Allied Capital 401(k) Plan

© Copyright 2001 Wachovia Bank, National Association

6

 

POST-EGTRRA

AMENDMENT TO THE

ALLIED CAPITAL 401(k) PLAN

 

 

POST-EGTRRA — Employer

ARTICLE I

PREAMBLE

	 	1.1	 	Adoption and effective date of amendment. This amendment of the plan is
adopted to reflect certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (“EGTRRA”), the Job Creation and Worker Assistance
Act of 2002, and other IRS guidance. This amendment is intended as good faith
compliance with the requirements of EGTRRA and is to be construed in accordance
with EGTRRA and guidance issued thereunder. Except as otherwise provided, this
amendment shall be effective as of the first day of the first plan year
beginning after December 31, 2001.
	 
	 	1.2	 	Supersession of inconsistent provisions. This amendment shall supersede the
provisions of the plan to the extent those provisions are inconsistent with the
provisions of this amendment.

ARTICLE II

ADOPTION AGREEMENT ELECTIONS

The questions in this Article II only need to be completed in order to
override the default provisions set forth below. If all of the default
provisions will apply, then these questions should be skipped.

Unless the employer elects otherwise in this Article II, the following
defaults apply:

	 	1.	 	If catch-up contributions are permitted, then the catch-up
contributions are treated like any other elective deferrals for
purposes of determining matching contributions under the plan.
	 
	 	2.	 	For plans subject to the qualified joint and survivor annuity
rules, rollovers are automatically excluded in determining whether
the $5,000 threshold has been exceeded for automatic cash-outs (if
the plan provides for automatic cash-outs). This is applied to all
participants regardless of when the distributable event occurred.
	 
	 	3.	 	Amounts that are “deemed 125 compensation” are not included
in the definition of compensation.

	 	2.1	 	Exclusion of Rollovers in Application of Involuntary Cash-out Provisions.
If the plan is subject to the joint and survivor annuity rules and
includes involuntary cash-out provisions, then unless one of the options
below is elected, effective for distributions made after December 31,
2001, rollover contributions will be excluded in determining the value of
a participant’s nonforfeitable account balance for purposes of the plan’s
involuntary cash-out rules.

	 	a.	 	[  ] Rollover contributions will not be excluded.
	 
	 	b.	 	[  ] Rollover contributions will be excluded only with respect to
distributions made after       (Enter a date no earlier than December 31,
2001).
	 
	 	c.	 	[  ] Rollover contributions will only be excluded with respect to
participants who separated from service after       . (Enter a date. The date
may be earlier than December 31, 2001.)

	 	2.2	 	Catch-up contributions (for 401(k) profit sharing plans only): The plan
permits catch-up contributions effective for calendar years beginning
after December 31, 2001, (Article V) unless otherwise elected below.

	 	a.	 	[  ] The plan does not permit catch-up contributions to be made.
	 
	 	b.	 	[  ] Catch-up contributions are permitted effective as of:       (enter a
date no earlier than January 1, 2002).

And, catch-up contributions will be taken into account in applying any
matching contribution under the Plan unless otherwise elected below.

	 	c.	 	[  ] Catch-up contributions will not be taken into account in
applying any matching contribution under the Plan.

	 	2.3	 	Deemed 125 Compensation. Article VI of this amendment shall not apply
unless otherwise elected below.

	 	 	 	[  ] Article VI of this amendment (Deemed 125
Compensation) shall apply effective as of Plan Years and
Limitation Years beginning on or after       (insert the
later of January 1, 1998, or the first day of the first plan
year the Plan used this definition).

ARTICLE III

INVOLUNTARY CASH-OUTS

	 	3.1	 	Applicability and effective date. If the plan is subject to the qualified
joint and survivor annuity rules and provides for involuntary cash-outs of
amounts less than $5,000, then unless otherwise elected in Section 2.1 of this
amendment, this Article shall apply for distributions made after December 31,
2001, and shall apply to all participants.

© Copyright 2003 Wachovia Bank, National Association

1

 

POST-EGTRRA — Employer

	 	3.2	 	Rollovers disregarded in determining value of account balance for
involuntary distributions. For purposes of the Sections of the plan that
provide for the involuntary distribution of vested accrued benefits of $5,000
or less, the value of a participant’s nonforfeitable account balance shall be
determined without regard to that portion of the account balance that is
attributable to rollover contributions (and earnings allocable thereto) within
the meaning of Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and
457(e)(16) of the Code. If the value of the participant’s nonforfeitable
account balance as so determined is $5,000 or less, then the plan shall
immediately distribute the participant’s entire nonforfeitable account balance.

ARTICLE IV

HARDSHIP DISTRIBUTIONS

Reduction of Section
402(g) of the Code following hardship distribution. If the
plan provides for hardship distributions upon satisfaction of the safe harbor
(deemed) standards as set forth in Treas. Reg. Section 1.401(k)-1(d)(2)(iv),
then effective as of the date the elective deferral suspension period is
reduced from 12 months to 6 months pursuant to EGTRRA, there shall be no
reduction in the maximum amount of elective deferrals that a Participant may
make pursuant to Section 402(g) of the Code solely because of a hardship
distribution made by this plan or any other plan of the Employer.

ARTICLE V

CATCH-UP CONTRIBUTIONS

Catch-up Contributions. Unless otherwise elected in Section 2.2 of this
amendment, effective for calendar years beginning after December 31, 2001, all
employees who are eligible to make elective deferrals under this plan and who
have attained age 50 before the close of the calendar year shall be eligible to
make catch-up contributions in accordance with, and subject to the limitations
of, Section 414(v) of the Code. Such catch-up contributions shall not be taken
into account for purposes of the provisions of the plan implementing the
required limitations of Sections 402(g) and 415 of the Code. The plan shall not
be treated as failing to satisfy the provisions of the plan implementing the
requirements of Sections 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of
the Code, as applicable, by reason of the making of such catch-up
contributions.

If elected in Section 2.2, catch-up contributions shall not be treated as
elective deferrals for purposes of applying any Employer matching contributions
under the plan.

ARTICLE VI

DEEMED 125 COMPENSATION

If elected, this Article shall apply as of the effective date specified in
Section 2.3 of this amendment. For purposes of any definition of compensation
under this Plan that includes a reference to amounts under Section 125 of the
Code, amounts under Section 125 of the Code include any amounts not available
to a Participant in cash in lieu of group health coverage because the
Participant is unable to certify that he or she has other health coverage. An
amount will be treated as an amount under Section 125 of the Code only if the
Employer does not request or collect information regarding the Participant’s
other health coverage as part of the enrollment process for the health plan.

This amendment has been executed this           day of                     ,      .

Name of Plan: Allied Capital 401(k) Plan

Name of Employer: Allied Capital Corporation

By:

EMPLOYER

Name of Participating Employer: A.C. Corporation

By:

PARTICIPATING EMPLOYER

© Copyright 2003 Wachovia Bank, National Association

2

 

401(a)(9) MODEL

AMENDMENT TO THE

ALLIED CAPITAL 401(k) PLAN

 

401(a)(9) — Sponsor

MINIMUM DISTRIBUTION REQUIREMENTS AMENDMENT

ARTICLE I

GENERAL RULES

	1.1	 	Effective Date. Unless a later effective date is specified in Section 6.1
of this Amendment, the provisions of this Amendment will apply for purposes of
determining required minimum distributions for calendar years beginning with
the 2002 calendar year.
	 
	1.2	 	Coordination with Minimum Distribution Requirements
Previously in Effect.
If the effective date of this Amendment is earlier than calendar years
beginning with the 2003 calendar year, required minimum distributions for 2002
under this Amendment will be determined as follows. If the total amount of 2002
required minimum distributions under the Plan made to the distributee prior to
the effective date of this Amendment equals or exceeds the required minimum
distributions determined under this Amendment, then no additional distributions
will be required to be made for 2002 on or after such date to the distributee.
If the total amount of 2002 required minimum distributions under the Plan made
to the distributee prior to the effective date of this Amendment is less than
the amount determined under this Amendment, then required minimum distributions
for 2002 on and after such date will be determined so that the total amount of
required minimum distributions for 2002 made to the distributee will be the
amount determined under this Amendment.
	 
	1.3	 	Precedence. The requirements of this Amendment will take precedence over
any inconsistent provisions of the Plan.
	 
	1.4	 	Requirements of Treasury Regulations Incorporated. All distributions
required under this Amendment will be determined and made in accordance with
the Treasury regulations under Section 401(a)(9) of the Internal Revenue Code.
	 
	1.5	 	TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of
this Amendment, distributions may be made under a designation made before
January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and
Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to
Section 242(b)(2) of TEFRA.
	 
	1.6	 	Adoption by prototype sponsor. Except as otherwise provided herein,
pursuant to Section 5.01 of Revenue Procedure 2000-20, the sponsoring
organization hereby adopts this amendment on behalf of all adopting employers.

ARTICLE II

TIME AND MANNER OF DISTRIBUTION

	2.1	 	Required Beginning Date. The Participant’s entire interest will be
distributed, or begin to be distributed, to the Participant no later than the
Participant’s required beginning date.
	 
	2.2	 	Death of Participant Before Distributions Begin. If the Participant dies
before distributions begin, the Participant’s entire interest will be
distributed, or begin to be distributed, no later than as follows:
	 
	 	 	(a) If the Participant’s surviving spouse is the Participant’s sole
designated beneficiary, then, except as provided in Article VI,
distributions to the surviving spouse will begin by December 31 of the
calendar year immediately following the calendar year in which the
Participant died, or by December 31 of the calendar year in which the
Participant would have attained age 70 1/2, if later.
	 
	 	 	(b) If the Participant’s surviving spouse is not the Participant’s sole
designated beneficiary, then, except as provided in Article VI,
distributions to the designated beneficiary will begin by December 31 of
the calendar year immediately following the calendar year in which the
Participant died.
	 
	 	 	(c) If there is no designated beneficiary as of September 30 of the year
following the year of the Participant’s death, the Participant’s entire
interest will be distributed by December 31 of the calendar year
containing the fifth anniversary of the Participant’s death.
	 
	 	 	(d) If the Participant’s surviving spouse is the Participant’s sole
designated beneficiary and the surviving spouse dies after the
Participant but before distributions to the surviving spouse begin, this
Section 2.2, other than Section 2.2(a), will apply as if the surviving
spouse were the Participant.

© Copyright 2003 Wachovia Bank, National Association

1

 

401(a)(9) — Sponsor

	 	 	For purposes of this Section 2.2 and Article IV, unless Section 2.2(d)
applies, distributions are considered to begin on the Participant’s
required beginning date. If Section 2.2(d) applies, distributions are
considered to begin on the date distributions are required to begin to
the surviving spouse under Section 2.2(a). If distributions under an
annuity purchased from an insurance company irrevocably commence to the
Participant before the Participant’s required beginning date (or to the
Participant’s surviving spouse before the date distributions are required
to begin to the surviving spouse under Section 2.2(a)), the date
distributions are considered to begin is the date distributions actually
commence.
	 
	2.3	 	Forms of Distribution. Unless the Participant’s interest is distributed in
the form of an annuity purchased from an insurance company or in a single sum
on or before the required beginning date, as of the first distribution calendar
year distributions will be made in accordance with Articles III and IV of this
Amendment. If the Participant’s interest is distributed in the form of an
annuity purchased from an insurance company, distributions thereunder will be
made in accordance with the requirements of Section 401(a)(9) of the Code and
the Treasury regulations.

ARTICLE III

REQUIRED MINIMUM DISTRIBUTIONS DURING PARTICIPANT’S LIFETIME

	3.1	 	Amount of Required Minimum Distribution For Each Distribution Calendar
Year. During the Participant’s lifetime, the minimum amount that will be
distributed for each distribution calendar year is the lesser of:
	 
	 	 	(a) the quotient obtained by dividing the Participant’s account balance
by the distribution period in the Uniform Lifetime Table set forth in
Section 1.401(a)(9)-9 of the Treasury regulations, using the
Participant’s age as of the Participant’s birthday in the distribution
calendar year; or
	 
	 	 	(b) if the Participant’s sole designated beneficiary for the distribution
calendar year is the Participant’s spouse, the quotient obtained by
dividing the Participant’s account balance by the number in the Joint and
Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury
regulations, using the Participant’s and spouse’s attained ages as of the
Participant’s and spouse’s birthdays in the distribution calendar year.
	 
	3.2	 	Lifetime Required Minimum Distributions Continue Through Year of
Participant’s Death. Required minimum distributions will be determined under
this Article 3 beginning with the first distribution calendar year and up to
and including the distribution calendar year that includes the Participant’s
date of death.

ARTICLE IV

REQUIRED MINIMUM DISTRIBUTIONS AFTER PARTICIPANT’S DEATH

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

	 	 	 	(1)  The Participant’s remaining life expectancy is calculated using
the age of the Participant in the year of death, reduced by one for
each subsequent year.
	 
	 	 	 	(2)  If the Participant’s surviving spouse is the Participant’s sole
designated beneficiary, the remaining life expectancy of the
surviving spouse is calculated for each distribution calendar year
after the year of the Participant’s death using the surviving
spouse’s age as of the spouse’s birthday in that year. For
distribution calendar years after the year of the surviving spouse’s
death, the remaining life expectancy of the surviving spouse is
calculated using the age of the surviving spouse as of the spouse’s
birthday in the calendar year of the spouse’s death, reduced by one
for each subsequent calendar year.
	 
	 	 	 	(3)  If the Participant’s surviving spouse is not the Participant’s
sole designated beneficiary, the designated beneficiary’s remaining
life expectancy is calculated using the age of the beneficiary in the
year following the year of the Participant’s death, reduced by one
for each subsequent year.

© Copyright 2003 Wachovia Bank, National Association

2

 

401(a)(9) — Sponsor

	 	 	(b) No Designated Beneficiary. If the Participant dies on or after the
date distributions begin and there is no designated beneficiary as of
September 30 of the year after the year of the Participant’s death, the
minimum amount that will be distributed for each distribution calendar
year after the year of the Participant’s death is the quotient obtained
by dividing the Participant’s account balance by the Participant’s
remaining life expectancy calculated using the age of the Participant in
the year of death, reduced by one for each subsequent year.
	 
	4.2	 	Death Before Date Distributions Begin.
	 
	 	 	(a) Participant Survived by Designated Beneficiary. Except as provided in
Article VI, if the Participant dies before the date distributions begin
and there is a designated beneficiary, the minimum amount that will be
distributed for each distribution calendar year after the year of the
Participant’s death is the quotient obtained by dividing the
Participant’s account balance by the remaining life expectancy of the
Participant’s designated beneficiary, determined as provided in Section
4.1.
	 
	 	 	(b) No Designated Beneficiary. If the Participant dies before the date
distributions begin and there is no designated beneficiary as of
September 30 of the year following the year of the Participant’s death,
distribution of the Participant’s entire interest will be completed by
December 31 of the calendar year containing the fifth anniversary of the
Participant’s death.
	 
	 	 	(c) Death of Surviving Spouse Before Distributions to Surviving Spouse
Are Required to Begin. If the Participant dies before the date
distributions begin, the Participant’s surviving spouse is the
Participant’s sole designated beneficiary, and if the surviving spouse
dies before distributions are required to begin to the surviving spouse
under Section 2.2(a), this Section 4.2 will apply as if the surviving
spouse were the Participant.

ARTICLE V

DEFINITIONS

	5.1	 	Designated beneficiary. The individual who is designated as the Beneficiary
under the Plan and is the designated beneficiary under Section 401(a)(9) of the
Internal Revenue Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury
regulations.
	 
	5.2	 	Distribution calendar year. A calendar year for which a minimum
distribution is required. For distributions beginning before the Participant’s
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the Participant’s required beginning
date. For distributions beginning after the Participant’s death, the first
distribution calendar year is the calendar year in which distributions are
required to begin under Section 2.2. The required minimum distribution for the
Participant’s first distribution calendar year will be made on or before the
Participant’s required beginning date. The required minimum distribution for
other distribution calendar years, including the required minimum distribution
for the distribution calendar year in which the Participant’s required
beginning date occurs, will be made on or before December 31 of that
distribution calendar year.
	 
	5.3	 	Life expectancy. Life expectancy as computed by use of the Single Life
Table in Section 1.401(a)(9)-9 of the Treasury regulations.
	 
	5.4	 	Participant’s account balance. The account balance as of the last valuation
date in the calendar year immediately preceding the distribution calendar year
(valuation calendar year) increased by the amount of any contributions made and
allocated or forfeitures allocated to the account balance as of the dates in
the valuation calendar year after the valuation date and decreased by
distributions made in the valuation calendar year after the valuation date. The
account balance for the valuation calendar year includes any amounts rolled
over or transferred to the Plan either in the valuation calendar year or in the
distribution calendar year if distributed or transferred in the valuation
calendar year.
	 
	5.5	 	Required beginning date. The date specified in the Plan when distributions
under Section 401(a)(9) of the Internal Revenue Code are required to begin.

ARTICLE VI

ADOPTION AGREEMENT ELECTIONS

The questions in this Article VI only need to be completed in order to override
the default provisions set forth
below. If all of the default provisions will apply, then these questions should
be skipped.

Unless the employer elects otherwise in this Article VI, the following defaults
apply:

	1)	 	The minimum distribution requirements are effective for distribution
calendar years beginning with the 2002 calendar year unless a later date
is specified in Section 6.1 of this Amendment.

© Copyright 2003 Wachovia Bank, National Association

3

 

401(a)(9) — Sponsor

	2)	 	Participants or beneficiaries may elect on an individual basis whether
the 5-year rule or the life expectancy rule in the Plan applies to
distributions after the death of a Participant who has a designated
beneficiary.
	 
	6.1	 	Effective Date of Plan Amendment for Section 401(a)(9) Final and Temporary
Treasury Regulations.

	 	þ	 	This Amendment applies for purposes of determining required minimum
distributions for distribution calendar years beginning with the 2003
calendar year, as well as required minimum distributions for the 2002
distribution calendar year that are made on or after
         (leave
blank if this Amendment does not apply to any minimum distributions for
the 2002 distribution calendar year).

	6.2	 	Election to not permit Participants or Beneficiaries to Elect 5-Year Rule.
	 
	 	 	Unless elected below, Participants or beneficiaries may elect on an
individual basis whether the 5-year rule or the life expectancy rule in
Sections 2.2 and 4.2 of this Amendment applies to distributions after the
death of a Participant who has a designated beneficiary. The election
must be made no later than the earlier of September 30 of the calendar
year in which distribution would be required to begin under Section 2.2
of this Amendment, or by September 30 of the calendar year which contains
the fifth anniversary of the Participant’s (or, if applicable, surviving
spouse’s) death. If neither the Participant nor beneficiary makes an
election under this paragraph, distributions will be made in accordance
with Sections 2.2 and 4.2 of this Amendment and, if applicable, the
elections in Section 6.3 of this Amendment below.

	 	o	 	The provision set forth above in this Section 6.2 shall not
apply. Rather, Sections 2.2 and 4.2 of this Amendment shall apply
except as elected in Section 6.3 of this Amendment below.

	6.3	 	Election to Apply 5-Year Rule to Distributions to Designated Beneficiaries.

	 	o	 	If the Participant dies before distributions begin and
there is a designated beneficiary, distribution to the designated
beneficiary is not required to begin by the date specified in the
Plan, but the Participant’s entire interest will be distributed to
the designated beneficiary by December 31 of the calendar year
containing the fifth anniversary of the Participant’s death. If the
Participant’s surviving spouse is the Participant’s sole designated
beneficiary and the surviving spouse dies after the Participant but
before distributions to either the Participant or the surviving
spouse begin, this election will apply as if the surviving spouse
were the Participant.
	 
	 	 	 	If the above is elected, then this election will apply to:

	 	o	 	All distributions.
	 
	 	o	 	The following distributions:                     .

	6.4	 	Election to Allow Designated Beneficiary Receiving Distributions Under
5-Year Rule to Elect Life Expectancy Distributions.

	 	o	 	A designated beneficiary who is receiving payments under
the 5-year rule may make a new election to receive payments under
the life expectancy rule until December 31, 2003, provided that all
amounts that would have been required to be distributed under the
life expectancy rule for all distribution calendar years before 2004
are distributed by the earlier of December 31, 2003 or the end of
the 5-year period.

© Copyright 2003 Wachovia Bank, National Association

4

 

401(a)(9) — Sponsor

Except with respect to any election made by the employer in Article VI, this
amendment is hereby adopted by the prototype
sponsoring organization on behalf of all adopting employers on:

[Sponsor’s signature and Adoption Date are on file with Sponsor]

NOTE: The employer only needs to execute this amendment if an election has been
made in Article VI of this amendment.

This amendment has been executed this                                                           day of
                                                         ,                    .

	 	 	 	 	 
	Name of Plan: Allied Capital 401(k) Plan	 	 
	 
	 	 	 	 
	Name of Employer: Allied Capital Corporation	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	

	 	
 	 	 
	

	 	EMPLOYER	 	 
	 
	 	 	 	 
	Name of Participating Employer: A.C. Corporation	 	 
	

	 	 	 	 
	By:
	 	 	 	 
	

	 	
 	 	 
	

	 	PARTICIPATING EMPLOYER	 	 

© Copyright 2003 Wachovia Bank, National Association

5

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