Document:

SERP Report 2019 10-B

		
			WEIS MARKETS, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
		

		
			As Amended and Restated Effective December 9, 2019
		

		
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		Table of Contents
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						ARTICLE 1.

					
					
						PURPOSES

					1 
				
	
					
						1.01

					
					
						PURPOSES

					1 
				
	
					
						1.02

					
					
						ESTABLISHMENT OF PLAN

					1 
				
	
					
						1.03

					
					
						WEIS MARKETS, INC. DEFERRED COMPENSATION PLAN FOR PHARMACISTS

					1 
				
	
					
						1.04

					
					
						APPLICABILITY

					
					
						 

				
	
					
						ARTICLE 2.

					
					
						DEFINITIONS AND CONSTRUCTION OF THE PLAN DOCUMENT

					2 
				
	
					
						2.01

					
					
						DEFINITIONS

					2 
				
	
					
						2.02

					
					
						GENDER AND NUMBER

					4 
				
	
					
						ARTICLE 3.

					
					
						ELIGIBILITY AND PARTICIPATION

					5 
				
	
					
						3.01

					
					
						ELIGIBILITY

					5 
				
	
					
						3.02

					
					
						PROCEDURES FOR PARTICIPATION

					5 
				
	
					
						3.03

					
					
						CESSATION OF ELIGIBILITY

					5 
				
	
					
						ARTICLE 4.

					
					
						DEFERRAL OF COMPENSATION

					
					
						 

				
	
					
						4.01

					
					
						ELECTION TO DEFER COMPENSATION

					6 
				
	
					
						4.02

					
					
						AMOUNT OF COMPENSATION DEFERRAL

					6 
				
	
					
						4.03

					
					
						ELECTION OF FORM OF PAYMENT OF RETIREMENT DISTRIBUTION

					6 
				
	
					
						4.04

					
					
						CANCELLATION OF DEFERRAL ELECTION

					6 
				
	
					
						4.05

					
					
						GENERAL RULES APPLICABLE TO ELECTIONS

					7 
				
	
					
						4.06

					
					
						COMPENSATION DEFERRAL ACCOUNT

					7 
				
	
					
						ARTICLE 5.

					
					
						EMPLOYER CREDITS

					8 
				
	
					
						5.01

					
					
						PROFIT-SHARING CREDITS

					8 
				
	
					
						5.02

					
					
						EMPLOYER MATCHING CREDITS

					8 
				

		 

		

			

		

		

			1

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

			
					
						5.03

					
					
						EMPLOYER DISCRETIONARY CREDITS

					9 
				
	
					
						5.04

					
					
						VESTING OF EMPLOYER CREDITS

					9 
				
	
					
						ARTICLE 6.

					
					
						PARTICIPANT ACCOUNTS

					10 
				
	
					
						6.01

					
					
						PARTICIPANTS’ ACCOUNTS

					10 
				
	
					
						6.02

					
					
						INVESTMENT OF ACCOUNTS

					10 
				
	
					
						ARTICLE 7.

					
					
						DISTRIBUTION

					11 
				
	
					
						7.01

					
					
						DISTRIBUTION FROM COMPENSATION DEFERRAL ACCOUNT IN EVENT OF UNFORSEEABLE EMERGENCY

					11 
				
	
					
						7.02

					
					
						DISTRIBUTION FOLLOWING TERMINATION OF SERVICE

					11 
				
	
					
						7.03

					
					
						TOTAL DISABILITY OR DEATH

					12 
				
	
					
						ARTICLE 8.

					
					
						BENEFICIARY

					13 
				
	
					
						8.01

					
					
						BENEFICIARY DESIGNATION

					13 
				
	
					
						8.02

					
					
						PROPER BENEFICIARY

					13 
				
	
					
						8.03

					
					
						MINOR OR INCOMPETENT BENEFICIARY

					13 
				
	
					
						ARTICLE 9.

					
					
						FORFEITURE OF BENEFITS

					14 
				
	
					
						9.01

					
					
						TERMINATION FOR CAUSE – FORFEITURE OR DISCONTINUATION OF BENEFITS

					14 
				
	
					
						9.02

					
					
						DEFINITION OF CAUSE

					14 
				
	
					
						9.03

					
					
						DETERMINATION BY COMMITTEE

					14 
				
	
					
						ARTICLE 10.

					
					
						ADMINISTRATION OF THE PLAN 10.01 COMMITTEE

					15 
				
	
					
						10.02

					
					
						DELEGATION OF DUTIES

					15 
				
	
					
						10.03

					
					
						EXPENSES

					15 
				
	
					
						10.04

					
					
						INDEMNIFICATION OF COMMITTEE MEMBERS

					15 
				
	
					
						10.05

					
					
						LIABILITY

					16 
				
	
					
						ARTICLE 11.

					
					
						CLAIMS PROCEDURE

					17 
				

		 

		

			 

		

		

			2

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

			
					
						11.01

					
					
						WRITTEN CLAIM

					17 
				
	
					
						11.02

					
					
						DENIED CLAIM

					17 
				
	
					
						11.03

					
					
						REVIEW PROCEDURE

					17 
				
	
					
						11.04

					
					
						COMMITTEE REVIEW

					17 
				
	
					
						﻿

					
					
						 

					
					
						 

				
	
					
						ARTICLE 12.

					
					
						NATURE OF COMPANY’S OBLIGATION

					18 
				
	
					
						12.01

					
					
						UNFUNDED PLAN

					18 
				
	
					
						12.02

					
					
						RABBI TRUST

					18 
				
	
					
						ARTICLE 13.

					
					
						MISCELLANEOUS

					19 
				
	
					
						13.01

					
					
						ACCELERATION OR DELAY OF PAYMENTS PERMITTED UNDER CODE SECTION 409A

					19 
				
	
					
						13.02

					
					
						RIGHT TO WITHHOLD TAXES

					19 
				
	
					
						13.03

					
					
						NO GUARENTEE OF EMPLOYMENT

					19 
				
	
					
						13.04

					
					
						UNCLAIMED BENEFIT

					19 
				
	
					
						13.05

					
					
						SUSPENSION OF PAYMENTS

					19 
				
	
					
						13.06

					
					
						SEVERABILITY

					20 
				
	
					
						13.07

					
					
						NO OTHER AGREEMENTS OR UNDERSTANDINGS

					20 
				
	
					
						13.08

					
					
						WRITTEN NOTICE

					20 
				
	
					
						13.09

					
					
						CHANGE OF ADDRESS

					20 
				
	
					
						13.10

					
					
						AMENDMENT AND TERMINATION

					20 
				
	
					
						13.11

					
					
						NONTRANSFERABILITY

					20 
				
	
					
						13.12

					
					
						APPLICABLE LAW

					21 
				
	
					
						13.13

					
					
						TITLES

					21 
				
	
					
						13.14

					
					
						CODE SECTION 409A TRANSITION RULES

					21 
				

		
			 
		

		 

		

			 

		

		

			3

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

			
	
			
				Article 1.  
			PURPOSES

			
	
			
				 1.01
			

			
	
			
			PURPOSES.

		
			The purposes of the Weis Markets, Inc. Supplemental Executive Retirement Plan (“Plan”) are to provide select members of management and highly compensated employees with the opportunity to save for retirement on a tax-deferred basis and to provide additional retirement benefits because of the limitations imposed by the Internal Revenue Code on contributions to the Weis Markets, Inc. Retirement Savings Plan (the “401(k) Plan”).
		

		
			The Plan is intended to be an unfunded deferred compensation arrangement for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act and is intended to comply with Section 409A of the Internal Revenue Code (“Code Section 409A”).
		

			
	
			
				 1.02
			

			
	
			
			ESTABLISHMENT OF PLAN.

		
			The Plan originally was established effective January 1, 1994. The Plan was amended and restated effective as of January 1, 2005 to comply with the requirements of Code Section 409A.
		

			
	
			
				 1.03
			

			
	
			
			WEIS MARKETS, INC. DEFERRED COMPENSATION PLAN FOR PHARMACISTS.

		
			The Weis Markets, Inc. Deferred Compensation Plan for Pharmacists (“Pharmacists’ Plan”) originally was established effective January 1, 2003. The Pharmacists’ Plan was amended and restated effective as of January 1, 2005 to comply with the requirements of Code Section 409A.
		

		
			Effective as of November 30, 2018, the Pharmacists’ Plan was merged into this Plan
		

			
	
			
				 1.04
			

			
	
			
			APPLICABILITY

		
			This plan document sets forth the provisions of the Plan as amended and restated effective November 30, 2018 to include the merged Pharmacists’ Plan and as amended and restated December 9, 2019.
		

		
			All issues arising with respect to participation and rights and benefits under the Plan or the Pharmacists’ Plan for any period prior to November 30, 2018 shall be determined by the terms and provisions of the Plan or the Pharmacists’ Plan as in effect prior to November 30, 2018, except as otherwise specifically provided in the Plan.
		

		

		

		 

		

			 

		

		

			1

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

		
		

			
	
			
				Article 2.  
			DEFINITIONS AND CONSTRUCTION OF THE PLAN DOCUMENT

			
	
			
				 2.01
			

			
	
			
			DEFINITIONS.

		
			As used herein, the following words and phrases shall have the meanings specified below unless a different meaning is clearly required by the context:
		

		
			Account means the deferred compensation account maintained for each Participant in accordance with Article 6 and which includes the following subaccounts:
		

			
	
			
				 (a)
			

			
	
			
			Compensation Deferral Account means the portion of a Participant’s Account attributable to Compensation Deferrals, and the earnings thereon.

			
	
			
				 (b)
			

			
	
			
			Employer Discretionary Account means the portion of a Participant’s Account attributable to Employer Discretionary Credits, and the earnings thereon.

			
	
			
				 (c)
			

			
	
			
			Employer Matching Account means the portion of a Participant’s Account attributable to Employer Matching Credits, and the earnings thereon.

			
	
			
				 (d)
			

			
	
			
			Employer Profit-Sharing Account means the portion of a Participant’s Account attributable to Employer Profit-Sharing Credits, and the earnings thereon.

			
	
			
				 (e)
			

			
	
			
			ESOP Account means the portion of a Participant’s Account attributable to ESOP Credits, if any, for Plan Years ending on or before December 31, 2006, and the earnings thereon.

		
			Beneficiary means the person or persons or the estate of a Participant entitled to receive benefits under this Plan in the event of the Participant’s death as determined in accordance with Article 8 below.
		

		
			Board of Directors means the Weis Markets, Inc. Board of Directors.
		

		
			Code means the Internal Revenue Code, as amended from time to time.
		

		
			Code Section 409A means Section 409A of the Code and the regulations thereunder.
		

		
			Committee means the Weis Markets, Inc. Retirement Committee.
		

		
			Company means Weis Markets, Inc. its successors, and any organization into which or with which the Company may merge or consolidate or to which all or substantially all of its assets may be transferred.
		

		
			Compensation means “compensation” as defined in the 401(k) Plan for purposes of contributions and allocations under that plan but without regard to the statutory annual limitation on compensation imposed by Code Section 401(a)(17).
		

		
			Compensation Deferrals means the portion of a Participant’s Compensation that has been deferred pursuant to the Plan.
		

		

		

		 

		

			 

		

		

			2

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

		Eligible Employee means any employee who is actively employed by a Participating Employer and who is determined by the Committee to be a member of a select group of management of the Company or a highly compensated employee (within the meaning of Code Section 414(q)).
		

		
			401(k) Plan means the Weis Markets, Inc. Retirement Savings Plan, as it may be amended from time to time, and any successor plan.
		

		
			Participant means an Eligible Employee who is participating in the Plan.
		

		
			Participating Employer means Weis Markets, Inc., and any of its participating subsidiaries or affiliated companies authorized by the Board of Directors or the Committee to participate in this Plan.
		

		
			Pharmacists’ Plan means Weis Markets, Inc. Deferred Compensation Plan for Pharmacists as in effect prior to November 30, 2018.
		

		
			Plan means the Weis Markets, Inc. Supplemental Executive Retirement Plan described in this instrument, as it may be amended from time to time.
		

		
			Retirement Age means the earlier of either
		

			
	
			
				 (a)
			

			
	
			
			“Normal Retirement Age” - age 65; or

			
	
			
				 (f)
			

			
	
			
			Effective on or after January 1, 2008, “Early Retirement Age” - age 60 and completion of at least 5 years of service.

		
			Termination of Service or similar expression means the termination of the Participant’s employment from the Weis Markets Controlled Group within the meaning of Code Section 409A and the regulations thereunder.
		

		
			Total Disability or Totally Disabled.  A Participant will be considered to be Total Disabled if he or she meets one of the following requirements:
		

			
	
			
				 (a)
			

			
	
			
			The Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.

			
	
			
				 (g)
			

			
	
			
			The Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of a Participating Employer.

			
	
			
				 (h)
			

			
	
			
			The Participant is determined to be totally disabled by the Social Security Administration.

		
			Weis Markets Controlled Group means the Participating Employers and any corporation which is a member of a controlled group of corporations (as defined in Section 414(b) of the Code) which 
		

		 

		

			 

		

		

			3

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

		includes a Participating Employer and any trade or business (whether or not incorporated) which is under common control (as defined in Section 414(c) of the Code) with a Participating Employer.
		

			
	
			
				 2.02
			

			
	
			
			GENDER AND NUMBER.

		
			Wherever the context so requires, masculine pronouns include the feminine, and vice versa, and singular words shall be construed as though they were also used in the plural.
		

		

		

		 

		

			 

		

		

			4

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

		
		

			
	
			
				Article 3.  
			ELIGIBILITY AND PARTICIPATION

			
	
			
				 3.01
			

			
	
			
			ELIGIBILITY.

		
			Any employee who is an Eligible Employee shall be eligible to participate in the Plan commencing as of the calendar year immediately following the year in which he or she is first determined to be an Eligible Employee, provided that the Committee may, in its sole discretion, provide for an earlier participation commencement date consistent with the requirements of Code Section 409A and as expressed in this document as amended and restated effective December 9, 2019.
		

			
	
			
				 3.02
			

			
	
			
			PROCEDURES FOR PARTICIPATION.

		
			An Eligible Employee shall become a Participant in the Plan by complying with such terms and conditions as the Board of Directors and/or the Committee may establish from time to time for participation in the Plan. The terms and conditions for participation in the Plan may include, but not limited to, such non-competition or other restrictive covenant provisions or agreements as Board of Directors and/or the Committee may deem necessary or appropriate. The terms and conditions for participation applicable to a particular Eligible Employee are not required to be applicable on a uniform basis to other Eligible Employees.
		

			
	
			
				 3.03
			

			
	
			
			CESSATION OF ELIGIBILITY.

		
			An employee shall be a Participant eligible to have compensation deferred under this Plan only while (a) he or she is actively employed by a Participating Employer and (b) is an Eligible Employee.
		

		
			If an employee subsequently ceases to be an Eligible Employee after becoming a Participant, he or she shall cease active participation in the Plan on the last day of the Plan Year and the terms of this Plan shall continue to govern the Participant’s Account until the Account balance is paid in full.
		

		

		

		 

		

			 

		

		

			5

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

		
		

			
	
			
				Article 4.  
			DEFERRAL OF COMPENSATION

			
	
			
				 4.01
			

			
	
			
			ELECTION TO DEFER COMPENSATION.

		
			A Participant may elect to defer receipt of Compensation as follows:
		

			
	
			
				 (a)
			

			
	
			
			General Rule. Except as otherwise provided in this Section, an election to defer receipt of Compensation for services to be performed during a calendar year must be made no later than the December 31 preceding the calendar year during which the Participant will perform services.

			
	
			
				 (b)
			

			
	
			
			First Year of Eligibility. In the case of the first year in which an Eligible Employee becomes eligible to participate in the Plan, an initial deferral election must be made not later than thirty (30) days after the date the employee becomes eligible to participate in the Plan. Such election shall apply only with respect to compensation paid for services to be performed subsequent to the election.  Further, this provision will only be applicable in the event that the Committee has allowed the early participation of such Eligible Employee, consistent with Section 3.01 as amended effective December 9, 2019.

		
			This paragraph will not apply to an Eligible Employee who is a participant in any other account balance deferred compensation plans maintained by any member of the Weis Markets Controlled Group which is required to be aggregated with this Plan under Code Section 409A.
		

			
	
			
				 4.02
			

			
	
			
			AMOUNT OF COMPENSATION DEFERRAL.

		
			A Participant may elect to defer receipt of up to 50% of his or her Compensation for a calendar year.
		

			
	
			
				 4.03
			

			
	
			
			ELECTION OF FORM OF PAYMENT OF RETIREMENT DISTRIBUTION.

			
	
			
				 (a)
			

			
	
			
			A Participant may elect to have the amounts credited to his or her Account for a particular Plan Year, and any earnings thereon, distributed following his or her Termination of Service at or after Retirement Age in one of the following methods: a lump sum, installments over a period of five (5) years, or installments over a period of ten (10) years. Notwithstanding the foregoing, such election shall be subject to the special Code Section 409A transition rules set forth in Section 13.14 below.

			
	
			
				 (b)
			

			
	
			
			Such election shall be made each year at the same time the Participant makes the deferral election in accordance with Section 4.01 for that Plan Year.

			
	
			
				 (c)
			

			
	
			
			If the Participant does not make a distribution election with respect to a particular Plan Year, then he or she will be deemed to have elected to receive amounts credited to his or her Account for that year in a single lump sum payment.

			
	
			
				 4.04
			

			
	
			
			CANCELLATION OF DEFERRAL ELECTION.

		 

		

			 

		

		

			6

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

			
	
			
				 (a)
			

			
	
			
			The Committee may permit a Participant to cancel a deferral election during a calendar year if it determines either of the following circumstances has occurred:

			
	
			
				 (i)
			

			
	
			
			The Participant has an “unforeseeable emergency” as defined in Section 7.01 below or a hardship distribution (pursuant to Treasury Regulation §1.401(k)-1(d)(3)) from a 401(k) plan sponsored by a Participating Employer. If approved by the Committee, such cancellation shall take effect as of the first payroll period next following approval by the Committee.

			
	
			
				 (ii)
			

			
	
			
			The Participant incurs a disability. If approved by the Committee, such cancellation shall take effect no later than the end of the calendar year or the 15th day of the third month following the date Participant incurs a disability. Solely for purposes of this clause (ii), a disability refers to any medically determinable physical or mental impairment resulting in the Participant’s inability to perform the duties of his or her position or any substantially similar position, where such impairment can be expected to result in death or can be expected to last for a continuous period of not less than six months.

			
	
			
				 (b)
			

			
	
			
			If a Participant cancels a deferral election during a calendar year, he or she will not be permitted to make a new deferral election with respect to Compensation relating to services performed during the same calendar year.

			
	
			
				 4.05
			

			
	
			
			GENERAL RULES APPLICABLE TO ELECTIONS.

		
			Elections under this Article 4 shall be made in the form, manner, and in accordance with the notice requirements, prescribed by the Committee. Except as otherwise provided in this Plan, the elections made by a Participant with respect to Compensation Deferrals for a calendar year shall become irrevocable as of the last date on which such election can be made for the calendar year pursuant to this Article 4.
		

			
	
			
				 4.06
			

			
	
			
			COMPENSATION DEFERRAL ACCOUNT.

			
	
			
				 (a)
			

			
	
			
			The amount of Compensation deferred by a Participant shall be credited to the Participant’s Compensation Deferral Account as soon as possible following the date such Compensation would, but for the Participant’s deferral election, be payable to the Participant.

			
	
			
				 (b)
			

			
	
			
			The Compensation Deferrals, and the earnings thereon, credited to the Participant’s Compensation Deferral Account shall be immediately 100% vested and nonforfeitable at all times.

		

		

		 

		

			 

		

		

			7

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

		
		

			
	
			
				Article 5.  
			ARTICLE 5. EMPLOYER CREDITS 

			
	
			
				 5.01
			

			
	
			
			PROFIT-SHARING CREDITS.

			
	
			
				 (a)
			

			
	
			
			Each year, the Company shall credit each eligible Participant who meets the requirements described in paragraph (b) below with the amount, if any, of the employer profit sharing contribution that would have been allocated to the Participant under the 401(k) Plan for that Plan year if

			
	
			
				 (i)
			

			
	
			
			the Participant had not been classified as a “highly compensated employee” for purposes of the 401(k) Plan, and

			
	
			
				 (ii)
			

			
	
			
			the Internal Revenue Code provisions limiting the allocation of employer profit sharing contributions under the 401(k) Plan did not apply.

			
	
			
				 (b)
			

			
	
			
			A Participant shall not be eligible to have Employer Profit-Sharing Credits credited to his or her Account for a Plan Year unless

			
	
			
				 (i)
			

			
	
			
			the Participant has completed at least 1,000 hours of service during the Plan Year (as determined under the 401(k) Plan), and

			
	
			
				 (ii)
			

			
	
			
			the Participant is continuously employed by a Participating Employer as an active employee during the entire Plan Year (or if shorter, during the portion of the Plan Year commencing as of the date he or she was first designated as eligible to participate in the Plan).

			
	
			
				 5.02
			

			
	
			
			EMPLOYER MATCHING CREDITS.

			
	
			
				 (a)
			

			
	
			
			Each Plan Year, the Company shall credit each eligible Participant who meets the requirements described in paragraph (b) below with an amount equal to the excess of —

			
	
			
				 (i)
			

			
	
			
			the maximum amount of employer matching contributions that would have been allocated to the Participant under the 401(k) Plan if the Participant had not been classified as a highly compensated employee for purposes of the 401(k) Plan as determined based on the total of the Participant’s elective deferrals under the 401(k) Plan and Compensation Deferrals under this Plan;

		
			OVER
		

			
	
			
				 (ii)
			

			
	
			
			the actual amount of employer matching contributions allocated to the Participant under the 401(k) Plan for the Plan Year.

			
	
			
				 (b)
			

			
	
			
			A Participant shall not be eligible to have Employer Matching Credits credited to his or her Account for a Plan Year unless

			
	
			
				 (i)
			

			
	
			
			the Participant has met the age and service requirements for participation in the 401(k) Plan;

		 

		

			 

		

		

			8

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

			
	
			
				 (ii)
			

			
	
			
			the Participant has contributed the maximum amount of compensation deferral contributions to the 401(k) Plan permitted for the plan year; and

			
	
			
				 (iii)
			

			
	
			
			the Participant is continuously employed by a Participating Employer as an active employee (A) during the entire Plan Year (or if shorter, during the portion of the Plan Year commencing as of the date he or she was first designated as eligible to participate in the Plan) or (B) during the Plan Year until his or her death, Total Disability, or Retirement Age.

			
	
			
				 5.03
			

			
	
			
			EMPLOYER DISCRETIONARY CREDITS.

		
			The Board of Directors, in its sole discretion, may at any time approve the crediting of additional amounts to the Account(s) of one or more Participants.
		

			
	
			
				 5.04
			

			
	
			
			VESTING OF EMPLOYER CREDITS.

			
	
			
				 (a)
			

			
	
			
			Vesting of Employer Profit-Sharing Account, Employer Matching Account, and ESOP Account. Except as provided in paragraph (c) and subject to Article 9, the amounts credited to a Participant’s Employer Profit-Sharing Account, Employer Matching Account and ESOP Account shall become vested to the extent his or her profit sharing contribution account under the 401(k) Plan is vested (or would have been vested if he or she had not been excluded from receiving profit sharing contributions under the 401(k) Plan).

			
	
			
				 (b)
			

			
	
			
			Vesting in Employer Discretionary Account. Except as provided in paragraph (c) and subject to Article 9, the amounts credited to a Participant’s Employer Discretionary Account shall become vested in accordance with such vesting schedule and requirements as may be adopted by the Committee.

			
	
			
				 (c)
			

			
	
			
			Vesting Upon Change of Control. All participants shall be vested fully in their Account values in the event of a Change of Control of the Company.

		
			For purposes of this Section, “Change of Control” means
		

			
	
			
				 (i)
			

			
	
			
			acquisition of the beneficial ownership of at least 51% of the voting securities of Weis Markets, Inc. by any individual or other person or group of persons who have agreed to act together for the purpose of acquiring, holding, voting or disposing of such securities; or

			
	
			
				 (ii)
			

			
	
			
			any merger or consolidation of Weis Markets, Inc., or transfer of all or substantially all of its assets to a buyer, in which stockholders of Weis Markets, Inc. before such merger, consolidation or transfer do not own more than 51% of the outstanding voting power of the surviving entity following such transaction.

		

		

		 

		

			 

		

		

			9

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

		
		

			
	
			
				Article 6.  
			PARTICIPANT ACCOUNTS

			
	
			
				 6.01
			

			
	
			
			PARTICIPANTS’ ACCOUNTS.

		
			The Company shall establish and maintain a separate memorandum account in the name of each Participant. Such account shall be credited or charged with (a) the Participant’s Compensation Deferrals, if any; (b) Employer Profit-Sharing Credits, if any; (c) Employer Matching Credits, if any; (d) Employer Discretionary Credits, if any; (e) ESOP Credits; (f) income, gains, losses, and expenses of investments deemed held in such account; and (g) distributions from such account.
		

			
	
			
				 6.02
			

			
	
			
			INVESTMENT OF ACCOUNTS.

			
	
			
				 (a)
			

			
	
			
			The amount credited to a Participant’s Account shall be deemed to be invested and reinvested in life insurance, annuities, mutual funds, stocks, bonds, securities, and any other assets or investment vehicles, as may be selected by the Committee in its sole discretion.

			
	
			
				 (b)
			

			
	
			
			A Participant, by electing to participate in this Plan, agrees on behalf of himself or herself and his or her designated beneficiaries, to assume all risk in connection with any increase or decrease in value of the investments that are deemed to be held in his or her account. Each Participant further agrees that the Committee and the Participating Employers shall not in any way be held liable for any investment decisions or for the failure to make any investments by the Committee.

		

		

		 

		

			 

		

		

			10

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

		
		

			
	
			
				Article 7.  
			DISTRIBUTION

			
	
			
				 7.01
			

			
	
			
			DISTRIBUTION FROM COMPENSATION DEFERRAL ACCOUNT IN EVENT OF UNFORESEEABLE EMERGENCY.

		
			The Committee, in its sole discretion, may permit a payment to be made to a Participant at any time from his or her Compensation Deferral Account prior to Termination of Service in the event of an “unforeseeable emergency”. Distributions because of an unforeseeable emergency shall not exceed the amount reasonably necessary to satisfy the emergency need (which may include amounts necessary to pay any Federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution).
		

			
	
			
				 (a)
			

			
	
			
			For purposes of this Section, an “unforeseeable emergency” is a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, or the Participant’s dependent (as defined in Code Section 152(a)); loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

			
	
			
				 (b)
			

			
	
			
			The circumstances that will constitute an unforeseeable emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved:

			
	
			
				 (i)
			

			
	
			
			through reimbursement or compensation by insurance or otherwise;

			
	
			
				 (ii)
			

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

			
	
			
				 (iii)
			

			
	
			
			by cancellation of Compensation Deferrals under the Plan. 

			
	
			
				 7.02
			

			
	
			
			DISTRIBUTION FOLLOWING TERMINATION OF SERVICE.

			
	
			
				 (a)
			

			
	
			
			Termination of Service Prior to Retirement Age. In the event that a Participant Terminates Service prior to attaining his or her Retirement Age for any reason other than death or becoming Totally Disabled, the vested balance credited to his or her Account will be distributed to the Participant in a single lump sum during the calendar year following the calendar year in which the Participant’s Termination of Service occurs.

		
			Notwithstanding the foregoing, in no event shall payment to a Participant who is a “specified employee” within the meaning of Code Section 409A on the date of his or her Termination from Service commence earlier than the end of the six (6) month period following the date of such termination.
		

			
	
			
				 (b)
			

			
	
			
			Termination of Service at or After Retirement Age. In the event that a Participant Terminates Service at or after attaining his or her Retirement Age for any reason other than death or becoming Totally Disabled, the vested balance credited to his or her Account will 
		

		 

		

			 

		

		

			11

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

			be distributed to the Participant in the form or forms of payment elected by the Participant pursuant to Section 4.03, subject to the following rules:

			
	
			
				 (i)
			

			
	
			
			Distribution in a single lump sum payment will be made during the calendar year following the calendar year in which the Participant’s Termination of Service occurs.

		
			Notwithstanding the foregoing, in no event shall payment to a Participant who is a “specified employee” within the meaning of Code Section 409A on the date of his or her Termination from Service commence earlier than the end of the six (6) month period following the date of such termination.
		

			
	
			
				 (ii)
			

			
	
			
			The first annual installment shall be based on the value of the Account as of the December 31 next following the event occasioning such distribution. The first annual installment will be made in the calendar year following the calendar year of Termination of Service.  Each subsequent annual installment shall be paid as soon as practicable after the annual anniversary of such initial valuation date, based on the value of the affected Account as determined at the applicable subsequent valuation date. Each annual installment shall be determined by dividing the value of the affected Account, determined in accordance with the foregoing, by the number of annual installments due and not yet distributed.

			
	
			
				 (iii)
			

			
	
			
			Each annual installment payment shall be treated as a separate payment for purposes of Code Section 409A.

			
	
			
				 (iv)
			

			
	
			
			Notwithstanding the foregoing, if the balance credited to the Participant’s Account as of the valuation date is less than $50,000, then distribution will be made in a single lump sum payment.

			
	
			
				 7.03
			

			
	
			
			TOTAL DISABILITY OR DEATH

		
			Notwithstanding anything in this Plan to the contrary —
		

			
	
			
				 (a)
			

			
	
			
			Prior to Commencement of Payment. In the event a Participant becomes Totally Disabled or dies at any time prior to the commencement of payment under this Article 7, then the balance credited to the Account will be distributed in a single lump payment to the Participant or his or her designated beneficiary (as the case may be) as soon as administratively practicable following the date on which the Participant is determined to be Totally Disabled or submission of proof of death satisfactory to the Committee, as applicable.

			
	
			
				 (b)
			

			
	
			
			After Payment Commences. In the event a Participant becomes Totally Disabled or dies at any time after the commencement of payment under this Article 7, then the balance credited to the Account will be distributed in a single lump payment to the Participant or his or her designated beneficiary (as the case may be) as soon as administratively 
		

		 

		

			 

		

		

			12

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

			practicable following the date on which the Participant is determined to be Totally Disabled or submission of proof of death satisfactory to the Committee, as applicable.
		

		 

		

			 

		

		

			13

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

			

			
	
			
				Article 8.  
			BENEFICIARY

			
	
			
				 8.01
			

			
	
			
			BENEFICIARY DESIGNATION.

		
			Each Participant shall designate a Beneficiary to receive benefits under the Plan in the event of his or her death by completing a Beneficiary designation form furnished by the Committee. A Participant may change his or her Beneficiary designation by submitting to the Committee another Beneficiary designation form. However, no change of Beneficiary shall be effective until acknowledged in writing by the Company.
		

			
	
			
				 8.02
			

			
	
			
			PROPER BENEFICIARY.

		
			If no designated Beneficiary survives the Participant, the value of the Participant’s Account shall be paid to the Participant’s surviving spouse, or if none, to the Participant’s issue per stirpes, or if none, to the Participant’s estate. If the Company has any doubt as to the proper Beneficiary to receive payments hereunder, the Company shall have the right to withhold such payments until the matter is finally adjudicated. However, any payment made by the Company, in good faith and in accordance with this Plan, shall fully discharge the Company from all further obligations with respect to that payment.
		

			
	
			
				 8.03
			

			
	
			
			MINOR OR INCOMPETENT BENEFICIARY.

		
			In making any payments to or for the benefit of any minor or incompetent Beneficiary, the Committee, in its sole and absolute discretion, may cause distribution to be made to a legal or natural guardian or relative of a minor or incompetent. Or, it may make a payment to any adult with whom the minor or incompetent temporarily or permanently resides. The receipt by a guardian, relative or other person shall be a complete discharge to the Company with respect to the payment. Neither the Committee nor the Company shall have any responsibility to see to the proper application of any payment so made.
		

		

		

		 

		

			 

		

		

			14

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

		
		

			
	
			
				Article 9.  
			FORFEITURE OF BENEFITS

			
	
			
				 9.01
			

			
	
			
			TERMINATION FOR CAUSE — FORFEITURE OR DISCONTINUATION OF BENEFITS.

		
			Notwithstanding anything in this Plan to the contrary, if the Committee, in its sole discretion, determines that the Participant’s employment with a Participating Employer has been terminated for Cause, then the Committee may cause the Participant’s entire interest in benefits attributable to his or her Employer Matching Account, Employer Profit-Sharing Account, ESOP Account and Employer Discretionary Account to be forfeited and discontinued, or may cause the Participant’s payments of benefits under the Plan to be limited or suspended for such other period the Committee finds advisable under the circumstances, and may take any other action and seek any other relief the Committee, in its sole discretion, deems appropriate.
		

			
	
			
				 9.02
			

			
	
			
			DEFINITION OF CAUSE. 

		
			“Cause” means
		

			
	
			
				 (a)
			

			
	
			
			a Participant’s (i) refusal or willful failure to perform his or her duties and responsibilities within a reasonable time after demand for proper performance is delivered or has not substantially performed his or her duties, (ii) dishonesty, misappropriation, or fraud with regards to the Company, a Participating Employer or any of their property or business, (iii) breach of fiduciary duty owed to the Company or a Participating Employer, (iv) willful misconduct or gross negligence with regard to the Company, a Participating Employer or any of their property, business or associates, including but not limited to carrying out his or her duties, (v) the refusal to follow the written direction of the Board for which the Participant is reporting to or a more senior officer; or

			
	
			
				 (b)
			

			
	
			
			any other action or inaction which constitutes cause within the meaning of any agreement between the Participant and the Company, including but not limited to, an employment agreement, plan participation agreement or a restrictive covenant agreement.

		
			Whether a Participant has been terminated for Cause shall be determined by the Committee.
		

		
			Regardless of whether a Participant’s employment initially was considered to be terminated for any reason other than Cause, the Participant’s employment will be considered to have been terminated for Cause for purposes of this Plan if the Committee subsequently determines that the Participant engaged in an act constituting Cause.
		

			
	
			
				 9.03
			

			
	
			
			DETERMINATION BY COMMITTEE.

		
			The decision of the Committee shall be final. The omission or failure of the Committee to exercise this right at any time shall not be deemed a waiver of its right to exercise such right in the future. The exercise of discretion will not create a precedent in any future cases.
		

		

		

		 

		

			 

		

		

			15

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

		
		

			
	
			
				Article 10.  
			ADMINISTRATION OF THE PLAN

			
	
			
				 10.01
			

			
	
			
			COMMITTEE.

		
			The Plan shall be administered by the Committee. The Committee shall have full authority and power to administer and construe the Plan, subject to applicable requirements of law. Without limiting the generality of the foregoing, the Committee shall have the following powers and duties:
		

			
	
			
				 (a)
			

			
	
			
			To make and enforce such rules and regulations as it deems necessary or proper for the administration of the Plan;

			
	
			
				 (b)
			

			
	
			
			To interpret the Plan and to decide all questions, including questions of fact, concerning the Plan;

			
	
			
				 (c)
			

			
	
			
			To determine the eligibility of any person to participate in the Plan, and to determine the amount and the recipient of any payments to be made under the Plan;

			
	
			
				 (d)
			

			
	
			
			To designate and value any investments deemed held in the Accounts;

			
	
			
				 (e)
			

			
	
			
			To appoint such agents, counsel, accountants, consultants and other persons as may be required to assist in administering the Plan; and

			
	
			
				 (f)
			

			
	
			
			To make all other determinations and to take all other steps necessary or advisable for the administration of the Plan.

		
			All decisions made by the Committee pursuant to the provisions of the Plan shall be made in its sole discretion and shall be final, conclusive, and binding upon all parties.
		

			
	
			
				 10.02
			

			
	
			
			DELEGATION OF DUTIES.

		
			The Committee may delegate such of its duties and may engage such experts and other persons as it deems appropriate in connection with administering the Plan. The Committee shall be entitled to rely conclusively upon, and shall be fully protected in any action taken by the Committee, in good faith in reliance upon any opinions or reports furnished to it by any such experts or other persons.
		

			
	
			
				 10.03
			

			
	
			
			EXPENSES.

		
			All expenses incurred prior to the termination of the Plan that shall arise in connection with the administration of the Plan, including, without limitation, administrative expenses and compensation and other expenses and charges of any actuary, counsel, accountant, specialist, or other person who shall be employed by the Committee in connection with the administration of the Plan shall be paid by the Participating Employers, or at the discretion of the Committee, shall be charged against such assets as are deemed to be investments under the Plan pursuant to Article 6.
		

		
			﻿
		

		 

		

			 

		

		

			16

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

			
	
			
				 10.04
			

			
	
			
			INDEMNIFICATION OF COMMITTEE MEMBERS.

		
			The Participating Employers agree to indemnify and to defend to the fullest extent permitted by law any person serving as a member of the Committee, and each employee of a Participating Employer or any of their affiliated companies appointed by the Committee to carry out duties under this Plan, against all liabilities, damages, costs and expenses (including attorneys’ fees and amounts paid in settlement of any claims approved by the Company) occasioned by any act or omission to act in connection with the Plan, if such act or omission is in good faith.
		

			
	
			
				 10.05
			

			
	
			
			LIABILITY.

		
			To the extent permitted by law, neither the Committee nor any other person shall incur any liability for any acts or for any failure to act except for liability arising out of such person’s own willful misconduct or willful breach of the Plan.
		

		
			﻿
		

			
	
			
				Article 11.  
			CLAIMS PROCEDURE

		
			The following claims procedures shall apply with respect to the Plan:
		

		
			﻿
		

			
	
			
				 11.01
			

			
	
			
			FILING A WRITTEN CLAIM FOR BENEFITS.

		
			If the Participant or Beneficiary or his or her authorized representative (the “Claimant”) believes that he or she is entitled to benefits under the Plan, the Claimant shall make a written request for benefits. This written claim shall be mailed or delivered to the Committee.
		

			
	
			
				 11.02
			

			
	
			
			NOTIFICATION TO CLAIMANT OF DECISION.

		
			 Within ninety (90) days after receipt of a claim for benefits (or within 180 days if special circumstances require an extension of time), the Committee shall provide a written notice to the Claimant notifying the Claimant of its decision with regard to the claim.  In the event of such special circumstances requiring an extension of time, there shall be furnished to the Claimant prior to expiration of the initial 90-day period written notice of the extension, which notice shall set forth the special circumstances necessitating such extension and the date by which the decision shall be made.  If such claim is wholly or partially denied, notice shall be written in a manner calculated to be understood by the Claimant, and shall set forth: 
		

			
	
			
				 (a)
			

			
	
			
			 the specific reason(s) for the denial; 

			
	
			
				 (b)
			

			
	
			
			specific references to pertinent Plan provisions on which the denial is based;

			
	
			
				 (c)
			

			
	
			
			a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary; and 

		 

		

			 

		

		

			17

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

			
	
			
				 (d)
			

			
	
			
			an explanation of the procedures for appealing the denial and the time limits applicable to such procedures.

		
			Notwithstanding the foregoing, if the Participant is Disabled and the claim relates to the Disability, the Committee shall notify the Claimant of the decision within 30 days (which may be extended for an additional 30 days if required by special circumstances).
		

			
	
			
				 11.03
			

			
	
			
			REVIEW PROCEDURE.

		
			If the claim is denied and the Claimant desires a review of such denial, the Claimant shall notify the Committee in writing within sixty (60) days after receipt by the Claimant of the written notice of denial (a claim shall be deemed denied if the Committee does not take any action within the aforesaid ninety (90) day period, or 180 days if special circumstances require an extension of time),  or, if such notice shall not be given, within 60 days following the latest date on which such notice could have been timely given. In requesting a review of the claim denial, the Claimant may review the Plan document and other pertinent documents, may submit any written issues and comments, may request an extension of time for such written submission of issues and comments, and may request that a hearing be held, but the decision to hold a hearing shall be within the sole discretion of the Committee.
		

			
	
			
				 11.04
			

			
	
			
			COMMITTEE REVIEW.

		
			The decision on appeal of a claim denied in whole or in part by the Committee shall be made in the following manner:
		

			
	
			
				 (a)
			

			
	
			
			The decision on the review of the denied claim shall be rendered by the Committee within sixty (60) days (or within 120 days if special circumstances require an extension of time)  after the receipt of the request for review (if a hearing is not held) or within sixty (60) days after the hearing if one is held. In the event of such special circumstances requiring an extension of time, written notice of the extension shall be furnished to the claimant prior to the commencement of the extension.    Notwithstanding the foregoing, if the Participant is Disabled and the claim relates to the Disability, the Committee shall notify the claimant of the decision within 45 days (which may be extended for an additional 30 days if required by special circumstances).

			
	
			
				 (b)
			

			
	
			
			With respect to an appeal that is denied in whole or in part, the decision shall set forth specific reasons for the decision, shall be written in a manner designed to be understood by the claimant, shall cite specific references to the pertinent Plan provisions on which the decision is based, shall describe any voluntary appeal procedures offered by the Plan, and shall include a statement of the Claimant’s right to bring an action under section 502(a) of ERISA.

			
	
			
				 (c)
			

			
	
			
			The decision of the Committee shall be final and conclusive.

		
			﻿
		

		

		

		 

		

			 

		

		

			18

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

		﻿
		

		
			﻿
		

		
			11.05CLAIMS RELATING TO DISABILITY
		

		
			Notwithstanding anything in this Plan to the contrary, in the event of a claim relating to the determination of whether the Participant is Disabled, for purposes of any benefit under the Plan, the Committee shall administer the claims procedures in accordance with the special rules for disability benefits described in 29 C.F.R. § 2560.503-1.
		

		
			11.06CIVIL ACTION
		

		
			A Claimant shall have no right to bring any action at law or in equity regarding a claim for benefits unless and until he or she exhausts his or her rights under the claims and review procedures above in accordance with the time frames set forth in those procedures. No action at law or in equity shall be brought to recover benefits under the Plan later than two years from the date of the final adverse benefit determination of the Claimant’s appeal of the denial of his claim for benefits. Notwithstanding the foregoing, if the applicable, analogous Pennsylvania statute of limitations has run or will run before the aforementioned two-year period, the Pennsylvania statute of limitations is controlling. No action at law or in equity shall be brought in connection with the Plan except in Federal district court in the United States District Court for the Middle District of Pennsylvania. 
		

			
	
			
				Article 12.  
			NATURE OF COMPANY’S OBLIGATION

			
	
			
				 12.01
			

			
	
			
			UNFUNDED PLAN.

		
			Nothing in this Plan shall be construed as giving any Participant, or his or her legal representative or designated beneficiary, any claim against any specific assets of the Company or any of its affiliated companies or as imposing any trustee relationship upon the Company or any of its affiliated companies in respect of the Participant. The Company shall not be required to segregate any assets in order to provide for the satisfaction of the obligations hereunder. Investments deemed held in the Accounts shall continue to be a part of the general funds of the Company, and no individual or entity other than the Company shall have any interest whatsoever in such funds. If and to the extent that the Participant or his or her legal representative or designated beneficiary acquires a right to receive any payment pursuant to this Plan, such right shall be no greater than the right of an unsecured general creditor of the Company or any of its affiliated companies.
		

			
	
			
				 12.02
			

			
	
			
			RABBI TRUST.

		
			The Company in its sole discretion may establish a trust for the purpose of providing funds for the payment of the amounts credited to Participants under the Plan. Such trust shall be an irrevocable grantor trust containing provisions which are the same as, or are similar to, the provisions contained in the model “rabbi trust” set forth in Internal Revenue Service Revenue Procedure 92-64 (or any successor guidance issued by the IRS).
		

		

		

		 

		

			 

		

		

			19

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

		
		

		 

		

			 

		

		

			20

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

		
		

			
	
			
				Article 13.  
			MISCELLANEOUS

			
	
			
				 13.01
			

			
	
			
			ACCELERATION OR DELAY OF PAYMENTS PERMITTED UNDER CODE SECTION 409A.

			
	
			
				 (a)
			

			
	
			
			Acceleration of Payments. The Committee may, in its discretion, accelerate the payment of all or a portion of a Participant’s Account prior to the time specified in this Plan to the extent such acceleration is permitted by Treasury Regulation Section 1.409A-3(j)(4). Such permitted accelerations shall include payments to comply with domestic relations orders, payments to comply with conflicts of interest laws, payment of employment taxes, payment upon income inclusion under Code Section 409A, and/or such other circumstances as are permitted by the regulations.  In no event shall any member of the Committee or any Participating Employer be liable for any tax, interest charge or penalty that may be imposed on a participant or beneficiary as a result of a failure to comply with Section 409A.

			
	
			
				 (b)
			

			
	
			
			Delay of Payments. The Committee may, in its discretion, delay the payment of all or a portion of a Participant’s Account in such circumstances as may be permitted under Code Section 409A.

			
	
			
				 13.02
			

			
	
			
			RIGHT TO WITHHOLD TAXES.

		
			The Participating Employers shall have the right to withhold such amounts from any payment under this Plan as it determines necessary to fulfill any federal, state, or local wage or compensation withholding requirements.
		

			
	
			
				 13.03
			

			
	
			
			NO GUARANTEE OF EMPLOYMENT.

		
			Neither the Plan, nor any action taken under the Plan, shall confer upon any Participant any right to continuance of employment by the Company or any of its affiliated companies nor shall it interfere in any way with the right of the Company or any of its affiliated companies to terminate any Participant’s employment at any time.
		

			
	
			
				 13.04
			

			
	
			
			UNCLAIMED BENEFIT.

		
			Each Participant shall keep the Committee informed in writing of his or her current address and the current address of his or her beneficiary. The Committee shall not be obligated to search for the whereabouts of any person. If the location of a Participant is not made known to the Committee within three (3) years after the date on which payment of the Participant’s Account may first be made, payment may be made as though the Participant had died at the end of the three (3) year period. If, within one additional year after such three (3) year period has elapsed, or, within three years after the actual death of a Participant, the Committee is unable to locate any designated beneficiary of the Participant, then the Participating Employers shall have no further obligation to pay any benefit hereunder to such Participant or beneficiary or any other person and such benefit shall be irrevocably forfeited.
		

		
			﻿
		

		 

		

			 

		

		

			21

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

			
	
			
				 13.05
			

			
	
			
			SUSPENSION OF PAYMENTS.

		
			If any controversy, doubt or disagreement should arise as to the person to whom any distribution or payment should be made, the Committee, in its discretion, may, without any liability whatsoever, retain the funds involved or the sum in question pending settlement or resolution to the Committee’s satisfaction of the matter, or pending a final adjudication by a court of competent jurisdiction.
		

			
	
			
				 13.06
			

			
	
			
			SEVERABILITY.

		
			The provisions of the Plan are severable. If any provision of the Plan is deemed legally or factually invalid or unenforceable to any extent or in any application, then the remainder of the provision and the Plan, except to such extent or in such application, shall not be affected, and each and every provision of the Plan shall be valid and enforceable to the fullest extent and in the broadest application permitted by law.
		

			
	
			
				 13.07
			

			
	
			
			NO OTHER AGREEMENTS OR UNDERSTANDINGS.

		
			This Plan represents the sole agreement between the Participating Employers and Participants concerning its subject matter, and it supersedes all prior agreements, arrangements, understandings, warranties, representations, and statements between or among the parties concerning its subject matter.
		

			
	
			
				 13.08
			

			
	
			
			WRITTEN NOTICE.

		
			Any notice which shall or be or may be given under the Plan or a Deferral Agreement shall be in writing and shall be mailed by United States mail, postage prepaid. If notice is to be given to the Committee, such notice shall be addressed to 1000 South Second Street, Sunbury, Pennsylvania 17801, and marked for the attention of the Committee, or if notice to a Participant, addressed to the address shown on the Participant’s Deferral Agreement.
		

			
	
			
				 13.09
			

			
	
			
			CHANGE OF ADDRESS.

		
			Any Participant or the Committee may, from time to time, change the address to which notices shall be mailed by the other by giving written notice of a new address.
		

			
	
			
				 13.10
			

			
	
			
			AMENDMENT AND TERMINATION.

		
			The Company retains the sole and unilateral right to terminate, amend, modify, or supplement this Plan, in whole or in part at any time. This right includes the right to make retroactive amendments. However, no exercise of this right shall reduce the Account of any Participant or his or her Beneficiary.
		

		
			﻿
		

		
			﻿
		

		

		

		 

		

			 

		

		

			22

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

		﻿
		

			
	
			
				 13.11
			

			
	
			
			NONTRANSFERABILITY.

		
			Except insofar as prohibited by applicable law, no sale, transfer, alienation, assignment, pledge, collateralization or attachment of any benefits under this Plan shall be valid or recognized by the Company. Neither the Participant, his or her spouse, or designated Beneficiary shall have any power to hypothecate, mortgage, commute, modify or otherwise encumber in advance of any of the benefits payable hereunder, nor shall any of said benefits be subject to seizure for the payment of any debts, judgments, alimony or maintenance, owed by the Participant or his or her Beneficiary, or be transferable by operation of law in the event of bankruptcy, insolvency or otherwise. Notwithstanding the foregoing, the Company shall pay benefits in accordance with a qualified domestic relations order as defined in the Employee Retirement Income Security Act of 1974, and benefits payable under the Plan may be applied by the Company to discharge obligations of the Participant, his or her Beneficiary or estate to the Company.
		

			
	
			
				 13.12
			

			
	
			
			APPLICABLE LAW.

		
			This Plan shall be governed by the laws of the United States, and to the extent permitted thereby by the laws of the Commonwealth of Pennsylvania.
		

			
	
			
				 13.13
			

			
	
			
			TITLES.

		
			Titles of the Articles of this Plan are included for ease of reference only and are not to be used for the purpose of construing any portion or provision of this Plan document.
		

			
	
			
				 13.14
			

			
	
			
			CODE SECTION 409A TRANSITION RULES.

		
			Notwithstanding anything in the Plan to the contrary, the following, to the extent permitted by the Committee and Code Section 409A, on or prior to December 31, 2008, a Participant may make a new election with respect to the form of payment of the Account in accordance with the following rules:
		

			
	
			
				 (a)
			

			
	
			
			An election to change the form of payment of payment made on or after January 1, 2005 and on or before December 31, 2005 may apply only to amounts that would not otherwise be payable in 2005 and may not cause an amount to be paid in 2005 that would not otherwise be payable in 2005;

			
	
			
				 (b)
			

			
	
			
			An election to change the form of payment of payment made on or after January 1, 2006 and on or before December 31, 2006 may apply only to amounts that would not otherwise be payable in 2006 and may not cause an amount to be paid in 2006 that would not otherwise be payable in 2006;

			
	
			
				 (c)
			

			
	
			
			An election to change the form of payment of payment made on or after January 1, 2007 and on or before December 31, 2007 may apply only to amounts that would not otherwise be payable in 2007 and may not cause an amount to be paid in 2007 that would not otherwise be payable in 2007; and

		 

		

			 

		

		

			23

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019

		

 

		

			 

		

			
	
			
				 (d)
			

			
	
			
			An election to change the form of payment of payment made on or after January 1, 2008 and on or before December 31, 2008 may apply only to amounts that would not otherwise be payable in 2008 and may not cause an amount to be paid in 2008 that would not otherwise be payable in 2008.

		 

		

			 

		

		

			24

		

		

			Weis Markets, Inc.

		

		

			Supplemental Executive Retirement Plan

		

		

			As amended and restated effective 12/09/2019Document

Exhibit 4.5
DESCRIPTION OF HARVEST CAPITAL CREDIT CORPORATION’S 
SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE 
SECURITIES EXCHANGE ACT OF 1934

        As of the date of this Annual Report on Form 10-K, Harvest Capital Credit Corporation (“we,” “our,” “us” or the “Company”) has two classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): our common stock and 6.125% Notes due 2022.

The following description is based on relevant portions of the Delaware General Corporation Law, our restated certificate of incorporation (the “charter”), our bylaws (the “bylaws”) and the Indenture (as defined below). This summary is a description of the material terms of, and is qualified in its entirety by, the charter, bylaws and Indenture, each of which is incorporated by reference as an exhibit to this Annual Report on Form 10-K, and may not contain all of the information that is important to you. We refer you to the Delaware General Corporation Law and the charter, bylaws and Indenture for a more detailed description of the provisions summarized below.
 
A.Common Stock, $0.001 par value per share 
 
Under the terms of our charter, our authorized capital stock consists solely of 100,000,000 shares of common stock, par value $0.001 per share, of which 5,945,854 shares were outstanding as of December 31, 2019, and 2,000,000 shares of preferred stock, par value $0.001 per share, of which no shares were outstanding as of December 31, 2019. Our common stock is listed on the NASDAQ Global Market under the ticker symbol “HCAP.”  No stock has been authorized for issuance under any equity compensation plans. Under Delaware law, our stockholders generally are not personally liable for our debts or obligations. 
 
Common stock
 
Under the terms of our charter, all shares of our common stock have equal rights as to earnings, assets, dividends, and voting. When they are issued, shares of our common stock will be duly authorized, validly issued, fully paid, and non-assessable. Distributions may be paid to the holders of our common stock if, as, and when declared by our board of directors out of assets legally available therefor, subject to any preferential dividend rights of outstanding preferred stock. 

An annual meeting of stockholders will be held each year and stated in a notice of meeting or in a duly executed waiver thereof. Special meetings of stockholders may be called for any purpose by our board of directors, chairman or chief executive officer and may be held on such date and at such time and place, either within or outside the State of Delaware, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof.

Holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders, including the election of directors, and do not have cumulative voting rights. Except as provided with respect to any other class or series of stock, the holders of our common stock will possess exclusive voting power. 

At any annual meeting, stockholders will elect, by a plurality vote, the nominated directors for appointment to our board of directors. The holders of a majority of the voting power of our issued and outstanding common stock entitled to vote at any meeting of stockholders (present in person or represented by proxy) shall constitute a quorum for the transaction of business at all meetings of stockholders, except as otherwise provided by statute or by the charter. When a quorum is present at any meeting, the vote of the holders of a majority of the voting power of our issued and outstanding common stock entitled to vote thereon, present and voting, in person or represented by proxy, shall decide any question brought before such meeting, unless the question is one upon which by express provision of statute or of the charter or bylaws, a different vote is required. 

The number of directors constituting the whole board may be increased or decreased from time to time by our board of directors; provided, however, that under the bylaws (i) the number of directors will not be fewer than five or greater than nine (9) and (ii) no decrease in the number of directors shall shorten the term of any incumbent 
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director. Our board of directors is divided into three classes, designated Class I, Class II and Class III, as nearly equal in number as possible, with each class serving staggered three‐year terms.  The term of office of directors of one class will expire at each annual meeting of stockholders, and in all cases as to each director when such director’s successor shall be elected and shall qualify or upon such director’s earlier resignation, removal from office, death or incapacity.  Additional directorships resulting from an increase in number of directors will be apportioned among the classes as equally as possible.  In the event of any decrease in the number of directors, all classes of directors shall be decreased equally as nearly as possible.  

Only persons who are nominated in accordance with the procedures set forth in the bylaws will be eligible for election as directors of Company.  Nominations of persons for election to our board of directors may be made at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors as provided under the bylaws, (a) by or at the direction of our board of directors (or any duly authorized committee thereof) or (b) by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for under the bylaws and on the record date for the determination of stockholders entitled to vote at such meeting and (ii) who timely complies with the notice procedures set forth in the bylaws. In addition, no business may be transacted at an annual meeting of stockholders, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of our board of directors (or any duly authorized committee thereof), (b) otherwise properly brought before the annual meeting by or at the direction of our board of directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the annual meeting by any stockholder of the Company (i) who is a stockholder of record on the date of the giving of the notice provided for under the bylaws and on the record date for the determination of stockholders entitled to vote at such annual meeting and (ii) who timely complies with the notice procedures set forth in the bylaws.

Upon our liquidation, dissolution, or winding up, the holders of common stock are entitled to receive ratably our net assets available after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of any series of preferred stock which we may designate and issue in the future. In addition, holders of our common stock may participate in our dividend reinvestment plan.
  
Limitation on Liability of Directors and Officers; Indemnification and Advancement of Expenses
 
Under our charter, we have agreed to indemnify, to the fullest extent authorized by the Delaware General Corporation Law, any person who was or is involved in any actual or threatened action, suit, or proceeding (whether civil, criminal, administrative or investigative) by reason of the fact that such person is or was one of our directors or officers or is or was serving at our request as a director or officer of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, against all expense liability and loss (including attorney’s fees, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended, penalties and amounts paid or to be paid in settlement) actually and reasonably incurred by such person in connection with such action, suit, or proceeding, except in cases in which the indemnitee did not act in good faith with the reasonable belief that his or her conduct was in, or not opposed to, the best interest of the Company or the indemnitee’s conduct constituted gross negligence, bad faith, reckless disregard, or willful misconduct. Our charter also provides for the advancement of expenses incurred by a director or officer in advance of a final disposition of a proceeding, upon the receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event it is ultimately determined that he or she is not entitled to indemnification. In addition, our charter provides that our directors will not be personally liable to us or our stockholders for monetary damages for breaches of their fiduciary duty as directors, except for a breach of their duty of loyalty to us or our stockholders, for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, for liability under Section 174 of the Delaware General Corporation Law (which relates to the unlawful payment of a dividend or an unlawful stock purchase or redemption), or for any transaction from which the director derived an improper personal benefit. So long as we are regulated under the Investment Company Act of 1940, as amended (the “1940 Act”), the above indemnification, advancement of expenses, and limitation of liability will be limited by the 1940 Act or by any valid rule, regulation 
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or order of the Securities and Exchange Commission (the “SEC”) thereunder. The 1940 Act provides, among other things, that a company may not include in its charter or bylaws a provision that would protect a director or officer against liability to it or its stockholders to which he or she might otherwise be subject by reason of his or her willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office.
 
Delaware law provides that the indemnification and advancement of expenses permitted under the law shall not be deemed exclusive of any other rights to which the directors and officers may be entitled under the corporation’s bylaws, any agreement, a vote of stockholders, or otherwise. Our charter similarly provides that the indemnification and advancement of expenses provided for in the charter shall not be deemed exclusive of any other rights to which a director or officer seeking indemnification or advancement of expenses may be entitled under any law (common or statutory), our bylaws, agreement, vote of the stockholders or disinterested directors, or otherwise, both as to action in his/her official capacity and as to action in another capacity while holdings office or while employed by or acting as agent for us, and shall continue as to a person who has ceased to be a director or officer, and shall inure to the benefit of the estate, heirs, executors and administers of such person. 
 
Our charter permits us to secure insurance on behalf of any person who is or was or has agreed to become a director or officer of the Company or is or was serving at our request as a director or officer of another enterprise against any liability asserted against him or her and incurred by him or her or on his/her behalf in any such capacity, or arising out of his/her status as such, regardless of whether we would have the power to indemnify him or her against such liability under the other indemnification provisions in our charter. We have obtained liability insurance for our officers and directors.
 
Delaware Law and Certain Charter and Bylaw Provisions; Anti-Takeover Measures
 
We are subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, the statute prohibits a publicly held Delaware corporation from engaging in a “business combination” with “interested stockholders” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner or certain other conditions are satisfied. A “business combination” includes certain mergers, asset sales, and other transactions resulting in a financial benefit to the interested stockholder. Subject to exceptions, an “interested stockholder” is a person who, together with his, her, or its affiliates and associates, owns, or within three years did own, 15% or more of the corporation’s voting stock. 
 
Our charter and bylaws provide that:

•the board of directors be divided into three classes, as nearly equal in size as possible, with staggered three-year terms; 

•directors may be removed only for cause by the affirmative vote of the holders of two-thirds of the shares of our capital stock then outstanding and entitled to vote, voting together as a single class; and

•any vacancy on the board of directors, however the vacancy occurs, including a vacancy due to an enlargement of the board of directors, may only be filled by the board of directors, provided that a quorum is then in office and present, or by a majority of the directors then in office, if less than a quorum, or by the sole remaining director.
 
The classification of our board of directors and the limitations on removal of directors and filling of vacancies could have the effect of making it more difficult for a third party to acquire us, or of discouraging a third party from acquiring us.
 
Our charter and bylaws also provide that:

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•any action required or permitted to be taken by the stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting and may not be taken by written action in lieu of a meeting; and 

•special meetings of the stockholders may only be called by our board of directors, chairman, or chief executive officer.
  
Our bylaws provide that, in order for any matter to be considered “properly brought” before a meeting, a stockholder must comply with requirements regarding advance notice to us. These provisions could delay until the next stockholders’ meeting stockholder actions which are favored by the holders of a majority of our outstanding voting securities. These provisions may also discourage another person or entity from making a tender offer for our common stock, because such person or entity, even if it acquired a majority of our outstanding voting securities, would be able to take action as a stockholder (such as electing new directors or approving a merger) only at a duly called stockholders meeting, and not by written consent.
 
Delaware’s corporation law provides generally that the affirmative vote of a majority of the outstanding shares entitled to vote is required to amend a corporation’s certificate of incorporation, unless a corporation’s certificate of incorporation requires a greater percentage. Delaware’s corporation law also provides generally that the affirmative vote of a majority of the shares present in person or by proxy at a meeting and entitled to vote is required to amend a corporation’s bylaws, unless a corporation’s certificate of incorporation or bylaws require a greater percentage. 
 
Under our charter, the vote of at least 66-2/3% of the shares of our capital stock then outstanding and entitled to vote in the election of directors, voting together as a single class, will be required to amend or repeal certain provisions of our charter pertaining to the board of directors, limitation of liability, indemnification, stockholder action, and amendments to our charter. In addition, under our charter, the affirmative vote of the holders of at least 66-2/3% of the shares of our capital stock then outstanding and entitled to vote in the election of directors, voting together as a single class, will be required to amend or repeal any of the provisions of our bylaws. Our charter also permits our board of directors to amend or repeal our bylaws by a majority vote.

B.Debt Securities - 6.125% Notes due 2022 
 
In August 2017 we issued $25,000,000 in aggregate principal amount of 6.125% Notes due 2022 (the “Notes”). In September 2017 the underwriters exercised their overallotment option and purchased an additional $3,750,000 aggregate principal amount of the Notes. The Notes bear interest at a rate of 6.125% per year payable quarterly on every March 15, June 15, September 15 and December 15. The Notes are issued in denominations of $25 and integral multiples of $25 in excess thereof. 

As of December 31, 2019, we had $28,750,000 in aggregate principal amount of Notes outstanding. The Notes will mature on September 15, 2022. Additionally, the Notes are not subject to any sinking fund and holders of the Notes do not have the option to have the Notes repaid prior to the stated maturity date. We have listed the Notes on the NASDAQ Global Market under the trading symbol “HCAPZ.”

The Notes were issued under that certain indenture, dated as of January 27, 2015 (the “Base Indenture”), by and between us and U.S. Bank National Association (the “Trustee”), as supplemented by the second supplemental indenture, dated as of August 24, 2017 (the “Second Supplemental Indenture” and, together with the Base Indenture, the “Indenture”) by and between us and the Trustee. The Indenture does not contain any provisions that give Note holders protection in the event we issue a large amount of debt or we are acquired by another entity.
 
We have the ability to issue indenture securities with terms different from the Notes and, without the consent of the holders thereof, to reopen the Notes and issue additional Notes.
 
Optional Redemption
 
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The Notes may be redeemed in whole or in part at any time or from time to time at our option on or after September 15, 2019 upon not less than 30 days nor more than 60 days written notice by mail prior to the date fixed for redemption thereof, at a redemption price of $25 per Note to be redeemed plus accrued and unpaid interest payments otherwise payable thereon for the then-current quarterly interest period accrued to the date fixed for redemption. 
  
Holders of the Notes may be prevented from exchanging or transferring the Notes when they are subject to redemption. In case any Notes are to be redeemed in part only, the redemption notice will provide that, upon surrender of such Note, holders of the Notes will receive, without a charge, a new Note or Notes of authorized denominations representing the principal amount of their remaining unredeemed Notes. Any exercise of our option to redeem the Notes will be done in compliance with the 1940 Act.
 
If we redeem only some of the Notes, the Trustee will determine the method for selection of the particular Notes to be redeemed, in accordance with the Indenture and in accordance with the rules of any national securities exchange or quotation system on which the Notes are listed. Unless we default in payment of the redemption price, on and after the date of redemption, interest will cease to accrue on the Notes called for redemption.
  
Global Securities
 
The Notes were issued in book-entry form and represented by a global security that we deposit with and register in the name of The Depository Trust Company, New York, New York (“DTC”), or its nominee. A global security may not be transferred to or registered in the name of anyone other than the depositary or its nominee, unless special termination situations arise. As a result of these arrangements, the depositary, or its nominee, will be the sole registered owner and holder of all the Notes represented by a global security, and investors will be permitted to own only beneficial interests in a global security. For more information about these arrangements, see “- Book-Entry Procedures” below.
 
Termination of a Global Security
 
If a global security is terminated for any reason, interests in it will be exchanged for certificates in non-book-entry form (certificated securities). After that exchange, the choice of whether to hold the certificated Notes directly or in street name will be up to the investor. Investors must consult their own banks or brokers to find out how to have their interests in a global security transferred on termination to their own names, so that they will be holders.
 
Payment and Paying Agents
 
We will pay interest to the person listed in the Trustee’s records as the owner of the Notes at the close of business on a particular day in advance of each due date for interest, even if that person no longer owns the Note on the interest due date. That day, usually about two weeks in advance of the interest due date, is called the “record date.” Because we will pay all the interest for an interest period to the holders on the record date, holders buying and selling the Notes must work out between themselves the appropriate purchase price. The most common manner is to adjust the sales price of the Notes to prorate interest fairly between buyer and seller based on their respective ownership periods within the particular interest period. This prorated interest amount is called “accrued interest.”
 
Payments on Global Securities
 
We will make payments on the Notes so long as they are represented by a global security in accordance with the applicable policies of the depositary as in effect from time to time. Under those policies, we will make payments directly to the depositary, or its nominee, and not to any indirect holders who own beneficial interests in the global security. An indirect holder’s right to those payments will be governed by the rules and practices of the depositary and its participants, as described under “- Book-Entry Procedures” below.
 
Payments on Certificated Securities
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In the event the Notes become represented by certificated securities, we will make payments on the Notes as follows. We will pay interest that is due on an interest payment date to the holder of the Notes as shown on the Trustee’s records as of the close of business on the regular record date. We will make all payments of principal and premium, if any, by check at the office of the applicable trustee in New York, New York and/or at other offices that may be specified in the Indenture or a notice to holders against surrender of the Note.
 
Alternatively, at our option, we may pay any cash interest that becomes due on the Notes by mailing a check to the holder at his, her or its address shown on the Trustee’s records as of the close of business on the regular record date or by transfer to an account at a bank in the United States, in either case, on the due date.
 
Payment When Offices Are Closed
 
If any payment is due on the Notes on a day that is not a business day, we will make the payment on the next day that is a business day. Payments made on the next business day in this situation will be treated under the Indenture as if they were made on the original due date. Such payment will not result in a default under the Notes or the Indenture, and no interest will accrue on the payment amount from the original due date to the next day that is a business day.
 
Book-entry and other indirect holders should consult their banks or brokers for information on how they will receive payments on the Notes. 
 
Events of Default
 
Holders of the Notes will have rights if an Event of Default occurs in respect of the Notes, as described later in this subsection. The term “Event of Default” in respect of the Notes means any of the following:

•We do not pay the principal of (or premium, if any, on) any Note on its due date.

•We do not pay interest on any Note when due, and such default is not cured within 30 days of its due date.

•We remain in breach of any other covenant with respect to the Notes for 60 days after we receive a written notice of default stating we are in breach. The notice must be sent by either the Trustee or holders of at least 25.0% of the principal amount of the Notes.

•We file for bankruptcy, or certain other events of bankruptcy, insolvency, or reorganization occur and, in the case of certain orders or decrees entered against us under any bankruptcy law, such order or decree remains undischarged or unstayed for a period of 60 days.

•On the last business day of each of 24 consecutive calendar months, the Notes have an asset coverage, as defined in the 1940 Act, of less than 100% after giving effect to any exemptive relief granted to us by the SEC.
  
An Event of Default for the Notes does not necessarily constitute an Event of Default for any other series of debt securities issued under the same or any other indenture. The Trustee may withhold notice to the holders of the Notes of any default, except in the payment of principal or interest, if it in good faith considers the withholding of notice to be in the best interests of the holders.
 
Remedies if an Event of Default Occurs
 
If an Event of Default has occurred and is continuing, the Trustee or the holders of not less than 25% in principal amount of the Notes may declare the entire principal amount of all the Notes to be due and immediately payable. This is called a declaration of acceleration of maturity. In certain circumstances, a declaration of acceleration of maturity may be canceled by the holders of a majority in principal amount of the Notes if (1) we 
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have deposited with the Trustee all amounts due and owing with respect to the Notes (other than principal that has become due solely by reason of such acceleration) and certain other amounts, and (2) any other Events of Default have been cured or waived.
 
The Trustee is not required to take any action under the Indenture at the request of any holders unless the holders offer the Trustee protection from expenses and liability reasonably satisfactory to it (called an “indemnity”). If indemnity reasonably satisfactory to the Trustee is provided, the holders of a majority in principal amount of the Notes may direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the Trustee. The Trustee may refuse to follow those directions in certain circumstances. No delay or omission in exercising any right or remedy will be treated as a waiver of that right, remedy or Event of Default.
 
Before holders of the Notes are allowed to bypass the Trustee and bring their own lawsuit or other formal legal action or take other steps to enforce their rights or protect their interests relating to the Notes, the following must occur:

•they must give the Trustee written notice that an Event of Default has occurred and remains uncured;

•the holders of at least 25% in principal amount of all the Notes must make a written request that the Trustee take action because of the default and must offer the Trustee indemnity, security or both reasonably satisfactory to it against the cost and other liabilities of taking that action;

•the Trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity and/or security; and

•the holders of a majority in principal amount of the Notes must not have given the Trustee a direction inconsistent with the above notice during that 60-day period.
  
However, holders of the Notes are entitled at any time to bring a lawsuit for the payment of money due on their Notes on or after the due date.
 
Book-entry and other indirect holders should consult their banks or brokers for information on how to give notice or direction to or make a request of the Trustee and how to declare or cancel an acceleration of maturity. 
 
Each year, we will furnish to the Trustee a written statement of certain of our officers certifying that to their knowledge we are in compliance with the Indenture and the Notes, or else specifying any default.
 
Waiver of Default
 
The holders of a majority in principal amount of the Notes may waive any past defaults other than a default:

•in the payment of principal (or premium, if any) or interest; or

•in respect of a covenant that cannot be modified or amended without the consent of each holder. 
  
Merger or Consolidation
 
Under the terms of the Indenture, we are generally permitted to consolidate or merge with another entity. We are also permitted to sell all or substantially all of our assets to another entity. However, we may not take any of these actions unless all the following conditions are met:
 
•where we merge out of existence or convey or transfer our assets substantially as an entirety, the resulting entity must agree to be legally responsible for our obligations under the Notes;

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•the merger or sale of assets must not cause a default on the Notes and we must not already be in default (unless the merger or sale would cure the default). For purposes of this no-default test, a default would include an Event of Default that has occurred and has not been cured, as described under “Events of Default” above. A default for this purpose would also include any event that would be an Event of Default if the requirements for giving us a notice of default or our default having to exist for a specific period of time were disregarded; and

•we must deliver certain certificates and documents to the Trustee.
  
Modification or Waiver
 
There are three types of changes we can make to the Indenture and the Notes issued thereunder.
  
Changes Requiring Approval of Holders of the Notes
 
First, there are changes that we cannot make to the Notes without specific approval from the holders of the Notes. The following is a list of those types of changes:

•change the stated maturity of the principal of or interest on the Notes;

•reduce any amounts due on the Notes;

•reduce the amount of principal payable upon acceleration of the maturity of a Note following a default;

•change the place or currency of payment on a Note;

•impair the Notes holders’ right to sue for payment;

•reduce the percentage of holders of Notes whose consent is needed to modify or amend the Indenture; and

•reduce the percentage of holders of Notes whose consent is needed to waive compliance with certain provisions of the Indenture or to waive certain defaults.

Changes Not Requiring Approval
 
The second type of change does not require any vote by the holders of the Notes. This type is limited to clarifications and certain other changes that would not adversely affect holders of the Notes in any material respect.
 
Changes Requiring Majority Approval
 
Any other change to the Indenture and the Notes would require the following approval:

•if the change affects only the Notes, it must be approved by the holders of a majority in principal amount of the Notes; and

•if the change affects more than one series of debt securities issued under the same indenture, it must be approved by the holders of a majority in principal amount of all of the series affected by the change, with all affected series voting together as one class for this purpose.
  
In each case, the required approval must be given by written consent.
 
The holders of a majority in principal amount of all of the series of debt securities issued under an indenture, voting together as one class for this purpose, may waive our compliance with some of our covenants in 
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that indenture. However, we cannot obtain a waiver of a payment default or of any of the matters covered by the bullet points included above under “- Changes Requiring Approval of Holders of the Notes.”
 
Further Details Concerning Voting
 
When taking a vote, we will use the following rules to decide how much principal to attribute to the Notes:
 
The Notes will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in trust money for their payment or redemption. The Notes will also not be eligible to vote if they have been fully defeased as described later under “- Defeasance - Full Defeasance.”
 
We will generally be entitled to set any day as a record date for the purpose of determining the holders of the Notes that are entitled to vote or take other action under the Indenture. However, the record date may not be more than 30 days before the date of the first solicitation of holders to vote on or take such action. If we set a record date for a vote or other action to be taken by holders of the Notes, that vote or action may be taken only by persons who are holders of the Notes on the record date and must be taken within eleven months following the record date.
  
Book-entry and other indirect holders should consult their banks or brokers for information on how approval may be granted or denied if we seek to change the Indenture or the Notes or request a waiver. 
 
Defeasance
 
The following defeasance provisions will be applicable to the Notes. “Defeasance” means that, by depositing with a trustee an amount of cash and/or government securities sufficient to pay all principal and interest, if any, on the Notes when due and satisfying any additional conditions noted below, we will be deemed to have been discharged from our obligations under the Notes. In the event of a “covenant defeasance,” upon depositing such funds and satisfying similar conditions discussed below we would be released from certain covenants under the Indenture relating to the Notes. The consequences to the holders of the Notes would be that, while they would no longer benefit from certain covenants under the Indenture, and while the Notes could not be accelerated for any reason, the holders of Notes nonetheless would be guaranteed to receive the principal and interest owed to them.
 
Covenant Defeasance
 
Under current U.S. federal income tax law and the Indenture, we can make the deposit described below and be released from some of the restrictive covenants in the Indenture under which the Notes were issued. This is called “covenant defeasance.” In that event, holders of the Notes would lose the protection of those restrictive covenants but would gain the protection of having money and government securities set aside in trust to repay the Notes. In order to achieve covenant defeasance, the following must occur:

•Since the Notes are denominated in U.S. dollars, we must deposit in trust for the benefit of all holders of the Notes a combination of cash and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the Notes on their various due dates;

•we must deliver to the Trustee a legal opinion of our counsel confirming that, under current U.S. federal income tax law, we may make the above deposit without causing holders of the Notes to be taxed on the Notes any differently than if we did not make the deposit;

•we must deliver to the Trustee a legal opinion of our counsel stating that the above deposit does not require registration by us under the 1940 Act, and a legal opinion and officers’ certificate stating that all conditions precedent to covenant defeasance have been complied with;

•defeasance must not result in a breach or violation of, or result in a default under, of the Indenture or any of our other material agreements or instruments;

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•no default or event of default with respect to the Notes shall have occurred and be continuing and no defaults or events of default related to bankruptcy, insolvency, or reorganization shall occur during the next 90 days.
  
If we accomplish covenant defeasance, holders of the Notes can still look to us for repayment of the Notes if there were a shortfall in the trust deposit or the Trustee is prevented from making payment. In fact, if one of the remaining Events of Default occurred (such as our bankruptcy) and the Notes became immediately due and payable, there might be a shortfall. Depending on the event causing the default, holders of the Notes may not be able to obtain payment of the shortfall.
 
Full Defeasance
 
If there is a change in U.S. federal income tax law, as described below, we can legally release ourselves from all payment and other obligations on the Notes (called “full defeasance”) if we put in place the following other arrangements for holders of the Notes to be repaid:
 
•Since the Notes are denominated in U.S. dollars, we must deposit in trust for the benefit of all holders of the Notes a combination of money and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the Notes on their various due dates;

•we must deliver to the Trustee a legal opinion confirming that there has been a change in current U.S. federal income tax law or an Internal Revenue Service ruling that allows us to make the above deposit without causing holders of the Notes to be taxed on the Notes any differently than if we did not make the deposit. Under current U.S. federal income tax law the deposit and our legal release from the Notes would be treated as though we paid holders of the Notes their share of the cash and notes or bonds at the time the cash and notes or bonds were deposited in trust in exchange for the Notes and holders of the Notes would recognize gain or loss on the Notes at the time of the deposit;

•we must deliver to the Trustee a legal opinion of our counsel stating that the above deposit does not require registration by us under the 1940 Act, and a legal opinion and officers’ certificate stating that all conditions precedent to defeasance have been complied with;

•defeasance must not result in a breach or violation of, or constitute a default under, of the Indenture or any of our other material agreements or instruments; and

•no default or event of default with respect to the Notes shall have occurred and be continuing and no defaults or events of default related to bankruptcy, insolvency, or reorganization shall occur during the next 90 days.

   
If we ever did accomplish full defeasance, as described above, holders of the Notes would have to rely solely on the trust deposit for repayment of the Notes. Holders of the Notes could not look to us for repayment in the unlikely event of any shortfall. Conversely, the trust deposit would most likely be protected from claims of our lenders and other creditors if we ever became bankrupt or insolvent. If the Notes were subordinated as described later under “- Indenture Provisions - Ranking,” such subordination would not prevent the Trustee under the Indenture from applying the funds available to it from the deposit referred to in the first bullet of the preceding paragraph to the payment of amounts due in respect of such Notes for the benefit of the subordinated debtholders.

Other Covenants

        In addition to other covenants described in the prospectus relating to the Notes, as well as standard covenants relating to payment of principal and interest, maintaining an office where payments may be made or 
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securities can be surrendered for payment, payment of taxes by the Company and related matters, the following covenants apply to the Notes:

•We agree that for the period of time during which the Notes are outstanding, we will not violate Section 18(a)(1)(A) as modified by Section 61(a) of the 1940 Act or any successor provisions, whether or not we continue to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to us by the SEC. Currently, these provisions generally prohibit us from incurring additional borrowings, including through the issuance of additional debt securities, unless our asset coverage, as defined in the 1940 Act, equals at least 150% after such borrowings. 

•We agree that, for the period of time during which the Notes are outstanding, we will not violate Section 18(a)(1)(B) as modified by (i) Section 61(a) of the 1940 Act or any successor provisions and after giving effect to any exemptive relief granted to us by the SEC and (ii) the two other exceptions set forth below.  These statutory provisions of the 1940 Act are not currently applicable to us.  However, if Section 18(a)(1)(B) as modified by Section 61(a) of the 1940 Act were currently applicable to us, these provisions would generally prohibit us from declaring any cash dividend or distribution upon any class of our capital stock, or purchasing any such capital stock if our asset coverage, as defined in the 1940 Act, were below 150% at the time of the declaration of the dividend or distribution or the purchase and after deducting the amount of such dividend, distribution, or purchase. Under the covenant, we will be permitted to declare a cash dividend or distribution notwithstanding the prohibition contained in Section 18(a)(1)(B) as modified by Section 61(a) of the 1940 Act, but only up to such amount as is necessary for us to maintain our status as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986.  Furthermore, the covenant will not be triggered unless and until such time as our asset coverage has not been in compliance with the minimum asset coverage required by Section 18(a)(1)(B) as modified by Section 61(a) of the 1940 Act (after giving effect to any exemptive relief granted to us by the SEC) for more than six consecutive months.

•If, at any time, we are not subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act to file any periodic reports with the SEC, we agree to furnish to holders of the Notes and the Trustee, for the period of time during which the Notes are outstanding, our audited annual consolidated financial statements, within 90 days of our fiscal year end, and unaudited interim consolidated financial statements, within 45 days of our fiscal quarter end (other than our fourth fiscal quarter). All such financial statements will be prepared, in all material respects, in accordance with applicable U.S. GAAP.
 
Form, Exchange and Transfer of Certificated Registered Securities
 
If registered Notes cease to be issued in book-entry form, they will be issued:
 
•only in fully registered certificated form;

•without interest coupons; and

•unless we indicate otherwise, in denominations of $25 and amounts that are multiples of $25.
 
Holders may exchange their certificated securities for Notes of smaller denominations or combined into fewer Notes of larger denominations, as long as the total principal amount is not changed and as long as the denomination is equal to or greater than $25.
 
Holders may exchange or transfer their certificated securities at the office of the Trustee. We have appointed the Trustee to act as our agent for registering Notes in the names of holders transferring Notes. We may appoint another entity to perform these functions or perform them ourselves.
 
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Holders will not be required to pay a service charge to transfer or exchange their certificated securities, but they may be required to pay any tax or other governmental charge associated with the transfer or exchange. The transfer or exchange will be made only if our transfer agent is satisfied with the holder’s proof of legal ownership.
 
We may appoint additional transfer agents or cancel the appointment of any particular transfer agent. We may also approve a change in the office through which any transfer agent acts.
 
If we redeem any of the Notes, we may block the transfer or exchange of those Notes selected for redemption during the period beginning 15 days before the day we mail the notice of redemption and ending on the day of that mailing, in order to determine and fix the list of holders to prepare the mailing. We may also refuse to register transfers or exchanges of any certificated Notes selected for redemption, except that we will continue to permit transfers and exchanges of the unredeemed portion of any Note that will be partially redeemed.
 
If registered Notes are issued in book-entry form, only the depositary will be entitled to transfer and exchange the Notes as described in this subsection, since it will be the sole holder of the Notes.
 
Resignation of Trustee
 
The Trustee may resign or be removed with respect to the Notes provided that a successor trustee is appointed to act with respect to the Notes. In the event that two or more persons are acting as trustee with respect to different series of indenture securities under the indenture, each of the trustees will be a trustee of a trust separate and apart from the trust administered by any other trustee.
 
Indenture Provisions - Ranking
 
The Notes are designated as senior securities and, therefore, “Senior Indebtedness” under the Indenture. “Senior Indebtedness” is defined in the Indenture as the principal of (and premium, if any) and unpaid interest on:

•our indebtedness (including indebtedness of others guaranteed by us), whenever created, incurred, assumed or guaranteed, for money borrowed, that we have designated as “Senior Indebtedness” for purposes of the Indenture and in accordance with the terms of the Indenture (including any indenture securities designated as Senior Indebtedness), and

•renewals, extensions, modifications and refinancings of any of this indebtedness.
  
As unsecured obligations of the Company designated as Senior Indebtedness under the Indenture, the Notes rank:

•pari passu, or equal, with any of our existing and future unsecured indebtedness;

•senior to any of our future indebtedness that expressly provides it is subordinated to the Notes;

•effectively subordinated to all of our existing and future secured indebtedness (including indebtedness that is initially unsecured to which we subsequently grant security), to the extent of the value of the assets securing such indebtedness, including without limitation, borrowings under our $55.0 million senior secured revolving credit facility with Pacific Western Bank (successor-by-merger to CapitalSource Bank), as agent and a lender, and each of the lenders from time to time party thereto, including City National Bank, of which $43.7 million was outstanding as of December 31, 2019; and

•structurally subordinated to all existing and future indebtedness and other obligations of any of our existing and future subsidiaries.
   
In particular, as designated Senior Indebtedness under the Indenture, the Notes will rank senior to any future securities we issue under the Indenture that are designated as subordinated debt securities. Any such indenture 
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securities designated as subordinated debt securities will be subordinated in right of payment of the principal of (and premium if any) and interest, if any, on such subordinated debt securities to the prior payment in full of the Notes, and all other Senior Indebtedness under the Indenture, upon any distribution of our assets upon our dissolution, winding up, liquidation or reorganization. In addition, no payment on account of principal (or premium, if any), sinking fund or interest, if any, may be made on such subordinated debt securities at any time unless full payment of all amounts due in respect of the principal (and premium, if any), sinking fund and interest on the Notes, and all other Senior Indebtedness, has been made or duly provided for in money or money’s worth.
 
In the event that, notwithstanding the foregoing, any payment by us is received by the Trustee in respect of subordinated debt securities or by the holders of any of such subordinated debt securities, upon our dissolution, winding up, liquidation or reorganization before the Notes, and all other Senior Indebtedness, are paid in full, the payment or distribution must be paid over to the holders of our Senior Indebtedness, including the Notes, or on their behalf for application to the payment of all Senior Indebtedness, including the Notes, remaining unpaid until all Senior Indebtedness, including the Notes, have been paid in full, after giving effect to any concurrent payment or distribution to the holders of our Senior Indebtedness, including the Notes. Subject to the payment in full of the all Senior Indebtedness, including the Notes, upon this distribution by us, the holders of such subordinated debt securities will be subrogated to the rights of the holders of our Senior Indebtedness, including the Notes, to the extent of payments made to the holders of our Senior Indebtedness, including the Notes, out of the distributive share of such subordinated debt securities.
 
By reason of this subordination, in the event of a distribution of our assets upon our insolvency, our Senior Indebtedness, including the Notes, and certain of our senior creditors, may recover more, ratably, than holders of any subordinated debt securities or the holders of any indenture securities that are not Senior Indebtedness. The Indenture provides that these subordination provisions will not apply to money and securities held in trust under the defeasance provisions of the Indenture.

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