AMENDMENT NO. 1 TO THE EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST OF SOUTHWEST GEORGIA FINANCIAL CORPORATION (As Amended and Restated Effective as of January 1, 2005)
Exhibit
99 (d)(1)
AMENDMENT
NO. 1
TO
THE
EMPLOYEE
STOCK OWNERSHIP PLAN AND TRUST OF
(As
Amended and Restated Effective as of January 1, 2005)
This
Amendment entered into this ____ day of ________, 2006, by and between SOUTHWEST
GEORGIA FINANCIAL CORPORATION, a holding company organized under the laws
of the
State of Georgia (the "Company") and SOUTHWEST GEORGIA BANK, a state banking
association, as trustee (the "Trustee");
W
I T N E
S S E T H:
WHEREAS,
the Company maintains the Employee Stock Ownership Plan and Trust of Southwest
Georgia Financial Corporation (the “Plan”) for the benefit of its eligible
employees and their beneficiaries; and
WHEREAS,
the Company desires to amend the Plan to clarify the provisions relating
to
tender offers and to provide for investments in a non-ESOP portion of the
Plan
that is not primarily invested in Employer Stock; and
WHEREAS,
the Company now desires to amend the Plan in accordance with the power of
amendment contained in the Plan effective as of the date the Board approves
the
adoption of this Amendment No. 1;
NOW,
THEREFORE, the Plan is hereby amended as follows:
1.
The
Plan
is hereby amended by deleting the current Section 1.1 in its entirety and
adding
the following new sections to Article I:
“1.1
Account
Balance
- The
amount standing to the credit of a Participant in his Employer Contribution
Account and Non-ESOP Account, which shall at all times be fully
vested.
1.19A
ESOP
Portion of the Plan
- The
portion of the Plan intended to qualify as an employee stock ownership plan
as
defined in Section 4975(e)(7) of the Code consisting of the Employer
Contribution Account under which Employer Contributions are made pursuant
to
Article IV.
1.22A
Non-ESOP
Account
- The
account maintained for a Participant to record the amounts realized pursuant
to
Section 5.16 and adjustments relating thereto.
1.22B
Non-ESOP
Portion of the Plan
- The
portion of the Plan consisting of the Non-ESOP Account which holds the proceeds
of a tender offer, exchange or other sale or disposition of Employer Stock
pursuant to Section 5.16.
1.31A
Valuation
Date
- The
periodic and regularly scheduled date(s) for valuation of the individual
investment funds of the Trust and the respective Non-ESOP Accounts of
Participants.”
2.
The
Plan
is hereby amended by deleting the current Section 4.1 in its entirety and
substituting the following in lieu thereof:
“4.1 Accounts
of Participants
- The
Trustee shall maintain an Employer Contribution Account for each Participant
to
which contributions made under the Plan shall be credited and a Non-ESOP
Account
for each Participant who tenders, exchanges or otherwise sells Employer Stock
pursuant to Section 5.16. The Participant’s Employer Contribution Account may,
if necessary in the view of the Trustee, be subdivided into subaccounts to
reflect allocations of Employer Stock and allocations of non-Employer Stock
assets (“Other Assets”) in each Participant’s Employer Contribution
Account.
The
Participant’s Non-ESOP Account may also be divided into subaccounts as deemed
advisable by the Trustee.”
3.
The
Plan
is hereby amended by adding the words “with respect to his Employer Contribution
Account” to the end of the first sentence of Section 4.5(a).
4.
The
Plan
is hereby amended by adding the following new Section 4.6:
“4.6 Investment
of Non-ESOP Accounts
(a) Non-ESOP
Accounts
- The
ESOP Committee may designate that all or a portion of the Non-ESOP Accounts
be
invested in a collective trust fund or as otherwise permitted in Section
8.2. If
permitted on a nondiscriminatory basis by the ESOP Committee, all or a portion
of the amounts in a Participant's Non-ESOP Account (if any) shall be subject
to
the investment direction of the Participant in accordance with the provisions
of
subsection (b). The amount to be invested at the direction of the Participant
is
referred to as the "Participant Directed Amount."
(b) Investment
Direction -
Any
direction by a Participant of the investment of the amounts credited to him
under the Plan, as described in Section 4.6(a), shall be made in accordance
with
this subsection.
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(i) A
Participant shall direct the investment, or change the direction of the
investment, of his Participant Directed Amount by delivering to the Plan
Administrator a statement on such form, or by following such other procedure,
as
may be prescribed by the Plan Administrator, directing the investment of
his
Participant Directed Amount into any or all of the separate investment options
selected by the ESOP Committee and offered under the Plan. Such statement
must
be submitted within a stated period of time prior to the date for which it
is to
be effective as designated by the Plan Administrator. The Plan Administrator
may
prescribe different periods of time for the initial direction of the Participant
Directed Amount and for subsequent changes of direction. A Participant shall
be
given the opportunity to change the investment direction of his Participant
Directed Amounts pursuant to the uniform and nondiscriminatory procedures
established by the Plan Administrator. Any Participant direction shall remain
in
effect until superseded by a subsequent direction, or until the complete
distribution of a Participant's Non-ESOP Account.
(ii) If
individual direction is permitted, the Trustee shall use its best efforts
to
ensure that each Participant is provided such information and rights to exercise
control over his Non-ESOP Account as required to satisfy all of the conditions
to make the Non-ESOP Portion of the Plan an “ERISA Section 404(c) plan” (within
the meaning of the ERISA 404(c) regulations) and to make each election by
a
Participant subject to the relief provided under ERISA 404(c). The Participant
will have the sole responsibility for the investment of his Participant Directed
Amount among the available investment options and, to the extent permitted
by
law, no Fiduciary or other person will have any liability for any loss or
diminution in value resulting from Participant's exercise of such investment
responsibility. The investment options may be changed, eliminated, or modified
from time to time by the ESOP Committee.”
5.
The
Plan
is hereby amended by deleting the first sentence of Section 5.1 and substituting
the following in lieu thereof:
“A
Participant retiring under the Plan at his Normal Retirement Date shall be
entitled to receive the entire amount of his Account Balance in the Plan
determined, with respect to the ESOP Portion of the Plan, as of the Annual
Valuation Date immediately preceding the payment of such Account, provided
that
the Employer Stock allocated to his Account shall be valued based on the
closing
sales price of the Employer Stock as of the last trading day of the calendar
month immediately preceding the month in which payment commences and, with
respect to the Non-ESOP Portion of the Plan, as of the Valuation Date coincident
with or next preceding the date payment commences.”
6.
The
Plan
is hereby amended by deleting the first sentence of Section 5.2 and substituting
the following in lieu thereof:
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“In
the
event a Participant shall become totally and permanently disabled (as defined
below), he shall be entitled to retire under the Plan for disability and
to
receive the entire amount of his Account Balance in the Plan, with respect
to
the ESOP Portion of the Plan, as of the Annual Valuation Date immediately
preceding the payment of such Account, provided that the Employer Stock
allocated to his Account shall be valued based on the closing sales price
of the
Employer Stock as of the last trading day of the calendar month immediately
preceding the month in which payment commences and, with respect to the Non-ESOP
Portion of the Plan, determined as of the Valuation Date coincident with
or next
preceding the date payment commences.”
7.
The
Plan
is hereby amended by deleting the third sentence of Section 5.3 and substituting
the following in lieu thereof:
“When
such a Participant actually retires, he shall be entitled to receive the
entire
amount of his Account Balance in the Plan determined, with respect to the
ESOP
Portion of the Plan, as of the Annual Valuation Date immediately preceding
the
payment of such Account, provided that the Employer Stock allocated to his
Account shall be valued based on the closing sales price of the Employer
Stock
as of the last trading day of the calendar month immediately preceding the
month
in which payment commences and, with respect to the Non-ESOP Portion of the
Plan, as of the Valuation Date coincident with or next preceding the date
payment commences.”
8.
The
Plan
is hereby amended by deleting the first sentence of Section 5.4 and substituting
the following in lieu thereof:
“In
the
event of the death of a Participant before his retirement hereunder, there
shall
be payable to his Beneficiary the entire interest of the Participant in the
Plan
determined, with respect to the ESOP Portion of the Plan, as of the Annual
Valuation Date immediately preceding the payment of such Account, provided
that
the Employer Stock allocated to his Account shall be valued based on the
closing
sales price of the Employer Stock as of the last trading day of the calendar
month immediately preceding the month in which payment commences and, with
respect to the Non-ESOP Portion of the Plan, as of the Valuation Date coincident
with or next preceding the date payment commences.”
9.
The
Plan
is hereby amended by deleting the last sentence of Section 5.5(a) and
substituting the following in lieu thereof:
4
“His
Account Balance in the Plan shall be determined, with respect to the ESOP
Portion of the Plan, as of the Annual Valuation Date immediately preceding
the
payment of such Account, provided that the Employer Stock allocated to his
Account shall be valued based on the closing sales price of the Employer
Stock
as of the last trading day of the calendar month immediately preceding the
month
in which payment commences and, with respect to the Non-ESOP Portion of the
Plan, as of the Valuation Date coincident with or next preceding the date
payment commences.”
10.
The
Plan
is hereby amended by deleting Section 5.16 in its entirety and substituting
the
following in lieu thereof:
“5.16 Tender
or Exchange Offer for Employer Stock
(a) Tender
Offer
- The
provisions of this Section shall apply in the event any person, including
the
Company, either alone or in conjunction with others, makes a tender offer,
or
exchange offer, or otherwise offers to purchase or solicits an offer to sell
to
such person one percent or more of the outstanding shares of Employer Stock
(herein referred to as a "Tender Offer").
(b) Tender
or Exchange of Allocated Shares
-
Notwithstanding the other provisions of the Plan, in the event of a Tender
Offer
at a time when such Employer Stock is readily tradable on an established
market,
each current or former Participant (or after the death of a former Participant,
his Beneficiary) who has shares of Employer Stock allocated to his Employer
Contribution Account (an “Affected Participant”) shall be given the opportunity
to direct the Trustee confidentially regarding whether to tender, exchange
or
otherwise sell whole shares of Employer Stock allocated to his Employer
Contribution Account in accordance with the provisions, conditions and terms
of
such Tender Offer and the provisions of this Section. If Affected Participants
elect to tender, exchange or sell a greater number of shares of Employer
Stock
than the total number of shares of Employer Stock offered in such Tender
Offer
(referred to as an “Oversubscribed Offer”), the Trustee shall reduce, on a pro
rata basis, the number of shares of Employer Stock that each Affected
Participant agreed to tender or exchange except that Trustee may provide
that
the prorata reduction will not apply, and will be determined without regard
to,
Affected Participants whose allocated shares of Employer Stock do not exceed
a
prescribed amount. Each direction to tender, exchange or otherwise sell shares
of Employer Stock shall be deemed an agreement to have such number of shares
reduced on a pro rata basis in the event of an Oversubscribed Offer, to the
extent determined by the Trustee.
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(c) Required
Forms and Instructions
- As
promptly as practicable after a Tender Offer is made, the Trustee shall send
to
all Affected Participants such materials and forms for responding as are
appropriate to determine the direction of each Affected Participant. Any
form
for responding shall prominently note that failure by an Affected Participant
to
return such form within a specified reasonable period of time shall be deemed
a
direction to the Trustee not to tender, exchange or otherwise sell the whole
shares of Employer Stock allocated to the Employer Contribution Account of
such
Affected Participant. The Participant shall convey his instructions in
confidence in writing to the ESOP Committee, which shall then convey such
instructions to the Trustee. In the absence of an ESOP Committee, such
instructions shall be conveyed directly to the Trustee. In carrying out the
steps necessary to determine the directions of Affected Participants under
this
Section, the Trustee shall adopt such means as it deems appropriate to provide
Affected Participants with the opportunity to indicate their directions in
a
confidential manner, i.e., without the disclosure of any Affected Participant’s
individual decision to the public or the Company.
(d) Disposition
of Allocated Employer Stock
- As
promptly as practicable after receiving an Affected Participant’s response form
which directs it to tender, exchange or otherwise sell his whole shares of
allocated Employer Stock, the Trustee shall carry out the tender, exchange
or
sale of such shares; provided, however, that the Trustee shall have the right
to
change or to modify its actions hereunder to comply with the terms of any
valid
order of a court of competent jurisdiction directing it to take certain actions
inconsistent with the requirements of this Section. The proceeds of a
disposition directed by an Affected Participant shall be allocated to the
Non-ESOP Account of each such Affected Participant.
(e) Fractional
Shares
- The
Trustee shall determine the total number of whole shares it was directed
to
tender, exchange or sell, and the total number of whole shares it was directed
not to tender, exchange or sell (either expressly or by failure to timely
respond). If the majority of the allocated whole shares of Employer Stock
were
directed to be tendered, exchanged or sold, then the Trustee shall also tender,
exchange, or sell, as promptly as practicable, any allocated fractional shares
which are held in the Trust. However, if the majority of the allocated whole
shares of Employer Stock were not directed to be tendered, exchanged or sold,
the Trustee shall not tender, exchange or sell any such allocated fractional
shares unless otherwise directed by the ESOP Committee.
(f) Unallocated
Shares
- In the
case of shares of Employer Stock that have not been allocated to the Employer
Contribution Accounts, the ESOP Committee shall convey tender or exchange
instructions to the Trustee with respect to such unallocated shares, which
instructions shall direct that the Trustee tender or exchange such shares
in the
same proportion as Participants direct the tender or exchange of shares of
Employer Stock allocated to their Employer Contribution Accounts, treating
for
this purpose the failure of a Participant to instruct or validly instruct
the
ESOP Committee or Trustee as a decision not to tender or exchange.”
11.
The
Plan
is hereby amended by deleting Section 8.2 in its entirety and substituting
the
following in lieu thereof:
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“8.2 Investment
of Trust Fund
(a) The
ESOP
Portion of the Plan is designed to be an employee stock ownership plan as
defined in Section 4975(e)(7) of the Code and regulations thereunder. Therefore,
the ESOP Portion of the Plan shall be invested primarily in Employer Stock.
The
ESOP Committee shall direct the Trustee in writing as to all purchases and
sales
of Employer Stock by the Plan. Shares of Employer Stock may be purchased
in the
open market, from the Company or affiliates of the Company, or through privately
negotiated transactions, at prices not in excess of the fair market value
of the
Employer Stock on the date of the purchase, as long as such purchases are
permitted by applicable law. The Trustee may suspend purchases of Employer
Stock
in circumstances which, in the opinion of counsel for the Trustee, such
suspension is necessary to comply with rules and regulations of the Securities
and Exchange Commission, in which event such purchases will be made or resumed
as or when the Trustee is satisfied that such purchases are permitted under
such
rules and regulations.
(b) To
the
extent the Trustee does not receive such written direction from the Plan
Administrator and to the extent the Trust Fund is not invested in Employer
Stock, the funds of the Trust may be invested in stocks, common or preferred,
trust shares, mutual fund shares, annuity contracts and insurance policies
(including specifically “key man” insurance on any key employee of the Employer)
bonds and mortgages and other evidences of indebtedness or ownership, master
variable notes, commercial paper, repurchase agreements issued by persons
other
than the Trustee which are secured by obligations of the U.S. Treasury or
agencies or instrumentalities of the United States (except as any such
investment may be limited hereunder or under the provisions of ERISA), and,
consistently with Code Section 4975(d)(4), any deposits with Southwest Georgia
Bank or an affiliated state or federally supervised bank, including certificates
of deposits or savings certificates, and in any common trust fund or commingled
trust fund maintained by the Trustee for the investment of qualified employee
benefit trusts; provided, however, the Trustee or Investment Manager, as
the
case may be, shall be subject to the principal requirements that the ESOP
Portion of the Plan is to be invested primarily in Employer Stock and that
the
investments of the other assets of the Plan shall be diversified to the extent
necessary to minimize the risk of large losses, unless under the circumstances
it is clearly prudent not to do so. For purposes of the restrictions on
investment in and holding of Employer Stock, the Trustee (and any Investment
Manager) shall be permitted to invest in and hold such securities having
an
aggregate fair market value up to 100% of the fair market value of the Trust
Fund’s assets with respect to the ESOP Portion of the Plan.
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(c) If
the
Plan Administrator directs the Trustee to dispose of shares of Employer Stock
under circumstances which would, in the opinion of counsel for the Trustee,
require registration of such shares under the Securities Act of 1933 and/or
qualification of the shares under the blue sky laws of any state or states,
then
the Trustee shall not be required to proceed with such disposition of the
shares
unless the Employer takes any and all actions as may be deemed necessary
to
effect such registration and/or qualification. The costs of such registration
and/or qualification shall be borne by the Employer.
(d) The
Trustee may cause any investment in securities held by the Trustee to be
registered in or transferred into its name as Trustee or into the name of
such
nominee as it may appoint, or it may retain the same unregistered and in
such
form as shall permit transferability, but the books and records of the Trust
Fund shall at all times show that all such investments are part of the Trust
Fund.
(e) The
ESOP
Committee shall establish the general investment policy and objectives for
the
Trust Fund and shall communicate same to the Trustee and any Investment Manager
who may then be serving as such, as promptly as practicable after establishing
or revising same. It shall be the responsibility of the Trustee and any such
Investment Manager to advise the Company, in writing, at reasonable intervals
and at such other times as the Company shall request of all investments and
reinvestments of the Trust Fund made in furtherance of such investment policy
and objectives.
(f) The
Non-ESOP Portion of the Plan shall be invested in various investment options
according to the investment directions of Participants or as otherwise directed
by the ESOP Committee. If Participants may direct the investments, the Plan
Administrator shall communicate the Participants' investment directions to
the
Trustee who shall invest amounts credited to such accounts in accordance
with
Participants' directions. The Participant Directed Amount shall not share
in
general Trust Fund earnings, but it shall be charged or credited as appropriate
with the net earnings, gains, losses and expenses as well as any appreciation
or
depreciation in market value attributable to such account.
(g)` Notwithstanding
the foregoing provisions of this Section 8.2, the investment of Trust Fund
assets shall be subject to the provisions of Article IV of the Plan.”
12.
This
Amendment No. 1 to the Plan shall be effective as of the date approved by
the
Board. Except as hereby modified, the Plan shall remain in full force and
effect.
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IN
WITNESS WHEREOF, the Company has caused this Amendment No.1 to be executed
by
its duly authorized corporate officers, and the Trustee has executed same
and
thereby accepted the foregoing as of the effective date hereof.
|
COMPANY:
By:
_____________________________________
Title:
____________________________________
TRUSTEE:
SOUTHWEST
GEORGIA BANK
By:
______________________________________
Title:
____________________________________
|
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