EXHIBIT 10.12
AMENDMENT EIGHT TO
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RETIREMENT PLAN FOR EMPLOYEES OF
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CAPITAL SOUTHWEST CORPORATION AND ITS AFFILIATES
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As Amended and Restated Effective April 1, 1989
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WHEREAS, effective as of April 1, 1989, the Retirement Plan for
Employees of Capital Southwest Corporation and Its Affiliates (the "Plan") was
amended and restated in its entirety;
WHEREAS, by the terms of Section 6.4 of the Plan, the Plan may be
amended; and
WHEREAS, it is desirable that the Plan be amended to provide for
retroactive annuity starting dates under certain circumstances and to provide a
temporary interest rate for purposes of applying benefit limitations under
section 415 of the Internal Revenue Code;
NOW, THEREFORE, the Plan is hereby amended, effective as of April 1,
2004, as follows:
1. Section 4.1(A)(2) of the Plan is amended to add the following
paragraph at the end thereof:
"Notwithstanding the foregoing provisions of this Section 4.1(A)(2),
for Plan Years beginning in 2004 and 2005 the interest rate of 5.5% shall be
substituted for the annual rate of interest on 30-year Treasury securities for
purposes of this Section 4.1(A), except that in the case of any Participant or
Beneficiary receiving a distribution after December 31, 2003 and before January
1, 2005, the amount payable under any form of benefit subject to Section
417(e)(3) of the Internal Revenue Code and subject to adjustment under Section
415(b)(2)(B) of the Internal Revenue Code shall not, solely by reason of the
interest rate substitution described above, be less than the amount that would
have been so payable had the amount payable been determined using the annual
rate of interest on 30-year Treasury securities described above in this Section
4.1(A)(2) in effect as of the last day of the last Plan Year beginning before
January 1, 2004."
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2. Section 4.1(C) of the Plan is amended to read in its entirety as
follows:
"(C) Requirement With Respect to Form of Payment: The Committee shall
provide each Participant, during the period beginning 90 days before his Annuity
Starting Date and ending 30 days before his Annuity Starting Date (or as soon
after the expiration of such period as is administratively practicable), a
written notification of his optional forms of payment. Such written notification
shall set forth an explanation of:
(1) if the Participant is married:
(a) the terms and conditions of the Qualified
Joint and 50% Survivor Annuity form of
payment;
(b) the Participant's right to elect, and the
effect of electing, to waive the Qualified
Joint and 50% Survivor Annuity form of
payment;
(c) the rights of the Participant's spouse; and
(d) the right to revoke, and the effect of
revoking, an election to waive the Qualified
Joint and 50% Survivor Annuity form of
payment;
(2) the eligibility conditions and material features of
the optional forms of payment available under the
Plan;
(3) the financial effect of electing each optional form
of payment;
(4) in the event the notification described herein is
required and is provided to the Participant after his
Annuity Starting Date, the Participant's right to
elect a retroactive Annuity Starting Date; and
(5) such other information as may be required under
applicable regulations.
The written notification described above shall not be required if the single-sum
value of the Participant's retirement income is less than or equal to $5,000.
In the event the written notification described above is required and
is provided to the Participant after the Participant's Annuity Starting Date,
the Participant's Annuity Starting Date shall be deemed to be his 'retroactive
Annuity Starting Date,' and the provisions of Section 4.1(J) shall apply.
Any provisions of Section 2.1, 2.2, 2.3, 2.4(A) or 3.1 hereof to the
contrary notwithstanding, if a Participant does not elect, in writing filed with
the Committee during the election period described below, to receive the
retirement income payable on his behalf on and after his Annuity Starting Date
either (i) under the form of payment that is specified in Section 2.1(C),
2.2(C), 2.3(F) or 2.4(A)(2), whichever is applicable, or (ii) under an optional
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form of payment described in and subject to the provisions of Section 3.1
hereof, such Participant shall be deemed to have elected, and the retirement
income payable on and after his Annuity Starting Date shall automatically be
paid in accordance with the provisions of, either:
(1) if he does not have a spouse at his Annuity
Starting Date, the form of payment that is specified in
Section 2.1(C), 2.2(C), 2.3(F) or 2.4(A)(2), whichever is
applicable; or
(2) if he has a spouse at his Annuity Starting Date,
the Qualified Joint and 50% Survivor Annuity Option.
Any Participant may make an election under this section at any time (and any
number of times) prior to the commencement of his retirement income or other
benefit payments and during the period beginning on the date which is 90 days
prior to his Annuity Starting Date and ending on the latest to occur of (i) his
Annuity Starting Date, (ii) the date which is 90 days after the date on which he
was provided with the general written explanation described above or (iii) the
date which is 90 days after the date on which he was provided with any specific
detailed information concerning the payment of his retirement income that is
required to be furnished due to the request of the Participant. If any such
Participant does not file his election with the Committee prior to the
expiration of the election period described above, the commencement of his
retirement income will be delayed until the end of such election period, but he
will be entitled to a retroactive payment with respect to those retirement
income payments which were delayed. If any Participant has elected a form of
payment other than the automatic form provided above and his retirement income
or other benefit payments have not commenced, he may subsequently revoke such
election, in writing filed with the Committee within the election period
described above, in order to receive his retirement income payable in accordance
with the automatic form provided above. Any provisions of Section 3.1 hereof to
the contrary notwithstanding, if any Participant is not provided with the
written notification described in the first sentence of this section at least 30
days before his Annuity Starting Date but is provided in the written
notification a period of at least 30 days in which to make his election under
this section, he may waive such notice period (with any applicable spousal
consent) and file his election with the Committee, and his retirement income or
other benefit may commence within 30 days after the date on which he was
provided with such written notification, but more than 7 days after such date.
Any provisions herein to the contrary notwithstanding, the written consent of
the Participant's spouse during the applicable election period shall be required
in order for the Participant to receive his retirement income in a form other
than that provided under a Qualified Joint and Survivor Annuity."
3. Section 4.1 of the Plan is amended to add at the end thereof a new
Subsection (J), which shall read as follows:
"(J) Provisions Concerning Retroactive Annuity Starting Dates:
Notwithstanding any provision hereof to the contrary, in the event that the
written notification described in Section 4.1(C) is required and is provided to
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the Participant after the Participant's Annuity Starting Date, the Participant's
Annuity Starting Date shall be deemed to be his 'retroactive Annuity Starting
Date' and payment of the Participant's retirement income under Section 2.1, 2.2,
2.3, 2.4(A) or 3.1 hereof shall be made or commence in accordance with Section
417(a) of the Internal Revenue Code, and regulations and rulings issued pursuant
thereto, and the following provisions of this Section 4.1(J).
(1) Notification requirement: In the event of a retroactive
Annuity Starting Date, the written notification to the Participant required by
Section 4.1(C) shall set forth the information described in Section 4.1(C) both
as of his retroactive Annuity Starting Date and as of a date which is not more
than 90 days after the date on which such written notification is provided to
the Participant.
(2) Election of retroactive Annuity Starting Date: In the
event of a retroactive Annuity Starting Date, the Participant's retirement
income shall be determined and payable as of a date which is not more than 90
days after the date on which the written notification required by Section 4.1(C)
is provided to the Participant, unless the Participant elects to have such
retirement income determined and payable as of such retroactive Annuity Starting
Date. The Participant may make such election on the appropriate form provided by
the Committee and filed with the Committee within the election period described
in Section 4.1(C).
(3) Spousal consent requirement: In the event that (a) a
Participant elects to receive his retirement income under Section 2.1, 2.2, 2.3,
2.4(A), or 3.1 hereof determined as of a retroactive Annuity Starting Date, and
(b) under the form of payment elected by such Participant, the benefit payable
to the Participant's spouse upon the Participant's death would be less than the
benefit payable to such surviving spouse after the Participant's death if the
Participant had elected to receive a Qualified Joint and 50% Survivor Annuity
determined and payable as of the date on which his retirement income payments
actually commence, then the Participant's spouse must consent in writing to the
Participant's election of such retroactive Annuity Starting Date. Such spousal
consent requirement shall be satisfied if the Participant's spouse consents in
the manner provided in Section 4.1(C) to the Participant's election to receive
his retirement income in a form other than that provided under a Qualified Joint
and Survivor Annuity.
(4) Make-up payments with interest: In the event that a
Participant elects (with spousal consent, if applicable) to receive his
retirement income under Section 2.1, 2.2, 2.3, 2.4(A), or 3.1 hereof determined
as of a retroactive Annuity Starting Date, the Participant shall receive a
make-up payment to reflect any missed payment or payments for the period from
the retroactive Annuity Starting Date to the date of the actual make-up payment,
with an appropriate adjustment for interest from the date the missed payment or
payments would have been made (including, if applicable, a payment of the
single-sum value of the Participant's retirement income) to the date of the
actual make-up payment.
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(5) Future payment amount: If the Participant elects (with
spousal consent, if applicable) to receive his retirement income determined as
of a retroactive Annuity Starting Date and the Participant receives his
retirement income in a form other than a single-sum payment, the retirement
income payments that commence after he has received the notification required by
Section 4.1(C), other than any required make-up payment, shall be in an amount
that is equal to the amount that would have been paid to the Participant had
payments actually commenced on his retroactive Annuity Starting Date.
(6) Section 415 compliance: Except in the case where payment
of the Participant's retirement income (other than a form of payment that is
subject to Section 417(e) of the Internal Revenue Code, including lump-sum
distributions and other forms of distribution that provide payments in the form
of a decreasing annuity or for a period less than the life of the recipient)
commences no more than 12 months after the retroactive Annuity Starting Date,
payment of the Participant's retirement income, including any interest
adjustments, shall satisfy the requirements of Section 415 of the Internal
Revenue Code if the date retirement income payments actually commence is
substituted for the retroactive Annuity Starting Date for all purposes,
including for purposes of determining the applicable interest rate and the
applicable mortality table described in Section 4.1(A)(2) hereof.
(7) Section 417(e) compliance: If the retirement income
received by the Participant is in a form of payment that would have been subject
to Section 417(e) of the Internal Revenue Code if payment had commenced as of
the retroactive Annuity Starting Date, then the amount of payment as of the
actual commencement date shall be no less than the amount of payment produced by
applying the applicable interest rate and the applicable mortality table
(described in Section 4.1(A)(2) hereof), determined as of the date payment
actually commences, to the annuity form that was used to determine the amount of
retirement income as of the Participant's retroactive Annuity Starting Date."
IN WITNESS WHEREOF, CAPITAL SOUTHWEST CORPORATION has caused this
instrument to be executed by its duly authorized officer on this ____ day of
______________, 2004.
CAPITAL SOUTHWEST CORPORATION
By __________________________
Title: ______________________