Exhibit 10.1


 


AMENDMENT NUMBER EIGHTEEN

TO

TEXAS REGIONAL BANCSHARES, INC.

AMENDED AND RESTATED EMPLOYEE STOCK OWNERSHIP PLAN

(WITH 401(K) PROVISIONS)


 


Texas Regional Bancshares, Inc., a
corporation organized and operating under the laws of the State of Texas, and
registered as a bank holding company under the Bank Holding Company Act of
1956, as amended (the “Company”), together with Texas State Bank, a Texas state
banking association; TSB Securities, Inc., Port Arthur Abstract and Title Company, Southeast
Texas Title Company, and Valley Mortgage Company, Inc., all Texas
corporations; and Southeast Texas Insurance Services, L.P., a Texas limited
partnership of which Southeast Texas Insurance Services Holdings, LLC is the
general partner (collectively, the “Participating Employers”); and the Trustees
and the Administrative Committee members of the Texas Regional Bancshares, Inc.
Amended and Restated Employee Stock Ownership Plan (with 401(k) Provisions)
adopt the following amendments to the Plan generally effective as of May 1, 2005.


 


WHEREAS, the Company has established and
maintains the Texas Regional Bancshares, Inc. Amended and Restated Employee
Stock Ownership Plan (with 401(k) Provisions) (the “Plan”); and


 


WHEREAS, the Company and the Participating
Employers desire to amend the Plan to add in-kind distributions of Participants’
account balances in circumstances where such distributions are feasible and to
simplify certain other Plan provisions; and


 


WHEREAS, under Section 2.2 of the Plan, the
Plan Administrator is the Company unless another person or entity has been
appointed pursuant to Section 3.2 of the Plan as Plan Administrator; and


 


WHEREAS, the Company and the Participating
Employers desire to appoint the Plan’s existing Administrative Committee as the
Plan Administrator under ERISA; and


 


WHEREAS, the Participating Employers have
joined in the Plan for the purpose of providing benefits under the Plan to
their eligible employees; and


 


WHEREAS, pursuant to Section 10.1 of the
Plan, the Company has the right to amend the Plan, provided that the Trustees
join in such Amendment if the provisions of the Plan affecting the Trustees are
amended; and


 


WHEREAS, pursuant to Section 13.6 of the
Plan, the Company has the right to amend the Plan, provided that the
Participating Employers join in such Amendment; and


 


WHEREAS, the Company and the Participating Employers
desire to amend the Plan to document the effective date of each Participating
Employer’s adoption of the Plan and to authorize the Company to adopt future
amendments, to appoint fiduciaries, and to take other actions with respect to
the Plan, all without the joinder of the
Participating Employers.


 


NOW, THEREFORE, IT IS HEREBY RESOLVED THAT the
Plan is amended effective May 1, 2005, except as specifically provided below, as
follows:


 


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1.                                      Plan Section 2.20
is amended and restated in its entirety to read as follows:


 


2.20                           “Employer”
means Texas Regional Bancshares, Inc. and any successor which shall maintain
this Plan; and any predecessor which has maintained this Plan.  In addition, where appropriate, the term
Employer shall include any Participating Employer (as defined in Section 13.1)
which shall adopt this Plan.  For
purposes of Article IX, TRUSTEE, and Sections 10.1 and 10.2, relating to the
Employer’s authority to amend or terminate the Plan, however, the term “Employer”
shall mean only Texas Regional Bancshares, Inc., which shall act under those
provisions without the need to consult any Participating Employer.


 


2.                                      Plan Section
2.30 is amended and restated in its entirety, effective January 1, 2004, to
read as follows:


 


2.30                           “Forfeiture”
means that portion of a Participant’s Account that is not Vested.  A Forfeiture occurs
on the earlier of:


 


(a)                                  the distribution of the entire Vested portion of the
Participant’s Account of a Former Participant who has severed employment with
the Employer.  For purposes of this
provision, if the Former Participant has a Vested benefit of zero, then such
Former Participant shall be deemed to have received a distribution of such
Vested benefit as of the year in which the severance of employment occurs, or


 


(b)                                 the last day of the Plan Year in which a Former Participant
who has severed employment with the Employer incurs five (5) consecutive 1-Year
Breaks in Service.


 


3.                                      Plan Section 2.55
is amended and restated in its entirety to read as follows:


 


2.55                           “Participant’s
Transfer/Rollover Account” means the account established and maintained by the
Administrator for each Participant with respect to the Participant’s total
interest in the Plan resulting from amounts transferred to this Plan from a
direct plan-to-plan transfer and/or with respect to such Participant’s interest
in the Plan resulting from amounts transferred from another qualified plan or “conduit”
Individual Retirement Account in accordance with Section 5.11.


 


A separate accounting shall be maintained with respect to that portion
of the Participant’s Transfer/Rollover Account attributable to transfers
(within the meaning of Code Section 414(1)) and “rollovers.”


 


A Participant’s Transfer/Rollover Account shall include Bank of Texas
Transfer/Rollover Accounts, Harlingen National Bank Transfer/Rollover Accounts,
Riverway Bank Transfer/Rollover Accounts, Texas
Country Bank Transfer/Rollover Accounts, First State Bank, Bishop
Transfer/Rollover Accounts, all of which are fully vested, and any other such
accounts resulting from mergers of other plans into this Plan.


 


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4.                                      Plan
Section 4.7 is amended and restated in its entirety effective January 1, 2005, to
read as follows:


 


4.7                                 REHIRED EMPLOYEES AND BREAKS IN
SERVICE


 


(a)                                  Participation.


 


(1)                                  A
Former Participant shall participate in the Plan as of the date of
reemployment.


 


(2)                                  A
rehired Eligible Employee who had fulfilled the requirements of Section 4.1 for
participation in salary reduction elections and Employer Discretionary Matching
Contributions prior to severance from employment may participate in such
contributions immediately upon reemployment unless the Employee has incurred a
1-Year Break in Service.  If a 1-Year
Break in Service was incurred, the Employee’s prior service will be disregarded
for eligibility purposes, and the Eligible Employee shall be treated as a new employee.


 


(3)                                  A
rehired Eligible Employee who had fulfilled the requirements of Section 4.1 for
participation in Employer Discretionary Optional Contributions prior to
severance from employment, but who had not reached his or her effective date of
participation under Section 4.2 shall participate in such those contributions as
described in Section 4.2 unless the Employee has incurred a 1-Year Break in
Service.  If a 1-Year Break in Service
was incurred, the Employee’s prior service will be disregarded for eligibility
purposes, and the Eligible Employee shall be treated as a new employee.


 


(4)                                  A
rehired Eligible Employee who had not fulfilled the requirements of Section 4.1
for participation in salary reduction elections and Employer Discretionary
Matching Contributions prior to severance from employment shall continue to
earn Years of Service for eligibility purposes upon reemployment unless the
Employee has incurred a 1-Year Break in Service.  If a 1-Year Break in Service was incurred,
the Employee’s prior service will be disregarded for eligibility purposes, and
the Eligible Employee shall be treated as a new employee for purposes of such
contributions.


 


(5)                                  A
rehired Eligible Employee who had not fulfilled the requirements of Section 4.1
for participation in Employer Discretionary Optional Contributions prior to
severance from employment shall continue to earn Years of Service for
eligibility purposes upon reemployment unless the Employee has incurred a
1-Year Break in Service.  If a 1-Year
Break in Service was incurred, the Employee’s prior service will be disregarded
for eligibility purposes, and the Eligible Employee shall be treated as a new
employee for purposes of such contributions.


 


(b)                                 Vesting.  All Years of Service, as defined for vesting
purposes under Section 2.76, shall be credited for all Accounts under the Plan
except as specifically provided below for a Former Participant who is partially
vested in any pre-break Account that is subject to vesting under the Plan.


 


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(1)                                  After
a partially Vested Former Participant incurs five consecutive 1-Year Breaks in
Service, the Vested portion of said Former Participant’s Account attributable
to pre-break service shall not be increased as a result of post-break service,
nor shall the Participant’s Account attributable to post-break service be
increased as a result of pre-break service. 
In such case, separate accounts will be maintained as follows:


 


(i)                                     one account for nonforfeitable
benefits attributable to pre-break service; and


 


(ii)                                  one account representing the Participant’s Employer- derived
account balance in the Plan attributable to post-break service.


 


(2)                                  If
a partially Vested Participant becomes a Former Participant due to severance of
employment with the Employer and is reemployed by the Employer before five
consecutive 1-Year Breaks in Service, and such Former Participant had received
a distribution of his or her entire Vested interest prior to reemployment, then
the forfeited account shall be reinstated only if the Former Participant repays
the full amount which had been distributed. 
Such repayment must be made before the earlier of five years after the
first date on which the Participant is subsequently reemployed by the Employer
or the close of the first period of five consecutive 1-Year
Breaks in Service commencing after the distribution.  If a distribution occurs for any reason other
than a severance of employment, the time for repayment may not end earlier than
five years after the date of distribution. 
If the Former Participant does repay the full amount distributed, the
forfeited portion of the Participant’s Account must be restored in full,
unadjusted by any gains or losses occurring subsequent to the Valuation Date
preceding the distribution.  The source
for such reinstatement may be Forfeitures occurring during the Plan Year.  If such source is insufficient, then the
Employer will contribute an amount which is sufficient to restore any such
forfeited Accounts, provided, however, that if a discretionary contribution is
made for such year, such contribution shall first be applied to restore any
such Accounts and the remainder shall be allocated in accordance with Section
4.4.


 


5.                                      Plan Subsection
5.11(a), relating to rollovers and transfers from other plans, is amended and
restated in its entirety to read as follows:


 


(a)                                  With
the consent of the Administrator, amounts may be transferred (within the
meaning of Code Section 414(l)) to this Plan from other tax qualified plans
under Code Section 401(a) by Eligible Employees, provided that the trust from
which such funds are transferred permits the transfer to be made and the
transfer will not jeopardize the tax exempt status of the Plan or Trust or
create adverse tax consequences for the Employer. Prior to accepting any
transfers to which this Section applies, the Administrator may require an
opinion of counsel that the amounts to be transferred meet the requirements of
this Section.  The amounts transferred
shall be set up in a separate account herein referred to as a Participant’s
Transfer/Rollover Account. Furthermore, unless a Participant is fully vested in
the amounts transferred, for vesting purposes, the Participant’s portion of the
Participant’s Transfer/Rollover Account attributable to any transfer shall be
subject to Section 8.4(b).


 


Except
as permitted by Regulations (including Regulation 1.411(d)-4), amounts
attributable to elective contributions (as defined in Regulation 1.401(k)-1(g)(3)), including amounts treated as elective contributions, which
are transferred from another qualified plan in a


 


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plan-to-plan
transfer (other than a direct rollover) shall be subject to the distribution
limitations provided for in Regulation 1.401(k)-1(d).


 


6.                                      Plan Subsection
5.12(a), relating to participant-directed investments, is amended and restated
in its entirety to read as follows:


 


(a)                                  Effective
as of December 1, 2001, Participants may, subject to Section 5.12(d) and a
procedure established by the Administrator (the Participant Direction
Procedures) and applied in a uniform nondiscriminatory manner, direct the
Trustee, in writing (or in such other form which is acceptable to the Trustee),
to invest all or a portion of their individual account balances attributable to
their Deferred Compensation in specific assets, specific funds or other
investments permitted under the Plan and the Participant Direction Procedures.


 


Effective
as of January 1, 2002, Participants may, subject to the Participant Direction
Procedures, direct the Trustee, in writing (or in such other form which is
acceptable to the Trustee), to invest all or a portion of their individual
account balances attributable to their Participant’s Transfer/Rollover Accounts
in specific assets, specific funds or other investments permitted under the
Plan and the Participant Direction Procedures.


 


That
portion of the interest of any Participant so directing will thereupon be
considered a Participant’s Directed Account.


 


7.                                      Plan Subsection
5.12(d), relating to the Plan’s means of distribution, is amended and restated
in its entirety to read as follows:


 


(d)                                 Each
“Qualified Participant” may elect within ninety (90) days after the close of
each Plan Year during the “Qualified Election Period” to direct the Trustee in
writing to invest twenty-five percent (25%) of the total number of shares of
Company Stock acquired by or contributed to the Plan that have ever been
allocated to such “Qualified Participant’s” Company Stock Account, excluding
any portion of said Company Stock Account attributable to Elective
Contributions or to the Participant’s Transfer/Rollover Account (reduced by the
number of shares of Company Stock previously diversified or distributed, pursuant
to a prior election, in cash, in mutual fund interests as permitted by Section
8.6(a), and/or in Company Stock) in the specific assets, specific funds or
other investments permitted under the Plan, which investment options shall
consist of at least three (3) investment options not inconsistent with any Regulations
promulgated by the Secretary of the Treasury. 
The Trustee shall invest the portion of the “Qualified Participant’s”
Company Stock that is subject to the diversification election within ninety
(90) days after the period during which the Participant’s election may be
made.  In the case of the election year
in which the last election can be made by the Participant, the preceding
sentence shall be applied by substituting “50 percent” for “25 percent.”  If the “Qualified Participant” elects to
direct the Trustee as to the distribution of the Participant’s Company Stock
Account, such direction shall be effective no later than 180 days after the
close of the Plan Year to which such direction applies.


 


Notwithstanding
the above, if the fair market value (determined pursuant to Section 6.1 at the
Plan Valuation Date immediately preceding the first day on which a “Qualified
Participant” is eligible to make an election) of Company Stock acquired by or
contributed to the


 


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Plan and allocated to a “Qualified
Participant’s” Company Stock Account is $500 or less, then such Company Stock
shall not be subject to this paragraph. 
For purposes of determining whether the fair market value exceeds $500,
Company Stock held in accounts of all employee stock ownership plans (as
defined in Code Section 4975(e)(7)) and tax credit employee stock ownership
plans (as defined in Code Section 409(a)) maintained by the Employer or any
Affiliated Employer shall be considered as held by the Plan.


 


8.                                      Plan Subsection
8.5(a), relating to lump-sum distributions, is amended and restated in its
entirety effective January 1, 2004, to read as follows:


 


(a)                                  The
Administrator, pursuant to the election of the Participant, shall direct the
Trustee to distribute to a Participant or such Participant’s Beneficiary any
amount to which the Participant is entitled under the Plan in one lump-sum
payment or in partial lump-sum payments, each less than the entire remaining
Participant’s Combined Account.


 


9.                                      Plan Subsection
8.5(j), relating to Bank of Texas Transfer/Rollover Accounts, is deleted.


 


10.                               Plan Subsection 8.6(a), relating
to the Plan’s means of distribution, is amended and restated in its entirety to
read as follows:


 


(a)                                  Distribution
of a Participant’s benefit may be made in cash or Company Stock, or both, provided, however, that if a Participant or
Beneficiary so demands, such benefit shall be distributed only in the form of
Company Stock.  Prior to making a
distribution of benefits, the Administrator shall advise the Participant or the
Participant’s Beneficiary, in writing (or such other form as permitted by the
Internal Revenue Service), of the right to demand that benefits be distributed
solely in Company Stock.  In addition, a
Participant may elect distribution of interests in mutual funds to the extent that
such mutual fund interests are allocated to the Participant’s Combined Account
at the time of distribution, provided that the distributee
of such interests in mutual funds is capable of holding such interests.


 


11.                             Plan Subsection 8.6(d), relating
to the Plan’s means of distribution, is amended and restated in its entirety to
read as follows:


 


(d)                                 Notwithstanding
anything contained herein to the contrary, if the Employer charter or by-laws
restrict ownership of substantially all shares of Company Stock to Employees
and the Trust Fund, as described in Code Section 409(h)(2)(B)(ii)(I),
the Administrator shall distribute a Participant’s Combined Account entirely in
cash and/or mutual fund interests as described in Section 8.6(a) without
granting the Participant the right to demand distribution in shares of Company
Stock.


 


12.                               Plan Subsection 8.6(f)(first
paragraph only), relating to accounts that are subject to the annuity
distribution rules, is amended and restated in its entirety effective January 1,
2003, to read as follows:


 


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(f)                                    Notwithstanding
anything contained herein to the contrary, this Section 8.6(f) shall apply with
respect to any Participant’s Target Benefit Capital Accumulation.


 


13.                               Plan Subparagraph 8.6(f)(1)(i), relating to the Qualified
Joint and Survivor Annuity, is amended and restated in its entirety to
read as follows:


 


(i)                                     General.  Unless otherwise elected as provided below,
the Participant’s Target Benefit Capital Accumulation (less amounts
attributable to Employee contributions within the meaning of Code Section
72(o)) of a Participant who is married on the Annuity Starting Date and who
does not die before the Annuity Starting Date shall be paid in the form of a
Qualified Joint and Survivor Annuity.  If
said Participant has elected a life annuity option under this Plan, the vested
portion of the Participant’s Combined Account shall be paid in the form of a
Qualified Joint and Survivor Annuity, unless otherwise elected as provided
below.


 


An
unmarried Participant shall receive the value of his benefit in the form of a
life annuity.  Such unmarried
Participant, however, may elect in writing to waive the life annuity.  The election must comply with the provisions
of Section 8.6(f)(1)(ii) of this Plan as if it were an
election to waive the Qualified Joint and Survivor Annuity by a married
Participant, but without the spousal consent requirement.


 


The
Participant may elect to have any annuity provided for in this Section
distributed upon the attainment of the “earliest retirement age” under the
Plan.  The “earliest retirement age” is
the earliest date on which, under the Plan, the Participant could elect to
receive retirement benefits.


 


14.                               Plan Subparagraph 8.6(f)(2)(i), relating to the Qualified
Preretirement Survivor Annuity, is amended and
restated in its entirety to read as follows:


 


(i)                                     General.  Unless otherwise elected as provided below, in
the case of a Vested Participant (or former Vested Participant) who dies before
the Annuity Starting Date and who has a surviving spouse, the Participant’s
Target Benefit Capital Accumulation shall be paid to his or her surviving
spouse in the form of a Qualified Preretirement
Survivor Annuity.  Further, if said
Vested Participant (or former Vested Participant) has elected a life annuity
option prior to December 31, 2001 under this Plan, the vested portion of
the Participant’s Combined Account shall be paid to the surviving spouse in the
form of a Qualified Preretirement Survivor Annuity.


 


The
Participant’s spouse may direct that payment of the Qualified Preretirement Survivor Annuity commence within a reasonable
period after the Participant’s death.  If
the spouse does not so direct, payment of such benefit will commence at the
time the Participant would have


 


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attained
the later of his Normal Retirement Age or age 62.  However, the spouse may elect a later
commencement date.  Any distribution to
the Participant’s spouse shall be subject to the rules specified in Section
8.5(e).


 


15.                               Plan Subparagraph 8.6(f)(2)(v),
relating to the Plan’s means of distributing certain death benefits, is amended and
restated in its entirety to read as follows:


 


(v)                                 To
the extent the death benefit is not paid in the form of a Qualified Preretirement Survivor Annuity, it shall be paid to the
Participant’s Beneficiary by one lump-sum payment in cash and/or Company Stock.


 


16.                               Plan Subsection 8.6(g), relating
to certain previously eliminated distribution options, is deleted effective
January 1, 2003.


 


17.                               Plan Subsection 8.6(h), relating
to certain previously eliminated distribution options, is deleted effective
January 1, 2003.


 


18.                               Plan Subsection 8.6(i), relating to certain previously eliminated distribution
options, is deleted effective January 1, 2003.


 


19.                               Plan Section
8.11 is amended and restated in its entirety to read as follows:


 


8.11                           IN-SERVICE
DISTRIBUTION


 


(a)                                  At such time as an Employee has attained
the age of 59 1⁄2 years or at any time thereafter, the Employee may elect to
commence distribution of all or a portion of any of the following amounts:


 


(1)                                  The
portion of the Employee’s Elective Account that is attributable to Salary
Reduction Contributions and any Employer Qualified Non-Elective Contributions.


 


(2)                                  The
portion of the Employee’s Transfer/Rollover Account that is attributable to
Matching Contributions made to a plan that was subsequently merged into this
Plan.


 


(3)                                  The
portion of the Employee’s Transfer/Rollover Account that is attributable to
after-tax employee contributions made to a plan that was subsequently merged
into this Plan.


 


(4)                                  The
portion of an Employee’s Transfer/Rollover Account that is attributable to “rollovers”
(as defined in Section 5.11(b)).


 


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(5)                                  The
Employee’s Bank of Texas Transfer/Rollover Account (if any), as defined in
Section 2.55.


 


(b)                                 At such time as an Employee has attained
the age of 70 1⁄2 years or at any time thereafter, the Employee may elect to
commence distribution of all or a portion of any of the Participant’s Accounts.


 


(c)                                  In
the event that a distribution is made to a Participant under this Section, the
Participant shall continue to be eligible to participate in the Plan on the
same basis as any other Eligible Employee. 
Any distribution made pursuant to this Section shall be made in a manner
consistent with Article VIII, including, but not limited to, all applicable
notice and consent requirements.


 


20.                               Article XIII of the Plan is amended and restated in
its entirety to read as follows:


 


ARTICLE XIII


PARTICIPATING EMPLOYERS


 


13.1                           ADOPTION BY OTHER EMPLOYERS


 


Notwithstanding anything herein to the contrary, with the consent of Texas
Regional Bancshares, Inc. and Trustee, any other corporation or entity, whether
an affiliate or subsidiary or not, may adopt this Plan and all of the
provisions hereof, and participate herein and be known as a Participating
Employer, by a properly executed document evidencing said intent and will of
such Participating Employer.


 


13.2                           REQUIREMENTS OF PARTICIPATING
EMPLOYERS


 


(a)                                  Each
such Participating Employer shall be required to use the same Trustee as
provided in this Plan.


 


(b)                                 The
Trustee may, but shall not be required to, commingle, hold and invest as one
Trust Fund all contributions made by Participating Employers, as well as all
increments thereof.


 


(c)                                  At
the option of Texas Regional Bancshares, Inc. and with the approval of the
Administrator, any expenses of the Plan which are to be paid by the Employer or
borne by the Trust Fund shall be paid by Texas Regional Bancshares, Inc. or by each
Participating Employer in the same proportion that the total amount standing to
the credit of all Participants employed by such Employer bears to the total
standing to the credit of all Participants.


 


13.3                           DESIGNATION OF AGENT


 


Each Participating Employer shall be deemed to be a party to this Plan;
provided, however, that with respect to all of its relations with the Trustee
and Administrator for the purpose of this Plan, each Participating Employer
shall be deemed to have designated irrevocably Texas Regional Bancshares, Inc.
as its agent.


 


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13.4                           EMPLOYEE TRANSFERS


 


In the event an Employee is transferred between Participating
Employers, accumulated service and eligibility shall be carried with the
Employee involved.  No such transfer
shall effect a termination of employment hereunder if the transfer involves an
Affiliated Employer, and the Participating Employer to which the Employee is
transferred shall thereupon become obligated hereunder with respect to such
Employee in the same manner as was the Participating Employer from whom the
Employee was transferred.


 


13.5                           PARTICIPATING EMPLOYER CONTRIBUTION
AND FORFEITURES


 


With respect to Participating Employers that are not Affiliated
Employers, any contribution or Forfeiture subject to allocation during each
Plan Year shall be allocated only among those Participants of the Participating
Employer making the contribution or by which the forfeiting Participant was
employed.  However, if the contribution
is made, or the forfeiting Participant was employed, by an Affiliated Employer,
such contribution or Forfeiture shall be allocated among all Participants of
all Participating Employers who are Affiliated Employers in accordance with the
provisions of this Plan.  On the basis of
the information furnished by the Administrator, the Trustee may keep separate
books and records concerning the affairs of each non-Affiliated Participating
Employer hereunder and as to the accounts and credits of the Employees of each non-Affiliated
Participating Employer.  The Trustee may,
but need not, register Contracts so as to evidence that a particular
Participating Employer is the interested Employer hereunder, but in the event
of an Employee transfer to or from a non-Affiliated Participating Employer to
another Employer, the employing Participating Employer shall immediately notify
the Trustee thereof.


 


13.6                           AMENDMENT


 


Amendment of this Plan shall only be by the written action of Texas
Regional Bancshares, Inc. and with the consent of the Trustee where such
consent is necessary in accordance with the terms of this Plan.


 


13.7                           DISCONTINUANCE OF PARTICIPATION


 


No Participating Employer shall be permitted to discontinue or revoke
its participation in the Plan without the consent of Texas Regional Bancshares,
Inc.  Texas Regional Bancshares, Inc.,
may, however, discontinue the participation of any Participating Employer at
any time without the consent of any person. 
At the time of any such discontinuance or revocation, satisfactory
evidence thereof shall be delivered to the Trustee by Texas Regional
Bancshares, Inc.  The Trustee shall
thereafter transfer, deliver and assign Contracts and other Trust Fund assets
allocable to the Participants of such Participating Employer to such new
trustee as shall have been designated by such Participating Employer, in the
event that it has established a separate qualified retirement plan for its Employees,
provided, however, that no such transfer shall be made if the result is the
elimination or reduction of any “Section 411(d)(6) protected benefits” as
described in Section 9.1(c). If no successor is designated, the Trustee shall
retain such assets for the Employees of said Participating Employer pursuant to
the provisions of Article VII hereof.  In
no such event shall any part of the corpus or income of the Trust as it relates
to a non-Affiliated Employer be used for or diverted for purposes other than
for the exclusive benefit of the Employees of such non-Affiliated Employer.


 


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13.8                           ADMINISTRATOR’S AUTHORITY


 


The Administrator shall have authority to make any and all necessary
rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.


 


21.                               Schedule B to
the Plan, Effective Date of Participating Employer Adoption, is adopted
in the form attached to this Amendment as Exhibit “A.”


 


22.                               Pursuant to
Section 3.2 of the Plan, the Administrative Committee is hereby appointed to
serve as the Plan Administrator of the Plan, effective May 1, 2005.


 


IN WITNESS WHEREOF, this Eighteenth Amendment to the Texas Regional
Bancshares, Inc. Amended and Restated Employee Stock Ownership Plan (with
401(k) Provisions) has been executed this 10th day of May, 2005 to be effective
as of the dates provided above.


 


	
   

  	
  TEXAS REGIONAL BANCSHARES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G. E. Roney

  	
   

  
	
   

  	
   

  	
  Glen E. Roney,

  
	
   

  	
   

  	
  Chairman of
  the Board and

  
	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  TEXAS STATE BANK

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G. E. Roney

  	
   

  
	
   

  	
   

  	
  Glen E. Roney,

  
	
   

  	
   

  	
  Chairman of
  the Board, Chief Executive

  
	
   

  	
   

  	
  Officer and
  Trust Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  TSB SECURITIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John R. Booth, Jr.

  	
   

  
	
   

  	
   

  	
  John R.
  Booth, Jr.,

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  PORT ARTHUR ABSTRACT AND TITLE
  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ken N. Whitlow

  	
   

  
	
   

  	
   

  	
  Ken N.
  Whitlow,

  
	
   

  	
   

  	
  President

  
					



 


11





















 


	
   

  	
  SOUTHEAST TEXAS TITLE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ken N. Whitlow

  	
   

  
	
   

  	
   

  	
  Ken N.
  Whitlow,

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  SOUTHEAST TEXAS INSURANCE
  SERVICES, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan Byrom

  	
   

  
	
   

  	
   

  	
  Susan Byrom

  
	
   

  	
   

  	
  President, Southeast
  Texas Insurance

  Services Holdings, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  VALLEY MORTGAGE COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Schwab

  	
   

  
	
   

  	
   

  	
  Paul Schwab,

  
	
   

  	
   

  	
  President

  
					



 


 


AGREED TO
AND ACCEPTED BY:


 


 


	
  /s/ G. E. Roney

  	
   

  
	
  Glen E. Roney, Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Morris
  Atlas

  	
   

  
	
  Morris
  Atlas, Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Robert
  F. Boggus

  	
   

  
	
  Robert F. Boggus, Trustee

  	
   

  



 


12





















 


	
  AGREED
  TO AND ACCEPTED BY:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ G. E. Roney

  	
   

  
	
  Glen E. Roney, Committee Chairman

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Doug G. Bready

  	
   

  
	
  Douglas G. Bready, Committee Member

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Danny L.
  Buttery, Committee Member

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Tony J.
  Gorman

  	
   

  
	
  Tony J.
  Gorman, Committee Member

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Stanley
  Grisham

  	
   

  
	
  Stan
  Grisham, Committee Member

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ John A.
  Martin

  	
   

  
	
  John A.
  Martin, Committee Member

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Paul Moxley

  	
   

  
	
  Paul S. Moxley, Committee Member

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ J. Pat
  Parsons

  	
   

  
	
  J. Pat
  Parsons, Committee Member

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Lois Ann
  Stanton

  	
   

  
	
  Lois Ann
  Stanton, Committee Member

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Carroll
  W. Sturgis

  	
   

  
	
  Carroll W.
  Sturgis, Jr., Committee Member

  	
   

  



 


13





















 


Schedule B


 


Effective Date of Participating Employer
Adoption 


 


The following
Participating Employers have adopted the Texas Regional Bancshares, Inc.
Amended and Restated Employee Stock Ownership Plan (with 401(k) Provisions) for
the benefit of their eligible employees effective as of the dates indicated
below.


 


	
  Name of Company

  	
   

  	
  Effective Date

  of Adoption

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TEXAS REGIONAL BANCSHARES, INC.

  	
   

  	
  January 1,
  1984

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TEXAS STATE BANK

  	
   

  	
  January 1,
  1984

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TSB SECURITIES,
  INC.

  	
   

  	
  January 1,
  1997

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PORT ARTHUR ABSTRACT AND TITLE COMPANY

  	
   

  	
  March 12,
  2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SOUTHEAST TEXAS TITLE COMPANY

  	
   

  	
  March 12,
  2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SOUTHEAST TEXAS INSURANCES SERVICES, L.P.

  	
   

  	
  March 12,
  2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VALLEY MORTGAGE COMPANY, INC.

  	
   

  	
  November 23,
  2004

  	
   

  



 


EXHIBIT “A”