Exhibit
10.21


 


AMENDMENT NUMBER NINE

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 the Trustees of
the Texas Regional Bancshares, Inc. Amended and Restated Employee Stock
Ownership Plan (with 401(k) Provisions) adopt the following amendments to the
Plan effective as of January 1, 2004.


 


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”), which
was most recently restated effective December 31, 2001; and


 


WHEREAS, it has come to
the attention of the Directors that the definition of “Compensation” used for
various purposes under the restated Plan should be revised in order to
completely exclude certain stock-option-related compensation for all such
purposes.


 


NOW THEREFORE, IT IS
HEREBY AGREED THAT the Plan is hereby amended effective as of January 1,
2004, as follows:


 


1.                                      Plan
Section 2.13, “Compensation,” is amended and restated in its entirety to
read as follows:


 


2.13                           “Compensation”
with respect to any Participant means, effective for Plan Years beginning on or
after January 1, 2004, such Participant’s “415 Compensation” as defined
for such years in Section 2.32.


 


Effective for Plan
Years beginning after December 31, 2001 and prior to January 1, 2004,
“Compensation” with respect to any Participant means the Participant’s wages as
defined in Code Section 3401(a) and all other payments of compensation by
the Employer (in the course of the Employer’s trade or business) for a Plan
Year for which the Employer is required to furnish the Participant a written
statement under Code Sections 6041(d), 6051(a)(3) and 6052.  Compensation must be determined without regard
to any rules under Code Section 3401(a) that limit the remuneration
included in wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor in Code
Section 3401(a)(2)).


 


For purposes of
this Section, the determination of Compensation shall be made by including
amounts which are contributed by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross income of


 

















 


the Participant under
Code Sections 125; 132(f)(4) for Plan Years beginning after December 31,
2000; 402(e)(3); 402(h)(1)(B); 403(b) or 457(b); and Employee contributions
described in Code Section 414(h)(2) that are treated as Employer
Contributions.


 


Except as provided
in Section 5.1(b) for purposes of Employer Discretionary Matching
Contributions, for a Participant’s initial year of participation, Compensation
shall be recognized for the entire Plan Year.


 


Compensation in
excess of $150,000 (or such other amount provided in the Code) shall be
disregarded for all purposes other than for purposes of salary deferral
elections pursuant to Section 5.2. 
Such amount shall be adjusted for increases in the cost of living in
accordance with Code Section 401(a)(17)(B), except that the dollar
increase in effect on January 1 of any calendar year shall be effective
for the Plan Year beginning with or within such calendar year.  For any short Plan Year the Compensation
limit shall be an amount equal to the Compensation limit for the calendar year
in which the Plan Year begins multiplied by the ratio obtained by dividing the
number of full months in the short Plan Year by twelve (12).


 


For Plan Years
beginning after December 31, 1996, for purposes of determining
Compensation, the family member aggregation rules of Code
Section 401(a)(17) and Code Section 414(q)(6) (as in effect prior to
the Small Business Job Protection Act of 1996) are eliminated.


 


For purposes of
this Section, if the Plan is a plan described in Code Section 413(c) or
414(f) (a plan maintained by more than one Employer), the limitation applies
separately with respect to the Compensation of any Participant from each
Employer maintaining the Plan.


 


2.                                      Plan
Section 2.32, “415 Compensation,” is amended and restated in its entirety
to read as follows:


 


2.32                           “415
Compensation” with respect to any Participant means, effective for “limitation
years” beginning on or after January 1, 2004, such Participant’s earned
income, wages, salaries, fees for professional service and other amounts
received for personal services actually rendered in the course of employment
with the Employer to the extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salespersons, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits and reimbursements or other expense
allowances under a nonaccountable plan as defined in Treas. Reg. §1.62-2(c)),
and excluding the following:


 


(a)                                  Employer
contributions to a plan of deferred compensation to the extent that the
contributions are not included in gross income of the Participant for the
taxable year in which contributed, or Employer contributions on behalf of


 


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a Participant to a
simplified employee pension plan to the extent that such contributions are
excludable from the Participant’s gross income, and any distributions from a
plan of deferred compensation whether or not includible in the gross income of
the Participant when distributed;


 


(b)                                 amounts
realized from the exercise of a nonqualified stock option, or when restricted
stock (or property) held by an Employee becomes freely transferable or is no
longer subject to a substantial risk of forfeiture;


 


(c)                                  amounts
realized from the sale, exchange or other disposition of stock acquired under a
qualified stock option;


 


(d)                                 other
amounts which receive special tax benefits, such as premiums for group term
life insurance (but only to the extent that the premiums are not includible in
the gross income of the Participant), or contributions made by the Employer
(whether or not under a salary reduction agreement) toward the purchase of a
Code Section 403(b) annuity contract (whether or not the contributions are
excludable from the gross income of the Participant); and


 


(e)                                  any
amount treated as an annual addition under Section 415 of the Code.


 


Effective for
“limitation years” beginning after December 31, 2001 and prior to
January 1, 2004, “415 Compensation” with respect to any Participant means
such Participant’s wages as defined in Code Section 3401(a) and all other
payments of compensation by the Employer (in the course of the Employer’s trade
or business) for a Plan Year for which the Employer is required to furnish the
Participant a written statement under Code Sections 6041(d), 6051(a)(3) and
6052.  “415 Compensation” must be
determined without regard to any rules under Code Section 3401(a) that
limit the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Code Section 3401(a)(2)).


 


For “limitation
years” beginning after December 31, 1997, for purposes of this Section,
the determination of “415 Compensation” shall include any elective deferral (as
defined in Code Section 402(g)(3)), and any amount which is contributed or
deferred by the Employer at the election of the Participant and which is not
includible in the gross income of the Participant by reason of Code Sections
125; 132(f)(4) for “limitation years” beginning after December 31, 2000;
and 457.


 


3.                                      Plan
Section 5.1(c), relating to allocation of the Employer Discretionary
Optional Contribution, is amended and restated in its entirety to read as
follows:


 


(c)                                  An
Employer Discretionary Optional Contribution, which shall be determined in the
sole discretion of the Board of Directors. 
The interest of a Participant in the Employer Discretionary Optional
Contributions allocated to his


 


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account will become
nonforfeitable pursuant to the vesting schedule contained in
Section 8.4(b).


 


IN WITNESS WHEREOF, this
Amendment Number Nine to the Texas Regional Bancshares, Inc. Amended and
Restated Employee Stock Ownership Plan (with 401(k) Provisions) has been executed
this 9th day of March, 2004 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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AGREED TO AND ACCEPTED
  BY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ G.E. Roney

  	
   

  	
   

  	
   

  
	
  Glen E. Roney, Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Morris Atlas

  	
   

  	
   

  	
   

  
	
  Morris Atlas, Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Frank N. Boggus

  	
   

  	
   

  	
   

  
	
  Frank N. Boggus,
  Trustee

  	
   

  	
   

  



 


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