Exhibit 10.19


 


AMENDMENT NUMBER SEVEN

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 September 1, 2003.


 


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, Texas Regional Delaware, Inc., and Texas State Bank have entered into
several Agreements and Plans of Reorganization, pursuant to which they have
acquired, by merger, other bank holding companies and subsidiaries, and, as a
part of those mergers, Texas State Bank has become the plan sponsor of certain
defined contribution plans previously sponsored by such acquired banks; and


 


WHEREAS, it is
the practice of the Company and its wholly owned subsidiary, Texas State Bank,
to merge such acquired defined contribution plans into the Plan as soon as
feasible; and


 


WHEREAS, under
the provisions of the Internal Revenue Code that govern qualified retirement
plans, certain distribution rights of merged plans must be preserved; and


 


WHEREAS, the
Board of Directors desires to facilitate the contemplated merger of several
existing acquired defined contribution plans into the Plan;


 


NOW THEREFORE,
IT IS HEREBY AGREED THAT the Plan is hereby amended effective as of September
1, 2003, as follows:


 


1.   
PLAN SECTION 5.11, ROLLOVERS AND PLAN-TO-PLAN TRANSFERS FROM QUALIFIED
PLANS,” is amended and restated in its entirety to read as follows:


 


5.11 
ROLLOVERS AND PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS


 


(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).


 


Notwithstanding
the foregoing, effective as of January 1, 2002 (the “Merger Date”), pursuant to
the consent of the Administrator and the Trustee, the plan assets of the Bank
of Texas Plan have been transferred to this Plan and, from and after said date,
shall be subject to the provisions of this Plan and the related Trust, as amended.
The amounts transferred shall be set up in a separate account herein referred
to as a Participant’s Bank of Texas Transfer/Rollover Account. As of the Merger
Date, the participants of the Bank of Texas Plan were fully vested in their
accounts in the Bank of Texas Plan. Therefore, Participants shall be fully
vested in their Participant’s Bank of Texas Transfer/Rollover Account.


 

















 


Further,
effective as of January 1, 2002 (the “Merger Date”), pursuant to the consent of
the Administrator and the Trustee, the plan assets of the Harlingen National
Bank Plan have been transferred to this Plan and, from and after said date,
shall be subject to the provisions of this Plan and the related Trust, as
amended. The amounts transferred shall be set up in a separate account herein
referred to as a Participant’s Harlingen National Bank Transfer/Rollover
Account. As of the Merger Date, the participants of the Harlingen National Bank
Plan were fully vested in their accounts in the Harlingen National Bank Plan.
Therefore, Participants shall be fully vested in their Participant’s Harlingen
National Bank Transfer/Rollover Account.


 


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 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).


 


(b)                                 With
the consent of the Administrator, the Plan may accept a “rollover” by Eligible
Employees, provided the “rollover” will not jeopardize the tax-exempt status of
the Plan or create adverse tax consequences for the Employer.  Prior to accepting any “rollovers” to which
this Section applies, the Administrator may require the Employee to establish
(by providing opinion of counsel or otherwise) that the amounts to be rolled
over to this Plan meet the requirements of this Section.  The amounts rolled over shall be set up in a
separate account herein referred to as a “Participant’s Transfer/Rollover
Account.”  Such account shall be fully
Vested at all times and shall not be subject to Forfeiture for any reason.


 


For purposes
of this Section, the term “rollover” means: (i) amounts transferred to this
Plan directly from a qualified plan described in Code Section 401(a) or 403(a);
(ii) distributions received by an Employee from another qualified plan
described in Code Section 401(a) or 403(a) which distributions are eligible for
tax-free rollover and which are transferred by the Employee to this Plan within
sixty (60) days following receipt thereof; (iii) amounts transferred to this
Plan from a conduit individual retirement account provided that the conduit
individual retirement account has no assets other than assets which (A) were
previously distributed to the Employee by another qualified plan described in
Code Section 401(a) or 403(a), (B) were eligible for tax-free rollover,  and (C) were deposited in such conduit
individual retirement account within sixty (60) days of receipt thereof; and
(iv) amounts distributed to the Employee from a conduit individual retirement
account meeting the requirements of clause (iii) above and transferred by the
Employee to this Plan within sixty (60) days of receipt thereof from such
conduit individual retirement account. 
In no event shall after-tax employee contributions be accepted as
“rollovers” into this Plan except those after-tax employee contributions that
were previously accepted by a plan that is subsequently merged into this Plan.


 


(c)                                  Amounts
in a Participant’s Transfer/Rollover Account shall be held by the Trustee
pursuant to the provisions of this Plan and may not be withdrawn by, or
distributed to the Participant, in whole or in part, except as provided in
Section 8.9 and paragraphs (d) and (f) of this Section.  The Trustee shall have no duty or
responsibility to inquire as to the propriety of the amount, value or type of
assets transferred, nor to conduct any due diligence with respect to such
assets; provided, however, that such assets are otherwise eligible to be held
by the Trustee under the terms of this Plan.


 


(d)                                 At
such date when the Participant or the Participant’s Beneficiary shall be
entitled to receive benefits, the Participant’s Transfer/Rollover Account shall
be used to provide additional benefits to the Participant or the Participant’s
Beneficiary.  Any distributions of
amounts held in a Participant’s Transfer/Rollover Account shall be made in a
manner which is consistent with and satisfies the provisions of Section 8.5,
including, but not limited to, all notice and consent requirements of Code
Section 411(a)(11) and the Regulations thereunder.


 


(e)                                  The
Administrator may direct that Employee transfers and rollovers made after a
Valuation Date be segregated into a separate account for each Participant until
such time as the allocations pursuant to this Plan have been made, at which
time they may remain segregated or be invested as part of the general Trust
Fund or be directed by the Participant pursuant to Section 5.12.


 


(f)                                     An Employee’s separate account
that is attributable to “rollovers” (as defined in paragraph (b) above) may be
distributed to the Employee under Section 8.11.


 


(g)                                 Notwithstanding
anything herein to the contrary, a transfer directly to this Plan from another
qualified plan described in Code Section 401(a) or 403(a) (or a transaction
having the effect of such a transfer) shall only be permitted if it will not
result in the elimination or reduction of any “Section 411(d)(6) protected
benefit” as described in Section 10.1.


 


2.  A new Plan Section 8.11, “In-Service
Distribution at Age 59 1/2,” is added as follows:


 


8.11  IN-SERVICE DISTRIBUTION


 


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:


 


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


 

















 


(b)  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.


 


(c)  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.


 


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


 


In the event
that such a distribution is made to a Participant, 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 the Article VIII, including, but not limited to, all applicable notice and
consent requirements.


 


3.  Plan Section 10.1, “AMENDMENT,” is amended
and restated in its entirety to read as follows:


 


10.1                        AMENDMENT


 


(a)     The Employer shall have the right at any time to
amend this Plan subject to the limitations of this Section.  However, any amendment which affects the
rights, duties or responsibilities of the Trustee or Administrator, may only be
made with the Trustee’s or Administrator’s written consent.  Any such amendment shall become effective as
provided therein upon its execution. 
The Trustee shall not be required to execute any such amendment unless
the amendment affects the duties of the Trustee hereunder.


 


(b)     No amendment to the Plan shall be effective if it
authorizes or permits any part of the Trust Fund (other than such part as is
required to pay taxes and administration expenses) to be used for or diverted
to any purpose other than for the exclusive benefit of the Participants or
their Beneficiaries or estates; or causes any reduction in the amount credited
to the account of any Participant; or causes or permits any portion of the
Trust Fund to revert to or become property of the Employer.


 


(c)     Except as permitted by Regulations (including
Regulation §1.411(d)-4) or other IRS guidance, no Plan amendment or transaction
having the effect of a Plan amendment (such as a merger, plan transfer or
similar transaction) shall be effective if it eliminates or reduces any
“Section 411(d)(6) protected benefit” or adds or modifies conditions relating
to “Section 411(d)(6) protected benefits” which results in a further
restriction on such benefit unless such “Section 411(d)(6) protected benefits” are
preserved with respect to benefits accrued as of the later of the adoption date
or effective date of the amendment. “Section 411(d)(6) protected benefits” are
benefits described in Code Section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of benefit.


 


IN WITNESS
WHEREOF, this Amendment Number Seven to the Texas Regional Bancshares, Inc.
Amended and Restated Employee Stock Ownership Plan (with 401(k) Provisions) has
been executed this 12th day of August, 2003 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