Document:

exv10w4

 

Exhibit 10.4

NONQUALIFIED DEFERRED COMPENSATION PLAN

FOR THE

BOARD OF DIRECTORS

OF THE

FEDERAL HOME LOAN BANK OF DALLAS

FOR DEFERRALS EFFECTIVE JANUARY 1, 2005

The Nonqualified Deferred Compensation Plan for the Board of Directors of the Federal Home Loan
Bank of Dallas for Deferrals Effective January 1, 2005 (the “Plan”) is hereby adopted effective
January 1, 2005. All Participants’ deferrals which were made prior to January 1, 2005 will
continue to be governed by the provisions of the original Nonqualified Deferred Compensation Plan
for the Board of Directors of the Federal Home Loan Bank of Dallas plan document as last amended
July 24, 2004 (referred to as the “Prior Plan”). All amounts deferred after December 31, 2004
shall be governed exclusively under the provisions of this Plan document.

ARTICLE I

Definitions

     1.01 Administrative Committee shall mean the committee appointed pursuant to Article V
of the Plan.

     1.02 Adoption Agreement shall mean the initial written agreement between a Participant
and the Bank, whereby a Participant agrees to defer a portion of his or her Director’s Fees
pursuant to the provisions of the Plan, and the Bank agrees to make payments in accordance with the
provisions of the Plan.

     1.03 Bank shall mean the Federal Home Loan Bank of Dallas.

     1.04 Beneficiary shall mean any person, persons, or entities designated by a
Participant to receive benefits hereunder upon the death of such Participant.

     1.05 Benefit Account shall mean the account(s) maintained on the books of the Bank for
each Participant pursuant to Article III hereof. The Administrative Committee shall establish the
subaccounts necessary to account for Stated Deferrals on a class year basis.

     1.06 Code shall mean the Internal Revenue Code of 1986, as amended.

 

 

     1.07 Deferral Period shall mean the period of time during which the Director’s Fees
are being deferred pursuant to the Participant’s Adoption Agreement.

     1.08 Determination Date shall mean the last day of the Plan Year or more frequently as
determined by the Administrative Committee which may include daily valuation of the Benefit
Account.

     1.09 Director shall mean the person elected or appointed as a Director of the Bank
pursuant to the Federal Home Loan Bank Act, as amended.

     1.10 Director’s Fee shall mean the total amount of all compensation payments made by
the Bank to a Director for services rendered by a Director in fulfilling his or her
responsibilities associated with serving as a member of the Bank’s Board of Directors. Director’s
Fees shall not include expense reimbursements, or any deferred compensation payments under this
Plan. The deferred compensation payments are compensation for all other purposes as per the
regulations promulgated by the Internal Revenue Service under its applicable code sections.

     1.11 Disability means the Participant is unable to continue to serve as a Director by
reason of any medically determinable physical or mental impairment which can be expected to result
in death or can be expected to last for a continuous period of not less than 12 months. For
purposes of this Plan, the determination of Disability shall be made in the sole and absolute
discretion of the Administrative Committee.

     1.12 Hardship shall mean severe financial hardship to a Participant resulting from (1)
the Participant’s spouse or a dependent (as defined in Section 152(a) of the Code), (2) loss of the
Participant’s property due to casualty or (3) other similar extraordinary and unforeseeable
circumstances arising as a result of an event beyond the control of the Participant. The need to
send a Participant’s child to college or the desire to purchase a home shall not be considered
emergencies for purpose of this Plan. Any early withdrawal by reason of Hardship shall be limited
to the amount necessary to meet the stated financial emergency.

     1.13 Participant shall mean a duly elected or appointed Director of the Bank who has
enrolled in the Plan by completing an Adoption Agreement.

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     1.14 Plan Year shall mean the twelve-month period on which the Plan records are kept,
which shall begin on January 1 of one year and end on December 31 of the same year.

     1.15 Stated Deferral shall mean the amount of the Director’s Fee the Participant
agrees to defer in the Adoption Agreement, and on subsequent annual Plan election forms.

ARTICLE II

Eligibility and Participation

     2.01 Participation. Participation in this Plan is limited to those Directors elected
or appointed as a Director of the Bank pursuant to the Federal Home Loan Bank Act, as amended.

     2.02 Enrollment Requirements. A Director shall enroll as a Participant in the Plan by
(a) entering into an Adoption Agreement with the Bank, which shall specify the amount of deferral
and the form and timing of payment of his or her Benefit Account, and (b) by completing such other
forms and furnishing such other documents as the Bank may require.

     2.03 Enrollment Time Period. The Adoption Agreement must be executed within thirty
(30) days of the date the Director first becomes eligible during the Plan Year in which the
Agreement is to be effective. The initial election shall be effective with respect to fees earned
after the election has been filed. All subsequent elections must be filed by December 31 of the
year immediately prior to the Plan Year with respect to which the election applies.

     2.04 Failure of Eligibility. A Participant shall cease to be a Participant at such
time as his or her term of office on the Board of Directors has expired.

     2.05 Election to Defer Irrevocable; Exceptions. Except as otherwise provided herein,
a Participant’s election to defer Director’s Fees shall be irrevocable. If the Participant
receives a distribution due to Hardship under Section 4.03 of this Plan, the Participant’s election
to defer Compensation for that Plan Year will terminate and no further deferrals will be permitted
for the remainder of the Plan Year. A Participant is permitted to rescind his or her deferral
election for the 2005 Plan Year so long as the Participant files a request for rescission with the
Administrative Committee prior to December 31, 2005 and all amounts subject to rescission are
included in the Participant’s taxable income for the 2005 taxable year.

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ARTICLE III

Participant Benefit Account and Vesting

     3.01 Benefit Account. The Bank shall establish a Benefit Account on its books for
each Participant, and shall credit to each Participant’s Benefit Account the following amounts at
the times specified:

(a) The amount of Director’s Fees that the Participant has
previously deferred or elects to defer pursuant to Section 2.02 of the
Plan, credited as of the date the Participant would otherwise have received
the fee compensation. The Bank shall deduct any amounts it is required to
withhold under state, federal or local law for taxes other than charges
from the Participant’s Director’s Fees.

(b) As of the last day of each calendar quarter, an amount
equal to the earnings attributable to the Participant’s Benefit Account.

A Participant’s Benefit Account shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to the Participant pursuant to the Plan. A
Participant’s Benefit Account shall not constitute or be treated as a trust fund of any
kind. All benefits payable under this Plan shall be paid as they become due and payable by
the Bank out of its general assets. Provided, the Bank may establish and/or continue a
grantor trust as defined in Section 671 of the Code to provide a source of funding for
amounts deferred under the Plan.

     3.02 Determination of Benefit Account. Each Participant’s Benefit Account as of each
Determination Date shall consist of the balance of the Participant’s Benefit Account as of the
immediately preceding Determination Date, plus the amounts required to be credited to such account
by the Bank pursuant to Section 3.01.

     3.03 Statement of Account. The Bank shall provide each Participant, a statement in
such form as the Bank deems appropriate setting forth the balance to the credit of such Participant
in his or her Benefit Account as of the Determination Date.

     3.04 Vesting of Benefit Account. All Director’s Fees deferred by a Participant and
the earnings credited to the Benefit Account shall be one hundred percent (100%) vested at all
times.

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ARTICLE IV

Payment of Benefits

     4.01 Distribution of Benefit Account to Participant. At the end of the Deferral
Period, the distribution of deferred amounts and accrued interest in the Benefit Account shall be
made payable to the Participant in either a lump sum cash payment, or in the form of annual
installments for a period of from two (2) to twenty (20) years commencing on the date so designated
by the Participant on the date of deferral.

     A Participant may change the form of payment previously elected by filing a request with the
Administrative Committee at least twelve months prior to the date payment is otherwise scheduled to
commence. Any request to change in the form of payment will not take effect for twelve months
following the date it is received by the Administrative Committee and the first payment with
respect to which this election is made will be deferred for a period of five years from the date
such payment would otherwise have been made.

     4.02 Recipients of Payments: Designation of Beneficiary. All payments to be made
under this Plan by the Bank shall be made to the Participant, if living. In the event of a
Participant’s death prior to receipt of all benefit payments, all subsequent payments to be made
under the Plan shall be to the Beneficiary or Beneficiaries of the Participant. Each Participant
shall file with the Bank a designation of Primary Beneficiary and Secondary Beneficiary to whom the
Participant’s interest under the Plan shall be paid in the event of death. The initial designation
of Beneficiary shall be made in the Participant’s Adoption Agreement. Such designation may be
changed by the Participant at any time without the consent of any previously designated
Beneficiary. In the absence of an effective Beneficiary designation as to any portion of a
Participant’s interest under the Plan, such amount shall be paid to the Participant’s personal
representative, but if the Bank believes none has been appointed within six months after the
Participant’s death, the Bank may direct that such amount shall not be paid until a personal
representative has been appointed or may direct that such amount be paid to the Participant’s
surviving spouse, or if there is none, to the Participant’s surviving children and issue of
deceased children by right of representation, or there be none, the Participant’s surviving parents
and if none, according to the laws of descent and distribution of the State of Texas. In the event
a benefit is payable to a minor or person declared incompetent or a person incapable of handling
the disposition of his property, the Administrative Committee may pay

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such benefit to the guardian, legal representative or person having the care or custody of
such minor, incompetent or person. The Administrative Committee may require proof of incompetency,
minority or guardianship as it may deem appropriate prior to distribution of the benefit. Such
distribution shall completely discharge the Bank from all liability with respect to such benefit.

     4.03 Hardship Distribution. The Administrative Committee may, in its sole discretion,
upon finding that the Participant has suffered or is suffering a Hardship, distribute to such
Participant all or a portion of his or her Benefit Account under the Plan. The amount distributed
will be limited to the amount the Administrative Committee determines is necessary to meet the
stated financial emergency.

     4.04 Bank Obligations and Source of Payments. All benefits payable under this Plan
shall be paid as they become due and payable by the Bank out of its general assets and are subject
to the claims of the Bank’s general creditors. Nothing contained in this Plan shall be deemed to
create a trust of any kind for the benefit of the Participants or create any fiduciary relationship
between the Bank and the Participants or their Beneficiaries. To the extent that any person
acquires a right to receive benefits under this Plan, such rights shall be no greater than the
right of any unsecured general creditor of the Bank.

ARTICLE V

Administration

     5.01 Administrative Committee. The Plan shall be administered by the same
Administrative Committee appointed by the Board of Directors to administer the Bank’s Employee
Deferred Compensation Plan. This administration shall be in accordance with this Plan’s terms and
purposes and in compliance with Section 409A of the Code. Interpretation by the Administrative
Committee shall be final and binding upon a Participant.

     5.02 Claims Procedure.

     (a) All claims shall be filed in writing by the Participant, his or her
Beneficiary or authorized representative of the claimant, by completing such
procedures as the Administrative Committee shall require. Such procedures shall be
reasonable and

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may include the completion of forms and the submission of documents and
additional information.

     (b) If a claim is denied, notice of denial shall be furnished by the
Administrative Committee to the claimant within ninety (90) days after receipt of the
claim by the Administrative Committee, unless special circumstances require an
extension of time for processing the claim, in which event notification of the
extension shall be provided to the Participant or Beneficiary and the extension shall
not exceed ninety (90) days.

     (c) The Administrative Committee shall provide adequate notice, in writing, to
any claimant whose claim has been denied, setting forth the specific reasons for such
denial, specific reference to pertinent Plan provisions, a description of any
additional material or information necessary for the claimant to perfect his or her
claim and any explanation of why such material or information is necessary, all
written in a manner calculated to be understood by the claimant. Such notice shall
include appropriate information as to the steps to be taken if the claimant wishes to
submit his or her claim for review. The claimant or the claimant’s authorized
representative must request such review within the reasonable period of time
prescribed by the Administrative Committee. In no event shall such period of time be
less than sixty (60) days. A decision on review shall be made not later than sixty
(60) days after the Bank’s receipt of the request for review. If special
circumstances require further extension of time for processing, a decision shall be
rendered not later than one hundred twenty (120) days following the Bank’s receipt of
the request for review. If such an extension of time for review is required, written
notice of the extension shall be furnished to the claimant prior to the commencement
of the extension. The decision on review shall be furnished to the claimant. Such
decision shall be in writing and shall include specific reasons for the decision,
written in a manner calculated to be understood by the claimant, as well as specific
references to the pertinent Plan provisions on which the decision is based.

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ARTICLE VI

Miscellaneous

     6.01 Amendment and Termination. The Board may, at any time, amend or terminate the
Plan. Unless the Plan is terminated by the Board in a manner that complies with the Plan
termination limitations of IRC Section 409A and regulations promulgated thereunder, Plan
termination shall be limited to ceasing prospective deferrals and the Bank shall distribute to the
Participant or a Participant’s Beneficiary, the Participant’s Benefit Account in accordance with
the terms of the Plan and the distribution elections in effect on the date of Plan termination. A
notice of termination or Plan amendment shall be provided in writing to all Directors participating
in the Plan.

     6.02 Assignment of Benefits. No Participant or Beneficiary shall have the right to
assign, transfer, hypothecate, encumber, or anticipate his or her interest in any benefits under
this Plan, nor shall the benefits under this Plan be subject to any legal process to levy upon or
attach the benefits for payment of any claim against the Participant or his or her Beneficiary. In
the event of an attempted assignment or transfer, the Bank shall have no further liability
hereunder.

     6.03 Disposition of Unclaimed Payments. Each Participant must file with the Bank from
time to time in writing his or her post office address and each change of post office address. The
communication, statement, or notice addressed to a Participant at the last post office address
filed with the Bank, or if no address is filed with the Bank, then at the last post office address
as shown on the Bank’s records, will be binding upon Participant and his or her Beneficiaries for
all purposes of the Plan.

     6.04 Taxes. The Bank shall deduct from all payments made hereunder all applicable
federal and state taxes required by law to be withheld from such payments.

     6.05 GOVERNING LAW. THIS PLAN IS INTENDED TO CONSTITUTE AN UNFUNDED PLAN FOR THE
BOARD OF DIRECTORS AND RIGHTS THEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS.

     6.06 Form of Communication. Any election, application, claim, notice or other
communication required or permitted to be made by a Participant to the Bank regarding this Plan
shall be made in writing and in such form as the Bank or Board of Directors shall prescribe. Such

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communication shall be effective upon mailing, if sent by first class letter, postage
pre-paid, and addressed to the Bank’s offices as follows:

Attention: Directors Nonqualified Deferred Compensation Plan

Federal Home Loan Bank of Dallas

8500 Freeport Parkway South, Suite 600

Irving, Texas 75063-2547

     6.07 Severability. The invalidity of any portion of this Plan shall not invalidate
the remainder thereof, and said remainder shall continue in full force and effect.

     6.08 Binding Agreement. The provisions of this Plan shall be binding upon the
Participants and the Bank and their respective successors, assigns, heirs, executors, and
beneficiaries.

	 	 	 	 	 	 	 	 	 
	 	 	Bank:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	FEDERAL HOME LOAN BANK OF DALLAS	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Timothy J. Heup	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	Corporate Officer	 	 

ATTEST:

	 	 	 
	/s/ Karen A. Krug
 

Corporate Secretary

	 	 

9exv10w5

 

Exhibit 10.5

 

Federal Home Loan Bank of Dallas

Form of Special Non-Qualified Deferred Compensation Plan

 

(Amended and Restated Effective: January 1, 2004)

 

 

FEDERAL HOME LOAN BANK OF DALLAS

SPECIAL NON-QUALIFIED DEFERRED COMPENSATION PLAN

Table Of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I NAME AND PURPOSE OF PLAN	 	 	1	 
	 
	 	 	 	 	 	 
	1.1
	 	Name of Plan	 	 	1	 
	1.2
	 	Purpose	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 
	2.1
	 	Account	 	 	1	 
	2.2
	 	Base Salary	 	 	1	 
	2.3
	 	Bank	 	 	1	 
	2.4
	 	Beneficiary	 	 	1	 
	2.5
	 	Benefit	 	 	1	 
	2.6
	 	Board	 	 	1	 
	2.7
	 	Code	 	 	1	 
	2.8
	 	Contributions	 	 	2	 
	2.9
	 	Disability	 	 	2	 
	2.10
	 	Effective Date	 	 	2	 
	2.11
	 	Employee	 	 	2	 
	2.12
	 	Group One Participants	 	 	2	 
	2.13
	 	Group Two Participants	 	 	2	 
	2.14
	 	Group Three Participants	 	 	2	 
	2.15
	 	Investment Performance	 	 	2	 
	2.16
	 	Normal Retirement Age	 	 	2	 
	2.17
	 	Participant	 	 	2	 
	2.18
	 	Plan	 	 	2	 
	2.19
	 	Plan Entry Date	 	 	2	 
	2.20
	 	Plan Year	 	 	2	 
	2.21
	 	Thrift Plan	 	 	2	 
	2.22
	 	Trustees, Trust, Trust Agreement, Trust Assets and Trust Fund	 	 	3	 
	 
	 	 	 	 	 	 
	ARTICLE III ELIGIBILITY FOR PARTICIPATION	 	 	3	 
	 
	 	 	 	 	 	 
	3.1
	 	Participation	 	 	3	 
	3.2
	 	Cessation of Participation	 	 	3	 
	 
	 	 	 	 	 	 
	ARTICLE IV CONTRIBUTIONS	 	 	3	 
	 
	 	 	 	 	 	 
	4.1
	 	Contributions by the Bank	 	 	3	 
	4.2
	 	Recordkeeping	 	 	4	 
	4.3
	 	Limitations	 	 	4	 
	 
	 	 	 	 	 	 
	ARTICLE V INVESTMENT FUNDS	 	 	4	 
	 
	 	 	 	 	 	 
	5.1
	 	Investment Funds	 	 	4	 
	5.2
	 	Allocation of Investment Performance	 	 	4	 

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	 	 	 	 	Page	 
	ARTICLE VI VESTING	 	 	4	 
	 
	 	 	 	 	 	 
	6.1
	 	Termination of Employment – Vesting of Account	 	 	4	 
	6.2
	 	Vesting	 	 	5	 
	6.3
	 	Forfeitures	 	 	5	 
	6.4
	 	No Forfeitures for Cause	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE VII BENEFITS	 	 	5	 
	 
	 	 	 	 	 	 
	7.1
	 	Retirement Benefits	 	 	5	 
	7.2
	 	Application for Benefits	 	 	6	 
	7.3
	 	Payment to Beneficiary	 	 	6	 
	7.4
	 	Beneficiary Designations	 	 	6	 
	7.5
	 	Changes in Payment Date	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE VIII ADMINISTRATION	 	 	7	 
	 
	 	 	 	 	 	 
	8.1
	 	Plan Administrator	 	 	7	 
	8.2
	 	Authority of the Bank	 	 	7	 
	8.3
	 	Action of the Bank	 	 	7	 
	8.4
	 	Claims Procedure	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE IX GENERAL PROVISIONS AND LIMITATIONS REGARDING BENEFITS	 	 	8	 
	 
	 	 	 	 	 	 
	9.1
	 	Non-Alienation of Retirement Rights or Benefits	 	 	8	 
	9.2
	 	Amendment and Termination	 	 	8	 
	9.3
	 	Funding	 	 	9	 
	9.4
	 	Plan Non-Contractual	 	 	9	 
	9.5
	 	Claims of Other Persons	 	 	9	 
	9.6
	 	Finality of Determination	 	 	9	 
	9.7
	 	Merger, Consolidation, or Transfers of Plan Assets	 	 	9	 
	9.8
	 	Tax Consequences Not Guaranteed	 	 	10	 
	9.9
	 	Tax Withholding	 	 	10	 
	9.10
	 	Governing Law	 	 	10	 
	9.11
	 	Construction	 	 	10	 
	9.12
	 	Severability	 	 	10	 

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FEDERAL HOME LOAN BANK OF DALLAS

SPECIAL NON-QUALIFIED DEFERRED COMPENSATION PLAN

     The Board of Directors of the Federal Home Loan Bank of Dallas adopted the retirement plan
entitled the “FEDERAL HOME LOAN BANK OF DALLAS SPECIAL NON-QUALIFIED DEFERRED COMPENSATION PLAN”
effective January 1, 2003. The Board has determined that it is necessary for the effective
administration of the Plan to amend and restate the Plan. The terms of this amended and restated
Plan shall apply to all Contributions and to Participants from the effective date of the Plan of
January 1, 2003.

ARTICLE I

NAME AND PURPOSE OF PLAN

     1.1 Name of Plan. This Plan shall be hereafter known as the FEDERAL HOME LOAN BANK OF
DALLAS SPECIAL NON-QUALIFIED DEFERRED COMPENSATION PLAN.

     1.2 Purpose. The purpose of the Plan is to provide supplemental retirement benefits for
the Participants in accordance with the terms of the Plan.

ARTICLE II

DEFINITIONS

     The words and phrases defined in this Article have the following meanings throughout this plan
document:

     2.1 Account. “Account” means the separate account established for each Participant. The
balance of the Account reflects all Contributions described in Article IV, expense charges, and
Investment Performance allocated to the Account in the manner described in Article V.

     2.2 Base Salary. “Base Salary” means the Participant’s annualized gross rate of salary
paid before any deductions of any kind whatsoever excluding overtime, bonuses, commissions and
other extraordinary compensation.

     2.3 Bank. “Bank” means the Federal Home Loan Bank of Dallas, an instrumentality of the
United States government.

     2.4 Beneficiary. “Beneficiary” means the individual, trustee, or estate designated by the
Participant to receive the Participant’s Benefit in the event of his death.

     2.5 Benefit. “Benefit” means the balance in the Participant’s Account.

     2.6 Board. “Board” means The Board of Directors for the Federal Home Loan Bank of Dallas.

     2.7 Code. “Code” means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code includes not only the section but any comparable section or sections
of any future legislation that amends, supplements, or supersedes the section.

 

 

     2.8 Contributions. “Contributions” mean contributions by the Bank under this Plan to
Participant Accounts, as provided by Article IV.

     2.9 Disability. “Disability” shall mean the date when a Participant will be eligible to
receive payments due to “disability” as defined in the applicable long-term disability plan of the
Bank.

     2.10 Effective Date. “Effective Date” means January 1, 2003, which is the Effective Date
of the Plan.

     2.11 Employee. “Employee” means any employee of the Bank who is performing services for
the Bank and is receiving compensation for such services.

     2.12 Group One Participants. “Group One Participants” means Employees who (i) are listed
on Exhibit “A” attached hereto and (ii) are eligible to receive a Contribution pursuant to
Subsection 4.1(a).

     2.13 Group Two Participants. “Group Two Participants” means Employees who (i) are listed
on Exhibit “B” attached hereto, (ii) were not eligible to receive a Bank matching contribution
under the Thrift Plan on December 31, 2002, (iii) were employed by the Bank on June 30, 2003, and
(iv) are eligible to receive a Contribution pursuant to Subsection 4.1(b).

     2.14 Group Three Participants. “Group Three Participants” means Employees who are listed
on Exhibit “C” attached hereto and are eligible to receive Contributions pursuant to Subsection
4.1(c).

     2.15 Investment Performance. “Investment Performance” means the earnings or losses
attributable to the contributions as more specifically described in Article V.

     2.16 Normal Retirement Age. “Normal Retirement Age” shall mean the sixty-second
(62nd) birthday of the Participant.

     2.17 Participant. “Participant” shall mean those employees of the Bank eligible to
participate in the Plan who are designated on Exhibits “A,” “B” and “C” attached hereto or who are
subsequently selected by the Board to participate in the Plan.

     2.18 Plan. “Plan” means the Federal Home Loan Bank of Dallas Special Non-Qualified
Deferred Compensation Plan.

     2.19 Plan Entry Date. “Plan Entry Date” means January 1, 2003 for the Participants
identified on Exhibits “A,” “B” and “C” and such other date as specified by the Board with respect
to any future Participants who are selected to participate in the Plan.

     2.20 Plan Year. “Plan Year” means the 12-consecutive-month period beginning on January 1
and ending on December 31 of each calendar year.

     2.21 Thrift Plan. The words “Thrift Plan” means the Financial Institutions Thrift Plan as
adopted by the Federal Home Loan Bank of Dallas.

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     2.22 Trustees, Trust, Trust Agreement, Trust Assets and Trust Fund. “Trustees” shall mean
the Trustees, or their successors, named in that certain trust agreement (the “Trust Agreement”),
dated as of the same date as this Plan, which governs the “Trust” styled: “Federal Home Loan Bank
of Dallas Non-Qualified Deferred Compensation Trust,” being the trust which, in conjunction with
this Plan, shall hold and invest Contributions made by the Bank under the Plan. The words “Trust
Assets” and “Trust Fund” shall mean the assets held in the Trust. The Trust shall be a “grantor
trust” as defined in Section 671 of the Code.

ARTICLE III

ELIGIBILITY FOR PARTICIPATION

     3.1 Participation. The Group One Participants identified on Exhibit “A” attached hereto
are eligible to participate in the Plan effective January 1, 2003 if they were employed by the Bank
on June 30, 2003. Group Two Participants identified on Exhibit “B” attached hereto are eligible to
participate in the Plan for the Plan Year ending December 31, 2003 provided they were (i) employed
by the Bank on June 30, 2003, and (ii) were not eligible to receive a matching contribution by the
Bank pursuant to the terms of the Thrift Plan as of December 31, 2002. Group Three Participants
identified on Exhibit “C” attached hereto are eligible to participate in the Plan effective
November 1, 2004. No other Employee shall ever become eligible to participate in this Plan unless
the Board specifically selects such Employee for participation in the Plan.

     3.2 Cessation of Participation. Participants shall not be eligible to participate in the
Plan if they are no longer employed by the Bank or the Board elects to remove them as a Participant
in the Plan in future Plan Years.

ARTICLE IV

CONTRIBUTIONS

     4.1 Contributions by the Bank. The Contributions to a Participant’s Account shall be made
solely by the Bank and Contributions by Participants are not permitted. Contributions to a
Participant’s Account will only be made in the sole discretion of the Board. Contributions for the
2003 Plan Year will be made as follows:

          (a) Group One Participants: The Bank will contribute the amount described on Exhibit
“A” attached hereto to Group One Participants’ Accounts.

          (b) Group Two Participants: Group Two Participants shall have contributed to their
Account an amount as determined in the sole discretion of the Bank. For the Plan Year ending
December 31, 2003, the Bank shall contribute an amount described on Exhibit “B” attached hereto.

          (c) Group Three Participants: The Bank will make an initial contribution of the
amount described on Exhibit “C” attached hereto to Group Three Participants’ Accounts. Further
Contributions may be made in the discretion of the Board.

          The fact that the Bank makes a Contribution to a Participant’s Account for the Plan Year
ending December 31, 2003, does not require the Bank to make Contributions to such

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Participant’s Account for any Plan Year commencing after December 31, 2003. Participants will
be notified by the Bank of the amount of Contributions made in subsequent Plan Years.

     4.2 Recordkeeping. Records for each Participant under this Plan are maintained on the
basis of the January 1 through December 31 Plan Year. At least once a Plan Year, the Bank will
send the Participant a report summarizing the status of his Account. Similar reports or
illustrations may be obtained by the Participant upon termination of employment or at any other
time by writing directly to the Bank’s Director of Human Resources.

     4.3 Limitations. Notwithstanding anything to the contrary contained in this Plan, the
obligation of the Bank to make Contributions is subject to the provisions relating to the amendment
and termination of the Plan; provided that no amendment or termination will affect any obligation
of the Bank to make Contributions with respect to any Plan Years before the date of such amendment
or termination.

ARTICLE V

INVESTMENT FUNDS

     5.1 Investment Funds. Amounts contributed to the Trust representing Contributions to Group
One and Group Two Participant Accounts will be invested at the discretion of the Trustee. Amounts
contributed to the Trust representing Contributions to Group Three Participant Accounts will be
invested based upon the investment election filed by the Group Three Participant. Group Three
Participants will be permitted to select among the same investment alternatives offered under the
Deferred Compensation Plan of the Federal Home Loan Bank of Dallas.

     5.2 Allocation of Investment Performance. At the end of each calendar quarter, the
Investment Performance of Trust Assets attributable to Group One Participant and Group Two
Participant Accounts established under this Plan will be allocated to the Accounts of Participants
as determined by the Trustee each Plan Year based upon the ratio as of the first day of such
calendar quarter that each Participant’s Account balance bears to the total of the Account balances
of all Group One and Group Two Participants held by the Trust that are attributable to this Plan.
The Investment Performance of the Trust Assets attributable to the Group Three Participant Accounts
will be determined based upon the actual performance of the investment alternatives selected by the
Participant.

ARTICLE VI

VESTING

     6.1 Termination of Employment – Vesting of Account. Unless sooner vested, a Participant
will have a 100% vested and nonforfeitable interest in the balance of his Account upon attaining
Normal Retirement Age or terminating employment due to Disability or death. Provided however, the
Board may accelerate the vesting of a Participant’s interest in the balance of his or her Account
upon termination of employment due to special circumstances as determined by the Board in its sole
and absolute discretion.

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     6.2 Vesting.

          (a) Earlier Vesting for Group Two Participants. Group Two Participants shall vest and
have nonforfeitable rights in the balance of their Account in accordance with the percentages set
forth in the following table:

	 	 	 
	Years of Credited	 	Amount of
	Service Completed	 	Vested Benefit
	0	 	0%
	 
	 	 
	1	 	100%

          (b) Group Three Participants. Group Three Participants shall vest and have
nonforfeitable rights in the balance of their Account at the date specified on Exhibit “C” with
respect to the initial Contribution and upon the date specified by the Board for future
Contributions.

     6.3 Forfeitures. In the event that a Participant terminates employment at any point in
time, other than termination due to death or Disability and if the Participant is less than 100%
vested in his Benefit, then, the Participant shall forfeit the unvested portion of such Benefit, if
any, and such unvested portion will be applied to reduce the Bank’s Contribution to the Plan.

     6.4 No Forfeitures for Cause. The vested and nonforfeitable Benefit represented by the
balance of a Participant’s Account shall not be forfeited regardless of whether the Participant’s
employment is terminated for cause.

ARTICLE VII

BENEFITS

     7.1 Retirement Benefits. Except for payments due for an unforeseeable emergency as
discussed in Section 7.7 below, the Participant’s vested Account balance will only be paid
following retirement, Disability or earlier termination of employment as described below.

          (a) Installment Payments. If a Participant’s vested Account balance is at least
$25,000, the Participant is eligible to elect quarterly installment payments payable over a period
of 1 to 5 years. The first installment shall commence within 30 days of the calendar quarter
following the Participant’s date of termination or date of Disability with each subsequent
quarterly installment paid within 30 days of the first day of each subsequent calendar quarter
until all installment payments have been paid. If a Participant qualifies for an installment
payment but fails to make an effective designation as to the method of payment, the Participant’s
Account will be distributed in a lump sum.

          (b) Lump Sum Payment. If a Participant (i) terminates employment for any reason with
a vested Account balance of less than $25,000 or (ii) elects to receive payment in the form of a
single lump sum payment, payment will be made in the form of a lump sum within 30

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days following the last day of the month of the Participant’s date of termination of
employment or Disability.

          (c) Changes in Method of Payment. Subject to such other restrictions as imposed by
the Code, the method of payment may be changed from time to time by the Participant with the
approval of the Bank, but in no event will such change be considered valid if the change occurs
within the 12-month period prior to the date payment is scheduled to commence.

     7.2 Application for Benefits. Procedures for receipt of benefits are initiated by writing
directly to the Bank. Benefits will be payable by the Bank upon receipt of a satisfactorily
completed application for benefits and supporting documents. The necessary forms will be provided
to the Participant, the surviving spouse, or the Beneficiary by the Bank.

     7.3 Payment to Beneficiary. If a Participant dies with a balance credited to the
Participant’s Account the then current vested balance of the Participant’s Account shall be paid to
the Participant’s Beneficiary in a lump sum.

     7.4 Beneficiary Designations. A Participant shall designate on a Beneficiary designation
form provided by the Bank a Beneficiary who, upon the Participant’s death, will receive payments
that otherwise would have been paid to the Participant under the Plan. All Beneficiary
designations must be in writing. Beneficiary designations will be effective only if and when
delivered to the Bank during the lifetime of the Participant. A Participant may change a
Beneficiary or Beneficiaries by filing a new Beneficiary designation form. The latest Beneficiary
designation form shall apply to the Accounts of the Participant. If a Beneficiary of a Participant
predeceases the Participant, the designation of such Beneficiary shall be void. If a Beneficiary
to whom benefits under the Plan remain unpaid dies after the Participant and the Participant failed
to specify a contingent Beneficiary on the appropriate Beneficiary designation form, the balance of
the Participant’s Account will be paid to such Beneficiary’s estate. If a Participant fails to
designate a Beneficiary or if such designation is ineffective, in whole or in part, any payment
that otherwise would have been paid to such Participant shall be paid to the Participant’s estate.

     7.5 Changes in Payment Date. If the Participant experiences an unforeseeable emergency,
payment of the vested portion of the Participant’s Account, prior to the Participant’s termination
date may occur with the approval of the Bank subject to the following conditions:

          (a) The maximum emergency withdrawal cannot exceed the lesser of the amount necessary to
alleviate the financial hardship or 100% of the vested Account balance;

          (b) The Participant must submit a written request to the Bank at least 30 days prior to the
date of payment the Participant requests. The written notice must state the reason necessitating
the early payment and provide documentation that the financial hardship cannot be satisfied by
other assets;

          (c) The emergency must result from a severe financial hardship to the Participant resulting
from (1) a sudden and unexpected illness or accident of the Participant or of a dependent (as
defined in Section 152(a) of the Code) of the Participant, (2) loss of the

- 6 -

 

Participant’s property due to casualty, or (3) other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the Participant. The need to
send a Participant’s child to college or the desire to purchase a home shall not be considered
emergencies for purposes of this Subsection 7.5; and

          (d) The decision whether to allow an emergency withdrawal from the Participant’s Account shall
be made in the sole and absolute discretion of the Bank.

ARTICLE VIII

ADMINISTRATION

     8.1 Plan Administrator. Federal Home Loan Bank of Dallas, 8500 Freeport Parkway South,
Suite 100, Irving, Texas 75063-2547, is the Administrator of this Plan, to be responsible for
performing duties required for the operation of the Plan.

     8.2 Authority of the Bank. The Bank has all the powers and authority expressly conferred
upon it herein and further shall have discretionary and final authority to manage and control the
assets of the Plan, to determine all questions concerning eligibility and Contributions under the
Plan, to interpret and construe all terms of the Plan, including any uncertain terms in its sole
discretion, and to determine any disputes arising under and all questions concerning administration
of the Plan. Any determination made by the Bank shall be given deference, in the event it is
subject to judicial review, and shall be overturned only if it is arbitrary or capricious. In
exercising these powers and authority, the Bank will at all times exercise good faith, apply
standards of uniform application, and refrain from arbitrary action. The Bank may employ
attorneys, agents, and accountants as it finds necessary or advisable to assist it in carrying out
its duties. The Bank, by action of its Board, may designate a person or persons other than the
Bank to carry out any of its powers, authority, or responsibilities. Any delegation will be set
forth in writing.

     8.3 Action of the Bank. Any act authorized, permitted, or required to be taken by the Bank
under the Plan, which has not been delegated in accordance with Section 8.2, may be taken by a
majority of the members of the Board, either by vote at a meeting, or in writing without a meeting.
All notices, advice, directions, certifications, approvals, and instructions required or
authorized to be given by the Bank under the Plan will be in writing and signed by either (i) a
majority of the members of the Board, or by any member or members as may be designated by an
instrument in writing, signed by all members, as having authority to execute the documents on its
behalf, or (ii) as delegated to an Officer of the Bank or a person who becomes authorized to act
for the Bank in accordance with the provisions of Section 8.2. Any action taken by the Bank which
is authorized, permitted, or required under the Plan and is in accordance with the Bank’s
contractual obligations are final and binding upon the Bank, and all persons who have or who claim
an interest under the Plan, and all third parties dealing with the Bank.

     8.4 Claims Procedure.

          (a) The Bank shall make all determinations as to the right of any person to Benefits. If any
request for Benefits is wholly or partially denied, the Bank shall notify the

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person requesting such Benefits, in writing, of such denial, including in such notification
the following information:

               (i) the specific reason or reasons for such denial;

               (ii) the specific references to the pertinent Plan provisions upon which the denial is based;

               (iii) a description of any additional material and information which may be needed to clarify
the request, including an explanation of why such information is required; and

               (iv) an explanation of this Plan’s review procedure with respect to denial of such Benefits.

Any such notice to be delivered to any Participant or Beneficiary shall be personally delivered
within a reasonable time to such Participant by obtaining a signed receipt therefore or shall be
mailed by certified or registered mail with return receipt requested to such Participant or
Beneficiary. Such notice shall be written to the best of the Bank’s ability in a manner that may
be understood without legal counsel.

          (b) Any Participant or Beneficiary whose claim has been denied in accordance with the
foregoing Subsection (a) herein may appeal to the Bank for review of such denial by making a
written request therefor within 60 days of receipt of the notification of such denial. Such
Participant or Beneficiary may examine documents pertinent to the review and may submit to the Bank
written issues and comments. Within 60 days (45 days in the case of a claim involving a disability
determination) after receipt of the request for review, the Bank shall communicate to the claimant,
in writing, its decision, and the communication shall set forth the reason or reasons for the
decision and specific reference to those Plan provisions upon which the decision is based.

ARTICLE IX

GENERAL PROVISIONS AND LIMITATIONS REGARDING BENEFITS

     9.1 Non-Alienation of Retirement Rights or Benefits. No right or benefit under this Plan
shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance, or charge, and
any attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge the same shall be
void. No right or benefit hereunder shall in any manner be liable for or subject to the debts,
contracts, liabilities, or torts of the person entitled to such benefit. If any Participant or the
Participant’s Beneficiary under this Plan should become bankrupt or attempt to anticipate,
alienate, sell, assign, pledge, encumber, or charge any right to a benefit hereunder, then, such
right or benefit shall cease and terminate.

     9.2 Amendment and Termination. Subject to the last sentence of this Section 9.2, the Bank
reserves the right at any time to amend, otherwise modify, or terminate the Plan, or to discontinue
any further Contributions to Participants’ Accounts or payments under the Plan, by resolution of
its Board. In the event of a termination of the Plan or complete discontinuance of Plan
Contributions, the Bank will notify the Participants of the termination. No amendment,

- 8 -

 

modification or termination may reduce the then vested Account balance of any Participant or the
obligation of the Bank and Plan to make payments of such vested Participant’s Account in accordance
with the provisions of the Plan in effect immediately prior to such amendment, modification or
termination and as allowed under the Code. The Bank may, at its sole discretion, amend or modify
the Plan to bring it in compliance with the Code.

     9.3 Funding. The benefits described in this Plan are obligations of the Bank to pay
compensation for services, and shall constitute a liability to the Participants and/or their
Beneficiaries in accordance with the terms hereof. All amounts paid under this Plan shall be paid
in cash from the general assets of the Bank and shall be subject to the general creditors of the
Bank. Benefits shall be reflected on the accounting records of the Bank but shall not be construed
to create, or require the creation of, a trust, custodial or escrow account. No Participant shall
have any right, title or interest whatever in or to any investment reserves, accounts, funds or
assets that the Bank may purchase, establish or accumulate to aid in providing the benefits
described in this Plan. Nothing contained in this Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust or a fiduciary relationship of any kind
between the Bank and a Participant or any other person; provided, however, the Bank may establish
and/or continue the Trust. Neither a Participant nor the Beneficiary of a Participant shall
acquire any interest hereunder greater than that of an unsecured creditor of the Bank who is the
Employer of such Participant.

     9.4 Plan Non-Contractual. Nothing contained in this Plan will be construed as a commitment
or agreement on the part of any person to continue his or her employment with the Bank, and nothing
contained in this Plan will be construed as a commitment on the part of the Bank to continue the
employment or the rate of compensation of any person for any period, and all employees of the Bank
will remain subject to discharge to the same extent as if the Plan had never been put into effect.

     9.5 Claims of Other Persons. The provisions of the Plan will in no event be construed as
giving the Participant or any other person, firm, or corporation, any legal or equitable right
against the Bank, its officers, employees, or directors, except the rights that are specifically
provided for in this Plan or created in accordance with the terms and provisions of this Plan.

     9.6 Finality of Determination. All determinations with respect to the crediting of Years
of Credited Service under the Plan are made on the basis of the records of the Bank, and all
determinations made are final and conclusive upon employees, former employees, and all other
persons claiming a benefit interest under the Plan. There will be no duplication of Years of
Credited Service credited to an employee for any one period of his employment.

     9.7 Merger, Consolidation, or Transfers of Plan Assets. The Plan will not be merged or
consolidated with any other Plan, nor will any of its assets or liabilities be transferred to
another Plan, unless, immediately after a merger, consolidation, or transfer of assets or
liabilities, each Participant would receive a benefit under the Plan which is at least equal to the
benefit he or she would have received immediately prior to a merger, consolidation, or transfer of
assets or liabilities (assuming in each instance that the Plan had then terminated).

- 9 -

 

     9.8 Tax Consequences Not Guaranteed. The Bank does not warrant that this Plan will have
any particular tax consequences for Participants or Beneficiaries and shall not be liable to them
if tax consequences they anticipate do not actually occur. The Bank shall have no obligation to
indemnify a Participant or Beneficiary for lost tax benefits (or other damage or loss) in the event
the Plan is amended or terminated as permitted under Section 10.1, accelerated, or because of
change in Plan design or funding; e.g., establishment of a “secular trust.”

     9.9 Tax Withholding. The Employer may withhold from a payment or accrued benefit or from
the Participant’s other compensation any federal, state, or local taxes required by law to be
withheld with respect to such payment or accrued benefit and such sums as the Bank may reasonably
estimate as necessary to cover any taxes for which the Employer may be liable and which may be
assessed with regard to Plan Contributions or payments under this Plan.

     9.10 Governing Law. Except as provided under federal law, the provisions of the Plan are
governed by and construed in accordance with the laws of the State of Texas.

     9.11 Construction. Except when otherwise indicated by the context, any masculine
terminology when used in the Plan shall also include the feminine gender, and the definition of any
term in the singular shall also include the plural.

     9.12 Severability. If any provision of the Plan is held invalid or illegal for any reason,
any illegality or invalidity shall not affect the remaining provisions of the Plan, and the Plan
shall be construed and enforced as if the illegal or invalid provision had never been contained
therein. The Bank shall have the privilege and opportunity to correct and remedy such questions of
illegality or invalidity by amendment.

     IN WITNESS WHEREOF, this amended and restated Plan has been executed on behalf of Federal Home
Loan Bank of Dallas this 29th day of October, 2004.

	 	 	 	 	 
	 	 	FEDERAL HOME LOAN BANK OF DALLAS
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Timothy J. Heup
	 	 	 	 	 
	 

	 	 	 	Timothy J. Heup, Senior Vice President

ATTEST:

	 	 	 
	     /s/ Karen Krug

	 	 
	 	 	 
	Karen Krug, Senior Vice President and
	 	 
	Corporate Secretary
	 	 

- 10 -

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