Document:

exv10w3

 

Exhibit 10.3

 

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

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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,

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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 -NUMBER                                                                UNITS

U-__________

  SEE REVERSE FOR                     DG ACQUISITION CORP.
CERTAIN DEFINITIONS

                                                                           CUSIP

UNITS CONSISTING OF ONE SHARE OF COMMON STOCK AND TWO WARRANTS EACH TO PURCHASE
                            ONE SHARE OF COMMON STOCK

THIS CERTIFIES THAT ____________________________________________________________
is the owner of _______________________________________________________ Units.

Each Unit ("Unit") consists of one (1) share of common stock, par value $.0001
per share ("Common Stock"), of DG Acquisition Corp., a Delaware corporation (the
"Company"), and two warrants (the "Warrants"). Each Warrant entitles the holder
to purchase one (1) share of Common Stock for $5.00 per share (subject to
adjustment). Each Warrant will become exercisable on the later of (i) the
Company's completion of a merger, capital stock exchange, asset acquisition or
other similar business combination and (ii) ___________, 2006, and will expire
unless exercised before 5:00 p.m., New York City Time, on ____________, 2009, or
earlier upon redemption (the "Expiration Date"). The Common Stock and Warrants
comprising the Units represented by this certificate are not transferable
separately prior to __________, 2005, subject to earlier separation in the
discretion of EarlyBirdCapital, Inc. The terms of the Warrants are governed by a
Warrant Agreement, dated as of _______, 2005, between the Company and
Continental Stock Transfer & Trust Company, as Warrant Agent, and are subject to
the terms and provisions contained therein, all of which terms and provisions
the holder of this certificate consents to by acceptance hereof. Copies of the
Warrant Agreement are on file at the office of the Warrant Agent at 17 Battery
Place, New York, New York 10004, and are available to any Warrant holder on
written request and without cost.

     This certificate is not valid unless countersigned by the Transfer Agent
     and Registrar of the Company.

     Witness the facsimile seal of the Company and the facsimile signature of
     its duly authorized officers.

By
   ----------------------------                     ----------------------------
          Vice Chairman                             Secretary

                     [SEAL OF DG ACQUISITION CORP. OMITTED]

                              DG ACQUISITION CORP.

     The Company will furnish without charge to each stockholder who so
requests, a statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof of the Company and the qualifications, limitations, or restrictions of
such preferences and/or rights.

     The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>

TEN COM - as tenants in common                          UNIF GIFT MIN ACT - ______ Custodian _______
TEN ENT - as tenants by the entireties                                      (Cust)           (Minor)
JT TEN  - as joint tenants with right of survivorship                under Uniform Gifts to Minors
          and not as tenants in common                               Act ______________
                                                                                  (State)
</TABLE>

Additional Abbreviations may also be used though not in the above list.

     For value received, ___________________________ hereby sell, assign and
     transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
    IDENTIFYING NUMBER OF ASSIGNEE

----------------------------------------

----------------------------------------

________________________________________________________________________________
                  (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS,
                        INCLUDING ZIP CODE, OF ASSIGNEE)

________________________________________________________________________________

________________________________________________________________________________

__________________________________________________________________________ Units

represented by the within Certificate, and do hereby irrevocably constitute and
appoint

_______________________________________________________________________ Attorney
to transfer the said Units on the books of the within named Company will full
power of substitution in the premises.

Dated ______________

                       _________________________________________________________
                       NOTICE: The signature to this assignment must correspond
                               with the name as written upon the face of the
                               certificate in every particular, without
                               alteration or enlargement or any change whatever.

Signature(s) Guaranteed:

____________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO
S.E.C. RULE 17Ad-15).

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]