Document:

exv10w5

 

Exhibit 10.5

 

 

Federal Home Loan Bank of Dallas

Special Non-Qualified Deferred Compensation Plan

 

 

(Amended and Restated Effective: January 1, 2008)

 

 

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 Disabled or 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 Separation from Service
	 	 	2	 
	2.22 Thrift Plan
	 	 	3	 
	2.23 Trustees, Trust, Trust Agreement, Trust Assets and Trust Fund
	 	 	3	 
	2.24 Years of Credited Service
	 	 	3	 
	 
	 	 	 	 
	ARTICLE III ELIGIBILITY FOR PARTICIPATION
	 	 	3	 
	 
	 	 	 	 
	3.1 Participation
	 	 	3	 
	3.2 Cessation of Participation
	 	 	3	 
	 
	 	 	 	 
	ARTICLE IV CONTRIBUTIONS
	 	 	4	 
	 
	 	 	 	 
	4.1 Contributions by the Bank
	 	 	4	 
	4.2 Recordkeeping
	 	 	4	 
	4.3 Limitations
	 	 	4	 

- i -

 

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE V INVESTMENT FUNDS
	 	 	4	 
	 
	 	 	 	 
	5.1 Investment Funds
	 	 	4	 
	5.2 Allocation of Investment Performance
	 	 	4	 
	 
	 	 	 	 
	ARTICLE VI VESTING
	 	 	5	 
	 
	 	 	 	 
	6.1
Termination of Employment — Vesting of Account
	 	 	5	 
	6.2 Vesting
	 	 	5	 
	6.3 Forfeitures
	 	 	5	 
	6.4 No Forfeitures for Cause
	 	 	5	 
	 
	 	 	 	 
	ARTICLE VII PAYMENT
	 	 	5	 
	 
	 	 	 	 
	7.1 Payment Upon Separation from Service or Disability
	 	 	5	 
	7.2 Payment Upon Death
	 	 	6	 
	7.3 Beneficiary Designations
	 	 	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
	 	 	9	 
	9.9 Tax Withholding
	 	 	10	 
	9.10 Governing Law
	 	 	10	 
	9.11 Construction
	 	 	10	 
	9.12 Severability
	 	 	10	 

- ii - 

 

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. As a result of the enactment of Code Section 409A, the Board has
determined that it is necessary to amend and restate the Plan effective January 1, 2008.

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 Disabled or Disability. “Disabled or Disability” shall mean the Participant is unable
to engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or last for a continuous period of not
less than 12 months. The Committee shall determine whether the Participant meets this criteria in
accordance with Section 409A of the Code. Provided, a Participant will be deemed to be Disabled if
the Participant becomes eligible to receive disability benefits under the long-term disability
benefit plan sponsored by the Bank.

     2.10 Effective Date. “Effective Date” means January 1, 2008, which is the Effective Date
of the amended and restated 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 are so
designated by the Board.

     2.13 Group Two Participants. “Group Two Participants” means Employees who are so
designated by the Board.

     2.14 Group Three Participants. “Group Three Participants” means Employees who are so
designated by the Board.

     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 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 Separation from Service. An Employee incurs a “Separation from Service” upon
termination of employment with the Bank. Whether a Separation from Service has occurred shall be
determined by the Board in accordance with Code Section 409A.

- 2 -

 

     Except in the case of an Employee on a bona fide leave of absence as provided below, an
Employee is deemed to have incurred a Separation from Service if the Bank and the Employee
reasonably anticipated that the level of services to be performed by the Employee after a certain
date would be reduced to 20% or less of the average services rendered by the Employee during the
immediately preceding 36-month period (or the total period of employment, if less than 36 months),
disregarding periods during which the Employee was on a bona fide leave of absence.

     An Employee who is absent from work due to military leave, sick leave, or other bona fide
leave of absence shall incur a Separation from Service on the first day immediately
following the later of (i) the six-month anniversary of the commencement of the leave or (ii)
the expiration of the Employee’s right, if any, to reemployment under Bank policy, contract or
state/federal statute.

     2.22 Thrift Plan. The words “Thrift Plan” means the Pentegra Defined Contribution Plan for
Financial Institutions as adopted by the Federal Home Loan Bank of Dallas

     2.23 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.

     2.24 Years of Credited Service. “Years of Credited Service” shall have the same definition
and shall be calculated in the same manner as provided in the Thrift Plan.

ARTICLE III

ELIGIBILITY FOR PARTICIPATION

     3.1 Participation. The Group One Participants identified on Exhibit “A” attached hereto
were 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 were
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 were 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. Also, in the event a Participant’s Account is
reduced to zero due to forfeiture of the Participant’s unvested Account balance under Section 6.3,
the Participant will no longer be eligible to participate in the Plan.

- 3 -

 

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. 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 Participant Accounts will be invested at the discretion of the Trustee during the period of
Participant’s employment until Separation from Service. Following Separation from Service, Group
One Participant Accounts will either be disbursed in a lump sum payment, or if installment payments
are elected, be deposited into the Deferred Compensation Plan and invested based upon the
investment election filed by the Group One Participant. During this period, Group One 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. Amounts contributed to the Trust
representing Contributions to 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 Participants who are currently employed with the Bank and Group Two Participant Accounts
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 under the Trustees’ investment discretion. The Investment Performance of the Trust
Assets attributable to the Group Three Participant Accounts and the terminated Group One
Participant Accounts

- 4 -

 

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.

     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 Account
	0

	 	 	0	%
	1

	 	 	100	%

          (b) Group Three Participants. Group Three Participants shall vest and have
nonforfeitable rights in the balance of their Account upon the date specified by the Board.

     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 Account, then, the Participant shall forfeit the unvested portion of such Account, if
any, and such unvested portion may be applied to reduce the Bank’s contribution to the Plan. The
Board may elect to reduce or eliminate all or any portion of a Participant’s unvested Account
balance. Forfeitures may be applied to reduce the Bank’s future contributions 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 for any reason.

ARTICLE VII

PAYMENT

     7.1 Payment Upon Separation from Service or Disability. The Participant’s vested Account
balance will be paid upon the earlier to occur of Separation from Service, Disability or Death. In
the event payment is triggered by Separation from Service or Disability, the Participant’s Account
will be paid in either a lump sum or installments. The Participant must file an election with the
Bank on or before March 31, 2008 with respect to existing Accounts. New

- 5 -

 

Participants must file an
election as to method of payment within 30 days of the date that the Board selects them for
participation in the Plan.

          (a) Installment Payments. The Participant is eligible to elect annual installment
payments payable within 30 days of January 1st each year and for a period of 2 to 20
years. The first installment shall commence within 30 days of January 1st of the
calendar year following the Participant’s Separation from Service or date of Disability with each
subsequent annual installment paid within 30 days of the first day of January of each subsequent
calendar year until all installment payments have been paid.

          (b) Lump Sum Payment. If a Participant (i) fails to make an election as to the method
of payment 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 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. The method of payment of a Participant’s Benefit
may be changed from time to time by the Participant, but in no event will such change be considered
valid if the change occurs within the twelve-month period prior to the date payment would have
otherwise commenced with the Bank. Any requests to change the method of payment will not take
effect for twelve months following the date it is received by the Board and the first payment with
respect to such election is deferred for a period of five years from the date such payment would
otherwise have been made.

     7.2 Payment Upon Death. 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 within 90 days of the Participant’s death.

     7.3 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.

- 6 -

 

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 or
eligibility to participate in the Plan. If any request for Benefits is wholly or partially denied,
the Bank shall notify the 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;

- 7 -

 

               (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 Contributions,
the Bank will notify the Participants of the termination. No amendment, 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. Provided further, no amendment or proposed termination will be
effective to the extent it provides for the payment of Benefits under this Plan in violation of
Code Section 409A. The Bank may, at its sole discretion, amend or modify the Plan to bring it in
compliance with the Code.

- 8 -

 

     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.

     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).

     9.8 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 9.2, payment of Benefits are
accelerated, or because of change in Plan design or funding; e.g., establishment of a “secular
trust.”

- 9 -

 

     9.9 Tax Withholding. The Bank will 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 Bank 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 26th day of March, 2008 to be effective retroactively back to
January 1, 2008.

	 	 	 	 	 
	 	FEDERAL HOME LOAN BANK OF DALLAS

 	 
	 	By:  	/s/ Timothy J. Heup
 	 
	 	 	Timothy J. Heup, Senior Vice President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	ATTEST:

 	 
	 	/s/ Brehan Chapman
 	 
	 	Brehan Chapman, Corporate Secretary 	 
	 	 	 
	 

- 10 -exv4w7

 

Exhibit 4.7

Form of

PURCHASE WARRANT

EXERCISABLE FOR A 30-DAY PERIOD

					
	 
	 	COMMENCING ON THE EFFECTIVE DATE OF
	 	For the Purchase of

A REGISTRATION STATEMENT, TO BE FILED

No.      
                
                
                
           SOLELY AT THE COMPANY’S DISCRETION

PURCHASE WARRANT

	 	 	 	 	 
	 
	 	PARALLEL
	 	Common Shares of
	 
	 	Petroleum Corporation
	 	Parallel Petroleum Corporation
	 
	 	(a Delaware corporation)
	 	$.01 Par Value per Share

			
	 	 	 
	THIS CERTIFIES THAT, for value received
	 	CUSIP 699157 11 1

(the “Holder”) as registered owner of this Warrant, is entitled at any time or from time to
time at or after such date as a Registration Statement covering exercise hereof is declared
effective by the Securities and Exchange Commission, but only for a thirty day period after such
date, to subscribe for, purchase and receive up to the above-referenced number of fully paid and
nonassessable Common Shares, $.01 par value per share (the “Common Shares”), of Parallel Petroleum
Corporation, a Delaware corporation (the “Company”), at the price of $6.00 per Common Share (the
“Exercise Price”), upon presentation and surrender of this Warrant and upon payment of the Exercise
Price for such Common Shares to the Company at the principal office of the Company or to the
Company’s stock transfer agent, American Stock Transfer, Inc., Denver, Colorado; provided, however,
that upon the occurrence of any of the events specified in the Statement of Rights of Warrant
Holders, a copy of which is attached as Annex I hereto and by this reference made a part hereof,
the rights granted by this Warrant shall be adjusted as therein specified. Upon exercise of this
Warrant, the form of election hereinafter provided for must be duly executed and the instructions
for registration of the Common Shares acquired by such exercise must be completed. If the
subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Mountain Time
on the 30th day after a Registration Statement covering exercise hereof is declared
effective by the Securities and Exchange Commission, this Warrant shall become and be void without
further force or effect and all rights represented hereby shall cease and expire.

     This Warrant may be assigned by the Holder in whole or in part by execution by the Holder of
the form of assignment hereinafter provided for. In the event of any assignment made as aforesaid,
the Company or its stock transfer agent, upon request and upon surrender of this Warrant by the
Holder at the principal office of the Company or at the office of the Company’s stock transfer
agent, accompanied by payment of all transfer taxes, if any, payable in connection therewith, shall
transfer this Warrant on the books of the Company and shall execute and deliver a new Warrant or
Warrants of like tenor to the appropriate assignee expressly evidencing the right to purchase the
aggregate number of Common Shares purchasable hereunder or such portion of such aggregate number as
shall be contemplated by any such assignment.

     This Warrant may be exercised or assigned in whole or in part. In the event of the exercise or
assignment hereof in part only, the Company shall cause to be delivered to the Holder a new Warrant
of like tenor to this Warrant in the name of the Holder evidencing the right of the Holder to
purchase the number of Common Shares purchasable hereunder as to which this Warrant has not been
exercised or assigned.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in facsimile by its duly
authorized officers and the facsimile seal of the Company affixed thereto on December 28, 1984.

PARALLEL PETROLEUM CORPORATION

                    a Delaware Corporation

	 	 	 	 	 	 	 
	 	 	COUNTERSIGNED:	 	 
	 

	 	 	 	American Stock Transfer, Inc.	 	 
	 

	 	 	 	          P. O. Box 1596	 	 
	 

	 	 	 	  Denver, Colorado 80201	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Transfer Agent and Registrar Authorized Signature
	 	 

[CORPORATE SEAL]

	 	 	 	 	 	 	 
	 

	 	/s/ Larry C. Oldham

          Secretary
	 	 	 	/s/ Frank S. Delay

          President

 

 

ANNEX I TO SHAREHOLDERS STOCK PURCHASE WARRANT

PARALLEL PETROLEUM CORPORATION

STATEMENT OF RIGHTS OF WARRANT HOLDERS

     (a) In the event, prior to the expiration of the Warrant by exercise or by its terms, the
Company shall issue any of its Common Shares as a stock dividend or shall subdivide the number of
outstanding Common Shares into a greater number of shares, then, in either of such events, the then
applicable Purchase Price payable pursuant to this Warrant in effect at the time of such action
shall be reduced proportionately and the number of Common Shares at that time purchasable pursuant
to this Warrant shall be increased proportionately; and conversely, in the event that the Company
shall reduce the number of its Common Shares by combining such shares into a smaller number of
shares then, in such event, the then applicable Purchase Price payable pursuant to this Warrant in
effect at the time of such action shall be increased proportionately and the number of Common
Shares at that time purchasable pursuant to the Warrant shall be decreased proportionately. Any
dividend paid or distributed upon the Common Shares in shares of any other class of the Company or
securities convertible into Common Shares shall be treated as a dividend paid in Common Shares to
the extent that such Common Shares are issuable upon the conversion thereof.

     (b) In the event, prior to the expiration of this Warrant by exercise or by its terms, the
Company shall be recapitalized by reclassifying its outstanding Common Shares into shares with a
different par value, or by changing its outstanding Common Shares to shares without par value, or
in the event the Company or a successor corporation shall consolidate or merge with or convey all
or substantially all of its, or of any successor corporation’s property and assets to any other
corporation or corporations (any such other corporation being included within the meaning of the
term “successor corporation” hereinbefore used in the context of any consolidation or merger of any
other corporation with, or the sale of all or substantially all of the property of any such other
corporation to, another corporation or corporations), or in the event of any other material change
of the capital structure of the Company or of any successor corporation by reason of any
reclassification, reorganization, recapitalization, consolidation, merger or conveyance, a prompt,
proportionate, equitable, lawful and adequate provision shall be made whereby the Holder of this
Warrant shall thereafter have the right to purchase, upon the basis and the terms and conditions
specified in this Warrant, in lieu of Common Shares of the Company theretofore purchasable upon the
exercise of this Warrant, such shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for the number of Common Shares of the Company, theretofore
purchasable upon the exercise of this Warrant had such reclassification, reorganization,
recapitalization, consolidation, merger or conveyance not taken place, and in any such event, the
rights of the Holder of this Warrant to any adjustment in the number of Shares of Common Shares
purchasable upon exercise of this Warrant, as hereinbefore provided, shall continue and be
preserved in respect of any stock, securities or assets which the Holder becomes entitled to
purchase.

     (c) In the event the Company, at any time while this Warrant shall remain unexpired and
unexercised, shall sell all or substantially all of its property, or dissolves, liquidates, or
winds up its affairs, prompt, proportionate, equitable, lawful and adequate provision shall be made
as part of the terms of any such sale, dissolution, liquidation or winding up such that the Holder
of this Warrant may thereafter receive, upon exercise hereof, in lieu of each Common Share of the
Company which he would have been entitled to receive, the same kind and amount of any stock,
securities or assets as may be issuable, distributable or payable upon any such sale, dissolution,
liquidation or winding up with respect to each share of the Common Shares of the Company; provided,
however, that in the event of any such sale, dissolution, liquidation or winding up, the right to
exercise this Warrant shall terminate on a date fixed by the Company, such date so fixed to be not
earlier than 5:00 P.M. Mountain Time on the Thirtieth (30th) day next succeeding the
date on which notice of such termination of the right to execute this Warrant has been given by
mail to the Holder of this Warrant at this address as it appears on the books of the Company.

     (d) In the event, prior to the expiration of this Warrant by exercise or by its terms, the
Company shall take a record of the holders of its Common Shares for the purpose of entitling them
to purchase its Common Shares at a price per share more than ten percent (10%) below the then
current market price per share (as defined below) of its Common Shares at the date of taking such
record, then, (i) the number of Common Shares purchasable pursuant to the Warrant shall be
redetermined as follows: the number of shares of Common Shares purchasable pursuant to this Warrant
immediately prior to such adjustment (taking into account fractional interests to the nearest
one-thousandth of a share) shall be multiplied by a fraction, the numerator of
which shall be the number of Common Shares of the Company then outstanding (excluding the Common
Shares then owned by the Company) immediately prior to taking of such record; plus the number of
additional shares offered for purchase, and the denominator of which shall be the number of Common
Shares of the Company outstanding (excluding the Common Shares owned by the Company) immediately
prior to the taking of such record, plus the number of shares which the aggregate offering price of
the total number of additional shares so offered would purchase at such current market price; and
(ii) the Purchase Price purchasable pursuant to this Warrant shall be redetermined as follows: the
Purchase Price in effect immediately prior to the taking of such record, shall be multiplied by a
fraction, the numerator of which is the number of shares purchasable hereunder immediately prior to
the taking of such record, and the denominator of which is the number of shares purchasable
hereunder immediately after the taking of such record as determined pursuant to clause (i) above.
For the purpose hereof, the current market price per share of the Common Shares of the Company at
any date shall be deemed to be the average of the daily closing prices for thirty (30) consecutive
business days commencing forty-five (45) business days before the day in question. The closing
price for each day shall be the average of the highest bid-and-ask prices as reported by NASDAQ or,
if the Common Shares are not admitted to listing for trading thereon, then in the “pink sheets” of
the National Association of Securities Dealers, Inc., for the over-the-counter market in Denver,
Colorado, or in the local daily newspapers for such city, or if not reported, the average of the
highest bid-and-asked prices as furnished by any member of the New York Stock Exchange, Inc.
selected from time to time by the Company for such purpose.

     (e) Upon any exercise of this Warrant by the Holder, the Company shall not be required to
deliver fractions of the Common Shares, but prompt, proportionate, equitable, lawful and adequate
adjustment in the Purchase Price payable by the Holder shall be made in respect of any such
fraction of one share of the Common Shares on the basis of the Purchase Price per share then
applicable upon the exercise of this Warrant.

     (f) In the event, prior to the expiration of this Warrant by exercise or by its terms, the
Company shall determine to take a record of the holders of its Common Shares for the purpose of
determining Shareholders entitled to receive any stock dividend distribution or other right which
will cause any change or adjustment in the number, amount, price or nature of the Common Shares or
other stock, securities or assets deliverable upon the exercise of this Warrant pursuant to the
foregoing provisions, the Company shall give to the registered Holder of this Warrant at his
address as it appears on the books of the Company at least fifteen (15) days prior written notice
to the effect that it intends to take such a record. Such notice shall specify the date as of which
such record is to be taken; the purpose for which such record is to be taken; and the number,
amount, price and nature of the Common Shares or other stock, securities or assets which will be
deliverable upon exercise of this Warrant after the action for which such record will be taken has
been consummated. Without limiting the obligation of the Company to provide notice to the
registered Holders of the Warrant Certificates of corporate actions hereunder, the failure of the
Company to give notice shall not invalidate such corporate action of the Company.

     (g) The Company may deem and treat the registered Holder of this Warrant at any time as the
absolute owner hereof for all purposes, and the Company shall not be affected by any notice to the
contrary.

     (h) This Warrant shall not entitle the Holder hereof to any of the rights of Shareholders or
to any dividend declared upon the Common Shares unless the Holder shall have exercised this Warrant
and purchased the Common Shares prior to the record date fixed by the Board of Directors of the
Company for the determination of holders of Common Shares entitled to such dividend or other right.

     (i) No adjustment of the Purchase Price shall be made as a result of or in connection with (i)
the issuance of Common Shares of the Company pursuant to options, warrants and share purchase
agreements outstanding or in effect on the date hereof, (ii) the granting of additional option
plans of the Company as currently or thereafter in effect or as hereafter modified, renewed or
extended, or the issuance of shares of Common Shares of the Company upon exercise of any such
options, or (iii) the issuance of Common Shares in connection with acquisition of any type, in
connection with compensation arrangements with officers, employees or agents of the Company or any
Subsidiary, or under any circumstances other than those set forth in subsection (i) above.

2

 

FORM TO BE USED TO EXERCISE WARRANT:

PARALLEL PETROLEUM CORPORATION

119 North Colorado Street

Midland, Texas 79701

Date:                    , 19 ___

     The Undersigned hereby elects irrevocably to
purchase                      Common Shares of the Company
called for thereby, and hereby makes payment of $                    
(at the rate of $6.00 per Common Share) in payment of
the Exercise Price pursuant thereto Please issue the
Common Shares as to which this Warrant is exercised in
accordance with the instructions given below.

	 	 	 	 	 	 	 
	 

	 	Signature:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Signature Guaranteed:	 	 	 	 
	 

	 	 	 	 	 	 

INSTRUCTIONS FOR REGISTRATION OF

COMMON SHARES

	 	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 

(Print in Block Letters)
	 	 
	Address:
	 	 	 	 
	 

	 	 	 	 

NOTICE: The signature to this form to exercise must correspond with
the name as written upon the face of the within Warrant in every
particular without alteration or enlargement of any change whatsoever,
and must be guaranteed by a bank, other than a savings bank, or by a
trust company or by a firm having membership on a registered national
securities exchange.

FORM TO
BE USED TO ASSIGN WARRANT:

PARALLEL PETROLEUM CORPORATION

119 North Colorado Street

Midland, Texas 79701

ASSIGNMENT

(To be executed by the registered Holder to effect a

transfer of the within Warrant:)

     FOR VALUE RECEIVED,                                        does hereby sell, assign and transfer unto         
           
the right to purchase                      Common Shares of the Company evidenced by the within Warrant and does
hereby irrevocably constitute and appoint                                         attorney to transfer such right on the books of the Company with fullpower of substitution in the premises.

     DATED                    , 19___

	 	 	 	 	 
	 Signature:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 Signature Guaranteed:
	 	 	 	 
	 

	 	 	 	 

NOTICE: The signature to this form to exercise must correspond with NOTICE: The signature to this
form to exercise must correspond with
he name as written upon the face of the within Warrant in every he name as written
upon the face of the within Warrant in every
particular without alteration or enlargement of any change whatsoever, particular without
alteration or enlargement of any change whatsoever,
and must be guaranteed by a bank, other than a savings bank, or by a and must be guaranteed by
a bank, other than a savings bank, or by a
trust company or by a firm having membership on a registered national trust company or by a firm
having membership on a registered national
securities exchange. securities exchange.

TRANSFER FEE $5.00 FOR EACH NEW CERTIFICATE ISSUED.

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]