Document:

exv10w1

Exhibit 10.1

 

 

Federal Home Loan Bank of Dallas

Form of Special Non-Qualified Deferred Compensation Plan

 

 

(Amended and Restated Effective: January 1, 2009)

 

 

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	 	 	Rule of 70
	 	 	2	 
	 	2.22	 	 	Separation from Service
	 	 	3	 
	 	2.23	 	 	Thrift Plan
	 	 	3	 
	 	2.24	 	 	Trustees, Trust, Trust Agreement, Trust Assets and Trust Fund
	 	 	3	 
	 	2.25	 	 	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	 

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	 	 	 	 	 	 	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
	 	 	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. As a result of the enactment of Code Section 409A and other proposed
changes, the Board has determined that it is necessary to amend and restate the Plan effective
January 1, 2009.

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, 2009, 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 and it is the earliest age at which benefit payments
can commence unless preceded by the Participant’s Disability or Death.

     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 Rule of 70. “Rule of 70” means the date on which the sum of the Participant’s age and
years of Bank service is at least 70.

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     2.22 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.

     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.

     2.23 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

     2.24 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.

     2.25 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

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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.

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

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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 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
the Rule of 70 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 and the attainment of
Normal Retirement Age (62), Disability or Death. In the event payment is

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triggered by Separation
from Service and the Participant’s attainment of Normal Retirement Age, 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 December 31, 2008 with respect to existing Accounts. New
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.

          (d) Transition Relief. Notwithstanding paragraph (c) above, the transition guidance
issued by the Internal Revenue Service under Section 409A of the Code provides an exception to the
general timing rules for distribution elections. As a result, a Participant’s elections with
respect to his or her Account may be revised on or before December 31, 2008 with respect to the
timing and method of payment; provided, that such revised election does not cause
amounts that were otherwise payable in 2008 to be paid in a subsequent year and does not
provide for amounts payable in a subsequent year to be paid in 2008. The Committee will interpret
and administer this provision to ensure compliance with IRS Notices 2007-86 and 2006-79 and any
additional guidance issued by the IRS.”

     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

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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.

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.

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          (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;

               (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 therefore 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

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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.

     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

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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 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 15th day of May, 2009 to be effective retroactively back to January 1,
2009.

	 	 	 	 	 
	 	FEDERAL HOME LOAN BANK OF DALLAS

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

	 	 	 	 	 
	ATTEST:

 	 	 
	/s/ Charles W. Lockyer, Jr.
 	 	 
	Charles W. Lockyer, Jr., Assistant Corporate Secretary 	 	 
	 	 	 
	 

-10-EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of May 14, 2009, by ENTERTAINMENT PROPERTIES
TRUST, a Maryland real estate investment trust (the “Company”) and Morgan G. Earnest II
(“Employee”). In consideration of the mutual covenants contained herein, the parties agree as
follows:

     1. DEFINITIONS. For purposes of this Agreement, the following terms shall have the following
meanings.

          “ANNUAL INCENTIVE PROGRAM” shall mean the annual incentive program of the Company, as amended
from time to time, or any successor incentive program adopted by the Board or the Compensation
Committee, pursuant to which annual Performance Bonuses and Incentive Bonuses may be awarded to
Employee. Pursuant to the Annual Incentive Program, the Compensation Committee may make
recommendations to the Board, and the Board may adopt, an annual bonus for the Employee which will
be based primarily on the Employee’s performance, as measured by the Board, for the most recently
completed fiscal year.

          “BOARD” shall mean the Board of Trustees of the Company. Notwithstanding anything herein to
the contrary, the Board may authorize the Compensation Committee to take any action required to be
taken by the Board pursuant to this Agreement.

          “CAUSE” shall mean and be limited to an affirmative determination by the Board that any of the
following has occurred: (a) Employee’s willful and continued failure or refusal to perform his
duties with the Company (other than as a result of his Disability or incapacity due to mental or
physical illness) which is not remedied in the reasonable good faith determination of the Board
within 30 days after Employee’s receipt of written notice from the Board specifying the nature of
such failure or refusal, or (b) the willful engagement by Employee in misconduct which is
materially and demonstrably injurious to the Company. For purposes of this Agreement, no act or
failure to act shall be considered “willful” unless done or omitted in bad faith and without
reasonable belief that the act or omission was in the best interests of the Company. A failure or
refusal to perform duties materially and adversely inconsistent with Employee’s position, as
contemplated in paragraph (a) of the definition of “Good Reason,” shall not be considered willful
or in bad faith.

          “CHANGE IN CONTROL” shall mean the occurrence of any of the following events:

          (a) Incumbent Trustees cease for any reason to constitute at least a majority of the Board.

          (b) Any “person” (as defined in Section 3(a)(9) of the Exchange Act and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) or “group” (within the contemplation of
Section 13(d)(3) of the Exchange Act and Rule 13d-5 thereunder) is or becomes a “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act) or controls the voting power, directly or
indirectly, of shares of the Company representing 25% or more of the Company Voting Securities,
other than (i) an acquisition of Company Voting Securities by an

 

 

underwriter pursuant to an offering of shares by the Company, (ii) a Non-Qualifying
Transaction, or (iii) an acquisition of Company Voting Securities directly from the Company which
is approved by a majority of the Incumbent Trustees.

          (c) The shareholders of the Company approve a Business Combination, other than a
Non-Qualifying Transaction.

          (d) The shareholders of the Company approve a plan of complete liquidation or dissolution of
the Company.

          (e) The acquisition of direct or indirect Control of the Company by any “person” or “group.”

          (f) Any transaction or series of transactions which results in the Company being “closely
held” within the meaning of the REIT provisions of the Code, after any applicable grace period, and
with respect to which the Board has either waived or failed to enforce the “Excess Share”
provisions of the Company’s Amended and Restated Declaration of Trust.

          (g) For purposes of this definition:

               (A) “Company Voting Securities” shall mean the outstanding shares of the Company eligible to
vote in the election of trustees of the Company.

               (B) “Company 25% Shareholder” shall mean any “person” or “group” which beneficially owns or
has voting control of 25% or more of the Company Voting Securities.

               (C) “Business Combination” shall mean a merger, consolidation, acquisition, sale of all or
substantially all of the Company’s assets or properties, statutory share exchange or similar
transaction involving the Company or any of its subsidiaries that requires the approval of the
Company’s shareholders, whether for the transaction itself or the issuance or exchange of
securities in the transaction.

               (D) “Incumbent Trustees” shall mean (1) the trustees of the Company as of the date of this
Agreement or (2) any trustee elected subsequent to the date of this Agreement whose election or
nomination was approved by a vote of at least two-thirds of the Incumbent Trustees then on the
Board (either by specific vote or approval of a proxy statement of the Company in which such person
is named as a nominee for trustee).

               (E) “Parent Corporation” shall mean the ultimate parent entity that directly or indirectly has
beneficial ownership or voting control of a majority of the outstanding voting securities eligible
to elect directors of a Surviving Corporation.

               (F) “Surviving Corporation” shall mean the entity resulting from a Business Combination.

2

 

               (G) “Non-Qualifying Transaction” shall mean a Business Combination in which all of the
following criteria are met: (1) more than 50% of the total voting power of the Surviving
Corporation or, if applicable, the Parent Corporation, is represented by Company Voting Securities
that were outstanding immediately prior to the Business Combination (or, if applicable, is
represented by shares into which the Company Voting Securities were converted pursuant to the
Business Combination and held in substantially the same proportion as the Company Voting Securities
were held immediately prior to the Business Combination), (2) no “person” or “group” (other than a
Company 25% Shareholder or any Employee Benefit Plan (or related trust) sponsored or maintained by
the Surviving Corporation or the Parent Corporation) would become the beneficial owner, directly or
indirectly, of 25% or more of the total voting power of the outstanding voting securities eligible
to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) and no Company 25% Shareholder would increase its percentage of such total voting
power as a result of the transaction, and (3) at least a majority of the members of the board of
directors or similar governing body of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) following the consummation of the Business Combination were
Incumbent Trustees at the time of the Board’s approval of the Business Combination.

          (h) Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely
because any “person” or “group” acquires beneficial ownership or voting control of more than 25% of
the Company Voting Securities as a result of any acquisition of Company Voting Securities by the
Company, but if after that acquisition by the Company the “person” or “group” becomes the
beneficial owner or obtains voting control of any additional Company Voting Securities, a Change in
Control shall be deemed to occur unless otherwise exempted as set forth above.

          “CODE” shall mean the Internal Revenue Code of 1986, as amended.

          “COMPENSATION COMMITTEE” shall mean the compensation committee appointed by the Board.

          “CONTROL” shall mean the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of the Company, whether through the ownership of Company
Voting Securities, by contract, or otherwise.

          “DISABILITY” shall mean (a) the adjudication of incompetence of Employee or (b) the failure of
Employee to perform his duties with the Company on a full-time basis for a period of time until the
Company’s Long-Term Disability Plan commences payment of benefits as a result of incapacity due to
mental or physical illness which is determined to be permanent by a physician selected by the
Company or its insurers and acceptable to Employee or his legal representative, which acceptance
shall not be unreasonably withheld.

          “EMPLOYEE BENEFIT PLANS” shall mean any and all 401(k) plans, profit sharing plans, retirement
plans, savings plans, investment plans, Health Plans, group life insurance, disability insurance,
salary continuation plans, accidental death and travel accident insurance plans, long-term care
plans, fringe benefits and all other benefit plans, programs and

3

 

policies of the Company adopted for peer management employees of the Company or agreed to by
Employee and the Company during the Employment Period.

          “EMPLOYMENT PERIOD” shall mean the period from the date of this Agreement until the third
anniversary of the date hereof, as extended automatically by adding one additional one year period
on the third anniversary of the date hereof and on each anniversary thereafter.

          “EXCESS PARACHUTE PAYMENT” shall have the meaning given by such term in Section 280G of the
Code.

          “EXCHANGE ACT” shall mean the Securities Exchange Act of 1934, as amended.

          “EXCISE TAX” shall mean any tax imposed by Section 4999 or 280G of the Code.

          “GOOD REASON” shall mean any of the following which is not remedied in the reasonable good
faith determination of Employee within 30 days after the Company’s receipt of written notice
specifying the event claimed to constitute Good Reason:

     (a) The assignment to Employee of duties materially and adversely inconsistent
with Employee’s position as described in Section 2 or other position to which
Employee may have been promoted prior to that time, or any material reduction in
Employee’s office, status, position, title(s) or responsibilities which is not
agreed to by Employee;

     (b) Any material reduction in Employee’s base compensation or eligibility under
the Annual Incentive Program, eligibility for Long-Term Incentive Awards under the
Long-Term Incentive Plan, or eligibility under Employee Benefit Plans which is not
agreed to by Employee, or, after the occurrence of a Change in Control, a diminution
of the Employee’s target opportunity under the Annual Incentive Plan, Long-Term
Incentive Plan or any successor plan, or a failure to evaluate Employee’s
performance relative to the target opportunity based upon the same metrics as peer
management at the surviving or acquiring company;

     (c) A material breach of this Agreement by the Company, its successors or
assigns, including any failure to pay Employee on a timely basis any amounts to
which he is entitled under this Agreement; or

     (d) Any requirement that Employee be based at any office outside of a 35-mile
radius of Employee’s principal residence as of the date hereof (as set forth in
Section 16 hereof).

4

 

          “GROSS-UP PAYMENT” shall mean a payment to Employee in an amount equal to all Excise Tax
imposed on Employee as a result of any of the events described in Section 6(d), plus an amount
equal to all federal, state or local income or other tax imposed on Employee as a result of any
payment of such Excise Tax amount.

          “HEALTH PLANS” shall mean any and all individual and family health and hospitalization
insurance and/or self-insurance plans, medical reimbursement plans, prescription drug plans, dental
plans and other health and/or wellness plans.

          “INCENTIVE BONUS” shall mean any portion of bonus awarded to Employee under the Annual
Incentive Program in which the Employee elects to take restricted shares of the Company or other
equity based compensation.

          “LONG-TERM INCENTIVE AWARDS” shall mean all grants of equity-based compensation awarded to
Employee under the Company’s Long-Term Incentive Plan, other than Incentive Bonuses, together with
amounts under the Long-Term Incentive Plan that Employee elects to contribute to the Section 79
insurance plan of the Company, or any successor plan.

          ‘LONG-TERM INCENTIVE PLAN” means the 1997 Share Equity Plan and any successor, renewal or
additional equity plan of the Company.

          “NOTICE OF TERMINATION” shall mean a written instrument delivered by Employee or the Board, as
the case may be, which (a) gives notice of the termination of this Agreement and Employee’s
employment hereunder, (b) indicates the provision of this Agreement under which the termination is
made, (c) unless the termination is pursuant to Section 5(a), (d), (f) or (g), describes in
reasonable detail the facts and circumstances claimed to provide a basis for termination, and
(d) specifies the Termination Date (which shall be not more than 30 days after the date of the
Notice). The failure by Employee or the Company to describe in a Notice of Termination any fact or
circumstance which contributes to a showing of Disability, Good Reason or Cause (as applicable)
shall not waive any right to assert such fact or circumstance in enforcing Employee’s or the
Company’s rights hereunder.

          “PERFORMANCE BONUS” shall mean any portion of the bonus awarded to Employee under the Annual
Incentive Program in which the Employee elects to take in the form of cash.

          “RESIGNATION” shall mean Employee’s resignation from the Company other than pursuant to
Section 5(e) or (g). “Resign” shall have the correlative meaning.

          “SEVERANCE MULTIPLE” shall mean the number three (3).

          “TERMINATION DATE” shall mean: (a) if Employee is terminated pursuant to Section 5(b) or (c)
or terminates pursuant to Section 5(e) or (g), the date of receipt of the Notice of Termination or
any later date specified in the Notice, (b) if Employee is terminated by reason of death, the date
of his death, or (c) if Employee is terminated pursuant to Section 5(d) or Resigns, 30 days after
the date of receipt of the Notice of Termination.

5

 

          “YEAR” shall mean a calendar year including, for purposes of Section 4, all of calendar year
2009.

     2. DUTIES. The Company employs Employee as its Chief Investment Officer and Vice President.
During the Employment Period:

          (a) Employee shall perform, to the best of his ability, the duties commensurate with
Employee’s position as Chief Investment Officer and Vice President, or such other position as
Employee may be promoted in the future, as the Company shall assign from time to time.

          (b) Employee shall devote his full time and attention to the business of the Company and shall
not engage in any other business activity for gain or profit, other than (i) Employee’s service as a consultant to Capmark Financial Group, Inc. and (ii) personal investments or
service on corporate, civic or charitable boards or committees, in the case of both clause (i) and (ii), so long as such activities do not
significantly interfere with the performance of his responsibilities under this Agreement.

Employee accepts his employment and agrees to faithfully observe and enforce the policies and
decisions of the Company in effect from time to time, including but not limited to the Company’s
Code of Business Conduct and Ethics and Insider Trading and Regulation FD Compliance Policy.

     3. TERM. This Agreement and Employee’s employment shall remain in effect during the
Employment Period, unless sooner terminated in accordance with Section  5.

     4. COMPENSATION.

          (a) BASE SALARY. Employee shall receive an annual base salary of $360,000, payable in regular
increments in accordance with the Company’s standard payroll procedures (but not less frequently
than monthly) less applicable withholdings, and subject to such increases as awarded in the
discretion of the Compensation Committee from time to time.

          (b) BONUS. Employee shall be eligible for an annual Performance Bonus and an annual Incentive
Bonus in accordance with the Annual Incentive Program as administered by the Compensation
Committee. The Compensation Committee shall establish the bonus computation methodology and
performance criteria for each Year and shall have sole authority to administer the Annual Incentive
Program, to establish performance goals, to certify to their achievement, to establish under the
Annual Incentive Program the amount of the Performance Bonus and Incentive Bonus, the type of
compensation comprising the Incentive Bonus and the number of restricted shares or amount of other
equity-based compensation issuable as the Incentive Bonus.

          (c) LONG-TERM INCENTIVE AWARDS. Employee shall be eligible to participate in Long-Term
Incentive Awards from time to time at the discretion of the Compensation Committee.

6

 

          (d) EMPLOYEE BENEFIT PLANS. Employee shall be eligible to participate in all Employee Benefit
Plans made available to other peer management employees of the Company or otherwise agreed to by
Employee and the Compensation Committee during the Employment Period.

          (e) VACATION. Employee shall be entitled to at least four weeks paid vacation during each
Year of service, or such greater amount as otherwise agreed to by Employee and the Compensation
Committee (prorated for any partial Year).

          (f) EXPENSE REIMBURSEMENTS. The Company shall reimburse Employee for all business travel and
other out-of-pocket expenses reasonably incurred by Employee in the performance of his services
under this Agreement. All reimbursable expenses shall be appropriately documented in reasonable
detail by Employee upon submission of any request for reimbursement, in a format and manner
consistent with the Company’s expense reporting and reimbursement policies applicable to other peer
management employees of the Company.

          (g) ADJUSTMENTS TO COMPENSATION. Employee’s base salary and other cash compensation shall be
subject to withholding and other applicable taxes. If Employee is employed by the Company for less
than 12 months in any Year, unless otherwise provided in Section 6 or in the applicable plan or
arrangement, his compensation and benefits shall be prorated in accordance with the number of days
in the Year during which he is employed.

     5. TERMINATION. This Agreement and Employee’s employment hereunder shall be terminated upon
the earliest of:

          (a) DEATH. Employee’s employment shall automatically terminate upon his death.

          (b) DISABILITY. The Company will make efforts to reasonably accommodate Employee as required
by applicable federal and state laws. However, in the event of Employee’s Disability, the Board
may, after giving 30 days’ written notice to Employee, terminate Employee by giving Notice of
Termination if he is unable because of his Disability to resume his full-time duties within such
30-day period.

          (c) CAUSE. The Board may terminate Employee’s employment for Cause by giving Notice of
Termination to Employee. Employee shall have the right to appeal any termination for Cause to the
Board by providing written notice to the Chairman of the Board not later than five business days
after the date of the Notice of Termination. Employee and his counsel shall have the right to
appear before the Board at a meeting at which such appeal shall be considered. The determination of
the Board with regard to such appeal shall be final and binding.

          (d) WITHOUT CAUSE. The Board may terminate Employee’s employment without Cause by giving 30
days’ Notice of Termination to Employee.

7

 

          (e) GOOD REASON. Employee may terminate his employment for Good Reason by giving Notice of
Termination to the Company.

          (f) RESIGNATION. Employee may Resign his employment by giving 30 days’ Notice of Termination
to the Company.

          (g) RETIREMENT. Employee may retire at or after age 65.

     6. COMPENSATION ON TERMINATION. Upon termination of Employee’s employment for any reason
provided in Section 5, Employee (or his estate) shall be entitled to all compensation earned and
all benefits under Employee Benefit Plans and expense reimbursements vested or accrued through the
Termination Date. In addition:

          (a) DEATH OR DISABILITY. If Employee’s employment hereunder is terminated pursuant to
Section 5(a) or Section 5(b), Employee (or Employee’s estate in the case of termination pursuant to
Section 5(a)) shall receive from the Company in a lump sum payment due within 30 days after the
Termination Date, an amount equal to the product of (A) the sum of (i) Employee’s annual base
salary at the rate in effect immediately prior to the Termination Date, plus (ii) the amount of the
Performance Bonus plus the value on the award date of the Incentive Bonus paid or payable to
Employee for the most recently completed Year prior to the Termination Date (annualized as
applicable), plus (iii) the value on the award date of the Long-Term Incentive Awards made to
Employee during the current Year or if none, during the prior Year (annualized as applicable),
times (B) the Severance Multiple. In addition (1) notwithstanding anything to the contrary in any
share option plan or agreement, any share options held by Employee on the Termination Date shall
become immediately exercisable and may be exercised by Employee (or Employee’s estate or other
authorized representative) until the earlier of one year after the Termination Date or 10 years
after the grant date of the options, and (2) all unvested restricted shares held by Employee on the
Termination Date shall become fully vested as of such date.

          (b) BY THE COMPANY WITHOUT CAUSE; BY EMPLOYEE FOR GOOD REASON. If Employee’s employment
hereunder is terminated pursuant to Section 5(d) or Employee terminates Employee’s employment
hereunder pursuant to Section 5(e), Employee shall receive from the Company (or its successor, if
applicable), in a lump-sum payment due within 30 days after the Termination Date, an amount equal
to the product of (A) the sum of (i) Employee’s annual base salary at the rate in effect
immediately prior to the Termination Date, plus (ii) the amount of the Performance Bonus plus the
value on the award date of the Incentive Bonus paid or payable to Employee for the most recently
completed Year prior to the Termination Date (annualized as applicable), plus (iii) the value on
the award date of the Long-Term Incentive Awards made to Employee during the current Year or if
none, during the prior Year (annualized as applicable), times (B) the Severance Multiple. In
addition (1) notwithstanding anything to the contrary in any share option plan or agreement, any
share options held by Employee on the Termination Date shall become immediately exercisable and may
be exercised by Employee until the earlier of 180 days after the Termination Date or 10 years after
the grant date of the options, and (2) all unvested restricted shares held by Employee

8

 

on the Termination Date shall become fully vested as of such date. Notwithstanding the
foregoing, if Employee’s employment hereunder is terminated pursuant to Section 5(d) or Employee
terminates Employee’s employment hereunder pursuant to Section 5(e) after the second anniversary of
the date hereof and within 90 days after Employee has received notice of the Board’s requirement,
made upon the recommendation of the Chief Executive Officer of the Company, that Employee be based
at the then current offices of the Company, and (iii) in the Board’s reasonable judgment, Employee
has failed to comply with such requirement within such 90-day period, then Employee shall receive
(in lieu of the payments set forth above) from the Company (or its successor, if applicable), in a
lump-sum payment due within 30 days after the Termination Date, an amount equal to the product of
(A) Employee’s annual base salary at the rate in effect immediately prior to the Termination Date,
times (B) 1.5. If Employee relocates pursuant to the Board’s requirement, clause (d) of the
definition of “Good Reason” shall be revised to read in its entirety as follows: “Any requirement
that Employee be based at any office outside of a 35-mile radius of the current offices of the
Company.”

          (c) HEALTH PLANS. If Employee is terminated pursuant to Section 5(b) or (d) or terminates
pursuant to Section 5(e), Employee shall be entitled to participate at the Company’s expense in all
Health Plans in which Employee was eligible to participate prior to the Termination Date for a
period of time after the Termination Date equal to 12 months times the Severance Multiple. Upon
Employee’s death, his immediate family shall be entitled to participate at the Company’s expense in
all Health Plans in which Employee was eligible to participate prior to his death for a period of
time after the Termination Date equal to 12 months times the Severance Multiple.

          (d) GROSS-UP PAYMENT. If the Internal Revenue Service asserts that any portion of any payment
made to Employee pursuant to any provision of this Agreement constitutes an Excess Parachute
Payment and imposes an Excise Tax thereon, then the Company agrees that it will indemnify and hold
harmless Employee in an amount equal to such Excise Tax. Such amount shall be paid to Employee
immediately pending a final judicial determination of, or settlement determining, such liability
for the Excise Tax otherwise. In addition, the Company shall pay a Gross-Up Payment to Employee or
his estate in the amount of any Excise Tax incurred by Employee as a result of any severance
compensation, accelerated exercisability of options, accelerated vesting of restricted shares
and/or continuation of benefits under this Section 6, plus an amount equal to any federal, state or
local income tax imposed on Employee as the result of the Company’s payment of any such Excise Tax
amount. Such Gross-Up Payment shall be payable to Employee at the time the respective applicable
tax triggering such Gross-Up Payment is due. For purposes of determining the amount of the
Gross-Up Payment, Employee will be deemed to (i) pay federal income taxes at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-Up Payment is made, and
(ii) state and local income taxes at the highest marginal rates of taxation in the state and
locality of his residence in the calendar year in which the Gross-Up Payment is made net, in the
case of clause (i), of the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. The parties agree that the payments required to be made
under this Section 6 are such that the payments Employee receives, or is entitled to receive, under
this Section 6 shall not be reduced by any Excise Tax or Gross-Up Payment with respect

9

 

thereto and therefore the net amount retained by Employee, after reimbursement for any Excise
Tax, or any other federal, state or local income or other tax that may be payable on receipt of
such reimbursement for Excise Tax, that is imposed as a result of any payment required to be made
under this Section 6 shall be equal to the same amount as if no such Excise Tax or other tax had
been imposed.

     All other rights and obligations of the Company and Employee under this Agreement (other than
Sections 8, 9 and 10, which shall survive termination) shall cease as of the Termination Date.

          (e) For purposes of this Section 6, the value on the award date of any Incentive Bonus or any
Long-Term Incentive Award shall be, in the case of equity compensation, the estimated fair value of
the award as of the grant date, without respect to vesting, determined by the Company in accordance
with FAS No. 123 (revised 2004), “Share-Based Payment,” issued by the Financial Accounting
Standards Board, or any replacement successor or amended accounting standard regarding the
valuation of equity-based awards.

     7. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall limit Employee’s continuing or
future participation in any plan, program, policy or practice provided by the Company and for which
Employee may qualify, nor shall anything herein limit or otherwise affect any rights Employee may
have under any other contract or agreement with the Company. Amounts which are vested benefits or
which Employee is otherwise entitled to receive at or subsequent to a Termination Date under any
plan, policy, practice or program of, or any contract or agreement with, the Company shall be
payable in accordance with the same, except as explicitly modified in this Agreement.

     8. FULL SETTLEMENT; RESOLUTION OF DISPUTES.

          (a) The Company’s obligation to make the payments provided in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any unilateral right of set-off,
counterclaim, recoupment, defense or other claim, right or action which the Company may have
against Employee or others, but the foregoing shall not limit the right of the Company to seek such
relief in any proceeding. Any payments and benefits provided for in this Agreement shall be
contingent upon Employee executing a full release of any and all claims against the Company, the
Board and officers of the Company and any affiliates and representatives of the Company arising out
of Employee’s employment with the Company or this Agreement. In no event shall Employee be
obligated to seek other employment or take any other action to mitigate any amounts payable under
this Agreement. If Employee is the prevailing party in any action brought by the Company to
contest any liability or obligation hereunder or in any action by Employee to enforce the
provisions hereof, the Company shall reimburse Employee for the fees and expenses of his counsel
incurred in such action.

          (b) If there is a dispute between the Board and Employee (i) if the Board terminates for
Cause, with respect to the existence of Cause (ii) if Employee terminates with Good Reason, with
respect to the existence of Good Reason, then, upon the entry of a final,

10

 

nonappealable judgment by a court of competent jurisdiction declaring that the Board’s
termination was not for Cause or that Employee’s determination of Good Reason was made in good
faith, as the case may be, the Company shall pay all amounts provided in the applicable provisions
of Section 6, plus any damages to which Employee is entitled by reason of the Company’s breach of
this Agreement and shall reimburse Employee for the fees and expenses of his counsel incurred in
such proceeding.

          (c) Any amount payable under this Section 8 shall bear interest at the federal rate provided
in Section 7872(f)(2)(A) of the Code until fully paid.

     9. INDEMNIFICATION. Nothing in this Agreement shall limit Employee’s indemnification rights
under the Company’s Declaration of Trust or Bylaws or any Trustees’ and Officers’ insurance
coverage. Employee shall not be liable to the Company or its shareholders for any errors or
omissions made in good faith and in the absence of gross negligence or willful misconduct.

     10. COVENANTS OF THE EMPLOYEE.

          (a) Employee shall retain in confidence and shall not disclose to any party (other than
officers, trustees or representatives of the Company as required for the conduct of the Company’s
business), nor use for any purpose (other than in the performance of his duties hereunder) any
confidential or proprietary information of or with respect to the Company, its business, financial
condition or performance, existing or potential properties, existing or potential transactions,
negotiations, relationships, plans, strategies, projections, existing or potential tenants or any
other information of a confidential or proprietary nature, whether in written, oral or electronic
format and whether disclosed prior to or after the date of this Agreement (“Confidential
Information”). Notwithstanding the foregoing, Confidential Information shall not include
(i) information which is publicly disclosed or otherwise generally available through no fault of
Employee, or (ii) information required to be disclosed by Employee or the Company under the federal
securities laws and regulations or any subpoena or order of a court or governmental agency. In no
event shall an asserted violation of the provisions of this Section 10(a) constitute a basis for
the Company’s unilateral deferral or withholding of any amounts otherwise payable to Employee under
this Agreement, without limitation of the right of the Company to assert any right of set-off,
counterclaim, recoupment, defense or other claim in any proceeding.

          (b) During the Employment Period and for a period ending on the third anniversary of the
Termination Date, Employee shall not, directly or indirectly, unless for the Company or its
affiliates or otherwise with the express written consent of the Company:

     (i) own or have any interest in, or act as an officer, director, partner,
member, manager, principal, employee, agent, representative, consultant, independent
contractor or other capacity of or for, or in any way assist, any Competitive
Enterprise within the Restricted Area, whether paid or unpaid; or

11

 

     (ii) divert or attempt to divert clients, customers or accounts of the Company
or of its affiliates (whether or not the applicable parties have done business with
the Company or any of its affiliates once or more than once), regardless of their
location.

This provision shall not apply if, within one year following a Change in Control, the Company
terminates Employee’s employment with Company for any reason other than pursuant to Sections 5(b)
or 5(c). Employee agrees that because of the nationwide nature of Company’s business (directly or
through its affiliates), the “Restricted Area” shall include the entire United States, and that a
more limited geographic restriction is neither feasible nor appropriate to protect the interests of
Company. “Competitive Enterprise” means any business that is primarily engaged in the business of
developing, acquiring and financing real estate and related improvements associated with megaplex
theatre properties, excluding any business that is in the primary business of movie exhibition.

          (c) Employee acknowledges that any breach of the covenants in Sections 10(a) and 10(b) would
cause irreparable injury to the Company which would not be fully compensable in damages.
Accordingly, the Company shall be entitled to injunctive or specific relief from a court of
competent jurisdiction against any breach or threatened breach by Employee, his agents or persons
acting through him, of the covenants in Sections 10(a) and 10(b) , without the necessity of posting
bond or proving lack of an adequate remedy at law, and without limitation of other remedies that
may be available to the Company at law or in equity.

     11. SUCCESSORS.

          (a) This Agreement is personal to Employee and shall not be assigned by him without the prior
written consent of the Board. The provisions of Sections 6 and 8 shall inure to the benefit of and
be binding on and enforceable by Employee’s heirs and legal representatives.

          (b) This Agreement may be assigned by the Company to any successor to its business or assets
and shall inure to the benefit of its successors and assigns.

          (c) This Agreement shall be binding upon and enforceable against any successor (whether
direct or indirect, by acquisition, merger, consolidation, Change in Control or otherwise) to the
Company or to all or substantially all of its assets, whether such transaction was approved by the
Incumbent Trustees or otherwise. The Company shall advise any successor to its business or assets
and the person or entity effecting any Change in Control of the provisions of this Agreement and
the survival of such provisions following the consummation of such transaction. As used in this
Agreement, “Company” shall mean Entertainment Properties Trust and any successor to its business,
assets or outstanding securities.

          12. EXCESS PARACHUTE PAYMENT. If the Internal Revenue Service asserts that any portion of any
payment made to Employee pursuant to this Agreement constitutes an “excess parachute payment” and
imposes an excise tax thereon, the Company will indemnify Employee in an amount equal to the excise
tax. Such amount shall be paid to Employee immediately upon a final judicial determination of,
or settlement determining, the liability for the excise tax.

12

 

     13. GOVERNING LAW. This Agreement shall be governed by Missouri law, without reference to
conflicts of laws rules.

     14. HEADINGS. Section headings are for convenience of reference only and shall have no effect
on the interpretation of this Agreement.

     15. ENTIRE
AGREEMENT. This Agreement constitutes the entire agreement of the parties with regard to the
subject matter hereof and may not be modified or amended except by written instrument executed by
the Company and Employee. Notwithstanding anything to the contrary
herein, this Agreement shall not affect or otherwise reduce the rights
of Employee with respect to grants of stock, stock options or
restricted stock units made to Employee by the Company prior to the
date of this Agreement, the terms of which shall survive execution
of this Agreement.

     16. NOTICE. Any notice or other communication hereunder shall be in writing and may be hand
delivered or sent by registered or certified mail return receipt requested, commercial courier or
facsimile transmission:

	 	 	 	 	 	 	 
	 

	 	If to Employee:
	 	Morgan G. Earnest II	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	FAX:                                                                           
     	 	 
	 
	 	 	 	 	 	 
	 

	 	If to the Company:
	 	Entertainment Properties Trust	 	 
	 

	 	 	 	30 West Pershing Road, Suite 201	 	 
	 

	 	 	 	Kansas City, Missouri 64108	 	 
	 

	 	 	 	Attention: Chief Executive Officer	 	 
	 

	 	 	 	FAX: (816) 472-5794	 	 
	 
	 	 	 	 	 	 
	 

	 	and:
	 	Entertainment Properties Trust	 	 
	 

	 	 	 	30 West Pershing Road, Suite 201	 	 
	 

	 	 	 	Kansas City, Missouri 64108	 	 
	 

	 	 	 	Attention: Chairman of the Compensation Committee	 	 
	 

	 	 	 	FAX: (816) 472-5794	 	 

or to such other address or facsimile number as either party shall have furnished the other in
writing. Notices and communications shall be effective when actually received by the addressee.

     17. SEVERABILITY. The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or unenforceability of any other provision of this Agreement.

13

 

     18. WAIVER. A party’s failure to insist upon strict compliance with any provision of this
Agreement or the failure to assert any right such party may have hereunder shall not be deemed a
waiver of such provision or any other provision of this Agreement, and no such waiver shall be
effective unless by written instrument signed by the party granting the waiver.

     19. COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be an
original and both of which, taken together, shall constitute a single instrument.

     20. AMENDMENT. This Agreement may not be amended or otherwise modified except pursuant to the
express written agreement of each of the parties hereto.

     21. BOARD APPROVAL. This Agreement has been approved by the Board upon the recommendation of
the Compensation Committee. The officer signing this Agreement on behalf of the Company is duly
authorized to do so and to bind the Company to the provisions hereof.

[Remainder of page left intentionally blank]

14

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the above date.

	 	 	 	 	 
	 	COMPANY

ENTERTAINMENT PROPERTIES TRUST

 	 
	 	By:  	/s/ David M. Brain
 	 
	 	 	David M. Brain 	 
	 	 	President and Chief Executive Officer 	 
	 
	 	EMPLOYEE

 	 
	 	       /s/ Morgan G. Earnest II
 	 
	 	       Morgan G. Earnest II 	 
	 	 	 
	 

15

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