Document:

exv10w2

 

Exhibit 10.2

DEFERRED COMPENSATION PLAN

OF THE

FEDERAL HOME LOAN BANK OF DALLAS

FOR DEFERRALS EFFECTIVE ON JANUARY 1, 2005

The Deferred Compensation Plan of the Federal Home Loan Bank of Dallas for Deferrals Effective
January 1, 2005 (the “Plan”) is hereby adopted effective January 1, 2005. All Participants’
deferrals which were made prior to January 1, 2005 will continue to be governed by the provisions
of the original Deferred Compensation Plan of the Federal Home Loan Bank of Dallas plan document
and the previously adopted Amendments #1 and #2 thereto and the plan document as last amended July
24, 2004 (collectively referred to as the “Prior Plan”). All amounts deferred after December 31,
2004 shall be governed exclusively under the provisions of this Plan document.

ARTICLE I

Definitions

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

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

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

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

     1.05 Benefit Account shall mean the account(s) maintained on the books of the Bank for
each Participant pursuant to Section 5.01 hereof. The Administrative Committee shall establish
subaccounts necessary to account for Stated Deferrals on a class year basis.

     1.06 Board means the Board of Directors of the Federal Home Loan Bank of Dallas.

 

 

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

     1.08 Compensation shall mean (a) the total amount of all base salary payments made by
the Bank to an employee for services rendered by the employee to the Bank; and (b) the total amount
of all Variable Pay Program award payments made by the Bank to an employee. Compensation shall not
include employee expense reimbursements, contributions made by the Bank under the Plan, payments
made by the Bank for group life insurance, long-term disability insurance, medical insurance and
like benefits, or contributions made by the Bank under any employee benefit plan the Bank
maintains. Any deferred compensation payments under this Plan shall not be deemed salary or other
compensation to the Participant eligible for the computation of benefits which he or she may be
entitled to under the defined benefit plan, defined contribution plan, or other arrangement of the
Bank for the benefit of its employees. The deferred compensation payments are compensation for all
other purposes as per the regulations promulgated by the Internal Revenue Service under its
applicable code sections.

     1.09 Determination Date shall mean the last day of the Plan year or more frequently as
determined by the Administrative Committee, which may include daily valuations of the Benefit
Account.

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

     1.11 Highly Compensated Employees shall mean all employees of the Bank who are
designated as Highly Compensated Employees by the Administrative Committee. A person designated as
a Highly Compensated Employee shall remain so until such designation is revoked by the
Administrative Committee, in its sole discretion.

     1.12 Hardship shall mean severe financial hardship to a Participant resulting from (1)
the Participant’s spouse or a dependent (as defined in Section 152(a) of the Code), (2) loss of the
Participant’s property due to casualty or (3) other similar extraordinary and unforeseeable
circumstances arising as a result of an event beyond the control of the Participant. The need to
send

2

 

a Participant’s child to college or the desire to purchase a home shall not be considered
emergencies for purpose of this Plan. Any early withdrawal by reason of Hardship shall be limited
to the amount necessary to meet the stated financial emergency.

     1.13 Participant shall mean a Highly Compensated Employee of the Bank who has enrolled
in the Plan by completing an Adoption Agreement.

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

     1.15 Qualified Plan shall mean the qualified defined contribution plan (Pentegra
Defined Contribution Plan for Financial Institutions) maintained by the Bank which qualifies under
Internal Revenue Code 401(a).

     1.16 Service shall mean the period of continuous service with the Bank calculated from
the Participant’s most recent date of employment by the Bank to date of Termination of Employment
with the Bank.

     1.17 Stated Deferral shall mean the amount of Compensation the Participant agrees to
defer in the Adoption Agreement, and on subsequent annual Plan election forms.

     1.18 Termination of Employment shall mean the Participant’s ceasing to be employed by
the Bank for any reason whatsoever, voluntary or involuntary, including by reason of death, or
Disability. The Participant’s employment shall not be deemed to be terminated by reason of an
approved leave of absence granted in accordance with Bank policy under uniform rules applied in a
nondiscriminatory manner.

ARTICLE II

Eligibility and Participation

     2.01 Participation. From time to time the Administrative Committee, in its sole
discretion, may designate those Highly Compensated Employees to whom the opportunity to participate
in the Plan shall be extended.

     2.02 Enrollment Requirements. A Highly Compensated Employee in the Plan may enroll in
the Plan by (a) entering into an Adoption Agreement with the Bank, which shall specify the

3

 

amount of deferral and form and timing of payment of his or her Benefit Account and (b)
completing such other forms and furnishing such other documents as the Bank may require.

     2.03 Enrollment Time Period. A newly hired employee who is designated by the
Administrative Committee as a Highly Compensated Employee must execute the Adoption Agreement
within the thirty (30) day period immediately following the first date of employment. All other
elections to defer must be made no later than December 31 prior to the Plan Year with respect to
which the election applies.

     2.04 Failure of Eligibility. A Participant shall cease to be a Participant at
Termination of Employment (unless the Participant qualifies for benefits set forth in Article VI),
or upon revocation by the Administrative Committee of the Participant’s status as a Highly
Compensated Employee. A person who ceases to be a Participant during the Plan Year will have no
further right to defer Compensation. Amounts previously deferred by such Participant shall
continue to be held pursuant to the terms of this Plan.

ARTICLE III

Participant Compensation Deferral

     3.01 Initial Deferral. Any employee designated as a Highly Compensated Employee who
desires to participate in the Plan must execute the Adoption Agreement within the thirty (30) day
period immediately following such designation and elect to defer a portion of his or her
Compensation earned and payable on or after the date of such election and before the commencement
of the pay period in which the election becomes effective.

     3.02 Subsequent Deferrals. Subsequent to the initial deferral provided for in Section
3.01 above, any election to defer Compensation hereunder shall be made no later than the December
31 prior to the Plan Year with respect to which the election applies.

     3.03 Procedure for Deferral. The Highly Compensated Employee shall make the election
provided for in Sections 3.01 and 3.02 above by executing the Adoption Agreement in the form
provided by the Bank. The Adoption Agreement shall set forth the Highly Compensated Employee’s
Stated Deferral. After the initial Stated Deferral, the election shall be made on a

4

 

separate document provided by the Bank for that purpose. The amount deferred shall be
subtracted from the Compensation otherwise payable to the Participant during the year of the
deferral.

     3.04 Schedule A Stated Deferral. Schedule A Stated Deferral shall mean a voluntary
Participant deferral that is not payable until Termination of Employment. The minimum required
deferral is $83.33 per pay period if only deferring to a Schedule A Stated Deferral account, or a
minimum of $41.67 to the Schedule A Stated Deferred if an equal or greater amount is being deferred
into a Schedule B Stated Deferral account.

     3.05 Schedule B Stated Deferral. Schedule B Stated Deferral shall mean a voluntary
Participant deferral for the Plan Year that is deferred until a specific date. The specified date
of payment must be at least twelve (12) months from the last day of the Plan Year. Contemporaneous
with a Schedule B Stated Deferral, the Participant must also specify the date and form of
distribution in the Adoption Agreement. The minimum required deferral is $83.33 per pay period if
only deferring to a Schedule B Stated Deferral account, or a minimum of $41.67 to the Schedule B
Stated Deferred if an equal or greater amount is being deferred into a Schedule A Stated Deferral
account.

     3.06 Election to Defer Irrevocable; Exceptions. Except as otherwise provided herein,
a Participant’s election to defer Compensation for a particular Plan Year shall be irrevocable. If
the Participant receives a distribution due to Hardship under Section 6.04 of this Plan or if the
Participant makes a “hardship withdrawal” under the Qualified Plan, the Participant’s election to
defer Compensation for that Plan Year will terminate and no further deferrals will be permitted for
the remainder of the Plan Year. A Participant is permitted to rescind his or her deferral election
for the 2005 Plan Year so long as the Participant files a request for rescission with the
Administrative Committee prior to December 31, 2005 and all amounts subject to rescission are
included in the Participant’s taxable income for the 2005 taxable year.

ARTICLE IV

Bank Contributions

     4.01 Bank Contributions. For each Plan Year, the Bank shall make an addition to each
Participant’s Benefit Account of a monthly matching contribution in an amount based on the
following schedule:

5

 

	 	 	 	 	 
	1st year of Service

	 	=
	 	no Bank match
	 
	 	 	 	 
	2nd and 3rd years of Service

	 	=
	 	100% match on 3% of monthly salary contributed to the Plan reduced by 3% of the Participant’s monthly eligible compensation, as defined under the Qualified Plan.
	 
	 	 	 	 
	4th and 5th years of Service

	 	=
	 	150% match on 3% of monthly salary contributed to the Plan reduced by 4.5% of the Participant’s monthly eligible compensation, as defined under the Qualified Plan.
	 
	 	 	 	 
	6 or more years of Service

	 	=
	 	200% match on 3% of monthly salary contributed to the Plan reduced by 6% of the Participant’s monthly eligible compensation, as defined under the Qualified Plan.

     The Bank will make the above-referenced matching contribution with respect to each
Participant except to the extent prohibited or limited by law in which case no such
contribution shall be made and any matching contributions previously made which are
prohibited or limited by such law shall be forfeited and returned to the Bank. The amount
of the matching Bank contribution added to the Participant’s Benefit Account is solely
dependent on the Participant’s length of Service.

     4.02 Designation of Bank Contributions to Stated Deferral Benefit Account. The Plan
shall require the Bank to first place matching contributions into the Participant’s Schedule A
Benefit Account as calculated in Section 4.01, with the residual, if any, placed in the
Participant’s Schedule B Benefit Account.

ARTICLE V

Participant Benefit Account and Vesting

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

          (a) The Schedule A and Schedule B Stated Deferrals that the Participant has previously
deferred or elects to defer pursuant to Section 3.04 and Section

6

 

3.05 of the Plan, credited as of the date the Participant would otherwise have received
the Compensation.

          (b) The amount of the Bank matching contribution for each Participant as set forth in
Section 4.01 of the Plan.

          (c) As of the last day of each calendar quarter, an amount equal to the earnings
attributable to the Participant’s Benefit Account. Benefit Account earnings will be
determined based upon the investment return attributable to the deemed investments selected
by the Participant based upon the Mutual Fund Array provided by the Bank.

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

     5.02 Determination of Benefit Account. Each Participant’s Benefit Account as of each
Determination Date shall consist of the balance of the Participant’s Benefit Account as of the
immediately preceding Determination Date, plus the amounts required to be credited to such account
by the Bank pursuant to Section 5.01 less the amount of all distributions, if any, made from such
Benefit Account since the immediately preceding Determination Date. The Administrative Committee
shall determine the Participant deferrals and matching Bank contributions to the Participant’s
Benefit Account(s) on the basis of the Plan Year.

     5.03 Statement of Benefit Account. The Administrative Committee shall provide each
Participant, a statement in such form as the Administrative Committee deems desirable setting forth
the balance to the credit of such Participant in his or her Benefit Account(s) as of the
Determination Date.

     5.04 Vesting of Benefit Account. All Compensation deferred by a Participant and the
related matching Bank contributions to the Benefit Account(s) shall be one hundred percent (100%)
vested at all times.

7

 

ARTICLE VI

Payment of Benefits

     6.01 Schedule A Benefits Upon Termination of Employment Prior to Age 45. The Schedule
A Benefit Account balance shall be payable to the Participant, or his or her Beneficiary, in a
lump sum cash payment within ninety (90) days from the date of Termination of Employment.

     6.02 Schedule A Benefits Upon Termination of Employment At Age 45 or Older. The
Participant may, at the time of deferral, elect to have the Schedule A Stated Deferral Benefit
Account payable to the Participant as follows:

          (a) In the form of annual installments for a period of from two (2) to twenty (20)
years payable on January 31 of each year immediately following Termination of Employment, or
as a deferred vested benefit with payments to begin at a designated later calendar date; or

          (b) In a lump sum cash payment within ninety (90) days from the date of Termination of
Employment.

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

     6.03 Schedule B Benefits. The Participant may, at the time of deferral, elect to
receive the Schedule B Stated Deferral as follows:

          (a) to have each annual Stated Deferral amount for that Plan Year, plus any earnings
thereon, paid in a lump sum on a specific calendar date. The date of this payment must be,
at a minimum, twelve (12) months after the end of the Plan Year in which Schedule B amounts
were deferred.

          (b) to have the Stated Deferral amount for that Plan Year, plus any earnings thereon,
paid in annual installments for a period of from two (2) to four (4) years

8

 

commencing on a specific calendar date. The date of the first payment must be, at a
minimum, twelve (12) months after the end of the Plan Year in which the Schedule B amounts
were deferred.

     A Participant may postpone the payment of a Schedule B Stated Deferral to a date that is later
than the date originally specified on the deferral election form if the payment date is at least
five years later than originally scheduled and the request to postpone is filed with the
Administrative Committee at least twelve months prior to the date the payment was originally
scheduled to be made.

     In addition to election options (a) and (b), the Participant may also, at the time of
deferral, designate a contingent lump sum distribution option that is effective only in the event
the Participant’s employment is terminated, for any reason, prior to the scheduled distribution
date(s) selected in options (a) or (b). If so designated on the applicable election form, the
total Schedule B Stated Deferral Benefit Account balance will be payable to the Participant in a
lump sum cash payment within ninety (90) days from the date of Termination of Employment.

     6.04 Hardship Distribution. The Administrative Committee may, in its sole discretion,
upon finding that the Participant has suffered or is suffering a Hardship, distribute to such
Participant all or a portion of his or her Benefit Account under the Plan. The amount distributed
will be limited to the amount the Administrative Committee determines is necessary to meet the
stated financial emergency and shall be drawn from the portion of the Benefit Account attributable
to Schedule B Stated Deferrals prior to other components of the Benefit Account. Distributions
pursuant to Hardship may include Benefit Account earnings depending upon whether all or a portion
of the Benefit Account is required to satisfy the Hardship.

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

9

 

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

ARTICLE VII

Administration

     7.01 Administrative Committee. The Plan shall be administered by the Administrative
Committee in accordance with its terms and purposes and in compliance with Section 409A of the
Code. The Board shall appoint the Administrative Committee, which shall consist of three (3) or
more persons to act on behalf of the Bank. Interpretation by the Administrative Committee shall be
final and binding upon a Participant. The Administrative Committee shall select the Highly
Compensated Employees eligible to participate in the Plan and shall be responsible for
administration of the Plan in accordance with the terms and provisions herein.

10

 

     7.02 Claims Procedure.

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

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

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

11

 

ARTICLE VIII

Miscellaneous

     8.01 Employment Not Guaranteed by Plan. Neither the Plan nor any action taken
hereunder shall be construed as giving a Participant the right to be retained as a Highly
Compensated Employee or as an employee of the Bank for any period of time.

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

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

     8.04 Disposition of Unclaimed Payments. Each Participant must file with the Bank from
time to time in writing his or her post office address and each change of post office address. The
communication, statement, or notice addressed to a Participant at the last post office address
filed with the Bank, or if no address is filed with the Bank, then at the last post office address
as shown on the Bank’s records, will be binding upon Participant and his or her beneficiaries for
all purposes of the Plan. The Bank shall not be required to search for or locate a Participant or
his or her Beneficiary.

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

12

 

     8.06 Independence of Benefits. The benefits payable under this Plan shall be
independent of, and in addition to, any other benefits or compensation whether by salary or however
characterized.

     8.07 GOVERNING LAW. THIS PLAN IS INTENDED TO CONSTITUTE AN UNFUNDED PLAN FOR A SELECT
GROUP OF MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES AND RIGHTS THEREUNDER SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF TEXAS. THE BANK IS A GOVERNMENTAL ENTITY AND THIS PLAN IS NOT SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED.

     8.08 Form of Communication. Any election, application, claim, notice or other
communication required or permitted to be made by a Participant to the Administrative Committee
shall be made in writing and in such form as the Administrative Committee shall prescribe. Such
communication shall be effective upon mailing, if sent by first class letter, postage pre-paid, and
addressed to the Bank’s offices as follows:

Attention: Deferred Compensation Administrative Committee

Federal Home Loan Bank of Dallas

8500 Freeport Parkway, Suite 600

Irving, Texas 75063-2547

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

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

     This Deferred Compensation Plan of Federal Home Loan Bank of Dallas reflects the governing
provisions of the Plan approved by the Board of Directors on October 27, 2005 and has been amended
and restated to incorporate a revision to Article IV as adopted and approved by the Board of
Directors on December 14, 2005.

13

 

	 	 	 	 	 
	 	 	Bank:
	 
	 	 	 	 
	 	 	FEDERAL HOME LOAN BANK OF DALLAS
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Timothy J. Heup
	 

	 	 	 	 
	 

	 	 	 	Corporate Officer
	ATTEST:
	 	 	 	 
	 
	 	 	 	 
	/s/ Karen A. Krug
	 	 	 	 
	 	 	 	 	 
	Corporate Secretary
	 	 	 	 

14exv10w3

 

Exhibit 10.3

NONQUALIFIED DEFERRED COMPENSATION PLAN

FOR THE

BOARD OF DIRECTORS

OF THE

FEDERAL HOME LOAN BANK OF DALLAS

The Nonqualified Deferred Compensation Plan (the “Plan”) for the Board of Directors of the Federal
Home Loan Bank of Dallas (the “Bank”) is hereby amended effective July 24, 2004. This document
shall serve as the revised Plan Document and Adoption Agreement for Plan Years occurring on or
after January 1, 1995.

ARTICLE I

Definitions

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

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

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

     1.04 Benefit Account shall mean the account maintained on the books of the Bank for
each Participant pursuant to Article IV hereof.

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

     1.06 Determination Date shall mean the last day of the Plan Year.

     1.07 Director shall mean the person elected or appointed as a Director of the Bank
pursuant to the Federal Home Loan Bank Act, as amended, although the oath of office has not been
administered.

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

     1.09 Hardship shall mean an unforeseen financial emergency suffered by a Participant.
The financial emergency must be beyond the Participant’s control and must be of sufficient

 

 

magnitude to cause the Participant hardship if early withdrawal of the Participant’s benefits
were not allowed, or if a change in the Participant’s stated deferral was not allowed. Any early
withdrawal by reason of Hardship shall be limited to the amount necessary to meet the stated
financial emergency.

     1.10 Interest Yield shall mean the interest rate equivalent to the FUND B interest
rate of the Financial Institutions Thrift Plan. This interest rate shall be determined quarterly
and is to be equal to the average Fund B interest rate calculated by the Financial Institutions
Thrift Plan for the three preceding calendar months. (For example, the Interest Yield for the
first quarter of a given year shall be equal to the average Fund B interest rate for January,
February, and March of that year.)

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

     1.12 Plan Entry Date shall mean January 1 of each Plan Year.

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

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

ARTICLE II

Eligibility and Participation

     2.01 Participation. Participation in this Plan is limited to those Directors elected
or appointed as a Director of the Bank pursuant to the Federal Home Loan Bank Act, as amended,
although the oath of office has not been administered.

     2.02 Enrollment Requirements. A Director shall enroll as a Participant in the Plan by
(a) entering into an Adoption Agreement with the Bank, which shall specify the distribution of
benefits under this Plan for such Director, and (b) by completing such other forms and furnishing
such other documents as the Bank may require.

     2.03 Enrollment Time Period. The Adoption Agreement must be executed within thirty
(30) days before the Plan Entry Date of the Plan Year in which the Agreement is to be effective.

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

ARTICLE III

Participant Compensation Deferral

     3.01 Initial Deferral. Any Director not currently participating in the Plan shall,
within thirty (30) days before the Plan Entry Date of the Plan Year in which the Agreement is to be

2

 

effective, execute an Adoption Agreement and elect to defer all or a portion of his or her
Director’s Fees earned and payable commencing with the first month in which the election becomes
effective.

     3.02 Subsequent Deferrals. Subsequent to the initial deferral provided for in Section
3.01 above, any election to continue to defer, revise, or terminate the deferral of Director’s
Fees hereunder shall be made no later than January 1 of each Plan Year. Should the Participant
terminate the deferral, the Benefit Account cannot be distributed until such time as requested and
stated in the Adoption Agreement, or on the most recent annual deferral election form.

     3.03 Procedure for Deferral. The Director shall make the election provided for in
Section 3.01 and Section 3.02 above by executing the Adoption Agreement in the form provided by the
Bank. The Adoption Agreement shall set forth the Director’s Stated Deferral. After the initial
Stated Deferral, the election to continue, revise, or terminate the deferral shall be made on a
separate document provided by the Bank for that purpose. The amount deferred shall be subtracted
from the compensation otherwise payable to the Participant during the year of the deferral, less
any applicable state or federal taxes required to be withheld.

     3.04 Stated Deferral. The Stated Deferral shall mean a voluntary Participant
deferral, less any applicable state or federal taxes required to be withheld, into an interest
bearing account established on the books of the Bank.

     3.05 Election to Defer Irrevocable; Exceptions. Except as otherwise provided herein,
a Participant’s election to defer Director’s Fees shall be irrevocable except for changes allowed
at Plan Entry Date. The Administrative Committee, in its sole discretion, upon demonstration of
substantial Hardship by the Participant, may permit subsequent alteration of a Participant’s
deferral election. A request to alter the amount of Compensation deferred shall be submitted by a
Participant in writing to the Administrative Committee and shall set forth in detail the reasons
for the requested reduction.

ARTICLE IV

Participant Benefit Account and Vesting

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

(a) The amount of Director’s Fees that the Participant has
previously deferred or elects to defer pursuant to Section 3.01 of the
Plan, credited as of the date the Participant would otherwise have received
the fee compensation. The Bank shall deduct any amounts it is required to
withhold under state, federal or local law for taxes or other charges
from the Participant’s Director’s Fees.

(b) As of the last day of each calendar quarter, an amount
equal to the earnings attributable to the Participant’s Benefit Account.
For the period of August 1, 2004 through December 31, 2004 the earnings
will be an amount equal to the greater of: (1) the product of the
Benefit Account balance as of that date multiplied by the Interest Yield
for that quarter, with interest credited for the

3

 

actual days the funds were in the Benefit Account during the quarter or (2) the
earnings attributable to the investment performance of assets contributed to a
grantor trust as defined in Section 671 of the Code (the “Trust”) established by
the Bank on behalf of the Plan with such earnings allocated to each Benefit
Account based upon the ratio each Participant’s Benefit Account balance bears to
the total balances of all Benefit Accounts held by the Trust that is
attributable to this Plan. For the period subsequent to January 1, 2005,
Benefit Account earnings will be determined based upon the investment elections
made by the Participant described in more detail below. The Participant must
make a one-time irrevocable election to have earnings on the portion of his or
her Benefit Account attributable to deferrals prior to January 1, 2005
calculated based upon either (i) the Interest Yield or (ii) the investment
return attributable to the deemed investments selected by the Participant based
upon the benchmark funds provided by the Bank. Once an investment election is
made by the Participant, the Participant cannot change his or her election
between such investment alternatives. Prior to the commencement of each year
(beginning January 1, 2005) for which deferrals of Director’s Fees will be made,
the Participant will make an election to have the earnings on all future
deferrals calculated based upon the investment return attributable to the deemed
investments selected by the Participant based upon the benchmark funds provided
by the Bank.

(c) The Bank shall deduct any amounts it is required to
withhold under state, federal or local law or regulations for taxes or
other charges from the Participant’s deferred Director’s Fees, or earnings
thereon.

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

       4.02 Determination of Account. Each Participant’s Benefit Account as of each
Determination Date shall consist of the balance of the Participant’s Benefit Account as of the
immediately preceding Determination Date, plus the amounts required to be credited to such account
by the Bank pursuant to Section 4.01.

       4.03 Statement of Account. The Bank shall provide each Participant, within 120 days
after the close of the Plan Year, a statement in such form as the Bank deems appropriate setting
forth the balance to the credit of such Participant in his or her Benefit Account as of the last
day of the preceding Plan Year.

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

4

 

ARTICLE V

Payment of Benefits

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

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

     5.03 Hardship Distribution. The Administrative Committee may, in its sole discretion,
upon finding that the Participant has suffered or is suffering a Hardship, distribute to such
Participant all or a portion of his or her compensation deferred under the Plan. Distributions
pursuant to Hardship shall include interest based upon the Interest Yield as described in Section
1.10.

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

5

 

ARTICLE VI

Administration

     6.01 Administrative Committee. The Plan shall be administered by the same
Administrative Committee appointed by the Board of Directors to administer the Bank’s Employee
Deferred Compensation Plan. This administration shall be in accordance with this Plan’s terms and
purposes. Interpretation by the Administrative Committee shall be final and binding upon a
Participant. The Administrative Committee shall be responsible for administration of the Plan in
accordance with the terms and provisions herein.

     6.02 Claims Procedure.

          (a) All claims shall be filed in writing by the Participant, his or her
beneficiary or authorized representative of the claimant, by completing such
procedures as the Administrative Committee shall require. Such procedures shall be
reasonable and may include the completion of forms and the submission of documents
and additional information.

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

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

6

 

ARTICLE VII

Miscellaneous

     7.01 Amendment and Termination. The Board of Directors of the Bank may, at any time,
amend or terminate the Plan, provided that the Board may not reduce or modify any benefit being
paid to a Participant or a Participant’s Beneficiary as a result of the death of such Participant
prior to such amendment or termination. Furthermore, in the event the Plan is terminated by the
Board of Directors, the Bank shall distribute to the Participant or a Participant’s Beneficiary, in
the form of a lump sum payment within ninety (90) days from the date of the Board resolution to
terminate the Plan, the Participant’s then total account balance from all sources, interest on such
amounts calculated at the Interest Yield and accrued through the calendar day immediately preceding
the date of the lump sum distribution. After such payment, any and all obligations of the Bank
under the Plan shall be considered satisfied, and the Bank shall have no further obligations under
the Plan to Participants or their Beneficiaries. Such notice of termination or Plan amendment
shall be provided in writing to all Directors participating in the Plan.

     7.02 Assignment of Benefits. The Board of Directors of the Bank may, at any time,
amend or terminate the Plan, provided that the Board may not reduce or modify any benefit being
paid to a Participant or a Participant’s Beneficiary as a result of the death of such Participant
prior to such amendment or termination. Furthermore, in the event the Plan is terminated by the
Board of Directors, the Bank shall distribute to the Participant or a Participant’s Beneficiary, in
the form of a lump sum payment within ninety (90) days from the date of the Board resolution to
terminate the Plan, the Participant’s then total Benefit Account balance. After such payment, any
and all obligations of the Bank under the Plan shall be considered satisfied, and the Bank shall
have no further obligations under the Plan to Participants or their Beneficiaries. Such notice of
termination or Plan amendment shall be provided in writing to all Participants.

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

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

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

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

7

 

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

Attention: Directors Nonqualified Deferred Compensation Plan

Federal Home Loan Bank of Dallas

8500 Freeport Parkway South, Suite 600

Irving, Texas 75063-2547

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

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

     This Nonqualified Deferred Compensation Plan for the Board of Directors reflects the governing
provisions of the Plan effective July 24, 2004 and incorporates all revisions and amendments for
the period January 1, 1995 through July 24, 2004.

	 	 	 	 	 
	 	 	Bank:
	 
	 	 	 	 
	 	 	FEDERAL HOME LOAN BANK OF DALLAS
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Timothy J. Heup
	 	 	 	 	 
	 

	 	 	 	Corporate Officer

ATTEST:

	 	 	 
	    /s/ Karen A. Krug

	 	 
	 	 	 
	Corporate Secretary
	 	 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]