Exhibit 10.1
Execution Copy
EMPLOYMENT AGREEMENT
     This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of this 12th
day of June 2006 by and between STATE NATIONAL BANCSHARES, INC., a Texas
corporation (together with any successor thereto, the “Company”), and TOM C.
NICHOLS (the “Executive”).
WITNESSETH:
     WHEREAS, the Executive is currently employed by the Company as its Chief
Executive Officer pursuant to an employment agreement, dated as of June 30,
1999, by and between the Executive and the Company (as the same may be amended,
the “Prior Agreement”);
     WHEREAS, on the date hereof, the Company entered into an Agreement and Plan
of Merger By and Among Banco Bilbao Vizcaya Argentaria, S.A. (the “Parent”), and
the Company (the “Merger Agreement”) pursuant to which a newly-formed
wholly-owned subsidiary of Parent will be merged with and into the Company (the
“Transaction”) and the Company will be the surviving corporation;
     WHEREAS, the Executive and the Company acknowledge and agree that the
Executive has had and will continue to have a prominent role in the management
of the business, and the development of the goodwill, of the Company and its
Subsidiaries and has established and developed and will continue to establish
and develop relations and contacts with the principal customers and suppliers of
the Company and its Subsidiaries in Texas and New Mexico, all of which
constitute valuable goodwill of, and could be used by Executive to compete
unfairly with, the Company and its Affiliates;
     WHEREAS, (i) in the course of his employment with the Company, the
Executive has obtained and will continue to obtain confidential and proprietary
information and trade secrets concerning the business and operations of the
Company and its Affiliates that could be used to compete unfairly with the
Company and its Affiliates; (ii) the covenants and restrictions contained in
Sections 8, 9, 10 and 11 are intended to protect the legitimate interests of the
Company and its Affiliates in their respective goodwill, trade secrets and other
confidential and proprietary information; and (iii) the Executive desires to be
bound by such covenants and restrictions;
     WHEREAS, in connection with and subject to consummation of the Transaction,
the Company desires to continue the employment of the Executive, and the
Executive desires to accept such continued employment, in each case, on and
subject to the terms and conditions set forth herein.
     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and promises contained herein and for other good and valuable consideration, the
Company and the Executive hereby agree as follows:

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          1. Term. Subject to the consummation of the Transaction, the Executive
shall continue his employment with the Company pursuant to the terms and
conditions of this Agreement and this Agreement will become effective at the
Effective Time (as defined in the Merger Agreement) (the date on which the
Effective Time occurs referred to herein as the “Effective Date”). Subject to
consummation of the Transaction, the Company shall employ the Executive for a
one (1) year term beginning on the Effective Date (the “Employment Term”). The
Executive and the Company each hereby acknowledge and agree that their
respective rights and obligations hereunder are subject to the consummation of
the Transaction and the Prior Agreement shall remain in full force and effect
until the consummation of the Transaction and, thereafter, the Prior Agreement
shall terminate in its entirety and be of no further force or effect.
          2. Position. The Executive will serve initially as the Chief Executive
Officer of the Company. During the Employment Term, the Executive will be
responsible for the integration of the business and operations of the Company
with the other businesses conducted by Parent or its Subsidiaries and the
transition of the business and operations of the Company to a successor
management team and shall have such other duties an d responsibilities as are
customarily assigned to individuals serving in such position and as the Board of
Directors of the Company (the “Board”) may specify from time to time. During the
Employment Term the Board may modify the Executive’s title as appropriate to
reflect the new integrated structure of the Company and the successor management
team. During the Employment Term, the Executive shall devote all of his skill,
knowledge and working time to the conscientious performance of his duties and
responsibilities hereunder, except for (i) vacation time taken in accordance
with the applicable policies of the Company and absence for sickness or similar
disability and (ii) to the extent that it does not interfere with the
performance of Executive’s duties hereunder, (A) such reasonable time as may be
devoted to service on boards of directors of other corporations and entities,
subject to the provisions of Sections 8, 9, 10 and 11, and the fulfillment of
civic responsibilities and (B) such reasonable time as may be necessary from
time to time for personal financial matters. During the Employment Period,
Employer shall use its reasonable best efforts to cause Executive to be
nominated and elected to serve as a member of the Board of Directors, without
additional compensation.
          3. Salary. During the Employment Term, the Company will pay the
Executive a base salary of $350,000 per annum, payable in accordance with the
Company’s regular payroll practices. The Executive’s base salary will be subject
to bi-annual review and the Company may, in its sole discretion, increase, but
not decrease, such amount.
          4. Annual Bonus. During the Employment Term, the Company will pay the
Executive an annual bonus of $150,000, payable at the end of the Employment
Term.
          5. Transaction Completion Bonus. Provided the Effective Date occurs
after December 31, 2006, the Company will pay to the Executive a cash

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transaction bonus of $1,500,000 on or as soon as reasonably practicable
following the Effective Date.
          6. Employee Benefits. During the Employment Term, the Executive will
be entitled to participate generally in the benefit and perquisite plans and
programs of the Company made available to other executive officers of the
Company (including, to the extent maintained by the Company, life, medical,
vision, dental, accidental and disability insurance plans and profit sharing,
pension, retirement, deferred compensation and savings plans) in accordance with
the terms and conditions of such plans or programs, as in effect from time to
time.
          7. Business Travel, Lodging, etc. The Company shall reimburse the
Executive for reasonable travel, lodging, meal and other reasonable expenses
incurred by him in connection with his performance of services hereunder upon
submission of evidence, satisfactory to the Company, of the incurrence and
purpose of each such expense and otherwise in accordance with the Company’s
business travel reimbursement policy applicable to its senior executives as in
effect from time to time.
          8. Unauthorized Disclosure. During the period of Executive’s
employment with the Company and the ten year period following any termination of
such employment, without the prior written consent of the Board or its
authorized representative, except to the extent required by an order of a court
having jurisdiction or under subpoena from an appropriate government agency, in
which event, the Executive shall use his best efforts to consult with the Board
prior to responding to any such order or subpoena, and except as required in the
performance of his duties hereunder, the Executive shall not use or disclose any
confidential or proprietary trade secrets, customer lists, drawings, designs,
information regarding product development, marketing plans, sales plans,
manufacturing plans, management organization information (including but not
limited to data and other information relating to members of the Board or the
Board of Directors of any of the Company’s Affiliates or to management of the
Company or any of its Affiliates), operating policies or manuals, business
plans, financial records, packaging design or other financial, commercial,
business or technical information (a) relating to the Company or any of its
Affiliates or (b) that the Company or any of its Affiliates may receive
belonging to suppliers, customers or others who do business with the Company or
any of its Affiliates (collectively, “Confidential Information”) to any third
person unless such Confidential Information has been previously disclosed to the
public or is in the public domain (other than by reason of the Executive’s
breach of this Section 8).
          9. Non-Competition. During the period of the Executive’s employment
with the Company and, following any termination thereof, the period ending on
the third anniversary of the Effective Date (such periods, collectively, the
“Restriction Period”), the Executive shall not, directly or indirectly, become
employed by, engage in business with, serve as an agent or consultant to, or
become a partner, member, principal or stockholder (other than a holder of less
than 5% of the outstanding voting shares of any publicly held company) of, any
Person that competes or has a reasonable potential for competing with any part
of the business of the Company or any of its Subsidiaries, in

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the case of the period prior to the second anniversary of the Effective Date,
anywhere in Texas or New Mexico and, in all other cases, anywhere in Texas or
New Mexico where the Company conducts business as of the Closing Date (as
defined in the Merger Agreement).
          As consideration for the Executive’s agreeing to and complying with
the non-competition restrictions in this Section 9 and the non-solicitation
restrictions under Section 10 and 11 of this Agreement, and subject to the
Executive’s continued compliance with all such restriction, the Company shall
(i) pay the Executive an aggregate amount of $1 million, with one-half of such
amount payable on the second anniversary of the Effective Date and the remaining
one-half payable on the third anniversary of the Effective Date and (ii) shall
provide the Executive with coverage for him and his eligible dependents under
the Company’s medical and other health plans during the period commencing on the
first anniversary of the Effective Date and ending on the third anniversary of
the Effective Date, subject to timely payment by the Executive of all premiums,
contributions and other co-payments required to be paid by senior executives of
the Company under the terms of such plans as in effect from time to time.
          10. Non-Solicitation of Employees. During the Restriction Period, the
Executive shall not, directly or indirectly, for his own account or for the
account of any other Person, solicit for employment, employ or otherwise
interfere with the relationship of the Company or any of its Affiliates with any
natural person who is or was employed by or otherwise engaged to perform
services for the Company (other than as an employee of or consultant to any
legal, accounting or other professional service firm retained by the Company or
any of its Affiliates) or any of its Affiliates at any time during which
Executive was employed by the Company pursuant to this Agreement or, in the case
of any such solicitation, employment or interference following the Employment
Term, during the six-month period preceding such solicitation, employment or
interference, other than any such solicitation or employment on behalf of the
Company or any of its Affiliates during the Executive’s employment with the
Company.
          11. Non-Solicitation of Customers. During the Restriction Period, the
Executive shall not, directly or indirectly, for his own account or for the
account of any other Person, solicit or otherwise attempt to establish any
business relationship of a nature that is competitive with the business or
relationship of the Company or any of its Affiliates with any Person which is or
was a customer, client or distributor of the Company or any of its Affiliates at
any time during which the Executive was employed by the Company pursuant to this
Agreement, other than any such solicitation on behalf of the Company or any of
its Affiliates during the Executive’s employment with the Company.
          12. Injunctive Relief with Respect to Covenants; Forum, Venue and
Jurisdiction. The Executive acknowledges and agrees that the covenants,
obligations and agreements of the Executive contained in Sections 8, 9, 10, and
11 and this Section 12 relate to special, unique and extraordinary matters and
that a violation of any of the terms of such covenants, obligations or
agreements will cause the Company irreparable injury for which adequate remedies
are not available at law. Therefore, the Executive agrees

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that the Company shall be entitled to an injunction, restraining order or such
other equitable relief (without the requirement to post bond) as a court of
competent jurisdiction may deem necessary or appropriate to restrain the
Executive from committing any violation of such covenants, obligations or
agreements. These injunctive remedies are cumulative and in addition to any
other rights and remedies the Company may have.
          13. Assumption of Agreement. Employer shall require any Successor
thereto, by agreement in form and substance reasonably satisfactory to the
Executive, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place.
          14. Entire Agreement; Termination of Prior Agreement. This Agreement
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof. All prior correspondence and proposals (including but not
limited to summaries of proposed terms) and all prior promises, representations,
understandings, arrangements and agreements relating to such subject matter
(including but not limited to those made to or with the Executive by any other
Person and those contained in the Prior Agreement or any other prior employment,
consulting or similar agreement entered into by Executive and the Company or any
predecessor thereto or Affiliate thereof) are merged herein and superseded
hereby.
          15. Miscellaneous
          (a) Binding Effect; Assignment. This Agreement shall be binding on and
inure to the benefit of the Company, and its successors and permitted assigns.
This Agreement shall also be binding on and inure to the benefit of the
Executive and his heirs, executors, administrators and legal representatives.
This Agreement shall not be assignable by any party hereto without the prior
written consent of the other, except as provided pursuant to this Section 15.
The Company may effect such an assignment without prior written approval of the
Executive upon the transfer of all or substantially all of its business and/or
assets (by whatever means), provided that the Successor to the Company shall
expressly assume and agree to perform this Agreement in accordance with the
provisions of Section 13.
          (b) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of Texas without reference to principles of
conflicts of laws.
          (c) Taxes. The Company may withhold from any payments made under this
Agreement all applicable taxes, including but not limited to income, employment
and social insurance taxes, as shall be required by law.
          (d) Amendments. No provision of this Agreement may be modified, waived
or discharged unless such modification, waiver or discharge is approved by the
Board or a Person authorized thereby and is agreed to in writing by Executive.
No

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waiver by any party hereto at any time of any breach by any other party hereto
of, or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
waiver of any provision of this Agreement shall be implied from any course of
dealing between or among the parties hereto or from any failure by any party
hereto to assert its rights hereunder on any occasion or series of occasions.
          (e) Severability. In the event that any one or more of the provisions
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
          (f) Notices. Any notice or other communication required or permitted
to be delivered under this Amended Agreement shall be (i) in writing,
(ii) delivered personally, by courier service or by certified or registered
mail, first-class postage prepaid and return receipt requested, (iii) deemed to
have been received on the date of delivery or, if so mailed, on the third
business day after the mailing thereof, and (iv) addressed as follows (or to
such other address as the party entitled to notice shall hereafter designate in
accordance with the terms hereof):

  (A)   If to the Company, to it at:         Peter Paulsen, Esq.
c/o BBVA USA, Inc.
Waterway Two
10001 Woodloch Forest Drive
Suite 610
The Woodlands, TX 77380     (C)   if to the Executive, to him at his residential
address as currently on file with the Company.

          16. Certain Definitions.
          “Affiliate”: with respect to any Person, means any other Person that,
directly or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with the first Person, including but
not limited to a Subsidiary of the first Person, a Person of which the first
Person is a Subsidiary, or another Subsidiary of a Person of which the first
Person is also a Subsidiary.
          “Control”: with respect to any Person, means the possession, directly
or indirectly, severally or jointly, of the power to direct or cause the
direction of the management policies of such Person, whether through the
ownership of voting securities, by contract or credit arrangement, as trustee or
executor, or otherwise.

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          “Person”: any natural person, firm, partnership, limited liability
company, association, corporation, company, trust, business trust, governmental
authority or other entity.
          “Subsidiary”: with respect to any Person, each corporation or other
Person in which the first Person owns or Controls, directly or indirectly,
capital stock or other ownership interests representing 50% or more of the
combined voting power of the outstanding voting stock or other ownership
interests of such corporation or other Person.
          “Successor”: of a Person means a Person that succeeds to the first
Person’s assets and liabilities by merger, liquidation, dissolution or otherwise
by operation of law, or a Person to which all or substantially all the assets
and/or business of the first Person are transferred.
          IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s
hand and, pursuant to the authorization of the Board, the Company has caused
this Agreement to be executed in its name on its behalf, all as of the day and
year first above written.

            STATE NATIONAL BANCSHARES, INC.
      By:   /s/ Don E. Cosby         Don E. Cosby                      /s/ Tom
C. Nichols       Tom C. Nichols           

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