Document:

QuickLinks
 -- Click here to rapidly navigate through this document
  

 
 

Exhibit 10.9    
    

 
 

EMPLOYMENT AND NON COMPETE AGREEMENT    
    

        THIS AGREEMENT made on the 23rd day of April, 2004, between STATE NATIONAL BANCSHARES, INC., a Texas corporation and registered bank holding company with
its principal offices at 1617 Broadway, P.O. Box 5240, Lubbock, Texas (the "Employer"), and MORRIE B. MINSHEW, 921 West Lamar Blvd., Arlington, Texas 76012 (the "Employee"). 

        1.    TERM OF EMPLOYMENT.    

        1.01    Primary Term.    Employer hereby employs Employee for the purpose of rendering services to State National Bank
or its successor (the "Bank"), and Employee hereby accepts employment, for a period beginning on the effective date of the acquisition of Mercantile Bank Texas by Employer pursuant to the terms of the
Agreement and Plan of Reorganization dated April 12, 2004 between Employer and Mercantile Bank Texas and continuing through the third anniversary of the effective date of such acquisition
("Primary Term"); provided, however, this Agreement may be terminated earlier as hereinafter provided in Section 5. 

        1.02    Extension of Term.    The term of this Agreement may be extended after expiration of the Primary Term hereof,
upon the mutual consent of Employer and Employee. The Primary Term of this Agreement plus the period of any extensions mutually agreed to by Employer and Employee shall be the "Term" of this
Agreement. 

        2.    DUTIES OF EMPLOYEE.    

        2.01.    General Duties.    During the Term of this Agreement, Employee agrees, at a minimum, to (i) serve as
Chairman—Tarrant County of the Bank, and (ii) attend such officer committee meetings as Employer requests. Employee further agrees to use his best efforts to (i) promote
Employer's and Bank's goodwill, (ii) retain customers and clients of the Bank for Employer's and the Bank's benefit, and (iii) maintain, promote and develop customer relations for
Employer and the Bank. Employee shall also be available for any other projects mutually agreed upon between Employer or the Bank and Employee. Employee's principal office during the Term of this
Agreement shall be in Tarrant County, Texas unless otherwise mutually agreed by Employer and Employee. 

        2.02.    Engaging in Other Employment.    During the Term of this Agreement, Employee shall devote his full business
time and best efforts in carrying out his duties as an officer of the Bank and shall not have other employment during the term of this Agreement without the consent of Employer. 

        2.03.    Performance by Employee.    The Employee covenants and agrees that he will at all times faithfully and
industriously perform his duties under this Agreement. 

        3.    COMPENSATION.    

        3.01.    Basic Compensation.    As compensation for services rendered under this Agreement, Employee shall be entitled
to receive from the Bank a salary equivalent to Two Hundred Twenty-Five Thousand Dollars ($225,000) per year (which annual amount shall be pro rated for any partial year), payable in equal
semimonthly installments of Nine Thousand Three Hundred Seventy-Five Dollars ($9,375), payable on such days as the Bank normally pays its employees, prorated for any partial employment
period. 

        3.02.    Additional Compensation.    Employee shall be paid such additional compensation, if any, for services
rendered hereunder as may be determined in the sole discretion of the Employer. 

        3.03.    Stock Options.    Upon execution of this Agreement, Employer shall grant to Employee, non qualified stock
options to purchase up to 125,000 shares of Employer's voting common stock at an 

1

 

exercise
price equal to $18.50 per share. One-third of such options shall vest on each of the first, second and third anniversaries of date of grant and shall be exercisable over a period
of five years from date of grant; provided, however, that if Employee's service with the Bank and/or Employer under this Agreement is terminated for any reason, all of such options shall immediately
vest and become exercisable. Such options shall be subject to and governed by the terms of the State National Bancshares, Inc. Employee Stock Option Plan. 

        3.04.    Insurance Benefits.    During the Term of this Agreement, Employer shall provide or cause the Bank to provide
to Employee, his spouse and dependants insurance coverage providing benefits for sickness and hospitalization in such amounts and on such terms as generally available to all employees or officers of
the Bank as approved from time to time. Further, Employer shall provide or cause the Bank to provide to Employee insurance coverage benefits for disability in such amount and on such terms as are
generally available to other similarly situated or comparable officers of the Bank and Employer. 

        3.05.    Bank Automobile.    During the Term of this Agreement, Employee shall continue to have the use of his
existing Bank automobile until Employee desires to replace such automobile. Employee shall be reimbursed for insurance, fuel and repairs related to the automobile until Employee desires to replace the
automobile. At that time, Employee shall have the option to purchase his Bank automobile from the Bank for book value which shall reasonably approximate market value, and he will thereafter receive an
automobile allowance comparable to that provided for comparable officers of Employer and the Bank. 

        3.06.    Country Club.    During the term of this Agreement, Employer shall reimburse Employee for monthly country
club dues and any assessments or capital contributions at Shady Valley Country Club and for reasonable business related expenses incurred by Employee at such country club. 

        3.07.    Supplemental Executive Retirement Plan ("SERP").    Employee shall be entitled to participate in Employer's
SERP with a defined contribution (i) designed to approximate ten percent of his pay at the end of a five year period one-fifth of which shall vest on each anniversary date of the
effective date of this Agreement, in the event Employee's employment is terminated prior to age sixty-five, or (ii) comparable to other senior management currently estimated at
forty percent of his pay at age sixty-five. 

        3.08.    Employee Benefits and Bonuses.    During the Term of this Agreement, Employee shall receive such additional
fringe benefits and bonuses as allowed under the Bank's stated policies as may be determined from time to time in the sole discretion of the Employer; provided, however, Employee shall be entitled to
participate, on the same basis as other similarly situated senior officers of Employer and its affiliates, in all incentive and benefit programs or arrangements made available by Employer and its
affiliates to such senior officers. 

        3.09.    Bank's 401(k) Plan.    During the Term of this Agreement, Employee shall be entitled to participate in the
Bank's 401(k) Plan so long as a 401(k) Plan is available to the employees of the Bank. Employer shall make or cause the Bank to make such contributions for Employee as made for other comparable
officers of the Bank and Employer. 

        3.10    Business Expenses.    Employer shall, or cause Bank to, reimburse Employee for all reasonable expenses
incurred by him in the course of rendering his services pursuant to this Agreement; provided,
however, Employee shall promptly submit such reasonable documentation as may be requested by the Bank to verify such expenditures. 

        3.11    Vacation.    Employee shall be entitled to four weeks of paid vacation per year. Such vacation may be taken
consecutively in one year or in a series of shorter vacation periods during the course of each such year. The vacation to which Employee is entitled, pursuant to this Section, shall be available under
the same terms and conditions as are applicable to similarly situated executive officers of 

2

 

Employer
and its affiliates. Employee shall take into consideration needs of the Bank in setting his vacation schedule. 

        3.12    Office and Personnel.    During the Term of this Agreement, the Bank shall provide Employee with such office
space and support personnel as are reasonably necessary to be sufficient to enable Employee to perform the duties and responsibilities set forth in Section 2.01 of this Agreement. 

        4.    NON COMPETITION AND NON DISCLOSURE.    

        4.01.    Non Compete Covenants.    Employee agrees that for a period of two years after the earlier to occur of
(i) the end of the Primary Term of this Agreement or (ii) the termination of Employee's employment with Employer, Employee shall not, directly or indirectly, individually or as an
employee, consultant, partner, officer, director or shareholder or in any other capacity whatsoever: 

	(i)
	solicit
the banking business of any customers of the Bank;

	(ii)
	(A)   acquire,
charter, operate or enter into any franchise or other management agreement with any financial

         institution, 
	(B)
	serve
as an officer, director, employee, agent or consultant to any financial institution, or

	(C)
	establish
or operate a branch or other office of a financial institution, 

        within
Tarrant County; or 

	(iii)
	knowingly
recruit, hire, assist others in recruiting or hiring, discuss employment with, or refer others concerning employment, any person who is, or within the preceding twelve
(12) months was, an employee of the Bank; provided, however, that nothing in this Section 1(a)(iii) shall apply to employment other than with a financial institution. 

        As
consideration for Employee's covenant not to compete herein, Employer shall pay to Employee an annual payment equal to the sum of Two Hundred Twenty-Five Thousand Dollars
($225,000) plus the average annual bonus received by Employee during the term of this Agreement (the "Non Compete Payment"). Such payments shall be made in equal semi-monthly installments
after termination of employment. Except in the event of termination for cause as described in Section 5.01, Employee's agreement not to compete is conditioned upon payment of the Non Compete
Payment by Bank, commencing with the first pay period following termination of employment. 

        4.02    Judicial Limitation.    If any court of competent jurisdiction should determine that any term or terms of non
compete covenants are too broad in terms of time, geographic area, lines of commerce or otherwise, such court shall modify and revise any such term or terms so that they comply with applicable law. 

        4.03    Non-Disclosure and Proprietary Information.    Employee acknowledges that, by the nature of his
duties, he will have access to and become informed of confidential, proprietary, and highly sensitive information relating to the Bank and which is a competitive asset of the Bank, including, without
limitation, information pertaining to: (i) the identities of the Bank's existing and prospective customers or clients, including names, addresses, credit status, and pricing levels;
(ii) the borrowing habits and customs of the Bank's existing and prospective customers or clients; (iii) financial information about the Bank, including prices, costs, and profit
margins; (iv) the identities of and special skills possessed by the Bank's employees; (v) the identities of and pricing and cost information about the Bank's suppliers and vendors;
(vi) training programs developed by the Bank; (vii) current and prospective products and services; (viii) the Bank's financial results and business conditions; and (ix) the
Bank's business plans and strategies. The confidential, proprietary, and highly sensitive information described in this paragraph is hereinafter referred to as "Proprietary Information"; provided,
however, the term 

3

 

'Proprietary
Information' shall exclude any information that (a) is or becomes publicly available other than as a result of acts by Employee in violation of this Agreement, or (b) is
disclosed to Employee by a third party who is not prohibited from disclosing such information by any contractual, fiduciary or other obligation. 

        Employee
agrees that he will not: (i) use, at any time, any Proprietary Information for his own benefit or for the benefit of any other person, entity, or corporation; or
(ii) disclose, directly or indirectly, any Proprietary Information to any person who is not an employee of the Bank, at any time following the Term of this Agreement, except as directed by Bank
or Employer, or when required by law, statute, regulation, or rule of any governmental body or agency, or pursuant to a subpoena or court order; or (iii) use or disclose, directly or
indirectly, any Proprietary Information in connection with any business opportunity pursued or engaged in by Employee following the Term of this Agreement. . 

        4.04    Return of Bank Property.    Employee acknowledges that all equipment, keys, passcodes or passwords, memoranda,
notes, records, reports, manuals, drawings, books, papers, letters, formulas, client and customer lists, loan files or information contracts, software programs, instruction books, catalogs,
information and records, technical manuals and documentation, drafts of instructions, guides and manuals, maintenance manuals, and other documentation (whether in draft or final form), and other sales
information and aids relating to the Bank's business, and any and all other documents containing Proprietary Information furnished to Employee by any representative of the Bank or otherwise acquired
or developed by Employee in connection with his employment with the Bank (collectively, "Recipient Materials") shall at all times be the property of the Bank. 

        At
the end of the Term of this Agreement, Employee will return to the Bank any Recipient Materials which are in his possession, custody or control. 

        4.05    Injunctive Relief.    Employer and Employee hereby acknowledge and agree that the Employer and the Bank will
be irreparably damaged if the provisions of Section 4 of this Agreement are not specifically
enforced. Accordingly, Employer or the Bank shall be entitled to an injunction restraining any violation of this Agreement by Employee (without any bond or other security being required), or any other
appropriate decree of specific performance. Such remedies shall not be exclusive and shall be in addition to any other remedy that Employer or the Bank may have at law or in equity. 

        5.    TERMINATION.    

        5.01    Termination by Employer for Cause.    Employer may, at its option, terminate this Agreement by giving written
notice of termination for "cause" to Employee, and complying with the terms of this Section 5.01. For the purpose of this Section 5.01, the term "cause" shall mean (i) willful
misconduct or gross malfeasance, or an act or acts of gross negligence in the course of employment or any material breach of the Employee's obligations contained in this Agreement if such material
breach of Employee's obligations under this Agreement continues for a period of thirty (30) days after Employee's actual receipt of written notice of such material breach from Employer;
(ii) any intentional material misstatement or material omission to the Board of Directors of the Bank or any member thereof, respectively, with respect to the business, financial condition, or
results of operations of the Bank; (iii) the intentional failure of the Employee to follow the reasonable instructions or the policies of the Board (other than as a result of disability) if,
but only if, (a) such instructions or policies are (A) lawful and (B) consistent with this Agreement and Employee's duties hereunder and (b) such violation continues for a
period of thirty (30) days following Employee's actual receipt of written notice of Employee's violation of such instructions or policies; (iv) the Employee's conviction, admission,
confession or agreed deferred adjudication of any felony or Employee's conviction, admission or confession of any other criminal act resulting in incarceration for a period greater than six months; or
(v) the intentional violation by the Employee of applicable state or federal banking statutes, rules or 

4

 

regulations.
Upon termination of this Agreement for "cause", Employee shall be entitled to receive Basic Compensation earned but unpaid at the time of such termination, reimbursable expenses incurred
by, but not yet reimbursed, to Employee at the time of such termination, any earned and other vested benefits due to Employee at the time of such termination, and group health coverage that is
required to be continued by applicable law. In the event Employee is terminated for "cause" pursuant to this Section 5.01, Employee shall continue to be bound by the non compete and non
disclosure covenants contained in Article 4, but the Employee shall not be entitled to receive the Non Compete Payment described in Section 4.01. 

        5.02.    Termination by Employer Other Than for Cause.    In the event Employee's service with Employer is terminated
by Employer other than for "cause" as defined in Section 5.01, Employer shall pay to Employee in full satisfaction of Employer's remaining financial obligations under this Agreement the greater
of (i) the Basic Compensation as described in Section 3.01 during the remainder of the Primary Term of this Agreement, together with accrued but unused vacation, reimbursable expenses
incurred by, but not yet reimbursed, to Employee at the time of such termination, any unpaid but earned and other vested benefits due to Employee at the time of such termination, and group health
coverage that is required to be continued by applicable law, or (ii) the Non Compete Payment described in Section 4.01. Employee shall continue to be bound by the non competition and non
disclosure obligations contained in Article 4 of this Agreement during the period Employer makes such payments. 

        5.03.    Voluntary Termination by Employee.    In the event Employee's service with Employer is terminated by
Employee, Employee shall be entitled only to compensation accrued hereunder at the time of termination, including but not limited to, accrued but unused vacation, reimbursable expenses incurred by,
but not yet reimbursed, to Employee at the time of such termination, any unpaid but earned and other vested benefits due to Employee at the time of such termination, and group health coverage that is
required to be continued by applicable law, and Employee shall continue to be bound by the non competition and non disclosure obligations contained in Article 4 of this Agreement, as long as
Bank pays Employee the Non Compete Payment. 

        6.    GENERAL PROVISIONS.    

        6.01.    Notices.    Any notices to be given hereunder by either party to the other may be effected either by personal
delivery in writing or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses appearing in the introductory
paragraph of this Agreement, but each party may change its/his address by written notice in accordance with this paragraph. Notices delivered personally shall be deemed communicated as of actual
receipt; mailed notices shall be deemed communicated as of five (5) days after mailing. 

        6.02.    Inclusion of Entire Agreement Herein.    This Agreement supersedes any and all other agreements, either oral
or in writing, between the parties hereto with respect to the employment of the Employee by Employer and contains all of the covenants and agreements between the parties with respect to such
employment in any manner whatsoever. 

        6.03.    Law Governing Agreement.    This Agreement shall be governed by and construed in accordance with the laws of
the State of Texas. 

        6.04.    Arbitration.    Employer and the Employee recognize that in the event a dispute should arise between them
concerning the interpretation or implementation of this Agreement, lengthy and expensive litigation will not afford a practical resolution of the issues within a reasonable time period. Consequently,
each party agrees that all disputes, disagreements, and questions of interpretation concerning this Agreement are to be submitted for resolution to the American Arbitration Association ("AAA") in
Lubbock County, Texas. Either Employer or the Employee may initiate an arbitration proceeding at any time by giving notice to the other in accordance with the AAA's rules. The arbitrator 

5

 

shall
not have the authority to add to, detract from, or modify any provision hereof nor to award punitive damages to any injured party. The arbitrator shall have the authority to order
pay-back, severance compensation, vesting of options (or cash compensation in lieu of vesting of options), reimbursement of costs, including those incurred to enforce this Agreement and
interest thereon. The question of whether Employer or the Employee shall be liable for the costs incurred because of the arbitration shall also be decided by the arbitrator. The AAA shall designate a
single arbitrator to conduct the proceeding, but Employer and the Employee may, as a matter of right, require the substitution of a different arbitrator chosen by the AAA. This right of substitution
may be exercised only once by the Employer and the Employee. The arbitrator shall not be bound by the rules of evidence and procedure of the courts of Texas, but shall be bound by the substantive law
applicable to this Agreement. The decision of the arbitrator, absent fraud, duress, incompetence, or gross and obvious error of fact, shall be final and binding upon the Employer and the Employee and
shall be construed to prevent Employer from asking a court of competent jurisdiction to enter appropriate equitable relief to enjoin a violation of the covenants of Section 4. 

        6.05.    Payment of Moneys Due Deceased Employee.    If the Employee dies prior to the expiration of the term of
employment under this Agreement, any monies that may be due the Employee from the Employer under this Agreement as of the date of his death, including but not limited to, accrued but unused vacation,
reimbursable expenses incurred by, but not yet reimbursed, to Employee at the time of his death, any unpaid but earned and other vested benefits due to Employee at the time of his death, and group
health coverage, for Employee's family, that is required to be continued by applicable law, shall be paid to the Employee's executors, administrators, heirs, personal representatives, successors and
assigns. 

        6.06    Employer Obligations.    Employer hereby covenants to perform or cause Bank to perform any obligations
specified to be performed by Bank hereunder. 

        EXECUTED on the day and year first above written. 

	EMPLOYER:	 	 	 
	
STATE NATIONAL BANCSHARES, INC.	
 	

 	

 
	

By:	

/s/  TOM NICHOLS      
 Tom Nichols, Chairman	
 	

 	

 
	
EMPLOYEE:	
 	

 	

 
	

/s/  MORRIE B. MINSHEW      
 Morrie B. Minshew	
 	

 	

 

6

QuickLinks

Exhibit 10.9

EMPLOYMENT AND NON COMPETE AGREEMENTQuickLinks
 -- Click here to rapidly navigate through this document
  

 
 

Exhibit 10.10    
    

 
 

EMPLOYMENT AND NON SOLICITATION AGREEMENT    
    

        THIS AGREEMENT made on the 23rd day of April, 2004, between STATE NATIONAL BANCSHARES, INC., a Texas corporation and registered bank holding company with
its principal offices in Lubbock, Texas (the "Employer"), and DOUGLAS TERRY, who resides in Fort Worth, Texas (the "Employee"). 

        1.    TERM OF EMPLOYMENT.    

        1.01 Primary Term. Employer hereby employs Employee for the purpose of rendering services to State National Bank or its
successor (the "Bank"), and Employee hereby accepts employment, for a period beginning on the effective date of the acquisition of Mercantile Bank Texas by Employer pursuant to the terms of the
Agreement and Plan of Reorganization dated April 12, 2004 between Employer and Mercantile Bank Texas and continuing through the eighteen month anniversary of the effective date of such
acquisition ("Primary Term"); provided, however, this Agreement may be terminated earlier as hereinafter provided in Section 5. 

        1.02 Extension of Term. The term of this Agreement may be extended after expiration of the Primary Term hereof, upon the
written mutual consent of Employer and Employee. The Primary Term of this Agreement plus the period of any extensions mutually agreed to by Employer and Employee shall be the "Term" of this Agreement. 

        2.    DUTIES OF EMPLOYEE.    

        2.01. General Duties. During the Term of this Agreement, Employee agrees, at a minimum, to (i) serve as Executive Vice
President—Real Estate of the Bank, and (ii) attend such officer committee meetings as Employer requests. Employee further agrees to use his diligent and good-faith
efforts to (i) promote Employer's and Bank's goodwill, (ii) retain customers and clients of the Bank for Employer's and the Bank's benefit, and (iii) maintain, promote and develop
customer relations for Employer and the Bank. Employee shall also be available for any other projects mutually agreed upon between Employer or the Bank and Employee. Employee's principal office during
the Term of this Agreement shall be in Tarrant County, Texas unless otherwise mutually agreed by Employer and Employee. 

        2.02. Engaging in Other Employment. During the Term of this Agreement, Employee shall devote his full business time and best
efforts in carrying out his duties as an officer of the Bank and shall not have other employment during the term of this Agreement without the consent of Employer. 

        2.03. Performance by Employee. The Employee covenants and agrees that he will at all times faithfully and industriously
perform his duties under this Agreement. 

        3.    COMPENSATION.    

        3.01. Basic Compensation. As compensation for services rendered under this Agreement, Employee shall be entitled to receive
from the Bank a salary equivalent to One Hundred Forty-Eight Thousand Dollars ($148,000) per year (which annual amount shall be pro rated for any partial year), payable in equal semimonthly
installments of Six Thousand One Hundred and Sixty-Six Dollars and Sixty-Seven Cents ($6,166.67), payable on such days as the Bank normally pays its employees, prorated for any partial
employment period. 

1

 

        3.02. Additional Alternative Compensation. Employee has been offered the following additional compensation alternatives, one
(1) of which must be selected by the Employee not later than May 15, 2004, by placing an "X" in one (1) of the following boxes: 

	 	
o	
(a)	

"Option No. 1"—In the event Employee selects Option No. 1, Employee shall be entitled to receive the following:
	

 	

 	

(1)	
Signing Bonus. In addition to the other compensation and benefits which Employee is to receive hereunder, Employee shall be entitled to receive a signing bonus of Twenty-Five Thousand
Dollars ($25,000) payable on the effective date of the acquisition of Mercantile Bank Texas by Employer.
	

 	

 	

(2)	
Stock Options. Upon execution of this Agreement, Employer shall grant to Employee, non-qualified stock options to purchase up to 10,000 shares of Employer's voting common stock at an
exercise price equal to $18.50 per share. One third of such options shall vest at the end of the first six months, the second six months and the third six months from the date of the grant and shall be exercisable over a period of five years from
date of grant. Such options shall be subject to and governed by the terms of the State National Bancshares, Inc. Employee Stock Option Plan.
	 	
o	
(b)	

"Option No. 2"—In the event Employee selects Option No. 2, Employee shall be entitled to receive payment for non-solicitation as provided in Section 4.01 hereof, in lieu of the signing bonus and stock options provided for
above.

        3.03. Insurance Benefits. During the Term of this Agreement, Employer shall provide or cause the Bank to provide to Employee,
his spouse and dependants insurance coverage providing benefits for sickness and hospitalization in such amounts and on such terms as generally available to all similarly situated officers of the Bank
as approved from time to time. Further, Employer shall provide or cause the Bank to provide to Employee insurance coverage benefits for disability in such amount and on such terms as are generally
available to the officers of the Bank. 

        3.04. Bank Automobile. During the Term of this Agreement, Employee shall continue to have the use of his existing Bank
automobile until Employee desires to replace such automobile. Employer will continue to be responsible for expenses of operation and maintenance for the automobile consistent with past practices of
the Bank. At that time, Employee shall have the option to purchase his Bank automobile from the Bank for book value which shall reasonably approximate market value, and he will thereafter receive an
automobile allowance comparable to that provided for comparable officers of Employer and the Bank. 

        3.05. Supplemental Executive Retirement Plan ("SERP"). In the event Employer and Employee elect to extend the Term of this
Agreement past the Primary Term set out in Section 1.01, Employee shall be entitled to participate in Employer's SERP following the end of the Primary Term. 

        3.06. Employee Benefits and Bonuses. During the Term of this Agreement, Employee shall receive such additional fringe
benefits and bonuses as allowed under the Bank's stated policies as may be determined from time to time in the sole discretion of the Employer. 

        3.07. Bank's 401(k) Plan. During the Term of this Agreement, Employee shall be entitled to participate in the Bank's 401(k)
Plan so long as a 401(k) Plan is available to the employees of the Bank. Employer shall make or cause the Bank to make such contributions for Employee as made for other officers of the Bank. 

2

 

        4.    NON-SOLICITATION AND NON-DISCLOSURE.    

        4.01. Non Solicitation Covenants. Employee agrees that for a period of one year after the earlier to occur of (i) the
expiration of the first six months of the Primary Term of this Agreement or (ii) the termination of Employee's employment with Employer (the "Non-Solicitation Period"), Employee
shall not, directly or indirectly, individually or as an employee, consultant, partner, officer, director or shareholder or in any other capacity whatsoever: 

	(i)
	solicit
the banking business of any customers except those customers who became customers after the earlier of the expiration of the Primary Term of this agreement or
the termination of the Employee's employment with Bank; or

	(ii)
	recruit,
hire, assist others in recruiting or hiring, discuss employment with, or refer others concerning employment, any person who is, or within the preceding twelve
(12) months was, an employee of the Bank; provided, however, that nothing in this Section 4.01(ii) shall apply to employment other than with a financial institution.

	

	If
Employee has selected Option No. 2 provided for in Section 3.02 hereof, and Employee terminates his employment with Bank under
Section 5.04 hereof, then Employer shall pay to Employee over the Non-Solicitation Period, an amount equal to $74,000.00 per year, prorated if necessary if the
Non-Solicitation Period is less than one (1) year, payable in equal semi-monthly installments of $3,083.33 each, payable on the same dates as Bank normally pays its
employees. By way of example, if Employee terminates his employment twelve (12) months after the commencement of the Primary Term, then Employee shall be entitled to receive payment for the six
(6) month Non-Solicitation Period, an amount equal to $37,000.00. In exchange for such payment, Employee shall be subject to the non-solicitation covenants set forth in
Section 4.01. 

        4.02 Judicial Limitation. If any court of competent jurisdiction should determine that any term or terms of non solicitation
covenants are too broad in terms of time, lines of commerce or otherwise, such court shall modify and revise any such term or terms so that they comply with applicable law. 

        4.03 Non-Disclosure and Proprietary Information. Employee acknowledges that, by the nature of his duties, he will
have access to and become informed of confidential, proprietary, and highly sensitive information relating to the Bank and which is a competitive asset of the Bank, including, without limitation,
information pertaining to: (i) the identities of the Bank's existing and prospective customers or clients, including names, addresses, credit status, and pricing levels; (ii) the
borrowing habits and customs of the Bank's existing and prospective customers or clients; (iii) financial information about the Bank, including prices, costs, and profit margins;
(iv) the identities of and special skills possessed by the Bank's employees; (v) the identities of and pricing and cost information about the Bank's suppliers and vendors;
(vi) training programs developed by the Bank; (vii) current and prospective products and services; (viii) the Bank's financial results and business conditions; and (ix) the
Bank's business plans and strategies. The confidential, proprietary, and highly sensitive information described in this paragraph is hereinafter referred to as "Proprietary Information." Information
that is in the public domain is not Proprietary Information. Additionally, disclosure of Proprietary Information required pursuant to subpoena or court order is not a violation of this agreement. 

        Employee
agrees that he will not: (i) use, during the Term of this Agreement, any Proprietary Information for his own benefit or for the benefit of any other person, entity, or
corporation; or (ii) disclose, directly or indirectly, any Proprietary Information to any person who is not an employee of the Bank, at any time during the Term of this Agreement; or
(iii) use or disclose, directly or indirectly, any Proprietary Information in connection with any business opportunity pursued or engaged in by Employee during the Term of this Agreement. 

3

 

        4.04 Return of Bank Property. Employee acknowledges that all equipment, keys, passcodes or passwords, memoranda, notes,
records, reports, manuals, drawings, books, papers, letters, formulas, client and customer lists, loan files or information contracts, software programs, instruction books, catalogs, information and
records, technical manuals and documentation, drafts of instructions, guides and manuals, maintenance manuals, and other documentation (whether in draft or final form), and other sales information and
aids relating to the Bank's business, and any and all other documents containing Proprietary Information furnished to Employee by any representative of the Bank or otherwise acquired or developed by
Employee in connection with his employment with the Bank (collectively, "Recipient Materials") shall at all times be the property of the Bank. 

        At
the end of the Term of this Agreement, Employee will return to the Bank any Recipient Materials which are in his possession, custody or control. 

        4.05 Injunctive Relief. Employer and Employee hereby acknowledge and agree that the Employer and the Bank will be irreparably
damaged if the provisions of Section 4 of this Agreement are not specifically enforced. Accordingly, Employer or the Bank shall be entitled to an injunction restraining any violation of this
Agreement by Employee (without any bond or other security being required), or any other appropriate decree of specific performance. Such remedies shall not be exclusive and shall be in addition to any
other remedy that Employer or the Bank may have at law or in equity. 

        5.    TERMINATION.    

        5.01. Termination by Employer for Cause. Employer may, at its option, terminate this Agreement by giving written notice of
termination for "cause" to Employee if Employee (i) willfully breaches the terms of this Agreement and fails to cure such breach within thirty (30) days following receipt of written
notice of such breach from Employer, which notice specifically identifies the manner of the breach, (ii) violates the provisions of Section 4 of this Agreement, or (iii) commits
such acts of personal dishonesty, breach of fiduciary duty involving personal profit, fraud or misrepresentation as would prevent the effective performance of his duties and result in injury to
Employer's business. Upon termination of this Agreement by Employer for "cause", the entire Agreement, other than the provisions of Section 4 (which shall remain in full force and effect) shall
terminate and Employee shall be entitled only to such compensation accrued hereunder at the time of termination. 

        5.02. Option to Terminate in Event of Bankruptcy or Similar Proceedings. This Agreement may be terminated immediately by
either party to this Agreement at the option of either party and without prejudice to any other remedy to which either party may be entitled either at law, in equity or under this Agreement by giving
written notice of termination to the other party to this Agreement if either party to this Agreement: 

        (1)   Files
a petition in bankruptcy court or is adjudicated a bankrupt; 

        (2)   Institutes
or suffers to be instituted any procedure in bankruptcy court for reorganization or management of the financial affairs of such party; 

        (3)   Has
a receiver of the assets or property of such party appointed because of insolvency; or 

        (4)   Makes
a general assignment for the benefit of creditors. 

4

 

        5.03 Termination Upon Change in Control for State National BHC. Notwithstanding anything to the contrary contained in this
Agreement, this Agreement shall terminate thirty (30) days following any "Change in Control" which occurs with respect to State National BHC during the Term of this Agreement unless, during
such thirty (30) day period, the Employee and State National BHC or its successor mutually agree in writing not to terminate this Agreement. Upon such termination, the Employee shall be
entitled only to compensation accrued hereunder at the time of termination and the Employee shall no longer be bound by the non-solicitation obligations contained in Article 4 of
this Agreement. The Employee shall continue to be bound by the nondisclosure obligations contained in Section 4.03 hereof. 

        As
used in this Agreement, the term "Change in Control" shall be deemed to have occurred and mean if and when: 

          (i)  any
entity, person or group of persons acting in concert (other than current shareholders or members of the Board of Directors of State National BHC) become beneficial
owners (within the meaning of Section 13(d) of the Securities and Exchange Act of 1934), directly or indirectly, of securities of State National BHC representing more than fifty percent (50%)
of the combined voting power of State National BHC or any successor corporation; 

         (ii)  the
effective date of a merger or consolidation of State National BHC with one or more other corporations as a result of which the holders of the outstanding voting
stock of State National BHC immediately prior to the merger hold less than fifty percent (50%) of the combined voting power of the surviving or resulting corporation; or 

        (iii)  the
effective date of a transfer of all or substantially all of the assets of State National BHC other than to an entity of which State National BHC owns at least
eighty percent (80%) of the combined voting power. 

        Notwithstanding
the above, no Change in Control shall be deemed to occur for purposes of this Agreement as a result of any transaction or series of transactions involving only State
National BHC, State National Bank, any affiliate (within the meaning of Section 3A of the Federal Reserve Act of 1913, as amended), or any of them, or any of their successors. 

        5.04. Voluntary Termination by Employee. Employee may terminate his employment hereunder at any time by giving Employer at
least thirty (30) days prior written notice. In the event Employee terminates his employment hereunder, Employee shall be entitled to receive (i) his salary and other benefits accrued at
the time of termination, plus (ii) if Employee has selected Option No. 2 provided for in Section 3.02 hereof and the Primary Term
of this Agreement has not expired, then Employee shall also be entitled to receive the payment for non-solicitation provided for in Section 4.01 hereof over the balance of the
Non-Solicitation Period and Employee will be subject to the non-solicitation covenants set forth in Section 4.01 hereof. 

        5.05. Termination of Employee Other than for Cause. Employer may terminate Employee's employment hereunder other than for
cause as defined in Section 5.01 hereof, by giving Employee at least thirty (30) days prior written notice. In the event of termination by Employee other than for cause, Employer shall
be obligated to pay to Employee the greater of (i) all Basic Compensation due to Employee for the balance of the Primary Term of this Agreement, or (ii) the non-solicitation
payment determined in accordance with Section 4.01 hereof. 

5

 

        6.    GENERAL PROVISIONS.    

        6.01. Notices. Any notices to be given hereunder by either party to the other may be effected either by personal delivery in
writing or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses appearing in the introductory paragraph of
this Agreement, but each party may change its/his address by written notice in accordance with this paragraph. Notices delivered personally shall be deemed communicated as of actual receipt; mailed
notices shall be deemed communicated as of five (5) days after mailing. 

        6.02. Inclusion of Entire Agreement Herein. This Agreement supersedes any and all other agreements, either oral or in
writing, between the parties hereto with respect to the employment of the Employee by Employer and contains all of the covenants and agreements between the parties with respect to such employment in
any manner whatsoever. 

        6.03. Law Governing Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of
Texas. 

        6.04. Arbitration. Employer and the Employee recognize that in the event a dispute should arise between them concerning the
interpretation or implementation of this Agreement, lengthy and expensive litigation will not afford a practical resolution of the issues within a reasonable time period. Consequently, each party
agrees that all disputes, disagreements, and questions of interpretation concerning this Agreement are to be submitted for resolution to the American Arbitration Association ("AAA") in Lubbock County,
Texas under the AAA's National Rules for the Resolution of Employment Disputes. Either Employer or the Employee may initiate an arbitration proceeding at any time by giving notice to the other in
accordance with the AAA's rules. The arbitrator shall not have the authority to add to, detract from, or modify any provision hereof nor to award punitive damages to any injured party. The arbitrator
shall have the authority to order recovery of all lost money and benefits provided for herein, as well as pay-back, severance compensation, vesting of options (or cash compensation in lieu
of vesting of options), legal fees and expenses, reimbursement of costs, including those incurred to enforce this Agreement and interest thereon. The question of whether Employer or the Employee shall
be liable for the costs incurred because of the arbitration shall also be decided by the arbitrator. The AAA shall designate a single arbitrator to conduct the proceeding, but Employer and the
Employee may, as a matter of right, require the substitution of a different arbitrator chosen by the AAA. This right of substitution may be exercised only once by the Employer and the Employee. The
arbitrator shall not be bound by the rules of evidence and procedure of the courts of Texas, but shall be bound by the substantive law applicable to this Agreement. The decision of the arbitrator,
absent fraud, duress, incompetence, or gross and obvious error of fact, shall be final and binding upon the Employer and the Employee and shall be construed to prevent Employer from asking a court of
competent jurisdiction to enter appropriate equitable relief to enjoin a violation of the covenants of Section 4. 

        6.05. Payment of Moneys Due Deceased Employee. If the Employee dies prior to the expiration of the term of employment under
this Agreement, any monies that may be due the Employee from the Employer under this Agreement as of the date of his death shall be paid to the Employee's executors, administrators, heirs, personal
representatives, successors and assigns. 

        6.06. Assignments. This agreement is not assignable by either the Employee or Employer without the written consent of the
other party. 

        6.07. Contingency. This Agreement and the rights and obligations of the parties are contingent upon and subject to the
acquisition of Mercantile Bank Texas by Employer pursuant to the terms of the Agreement and Plan of Reorganization referenced in Section 1.01 hereof. In the event such acquisition has not been
completed by December 31, 2004, this Agreement shall be null and void unless Employer and Employee agree in writing to extend such date. 

6

 

        EXECUTED on the day and year first above written. 

	
 EMPLOYER:	
 	

 
	

STATE NATIONAL BANCSHARES, INC.	
 	

EMPLOYEE:
	

 	
 	

 	
 	

 
	

By:	
 	

/s/ Tom Nichols
 Tom Nichols, Chairman	
 	

/s/ Douglas L. Terry
 Douglas L. Terry

7

QuickLinks

Exhibit 10.10

EMPLOYMENT AND NON SOLICITATION AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}]]