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                                                                    EXHIBIT 10.2

                         PARADIGM BANCORPORATION, INC.

                           1999 STOCK INCENTIVE PLAN

                                  I.  PURPOSE

     The purpose of the PARADIGM BANCORPORATION, INC. 1999 STOCK INCENTIVE PLAN
(the "Plan") is to provide a means through which PARADIGM BANCORPORATION, INC.,
a Texas corporation (the "Company") and its subsidiaries, may attract able
persons to enter the employ of the Company and to provide a means whereby those
employees upon whom the responsibilities of the successful administration and
management of the Company rest, and whose present and potential contributions to
the welfare of the Company are of importance, can acquire and maintain stock
ownership, thereby strengthening their concern for the welfare of the Company
and their desire to remain in its employ.  A further purpose of the Plan is to
provide employees, directors and other individuals with additional incentive and
reward opportunities designed to enhance the profitable growth of the Company.
Accordingly, the Plan provides for granting Incentive Stock Options,
Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards,
Performance Awards, Phantom Stock Awards, or any combination of the foregoing,
as is best suited to the circumstances of the particular Holder as provided
herein.

                                 II.  DEFINITIONS

     The following definitions shall be applicable throughout the Plan unless
specifically modified by any paragraph:

     (a) "Affiliates" means any "parent corporation" of the Company and any
"subsidiary" of the Company within the meaning of Code Sections 424(e) and (f),
respectively.

     (b) "Award" means, individually or collectively, any Option, Restricted
Stock Award, Phantom Stock Award, Performance Award or Stock Appreciation Right.

     (c) "Board" means the Board of Directors of the Company.

     (d) "Change of Control" means the occurrence of any of the following
events:  (i) the Company shall not be the surviving entity in any merger,
consolidation or other reorganization (or survives only as a subsidiary of an
entity other than a previously wholly-owned subsidiary of the Company), (ii) the
Company's subsidiary bank is merged or consolidated into, or otherwise acquired
by, an entity other than a wholly-owned subsidiary of the Company; (iii) the
Company sells, leases or exchanges all or substantially all of its assets to any
other person or entity (other than a
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wholly-owned subsidiary of the Company), (iv) the Company is to be dissolved and
liquidated, (v) any person or entity, including a "group" as contemplated by
Section 13(d)(3) of the 1934 Act, acquires or gains ownership or control
(including, without limitation, power to vote or control the voting) of more
than 50% of the outstanding shares of the Company's voting stock (based upon
voting power), or (vi) as a result of or in connection with a contested election
of directors, the persons who were directors of the Company before such election
shall cease to constitute a majority of the Board.

     (e) "Change of Control Value" shall mean (i) the per share price offered to
shareholders of the Company in any such merger, consolidation, reorganization,
sale of assets or dissolution transaction, (ii) the price per share offered to
shareholders of the Company in any tender offer or exchange offer whereby a
Change of Control takes place, or (iii) if such Change of Control occurs other
than pursuant to a tender or exchange offer, the Fair Market Value per share of
the shares into which Awards are exercisable, as determined by the Committee,
whichever is applicable.  In the event that the consideration offered to
shareholders of the Company consists of anything other than cash, the Committee
shall determine the fair cash equivalent of the portion of the consideration
offered which is other than cash.

     (f) "Code" means the Internal Revenue Code of 1986, as amended.  Reference
in the Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to any section and any regulations under such section.

     (g) "Committee" means the Board or a committee appointed by the Board to
administer the Plan.  The Board in its capacity as the administrator of the Plan
or any committee appointed by the Board to administer the Plan shall both be
referred to herein as the "Committee".

     (h) "Company" means Paradigm Bancorporation, Inc. and any of its
Affiliates.

     (i) "Director" means an individual elected to the Board by the shareholders
of the Company or by the Board under applicable corporate law who is serving on
the Board on the date the Plan is adopted by the Board or is elected to the
Board after such date.

     (j) An "employee" means any person (including an officer or a Director) in
an employment relationship with the Company or any parent or subsidiary
corporation (as defined in section 424 of the Code).

     (k) "1934 Act" means the Securities Exchange Act of 1934, as amended.

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     (l) "Fair Market Value" means, as of any specified date, the mean of the
high and low sales prices of the Stock (i) reported by the any interdealer
quotation system on which the Stock is quoted on that date or (ii) if the Stock
is listed on a national stock exchange, reported on the stock exchange composite
tape on that date; or, in either case, if no prices are reported on that date,
on the last preceding date on which such prices of the Stock are so reported.
If the Stock is traded over the counter at the time a determination of its fair
market value is required to be made hereunder, its fair market value shall be
deemed to be equal to the average between the reported high and low or closing
bid and asked prices of Stock on the most recent date on which Stock was
publicly traded.  In the event Stock is not publicly traded at the time a
determination of its value is required to be made hereunder, the determination
of its fair market value shall be made by the Committee in such manner as it
deems appropriate.

     (m) "Holder" means an employee, director or other individual who has been
granted an Award.

     (n) "Incentive Stock Option" means an incentive stock option within the
meaning of section 422(b) of the Code, commonly known as "qualified" stock
options.

     (o) "Nonqualified Stock Option" means an option granted under Paragraph VII
of the Plan to purchase Stock which does not constitute an Incentive Stock
Option.

     (p) "Option" means an Award granted under Paragraph VII of the Plan and
includes both Incentive Stock Options to purchase Stock and Nonqualified Stock
Options to purchase Stock.

     (q) "Option Agreement" means a written agreement between the Company and a
Holder with respect to an Option.

     (r) "Performance Award" means an Award granted under Paragraph X of the
Plan.

     (s) "Performance Award Agreement" means a written agreement between the
Company and a Holder with respect to a Performance Award.

     (t) "Phantom Stock Award" means an Award granted under Paragraph XI of the
Plan.

     (u) "Phantom Stock Award Agreement" means a written agreement between the
Company and a Holder with respect to a Phantom Stock Award.

     (v) "Plan" means the Paradigm Bancorporation, Inc. 1999 Stock Incentive
Plan, as amended from time to time.

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     (w)  "Restricted Stock Agreement" means a written agreement between the
Company and a Holder with respect to a Restricted Stock Award.

     (x)  "Restricted Stock Award" means an Award granted under Paragraph IX of
the Plan.

     (y)  "Spread" means, in the case of a Stock Appreciation Right, an amount
equal to the excess, if any, of the Fair Market Value of a share of Stock on the
date such right is exercised over the exercise price of such Stock Appreciation
Right.

     (z)  "Stock" means the common stock, $1.00 par value per share, of the
Company.

     (aa) "Stock Appreciation Right" means an Award granted under Paragraph VIII
of the Plan.

     (bb) "Stock Appreciation Rights Agreement" means a written agreement
between the Company and a Holder with respect to an Award of Stock Appreciation
Rights.

                 III.  EFFECTIVE DATE AND DURATION OF THE PLAN

     The Plan shall be effective upon the date of its adoption by the Board,
provided that the Plan is approved by the shareholders of the Company within
twelve months thereafter.  No further Awards may be granted under the Plan after
the expiration of ten years from the date of its adoption by the Board.  The
Plan shall remain in effect until all Awards granted under the Plan have been
satisfied or expired.

                              IV.  ADMINISTRATION

     (a) Committee.  The Plan shall be administered by the Committee.

     (b) Powers.  Subject to the provisions of the Plan, the Committee shall
have sole authority, in its discretion, to recommend to the Board of Directors
of the Company which employees, directors or other individuals shall receive an
Award, the time or times when such Award shall be made, whether an Incentive
Stock Option, Nonqualified Option or Stock Appreciation Right shall be granted,
the number of shares of Stock which may be issued under each Option, Stock
Appreciation Right or Restricted Stock Award, and the value of each Performance
Award and Phantom Stock Award.  In making such recommendations the Committee may
take into account the nature of the services rendered by the respective
employees, directors or other individuals, their present and potential
contributions to the Company's success and such other factors as the

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Committee in its discretion shall deem relevant. All final decisions regarding
the granting of Awards shall be made by the Board of Directors of the Company.

     (c) Additional Powers.  The Committee shall have such additional powers as
are delegated to it by the other provisions of the Plan.  Subject to the express
provisions of the Plan, the Committee is authorized to construe the Plan and the
respective agreements executed thereunder, to prescribe such rules and
regulations relating to the Plan as it may deem advisable to carry out the Plan,
and to determine the terms, restrictions and provisions of each Award, including
such terms, restrictions and provisions as shall be requisite in the judgment of
the Committee to cause designated Options to qualify as Incentive Stock Options,
and to make all other determinations necessary or advisable for administering
the Plan.  The Committee may correct any defect or supply any omission or
reconcile any inconsistency in any agreement relating to an Award in the manner
and to the extent it shall deem expedient to carry it into effect.  All final
determinations on the matters referred to in this Article IV shall be made by
the Board of Directors of the Company.

               V.  GRANT OF OPTIONS, STOCK APPRECIATION RIGHTS,
                  RESTRICTED STOCK AWARDS, PERFORMANCE AWARDS
             AND PHANTOM STOCK AWARDS; SHARES SUBJECT TO THE PLAN

     (a) Stock Grant and Award Limits.  The Committee may from time to time
grant Awards to one or more employees, directors or other individuals determined
by it to be eligible for participation in the Plan in accordance with the
provisions of Paragraph VI.  Subject to Paragraph XII, the aggregate number of
shares of Stock that may be issued under the Plan shall not exceed 200,000
shares.  Shares of Stock shall be deemed to have been issued under the Plan only
to the extent actually issued and delivered pursuant to an Award.  To the extent
that an Award lapses or the rights of its Holder terminate or the Award is paid
in cash, any shares of Stock subject to such Award shall again be available for
the grant of an Award. To the extent that an Award lapses or the rights of its
Holder terminate, any shares of Stock subject to such Award shall again be
available for the grant of an Award.  Separate stock certificates shall be
issued by the Company for those shares acquired pursuant the exercise of an
Incentive Stock Option and for those shares acquired pursuant to the exercise of
a Nonqualified Stock Option.

     (b) Stock Offered.  The stock to be offered pursuant to the grant of an
Award may be authorized but unissued Stock or Stock previously issued and
outstanding and reacquired by the Company.

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                               VI.  ELIGIBILITY

     Awards may be granted to employees of the Company, directors of the Company
or other individuals whose contributions to the welfare of the Company are of
importance.  An Award may be granted on more than one occasion to the same
person, and, subject to the limitations set forth in the Plan, such Award may
include an Incentive Stock Option or a Nonqualified Stock Option, a Stock
Appreciation Right, a Restricted Stock Award, a Performance Award, a Phantom
Stock Award or any combination thereof.

                              VII.  STOCK OPTIONS

     (a) Option Period.  The term of each Option shall be as specified by the
Committee at the date of grant, provided that an Incentive Stock Option by its
terms shall not be exercisable after the expiration of ten years from the date
of grant.

     (b) Limitations on Exercise of Option.  An Option shall be exercisable in
whole or in such installments and at such times as determined by the Committee.

     (c) Special Limitations on Incentive Stock Options.  To the extent that the
aggregate Fair Market Value (determined at the time the respective Incentive
Stock Option is granted) of Stock with respect to which Incentive Stock Options
are exercisable for the first time by an individual during any calendar year
under all incentive stock option plans of the Company and its parent and
subsidiary corporations exceeds $100,000, such Incentive Stock Options shall be
treated as Nonqualified Stock Options as determined by the Committee.  The
Committee shall determine, in accordance with applicable provisions of the Code,
Treasury Regulations and other administrative pronouncements, which of an
optionee's Incentive Stock Options will not constitute Incentive Stock Options
because of such limitation and shall notify the optionee of such determination
as soon as practicable after such determination.  No Incentive Stock Option
shall be granted to an individual if, at the time the Option is granted, such
individual owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of its parent or subsidiary
corporation, within the meaning of section 422(b)(6) of the Code, unless (i) at
the time such Option is granted the option price is at least 110% of the Fair
Market Value of the Stock subject to the Option and (ii) such Option by its
terms is not exercisable after the expiration of five years from the date of
grant.

     (d) Option Agreement.  Each Option shall be evidenced by an Option
Agreement in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve,
including, without limitation, provisions to qualify an Incentive Stock Option
under section 422 of the Code.  An Option Agreement may provide for the

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payment of the option price, in whole or in part, by the delivery of a number of
shares of Stock (plus cash if necessary) having a Fair Market Value equal to
such option price. Each Option Agreement shall provide that the Option may not
be exercised earlier than six months from the date of grant and shall specify
the effect of termination of employment on the exercisability of the Option.
Moreover, an Option Agreement may provide for a "cashless exercise" of the
Option by establishing procedures whereby the Holder, by a properly-executed
written notice, directs (i) an immediate market sale or margin loan respecting
all or a part of the shares of Stock to which he is entitled upon exercise
pursuant to an extension of credit by the Company to the Holder of the option
price, (ii) the delivery of the shares of Stock from the Company directly to a
brokerage firm and (iii) the delivery of the option price from the sale or
margin loan proceeds from the brokerage firm directly to the Company. Such
Option Agreement may also include, without limitation, provisions relating to
(i) vesting of Options, subject to the provisions hereof accelerating such
vesting on a Change of Control, (ii) tax matters (including provisions (y)
permitting the delivery of additional shares of Stock or the withholding of
shares of Stock from those acquired upon exercise to satisfy federal or state
income tax withholding requirements and (z) dealing with any other applicable
employee wage withholding requirements), and (iii) any other matters not
inconsistent with the terms and provisions of this Plan that the Committee shall
in its sole discretion determine. The terms and conditions of the respective
Option Agreements need not be identical.

     (e) Option Price and Payment.  The price at which a share of Stock may be
purchased upon exercise of an Option shall be determined by the Committee, but
(i) such purchase price shall not be less than the Fair Market Value of Stock
subject to an Incentive Stock Option on the date the Incentive Stock Option is
granted and (ii) such purchase price shall be subject to adjustment as provided
in Paragraph XII.  The Option or portion thereof may be exercised by delivery of
an irrevocable notice of exercise to the Company.  The purchase price of the
Option or portion thereof shall be paid in full in the manner prescribed by the
Committee.

     (f) Shareholder Rights and Privileges.  The Holder shall be entitled to all
the privileges and rights of a shareholder only with respect to such shares of
Stock as have been purchased under the Option and for which certificates of
stock have been registered in the Holder's name.

     (g) Options and Rights in Substitution for Stock Options Granted by Other
Corporations.  Options and Stock Appreciation Rights may be granted under the
Plan from time to time in substitution for stock options held by individuals
employed by corporations who become employees as a result of a merger or
consolidation of the employing corporation with the Company or any subsidiary,
or the acquisition by the Company or a subsidiary of the assets of the employing
corporation, or the acquisition by the Company or a subsidiary of stock of the
employing corporation with the result that such employing corporation becomes a
subsidiary.

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                       VIII.  STOCK APPRECIATION RIGHTS

     (a) Stock Appreciation Rights.  A Stock Appreciation Right is the right to
receive an amount equal to the Spread with respect to a share of Stock upon the
exercise of such Stock Appreciation Right.  Stock Appreciation Rights may be
granted in connection with the grant of an Option, in which case the Option
Agreement will provide that exercise of Stock Appreciation Rights will result in
the surrender of the right to purchase the shares under the Option as to which
the Stock Appreciation Rights were exercised.  Alternatively, Stock Appreciation
Rights may be granted independently of Options in which case each Award of Stock
Appreciation Rights shall be evidenced by a Stock Appreciation Rights Agreement
which shall contain such terms and conditions as may be approved by the
Committee.  The Spread with respect to a Stock Appreciation Right may be payable
either in cash, shares of Stock with a Fair Market Value equal to the Spread or
in a combination of cash and shares of Stock.  With respect to Stock
Appreciation Rights that are subject to Section 16 of the 1934 Act, however, the
Committee shall, except as provided in Paragraph XII(c), retain sole discretion
(i) to determine the form in which payment of the Stock Appreciation Right will
be made (i.e., cash, securities or any combination thereof) or (ii) to approve
an election by a Holder to receive cash in full or partial settlement of Stock
Appreciation Rights.  Each Stock Appreciation Rights Agreement shall provide
that the Stock Appreciation Rights may not be exercised earlier than six months
from the date of grant and shall specify the effect of termination of employment
on the exercisability of the Stock Appreciation Rights.

     (b) Other Terms and Conditions.  At the time of such Award, the Committee,
may in its sole discretion, prescribe additional terms, conditions or
restrictions relating to Stock Appreciation Rights, including, but not limited
to rules pertaining to termination of employment (by retirement, disability,
death or otherwise) of a Holder prior to the expiration of such Stock
Appreciation Rights.  Such additional terms, conditions or restrictions shall be
set forth in the Stock Appreciation Rights Agreement made in conjunction with
the Award.  Such Stock Appreciation Rights Agreements may also include, without
limitation, provisions relating to (i) vesting of Awards, subject to the
provisions hereof accelerating vesting on a Change of Control,(ii) tax matters
(including provisions covering applicable wage withholding requirements), and
(iii) any other matters not inconsistent with the terms and provisions of this
Plan, that the Committee shall in its sole discretion determine.  The terms and
conditions of the respective Stock Appreciation Rights Agreements need not be
identical.

     (c) Exercise Price.  The exercise price of each Stock Appreciation Right
shall be determined by the Committee, but such exercise price (i) shall not be
less than the Fair Market Value of a share of Stock on the date the Stock
Appreciation Right is granted (or such greater exercise price as may be required
if such Stock Appreciation Right is granted in connection with an Incentive
Stock Option that must have an exercise price equal to 110% of the Fair Market
Value of the Stock on the

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date of grant pursuant to Paragraph VII(c)), and (ii) shall be subject to
adjustment as provided in Paragraph XII.

     (d) Exercise Period.  The term of each Stock Appreciation Right shall be as
specified by the Committee at the date of grant.

     (e) Limitations on Exercise of Stock Appreciation Right.  A Stock
Appreciation Right shall be exercisable in whole or in such installments and at
such times as determined by the Committee.

                         IX.  RESTRICTED STOCK AWARDS

     (a) Forfeiture Restrictions to be Established by the Committee.  Shares of
Stock that are the subject of a Restricted Stock Award shall be subject to
restrictions on disposition by the Holder and an obligation of the Holder to
forfeit and surrender the shares to the Company under certain circumstances (the
"Forfeiture Restrictions").  The Forfeiture Restrictions shall be determined by
the Committee in its sole discretion, and the Committee may provide that the
Forfeiture Restrictions shall lapse upon (i) the attainment of targets
established by the Committee that are based on (1) the price of a share of
Stock, (2) the Company's earnings per share, (3) the Company's revenue, (4) the
revenue of a business unit of the Company designated by the Committee, (5) the
return on shareholders' equity achieved by the Company, or (6) the Company's
pre-tax cash flow from operations, (ii) the Holder's continued employment with
the Company for a specified period of time, or (iii) a combination of any two or
more of the factors listed in clauses (i) and (ii) of this sentence.  Each
Restricted Stock Award may have different Forfeiture Restrictions, in the
discretion of the Committee.  The Forfeiture Restrictions applicable to a
particular Restricted Stock Award shall not be changed except as permitted by
Paragraph IX(b) or Paragraph XII.

     (b) Other Terms and Conditions.  Stock awarded pursuant to a Restricted
Stock Award shall be represented by a stock certificate registered in the name
of the Holder of such Restricted Stock Award.  The Holder shall have the right
to receive dividends with respect to Stock subject to a Restricted Stock Award,
to vote Stock subject thereto and to enjoy all other shareholder rights, except
that (i) the Holder shall not be entitled to delivery of the stock certificate
until the Forfeiture Restrictions shall have expired, (ii) the Company shall
retain custody of the Stock until the Forfeiture Restrictions shall have
expired, (iii) the Holder may not sell, transfer, pledge, exchange, hypothecate
or otherwise dispose of the Stock until the Forfeiture Restrictions shall have
expired, and (iv) a breach of the terms and conditions established by the
Committee pursuant to the Restricted Stock Agreement, shall cause a forfeiture
of the Restricted Stock Award.  At the time of such Award, the Committee may, in
its sole discretion, prescribe additional terms, conditions or restrictions
relating to Restricted Stock Awards, including, but not limited to, rules
pertaining to the termination of

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employment (by retirement, disability, death or otherwise) of a Holder prior to
expiration of the Forfeiture Restrictions. Such additional terms, conditions or
restrictions shall be set forth in a Restricted Stock Agreement made in
conjunction with the Award. Such Restricted Stock Agreement may also include,
without limitation, provisions relating to (i) subject to the provisions hereof
accelerating vesting on a Change of Control, vesting of Awards, (ii) tax matters
(including provisions (y) covering any applicable employee wage withholding
requirements and (z) prohibiting an election by the Holder under Section 83(b)
of the Code), and (iii) any other matters not inconsistent with the terms and
provisions of this Plan that the Committee shall in its sole discretion
determine. The terms and conditions of the respective Restricted Stock
Agreements need not be identical.

     (c) Payment for Restricted Stock.  The Committee shall determine the amount
and form of any payment for Stock received pursuant to a Restricted Stock Award,
provided that in the absence of such a determination, a Holder shall not be
required to make any payment for Stock received pursuant to a Restricted Stock
Award, except to the extent otherwise required by law.

     (d) Agreements.  At the time any Award is made under this Paragraph IX, the
Company and the Holder shall enter into a Restricted Stock Agreement setting
forth each of the matters as the Committee may determine to be appropriate.  The
terms and provisions of the respective Restricted Stock Agreements need not be
identical.

                            X.  PERFORMANCE AWARDS

     (a) Performance Period.  The Committee shall establish, with respect to and
at the time of each Performance Award, a performance period over which the
performance of the Holder shall be measured.

     (b) Performance Awards.  Each Performance Award shall have a maximum value
established by the Committee at the time of such Award.

     (c) Performance Measures.  A Performance Award shall be awarded to an
employee, director or other individual contingent upon future performance of the
employee, director or other individual, the Company or any subsidiary, division
or department thereof by or in which is he employed during the performance
period.  The Committee shall establish the performance measures applicable to
such performance prior to the beginning of the performance period but subject to
such later revisions as the Committee shall deem appropriate to reflect
significant, unforeseen events or changes.

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     (d) Awards Criteria.  In determining the value of Performance Awards, the
Committee shall take into account a Holder's responsibility level,
contributions, performance, potential, other Awards and such other
considerations as it deems appropriate.

     (e) Payment.  Following the end of the performance period, the Holder of a
Performance Award shall be entitled to receive payment of an amount, not
exceeding the maximum value of the Performance Award, based on the achievement
of the performance measures for such performance period, as determined by the
Committee.  Payment of a Performance Award may be made in cash, Stock or a
combination thereof, as determined by the Committee.  Payment shall be made in a
lump sum or in installments as prescribed by the Committee.  Any payment to be
made in Stock shall be based on the Fair Market Value of the Stock on the
payment date.  If a payment of cash is to be made on a deferred basis, the
Committee shall establish whether interest shall be credited, the rate thereof
and any other terms and conditions applicable thereto.

     (f) Termination of Employment.  A Performance Award shall terminate if the
Holder does not remain continuously in the employ of the Company at all times
during the applicable performance period, except as may be determined by the
Committee or as may otherwise be provided in the Award at the time granted.

     (g) Agreements.  At the time any Award is made under this Paragraph X, the
Company and the Holder shall enter into a Performance Award Agreement setting
forth each of the matters contemplated hereby, and, in addition such matters as
are set forth in Paragraph IX(b) as the Committee may determine to be
appropriate.  The terms and provisions of the respective agreements need not be
identical.

                           XI.  PHANTOM STOCK AWARDS

     (a) Phantom Stock Awards.  Phantom Stock Awards are rights to receive
shares of Stock (or cash in an amount equal to the Fair Market Value thereof),
or rights to receive an amount equal to any appreciation in the Fair Market
Value of Stock (or portion thereof) over a specified period of time, which vest
over a period of time or upon  the occurrence of an event (including without
limitation a Change of Control) as established by the Committee, without payment
of any amounts by the Holder thereof (except to the extent otherwise required by
law) or satisfaction of any performance criteria or objectives.  Each Phantom
Stock Award shall have a maximum value established by the Committee at the time
of such Award.

     (b) Award Period.  The Committee shall establish, with respect to and at
the time of each Phantom Stock Award, a period over which or the event upon
which the Award shall vest with respect to the Holder.

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     (c) Awards Criteria.  In determining the value of Phantom Stock Awards, the
Committee shall take into account a Holder's responsibility level,
contributions, performance, potential, other Awards and such other
considerations as it deems appropriate.

     (d) Payment.  Following the end of the vesting period for a Phantom Stock
Award, the Holder of a Phantom Stock Award shall be entitled to receive payment
of an amount, not exceeding the maximum value of the Phantom Stock Award, based
on the then vested value of the Award.  Payment of a Phantom Stock Award may be
made in cash, Stock or a combination thereof as determine by the Committee.
Payment shall be made in a lump sum or in installments as prescribed by the
Committee in its sole discretion.  Any payment to be made in Stock shall be
based on the Fair Market Value of the Stock on the payment date.  Cash dividend
equivalents may be paid during or after the vesting period with respect to a
Phantom Stock Award, as determined by the Committee.  If a payment of cash is to
be made on a deferred basis, the Committee shall establish whether interest
shall be credited, the rate thereof and any other terms and conditions
applicable thereto.

     (e) Termination of Employment.  A Phantom Stock Award shall terminate if
the Holder does not remain continuously in the employ of the Company at all
times during the applicable vesting period, except as may be otherwise
determined by the Committee or as set forth in the Award at the time of grant.

     (f) Agreements.  At the time any Award is made under this Paragraph XI, the
Company and the Holder shall enter into a Phantom Stock Award Agreement setting
forth each of the matters contemplated hereby and, in addition such matters as
are set forth in Paragraph IX(b) as the Committee may determine to be
appropriate.  The terms and provisions of the respective agreements need not be
identical.

                   XII.  RECAPITALIZATION OR REORGANIZATION

     (a) The shares with respect to which Awards may be granted are shares of
Stock as presently constituted, but if, and whenever, prior to the expiration of
an Award theretofore granted, the Company shall effect a subdivision or
consolidation by the Company, the number of shares of Stock with respect to
which such Award may thereafter be exercised or satisfied, as applicable, (i) in
the event of an increase in the number of outstanding shares shall be
proportionately increased, and the purchase price per share shall be
proportionately reduced, and (ii) in the event of a reduction in the number of
outstanding shares shall be proportionately reduced, and the purchase price per
share shall be proportionately increased.

     (b) If the Company recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise or satisfaction, as applicable, of an
Award theretofore granted the Holder shall be

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entitled to (or entitled to purchase, if applicable) under such Award, in lieu
of the number of shares of Stock then covered by such Award, the number and
class of shares of stock and securities to which the Holder would have been
entitled pursuant to the terms of the recapitalization if, immediately prior to
such recapitalization, the Holder had been the holder of record of the number of
shares of Stock then covered by such Award.

     (c) In the event of a Change of Control, all outstanding Awards shall
immediately vest and become exercisable or satisfiable, as applicable.  The
Committee, in its discretion, may determine that upon the occurrence of a Change
of Control, each Award other than an Option outstanding hereunder shall
terminate within a specified number of days after notice to the Holder, and such
Holder shall receive, with respect to each share of Stock subject to such Award,
cash in an amount equal to the excess, if any, of the Change of Control Value.
Further, in the event of a Change of Control, the Committee, in its discretion
shall act to effect one or more of the following alternatives with respect to
outstanding Options, which may vary among individual Holders and which may vary
among Options held by any individual Holder:  (i) determine a limited period of
time  on or before a specified date (before or after such Change of Control)
after which specified date all unexercised Options and all rights of Holders
thereunder shall terminate; (ii) require the mandatory surrender to the Company
by selected Holders of some or all of the outstanding Options held by such
Holders (irrespective of whether such Options are then exercisable under the
provisions of the Plan) as of a date, before or after such Change of Control,
specified by the Committee, in which event the Committee shall thereupon cancel
such Options and the Company shall pay to each Holder an amount of cash per
share equal to the excess, if any, of the Change of Control Value of the shares
subject to such Option over the exercise price(s) under such Options for such
shares; (iii) make such adjustments to Options then outstanding as the Committee
deems appropriate to reflect such Change of Control (provided, however, that the
Committee may determine in its sole discretion that no adjustment is necessary
to Options then outstanding); or (iv) provide that thereafter upon any exercise
of an Option theretofore granted the Holder shall be entitled to purchase under
such Option, in lieu of the number of shares of Stock then covered by such
Option the number and class of shares of stock or other securities or property
(including, without limitation, cash) to which the Holder would have been
entitled pursuant to the terms of the agreement of merger, consolidation or sale
of assets and dissolution if, immediately prior to such merger, consolidation or
sale of assets and dissolution the Holder has been the holder of record of the
number of shares of Stock then covered by such Option.  The provisions contained
in this paragraph shall be inapplicable to an Award granted within six (6)
months before the occurrence of a Change of Control if the Holder of such Award
is subject to the reporting requirements of Section 16(a) of the 1934 Act.  The
provisions contained in this paragraph shall not terminate any rights of the
Holder to further payments pursuant to any other agreement with the Company
following a Change of Control.

                                      -13-
<PAGE>

     (d) In the event of changes in the outstanding Stock by reason of
recapitalization, reorganizations, mergers, consolidations, combinations,
exchanges or other relevant changes in capitalization occurring after the date
of the grant of any Award and not otherwise provided for by this Paragraph XII,
any outstanding Awards and any agreements evidencing such Awards shall be
subject to adjustment by the Committee at its discretion as to the number and
price of shares of Stock or other consideration subject to such Awards.  In the
event of any such change in the outstanding Stock, the aggregate number of
shares available under the Plan may be appropriately adjusted by the Committee,
whose determination shall be conclusive.

     (e) The existence of the Plan and the Awards granted hereunder shall not
affect in any way the right or power of the Board or the shareholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities ahead of or
affecting Stock or the rights thereof, the dissolution or liquidation of the
Company or any sale, lease, exchange or other disposition of all or any part of
its assets or business or any other corporate act or proceeding.

     (f) Any adjustment provided for in Subparagraphs (a), (b), (c) or (d) above
shall be subject to any required shareholder action.

     (g) Except as hereinbefore expressly provided, the issuance by the Company
of shares of stock of any class or securities convertible into shares of stock
of any class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares of obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
shares of Stock subject to Awards theretofore granted or the purchase price per
share, if applicable.

                 XIII.  AMENDMENT AND TERMINATION OF THE PLAN

     The Board in its discretion may terminate the Plan at any time with respect
to any shares for which Awards have not theretofore been granted.  The Board
shall have the right to alter or amend the Plan or any part thereof from time to
time; provided that no change in any Award theretofore granted may be made which
would impair the rights of the Holder without the consent of the Holder (unless
such change is required in order to cause the benefits under the Plan to qualify
as performance-based compensation within the meaning of section 162(m) of the
Code and applicable interpretive authority thereunder), and provided, further,
that the Board may not, without approval of the shareholders, amend the Plan:

                                      -14-
<PAGE>

     (a) to increase the maximum number of shares which may be issued on
exercise or surrender of an Award, except as provided in Paragraph XII;

     (b)  to change the Option price;

     (c) to change the employees, directors or other individuals eligible to
receive Awards or materially increase the benefits accruing to employees under
the Plan;

     (d) to extend the maximum period during which Awards may be granted under
the Plan;

     (e) to modify materially the requirements as to eligibility for
participation in the Plan; or

     (f) to withdraw the administration of the Plan from the Committee.

                              XIV.  MISCELLANEOUS

     (a) No Right to An Award.  Neither the adoption of the Plan by the Company
nor any action of the Board or the Committee shall be deemed to give an
employee, director or any other individual any right to be granted an Award to
purchase Stock, a right to a Stock Appreciation Right, a Restricted Stock Award,
a Performance Award or a Phantom Stock Award or any of the rights hereunder
except as may be evidenced by an Award or by an Option Agreement, Stock
Appreciation Rights Agreement, Restricted Stock Agreement, Performance Award
Agreement or Phantom Stock Award Agreement on behalf of the Company, and then
only to the extent and on the terms and conditions expressly set forth therein.
The Plan shall be unfunded.  The Company shall not be required to establish any
special or separate fund or to make any other segregation of funds or assets to
assure the payment of any Award.

     (b) No Employment Rights Conferred.  Nothing contained in the Plan shall
(i) confer upon any employee, director or any other individual any right with
respect to continuation of employment with the Company or any subsidiary or (ii)
interfere in any way with the right of the Company or any subsidiary to
terminate his or her employment at any time.

     (c) Compliance With Other Laws; Withholding.  The Plan, the grant and
exercise of Awards thereunder, and the obligation of the Company to sell and
deliver shares under such Awards, shall be subject to all applicable federal and
state laws, rules and regulations and to such approvals by any governmental or
regulatory agency as may be required.  The Company shall not be obligated to
issue any Stock pursuant to any Award granted under the Plan at any time when
the shares covered by such Award have not been registered under any state and
federal laws, rules or

                                      -15-
<PAGE>

regulations as the Company or the Committee deems applicable and, in the opinion
of legal counsel for the Company, there is no exemption from the registration
requirements of such laws, rules or regulations available for the issuance and
sale of such shares. No fractional shares of Stock shall be delivered, nor shall
any cash in lieu of fractional shares be paid. The Company shall have the right
to deduct in connection with all Awards any taxes required by law to be withheld
and to require any payments required to enable it to satisfy its withholding
obligations.

     (d) No Restriction on Corporate Action.  Nothing contained in the Plan
shall be construed to prevent the Company or any subsidiary from taking any
corporate action which is deemed by the Company or such subsidiary to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any Award made under the Plan.  No employee,
director, beneficiary or other person shall have any claim against the Company
or any subsidiary as a result of any such action.

     (e) Restrictions on Transfer.  An Award shall not be transferable otherwise
than by will or the laws of descent and distribution or pursuant to a "qualified
domestic relations order" as defined by the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder, and
shall be exercisable during the Holder's lifetime only by such Holder or the
Holder's guardian or legal representative.

     (f) Section 162(m).  If the Plan is subject to 162(m) of the Code, it is
intended that the Plan comply fully with and meet all the requirements of
Section 162(m) of the Code so that Options and Stock Appreciation Rights granted
hereunder and, if determined by the Committee, Restricted Stock Awards, shall
constitute "performance-based" compensation within the meaning of such section.
If any provision of the Plan would disqualify the Plan or would not otherwise
permit the Plan to comply with Section 162(m) as so intended, such provision
shall be construed or deemed amended to conform to the requirements or
provisions of Section 162(m); provided that no such construction or amendment
shall have an adverse effect on the economic value to a Holder of any Award
previously granted hereunder.

     (g) Governing Law.  This Plan shall be construed in accordance with the
laws of the State of Texas.

                                      -16-<PAGE>

                                                                    EXHIBIT 10.4

                              EMPLOYMENT CONTRACT

     This Employment Contract (this "Agreement") is made as of the 1st day of
June, 2000 between PARADIGM BANCORPORATION, INC., a Texas corporation and the
parent bank holding company of Woodcreek Bank and Dayton State Bank (the
"Banks"),  having a principal place of business at 2828 FM 1960, Houston, Texas
77273, hereinafter referred to as the "Employer", and William Bradley Fagan, who
resides at 1140 Hidden Ridge #2233, Irving, Texas 75038, hereinafter referred to
as the "Employee". The Banks are also executing this Agreement to confirm their
obligations under Article IV Section 2 hereof.

     WHEREAS, the Employee has considerable experience, expertise and training
in financial management of publicly traded companies; and

     WHEREAS, the Employer desires and intends to employ the Employee as
Executive Vice President and Chief Financial Officer of the Employer pursuant to
the terms and conditions set forth in this Employment Agreement, and the
Employee desires to accept such employment pursuant to the terms and conditions
set forth in this Agreement; and

     WHEREAS, the Employer and the Employee have read and understood the terms
and provisions set forth in this Agreement.

     NOW THEREFORE, in consideration of the mutual promises and covenants set
forth in this Agreement, the Employer and Employee agree as follows:

                                   ARTICLE I
                              TERM OF EMPLOYMENT

     The Employer hereby employs the Employee and the Employee hereby accepts
employment with the Employer for a period of two (2) years beginning on the date
set forth in the first paragraph of this Agreement ("Effective Date"); however,
this Agreement may be terminated earlier as hereinafter provided.  Employer and
Employee acknowledge and agree that, subsequent to the expiration of this
Agreement, the parties may agree to continue the employment relationship under
such terms as they may mutually agree upon.  However, the parties acknowledge
and agree that, in the event they fail to agree upon terms for the continuation
of the Employee's employment subsequent to the expiration date, the employment
may terminate at the discretion of anyone of the parties without any additional
liability or obligation on the part of the parties except as otherwise specified
herein.
<PAGE>

                                  ARTICLE II
                              DUTIES OF EMPLOYEE

     1.  Employment and Primary Duties.  On the terms and subject to the
conditions of this Agreement, the Employer hereby employs Employee and engages
the Employee to serve as Executive Vice President and Chief Financial Officer of
the Employer ("Office"), and Employee hereby accepts employment with the
Employer according to the terms set forth in this Agreement.  Employee shall
primarily be responsible for the management of the financial matters of the
Employer and its subsidiary Banks and shall perform such other work as may be
assigned to him subject to the instructions, directions, and control of the
President of the Employer or Board of Directors of the Employer which shall be
consistent with the type and nature of work normally associated with the Office
of a financial holding company having assets similar in nature and value to the
assets of the Employer.

     2.  Location.  Employee shall work at  2828 FM 1960, Houston, Texas 77273
or at such other place or places as may be directed by the President or Board of
Directors of the Employer and shall be furnished with an office and other
business facilities and services sufficient to carry out his duties of office.

                                  ARTICLE III
                         ENGAGING IN OTHER EMPLOYMENT

     During the term of this Agreement, the Employee shall devote substantially
all of his productive time, ability, and attention to the business of the
Employer and its subsidiaries during Employer's normal business hours, and
Employee shall not directly or indirectly render any services of a business,
commercial, or professional nature to any other person or organization, whether
for compensation or otherwise, without the prior written consent of the
Employer.

                                  ARTICLE IV
                                 COMPENSATION

     1.  Basic Compensation.  As compensation for employment services rendered
under this Agreement, the Employee shall be entitled to receive from the
Employer an annual base salary of Ninety three thousand two hundred dollars
($93,200.00) for the first year of this Agreement.  Beginning on June 1, 2001,
the Employee will receive an increase in his base salary equal to the increase
in the consumer price index for the prior year.

                                       2
<PAGE>

     2.  Payment of Basic Compensation. The parties recognize that  in addition
to Employee's employment, Employee will become a vice president of each bank.
Payments of the base salary shall be made in accordance with the Company's (or
the Bank's as appropriate) payroll policies and procedures, subject to payroll
and withholding deductions as may be required by law and other deductions
applied generally to employees of the Company (or the Banks as appropriate) for
insurance or other employee benefit plans.

                                   ARTICLE V
          REIMBURSEMENT OF EMPLOYEE BUSINESS EXPENSES, PARTICIPATION
              IN EMPLOYER BENEFIT PLANS, BONUS AND OTHER BENEFITS

     1.  Out of Pocket Expenses.  The Employee is authorized to incur reasonable
business expenses for promoting the business of the Employer and its
subsidiaries, including expenditures for entertainment, travel, lodging and
meals, including, without limitation, trade association convention attendance,
country club dues, mobile telephone expense, and other similar business
expenses.  The Employer will reimburse the Employee from time to time for all
such business expenses provided that the Employee presents the Employer with
appropriate documentation of such expenditures in accordance with the Employer's
established procedures relating to such reimbursements.

     2.  Participation in Employer Benefit Plans.  Until the termination of
Employee's employment, Employee will be eligible to participate in all employee
benefit plans generally available to the officers and employees of Employer in
accordance with the terms of such plans.  After the termination of Employee,
Employer will use reasonable efforts to have Employee continue to be covered
under the Employer's health insurance plans at Employee's own expense. The
Employee acknowledges and agrees that any employee benefits provided to the
Employee incident to the Employee's employment are governed by the applicable
plan documents, summary plan descriptions or employment policies, and may be
modified, suspended, or revoked at any time in accordance with the terms and
provisions of the applicable documents.

     3.  Service on Boards of Directors.  While serving as a director of the
Employer, Employee shall receive the standard fee for attendance of meetings of
the Board of Directors of the Employer.  During the term of this Agreement,
Employer agrees to use its best efforts to have Employee elected as a member of
the Board of Directors of each bank subsidiary of the Employer.  Employee shall
be entitled to receive the standard fee for attendance at meetings of the Boards
of Directors of each bank subsidiary of the Employer.

                                       3
<PAGE>

     4.  Bonus Schedule.  Within thirty days after December 31, 2000 and
December 31, 2001 (or within 30 days after the end of the quarter in the event
of a termination of employment), the Employer shall pay the Employee an
additional bonus as a percentage of his base annual salary, ( $93,200 plus any
subsequent pay increases).  The bonus shall be based on the pre-tax return on
average assets of the Employer for the prior twelve months ("ROAA") according to
the schedule set forth on Exhibit A hereto.  ROAA shall be determined prior to
the payment of federal income taxes and shall be calculated by the certified
public accountants of the Employer.

     5.  Automobile Allowance & CPE.  During the term of this Agreement, the
Employer shall pay Employee an automobile allowance of $500.00 per month and the
costs incurred by the Employee in maintaining his CPA designation including the
cost of courses, travel, lodging, and meals incurred in the pursuit of the
necessary hours of continuing professional education.

     6.  Grant Under Stock Option Plan.  As of the Effective Date, the Employer
hereby grants to the Employee 10,000  Units under the 1998 Stock Appreciation
Rights Plan.

     7.  Vacation.  Employer shall give Employee three (3)  weeks of vacation
per year, which vacation shall fully accrue as of the commencement of this
Agreement and  all unused vacation will carry forward each year.

     8.  Possible Adjustment.  The Employer and the Employee acknowledge that,
during the term of employment of the Employee pursuant to this Agreement, the
Employee's compensation will be subject to an annual review and adjustment by
the Board of Directors of the Employer but, in no event, will the Employee's
salary, vacation, additional bonus compensation and other benefits be less than
the amounts set forth in Article IV and Sections 1,4,5,6 and 7 of Article V at
any time during this Agreement.

                                       4
<PAGE>

                                  ARTICLE VI
             EMPLOYEE'S OBLIGATIONS OTHER THAN TO PERFORM SERVICES

     1.  Non-Competition by Employee. During the term of this Agreement, the
Employee shall not, directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, director,
or in any other individual or representative capacity, engage or participate in
any business that is in competition in any manner whatever with the business of
Employer or its subsidiaries.

     2.  Duty of Loyalty.  The Employee acknowledges and agrees that, during the
term of this Agreement, he has a fiduciary duty of loyalty to the Employer, and
that he will not engage in any activity during the term of this Agreement, which
will or could, in any significant way, harm the business, business interests, or
reputation of the Employer or its subsidiaries.

     3.  Enforcement and Legal Remedies.  The parties recognize the difficulty
of properly measuring the damages which reasonably would accrue by reason of a
breach of this covenant of non-competition and thereof agree that the party
suffering by reason of any breach of this Agreement shall be entitled to the
equitable remedy of injunctive relief.

                                       5
<PAGE>

                                  ARTICLE VII
                                PROPERTY RIGHTS

     1. Trade Secrets and Confidentiality. The Employee acknowledges and agrees
that certain information concerning the Employer's (and its subsidiaries)
services, techniques, pricing, business projections, business plans and
strategies, financial data, records, marketing plans and studies, techniques,
assets, customer contacts, customer needs and prospective customers (i) are
owned by employer, (ii) are highly sensitive and confidential, and (iii) have
been obtained only through significant effort and expense to the Employer, and
that, as a result, the Employee agrees to treat this information as highly
confidential trade secret information at all times during and after the term of
this Agreement. The Employee acknowledges and agrees that during the term of
employment, the Employee will have access to and become familiar with such trade
secrets. The Employee shall not disclose any such trade secrets, directly or
indirectly, nor use them in any way, either during the term of this Agreement or
at any time thereafter, except as required in the course of his employment with
the Employer or its subsidiaries. Notwithstanding anything in this Agreement to
the contrary or seemingly inconsistent herewith, the parties agree that all
information referred to in this Section shall not be deemed trade secrets or
confidential information of the Employer or its subsidiaries if such information
is already available to competitors of the Employer. All files, records,
documents, drawings, specification, equipment, and similar items relating to the
business of the Employer, whether or not prepared by the Employee, shall remain
the exclusive property of the Employer and shall not be removed from the
premises of the Employer under any circumstances without the prior written
consent of the Employer; provided, however, that Employee may remove such items
for the purpose of furthering the business of Employer. All items removed from
the premises of Employer and all copies or summaries thereof shall be returned
to Employer upon the termination of Employee.

     2.  Processes and Improvements.  The Employee agrees that he will promptly
from time to time fully inform and disclose to the Employer all inventions,
processes, designs, improvements and discoveries which he has developed or may
hereafter develop during the term of this Agreement which pertain or relate to
the business of the Employer or to any experimental work carried on by the
Employer, whether conceived by the Employee alone or with others and whether or
not conceived during regular working hours.  All such inventions, processes,
designs, improvements, and discoveries shall be the exclusive property of the
Employer.  The Employee shall assist the Employer in obtaining patents on all
such inventions, designs, improvements, and discoveries deemed patentable by the
Employer and shall execute all documents and do all things necessary to obtain
letters patent, vest the Employer with full and exclusive title thereto, and
protect the same against infringement by others.  However; the Employer
acknowledges and agrees that the Employee brings to this employment relationship
over seventeen years of experience in finance and accounting, as well as his
reputation in the professional CPA community.

                                       6
<PAGE>

                                 ARTICLE VIII
                                  TERMINATION

     1.  Termination of Agreement.  Except as may otherwise be provided herein,
this Agreement may terminate prior to May 31, 2002 upon the occurrence of:

          (i) fourteen (14) days after written notice of termination is
          given by  Employee;

          (ii) upon written notice of termination  given by Employer;

          (iii) employee's death or, at the Bank's option, upon Employee's
          becoming Disabled (as defined in Article IX Section 3 hereof);

          (iv) the occurrence of a Change in Control (as defined in
          Article IX  Section 6 hereof).

Any notice of termination given by the Employer to Employee under Section 1(ii)
above shall specify whether such termination is with or without Good Cause (as
defined in Article IX Section 5 hereof).

                                  ARTICLE IX
                 OBLIGATIONS OF THE EMPLOYER UPON TERMINATION

     1.  Termination by Employee; Termination for  Good Cause.  If the Employee
terminates this Agreement pursuant to Article VIII Section 1(i) above or if
Employer terminates this Agreement with Good Cause pursuant to Article VIII
Section 1(ii) above, this Agreement shall terminate without further obligations
to Employee, other than those obligations owing or accrued to, vested in, or
earned by Employee through the date of termination, including, but not limited
to:

          (i) to the extent not theretofore paid, Employee's annual salary in
          effect at the time of such termination through the date of
          termination; and

          (ii) in the case of compensation previously deferred by Employee, all
          amounts previously deferred (together with any accrued interest
          thereon) and not yet paid by the Employer and any accrued vacation pay
          not yet paid by the Employer; and

                                       7
<PAGE>

          (iii) all other amounts or benefits owing or accrued to, vested in,
          earned by Employee through the date of termination under (a) the then
          existing or applicable plans, programs, arrangements, and policies of
          Employer and (b) the bonus provisions of Article V Section 4 of this
          Agreement;

such obligations owing or accrued to, vested in, or earned by Employee through
the date of termination, including, but not limited to, such amounts and
benefits specified in clauses (i), (ii), and (iii) of this sentence, being
hereinafter collectively referred to as the "Accrued Obligations."  The
aggregate amount of such obligations owing or accrued to, vested in, or earned
by Employee through the date of termination, including, but not limited to, the
Accrued Obligations, shall be paid by the Employer to Employee in cash in one
lump sum within thirty (30) days after the date of termination; provided,
however that the bonus payable pursuant to Article V Section 4 of this Agreement
shall be payable within thirty (30) days after the end of the quarter in which
the Employee's employment ends and shall be based on the ROAA  for the prior
twelve months.

     2.  Termination other than for Good Cause.  If the Employer terminates this
Agreement without Good Cause pursuant to Article VIII Section 1(ii) hereof, the
Employer shall pay to Employee cash in one lump sum within thirty (30) days
after the date of termination (provided, however that the bonus payable pursuant
to Article V Section 4 of this Agreement shall be payable within thirty (30)
days after the end of the quarter in which the Employee's employment ends and
shall be based on the ROAA  for the prior twelve months) the aggregate of the
following amounts:

          (i) to the extent not theretofore paid, Employee's annual salary at
          the annual rate in effect at the time of such termination through the
          date of termination; and

          (ii) in the case of compensation previously deferred by Employee, all
          amounts previously deferred (together with any accrued interest
          thereon) and not yet paid by the Employer, and any accrued vacation
          pay not yet paid by the Employer; and

          (iii) all other amounts or benefits owing or accrued to, vested in,
          earned by Employee through the date of termination under (i) the then
          existing or applicable plans, programs, arrangements, and policies of
          Employer and (ii) the bonus provisions of Article V Section 4 of this
          Agreement;

                                       8
<PAGE>

          (iv) any and all other Accrued Obligations not otherwise described in
          clause (i), (ii) or (iii) of this Section 2;

          (vi) an amount equal to (base annual salary divided by twelve) times
          the number of months remaining in the stated term of this Agreement,
          less statutory payroll deductions; provided, however, in no event
          shall the amount payable under this item (vi) be less than $93,200.

     3.  Termination by Death or Disability.  If Employee's employment is
terminated under Article VIII Section 1(iii) hereof by reason of Employee's
death or Disability, the Employer shall pay to Employee's legal representatives
cash in one lump sum within thirty (30) days after the date of Employee's death
or Disability the full amount of the obligations owing or accrued to, vested in,
or earned by Employee through the date of Employee's death or disability,
including, but not limited to, the Accrued Obligations.  Anything in this
Agreement to the contrary notwithstanding, the Employee's legal representatives
or beneficiaries shall be entitled to receive benefits provided under the then
existing or applicable plans, programs, or arrangements and policies of the
Employer relating to death or disability.  As used herein, "Disabled" shall have
the meaning as being disabled under the other benefit plans of the Employer or
if no such determination is made then such determination shall be made by the
Board of Directors of the Employer.

     4.  Termination Upon Change in Control. Upon the occurrence of a Change in
Control pursuant to Article VIII Section 1(iv) hereof, the Employer shall pay to
Employee cash in one lump sum within thirty (30) days after the date of Change
in Control (provided, however that the bonus payable pursuant to Article V
Section 4 of this Agreement shall be payable within thirty (30) days after the
end of the quarter in which the Change in Control occurs and shall be based on
the ROAA  for the prior twelve months) the aggregate of the following amounts:

          (i) to the extent not theretofore paid, Employee's annual salary at
          the annual rate in effect at the time of such termination through the
          date of termination; and

          (ii) in the case of compensation previously deferred by Employee, all
          amounts previously deferred (together with any accrued interest
          thereon) and not yet paid by the Employer, and any accrued vacation
          pay not yet paid by the Employer; and

          (iii) all other amounts or benefits owing or accrued to, vested in,
          earned by Employee through the date of termination under (i) the then
          existing or applicable plans, programs, arrangements, and policies of

                                       9
<PAGE>

          Employer and (ii) the bonus provisions of Article V Section 4 of this
          Agreement;

          (iv) any and all other Accrued Obligations not otherwise described in
          clause (i), (ii) or (iii) of this Section 4;

          (vi) an amount equal to one times the annual base salary of the
          Employee at the time of the Change in Control, less statutory payroll
          deductions; provided, however, in no event shall the amount payable
          under this item (vi) be less than the base annual salary ($93,200 plus
          any subsequent pay increases).

Additionally, Employer will use reasonable efforts to have Employee and his
dependents continue to be covered under the Employer's insurance benefit plans
(including death, disability, accident and health) for a period of twelve months
at Employee's own expense at the rate at the time of the Change in Control.

     5.  Good Cause.  As used in this Agreement, the term "Good Cause" means:

          (i) the Employee's violates any material provision of this Agreement
          or commits gross negligence, and fails to cure such violation or the
          effects of such gross negligence within thirty (30) days after written
          notice to the Employee by the Board of Directors of the Employer
          specifying in reasonable detail the alleged violation or gross
          negligence;

          (ii) the conviction of the Employee of a felony, or a misdemeanor
          involving moral turpitude; or

          (iii) the Employee engages in gross misconduct in the course and scope
          of his employment with the Employer or the Bank including indecency,
          immorality, dishonesty, unlawful harassment, use of illegal drugs or
          fighting.

     6.  Change in Control.  As used in this Agreement, "Change in Control"
means an event or series of events whereby the shareholders of the Employer as
of the Effective Date, the individuals related by blood or marriage to the
shareholders of the Employer as of the Effective Date with a relationship equal
to or closer than third cousin or any entity controlled by or for the benefit of
such persons ceases to own at least 51% of the voting stock of the Employer.
For purposes of

                                       10
<PAGE>

determining the current shareholders of the Employer, a list of the shareholders
as of the Effective Date is attached hereto as Exhibit B.

                                   ARTICLE X
                                  ARBITRATION

     1.  Any claim or controversy arising out of or relating to this Agreement,
or the breach of this  Agreement, or any other dispute arising out of or
relating to the employment of the Executive by the Employer, shall be settled by
final and binding arbitration in the city of Houston, Texas in accordance with
the Employment Arbitration Rules of the American Arbitration Association in
effect on the date the claim or controversy arises. Either party must request
arbitration of any claims controversy within sixty (60) days of the date the
claim or controversy arises by giving written notice of the party's request for
arbitration by certified U.S. mail or personal delivery addressed to the other
party.  Failure to give notice of any claim or controversy within sixty (60)
days shall constitute a waiver of the claim or controversy.

     2.  All claims or controversies subject to arbitration shall be submitted
to arbitration within three (3) months from the date the written notice of a
request for arbitration is effective.  All claims or controversies shall be
resolved by a panel of three (3) arbitrators who are licensed to practice law in
the State of Texas and who are experienced in the arbitration of labor and
employment disputes.  These arbitrators shall be selected in accordance with the
Rules of the American Arbitration Association in effect at the time the claim or
controversy arises.  Either party may request the arbitration proceeding be
stenographically recorded by a Certified Shorthand Reporter.  The arbitrators
shall issue a written decision with respect to all claims or controversies
within thirty (30) days from the date the claims or controversies are submitted
to arbitration.  The Employer will bear fifty percent (50%) of the actual cost
of the arbitration proceeding (exclusive of each party's own legal fees).

     3.  The provisions of Article X may be specifically enforced by either
party, and submission to arbitration proceedings compelled, by any court of
competent jurisdiction.  The decision of the arbitrators may be specifically
enforced by either party in any court of competent jurisdiction.

     4.   Nothing in this Agreement shall be construed to require arbitration of
any claim for worker's compensation or unemployment compensation.

                                       11
<PAGE>

                                  ARTICLE XI
                                INDEMNIFICATION

          During the term of this  Agreement, the Employer shall indemnify and
agree to hold the Employee harmless from and against any and all liabilities,
losses, costs, damages, obligations, expenses (including attorney's fees)
resulting from the fact the Employee was an officer, director or employee of the
Employer to the fullest extent permissible under the law, including, without
limitation, the Texas Finance Code and Article 2.02-1 of the Texas Business
Corporation Act, and may purchase such indemnification insurance as the Board of
Directors may from time to time determine.  The Employer shall reimburse the
Employee for any and all expenses incurred by him as a party of any threatened,
pending or completed proceeding as such expenses are incurred, and in advance of
the final disposition of the proceeding; provided however, that the Employee
shall provide to the Employer a written affirmation of his good faith belief
that he has met the standard of conduct necessary for indemnification under
applicable laws and regulations, and an undertaking by the Employee to repay all
amounts so advanced, without interest, if it is ultimately determined by a final
decision, order or decree of a court of competent jurisdiction that the Employee
has not met these standards.

                                  ARTICLE XII
                              GENERAL PROVISIONS

     1.  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 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 three (3) days after mailing.

     2.  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 the Employer and contains all
of the covenants and agreements between the parties with respect to such
employment in any manner whatsoever.

     3.  Law Governing Agreement.  The law of the State of Texas will govern the
validity, interpretation and effect of this  Agreement, and any other dispute
relating to, or arising out of, the employment relationship between the Employer
and the Employee.

                                       12
<PAGE>

     4.  Modification.   (a).  All parties acknowledge and agree that this
Agreement constitutes the complete and entire agreement between the parties;
that the parties have executed this Agreement based upon the express terms and
provisions set forth herein; that the parties have not relied on any
representations, oral or written, which are not set forth in this Agreement;
that no previous agreement, either oral or written, shall have any effect on the
terms or provisions of the Agreement; and that all previous agreements, either
oral or written, are expressly superseded and revoked by the Agreement.

     (b). All parties acknowledge and agree that the covenants and/or provisions
of this Agreement may not be modified by any subsequent agreement unless the
modifying agreement: (i) is in writing; (ii) contains an express provision
referencing this Agreement; (iii) is signed by the parties hereto; and (iv) is
approved by the Board of Directors of the Employer and the Bank.

     5.  Failure to Enforce Not Waiver.  Any failure or delay on the part of
either the Employer or the Employee to exercise any remedy or right under this
Agreement shall not operate as a waiver.  The failure of either party to require
performance of any of the terms, covenants, or provisions of this Agreement by
other party shall not constitute a waiver of any of the rights under the
Agreement.  No forbearance by either party to exercise any rights or privileges
under this Agreement shall be construed as a waiver, but all rights and
privileges shall continue in effect as if no forbearance had occurred.  No
covenant or condition of this Agreement may be waived except by the written
consent of the waiving party.  Any such written waiver of any term of this
Agreement shall be effective only in the specific instance and for the specific
purpose given.

     6.  Partial Invalidity.  If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall remain in full force and effect, as if this Agreement
had been executed without any such invalid provisions having been included.
Such invalid provision shall be reformed in a manner that is both (i) legal and
enforceable, and (ii) most closely represents the parties original intent.

     7.  Attorney's Fees and Costs.  If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs, and necessary
disbursements in addition to any other relief to which he may be entitled.

     8.  Counterparts.  This Agreement has been executed in duplicate, each of
which shall be deemed an original, but both of which shall constitute one and
the same instrument.

                                       13
<PAGE>

     9.  Successors and Assigns.  (a). The Employee acknowledges and agrees that
this  Agreement may be assigned by the Employer to any successor-in-interest and
shall inure to the benefit of, and be fully enforceable by, any successor and/or
assignee; and this  Agreement will be fully binding upon, and may be enforced by
the Employee against, any successor and/or assignee of the Employer.

     (b). The Employee acknowledges and agrees that his obligations, duties and
responsibilities under this Agreement are personal and shall not be assignable
and that this  Agreement shall be enforceable by only the Employee or his legal
representatives.  In the event of the Employee's death or disability, this
Agreement shall be enforceable by the Employee's estate, executors and/or legal
representatives.

     10.  Effectiveness.   This Agreement has been executed as of the date set
forth below effective for all purposes as of June 1, 2000.  Notwithstanding the
foregoing or the complete execution of this Agreement, this Agreement shall not
be binding upon any party hereto until its approval by the Banks' Board of
Directors and the Employer's Board of Directors.  Following its approval, it
shall be binding effective June 1, 2000.

                                       14
<PAGE>

     EXECUTED ON THIS ____ DAY OF ____________, 2000 AT HOUSTON, TEXAS.

                              EMPLOYEE:

                              ------------------------------------
                              Bradley Fagan

                              BANKS:
                              WOODCREEK BANK

                              By:
                                 ---------------------------------
                                 William Fagan, M.D.
                                 Its:  Chairman of the Board

                              DAYTON STATE BANK

                              By:
                                 ---------------------------------
                                 James A. Woodall, Jr
                                 Its: Chairman of the Board

                              EMPLOYER:
                              PARADIGM BANCORPORATION, INC.

                              By:
                                 ---------------------------------
                                 Peter Fisher
                                 Its:  President

                                       15
<PAGE>

STATE OF TEXAS      (S)
                    (S)
COUNTY OF HARRIS    (S)

     This instrument was acknowledged before me on this     day of       , 2000
by Bradley Fagan.

                              ---------------------------------
                              Notary Public - State of Texas

                              ---------------------------------
                              Printed Name of Notary
                              My Commission Expires:
                                                    --------------

STATE OF TEXAS      (S)
                    (S)
COUNTY OF HARRIS    (S)

     This instrument was acknowledged before me on this      day of      , 2000
by William Fagan, M.D. in the capacity stated.

                              -----------------------------------
                              Notary Public - State of Texas

                              -----------------------------------
                              Printed Name of Notary
                              My Commission Expires:
                                                    --------------

                                       16
<PAGE>

STATE OF TEXAS      (S)
                    (S)
COUNTY OF HARRIS    (S)

     This instrument was acknowledged before me on this     day of       , 2000
by James A. Woodall, Jr. in the capacity stated.

                              -----------------------------------
                              Notary Public - State of Texas

                              -----------------------------------
                              Printed Name of Notary
                              My Commission Expires:
                                                    --------------

STATE OF TEXAS      (S)
                    (S)
COUNTY OF HARRIS    (S)

     This instrument was acknowledged before me on this      day of      , 2000
by Peter Fisher in the capacity stated.

                              ---------------------------------
                              Notary Public - State of Texas

                              ---------------------------------
                              Printed Name of Notary
                              My Commission Expires:
                                                    -----------

                                       17
<PAGE>

                                   EXHIBIT A

                                     BONUS

Pursuant to Article V Section 4 of this Agreement, the Employer shall pay the
Employee an additional bonus as a percentage of his base annual salary of
$93,200 (plus any subsequent pay increases).  The bonus shall be based on the
return on average assets of the Employer for the prior twelve months ("ROAA")
according to the schedule set forth below.  ROAA shall be determined prior to
the payment of federal income taxes and shall be calculated by the certified
public accountants of the Employer.

ROAA (Pre-tax)    Bonus (% of Base Salary of $93,200)
--------------    ------------------------------------
2.00% or above          25%

1.75% - 1.99%           20%

1.50% - 1.74%           15%

1.25% - 1.49%           10%

1.00% - 1.24%            5%

                                       18
<PAGE>

                                   EXHIBIT B

                   LIST OF SHAREHOLDERS AS OF APRIL 30, 2000
                       (FOR CHANGE OF CONTROL PURPOSES)

                                       19

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