Document:

exv10w3

Exhibit 10.3

EMPLOYMENT AGREEMENT

     AGREEMENT effective January 1, 2010 between Glacier Bancorp, Inc., hereinafter
called “Company” and Don J. Chery, hereinafter called “Executive.”

RECITALS

	A.	 	Executive has served as Executive Vice President and Chief Administrative Officer of the
Company.

	B.	 	The Company desires Executive to continue his employment at the Company under
the terms and conditions of this Agreement.

	C.	 	Executive desires to continue his employment at the Company under the terms and
conditions of this Agreement.

AGREEMENT

	1.	 	Employment. The Company agrees to employ Executive and Executive accepts employment by the
Company on the terms and conditions set forth in this Agreement. Executive’s title will be
Executive Vice President and Chief Administrative Officer of the Company. During the term of
this Agreement, Executive will serve as a director of subsidiary banks.

	2.	 	Term. The term of this Agreement (“Term”) is one year, beginning January 1, 2010.

	3.	 	Duties. The Company will employ Executive as its Executive Vice President and Chief
Administrative Officer. Executive will faithfully and diligently perform his
assigned duties, which include the following:

	 	(a)	 	Chief Administrative Officer. The Executive shall have such duties
and responsibilities as assigned by the Company’s President and Chief Executive
Officer, which shall be customary for Chief Administrative Officers of comparable
publicly reporting companies.

	 	(b)	 	Report to Board. Executive will report directly to the
Company’s President and Chief Executive Officer. The Company’s board of
directors may, from time to time, modify Executive’s title or add, delete, or
modify Executive’s performance responsibilities to accommodate management
succession, as well as any other management objectives of the Company. Executive will
assume any additional positions, duties and responsibilities as may
reasonably be requested of him with or without additional compensation, as
appropriate and consistent with Sections 3(a) and 3(b) of this Agreement.

 

 

	4.	 	Extent of Services. Executive will devote all of his working time,
attention and skill to the duties and responsibilities set forth in Section 3. To
the extent that such activities do not interfere with his duties under Section 3, Executive
may participate in other businesses as a passive investor, but (a) Executive may not actively
participate in the operation or management of those businesses, and (b) Executive may not,
without the Company’s prior written consent, make or maintain any investment in a business
with which the Company or its subsidiaries has an existing competitive or commercial
relationship.

	5.	 	Salary. Executive will receive an annual salary of $201,571.00, to be paid in
accordance with the Company’s regular payroll schedule. Subsequent salary increases are
subject to the Company’s annual review of Executive’s compensation and performance.

	6.	 	Incentive Compensation. During the Term, the Company’s board of directors
will determine the amount of bonus to be paid by the Company to Executive for that
year, if any. In making this determination, the Company’s board of directors will consider
factors such as Executive’s performance of his duties and the safety, soundness and
profitability of the Company. Executive’s bonus will reflect Executive’s contribution to
the performance of the Company during the year. This bonus will be paid to Executive no later
than January 31 of the year following the year in which the bonus is earned by Executive.

	7.	 	Income Deferral. Executive will be eligible to participate in any program
available to the Company’s senior management for income deferral, for the purpose of
deferring receipt of any or all of the compensation he may become entitled to under
this Agreement.

	8.	 	Vacation and Benefits.

	 	(a)	 	Vacation and Holidays. Executive will receive four weeks of paid
vacation each year in addition to all holidays observed by the Company and its
subsidiaries. Executive may carry over, in the aggregate, up to four weeks of unused
vacation to a subsequent year. Any unused vacation time in excess of four weeks will
not accumulate or carry over from one calendar year to the next. Each calendar year,
Executive shall take not less than one (1) week vacation.

	 	(b)	 	Benefits. Executive will be entitled to participate in any group life
insurance, disability, health and accident insurance plans, profit sharing
and pension plans and in other employee fringe benefit programs the
Company may have in effect from time to time for its similarly situated
employees, in accordance with and subject to any policies adopted by the
Company’s board of directors with respect to the plans or programs, including without
limitation, any incentive or employee stock option plan, deferred compensation plan,
401(k)

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	 	 	 	plan, and Supplemental Executive Retirement Plan (SERP). The Company
through this Agreement does not obligate itself to make any particular benefits
available to its employees.

	 	(c)	 	Business Expenses. The Company will reimburse Executive for ordinary
and necessary expenses which are consistent with past practice at the
Company (including, without limitation, travel, entertainment, and similar
expenses) and which are incurred in performing and promoting the Company’s
business. Executive will present from time to time itemized accounts of these
expenses, subject to any limits of the Company policy or the rules and
regulations of the Internal Revenue Service. Reimbursement will be made as soon
as practicable but no later than the last day of the calendar year following the
calendar year in which the expenses were incurred. The amount of expenses eligible
for reimbursement in one calendar year will not affect the amount of expenses eligible
for reimbursement in any other calendar year.

9. Termination of Employment.

	 	(a)	 	Termination by the Company for Cause. If the Company terminates
Executive’s employment for Cause (defined below) before this Agreement terminates, the
Company will pay Executive, within 10 business days following his termination of
employment, the salary earned and expenses reimbursable under this Agreement incurred
through the date of his termination. Executive will have no right to receive
compensation or other benefits for any period after termination under this Section
9(a).

	 	(b)	 	Other Termination by the Company. If the Company terminates
Executive’s employment without Cause before this Agreement terminates, or Executive
terminates his employment for Good Reason (defined below) before this Agreement
terminates, the Company will pay Executive a payment having a present value
equal to the compensation and other benefits he would have been entitled to for the
remainder of the term if his employment had not terminated. All payments made
pursuant to this Section 9(b) shall be completed no later than March 15 of the
calendar year following the calendar year in which Executive’s employment terminates.

	 	(c)	 	Death or Disability. This Agreement terminates (1) if Executive dies
or (2) if Executive is unable to perform his duties and obligations under this
Agreement for a period of 90 consecutive days as a result of a physical or mental
disability arising at any time during the term of this Agreement, unless with
reasonable accommodation Executive could continue to perform his duties under this
Agreement and making these accommodations would not pose an undue hardship
on the Company. If termination occurs under this Section 9(c), the Company shall pay
Executive or his estate, within 10 business days following his termination of
employment, all compensation and benefits earned and expenses
reimbursable through the date Executive’s employment terminated.

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	 	(d)	 	Termination Related to a Change in Control. The following provisions shall survive
the expiration of the Term of this Agreement and the termination of Executive’s employment.

	 	(1)	 	Termination by Company. If the Company, or its
successor in interest by merger, or its transferee in the event of a purchase
in an assumption transaction (for reasons other than Executive’s death,
disability, or Cause) (A) terminates Executive’s employment within 2
years following a Change in Control (as defined below), or (B) terminates
Executive’s employment before the Change in Control but on or after the date
that any party either announces or is required by law to announce
any prospective Change in Control transaction and a Change in
Control occurs within six months after the termination, the Bank will provide
Executive with the payment and benefits described in
Section 9(d)(3) below.

	 	(2)	 	Termination by Executive. If Executive terminates
Executive’s employment, with or without Good Reason, within two years
following a Change in Control, the Company will provide Executive with the
payment and benefits described in Section 9(d)(3).

	 	(3)	 	Payments. If Section 9(d)(1)(A) or Section 9(d)(2) is
triggered in accordance with its terms, the Company will: (i) subject to
Sections 9(e) and 9(j) below, beginning within 30 days after Executive’s
separation from service as defined by Treasury Regulation § 1.409A-1(h)
(“Separation from Service”), pay Executive in 24 substantially equal monthly
installments in an overall amount equal to two times the Executive’s annual
salary (determined as of the day before the date Executive’s employment was
terminated) and (ii) maintain and provide for 2 years following Executive’s
termination, at no cost to Executive, the benefits described in Section 8(b)
to which Executive is entitled (determined as of the day before the date of
such termination); but if Executive’s participation in any such benefit is
thereafter barred or not feasible, or discontinued or materially reduced, the
Company will arrange to provide Executive with benefits substantially similar
to those benefits or reimburse Executive’s out-of-pocket expenses of
substantially similar type and value. Subject to Sections 9(e) and 9(j)
below, if Section 9(d)(1)(B) is triggered in accordance with its terms,
beginning within 30 days after a Change in Control, the Company will pay
Executive in 24 substantially equal monthly installments in an overall amount
equal to two times the Executive’s annual salary (determined on the day before
the date Executive’s employment was terminated).

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	 	(e)	 	Limitations on Payments Related to Change in Control. The following apply
notwithstanding any other provision of this Agreement:

	 	(1)	 	the total of the payments and benefits
described in Section 9(d)(3) will be less than the amount that would
cause them to be a “parachute payment” within the meaning of Section
280G(b)(2)(A) of the Internal Revenue Code;
	 
	 	(2)	 	the payment and benefits described in Section 9(d)(3) will be
reduced by any compensation (in the form of cash or other benefits) received by
Executive from the Company or its successor after the Change in Control and/or
after Executive’s termination of employment; and
	 
	 	(3)	 	Executive’s right to receive the payments and
benefits described in Section 9(d)(3) terminates (i) immediately if before the
Change in Control transaction closes, Executive terminates his employment
without Good Reason, or the Company terminates Executive’s employment for
Cause, or (ii) two years after a Change of Control occurs.

	 	(f)	 	Return of Bank Property. If and when Executive ceases, for any
reason, to be employed by the Company, Executive must return to the Company all keys,
pass cards, identification cards and any other property of the Company. At the same
time, Executive also must return to the Company all originals and
copies (whether in memoranda, designs, devices, diskettes, tapes, manuals, and
specifications) which constitute proprietary or confidential information or material
of the Company or its subsidiaries. The obligations in this paragraph include the
return of documents and other materials which may be in his desk at work, in his car,
in place of residence, or in any other location under his control.
	 
	 	(g)	 	Cause. “Cause” means any one or more of the following:

	 	(1)	 	Willful misfeasance or gross negligence in the
performance of Executive’s duties;
	 
	 	(2)	 	Conviction of a crime in connection with his duties;
	 
	 	(3)	 	Conduct demonstrably and significantly harmful to the Company,
as reasonably determined on the advice of legal counsel by the Company’s board
of directors; or
	 
	 	(4)	 	Permanent disability, meaning a physical or mental impairment
which renders Executive incapable of substantially performing the duties
required under this Agreement, and which is expected to continue
rendering Executive so incapable for the reasonably foreseeable future.

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	 	(5)	 	Any other legitimate business reason as determined by the
Company’s board of directors.

	 	(h)	 	Good Reason. Executive terminates employment for “Good Reason” if all four of
the following criteria are satisfied:

	 	(1)	 	Any one or more of the following conditions (each a
“Condition”) arises without Executive’s consent:

(A) The material reduction of Executive’s salary, unless the reduction or
elimination is generally applicable to substantially all Company
employees (or employees of a successor or controlling entity of the Company)
formerly benefitted;

(B) The material diminution in Executive’s authority or duties as of the
date of this Agreement;

(C) The material breach of this Agreement by the Company, or

(D) A material relocation or transfer of Executive’s principal place of
employment to a location outside Flathead County, Montana.

	 	(2)	 	Executive gives notice to the Company of the Condition within
90 days of the initial existence of the Condition.
	 
	 	(3)	 	The Company fails to reasonably remedy the Condition within 30
days following receipt of the notice described in paragraph (2) above.
	 
	 	(4)	 	Executive terminates employment within 180 days following the
initial existence of the Condition.

	 	(i)	 	Change in Control. “Change in Control” means a change in the
ownership or effective control, or in the ownership of a substantial portion of the
assets, of the Company, within the meaning of Treas Reg. § 1.409A-3(i)(5).
	 
	 	(j)	 	Section 409A Compliance. Notwithstanding anything in this Agreement
to the contrary, if any amounts that become due under this Agreement on account of the
termination of Executive’s employment constitute “nonqualified deferred compensation”
within the meaning of Code Section 409A, payment of such amounts shall not commence
until Executive incurs a Separation from Service (as defined in Section 9(d)(3)). If,
at the time of Executive’s Separation from Service under this Agreement, Executive is
a “specified employee” (under Internal Revenue Code Section 409A), any amount that
constitutes “nonqualified deferred compensation” within the meaning of Code Section
409A that becomes payable to Executive on account of Executive’s Separation from
Service (including any amounts payable pursuant to the preceding

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	 	 	 	sentence) will not be paid until after the end of the sixth calendar month beginning
after Executive’s Separation from Service (the “409A Suspension Period”). Within 14
calendar days after the end of the 409A Suspension Period, Executive shall be paid a
lump sum payment in cash equal to any payments delayed because of the preceding
sentence, together with interest on them for the period of delay at a rate not less
than the average prime interest rate published in the Wall Street Journal on any day
chosen by the Company during that period. Thereafter, Executive shall receive any
remaining payments as if there had not been an earlier delay.

	10.	 	Confidentiality. Executive will not, after the date this Agreement was signed, including
during and after its Term, use for his own purposes or disclose to any other person
or entity any confidential business information concerning the Company or its business
operations or that of its subsidiaries, unless (1) the Company consents to the use or
disclosure of confidential information; (2) the use or disclosure is consistent with
Executive’s duties under this Agreement, or (3) disclosure is required by law or court order.
For purposes of this Agreement, confidential business information includes, without
limitation, trade secrets (as defined under the Montana Uniform Trade Secrets Act,
Montana Code §30-14-402), various confidential information on investment management practices,
marketing plans, pricing structure and technology of either the Company or its
subsidiaries. Executive will also treat the terms of this Agreement as confidential business
information.
	 
	11.	 	Noncompetition. During the Term of this Agreement and for a period of two years after
Executive’s employment with the Company has terminated, Executive will not, directly or
indirectly, as a shareholder, director, officer, employee, proprietor, partner, member, agent,
consultant, lessor, creditor or otherwise:

	 	(a)	 	provide management, supervisory or other similar services to any person or
entity engaged in any business in counties in which the Company or its subsidiaries
may have a presence which is competitive with the business of the Company or a
subsidiary as conducted during the term of this Agreement or as conducted as of the
date of termination of employment, including any preliminary steps associated with the
formation of a new bank.
	 
	 	(b)	 	persuade or entice, or attempt to persuade or entice any employee of the
Company or a subsidiary to terminate his/her employment with the Company or a
subsidiary.
	 
	 	(c)	 	persuade or entice or attempt to persuade or entice any person or entity to
terminate, cancel, rescind or revoke its business or contractual relationships with
the Company or its subsidiaries.

	12.	 	Enforcement.

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	 	(a)	 	The Company and Executive stipulate that, in light of all of the facts
and circumstances of the relationship between Executive and the Company, the
agreements referred to in Sections 10 and 11 (including without limitation their
scope, duration and geographic extent) are fair and reasonably necessary for
the protection of the Company and its subsidiaries confidential information, goodwill
and other protectable interests. If a court of competent jurisdiction should decline
to enforce any of those covenants and agreements, Executive and the Company
request the court to reform these provisions to restrict Executive’s use of
confidential information and Executive’s ability to compete with the Company to the
maximum extent, in time, scope of activities and geography, the court finds
enforceable.
	 
	 	(b)	 	Executive acknowledges the Company will suffer immediate and irreparable harm
that will not be compensable by damages alone if Executive repudiates or breaches any
of the provisions of Sections 10 or 11 or threatens or attempts to do so. For this
reason, under these circumstances, the Company, in addition to and without limitation
of any other rights, remedies or damages available to it at law or in equity, will be
entitled to obtain temporary, preliminary and permanent injunctions in order
to prevent or restrain the breach, and the Company will not be required to
post a bond as a condition for the granting of this relief.

	13.	 	Covenants. Executive specifically acknowledges the receipt of adequate consideration
for the covenants contained in Sections 10 and 11 and that the Company is entitled to require
him to comply with these Sections. These Sections will survive termination of
this Agreement. Executive represents that if his employment is terminated, whether
voluntarily or involuntarily, Executive has experience and capabilities sufficient to enable
Executive to obtain employment in areas which do not violate this Agreement and that the
Company’s enforcement of a remedy by way of injunction will not prevent Executive from earning
a livelihood.
	 
	14.	 	Arbitration.

	 	(a)	 	Arbitration. At either party’s request, the parties must submit any
dispute, controversy or claim arising out of or in connection with, or relating to,
this Agreement or any breach or alleged breach of this Agreement, to arbitration under
the American Arbitration Association’s rules then in effect (or under any other form
of arbitration mutually acceptable to the parties). A single arbitrator agreed on by
the parties will conduct the arbitration. If the parties cannot agree on a
single arbitrator, each party must select one arbitrator and those two arbitrators
will select a third arbitrator. This third arbitrator will hear the dispute. The
arbitrator’s decision is final (except as otherwise specifically provided by law)
and binds the parties, and either party may request any court having
jurisdiction to enter a judgment and to enforce the arbitrator’s decision. The
arbitrator will provide the parties with a written decision naming the

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	 	 	 	substantially prevailing party in the action. This prevailing party is
entitled to reimbursement from the other party for its costs and expenses, including
reasonable attorneys’ fees.

	 	(b)	 	Governing Law. All proceedings will be held at a place designated by
the arbitrator in Flathead County, Montana. The arbitrator, in rendering a decision as
to any state law claims, will apply Montana law.
	 
	 	(c)	 	Exception to Arbitration. Notwithstanding the above, if Executive
violates Section 10 or 11, the Company will have the right to initiate the court
proceedings described in Section 12(b), in lieu of an arbitration proceeding under
this Section 14.

	15.	 	Miscellaneous Provisions.

	 	(a)	 	Entire Agreement. This Agreement constitutes the entire understanding
and agreement between the parties concerning its subject matter and
supersedes all prior agreements, correspondence, representations, or
understandings between the parties relating to its subject matter.
	 
	 	(b)	 	Binding Effect. This Agreement will bind and inure to the benefit of
the Company’s, its subsidiaries’ and Executive’s heirs, legal representatives,
successors and assigns.
	 
	 	(c)	 	Litigation Expenses. In the event of any dispute or legal or
equitable action arising from this Agreement, the prevailing party shall be entitled
to all of its out-of-pocket expenses and costs including, without
limitation, reasonable attorneys’ fees and costs.
	 
	 	(d)	 	Waiver. The failure of any party to insist upon strict performance of
any of the terms and provisions of this Agreement shall not be construed as a waiver
or relinquishment of any such terms or conditions or of any other term or condition
and the same shall be and remain in full force and effect. Any waiver by a party of
its rights under this Agreement must be written and signed by the party waiving its
rights. A party’s waiver of the other party’s breach of any provision of this
Agreement will not operate as a waiver of any other breach by the breaching party.
	 
	 	(e)	 	Assignment. The services to be rendered by Executive under this
Agreement are unique and personal. Accordingly, Executive may not assign any
of his rights or duties under this Agreement.
	 
	 	(f)	 	Amendment. This Agreement may be modified only through a written
instrument signed by both parties.

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	 	(g)	 	Severability. The provisions of this Agreement are severable. The
invalidity of any provision will not affect the validity of other provisions of this
Agreement.
	 
	 	(h)	 	Governing Law and Venue. This Agreement will be governed by and
construed in accordance with Montana law, except to the extent that certain
regulatory matters may be governed by federal law. The parties must bring any legal
proceeding arising out of this Agreement in Flathead County, Montana.
	 
	 	(i)	 	Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which taken
together will constitute one and the same instrument.

Signed
this 29th day of December, 2009.

	 	 	 	 	 
	 	GLACIER BANCORP, INC.

 	 
	 
	 	By:  	/s/ Michael J. Blodnick
 	 
	 	 	Michael J. Blodnick 	 
	 	 	President/CEO 	 
	 

	 	 	 	 	 
	Attest:

 	 
	 
	By:  	/s/ LeeAnn Wardinsky
 	 
	 	LeeAnn Wardinsky 	 
	 	Secretary 	 
	 

	 	 	 	 	 
	 	EXECUTIVE

 	 
	 
	 	By:  	/s/ Don J. Chery
 	 
	 	 	Don J. Chery 	 
	 	 	 	 
	 

10exv10w8

	 	 	 	 	 

Exhibit 10.8

SEVENTH AMENDMENT TO LOAN AGREEMENT

     THIS SEVENTH AMENDMENT TO LOAN AGREEMENT (the “Seventh Amendment”) dated as of the 31st day of
December, 2009, to the Loan Agreement (the “Loan Agreement”), made and entered into as of December
31, 2004, by and among FIRST FINANCIAL BANKSHARES, INC., a Texas corporation, (the “Borrower”) and
THE FROST NATIONAL BANK (the “Lender”). All capitalized terms not otherwise defined herein shall
have the meaning ascribed to each of them in the Loan Agreement.

WITNESSETH:

     WHEREAS, Borrower executed the Loan Agreement to govern those certain promissory notes from
Lender, specifically, that certain $50,000,000.00 Note (the “Note”);

     WHEREAS, the Borrower has executed amendments to Loan Agreement as evidenced by the First
Amendment to Loan Agreement dated as of December 31, 2005, the Second Amendment to Loan Agreement
dated December 31, 2006, the Third Amendment to Loan Agreement dated December 31, 2007, and the
Fourth Amendment to Loan Agreement dated July 24, 2008, the Fifth Amendment to Loan Agreement dated
December 31, 2008 and the Sixth Amendment to Loan Agreement dated June 16, 2009;

     WHEREAS, the Borrower desires to reduce the principal balance of the Note and renew and extend
the unpaid principal balance of the Note; and

     WHEREAS, the Lender agrees to reduce the principal balance of the Note and renew, extend and
modify the Note, all as hereinafter provided.

     NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Borrower and Lender do hereby agree
as follows:

ARTICLE I

Amendment to Loan Agreement

     1.1 Amendment to Definitions in the Loan Agreement. Borrower and Lender agree to, and
do hereby, amend the Loan Agreement by deleting the definitions of Bank and Security Instruments in
their entirety and substituting therefore new definitions which shall be and hereby read as
follows:

“Bank” shall mean any banks and financial institutions, whether chartered by
the federal government or any state, which are subsidiaries of the Borrower.

SEVENTH AMENDMENT TO LOAN AGREEMENT  — Page 1

 

 

     “Security Instruments” shall mean any documents executed to secure the
Obligations. On Closing Date, the Loan is unsecured except for the Guaranty of FFBD.

     Borrower and Lender agree to, and do hereby, amend the Loan Agreement by adding the definition
of “Prime Rate” as follows:

     “Prime Rate” shall mean the Prime Rate referenced in The Wall Street
Journal in the “Money Rates” column. If the Prime Rate ceases to be made available by
the publisher or, or any successor to the publisher of The Wall Street Journal, the
interest rate will be determined by using a comparable index. If more than one Prime Rate
is quoted, the higher rate shall apply. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.

     1.2 Amendment to Section 2.01 of the Loan Agreement. Borrower and Lender agree to, and
do hereby, amend Section 2.01 of the Loan Agreement to read in its entirety as follows:

     2.01 The Loan. Subject to the terms and conditions of this Agreement, Lender agrees
to make the Loan to Borrower in the principal amount of TWENTY FIVE MILLION AND NO/100 DOLLARS
($25,000,000.00) which loan shall be for the sole purpose of financing bank acquisitions, working
capital needs and treasury stock repurchases.

     1.3 Amendment to Section 2.02(a) of the Loan Agreement. Borrower and Lender agree to,
and do hereby, amend the Loan Agreement by deleting Section 2.02(a) of the Loan Agreement in its
entirety and substituting therefore the following paragraphs:

     “2.02 The Note. The obligation of Borrower to pay the Loan shall be evidenced
by a promissory note (the “Note”) executed by Borrower and payable to the order of Lender,
in the principal amount of $25,000,000 bearing interest at the variable rate set forth in
the Note. The Borrower shall pay principal and interest in accordance with the terms of the
Note, with the maturity date being as set forth in the Note.

     (a) Advances. From Closing Date and continuing at all times through June 30,
2011 (the “Revolving Credit Period”) the Loan evidenced by the Note shall be a revolving
credit facility which will allow the Borrower to request such amounts as Borrower may elect
from time to time (each such amount being herein called an “Advance”) so long as the
aggregate amount of Advances outstanding at any time under the Note does not exceed Twenty
Five Million and No/100 Dollars ($25,000,000.00) provided however, the minimum Advance must
be at least $500,000.00. The Borrower shall have the right to borrow, repay, and borrow
again during the Revolving Credit Period.

     1.4 Amendment to Section 2.02(c) of the Loan Agreement. Borrower and Lender

SEVENTH AMENDMENT TO LOAN AGREEMENT  — Page 2

 

 

agree to,
and do hereby, amend the Loan Agreement by deleting the first sentence of Section 2.02(c) of the
Loan Agreement in its entirety and substituting therefor the following sentence:

     “(c) Interest Calculation. Adjustments in the interest rate shall be made on
the first day of each calendar quarter for any change in LIBOR, and adjustments due to any
change in the Prime Rate, or any change in the Highest Lawful Rate shall be made as of the
effective date of such change.”

     1.5 Amendment to Section 2.03 of the Loan Agreement. Borrower and Lender agree to, and
do hereby, amend Section 2.03 of the Loan Agreement to read in its entirety as follows:

     “2.03 Security for the Loan. To secure full and complete payment and
performance of the Obligations, Borrower shall cause to be executed and delivered (which,
together with all property which may hereafter be delivered to secure the Obligations, being
herein called “Collateral”) a Guaranty Agreement executed by FFBD.

     1.6 Amendment to Section 2.04 of the Loan Agreement. Borrower and Lender agree to,
and do hereby, amend Section 2.04 of the Loan Agreement by deleting 2.04(d) in its entirety and
relettering Section 2.04(e) through (l) to be Section 2.04(d) through (k).

     1.7 Amendment to Section 3.11 of the Loan Agreement. Borrower and Lender agree to,
and do hereby, amend Section 3.11 of the Loan Agreement to read in its entirety as follows:

     “3.11 Title to Assets. Borrower owns 100% of the stock of FFBD, free of any
lien or claim or any right or option on the part of any third person to purchase or
otherwise acquire such stock or any part thereof. FFBD owns 100% of the stock of each Bank
free of any lien or claim or any right or option on the part of any third person to purchase
or otherwise acquire the Bank or any part thereof.

     1.8 Amendment to Section 5.02 of the Loan Agreement. Borrower and Lender agree to,
and do hereby, amend Section 5.02 of the Loan Agreement to read in its entirety as follows:

     “5.02 Return on Equity. The Borrower shall not permit the Return on Equity of
Borrower to be less than eight percent (8.0%), calculated at the end of each fiscal
quarter.”

     1.9 Amendment to Section 5.03 of the Loan Agreement. Borrower and Lender agree to,
and do hereby, amend Section 5.03 of the Loan Agreement to read in its entirety as follows:

     “5.03 Return on Assets. The Borrower shall not permit the Return on Assets of
Borrower to be less than one percent (1.0%), calculated at the end of each fiscal quarter
based on year-to-date information.”

     1.10 Amendment to Section 5.04 of the Loan Agreement. Borrower and Lender agree

SEVENTH AMENDMENT TO LOAN AGREEMENT  — Page 3

 

 

to,
and do hereby, amend Section 5.04 of the Loan Agreement to read in its entirety as follows:

     “5.04 Non-Performing Assets Ratio. Borrower shall not permit the
Non-Performing Assets Ratio of Borrower to be less than 1.0 to 1.0, to be calculated at the
end of each fiscal quarter.”

ARTICLE II

Conditions of Effectiveness

     2.1 Effective Date. This Seventh Amendment shall become effective as of December 31,
2009, when, and only when, Lender shall have received counterparts of this Seventh Amendment
executed and delivered by Borrower and Lender, and when each of the following conditions shall have
been met, all in form, substance, and date satisfactory to Lender:

     (a) Closing Documents. Borrower shall have executed and delivered to Lender
(I) a Renewal Promissory Note, payable to the order of Lender as set forth therein, duly
executed on behalf of the Borrower, dated effective December 31, 2009 in the principal
amount of $25,000,000.00, (ii) Arbitration and Notice of Final Agreement, (iii) Certificate
of Corporate Resolutions, and (iv) this Seventh Amendment.

     (b) Additional Loan Documents. Borrower shall have executed and delivered to
Lender such other documents as shall have been requested by Lender to renew, and extend, the
Loan Documents to secure payment of the Obligations of Borrower, all in form satisfactory to
Lender and its counsel.

ARTICLE III

Representations and Warranties

     3.1 Representations and Warranties. In order to induce Lender to enter into this
Seventh Amendment, Borrower represents and warrants the following:

     (a) Borrower has the corporate power to execute and deliver this Seventh Amendment, the
Renewal Promissory Note, and other Loan Documents and to perform all of its obligations in
connection herewith and therewith.

     (b) The execution and delivery by Borrower of this Seventh Amendment, the Renewal
Promissory Note, and other Loan Documents and the performance of its obligations in
connection herewith and therewith: (I) have been duly authorized or will be
duly ratified and affirmed by all requisite corporate action; (ii) will not violate any
provision of law, any order of any court or agency of government or the Articles of
Incorporation or Bylaws of such entity; (iii) will not be in conflict with, result in a
breach of

SEVENTH AMENDMENT TO LOAN AGREEMENT  — Page 4

 

 

or constitute (alone or with due notice or lapse of time or both) a default under
any indenture, agreement or other instrument; and (iv) will not require any registration
with, consent or approval of or other action by any federal, state, provincial or other
governmental authority or regulatory body.

     (c) There is no action, suit or proceeding at law or in equity or by or before any
governmental instrumentality or other agency or regulatory authority now pending or, to the
knowledge of Borrower, threatened against or affecting Borrower, or any properties or rights
of Borrower, or involving this Seventh Amendment or the transactions contemplated hereby
which, if adversely determined, would materially impair the right of Borrower to carry on
business substantially as now conducted or materially and adversely affect the financial
condition of Borrower, or materially and adversely affect the ability of Borrower to
consummate the transactions contemplated by this Seventh Amendment.

     (d) The representations and warranties of Borrower contained in the Loan Agreement,
this Seventh Amendment, the Renewal Promissory Note, and any other Loan Document securing
Borrower’s Obligations and indebtedness to Lender are correct and accurate on and as of the
date hereof as though made on and as of the date hereof, except to the extent that the facts
upon which such representations are based have been changed by the transactions herein
contemplated.

ARTICLE IV

Ratification of Obligations

     4.1 Ratification of Obligation. The Borrower does hereby acknowledge, ratify and
confirm that it is obligated and indebted to Lender as evidenced by the Loan Agreement (as amended
by the Seventh Amendment), the Renewal Promissory Note and all other Loan Documents.

     4.2 Ratification of Agreements. The Loan Agreement, this Seventh Amendment, the
Renewal Promissory Note, and each other Loan Document, as hereby amended, are acknowledged,
ratified and confirmed in all respects as being valid, existing, and of full force and effect. Any
reference to the Loan Agreement in any Loan Document shall be deemed to be a reference to the Loan
Agreement as amended by this Seventh Amendment. The execution, delivery and effectiveness of this
Seventh Amendment shall not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of Lender under the Loan Agreement, nor constitute a waiver of any provision of the
Loan Agreement.

SEVENTH AMENDMENT TO LOAN AGREEMENT  — Page 5

 

 

ARTICLE V

Miscellaneous

     5.1 Survival of Agreements. All representations, warranties, covenants and agreements
of Borrower, herein or in any other Loan Document shall survive the execution and delivery of this
Seventh Amendment, and the other Loan Documents and the performance hereof and thereof, including
without limitation the making or granting of the Loan and the delivery of the Renewal Promissory
Note and all other Loan Documents, and shall further survive until all of Borrower’s Obligations to
Lender are paid in full. All statements and agreements contained in any certificate or instrument
delivered by Borrower hereunder or under the Loan Documents to Lender shall be deemed to constitute
the representations and warranties by Borrower and/or agreements and covenants of Borrower under
this Seventh Amendment and under the Loan Agreement.

     5.2 Loan Document. This Seventh Amendment, the Renewal Promissory Note, and each
other Loan Document executed in connection herewith are each a Loan Document and all provisions in
the Loan Agreement, as amended, pertaining to Loan Documents apply hereto and thereto.

     5.3 Governing Law. This Seventh Amendment shall be governed by and construed in all
respects in accordance with the laws of the State of Texas and any applicable laws of the United
States of America, including construction, validity and performance.

     5.4 Counterparts. This Seventh Amendment may be separately executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to constitute one and the same Seventh Amendment.

     5.5 Release of Claims. Borrower, by its execution of this Seventh Amendment, hereby
declares that it has no set-offs, counterclaims, defenses or other causes of action against Lender
arising out of the Loan, the renewal, modification and extension of the Loan, any documents
mentioned herein or otherwise; and, to the extent any such setoffs, counterclaims, defenses or
other causes of action which may exist, whether known or unknown, such items are hereby expressly
waived and released by Borrower.

     5.6 ENTIRE AGREEMENT. THIS SEVENTH AMENDMENT, TOGETHER WITH ANY LOAN DOCUMENTS
EXECUTED IN CONNECTION HEREWITH, CONTAINS THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO RELATING
TO THE SUBJECT MATTER HEREOF AND THEREOF AND ALL PRIOR AGREEMENTS RELATIVE THERETO WHICH ARE NOT
CONTAINED HEREIN OR THEREIN ARE TERMINATED. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. THIS SEVENTH AMENDMENT, AND THE LOAN DOCUMENTS MAY BE AMENDED, REVISED, WAIVED,
DISCHARGED, RELEASED OR TERMINATED ONLY BY A WRITTEN INSTRUMENT OR

SEVENTH AMENDMENT TO LOAN AGREEMENT  — Page 6

 

 

INSTRUMENTS, EXECUTED BY THE PARTY AGAINST WHICH ENFORCEMENT OF THE AMENDMENT, REVISION, WAIVER,
DISCHARGE, RELEASE OR TERMINATION IS ASSERTED. ANY ALLEGED AMENDMENT, REVISION, WAIVER, DISCHARGE,
RELEASE OR TERMINATION WHICH IS NOT SO DOCUMENTED SHALL NOT BE EFFECTIVE AS TO ANY PARTY.

     IN WITNESS WHEREOF, this Seventh Amendment is executed effective as of the date first written
above.

	 	 	 	 	 
	BORROWER:              	FIRST FINANCIAL BANKSHARES, INC.

 	 
	 	By:  	/s/ F. Scott Dueser
 	 
	 	 	Its: CEO/President 	 
	 	 	 	 
	 
	LENDER:       	THE FROST NATIONAL BANK

 	 
	 	By:  	/s/ Jerry L. Crutsinger
 	 
	 	 	Jerry L. Crutsinger, Senior Vice President 	 
	 	 	 	 
	 

     The Guarantor is executing this Seventh Amendment to acknowledge the terms and conditions of
the renewal.

	 	 	 	 	 
	GUARANTOR:       	FIRST FINANCIAL BANKSHARES OF DELAWARE, INC.

 	 
	 	By:  	/s/ Gary L. Webb
 	 
	 	 	Its: President 	 
	 	 	 	 
	 

 SEVENTH AMENDMENT TO LOAN AGREEMENT  — Page 7

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