Document:

Exhibit 10.2

 

2022 INTERNATIONAL BANCSHARES CORPORATION

STOCK APPRECIATION RIGHTS PLAN

 

STOCK APPRECIATION RIGHTS AWARD AGREEMENT

 

This
Stock Appreciation Rights Award Agreement (this “Agreement”) is made and entered into as of [DATE] by and between INTERNATIONAL
BANCSHARES CORPORATION, a Texas corporation (the “Company”) and [EMPLOYEE NAME] (the “Participant”).

 

Grant Date: __________________________

 

Number of Stock Appreciation Rights (“SARs”):
________________________________

 

Base Value per SAR: $ ______________

 

Expiration Date: _________________________________

 

1.            Grant
of SARs.

 

1.1            Grant.
The Company hereby grants to the Participant an aggregate of [NUMBER] stock appreciation rights (the “SARs”). Each
SAR entitles the Participant to receive, upon exercise, an amount equal to the excess of (a) the Fair Market Value of one share of
Company Stock on the date of exercise, over (b) the Base Value, equal to the Fair Market Value of one share of Company Stock on the
Grant Date (the “Appreciation Value”). The SARs are being granted pursuant to the terms of the Company’s 2022
Stock Appreciation Rights Plan (the “Plan”).

 

1.2            Consideration;
Subject to Plan. The grant of the SARs is made in consideration of the services to be rendered by the Participant to the Company and
is subject to the terms and conditions of the Plan. Capitalized terms used but not defined herein will have the meaning ascribed to them
in the Plan.

 

2.            For
purposes of this Agreement:

 

2.1            “Continuous
Service” means the Participant has been employed by the Company/Subsidiary continuously since the Grant Date or been on leave,
if preapproved by an executive officer of the Company/Subsidiary before the leave.

 

2.2            “Disability”
means the Participant’s inability to perform the essental functions of Particpant’s job duties with or without a reasonable
accommodation and such disability (i) remains in effect for any ninety-one (91) consecutive days or (ii) remains in effect
for any combination of one hundred twenty (120) days (whether consecutive or not) out of any three hundred sixty (360)-day period”.

 

2.3            “Separation
from Service” means the Participant’s termination of employment with the Company/Subsidiary for any reason whatsoever,
including, without limitation, death, Disability, retirement, voluntary termination, or Termination by the Company/Subsidiary for Good
Reason. A Participant on leave approved by an executive officer of the Company/Subsidiary prior to such leave, shall not be considered
to have a Separation from Service to the extent such leave does not constitute an interruption or termination of the status of the Participant
as an “employee” under Section 1.421-7(h) of the Regulations under the Code, and corresponding provisions of successor
Regulations.

 

     

     

    

 

2.4            “Termination
by the Company/Subsidiary for Good Reason” means termination of the Participant’s employment by the Company/Subsidiary:
(a) upon failure of the Participant to satisfactorily perform such Participant’s responsibilities and duties as prescribed
and changed from time to time; (b) upon the Participant having been charged with an act punishable by imprisonment or having committed
an act of moral turpitude; (c) as determined in the Company’s sole and absolute discretion, upon the Participant’s engaging
in conduct that is detrimental to the business and/or reputation, character and/or standing of the Company/Subsidiary, or otherwise injurious
to the Company/Subsidiary, monetarily or otherwise, including, but not limited to, embezzlement, fraud, theft, dishonesty, misfeasance,
malfeasance, neglect of duties, incompetence or insubordination; (d) upon any violation by the Participant of the policies and/or
procedures applicable to the Participant and promulgated from time to time by the Company/Subsidiary, (e) upon breach (or anticipated
breach) of the NDA (as defined herein), as determined in the Company’s sole and absolute discretion; or (f) if the Participant,
directly or indirectly, renders services to or engages with any individual or business which, as determined in the Company’s sole
and absolute discretion, is or becomes competitive with the Company or creates a conflict of interest. In the event of a dispute between
the Participant and the Company/Subsidiary regarding whether the Participant was Terminated by the Company/Subsidiary for Good Reason,
the Committee’s decision with respect to such matter, determined in good faith, shall be final and conclusive and binding on the
Participant.

 

3.            Vesting.

 

3.1            Vesting
Schedule. Conditioned on the Participant’s Continuous Service with the Company/Subsidiary, each SAR granted under this Agreement
shall vest and become exercisable as set forth below. Except as otherwise provided in this Agreement, unvested SARs shall not be exercisable
on or after the Participant’s Separation from Service with the Company:

 

•     5%
on the second anniversary of the Grant Date;

 

•     10%
on the third anniversary of the Grant Date;

 

•     15%
on the fourth anniversary of the Grant Date;

 

•     20%
on the fifth anniversary of the Grant Date;

 

•     25%
on the sixth anniversary of the Grant Date; and

 

•     25%
on the seventh anniversary of the Grant Date.

 

3.2            Expiration.
The SARs granted hereunder shall expire and terminate on the Expiration Date designated above, or earlier as provided herein or in the
Plan.

 

4.            Separation
from Service.

 

4.1            Separation
from Service for Other Than Death, Disability. If the Participant’s Separation from Service is for any reason other than death
or Disability, the Participant may exercise his or her vested SARs under this Agreement, but only within the time-period ending on the
earlier of (a) the date three months following the Participant’s Separation from Service or (b) the Expiration Date.

 

     

     

    

 

4.2            Separation
from Service Due to Termination for Good Reason by Company/Subsidiary or Other Than Good Reason. If the Participant Separates from
Service due to a Termination by the Company/Subsidiary for Good Reason or Other Than Good Reason, then except as set forth herein, the
Participant’s SARs (whether vested or unvested) shall immediately terminate and cease to be exercisable.

 

4.3            Separation
from Service Due to Disability. If the Participant Separates from Service with the Company/Subsidiary as a result of the Participant’s
Disability, the Participant may exercise the Participant’s vested SARs, but only within such time-period ending on the earlier of
(a) the date 12 months following the Participant’s Separation from Service or (b) the Expiration Date.

 

4.4            Separation
from Service Due to Death. If the Participant Separates from Service with the Company/Subsidiary as a result of the Participant’s
death, the Participant’s vested SARs may be exercised by the Participant’s estate, by a person who acquired the right to exercise
the SARs by will or the laws of descent and distribution, or by the person designated to exercise the SARs upon the Participant’s
death, but only within the time period ending on the earlier of (a) the date 12 months following the Participant’s Separation
from Service or (b) the Expiration Date.

 

5.            Manner
of Exercise.

 

5.1            When
to Exercise. Except as otherwise provided in the Plan or this Agreement, the Participant (or in the case of exercise after the Participant’s
death or incapacity, the Participant’s executor, administrator, heir or legatee, as the case may be) may exercise his or her vested
SARs, in whole or in part, at any time after vesting and until the Expiration Date, or earlier termination pursuant to Section 4
hereof, by following the procedures set forth in this Section 5. If partially exercised, the Participant may exercise the remaining
unexercised portion of the SAR grant at any time after vesting and until the earlier of the Expiration Date or other termination event
pursuant to Section 4 hereof. No SARs shall be exercisable after the Expiration Date.

 

5.2            Election
to Exercise. To exercise a SAR, the Participant (or in the case of exercise after the Participant’s death or incapacity, the
Participant’s executor, administrator, heir or legatee, as the case may be), must deliver to the Company a written notice (or notice
through another previously approved method, which could include a web-based or e-mail system) to the Trust Department of the Company’s
subsidiary, International Bank of Commerce, Laredo (the “Trust Department”), which sets forth the number of SARs
being exercised, together with any additional documents required by the Company/Subsidiary. Each such notice must satisfy the procedures
then applicable to the SARs and must contain such representations as required by the Company.

 

     

     

    

 

5.3            Documentation
of Right to Exercise. If a person other than the Participant exercises SARs granted under this Agreement, the person must first submit
documentation reasonably acceptable to the Company verifying such person’s legal right to exercise the SARs.

 

5.4            Date
of Exercise. The SARs shall be deemed exercised on the business day when the Company receives a fully executed exercise notice. If
the notice is received after business hours on such date, the SARs shall be deemed exercised on the business date immediately following
the business date when such notice is received by the Company.

 

5.5            Special
Exercise Requirements. A SAR may be exercised only if the Participant has first provided the Company with prior written notice of
such Participant’s intent to exercise the SAR (the “SAR Intent Notice”), in substantially the form attached hereto
as Exhibit A. Upon the expiration of 90 calendar days after the Company’s receipt of the SAR Intent Notice (the “SAR
Hold Period”), the Participant shall have 15 calendar days to exercise the SAR (the “SAR Exercise Period”)
in accordance with the following requirements: (i) the Participant’s completion, execution and delivery to the Company of a
notice of exercise and “investment letter” (if required by the Company), in substantially the form attached hereto as Exhibit B
(the “Notice of Exercise”); and (ii) if requested by the Company, the Participant’s submission to the Company
of a completed and executed Non-Disclosure and Non-Solicitation Agreement (the “NDA”), in substantially the form attached
hereto as Exhibit C, as amended from time to time in the Company’s sole and absolute discretion, and Participant agrees
the ability to participate in the Plan constitutes good and adequate consideration for the NDA. In the event the Participant does
not exercise the SAR within the SAR Exercise Period, the SAR Intent Notice shall become null and void.

 

6.            Withholding.
Prior to the payment of the Appreciation Value in connection with the exercise of a SAR, the Participant must make arrangements satisfactory
to the Company to pay or provide for the deduction from the cash appreciation Value or other compensation due the Participant from the
Company/Subsidiary to satisfy any applicable federal, state and local withholding obligations on the exercise. If approved by the Committee
in its discretion, the required withholding obligations may be settled by the delivery to the Company of previously owned and unencumbered
shares of Company Stock held by the Participant.

 

7.            Form of
Payment. Upon the exercise of all or a portion of the SARs, the Participant shall be entitled to a cash payment equal to the Appreciation
Value of the SARs being exercised, less any amounts withheld pursuant to Section 6.

 

8.            Section 409A;
No Deferral of Compensation. Neither the Plan nor this Agreement is intended to provide for the deferral of compensation within the
meaning of Section 409A of the Internal Revenue Code (the “Code”), and the Plan and this Agreement are to be construed
accordingly. The Company reserves the right to unilaterally amend or modify the Plan or this Agreement to the extent the Company considers
it necessary or advisable, in its sole discretion, to comply with, or to ensure that the SARs granted hereunder are not subject to Section 409A
of the Code.

 

9.            No
Right to Continued Employment. Neither the Plan nor this Agreement shall confer upon the Participant any right to be retained in any
position as an Employee of the Company. Nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company/Subsidiary
to terminate the Participant’s employment at any time, with or without notice, as the Participant’s employment at all times
remains “at will.”

 

     

     

    

 

10.            Transferability.
The SARs granted herein are not transferable by the Participant other than to a designated beneficiary upon the Participant’s death
or by will or the laws of descent and distribution, and are exercisable during the Participant’s lifetime only by the Participant.
No assignment or transfer of the SARs, or the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise
(except to a designated beneficiary upon death by will or the laws of descent and distribution) shall vest in the assignee or transferee
any interest or rights herein, but immediately upon such assignment or transfer, the SARs automatically shall terminate with no further
effect.

 

11.            Change
in Control.

 

11.1            Effect
on SARs. In the event of a Change in Control, notwithstanding any provision in the Plan or this Agreement to the contrary, the outstanding
SARs granted herein shall become immediately 100% vested and exercisable, provided that (i) the Participant has provided Continuous
Service to the Company/Subsidiary as of the consummation of the Change in Control, and (ii) the Participant did not initiate the
event that resulted in the occurrence of such Change in Control in a capacity other than as an officer or director of the Company.

 

11.2            Cash-out.
In the event of a Change in Control, the Committee may, in its discretion and upon at least ten (10) days’ advance notice to
the Participant, cancel any or all of the outstanding SARs granted under this Agreement and pay the Participant the cash Appreciation
Value of the SARs based upon the price per share of Stock received or to be received by other shareholders of the Company in the Change
in Control transaction. Notwithstanding the foregoing, if at the time of a Change in Control the Base Value of an outstanding SAR equals
or exceeds the price to be paid for a share of Stock in connection with the Change in Control, the Committee may cancel the SAR without
the payment of any consideration.

 

12.            Return
of SARs Payment. The Participant acknowledges and agrees that the SAR has been granted, in part, in anticipation of and to encourage
the Participant’s continued employment with the Company/Subsidiary and to provide the Participant with an additional incentive to
contribute to and benefit from the Company’s long-term growth, increased value of goodwill and profitability. Given the foregoing,
and notwithstanding any provision in this Agreement to the contrary, upon the Participant’s (a)  breach (or anticipated breach)
of the NDA, as determined in the Company’s sole and absolute discretion; (b) directly or indirectly rendering services to or
engagement with any individual or business which is competitive with IBC’s Business (as defined in the NDA) within twelve months
after Participant’s Separation of Service; (c) having been charged with an act punishable by imprisonment or having committed
an act of moral turpitude; or (d) other conduct by the Participant that
is detrimental to the business and/or reputation of the Company or its Subsidiaries as determined in
the sole and absolute discretion of the Company, then the Company shall, if it so elects, be entitled to:

 

(a)            Cancel
any unvested SARs granted to the Participant under this Agreement; require forfeiture of any vested, but not exercised SARs granted to
the Participant under the Plan; and/or require reimbursement by the Participant for any cash SAR payments received by the Participant
following exercise of SARs granted hereunder during the twelve months prior the Participant’s Separation of Service (the “Repayment”),
with Repayment to occur in accordance with applicable laws, regulations or Company policies that may be adopted and/or modified from time
to time. Any amounts due and owing by the Participant in connection with the Repayment shall be paid to the Company within 14 calendar
days after written notice from the Company to the Participant.

 

     

     

    

 

(b)            If
Repayment is not made within 14 calendar days after written notice from the Company to the Participant, the Company and/or the Participant
may file an arbitration as provided hereunder. The only claims subject to this arbitration procedure are claims regarding Repayment under
this Section 12. All arbitrations will be governed by the Company’s Open Door Policy except as stated otherwise herein. If
any conflict should arise between the provisions in the Open Door Policy and the provisions in this Agreement, this Agreement shall govern.
If an award is made in an arbitration filed under this Section 12, the arbitrator shall award attorney’s fees and costs to
the prevailing party.

 

(c)            Upon
the filing of an arbitration seeking Repayment under this Section 12, an arbitrator will be selected in accordance with the Open
Door Policy and such selection shall be submitted to the American Arbitration Association (“AAA”) within three business
days of receipt of the list of arbitrators. Within five business days of an arbitrator being appointed, the arbitrator shall provide the
parties with a briefing schedule to include an arbitration hearing within 30 days of the arbitrator’s appointment.

 

(d)            Within
five business days of the filing of the arbitration, a party must provide written notice to the other party and the AAA of its intention
to file a Motion for Summary Judgment (“MSJ”), in which case, the selected arbitrator will provide a briefing schedule
within five business days of appointment to include a MSJ must be filed within five business days, a response must be filed within five
business days, and any reply must be filed within five business days. The arbitrator will rule on the MSJ within 14 days of the reply,
if any. If the MSJ is denied, a new arbitrator will be appointed as provided under the Open Door Policy and a hearing will be held within
30 days of the new arbitrator’s selection.

 

(e)            By
accepting this Stock Appreciation Rights Award, the Participant agrees to be bound by the Return of SARs Payment as set forth herein,
as in effect and as modified from time to time by the Company in its sole and absolute discretion (including, without limitation, any
provision adopted and/or modified to comply with applicable laws and regulations). The Company will provide the Participant with at least
ten business days advance notice with regard to any modification of the arbitration provisions in Sections 12(c) and (d) and
any changes shall not be effective until the notice period has expired.

 

12.1            Forfeiture.
Notwithstanding any provision in this Agreement to the contrary, if the Participant ceases to be an employee due to Termination by the
Company/Subsidiary for Good Reason by the Company, or there is a substantial reduction in the Participant’s responsibilities or
duties as determined by the Company’s management, all SARs granted herein shall be forfeited effective as of the Separation from
Service date, or on the date when the Participant’s responsibilities or duties have been substantially reduced.

 

     

     

    

 

13.            Adjustments.
The SARs may be adjusted or terminated in any manner as contemplated by Section 3.03 of the Plan.

 

14.            Tax
Liability and Withholding. Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll
tax, or other tax-related withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and
remains the Participant’s responsibility and the Company (a) makes no representation or undertakings regarding the treatment
of any Tax-Related Items in connection with the grant, vesting, or exercise of the SARs granted herein, and (b) does not commit to
structure the SARs to reduce or eliminate the Participant’s liability for Tax-Related Items.

 

15.            Compliance
with Laws. The exercise of the SARs shall be subject to compliance by the Company and the Participant with all applicable laws. The
Participant may not exercise the SARs if such exercise would violate any applicable Federal or state securities laws or other laws or
regulations.

 

16.            Notices.
Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Trust Department at the
Company’s principal corporate offices. Any notice required to be delivered to the Participant under this Agreement shall be in writing
and addressed to the Participant at the Participant’s address as shown in the records of the Company. Either party may designate
another address in writing (or by such other method approved by the Company) from time to time.

 

17.            Governing
Law. This Agreement will be construed and interpreted in accordance with the laws of the State of Texas without regard to conflict
of law principles.

 

18.            Interpretation.
Any dispute regarding the interpretation of this Agreement shall be submitted by the Participant or the Company to the Committee for review.
The resolution of such dispute by the Committee shall be final and binding on the Participant and the Company.

 

19.            SARs
Subject to Plan. This Agreement is subject to the terms and provisions of the Plan as it may be amended from time to time, and the
Plan is hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term
or provision of the Plan, the applicable terms and provisions of the Plan shall govern and prevail.

 

20.            Successors
and Assigns. The Company may assign any of its rights under this Agreement, and this Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement shall
be binding upon the Participant and the Participant’s beneficiaries, executors, administrators and the person(s) to whom the
SARs may be transferred by will or the laws of descent and distribution.

 

21.            Severability.
The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any
other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to
the extent permitted by law.

 

     

     

    

 

22.            Discretionary
Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion.
The grant of the SARs in this Agreement does not create any contractual right or other right to receive any SARs or other Awards in the
future. Future Awards, if any, shall be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan
shall not constitute a change or impairment of the terms and conditions of the Participant’s employment with the Company.

 

23.            Amendment.
The Committee has the right to amend, alter, suspend, discontinue or cancel the SARs granted herein, prospectively or retroactively; provided,
that, no such amendment shall adversely affect the Participant’s material rights under this Agreement without the Participant’s
consent.

 

24.            No
Impact on Other Benefits. The value of the Participant’s SARs granted hereunder is not part of his or her normal or expected
compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.

 

25.            Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one
and the same instrument. Counterpart signature pages to this Agreement transmitted by electronic mail in portable document format
(.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the
same effect as physical delivery of the paper document bearing an original signature.

 

26.            Acceptance.
The Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. The Participant has read and understands the terms
and provisions thereof, and accepts the SARs subject to all of the terms and conditions of the Plan and this Agreement. The Participant
acknowledges that there may be adverse tax consequences upon exercise of the SARs and that the Participant should consult a tax advisor
prior to such exercise.

 

27.            Execution.
Participant agrees that this Agreement may be executed in hand-written form (“Manual Signature”) or through the use
of Electronic Signature, which electronic signatures, whether digital or encrypted, are intended to authenticate this writing and to have
the same force and effect as Manual Signatures for the purposes of validity, enforceability, and admissibility. “Electronic Signature”
means any electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a party with
the intent to sign such record. If Participant elects to execute this Agreement with an Electronic Signature, Participant agrees that
Participant and only Participant will perform the act of executing this Agreement with Participant’s Electronic Signature.

 

[signature
page follows]

 

     

     

    

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.

 

	 	INTERNATIONAL BANCSHARES CORPORATION

 

	  	By:	 
	 	 	 
	 	Name:
	 	 
	 	Title:

 

	 	[EMPLOYEE NAME]

 

	  	By:	
	 	 	 
	 	Name:

 

     

     

    

 

Exhibit A

 

Notice of Intent to Exercise Stock Appreciation
Right

 

2022 International Bancshares Corporation Stock
Appreciation Right Plan

 

	Date:	 	   	Printed Name:		 

 

	To:	International Bancshares Corporation (Attention: Trust Department – Executive Vice President)

 

1200 San Bernardo

 

Laredo, Texas 78042-1359

 

To whom it may concern,

 

Pursuant to Section 5.5 of the International
Bancshares Corporation Stock Appreciation Rights Award Agreement (the “Agreement”) dated ____________ _, 202__, this letter
is to inform you that I intend, but am not required, to exercise my Stock Appreciation Right(s) (“SAR(s)”) upon the expiration
of the SAR Hold Period and within the SAR Exercise Period, as each of those terms is defined in the Agreement.

 

Sincerely,

 

     

     

    

 

Exhibit B

 

NOTICE OF EXERCISE OF STOCK APPRECIATION RIGHT

 

2022 International Bancshares Corporation Stock
Appreciation Rights Plan

 

	Date:		 	Name:		 

 

	To:	International Bancshares Corporation (Attention: Trust Department
 – Executive Vice President)

 

1200 San Bernardo

 

Laredo, Texas 78042-1359

 

Information Concerning Stock Appreciation Right
Exercise

 

	I
    wish to exercise my vested Stock Appreciation Rights (check box x)
	 
	Date of SAR Agreement:	__________
	
    Number of SARs to be exercised:

     

    (See SAR agreement)
	
     ______________________

	
    Exercise price per SAR:

     

    (See SAR agreement)
	$_____________________
	Form of Payment: Cash	$ ____________ 

 

The
undersigned holder of a Stock Appreciation Right (the “SAR”) issued by International Bancshares Corporation, a Texas corporation
(the “Company”), evidenced by the above-referenced SAR Agreement, pursuant to which the undersigned is entitled receive, upon
exercise, a cash amount equal to the excess of (a) the Fair Market Value of a share of Stock on the date of exercise, over (b) the
Base Value (the “Appreciation Value”), hereby: (i) irrevocably exercises the SAR for the number of shares (the “Shares”)
of Stock designated above, and (ii) directs that the Appreciation Value for such Shares be paid and delivered to the undersigned
at the address set forth below. The undersigned acknowledges and agrees that the undersigned’s exercise of the SAR shall not be
effective unless and until the undersigned shall have fully complied with the exercise provisions of the SAR Agreement.

 

The undersigned additionally affirms and acknowledges
that the undersigned is in full compliance with and will fully comply with the undersigned’s Non-Disclosure and Non-Solicitation
Agreement, if applicable.

 

     

     

    

 

	 	
	 	 
	 	Signature of SAR Holder

 

	 	Printed Name:	
	 	Address:	

 

	 	 	

 

	 	Social Security Number:	 

 

	 	Effective Date:Exhibit 10.3

 

INTERNATIONAL BANCSHARES CORPORATION

2022 MANAGEMENT INCENTIVE PLAN

 

SECTION I

PURPOSE

 

The purpose of the International
Bancshares Corporation 2022 Management Incentive Plan (the “Plan”) is to promote and advance the interests of the Company
and its shareholders by enabling the Company to attract, retain and reward officers of the Company and its Affiliates. The Plan is an
amendment and restatement of the International Bancshares Corporation 2013 Management Incentive Plan and applies to Performance Periods
commencing on and after January 1, 2022.

 

SECTION II

DEFINITIONS

 

The terms below shall have
the following meanings:

 

A.            “Affiliate”
means any company controlled by, controlling or under common control with the Company as defined under rule 144 under the Securities
Act.

 

B.            “Board”
means the Board of Directors of the Company.

 

C.            “Change
of Control” means the occurrence of any of the following events:

 

a.            Any
 “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) other than the Company, any Affiliate
of the Company as of the Effective Date, any trustee or other fiduciary holding securities under an employee benefit plan of the Company,
or any company owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership
of the Stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities
acquired directly from the Company) representing more than 20% of the combined voting power of the Company’s then outstanding voting
securities; provided, however, a Change of Control shall not be deemed to occur solely because such person acquired beneficial ownership
of more than 20% of the combined voting power of the Company’s then outstanding voting securities as a result of the acquisition
of voting securities by the Company, which by reducing the number of voting securities outstanding, increases the proportional number
of shares beneficially owned by such person, provided that if a Change of Control would occur (but for the operation of this sentence)
as a result of the acquisition of voting securities by the Company, and after such share acquisition by the Company, such person becomes
the beneficial owner of any additional voting securities which increases the percentage of the then outstanding voting securities beneficially
owned by such person, then a Change of Control shall occur;

 

     

     

    

 

b.            During
any period of 24 consecutive months (not including any period prior to the Effective Date), individuals who at the beginning of such period
constitute the Board and any new director (other than a director designated by a person who has entered into an agreement with the Company
to effect a transaction described in subsection (a), (c) or (d) of this Section II(C)) whose election by the Board or nomination
for election by the Company’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for
any reason to constitute a majority of the Board;

 

c.            The
Company’s shareholders approve a merger, consolidation or reorganization of the Company with any other corporation, other than a
merger, consolidation or reorganization which would result in the shareholders of the Company immediately before such merger, consolidation
or reorganization, owning, directly or indirectly immediately following such merger, consolidation or reorganization, at least 50% of
the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger,
consolidation, or reorganization in substantially the same proportion as their ownership of the voting securities immediately before such
merger, consolidation, or reorganization; or

 

d.            The
Company’s shareholders approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets.

 

e.            Notwithstanding
anything in the Plan to the contrary, in the event any Incentive Payment is subject to Section 409A of the Code, the definition of
 “Change in Control” shall be interpreted to mean a “change in control event” within the meaning of Treasury Regulation
1.409A-3(i)(5) but only to the extent necessary to prevent such Incentive Payment from becoming subject to additional tax under Code
Section 409A.

 

D.            “Code”
means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

 

E.            “Committee”
means the Board’s Compensation Committee or a subcommittee thereof appointed by the Board to administer the Plan as provided herein
consisting of at least two Board members, each of whom is an Outside Director.

 

F.            “Company”
means International Bancshares Corporation, a Texas corporation, and any successor thereof.

 

G.            “Effective
Date” means the terms as defined by Section VII hereof.

 

H.            “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time.

 

     

     

    

 

I.            “Incentive
Payment” means a Traditional Incentive Payment, based upon the attainment of set Performance Targets for a Performance Period, or
a Merchant Banking Incentive Payment, based on the success of the Company’s merchant banking investments during the same Performance
Period. Collectively, they are referred to as “Incentive Payments,” and the terms of the Plan shall apply uniformly to both
unless specified otherwise.

 

J.            “Merchant
Banking Incentive Payment” means, with respect to each Participant, the amount he or she may receive as a payment for the applicable
Performance Period as determined by the Committee pursuant to the provisions of the Plan, the payment of which shall be contingent upon
the performance of the Company’s merchant banking investments and as determined by the Committee in its complete discretion.

 

K.            “Outside
Director” means as provided by the regulations promulgated under the Exchange Act, as amended from time to time.

 

L.            “Participant”
means any officer of the Company or an Affiliate who is designated by the Committee as eligible to receive an Incentive Payment under
the Plan.

 

M.            “Performance
Measures” means the specific measures that are used to evaluate the attainment of Performance Targets during a designated Performance
Period to determine if Traditional Incentive Payments, if any, shall be payable for the Performance Period, and the amount of such Traditional
Incentive Payments.

 

N.            “Performance
Period” means the period, not to be less than 12 months, specified by the Committee during which Incentive Payments may be earned.

 

O.            “Performance
Targets” mean the specific goals that must be attained during a Performance Period for Traditional Incentive Payments to be earned.

 

P.            “Plan”
means this 2022 International Bancshares Corporation Management Incentive Plan., as it may be amended from time to time.

 

Q.            “Stock”
means the common stock, par value $1.00 per share, issued by the Company.

 

R.            “Traditional
Performance Payment” means, with respect to each Participant, the amount that the Participant may receive for an applicable Performance
Period as determined by the Committee pursuant to the provisions of the Plan, the payment of which shall be contingent upon the attainment
of Performance Targets with respect to the Performance Period.

 

SECTION III

ADMINISTRATION

 

The Plan shall be administered
by the Committee. Subject to the express provisions of the Plan, the Committee shall have the full authority and absolute sole discretion
to construe, interpret, and administer the Plan, to promulgate, amend, and rescind rules and regulations relating to the Plan and
to make all other determinations deemed necessary or advisable in connection with the administration of the Plan, including, but not limited
to, determinations relating to eligibility, whether to make Incentive Payments, the terms of any such Incentive Payments, the time or
times when Performance Targets are established, the Performance Periods to which Incentive Payments relate, and the actual dollar amount
of any Incentive Payment. The determinations of the Committee pursuant to this authority shall be conclusive and binding on all parties
including without limitation the Participants, the Company and its shareholders.

 

     

     

    

 

SECTION IV

TRADITIONAL AND MERCHANT BANKING INCENTIVE PAYMENTS

 

A.            Traditional
Incentive Payments - Establishment of Performance Goals. Within 90 days after the beginning of each annual Performance Period, the
Committee shall, in its sole discretion and before the outcome is substantially certain, determine and establish the following criteria
in writing:

 

1.            The
applicable Performance Period;

 

2.            The
Performance Measures to be used for purposes of setting the annual Performance Targets that must be attained during the Performance Period
for Participants to receive Traditional Incentive Payments, and the calculation of those Traditional Incentive Payments, based upon the
relative level of attainment of the annual Performance Targets.

 

B.            Certification
and Payment of Traditional Incentive Payments. After the end of each Performance Period, the Committee shall:

 

1.            Certify
in writing, prior to the unconditional payment of any Traditional Incentive Payment, the level of attainment of the Performance Targets
for the Performance Period;

 

2.            Determine
the total amount available for Traditional Incentive Payments based on the attainment of such Performance Targets; and

 

3.            In
its sole discretion, adjust the size of, or eliminate, the total amount available for Traditional Incentive Payments for the Performance
Period; and in its sole discretion, determine the share, if any, of the available amount to be paid to each Participant as that Participant’s
Traditional Incentive Payment, and authorize payment of such amount.

 

C.            Merchant
Banking Incentive Payments. At the end of each Performance Period, which is the same Performance Period as designated above by the
Committee for Traditional Incentive Payments, the Committee shall evaluate the results of the Company’s merchant banking investments
for the Performance Period and determine at its sole discretion, whether Merchant Banking Incentive Payments shall be made for the Performance
Period. The Committee shall select the recipients of such Merchant Banking Incentive Payments and the amount of the individual Merchant
Banking Incentive Payments, which need not be uniform. In making its determinations, the Committee shall take into account the role, time
and effort devoted by each officer into the success of the Company’s merchant banking investments during the Performance Period.
Aggregate Merchant Banking Incentive Payments attributable to any one transaction during the Performance Period cannot exceed the lesser
of $15,000,000 or five percent of the transaction.

 

     

     

    

 

D.            Other
Applicable Rules.

 

1.            No
payment pursuant to this Plan shall be made to a Participant unless the Participant is employed by the Company or an Affiliate as of the
date of payment; provided, however, in the event of the Participant’s (i) retirement in accordance with the policies of the
Company or Affiliate which employs the Participant; (ii) death or (iii) termination of employment due to disability (as determined
in the discretion of the Committee), the Company shall pay the Participant (or his or her estate or the persons to whom the right to payment
under this Plan passes by will or the laws of descent and distribution) an Incentive Payment for the applicable Performance Period, at
such time as Participants are generally paid Incentive Payments for such Performance Period, in an amount equal to the product of (x) the
amount that the Committee determines that the Participant would have earned for the applicable Performance Period had the Participant
continued in the employ of the Company for the entirety of the Performance Period and (y) a fraction, the numerator of which is the
number of full months elapsed from the commencement of the applicable Performance Period through the Participant’s termination of
employment and the denominator of which is the total number of months in the applicable Performance Period.

 

2.            Incentive
Payments shall be subject to applicable federal, state and local withholding taxes and other applicable withholding in accordance with
the Company’s payroll practices as in effect from time to time.

 

3.            The
maximum amount that may become payable to any Participant in any calendar year as a Traditional Incentive Payment with respect to all
Performance Periods completed during such calendar year shall be the lesser of 2.5% of the Company’s total income before taxes for
the fiscal year or $3,000,000. The maximum amount which may become payable to any Participant in any calendar year as an additional Merchant
Banking Incentive Payment with respect to all Performance Periods completed during such calendar year is at the sole discretion of the
Committee but shall not exceed the aggregate cap on each transaction completed during the Performance Periods ending in such calendar
year.

 

4.            Incentive
Payments shall be payable in cash as soon as administratively practicable after the end of the calendar year in which the Performance
Period ends or is deemed to have ended pursuant to the provisions of Section VI(A), but in no event after the date that is two and
a half months after the end of the calendar year in which such Performance Period ends or is deemed to have ended pursuant to the provisions
of Section VI(A).

 

5.            Until
paid to a Participant, Incentive Payments may not be assigned, alienated, transferred or encumbered in any way.

 

SECTION V

AMENDMENT OR TERMINATION

 

The Committee may amend, modify
or terminate the Plan in any respect at any time without the consent of any Participant. Any such action may be taken without the approval
of the Company’s shareholders unless shareholder approval is required by applicable law. Termination of the Plan shall not affect
any Incentive Payments determined by the Committee to be earned prior to, but payable on or after, the date of termination, and any such
Incentive Payments shall continue to be subject to the terms of the Plan notwithstanding its termination.

 

     

     

    

 

SECTION VI

CHANGE IN CONTROL

 

Unless otherwise determined
by the Committee prior to a Change in Control, in the event of a Change in Control, the following provisions shall be applicable:

 

A.            The
Performance Periods then in effect for both Traditional Incentive Payments and Merchant Banking Incentive Payments shall be deemed to
have concluded immediately prior to the Change in Control of the Company. The total amount available to fund the related Traditional Incentive
Payments shall be that proportion of the amount (based upon the number of full and partial months in such Performance Period elapsed through
the date of the Company’s Change in Control) that would be available for funding the Traditional Incentive Payments, assuming the
Company had attained the Performance Targets at a level generating maximum funding for the applicable Performance Periods; and

 

B.            The
Committee, in its sole discretion, shall no later than immediately prior to the Change in Control approve the share of the available amount
payable to each Participant as that Participant’s Traditional Incentive Payment (provided that the entire available amount as calculated
pursuant to Section VI(A) shall be paid to Participants as Traditional Incentive Payments), and payments shall be made to each
Participant as soon thereafter as is practicable, but not later than 60 calendar days after the Change in Control.

 

C.            The
Committee, in its sole discretion, shall no later than immediately prior to the Change in Control determine if Merchant Banking Incentive
Payments shall be made in accordance with the Performance Period cap established in Section IV(C), and payment shall be made to each
Participant as soon thereafter as is practicable, but no later than 60 calendar days after the Change in Control.

 

SECTION VII

EFFECTIVE DATE OF THE PLAN

 

This International Bancshares
Company 2022 Management Incentive Plan shall be effective as of January 1, 2022 for Performance Periods commencing on or after such
date and shall remain in effect until terminated in accordance with Section V hereof. The Plan is an amendment and restatement of
the International Bancshares Company 2013 Management Incentive Plan, originally effective as of January 1, 2013.

 

SECTION VIII

GENERAL PROVISIONS

 

A.            The
establishment of the Plan shall not confer upon any Participant any legal or equitable right against the Company or any Affiliate, except
as expressly provided in the Plan.

 

B.            The
Plan shall be binding on successors and assigns of the Company. The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly
and agree to perform this Plan in the same manner and to the same extent that the Company would be required to perform it if no such succession
had taken place.

 

     

     

    

 

C.            The
cost of benefit payments from this Plan and the expenses of administering this Plan shall be borne by the Company.

 

D.            No
member of the Committee shall be liable for any action taken or determination made in good faith with respect to the Plan or any Incentive
Payment granted or paid under the Plan.

 

E.            The
Plan does not constitute an inducement or consideration for the employment of any Participant, nor is it a contract between the Company,
or any Affiliate, and any Participant. Participation in the Plan shall not give a Participant any right to be retained in the employ of
the Company or any Affiliate or to receive an Incentive Payment with respect to any Performance Period.

 

F.            The
adoption of this Plan shall not affect any other existing or future incentive or compensation plans for the Company. Nothing contained
in this Plan shall prevent the Board or Committee from adopting other or additional compensation arrangements, subject to shareholder
approval if such approval is required and such arrangements may be either generally applicable or applicable only in specific cases.

 

G.            To
the extent that state law shall not have been preempted by any laws of the United States, the Plan shall be governed, construed, regulated,
interpreted, and administered in accordance with the laws of the State of Texas without regard to principles of conflicts of law.

 

H.            This
Plan is intended to comply in all aspects with applicable law and regulations. In case any one or more of the provisions of this Plan
shall be held invalid, illegal or unenforceable in any respect under applicable law or regulation, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provision shall
be deemed null and void; however, to the extent permissible by law, any provision which could be deemed null and void shall first be construed,
interpreted or revised retroactively to permit this Plan to be construed in compliance with all applicable laws so as to carry out the
intent of this Plan.

 

I.            It
is the intent of the Company that neither the Plan nor any Incentive Payments hereunder be subject to Section 409A of the Code, and
the Plan is to be construed accordingly. Incentive Payments shall be paid in a lump sum cash amount as soon as practical, but not later
than March 15 of the year following the calendar year in which they are no longer subject to a “substantial risk of forfeiture”
(as defined and applied in Section 409A of the Code) (the “Applicable Period”). For purposes of the Plan, the terms “termination
of employment,” “employment termination” or terms of like kind are intended to mean “Separation from Service,”
as defined in Code Section 409A and Regulations thereunder. If any compensation or benefits provided by this Plan may result in the
application of Section 409A of the Code, the Company shall modify the Plan in the least restrictive manner necessary in order to
exclude such compensation from the definition of “deferred compensation” within the meaning of such Section 409A of the
Code or in order to comply with the provisions of Section 409A of the Code, other applicable provision(s) of the Code and/or
any rules, regulations or other regulatory guidance issued under such statutory provisions and with as little diminution in the value
of the Incentive Payments to the Participants as practicable.

 

     

     

    

 

J.            The
Plan is intended to constitute an “unfunded” plan for incentive compensation. Neither the Plan nor any Incentive Payment shall
create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant
or any other person. To the extent that any person acquires a right to receive Incentive Payments from the Company pursuant to the Plan,
such right shall be no greater than the right of any unsecured general creditor of the Company. Payments shall be made solely from the
general assets of the Company.

 

K.            Notwithstanding
any other provision of this Plan to the contrary, the Company shall not be required to make any payment under this Plan that would be
a golden parachute payment within the meaning of Section 18(k) of the Federal Deposit Insurance Act, as amended, that is prohibited
by applicable law.

 

L.            Notwithstanding
anything to the contrary expressed in the Plan, any provisions hereof that vary from or conflict with any applicable federal or state
securities law (including any regulations promulgated thereunder) shall be deemed to be modified to conform to and comply with such laws.

 

M.            If
the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting
requirement under the securities laws, a Participant shall reimburse the Company the amount of any benefit received under the Plan during
the three (3) year period preceding the date on which the Company is required to prepare the accounting restatement that is in excess
of the amount that would have been received under the accounting restatement as required by the Dodd-Frank Wall Street Reform and Consumer
Protection Act and the rules promulgated thereunder or as required by any other applicable rule or regulation.

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