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Exhibit 10.7    
    

 
 

EMPLOYMENT AGREEMENT    
    

        This employment agreement ("Agreement") is dated as of June 30, 1999, and is entered into by and between DON E. COSBY ("Employee") and STATE NATIONAL
BANCSHARES, INC., a Texas corporation ("Employer"). This Agreement is an amendment and restatement of the employment agreement previously entered into between the Employee and the Employer and
completely supersedes and replaces such prior agreement. As an inducement to render services and superior performance to Employer, Employee and Employer agree as follows: 

        1.    Employment.    Upon the terms and subject to the conditions contained in this Agreement, Employee agrees to
provide full-time services for Employer during the term of this Agreement. Employee agrees to devote his best efforts to the business of Employer, and shall perform his duties in a
diligent, trustworthy, and business-like manner, all for the purpose of advancing the business of Employer. 

        2.    Duties.    The duties of Employee shall be those duties which can reasonably be expected to be and have been
performed by a person with the title of Executive Vice-President and Chief Financial Officer of a major financial organization, and to which Employer and Employee may hereafter mutually
agree in writing. Employee shall report directly to the Chief Executive Officer. Employee's duties may, from time to time, be changed or modified at the discretion of the Board, subject to the terms
of this Agreement. 

        3.    Salary and Benefits.    

        (a)    Base Salary.    Employer shall, during the term of this Agreement, pay Employee an annual base salary of
$175,000.00 beginning July 1, 1999. Such salary shall be paid in semi-monthly
installments less applicable withholding and salary deductions. Base salary shall be reviewed and adjusted at least annually. 

        (b)    Bonus.    Employee shall be eligible to receive an annual bonus for each year during the term of this Agreement
as shall be determined by the Board. 

        (c)    Reimbursement of Expenses.    Employer shall reimburse Employee for all out-of-pocket
expenses incurred by Employee in the course of his duties, in accordance with normal policies. Employee shall be required to submit to Employer appropriate documentation supporting such
out-of-pocket expenses as a prerequisite to reimbursement in accordance with normal policies. 

        (d)    Employee Benefits.    Employee shall be entitled to participate in the employee benefit programs generally
available to employees of Employer, and to all normal perquisites provided to senior executive officers of Employer and all such benefits and perquisites shall be consistent with those customarily
received. 

        (e)    Automobile Allowance.    During the term of this Agreement, Employer shall provide to Employee an automobile or
pay the Employee an automobile allowance of at least $600.00 per month. Except for this automobile allowance, the Employer shall not be obligated to pay any other expenditure with respect to the
ownership, operations, insurance or maintenance of the Employee's automobile. The Employee shall procure and maintain in force automobile liability insurance on such automobile with comprehensive
coverage with extended coverage, collision coverage for the actual cash value of the vehicle with no more than a Five Hundred and No/100 Dollar ($500) deductible and for bodily injury, death, or
property damage in limits no less than Three Hundred Thousand and No/100 Dollars ($300,000) for property damage and Three Hundred Thousand and No/100 Dollars ($300,000) for  public liability. 

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        (f)    Benefits Not in Lieu of Compensation.    No benefit or perquisite provided to Employee shall be deemed to be in
lieu of base salary or other compensation. 

        4.    Term of Agreement.    This Agreement shall become effective and binding immediately upon its execution, and
shall remain in effect until July 1, 2002, or until later termination if this Agreement is renewed under this Section 4. After July 1, 2002, this Agreement shall be automatically
and continually renewed for an eighteen (18) month term at the end of each eighteen (18) month term, unless either Employer or Employee provides written notice of election not to renew
at least ninety (90) days before the applicable renewal date. If Employer elects not to renew the term of this Agreement at any time
after July 1, 2002, Employer shall pay as a service award to Employee, on or before the first day of the last eighteen (18) month period of this Agreement (including both the initial
term and all renewal terms), the benefits described in Section 6 of this Agreement. 

        5.    General Termination Provisions.    If either Employer or Employee terminates this Agreement under the provisions
of this Section 5, Employer will be liable to Employee for all payments (if any) as described in Section 5, as follows: 

        (a)    Termination by Employer.    The Board may terminate this Agreement under this Section 5 only upon the
occurrence of one or more of the following events, and under the conditions described below. 

        (i)    Disability.    If, during the term of this Agreement, Employee's employment terminates due to Disability,
Employer shall pay to Employee all amounts payable under Section 3(a) above during the remaining term of this Agreement (as provided in Section 4 above). From and after the date of
termination of this Agreement due to Disability, Employer shall pay to Employee until his death, an amount equal to 50% of the amount paid to Employee under Section 3(a) during the last
calendar year of the term of this Agreement. All amounts payable under this Section 5(a) shall be paid in semi-monthly installments, less applicable withholdings for income taxes
and employment taxes. 

        (ii)   Termination for Cause.    Employer may discharge Employee for Cause, and, upon such termination, this
Agreement shall terminate immediately and Employer shall have no further obligation to make payments under this Agreement which have not already become payable, but have not yet been paid. 

        (b)    Termination by Employee.    Employee may voluntarily terminate this Agreement at any time following its
execution. If Employee, however, shall voluntarily terminate his employment for other than Good Reason, this Agreement shall terminate immediately and Employer shall have no further obligation to make
payments under this Agreement which have not already become payable, but have not yet been paid. Employee may terminate this Agreement for Good Reason under the provisions of Section 6. 

        6.    Special Termination Provisions.    If Employer or Employee terminate this Agreement under the provisions of this
Section 6, Employer shall be liable to Employee for all payments as described in this Section 6, as follows: 

        (a)    Termination Without Cause and Termination for Good Reason.    If Employer shall discharge Employee without
Cause or not renew the term of this Agreement at any time after July 1, 2002, or if Employee shall terminate his employment for Good Reason, then Employer shall pay to Employee in one lump sum
within five (5) days of any such event, the following benefit: 

        (i)    a
monetary award payable in one lump sum in recognition of Employee's past service to Employer equal to (x) 125% of the Employee's base salary in effect at the
time of termination or discharge combined with the greater of the bonus paid to the Employee for the 

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previous
year or the maximum bonus that would be paid under Employer's bonus award methodology for the year in which the termination or discharge of Employee occurred if Employee was employed at year
end, multiplied by (y) three (all of which is further shown by the formula on Exhibit A attached hereto). 

        7.    Excess Payments.    Notwithstanding any provision of this Agreement to the contrary, the termination and
severance payments and non-cash benefits to which Employee is entitled (whether pursuant to the terms of this Agreement or otherwise), shall be reduced (unless prior shareholder approval
that meets the requirements of Section 280G(b)(5)(B) of the Internal Revenue Code of 1986, as amended ("Code") is obtained) to the maximum amount that can be paid to Employee so that the
aggregate present value of all payments that can be considered "parachute payments" (as defined in Section 280G of the Code), to which Employee is entitled does not equal or exceed 300% of
Employee's "annualized includible compensation for the base period" as defined in the Code. In determining the amount of Employee's termination and severance payment and non-cash benefits
pursuant to this Agreement, Employer shall first take into account any other payments or benefits to which Employee is entitled under any other agreement or understanding, which payments or benefits
constitute parachute payments under the Code. 

        8.    Definitions.    

        (a)    Board.    "Board" shall mean the Board of Directors of the Employer. 

        (b)    Cause.    Termination of employment for "Cause" shall mean that, prior to any termination pursuant to
Section 5(a)(ii) hereof, Employee shall have committed: 

        (i)    an
intentional act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with Employer; 

        (ii)   intentional
wrongful damage to property of Employer; 

        (iii)  intentional
wrongful disclosure of trade secrets of Employer; 

        (iv)  willful
violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order; or 

        (v)   intentional
breach of corporate fiduciary duty involving personal profit. 

For
the purposes of this Agreement, no act, or failure to act, on the part of the Employee shall be deemed "intentional" unless done, or omitted to be done, by the Employee not in good faith and
without reasonable belief that his action or omission was in the best interest of Employer. Notwithstanding the foregoing the Employee shall not be deemed to have been terminated for Cause hereunder
unless and until there shall have been delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the members of the Board then in office
at a meeting of the Board called and held for such purpose (after reasonable notice to the Employee and an opportunity for the Employee, together with his counsel to be heard before the Board),
finding that in the good faith opinion of the Board the Employee had committed an act set forth above in this Section 8(b) and specifying the particulars thereof in detail. Nothing herein shall
limit the right of the Employee or his beneficiaries to contest the validity or propriety of any such determination. 

        (c)    Disability.    "Disability" shall occur if Employee is incapacitated and absent from his duties hereunder on a
full-time basis for four (4) consecutive months or for at least one hundred eighty (180) days during any twelve (12) month period. Employee shall be entitled to the
disability benefits generally available to employees of Employer, and the disability payment provided for in this Section 5(a) shall be apart from and in addition to any disability benefits
generally available to employees of Employer. 

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        (d)    Good Reason.    "Good Reason" shall mean: 

        (i)    Without
his express written consent, the assignment to Employee of any duties inconsistent with his positions, duties, responsibilities and status with Employer as of
July 1, 1999, or a change in his reporting responsibilities, titles or offices as in effect on July 1, 1999, or any removal of Employee from or any failures to re-elect
Employee to any of such positions, except in connection with the termination of his employment for Cause or as a result of his Disability or death, or termination by Employee other than for Good
Reason; 

        (ii)   A
significant adverse change in the nature or scope of the authorities, powers, functions or duties attached to Employee's position with Employer, a reduction in the
aggregate of Base Salary and bonus
from the Employer, or the termination of the Employee's rights to any employee benefit plan, or the reduction in scope or value thereof without the prior written consent of the Employee, any of which
is not remedied within ten (10) calendar days after receipt by Employer of written notice from the Employee of such change, reduction or termination, as the case may be; 

        (iii)  A
determination by the Employee made in good faith that he has been rendered substantially unable to carry out, or has been substantially hindered in the performance
of, any of the authorities, powers, functions, responsibilities or duties attached to his position, which situation is not remedied within thirty (30) calendar days after receipt by the
Employer of written notice from the Employee of such determination; 

        (iv)  The
Employer shall relocate its principal executive offices or require Employee to have as his principal location of work any location which is in excess of fifty
(50) miles from the current location thereof or to travel away from his office in the course of discharging his responsibilities or duties hereunder more than thirty (30) consecutive
calendar days or an aggregate of more than one hundred twenty (120) calendar days in any consecutive three hundred sixty-five (365) calendar-day period without in
either case his prior consent; 

        (v)   Failure
by Employer to 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 Employer, by agreement in form and substance satisfactory to Employee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that Employer
would be required to perform it if no such succession had taken place; or 

        (vi)  Any
material breach of this Agreement by Employer. 

        9.    Governing Law.    This Agreement is made and entered into in the State of Texas, and the laws of Texas shall
govern its validity and interpretation in the performance by the parties of their respective duties and obligations. 

        10.    Entire Agreement.    This Agreement constitutes the entire agreement between the parties concerning the
employment of Employee, and there are no representations, warranties or commitments, other than those in writing executed by all of the parties. This is an integrated agreement. 

        11.    Indemnification.    Following the date of this Agreement, Employer shall not take any action to amend
Employer's Articles of Incorporation, or to amend any articles of incorporation or association of any corporation or bank, respectively, that is an affiliate of Employer, if such amendment would
adversely affect Employee's right to receive indemnification from such corporation or bank. 

        12.    Arbitration.    Any dispute, controversy, or claim arising out of or relating to this Agreement or breach
thereof, or arising out of or relating in any way to the employment of the Employee or the termination thereof, shall be submitted to arbitration in accordance with the Voluntary Labor Arbitration
Rules of the American Arbitration Association. Judgment upon the award rendered by the 

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arbitrator
may be entered in any court of competent jurisdiction. In reaching his or her decision, the arbitrator shall have no authority to ignore, change, modify, add to or delete from any provision
of this Agreement, but instead is limited to interpreting this Agreement. In the case of any arbitration or subsequent judicial proceeding arising after Employee's discharge or termination, Employee
shall be awarded his or her costs, including attorneys' fees. 

        13.    Assistance in Litigation.    Employee shall make himself available, upon the request of Employer, to testify or
otherwise assist in litigation, arbitration, or other disputes involving Employer, or any of the directors, officers, employees, subsidiaries, or parent corporations of either, at no additional cost
during the term of this Agreement and at any time following the termination of this Agreement; provided, however, that following termination of this Agreement Employer shall be paid One Thousand and
No/100 Dollars ($1,000) per day or portion thereof, plus all associated out-of-pocket expenses for complying with this Section 14. 

        14.    Notices.    Any notice or communication required or permitted to be given to the parties shall be delivered
personally or sent by United States registered or certified mail, postage prepaid and return receipt requested, and addressed or delivered as follows, or to such other address as the party addressed
may have substituted by notice pursuant to this Section. 

        (a)   If
to Employer: 

State
National Bancshares, Inc.

P.O. Box 5240

Lubbock, Texas 79408

ATTENTION: Tom C. Nichols 

        (b)   If
to Employee: 

Don
E. Cosby

4713 96th Street

Lubbock, Texas 79424 

        15.    Nondisclosure of Confidential Information.    Employee agrees that during the term of this Agreement and
thereafter, Employee will not disclose any information or data concerning the business or customers of Employer that is disclosed to Employee or acquired by Employee in confidence at any time during
the period of his employment. 

        16.    Binding Agreement.    This Agreement shall inure to the benefit of and be enforceable by Employee's personal or
legal representatives, executors, administrators, successors, heirs, distributees, devises and legatees. If Employee should die while any amounts would still be payable to him hereunder if he had
continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to his devisee, legatee, or other designee, or, if there be no such
designee, to his estate. 

        17.    No Mitigation of Amounts Payable Hereunder.    Employee shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Agreement be reduced by any compensation earned by Employee as
the result of employment by another employer after the date of termination, or otherwise. 

        18.    Captions.    The captions of this Agreement are inserted for convenience and are not part of the Agreement. 

        19.    Severability.    In case any one or more of the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal, or unenforceable in any other respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement. This Agreement shall be 

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construed
as if such invalid, illegal or unenforceable provision had never been a part of the Agreement and there shall be deemed substituted therefor such other provision as will most nearly
accomplish the intent of the parties to the extent permitted by the applicable law. In case this Agreement, or anyone or more of its provisions, shall be held to be invalid, illegal or unenforceable
within any governmental jurisdiction or subdivision. 

        20.    Counterparts.    This Agreement may be executed simultaneously in two or more counterparts, each of which shall
be deemed an original, but all of which shall together constitute one in the same Agreement. 

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DATED:
June 30, 1999 

	 	 	EMPLOYEE:
	

 	
 	

/s/  DON E. COSBY      
 Don E. Cosby
	

 	
 	

STATE NATIONAL BANCSHARES, INC.
	

 	
 	

By:	

/s/  TOM C. NICHOLS      
 Tom C. Nichols, Chairman and CEO
	

 	
 	

By:	

/s/  MARK MERLO      
 Mark Merlo,

Member of Compensation Committee
	

 	
 	

By:	

/s/  JACK CARDWELL      
 Jack Cardwell

Member of Compensation Committee

 
 

EXHIBIT A    
    

125% × (base
salary in effect + greater

of bonus paid for previous year or maximum bonus for current year) × 3 

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Exhibit 10.7

EMPLOYMENT AGREEMENT

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Exhibit 10.8    
    

 
 

EMPLOYMENT AND NON COMPETE AGREEMENT    
    

        THIS AGREEMENT made on the 23rd day of April, 2004, between STATE NATIONAL BANCSHARES, INC., a Texas corporation and registered bank holding
company with its principal offices at 1617 Broadway, P.O. Box 5240, Lubbock, Texas (the "Employer"), and GARY G. JOHNSON, who resides at 2603 Brookridge Drive, Hurst, Texas (the "Employee"). 

        1.    TERM OF EMPLOYMENT.    

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

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

        2.    DUTIES OF EMPLOYEE.    

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

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

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

        3.    COMPENSATION.    

        3.01.    Basic Compensation.    As compensation for services rendered under this Agreement, Employee shall be entitled
to receive from the Bank a salary equivalent to One Hundred Fifty Thousand Dollars ($150,000) per year (which annual amount shall be pro rated for any partial year), payable in equal semimonthly
installments of Six Thousand Two Hundred Fifty Dollars ($6,250.00), payable on such days as the Bank normally pays its employees, prorated for any partial employment period. 

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

        3.03.    Stock Options.    Upon execution of this Agreement, Employer shall grant to Employee, non qualified stock
options to purchase up to 30,000 shares of Employer's voting common stock at an 

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exercise
price equal to $18.50 per share. One-half (or 15,000 shares) of such options shall vest on the first anniversary, and one-half (or 15,000 shares) of such options shall
vest on the second anniversary date of the grant and shall be exercisable over a period of five years from the date of grant. Such options shall be subject to and governed by the terms of the State
National Bancshares, Inc. Employee Stock Option Plan 

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

        3.05.    Bank Automobile.    During the Term of this Agreement, Employee shall continue to have the use of the
automobile provided to him by Mercantile Bank Texas, and the Employee shall be reimbursed for his expenses for insurance, fuel, and repairs relate to the automobile until Employee desires to replace
such automobile. At that time, Employee shall have the option to purchase his Bank automobile from the Bank for an amount equal to the greater of (i) the book value of the automobile or
(ii) the average of the retail and wholesale "Black Book" values. 

        3.06.    Supplemental Executive Retirement Plan ("SERP").    Employee shall be entitled to participate in Employer's
SERP beginning on the first day of the Primary Term of Employee's employment with Employer. 

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

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

        3.09.    Guaranty of Payment and Performance.    Notwithstanding any provision of this Agreement to the contrary, if,
when and to the extent the Bank is unable or refuses to pay to the Employee any compensation due him under this Agreement or to provide to the Employee any benefit or entitlement granted to him under
this Agreement, Employer hereby agrees that it will pay any such compensation and provide any such benefit or entitlement. 

        4.    NON COMPETITION AND NON DISCLOSURE.    

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

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

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

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

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

        within
Tarrant County or any county contiguous to Tarrant County; or 

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

        Except
as provided in Sections 5.01 and 5.03 of this Agreement, Employer shall pay or cause the Bank to pay Employee a payment equal to Two Hundred Twenty-Five Thousand,
Dollars ($225,000) which shall be payable in thirty-six equal semi-monthly payments of Six Thousand Two Hundred Fifty Dollars ($6,250.00) over a period of eighteen months from
the last day of Employee's employment with Bank. 

        4.02    Judicial Limitation.    If any court of competent jurisdiction should determine that any term or terms of non
compete covenants are too broad in terms of time, geographic area, lines of commerce or otherwise, such court shall modify and revise any such term or terms so that they comply with applicable law;
provided, notwithstanding any such modification or revision the payments stated in
Section 4.01(b) shall not be reduced or modified in any manner other than a reduction in terms of time in which case the payments shall be reduced proportionately. 

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

        Employee
agrees that he will not: (i) use, at any time, any Proprietary Information for his own benefit or for the benefit of any other person, entity, or corporation; or
(ii) disclose, directly or indirectly, any Proprietary Information to any person who is not an employee of the Bank, at any time following the Term of this Agreement; or (iii) use or
disclose, directly or indirectly, any Proprietary Information in connection with any business opportunity pursued or engaged in by Employee following the Term of this Agreement. .Notwithstanding
anything to the contrary stated in this Section 4.03, after the expiration of the eighteen (18) month term described in Section 4.01(a), Proprietary Information shall not be
deemed to include (A) the identities of the Bank's existing and prospective customers or clients, including names, addresses, credit status, and pricing levels for customers and clients with
whom the Employee had a business or banking relationship on the day before the commencement of the Primary Term as defined in Section 1.01; (B) the borrowing habits and customs of the
Bank's existing and prospective customers or clients with whom the Employee had a business or banking relationship on the day before the commencement of the Primary Term as defined in
Section 1.01, (C) the identities of and special skills possessed by the Bank's employees previously employed by Mercantile Bank Texas, or (D) the identities of and pricing and
cost information about the Bank's suppliers and vendors that were suppliers to or vendors of Mercantile Bank Texas. 

        4.04    Return of Bank Property.    Employee acknowledges that all equipment, keys, passcodes or passwords, memoranda,
notes, records, reports, manuals, drawings, books, papers, letters, formulas, client and customer lists, loan files or information contracts, software programs, instruction books, catalogs,
information and records, technical manuals and documentation, drafts of instructions, guides and manuals, maintenance manuals, and other documentation (whether in draft or final form), and 

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other
sales information and aids relating to the Bank's business, and any and all other documents containing Proprietary Information furnished to Employee by any representative of the Bank or
otherwise acquired or developed by Employee in connection with his employment with the Bank (collectively, "Recipient Materials") shall at all times be the property of the Bank. 

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

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

        5.    TERMINATION.    

        5.01.    Termination by Employer for Cause.    Employer may, at its option, terminate this Agreement by giving written
notice of termination for "cause" to Employee if Employee (i) willfully breaches the terms of this Agreement and fails to cure such breach within thirty (30) days following receipt of
written notice of such breach from Employer, which notice specifically identifies the manner of the breach, (ii) violates the provisions of Section 4 of this Agreement, or
(iii) commits such acts of personal dishonesty, breach of fiduciary duty involving personal profit, willful violation of any law, rule or regulation (other than minor traffic violations or
similar offenses), fraud or misrepresentation as would prevent the effective performance of his duties and result in injury to Employer's business. Upon termination of this Agreement by Employer for
"cause", Employee shall be entitled only to such compensation accrued hereunder at the time of termination and Employee shall continue to be bound by the non competition and non disclosure obligations
contained in Article 4 of this Agreement. 

        5.02.    Termination by Employer Other Than for Cause.    In the event Employee's service with Employer is terminated
by Employer other than for "cause" as defined in Section 5.01, Employer shall pay to Employee in full satisfaction of Employer's remaining financial obligations under this Agreement the greater
of (i) the Basic Compensation as described in Section 3.01 during the remainder of the Primary Term of this Agreement or (ii) the non compete payment described in
Section 4.01. Employee shall continue to be bound by the non competition and non disclosure obligations contained in Article 4 of this Agreement during the period Employer makes such
payments. 

        5.03.    Voluntary Termination by Employee.    In the event Employee's service with Employer is terminated by
Employee, Employee shall be entitled only to compensation accrued hereunder at the time of termination and Employee shall continue to be bound by the non competition and non disclosure obligations
contained in Article 4 of this Agreement. 

        5.04    Change in Control for Employer.    This Agreement shall not terminate on any "Change in Control" which occurs
with respect to Employer during the Term of this Agreement, Notwithstanding the preceding sentence however, after thirty (30) days prior written notice to the Employee, Employer or its
successor shall have the option to terminate this Agreement effective as of any Change in Control (i) upon the payment to the Employee of a lump sum amount equal to the Employee's Basic
Compensation through the end of the Primary Term, and (ii) the release of the Employee from his non-competition obligations contained in Article 4 of this Agreement. The
Employee shall continue to be bound by the nondisclosure obligations contained in Section 4.03 hereof. 

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

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

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

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

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

        6.    GENERAL PROVISIONS.    

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

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

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

        6.04.    Arbitration.    Employer and the Employee recognize that in the event a dispute should arise between them
concerning the interpretation or implementation of this Agreement, lengthy and expensive litigation will not afford a practical resolution of the issues within a reasonable time period. Consequently,
each party agrees that all disputes, disagreements, and questions of interpretation concerning this Agreement are to be submitted for resolution to the American Arbitration Association ("AAA") in
Lubbock County, Texas. Either Employer or the Employee may initiate an arbitration proceeding at any time by giving notice to the other in accordance with the AAA's rules. The arbitrator shall not
have the authority to add to, detract from, or modify any provision hereof nor to award punitive damages to any injured party. The arbitrator shall have the authority to order pay-back,
severance compensation, vesting of options (or cash compensation in lieu of vesting of options), reimbursement of costs, including those incurred to enforce this Agreement and interest thereon. The
question of whether Employer or the Employee shall be liable for the costs incurred because of the arbitration shall also be decided by the arbitrator. The AAA shall designate a single arbitrator to
conduct the proceeding, but Employer and the Employee may, as a matter of right, require the substitution of a different arbitrator chosen by the AAA. This right of substitution may be exercised 

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only
once by the Employer and the Employee. The arbitrator shall not be bound by the rules of evidence and procedure of the courts of Texas, but shall be bound by the substantive law applicable to
this Agreement. The decision of the arbitrator, absent fraud, duress, incompetence, or gross and obvious error of fact, shall be final and binding upon the Employer and the Employee and shall be
construed to prevent Employer from asking a court of competent jurisdiction to enter appropriate equitable relief to enjoin a violation of the covenants of Section 4. 

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

        EXECUTED on the day and year first above written. 

	EMPLOYER:	 	 	 
	
STATE NATIONAL BANCSHARES, INC.	
 	

 	

 
	

By:	

/s/  TOM NICHOLS      
 Tom Nichols, Chairman	
 	

 	

 
	
EMPLOYEE:	
 	

 	

 
	

/s/  GARY G. JOHNSON      
 Gary G. Johnson	
 	

 	

 

6

QuickLinks

Exhibit 10.8

EMPLOYMENT AND NON COMPETE AGREEMENT

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