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Exhibit 10.1    
    

 
 

STATE NATIONAL BANCSHARES, INC.    
    
    STOCK OPTION PLAN    
    

Scope and Purpose of Plan  

        The purpose of the Plan is to provide an incentive for key employees of the Company and the Bank to remain in the service of the Company or the Bank, to extend to
them the opportunity to acquire a proprietary interest in the Company that they will apply their best efforts for the benefit of the Company and the Bank, and to aid the Company and the Bank in
attracting and retaining key personnel. 

SECTION 1.    Definitions.    

        1.1.  "Act" shall mean the Securities Exchange Act of 1934, as amended or any similar or superseding statute on statutes. 

        1.2.  "Affiliates" shall mean (a) any corporation, other than the Company, in an unbroken chain of corporations ending
with the Company if each of the corporations, other than the Company, owns stock possessing 25 percent (25%) or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain and (b) any corporation, other than the Company, in an unbroken chain of corporations beginning with the Company or the Bank if each of the corporations, other
than the last corporation in the unbroken chain, owns stock possessing 25 percent (25%) or more of the total combined voting power of all classes of stock in one of the other corporations in
such chain. 

        1.3.  "Agreement" shall mean the written agreement between the Company and an Optionee evidencing the Option granted by the
Company. 

        1.4.  "Bank" shall mean any Affiliate that qualifies as either a national or state banking association validly existing under
either the laws of the United States or applicable state law, respectively. 

        1.5.  "Board of Directors" shall mean the board of directors of the Company. 

        1.6.  "Code" shall mean the Internal Revenue Code of 1986, as amended. 

        1.7.  "Committee" shall mean the committee appointed pursuant to Section 3 of the Plan by the Board of Directors to
administer this Plan. 

        1.8.  "Company" shall mean State National Bancshares, Inc., a Texas Corporation. 

        1.9.  "Disability" shall mean a total and permanent disability as defined in the Company's current long term disability plan,
or if the Company has no long term disability plan in effect at the time of the Optionee's disability, as determined by the Committee in its sole discretion. 

        1.10. "Eligible Individuals" shall mean those employees designated by the Committee as key employees of the Company or the
Bank. 

        1.11. "Fair Market Value" shall mean: 

        (a)   If
shares of Stock of the same class are listed or admitted to unlisted trading privileges on any national or regional securities exchange or sales prices for such
shares in the over-the-counter market are reported by the National Association of Securities Dealers, Inc. Automated Quotations, Inc. ("NASDAQ") National Market
System at the date of determining the Fair Market Value, the mean between the highest and lowest quoted selling prices on the date in question, or if there were no sales on the date in question, the
weighted average of the means between the highest and lowest sales on the nearest date before and the nearest date after the date in question; or 

        (b)   If
shares of Stock of the same class shall not be listed or admitted to unlisted trading privileges as provided in Section 1.1l(a) and sales prices for such
shares shall not be reported by the NASDAQ National Market System as provided in Section 1.11(a), and bid and asked prices therefor in the over-the-counter market shall
be reported by NASDAQ (or, if not so reported, by the National Quotation Bureau Incorporated) at the date of determining the Fair Market Value, the mean of the closing bid and asked prices on the date
in question, or if none, by taking a weighted average of the means between the bid and asked prices on the nearest trading date before and the nearest trading date after the date in question, if both
such dates are within a reasonable period; and 

        (c)   If
shares of Stock of the same class shall not be listed or admitted to unlisted trading privileges as provided in Section 1.1l(a) and sales prices or bid and
asked prices for such shares shall not be reported by NASDAQ (or the National Quotation Bureau Incorporated) as provided in Section 1.11(a) or Section l.11(b) at the date of determining
the Fair Market Value, the value determined in good faith by the Board of Directors. 

        1.12. "Options" shall mean stock options granted under this Plan that do not satisfy the requirements of section 422
of the Code. 

        1.13. "Optionee" shall mean an Eligible Individual to whom an Option has been granted. 

        1.14. "Plan" shall mean the State National Bancshares, Inc. Stock Option Plan. 

        1.15. "Securities Act" shall mean the Securities Act of 1933, as amended, or any similar or superseding statute or statutes. 

        1.16. "Stock" shall mean the Company's authorized common stock, $1.00 par value, together with any other securities that may
be received upon the exercise of Options granted under the Plan. 

SECTION 2.    Stock and Maximum Number of Shares Subject to the Plan.    

        2.1.    Description of Stock and Maximum Shares Allocated.    The
Stock which may be issued upon the exercise of an Option may either be unissued or reacquired shares of Stock, as the Board of Directors may, in its sole and absolute discretion, from time to time
determine. 

        Subject
to the adjustments provided in Section 6.5, the aggregate number of shares of Stock to be issued pursuant to the exercise of all Options granted under the Plan may equal
but shall not exceed ten percent (10%) of the number of the then outstanding shares of Stock. 

        2.2.    Restoration of Unpurchased Shares.    If an Option granted
under the Plan expires or terminates for any reason during the term of this Plan and prior to the exercise of the Option in full, the shares of Stock subject to, but not issued under, such Option
shall again be available for Options granted under the Plan after such shares become available again. 

SECTION 3.    Administration of the Plan.    

        3.1.    Committee.    The Plan shall be administered by the Committee.
The Committee shall consist of not less than three individuals appointed by the Board of Directors. In the event that the Stock is registered under Section 12 of the Act, all members of the
Committee shall be "disinterested persons," as defined in Rule 16b-3(d)(3) promulgated under the Act which requires that members of the Committee shall not have received Options or
other equity securities under any plan of the Company, or its affiliates while they are serving as members of the Committee and must not have received Options or other equity securities under any plan
of the Company, or its affiliates within one (1) year prior to their appointment to the Committee. 

        3.2.    Duration, Removal, Etc.    The members of the Committee shall
serve at the pleasure of the Board of Directors, which shall have the power, at any time and from time to time, to remove members from the Committee or to add members to the Committee. Vacancies on
the Committee, however caused, shall be filled by action of the Board of Directors. 

        3.3.    Meetings and Actions of Committee.    The Committee shall
elect one of its members as its Chairman and shall hold its meetings at such times and places as it may determine. All decisions and determinations of the Committee shall be made by the majority vote
or decision of all of its members present at a meeting; provided, however, that any decision or determination reduced to writing and signed by all of the members of the Committee shall be as fully
effective as if it had been made at a meeting duly called and held. The Committee may make any rules and regulations for the conduct of its business that are not inconsistent with the provisions of
this Plan and with the bylaws of the Company or the Bank as it may deem advisable. 

        3.4.    Committee's Powers.    Subject to the express provisions of
this Plan, the Committee shall have the authority, in its sole and absolute discretion, (a) to adopt, amend, and rescind administrative and interpretive rules and regulations relating to the
Plan; (b) to determine the terms and provisions of the respective Agreements (which need not be identical), including provisions defining or otherwise relating to (i) subject to
Section 6, the term and the period or periods and extent of exercisability of the Options, (ii) the extent to which the transferability of shares of Stock issued upon exercise of Options
is restricted, (iii) the effect of termination of employment upon the exercisability of the Options, and (iv) the effect of approved leaves of absence (consistent with any applicable
regulations of the Internal Revenue Service); (c) to accelerate the time of exercisability of any Option that has been granted; (d) to construe the terms of any Agreement and the Plan;
and (e) to make all other determinations and perform all other acts necessary or advisable for administering the Plan, including the delegation of such ministerial acts and responsibilities as
the Committee deems appropriate. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Agreement in the manner and to the extent it shall
deem expedient to carry it into effect, and it shall be the sole and final judge of such expediency. The Committee shall have full discretion to make all determinations on the matters referred to in
this Paragraph such determinations shall be final, binding and conclusive. 

SECTION 4.    Eligibility and Participation.    

        4.1.    Eligible Individuals.    Options may be granted under the Plan
only to persons who are Eligible Individuals at the time of grant of the Options. 

        4.2.    No Right to Option.    The adoption of the Plan shall not be
deemed to give any person a right to be granted an Option. 

SECTION 5.    Grant of Options and Certain Terms of the Agreements.    

        5.1    Award Criteria.    Subject to the express provisions of this
Section, the Committee shall determine which Eligible Individuals shall be granted Options under the Plan from time to time. In making grants, the Committee shall take into consideration the level of
responsibility within the organization and the contribution the potential Optionee has made or may make to the success of the Company or the Bank
and such other considerations as the Board of Directors may from time to time specify. The Committee shall also determine the number of shares subject to each of such Options and shall authorize and
cause the Company or the Bank to grant Options in accordance with such determinations. 

        5.2    Grant.    The date on which the Committee completes all action
constituting an offer of an Option to an individual, including the specification of the exercise price and the number of shares of Stock to be subject to the Option, shall be the date on which the
Option covered by an Agreement is granted, even though certain terms of the Agreement may not be at such time determined and even though the Agreement may not be executed until a later time. For
purposes of the preceding sentence, an offer shall be deemed made if the Committee has completed all such action except communication of the grant of the Option to the potential Optionee. In no event,
however, shall an optionee gain any rights in addition to those specified by the Committee in its grant, regardless of the time that may pass between the grant of the Option and the actual execution
of the Agreement by the Company or the Bank and the optionee. 

        Each
Option granted under the Plan shall be evidenced by an Agreement, executed by the Company and the Eligible Individual to whom the Option is granted, incorporating such terms as the
Committee shall deem necessary or desirable. More than one Option may be granted to the same Eligible Individual and be outstanding concurrently. In the event an Eligible Individual is granted more
than one Option, such grants shall be evidenced by separate Agreements. 

        5.3    Transferability Restrictions.    Each Agreement may contain or
otherwise provide for conditions giving rise to the forfeiture of the Stock acquired pursuant to an Option granted under the Plan and for such restrictions on the transferability of shares of the
Stock acquired pursuant to an Option as the Committee, in its sole and absolute discretion, shall deem proper or advisable. Such conditions giving rise to forfeiture may include, but need not be
limited to, the requirement that the Optionee render substantial services to the Company, or the Bank for a specified period of time. Such restrictions on transferability may include, but need not be
limited to, options and rights of first refusal in favor of the Company and shareholders of the Company. 

SECTION 6.    Terms and Conditions of Options.    

        All
Options granted under the Plan shall comply with, be deemed to include, and shall be subject to the following terms and conditions: 

        6.1.    Number of Shares.    Each Agreement shall state the number of
shares of Stock to which it relates. 

        6.2.    Exercise Price.    Each Agreement shall state the exercise
price per share of Stock. "The exercise price per share of Stock subject to any Option under this Plan shall be one hundred percent (100%) of the Fair Market Value per share of the Stock on the date
of the grant of the Option but shall in no event be less than $10.00 per share." 

        6.3.    Medium and Time of Payment, Method of Exercise, and Withholding
Taxes.    The exercise price of an Option shall be payable upon the exercise of the Option 

        (a)   in
cash, 

        (b)   by
certified or cashier's check payable to the order of the Company, 

        (c)   with
the consent of the Committee, with shares of Stock owned by the Optionee, including a multiple series of exchanges of such Stock, or 

        (d)   with
the consent of the Committee, by a combination of cash and such shares. 

Exercise
of an Option shall not be effective until the Company has received written notice of exercise. Such notice must specify the number of whole shares to be purchased and be accompanied by
payment in full of the aggregate exercise price of the number of shares purchased. The Company shall not in any case be required to sell, issue, or deliver a fractional share of Stock with respect to
any Option. 

        The
Committee may, in its discretion, require an Optionee to pay to the Company at the time of exercise of an Option (or portion of an Option) the amount that the Company deems necessary
to satisfy its obligation to withhold Federal, state or local income or other taxes incurred by reason of the exercise. If the exercise of an Option does not give rise to an obligation to withhold
Federal income or other taxes on the date of exercise, the Company may, in its discretion, require an Optionee to place shares of Stock purchased under the Option in escrow for the benefit of the
Company until such time as Federal income or other tax withholding is no longer required with respect to such shares or until such withholding is required on amounts included in the gross income of
the Optionee as a result of the exercise of an Option or the disposition of shares of Stock acquired pursuant to the exercise. At such later time, the Company in its discretion, may require an
Optionee to pay to the Company the amount that the Company deems necessary to satisfy its obligation to withhold Federal, state or local income or other taxes incurred by reason of the exercise of the
Option or the disposition of shares of Stock. Upon receipt of such payment by the Company, such shares of Stock shall be released from escrow to the Optionee. 

        6.4.    Term, Time of Exercise and Transferability of Options.    In
addition to such other terms and conditions as may be included in a particular Agreement granting an Option, an Option shall be exercisable during an Optionee's lifetime only by the Optionee or by the
Optionee's guardian or legal representative. 

        The
Committee shall have the authority to prescribe in any Agreement a vesting schedule that governs when the Option becomes fully vested and exercisable, except that all Options shall
become fully vested and exercisable immediately upon the occurrence of any of the Change in Control Events listed in Section 6.5. 

        An
Option shall not be transferable other than by will or the laws of descent and distribution. 

        The
provisions of the remainder of this Section shall apply to the extent an Optionee's Agreement does not expressly provide otherwise. If an Optionee ceases to be an Eligible Individual
for any reason other than Cause, death or Disability, the Option shall terminate ninety days after such Optionee ceases to be an Eligible Individual. If an Optionee ceases to be an Eligible Individual
because of his or her termination of employment for Cause, the Option shall terminate on the date of such termination. If an Optionee ceases to be an Eligible Individual by reason of Disability, the
Optionee shall have the right for twelve months after the date of Disability to exercise an Option to the extent such Option is exercisable on the date of his Disability. If an Optionee ceases to be
an Eligible Individual by reason of death, Optionee's designated beneficiary shall have the right for twelve (12) months after the date of death to exercise the Option, to the extent such
Option is exercisable on the date of death. At the end of such twelve (12) month or ninety (90) day period, as applicable the Option shall terminate and cease to be exercisable. Each
Optionee shall have the right to designate a beneficiary on the form provided by the Committee. If no beneficiary is designated, Optionee's estate shall have the rights of a
beneficiary. Notwithstanding any other provision of this Plan, no Option shall be exercisable after the expiration of ten (10) years from the date it is granted (the "Maximum Term"). 

        Subject
to the foregoing paragraph, the portion of the Option which is not exercisable on the date the Optionee ceases to be an Eligible Individual shall terminate and be forfeited to
the Company on the date of such cessation. 

        The
Committee shall have the authority to prescribe in any Agreement that the Option evidenced by the Agreement may be exercised in full or in part as to any number of shares subject to
the Option at any time or from time to time during the term of the Option, or in such installments at such times during said term as the Committee may prescribe. Except as provided above and unless
otherwise provided in any Agreement, an Option may be exercised at any time or from time to time during the term of the Option. Such exercise may be as to any or all whole (but no fractional) shares
which have become purchasable under the Option. 

        Within
a reasonable time (or such time as may be permitted by law) after the Company or the Bank receives written notice that the Optionee has elected to exercise all or a portion of an
Option, such notice to be accompanied by payment in full of the aggregate Option exercise price of the number of shares of Stock purchased, the Company shall issue and deliver a certificate
representing the shares acquired in consequence of the exercise and any other amounts payable in consequence of such exercise. The number of the shares of Stock transferrable due to an exercise of an
Option under this Plan shall not be increased due to the passage of time, except as may be provided in an Agreement; provided, however, the number of such shares of Stock which are transferrable may
increase due to the occurrence of certain events which are fully described in Section 6.5. 

        Nothing
in the Plan or in any Option granted under the Plan shall require the Company to issue any shares upon exercise of any Option if such issuance would, in the reasonable judgment
of the Committee based upon the advice of counsel for the Company, constitute a violation of the Securities Act, or any other applicable statute or regulation, as then in effect. At the time of any
exercise of an Option, the Company may, as a condition precedent to the exercise of such Option, require from the Optionee (or in the event of his death, his legal representatives, heirs, legatees, or
distributees) such written representations, if any, concerning his intentions with regard to the retention or disposition of 

the
shares being acquired by exercise of such Option and such written covenants and agreements, if any, as to the manner of disposal of such shares as, in the opinion of counsel to the Company, may be
necessary to ensure that any disposition by such Optionee (or in the event of his death, his legal representatives, heirs, legatees, or distributees), will not involve a violation of the Securities
Act or any other applicable state or federal statute or regulation, as then in effect. Certificates for shares of Stock, when issued, may have the following or similar legend, or statements of other
applicable restrictions, endorsed on them, and may not be immediately transferable: 

        The
shares of stock evidenced by this certificate have been issued to the registered owner in reliance upon written representations that these shares have been purchased for investment.
These shares have not been registered under the Securities Act of 1933, as amended, or any applicable state securities laws, in reliance upon an exemption from registration. Without such registration,
these shares may not be sold, transferred, assigned or otherwise disposed of unless, in the opinion of the Company and its legal counsel, such sale, transfer, assignment or disposition will not be in
violation of the Securities Act of 1933, as amended, applicable rules and regulations of the Securities and Exchange Commission, and any applicable state securities laws. 

        6.5.    Adjustments Upon Changes in Capitalization, Merger,
Etc.    Notwithstanding any other provision in the Plan to the contrary, in the event of any change in the number of outstanding shares of Stock 

        (a)   effected
without receipt of consideration by the Company by reason of a stock dividend, split, combination, exchange of shares, merger, or other recapitalization, in
which the Company is the surviving corporation, or 

        (b)   by
reason of a spin-off of a part of the Company into a separate entity, or assumptions and conversions of outstanding grants due to an acquisition by the
Company of a separate entity, 

(1) the
aggregate number and class of the reserved shares, (2) the number and class of shares subject to each outstanding Option and (3) the exercise price of each outstanding
Option shall be automatically adjusted to accurately and equitably reflect the effect of such change. In the event of a dispute concerning such adjustment, the Committee has full discretion to
determine the resolution of the dispute. Such determination shall be final, binding and conclusive. The number of reserved shares or the number of shares subject to any outstanding Option shall be
automatically reduced to the extent necessary to eliminate any fractional shares. 

        The
following provisions of this Section shall apply unless an Optionee's Agreement provides otherwise. In the event of: 

        (a)   a
dissolution or liquidation of the Company, 

        (b)   a
merger or consolidation (other than a merger effecting a re-incorporation of the Company in another state or any other merger or a consolidation in which
the shareholders of the surviving corporation and their proportionate interests therein immediately after the merger or consolidation are substantially identical to the shareholders of the Company and
their proportionate interests therein immediately prior to the merger or consolidation) in which the Company is not the surviving corporation (or survives only as a subsidiary of another corporation
in a transaction in which
the shareholders of the parent of the Company and their proportionate interests therein immediately after the transaction are not substantially identical to the shareholders of the Company and their
proportionate interests therein immediately prior to the transaction; provided, however, that the Board of Directors may at any time prior to such a merger or consolidation provide by resolution that
the foregoing provisions of this parenthetical shall not apply if a majority of the board of directors of such parent immediately after the transaction consists of individuals who constituted a
majority of the Board of Directors immediately prior to the transaction), or 

        (c)   a
transaction in which any person (other than a shareholder of the Company or the Bank on the date of the Optionee's Agreement) becomes the owner of fifty percent (50%)
or more of the total combined voting power of all classes of stock of the Company (provided, however, that 

the
Board of Directors may at any time prior to such transaction provide by resolution that this Subparagraph shall not apply if such acquiring person is a corporation and a majority of the board of
directors of the acquiring corporation immediately after the transaction consists of individuals who constituted a majority of the Board of Directors immediately prior to the acquisition of such fifty
percent (50%) or more total combined voting power) 

("Change
in Control Events") all options shall fully vest and the Board of Directors shall, as of the effective time of such transaction, either (1) change the number and kind of shares of
stock (including substitution of shares of another corporation) and exercise price in the manner it deems appropriate; provided, however, that in no event may any change be made under this Section
which would constitute a "modification" within the meaning of section 424(h)(3) of the Code; or (2) purchase the Options from each Optionee by tendering cash equal to the Fair Market
Value of the Stock represented by the Options less the exercise price of the Option specified in each Agreement, without regard to the determination as to the periods and installments of
exercisability made pursuant to an Optionee's Agreement, if (and only if) such Options have not at that time expired or been terminated. 

        6.6.    Rights as a Shareholder.    An Optionee shall have no right as
a shareholder with respect to any shares covered by his Option until a certificate representing such shares is issued to him. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash or other property) or distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 6.5. 

        6.7.    Modification, Extension and Renewal of Options.    Subject to
the terms and conditions of, and within the limitations of, the Plan, the Committee may modify, extend or renew outstanding Options granted under the Plan or accept the surrender of Options
outstanding under the Plan (to the extent not previously exercised) and authorize the granting of substitute Options (to the extent not previously exercised). The Committee may not, however, without
the consent of the Optionee, modify any outstanding Options so as to specify a higher or lower exercise price or number of shares. In addition, no modification of an Option granted under the Plan
shall, without the consent of the Optionee, alter
or impair any rights or obligations under any Option previously granted under the Plan to such Optionee under the Plan. 

        6.8.    Furnish Information.    Each Optionee shall furnish to the
Company or the Bank all information requested by the Company to enable it to comply with any reporting or other requirement imposed upon the Company by or under any applicable statute or regulation. 

        6.9.    Obligation to Exercise: Termination of Employment.    The
granting of an Option under the Plan shall impose no obligation upon the Optionee to exercise it or any part of it. In the event of an Optionee's termination of employment with the Company or the Bank
or an Affiliate, the unexercised portion of an Option granted under the Plan shall terminate in accordance with Paragraph 6.4. 

        6.10.    Agreement Provisions.    The Agreements authorized under the
Plan shall contain such provisions in addition to those required by the Plan (including, without limitation, restrictions or the removal of restrictions upon the exercise of the Option and the
retention or transfer of shares thereby acquired) as the Committee shall deem advisable. 

SECTION 7.    Remedies and Specific Performance.    

        7.1.    Remedies.    The Company shall be entitled to recover from an
Optionee reasonable attorneys' fees incurred in connection with the enforcement of the terms and provisions of the Plan and any Agreement, whether by an action to enforce specific performance, or an
action for damages for its breach or otherwise. 

        7.2.    Specific Performance.    The Company shall be entitled to
enforce the terms and provisions of this Section, including the remedy of specific performance, in Dallas County, Texas. 

SECTION 8.    Duration of Plan.    

        No
Options may be granted under the Plan more than ten years after the earlier of the date the Plan is adopted or the date the Plan is approved by the stockholders of the Company. 

SECTION 9.    Amendment and Termination of Plan.    

        The
Board of Directors may at any time terminate or from time to time amend or suspend the Plan; provided,  however, that no such amendment shall, without
approval of the shareholders of the Company, except as provided in Section 6, (a) increase
the aggregate number of shares of Stock as to which Options may be granted under the Plan; (b) increase the maximum period during which Options may be exercised; or (c) extend the
effective period of the Plan. No Option may be granted during any suspension of the Plan or after the Plan has been terminated, and no amendment, suspension or termination shall, without an Optionee's
consent, alter or impair, other than as provided in the Plan and the Optionee's Agreement, any of the rights or obligations under any Option previously granted to such Optionee under the Plan. 

SECTION 10.    General.    

        10.1.    Application of Funds.    The proceeds received by the Company
from the sale of shares pursuant to Options shall be used for general corporate purposes. 

        10.2.    Right of the Company or the Bank and Affiliates to Terminate
Employment.    Nothing contained in the Plan, or in any Agreement, shall confer upon any Optionee the right to continue in the employ of the Company or the Bank, or
interfere in any way with the rights of the Company or the Bank to terminate his employment any time. 

        10.3.    Liability of the Company or the Bank.    Neither the Company,
any of its Affiliates, its directors, officers or employees nor any member of the Committee shall be liable for any act, omission, or determination taken or made in good faith with respect to the Plan
or any Option granted under it, and members of the Board of Directors and the Committee shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage, or
expense (including attorneys' fees, the costs of settling any suit (provided such settlement is approved by independent legal counsel selected by the Company) and amounts paid in satisfaction of a
judgment, except a judgment based on a finding of bad faith) arising from such claim, loss, etc. to the full extent permitted by law and under any directors' and officers' liability or similar
insurance coverage that may from tune to time be in effect. 

        10.4.    Information Confidential.    As partial consideration for the
granting of each Option under the Plan, the Agreement may, in the Committee's sole and absolute discretion, provide that the Optionee shall agree with the Company that he will keep confidential all
information and knowledge that he has relating to the manner and amount of his participation in the Plan; provided, however, that such information may be disclosed as required by law and may be given
in confidence to the Optionee's spouse, tax and financial advisors, or to a financial institution to the extent that such information is necessary to secure a loan. In the event any breach of this
promise comes to the attention of the Committee, it shall take into consideration such breach, in determining whether to recommend the
grant of any future Option to such Optionee, as a factor militating against the advisability of granting any such future Option to such individual. 

        10.5.    Other Benefits.    Participation in the Plan shall not
preclude the Optionee from eligibility in any other stock option plan of the Company, the Bank or any Affiliate or any old age benefit, insurance, pension, profit sharing, retirement, bonus, or other
extra compensation plans which the Company, the Bank or any Affiliate has adopted, or may, at any time, adopt for the benefit of its employees. 

        10.6.    Execution of Receipts and Releases.    Any payment of cash or
any issuance or transfer of shares of Stock to the Optionee, or to his legal representative, heir, legatee, or distributee, in accordance with the provisions of the Plan, shall, to the extent thereof,
be in full satisfaction of all claims of such persons under the Plan. The Committee may require any Optionee, legal representative, 

heir,
legatee, or distributee, as a condition precedent to such payment, to execute a release and receipt for such payment in such form as it shall determine. 

        10.7.    No Guarantee of Interests.    Neither the Committee nor the
Company guarantees the Stock from loss or depreciation. 

        10.8.    Payment of Expenses.    All expenses incident to the
administration, termination, or protection of the Plan, including, but not limited to, legal and accounting fees, shall be paid by the Company or its Affiliates; provided, however, the Company or an
Affiliate may recover any and all damages, fees, expenses and costs arising out of any actions taken by the Company or an Affiliate to enforce its rights under the Plan. 

        10.9.    Bank Records.    Records of the Company or the Bank regarding
the Optionee's period of employment, termination of employment and the reason for such termination, leaves of absence, re-employment, and other matters shall be conclusive for all purposes
under the Plan, unless determined by the Committee to be incorrect. 

        10.10.    Information.    The Company or the Bank shall, upon request
or as may be specifically required under the Plan, furnish or cause to be furnished all of the information or documentation that is necessary or required by the Committee to perform its duties and
functions under the Plan. 

        10.11.    Bank Action.    Any action required of the Company relating
to the Plan shall be by resolution of its Board of Directors or by a person authorized to act by resolution of the Board of Directors. 

        10.12.    Severability.    If any provision of this Plan is held to be
illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of the Plan, but such provision shall be fully severable, and the Plan shall be construed and
enforced as if the illegal or invalid provision had never been included in the Plan. 

        10.13.    Notices.    Whenever any notice is required or permitted
under the Plan, such notice must be in writing and personally delivered, telecopied (if confirmed), or sent by mail or by a nationally recognized courier service. Any notice required or permitted to
be delivered under this Agreement shall be deemed to be delivered on the date on which it is personally delivered, or, if mailed, whether actually received or not, on the third business day after it
is deposited in the United States mail, certified or registered, postage prepaid, addressed to the person who is to receive it at the address which such person has previously specified by written
notice delivered in accordance with this Paragraph or, if by courier, twenty-four (24) hours after it is sent, addressed as described in this Paragraph. The Company or an Optionee
may change, at any time and from time to time, by written notice to the other, the address which it or he had previously specified for receiving notices. Until changed in accordance with the Plan, the
Company and each Optionee shall specify as its and his address for receiving notices the address set forth in the Agreement pertaining to the shares to which such notice relates. 

        10.14.    Waiver of Notice.    Any person entitled to notice under the
Plan may waive such notice. 

        10.15.    Successors.    The Plan shall be binding upon the Optionee,
his legal representatives, heirs, legatees and distributees, upon the Company, its successors, and assigns, and upon the Committee, and its successors. 

        10.16.    Headings.    The titles and headings of Sections are
included for convenience of reference only and are not to be considered in construction of the Plan's provisions. 

        10.17.    Governing Law.    All questions arising with respect to the
provisions of the Plan shall be determined by application of the laws of the State of Texas except to the extent Texas law is preempted by federal law. Questions arising with respect to the provisions
of an Agreement that are matters of contract law shall be governed by the laws of the state specified in the Agreement, except to the extent preempted by federal law and except to the extent that
Texas corporate law conflicts with the contract law of such state, in which event Texas corporate law shall govern. The obligation of the Company to 

sell
and deliver Stock under the Plan is subject to applicable laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such
Stock. 

        10.18.    Word Usage.    Words used in the masculine shall apply to
the feminine where applicable, and wherever the context of this Plan dictates, the plural shall be read as the singular and the singular as the plural. 

SECTION 11.    Approval.    

        This
amended and restated Plan is effective on April 1, 1997, the date it was last amended by the Board of Directors. 

QuickLinks

Exhibit 10.1

STATE NATIONAL BANCSHARES, INC. STOCK OPTION PLANQuickLinks
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Exhibit 10.2    
    

 
 

STATE NATIONAL BANCSHARES, INC.
  STOCK OPTION PLAN    
    
    NONSTATUTORY OPTION AGREEMENT    
    

        THIS AGREEMENT is made and entered into effective as
of                        , 1996, (the "Effective Date") between State National Bancshares, Inc. (the "Bank"),
and                        (the "Optionee") in connection with the grant of a nonstatutory Option under the State National
Bancshares, Inc. Stock Option Plan (the "Plan"). 

W I T N E S S E T H:  

        WHEREAS, the Optionee is employed by the Bank or one of its affiliates in a key position; and 

        WHEREAS,
the Bank desires to encourage Optionee to own Stock and to give him added incentive to advance the interests of the Bank through the Plan; and 

        WHEREAS,
the Bank desires to grant the Optionee a nonstatutory Option to purchase Stock of the Bank under terms and conditions established by the Committee appointed by the Board of
Directors. 

        NOW,
THEREFORE, in consideration of these premises, the parties agree that the following shall constitute the Agreement between the Bank and the Optionee: 

1.    Definitions.    For purposes of this Agreement, defined terms shall have the meanings given to them by
the Plan except as specified below: 

        1.1   "Agreement" shall mean this document as executed by the Bank and the Optionee, and as it may be subsequently amended; and 

        2.    Grant of Option.    Subject to the terms and conditions set
forth in this Agreement, the Bank grants to the Optionee an Option to purchase from the Bank during the period ending ten (10) years from the date of this Agreement,            shares
of
Stock at a price of $            per share, subject to adjustment, if any, as provided in this Agreement. This Option is not an incentive stock option within the meaning of Code
Section 422. 

        The
Option shall become fully vested and exercisable according to the following vesting schedule, if any, prescribed by the Committee: 

_____________________________________________________________________________________

[Insert the number of years of service required; if specific dates are used, indicate if the Optionee must be

employed on that date] 

Notwithstanding
the above, all Options shall become fully vested and exercisable immediately upon the occurrence of any of the Change in Control Events listed in Section 9, if the Holder is
still employed on the date of such Change of Control Event. 

        3.    Exercise Rights.    The Option granted pursuant to
Section 2 may be exercised during its term in full or in part, to the extent vested, as to any number of whole shares (but no fractional shares), subject to the provisions of the Plan and of
the following provisions. 

        This
Option may be exercised only during the periods of time announced by the Bank as permissible Stock selling periods, which shall be periods related to the valuation of the Stock.
Exercise of an Option shall not be effective until the Committee has received written notice of exercise. Such notice must specify the number of whole shares to be purchased and be accompanied by
payment in full of the aggregate exercise price of the number of shares purchased. The Bank shall not in any case be required to sell, issue, or deliver a fractional share of Stock with respect to any
Option. 

 

        Nothing
in the Plan or in this Agreement shall be deemed to require the Bank to issue any shares upon exercise of any Option if such issuance would, in the opinion of counsel for the
Bank, constitute a violation of the Securities Act, as amended or any other applicable statute or regulation, as then in effect. At the time of any exercise of an Option, the Bank may, as a condition
precedent to the exercise of such Option, require from the Optionee (or in the event of his death, his legal representatives, heirs, legatees, or distributees) such written representations, if any,
concerning his intentions with regard to the retention or disposition of the shares being acquired by exercise of such Option and such written covenants and agreements, if any, as to the manner of
disposal of such shares as, in the opinion of counsel to the Bank, may be necessary to ensure that any disposition by such Optionee (or in the event of his death, his legal representatives, heirs,
legatees, or distributees), will not involve a violation of the Securities Act or any other applicable state or federal statute or regulation, as then in effect. 

        4.    Notice of Exercise.    This Option may be exercised in
accordance with Sections 2 and 3, by written notice to the Committee at the address provided in this Agreement, which notice shall: 

        (a)   specify
the number of shares of Stock to be purchased and the exercise price to be paid for such shares of Stock; 

        (b)   if
the person exercising this Option is not the Optionee himself, contain or be accompanied by evidence satisfactory to the Committee of such person's right to exercise
this Option; 

        (c)   be
accompanied by payment in full of the purchase price in the form of cash, a certified or cashier's check to the order of the Bank, a wire transfer of immediately
available funds; or, with the consent of the Committee, in whole shares of Stock already owned by the Optionee or partly in cash and partly in such Stock; and 

        (d)   be
accompanied by the amount that the Bank deems necessary to satisfy the Bank's obligation to withhold Federal, state or local income or other taxes incurred by reason
of the exercise. Such amount shall be paid in cash or, with the permission of the Committee, may be paid wholly or partially in shares of Stock (including, but not limited to, the reservation to the
Bank of the requisite number of shares of Stock otherwise payable to such person with respect to such Option). 

        5.    Transferability and Exercise Restrictions.    This Option shall
not be transferable except by will or by the laws of descent and distribution. During the Optionee's lifetime this Option may be exercised only by
him. No assignment or transfer of this Option, whether voluntary or involuntary, by operation of law or otherwise, except a transfer by will or by the laws of descent or distribution, shall vest in
the assignee or transferee any interest or right whatsoever in this Option. 

        6.    Status of Optionee.    The Optionee shall have no right as a
shareholder with respect to any shares covered by this Option until a certificate representing such shares is issued to him. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash or other property) or distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 6.6 of the Plan. 

        7.    No Effect on Capital Structure.    This Option shall not affect
the right of the Bank or any Affiliate to reclassify, recapitalize or otherwise change its capital or debt structure or to merge, consolidate, convey any or all of its assets, dissolve, liquidate,
windup, or otherwise reorganize. 

        8.    Termination of Option.    If an Optionee ceases to be an
Eligible Individual, the Option shall terminate ninety days after such Optionee ceases to be an Eligible Individual. Notwithstanding the foregoing, if an Optionee ceases to be an Eligible Individual
by reason of Disability, the Optionee shall have the right for twelve (12) months after the date of Disability to exercise an Option to the extent such Option is exercisable on the date of his
Disability. If an Optionee ceases to be an Eligible 

2

 

Individual
by reason of death, Optionee's designated beneficiary shall have the right for twelve (12) months after the date of death to exercise the Option, to the extent such Option is
exercisable on the date of death. At the end of such twelve (12) month or ninety (90) day period, as applicable, the Option shall terminate and cease to be exercisable. Each Optionee
shall have the right to designate a beneficiary on the form provided by the Committee. If no beneficiary is designated, the Optionee's estate shall have the rights of a beneficiary. Notwithstanding
any other provision of this Plan, no Option shall be exercisable after the expiration of ten (10) years from the date it is granted (the "Maximum Term"). 

        9.    Adjustments Upon Changes in Capitalization, Merger,
Etc.    Notwithstanding any other provision of this Agreement, in the event of any change in the number of outstanding shares of Stock that is (a) effected
without receipt of consideration by the Bank, by reason of a stock dividend, split, combination, exchange of shares, merger, or other recapitalization, in which the Bank is the surviving corporation,
or (b) by reason of a spin-off of a part of the Bank into a separate entity, or assumptions and conversions of outstanding grants due to an acquisition by the Bank of a separate
entity, the aggregate number and class of the reserved shares, the number and class of shares subject to each outstanding Option and the exercise price of each outstanding Option shall be
automatically adjusted to accurately and equitably reflect the effect of such change. In the event of a dispute concerning such adjustment, the Committee has full discretion to determine the
resolution of the dispute. Such determination shall be final, binding and conclusive. The number of reserved shares or the number of shares subject to any outstanding Option shall be automatically
reduced to the extent necessary to eliminate any fractional shares. 

In
the event of: 

	(a)
	a
dissolution or liquidation of the Bank,

	(b)
	a
merger or consolidation (other than a merger effecting a re-incorporation of the Bank in another state or any other merger or a consolidation in which the shareholders
of the surviving corporation and their proportionate interests therein immediately after the merger or consolidation are substantially identical to the shareholders of the Bank and their proportionate
interests therein immediately prior to the merger or consolidation) in which the Bank is not the surviving corporation (or survives only as a subsidiary of another corporation in a transaction in
which the shareholders of the parent of the Bank and their proportionate interests therein immediately after the transaction are not substantially identical to the shareholders of the Bank and their
proportionate interests therein immediately prior to the transaction; provided, however, that the Board of Directors may at any time prior to such a merger or consolidation provide by resolution that
the foregoing provisions of this parenthetical shall not apply if a majority of the board of directors of such parent immediately after the transaction consists of individuals who constituted a
majority of the Board of Directors immediately prior to the transaction), or

	(c)
	a
transaction in which any person (other than a shareholder of the Bank on the date of the Optionee's Agreement) becomes the owner of fifty percent (50%) or more of the total combined
voting power of all classes of stock of the Bank (provided, however, that the Board of Directors may at any time prior to such transaction provide by resolution that this Subsection shall not apply if
such acquiring person is a corporation and a majority of the board of directors of the acquiring corporation immediately after the transaction consists of individuals who constituted a majority of the
Board of Directors immediately prior to the acquisition of such fifty percent (50%) or more total combined voting power) 

("Change
in Control Events") all options shall fully vest and the Board of Directors shall, as of the effective time of such transaction, either (1) change the number and kind of shares of
stock (including substitution of shares of another corporation) and exercise price in the manner it deems appropriate; 

3

 

provided,
however, that in no event may any change be made under this Section which would constitute a "modification" within the meaning of section 424(h)(3) of the Code; or (2) purchase
the Options from each Optionee by tendering cash equal to the Fair Market Value of the Stock represented by the Options less the exercise price of the Option specified in each Agreement, without
regard to the determination as to the periods and installments of exercisability made pursuant to an Optionee's Agreement, if (and only if) such Options have not at that time expired or been
terminated. 

        10.    Committee Authority.    Any question concerning the
interpretation of this Agreement, any adjustments required to be made under this Agreement, and any controversy which may arise under this Agreement shall be determined by the Committee in its sole
discretion. 

        11.    Plan Controls.    The terms of this Agreement are governed by
the terms of the Plan, a copy of which has been provided to Optionee and is made a part of this Agreement as if fully set forth in this Agreement, and in the case of any inconsistency between the
terms of this Agreement and the terms of the Plan, the terms of the Plan shall control. 

        12.    Notice.    Whenever any notice is required or permitted under
this Agreement, such notice must be in writing and delivered (personally or by courier), telecopied (if confirmed) or sent by mail. Any notice required or permitted to be delivered under this
Agreement shall be deemed to be delivered on the date which it is personally delivered, or, whether actually received or not, on the third business day after it is deposited in the United States mail,
certified or registered, postage prepaid, addressed to the person who is to receive it at the address which such person has previously specified by written notice delivered in accordance with this
Agreement. The Bank or Optionee may change, at any time and from time to time, by written notice to the other, the address previously specified for receiving notices. It is the Optionee's
responsibility to provide a current address to the Committee. Failure to do so will forfeit Optionee's right to any notices otherwise required. Until changed in accordance with this Agreement, the
Bank and the Optionee specify their respective addresses as set forth below: 

	Committee:	 	Stock Option Committee

c/o State National Bancshares, Inc.

Attention: ________________________

1661 Broadway

Lubbock, Texas
	

Bank:	
 	

State National Bancshares, Inc.

Attention: ________________________

1661 Broadway

Lubbock, Texas
	

Optionee:	
 	

_________________________________

_________________________________

_________________________________

        13.    Information
Confidential.    As partial consideration for the granting of this Option, the Optionee agrees that he will keep confidential all information and knowledge that he
has relating to the manner and amount of participation in the Plan; provided, that such information may be disclosed as required by law and may be given in confidence to the Optionee's spouse, tax and
financial advisors, or to a financial institution to the extent that such information is necessary to secure a loan. 

        14.    Governing Law.    Except as is otherwise provided in
Section 10.17 of the Plan, the provisions of this Agreement shall be governed by the contract law of the State of Texas. 

4

 

        IN
WITNESS WHEREOF, the Bank and the Optionee have executed this Agreement this            day
of                        , 1996. 

	 	 	STATE NATIONAL BANCSHARES, INC.
	

 	
 	

By:	

    

	 	 	Title:	    

	

    	
 	

 	

 
	 	 	"OPTIONEE"
	

 	
 	

    

5

QuickLinks

Exhibit 10.2

STATE NATIONAL BANCSHARES, INC. STOCK OPTION PLAN NONSTATUTORY OPTION AGREEMENT

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