Document:

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                                                                    EXHIBIT 10.5

                              EMPLOYMENT CONTRACT

     This Employment Contract (this "Agreement") is made as of the 1st day of
August, 1999 between PARADIGM BANCORPORATION, INC., a Texas corporation and the
parent bank holding company of Woodcreek Bank (the "Bank"), having a principal
place of business at 2828 FM 1960, Houston, Texas 77273, hereinafter referred to
as the "Employer", and PETER E. FISHER who resides at 6130 Willow Pine, Spring,
Texas 77379 hereinafter referred to as the "Employee". The Bank is also
executing this Agreement to confirm its obligations under Article IV Section 2
hereof.

     WHEREAS, the Employee has considerable experience, expertise and training
in management related to banking in general, lending, deposit gathering, and
marketing, and other services offered by the Employer and or its subsidiaries;
and

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

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

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

                                   ARTICLE I
                              TERM OF EMPLOYMENT

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

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

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

                                  ARTICLE III
                         ENGAGING IN OTHER EMPLOYMENT

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

                                  ARTICLE IV
                                 COMPENSATION

     1.  Basic Compensation.  As compensation for employment services rendered
under this Agreement, the Employee shall be entitled to receive from the
Employer an annual base salary of ONE HUNDRED FORTY-FIVE THOUSAND AND NO/100
DOLLARS ($145,000.00) for the first year of this Agreement.  Beginning on August
1, 2000, the Employee will receive an increase in his base salary equal to the
increase in the consumer price index for the prior year.

     2.  Payment of Basic Compensation. The parties recognize that (i) in
addition to Employee's employment, Employee is also the Vice Chairman of the
Bank, (ii) at the time of this

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Agreement, it has been the practice for the Bank to pay the Employee a salary
and for the Employer to reimburse the Bank on a monthly basis for the time spent
by the Employee for service to the Employer and (iii) the Employer, the Bank and
the Employee wish to continue this practice through December 31, 1999. As such,
from the Effective Date of this Agreement through December 31, 1999, (i) the
Bank shall pay the Employee the base salary as described in Section 1 above,
(ii) on a monthly basis, the Bank will present the Employer with an itemization
of the hours spent by the Employee for service to the Employer and (iii) the
Employer will promptly reimburse the Bank for such time of the Employee at the
rate of $ 81.72 per hour. Beginning on January 1, 2000 through the termination
of this Agreement, the Employer will be responsible for the base salary and all
additional compensation and benefits as herein described in this agreement.
Payments of the base salary shall be made in accordance with the Company's (or
the Bank's as appropriate) payroll policies and procedures, subject to payroll
and withholding deductions as may be required by law and other deductions
applied generally to employees of the Company (or the Bank as appropriate) for
insurance or other employee benefit plans.

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

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

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

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     3.  Service on Boards of Directors.  While serving as a director of the
Employer, Employee shall receive the standard fee for attendance of meetings of
the Board of Directors of the Employer.  During the term of this Agreement,
Employer agrees to use its best efforts to have Employee elected as a member of
the Board of Directors of each bank subsidiary of the Employer, including but
not limited to the Bank and upon its acquisition by the Employer, Dayton State
Bank.  Employee shall be entitled to receive the standard fee for attendance at
meetings of the Boards of Directors of each bank subsidiary of the Employer.

     4.  Bonus Schedule.  Within thirty days after December 31, 1999 and
December 31, 2000 (or within 30 days after the end of the quarter in the event
of a termination of employment), the Employer shall pay the Employee an
additional bonus as a percentage of his base salary of $145,000.  The bonus
shall be based on the return on average assets of the Employer for the prior
twelve months ("ROAA") according to the schedule set forth on Exhibit A hereto.
ROAA shall be determined prior to the payment of federal income taxes and shall
be calculated by the certified public accountants of the Employer.

     5.  Automobile Allowance.  During the term of this Agreement, the Employer
shall pay Employee an automobile allowance of $800.00 per month: provided,
however, that if the Employee's travel costs as a result of the acquisition of
Dayton State Bank by Employer exceeds $300.00 per month, then the automobile
allowance shall be increased in an amount equal to the excess.

     6.  Grant Under Stock Option Plan.  As of the Effective Date, the Employer
hereby grants to the Employee 20,000 additional Units under the 1998 Stock
Appreciation Rights Plan.

     7.  Club Membership.  The Employer agrees to provide the Employee with a
club membership which shall be agreed upon by the Employer and Employee and
shall include the initial membership fee and monthly dues thereafter.

     8.  Vacation.  Employer shall give Employee  four (4)  weeks of vacation
per year, which vacation shall fully accrue as of the commencement of this
Agreement and  all unused vacation will carry forward each year.

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

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                                  ARTICLE VI
             EMPLOYEE'S OBLIGATIONS OTHER THAN TO PERFORM SERVICES

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

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

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

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                                  ARTICLE VII
                                PROPERTY RIGHTS

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

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

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pricing, business projections, business plans and strategies, marketing plans,
techniques, assets and customer contacts previously obtained by the Employee
along with his reputation in the community.

                                 ARTICLE VIII
                                  TERMINATION

     1.  Termination of Agreement.  Except as may otherwise be provided herein,
this Agreement may terminate prior to July 31, 2001 upon the occurrence of:

     (i) sixty (60) days after written notice of termination is given by
Employee;

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

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

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

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

                                  ARTICLE IX
                 OBLIGATIONS OF THE EMPLOYER UPON TERMINATION

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

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

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

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

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

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

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

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

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

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

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

                    (vi) an amount equal to ($145,000 divided by twelve) times
               the number of months remaining in the stated term of this
               Agreement, less statutory payroll deductions; provided, however,
               in no event shall the amount payable under this item (vi)  be
               less than $145,000.

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

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

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

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

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

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

                    (vi) an amount equal to two times the annual base salary of
               the Employee at the time of the Change in Control, less statutory
               payroll deductions; provided, however, in no event shall the
               amount payable under this item (vi)  be less than $290,000.

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

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

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

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

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

     6.  Change in Control.  As used in this Agreement, "Change in Control"
means an event or series of events whereby the shareholders of the Employer as
of the Effective Date, the individuals related by blood or marriage to the
shareholders of the Employer as of the Effective Date with a

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relationship equal to or closer than third cousin or any entity controlled by or
for the benefit of such persons ceases to own at least 51% of the voting stock
of the Employer. For purposes of determining the current shareholders of the
Employer, a list of the shareholders as of the Effective Date is attached hereto
as Exhibit B.

                                   ARTICLE X
                                  ARBITRATION

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

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

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

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

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                                  ARTICLE XI
                                INDEMNIFICATION

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

                                  ARTICLE XII
                              GENERAL PROVISIONS

     1.  Notices.  Any notices to be given hereunder by either party to the
other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid with return receipt requested.  Mailed
notices shall be addressed to the parties at the addresses appearing in the
introductory paragraph of this Agreement, but each party may change his address
by written notice in accordance with this paragraph.  Notices delivered
personally shall be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of three (3) days after mailing.

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

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

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

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

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

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

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

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

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

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

     10.  Effectiveness.   This Agreement has been executed as of the date set
forth below effective for all purposes as of August 1, 1999.  Notwithstanding
the foregoing or the complete execution of this Agreement, this Agreement shall
not be binding upon any party hereto until its approval by the Bank's Board of
Directors and the Employer's Board of Directors.  Following its approval, it
shall be binding effective August 1, 1999.

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     EXECUTED ON THIS ____ DAY OF ____________, 1999 AT HOUSTON, TEXAS.

                              EMPLOYEE:

                              Peter E. Fisher

                              BANK:
                              WOODCREEK BANK

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

                              EMPLOYER:
                              PARADIGM BANCORPORATION, INC.

                              By:
                                  -----------------------------
                                    Charles Howard, M.D.
                                    Its:  Chairman of the Board

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

     This instrument was acknowledged before me on this _________ day of
__________________, 1999 by Peter E. Fisher.

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

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

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

     This instrument was acknowledged before me on this _________ day of
______________________, 1999 by William Fagan, M.D. in the capacity stated.

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

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

                                       16
<PAGE>

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

     This instrument was acknowledged before me on this ________ day of
____________________, 1999 by Charles Howard, M.D. in the capacity stated.

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

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

                                       17
<PAGE>

                                   EXHIBIT A

                                     BONUS

Pursuant to Article V Section 4 of this Agreement, the Employer shall pay the
Employee an additional bonus as a percentage of his base salary of $145,000.
The bonus shall be based on the return on average assets of the Employer for the
prior twelve months ("ROAA") according to the schedule set forth below.  ROAA
shall be determined prior to the payment of federal income taxes and shall be
calculated by the certified public accountants of the Employer.

ROAA (Pre-tax)           Bonus (% of Base Salary of $145,000)
--------------           ------------------------------------
2.00% or above                     25%

1.75% - 1.99%                      20%

1.50% - 1.74%                      15%

1.25% - 1.49%                      10%

1.00% - 1.24%                       5%

                                       18
<PAGE>

                                   EXHIBIT B

                   LIST OF SHAREHOLDERS AS OF AUGUST 1, 1999

                                       19<PAGE>

                                                                    EXHIBIT 10.7

                             EMPLOYMENT AGREEMENT

     This Employment Agreement (the "Agreement") is by and between Dayton State
Bank, a Texas banking association ("Bank"), and James A. Woodall, Jr., an
individual residing in Dayton ,Liberty County, Texas (the "Employee"), effective
as of December 13, 1999 (the "Effective Date").

                             W I T N E S S E T H:

     In consideration of the mutual covenants and agreements contained in this
Agreement, the parties agree as follows:

     1.  Employment.  On the terms and subject to the conditions set forth in
this Agreement, Bank hereby employs Employee, and engages the services of the
Employee to serve as  Chairman of the Board and Chief Executive of Bank, and
Employee hereby accepts employment with Bank according to the terms set forth in
this Agreement.

     2.  Duties.  Employee is hereby employed and shall work at the location of
Bank or at such other place or places as may be directed by Bank.  The Employee
shall have the position (including status, offices, titles and reporting
requirements), authority, duties, and responsibilities usually associated with
the title set forth in Section 1 above in a banking organization in a holding
company structure having assets similar in nature and value to the assets of
Bank.

     3.  Term.  The term of this Agreement shall be as follows:

         3.1  Term.  The term ("Term") of this Agreement shall commence on the
date hereof and continue for a period of three years.

         3.2  Extensions.  At the conclusion of the  initial contract term the
Term of this Agreement shall automatically be extended for a one-year period,
unless Employee is terminated in accordance with Section 7 hereof or the Bank
elects not to extend the Agreement.  In this latter case, the Bank shall give
the Employee six (6) months notice of its intention not to extend the Agreement.

     4.  Compensation and Benefits.  The compensation and other benefits payable
to Employee under this Agreement shall constitute the full consideration to be
paid to Employee for all services to be rendered by Employee to Bank.

         4.1  Base Salary.  During the first year of the Term of this
Agreement, Bank shall pay Employee a base salary ("Base Salary") of $123,000.00
per annum, commencing on the date of execution of this Agreement.  The
Employee's Base Salary shall be payable in accordance with Bank's customary
policies, subject to payroll and withholding deductions as may be required by
law

                                       1
<PAGE>

and other deductions applied generally to employees of Bank for insurance or
other employee benefit plans.  In addition to his Base Salary, Employee may, but
is not entitled to, receive an annual bonus payment at the discretion of the
Board of Directors or an appropriate committee thereof.

         4.2  Annual Review.  The Employee's Base Salary shall be reviewed
annually by the Board of Directors of Bank and may be increased from time to
time at the discretion of the Board of Directors.

         4.3  Reimbursement of Expenses.  Employee shall be reimbursed for any
and all reasonable costs and expenses incurred by Employee in performance of his
services and duties as specified in this Agreement or incurred by Employee on
behalf of, or in furtherance of the business of Bank, including, but not limited
to business expenses incurred in connection with travel and entertainment;
provided, however, that Employee shall submit to Bank supporting receipts and
information satisfactory to Bank with respect to such reasonable costs and
expenses.

         4.4  Benefits.  During the term of Employee's employment, he shall be
entitled (i) to receive health insurance benefits with the same coverages and
deductibles as are currently in effect with respect to Employee and his
dependents (subject to the availability of such benefits at a reasonable cost),
(ii) to participate in Bank's other benefit plans to such extent as determined
by the Board of Directors of Bank,  (iii) to participate in Bank's other
policies, including vacation of four weeks and sick leave but excluding any
severance policies, (iv) to be provided with a Bank owned automobile, insurance
thereon, and maintenance at Bank expense, (v) election as a director of the
Boards of Woodcreek Bank and Paradigm Bancorporation, Inc. ("Paradigm"),
compensation for attendance at board meetings to be that of full directors as
set by the respective Boards from time to time, (vi) monthly dues for membership
at the Magnolia Ridge Country Club, (vii) a grant of 8,000 Stock Appreciation
Rights under the Paradigm Bancorporation Stock Appreciation Rights Plan and
Agreement, with vesting pursuant to the Plan.

     5.  Conflicts of Interests; Covenant Not to Compete.

         5.1  Conflicts of Interest.  Employee shall, during the term of this
Agreement, devote his time, attention, energies and business efforts to his
duties as an employee of Bank and to the business of Bank.  Employee shall not,
during the term of this Agreement, directly or indirectly, for and on behalf of
himself or any person, firm, partnership, corporation or other legal entity,
own, manage, operate, control, invest in, make loans on advances to, guarantee
the obligations of or participate in the ownership or management or operations
of or be employed by or otherwise engage in the operation of any business that
is in competition in any manner whatsoever with the business of Bank or
Paradigm.

         5.2  Covenant Not to Compete.  For a one-year period following the
termination of Employee's employment for any reason by the Employee, Employee
shall not within a 15 mile

                                       2
<PAGE>

radius of any office of the Bank existing at the time of the termination of
employment, directly or indirectly, either as an employee, employer, consultant,
agent, greater than 10% stockholder, officer, director or in any other
individual or representative capacity (i) solicit the banking business (loan,
investment, deposit or otherwise) of any then existing customers of Paradigm,
the Bank or their subsidiaries, (ii) engage or participate in any business that
is in competition in any manner whatever with the business of Paradigm, the Bank
or their subsidiaries or (iii) solicit the employment of any person employed by
Paradigm, the Bank or their subsidiaries during the past twelve month's of
Employee's employment with the Bank. It is specifically provided that Employee's
covenant contained in this Section 5.2 shall survive the termination of this
Agreement.

     6.  Confidential Information.

         6.1  As used herein, "Confidential Information" means all technical
and business information (including financial statements and related books and
records, personnel records, customer lists, arrangements with customers and
suppliers, manuals and reports) of Paradigm, the Bank and their affiliates which
is of a confidential and/or proprietary character and which is either developed
by Employee (alone or with others) or to which Employee has had access during
his employment.  Employee shall, both during and after his employment with Bank,
protect and maintain the confidential and/or proprietary character of all
Confidential Information.  Employee shall not, during or after termination of
his employment, directly or indirectly, use (for himself or another) or disclose
any Confidential Information, for so long as it shall remain proprietary or
protectible as confidential, except as may be necessary for the performance of
his duties under this Agreement.  Upon termination of his employment, Employee
shall surrender to the Bank all Confidential Information and all other
information or documents proprietary to the Bank or its subsidiaries in
Employee's possession.

     7.  Termination.

         7.1 Termination of Agreement. Except as may otherwise be provided
herein, this Agreement may terminate prior to the end of the Term or any
extension thereof upon the occurrence of:

         (a) thirty (30) days after written notice of termination is given by
     Employee;

         (b) upon written notice of termination given by Bank; or

         (c) Employee's death or, at the Bank's option, upon Employee's becoming
     Disabled (as defined in Section 8.3 hereof).

Any notice of termination given by the Bank to Employee under Section 7.1(b)
above shall specify whether such termination is with or without Good Cause (as
defined in Section 8.4 hereof).

                                       3
<PAGE>

  8. Obligations of Bank Upon Termination.

     8.1  Termination by Employee; Termination for Good Cause.  If the Employee
terminates this Agreement pursuant to Section 7.1(a) above or if Bank terminates
this Agreement with Good Cause pursuant to Section 7.1(b) above, this Agreement
shall terminate without further obligations to Employee, other than those
obligations owing or accrued to, vested in, or earned by Employee through the
date of termination, including, but not limited to:

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

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

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

such obligations owing or accrued to, vested in, or earned by Employee through
the date of termination, including, but not limited to, such amounts and
benefits specified in clauses (a), (b), and (c) of this sentence, being
hereinafter collectively referred to as the "Accrued Obligations."  The
aggregate amount of such obligations owing or accrued to, vested in, or earned
by Employee through the date of termination, including, but not limited to, the
Accrued Obligations, shall be paid by the Bank to Employee in cash in one lump
sum within thirty (30) days after the date of termination.

     8.2  Termination Other Than for Good Cause.  If the Bank terminates this
Agreement without Good Cause pursuant to Section 7.1(b) hereof, the Bank shall
pay to Employee cash in one lump sum within thirty (30) days after the date of
termination the aggregate of the following amounts:

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

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

                                       4
<PAGE>

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

     (d) any and all other Accrued Obligations not otherwise described in clause
(a), (b) or (c) of this Section 8.2;

     (e) an amount equal to ($123,000 divided by twelve) times the number of
months remaining in the stated term of this Agreement, less statutory payroll
deductions; provided, however, that the multiplier used in this calculation
shall not be less than twelve.

     8.3  Termination by Death or Disability.  If Employee's employment is
terminated under Section 7.1(c) hereof by reason of Employee's death or
Disability, the Bank shall pay to Employee's legal representatives cash in one
lump sum within thirty (30) days after the date of Employee's death or
Disability the full amount of the obligations owing or accrued to, vested in, or
earned by Employee through the date of Employee's death or disability,
including, but not limited to, the Accrued Obligations.  Anything in this
Agreement to the contrary notwithstanding, the Employee's legal representatives
or beneficiaries shall be entitled to receive benefits provided under the then
existing or applicable plans, programs, or arrangements and policies of the Bank
relating to death or disability.  As used herein, "Disabled" shall have the
meaning as being disabled under the other benefit plans of the Employer or if no
such determination is made then such determination shall be made by the Board of
Directors of the Bank.

     8.4  Good Cause.  As used in this Agreement, the term "Good Cause"
means (i) willful misconduct by Employee, (ii) the gross neglect by Employee of
his duties as an employee, officer or director of Bank, (iii) the commission by
Employee of an act, other than an act taken in good faith within the course and
scope of Employee's employment, which is directly detrimental to Bank and which
act exposes Bank to material liability, (iv) the willful violation by Employee
of any Bank policy, (v) the Employee having been indicted for or convicted of
any felony or other crime involving moral turpitude, (vi) current illegal use of
narcotics, illegal drugs or controlled substances by Employee, or the current
use of alcohol by the Employee to an extent which materially impairs the
performance of Employee's duties or (vii) a willful breach by Employee of any of
the terms of this Agreement.

     8.5  Change in Control.  As used herein, the term "Change in Control"
shall mean (a) Paradigm or the Bank shall not be the surviving entity in any
merger, consolidation or other reorganization (or survives only as a subsidiary
of an entity other than a previously wholly-owned subsidiary of Paradigm)
(provided that the merger of the Bank with and into another wholly-owned
subsidiary of Paradigm shall not constitute a Change in Control), (b) the Bank
is merged or consolidated into, or otherwise acquired by, an entity other than a
wholly-owned subsidiary of the Paradigm, (c) Paradigm sells, leases or exchanges
all or substantially all of its assets to any other

                                       5
<PAGE>

person or entity (other than a wholly-owned subsidiary of Paradigm), (d)
Paradigm or the Bank is to be dissolved and liquidated, (e) any person or
entity, including a "group" as contemplated by Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, acquires or gains ownership or
control (including, without limitation, the power to vote or control the voting)
of more than 50% of the outstanding shares of Paradigm's or the Bank's voting
stock (based upon voting power) or (f) as a result of or in connection with a
contested election of directors, the persons who were directors of Paradigm
before such election shall cease to constitute a majority of the Board.

     9.  Parachute Payments.

         9.1 General. For the purposes of the determinations to be made pursuant
to Paragraph 9.2 below, capitalized terms that are not defined in this Agreement
shall have the meanings set forth in Section 280G of the Internal Revenue Code
of 1986, as amended ("Code"). A "Change in Control" of Paradigm or the Bank
shall have the meaning set forth in Section 8.6 above and shall refer to an
ownership change described in Section 280G(b)(2)(A)(i) of the Code with respect
to Paradigm or the Bank. "Incentive Agreements" mean this Agreement and all
stock option agreements, incentive compensation unit agreements, supplemental
pension agreements or other arrangements or agreements, whether in existence on
the date hereof or hereafter entered into by the Employee and Paradigm or the
Bank that entitled the Employee to receive payments or other property from
Paradigm or the Bank.

         9.2  Limitation.  If the Aggregate Present Value of Parachute Payments
payable to or in respect of the Employee by reason of a Change in Control of
Paradigm or the Bank under all Incentive Agreements then in effect is greater
than or equal to three times the Base Salary, then the Aggregate Present Value
of Parachute Payments made to the Employee shall be limited to an amount equal
to the greater of the portion of the Parachute Payments constituting Reasonable
Compensation or three times the Base Salary less one dollar.  Any amount
required to be withheld from payments made to the Employee pursuant to this
Paragraph 9.2 shall be deducted from the Change in Control-Lump Sum Payment
referred to in Section 8.2 above.

     10.  Notices.  Any notice under this Agreement must be in writing and may
be given by certified or registered mail, postage prepaid, addressed to the
party or parties to be notified with return receipt requested, or by delivering
the notice in person.  For purposes of notice, the address of Employee or any
administrator, executor or legal representative of Employee or his estate, as
the case may be, shall be the last address of the Employee on the records of
Bank.  The address of Bank shall be its principal business address.

     11.  Controlling Law.  This Agreement shall be governed by the laws of the
State of Texas.

                                       6
<PAGE>

     12.  Entire Agreement.  This Agreement contains the entire agreement of the
parties and may only be amended in writing signed by both parties; provided,
that no amendment to this Agreement shall be effective unless authorized by
resolution of the Board of Directors and signed on behalf of Bank by a duly
authorized officer of Bank other than Employee.

     13.  Remedies, Modification and Separability.  Employee and Bank agree that
Employee's breach of Sections 5 and 6 of this Agreement will result in
irreparable harm to Bank, that no adequate remedy at law is available, and that
Bank shall be entitled to injunctive relief; however, nothing herein shall
prevent Bank from pursuing any other remedies at law or at equity available to
Bank.  Should a court of competent jurisdiction declare any of the covenants set
forth in Sections 5 or 6 unenforceable, the court shall be empowered to modify
or reform such covenants so as to provide relief reasonably necessary to protect
the interests of Bank and Employee and to award injunctive relief, or damages,
or both, to which Bank may be entitled.  If any provision of this Agreement is
declared by a court of last resort to be invalid, Bank and Employee agree that
such declaration shall not affect the validity of the other provisions of this
Agreement.  If any provision of this Agreement is capable to two constructions,
one of which would render the provision void and the other of which would render
the provision valid, then the provision shall have the construction which
renders it valid.

     14.  Preservation of Business; Fiduciary Responsibility.  Employee shall
use his best efforts to preserve the business and organization of Bank, to keep
available to Bank the services of its present employees and to preserve the
business relations of Bank with suppliers, distributors, customers and others.
Employee shall not willfully commit any act which would injure Bank.  Employee
shall observe and fulfill proper standards of fiduciary responsibility attendant
upon his Office.

     15.  Assignments.  This Agreement is personal to Employee and without the
prior written consent of Bank shall not be assignable by Employee other than by
will or the laws of descent and distribution.  This Agreement shall inure to the
benefit of and be enforceable by Employee's legal representatives and heirs.
This Agreement shall inure to the benefit of and be binding upon Bank and its
successors and assigns.  Bank shall require any corporation, entity, individual
or other person who is the successor (whether direct or indirect, by purchase,
merger, consolidation, reorganization, or otherwise) to all or substantially all
of the business or assets of Bank to expressly assume and agree to perform, by a
written agreement in form and substance satisfactory to Employee, all of the
obligations of Bank under this Agreement.  As used in this Agreement, the term
"Bank" shall mean Bank as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, written agreement, or otherwise.

     16.  Waiver of Breach.  The waiver by Bank of a breach of any provision of
this Agreement by Employee shall not operate or be construed as a waiver by Bank
of any subsequent breach of Employee.

                                       7
<PAGE>

     17.  Revocation of Previous Employment Agreements.  Any and all previous
employment agreements existing between Bank and Employee are revoked and
canceled.

     18.  Headings.  The section headings in this Agreement are for convenience
of reference and shall not be used in the interpretation or construction of this
Agreement.

     19.  Execution.  This Agreement may be executed in multiple counterparts
each of which shall be deemed an original and all of which shall constitute one
instrument.

     Employee acknowledges that he has read this Agreement and understands that
signing this Agreement is a condition of employment.

     IN WITNESS WHEREOF, this Agreement is executed as of the 10th day of
December, 1999 to be effective upon the approval of the Agreement by the Board
of Directors of the Bank.

"EMPLOYEE"                          "BANK"

                                    DAYTON STATE BANK

_____________________________       By:_________________________________
James A. Woodall, Jr.                  Name:
                                            ----------------------------

                                       Title:
                                              --------------------------

                                       8

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