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Exhibit 10.3    
    

 
 

STATE NATIONAL BANCSHARES, INC.
  DIRECTOR FEE STOCK PLAN    
    

Scope and Purpose of Plan  

        The purpose of the Director Fee Stock Plan is to provide a means by which State National Bancshares, Inc. (the "Company") may attract, retain and reward
competent directors by providing them with the opportunity to participate in the increased value of the Company which their efforts, initiative, and skill have helped produce. 

        It
is the opinion of a majority of the shareholders of the Company that it is in the best interest of the Company and its shareholders that the Directors of the Company be compensated
through the grant of Director Fees that may be taken in cash or in stock, pursuant to the terms of this Plan, as a means of setting the environment for their maximum commitment to the Company and
continued association with the Company. 

        THEREFORE, the Board of Directors of the Company have authorized the Chairman of the Board of Directors and the President to establish
this Director Fee Stock Plan in accordance with the following terms: 

SECTION 1: DEFINITIONS  

        1.01 "Administrative Committee" means the Administrative Committee established by the Board of Directors of the Company
pursuant to Section 3 hereof. 

        1.02 "Common Stock" means shares of Common Stock of State National Bancshares, Inc. 

        1.03 "Company" means State National Bancshares, Inc. or any successor thereto by merger, consolidation, liquidation,
or other reorganization which has made provision for adoption of the Plan and the assumption of the Company's obligations thereunder, as well as any other subsidiary 51% or more of the outstanding
common stock which is owned by the Company. 

        1.04 "Director" means any person who is duly elected and has become qualified to serve as a member of the Board of Directors
of the Company. 

        1.05 "Director Fees" means the amount paid by the Company to a Director in consideration of their service as a member of the
Board of Directors to the Company. 

        1.06 "Effective Date" of the Plan means July 1, 1999. 

        1.07 "Employee" means an individual employed by the Company. 

        1.08 "Fair Market Value" of the Common Stock shall be the value as established by the Board of Directors in January of each
year. The Fair Market Value established each January will be used for that calendar year as provided in Section 4 hereof. From the Effective Date of this Agreement through December 31,
1999, the Fair Market Value of the Common Stock shall be $15.00 (fifteen dollars) per share. 

        1.09 "Participant" means a Director who is eligible to make an election. 

        1.10 "Plan" means the State National Bancshares, Inc. Director Fee Stock Plan. 

        1.11 "Termination Date" means the date a Participant's membership on the Board of Directors of the Company terminates by
reason of death, retirement, resignation, discharge, or otherwise. 

1

 

SECTION 2: ADMINISTRATION  

        2.01    Establishment of an Administrative Committee.    The Board of Directors of the Company shall establish an
Administrative Committee consisting of two or more executive officers of the Company who are ineligible to become Participants, to administer, construe, and interpret this Plan. No member of the
Administrative Committee shall be liable for any act done, or determination made, in good faith. Any Administrative Committee member appointed who shall be an Employee shall serve without
compensation, and such person shall automatically cease to be an Administrative Committee member upon his or her termination of employment with the Company. An Administrative Committee member may
resign at any time by giving thirty (30) days prior written notice to the Company. The Board of Directors of the Company may remove an Administrative Committee member at any time by written
notice, with or without cause, and may appoint a successor Administrative Committee member. 

        The
Board of Directors of the Company shall act as the Administrator until and unless an Administrative Committee is appointed. 

        2.02    Duties of Administrative Committee.    The Administrative Committee shall be responsible for establishing and
carrying out the objectives of this Plan, in accordance with its terms. Each December, the Administrative Committee will provide each Director with a form on which he or she will make their election
to receive Director Fees in cash or in Common Stock of the Company for the succeeding calendar year. 

        2.03    Powers of Administrative Committee.    The Administrative Committee shall have the sole and exclusive
authority and responsibility for administering, construing and interpreting this Plan. The Administrative Committee shall have all powers and discretion as may be necessary to discharge its duties and
responsibilities under this Plan. Any action on matters within the discretion of the Administrative Committee shall be final and conclusive as to all persons affected. The Administrative Committee
shall at all times endeavor to exercise its discretion in a non-discriminatory manner. 

        2.04    Administrative Committee Records and Reports.    The Administrative Committee shall maintain adequate books
and records of all of its proceedings and acts and all such books of account, records, and other data as may be necessary for administration of this Plan. The Administrative Committee shall make
available to each Director, upon written request, such of the Plan's records as pertain to that Director for examination at reasonable times during normal business hours. 

SECTION 3: METHOD OF ELECTION  

        3.01    Method of Election.    Each December preceding the year the Election shall be effective, each Director will
elect whether he or she wants to receive his or her Director Fees in cash or in Common Stock of the Company. This election shall be in writing on a form provided by the Administrative Committee and
returned to the Administrative Committee prior to the beginning of the Plan year in question. The election, once made, cannot be changed until the following December. 

        3.02    Partial Election.    There shall be no partial elections, i.e., an election must be made such that all
Director Fees earned for that year shall be paid either fully in cash or fully in Common Stock (except to the extent that there are fractional shares). 

        3.03    Deemed Election.    Should an election form not be returned to the Administrative Committee on time, the
election made in the previous year will be deemed to be the election made for the year in which no timely election was made. However, for the 1999 calendar year, each Director shall make his or her
election for the period July 1, 1999 to December 31, 1999 prior to July 31, 1999. If no election is made, the Director will be deemed to have elected to receive cash. 

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SECTION 4: PAYMENT OF DIRECTOR FEES  

        4.01    Payment of Fees.    Should a Director elect to receive his or her Director Fees in cash, payment shall be made
monthly. Should a Director elect to receive his or her Director Fees in Common Stock, the shares of Common Stock shall be issued annually each January for fees payable for the immediately preceding
calendar year. 

        4.02    Fractional Shares.    There shall be no fractional shares of Common Stock issued. Upon calculation, pursuant
to Section 4.04, of the number of shares to which a Director shall be entitled, if a fractional amount of shares result, cash in lieu of such fractional shares shall be paid to the Director. 

        4.03    Determination of Fair Market Value of Common Stock.    The Board of Directors shall determine the Fair Market
Value of the Common Stock as soon as this Plan becomes effective, or within a reasonable time. This initial Fair Market Value shall be used for the remainder of the 1999 calendar year. Beginning
January of 2000, the Fair Market Value of the Common Stock of the Company shall be determined by the Board of Directors each January. This Fair Market Value shall be used, as provided in
Section 4.04, for the calendar year in which it was determined. 

        4.04    Calculation of Number of Shares Issued.    The number of shares to be issued shall be calculated by dividing
the amount of the Director Fees payable for such year by the Fair Market Value of the Common Stock. 

SECTION 5: RESTRICTIONS ON STOCK AND NONALIENATION OF BENEFITS  

        5.01    Restriction Legends.    There will be appropriate restriction legends affixed to the Common Stock
certificates. The restriction legends shall reflect the following restrictions: 

"The
securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act"), or any state securities laws and neither such securities nor any
interest therein may be offered, sold, pledged, assigned or otherwise transferred unless (1) a registration statement with respect thereto is effective under the Act and any applicable state
securities laws or (2) the Company receives an opinion of counsel, which counsel and opinion are reasonably satisfactory to the Company, that such securities may be offered, sold, pledged,
assigned or transferred in the manner contemplated without an effective registration statement under the Act or applicable state securities laws." 

        5.02    Nonalienation of Benefits.    No right or benefit under this Plan shall be subject to anticipation,
alienation, sale, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate,
sell, assign, pledge, encumber, or charge of the same shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the
person entitled to such benefits. If any Participant or Beneficiary hereunder should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right or benefit
hereunder, then such right or benefit shall, in the discretion of the Administrative Committee, cease and determine, and in such event, the Company may hold or apply the same or any part thereof for
the benefit of the Participant or Beneficiary, his or her spouse, children, or other dependents, or any of them, in such manner and in such proportion as the Administrative Committee may deem proper. 

SECTION 6: AMENDMENT AND DISCONTINUANCE OF PLAN  

        The Board of Directors may terminate this Plan at any time. However, any amendment or termination of this Plan shall not affect the rights of Participants to
payments due to them, for services performed by them, at or before the time of such amendment or termination. 

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SECTION 7: GOVERNING LAW  

        All questions arising with respect to the provisions of this 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. The obligation of the Company to sell and deliver Common Stock under this 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 common Stock. Such issuance of Common Stock shall be done in a manner such that it complies with federal securities and banking
regulatory laws. 

        IN WITNESS WHEREOF, the undersigned have executed this Plan on behalf of State National Bancshares, Inc. on this 13th
day of July, 1999. 

	

 	
 	

 	

/s/  TOM C. NICHOLS      
 Tom C. Nichols, Chairman and Chief Executive Officer

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Exhibit 10.3

STATE NATIONAL BANCSHARES, INC. DIRECTOR FEE STOCK PLANQuickLinks
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Exhibit 10.4    
    

  

   

   

   

   

   

   

 
 

STATE NATIONAL BANCSHARES, INC.    
    
    SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN    
    

  

   

   

   

   

   

   

   

   

   

  

 
 

TABLE OF CONTENTS    
    

	ARTICLE I.	 	 
	 	

Section 1.01. Establishment of Plan	
 	

1
	 	Section 1.02. Purposes	 	1
	

ARTICLE II. DEFINITIONS	
 	

 
	 	

Section 2.01. Affiliates	
 	

1
	 	Section 2.02. Agreement	 	1
	 	Section 2.03. Adjusted Net Credit Rate	 	1
	 	Section 2.04. Adjustment Percentage	 	1
	 	Section 2.05. Average After-Tax Policy Rate	 	2
	 	Section 2.06. Beneficiary	 	2
	 	Section 2.07. Benefit(s)	 	2
	 	Section 2.08. Board	 	2
	 	Section 2.09. Change of Control	 	2
	 	Section 2.10. Company	 	3
	 	Section 2.11. Compensation Committee	 	3
	 	Section 2.12. Cost of Funds Expense	 	3
	 	Section 2.13. Effective Date	 	3
	 	Section 2.14. Employee	 	3
	 	Section 2.15. Employer	 	3
	 	Section 2.16. Policy Earnings	 	3
	 	Section 2.17. Policy Earnings Adjustment Factor	 	3
	 	Section 2.18. Policy Earnings Retirement Benefit	 	3
	 	Section 2.19. Normal Retirement Age	 	3
	 	Section 2.20. Normal Retirement Date	 	3
	 	Section 2.21. Participant	 	3
	 	Section 2.22. Plan	 	3
	 	Section 2.23. Plan Year	 	3
	 	Section 2.24. Policy	 	3
	 	Section 2.25. Premiums	 	4
	 	Section 2.26. Pre-Retirement Account	 	4
	 	Section 2.27. Retirement	 	4
	 	Section 2.28. Tax Rate	 	4
	 	Section 2.29. Termination of Service	 	4
	 	Section 2.30. Vest, Vested	 	4
	

ARTICLE III. ADMINISTRATION	
 	

 
	 	

Section 3.01. Administration of the Plan	
 	

4
	 	Section 3.02. Operation of Compensation Committee	 	4
	 	Section 3.03. Compensation Committee Decisions	 	5
	 	Section 3.04. Compensation Committee Powers	 	5
	 	Section 3.05. Compensation Committee Conflicts of Interest	 	5
	 	Section 3.06. Delegation of Responsibilities	 	5
	 	Section 3.07. Duties of the Compensation Committee	 	5
	 	Section 3.08. Records and Reports	 	6
	 	Section 3.09. Appointment of Agents	 	6
	 	Section 3.10. Information From Company	 	6
	 	Section 3.11. Payment of Expenses	 	6
	 	Section 3.12. Claims Procedure	 	6

	

ARTICLE IV. PARTICIPATION	
 	

 
	 	

Section 4.01. Participation	
 	

7
	

ARTICLE V. BENEFITS	
 	

 
	 	

Section 5.01. Death	
 	

7
	 	Section 5.02. Retirement	 	7
	 	Section 5.03. Termination of Service	 	7
	 	Section 5.04. Change in Control	 	7
	 	Section 5.05. Termination of Plan	 	8
	

ARTICLE VI. FORFEITURE	
 	

 
	 	

Section 6.01. Nondisclosure	
 	

8
	 	Section 6.02. Nonsolicitation and Noncompetition	 	9
	 	Section 6.03. Survival	 	10
	

ARTICLE VII. AMENDMENT AND TERMINATION	
 	

 
	 	

Section 7.01. Amendment of the Plan	
 	

10
	 	Section 7.02. Termination of the Plan	 	10
	

ARTICLE VIII. MISCELLANEOUS	
 	

 
	 	

Section 8.01. Nontransferability	
 	

11
	 	Section 8.02. No Claim or Right	 	11
	 	Section 8.03. General Creditors	 	11
	 	Section 8.04. Applicable Law	 	11
	 	Section 8.05. Venue	 	11
	 	Section 8.06. Gender and Number	 	11
	 	Section 8.07. Unsecured Interest	 	11
	 	Section 8.08. Employment	 	11
	 	Section 8.09. Effect on Other Company Benefit Plans	 	11
	 	Section 8.10. Binding Obligation of the Company and any Successor in Interest	 	11
	 	Section 8.11. Severability	 	11
	

ARTICLE IX. BENEFICIARIES	
 	

 
	 	

Section 9.01. Beneficiary Designation	
 	

12
	 	Section 9.02. No Beneficiary Designation/Death of Beneficiary	 	12
	 	Section 9.03. Personal Data to Compensation Committee	 	12
	 	Section 9.04. Address for Notification	 	12

  

STATE NATIONAL BANCSHARES, INC.  

 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN  

 
 

ARTICLE I.    
    

        Section 1.01.    Establishment of Plan.    State National
Bancshares, Inc. (the "Company") hereby establishes, effective as of July 1, 2002, a supplemental retirement plan for certain Participants (as defined below), which shall be known as the  STATE NATIONAL BANCSHARES,
 INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (the "Plan"). With respect to Participants participating in this Plan,
this Plan supersedes any existing plans which provide or provided the same or similar Benefits unless specifically continued by the Board. 

        Section 1.02.    Purposes.    The purposes of this Plan are to
enable the Company and its Affiliates (as defined below) to attract and retain employees of outstanding competence and to provide additional retirement benefits for such employees. This Plan is
intended to constitute an unfunded plan primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees. Without limiting the generality
of the forgoing, and notwithstanding any provision hereof to the contrary, all references herein and in any Agreement to a "Policy" are designed solely for the purpose of calculating a Participant's
Benefit hereunder, and the Company has no obligation to purchase a Policy and, if purchased, neither such Participant nor such Participant's Beneficiary will have any right, title or interest in such
Policy and, without limitations, shall have rights under the Plan and Agreement which are no greater than those of an unsecured creditor of the Company. 

 
 

ARTICLE II.
  DEFINITIONS    
    

        Section 2.01.    Affiliates shall mean any direct or indirect subsidiary
of the Company adopting this Plan. 

        Section 2.02.    Agreement shall mean the "State National
Bancshares, Inc. Supplemental Executive Retirement Plan Agreement" as entered into between an Employer and each Participant in this Plan, and each of which (i) will set forth an
Adjustment Percentage, a Vesting schedule, and such other information as the Compensation Committee may determine, and (ii) will have an Appendix A attached. Nothing herein shall limit
the Employer's right or ability to enter into more than one Agreement with a Participant, and all references hereunder shall be deemed to refer  separately to each Agreement of such Participant, so that,
without limitation, a Participant's Benefits hereunder as a result of entering into a
particular Agreement shall be computed as if such Agreement was the Participant's only Agreement hereunder and, without limitation, such Participant's total Benefits at any time of reference shall be
equal to the sum of his Benefits, computed separately with respect to each of his Agreements, under each of his Agreement in effect at the time of reference. 

        Section 2.03.    Adjusted Net Credit Rate shall mean, for each Policy for
each Plan Year, (i) the "net credit rate" percentage (however designated in such Policy) paid by the issuing insurance companies with respect to such Policy with respect to such Plan Year, as
reasonably determined by the Compensation Committee based on the terms and provisions of such Policy and information from each respective issuing insurance company,  reduced by the excess (if any) of
(ii) one percent (1%), over (iii) the quotient of (a) the expenses which the Compensation
Committee determines to be allocable to such Policy, divided by (b) the cash value of the Policy on the last day of the preceding Plan Year. 

        Section 2.04.    Adjustment Percentage shall mean the percentage as so
designated in a Participant's Agreement. 

1

 

        Section 2.05.    Average After-Tax Policy Rate shall be
determined with respect to each Participant for each Plan Year, and shall mean a percentage equal to the product of (i) such Participant's Adjusted Net Credit Rate, multiplied by
(ii) one (1) minus the Tax Rate for such Plan Year. 

        Section 2.06.    Beneficiary shall mean the person, persons, or estate of
a Participant, entitled to receive any Benefits as a result of the death of a Participant under this Plan or any Policy issued hereunder. 

        Section 2.07.    Benefit(s) shall mean, collectively, all of the benefits
which, under the terms of the Plan and Agreement of reference are, or may become, payable to a Participant; provided, further, that where reference to a particular Benefit is intended, reference will
be made to the specific Benefit. 

        Section 2.08.    Board shall mean the board of directors of the Company
unless otherwise indicated or the context otherwise requires. 

        Section 2.09.    Change of Control shall mean and shall be deemed to have
occurred for purposes of this Plan on the first to occur of the following: 

        (a)   a
change in the ownership of the capital stock of the Company where a corporation, person, or group acting in concert, (a "Person"), other
than (i) a Person who is a current owner or director or a Person controlled by a current owner or director or (ii) any savings, pension or other benefit plan for
the employees of the Company or its subsidiaries, holds or acquires, directly or indirectly, beneficial ownership of a number of shares of capital stock of the Company which constitutes
fifty-one percent (51%) or more of the combined voting power of the Company's then outstanding capital stock then entitled to vote generally in the election of directors. For purposes of
this Subsection (a), the purchasers of capital stock of the Company in an initial or subsequent public offering shall not be deemed to be a "group acting in concert"; 

        (b)   the
persons who were members of the Board immediately prior to a tender offer, exchange offer, contested election, or any combination of the foregoing, cease to
constitute a majority of the Board; 

        (c)   the
effective date of a merger, consolidation, or reorganization plan that is adopted by the Board involving the Company in which the Company is not the surviving entity
and the shareholders of the Company own less than fifty-one percent (51%) of the combined voting power of the surviving entity entitled to vote generally in the election of directors
immediately after such effective date; 

        (d)   the
effective date a sale of all or substantially all of the assets of the Company. For purposes of this Plan, a sale of all or substantially all of the assets of the
Company shall be deemed to occur if any Person (other than a current owner or director) acquires (or during the 12-month period ending on the date of the most recent acquisition by such
Person, has acquired) gross assets of the Company that have an aggregate fair market value equal to fifty-one percent (51%) of the fair market value of all of the gross assets of the
Company immediately prior to such acquisition or acquisitions; 

        (e)   a
tender offer or exchange offer is made by any Person (other than a current owner) which is successfully completed and which results in such Person beneficially owning
either fifty-one percent (51%) or more of the Company's outstanding shares of capital stock or shares of capital stock having fifty-one percent (51%) or more of the combined
voting power of the Company's then outstanding capital stock, and sufficient shares are acquired under the offer to cause such Person to own fifty-one percent (51%) or more of such voting
power; or 

        (f)    any
other transactions or series of related transactions occurring which have substantially the same effect as the transactions specified in any of the preceding clauses
of this Section. 

2

 

        Section 2.10.    Company shall mean State National
Bancshares, Inc. 

        Section 2.11.    Compensation Committee shall mean the Compensation
Committee of the Board authorized pursuant to Section 3.02 to manage and administer this Plan. 

        Section 2.12.    Cost of Funds Expense shall be determined as of the last
day of each Plan Year, and shall mean the product of (i) multiplied by (ii), where (i) is the sum of (a) the Premiums, plus (b) the sum of all previous Plan Year's Cost of
Funds Expense, and where (ii) is the Average After-Tax Policy Rate. 

        Section 2.13.    Effective Date shall mean July 1, 2002. 

        Section 2.14.    Employee shall mean any person who is in the regular
full-time employment of an Employer. 

        Section 2.15.    Employer shall mean the Company and/or an Affiliate
which is employing an Employee as determined by the personnel rules and practices of the Company and/or an Affiliate. The term Employee shall not include persons retained by the Company and/or an
Affiliate who are solely retained as consultants. 

        Section 2.16.    Policy Earnings shall mean, for each Plan Year, the
after-tax income of a Participant's Policy with respect to such Plan Year as defined by FASB Technical Bulletin 85-4, applied as though the Policy were purchased on the
Effective Date. 

        Section 2.17.    Policy Earnings Adjustment Factor shall mean, for each
Plan Year, the excess of (i) the Participant's Adjustment Percentage, over (ii) the maximum Federal income tax rate in effect for taxpayers such as the Company with respect to such Plan
Year. 

        Section 2.18.    Policy Earnings Retirement Benefit shall mean, for each
Plan Year, the quotient of (i) the excess (if any) of (a) a Participant's Policy Earnings for such Plan Year, over (b) such Participant's Cost of Funds Expense for such Plan Year,
divided by (ii) such Participant's Policy Earnings Adjustment Factor. 

        Section 2.19.    Normal Retirement Age shall mean Participant's
sixty-fifth (65th) birthday. 

        Section 2.20.    Normal Retirement Date shall mean the Participant's
Termination of Service for any reason on or after attaining his Normal Retirement Age.. 

        Section 2.21.    Participant shall mean an Employee (i) who is
selected to participate in this Plan by the Compensation Committee, (ii) who agrees to be bound by the terms of this Plan as evidenced by such Participant's execution of an Agreement, and
(iii) continues to have unpaid Benefits hereunder. 

        Section 2.22.    Plan shall mean this State National
Bancshares, Inc. Supplemental Executive Retirement Plan, as amended from time to time. 

        Section 2.23.    Plan Year shall mean the period from the Effective Date
to the following December 31st, and thereafter shall mean calendar year. 

        Section 2.24.    Policy shall mean, collectively, each contract of life
insurance described in Appendix A of a Participant's Agreement as either (i) shall be actually purchased and maintained by the Employer on the life of such Participant, or (ii) if
one or more of such contracts are not actually purchased (or are subsequently surrendered or lapse), the Company agrees that it shall make arrangements to receive annual insurance contract
illustrations that assume such insurance contract(s) have been purchased and remain in effect at the time of reference. Without limitation, all calculations hereunder that relate to or rely on such
"Policy" shall be made in the same manner, and shall have the same effect, as though each insurance contract described in Appendix A has been purchased and 

3

 

remains
in effect. Notwithstanding any provision hereof to the contrary, where references are made hereunder to terms that may vary among contracts composing a Policy including, without limitation,
such terms as "net credit rate," "after-tax income," "Premiums," "Cost of Funds Expense," and similar, the meaning and amount of such terms shall be determined by (iii) determining
the meaning or amount separately for each insurance contract composing the Policy, and (iv) then aggregating such amounts determined under (iii), with the result that each such term shall be
deemed to refer only to such aggregate determined under (iv); provided, further, without limitation, that the calculations under (iii) and (iv) shall be made in the sole discretion of
the Compensation Committee, but who shall be required to treat each Participant similarly situation in a consistent manner. 

        Section 2.25.    Premiums shall mean, with respect to each Participant at
the time of reference, the aggregate premiums paid (or which would have been paid during periods in which the Policy is not in effect) by the Company to purchase a Policy. 

        Section 2.26.    Pre-Retirement Account shall mean an account
which will be maintained on the books of the Employer and to which, as of the last day of each Plan Year preceding the Participant's Normal Retirement Date, shall be credited a Participant's Policy
Earnings Retirement Benefit for such Plan Year and from which shall be deducted all Benefits paid to such Participant with respect to such Plan Year; provided, further, without limitation, that any
such crediting will terminate upon the Participants Termination of Service. 

        Section 2.27.    Retirement shall mean a Participant's Termination of
Service with an Employer if, and only if, it occurs on or after such Participant has attained his Normal Retirement Age. 

        Section 2.28.    Tax Rate shall mean, for each Plan Year, the Company's
combined marginal income tax rate with respect to such Plan Year, without limitation, as reasonably determined by the Compensation Committee. 

        Section 2.29.    Termination of Service shall mean the Participant's
ceasing to be employed by an Employer for any reason. 

        Section 2.30.    Vest, Vested, and similar terms shall mean the
percentage, which shall be set forth in his Agreement, of a Participant's Pre-Retirement Account to which he shall be entitled under the existing circumstances upon a Termination of
Service prior to attaining his Normal Retirement Age. 

 
 

ARTICLE III.
  ADMINISTRATION    
    

        Section 3.01.    Administration of the Plan.    This Plan shall
be administered by the Compensation Committee of the Board. If no Compensation Committee then exists, the Board shall act as the Compensation Committee. All references herein to administration of this
Plan will refer to the Compensation Committee, and not the Board, unless otherwise provided. 

        Section 3.02.    Operation of Compensation
Committee.    Subject to Section 3.01, the Compensation Committee shall be appointed by the Board, and the
Board may from time to time appoint members of the Compensation Committee in substitution for members previously appointed and may fill vacancies, however caused, in the Compensation Committee. A
majority of its members shall constitute a quorum of the Compensation Committee. All determinations of the Compensation Committee shall be made by a majority of such quorum. Any decision or
determination reduced to writing and signed by all members of the Compensation Committee shall be fully as effective as if it had been made by a majority vote at a meeting duly called and held. The
Compensation Committee shall also have express authorization to hold Compensation Committee meetings by means of telephone conference or other similar communications equipment by means of which all
persons participating in the meeting can hear each other. 

4

 

        Section 3.03.    Compensation Committee Decisions.    Decisions
and determinations made by the Compensation Committee shall be final and binding upon all parties, including the Company and/or Affiliate, Participants, and Employees. Subject to the express
provisions of this Plan, the Compensation Committee shall, in its sole discretion have complete authority to: (a) interpret this Plan; (b) to establish, modify and amend any rules and
regulations adopted by the Compensation Committee relating to this Plan; and (c) to make any other determinations it believes necessary or advisable for the administration of this Plan. 

        Section 3.04.    Compensation Committee Powers.    Subject to
the express provisions in Section 4.01 hereof, the Compensation Committee shall have exclusive power to select in its sole discretion those
Employees employed by the Company and/or the Affiliate who will participate in this Plan and who will be eligible to receive Benefits under this Plan. In making such determination, the Compensation
Committee may take into account the nature of the services rendered by the respective Employees, their present and potential contributions to the success of the Company and/or the Affiliate, and such
other factors as the Compensation Committee in its discretion shall deem relevant. 

        Section 3.05.    Compensation Committee Conflicts of
Interest.    Notwithstanding any other provision of this Plan, no member of the Compensation Committee shall participate in any manner in a determination to allow
such member to become a Participant in this Plan or provide to such member Benefits under Article IV hereof, or in the determination of the terms
and conditions thereof. 

        Section 3.06.    Delegation of Responsibilities.    The
responsibilities of each member of the Compensation Committee may be specified by the Board. In the event no such delegation is made by the Board, the members of the Compensation Committee may
delegate the responsibilities among themselves, in which event the Compensation Committee shall notify the Board in writing of such action and specify the responsibilities of each member. The Board
thereafter shall accept and rely upon any documents executed by the appropriate member or until such time as the Board and the members of the Compensation Committee file with the Board a written
revocation of such designation. 

        Section 3.07.    Duties of the Compensation Committee.    The
primary responsibility of the Compensation Committee is to administer this Plan for the exclusive benefit of Participants and their Beneficiaries, subject to the specific terms of this Plan. The
Compensation Committee shall administer this Plan in accordance with its terms and shall have the power and discretion to construe the terms of this Plan and to determine all questions arising in
connection with the administration, interpretation, and application of this Plan. Any such determination by the Compensation Committee shall be conclusive and binding upon all persons. The
Compensation Committee may establish procedures, correct any defect, supply any information, or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable
to carry out the purposes of this Plan. The Compensation Committee shall have all powers necessary or appropriate to accomplish their duties under this Plan. 

        The
Compensation Committee shall be charged with the duties of the general administration of this Plan, including, but not limited to, the following: 

        (a)   to
determine, in its sole discretion, the eligibility of Employees to participate or remain a Participant pursuant to  Section 4.01 and to receive Benefits under this Plan; 

        (b)   to
maintain all necessary records for the administration of this Plan; 

        (c)   to
interpret the provisions of this Plan and to make and publish such rules for regulation of this Plan as are consistent with the terms hereof; 

        (d)   to
determine the size and type of any Policy to be purchased from any insurer, and to designate the insurer from which such contract shall be purchased; 

5

 

        (e)   to
compute and certify to the Board from time to time the premiums and other amounts to be paid under each Policy held hereunder; and 

        (f)    to
assist any Participant regarding his rights, Benefits, or elections available under this Plan. 

        Section 3.08.    Records and Reports.    The Compensation
Committee shall keep a record of all actions taken and shall keep all other books of account, records, and other data that may be necessary for proper administration of this Plan, and shall be
responsible for supplying all information and reports to the Internal Revenue Service, Department of Labor, Participants, Beneficiaries and others as required by law. 

        Section 3.09.    Appointment of Agents.    The Compensation
Committee may engage accountants, legal counsel, specialists, advisors, actuaries, and other persons as the Compensation Committee deems necessary or desirable in the connection with the
administration of this Plan. 

        Section 3.10.    Information From Company.    To enable the
Compensation Committee to perform their functions, the Company and/or the Affiliate shall supply full and timely information to the Compensation Committee on all matters relating to the compensation
of all Participants, their hours of service, their years of service, their Retirement, death, Disability, or termination of employment, and such other pertinent facts as the Compensation Committee may
require. The Compensation Committee may rely upon such information as is supplied by the Company and/or the Affiliate and shall have no duty or responsibility to verify such information. 

        Section 3.11.    Payment of Expenses.    All expenses of
administration of the Plan shall be paid by the Company and/or the Affiliate. Such expenses shall include any expenses incident to the functioning of the Compensation Committee, including, but not
limited to, fees of accountants, counsel, advisors, actuaries, and other specialists and their agents, and other costs of administering this Plan. 

        Section 3.12.    Claims Procedure.    If any Benefits become
payable under this Plan, the Participant (or designated Beneficiary in the case of the Participant's death) shall file a claim for Benefits by notifying the Compensation Committee in writing.
If the claim is wholly or partially denied, the Compensation Committee shall provide a written notice within sixty (60) days specifying the reason for the denial, the appropriate provisions on
which the denial is based, and additional material or information necessary to receive Benefits, if any. Such written notice shall indicate the steps to be taken if a review of the denial is desired.
All notices to be filed with the Compensation Committee, or any Employer, shall be filed at [Company address], Attention: Compensation Committee. 

        If
a claim is denied and a review is desired, the Participant (or designated Beneficiary in the case of the Participant's death) shall notify the Compensation Committee in writing within
sixty (60) days after receipt of a written notice of a denial of a claim. In requesting a review, the Participant or Beneficiary may review any appropriate documents and submit any written
issues and comments he or she feels are appropriate. The Compensation Committee shall then review the claim and provide a written decision within sixty (60) days of receipt of a request for
review. This decision shall state the specific reasons for the decision and shall include references to specific provisions on which the decision is based. 

        If
the determination reached by the Compensation Committee is unacceptable by the Participant (or designated Beneficiary), the Participant (or designated Beneficiary) shall be subject to
mandatory arbitration as more fully described in such Participant's Agreement. 

6

 

 
 

ARTICLE IV.
  PARTICIPATION    
    

        Section 4.01.    Participation.    Participants shall be
selected by the Compensation Committee from Employees of the Company and/or any Affiliate. No Employee shall be excluded because he or she is also a member of the Board. An Employee shall not become a
Participant hereunder unless and until such Employee and his Employer have executed an Agreement. 

 
 

ARTICLE V.
  BENEFITS    
    

        Section 5.01.    Death.    Notwithstanding any provision hereof
to the contrary, if a Participant dies while there is a balance in such Participant's Pre-Retirement Account, one hundred percent (100%) of the unpaid balance in such Participant's
Pre-Retirement Account (including the amount, if any, remaining to be paid under Section 5.02(a)) shall be paid in a lump sum to such
Participant's Beneficiary. Any payment due hereunder shall be paid on or before the first day of the second month following such Participant's death (and receipt of all paperwork necessary to process
any Benefit owning hereunder). 

        Section 5.02.    Retirement Benefits.    A Participant who
remains continuously in the employ of the Company until his Normal Retirement Date shall be entitled to receive the following Benefits at the following times: 

        (a)   Such
Participant shall receive the balance in his Pre-Retirement Account determined as of the last day of the Plan Year prior to the Plan Year in which
occurs his Normal Retirement Date, such balance to be paid in fifteen (15) equal annual installments, the first installment to be paid 30 days following the date of such Participant's
Normal Retirement Date, and the remaining installments being paid on the first day of each Plan Year. 

        (b)   As
of the first day of each Plan Year (and as soon as reasonably possible), commencing with the Plan Year immediately following the Plan Year in which his Normal
Retirement Date occurs, and ending with the Plan Year in which his death occurs, such Participant shall be paid an amount equal to his Policy Earnings Retirement Benefit earned in the immediately
preceding Plan Year. Without limitation, the Company's obligation to make the payments described in this Section 5.02(b) to Participants who have attained Normal Retirement Age prior to the
amendment or termination of the Plan, may not be reduced, directly or indirectly, by such amendment, and will survive the termination of this Plan. 

        Section 5.03.    Termination of Service.    Should a
Participant suffer a Termination of Service prior to attaining his Normal Retirement Age, such Participant shall be entitled to receive the then Vested portion of such Participant's
Pre-Retirement Account in a single lump sum cash payment thirty (30) days following such Participant's Termination of Service (and receipt of all paperwork necessary to process any
Benefit owning hereunder).

        Section 5.04.    Change in Control.    

        (a)   Effective
on the date of a Change in Control, each Participant shall fully Vest in his or her Pre-Retirement Account. 

        (b)   Without
limiting the generality of Section 5.04(a), if the Plan is continued subsequent to a Change in Control,
each Participant shall receive the Benefits due under this Plan pursuant to the terms hereof. If the acquiring entity terminates the Plan, or adopts an amendment which has the effect of reducing
Benefits which otherwise would accrue to a Participant during periods subsequent to the effective date of such amendment, then each affected Participant, in addition to any other Benefits he may earn
hereunder, shall be entitled to receive one hundred percent 

7

 

(100%)
of the balance in such affected Participant's Pre-Retirement Account payable to the Participant in a single lump sum payment thirty (30) days following the effective date of
the termination, or amendment causing such reduction, as applicable. 

        Section 5.05.    Termination of Plan.    In the event an
Employer (including, without limitation, the Company) terminates its participation in this Plan for any reason, including without limitation, its participation with respect to one or more (but less
than all) of its Employees who are Participants, then amounts credited to the Pre-Retirement Accounts of affected Participants shall fully Vest on the date of termination; provided,
further, without limitation, that the termination of the Plan shall not terminate the obligations of the Company which expressly survive such termination including, but not limited to, the obligation
to pay Vested amounts in each Participants Pre-Retirement Account, and the obligation to continue to pay Policy Earnings Retirement Benefits to Participants who have reached their Normal
Retirement Age prior to the date of such termination, which obligations shall survive the termination of the Plan. 

 
 

ARTICLE VI.
  PARTICIPANT COVENANTS—FORFEITURE    
    

        Notwithstanding any other provision of this Plan or any Participant's Agreement to the contrary, in the event a Participant violates any provision of this  Article VI (i) all Benefits otherwise owing to a Participant hereunder shall be immediately, and permanently, forfeited, and
(ii) in addition to forfeiture of Benefits, the Company and/or the Affiliate may enforce the provisions of this Article VI to fullest
extent permitted by law. 

        Section 6.01.    Nondisclosure.    The Company and/or the
Affiliate have provided and will provide the Participant with access to confidential, proprietary, and highly sensitive information relating to the business of the Company and the Affiliate which is a
competitive asset of the Company and/or the Affiliate, which may include, without limitation, information pertaining to: (i) the identities of customers with which or whom the Company and/or
the Affiliate do or seek to do business, as well as the point of contact persons and decision-makers at these customers; (ii) the identities of the vendors and suppliers with which or whom the
Company and/or the Affiliate do or seek to do business, as well as the point of contact persons and decision-makers at these vendors and suppliers; (iii) the volume of business and the nature
of the business relationship between the Company and/or the Affiliate and their customers, vendors and suppliers; (iv) the particular product, service, and pricing preferences of existing and
potential customers; (v) the financing methods employed by and arrangements between the Company and/or the Affiliate and their existing or potential customers, vendors, or suppliers;
(vi) the pricing of the Company's and/or the Affiliate's products and services, including any deviations from its standard pricing for particular customers, vendors, or suppliers;
(vii) the Company's and/or the Affiliate's costs, expenses, and overhead associated with the creation, production, delivery and maintenance of its products and services; (viii) the
Company's and/or the Affiliate's business plans and strategy, including territory assignments and rearrangements, sales and administrative staff expansions, marketing and sales plans and strategy,
proposed adjustments in compensation of sales personnel, revenue, expense and profit projections, and industry analyses; (ix) information regarding the Company's and/or the Affiliate's
employees, including their identities, skills, talents, knowledge, experience, compensation, and preferences; (x) financial information about the Company and/or the Affiliate; (xi) the
Company's and/or the Affiliate's financial results and business conditions; and (xii) computer programs and software developed by the Company and/or the Affiliate or their consultants. The
confidential, proprietary, and highly sensitive information is hereinafter referred to as "Proprietary Information." Proprietary Information shall include only such information of which Participant
has specific knowledge. 

        (a)   Proprietary
Information does not include information or know-how which: (1) was in the Participant's possession prior to its disclosure to him by the
Company and/or the Affiliate (as 

8

 

shown
by competent written evidence in the Participant's files and records immediately prior to the time of disclosure); or (2) is approved for release by written authorization of the Company
and/or the Affiliate. 

        (b)   The
Company and/or the Affiliate will disclose Proprietary Information to the Participant in order to enable him to perform his duties for the Company and/or the
Affiliate. The unauthorized disclosure of Proprietary Information could place the Company and/or the Affiliate at a competitive disadvantage. Consequently, the Participant shall not: (1) use,
at any time, any Proprietary Information for his own benefit or for the benefit of any person, entity, or corporation other than the Company and/or the Affiliate; or (2) disclose, directly or
indirectly, any Proprietary Information to any person who is not a current employee of the Company and/or the Affiliate, except in the performance of the duties assigned to him by the Company and/or
the Affiliate, at any time prior or subsequent to the termination of his employment with the Affiliate, without the express, written consent of the Company and the Affiliate. The Participant shall not
make copies, except in the performance of the duties assigned to him by the Company and/or the Affiliate, of any Proprietary Information, except as authorized in writing by the Company and the
Affiliate. 

        (c)   Any
and all items or documents, including items or documents containing Proprietary Information, furnished by the Company and/or the Affiliate or otherwise acquired or
developed by the Participant in connection with his employment or association with the Company and/or the Affiliate (collectively, "Recipient Materials") shall at all times by the property of the
Company and the Affiliate. Within twenty-four (24) hours after the termination of his employment or association with the Company and/or the Affiliate, the Participant shall return
to the Company and the Affiliate any Recipient Materials that are in his possession, custody, or control. 

        Section 6.02.    Nonsolicitation and Noncompetition.    The
Participant has received and will receive specialized knowledge and training and Proprietary Information (as outlined above) from the Company and/or the Affiliate during the term of this Plan, and
such knowledge, training, and/or Proprietary Information would provide an unfair advantage if used to compete with the Company and/or the Affiliate. Participant shall not, while Participant is
employed with the Affiliate and/or the Company and (i) following his Retirement, for the period during which Benefits are being paid hereunder, and (ii) following his Termination of
Employment for any reason other than Retirement, for a period of 24 months, directly or indirectly, individually or as an owner, lender, consultant, adviser, independent contractor, employee,
partner, officer, director or in any other capacity, alone or in association with other persons or entities, own, assist, finance, participate in or be employed within a fifty (50) mile radius
of any office or branch of the Company or any Affiliate by: (iii) any National or State chartered financial institution or financial holding company; or (iv) any business or other
endeavor that is in direct competition with the Company or the Affiliate in any business that the Company or the Affiliate was engaged in during Participant's employment. Because Participant has
developed and/or may develop considerable personal contacts with the clients served by the Company or the Affiliate during his employment with the Affiliate and/or the Company, Participant shall not,
while Participant is employed with the Affiliate and/or the Company and (v) following his Retirement, for the period during which Benefits are being paid hereunder, and (vi) following
his Termination of Employment for any reason other than Retirement, for a period of 24 months, either directly or indirectly, solicit individuals or other entities that are customers or  potential customers (as defined below) of the Affiliate or the Company for Affiliating services or any other services which are in competition with the
services provided by the Affiliate or the Company during Participant's employment. While Participant is employed with the Affiliate and/or the Company and (vii) following his Retirement, for
the period during which Benefits are being paid hereunder, and (viii) following his Termination of Employment for any reason other than Retirement, for a period of 24 months, Participant
shall not, either directly or indirectly, solicit any employee or other independent contractor of the Company or the Affiliate to terminate his employment or contract with the Company or the
Affiliate. For the purposes of this Plan, 

9

 

the
term "potential customer" shall mean any person or entity contacted by the Company or the Affiliate or any of its affiliates, officers, directors,
employees, shareholders, agents or representatives during the period that Participant was an employee of the Company or the Affiliate for the purpose of soliciting business in connection with the
business of the Company or the Affiliate. The prohibitions contained in this Article VI do not apply to purely social contacts and shall only
apply to those persons or entities which Participant knows, or reasonably should know, are potential customers, pursuant to this  Section 6.02.

        Participant
agrees that the non-competition and non-solicitation restrictions in this Article VI are ancillary to
an otherwise enforceable agreement and are supported by independent valuable consideration. Participant further agrees that the limitations as to time, geographical area, and scope of activity to be
restrained by this non-competition restriction are reasonable and acceptable to him, and do not impose any greater restraint than is reasonably necessary to protect the goodwill and other
business interests of the Company and/or the Affiliate. Participant agrees that, if at some later date a court or arbitrator of competent jurisdiction determines that the non-competition
restriction set forth in this Paragraph is unreasonable or unenforceable as written, the non-competition restriction may be reformed by the court or arbitrator and enforced to the maximum
extent permitted by law. If Participant is found to have violated any of the non-competition and non-solicitation restrictions in this  Article VI, Participant agrees that the restrictive period of
each covenant so violated shall be extended by a period of time equal to the period
of such violation. It is intend that that the running of the restrictive period of any covenant shall be tolled during any period of violation of such covenant so that the Company and/or the Affiliate
may obtain the full and reasonable protection for which it contracted and so that Participant may not profit by any breach. 

        Section 6.03.    Survival.    The Participant's obligations
under this Article VI shall survive the termination of his employment with the Affiliate and/or the Company and are not assignable by him. The
Participant's obligations under this Article VI are in addition to, and not in limitation or preemption of, all other obligations of
confidentiality which he may have to the Company and/or the Affiliate under general legal or equitable principles, or other policies implemented by the Company and/or the Affiliate. 

 
 

ARTICLE VII.
  AMENDMENT AND TERMINATION    
    

        Section 7.01.    Amendment of the Plan.    This Plan may be
amended in any respect, with respect to one or more Participants (which need not be treated uniformly), in the sole discretion of the Board; except, notwithstanding the foregoing, without the written
consent of an affected Participant, the Board may not (i) amend Section 5.05, nor (ii) amend the Plan in a way which would reduce the amount of Benefits to which a Participant
would be entitled, under the terms of the Plan as in effect on the day prior to the effective date of such amendment, as a result of the occurrence of whichever of the following produces the greatest
Benefit for such Participant: either (iii) such Participant had experienced a Termination of Service, or (iv) the Plan had been terminated, in each case on the day prior to the later of
(v) the date of adoption, or (vi) the effective date, of such amendment. If the Plan is amended or terminated by action of the Board, unless otherwise expressly provided, the Plan shall
be treated as so amended or terminated by each Affiliate who is an Employer. 

        Section 7.02.    Termination of the Plan.    It is the present
intention of the Company to maintain this Plan indefinitely; however, the Board shall have the right in its sole discretion, without prior notice and without cause, but subject to the provisions of
Section 5.05, which Section, without limitation, may not be amended with respect to a Participant without the written consent of such affected Participant, to terminate this Plan, in whole or
in part, at any time. 

10

 

 
 

ARTICLE VIII.
  MISCELLANEOUS    
    

        Section 8.01.    Nontransferability.    Subject to  Section 9.01, no assignment or transfer of Benefits, whether voluntary or involuntary, by operation of law or otherwise, shall vest in any
assignee or transferee any interest or right whatsoever in Benefits hereunder. 

        Section 8.02.    No Claim or Right.    Neither this Plan nor
any action taken hereunder shall be construed as giving any person either the right to be designated as a Participant or the right to be retained in the employ of the Company and/or the Affiliate. 

        Section 8.03.    General Creditors.    Without limitation, all
Policies held by the Company are subject to the claims of the general creditors of the Company. 

        Section 8.04.    Applicable
Law.    THIS PLAN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS TO THE EXTENT NOT PREEMPTED BY THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED.

        Section 8.05.    Venue.    VENUE IN ANY LITIGATION, WHETHER IN
FEDERAL OR STATE COURT, WILL BE LAID IN LUBBOCK COUNTY, TEXAS. EACH PARTY HEREBY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUCH LITIGATION, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM
THAT (a) SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, (b) SUCH PARTY AND SUCH PARTY'S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS ISSUED BY SUCH COURTS OR
(c) ANY LITIGATION COMMENCED IN SUCH COURTS IS BROUGHT IN AN INCONVENIENT FORUM. 

        Section 8.06.    Gender and Number.    Except when otherwise
indicated by the context, any masculine terminology used herein shall also include the feminine gender, and the definition of any term herein in the singular shall also include the plural. Titles of
Articles and Sections are for general information only, and this Plan is not to be construed by reference thereto. 

        Section 8.07.    Unsecured Interest.    Without limitations, no
Participant or Beneficiary shall have any interest whatsoever in any specific asset of the Company or in any Policy hereunder. 

        Section 8.08.    Employment.    Neither this Plan nor any
action taken hereunder shall interfere with or limit in any way the right of the Company to terminate any Participant's employment at any time, or confer upon any Participant any right to continue in
the employ of the Company and/or the Affiliate. 

        Section 8.09.    Effect on Other Company Benefit
Plans.    Neither this Plan nor any action taken hereunder shall affect the right of the Participant to participate in or be covered by any qualified or
non-qualified pension, profit-sharing, group, bonus or other supplemental compensation or fringe benefit plan constituting a part of his Employee's existing or future compensation
structure. 

        Section 8.10.    Binding Obligation of the Company and any Successor in
Interest.    The Plan shall be binding upon all persons entitled to Benefits under the Plan, their respective heirs and legal representatives, upon the Company, each
affiliate who is a Employer, and their successors and assigns, and the Compensation Committee, and their successors. 

        Section 8.11.    Severability.    In the event any provision of
the Plan shall be held invalid or illegal for any reason, such determination shall not effect the remaining provisions hereof, but instead the Plan shall be construed and enforced in such a manner as
to result in a valid application of such provision in the context of the intents and purposes of the Plan. 

11

 

 
 

ARTICLE IX.
  BENEFICIARIES    
    

        Section 9.01.    Beneficiary Designation.    Each Participant
may from time to time designate, in writing, any person or persons, contingently or successively, to whom his Benefits under the Plan will be paid in the event of his or her death. The Compensation
Committee will prescribe the form for the written designation of Beneficiary and, upon the Participant's filing the form with the Compensation Committee, the form effectively revokes all designations
filed prior to that date by the same Participant. 

        Section 9.02.    No Beneficiary Designation/Death of
Beneficiary.    The Participant may name a beneficiary and a contingent beneficiary to receive Benefits payable on his Death on such form as the Compensation
Committee shall provide, provided such form mail be filed with the Compensation Committee prior to such Participant's death, and only the last form filed with the Compensation Committee prior to his
Death shall be considered properly filed. If a Participant fails to name a Beneficiary, or if the Beneficiary named by a Participant predeceases him, or if the Beneficiary designation is invalid or
void, the Participant's Benefit will be paid to the Participant's spouse, and in the absence of a surviving spouse, then to such Participant's estate. 

        Section 9.03.    Personal Data to Compensation
Committee.    The provisions of this Plan are effective for the benefit of each Participant (and Beneficiary) upon the condition precedent that such Participant (or
Beneficiary) will furnish promptly full, true, and complete evidence, data, and information when requested by the Compensation Committee. 

        Section 9.04.    Address for Notification.    Each Participant
and each Beneficiary of a deceased Participant must file with the Compensation Committee from time to time, in writing, his post office address and any change of post office address. Any
communication, statement, or notice addressed to a Participant, or Beneficiary, at his last post office address filed with the Compensation Committee, or as shown on the records of the Company, binds
the Participant, or Beneficiary, for all purposes of this Plan. 

12

 

        IN WITNESS WHEREOF, the Company has caused this instrument to be executed on the            day
of                        , 2002, pursuant to
prior action taken by its Board. 

	 	 	STATE NATIONAL BANCSHARES, INC.
	

 	
 	

By:	

/s/  DON E. COSBY, EVP      

	 	 	Name:	    

	 	 	Title:	    

	

 	
 	

By:	

/s/  BARRY W. ALLISON      

	 	 	Name:	    

	 	 	Title:	    

13

QuickLinks

Exhibit 10.4

STATE NATIONAL BANCSHARES, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

TABLE OF CONTENTS

ARTICLE I.

ARTICLE II. DEFINITIONS

ARTICLE III. ADMINISTRATION

ARTICLE IV. PARTICIPATION

ARTICLE V. BENEFITS

ARTICLE VI. PARTICIPANT COVENANTS—FORFEITURE

ARTICLE VII. AMENDMENT AND TERMINATION

ARTICLE VIII. MISCELLANEOUS

ARTICLE IX. BENEFICIARIES

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