Document:

Exhibit 4.1
	
	

 
	
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STELLAR BANCORP, INC.

2022 OMNIBUS INCENTIVE PLAN

 

(adopted by the Company’s Board of Directors
on January 23, 2022)

(approved by the Company’s shareholders on May 24, 2022)

 

1.             Purpose;
Background. The purpose of the Stellar Bancorp, Inc. 2022 Omnibus Incentive Plan (the “Plan”), is to provide
an additional incentive to selected officers, employees, non-employee directors and consultants of the Company and its Subsidiaries whose
contributions are essential to the growth and success of the Company’s business, and to attract and retain competent and dedicated
persons whose efforts will contribute to and promote the long-term growth and profitability of the Company. To accomplish such purposes,
the Plan provides that the Company may grant Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Stock Bonuses,
Other Stock-Based Awards, Cash Awards, Performance Awards or any combination of the foregoing.

 

2.             Definitions.
Wherever the following terms are used they will have the meanings set forth below, unless the context clearly indicates otherwise:

 

(a)            “Administrator”
means the Board, or, if and to the extent the Board delegates such responsibility, the Committee.

 

(b)            “Affiliate”
means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified. An entity is an Affiliate of the Company for purposes of this definition only for such periods as the requisite
ownership or control relationship is maintained.

 

(c)            “Award”
means any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Stock Bonus, Other Stock-Based Award, Cash Award
or Performance Award, together with any other right or interest granted under the Plan to a Participant.

 

(d)            “Award
Agreement” means the writing evidencing an Award or a notice of an Award delivered to a Participant by the Company.

 

(e)            “Bank”
means Stellar Bank, a Texas banking association, and its successors.

 

(f)            “Beneficial
Owner” has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act, as amended from time to time.

 

(g)            “Board”
means the Company’s Board of Directors.

 

(h)            “Cash
Award” means an Award granted under Section 13 of the Plan.

 

(i)             “Change
of Control” means, except as otherwise provided in an Award Agreement, the occurrence of any of the following after the Effective
Date:

 

(i)            A
transaction or series of related transactions (other than an offering of Stock to the general public through a registration statement
filed with the Securities and Exchange Commission) whereby any Person directly or indirectly becomes the Beneficial Owner of securities
of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities;

 

    1

     

    

 

(ii)            During
any twenty-four (24) consecutive month period, the individuals who, at the beginning of such period, constitute the Board (the “Incumbent
Directors”) cease for any reason other than death to constitute at least a majority of the Board; provided, however,
that an individual who becomes a member of the Board subsequent to the beginning of the twenty-four (24) month period will be deemed to
have satisfied such twenty-four (24) month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation
of or with the approval of, at least two-thirds (2/3) of the directors who then qualified as Incumbent Directors;

 

(iii)           The
consummation of a sale or disposition of all or substantially all the Company’s assets in one or a series of related transactions,
other than (A) such a sale, disposition or lease to an entity, 50% or more of the combined voting power of the voting securities
of which are owned by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately
prior to such sale or disposition or (B) the distribution directly to the Company’s shareholders (in one distribution or a
series of related distributions) of all of the stock of one or more Subsidiaries of the Company that represent substantially all of the
Company’s assets;

 

(iv)           The
consummation of a merger, consolidation or other reorganization of the Company, except a merger, consolidation or other reorganization
of the Company immediately following which the shareholders of the Company immediately prior to such event continue to directly or indirectly
own more than fifty percent (50%) of the combined voting power of the voting securities of the Company or the surviving entity in substantially
the same proportion as their ownership of the Company immediately prior to such merger, consolidation or other reorganization of the Company;

 

(v)            A
subsidiary of the Company operating as a Texas banking association is merged or consolidated into, or otherwise acquired by, an entity
other than a wholly-owned subsidiary of the Company; or

 

(vi)           The
shareholders of the Company approve a plan of complete liquidation or dissolution of the Company.

 

Notwithstanding the foregoing,
in no event shall the Merger or the transactions occurring in connection therewith constitute a Change of Control and if a Change of Control
constitutes a payment event with respect to any Award (or portion of any Award) that provides for the deferral of compensation that is
subject to Section 409A of the Code, to the extent required to avoid the imposition of additional taxes under Section 409A of
the Code, the transaction or event described in subsection (i), (ii), (iii) or (iv) with respect to such Award (or portion thereof)
shall only constitute a Change in Control for purposes of the payment timing of such Award if such transaction also constitutes a “change
in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5).

 

The Administrator shall have
full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change of Control has occurred
pursuant to the above definition, the date of the occurrence of such Change of Control and any incidental matters relating thereto; provided
that any exercise of authority in conjunction with a determination of whether a Change of Control is a “change in control event”
as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.

 

(j)             “Code”
means the Internal Revenue Code of 1986, as amended. Any reference herein to a section of the Code includes any successor provision to
such section.

 

(k)            “Committee”
means a committee of one or more directors designated by the Board to administer this Plan, and, to the extent the Board determines it
is appropriate for Awards under the Plan to qualify for the exemption available under Rule 16b-3, will be a committee or subcommittee
of the Board composed of two or more members, each of whom is a “non-employee director” within the meaning of Rule 16b-3.

 

    2

     

    

 

(l)             “Company”
means Stellar Bancorp, Inc., and, where appropriate, each of its Affiliates and successors.

 

(m)           “Deferred
Stock Unit” means a right granted to a Participant under Section 10 to receive shares of Stock (or the cash equivalent
if the Committee so provides) at a future time as determined by the Committee, or as determined by the Participant within guidelines established
by the Committee in the case of voluntary deferral elections.

 

(n)            “Effective
Date” means the date on which this Plan becomes effective, as set forth in Section 37.

 

(o)            “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(p)            “Fair
Market Value” means, with respect to Stock as of any specified date, (i) if the Stock is traded on a national securities
exchange, the closing price of the Stock on the immediately preceding date (or if no sales occur on that date, on the last preceding date
on which such sales of the Stock are so reported); (ii) if the Stock is not traded on a national securities exchange but is traded
over the counter, the average between the reported high and low or closing bid and asked prices of the Stock on the most recent date on
which Stock was publicly traded; (iii) if the Stock is not publicly traded, the amount determined by the Administrator in its discretion
in such manner as it deems appropriate; or (iv) if the specified date is the date of an initial public offering of Stock, the offering
price under such initial public offering. In all events, Fair Market Value will be determined pursuant to a method that complies with
the requirements of Section 409A of the Code.

 

(q)            “Incentive
Stock Option” or “ISO” means an Option that is intended to qualify for special Federal income tax treatment
pursuant to Sections 421 and 422 of the Code, and which is so designated in the applicable Award Agreement.

 

(r)            “Merger”
has the meaning given in Section 37.

 

(s)            “Non-Employee
Director” means a member of the Board who is not an employee of the Company or any of its subsidiaries.

 

(t)            “Nonqualified
Stock Option” means an Option that is not an Incentive Stock Option.

 

(u)            “Officer”
has the meaning given in Section 3(b).

 

(v)            “Option”
means a right granted to a Participant under Section 7 to purchase Stock at a specified price during specified time periods.

 

(w)           “Other
Stock-Based Award” means an Award granted to a Participant under Section 12.

 

(x)            “Participant”
means, as of a specified date, a person who holds an Award that is outstanding as of such specified date.

 

    3

     

    

 

(y)            “Performance
Award” means any Award, granted to a Participant under Section 14, the exercise, payment, vesting, or settlement
of which is contingent (in whole or in part) upon attainment during a Performance Period of Performance Goals specified by the Administrator.

 

(z)            “Performance
Criteria” means the one or more criteria that the Administrator will select for purposes of establishing the Performance Goals
for a Performance Period. The Performance Criteria that will be used to establish such Performance Goals may be based on any one of, or
combination of, the following, as determined by the Administrator: (i) earnings, including one or more of operating income, earnings
before or after taxes, earnings before or after interest, depreciation, amortization, adjusted EBITDA, economic earnings, or extraordinary
or special items or book value per share (which may exclude nonrecurring items); (ii) earnings (as defined in (i), above) as a percentage
of revenues; (iii) pre-tax income, after-tax income or adjusted net income; (iv) earnings per share (basic or diluted); (v) operating
profit; (vi) revenue, revenue growth or rate of revenue growth; (vii) return on assets (gross or net), return on investment,
return on capital, or return on equity; (viii) returns on sales or revenues; (ix) operating expenses; (x) stock price appreciation;
(xi) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash
flow in excess of cost of capital; (xii) implementation or completion of critical projects or processes; (xiii) total shareholder
return; (xiv) cumulative earnings per share growth; (xv) operating margin or profit margin; (xvi) cost targets, reductions
and savings, productivity and efficiencies; (xvii) strategic business criteria, consisting of one or more objectives based on meeting
specified market penetration, geographic business expansion, customer satisfaction, employee satisfaction, human resources management,
goals relating to acquisitions, divestitures, joint ventures and/or similar transactions and/or goals relating to budget comparisons;
(xviii) working capital; (xix) book value; (xx) customer satisfaction; (xxi) any other measures of performance selected
by the Administrator; and (xxii) any combination of, or a specified increase or decrease in, any of the foregoing. Such performance
goals may be measured on a generally accepted accounting principles (GAAP) or non-GAAP basis, and be based solely by reference to the
performance of the Company as a whole or any subsidiary, division, business segment or business unit of the Company, or any combination
thereof or based upon the relative performance of other companies or upon comparisons of any of the indicators of performance relative
to a peer group of other comparable companies, or as compared to the performance of a published or special index deemed applicable by
the Administrator, including by not limited to, the Standard & Poor’s 500 Stock Index or any other market index. Unless
otherwise stated in an Award Agreement a performance goal need not be based on an increase or positive result under a particular business
criterion and could include, for example, maintaining the status quo or limiting economic losses (measured, in each case, by reference
to specific business criteria).

 

(aa)          “Performance
Goals” means, for a Performance Period, the one or more goals established by the Administrator for the Performance Period based
upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions,
Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the
performance of one or more relevant indices. The Administrator is authorized to make appropriate adjustments in the method of calculating
the attainment of Performance Goals for a Performance Period as follows: (i) to exclude restructuring and/or other nonrecurring charges;
(ii) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated Performance Goals; (iii) to exclude the
effects of changes to generally accepted accounting principles; (iv) to exclude the effects of any statutory adjustments to corporate
tax rates; (v) to exclude the effects of items that are “unusual” in nature or occur “infrequently” as determined
under generally accepted accounting principles; (vi) to exclude the dilutive effects of acquisitions or joint ventures; (vii) to
assume that any business divested by the Company achieved performance objectives at targeted levels during the balance of a Performance
Period following such divestiture; (viii) to exclude the effect of any change in the outstanding shares of common stock of the Company
by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination
or exchange of shares or other similar corporate change, or any distributions to common shareholders other than regular cash dividends;
(ix) to exclude the effects of stock based compensation and/or the award of an annual cash incentive under the Company’s annual
incentive program; (x) to exclude the effect of any other unusual, non-recurring gain or loss or other extraordinary item; and (xi) to
make other appropriate adjustments selected by the Administrator.

 

    4

     

    

 

(bb)         “Performance
Period” means the period of time selected by the Administrator over which the attainment of one or more Performance Goals will
be measured for the purpose of determining a Participant’s right to and the payment of a Performance Award. Performance Periods
may be of varying and overlapping duration, at the sole discretion of the Administrator.

 

(cc)          “Person”
has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term will not include (i) the Company or any Subsidiary thereof, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any Subsidiary thereof, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company
in substantially the same proportions as their ownership of stock of the Company.

 

(dd)         “Prior
Allegiance Plans” means the Allegiance Bancshares, Inc. 2015 Stock Awards and Incentive Plan, as amended, the Allegiance
Bancshares, Inc. 2019 Amended and Restated Stock Awards and Incentive Plan, as amended, and the Post Oak Bancshares, Inc. Stock
Option Plan, as amended.

 

(ee)          “Prior
CBTX Plans” means the CBTX, Inc. 2017 Omnibus Incentive Plan, as amended, and the CBFH, Inc. 2014 Stock Option Plan,
as amended.

 

(ff)           “Prior
Plans” means the Prior CBTX Plans and the Prior Allegiance Plans.

 

(gg)         “Restricted
Stock” means Stock granted to a Participant under Section 9, that is subject to certain restrictions and to a risk
of forfeiture.

 

(hh)         “Restricted
Stock Unit” means an unfunded and unsecured right granted to a Participant under Section 10, to receive Stock, cash
or a combination thereof at the end of a specified period, which right is subject to certain restrictions and to a risk of forfeiture.

 

(ii)            “Rule 16b-3”
means Rule 16b-3, promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act, applicable to
the Plan and Participants.

 

(jj)            “Securities
Act” means the Securities Act of 1933, as amended.

 

(kk)          “Stock”
means the Company’s common stock, par value $0.01 per share.

 

(ll)            “Stock
Appreciation Right” or “SAR” means a right to receive, upon exercise thereof, the excess of (i) the
Fair Market Value of one share of Stock on the date of exercise over (ii) the exercise price of the SAR.

 

(mm)       “Stock
Bonus” means a bonus payable in fully vested shares of Stock granted pursuant to Section 11.

 

    5

     

    

 

(nn)         “Subsidiary”
means, with respect to any Person, any corporation, limited liability company, partnership, association or business entity of which: (A) if
a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination thereof; or (B) if a limited liability company, partnership,
association or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof
is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination
thereof; provided, however, that with respect to Incentive Stock Options, the term “Subsidiary” shall mean only a “subsidiary
corporation” of the Company (as such term is defined in Section 424(f) of the Code and determined in accordance with Section 421
of the Code); and provided further, that with respect to Nonqualified Stock Options and Stock Appreciation Rights, the term “Subsidiary”
shall mean only a corporation or other entity in a chain of corporations and/or other entities in which the Company has a “controlling
interest” within the meaning of Treas. Reg. §1.414(c)-2(b)(2)(i), but using the threshold of 50% ownership wherever 80% appears.
For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership,
association or other business entity (other than a corporation) if such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or shall be or control any managing member, general partner
or analogous controlling Person of such limited liability company, partnership, association or other business entity.

 

For purposes hereof, references
to a “Subsidiary” of any Person shall be given effect only at such times that such Person has one or more Subsidiaries and,
unless otherwise indicated, the term “Subsidiary” refers to a Subsidiary of the Company.

 

3.              Administration.

 

(a)            Administration
by the Administrator. The Plan shall be administered by the Administrator. The Administrator shall have the authority in its sole
discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise all the powers
and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including,
without limitation, the authority (i) to the extent not inconsistent with the Plan, prescribe, amend and rescind rules and regulations
relating to the Plan including rules governing its own operations, (ii) make all determinations necessary or advisable in administering
the Plan, (iii) correct any defect, supply any omission, reconcile any inconsistency in the Plan, and construe and interpret the
Plan and Award Agreements, (iv) determine the Fair Market Value of Awards, (v) approve forms of Award Agreements for use under
the Plan, (vi) grant Awards and determine who will receive Awards, when such Awards will be granted and the terms of such Awards,
including setting forth provisions with regard to the termination of a recipient’s employment or service, (vii) determine whether
an Option will be an Incentive Stock Option or a Nonqualified Option, (viii) subject to the limitation of Section 3(d),
accelerate the time or times at which an Award becomes vested, unrestricted or may be exercised, (ix) subject to the limitation of
Section 3(d), waive or amend any goals, restrictions or conditions set forth in an Award Agreement, unless otherwise provided
in the Award Agreement, (x) amend the terms of any outstanding Award Agreement or Award, including the discretionary authority
to extend the post-termination exercise period of Awards, provided that any amendment that would adversely affect the Participant’s
rights under an outstanding Award shall not be made without the Participant’s written consent (provided, that an amendment shall
not be treated as adversely affecting the rights of the Participant if the amendment causes an Incentive Stock Option to become a Nonqualified
Option or if the amendment is made to the minimum extent necessary to avoid the adverse tax consequences of Section 409A of the Code),
(xi) allow Participants to satisfy withholding tax obligations by electing to have the Company withhold from the Shares or cash to
be issued upon exercise or vesting of an Award up to the number of Shares or cash having a Fair Market Value equal to the amount required
to be withheld based on any amount up to the maximum statutory tax rate of the Participant’s applicable jurisdiction(s) (or
such other rate as may be necessary to avoid classification of the Award as a liability for financial accounting purposes), (xii) allow
a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to the Participant under
an Award; and (xiii) impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner
of any resales by a Participant or other subsequent transfers by the Participant of any Shares issued as a result of or under an Award,
including without limitation, (A) restrictions under an insider trading policy, and (B) restrictions as to the use of a specified
brokerage firm for such resales or other transfers.

 

    6

     

    

 

The determinations of the Administrator will be
final, binding and conclusive. By accepting any Award under the Plan, each Participant and each person claiming under or through him or
her will be conclusively deemed to have indicated his or her acceptance and ratification of, and consent to, any action taken under the
Plan by the Administrator.

 

(b)            Delegation
to an Officer. The Board may delegate to one or more officers of the Company (within the meaning of Section 16 of the Exchange
Act) (an “Officer”) the authority to do one or both of the following: (i) designate employees who are not Officers
to be recipients of Options, SARs and Restricted Stock (and, to the extent permitted by applicable law, other Awards) and, to the extent
permitted by applicable law, the terms of such Awards; and (ii) determine the number of shares of Stock to be subject to such Awards
granted to such employees; provided, however, that the Board resolutions regarding such delegation will specify the total
number of shares of Stock that may be subject to the Awards granted by such Officer and that such Officer may not grant an Award to himself
or herself. Any such Awards will be granted on the form of Award Agreement most recently approved for use by the Administrator, unless
otherwise provided in the resolutions approving the delegation of authority. The Board may not delegate authority to an Officer who is
acting solely in the capacity of an Officer (and not also as a member of the Board) to determine the Fair Market Value of the Stock pursuant
to Section 2(q)(iii).

 

(c)            Indemnification.
In addition to such other rights of indemnification as they may have as Directors or members of the Administrator, and to the extent allowed
by applicable law, the Administrator shall be indemnified by the Company against the reasonable expenses, including attorneys’ fees,
actually incurred in connection with any action, suit or proceeding or in connection with any appeal therein, to which the Administrator
may be party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted under the Plan,
and against all amounts paid by the Administrator in settlement thereof (provided, however, that the settlement has been
approved by the Company, which approval shall not be unreasonably withheld) or paid by the Administrator in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding
that such Administrator did not act in good faith and in a manner which such person reasonably believed to be in the best interests of
the Company, or in the case of a criminal proceeding, had no reason to believe that the conduct complained of was unlawful; provided,
however, that within 60 days after the institution of any such action, suit or proceeding, such Administrator shall, in writing,
offer the Company the opportunity at its own expense to handle and defend such action, suit or proceeding.

 

(d)            Minimum
Vesting Requirements. Except as provided in Section 15(b), no Award may vest (or, if applicable, be exercisable) until
at least 12 months following the date of grant of the Award; provided, however, that (i) the Committee may provide
that such minimum vesting restrictions may lapse or be waived in connection with or following a Participant’s death, Disability,
termination of service or Change in Control, (ii) shares of Stock up to 5% of the shares reserved for issuance under the Plan (as
provided in Section 4(a)) may be issued pursuant to Awards that do not meet such vesting (and, if applicable, exercisability)
requirements, and (iii) for purposes of Awards granted to Non-Employee Directors, a vesting period shall be deemed to be one year
if the Awards are granted to Non-Employee Directors in connection with their election or reelection to the Board at an annual meeting
of shareholders and the awards vest on the first day of the month in which the next annual meeting of the Company’s shareholders
is held, so long as the period between such meetings is not less than 50 weeks.

 

    7

     

    

 

(e)            Dividends
and Dividend Equivalents. Dividends or dividend equivalents may be paid or credited, as applicable, with respect to any shares of
Stock subject to an Award, as determined by the Administrator and contained in the applicable Award Agreement; provided, however,
that (i) no dividends or dividend equivalents may be paid with respect to any such shares before the date such shares have vested
under the terms of such Award Agreement, (ii) any dividends or dividend equivalents that are credited with respect to any such shares
will be subject to all of the terms and conditions applicable to such shares under the terms of such Award Agreement (including, but not
limited to, any vesting conditions), and (iii) any dividends or dividend equivalents that are credited with respect to any such shares
will be forfeited to the Company on the date, if any, such shares are forfeited to or repurchased by the Company due to a failure to meet
any vesting conditions under the terms of such Award Agreement.

 

4.              Stock
Subject to Plan.

 

(a)            Total
Shares Available. The maximum number of shares of Stock reserved for issuance under the Plan shall be (a) 2,000,000 shares (subject
to adjustment as provided by Section 14(c)) plus (b) any shares of Stock to be issued upon the exercise of Options issued
in substitution of outstanding Allegiance Options pursuant to Section 4(e). The shares of Stock that may be delivered pursuant
to Awards may be authorized but unissued Stock or authorized and issued Stock held in the Company’s treasury, or otherwise acquired
for purposes of the Plan. From and after the effectiveness of this Plan, the Company will not grant awards under the Prior Plans; however,
stock option awards previously granted under the Prior Allegiance Plans that are assumed by the Company in connection with the Merger
will be adjusted (in accordance with Sections 424 or 409A of the Code, as applicable) to reflect the right to purchase shares of Stock
and will remain subject to the terms of the Prior Allegiance Plans and applicable stock option award agreements.

 

(b)            Annual
Limit on Awards to Non-Employee Directors. No Non-Employee Director may receive Awards under the Plan with an aggregate grant date
fair value that, when combined with cash compensation received for service as a Non-Employee Director, exceeds $500,000 in value in a
calendar year, increased to $750,000 in the calendar year of his or her initial services as a Non-Employee Director. Awards granted to
an individual while he or she was serving in the capacity as an employee or while he or she was a consultant but not a Non-Employee Director
will not count for purposes of the limitations set forth in this Section 4(b). All Awards to Non-Employee Directors shall
be made pursuant to an Award Agreement.

 

(c)            Adjustment
for Change in Capitalization. In the event that any special or extraordinary dividend or other extraordinary distribution is declared
(whether in the form of cash, Stock, or other property), or there occurs any recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, spin-off, combination, repurchase, share exchange or other similar corporate transaction or event, the Administrator
shall adjust, as it deems necessary or appropriate, (i) the number and kind of shares of stock which may thereafter be issued in
connection with Awards, (ii) the number and kind of shares of stock or other property, including cash, issued or issuable in respect
of outstanding Awards, (iii) the exercise price, grant price or purchase price relating to any Award, and (iv) the limitation
set forth in Section 4(a) and (f); provided, that, with respect to Incentive Stock Options, such
adjustment shall be made in accordance with Section 424 of the Code; and provided further that no such adjustment shall cause
any Award hereunder which is or becomes subject to Section 409A of the Code to fail to comply with the requirements of such section.

 

    8

     

    

 

(d)            Reuse
of Shares.

 

(i)             Shares
Available for Subsequent Issuance. The following shares of Stock will become available again for issuance under the Plan: (A) any
shares subject to an Award that are not issued because such Award or any portion thereof expires or otherwise terminates without all of
the shares covered by such Award having been issued; (B) any shares subject to an Award that are not issued because such Award or
any portion thereof is settled in cash; and (C) any shares issued pursuant to an Award that are forfeited back to or repurchased
by the Company because of the failure to meet a contingency or condition required for the vesting of such shares.

 

(ii)            Shares
Not Available for Subsequent Issuance. The following shares of Stock will not become available again for issuance under the Plan:
(A) any shares that are reacquired or withheld (or not issued) by the Company to satisfy the exercise, strike or purchase price of
an Award (including any shares subject to such award that are not delivered because such award is exercised through a reduction of shares
subject to such award (i.e., “net exercised”)); (B) any shares that are reacquired or withheld (or not issued) by the
Company to satisfy a tax withholding obligation in connection with an Award; (C) any shares repurchased by the Company on the open
market with the proceeds of the exercise, strike or purchase price of an Award; and (D) in the event that a SAR granted under the
Plan is settled in shares of Stock, the gross number of shares of Stock subject to such SAR.

 

(e)            Assumption/Substitution
of Awards by the Company. The Company, from time to time, also may substitute or assume outstanding awards granted by another company,
whether in connection with an acquisition of such other company or otherwise (including, for avoidance of doubt, in connection with the
Merger), by either; (i) granting an Award under this Plan in substitution of such other company’s award; or (ii) assuming
such award as if it had been granted under this Plan if the terms of such assumed award could be applied to an Award granted under this
Plan. Such substitution or assumption will be permissible if the holder of the substituted or assumed award would have been eligible to
be granted an Award under this Plan if the other company had applied the rules of this Plan to such grant. In the event the Company
assumes an award granted by another company, the terms and conditions of such award will remain unchanged (except that the Exercise Price
and the number and nature of shares of Stock issuable upon exercise or settlement of any such Award will be adjusted appropriately pursuant
to Section 424(a) of the Code and/or Section 409A of the Code, as applicable). In the event the Company elects to grant
a new Option in substitution rather than assuming an existing option, such new Option may be granted with a similarly adjusted Exercise
Price. Substitute Awards shall not be deducted from the number of shares of Stock authorized for grant under the Plan or authorized for
grant to a Participant in a calendar year.

 

(f)            Incentive
Stock Option Limit. Subject to the share reserve in Section 4(a) and Section 4(c) relating to capitalization
adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options
will be 2,000,000 shares.

 

5.              Eligibility.
The individuals who shall be eligible to receive Awards under the Plan shall be such employees of the Company and its Subsidiaries (including
officers of the Company and its Subsidiaries, whether or not they are directors of the Company), consultants to the Company and Non-Employee
Directors as the Administrator shall select from time to time. The grant of an Award hereunder in any year to any individual shall not
entitle such individual to a grant of an Award in any future year or to have any Award in any future year with the same terms.

 

6.              Awards
Under the Plan; Award Agreement. The Administrator may grant Awards in such amounts and with such terms and conditions as the
Administrator shall determine, subject to the provisions of the Plan. Each Award granted under the Plan (except an unconditional Stock
Bonus) shall be evidenced by an Award Agreement which shall contain such provisions as the Administrator may in its sole discretion deem
necessary or desirable and which are not in conflict with the terms of the Plan. By accepting an Award, a Participant shall be deemed
to agree that the Award shall be subject to all of the terms and provisions of the Plan and the applicable Award Agreement.

 

    9

     

    

 

7.              Options.
The Administrator is authorized to grant Options to eligible individuals on the following terms and conditions:

 

(a)            Identification
of Options. Each Option shall be clearly identified in the applicable Award Agreement as either an Incentive Stock Option or a Nonqualified
Stock Option.

 

(b)            Exercise
Price. Each Award Agreement with respect to an Option shall set forth the amount per share (the “option exercise price”)
payable by the Participant to the Company upon exercise of the Option. The option exercise price shall be equal to or greater than the
Fair Market Value of a share of Stock on the date of grant. Other than with respect to an adjustment described in Section 4(c),
in no event shall the exercise price of an Option be reduced following the grant of an Option, nor shall an Option be cancelled in exchange
for a replacement Option with a lower exercise price or in exchange for another type of Award or cash payment without shareholder approval.

 

(c)            Term
and Exercise of Options.

 

(i)             Each
Option shall become exercisable at the time or times determined by the Administrator and set forth in the applicable Award Agreement.
At the time of grant of an Option, the Administrator may impose such restrictions or conditions to the exercisability of the Option as
it, in its absolute discretion, deems appropriate, including, but not limited to, achievement of Performance Goals. Subject to Section 7(d) hereof,
the Administrator shall determine and set forth in the applicable Award Agreement the expiration date of each Option, which shall be no
later than the tenth anniversary of the date of grant of the Option.

 

(ii)            An
Option shall be exercised by delivering the form of notice of exercise provided by the Company or in such other form as approved by the
Company. Payment for shares of Stock purchased upon the exercise of an Option shall be made on the effective date of such exercise by
one or a combination of the following means, subject to any Company insider trading policy (including blackout periods): (A) in cash
or by personal check acceptable to the Company, certified check, bank cashier’s check or wire transfer; (B) in shares of Stock
owned by the Participant and valued at their Fair Market Value on the effective date of such exercise; (C) broker assisted cashless
exercise or net exercise; or (D) by any such other method as the Administrator may from time to time authorize in its sole discretion.
Except as authorized by the Administrator, any payment in shares of Stock shall be effected by the delivery of such shares to the Secretary
of the Company (or his designee), duly endorsed in blank or accompanied by stock powers duly executed in blank, together with any other
documents and evidences as the Secretary of the Company shall require.

 

(iii)           Shares
of Stock purchased upon the exercise of an Option shall, as determined by the Administrator, be evidenced by a book entry record or certificate
issued in the name of or for the account of the Participant or other individual entitled to receive such shares, and delivered to the
Participant or such other individual as soon as practicable following the effective date on which the Option is exercised.

 

    10

     

    

 

(d)            Provisions
Relating to Incentive Stock Options. Incentive Stock Options may only be granted to employees of the Company and its Subsidiaries,
in accordance with the provisions of Section 422 of the Code. To the extent that the aggregate Fair Market Value of shares of Stock
with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year under the Plan
and any other stock option plan of the Company or a Subsidiary shall exceed $100,000, such Options shall be treated as Nonqualified Stock
Options to the extent of such excess. For purposes of this Section 7(d), Fair Market Value shall be determined as of the date
on which each such Incentive Stock Option is granted. No Incentive Stock Option may be granted to an individual if, at the time of the
proposed grant, such individual owns (or is deemed to own under the Code) stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company unless (A) the exercise price of such Incentive Stock Option is at least 110% of the
Fair Market Value of a share of Stock at the time such Incentive Stock Option is granted and (B) such Incentive Stock Option is not
exercisable after the expiration of five years from the date such Incentive Stock Option is granted.

 

(e)            Effect
of Termination of Employment (or Provision of Services). Except as may otherwise be provided in the applicable Award Agreement, and
subject to the Administrator’s authority under Section 3 hereof:

 

(i)            In
the event that the employment of a Participant with the Company and its Subsidiaries (or the Participant’s service to the Company
and its Subsidiaries) shall terminate for any reason other than death or disability, each Option granted to such Participant that is outstanding
and exercisable as of the date of such termination shall remain exercisable for the 90-day period immediately following such termination,
but in no event following the expiration of its term, and any Option that is not exercisable as of the date of such termination shall
be terminated for no consideration at the time of such termination.

 

(ii)            In
the event that the employment of a Participant with the Company and its Subsidiaries (or the Participant’s service to the Company
and its Subsidiaries) shall terminate on account of the Participant’s death or disability, each Option granted to such Participant
that is outstanding and exercisable as of the date of such termination shall remain exercisable for the one-year period immediately following
such termination, but in no event following the expiration of its term, and any Option that is not exercisable as of the date of such
termination shall be terminated for no consideration at the time of such termination.

 

(f)             Leave
of Absence. In the case of any Participant on an approved leave of absence, the Administrator may make such provision respecting the
continuance of the Option while in the employ or service of the Company as it may deem equitable, except that in no event may an Option
be exercised after the expiration of its term.

 

(g)            No
Repricing. Except as otherwise provided in Section 4(c), without the prior approval of the shareholders of the Company:
(i) the exercise price of an Option may not be reduced, directly or indirectly; (ii) an Option may not be cancelled in exchange
for cash in an amount, or other Awards with a value, that exceeds the excess, if any, of the Fair Market Value of the shares of Stock
subject to the Option at the time of the cancellation or exchange over the exercise price of such Option, or for Options or SARs with
an exercise price that is less than the exercise price of the original Option, except as permitted in accordance with Section 15(d);
and (iii) the Company may not repurchase an Option for value (in cash, substitutions, cash buyouts, or otherwise) from a Participant
if the current Fair Market Value of the Stock underlying the Option is lower than the exercise price of the Option.

 

8.              Stock
Appreciation Rights.

 

(a)            Grant;
Term. A Stock Appreciation Right may be granted in connection with an Option, either at the time of grant or, with respect to a Nonqualified
Stock Option, at any time thereafter during the term of the Option, or may be granted unrelated to an Option. At the time of grant of
a Stock Appreciation Right, the Administrator may impose such restrictions or conditions to the exercisability of the Stock Appreciation
Right as it, in its absolute discretion, deems appropriate, including, but not limited to, achievement of Performance Goals. The term
of a Stock Appreciation Right granted without relationship to an Option shall not exceed ten years from the date of grant. In addition,
the exercise price of a Stock Appreciation Right shall be equal to or greater than the Fair Market Value of a share of Stock on the date
of grant.

 

    11

     

    

 

(b)            Tandem
Awards. A Stock Appreciation Right related to an Option shall require the holder, upon exercise, to surrender such Option with respect
to the number of shares as to which such Stock Appreciation Right is exercised, in order to receive payment of any amount computed pursuant
to Section 8(c). Such Option will, to the extent surrendered, then cease to be exercisable. Subject to such rules and
restrictions as the Administrator may impose, a Stock Appreciation Right granted in connection with an Option will be exercisable at such
time or times, and only to the extent that a related Option is exercisable.

 

(c)            Exercise.
Upon the exercise of a Stock Appreciation Right whether related or unrelated to an Option, the holder will be entitled to receive payment
of an amount determined by multiplying:

 

(i)             the
excess of the Fair Market Value of a share of Stock on the date of exercise of such Stock Appreciation Right over the exercise price of
the Stock Appreciation Right, by

 

(ii)            the
number of shares as to which such Stock Appreciation Right is exercised.

 

(d)            Limitations.
Notwithstanding subsection (c) above, the Administrator may place a limitation on the amount payable upon exercise of a Stock Appreciation
Right. Any such limitation must be determined as of the date of grant and noted in the applicable Award Agreement.

 

(e)            Form of
Settlement. Payment of the amount determined under subsection (c) above may be made solely in whole shares of Stock valued
at their Fair Market Value on the date of exercise of the Stock Appreciation Right or alternatively, in the sole discretion of the Administrator,
solely in cash or a combination of cash and shares, in each case as set forth in the applicable Award Agreement. If the Administrator
decides that payment will be made in shares of Stock, and the amount payable results in a fractional share, payment for the fractional
share will be made in cash.

 

(f)            No
Repricing. Except as otherwise provided in Section 4(c), without the prior approval of the shareholders of the Company:
(i) the exercise price of a SAR may not be reduced, directly or indirectly, (ii) a SAR may not be cancelled in exchange for
cash in an amount, or other Awards with a value, that exceeds the excess, if any, of the Fair Market Value of the shares of Stock subject
to the SAR at the time of the cancellation or exchange over the exercise price of such SAR, or for Options or SARs with an exercise price
that is less than the exercise price of the original SAR, except as permitted in accordance with Section 15, and (iii) the
Company may not repurchase a SAR for value (in cash, substitutions, cash buyouts, or otherwise) from a Participant if the current Fair
Market Value of the Stock underlying the SAR is lower than the exercise price of the SAR.

 

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9.              Restricted
Stock.

 

(a)            Price.
At the time of the grant of shares of Restricted Stock, the Administrator shall determine the price, if any, to be paid by the Participant
for each share of Restricted Stock subject to the Award.

 

(b)            Vesting
Date. At the time of the grant of shares of Restricted Stock, the Administrator shall establish a vesting date or vesting dates with
respect to such shares. The Administrator may divide such shares into classes and assign a different vesting date for each class. Provided
that all conditions to the vesting of a share of Restricted Stock are satisfied, and subject to Section 9(g), upon the occurrence
of the vesting date with respect to a share of Restricted Stock, such share shall vest and the restrictions of Section 9(d) shall
lapse.

 

(c)            Conditions
to Vesting. At the time of the grant of shares of Restricted Stock, the Administrator may impose such restrictions or conditions to
the vesting of such shares as it, in its absolute discretion, deems appropriate, including, but not limited to, achievement of Performance
Goals. The Administrator may also provide that the vesting or forfeiture of shares of Restricted Stock may be based upon the achievement
of, or failure to achieve, certain Performance Goals and may provide for partial vesting of Restricted Stock in the event that the maximum
level of performance is not met if the minimum level of performance has been equaled or exceeded.

 

(d)            Restrictions
on Transfer Prior to Vesting. Prior to the vesting of a share of Restricted Stock, such Restricted Stock may not be transferred, assigned
or otherwise disposed of, and no transfer of a Participant’s rights with respect to such Restricted Stock, whether voluntary or
involuntary, by operation of law or otherwise, shall be permitted.

 

(e)            Voting
Rights. Participants holding shares of Restricted Stock may exercise full voting rights with respect to those shares.

 

(f)             Issuance
of Certificates. The Administrator may, upon such terms and conditions as it determines, provide that (i) a certificate or certificates
representing the shares of Restricted Stock shall be registered in the Participant’s name and bear an appropriate legend specifying
that such shares are not transferable and are subject to the provisions of the Plan and the restrictions, terms and conditions set forth
in the applicable Award Agreement, (ii) such certificate or certificates shall be held in escrow by the Company on behalf of the
Participant until such shares become vested or are forfeited or (iii) the Participant’s ownership of the Restricted Stock shall
be registered by the Company in book entry form.

 

(g)            Consequences
of Vesting. Upon the vesting of a share of Restricted Stock pursuant to the terms hereof, the restrictions of Section 9(d) shall
lapse with respect to such share. Following the date on which a share of Restricted Stock vests, the Company shall, as determined by the
Administrator, make a book entry record of such share or cause to be delivered to the Participant to whom such share was granted, a certificate
evidencing such share, either of which may bear a restrictive legend, if the Administrator determines such a legend to be appropriate.

 

(h)            Effect
of Termination of Employment (or Provision of Services). Except as may otherwise be provided in the applicable Award Agreement, and
subject to the Administrator’s authority under Section 3 hereof, upon the termination of a Participant’s employment
with the Company and its Subsidiaries (or the Participant’s service to the Company and its Subsidiaries) for any reason, any and
all shares to which restrictions on transferability apply (and all dividends accumulated with respect thereto) shall be immediately forfeited
for no consideration by the Participant and transferred to, and reacquired by, the Company. In the event of a forfeiture of shares pursuant
to this section, the Company shall repay to the Participant (or the Participant’s estate) any amount paid by the Participant for
such shares.

 

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10.            Restricted
Stock Units.

 

(a)            Vesting
Date. At the time of the grant of Restricted Stock Units, the Administrator shall establish a vesting date or vesting dates with respect
to such units. The Administrator may divide such units into classes and assign a different vesting date for each class. Provided that
all conditions to the vesting of the Restricted Stock Units imposed pursuant to Section 10(c) are satisfied, and subject
to Section 10(d), upon the occurrence of the vesting date with respect to the Restricted Stock Units, such units shall vest.

 

(b)            Benefit
Upon Vesting. Unless otherwise provided in an Award Agreement, upon the vesting of Restricted Stock Units, the Participant shall be
paid, within 30 days of the date on which such units vest, an amount, in cash and/or shares of Stock, as determined by the Administrator.
In the case of Awards denominated in shares of Stock, the amount per Restricted Stock Unit shall be equal to the sum of (i) the Fair
Market Value of a share of Stock on the date on which such Restricted Stock Unit vests and (ii) the aggregate amount of cash dividends
paid with respect to a share of Stock during the period commencing on the date on which the Restricted Stock Unit was granted and terminating
on the date on which such unit vests. In the case of Awards denominated in cash, the amount per Restricted Stock Unit shall be equal to
the cash value of the Restricted Stock Unit on the date on which such Restricted Stock Unit vests.

 

(c)            Conditions
to Vesting. At the time of the grant of Restricted Stock Units, the Administrator may impose such restrictions or conditions to the
vesting of such units as it, in its absolute discretion, deems appropriate, including, but not limited to, achievement of Performance
Goals.

 

(d)            Effect
of Termination of Employment (or Provision of Services). Except as may otherwise be provided in the applicable Award Agreement, and
subject to the Administrator’s authority under Section 3 hereof, Restricted Stock Units that have not vested, together
with any dividend equivalents deemed to have been credited with respect to such unvested units, shall be forfeited for no consideration
upon the Participant’s termination of employment (or upon cessation of such Participant’s services to the Company) for any
reason.

 

11.            Stock
Bonuses. In the event that the Administrator grants a Stock Bonus, the shares of Stock constituting such Stock Bonus shall, as
determined by the Administrator, be evidenced by a book entry record or a certificate issued in the name of the Participant to whom such
grant was made and delivered to such Participant as soon as practicable after the date on which such Stock Bonus is payable. For avoidance
of doubt, the authority of the Administrator to make Stock Bonuses shall be subject to the limitation set forth in Section 3(c).

 

12.            Other
Stock-Based Awards. Other forms of Awards valued in whole or in part by reference to, or otherwise based on, Stock, including
but not limited to dividend equivalents, may be granted either alone or in addition to other Awards (other than in connection with Options
or Stock Appreciation Rights) under the Plan. Subject to the provisions of the Plan, the Administrator shall have sole and complete authority
to determine the individuals to whom and the time or times at which such Other Stock-Based Awards shall be granted, the number of shares
of Stock to be granted pursuant to such Other Stock-Based Awards, or the manner in which such Other Stock-Based Awards shall be settled
(e.g., in shares of Stock or cash), or the conditions to the vesting and/or payment or settlement of such Other Stock-Based Awards (which
may include, but not be limited to, achievement of Performance Goals) and all other terms and conditions of such Other Stock-Based Awards.

 

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13.           Cash
Awards. The Administrator may grant awards that are payable solely in cash, as deemed by the Administrator to be consistent with
the purposes of the Plan, and such Cash Awards shall be subject to the terms, conditions, restrictions and limitations determined by the
Administrator, in its sole discretion, from time to time. Cash Awards may be granted with value and payment contingent upon the achievement
of Performance Goals.

 

14.           Performance
Awards.

 

(a)            Performance
Conditions. The right of a Participant to exercise an Award, vest in an Award, or receive a grant or settlement of an Award, and the
timing thereof, may be subject to (in whole or in part) such Performance Goals as may be specified by the Administrator at the time of
grant set forth in the Award Agreement evidencing such grant.

 

(b)            Performance
Award Pool. The Administrator may establish a Performance Award pool, which will be an unfunded pool, for purposes of measuring performance
of the Company in connection with Performance Awards. The amount of such Performance Award pool will be based upon the achievement of
a Performance Goal or Performance Goals during the given Performance Period, as specified by the Administrator. The Administrator may
specify the amount of the Performance Award pool as a percentage of any of such criteria, a percentage thereof in excess of a threshold
amount, or as another amount which need not bear a strictly mathematical relationship to such criteria.

 

15.           Change
of Control Provisions. Unless otherwise provided by the Administrator or in the applicable Award Agreement or otherwise, and subject
to Section 4(c), in the event of a Change of Control:

 

(a)            Any
surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue
any or all outstanding Awards or may substitute similar stock awards for any or all outstanding Awards (including, but not limited to,
awards to acquire the same consideration paid to the shareholders of the Company pursuant to the Change of Control), and any reacquisition
or repurchase rights held by the Company in respect of Stock issued pursuant to any outstanding Awards may be assigned by the Company
to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company). For clarity,
in the event of a Change of Control, any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s
parent company) may choose to assume or continue only a portion of an outstanding Award, to substitute a similar stock award for only
a portion of an outstanding Award, or to assume or continue, or substitute similar stock awards for, the outstanding Awards held by some,
but not all, Participants. The terms of any such assumption, continuation or substitution will be set by the Board.

 

(b)            With
respect to each outstanding Award that is not assumed or substituted in connection with a Change of Control, immediately upon the occurrence
of the Change in Control, (i) such Award shall become fully vested and exercisable, (ii) the restrictions, payment conditions,
and forfeiture conditions applicable to any such Award granted shall lapse, and (iii) any performance conditions imposed with respect
to such Award shall be deemed to be achieved at target performance levels.

 

(c)            For
purposes of this Section 15, an Award shall be considered assumed or substituted for if, following the Change of Control,
the Award is of substantially comparable value and remains subject to the same terms and conditions that were applicable to the Award
immediately prior to the Change of Control except that, if the Award related to shares of Stock, the Award instead confers the right to
receive common stock of the acquiring or ultimate parent entity.

 

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(d)            Notwithstanding
any other provision of the Plan, in the event of a Change of Control, except as would otherwise result in adverse tax consequences under
Section 409A of the Code, the Administrator may, in its discretion, provide that each Award shall, immediately upon the occurrence
of a Change of Control, be cancelled in exchange for a payment in cash or securities in an amount equal to (i) the excess of the
consideration paid per share of Stock in the Change of Control over the exercise or purchase price (if any) per share of Stock subject
to the Award multiplied by (ii) the number of shares of Stock granted under the Award. For clarity, such payment may be zero if the
consideration paid per share of Stock is equal to or less than the exercise price or purchase price (if any) per share of Stock subject
to the Award.

 

16.           Rights
as a Shareholder. No individual shall have any rights as a shareholder with respect to any shares of Stock covered by or relating
to any Award until the date of record issuance of such shares of Stock in the books of the Company or the issuance of a stock certificate
with respect to such shares. Except for adjustments provided in Section 4(c), no adjustment to any Award shall be made for
dividends or other rights for which the record date occurs prior to the date such stock certificate is issued.

 

17.           No
Employment Rights; No Right to Award. Nothing contained in the Plan or any Award Agreement shall confer upon any individual any
right with respect to the continuation of employment by or provision of services to the Company or interfere in any way with the right
of the Company, subject to the terms of any separate agreement to the contrary, at any time to terminate such employment or service or
to increase or decrease the compensation of such individual. No individual shall have any claim or right to receive an Award hereunder.
The Administrator’s granting of an Award to a Participant at any time shall neither require the Administrator to grant any other
Award to such Participant or other individual at any time nor preclude the Administrator from making subsequent grants to such Participant
or any other individual.

 

18.           Minimum
Regulatory Capital Requirements. Notwithstanding any provision of this Plan or any agreement to the contrary, Awards granted under
the Plan will expire or be forfeited, to the extent not exercised or settled, within forty-five (45) days following the receipt of notice
from the Company’s and/or the Bank’s primary federal or state regulator (“Regulator”) that (i) the
Company and/or the Bank has not maintained its minimum capital requirements (as determined by the Regulator); and (ii) the Regulator
is requiring termination or forfeiture of the Awards. Upon receipt of such notice from the Regulator, the Company and/or the Bank will
promptly notify each Participant that such Awards have become fully exercisable and vested to the full extent of the grant and that the
Participant must exercise the Award or the Award must be settled, as applicable, prior to the end of the 45-day period or such earlier
period as may be specified by the Regulator or the Participant will forfeit such Awards. In case of forfeiture, no Participant will have
a cause of action, of any kind or nature, with respect to the forfeiture against the Company, the Bank or any parent or Subsidiary. None
of the Company, the Bank, or any parent or Subsidiary will be liable to any Participant due to the failure or inability of the Company
and/or the Bank to provide adequate notice to the Participant.

 

19.           Securities
Matters and Regulations.

 

(a)            Notwithstanding
anything herein to the contrary, the obligation of the Company to sell or deliver Stock with respect to any Award granted under the Plan
shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the
obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Administrator. The Administrator
may require, as a condition of the issuance and delivery of certificates evidencing shares of Stock pursuant to the terms hereof, that
the recipient of such shares make such agreements and representations, and that such certificates bear such legends, as the Administrator,
in its sole discretion, deems necessary or advisable.

 

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(b)            Each
Award is subject to the requirement that, if at any time the Administrator determines that the listing, registration or qualification
of Stock issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval
of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Award or the issuance
of Stock, no such Award shall be granted or payment made or Stock issued, in whole or in part, unless listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions not acceptable to the Administrator.

 

(c)            In
the event that the disposition of Stock acquired pursuant to the Plan is not covered by a then current registration statement under the
Securities Act and is not otherwise exempt from such registration, such Stock shall be restricted against transfer to the extent required
by the Securities Act or regulations thereunder, and the Administrator may require a Participant receiving Stock pursuant to the Plan,
as a condition precedent to receipt of such Stock, to represent to the Company in writing that the Stock acquired by such Participant
is acquired for investment only and not with a view to distribution.

 

20.           Withholding
Taxes.

 

(a)            Prior
to any relevant taxable or tax withholding events in connection with the Awards under this Plan, the Company, a Subsidiary or an Affiliate,
as applicable, employing the Participant, may require the Participant to pay or make adequate arrangements satisfactory to the Company
with respect to any or all applicable U.S. federal, state, local, and international income tax, social insurance, payroll tax, fringe
benefits tax, payment on account and other tax-related items related to the Participant’s participation in this Plan and legally
applicable to the Participant (collectively, “Tax-Related Obligations”) prior to the delivery of shares of Stock pursuant
to exercise or settlement of any Award. Whenever payments in satisfaction of Awards granted under this Plan are to be made in cash, such
payment will be net of an amount sufficient to satisfy applicable withholding obligations for Tax-Related Obligations. Unless otherwise
determined by the Administrator, the Fair Market Value of the shares of Stock used or withheld to satisfy Tax-Related Obligations will
be determined as of the date that the taxes are required to be withheld.

 

(b)            Whenever
shares of Stock are to be delivered pursuant to an Award, a Participant may elect, subject to any Company insider trading policy (including
blackout periods), to satisfy the Tax-Related Obligations by (i) paying cash, (ii) electing to have the Company withhold otherwise
deliverable shares of Stock having a Fair Market Value equal to the Tax-Related Obligations to be withheld, or (iii) any other method
permitted by applicable law and approved by the Administrator. Such shares shall be valued at their Fair Market Value on the date of which
the amount of tax to be withheld is determined. Fractional share amounts shall be settled in cash. Such a withholding election may be
made with respect to all or any portion of the shares to be delivered pursuant to an Award. The Company may withhold or account for these
Tax-Related Obligations by considering applicable statutory withholding rates or other applicable withholding rates, including maximum
rates for the applicable tax jurisdiction to the extent consistent with applicable laws.

 

21.           Notification
of Election Under Section 83(b) of the Code. If any Participant shall, in connection with the acquisition of shares
of Stock under the Plan, make the election permitted under Section 83(b) of the Code, such Participant shall notify the Company
of such election within 10 days of filing notice of the election with the Internal Revenue Service and shall provide a copy of such filing
notice to the Company.

 

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22.           Notification
Upon Disqualifying Disposition Under Section 421(b) of the Code. Each Award Agreement with respect to an Incentive Stock
Option shall require the Participant to notify the Company of any disposition of shares of Stock issued pursuant to the exercise of such
Option under the circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions) within
10 days of such disposition.

 

23.           Amendment
or Termination of the Plan; Amendment of Award Agreements. The Board may, at any time, suspend or terminate the Plan or revise
or amend it in any respect whatsoever. Nothing herein shall restrict the Administrator’s ability to exercise its discretionary authority
pursuant to Section 3 and Section 4 which discretion may be exercised without amendment to the Plan. The Administrator
may, at any time, amend an Award Agreement in any respect whatsoever. Notwithstanding the foregoing, no action hereunder may, without
the consent of a Participant, reduce the Participant’s rights under any outstanding Award and shareholder approval shall be required
for any such action if and to the extent such approval is required in order to comply with applicable law or stock exchange listing requirement.

 

24.           Transferability
of Awards.

 

(a)            General.
No Award (or any rights and obligations thereunder) may be sold, exchanged, transferred or assigned, whether voluntarily or involuntarily,
other than by will or by the laws of descent and distribution, and all such Awards (and any rights thereunder) will be exercisable during
the life of the Participant only by the Participant or the Participant’s legal representative. Notwithstanding the preceding sentence,
the Administrator may permit, under such terms and conditions that it deems appropriate in its sole discretion, (i) that a Participant
may transfer an Award in whole or in part without payment of consideration to a member of the Participant’s immediate family, to
a trust established for the benefit of a member of the Participant’s immediate family, or to a partnership whose only partners are
members of the Participant’s immediate family, or (ii) that except as prohibited by Rule 16b-3, a Participant may transfer
all or a portion of an Award to a person for which the Participant is entitled to a deduction for a “charitable contribution”
under Section 170(a)(i) of the Code, provided in either case that no further transfer by such permitted transferee will
be permitted, and provided further that the exercise of the Award remains the power and responsibility of the Participant or his
or her legal representative. Any sale, exchange, transfer or assignment in violation of the provisions of this Section 24
will be null and void. All of the terms and conditions of this Plan and the Award Agreements will be binding upon any permitted successors
and assigns.

 

(b)            Transfers
Upon Death. Upon the death of a Participant, outstanding Awards granted to such Participant may be exercised only by the executor
or administrator of the Participant’s estate or by an individual who shall have acquired the right to such exercise by will or by
the laws of descent and distribution. No transfer of an Award by will or the laws of descent and distribution shall be effective to bind
the Company unless the Administrator shall have been furnished with (i) written notice thereof and with a copy of the will and/or
such evidence as the Administrator may deem necessary to establish the validity of the transfer and (ii) an agreement by the transferee
to comply with all the terms and conditions of the Award that are or would have been applicable to the Participant and to be bound by
the acknowledgments made by the Participant in connection with the grant of the Award.

 

25.           Expenses
and Receipts. The expenses of the Plan shall be paid by the Company. Any proceeds received by the Company in connection with any
Award may be used for general corporate purposes.

 

26.           Term
of Plan. Unless earlier terminated by the Board pursuant to Section 23, the right to grant Awards under the Plan shall
terminate on the tenth anniversary of the Effective Date. Awards outstanding at Plan termination shall remain in effect according to their
terms and the provisions of the Plan.

 

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27.           Participant
Rights. No Participant shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity
of treatment for Participants.

 

28.           Unfunded
Status of Awards. The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall
give any such Participant any rights that are greater than those of a general creditor of the Company.

 

29.           No
Fractional Shares. No fractional shares of Stock shall be issued or delivered pursuant to the Plan. The Administrator shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares
or any rights thereto shall be forfeited or otherwise eliminated.

 

30.           Beneficiary.
A Participant may file with the Administrator a written designation of a beneficiary on such form as may be prescribed by the Administrator
and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Participant, the executor or administrator
of the Participant’s estate shall be deemed to be the Participant’s beneficiary. If a Participant designates his or her spouse
as a beneficiary and such Participant later becomes divorced or legally separated from that spouse, such beneficiary designation shall
be deemed automatically rescinded upon such event.

 

31.           Paperless
Administration. In the event that the Company establishes, for itself or using the services of a third party, an automated system
for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then
the paperless documentation, granting or exercise of Awards by a Participant may be permitted through the use of such an automated system.

 

32.           Severability.
If any provision of the Plan is held to be invalid or unenforceable, the other provisions of the Plan shall not be affected but shall
be applied as if the invalid or unenforceable provision had not been included in the Plan.

 

33.           Applicable
Law. Except to the extent preempted by any applicable federal law, the Plan shall be construed and administered in accordance
with the laws of the State of Texas without reference to its principles of conflicts of law.

 

34.           Clawback.
Notwithstanding any other provisions in this Plan, any Award which is subject to recovery under any law, government regulation or stock
exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government
regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation
or stock exchange listing requirement).

 

    19

     

    

 

35.           Section 409A
Compliance. The Plan as well as payments and benefits under the Plan are intended to be exempt from, or to the extent subject
thereto, to comply with Section 409A of the Code, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted
in accordance therewith. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated
taxation and/or tax penalties under Section 409A of the Code, the Participant shall not be considered to have terminated employment
with the Company for purposes of the Plan and no payment shall be due to the Participant under the Plan or any Award until the Participant
would be considered to have incurred a “separation from service” from the Company within the meaning of Section 409A
of the Code. Any payments described in the Plan that are due within the “short term deferral period” as defined in Section 409A
of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. Each payment in a series of installment
payments shall be treated as a separate payment. Notwithstanding anything to the contrary in the Plan, to the extent that any Awards are
payable upon a separation from service and such payment would result in the imposition of any individual tax and penalty interest charges
imposed under Section 409A of the Code, the settlement and payment of such awards shall instead be made on the first business day
after the date that is six (6) months following such separation from service (or death, if earlier). Each amount to be paid or benefit
to be provided under this Plan shall be construed as a separate identified payment for purposes of Section 409A of the Code. The
Company makes no representation that any or all of the payments or benefits described in this Plan will be exempt from or comply with
Section 409A of the Code or otherwise result in any particular tax treatment and makes no representation or guarantee that Section 409A
of the Code will not apply to any such payment or benefit or that any particular tax treatment will (or will not) apply to such payment
or benefit. The Participant shall be solely responsible for the payment of any taxes and penalties incurred under Section 409A of
the Code or otherwise.

 

36.           Correction
of Errors. Notwithstanding anything in this Plan or an Award Agreement to the contrary, the Administrator may amend an Award,
to take effective retroactively or otherwise, as deemed necessary or advisable for the purpose of correcting errors occurring in connection
with the grant or documentation of an Award, including rescinding an Award erroneously granted, including, but not limited to, an Award
erroneously granted to an individual who is not eligible to receive on an Award on the date of grant of the Award. By accepting an Award
under the Plan, each Participant agrees to any amendment made pursuant to this Section 36 to any Award made under the Plan
without further consideration or action.

 

37.           Effective
Date. Unless earlier terminated by the Board, the Plan will become effective upon the consummation of the transactions contemplated
by that certain Agreement and Plan of Merger entered into on November 5, 2021, by and among the Company and Allegiance Bancshares, Inc.
(the “Merger,” and the date that the Plan becomes effective, the “Effective Date”), subject to the
approval of the Company’s shareholders, and will remain in effect until the tenth anniversary of the earlier of (i) the date
the Board adopted the Plan or (ii) the date the Company’s shareholders approved the Plan, but Awards previously granted may
extend beyond that date in accordance with the Plan. If the Plan is not approved by the Company’s shareholders, the Plan will not
become effective, and no Awards will be granted under the Plan.

 

    20

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