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Exhibit 10.7
EMPLOYMENT
AGREEMENT
This employment
agreement ("Agreement") is dated as of June 30, 1999, and is
entered into by and between DON E. COSBY ("Employee") and STATE
NATIONAL BANCSHARES, INC., a Texas corporation ("Employer").
This Agreement is an amendment and restatement of the employment
agreement previously entered into between the Employee and the
Employer and completely supersedes and replaces such prior
agreement. As an inducement to render services and superior
performance to Employer, Employee and Employer agree as
follows:
1.
Employment.
Upon the terms and subject
to the conditions contained in this Agreement, Employee agrees to
provide full-time services for Employer during the term of this
Agreement. Employee agrees to devote his best efforts to the
business of Employer, and shall perform his duties in a diligent,
trustworthy, and business-like manner, all for the purpose of
advancing the business of Employer.
2.
Duties.
The duties of Employee shall
be those duties which can reasonably be expected to be and have
been performed by a person with the title of Executive
Vice-President and Chief Financial Officer of a major financial
organization, and to which Employer and Employee may hereafter
mutually agree in writing. Employee shall report directly to the
Chief Executive Officer. Employee's duties may, from time to time,
be changed or modified at the discretion of the Board, subject to
the terms of this Agreement.
3.
Salary and
Benefits.
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(a)
Base Salary
. Employer shall, during the
term of this Agreement, pay Employee an annual base salary of
$175,000.00 beginning July 1, 1999. Such salary shall be paid
in semi-monthly installments less applicable withholding and salary
deductions. Base salary shall be reviewed and adjusted at least
annually.
(b)
Bonus
. Employee shall be eligible
to receive an annual bonus for each year during the term of this
Agreement as shall be determined by the Board.
(c)
Reimbursement of
Expenses . Employer shall reimburse Employee for
all out-of-pocket expenses incurred by Employee in the course of
his duties, in accordance with normal policies. Employee shall be
required to submit to Employer appropriate documentation supporting
such out-of-pocket expenses as a prerequisite to reimbursement in
accordance with normal policies.
(d)
Employee
Benefits . Employee shall be entitled to
participate in the employee benefit programs generally available to
employees of Employer, and to all normal perquisites provided to
senior executive officers of Employer and all such benefits and
perquisites shall be consistent with those customarily
received.
(e)
Automobile
Allowance . During
the term of this Agreement, Employer shall provide to Employee an
automobile or pay the Employee an automobile allowance of at least
$600.00 per month. Except for this automobile allowance, the
Employer shall not be obligated to pay any other expenditure with
respect to the ownership, operations, insurance or maintenance of
the Employee's automobile. The Employee shall procure and maintain
in force automobile liability insurance on such automobile with
comprehensive coverage with extended coverage, collision coverage
for the actual cash value of the vehicle with no more than a Five
Hundred and No/100 Dollar ($500) deductible and for bodily injury,
death, or property damage in limits no less than Three Hundred
Thousand and No/100 Dollars ($300,000) for property damage and
Three Hundred Thousand and No/100 Dollars ($300,000) for
public liability.
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4.
Term of
Agreement. This
Agreement shall become effective and binding immediately upon its
execution, and shall remain in effect until July 1, 2002, or
until later termination if this Agreement is renewed under this
Section 4. After July 1, 2002, this Agreement shall be
automatically and continually renewed for an eighteen
(18) month term at the end of each eighteen (18) month
term, unless either Employer or Employee provides written notice of
election not to renew at least ninety (90) days before the
applicable renewal date. If Employer elects not to renew the term
of this Agreement at any time after July 1, 2002, Employer
shall pay as a service award to Employee, on or before the first
day of the last eighteen (18) month period of this Agreement
(including both the initial term and all renewal terms), the
benefits described in Section 6 of this Agreement.
5.
General Termination
Provisions. If
either Employer or Employee terminates this Agreement under the
provisions of this Section 5, Employer will be liable to
Employee for all payments (if any) as described in Section 5,
as follows:
-
(a)
Termination by
Employer . The
Board may terminate this Agreement under this Section 5 only
upon the occurrence of one or more of the following events, and
under the conditions described below.
-
(i)
Disability . If, during the term of this Agreement,
Employee's employment terminates due to Disability, Employer shall
pay to Employee all amounts payable under Section 3(a) above
during the remaining term of this Agreement (as provided in
Section 4 above). From and after the date of termination of
this Agreement due to Disability, Employer shall pay to Employee
until his death, an amount equal to 50% of the amount paid to
Employee under Section 3(a) during the last calendar year of
the term of this Agreement. All amounts payable under this
Section 5(a) shall be paid in semi-monthly installments, less
applicable withholdings for income taxes and employment
taxes.
(ii)
Termination for Cause . Employer may discharge Employee for
Cause, and, upon such termination, this Agreement shall terminate
immediately and Employer shall have no further obligation to make
payments under this Agreement which have not already become
payable, but have not yet been paid.
(b)
Termination by
Employee . Employee may voluntarily terminate
this Agreement at any time following its execution. If Employee,
however, shall voluntarily terminate his employment for other than
Good Reason, this Agreement shall terminate immediately and
Employer shall have no further obligation to make payments under
this Agreement which have not already become payable, but have not
yet been paid. Employee may terminate this Agreement for Good
Reason under the provisions of Section 6.
6.
Special Termination
Provisions. If
Employer or Employee terminate this Agreement under the provisions
of this Section 6, Employer shall be liable to Employee for
all payments as described in this Section 6, as
follows:
-
(a)
Termination Without Cause
and Termination for Good Reason . If Employer shall discharge Employee
without Cause or not renew the term of this Agreement at any time
after July 1, 2002, or if Employee shall terminate his
employment for Good Reason, then Employer shall pay to Employee in
one lump sum within five (5) days of any such event, the
following benefit:
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previous year or the maximum bonus that would be
paid under Employer's bonus award methodology for the year in which
the termination or discharge of Employee occurred if Employee was
employed at year end, multiplied by (y) three (all of which is
further shown by the formula on Exhibit A attached
hereto).
7.
Excess
Payments. Notwithstanding any provision of this
Agreement
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