TAX GROSS UP AGREEMENT
Exhibit 10.4
Execution Copy
THIS TAX GROSS UP AGREEMENT (this “Agreement”) is made and entered into as of the
12th day of June 2006, by and between XXX X. XXXXXXX, a key employee and officer (the
“Executive”) of State National Bancshares, Inc., and STATE NATIONAL BANCSHARES, INC., a Texas
corporation and a registered bank holding company (the “Company”).
RECITALS:
WHEREAS, the Executive has previously been granted options to acquire 250,000 shares of common
stock of the Company (the “Options”);
WHEREAS, the Options are non-statutory stock options and therefore subject to taxation upon
exercise by the Executive;
WHEREAS, on the date hereof, the Company entered into an Agreement and Plan of Merger By and
Among Banco Bilbao Vizcaya Argentaria, S.A. (the “Parent”), and the Company (the “Merger
Agreement”) pursuant to which a newly-formed wholly-owned subsidiary of Parent will be merged with
and into the Company (the “Transaction”) and the Company will be the surviving corporation;
NOW THEREFORE, in consideration of the mutual undertakings set forth in this Agreement,
including the continued employment by the Executive with the Company, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Executive
and the Company agree as follows:
1. Tax Gross Up Payment. Provided that the Executive exercises during 2006 sufficient
options to preclude imposition of any excise tax under Section 280G of the Code with respect to the
Transaction, the Company shall pay to the Executive a gross-up payment of $1,923,077.
2. Termination. This Agreement shall terminate immediately following the payment of
the aggregate Gross-Up Payment with respect to the Options.
3. Amendment. This Agreement may be amended, in whole or in part, only by a written
instrument signed by the Executive and the Company.
4. Headings. Headings and subheadings in this Agreement are inserted for reference
and convenience only and shall not be deemed a part of this Agreement.
5. Applicable Law. The validity and interpretation of this Agreement shall be
governed by the laws of the State of Texas.
6. Withholding of Taxes. The Company shall deduct from the amount of any payment made
pursuant to this Agreement any amounts required to be paid or withheld by the
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Execution Copy
Company with respect to federal or state taxes. By executing this Agreement, the Executive
agrees to all such deductions.
7. Severability. In case any one or more of the provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions in this Agreement shall not in any way be affected or
impaired.
IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Agreement
and has executed this Agreement as of the date first written above, and that, upon execution, each
has received a conforming copy.
EXECUTIVE: |
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/s/ Xxx X. Xxxxxxx | ||||
STATE NATIONAL BANCSHARES, INC. |
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By: | /s/ Xxx X. Xxxxx | |||
Name: | Xxx X. Xxxxx | |||
Title: | Executive Vice President and Chief Financial Officer | |||
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