Item 5.02(e) Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April 18, 2022,
the Board of Directors (“Board”) and Compensation Committee (“Compensation Committee”) of the Board of International
Bancshares Corporation (“IBC”) approved and adopted the following compensatory plans and arrangements:
2022 International
Bancshares Corporation Stock Appreciation Rights Plan
The 2022 International
Bancshares Corporation Stock Appreciation Rights Plan (“SAR Plan”) is designed to advance the interests of IBC and its shareholders
by affording officers, employees, consultants and advisors of IBC and its subsidiaries an opportunity to participate in IBC’s growth
by the grant of one or more Stock Appreciation Rights (“SARs”). In so doing, IBC seeks to motivate and retain present
officers, employees, consultants and advisors of IBC and its subsidiaries as well as attract highly competent individuals whose judgment,
initiative, leadership, and continued effort will contribute to the success of IBC and its subsidiaries.
SAR Plan Document
The full text of the SAR
Plan is included as Exhibit 10.1 to this Form 8-K. The grant of a SAR is determined and made by the committee appointed by the
Board from time to time and consisting of at least two Board members, each of whom is both a non-employee director and an outside director
(“SAR Committee”). The following is a summary of the material features of the SAR Plan and is qualified in its entirety by
the text of the SAR Plan attached to this Form 8-K as Exhibit 10.1.
Eligible Persons
Eligible persons include
any officer, employee, consultant or advisor of IBC or any subsidiary, as may be designated from time to time by the SAR Committee as
eligible to receive a SAR subject to the conditions of the SAR Plan. In determining eligibility of any individual to be granted a SAR,
including the number of SARs to be granted to any individual, the SAR Committee shall take into account the position and responsibilities
of the individual being considered, the nature and value to IBC or its subsidiaries of his or her service and accomplishments, his or
her present and potential contribution to the success of IBC or its subsidiaries, and other factors as the SAR Committee may deem relevant.
Administration
The SAR Plan is administered
by the SAR Committee, which shall be appointed by the Board from time to time and which shall consist of at least two Board members, each
of whom is both a non-employee director, as defined by Rule 16b-3 promulgated under the Exchange Act, and an outside director, as
defined by Section 162(m) of the Internal Revenue Code. No eligible officers or employees of IBC or its subsidiaries are permitted
to serve on the SAR Committee.
The SAR Committee has
full authority and absolute sole discretion, including, but not limited to, granting SARs; to determine which eligible persons are granted
SARs; the form, terms, conditions, timing and amount of any SARs granted; the number of shares of IBC stock subject to each SAR and the
base value of each SAR; the period over which the SAR shall vest and become and remain exercisable; to determine the forms and terms and
provisions of each respective SAR Agreement (as defined below), which need not be identical; and to construe and interpret the SAR Plan
and any SAR Agreements.
Terms and Limitations
The aggregate number of
underlying shares of IBC stock that may be used for SAR grants under the SAR Plan shall not exceed 750,000 shares, but no shares are ever
actually granted, and the grant will settle in cash upon exercise. No SAR granted under the SAR Plan shall have a term in excess of ten
years from the grant date of such SAR. Each grant of a SAR under the SAR Plan shall be evidenced by a written Stock Appreciation Rights
Award Agreement (“SAR Agreement”) dated as of the grant date and executed by IBC and the participant, as further described
below. The SAR Committee has absolute sole discretion to determine the form and terms and provisions of each respective SAR Agreement,
which need not be identical. The full text of the form of the SAR Agreement is included as Exhibit 10.2 to this Form 8-K.
Amendment and Termination of the SAR Plan
The Board may at any time
terminate or suspend, and may at any time and from time to time and in any respect amend or modify, the SAR Plan including as is deemed
necessary or advisable for the purpose of conforming the SAR Plan or any SAR Agreement to any present or future law relating to the SAR
Plan and to the administrative regulations promulgated thereunder. All SARs granted under the SAR Plan shall be granted prior to the tenth
anniversary of the effective date of the SAR Plan, such SARs shall continue under the SAR Plan in accordance with their terms, and the
SAR Plan shall terminate as of the tenth anniversary of the effective date, which is the date on which the Board approved the SAR Plan.
2022 International
Bancshares Corporation Stock Appreciation Rights Award Agreement
In connection with the
SAR Plan, the Board and Compensation Committee also approved the form of the SAR Agreement. Participants in the SAR Plan may enter a SAR
Agreement with IBC which provides for a grant of an aggregate number of stock appreciation rights.
SAR Agreement Document
The full text of the form
of SAR Agreement is included as Exhibit 10.2 to this Form 8-K. The participants are entitled to exercise any granted SARs to
receive the fair market value of shares of IBC stock on the date of exercise over the fair market value of shares of IBC stock on the
grant date. The following is a summary of the material features of the SAR Agreement and is qualified in its entirety by the text of the
form of SAR Agreement attached to this Form 8-K as Exhibit 10.2.
Terms and Conditions
The SAR Agreement shall
set forth the terms and conditions of such SAR, including but not limited to the maximum duration of the SAR, the number of underlying
shares of IBC stock to which the SAR pertains, and the conditions upon which the SAR shall become vested and exercisable, as may be determined
by the SAR Committee consistent with the SAR Plan. The SAR Agreement shall establish the grant date of the SAR; the number of SARs granted;
the base value of the SAR, defined as the fair market value of one share of IBC stock on the grant date; and the expiration date. The
SAR Agreement shall additionally establish a vesting schedule for the SAR granted under the SAR Agreement, which shall be conditioned
on the participant’s continuous service to IBC or its subsidiaries.
2022 International
Bancshares Corporation Amended and Restated Management Incentive Plan
The purpose of the 2022
International Bancshares Corporation Amended and Restated Management Incentive Plan (“MIP”) is to promote and advance the
interests of IBC and its shareholders by enabling IBC to attract, retain and reward officers of IBC and its affiliates. The MIP is an
amendment and restatement of the International Bancshares Corporation 2013 Management Incentive Plan and applies to performance periods
commencing on or after January 1, 2022.
MIP Document
The full text of the MIP
is included as Exhibit 10.3 to this Form 8-K. The grant of any traditional incentive payment or merchant banking incentive payment
(“Incentive Payment”) is determined and made by the Compensation Committee or a subcommittee thereof appointed by the Board
to administer the MIP consisting of at least two Board members, each of whom is an outside director, as defined in Section 162(m) of
the Internal Revenue Code (“MIP Committee”). The following is a summary of the material features of the MIP and is qualified
in its entirety by the text of the MIP attached to this Form 8-K as Exhibit 10.3.
Eligible Employees
Eligible employees include
any officer of IBC or an affiliate who is designated by the MIP Committee as eligible to receive an Incentive Payment under the MIP. Historically,
only Dennis E. Nixon, IBC’s Chairman and CEO, has been designated as eligible to receive any Incentive Payment under the MIP.
Administration
The MIP Committee shall
administer the MIP, and it shall have full authority and absolute sole discretion to construe, interpret, and administer the MIP, including,
but not limited to, determinations relating to eligibility, whether to make Incentive Payments, the time or times when performance targets
are established, the performance periods to which Incentive Payments relate, and the actual dollar amount of any Incentive Payment.
Performance Measures and Performance Targets
– Traditional Incentive Payments
Within 90 days after the
beginning of each annual performance period, the MIP Committee shall, in its sole discretion and before the outcome is substantially certain,
determine and establish in writing (1) the applicable performance period; and (2) the performance measures to be used for purposes
of setting the annual performance targets that must be attained during the performance period for participants to receive traditional
incentive payments, and the calculation of those traditional incentive payments, based upon the relative level of attainment of the annual
performance targets.
Incentive Payments
The plan includes traditional
incentive payments and merchant banking incentive payments. Whether Incentive Payments are made to any officer for a given performance
period is at the sole discretion of the MIP Committee.
The availability of traditional
incentive payments is dependent on the attainment of performance targets, determined by the MIP Committee, for a given performance period.
The maximum amount payable to any officer in a calendar year as a traditional incentive payment with respect to all performance periods
completed during such calendar year shall be the lesser of 2.5% of IBC’s total income before taxes for the fiscal year or $3,000,000.
The MIP Committee shall
also determine whether merchant banking incentive payments shall be made for a given performance period. The MIP Committee will select
officers for merchant banking incentive payments, if applicable, and the Compensation Committee will take into account the role, time
and effort devoted by each selected officer to the success of IBC’s merchant banking investments during the performance period.
Aggregate merchant banking incentive payments attributable to any one transaction during the performance period may not exceed the lesser
of $15,000,000 or 5% of the transaction value.
Incentive Payments shall
be payable in cash as soon as administratively practicable after the end of the calendar year in which the performance period ends or
is deemed to have ended in the event of a change in control of IBC, but in no event after the date that is two and a half months after
the end of the calendar year in which the performance period ends or is deemed to have ended in the event of a change in control of IBC.