SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X] [ ] Confidential, for Use
Filed by a Party other than the Registrant [ ] of the Commission Only
Check the appropriate box: (as permitted by
[ ] Preliminary Proxy Statement Rule 14a-(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
INTERNATIONAL BANCSHARES CORPORATION
(Name of Registrant as Specified In Its Charter)
______________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and sate how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
INTERNATIONAL BANCSHARES CORPORATION
Post Office Drawer 1359
Laredo, Texas 78042-1359
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
International Bancshares Corporation (the "Company") will be held at the offices
of the Company, 1200 San Bernardo, Laredo, Texas, on May 16, 1996 at 7:00 p.m.
for the following purposes:
(1) To elect ten (10) directors of the Company to serve until the next
Annual Meeting of Shareholders and until their successors shall
have been duly elected and qualified;
(2) To approve the appointment of independent auditors for the 1996
fiscal year;
(3) To consider and vote upon a proposal to approve the 1996
International Bancshares Corporation Stock Option Plan adopted by
the Board of Directors on April 3, 1996; and
(4) To transact such other business as may lawfully come before the
meeting or any adjournment thereof.
The record date for the meeting has been fixed at March 28, 1996. Only
shareholders of record at the close of business on that date will be entitled to
vote at the meeting or any adjournment thereof.
In order to ensure the representation of a quorum at the meeting,
shareholders who do not expect to attend the meeting in person are urged to sign
the enclosed proxy and return it promptly to the Trust Division, International
Bank of Commerce, P. O. Drawer 1359, Laredo, Texas 78042-1359. A return envelope
is enclosed for that purpose.
INTERNATIONAL BANCSHARES CORPORATION
Dennis E. Nixon
President
Dated: April 15, 1996
<PAGE>
INTERNATIONAL BANCSHARES CORPORATION
1200 San Bernardo Avenue
Laredo, Texas 78040
PROXY STATEMENT
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of
International Bancshares Corporation, a Texas Corporation (the "Company") to be
voted at the 1996 Annual Meeting of Shareholders to be held on May 16, 1996 at
7:00 p.m. at the offices of the Company, 1200 San Bernardo, Laredo, Texas. The
Company will bear the cost of such solicitation. It is expected that the
solicitation of proxies will be primarily by mail. Proxies may be solicited
personally by regular employees of the Company at a nominal cost. Any
shareholder giving a proxy has the power to revoke it at any time prior to the
voting of the proxy by giving notice in person or in writing to the Secretary of
the Company or by appearing at the annual meeting and voting in person. The
approximate date on which this proxy statement and the accompanying form of
proxy are first sent or given to security holders is April 15, 1996.
VOTING AT MEETING
Only holders of record of common stock, par value $1.00 per share
("Common Stock"), of the Company at the close of business on March 28, 1996,
shall be entitled to vote at the meeting. There were 6,961,356 shares of Common
Stock issued and outstanding on the record date held of record by approximately
1,360 shareholders. Each share of Common Stock is entitled to one vote.
All shares entitled to vote represented by a properly executed and
unrevoked proxy received in time for the meeting will be voted at the meeting in
accordance with the instructions given, but in the absence of instructions to
the contrary, such shares will be voted affirmatively. Persons empowered as
Proxies will also be empowered to vote in their discretion upon such other
matters as may properly come before the meeting or any adjournment thereof. If
any nominee shall be unable to serve, which is not now contemplated, the proxies
will be voted for such substitute nominee(s) as the Board of Directors
recommends.
A quorum for the transaction of business at the Annual Meeting requires
representation, in person or by proxy, of the holders of a majority of the
issued and outstanding shares of Common Stock. The judges of election will treat
abstentions and broker non-votes as shares that are present for purposes of
determining the presence of a quorum for the transaction of business at the
meeting. A quorum with respect to any matter to be voted on at the Annual
Meeting requires representation, in person or by proxy, of the holders of a
majority of the issued and outstanding shares of Common Stock entitled to vote
on the matter. Abstentions will be treated as present and entitled to vote with
respect to any matter submitted to the shareholders for a vote for purposes of
determining both the presence of a quorum with respect to such matter and the
approval of such matter. If a broker indicates on a proxy that it does not have
discretionary authority as to certain shares to vote on a particular matter, the
holder(s) of such shares will not be considered as present and entitled to vote
with respect to such matter for purposes of determining either the presence of a
quorum with respect to such matter or the approval of such matter. With respect
to any matter other than the election of directors, such matter shall be
determined by the affirmative vote of the holders of a majority of the shares of
Common Stock represented, in person or by proxy, at the meeting and entitled to
vote thereon. Thus, abstention with respect to any such matter will have the
same legal effect as a vote against such matter, while broker non-votes will not
affect the outcome of such matter. With respect to the election of directors,
the directors shall be elected by a plurality vote of the holders of shares of
Common Stock present at the meeting and entitled to vote thereon.
PROPOSAL - 1
ELECTION OF DIRECTORS
Ten directors, constituting the entire Board of Directors, are to be
elected at the Annual Meeting. Each director is to hold office until the next
Annual Meeting and until his successor is elected and qualified. The Proxies
named in the accompanying proxy, who have been designated by the Board of
Directors of the Company, intend to vote for the following nominees, all of whom
are currently directors, unless otherwise instructed in such proxy. Certain
information concerning such nominees is set forth below including information
regarding their positions with International Bank of Commerce, the Company's
lead bank ("IBC"):
Served as
Nominee for Director
Director Since (1) Age Principal Occupation (2)
----------- --------- --- ------------------------
Lester Avigael 1966 69 Retail Merchant
(Las Novedades, Inc.)
R. David Guerra 1993 43 Vice President of the Company
since 1986 and President of the
IBC branch in McAllen, Texas and
Director of IBC since 1990
Irving Greenblum 1981 66 Retail Merchant (Muebleria
Mexico, S.A.)
Richard E. Haynes 1977 53 Attorney at Law; Real Estate
Investments
Roy Jennings Jr. 1966 72 Vice Chairman of the Board of
IBC; Investments
Sioma Neiman 1981 68 International entrepreneur;
Advisory Director of IBC
since 1976
Dennis E. Nixon 1975 53 Chairman of the Board since May
1992 and President of the
Company since 1979; President
and Chief Executive Officer
of IBC
Leonardo Salinas 1976 62 Vice President of the Company
since 1982; Senior Executive
Vice President and Director of
IBC
Antonio R. Sanchez Jr. 1995 53 Chairman of the Board of Sanchez
O'Brien Oil & Gas Corporation;
Investments
Alberto A. Santos 1966 68 Investments
(1) Includes time served as director of IBC. The Company became the
successor issuer to IBC on July 28, 1980.
(2) Except as otherwise noted, each nominee has held the office indicated or
other offices in the same company for the last five years.
None of the nominees for director and none of the executive officers
have a family relationship with any of the other nominees for director or
executive officers, except for Leonardo Salinas and Alberto A. Santos, who are
first cousins.
None of the above nominees is a director of any other company which has
a class of securities registered under, or is required to file reports under,
the Securities
2
Exchange Act of 1934 or of any company registered under the Investment Company
Act of 1940, except for Mr. Sanchez who is Chairman of the Board of Sanchez
O'Brien Oil & Gas Corporation.
EXECUTIVE OFFICERS
The executive officers of the Company are Dennis E. Nixon, President and
Chairman of the Board; Leonardo Salinas, Vice President; R. David Guerra, Vice
President; and Arnoldo Cisneros, Secretary-Treasurer, all of whom are nominees
for director except for Arnoldo Cisneros. Arnoldo Cisneros, age 44, is presently
Secretary-Treasurer of the Company and Executive Vice President of IBC and has
served both organizations since 1982.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Audit Committee of the Board of Directors during 1995 consisted of
Lester Avigael, Alberto A. Santos and Richard E. Haynes. The Committee met six
times during the 1995 fiscal year. Each member of the Committee attended all six
meetings, except Lester Avigael who attended only four. The functions of the
Audit Committee are to recommend the appointment of the independent auditors; to
review the annual plan of the internal and independent auditors; to review
annual and quarterly financial reports and to review the results of examinations
by the internal auditor and the independent auditors, including recommendations
regarding internal controls and operating procedures, along with management's
response and follow-up to ensure any necessary corrective action has been
implemented. Under applicable law, the Audit Committee is required to review
with management and the independent auditors the basis for all financial
reports.
The Compensation Committee of the Board of Directors during 1995
consisted of Lester Avigael, Roy Jennings Jr., Richard E. Haynes and Alberto A.
Santos. The Committee met once during the 1995 fiscal year. The primary function
of the Compensation Committee is the administration of the Company's 1987 Key
Contributor Stock Option Plan.
The Board of Directors of the Company does not have a standing
nominating committee or a committee which performs similar functions.
During 1995, the Board of Directors held five meetings. All of the
directors attended 100% of the aggregate of the total number of meetings of the
board and of committees on which they served, except for Lester Avigael and
Richard E. Haynes who missed one meeting, Irving Greenblum who missed two
meetings and Sioma Neiman who attended fewer than 75% of such meetings.
PRINCIPAL SHAREHOLDERS
Insofar as is known to the Company, no person beneficially owned, as of
March 28, 1996, more than five percent of the outstanding Common Stock of the
Company, except as follows:
Shares of Common Stock Percent
Name and Address Beneficially Owned as of
of Beneficial Owner of March 28, 1996 Class
------------------- ---------------------- ------
Alicia M. Sanchez (1) 1,295,443 18.61%
2119 Guerrero Street
Laredo, Texas 78040
A. R. Sanchez Jr. (2) 695,522 10.00%
P.O. Box 2986
Laredo, Texas 78041
3
(1) All the shares shown for Mrs. Alicia M. Sanchez are held by certain
trusts for which Mrs. Sanchez serves as sole trustee. 253,400 of the
shares are held by her as sole trustee for trusts in which certain of
her children and grandchildren have a vested interest in the income and
corpus of the trusts. Mrs. Sanchez has the sole power to vote and to
dispose of all of the shares held by such trusts.
(2) A. R. Sanchez Jr. owns directly and has the sole power to vote and to
dispose of 415,858 shares owned beneficially by him. Mr. Sanchez also
controls the disposition of 279,664 shares as trustee for trusts in
which his children have a vested interest in the income and corpus of
such trusts, however, George M. Sanchez, the brother of Mr. Sanchez, has
the power to vote the 279,664 shares.
SECURITY OWNERSHIP OF MANAGEMENT
Based upon information received from the persons concerned, each of whom
is a nominee for director, the following individuals and all directors and
executive officers of the Company as a group owned beneficially as of April 3,
1996, the number and percentage of outstanding shares of Common Stock of the
Company indicated in the following table:
Name of Individual Shares Beneficially Owned Percent
or Identity of Group as of March 28, 1996 of Class
-------------------- -------------------------- --------
Lester Avigael (1) 64,238 *
Irving Greenblum (2) 67,557 *
R. David Guerra (3) 60,458 + *
Richard E. Haynes 6,772 *
Roy Jennings Jr. (4) 93,970 1.35%
Sioma Neiman (5) 278,040 4.00%
Dennis E. Nixon (6) 341,625 + 4.91%
Leonardo Salinas (7) 28,220 + *
A. R. Sanchez Jr (8) 695,522 10.00%
Alberto A. Santos 52,047 *
All Directors and Executive Officers
as a group (11 persons) (9) 1,707,207 24.52%
* Ownership of less than one percent
+ Include shares which are issuable upon the exercise of options
exercisable on or prior to May 27, 1996 ("currently exercisable
options").
(1) The holdings shown for Mr. Avigael include 4,042 shares which he holds
as trustee for the benefit of his grandchildren.
(2) The holdings shown for Mr. Greenblum include 8,016 shares held in the
name of his wife.
(3) The holdings shown for Mr. Guerra include 54,208 shares which he and his
wife hold in their names jointly. Total holdings for Mr. Guerra include
6,250 shares which are issuable upon the exercise of currently
exercisable options.
(4) The holdings shown for Mr. Jennings include 16,481 shares which he and
his wife hold in their names jointly, and 27,135 shares held in the name
of his wife.
(5) The holdings shown for Mr. Neiman include 278,040 shares in the name of
Inar Investments, Corp., of which he is the Managing Director.
(6) The holdings shown for Mr. Nixon include 29,375 shares which are
issuable upon the exercise of currently exercisable options. The
holdings shown for Mr. Nixon also include 688 shares held in the name of
his wife.
4
(7) The holdings shown for Mr. Salinas include 2,722 shares which are
issuable upon the exercise of currently exercisable options.
(8) The holdings shown for Mr. A. R. Sanchez Jr. include 415,858 shares
which he owns directly and has the sole power to dispose of and to vote.
Mr. Sanchez also controls the disposition of 279,664 shares as trustee
for trusts in which his children have a vested interest in the income
and corpus of such trusts, however, George M. Sanchez, the brother of
Mr. Sanchez, has the power to vote the 279,664 shares.
(9) The holdings shown for all directors and executive officers as a group
include 41,568 shares which are issuable upon the exercise of currently
exercisable options.
Except as reflected in the notes to the preceding table, each of the
individuals listed in the table owns directly the number of shares indicated in
the table and has the sole power to vote and to dispose of such shares.
EXECUTIVE COMPENSATION
Summary
The following table contains information concerning the compensation
awarded during each of the last three years for the CEO and the other most
highly compensated executive officers of the Company whose total annual salary
and bonus exceeded $100,000 in 1995.
SUMMARY COMPENSATION
TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation All Other
Name and ----------------------- Securities Compensation
Principal Position Year Salary (1) Bonus Underlying Options (2)
- ------------------ ---- ---------- ----- ------------------ ------------
<S> <C> <C> <C> <C> <C>
Dennis E. Nixon 1993 $ 275,554 $ 450,000 - $11,394
President and Director of 1994 298,580 500,000 - 7,291
the Company and of IBC 1995 295,601 600,000 5,000 9,144
Leonardo Salinas 1993 139,799 19,191 - 6,379
Vice President and 1994 144,099 19,581 - 6,302
Director of the Company; 1995 145,799 19,393 - 8,043
Director and Senior
Executive Vice President
of IBC
R. David Guerra 1993 152,430 31,844 - 6,449
Vice President of the 1994 162,687 33,558 - 6,461
Company; President of IBC 1995 161,587 33,317 2,500 8,392
branch in McAllen, Texas
and Director of IBC
</TABLE>
(1) These amounts do not include certain perquisites and other
personal benefits, securities or property received by the officers
which did not exceed the lesser of $50,000 or 10% of such
executive officer's total salary and bonus set forth in the table;
however, such amounts include directors fees as well as certain
expense allowances.
(2) All amounts shown in this column consist of funds contributed or
allocated by the Company pursuant to the Company's Employee Profit
Sharing Plan and Trust, a deferred profit sharing plan for
employees with one year of continual employment.
5
Each director of the Company and each director of IBC receives
compensation for his services as a director in the amount of $700 for each
meeting of the Board he attends and $200 for each meeting of a committee of the
Board he attends. Salaried officers who are directors are not compensated for
committee meetings. The director fees paid to the named executive officers are
included in the salary totals set forth in the table.
Stock Options
During 1995, the Company granted options to the named executive officers
of the Company. The following table reflects certain information concerning
grants of options made by the Company during 1995 to the named executive
officers of the Company:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Percent of
total Potential Realizable
Number of Options value at assumed
securities granted to annual rates of stock
Underlying employees Exercise or price appreciation
Options in fiscal base price Expiration for option term
Name Granted(1) Year ($/Sh Date 5% ($)(2) 10% ($)(2)
---- ---------- --------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dennis E. Nixon 5,000 3.32% 48.00 5-15-03 114,576 274,416
Leonardo Salinas - - - - - -
R. David Guerra 2,500 1.66% 48.00 5-15-03 57,264 137,184
</TABLE>
(1) The options shown in the table are incentive stock options within
the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended each of which were granted under the Company's 1987
International Bancshares Corporation Key Contributor Stock Option
Plan with an exercise price equal to the fair market value on the
date of grant. Twenty percent of these options become exercisable
on the anniversary date of the option grant during each of the 5
years beginning May 15, 1996 and will expire eight years from the
date of grant, subject to earlier termination pursuant to the
terms and provisions of the Plan and the Stock Option Agreement.
(2) The dollar amounts shown are based on certain assumed rates of
appreciation and the assumption that the options will not be
exercised until the end of the expiration periods applicable to
the options. Actual realizable values, if any, on stock option
exercises and common stock holdings are dependent on the future
performance of the Company's common stock and overall stock market
conditions. There can be no assurances that the amounts reflected
will be achieved.
6
The following table sets forth certain information regarding individual
exercises of stock options with respect to the Common Stock during 1995 by each
of the named executive officers.
AGGREGATED OPTION EXERCISES IN 1995
AND FY-END OPTION VALUES
Number of
Underlying Value of
Shares of Unexercised
Unexercised In-the-Money
Options at Options at
Shares 12/31/95 12/31/95
Acquired on Value Exercisable/ Exercisable/
Exercise Realized Unexercisable Unexercisable
Name (#) ($) (1) (#) ($) (1)
---- ----------- -------- ------------- -------------
Dennis E. Nixon 10,780 447,440 29,374/ 856,334/
12,033 226,353
Leonardo Salinas 2,578 96,744 3,221 105,061/
938 28,458
R. David Guerra - - 6,250/ 172,250/
4,375 63,375
(1) Based on market value of underlying shares minus aggregate
exercise price.
REPORT OF THE SALARY AND STEERING COMMITTEE
The Company's compensation package for each of its executive officers
consists of base salary, annual discretionary bonus and a discretionary
incentive stock option grant. Stock option grants are determined by the
Company's Compensation Committee and are discussed under the Committee's
separate report below. All cash compensation paid to executive officers of the
Company is paid by IBC. Base salary levels and annual bonuses are recommended by
the Salary and Steering Committee of IBC (the "Committee").
The Committee's recommendations regarding each executive officer's
compensation is subjective with regard to both the base salary and bonus. The
annual financial performance of IBC is the most important factor in the
subjective analysis. The bonus program is intended to compensate each executive
officer for the officer's contribution to IBC's financial performance during the
previous year. At the end of each year based on the financial performance of IBC
and the perceived contribution by each executive officer, a base salary
recommendation for the next year and a bonus recommendation for the previous
year is made for each executive officer by the Committee. The overall bonus pool
for executive officers is affected by the earnings performance of IBC for the
previous year. All base salary and bonus recommendations of the Committee are
subject to final approval of the Board of Directors of IBC.
With respect to the compensation of Mr. Nixon, the CEO of the Company,
the Committee recommends to the Board of Directors the CEO's salary and bonus
based on its subjective determination. In determining the CEO compensation, the
Committee reviews the objectives of the Company for the previous year and the
attainment thereof, principally including the Company's financial performance.
Mr. Nixon received a bonus award of $600,000 for 1995, which determination was
largely affected by the financial results of the Company during 1995, which
included net income of $40.1 million, or $5.81 per share, an amount which
represents a 9.42% increase in earnings per share compared to the previous year.
Also, a key element in Mr. Nixon's performance compensation is the Company's
excellent return on assets of 1.41% and its very strong return on equity of
18.64%.
7
The Salary and Steering Committee has considered the limitations on
deductibility of compensation of the named executive officers under Section
162(m) of the Internal Revenue Code. The Steering Committee's current policy is
to ensure that all such compensation is deductible under Section 162(m) when
paid.
Lester Avigael Roy Jennings, Jr.
Richard E. Haynes Dennis E. Nixon
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors determines the
stock option grants to executive officers and key salaried employees of the
Company. During 1995, the Compensation Committee met and granted options to
purchase a total of 150,750 shares of Common Stock to several of the executive
officers or key salaried employees of the Company. The primary purpose of the
Company's Stock Option Plan is to increase the interest of the executive and key
salaried employees of the Company and the subsidiary banks in its future growth
and success through the added incentive created by the opportunity afforded for
stock ownership under the Plan. The size of the option grants was determined by
the Compensation Committee based upon a subjective assessment of the respective
officer or employee's performance, compensation management level and other
factors. The exercise price of each option equaled the fair market value of the
Common Stock as of the date of grant.
Lester Avigael Roy Jennings Jr.
Richard E. Haynes Alberto A. Santos
SALARY AND STEERING AND COMPENSATION COMMITTEES INTERLOCKS
AND INSIDER PARTICIPATION
The Salary and Steering Committee members are Lester Avigael, Richard E.
Haynes, Roy Jennings, Jr. and Dennis E. Nixon. Mr. Nixon, President and Chairman
of the Board of the Company and President and CEO of IBC, participates in the
compensation decisions for all executives and key salaried employees other than
for himself. Stock Option grants are determined by the Compensation Committee
whose members are Lester Avigael, Richard E. Haynes, Roy Jennings Jr. and
Alberto A. Santos. Messrs. Richard E. Haynes, Dennis E. Nixon and Alberto A.
Santos each have total indebtedness outstanding with the Company and/or the
subsidiary banks of the Company in an amount which exceeds $60,000, which
indebtedness is fully performing and is included in the disclosure regarding the
aggregate amount receivable to the banks and the Company from certain related
parties of the Company set forth on pages 8 and 9, under the caption "Interest
of Management in Certain Transactions".
8
Financial Performance
The graph below illustrates the cumulative return experienced by the
Company's shareholders for the period commencing on December 31, 1990 and ending
at year end 1995 as compared with the cumulative total returns of the other
companies included within the Standard & Poor's 500 Stock Index and Standard &
Poors Regional Banks Index. The calculations were prepared on a
dividends-reinvestment basis.
TOTAL RETURN ANALYSIS
INTERNATIONAL BANCSHARES CORPORATION
VS. MARKET INDICES
YEAR END: 12/31/90 TO 12/31/95
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
1990 1991 1992 1993 1994 1995
---- ------ ------ ------ ------ ------
INT. BCHS. CORP .... 100 134.85 192.15 220.72 240.72 218.5
S & P 500 INDEX .... 100 130.47 140.41 154.56 156.6 215.45
MAJOR REG. BANKS ... 100 178.89 227.81 241.52 228.59 359.93
INTEREST OF MANAGEMENT IN
CERTAIN TRANSACTIONS
Some of the directors, executive officers and nominees for directors of
the Company and IBC and principal shareholders of the Company and their
immediate families and the companies with which they are associated were
customers of, and had banking transactions with, the Company's subsidiary banks
in the ordinary course of the subsidiary banks' business during 1995, and the
Company anticipates that such banking transactions will continue in the future.
All loans and commitments to loan included in such banking transactions were
made in the ordinary course of business, on substantially the same terms,
including interest rates and collateral, as those prevailing in the industry at
the time for comparable transactions with non-insiders, and, in the opinion of
management of the Company, did not involve more than a normal risk of
collectibility or present other unfavorable features.
At December 31, 1995, loans outstanding made by all subsidiary banks to
directors, executive officers and nominees for directors of the Company and
principal shareholders of the Company and to persons or entities affiliated with
such individuals aggregated $10,799,645.53. At December 31, 1995, all of such
loans were current with respect to principal and interest.
9
During 1994, IBC sold approximately 44% of its other real estate
portfolio to IBC Partners, Ltd., a Texas real estate limited partnership (the
"Partnership") owned by certain shareholders of the Company. As of December 31,
1995, the Partnership had not acquired any additional properties from IBC's
other real estate portfolio. Roy Jennings Jr., Dennis E. Nixon and A. R.
Sanchez, Jr. serve as the managers of IBC Properties, L.C., the general partner
of IBC Partners Management, Ltd., which is the general partner of the
Partnership. Lester Avigael and Alberto Santos initially served as managers of
IBC Properties, L. C. but each resigned their position as manager effective June
21, 1995. During 1994 and 1995, the Partnership entered into banking
transactions with IBC. All loans and commitments to loan included in such
banking transactions were made in the ordinary course of business, in compliance
with applicable laws and on substantially the same terms, including interest
rates and collateral, as those prevailing in the industry at the time for
comparable transactions with non-insiders and, in the opinion of management of
the Company, did not involve more than a normal risk of collectibility or
present other unfavorable features.
During 1994, the Company obtained approval from the Federal Reserve Bank
of Dallas to engage in the activity of making loans to certain of its executive
officers, directors, affiliates, and principal shareholders, and to certain
executive officers and directors and their related interests of its subsidiary
banks. In connection with such approval, the Company committed that all loans
would be on terms and under circumstances, including credit standards, that are
substantially the same or at least as favorable to it, as those prevailing at
the time for comparable transactions with or involving other non-affiliated
borrowers, or in the absence of comparable transactions, on terms and under
circumstances, including credit standards, that in good faith would be offered
to or would apply to non-affiliated companies. As of December 31, 1995, loans
outstanding made by the Company to such persons or entities aggregated
$11,478,578 and all of said loans were made on terms and under circumstances
consistent with the commitment made by the Company to the Federal Reserve Bank
of Dallas.
As of December 31, 1995, IBC Partners, Ltd. (the "Partnership") as
discussed above, was indebted to the Company in the amount of $3,843,088 in
connection with three real estate related loans. During 1995, the Partnership
repaid $180,000 of the related loans. As of December 31, 1995, IBC Partners
Investment Joint Venture and IBC Partners Organizational Joint Venture were
indebted to the Company in the amount of $377,312 and $997,783, respectively.
The two loans were extended as part of a single credit facility in connection
with the formation of the Partnership. The two joint ventures are controlled by
certain directors and executive officers of the Company or its subsidiary banks.
The joint ventures repaid $179,250 and $398,688, respectively, on the credit
facility during 1995. As of December 31, 1995, Dennis E. Nixon and his related
interests were indebted to the Company in the amount of $6,260,395 in connection
with five real estate related loans. Mr. Nixon and his related interests repaid
$390,659 on the related loans during 1995. At December 31, 1995, all of the
$11,478,578 loans outstanding made by the Company were current with respect to
principal and interest.
FILING OF BENEFICIAL OWNERSHIP REPORTS
Under the securities laws of the United States, the Company's directors,
its executive officers and any persons holding more than ten percent of the
Company's Common Stock are required to report their initial ownership of the
Company's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission. Specific due dates for these reports have
been established and the Company is required to disclose in this proxy statement
any failure to file by the applicable dates during 1995. The Company believes
that all of these filing requirements were timely satisfied. In making these
disclosures, the Company has relied solely on written representations of its
directors, executive officers and its ten percent holders and copies of the
reports that they have filed with the Commission.
10
PROPOSAL - 2
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed the firm of KPMG
Peat Marwick LLP to audit the accounts of the Company for the 1996 fiscal year.
The firm has audited the books of the Company and its predecessor, IBC, annually
since 1979.
Audit services rendered by KPMG Peat Marwick LLP for the fiscal year
ended December 31, 1995 included the annual examination of the Company's
financial statements, including reports to shareholders and the Securities and
Exchange Commission; and consultation on accounting and related matters and
services performed in connection with other regulatory filings.
Representatives of KPMG Peat Marwick LLP are expected to be present at
the annual meeting of shareholders with the opportunity to make a statement if
they desire to do so and are expected to be available to respond to appropriate
questions.
Approval of the appointment of independent auditors is not a matter
which is required to be submitted to a vote of shareholders, but the Board of
Directors considers it appropriate for the shareholders to express whether they
approve or withhold their approval of the appointment. If shareholder approval
should be withheld, the Board of Directors would consider an alternative
appointment for the succeeding fiscal year. The Board of Directors of the
Company recommends that the shareholders approve the appointment of KPMG Peat
Marwick LLP as the independent auditors. The affirmative vote of a majority of
the shares present and entitled to vote thereon will constitute approval.
PROPOSAL - 3
APPROVAL OF THE 1996 INTERNATIONAL BANCSHARES
CORPORATION STOCK OPTION PLAN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING RESOLUTION:
"RESOLVED: That the 1996 International Bancshares Corporation's Stock
Option Plan adopted by the Board of Directors on April 3, 1996, be and
hereby is approved, ratified and confirmed."
On April 3, 1996, the Board of Directors of the Company adopted the
1996 International Bancshares Corporation Stock Option Plan (the "Plan"). The
Plan became effective upon such approval, subject to the approval of the Plan by
the shareholders of the Company. Approval of the Plan requires the affirmative
vote of the holders of a majority of the shares of Common Stock entitled to vote
on this matter and present, in person or by proxy, at the Annual Meeting. The
Plan will replace the 1987 International Bancshares Corporation Key Contributor
Stock Option Plan which will be terminated, for purposes of granting further
options, upon shareholder approval of the Plan. The 1987 Plan would expire
according to its terms on May 7, 1997.
The purpose of the Plan is to increase the interest of officers,
employees, consultants and advisors of the Company (the "Eligible Persons") in
its future growth and success through the added incentive created by the
opportunity afforded for stock ownership under the Plan. The Company, through
the Plan, seeks to motivate officers, employees, consultants and advisors and to
attract highly competent individuals whose judgment, initiative and continuing
effort will contribute to the success of the Company.
The complete text of the Plan is set forth in Exhibit A to this Proxy
Statement, which is incorporated herein by reference. The following summary of
the material features of the Plan does not purport to be complete and is
qualified in its entirety by reference to Exhibit A.
11
GENERAL INFORMATION
The Compensation Committee of the Board of Directors administers the
Plan (the "Committee") and determines the terms and conditions under which
options ("Options") to purchase shares of Common Stock may be awarded.
Subject to the adjustment provisions described below, the maximum
number of shares of Common Stock which may be made subject to Options granted
under the Plan is 300,000. Any shares of Common Stock remaining available under
the 1987 Plan will not be transferred to the new Plan. They will, instead, be
treated as authorized for issuance upon exercise of options granted under the
1987 Plan, but will not be authorized for future grants. Subject to the
adjustment provisions described below, the maximum number of shares of Common
Stock covered by Options which may be granted to any Eligible Person in any
fiscal year is 75,000 shares. The shares to be issued under the Plan may be
either treasury shares or newly issued shares. Any shares subject to Options
granted under the Plan that lapse or are terminated or forfeited for any reason
prior to exercise may be made subject to subsequent grants under the Plan.
OPTIONS
The Committee has full and final authority to select those Eligible
Persons who will be granted Options. Options granted under the Plan may be
Incentive Stock Options ("ISOs"), as defined in Section 422 of the Code, or
options not qualifying for treatment as ISOs ("Nonstatutory Stock Options").
Subject to applicable provisions of the Code, the Committee determines the
recipients of Options and the terms of the Options, including the type of
Option, the number of shares for which an Option is granted, the term of the
Option and the time(s) when the Option can be exercised. Restrictions on the
exercise of an Option may, at the discretion of the Committee, be contained in
the agreement with the participant or in the Committee's procedures. Each ISO
must comply with all the requirements of Section 422 of the Code. The Committee
may in its discretion waive any condition or restriction on the exercise of an
Option and may accelerate the time at which any Option is exercisable.
The price per share of Common Stock subject to an Option (the "Option
Price") is set by the Committee. In the case of ISOs, the Option Price may not
be less than the fair market value of Common Stock (as determined in good faith
by the Committee) on the date of the grant of the ISOs; provided, however, the
Option Price of an ISO granted to an Eligible Person that owns 10% or more of
the Common Stock may not be less than 110% of the fair market value of the
Common Stock on the date of grant of the ISOs. In the case of Nonstatutory Stock
Options, there are no restrictions with respect to the Option Price. The
Committee also determines the manner in which the Option Price of an Option may
be paid, which may include the tender of cash or securities or the withholding
of Common Stock or any other arrangement satisfactory to the Committee. The fair
market value of the Common Stock on March 28, 1996 is believed to be $41.00 per
share based on the recent trade of shares of Common Stock at that price on March
28, 1996; however, trading in the Common Stock is not extensive and although the
Common Stock is quoted on the OTC Bulletin Board, the trades in the Common Stock
do not constitute an active trading market.
Options granted under the Plan may be exercisable for a period of up to
10 years from the date of grant, excluding ISOs granted to 10% shareholders
which may be exercisable for a period of up to only 5 years. Within these
limitation periods, the Committee will determine the expiration dates of
Options. Options may be exercised at any time or from time to time, within their
terms, in whole or in part, or otherwise as shall be determined by the
Committee.
All Options granted under the Plan are subject to the approval of the
Plan by the shareholders of the Company at the 1996 Annual Meeting of
Shareholders. The number and type of Options that may be granted under the Plan,
the number of employees who may be granted such Options and the allocation of
such Options among such employees have not been determined at this time.
12
Except as specifically provided by a duly executed Stock Option
Agreement (as hereinafter defined) or unless approved by the Committee, an
Option or any of the rights thereunder may be exercised by such Participant
only, and may not be transferred or assigned, voluntarily, involuntarily or by
operation of law (including, without limitation, the laws of bankruptcy,
intestacy, descent and distribution and succession). Except in the event of the
death of the Participant, in which event the Participant's estate, executors or
administrators, or personal or legal representatives may exercise the Option in
accordance with the terms of the Plan and the Stock Option Agreement, such
Option shall be exercisable or perfected only by the Participant, or his or her
permitted transferee, in accordance with the terms of the Plan and the Stock
Option Agreement.
ADMINISTRATION OF THE PLAN
The Committee will administer the Plan and will consist of members of
the Board of Directors who are "disinterested persons" (as that term is defined
in the rules and regulations under Section 16 of the Exchange Act) and "outside
directors" (as that term is defined in the regulations promulgated under Section
162(m) of the Code, as may be modified or amended). Within the limits of the
Plan, the Committee determines the amounts, times, forms, terms and conditions
of grants under the Plan. Participation in the Plan is determined by the
Committee and may include any officer, employee, consultant or advisor selected
by the Committee. There are approximately 800 full time employees of the Company
and its subsidiaries and currently 175 of said employees participate in the 1987
Plan. The cost of administering the Plan shall be borne solely by the Company.
Generally, no member of the Board of Directors or the Committee shall be liable
for any action or determination taken or made with respect to the Plan. In
addition, the Company will indemnify the Board of Directors and the Committee
against any losses in connection with administration of the Plan.
As a condition to any grant under the Plan, each participant must enter
into a stock option agreement (the "Stock Option Agreement") containing such
terms and conditions relating to such grant as shall be determined by the
Committee consistent with the terms of the Plan. In addition, the Committee may
from time to time establish procedures governing the administration of the Plan
and terms and conditions related to the grant of awards under the Plan.
The Board of Directors may at any time amend, suspend or terminate the
Plan without shareholder approval or approval of participants, except that
shareholder approval is required if any action may increase the total number of
shares of Common Stock subject to the Plan (other than pursuant to the
adjustment provisions of the Plan). In the event that the outstanding shares of
Common Stock are changed into or exchanged for a different number or kind of
shares or other securities of the Company or another corporation by reason of
merger, consolidation, other reorganization, recapitalization, reclassification,
combination of shares, stock split-up, or stock dividend, corresponding
adjustments shall be made to the number and kind of shares which may be granted
under this Plan, as well as the number, the Option Price, and the kind of shares
or property subject to each outstanding Option, unless otherwise determined by
the Committee.
The Plan contains a self-operative provision that modifies any term of
the Plan that varies from or conflicts with any applicable Federal or state
securities laws and regulations in effect from time to time so that such term
conforms to and complies with such laws.
The Plan contains provisions to enable the Company to satisfy its tax
withholding obligations pursuant to such arrangements as are satisfactory to the
Committee. The Committee may permit participants to pay such taxes through the
tender of cash or securities or the withholding of Common Stock or any other
arrangement satisfactory to the Committee.
13
CHANGE OF CONTROL PROVISIONS
Unless the Committee otherwise expressly sets forth in the Stock Option
Agreement, Options granted under the Plan that are otherwise subject to vesting
over a period of time can, under certain circumstances, become fully and
immediately exercisable upon certain events effectively constituting a Change of
Control (as defined in the Plan) of the Company.
The Change of Control provisions in the Plan may cause a possible
merger, takeover of the Company, acquisition of control of the Company by a
principal shareholder or change in management to be more expensive than it would
be in the absence of such provisions. The Plan is not being proposed in response
to any present actions known to the Board of Directors. The Board of Directors
believes that on balance the Plan will be of significant benefit to the Company,
its shareholders and its employees.
FEDERAL INCOME TAX CONSEQUENCES
A publicly-held corporation may not, subject to limited exceptions,
deduct for Federal income tax purposes certain compensation paid to an executive
officer who is the chief executive officer or one of the four other highest paid
executive officers in excess of $1 million in any taxable year (the "$1 million
cap"). In general, compensation received on account of the exercise of options
that were granted on or prior to February 17, 1993 will not be subject to the $1
million cap. Also, certain other performance based compensation may not be
subject to the $1 million cap. Compensation attributable to the exercise of
options and other awards granted after February 17, 1993, however, may be
counted in determining whether the $1 million cap has been exceeded in any
taxable year if such compensation does not qualify as performance based
compensation. The Company believes that any Options to be granted under the Plan
with an exercise price at or above the fair market value of the Common Stock on
the date of grant will qualify as performance based compensation and will not be
subject to the $1 million cap.
Under the Code, a participant receiving a Nonstatutory Stock Option
generally does not recognize taxable income upon the grant of the Option. A
participant does, however, recognize ordinary income upon the exercise of a
Nonstatutory Stock Option to the extent that the fair market value of Common
Stock on the date of exercise exceeds the Option Price. The Company may deduct
for Federal income tax purposes (subject to the $1 million cap, if applicable,
and subject to satisfying the Federal income tax reporting requirements) an
amount equal to the ordinary income so realized by the participant. Upon the
subsequent sale of the shares acquired pursuant to a Nonstatutory Stock Option,
any gain or loss will be capital gain or loss, assuming the shares represent a
capital asset in the hands of the participant. There will be no tax consequences
to the Company upon the subsequent sale of shares acquired pursuant to a
Nonstatutory Stock Option.
The grant of an ISO does not result in taxable income to a participant.
The exercise of an ISO also does not result in taxable income, provided that the
employment requirements specified in the Code are satisfied, although such
exercise may give rise to alternative minimum taxable income for the
participant. In addition, if the participant does not dispose of Common Stock
acquired upon exercise of an ISO during the statutory holding period, then any
gain or loss upon the subsequent sale of Common Stock will be a long-term
capital gain or loss, assuming the shares represent a capital asset in the
participant's hands.
The statutory holding period for Common Stock acquired pursuant to the
exercise of an ISO is the later of two years from the date the ISO is granted or
one year from the date the Common Stock is transferred to the participant
pursuant to the exercise of the ISO. If the employment and statutory holding
period requirements are satisfied, the Company may not claim any Federal income
tax deduction upon the grant of the ISO, the exercise of the ISO or the
subsequent sale of Common Stock received upon exercise of the ISO. If these
requirements are not satisfied, the amount of ordinary income taxable to the
participant is the lesser of (i) the fair market value of Common Stock on the
date of exercise minus the Option Price, and (ii) the amount realized on
disposition minus the Option Price. The Company may deduct for Federal income
tax
14
purposes (subject to the $1 million cap, if applicable) an amount equal to the
ordinary income so recognized by the participant.
If the exercisability of an Option is accelerated as a result of a
Change of Control or for any reason, an ISO may be deemed to be a Nonstatutory
Stock Option and all or a portion of the value of the relevant award at that
time may be a "parachute payment" for purposes of determining whether a 20%
excise tax is payable by the participant as a result of the receipt of an
"excess parachute payment" pursuant to Section 4999 of the Code. Also, the
Company will not be entitled to an income tax deduction for the portion of any
parachute payment which is subject to the excise tax.
APPROVAL
In the opinion of the Board of Directors, the Plan will be of
significant benefit to the Company in providing an incentive for officers and
employees to remain in the employ of the Company and in stimulating the active
interest of such persons in the development and financial success of the
Company. The affirmative vote of the holders of a majority of the shares
entitled to vote on this matter and represented in person or by proxy is
required to approve the Plan. The management of the Company recommends that the
shareholders vote FOR the adoption of the Plan. The persons named in the
accompanying proxy will vote in accordance with the choice specified thereon,
or, if no choice is properly indicated, in favor of the adoption of the Plan.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
The 1997 annual meeting of shareholders will be held on May 15, 1997.
Proposals from shareholders intended to be presented at the 1996 annual meeting
must be received in writing by the Company at its principal executive offices
not later than December 20, 1996. The Company's principal executive offices are
located at 1200 San Bernardo Avenue, Laredo, Texas 78040.
OTHER MATTERS
No business other than the matters set forth in this proxy statement is
expected to come before the meeting, but should any other matters requiring a
vote of shareholders arise, including a question of adjourning the meeting, the
persons named in the accompanying proxy will vote thereon according to their
best judgment in the interest of the Company. In the event that any of the
nominees for director should withdraw or otherwise become unavailable for
reasons not presently known, the persons named as Proxies will vote for such
substitute nominee(s) as the Board of Directors recommends, or in the absence of
such recommendation, such other persons as they consider to be in the best
interests of the Company.
INTERNATIONAL BANCSHARES CORPORATION
Dennis E. Nixon
President
Dated: April 15, 1996
15
THE COMPANY WILL PROVIDE SHAREHOLDERS WITH A COPY OF THE COMPANY'S ANNUAL REPORT
ON FORM 10-K, FOR THE PERIOD ENDED DECEMBER 31, 1995, INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES, WITHOUT CHARGE, UPON WRITTEN REQUEST ADDRESSED TO THE
SECRETARY OF THE COMPANY, MR. ARNOLDO CISNEROS AT:
INTERNATIONAL BANCSHARES CORPORATION
P. O. DRAWER 1359
LAREDO, TEXAS 78042-1359
(210) 722-7611 EXTENSION 675
16
<PAGE>
EXHIBIT "A"
1996 INTERNATIONAL BANCSHARES CORPORATION
STOCK OPTION PLAN
INTERNATIONAL BANCSHARES CORPORATION
Laredo, Texas
Effective April 3, 1996
<PAGE>
1996 INTERNATIONAL BANCSHARES CORPORATION
STOCK OPTION PLAN
TABLE OF CONTENTS
Article Section Page
- ------- ------- ----
I DEFINITIONS ............................................... 1
1.01 Board or Board of Directors ............................... 1
1.02 Change of Control ......................................... 1
1.03 Code ...................................................... 1
1.04 Committee ................................................. 1
1.05 Company ................................................... 1
1.06 Disinterested Person ...................................... 1
1.07 Effective Date ............................................ 1
1.08 Eligible Person ........................................... 1
1.09 Exchange Act .............................................. 2
1.10 Fair Market Value ......................................... 2
1.11 Incentive Stock Option .................................... 2
1.12 Nonstatutory Stock Option ................................. 2
1.13 Option .................................................... 2
1.14 Option Price .............................................. 2
1.15 Outside Director .......................................... 2
1.16 Participant ............................................... 2
1.17 Plan ...................................................... 2
1.18 Sanchez Family ............................................ 2
1.19 Sanchez Shareholder ....................................... 2
1.20 Securities Act ............................................ 2
1.21 Stock ..................................................... 2
1.22 Stock Option Agreement .................................... 3
1.23 Subsidiary ................................................ 3
II PARTICIPATION ............................................. 3
2.01 Participation ............................................. 3
2.02 Limitation on Grants to Individual
Participant ............................................. 3
III SHARES OF STOCK SUBJECT TO PLAN ........................... 3
3.01 Limitations ............................................... 3
3.02 Availability of Shares Once Issued Under Plan ............. 3
3.03 Adjustments to Options Once Issued ........................ 3
3.04 Grants and Agreement ...................................... 4
IV OPTIONS ................................................... 4
4.01 Options; Grant and Exercise ............................... 4
4.02 Vesting of Options ........................................ 4
V NONSTATUTORY STOCK OPTIONS ................................ 5
5.01 General ................................................... 5
VI INCENTIVE STOCK OPTIONS ................................... 5
6.01 General ................................................... 5
6.02 Terms and Conditions of Incentive Stock Options ........... 5
6.03 Limitations on Grants of Incentive Stock Options .......... 6
VII STOCK CERTIFICATES ........................................ 6
- 2 -
7.01 Stock Certificates ........................................ 6
VIII PLAN ADMINISTRATION ....................................... 7
8.01 Plan Administration ....................................... 7
IX MISCELLANEOUS PROVISIONS .................................. 7
9.01 Applicable Law ............................................ 7
9.02 Expenses .................................................. 7
9.03 Gender and Number ......................................... 8
9.04 Headings Not Part of Plan ................................. 8
9.05 Indemnification ........................................... 8
9.06 Limitation of Rights ...................................... 8
9.07 No Distribution, Compliance with
Legal Requirements ...................................... 8
9.08 Timing of Grants .......................................... 8
9.09 Non-Assignability ......................................... 8
9.10 Nontransferability ........................................ 8
9.11 Other Compensation Plans .................................. 9
9.12 Plan Binding on Successors ................................ 9
9.13 Tax Withholding ........................................... 9
9.14 Non-Contravention of Securities Laws ...................... 9
9.15 Unenforceability of a Particular Provision ................ 9
- 3 -
X CHANGE OF CONTROL ......................................... 9
10.01 Acceleration .............................................. 9
10.02 Change of Control ......................................... 9
XI PERMANENCY OF THIS PLAN AND PLAN
TERMINATION ............................................. 11
11.01 Effective Date ............................................ 11
11.02 Termination, Amendment, and
Modification of Plan ...................................... 11
- 4 -
1996 INTERNATIONAL BANCSHARES CORPORATION
STOCK OPTION PLAN
The 1996 INTERNATIONAL BANCSHARES CORPORATION STOCK OPTION PLAN (the
"Plan") is intended to advance the interests of the Company and its shareholders
by affording officers, employees, consultants and advisors of the Company and
its Subsidiaries an opportunity to increase their proprietary equity interest in
the Company by the grant of Options to them under the terms set forth herein.
The Company seeks to motivate and retain present officers, employees,
consultants and advisors of the Company and its Subsidiaries as well as attract
highly competent individuals whose judgment, initiative, leadership, and
continued effort will contribute to the success of the Company and its
Subsidiaries. The Company believes that this Plan will contribute to that end.
ARTICLE I
DEFINITIONS
For purposes of this Plan:
1.01 BOARD OR BOARD OF DIRECTORS. The term "Board" or "Board of
Directors" shall mean the Board of Directors of the Company.
1.02 CHANGE OF CONTROL. The term "Change of Control" shall mean that
term as defined in Section 10.02 hereof.
1.03 CODE. The term "Code" shall mean the Internal Revenue Code of
1986, as amended, or any successor statute, provided that any specific reference
herein to a particular section of the Code will, to the extent applicable, refer
to the corresponding section or provision of any such successor statute.
1.04 COMMITTEE. The term "Committee" shall mean a Committee of the
Board appointed by the Board consisting of at least two (2) members of the Board
of Directors, each of whom is both a Disinterested Person and an Outside
Director.
1.05 COMPANY. The term "Company" shall mean INTERNATIONAL BANCSHARES
CORPORATION, a Texas corporation, and any successor thereof.
1.06 DISINTERESTED PERSON. The term "Disinterested Person" shall mean a
member of the Board of Directors who has not, during the one year prior to
service on the Committee, or during his service on the Committee, been granted
or awarded equity securities pursuant to this Plan or any other plan of the
Company or any of its affiliates (except such grants or awards permitted to be
received by a "disinterested person" under Rule 16b-3 promulgated under the
Exchange Act).
1.07 EFFECTIVE DATE. The term "Effective Date" shall mean that term as
defined in Section 11.01 hereof.
1.08 ELIGIBLE PERSON. The term "Eligible Person" shall mean any
officer, employee, consultant or advisor of the Company or any Subsidiary,
designated by the Committee as eligible to receive an Option subject to the
conditions set forth herein.
1.09 EXCHANGE ACT. The term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
1.10 FAIR MARKET VALUE. The term "Fair Market Value" shall mean the
fair market value of a share of Stock on any given date as determined in good
faith by the Committee, consistent with Section 422 of the Code and the
regulations promulgated thereunder.
1.11 INCENTIVE STOCK OPTION. The term "Incentive Stock Option" shall
have the meaning given to it by Section 422 of the Code and as further defined
in Article VI hereof.
1.12 NONSTATUTORY STOCK OPTION. The term "Nonstatutory Stock Option"
shall mean any Option granted by the Company pursuant to this Plan which is not
an Incentive Stock Option.
1.13 OPTION. The term "Option" shall mean an option granted by the
Company to purchase Stock pursuant to the provisions of this Plan and the
related Stock Option Agreement executed pursuant hereto.
1.14 OPTION PRICE. The term "Option Price" shall mean the price per
share of Stock purchasable under an Option. The Option Price of an Option shall
be determined by the Committee at the time of grant but, in the case of an
Incentive Stock Option, shall not be less than the Fair Market Value on the date
of grant, unless the Participant who is granted an Incentive Stock Option owns
more than ten percent (10%) of the Stock or more than ten percent (10%) of the
voting stock of any Subsidiary, in which case the Option Price shall not be less
than one hundred ten percent (110%) of the Fair Market Value on the date of
grant.
1.15 OUTSIDE DIRECTOR. The term "Outside Director" shall have the
meaning given to it in the regulations promulgated under Section 162(m) of the
Code, as may be amended from time to time.
1.16 PARTICIPANT. The term "Participant" shall mean an Eligible Person
who has been granted an Option hereunder.
1.17PLAN. The term "Plan" shall mean the 1996 International Bancshares
Corporation Stock Option Plan.
1.18 SANCHEZ FAMILY. The term "Sanchez Family" shall mean Alicia M.
Sanchez and Alicia M. Sanchez's children, grandchildren and great-grandchildren.
1.19 SANCHEZ SHAREHOLDER. The term "Sanchez Shareholder" shall mean a
shareholder of the Company who is a member of the Sanchez Family or a
corporation, partnership, or other entity in which one or more of the members of
the Sanchez Family beneficially own a majority of the ownership interest, or a
trust in which all of the beneficial interests are held by or for one or more
members of the Sanchez Family; provided, however, a trustee of such trust must
be a member of the Sanchez Family.
1.20 SECURITIES ACT. The term "Securities Act" shall mean the
Securities Act of 1933, as amended from time to time.
1.21 STOCK. The term "Stock" shall mean common stock, par value $1.00
per share, issued
- 2 -
by the Company.
1.22 STOCK OPTION AGREEMENT. The term "Stock Option Agreement" shall
mean the agreement as described in Section 3.04 of this Plan between the Company
and the Participant under which such Participant receives an Option pursuant to
this Plan.
1.23 SUBSIDIARY. The term "Subsidiary" shall mean any subsidiary
corporation, as defined in Section 424(f) of the Code, to which the Committee
has determined to extend the application of this Plan.
ARTICLE II
PARTICIPATION
2.01 PARTICIPATION. A grant of an Option under this Plan may be made by
the Committee to any Eligible Person.
2.02 LIMITATIONS ON GRANTS TO INDIVIDUAL PARTICIPANT. Subject to
adjustments pursuant to the provisions of Section 3.03 hereof, the number of
shares of Stock which may be covered by Options granted hereunder to any
Participant during any fiscal year shall not exceed 75,000 shares. If an Option
is cancelled, the cancelled Option shall continue to be counted toward such
75,000 share limit for the year granted. An Option that is repriced during any
fiscal year shall be treated as the cancellation of such Option and a grant of a
new Option for purposes of the 75,000 share limit for that fiscal year.
ARTICLE III
SHARES OF STOCK SUBJECT TO PLAN
3.01 LIMITATIONS. Subject to Section 3.02 and the adjustments pursuant
to the provisions of Section 3.03 hereof, the number of shares of Stock covered
by Options which may be granted hereunder to Participants under all Options
shall not exceed 300,000 shares. The shares of Common Stock which may be issued
by the Company upon exercise of an Option may be issued out of the Company's
authorized and unissued shares of Common Stock or reaquired shares of Common
Stock (treasury stock).
3.02 AVAILABILITY OF SHARES ONCE ISSUED UNDER PLAN. Once an Option has
lapsed, terminated or been forfeited, the Committee shall have the sole
discretion to issue a new Option to any Eligible Person, covering the number of
shares to which such lapsed, terminated or forfeited Option related.
3.03 ADJUSTMENTS TO OPTIONS ONCE ISSUED. In the event that the
outstanding shares of Stock are changed into or exchanged for a different number
or kind of shares or other securities of the Company or of another corporation
or other entity by reason of merger, consolidation, other reorganization,
recapitalization, reclassification, combination of shares, stock split-up, or
stock dividend, the corresponding proportionate adjustments shall be made to the
number and kind of shares which may be granted under this Plan, the maximum
number and kind of shares which may be granted to any one eligible Participant,
and the number, the Option Price, and the kind of shares or property subject to
each outstanding Option unless the Committee shall determine, in its sole
discretion, that such adjustments are not appropriate or advisable.
- 3 -
3.04 GRANTS AND AGREEMENT. Each grant of an Option under this Plan
shall be evidenced by a written Stock Option Agreement dated as of the date of
the grant and executed by the Company and the Participant. The rights of a
grantee in and to an Option shall become effective only upon execution and
delivery by the Company of the Stock Option Agreement. Such Stock Option
Agreement shall set forth the terms and conditions of such Option, as may be
determined by the Committee consistent with this Plan, and shall indicate
whether the Option that it evidences is intended to be an Incentive Stock Option
or a Nonstatutory Stock Option.
ARTICLE IV
OPTIONS
4.01 OPTIONS; GRANT AND EXERCISE. The Committee shall have full and
final authority to select those Eligible Persons who will be granted Options and
whether such Options shall be Incentive Stock Options or Nonstatutory Stock
Options. Subject to Federal and state statutes then applicable and the express
terms of this Plan, the terms and procedures by which an Option may be exercised
shall be set forth in the Participant's Stock Option Agreement or in procedures
established by the Committee. Certain of the procedures for the notice of the
grant of an Option, the execution of the Stock Option Agreement and the exercise
of an Option, are as follows:
(a) As soon as practicable after a determination is made by
the Committee to grant an Option to an Eligible Person, as set forth in
this Article IV hereof, the appropriate officer or officers of the
Company shall give notice (written or oral) to such effect to each such
Eligible Person, which notice shall be accompanied by a copy or copies
of the Stock Option Agreement to be executed by such Eligible Person.
The Stock Option Agreement shall designate whether it is an Incentive
Stock Option or Nonstatutory Stock Option.
(b) Upon the due execution by such Eligible Person and the
Company of a Stock Option Agreement (on such terms as the Committee
shall determine) within such number of days from the giving of such
notice as shall be specified in such notice (unless waived by the
Company), such Option shall be granted and such Eligible Person shall
become and be a Participant.
(c) An Option of a Participant may be exercised during the
period such Option is in effect and as set forth herein and in the
Stock Option Agreement, but only if compliance with all applicable
Federal and state securities laws can be effected. The Committee may
permit payment of the Option Price to be made through the tender of
cash or securities, the withholding of Stock, or any other arrangement
satisfactory to the Committee.
4.02 VESTING OF OPTIONS. The Stock Option Agreement shall specify the
date or dates on which the Participant may begin to exercise all or a portion of
his Option. To the extent not exercised, the vested portion of the Option shall
be exercisable, in whole or in part, at any time after becoming exercisable, but
not later than the date the Option terminates. Notwithstanding the terms of any
Stock Option Agreement, the Committee at any time may accelerate such date or
dates and otherwise waive or amend any conditions of the Option in a manner that
is not adverse to the Option holder. A Participant's subsequent transfer or
disposition of any Stock obtained through the exercise of an Option shall be
subject to any Federal and state laws then applicable, specifically including
securities laws.
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ARTICLE V
NONSTATUTORY STOCK OPTIONS
5.01 GENERAL. The Committee may grant Nonstatutory Stock Options to
Eligible Persons under this Plan. The grant of Nonstatutory Stock Options shall
be designated as such in a Participant's Stock Option Agreement. Such
Nonstatutory Stock Options must comply with all requirements of this Plan except
for those contained in Article VI hereof.
ARTICLE VI
INCENTIVE STOCK OPTIONS
6.01 GENERAL. The Committee may only grant Incentive Stock Options
under this Plan to Eligible Persons who are employees (including officers) of
the Company or any Subsidiary. All Incentive Stock Options shall comply with all
of the restrictions and limitations set forth in Section 422 of the Code and
this Article. To the extent that any Option does not qualify as an Incentive
Stock Option, it shall constitute a Nonstatutory Stock Option.
6.02 TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS. Notwithstanding
any other provision of this Plan, Incentive Stock Options shall be subject to
such terms and conditions as shall be determined by the Committee, which shall
include the following:
(a) The Option Price shall be an amount determined by the
Committee in accordance with the provision of Section 1.14 hereof.
(b) No Incentive Stock Option shall be exercisable after the
lapse of ten (10) years from the date such Incentive Stock Option is granted;
provided, however, if the Participant owns more than ten percent (10%) of the
Stock or of the voting stock of any Subsidiary, such Participant's Incentive
Stock Option shall not be exercisable after the lapse of five (5) years from the
date such Incentive Stock Option is granted.
(c) Except as provided in this Subsection 6.02(c) and
Subsections 6.02 (d) and (e), all Incentive Stock Options granted to a
Participant shall terminate no later than three (3) months from the date the
Participant's service with the Company terminates; provided, however, if the
Participant's service with the Company terminates as a result of the
Participant's permanent disability, such Incentive Stock Options shall terminate
no later than twelve (12) months from the date that the Participant's service
with the Company terminates as a result of such disability. Notwithstanding the
foregoing, the Committee may, in its sole discretion, provide in the Stock
Option Agreement for the termination of the Option upon the Participant's
termination of service with the Company prior to such three (3) month period or
twelve (12) month period, as the case may be.
(d) An Incentive Stock Option or any of the rights thereunder
may be exercised by such Participant only, and may not be transferred or
assigned, voluntarily, involuntarily or by operation of law (including, without
limitation, the laws of bankruptcy, intestacy, descent and distribution and
succession); provided, however, that the Committee may approve a transfer of an
Incentive Stock Option, or a Stock Option Agreement relating thereto may provide
for a transfer by will or the laws of descent and distribution. During the
lifetime of the Participant, such Incentive Stock Option shall be exercisable or
perfected only by the Participant in accordance with the terms of this Plan and
the Stock Option Agreement. If such transfer by will or the laws of descent and
distribution is provided for in a Stock Option Agreement or such transfer is
approved by the
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Committee, upon the death of a Participant who has been granted an Incentive
Stock Option, such Incentive Stock Option exercisable on the date of death may
be exercised by the Participant's estate or by a person who acquires the right
to exercise such Incentive Stock Option pursuant to the Participant's will or by
the laws of descent and distribution, provided that, subject to any additional
restrictions in the Stock Option Agreement or imposed by the Committee, the
exercise of the Incentive Stock Option must occur within both the remaining term
of the Incentive Stock Option and twelve (12) months after the Eligible Person's
death. The provisions of this Section 6.02(d) shall apply notwithstanding that
the Participant's employment may have terminated prior to death, but only to the
extent that such Incentive Stock Option is exercisable on the date of death.
(e) An Incentive Stock Option may provide, in the Committee's
discretion, that if the provisions of this Article VI are not satisfied, the
Option granted shall not lapse and the Option shall be classified as a
Nonstatutory Stock Option.
6.03 LIMITATIONS ON GRANTS OF INCENTIVE STOCK OPTIONS. The Committee
may not grant an Incentive Stock Option hereunder to an Eligible Person if such
grant could result in the aggregate Fair Market Value (determined at the time
each incentive stock option is granted) of Stock with respect to which incentive
stock options are exercisable for the first time by such Eligible Person during
any calendar year (under all incentive stock option plans of the Company or its
parent or subsidiaries, if any, as defined in Section 424(e) and (f) of the
Code) exceeding $100,000 or such other maximum amount which is permissible under
the Code, as it may be amended, on the date of such grant; provided, however,
for purposes of determining whether a proposed grant of an Incentive Stock
Option is permissible under this Section 6.03, the Committee shall not consider
the possible accelerated vesting upon (i) a Change of Control under Article X
hereof unless the Committee has received notice of such Change of Control or
(ii) the occurrence of any other event as may be provided in a Stock Option
Agreement.
ARTICLE VII
STOCK CERTIFICATES
7.01 STOCK CERTIFICATES. The Company shall not be required to issue or
deliver any certificate for shares of Stock upon the exercise of any Option or
of any portion thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing or quotation on
all stock exchanges or automated quotation systems on which the Stock is then
listed or quoted, if any;
(b) The completion of any registration or other qualification
of such shares under any Federal or state law, under the rulings or regulations
of the Securities and Exchange Commission, or under any other governmental
regulatory agency which the Committee shall in its sole discretion determine to
be necessary or advisable;
(c) The obtaining of any approval or other clearance from any
Federal or state governmental agency which the Committee shall in its sole
discretion determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following the
exercise of the Option as the Committee from time to time may establish for
reasons of administrative convenience.
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If these conditions are not satisfied the Participant may lose his
rights to such Stock as determined by the Committee.
ARTICLE VIII
PLAN ADMINISTRATION
8.01 PLAN ADMINISTRATION. This Plan and all Stock Option Agreements
shall be administered, and all grants of Options under this Plan shall be
granted, by the Committee. The Committee shall have full authority and absolute
sole discretion:
(a) To determine, consistent with the provisions of this Plan,
which of the Eligible Persons shall be granted Options; the form and terms of
such Options; the timing of such grants; the number of shares subject to each
Option and the Option Price of Stock covered by each Option; the restrictions,
if any, applicable to the shares of Stock issuable upon the exercise of each
Option; and the period over which the Option shall become and remain
exercisable;
(b) To construe and interpret this Plan and the Stock Option
Agreements;
(c) To determine the terms and provisions of each respective
Stock Option Agreement, which need not be identical.
(d) To make all other determinations and take all other
actions deemed necessary or advisable for the proper administration of this
Plan;
(e) To modify and amend outstanding Options unilaterally in
any manner that is not adverse to the Option holder; and
(f) To adopt, alter, and repeal such rules, guidelines, and
practices for administration of this Plan and for its own acts and proceedings
as it shall deem advisable; to interpret the terms and provisions of this Plan
and any Option (including related Stock Option Agreements); to make all
determinations it deems advisable for the administration of this Plan; to decide
all disputes arising in connection with this Plan; and to otherwise supervise
the administration of this Plan.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.01 APPLICABLE LAW. To the extent that state law shall not have been
preempted by any laws of the United States, this Plan shall be construed,
regulated, interpreted and administered according to the laws of the State of
Texas.
9.02 EXPENSES. The cost of benefit payments from this Plan and the
expenses of administering this Plan shall be borne by the Company; provided,
however, that except as otherwise specifically provided in this Plan or the
applicable Stock Option Agreement between the Company and a Participant, the
Company shall not be obligated to pay any costs or expenses (including legal
fees) incurred by any Participant in connection with any Stock Option Agreement,
this Plan or Option or Company Stock held by any Participant.
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9.03 GENDER AND NUMBER. Unless the context clearly requires otherwise,
the masculine pronoun whenever used shall include the feminine and neuter
pronoun, the singular shall include the plural, and vice versa.
9.04 HEADINGS NOT PART OF PLAN. Headings of Articles and Sections are
inserted for convenience and reference; they constitute no part of this Plan.
9.05 INDEMNIFICATION. No member of the Board of Directors or the
Committee shall be liable for any action or determination taken or made in good
faith with respect to this Plan nor shall any member of the Board of Directors
or the Committee be liable for any Stock Option Agreement issued pursuant to
this Plan or any grants under it. Without limiting any other rights to
indemnification, each member of the Board of Directors and of the Committee
shall be indemnified by the Company against any losses incurred in such
administration of this Plan to the fullest extent permitted by the Texas
Business Corporation Act, as amended.
9.06 LIMITATION OF RIGHTS. Neither the adoption and maintenance of this
Plan or Stock Option Agreement nor anything contained herein, shall with respect
to any Participant, be deemed to:
(a) limit the right of the Company or any Subsidiary to
discharge or discipline any such person, or otherwise terminate or modify the
terms of his employment, or
(b) create any contract or other right or interest under this
Plan other than as specifically provided in this Plan and a Stock Option
Agreement.
9.07 NO DISTRIBUTION, COMPLIANCE WITH LEGAL REQUIREMENTS. The Committee
may require each Participant acquiring shares of Stock pursuant to the exercise
of an Option to represent to and agree with the Company in writing that such
Participant is acquiring the shares without a view to distribution thereof in
violation of applicable securities laws. No shares of Stock shall be issued
pursuant to the exercise of an Option until all applicable securities law and
other legal and stock exchange or other listing requirements have been
satisfied. The Committee may require the placing of such stop-orders and
restrictive legends on certificates for Stock and Options as it deems
appropriate.
9.08 TIMING OF GRANTS. All Options granted under this Plan shall be
granted prior to the tenth anniversary of the Effective Date.
9.09 NON-ASSIGNABILITY. Except as otherwise set forth herein, a
Participant's interest under this Plan shall not be subject at any time or in
any manner to alienation, sale, transfer, assignment, pledge, attachment,
garnishment or encumbrance of any kind and any attempt to deliver, sell,
transfer, assign, pledge, attach, garnish or otherwise encumber such interest
shall be void and any interest so encumbered will terminate.
9.10 NONTRANSFERABILITY. Except as specifically provided by a duly
executed Stock Option Agreement or unless approved by the Committee, an Option
or any of the rights thereunder may be exercised by such Participant only, and
may not be transferred or assigned, voluntarily, involuntarily or by operation
of law (including, without limitation, the laws of bankruptcy, intestacy,
descent and distribution and succession).
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9.11 OTHER COMPENSATION PLANS. The adoption of this Plan shall not
affect any other existing or future incentive or compensation plans for
directors, officers or employees of the Company or its Subsidiaries. Moreover,
the adoption of this Plan shall not preclude the Company or its Subsidiaries
from:
(a) Establishing any other forms of incentive or other
compensation for officers, employees, consultants or advisors or directors of
the Company or its Subsidiaries; or
(b) Assuming any forms of incentives or other compensation of
any person or entity in connection with the acquisition or the business or
assets, in whole or in part, of any person or entity.
9.12 PLAN BINDING ON SUCCESSORS. This Plan shall be binding upon the
successors and assigns of the Company.
9.13 TAX WITHHOLDING. Each Participant shall, no later than the date as
of which the value of an Option or of any Stock or other amount received
thereunder first becomes includable in the gross income of the Participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of any Federal, state, or local
taxes of any kind required by law, or deemed advisable by the Company, to be
withheld with respect to such income. The Committee may permit payment of such
taxes to be made through the tender of cash or securities, the withholding of
Stock or any other arrangement satisfactory to the Committee. The Company and
its Subsidiaries shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to the Participant.
9.14 NON-CONTRAVENTION OF SECURITIES LAWS. Notwithstanding anything to
the contrary expressed in this Plan, any provisions hereof that vary from or
conflict with any applicable Federal or state securities laws (including any
regulations promulgated thereunder) shall be deemed to be modified to conform to
and comply with such laws.
9.15 UNENFORCEABILITY OF A PARTICULAR PROVISION. The unenforceability
of any particular provision of this document shall not affect the other
provisions, and this document shall be construed in all respects as if such
unenforceable provision were omitted.
ARTICLE X
CHANGE OF CONTROL
10.01 ACCELERATION. Unless the Committee shall otherwise expressly
provide in the Stock Option Agreement relating to an Option, upon the occurrence
of a Change of Control, an Option (other than an Option held by a Participant
who initiated the event that resulted in the occurrence of such Change of
Control in a capacity other than as a director or officer of the Company) shall
automatically become fully exercisable.
10.02 CHANGE OF CONTROL. The term "Change of Control" shall mean the
occurrence of any of the following events:
(i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than the Company, any affiliate (as defined in
Rule 144 under the Securities Act)
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of the Company as of the Effective Date, any Sanchez Shareholder, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, or any company owned, directly or indirectly, by the shareholders of
the Company in substantially the same proportions as their ownership of the
Stock of the Company), is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such person any
securities acquired directly from the Company) representing more than 20% of the
combined voting power of the Company's then outstanding voting securities;
provided, however, a Change of Control shall not be deemed to occur solely
because such person acquired beneficial ownership of more than 20% of the
combined voting power of the Company's then outstanding voting securities as a
result of the acquisition of voting securities by the Company, which by reducing
the number of voting securities outstanding, increases the proportional number
of shares beneficially owned by such person, provided that if a Change of
Control would occur (but for the operation of this sentence) as a result of the
acquisition of voting securities by the Company, and after such share
acquisition by the Company, such person becomes the beneficial owner of any
additional voting securities which increases the percentage of the then
outstanding voting securities beneficially owned by such person, then a Change
of Control shall occur;
(ii) during any period of 24 consecutive months (not including
any period prior to the Effective Date), individuals who at the beginning of
such period constitute the Board and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in subsection (i), (iii) or (iv) of this Section
10.02) whose election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority of the Board;
(iii) the shareholders of the Company approve a merger,
consolidation or reorganization of the Company with any other corporation, other
than a merger, consolidation or reorganization which would result in the
shareholders of the Company immediately before such merger, consolidation or
reorganization, owning, directly or indirectly immediately following such
merger, consolidation or reorganization, at least 50% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger, consolidation or reorganization in
substantially the same proportion as their ownership of the voting securities
immediately before such merger, consolidation, or reorganization; or
(iv) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.
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ARTICLE XI
PERMANENCY OF THIS PLAN AND PLAN TERMINATION
11.01 EFFECTIVE DATE. This Plan shall become effective upon its
adoption by the Board of Directors of the Company (the "Effective Date");
provided, however, that the shareholders of the Company shall approve this Plan
within twelve (12) months of the date of adoption by the Board of this Plan.
Notwithstanding any terms or provisions to the contrary, this Plan, and all
Options granted hereunder, are subject to the approval of the Plan by the
shareholders of the Company not later than twelve (12) months from the date of
adoption by the Board of Directors and no Option may be exercised prior to such
shareholder approval. In the event the preceding condition is not satisfied,
Options granted under this Plan shall be null and void.
11.02 TERMINATION, AMENDMENT, AND MODIFICATION OF PLAN. The Board of
Directors may at any time terminate or suspend, and may at any time and from
time to time and in any respect amend or modify, this Plan; provided, however,
that no such action of the Board of Directors without approval of the
shareholders of the Company may increase the total number of shares of Stock
subject to this Plan except as contemplated in Section 3.03 hereof.
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INTERNATIONAL BANCSHARES CORPORATION
FOR THE ANNUAL MEETING OF SHAREHOLDERS
CALLED FOR MAY 16, 1996
VOTING IN PERSON
The undersigned shareholder(s) of International Bancshares Corporation,
a Texas corporation (the "Company"), hereby appoints Lester Avigael, Roy
Jennings Jr., and Richard E. Haynes, and each of them, as Proxies, each with
power to appoint his substitute, and hereby authorizes them to vote, as
designated below, all the shares of Common Stock which the undersigned may be
entitled to vote at the Annual Meeting of Shareholders of the Company, to be
held on Thursday, May 16, 1996 at 7:00 P.M., local time, and at any adjournment
of such meeting, with all powers which the undersigned would possess if
personally present:
1. ELECTION OF DIRECTORS. Nominees: L. Avigael, I. Greenblum, R.D. Guerra,
R.E. Haynes, R. Jennings Jr., S. Neiman, D.E. Nixon, L. Salinas, A. R.
Sanchez, Jr., A.A. Santos.
FOR, all nominees listed above[ ] FOR, all nominees listed above, except for
the nominee(s) set forth on the line
below[ ]
WITHHOLD AUTHORITY, to vote for all
nominees listed above[ ]
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name on the line provided below.)
A vote FOR all nominees is recommended by the Board of Directors.
2. PROPOSAL TO APPROVE THE APPOINTMENT OF KPMG PEAT MARWICK LLP as the
independent auditors of the Company for the 1996 fiscal year.
FOR[ ] AGAINST[ ] ABSTAIN[ ]
A vote FOR the above proposal is recommended by the Board of Directors.
3. PROPOSAL TO APPROVE the 1996 International Bancshares Corporation Stock
Option Plan adopted by the Board of Directors on April 3, 1996.
FOR[ ] AGAINST[ ] ABSTAIN[ ]
A vote FOR the above proposal is recommended by the Board of Directors.
4. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the meeting.
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS
MADE THEREON. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ALL THE
NOMINEES AND "FOR" PROPOSALS 2 AND 3 ABOVE.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement of the Company dated April 15, 1996.
Dated:_________________, 1996
Signatures(s)
(Signature should agree with name of stock
Certificate as stenciled thereon. Executors,
Adminstrators, Trustees, etc. should so
indicate when signing).
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS
YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO ITS EXERCISE
I [ ]do [ ]do not Plan to Attend the Meeting.
