<PAGE> 1
As filed with the Securities and Exchange Commission on November 25, 1996
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
STERLING BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-2175590
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15000 NORTHWEST FREEWAY, HOUSTON, TEXAS 77040
(Address of Principal Executive Offices) (Zip Code)
STERLING BANCSHARES, INC.
1995 NON-EMPLOYEE DIRECTOR STOCK COMPENSATION PLAN
AND
ADVISORY DIRECTOR COMPENSATION ARRANGEMENT
(Full title of the plan)
SETH A. MCMEANS
15000 NORTHWEST FREEWAY
HOUSTON, TEXAS 77040
(Name and address of agent for service)
(713) 466-8300
(Telephone number, including area code, of agent for service)
-----
Copy to:
SNELL & SMITH, P.C.
1000 LOUISIANA, SUITE 3650
HOUSTON, TEXAS 77002
ATTN: PAUL E. PRYZANT, ESQ.
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
AMOUNT PROPOSED PROPOSED MAXIMUM AMOUNT OF
TO BE MAXIMUM OFFERING AGGREGATE OFFERING REGISTRATION
TITLE OF SECURITIES REGISTERED PRICE PER SHARE* PRICE FEE*
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common 152,250 $16.00 $2,436,000 $738.18
Stock, $1.00 shares
par value
</TABLE>
_____
* Computed pursuant to Rule 457(h) based on the average of the high and low
reported prices on November 21, 1996.
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PROSPECTUS
STERLING BANCSHARES, INC.
152,250 SHARES
Common Stock
$1.00 par value
This Prospectus relates to reoffers and resales of up to 152,250 shares
(the "Shares") of the Common Stock, $1.00 par value ("Common Stock"), of
Sterling Bancshares, Inc., a Texas corporation (the "Company"). The Shares are
composed of (i) 18,900 shares of Common Stock previously acquired by certain
present and former non-employee directors of the Company pursuant to the
Company's 1995 Non-Employee Director Stock Compensation Plan (the "Director
Plan"), (ii) up to 131,100 shares of Common Stock that may be acquired in the
future by certain non-employee directors and an advisory director of the
Company pursuant to the Director Plan, and (iii) 2,250 shares of Common Stock
previously issued to an advisory director of the Company pursuant to a By-law
provision to compensate advisory directors in the same manner as the directors
of the Company. See "Selling Shareholders."
Resales of the Shares may be made on the Nasdaq National Market (the
"Nasdaq/NM"), in the over-the-counter market, or in private transactions, at
market prices prevailing at the time of sale or at negotiated prices. The
Shares will be offered for sale on terms to be determined when the agreement to
sell is made or at the time of sale, as the case may be. Shares may be sold in
transactions involving broker-dealers, who may act solely as agent and/or may
acquire shares as principal. Broker-dealers participating in such transactions
as agent may receive commissions from the selling shareholder (and, if they act
as agent for the purchaser of such shares, from such purchaser), such
commissions to be computed in appropriate cases in accordance with the
applicable rules of the National Association of Securities Dealers, Inc. (the
"NASD"), which commissions may be at negotiated rates where permissible under
such rules. See "Plan of Distribution."
There presently are no arrangements or understandings, formal or informal,
pertaining to the distribution of any Shares. The Company has agreed to bear
all expenses (other than underwriting discounts and selling commissions, and
fees and expenses of counsel and other advisers to the selling shareholders) in
connection with the registration of the Shares.
The Common Stock is included in the Nasdaq Stock Market and is designated
as a Nasdaq National Market security. On November 21, 1996, the closing price
of the Common Stock on the Nasdaq/NM was $16.25. See "Price Range of Common
Stock."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is November 22, 1996.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
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Section Page
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<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Information by Reference . . . . . . . . . . 3
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . 4
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . . 7
Price Range of Common Stock . . . . . . . . . . . . . . . . . . . . . . 11
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . 12
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . 14
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements, and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy and information
statements, and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza Building, 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549 and at the regional offices of the Commission located at 7 World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material
can be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates.
The Company's Common Stock is included on the Nasdaq/NM and reports, proxy
and information statements, and other information concerning the Company can be
inspected at the offices of The Nasdaq Stock Market, 1735 K Street, N.W.,
Washington, D.C. 20006-1506.
This Prospectus constitutes part of a Registration Statement on Form S-8
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the Commission under the Securities Act
of 1933, as amended (the "1933 Act"). This Prospectus omits certain of the
information contained in the Registration Statement, and reference is hereby
made to the Registration Statement for further information with respect to the
Company and the Common Stock offered hereby. Any statements contained herein
concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of
such document as filed. Each such statement is qualified in its entirety by
such reference. The Registration Statement, including exhibits and schedules
thereto, may be inspected without charge at the offices of the Commission, and
copies of such materials may be obtained therefrom at prescribed rates.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission under the
1934 Act are incorporated by reference in this Prospectus:
(1) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995;
(2) The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996, June 30, 1996 and September
30, 1996; and
(3) The Company's Proxy Statement for its 1996 Annual Meeting
of Shareholders dated March 20, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14,
or 15(d) of the 1934 Act subsequent to the date of filing of the Company's
Annual Report on Form 10-K referred to above and prior to the termination of
the offering of the Shares described herein shall be deemed to be incorporated
by reference and to be a part of this Prospectus from the date of filing of
such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for all purposes to the extent
that a statement contained in this Prospectus, or in any other subsequently
filed document which is also incorporated by reference, modifies or replaces
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on written or oral request of such person, a copy
(without exhibits) of any and all information incorporated by reference in this
Prospectus. Requests for such copies should be directed to Seth A. McMeans,
Chief Financial Officer and Secretary, Sterling Bancshares, Inc., (i) if by
telephone to (713) 466-8300 and (ii) if by mail to 15000 Northwest Freeway,
Houston, Texas 77040.
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<PAGE> 5
PROSPECTUS SUMMARY
The information in this summary is qualified in its entirety by reference
to the information appearing elsewhere in this Prospectus and in the documents
incorporated herein by reference.
The Offering
Offered by Selling Shareholders This Prospectus relates to the re-offer and
resale of up to 152,250 shares of Common
Stock composed of (i) 18,900 shares of
Common Stock previously acquired by certain
present and former non-employee directors of
the Company pursuant to the Company's 1995
Non-Employee Director Stock Compensation Plan
(the "Director Plan"), (ii) up to 131,100
shares of Common Stock that may be acquired
in the future by certain non-employee
directors and an advisory director of the
Company pursuant to the Director Plan, and
(iii) 2,250 shares of Common Stock previously
issued to an advisory director of the Company
pursuant to a By-law provision to compensate
advisory directors in the same manner as the
directors of the Company. See "Selling
Shareholders."
Nasdaq/NM Trading Symbol SBIB
THE COMPANY
GENERAL
REFERENCE IS MADE TO THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1995, AND THE COMPANY'S PROXY STATEMENT FOR THE 1996 ANNUAL
MEETING OF SHAREHOLDERS FOR DETAILED INFORMATION REGARDING THE COMPANY'S
BUSINESS, OPERATIONS, MANAGEMENT, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS. THESE REPORTS AND OTHER DOCUMENTS ARE INCORPORATED HEREIN BY
REFERENCE.
Sterling Bancshares, Inc. (the "Company"), headquartered in Houston,
Texas, is a bank holding company that provides commercial and retail banking
services through the community banking offices of Sterling Bank, a commercial
bank chartered in 1974 under the laws of the State of Texas (the "Bank"). The
Company was incorporated under Texas law in 1980 and became the parent bank
holding company of the Bank in 1981. The deposits of the Bank are insured by
the Bank Insurance Fund of the Federal Deposit Insurance Corporation. At
September 30, 1996, the Company had total assets of $726 million, deposits of
$658 million, and shareholders' equity of $56 million.
The Company's business strategy is generally known as a supercommunity
bank strategy. Under this strategy, the Company provides a broad line of
financial products and services to small and medium-sized businesses and
consumers through full service community banking offices. Each banking office
has senior management, with significant lending experience, who exercise
substantial autonomy over credit and pricing decisions, subject to loan
committee approval for larger loans. This decentralized management approach,
coupled with continuity of service by the same staff members, enables the Bank
to develop long-term customer relationships, maintain high quality service and
respond quickly to customer needs. The Company believes that its emphasis on
local relationship banking, together with a conservative approach to lending
and resultant high asset quality, are important factors in the success and
growth of the Bank.
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<PAGE> 6
The Bank has twelve banking offices operating in the Greater Houston
area. The Company's principal executive offices are located at 15000 Northwest
Freeway, Suite 200, Houston, Texas 77040 and its telephone number is (713)
466- 8300.
The Company's Common Stock is quoted on the Nasdaq National Market under
the symbol "SBIB." The market capitalization of the Company at November 21,
1996 (based on a closing price of $16.25 on such date) was approximately $129
million.
GROWTH STRATEGY AND NEW OFFICE OPENINGS OF THE BANK
The Company's growth strategy has been concentrated on increasing its
community banking presence in its existing markets, and expanding into new
communities within the Greater Houston area in response to the expressed needs
of these communities. The Company has grown through a combination of
acquisitions and by opening new community banking offices. The Company intends
to continue its growth by taking advantage of selected acquisition
opportunities where available and consistent with its community banking
philosophy.
In September 1995, the Bank opened its eleventh banking office at 13386
Jones Road, Houston, Texas 77070 (the "Cypress Office"). In August 1996, the
Bank opened its twelfth banking office at 2575 Kirby Drive, Houston, Texas
77008 (the "Upper Kirby Office"). The Bank has filed applications with the
Texas Department of Banking and the Federal Deposit Insurance Corporation to
open a new banking office at 2401 Fountainview, Houston, Texas 77057 (the
"Fountainview Office") which is anticipated to open in December 1996. The Bank
also has received permission from the Texas Department of Banking and the
Federal Deposit Insurance Corporation to open a new banking office at 855 FM
1960 West, Houston, Texas 77090 (the "Cypress Station Office") which is
anticipated to open in January 1997.
The Bank's growth strategy is to establish new offices in areas which are
serviced primarily by out-of-state branch banks, but do not have a community
bank effectively serving the local market. The Bank believes that the market
in such areas will be especially receptive to the Bank's more personal full
service banking. Once an area is targeted for a new office, the Bank reviews
whether the size of the potential business in the area will support the new
office. The Bank also seeks to attract one or more senior banking officers
already working in the area for other banks to run the new office. This helps
to quickly integrate the new office into the local business community.
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RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CONSIDER THE FOLLOWING RISK FACTORS PRIOR TO
MAKING AN INVESTMENT IN THE SHARES.
LOCAL ECONOMIC CONDITIONS; GEOGRAPHIC CONCENTRATION IN GREATER HOUSTON AREA
All of the Bank's offices are located in the Greater Houston area so that
the Bank's performance is susceptible to changes in the local Houston economy.
The banking industry in Texas and Houston is affected by general economic
conditions such as inflation, recession, unemployment and other factors beyond
the Company's control. During the mid 1980's, severely depressed oil and gas
prices materially and adversely affected the Texas and Houston economics,
causing recession and unemployment in the region and resulting in excess
vacancies in the Houston real estate market and elsewhere in Texas. Economic
recession over a prolonged period or other economic dislocation in the Houston
area could cause increases in non-performing assets, thereby resulting in
additional net chargeoffs. Such chargeoffs, in turn, could cause operating
losses, impair liquidity and erode capital. There can be no assurance that the
Company will be able to withstand severe adverse changes in the Houston economy
should they occur, or that general economic conditions in the national or local
economics will continue to be favorable, and accordingly, the Company will
remain subject to risks associated with prolonged declines in such economics.
GOVERNMENTAL REGULATION
The Company and the Bank are subject to extensive governmental supervision
and regulation, which is intended primarily for the protection of depositors.
In addition, the Company and the Bank are subject to changes in federal and
state law, as well as changes in regulations, governmental policies and
accounting principles. The effects of any such potential changes cannot be
predicted and could adversely affect the business and operations of the Company
and the Bank.
DIVIDEND HISTORY
The Company paid dividends on the Common Stock of the Company in the
amount of $0.07 per share for the first three quarters of 1996, $0.0533 per
share for each quarter of 1995 and $0.0444 per share for each quarter of 1994
(as adjusted for two 3-for-2 stock splits on February 10, 1995 and February 14,
1996). The Company intends to continue to pay dividends on the Common Stock on
a quarterly basis, although there is no assurance that dividends will continue
to be paid in the future. The Company's ability to pay dividends to its
shareholders depends to a large extent upon the dividends that the Company
receives from the Bank. Dividends paid by the Bank to the Company are subject
to restrictions under various federal and state banking laws. In addition,
both the Company and the Bank must maintain certain capital levels which may
restrict the ability of the Bank to pay dividends to the Company, and for the
Company to pay dividends to its shareholders.
CONCENTRATION OF OWNERSHIP
The Company's directors and executive officers beneficially own
approximately 27% of the Company's Common Stock. Accordingly, such persons
have the ability to exert substantial influence over the Company and its
affairs and business, which may include taking actions that may be inconsistent
with the interests of non-affiliated shareholders.
COMPETITION
The Bank is subject to vigorous competition in all aspects and areas of
its business from banks and other financial institutions, including savings and
loan associations, savings banks, finance companies, credit unions and other
providers of financial services, such as money market mutual funds, brokerage
firms, consumer finance companies and insurance companies. The Bank also
competes with nonfinancial institutions, including retail stores that maintain
their own credit programs and governmental agencies that make available low
cost or guaranteed loans to certain borrowers. The Bank competes in its market
area
6
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with a number of much larger financial institutions with substantially greater
resources, larger lending limits, larger branch systems, and a wider array of
commercial banking services. The Bank has been able to compete effectively
with other financial institutions by emphasizing customer service, including
local office decision-making on loans, by establishing long term customer
relationships and building customer loyalty, and by providing products and
services designed to address the specific needs of its customers. There can be
no assurances that the Bank will be able to compete effectively in the future
with this strategy.
USE OF PROCEEDS
This Prospectus relates to an aggregate of 152,250 shares of Common Stock
that are being offered for the account of certain former and present
non-employee directors and an advisory director of the Company. All proceeds
from the sale of such shares will go to the selling shareholders.
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
The authorized capital stock of the Company consists of (i) 20,000,000
shares of Common Stock, $1.00 par value per share, of which 7,956,951 shares
were issued and outstanding at November 15, 1996, and (ii) 1,000,000 shares of
Preferred Stock, $1.00 par value per share ("Preferred Stock"), issuable in
series, 88,380 of which were outstanding at November 15, 1996. The terms of
each series of Preferred Stock may be fixed by the Board of Directors of the
Company within certain limits set by the Company's Articles of Incorporation.
49,500 shares of Series A Convertible Preferred Stock ("Series A Preferred
Stock"), $1.00 par value, are outstanding and are convertible into a maximum of
92,813 shares of Common Stock. 38,880 shares of Series B Convertible Preferred
Stock ("Series B Preferred Stock"), $1.00 par value, are outstanding and are
convertible into up to 48,600 shares of Common Stock. The Company is in the
process of offering up to 150,000 shares of Series C Convertible Preferred
Stock (which will be convertible into up to 187,500 shares of Common Stock) in
connection with the opening of the Fountainview Office in December 1996. The
Company also intends to offer up to 150,000 shares of Series D Convertible
Preferred Stock (which will be convertible into up to 187,500 shares of Common
Stock) in connection with the opening of the Cypress Station Office on or about
January 1997. As of November 15, 1996, an additional 492,615 shares of Common
Stock were issuable (without regard to vesting restrictions) upon exercise of
the Company's outstanding employee stock options under the 1994 Stock Incentive
Plan and the 1984 Stock Option Plan, and pursuant to outstanding subscriptions
under the Company's 1994 Employee Stock Purchase Plan.
COMMON STOCK
All outstanding shares of Common Stock are fully paid and nonassessable.
There are no preemptive, conversion, subscription, redemption or repurchase
rights associated with shares of Common Stock, except as exist under the 1994
Employee Stock Purchase Plan, the 1994 Stock Incentive Plan, and the 1984
Employee Stock Option Plan. Each holder of shares of Common Stock is entitled
to one vote for each share held of record as to all matters upon which
shareholders may vote. Holders of shares of Common Stock are not entitled to
cumulative voting rights in the election of directors. Upon the dissolution of
the Company, the holders of Common Stock would be entitled to participate
ratably in the assets available for distribution after satisfaction of the
claims of creditors of the Company and of holders of the Preferred Stock and
any future series of Preferred Stock having a liquidation preference, to the
extent of such preference.
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<PAGE> 9
The holders of shares of the Common Stock are entitled to such dividends
as the Board of Directors, in its discretion, may declare out of funds legally
available therefor. Under the Texas Business Corporation Act, as amended (the
"TBCA"), dividends may not be paid if, after the payment, the Company's total
assets would be less than the sum of its total debts and stated capital, or if
the Company would be unable to pay its debts as they become due in the usual
course of its business. Payment of future dividends will be dependent upon,
among other things, the Company's and the Bank's earnings and financial
condition, and the general economic and regulatory climate.
Funds for the payment of dividends by the Company are obtained from
dividends received from the Bank. Certain restrictions exist regarding the
ability of the Bank to pay dividends to the Company. Under federal law, a bank
cannot pay a dividend if it will cause that bank to be "undercapitalized." The
regulators of the Bank and the Company may administratively impose stricter
limits on the ability of the Bank to pay dividends to the Company.
The Bank is also subject to risk based capital rules which restrict its
ability to pay dividends. The risk based capital rules set an explicit
schedule for achieving minimum capital levels in relation to risk weighted
assets. The Bank is required to meet a minimum ratio of total capital to risk
weighted assets of 8.0%. As of September 30, 1996, the Bank was in compliance
with all capital requirements.
The transfer agent and registrar for the Common Stock is Society National
Bank, c/o KeyCorp Shareholder Services, Inc., 700 Louisiana, Suite 2620,
Houston, Texas 77002.
PREFERRED STOCK
The Company is authorized to issue 1,000,000 shares of Preferred Stock,
49,500 of which have been issued as Series A Preferred Stock and 38,880 of
which have been issued as Series B Preferred Stock. In addition to the Series
A Preferred Stock and Series B Preferred Stock, the Board of Directors of the
Company has approved the establishment of two additional series consisting of
150,000 shares of Series C Convertible Preferred Stock (the "Series C Preferred
Stock") and 150,000 shares of Series D Convertible Preferred Stock (the "Series
D Preferred Stock").
SERIES A PREFERRED STOCK. In conjunction with the opening of the Cypress
Office of the Bank, the Company solicited subscriptions for Series A Preferred
Stock in July 1995. 49,500 shares of Series A Preferred Stock were issued on
October 20, 1995, which are convertible into a maximum of 92,813 shares of
Common Stock depending on the performance of the Cypress office in meeting
certain performance goals.
Each share of Series A Preferred Stock will be automatically converted
into 1.5 shares of Common Stock on the third anniversary of the opening date of
the Cypress Office; provided, however, that: (i) if the Cypress Office meets
its deposit goal prior to the second anniversary of its opening date, each
share of Series A Preferred Stock automatically will be converted into 1.875
shares of Common Stock at such date; and (ii) if the Cypress Office meets its
deposit goal prior to the third anniversary of its opening date, each share of
Series A Preferred Stock automatically will be converted into 1.65 shares of
Common Stock at such date.
Holders of Series A Preferred Stock do not have any optional rights to
convert the shares of Series A Preferred Stock into Common Stock prior to the
automatic conversion dates set forth above. Adjustments to the conversion
ratios will be made in the event of a stock dividend, stock split,
reclassification, reorganization, consolidation or merger.
The Series A Preferred Stock does not pay any dividends. Prior to the
conversion into Common Stock, each share of Series A Preferred Stock will have
a liquidation preference equal to $13.04 per share of Series A Preferred Stock,
prior to any distribution to holders of Common Stock, subject to certain
anti-dilution adjustments. The Series A Preferred Stock will rank equally to
the Series A Preferred Stock, and any other
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<PAGE> 10
future series of Preferred Stock, in payment of any liquidation preference, but
shall rank prior to the holders of Common Stock. Series A Preferred Stock will
have no voting rights other than as required by law.
At the Company's option, the Company may redeem the Series A Preferred
Stock for an amount in cash equal to $13.04; provided, however, that the
holders of the Series A Preferred Stock shall be entitled to not less than 30
days prior notice of such redemption and shall have the opportunity, prior to
such redemption, to convert each share of Series A Preferred Stock into 1.875
shares of Common Stock.
SERIES B PREFERRED STOCK. In connection with the opening of the Bank's
new Upper Kirby Office, the Company solicited subscriptions for Series B
Preferred Stock in May 1996. 38,880 shares of Series B Preferred Stock have
been issued, which are convertible into a maximum of 48,600 shares of Common
Stock depending upon the performance of the Upper Kirby Office in meeting
certain performance goals. The purchase price (the "Purchase Price") for the
Series B Preferred Stock was $14.79 per share. The Purchase Price was set at
98% of the average of the closing prices of the Common Stock on the Nasdaq
National Market for the 15 trading days immediately prior to May 1, 1996.
Each share of Series B Preferred Stock will be automatically converted
into one share of Common Stock on the third anniversary of the opening date of
the Upper Kirby Office; provided, however, that: (i) if the Upper Kirby Office
meets its deposit goal of $25,000,000 prior to the second anniversary of its
opening date, each share of Series B Preferred Stock automatically will be
converted into 1.25 shares of Common Stock at such date; and (ii) if the Upper
Kirby Office meets its deposit goal of $25,000,000 prior to the third
anniversary of its opening date, each share of Series B Preferred Stock
automatically will be converted into 1.1 shares of Common Stock at such date.
The deposit goal is met when the average monthly deposits credited to the Upper
Kirby Office for any three consecutive months exceeds $25,000,000. The
calculation of deposits, however, excludes large Certificates of Deposit
(meaning those of $100,000 or more) to the extent they exceed 10% of the total
deposits.
Holders of Series B Preferred Stock do not have any optional rights to
convert the shares of Series B Preferred Stock into Common Stock prior to the
automatic conversion dates set forth above. Adjustments to the conversion
ratios will be made in the event of a stock dividend, stock split,
reclassification, reorganization, consolidation or merger.
The Series B Preferred Stock does not pay any dividends. Prior to the
conversion into Common Stock, each share of Series B Preferred Stock will have
a liquidation preference equal to the Purchase Price per share of Series B
Preferred Stock, prior to any distribution to holders of Common Stock, subject
to certain anti-dilution adjustments. The Series B Preferred Stock will rank
equally to the Series A Preferred Stock, and any other future series of
Preferred Stock, in payment of any liquidation preference, but shall rank prior
to the holders of Common Stock. The Series B Preferred Stock will have no
voting rights other than as required by law.
At the Company's option, the Company may redeem the Series B Preferred
Stock for an amount in cash equal to the purchase price of $14.79 per share;
provided, however, that the holders of the Series B Preferred Stock shall be
entitled to not less than 30 days prior notice of such redemption and shall
have the opportunity, prior to such redemption, to convert each share of Series
B Preferred Stock into 1.25 shares of Common Stock.
SERIES C PREFERRED STOCK. The Company is in the process of offering up to
150,000 shares of Series C Convertible Preferred Stock (which will be
convertible into up to 187,500 shares of Common Stock) in connection with the
opening of the Bank's new Fountainview Office in December 1996. The relative
rights and preferences of the Series C Preferred Stock will be the same as the
Series B Preferred Stock except that the purchase price of the Series C
Preferred Stock will be set at 98% of the average of the closing prices of the
Common Stock on the NASDAQ National Market for the 15 trading days immediately
prior to the 90th
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<PAGE> 11
day of the initial offering period for such offering, and the conversion rights
applicable to the Series C Preferred Stock will be tied to deposits received at
the Fountainview Office.
SERIES D PREFERRED STOCK. The Company intends to offer up to 150,000
shares of Series D Convertible Preferred Stock (which will be convertible into
up to 187,500 shares of Common Stock) in connection with the opening of the
Bank's new Cypress Station Office in January 1997. The relative rights and
preferences of the Series D Preferred Stock will be the same as the Series B
Preferred Stock except that the purchase price of the Series D Preferred Stock
will be set at 98% of the average of the closing prices of the Common Stock on
the NASDAQ National Market for the 15 trading days immediately prior to the
90th day of the initial offering period for such offering, and the conversion
rights applicable to the Series D Preferred Stock will be tied to deposits
received at the Cypress Station Office.
FUTURE ISSUANCES OF PREFERRED STOCK. Subsequent to the offering of Series
B and C Preferred Stock, up to an additional 611,620 shares of Preferred Stock
(or other securities convertible in whole or in part into Preferred Stock) will
be available for issuance from time to time for various purposes as determined
by the Company's Board of Directors, including, without limitation, making
future acquisitions, raising additional equity capital and financings. If less
than 150,000 shares of either Series C or Series D Preferred Stock are sold,
the unsold number of shares of Preferred Stock also will be available for
future issuances of Preferred Stock. Subject to certain limits set by its
Articles of Incorporation, the Preferred Stock (or such convertible securities)
may be issued on such terms and conditions, at such times and in such
situations as the Board of Directors, in its discretion, determines to be
appropriate, without any further approval or action by the shareholders (unless
otherwise required by laws, rules, regulations or agreements applicable to the
Company).
Except as otherwise limited by the Articles of Incorporation of the
Company or applicable laws, rules or regulations, the Board of Directors has
the sole authority to determine the relative rights and preferences of the
Preferred Stock and any series thereof without shareholder approval. The
Company's Articles of Incorporation require all shares of Preferred Stock to be
identical, except as to the following characteristics, which may vary between
different series of Preferred Stock:
(i) dividend rate;
(ii) redemption price and terms, including, to the extent permitted by
law, the manner in which shares are to be chosen for redemption
if less than all the shares of a series are to be redeemed;
(iii) the amount payable upon shares in the event of voluntary or
involuntary liquidation;
(iv) sinking fund provisions for the redemption or purchase of shares;
(v) the terms and conditions on which shares may be converted, if the
shares of any series are issued with the privilege of conversion;
and
(vi) voting rights.
All shares of Preferred Stock are entitled to receive cumulative
preferential dividends in cash, at the rate fixed for each series of Preferred
Stock, on a parity with each other series of Preferred Stock, and prior to the
declaration or payment of any cash dividends on the Company's Common Stock or
any other class of stock ranking junior to the Preferred Stock unless (i) all
dividends on each series of Preferred Stock for all past quarterly dividend
periods shall have been paid, or declared and a sum sufficient for the payment
thereof set apart, and (ii) there shall exist no default in respect of any
sinking fund for the redemption or purchase of shares of Preferred Stock of any
series unless such default shall have been waived by the holders of at least a
majority of the then issued and outstanding shares of Preferred Stock of such
series by vote at a
10
<PAGE> 12
meeting called for such purpose or by written waiver. There are no dividends
payable, however, on the shares of Series A, B, C or D Convertible Preferred
Stock. In the event of the liquidation, dissolution or winding up of the
affairs of the Company, prior to any distribution or payment to the holders of
the Company's Common Stock or any other class of stock of the Company ranking
junior to the Preferred Stock, holders of the Preferred Stock shall be entitled
to be paid in full the amount fixed for each such series of Preferred Stock
plus all accrued and unpaid dividends thereon to the date of payment. The
sale, lease or conveyance of all or substantially all of the Company's assets
shall be deemed to be a liquidation, dissolution or winding up of the Company
for this purpose.
The bylaws of the NASD governing the Nasdaq National Market, on which
the Company's Common Stock is quoted, require issuers to obtain shareholder
approval for the issuance of securities in the following general situations:
(i) in connection with the acquisition of certain stock or assets, including
another business, from a director, officer or substantial shareholder, or from
an entity in which one of such persons has a substantial direct or indirect
interest, and the stock issuable in such transaction could result in an
increase in the number of shares or voting power of the outstanding shares by
5% or more, (ii) in a transaction or a series of transactions (except for a
public offering of Common Stock for cash) that would result in an increase in
the number of shares or voting power of the outstanding shares by 20% or more,
(iii) where the issuance of Common Stock would result in a change of control of
the Company, or (iv) in connection with a stock option or purchase plan under
which stock may be acquired by the officers or directors of the Company.
Accordingly, the future issuance of a series of Preferred Stock convertible
into the Company's Common Stock may require shareholder approval under those
rules.
Under Article 4.03 of the TBCA, the holders of the outstanding shares
of a series of Preferred Stock are entitled to vote as a class upon certain
amendments, whether or not entitled to vote thereon by the provisions of the
Articles of Incorporation, if the amendment would affect the Preferred Stock or
a series of Preferred Stock. Such amendments would include changing the par
value of a class, effecting an exchange, reclassification or cancellation of
all or part of the shares of such series or class, or changing the
designations, preferences, limitations or relative rights of the shares of such
class or series.
PRICE RANGE OF COMMON STOCK
The following table sets forth the high and low stock prices as quoted
on the Nasdaq National Market per share of the Company's Common Stock and the
dividends paid thereon. The prices and dividends have been adjusted to reflect
two three-for-two stock splits (effected as 50% stock dividends) to
shareholders of record on January 27, 1995 and February 2, 1996, respectively.
<TABLE>
<CAPTION>
1994 High Low Dividend
---- ---- --- --------
<S> <C> <C> <C>
First quarter $8.11 $6.89 $0.045
Second quarter 7.78 7.00 0.045
Third quarter 8.00 7.33 0.045
Fourth quarter 8.00 7.00 0.045
1995
----
First quarter $9.17 $7.55 $0.053
Second quarter 9.00 7.83 0.053
Third quarter 12.00 8.67 0.053
Fourth quarter 12.17 11.00 0.053
</TABLE>
11
<PAGE> 13
<TABLE>
<CAPTION>
1996 High Low Dividend
---- ---- --- --------
<S> <C> <C> <C>
First quarter $14.00 $11.25 $0.07
Second quarter 15.50 12.75 0.07
Third quarter 15.25 13.75 0.07
</TABLE>
The Company presently intends to pay a dividend at the rate of $0.07
per share in the fourth quarter of 1996. As of March 11, 1996, there were 504
shareholders of record of the Common Stock.
SELLING SHAREHOLDERS
This Prospectus relates to the reoffer and resale of:
(i) 18,900 shares of Common Stock acquired pursuant to the
Director Plan by John H. Buck, George D. Francklow, Jr.,
Walter P. Gibbs, Jr., Bruce J. Harper, James C. Hassell, Glenn
H. Johnson, James J. Kearney, C. Frank Kurtin, Russell I.
Orr, Wayne C. Owen, Christian A. Rasch, Ulrich Rasch, Steven
F. Retzloff and Raimundo Riojas (each of whom is a
non-employee director of the Company and may be considered to
be an affiliate of the Company pursuant to Rule 405 of the
Commission, other than James C. Hassell and Ulrich Rasch, who
are former non-employee directors of the Company);
(ii) up to 131,100 shares of Common Stock that may be acquired in
the future under the Director Plan by the persons named above
(other than James C. Hassell and Ulrich Rasch) and by Thomas
B. McDade, an advisory director who became eligible to
participate in the Director Plan in September 1996; and
(iii) 2,250 shares of Common Stock acquired by Thomas B. McDade, an
advisory director of the Company, pursuant to a By-law
provision to compensate advisory directors in the same manner
as the directors of the Company.
In October 1996, the Board of Directors of the Company amended the Director
Plan to allow advisory directors to participate in the Director Plan on the
same basis as non-employee directors.
As of November 15, 1996, the persons listed above have been granted
the following shares under the Director Plan and beneficially owned the
following shares of Common Stock:
12
<PAGE> 14
<TABLE>
<CAPTION>
1995 1996 Shares
Stock Stock Beneficially
Name Awards Awards Owned
---- ------ ------ -----
<S> <C> <C> <C>
John H. Buck . . . . . . . . . . . 0 1,125 1,125
George D. Francklow, Jr. . . . . . 1,125 1,125 189,634 (1)
Walter P. Gibbs, Jr. . . . . . . . 0 1,125 149,225 (2)
Bruce J. Harper . . . . . . . . . . 0 1,125 1,125
James C. Hassell . . . . . . . . . 1,125 0 26,208
Glenn H. Johnson . . . . . . . . . 1,125 1,125 88,650 (3)
James J. Kearney . . . . . . . . . 1,125 1,125 7,875
C. Frank Kurtin . . . . . . . . . . 0 450 49,069 (4)
Russell I. Orr . . . . . . . . . . 1,125 1,125 18,450
Wayne C. Owen . . . . . . . . . . . 1,125 1,125 79,579 (5)
Christian A. Rasch . . . . . . . . 0 450 372,450 (6)
Ulrich Rasch . . . . . . . . . . . 450 0 372,450 (6)
Steven F. Retzloff . . . . . . . . 1,125 1,125 507,080 (7)
Raimundo Riojas . . . . . . . . . . 450 450 102,393 (8)
Thomas B. McDade . . . . . . . . . 1,125 1,125 2,250
- -------------------
</TABLE>
____________________
1 Includes 3,937 shares owned by Mr. Francklow s spouse, and 55,530 shares
held in the Estate of Mary Ann Francklow, deceased spouse of Mr.
Francklow.
2 Includes 40,915 shares owned of record by Mr. Gibb's spouse.
3 Includes 13,500 shares owned of record by the Elliott A. Johnson-
Grandchildren Trust, Glenn H. Johnson, Trustee; 13,500 shares owned of
record by the Katherine M. Johnson Marital Trust, Glenn H. Johnson,
Trustee; and 54,000 shares owned of record by Katherine M. Johnson,
Mr. Johnson s mother, and managed by Mr. Johnson under a power of
attorney.
4 Includes 117 shares owned by Mr. Kurtin s spouse.
5 Includes 562 shares owned by Mr. Owens spouse.
6 Includes 372,000 shares owned of record by Sucsova Investments Corp., a
company owned by Christian A. Rasch and Ulrich Rasch and other members
of their family.
7 Includes 503,818 shares owned of record by Retzloff Industries, Inc. of
which Steven F. Retzloff is the controlling shareholder, President and
CEO.
8 Includes 101,493 shares owned of record by Kiffas Investment Company,
which is principally owned and controlled by Mr. Riojas.
13
<PAGE> 15
PLAN OF DISTRIBUTION
Resales of the shares by the selling shareholders may be made on the Nasdaq
National Market, in the over-the-counter market or in private transactions.
The shares will be offered for sale on terms to be determined when the
agreement to sell is made or at the time of sale, as the case may be. The
selling shareholders may sell some or all of the shares in transactions
involving broker-dealers who may act solely as agent and/or may acquire shares
as principal. Broker-dealers participating in such transactions as agent may
receive commissions from the selling shareholder (and, if they act as agent for
the purchaser of such shares, from such purchaser), such commissions computed
in appropriate cases in accordance with the applicable rules of the NASD, which
commissions may be at negotiated rates where permissible under such rules.
Participating broker-dealers may agree with the selling shareholder to sell a
specified number of shares at a stipulated price per share and, to the extent
such broker-dealer is unable to do so acting as agent for the selling
shareholder, to purchase as principal any unsold shares at the price required
to fulfill the broker-dealer's commitment to the selling shareholder or
pledgees. Any such sales may be by block trade.
In addition or alternatively, shares may be sold by the selling
shareholders, and/or by or through other broker- dealers in special offerings,
exchange distributions or secondary distributions pursuant to and in compliance
with the governing rules of the NASD, and in connection therewith commissions
in excess of the customary commission prescribed by the rules of such
securities exchange may be paid to participating broker-dealers, or, in the
case of certain secondary distributions, a discount or concession from the
offering price may be allowed to participating broker-dealers in excess of such
customary commission. Broker-dealers who acquire shares as principal may
thereafter resell such shares from time to time in transactions (which may
involve cross and block transactions and which may involve sales to and through
other broker-dealers, including transactions of the nature described in the
preceding two sentences) on the NASD, in negotiated transactions or otherwise,
at market prices prevailing at the time of sale or at negotiated prices, and in
connection with such resales may pay to or receive commissions from the
purchasers of such shares.
Upon the Company being notified by a selling shareholder that a particular
offer to sell the shares is made, a material arrangement has been entered into
with a broker-dealer for the sale of shares through a block trade, special
offering, exchange distribution or secondary distribution, or any block trade
has taken place, to the extent required, a supplement to this Prospectus will
be delivered together with this Prospectus and filed pursuant to Rule 424(c)
under the Securities Act setting forth with respect to such offer or trade the
terms of the offer or trade; including the number of shares involved, and any
brokers, dealers, agents or member firm involved, any discounts, commissions
and other items paid as compensation from, and the resulting net proceeds to,
the selling shareholder, that such broker- dealers did not conduct any
investigation to verify the information set out in this Prospectus; and other
facts material to the transaction.
Shares may be sold directly by a selling shareholder or through agents
designated by the selling shareholder from time to time. Any agent involved in
the offer or sale of the shares in respect of which this Prospectus is
delivered will be named, and any commissions payable by the selling shareholder
to such agent will be set forth in the Prospectus Supplement. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
The selling shareholders and any brokers, dealers, agents, member firm or
others that participate with the selling shareholder in the distribution of the
shares may be deemed to be "underwriters" within the meaning of the Securities
Act, and any commissions or fees received by such persons and any profit on the
resale of the Shares purchased by such person may be deemed to be underwriting
commissions or discounts under the Securities Act.
The selling shareholders will be subject to the applicable provisions of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder, including without limitation Rules 10b-2, 10b-6,
14
<PAGE> 16
and 10b-7, which provisions may limit the timing of purchases and sales of any
of the Common Stock by the selling shareholder. All of the foregoing may
affect the marketability of the Common Stock.
The Company will pay substantially all the expenses incident to this
offering of the Common Stock by the selling shareholders to the public, other
than commissions and discounts of underwriters, dealers or agents.
In order to comply with certain states' securities laws, if applicable, the
Common Stock will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Common Stock
may not be sold unless the Common Stock has been registered or qualified for
sale in such state or an exemption from registration or qualification is
available and is complied with.
LEGAL MATTERS
Certain legal matters in connection with the Shares have been passed upon
for the Company by Snell & Smith, P.C., Houston, Texas.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and has been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
15
<PAGE> 17
- --------------------------------------------------------------------------------
No dealer, salesman, or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offering contained herein, and, if given or
made, such information or representations must not be relied upon as having
been authorized by the Company or the selling shareholders. This Prospectus
does not constitute an offer to sell or a solicitation of an offer to buy any
of the securities offered hereby to any person to whom it is unlawful to make
such offer or solicitation. Neither the delivery of this Prospectus nor any
sale hereunder shall, under any circumstances, create any implication that
there has been no change in the affairs of the Company since the date hereof.
- --------------------------------------------------------------------------------
152,250 SHARES
STERLING BANCSHARES,
INC.
COMMON STOCK
PROSPECTUS
-----------------
---------------------------
November 22, 1996
<PAGE> 18
PART I
INFORMATION REQUIRED IN THE 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
* The information required by Items 1 and 2 of Part I of Form S-8 is
omitted from this Registration Statement in accordance with the Note
to Part I of Form S-8 and Rule 428 promulgated under the Securities
Act of 1933, as amended (the "Securities Act").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, and all documents subsequently filed by
Sterling Bancshares, Inc. (the "Company") pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934 prior to the filing of a post-
effective amendment to the Registration Statement which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and shall be deemed to be a part hereof from the date of
the filing of such documents:
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996;
and
(c) "Item 1. Description of Registrant's Securities to be
Registered" in the Company's Registration Statement on Form 8-
A (File No. 0-20750), as amended, describing the Company's
Common Stock.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Article Eight of the Articles of Incorporation of the Company provides
as follows:
II-1
<PAGE> 19
ARTICLE EIGHT: INDEMNIFICATION
Section 8.1. The Corporation, by action of its Board of Directors,
may indemnify any director or officer of the Corporation, and any person who
may have served at the request of the Corporation as a director or officer of
another corporation in which it owns shares or of which it is a creditor,
against any costs and expenses, including counsel fees, actually and
necessarily incurred (or reasonably expected to be incurred) in connection with
the defense of any civil, criminal, administrative or other claim, action, suit
or proceeding (whether by or in the right of the Corporation or otherwise) in
which he may become involved or with which he may be threatened, by reason of
his being or having been such a director or officer, and against any payments
in settlement of any such claim, action, suit or proceeding or in satisfaction
of any related judgment, fine or penalty, provided that the Board of Directors
shall, in the exercise of its business judgment, determine that such
indemnification is in the best interests of the Corporation.
Section 8.2. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create any presumptions that the person
to be indemnified did not act in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation, and
in respect of any criminal action or proceeding, did not reasonably believe
that his conduct was lawful.
Section 8.3. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
of Directors in the specific case on receipt of an undertaking by or on behalf
of the director or officer to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the Corporation.
Section 8.4. The foregoing right of indemnification shall not be
deemed exclusive of any other rights to which any director, officer or other
person may be entitled under any other bylaw, agreement, vote of shareholders
or disinterested directors, as a matter of law or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office and shall continue as to a person who has ceased to be a director
or officer and shall inure to the benefit of the heirs, executors and
administrators of such a person. No person shall be entitled to
indemnification pursuant to this Article 8 in relation to any matter as to
which indemnification shall not be permitted by law.
Art. 2.02-1 of the Texas Business Corporation Act provides:
1) A corporation may indemnify any officer or director from and
against any judgments, penalties, fines, settlements, and
reasonable expenses actually incurred by him in an action,
suit, investigation or other proceeding to which he is, was,
or is threatened to be a party; provided that it is determined
by the Board of Directors, a committee thereof, special legal
counsel, or a majority of the stockholders that such officer
or director: (a) conducted himself in good faith; (b) (i) in
the case of his conduct as a director of the corporation,
reasonably believed that his conduct was in the best interest
of the corporation or (ii) in all other cases, that his
conduct was at least not opposed to the corporation's
interest; and (c) in a criminal case, had no reasonable cause
to believe his conduct was unlawful. Such indemnity is
limited to the reasonable expenses actually incurred in
matters as to which the officer or director is found liable to
the corporation or is found liable on the basis that a
personal benefit was improperly received by him. No
indemnification is permitted with respect to any proceeding in
which the officer or director is found liable for willful or
intentional misconduct in the performance of his duty to the
corporation.
II - 2
<PAGE> 20
2) A corporation shall indemnify an officer or director against
reasonable expenses incurred by him in connection with an
action, suit, investigation, or other proceeding to which he
is, was, or was threatened to be a party if he has been wholly
successful in its defense.
3) A corporation may advance an officer or director the
reasonable costs of defending an action, suit, investigation
or other proceeding in certain cases.
4) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director,
officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise against
any liability asserted against him and incurred by him in any
such capacity or arising out of his status as such, whether or
not the corporation would have the power to indemnify him
against such liability under the provisions of this Article.
Article 13 of the Company's Bylaws provides generally that officers
and directors of the Company shall have no liability by reason of being an
officer or director if they act in good faith. The Company will indemnify
officers and directors against the expenses of defending certain suits if the
officer or director acted in good faith and in a manner such officer or
director reasonably believed to be in the best interests of the Company,
provided that such suits do not result in certain adverse rulings against such
persons. The Company may purchase insurance against liability for its officers
and directors.
The Company has purchased a directors and officers liability and
corporation reimbursement policy in the amount of $5,000,000, which, subject to
certain exceptions, protects the officers and directors of the Company against
liabilities arising from any claim for breach of duty, neglect, error,
misstatement, misleading statement, omission or other act attempted, committed
or allegedly committed by reason of the director or officer acting in such
capacity.
Item 7. Exemption from Registration Claimed.
18,900 shares of Common Stock were issued to non-employee directors of
the Company in 1995 and 1996 pursuant to the provisions of the 1995 Non-
Employee Director Stock Compensation Plan. An additional 2,250 shares of
Common Stock were issued to an advisory director in 1995 and 1996 as
compensation for his services pursuant to a By-law provision stating that
advisory directors will be compensated in the same manner as the non-employee
directors. All of such shares of Common Stock were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933,
as amended.
II - 3
<PAGE> 21
Item 8. Exhibits
Exhibit Number and Description
(4) Instruments defining the rights of security holders, including
indentures
4.1 Articles of Incorporation and amendments thereto of
the Company [Incorporated by reference to Exhibits
4.1 to 4.6 of the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996].
4.2 By-Laws and amendments thereto of the Company.
4.3 The Company's 1995 Non-Employee Director Stock
Compensation Plan, as amended.
(5) Opinion re legality
5.1 Opinion of Snell & Smith, A Professional Corporation.
(23) Consents of experts and counsel
23.1 Consent of Snell & Smith, A Professional Corporation
(included in its opinion filed as Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
(24) Power of attorney (included on the signature page hereof)
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement to include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration
II - 4
<PAGE> 22
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on November 22, 1996.
STERLING BANCSHARES, INC.
By: /S/ Seth A. McMeans
---------------------------
SETH A. McMEANS, Chief
Financial Officer and
Secretary
II - 5
<PAGE> 23
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoint Mark T. Giles and Seth A. McMeans, or
each of them (with full power to each of them to act alone) his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits, and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent, full power and authority to do and to
perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on November 22, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
\s\ George Martinez Chairman and Director (Principal Executive
------------------- Officer)
George Martinez
\s\ Mark T. Giles President and Director
-----------------
Mark T. Giles
\s\ C. P. Bryan, Jr. Executive Vice President and Director
--------------------
C. P. Bryan, Jr.
\s\ Seth A. McMeans Secretary and Chief Financial Officer
------------------- (Principal Financial and Accounting Officer)
Seth A. McMeans
\s\ John H. Buck Director
----------------
John H. Buck
\s\ George D. Francklow Director
-----------------------
George D. Francklow
\s\ Walter P. Gibbs, Jr. Director
------------------------
Walter P. Gibbs, Jr.
\s\ Bruce J. Harper Director
-------------------
Bruce J. Harper
\s\ Glenn H. Johnson Director
--------------------
Glenn H. Johnson
\s\ James J. Kearney Director
--------------------
James J. Kearney
\s\ C. Frank Kurtin Director
-------------------
C. Frank Kurtin
\s\ Russell I. Orr Director
------------------
Russell I. Orr
\s\ Wayne C. Owen Director
-----------------
Wayne C. Owen
\s\ Christian A. Rasch Director
----------------------
Christian A. Rasch
\s\ Steven F. Retzloff Director
----------------------
Steven F. Retzloff
\s\ Raimundo Riojas Director
-------------------
Raimundo Riojas
</TABLE>
II - 6
<PAGE> 24
EXHIBITS INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.2 By-Laws and amendments thereto of the Company.
4.3 The Company's 1995 Non-Employee Director Stock Compensation Plan,
as amended.
5.1 Opinion of Snell & Smith, A Professional Corporation.
23.2 Consent of Deloitte & Touche LLP.
<PAGE> 1
EXHIBIT 4.2
RESTATED BY-LAWS
OF
STERLING BANCSHARES, INC.
(AS OF OCTOBER 21, 1996)
ARTICLE I
Offices and Agent
The Corporation may have such offices, either within or without the
State of Texas, as the Board of Directors may designate or as the business of
the Corporation may require from time to time.
The registered office of the Corporation required by the Texas
Business Corporation Act to be maintained in the State of Texas may be, but
need not be, identical with the principal office in the State of Texas, as
designated by the Board of Directors. The address of the registered office may
be changed from time to time by the Board of Directors. The registered agent
of the Corporation may be changed from time to time by the Board of Directors.
The address of the initial registered office of the Corporation shall
be 15000 Northwest Freeway, Houston, Texas 77040, and the name of the initial
registered agent of the Corporation at such address shall be George Martinez.
ARTICLE II
Board of Directors
SECTION 1. General Power. The business and affairs of the
Corporation shall be managed by its Board of Directors except as the Board of
Directors shall delegate the power to so manage to the Executive Committee or
other committee.
SECTION 2.1. Number and Qualifications. The number of
directors composing the initial Board of Directors shall be three (3). Upon
resolution of the Board of Directors, the number of directors may be increased
or decreased, but no decrease shall have the effect of shortening the term of
any incumbent director. A director need not be a resident of the State of
Texas or a shareholder of the Corporation.
SECTION 2.2. Classified Board. Commencing with the election
of directors at the 1995 Annual Meeting of Shareholders, the directors, other
than those who may be elected by the holders of any class or series of
Preferred Stock voting separately by class or series, shall be classified, with
respect to the time for which they severally hold office, into three classes,
Class I, Class II and Class
<PAGE> 2
III, which shall be as nearly equal in number as possible, as shall be provided
in the manner specified in the bylaws of the Corporation. Each initial
director in Class I shall hold office for a term expiring at the 1996 annual
meeting of shareholders; each initial director of Class II shall hold office
initially for a term expiring at the 1997 annual meeting of shareholders; and
each initial director of Class III shall hold office for a term expiring at the
1998 annual meeting of shareholders. Notwithstanding the foregoing provision
of this Article, each director shall serve until his successor is duly elected
and qualified or until his earlier death, resignation or removal. At each
annual meeting of shareholders following the 1995 annual meeting, the
successors to the class of directors whose term expires at that meeting shall
be elected to hold office for a term expiring at the annual meeting of
shareholders held in the third year following the year of their election and
until their successors have been duly elected and qualified or until their
earlier death, resignation or removal.
SECTION 2.3. Apportionment of Directors. In the event of any
increase or decrease in the authorized number of directors, the newly created
or eliminated directorships resulting from such increase or decrease shall be
appointed or determined by the Board of Directors among the three classes of
directors so as to maintain such classes as nearly equal as possible. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
SECTION 2.4. Rights of Preferred Shareholders.
Notwithstanding the foregoing, whenever the holders of any one of more classes
or series of Preferred Stock issued by the Corporation shall have the right,
voting separately by class or series, to elect directors at an annual or
special meeting of shareholders, the election, term of office, filing of
vacancies, and other features applicable thereto, and such directors so elected
shall not be so divided into classes pursuant to Section 2.2 unless expressly
provided by such terms.
SECTION 3. Regular Meetings. A regular meeting of the Board
of Directors shall be held without other notice than this by-law immediately
after, and at the same place as, the annual meeting of shareholders. The Board
of Directors may provide, by resolution, the time and place, either within or
without the State of Texas, for the holding of additional regular meetings
without other notice than such resolution.
SECTION 4. Special Meetings. Special meetings of the Board
of Directors may be called by or at the request of the President or any two
directors. The person or persons authorized to call special meetings of the
Board of Directors may fix any place, either within or without the State of
Texas, as the place for holding any special meeting of the Board of Directors
called by them.
SECTION 5. Notice. Notice of any special meeting shall be
given at least two days previous thereto by written notice delivered personally
or mailed to each director at his business address, or by telegram. If mailed,
such notice shall be deemed to be delivered when deposited in the United States
mail so addressed, with postage thereon pre-paid. If notice be given by
telegram, such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. Any director may waive notice of any
meeting. The attendance of a director at a meeting shall
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<PAGE> 3
constitute a waiver of notice of such meeting, except where a director attends
a meeting for the express purpose of objecting to the transaction of any
business because that meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of any regular or special meeting
of the Board of Directors need be specified in the notice, or waiver of notice
of such meeting.
SECTION 6. Quorum. A majority of the number of directors
fixed in accordance with Section 2 of this Article III shall constitute a
quorum for the transaction of business at any meeting of the Board of
Directors, but if less than such majority is present at a meeting, a majority
of the directors present may adjourn the meeting from time to time without
further notice.
SECTION 7. Manner of Acting.
(a) Actions at a Meeting. Except as provided in
Paragraph (b) of this Section and except as provided in Section 12 of
this Article, the act of the majority of the directors present at a
meeting at which a quorum is present shall be the act of the Board of
Directors.
(b) Actions Without a Meeting. Any action required
or permitted to be taken at a meeting of the Board of Directors or the
Executive Committee or any other committee may be taken without a
meeting, if a consent in writing, setting forth the action so taken,
is signed by all of the members of the Board of Directors, Executive
Committee or other committee, as the case may be. Such consent shall
have the same force and effect as a unanimous vote at a meeting. Such
writing, which may be in counterparts, shall be manually executed if
practicable; provided, however, that if circumstances so require,
effect shall be given to written consent transmitted by telegraph,
telex, telecopy or similar means of visual data transmission.
(c) Telephonic Meetings. Meetings of the board of
Directors of the Corporation may be conducted by means of conference
telephone or similar communications equipment whereby all persons
participating in the meeting can hear and speak to each other.
SECTION 8. Vacancies. Any vacancy occurring in the Board of
Directors may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall be elected for the unexpired term of his
predecessor in office. Any directorship to be filled by reason of an increase
in the number of directors shall be filled by election at an annual meeting or
at a special meeting of shareholders called for that purpose. A vacancy shall
be deemed to exist by reason of the death, resignation, failure or refusal to
act by the person elected, or upon the failure of shareholders to elect
directors to fill the unexpired term of directors removed in accordance with
the provisions of Section 9 of this Article II.
SECTION 9. Removal. At any meeting of shareholders called
expressly for the purpose of removal, any director or directors be removed,
with or without cause, by a vote of the holders of
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<PAGE> 4
a majority of the shares then entitled to vote for the election of such
directors. In case the entire board or any one or more of the directors are so
removed, new directors may be elected at the same meeting for the unexpired
term of the director or directors so removed. Failure to elect directors to
fill the unexpired term of the directors so removed shall be deemed to create a
vacancy or vacancies in the Board of Directors.
SECTION 10. Compensation. By resolution of the Board of
Directors, the directors may be paid their expenses, if any, of attendance at
each meeting of the Board of Directors, and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
SECTION 11. Presumption of Assent. A director of the
Corporation who is present at a meeting of the Board of Directors in which
action on any corporate matter is taken shall be presumed to have assented to
the action taken unless his dissent shall be entered in the minutes of the
meeting, or unless he shall file his written dissent to such action with the
person acting as Secretary of the meeting before the adjournment thereof, or
shall forward such dissent by registered mail to the Secretary of the
Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.
SECTION 12. Executive and Other Committees. There may be
established an Executive Committee, and one or more other committees, composed
of one or more directors designated by resolution adopted by a majority of the
full number of directors of the Board of Directors as fixed in accordance with
Section 2 of this Article. The Executive Committee or such other committees may
meet at stated times, or on notice to all members by any one member. Vacancies
in the membership of the Executive Committee or such other committees shall be
filled by a majority vote of the full number of directors on the Board of
Directors at a regular meeting or at a special meeting called for that purpose.
During the intervals between meetings of the Board, the Executive Committee, if
it shall have been established, shall advise and aid the officers of the
Corporation in all matters concerning its interest and the management of its
business, and generally perform such duties and exercise such powers as may be
directed or delegated by the Board of Directors from time to time. The Board
of Directors may delegate to the Executive Committee or such other committees
the authority to exercise all the powers of the Board of Directors, including
the power to declare dividends or to authorize the issuance of shares of the
Corporation, except where action of the full Board of Directors is required by
the Texas Business Corporation Act. The designation of and delegation of power
to the Executive Committee shall not operate to relieve the Board of Directors,
or any member thereof, of any responsibility imposed upon it or him by law.
SECTION 13. Advisory Directors. The Board may appoint such
number of advisory directors as the Board may from time to time determine, each
of whom shall hold office until the next Annual Meeting of Shareholders
following their appointment. Advisory directors shall serve in an advisory
capacity to the Board, but shall not have the right to vote. Advisory
directors also may be appointed by the Board to serve in an advisory capacity
on any committee of the Board, but
-4-
<PAGE> 5
shall not have the right to vote. The Board may remove any advisory director,
with or without cause, upon a majority vote of the Board. The compensation of
any advisory director shall be set and determined by the Board.
ARTICLE III
Officers
SECTION 1. Number. The officers of the Corporation shall be
a President, one or more Vice-Presidents (the number thereof to be determined
by the Board of Directors), a Secretary and a Treasurer, each of whom shall be
elected by the Board of Directors. Such other officers and assistant officers
as may be deemed necessary may be elected or appointed by the Board of
Directors. Any two or more offices may be held by the same person except the
offices of President and Secretary.
SECTION 2. Election and Term of Office. The officers of the
Corporation to be elected by the Board of Directors shall be elected annually
by the Board of Directors at the first meeting of the Board of Directors held
after each annual meeting of the shareholders. If the election of officers
shall not be held at such meeting, such election shall be held as soon
thereafter as may be convenient. Each officer shall hold office until his
successor shall have been duly elected and shall have been qualified, or until
his death, or until he shall resign or shall have been removed in the manner
hereinafter provided.
SECTION 3. Removal. Any officer or agent elected or
appointed by the Board of Directors may be removed by the Board of Directors
whenever in its judgment the best interests of the Corporation would be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed.
SECTION 4. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by
the Board of Directors for the unexpired portion of the term.
SECTION 5. Chairman of the Board of Directors. The Chairman
of the Board of Directors shall, when present, preside at all meetings of the
Board of Directors and shareholders, and shall have and may exercise such other
powers as are from time to time assigned to him by the Board of Directors.
SECTION 6. President. The President shall be the principal
executive officer of the Corporation and, subject to the control of the Board
of Directors, shall in general supervise and control all of the business and
affairs of the Corporation. He shall, when present and when the Chairman of the
Board of Directors is absent, preside at all meetings of the shareholders and
of the Board of Directors. He may sign, with the Secretary or any other proper
officer of the corporation hereunto authorized by the Board of Directors,
certificates for shares of the Corporation, any deeds,
-5-
<PAGE> 6
bonds, mortgages, contracts or other instruments which the board of Directors
has authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
by-laws to some other officer or agent of the Corporation, or shall be required
by law to be otherwise signed or executed; and in general shall perform all
duties incident to the office of President and such other duties as may be
prescribed by the Board of Directors from time to time.
SECTION 7. The Vice Presidents. In the absence of the
President or in the event of his death, inability or refusal to act, the Vice
President (or should there be more than one Vice President, the Vice Presidents
in the order designated at the time of their election, or in the absence of any
designation then in the order of their election) shall perform the duties of
President. Any Vice President may sign, with the Secretary or an Assistant
Secretary, certificates for shares of the Corporation; and shall perform such
other duties as from time to time may be assigned to him by the President or by
the Board of Directors.
SECTION 8. The Secretary. The Secretary shall: (a) keep the
minutes of the shareholders' and the Board of Directors' meetings in one or
more books provided for that purpose; (b) see that all notices are duly given
in accordance with the provisions of these by-laws, or as required by law; (c)
be custodian of the corporate records and of the seal of the Corporation, and
see that the seal of the Corporation is affixed to all documents, the execution
of which, on behalf of the Corporation under its seal, is duly authorized; (d)
keep a register of the post office address of each shareholder which shall be
furnished to the Secretary by such shareholder; (e) sign with the President or
a Vice President certificates for shares of the Corporation, the issuance of
which shall have been authorized by resolution of the Board of Directors; (f)
have general charge of the stock transfer books of the Corporation; and (g) in
general, perform all duties incident to the office of Secretary, and such other
duties as from time to time may be designated to him by the President or by the
Board of Directors.
SECTION 9. The Treasurer. If required by the board of
Directors, the Treasurer shall give a bond for the faithful discharge of his
duties in such sum, and with such surety or sureties, as the Board of Directors
shall determine. He shall: (a) have charge and custody of, and be responsible
for, all funds and securities of the Corporation from any source whatsoever,
and deposit all such moneys in the name of the Corporation in such banks, trust
companies, or other depositories as shall be selected by the Board of
Directors; and (b) in general perform all of the duties incident to the office
of Treasurer and such other duties as from time to time may be assigned to him
by the President or by the Board of Directors.
SECTION 10. Assistant Secretaries and Assistant Treasurers.
The Assistant Secretaries when authorized by the Board of Directors may sign
with the President or a Vice President certificates for shares of the
Corporation the issuance of which shall have been authorized by a resolution of
the Board of Directors. The Assistant Treasurers shall, respectively, if
required by the Board of Directors, give bonds for the faithful discharge of
their duties in such sums and with such sureties as the Board of Directors
shall determine. The Assistant Secretaries and Assistant
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<PAGE> 7
Treasurers, in general, shall perform such duties as shall be assigned to them
by the Secretary or the Treasurer, respectively, or by the President or by the
Board of Directors.
SECTION 11. Salaries. The salaries of the officers shall be
fixed from time to time by the Board of Directors and no officer shall be
prevented from receiving such salary by reason of the fact that he is also a
director of the Corporation.
ARTICLE IV
Shareholders
SECTION 1. Annual Meeting. The annual meeting of the
shareholders shall be held on such date in each year and at such time and place
as may be determined by the Board of Directors, for the purpose of electing
directors and for the transaction of such other business as may come before the
meeting. If the day fixed for the meeting shall be a legal holiday in the
State of Texas, such meeting shall be held on the next succeeding business day.
If the election of directors shall not be held on the day designated herein for
any annual meeting of the shareholders or at any adjournment thereof, the Board
of Directors shall cause the election to be held at a special meeting of the
shareholders as soon thereafter as may be convenient.
SECTION 2. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise prescribed by
statute, may be called by the President or by the Board of Directors, and shall
be called by the President at the request of the holders of not less than
one-tenth (1/10) of all of the outstanding shares of the corporation entitled
to vote at the meeting.
SECTION 3. Place of Meeting. The Board of Directors may
designate any place, either within or without the State of Texas, as the place
of meeting for any annual meeting or for any special meeting called by the
Board of Directors. A waiver of notice signed by all shareholders entitled to
vote at a meeting may designate any place, either within or without the State
of Texas, as the place for the holding of such meeting. If no designation is
made, or if a special meeting be otherwise called, the place of meeting shall
be the registered office of the Corporation in the State of Texas.
SECTION 4. Notice of Meeting. Written or printed notice
stating the place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten nor more than fifty days before the date of the
meeting, either personally or by mail, by or at the direction of the President,
or the Secretary, or the officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
addressed to the shareholder at his address as it appears on the stock transfer
books of the Corporation, with postage thereon prepaid. Waiver by a shareholder
in writing of notice of a shareholder's meeting, signed by him, whether before
or after the time of such meeting, shall be equivalent to the giving of such
notice. Attendance by a shareholder, whether in person or by proxy,
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<PAGE> 8
at a shareholder's meeting shall constitute a waiver of notice of such meeting
of which he has had no notice.
SECTION 5. Closing of Transfer Books and Fixing Record Date.
For the purpose of determining shareholders entitled to notice of or to vote at
any meeting of shareholders or any adjournment thereof, or shareholders
entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other proper purpose, the Board of
Directors of the Corporation may provide that the stock transfer books shall be
closed for a stated period but not to exceed, in any case, fifty (50) days. If
the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders,
such books shall be closed for at least ten (10) days immediately preceding
such meeting. In lieu of closing the stock transfer books, the Board of
Directors may, by resolution, fix in advance a date as the record date for any
such determination of shareholders, such date in any case to be not more than
fifty (50) days and, in case of a meeting of shareholders, not less than ten
(10) days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record
date for such determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof except where the determination has been made through the closing of the
stock transfer books and the stated period of closing has expired.
SECTION 6. Voting Lists. The officer or agent having charge
of the stock transfer books for shares of the Corporation shall make, at least
ten (10) days before each meeting of shareholders, a complete list of the
shareholders entitled to vote at such meeting, or any adjournment thereof,
arranged in alphabetical order, with the address and the number of shares held
by each, which list, for a period of ten (10) days prior to such meeting, shall
be kept on file at the registered office of the Corporation, and shall be
subject to inspection by any shareholder at any time during usual business
hours. Such list shall also be produced and opened at the time and place of
the meeting and shall be subject to the inspection by any shareholder during
the whole time of the meeting. The original stock transfer book shall be prima
facie evidence as to who are the shareholders entitled to examine such list or
transfer books or to vote at any meeting of shareholders.
SECTION 7. Quorum. Except as provided below, a majority of
the outstanding shares of the Corporation entitled to vote, and represented in
person or by proxy, shall constitute a quorum at a meeting of shareholders. If
less than a majority of the outstanding shares, or less than a majority of the
outstanding shares of any necessary class are represented at a meeting, a
majority of the shareholders so represented may adjourn the meeting from time
to time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might
have been transacted as originally notified. The shareholders present at a
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<PAGE> 9
duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
SECTION 8. Proxies. At all meetings of shareholders, a
shareholder may vote by proxy executed in writing by the shareholder or by his
duly authorized attorney in fact. Such proxy shall be filed with the Secretary
of the Corporation before or at the time of the meeting. No proxy shall be
valid after eleven (11) months from the date of its execution, unless otherwise
provided in the proxy. Each proxy shall be revocable unless expressly provided
therein to be irrevocable, and in no event shall it remain irrevocable for a
period of more than eleven (11) months.
SECTION 9. Voting of Shares. Subject to the provisions of
Section 11 of this Article IV, each outstanding share entitled to vote shall be
entitled to one (1) vote upon each matter submitted to a vote at a meeting of
shareholders
SECTION 10. Voting of Shares by Certain Holders. Shares
standing in the name of another corporation may be voted by such officer, agent
or proxy as the by-laws of such corporation may prescribe, or, in the absence
of such provision, as the Board of Directors of such corporation may determine.
Shares held by an administrator, executor, guardian, or conservator
may be voted by him so long as such shares forming a part of an estate are in
the possession and forming a part of the estate being served by him, either in
person or by proxy, without a transfer of such shares into his name.
Shares standing in the name of a Trustee may be voted by him, either
in person or by proxy, but no Trustee shall be entitled to vote shares held by
him without a transfer of such shares into his name as Trustee. Shares standing
in the name of a receiver may be voted by such a receiver, and shares held by
or under the control of a receiver may be voted by such receiver without the
transfer thereof into his name if authority to do so be contained in an
appropriate order of the court by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of a pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Shares of its own stock belonging to the Corporation, or held by it in
a fiduciary capacity, or owned by another corporation, the majority of the
voting stock of which is owned or controlled by this Corporation shall not be
voted, directly or indirectly at any meeting, and shall not be counted in
determining the total number of outstanding shares at any given time.
SECTION 11. Actions Without a Meeting. Any action required
to be taken at a meeting of shareholders, or any action which may be taken at a
meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of
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<PAGE> 10
the shareholders entitled to vote with respect to the subject matter thereof,
and such consent shall have the same force and effect as a unanimous vote of
the shareholders.
SECTION 12. Telephonic Meetings. Meetings of the
shareholders of the Corporation may be conducted by means of conference
telephone or similar communications equipment whereby all persons participating
in the meeting can hear and speak to each other.
ARTICLE V
Certificates for Shares and Their Transfer
SECTION 1. Certificates for Shares. Certificates
representing shares of the Corporation shall be in such form as shall be
determined by the Board of Directors. Such certificates shall be signed by the
President or a Vice President, and by the Secretary or an Assistant Secretary.
If such certificates are signed or countersigned by a transfer agent or
registrar, other than the Corporation, such signature of the President or a
Vice President and Secretary or Assistant Secretary, and the seal of the
Corporation, or any of them, may be executed in facsimile, engraved or printed.
If any officer who has signed or whose facsimile signature has been placed on
any certificate shall have ceased to be such officer before the certificate is
issued, it may be issued by the Corporation with the same effect as if the
officer has not ceased to be such at the date of issue. All certificates for
shares shall be consecutively numbered or otherwise identified. The name and
address of the person to whom the shares represented thereby are issued with
the number of shares and date of issue, shall be entered on the stock transfer
books of the Corporation. All certificates surrendered to the Corporation for
transfer shall be canceled and no new certificate shall be issued until the
former certificate for a like number of shares shall have been surrendered and
canceled, except that incase of a lost, destroyed or mutilated certificate a
new one may be issued therefor upon such terms and indemnity to the corporation
as the Board of Directors may prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of the
Corporation shall be made only on the stock transfer books of the Corporation
by the holder of record thereof, or by his legal representative, who shall
furnish proper evidence of authority to transfer, or by his attorney thereunto
authorized by power of attorney, duly executed and filed with the Secretary of
the Corporation, and on surrender for cancellation of the certificate for such
shares. The person in whose name shares stand on the books of the corporation
shall be deemed by the Corporation to be the owner thereof for all purposes.
SECTION 3. Lost, Stolen or Destroyed Certificates. The
Corporation shall issue a new certificate in place of any certificate for
shares previously issued if the registered owner of the certificate: (i) makes
proof in affidavit form that it has been lost, destroyed or wrongfully taken;
and (ii) requests the issuance of a new certificate before the Corporation has
notice that the certificate has been acquired by a purchaser for value in good
faith and without notice of an adverse claim; and (iii) gives a bond in such
form, and with such surety or sureties, with fixed or open penalty, as the
Corporation may direct, to indemnify the Corporation (and its transfer agent
and registrar, if any)
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<PAGE> 11
against any claim that may be made on account of the alleged loss, destruction
or theft of the certificate; and (iv) satisfies any other reasonable
requirements imposed by the Corporation. When a certificate has been lost,
apparently destroyed or wrongfully taken, and the holder of record fails to
notify the Corporation within a reasonable time after he has notice of it, and
the Corporation registers a transfer of the shares represented by the
certificate before receiving such notification, the holder of record is
precluded from making any claim against the Corporation for the transfer of a
new certificate.
ARTICLE VI
Fiscal Year
The Board of Directors shall, by resolution, fix the fiscal year of the
Corporation.
ARTICLE VII
Dividends
The Board of Directors or the Executive Committee, if so authorized by
a resolution of the Board of Directors, may from time to time declare that the
Corporation may pay dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law and its Articles of Incorporation.
ARTICLE VIII
Seal
The Board of Directors shall provide a corporate seal, which shall be
circular in form and shall have inscribed thereon the name of the Corporation,
the state of incorporation, and the five-pointed Texas star.
ARTICLE IX
Waiver of Notice
Whenever any notice is required to be given to any shareholder or
director of the Corporation under the provisions of these by-laws, under the
provisions of the Articles of Incorporation, or under the provisions of the
Texas Business Corporation Act, a waiver thereof in writing signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice.
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<PAGE> 12
ARTICLE X
Procedure
Meetings of the shareholders and of the Board of Directors shall be
conducted in accordance with the procedure as contained in Robert's Rules of
Order, to the extent applicable.
ARTICLE XI
Participation of Directors and Officers in Related Business
Officers and directors of this Corporation may hold positions as
officers and directors of other corporations, in related businesses, and their
efforts to advance the interest of those corporations will not create a breach
of fiduciary capacity to this Corporation in the absence of showing of bad
faith.
ARTICLE XII
Amendments
The initial By-Laws shall be adopted by the Board of Directors of the
Corporation. The power to alter, amend, or repeal the By-Laws or adopt new
By-Laws shall be vested in the Board of Directors.
ARTICLE XIII
LIMITATION OF LIABILITY; INDEMNIFICATION AND INSURANCE
OF DIRECTORS, OFFICERS AND OTHERS
Limitation of Liability
SECTION 1. A director shall perform his duties as a
director, in good faith, in a manner he reasonably believes to be in the best
interest of the Corporation, and with such care as an ordinarily prudent person
in a like position would use under similar circumstances. In performing his
duties, a director shall be entitled to rely on information, opinions, reports
or statements, including financial statements and other financial data, in each
case prepared or presented by:
(a) one (1) or more officers or employees of the
Corporation whom the director reasonably believes to be reliable and
competent in the matters presented; or
(b) counsel, public accountants or other persons as
to matters which the director reasonably believes to be within such
person's professional or expert competence.
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A person who so performs his duties shall have no liability by reason of being
or having been a director of the Corporation.
An officer, employee or agent of the Corporation who shall perform his
duties in the manner set forth above in this Section 1, relying to the extent
applicable on information, opinions, reports or statements set forth therein,
shall have no liability by reason of being or having been an officer, employee
or agent of the Corporation.
Indemnification
SECTION 2. (a) Actions Other Than Those By or in the Right
of the Corporation. The Corporation shall indemnify, to the full extent
permitted by law, any person who was or is a party or is threatened to be made
a party (including a witness) to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation), by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, against expenses (including attorneys' fees) judgments, fines and
amounts paid in settlement, actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith, in a
manner he reasonably believed to be in, or not opposed to, the best interests
of the corporation and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that such person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(b) Action By or in the Right of the Corporation. The Corporation
shall indemnify, to the full extent permitted by-law, any person who was or is
a party or is threatened to be made a party (including a witness) to any
threatened, pending or completed action, suit or proceeding by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact
that he is or was a director, officer, employee or agent of the Corporation,
against expenses (including attorneys' fees) actually and reasonably incurred
by him in connection with the defense or settlement of, or appearance connected
with, such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation; provided, however, that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of his
duty to the Corporation unless and only to the extent that a court, upon
application, shall determine that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnification for such expenses.
(c) Successful Defense of Action. Notwithstanding, and without
limitation of, any other provision of this Article XIII, to the extent that a
director, officer, employee or agent of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or
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proceeding referred to in paragraph (a) or (b) of this Section 2 or in defense
of any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(d) Determination Required. Any indemnification under paragraph
(a) or (b) of this Section 2 (unless ordered by court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth
in such paragraph. Such determination shall be made in the case of any officer
or director, (1) by the Board of Directors by a majority vote of a quorum
consisting of directors who at the time of the vote are not named defendants or
respondents in the proceeding, or (2) if such a quorum cannot be obtained by a
majority vote of a committee of the Board of Directors, designated to act in
the matter by a majority vote of all directors consisting solely of two or more
directors who at the time of the vote are not named defendants or respondents
in the proceeding, or (3) by special legal counsel selected by the Board of
Directors or a committee of the Board by vote as set forth in (1) and (2), or
if such a quorum cannot be obtained and such a committee cannot be established,
by a majority vote of all directors or (4) by the shareholders in a vote that
excludes the shares held by the directors who are named defendants or
respondents in the proceeding. In the case of an employee or agent of the
Corporation who is not an officer or director of the Corporation, such
determination shall be made as specified in the preceding sentence, or by the
President or by any officer authorized by the President.
(e) Advance of Expenses. Expenses incurred with respect to any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, specified in Sections 2(a) and 2(b) of this Article XIII, may be
paid by the Corporation in advance of the final disposition of such action,
suit or proceeding (l)(i) in the case of any officer, or director, as
authorized by the Board of Directors, and (ii) in the case of any employee or
agent of the Corporation who is not an officer or director of the Corporation,
as authorized by the President or by an officer authorized by him, and (2) upon
receipt of a written undertaking by or on behalf of the director, officer,
employee or agent to repay such amount if it is ultimately determined that he
is not entitled to be indemnified by the Corporation.
SECTION 3. Insurance. The Corporation may, when authorized by the
Board of Directors, purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of the corporation, against
any liability asserted against, and incurred by, him in any such capacity, or
arising out of his status as such, whether or not the Corporation would be
required to indemnify him against such liability under the provisions of
Section 2 of this Article XIII.
SECTION 4. Nonexclusivity; Duration. The indemnifications, rights and
limitations of liability provided by this Article XIII shall not be deemed
exclusive of any other indemnifications, rights or limitations of liability to
which any person may be entitled under any by-law, agreement, vote of members
or disinterested directors, or otherwise, either as to action in his official
capacity and as to action in another capacity while holding office, and they
shall continue although such
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person has ceased to be a director, officer, employee or agent and shall inure
to the benefit of his heirs, executors and administrators. The authorization
to purchase and maintain insurance set forth in Section 3 of this Article XIII
shall likewise not be deemed exclusive.
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EXHIBIT 4.3
STERLING BANCSHARES, INC.
1995 NON-EMPLOYEE DIRECTOR STOCK COMPENSATION PLAN
I. PLAN PURPOSE
Section 1.1. Sterling Bancshares, Inc. (the "Company") hereby
establishes the 1995 Non-Employee Director Stock Compensation Plan (the
"Plan"), which provides the Company with the option to pay all or part of the
Fees payable to the Non-Employee Directors in Common Stock of the Company. The
purpose of this Plan is to increase the proprietary interest of the
Non-Employee Directors in the Company's long-term prospects and the strategic
growth of its business.
II. DEFINITIONS
Section 2.1. "Board" means the Board of Directors of the Company,
and any persons appointed to serve as advisory directors of the Company.
Section 2.2. "Common Stock" means the Company's Common Stock,
$1.00 par value per share.
Section 2.3. "Election" means a resolution made by the Board of
Directors of the Company to pay the Fees of all of the Non-Employee Directors
for any Fiscal Year wholly or partially in the form of Common Stock.
Section 2.4. "Fair Market Value" means, as of any specified date,
the closing price of a share of Common Stock of the Company, as reported by the
NASDAQ National Market System or any securities exchange on which the shares of
Common Stock shall then be traded.
Section 2.5. "Fees" means the annual retainer and meeting fees
earned by a Non-Employee Director for his or her service as a member of the
Board and any committee of the Board during a Fiscal Year or portion thereof.
Section 2.6. "Fiscal Year" means the 12-month period beginning
January 1 of any year and ending December 31 of the same year.
Section 2.7. "Non-Employee Director" means a member of the Board
(including any advisory director) who is not an employee of the Company.
<PAGE> 2
III. SHARES AUTHORIZED FOR ISSUANCE
Section 3.1. A maximum of 150,000 shares of Common Stock may be
issued under this Plan. The Common Stock issued under this Plan shall be
authorized and unissued or treasury shares of Common Stock of the Company. In
the event of any change in the outstanding Common Stock of the Company by
reason of any stock split, stock dividend, merger, consolidation,
reorganization, or other similar change in capitalization, the number or kind
of shares that may be issued under the Plan shall be automatically adjusted so
that the proportionate interest of the shares issuable under this Plan is
maintained as before the occurrence of such event.
IV. ANNUAL ELECTION; PROCEDURES
Section 4.1. For any Fiscal Year, the Board may elect to pay all
or a portion of the Fees payable to the Non-Employee Directors for such Fiscal
Year in shares of Common Stock rather than in cash. Such Election shall be
made at least six months prior to the beginning of the Fiscal Year for which
such Election shall be effective; provided, however, that if no Election has
been made by the Board prior to July 1 of any Fiscal Year, the Fees payable for
the following Fiscal Year shall automatically be payable in shares of Common
Stock. Any such Election shall be effective for all, and not less than all, of
the Non-Employee Directors. Once made, an Election may not be revoked or
modified unless done so at least six months prior to the Fiscal Year for which
such Election is effective.
Section 4.2. The number of shares of Common Stock issued to a
Non-Employee Director shall be equal to the amount of Fees that would have been
paid to a Non-Employee Director for a Fiscal Year divided by the Fair Market
Value of a share of Common Stock on the day immediately prior to the day on
which the Fees are to be paid. The Board, however, shall have the option to
designate the amount of Fees payable to the Non-Employee Directors in whole
numbers of shares of Common Stock; provided, however, that any increase in the
amount of Fees payable in shares of Common Stock must be made at least six
months prior to the Fiscal Year for which such Election is to be effective.
Section 4.3. Any shares of Common Stock issued to a Non-Employee
Director pursuant to this Plan for any Fiscal Year shall be deemed to be fully
paid and non-assessable shares of Common Stock on the date of issuance and
shall not be subject to forfeiture or reduction in the event that, during the
Fiscal Year for which the shares of Common Stock were issued as Fees, a
Non-Employee Director subsequently dies, becomes disabled, retires or resigns
as a director or is removed or otherwise terminated as a director.
Section 4.4. Only whole numbers of shares of Common Stock shall be
issued; fractional shares shall be rounded up to the nearest whole share. If
the Election is for only a portion of the Fees, the remaining portion of the
Fees to be paid in cash shall be paid at the time the Fees would normally be
paid by the Company to the Non-Employee Director.
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Section 4.5. The Director Compensation Committee (the "Committee")
of the Board of Directors shall be responsible for the administration of the
Plan; provided, however, that all of the members of such Committee shall be
composed of members of the Board who are employees of the Company. The
Committee, by majority action of its members, is authorized to interpret the
Plan, prescribe, amend, and rescind rules and regulations relating to the Plan,
provide for conditions and assurances deemed necessary or advisable to protect
the interests of the Company, and make all other determinations necessary or
advisable for the administration of the Plan, but only to the extent not
contrary to the express provisions of the Plan. No member of the Committee
shall be liable for any action or determination made in good faith. The
determinations, interpretations, and other actions of the Committee pursuant to
the provisions of the Plan shall be binding and conclusive for all purposes and
on all persons.
V. EFFECTIVE DATE AND TERM OF PLAN
Section 5.1. The Plan shall be submitted to the stockholders of
the Company for their approval at the 1995 Annual Meeting of Stockholders and
will become effective immediately upon such approval. If approved by the
stockholders of the Company, the Fees payable to the Non-Employee Directors for
the 1995 Fiscal Year shall be paid in shares of Common Stock.
Section 5.2. This Plan shall terminate on the tenth anniversary of
the effective date of this Plan.
VI. AMENDMENT AND TERMINATION
Section 6.1. The Board of Directors of the Company may at any time
terminate, and from time to time may amend or modify the Plan; provided,
however, that no amendment or modification may become effective without
approval by the shareholders of the Company if shareholder approval is required
to enable the Plan to satisfy any applicable statutory or regulatory
requirements or if the Board, on advice of counsel, determines that shareholder
approval is otherwise necessary or advisable.
VII. TRANSFER RESTRICTIONS; INTENTION TO COMPLY WITH APPLICABLE SECURITIES
LAWS
Section 7.1. Any shares of Common Stock issued pursuant to the
Plan may not be resold for a period of six months following the issuance of
such shares of Common Stock.
Section 7.2. The provisions of this Plan are intended, and shall
be interpreted, to permit the issuance of shares of Common Stock made hereby to
comply with all applicable conditions of Rule 16b-3 or its successors under the
Securities Exchange Act of 1934, as amended. To the extent
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any provisions of the Plan or actions by the Committee fail to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
Section 7.3. All transactions pursuant to the terms of the Plan
shall only be effective at such time as counsel to the Company shall have
determined that such transaction will not violate federal or state securities
or other laws. The Committee may, in its sole discretion, defer the
effectiveness of such transaction to pursue whatever actions may be required to
ensure compliance with such federal or state securities or other laws.
Section 7.4. All certificates for shares of Common Stock delivered
under the Plan shall be subject to such stock transfer orders and other
restrictions as the Company may deem advisable under the rules, regulations and
other requirements of the Company, any stock exchange upon which the Common
Stock is then listed and any applicable Federal or state securities laws, and
the Company may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
VIII. WITHHOLDING TAXES
Section 8.1. Whenever the Company issues shares of Common Stock
under the Plan, the Company shall have the right to require the Non-Employee
Director to remit to the Company an amount sufficient to satisfy any Federal,
state and/or local withholding tax requirements prior to the delivery of any
certificate or certificates for such shares. Alternatively, at the Company's
discretion, the Company may issue only such number of shares of Common Stock
net of the number of shares sufficient to satisfy the withholding tax
requirements. For withholding tax purposes, the shares of Common Stock shall
be valued on the date the withholding obligation is incurred.
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EXHIBIT 5.1
SNELL & SMITH, P.C.
1000 LOUISIANA, SUITE 3650
HOUSTON, TEXAS 77002
713/652-3300
November 22, 1996
Board of Directors
Sterling Bancshares, Inc.
15000 Northwest Freeway
Houston, Texas 77040
Gentlemen:
We have acted as counsel to Sterling Bancshares, Inc., a bank holding
company incorporated under the laws of the State of Texas (the "Company"), in
connection with the Company's Registration Statement on Form S-8 (the
"Registration Statement") relating to the registration under the Securities Act
of 1933, as amended, of (i) 18,900 shares of common stock, par value $1.00 per
share (the "Common Stock"), of the Company previously issued under the Sterling
Bancshares, Inc. 1995 Non-Employee Director Stock Compensation Plan (the
"Plan"), (ii) 131,100 shares of Common Stock issuable in the future under the
Plan, and (iii) 2,250 shares of Common Stock issued to Thomas B. McDade.
In such capacity, we have examined such corporate records and
documents, certificates of corporate and public officials and such other
instruments as we have deemed necessary for the purposes of the opinions
contained herein. As to all matters of fact material to such opinions, we have
relied upon the representations of officers of the Company. We have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, and the conformity with the original of all documents
submitted to us as copies.
Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that (i) the 18,900
shares of Common Stock issued by the Company pursuant to the Plan and the 2,250
shares of Common Stock issued to Thomas B. McDade have been duly authorized
and are legally issued, fully paid and non- assessable, and (ii) the 131,100
shares of Common Stock issuable in the future by the Company pursuant to the
Plan have been duly authorized and, when issued in accordance with the terms of
the Plan, will be legally issued, fully paid and non-assessable.
<PAGE> 2
November 20, 1996
Page 2
We hereby consent to the inclusion of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
SNELL & SMITH, a Professional
Corporation
/S/ Snell & Smith
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement of
Sterling Bancshares, Inc. on Form S-8 of our report dated February 23, 1996,
appearing in the Annual Report on Form 10-K of Sterling Bancshares, Inc. for
the year ended December 31, 1995 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Houston, Texas
November 22, 1996
