<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
STERLING BANCSHARES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Michael A. Roy, General Counsel, Sterling Bancshares, Inc., 15000 Northwest
Freeway, Houston, TX 77040
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
================================================================================
1997
NOTICE OF
ANNUAL MEETING
AND
PROXY STATEMENT
================================================================================
MONDAY, APRIL 21, 1997
AT 1:30 P.M. LOCAL TIME
STERLING BANK
MANGUM OFFICE
2201 MANGUM ROAD
HOUSTON, TEXAS 77092
<PAGE> 3
STERLING BANCSHARES, INC.
15000 NORTHWEST FREEWAY
HOUSTON, TEXAS 77040
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 21, 1997
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders (the "Meeting") of Sterling Bancshares,
Inc. (the "Company") will be held at Sterling Bank's Mangum Office, 2201 Mangum
Road, Houston, Texas, at 1:30 p.m., Houston time, on Monday, April 21, 1997,
for the following purposes:
1. To elect four Class II directors for a term of three years ending
at the 2000 Annual Meeting of Shareholders, and until their successors
shall have been elected and qualified.
2. To authorize an amendment to the Company's Articles of
Incorporation to increase the number of authorized shares of the Company's
Common Stock, par value $1.00 per share, from 20,000,000 to 30,000,000
shares.
3. To act on such other business as may properly come before the
Meeting or any adjournment thereof.
The close of business on March 14, 1997 has been fixed as the record date
for determining shareholders entitled to notice of and to vote at the Meeting
or at any adjournments thereof. For a period of at least ten days prior to the
annual meeting, a complete list of shareholders entitled to vote at the Meeting
will be open to the examination of any shareholder during ordinary business
hours at the executive offices of the Company, 15000 Northwest Freeway,
Houston, Texas 77040. Information concerning the matters to be acted upon at
the Meeting is set forth in the accompanying Proxy Statement.
You are cordially invited and urged to attend the Annual Meeting. If,
however, you are unable to attend the Meeting, you are requested to sign and
date the accompanying proxy and return it promptly in the enclosed envelope.
If you attend the Meeting, you may, if you wish, vote in person regardless of
whether you have given your proxy. In any event, a proxy may be revoked at any
time before it is exercised.
Michael A. Roy
Secretary
March 21, 1997
YOUR VOTE IS IMPORTANT.
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN YOUR PROXY SO THAT YOUR SHARES
MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND TO ASSURE THE PRESENCE OF A
QUORUM. THE PROMPT RETURN OF YOUR SIGNED PROXY, REGARDLESS OF THE NUMBER OF
SHARES YOU HOLD, WILL AID THE COMPANY IN REDUCING THE EXPENSE OF ADDITIONAL
PROXY SOLICITATION. THE GIVING OF SUCH PROXY DOES NOT AFFECT YOUR RIGHT TO
VOTE IN PERSON IF YOU ATTEND THE MEETING.
<PAGE> 4
STERLING BANCSHARES, INC.
PROXY STATEMENT
SOLICITATION OF PROXY, REVOCABILITY AND VOTING OF PROXIES
GENERAL
The accompanying proxy is solicited on behalf of the Board of Directors
(the "Board") of Sterling Bancshares, Inc., a Texas corporation (the
"Company"), for use at the 1997 Annual Meeting of Shareholders (the "Meeting")
to be held on Monday, April 21, 1997, at the time and place and for the
purposes set forth in the accompanying Notice and at any recess or adjournment
thereof. Holders of record of common stock, par value $1.00 per share ("Common
Stock"), of the Company at the close of business on March 14, 1997 (the "Record
Date") are entitled to notice of the Meeting and to vote at the Meeting. On
the Record Date, there were 12,001,400 shares of Common Stock outstanding and
entitled to vote. The total outstanding shares of Common Stock reflects the
results of the three-for-two stock split that the Company effected on February
24, 1997, in the form of a 50% stock dividend.
The Company's principal executive offices are located at 15000 Northwest
Freeway, Houston, Texas 77040. This proxy statement and proxy are first being
mailed to shareholders on or about March 25, 1997.
VOTING
Holders of Common Stock are entitled to one vote per share. The presence
at the Meeting, in person or by proxy, of holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Meeting will
constitute a quorum for the transaction of business. The affirmative vote of
the holders of a majority of the outstanding shares of Common Stock represented
at the Meeting is required to elect the Class II nominees to the Board of
Directors. The affirmative vote of two-thirds of the outstanding shares of
Common Stock represented at the Meeting is required to approve the proposal to
amend the Company's Articles of Incorporation to increase the number of
authorized shares of Common Stock. If a share of Common Stock is represented
for any purpose at the Meeting, it is deemed to be present for all other
matters. Abstentions and shares held of record by a broker or nominee ("Broker
Shares") that are voted on any matter are included in determining the number of
votes present. Shares with respect to which authority is withheld, abstentions,
and Broker Shares that are not voted are treated as shares as to which voting
authority has been withheld by the holder of those shares and, therefore, as
shares not voting on the proposal.
REVOCABILITY OF PROXIES
The accompanying proxy, even though executed and returned, may be revoked
at any time prior to being voted by notifying the Secretary in writing or by
appearing in person and voting at the Meeting.
SOLICITATION
The Company will bear the entire cost of preparing, assembling, printing,
and mailing this Proxy Statement, the accompanying proxy card, and any
additional materials that may be furnished to shareholders and will reimburse
brokerage firms and other custodians, nominees, and fiduciaries for their
reasonable expenses incurred in forwarding solicitation material regarding the
Meeting to beneficial owners. The solicitation of proxies will be made by
mail. Further solicitation of proxies may be made by telephone or other form
of direct communication by officers, directors, and regular employees of the
Company or its subsidiaries, who will not be additionally compensated therefor,
or by a proxy solicitation service that may be engaged at the expense of the
Company.
<PAGE> 5
ANNUAL REPORT
The Company's Annual Report to Shareholders for the fiscal year ended
December 31, 1996, is being furnished with this Proxy Statement to shareholders
of record on the Record Date. The Annual Report to Shareholders does not
constitute a part of the proxy solicitation material.
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION AS DIRECTORS
The Board of Directors currently consists of 16 directors. In accordance
with the Company's Restated By-Laws, the members of the Board of Directors are
divided into three classes, Class I, Class II, and Class III, respectively.
Pursuant to the Company's Restated By-Laws, the members of each class are
elected for a term of office expiring at the third succeeding annual meeting of
shareholders following their election and until their successors are duly
elected and qualified. The Company's Restated By-Laws provide further that the
classes shall be as nearly equal in number as possible. The term of office of
the Class II directors expires at the Meeting. The Class III and Class I
directors are serving terms that expire at the annual meeting of shareholders
in 1998 and 1999, respectively. The four Class II nominees, if elected at the
Meeting, will serve until the Company's 2000 annual meeting of shareholders and
until their respective successors are elected.
The Board has nominated four individuals for election as Class II directors at
the Meeting: James M. Clepper, James J. Kearney, Raimundo Riojas, and Cuba
Wadlington, Jr. Two of the nominees have served as Class II directors since
the 1995 annual meeting of shareholders, namely Messrs. Kearney and Riojas.
Mr. Wadlington was appointed to fill a vacancy on the Board in January 1997.
Mr. Clepper is standing for election for the first time at the Meeting.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ELECTION OF THE
NOMINEES LISTED ABOVE AS CLASS II DIRECTORS. UNLESS OTHERWISE DIRECTED IN THE
ACCOMPANYING PROXY, THE PERSONS NAMED THEREIN WILL VOTE "FOR" THE ELECTION OF
THE NOMINEES LISTED ABOVE AS CLASS II DIRECTORS.
Shareholders may not cumulate their votes in the election of directors.
The four Class II nominees receiving the affirmative vote of the holders of a
majority of the shares of Common Stock represented at the Meeting will be
elected to the Board. Shareholders entitled to vote for the election of
directors may withhold authority to vote for any or all nominees for directors.
If any nominee becomes unavailable for any reason, then the shares represented
by the proxy will be voted "FOR" the remainder of the listed nominees and for
such other nominees as may be designated by the Board as replacements for those
who become unavailable. Discretionary authority to do so is included in the
proxy.
<PAGE> 6
The following table sets forth certain information concerning the persons
who have been nominated for election as Class II directors and the other
current directors of the Company, other than Class II whose terms expire at the
Meeting and who have not been nominated for reelection.
<TABLE>
<CAPTION>
DIRECTOR DIRECTOR
NAME DESCRIPTION AGE SINCE CLASS
---- ----------- --- ----- -----
<S> <C> <C> <C> <C>
C. P. Bryan, Jr. (3)(5)(6) Executive Vice President and 46 1980 Class III
director of the Company and
Vice Chairman of Sterling Bank
John H. Buck (1)(4) Director 54 1996 Class I
James M. Clepper Nominee for Director 51 - Class II
Walter P. Gibbs, Jr. (1) Director 64 1994 Class I
Mark T. Giles (1)(3) President and director of the 42 1995 Class III
Company and Sterling Bank
Bruce J. Harper (2) Director 62 1996 Class I
Glenn H. Johnson (2) Director 56 1990 Class I
James J. Kearney (3) Director 54 1995 Class II
C. Frank Kurtin Director 68 1995 Class III
George Martinez (1)(3)(5) Chairman and Chief Financial 55 1980 Class III
Officer of the Company and
Sterling Bank
Russell I. Orr (2) Director 62 1993 Class I
Christian A. Rasch Director 34 1996 Class I
Steven F. Retzloff (1)(4) Director 40 1988 Class III
Raimundo Riojas Director 57 1994 Class II
Cuba Wadlington, Jr. Director 53 1997 Class II
- ----------------
</TABLE>
(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3) Member of the Asset/Liability Management
(4) Member of the Compensation Committee
(5) Member of the Director Compensation Committee
(6) Member of the Employee Savings Plan Committee
<PAGE> 7
The following is a brief biographical summary of the directors and
executive officers of the Company.
C. P. Bryan, Jr. (Class III) has been Executive Vice President of the
Company since February 1989 and Vice Chairman of Sterling Bank since December
1989. He is also Chief Executive Officer of the Champions Office of Sterling
Bank. He was Chairman and President of Sterling Bank from January 1989 to
December 1989 and President of Jersey Village Bank from January 1985 to January
1989.
John H. Buck (Class I) has been a partner since 1990 in the Houston law
firm of Buck, Keenan & Owens, LLP.
James M. Clepper (Nominee for Class II director) has been since 1986 the
President, Chief Executive Officer and sole shareholder of Southwest Solvents &
Chemicals, an independent chemical distributor based in Houston, Texas.
Walter P. Gibbs, Jr. (Class I) is retired. He was Chairman of the
Sterling Bank Mangum Office from March 1994 to July, 1995. From 1970 to March
1994, Mr. Gibbs was the President of Guardian Bancshares, Inc. and its
subsidiary, Guardian Bank, prior to the merger of Guardian Bancshares, Inc.
with the Company in March 1994.
Mark T. Giles (Class III) has been President of the Company and Sterling
Bank since January 1995. He was formerly President of Charter Bancshares,
Inc., from 1988 to 1995 and President/Chief Executive Officer of Charter
National Bank - Houston from 1989 to 1995. He also served as director of
Charter Bancshares, Inc. and its subsidiary banks for more than the five years
preceding the date he joined Sterling Bank.
Bruce J. Harper (Class I) has been since 1962 the President and Chief
Executive Officer of Harper & Pearson Company, CPAs, an accounting and
consulting firm in Houston, Texas, with emphasis on serving financial
institutions and owner-managed businesses.
Glenn H. Johnson (Class I) has been a partner in the Houston law firm of
Johnson & Wurzer since 1973.
James J. Kearney (Class II) has been since 1974 Senior Vice President and
Director of the Private Client Group for the Houston, Texas office of Cowen &
Co., a New York Stock Exchange investment banking and securities brokerage
firm.
C. Frank Kurtin (Class III) has been a business and banking consultant
since October 1995. From February 1990 to September 1995, he was the
Treasurer, Chief Financial Officer and Secretary of the Company.
George Martinez (Class III) has been Chairman of the Company since 1994,
Chairman of Sterling Bank since December 1989, and Chief Financial Officer of
the Company and Sterling Bank since January 1997. Prior to 1994, Mr. Martinez
was President of the Company.
Russell I. Orr (Class I) has been a certified public accountant practicing
in Houston, Texas with his own firm, Orr & Co., since 1976.
Christian A. Rasch (Class I) has been a Director of Sucsova Investments
Corp., an investment company with interests primarily in agricultural, trading
and financial enterprises, for the past five years.
Steven F. Retzloff (Class III) has been President of Retzloff Industries,
Inc., a manufacturer of trailers based in Houston, Texas, for the past five
years.
Raimundo Riojas (Class II) has been the President of Duwest, Inc., a joint
venture of Westrade, Inc. and E. I. Dupont de Nemours engaged in the
distribution of agricultural chemical products, for the past five years.
Cuba Wadlington, Jr. (Class II) has been Senior Vice President, General
Manager and Director of Transcontinental Gas Pipe Line Corporation since 1995.
From 1988 to 1995, he served as Senior Vice President and General Manager of
<PAGE> 8
Williams Western Pipeline Company and Executive Vice President of Kern River
Gas Transmission Company. Mr. Wadlington was elected to the Board on January
27, 1997, to fill an open position in the Class II directors.
ADVISORY DIRECTORS. Thomas B. McDade, who has handled personal
investments since retiring from his position as Vice Chairman and a director of
Texas Commerce Bancshares, Inc., serves as an advisory director of the Company.
The Company anticipates that at its annual organizational meeting to be held
following the Meeting the Board of Directors will reappoint Mr. McDade and
appoint George D. Francklow, Jr., a Class II director whose term expires at the
Meeting, as advisory directors for the ensuing year.
INFORMATION ABOUT THE BOARD OF DIRECTORS AND
COMMITTEES OF THE BOARD
COMPENSATION OF DIRECTORS. For the 1996-1997 Board year, which ends on
April 20, 1997, non-employee directors and advisory directors of the Company
received an annual retainer fee paid as 450 shares of Common Stock (with no
additional per-meeting fees), pursuant to the Company's 1995 Non-Employee
Director Stock Compensation Plan approved by shareholders on April 17, 1995.
In addition, members of Committees of the Board received an annual committee
fee in the form of an additional 675 shares of Common Stock, with no additional
per-meeting fees and with no additional fee for serving on more than one
committee. The Company also reimburses the directors' travel expenses for
attending meetings.
For the 1997-1998 Board year, the number of shares of Common Stock
issuable to non-employee directors and advisory directors for the annual
retainer fee was increased from 450 to 675 shares of Common Stock as a result
of the three-for-two stock split (effected as a stock dividend) that was
distributed by the Company on February 24, 1997. Similarly, the number of
shares of Common Stock issuable for the annual committee fee was increased from
675 shares to 1,012 shares. There are no additional per-meeting fees and no
additional fee for serving on more than one committee. Using the closing price
of the Common Stock on February 28, 1997 of $15.00 per share, the annual
retainer fee payable to a non-employee director would be $10,125 and the fee
for serving on one or more committees would be an additional $15,180, for a
total of $25,305. Directors of the Company who are also employees of the
Company do not receive fees for attending meetings of the Board of Directors.
BOARD OF DIRECTORS. During 1996, the Board of Directors met five times.
All directors attended 75 percent or more of the meetings of the Board of
Directors and of the Committees of the Board on which they served during 1996.
EXECUTIVE COMMITTEE. The directors who serve on the Executive Committee
are John H. Buck, Walter P. Gibbs, Jr., Mark T. Giles, George Martinez, and
Steven F. Retzloff. In addition, Thomas McDade, an advisory director of the
Company, and Howard Tellepsen, a member of the board of directors of Sterling
Bank, serve on the Executive Committee. The primary function of the Executive
Committee is to review the Company's performance and condition between board
meetings, approve mergers and acquisitions, policies and nominations to the
Board, and evaluate management. The Executive Committee met eight times during
1996.
AUDIT COMMITTEE. The directors who serve on the Audit Committee are Bruce
J. Harper, Glenn H. Johnson and Russell I. Orr. The primary function of the
Audit Committee is to direct and monitor the internal audit function and to
make recommendations regarding the selection the Company's auditing firm. The
Audit Committee met eight times during 1996.
COMPENSATION COMMITTEE. The directors who serve on the Compensation
Committee are John H. Buck and Steven F. Retzloff. In addition, Thomas McDade
and Howard Tellepsen also serve on the Compensation Committee. The primary
function of the Compensation Committee is to develop, review, and make
recommendations to the full Board with respect to the Company's executive
compensation policies and to make awards under the 1994 Stock Incentive Plan.
The Compensation Committee met five times during 1996.
<PAGE> 9
ASSET/LIABILITY MANAGEMENT COMMITTEE. The directors who serve on the
Asset/Liability Management Committee are C. P. Bryan, Jr., Mark T. Giles,
James J. Kearney and George Martinez. In addition, Daryl D. Bohls and Seth A.
McMeans, officers of the Company, as well as Jack H. Herndon, an advisory
director of Sterling Bank, are members of the Asset/Liability Management
Committee. The primary function of the Asset/Liability Management Committee is
to plan and control the process for matching the mix and maturities of assets
and liabilities in ways that will provide a favorable and even flow of net
interest income while assuming reasonable business risk. The Asset/Liability
Management Committee met eight times during 1996.
DIRECTOR COMPENSATION COMMITTEE. The directors who serve on the Director
Compensation Committee are George Martinez and C. P. Bryan, Jr. The primary
function of the Director Compensation Committee is the administration of the
Company's Non-Employee Director Stock Compensation Plan. The Director
Compensation Committee did not meet during 1996 but took certain actions by
unanimous written consent in accordance with the Company's Restated By-Laws.
EMPLOYEE SAVINGS PLAN ADMINISTRATION COMMITTEE. The sole director who
serves on the Employee Savings Plan Administration Committee is C. P. Bryan,
Jr. In addition, Daryl D. Bohls, James E. Froehlich, Seth A. McMeans and Glenn
W. Rust, officers of the Company and/or Sterling Bank, are members of the
Employee Savings Plan Administration Committee. The primary function of the
Employee Savings Plan Administration Committee is oversight of the Company's
Employee Savings Plan. The Employee Savings Plan Administration Committee did
not meet during 1996 but took certain actions by unanimous written consent in
accordance with the Company's Restated By-Laws.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
The following is a report from the Compensation Committee of the Company
describing the policies pursuant to which compensation was paid to executive
officers of the Company during 1996.
The Compensation Committee of the Board of Directors is responsible for
developing and making recommendations to the Board with respect to the
Company's executive compensation policies. John H. Buck, Thomas McDade
(advisory director), Steven F. Retzloff and Howard Tellepsen (a director of
Sterling Bank) serve on the Compensation Committee. The Compensation Committee
prepares a report which sets forth the components of the Company's executive
officer compensation program and describes the basis on which the 1996
compensation determinations were made by the Compensation Committee with
respect to the executive officers of the Company.
The Company believes that compensation of its executive officers should
reflect and support the Company's strategic goals, the primary goal being the
creation of long-term value for the Company's shareholders while protecting the
interests of the depositors of the Company's subsidiary bank. The Compensation
Committee believes that these goals are best supported by rewarding individuals
for outstanding contributions to the Company's success and by compensating its
executive officers competitively with the compensation of similarly situated
executive officers.
The Compensation Committee currently implements a base salary structure in
concert with an incentive compensation program which is based on the Company's
performance. The base salary levels are determined through comparisons of
salary levels of executive officers of bank holding companies of similar size.
In addition, the Compensation Committee takes into account individual
experience and performance and specific issues particular to the Company.
The Company, as a result of a recommendation from the Compensation
Committee, has adopted an incentive compensation program (the "Incentive
Program") for officers of its subsidiary bank, including the named executive
officers of the Company. The Incentive Program, the components of which are
reviewed annually by the Compensation Committee, is subject to approval
annually in December by the Board of Directors of Sterling Bank, and provides
that officers will receive incentive compensation equal to a designated
percentage of the Company's earnings in excess of earnings needed to provide a
minimum specified return on equity ("ROE"). As in 1995, for 1996 this minimum
threshold
<PAGE> 10
of earnings is 12% ROE, with 27% of earnings above the 12% ROE
threshold being used to fund the Incentive Program. The entire incentive
compensation fund is allocated among all of the officers based on a point
system relating to salary, level of responsibility, individual performance and,
where applicable, bank office performance.
In addition, each of the named executive officers are participants in the
Company-wide employee savings plan (the "Savings Plan"), which includes profit
sharing contributions by the Company. The Board of Directors determines the
amount, presently set at 10% of current or accumulated profits before taxes, to
be contributed to the Savings Plan on behalf of the participants with respect
to a given taxable year. Profit sharing contributions are allocated to
participant accounts based on the ratio which the compensation of each
participant bears to the compensation of all participants eligible to
participate in the Savings Plan. In 1996, the Company adopted the Sterling
Bancshares, Inc. Deferred Compensation Plan (the "Deferred Compensation Plan")
to enable eligible participants, including the named executive officers of the
Company, to make and receive contributions on a tax deferred basis which they
are otherwise precluded from having credited to their Savings Plan accounts
under applicable regulations of the Internal Revenue Service.
Finally, each of the named executive officers may be selected to
participate in the Company's 1994 Stock Incentive Plan. During 1996, pursuant
to the Stock Incentive Plan, options for the purchase of shares of the
Company's Common Stock were granted to the following executive officers: (1)
Mr. Giles received options to purchase 22,500 shares; and (2) Mr. Bohls
received options to purchase 1,500 shares. Option share amounts noted above
have been adjusted to reflect both three-for-two stock splits (effected as a
stock dividend) that were implemented in February 1997.
Compensation for each of the named executive officers, as well as other
senior executives, consists of a base salary and incentive compensation. The
Committee will continue to monitor the salary levels of the named executive
officers to ensure that the components of compensation are consistent with the
Company's objectives. Generally, the amounts received by the named executive
officers from the Incentive Program exceeded 20% of their 1996 compensation.
The amounts contributed by the Company to the Savings Plan and the Deferred
Compensation Plan accounts of the named executive officers for fiscal year 1996
totaled $114,628.
In reviewing the 1996 compensation of Mr. Martinez, the Company's
Chairman, the Compensation Committee reviewed his compensation history,
executive compensation survey data, and comparative performance information.
Upon recommendation by the Compensation Committee, the Board of Directors of
Sterling Bank set Mr. Martinez' salary for 1996 at $172,000. Mr. Martinez
participates in the Incentive Program along with all other officers. From the
Incentive Program in 1996, Mr. Martinez earned a bonus of $64,745 resulting in
over 25% of his 1996 compensation being dependent on the success of the
Company. The amount contributed by the Company to the Savings Plan and
Deferred Compensation Plan account of Mr. Martinez in fiscal year 1996 was
$30,227. The Compensation Committee believes that Mr. Martinez' total
compensation is reasonable and competitive based upon compensation survey data
and comparative performance information.
Date: March 1, 1997 The Compensation Committee:
---------------------------
John H. Buck
Thomas McDade
Steven F. Retzloff
Howard Tellepsen
COMPENSATION COMMITTEE INTERLOCKS
During 1996, no executive officer of the Company served as (i) a member of
the compensation committee (or other board committee performing equivalent
functions) of another entity, one of whose executive officers served on the
Compensation Committee of the Company, (ii) a director of another entity, one
of whose executive officers served on the Compensation Committee of the
Company, or (iii) a member of the compensation committee (or other board
committee performing equivalent functions) of another entity, one of whose
executive officers served as a director of the Company.
<PAGE> 11
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock against
the cumulative total return indices of the NASDAQ Stocks (US) Index and the
NASDAQ Bank Stocks Index for the period between October 1992 and December 31,
1996. The historical stock price performance for the Company's stock shown on
the graph below is not necessarily indicative of future stock performance. The
information on the Company's Common Stock has been adjusted to reflect the
three-for-two stock splits (effected as stock dividends) that were implemented
in February 1995 and February 1996.
COMPOSITE OF PARTIAL PERIOD CUMULATIVE TOTAL RETURN *
THE NASDAQ NMS COMPOSITE INDEX, THE NASDAQ COMPOSITE BANK INDEX
AND
STERLING BANCSHARES, INC.
<TABLE>
<CAPTION>
10/30/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Sterling Bancshares 100.00 113.73 141.53 142.80 219.30 361.99
Nasdaq NMS Composite 100.00 112.00 128.04 124.92 175.57 216.27
Nasdaq Composite Bank Index 100.00 111.48 144.21 145.81 211.15 266.38
</TABLE>
* Sterling Bancshares, Inc. became a publicly traded and reporting company
effective October 22, 1992. Assumes that the value of the investment in
Sterling Bancshares, Inc., and each index, was $100 on October 30, 1992 and
that all dividends were reinvested.
<PAGE> 12
SUMMARY COMPENSATION TABLE
The following table sets forth for 1996, 1995 and 1994 the compensation of (i)
the Chief Executive Officer of the Company, and (ii) the other four most highly
compensated officers of the Company or its bank subsidiary who were serving in
such position at the end of 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation (1) Compensation
Name and ----------------------- ------------ All Other
Principal Position Year Salary Bonus Stock Options(2) Compensation (3)
------------------ ---- --------- ----- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
George Martinez 1996 $172,000 $64,745 0 $30,227
Chairman and Chief 1995 156,000 56,789 60,173 17,591
Financial Officer 1994 150,000 40,959 0 24,948
Mark T. Giles (4) 1996 $165,000 $62,187 22,500 $28,608
President 1995 150,000 23,519 37,500 23,073
C. P. Bryan, Jr. 1996 $130,000 $45,994 0 $22,612
CEO, Champions Office 1995 125,000 45,458 38,573 22,687
Sterling Bank 1994 120,000 32,332 0 19,852
Daryl D. Bohls 1996 $110,500 $37,756 1,500 $14,726
CEO, Gulf Freeway Office 1995 106,900 39,072 0
Sterling Bank 1994 102,800 28,488 0 16,980
Brooks S. Boyd 1996 $101,500 $42,892 0 $18,355
CEO, Westheimer Office 1995 95,700 47,918 29,531 21,481
Sterling Bank 1994 92,000 25,522 0 15,072
----------------
</TABLE>
(1) Other annual compensation provided to the named executive officers
during 1996, 1995, or 1994 did not exceed the disclosure requirements
of the rules promulgated by the Securities and Exchange Commission.
(2) Adjusted to reflect the three-for-two stock split that was effected on
February 24, 1997.
(3) The amounts in this column reflect the Company's contribution to the
Employee Savings Plan of the named executive officers during 1996,
1995 and 1994, together with the Company's contribution for 1996 to
their Deferred Compensation Plan accounts. Such amounts, however, do
not include (i) trust forfeitures occurring under the terms of the
Employee Savings Plan, (ii) earnings on the undistributed balances
held pursuant to the Employee Savings Plan for the benefit of
participants, or (iii) term life insurance premiums paid by the
Company for the benefit of the named executive officers. The amount of
such life insurance premiums for 1996 were as follows, with comparable
amounts having been paid in prior reported periods: Martinez ($398),
Giles ($398), Bryan ($388), Bohls ($330), and Boyd ($304).
(4) Mr. Giles was not an officer, director or employee of the Company
prior to 1995.
STOCK OPTION PLANS
<PAGE> 13
The Company currently maintains the 1994 Stock Incentive Plan (the
"Plan") for all of its officers and key employees which is administered by the
Compensation Committee. Under the Plan, which expires in 2004, the Company may
grant qualified or non-qualified stock options to eligible employees, or may
issue performance shares. An aggregate of 1,181,250 shares (adjusted for the
three-for-two stock split effected on February 24, 1997), including 84,375
shares issuable as performance shares, of the Company's Common Stock has been
reserved for issuance under the Plan. During 1996, stock options for the
purchase of a total of approximately 146,000 shares of the Company's stock were
issued to 23 employees.
OPTION GRANTS TABLE
The following table sets forth information concerning the grant of stock
options during 1996 to the Company's Chief Executive Officer and the named
executive officers in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
------------------------------ Potential Realizable
Number of Percentage Value at Assumed
Securities of Total Annual Rate of Stock
Underlying Options Price Appreciation for
Options Granted to Exercise Option Term($)(3)
Granted Employees Price Expiration ----------------------
Name (Shares)(1) in 1996(2) ($/Share) Date 5% 10%
---- ----------- ---------- --------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
George Martinez 0 - - - - -
Mark T. Giles 22,500 15.4% $8.92 2/25/06 $126,225 $319,950
C. P. Bryan, Jr. 0 - - - -
Daryl D. Bohls 1,500 1.0% $8.92 - - -
Brooks S. Boyd 0 - - 2/25/06 $8,415 $21,330
-----------
</TABLE>
(1) The options granted in 1996 vest over four years at the rate of 25%
per year on each anniversary of the date of grant. The number of
options have been restated to reflect the three-for-two stock split
that occurred in February 1997.
(2) The Company granted options representing approximately 146,000 shares
to employees in 1996, as adjusted for the three-for-two stock split
paid on February 24, 1997.
(3) These amounts represent certain assumed rates of appreciation based on
actual option term and annual compounding from the date of grant.
Actual gains, if any, on stock option exercises and Common Stock
holdings are dependent on the future performance of the Common Stock
and overall stock market conditions. There can be no assurance that
the stock appreciation amounts reflected in this table will be
achieved.
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth information concerning the exercise of
stock options during 1996 by the Company's Chief Executive Officer and the
named executive officers set forth in the Summary Compensation Table, and the
fiscal year-end value of unexercised options.
OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-the-
Options at Money Options at
Shares December 31, 1996 (1) December 31, 1996 (1)(2)
Acquired on Value ---------------------------- ----------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
le
--
<S> <C> <C> <C> <C> <C> <C>
George Martinez 0 0 15,043 45,130 $111,242 $333,715
Mark T. Giles 0 0 8,438 47,812 62,394 296,606
</TABLE>
<PAGE> 14
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
C. P. Bryan, Jr. 0 0 9,643 28,930 71,310 213,929
Daryl D. Bohls 0 0 5,855 1,500 65,265 5,495
Brooks S. Boyd 0 0 7,383 22,148 54,595 163,784
-----------------
</TABLE>
(1) Adjusted to reflect the three-for-two stock split that was effected on
February 24, 1997.
(2) An option is "in the money" if the market value of the Common Stock
(based on the Nasdaq closing price of $12.58 on December 31, 1996, as
adjusted for the stock split referred to in Note 1 above) exceeds the
exercise price of the option.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information known to the
Company concerning persons who beneficially owned more than 5% of the
outstanding Common Stock of the Company as of the Record Date. The table also
shows information concerning beneficial ownership by all directors and board
nominees, by each of the executive officers named in the Summary Compensation
Table and by all directors and officers as a group. The number of shares
beneficially owned by each director or officer is determined under the rules of
the Securities and Exchange Commission, and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares as to which an individual has the sole
or shared voting power or investment power and also shares that the individual
has the sole right to acquire within 60 days through the exercise of any stock
option or right. Unless otherwise noted, each person listed below has sole
voting and investment power (or shares such powers with his or her spouse) with
respect to the shares listed.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership Class
------------------------ -------------------- -----
<S> <C> <C>
A. F. Retzloff 926,428 (1) 7.5%
13955 FM 529
Houston, Texas 77041
Steven F. Retzloff 760,125 (2) 6.2%
13955 FM 529
Houston, Texas 77041
Retzloff Industries, Inc. 755,727 6.1%
13955 FM 529
Houston, Texas 77041
Daryl D. Bohls 69,565 (3) *
Brooks Boyd 117,391 (4) *
C. P. Bryan, Jr. 19,294 (5) *
John H. Buck 1,687 *
James M. Clepper 0 -
George D. Francklow, Jr. 284,450 (6) 2.3%
Walter P. Gibbs, Jr. 223,837 (7) 1.8%
Mark T. Giles 60,000 (8) *
Bruce J. Harper 0 *
Glenn H. Johnson 132,975 (9) 1.1%
James J. Kearney 13,500 *
C. Frank Kurtin 46,160 (10) *
George Martinez 498,372 (11) 4.0%
</TABLE>
<PAGE> 15
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership Class
------------------------ -------------------- -----
<S> <C> <C>
Russell I. Orr 27,675 *
Wayne C. Owen 31,681 *
Christian A. Rasch 543,300 (12) 4.4%
Raimundo Riojas 152,407 (13) 1.2%
Cuba Wadlington, Jr. 0 -
All directors and executive
officers as a group (19 persons) 3,153,120 25.5%
----------------
</TABLE>
* Indicates less than one percent.
(1) Includes 755,727 shares owned of record by Retzloff Industries, Inc.,
of which A.F. Retzloff is the Chairman of the Board.
(2) Includes 755,727 shares owned of record by Retzloff Industries, Inc.,
of which Steven F. Retzloff is the controlling shareholder, President
and CEO.
(3) Includes 6,870 shares held individually and in an IRA account by Mr.
Bohls' spouse, 1,294 shares owned of record by minor children and
stepchildren of Mr. Bohls, and 6,230 shares that can be acquired
pursuant to exercise of fully vested outstanding stock options (375 of
which vested after December 31, 1996).
(4) Includes 14,765 shares that can be acquired pursuant to exercise of
fully vested outstanding stock options (7,382 of which vested after
December 31, 1996).
(5) Includes 19,286 shares that can be acquired pursuant to the exercise
of fully vested outstanding stock options (9,643 of which vested after
December 31, 1996).
(6) Includes 5,905 shares owned by Mr. Francklow's spouse, and 83,295
shares held in the Estate of Mary Ann Francklow, deceased spouse of
Mr. Francklow.
(7) Includes 61,372 shares owned of record by Mr. Gibbs' spouse.
(8) Includes 22,500 shares that can be acquired pursuant to the exercise
of fully vested outstanding stock options (14,062 of which vested
after December 31, 1996).
(9) Includes 20,250 shares owned of record by the Elliott A. Johnson --
Grandchildren Trust, Glenn H. Johnson, Trustee; 20,250 shares owned of
record by the Katherine M. Johnson Marital Trust, Glenn H. Johnson,
Trustee; 81,000 shares owned of record by Katherine M. Johnson, Mr.
Johnson's mother, and managed by Mr. Johnson under a power of
attorney; and 3,375 held of record by Johnson & Wurzer, P.C., of which
Mr. Johnson is the controlling shareholder.
(10) Includes 175 shares owned by Mr. Kurtin's spouse.
(11) Includes 30,086 shares that can be acquired pursuant to the exercise of
fully vested outstanding stock options (15,043 of which vested after
December 31, 1996).
(12) Includes 543,300 shares owned of record by either Sucsova Investments
Corp. or Multiflora International, Inc., companies owned by Mr. Rasch and
other members of his family.
(13) Includes 152,239 shares owned of record by Kiffas Investment Company,
which is principally owned and controlled by Mr. Riojas.
CERTAIN TRANSACTIONS
Certain of the Company's officers and directors are, or have been in
the past, customers of the Company's subsidiary bank and its predecessor banks,
and some of the Company's officers and directors are directors, officers or
shareholders of entities which are, or have been in the past, customers of such
banks. As such customers, they have had transactions in
<PAGE> 16
the ordinary course of business with such banks, including outstanding loans.
All such loans were on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
other persons, and did not involve more than a normal risk of collectibility or
present any other unfavorable features. All credit transactions involving
officers and directors, either of the Company or of Sterling Bank, are reviewed
and approved by the Loan Committee of Sterling Bank and are disclosed and
reviewed monthly in the meetings of the Board of Directors of Sterling Bank.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has selected Deloitte & Touche LLP as its independent
audit firm for fiscal year 1997. Deloitte & Touche LLP has served as the
Company's independent audit firm since 1988. Representatives of Deloitte &
Touche LLP will be present at the Meeting and will have an opportunity to make
a statement at the Meeting if they desire to do so. They will also be
available to respond to appropriate questions of shareholders at the Meeting.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's officers and directors, and persons who own more
than 10% of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "SEC"). Officers, directors and holders of more than 10% of the
Company's outstanding Common Stock are required to furnish the Company with
copies of all forms they file pursuant to Section 16(a) of the Exchange Act.
Due to inadvertence in connection with small transactions involving the
Company's Common Stock, two directors, Messrs. Gibbs and Rasch, did not timely
file reports on Form 4 to reflect changes in their beneficial ownership during
1996. Upon discovery of such inadvertent omission, all such transactions have
been reported to the SEC. Based solely upon the information provided to the
Company by its directors, executive officers and ten percent beneficial owners,
the Company believes that all other filings required under Section 16(a) of the
Exchange Act have been made.
PROPOSAL TO INCREASE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
THE PROPOSAL. The Board of Directors is seeking shareholder approval
to amend Article 4 of the Company's Articles of Incorporation (the "Articles of
Incorporation") to increase the number of authorized shares of Common Stock,
par value $1.00 per share ("Common Stock"), of the Company from 20,000,000 to
30,000,000 shares. This proposal has been unanimously approved by the Board of
Directors subject to approval by the shareholders of the Company. If the
proposed amendment is authorized, the text of the first paragraph of Article 4
of the Articles of Incorporation would be amended to read as follows:
The total number of shares of all classes of stock which the
Corporation shall be authorized to issue is 31,000,000 shares, divided
into the following: (i) 1,000,000 shares of Preferred Stock, par
value $1.00 per share (Preferred Stock); and (ii) 30,000,000 shares of
Common Stock, par value $1.00 per share (Common Stock).
As of the Record Date, 49,500 shares of Series A Convertible Preferred
Stock, 38,880 shares of Series B Convertible Preferred Stock, and 12,001,400
shares of Common Stock were outstanding, after giving effect to the three-
for-two stock split of the Company's Common Stock (effected as a stock
dividend) distributed on February 24, 1997 to holders of record on February 10,
1997. The 49,500 outstanding shares of Series A Convertible Preferred Stock
are convertible into a maximum of 139,218 shares of Common Stock and the 38,880
shares of Series B Convertible Preferred Stock are convertible into a maximum
of 72,900 shares of Common Stock. The Board has designated 300,000 additional
shares of Convertible Preferred Stock in two series which are being offered at
the present time pursuant to two private placement securities offerings in
connection with the opening of the Fountainview and Cypress Station offices of
Sterling Bank. Both additional series of Convertible Preferred Stock have
substantially identical terms to the outstanding Series A and
<PAGE> 17
Series B shares. These additional shares of Convertible Preferred Stock will be
convertible into a maximum of 375,000 shares of Common Stock. Also, as of the
Record Date and after giving effect to the three-for- two split, 1,835,117
shares of Common Stock were reserved for issuance under the Company's stock
option plans and Non- Employee Director Stock Compensation Plan. On March 18,
1997, the Company entered into a definitive Agreement and Plan of Merger (the
"Merger Agreement") to acquire First Houston Bancshares, Inc. ("First Houston")
and its subsidiary, Houston National Bank, in a stock-for-stock merger. The
Merger Agreement, which is subject to approval of First Houston's shareholders
and various banking regulatory authorities, provides that the Company will issue
approximately 1.7 million shares of the Company's common stock to the
shareholders of First Houston. As a result of the foregoing events and
transactions, the Company will have less than four million unreserved and
otherwise uncommitted shares of Common Stock available for future issuance.
REASONS FOR THE PROPOSED AMENDMENT. The proposed increase in the
authorized shares of Common Stock has been recommended by the Board of
Directors to ensure that an adequate supply of authorized and unissued shares
is available for general corporate needs, such as employee benefit plans, the
conversion of other securities (such as warrants and preferred stock) that may
be issued by the Company, future stock splits, stock dividends and other
distributions to shareholders, raising additional capital, financing
arrangements, and acquisitions by the Company of other businesses if favorable
opportunities become available. Except for issuances of shares of Common Stock
pursuant to the Company's stock option and stock compensation plans and except
for conversion of the designated series of Convertible Preferred Stock
described above, the Company has no present plans, arrangements or
understandings to issue any additional shares of Common Stock or Preferred
Stock.
POSSIBLE EFFECTS OF THE PROPOSED AMENDMENT. If approved by the
shareholders, the additional authorized shares of Common Stock would be
available for issuance at the discretion of the Board of Directors without
further shareholder approval (subject to applicable rules of the National
Association of Securities Dealers, Inc.), without the delay and expense
incident to holding a special meeting of shareholders to consider any specific
issuance. However, the rules of the National Association of Securities Dealers,
Inc. (applicable to NASDAQ National Market System issuers) generally require
shareholder approval in the following 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 officers or directors.
Current holders of Common Stock have no preemptive rights, which means
that current shareholders do not have a prior right to purchase any new issue
of capital stock of the Company in order to maintain their proportionate
ownership thereof. The effects of the authorization of additional shares of
Common Stock may also include dilution of the voting power of currently
outstanding shares and reduction of the portion of dividends and of liquidation
proceeds payable to the holders of currently outstanding Common Stock.
In addition, the Board of Directors could use the authorized but
unissued shares of Common Stock to create impediments to a takeover or a change
of control of the Company. Under certain circumstances, such shares could be
used to create voting impediments or to frustrate persons seeking to effect a
takeover or otherwise gain control of the Company. For example, the Company
might seek to frustrate a takeover attempt by making a private sale of a large
block of shares to a third party who was opposed to such an attempt. The
increase in authorized stock might also be considered as having the effect of
discouraging an attempt by a third party to acquire control of the Company,
through the acquisition of a substantial number of shares, since the issuance
of any shares could be used to dilute the stock ownership of shares of the
Company's voting stock held by such third party. Accordingly, an effect of the
increase in the number of authorized shares of Common Stock may be to deter a
future takeover attempt. The Board of Directors is not presently aware of
any plans to acquire control of the Company. The Company's Board of Directors
has not proposed the amendment to the Articles of Incorporation as an
anti-takeover measure.
<PAGE> 18
REQUIRED VOTE AND RECOMMENDATION. The affirmative vote of holders of
two-thirds of the outstanding shares of Common Stock and entitled to vote at
the Meeting as of the Record Date is required to approve the proposed amendment
to the Company's Articles of Incorporation. Abstentions and broker non-votes
have the same legal effect as a vote against this proposal.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS OF THE COMPANY VOTE "FOR"
THE APPROVAL OF THE PROPOSED AMENDMENT OF THE COMPANY'S ARTICLES OF
INCORPORATION.
SHAREHOLDER PROPOSALS AT THE NEXT ANNUAL MEETING OF SHAREHOLDERS
Shareholders of the Company who intend to submit proposals to the
Company's shareholders at the next Annual Meeting of Shareholders must submit
such proposals to the Company no later than December 21, 1997. Shareholder
proposals should be submitted to the Secretary of the Company at 15000
Northwest Freeway, Houston, Texas 77040.
OTHER MATTERS
The management of the Company knows of no other matters which may come
before the Meeting. However, if any matters other than those referred to above
should properly come before the Meeting, it is the intention of the persons
named in the enclosed proxy to vote all proxies in accordance with their best
judgment.
By order of the Board of Directors,
Michael A. Roy
Secretary
<PAGE> 19
P R O X Y
STERLING BANCSHARES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL SHAREHOLDER'S MEETING APRIL 21, 1997
The undersigned, hereby revoking all prior proxies, hereby appoints C. P.
Bryan, Jr. and Michael A. Roy, and each of them, his true and lawful agents and
proxies, with full and several power of substitution, to represent and to vote
all the shares of Common Stock of STERLING BANCSHARES, INC. standing in the
name of the undersigned, and with respect to which the undersigned would be
entitled to vote if personally present, at the Annual Meeting of Shareholders
of STERLING BANCSHARES, INC. to be held on April 21, 1997 at Sterling Bank's
Mangum Office, 2201 Mangum Road, Houston, Texas 77092, and at any
adjournment(s) thereof, on all matters coming before said meeting.
(change of address)
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
(If you have written in the above space,
please mark the corresponding box on
the reverse side of this card.)
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
BY USING THE ENCLOSED ENVELOPE
-----------
SEE REVERSE
SIDE
-----------
<PAGE> 20
[X] Please mark your
votes as in this
example.
FOR WITHHELD
1. ELECTION OF FOUR CLASS II DIRECTORS [ ] [ ]
for a three year term ending at the 2000
Annual Meeting of Shareholders.
Nominees: James M. Clepper, James J.
Kearney, Raimundo Riojas, and Cuba
Wadlington, Jr.
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------
FOR AGAINST ABSTAIN
2. Proposal to Amend the Articles of [ ] [ ] [ ]
Incorporation to increase the Authorized
Shares of Common Stock from 20,000,000 to
30,000,000 shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2, AND UNLESS A
CONTRARY CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE
PROPOSALS.
3. In their discretion, the Proxies are authorized to vote upon any other
business as may properly come before the meeting or any adjournment thereof.
Either of the proxies of their respective substitutes, who shall be present
and acting, shall have and may exercise all the powers hereby granted.
Change
of [ ]
Address
SIGNATURE(S) _________________________________________________ DATE __________
SIGNATURE(S) _________________________________________________ DATE __________
(Please sign exactly as your name appears at left. For joint accounts, each
joint owner should sign. Executors, administrators, trustees, etc., should also
so indicate when signing.)
