<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 18, 1998.
REGISTRATION NO. 33-84398
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
POST-EFFECTIVE AMENDMENT NO. 1 TO
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
(713) 466-8300
(ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)
STERLING BANCSHARES, INC. 1994 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED)
(FULL TITLE OF THE PLANS)
GEORGE MARTINEZ COPY TO:
CHAIRMAN OF THE BOARD AND G. MICHAEL O'LEARY
CHIEF FINANCIAL OFFICER DAN A. FLECKMAN
STERLING BANCSHARES, INC. ANDREWS & KURTH L.L.P.
15000 NORTHWEST FREEWAY 600 TRAVIS, SUITE 4200
HOUSTON, TEXAS 77040 HOUSTON, TEXAS 77002
(713) 466-8300 (713) 220-4200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TO BE OFFERING PRICE OFFERING REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED (1)(2) PER SHARE PRICE FEE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per share 1,771,875 Shares N/A N/A $2,081.89 (3)
=================================================================================================================
(1) Includes 350,000 shares of Common Stock registered in the initial filing of the Registration Statement on
September 27, 1994 and gives effect to the three-for-two stock splits effected as stock dividends and paid to
shareholders on February 10, 1995, February 14, 1996, February 24, 1997 and February 20, 1998.
(2) The number of shares of Common Stock registered herein is subject to adjustment to prevent dilution resulting
from stock splits, stock dividends or similar transactions.
(3) Previously paid by the Registrant.
</TABLE>
<PAGE>
EXPLANATORY NOTE
Sterling Bancshares, Inc. (the "Company") hereby files with the Securities
and Exchange Commission (the "Commission") this Post-Effective Amendment No. 1
to the Company's Registration Statement on Form S-8 (File No. 33-84398) to
register additional shares of the Company's common stock, par value $1.00 per
share (the "Common Stock"), offered or to be offered to participants under the
Sterling Bancshares, Inc. 1994 Stock Incentive Plan, as amended and restated
(the "Plan") from time to time at prices determined in accordance with the Plan.
The additional shares of Common Stock being registered reflect anti-dilution
provisions of the Plan which increase the number of shares of Common Stock
offered or to be offered to participants upon the three-for-two stock splits
effected as stock dividends and paid to shareholders on February 10, 1995,
February 14, 1996, February 24, 1997 and February 20, 1998.
As amended, this registration statement also covers such indeterminate
number of additional shares which may be offered and issued pursuant to the Plan
to prevent dilution resulting from future stock splits, stock dividends or
similar transactions.
The contents of the Company's Registration Statement on Form S-8 (File No.
33-84398) are incorporated herein by reference.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
Sterling Bancshares, Inc. (the "Company") incorporates herein by reference
the following documents as of their respective dates as filed with the
Commission:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998; and
(c) The description of the Common Stock contained in the Company's
registration statement on Form 8-A (File No. 0-20750), filed with the
Commission on October 19, 1992.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
subsequent to the date of this Registration Statement and prior to the
termination of the offering made hereby shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of the Registration Statement and the Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which also is, or is deemed to be, incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of the
Registration Statement or the Prospectus.
2
<PAGE>
ITEM 8. EXHIBITS.
Exhibit
Number Description
- ------ -----------
4.1* Restated and Amended Articles of Incorporation of the Company, as
approved by the Company's shareholders at the Company's 1998 Annual
Meeting held April 23, 1998.
4.2 Restated Bylaws of the Company (filed as Exhibit 4.2 to the Company's
Registration Statement on Form S-8 (No. 333-16719) filed with the
Commission on November 25, 1996 and incorporated herein by reference).
4.3* Sterling Bancshares, Inc. 1994 Stock Incentive Plan (as amended and
restated).
5.1* Opinion of Andrews & Kurth L.L.P. as to the legality of the shares being
registered.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Andrews & Kurth L.L.P. (included in the opinion filed as
Exhibit 5.1 to this Registration Statement).
24.1* Power of Attorney (set forth on the signature page contained in Part II
of this Registration Statement).
____________________________
*filed herewith
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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) 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;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
3
<PAGE>
(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.
(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 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 (described in Item 6 of this
registration statement), 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 Securities Act of 1933 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 Securities Act of 1933 and will be governed by the
final adjudication of such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all 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 the 17th day of June,
1998.
STERLING BANCSHARES, INC.
/s/ GEORGE MARTINEZ
----------------------------------------
George Martinez
Chairman of the Board and Chief Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints George Martinez, and Michael A. Roy, and
each of them, his true and lawful attorneys-in-fact and agents with full power
of substitution, for him and 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 any subsequent registration statement filed
by the Registrant pursuant to Rule 462(b) of the Securities Act of 1933, which
relates to this Registration Statement, and to file the same, with all exhibits
thereto, and all documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or his or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ GEORGE MARTINEZ Chairman of the Board and June 17, 1998
- --------------------------- Chief Financial Officer and
George Martinez Director (Principal Executive,
Financial and Accounting
Officer)
/s/ J. DOWNEY BRIDGWATER President and Director June 17, 1998
- ---------------------------
J. Downey Bridgwater
/s/ JOHN H. BUCK Director June 17, 1998
- ---------------------------
John H. Buck
/s/ JOHN B. CARTER, JR. Director June 17, 1998
- ---------------------------
John B. Carter, Jr.
5
<PAGE>
/s/ JAMES M. CLEPPER Director June 17, 1998
- ---------------------------
James M. Clepper
/s/ WALTER P. GIBBS, JR. Director June 17, 1998
- ---------------------------
Walter P. Gibbs, Jr.
/s/ BRUCE J. HARPER Director June 17, 1998
- ---------------------------
Bruce J. Harper
/s/ GLENN H. JOHNSON Director June 17, 1998
- ---------------------------
Glenn H. Johnson
/s/ JAMES J. KEARNEY Director June 17, 1998
- ---------------------------
James J. Kearney
/s/ RUSSELL ORR Director June 17, 1998
- ---------------------------
Russell Orr
/s/ CHRISTIAN A. RASCH Director June 17, 1998
- ---------------------------
Christian A. Rasch
/s/ STEVEN F. RETZLOFF Director June 17, 1998
- ---------------------------
Steven F. Retzloff
/s/ RAIMUNDO RIOJAS Director June 17, 1998
- ---------------------------
Raimundo Riojas
/s/ CUBA WADLINGTON, JR. Director June 17, 1998
- ---------------------------
Cuba Wadlington, Jr.
6
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
- ------ -----------
4.1* Restated and Amended Articles of Incorporation of the Company, as
approved by the Company's shareholders at the Company's 1998 Annual
Meeting held April 23, 1998.
4.2 Restated Bylaws of the Company (filed as Exhibit 4.2 to the Company's
Registration Statement on Form S-8 (No. 333-16719) filed with the
Commission on November 25, 1996 and incorporated herein by reference).
4.3* Sterling Bancshares, Inc. 1994 Stock Incentive Plan (as amended and
restated).
5.1* Opinion of Andrews & Kurth L.L.P. as to the legality of the shares being
registered.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Andrews & Kurth L.L.P. (included in the opinion filed as
Exhibit 5.1 to this Registration Statement).
24.1* Power of Attorney (set forth on the signature page contained in Part II
of this Registration Statement).
____________________________
*filed herewith
7
<PAGE>
EXHIBIT 4.1
RESTATED AND AMENDED
ARTICLES OF INCORPORATION
OF
STERLING BANCSHARES, INC.
Sterling Bancshares, Inc. (the "Corporation"), pursuant to the
provisions of Article 4.07 of the Texas Business Corporation Act, hereby adopts
these Restated and Amended Articles of Incorporation which accurately copy the
Articles of Incorporation of the Corporation that are in effect to date, as
previously amended and as further amended by such Restated and Amended Articles
of Incorporation as hereinafter set forth. The original Articles of
Incorporation of the Corporation were originally filed with the Secretary of
State of the State of Texas on September 23, 1980.
These Restated and Amended Articles of Incorporation and the amendment
made hereby have been duly adopted in accordance with the applicable provisions
of Article 4.07 of the Texas Business Corporation Act, and the Restated and
Amended Articles of Incorporation, and such amendment were adopted by the
shareholders of the outstanding shares of Common Stock of the Corporation at a
shareholders meeting held on April 23, 1998.
ARTICLE ONE
The name of the Corporation is Sterling Bancshares, Inc.
ARTICLE TWO
Paragraph 1 of Article 4 of the Restated and Amended Articles of
Incorporation is hereby amended to read in its entirety as follows:
The total number of shares of all classes of stock which the Corporation
shall be authorized to issue is 51,000,000 shares, divided into the
following: (i) 1,000,000 shares of Preferred Stock, par value $1.00 per
share (Preferred Stock); and (ii) 50,000,000 shares of Common Stock, par
value $1.00 per share (Common Stock).
ARTICLE THREE
The amendment made by the restated articles of incorporation has been
effected in conformity with the provisions of the Texas Business Corporation Act
and such restated articles
<PAGE>
of incorporation and the amendment made by the restated articles of
incorporation was duly adopted by the shareholders of the corporation on the
23rd day of April, 1998.
ARTICLE FOUR
The number of shares outstanding was 20,799,863 shares of Common Stock and
177,113 shares of Preferred Stock; the number of shares entitled to vote on the
restated articles of incorporation as so amended was 20,799,863 shares of Common
Stock; the number of shares voted for such restated articles as so amended was
16,827,666 of Common Stock; the number of shares voted against such restated
articles as so amended was 237,926 of Common Stock; and the number of shares
abstaining from voting on such restated articles as so amended was of Common
Stock.
ARTICLE FIVE
The articles of incorporation and all amendments and supplements thereto
are hereby superseded by the following restated articles of incorporation which
accurately copy the entire text thereof and the amendment set forth above:
ARTICLE 1.
The name of the corporation is Sterling Bancshares, Inc.
ARTICLE 2.
The period of duration of the corporation is perpetual.
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ARTICLE 3.
The purpose for which the Corporation is organized is to engage in any or
all lawful acts, activities or businesses for which a corporation may be
organized under the Texas Business Corporation Act.
ARTICLE 4.
The total number of shares of all classes of stock which the Corporation
shall be authorized to issue is 51,000,000 shares, divided into the following:
(i) 1,000,000 shares of Preferred Stock, par value $1.00 per share (Preferred
Stock); and (ii) 50,000,000 shares of Common Stock, par value $1.00 per share
(Common Stock).
A description of the respective classes of stock and a statement of the
designations, preferences, limitations and relative rights of said respective
classes of stock are as follows:
4.1. Preferred Stock.
Section 4.1.1. Issuance in Series. The Preferred Stock may be
divided into and issued in one or more series. The Board of Directors is hereby
vested with authority from time to time to establish and designate such series,
and within the limitations prescribed by law or set forth herein, to fix and
determine the relative rights and preferences of the shares of any series so
established, but all shares of the Preferred Stock shall be identical except as
to the following relative rights and preferences, as to which there may be
variations between different series: (a) the rate of dividend; (b) the price at
and the terms and conditions on which shares may be redeemed, 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; (c) the
amount payable upon shares in event of involuntary liquidation; (d) the amount
payable upon shares in the event
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<PAGE>
of voluntary liquidation; (e) sinking fund provisions for the redemption or
purchase of shares; (f) the terms and conditions on which shares may be
converted, if the shares of any series are issued with the privilege of
conversion; and (g) voting rights. The Board of Directors shall exercise such
authority by the adoption of a resolution or resolutions as prescribed by law.
The term "fixed for such series" and similar terms as used in this Article 4
shall mean stated and expressed in this Article 4 or in a resolution or
resolutions adopted by the Board of Directors establishing and designating the
series of Preferred Stock referred to herein.
Section 4.1.2. Dividends. The holders of the Preferred Stock of
each such series shall be entitled to receive, when and as declared by the Board
of Directors, out of any funds legally available therefor, cumulative
preferential dividends in cash, at the rate per annum fixed for such series, and
no more. Dividends on shares of the Preferred Stock of each series shall accrue
from the date of the initial issue of shares of such series, or from such other
date as may be fixed by the Board of Directors, shall be cumulative, and shall
be payable quarterly on the last days of March, June, September and December in
each year to shareholders of record on the fifteenth day of the calendar month
in which such dividends are payable with the first dividend on the Preferred
Stock of any series being payable on the respective dividend date which follows
the first full calendar quarter after the initial issue of shares of such
series. Each share of Preferred Stock shall rank on a parity with each other
share of Preferred Stock, irrespective of series, with respect to preferential
dividends at the respective rates fixed for such series, and no dividend shall
be declared or paid or set apart for payment for the Preferred Stock of any
series unless at the same time a dividend in like proportion to the accrued and
unpaid dividends upon the Preferred Stock of each other series shall be declared
or paid or set apart for payment, as the
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<PAGE>
case may be, on Preferred Stock of each other series then outstanding. Accrued
and unpaid dividends on the Preferred Stock shall not bear interest.
Section 4.1.3. Dividend Restrictions on Junior Stock. So long as
any shares of Preferred Stock are outstanding, the Corporation shall not pay or
declare any cash dividends whatsoever on the Common Stock or any other class of
stock ranking junior to the Preferred Stock unless (a) all dividends on the
Preferred Stock of all series for all past quarterly dividend periods shall have
been paid, or declared and a sum sufficient for the payment thereof set apart,
and (b) there shall exist no default in respect of any sinking fund or purchase
fund for the redemption or purchase of shares of Preferred Stock of any series
or 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 a
vote at a meeting called for such purpose or by written waiver with or without a
meeting.
Section 4.1.4. Redemption. The Corporation at the option of the Board
of Directors may redeem the Preferred Stock of any series which by its terms is
redeemable, at the time or times and on the terms and conditions fixed for such
series, upon notice duly given as hereinafter provided, by paying therefor in
cash the sum fixed for such series, together, in each case, with an amount equal
to accrued and unpaid dividends thereon. The term "accrued and unpaid dividends"
as used herein with respect to Preferred Stock of any series shall mean
dividends on all outstanding shares of Preferred Stock of such series at the
rate fixed for such series, from the date or dates from which such dividends
accrued to the date as of which accrued and unpaid dividends are being
determined, less the aggregate amount of all dividends theretofore declared and
paid or set apart for payment upon such outstanding Preferred Stock.
-5-
<PAGE>
At least 20 and not more than 50 days' previous notice of any such
redemption of Preferred Stock shall be mailed, addressed to the holders of
record of the shares to be redeemed at their respective addresses as the same
shall appear on the books of the Corporation.
In case of the redemption of only part of the Preferred Stock of any series
at the time outstanding, at the option of the Board of Directors such redemption
shall be made pro rata or the shares of such series to be redeemed shall be
chosen by lot in such manner as may be prescribed by resolution of the Board of
Directors or the shares of such series to be redeemed shall be chosen in such
other manner as may have been fixed for such series.
The Corporation may, on or prior to the date fixed for redemption of any
shares of Preferred Stock, deposit with any bank or trust company in the State
of Texas, or any bank or trust company in the United States duly appointed and
acting as transfer agent for the Corporation, as a trust fund, a sum sufficient
to redeem such shares called for redemption, with irrevocable instructions and
authority to such bank or trust company to give or complete the notice of
redemption thereof and to pay, on or after the date fixed for such redemption,
to the respective holders of such shares, as evidenced by a list of holders of
such shares certified by the Corporation by its president or vice president or
by its secretary or an assistant secretary, the redemptive price upon the
surrender of their respective share certificates. Thereafter, from and after
the date fixed for redemption, such shares shall be deemed to be redeemed and
dividends thereon shall cease to accrue after such date fixed for redemption.
Such deposit shall be deemed to constitute full payment of such shares to their
holders. Thereafter, such shares shall no longer be deemed to be outstanding,
and the holders thereof shall cease to be shareholders with respect to such
shares, and shall have no rights with respect thereto except the right to
receive from the
-6-
<PAGE>
bank or trust company payment of the redemptive price of such shares without
interest, upon the surrender of their respective certificates therefor, and any
right to convert such shares which may exist. In case the holders of such shares
shall not, within six (6) years after such deposit, claim the amount deposited
for redemption thereof, such bank or trust company shall upon demand pay over to
the Corporation the balance of such amount so deposited to be held in trust and
such bank or trust company shall thereupon be relieved of all responsibility to
the holders thereof.
If as of the date fixed for redemption of the Preferred Stock called for
redemption, the amount deposited for the redemption thereof exceeds the
aggregate redemption price of all such shares being redeemed, any such excess
shall be paid back to the Corporation.
If and so long as there shall exist any default in the payment of dividends
on any series of Preferred Stock or any default in respect of any sinking fund
or purchase fund for the redemption or purchase of shares of Preferred Stock of
any series, the Corporation shall not (other than by the use of unapplied funds,
if any, paid into or set aside for a sinking fund or purchase fund prior to such
default) (a) redeem any shares of the Preferred Stock unless all the then
outstanding shares of Preferred Stock are redeemed, or (b) purchase, retire or
otherwise acquire for a consideration any shares of the Preferred Stock except
pro rata pursuant to offers of sale made by holders of the Preferred Stock in
response to an invitation for tenders given simultaneously by the Corporation by
mail to the holders of record of all shares of the Preferred Stock then
outstanding.
Section 4.1.5. Liquidation or Dissolution. In the event of any
liquidation, dissolution or winding up of the affairs of the Corporation, then,
before any distribution or payment shall be made to the holders of the Common
Stock or any other class of stock of the Corporation ranking junior to the
Preferred Stock in respect of dividends or distribution of assets upon
-7-
<PAGE>
liquidation, the holders of the Preferred Stock of the respective series shall
be entitled to be paid in full, in the event of a voluntary or involuntary
liquidation, dissolution or winding up, the respective amounts fixed for such
series, plus in each case a sum equal to accrued and unpaid dividends thereon to
the date of payment thereof. After such payment shall have been made in full to
the holders of the Preferred Stock, the remaining assets and funds of the
Corporation shall be distributed among the holders of the stock of the
Corporation ranking junior to the Preferred Stock in respect of dividends or
distribution of assets upon liquidation according to their respective rights.
In the event that the assets of the Corporation available for distribution to
holders of Preferred Stock shall not be sufficient to make the payment herein
required to be made in full, such assets shall be distributed to the holders of
the respective shares of Preferred Stock pro rata in proportion to the amounts
pay able upon such share thereof. Neither the merger or consolidation of the
Corporation into or with another corporation nor the merger or consolidation of
any other corporation into or with the Corporation, shall be deemed to be a
liquidation, dissolution or winding up of the Corporation within the meaning of
this Section 4.1.5., but the sale, lease or conveyance of all or substantially
all of its assets shall be deemed to be a liquidation, dissolution or winding up
of the Corporation within the meaning of this Section 4.1.5.
Section 4.1.6. Status of Shares Redeemed or Retired. Preferred
Stock redeemed or otherwise retired by the Corporation shall, upon the filing of
such statement as may be required by law, assume the status of authorized but
unissued Preferred Stock and may thereafter be reissued in the same manner as
other authorized but unissued Preferred Stock.
Section 4.1.7. Amendments. Subject to such requirements as may be
prescribed by law or as may be expressly set forth in the foregoing provisions
of this Section 4.1. or in any
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<PAGE>
resolution establishing and designating a series of shares of Preferred Stock,
any of the foregoing terms and provisions of this Section 4.1. may be altered,
amended or repealed or the application thereof suspended or waived in any
particular case and changes in any of the designations, preferences, limitations
and relative rights of the Preferred Stock may be made with the affirmative
vote, at a meeting called for the purpose, or the written consent with or
without a meeting, of the holders of at least two-thirds of the then issued and
outstanding shares of Preferred Stock; provided that neither the rate of
dividend nor the amount payable upon the redemption or in the event of voluntary
or involuntary liquidation on any share of Preferred Stock be reduced without
the consent of the holders thereof.
Section 4.2. Common Stock.
Section 4.2.1. Dividends. Subject to the prior and superior rights
of the Preferred Stock, and on the conditions set forth in Section 4.1. of this
Article 4 or in any resolution of the Board of Directors providing for the
issuance of any series of Preferred Stock, and not otherwise, such dividends
(payable in cash, stock or otherwise) as may be determined by the Board of
Directors may be declared and paid on the Common Stock from time to time out of
any funds legally available therefor.
Section 4.2.2. Liquidation or Dissolution. After payment shall have
been made in full to the holders of the Preferred Stock in the event of any
liquidation, dissolution or winding up of the affairs of the Corporation, the
remaining assets and funds of the Corporation shall be distributed pro rata
among the holders of the Common Stock according to their respective shares.
-9-
<PAGE>
Section 4.3. Provisions Applicable to All Classes of Stock.
Section 4.3.1. Pre-emptive Rights. No holder of shares of any class
of the capital stock of the Corporation or any other person shall be entitled to
any pre-emptive rights whatsoever.
Section 4.3.2. Voting Rights. Subject to the voting rights
expressly conferred herein, by law and by the Board of Directors in establishing
and fixing the relative rights and preferences of the shares of any series of
Preferred Stock, the holders of the Common Stock shall exclusively possess full
voting power for the election of directors and for all other purposes. Except
as otherwise provided herein, by law, or by the Board of Directors in
establishing and fixing the relative rights and preferences of the shares of any
series of Preferred Stock, in any case where the holders of Preferred Stock
possess voting rights, the Common Stock and Preferred Stock together shall vote
as one class.
Section 4.3.3. Noncumulative Voting. Cumulative voting shall not be
permitted.
ARTICLE 5.
The Corporation will not commence business until it has received for the
issuance of its shares consideration of the value of at least $1,000.00,
consisting of money, labor done or property actually received.
ARTICLE 6.
Without necessity for action by its shareholders, the Corporation may
purchase, directly or indirectly, its own shares to the extent of the aggregate
of unrestricted capital surplus available therefor and unrestricted reduction
surplus available therefor.
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ARTICLE 7.
No contract or other transaction between the Corporation and one or more of
its directors, officers or securityholders or between the Corporation and
another corporation, partnership, joint venture, trust or other enterprise of
which one or more of the Corporation's directors, officers or securityholders
are members, officers, securityholders, directors or employees or in which they
are otherwise interested, directly or indirectly, shall be invalid solely
because of such relationship, or solely because such director, officer or
securityholder is present at or participates in the meeting of the Board of
Directors or committee thereof which authorizes the contract or other
transaction, or solely because his or their votes are counted for such purpose,
if: (a) the material facts as to his relationship or interest and as to the
contract or other transaction are known or disclosed to the Board of Directors
or committee thereof, and such board or committee in good faith authorizes the
contract or other transaction by the affirmative votes of a majority of the
disinterested directors even though the disinterested directors be less than a
quorum; or (b) the material facts as to his relationship or interest and as to
the contract or other transaction are known or disclosed to the shareholders
entitled to vote thereon, and the contract or other transaction is specifically
approved in good faith by vote of the shareholders; or (c) the contract or other
transaction is fair as to the Corporation as of the time it is authorized,
approved or ratified by the Board of Directors, a committee thereof, or the
shareholders.
ARTICLE 8.
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
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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 contenders 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
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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.
ARTICLE 9.
In performing his duties, a director of the Corporation 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 or more officers or employees of the Corporation whom the director
reasonably believes to be reliable and competent in the matters presented, (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, or (c) a committee of the Board of Directors upon which he does not
serve, duly designated in accordance with a provision of the by-laws, as to
matters within its designated authority, which committee the director deems to
merit confidence, but he shall not be considered to be acting in good faith if
he has knowledge concerning the matter in question that would cause such
reliance to be unwarranted. A person who so performs his duties shall have no
liability to the Corporation (whether asserted directly or derivatively) by
reason of being or having been a director of the Corporation.
ARTICLE 10.
The address of the registered office of the Corporation is 15000 Northwest
Freeway, Houston, Texas 77040, the name of the registered agent of the
Corporation at such address is George Martinez.
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ARTICLE 11.
The Board of Directors consists of fifteen (15) members who shall serve as
directors until their respective successors shall have been elected and
qualified, and whose names and addresses are as follows:
Name Address
---- -------
J. Downey Bridgwater 15000 Northwest Freeway
Houston, Texas 77040
C. P. Bryan, Jr. 15000 Northwest Freeway
Houston, Texas 77040
John H. Buck 15000 Northwest Freeway
Houston, Texas 77040
John B. Carter, Jr. 15000 Northwest Freeway
Houston, Texas 77040
James M. Clepper 15000 Northwest Freeway
Houston, Texas 77040
Walter P. Gibbs 15000 Northwest Freeway
Houston, Texas 77040
Bruce J. Harper 15000 Northwest Freeway
Houston, Texas 77040
Glenn H. Johnson 15000 Northwest Freeway
Houston, Texas 77040
James J. Kearney 15000 Northwest Freeway
Houston, Texas 77040
George Martinez 15000 Northwest Freeway
Houston, Texas 77040
Russell I. Orr 15000 Northwest Freeway
Houston, Texas 77040
Christian A. Rasch 15000 Northwest Freeway
Houston, Texas 77040
Steven F. Retzloff 15000 Northwest Freeway
Houston, Texas 77040
Raimundo Riojas 15000 Northwest Freeway
Houston, Texas 77040
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Cuba Wadlington, Jr. 15000 Northwest Freeway
Houston, Texas 77040
IN WITNESS WHEREOF, the undersigned has executed these Restated and
Amended Articles of Incorporation this ___ day of May, 1998.
Sterling Bancshares, Inc.
By: /s/ GEORGE MARTINEZ
----------------------------
George Martinez, Chairman
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EXHIBIT 4.3
STERLING BANCSHARES, INC.
1994 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED)
SECTION 1. Purpose of the Plan.
The Sterling Bancshares, Inc. 1994 Stock Incentive Plan, as hereby amended
and restated (the "Plan"), is intended to promote the interests of Sterling
Bancshares, Inc., a Texas corporation (the "Company"), by encouraging officers
and other employees of the Company and its Subsidiaries to acquire or increase
their equity interest in the Company and to provide a means whereby they may
develop a sense of proprietorship and personal involvement in the development
and financial success of the Company, and to encourage them to remain with and
devote their best efforts to the business of the Company thereby advancing the
interests of the Company and its stockholders. The Plan is also contemplated to
enhance the ability of the Company and its Subsidiaries to attract and retain
the services of individuals who are essential for the growth and profitability
of the Company.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth
below:
"Award" shall mean an Option, Restricted Stock, Performance Award, Phantom
Shares, Bonus Shares, or Other Stock-Based Award.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Bonus Shares" shall mean an award of Shares granted pursuant to Section
6(d) of the Plan.
"Change in Control" shall mean, and shall be deemed to have occurred if:
(i) any person, other than the Company or any benefit plan of the
Company, acquires, directly or indirectly, the beneficial ownership (as
defined in Section 13(d) of the Exchange Act) of any voting security of the
Company and immediately after such acquisition such person is, directly or
indirectly, the beneficial owner of voting securities representing 35% or
more of the total voting power of all of the then-outstanding voting
securities of the Company;
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(ii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization or reorganization of the Company, or a
reverse stock split of outstanding voting securities, or consummation of
any such transaction if stockholder approval is not obtained, other than
any such transaction which would result in at least 75% of the total voting
power represented by the voting securities of the surviving entity
outstanding immediately after such transaction being beneficially owned by
at least 75% of the holders of outstanding voting securities of the Company
immediately prior to the transactions with the voting power of each such
continuing holder relative to other such continuing holders not
substantially altered in the transaction; or
(iii) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of 50% or more of the total assets of the Company; or
(iv) the individuals who constitute the Board as of April 23, 1998
(the "Incumbent Board") shall cease for any reason to constitute at least a
majority of the members of the Board, provided that any person becoming a
director after the effective date of the Plan whose election, or nomination
for election by the Company's stockholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
(other than any individual whose nomination for election to Board
membership was not endorsed by the Company's management prior to, or at the
time of, such individual's initial nomination for election) shall be, for
purposes of this Plan, considered as though such person were a member of
the Incumbent Board.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations thereunder.
"Committee" shall mean the Compensation Committee of the Board or any other
committee of the Board designated, from time to time, by the Board to act as the
Committee under the Plan.
"Employee" shall mean any employee of the Company or a Subsidiary.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Fair Market Value" shall mean, as of any applicable date, the average
between the high and low sales price for a Share on the Nasdaq Stock Market as
reported by Bloomberg Financial Markets, or any successor reporting system then
in use, unless the Shares are listed on a national securities exchange, in which
case it shall mean the closing sales price on such exchange as reported by
Bloomberg Financial Markets; provided, however, that if Shares shall not have
been quoted or traded on such date, Fair Market Value shall be determined based
on the next preceding date on which they were quoted or traded, or, if deemed
appropriate by the Committee, in such other manner as it may deem appropriate.
In no event shall the fair market value of any Share be less than its par value.
In the event the Shares are not publicly traded at the time a determination of
its fair market value is
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required to be made hereunder, the determination of fair market value shall be
made in good faith by the Committee.
"Incentive Stock Option" or "ISO" shall mean an option granted under
Section 6(a) of the Plan that is intended to qualify as an "incentive stock
option" under Section 422 of the Code or any successor provision thereto.
"Non-Qualified Stock Option" or "NQO" shall mean an option granted under
Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
"Other Stock-Based Award" shall mean an award granted pursuant to Section
6(f) of the Plan that is not otherwise specifically provided for, the value of
which is based in whole or in part upon the value of a Share.
"Participant" shall mean any Employee granted an Award under the Plan.
"Performance Award" shall mean any right granted under Section 6(c) of the
Plan.
"Person" shall mean individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.
"Phantom Shares" shall mean an Award of the right to receive Shares issued
at the end of a Restricted Period which is granted pursuant to Section 6(e) of
the Plan.
"Restricted Period" shall mean the period established by the Committee with
respect to an Award during which the Award either remains subject to forfeiture
or is not exercisable by the Participant.
"Restricted Stock" shall mean any Share, prior to the lapse of restrictions
thereon, granted under Section 6(b) of the Plan.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under the
Exchange Act, or any successor rule or regulation thereto as in effect from time
to time.
"SEC" shall mean the Securities and Exchange Commission, or any successor
thereto.
"Shares" or "Common Shares" or "Common Stock" shall mean the common stock
of the Company, $1.00 par value, and such other securities or property as may
become the subject of Awards of the Plan.
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"Subsidiary" shall mean any "subsidiary corporation" of the Company as
defined in Section 424 of the Code.
SECTION 3. Administration.
The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the acts of the members of the
Committee who are present at any meeting thereof at which a quorum is present,
or acts unanimously approved by the members of the Committee in writing, shall
be the acts of the Committee. Subject to the terms of the Plan and applicable
law, and in addition to other express powers and authorizations conferred on the
Committee by the Plan, the Committee shall have full power and authority to: (i)
designate Participants; (ii) determine the type or types of Awards to be granted
to a Participant; (iii) determine the number of Shares to be covered by, or with
respect to which payments, rights, or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Shares, other securities, other Awards or other
property, or canceled, forfeited, or suspended and the method or methods by
which Awards may be settled, exercised canceled, forfeited, or suspended; (vi)
determine whether, to what extent, and under what circumstances cash, Shares,
other securities, other Awards, other property, and other amounts payable with
respect to an Award shall be deferred either automatically or at the election of
the holder thereof or of the Committee; (vii) interpret and administer the Plan
and any instrument or agreement relating to an Award made under the Plan; (viii)
establish, amend, suspend, or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (ix) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, any Subsidiary, any Participant, any holder or
beneficiary of any Award, any stockholder and any Employee.
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section 4(c),
the number of Shares with respect to which Awards may be granted under the Plan
shall be 2,000,000. If any Award is forfeited or otherwise terminates or is
canceled without the delivery of Shares or other consideration, then the Shares
covered by such Award, to the extent of such forfeiture, termination or
cancellation, shall again be Shares with respect to which Awards may be granted.
(b) Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.
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(c) Adjustments. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares such
that an adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Committee shall, in such manner as
it may deem equitable, adjust any or all of (i) the number and type of Shares
(or other securities or property) with respect to which Awards may be granted,
(ii) the number and type of Shares (or other securities or property) subject to
outstanding Awards, and (iii) the grant or exercise price with respect to any
Award or, if deemed appropriate, make provision for a cash payment to the holder
of an outstanding Award; provided, that the number of Shares subject to any
Award denominated in Shares shall always be a whole number. If the Company is
about to (i) be merged into, acquired by or consolidated with another
corporation or other entity under circumstances where the Company will not be
the surviving corporation or will survive as a subsidiary, or (ii) to sell or
otherwise dispose of substantially all of its assets to another corporation or
other entity, then the Committee may direct, if the successor entity is willing
to assume the obligation to deliver shares of stock or other securities after
the effective date of the merger, acquisition, consolidation or sale of assets,
as the case may be, that each holder of an outstanding Award shall be entitled
to receive, upon the exercise or payment thereof, in lieu of Shares, such shares
of stock or other securities as the holder of such Award would have been
entitled to receive had such Award been exercised or paid immediately prior to
the consummation of such merger, acquisition, consolidation or sale, and, with
respect to an option, the terms of such assumed or replacement option shall
apply as nearly as practicable to the shares of stock or other securities
purchasable upon exercise of the option following such merger, acquisition
consolidation or sale of assets.
SECTION 5. Eligibility.
Any Employee shall be eligible to be designated a Participant by the
Committee.
SECTION 6. Awards.
(a) Options. Subject to the provisions of the Plan, the Committee shall
have the authority to determine the Employees to whom Options shall be granted,
the number of Shares to be covered by each Option (no Employee may receive
Options with respect to more than 100,000 Shares during any calendar year), the
purchase price therefor and the conditions and limitations applicable to the
exercise of the Option, including the following terms and conditions and such
additional terms and conditions, as the Committee shall determine, that are not
inconsistent with the provisions of the Plan.
(i) Exercise Price. The purchase price per Share purchasable under an
Option shall be determined by the Committee at the time the Option is
granted, but shall not be less than the Fair Market Value per Share on such
date.
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(ii) Time and Method of Exercise. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part, and
the method or methods by which, and the form or forms (which may include,
without limitation, cash, check acceptable to the Company, Shares already-
owned for more than six months, a "cashless-broker" exercise (through
procedures approved by the Company), other securities or other property, a
note, or any combination thereof, having a Fair Market Value on the
exercise date equal to the relevant exercise price) in which payment of the
exercise price with respect thereto may be made or deemed to have been
made.
(iii) Incentive Stock Options. The terms of any Incentive Stock Option
granted under the Plan shall comply in all respects with the provisions of
Section 422 of the Code, or any successor provision, and any regulations
promulgated thereunder.
(b) Restricted Stock. Subject to the provisions of the Plan, the Committee
shall have the authority to determine the Employees to whom Restricted Stock
shall be granted, the number of Shares of Restricted Stock to be granted to each
such Participant, the duration of the Restricted Period during which, and the
conditions, including the performance criteria, if any, under which, the
Restricted Stock may be forfeited to the Company, and the other terms and
conditions of such Awards.
(i) Dividends. Dividends paid on Restricted Stock may be paid
directly to the Participant, may be subject to risk of forfeiture and/or
transfer restrictions during any period established by the Committee or
sequestered and held in a bookkeeping cash account (with or without
interest) or reinvested on an immediate or deferred basis in additional
shares of Common Stock, which credit or shares may be subject to the same
restrictions as the underlying Award or such other restrictions, all as
determined by the Committee in its discretion.
(ii) Registration. Any Restricted Stock may be evidenced in such
manner as the Committee shall deem appropriate, including, without
limitation, book-entry registration or issuance of a stock certificate or
certificates. In the event any stock certificate is issued in respect of
Restricted Stock granted under the Plan, such certificate shall be
registered in the name of the Participant and shall bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to
such Restricted Stock.
(iii) Forfeiture and Restrictions Lapse. Except as otherwise
determined by the Committee or the terms of the Award Agreement that
granted the Restricted Stock, upon termination of a Participant's
employment (as determined under criteria established by the Committee) for
any reason (other than a Change in Control) during the applicable
Restricted Period, all Restricted Stock shall be forfeited by the
Participant and re-acquired by the Company. The Committee may, when it
finds that a waiver would be in the best interests of the Company and not
cause such Award, if it is intended to qualify as performance based
compensation under Section 162(m) of the Code, to fail to so qualify under
Section 162(m) of the Code, waive in whole or in part any or all remaining
restrictions with respect to such
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Participant's Restricted Stock. Unrestricted Shares, evidenced in such
manner as the Committee shall deem appropriate, shall be issued to the
holder of Restricted Stock promptly after the applicable restrictions have
lapsed or otherwise been satisfied.
(iv) Transfer Restrictions. During the Restricted Period, Restricted
Stock will be subject to the limitations on transfer as provided in Section
6(g)(ii).
(v) Limit. The maximum number of Shares of Restricted Stock that may
be granted to any Participant during any year shall not exceed 100,000
Shares.
(c) Performance Awards. The Committee shall have the authority to
determine the Employees who shall receive a Performance Award, which shall be
denominated as a cash amount at the time of grant and confer on the Participant
the right to receive payment of such Award, in whole or in part, upon the
achievement of such performance goals during such performance periods as the
Committee shall establish with respect to the Award.
(i) Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the performance
goals to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award and the amount of
any payment or transfer to be made pursuant to any Performance Award.
(ii) Payment of Performance Awards. Performance Awards may be paid
(in cash and/or in Shares, in the sole discretion of the Committee) in a
lump sum or in installments following the close of the performance period,
in accordance with procedures established by the Committee with respect to
such Award.
(iii) Limit. The maximum number of Performance Awards that may be
granted to any Participant during any year shall not exceed $1 million.
(d) Bonus Shares. The Committee shall have the authority, in its
discretion, to grant Bonus Shares to Employees. Each Bonus Share shall
constitute a transfer of an unrestricted Share to the Participant, without other
payment therefor.
(e) Phantom Shares. The Committee shall have the authority to grant Awards
of Phantom Shares to Employees upon such terms and conditions as the Committee
may determine.
(i) Terms and Conditions. Each Phantom Share Award shall constitute
an agreement by the Company to issue or transfer a specified number of
Shares or pay an amount of cash equal to a specified number of Shares, or a
combination thereof to the Participant in the future, subject to the
fulfillment during the Restricted Period of such conditions, including
performance objectives, if any, as the Committee may specify at the date of
grant. During the Restricted Period, the Participant shall not have any
right to transfer any rights under the
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subject Award, shall not have any rights of ownership in the Phantom Shares
and shall not have any right to vote such shares.
(ii) Dividends. Any Phantom Share award may provide, in the discretion
of the Committee, that any or all dividends or other distributions paid on
Shares during the Restricted Period be credited in a cash bookkeeping
account (without interest) or that equivalent additional Phantom Shares be
awarded, which account or shares may be subject to the same restrictions as
the underlying Award or such other restrictions as the Committee may
determine.
(iii) Limit. The maximum number of Phantom Shares that may be awarded
to any Participant during any year shall not exceed 100,000 Phantom Shares.
(f) Other Stock-Based Awards. The Committee may also grant to Employees an
Other Stock-Based Award, which shall consist of a right which is an Award
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares as is deemed by the Committee to be
consistent with the purposes of the Plan. Subject to the terms of the Plan, the
Committee shall determine the terms and conditions of any such Other Stock-Based
Award. The maximum number of Shares with respect to which an Employee may be
granted an Other Stock-Based Award during any year shall not exceed 100,000
Shares.
(g) General.
(i) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with, or in substitution for any other Award granted under the Plan
or any award granted under any other plan of the Company or any Subsidiary.
Awards granted in addition to or in tandem with other Awards or awards
granted under any other plan of the Company or any Subsidiary may be
granted either at the same time as or at a different time from the grant of
such other Awards or awards.
(ii) Limits on Transfer of Awards.
(A) Except as provided in (C) below, each Award, and each right
under any Award, shall be exercisable only by the Participant during
the Participant's lifetime, or, if permissible under applicable law,
by the Participant's guardian or legal representative as determined by
the Committee.
(B) Except as provided in (C) below, no Award and no right under
any such Award may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Participant otherwise than
(i) by will or by the laws of descent and distribution or (ii)
pursuant to a qualified domestic relations order, and any such
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purported prohibited assignment, alienation, pledge, attachment, sale,
transfer or encumbrance shall be void and unenforceable against the
Company or any Subsidiary.
(C) To the extent specifically provided by the Committee with
respect to a grant, a Nonqualified Stock Option may be transferred to
immediate family members or related family trusts, limited
partnerships or similar entities or Persons on such terms and
conditions as the Committee may establish.
(iii) Term of Awards. The term of each Award shall be for such period
as may be determined by the Committee; provided, that in no event shall the
term of any Award exceed a period of 10 years from the date of its grant.
(iv) Share Certificates. All certificates for Shares or other
securities of the Company or any Subsidiary delivered under the Plan
pursuant to any Award or the exercise thereof shall be subject to such stop
transfer orders and other restrictions as the Committee may deem advisable
under the Plan or the rules, regulations, and other requirements of the
SEC, any stock exchange upon which such Shares or other securities are then
listed, and any applicable federal or state laws, and the Committee may
cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(v) Consideration for Grants. Awards may be granted for no cash
consideration or for such consideration as the Committee determines
including, without limitation, such minimal cash consideration as may be
required by applicable law.
(vi) Delivery of Shares or other Securities and Payment by Participant
of Consideration. No Shares or other securities shall be delivered
pursuant to any Award until payment in full of any amount required to be
paid pursuant to the Plan or the applicable Award Agreement (including,
without limitation, any exercise price, or tax withholding) is received by
the Company. Such payment may be made by such method or methods and in
such form or forms as the Committee shall determine, including, without
limitation, cash, Shares, other securities, other Awards or other property,
withholding of Shares, cashless exercise with simultaneous sale, or any
combination thereof, provided that the combined value, as determined by the
Committee, of all cash and cash equivalents and the Fair Market Value of
any such Shares or other property so tendered to the Company, as of the
date of such tender, is at least equal to the full amount required to be
paid pursuant to the Plan or the applicable Award Agreement to the Company.
(vii) Performance Criteria. The Committee shall establish performance
goals applicable to those Awards (other than Options) the payment of which
is intended by the Committee to qualify as "performance-based compensation"
as described in Section 162(m)(4)(C) of the Code. The performance goals
shall be based upon the attainment of such target levels of net income,
cash flows, return on equity, profits, stock price, return on assets,
loans, deposits, earnings per Share and classified or nonperforming loans
as may be specified
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by the Committee. Such targets (other than stock price and earnings per
Share) may be expressed in terms of the Company, a Subsidiary, or a bank
office, as determined by the Committee. Which factor or factors to be used
with respect to any grant, and the weight to be accorded thereto if more
than one factor is used, shall be determined by the Committee, in its sole
discretion, at the time of grant.
SECTION 7. Amendment and Termination.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(i) Amendments to the Plan. The Board or the Committee may amend,
alter, suspend, discontinue, or terminate the Plan without the consent of
any stockholder, Participant, other holder or beneficiary of an Award, or
other Person; provided, however, notwithstanding any other provision of the
Plan or any Award Agreement, without the approval of the stockholders of
the Company no such amendment, alteration, suspension, discontinuation, or
termination shall be made that would increase the total number of Shares
available for Awards under the Plan, except as provided in Section 4(c) of
the Plan.
(ii) Amendments to Awards. The Committee may waive any conditions or
rights under, amend any terms of, or alter any Award theretofore granted,
provided no change in any Award shall reduce the benefit to Participant
without the consent of such Participant. Notwithstanding the foregoing,
with respect to any Award intended to qualify as performance-based
compensation under Section 162(m) of the Code, no adjustment shall be
authorized to the extent such adjustment would cause the Award to fail to
so qualify.
SECTION 8. Change in Control.
Notwithstanding any other provision of this Plan to the contrary, in the
event of a Change in Control all outstanding Awards automatically shall become
fully vested immediately prior to such Change in Control (or such earlier time
as set by the Committee), all restrictions, if any, with respect to such Awards
shall lapse, including, without limitation, any service, longevity or year-end
employment requirements, and all performance criteria, if any, with respect to
such Awards shall be deemed to have been met in full to the maximum extent
without regard to any proration provisions in such Award or Award Agreement.
SECTION 9. General Provisions.
(a) No Rights to Awards. No Participant or other Person shall have any
claim to be granted any Award, there is no obligation for uniformity of
treatment of Participants, or holders or beneficiaries of Awards and the terms
and conditions of Awards need not be the same with respect to each recipient.
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(b) Tax Withholding. The Company or any Subsidiary is authorized to
withhold from any Award, from any payment due or transfer made under any Award
or under the Plan or from any compensation or other amount owing to a
Participant the amount (in cash, Shares, other securities, Shares that would
otherwise be issued pursuant to such Award, other Awards or other property) of
any applicable taxes payable in respect of an Award, its exercise, the lapse of
restrictions thereon, or any payment or transfer under an Award or under the
Plan and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such taxes. In addition,
the Committee may provide, in an Award Agreement, that the Participant may
direct the Company to satisfy such Participant's tax obligation through the
withholding of Shares otherwise to be acquired upon the exercise or payment of
such Award.
(c) No Right to Employment. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of the Company or
any Subsidiary. Further, the Company or a Subsidiary may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.
(d) Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Texas and applicable federal law.
(e) Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without , in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.
(f) Other Laws. The Committee may refuse to issue or transfer any Shares
or other consideration under an Award if, acting in its sole discretion, it
determines that the issuance of transfer or such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.
(g) No Trust or Fund Created. Neither the Plan nor the Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Subsidiary and a Participant or any
other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Subsidiary pursuant to an Award, such right
shall be no greater than the right of any general unsecured creditor of the
Company or any Subsidiary.
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(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any rights
thereto shall be canceled, terminated, or otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not
be deemed in any way material or relevant to the construction or interpretation
of the Plan or any provision thereof.
(j) Tax Gross-Ups. To the extent that the grant, payment, or acceleration
of vesting or payment, whether in cash, Shares or other property, of any Award
made to a Participant under the Plan (a "Benefit") is subject to an excise tax
under Section 4999(a) of the Code (a "Parachute Tax"), the Company shall pay
such person an amount of cash (the "Gross-up Amount") such that the "net after-
tax" Benefit received by the person under this Plan, after paying all applicable
Parachute Taxes (including those on the Gross-up Amount) and any other taxes on
the Gross-up Amount, shall be equal to the net after-tax Benefit that such
person would have received if such Parachute Tax had not been applicable.
SECTION 10. Effective Date of Plan Amendment and Restatement.
This amendment and restatement of the Plan shall be effective as of the
date of its approval by the stockholders of the Company. All previously granted
Awards outstanding on the effective date of this amendment and restatement of
the Plan shall thereafter be subject to the terms of the amended and restated
Plan as if such Award had been directly amended, except where such "deemed"
amendment would cause any outstanding Incentive Stock Option to cease to qualify
as such.
SECTION 11. Term of the Plan.
No Award shall be granted under the Plan after April 18, 2004. However,
unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award granted prior to such termination, and the authority of the
Board or the Committee to amend, alter, adjust, suspend, discontinue, or
terminate any such Award or to waive any conditions or rights under such Award,
shall extend beyond such termination date.
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EXHIBIT 5.1
[Letterhead of Andrews & Kurth L.L.P.]
[Houston, Texas 77002]
June 17, 1998
Board of Directors
Sterling Bancshares, Inc.
15000 Northwest Freeway
Houston, Texas 77040
Gentlemen:
We have acted as counsel to Sterling Bancshares Inc. (the "Company") in
connection with the Company's Post-Effective Amendment No. 1 to Registration
Statement on Form S-8 (the "Registration Statement") relating to the
registration under the Securities Act of 1933, as amended, of the issuance of an
additional 1,421,875 shares (the "Shares") of the Company's common stock, par
value $1.00 per share, pursuant to the Sterling Bancshares, Inc. 1994 Stock
Incentive Plan, as amended and restated (the "Plan").
In connection therewith, we have examined the Registration Statement,
copies of such statutes, regulations, corporate records and documents,
certificates of public and corporate officials and other agreements, contracts,
documents and instruments as we have deemed necessary as a basis for the opinion
hereinafter expressed. In such examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals
and the conformity with the original documents of all documents submitted to us
as copies. We have also relied, to the extent we deem such reliance proper,
upon information supplied by officers and employees of the Company with respect
to various factual matters material to our opinion.
Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares have
been duly authorized, and that such Shares will, when issued in accordance with
the terms of the Plan, be validly issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Andrews & Kurth L.L.P.
1198/1249/2691
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EXHIBIT 23.1
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Post-Effective Amendment
No. 1 to Registration Statement No. 33-84398 of Sterling Bancshares, Inc. on
Form S-8 of our report dated March 9, 1998, appearing in the Annual Report
on Form 10-K of Sterling Bancshares, Inc. for the year ended December 31, 1997.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Houston, Texas
June 17, 1998
