Exhibit 10.2

 

FORM OF

SEVERANCE AND NON-COMPETITION AGREEMENT

 

Sterling Bancshares, Inc. and Sterling Bank have entered into the following
Severance and Non-Competition Agreement with the officers identified on the
Schedule attached hereto. The individual Severance and Non-Competition
Agreements are identical to the Form of Severance and Non-Competition Agreement
except as otherwise disclosed on the attached Schedule.

 

THIS SEVERANCE and NON-COMPETITION AGREEMENT (the “Agreement”) is entered into
effective as of this              day of             , 2004 by and among
Sterling Bancshares, Inc., a Texas corporation (“Bancshares”), Sterling Bank, a
banking association chartered by the State of Texas and an indirect subsidiary
of Bancshares (“Bank”) and              (the “Executive Officer”).

 

WHEREAS, the Executive Officer has heretofore been employed by Bancshares and/or
Bank in a position in which he/she has had access to, and gained knowledge of,
confidential and proprietary information of Bancshares, Bank, Sterling
Bancorporation, Inc. and their respective affiliates (each, a “Sterling Entity,”
and together, the “Sterling Entities”), and the parties wish to ensure that the
Executive Officer continues to enjoy access to the Sterling Entities’ existing
and future confidential and proprietary information;

 

WHEREAS, the Sterling Entities’ confidential and proprietary information
constitutes a substantial asset of the Sterling Entities that the parties
mutually wish to protect;

 

WHEREAS, the Executive Officer is already subject to certain confidentiality
obligations under Texas law, and the parties reasonably believe that it would be
difficult, if not impossible, for the Executive Officer to refrain from using or
disclosing the confidential and proprietary information of the Sterling Entities
in the event that the Executive Officer were to work for any other financial
institution within twelve (12) months after terminating his/her employment with
Bancshares and/or the Bank;

 

WHEREAS, the parties mutually desire to achieve a level of certainty and
predictability concerning the post-employment activities the Executive Officer
may perform, and when;

 

WHEREAS, the parties mutually desire to compensate the Executive Officer for any
restriction on his ability to engage in certain competitive activities; and

 

WHEREAS, the parties mutually desire to ensure that the Executive Officer
receives certain severance benefits in the event that his/her employment is
terminated by Bancshares and Bank without cause, or following a “Change of
Control” (as herein defined) under the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and the premises,
representations, and mutual covenants hereinafter set forth, the parties do
hereby agree as follows:

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1. Definitions. The following words and terms shall have the meanings set forth
below for purposes of this Agreement:

 

(a) Cause. A termination of employment is for “Cause” only if it is due to:

 

(i) serious intentional misconduct on the part of the Executive Officer;

 

(ii) fraud, misappropriation or embezzlement related to any of the Sterling
Entities on the part of the Executive Officer;

 

(iii) the conviction of the Executive Officer of any felony or crime involving
moral turpitude;

 

(iv) a material violation by the Executive Officer of any applicable federal or
state banking law or regulation that has had, or may have, a material adverse
effect on any Sterling Entity;

 

(v) a material breach of any corporate policy including, without limitation, the
Code of Business Conduct and Ethics and the Code of Ethics for Senior Officers,
as applicable to the Executive Officer which, if correctable, remains
uncorrected for 30 days following written notice to the Executive Officer by a
Sterling Entity of such breach;

 

(vi) a material breach of this Agreement which, if correctable, remains
uncorrected for 30 days following written notice to the Executive Officer by a
Sterling Entity of such breach; or

 

(vii) the willful and continued failure by the Executive Officer to perform
substantially the Executive Officer’s duties on behalf of any Sterling Entity,
other than any such failure resulting from the Executive Officer’s incapacity
due to Disability, which failure is not promptly abated after a demand for
substantial performance is delivered to the Executive Officer by Bancshares or
other applicable Sterling Entity that specifically identifies the manner in
which the Executive Officer has not substantially performed the Executive
Officer’s duties and gives the Executive Officer a reasonable period of cure.

 

For purposes of this definition, any act or failure to act on the Executive
Officer’s part shall be considered “willful” if done or omitted to be done by
the Executive Officer otherwise than in good faith and without reasonable belief
that the Executive Officer’s action or omission was in the best interest of the
Sterling Entities.

 

(b) Change of Control. A “Change of Control” shall be deemed to have occurred
if:

 

(i) any “person” or “group” (within the meanings of Sections 13(d) or 14(d)(2)
of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of securities of Bancshares representing thirty-five percent (35%)
or

 

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more of the combined voting power of Bancshares’ then outstanding securities
eligible to vote for the election of the board of directors of Bancshares (the
“Bancshares Voting Securities”); provided, however, that the event described in
this paragraph (i) shall not be deemed to be a Change of Control by virtue of
any of the following acquisitions: (A) by Bancshares, (B) by any employee
benefit plan (or related trust) sponsored or maintained by Bancshares, (C) by
any underwriter temporarily holding securities pursuant to an offering of such
securities, or (D) pursuant to a Non-Qualifying Transaction (as defined in
paragraph (ii) below);

 

(ii) the consummation of a merger, consolidation, share exchange or similar form
of corporate transaction involving Bancshares that requires the approval of
Bancshares’ shareholders, whether for such transaction or the issuance of
securities in the transaction (a “Business Combination”), unless immediately
following such Business Combination: (A) more than seventy-five percent (75%) of
the total voting power of (x) the corporation resulting from such Business
Combination (the “Surviving Corporation”), or (y) if applicable, the ultimate
parent corporation that directly or indrectly has beneficial ownership of 100%
of the voting securities eligible to elect directors of the Surviving
Corporation (the “Parent Corporation”), is represented by Bancshares Voting
Securities that were outstanding immediately prior to such Business Combination
(or if applicable, is represented by shares into which such Bancshares Voting
Securities were converted pursuant to such Business Combination), and such
voting power among the holders thereof is in substantially the same proportion
of the voting power of such Bancshares Voting Securities among the holders
thereof immediately prior the Business Combination, (B) no person (other than
any employee benefit plan (or related trust) sponsored or maintained by the
Surviving Corporation or the Parent Corporation), is or becomes the beneficial
owner, directly or indrectly, of fifty-percent (50%) or more of the total voting
power of the outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) and (C) at least the majority of the board of directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the Business Combination were
Incumbent Directors (as herein defined) at the time the board of directors of
Bancshares approved the execution of the initial agreement providing for such
Business Combination (any Business Combination which satisfies all of the
criteria specified in (A), (B) and (C) above shall be deemed to be a
“Non-Qualifying Transaction”);

 

(iii) the individuals who constitute the board of directors of Bancshares as of
the date of this Agreement (the “Incumbent Directors”) shall cease for any
reason to constitute at least a majority of the members of the board of
directors of Bancshares, provided that any person becoming a director subsequent
to the date of this Agreement, whose election or nomination was approved by a
vote of at least a majority of the Incumbent Directors then comprising the board
of directors of Bancshares shall be, for purposes of this Agreement, considered
an Incumbent Director; provided, however, that no individual initially elected
or nominated as a

 

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director of Bancshares as a result of an actual or threatened contest with
respect to directors or as a result of any other actual or threatened
solicitation of proxies (or consents) by or on behalf of any person other than
the board of directors shall be deemed to be an Incumbent Director;

 

(iv) the consummation of a sale of all or substantially all of the assets of
Bancshares; or

 

(v) the shareholders of Bancshares shall approve a plan of complete liquidation
or dissolution of Bancshares.

 

(c) Change of Control Termination. A “Change of Control Termination” shall mean
the termination of the Executive Officer’s employment with the Sterling
Entities, within a two-year period commencing on the effective date of a Change
of Control, due to (i) an Involuntary Termination or (ii) a termination for Good
Reason.

 

(d) Disability. “Disability” means the Executive Officer’s permanent and total
disability as defined in any long-term disability plan sponsored by Bancshares
and applicable to the Executive Officer or in the absence of any such long-term
disability plan, the term “Disability” shall mean the absence of the Executive
Officer from his or her duties with the Sterling Entities on a full-time basis
for at least twelve (12) consecutive weeks as a result of the Executive
Officer’s incapacity due to illness, accident, injury, physical or mental
incapacity or other disability.

 

(e) General Release of Liability. A “General Release of Liability” means the
legal document in which the Executive Officer, in exchange for benefits under
this Agreement, releases the Sterling Entities, their affiliates, their
directors, officers, employees and agents, their employee benefit plans and the
fiduciaries and agents of said plans from liability and damages in any way
related to the Executive Officer’s employment with or separation from the
Sterling Entities.

 

(f) Good Reason. “Good Reason” means, without the Executive Officer’s express
written consent, the occurrence of any one of the following events after a
Change of Control:

 

(i) (A) any change in the duties or responsibilities of the Executive Officer
that is inconsistent in any material and adverse respect with the Executive
Officer’s position, duties, responsibilities or status with the Sterling
Entities immediately prior to such Change of Control or (B) a material and
adverse change in the Executive Officer’s titles or offices with the Sterling
Entities (or any Parent Corporation or Surviving Corporation) and including, if
applicable, membership or position on a board of directors with Bancshares or
Bank (or their respective successor), as in effect immediately prior to such
Change of Control;

 

(ii) a reduction of ten percent (10%) or more in the Executive Officer’s rate of
annual base salary or annual target bonus opportunity (including any material
and adverse change in the formula for such annual bonus target) as in effect
immediately prior to such Change of Control or as the same may be

 

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increased from time to time thereafter, or the failure of the applicable
Sterling Entity (or any Parent Corporation or Surviving Corporation) to pay any
such amounts when due;

 

(iii) any requirement that the Executive be based anywhere more than twenty-five
(25) miles from the office where the Executive Officer was located at the time
of the Change of Control, if such relocation increases the Executive Officer’s
commute by more than twenty-five (25) miles;

 

(iv) the failure of the Sterling Entities (or any Parent Corporation or
Surviving Corporation) to continue in effect benefits and a total compensation
package including, without limitation, employee benefit plans, compensation
plans, welfare benefit plans, material fringe benefit plans, vacation policies
and other similar benefit plans providing not less than ninety percent (90%) of
the Executive Officer’s total compensation package in the twelve (12) months
immediately preceding the Change of Control; and

 

(v) the failure of Bancshares to obtain the assumption (and, if applicable,
guarantee) agreement from any Surviving Corporation (and, if applicable, Parent
Corporation) as contemplated in Section 13(b).

 

(g) Involuntary Termination. An “Involuntary Termination” means an involuntary
termination of employment of the Executive Officer by the Sterling Entities (or
any successor thereto including a Parent Corporation or Surviving Corporation);
provided, however, that “Involuntary Termination” shall not include termination
of employment by reason of death, Disability or Cause.

 

2. Stock Award. In consideration of the services previously provided by the
Executive and the covenants and agreements contained in Sections 3, 4 and 5 of
this Agreement, Bancshares shall award the Executive Officer             
(            ) shares of Bancshares’ common stock, $1.00 par value, upon
execution of this Agreement. The shares of common stock issued to the Executive
Officer hereunder shall be awarded under the terms of Bancshares’ 2003 Stock
Incentive and Compensation Plan (or any successor plan) and shall not be subject
to any forfeiture or vesting requirements.

 

3. Non-Competition. The Executive Officer shall not, during the time that he/she
is employed by any Sterling Entity and, in the event of a termination of
employment for Cause or a termination of employment by the Executive Officer
without Good Reason, for a period of twelve (12) months after any such
termination:

 

(a) directly or indirectly, own, manage, operate, control, invest or acquire an
equity interest in any financial institution (or any affiliate thereof
including, without limitation, any bank holding company or financial holding
company) with $10 billion or less in assets located or conducting business in
             County, Texas or any of its contiguous counties (the “Territory”)
which competes with the business conducted by any Sterling Entity;

 

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(b) engage in or carry on, either directly or indirectly, whether for himself or
as an employee, officer, director, agent, consultant, proprietor, partner,
stockholder, member, joint venturer, investor, or other paid participant, any
business with, on behalf of or as a financial institution within the Territory
which competes with the business conducted by any Sterling Entity;

 

(c) request or induce any customer, depositor or borrower of any Sterling Entity
or any other person which has a business relationship with any Sterling Entity
to curtail, cancel, or otherwise discontinue its business or relationship with
any such Sterling Entity; or

 

(d) publicly denigrate or in any manner undertake to publicly discredit any of
the Sterling Entities or any person or operation associated with any Sterling
Entity.

 

Notwithstanding the foregoing, nothing contained in this Agreement shall
prohibit the Executive Officer from owning any issue of stock or securities of
any corporation the securities of which are either traded on a national
securities exchange or quoted on the automated quotation system of the National
Association of Securities Dealers, Inc. and which is engaged in a business which
is in competition with any Sterling Entity so long as (i) the Executive Officer
is not deemed to be an “affiliate” of such entity as such term is used in
paragraphs (c) and (d) of Rule 145 under the Securities Act of 1933 and (ii) the
Executive Officer and members of his immediate family do not own or hold more
than one percent (1%) of any voting securities of such entity.

 

4. Non-Solicitation. The Executive Officer shall not, during the time that
he/she is employed by any Sterling Entity, and for a period of twelve (12)
months thereafter, directly or indirectly solicit the employment of any officers
or employees of the Sterling Entities, provided, however, that this Agreement
shall not prohibit (a) any advertisement or general solicitation that is not
specifically targeted at such officers or employees, or (b) soliciting the
employment of any such officer or employee who has been terminated by any
Sterling Entity.

 

5. Confidentiality. The Executive Officer shall never disclose to any person, or
use or otherwise exploit for his/her own benefit or for the benefit of any
person other than a Sterling Entity, any Confidential Information (as defined
below). The Executive Officer shall have no obligation to keep confidential any
Confidential Information if and to the extent disclosure thereof is specifically
required by law, judicial or governmental order or other legal process;
provided, however, that in the event such disclosure is required, the Executive
Officer shall, to the extent reasonably practicable, provide Bancshares with
reasonably prompt notice of such requirement, so that Bancshares may seek an
appropriate protective order or waive compliance with this provision with
respect to such disclosure. In the event that a protective or other remedy is
not obtained, or Bancshares waives compliance with the provisions of this
Section 5, the Executive Officer will furnish only that portion of the
Confidential Information which is legally required and exercise commercially
reasonable efforts to obtain assurances that confidential treatment will be
accorded to the Confidential Information.

 

For purposes of this Agreement, “Confidential Information” shall mean any
confidential information with respect to the conduct or details of the business
of Sterling and any Sterling Entity including, without limitation, information
relating to its commercial and retail banking

 

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services, mortgage banking services, commercial and consumer loans, merchant
credit card services, investments and capital market transactions and
strategies, its methods of operation, customer and borrower lists, customer
account information, deposits, outstanding loans, products (existing and
proposed), prices, fees, costs, plans, technology, inventions, trade secrets,
know-how, software, marketing methods, policies, personnel, suppliers,
competitors, markets or other specialized information or propriety matters of
the Sterling Entities. The term “Confidential Information” does not include, and
there shall be no obligation hereunder with respect to, information that (a) is
generally available to the public on the date of this Agreement or (b) becomes
generally available to the public other than as a result of a disclosure by the
Executive Officer in violation of this Agreement.

 

6. Severance Payments. In the event of an Involuntary Termination by the
Sterling Entities prior to a Change of Control or a Change of Control
Termination, then Bancshares, or its successor, shall pay and provide, or cause
Bank or its successor to pay and provide, in exchange for the execution of a
General Release of Liability the following to the Executive Officer:

 

(a) two (2) years’ base pay payable in equal installments each regular pay
period during the two (2) years following the termination. For purposes of this
calculation, base pay is the rate of annual salary being paid on the day
immediately preceding the termination (or the Change of Control in the event of
a Change of Control Termination);

 

(b) an annual bonus, payable upon each anniversary date of the effective date of
termination, for two (2) years following the termination in an amount equal to
the highest annual bonus amount paid to that particular Executive Officer during
the three (3) years immediately preceding the termination (or the Change of
Control in the event of a Change of Control Termination);

 

(c) a car allowance, or use of company owned vehicle, and the use of a cell
phone provided by Bancshares or Bank for the two (2) years following the
termination if any of these items were being provided to the Executive Officer
immediately prior to the termination (or the Change of Control in the event of a
Change of Control Termination);

 

(d) welfare benefits or, to the extent that such benefits cannot be lawfully
provided or the Executive Officer otherwise does not qualify for coverage, the
cost of providing welfare benefits, such as medical, dental, vision, Employee
Assistance Plan, and flexible spending accounts for the two (2) years following
the termination that are equal to or greater that those provided to the
Executive Officer immediately prior to the termination (or the Change of Control
in the event of a Change of Control Termination);

 

(e) life insurance benefits or, to the extent that such benefits cannot be
lawfully provided or the Executive Officer otherwise does not qualify for
coverage, the cost of providing life insurance benefits for the two (2) years
following the termination that are equal to or greater than those provided to
the Executive Officer immediately prior to the termination (or the Change of
Control in the event of a Change of Control Termination);

 

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(f) club dues paid for the two (2) years following the termination that are
equal to or greater that those provided to the Executive Officer immediately
prior to the termination (or the Change of Control in the event of a Change of
Control Termination);

 

(g) continuation of banking services without service charge or at a reduced
charge for the two (2) years following the termination if any of these banking
products were being utilized by the Executive Officer immediately prior to the
termination (or the Change of Control in the event of a Change of Control
Termination):

 

(h) payment of reasonable and customary business-related expenses incurred
through the last day of active employment if submitted in writing to Bancshares,
Bank or their respective successor within ninety (90) days following the
effective date of termination;

 

(i) payment of up to $20,000 in fees to one or more executive search firms for
purposes of job placement efforts for the Executive Officer for the two (2)
years following the termination;

 

(j) to the extent permitted by applicable law, participation in Bancshares’
Deferred Compensation Program (or similar program if termination follows a
Change of Control) for the two (2) years following the termination;

 

(k) to the extent permitted by applicable law and the applicable terms of any
plan, participation in Bancshares’ Employee Stock Purchase Program (or similar
program if termination follows a Change of Control) for the two (2) years
following the termination;

 

(l) to the extent permitted by applicable law, participation in Bancshares’
Employee Savings Plan (or similar program if termination follows a Change of
Control) for the two (2) years following the termination;

 

(m) to the extent permitted by applicable law and the applicable terms of any
plan, immediate and full vesting upon termination in all Bancshares plans (or
similar plans if termination follows a Change of Control) that require a vesting
period including, without limitation, all unvested contributions to the
Bancshares’ Employee Savings Plan; and

 

(n) to the extent permitted by applicable law and the terms of any applicable
plan, all outstanding stock options shall fully vest and become exercisable and
all restrictions and forfeiture provisions applicable to any outstanding stock
awards shall lapse and terminate.

 

If, following a Change of Control, the Executive Officer is retained by the
Sterling Entities, Surviving Corporation or Parent Corporation, as the case may
be, and a Change of Control Termination occurs within the two-year period
following the effective date of a Change of Control, then the Executive Officer
shall receive the benefits as described above for a period of not less than one
(1) year or the balance of such two (2) year period, whichever is greater,
following the Change of Control. If the Executive Officer accepts an employment
offer from the

 

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Surviving Corporation or Parent Corporation, or otherwise remains employed by a
Sterling Entity following a Change of Control, regardless of whether the
circumstances of such employment would justify a termination of employment by
the Executive Officer for Good Reason, and remains so employed for a period of
two (2) years or more following the effective date of the Change of Control,
then the Executive Officer shall no longer be entitled to terminate his/her
employment for Good Reason and receive any severance benefits under this Section
6 on the basis of a termination for Good Reason. The Executive shall continue to
be entitled to receive severance benefits under this Agreement as a result of an
Involuntary Termination.

 

Notwithstanding any other provision of this Section 6 to the contrary, the
aggregate present value (measured as of the Change of Control) of the benefits
to which the Executive Officer becomes entitled under this Section 6 at the time
of the Executive Officer’s termination of employment will in no event exceed in
amount the dollar amount (the “Benefit Limit”) which yields the Executive
Officer the greatest after-tax amount of benefits under this Section 6 after
taking into account any excise tax imposed under Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”), on the payments and benefits
which are provided to the Executive Officer under this Section 6 or which
constitute other parachute payments. For purposes of applying the Benefit Limit
to the Executive’s benefits under this Section 6, the value of the Executive’s
non-competition covenant under Section 3 shall be determined through independent
appraisal by a nationally-recognized independent accounting firm acceptable to
both the Executive Officer and Bancshares and obtained solely at Bancshares’
cost, and a portion of the Executive Officer’s Section 6 benefits shall, to the
extent of such appraised value, be specifically allocated as reasonable
compensation for the Executive Officer’s non-competition covenant. For purposes
of this paragraph, “Present Value” means the value, determined as of the date of
the Change of Control, of any payment in the nature of compensation to which the
Executive Officer becomes entitled in connection with a Change of Control or the
Executive Officer’s subsequent termination including the benefits to which the
Executive Officer becomes entitled under this Section 6, provided, however, that
such present value of each such payment will be determined in accordance with
the provisions of Section 280G of the Code, utilizing a discount rate equal to
one hundred twenty percent (120%) of the applicable federal rate in effect at
the time of such determination, compounded semi-annually to the effective date
of the change of control. In addition, for purposes of this paragraph of this
Section 6, “Other Parachute Payment” means any payment in the nature of
compensation (other than the benefits to which the Executive Officer becomes
entitled under this Section 6) which are made to the Executive Officer in
connection with the change of control and which qualify as parachute payments
within the meaning of Section 280G(b)(2) and the Treasury Regulations issued
thereunder.

 

7. Other Agreements.

 

(a) Subject to the immediately following sentence, the parties to this Agreement
further agree that to the extent the restrictive covenants and agreements
contained in Sections 3, 4 or 5 are held by any court or other constituted legal
authority to be void or otherwise unenforceable in any particular area or
jurisdiction, then the parties shall consider this Agreement to be amended and
modified so as to eliminate therefrom that particular area or jurisdiction as to
which such restrictive covenant is so held to be void or otherwise
unenforceable, and, as to all other areas and jurisdictions covered by this
Agreement, the terms and provisions hereof shall remain in full force and effect
as

 

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originally written. The parties to this Agreement further agree that to the
extent any of the foregoing restrictive covenants or agreements should be held
by any court or other constituted legal authority to be effective in any
particular area or jurisdiction only if said covenant is modified to limit its
duration or scope, then the parties shall consider such covenant to be amended
and modified with respect to that particular area or jurisdiction so as to
comply with the order of any such court or other constituted legal authority,
and, as to all other jurisdictions or political subdivisions thereof, such
covenant shall remain in full force and effect as originally written.

 

(b) The Executive Officer acknowledges that each of the restrictions set forth
in Sections 3, 4 and 5 is reasonable as to duration and geographic scope.

 

(c) The Executive Officer understands that the Sterling Entities will not have
an adequate remedy at law for the breach or threatened breach by the Executive
Officer of any one or more of the covenants set forth in this Agreement and
agrees that in the event of any such breach or threatened breach, Bancshares
may, in addition to the other remedies which may be available to it, file a suit
in equity to enjoin the Executive Officer from the breach or threatened breach
of such covenants.

 

8. No Mitigation. In no event shall the Executive Officer be obligated to seek
other employment or take other action by way of mitigation of the amounts
payable to the Executive Officer under any of the provisions of this Agreement
and such amounts shall not be reduced whether or not Executive Officer obtains
other employment.

 

9. Notice. Any notice, or other communication provided or permitted in this
Agreement must be given in writing and may be served by depositing same in the
United States mail in certified or registered form, postage prepaid, addressed
to the party or parties to be notified with return receipt requested, or by
delivering the notice in person to such party or parties or by a nationally
recognized overnight service. Unless actual receipt is required by any provision
of this Agreement, notice deposited in the United States mail in the manner
herein prescribed shall be effective on dispatch. For purposes of notice, the
address of the Executive Officer shall be the address on file with Bancshares as
the Executive Officer’s primary residence.

 

The address of Bancshares and any Sterling Entity shall be:

 

Sterling Bancshares, Inc.

2550 North Loop West

Suite 600

Houston, Texas 77092

Attn: President & Chief Executive Officer

 

Bancshares shall have the right from time to time and at any time to change its
address and shall have the right to specify as its address any other address by
giving at least ten (10) days’ written notice to the Executive Officer. The
Executive Officer shall have the right from time to time and at any time to
change his address and shall have the right to specify as his address any other
address by giving at least ten (10) days’ written notice to Bancshares.

 

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10. Controlling Law. This Agreement shall be governed by, construed and enforced
in accordance with the laws of the State of Texas (without giving effect to
conflicts of laws principles thereof).

 

11. Entire Agreement. Except as provided in Bancshares’ Code of Business Conduct
and Ethics, Code of Ethics for Senior Officers, the written benefit plans and
programs of the Sterling Entities or any signed agreement hereafter executed
between any Sterling Entity and the Executive Officer, this Agreement contains
the entire agreement of the parties with respect to the subject matter hereof.
The Agreement may not be changed orally or by action or inaction, but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, extension or discharge is sought.

 

12. Severability. If any provision of the Agreement is rendered or declared
illegal or unenforceable by reason of any existing or subsequently enacted
legislation or by decree of a court of last resort, the parties shall promptly
meet and negotiate substitute provisions for those rendered or declared illegal
or unenforceable, but all remaining provisions of this Agreement shall remain in
full force and effect.

 

13. Benefit and Burden; Assignment.

 

(a) This Agreement shall not be terminated by any Change of Control. In the
event of any Business Combination, the provisions of this Agreement shall be
binding upon the Surviving Corporation, and such Surviving Corporation shall be
treated as Bancshares hereunder.

 

(b) Bancshares agrees that in connection with any Business Combination, it will
cause any successor entity to Bancshares and/or Bank to unconditionally assume,
by written instrument delivered to the Executive Officer (or his/her beneficiary
or estate), all of the obligations of Bancshares hereunder. Failure of
Bancshares to obtain such assumption prior to the effective date of any such
Business Combination that constitutes a Change of Control shall be a breach of
this Agreement and shall constitute Good Reason hereunder entitling Executive
Officer to compensation and other benefits from Bancshares in the same amount
and on the same terms as Executive Officer would be entitled hereunder upon a
Change of Control Termination. For purposes of implementing the foregoing, the
date upon which any such Business Combination becomes effective shall be deemed
to be the date Good Reason occurs and shall be the effective date of termination
hereunder if requested by the Executive Officer.

 

(c) This Agreement shall inure to the benefit of and be enforceable by the
Executive Officer’s personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees. If the
Executive Officer shall die while any amounts would be payable to the Executive
Officer hereunder had the Executive Officer continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to such person or persons appointed in writing by Executive to
receive such amounts or, if no person is so appointed, to the Executive
Officer’s estate.

 

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14. Voluntary Agreement. The Executive Officer acknowledges that he has been
given an opportunity to review the terms of this Agreement, that he has been
given an opportunity to consult with counsel, or determined that such
consultation is not required, and that he has executed this Agreement
voluntarily.

 

15. Execution. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which shall constitute one
instrument.

 

12

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EXECUTED to be effective as of the date first above written.

 

STERLING BANCSHARES, INC.

By:

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J. Downey Bridgwater

President & Chief Executive Officer

EXECUTIVE OFFICER

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[Executive Name]

 

 

13

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SCHEDULE TO EXHIBIT 10.2

FORM OF SEVERANCE AND NON-COMPETITION AGREEMENT

 

The Severance and Non-Competition Agreements among Sterling Bancshares, Inc.,
Sterling Bank and the officers named below are identical in all respects except
for the effective date, the number of shares of common stock awarded to the
officer, and the county designated in Section 3(a) of the Severance and
Non-Competition Agreement, each as set forth below:

 

Name

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Effective Date

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Stock Award

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County

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Daryl D. Bohls

   June 1, 2004    1,350 shares    Harris County, Texas

Danny L. Buck

   May 1, 2004    3,000 shares    Bexar County, Texas

Wanda S. Dalton

   June 1, 2004    3,000 shares    Harris County, Texas

Clinton Dunn

   June 1, 2004    3,000 shares    Harris County, Texas

James W. Goolsby, Jr.

   June 1, 2004    3,000 shares    Harris County, Texas

Travis Jaggers

   June 1, 2004    3,000 shares    Harris County, Texas

Graham B. Painter

   June 1, 2004    1,000 shares    Harris County, Texas

Stephen C. Raffaele

   June 1, 2004    3,000 shares    Harris County, Texas

Mike Skowronek

   June 1, 2004    3,000 shares    Harris County, Texas