**Exhibit10.2****NON-COMPETE AGREEMENT**     THIS NON-COMPETE AGREEMENT (the “Agreement”) is entered into effective as of this 7th day ofJuly, 2005 between Sterling Bancshares, Inc., a Texas corporation (“Sterling”), and Max W. Wells(the “Key Company Official”).     WHEREAS, simultaneously with the execution of this Agreement, Sterling, SBPB, Inc., a Texascorporation and a wholly owned subsidiary of Sterling (“Merger Sub”), and Prestonwood Bancshares,Inc., a Texas corporation (the “Company”), have entered into an Agreement and Plan of Merger (the“Merger Agreement”) pursuant to which the Company will merge (the “Merger”) with Merger Sub at theEffective Time; and     WHEREAS, after the Merger, Sterling intends to (a) effect the merger of the Company andPrestonwood Bancshares Nevada, Inc., a Nevada corporation and wholly owned subsidiary of theCompany, with and into Sterling Bancorporation, Inc., a Delaware corporation and a direct whollyowned subsidiary of Sterling (“Bancorporation”), with Bancorporation as the surviving corporation,and (b) effect the merger of The Oaks Bank & Trust Company, an indirect wholly owned subsidiary ofthe Company, with and into Sterling Bank, an indirect wholly owned subsidiary of Sterling(“Sterling Bank”), with Sterling Bank as the surviving bank; and     WHEREAS, the Key Company Official is a shareholder of the Company and also serves as anofficer of the Company; and     WHEREAS, the Key Company Official will, as a result of his equity ownership interest in theCompany, be receiving substantial consideration from the Merger of the Company with Merger Sub; and     WHEREAS, Sterling has required, as a condition to its execution of the Merger Agreement, theKey Company Official to execute and deliver this Agreement; and     WHEREAS, the Key Company Official, through his association with the Company, has obtainedknowledge of the trade secrets, customer goodwill, and proprietary information of the Company andits business, which trade secrets, customer goodwill, and proprietary information constitute asubstantial asset to be acquired by Sterling; and     WHEREAS, the Key Company Official, for the consideration set forth below and the considerationto be received in connection with the Merger, has agreed to, and does hereby enter into thisAgreement on the terms and conditions set forth below.     NOW, THEREFORE, in consideration of the foregoing and the premises, representations, andmutual covenants hereinafter set forth, the parties do hereby agree as follows:     1. Defined Terms. Capitalized terms used herein but not otherwise defined shallhave the meaning set forth in the Merger Agreement.
 

 
     2. Consideration. In consideration of the covenants and agreements of the Key CompanyOfficial contained herein, Sterling hereby agrees to pay the Key Company Official as follows:     (a) The consideration stated in the Merger Agreement for the Key Company Official’sequity in the Company.     (b) If Key Company Official accepts employment with Sterling, Bancorporation, SterlingBank, the Company, The Oaks Bank & Trust Company or any of their respective wholly-owneddirect or indirect Subsidiaries (each, a “Sterling Entity”, and together, the “SterlingEntities”) then the Sterling Entities promise to disclose and provide access to certainConfidential Information (as herein defined) of the Sterling Entities.     (c) Upon the execution of this Agreement, Sterling shall and does hereby pay to the KeyCompany Official the sum of $1,000.     (d) Upon the Closing of the Merger and Key Company Official’s acceptance of employmentwith any Sterling Entity, Sterling shall pay and deliver to the Key Company Official thefollowing:A closing bonus of $25,000 cash and a restricted shares stock agreement issuedpursuant to Sterling’s 2003 Stock Incentive and Compensation Plan granting to theKey Company Official an opportunity to acquire 3,000 shares of Sterling Common Stockon the Key Company Official’s date of hire with Sterling Bank. The grant of such3,000 shares of restricted stock shall vest 25% per annum over a period of fouryears and shall otherwise be subject to the terms and conditions of Sterling’s 2003Stock Incentive and Compensation Plan.     3. Non-Competition. Key Company Official acknowledges that contemporaneous with theexecution of this Agreement, Sterling is providing Key Company Official with valuable considerationstated in paragraph 2. Key Company Official’s non-competition obligations are ancillary to theMerger Agreement, Sterling’s agreements to provide the consideration stated in paragraph 2, andother agreements provided herein that are enforceable at the time this agreement is made. In orderto protect Sterling’s interests in the Merger and the consideration that Sterling is providing andwill provide Key Company Official if any Sterling Entity employs Key Company Official, Sterling andKey Company Official agree to the following non-competition provisions. The Key Company Officialcovenants and agrees that from the Closing Date and for the Applicable Period (as hereinafterdefined) after the Closing Date, he shall not:     (a) directly or indirectly, own, manage, operate, control, invest or acquire an equityinterest in any entity located or conducting business in Dallas County or Collin County,Texas, or should Key Company Official accept employment with a Sterling Entity after theClosing, any other county in which Key Company Official’s office was located in the twelvemonths prior to termination of employment with a Sterling Entity, and any county contiguousto such counties (Dallas County, Collin County and such other counties are hereincollectively called, the “Territory”), in each case which
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competes with the banking, lending, deposit taking, and related banking and trustservices business (“Financial Institution Business”) conducted in the Territory by anySterling Entity; provided that Key Company Official shall not be deemed to be in violationof this Section 3(a) should Key Company Official be employed in a location outside theTerritory by a business (including, without limitation, a business with office(s) inside theTerritory) (even if such business competes with the Financial Institution Business or otherbusiness conducted by any Sterling Entity in the Territory) so long as Key Company Officialdoes not otherwise violate the purpose and intent of the provisions of this paragraph 3 bycompeting with the Financial Institution Business conducted by any Sterling Entity in theTerritory;     (b) engage in or carry on, either directly or indirectly, whether for himself or as anemployee, officer, director, agent, consultant, proprietor, partner, stockholder, member,joint venturer, investor, or other paid participant in any business within the Territorywhich competes with the Financial Institution Business conducted in the Territory by anySterling Entity; provided that Key Company Official shall not be deemed to be in violationof this Section 3(b) should Key Company Official be employed in a location outside theTerritory by a business (including, without limitation, a business with office(s) inside theTerritory) (even if such business competes with the Financial Institution Business or otherbusiness conducted by any Sterling Entity in the Territory) so long as Key Company Officialdoes not otherwise violate the purpose and intent of the provisions of this paragraph 3 bycompeting with the Financial Institution Business conducted by any Sterling Entity in theTerritory;     (c) directly or indirectly request any customer or borrower of any Sterling Entity orany 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) directly or indirectly denigrate or in any manner undertake to discredit any of theSterling Entities or any person or operation associated with any Sterling Entity.     Notwithstanding the foregoing, nothing contained in this Agreement shall prohibit the KeyCompany Official from (i) owning not more than one percent (1%) of any corporation the securitiesof which are traded on a national securities exchange or market and which is engaged in a businesswhich is in competition with any Sterling Entity, or (ii) owning an interest in The Oaks TrustCompany or in serving as an officer or director of such company or in servicing accounts of familymembers of the Key Company Official at The Oaks Trust Company.     The non-competition obligations stated herein are not dependent on Sterling’s employment ofKey Company Official with any Sterling Entity. The primary purpose of this Agreement including thenon-competition provision is to effectuate the Merger.     If Key Company Official accepts employment with a Sterling Entity, Key Company Officialwarrants that Key Company Official is not a party to any other restrictive agreement limiting KeyCompany Official’s activities for the Sterling Entities. Key Company Official further warrantsthat at the time of the signing of this Agreement, Key Company Official knows
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of no written or oral contract or of any other impediment that would inhibit or prohibit hisemployment with the Sterling Entities and that Key Company Official will not knowingly use anytrade secret, confidential information, or other intellectual property right of any other party inthe performance of Key Company Official’s duties as an employee should he accept employment with aSterling Entity.     4. Non-Solicitation. From the Closing Date and for the Applicable Period after theClosing Date, the Key Company Official covenants and agrees not to directly or indirectly solicitthe employment of the executive officers or key employees of the Sterling Entities; provided,however, that this Agreement shall not prohibit (a) any advertisement or general solicitation thatis not specifically targeted at such officers or employees, or (b) soliciting the employment of anysuch officer or employee who has been terminated by any Sterling Entity except Key Company Officialmay not solicit any such officer or employee who voluntarily terminated employment or who anySterling Entity terminated for “Cause” within six months of Key Company Official’s termination ofemployment from any Sterling Entity.     5. Confidentiality. The Key Company Official shall not disclose to any person, or useor otherwise exploit for his own benefit or for the benefit of any person other than a SterlingEntity, any Confidential Information (as defined below). The Key Company Official shall have noobligation to keep confidential any Confidential Information if and to the extent disclosurethereof is specifically required by law, judicial or governmental order or other legal process;provided, however, that in the event such disclosure is required, the Key Company Official shall,to the extent reasonably practicable, provide Sterling with reasonably prompt notice of suchrequirement, so that Sterling may seek an appropriate protective order or waive compliance withthis provision with respect to such disclosure. For purposes of this Agreement, “ConfidentialInformation” shall mean any confidential information with respect to the conduct or details of thebusiness of Sterling and any Sterling Entity including, without limitation, information relating toits commercial and retail banking services, mortgage banking services, commercial and consumerloans, merchant credit card services, 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, marketingmethods, policies, personnel, suppliers, competitors, markets or other specialized information orpropriety 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 generallyavailable to the public on the date of this Agreement or (b) becomes generally available to thepublic other than as a result of a disclosure by the Key Company Official in violation of thisAgreement; (c) was or becomes available to the Key Company Official on a non-confidential basisfrom a source other than a Sterling Entity or its representatives, provided that to the knowledgeof the Key Company Official, after due inquiry, such source is not prohibited from disclosing suchinformation to the Key Company Official by a contractual, legal or fiduciary obligation to aSterling Entity or its representatives; or (d) is independently developed by the Key CompanyOfficial without violating his obligations hereunder or as an employee of a Sterling Entity.     6. Applicable Period.
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     (a) The Applicable Period shall commence upon the Closing Date and shall end on eitherthe later of: (i) three years following the Closing Date regardless of whether or not KeyCompany Official commences employment with any Sterling Entity or (ii) if Key CompanyOfficial commences employment with any Sterling Entity, three months following the effectivedate of the termination of the Key Company Official’s employment from any Sterling Entitybased on either the Key Company Official’s voluntary termination of employment without “GoodReason” (as defined below) or Key Company Official’s termination of employment for “Cause”(as defined below). If Key Company Official commences employment with any Sterling Entityand any Sterling Entity terminates the employment of the Key Company Official for any reasonother than for Cause or if the Key Company Official voluntarily terminates employment forGood Reason, then the Applicable Period shall terminate three years following the ClosingDate.     (b) For purposes of this Section, “Cause” shall mean the Key Company Official (i)continually fails adequately to perform the duties reasonably required of him as an employeeas determined by the Sterling Entity for which he works and after thirty days written noticeof the specific failure, Key Company Official fails to adequately correct the performance ofduties as reasonably determined by the Sterling Entity for which he works; (ii) breachesany material provision of this Agreement; or (iii) violates any material rule, policy, orpractice of the Sterling Entity for which he works and that is generally applicable to allemployees of that Sterling Entity.     (c) For purposes of this Section, “Good Reason” shall mean     (i) the assignment to the Key Company Official of any duties materiallyinconsistent in any respect with the Key Company Official’s position (includingstatus, offices, titles and reporting requirements), authority, duties orresponsibilities as contemplated by the terms of the offer letter dated July 7, 2005(“Offer Letter”) or any other action by a Sterling Entity which action results in amaterial diminution in such position, authority, duties or responsibilities,excluding for this purpose an isolated insubstantial and inadvertent action nottaken in bad faith and which is remedied by Sterling promptly after receipt ofwritten notice thereof given by the Key Company Official;     (ii) any termination or material reduction of a material benefit under anyEmployee Benefit Plan in which the Key Company Official participates unless (A)there is substituted a comparable benefit that is economically substantiallyequivalent to the terminated or reduced benefit prior to such termination orreduction or (B) benefits under such Employee Benefit Plan are terminated or reducedwith respect to all employees previously granted benefits thereunder (a reduction inannual base salary in excess of ten percent (10%) in any one calendar year shall bedeemed to be a material reduction of a material benefit and provided that theinitial annual base salary shall be the amount specified in the Offer Letter);
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     (iii) the relocation or transfer of the Key Company Official’s office to alocation outside of Dallas County or Collin County, Texas or any county contiguousto such counties without the Key Company Official’s written consent; or     (iv) without limiting the generality of the foregoing, any material breach by aSterling Entity of any other written agreement between the Key Company Official andsuch Sterling Entity.For purposes of this Agreement, “Employee Benefit Plan” shall mean each written plan,program, policy, payroll practice, contract, agreement or other arrangement providing forcompensation, severance, termination pay, performance awards, stock or stock related awards,fringe benefits or other employee benefits of any kind, whether formal or informal, fundedor unfunded, and whether or not legally binding, including each “employee benefit plan,”within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,as amended (“ERISA”), and each “Multiemployer Plan” within the meaning of Section 3(37) or4001(a)(3) or ERISA.     (d) The Applicable Period shall end immediately upon the sale of the Company orSterling Bank, or their respective successors, by any Sterling Entity to a non SterlingEntity after the Closing Date, the direct or indirect (by operation of law or otherwise)closing, sale or other disposition of all banking locations of all Sterling Entities inDallas County or Collin County, Texas, or a Change in Control as defined below.     (e) Sterling shall cause Sterling Bank to offer Key Company Official employment priorto the effective date of the Merger and if s/he accepts employment, her/his employment shallcontinue for an indefinite period of time. The Key Company Official acknowledges that anyemployment with any Sterling Entity is solely “at-will” and either party may terminate theemployment relationship at any time, with our without Cause. The Key Company Official alsoacknowledges that nothing in this Agreement, any Sterling Entity handbook or any othersimilar writing can change the Key Company Official’s “at-will” status and that nosupervisor, manager, or other employee of any Sterling Entity has the authority to changethe “at-will” status of the Key Company Official’s employment except that the “at-will”employment relationship may be changed if it is specifically set forth in writing and signedby the Chief Executive Officer of Sterling.7. Other Agreements.     (a) Subject to the immediately following sentence, the parties to this Agreementfurther agree that to the extent the covenants contained in Sections 3, 4 or 5 are held byany court or other constituted legal authority to be unenforceable, then the parties shallconsider this Agreement to be amended, modified, and reformed to be enforceable to themaximum extent permitted by law, and, to the extent permissible by law, the terms andprovisions hereof shall remain in full force and effect as originally written. The partiesto this Agreement further agree that to the extent any of the foregoing
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restrictive covenants should be held by any court or other constituted legal authorityto be effective in any particular area or jurisdiction only if said covenant is modified tolimit its duration or scope, then the parties shall consider such covenant to be amended andmodified with respect to that particular area or jurisdiction so as to comply with the orderof any such court or other constituted legal authority, and, as to all other jurisdictionsor political subdivisions thereof, such covenant shall remain in full force and effect asoriginally written.     (b) The Key Company Official acknowledges that each of the restrictions set forth inSections 3 and 4 is reasonable as to time, geographic area, or scope of activity.     (c) The Key Company Official understands that the Sterling Entities will not have anadequate remedy at law for the breach or threatened breach by the Key Company Official ofany one or more of the covenants set forth in this Agreement and agrees that in the event ofany such breach or threatened breach, Sterling may, in addition to the other remedies whichmay be available to it, file a suit in equity to enjoin the Key Company Official from thebreach or threatened breach of such covenants.     8. Termination. In addition to the provisions of Section 6 above, this Agreementshall terminate and be of no further force and effect upon the occurrence of the following:     (a) the termination of the Merger Agreement pursuant to its terms prior to theconsummation of the transactions contemplated thereby,     (b) the direct or indirect (by operation of law or otherwise) closing, sale or otherdisposition of all banking locations of all Sterling Entities in Dallas County or CollinCounties, Texas; or     (c) a Change of Control.     For purposes of this Agreement, a “Change of Control” means (i) the acquisition by anyindividual, person, entity or group (within the meaning of Section 13(d) or 14(d)(2) of theExchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under theExchange Act), directly or indirectly, of 50% or more of either the then outstanding shares ofcommon stock of Sterling or Sterling Bank or the combined voting power of the then outstandingvoting securities of Sterling or Sterling Bank entitled to vote generally in the election ofdirectors; or (ii) approval by the stockholders of Sterling or Sterling Bank of (A) areorganization, merger, consolidation, share exchange, or similar form of reorganization ofSterling or Sterling Bank with respect to which the individuals and Persons who were the respectivebeneficial owners of the common stock and voting securities of Sterling immediately prior to suchreorganization, merger, or consolidation do not, following such reorganization, merger orconsolidation beneficially own, directly or indirectly, more than 50% of, respectively, the thenoutstanding equity interests and the combined voting power of the then outstanding votingsecurities entitled to vote generally in the election of directors of the Person resulting fromsuch reorganization, merger or consolidation, (B) a complete liquidation or dissolution ofSterling, or (C) the sale or other disposition of all or substantially all of Sterling’s orSterling Bank’s assets.
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     In the event of a Change of Control as defined above and in conjunction with the terms ofSterling’s 2003 Stock Incentive and Compensation Plan, any outstanding shares and/or optionsgranted under the plan would immediately become fully vested.     9. Notice. Any notice, or other communication provided or permitted in this Agreementmust be given in writing and may be served by depositing same in the United States mail incertified or registered form, postage prepaid, addressed to the party or parties to be notifiedwith return receipt requested, or by delivering the notice in person to such party or parties or bya nationally recognized overnight service. Unless actual receipt is required by any provision ofthis Agreement, notice deposited in the United States mail in the manner herein prescribed shall beeffective on dispatch. For purposes of notice, the address of the Key Company Official shall be asfollows:Max W. Wells